



COURT OF APPEAL FOR ONTARIO

CITATION: Donaldson Travel Inc. v. Murphy, 2016 ONCA 649

DATE: 20160830

DOCKET: C61838

Feldman, Simmons and Lauwers JJ.A.

BETWEEN

Donaldson Travel Inc.

Plaintiff (Appellant)

and

Mary
    Murphy, Peter Van Der Heyden

and
    1631318 Ontario Inc.

Defendants (Respondents)

John W. McDonald, for the appellant

Gary E. Flaxbard, for the respondent Mary Murphy

Patricia J. Forte, for the respondents Peter Van Der
    Heyden and 1631318 Ontario Inc.

Heard: August 22, 2016

On appeal from the order of Justice David A. Broad of the
    Superior Court of Justice, dated February 5, 2016 and the cost order dated
    February 26, 2016, with reasons reported at 2016 ONSC 740 and 2016 ONSC 1396.

ENDORSEMENT

[1]

The appellant travel agency appeals from an order made
    on a summary judgment motion dismissing its claims for breach of contract,
    misappropriation of confidential information, inducing breach of contract and
    interference with contractual relations against a former employee travel agent
    and her new travel agency employer.

[2]

The issues on appeal boil down to whether
    the motion judge erred: i) in interpreting the restrictive covenant in the
    respondent former employees employment contract with the appellant as a
    non-competition clause as opposed to a non-solicitation clause and in therefore
    finding it unreasonable and unenforceable; and ii) in finding that the former
    employee had not misappropriated the appellants confidential information.

[3]

We see no error in the motion judges
    finding that the restrictive covenant was a non-competition clause. The
    covenant at issue provides as follows:

[The personal respondent] agrees that in the
    event of termination or resignation that she will not solicit or accept
    business from any corporate accounts or customers that are serviced by [the
    appellant], directly, or indirectly.

[4]

Based primarily on the language or accept
    business the motion judge found that the clause at issue restricts competition
    and is not merely a non-solicitation clause.

[5]

We see no error in this conclusion. The motion
    judges interpretation was available based on the plain wording of the clause. The
    fact that the appellant abandoned previous employment contracts containing more
    restrictive non-competition clauses and that its policy manual required only
    that employees sign a non-solicitation agreement does not change this
    conclusion. We see no basis on which to interfere with the motion judges
    finding. Further, given that the restrictive covenant is a non-competition
    clause (as opposed to a non-solicitation clause) and also because it contains
    no temporal limitation, there is no basis on which to interfere with the motion
    judges conclusion that the clause is unreasonable and therefore unenforceable:
J.G. Collins Insurance Agencies Ltd. v. Elsley
,
    [1978] 2 S.C.R. 916, at para. 19;
H.L. Staebler Co. v. Allan
, 2008 ONCA 576, 92 O.R. (3d) 107, at para. 36.  The appellants
    arguments concerning severance of the phrase or accept business have no merit:
Shafron v. KRG Insurance Brokers (Western) Inc.
,
2009 SCC 6,
[2009] 1 S.C.R.
    157 at para. 36.

Finally, and in any event, we note
    that the record before the motion judge failed to establish that the departed
    employee had solicited any of the appellants clients.

[6]

As for the misappropriation of confidential
    information issue, the motion judge found that the appellants evidence failed
    to demonstrate that the departed employee shared information with her new
    employer that had a quality of confidence. On the significant issue of
    whether the departed employee had disclosed sales volumes and revenues
    associated with particular client names, the motion judge found that the
    appellants evidence of what the departed employee had said to a current
    employee was not inconsistent with the respondents evidence that the departed
    employee had disclosed only her own annual sales volumes.

[7]

The motion judges findings were available on
    the record before him  as was his underlying expectation that the appellant
    had put its best foot forward in terms of the evidence. While the appellant
    objects that the motion judge erred in failing to accede to its request to
    conduct a mini-trial, the appellant did not cross-examine the respondents witnesses
    on their affidavits. In these circumstances, the appellants assertion that
    cross-examination would have yielded inferences beneficial to the appellant and
    weaknesses in the respondents case lacks any foundation.

[8]

Given that the appellants claims that the motion judge erred in finding
    that the departed employee breached her employment contract and disclosed
    confidential information fail, the appellants claims that the motion judge erred
    in finding that the departed employees new employer induced such a breach or
    participated in such disclosure also fail.

[9]

In its factum, the appellant sought leave to appeal the motion judges
    costs award, relying in large measure on the asserted novelty of the issues
    relating to the restrictive covenant. Leave to appeal is denied. The appellant
    failed to meet the high threshold for obtaining leave to appeal a costs award.

[10]

Costs of the appeal are to the respondents on a partial indemnity scale
    fixed in the amount of $7,500 each, inclusive of disbursements and applicable
    taxes.

K.  Feldman
    J.A.

Janet Simmons
    J.A.

P. Lauwers J.A.


