2016 QCCA 1639, 2016 QCCA 1639

PCM Sales Canada Inc. c. Francisco 2016 QCCA 1639 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-026366-161 (500-17-095495-167) MINUTES OF THE HEARING DATE: October 7, 2016 THE HONOURABLE rOBERT M. MAINVILLE, J.A. PETITIONER COUNSEL PCM SALES CANADA INC. Mtre GARY STEVEN ROSEN Mtre LAWRENCE WITT (De Grandpré Chait s.e.n.c.r.l.) RESPONDENTS COUNSEL CHRISTOPHER FRANCISCO INFOGESTION OSN INC.

DBA OSN DIRECT CANADA Mtre LUDOVIC TREMBLAY (Consilium Services juridiques) DESCRIPTION: Application for leave to appeal from a judgment rendered in the course of proceedings on September 14, 2016 by the Honourable Michel Déziel of the Superior Court, District of Montreal. (Articles 31 and 357 C.C.

P) Clerk: Mihary Andrianaivo Courtroom: RC-18

HEARING 9:30 Continuation of the hearing of October 6, 2016. The parties were excused from appearing in Court this morning. BY THE JUDGE: Judgment – See page 3. End of the hearing. Mihary Andrianaivo Clerk BY THE JUDGE JUDGMENT [ 1 ] PMC Sales Canada inc. (“PMC”) is seeking leave to appeal pursuant to articles 31 and 357 of the Code of Civil Procedure (“ C.C.P. ”) with respect to a judgment rendered on September 14 th , 2016 by the Superior Court, District of Montreal (the Honourable Michel Déziel) dismissing its Application for the Issuance of a Provisional Interlocutory Order of Injunction . [ 2 ] PMC also seeks a provisional safeguard order pursuant to

article 379 C.C.P. for a period of 10 days on terms identical to those set out in the provisional interlocutory injunction sought before the Superior Court. [ 3 ] PMC is a supplier and re-seller of technology products and solutions for consumers, businesses, government and educational institutions which markets through direct telephone communications and though various internet portals. It focuses exclusively in sales to customers located in the USA, notably through sales representatives working out of its Montreal call center and referred to as Account Executives. [ 4 ] Mr.

Christopher Francisco was a Senior Account Executive II at the Montreal call center, and he was first hired with PMC in 2004. He is bound by a non-competition agreement by which he agreed “that he shall not … for a period of 12 months from the date on which [he] ceases his relationship with [PMC], either alone or … as employee … carry on or be engaged in or concerned with or interested in, … any person, firm or corporation engaged in or interested in any business activity which is competitive to [PMC’s] business activities … in the Territory described in …

Schedule A.” The

Schedule A signed by Mr. Francisco identifies the states of New Jersey, Maryland and Delaware. [ 5 ] Mr. Francisco left the employ of PMC on September 5, 2016 to work for the respondent Infogestion OSN inc. dba OSN Direct Canada (“OSN”). [ 6 ] On September 12, 2016, PMC filed proceedings in the Superior Court seeking to enforce the non-competition agreement through permanent, interlocutory and provisional injunctive relief. [ 7 ] The provisional interlocutory injunction was refused on September 14, 2016 and written reasons were released on September 20, 2016.

The motions judge found that PMC had not established serious and irreparable harm justifying the provisional injunction. He also expressed doubts as to the legal validity of the non-competition agreement and found that the balance of convenience favored Mr. Francisco’s right to work for a living. [ 8 ] A provisional interlocutory injunction may be appealed under

section 31 C.C.P. with leave of a judge of this Court if it determines part of the dispute or causes irremediable prejudice to a party. [ 9 ] Taking into account the limited duration of a provisional interlocutory injunction and its somewhat discretionary nature, leave to appeal from such a judgment is rarely granted: Kurkura v. Pivotal Payments Corporation , 2016 QCCA 1391 , par. 8 ; Éditions Genex inc. v. RNC Media inc. , 2014 QCCA 1628 , par. 2 ; Grand Council of the Crees (Eeyou Itchee) v.

Québec (Procureur général) , 2008 QCCA 2282 , par. 2 ; Syndicat des travailleuses et travailleurs de la Scierie Valcourt-CSN v. Scierie Valcourt inc. , 2008 QCCA 1243 , par. 3 ; Transcontinental inc. v. Publications TVA inc. , 2005 QCCA 786 , par. 8 ; Sobeys Québec inc. c. Casot ltée , 2005 QCCA 678 , par. 5-6 . [ 10 ] In this case, PMC submits that the judge committed the following errors of law:

a. First, the judge ignored the teachings of this Court’s in UBI Soft Divertissements inc. v. Champagne-Pelland, (QC CA), J.E. 2003-1981, par. 18 providing that, save egregious circumstances, a non-competition agreement should be deemedprima facie valid at the provisional interlocutory injunction stage or at the safeguard stage of the proceedings. b. Second, the criteria used by the judge to assess the balance of convenience - the employee’s right to work to earn a living – iscontrary to

article 2089 of the Civil Code of Quebec and would negate in all circumstances any injunctive relief to enforce a non-competition agreement. c. Finally, the judge erred by not finding that potential harm through loss of clients is sufficient to establish irremediable harm atthe provisional injunction stage where the enforcement of a non-competition agreement is at issue. [11] PMC adds that the irremediable prejudice it will suffer under the meaning of

article 31 C.C.P. flows from the inherent andsystemic delays to proceed to the interlocutory injunction phase and to the merits of the case in the Superior Court.

Since the non-competition agreement provides for a 12 months term, PMC fears that it will be unable to obtain – or at least it will be seriously hinderedin obtaining – a timely judicial enforcement of that agreement, thus rendering moot the injunctive relief sought. [12] The able submissions of counsel for PMC are interesting, and I could have been inclined to grant leave in this case where it notfor the evidentiary difficulties with respect to the application of the non-competition agreement. [13] The evidence in the record before me is that OSN carries out activities in the USA.

However, that is a vast and heavily populatedcountry. In the absence of any evidence as to activities in New Jersey, Maryland and Delaware – the geographical areas contemplated bythe signed non-competition agreement – it cannot be concluded, at this juncture of the proceedings, that Mr. Francisco is in violation ofthis agreement. Consequently, if I grant leave, the panel hearing the appeal would face the same evidentiary hurdle and would be boundto dismiss the appeal. [14] I recognize that PMC is facing a particularly difficult task, since neither Mr.

Francisco nor OSN are willing, at this stage, toprovide information as to the exact geographical scope of their activities.

However, this is a matter better dealt with in the SuperiorCourt, which is now endowed with new case management powers to resolve litigation through “appropriate, efficient and fair-mindedprocesses […] designed to ensure the accessibility, quality and promptness of civil justice […]” (Preliminary provision of C.C.P.) as wellas powers to impose sanctions for abuse of procedure. [15] Since leave to appeal will be denied, I need not deal with the provisional safeguard order requested pursuant to

article 379 C.C.P. FOR THESE REASONS, THE UNDERSIGNED: [16] DISMISSES the application for leave to appeal, with legal costs. ROBERT M. MAINVILLE, J.A.