



COURT OF APPEAL FOR ONTARIO

CITATION:

Downey v. Ecore
    International Inc., 2012 ONCA 480

DATE: 20120706

DOCKET: C54648

Feldman, Simmons and Cronk JJ.A.

BETWEEN

Paul Downey

Plaintiff (Respondent/Cross-Appellant)

and

Ecore International Inc.

Defendant (Appellant/Respondent
    to Cross-Appeal)

L. David Roebuck and Mark Hines, for the
    appellant/respondent to cross-appeal

Timothy M. Lowman and Patrick J. Cotter, for the
    respondent/cross-appellant

Heard: April 12, 2012

On appeal and cross-appeal from the order of Justice John
    S. Fregeau of the Superior Court of Justice, dated November 8, 2011, with
    reasons reported at 2011 ONSC 6617.

Cronk
    J.A.:

I.        Overview

[1]

Ecore International Inc. (Ecore) appeals from the dismissal of its
    motion for an order staying or dismissing an Ontario action commenced against
    it by the respondent, Paul Downey (Downey). Ecore requested that the action
    be dismissed for want of jurisdiction of the Ontario Superior Court of Justice
    based on a forum selection clause (FSC) in favour of the Pennsylvania courts,
    as found in a written confidentiality agreement between the parties
    (Confidentiality Agreement).

[2]

The narrow issue on appeal is whether the motion judge erred by
    concluding that the Confidentiality Agreement fails to bind Downey for lack of
    consideration. Should Ecore succeed on its appeal, Downey cross-appeals,
    contending that the Confidentiality Agreement is unenforceable because it
    applied only during or after his employment with Ecore.  As Downey was never
    an employee of Ecore, he argues that a necessary precondition to the operation
    of the Confidentiality Agreement was not satisfied.

[3]

For the reasons that follow, I would allow the appeal and dismiss the
    cross-appeal.

II.       Facts

[4]

Ecore, formerly known as Dodge-Regupol Inc. (DRI),
[1]
is a Pennsylvania-based manufacturer of recycled rubber and a wide array of
    rubber-related products.  Downey is a professional engineer licensed and
    resident in Ontario.

(1)

Genesis of the
    Contracts

[5]

In the 1990s, Downey was employed by one of Ecores competitors in
    Toronto.  By 1999, he was seeking a new position in a senior business
    development or sales and marketing position, with the hope of a later
    transition to general management.

[6]

In August and September 1999, Downey had discussions with the President
    of Ecore, Art Dodge, regarding a potential role for him with Ecore.  On
    September 9, 1999, Dodge wrote to Downey, enclosing an employment proposal
    and offering him employment with Ecore in the position of Business Development
    Manager  Industrial Products.  The letter indicates that Dodge anticipated
    Downey relocating to Pennsylvania in early 2001 or sooner.  The letter states:
    given your history and industry knowledge, coincident with your joining the
    company and as a condition of your employment, we will require you to sign an
    Employee Confidentiality Agreement.

[7]

Downey responded to Dodge on September 10, 1999 with a
    counter-proposal.  He suggested various changes to the compensation
    arrangements outlined by Dodge and proposed that the parties operate, albeit
    temporarily for the next 12  18 months as a business-to-business relationship
    rather than an employer-employee one.  Downey described this arrangement as
    necessary given Canadian tax law.  He included a draft consulting agreement
    prepared by his lawyer, which contemplated that Downeys services would be
    provided to Ecore through his company, CSR Industries Inc. (CSR). The draft
    agreement provided that CSR would execute a copy of Ecores standard
    confidentiality agreement.

[8]

Dodge replied to Downey on the same day with a modified proposal that
    accepted some, but not all, of Downeys suggested compensation arrangements,
    and that accepted all other terms and conditions in Downeys counter-proposal.

(2)

Consulting Agreement

[9]

CSR and Ecore executed a consulting agreement on September 14, 1999
    (Consulting Agreement). The agreement is between Ecore as the Client and
    CSR as the Consultant. Downey is not a named party to the Consulting
    Agreement. However, as will be discussed below, he is described in the terms of
    the agreement as a Key Person of the Consultant.

