COURT OF APPEAL FOR ONTARIO

CITATION: Hollowcore Incorporated v. Visocchi, 2016 ONCA 600

DATE: 20160729

DOCKET: C59540 and C59541

Weiler, Cronk and Benotto JJ.A.

BETWEEN

Hollowcore Incorporated and Prestressed Systems
    Inc.

Plaintiffs
    (Respondents/

Respondents by way of
    cross-appeal)

and

Michael Visocchi and Visco Engineering Inc.

Defendants
    (Appellants/

Respondents by way of
    cross-appeal)

and

The Royal Insurance Company of Canada, Continental
    Casualty Company and Certain Underwriters at Lloyds Under Contract No. ENC5-98

Third Parties
    (Respondents/

Appellants by way of
    cross-appeal)

Alan J. Lenczner, Q.C., and Ren Bucholz, for the
    appellants/respondents by way of cross-appeal, Michael Visocchi and Visco
    Engineering Inc.

Peter W. Kryworuk, Jasmine T. Akbarali and D. Stephen
    Jovanovic, for the respondents/respondents by way of cross-appeal, Hollowcore
    Incorporated and Prestressed Systems Inc.

Morris A. Chochla and Mark A.D. Coleman, for the
    respondents/appellants by way of cross-appeal, The Royal Insurance Company of
    Canada, Continental Casualty Company and Certain Underwriters at Lloyds Under
    Contract No. ENC5-98

Heard: April 13 and 14, 2016

On appeal from the judgment of Justice Mary Jo M. Nolan
    of the Superior Court of Justice, dated November 4, 2014, with reasons reported
    at 2014 ONSC 6802, 40 C.C.L.I. (5th) 17.

Benotto J.A.:

A.

Overview

[1]

Michael Visocchi and Visco Engineering Inc. (Visco) are the two
    appellants in this appeal. Visocchi is a professional engineer and the
    principal of Visco, a corporation based outside of Windsor. They were retained to
    prepare engineering drawings for an addition to a commercial parking garage in
    the United States by Prestressed Systems Inc. (PSI) and Hollowcore
    Incorporated (Hollowcore). PSI is in the business of designing,
    manufacturing, and installing precast concrete, and Hollowcore is its wholly
    owned subsidiary and sales arm in the United States. The drawings had to be
    corrected and resubmitted multiple times, which delayed the completion of the
    project. Ultimately, the appellants simply withdrew from the project without
    completing their work.

[2]

PSI and Hollowcore brought an action against the appellants for damages
    for breach of contract, negligent performance of a service and negligent
    misrepresentation. The appellants added their insurers as third parties to the
    action. The group of insurance companies (the Insurers) had provided errors
    and omissions insurance to the appellants at the material time. They are the
    remaining respondents and appellants by cross-appeal. The trial judge found
    Visco liable for breach of contract and both appellants liable in negligence,
    assessed the damages, and apportioned liability for the damages between the
    appellants and the Insurers.

[3]

The appellants appeal, among other things, the apportionment of
    liability for the damages. The Insurers cross-appeal the assessment of damages
    and the exchange rate used by the trial judge to convert damages denominated in
    U.S. dollars.

B.

Facts

[4]

Hollowcore was awarded a subcontract by Rudolph Libbe Inc. (Libbe) in
    January 1999. The subcontract was for the design, supply, and installation of
    the precast concrete components of a five-storey addition to an existing
    parking garage in Toledo, Ohio.

[5]

Under the subcontract, Hollowcore was to start on site by October 4,
    1999, and be completed by November 17, 1999. The timeline was critical, as
    Libbe and the owners wanted to minimize interference with the profitable use of
    the existing parking structure. The subcontract specified that time was of the
    essence.

[6]

On March 15, 1999, Visocchi, through Visco, submitted a bid to
    Hollowcore to provide, among other things, engineering drawings for the
    project. In the bid Visco committed to provide approximately 600 drawings and acknowledged
    that all drawings and calculations would have to be sealed by a licensed
    professional engineer registered in the state of Ohio. The total price for
    Viscos work was CDN$67,500 plus GST.

[7]

Four days after submitting the bid, on March 19, 1999, Visocchi wrote to
    Hollowcore saying:

I have not have [
sic
] a chance to put together a
    formal schedule for this project, however I have some people available to start
    erection drawings on April 1, 1999. By the middle of April I will have all of
    my people available to work on the project. I am sure I can meet your
    scheduling requirements.

I would really like this job for PSI and will do whatever it
    takes to get the drawings completed on your timetable.

[8]

On April 12, 1999, PSI issued a purchase order to Visco, and the
    appellants commenced their work on the project.

[9]

There were numerous and persistent problems with the work submitted by
    the appellants. Drawings were submitted late, they were replete with errors,
    and revised drawings did not address many of the errors found in earlier
    versions. Over the summer and fall of 1999, many discussions and meetings took
    place and many demands were made of the appellants.

[10]

On September 2, 1999, Donald Little, then Vice President and General Manager
    of PSI and Hollowcore, wrote to the appellants to confirm the various
    agreements reached at his recent meeting with Visocchi and Loris Collavino, President
    of Hollowcore and PSI at the time. The letter confirmed a timetable: all
    inverted tee drawings and all of the L beam and spandrel drawings were to be
    delivered on September 1, 1999; working drawings for the columns and lite walls
    were to be available for pick up on September 2, 1999; and the drawings for the
    lite walls, columns, stairs, elevators, crossover beams, and shear walls were
    to be submitted by September 7, 1999. The letter also confirmed that, on
    September 1, 1999, Visocchi was to meet with an engineer from Hanna Ghobrial
    and Spencer Ltd. ("Ghobrial"), another engineering firm in Windsor,
    to provide details with respect to the elevator shaft drawings.

[11]

The letter continued as follows:

As discussed at the
meeting
,
    we have no intention of creating a bad relationship with yourself, nor do we
    have any intention of back charging your account. The recent meeting with [Libbe]
    went very well and it appears that we can still satisfy their schedule.
    However, you must meet the above noted deadlines in order for us to keep this
    project on track and avoid any possible future charges against ourselves from
    the owner or [Libbe].

[12]

On September 9, 1999, PSI wrote to the appellants advising that if
    Hollowcore could not meet the projects schedule then Libbe would start
    charging the Hollowcore account.

[13]

On September 17, 1999, Collavino met with Visocchi. Following the
    meeting, Collavino prepared an interoffice memo setting out the discussions
    wherein Visocchi admitted that he was drastically behind with the drawings.

[14]

On September 30, 1999, Libbe wrote to Hollowcore complaining about the
    quality of the work and the delay in its delivery. Libbe demanded that the
    drawings and calculations be finalized and submitted immediately.

[15]

The appellants repeatedly gave assurances that their work would be
    completed on time. However, on October 20, 1999, Visocchi told the Hollowcore
    project manager that he could not proceed and that Hollowcore should get
    someone else to complete the drawings.

[16]

In the end, the erection of the pre-cast concrete was not completed
    until late January 2000.

[17]

On October 25, 1999, PSI wrote a letter to the appellants putting them
    on notice that Hollowcore would be seeking full indemnity from them for any
    costs and expenses incurred by Hollowcore, as well as any possible damage
    claims brought against Hollowcore, as a result of their failure to meet the
    drawings submittal deadlines. The letter also advised that PSI would withhold
    any further payments until PSI had determined the costs, expenses, and possible
    damage claims resulting from the appellants delays.

[18]

On October 27, 1999, PSI retained Ghobrial to assume responsibility for
    the engineering and shop drawings.

[19]

PSI continued to write to the appellants to advise them of problems
    encountered on the job relating to errors and omissions in the drawings. PSI also
    asked the appellants to contact their insurer.

[20]

Libbe back charged significant amounts to Hollowcore because the errors
    and delays in the drawings delayed the project and increased its costs. PSI and
    Hollowcore incurred additional costs as well in order to deliver and install
    the product as required under their subcontract with Libbe.

[21]

Hollowcore and PSI issued their statement of claim on May 12, 2000. The appellants
    filed a statement of defence and counterclaim on July 12, 2000.

[22]

Ten years later, on May 4, 2010, the appellants, with leave of the
    court, issued a third party claim against the Insurers for contribution and
    indemnity for all sums for which the appellants might become liable to the
    plaintiffs and for which there was coverage under their insurance policy. The Insurers
    defended the claim, relying on an exclusion clause for damage resulting from
    the appellants failure to complete their work on time. They also filed a
    defence in the main action.

C.

The Trial Judges Decision

[23]

At trial, Hollowcore and PSI alleged that both appellants were liable
    for breach of contract, negligent performance of a service, and negligent
    misrepresentation.

[24]

The trial judge found Visco liable in contract to PSI and Hollowcore.
    Visco had an express contract with PSI and an implied contract with Hollowcore.
    Both the express and the implied contracts required Visco to provide accurate
    and timely engineering drawings for the parking garage project. Based on what
    she described as overwhelming evidence, the trial judge found that Visco
    breached its contracts.

[25]

Although she found that Visocchi was not liable in contract, the trial
    judge concluded that both appellants were liable in negligence. They both owed
    a duty of care to Hollowcore and PSI. They made untrue, inaccurate, or
    misleading representations which were relied upon. The representations about
    when the work would be completed were made by Visco and by Visocchi personally.
    Visocchi gave his personal assurances to PSI and Hollowcore that the work would
    be done correctly and on time. In view of their history with the appellants
    they had worked together before  it was reasonable for PSI and Hollowcore to
    rely on the assurances.

[26]

The trial judge also found ample evidence of negligent performance of a
    service by both appellants. She relied on the oral evidence of those involved,
    supported by the exhibits, the numerous revisions of numerous drawings, and a
    number of photographs submitted by the parties, when finding that much of the
    work was performed negligently. In fact, Visocchi admitted that his work on
    this project did not meet his own professional standards.

[27]

The trial judge then assessed the damages. Some of the heads of damages
    claimed were denominated in U.S. dollars, while the rest were in Canadian
    dollars. The trial judge awarded damages as follows:

Libbe back charges for winter costs

US$86,879.00

Libbe back charges for errors in drawings

US$50,607.00

Libbe back charges for the Assemblers

US$13,000.00

Libbe back charges for labour costs

US$150,000.00
[1]

Brint Electric costs

US$11,000.69

Costs related to column covers

US$29,200.69

Extra payment to Assemblers

US$83,325.00

Additional labour and repair costs

US$28,055.00

Supplier costs

US$21,000.00

As built drawings

US$4,770.00

Total for damages denominated in U.S. dollars

US$477,837.38

Cost of production and shipping of column covers

CDN$11,048.48

PSI Inefficiencies

CDN$35,000.00

Total for damages denominated in Canadian dollars

CDN$46,048.48

[28]

After quantifying the damages, the trial judge turned to the Insurers liability
    to indemnify the appellants. Under the relevant contract of insurance, the
    Insurers were liable for any damages arising from the appellants negligence
    but not for any damages arising out of delay.

