Q.B.G. A.D. 1999 No. 2721 J.C. R. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF REGINA BETWEEN: THE HEIGHT OF EXCELLENCE FINANCIAL PLANNING GROUP INC. APPLICANT (PLAINTIFF) and DARCY BERGEN RESPONDENT (DEFENDANT) R. Shawn Smith, Q.C. for the applicant (plaintiff) Kevin C. Mellor for the respondent (defendant) FIAT SCHEIBEL J. October 22, 1999 [1] The plaintiff, referred to as “TFPG”. seeks an interim mandatory injunction requiring the defendant to:(i) forthwith deliver up to TFPG, or its authorized representative, all files, documents, statements of account, records, plans, software or other TFPG related material respecting clients of TFPG who have had their accounts managed or administered by Darcy Bergen, as well as all TFPG promotional and informational items, signs and the like;(ii) immediately cease and desist from any and all contact, either direct or indirect, with those clients of TFPG whose account was administered or managed by the said Respondent or anyone associated with him or employed by him with a view to soliciting, serving, catering to or attempting to direct away from TFPG such clients or any associate or affiliate of such client, or any person who was a prospective client of TFPG;(iii) make no attempt, either direct or indirect, to solicit from any TFPG client or prospective client, any business of any nature or kind similar to that done by TFPG. II [2] At the outset of the argument counsel agreed that the relief sought in paragraph (i) of the draft order should issue with the right of the respondent to make and keep copies of the documents turned over to the applicant. That part of the order may issue. [3] During argument counsel for the applicant abandoned the relief sought in paragraph (iii). This leaves the issues raised in paragraph (ii) of the draft order to be resolved. [4] The respondent was registered representative of the applicant and entered into Shareholder Advisor Agreement whereby the respondent agreed he would sell and represent only the applicant’s financial products and services which the applicant approved. In exchange for this the respondent received commissions from the applicant. [5] It is alleged the respondent sold unapproved investments of competitor and as result he was terminated pursuant to the agreement. It is also alleged that the respondent continues to refuse to turn over to the applicant its property and client files. As well, the applicant claims the respondent has and continues to breach the “non-solicitation” clause contained in the agreement by carrying on the same business on his own. It is also alleged that the respondent continues to solicit the applicant’s clients. [6] In addition to numerous clauses in the agreement setting out the rights and obligations of the parties, the respondent agreed “that breach by him of any of the provisions contained in the agreement may cause the company great and irreparable injury and damage which cannot be reasonably or adequately compensated in damages in any action in law, and the contractor hereby expressly agrees that the company shall be entitled to the remedies of injunction, specific performance and other equitable relief to prevent breach or recurrence of breach ....” [7] Counsel for the respondent relies on the decision in The Height of Excellence Financial Planning Group Inc. v. Stanley Eric Dixon, [1999] S.J. No. 629 (QL); 1999 SKQB 101 (CanLII) (Q.B.) as support for the position that the application should be denied. That decision involves the same plaintiff and similar facts, but different defendant. In that case the application was dismissed on the grounds the applicant had failed to establish, on balance of probabilities, any irreparable harm and also had failed on the balance of convenience test. [8] That decision, however, did not deal with the provisions of the contract signed by both parties which provides that upon certain breaches of the agreement by the respondent the applicant would be entitled to, among other things, an injunction to prohibit the very breaches that the applicant now complains of. [9] The respondent claims that this agreement is one sided and favours the applicant and that the respondent did not have independent legal advice prior to signing the contract. [10] have no doubt the agreement favours the applicant but there is no reason in law why an informed person cannot sign an agreement which favours the other party. The respondent represented, warranted and agreed he had the opportunity to seek independent legal advice prior to signing the agreement. It is not clear whether he exercised that option even though he now claims he did not. [11] am not able to conclude that the agreement is unconscionable nor am able to find that the agreement is one which would be against public policy. It merely sets out the terms both parties agreed to for valuable consideration. [12] The issue of contractual right to have injunctive relief is not conclusive. It is only one factor, but it is an important factor in the exercise of the discretionary power of the court. [13] This issue is discussed in S. M. Waddams, The Law of Contracts, 4th ed. (Toronto: Canada Law Book Inc., 1999) at §695, pp. 512 and 13 where the author states: Where contract expressly provides that the promisor will submit to specific remedies, the court’s attitude has been to take account of the provision, as relevant to the exercise of judicial discretion, but not to admit the parties’ agreement as controlling. In the Alabama case of Stokes v. Moore [77 So. 2d 331 (1955)], the Supreme Court of Alabama said: We do not wish to express the view that an agreement