UNIPCO LTD., A BODY CORPORATE, UNIPCO PURCHASING PROGRAM, A PARTNERSHIP, – v. –, 2023 NBKB 200

IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF MONCTON Unipco Ltd., a body corporate, Unipco Purchasing Program, a partnership v. Scott Mullin 2023 NBKB 200 MC/306/2022 BETWEEN: UNIPCO LTD., A BODY CORPORATE, UNIPCO PURCHASING PROGRAM, A PARTNERSHIP, – and – SCOTT MULLIN DECISION BEFORE: Justice Robert M. Dysart AT: Moncton, New Brunswick DATE OF HEARING: June 27, 2023 DATE OF DECISION: November 22, 2023 APPEARANCES: Scott Ellsworth, K.C. & Samuel Gagnon, for the Plaintiffs Robert Basque, K.C. & Julien Blanchard, for the Defendant

DYSART, J. INTRODUCTION [ 1 ] This action involves competing claims following Scott Mullin’s departure from his employment with Unipco Ltd. in early 2021. Both parties now bring competing motions for

summary judgment arguing there is no genuine issue requiring a trial. [ 2 ] In this action, Unipco claims that Mr. Mullin, the former Director of Computer Program Development, resigned from his position on January 3, 2021, and subsequently breached the terms of both a non-compete agreement and a non-disclosure agreement which he had signed at the commencement of his employment. Unipco alleges that he then sought out a competitor in an effort to share trade secrets and harm Unipco, and then went to work for that same competitor. [ 3 ] Unipco was originally claiming damages and costs. In the end, however, Unipco abandoned most of those claims and on this motion for

summary judgment seeks only injunctive relief, restraining Mr. Mullin from disclosing Unipco’s confidential information, as per the terms of the non-disclosure agreement. Unipco also seeks solicitor-client costs or, in the alternative, significant costs against Mr. Mullin. Unipco alleges that there is no genuine issue requiring a trial with respect to its narrowed claim. [ 4 ] Mr.

Mullin, in response, denies the accusations that he has breached his non-compete agreement, and he counterclaims against Unipco, alleging that he was constructively dismissed from his employment, and he claims damages in lieu of reasonable notice at common law. He also alleges that Unipco breached his reasonable expectation of privacy by viewing Facebook Messenger exchanges he had with other employees and former employees which were viewed by Unipco following Mr. Mullin’s departure. Mr. Mullin brings his own motion for

summary judgment, arguing that there is no genuine issue requiring a trial relating to his counterclaim. [ 5 ] Because Unipco has limited its claim to a permanent injunction against Mr. Mullin with respect to the disclosure of confidential information, the live issues in this lawsuit and on these motions for

summary judgment are: 1) Is there a genuine issue requiring a trial regarding Unipco’s entitlement to an injunction restraining Mr. Mullin from disclosing confidential information? 2) Is there a genuine issue requiring a trial with respect to Mr. Mullin’s allegation of constructive dismissal? and 3) Is there a genuine issue requiring a trial with respect to Mr. Mullin’s claim of breach of privacy and the damages which might flow from such a breach?

THE EVIDENCE [ 6 ] The evidence, gleaned from the affidavits filed by the parties, is summarized below. [ 7 ] Unipco is a partnership which operates a group food service purchasing and rebate program. It includes more than 1000 “stakeholders” who, through group purchasing power, reduce the cost of purchases of food items and other goods related to the hotel/restaurant/hospitality sector. [ 8 ] Mr. Mullin was initially retained by Unipco as an outside IT Consultant approximately 25 years ago. He eventually joined Unipco as an employee in 2014, working as the company’s Director of Computer Program Development.

He was paid a salary of $75,000 per year plus benefits, which included group health insurance and an RRSP contribution program. [ 9 ] As a condition of his employment, Mr. Mullin signed two separate agreements: a non-disclosure agreement dated October 8, 2014, and a non-compete agreement dated October 6, 2014. The Non-disclosure agreement

[ 10 ] The non-disclosure agreement provided, among other things, that Mr. Mullin, through his employment with Unipco, would be exposed to and would have access to confidential information which was the property of Unipco. Confidential information was defined under the terms of that agreement as any information which is not known to the general public or to Unipco’s competitors, and it specifically included business plans, pricing policies and other trade secrets. It also specifically included Unipco’s client lists and other information on its IT servers. [ 11 ] In signing the non-disclosure agreement, Mr.

Mullin agreed not to disclose, use or copy any confidential information except as may be required in his capacity as an employee. It was expressly agreed that his obligation to safeguard such confidential information survived the end of his employment with Unipco. [ 12 ] The terms of the non-disclosure agreement provided that, in the event of a breach, the only effective remedy available to Unipco would be injunctive relief, in that disclosure of such information would constitute irreparable harm to Unipco. The Non-Compete [ 13 ] Under the terms of the non-compete agreement, Mr.