[10]

The
    Consulting Agreement provides that CSR will provide defined Services, including
    acting as Ecores Manager Business Development  Industrial Products and
    sitting as a member of Ecores management team.  Additional services to be
    provided by CSR include the investigation and development of new business
    opportunities within industrial market segments.

[11]

Section
    3 requires Ecore to pay CSR an annual fee of $132,000 CDN, payable in weekly
    amounts, for the Services provided under the Agreement, as well as various
    bonuses in 2000. After 2000, CSR would be considered for participation in all
    company-wide bonus distributions.

[12]

Section
    5 of the Consulting Agreement describes the relationship between Ecore and CSR
    as follows:

The Consultants relationship with the Client as created by
    this Agreement is that of an independent contractor for the purposes of the
Income
    Tax Act
(Canada) and any similar provincial taxing legislation. It is
    intended that the Consultant shall have general control and direction over the
    manner in which its services are to be provided to the Client under this
    Agreement. Nothing contained in this Agreement shall be regarded or construed
    as creating any relationship (whether by    way of employer/employee, agency,
    joint venture, association or partnership) between the parties other than as an
    independent contractor as set forth herein.

[13]

Section
    7 recognizes Downeys role as CSRs Key Person:

7.    Key
    Person

(a)   The
    parties acknowledge that Paul Downey is a Key Person of the Consultant and is
    integral to the successful performance of the Services by the Consultant under
    this Agreement. It is acknowledged by the Consultant that Paul Downey will
    perform all services of the Services, unless the Client otherwise consents in
    writing.

[14]

Section
    8 requires CSR to execute a confidentiality agreement:

8.    Confidential
    Information

The
    Consultant will execute a copy of the Clients standard confidentiality
    agreement, and said confidentiality agreement, upon execution, will form part
    of this agreement.

(3)

Confidentiality
    Agreement

[15]

On
    Downeys first day of work with Ecore on October 4, 1999, Ecore asked him to
    sign its standard form confidentiality agreement, backdated to October 1,
    1999.  Downey executed the agreement in his personal capacity on or about
    October 4, 1999.

[16]

The
    Confidentiality Agreement is between Ecore, which is referred to as Company,
    and Downey, who is referred to as Employee. CSR is not a named party to the
    agreement and is not referenced in the document.

[17]

The
    preambles to the Confidentiality Agreement include this clause :

BACKGROUND: Company is prepared to engage Employee for
    employment with Company. Employee will be granted access to confidential and
    proprietary information of the Company as part of his employment.  Employee is
    entering into this Agreement to grant to the Company protections regarding the
    Companys proprietary information. The parties of [sic] this Agreement agree
    and intend to be legally bound by the covenants as set forth in this Agreement.

[18]

Section
    1 of the Confidentiality Agreement defines Proprietary Information, while s.
    2 obliges Downey to accept and hold all Proprietary Information as secret and
    confidential and not to use it for his own benefit, but only for the benefit of
    Ecore.

[19]

Section
    3 of the Confidentiality Agreement contains the FSC at issue in this
    proceeding.  The pertinent part of the FSC states:

Employee hereby consents to the exclusive jurisdiction in the
    courts of the Commonwealth of Pennsylvania and of the United States situate in
    the Commonwealth of Pennsylvania, in connection with any action or suit to
    enforce this Agreement, that relates to this Agreement, that arises out of or
    in any way relates to the Companys business relations with Employee.

[20]

Section
    4 of the Confidentiality Agreement provides that [a]ll inventions or
    discoveries which relate to [Ecores] Proprietary Information shall be the
    exclusive property of the Company.  This section obliges Downey to execute any
    instruments that Ecore deems necessary to confirm its exclusive rights to any
    invention or discovery under applicable intellectual property law.

[21]

Section
    5 of the Confidentiality Agreement states:

This Agreement shall not constitute an employment agreement
    between Company and Employee, and, in the absence of written agreement to the
    contrary, Employee shall, at all times, be considered an employee at will. This
    Agreement shall apply during and after the Employees employment with Employer.

