Executive Summary: Key Legal and Evidentiary Issues

• Interpretation of the Waste Disposal Services Agreement, particularly the definition of “GIC Client” and the geographic scope of the restrictive covenants in section 3.2.3.
• Whether Stericycle’s national dealings with Bayshore and Trillium amounted to prohibited solicitation or provision of services to “GIC Clients” during and after the contract term.
• Assessment of alleged breaches of confidentiality under section 3.2.6, including whether Stericycle misused GIC’s pricing or customer information.
• Evaluation of an alleged breach of the duty of good faith and honesty in contractual performance under Bhasin v. Hrynew, focusing on Stericycle’s conduct in pursuing Bayshore and Trillium work.
• Application of the summary judgment test under Rule 20 and Hryniak v. Mauldin to determine if there was any genuine issue requiring a trial.
• Proof and quantum of Stericycle’s counterclaim for unpaid invoices and whether any evidence meaningfully contested its entitlement to judgment.

Background and commercial relationship

GIC Medical Disposal Inc. operated as a broker of medical waste disposal services, arranging for service providers to collect and dispose of medical waste for its clients. Stericycle ULC was one such provider of waste disposal services. On July 16, 2013, the parties entered into a Waste Disposal Services Agreement under which Stericycle would provide waste collection and disposal services to clients that GIC brought to it. The Agreement ran for a four-year term ending July 16, 2017. GIC’s business model involved placing its own clients with Stericycle and earning margin between the price charged by Stericycle and the price billed to GIC’s customers. Stericycle, in turn, was to provide waste disposal services to these GIC clients during the life of the Agreement.

Key contractual terms and restrictive covenants

The Agreement contained two restrictive covenants set out in section 3.2.3, aimed at protecting GIC’s client relationships. First, for the term of the Agreement and for one year after its termination, Stericycle agreed it would not “solicit any GIC Client, directly or indirectly, singularly or in conjunction with any other person entity or organization.” Second, for one year after termination, Stericycle further agreed that it would not “provide any Waste Disposal Services to GIC Clients.” The defined term “GIC Client” in section 1.1.10 included persons or entities listed in Schedule A and extended to any other person or entity with whom GIC “has a commercial relationship” in respect of waste disposal services “during the Term.” The Agreement also included a confidentiality obligation in section 3.2.6 requiring Stericycle to keep confidential all information received from GIC relating to pricing and customer lists, including any information associated with GIC Clients. These provisions formed the backbone of GIC’s claims, which alleged breach of the non-solicitation and non-compete covenants, misuse of confidential information, and breach of the duty of honesty and good faith in contractual performance.

Dispute over geographic scope and definition of “GIC Client”

Central to the dispute was how broadly the restrictive covenants should be read. The clauses themselves did not expressly state a geographic limit, and GIC argued they applied across Canada. Stericycle, however, maintained that the Agreement, including the covenants, was confined to Ontario. The court examined the recitals and schedules to the Agreement and accepted Stericycle’s position. The recitals twice refer to GIC’s clients “within the Province of Ontario” and to Stericycle providing services “to GIC’s clients in the Province of Ontario,” signalling that the parties intended an Ontario-focused arrangement. Schedule B likewise set pricing for certain biomedical waste in the Greater Toronto Area and “from outside the GTA limited to Ontario only,” reinforcing the Ontario limitation rather than a national reach. Drafting history also supported this interpretation: earlier contractual language referencing services “elsewhere in Canada” had been removed before execution, indicating a conscious decision by sophisticated, represented parties to limit the Agreement to Ontario. The court therefore held the restrictive covenants were geographically restricted to Ontario. The parties also clashed over who qualified as a “GIC Client” during and after the term. GIC argued the definition captured any entity it had at any point serviced during the four-year term. Stericycle countered that “GIC Client” meant only current clients with whom GIC “has” (present tense) a commercial relationship, not former customers who had since terminated their dealings with GIC. The judge agreed with Stericycle’s narrower reading, reasoning that restrictive covenants are to be interpreted strictly in favour of free competition and that it would be commercially unreasonable for Stericycle to be barred for five years from contracting with entities that had ceased to be GIC’s customers early in the term. The covenants protected GIC’s current client relationships, not a perpetual or extended monopoly over former clients.

