COURT OF APPEAL SUMMARIES (JUNE 3 – June 7)

In RH20 North America Inc. v. Bergmann, the Court upheld the motion judge’s decision striking claims on the basis that they disclosed no reasonable cause of action, and refusing to stay the claim in favour of arbitration. The party moving to stay had taken steps in the action and was therefore found to have waived the arbitration clause.

Farrell v. Riley was a breach of contract case involving the sale of book of business between a financial adviser and portfolio manager. The Court reviewed the law relating to the intention to create binding legal relations and whether all the essential terms of the contract had been agreed upon.

Other topics covered included the contractual interpretation of a supply agreement involving mining, wrongful dismissal and extension of time to appeal and stay pending appeal in the family law context.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Collins v. Tiveron, 2024 ONCA 447

Keywords: Family Law, Child Support, Civil Procedure, Appeals, Jurisdiction, Joinder, Extension Of Time, Stay Pending Appeal, Courts of Justice Act, R.S.O. 1990, c. C-43 s. 19(1)(a.1), 6(2), 19(4), 7(3), Children’s Law Reform Act, R.S.O. 1990, c. C.12. s. 73(1)(a), Rules of Civil Procedure, rr. 61.06(1), 56.01(1), Denomme v. McArthur, 2013 ONCA 694, D.G. v. A.F., 2014 ONCA 436, Teitler v. Dale, 2021 ONCA 577, Leybourne v. Powell, 2023 ONCA 421, Enbridge Gas Distributions Inc. v Froese, 2013 ONCA 131, Sabatino v. Posta Ital Bar Inc., 2022 ONCA 208, Fontaine v. Canada (Attorney General), 2021 ONCA 931, Jadhav v. Jadhav, 2020 ONCA 19; Henderson v. Henderson, 2014 ONCA 571, BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Abu-Saud v. Abu-Saud, 2020 ONCA 824

Giacomodonato v. PearTree Securities Inc, 2024 ONCA 437

Keywords: Contracts, Employment, Wrongful Dismissal, Damages, Compensatory Damages, Employment Standards Act, 2000, S.O. 2000, c. 41, Techform Products Ltd. v. Wolda, (2001), 56 O.R. (3d) 1 (C.A.), Holland v. Hostopia Inc., 2015 ONCA 762, Hobbs v. TDI Canada Ltd. (2004), 246 D.L.R. (4th) 43 (Ont. C.A.), Francis v. Canadian Imperial Bank of Commerce (1994), 21 O.R. (3d) 75 (C.A.), Loranger v. Haines (1921), 50 O.L.R. 268 (C.A.), Stott v. Merit Investment Corp. (1988), 63 O.R. (2d) 545 (C.A.), Ronald Elwyn Lister Ltd. v. Dunlop Canada Ltd., [1982] 1 S.C.R. 726, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Algra v. Comrie Estate, 2023 ONCA 811, London Eco-Roof Manufacturing Inc. v. Syson, 2020 ONSC 3101

Kinross Gold Corporation v. Cyanco Company, LLC, 2024 ONCA 441

Keywords: Contracts, Supply Agreements, Interpretation, Commercial Reasonableness, Civil Procedure, Appeals, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

RH20 North America Inc. v. Bergmann, 2024 ONCA 445

Keywords: Contracts, Arbitration Agreements, Torts, Conspiracy, Intentional Interference with Contractual Relations, Intentional Interference with Economic Relations (Unlawful Means Tort), Civil Procedure, Jurisdiction, Arbitrations, Stay, Waiver, Striking Pleadings, No Reasonable Cause of Action, International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5, s. 9, Model Law on International Commercial Arbitration, art. 8(1), Arbitration Act, R.S.B.C. 1996, c. 55, ss. 15(1), 15(2), Arbitration Act, S.B.C. 2020, c. 2, ss. 7(1), 7(2), Arbitration Act, 1991, S.O. 1991, c. 17, s. 7, Arbitration Act, R.S.A. 2000, c. A-43, s. 7, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Can. T.S. 1986 No. 43, art. II(3), Rules of Civil Procedure, r. 21.01.(1)(b), A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, PMC York Properties Inc. v. Siudak, 2022 ONCA 635, RWDI Air Inc. v. N-SCI Technologies Inc., 2015 ONCA 817, Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260, ABN Amro Bank Canada v. Krupp Mak Maschinenbau GmbH (1996), 135 D.L.R. (4th) 130 (Ont. Div. Ct.), Fraser v. 4358376 Canada Inc., 2014 ONCA 553, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Conconi Developments Ltd. v. DR4 Developments Ltd., 2014 BCSC 1101, Fathers of Confederation Buildings Trust et al. v. Pigott Construction Co. Ltd. (1974), 44 D.L.R. (3d) 265 (P.E. S.C.), CSI Toronto Car Systems Installation Ltd. v. Pittasoft Co., Ltd., 2021 ONSC 5117

