Romantic Planet Vacations Inc v Hartman, 2015 ABQB 743

Court of Queen ’ s Bench of Alberta Citation: Romantic Planet Vacations Inc v Hartman, 2015 ABQB 743 Date: 20151124 Docket: 1401 09268 Registry: Calgary Between: Romantic Planet Vacations Inc. Plaintiff (Defendant by Counterclaim) - and - Tara Hartman Defendant (Plaintiff by Counterclaim) _______________________________________________________ Memorandum of Decision of A. R. Robertson , Q.C., Master in Chambers _______________________________________________________ Introduction [ 1 ] This application for

summary judgment, brought by the defendant as plaintiff by counterclaim, is for only a portion of the matters in issue because it is for judgment on the counterclaim, not a dismissal of the main claim. However, in order to properly consider the application, the entire lawsuit must be addressed. Perhaps the evidence in support of the plaintiff’s claim colours the evidence and the arguments on the counterclaim.

[ 2 ] The direction from the Court of Appeal of Alberta in 776826 Alberta Ltd. v. Ostrowercha , 2015 ABCA 49 , para. 9 is that “summary judgment can be given if a disposition that is fair and just to both parties can be made on the existing record”. This follows the new “holistic approach” set out in Windsor v. Canadian Pacific Railway , 2014 ABCA 108 . The issues brought by the defendant here, as plaintiff by counterclaim, revolve largely around the meaning of the agreements between the parties. [ 3 ] Few, if any, of the reported cases dealing with

summary judgment since Windsor involve partial

summary judgment, as we have here. Rule 7.3 allows

summary judgment on part of a claim, although here judgment is sought for the entire counterclaim (subject to the issue of quantum discussed below). This is consistent with Foundational Rule 1.2(1) and (2) which direct the resolution of claims “in a timely and cost-effective way” and that the Alberta Rules of Court are intended to be used “to facilitate the quickest means of resolving a claim at the least expense”. Where part of a claim is straightforward, granting partial

summary judgment should reduce the pre-trial and trial work remaining. Facts [ 4 ] The plaintiff, Romantic Planet Vacations Inc. (“Romantic Planet”) carries on business in Calgary and elsewhere as a travel agency, specializing in a niche travel market, planning honeymoons and destination weddings. It is one of only five travel agencies in Canada that focuses on this market. [ 5 ] The original claim advanced by Romantic Planet was for breach of noncompetition, non-solicitation obligations and confidentiality obligations.

The defendant Tara Hartman defended those claims and she counterclaimed for commissions she says are owing to her pursuant to an Independent Contractor Agreement. [ 6 ] She attempted to continue to provide services to five couples in respect of active travel bookings, after her relationship with Romantic Planet ended.

She argues that that was not only her entitlement under the Independent Contractor Agreement, but also it was her obligation. [ 7 ] However, Romantic Planet demanded the return of the files, demanded that she cease working with those couples, and it refuses to pay her the commissions that she would have earned. Romantic Planet offers to pay 20% of those commissions, referring to a provision in the Independent Contractor Agreement. Ms. Hartman argues that that provision has no application. [ 8 ] This lawsuit was started August 22, 2014, but after an initial flurry of activity, little has happened.

A replevin application was brought by Romantic Planet for the return of files with a companion application for an injunction. Those applications did not proceed. Although Ms. Hartman filed a cross-application, rather than fight the applications brought by Romantic Planet, Ms. Hartman simply returned the files. The application for an injunction was never heard. [ 9 ] Those applications were set to be returnable August 27, 2014 and were supported by an affidavit sworn by Laurie Keith of Oakville, Ontario, the founder and owner of Romantic Planet. [ 10 ] Subsequently, a Notice to Admit was filed March 3, 2015 by Ms.

Hartman’s counsel. I have not been able to find a reply to the Notice to Admit in the court file, although an unfiled Response to Notice to Admit Facts appears in Ms. Hartman’s materials filed for this application. Late Affidavits [ 11 ] This application was filed April 2, 2015, originally returnable April 13, and it was adjourned to be heard as a special application on October 21, over six months later. The supporting affidavit of Ms. Hartman was filed with the application on April 2, 2015. [ 12 ] However, the reply affidavit of Ms. Keith was not sworn until September 24, 2015.

It was filed September 29, only three days before his Hartman’s counsel’s brief was due. [ 13 ] Ms. Hartman’s counsel complains about the late filing of this affidavit. He filed a last-minute rebuttal affidavit with his brief to address things in Ms. Keith’s affidavit. However, counsel for Romantic Planet asserts that an unsworn affidavit was provided to him as soon as Ms. Hartman’s counsel asked where the affidavit was. I asked when that unsworn copy was provided, but counsel was unable to advise.

