Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6 (CanLII)

Shafron sold his insurance agency to KRG and was subsequently employed by its successor, KRG Insurance Brokers (Western) Inc. Each employment contract contained a restrictive covenant whereby Shafron agreed that for three years after leaving his employment, he would not work for an insurance brokerage within the Metropolitan City of Vancouver. When he left the respondent company and began working as an insurance salesman for another agency in Richmond, BC, KRG Western commenced an action to enforce the restrictive covenant. The trial judge dismissed the action, finding that the term Metropolitan City of Vancouver in the restrictive covenant was neither clear, certain, nor reasonable. The trial decision was reversed on appeal. The appeal court agreed that the term Metropolitan City of Vancouver was ambiguous; however, it severed that term and held that the term means the City of Vancouver, the University of British Columbia Endowment Lands, Richmond and Burnaby. By working in Richmond, Shafron was in violation of this reworded covenant.

Did the Court of Appeal essentially rectify the contract? Is rectification an appropriate remedy where a contractual term is ambiguous? What if Shafron contends he never imagined that he was being restricted from working outside Vancouver? What arguments can he raise to challenge enforcement of the restrictive covenant?