(4)

Assignment Agreement

[22]

Sometime
    in 2000, Downey invented a new form of impact sound insulation for use in the
    construction of flooring systems.  He disclosed the inventions to Ecore in
    2000. Downey believed that his inventions could lead to a new Ecore product
    line.

[23]

In
    a written agreement, dated October 10, 2001, Downey assigned all his rights,
    title and interest in the inventions to Ecore (Assignment Agreement).  Downey
    acknowledged in the Assignment Agreement that he received valuable
    consideration from Ecore.

(5)

Subsequent Events

[24]

In
    2008, Ecore asked Downey to sign an Amended and Restated Confidentiality
    Agreement that sought to create joint and several obligations on the part of
    Downey and CSR.   Downey declined to do so.

[25]

In
    February 2011, Downey commenced an action in Ontario against Ecore, alleging
    that it failed to honour an oral promise to reasonably compensate him for his
    assignment of the insulation inventions.  Downey alleges in his claim that the
    inventions were made by him alone using public source materials information and
    without the use of any Proprietary Information of Ecore.  Downey seeks damages
    or, in the alternative, rescission of his assignment of the inventions and an
    accounting of profits by Ecore.

[26]

In
    response to this action, Ecore terminated the Consulting Agreement effective
    July 2011.  Ecore also moved under Rule 21 of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, to stay or dismiss Downeys action on the ground that
    the Pennsylvania courts have exclusive jurisdiction over it pursuant to the FSC
    in the Confidentiality Agreement.

III.      Motion Judges Decision

[27]

The
    motion judge reviewed the circumstances leading to the execution of the
    Consulting and Confidentiality Agreements and the terms of both contracts.  He
    found that, at Downeys request, the Consulting Agreement was between CSR and
    Ecore, rather than Ecore and Downey, because this structure was advantageous
    to [Downey] from a Canadian tax perspective and was for his advantage (at
    para. 30). He also found that while it was contemplated that Downeys position
    or status might change to that of an employee of Ecore, this never happened.

[28]

As
    for the Confidentiality Agreement, the motion judge found that while CSR was
    obliged under the Consulting Agreement to execute the agreement, it did not do
    so. Instead, as requested by Ecore, Downey signed the Confidentiality Agreement
    in his personal capacity. The motion judge correctly held that Downey was bound
    by the FSC in the Confidentiality Agreement only if that agreement was a valid
    contract to which Downey was personally bound.  He concluded, at para. 34, that
    the Confidentiality Agreement fails for lack of consideration. The motion
    judge found that it is CSR, not Downey, who is the party to the Consulting
    Agreement. The confidential information is provided to CSR, and the
    compensation, pursuant to the terms of the agreement, was to flow to CSR.

[29]

The
    motion judge summarized his conclusion this way, at para. 37:

Downey never received consideration for executing the
    Confidentiality Agreement and is not personally bound by its terms, including
    the FSC contained therein. The jurisdiction of this court to hear Downeys
    action against Ecore is therefore not ousted by the FSC contained in the
    Confidentiality Agreement dated October 1, 1999.

[30]

Although
    this conclusion was dispositive of Ecores motion, the motion judge went on to
    consider the other issues raised by the parties concerning the enforceability
    of the Confidentiality Agreement against Downey.  He held that: (1) the subject
    matter of Downeys action against Ecore falls within the scope of the FSC in
    the Confidentiality Agreement since the action arises out of and relates to
    Ecores business relations with Downey (at paras. 38-41); and (2) Downey failed
    to show sufficient strong cause to avoid the enforcement of the FSC in the Confidentiality
    Agreement (at paras. 42-45). Downey did not challenge these additional findings
    before this court.

[31]

The
    motion judges reasons for dismissing Ecores motion are summarized in this
    succinct passage from his reasons, at para. 46:

The FSC in the Confidentiality Agreement should be enforced,
    and the stay of proceedings would be granted, but for the finding that the
    Confidentiality Agreement fails to bind Downey personally for lack of
    consideration.