Mullin agreed not to engage, in any manner or in any capacity, in any business which is “materially competitive” with Unipco. The geographic area was all of North America and the term of the non-compete was for a period of two years following the end of Mr. Mullin’s employment with Unipco. [ 14 ] Of course, more than two years has now elapsed since Mr. Mullin left Unipco and Unipco has abandoned any remedy arising from an alleged breach of the non-compete agreement.

While the non-compete agreement is effectively moot, it is nonetheless helpful to consider the terms of that agreement when the Court assesses the entirely of the evidence before it. It adds context and a better understanding of the parties’ expectations and their conduct following Mr. Mullin’s departure in January 2021. The years 2014-2021 [ 15 ] The parties agree that, from 2014 to 2020, Mr. Mullin carried out the functions of his employment without incident, managing the programming and maintenance of Unipco’s IT system and databases. [ 16 ] It should be noted, as well, that Mr.

Mullin continued to work as an independent contractor for a number of private clients, most of whom were in the healthcare sector. He had been doing that work prior to becoming an employee at Unipco, and it was fully condoned by Unipco after 2014. [ 17 ] In 2020, the world was affected by the COVID-19 outbreak. In response, Unipco shut down nearly all of its business operations and laid off most of its staff, including Mr. Mullin.

According to the evidence before the court, only three senior members of the company remained through that shutdown, all at a reduced salary. [ 18 ] Unipco applied for and received financial support from the federal government with respect to its payroll during that time, representing 75% of the total wages. [ 19 ] Mr. Mullin was the first employee called back to work following the layoff, on or about May 4, 2020. Relying upon the wage subsidies, Unipco offered Mr. Mullin a return to his employment at 75% of his usual salary, which Mr. Mullin accepted. It should be noted that Mr.

Mullin maintains that he had no choice but to return at that reduced salary, and he further maintains that his layoff and his unilateral reduction in salary constitute grounds for constructive dismissal. This will be discussed further below in these reasons. [ 20 ] By June 22, 2020, Mr. Mullin was returned to his full salary, meaning that he worked for approximately 6 or 7 weeks (May 4 to June 22) at a reduced salary. The “Resignation” [ 21 ] Mr. Mullin continued to work at Unipco until January 3, 2021, when Mr. Mullin submitted his resignation by email to then-CEO

Eric Sloan, writing: “I think we can all agree that 2020 has been an eye opening year for each of us. It has been especially tough on me and after some very serious thought about where I want to go in 2021, it has become obvious during the past week that those future plans do not include working at Unipco as an employee. I have immensely enjoyed the creative development work there over the past 25 years, but unfortunately that fun factor has lost its luster, most likely due to all the extra time that I have put in which has gone practically unnoticed.

I would be interested in looking at different options, perhaps contractor wise, but as an employee … consider this my immediate resignation. […]” [ 22 ] A few days later, on January 7, 2021, Mr. Mullin met with Eric Sloan and another employee, Mathieu Doiron, for an exit interview. According to Mr. Doiron’s affidavit evidence, which is not challenged by Mr. Mullin, the following communications occurred during that exit interview: • Mr. Mullin assured them that all source codes where on the Unipco IT system in the SQL Server; • Mr.

Mullin stated that Unipco did not own any of his “developer tools” which he had taken with him; • Mr. Mullin assured them that he had no anger or malicious intent towards Unipco, but that he was frustrated and tired due to the work that he had been doing primarily for external, private clients, which had resulted in his working every day for approximately 3 months; • Mr. Mullin confirmed that he had not been asked to work after regular hours and that he was not claiming any unpaid work or overtime; • Mr.

Mullin expressed that he needed more flexibility and he had brought his excess workload upon himself. [ 23 ] Within a few days of Mr. Mullin leaving the company, Unipco retained Charles Bujold and his company, Accra Solutions Inc., which is an IT consulting firm. Mr. Bujold was asked to conduct a thorough, system-wide review of Unipco’s IT system, including the database server, the file server and the employees’ individual workstations. It would seem that one of the reasons for this assessment was that Mr.

Mullin, when he left the company, had taken a removable hard drive from his workstation, which worried Unipco. [ 24 ] Mr. Bujold concluded – and this is not disputed – that Mr. Mullin, in his capacity as Director of Computer Program Development, had access to all of Unipco’s data. This included financial and budgeting information, client lists and contact lists, transaction data, pricing agreements that had been negotiated by Unipco and its suppliers, strategies used by Unipco to negotiate those agreements, rebate information and contract details with its various members and suppliers.

