Executive Summary: Key Legal and Evidentiary Issues

• Scope and clarity of the interlocutory injunction’s non-competition clause and whether it clearly prohibited continued operation of “Creative Cresting” within a defined radius.
• Evidence from private investigators and admissions by Jack Barrett establishing that he continued to meet potential clients and operate Creative Cresting despite the non-compete order.
• Treatment of the destroyed client list as a compelled item under the order and whether its disposal, rather than return, constituted intentional non-compliance.
• Whether technical and practical limits on transferring phone numbers and a Google Business Page created reasonable doubt that the defendants intentionally failed to comply.
• Competing evidence on the location and control of client artwork, including claims that the artwork resided on the franchisor’s email server and was no longer accessible to the defendants.
• Judicial discretion in contempt proceedings, including when to decline findings of contempt and when to exercise the power to uphold the authority of court orders.

Background and parties

This case arises out of a franchise relationship between Bilomba Inc., operating as Fully Promoted Canada, and its former franchisees in Nova Scotia. Bilomba is the franchisor of Fully Promoted, a branded promotional products and apparel business. The defendants are John (Jack) Barrett, 3338255 Nova Scotia Limited (333 NSL), Creative Cresting Print and Promo Ltd. (Creative Cresting), and Aaron Philip Keith Barrett. The dispute centres on post-termination conduct after the breakdown of the franchise relationship in the Halifax–Dartmouth market. An interlocutory injunction order had been granted earlier by Justice C. Richard Coughlan on March 12, 2025, in Bilomba Inc. (Fully Promoted Canada) v. Barrett, 2025 NSSC 124. That order imposed a non-competition obligation on certain defendants and required them to return and assign specified business assets and confidential materials to Bilomba. In this later decision, Justice Gail L. Gatchalian of the Supreme Court of Nova Scotia deals with motions by Bilomba seeking findings of civil contempt against some or all of the defendants for allegedly breaching that injunction.

The interlocutory injunction and the non-competition obligations

The core of the contempt motion involves paragraph 1 of Justice Coughlan’s interlocutory injunction order, the non-competition clause. Paragraph 1 enjoined John Barrett, 333 NSL, and Creative Cresting from directly or indirectly operating, engaging in, or being concerned with any “Competing Business”, as that term was defined in the underlying Franchise Agreements. The restriction applied within a 200-kilometre radius of the Dartmouth premises at 109 Ilsley Avenue, and within 100 kilometres of any other franchise or corporation using the Fully Promoted trademark. The order also specifically restrained those defendants from carrying on, being engaged in, or being concerned with operating the business then known as “Creative Cresting”. Paragraph 7 of the injunction provided that these non-competition restraints would remain in effect until November 9, 2025. These terms reflected franchising-style restrictive covenants: they sought to protect Bilomba’s brand, goodwill, and client base by preventing former franchisees from running a competing business in the same market during the post-termination period.

Obligations to return and assign business assets and confidential materials

Separate provisions in the injunction addressed the defendants’ post-termination obligations to surrender business assets and proprietary information. Paragraphs 4 to 6 of the order required John Barrett, 333 NSL, and Creative Cresting to return the operating manual and all other proprietary and confidential materials. This expressly included a client list, equipment and property, any relevant telephone and fax numbers, and the Google Business Page associated with the Halifax and Dartmouth Fully Promoted franchises. The order also compelled the transfer or assignment of telephone numbers, business name registrations, licences, and any internet domain names or pages that used the Fully Promoted trademarks. In effect, these clauses mirrored and enforced the termination provisions of the Franchise Agreements, particularly articles requiring franchisees to relinquish control of branding, contact points, and client-facing digital assets when the relationship ended.

The civil contempt framework applied by the court

Justice Gatchalian applied the modern test for civil contempt set out by the Supreme Court of Canada in Carey v. Laiken, 2015 SCC 17, and followed in A.M.G. v. C.J.K., 2024 NSCA 62. Three elements must be proven beyond a reasonable doubt: first, a clear and unequivocal court order stating what must or must not be done; second, actual knowledge of that order by the alleged contemnor; and third, proof that the alleged contemnor intentionally did the act prohibited or intentionally failed to do what the order compelled. The decision emphasizes that the relevant intention concerns the underlying act or omission, not a subjective desire to disobey the court. The judge also notes the strict approach to clarity: any ambiguity in an order should be resolved in favour of the alleged contemnor, and the clarity of the order itself must be proven beyond a reasonable doubt before contempt can be found. Finally, even where all elements are met, the contempt power is discretionary and to be used sparingly, as an enforcement mechanism of last resort.

