The case below is from the Canadian Legal Information Institute (CanLII)

COURT FILE NO.: 09-CV-00371438

DATE: 20090521

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

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Dynamex Canada Franchise Holdings Inc. and Dynamex Canada Corp.

Plaintiff

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P&D Investments Ltd. (O/A Knight Courier Service PDI), Philip Lavoie, Diane Lavoie, Diamond North Forwarding and Robert Baier

Defendants

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Mr. P. Henein

for the Plaintiff

Mr. M. Miller and Mr. T. Arndt

for the Defendants

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HEARD: May 8, 2009

MARROCCO J.

[1] The plaintiffs brought this motion for an interim injunction to restrain breach of restrictive covenants contained in a franchise agreement, a purchase agreement and a consulting agreement. P&D Investments Ltd. (O/A Knight Courier Service PDI), Philip Lavoie and Diane Lavoie entered into the franchise agreement and Robert Baier entered into the purchase agreement and the consulting agreement.
P&D Investments Ltd. (O/A Knight Courier Service PDI), Philip Lavoie, Diane Lavoie & Diamond North Forwarding

[2] The plaintiffs specifically requested an order restraining, during and for a two-year period following termination of, the franchise agreement, these defendants from directly or indirectly carrying on, being engaged in, employed in, interested in or advising any business operating in competition with or similar to the plaintiffs in the Prince Albert or Saskatoon areas. They requested an order prohibiting these defendants from soliciting employees of Dynamex or another Dynamex franchisee during the same period. They requested an order restraining the use of confidential information for the benefit of the defendants or a third party. The plaintiffs requested an order restraining these defendants from using Dynamex confidential information or disclosures relating to its system and business including but not limited to, the contents of its franchise manuals. Finally they requested an order restraining the defendants from marketing, promoting or advertising any aspect of their business as the same as or similar to the business franchised and operated under the franchise agreement.

[3] Dynamex Canada Franchise Holdings Inc. and these defendants entered into the franchise agreement with which we are concerned. Dynamex Canada Corp. was not a party to that agreement. There was no suggestion that the agreement had been assigned to Dynamex Canada Corp.

[4] Paragraph 32 provides that the franchise agreement will be construed in accordance with and governed by the laws of the province where the franchised business is located namely Prince Albert Saskatchewan. Paragraph 35 of the franchise agreement establishes that the agreement and any schedules constitute the entire agreement between the parties. Paragraph 40 of the franchise agreement provides that any court action must be brought in the City of Toronto. Therefore this motion will be determined by this court applying the law of Saskatchewan.

[5] Paragraph 22 of the franchise agreement sets out the noncompetition and non-solicitation clause. I reproduce it in its entirety:

Neither you nor Guarantor will, without Franchisor's prior written consent: (a) during the Term and any renewal period, directly or indirectly, carry-on or be engaged, employed or interested in or advise any business operating in competition with or similar to the Franchised Business; or (b) during the two (2) year period following the expiration or termination of this agreement for any reason whatsoever, directly or indirectly, carry-on or be engaged, employed or interested in or advise any business competitive with or similar to that of the Franchised Business, operating within the Territory, and/or within the Region.

Neither you nor Guarantor will, without Franchisor's prior written consent, during the Term in any renewal period, during the two (2) period following the expiration or termination of this agreement, directly or indirectly, hire, solicit, interfere with or entice away, from Franchisor or any other franchisee of Franchisor, any employee of Franchisor or any employee of another franchisee of Franchisor.

You shall have each Covenantor execute such agreements as Franchisor specifies to ensure that each Covenantor is under similar duties as you are under this Section.
Background

[6] Diane Lavoie's assertion, in one of her two affidavits, that she and her husband Philip Lavoie have operated courier companies in the province of Saskatchewan particularly in the cities of Saskatoon and Prince Albert for approximately 15 years was not disputed.

[7] In 2003, P&D Investments Ltd. (O/A Knight Courier Service PDI), the Lavoie’s limited company, entered into a three-year service supply agreement with Dynamex Canada Corp. The terms of payment required Dynamex Canada Corp. to pay 85% of the applicable billing rate for courier services for its existing (Dynamex Canada Corp.) customers and 90% of the applicable billing rate for courier services for its (Dynamex Canada Corp.) new customers.