IV.     Issues

[32]

There
    is one issue on the appeal: did the motion judge err by concluding that the
    Confidentiality Agreement, including the FSC, is unenforceable against Downey
    for lack of consideration?

[33]

If
    the motion judge so erred, the only issue on the cross-appeal is whether the
    Confidentiality Agreement is unenforceable against Downey on the alternative
    basis that a necessary precondition to its operation  Downeys employment with
    Ecore  was never satisfied.

V.      Analysis

(1)

The Appeal

[34]

Ecores
    basic position is that the motion judge erred by concluding that the
    Confidentiality Agreement is unenforceable against Downey by reason of a
    failure of consideration.

[35]

Ecore
    submits that s. 8 of the Consulting Agreement evidences the parties intentions
    that Ecore was to receive a confidentiality covenant that bound Downey
    personally as the Key Person. In addition, Ecore argues that the consideration
    for signing the Confidentiality Agreement was provided by the monies and
    benefits that flowed through CSR to Downey.  Ecore also submits that consideration
    is found in the expressed premise of the Confidentiality Agreement that Downey would
    be granted access to Ecores confidential information and that he was entering
    into the agreement to grant Ecore protection in respect of that information.

[36]

For
    the reasons that follow, I agree with Ecore that the motion judge erred by
    holding that the Confidentiality Agreement fails and is unenforceable against
    Downey due to a lack of consideration.

(i)

Principles of Contractual Interpretation

[37]

I
    begin with the well-established principles of contractual interpretation.  As
    the courts have repeatedly affirmed, the aim of contractual interpretation is
    to determine the intentions of the parties in accordance with the language used
    in the written document, having regard to the context in which the contract was
    signed: see
Dumbrell v. Regional Group of Companies
(2007), 85 O.R.
    (3d) 616 (C.A.), at paras. 47-56;
Salah v. Timothys Coffees of the World
    Inc.
, 2010 ONCA 673, 268 O.A.C. 673, at para. 16; and
SeaWorld Parks
    & Entertainment LLC v. Marineland of Canada Inc.
, 2011 ONCA 616, 282
    O.A.C. 339, at para. 16.

[38]

The
    contours of the exact bargain between the parties may sometimes require
    consideration of more than one contract. Nonetheless, the same principles of
    contractual interpretation apply.  In
Salah
, at para. 16, Winkler
    C.J.O. provided this instructive overview of the applicable principles:

When interpreting
    a contract, the court aims to determine the intentions of the parties in
    accordance with the language used in the written document and presumes that the
    parties have intended what they have said.  The court construes the contract as
    a whole, in a manner that gives meaning to all of its terms, and avoids an
    interpretation that would render one or more of its terms ineffective.  In
    interpreting the contract, the court must have regard to the objective evidence
    of the factual matrix or context underlying the negotiation of the contract,
    but not the subjective evidence of the intention of the parties.  The court
    should interpret the contract so as to accord with sound commercial principles
    and good business sense, and avoid commercial absurdity.  If the court finds
    that the contract is ambiguous, it may then resort to extrinsic evidence to clear
    up the ambiguity.
Where a transaction involves the execution of several
    documents that form parts of a larger composite whole  like a complex
    commercial transaction  and each agreement is entered into on the faith of the
    others being executed, then assistance in the interpretation of one agreement
    may be drawn from the related agreements.
[Citations omitted; Emphasis added.]

(ii)

The Wording of the
    Agreements and the Factual Matrix in this Case

[39]

The
    motion judges factual finding that CSR was the recipient of Ecores Proprietary
    Information led to his conclusion that the Confidentiality Agreement fails for
    lack of consideration.  In my view, this finding is not consistent with the wording
    of the Consulting and Confidentiality Agreements, having regard to the factual matrix
    in which these agreements were made. Nor, with respect, does the motion judges
    interpretation of the effect of these agreements accord with sound commercial
    principles or good business sense.