It seems clear it was provided sometime in September, 2015, perhaps a couple of weeks before the sworn reply affidavit was filed. [ 14 ] In this case, the applicant has not asked to cross-examine on Ms. Keith’s affidavit, but simply filed Ms. Hartman’s affidavit in rebuttal. [ 15 ] It is appropriate to comment on the late filing of Ms. Keith’s affidavit. When an application is adjourned to a special hearing, the date is typically booked months in advance, as here.

Counsel are expected to have their materials filed promptly after the application has been booked, if they have not already been filed, to avoid the kind of last-minute delivery of evidence that we see here. Counsel for the respondent (Romantic Planet) apparently expected Ms. Hartman’s counsel to prepare his brief without knowing what evidence was going to be before the Court. Only when he asked about reply evidence was an unsworn affidavit provided.

[ 16 ] This is disrespectful of both opposing counsel and of the Court, because when evidence is filed late, the responding party is put at an unfair disadvantage, to mitigate the disadvantage applications are often adjourned and the date is wasted - the afternoon could have been used for another application.

The party seeking relief might have to wait another six months for a new date for the special application. [ 17 ] Rule 6.6(1) provides as follows: If the respondent to an application intends to rely on an affidavit or other evidence when the application is heard or considered, the respondent must reply by serving on the applicant a copy of the affidavit or other evidence a reasonable time before the application is to be heard or considered . [ 18 ] Rule 6.6(3) provides as follows: If either the respondent or applicant does not give the other reasonable notice, the Court may impose costs on the party who did not give reasonable notice, and the party who does not give reasonable notice is not entitled to rely on that party’s affidavit or other evidence unless the Court otherwise permits. [Emphasis added in both rules.] [ 19 ] This applies both to applications in morning chambers and to special applications.

When a matter is to be heard as a special application and is booked months in advance, “a reasonable time before the application” is not only a few days before the applicant’s brief is due. That forces a possible rushed rebuttal affidavit from the applicant, cross-examination on the respondent’s affidavit is usually not possible without an adjournment, and it frustrates the preparation of the applicant’s brief. [ 20 ] The Court recognizes that late filing may be done by a respondent deliberately as a strategy to avoid cross-examination and possibly delay the hearing. That is why Rule 6.6(3) is written as it is.

The Court is to simply ignore the late-breaking affidavit, unless it orders otherwise. [ 21 ] If it is done as a strategic move to “sandbag” the opponent, it can seriously backfire. [ 22 ] I make a point of mentioning this rule, and the Court’s expectation, notwithstanding the fact that the applicant has not sought an adjournment, nor asked that I ignore Ms. Keith’s affidavit. However, it may be a factor to take into account when considering costs. Submissions [ 23 ] The position of Ms. Hartman is that this lawsuit has been outstanding for over a year, there is no evidence that she was violating (

a) her obligations of non-competition if they are enforceable, (

b) her obligations not to solicit, or (

c) her obligations not to violate confidentiality; but there is no doubt that she is entitled to be paid commissions on the five active files that were effectively taken away from her by the demands of the plaintiff. Accordingly, she should have

summary judgment for an amount reflecting those commissions. [ 24 ] The response is, in essence, that Ms. Hartman was in violation of the various covenants, and the agreement expressly provided that the five active files could be taken away from her once she terminated the Independent Contractor relationship. Accordingly, there is no commission owing, but Romantic Planet is prepared to pay 20% of them pursuant to a provision that refers to that figure. [ 25 ] Rather than simply reviewing Ms.

Keith’s late-breaking affidavit filed in reply to this application, I have also reviewed her affidavit sworn in support of the replevin and injunction applications, to look for Romantic Planet’s best evidence about its claim. The Issues [ 26 ] The issues are these: 1. Did the facts as advanced in Romantic Planet’s claim justify the termination of work by Ms. Hartman on the five active files? 2. If not, is the claim advanced by Ms. Hartman in her counterclaim sufficiently clear and not contradicted by any evidence, such that she should be entitled to

summary judgment at least as to a declaration of liability and referring the matter to an assessment of the amount, if not actually granting a monetary judgment? 3. Does the evidence allow a monetary judgment, if one should otherwise be granted? 4. Even if the claim is sufficiently clear that judgment should otherwise be granted, should it be stayed pending the resolution of the claim by Romantic Planet? Detailed Review of the Facts The Agreement [ 27 ] Ms.

Hartman was an employee of Romantic Planet during the years 2009 to 2013, initially as a Destination Wedding and Honeymoon Specialist (a travel agent), and later as a Sales Manager. That relationship changed on May 31, 2013 when Ms. Hartman and Romantic Planet entered into an Independent Contractor Agreement.

It is said that the intention was that she develop and book leads through Romantic Planet. [ 28 ] She was paid a total of $31,005.02 in commission as an independent contractor, but Romantic Planet asserts that this was all from leads that Romantic Planet provided to her, and that she did not book or have any leads that she generated solely by herself. (This seems to be contradicted by documentary evidence which I will discuss below.)