[8] Instead of a new three-year service supply agreement in 2006, the franchise agreement of interest in this litigation was entered into April 25, 2006. It required P&D Investments Ltd. (O/A Knight Courier Service PDI) to pay $23,000 as a franchise fee as well as a royalty of 5% on all sales. The franchise arrangement was not commercially successful. In September 2008, P&D Investments Ltd. (O/A Knight Courier Service PDI) purported to withdraw from the agreement and went back to operating its own courier services. This litigation commenced as a result.
The Legal Test for an Interim Injunction under Saskatchewan Law

The Balance of Convenience Test

[9] The law of Saskatchewan requires a party seeking an interim injunction to enforce a restrictive covenant to demonstrate, among other things, that the balance of convenience favors granting the relief. See Pillar to Post v. Hudon 2001 SKQB 369 (CanLII), (2001), 210 Sask. R 95 (Sask. Q.B.). This involves an assessment of which of the parties would suffer greater harm from granting or refusing the interim injunction. See RJR-MacDonald v. Canada (Atty. Gen.), 1994 CanLII 117 (S.C.C.), [1994] 1 S.C.R. 311 at 334.

[10] Counsel for the defendants asserted during argument that granting the interim injunction would put the defendants P&D Investments Ltd. (O/A Knight Courier Service PDI), Philip Lavoie and Diane Lavoie out of business and the defendant Robert Baier out of a job. No issue was taken with this assertion when it was made. Diane Lavoie in her affidavit of March 13, 2009 deposed that the "operation of the courier companies is our source of income allowing us to make a livelihood and raise our family". When she was cross examined on her affidavits no reference was made to this assertion. In practical terms from the defendants perspective, the trial of this matter will be over if the injunction is granted.

[11] William Emmett, Vice President of Corporate Operations for both plaintiffs, deposed, at paragraph 70 of his affidavit sworn January 23, 2009, that if the defendants were able to participate in a competing business despite abandoning the franchise agreement there would be less incentive for other Dynamex franchisees to abide by their agreements. He stated in his affidavit that such a development would have a "detrimental and devastating effect throughout the Dynamex franchise system". In his affidavit Mr. Emmett also indicated that this had the potential to cause the demise of the franchise system in Canada.

[12] Mr. Emmett's cross-examination, on the two affidavits he filed in support of this motion, clarified or qualified these statements. He testified that Dynamex Canada Franchise Holdings Inc. has four Canadian franchises. At question 1155 he stated that that he had no evidence to suggest that the actions of P&D Investments Ltd. (O/A Knight Courier Service PDI), Philip Lavoie and Diane Lavoie affected any of his other franchisees. He testified that none of the four franchisees had ever contacted him to discuss the defendants and their behavior in leaving Dynamex. He also testified that the subject had not come up between the franchisees and Dynamex Canada Franchise Holdings Inc. generally.

[13] There are 34 Dynamex franchisees in the United States. They are franchisees of an American company. There was no suggestion that the American franchise operation was threatened by events occurring in Prince Albert Saskatchewan.

[14] Mr. Emmett's answers on cross-examination do not support the position he advanced at paragraph 70 in his affidavit. Based on Mr. Emmett's answers, I do not accept his assertion in his affidavit that the failure to grant this injunction will have a devastating effect throughout the Dynamex franchise system. To this point it appears that the four franchisees which comprise the Dynamex franchise system in Canada are ignoring this dispute.

[15] I find that the defendants will suffer greater harm if this injunction is granted than the plaintiffs will suffer if it is refused. Accordingly the plaintiffs have not satisfied the balance of convenience test. I find that the balance of convenience favors the defendants.
A Strong Prima Facie Case

[16] Saskatchewan law requires, among other things, where an injunction is sought for breach of a restrictive covenant, a strong prima facie case that the covenant has been breached. See 4064143 Manitoba Ltd. v. Wawryk reflex, (2002), 222 Sask. R. 153 (Sask. Q.B.) at para. 13; Rainbow Cinemas Inc. v. Cineplex Odeon Corp. 2007 SKQB 41 (CanLII), (2007) 291 Sask. R. 74 (Sask. Q.B.) at para. 26., Pillar to Post v. Hudon 2001 SKQB 369 (CanLII), (2001) 210 Sask. R. 95 (Sask. Q.B.) at para. 12.

