COURT OF APPEAL FOR ONTARIO

CITATION: Nadeau v. Caparelli, 2016 ONCA 730

DATE: 20161006

DOCKET: C61648

Hoy A.C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Henri Nadeau

Plaintiff (Respondent)

and

Angelo Caparelli
, Jacques Chatelain, and
2292819
    Ontario Inc.

Defendants (
Appellants
)

Thomas W. Curran, for the appellants

Hank Witteveen, for the respondent

Heard: July 22, 2016

On appeal from the judgment of Justice Timothy D. Ray of
    the Superior Court of Justice dated December 30, 2015, with reasons reported at
    2015 ONSC 6944 and 2015 ONSC 8042.

Brown J.A.:

Overview

[1]

The appellants, Angelo Caparelli and 2292819 Ontario Inc. (229),
    appeal the summary judgment in the amount of $70,000 granted against them in
    favour of the respondent, Henri Nadeau,

and 1117251 Ontario Inc. (111), a corporation controlled by Nadeau.

[2]

The appellants submit the motion judge erred in failing to find that
    a genuine issue requiring a trial existed as to whether 111 had made a valid
    equitable assignment to Nadeau of an October 19, 2011 promissory note in the
    principal amount of $70,000 executed by Caparelli and another in favour of 111 (the
    Note) and guaranteed by 229. The appellants also submit the motion judge
    erred in adding 111 as a party plaintiff
nunc pro tunc
.

[3]

I would dismiss the appeal. The evidence supported the motion
    judges finding that no genuine issue requiring a trial existed on the issue of
    whether 111 had assigned the Note to Nadeau. As well, by adding 111 as a
    co-plaintiff
nunc pro tunc
more than two years
    after the due date of the Note, the motion judge did not deprive the appellants
    of a limitation defence because the
Limitations Act, 2002
, S.O. 2002, c. 24, Sched. B,

was not engaged in the circumstances.

Chronology of events

[4]

As part of the 2011 sale of a nursing home business by 111 to 229,
    Caparelli and another executed the Note.  229 gave 111 a guarantee of the obligations
    under the Note.

[5]

At the time of the sale, Nadeau and his wife were the sole officers,
    directors and shareholders of 111; Nadeaus wife died before this action was
    started. Following the sale, shareholder loans remained due and owing from 111
    to Nadeau.

[6]

By an assignment dated November 1, 2011 (the 2011 Assignment), 111
    assigned to Nadeau all its rights to a possible claim in respect to deposit monies
    paid under terms of the subject agreement for the sale of the nursing home.
    The assignment provided that the proceeds of such claim were to be applied and
    credited to Nadeaus shareholder loan to 111.

[7]

No payment was made on the Note when it became due on July 21, 2013.

[8]

No steps were taken to recover on the Note until March 31, 2015,
    when counsel for Nadeau wrote to the appellants advising that Nadeau was the
    assignee of the Note and enclosed a copy of the 2011 Assignment. Counsel
    demanded payment of the Note by April 15, 2015 on behalf of Nadeau.

[9]

No payment was made in response to the demand, so Nadeau commenced
    this action on May 7, 2015 seeking payment on the Note and Guarantee. He did
    not name 111 as a co-plaintiff in the action. The Statement of Claim pleaded
    that following the sale of the nursing home business, 111 ceased operations and
    assigned the promissory note  to the plaintiff
Nadeau
(italics in original). No particulars of the assignment were
    pleaded.

[10]

The appellants defended the action.
Their
    main defence was that
111 was insolvent and indebted to third
    parties at the time it allegedly assigned the Note, with the result that the
    assignment was invalid at law as an attempt to defraud the creditors of 111.

[11]

On September 1, 2015 Nadeau, as an officer and director
    of 111, executed a further assignment from the company to himself (the 2015
    Assignment). The recitals stated the 2011 Assignment purported to assign all
    the remaining assets of 111 to Nadeau, but had failed to specifically mention the
    Note. The recitals continued by stating 111 wishes to further evidence its
    intention to assign all of its assets to  Nadeau in consideration of his
    shareholder loans to the Corporation including the [Note]. 111 assigned to
    Nadeau all its rights in any remaining assets including without limitation the
    [Note].

[12]

Nadeau then initiated a summary judgment motion.

The rulings of the motion judge

[13]

The motion judge rejected the appellants
    argument that 111 could not make the 2011 Assignment because it was insolvent:
    2015 ONSC 6944, at para. 6. The motion judge found that a valid equitable
    assignment of the Note to Nadeau took effect March 31, 2015 when the written
    demand on the defendant was made: 2015 ONSC 8042, at para. 7.

[14]

In dealing with the
appellants

limitation defence

argument,
the motion

judge
concluded
    that when Nadeau commenced the action in his name on May 7, 2015, Nadeau had
    the legal right to commence the action as the equitable assignment of the [Note]
    had taken effect: 2015 ONSC 8042, at para. 9. The action therefore was not
    statute-barred.

[15]

Nadeau had not sought to add 111 as a
    co-plaintiff as part of the relief specified in his notice of motion, but did
    seek such relief at the hearing of the motion. The motion judge held there would
    be no prejudice to the appellants by joining 111: [B]ecause the plaintiff is
    also the directing mind of 111, failure to join 111 as a party plaintiff smacks
    of a technicality: 2015 ONSC 8042, at para. 11. He added 111 as a plaintiff
nunc
    pro tunc
.

ANALYSIS

The validity of the assignment

[16]

The appellants submit the motion judge erred in
    concluding 111 made a valid equitable assignment of the Note to Nadeau which
    took effect on March 31, 2015, when Nadeau made a written demand on the
    appellants.

[17]

I would not accept this submission.

[18]

The parties agreed no assignment of the Note
    took place from 111 to Nadeau that complied with s. 53(1) of the
Conveyancing
    and Law of Property Act
, R.S.O. 1990, c. C.34.
[1]
The issue on the motion then became whether Nadeau had demonstrated no genuine
    issue requiring a trial existed as to whether 111 had made an equitable
    assignment of the Note to Nadeau.

[19]

Equity does not require a particular form to
    effect a valid assignment, but whatever form is used must clearly show an
    intention that the assignee is to have the benefit of the debt or chose in
    action assigned:
Halsburys Laws of Canada
, Personal
    Property and Secured Transactions (Markham: LexisNexis Canada, 2013), at
    HPS-110 and HPS-111; G.H.L. Fridman,
The Law of Contract in Canada
,

6th ed. (Toronto: Thomson Reuters Canada, 2011)
, at pp. 648-49. As summarized by Michael Furmston in
Cheshire,
    Fifoot & Furmstons

Law of Contract
, 16th
    ed. (Oxford: Oxford University Press, 2012), at p. 636:

The transaction upon which the assignee relies
    need not even purport to be an assignment nor use the language of an
    assignment. If the intention of the assignor clearly is that the contractual
    right shall become the property of the assignee, then equity requires him to do
    all that is necessary to implement his intention. The only essential and the
    only difficulty is to ascertain that such is the intention. [Citations omitted.]

[20]

Where a corporation assigns an asset to its
    shareholder, one usually would expect to see evidence of the assignment in the
    form of a corporate resolution or written assignment, such as the 2015
    Assignment executed in September 2015. In the present case, however, the motion
    judge relied on two acts to find that 111 had made an equitable assignment of
    the Note: (i) the sending of the March 31, 2015 written demand for payment to
    the appellants; and (ii) the commencement of the action on May 7, 2015.

[21]

On their face, both acts were undertaken by Nadeau,
    not by 111, the owner of the Note. However, Nadeau was the sole director,
    officer and shareholder of 111, within whose sole control lay the formalities
    of any assignment of the Note from 111 to himself. In those circumstances,
    instructing counsel to send a letter informing the appellants of the assignment
    of the Note by 111 before commencing the action operated as sufficient evidence
    of a clear intention by 111 to assign the Note to Nadeau. Accordingly, I see no
    error in the motion judges conclusion that by the time the action was
    commenced, 111 had made an equitable assignment of the Note to Nadeau.

Addition of 111 as a party
    plaintiff

[22]

The appellants also submit the motion judge
    erred by adding 111 as a party plaintiff
nunc pro tunc.

[23]

First, the appellants contend the motion hearing
    process was unfair because the motion judge added 111 on his own initiative. I
    see no merit in that submission. Although Nadeau did not request the joinder of
    111 in his notice of motion, counsel requested such relief at the continuation
    of the hearing on December 23, 2015. I see no unfairness in that process. It
    lay within the discretion of the motion judge to consider Nadeaus request to
    add the assignor as a party as long as he considered any potential prejudice to
    the appellants, which he did:
Landmark Vehicle Leasing Corp. v.
    Mister Twister Inc.
, 2015 ONCA 545, at para. 14; r.
    5.03(6).

[24]

Second, the appellants argue the addition of 111
    caused them prejudice. In their submission, Nadeau could not bring suit on the
    Note without joining the assignor, 111, as a necessary party. Since he did not
    do so before the expiry of the July 21, 2015 limitation date, the subsequent
    joinder of 111 as a plaintiff
nunc pro tunc
deprived
    the appellants of their limitation defence, with the result the motion judge
    erred in granting summary judgment against them.

[25]

I would not accept this submission. In my view,
    111 was not a necessary party to the action, so no limitation period issue
    arose.

[26]

In
Freudmann-Cohen v. Tran
(2004), 70 O.R. (3d) 667 (C.A.), at para. 31, this court commented
    that whether an assignee can or cannot sue in its own name is a facet of the
    law that is shrouded in mystery and history. While the question of joinder certainly
    is linked to the history of the former division between the courts of common
    law and the courts of equity, the shrouds of mystery were largely dissipated by
    this court in
DiGuilo v. Boland
, [1958] O.R.
    384, (C.A.), affd [1961] S.C.R. vii.

