Rock Developments ats. Goodlife Fitness Centres
Back to all cases
Rock Developments sold its fitness centre business to the plaintiff, Goodlife Fitness. Rock Developments also owned three parcels of undeveloped land in the Windsor area. Rock Developments granted Goodlife restrictive covenants preventing two of those parcels from being leased or sold to a competing fitness centre. For this parcel, Rock Developments refused to give a restrictive covenant, but it granted Goodlife a right of first refusal to use the space and entered into a non-competition agreement with a five-year duration. Rock Developments leased the third property to a competing gym and Goodlife sought a permanent injunction preventing that lease. The application judge granted the injunction, but the Court of Appeal reversed the decision, finding the application judge to have made several errors of law and fact. The Court clarified the rule that evidence of contractual negotiations do not form part of the factual matrix and are generally not to be used when interpreting a contract.