Executive Summary: Key Legal and Evidentiary Issues

• Enforceability of five-year non-competition and non-solicitation covenants in a share purchase agreement covering Ontario and New York.
• Heavy reliance on hearsay from unnamed or unwilling customer representatives, preventing the plaintiffs from establishing a strong prima facie case of breach.
• Failure to adduce admissible, first-hand evidence that the defendant solicited or competed for key customers such as Nations Capital and Di-Mond Trailer Sales Inc.
• Absence of concrete proof of loss of revenue, clients, or market share, undermining any claim of irreparable harm required for injunctive relief.
• Court’s application of the higher “strong prima facie case” test for interlocutory injunctions in restrictive covenant cases impacting a person’s ability to earn a living.
• Ongoing acknowledgement of the defendant’s confidentiality obligations, but no evidentiary basis to justify an injunction simply restating duties already owed under the SPA.

Background and share purchase transaction

Maksim Sotiri owned Makstrans Logistics Ltd., a licensed carrier operating its own trucking fleet and holding licences with the Ontario government and the United States Department of Transportation. One World Logistics Group Corp. operated in the same general industry but as a third-party logistics and freight brokerage provider, not as a carrier. On January 27, 2025, One World purchased all of the issued and outstanding shares of Makstrans from Mr. Sotiri for $100,000, of which only $30,000 was paid at closing. This transaction shifted control of Makstrans’ carrier operations into the hands of One World, which effectively acquired the company’s business platform and customer relationships through a modestly priced share deal. As part of the same commercial arrangement, One World employed Mr. Sotiri as a Logistics Manager at an annual salary of $120,000, integrating him into the merged enterprise and keeping his skills and relationships within the group.

The share purchase agreement and restrictive covenants

The parties documented the sale through a formal Share Purchase Agreement (SPA). That SPA contained several key restrictive provisions designed to protect the value of the business One World had acquired. First, it included a non-competition clause in section 4.03(a), under which Mr. Sotiri agreed that, for a five-year “Restricted Period” following closing, he would not directly or indirectly be employed by, provide services for, own an interest in, manage, operate, participate in, or assist any “Competing Business” that directly or indirectly competed with Makstrans. The restriction applied across the Province of Ontario and the State of New York, subject to specific carve-outs, such as small minority holdings (up to five percent) in publicly traded companies and continued ownership interests in Makstrans, One World, or their affiliates. In section 4.03(b), the SPA also contained a separate non-solicitation covenant. Throughout the same five-year period, and except as part of his employment with Makstrans, Mr. Sotiri undertook not to directly or indirectly solicit, initiate, or participate in discussions or otherwise contact Makstrans customers for the purpose of offering or selling products or services related to a Competing Business, nor intentionally induce such customers to amend or sever their business relationship with Makstrans. In addition, section 4.01 of the SPA imposed ongoing confidentiality obligations. From and after closing, Mr. Sotiri agreed to hold in confidence all written or oral information concerning Makstrans, subject to narrow exceptions where information was already public through no fault of his, or was lawfully acquired from other sources not bound by legal, contractual, or fiduciary obligations of secrecy. These clauses together formed the contractual framework the plaintiffs later asked the court to enforce through an injunction.

Employment termination and the start of litigation

Four months after the share transaction closed, One World terminated Mr. Sotiri’s employment. On June 9, 2025, One World and Makstrans commenced a civil action in the Ontario Superior Court of Justice. They alleged that Mr. Sotiri had breached the SPA, including the non-competition, non-solicitation, and confidentiality provisions, and had also breached his employment agreement. In response, Mr. Sotiri defended the claim and brought a counterclaim for wrongful termination. While the wrongful dismissal issues remain for trial, the immediate focus before Justice Robert Centa was the plaintiffs’ motion for interlocutory injunctive relief. Specifically, One World and Makstrans sought an injunction to enforce the SPA’s non-competition and non-solicitation terms for five years and to restrain any use or disclosure of Makstrans’ confidential information. The motion required the court to examine not only the restrictive covenants themselves, but also the quality of the plaintiffs’ evidence and their ability to show serious, irreparable harm if an injunction was not granted.

The request for an interlocutory injunction and applicable legal test

The plaintiffs moved under section 101 of the Courts of Justice Act and Rule 40 of the Rules of Civil Procedure for an interlocutory injunction pending trial. In doing so, they triggered the familiar three-part RJR-MacDonald framework: (1) the existence of a serious question to be tried; (2) proof of irreparable harm if relief was refused; and (3) a balance of convenience favouring the moving party. Because the plaintiffs sought to enforce restrictive covenants that would directly affect Mr. Sotiri’s ability to earn a living, the court held that they had to satisfy the more demanding standard of showing a “strong prima facie case” on the merits. In other words, they were required to demonstrate a strong likelihood, on the law and the evidence ultimately to be presented at trial, that they would succeed in proving the alleged breaches of the SPA. Justice Centa accepted, for purposes of the motion only, that the non-competition and non-solicitation provisions might be valid and enforceable despite defence arguments that they were overly broad and ambiguous. The court therefore assumed enforceability and turned squarely to whether the plaintiffs’ evidence met the strong prima facie case threshold, particularly on the alleged solicitation and competition.