[29]

The trial judge concluded that the Insurers were liable for all the damages
    for (1) Libbe back charges for errors in drawings, in the amount of US$50,607;
    (2) costs associated with column covers, in the amount of US$29,480.69; and (3)
    the production and shipping of column covers, in the amount of CDN$11,048.48.

[30]

With respect to the balance of the damages, however, the trial judge found
    that it was almost impossible to determine with absolute accuracy the damages
    related to negligence as opposed to delay. She concluded that the Insurers were
    to indemnify the appellants for 55 percent of the damages. The remaining 45
    percent would be paid by the appellants on a joint and several basis.

[31]

Finally, the trial judge determined the exchange rate for converting the
    damages denominated in U.S. dollars into Canadian ones. She exercised her
    discretion pursuant to s. 121(3) of the
Courts of Justice Act
, R.S.O.
    1990, c. C-43, to use the exchange rate as on May 15, 2000, instead of the
    exchange rate on the date of her judgment.

D.

Issues on Appeal and Cross-Appeal

[32]

The several issues raised by the appellants were simplified in oral
    submissions.

[33]

As their first ground of appeal, the appellants submit that the trial
    judge erred in apportioning the damages between them and the Insurers because
    her findings made it clear that all the delay was caused by negligence and
    therefore covered under their insurance policy. If the court accepts this submission,
    the appellants submit that it is unnecessary to address the remaining issues
    raised by them in their appeal.

[34]

Hollowcore and PSI do not take issue with this ground, although the
    Insurers do. The Insurers also submit that the trial judge erred  in
    apportioning the damages between them and the appellants on a 45/55 percent
    split, in her assessment of damages, and by choosing the wrong date for
    determining the exchange rate.

[35]

As will become evident in my analysis, I accept the appellants first submission.
    The issues therefore are the following:

1)

Did the trial
    judge err in allocating responsibility for the damages between the appellants
    and the Insurers?

2)

Did the trial
    judge err in her assessment of damages?

3)

Did the trial
    judge err in her decision as to the date for the exchange rate?

E.

Analysis

(1)

Did the Trial Judge Err in Allocating Responsibility for the Damages Between
    the Appellants and the Insurers?

[36]

The appellants submit that all the damages awarded against them are
    covered under their insurance policy because the damages resulted from their negligence
    in the performance of their professional services. The policy of insurance provides:

THE INSURER will pay on YOUR behalf all sums which YOU become
    liable to pay as DAMAGES arising out of a CLAIM providing YOUR liability is the
    result of an error, omission or negligent act in the performance of professional
    services for others.

[37]

The Insurers acknowledge their obligation to indemnify the appellants
    against losses resulting from negligence. They submit, however, that a portion
    of the damages arise out of the appellants failure to complete the drawings on
    time and that the failure to provide professional services in a timely manner
    is not covered by the policy. They rely on the following exclusion in the
    policy:

THE INSURER will not cover YOU, pay DAMAGES, provide YOU with a
    defence or make supplementary payments for CLAIMS arising out of YOUR failure
    to complete drawings, plans, specifications, reports, or schedules on time or
    YOUR failure to act upon shop drawings on time, unless such failure is the
    result of an error or inaccuracy in the preparation of these documents.

[38]

The Insurers also submit that the trial judge erred in apportioning responsibility
    for the damages between them and the appellants on a 45/55 percent split.

[39]

The appellants submit that all the delay was caused by their negligence
    because the delay resulted from the need to correct and re-correct their work.

[40]

In
Cabell v. Personal Insurance Co.
, 2011 ONCA 105, 104 O.R.
    (3d) 709, at para. 11, this court reiterated the well-established principle
    that:

The general principles of interpretation that apply to
    insurance policies are well established. A clause in the policy providing
    coverage will be broadly interpreted in favour of the insured. An exclusion
    clause limiting coverage will be strictly interpreted.

[41]

The fundamental obligation of the Insurers is to pay damages arising
    from a breach of contract or from negligence in the performance of professional
    services. This is the reason for the policy and should be broadly interpreted
    in favour of the insured. The Insurers had the onus of establishing, on a
    balance of probabilities, that the damages arose out of a lack of timeliness
    and not from delay caused by the appellants having to correct errors or
    omissions in the drawings:
Strategic Associates Incorporated v. Export
    Development Corporation,
2007 ONCA 140, 221 O.A.C. 195, at para. 6.

[42]

I have concluded that the Insurers have not discharged their burden. A
    fair reading of the trial judges findings of fact confirms that there are no
    damages caused by pure delay; rather, on her findings, all the delay (and the
    resulting damages) was caused by the appellants negligence.

[43]

The trial judge found that the drawings had to be resubmitted multiple
    times, that this caused delay, and that the number of corrections needed in
    this case was not acceptable practice. In particular, she made the following
    findings:

·

the contract between Visco and Hollowcore and the implied
    contract between Visco and PSI required that Visco provide accurate and timely
    engineering documents. The evidence is overwhelming that Visco breached its
    contracts with both PSI and Hollowcore (see para. 87);

·

the number of times that drawings had to be revised and corrected
    in this case was not in line with accepted practice (see para. 88);

·

a number of drawings clearly show repeated errors, many of which
    were not properly corrected on the first or even the second time they were
    returned by the engineer of record for revision (see para. 89);

·

Visocchi admitted that the drawings done by him and others under
    his supervision were replete with errors that needed numerous revisions which delayed
    the project (see para. 92); and

·

although revisions were routine, drawings that were returned
    repeatedly do not fall under the delay exclusion (see para. 243).

[44]

The trial judge approached damages for all causes of action  breach of
    contract, negligent misrepresentation, and negligent performance of a service
    together. She clearly concluded that the delay, which gave rise to the damages
    awarded, was caused by negligence on the part of the appellants. Given that,
    the Insurers are liable for all the damages.

[45]

I have some sympathy for the trial judge. The argument put forth by the
    appellants on appeal does not appear to have been made to her, perhaps because
    her findings on negligence were not known at the time. That said, now that her
    findings are clear, so too is their effect on insurance coverage. It would be
    inconsistent, in light of her findings, to conclude that the delay at issue was
    not caused by negligence.

[46]

Therefore, I agree with the appellants that the Insurers are liable for
    all the damages awarded by the trial judge.

(2)

Did the Trial Judge Err in her Assessment of Damages?

[47]

The Insurers submit that the trial judge erred in her assessment of
    damages by resorting to guesswork. They submit that she erred in her
    methodology and in fixing the quantum for certain heads of damages.

[48]

I have concluded that her methodology followed the jurisprudence of this
    court and her determination of quantum was firmly grounded in the evidence. I
    would, therefore, reject this ground of appeal.

(a)

The Trial Judges Methodology

[49]

The trial judges assessment of damages is entitled to deference. In
TMS
    Lighting Ltd. v. KJS Transport Inc.
, 2014 ONCA 1, 314 O.A.C. 133, at para.
    60, this court said:

A trial judges assessment of damages attracts considerable
    deference from a reviewing court. Appellate interference with a damages award
    at trial, particularly an award made by a trial judge sitting alone, is
    justified only where the trial judge made an error in principle, misapprehended
    the evidence, failed to consider relevant factors, considered irrelevant
    factors, made an award without any evidentiary foundation, or otherwise made a
    wholly erroneous assessment of damages. [Citations omitted.]

[50]

Hollowcore and PSI led significant evidence of damages. The trial judge
    issued lengthy reasons wherein she reviewed in detail the evidence she heard
    over 21 days of trial. Her damages analysis spans 24 pages and 113 paragraphs.

[51]

The trial judge directed herself to the governing principles on the
    assessment of damages. She noted that situations where the damages assessment
    is difficult because of the nature of the damages proved must be distinguished
    from situations where the assessment is difficult due to the absence of
    evidence of loss. She found that this case fell into the first category because
    Hollowcore and PSI had submitted numerous documents and invoices to demonstrate
    loss, and led oral evidence to explain the circumstances under which the
    invoices were sent, received and paid. This was not a situation where the
    difficulty of assessing damages was because there was an absence of evidence.
    As a result, and in accordance with the jurisprudence, she concluded that her
    duty was to assess damages even if the assessment was imprecise.

[52]

The trial judge dealt at length with the admissibility of business
    records, and in particular, the invoices that supported the damages claimed.
    She admitted the invoices into evidence but noted it was still necessary for
    her to determine whether the individual costs incurred could be linked to the
    breaches of contract by Visco or the negligence of Visocchi and Visco.

[53]

The approach adopted by the trial judge is consistent with the decisions
    of this court. In
Martin v. Goldfarb
(1998), 112 O.A.C. 138 (C.A.), Finlayson
    J.A. explained, at para. 75,

[I]t is a well-established principle that
    where damages in a particular case are by their inherent nature difficult to
    assess, the court must do the best it can in the circumstances. That is not to
    say, however, that a litigant is relieved of his or her duty to prove the facts
    upon which the damages are estimated. The distinction drawn in the various
    authorities, as I see it, is that where the assessment is difficult because of
    the nature of the damage proved, the difficulty of assessment is no ground for
    refusing substantial damages even to the point of resorting to guess work.

[54]

These principles were recently reaffirmed in
TMS Lighting Inc.
,
    where the court, at para. 61, explained:

It is also beyond controversy that a plaintiff bears the onus
    of proving his or her claimed loss and the quantum of associated damages on a
    reasonable preponderance of credible evidence. Further, as the trial judge
    recognized in this case, a trial judge is obliged to do his or her best to
    assess the damages suffered by a plaintiff on the available evidence even where
    difficulties in the quantification of damages render a precise mathematical
    calculation of a plaintiffs loss uncertain or impossible. Mathematical
    exactitude in the calculation of damages is neither necessary nor realistic in
    many cases.

[55]

Consequently, the trial judges approach to the assessment of damages
    was correct.

