Executive Summary: Key Legal and Evidentiary Issues

• Enforceability and reasonable scope of the non-competition and non-solicitation clauses in the defendants’ employment contracts, including limits on time (12 months), territory (Québec and Ontario) and defined types of financed equipment.
• Disputed factual narrative about how the employment relationships ended, and whether article 2095 C.c.Q. bars Fincap from invoking the non-compete because of alleged dismissal or constructive dismissal.
• Evidence suggesting that the defendants launched Riot Financial Group as a competing commercial financing business and may have carried on financing activities covered by the contractual clauses within the protected territories.
• Risk of serious or irreparable harm to Fincap through potential loss of clients and business opportunities, as well as the risk that a judgment on the merits would be rendered ineffective without interim injunctive relief.
• Balancing of inconveniences between restricting the defendants’ ability to work in a defined segment of the equipment-financing market and protecting Fincap’s legitimate business interests during the 12-month restrictive period.
• Interpretation of the contractual phrase “services pouvant être rendus par Fincap” and the Court’s decision to narrowly confine it to financing activities tied to specifically listed categories of commercial equipment.

Background and parties

Fincap Financial Group Inc. operates in the field of commercial financing, focusing on financing and refinancing industrial and commercial equipment and arranging working-capital loans for businesses across Canada. It conducts a specialized brokerage-style business, using a mix of salaried in-house commercial finance brokers and external commissioned brokers. The individual defendants, Félix Hurteau and Audrey Gagnon-Bart, were previously employed by Fincap as commercial finance brokers. During their employment, they each signed an employment contract that included restrictive covenants and separate confidentiality agreements. A third defendant, 9503-6026 Québec inc., operates under the business name Riot Financial Group. Its shareholders and administrators are Mr. Hurteau and Ms. Gagnon-Bart, and Riot carries on financing activities in the same general commercial equipment-financing market, allegedly in direct competition with Fincap.

Employment relationships and restrictive covenants

Ms. Gagnon-Bart was hired on 11 March 2024 as a commercial finance broker. Her employment contract contained a non-competition clause, a non-solicitation clause and a confidentiality agreement. Mr. Hurteau joined Fincap on 7 August 2024 in the same capacity, under a similar contractual framework. Central to the dispute is clause 6.1 of their contracts, titled “Engagement de non-concurrence”. In essence, in consideration of their employment and the specificity of Fincap’s activities, each employee agreed that, for the duration of the contract and for 12 months after its termination, they would not directly or indirectly, for themselves or for any other person, within Québec and Ontario, provide or participate in providing any “service pouvant être rendu par Fincap” or work for a business offering such services. The contracts define “services pouvant être rendus par Fincap” as financing, refinancing, loans, working-capital loans, assignments of receivables, leasing or other financing of a series of listed categories of equipment, including trailers, construction, forestry, excavation, agricultural, transport, garage, industrial, handling, medical, IT and office, restaurant, dental and printing equipment. The clause also expressly carves out certain roles that are not prohibited, such as working as a manager or employee of a financial institution, a dealership finance manager for vehicle purchases or leases, or as a mortgage broker. Clause 6.2 underscores the seriousness of any breach: it provides that non-compliance with clause 6.1 will cause Fincap serious and irreparable prejudice and stipulates a contractual penalty of CAD 500 per day of contravention, in addition to any other rights and remedies. The contracts also contain non-solicitation provisions (clause 6.3) preventing the defendants from soliciting Fincap’s clientele and business partners for a similar 12-month period. In the broader civil law background, article 2089 of the Civil Code of Québec (C.c.Q.) requires that such non-competition clauses be limited in time, territory and type of work and be reasonable when viewed as a whole. Article 2095 C.c.Q. further provides that an employer cannot invoke a non-competition clause if it terminated the employment contract without serious reason or gave the employee such a reason to resign.

Events leading to the dispute

After some time working as brokers at Fincap, the relationship between Fincap and the defendants deteriorated. Fincap alleges that Mr. Hurteau and Ms. Gagnon-Bart voluntarily left their employment in order to start and develop Riot Financial Group, which it says operates as a direct competitor by offering the same types of commercial equipment-financing services. On Fincap’s account, Riot’s activities and the defendants’ conduct fall squarely within the scope of the non-competition and non-solicitation clauses and take place on the protected territories of Québec and Ontario. The defendants, for their part, dispute this narrative. They argue that article 2095 C.c.Q. prevents Fincap from relying on the non-competes because Mr. Hurteau was allegedly dismissed and Ms. Gagnon-Bart claims she was effectively forced to resign to protect her health in a toxic work environment. They also argue that, in any event, the non-competition clause is unreasonable in its breadth: they say it covers too wide a range of activities, for too long a period and on too broad a territory. As a subsidiary position, they contend that they respect the clause because Riot does not conduct any of the specified financing activities within Québec or Ontario, instead targeting business outside those provinces. Mr. Hurteau raises additional allegations of defamation and invasion of privacy, claiming that Fincap communicated defamatory statements about him to a business partner and improperly used a private Facebook exchange as evidence. The Court notes that these complaints are matters for the merits and does not resolve them at the interlocutory stage.

