GG & HH Inc v, 2022 ABQB 58

Court of Queen’s Bench of Alberta Citation: GG & HH Inc v 2306084 Alberta Ltd, 2022 ABQB 58 Date: 20220120 Docket: 2101-07555 Registry: Calgary Between: GG & HH Inc Plaintiff/Applicant - and - 2306084 Alberta Ltd, 2062271 Alberta Ltd, Aneet Sharma, Parmodh Sharma, and Hitesh Sharma Defendants/Respondents _______________________________________________________ Reasons for Judgment of the Honourable Mr.

Justice JT Eamon _______________________________________________________ Introduction [ 1 ] The applicant seeks to extend an interim injunction granted June 18, 2021 by Devlin J against three former employees (Aneet Sharman, Hitesh Sharma and Parmodh Sharma) and two corporations associated with them (2306084 Alberta Ltd (“230 Ltd”) and 2062271 Alberta Ltd (“206 Ltd”)). [ 2 ] The applicant operates several pharmacies in NE Calgary.

The injunction pertains to the applicant’s flagship pharmacy in the Martindale neighbourhood of NE Calgary (the “applicant’s Martindale Pharmacy”). [ 3 ] The individual respondents used to work at this pharmacy but resigned on various dates between late 2017 and October 2020. Generally, the applicant alleged the individual respondents opened competing pharmacies (one in Linden Alberta, operated by 206 Ltd, and one across the

street from the applicant’s Martindale Pharmacy, operated by 230 Ltd), solicited the applicant’s patients to do business with the competing pharmacies, and used the applicant’s confidential information to carry out the solicitation.

The applicant says there is also evidence the individual respondents were motivated to harm the applicant and made false statements in the community that impugn the applicant’s reputation. [ 4 ] Devlin J granted an interim injunction that restrains the respondents from “using, reproducing, copying, altering, or disclosing for any purpose, patient information of persons known to be [the applicant’s] former or current patients and from otherwise soliciting the business of persons known to be [the applicant’s] former or current patients”. [ 5 ] Devlin J dismissed the application to enjoin 230 Ltd from opening a pharmacy across the street from the applicant’s Martindale Pharmacy. [1] [ 6 ] Devlin J also ordered the respondents (except 206 Ltd) to record all prescriptions filled by 230 Ltd’s pharmacy at 81 Martindale Blvd NE, Calgary, and provide the information monthly to their counsel who will retain a sealed copy of the information. [ 7 ] In his reasons granting a more limited interim injunction, Devlin J observed the respondent had not had an opportunity to fully respond.

No examinations on affidavits had been conducted. Therefore, “every discussion of fact and conclusion expressed in these reasons is interim without prejudice and subject to review and change as the record evolves throughout the litigation process.” [ 8 ] The present injunction application is hotly contested. The parties generated lengthy and conflicting evidence, disputes over admissibility of evidence and credibility of evidence, and lengthy written and oral submissions.

The parties submitted thousands of pages of material – including several iterations of affidavits of the parties, translators’ affidavits, third party affidavits, cross-examinations, and extensive written submissions including rebuttals. The evidentiary landscape is much different that when the interim injunction was granted. [ 9 ] For the reasons set out herein, the interim injunction is vacated. Application to strike affidavits [ 10 ] The applicant/plaintiff seeks an order striking out: (

a) A purported video of a conversation in July 2021, that allegedly was made without consent of the participants and therefore contrary to s 184(1) of the Criminal Code , RSC 1985, c C-46 . (

b) Purported videos of a conversation in December 2020 between the applicant’s principal (Harbir Dhillon) and the respondents Hitesh Sharma and Parmodh Sharma, made surreptitiously (ie, without the knowledge of one side – Mr Dhillon). (

c) Translators’ affidavits in respect of the above recordings. (

d) Portions of other affidavits that replicate the foregoing content. [ 11 ] The July 2021 telephone call was made by Harbir Dhillon to a third party. Parmodh Sharma was present with the third party, and he videoed most of the call with his smart phone. The applicant submits the call was unlawfully intercepted contrary to s 184(

a) of the Criminal Code . It submits Parmodh Sharma did not originate the call nor was he intended to receive it. It is therefore inadmissible. [ 12 ] The respondents submit that the applicant has not proved the recording was made without express or implied consent by one of the parties to the communication. The third party is a long-term friend of Parmodh Sharma’s family and wanted to help him. The applicant cross-examined Parmodh Sharma but did not ask if he obtained consent to record. Consent may be express or implied.

The camera placement does not indicate that the third party was not aware of the recording, as the applicant alleges. If the recording were unlawful, it is nevertheless admissible in this civil proceeding. [ 13 ] The onus is on the applicant to prove the video was taken unlawfully.

I agree the applicant has not proved that Parmodh Sharma did not have consent of the third party to video the conversation. [ 14 ] Further, the general rule is that illegally obtained evidence is admissible in private civil proceedings (Sopinka, Lederman and Bryant, The Law of Evidence in Canada (4 th ed, 2014), Arts 9.3, 9.4, 9.11, 9.15). The applicant cites only VLM v AJM , 2021 ABCA 267 at para 61 , where a party tried to provide fresh evidence on appeal without applying for permission.

The dissenting member of the panel observed he would have refused admission of the evidence “because no proper application was made and argued, but also because there is considerable controversy in family law jurisprudence over the admissibility of surreptitious recordings to help prove alienation”. I do not take that statement as over-ruling the many cases outside the family law context holding that unlawfully obtained evidence is admissible in private civil proceedings. [ 15 ] The same applies to surreptitiously obtained evidence.

I am unaware of a rule of evidence applicable to a commercial dispute that evidence obtained by recording a telephone call with the consent of only one party to the call, is inadmissible. [ 16 ] The applicant further submits the videos are of poor audio quality and incomplete, and therefore are not admissible.

[ 17 ] Video and audio recordings can be admissible as real evidence if they are of sufficient clarity and quality. [ 18 ] The conversations in question are partly in English and partly in Punjabi. A certified translator prepared translations for the respondents. [ 19 ] The Court requires a translation to conduct a meaningful assessment of the cogency and reliability of the videos. The key issue is whether the translations are admissible. The translations in question appear in two forms in the record. [ 20 ] First, they are appended to an affidavit of Parmodh Sharma as exhibits. These are hearsay evidence.

Mr Sharma may depose to matters based on information and belief in the present application because it is not a final application. But he can’t simply exhibit hearsay documents to his affidavit for the purpose of proving the truth of their contents without complying with the requirements under the Alberta Rules of Court to express the information he derives from them, his belief in the information, and the source of his belief. [ 21 ] Parmodh Sharma made the videos and speaks Punjabi.

To the extent he quotes passages from the translations in the body of his affidavit, he is impliedly expressing a belief in the accuracy of those passages and he has sufficiently identified the sources of his belief. The source may not be proved reliable, but that goes to weight. Those quoted passages are admissible. The remainder of the translations, that are not quoted in the body of his affidavit, are not authenticated by a statement of belief. They do not comply with Rules 13.18(1)(

b) and 13.18(2) of the Alberta Rules of Court as to information and belief. They are not admissible. [ 22 ] The second source of the translations is a late filed affidavit of a translator. The applicant objected to the late filing and asked to cross-examine the translator. The respondents refused the request because they were not served with a notice to attend and conduct money. [ 23 ] The evidence in injunction applications often comes in quickly, but it must also come in fairly.

When the respondents file materials late, they should exhibit a substantial degree of cooperation in allowing the opposing party to test the evidence in the tight timeframe. However, the applicant has not given a good reason why it could not have served the necessary notice and conduct money. There is no basis to exclude the evidence on this ground. [ 24 ] The applicant further points out that the translations are in turn based on transcriptions of the words spoken on the video, which are not in evidence and have not been authenticated. [ 25 ] I agree with the applicant on this point.

There is no evidence supporting the accuracy or authenticity of the transcriptions from which the translations were made. The translator does not express a belief in the accuracy of the transcriptions, nor would I expect him to do so. He simply translates what he is provided. Consequently, the recordings themselves have no evidentiary value on this application and are not admissible. [ 26 ] To the extent a few passages in Parmodh Sharma’s affidavit are technically admissible, I have placed very little weight on them. First, the quotes are not a substantially complete narration of the telephone conversations.

