Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on alleged breaches of business agreements between co-owners of a dental clinic, including claims of improper competition and misuse of joint funds.

• Plaintiffs seek an interlocutory injunction to prevent the defendant from operating a competing clinic, using shared resources, and making excessive withdrawals from a joint account.

• Interpretation of contract provisions regarding goodwill, transfer restrictions, and obligations of good faith and honest performance is at issue.

• The existence and scope of fiduciary duties between independent contractor co-owners are challenged.

• The court must assess whether irreparable harm would result without an injunction and balance the convenience of both parties.

• Outcome hinges on whether the plaintiffs established a serious question to be tried and met the legal test for injunctive relief.

Facts and outcome of the case

Background and parties

This case involves a dispute between two dentists, R. Sean Saunders and Anthony Ciammaichella, who jointly own and operate the Lantzville Dental Clinic (LDC) in British Columbia through their respective professional corporations. Dr. Saunders joined LDC as an associate in 1996 and purchased a half interest in the clinic in 1999. The parties entered into a Purchase and Sale Agreement and a Cost Sharing and Buy/Sell Agreement (CSBSA) to govern their business relationship, including the division of assets, goodwill, and management of a joint bank account.

Origins of the dispute

Tensions arose over the years due to disagreements about management styles, financial withdrawals, and the use of clinic resources. In 2019, Dr. Ciammaichella purchased an adjacent property and eventually opened a new dental clinic, Azura Dental Clinic (ADC), where he began practicing part-time in 2025. Dr. Saunders alleged that Dr. Ciammaichella’s actions breached their agreements by transferring goodwill, diverting patients, using LDC’s equipment at ADC, and overdrawing from the joint account to benefit ADC. Dr. Saunders sought an interlocutory injunction to restrain these activities and preserve the status quo pending trial.

Legal issues and arguments

The plaintiffs claimed breach of contract, breach of the implied duty of good faith and honest performance, and breach of fiduciary duty. They argued that Dr. Ciammaichella’s operation of ADC and related conduct violated specific provisions of the CSBSA and eroded the shared goodwill of LDC. The defendants denied any breach, contending that the agreements allowed for independent practices and that any transfers were between affiliates, not in violation of the agreements. The defendants also argued that the plaintiffs had not met the legal threshold for injunctive relief.

Court’s analysis

The court applied the established test for interlocutory injunctions, requiring the plaintiffs to show a serious question to be tried, a risk of irreparable harm, and that the balance of convenience favored granting relief. The court found that most of the plaintiffs’ claims, except for the alleged breach of fiduciary duty and the equal division of referrals, raised serious questions for trial. The court determined that the loss of goodwill and potential depletion of the joint account could result in irreparable harm that could not be adequately compensated by damages. The balance of convenience was found to favor the plaintiffs, as Dr. Ciammaichella had altered the status quo by opening ADC and making disputed withdrawals.

Outcome

The court granted an interlocutory injunction in favor of the plaintiffs, restraining Dr. Ciammaichella from providing dental services at ADC, publicly associating with ADC, using LDC’s equipment at ADC, and making withdrawals from the joint account that would reduce the balance below a specified threshold or benefit ADC. The court declined to grant relief regarding the hiring or inducement of LDC staff to join ADC, finding insufficient evidence of imminent harm. Costs of the application were awarded to the plaintiffs, with the amount to be determined as part of the overall case outcome. No damages were awarded at this stage, as the matter remains pending for trial.