[17] The affidavit of William Emmett, sworn January 23, 2009, states "Dynamex is a franchisor of businesses providing same-day courier delivery services throughout Canada and the United States". Mr. Emmett states approximately 13 times during the course of his affidavit that Dynamex provides "a same-day courier business". On cross examination he defined a same-day courier as follows: "... customer calls in today and requests a pickup and the pickup is given to a driver, the driver picks up that delivery and get it delivered within the same day."

[18] Diane Lavoie attached as Exhibit A to her affidavit of April 29, 2009 a Dynamex company overview. I note that Dynamex markets itself using the slogan "Dynamex Delivers Now". In addition the overview refers to the "Same-Day Delivery Industry". The overview describes the "Same-Day Delivery Industry" as a $15 billion industry. This overview is consistent with the numerous references in Mr. Emmett's affidavit to Dynamex as a same-day Courier company.

[19] These defendants maintain that they are not providing a same-day courier service. Diane Lavoie deposed that the courier service these defendants are offering is an overnight courier service. She also deposed that they offer other services. Specifically, a flatbed/flat deck truck , tractor and trailer delivery service; a slider-deck service which pulls heavy equipment from the ground onto the truck or trailer without using a forklift; a rural points service which she described as similar to a "milk run"; climate controlled trucking services ; and LTL (less than trailer load) freight services. The evidence established that the defendants P&D Investments Ltd. (O/A Knight Courier Service PDI) Philip Lavoie and Diane Lavoie also operated a courier service in Saskatoon known as Diamond North Forwarding which they claimed was also an overnight courier.

[20] The defendants, to prove their assertion regarding the services they provide, offered to consent to an injunction restraining them from providing same-day service. This did not satisfy the plaintiffs. No evidence was offered to suggest that the defendants are offering same day courier service in Prince Albert or Saskatoon.

[21] Mr. Emmett in his cross-examination defined an overnight courier service as follows "overnight service is a customer calls in today and requires delivery tomorrow or at some point thereafter. That is an overnight service."

[22] When Mr. Emmett was cross examined on the two affidavits which he provided, he stated that Dynamex offered overnight Courier service through an affiliation with Purolator Courier Service. Dynamex referred requests for overnight courier service to Purolator and Purolator referred requests for same-day service to Dynamex. I find that this evidence confirms Diane Lavoie's evidence that Dynamex was not in fact in the overnight courier business.

[23] The evidence established that these defendants offer courier service between Saskatoon and Prince Albert. Once again the defendants insist that this is an overnight service and not a same-day service. There was no evidence suggesting that the defendant's assertion was false. To prove their assertion these are defendants offered to consent to an injunction restraining them from offering same-day courier services between Saskatoon and Prince Albert. This did not satisfy the plaintiffs.

[24] The restrictive covenant requires as well that these defendants not indirectly carry on a similar business.

[25] The evidence does not prove that a same-day courier service, as defined by Mr. Emmett, is the same or similar to an overnight courier service, as defined by Mr. Emmett. According to his definition, a same-day courier service, as the name implies, delivers on the same day that it picks up. An overnight courier service delivers on the next day or sometime thereafter. The emphasis on the same-day nature of the service offered by Dynamex in the company overview attached to Diane Lavoie's affidavit of April 29, 2009 and the repeated references to same-day service in Mr. Emmett's affidavit of January 23, 2009 very strongly suggest that there is a fundamental difference between the two services.

[26] I am not persuaded by the evidence offered on this motion that there is a strong prima facie case that these defendants are directly or indirectly carrying on a business that is the same as or similar to the same- day courier business franchised by Dynamex and thereby in breach of the restrictive covenant in paragraph 22 of the Franchise Agreement.

[27] Paragraph 22 of the franchise agreement provides that the former franchisee will not operate a business that is the same as or similar to the franchised business within the Territory or Region. The terms Territory and Region are defined terms. The definitions are contained in paragraphs 2 (f) and 2 (g) of the franchise agreement or at least they should have been.

