In the 2025 Ontario Court of Appeal decision Total Meter Services Inc. v. GVM Integration (2025 ONCA 321), the Court provided a detailed review of fiduciary obligations, confidentiality breaches, and the importance of properly asserting and addressing limitation defences in litigation. The case offers valuable lessons for Ontario employers, especially those in technology-driven sectors where intellectual property and proprietary software are central to business value.
This blog explores the Court’s reasoning and highlights key takeaways for employers related to post-employment obligations, protection of confidential information, and best practices for managing potential litigation.
From Trusted Manager to Competitor
The case arose from a commercial dispute between the respondent, Total Meter Services Inc. (TMS), and its former key employee and software manager, Guy Roberge. After ending his formal employment with TMS in November 2012, Mr. Roberge continued to work for the company as an independent contractor until May 2013. During this period, he retained access to sensitive company information, including software source code, customer relationships, and business strategies.
TMS alleged that Roberge and GVM Integration—a company he controlled—misappropriated TMS’s proprietary software and confidential information to build competing software products and solicit TMS’s clients and distributors. TMS further alleged that Roberge exploited his insider knowledge of TMS’s operations to position GVM as a direct competitor, effectively springboarding his new company off the confidential materials and relationships he had access to at TMS.
Following the trial, the Ontario Superior Court of Justice found the defendants liable for breach of fiduciary duty and breach of confidence. The trial judge awarded $750,000 in damages based on the disgorgement of GVM’s profits from misusing TMS’s information.
The defendants appealed on two grounds:
- The trial judge erred in drawing an adverse inference related to source code comparisons.
- The trial judge failed to rule on a limitation period defence regarding a specific claim known as the “TCS Opportunities claim.”
The Court of Appeal’s Findings
The Court of Appeal upheld the trial judge’s finding of liability based on fiduciary breach and misuse of confidential information. However, it partially allowed the appeal, concluding that the trial judge failed to consider the appellants’ limitation period defence regarding a distinct portion of the claim. As a result, the Court reduced the damages award to $518,659.26.
Drawing an Adverse Inference: A Matter of Evidence and Credibility
One of the core disputes was whether the trial judge had improperly drawn an adverse inference against Mr. Roberge regarding the alleged copying of TMS’s source code. The Court of Appeal found that the trial judge had acted appropriately in concluding that the GVM software was likely developed using TMS’s proprietary code.
At trial, the judge accepted the evidence of a former TMS employee, Bryce McKiernon, who had later worked for GVM. McKiernon testified that the GVM software was initially written in the same programming language as TMS’s software (Visual Basic) and was later converted to C#. Despite this, GVM only produced the C# version during litigation, making meaningful comparisons impossible. The trial judge found this withholding of Visual Basic code to be a deliberate attempt to “cover Mr. Roberge’s tracks,” justifying an adverse inference.
The Court of Appeal emphasized that adverse inferences are permissible where there is a factual foundation, particularly when discovery obligations are not met. In this case, the missing evidence and witness testimony provided a sufficient basis for the trial judge to infer that the GVM software had been copied from TMS’s proprietary code.
This aspect of the ruling reinforces that employers must protect source code and other confidential materials through clear contracts and rigorous enforcement, including in post-employment scenarios. It also highlights that failing to meet document production obligations in litigation can severely impact credibility and outcomes.
Fiduciary Duty and Breach of Confidence
The decision reiterates the high duties owed by key employees, particularly those with managerial responsibility and access to confidential business information. Even after employment ends, individuals in fiduciary positions may continue to owe duties that prohibit them from competing unfairly or misusing their former employer’s proprietary materials.
In this case, Mr. Roberge’s actions went far beyond fair competition. He:
- Copied confidential information and source code before leaving employment.
- Used that information to create directly competing software.
- Solicited TMS clients and distributors using his insider knowledge.
- Concealed the nature and origin of the software by converting programming languages post-facto.
The Court agreed with the trial judge that these actions constituted serious breaches of fiduciary and equitable duties, justifying a remedy based on the disgorgement of profits—a remedy focused on stripping ill-gotten gains rather than compensating for loss.
For Ontario employers, this ruling underscores the importance of:
- Clearly identifying key employees who may owe fiduciary duties.
