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

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."