[28] Region in paragraph 2(f) is defined as "the geographic region described as such in Schedule A". It is common ground that there is in fact no description of the Region in Schedule A.

[29] Territory in paragraph 2 (g) is defined as "the geographic territory described as such in Schedule A”. Schedule A defines Territory as "indicated in the colour yellow on the map attached hereto...". The City of Saskatoon is not on the map, however, the plaintiffs nevertheless seek an order restraining these defendants in that city.

[30] I attach some significance to the fact that Saskatoon is not on the map describing the Territory. Mr. Emmett on cross examination testified that Dynamex has "bricks and mortar", in Saskatoon. His evidence was that there were problems between the Saskatoon operation and the defendant's franchise in Prince Albert. Had Dynamex granted these defendants a franchise which included Saskatoon then Dynamex would have been competing with itself in that city.

[31] I find that there is not a strong prima facie case that the Territory within which the defendants were to operate as a franchised business included Saskatoon. I find therefore that there is not a strong prima facie case that the defendants agreed to refrain from operating a business that is the same as or similar to the franchised business in Saskatoon.
Irreparable Harm

[32] The law of Saskatchewan requires a party seeking an injunction to enforce a restrictive covenant to demonstrate that irreparable harm will result to it if the injunction is not granted. See Pillar to Post Inc. v. Hudon, supra.

[33] I will not repeat what I said in the portion of these reasons dealing with the balance of convenience concerning the alleged harm to the Dynamex franchise system if this injunction is not granted. I propose to consider other assertions of irreparable harm in this portion of the reasons.

[34] Mr. Emmett swore, in his affidavit of January 23, 2009 at paragraph 72, that there was confusion in the marketplace arising from the transfer of staff and resources of the courier business from Knight Courier Service to Diamond North Forwarding. This overstates the nature of the business being run in Prince Albert.

[35] Diane Lavoie deposed that she and her husband Philip have, as I said earlier, operated courier businesses in Prince Albert and Saskatoon for at least 15 years. Originally their business was not incorporated. It was called P & D Courier. Later after receiving legal advice they incorporated P&D Investments Ltd. (O/A Knight Courier Service PDI). That company now operates two overnight courier services; Knight Courier Service in Prince Albert and Diamond North Forwarding in Saskatoon. The evidence was not clear what facilities, if any, they have in both places. The courier services provide work for a number of drivers who are independent contractors. Knight Courier Service and Diamond North Forwarding operate out of different offices but all of the billing and administration occurs at the office of Knight Courier Service. Accounts Receivable for both Knight Courier Service and Diamond North Forwarding is handled out of the kitchen at the family farm. Both services pick up and deliver in other areas besides Prince Albert and Saskatoon. A pickup in Saskatoon by Diamond North Forwarding for delivery outside of Saskatoon might be handled by Knight Courier Service.

[36] I can appreciate from this evidence that a customer might be confused about whether Knight Courier Service or Diamond North Forwarding was delivering for them. This evidence does not persuade me that the possible confusion extends to Dynamex Canada Franchise Holdings Inc. or Dynamex Canada Corp. I reject the assertion in Mr. Emmett's affidavit that the transfer of staff and resources created confusion affecting the plaintiffs.

[37] Mr. Emmett also deposed in paragraph 72 of the January 23, 2009 affidavit that the confusion in the marketplace was "exacerbated by the defendants asserting a nonexistent affiliation between Dynamex and Diamond North Forwarding to customers" (underlining mine). Mr. Emmett's cross examination left the impression that these defendants were making efforts to ensure that customers knew that they were no longer affiliated with Dynamex. Hence his use of the phrase "nonexistent affiliation" in his affidavit. This is consistent with the evidence of Diane Lavoie which was that the franchise arrangement with Dynamex was driving her and her husband into bankruptcy because Dynamex charged a royalty on gross revenues, unilaterally raised courier service prices and failed to ensure that Dynamex Saskatoon cooperated with them. The assertion of a "nonexistent affiliation" in such circumstances does not prove that the Dynamex will suffer irreparable harm if Knight Courier Service and Diamond North Forwarding are not shut down.