- Having robust confidentiality, non-solicitation, and IP assignment clauses in employment and contractor agreements.
- Actively monitoring post-employment conduct where sensitive information is concerned.
The TCS Opportunities Claim and the Statute of Limitations
The second ground of appeal concerned a claim added to the lawsuit in 2020, years after the original pleading in 2014. This “TCS Opportunities claim” alleged that while still employed by TMS, Mr. Roberge had secretly diverted a specific business opportunity involving a client, Total Control Systems (TCS), to himself and GVM.
The defendants argued that this was a new and distinct cause of action that should have been pleaded within two years of discovery, per the Limitations Act, 2002. Although the trial judge allowed the amendment to the pleadings, she failed to rule on whether the claim was time-barred. The Court of Appeal found this omission to be a legal error.
Importantly, the Court held that the TCS claim introduced new factual allegations not contained in the original claim and related to a different time period and client. As such, it was not merely an extension of the original breach of fiduciary duty claim but a separate cause of action, subject to its own limitation period.
Since the claim was discovered no later than May 2013 and only added in 2020—more than seven years later—it was clearly outside the two-year limitation window and therefore statute-barred. The Court adjusted the damages accordingly, reducing the award by over $231,000.
This part of the ruling offers two major lessons:
- Employers must act promptly when they become aware of wrongdoing. Waiting too long to investigate or pursue legal action can result in viable claims being dismissed due to limitation periods.
- Litigants and their counsel must address limitation defences directly and thoroughly at trial. A trial judge’s failure to adjudicate on this issue may result in partial reversal on appeal.
Key Takeaways for Ontario Employers
The Total Meter Services case is rich with practical insights for employers, particularly those in technology, software development, and other knowledge-intensive industries.
1. Recognize and Define Fiduciary Roles
Employers should carefully consider which roles within the company qualify as fiduciary or trust-based positions. Senior developers, executives, and employees with direct client relationships often fall into this category. Employment contracts should reflect these expectations explicitly.
2. Protect Confidential Information
Strict internal policies governing access to proprietary information and clearly defined confidentiality agreements are essential. Employers should also implement secure offboarding protocols, including return or deletion of company data, to mitigate risk when employees exit.
3. Monitor Post-Employment Competition
Former employees starting a business in a similar field isn’t necessarily unlawful, but using insider knowledge, source code, or client data to do so likely is. Employers should remain vigilant and seek legal guidance when potential breaches of duty or confidence arise.
4. Be Prepared for Discovery Obligations
In litigation, the completeness and integrity of document production can shape the outcome. Employers (and their counsel) must preserve all relevant records and be transparent in disclosure. Courts take a dim view of strategic withholding of key documents.
5. Take Limitations Periods Seriously
Finally, employers must understand that limitation periods are strictly enforced. If a new claim emerges during the course of litigation—such as the discovery of additional misconduct—it must be acted on promptly. Even if the broader litigation is ongoing, separate claims may be statute-barred if not asserted within two years of discovery.
Employee Duties and Confidentiality: Lessons from Total Meter Services v. GVM Integration
The Total Meter Services Inc. v. GVM Integration decision is a powerful reminder that courts in Ontario take seriously the duties owed by employees, particularly when those employees misuse confidential information for personal gain. It also emphasizes that civil procedure rules and limitations statutes are not mere technicalities but substantive rules that can determine the outcome of high-stakes litigation.
Ontario employers are encouraged to review their employment agreements, confidentiality policies, and post-employment enforcement mechanisms in light of this decision. When legal disputes arise, timely action, clear documentation, and strategic use of limitation defences can make all the difference.
Toronto Employment Lawyer Assisting in Policies, Contracts & Severance Review
Staying compliant with Ontario’s rapidly evolving employment law is crucial for protecting your business. Haynes Law Firm offers proactive legal counsel, continually monitoring legislative changes and common law developments to ensure your policies, contracts, and documentation are robust and up-to-date. Don’t wait for a dispute to arise; let our team help you anticipate and address potential legal issues, minimizing your exposure to risk and keeping you ahead of the curve. Contact Haynes Law Firm online or by phone at 416-593-2731 to discuss how our experience can safeguard your organization.