[27]

DiGuilo
clarified that there are four
    kinds of assignments: legal assignments of legal and of equitable choses in
    action, and equitable assignments of legal and of equitable choses. According
    to
DiGuilo
, the following principles determine
    whether an assignee must join an assignor as party to an action to enforce an
    assignment:

(i)      In
    the case of a legal assignment of either a legal or equitable chose  i.e. an
    assignment that complies with s. 53
(1)
of the
Conveyancing
    and Law of Property Act

the assignee can sue alone:
DiGuilo
, at p. 397;

(ii)      An assignee also can sue alone where there is an equitable
    assignment of an equitable chose in action. This followed from rule 89 (then rule
    88) of the former
Rules of Practice
, R.R.O. 1980, Reg. 540, as amended, which stated:
    An assignee of a chose in action may sue in respect thereof without making the
    assignor a party. In
DiGuilo
, this court limited the scope of former rule 89 to equitable
    assignments of equitable choses in action (at p. 402-3);

(iii)     In
    the case of an equitable assignment of a legal chose in action, however, the
    assignee must join the assignor as a necessary party (at pp. 397 and 403).

[28]

When, in 1985, the
Rules of Practice
were replaced by the
Rules of Civil Procedure
, former rule 89 gave way to what is now rule 5.03(3), which states:

5.03(3)
In a proceeding by the assignee of a debt or other chose in action, the
    assignor shall be joined as a party unless,

(a) the
    assignment is absolute and not by way of charge only; and

(b) notice in
    writing has been given to the person liable in respect of the debt or chose in
    action that it has been assigned to the assignee.

[29]

The motion judge did not refer to rule 5.03(3)
    in his reasons, and it is not clear that the parties drew his attention to it.

[30]

The impact of rule 5.03(3) on the principles of
    joinder laid down in
DiGuilo

has not received prior
    consideration by this court. In the present case, the parties agreed the
    assignment of the Note did not meet the requirements of s. 53
(1)
of the
CLPA
. It follows that the assignment
    was an equitable assignment of a legal chose of action. While the principles stated
    in
DiGuilo
would require the joinder of the
    assignor for an action on such an assignment, in my view rule 5.03(3) modifies
DiGuilo
to the following extent: as long as the assignment was absolute and
    notice in writing was given to the appellants of the assignment, Nadeau was not
    required to join 111 as a party.

[31]

The evidence disclosed the assignment was
    absolute. The March 31, 2015 letter from Nadeaus counsel to the appellants
    contained no suggestion that 111 had retained any interest in the Note, as was
    confirmed by the subsequent commencement of the action in Nadeaus name alone.
    As well, the March 31, 2015 letter gave written notice that Nadeau was the
    assignee of a promissory note given by [the appellants]. The requirements of
    r. 5.03(3) were thereby met, permitting Nadeau to bring a proceeding on the
    assigned Note in his own name without joining 111 as a party. That being the
    case, no limitation period issue arose because Nadeau, as the sole necessary
    party, commenced the action on the Note within two years of its due date.

[32]

Since the appellants contend the assignment of
    the Note did not meet the requirements of r. 5.03(3), I would conclude by
    observing that even if it did not, in the circumstances of this case there
    would be no reason to interfere with the motion judges conclusion that the
    appellants did not suffer any prejudice from the joinder of 111. An equitable assignees
    failure to add an assignor as a party would be an irregularity, leaving it open
    to the motion judge to grant all necessary amendments or other relief, on such
    terms as are just, to secure the just determination of the real matters in
    dispute: rule 2.01(1).

[33]

Nor would the joinder
    of the assignor
nunc pro tunc
deprive the appellants of the substantive
    right of a limitation defence, as contended by them. This court rejected a
    similar argument in
Canning v. Avigdor
, [1961] O.W.N. 59, at p. 65:

[I]t was argued that it was too late at the date of the trial
    to have [the assignors] added, because by that time the Statute of Limitations
    had run against them. For this reason, it was urged they should not be added,
    and consequently, in the absence of the assignors as parties, there was no
    cause of action in the plaintiff.

In my view, however, the assignor, having no interest, the
    Statute of Limitations has no application and cannot, in such case, be used for
    the purpose of preventing the addition of an assignor as a party.

[34]

In the event the
    assignment of the Note had not complied with r. 5.03(3), the reasoning in
Canning
would apply equally to the present case, with the result that the joinder of 111
    as a plaintiff would not have engaged issues under the
Limitations Act, 2002
.

[35]

Accordingly, the motion judge did not err in
    granting summary judgment.

DISPOSITION

[36]

For the reasons set out above, I would dismiss the appeal.

[37]

The respondent is entitled to its costs of the appeal fixed at
    $10,000, inclusive of HST and disbursements.

Released: October 6, 2016 (AH)

David Brown J.A.

I agree Alexandra Hoy A.C.J.O.

I agree Grant Huscroft J.A.

[1]
Section 53(1) Any absolute assignment made on or after the 31st day of
    December, 1897, by writing under the hand of the assignor, not purporting to be
    by way of charge only, of any debt or other legal chose in action of which
    express notice in writing has been given to the debtor, trustee or other person
    from whom the assignor would have been entitled to receive or claim such debt
    or chose in action is effectual in law, subject to all equities that would have
    been entitled to priority over the right of the assignee if this section had
    not been enacted, to pass and transfer the legal right to such debt or chose in
    action from the date of such notice, and all legal and other remedies for the
    same, and the power to give a good discharge for the same without the
    concurrence of the assignor.


COURT OF APPEAL FOR ONTARIO

CITATION: Norton McMullen Consulting Inc. v. Boreham, 2016
ONCA 778

DATE: 20161024

DOCKET: C61089

Hoy A.C.J.O., Benotto and Huscroft JJ.A.

BETWEEN

Norton McMullen Consulting
Inc.,
and
Paul Simpson

Plaintiffs (Respondents)

and

Paul Boreham
,
401 Energy Ltd.,

MFOP Wind Power
Ltd.
and
Last Chance Wind Power Corp.

Defendants (Appellants)

and

Attorney General of
Ontario

Intervener

AND BETWEEN

Paul Boreham, 401 Energy
Ltd., MFOP Wind Power Ltd. and Gateway Wind Farms Development Inc.

Plaintiffs (Appellants)

and

Norton McMullen & Co. LLP, Paul Simpson
and Rob Gilroy

Defendants (Respondents)

H. Scott Fairley and N. Joan Kasozi, for the appellants,
Paul Boreham, 401 Energy Ltd., MFOP Wind Power Ltd.

Lisa C. Munro, for the respondents, Norton McMuller
Consulting Inc., Paul Simpson and Rob Gilroy

Karen Phung and Michael Shell for the respondents, Norton
McMuller Consulting Inc. and Paul Simpson

Heard: October 7, 2016

On appeal from the judgment of Justice Edward M. Morgan
of the Superior Court of Justice, dated October 16, 2015.

ENDORSEMENT

[1]

This appeal was dismissed, with reasons to follow. These are those
reasons.

[2]

The appellants were involved in two separate actions. They were
plaintiffs in one and defendants in the other. They sought to consolidate the
two actions.  However, the respondents successfully moved for summary judgment
against the appellants in the action they were defending. The motions judge
then declined to consolidate the actions since there was only one action left.
The appellants seek to have the two actions remitted to trial and consolidated.

[3]

The respondent Norton McCullen Consulting Inc (NMC) sued the appellant
Paul Boreham and his associated companies (collectively, Boreham) for amounts
owing under two agreements between the parties: a Consulting Agreement and a
Letter of Credit Agreement. In a separate action, Boreham sued Norton McMullen
& Co. LLP (NMA), an accounting firm of which NMC is an offshoot, for
negligence and breach of fiduciary duty.

[4]

The events that gave rise to these actions concerned a business venture
(the Project) in which Boreham sought to exploit the Ontario provincial
governments Feed-in Tariff (FIT) program for wind power, more specifically a
bonus component of the FIT program called the Community Price Adder. The
Project involved several companies, the corporate and shareholding structures
of which he designed to comply with what he believed to be the requirements for
access to the Community Price Adder. At the time of his corporate planning,
Boreham believed that the only requirement was to have majority shareholding by
local investors. Therefore, he incorporated ten project companies, selling
51% of the shares of each to local investors and  retaining the remaining 49%
of the shares, as well as the revenue from the share sales, in his controlled
holding company, 401 Energy Ltd. (401). However, he later learned that the
Community Price Adder required not only that the local investors own the
majority of the shares, but also that they have 50% of the real economic
interest.  The Project did not qualify because the local investors real
economic interest was limited to the aggregate of $4.3 million they paid for
their shares and the total development cost for the Project was $200-250
million.

[5]

In 2009, while still operating under a mistaken understanding of the
Projects regulatory architecture, Boreham retained Paul Simpson, a partner at
NMA, with a mandate to obtain investors for the Project. Boreham had previously
retained NMA for tax accounting services. In March 2010 the Consulting
Agreement in issue was signed. It provided that Simpson, through NMC would seek
to find potential investors. A scale of fees was included that depended upon
the selling price secured.

[6]

Boreham then required $500,000 to post as performance security for his
FIT contract with the provincial government. Simpson agreed to post a letter of
credit personally and the Letter of Credit Agreement at issue was signed.

[7]

Boreham received legal advice with respect to both the Consulting
Agreement and the Letter of Credit Agreement.

[8]

Eventually, with Borehams involvement, Simpson and Borehams lawyer negotiated
a sale of the equity in the  Project.

[9]

NMC and Simpson sued Boreham for amounts owing on the Letter of Credit
and the Consulting Agreement and moved for summary judgment. Boreham argued
that the agreements were unenforceable. The motion judge disagreed, granted summary
judgment and dismissed the motion to consolidate. Borehams action against MN
and Simpson remains outstanding.

[10]

The appellants submit that the motion judge erred in granting summary
judgment because:

(1)

This was not an appropriate case
for summary judgment;

(2)

The Consulting Agreement and the
Letter of Credit Agreement are unenforceable because they are in substance loan
agreements and impose interest contrary to s. 347 of the
Criminal Code
and were procured in violation of the fiduciary duty that Simpson owed to
Boreham and other equitable principles;; and

(3)

Boreham was not personally
liable to NMC.

[11]

We do not accept these submissions.

