Cummings v. Solutia SDO Ltd., 2009 ONCA 510

CITATION: Cummings v. Solutia SDO Ltd., 2009 ONCA 510

DATE: 20090624

DOCKET: C49422 and C49451

COURT OF APPEAL FOR ONTARIO

Moldaver, Goudge and Armstrong JJ.A.

BETWEEN

Docket: C49422

John Cummings and 1624452 Ontario Inc.

Applicants/Appellant

and

Solutia SDO Ltd., Brian Broda, Jacqueline Clark, Troy Loder and Garry McCarron

Respondents

AND BETWEEN

Docket: C49451

Solutia SDO Ltd.

Applicant/Respondent

and

John Cummings and 1624452 Ontario Inc.

Respondents/Appellants

Paul H. Starkman for John Cummings and 1624452 Ontario Inc.

Paul Bates for Solutia SDO Ltd., Brian Broder, Jacqueline Clark, Troy Loder and Garry McCarron

Heard and released orally: June 12, 2009

On appeal from the judgments of Justice Frank J. C. Newbould of the Superior Court of Justice dated August 19, 2008 and August 28, 2008.

ENDORSEMENT

[1] The application judge dismissed the appellants’ application for a declaration that the valuation decision of Hallinan & Tautrims (HT) concerning the value of shares of Solutia SDO Ltd. owned by the appellant Cummings is null and void. In a second application, the application judge granted the request of Solutia and others for an order that the valuation of Cummings’s shares by HT is binding on the parties including Cummings.

[2] The sole issue in the first application was whether HT, in carrying out the valuation, was acting as an arbitrator. The application judge held that HT was not an arbitrator but was acting in the capacity of a valuator. The application judge reviewed the terms of a share purchase agreement and the engagement letter, which constituted an agreement between Solutia, Cummings and HT. He also reviewed the evidence concerning the work carried out by HT. The application judge applied the criteria concerning whether a person called upon to value the shares in question is an arbitrator or valuator. He made particular reference to the reasons for judgment of L’Heureux-Dubé J. in Sport Maska Inc. v. Zittrer, 1988 CanLII 68 (SCC), [1988] 1 S.C.R. 564. In our view, the application judge properly applied the criteria to the facts of this case, as he found them, and we see no error in his conclusion that HT was acting as an arbitrator.

[3] In the second application, the appellant Cummings asserts that the application judge erred in concluding that the valuation of Cummings’ shares in Solutia was binding on him because HT failed to carry out the valuation in accordance with an understanding reached by the parties. Cummings asserts that such understanding was contained in an exchange of e-mails concerning disclosure of documents by Solutia and Cummings.

[4] In simplistic terms, Cummings alleges that there is a breach of the understanding reached concerning the disclosure of documents and that the order of the application judge concerning the valuation of the shares by HT should be set aside.

[5] The application judge addressed a number of complaints concerning the valuation process, including the question of document disclosure, and found no contractual obligation on HT to provide Mr. Cummings with documents.

[6] We see no error in the findings of the application judge. In the result, both appeals are dismissed.

[7] The appellant also appeals the quantum of costs ordered below. In our view, the application judge addressed all aspects of that issue including hourly rates and time spent and compared this with the work done by other counsel. He rendered a decision which was well within his discretion and well founded on the record before him. This aspect of the appeal also fails. We would therefore deny leave to appeal costs.

[8] The respondents are entitled to their costs of the appeal in the amount of $15,000, plus G.S.T.

“M.J. Moldaver J.A.”

“Stephen Goudge J.A.”

“Robert P. Armstrong J.A.”