Farrell v. Riley, 2024 ONCA 449

Keywords: Contracts, Intention to Create Binding Legal Relations, Essential Terms, Unjust Enrichment, Damages, Mitigation, Civil Procedure, Appeals, Standard of Review, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53,  Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, Moore v. Sweet, 2018 SCC 52, Bawitko Investments Ltd. v. Kernels Popcorn Limited (1991), 53 O.A.C. 314 (C.A.), Olivieri v. Sherman, 2007 ONCA 491, Alkin Corporation v. 3D Imaging Partners Inc., 2020 ONCA 441, Angus v. CDRW Holdings Ltd., 2023 BCCA 330

Short Civil Decisions

Bogue v. Law Society of Ontario, 2024 ONCA 452

Keywords: Regulated Professions, Lawyers, Discipline, Civil Procedure, Frivolous, Vexatious, Abuse of Process, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Administration of Justice Act, R.S.O. 1990, c. A.6, s. 4.10, Rules of Civil Procedure, rr. 2.1.01, 2.1.02

CIVIL DECISIONS

Collins v. Tiveron, 2024 ONCA 447

[Paciocco J.A.]

Counsel:

E. C., Acting in Person

K.R., as agent for the Respondent, A.T.

Keywords: Family Law, Child Support, Civil Procedure, Appeals, Jurisdiction, Joinder, Extension Of Time, Stay Pending Appeal, Courts of Justice Act, R.S.O. 1990, c. C-43 s. 19(1)(a.1), 6(2), 19(4), 7(3), Children’s Law Reform Act, R.S.O. 1990, c. C.12. s. 73(1)(a), Rules of Civil Procedure, rr. 61.06(1), 56.01(1), Denomme v. McArthur, 2013 ONCA 694, D.G. v. A.F., 2014 ONCA 436, Teitler v. Dale, 2021 ONCA 577, Leybourne v. Powell, 2023 ONCA 421, Enbridge Gas Distributions Inc. v Froese, 2013 ONCA 131, Sabatino v. Posta Ital Bar Inc., 2022 ONCA 208, Fontaine v. Canada (Attorney General), 2021 ONCA 931, Jadhav v. Jadhav, 2020 ONCA 19; Henderson v. Henderson, 2014 ONCA 571, BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Abu-Saud v. Abu-Saud, 2020 ONCA 824

facts:

The appellant, Mr. C, filed a Notice of Appeal dated March 21, 2024, of Smith J.’s Interim Child Support Appeal Decision. On March 28, 2024, Mr. C filed a Supplementary Notice of Appeal (Notice of Combined Appeal) dated March 25, 2024, from the Final Parenting Decision, requesting that this appeal be combined with the appeal of the Interim Child Support Appeal Decision. Mr. C also prepared a “Proposed” Notice of Appeal dated May 13, 2024, relating to the proposed Final Parenting Decision appeal. Mr. C initiated two motions.

In the first motion, dated May 6, 2024, Mr. C sought to stay orders made by Baker J. and Smith J. relating to the Interim Child Support Appeal Decision. In the second motion, dated May 14, 2024, Mr. C requested an order extending the time to appeal the Final Parenting Decision made by Baker J., an order combining the two appeals, and an order granting a stay pending appeal of the Final Parenting Decision.

issues:

(1) Should the Court stay the orders made by Baker J. and Smith J. relating to the Interim Child Support Appeal Decision?

