[1] This is an application on behalf of Pastro and Marshall, the proposed appellants, for an order granting leave to appeal from an order of Drost J. pronounced January 11, 2000. The applicants also seek a further order that proceedings may be stayed pending the hearing of any appeal. The respondent, Merrill Lynch, is a large national brokerage firm which has offices in many areas of Canada. One of their offices is located in Trail, British Columbia. The Trail office was apparently acquired from another broker, Midland Walwyn Inc., at the time when this broker amalgamated its business with Merrill Lynch in 1998. The applicants were Midland Walwyn brokers at the time of the takeover by Merrill Lynch, Pastro having been with Midland Walwyn since 1977 and Marshall since 1995.

[2] The chambers judge found that on or about November 26, 1999 the applicants without notice terminated their employment with Merrill Lynch and took up employment with a rival national brokerage firm, Nesbitt Burns. They took with them an assistant who had formerly worked with them in the Merrill Lynch Trail office. The applicants opened a new office of Nesbitt Burns in Rossland, British Columbia, a town situated not far from Trail. It was alleged by Merrill Lynch in this action that the applicants were, contrary to certain alleged non-competition covenants, proceeding to solicit Merrill Lynch clients. Merrill Lynch asked for various heads of relief including an interlocutory injunction.

[3] Consequent upon a hearing on January 5, 2000, Drost J. on January 11, 2000 made the following order:

[4] As I read the reasons of the learned chambers judge, he accepted the proposition that the applicant, Pastro, had an effective non-competition agreement in place restraining him from soliciting clients for a period of six months after he left the employ of Merrill Lynch. That was essentially the basis for the interlocutory relief granted concerning the applicant Pastro. The interlocutory relief concerning the applicant Marshall was in large measure founded on the proposition that because he was effectively in a joint venture relation with Pastro, injunctive relief should also be granted as against him. As will be noted from the terms of the order, the non-solicitation relief was granted for a period of six months after November 26, 1999 and is to expire on May 26, 2000. The applicants seek to have a stay of the order granted and concurrently seek leave to appeal. Leave is required because this is an interlocutory type of order.

[5] It is asserted on behalf of the applicants that there is some doubt as to the validity of the non-competition covenants based on an argument that certain language in a document called a "Pro Plan Agreement" entered into between the respective parties subsequent to the agreement containing the non-solicitation covenant may render void or ineffective the non-competition covenant relied upon by Merrill Lynch. All I can say about that argument is that I seriously doubt that an effective argument could be mounted to sustain the validity of that proposition, having regard to the background of the Pro Plan agreement and its purpose. As I see it, that agreement was put in place to effect a transfer of the business of certain clients formerly serviced by another broker in the Midland Walwyn office. It is also submitted by the applicants that damages would be an adequate remedy in this case in any event - the applicants call in aid certain affidavit material from another proceeding involving Merrill Lynch in Ontario to underpin that argument. That may be a somewhat more arguable proposition than the first proposition relating to the Pro Plan. However, on reflection I am inclined to believe that in this case there exists a situation where it appears to be very difficult to quantify in damages just what harm could or would accrue as a result of the solicitation of brokerage clients. It is also asserted that the learned chambers judge may have erred in apparently concluding that these applicants were "key employees" of the Merrill Lynch Trail office. As is noted in a number of authorities, the question of just who can fall into the category of key employee is a somewhat vexed one in this area of the law. The learned chambers judge in his reasons expressed the view that the plaintiff, Merrill Lynch, had made out a strong prima facie case for relief and he found that the covenant prohibiting solicitation of clients of Merrill Lynch for a period of six months was prima facie valid and enforceable. Concerning irreparable harm his Lordship said this:

Based on a consideration of all these factors, the learned chambers judge granted a time limited injunction against the solicitation of clients. This term of the relief granted is to expire near the end of May 2000.

[6] In the case of Barton Insurance Brokers Ltd. v. Irwin et al. (1999), 170 D.L.R. (4th) 69, a case involving an employee of an insurance brokerage firm, I observed at page 88 as follows:

[7] In this case at bar, the learned chambers judge found the limited restricted covenant to be prima facie effective and in my view that conclusion was certainly open to him on the facts. This case is rather the reverse of a case like Irwin where there was no covenant in existence. In cases where there is an effective covenant, the courts should usually give effect to it. The public has an interest, as I observed in Irwin, in free competition but there is also a principle of law that contractual agreements ought to be enforced. Although even in a negative covenant case, the court must still have regard to the general principles underlying the grant or refusal of an interlocutory injunction, there is usually a greater readiness to grant interlocutory relief where such a covenant exists. As Hinds J.A. noted in Milk Marketing Bd. (B.C.) v. De Jong (1995), 71 B.C.A.C. 1, this court will usually not interfere with the exercise of discretion by a chambers judge unless it can be shown that the discretion was not exercised judicially or that palpable and overriding error has been demonstrated. Although it has now emerged on discovery that somewhat fewer clients of the Trail office than was formerly suggested may be affected by the change in employment of the applicants, it seems to me that the substantial case for the plaintiff respondent Merrill Lynch, has not been affected by any new evidence. The applicants constituted an important segment of the Trail office of Merrill Lynch and I am quite unable to say that the chambers judge erred in his assessment of the potential for irreparable harm if the applicants or their new employer were to be permitted to solicit Merrill Lynch clients contrary to the restrictive covenant. Likewise, I consider the chambers judge has not been shown to have been in error concerning his assessment of the question of whether damages would be an adequate alternate remedy. What it comes to is that I am quite unable to conclude that the learned chambers judge fell into error in any respect with regard to his analysis of this situation. I see no error in his decision to grant interlocutory injunctive relief. I do not consider that it has been demonstrated that leave to appeal should be granted. Because I have reached this conclusion, I have not found it necessary to address the question of a stay of proceedings pending the hearing of an appeal. In those circumstances, I therefore would dismiss these applications.

"The Honourable Mr. Justice Hall"