[56]

The Insurers did not call evidence on the issue of damages. On the
    evidence before her, the trial judge found that the engineering drawings were
    replete with errors. The time spent correcting the errors led to delay in the
    preparation of other required drawings, thus delaying the overall project. The
    imprecision in calculating damages here flows from the nature of the losses
    suffered and from the good faith efforts of these respondents to mitigate their
    losses.

[57]

The trial judges assessment of damages was necessarily imprecise
    because of the nature of the damages suffered. However, as the difficulties in
    quantifying damages resulted from the nature of the loss proven rather than the
    absence of evidence of any loss, the trial judge rightly did her best to assess
    the damages.

(b)

The Trial Judges Determination of Quantum of Damages

[58]

The Insurers submit that there was no evidence to support the following
    damages awarded by the trial judge:

1)

US$13,000 awarded
    for Libbe back charges for Assemblers;

2)

US$83,325 awarded
    for the extra payments to Assemblers;

3)

US$8,000 of the
    total of $28,055 awarded for additional labour and repair costs; and

4)

US$4,770 awarded
    for as built drawings.

[59]

I will deal with each item in turn.

(i)

The Back Charges for Assemblers

[60]

Hollowcore subcontracted with Assemblers to install precast concrete in
    the garage. Hollowcore and PSI claimed US$26,000 in respect of work that Libbe
    did that was included in the Assemblers contract. The trial judge reduced the
    award to US$13,000. The Insurers submit that there was no evidence relating the
    back charges to the appellants delay or negligence. However, the evidence of
    Little and Collavino, accepted by the trial judge, was that the costs were
    incurred as a result of the delay and were part of Hollowcores attempt to mitigate
    its damages. The trial judge also accepted the evidence of Gary Haas, the chief
    project manager of Libbe, that his employees did work that should have been
    done by Assemblers. Therefore, it was open to her to award damages in the amount
    of US$13,000.

(ii)

The Extra Payment to Assemblers

[61]

Assemblers sought an additional US$280,000 pursuant to a series of
    additional work orders they deemed necessary to complete the project.
    Hollowcore and PSI settled the claim for US$125,000. Little gave evidence that
    the work orders related to the delays caused by having to repair the product on
    site because some components had been manufactured from erroneous drawings.
    Frank Sample, a principal of Assemblers, confirmed that the extra work was
    necessary because of the erroneous drawings. The trial judge concluded as
    follows at para. 224:

Given the numerous corrections that were required of the
    drawings as shown in Exhibit 14, the nature of the extra work required to be
    done by Assemblers, and the detailed evidence of Mr. Collavino over almost
    eight days with respect to the numerous drawing errors, I conclude that
    two-thirds of the extra work reasonably related to drawing errors and the
    resulting delay. I, therefore, fix the damages for the extra payment to
    Assemblers at $83,325USD.

[62]

I see no error in this determination.

(iii)

Additional Labour and Repair Costs

[63]

The Insurers say that the trial judge erred in awarding US$8,000 for
    costs incurred by Hollowcore for repairing various installations. In fixing
    these damages, at para. 227, the trial judge said the following:

From January 25, 2000 until July 3, 2000, Hollowcore employees
    spent 268 hours at $35 per hour repairing various installations such as double
    tees, patching, cutting rustification groves, and repairing walls. In addition
    to the hourly wages which totalled $9,380, Hollowcore incurred room and board
    costs of $2,690 for a total of $12,070. The third parties argued that few of
    the entries except for $280 which related to the column covers could be proven
    to be the result of problems arising from the drawings. Some of the repairs
    related to production error which was the result of premature production. The
    necessity for some of the repairs could not be explained. As a result, I fix
    damages for repairs at $8,000 USD.

[64]

This conclusion was available on the evidence.

(iv)

Damages for As Built Drawings

[65]

The Insurers submit that the appellants should not be responsible for US$4770
    relating to the owners request for as built drawings. Little testified that
    the replacement engineer, Ghobrial, had to go back to the drawings submitted by
    the appellants and update them to an as built condition. The trial judge
    accepted a purchase order as evidence for this claim when setting the quantum
    of these damages at US$4,770. It was open to her to do so.

[66]

In summary, the trial judges assessment of damages in each of these
    categories was based on the evidence and there is no basis for appellate
    intervention.

(3)

Did the Trial Judge Err in her Decision as to the Date for the Exchange
    Rate?

[67]

Some of the damages awarded had been denominated in U.S. currency. The
    trial judge therefore had to determine the exchange rate for converting those
    damages. She concluded that the exchange rate should be fixed as of May 15,
    2000 (the claim was issued on May 12, 2000). The Insurers submit that the trial
    judge erred and that the date should have been September 30, 2014, when
    judgment was delivered.

[68]

The exchange rate on May 15, 2000, was $0.67. The exchange rate on
    September 30, 2014, was $0.89. This represents a 25% appreciation in the value
    of the Canadian dollar in the interim period.

[69]

Section 121(1) of the
Courts of Justice Act
provides that,
    generally, the exchange rate will be determined as at the date of judgment:

Subject to subsections (3) and (4), where a person obtains an
    order to enforce an obligation in a foreign currency, the order shall require
    payment of an amount in Canadian currency sufficient to purchase the amount of
    the obligation in the foreign currency at a bank in Ontario listed in Schedule
    I to the
Bank Act
(Canada) at the close of business on the first day
    on which the bank quotes a Canadian dollar rate for purchase of the foreign
    currency before the day payment of the obligation is received by the creditor.

[70]

However, s. 121(3) provides an exception to that general rule:

Subject to subsection (4), where, in a proceeding to enforce an
    obligation in a foreign currency, the court is satisfied that conversion of the
    amount of the obligation to Canadian currency as provided in subsection (1)
    would be inequitable to any party, the order may require payment of an amount
    in Canadian currency sufficient to purchase the amount of the obligation in the
    foreign currency at a bank in Ontario on such other day as the court considers
    equitable in the circumstances.

[71]

The Insurers submit that the trial judge erred in departing from the
    general rule that the applicable exchange rate should be the rate in effect as
    at the date of recovery. They submit that the trial judge erred because she
    made no finding of inequity and there were no exceptional circumstances or
    compelling reasons to depart from the general rule.

[72]

The decision to depart from the general rule and apply s. 121(3) of the
Courts
    of Justice Act
is discretionary. In
Zucchetti Rubinetteria S.p.A. v.
    Natphil Inc.
, 2011 ONSC 3845, at para. 9, Perell J. noted that the court
    has the discretion to order the conversion to be effected on other dates if
    conversion on the date of payment would be inequitable to any party. This is
    consistent with the language of the section.

[73]

The trial judge recognized that the onus was on Hollowcore and PSI to
    justify a departure from the general rule. She was aware that a change in
    exchange rates alone could not create an inequity. She also recognized that an
    award of prejudgment interest would compensate Hollowcore and PSI for the fact
    that they did not have access to these funds and, therefore, that lack of
    access was not a reason to depart from the general rule.

[74]

However, in the circumstances before her, the trial judge decided to
    depart from the general rule. In doing so, she adopted the reasoning of Stinson
    J. in
Zesta Engineering v. Cloutier
, 2010 ONSC 5810,
86
    C.C.E.L. (3d) 1, at para. 296, varied on other grounds, 2014 ONCA 762, 20
    C.C.E.L. (4th) 168:

Since the sales to Husky Buffalo were in the US dollars, it is
    necessary to convert that currency to Canadian dollars for purposes of valuing
    the loss suffered by Zesta. Although s. 121 of the [
Courts of Justice Act
]
    provides a mechanism for converting a foreign money obligation for purposes of
    an Ontario judgment, s. 121(3) also permits the court to depart from that
    standard approach where the court considers it equitable. In the present case,
    there has been a dramatic shift in the respective values of the Canadian and US
    dollars over the past decade. To place the innocent party, Zesta, in the
    position it would have been in but for the wrong committed by Cloutier, I
    direct that the conversion of the US$132,209.88 (or the lesser sum, if the
    restitution order has been compiled with) to Canadian dollars be made at the
    Bank of Canada closing rate as at November 30, 1999. This will more properly
    reflect the loss to Zesta at the time the wrong was committed.

[75]

The trial judge found that to place the respondents in the position they
    would have been in but for the wrong committed by the appellants, the damages
    should be converted using the conversion rate as at May 15, 2000. This was her
    call to make. The loss actually suffered by the respondents was a relevant
    consideration. I see no basis for appellate interference with her discretionary
    ruling on this issue.

F.

Disposition

[76]

For the reasons given, I would allow the appeal of Visco and Visocchi
    against the Insurers and hold that the Insurers are responsible for all the
    damages payable to Hollowcore and PSI under the trial judgment.

[77]

I would also dismiss the Insurers cross-appeal with respect to the
    reduction of damages sought and the conversion rate for U.S. funds.

[78]

If the parties do not agree on the costs of these proceedings, the
    appellants costs submissions shall be delivered to the Registrar of this court
    within two weeks from the date of release of these reasons. The remaining
    parties costs submissions shall be delivered to the Registrar within two weeks
    thereafter.

Released: July 29, 2016

M.L. Benotto J.A.

I agree K.M. Weiler J.A.

I agree E.A. Cronk J.A.

[1]
The trial judge mentions two different numbers for this head of damages. In her
    summary of the damages awarded, at para. 235, she says that she is awarding
    US$163,000 for back charges for labour costs; however, at para. 219 she states
    that she was awarding US$150,000.The parties have not raised this discrepancy
    as an issue before us.


COURT OF APPEAL FOR ONTARIO

CITATION: Kaynes v. BP P.L.C, 2016 ONCA 601

DATE: 20160729

DOCKET: M46202 (C57876)

Sharpe, Simmons and Benotto JJ.A.

BETWEEN

Peter Kaynes

Respondent (Moving Party)

and

BP, P.L.C.

Applicant (Responding Party)

Joseph Groia, Martin Mendelzon, and Matthew Stroh, for
    the Moving Party

Laura K. Fric, Kevin OBrien, and Karin Sachar, for the
    Responding Party

Heard: June 22, 2016

Motion to lift the stay of an action ordered by this Court
    on August 14, 2014.