[38] It is also true that these defendants are using the same phone number and fax number that they had when they were a franchisee. However these numbers were also the same telephone and fax numbers they had before becoming a franchisee. The use of these telephone and fax numbers does not persuade me that the public will confuse these defendants with Dynamex and that irreparable harm to Dynamex will result.

[39] Mr. Emmett testified that losing the Prince Albert franchise severely limited Dynamex's access to the Prince Albert and northern Saskatchewan market. He asserted that the Dynamex brand would suffer, if the defendants trade on the name and reputation established through their affiliation with Dynamex first as an agent and then as a franchisee without any corresponding obligation to maintain minimum standards. As stated earlier Diane and Philip Lavoie were in the courier business for 15 years. They were under contract to supply services to Dynamex for only three of those years. The thrust of the defendants' evidence is that in order to save their courier business they were compelled to sever their relationship with Dynamex. In that factual context it is impossible to accept the assertion that the failure of Philip and Diane Lavoie to maintain appropriate minimum standards for their company will irreparably or otherwise harm Dynamex.

[40] At paragraph 73 Mr. Emmett claimed that P&D Investments Ltd. (O/A Knight Courier Service PDI) was given the opportunity to service a company called Canpar and that these defendants have continued to provide courier services to that company after abandoning the franchise agreement. Even if this statement is true it is not an assertion of irreparable harm.

[41] At paragraph 75 Mr. Emmett stated that Dynamex was working on an RFP for a large contract that will require an office in Prince Albert and as a result of the actions of these defendants, Dynamex was now required to find new premises and staff. In his April 29, 2009 cross-examination Mr. Emmett stated that no firm decision had been reached about locating in Prince Albert. Mr. Emmett's assertion at paragraph 75, even if true, does not rise to the level of irreparable harm.

[42] I have itemized the plaintiffs’ assertions of irreparable harm for the purpose of analyzing their claim in that regard. When the assertions are viewed cumulatively in the light of all of the evidence, I find that the plaintiffs have not established that either or both of them will suffer irreparable harm if their request for an interim injunction is refused.
The Return of Confidential Information

[43] The plaintiffs also requests an order restraining these defendants from using for their own or a third party's benefit confidential information and disclosures including the contents of the franchise manuals relating to the Dynamex system and its business affairs. On cross examination Mr. Emmett indicated that the documents he was referring to were marketing plans, documents that these defendants might have received from Dynamex Saskatoon, business development plans, educational materials from the online Dynamex University, the franchise agreement, a business plan to develop the Prince Albert and Greater Saskatoon region, franchisee binders, a computer disk with the binders in electronic form and Dynamex business systems information.

[44] Diane Lavoie in an affidavit sworn April 29, 2009 and upon which she was cross examined listed in Exhibit B the Dynamex materials in her possession. Diane Lavoie was cross examined on this affidavit but no reference was made to her assertion that the documents in Exhibit B were the only ones she had. There was no suggestion that Dynamex University, an online Dynamex educational site had ever been accessed by these defendants. The documents listed in Exhibit B are standard operating procedures effective in June 2006 for remittance of royalties to Dynamex as well as documents concerning preauthorized debits. Suffice to say these documents are hardly confidential and it is inconceivable that continued possession of these documents by the defendants is causing or will cause irreparable harm to the plaintiffs.

[45] I am not satisfied that there is a strong prima facie case that these defendants are in possession of any documents other than those which Diane Lavoie acknowledged in her affidavit of April 29, 2009. I am not satisfied that there is a strong prima facie case that the documents in Diane Lavoie's possession are confidential. I am not satisfied that any irreparable harm will result to the plaintiffs from the defendants possession of those documents. I am not satisfied that any irreparable harm will result to the plaintiffs, if this aspect of the request for an injunction is refused
Robert Baier

[46] The plaintiffs seek to enjoin Robert Baier from directly or indirectly soliciting the plaintiffs’ customers or employees. They also seek to restrain him from assisting anyone else from doing the same. They seek to restrain him from having an interest in any person soliciting the plaintiffs’ customers and employees. They apply to restrain him from engaging in "same day ground courier services in the Saskatoon region which includes Prince Albert.". Finally they seek to prevent him, for five years, from revealing confidential information including the list of customers or suppliers of Dynamex Canada, its trade secrets, production processes and materials, formulae, research techniques or accomplishments, or his knowledge of the business or financial affairs of Dynamex Canada.
Background

[47] Robert Baier was the owner and operator of RPB Courier Inc.. Through a purchase agreement dated December 14, 2007 Dynamex Canada Corp. purchased RPB Courier Inc.'s customer list for $40,000 +10% of the gross revenues from those customers during the period January 21, 2008 to January 19, 2009. Dynamex Canada Corp. also entered into a consulting agreement with Robert Baier on the same date. This contract paid the defendant Robert Baier a consulting fee of $238 per day for each day services were provided.