It is obvious that most of that information would be highly sensitive and would constitute confidential information as per the non-disclosure agreement. [ 25 ] Mr. Doiron states in his affidavit that Mr. Mullin never advised Unipco that he had removed an external hard drive from his workstation computer. For his part, Mr. Mullin maintains that the contents of that external hard drive, software programs, were the “developer tools” he had referred to in his exit interview and which he had purchased himself. He says he used those tools to design Unipco's IT systems. Mr.

Mullin acknowledges that he started to use removable hard drive in 2019, just over a year before he left Unipco. He has not provided any explanation as to why he started using his own external drive at that time. That is, he has not provided an explanation as to what compelled him to do so. He maintains that he paid for that software himself, which is why he asserts it is not Unipco’s property and was merely a tool he used in his trade, so-to-speak. [ 26 ] According to Mr.

Bujold, when he checked the IT source codes on the Unipco system, these were outdated – that is, they pre- dated various other programs which suggested that newer, up-to-date source codes had been operating previously, but those newer source codes could not be located anywhere on the system. That is the basis of Unipco’s claim that Mr. Mullin removed those source codes when he left. There is no dispute that the source codes would be the property of Unipco. For his part, Mr. Mullin denies removing any source codes and he maintains that Unipco’s contractor, Mr.

Bujold, simply did not know where to look for them. [ 27 ] Because of concerns over what Mr. Mullin may have removed, Mr. Bujold recommended that Unipco install a completely new, proprietary software system, which it did at “significant expense,” he states. The Facebook Messenger Messages [ 28 ] According to the evidence of both Mr. Bujold and Ms. Ann Simpson, Vice President of Program Development at Unipco, they were working on Mr. Mullin’s former workstation in November 2021, some 10 months after his departure. They had access to that workstation using the password that Mr.

Mullin had given them when he left the company. This was not the first time they had accessed that workstation, but apparently it was the first occasion where a Facebook Messenger application “popped up” on the screen. It was observed that Mr. Mullin had exchanged messages with other current and former employees of the company. Worrying that the systems

had been compromised by an unauthorized access, Mr. Bujold conducted a more thorough review and preserved all such communications. That review disclosed the following communications between Mr. Mullin and various other employees or former employees of Unipco: January 4, 2021 (the day after Mr. Mullin tendered his resignation): Mr.

Mullin and TM: Mullin: Good morning… I resigned from unipco last night TM: Good morning Scott … What happened for you to resign Mullin: Just tired of all the unappreciated work I put in 62 days of overtime 142 hours not even a thank you no bonus this year laid off paid at 78% wage for 7 weeks […] Benefits changed to blue cross […] TM: Did they pay you for your programs Mullin: who unipco? You mean my development tools? the ones I bought? I put a removeable hard drive in my work computer over a year ago and took my tools home.

They have the original one in it that has what unipco owns I have been prepared for a long time for Matt and his antics January 5, 2021: Mr. Mullin and LF (referencing Unipco leadership): Mullin: Did you get your call yet? They will probably wait and read you the riot act LF: No call I’ll just tell them I’m not getting involved They can’t legally stop me from being your friend Mullin: See that’s their mentality They are control freaks They are in for a world of hurt

I’m preparing to point out the bodies right now I know where they are buried and I will expose them LF: Isn’t that called blackmail and illegal?

Or you just want satisfaction of pointing out the things? […] Mullin: anyways … I [am] not coming into the office they have to come meet me in a neutral location where I can discuss the terms of my exit they are not getting off like they think they are […] I will tear unipco apart member by member day by day … as I have a very particular set of skills […] most of the time I am a pretty nice person … but if some (sic) does something against me … I can be pretty evil I may just have to go all Liam Neeson on them January 6, 2021: Mr.

Mullin and TM: Mullin: eric emailed aft 8pm last night […] Wanted me to come at 1;30 with the keys and any company property I may have lol […] They discovered “my” removable drive bay Matt was copied TM: Discovered that it was missing Mullin: So I responded this morning that I was already booked for another appointment, which I am, and I suggested Friday at noon at a neutral location like rossanos the machine is fully functional but it has a hole in the front where a second drive would go in […] I pull their drive out and insert mine then boot up the computer as my drive has my tools on it unipco does not own any development tools just the server for the database […] As a matter of fact, I don’t think anyone even knows where the source code is located

March 19, 2021: Mr. Mullin and LF LF: I also forgot to tell you. There’s a new business started in NS by ex Sysco employees. Waiting for the border to open to invade NB … they tell people they are the new UNIPCO Mullin: are you pulling my leg? If not, I wonder if Melanie knows about this? She was sysco too at one point wasn’t she? mel and I have been chatting the past two days […] LF: I don’t know if she knows but the word is they are coming for unipco members.