By the Court:

[1]

The moving party, Peter Kaynes, seeks an order lifting the stay of
    proceedings granted by this court on August 14, 2014: see
Kaynes v. BP,
    PLC,
2014 ONCA 580, 122 O.R. (3d) 162, leave to appeal to SCC dismissed,
    2015 CanLII 14728. That stay was based upon our conclusion that Ontario should
    decline to exercise jurisdiction over a claim relating to securities purchased
    on foreign stock exchanges on the ground of
forum non conveniens
. The
    moving party submits that new circumstances have arisen that make it unjust to
    maintain the stay and that accordingly, it should be lifted.

Background facts

[2]

The moving party is the named plaintiff in a proposed Ontario class
    action, claiming damages for alleged misrepresentations made to shareholders by
    the respondent BP, P.L.C. (BP). These alleged misrepresentations were made
    both before and after the April 2010 Deep Water Horizon explosion and oil spill
    that occurred in the Gulf of Mexico. The moving party purchased his BP
    securities on the New York Stock Exchange (NYSE) and the proposed Ontario class
    includes world-wide purchasers of BP securities.

[3]

BPs motion to stay the action for want of jurisdiction or on grounds of
forum non conveniens
was dismissed: 2013 ONSC 5802. On appeal from
    that decision to this court, BP conceded that Ontario could entertain claims
    relating to securities purchased on the Toronto Stock Exchange but resisted
    Ontario jurisdiction over claims relating to securities purchased on non-Canadian
    exchanges. In our August 14, 2014 decision, we allowed BPs appeal, having concluded
    that Ontario did have jurisdiction to entertain claims arising from securities
    purchased on non-Canadian exchanges, but that BP had shown that Ontario was not
    a convenient forum.

U.S. proceedings before the stay was granted

[4]

There is a pending class action in the U.S. District Court, Southern
    District of Texas (U.S. District Court). The class in that proceeding
    includes the moving party and other Canadian investors who purchased BP
    securities on the NYSE. Pursuant to an order made under the U.S.
Private
    Securities Litigation Reform Act of 1995
, Pub. L. 104-67, 109 Stat. 737
    (codified as amended in scattered sections of 15 U.S.C.), all litigation
    arising from the BP  Gulf of Mexico oil spill has been directed to the same
    judge in the U.S. District Court.

[5]

The U.S. class action claim, as originally framed, included both pre-
    and post-explosion claims. Claims for the period before November 8, 2007 were substantively
    dismissed. Prior to our stay decision, the U.S. class action judge had
    certified claims relating to post-explosion misrepresentations but refused to
    certify claims relating to pre-explosion misrepresentations. After we granted
    the stay, an appeal from the decision refusing to certify the pre-explosion
    claims was dismissed as was a
certiorari
application to the Supreme
    Court of the United States.

Post-stay order proceedings in the U.S. District Court

[6]

The moving party asks us to lift the stay to permit him to proceed with
    his proposed class action relating to pre-explosion claims on behalf of all
    Canadian investors. The moving party argues that we should lift the stay on
    account of the following post-stay developments.

[7]

After our stay decision, the moving party commenced a class proceeding
    in the U.S. District Court asserting a claim for pre-explosion representations
    based upon the
Ontario Securities Act
, R.S.O. 1990, c. S.5. BP
    successfully moved to have that proceeding dismissed on two grounds. First, the
    U.S. District Court judge ruled that pursuant to an order made in December
    2010, the Court had appointed lead plaintiffs to represent the class, thereby
    vesting the lead plaintiff[s] with authority to exercise control over the
    litigation as a whole and granting them sole authority to determine what
    claims to pursue on behalf of the class. The lead plaintiffs had not brought a
    pre-explosion claim based upon Ontario securities law. The U.S. District Court
    judge ruled that as the moving party and his proposed Canadian class were
    members of the class represented by the lead plaintiffs, he was not entitled to
    now assert a separate class action based upon a claim that the lead plaintiffs
    had not pursued. Second, the U.S. District Court judge ruled that the moving
    partys claim was time-barred under the
Ontario Securities Act
.

[8]

The U.S. District Court judge made it clear that the moving party and
    other members of his proposed class are free to pursue individual claims in the
    U.S. District Court based on Ontario securities law, subject to any defences BP
    may advance, including the limitations defence.

[9]

The moving party did not appeal the decision dismissing the class
    action.

Issue

[10]

The central issue on this motion is whether the facts surrounding the
    moving partys unsuccessful attempt to pursue a class action for pre-explosion
    misrepresentations in the U.S. District Court constitute facts arising after
    our stay decision that justify or require us to set it aside to avoid an
    injustice.

Analysis

[11]

It is common ground that the court has jurisdiction to set aside or vary
    an order on the basis of facts arising or discovered after the order was
    made: see Rule 59.06(2)(a). A stay granted on grounds of
forum non
    conveniens
is not necessarily permanent and the court has inherent
    jurisdiction to lift the stay where circumstances later develop that make it
    unjust to continue the stay:
Quadrangle Holdings Ltd. v. Coady
, 2013
    NSSC 416, 339 N.S.R. (2d) 85, at para. 49, affd 2015 NSCA 13, 355 N.S.R. (2d)
    324; Vaughan Black,
Conditional Forum Non Conveniens in Canadian Courts

    (2013), 39 Queens L.J. 41; Perell and Morden,
The Law of Civil Procedure
    in Ontario
, 2nd ed. (Toronto: Lexis Nexis, 2014), at para. 2.381.

[12]

It is now clear that the moving party cannot proceed with a class action
    claim in the U.S. District Court based upon alleged pre-explosion
    misrepresentations.

[13]

When the appeal was argued before us, BP took the position that the
    claim the moving party sought to advance was governed by U.S. law. BP argued
    that the tort was not committed in Ontario and that we should decline
    jurisdiction in order to have the claim adjudicated in a U.S. court under U.S.
    law.

[14]

BP also emphasized that U.S. law asserted exclusive jurisdiction over
    the moving partys claim. See BPs factum on the appeal, at para 101:

In addition, Ontario is not a
convenient
    forum
to try claims of NYSE purchasers, because if U.S. law is
    ultimately held to apply to those claims, an Ontario court would refuse to
    apply it. The relevant statutory cause of action in the U.S. is contained in
    Section 10b (and Rule 10b-5 promulgated thereunder) of the
Securities and
    Exchange Act of 1934
(the U.S. Act). The U.S. Act provides that U.S.
    federal courts have exclusive jurisdiction over claims under that
    legislation. Where legislation provides that a court of another province or
    country has exclusive jurisdiction to adjudicate claims arising under that
    legislation, an Ontario court will not take jurisdiction over those claims. [Footnote
    omitted.]

[15]

However, before the U.S. District Court on the motion to dismiss the
    moving partys proposed class action, BP accepted the moving partys position
    that the moving partys pre-explosion claim was based upon Ontario law. BPs
    position before the U.S. District Court was that as the claim was based on
    foreign law, it was not one over which U.S. law claimed exclusive jurisdiction.

[16]

In our view, these developments, taken as a whole, are sufficient to
    justify lifting the stay. It was certainly not brought to our attention or in
    our contemplation that the moving partys claim would be dismissed in the U.S. District
    Court simply because it had not been advanced by the lead plaintiffs in the
    U.S. class action. That is a purely procedural barrier that prevents the moving
    party from having his claim heard on the merits.

[17]

It is also significant that BP now accepts that the moving partys claim
    is governed by Ontario law and therefore does not assert that it falls within
    the exclusive jurisdiction of the U.S. courts. As is apparent from paras 41,
    42, 47 and 48 of our reasons, the claim of exclusive jurisdiction was a
    significant factor in our assessment of comity and
forum non conveniens
.

[18]

These developments leave the moving party in the following position. If
    the stay is not lifted, he is deprived of the right to have his claim asserted
    as part of a class action in the U.S. District Court and can only proceed with
    an individual claim in that court because of choices made by U.S. lead plaintiffs.

[19]

If, as BP argued before the U.S. District Court, the moving partys
    claim is based upon Ontario law, is not a claim that is or can be advanced in
    the U.S. class action, and does not fall within the exclusive jurisdiction of
    the U.S. courts, we have a very different situation than was presented to us on
    the stay motion. On the facts as presented by BP before the U.S. District Court,
    it is difficult to see why the stay should not be lifted to allow the moving
    party to proceed in Ontario.

[20]

We do not wish to be taken as suggesting in these reasons that BPs
    counsel misled the court. As we see it, any shift in position or inconsistency
    in approach was the result of litigation strategies being pursued by different
    counsel in different jurisdictions at different stages of the litigation.

[21]

We do not find it necessary to comment on the evidence relating to the
    difficulties the moving party would face if forced to litigate in the United
    Kingdom. If the moving party is permitted to litigate in Ontario claims based
    upon Ontario law related to securities purchased on the NYSE, it is difficult
    to see why he should not be permitted to include similar claims related to the
    relatively small number of securities purchased on other foreign exchanges.

[22]

We express no view as to the limitations issue raised by BP in the U.S. District
    Court or as to the effect of the U.S. District Courts ruling on that issue.
    Those issues were not fully argued before us on this motion and they are better
    left to be dealt with on a full record and after full argument in the Superior
    Court.

Disposition

[23]

Accordingly, the motion is granted and the stay is lifted to permit the
    moving party to proceed in Ontario with a claim based upon the alleged
    pre-explosion misrepresentations.

[24]

Costs to the moving party fixed, in accordance with the agreement of
    counsel, at $20,000, inclusive of disbursements and taxes.

Released: July 29, 2016 RJS

Robert J. Sharpe
    J.A.

Janet Simmons J.A.

M.L. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Mackey v. Rerrie, 2016 ONCA 541

DATE: 20160706

DOCKET: C60492

MacPherson, Cronk and Benotto JJ.A.

BETWEEN

Suzanne Mackey

Applicant/Mother
Respondent in this Appeal

and

Richard Rerrie

Respondent/Father
Appellant in this Appeal

Steven Benmor, for the appellant

Paul C. Buttigieg, for the respondent

Heard: July 5, 2016

On appeal from the order of Justice Meredith Donohue of
    the Superior Court of Justice, dated April 16, 2015.

ENDORSEMENT

[1]

Mr. Rerrie appeals the order of Donohue J. which dismissed his motion to
    set aside an uncontested order.

[2]

In October 2012, the respondent commenced an action for divorce,
    custody, support and equalization of net family property. The appellant did not
    participate in the proceedings. He filed no answer, no financial documentation,
    failed to attend case conferences, fell into arrears of support and was noted
    in default. The trial proceeded on an uncontested basis before Seppi J. on
    September 17, 2014.