[48] Paragraph 6 of the Purchase Agreement contained a noncompetition clause in the following terms:

the Vendor, including its current directors and shareholders (Robert Baier) hereby agrees that, for a period ending on December 31, 2012 it shall not, directly or indirectly, be engaged in the Same Day Ground Courier Services business in the Saskatoon Region (as defined herein). As used herein, "Saskatoon Region" shall mean the city of Saskatoon and the area within 100 mile radius from such city. The Vendor, including its current directors and shareholders (Robert Baier) also agrees that during the same period it will not assist any other party directly or indirectly, to solicit Same Day Ground Courier Services business from, market or otherwise offer Same Day Ground Courier Services to, any of the customers included in the Customer List. The Vendor will use its reasonable best efforts to refer to Purchaser any of such customers that contact the Vendor for the provision of Same Day Ground Courier Services during the period in which this covenant remains in effect. For the purposes of this Agreement, the Vendor shall not be deemed to have "solicited" any person unless the Vendor intentionally took one or more affirmative steps to influence such person. The Vendor acknowledges that a violation of the agreements and covenants contained herein may cause irreparable damage to Purchaser and that Purchaser may have no adequate remedy at law for such violation. Accordingly, the Vendor agrees that Purchaser's right to injunctive relief shall be cumulative and in addition to whatever remedies Purchaser may have that law. Further the Vendor recognizes and agrees that (i) this agreement is necessary and essential to protect the business of Purchaser and to realize and derive all of the benefits, rights and expectations of conducting such business, and (ii) that the area and duration of the covenants herein are in all things reasonable and (iii) that good and valuable consideration exists for the Vendor being bound by such covenants.

[49] Paragraph 14 of the Purchase Agreement provides that the law governing this agreement shall be the laws of the province of Nova Scotia.

[50] Paragraph 2.4 of the Consulting Agreement contained the following term respecting confidentiality:

The Consultant shall not, during the term of this agreement or thereafter for a period of five years, reveal, divulge or make known to any persons or entity, including other clients and solely excluding the Company and its duly authorized employees, or use for his own or any other's benefit, the information he possesses or may acquire about certain matters and things which are confidential to the company and the exclusive property of the company.

Such information includes, but is not restricted to, the list of customers or suppliers of the company, or its trade secrets, production processes and materials, formulae, research techniques or accomplishments or his knowledge of any of the business or financial affairs of the Company or any other information reasonably regarded by the company is confidential.

[51] Paragraph 2.5 of the Consulting Agreement sets out the non-solicitation clause in the following terms:

During the term of this Agreement and for two years thereafter, the Consultant shall not directly or indirectly solicit the Company's customers or its employees, assist any other person to do so, or have any financial interest in any person which does so.

[52] There is no provision in the Consulting Agreement concerning the applicable provincial law. This proceeding was brought in Ontario and Dynamex Canada Corp. according to the terms of the Consulting Agreement has its offices in Mississauga Ontario and so I will assume that the law of Ontario applies to the interpretation of this agreement.
The Evidence Concerning Robert Baier

[53] It is the plaintiffs position that the defendant Robert Baier is in violation of both agreements because he is assisting a Dynamex competitor in Saskatoon namely Diamond North Forwarding. The factum also complains that Robert Baier solicited several of his former customers who were included on the Customer List which he sold to the plaintiff Dynamex Canada Corp. Finally it is claimed that Robert Baier solicited a Dynamex independent contractor on behalf of Diamond North Forwarding.