Harbir Dhillon may have said things in other parts of the conversations that qualify his statements. Second, the passages relate to matters that are peripheral to the issues on the interlocutory injunction application. [ 27 ] As to the second point, the respondents seek to provide the translations to impugn Harbir Dhillon’s credibility. Both sides have given some questionable evidence. Both sides submitted the opposing party was not credible. The Court can accept some, all, or none of a witness’ evidence.

I have read the parties’ submissions and all the evidence and am firmly of the view that credibility assessments in this case must wait until a trial of the action. Attempting to weigh these credibility submissions in a chambers application does not assist me in deciding whether to grant an injunction before the trial. [ 28 ] The respondents also relate the content of these calls to their defences of delay and unclean hands.

The admissible portions in Mr Sharma’s affidavit do not address the delay point but do address evidence relied on to assert the applicant should be denied relief because it also committed misconduct (unclean hands). The unclean hands argument in this case is effectively an attack on Harbir Dhillon’s credibility.

The respondents ask me to infer that the evidence “clearly points to this Action being an abuse of process aimed at using the legal system to intimidate, harass, and prevent the Defendants from operating their business.” Mr Dhillon contested the allegations and provided voluminous evidence and counsel submissions pointing out the gaps in these theories. On the present record, the applicant’s motives, to the extent relevant, need to await a proper credibility assessment in the context of all the evidence at a trial. [ 29 ] In

summary, the translations are not evidence. Mr Sharma’s quotations of the translations in the body of his affidavit are evidence. The videos do not have evidentiary value except to the extent translated and quoted in Mr Sharma’s affidavit. However, the admissible portions have very little weight.

Summary of applicant’s allegations and evidence [ 30 ] No purpose would be served by describing all the detailed evidence, hotly disputed by the parties. The outcome of the lawsuit will mainly be determined by assessing the reliability and credibility of five individuals – the two principals of the applicant (Harbir Dhillon and Harpreet Dhillon) and the three individual respondents – and receiving cogent evidence whether and how patients were solicited. [ 31 ] Harpreet Dhillon has not provided any evidence. The other individuals involved provided affidavits and were cross-examined before the hearing.

Each side attacks the credibility of the opposing party. I have not had the opportunity to observe the parties or their principals giving evidence. Resolving credibility in chambers applications is generally not permissible, and as mentioned above, this is not a case where a Court can make even a meaningful preliminary assessment of credibility. [ 32 ] None of the patients said to have been solicited have provided affidavit evidence so the Court does not have much

independent evidence which might corroborate either side’s version of events. I was provided a recording (with translation) of one patient’s complaint of solicitation. The respondents provided conflicting evidence of this incident. [ 33 ] Consequently, I will briefly describe the various allegations without attempting to resolve conflicts among the competing versions. [ 34 ] The applicant operates five pharmacies in NE Calgary. It is a small business operated by Harbir Dhillon and Harpreet Dhillon.

Their main pharmacy, which their counsel describes as their flagship store, is the applicant’s Martindale Pharmacy at 126 Martindale Dr NE Calgary. [ 35 ] Hitesh Sharma and Aneet Sharma are related by marriage. They were qualified pharmacists from India and worked for the applicant while re-qualifying in Alberta. They started as pharmacy interns in 2014 or early 2015, and later qualified as Alberta pharmacists (Hitesh Sharma in May 2015 and Aneet Sharma in August 2015). [ 36 ] As a qualified pharmacist, Hitesh Sharma worked as a staff pharmacist in the applicant’s Martindale Pharmacy.

He left his employment in late 2017, after a work-related incident. (The impact of this incident on the opposing parties’ relationship is disputed). He then worked in various third-party pharmacies in Medicine Hat, Banff, Calgary and Red Deer, AB. [ 37 ] Aneet Sharma worked primarily at the applicant’s Martindale Pharmacy as a staff pharmacist from August 2015 until late 2016. In early 2017 she became the licensee pharmacist of the applicant’s pharmacy in the Whitehorn area of NE Calgary.

The applicant says that as a licensee pharmacist, she was responsible to oversee, manage and supervise the pharmacy at the Whitehorn location. [ 38 ] Parmodh Sharma worked for the applicant throughout his employment as a pharmacy assistant, at the applicant’s Martindale Pharmacy. (There does not appear to be any evidence that he is related to the other individual defendants.) [ 39 ] The applicant alleges each individual respondent signed a written undertaking of confidentiality in favour of the applicant, no later than May 5, 2016. The standard form undertaking of confidentiality includes: 1.

In this agreement, the term "personal information" means information about an identifiable individual that is related to the individual's health or the provision of health services to the individual, and any other information about an identifiable individual, whether contained in the Netcare information system, in a pharmacy information system, or in any other written or oral form. 2.

I acknowledge and understand that all personal information is confidential, and therefore agree not to access, collect, use, disclose, alter or delete any personal information, or knowingly permit any of these actions in relation to personal information, except: (

a) as necessary to perform my duties or functions in relation to the pharmacy; or (

b) as expressly authorized by any one or more of the Health Professions Act, Pharmacy and Drug Act , bylaws of the College, and any applicable policies, procedures or standards of the Alberta Ministry of Health. 7. I agree to remain bound by the terms of this agreement after my employment or other connection to the pharmacy ends for any reason. [ 40 ] These were kept in a binder of policies and procedures in the Martindale location.

The applicant says it searched for the historical binder (it changed over to electronic records in 2019) during this litigation to retrieve the signed undertakings, but found the binder is missing. [ 41 ] Hitesh Sharma and Aneet Sharma left the applicant’s employment in late 2017 and early 2018 respectively. Parmodh Sharma continued working for the applicant until October 2020. The applicant did not provide the specific date of his resignation. [ 42 ] In August 2017, Parmodh Sharma and others incorporated 206 Ltd to own and operate a pharmacy in Linden AB. Linden is about 100 km NE of Calgary.

Parmodh Sharma became a director of 206 Ltd in August 2017 and remains a director. The pharmacy commenced operating in September 2018. This pharmacy is owned by 206 Ltd. The applicant says that Parmodh Sharma did not disclose his involvement in another pharmacy to the applicant.

Aneet Sharma is the licensee pharmacist of the Linden pharmacy (the Applicant does not mention the commencement date of her role), and she owns a numbered company that bought shares in 206 Ltd in October 2020. [ 43 ] Harbir Dhillon deposed that the location of the Linden pharmacy reasonably allows it to serve Calgary patients by delivery or home visits. However, Calgary patients would not travel to the pharmacy due to its distance.

Therefore, he infers that the respondents exploited confidential patient information to solicit the business of the applicant’s patients to that pharmacy. [ 44 ] The applicant describes the opening of the Linden pharmacy as a coordinated scheme on the part of the individual defendants to open a competing pharmacy. Mr Dhillon says he heard rumours from a realtor in early 2017 and late 2017 that people with the last name “Sharma” had recently bought property in the Linden area to operate a pharmacy and asked the individual respondents if they were involved.

He says they informed him, on various occasions, that they were not involved in another pharmacy. [ 45 ] The applicant says it discovered the existence of the Linden pharmacy in February 2021 when a patient advised Harpreet Dhillon that the individual respondents previously offered to deliver pharmaceuticals to her home.

Later, in May 2021, Harpreet Dhillon discovered from Alberta Netcare records (electronic patient records maintained by the Alberta health authorities and available online to authorized users) that a long-time patient had recently begun receiving deliveries from the Linden pharmacy. [ 46 ] The applicant alleges the individual respondents solicited the applicant’s most profitable patients (who receive home deliveries of medications) to the Linden pharmacy, using confidential patient information in the applicant’s database.

Although the Linden pharmacy is 100 km from Calgary, it serves many Calgary patients who previously received medications by delivery from the applicant’s Martindale Pharmacy.

[ 47 ] The applicant notes that in the litigation, Parmodh Sharma produced a list of names of all patients of the Linden pharmacy living in NE Calgary. This list contains 114 names, of which only 34 were identified as not being patients of the applicant. It submits the Linden pharmacy could not have obtained the business of the other patients without using and exploiting the applicant’s confidential patient information. [ 48 ] In late 2020, the applicant learned the individual respondents were pursuing a lease in a strip mall near the applicant’s Martindale Pharmacy.