[12]

We agree with the motions judge when he described the action as a
document-driven case. The parties communicated with each other by email; they
documented all of their agreements through lawyers; and there were no real credibility
issues. The transactions between the parties involved the enforcement of
carefully negotiated, thoroughly lawyered, and unambiguously drafted contracts
(Reasons, at para. 77). This was precisely the type of case that should be
determined by way of summary judgment.

[13]

The motions judge found that the Letter of Credit Agreement was an
investment agreement and not a loan agreement and that no circumstances giving
rise to a fiduciary duty existed. He also found that Boreham was a party to
both agreements in a personal capacity. There is no basis to interfere with
these findings.

[14]

The appellants did not plead or argue below that the Consulting
Agreement was in substance a loan agreement and that the effect of the success
fee that it provided for was to impose interest contrary to s. 347 of the
Criminal
Code.
This is a sufficient basis to reject this argument on appeal. In any
event, the Consulting Agreement is, as it is entitled, an agreement for the
provision of services and is not, in substance, a loan agreement. The fact
that, in face of Borehams cash-flow problems, Simpson agreed to defer hourly
fees and accept a success fee did not convert the Consulting Agreement into a
loan agreement.

[15]

The appellants also argue that: through the arrangement created by the
Consulting Agreement, Simpson became Borehams agent; as a result, Simpson owed
Boreham a fiduciary duty or other equitable principles were triggered; and Simpson
breached that duty or those equitable principles when he negotiated the Letter
of Credit Agreement, which, Boreham argues, is overly favourable to Simpson. The
appellants did not plead that Simpson acted as Borehams agent, and it is not
clear that this was argued below. But the argument in any event fails in face
of the motion judges finding as to the nature of Simpson and Borehams working
relationship. He wrote, at para. 38, that  the documentation shows Boreham to
have been involved in instructing Simpson and approving or rejecting various
proposals at every step. As the motion judge concluded, there was no basis to
impose a fiduciary duty on Simpson.

[16]

The appeal is dismissed with costs payable to NMC and Simpson fixed at
$25,000; and to NMA with costs fixed at $8,000. All costs are inclusive of
disbursements and HST.

Alexandra
Hoy A.C.J.O

M.L. Benotto
J.A.

Grant Huscroft
J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Novatrax International Inc. v. Hägele Landtechnik
    GmbH, 2016 ONCA 771

DATE:
20161020

DOCKET: C58088

Doherty, Feldman and Brown JJ.A.

BETWEEN

Novatrax International Inc.

Plaintiff (Appellant)

and

Hägele Landtechnik GmbH, Karl Hägele, Benjamin Hägele
    and Cleanfix North America Ltd.

Defendants (Respondents)

Craig Bryson, for the appellant

Evan L. Tingley, for the respondents

Heard: June 24, 2016

On appeal from the order of Justice F. Ian Leach of the Superior
    Court of Justice, dated November 22, 2013.

Brown J.A.:

[1]

In July 2006, the appellant, Novatrax International Inc., renewed an
    Exclusive Sales Agreement (ESA) with the respondent, Hägele Landtechnik GmbH,
    under which it would continue to distribute industrial reversible fans in
    Canada and the United States. Either party could terminate the ESA on 12
    months notice, or without notice in specified circumstances.

[2]

On November 24, 2009, Hägele notified Novatrax that it was terminating
    the ESA immediately for cause. In January 2010, Novatrax commenced an action
    for damages alleging wrongful termination of the ESA and tortious misconduct
    against Hägele, its principals, the individual respondents Karl Hägele and
    Benjamin Hägele, and Cleanfix North America Ltd. (Cleanfix), a
related
company set up by Hägele to sell its products
    directly into the Canadian and American markets.

[3]

Section 18 of the ESA contains a forum selection clause which states:

The contractual parties agree that German law is binding and to
    settle any disputes by a binding arbitration through the Industrie und
    Handelskammer (Chamber of Commerce) in Frankfurt.

[4]

The respondents moved to stay the action relying on the forum selection clause.
    The motion judge granted a stay. Novatrax appeals.

ISSUES ON APPEAL

[5]

The parties agree that the motion judge correctly identified the
    governing principles as those set out by the Supreme Court of Canada in
Z.I.
    Pompey Industrie v. ECU-Line N.V
.
, 2003 SCC 27, [2003] 1 S.C.R.
    450, and by this court in
Expedition Helicopters Inc. v. Honeywell Inc
.
,
    2010 ONCA 351, 100 O.R. (3d) 241, leave to appeal refused, [2010] 3 S.C.R. v
    (note), and
2249659 Ontario Ltd. v. Sparkasse Siegen
, 2013 ONCA 354,
    115 O.R. (3d) 241:

(i)

The law favours the enforcement of forum
    selection clauses in commercial contracts. Where the parties have agreed to a
    forum selection clause, the starting point of the
forum non conveniens
analysis is that the parties should be held to their bargain;

(ii)

A stay of an action should be granted unless
    the plaintiff shows strong cause that the case is exceptional and the forum
    selection clause should not be enforced;

(iii)

The requirement that the plaintiff show
    strong cause presumes that there is an agreement containing a clear forum
    selection clause and that clause, by its terms, applies to the claims the
    plaintiff seeks to bring in Ontario; and

(iv)

The forum selection clause pervades the
forum non conveniens
analysis and must be given full weight in the consideration of other factors.

[6]

Novatrax submits the motion judge erred in two respects when he applied the
    strong cause test to its pleaded claims. He erred:

(i)

in finding that the language of the forum
    selection clause  to settle any disputes by a binding arbitration  was
    broad enough to capture both the contract and tort claims pleaded by Novatrax against
    Hägele; and

(ii)

in relying on the forum selection clause to
    stay the action against the respondents who were not parties to the ESA - Karl
    Hägele, Benjamin Hägele, and Cleanfix.

FIRST
    ISSUE: DID THE MOTION JUDGE ERR IN INTERPRETING THE SCOPE OF THE FORUM
    SELECTION CLAUSE?

The Contract Claims
    against
Hägele

[7]

In its Statement of Claim, Novatrax asserts several contract claims
    against Hägele: (i) wrongful termination of the ESA; (ii) breach of the duty of
    good faith by accessing confidential Novatrax information when Benjamin Hägele was
    permitted to set up an office within the appellants facility; and (iii) breach
    of the duty of good faith in communicating the termination of the ESA to
    Novatraxs employees and its financial lender.

[8]

Novatrax submits the motion judge erred by failing to find that it had
    shown strong cause not to enforce the forum selection clause. Novatrax points to
    the decision in
Expedition Helicopters
where, at para. 24, this court
    stated one factor which may justify departure from the general principle of
    enforcing a forum selection clause in a commercial contract is where the claim
    or the circumstances that have arisen are outside of what was reasonably
    contemplated by the parties when they agreed to the clause. Novatrax contends
    the high-handed and wrongful manner in which Hägele terminated the ESA was not
    contemplated at the time it entered into the contract, so the forum selection clause
    should not be enforced in the circumstances.

[9]

I do not accept that submission for three reasons.

[10]

First, the scope of a forum selection clause is not determined by the
    professed subjective intention of one of the contracting parties at the time
    the contract was formed. Whether the nature of a claim lies outside of what was
    reasonably contemplated at the time the contract was signed turns on the interpretation
    of the forum selection clause in accordance with general contract law
    principles and the degree of connectedness between the nature of the claims
    pleaded and those covered by the clause.

[11]

Second, the forum selection clause requires the parties to settle any
    disputes by a binding arbitrationin Frankfurt. Disputes can arise in respect
    of any stage in the life of a contract: formation, performance, and termination
    or expiration. Novatraxs contractual claims against Hägele concern the
    performance and termination of the ESA. The language of s. 18 of the ESA is
    broad enough to include, within the term any disputes, claims relating to any
    stage of the ESA's life-cycle, including the wrongful termination and breach of
    duty of good faith claims pleaded by Novatrax.

[12]

Third, the motion judge correctly held that the severity of the alleged breach
    of contract does not play a role in the strong cause analysis. As the Supreme
    Court of Canada stated in
Pompey
, at para. 31:

[A] court, in the context of an application for a stay to
    uphold a forum selection clause must not delve into whether one party has
    deviated from, or fundamentally breached an otherwise validly formed contract.
    Such inquiries would render forum selection clauses illusory since most
    disputes will involve allegations which, if proved, will make the agreement
    terminable or voidable by the aggrieved party.

[13]

In the present case, Novatraxs claims of wrongful termination and
    breach of the duty of good faith all concern the performance and termination of
    the contract between the parties. They clearly fall within the scope of s. 18
    of the ESA, and the motion judge was correct in so holding.

The Tort Claims against Hägele

[14]

Novatrax also pleads claims in tort against Hägele, specifically that:
    (i) Hägele misrepresented the circumstances of the ESAs termination to Novatraxs
    employees and bank for the purpose of interfering with Novatraxs relationship
    with its employees, customers, and bank; and (ii) Hägele engaged in unfair
    competition by setting up Cleanfix, through which Hägele sold its products
    after terminating the ESA.  Novatrax submits that the motion judge erred by
    holding the forum selection clause covered not only breaches of contract
    stemming from the agreement in which such clauses are found, but also related
    tortious causes of action arising out of the same circumstances.

[15]

I see no error in the motion judges conclusion. It is well-established that
    a broad forum selection clause covering any disputes applies not only to
    contract claims, but also tort claims  such as misrepresentation, interference
    with economic relations and civil conspiracy  that arise from the contractual
    relationship:
Crown Resources Corporation S.A. v. National Iranian Oil
    Company (2006)
, 273 D.L.R. (4th) 65, [2006] O.J. No. 3345 (C.A.), at para.
    33, citing with approval
Scalas Fashions Limited v. Yorkton Securities Inc
.
,
    2003 BCCA 366, 17 B.C.L.R. (4th) 65, at para. 35.

SECOND
    ISSUE: DID THE MOTION JUDGE ERR IN STAYING THE ACTION AGAINST THE RESPONDENTS
    WHO WERE NOT PARTIES TO THE ESA?

[16]

Novatrax has sued Karl Hägele and Benjamin Hägele, whom the Statement of
    Claim describes as the principals and/or employees, officers or directors of
    Hägele, as well as Hägele
s related company,
Cleanfix.
    Both individual respondents reside in Germany. Cleanfix is a CBCA corporation
    incorporated in June 2009.