Someone gave them our member list, they are trying to figure out what supplier it must be […] Mullin: how organized is this group? is it just an idea? or are they in business with members now? […] Just in ns? this all start since the pandemic? […] LF: for now because they can’t come in yet, but from what I understand once the border opens they are hitting us hard Mullin: can you tell me the name of this group? […] LF: I can’t remember what it’s called lol Mullin: I did some google searches but came back with nothing its not groupex? no that place is old LF: no, they just started this year, brand new, all ex sysco employees running it Mullin: I’m going to ask melanie to see if she has any contacts there if that is the case it is kind of the perfect storm to end unipco March 20, 2021: Mr.

Mullin and LF

Mullin: melanie knows these guys and has heard about them melanie says [BM] the ex VP of sales and marketing and she believes [JR] the retired business development guy LF: Is she going to join them lol […] Mullin: I have a phone call booked with [BM] of Stake Hospitality Group for next week Thursday LF: why? you joining lol Mullin: Lol nope … I think my career in food service is over Its mostly just give some ammo to attack unipco March 25, 2021: Mr. Mullin and LF Mullin: guess what … I have a new job! LF: OMG! BAHAHAHA For real? With Stake?

Mullin: Yes LF: Doing what lol Mullin: […] a new database to kick the shit out of unipco they are here when the border opens May 19, 2021: Mr. Mullin and KD Mullin: I actually quit my job KD: […] Retired? Mullin: no just taking this year off

I wasn’t values (sic) where I was and the hours were just nuts not sure what I am doing next to be honest i have been in contact with the competition for my old job but they are being held up because of the pandemic June 16, 2021: Mr. Mullin and MR Mullin: yeah … I will be working again by the end of July the competition for the old company I was at want my knowledge and they have just been waiting for the borders to open its just a matter of negotiating my terms and conditions of employment April 1, 2022: Mr.

Mullin and KL Mullin: Unipco found out I am working for competition They are livid Legal paperwork yesterday […] They are in trouble KL: How did they find out? Mullin: New group has over 500 members in one year Not sure but I knew it was a matter of time […] KL: Going to court? Mullin: […] I am not stopping so I suppose I see my lawyer on Tuesday […] April 4, 2022: Mr. Mullin and TM Mullin: unipco found out I am working with their competition they are having a shit fit TM: Your (sic) working? Mullin: I got a registered letter on Thursday to Cease and Desist LOL just part time

only a few days a month TM: Who are you working for Mullin: they are worried because the competition signed over 500 members in the first 13 months and they only have like 5 here in New Brunswick haven’t even really got into pei yet its called Stake Hospitality Group from Halifax I am meeting with my lawyer tomorrow to see our actions TM: So does it mean once you work for uninco (sic) you can’t work for anyone else in the same line of work Thar (sic) is crazy Mullin: well I did sign a non-competition agreement that I totally forgot about I knew I signed a non-disclosure but there are so many loop holes if I have to, a buddy of mine is going to start a business he will contract to Stake and subcontract me to work for him so technically ….

I am not working for the competition Mr. Mullin’s evidence [ 29 ] Mr. Mullin states that, notwithstanding what those messages may imply, he did not share any confidential information with Stake Hospitality or anyone else. He denies that he has any Unipco property, software, data or information of any kind in his possession. [ 30 ] He reiterates that all he took with him on that external hard drive was software he himself purchased and which he describes as his tools of the trade.

He denies that any of Unipco’s source codes were stored on that external hard drive or that he ever removed source codes from the Unipco servers. [ 31 ] He states that he was engaged by Stake Hospitality Group to design an entirely new IT system and database, which was not based on what Unipco was using. [ 32 ] As for his counterclaim, Mr. Mullin states that he left Unipco due to various unilateral changes to his employment which, he maintains, amounts to constructive dismissal.

These include: • Being paid only 75% of his regular salary over a 7-week period when he returned after temporary lay-offs due to Covid-19 restrictions; • Being assigned the workload of three employees when he returned to work after that lay-off; • Working overtime for which he was not paid; and • Changes made by Unipco to its group insurance plan which provided less coverage and/or cost more to employees.

[ 33 ] Mr. Mullin states that he stayed on with Unipco for several months after many of those changes because of uncertainty about the job market due to the Covid-19 pandemic. He says it “obliged” him to accept those changes. [ 34 ] He states that he went to work for Stake Hospitality in 2021 again due to the uncertainty created by the pandemic. It is noteworthy, however, that in a Facebook Messenger exchange with KD in May, 2021, Mr. Mullin stated that he had quit his job and was taking the year off. He mentioned that he was in discussions with “the competition” about a job.