[40]

From
    the outset of the parties dealings, as revealed by Dodges initial letter to
    Downey dated September 9, 1999, Ecore contemplated that Downey, personally,
    would join its team and sit as a member of its management group. Consistent
    with that view, Ecores position was that Downey would be required to
    personally commit to protect Ecores Proprietary Information as a condition of
    his relationship with Ecore.

[41]

There
    was no evidence on the motion to suggest that Ecore resiled from its initial position
    after Downey and his lawyer converted the original employment proposal into a proposed
    consulting arrangement with CSR.  Indeed, both the wording of s. 5 of the
    Consulting Agreement and the motion judges findings confirm that Downey
    proposed this arrangement solely as a means of advantaging his Canadian income
    tax position.  The arrangement with CSR was simply a tax device that, in the
    motion judges words, was implemented at Downeys request and for his
    advantage (at para. 30).  This business reality is a critical component of the
    factual context in which the Consulting and Confidentiality Agreements were
    signed.

[42]

Moreover,
    the transaction between the parties was effected by the execution of both
    contracts.  The Consulting Agreement was entered on the faith of the Confidentiality
    Agreement being executed.  Consequently, these related contracts must be read
    together and, as Winkler C.J.O. explained in
Salah
, assistance in the
    interpretation of each agreement may be drawn from the other.

[43]

That
    the two agreements together constitute a composite whole is suggested by the
    language of the agreements themselves.  Section 8 of the Consulting Agreement
    provides for the execution of Ecores standard form confidentiality agreement
    by the Consultant. It further states that, upon execution, the confidentiality
    agreement would form part of the Consulting Agreement.

[44]

The
    Consulting Agreement does not specifically address the provision or protection
    of Ecores Proprietary Information, nor does it refer to the intended recipient
    of that information.  Instead, it confirms that Downey, in his personal
    capacity, is a Key Person of the Consultant and is integral to the successful
    performance of the Services by the Consultant under this Agreement. CSR
    explicitly acknowledged that Downey would perform all Services, as defined in
    the Consulting Agreement, unless Ecore otherwise consented in writing.

[45]

The
    Confidentiality Agreement fills in the gaps in the Consulting Agreement about the
    provision and protection of Ecores Proprietary Information. It specifically addresses
    the disclosure of this information, providing not only that Downey will be
    granted access to [Ecores] confidential and proprietary information but, also,
    that Downey was entering into the Confidentiality Agreement to grant to
    [Ecore] protections regarding [Ecores] proprietary information.  It confirms
    that Downey intended to be legally bound by the covenants as set forth in this
    Agreement, which include the confidentiality covenants and acknowledgements
    set out in the body of the agreement.

[46]

It
    is true, as the motion judge recognized, that CSR never signed a
    confidentiality agreement and that it was not a named party to the
    Confidentiality Agreement signed by Downey. However, when the Consulting
    Agreement and Confidentiality Agreement are read together, the terms of these
    agreements reveal the parties intentions that Ecores Proprietary Information was
    to be protected in the hands of the person who was to actually receive that
    information  Downey. It was only reasonable for the parties to intend that
    Downey  who was then employed by a known competitor of Ecore  would be
    subject to the terms of the Confidentiality Agreement. He was the person
    defined in s. 7 of the Consulting Agreement as the actual provider of all the
    consulting services to Ecore. Indeed, Downey admitted in cross-examination that
    he was the person who would get Ecores information if a contract was entered into
    with Ecore.

[47]

The
    motion judge erred in finding that Ecore accepted that CSR would receive both the
    Proprietary Information and the benefits flowing from Downeys relationship
    with Ecore. The wording of the agreements and the overall factual matrix
    reveals that the
de facto
relationship between the parties was between
    Ecore and Downey. It was Downey, not CSR, who committed to perform the
    consulting services. And it was Downey who would receive the benefits arising
    from the relationship with Ecore, whether directly or through the corporate
    vehicle of CSR.

[48]

Two
    further comments by the motion judge require mention. The motion judge observed,
    at para. 32, that the Consulting Agreement could have required that both CSR
    and Downey sign the Confidentiality Agreement. He also commented that it was [o]f
    significance that, in 2008, Ecore asked Downey to sign an amended
    Confidentiality Agreement that would have bound both CSR and Downey.