[3]

Seppi J. granted custody of the two children to the respondent with
    access to the appellant. She also awarded the respondent child support,
    equalization and a vesting order of the matrimonial home.

[4]

When the appellant learned of the order of Seppi J., he moved before
    Donohue J. to set it aside. On this motion, the appellant did not file a
    financial statement. The motion judge concluded that there was no evidence
    before her to indicate that the result before Seppi J. would have been
    different. With respect to custody, she said that it would not be in the best
    interests of the children (now age 15 and 9) to re-open the action.

[5]

The appellants attack on the motion judges decision rests in part on
    unsworn financial information filed for the first time on appeal. This
    information purports to set out the value of the parties assets, and, he
    alleges demonstrates inaccuracies in the respondents financial statement on
    which the uncontested order was based.

[6]

The most fundamental obligation of a party to a family law action is to
    make early, complete financial disclosure. The appellant has never filed a
    financial statement. It is not open to him now to rely on unsworn financial
    information that was not part of the record before the motion judge.

[7]

The appellant further submitted that the problem was with his previous
    lawyer, not with him. However, no properly constituted claim for ineffective
    assistance has been advanced before us. The appellants previous counsel does
    not appear to have been given notice of this claim or an opportunity to
    respond.

[8]

The motion judge based her decision on the evidence before her. She
    correctly applied the law. We see no basis for appellate intervention.

[9]

The appeal is dismissed with costs in the amount of $5,000, inclusive of
    disbursements and HST. The costs may be enforced by the Family Responsibility
    Office as part of support.

J.C. MacPherson J.A.

E.A. Cronk J.A.

M.L. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Madhai v. Cox, 2016 ONCA 547

DATE: 20160707

DOCKET: C59000

MacPherson, Simmons and Lauwers JJ.A.

BETWEEN

Ramnarace Madhai, Raggani Madhai, Roshini Madhai,
    Rohani Madhai, Reshma Madhai, Trisha Madhai, and Rishi Madhai and Vidya Madhai
    by their litigation guardian Ramnarace Madhai

Plaintiffs (Appellants)

and

Dawn Marie Cox, Entesham A.R. Ahmed and Mohammed
    S. Ahmed

Defendants (Respondents)

No one appearing for the appellants

Jennifer Reid, for the respondents Entesham A.R. Ahmed
    and Mohammed S. Ahmed

Andrew Choi, for the respondent Minister of Finance

Heard: June 30, 2016

On appeal from the judgment of Justice Edward M. Morgan
    of the Superior Court of Justice, dated May 30, 2014.

APPEAL BOOK ENDORSEMENT

[1]

The appeal is dismissed as abandoned.

[2]

The appellants counsel did not appear today. Both counsel on the
    respondents side had difficulty communicating with her over the last two days.
    This morning, respondents counsel contacted her office and was informed by an
    assistant that Ms. Hussain is still too ill to attend. No one in her firm has
    appeared or contacted the court. We have serious doubts about the veracity of
    counsels position. There is simply nothing before us to support it.
    Accordingly, we are not prepared to accept the appellants counsels bald
    request, communicated in this mornings conversation with a law clerk, for
    another adjournment.

[3]

It may be that the appellants will want to bring a motion to set aside
    the order dismissing the appeal. If that is done, there needs to be an
    explanation, supported by appropriate medical documentation, for appellants
    counsels conduct on two occasions this week.

[4]

If a motion to set aside the order dismissing the appeal and seeking
    reinstatement of the appeal is brought, it is to be heard by one of Justices
    MacPherson, Simmons and Lauwers.

[5]

Costs to the respondents of the appeal, including the two attendances
    this week, fixed at $7558, inclusive of disbursements and HST.


COURT OF APPEAL
    FOR ONTARIO

CITATION: Mancinelli v. Barrick Gold Corporation, 2016 ONCA
    571

DATE: 20160718

DOCKET: C61288

Strathy C.J.O., Pepall and Brown JJ.A.

BETWEEN

Joseph S. Mancinelli, Carmen Principato, Douglas
    Serroul, Luigi Carrozzi, Manuel Bastos, Jack Oliveira and Cosmo Mandella, in
    their capacity as The Trustees of the Labourers Pension Fund of Central and
    Eastern Canada, Mike Gallagher, Joe Redshaw, Rick Kerr, Alex Law, Brian Foote,
    Ron Martin, John Hartley, Nick Dekoning and Joe Keyes, in their capacity as the
    Trustees of International Union of Operating Engineers, Local 793, Members
    Pension Benefit Trust of Ontario and Michael Wiener

Plaintiffs (Appellants)

and

Barrick
    Gold Corporation, Aaron Regent, Jamie Sokalsky,

Ammar Al-Joundi and Peter
    Kinver

Defendants

AND BETWEEN

The Trustees of the Drywall Acoustic Lathing and Insulation

Local 675
    Pension Fund and Royce Lee

Plaintiffs (Respondents in Appeal)

and

Barrick Gold
    Corporation, Aaron Regent, Jamie Sokalsky,

Ammar Al-Joundi and Peter
    Kinver

Defendants

Paul Pape, Shantona Chaudhury and Joanna Nairn, for the
    appellants

W.A. Derry Millar and Peter Jervis, for the respondents

Kent E. Thomson and Steven G. Frankel, for the
    Defendants

Heard: April 27, 2016

On appeal from the order of the Divisional Court
    (Swinton, Harvison Young and Lederer JJ.), dated May 21, 2015, with reasons
    reported at 2015 ONSC 2717, 126 O.R. (3d) 296.

Strathy C.J.O.:

[1]

This is an appeal in a carriage dispute. Two consortia of law firms are
    litigating the right to represent the class in a multi-billion dollar
    securities action against Barrick Gold Corporation and four named executives,
    over alleged misrepresentations in Barricks public filings.

[2]

The motion judge awarded carriage to a group led by Rochon Genova LLP
    (collectively, Rochon) and stayed an action brought by plaintiffs represented
    by Koskie Minsky LLP and others (collectively, Koskie). He preferred Rochons
    broader claims and more extensive preparation to Koskies more streamlined
    approach. Koskie appeals.

[3]

The motion judge applied the multi-factor test set out in
Vitapharm
    Canada Ltd. v. F. Hoffman-Laroche Ltd
., [2000] O.J No. 4594 (S.C.J). He
    made findings of fact in applying the factors to the competing consortia and
    determined the weight to be given to those factors. His findings are entitled
    to deference. The appellants demonstrated no legal error in the application of
    the test. Accordingly, for the reasons that follow, I would dismiss the appeal.

I.

Background

[4]

Barrick, a Canadian gold company, had interests in a mining project in
    Chile, referred to as the Pascua-Lama Project. It obtained approvals from the
    Chilean government to develop an open-pit mine, subject to conditions regarding
    the projects environmental impact.

[5]

The proposed class actions allege that during the class period, Barricks
    public disclosures represented that its activities in Pascua-Lama complied with
    Chilean regulatory requirements and that it had comprehensive environmental
    protection measures in place.

[6]

The actions arise from Barricks disclosure on April 10, 2013 that a
    Chilean court had issued an interlocutory order suspending construction of the
    mine. The following month, Chilean regulators closed the project due to
    environmental violations. The resulting plunge in Barricks share price spawned
    shareholder class actions in the U.S. and Canada, alleging that the company and
    some of its officers had violated the
Securities Act
, R.S.O. 1990, c.
    S.5, by misrepresenting the progress of the mine in Barricks public
    disclosures.

[7]

Three actions remain active in Ontario. Two, referred to as the Lee
    and DALI actions, were commenced by members of the Rochon consortium. If
    granted carriage, Rochon proposes to consolidate these actions. The third
    action, referred to as the Labourers action, was commenced by Koskie.

[8]

The actions seek damages in the billions of dollars. If certified, the
    proceeding will be one of the largest securities class actions in Canada.

[9]

The actions are grounded in the common law and Part XXIII.1 of the
Securities
    Act
, and allege negligent misrepresentations by Barrick relating to
    the development and operation of the Pascua-Lama Project. Koskies action,
    however, focuses only on alleged misrepresentations about environmental
    compliance. Rochons DALI action, on the other hand, is broader. It alleges
    misrepresentations in three related areas: environmental compliance, the
    capital expenditure budget and Barricks financial statements. The DALI action
    also includes claims of conspiracy and fraudulent concealment.

[10]

Rochon filed a motion to certify the DALI action on September 22, 2014. This
    prompted a motion by Koskie on October 20, 2014 for a carriage order and a stay
    of Rochons action. Rochon brought a similar motion on the same day. The
    carriage motion was heard on November 12 and 13, 2014.

II.

the test in carriage motions

[11]

There cannot be two or more certified class actions in the same
    jurisdiction representing the same class in relation to the same claim. Where
    there are rival actions, a practice has developed for a proposed representative
    plaintiff to bring a motion for authorization to have his or her action proceed
    on behalf of all class members and to stay pending or future proceedings
    relating to the same issues. This is referred to as a carriage motion.

[12]

There are several sources of the courts jurisdiction to grant such relief.
    Section 12 of the
Class Proceedings Act, 1992
, S.O. 1992, c. 6 (
CPA

)
authorizes the court to make any order it considers appropriate respecting the
    conduct of a class proceeding to ensure its fair and expeditious determination.
    Section 13 gives the court jurisdiction to stay any proceeding related to the
    class proceeding. Moreover, s. 138 of the
Courts of Justice Act
,
    R.S.O. 1990 c. C.43, provides that [a]s far as possible, multiplicity of legal
    proceedings shall be avoided. Section 106 provides that a court may stay any
    proceedings in the court on such terms as are considered just.

[13]

The seminal carriage case is the decision of Cumming J. of the Superior
    Court of Justice in
Vitapharm
. He identified, at para. 48, the main criteria
    for determination of a carriage motion as: (a) the policy objectives of the
CPA
,
    namely, access to justice, judicial economy for the parties and the
    administration of justice, and behaviour modification; (b) the best interests
    of all putative class members; and, at the same time, (c) fairness to
    defendants.

[14]

He listed, at para. 49, the following factors for consideration on a
    carriage motion: (i) the nature and scope of the causes of action advanced;
    (ii) the theories advanced by counsel as being supportive of the claims
    advanced; (iii) the state of each class action, including preparation; (iv) the
    number, size and extent of involvement of the proposed representative
    plaintiffs; (v) the relative priority of commencing the class actions; and (vi)
    the resources and experience of counsel.