Client-by-location approach and overlapping customers

Another key interpretive issue was whether a “GIC Client” was the entire corporate entity or only the specific locations with which GIC had relationships. The evidence showed that both GIC and other suppliers, including Stericycle, serviced different locations or divisions of the same larger corporate groups. For example, with Bayshore Specialty Rx, GIC had relationships with particular Ontario locations (initially a Markham site, later a Kitchener site), while Stericycle had separate relationships with other Bayshore divisions and locations. GIC’s own witness acknowledged that GIC was not the exclusive waste disposal provider for all Bayshore divisions and locations. A similar pattern existed with Trillium College: the Agreement’s Schedule A identified Trillium College and then listed particular campuses, and GIC’s later complaints focused on three specific campuses where Stericycle allegedly took over service. The court accepted that the relevant “client” relationship operated at the location level, not at the level of the entire corporate group, so that Stericycle remained free to contract with locations of those entities where GIC had never had a commercial relationship.

Alleged non-solicitation breach with Bayshore Infusion Clinics

GIC’s main non-solicitation allegation involved Bayshore Infusion Clinics. It claimed that between July and October 2016, while the Agreement was still running, Stericycle improperly solicited Bayshore’s business and secured contracts in breach of the non-solicitation covenant. The court emphasized that “solicit” must be interpreted narrowly in the context of restrictive covenants and free competition. Canadian case law holds that answering a request for proposals or responding to a client-initiated request for a quote does not, without more, amount to solicitation. Here, the evidentiary record indicated that a national manager for Bayshore Infusion Clinics approached Stericycle while looking for a national vendor and requested a quote. At that time, Stericycle already had some direct and indirect (via GIC) dealings with Bayshore. When Stericycle ultimately won the business, GIC in fact tried to compete by offering a lower-priced bid, rather than immediately alleging breach. Moreover, before Stericycle began directly servicing certain Bayshore Infusion Clinic locations that had previously been GIC Clients through the brokerage arrangement, Bayshore had terminated its relationship with GIC for those locations. Although GIC argued Stericycle’s document production concerning quotes and draft agreements was incomplete and invited the court to draw an adverse inference that missing documents would reveal improper solicitation, the court declined to do so. Given the passage of time, the involvement of third-party corporate clients, and the focused nature of the dispute (who initiated contact), the judge found the existing evidence sufficient and adverse inferences unwarranted. On the record, GIC had not proven that Stericycle actively solicited Bayshore in breach of the non-solicitation covenant.

Alleged non-compete breach after expiry of the term

GIC also alleged that Stericycle breached the non-compete covenant by providing waste disposal services after the Agreement ended to entities that had been GIC Clients during the term, particularly Bayshore and Trillium. The court separated out one Med-Health incident where Stericycle inadvertently serviced a former GIC client once, did not charge for it, and which GIC did not seriously pursue in the litigation. For Bayshore, Stericycle’s evidence was that it did not, after the Agreement’s expiry, service the two specific Bayshore Specialty Rx locations in Ontario that had been GIC Clients through GIC. Those locations remained with GIC. Stericycle’s post-term contracts related instead to Bayshore Home Health and Bayshore Infusion Clinic locations, some of which flowed from the 2016–2017 national vendor discussions initiated by Bayshore. For Trillium, the disputed campuses had ended their relationship with GIC while the Agreement was still on foot, and there was no proof that Stericycle had solicited them to leave GIC or that it had otherwise acted contrary to the restrictive covenant. Applying its earlier interpretation that “GIC Client” meant only current, active clients and that location-level relationships mattered, the court concluded that GIC had not established any post-term non-compete breach on the summary judgment record.