[49]

In
    my view, with respect, these observations are beside the point. The fact that
    the Consulting Agreement did not require both CSR and Downey to sign the
    Confidentiality Agreement is explained by the factual matrix in which the agreements
    were made. At least for the purposes of the Confidentiality Agreement, the
    parties understood and intended that CSR and Downey were one and the same.

[50]

In
    addition, I view the 2008 effort to restate the Confidentiality Agreement as
    nothing more than a failed attempt by Ecore to formally commit CSR to the
    contractual protections it already enjoyed with Downey under the
    Confidentiality Agreement.

[51]

An
    additional point telling against the motion judges interpretation of the interaction
    between the Consulting Agreement and the Confidentiality Agreement is that it fails
    to accord with sound commercial principles and good business sense, and [to] avoid
    commercial absurdity:
Salah
, at para. 16.  On the motion judges
    approach to the interpretation of the two agreements, the Confidentiality
    Agreement serves no meaningful purpose.  The motion judge viewed CSR as the
    recipient of Ecores Proprietary Information. If this were the case, it would
    have served no logical purpose for Ecore to ask Downey to personally commit to
    protect Proprietary Information that he never received.

[52]

Moreover,
    on the motion judges findings, neither Downey nor CSR is bound by the
    Confidentiality Agreement.  Downey is not bound because, in the motion judges
    view, there was no consideration for the agreement.  And CSR is not bound because
    it is not a party to the agreement.  On this interpretation, Ecore is deprived
    of the very protection of its intellectual property for which it bargained.

[53]

Such
    a result is inconsistent with the parties demonstrated intentions at the time
    they entered into the Consulting and Confidentiality Agreements.  It is also
    inconsistent with sound commercial principles and good business sense.    An
    interpretation of the Consulting and Confidentiality Agreements that occasions
    such a commercially absurd result is to be avoided:
Salah
, at para.
    16.

[54]

I
    therefore conclude that, properly interpreted, the intent of the parties in
    entering into their contractual arrangements was to require the execution of a
    confidentiality agreement that bound Downey personally. That s. 8 of the
    Consulting Agreement required CSR to execute such a confidentiality agreement
    does not relieve against the parties joint objective. To conclude otherwise,
    as the motion judge did, would deprive Ecore of any protection of its Proprietary
    Information from the intended and actual recipient of that information. This
    unjust result would permit form to triumph over substance.

(iii)

Confidentiality Agreement is
    Supported by Valid Consideration

[55]

It
    follows from this analysis that the motion judge erred by concluding that
    Downeys execution of the Confidentiality Agreement was unsupported by valid
    consideration. The motion judge rejected Ecores suggestion that the
    consideration received by Downey for executing the Confidentiality Agreement is
    the provision of confidential information by Ecore to the consultant, allowing
    the services of the Consulting Agreement to be provided, thereby allowing the
    compensation contemplated in that agreement to flow (at para. 34).  According
    to the motion judge, at para. 35:

[T]his submission overlooks the fact that it is CSR, not
    Downey, who is the party to the Consulting Agreement.  The confidential
    information is provided to CSR, and the compensation ... was to flow to CSR.  I
    am mindful that some of the funds owing to CSR pursuant to the Consulting
    Agreement were paid to Downey personally.  However, [Ecore] cannot unilaterally
    change the parties to the Consulting Agreement by choosing who they pay. 
    Further, the record suggests that these funds were treated by Downey as revenue
    of CSR.

[56]

In
    my opinion, the motion judges conclusion that the Confidentiality Agreement
    fails for lack of consideration ignores the mutual promises contained in the
    Confidentiality Agreement. In particular, the motion judge failed to consider
    the BACKGROUND preamble to the Confidentiality Agreement, which reads:

Employee will be granted access to confidential and proprietary
    information of the Company as part of his employment.  Employee is entering
    into this Agreement to grant to the Company protections regarding the Companys
    proprietary information.  The parties of [
sic
] this Agreement agree
    and intend to be legally bound by the covenants as set forth in this Agreement.