[15]

In
Sharma v. Timminco Inc
. (2009), 99 O.R. (3d) 260, an
    additional factor was identified: (vii) the presence of any conflicts of
    interest.

[16]

In
Smith v. Sino-Forest Corporation
, 2012 ONSC 24, Perell J.
    described the foregoing factors as non-exhaustive. He added six others that he
    considered relevant to the circumstances of the competing actions before him:
    (viii) funding; (ix) definition of class membership; (x) definition of class
    period; (xi) joinder of defendants; (xii) the plaintiff and defendant
    correlation; and (xiii) prospects of certification.

[17]

This list remains non-exhaustive. Other factors may have significance in
    the unique circumstances of other cases. Determinative factors in one case may
    have little or no significance in another.

[18]

I suggest an additional factor that may have a bearing. The proposed fee
    arrangement between class counsel and the representative plaintiff is a factor
    that vitally affects the interests of the class. While the fee is ultimately
    subject to the approval of the court, significant differences between the fee
    arrangements may be considered on a carriage motion.

[19]

In the hearing in the Superior Court, the motion judge indicated that if
    the seven
Vitapharm
and
Sharma
factors had failed to yield a
    measurable and objective difference between the competing firms, he would have
    considered the fee arrangements of the respective consortia. Both counsel had
    proposed a 30 percent contingency fee, a common arrangement in class
    proceedings. He mused whether counsel might be prepared to reduce their fee to
    say 25, or 20, or 10 percent if granted carriage. He referred to the
    possibility of a reverse auction. I note in this regard that some United
    States courts have instituted competitive bidding procedures in carriage cases:
    see Federal Judicial Center,
Manual for Complex Litigation
, (3d U.S.
    West Publishing, 1995) at p. 221, citing
In re Wells Fargo Securities
    Litigation
, 156 F.R.D. 223, 157 F.R.D. 467 (N.D. Cal. 1994); and
In re
    Oracle Securities Litigation
, 131 F.R.D. 688, 132 F.R.D. 538 (N.D. Cal.
    1990), 136 F.R.D. 639 (N.D. Cal. 1991).

[20]

There is room for debate about whether auctioning the right to represent
    the class will be in the best interests of the class. Is it in the best
    interests of the class to be represented by counsel who is prepared to take on
    the onerous professional and financial challenges of serving as class counsel
    at the lowest price? Will such counsel have a strong incentive to settle the
    case to recover their discounted fee at the earliest moment? Will such counsel
    be vulnerable to being ground down by the defence? On the other hand, is an
    auction a legitimate proxy for market realities? The issue does not call for a
    decision in this case and I would leave it, if necessary, for another day.

[21]

It seems to me that regardless of the balancing of the other factors, counsels
    fee arrangements are a factor to be considered, among others.

[22]

I would resist a tick the boxes approach to carriage motions. The
    issue is not which law firm wins on the most factors. Rather, it is the best
    interests of the class and fairness to the defendants, having regard to access
    to justice, judicial economy and behaviour modification.

III.

Decisions in the courts below

A.

The motion judge

[23]

Near the beginning of his reasons, the motion judge observed that the
    choice on a carriage motion is not between the relative resources and expertise
    of the competing firms. Rather, the question is which of the competing actions
    is more likely to advance the interests of the class?: see
Sino Forest
at para. 19 and
Tiboni v. Merck Frosst Canada Ltd
., [2008] O.J. No.
    2996 (S.C.J.). affd [2009] O.J. No. 821 (Div. Ct.).  He also observed that the
    court should not embark on an analysis of which claim is most likely to
    succeed: see
Sino-Forest
at para. 20 and
Setterington v. Merck
    Frosst Canada Ltd.
, [2006] O.J. No. 376 at para. 19.

[24]

He concluded that in this case two of the
Vitapharm
factors
    were most significant and the remainder were neutral.

[25]

First, the causes of action being advanced in the Rochon claim were
    broader than those in the Koskie claim. He found that Rochons
    misrepresentation claims, and the conspiracy claim, were genuinely viable and
    had evidentiary support. The fraudulent concealment claim was pleaded to
    address potential limitation periods. It was in the best interest of the class
    that the proceeding not be limited to one claim when three were genuinely
    available.

[26]

Second, the motion judge found that Rochon had achieved a level of
    preparation that was measurably and objectively superior to the Koskie group.
    This was reflected in the statement of claim. He would have granted carriage to
    the Rochon group on this basis alone.

B.

Leave to Appeal

[27]

Nordheimer J. granted Koskies motion for leave to appeal to the
    Divisional Court. He recognized that decisions on carriage motions generally
    involve the exercise of discretion, but held that this case raised serious
    issues about the principles to be applied in the exercise of that discretion.
    He found that the reasons of the motion judge suggested there was a conflict
    between the decision in
Locking v. Armtec Infrastructure Inc.
, 2013
    ONSC 331,

and the decision in
Setterington
, a conflict that
    the Divisional Court should resolve. He also considered that there was good
    reason to doubt the correctness of the decision below and that the issue of
    carriage was a matter of importance in class proceedings that warranted the
    Divisional Courts consideration.

C.

Divisional Court

[28]

The Divisional Court noted that the
CPA
gives judges broad
    discretion. Reviewing courts, it said, should defer to their decisions, unless
    an error of law is established: see
Cloud v. Canada (Attorney General)
(2004), 73 O.R. (3d) 401 (C.A.);
Cassano v. Toronto Dominion Bank
,
    2007 ONCA 781. This is especially so when the motion judge is a member of the small
    group of judges across the province with expertise in class proceedings. If the
    motion judge has identified and applied the correct test in determining which
    of the competing actions is most likely to advance the interests of the class, his
    or her carriage decision is entitled to considerable deference.

[29]

The Divisional Court found that the motion judge made no error in law or
    principle and no palpable and overriding error of fact in considering and
    applying the cause of action/claims advanced factor. The motion judge
    considered the viability of the claims and the reasons advanced by the parties.
    He also carefully considered the applicable jurisprudence, including both
Setterington
and
Locking
(discussed later in these reasons). While the motion judge
    criticized
Locking
and stated that the decision was in conflict with
    what he found to be the preferable approach in
Setterington
, he
    applied both cases and reached the same conclusion in doing so.

[30]

The Divisional Court also agreed with the motion judges conclusion that
    the Rochon action was in a more advanced state of preparation and his finding that
    this reflected a sustained and in-depth pattern of research and preparation
    by Rochon, which would further the interests of the class.

[31]

The Divisional Court found that the motion judge articulated and applied
    the correct test. The application of the factors to the circumstances of the
    particular case is an exercise of discretion to which considerable deference is
    owed. Koskies submissions asked the court to reweigh the factors applied by
    the motion judge and did not demonstrate any reversible error in the exercise
    of his discretion. There was no basis on which to set aside the motion judges
    decision.

IV.

Submissions of the parties

A.

Appellants submissions

[32]

Although this is an appeal from the order of the Divisional Court,
    Koskie focussed its submissions on the motion judges alleged errors in
    principle. Koskie submits that the motion judge made four errors in principle.

[33]

First, and foremost, it says the motion judge erred in principle in
    preferring the complex and unworkable claim articulated by Rochon to the
    focused and streamlined theory pleaded by Koskie.

[34]

Second, the motion judge erred by examining the
quality
of Rochons preparation, whereas he ought to have considered the
stage
of preparation. The motion judge was unduly
    impressed that Rochon had taken a trip to Chile to meet with authorities and witnesses.
    Further, in attempting to win carriage, Rochon had disclosed its expert
    reports, contrary to the interests of the class.

[35]

Third, the motion judge failed to give any weight to the fact that
    Koskie had made a favourable third party funding arrangement and erred in
    assuming, without any factual basis, that Rochon would be able to do the same
    in short order.

[36]

Fourth, the motion judge failed to recognize Koskies greater expertise
    in securities class action and to take into account the history of disciplinary
    infractions and judicial criticism of the Merchant Law Group (Merchant), one
    of the members of the Rochon consortium.

B.

Respondents submissions

[37]

Rochon points out that there is no disagreement concerning the
    applicable test, nor with the proposition that a class action judge on a
    carriage motion has a broad discretion in the application of that test. The
    motion judge set out the correct test, identified and weighed the relevant
    factors and his decision is entitled to deference.

[38]

The motion judge made no error, Rochon says, in finding that a more
    comprehensive theory was in the best interests of the class and that, as found
    by the Divisional Court, the trip to Chile was only one of the factors that
    informed the motion judges conclusion that Rochon was better prepared.

[39]

There was evidentiary support for the conclusion that both consortia had
    extensive experience in class actions and securities litigation. The appellants
    position with respect to Merchant is hypocritical, Rochon says, given that
    members of the Koskie consortium had their own history of co-counsel agreements
    with Merchant.

V.

Analysis

[40]

I will discuss these grounds of appeal in order.

(1)

The pleadings and scope of the action

[41]

In my view, this appeal turns on the appellants argument with respect
    to the first
Vitapharm
factor: the nature and scope of the causes of
    action advanced. The appellants put a novel spin on this factor, in three ways.
    First, they say that this factor refers to the workability of the action, a
    term that is not found in any of the authorities. Second, they say that it
    should be given priority over other factors. Third, they say that as a general
    proposition less is more when it comes to the scope of the action and a
    streamlined claim, like Koskies, should be preferred to a more complex claim,
    like Rochons.

[42]

The appellants acknowledge that the merits of the respective claims are
    not at issue on a carriage motion. In
Setterington
, at para. 19,

Winkler
    J., as he then was, said that the claim may be scrutinized for glaring
    deficiencies or to see whether it is fanciful or frivolous. See also:
Sino-Forest
at para. 20. Apart from this, however, he said it is inappropriate for the
    court to embark on an analysis of which claim is most likely to succeed.

[43]

The Divisional Court did not address the issue identified by Nordheimer
    J. on the leave motion, namely the potential conflict identified by the motion
    judge between
Setterington
and the Divisional Court decision in
Locking
.
    The latter case suggested that when the competing actions are similar in strength
    a more detailed and nuanced analysis of the cause of action criteria may be
    required.

[44]

The appellants say that the proper question to ask is not whether one
    claim or the other will succeed, but rather whether the claims are workable.
    They submit that the Rochon claim is overly complex, that it would be costly
    and time-consuming to litigate and that it would eventually collapse under its
    own weight. They say that the motion judge should have analyzed the issue
    following the less is more principle.