Confidentiality obligations and alleged misuse of information

GIC pleaded that Stericycle breached section 3.2.6 by misusing confidential pricing and client information. However, the evidence did not bear out this claim. GIC’s own representative testified that GIC did not share its pricing with Stericycle, describing that as a poor business practice. While Stericycle inevitably learned the identities of GIC’s clients as it serviced them, there was no evidence that Stericycle disclosed GIC’s customer lists to any third party or used any confidential information obtained under the 2013 Confidentiality Agreement (entered into in connection with a possible transaction) to compete unfairly. Without concrete proof of disclosure or misuse, the confidentiality-based cause of action failed.

Duty of good faith and honesty in contractual performance

GIC further argued that Stericycle breached the duty of honest performance recognized in Bhasin v. Hrynew by allegedly misleading GIC or acting in bad faith in relation to Bayshore and other customers. The court reaffirmed that this duty is modest in scope: parties must not lie or knowingly mislead each other about matters directly linked to the performance of the contract, but they are not required to subordinate their own economic interests, disclose all advantages, or refrain from pursuing legitimate business opportunities. Assessing Stericycle’s conduct, the judge found no evidence that it lied to or misled GIC, concealed material information in a manner that undermined the Agreement, or improperly induced GIC’s clients to terminate their relationships. Stericycle’s engagement with Bayshore Infusion Clinics and Trillium locations was characterized as commercially reasonable, arising from Bayshore’s own search for a national provider and normal competitive dynamics. The duty of honesty did not prevent Stericycle from participating in these opportunities, and no breach of good faith was made out.

Summary judgment framework and procedural posture

Procedurally, both parties moved for summary judgment. GIC, as plaintiff, sought summary judgment on its claims for breach of restrictive covenants, confidentiality, and good faith. Stericycle, as defendant, opposed those claims and brought a cross-motion for summary judgment on its counterclaim for unpaid invoices. The court applied Rule 20 of the Ontario Rules of Civil Procedure and the framework in Hryniak v. Mauldin. The central question was whether the record allowed the court to make the necessary factual findings, apply the law, and reach a fair and just determination without a trial. The parties had put forward an extensive evidentiary record with the expectation that the case would be fully decided at the summary judgment stage. After reviewing the Agreement, the surrounding commercial context, and the documentary and affidavit evidence, the judge concluded there were no genuine issues requiring a trial on either GIC’s claims or Stericycle’s counterclaim.

Outcome of the plaintiff’s claims and the defendant’s counterclaim

On the merits of GIC’s action, the court dismissed all causes of action. It held that the restrictive covenants were geographically limited to Ontario, that “GIC Clients” were current, location-specific customers, and that Stericycle’s dealings with Bayshore and Trillium did not amount to either prohibited solicitation or prohibited service to GIC Clients during the relevant periods. The confidentiality and good faith claims likewise failed for want of evidentiary support. As a result, GIC’s motion for summary judgment was dismissed, and its action was dismissed in its entirety. Stericycle’s cross-motion on its counterclaim for unpaid invoices was essentially uncontested on the evidence. During the term of the Agreement, Stericycle had issued 19 invoices for services provided to GIC’s clients that GIC never paid. The total principal amount outstanding was $37,611.47, and there was no meaningful evidence or defence advanced to challenge Stericycle’s entitlement to that sum. The court therefore granted judgment to Stericycle for $37,611.47 together with interest at 0.8% to the date of judgment. As to legal costs, the judge did not fix a dollar figure in the decision. Instead, he directed that, if the parties could not agree on costs, Stericycle, as the successful party, could serve short written submissions within 30 days, with GIC to respond 15 days thereafter. Because no specific costs quantum was set in this judgment, the only determined monetary award is in favour of Stericycle for $37,611.47 plus interest, with the costs amount to be determined separately if the parties do not resolve it by agreement.