[ 29 ] As an employee, at some point she signed an “Employee Confidentiality Agreement” as a stand-alone document, not appended to an employment agreement, as well as a “Covenant Not to Compete”, once again drafted as a stand-alone document, not appended to an employment agreement. Ms. Hartman pleads, in paragraph 24 of her Statement of Defence, that the “Covenant Not to Compete” is unenforceable because it over-reaches and “it extends to keep Hartman, who has over 17 years of experience in the travel industry, out of business.” [ 30 ] When Ms.

Hartman became an independent contractor, the parties signed a formal Independent Contractor Agreement made as of May 31, 2013. It provides, in some detail, for obligations of both parties to ensure that the relationship from that point forward was an independent contractor relationship and not an employment relationship. [ 31 ] Various provisions of the agreement must be looked at closely in order to analyze the claim for which judgment is now sought, and the responses. I have emphasized passages that are of particular interest.

There are various small errors or anomalies, not all of which I have identified with “[sic]”. [ 32 ]

Section 2 provides: It is required that the IC [Independent Contractor] be registered as a Sole Proprietor or a Corporation with voting control held by the IC prior to or within two (2) weeks from the commencement date of this agreement , at the expense of the IC. The terms, rights and privileges of this agreement include the IC and their Sole Proprietorship or Corporation. The IC is responsible for his/her own income taxes and expenses and to obtaining a GST/HST number and provide the Company [Romantic Planet] with written confirmation of the same. [ 33 ]

Section 12 provides as follows for a non-competition obligation while the agreement carries on: NON-COMPETE: The IC will provide the services for travel related sales exclusively with The Company. The IC agrees and covenants that all of its travel sales (including hotels, tours, car rentals, group bookings, wholesale, cruises, insurance, tour operator, consolidators, etc) must be processed through The Company only, and the Company is entitled to earn its commission on all travel sales generated by the IC.

The IC shall not accept any commission payment sent by any supplier of travel or any other companies to the IC directly and therefore is obligated to forward such cheques or payments to the Company immediately. [ 34 ]

Section 19 provides as follows: OWNERSHIP: For booked leads generated solely by the IC, these accounts are considered the property of the IC. The Company will not compete or do anything to undermine the IC’s relationship with their client the intention of the IC’s client becoming a Company client. The IC generated booked leads shall remain property of the IC following the termination of this agreement. For booked leads generated solely by the Company, these accounts are considered the property of The Company.

The IC will not compete or do anything to undermine The Company’s relationship with their client with the intention of The Company’s client becoming an IC client. The Company generated booked lead [sic] shall remain property of The Company following the termination of this Agreement. The account can be moved to another agent at the Company’s discretion. [ 35 ]

Section 37 set out the obligations relating to confidentiality and other related obligations: CONFIDENTIALITY a. The IC agrees that any and all knowledge or information that may be obtained in the course of the this [sic] Agreement with respect to the conduct and details of the business and with respect to the secret processes, formulas, machinery, etc. used by The Company in creating its products will be forever held inviolate and be concealed from any competitor and all other persons. b.

The IC will not engage his employer, employee, principal, agent, IC or otherwise, directly or indirectly, at any time in a similar business during this Agreement, and that he or she will not impart the knowledge acquired to anybody. c. At termination of this Agreement, the IC agrees not to enter into the employ or service or otherwise act in aid of the business of any rival company or concern or individual engaged in the same or in similar lines of business.

If the IC does so in violation, the Company shall be entitled to an injunction by any competent court of equity in joining and restraining the IC and each and every other person concerned from continuance of employment, services or other acts in aid of the business of the rival company or concern. d. Nothing shall prevent the IC upon the termination of this agreement in engaging in any occupation in which the processes, formulas, and other secrets of The Company will not be involved. e.

Both parties agree that the ICs clients, the company’s clients, and the clients of any other party or entitles [sic] operating under an agreement with the Company are mutually exclusive. f. The IC agrees that disclosure of any information in respect to the terms of this contract to non-affiliated third parties will result in the cancellation of this Agreement and that the Company will suffer damages as a result of such disclosure. g. The IC agrees to obtain consent in writing from all clients (for booking purposes) for all personal information gathered.

The Company will not be held liable for failure of the IC to comply with the PIPEDA standards in information collection. [ 36 ]

Section 38 addresses termination. It must be set out in its entirety in light of the arguments advanced: TERMINATION: Upon termination of this Agreement for any reason: a. In no circumstances shall the Company use any records remaining in its files to solicit the clients from booked leads generated solely by the IC and in no circumstance shall The IC use any records remaining in its files to solicit the clients from booked leads generated

solely by The Company. b. The IC shall promptly return to the Company all software, manuals and all trade secrets belonging to the Company, and copies thereof. c. The IC shall not use the confidential or proprietary knowledge and information of the Company gained at any future time. d. The IC shall be responsible for all receivables and provide a list of outstanding commissions. e. Any outstanding fees owed by and to either party to fulfill the terms of the duration of the agreement is [sic] to be paid on the 15 th of the month following termination of the contract. f.

