CITATION:
Royal Laser Corp. v. Ruben Rivas, 2011 ONCA
          655

DATE: 20111019

DOCKET: C53486

COURT OF APPEAL FOR ONTARIO

Feldman, MacPherson and Simmons JJ.A.

BETWEEN

Royal Laser Corp.

Plaintiff (Appellant)

and

Ruben Rivas and 1452939 Ontario Limited

Defendants

P. James Zibarras and Kevin D. Toyne, for the appellant

William E. Pepall and Jason. Squire, for the respondent
          Cassels, Brock & Blackwell LLP

Helder M. Travassos and Megan Marrie, for the respondent
          Stikeman Elliott LLP

Kimberly Boara Alexander, for the respondent Ruben Rivas

Heard and released orally: October 7, 2011

On appeal from the order of Justice Frank Marrocco of the
          Superior Court of Justice dated February 15, 2011.

ENDORSEMENT

[1]

The motion judge
    determined that the claims to be added in the proposed fresh amended statement
    of claim against the lawyer defendants were not tenable at law. He therefore
    refused to permit the lawyer defendants to be added.

[2]

In our view, however, the claims
    as pleaded against the lawyer defendants disclosed a cause of action.

[3]

The claim as originally
    pleaded against the non-lawyer defendants was that the non-lawyer defendants
    represented that they owned 100 per cent of the shares of Venture Steel Inc.
    when in fact they did not; and that, absent that misrepresentation, Royal Laser
    would not have entered into the Share Purchase Agreement to purchase shares of
    Venture Steel Inc. on the same terms and conditions.

[4]

The proposed
    fresh as amended statement of claim pleads that:

·

the lawyer defendants
    each provided advice and representation to one of the plaintiffs in relation to
    the share purchase agreement;

·

the lawyer defendants
    expressly advised their respective clients that the non-lawyer defendants had
    repurchased certain shares owned by a third party by exercising an irrevocable
    option; and

·

Venture Steel Inc.'s
    maximum exposure to the third party in pending litigation was $1.4 million  a
    fact that turned out not to be the case.

On its face, this pleads a tenable claim.

[5]

Although the motion
    judge said he did not intend to address the evidence adduced on the respondent's
    cross-motion to refuse the amendment as an abuse of process, he engaged in an
    assessment of the merits of the claim. This he was not entitled to do as part
    of assessing whether the claims were tenable at law.

[6]

The appeal is therefore
    allowed and the motion to amend and add parties is granted.

[7]

Costs of the appeal are
    to the appellants on the partial indemnity scale, fixed in the amount of
    $12,500 inclusive of disbursements and applicable taxes, payable by the
    respondents Cassels Brock and Stikeman Elliott.

[8]

Costs of the motion in
    the court below are to the appellants on the partial indemnity scale, fixed in
    the amount of $7,500 inclusive of disbursements and applicable taxes, and
    payable by the respondents Cassels Brock and Stikeman Elliott. The respondents
    Rivas and 1452939 Ontario Limited are not entitled to costs, nor are they
    liable for costs.

Signed:           K.
    Feldman J.A.

J.
    C. MacPherson J.A.

Janet
    Simmons J.A.