Inno-Vite Incorporated v. Rowland, 2005 ONCA 7882

Case Summary

The appellants appealed a trial judgment finding corporate breach of a distribution agreement, personal liability of a director, and awarding damages. The Court of Appeal allowed the appeal in part, setting aside the finding of personal liability against the director as there was no evidence he acted outside his authority or for his own benefit. The court also set aside the damages award, finding the trial judge erred in awarding mitigation costs beyond the notice period and relying on unproven financial statements. The matter of damages and trial costs was remitted for a new trial.

COURT OF APPEAL FOR ONTARIO

DATE: 20050324

DOCKET: C40512

RE: INNO-VITE INCORPORATED (Plaintiff (Respondent)) – and – DAVID ROWLAND, DE WIT TRADING CO. INC., CREATIVE NUTRITION CANADA CORP., THEO PYPKER, TIMBERGREEN MARKETING LIMITED, GERARD GERVAIS, MAXION NUTRITION CORPORATION and BRIAN BYLSMA (Defendants (Appellants))

BEFORE: GOUDGE, FELDMAN AND BLAIR JJ.A.

COUNSEL: Richard J. Mazar for the appellant Nina Perfetto and Lonny Rosen for the respondent

HEARD & RELEASED ORALLY: March 15, 2005

On appeal from the judgment of Justice Lloyd Brennan of the Superior Court of Justice dated July 16, 2003.

E N D O R S E M E N T

[1] The appellant concedes both the corporate breach of the distribution agreement and the one year notice period.

[2] However, in our view, the trial judge erred in finding Dr. Rowland personally liable for breach of contract. The trial judge makes no finding that Dr. Rowland was acting outside the scope of his authority, or for his own rather than the company’s benefit, nor does there appear to have been any evidence to support such a finding. The order against Dr. Rowland must be set aside.

[3] As to damages, the trial judge erred in awarding mitigation costs to be incurred after the notice period expired. Moreover the financial statements, which are the main basis for the expert opinion relied on by the trial judge, were not proven in evidence. His damage award therefore must also be set aside and remitted back for a trial as to the proper assessment of damages against the corporate entities.

[4] As a consequence, costs of the trial must also be similarly remitted.

[5] To this extent the appeal is allowed.

[6] Costs of the appeal to the appellant in the amount of $6,000 inclusive of disbursements and G.S.T.

"S.T. Goudge J.A."

"K. Feldman J.A."

"R. A. Blair J.A."

Inno-Vite Incorporated v. Rowland, 2005 ONCA 7882

Case Summary

COURT OF APPEAL FOR ONTARIO

On appeal from the judgment of Justice Lloyd Brennan of the Superior Court of Justice dated July 16, 2003.

E N D O R S E M E N T

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