Biancaniello et al. v. DMCT LLP
[Indexed as: Biancaniello v. DMCT LLP]
Ontario Reports
Court of Appeal for Ontario
K.N. Feldman, G.J. Epstein and B.W. Miller JJ.A.
May 15, 2017
138 O.R. (3d) 210 | 2017 ONCA 386
Case Summary
Actions — Bars — Settlement
The plaintiff disputed fees charged by defendant accountants for services rendered in respect of three transactions, including the structuring of a "butterfly transaction" in which the plaintiff's software and consulting businesses were divided into separate companies. A fees action by the defendant was settled and the parties entered into a broadly worded release in 2008. The release referred to all claims existing up to that time arising from any and all services provided by the defendants to the plaintiff through to the end of 2007. In 2011, the plaintiff learned that, as a result of the defendants' negligence, the butterfly transaction could be subject to an income tax liability of more than $1 million instead of being tax free, as intended. The plaintiff sued the defendants for damages for negligence. The defendants moved for summary judgment dismissing the claim on the basis that it was barred by the 2008 release. The motion judge dismissed the motion, finding that the release did not bar the claim as it referred to claims "existing to the present time", that is, 2008, and the defendants' negligence only came to light in 2011. The Divisional Court affirmed that decision. The defendants appealed.
Held, the appeal should be allowed.
The standard of review of the Divisional Court's decision was correctness.
The language used by the parties in the 2008 release was clear and unequivocal. The release limited the claims that were released to those that existed up to that time, arising from all of the services provided by the defendants to the plaintiff to the end of December 2007. For greater certainty, it released all claims made in the fees litigation, as well as all defences or counterclaims that were pleaded or could have been pleaded. Negligent provision of services would have been a viable defence or counterclaim in the fees litigation. The Divisional Court erred in law in holding that, because the parties were not aware that the defendants had given negligent advice on the butterfly transaction, the plaintiff's claim for negligence did not exist when the release was signed. Because neither party was aware that the defendants' advice was negligent, there would be a discoverability issue for the purpose of determining the relevant limitation period. However, the fact that the claim was not discovered did not mean that it did not exist. The negligence action was barred by the release.
APPEAL from the order of the Divisional Court
(Wilton-Siegel, Corbett and Baltman JJ.), [2015] O.J. No. 5637, 2015 ONSC 6361 (Div. Ct.) affirming the order of the motion judge dismissing a motion for summary judgment.
Counsel:
Thomas D. Galligan, for appellants.
Adam Pantel, for respondents.
The judgment of the court was delivered by
K.N. FELDMAN J.A.:
Introduction
[1] The parties signed a broadly worded, mutual release to settle an action. Years later, an unanticipated claim came to light. The issue in this case is whether the release applies to the unanticipated claim. The motion judge and the Divisional Court held that it did not. I disagree and would allow the appeal for the following reasons.
Facts
[2] The respondent Prinova Technologies was incorporated in 1998 as a consulting business offering advice on document automation. It also developed a software business. From 2004 to until a fee dispute arose in 2007, the appellant DMCT LLP acted as Prinova's accountant.
[3] DMCT billed Prinova a total of $66,632.45 for services rendered on three separate matters between 2006-2007:
applying for a Scientific Research and Experimental Development ("SRED") tax credit;
negotiating the departure of an employee; and
structuring a "butterfly transaction" in which Prinova's software and consulting businesses were divided into separate companies. This involved transferring the assets and intellectual property of the software business into a new company on a tax-deferred basis.
[4] Prinova objected to paying the fees. In correspondence between Prinova's lawyer and DMCT's lawyer, Prinova alleged:
DMCT provided "little or [no] value" in preparing the SRED application. Not only was the application submitted late, Prinova's lawyer advised that, if challenged, his client was "in a position to have several experts opine that the work carried out by [DMCT] in respect of the SRED claim was deficient".
DMCT ought to have recognized that it was in a conflict of interest by providing advice to both Prinova and the departing employee about the tax implications of the employee's exit. Prinova alleged that DMCT "clearly preferred" the departing employee's interest over those of Prinova and its principals.
DMCT overcharged Prinova for fees on the butterfly transaction. In particular, DMCT charged significant fees to ensure that the transaction did not negatively impact Prinova's bank covenants. Prinova described this as a "make work project" and argued that DMCT would have known that the bank would treat the consulting and software businesses as consolidated companies.
[5] Prinova's counsel summarized his position: "At the end of the day, my client's position has not changed in that not only did they obtain little value for the payments it has already made to your clients in respect of these matters, but it has incurred damages as a result of some of the advice provided by your client."