[17]

Novatrax pleads it involved the individual respondents in its future
    strategic business decisions when Hägele asked it to allow Benjamin Hägele to
    set up an office within Novatraxs facility. Novatrax alleges Benjamin Hägele thereby
    gained access to its confidential and proprietary information. Hägele, the
    individual respondents, and Cleanfix are then alleged to have utilized that
    access to Novatraxs information to terminate the ESA, notify employees and the
    bank about the termination, and enable Cleanfix to springboard into the North
    American marketplace and allow these defendants to compete directly, but
    unfairly, with Novatrax in this specialized sales market.

[18]

The motion judge held that the individual respondents were added as
    parties to the action because of their relationship to Hägele, and Cleanfix was
    added because it was the corporation created by the other respondents to
    further their common purpose. Citing
Momentous.ca Corporation v. Canadian
    American Association of Professional Baseball Ltd
.
, 2010 ONCA 722,
    103 O.R. (3d) 467, at para. 53, affd 2012 SCC 9, [2012] 1 S.C.R. 359, the
    motion judge concluded:

[W]here the plaintiff itself takes a position in its claim,
    (and supports the position by advancing allegations of a nature that make its
    position clear), that the allegations against the parties not privy to the
    contract are so intertwined with the claims being asserted against a party that
    is a party to the contract that they should be heard and decided together, and
    where the allegations clearly all relate to and arise out of the dealings between
    the parties to the contract, that the choice of forum clause agreed to by the
    plaintiff should govern [citation omitted].

[19]

Novatrax submits the conduct of the non-contracting respondents was not
    within the reasonable contemplation of the contracting parties when the ESA was
    made and therefore the motion judge erred in concluding the language of s. 18
    was broad enough to encompass the claims pleaded against them.

[20]

I do not accept that submission. The motion judge correctly followed and
    applied the reasoning of this court in
Momentous.ca
. In that case, a
    professional baseball team in Ottawa ceased operations, as a result of which
    the league in which the team was a member drew down a letter of credit posted
    by the team. The agreements between the team and the league contained a choice
    of forum clause requiring all disputes with the league to be resolved by
    arbitration in the state of North Carolina.

[21]

The team commenced an action in Ontario asserting contract and tort
    claims against the league, its principals, and the City of Ottawa  the owner
    of the stadium in which the team played its games. In upholding the stay of the
    action granted on the basis of the forum selection clause, this court observed
    that the plaintiffs claims for relief against the defendants who were not
    parties to the contract containing the forum selection clause all arose out of
    the same transactions and occurrences and raised common questions of fact and
    law. This court continued, at para. 53:

In the light of these allegations, the plaintiffs cannot
    maintain that they ought to be allowed to proceed separately in Ontario against
    the City of Ottawa and Wolff personally. Their claims against the City and
    Wolff personally are so intertwined with the claims against the Can-Am
    defendants that they must all be dealt with together. Moreover, the claims
    against the City and Wolff all relate to and arise out of the plaintiffs'
    dealings with the League. The choice of forum clause agreed to by the
    plaintiffs must therefore govern where their claims should be heard. Thus, even
    though neither the City nor Wolff personally is a party to an agreement
    containing a choice of forum clause, on the present state of the pleadings, the
    claims against them should be dealt with not in Ontario but in North Carolina.

[22]

The motion judge concluded that those comments by this court in
Momentus.ca
are equally applicable to this case. I agree. As this court emphasized in
Expedition
    Helicopters
, at para. 11, the forum selection clause pervades the
forum
    non conveniens

analysis and must be given full weight in the
    consideration of other factors. Even though Cleanfix and the individual
    respondents are not parties to the ESA, the claims pleaded against them all
    arise out of the same transactions and occurrences and raise common questions
    of fact and law linked to the claims pleaded against Hägele. The
    factually-intertwined nature of the claims pleaded by Novatrax against all
    respondents requires, at this stage of the litigation, that the forum selection
    clause drive the stay analysis.

[23]

In her dissent, my colleague disagrees with that result, stating that it
    would be tantamount to adopting the proposition that a party who has not agreed
    to arbitration with another can be forced to arbitrate its claims against that
    party. In my respectful view, that would not be the effect of dismissing the
    appeal.

[24]

I agree with my colleague that a court lacks the jurisdiction to compel
    those who are not parties to an arbitration agreement to submit their claims to
    arbitration. I also agree with my colleague that the factors set out by the
    Alberta Court of Appeal in
UCANU Manufacturing Corp. v. Calgary (City of)
,
    2015 ABCA 22,
[2015] A.J. No. 58,
offer useful guidance
    to a court faced with a motion to stay an action by reason of an arbitration
    clause where some of the claimants are not parties to the arbitration
    agreement.

[25]

However, whether the issues for arbitration are substantially the same
    as those in the action requires consideration of how the plaintiff has pleaded
    its claim. Here, the claims pleaded by Novatrax against all respondents are
    factually-intertwined and turn on the determination of the threshold issue of
    whether Hägele wrongfully terminated the ESA. As well, it is very doubtful that
    the claims pleaded against the two individual respondents  both officers and
    directors of Hägele  are sustainable as claims distinct from those against Hägele
    because they do not exhibit a separate identity or intent from that of the
    company so as to make the act or conduct complained of that of the individuals:
Budd v. Gentra
(1998), 111 O.A.C. 288, at para. 25;
Density Group
    Ltd. v. HK Hotels LLC
, 2014 ONCA 605,
324 O.A.C. 292,
at
    paras. 163-9.

[26]

The practical effect of the motion judges exercise of his discretion in
    the present case is to require the issue of whether Hägele wrongfully
    terminated the ESA to be decided first in an arbitration. That exercise of
    discretion is entitled to considerable deference on appeal absent an error in
    principle, misapprehension of the evidence, or unreasonable decision:
Lapointe
    Rosentein Marchand Melan
çon v. Cassels Brock
, 2016 SCC 30,
[2016] S.C.J. No. 30,
at para. 54. In my view, the motion
    judge did not commit any such error nor did he reach an unreasonable result by
    including the claims against Cleanfix and the individual respondents within the
    ambit of the stay.

DISPOSITION

[27]

For the reasons set out above, I would dismiss the appeal. Based on the
    agreement reached by counsel, I would award the successful respondents their costs
    of the appeal fixed at $7,500, inclusive of disbursements and HST.

David
    Brown J.A.

I
    agree Doherty J.A.

Feldman J.A. (dissenting in part):

[28]

There are two legal issues in this case. The first is the application of
    the choice of law, choice of forum and arbitration clause in the Exclusive
    Sales Agreement between the appellant, Novatrax International Inc., and the
    corporate respondent, Hägele Landtechnik GmbH, to the appellants claims
    against the corporate respondent, Hägele. The second is its application to the
    appellants claims against the other respondents, Karl Hägele, Benjamin Hägele
    and Cleanfix North America Ltd., with whom the appellant had no agreement.

[29]

I agree that on the first issue, the motion judge was entitled to find
    that the appellant failed to show strong cause why the choice of law, choice of
    forum and arbitration clause in the contract with the corporate respondent
    Hägele should not be enforced, and therefore to stay the appellants claims
    against Hägele in Ontario.

[30]

However, I do not agree with Brown J.A.s decision to uphold the motion
    judges order that the appellants claims against the non-contracting
    respondents should also be stayed and referred to arbitration in Germany. The
    motion judge concluded on that issue:

I think there is also little or no practical benefit of
    suggesting that the claims against one or more defendants proceed in Germany
    while other proceedings proceed on a separate course here in Ontario, (at least
    according to the state of the existing pleading), and that such multiplicity of
    such proceedings is not to be encouraged.

So  on that basis then, I think that the analysis that I set
    forth earlier in relation to enforcement of choice of forum clauses and
    enforcement of arbitration clauses applies in equal measure to the remaining
    defendants; that is, the defendants other than the German corporate defendant.

[31]

Both the motion judge and Brown J.A. rely on this courts decision in
Momentous.ca Corp. v. Canadian American
    Association of Professional Baseball Ltd.
, 2010 ONCA 722
,
103 O.R. (3d) 467,
as the basis for that decision. In my
    view,
Momentous.ca
is distinguishable, and does not stand for the
    proposition that a party, like the appellant, who has not agreed to arbitration
    with another, can be forced to arbitrate its claims against that party.

[32]

It is trite law that an arbitration agreement gives an arbitrator
    jurisdiction only over disputes between the parties to the agreement. Where it
    is clear on the face of the arbitration agreement that a party to the
    litigation is not a party to the agreement, that issue can and should be
    determined by the court on a stay application. Moreover, an arbitrator cannot
    make an arbitral award that disposes of the rights between a party and a
    non-party to the agreement. See
Gulf Canada Resources Ltd. v. Arochem
    International Ltd.
(1992), 66 B.C.L.R. (2d) 113 (C.A.), at paras. 39-40;
Ontario
    v. Imperial Tobacco Canada Ltd.
, 2011 ONCA 525, 338 D.L.R. (4th) 282, at
    paras. 119, 141-42.

[33]

The decision in
Momentous.ca
does not purport to contravene
    these propositions.

[34]

In that case, the plaintiffs were related companies that owned a
    baseball team. They entered into agreements with the defendant baseball league
    to facilitate the operation of the team within the league, playing in Ottawa at
    a municipally-owned stadium. They also entered into a letter agreement with Mr.
    Wolff, who was a director of the league, as well as part owner of the relevant
    league membership rights. After its first year in operation, the team was not
    financially successful, causing the league to call on a $200,000 letter of
    credit given by one of the plaintiffs.

[35]

The plaintiffs agreements with the league contained choice of forum and
    arbitration clauses, which required all disputes to be arbitrated, resolved,
    and enforced in North Carolina. Mr. Wolff and the City of Ottawa were not
    parties to the plaintiffs agreements with the league.

[36]

The plaintiffs sued the defendants in Ontario for wrongfully terminating
    their membership in the league and calling on the letter of credit. The claim
    alleged that all defendants conspired by misrepresentation and other means to
    wrongfully enforce the letter of credit, to force the plaintiffs out of the
    league and to cause them to suffer financial loss.