[54] Mr. Emmett deposed that Robert Baier met with Diane and Philip Lavoie on June 18, 2008 on behalf of Dynamex to help them identify and pursue business opportunities in Prince Albert. Mr. Emmett claimed that Robert Baier in September 2008 began soliciting clients for P & D Investments Ltd. (O/A Knight Courier Service PDI) and Diamond North Forwarding in contravention of his contractual obligations. The plaintiffs submitted that Robert Baier works for Diamond North Forwarding and has identified himself as the manager of Diamond North Forwarding.

[55] The plaintiffs also claimed that Robert Baier solicited former Dynamex contractors to work for P & D Investments Ltd. (O/A Knight Courier Service PDI), specifically Brian Breit. They maintained that Brian Breit was a former Dynamex Saskatoon driver and that in September 2008, fifteen Dynamex customers serviced by Brian Breit informed Dynamex that they would no longer be using its services. Finally the plaintiffs state that by March 2009 only 34 of the 260 clients included in the Customer List purchased from Robert Baier were using Dynamex's services.

[56] William Emmett at paragraph 54 of his affidavit sworn January 23, 2009 sets out the basis for the claim that Robert Baier was soliciting customers of Dynamex for the other defendants. He deposed that he was told by Brandon Snowsell, the Branch Manager of Dynamex Saskatoon that Heather Menard, the Operations Supervisor of Dynamex Saskatoon, spoke to a representative of Saskatoon Radiator Sales who told her that Robert Baier had been at Saskatoon Radiator Sales trying to convince them to move their business to his new courier service and had provided them with a rate sheet and business card.

[57] This evidence of William Emmett is hearsay and while it is admissible on this motion its ultimate reliability is another matter. Mr. Emmett during his cross examination on April 30, 2009 at question 1039 indicated that other than this statement at paragraph 54 he had no other evidence that Robert Baier was soliciting Dynamex customers who were on his Customer List. Robert Baier in his cross examination acknowledged that the president of Saskatoon Radiator Sales was a friend of his. He also indicated and he was not contradicted by reply evidence that to the best of his knowledge Saskatoon Radiator Sales was still a customer of Dynamex in Saskatoon. Robert Baier indicated on his cross examination that Saskatoon Radiator Sales was not currently and to his knowledge never had been a client of Diamond North Forwarding.

[58] I cannot find on this evidence that there is a strong prima facie case that Saskatoon Radiator Sales or any other customer on the Customer List sold by Robert Baier to Dynamex was directly or indirectly solicited by Robert Baier on behalf of Diamond North Forwarding or any of the other defendants. The evidence does not establish and I do not find that Robert Baier assisted any of the other defendants in soliciting customers of Dynamex.

[59] Mr. Emmett in his affidavit also deposed at paragraph 56 that Ms. Heather Menard, the Operations Supervisor of Dynamex Saskatoon, was told by someone whom he does not name that Brian Breit was leaving to work with Robert Baier. When Robert Baier was cross examined by counsel for the plaintiffs it was not suggested to him that he had solicited Brian Breit for Diamond North Forwarding or anyone else. Diane Lavoie during her cross examination admitted that Brian Breit was a contractor used by P & D Investments Ltd. (O/A Knight Courier Service PDI).

[60] I am not satisfied that there is a strong prima facie case that Robert Baier solicited Brian Breit to do work for Diamond North Forwarding and thereby indirectly solicited customers of Dynamex serviced by Brian Breit. I am not persuaded by the evidence that there is a strong prima facie case that Robert Baier assisted the other defendants to directly or indirectly solicit Brian Breit or any other employees of Dynamex.

[61] Robert Baier in his cross examination testified that he was employed with Diamond North Forwarding and as well operated his own piloting service. He explained on cross examination that a piloting service is one in which he drives a truck in front of a truck which is carrying an oversized load. It is the pilot’s responsibility to direct the driver of the oversized load. On cross examination Robert Baier said that he worked for Diamond North Forwarding loading and unloading trucks and driving the rural routes. He testified that since September 2008 he worked on average four days a week.