Harbir Dhillon had a conversation with Hitesh Sharma and Parmodh Sharma in late 2020. The contents of the call are disputed (and I have excluded some evidence of the call as described earlier in these reasons), but it is clear he expressed concerns they were planning to open a competing pharmacy. In February 2021 Mr Dhillon learned from patients that they were being solicited by the individual respondents. The patients told him that the individual respondents said they left the applicant’s Martindale Pharmacy and were starting their own business. 230 Ltd opened this new pharmacy in early July 2021.

Aneet Sharma and Parmodh Sharma are directors of 230 Ltd.

This pharmacy is across the street from the applicant’s Martindale Pharmacy. [ 49 ] The applicant claims each individual respondent built personal relationships with patients while working for the applicant and had a high degree of interaction directly with patients; acquired names and contact information of numerous patients, which they stored in their personal electronic devices; and had access to the applicant’s database of patient information including, name, contact particulars, prescription history, adverse effects from medications, and prescriptions covered by health care plans.

Further, they had access to lists identifying the applicant’s blister pack patients, who take several medications and whose prescriptions are supplied in a blister package format. These patients are the applicant’s most profitable patients. [ 50 ] The applicant observes that there is evidence from the individual respondents that they possessed information about some of the applicant’s patients. It notes the respondents produced in the litigation, a list of names and contact information of 92 patients and claimed to have built a personal relationship with 62 such patients independent of the pharmacy.

The applicant asserts as a matter of fact that these claims are “incapable of verification” though it does not explain why. For the remaining 30 names, the individual respondents built their relationships only by virtue of their employment. [ 51 ] The applicant also observed that Parmodh Sharma produced photographs from his smartphone of various records displayed on a computer monitor (and of hard copy employment records). Further, he accessed his work computer many times on his last day of work.

The applicant submitted he must have taken patient information in some manner. [ 52 ] The applicant also showed that some of its former patients who had prescriptions filled at the Linden pharmacy, later had prescriptions filled at 230 Ltd’s Martindale pharmacy.

The applicant submits there are 27 such patients, and this is part of a pattern indicating that the respondents solicited the applicant’s patients to fill their prescriptions at the corporate respondent’s pharmacies and must have used confidential information to enable them to do so. [ 53 ] The applicant produced hearsay (or double hearsay) evidence that various patients were contacted by the individual respondents or persons related to them to do business with the new competing pharmacy in Martindale, or that they contacted a community leader to solicit his support for their new pharmacy.

They say some of this evidence demonstrates Parmodh Sharma and Hitesh Sharma acted contrary to the provisions of the existing interim injunction. [ 54 ] The applicant described various conflicts between it and Hitesh Sharma and Parmodh Sharma. It says Aneet Sharma feared termination. It suggests that the individual respondents bore feelings of resentment and bitterness toward the Dhillons when they left its employment.

It says that “Together, the Individual Defendants escalated their campaign of harm against the plaintiff, their benefactor.” [ 55 ] I note the applicant provided little direct evidence of solicitation. Harbir Dhillon produced a transcript of a telephone call with a patient who told him that Aneet Sharma pressured him to fill his prescriptions with the new Martindale pharmacy. Aneet Sharma hotly contests this version of the events. She says she was invited into the patient’s home, he asked her if she could fill his prescriptions and insisted that she take the information down about his prescriptions.

The patient did not provide an affidavit.

Summary of respondents’ response [ 56 ] The respondents filed extensive affidavit evidence in response. [ 57 ] Aneet Sharma denies signing any employment agreements or undertakings. She says she left her employment with the applicant in late 2017. Prior to her leaving, the applicant asked her to sign a non-competition agreement. She refused. She then worked as a pharmacist for two retail outlets in Strathmore AB during the period February 2018 through October 2020. In June 2020 the family hoped to move to Vancouver for Hitesh Sharma to pursue a pharmacist opportunity there.

The opportunity did not materialize, and the couple remained in Calgary. [ 58 ] She was offered a partnership in the Linden pharmacy in October 2020 and accepted the invitation. She became the licensee pharmacist of that operation in October 2020. She denies disclosing patient or confidential information to the pharmacy or Parmodh Sharma. She denies soliciting any patients to the Linden pharmacy. [ 59 ] She and Parmodh Sharma, and others, own and are directors of 230 Ltd. She was approached about starting a new pharmacy in November 2020. 230 Ltd was incorporated in December 2020.

They planned to acquire property at 81 Martindale Blvd to open a pharmacy and signed an agreement for premises at that location in December 2020. The vendor subsequently backed out of the agreement. Eventually 230 Ltd acquired premises at 79 Martindale Blvd. She alleges the applicant induced the vendor of #81 to back out of the agreement and attempted unsuccessfully to induce the vendor of #79 to back out of the agreement. [ 60 ] She says she takes her professional obligations seriously and is deeply troubled by the allegations that she improperly collected, used, or disclosed confidential information.

She has a wide circle of friends and contacts in her community but did not solicit patients. She has assisted individuals who contacted her for advice or assistance.

[ 61 ] Hitesh Sharma similarly denies signing any employment agreements or undertakings, breaching patient privacy, or taking confidential information. He says that prior to his leaving his employment, the applicant asked him to sign a non-competition agreement. He refused.

He says after he left the applicant’s employment, he worked for pharmacies in Medicine Hat (Dec 2017 – May 2018), as a floater pharmacist at various outlets in Banff, Calgary, Medicine Hat and Red Deer, AB as required for a large retail chain (May 2018 – Dec 2019), and as acting manager at a pharmacy for a large retail chain in NE Calgary to cover a maternity leave (Dec 2019 – Jan 2021).

Since February 2021 he worked as an acting pharmacy manager for the same retain chain at another pharmacy in NE Calgary. [ 62 ] He says he has never been a director or shareholder of 206 Ltd or 230 Ltd. [ 63 ] He provided evidence that the applicant attempted to interfere with 230 Ltd’s plan to open a competing pharmacy by trying to acquire premises that 230 Ltd was negotiating to lease, and that Harbir Dhillon threatened him if he did not comply with the applicant’s demands. [ 64 ] Hitesh Sharma says he takes his professional obligations seriously and is deeply troubled by the allegations that he improperly collected, used or disclosed confidential information.

He has a wide circle of friends and contacts in his community but did not solicit patients. He has assisted individuals who contact him for advice or assistance. In supplemental evidence he explained how he knew or met many of the applicant’s patients in circumstances not related to the applicant’s operations. [ 65 ] Parmodh Sharma similarly denies signing any employment agreements or undertakings, breaching patient privacy, taking confidential information, or soliciting patients.

He provided an explanation of situations where he would access the applicant’s patient database without filling a prescription [2] , and disputed that his activity in accessing the applicant’s information systems on the last day of his employment was unusual. (In turn the applicant challenges the credibility of these explanations). [ 66 ] Parmodh Sharma said that he spoke to the applicant about the Linden pharmacy on only one occasion while employed with the applicant. He did not deny his involvement in that pharmacy.

The parties did not speak of it again. [ 67 ] Parmodh Sharma said that 95% of the patients of the Linden pharmacy are local to Linden. The remainder are from other nearby towns or Calgary. The respondents note that there are approximately 114 people from NE Calgary who received medications from the Linden pharmacy (excluding any that have only attended to get a covid shot). Based on a review of records in the litigation, he says that of the 114 individuals, 35 were never patients of the plaintiff.

Of the remainder, 69 are relatives of shareholders of 206 Ltd, or acquaintances, employees or neighbours of shareholders, or the owners themselves. The last 10 consist of three occasional commuters to Linden from Calgary; three individuals who attended seeking services the applicant does not offer; two who came in for a covid shot and picked up a prescription at the same time; and two connections who were not identified. The respondents observe that in the early days of availability of covid shots, people would tend to go to any pharmacy that had the shot available.

That proposition is sufficiently notorious that I may accept it as factual for a great many people. The respondents also point out the applicant admitted it has not received any requests from patients or the Linden pharmacy to transfer care to that pharmacy [3] . [ 68 ] Parmodh Sharma stated in undertaking responses that the individual respondents began to look for a location for another pharmacy around October 2020. [ 69 ] The respondents say there was a good business opportunity to open a new pharmacy in the Martindale area because the applicant’s Martindale Pharmacy was the only pharmacy in the area.