KD then states: “If you can afford the time off, take it. You’ll have no difficulty finding work.” Mr. Mullin replied: “yeah that is what was thinking too[.] I need a job where I can remote work as I have a property in Arizona that I would like to spend December to April at.” [ 35 ] He also maintains that he had a reasonable expectation of privacy with respect to his Facebook Messenger app and those communications, notwithstanding that the app was installed on his work computer. Unipco’s evidence related to Mr. Mullin’s Counterclaim [ 36 ] As noted, Unipco maintains that Mr.

Mullin’s Facebook Messenger exchanges “popped up” automatically while they were working on his former workstation in November of 2021, many months after he departed. Both Mr. Bujold and Ms. Simpson deny that they obtained those communications by surreptitious means. Rather, they became concerned about the system’s security when the messages popped up, leading to a deeper investigation. [ 37 ] As for Mr. Mullin’s allegations of constructive dismissal, Ms. Simpson’s evidence is that: • Mr.

Mullin was asked to assist with some importing of data during the Covid-19 shutdown, for which he was promised and given additional vacation time with pay. She says the time was tracked at 24.5 hours, and that Mr. Mullin was credited with 48 hours of paid vacation; • Mr. Mullin never advised her of any unpaid overtime, either during the Covid-19 shutdown or following his return; • Mr. Mullin initially returned at 75% his regular salary during a 7-week period after the initial Covid-19 shutdown. She states that Unipco had secured a federal wage subsidy at 75% of its wages, and that Mr.

Mullin was returned to his full regular salary by June 22, 2020 (a full 6 months before he left); • She denies that Mr. Mullin was ever asked to “triple’ his workload when he returned and reiterates that all overtime was recorded and paid; • With respect to the change in group insurance coverage, Ms.

Simpson states that the new coverage was less expensive than the previous coverage (though she does not confirm for whom), and that it offered greater, not less benefits to the employees; • She also states that employees were “grandfathered in” with respect to any existing prescription medications. [ 38 ] The evidence suggests that the changes to the group health plan were in place for a period of at least 8 to 9 months before Mr. Mullin’s departure from Unipco. [ 39 ] Ms. Simpson also states that the sources codes, which Mr.

Mullin’s maintains were never removed from the Unipco IT system, were never located following Mr. Mullin’s departure. THE MOTIONS FOR

SUMMARY JUDGMENT [ 40 ] As noted, both parties bring a motion for

summary judgment under Rule 22 of the Rules of Court. [ 41 ] Unipco’s motion, orally amended at the hearing, seeks only a declaration that the Defendant is bound by the non-disclosure agreement and an injunction restraining him from disclosing or using any of Unipco’s confidential information. It argues that there is no genuine issue requiring a trial, in that the non-disclosure agreement is unambiguous and enforceable and that, given the evidence, there is good reason to believe that Mr.

Mullin has breached it in the past or will breach it by sharing information with Stake Hospitality Group or another competitor of Unipco’s – either for his own gain or in order to harm Unipco out of spite. [ 42 ] It is noteworthy that Unipco does not seek any remedy by

summary judgment with respect to the counterclaim. That is, Unipco does not seek the dismissal of the counterclaim, either in full or in part.

[ 43 ] Mr. Mullin seeks

summary judgment on his counterclaim, arguing that there is no genuine issue requiring a trial, in that the evidence clearly shows that he was constructively dismissed by Unipco and further that the evidence clearly shows that Unipco accessed his Facebook Messenger communications over which he had a reasonable expectation of privacy, and that damages should follow. [ 44 ] Mr. Mullin does not seek a

summary dismissal of Unipco’s claim. THE LAW

Summary Judgment – Rule 22 [ 45 ] Of course, Rule 22 of our Rules of Court was overhauled following the Supreme Court of Canada’s decision in Hryniak v. Mauldin , 2014 SCC 7 , such that former objective of determining whether there are “triable issues” has now been re-framed to: are there genuine issues requiring a trial? [ 46 ] In Russel et al v. Northumberland Co-operative Limited , 2019 NBCA 70 , Justice LeBlond succinctly explained the approach to motions for

summary judgment and he set out a roadmap for trial judges to follow, creating two-step analysis. He wrote: [21] The Rule therefore provides a two-step process with specific reference to the central question: is there a genuine issue requiring a trial? [22] In step one, the judge must determine if the evidence put before him reveals a genuine issue requiring a trial. At this point, there is no need to resort to the fact-finding powers contained in Rules 22.04(2) and (3). Adjudication under step one may include cross- examination on any affidavit (Rule 39.03).