[57]

The
    mutual promises contained in this provision constitute a
quid pro quo
that formed the basis for the Confidentiality Agreement: Downey would be
    granted access to Ecores Proprietary Information, which was necessary to allow
    him to perform the Services under the Consulting Agreement, and the information
    so disclosed would be subject to confidentiality protections in favour of
    Ecore. Contrary to the parties original expectations, Downey never became an
    Ecore employee but instead continued to use his corporate vehicle for income
    tax purposes. However, the fact remains that Downey received Ecores
    Proprietary Information.

[58]

In
    my view, the mutual promises contained in the Confidentiality Agreement afford
    good and valid consideration for Downeys execution of that agreement. This is
    sufficient to legally bind the parties in accordance with their express
    intentions as set out in the preamble to the agreement, quoted above. It was
    these promises and their fulfillment that permitted Downey, both personally and
    through CSR, to realize the benefits of the Consulting Agreement  benefits he
    would not have received without executing the Confidentiality Agreement to
    which he was personally bound.

(iv)

Conclusion

[59]

I
    therefore conclude, contrary to the motion judges ruling, that Downeys
    execution of the Confidentiality Agreement was supported by valid
    consideration.  It follows that the Confidentiality Agreement, including the
    FSC, is fully enforceable against Downey.

(2)

The Cross-Appeal

[60]

On
    his cross-appeal, Downey invokes s. 5 of the Confidentiality Agreement, which
    provides in part: This Agreement shall apply
during and after
the
    Employees employment with Employer (emphasis added). Downey submits that even
    if he did receive valid consideration for entering into the Confidentiality
    Agreement, it is nonetheless unenforceable against him since he never became an
    Ecore employee. The motion judge did not need to consider this alternative
    argument, having accepted that the Confidentiality Agreement was unenforceable
    against Downey due to a lack of consideration.

[61]

I
    do not read s. 5 of the Confidentiality Agreement in the manner urged by
    Downey. The material language of this provision  that the Confidentiality
    Agreement was to apply during and after Downeys employment with Ecore simply
    confirms that Downeys confidentiality obligations were to survive the
    termination of his relationship with Ecore. This makes commercial sense given
    the purpose of the agreed protections for Ecores Proprietary Information.  It
    was precisely when Downeys relationship with Ecore fell apart, that those
    protections would be needed by Ecore.

[62]

It
    is telling, in this regard, that the relevant language in s. 5 does not provide
    that the Confidentiality Agreement or Downeys confidentiality covenants were
    to apply
only
if Downey was an employee of Ecore or that his
    employment by Ecore was a condition precedent to the triggering of those
    covenants.  This language also accords with common and business sense. If
    Ecores Proprietary Information was disclosed to Downey  in any capacity  the
    protection of that information was of vital concern to Ecore.

VI.     Disposition

[63]

For
    the reasons given, I am persuaded that the motion judge erred in his
    interpretation of the Confidentiality Agreement. That agreement forms part of a
    single transaction between Ecore, Downey and CSR, constituted by both the
    Consulting and the Confidentiality Agreements. The interpretation of each
    agreement is informed by the other.  It is only when the two agreements are
    read together, in accordance with the principles of contractual interpretation
    referenced above, that the intentions of the parties and the true business
    reality of their relationship emerge.

[64]

Accordingly,
    I would allow the appeal, dismiss the cross-appeal, set aside the motion judges
    order and substitute in its stead an order staying Downeys Ontario action on
    the basis of the FSC in the Confidentiality Agreement.

[65]

Ecore
    is entitled to its costs of the appeal and the cross-appeal, in the agreed
    amount of $13,000, inclusive of all disbursements and taxes.

Released:

JUL -6 2012                                     E.A.
    Cronk J.A.

KF                                                   I
    agree K. Feldman J.A.

I
    agree Janet Simmons J.A.





[1]
Prior to 2008, Ecore carried on business under the name of DRI. For
    convenience, DRI is treated in these reasons as being one and the same as
    Ecore.