The exact location was desirable because it was close to the Gurudwara which gathers a lot of foot traffic and Aneet Sharma and Hitesh Sharma live in the area. (In turn the applicant submits they live in a different district). [ 70 ] The respondents observe that there is no direct evidence that they took confidential information and abused it, such as: video footage from the cameras installed to monitor the pharmacy area in the applicant’s premises [4] ; forensic records of downloading information; or emailing of information. [ 71 ] They say the evidence of solicitation is exclusively hearsay or double hearsay.

They claim the applicant is mainly trying to have the Court make inferences that the respondents solicited others or mis-used confidential information on the basis there is no other way the individual respondents could have successfully obtained business at their pharmacies. [ 72 ] The respondents acknowledge that Mr Dhillon testified during cross-examination that a couple dozen patients told him they were solicited by the individual respondents to move their business to 230 Ltd’s pharmacy in Martindale when it opened. They criticize Mr Dhillon for not naming these patients.

However, they did not ask on cross-examination for the names or seek to impugn this evidence by challenging Mr Dhillon to identify the patients. The applicant suggested in oral argument that Mr Dhillon did not write the patient’s names down. If true, he nevertheless had an opportunity to make records of the complaints that he received them when he suspected the individual respondents would be opening a pharmacy.

The lack of detail on actual complaints is a significant gap in the applicant’s evidence. [ 73 ] The respondents invite me to find that Mr Dhillon is not a credible witness, because he was evasive and gave evidence that was inconsistent with recorded statements he made on two occasions before the litigation commenced. The latter allegations have generated a substantial volume of evidence and submissions on whether the recordings are admissible in this application. [ 74 ] The parties developed information about the size of the patient base of the parties.

The applicant’s Martindale Pharmacy served over 13000 patients in the period October 16, 2020 and September 15, 2021 (and over 15000 in the 12 months prior). 230 Ltd’s Martindale Pharmacy had just over 1400 patients. There were 499 patients in common, whom I refer to as overlapping patients. [ 75 ] The applicant emphasizes that of the overlapping patients, 157 were in the group that produced its top revenue (the top 20 % of revenue).

Harbir Dhillon says this shows a dis-proportionate number of the Applicant’s most lucrative patients went to the 230 Ltd’s Martindale pharmacy. [ 76 ] The respondents emphasize that of the 499 overlapping patients, 31% (157 people) came in for a covid shot; 29% (100

patients) came in only once; 23% (115 patients) are occasional patients; and 25% (132 patients) are regular patients. As well, 1% (7patients) decided not to fill their prescription. The respondents also emphasize extensive marketing activities in the community: TV andradio advertising, flyers, and attending community events.

They also point out 230 Ltd’s pharmacy operates under a well-known brand.While there isn’t evidence of the market share of this brand, I find it is notorious to anyone who travels in Calgary or searches forpharmacies that this brand has several outlets throughout the City. [77] The respondents also point out the applicant has advised it received 12 requests from patients or 230 Ltd’s Martindalepharmacy to transfer care to that pharmacy[5].

Nature of claim [78] The applicants claim the individual respondents breached their duties of good faith and fidelity by operating a competingpharmacy during their employment and using the applicant’s confidential information; breached their duty of confidence by usingconfidential information; breached their fiduciary duties by using the confidential information and soliciting customers; and committedcivil conspiracy. Issue 1: the applicable test [79] The tripartite test is well known.

The grant of an interlocutory injunction requires that the applicant demonstrate (1) a seriousquestion to be tried, in the sense that it is not frivolous or vexatious; (2) that it will suffer irreparable harm; and (3) that the balance ofconvenience favours granting the injunction (RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311 at p 334, ). [80] The first element -- whether there is a serious issue to be tried – is a low threshold. Speaking of this standard, the SupremeCourt of Canada in RJR at pp 337-338 said: What then are the indicators of “a serious question to be tried”?

There are no specific requirements which must be met in order to satisfythis test. The threshold is a low one. The judge on the application must make a preliminary assessment of the merits of the case. ... Once satisfied that the application is neither vexatious nor frivolous, the motions judge should proceed to consider the second and thirdtests, even if of the opinion that the plaintiff is unlikely to succeed at trial. A prolonged examination of the merits is generally neithernecessary nor desirable. [81] In exceptional cases, the Courts apply a higher standard – strong prima facie case.

The strong prima facie case standardrequires the applicant to show it will “probably prevail at trial” or is “likely to succeed at trial” (Modry v Alberta Health Services, 2015ABCA 265 at para 37). In RJR the Court observed that the circumstances in which this exception will apply are rare, and when it does, amore extensive review of the merits of the case must be undertaken (ibid at p 339). [82] The parties disputed whether a higher standard should apply in the present case.

The respondents advocated that the thresholdshould be the strong prima facie case, while the applicant advocated that the threshold is the lower requirement of demonstrating aserious issue to be tried. [83] One such exception, where the higher threshold applies, is described in the RJR case at p 338 as follows: Two exceptions apply to the general rule that a judge should not engage in an extensive review of the merits. The first arises when theresult of the interlocutory motion will in effect amount to a final determination of the action.

This will be the case either when the rightwhich the applicant seeks to protect can only be exercised immediately or not at all, or when the result of the application will imposesuch hardship on one party as to remove any potential benefit from proceeding to trial. Indeed Lord Diplock modified the AmericanCyanamid principle in such a situation in N.W.L. Ltd. v.

Woods, [1979] 1 W.L.R. 1294, at p. 1307: Where, however, the grant or refusal of the interlocutory injunction will have the practical effect of putting an end to the action becausethe harm that will have been already caused to the losing party by its grant or its refusal is complete and of a kind for which moneycannot constitute any worthwhile recompense, the degree of likelihood that the plaintiff would have succeeded in establishing his right toan injunction if the action had gone to trial is a factor to be brought into the balance by the judge in weighing the risks that injustice mayresult from his deciding the application one way rather than the other. [84] The respondents submit that the higher standard applies.

They submit the injunction application will have the practical effectof ending the action. Further, they cited a series of cases seeking to enforce restrictive covenants in employment contracts where theCourts applied the higher threshold of a strong prima facie case (Dreco Energy Services Ltd v Wenzel, 2008 ABCA 290; GlobexForeign Exchange v Kelcher, 2005 ABCA 419; Enerflex Systems Ltd v Lynn, 2005 ABCA 62; BrettYoung Seeds Limited Partnershipv Dyck, 2013 ABQB 319 at para 84). They say the rationale for applying the higher standard is (quoting from BrettYoung) that ...

A court should not prohibit a person from doing remunerative work for which he or she has some aptitude unless principle compels itto do so.

The law should be sensitive to the interest of a person whose ability to earn a livelihood may be thwarted by an interlocutoryinjunction. [85] In supplemental submissions, the respondents cited several cases to the effect that the higher standard applies not only tointerlocutory applications to enforce restrictive covenants in employment agreements, but also to similar applications where an employerseeks to place restrictions on a person’s ability to engage in their chosen vocation and earn a livelihood.

These may include interlocutoryapplications to enjoin a former employee from solicitation, competition or using alleged confidential information arising from allegedbreach of fiduciary obligation or breach of confidence (PointOne Graphics Inc v Roszkowski et al, 2021 ONSC 629; Orbis Engineering

Field Services v Taifa Engineering Ltd, 2019 ABQB 510; Doors on Demand v Wierenga, 2018 ABQB 60; Embedia TechnologiesCorporation v Blumell, 2018 ABQB 222; Edgetch HVAC Services Ltd v Ubhi, 2016 ONSC 7564 at paras 26-28; Benson Kearley &Associates Insurance Brokers Ltd, v Jeffrey Valerio, 2016 ONSC 4290; FLS Transportation Services Inc v Charger Logistics Inc,2016 ONSC 3652; Lockwood Fire Protection Ltd v Jason Caddick et al, 2015 ONSC 6320; Polar Wireless Corporation v Roberts,2012 ONSC 6482; Easyhome Ltd v Casey, 2009 ABQB 735; Gold In the Net Hockey School Inc v Netpower Inc, 2007 ABQB 520;Provincial Plating Ltd v Steinkey, (SK QB)). [86] The defendant noted that the Court in Imperial Sheet Metal Ltd et al v Landry and Gray Metal Products Inc, 2007 NBCA 51declined to apply the elevated test.