(2) Should the Court grant an extension of time to appeal the Final Parenting Decision?

(3) Should the Court combine the two appeals?

(4) Should the Court grant a stay pending appeal of the Final Parenting Decision?

holding:

Motions dismissed.

reasoning:

(1) No. The Court denied the motion requesting a stay of the orders made by Baker J. and Smith J. relating to the Interim Child Support Appeal Decision. The test that governs motions to stay pending appeal is well-established, BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, the Court considered and balanced the three-part test developed in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, for interlocutory injunctions:

(1) Whether the appeal raises a serious question to be tried.

(2) Whether the moving party will suffer irreparable harm if the stay is refused.

(3) Whether the balance of convenience favours granting or refusing the stay.

The first factor weighed strongly against Mr. C, given that the jurisdiction of the Court to hear the appeal was doubtful. The second factor also weighed against the requested stay. Finally, Mr. C did not satisfy the Court that the third factor, the balance of convenience, favoured him. The Court proceeded on the basis that the children will benefit from the ordered increase in support payments. The balance of convenience did not advance Mr. C’s case for a stay. The motion for the stay of the orders arising from the Interim Child Support Appeal Decision was denied.

(2) No. The Court denied Mr. C’s request for an extension of time to file a Notice of Appeal of the Final Parenting Decision. In civil litigation, the test for granting motions for extension of time requires a determination of whether an extension of time is in the interests of justice, bearing in mind (1) whether the moving party formed the requisite intention to appeal within the relevant time period, (2) the length of and explanation for the delay, (3) any prejudice to the responding party, and (4) the merits of the proposed appeal: Enbridge Gas Distributions Inc. v Froese, 2013 ONCA 131.

In family law cases affecting the rights of children, the overarching inquiry into whether the extension is in the interests of justice is whether the extension would be in the best interests of the children: Denomme v. McArthur, 2013 ONCA 694, D.G. v. A.F., 2014 ONCA 436, Teitler v. Dale, 2021 ONCA 577, and Leybourne v. Powell, 2023 ONCA 421. The Court denied the motion for extension of time because of concerns arising from the other grounds, beginning with the merits of the proposed appeal. Whatever the merits of underlying legal arguments may be, the appeal from a final family law order made in the Ontario Court of Justice would ordinarily be brought not to the Court, but to the Divisional Court, pursuant to s. 19(1)(a.1) of the Courts of Justice Act, and s. 73(1)(a) of the Children’s Law Reform Act. Mr. C sought to overcome this problem by asking that this appeal be joined with the appeal of the Interim Child Support Appeal Decision pursuant to s. 6(2) of the Courts of Justice Act.

The primary problem with a joinder request was that there were jurisdictional problems with bringing an appeal of the Interim Child Support Appeal Decision to the present Court as well. There was therefore no procedural avenue that should result in this appeal being heard in the Court. An appeal is meritless where the appeal court has no jurisdiction to hear it: see Sabatino v. Posta Ital Bar Inc., 2022 ONCA 208. In addition, the Court found that granting of an extension of time to appeal was not in the best interests of the children, who would benefit from finality. Moreover, Mr. C’s appeal of the Final Parenting Decision had not been filed as required by the rules of the Court.

(3) No. The Court decided not to extend the time to file an appeal of the Final Parenting Order or combine it with the jurisdictionally questionable appeal of the Interim Child Support Appeal Decision.

(4) No. The Final Parenting Order did not impose an externally crafted arrangement on Mr. C. It reflected the agreement proposed and served the rights of the children. A stay of this order, was found not to be in the interests of justice.

 Giacomodonato v. PearTree Securities Inc, 2024 ONCA 437

[Harvison Young, Sossin, and Gomery JJ.A.]

