No. 1]
CASE AND COMMENT
GUARANTEED PURE MILK CO. LIMITED v. PATRY
INJUNCTION –
BREACH OF CONTRACTUAL OBLIGATION –
AGREEMENT NOT TO
SELL DAIRY PRODUCTS IN A SPECIFIED TERRITORY FOR A PERIOD OF TWELVE
MONTHS AFTER TERMINATION OF EMPLOYMENT –
PERFORMANCE –
DAMAGES – C.C.P. 957
SPECIFIC
Prohibitive clauses are frequently inserted in employment contracts by the
employer as one of the terms of the engagement. Employers have long sought
to establish what recourses shall lie as a result of a breach of this prohibitive
clause; the answers given to this question by our courts have by no means been
uniform or consistent. Will an injunction lie to restrain the breach or will the
employer’s sole recourse be an action for damages? This problem is illustrated
in the recent judgement of the Court of Queen’s Bench in Guaranteed Pure
Milk Co. Limited v. Patry.’
The facts of the case can be outlined briefly: the respondent was hired as a
milk route salesman with a prohibitive clause included in his contract of engage-
ment:
“L’employ6 consent en plus, pendant le terme de cet engagement ou pour douze
mois apr~s, a ne pas aider qui que ce soit A faire connaissance avec les clients de la
compagnie, ne pas divulguer les noms et adresses des clients de la compagnie, ou
travailler comme laitier ou vendeur A son propre compte, ou pour toute autre per-
sonne, firme, ou corporation faisant un commerce semblable A la compagnie dans
le territoire exploit6 par lui durant sa priode d’emploie avec la compagnie.”
The respondent left the petitioner’s employ and proceeded to deal in dairy
products in the territory allotted to him in his contract, whereupon the peti-
tioned asked for an injunction to restrain the respondent from the breach of
the contract. The sole issue in the case was whether an injunction would lie
or were damages the recourse in this situation. The court held that “an in-
junction will lie only if it is shown that the loss or injury complained of
cannot be made good by pecuniary condemnation,” and further, the breach of
the contract could only result in an action for damages. Consequently the
injunction was denied.
The writer respectfully submits that it is not unknown to our jurisprudence
for an injunction to be allowed in these circumstances, and further, that it is
the more appropriate remedy to restrain the breach. In 1899, an injunction
was granted as the suit of a purchaser of a business to restrain the vendor
from violating a stipulation in the agreement not to enter the same business
again at anytime or help anyone to do so.2 Again, in 1907 a similar injunction
was granted, despite a condition in the prohibitive clause “that the sum of
L[1957] Q.B. 54.
2Cook v. Brisebois (1899), 2 P.R. 162.
McGILL LAW JOURNAL
[Vol. 4
$50.00 shall be paid as liquidated damages for each contravention”., Clearly,
the petitioner was not limited to an action in damages, even where the quantum
was clearly ascertainable by the terms of the contract itself. This decision was
followed in Aird v. Birse” where a bread-route salesman violated a similar
prohibitive clause in his employment contract. The court, in an obiter dictum,
remarked that it “could conceive such cases where an injunction could be
granted.” The same opinion was upheld and reinforced by Mr. Justice Sur-
veyer in Montreal Dairy Co. v. Gagnon:5
“Les tribunaux ont le devoir de faire respecter les conventions, et que le respect
de la parole donnge diminuerait si les tribunaux rgduisaient le recours de la partie
lisge i une simple riclamation en dommages”.
This line of jurisprudence granting an injunction to restrain the breach of a
prohibitive clause was followed in Mount Royal Dairies v. Russnman,6 a case
similar in fact to the case presently under examination. The respondent was
also hired as a milk route salesman and in his contract of engagement he
agreed to the following terms:
“Employee expressly binds himself that he will not secure employment either
as salesman agent or otherwise with any person, form, or company, carrying on a
trade similar in whole or in part and will not during said delay assist in introducing
others to any of the customers of the company.” 7
The court granted an injunction to restrain a breach of this clause reasoning
that the petitioner
“is suffering irreparable
loss and injury because the customers who are being
taken away by the respondent and transferred to his new employers, will, in the
opinion of the Court, be lost to the petitioner company forever.”8
Should not the same reasoning apply to the Patry Case? No doubt, this
decision coupled with a similar recent decision in Wolkman v. Roncarello
will influence the decisions to be reached in litigations of a similar nature
arising in the future. It is the writer’s opinion that an injunction should lie in
these circumstances: firstly, to avoid the apparent difficulty which will be
encountered in assessing the quantum of damages suffered by the petitioner,
if these damages can be properly assessed at all; and secondly, to assure that
no breach of the covenant will occur throughout the whole period of the pro-
hibition as determined by the contract entered into. “Where a person plainly
3Davis v. Nadel (1907), 8 P.R. 422.
4(1913), 14 P.R- 285.
5(1938), 38 R.L.n.s. 272 at 280.
6(1934), 72 S.C. 241.
7The terms of the prohibitive clause are observed to be nearly identical to those of
the Parry case.
SThe same line of thinking was applied in Selnekovic v. Matursky (1936), 39 P.R.
260 and Nebesny v. Demitroff, [1944] S.C. 413: “The court considers that in view
of respondent’s disregard of his obligation not to carry on the business of a pool room,
the petitioner is justified in asking for an interlocutory injunction.”
9[1955] P.R. 88.
No. 1]
CASE AND COMMENT
violates his contract, an injunction should issue almost as a matter of course.” 10
Mr. Justice Forest reaffirms this view and considers the injunction as the
only alternative for the court under these circumstances:
“En droit, lorsqu’une partie s’engage sciemment par 6crit i ne pas faire une
chose precise et d~termine et qu’elle ne respecte pas cet engagement,, alors que
r’autre contractant expose ses griefs aux tribunaux, la seule alternative pour la
cour est de lui accorder un bref d’injonction, afin d’empcher que cet acte se
continue.”’11
An injunction does not seek to restrain or interfere with the personal liberty
of a respondent; he is merely told that he must respect his contract, and if
he does, no harm comes to him. If he does not he acts at his peril: he violates
his contract and must take the consequences.12 In the interests of clarity and
certainty, it is respectfully submitted that our courts should reaffirm this
principle. As a consequence, an employee will be certain that he cannot commit
a breach of a prohibitive clause to which he has agreed simply by paying
damages, and the employer will be assured of his remedy in the event of
such a breach.
SYDNEY B. SEDEROFF*
1OTrenholme, J. Dissenting opinion in La Socifti Anonyme v. Lombard, (1906),
15 K.B. 267 at page 277.
“Selnekovic v. Matursky. Supra Footnote 8.
12Mr. Justice Martin. Dissenting opinion
in the celebrated case of Lombard v.
Varennes et Theatre National (1922), 32 KB. 164 to 170.
*Of the Board of Editors.