However, the Court recognized a relatively wide class of cases where the elevated standard shouldapply (ibid at para 24). [87] The applicant cited several employment cases where the Court applied the serious issue standard in the test for aninterlocutory injunction. These include: Laser Clean Ltd (Don’s Power Vac) v Clark, 2015 ABQB 645, rev’d on other grounds, 2016ABCA 4; Enviro Trace Ltd v Sheichuk, 2014 ABQB 381; Diversified Metal v Trivett, 2006 PESCAD 16; Canada East Manufacturing,Inc v Harvey, (NB CA). Many other examples can be found in reported Canadian case law.

The Applicant also citesFoundation Capital Corporation v Saxon, 2011 ABQB 102, where Jeffrey J applied the lower standard because the respondents offeredno evidence that the restrictions sought (contacting the applicant’s clients or approaching any of the applicant’s employees about leavingtheir employment) might impair their ability to earn a livelihood. [88] The applicant also cited my decision in Ranchman’s Holding Inc v Bull Bustin’ Inc, 2019 ABQB 220 where I applied theserious issue standard in a case where a former contracting party entered competition with its former counterparty.

The case did notinvolve an employment relationship. I stated that I declined to apply the elevated standard because I received only cursory submissionson the point, and the respondent had not shown that the application would effectively determine the action. [89] The applicant submits Laser Clean implicitly upheld the application of a lower standard in a case like the present case. I donot agree.

The first branch of the test was not in issue in that case (ibid at para 6,8). [90] Having received, in this case, an extensive review of the authorities, it appears to me that the weight of authority in this Courtis set out by Wakeling J (now JA) in BrettYoung, and summarized by Mah J in the recent Orbis decision: [57] I summarize this point as follows: Alberta case law establishes the elevated standard of strong prima facie case is to beapplied as the first branch of the three-part RJR-MacDonald analysis for interlocutory injunctions where enforcement of non-solicitationobligations or restrictive covenants are sought.

This is certainly the case with respect to restrictive covenant cases but is no less the casefor allegations of breach of fiduciary duty because the imposition of that duty imposes the same onerous restrictions. [91] I have concerns in applying an elevated standard. The serious issue standard generally applies, in recognition of the difficultiesof presenting and deciding complex factual and legal issues on the limited or conflicting evidence available in interlocutory applications.The same practical problems equally apply to claims by employers as other types of cases.

The potential for harm to the employer maybe great, where former employees occupy positions that allowed them to gain specific knowledge of the employer’s business prospectsor weaknesses. In a different context, the Court of Appeal stated: ... There is a legitimate basis for the low threshold at the first stage of the RJR-MacDonald test.

Even weak cases may be entitled tointerlocutory relief if the other aspects of the test weigh heavily in that direction, and the plaintiff should not be foreclosed at the firststage of the test from seeking that relief. (AC and JF v Alberta, 2021 ABCA 24 at para 30) [92] The cases the respondents cited prioritize the interests of earing a livelihood over the risks associated with the higher standardof proof. Moreover, it is difficult to distinguish the application of the higher standard to restrictive covenants simply because they arisefrom written agreements as opposed to other sources of obligations.

Given the substantial support for the higher standard in the Queen’sBench cases cited by the respondents, I would apply the principles in BrettYoung, Orbis and similar cases to interlocutory injunctionssought to preclude competition and soliciting of former customers.

The issue of using alleged confidential information in their newemployment is so closely related that I would apply the same standard. [93] The existing interim injunction prohibits the respondents, directly and indirectly, from “using, reproducing, copying, altering,or disclosing, for any purpose, patient information of persons known to be [the applicant’s] former or current patients and from otherwisesoliciting the business of persons known to be [the applicant’s] former or current patients. [94] These prohibitions go beyond persons who were patients when the individual respondents worked for the applicant andbeyond information learned by the individual respondents during their employment with the applicant. [95] The evidence indicates the respondents have a large network of friends, relatives and others in their community.

They seek tocarry on their profession or trade in their community. In my view, the restrictions constitute a significant restriction on the individualrespondents’ livelihoods, engaging their network of family, friends, and contacts. Accordingly, the higher standard applies. [96] That said, applying the serious issue standard would not have changed the outcome of this case. I will explain this in myassessment of the balance of convenience later in these reasons. Issue 2: The first branch of the test (

a) Breach of fiduciary obligations

[97] The applicants allege the individual defendants owe fiduciary obligations to the applicant. Consequently, they are prohibitedfrom soliciting patients for a reasonable period. Conversely, if they do not owe fiduciary obligations, they may compete or solicit subjectto ongoing duties of confidentiality and, in some instances, contractual obligations (KOS Oilfield Transportation Ltd v Mitchell, 2010ABCA 270 at para 32, citing Flag Works Inc v Sign Craft Digital

(1978) Inc, 2007 ABQB 434, 427 A.R. 206 at para 83, and RBCDominion Securities Inc v Merrill Lynch Canada Inc, 2008 SCC 54, [2008] 3 SCR 79 at para 19). [98] The elements of a fiduciary relationship are well established. The recent Alberta Court of Appeal decision of Abt Estate vCold Lake Industrial Park GP Ltd, 2019 ABCA 16 at para 73 summarizes the extensive case law as follows: ... The test for a fiduciary relationship is well established, and has been summarized in cases like Alberta v Elder Advocates of AlbertaSociety, 2011 SCC 24 at para. 27, [2011] 2 SCR 261 and HRC Tool & Die Mfg Ltd. v Naderi, 2016 ABCA 334 atpara. 6, 43 Alta. L.R. (6th) 23: (

a) The fiduciary has scope for the exercise of some discretion or power; (

b) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests; (

c) The beneficiary is peculiarly vulnerable to, or at the mercy of, the fiduciary holding the discretion or power; and (

d) The existence of an undertaking by the alleged fiduciary to act in the best interest of the alleged beneficiary or beneficiaries.

Mere vulnerability or reliance is not sufficient to create a fiduciary relationship: Elder Advocates at para. 28. [99] The required undertaking to act in the beneficiary’s best interest need not be express and may be found in the relationshipbetween the parties, in an imposition of responsibility by statute, or under an express agreement to act as trustee of the beneficiary’sinterests (Elder Advocates at para 32; HRC at para 19). [100] It is well established in case law that a key employee usually meets the requirements for imposing fiduciary duties (see forexample, Canadian Aero Services Ltd v O’Malley, (SCC), [1974] SCR 592 at p 606; 581257 Alberta Ltd v Aujla, 2013ABCA 16 at para 41 and cases cited therein; Imperial Sheet Metal at paras 44-59). [101] Beyond the group of directors, officers and key employees, the Courts are cautious in imposing the onerous duty of fiduciariesto employees, because the law “favours the granting of freedom to individuals to pursue economic advantage through mobility inemployment” (Barton Insurance Brokers Ltd v Irwin et al, 1999 BCCA 73 at para 39) and recognizes an individual’s need to earn alivelihood (Imperial Sheet Metal, at paras 36-37). [102] Not every employee performing an important and central role is a key employee (Kos at para 35).

In Kos at para 35, the AlbertaCourt of Appeal quoted, in support of this proposition, the comments of Martin J of this Court (now Martin J of the Supreme Court ofCanada) in Flag Works Inc v Sign Craft Digital

(1978) Inc, 2007 ABQB 434 at paras 47-49: Despite her centrality, I do not find that she owes the fiduciary obligations claimed. There is a difference between an employee who isimportant to the smooth and profitable functioning of the enterprise and the type of employee the law will affix with fiduciary duties.Fiduciary duties are among the most onerous obligations recognized by law and not every employee owes fiduciary obligations. Thiswas not the kind of relationship in which equity would intervene to protect a dependent or vulnerable party by acting on the conscience ofthe fiduciary.

See Anderson, Smyth & Kelly Customs Brokers Ltd. V. World Wide Customs Brokers Ltd., 1996 ABCA 169 ,[1996] 7 W.W.R. 736; 184 A.R. 81; 122 W.A.C. 81 (C.A.).). When examining the nature of the relationship and determining whetherfiduciary obligations are owed, it is important to return to foundational principles and to apply them according to the purpose underlyingsuch obligations. Too wide a reading of Frame v. Smith would have purchasing clerks as fiduciaries because they may spend substantialsums, affect the employer’s legal status and make the employer vulnerable to the clerk’s imprudent decisions.