For all bookings made by the IC during the term of the Agreement but remains actives [sic] and has not yet traveled, they will remain as booked with The Company. The IC will be responsible for completing and finalizing all bookings including reconciliation and travel documents. A quarterly payment will be made by the Company for all invoiced commissions received after termination of the Agreement on any transaction processed up to and including one year from the date of termination for all completed bookings. g.

If the IC does not fulfill their obligations to the customer and The Company and finalizing in completing the booking for whatever reason including death or illness, it is agreed that the booking be deemed abandoned and subsequently The Company shall transfer the booking to another agent. All commissions earned will subsequently be forfeited by the IC to The Company. h. The agreement can be terminated at any time during its term by either party providing sixty (60) days’ notice of its intention to terminate in writing to the other party. i.

Should the IC terminate this contract with or without notice prior to the end of this agreement, the IC agrees to pay the company a termination fee of One Thousand Four Hundred Dollars ($1400). j. The IC cannot sell, transfer, or assign this agreement to anyone except a corporation that is wholly-owned by the IC. The sales produced by the IC are not transferable to any other agent, IC, Corporation, Person other than the Company.

The Company may purchase the bookings from the IC at 20 percent (20%) of the total estimated Earned Commission of the bookings. [ 37 ] At the end of the Independent Contractor Agreement there are two anomalously numbered sections and one paragraph without a number. The first one is numbered 1, although clearly it should have been 40. It sets out a two-year term, with automatic renewal, and repeats the entitlement of either party to terminate the agreement upon 60 days’ notice.

There is no reference to the requirement of paying $1400. [ 38 ] There were four schedules attached to the agreement, each of which indicate that they were supposed to be signed separately, but they were not, and each of which have various terms of months or years that are not consistent with the Independent Contractor Agreement as a whole. [ 39 ] There are contradictions within the documents, particularly if the arguments made by Romantic Planet are correct. Paragraph 37d seems to conflict with the non-competition covenant that was signed while Ms.

Hartman was an employee and is not really in harmony with paragraph 32c. The statements in

section 19 and paragraph 38a that the IC-generated leads shall remain property of the IC following termination seem to make no sense if she is not allowed to do anything with them because she is not allowed to compete after termination. On its face, the last sentence of

section 19 conflicts with paragraph 38f, if it is to apply after termination. Termination [ 40 ] Ms. Hartman provided a letter to Ms. Keith of Romantic Planet dated June 2, 2014 indicating that “the independent contractor agreement between Romantic Planet Vacations Inc. and Hartman Vacations, dated 31 May, 2013” was being terminated. [ 41 ] It is important to note that she specifically referred to “Hartman Vacations”. On its face, the agreement was between Romantic Planet and Tara Hartman, but the agreement specifically provided in

section 2 that Ms. Hartman was to register as a sole proprietor or a corporation. There is no indication that she set up a corporation, but as we see from other documents she used the trade name “Hartman Vacations” for her sole proprietorship while she worked with Romantic Planet under the Independent Contractor Agreement. That has a bearing on evidence discussed below. [ 42 ] The effective date of the termination was August 1, 2014. At that time, there were five bookings that remained active. Ms. Hartman made it clear that she wanted to complete the remaining active bookings.

The agreement specifically said she was responsible for the receivable and that she was to do so, and was entitled to be paid commissions. [ 43 ] However, Romantic Planet did not allow her to do that. It denied her access to her work email address, denied her access to Romantic Planet’s Automated Wedding Website System, denied her access to a cloud file server used by Romantic Planet to store documents including those required to manage the active files, and it informed the clients on the active bookings and tour operators that she was no longer responsible for managing and finalizing the active files.

It demanded that she return the physical files of the active bookings, and told her to cease managing them. [ 44 ] Subsequently, as indicated above, Romantic Planet sued her and brought applications to compel the return of the documents and for injunctive relief. [ 45 ] In connection with those remaining active bookings, in her counterclaim Ms. Hartman sought a total of $17,895.44 representing the commissions she would have earned on those five bookings. However, in the application for

summary judgment (in both her affidavit and the application document) the claim has been revised to $22,598.19. Romantic Planet’s estimate of the commission revenue earned from the five active files is $24,680.00. Romantic Planet proposes to pay 20% of that, being $4,936.00.

[ 46 ] Accordingly, there is a dispute over the commissions in issue, but Romantic Planet has calculated a figure for Ms. Hartman’s claim that is higher than the revised figure of Ms. Hartman. Based on the evidence before the Court, the figure must therefore be taken to be at least $22,598.19, and perhaps it is $24,680.00. [ 47 ] The real dispute is whether Ms. Hartman is entitled to be paid any amount for commissions, or perhaps the 20% figure put forward by Romantic Planet.

