DATE: 2002-02-05
DOCKET: C34283
COURT OF APPEAL FOR ONTARIO
RE:
RITA SCHNITZLER and THOROUGH-STAND STABLES INC. (Plaintiffs/Defendants by counterclaim)(Appellants/Respondents by cross-appeal) –and– GINO MOLINARO, MOLINCROFT FARM LTD. and MOLINCROFT FARMS (Defendants/Plaintiffs by counterclaim)(Respondents/Appellants by cross-appeal)
BEFORE:
ABELLA, CHARRON and FELDMAN JJ.A.
COUNSEL:
Dale F. Fitzpatrick, for the appellants/respondents by cross-appeal
C.M. Loopstra, Q.C., for the respondents/appellants by cross-appeal
HEARD:
January 25, 2002
On appeal from the judgment of Justice William J. Morrison dated April 14, 2000.
E N D O R S E M E N T
1This is an appeal and a cross-appeal from the judgment of Morrison J. dated April 14, 2000. The litigation arose from the dissolution of the parties’ business relationship. It is our view that the appeal should be allowed on each ground, and the cross-appeal allowed on one ground. Our reasons can be stated succinctly as follows.
- Expenses for keeping “My High Star”
2In our view, the trial judge erred in awarding $4,000 for unjust enrichment to the respondent in partial recovery of the expenses for keeping the foal “My High Star.” Even assuming an enrichment to the appellant and a corresponding deprivation to the respondent, it was also incumbent upon the respondent to show, in order to make out his claim, that there was the absence of a juridical reason for the enrichment. In the circumstances of this case, this third element could not be made out. The respondent incurred those expenses as a result of his insistence to keep My High Star over the appellant’s objections. As the result at trial shows, the appellant was unjustly deprived of the possession of the foal during the relevant period. There is no injustice in allowing the enrichment, if any, to stand.
- Purse monies
3We are also of the view that the trial judge erred in dismissing the appellant’s claim for $3,493.99 for purse monies owed to her. The trial judge dismissed this claim on the basis of the respondent’s testimony that no monies were owed to the appellant at the time that they severed their relationship. This conclusion was inconsistent with the trial judge’s own finding that the parties had agreed, at the relevant time, that the appellant would be paid for any purse monies owing to her, if any, as determined by the accountant. Further, the respondent testified that he had no personal knowledge of purse monies owing from time to time, since he left the matter entirely up to his accountant and the appellant to determine. The accountant’s records, introduced in evidence by the respondent, showed that $3,493.99 was owing for purse monies. Hence, it is our view, that the trial judge’s conclusion on this issue cannot reasonably be supported by the evidence. The appellant is entitled to an award as claimed.
- Clanwilliam's reduced value
4It is our view that the respondent was entitled to be compensated for the reduced value of Clanwilliam. The trial judge’s finding that Clanwilliam was injured at the time the respondent took possession of the horse was supported by the evidence. The trial judge found that the appellant’s misrepresentation that Clanwilliam was sound was innocent, but it is implicit in his reasons that the soundness of the horse became a term of the contract. This conclusion is also supported by the evidence. However, we are of the view that the award of $10,000 resulted in overcompensation to the respondent. On the basis of the trial judge’s own analysis with respect to the intention of the parties that there be an equal division, and the respective value of the horses that they each received ($15,000 and $5,000), the award should have been no more than $5,000 in addition to the proceeds from the sale of Clanwilliam. We would therefore reduce the award to $5,000.
- Damages flowing from interlocutory injunction
5Given that the respondent’s claim to an interest in Man Overboard was not substantiated at trial, we are of the view that the appellant was entitled to be compensated for damages flowing from the respondent’s undertaking with respect to the interlocutory injunction. There was no issue as to the quantum of the appellant’s loss. The issue was causation. The trial judge held that the appellant’s claim for $12,433.79 was “tenuous at best”. We disagree. In our view, the claim was reasonable and substantiated at trial. Given the nature of the injunction sought and obtained by the respondent, the appellant was not in any position to provide further or better evidence to support this claim. We would award the appellant damages as claimed.
- Defamation
6We see no basis for interfering with the trial judge’s findings and conclusion on the claim for defamation. We would not give effect to the respondent’s argument on the cross-appeal.
- Costs
7In our view, the trial judge erred in failing to give effect to the offer to settle made by the appellant early in the litigation. The appellant’s recovery was greater than the offer. This offer met the requirements of Rule 49.10, and its acceptance would have obviated the need for this litigation. This factor, coupled with the respondent’s unsubstantiated claims of fraud and dishonesty from which he never resiled throughout the trial, entitled the appellant to solicitor and client costs from the date of the offer to the date of the trial judgment.
- Pre-trial interest
8We see no basis for distinguishing between the parties on their respective entitlement to pre-judgment interest. In our view, the trial judge erred in refusing to award pre-judgment interest to the respondent. The respondent is entitled to pre-judgment interest on the amount awarded to him.
DISPOSITION
9Accordingly, the appeal is allowed with costs and the cross-appeal is allowed, but given the limited success, without costs. Paragraphs 10, 11, 12, 14, 15, and 17 of the judgment of Morrison J. are set aside and/or varied to reflect the decision of this court in accordance with the above reasons.