[37]

In their statement of claim, the plaintiffs specifically pleaded that
    the claims against all parties were properly joined on the ground that the
    claims for relief against the defendants arise out of the same transactions and
    occurrences; there are common questions of fact and law; damage and loss has
    been caused to the plaintiffs by the defendants and the joinder of all claims
    will promote the convenient administration of justice: para. 56. The
    plaintiffs further pleaded that every named defendant is a person or party
    whose presence is necessary to enable the court to adjudicate effectively and
    completely on the issues in a proceeding: para. 57.
[1]

[38]

After determining that the plaintiffs had not shown strong cause why the
    North Carolina choice of forum and arbitration clauses contained in the
    plaintiffs agreements with the league should not govern their claims against
    it, the court turned to the plaintiffs submission that Mr. Wolff and the City
    of Ottawa, who were not parties to those agreements, should submit to the
    jurisdiction of the Ontario court.

[39]

Laskin J.A. held that the plaintiffs position might have some validity
    but for the way they have pleaded their claim: para. 52. Because the
    plaintiffs specifically alleged that all the defendants were necessary parties
    to the same action, that they conspired together against the plaintiffs, that
    the claims raised common questions of fact and law, that they arose out of the
    same occurrences, and that their joinder would promote the convenient
    administration of justice, the plaintiffs could not maintain that they should
    be allowed to proceed separately with the action in Ontario against the City of
    Ottawa and Mr. Wolff personally. The court therefore concluded that despite the
    fact that those two defendants were not parties to the agreements containing
    the choice of forum and arbitration clauses, on the present state of the
    pleadings, the claims against them should be dealt with in North Carolina:
    para. 53.

[40]

However, Laskin J.A. went on to say that the severable claims against
    Mr. Wolff personally, and against the City for reneging on its long-term lease
    commitment with the plaintiffs, could be redrafted and asserted in a new action
    in Ontario. Laskin J.A.s analysis was adopted by the Supreme Court of Canada:
    see
Momentous.ca Corp. v. Canadian American Association of Professional
    Baseball Ltd.
, 2012 SCC 9, [2012] 1 S.C.R. 359, at para. 11.

[41]

This court in
Momentous.ca
did not discuss the fact that an
    arbitrator would have no jurisdiction over a dispute between the plaintiffs and
    the two non-parties to the arbitration agreement unless on consent of all of
    them. However, in my view, it is clear from the courts analysis that the court
    took from the plaintiffs pleading that they understood that jurisdiction over
    the claims as pleaded was an all or nothing proposition. Therefore, the
    plaintiffs would be expected to consent to arbitration in North Carolina
    against the two strangers to the arbitration agreement if the court in Ontario
    did not allow them to proceed in this jurisdiction on the claims as pleaded.
    Alternatively, as Laskin J.A. suggested, they could redraft their claims and
    recommence an action in Ontario only against Mr. Wolff and the City of Ottawa.

[42]

To be clear, the court in
Momentous.ca
was not suggesting that
    the plaintiffs could be forced, without their consent, to arbitrate out of the
    jurisdiction with parties with whom they had no arbitration agreement, and be
    deprived of their right to access to a court. That would be a change in the law
    of arbitration that would have required a significant jurisprudential and
    policy analysis.

[43]

The facts and findings in
Momentous.ca
make it wholly
    distinguishable from this case. The statement of claim in this case deals
    separately with the claims against the corporate respondent Hägele for breach
    of contract and wrongful termination of the Exclusive Sales Agreement. It then
    makes claims against all of the respondents for other conduct.

[44]

The claims against the two principals of Hägele, Karl Hägele and
    Benjamin Hägele, are for negligence, unfair competition, misrepresentation, bad
    faith and interference with economic relations. The appellant pleads that the
    two principals requested that the appellant involve them in its future
    strategic business decisions, and also that Benjamin Hägele be given an office
    at the appellants facility and access to its information. The appellant
    further pleads that the two principals then misused and diverted that
    information in order to transfer the fan distribution business to their new
    corporation, Cleanfix, contacting the appellants customers, financial lender
    and employees.

[45]

Cleanfix is a Canadian corporation that was incorporated by the
    principals of Hägele in 2009, three years after the Exclusive Sales Agreement
    was entered into. It is not a subsidiary of the corporate respondent. The
    appellant claims that Cleanfix engaged in unfair competition, and requests an
    accounting of profits as well as a prohibition order, among other forms of
    relief.

[46]

The conduct of the other respondents is relied on by the appellant to
    substantiate its claim that Hägeles wrongful termination of the agreement was
    part of a planned strategy to obtain control of the business market in North
    America.

[47]

However, there is no specific claim by the appellant that its claims
    must all be dealt with together. Certainly, it would be convenient to have all
    matters arising out of the breakdown of the business relationship among these
    parties dealt with in one proceeding. But unlike in
Momentous.ca
, there
    is no plea by the appellant that they must be. Nor are the claims necessarily
    so intertwined that the claims against the individual respondents for their
    deliberate conduct and the new Canadian corporation for wrongfully
    appropriating the appellants business could not be heard separately from the
    claims against Hägele. There is no basis to infer consent by the appellant to
    arbitrate its claims against the non-contracting parties in Germany or to apply
    German law.

[48]

As there is no basis to infer consent to arbitrate by the appellant, in
    my view, it is an error of law to purport to send the claims against the
    respondents who were not parties to the choice of law, choice of forum and
    arbitration clause contained in the Exclusive Sales Agreement to arbitration,
    as was done in
Momentous.ca
.

[49]

The next issue is whether the court should have ordered a stay of the
    non-arbitrable claims against those respondents, pending the outcome of the
    arbitration with Hägele, and what test should have been applied.

[50]

The issue of how to fairly address the question of jurisdiction where
    some parties are subject to an arbitration agreement and some clearly are not
    has been considered more frequently in the Alberta courts. Those courts have
    consistently recognized that where parties are not subject to an arbitration
    agreement, claims arising under their contracts cannot be referred to
    arbitration. It is in that context that the Court of Appeal of Alberta has
    developed a principled approach to determine when a stay of the non-arbitrable
    claims should be ordered. Importantly, the purpose of the stay is not to refer
    the non-arbitrable claims to arbitration together with the arbitrable claims,
    but to await the result of the arbitration of the claims between the agreeing
    parties.

[51]

In
Kaverit Steel and Crane Ltd. v. Kone Corp.

(1992),
    120 A.R. 346, at paras. 13-15 and 19-21, leave to appeal to S.C.C. refused,
    [1992] S.C.C.A. No. 117, the Court of Appeal of Alberta explained the governing
    principles where a court is asked to stay an action that involves claims
    against non-parties to an arbitration agreement pending arbitration:

I agree with the learned chambers judge that he has no
    authority to order these other plaintiffs to submit their claims to
    arbitration. (I do observe that he can stay claims pending arbitration if
    indeed they are derivative and must await the arbitration decision.)

Similarly, I agree with the learned Queen's Bench judge that he
    cannot send the distributor's claims against the licensor's subsidiaries to
    arbitration in the absence of consent by
all
the
    parties. Again, counsel for the licensor accepted this point during argument.
    (Again I note that a judge might stay a suit against them if the arbitration
    will effectively resolve the claim against them.)

Associated and connected parties like subsidiaries,
    shareholders, directors, employees, agents and the like might be required to
    join an arbitration in one of three ways: by the governing law, by the
    submission itself, to the extent the parties to the contract can bind other
    parties, or by the later agreement of the other parties. None of these three
    yet applies here.

I accept that forcing the subsidiaries to partake in the
    arbitration may well be sensible and practical. I insist only that it is for
    the parties or the Legislature, not me, to decide what procedure is right for
    these cases.

I think it prudent to emphasize the limited nature of this
    ruling. One must distinguish between jurisdiction to grant relief and jurisdiction
    to consider actions. The subsidiaries are not parties to the arbitration in the
    sense that the claimant might get relief against them directly. But arbitrators
    might nevertheless decide that, for the purpose of relief against the
    principal, they can rely upon what the subsidiaries did. Moreover, the
    arbitrators might decide that the actions of the subsidiaries make the
    principal liable, and might offer relief against the principal for what they
    did.

I agree with the learned Queen's Bench judge that he cannot
    refer any of the claims of any of the "extra" parties to arbitration.
    I add only that he might nevertheless stay claims pending arbitration when it
    would appear just and equitable to do so. He might also strike a claim for
    failure to disclose a cause of action. Both opportunities await another day in
    Queen's Bench. Subject to the right to apply in Queen's Bench for another kind
    of stay, I would reject these grounds of appeal. [Emphasis in original.]

[52]

In
UCANU Manufacturing Corp. v. Calgary (City of)
, 2015 ABCA
    22, [2015] A.J. No. 58, the Court of Appeal of Alberta endorsed three factors
    to be considered when determining whether to stay an action that is not subject
    to arbitration pending the outcome of arbitration. Those factors are: 1)
    whether the issues in the arbitration are substantially the same as the issues
    in the action; 2) whether the defendant has satisfied the court that continuing
    the action would work an injustice on him or her; and 3) whether the defendant
    has satisfied the court that staying the action would not cause an injustice to
    the plaintiff.

[53]

Those factors were applied recently in Alberta in
Toyota Tsusho
    Wheatland Inc. v. Encana Corp.
, 2016 ABQB 209, 84 C.P.C. (7th) 360. Toyota
    Tsusho Wheatland Inc. (Toyota) and Encana had entered into a number of
    agreements for oil and gas development, two of which contained agreements for
    international arbitration of disputes. PrairieSky Royalty Ltd., a former
    subsidiary of Encana, was not a party to the agreements. When Toyota sued
    Encana and PrairieSky in Alberta, Encana moved for a stay of the entire action
    so that all issues could be referred to arbitration. Toyota and PrairieSky both
    opposed the stay.

[54]

The court stayed the action against Encana, but allowed the action
    against PrairieSky to proceed based on the following considerations, at paras.
    74-75:

I have considered the three factors identified in
UCANU
:

1. The issues in the Arbitration and in the Action are
    substantially similar as the key issue in both proceedings is whether the
    PrairieSky Transactions constituted a breach of the Royalty Agreement.