The law will intervene andimpose fiduciary duties in limited circumstances where necessary and the defendants argue that the imposition of such obligations shouldbe guarded because it creates significant restrictions. The underlying notion behind a breach of the fiduciary obligation seems to be themisappropriation to the fiduciary of an opportunity that rightfully belongs to the employer. Dependency or vulnerability is an indispensable feature of the existence of a fiduciary obligation: see Physique Health Club Ltd. v.Carlsen (1996), 1996 ABCA 358 , 193 A.R. 196, 45 Alta.

L.R. (3d) 383 (C.A.) at para. 25 Flag Works argued that it was vulnerable primarily because Ms. Holt provided quotes for prospective jobs, ordered supplies, andsupervised. Proper costing and quoting in production is important to the business, but it does not make her into a fiduciary. Nor does theability to function as a purchasing agent: having the ability to negotiate prices within a range set by top management does not make Ms.Holt a fiduciary.

Whether an employee does their job badly or poorly and whether it has a devastating effect on profitability is not the testof vulnerability. (Underlining added by Eamon J). [103] In the present case, Hitesh Sharma and Aneet Sharma undoubtedly owed fiduciary duties to the patients. But did they owefiduciary duties to their employer? [104] Both had access to the applicant’s information about its pharmacy patients and likely interacted with a substantial number ofthose patients.

There is no evidence to show that they had any knowledge, let alone any that could be used to their advantage, of tradesecrets, marketing techniques, business strategies, or overall revenues and costs of the operation. [105] Both could make decisions that could affect their employer’s legal liability to patients (for example, negligence in dispensingmedications or counselling patients within their scope of professional practice).

[106] Aneet Sharma also performed regulatory functions as a licensee pharmacist that could affect the applicant’s interests incomplying with the regulatory regime. The role of licensee pharmacist is a regulatory requirement. The licensee pharmacist mustpersonally manage, control, and supervise the practice of pharmacy in the licensed pharmacy (Pharmacy and Drug Act, RSA 2000, c P-13, s 5.01(1)(a)). [107] The Act contemplates that each licensed pharmacy also has a “proprietor”, who is assigned specific responsibilities under theAct.

Such a proprietor is a person who owns, manages, or directs the operation of a facility in which a licensed pharmacy is located andexercises a significant degree of control over the management and policies of the licensed pharmacy, or the conduct of the regulatedmembers who are employed by the licensed pharmacy. [108] The licensee is expected to personally supervise day to day operations to ensure regulatory compliance (Alberta College ofPharmacists, Licensee vs Proprietor’s Agent, appended as Exhibit 7 to Mr Dhillon’s Affidavit sworn June 2, 2021).

In contrast, theproprietor or proprietor’s agent is the owner or a designated representative of the owner, who oversees and directs the operation of thepharmacy, provides resources, and supports the licensee in complying with the legislative framework (ibid). [109] There is no evidence that Aneet Sharma or Hitesh Sharma could make decisions or exercise authority that would affect theemployer’s legal and practical interests in terms of customer retention, business development or similar matters, or were involved in theover-arching activities of the proprietor’s agent under the regulatory scheme. [110] There is no evidence that Parmodh Sharma had any discretion or decision-making authority at all, let alone any that could affectany relevant legal or practical interest of the applicant.

His duties mere mainly clerical and greeting patients, and he worked under thesupervision of pharmacists. [111] There is little evidence that the individual respondents undertook to act in the employer’s best interests.

The applicant says hestated to Aneet Sharma and Hitesh Sharma at the outset that if he were going to train them, they must “never think about opening acompeting pharmacy” and they promised from the outset that they would “never” compete against the applicant. [112] In Aneet Sharma’s case, the applicant provided evidence that she expressed her loyalty to her employer in late 2016 that shewould not do as one of the Applicant’s former licensee pharmacists had done, in leaving “their pharmacy with patient records in hand”.

The applicant also said that shortly before Aneet Sharma left her employment, she told her employer in response to a request that shesign a non-solicitation and non-competition agreement that she would not open a pharmacy to compete with him or steal his patients. Atthat point, the applicant was obviously attempting to foist additional obligations on Aneet Sharma.

The applicant asserts similaraffirmations of loyalty by the other individual respondents. [113] These conversations, assuming they occurred, are in substance a claim of a permanent promise not to compete but are notexpressions of an undertaking to act in the employer’s best interests and thereby assume the very onerous obligations of a fiduciary. [114] The evidence does not seriously suggest that any of the individual respondents could be key employees.

After reading thevoluminous affidavits and cross-examinations, I am satisfied that the substance of the claim simply is that the individual respondentsknew the identity of some patients, developed (or already had) friendships, acquaintances, or other relationships with some patients, andmust have known the needs of some patients prior to their departure. [115] Mere access to or knowledge of patient information or having day to day dealings with patients, does not take the individualdefendants out of the common category of employee who has unavoidable knowledge of or rapport with customers. [116] The applicant cited older cases where lower-level employees with access to customer or other information were found to befiduciaries (White Oaks Welding Supplies v Tapp (1983), (ON SC) and EJ Personnel Services Inc v QualityPersonnel Inc, 1985 OJ No 534, 6 CPR (3d) 173 (SC)).

White Oaks was disapproved in Imperial Steel at para 61 because it casts thenet of fiduciary obligations too widely. [117] In view of later Alberta cases such as Flag Works, I would not follow cases such as White Oaks and EJ Personnel Services.Such knowledge and rapport alone are not sufficient to attract onerous fiduciary duties that unnecessarily impinge on the values ofemployment mobility (see Imperial Sheet Metal at paras 61-63; ADM Measurements Ltd v Bullet Electric Ltd, 2012 ABQB 150 atparas 34-37; Firemaster Oilfield Services Ltd v Safety Boss (Canada)

(1993) Ltd, 2000 ABQB 929 at paras 29, 42). [118] In these circumstances, it is unlikely that the applicant will succeed in establishing that Hitesh Sharma or Parmodh Sharma arefiduciaries or even that there is a serious issue to be tried. [119] In Aneet Sharma’s case, the assertion that she owed fiduciary obligations is not frivolous considering her relatively greaterresponsibilities in overseeing the Whitehorn pharmacy. Nevertheless, there is no evidence that she had authority in high levelmanagement (the matters under the responsibility of the proprietor’s agent). She managed only one of five pharmacies.

She did notmanage or appear to have much role in the applicant’s Martindale Pharmacy. While her role in the Whitehorn location was a regulatoryrequirement and important to the functioning of the applicant’s overall business undertaking, this is not a case where it is necessary toimpose fiduciary responsibilities on her.

It is likely that the applicant will fail in proving her to be a fiduciary. [120] The applicant faces a further hurdle in its claim that Aneet Sharma or Hitesh Sharma were breaching fiduciary obligations.There is not a strong prima facie case, or even a serious issue to be tried, that fiduciary obligations, if the law imposed any on theserespondents, continued to exist during the material times in the present lawsuit. [121] In this regard, their fiduciary obligations would not be permanent: “... [E]ven if fiduciary obligations exist, they merely precludesolicitation of specific customers for a reasonable period of time; they do not prevent employment with a company competing with aformer employer” (KOS at para 36). “A reasonable period of time is the time a former employer fairly requires to contact existing orpotential customers with whom the fiduciary employer had developed a relationship while employed by the former employer and toundertake other ameliorative measures required to counter the departure of the fiduciary employee.” (BrettYoung at footnote 12 and

authorities cited therein; see also ServiceMaster of Canada Limited v Meyer, 2019 ABCA 130 per Wakeling JA at para 141 andAnderson, Smyth & Kelly Customs Brokers Ltd v World Wide Customs Brokers Ltd, 1996 ABCA 169 at para 32). [122] There is no evidence that Aneet Sharma had any significant operational or managerial role in the Linden pharmacy beforeOctober 2020. She stated in cross-examination that she occasionally worked as a relief pharmacist at this pharmacy starting in January2020. There is no evidence contradicting her characterization of her involvement.