Any such cross-examination does not trigger the mini trial prescribed by Rule 22.04(3). If, on the filed evidence alone, the judge can fairly and justly adjudicate the dispute, there will be no genuine issue requiring a trial and the judge must grant

summary judgment. There is no discretion under the Rule to refuse to do so (see 22 King Street Inc. et al. v. The Bank of Nova Scotia, 2018 NBCA 16 , [2018] N.B.J. No. 42 (QL) ). The motion judge in this case granted

summary judgment on that basis and therefore did not need to proceed to step two. [23] A judge only proceeds to step two if the assessment of the filed evidence leads to the conclusion that there may be a genuine issue requiring a trial. […] […] [26] The ultimate objective will continue to be justice according to law. Conventional trials will not disappear, but the new mindset requires a shift away from them as the default and as being always the best mechanism in seeking justice, to a mindset guided by an answer to the central question: is there a genuine issue requiring a trial?

That question can only be answered by fully exploiting the opportunities of Rule 22. [27] A by-product of the culture shift will be a reduction in the number of civil trials. Rule 22 motions, with or without mini-trials, will determine if judges have the level of confidence required to do what they have always done in conventional trials, i.e. find facts and apply relevant legal principles to those facts, with the difference that they will be doing so proportionally, fairly and in a much more timely and affordable fashion. The culture shift will benefit litigants and the court process.

The Supreme Court was clear in Hryniak that the

summary judgment motion, as an alternative model of adjudication, is no less legitimate than a conventional trial. [28] The burden of proof to establish there is no genuine issue requiring a trial will always be on a balance of probabilities. That burden will more readily be met with fulsome use of the broad scope of admissible evidence now permitted under Rule 22. The old adage of putting one’s best foot forward and leading trump or risk losing is far more significant under the new version of Rule 22 than it was under its previous iteration.

This was fully canvassed in O’Toole at paras. 70-73. [ 47 ] In the present case, neither party requested to cross-examine the other on their affidavit evidence.

[48] Also, as noted, neither party has sought

summary dismissal of the other’s claim – that is, Unipco does not seek the dismissal ofMr. Mullin’s counterclaim, and Mr. Mullin does not seek the dismissal of Unipco’s claim, only the dismissal of Unipco’s motion. [49] As stated by Justice Drapeau in Abrams v. RTO Asset Management, 2020 NBCA 57 : [49] Admittedly, the wording of Rule 22.04 provides fodder for an argument in favor of “Boomerang”

summary judgments. It states thecourt must grant

summary judgment in certain circumstances, without explicitly requiring a motion. However, that

interpretation cannotprevail on a contextual reading of Rule 22.04, with particular regard for its heading “Disposition of Motion” (emphasis added). [50] Unless compliance with the motion requirement under Rule 22 is dispensed with by an order under Rule 2.01, a “Boomerang”summary judgment is not an adjudicative option. A motion, formal or informal, is a condition precedent to a

summary judgment underRule 22, and an order dispensing with that requirement, which is not a matter of form, will be appropriate only in exceptionalcircumstances, such as those that percolate from the record in Manulife Bank of Canada v. Conlin, (CSC), [1996] 3S.C.R. 415, [1996] S.C.J. No. 101 (QL), or where Rule 22.04(1)(

b) is engaged. That Rule directs the court to grant

summary judgmentwhere the parties agree and it is appropriate to do so. [50] Again, because neither party pleaded for an order dismissing the other party’s claim on

summary judgment, the Court is limitedto either granting the moving party’s

summary judgment or denying it without dismissing it. ANALYSIS Question 1: With respect to the Plaintiff’s claim to injunctive relief as against Mr. Mullin regarding confidential information, is therea genuine issue requiring a trial? [51] Unipco relies on Regional Health Authority A (Vitalité Health Network) v Godin, 2017 NBQB 93 , where JusticeLéger of this Court considered guidance from the British Columbia Court of Appeal in Cambie Surgeries Corp. v. British Columbia(Medical Services Commission), 2010 BCCA 396 .

Justice Leger concluded that in order to obtain a permanent injunction,“The plaintiff must therefore establish its legal rights giving rise to the relief sought. Once these legal rights have been established, thecourt must also be satisfied that this is an appropriate remedy.” [52] In its Brief on Law, Unipco frames the test as requiring the moving party to establish: 1) Its legal rights; 2) That damages are inadequate; and 3) There is no legal impediment to the Court’s discretion to grant an injunction. [53] In his Brief, Mr.

Mullin cites the RJR MacDonald test for the grant of an interlocutory injunction, which this is not. [54] I am satisfied that Unipco has properly set out the test. [55] Turning to the evidence, there is no dispute that Mr. Mullin signed the non-disclosure agreement or that it formed part of hisconditions of employment with Unipco. [56] There is no dispute that, in his role with Unipco, Mr.

Mullin had unfettered access to Unipco’s budget and finance information,its client lists and contact lists, its supplier agreements and rebate programs. [57] There is no dispute that the information referenced in the preceding paragraph is expressly included as “confidential information”in the non-disclosure agreement.