Provisional and interlocutory injunction proceedings

Concerned about losing clients and market share to its former employees and their new company, Fincap applied for urgent injunctive relief. On 19 December 2025, the judge issued a provisional interlocutory injunction against the defendants, which was renewed on 29 December 2025. That earlier decision, Fincap Financial Group Inc. c. Hurteau, 2025 QCCS 4685, set the stage for the more detailed consideration in the present 2026 interlocutory injunction judgment. For the provisional injunction, the parties filed sworn declarations in support of their respective positions. Before the hearing on the interlocutory injunction, they added further affidavits and documentary exhibits, including material about how the employment ended and about Riot’s activities in the market. That evidence remained sharply contradictory on key factual points, especially who initiated the end of the employment relationships and where, precisely, Riot operates and markets its services.

The interlocutory injunction framework applied by the Court

In analysing whether to grant an interlocutory injunction, the Court applies the familiar three-part test: first, whether there is an appearance of right (or a strong appearance if a mandatory order is sought); second, whether the applicant will suffer serious or irreparable harm without the injunction; and third, whether the balance of inconveniences favours issuing the order. These criteria must be examined globally and in a flexible, interrelated way rather than as rigid, stand-alone requirements. Here, Fincap seeks an essentially prohibitive injunction: an order that the defendants respect the non-competition and non-solicitation clauses and related confidentiality obligations. It is not a genuinely mandatory order compelling positive performance beyond compliance with existing contractual restrictions. The appearance-of-right threshold is therefore relatively low; Fincap must simply demonstrate that its claim is neither frivolous nor vexatious. At the same time, because the litigation involves employment-related non-competes, the Court is careful to remember that such clauses restrict freedom of work, must be interpreted strictly, and must appear reasonable at first sight in their duration, territory and scope of activity. The Court also keeps in mind article 2095 C.c.Q., which can deprive an employer of the benefit of a non-compete if the termination of employment was without serious reason or attributable to the employer’s conduct. However, that issue cannot be definitively decided on the limited record at the interlocutory stage.

Key contractual clauses and their interpretation

The Court closely reviews clause 6.1 of the employment contracts, setting out the non-competition obligation for 12 months after the end of employment within Québec and Ontario. It recognises that Fincap’s business is specialized and that Fincap operates across Canada, which supports a broader territorial restriction than might be justified in a more localised practice. At first glance, the Court concludes that the 12-month duration and the restriction to Québec and Ontario do not appear unreasonable in light of the company’s nationwide activities and niche market. While the defendants argue that the clause captures “all” financing activities, the Court gives the wording a restrictive interpretation. It holds that the non-competition clause does not ban the defendants from any kind of financing work; instead, it is confined to financing, refinancing, loans, working-capital loans, assignments of receivables, leasing and other financing when, and only when, those services relate to the specific categories of commercial equipment enumerated in the clause. The Court also notes that the contract itself clarifies certain types of financial employment that remain permissible, such as working for a bank, a vehicle dealership finance office or as a mortgage broker, which further demonstrates that the clause was drafted with a defined industry segment in mind. The Court therefore finds, on a prima facie basis and without prejudging the merits, that the non-competition clause appears valid and reasonably limited when assessed globally. The same holds for the parallel non-solicitation clause, which targets Fincap’s clientele and business partners within the same defined sphere. The Court’s interpretation is codified in the operative part of the judgment, where it expressly declares that the phrase “services pouvant être rendus par Fincap” in both the non-competition and non-solicitation clauses is limited to financing activities tied to the specifically listed equipment categories.