for the issuance of an injunction, if and when stipulated state of facts arises in the future, is binding on the court to that extent. Such an agreement would serve to oust the inherent jurisdiction of the court to determine whether an injunction is appropriate when applied for and to require its issuance even though to do so would be contrary to the opinion of the court. The court went on to say, however, that “The Provision for an injunction is important in its influence upon an exercise of the discretionary power of the court to grant temporary injunction”. similar view was taken by Branson, J., in Warner Bros. Pictures Inc. v. Nelson [[1937] K.B. 209], where the express agreement of movie actress that the contract should be enforceable by injunction was held to be relevant and persuasive, though not determinative. It is appropriate in this way to give weight to the parties’ agreement, but altered circumstances may give to decree of specific enforcement an effect that had not been anticipated and might be oppressive, and consequently the court, which has to make and enforce the order, can never relinquish ultimate control of it and responsibility for it. [14] The judgment in Dixon, does not deal with the issue of contractual right to this relief. It is not clear if it was even argued before the chambers judge. In any event, as have stated, it is an important factor in this case. [15] In order to succeed the applicant must also satisfy the Court (1) that the right to an interlocutory injunction is clear; (2) that there is serious question to be tried and there is strong prima facie case; (3) that irreparable harm will result in the absence of the injunction; and (4) if there is doubt as to the possibility of an adequate remedy in damages, there must be determination, as to which party, on balance of convenience, is likely to suffer greater harm from the granting or refusal of injunctive relief. See Deloitte, Haskins Sells v. Brooker, Robinson, O’Grady and Ernst Whitney (1982), 1982 CanLII 2443 (SK QB), 23 Sask. R. 58 (Q.B.), Lutes v. Board of Education of Prairie View School Division No. 74 (1992), 1992 CanLII 7997 (SK QB), 101 Sask. R. 232 (Q.B.) and Dixon, supra. [16] On the material filed and taking into account the respondent agreed to the remedy sought, am satisfied the applicant has met the test for injunctive relief. However, am not prepared to grant the relief as set forth in paragraph (ii) of the draft order. It is too restrictive and denies other individuals freedom of choice as to which party they wish to deal with on their investments. Both counsel have agreed that if the applicant succeeds that should make the order set out below. [17] In addition to the relief granted above set forth there will be an order that the respondent shall:(a) immediately cease and desist from any and all contact, either direct or indirect, with those clients of TFPG whose account was administered or managed by the said respondent or anyone associated with him or employed by him with a view to soliciting, serving, catering to or attempting to direct away from TFPG such clients or any associate or affiliate of such client, or any person who was a prospective client of TFPG, until further order of the court, saving that the above restriction shall not prevent a client or prospective client of TFPG from, of their own volition, contacting, consulting or engaging in any business with Darcy Bergen and further, the above restriction shall not operate to prevent or hinder Darcy Bergen from advertising his services in any media form or outlet, including seminars.
FIAT. The former registered representative of TFPG was terminated for selling unapproved investments in breach of a Shareholder Advisor Agreement which permitted the sale of TFPG's financial products and services only. TFPG sought an interim mandatory injunction requiring the respondent to return all materials and files respecting TFPG's clients, to cease any contact with its clients, and to make no attempt to solicit any current or prospective client. HELD: The respondent was ordered to immediately cease all contact with TFPG clients whose account the respondent, or anyone associated with him, had administered with a view to soliciting or directing a client, affiliate or associate away from TFPG. The restriction would not prevent a client or prospective client from engaging in any business with the respondent nor was he prevented from advertising his services. 1)It was agreed that the respondent should return all of TFPG's files and materials with a right to make and keep a copy.  2)TFPG abandoned the relief sought respecting solicitation of any business of any nature similar to that of TFPG from any TFPG client or prospective client. 3)The agreement merely set out the terms both parties agreed to for valuable consideration. It was not unconscionable nor against public policy. The respondent had warranted that he had an opportunity to seek independent legal advice prior to signing the agreement. The applicant met the test for injunctive relief but the relief as set out in the draft order was too restrictive and denied others freedom of choice as to which party they wished to deal with. 4)A contractual right to injunctive relief is only one factor. The applicant must establish that the right to interlocutory injunction is clear; there is a serious question to be tried and a strong prima facie case; that irreparable harm will result; if there is a doubt as to whether there is an adequate remedy in damages there must be a determination, on a balance of convenience, which party is likely to suffer a greater harm.