That determination is to be made from the wording of the Independent Contractor Agreement. [ 48 ] If she is clearly entitled to be paid the commissions, but there is a strong claim for damages, perhaps judgment should not be granted or any such judgment should be stayed pending the outcome of the trial on the basis that there should be equitable set-off. [ 49 ] If the evidence from Romantic Planet suggests that there is a genuine fact issue for trial,

summary judgment should not be granted. Analysis [ 50 ] Paragraph 38f specifically deals with what was to happen regarding active bookings after the termination of the agreement. The words in the brief

preamble, “Upon termination of this agreement for any reason” are then followed by a statement that she was “responsible for all receivables”. There is also a specific provision setting out that Ms. Hartman “will be responsible for completing and finalizing all bookings including reconciliation and travel documents”.

It further provides that she will be paid those commissions by way of quarterly payments on any transaction processed up to and including one year from the date of termination for all completed bookings. [ 51 ] Reading these provisions on their own, there is no doubt that she had an entitlement, and in fact an obligation, to continue working on the active bookings, both to finalize them and to make sure the receivables were collected. Does the rest of the agreement change the meaning? [ 52 ]

Section 19 has a general provision about Romantic Planet being able to move the file to another agent. As mentioned, that seems to contradict paragraph 38f, but

section 38 specifically applies at termination. The proper reading is that the specific overrules the general.

Section 38 applies on termination, and to the extent it conflicts with general provisions, it must govern. [ 53 ] Romantic Planet argues that paragraph 38g deems the booking to be abandoned, and therefore all commissions earned will be forfeited. They say that these words apply because the applicable words, including the

preamble, are: Upon termination of this Agreement for any reason ... [i]f the IC does not fulfill their obligations to the customer and the Company and finalizing and completing the booking for whatever reason including death or illness, it is agreed that the booking be deemed abandoned…. [ 54 ] This requires reading paragraph g as having supremacy over paragraph f, but there are no words in the agreement that suggests that should be the case. The facts of this case are clear: the only reason Ms.

Hartman did not continue servicing the remaining five active vacation bookings was because Romantic Planet would not let her. Paragraph f is clear that she had an obligation and entitlement to continue doing that work - and to continue to earn the commissions. [ 55 ] One cannot benefit from one’s own wrong. Romantic Planet is the party who is in breach, and it cannot rely on its own breach to justify saying, “The IC [did] not fulfill [her] obligations to the customer and the company, and it does not matter what the reason was”.

Having deliberately reined her in, Romantic Planet cannot benefit from her failure to complete the race. [ 56 ] It further argues that the end sentence of paragraph j, which provides that “The Company may purchase the bookings from the IC at 20 per cent ...” gives the company the election to simply pay out the IC who has terminated her contract, by paying 20% of the estimated commissions associated with active bookings. [ 57 ] That requires ignoring paragraph f completely. [ 58 ] Also, there are other problems with this approach.

Firstly, this “election” is really an option, and there is no indication of how the option is to be exercised. Secondly, the words do not place a mandatory obligation on Ms. Hartman to accept less than her due. Thirdly, if Romantic Planet’s

interpretation is correct, then it would be entitled to wait until the work was 99% complete, perhaps shortly before the couple went on their honeymoon or destination wedding, and then pay out less than its primary obligation. [ 59 ] When I suggested this extreme example to counsel in oral argument, she pointed out that those were not the facts before the court. However, to understand how the agreement was intended to work, it is necessary to examine how it might work in all circumstances.

The possibility that the work was not necessarily 99% done in this case does not mean that the words mean something different. (Counsel for Ms. Hartman argues that in some of the matters the work was effectively 100% done.) [ 60 ] Argument has been made about the words “for whatever reason including death or illness” and how that modifies the circumstances where the IC has not completed her duties. The duty of the court in understanding an agreement is to reach that understanding by reading the complete document.

It is only when the words of the agreement are not clear from a reading of the whole that the court resorts to rules of

interpretation, such as those encapsulated by the maxims ejusdem generis and contra proferentum . I have read the entire agreement and there is no need to look to these

interpretation aids (other than to resolve the apparent conflict between

section 19 and paragraph 38f, discussed above). They would not help sort out the various contradictions and address concerns about enforceability. [ 61 ] The non-competition clause set out in the “Confidentiality” provisions of the Independent Contractor Agreement (section 37) provides that “the IC agrees not to enter into the employee or service or otherwise act in aid of the business of any rival company or concern or individual engaged in the same or in similar lines of business.” “Similar lines of business” is not defined but I assume that it refers to a travel agency that books destination weddings and honeymoons. There is no evidence to the effect that regular travel agencies

do not engage, at all, in such lines of work. The evidence is that Romantic Planet is one of only five that focus on that work. If this covenant were interpreted literally, Ms. Hartman would be prevented from working as a travel agent for any travel agency that arranges for a honeymoon or a destination wedding. That seems quite unreasonable. She has been in the travel agency business for many years. [ 62 ] Furthermore, this covenant contains no limits on either time or geography. According to its terms, it applies forever.