Evidence on termination of employment and alleged breaches

On termination, the evidence is sharply divided. Fincap says both defendants resigned of their own accord. Mr. Hurteau claims he was dismissed, while Ms. Gagnon-Bart says she was effectively pushed to resign to protect her health from a toxic work environment. Both sides supplied sworn declarations and exhibits on these points, but the Court emphasises that the record remains incomplete and contradictory. At the interlocutory stage, the judge does not undertake a full credibility assessment or attempt to definitively resolve this factual conflict. Instead, the Court asks only whether Fincap’s position that the employees resigned is arguable and supported by some evidence. On this limited standard, the Court finds that Fincap’s account is not frivolous or devoid of foundation. The same approach is applied to alleged breaches of the restrictive covenants. Fincap adduces evidence that several vendors operating in Québec who had previously worked with the defendants have stopped sending business to Fincap. It also points to a business partner who reported being solicited by Mr. Hurteau. The defendants respond that any such contacts related solely to activities outside Québec and Ontario and that they are not competing in the protected territories or within the prohibited equipment-financing segment. Again, the Court finds the record conflicting but considers that Fincap has raised serious questions and made a credible showing that some of Riot’s and the defendants’ activities may fall within the scope of the non-competition and non-solicitation clauses.

Serious or irreparable harm and balance of inconveniences

The Court then turns to harm. Fincap alleges that without an interlocutory injunction it faces ongoing loss of clientele and significant business opportunities during the lifetime of the restrictive covenants. The Court accepts that loss of clients is generally difficult to quantify in money and can constitute serious prejudice. It also notes that the employment contracts themselves contain a presumption that violations of the non-competition and non-solicitation clauses cause serious prejudice to Fincap, aligning with the nature of the business and the difficulty of precisely measuring diverted transactions and future opportunities. Another key consideration is the duration of the non-compete: it lasts only 12 months from the end of employment. By the time the action is heard and decided on the merits, that 12-month period will likely have expired. Without interim relief, any eventual judgment on the merits ordering the defendants to honour their non-compete and non-solicitation obligations would be largely moot for the purpose of specific performance; Fincap would be left primarily with damages, which may be difficult to prove and collect. This reinforces the finding of serious, and to some extent irreparable, harm. On the balance of inconveniences, the Court weighs the impact on each side. Fincap faces the risk of losing hard-won business relationships and market position in a specialised segment if the defendants continue competing through Riot during the non-compete period. By contrast, the defendants assert that enforcing the clause compromises their ability to earn a living. However, they simultaneously maintain that they already comply with the clause and that Riot’s activities fall outside the restricted territories and sector. The Court reasons that if the defendants are indeed respecting the clause, the incremental prejudice of a formal injunction should be limited. Moreover, the Court’s narrow, equipment-specific reading of the contractual language, together with its explicit territorial and temporal limits, reduces the impact on the defendants’ ability to work in other areas of finance or in other geographic markets. The judge therefore concludes that the balance of inconveniences favours granting an interlocutory injunction, subject to this restrictive interpretation of the clauses.

Court’s decision and practical outcome

On the basis of this analysis, the Court grants Fincap’s application for an interlocutory injunction. First, the Court orders Mr. Hurteau and Ms. Gagnon-Bart to comply with the non-competition clause in their employment contracts, reproducing clause 6.1 in the judgment and confirming that it remains in force for 12 months after the end of their employment within Québec and Ontario, but only for the specific categories of equipment financing defined in the contract. Second, the Court orders the individual defendants to comply with their confidentiality agreements and with the non-solicitation clause at article 6.3, thereby prohibiting them from soliciting Fincap’s clients and business partners in the same specialised equipment-financing field. Third, the Court issues a clear interpretive declaration limiting “services pouvant être rendus par Fincap” to financing, refinancing, loans, working-capital loans, assignments of receivables, leasing and other financing that are directly linked to the enumerated equipment categories; it is not a ban on all forms of financing or credit activity. Fourth, the judgment enjoins Riot Financial Group (9503-6026 Québec inc.) from directly or indirectly participating in any violation by Mr. Hurteau or Ms. Gagnon-Bart of their non-competition and non-solicitation obligations. The Court authorises service of the injunction order, including by technological means outside normal business hours and on non-business days, and orders provisional enforcement notwithstanding any appeal. As in the earlier provisional injunction, Fincap thus obtains ongoing injunctive protection through the interlocutory phase of the litigation. In terms of success and monetary consequences, Fincap Financial Group Inc. is clearly the successful party at this interlocutory stage: its motion for an interlocutory injunction is granted in full, with the Court awarding it costs of justice and enforcing, on a prima facie basis, the contractual restrictive covenants against the defendants. However, the decision does not quantify either damages or costs, nor does it order payment of the contractual CAD 500-per-day penalty at this point; the total monetary award in favour of Fincap cannot be determined from this decision and appears to be limited, for now, to unquantified legal costs to be assessed in the ordinary course.