[6] DMCT sued for its fees. Before a statement of defence was delivered, the parties agreed to settle the litigation for a total payment by Prinova of $35,000. As part of the settlement, the parties executed a mutual release dated March 31, 2008, the relevant part of which provides:
KNOW ALL MEN BY THESE PRESENTS that DMCT LLP ("DMCT") and PRINOVA TECHNOLOGIES INC. and PRINOVA SOFTWARE INC. (hereinafter collectively referred to as "Prinova"), (including their officers, directors, employees, representatives, associates and assigns) in consideration of the sum of THIRTY-FIVE THOUSAND DOLLARS ($35,000) and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, do hereby remise, release, and forever discharge each other of and from all manner of actions, causes of actions, suits, debts, duties, accounts, bonds, covenants, claims and demands which against each other they had, now have or hereafter may, can or shall have for or by reason of any cause, manner or thing whatsoever existing to the present time with respect to any and all claims arising from any and all services provided by DMCT to Prinova through to and including December 31, 2007 and, without limiting the generality of the foregoing, with respect to any and all claims, counterclaims or defences that were pleaded or could have been pleaded in the action commenced in the Ontario Superior Court of Justice, as court file no. 08-CV-349246 PD3.
(Bold in original)
[7] In late 2011, in the course of a restructuring, Prinova learned that -- far from being tax-free -- the butterfly transaction, as DMCT had structured it, could be subject to an income tax liability of approximately $1.24 million.
[8] As a result, Prinova obtained a court order dated January 23, 2013, rescinding the steps taken to implement the butterfly transaction. As part of the rescission application, Prinova included an affidavit from Enzo Testa, the DMCT partner who had advised Prinova on the butterfly transaction. In that affidavit, Testa acknowledged, without explanation, that the transactions as designed by DMCT did not comply with the relevant provisions of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), and therefore were contrary to Prinova's intentions. Prinova incurred over $250,000 in legal and accounting fees in the process of obtaining the rescission order.
[9] In May 2012, Prinova filed a notice of action against DMCT seeking an order setting aside the 2008 release and claiming damages for negligence, breach of contract, misrepresentation and breach of fiduciary duty in the amount of $3 million.
[10] DMCT moved for summary judgment to dismiss the action on the basis that Prinova's claim was barred by the 2008 Release.
Judgments Below
Motion for summary judgment
[11] The motion judge [[2014] O.J. No. 2061, 2014 ONSC 2527 (S.C.J.)] dismissed DMCT's motion for summary judgment, finding that the release did not bar Prinova's claim. She explained that the wording of the 2008 Release refers to claims "existing to the present time" -- i.e., in 2008. DMCT's "admitted negligence" only came to light in 2011, and because the evidence demonstrated that DMCT failed to make the proper records and tax filings that might have revealed it sooner, "[t]here would have been no basis for the plaintiffs to have asserted a claim, counterclaim or defence in the fees action at the relevant time": at para. 6(1).
[12] The motion judge also made the following finding to support her conclusion, at para. 6(6):
[T]he Mutual Release is a standard, boilerplate form of release that did not and was not realistically intended by its wording to apply to an unrelated matter that arose . . . years subsequently and was not contemplated by the parties. As noted by Testa in his affidavit of June 15, 2012 filed in the rescission application, the result of non-compliance with s. 52(2) of the Income Tax Act was "contrary to the intentions" of both parties. The standard release in the fees action cannot, in my view, be read broadly to cover this circumstance.
Motion for leave to appeal to Divisional Court
[13] Sachs J. granted leave to appeal to the Divisional Court [[2014] O.J. No. 4687, 2014 ONSC 5539 (S.C.J.)]. She found that there was good reason to doubt the correctness of the motion judge's decision. Accepting that the parties might never have contemplated that DMCT's advice on the butterfly transaction might be wrong when they signed the 2008 release, there was still "good reason to find that the express terms of the release precluded" Prinova's claim. Relying on the express wording of the release, she stated, at para. 2(a): "It is open to serious debate that this wording is broad enough to cover any claim, even a future claim, in relation to the advice that the defendants gave the plaintiffs prior to December of 2007."
[14] The leave judge concluded, at para. 3: "The proposed appeal involves issues concerning the ability of parties to settle claims that they may not have contemplated at the time of the settlement. This issue is an important one that extends beyond the interests of the parties and that could have an impact on the administration of justice."
Appeal to Divisional Court
[15] The Divisional Court dismissed DMCT's appeal. At para. 14, it stated as a matter of law that,
Unless a release has exceptionally comprehensive language, it applies only to claims that were known to the parties at the time that it was executed. A dispute that had not emerged, or a question which had not arisen, cannot be absorbed by the words of a general release. If the parties want to bar unknown claims, they must use clear and unequivocal language to express that intention.
