Whose Relationship Is It Anyways?

This case deals with the aftermath of a breakdown in the relationship between an insurer and a brokerage. Since 2014, BrokerLink has marketed and sold Commonwell insurance products; however, BrokerLink terminated this agreement in late 2025. In response, Commonwell wrote to some of its policyholders to advise them of their choice to remain with Commonwell and provided a link to a webpage with contact information for Commonwell-affiliated brokers.

BrokerLink brought a motion for an injunction that would prohibit Commonwell from communicating with any BrokerLink clients and require Commonwell to change the content of webpages linked in the disputed correspondence to direct customers to contact BrokerLink.

The Decision

The court conducted an analysis based on the test for an interlocutory injunction set out by the Supreme Court of Canada in RJR MacDonald v Canada (Attorney General). This test required BrokerLink to demonstrate the following:

1. There was a serious issue to be tried;
2. BrokerLink would suffer irreparable harm if the injunction was not granted; and
3. The balance of convenience weighed in favour of granting the injunction.

Ultimately, while the Court agreed that there was a serious issue to be tried, it found that BrokerLink had failed to demonstrate that it would suffer irreparable harm and that the balance of convenience weighed against granting the injunction.

There was a serious issue to be tried

BrokerLink took the position that Commonwell had breached a section of their contract setting out the process for communications with policy holders following termination of the agreement.According to this process, the broker would notify the policy holders that their Commonwell policies would be replaced by a policy with an alternate insurer. If the broker failed to do this, the insurer could contact the policyholders. BrokerLink argued that, because it provided the notification required by the agreement, Commonwell was prohibited from communicating with the policyholders.

Commonwell argued that the disputed section of the contract did not prohibit communication with the policyholders. Rather, it was a consumer protection clause to ensure that somebody informed the insured of the change. Furthermore, it argued that BrokerLink's interpretation of the disputed section would prevent it from correcting misleading communications sent by BrokerLink. It pointed out that some of BrokerLink's communications seemed to imply that the policyholder did not have the option of staying with Commonwell.

The court found that both parties had arguable positions; as such, BrokerLink had established that there was a serious issue to be tried.

BrokerLink had not demonstrated irreparable harm

BrokerLink argued that it would suffer irreparable harm if the injunction was not issued, as it would lose business opportunities and experience damage to customer relationships and reputational harm. The court ultimately concluded that BrokerLink had not provided sufficient evidence to support the alleged harm.

BrokerLink conceded that there was attrition in the industry and could not prove that any customers had left because of anything Commonwell did. Furthermore, it could not point to anything in the communications from Commonwell that disparaged BrokerLink or said anything untrue.

The court found that BrokerLink's claim to irreparable harm was undermined by the fact that it had waited approximately two months after being told of Commonwell's intention to make any objection to the communication.

The balance of convenience weighed in favour of Commonwell

The balance of convenience factor considers which party would suffer greater harm if the injunction were granted or refused. Where the harm to each party is equal, the status quo is to be preserved.

In the absence of any irreparable harm to BrokerLink, there was little weighing in favour of granting the injunction. The court specifically noted that BrokerLink could continue communicating with its policyholders regardless of whether the injunction was granted.

On the other hand, there were several factors weighing the balance of convenience in favour of refusing the injunction. The injunction would prevent Commonwell from communicating with its policyholders, even to correct incomplete information contrary to their interests. Additionally, Commonwell would be prevented from complying with its regulatory obligations, which included providing timely and transparent information to its members.

In applying the balance of convenience test, the court also considered the interests of the policyholders, whom it considered to be silent parties in the case. Specifically, it considered the special relationship between a mutual insurance company and its members. As members, Commonwell's policyholders did not only risk impairment of their ability to make informed decisions about their coverage, but they also risked losing their ownership rights. In response to BrokerLink's submission that the relationship belonged to the broker, the court noted that "it is the policyholder who chooses the broker and the insurance provider."

The court concluded that the balance of convenience weighed in favour of Commonwell and dismissed the motion. In doing so, the injunction was not granted.

Key Takeaways

This decision is an interlocutory order, meaning that it does not make a final determination on the merits of either party's arguments with respect to the appropriateness of Commonwell's communications. However, it provides important insight on an insurer's obligations upon the breakdown of a relationship with a broker. An insurer must be mindful of balancing its contractual and regulatory obligations, as well as its duty to its members.

Even where a policyholder is not a party to a dispute, the court will still consider their interests in the context of an interlocutory injunction. This is especially important in the context of mutual insurers, where insureds are not only policyholders, but also owners.

See BrokerLink Inc. v The Commonwell Mutual Insurance Group, 2026 ONSC 20 (CanLII), https://canlii.ca/t/khcvw

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