For a noncompetition covenant to be enforceable, it must be reasonable, and that normally involves defining how long it will last and in what geographical area it is to apply. [ 63 ] As well, the covenant relating to noncompetition, according to its words, does not actually prevent the IC from setting up her own business in competition. The covenant is not to “enter into the employee or service or otherwise act in aid of the business of any rival company or concern or individual”.

It requires straining the words somewhat to conclude that acting on her own amounts to acting “in aid of a rival company” as the words are used in this provision. [ 64 ] Perhaps that is the way the words can be reconciled with the immediately following paragraph, 37d, which otherwise seems to conflict. That is, she can compete as an independent contractor as long as (

a) she does not use trade secrets, and (

b) she is not an employee of a rival company. But it seems very unlikely that that was intended. [ 65 ] Non-competition agreements, at least in the employment context, that are unreasonable are “void and unenforceable”: Shafron v. KRG Insurance Brokers (Western) Inc. , 2009 SCC 6 , para. 36 . The Court has no ability to rewrite the contract in a manner that the Court would consider reasonable: Shafron at para. 39 . It is either enforceable, or it is not. [ 66 ] However, this is not a non-competition covenant contained in an employment agreement. It is contained within an independent contractor agreement. [ 67 ] In a commercial context, the test is different. “The

interpretation of restrictive covenants requires the application of different rules depending on whether the covenants are found in commercial agreements or in contracts of employment. These rules will be more generous in the commercial context, but much stricter in the context of contracts of employment or service”: Payette v. Guay Inc. , 2013 SCC 45 , para. 2 and see para. 35. [ 68 ] This difference in approach results because of “the imbalance of power that generally characterizes the employer-employee relationship when an individual contract of employment is negotiated”: Payette at para. 36 .

The difference in approach “is especially true where the evidence shows that the parties negotiated on equal terms and were advised by competent professionals, and that the contract is not create an imbalance between them”: Payette at para. 39 . [ 69 ] Here, perhaps the Independent Contractor Agreement should be looked at as a commercial agreement although it is substantially different than the commercial agreement under consideration in Payette .

That was a purchase and sale agreement of assets and a subsequent short-term period of employment where the vendor continued to work in the business for transition purposes. This independent contractor agreement is far more aligned with a normal employment agreement, especially in light of the prior relationship as employer and employee. The consideration Ms. Hartman received for signing it was the benefit of being an independent contractor.

She was not paid a substantial sum for a business that she sold to the plaintiff, which would typically include associated goodwill, which a non-competition covenant in those circumstances is intended to protect. [ 70 ] The statement of claim also makes express reference to the five year non-competition covenant that was entered into in in connection with Ms. Hartman’s former employment relationship with Romantic Planet.

Notwithstanding the fact that the parties changed their relationship, perhaps it is still in effect, although that seems to conflict with paragraph 37d. [ 71 ] However, there is no evidence before the Court as to how it came into effect and whether there was consideration for it. Furthermore, it is extremely unusual to see a five-year non-competition agreement in an employment contract. I simply observe that I do not recall seeing a case involving a non-competition covenant for a five-year period being enforced, other than in Payette .

It is hard to understand how that period of time would be reasonable in a normal employment relationship not associated with the sale of a business, barring very unusual facts. [ 72 ] More importantly, there is almost no evidence that Ms. Hartman actually competed. [ 73 ] Ms. Keith claims she did, but a careful review of the documents does not support the allegation. For example, at paragraph 27 of her August 25, 2014 affidavit, Ms.

Keith deposes, “since her departure from Romantic Planet, Hartman has started her own business under the trade name Hartman Vacations, registered in Alberta, which also specializes in the niche travel market of honeymoons and destination weddings.” However, as indicated above in the termination letter signed 60 days before termination she specifically used the trade name “Hartman Vacations”. As other documents show, that was the name that Ms. Hartman had given to her independent operation pursuant to

section 2 of the Independent Contractor Agreement. It required that she register either as a sole proprietor or a corporation within two weeks of June 1, 2013, when the relationship started. She did not start using that name after termination, as claimed by Ms. Keith. [ 74 ] Paragraph 28 of that affidavit asserts that Ms.

Hartman “is actively promoting Hartman Vacations through a website, social media and directly to the Romantic Planet Clients through emails and telephone calls.” However, the exhibit attached is a printout from a website that says “coming soon”, and then it says “Tara Hartman Destination Wedding and Honeymoon Specialist [xxx]@Romanticplanet.ca.” It seems clear that this document does not reflect that she was actually competing, but rather that she was planning on doing so.

There is no date on the document that I have been able to locate, and under the heading “experience” it describes her as a “Destination Weddings & Honeymoon Specialist Hartman Vacations June 2013 – present (1 year 2 months)”. This appears to have been created by her prior to terminating her relationship as an independent contractor with Romantic Planet. There is no indication of who saw this website or when. It is not evidence of actually competing afterwards. It is now over a year later and there is no evidence of competition, except perhaps one email discussed below. [ 75 ] Furthermore, Ms.