[ 58 ] There is no dispute that the non-disclosure agreement expressly stated that the employee’s obligations would survive the end of his employment. [ 59 ] There is no dispute that the non-disclosure agreement expressly provided that disclosure of Unipco’s confidential information to a competitor would amount to irreparable harm and that injunctive relief would be the only proper remedy for such a breach. [ 60 ] Has there been a breach of the non-disclosure agreement? Mr. Mullin says no.

He denies ever divulging any confidential information or trade secrets to Stake Hospitality or to anyone else. [ 61 ] The Court does not accept Mr. Mullin’s denial. It is completely at odds with Mr. Mullin’s own words, as set out the Facebook Messenger communications. Counsel for Mr. Mullin describes those as harmless “rants,” but one must question why Mr.

Mullin, after declaring that he would “tear Unipco apart member by member, day by day” with his unique set of skills would then seek out representatives of a new competitor to Unipco to “give some ammo to attack Unipco.” [ 62 ] When confronted with his non-compete agreement, his plan was to avoid his legal obligations by having a friend incorporate a company that he could work for, rather than directly competing with Unipco. [ 63 ] Mr. Mullin acted with malice and in direct contravention of his legal obligations.

He did not initially have discussions with Stake Hospitality about a job – it was clearly to share information Mr. Mullin knew, or hoped, would harm Unipco. I am satisfied on the balance of probabilities that Mr. Mullin shared confidential information with Stake Hospitality. [ 64 ] So, has Unipco established its legal rights vis-à-vis the protection of its proprietary trade secrets? Yes, in my view, it has. [ 65 ] Are damages inadequate? The parties expressly agreed that damages are an inadequate remedy and that Unipco would be entitled to an injunction in the event of any breach by the employee.

As well, the evidence satisfies me that damages would indeed be an inadequate remedy in this case, where the impact of any unlawful disclosure of confidential information would be difficult to assess. [ 66 ] Finally, is there an impediment to the Court’s discretion to grant an injunction? The Court is not aware of any such impediment and nor has the Defendant raised any. [ 67 ] Accordingly, with respect to Unipco’s claim for a permanent injunction to prevent Mr. Mullin from disclosing any confidential information, I am of the view that there is no genuine issue requiring a trial. Unipco’s motion for

summary judgment is therefore granted. Question 2: With respect to Mr. Mullin’s motion for

summary judgment on his counterclaim for constructive dismissal and damages in lieu of reasonable notice, is there a genuine issue requiring a trial? [ 68 ] As noted, Mr.

Mullin claims that he was constructively dismissed for the following reasons: • Being paid only 75% of his regular salary over a 7-week period when he returned after temporary lay-offs due to Covid-19 restrictions; • Being assigned the workload of three employees when he returned to work after that lay-off; • Working overtime for which he was not paid; and • Changes made by Unipco to its group insurance plan which provided less coverage and/or cost more to employees. [ 69 ] I am satisfied that laying off a salaried employee and then having them return at a reduced salary will amount to a constructive dismissal – unless the changes are accepted by the employee.

[70] Unipco does not dispute that it paid Mr. Mullin only 75% of his salary over 7 weeks, or that it made changes to its group healthplan. But it says those changes occurred many months before Mr. Mullin submitted his resignation in January 2021 – in the case of thetemporary reduction in salary, some 6 to 7 months earlier, and in the case of the group health plan, some 8 to 9 months earlier. AndUnipco says Mr. Mullin expressly or impliedly accepted those changes. [71] Mr. Mullin cites Drapeau v.

Spielo Manufacturing Incorporated, 2007 NBQB 113 for the principle that, once theemployer unilaterally changes or breaches an essential term of the employment contract – such as paying an agreed-upon salary – theemployee is entitled to a grace period during which he or she may consider the changes. The facts of that case are set out in thefollowing paragraphs: 3. In late October and early November 2001 Mr. Drapeau’s authority to sign documents on behalf of the defendant was taken from himand he was told by his supervisor not to attend a planning meeting.

His status and authority regarding other employees was alsoreduced. Thus Mr. Drapeau says that he was constructively dismissed by those reductions of his role and his authority and was forced toresign on November 9, 2001. 4. Spielo says that Mr. Drapeau voluntarily resigned. […] [72] Of course, the timeframe in Drapeau is starkly different than in the present case. Whereas Mr. Drapeau continued to work for afew weeks before leaving Spielo, Mr. Mullin worked for well over 7 months from the time his salary was reduced and even longerfollowing the changes to the group health plan. [73] Further, when Mr.

Mullin left Unipco he stated that he was resigning, not that he felt that he had been constructively dismissed.While that it not determinative, it is certainly evidence that is inconsistent with Mr. Mullin’s claims. [74] Also, while he claims that he was tasked with extra work and did overtime work which was unpaid, there is contradictoryevidence in that regard as well. For example, when he conducted his exit interview a few days after his resignation, the undisputedevidence before the Court is that he told Mr. Sloan and Mr.