2. Encana may be inconvenienced if it is required to produce
    witnesses or documents in the Action or if it is third partied by PrairieSky as
    it could be subjected to duplicative processes and be required to participate
    simultaneously in both proceedings. It might also face the prospect of
    inconsistent decisions in the Action and in the Arbitration, although as other
    courts have noted, this is unlikely:
Kaverit
at para 47. While Encana
    may suffer some inconvenience, it has not demonstrated that continuance of the
    Action would cause it to suffer significant substantive injustice. When parties
    elect to enter into broadly drafted arbitration agreements, they are presumably
    aware that those agreements will not bind third parties who may be involved in
    disputes that may arise and that litigation proceeding at the same time as the
    arbitration may be required to resolve those disputes.

3. Both [Toyota] and PrairieSky will be delayed in having the
    serious issues between them that are raised in the Action determined if the
    Action is stayed. Moreover, if the Arbitration is decided, it will not
    determine the rights and obligations as between [Toyota] and PrairieSky or any
    third party claims between PrairieSky and Encana, so there is little reason in
    the circumstances for postponing the Action as between them pending the
    Arbitration.

[Toyota] and PrairieSky would suffer significantly greater
    prejudice if the Action were stayed between them, than would Encana if the
    Action against PrairieSky is permitted to proceed. As a result, the Action will
    be stayed only against Encana pending the determination of the Arbitration. The
    Action against PrairieSky may proceed, including any third party proceedings
    that may be commenced by PrairieSky against Encana.

[55]

I would adopt the principled approach that has been developed and
    applied by the Court of Appeal of Alberta in the cases referred to above,
    according to which the court must consider the following three factors: 1) whether
    the issues in the arbitration are substantially the same as the issues in the
    action; 2) whether the defendant has satisfied the court that continuing the
    action would work an injustice; and 3) whether the defendant has satisfied the
    court that the stay will not cause an injustice to the plaintiff.

[56]

Turning to the first factor, the issue to be determined in the
    arbitration is whether the corporate respondent Hägele wrongfully terminated
    the Exclusive Sales Agreement with Novatrax. According to the statement of
    claim, the agreement provides for ordinary termination if either party gives 12
    months written notice, as well as for extraordinary termination without notice
    in particular circumstances. It is alleged that Hägeles termination was not in
    accordance with the contract. It is also alleged that the termination was part
    of a deliberate strategy to obtain control of sales in the North American
    market.

[57]

It is only this latter claim, if pursued, that could involve some or all
    of the same issues as are pleaded against the other respondents. There may
    therefore be some risk of inconsistent verdicts if that claim is pursued in the
    arbitration, as well as in the Ontario action. That risk will depend on how the
    appellant chooses to proceed with the arbitration in Germany. The appellant may
    well decide to limit its claims in the arbitration to breach of contract and
    wrongful termination, and to pursue the issues arising out of the conduct of
    the principals of the company and Cleanfix only in the Ontario action.

[58]

That
    being said, the result of the arbitration in Germany will not dictate the
    result against the individual respondents and Cleanfix in the Ontario action. That
    is, even if the arbitrator determines that Hägele rightfully terminated the
    agreement without notice, it is possible that a court here could find that the
    actions of the individual respondents and Cleanfix were wrongful under Ontario
    law.

[59]

The second factor is whether there would be an injustice to the
    individual respondents and Cleanfix if the Ontario action were continued. There
    could be some duplication of witnesses, depending on how the appellant
    proceeded in the arbitration, as well as the timing of the arbitration and the
    action. However, as the Alberta court in
Encana
pointed out, that is
    one possible consequence of including a wide-ranging arbitration clause in a
    contract between two parties where disputes may arise that also involve others.

[60]

Moreover, in my view, the respondents have not demonstrated that they
    would suffer an injustice if the Ontario action were to continue. Everything
    that occurred, as well as Cleanfixs ongoing business, is in Ontario. Many
    likely witnesses are in Ontario, and therefore will not be inconvenienced in
    terms of travelling. In fact, the respondents conceded before the motion judge
    that, if a traditional
forum non conveniens

analysis were
    applied, Ontario would be the more convenient and appropriate forum to litigate
    this dispute.

[61]

The third factor is whether the respondents have demonstrated that a
    stay will not cause the appellant an injustice. The appellant alleges that its
    business has been ruined. The respondents are now proceeding to carry on that
    business in Canada to the exclusion of the appellant. There will already be
    significant expense for the appellant to proceed with arbitration with Hägele
    in Germany. The appellants claims against the other respondents are made in
    accordance with the law of Ontario. Whether such claims also exist under the
    law of Germany is not known. The fact that another law will apply to these
    claims if they are arbitrated in Germany is
prima facie
prejudicial to
    the appellant, which did not agree with those respondents to that choice of
    law, and is therefore entitled to sue in Ontario. In my view, there will be
    prejudice to the appellant if a stay is ordered of its claims against the
    individual respondents and the Canadian corporation, Cleanfix.

Conclusion

[62]

The motion judge erred in law by referring claims to arbitration in
    Germany against respondents with whom the appellant made no agreement at all
    and no agreement to arbitrate, depriving the appellant of its right to litigate
    those claims in Ontario under Ontario law. As he erred in law, no deference is
    owed to his decision.

[63]

I would allow the appeal in part, and set aside the stay of the claims
    in the Ontario action against the non-parties to the Exclusive Sales Agreement

namely, Karl Hägele, Benjamin Hägele, and Cleanfix. I
    would grant partial indemnity costs to the appellant in an amount to be
    determined.

Released: October 20, 2016 (DD)

K. Feldman J.A.

[1]

The next paragraphs in the statement of claim refer to the
    fact that the letter agreement with Mr. Wolff contained a choice of law and
    choice of forum clause in favour of Ontario. It appears therefore that the
    intent of the joinder plea was to persuade the Ontario court to take
    jurisdiction over the entire proceeding and not to give effect to the North
    Carolina choice of forum clause contained in the other documents.


COURT OF APPEAL FOR ONTARIO

CITATION: P.M. Snelgrove General Contractors & Engineers
    Ltd. v. Jensen Building Limited, 2016 ONCA 728

DATE: 20161004

DOCKET: C60051

Feldman, Epstein and Miller JJ.A.

BETWEEN

P.M. Snelgrove General Contractors &
    Engineers Ltd.

Plaintiff (Respondent)

and

Jensen Building Limited
and Madajama Holdings Ltd.

Defendant (
Appellant
)

AND BETWEEN

Jensen Building Limited

Plaintiff by Counterclaim (Appellant)

and

P.M. Snelgrove General Contractors &
    Engineers Ltd. and Paul Snelgrove

Defendants by Counterclaim (Respondents)

R. Steven Baldwin, for the appellant

John R. Crouchman and Kristin Muszynski, for the
    respondents

Heard and released orally: September 27, 2016

On appeal from the judgment of Regional Senior Justice James
    E. McNamara of the Superior Court of Justice, dated January 27, 2015.

ENDORSEMENT

[1]

The appellants complaint is that having found responsibility by both
    the plaintiff and defendant for the failure of the Edwards and Wolfe Springs
    projects to make a profit, the trial judge did not apportion liability for that
    responsibility and award compensation to the appellant.

[2]

The agreement between the parties was that the respondent would be
    entitled to 30 per cent of the profit of each project.  There was no agreement
    regarding responsibility for losses.  Nevertheless, the action was fought on
    responsibility for negligence on the projects that caused the failure to earn
    profit, and in the case of the Wolfe Springs project, a loss.

[3]

The trial judge found no negligence on the Wolfe Springs project.  There
    is therefore no basis for compensation to be awarded.  On the Edwards project,
    the trial judge found that both parties did not meet the onus to prove that
    they were entitled to compensation from each other for the failure to earn a
    profit.  They were both responsible.  On those findings, as the case was
    conducted and based on the contract between the parties, we see no basis to
    interfere or to order a new trial.

[4]

The second issue is whether the trial judge erred by excluding the
    evidence of the appellants expert, Mr. Pratt.  We were told that the
    respondent, having had Mr. Pratts report for a long time, only objected to his
    evidence at trial based on an allegation of failure to be independent.  The
    trial judge then held a
voir dire
and excluded the evidence in reasons
    released with the trial decision.  We agree with the respondent that the trial
    judge was entitled to exclude the evidence of the expert for failure to be
    impartial.  It is a discretionary decision that was open to him, although it is
    rarely done.

[5]

However, we observe that procedurally the better course is for counsel
    to give early notification of any concerns regarding the admissibility of
    expert evidence and a request to the trial judge to render a decision on the
voir
    dire
before continuing the trial.  That would have given counsel the
    opportunity to make any changes to his trial strategy, consequent on the
    exclusion of the experts evidence.  Having said that, it appears that in this
    case, the exclusion of the expert evidence did not affect the outcome.

[6]

The appeal is therefore dismissed with costs fixed at $20,000 inclusive
    of disbursements and HST.

K. Feldman J.A.

Gloria Epstein J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Palkowski v. Ivancic, 2016 ONCA
    762

DATE: 20161017

DOCKET: C61344

Pardu, Benotto and Huscroft JJ.A.

BETWEEN

Jerry Palkowski and Jane Palkowski

Plaintiffs

(Respondents)

and

Stipan Ivancic, also known as Steve Ivancic

Defendant

(Appellant)

Ronald G. Chapman, for the appellant

Marek Z. Tufman and G.A.P. Tufman, for the respondents

Heard: October 4, 2016

On appeal from the judgment of Justice Sean F. Dunphy of
    the Superior Court of Justice, October 23, 2015.

ENDORSEMENT

[1]

The parties to this appeal signed an agreement of purchase and sale with
    respect to the respondents home at a price that was significantly below market
    value. The document was signed as part of a joint scheme with the appellant to
    defraud the respondents creditors by tricking them into believing that the
    respondents could not pay their debts. The trial judge found the agreement of
    purchase and sale to be a sham.

[2]

The parties also had an oral agreement that the respondents could live
    in the house, reimburse the appellant for the carrying costs of the mortgage,
    real property and taxes, and that the appellant would re-convey the house to
    the respondents at a later date.