Keith asserts that Ms. Hartman “contacted several of the Romantic Planet clients following the termination

of the IC agreement” and provides particulars. However, the clients who she contacted were those whose active bookings she was obligated to see through. That was not competition. [ 76 ] On August 8, 2014, she advised “T & B” (I will refrain from using even first names to avoid embarrassing customers) of her new phone number, saying that her old phone number had been disconnected. That email specifically referred to Romantic Planet Vacations Inc. [ 77 ] Ms.

Keith asserts that customers “T & B” “have expressed concerns that their guests will be confused and aggravated due to Tara’s actions”, and she attached the email received from the customers. However, the customers were not objecting to continuing to work with Ms. Hartman, and in fact they said they were fine either way (“staying with Tara or having a new agent if that is required ” [Emphasis added]). The customers simply asked Ms. Keith to sort it out.

There is no indication of any harm being done to Romantic Planet other than the confusion that appears to have resulted from Romantic Planet contacting the customers prior to Ms. Hartman doing so. The customers were getting conflicting messages. [ 78 ] Ms. Keith refers to “J” saying that she called Ms. Keith with concerns that Ms. Hartman was contacting her and advising that the wedding booking is being transferred to Hartman Vacations, asking Ms. Keith to meet her personally in Toronto to sort out the situation. Once again, it appears that her concern was the confusion as between Romantic Planet and Ms.

Hartman giving conflicting messages. [ 79 ] Ms. Keith goes on to assert that “E” was stressed and that there was confusion among her guests, and stated in an email of August 20, 2014 that this is “a situation that sounds like a bad divorce” and “not the most professional”. However, the email she refers to does not support Ms. Keith’s assertion. The email string begins with an email from a new file manager assigned by Romantic Planet, and the response from “E and J” was this: Thanks for your email. I spoke with Laurie today and she explained the situation as well as I was aware from Tara.

At this time, please refrain from contacting any of my guests, the emails that are going out to my guests are confusing and I do not want several calls a day trying to explain a situation that sounds like a bad divorce, not the most professional. [ 80 ] It is important to read this email string properly, because this is an email from the customer to the new agent specifically advising the new Romantic Planet agent , to whom the active booking has been assigned, not to contact the customers . What is suggested is that they were apparently happy with Ms.

Hartman, and that she was simply carrying forward with her obligations under the Independent Contractor Agreement. [ 81 ] The best evidence of competition appears in an email from Ms. Hartman to what I understand to be a supplier. In that email, dated August 14, 2014, Ms. Hartman said: I have recently terminated by contract with Romantic Planet Vacations and will be continuing with my own business. I will have a new IATA number this week in my intention was to transfer my registration from Romantic Planet to my new business.

Unfortunately, it seems Romantic Planet may have prematurely updated my account details and log-in as I no longer have access to the Sunwing agent site. Could you please advise if this is correct?? Please tell me that no-one can affect my Star Card balance except me. Please also help me to gain access again as I do have three current bookings with Sunwing and need to apply payment. [ 82 ] However, there is no evidence that the “three current bookings” were anything other than three of the five active bookings remaining with Romantic Planet. [ 83 ] There is an assertion that without authorization Ms.

Hartman used Romantic Planet’s credentials to create an account with an unknown travel supplier called “Mywurld Travel”. There is no detail whatsoever about this, although the statement of defence asserts that it was an innocent use of the credentials. [ 84 ] There is a further assertion of competing business activity in connection with an email forwarded by Ms. Hartman from her Romantic Planet address to a new email address attaching a listing invitation from Destination Wedding & Honeymoon Specialists Association.

This appears to be an email from a directory supplier who had sent an advertisement about its online directory, offering to provide services. It is difficult to see how this was anything secret. [ 85 ] Ms. Keith’s evidence alleges that Ms. Hartman replaced the Romantic Planet logos with Hartman vacation logos on forms of contracts and a manifest used by Romantic Planet. However, in the two cases for which examples are given, both of them were clearly created, and used, while Ms. Hartman was acting as an independent contractor for Romantic Planet.

They are evidence of the fact that she used her independent contractor name while doing work for Romantic Planet under the terms of the Independent Contractor Agreement. It is no evidence at all of any competition. [ 86 ] In Ms. Keith’s September 24, 2015 affidavit, she attaches various documents purporting to show competition, but they simply indicate that Ms. Hartman continued to do the work on the five outstanding active bookings, or she tried to, as provided in the agreement. Some emails to the customers give them her new phone number. [ 87 ] Two of the allegations in this affidavit are of particular concern.

Ms. Keith denies an assertion by Ms. Hartman in her affidavit that she solely generated the “K and J” booking. Ms. Keith asserts that these customers contacted Romantic Planet through their website on January 6, 2014. While this is true, however the email that she attaches says quite specifically, Hi there, Tara Hartman from your company was recommended to me by a friend of mine for planning destination weddings. My fiancé and I are looking to plan one for January 2015 and I was wondering if you could put me in contact with Tara about this.