Doiron that he was not claiming any unpaid overtime and that he was leavingbecause he felt overworked, mostly because of his outside work as an IT consultant. [75] In my view, these inconsistencies in the evidence combined with the lengthy period of time Mr. Mullin continued to work afterthe alleged unilateral changes were introduced raises serious questions as to the veracity of his claim of constructive dismissal. [76] In my view, there are genuine issues requiring a trial on that issue, and so the Defendant’s motion for

summary judgment on hiscounterclaim for damages in lieu of notice is dismissed. Question #3: With respect to the Defendant’s Counterclaim for breach of privacy, is there a genuine issue requiring a trial? [77] The Defendant alleges that Unipco breached his right to privacy based upon the legal doctrine of “intrusion upon seclusion.” [78] Mr. Mullin argues that Unipco accessed his private Facebook Messenger communications in a manner that violated hisreasonable expectation that such communications would be private. He cites the Ontario Court of Appeal’s decision in Jones v.

Tsige,2012 ONCA 32 as authority for that principle. “The key features of the cause of action of intrusion upon seclusion are, first, that the defendant's conduct must be intentional (whichincludes recklessness); second, that the defendant must have invaded, without lawful justification, the plaintiff's private affairs orconcerns; and third, that a reasonable person would regard the invasion as highly offensive, causing distress, humiliation or anguish.Proof of harm to a recognized economic interest is not an element of the cause of action.” [79] The Defendant acknowledges that this still relatively novel tort has not been formally recognized by our Courts in NewBrunswick.

But that, in and of itself, is not determinative. There will always be a first case, as tort law is an ever-evolving part of thecommon law.

[ 80 ] That said, the issue is whether Mr. Mullin’s evidence establishes that he is entitled to recover under this novel tort and that there is, thus, no genuine issue requiring a trial. [ 81 ] Was Unipco’s conduct intentional and/or reckless? [ 82 ] Here, the evidence establishes that the Facebook Messenger app “popped up” spontaneously on Mr. Mullin’s work computer in November 2021, months after he left the company. The evidence is that it had never done that before, even though the computer had been accessed many times. This caused concern in the minds of Ms. Simpson and Mr.

Bujold, who were worried that it was a security breach, and that concern prompted their examination of the communications more closely. Recall that the information was stored on, or at least was accessed via a Unipco-owned computer. [ 83 ] Was that intentional or reckless? I am not convinced.

The present situation is far from the factual scenario in Jones , where the Defendant deliberately and secretly accessed the Plaintiff’s bank records. [ 84 ] Was it without lawful justification? [ 85 ] Again, it is not clear to me that Unipco, learning of various communications between former employees which popped up on one of its computers months after the employees had left the company, was not justified in fully investigating those communications as potential security breaches.

Again, the facts are entirely different from Jones . [ 86 ] Was this an invasion of privacy which a reasonable person would regard as highly offensive? [ 87 ] Is it reasonable to conclude that Mr. Mullin, an experienced IT professional, had an expectation of privacy with respect to applications he downloaded onto his work computer? That is a legitimate question, in my view.

This is especially so given that on December 29, 2000 – just a few days before his resignation, which he had been planning for some time – LF specifically advised him by Facebook Messenger to “make sure you log off your Facebook account on your work computer so they don’t go reading your Facebook lol!” [ 88 ] Mr. Mullin gave Unipco the password to his work computer and he failed to log off from the application or remove it from his work computer. So, did he genuinely have an expectation of privacy? And if so, was it reasonable in the circumstances? [ 89 ] In my view, the evidence simply does not establish Mr.

Mullin’s entitlement to

summary judgment on this novel tort, and so I must conclude that there is a genuine issue requiring a trial. DISPOSITION [ 90 ] Unipco’s request for

summary judgment in regard to its claim for a permanent injunction restraining Mr. Mullin from disclosing any confidential, proprietary information to Stake Hospitality or to anyone else is granted. [ 91 ] Because I am satisfied that Mr. Mullin acted with malice and knowingly sought to harm Unipco by sharing such information with its competitor, I award Unipco costs of $7,500.00 inclusive of HST and disbursements on its motion. [ 92 ] Mr. Mullin’s motion for

summary judgment, both in respect of his claim for constructive dismissal and for the alleged breach of his privacy rights, is dismissed. Unipco shall be entitled to costs on that motion in the sum of $2,500.00 inclusive of HST and disbursements.

DATED at Moncton, New Brunswick this 22 nd day of November 2023. _____________________________________ Robert M. Dysart, Judge of the Court of King’s Bench of New Brunswick