Evidence of ongoing operation of Creative Cresting in breach of the non-compete

To prove contempt of the non-competition clause, Bilomba relied heavily on affidavit evidence and investigative work conducted by Xpera Risk Mitigation & Investigation. In mid-2025, concerned that the defendants might still be operating Creative Cresting contrary to the injunction, Bilomba retained Xpera to investigate. On July 16, 2025, investigator Chantal Osborne called a phone number associated with Creative Cresting. The call was answered by an individual who identified himself as “JB”. He invited her to send an email to a Creative Cresting email address and encouraged her to attend the Creative Cresting storefront, indicating that the store was open by appointment only. Ms. Osborne then emailed the address provided. On July 18, 2025, Aaron Barrett responded to her email, using a signature line that described him as CEO of Creative Cresting, and set a meeting time at the Creative Cresting showroom on July 21, 2025. Corporate records showed that, as of July 16, 2025, Aaron Barrett was the sole director and officer of Creative Cresting. On the morning of July 21, 2025, another Xpera investigator, Joseph Marc Lessard, attended the Creative Cresting storefront and took video of a person he knew to be Jack Barrett performing activities at the premises, which was located within the non-competition radius. This evidence was supported by the plaintiff’s affidavits and photographs, and the affiants were not cross-examined.

Defence evidence and admissions regarding the non-compete

In response to the contempt motions, the defendants relied on a statutory declaration of Jack Barrett and affidavits from both Jack and Aaron Barrett. Notably, in his November 27, 2025 affidavit, Jack Barrett admitted that he did meet with a potential client at the Creative Cresting location as described in the plaintiff’s materials. He explained that he did so because he and his family were in serious financial hardship and that the meeting was driven by financial desperation rather than a deliberate wish to flout the court’s authority. The court accepted that this explanation might describe motive, but it did not neutralize the fact of intentional conduct: Jack Barrett knowingly engaged in the same business that the injunction explicitly restrained. Based on the call evidence, the email chain, the physical surveillance, and Jack Barrett’s own admission, the judge held that Bilomba had proven beyond a reasonable doubt that Jack Barrett and Creative Cresting intentionally engaged in carrying on the Creative Cresting business in breach of paragraph 1 of the order.

Allegations against Aaron Barrett under the advising and counselling clause

Bilomba also argued that Aaron Barrett should be found in contempt, not under the non-competition clause itself but under paragraph 3 of the injunction. That provision prohibited the defendants from advising or counselling any person to act on their behalf or otherwise aid them in breaching the terms of the order. The plaintiff’s theory was that Aaron Barrett, acting as director and CEO of Creative Cresting, had assisted or enabled the continuation of the business in contravention of the non-compete. Justice Gatchalian focused first on the clarity requirement. Paragraph 1, the non-competition clause, did not name Aaron Barrett as a restrained party; it applied to John Barrett, 333 NSL, and Creative Cresting. Paragraph 3 spoke more generally about advising or counselling others, but the judge found that the language did not clearly and unequivocally prohibit the specific conduct alleged against Aaron in relation to the non-compete. It was framed in terms of preventing the defendants from encouraging third parties to act on their behalf, rather than squarely imposing a non-compete obligation on Aaron himself. Given this lack of precision, and the need to resolve any ambiguity in favour of the alleged contemnor, the court held that Bilomba had not proven beyond a reasonable doubt that paragraph 3 clearly caught Aaron Barrett’s conduct. As a result, the contempt motion against Aaron Barrett was dismissed.

Destruction of the client list and breach of the return-of-property clauses

A central evidentiary issue in the return-of-property branch concerned the client list. Paragraph 4 of the order explicitly required John Barrett, 333 NSL, and Creative Cresting to return to Bilomba the client list that had belonged to the franchisor and had previously been sold to Creative Cresting. The court held that this part of the order was clear and unequivocal. On the evidence, Jack Barrett admitted in his statutory declaration that he disposed of the client list and retained no copies. Aaron Barrett similarly swore that he had disposed of, and retained no copies of, the Fully Promoted client list. The plaintiff’s representative, Muhammad Yousuf Sandeela, confirmed that a copy of the list had never been returned to Bilomba. In the court’s view, destroying the client list, rather than handing it back, amounted to an intentional failure to do the act the order compelled. The obligation was to return the list; choosing instead to destroy it was a deliberate act that placed the defendants in breach. On this narrow but important point, the court found that Jack Barrett and Creative Cresting were in contempt of paragraph 4 of the injunction.