[3]

Litigation began between the parties in 2005 when the appellant refused
    the respondents demand that the property be re-conveyed to them. The
    respondents claimed that the property was held in an express trust for them,
    and also claimed unjust enrichment and a constructive trust.

[4]

The respondents claim for an express trust was dismissed on a summary
    judgment motion because it was an agreement that was not in writing. The Court of
    Appeal upheld the decision. The remaining claims went to trial. The respondents
    sought relief for unjust enrichment, and a re-conveyance of the property
    pursuant to s. 37(1) of the
Conveyancing and Law of Property Act
,
    R.S.O. 1990, c. C.34 (
CLPA
).

[5]

The trial judge granted judgment in the respondents favour and ordered
    a re-conveyance to them, subject to a payment to the appellant to reflect his contributions
    which included a cash payment to the respondents at the time of the conveyance.

[6]

The appellant claims that the trial judge erred by ordering the
    transfer of the property pursuant to an unjust enrichment analysis; failed to
    apply the clean hands doctrine to the claim for equitable relief; and erred
    in his application of s. 37(1) of the
CLPA
.

[7]

We do not accept these submissions.

[8]

The trial judge found that the appellant had been enriched and that
    there was a corresponding deprivation on the part of the respondents. He
    concluded that there was no juristic cause to justify the enrichment. The
    appellant submits that in this respect the trial judge erred because the
    existence of a contract can constitute a juristic reason for an enrichment.
    (See:
Garland v. Consumers Gas

Co.
2004 SCC 25). The
    existence of the agreement of purchase and sale, they argue, constitutes an
    absolute bar to a claim for unjust enrichment.

[9]

This submission ignores the trial judges unchallenged finding with
    respect to the agreement of purchase and sale. The trial judge found that the
    agreement was a sham transaction. Thus, as between the appellant and
    respondent, there was no contract to bar the claim for unjust enrichment.

[10]

The trial judge correctly applied the doctrine of unjust enrichment. He
    found that monetary damages were not adequate and that there was a link between
    the contribution that founds the action and the property in which the constructive
    trust is claimed. The discretionary remedy was based on the findings of the
    trial judge which are not challenged by the appellant.

[11]

The trial judges reasons make it abundantly clear that he was aware of
    the clean hands doctrine. He considered neither party to be blameless and
    used his discretion to fashion an appropriate remedy.

[12]

We need not consider whether the trial judge could have granted the same
    relief under s. 37(1) of the
CLPA
.

[13]

The appeal is dismissed with costs payable to the respondents in the
    amount of $17,500 inclusive of disbursements and HST.

G. Pardu J.A.

M.L. Benotto
    J.A.

Grant Huscroft
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Prelorentzos v. Havaris, 2016 ONCA 727

DATE: 20161004

DOCKET: C60501

Feldman, Epstein and Miller JJ.A.

BETWEEN

Marie-Clair Prelorentzos

Respondent

and

Helen Havaris

Appellant

Glenroy K. Bastien, for the appellant

Norman Pizzale, for the respondent

Heard and released orally: September 26, 2016

On appeal from the judgment of Justice Grace of the Superior
    Court of Justice, dated May 4, 2015.

ENDORSEMENT

[1]

The trial judge made an order under the
Succession Law Reform Act
,
    R.S.O. 1990, c. S.26, finding the appellant to be the common law spouse of the
    deceased and entitled to a support order in the amount of $30,000. He also
    ordered the appellant to pay the costs of $20,000 to the respondent.

[2]

The appellant challenges the trial judgment on four grounds. She says
    the trial judge erred in not awarding her the deceaseds house instead of the
    $30,000; that he erred in not finding that her contributions to their life and
    upkeep of the house did not constitute a constructive trust; he erred on the
    issue of conflict of interest; and in the costs order which she says should
    have come out of the estate.

[3]

We see no error in the approach or findings of the trial judge. He gave
    lengthy and detailed reasons which considered all of the evidence. He made
    findings of fact based on the evidence. He had problems with the appellants
    credibility based on, among other things, the non-disclosure of her tax returns
    and on some inconsistencies in the financial information she did provide. There
    is no basis to interfere with those findings. The trial judge considered the
    applicable case law and applied it.

[4]

The costs award is a highly discretionary order to which this court
    accords great deference. The trial judge followed the new approach to costs in
    estate litigation by awarding costs payable by a party and not out of the
    estate. He was entitled to exercise his discretion in that way.

[5]

The appellant also raises the issue of the appellants lawyers alleged
    conflict of interest but seeks no remedy for it at this level. The issue was
    dealt with by the trial judge satisfactorily in the circumstances.

[6]

In the factum the appellant also challenges the appointment of the
    respondent as estate trustee but that issue was not pursued in oral argument.
    We would not give effect to that submission.

[7]

The respondent brought fresh evidence before the court that disclosed
    that a corporation of which the appellant is the sole director and officer had,
    following trial, an undisclosed bank account containing $52,000. No response to
    this evidence was proffered. The respondent asked the court to treat the
    evidence as corroborative of the trial judges findings. We agree with that
    submission.

[8]

In the result, the appeal is dismissed. Costs to the respondent on the partial
    indemnity scale in the amount of $18,000, inclusive of disbursements and HST.

K. Feldman J.A.

Gloria Epstein J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Quinto v. Stadler, 2016 ONCA 766

DATE: 20161018

DOCKET: M46806 (C62399)

Cronk, Juriansz and Brown JJ.A.

BETWEEN

Maria-Lisa Quinto

Appellant (Moving Party)

and

Clinton Carl Stadler

Respondent (Responding Party)

Marcus Boire, for the moving party

Sage Harvey, for the responding party

Heard: October 14, 2016

ENDORSEMENT

[1]

The appellant, Maria-Lisa Quinto, moves for
    an order granting a stay of the order of R. P. Kaufman J. of the Superior Court
    of Justice dated June 15, 2016, until such time as her appeal from that order
    can be heard. Her husband, the respondent, Clinton Stadler, moves for an order
    quashing the appellants appeal.

[2]

In April, 2015, the appellant commenced
    matrimonial litigation against the respondent seeking custody of their child
    and child support. In his June, 2015 answer, the respondent asserted claims
    regarding the custody of and access to their child. Temporary orders were made
    that the child primarily reside with the appellant and fixing the amount of
    child support. The parties then agreed the appellant would have sole custody of
    the child.

[3]

In May, 2016, the respondent initiated a
    motion seeking weekly supervised access to the child for reconciliation
    therapy. In June, 2016, the appellant moved for various relief, including
    summary judgment dismissing the respondents claim for access, documentary
    disclosure, and questioning.

[4]

Both motions came on before the motion judge
    on June 15, 2016. He adjourned the appellants motion to July 20, 2016. In
    respect of the respondents motion, he wrote that he was inclined to order
    reintegration reconciliation counselling but wanted the curriculum vitae of
    the proposed therapist filed. He wrote that, absent agreement between the
    parties on who would act as the therapist, he would make a decision on the
    basis that such counselling is necessary in the circumstances of this case. He
    adjourned that issue to July 20 and gave directions for the filing of further
    materials. However, he stated that the materials could not address the need
    for such counselling which this court has already determined to be needed.

[5]

The appellant filed a notice of appeal from
    that order on July 13, 2016.

[6]

On the motions now before the court, the
    appellant submits the June 15 order was final for two reasons: (i) the motion
    judge failed to deal on June 15 with her requests for summary judgment,
    documentary disclosure, and questioning; and (ii) by finding a need existed for
    reintegration counselling, the motion judge effectively decided the issue of
    access between the parties. The respondent argues the order is interlocutory
    because the merits of his claim for access remain to be decided.

[7]

We accept the respondents submission.

[8]

As to the appellants first submission, the
    motion judges endorsement stated the appellants motion had been scheduled for
    July 6, 2016; he adjourned it until July 20, 2016. His discretionary adjournment
    order clearly was interlocutory. As matters transpired, Corkery J. dealt with
    the appellants disclosure and questioning requests in his July 20, 2016 order.

[9]

In respect of the access issue, the June 15,
    2016 order must be read together with the July 20, 2016 order made by Corkery
    J., before whom the motions of both the appellant and respondent were returned.
    He adjourned the appellants summary judgment motion seeking the dismissal of
    the respondents access claim to a date in November, 2016. During oral argument
    before us, respondents counsel acknowledged no prejudice would enure to the
    respondent by awaiting the determination of the respondents access claim at the
    hearing of the summary judgment motion scheduled for next month.

[10]

With respect to the respondents request for reintegration
    reconciliation counselling, Corkery J. ordered:

The parties shall each complete intake forms with the Family
    Services York Region to determine what reintegration or reconciliation
    counselling services are available to them and their child, if any, at what
    cost and when such services are available. If the parties are unable to agree
    on enrolling for such services, either side may bring a motion to determine
    access. No such motion may be brought before the stay application regarding
    Justice Kaufmans June 15, 2016 order is heard. [Emphasis added.]

[11]

When the June 15 and July 20 orders are read
    together, it is clear that neither determined the issue of the respondents
    access. That issue will be considered on the hearing of the appellants summary
    judgment motion next month. Consequently, the motion judges June 15, 2016
    order concerning reintegration reconciliation counselling was interlocutory in
    nature. No appeal lies to this court.

[12]

The respondents motion to quash the appeal
    is granted. As a result, we do not reach the appellants motion to stay.

[13]

The respondent is entitled to his costs of
    the motion fixed in the amount of $1,500.00, inclusive of HST and
    disbursements.

E.A. Cronk J.A.

R.G. Juriansz J.A.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Rana v. Unifund Assurance Company, 2016 ONCA 756

DATE: 20161013

DOCKET: M46544

(C61998)

Simmons, LaForme and Pardu JJ.A.

