Court and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20210607 DOCKET: C69099

Rouleau, Hoy and van Rensburg JJ.A.

BETWEEN

Donald Conrad Manicom, Conrad Refrigerated Trucking Inc. and Manicom Holdings Inc. Applicants (Appellants/ Respondents by way of cross-appeal)

and

Michele Ann Manicom Respondent (Respondent/ Appellant by way of cross-appeal)

Counsel: Michael A. Polvere and James R. Leslie, for the appellants/respondents by way of cross-appeal J. Douglas Skinner and Justin Newman, for the respondent/appellant by way of cross-appeal

Heard and released orally: June 4, 2021 by video conference

On appeal from the order of Justice Jonathon C. George of the Superior Court of Justice, dated February 3, 2021, with reasons reported at 2021 ONSC 855, and from the costs order, dated March 29, 2021.

Reasons for Decision

[1] The individual appellant, Donald Conrad Manicom, and the respondent are separated spouses engaged in a matrimonial dispute. Each owns 50% of the shares of two corporations (the “Corporations”). The respondent refused to complete the sale of her shares in the Corporations to the appellant on the scheduled closing date, asserting that she had not agreed to the Non-Solicitation and Non-Competition Agreement (“NCA”) which formed part of the closing documents. Mr. Manicom was unwilling to purchase the respondent’s shares without the NCA.

[2] Mr. Manicom and the Corporations sought an order for specific performance, compelling the respondent to execute the documents, including the NCA, necessary to complete the sale of her shares in the Corporations to Mr. Manicom. The application judge held that, on the evidence before him, he could not find that the respondent had agreed to the NCA. Accordingly, he dismissed the application.

[3] The application judge awarded costs to the respondent in the all-inclusive amount of $9000.

[4] Mr. Manicom and the Corporations appeal the order dismissing their application. The respondent seeks leave to cross-appeal the order as to costs.

[5] The appellants repeat arguments that they made to the application judge, principally that, objectively, the respondent would have expected that she would be required to enter into a non-solicitation and non-competition agreement in connection with the sale of her shares and that the terms of the agreement drafted by them were reasonable. They also say that the fact that the parties’ counsel engaged in negotiations of the terms of the NCA after the scheduled closing date shows that the parties had agreed in principle that there would be a non-solicitation and non-competition agreement with a five-year term. We note that the appellants concede that the parties did not agree as to the end date of the NCA in those negotiations.

[6] The application judge accepted that a non-solicitation and non-competition agreement is a standard term in a transaction such as this and that “it is hard to imagine that the Respondent did not and does not know this.” However, the fact was that it was not a topic of discussion during the negotiation period and the best evidence was that the respondent had not discussed such an agreement with her counsel before the closing date. The application judge noted that there was no written agreement and no evidence of a verbal agreement. He found that neither the respondent’s lawyer’s receipt and presentation of the closing documents to the respondent nor the lawyers’ exchanges about the NCA after the scheduled closing date gave rise to a valid and enforceable contract.

[7] There is no basis for this court to interfere with the application judge’s finding that the respondent had not agreed to the NCA.

[8] As to the cross-appeal as to costs, we agree with the respondent that to the extent that the application judge may have taken into account the respondent’s decision not to enter into the NCA on the appellants’ terms, the application judge misdirected himself. However, in all the circumstances, we consider that the amount of the costs awarded was reasonable.

[9] Accordingly, we dismiss the appeal and deny leave to appeal the order as to costs. The respondent shall be entitled to costs in the agreed amount of $10,000.

“Paul Rouleau J.A.”

“Alexandra Hoy J.A.”

“K. van Rensburg J.A.”