Alleged breaches of non-competition and non-solicitation obligations

The plaintiffs claimed that, after his termination, Mr. Sotiri solicited key Makstrans customers, including Nations Capital Inc. and Di-Mond Trailer Sales Inc., offering to perform logistics services at reduced rates aimed at servicing their primary client Amazon. They argued that these acts both constituted solicitation and amounted to competition in breach of sections 4.03(a) and (b) of the SPA. However, all of their evidence on these core allegations came in through affidavits of principals and officers of the plaintiff companies—Richard Ellis and David Emond—who purported to relay what customer representatives supposedly told them about meetings and conversations with Mr. Sotiri. At first, Mr. Ellis did not even identify the representatives; he simply recounted what unnamed people at Di-Mond and Nations Capital allegedly said. In a later affidavit he named them, and Mr. Emond also described his conversations with specific individuals, but in each case they remained out-of-court declarants whose statements were being offered for the truth of their contents. Justice Centa held that this evidence was classic hearsay carrying all the traditional dangers: the statements were unsworn, the declarants were not subject to cross-examination, and the court could not assess whether Mr. Ellis and Mr. Emond accurately reported what was said. The plaintiffs did not bring themselves within any recognized common law exception or the principled hearsay exception. Importantly, they had already been granted an adjournment specifically to try to cure this evidentiary problem, yet they failed to file any first-hand affidavits from Nations Capital or Di-Mond witnesses. The record even suggested that those customer representatives were unwilling to participate in the litigation or provide sworn evidence at all. In light of this, the court placed no weight on the hearsay statements and concluded that the plaintiffs had not shown a strong likelihood that they could prove at trial that Mr. Sotiri had actually solicited or competed for those customers. On the other side of the record, Mr. Sotiri denied contacting or soliciting Di-Mond or any other customer in a way that would breach the SPA, and the court did not accept that any alleged admissions in cross-examination overcame the weakness of the plaintiffs’ evidentiary foundation. Without reliable, admissible proof of breach, the strong prima facie case standard was not met.

Alleged breach of the confidentiality provisions

The plaintiffs also pointed to a separate incident as evidence of a breach of confidentiality. On September 8, 2025, Makstrans took possession of a truck that had been purchased by Mr. Sotiri with his own funds but registered in the company’s name. In that vehicle, Makstrans found several pro forma invoices and trailer ownership documents which contained confidential information about pricing and supply chain sequencing. Relying on section 4.01 of the SPA, One World and Makstrans argued that this discovery showed that Mr. Sotiri had retained confidential documents post-closing in violation of his duty to keep Makstrans’ information secure. In response, Mr. Sotiri admitted that the documents were in the truck but stated that he had forgotten they were there and denied using them after leaving Makstrans. Importantly, there was no evidence that he had in fact accessed or exploited the documents to compete, nor that any business harm flowed from their inadvertent presence in the vehicle. The plaintiffs also acknowledged that there was no evidence that he possessed any other confidential information. Through counsel, he reaffirmed that he remained bound by all confidentiality obligations in the SPA and undertook to turn over any additional documents he might later discover. Justice Centa accepted that the plaintiffs were entitled to expect compliance with confidentiality duties but held that this background did not justify an injunction simply repeating obligations that already existed in contract, especially where no actual misuse or irreparable harm had been shown.

Failure to prove irreparable harm and the court’s refusal to grant relief

Beyond the weakness of their proof on liability, the plaintiffs also failed to meet the second key requirement for an interlocutory injunction: irreparable harm. The court emphasized that irreparable harm is harm that cannot adequately be compensated by damages or quantified in monetary terms, and that the moving party must provide clear, non-speculative evidence—often including financial records—to show that such harm is likely without an injunction. Here, One World and Makstrans offered only speculative assertions of potential loss of customers and future business. Six months after launching the action, they were unable to identify a single dollar of lost revenue, a single lost customer, or any measurable erosion of their market share linked to Mr. Sotiri’s conduct. On cross-examination, Mr. Ellis confirmed that customers such as Di-Mond, Nations Capital, and Amazon had not cancelled or terminated any contracts with the plaintiffs, and he admitted that he did not know whether the companies had suffered any loss of business. The plaintiffs tried to rely on an answer to an undertaking that set out some figures for work done in various years, but the court found that response inadequate: it related to proof of contracts rather than losses, contained no financial statements, did not connect any drop in business to Mr. Sotiri as opposed to broader market conditions, and was unsupported by underlying documentation that could be examined by the defence. In the absence of clear, reliable evidence that the alleged breaches had caused or would cause irreparable harm, Justice Centa concluded that this branch of the RJR-MacDonald test was not satisfied. Given the plaintiffs’ failure to establish either a strong prima facie case or irreparable harm, there was no need for the court to consider the balance of convenience. The motion for an interlocutory injunction was dismissed, and Mr. Sotiri remained free, subject to whatever contractual obligations may ultimately be adjudicated at trial, to continue earning a living without the court’s interim intervention.

Outcome, successful party, and monetary consequences

Justice Centa’s disposition underscores that, while restrictive covenants in a share purchase agreement may be assumed enforceable on an interlocutory motion, they will not be judicially enforced through interim orders unless supported by admissible, cogent evidence of actual breach and concrete, non-speculative proof of harm. On this motion, the plaintiffs’ reliance on hearsay and their inability to demonstrate any loss of revenue, clients, or market share meant they could not meet the heightened standard for injunctive relief. The court therefore dismissed the motion for an injunction, leaving all underlying contract and wrongful dismissal claims to be resolved at trial and reiterating only that Mr. Sotiri remains bound by his existing obligations under the SPA. In practical terms, the successful party on this motion is the defendant, Maksim Sotiri. The endorsement does not fix any amount for damages or costs; instead, the judge asked the parties to attempt to agree on costs and, failing agreement, to submit short written costs submissions by specified dates. As a result, based on this decision alone, no specific monetary award, costs figure, or damages amount has yet been ordered, and the total amount in favour of the successful party cannot be determined from the ruling.