[45]

In my view, it is and should be the rule that the court should not enter
    into an examination of the underlying merits of the respective claims on a
    carriage motion.
.
The motion judge gave three good reasons for the
    rule: (i) it is impossible to predict how the litigation will unfold and which
    claims will succeed and which will not; (ii) it is unfair and inappropriate to
    undertake such an analysis in full view of defence counsel; and (iii) a merits
    analysis should not be done on a carriage motion when it is not done on
    certification. I respectfully agree.

[46]

It is also my view, consistent with the jurisprudence, that there may be
    cases in which the actions are sufficiently indistinguishable that, to use the
    language of
Locking
, a more detailed analysis may be necessary: see,
e.g.
,
Sharma
. This analysis will not consider the merits but
    will consider, as the Divisional Court said in
Locking
,

at
    para. 23, the nature and scope of the causes of action advanced and the
    theories advanced by counsel for their approach to the case. This may include
    an assessment of the efficiency and costs of the competing strategies. I regard
    this factor as important, but not necessarily of greater importance than every
    other factor.

[47]

While some cases have given preference to lean actions over more
    comprehensive ones, I would reject any firm rule that less is more or,
    indeed, that more is better. The ultimate question is whether the proposed
    strategy is reasonable and defensible.

[48]

In this case, the motion judge appreciated the argument that the Koskie
    claim was simpler and more focused. But he noted that Rochons capital
    expenditure, accounting and conspiracy claims were viable and supported by the
    evidence. The conspiracy claim added a further basis of liability and,
    significantly, opened up the defendants exposure to damages in excess of the
    statutory limits. It could also help to lift the corporate veil. The conspiracy
    claim and the fraudulent concealment claim had a strong rationale and were
    genuinely viable.

[49]

In my view, this was precisely the kind of analysis that was
    appropriate. It resulted in the motion judge concluding that it was in the best
    interests of the class to plead the broader misrepresentation claims and the
    conspiracy and fraudulent concealment claims, resulting in a more comprehensive
    litigation framework.

[50]

The motion judge considered the appellants argument that their claim
    was more streamlined and ultimately concluded that Rochons viable and
    evidence-based claims provided the class with a more effective framework within
    which to litigate the claims. This was a call he was entitled to make.

(2)

State of preparation

[51]

I agree that in general the focus under this heading is the extent of
    preparation as opposed to the quality of preparation. As Winkler J. observed in
Setterington
,

at para. 22, this factor is relevant to the
    loss of efficiency and unfairness to the defendant if a less advanced action is
    given carriage. Nevertheless, quality of preparation can be a relevant factor.
    Perell J. did not consider it in
Sharma
, because he was unable to
    judge the relative quality of the work of the two firms, noting that it would
    be better assessed in the crucible of battle.

[52]

But since only one firm will go into battle, it is not unreasonable to
    ask which has done the best job in preparing itself for battle and whether its
    preparation has yielded benefits for the class. And this is precisely what the
    motion judge did.

[53]

He found that the Rochon pleading demonstrated a more informed and
    sophisticated understanding of the underlying factual issues than the more
    formalistic Koskie pleading. This was achieved through on-the-ground legal work,
    including retaining one of the leading environmental lawyers in Chile to
    prepare a detailed report, retaining a number of mining and financial experts, and
    going to Chile to meet with legal and government officials, to interview a
    large number of witnesses and to visit the mine site.

[54]

The motion judge found that it was this hands-on effort on the part of
    [Rochon] that best explains the detail and the deep understanding of the
    alleged environmental violations that was evident in Rochons statement of claim.
    The same superior level of understanding was found in Rochons pleading of the
    capital expenditure claim and the accounting claims. The motion judge concluded,
    at para. 48, that Rochon had conducted the more superior investigation and
    analysis of the facts and issues herein and is more prepared than [Koskie] to
    assume carriage of this proceeding forthwith.

[55]

These conclusions are appropriate and supported by the evidence.

[56]

Although not necessary to my conclusions, I will comment on two
    submissions made by counsel for Koskie.

[57]

First, he submits that it was improper for Rochon to produce its expert
    reports for the purpose of demonstrating its superior state of preparation, for
    this put the interests of counsel ahead of the interests of the class. It was
    detrimental to the class because it put their cards on the table in full view
    of the defendants. It appears this occurred in
Sharma
and
Sino-Forest
as well, where one party was more forthcoming in producing its work
    product: see
Sharma
at para. 86;
Sino-Forest
at paras. 24-26.
    Koskie submits that there should be a bright line rule that prevents the
    production of a partys expert evidence on a carriage motion.

[58]

I would not favour such a rule and would leave it to the good judgment
    of counsel and the supervisory jurisdiction of the court to prevent harm to the
    interests of the class.

[59]

Second, Koskie says it is an error in principle to give significant
    weight to events that take place after the carriage motion is scheduled.
    Rochons trip took place after the carriage motion had been scheduled and the
    motion judge should not have considered it.

[60]

The Divisional Court rejected this argument and found that the trip to
    Chile was only part of an ongoing and continuing narrative of preparation that
    began well before the motion was scheduled.

[61]

I would reject a rule that sees carriage motions decided based on a freeze
    frame on the date the motion is filed. For one thing, counsel cannot afford to
    down tools simply because a carriage motion is pending. For another, carriage
    motions can be contemplated in major class action litigation and the date of
    the carriage motion is an artificial one. That said, the court should be
    suspicious of conspicuous new activity after the filing of a carriage motion or
    of any attempts to leapfrog a lagging action ahead of a more advanced one.

(3)

Funding

[62]

Funding is one of the factors identified in
Sino-Forest
. It
    refers to access to external funding to provide indemnity against adverse costs
    awards and, in some cases, funding for disbursements.

[63]

Funding is an important consideration because it goes to the issue of
    whether the class, or, as is usually the case, class counsel, will be able to
    withstand adverse costs awards as the action progresses, or in the event it
    does not succeed at certification, trial or other interlocutory steps such as
    leave or summary judgment. The terms of the funding agreement are also
    important, because the funders fee is typically taken off the top of any
    settlement or judgment, thereby reducing the net available to the class.

[64]

In Ontario, the Class Proceedings Fund provides financing for
    disbursements and indemnity for costs awards in return for a 10 percent share
    of any settlement or judgment and reimbursement of funded disbursements. Funding
    arrangements with commercial third party funders have also been approved:
The
    Trustees of the Labourers Pension Fund of Central and Eastern Canada v.
    Sino-Forest Corporation
, 2012 ONSC 2937;
Dugal v. Manulife Financial
    Corporation
, 2011 ONSC 1785, 105 O.R. (3d) 364;
Rooney v. ArcelorMittal
    S.A
., 2013 ONSC 7768;
Musicians Pension Fund of Canada (Trustees of)
    v. Kinross Gold Corp
., 2013 ONSC 4974, 117 O.R. (3d) 150.

[65]

Koskie had entered into an agreement with a third party funder, Claims
    Funding International, which provided an indemnity against any adverse costs
    award in the action and $50,000 towards counsels disbursements. This was in
    return for a contingency fee of 7 percent, capped at $7 million if the action
    was resolved before the filing of a pre-trial conference brief and $10 million
    if resolved by settlement or judgment thereafter.

[66]

Koskie argued that this arrangement was very favourable because it was
    less than the 10 percent uncapped levy charged by the Class Proceedings Fund. Rochon
    had no funding agreement.

[67]

I agree with the Divisional Court that the motion judge did not err in
    finding that funding was not a significant differentiating factor. Rochons litigation
    plan stated that if granted carriage it would secure a funding arrangement. The
    motion judge expressed no doubt that it would be able to do so in short
    order. In light of his experience and his familiarity with the claim and the
    issues, this was a finding he was entitled to make.

(4)

Counsel

[68]

The appellants submit the motion judge should have engaged in a detailed
    weighing of the resources and expertise of the two counsel groups. They say
    that such an inquiry is mandated by the case law, including
Tiboni
at
    para. 26;
Setterington
at paras 22-24; and
Ricardo v. Air Transat
    A.T. Inc
., [2002] O.J. No. 1090 at para. 28. The appellants argue that if
    the motion judge had engaged in this weighing, he would have given far greater
    weight to his finding that Koskie had greater experience in securities class
    actions. He also would have been more concerned about the absence of evidence
    from the other members of the Rochon consortium, its failure to produce the
    agreement between counsel (including fee-sharing arrangements) and the presence
    of Merchant in the consortium.

[69]

The motion judge observed that any one of the elite class action firms
    who were members of the consortia would have more than enough expertise and
    experience on their own to do an excellent job as carriage counsel. As he
    pointed out, both consortia had added external securities specialists to their teams.

[70]

Like the Divisional Court, I see no error in law or principle nor
    palpable and overriding factual error in the motion judges reasons on this factor.
    They were fully supported by the record. It is not our function to reweigh the
    evidence.

[71]

Neither party filed the agreements between members of the consortia as
    to their fee and work allocation arrangements. Since the fee is ultimately
    borne by class members, the court has an interest in how the work and fees are
    divided. Where appropriate, it is open to the court to require counsel to
    provide evidence as to the allocation of responsibilities and fees between
    members of the consortia. In this case, the appellants have not demonstrated
    that the motion judge erred in the exercise of his discretion by not doing so.

[72]

The court has a duty to protect class members and a broader duty to the
    administration of justice when approving counsel in a carriage motion. The
    discharge of this duty may require the exclusion of counsel due to prior
    misconduct. It may also require the exclusion of counsel with a record of commencing
    class actions, not pursuing them, and then using them to demand ransom from
    other counsel in carriage disputes. The motion judge was clearly aware of these
    duties and of Merchants history and I am not prepared to say that he erred in
    the exercise of his discretion in awarding carriage to Rochon in spite of Merchants
    participation in that consortium.

(5)

The undertaking

[73]

One of the components of the carriage test is whether the outcome is
    fair to the defendant: see
Setterington
at para. 13. Usually, this
    requires a consideration of whether giving carriage to one counsel over another
    would require the defendant to retrace steps already taken in the other
    proceeding. As a result, the defendant has standing on a carriage motion.