[62] The plaintiffs at paragraph 24 of their factum submitted that Robert Baier on at least one occasion represented himself as the manager of Diamond North Forwarding. This assertion relied on the report of a person named Larry Hartwig dated October 31, 2008. This report was attached as an exhibit to the affidavit of William Emmett. If I assume that the report of Mr. Hartwig is evidence of the facts contained in it, then I have to consider precisely what he has said. According to his report, he called Diamond North Forwarding on October 24, 2008 at 9:35 AM "to inquire about their service and was referred to Bob Baier manager of Diamond North Forwarding". It is not clear whether Mr. Hartwig is reporting that the person who answered the phone told him that Robert Baier was the manager of Diamond North Forwarding or that this was an assumption that Mr. Hartwig had made about the role of Robert Baier at Diamond North Forwarding. In any event, Mr. Hartwig did not say that Robert Baier represented himself as the manager of Diamond North Forwarding.

[63] Mr. Hartwig also states in his report that he met Robert Baier on October 27, 2008 and received documents from him at that time. Robert Baier provided Mr. Hartwig with a business card. It was not Robert Baier's business card. It was the business card of Philip Lavoie.

[64] Robert Baier was asked on cross examination whether he had ever referred to himself as the manager of Diamond North Forwarding and he denied it. He was not otherwise cross examined about his encounter with Mr. Hartwig.

[65] I am not persuaded by the evidence that Robert Baier is the manager of Diamond North Forwarding or that he ever represented himself to be such. I am not persuaded by the evidence that there is a strong prima facie case that Robert Baier is the manager of Diamond North Forwarding or that he represented himself as such.

[66] As I indicated earlier, I am not prepared to find on the evidence on this application that the overnight courier business is the same as or similar to the same day courier business. Accordingly, I am not prepared to find that there is a strong prima facie case that Robert Baier, who is admittedly employed by the defendants, is directly or indirectly engaged in the Same Day Ground Courier Service Business contrary to paragraph 6 of the Purchase Agreement.

[67] When I view the evidence tendered by the plaintiffs against Robert Baier in its totality, I find that the plaintiffs have not demonstrated a strong prima facie case that Robert Baier breached the non-competition/non-solicitation clause in the Purchase Agreement or the non-solicitation clause in the Consulting Agreement.
The Return of Confidential Information

[68] The plaintiffs also seek an order restraining Robert Baier from revealing, divulging or making known to any persons confidential information including the list of customers or suppliers of Dynamex Canada, its trade secrets, production processes and materials, formulae, research techniques or accomplishments, or his knowledge of the business or financial affairs of Dynamex Canada for a period of five years.

[69] When Robert Baier was cross examined on his affidavit in this matter it was not suggested that he had any confidential information concerning suppliers of Dynamex Canada, trade secrets, production processes and materials, formulae, research techniques or accomplishments or knowledge of the financial affairs of Dynamex Canada.

[70] Obviously Robert Baier is aware of the list of customers that he sold to Dynamex and knowledge of that list may be described, as a result of the sale, as knowledge of the business of Dynamex. It is clear that many of the customers on the list sold by the defendant are no longer Dynamex customers.

[71] I find that there is no strong prima facie case that Robert Baier used his knowledge of the Customer List to directly or indirectly solicit or otherwise do anything to cause Dynamex to lose customers on that Customer List. Robert Baier in his affidavit attributes the loss of customers to the way in which Dynamex behaved after it purchased his customer list. The truthfulness of this assertion is a matter for the trial judge.
Conclusion

[72] The plaintiff's motion for an interim injunction against P & D Investments Ltd. (O/A Knight Courier Service PDI) at, Philip Lavoie, Diane Lavoie and Diamond North Forwarding is dismissed

[73] The plaintiff's motion for an interim injunction against Robert Baier is dismissed.

[74] The defendants shall have their costs in this matter payable forthwith. If the parties cannot agree on the quantum of costs, brief written submissions may be made in that regard.

___________________________

MARROCCO J.

Released: May 21, 2009.

COURT FILE NO.: 09-CV-00371438

DATE: 20090521

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Dynamex Canada Franchise Holdings Inc. and Dynamex Canada Corp.

Plaintiff

- and -

P&D Investments Ltd. (O/A Knight Courier Service PDI), Philip Lavoie, Diane Lavoie, Diamond North Forwarding and Robert Baier

Defendants

REASONS FOR JUDGMENT

MARROCCO J.

Released: May 21, 2009.