A former teacher at a real estate school has been ordered by a judge to pay $50,000 in damages related to him setting up a rival school.
A former teacher at a B.C. real estate school has been ordered to pay $50,000 in damages for breaching agreements when he quit working for the school and set up a rival operation.
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In June 2016, Quick Pass Master Tutorial School Ltd. hired Li Min (Richard) Zhao as an independent contractor to assist in the tutoring services for its students.
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The school provided tutorial services to mainly Mandarin-speaking students wishing to obtain their real estate trading, mortgage broker or rental property management licences. To actually obtain a licence, a person must enrol as a student at the University of B.C., complete all assignments and take an exam.
Zhao, who was fluent in English and Chinese and had 20 years of experience in marketing, signed contracts to teach the students that included an agreement stipulating that he was prohibited from competing with Quick Pass in Vancouver, Burnaby or Richmond following any termination of the contracts.
Under a confidentiality clause, he also agreed to return upon request the company’s confidential and proprietary teaching materials that had been provided to him.
In September 2017, Zhao advised Benson Wang, principal of the company, that he was terminating his independent contractor deal and was planning to set up a competing service in Richmond and Burnaby.
Wang claimed that Zhao told him he had no intention of complying with the confidentiality clause and said he urged Zhao to ensure that he returned all of the company’s teaching materials and to comply with the non-compete clause. Zhao responded that he didn’t consider the non-compete clause to be enforceable.
Zhao sent the company an email enclosing certain of the teaching materials that had been provided to him but did not return any of the materials, including PowerPoint slides, he had developed and used to teach the company’s students, and, in November 2017, he started doing business in Burnaby, a city named in the non-competition clause, under the name RZRESL.
After the new school opened, Wang claimed that Quick Pass had experienced a noticeable decline in the number of its clients and said he was aware that some former Quick Pass clients had switched over to the Zhao school.
In May 2018, Quick Pass went to court and obtained an injunction restraining Zhao from competing with it in Vancouver, Burnaby or Richmond until April 30, 2019, the expiry date of the non-compete clause. Zhao moved his school from Burnaby to New Westminster.
Quick Pass went back to court seeking damages for Zhao’s breaches of the contract, and, in a recent ruling, B.C. Supreme Court Justice Gordon Weatherill concluded that Quick Pass was entitled to $50,000 in damages.
“I have no difficulty in finding that the defendant’s evidence on most, if not all, material issues was false and contrived in an attempt to achieve success in this action,” said the judge. “The harsh reality is that once a witness has been shown to be deceptive and untruthful in giving his evidence, that witness can no longer expect the court to consider him to be a trusted source of the truth.”
The judge declined to award punitive damages but did order special costs against Zhao for providing an affidavit he knew to be false.
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