Counsel:

J. Bell, N. Butz and M. Torgov, for the appellant/respondent by cross-appeal

P. Veel, A. Quinn and M. Boljevic, for the respondents/appellants by cross-appeal

Keywords: Contracts, Employment, Wrongful Dismissal, Damages, Compensatory Damages, Employment Standards Act, 2000, S.O. 2000, c. 41, Techform Products Ltd. v. Wolda, (2001), 56 O.R. (3d) 1 (C.A.), Holland v. Hostopia Inc., 2015 ONCA 762, Hobbs v. TDI Canada Ltd. (2004), 246 D.L.R. (4th) 43 (Ont. C.A.), Francis v. Canadian Imperial Bank of Commerce (1994), 21 O.R. (3d) 75 (C.A.), Loranger v. Haines (1921), 50 O.L.R. 268 (C.A.), Stott v. Merit Investment Corp. (1988), 63 O.R. (2d) 545 (C.A.), Ronald Elwyn Lister Ltd. v. Dunlop Canada Ltd., [1982] 1 S.C.R. 726, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Algra v. Comrie Estate, 2023 ONCA 811, London Eco-Roof Manufacturing Inc. v. Syson, 2020 ONSC 3101

facts:

The appellant, DG, appealed the amount of damages he was awarded in a judgment finding that he was wrongfully dismissed by the respondents. DG was awarded compensatory and punitive damages totalling $ 671,765, including interest, as well as partial indemnity costs of $ 830,761.75, including disbursements and HST. PearTree cross-appealed to seek to vary the costs award against it.

DG, who is a successful investment banker with expertise in the mining sector, was recruited by PT in early 2016 to serve as President and co-head of banking. The trial judge found that the parties entered into a binding employment contract in April 2016, and subsequently negotiated and agreed to a second employment contract in July 2016. The respondents terminated DG’s employment without cause in January 2018. DG contended that the trial judge erred in calculating wrongful dismissal damages based on the terms of the second contract rather than the first.

issues:

(1) Did the trial judge err in law by calculating the wrongful dismissal damages owed to DG based on the terms in the second contract rather than the first contract?

(2) Should the respondents have been granted leave to appeal the trial judge’s costs award in their cross-appeal?

holding:

Appeal and cross-appeal dismissed.

reasoning:

(1) No. To succeed on this ground of appeal, the appellant needed to satisfy the Court that the trial judge made a series of errors of law and mixed law and fact in finding that the second contract was valid, binding, and enforceable. He did not meet that burden.

The Court found that trial judge did not err in finding that there was fresh consideration for the second contract. He correctly recognized that employers do not have the right to alter a contract unilaterally unless something “new and of benefit” (beyond continued employment) flows to the employee in exchange for their agreement to the amended terms. As the trial judge also correctly observed, however, courts are only concerned with the existence, rather than the adequacy, of consideration. The trial judge found that there was fresh consideration for DG’s agreement to the second contract: a $ 40,000 payment by PearTree to DG to cover his costs of severing his contract with his previous employer, and an entitlement to two weeks additional paid vacation time. The Court was not persuaded that the trial judge erred in finding that the $ 40,000 payment formed part of the negotiations for the second contract. Although the trial judge mistakenly stated that PearTree made the payment in 2016 as opposed to 2017, his reasoning was premised primarily on the fact that the parties referenced this payment in discussing the second contract. In any event, the trial judge found that the additional vacation entitlement by itself constituted fresh and more than de minimis consideration. DG cited no adequate authority for his contention that the trial judge was required to conduct a comparative analysis of the overall advantages and disadvantages of the first and second contract in assessing whether there was fresh consideration for the latter. The Court also rejected his suggestion that the trial judge disregarded the power imbalance between the parties.

(2) No. Costs awards are highly discretionary. The Court noted that it does not set aside an award unless it is based on an error in principle or is plainly wrong. The trial judge applied the correct principles and took appropriate factors into account in fixing costs. He made many findings unfavourable to PearTree. He found that PearTree unnecessarily increased the costs of the proceeding, that it did not comply with its discovery obligations in a timely way, and that its counterclaim, including its claim for punitive damages, was “obviously meritless”. The trial judge concluded that, having invited the litigation, PearTree conducted it in “an unforgiving, scorched earth, and bare-knuckle manner”, missing “no opportunity to malign DG”. These findings amply justified the partial indemnity costs award.