Phone numbers and reasonable doubt about technical feasibility

Bilomba also alleged that the defendants failed to return, transfer, assign, or forward telephone numbers associated with the former Fully Promoted franchises. Mr. Sandeela gave evidence that such transfers were normally routine when ownership of a business changed and that Bilomba had not encountered problems with phone number transfers in the past. However, Aaron Barrett’s affidavit stated that he had relinquished Creative Cresting’s former number back to the provider, Eastlink, and that Eastlink representatives told him it was not possible to port the phone number to another owner of a different business. He further understood he had been advised that the number would go back into the provider’s inventory after 90 days and could then be requested by anyone. Justice Gatchalian declined to rely on the hearsay statements of Eastlink officials for their truth, but did accept that Aaron Barrett had been told and believed that such a transfer could not occur. In light of that understanding, the judge was left with reasonable doubt as to whether Creative Cresting had intentionally failed to comply with the phone-number clauses, and extended that doubt to Jack Barrett’s position as well. The contempt allegations relating to phone numbers therefore failed on the intention element.

Google Business Page and uncertainty about Google’s willingness to transfer

Similar reasoning applied to the Google Business Page. The injunction required the defendants to return or assign the Google Business Page used by the Fully Promoted franchises and by Creative Cresting. Mr. Sandeela’s affidavit described his understanding of the transfer process: the current controller would need to initiate a transfer with Google, obtain a unique code, and provide it to Bilomba so the franchisor could complete the transfer. He also stated that, to the best of his knowledge, the defendants had not initiated or attempted such a transfer. While this was evidence of non-performance, the court focused on the uncertainty around whether Google would in fact accede to a transfer request. Because the plaintiff’s own evidence acknowledged that Google might not agree to the transfer, the judge was left with reasonable doubt about whether, even if the defendants had tried, the transfer would have been possible. This uncertainty undermined proof, beyond a reasonable doubt, that Jack Barrett or Creative Cresting had intentionally failed to do what the order compelled in relation to the Google Business Page. Accordingly, no contempt finding was made on that issue.

Client artwork and disputed control of digital files

The final contested category under the return-of-property obligations concerned client artwork—digital files and designs supplied by clients for their branded products. Mr. Sandeela described this artwork database as one of the most important pieces of proprietary information, since it enabled efficient repeat business and smooth client transitions to new franchisees after termination. He stated that the defendants had not returned this material. However, in a later affidavit, Jack Barrett asserted that all digital artwork belonging to clients of the franchises, whether received from clients directly or from third-party digitizing companies, resided on the Fully Promoted email server. He maintained that those emails were now in the possession of Fully Promoted Canada and that he himself had lost access when he was locked out of the email server first temporarily in September 2023 and then permanently in November 2023. Jack Barrett was not cross-examined on this point. Given that unchallenged account, the judge concluded that there was reasonable doubt as to whether Jack Barrett or Creative Cresting still controlled the artwork files or were able to return them. Without proof that they intentionally failed to turn over material that they still had the power to deliver, the contempt motion on client artwork could not meet the criminal standard of proof.

Exercise of discretion and overall outcome

Having found that the contempt elements were proven beyond a reasonable doubt for (1) Jack Barrett and Creative Cresting’s breach of the non-competition clause in paragraph 1, and (2) their failure to return the client list under paragraph 4, Justice Gatchalian turned to the discretionary nature of the contempt power. The court noted that this was not a case where the defendants had acted in good faith or taken reasonable steps to comply. Jack Barrett willingly continued to meet a potential client at the Creative Cresting premises, and both he and Creative Cresting chose to destroy the client list instead of returning it. The judge concluded that it would not work an injustice to make a finding of contempt and that the integrity of the court’s processes required enforcing respect for its orders. Accordingly, the court formally found John (Jack) Barrett and Creative Cresting Print and Promo Ltd. in contempt of court for breaching the non-competition provision and for failing to return the client list. The court rejected the plaintiff’s other contempt claims, holding that Bilomba had not proven, beyond a reasonable doubt, intentional non-compliance regarding phone numbers, the Google Business Page, or client artwork. The motion for a contempt order against Aaron Barrett was dismissed outright because the relevant order language was not sufficiently clear and unequivocal as to him.

Next steps, successful party, and monetary consequences

The decision concludes by directing counsel to contact the court to arrange a telephone conference with Justice Gatchalian to schedule the penalty phase of the contempt proceeding. That later phase will determine what sanctions, if any, should be imposed for the contempt—such as fines, coercive orders, or costs. In this liability decision on contempt, the court does not set or quantify any monetary award, penalty, or costs figure. On the issues decided, Bilomba Inc. (o/a Fully Promoted Canada) is the successful party against John (Jack) Barrett and Creative Cresting Print and Promo Ltd., while Aaron Barrett successfully resists the contempt motion against him; however, the total amount of any monetary award, damages, fines, or costs in favour of Bilomba cannot be determined from this decision because the court reserved those matters for a separate penalty phase and did not fix any figures in this judgment.