There is no evidence that Hitesh Sharma was or isinvolved in this pharmacy other than his testimony on cross-examination that he worked two or three shifts as a relief pharmacist. Hewasn’t asked when he worked these shifts. [123] There is no evidence that any of the pharmacist respondents began planning for the new pharmacy in Martindale before late2020. Parmodh Sharma said the individual respondents started looking for a new location about October 2020. Aneet Sharma testifiedshe was initially approached about becoming involved in November 2020. She invested in November or December 2020.

Hitesh Sharmaknew of her investment and participated in it, at least by directing the parties’ joint funds for the share purchase. The evidence is clearthat 230 Ltd’s new pharmacy did not begin serving the public until mid-2021. [124] The applicant did not address evidence that would assist in assessing a reasonable time during which the pharmacist defendants,if they were fiduciaries, would be restricted in their activities. Aneet Sharma had left the applicant’s employment two years or morebefore becoming involved in the Linden pharmacy.

There is no evidence of Hitesh Sharma having anything other than aninconsequential involvement in the Linden pharmacy, and he left the applicant’s employment even earlier than Aneet Sharma. Both theserespondents had left their employment more than two years before any evidence of planning to pursue the start up of another pharmacyin Martindale. [125] In my opinion, a period of two years is far longer than the maximum reasonable period during which they would be precludedfrom competing or soliciting under a fiduciary obligation.

The applicant had ample time to contact patients to inform them of staffchanges among the pharmacists if it truly believed these individuals were a threat to its business as it now asserts. [126] The applicant argues that the expiry of such a time does not matter. Parmodh Sharma left his employment much later, inOctober 2020. His fiduciary obligations would be ongoing in 2020 and later. The pharmacist respondents would be liable for knowinglyparticipating or assisting in Parmodh Sharma’s breaches of fiduciary obligations (Flag Works at para 54 and authorities cited therein).

Ido not accept this argument poses a serious issue or prima facie case, because there is no serious issue that Parmodh Sharma had anyfiduciary obligations. [127] In

summary, the applicant has not demonstrated a strong prima facie case or even serious issue to be tried, that the respondentpharmacists are in breach of any fiduciary obligation by becoming involved in the Linden or Martindale pharmacies or that ParmodhSharma owed fiduciary obligations. [128] This finding is opposite to Devlin J’s finding, but as mentioned earlier the evidentiary landscape is far different than the onebefore Devlin J. (

b) Breach of confidence [129] An employee is not permitted to use, following termination of their employment, their former employer’s confidentialinformation: ... It is clear from the foregoing that an employee will not be permitted, following termination of his employment, to use for his own benefitconfidential information acquired in the course of his employment or information which is "special or peculiar" to his ex-employer.

Onthe other hand, it is equally clear that following termination of the relationship an employee is free to use for his own benefit or for thebenefit of third parties any skill and general knowledge which he acquires during his employment.... (Monarch Messenger Services Ltd v Houlding, (AB QB) at para 13) [130] Similarly, the Alberta Court of Appeal observed in Carlsen v Physique Health Club Ltd (Physique Fitness Store), 1996 ABCA358 at para 4: [4] Whether or not the male Appellant breached his fiduciary obligations depends on the nature and scope of those obligations.The following principles emerge from the decided cases:

(1) A fiduciary cannot take a maturing business opportunity from an employer either while he or she is an employee or after theemployment relationship has been terminated. Canadian Aero Service Ltd. v. O’Malley et al. (1973) (SCC), 40 D.L.R.(3d) 371 at 382.

(2) In opportunity cases, there must be a misuse of the fiduciary’s power before liability attaches. Trophy Foods Inc. v. Scott et al (1995)1995 NSCA 74 , 140 N.S.R. (2d) 92 (C.A.) at page 105; Sure-Grip Fasteners Ltd. v. Allgrade Bolt & Chain Inc. (1993), 45C.C.E.L. 276 at 288.

(3) Competition with the Plaintiff after the employment relationship has ceased does not of itself constitute a breach of the fiduciary duty.Metropolitan Commercial Carpet Centre Ltd. v. Donovan et al. (1989) (NS SC), 91 N.S.R. (2d) 99 per Davison J. atpage 103: “Even top management, in the absence of a contract, have the right to leave their employment and form a company … which is in directcompetition with their former employer”.

(4) The right to compete is qualified; the employee must not actively solicit the business of specific customers of the employer. Therestriction continues “for a reasonable period of time after termination of the employment”. Sure-Grip Fasteners Ltd. v. All- grade Bolt& Chain Inc., supra [(1993), 45 C.C.E.L. 276 (ON Gen Div)] at page 290.

(5) After the employment relationship has terminated, the employee must not use or disclose confidential information learned in thecourse of his or her employment, but the obligation does not extend: “… to cover all information which is given to or acquired by the employee while in his employment, and in particular may not coverinformation which is only ‘confidential’ in the sense that an unauthorized disclosure of such information to a third party while theemployment subsisted would be a clear breach of the duty of good faith”. (Faccenda Chicken Ltd. v. Fowler [1986] 1 All E.R. 617 at625).

Monarch Messenger Services Ltd. v. Houlding (1984), (AB QB), 56 A.R. 147 aff’d. (1986) 13 C.C.E.L. xxxvi is to alike affect. O’Leary J. (now J.A.) stated at page 152: “An employee will not be permitted, following termination of his employment, to use for his own benefit confidential informationacquired in the course of his employment or information which is ‘special or peculiar to his ex-employer’.

On the other hand, it isequally clear that following termination of the relationship an employee is free to use for his own benefit or for the benefit of third partiesany skill and general knowledge which he acquires during the course of his employment.”

(6) Employees who are fiduciaries of their former employer breach those obligations when they take a confidential customer list and usetrade secrets of the former employer for use in a competing enterprise. Tree Savers International Ltd. v. Savoy (1992) (AB CA), 84 Alta. L.R. (2d) 384 (C.A.). [131] Although the quoted passage was written in the context of a fiduciary, the principles relating to confidential information in sub-para (5) of the quotation are applicable to all employees. [132] The applicant submits that the information in its patient database (including names and contact information) is confidential.

Thefact that a substantial portion of this information is available to health care professionals through Alberta Netcare (the provincialelectronic health record available to health care professionals under certain conditions of use) does not detract from its status asconfidential information because health care professionals cannot access that information for the purpose of soliciting potential patients. [133] The respondents submit that the law does not prevent an employee from soliciting customers from memory or taking notes inpersonal diaries.

I do not agree the law creates such a bright line and explain why in the following paragraphs. [134] O’Leary J as he then was, in Monarch Messenger Services discusses the question when information is considered confidential: ... The difficult question is to determine what knowledge so acquired is to be considered as confidential or "special or peculiar" andsubject to protection for the benefit of the ex-employer.

In Batt, The Law of Master and Servant, supra, the type of information whichan ex-employee must not use to his own benefit is described as follows at page 238: " … The information must be of a special or confidential character, since the general information acquired by him in service he may usefor his own benefit, and this, even although he is under restrictive covenants. No precise rule or no exhaustive catalogue can be framed…" It is also clear that the information entitled to protection for the benefit of the ex-employer need not be contained in a document or othertangible or physical form.

It may include information committed to memory by the ex-employee. In Printer's and Finishers Ltd. v.Holloway, [1943] 3 All E.R. 731, Cross, J., said at page 735: "The mere fact that the confidential information is not embodied in a document but is carried away by the employee in his head is not, ofcourse, of itself a reason against the granting of an injunction to prevent its use or disclosure by him.

If the information in question canfairly be regarded as a separate part of the employee's stock of knowledge which a man of ordinary honesty and intelligence wouldrecognize to be the property of his old employer and not his own to do as he likes with, then the court, if it thinks that there is a danger ofthe information being used or disclosed by the ex-employee to the detriment of the old employer, will do what it can to prevent thatresult by granting an injunction." (ibid at para 13). [135] Monarch is contrary to the respondents’ position.

In Monarch, the defendant was found in breach of his duty as a formeremployee by contacting two of the plaintiff’s customers, of whom he had a memory, where he was intimately familiar with their specialneeds, had developed a personal relationship with the individuals within those companies who were responsible for employing theservices, and was familiar with the rates charged by the plaintiff to those customers.