Kinross Gold Corporation v. Cyanco Company, LLC, 2024 ONCA 441

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

B. Brooksbank and D.Chu, for the appellants

D. Murdoch, S. Dukesz and E. Tessier, for the respondent

Keywords: Contracts, Supply Agreements, Interpretation, Commercial Reasonableness, Civil Procedure, Appeals, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

The appellants, KG Corporation, a global gold mining corporation, along with two of its subsidiaries, were in dispute with the respondent, CC LLC, over the supply of sodium cyanide. Sodium cyanide was either delivered in tankers as liquid or solid sodium cyanide. Where a mine received liquid sodium cyanide, it was pumped to the mine’s storage tanks and later diluted. Where a mine received solid sodium cyanide it had to first be dissolved at the mine to a 30 percent solution, and then stored in the mine’s storage tanks.

CC had entered into two contracts with KG. One contract was entered into with KG and the two appellant subsidiary mines for the supply of liquid sodium cyanide to those two mines for as long as they were in operation or a “life of mine” term (the “Liquid Agreement”). The other contract was entered into with KG and certain other mines owned by KG for the supply of solid sodium cyanide for a 5-year term (the “Solid Agreement”).

On May 11, 2020, KG issued a request for proposals for the supply of solid sodium cyanide to all of its active mines, including the two appellant mines. CC objected to this, on the basis that it had a contractual right to provide the sole supply of liquid sodium cyanide for the two appellant mines. KG then brought an application in the Superior Court for a declaration that the Liquid Agreement provided CC with the right to the sole supply of liquid sodium cyanide only, and not solid cyanide. The application was later converted to an action. The trial judge dismissed the action. He concluded that the Liquid Agreement obligated KG to purchase sodium cyanide exclusively from CC for the life of mine term for each of the two appellate mines.

issues:

(1) Did the trial judge err in failing to consider the Liquid Agreement as a whole and to give liquid sodium cyanide a consistent meaning?

(2) Did the trial judge err in failing to interpret the Liquid Agreement in light of surrounding circumstances?

(3) Did the trial judge err in failing to apply the “related contracts” principles of contractual interpretation?

(4) Did the trial judge err in failing to assess commercial reasonableness in an objective manner?

holding:

Appeal dismissed.

reasoning:

Reasoning:

(1) No. On the trial judge’s reading of the Liquid Agreement, “liquid sodium cyanide” indicated sodium cyanide in a solution (as opposed to solid form), regardless of the concentration. The complexity of the contract, specific to the gold mining industry in Nevada, required expert understanding, and the trial judge had access to expert testimony to make factual determinations. As per the principles outlined in Sattva, such interpretations were subject to deferential review by appellate courts unless a palpable and overriding error was demonstrated. Since KG failed to establish such an error, the original interpretation stood.

(2) No. The trial judge clearly had the entirety of the factual matrix in view when interpreting the contract. The trial judge’s reasons were lengthy, detailed, and demonstrated a careful command of the evidence before him, including all the circumstances leading up to the negotiation of the contract.

(3) No. The two contracts were not made between the same corporate entities. While the agreements both involved CC and KG, the other mining entities involved were different. Additionally, the Liquid Agreement contained an “entire agreement” clause that expressly excluded any contemporaneous written agreements and stated that there were no collateral contracts.

(4) No. It was clear from the trial judge’s reasons that he had assessed commercial reasonableness objectively and had considered KG’s perspective on commercial reasonableness. KG was required to identify a palpable and overriding error in the trial judge’s analysis and it had not done so.

RH20 North America Inc. v. Bergmann, 2024 ONCA 445

[Gillese, Brown and Paciocco JJ.A.]]

Counsel:

A. Tardif and J. Plotkin, for the appellant/respondent by way of cross-appeal

A. Stephens and J. Pei, for the respondents/appellant by way of cross-appeal

Keywords: Contracts, Arbitration Agreements, Torts, Conspiracy, Intentional Interference with Contractual Relations, Intentional Interference with Economic Relations (Unlawful Means Tort), Civil Procedure, Jurisdiction, Arbitrations, Stay, Waiver, Striking Pleadings, No Reasonable Cause of Action, International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5, s. 9, Model Law on International Commercial Arbitration, art. 8(1), Arbitration Act, R.S.B.C. 1996, c. 55, ss. 15(1), 15(2), Arbitration Act, S.B.C. 2020, c. 2, ss. 7(1), 7(2), Arbitration Act, 1991, S.O. 1991, c. 17, s. 7, Arbitration Act, R.S.A. 2000, c. A-43, s. 7, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Can. T.S. 1986 No. 43, art. II(3), Rules of Civil Procedure, r. 21.01.(1)(b), A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, PMC York Properties Inc. v. Siudak, 2022 ONCA 635, RWDI Air Inc. v. N-SCI Technologies Inc., 2015 ONCA 817, Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260, ABN Amro Bank Canada v. Krupp Mak Maschinenbau GmbH (1996), 135 D.L.R. (4th) 130 (Ont. Div. Ct.), Fraser v. 4358376 Canada Inc., 2014 ONCA 553, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Conconi Developments Ltd. v. DR4 Developments Ltd., 2014 BCSC 1101, Fathers of Confederation Buildings Trust et al. v. Pigott Construction Co. Ltd. (1974), 44 D.L.R. (3d) 265 (P.E. S.C.), CSI Toronto Car Systems Installation Ltd. v. Pittasoft Co., Ltd., 2021 ONSC 5117

facts:

Unit Precast (Breslau) Ltd. (“Unit Precast”) appealed the dismissal of its claims and sought an order dismissing the respondents’ motion to strike its claims (i) for conspiracy and intentional interference with contractual or economic relations and (ii) those asserted personally against L.B., the CEO of Bergmann North America. Click+Clean GmbH (“Click”) advanced a cross-appeal from the dismissal of its stay motion and sought an order staying the action and referring the matter to arbitration.

In the proceedings leading to the appeal, the motion judge was faced with one motion seeking two types of relief. First, the Moving Defendants, who consisted of two groups of the defendants, (a) Bergmann North America Inc., Click+Clean GmbH, and L.B. and (b) M.J.M., L.H.R, and C.F.A.P., sought to strike several claims made by the plaintiffs, RH20 North America Inc. (“RH20”) and Unit Precast. Second, Click sought an order staying the action against it by the plaintiff, RH20, on the basis that the dispute should be referred to arbitration in pursuant to an arbitration agreement between it and RH20.

The motion judge: (1) struck out all claims of the plaintiff, Unit Precast, against all the Moving Defendants, including Click, without leave to amend; (2) struck out RH20’s claim of conspiracy against all defendants, including Click, with leave to amend; (3) struck out RH20’s claims against Lars Bergmann, with leave to amend; (4) ordered that the amended statement of claim of RH20 be delivered within 45 days of the release of the decision or such later date as agreed by the parties; and (5) dismissed Click’s stay motion primarily because the arbitration agreement was incapable of performance within the meaning of art. 8(1) of the Model Law on International Commercial Arbitration (the “Model Law”).

Unit Precast only appealed the striking out of three of its claims: (i) its conspiracy claim, in combination with RH20, against the defendants; (ii) its claims against L.B. and (iii) its claim for intentional interference with contractual relations.

issues:

(1) Did the motion judge err in dismissing three of Unit Precast’s claims against the respondents?

(2) Did the motion judge err in dismissing Click’s request for an order staying the action against it and referring the dispute to arbitration pursuant to s. 9 of the International Commercial Arbitration Act, 2017, and art. 8 of the Model Law?

holding:

Appeal and cross-appeal dismissed.

reasoning:

(1) No. The Court held the motion judge correctly identified the principles to apply when considering whether Unit Precast’s pleading failed to disclose a reasonable cause of action, as well as the constituent elements of the causes of action asserted by Unit Precast against the respondents.

The Court understood that Unit Precast advanced five main grounds of appeal, who primarily asserted that Unit Precast was included in RH20’s business affairs. The Court agreed that the motion judge correctly described the relationship as one where RH20 sub-contracted work to Unit Precast and not an “affiliate.” The Court did not see an error in the conclusion that Unit Precast had not advanced a claim against L.B. in his personal capacity, nor that there could be a claim of interference with contractual relations, given that Unit Precast had not pleaded any existence of any contracts with any third parties. Unit Precast relied on A.I. Enterprises Ltd. v. Bram Enterprises Ltd., which dealt with the tort of unlawful interference with economic relations or causing loss by unlawful means. The Court agreed with the motion judge, however, that the claim was to be dealt with as stated in the statement of claim, namely that the defendants had intentionally interfered with the plaintiffs’ contractual relations. The Court agreed the Plaintiffs’ conspiracy claim should be struck given that the pleading contained no reference to Unit Precast nor did it appear in any of the pleaded particulars of the conspiracy. Finally, the Court saw no error in the motion judge’s exercise of discretion to justify interfering with his decision to decline Unit Precast leave to amend the struck claims.