[74]

Barrick proposed an innovative and practical solution to the problem of
    overlapping or duplicative class actions. It requested an undertaking from counsel
    on both sides to prevent the continuation or commencement of multiple
    proceedings in Canadian jurisdictions. The parties agreed, and the motion judge
    made an order in the following terms: [Rochon and Koskie] are directed to take
    all necessary steps to permanently stay or dismiss any parallel Canadian
    proceeding that they or their local agents have commenced and not to commence,
    instruct local agents to commence or otherwise permit, facilitate or encourage
    the commencement of any other parallel Canadian proceedings.

[75]

Counsel for Barrick appeared in the Divisional Court to request that the
    undertakings be maintained. Counsel for the competing counsel groups repeated
    their agreement to the undertaking and the Divisional Court ordered that it be
    continued.

[76]

Counsel for Barrick appeared before us to ensure that the undertakings and
    the orders giving effect to them would remain in place. The parties
    acknowledged this was the case.

VI.

Conclusion and order

[77]

For these reasons, I would dismiss the appeal. The undertakings given
    by the parties remain in effect. By agreement between the parties, I would make
    no order as to costs.

G.R. Strathy C.J.O.

I agree S.E. Pepall
    J.A.

I agree D.M. Brown
    J.A.

Released: July 18, 2016


COURT OF APPEAL FOR ONTARIO

CITATION: Northern Industrial Services Group Inc. v. Duguay,
    2016 ONCA 539

DATE: 20160707

DOCKET: C61019

MacPherson, Cronk and Benotto JJ.A.

BETWEEN

Northern Industrial
    Services Group Inc.

Plaintiff/Defendant by
    Counterclaim/

(Appellant)

and

Maurice Duguay Sr.
, Maurice Duguay Jr., Docithee Rondeau

and
    2362969 Ontario Inc. c.o.b. as DSI Services

Defendants (Respondent)

Bob Yu, for the appellant

Sylvano A. Carlesso, for the respondent

Heard: July 5, 2016

On appeal from the judgment of Justice Robin Y. Tremblay of
    the Superior Court of Justice, dated July 29, 2015.

By the Court:

[1]

The appellant, Northern Industrial Services Group Inc. (NISG), appeals
    from the summary judgment granted by the motion judge in favour of the
    respondent, Maurice Duguay Sr. (Duguay Sr.), whereby the motion judge: i)
    dismissed NISGs action as against Duguay Sr. for damages for breach of
    contract and fiduciary duty; and ii) granted Duguay Sr.s counterclaim for
    $274,900, plus interest, for monies owed to him by NISG under a share purchase
    agreement, and costs.

[2]

For the reasons that follow, we conclude that the appeal must be
    dismissed.

I.        Background in Brief

[3]

For many years, Duguay Sr. owned and operated a company in Timmins that
    engaged in commercial and industrial high pressure washing, vacuuming and
    associated services.  He employed his son, Maurice Duguay Jr. (Duguay Jr.),
    in the business for about 11 years.

[4]

On September 28, 2011, as he was approaching retirement, Duguay Sr.
    entered into a written share purchase agreement (the Share Purchase
    Agreement) with a predecessor company to NISG whereby he sold all his shares
    in his company for the aggregate amount of $550,000.  The purchase price was
    payable in three instalments over two years: i) $100 on closing; ii) $274,950
    on September 28, 2012; and iii) the remaining sum of $274,950 on September 28, 2013.

[5]

The Schedules to the Share Purchase Agreement included a non-competition
    agreement, signed by Duguay Sr. in favour of NISG.  As relevant to this appeal,
    it provided that, for a period of four years, Duguay Sr. could not, directly or
    indirectly, engage in or aid, assist or abet others in engaging in any
    business, conduct or activity in competition with [NISG].  Neither Duguay Jr. nor
    DSI were parties to the non-competition agreement.

[6]

After the closing of the share purchase transaction, Duguay Jr. remained
    in  NISGs employ for approximately 18 or 19 months.  In the spring of 2013, he
    quit his job with NISG and, together with a partner, incorporated the defendant
    2362969 Ontario Inc. to carry on a rival commercial and industrial washing
    enterprise under the name DSI Services (DSI).

[7]

NISG paid the first two instalment payments to Duguay Sr. due under the
    Share Purchase Agreement.  However, it failed to make the third and final
    payment of $274,950 due on September 28, 2013.  Instead, on the same day, it commenced
    proceedings against Duguay Sr., Duguay Jr., DSI and others, claiming, as
    against Duguay Sr., that he had breached the terms of the non-competition
    agreement by funding Duguay Jr. and DSI, and by providing real and personal
    property to Duguay Jr. and DSI for use in DSIs competing business.  It also
    sought damages for breach of fiduciary duty, although this claim, as pleaded,
    appears to have been in the alternative.

[8]

Duguay Sr. denied these allegations.  When the dispute could not be
    resolved, Duguay Sr. defended the action and, in turn, counterclaimed against
    NISG for the outstanding payment owed to him under the Share Purchase Agreement
    for the purchase of his shares.  In late February 2014, he moved in the
    Superior Court of Justice for summary judgment dismissing the main action as
    against him and granting judgment in his favour on the counterclaim.  His
    co-defendants did not join in the motion.

II.       Issues

[9]

NISG attacks the motion judges decision on multiple grounds.  In
    essence, it argues that the motion judge misapprehended the governing test for
    summary judgment, made factual findings that are either unsupported by or
    inconsistent with the evidentiary record, failed to resolve ambiguities that he
    held existed in certain of the evidence relied on by NISG and further failed to
    properly assess the evidence relating to NISGs claimed damages.  Its arguments
    on appeal are confined to its breach of contract claim against Duguay Sr.

[10]

We reject these arguments for the following reasons.

III.       Discussion

(1)

Liability

[11]

We see no basis on which to fault the motion judges approach to or
    application of the test for summary judgment.

[12]

After setting out the undisputed background facts and the parties
    positions on the motion, the motion judge turned directly to the principles
    governing motions for summary judgment.  He referenced
Hryniak v. Mauldin
,
    [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, and set out in some detail, at paras.
    14-18 of his reasons, the roadmap to a motion for summary judgment outlined
    in
Hryniak
by the Supreme Court.  He then noted, correctly, at para.
    19:

The moving party must lead evidence that there is no genuine
    issue requiring a trial, demonstrating that a trial is unnecessary to truly,
    fairly and justly resolve the issues.  It is only after the moving party has
    met its onus that the burden shifts to the responding party to show that there
    is a genuine issue requiring a trial.  [Citations omitted.]

[13]

The motion judge did not err in his description of the principles
    applicable to the determination whether to grant summary judgment.  His reasons
    confirm that he understood the legal test for summary judgment and applied it
    to the facts as he found them.

[14]

And it is in the latter regard that NISGs challenge to the motion
    judges decision founders.  Contrary to NISGs submission, the motion judges
    critical factual findings were amply supported by the evidentiary record.  They
    included the following:

(1)

The
    funds alleged by NISG to have been provided by Duguay Sr. to his son to fund
    DSI (a total of $40,000 advanced by Duguay Sr. between April 21, 2013 and June
    4, 2013), formed part of monies paid by Duguay Sr. to Duguay Jr. in recognition
    of the latters many years of service with his fathers company;

(2)

Duguay
    Sr. promised to pay these, and other funds, to his son prior to the creation of
    DSI, at a time when Duguay Jr. was still working for NISG;

(3)

As
    admitted by Alan Perello, the principal of NISG, on his cross-examination,
    NISGs claim that the payments in issue were intended by Duguay Sr. to fund DSI
    was based on rumours.  NISG had no hard facts to support the claim;

(4)

Although
    NISG maintained that Duguay Sr. and Duguay Jr. admitted in a recorded
    conversation on September 30, 2013 that Duguay Sr. provided funding to DSI, the
    alleged admissions were not clearly made.  To the contrary, the statements in
    question were far from clear and subject to interpretation;

(5)

Duguay
    Sr. provided a detailed breakdown of how his son expended the monies given to
    him by his father, establishing that they were used to pay for his sons
    personal expenses, including the expenses of his matrimonial separation;

(6)

In
    particular, there was no evidence proffered by NISG demonstrating that Duguay
    Sr. provided money to his son for the specific purpose of funding DSI or with
    the knowledge that the money furnished by him would be used to fund DSI; and

(7)

Similarly,
    no breach of the non-competition agreement by the provision of property or
    assistance to DSI by Duguay Sr. was established on the whole of the evidence.
    The only relevant evidence in this regard reflected normal assistance, of a
    limited and transitory nature, that might be expected between a father and son,
    rather than a larger pattern of continuing provision of property or other assistance
    to DSI.

[15]

As we have said, these key findings were firmly anchored in the
    evidentiary record.  They are dispositive of the issue whether Duguay Sr.
    breached the terms of the non-competition agreement.

[16]

Having found that certain of the evidence relied on by NISG to prove its
    breach of contract claim was ambiguous or inconclusive, the motion judge was
    not obliged to undertake detailed credibility assessments or to resolve the
    ambiguities in question.  It was sufficient to establish Duguay Sr.s
    entitlement to summary judgment to find, as the motion judge did, that NISG
    owed the debt in question under the Share Purchase Agreement and that NISG had
    failed to put its best foot forward on the motion by adducing clear and
    reliable evidence of Duguay Sr.s breach of the non-competition agreement.

[17]

Perhaps most telling, in this regard, was Mr. Perellos own admission,
    binding on NISG, that he had no firm facts but, rather, only rumours to support
    NISGs breach claim.  Suspicions alone cannot establish breach of contract.

(2)

Damages

[18]

As we see no basis for appellate interference with the motion judges
    holding that Duguay Sr. did not breach the non-competition agreement, no issue
    of set-off of NISGs alleged damages arises.  For the same reason, it is
    unnecessary to address NISGs argument that the motion judge erred in his
    assessment of the evidence regarding NISGs damages claim.  Similarly, as the
    appeal must be dismissed, we do not reach NISGs request for a stay of the
    judgment granted on Duguay Sr.s counterclaim.

[19]

We note that the summary judgment granted by the motion judge pertains
    only to Duguay Sr. NISGs action against the other defendants has not been
    dismissed.  Should that action proceed, it will be open to NISG to advance
    those arguments that it regards as appropriate, in the normal course.

IV.      Disposition

[20]

The appeal, therefore, is dismissed.  Duguay Sr. is entitled to his
    costs of the appeal, fixed in the amount of $16,950, inclusive of disbursements
    and H.S.T.

Released:

JCM                                                            J.C.
    MacPherson J.A.

JUL 7 2016                                       E.A.
    Cronk J.A.

M.L.
    Benotto J.A.