A similar example appears from QuantumManagement Services Ltd v Hann, (ON CA). [136] In contrast, the Alberta Court of Appeal in Globex Foreign Exchange Corporation v Kelcher, 2011 ABCA 240 at para 35-37noted there is conflicting authority on the point. The Court observed that Monarch has been criticized by some appellate courts, and it isquestionable whether the list of customers the defendants made from memory, post-employment, was confidential information.

TheCourt in Globex did not decide the point. [137] Many of the authorities, to the effect that a former employee generally may solicit customers from memory, are collected inAlberts v. Mountjoy (1977), (ON SC). The respondents cite recent examples, to the effect that basic name and contactinformation held on a broker’s phone or in a salesperson’s personal diary, should not properly be treated as protected confidentialinformation (Overseas Insurance Brokers Corp v Ko, 2018 ONSC 4612 at paras 19-32; Capital Direct Lending Corp v Blanchette,2019 BCSC 1068 at paras 45-57).

[138] It is clear from authorities such as Mountjoy that a former employee may not utilize information taken from a list of customersor clients removed from the ex-employer's premises, taken “in fraud of” the employer, or intentionally acquired to advance anemployee’s own business.

Beyond that, the Courts must assess on a case-by-case basis whether the information is sufficientlyconfidential to attract the prohibition on use (Jetco Heavy Duty Lighting v Fonteyne, 2018 ABQB 345 at para 146, citing GasTOPS Ltdv Forsyth, at paras 124-25, (Ont SCJ), aff’d 2012 ONCA 134). [139] The authorities cited by the respondents are not contrary to the required contextual assessment. They do not draw a bright linebased on memory (or innocent recording in personal records) alone.

Rather, “the settled distinction between information in anemployee’s memory and the removal of a customer list, as well as the nature of the information, (i.e., mere names and contactinformation of the customers compared to more detailed information) [are] important considerations in drawing the line between what isfair and unfair in the employment context” (Ko at para 21), but whether the information can be recreated without a list based on memoryalone “should only be one consideration” (Ko at para 30). [140] The applicant proved that it holds detailed information about its patient’s pharmaceutical needs, insurance coverages, and thelike.

It submits there is evidence (mainly circumstantial) that the respondents solicited patients. It seeks to infer that the individualrespondents must have taken detailed specific information of the applicant’s patients, to have solicited them. In addition to thecircumstantial evidence, it points to one or two particularized incidents of soliciting.

Mr Dhillon claimed in cross-examination that“dozens” of patients informed him of soliciting activities but did not provide any meaningful particulars. [141] The individual respondents say they had developed relationships with some patients over the years, had existing relationshipswith some patients developed independently of their work with the applicant (eg, neighbours, family, friends, network of contactsthrough children’s school or being part of the community at their Gurudwara), and innocently recorded some patient’s contactinformation on their mobile phones in the course of their work.

They denied soliciting patients. [142] I do not agree, based on the evidence presented to date, that there is a serious issue to be tried that the individual respondentstook or recorded information from a list of patients, or took information “in fraud of” the employer, or intentionally acquired informationto advance their own business. [143] Rather, the individual respondents had recorded contact information of some patients on their personal electronic devices inconnection with their employment duties or otherwise recalled the identities of patients. [144] I agree with the applicant that there are serious issues whether patient information known to the individual respondents bymemory or in their personal contact records, was confidential information.

First, health care information is highly personal and oftenconsidered sensitive by the patient. The public trust in the health care system partly depends on the integrity of their confidentialinformation. That trust can be eroded where patients are brought into these types of commercial disputes involving departingprofessionals who are contacting strangers to inform them of another health care provider.

Second, there is evidence (although disputed)that the individual respondents signed written undertakings of confidentiality that cast confidential information quite widely (para 39above). [145] I also agree with the applicant that there are serious issues whether the individual respondents actively communicated, directlyor indirectly, with Calgary patients who filled prescriptions in the Linden pharmacy.

I find it hard to believe that customers moved fromthe applicant’s Martindale Pharmacy to the Linden pharmacy purely by coincidence, and without some sort of active communication bysomeone associated with the Linden pharmacy or someone related to such a person. The details remain unclear, and the evidence isvague as to what information was probably known about each patient who came to do business with the Linden pharmacy, or thecurrency of that information.

In the case of the pharmacist respondents, who left their employment some years before becoming involvedwith the Linden pharmacy, any information might have been stale. [146] In Parmodh Sharma’s case, the applicant proved to the higher standard - a strong prima facie case - that he communicated, orfacilitated communication, with some of the applicant’s patients who moved to the Linden pharmacy. He became an owner of thatpharmacy much earlier and remained an employee of the applicant much later, than the other individual respondents.

Again, thecoincidences of patients in NE Calgary moving to a pharmacy in a small town 100 km distant, are difficult to ignore. Again, the detailsare vague, and some of the patients were likely innocently solicited by other owners of that pharmacy. [147] I also find that there is a serious issue to be tried whether the individual respondents solicited or actively communicated withpatients to fill their needs through 230 Ltd’s new Martindale pharmacy. A new pharmacy would tend to attract a significant number ofthe applicant’s existing patients.

It is across the street from the applicant’s pharmacy, in an area of high foot traffic, and close to theGurudwara where the individual respondents have close connections with community members. Also, 230 Ltd engaged in marketing andpromotion in the community. However, there is also evidence of more unusual behaviour. The applicant showed that a small number ofpatients who had earlier moved to the Linden pharmacy, later went to 230 Ltd’s pharmacy after it commenced operations.

It probably isnot coincidental that these patients moved between pharmacies that, by late 2020, both had connections with Parmodh Sharma and AneetSharma. This is tempered by the evidence that these patients are part of a group who had other relationships with the individualrespondents or the principals of the Linden pharmacy. [148] However, mere communication alone is not sufficient. The applicant must show to the required standard that whateverinformation they used was confidential.

I do not find, on the present record, that the applicant demonstrated it will likely succeed inestablishing breach of confidentiality. [149] The applicant essentially seeks an inference that the patients would not have gone to the Linden pharmacy or the newMartindale pharmacy but for widespread use of detailed patient information or widespread targeting of patients. Mr Dhillon’s repeatedassertions to that effect do not make his evidence any stronger than speculation on a very incomplete record.

The respondents havepresented alternative, plausible explanations, and there are many gaps in the evidence that the applicant would need to fill before itstheory becomes a reasonable alternative inference. [150] That leaves the possibility that the individual respondents contacted various patients merely to inform them of another

pharmacy. [ 151 ] Assessing confidentiality requires consideration of all relevant circumstances. I am not persuaded that the applicant has a strong prima facie case that communication by a pharmacist or assistant to patients or former patients with whom they have other existing significant relationships (such as a close friendship or family connection), merely to inform them of their change of practice or employment, would constitute a misuse of confidential information. [ 152 ] This communication may have been all that occurred. Perhaps there was something more.

I am left mainly to speculate about the nature of the communication, and to whom. Therefore, I am not persuaded that the applicant demonstrated a strong prima facie case. [ 153 ] Before moving on, I note that the respondents also submitted that, as departing professionals, they would have been entitled to contact patients to ensure they receive the opportunity to choose the professional who will continue to serve them.

This submission is based on cases such as Loreto v Little et al , 2010 ONSC 755 at para 39 and authorities cited therein, where an exception has developed that permits certain types of professionals who are moving their practices to directly communicate clients whom they served. [ 154 ] I decline to decide if such an exception might apply to a pharmacist. [ 155 ] First, the respondent pharmacists left their employment approximately two years before any involvement with the Linden pharmacy or the development of the new Martindale pharmacy.

There is no evidence to seriously suggest that they contacted any patients on their respective departures in late 2017 or early 2018 to inform them of their move, let alone out of a sense of professional obligation. [ 156 ] Second, Parmodh Sharma is not a regulated health professional – he is a supervised assistant. The exception would not be available to him. [ 157 ] Third, I did not receive evidence about the practice standards of departing pharmacists including an obligation, if any, on the employer or departing pharmacist to inform patients of the change.

Such standards would be an important consideration in deciding whether the patients’ contact information is confidential as between employer and departing pharmacist and the way such information could be used (eg, a joint communication by the pharmacy and

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