(2) No. The Court held that the motion judge did not err in refusing to grant Click’s stay request. The Court saw no need to examine whether the motion judge erred in his first and second reasons for denying the stay motion since it agreed with the core conclusion in his third reason. Joining the other Moving Defendants in seeking an order to strike out the plaintiffs’ claims, Click took a step to invoke the jurisdiction of the court which was equivalent to waiving the agreement to arbitrate.

The Court gave four reasons to establish agreement with the motion judge. First, the Court applied the fourth technical requirement from the Supreme Court’s decision in Peace River Hydro Partners v. Petrowest Corp., which described that a party applying for a stay in favour of arbitration does so before taking any “step” in the court proceedings. The Court asserted that parties to an arbitration agreement must abide by a negative obligation not to seek the resolution of disputes subject to an arbitration agreement in domestic courts. Second, art. 8(1) of the Model Law gives effect to that negative obligation of the parties. Third, the motion judge correctly treated Click’s motion to strike certain parts of the plaintiffs’ claims as breaching its negative obligation under the arbitration agreement in the Licence Contract. That breach amounted to a waiver of its right to arbitrate. Fourth, Click’s waiver of its right to arbitrate rendered the arbitration agreement “inoperative”, within the meaning of art. 8(1) of the Model Law, regarding the dispute between the parties.

The Court agreed that the motion to strike that Click joined could not be characterized as a procedural step taken within the confines of the “jurisdictional” motion to stay the court proceeding in favour of arbitration. Click, together with other Moving Defendants, sought to reduce their exposure to liability by asking the court to dismiss part of the plaintiffs’ substantive claims as disclosing, at law, no reasonable cause of action.

Farrell v. Riley, 2024 ONCA 449]

[van Rensburg, Sossin and Dawe JJ.A.]

Counsel:

S. Moreau and C. Perri, for the appellant

C. Freeman, for the respondent

Keywords: Contracts, Intention to Create Binding Legal Relations, Essential Terms, Unjust Enrichment, Damages, Mitigation, Civil Procedure, Appeals, Standard of Review, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53,  Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, Moore v. Sweet, 2018 SCC 52, Bawitko Investments Ltd. v. Kernels Popcorn Limited (1991), 53 O.A.C. 314 (C.A.), Olivieri v. Sherman, 2007 ONCA 491, Alkin Corporation v. 3D Imaging Partners Inc., 2020 ONCA 441, Angus v. CDRW Holdings Ltd., 2023 BCCA 330

facts:

Mr. F joined an investment firm and brought with him a portfolio of clients. Mr. F was an Investment Advisor, which contrasted with a Portfolio Manager (“PM”). Mr. F agreed that his clients would have their investments handled by a PM. Mr. R became the PM for these clients. In May 2017, Mr. R began to contact the clients of Mr. F, without informing Mr. F. Mr. F interpreted this as an attempt to take over the book of business. The parties met to discuss the situation, and several emails were exchanged in which Mr. R raised proposals to acquire Mr. F’s participation rights. These discussions culminated in a meeting on July 28, 2017, between the parties. At this meeting, they discussed the purchase of Mr. F’s participation rights, with both the firm and Mr. R co-guaranteeing the sale. However, Mr. R was asked by the firm to contact Mr. F directly to come to an arrangement themselves.

Mr. F forwarded Mr. R an email written to him by his lawyer that set out Mr. F’s position and a way “to finalize everything to mutual satisfaction all round” (the “July 31 Email”). The Email set out proposed terms for the purchase of Mr. F’s book of business. One of the terms set out in the July 31 Email was that Mr. R provide security for the purchase price. While Mr. R did receive the email, he did not acknowledge receipt at the time.