[88] It is hard to accept the assertion that this booking was generated solely by Romantic Planet. The contact was made to thewebsite, but it was clearly because the customer specifically wanted to deal with Ms. Hartman because of a personal referral. Shereached out to Romantic Planet because she was trying to contact Ms. Hartman. This is one of the five outstanding active bookings thatRomantic Planet refused to allow her to finish, for which Ms. Hartman wants to be paid her commission. [89] As well, Ms. Keith asserts that Romantic Planet generated the remaining four active bookings.

As to a booking for “S & J”,Ms. Hartman reproduces in her affidavit an email from the couple, dated May 22, 2014 that says they were referred by a friend. Although the email was sent to her at her Romantic Planet email address, Ms. Hartman asserts that it was directed to her and the text ofthe email seems to support that view. [90] Overall, the conclusion to be reached from reviewing Ms. Keith’s affidavits is that they make various self-serving assertionsof wrong-doing (that is, she asserts conclusions in support of her position) by Ms.

Hartman that are simply not supported by thedocumentary evidence to which she refers, and upon which her assertions have been based. [91] For example, she asserts at paragraph 29 that after she declined Ms. Hartman’s continued access to the “confidential andintellectual property after the date of termination”, Ms. Hartman “became belligerent and unruly and continued to contact our clients andour supporters to defame our reputation causing RPV damages.” But the emails she refers to are not at all belligerent or defamatory.

Sheadvised a contact at Transat that she had a new email address and said that “my Romantic Planet address has been compromised”,without any derogatory implication. The email to Sunwing was equally benign – there was no negative reference to Romantic Planet. The emails from the customers, described and quoted above, were very different than the text of Ms. Keith’s affidavit suggests. [92] This is the sort of evidence that may be disregarded on a

summary judgment application: 1214777 Alberta Ltd. v. 480955Alberta Ltd., 2014 ABQB 301, citing Guaranty Company v. Gordon Capital Corporation, (SCC), [1999] 3 S.C.R. 423. The Court is entitled to presume that the parties’ best evidence has been presented: 1214777 Alberta Ltd. At para. 17, citing Canada v.Lameman, 2008 SCC 14 , [2008] 1 S.C.R. 372. To the extent that any details are provided in Ms. Keith’s affidavits, they do notsupport the self-serving assertions of wrong-doing. [93] If Romantic Planet believed that Ms.

Hartman was actually competing improperly, or misusing confidential information orsoliciting its customers, it had the opportunity to cross-examine her on her affidavit filed in support of this application. It did not. Theonly evidence of her alleged wrong-doing before the Court is Ms. Keith’s. Conclusion [94] In the result, it is quite clear that the commissions would very likely have been payable had Romantic Planet allowed Ms.Hartman to discharge her obligations under the terms of the Independent Contractor Agreement.

Having breached the terms of theagreement by stopping her from doing that, Romantic Planet is liable to Ms. Hartman for damages for the amount of the commission thatshe should have been allowed to earn. There is no basis for asserting that it must pay only 20%. [95] The question remains whether judgment should be granted in the context of a lawsuit for damages, or whether judgmentshould be granted and stayed pending the outcome of the claim for damages by Romantic Planet. [96] This action has been underway for over a year.

There has been no questioning, and no steps taken by Romantic Planet tomove the matter forward once the documents were returned to it in August 2014. The evidence of competition is lacking, and there is noevidence of any damages suffered by Romantic Planet if there was any improper competition. The documents relied upon to show thatshe was not allowed to compete might not be enforceable for several different reasons. [97] In all of the circumstances, judgment should issue in favour of Ms. Hartman for damages reflecting her lost commissions. [98] As indicated above, there is a debate as to how much that is.

It seems clear clearly to be at least $22,598.19. Judgment isgranted for that amount, and Ms. Hartman is granted leave to apply for a greater figure if a greater amount may be demonstratedproperly. [99] In light of the potential for a claim for damages for non-competition, improper solicitation of clients and breach ofconfidentiality, and in light of the fact that Ms. Hartman did not apply for

summary dismissal of the claim as a whole, Romantic Planet’sclaim against Ms. Hartman may continue. However, there is no proper basis for a stay of enforcement pending the outcome of theremaining issues. [100] However, a procedural order should be granted to set deadlines for next steps. Counsel are directed to contact the Masters’Chambers court clerk for a hearing to discuss the terms of a procedural order in this regard if they cannot agree on deadlines. [101] The parties may approach the Court as to costs if they are unable to agree. Heard on the 21st day of October, 2015. Dated at the City of Calgary, Alberta this 24th day of November, 2015

A. R. Robertson, Q.C. M.C.C.Q.B.A. Appearances: Charles Osuji Smith Law Office for the Applicant (Defendant/plaintiff by Counterclaim) Vhari Storwick Fasken Martineau DuMoulin LLP for the Respondent (Plaintiff/defendant by Counterclaim)