Royal Laser Corp. v. Ruben Rivas, 2011 ONCA 655
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
1The 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.
2In our view, however, the claims as pleaded against the lawyer defendants disclosed a cause of action.
3The 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.
4The 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.
5Although 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.
6The appeal is therefore allowed and the motion to amend and add parties is granted.
7Costs 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.
8Costs 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."