On September 27, 2017, Mr. R emailed Mr. F and offered to buy his participation rights for $ 90,000, payable in 36 equal monthly payments of $ 2,500 or, alternatively, a lump sum payment of $ 76,500. On October 2, 2017, the firm terminated Mr. F’s employment. On October 4, 2017, Mr. F emailed Mr. R accepting the offer. He stated that he would have his lawyer draw up a promissory note and a security agreement to sign, and that once those were signed, he would assist with client handover to encourage the clients to stay with Mr. R and the firm.

On October 5, Mr. R emailed Mr. F accusing him of not negotiating in good faith and stating that his offer was null and void. Mr. F responded the following day maintaining that there was a binding contract and attaching the promissory note and security agreement to be signed and returned to him. Mr. R stated that he and Mr. F “don’t have a firm and binding contract” but repeated his offer to pay Mr. F $ 2,500 a month for 36 months. Mr. R never made any payment to Mr. F. On October 26, 2018, Mr. F commenced an action against Mr. R for $ 90,000 in damages for breach of contract.

issues:

(1) Did the trial judge err in finding that the parties had formed the necessary intention to create a binding legal relationship?

(2) Did the trial judge err in finding the parties had agreed to all essential terms?

(3) Did the trial judge err in concluding that Mr. R was unjustly enriched at Mr. F’s expense?

(4) Did the trial judge err in finding that Mr. F mitigated his losses?

holding:

Appeal dismissed.

reasoning:

On a preliminary note, the parties differed on their view of the appropriate standard of review for the trial judge’s decision. The Court found Mr. R did not establish that there was an extricable error of law, for which there is a high bar: see Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. Rather, the Court saw his argument as one rooted in the trial judge’s findings of mixed fact and law. Therefore, the standard of review applied was one of palpable and overriding error.

(1) No, the trial Judge did not err in finding that the parties had formed the necessary intention to create a binding legal relationship. The trial judge did not disregard the July 31 Email because it included a reference that the terms of the proposed settlement were “without prejudice.” Rather, he concluded that the reference in the July 31 Email that, “none of the suggestions below will either individually or taken together constitute an agreement unless or until they are set out in writing and signed by all relevant parties”, had to be read together with the phrase immediately preceding it in the July 31 Email, that it be “absolutely clear that the suggestions are made on an entirely without prejudice basis”. The Court noted that this finding was open to the trial judge on the record and saw no basis to interfere with it.

(2) No, the trial Judge did not err in finding the parties had agreed to all essential terms. The trial judge rejected that security, or the promissory note raised by Mr. F constituted an “essential term.” The trial judge relied on Mr. F’s examination for discovery evidence where he was clear that the “ultimate deal breaker” was quantum, not the term for security. In summary, the Court saw no error with the trial judge’s finding with respect to the existence of a binding contract.

(3) No, the trial judge did not err in concluding that Mr. R was unjustly enriched at Mr. F’s expense. The trial judge found, as an alternate basis for recovery, that Mr. R had been unjustly enriched by keeping all of the commissions for himself and denying Mr. F the revenue that would have accrued from his participation rights. The Court noted the trial judge’s reasoning on the unjust enrichment finding was not entirely clear. However, since the Court affirmed the primary basis for the trial judge’s award of damages, it was not necessary to reach a conclusion on whether this finding should be upheld.

(4)  No, the trial judge did not err in finding that Mr. F mitigated his losses. While the Court did not necessarily agree with the trial judge’s analysis that doing nothing constituted mitigation, Mr. R did not meet his onus to show that mitigation was possible in the circumstances: Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51.

SHORT CIVIL DECISIONS

Bogue v. Law Society of Ontario, 2024 ONCA 452

[Huscroft, Coroza and Monahan JJ.A.]]

Counsel:

G.B., acting in person

J. Elcombe, for the respondent

Keywords: Regulated Professions, Lawyers, Discipline, Civil Procedure, Frivolous, Vexatious, Abuse of Process, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Administration of Justice Act, R.S.O. 1990, c. A.6, s. 4.10, Rules of Civil Procedure, rr. 2.1.01, 2.1.02

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