BETWEEN

Kris Rana

Responding Party (Appellant)

and

Unifund Assurance Company

Moving Party (Respondent)

Christina Martin, for the moving party

Kris Rana, self-represented

Heard and released orally: September 30, 2016
    (by teleconference)

ENDORSEMENT

[1]

The telephone motion(s) scheduled for today are proving unworkable due
    to apparent bad connections.  The motion(s) are adjourned to October 28, 2016
    at 10:00 a.m.  The moving party, Unifund, may appear by telephone or in person,
    as they prefer. Ms. Rana should appear in person, as she is experiencing
    apparent connection issues.

[2]

The Registrar of the court is to forward a copy of this endorsement to
    Ms. Rana.  Unifund may file its appeal material within 7 days following
    disposition of the motion(s), if required.

[3]

Costs reserved to panel hearing the motion(s).

Janet
    Simmons J.A.

H.S.
    LaForme J.A.

"G.
    Pardu J.A."


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Anigwe,
    2016 ONCA 755

DATE: 20161013

DOCKET: C58873

Doherty, Hourigan and Roberts JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Bruno Anigwe

Appellant

Louis P. Strezos and Sherif Foda, for the appellant

Rick Visca, for the respondent

Heard and released orally:  October 7, 2016

On appeal from the conviction entered by a jury presided
    over by Justice Lemon of the Superior Court of Justice, dated December 5, 2013
    and on a sentence imposed on May 2, 2014.

ENDORSEMENT

[1]

This is an appeal from conviction.  Counsel for the appellant has
    advised that the sentence appeal is abandoned.

[2]

There are two arguments put forward on the conviction appeal.

The failure to confront the appellant with the alleged motive
    to fabricate

[3]

We do not agree that the rule in
Brown v. Dunne
was engaged.
    The co-accused testified before the appellant.  The appellant knew exactly what
    the co-accused had said about the meeting in question and was in a position to
    respond through his evidence to any factual assertion made in that evidence
    with which the appellant did not agree.

[4]

Counsel for the co-accuseds arguments in his closing that the appellant
    had a motive to misrepresent his role in the conversation, whereas the
    co-accused had no motive to identify the appellant as opposed to the third
    party as the primary speaker in the meeting, was an argument that was open on
    the evidence.  Counsel for the appellant had every opportunity to respond to
    that argument in his closing if he saw fit.  We see no failure to properly
    allow the appellant to address the position taken by the co-accused and no
    unfairness in the manner in which the co-accused presented his position to the
    jury.

The failure to give an
Oliver
 instruction

[5]

We do not agree necessarily that this was a case in which an
Oliver
instruction would have been appropriate.  In any event, no such instruction was
    requested.  In these circumstances, absent any request by counsel for the
    appellant that the trial judge instruct in accordance with
Oliver
, his
    failure to do so cannot be characterized as non-direction amounting to
    misdirection.

[6]

The appeal is dismissed.

Doherty J.A.

C.W. Hourigan J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Baumruk, 2016 ONCA 800

DATE: 20161027

DOCKET: C59961

Laskin, Sharpe and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Cathy Lyn Baumruk

Appellant

Margaret Osadet, for the appellant

Peter Scrutton, for the respondent

Heard: October 26, 2016

On appeal from the conviction entered on June 25, 2014
    and the sentence imposed on August 7, 2014 by Justice Jon-Jo Douglas of the Ontario
    Court of Justice.

APPEAL BOOK ENDORSEMENT

[1]

The appellant has filed a notice of abandonment of her conviction appeal.
    The conviction appeal will therefore be dismissed as abandoned.

[2]

The appellant appeals her sentence. Her sole submission is that the trial
    judge erred in fixing the amount of the fine. She contends that the amount
    ordered by the trial judge was inflated. We do not accept the appellants
    submission. The amount of the fine is supported by the expert evidence of Ms. Chevalier,
    who thoroughly examined the companys banking records. Moreover the amount of
    the fine is consistent with the appellants own admission that she stole the
    money and any repayments were by credit card. Her credit card statements do not
    support her position.

[3]

Leave to appeal sentence is granted but the sentence appeal is
    dismissed.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Bhatti, 2016 ONCA 769

DATE: 20161018

DOCKET: C62574

Cronk, Juriansz and Brown JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Nashaid Iqbal Bhatti

Appellant

Michael K. Wendl, for the appellant

Megan Stephens, for the respondent

Heard: October 14, 2016

On appeal from the sentence imposed on July 27, 2016 by
    Justice George S. Gage of the Ontario Court of Justice.

By the Court:

A.       Introduction

[1]

On July 27, 2016, the appellant pled guilty to one count each of conspiracy
    to commit fraud over $5,000 and uttering a forged document. The charges arose
    from the appellants participation, from mid-2012 to late 2015, in a scheme
    involving the use of fraudulent pieces of identification bearing the names and
    birthdates of non-existent persons to obtain credit from financial institutions
    and to rent various leasehold premises.  The appellant was sentenced to a total
    of nine months in jail, concurrent, and was ordered to provide a DNA sample.

[2]

Another participant in the fraudulent scheme, Tahir Mahmood, was tried
    and sentenced in separate proceedings.  He pled guilty to conspiracy to commit
    fraud over $5,000 and conspiracy to procure identity documents.  He was
    sentenced to a 90-day intermittent custodial term, concurrent, in addition to
    18 days pre-trial custody.

[3]

The appellant seeks leave to appeal and, if leave be granted, appeals
    from his sentence.

B.      Issues

[4]

The appellant raises one issue on appeal. Invoking the parity principle
    of sentencing, he argues that the sentencing judge erred by failing to provide
    sufficient reasons for the disparity in the sentence imposed on the appellant
    and that imposed on his co-accused, Tahir Mahmood.

C.      Discussion

[5]

At the conclusion of oral argument, the court granted leave to appeal
    sentence and dismissed the sentence appeal, for reasons to follow.  These are
    those reasons.

[6]

The principle of parity in sentencing is codified in s. 718.2(b) of the
Criminal
    Code
, R.S.C. 1985, c. C-46. That section reads: A sentence shall be
    similar to sentences imposed on similar offenders for similar offences
    committed in similar circumstances. As this court recently reiterated in
R.
    v. Beauchamp
, 2015 ONCA 260, at para. 276, the parity principle is
    intended to preserve fairness by avoiding disparate sentences where similar
    facts relating to the offence and offender would suggest like sentences
    (citation omitted).  However, as the
Beauchamp
court emphasized, this
    does not mean that equal or identical sentences are required for similar
    offenders or similar offences. Rather, the rule against unreasonable disparity
    in sentencing requires understandable sentences, when examined together:
Beauchamp
,
    at para. 277.

[7]

Based on the disparity between his sentence and that imposed on
    Mr. Mahmood, the appellant argues that the sentencing judge erred in law
    by departing from the parity principle without giving reasons. He maintains
    that, given his circumstances and those of Mr. Mahmood, and on proper
    application of the parity principle, a custodial term of four months in jail is
    a fit sentence in this case.

[8]

We disagree.

[9]

The sentencing judges reasons confirm that he was aware of the sentence
    imposed on Mr. Mahmood and that he was alert to the importance of the parity
    principle.  He took specific account of Mr. Mahmoods sentence and of the
    evidence before him regarding the appellants circumstances and the
    circumstances of his offences.  Having done so, the sentencing judge concluded that
    a nine month custodial term was an appropriate sentence.  This was his call to
    make.

[10]

The appellant, wisely, does not contend that the sentence imposed is
    unfit.  It is not.  The sentencing judge noted the appellants lengthy
    involvement in the fraudulent scheme over an extended period of time, the scope
    of the conspiracy to which he pled guilty, the nature of the appellants
    specific fraudulent activities, and the fact that the appellant was motivated
    by greed. The admitted facts at trial also established that the appellant was a
    knowing participant in the fraudulent scheme and that he facilitated its
    implementation by driving others, specifically, Mr. Mahmood, to targeted
    financial institutions and providing fictitious identification and specific
    instructions.

[11]

On these facts, the sentence imposed on the appellant was entirely
    appropriate. If anything, it was lenient in all the circumstances. As the
    sentencing judge put it, at p. 2 of his reasons: [I]n my view, a nine-month
    sentence for these offences, concurrent, is a minimal expression of deterrence
    and denunciation and the appropriate disposition.

[12]

That Mr. Mahmood received a lesser sentence for his involvement in the
    fraudulent scheme does not automatically entitle the appellant to the benefit
    of the lower sentence received by his co-accused:
Beauchamp
, at paras.
    279-280.  Although the sentencing judge did not have the benefit of full
    details regarding Mr. Mahmoods guilty plea and sentencing proceedings,  neither
    counsel sought an adjournment of the appellants sentencing hearing in order to
    lead evidence regarding those proceedings and both counsel made submissions
    concerning the application of the parity principle in the appellants case.

[13]

The sentencing judge took account of the parity principle in light of
    the information available to him about Mr. Mahmoods sentence and gave this
    principle effect when crafting a fit sentence for the appellant. Indeed,
    expressly on the basis of Mr. Mahmoods lesser sentence, he imposed a sentence
    on the appellant at the lower end of the nine to twelve months custodial range
    urged by the Crown.

[14]

We note that the record before this court confirms that there were
    material differences between Mr. Mahmoods circumstances and those of the
    appellant. Unlike the appellant, Mr. Mahmood made full restitution for his
    offences and had undertaken rehabilitative programming at the Salvation Army
    prior to sentencing.

[15]

The sentencing judge in Mr. Mahmoods case accorded Mr. Mahmood mitigation
    credit on sentencing because he had made restitution prior to trial.  In
    contrast, the sentencing judge in the appellants case placed little weight on
    the fact that the appellant had failed to make any restitution.  This enured to
    the appellants benefit.  If his failure to make restitution had been taken
    into account by the sentencing judge, it could only have served to increase his
    sentence.

[16]

It follows from the comments set out above that we reject the
    appellants attack on the sufficiency of the sentencing judges reasons.  When
    those reasons are read in the context of the record, as they must be, it is
    apparent why the sentencing judge decided as he did. The sufficiency of reasons
    standard, therefore, is met in this case.

D.      Disposition

[17]

For these reasons, leave to appeal sentence is granted and the sentence
    appeal is dismissed.

Released:

OCT 18 2016                                    E.A. Cronk
    J.A.

RGJ                                                  R.G.
    Juriansz J.A.

David
    Brown J.A.