Duelling Dentists: "Non-Compete" Clauses In Commercial Transactions

In 2017, one dentist bought all the shares of another dentist's Hamilton practice. As part of the deal, the seller dentist agreed to a "non-compete" clause preventing him from practicing dentistry within 15 km of his former practice for five years. Then, in 2020, he began working at a dental practice 3.3 km away, taking the position that the non-compete clause was unenforceable.

The parties took this issue to court, where the purchaser dentist prevailed. The trial judge held that in a commercial context — as distinct from an employment context¹ — a non-compete clause is presumed to be lawful, and the seller dentist had not provided evidence that the clause was unreasonable. The seller dentist appealed to the Ontario Court of Appeal, arguing that the trial judge incorrectly "reversed the burden of proof".