(Citations omitted)
[16] The Divisional Court agreed with the motion judge that at the time it signed the release, Prinova did not know that DMCT's advice on the butterfly transaction had been negligently given, and therefore it did not know that it had a claim for negligence against DMCT. The court rejected DMCT's submission that the quality of its work (or lack thereof) was clearly "within the contemplation" of the parties when the 2008 release was executed. The court held that Prinova's objections at that point related to the quality of work performed on the SRED application and the employment matter, but not the butterfly transaction.
[17] By interpreting the words in the release [at para. 16], "any cause, manner or thing . . . existing to the present time" to include only known causes, the Divisional Court concluded that the negligence claim did not exist when the release was signed.
[18] The appeal comes to this court with leave, granted on February 17, 2016, applying the criteria set out in Sault Dock Co. Ltd. and Sault Ste. Marie (City of) (Re), [1973] 2 O.R. 479.
Issue
[19] Did the Divisional Court err in law in its interpretation of the standard language used in the release by failing to properly apply the principles of interpretation established by the relevant case law?
Analysis
Standard of review
[20] Before addressing the issue of law, I will briefly address the standard of review. As this case involves the interpretation of a release given in the context of the settlement of an action and the circumstances leading up to the action, one may think that the standard of review would be the deferential standard normally applicable to the interpretation of negotiated agreements: Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, 2014 SCC 53. However, this appeal comes to the court as an appeal from the Divisional Court with leave. This affects the applicable standard of review.
[21] In Sault Dock, this court determined the criteria it would apply when deciding whether to grant leave from a decision of the Divisional Court sitting in its appellate capacity. Because the court would be granting a second appeal hearing, leave will only be granted in exceptional circumstances where this court would be giving guidance on certain types of issues of general public importance. The court explained, at p. 481 O.R.:
If the resolution of the question would largely have significance only to the parties and would not settle for the future a question of general interest to the public or a broad segment of the public, the requirements to obtain leave will not have been met.
[22] Although the court does not give reasons when granting leave, it is presumed that leave was granted in this case because the appeal raises such an issue. Indeed, that was the basis upon which Sachs J. granted leave to the Divisional Court. Here, the issue is the proper approach to the interpretation of a release. It is an issue of general public importance because although the release is not on a standard form, it uses language that is standard in many common release documents. From a standard of review perspective, this appeal raises a question of law to which the correctness standard applies. See Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., [2016] 2 S.C.R. 23, 2016 SCC 37.
Interpretation of the release
(a) General principles
[23] The seminal decision on the proper approach to the interpretation of a release is the House of Lords' decision in London and South-Western Railway Co. v. Blackmore (1870), L.R. 4 H.L. 610. At p. 263, Lord Westbury stated: "The general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time the release was given."
[24] In Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69, Cory J. cited this principle with approval and noted, at para. 20:
What the statement quoted means is that in determining what was contemplated by the parties, the words used in a document need not be looked at in a vacuum. The specific context in which a document was executed may well assist in understanding the words used. It is perfectly proper, and indeed may be necessary, to look at the surrounding circumstances in order to ascertain what the parties were really contracting about.
(Emphasis added by Cory J.)
[25] This approach was recently addressed again by the House of Lords in Bank of Credit and Commerce International SA (in liquidation) v. Ali, [2001] UKHL 8, [2001] 1 All E.R. 961.
[26] In Ali, a bank terminated the employment of a number of employees and gave them severance packages. In exchange for a release, the bank gave the terminated employees, including the respondent, an extra month's salary. The release contained the following language [at para. 3]:
The Applicant [Mr. Naeem] agrees to accept the terms set out in the documents attached in full and final settlement of all or any claims whether under statute, Common Law or in Equity of whatsoever nature that exist or may exist and, in particular, all or any claims rights or applications of whatsoever nature that the Applicant has or may have or has made or could make in or to the Industrial Tribunal, except the Applicant's rights under the Respondent's [the bank's] pension scheme.
[27] A year later, during the course of the wind-up of the bank, it was discovered that the bank had been carrying on its business in a corrupt and dishonest manner. A number of employees wished to sue the bank for damages caused by the "stigma" of working for a corrupt bank, a previously unknown cause of action. The claim was rejected until the case reached the House of Lords, which ruled that such a claim was sustainable in principle. The respondent then wished to pursue a claim for "stigma damages", and the issue was whether he was barred from doing so by the terms of the release.
[28] Lord Bingham of Cornhill wrote the main decision for the majority. He explained that in interpreting the release, as in interpreting any contractual provision, "the object of the court is to give effect to what the contracting parties intended": at para. 8. The court does not inquire into the parties' subjective states of mind, but makes an objective assessment based on the contract as a whole, the impugned words in their ordinary meaning and in the context of the agreement, the parties' relationship, and all relevant facts surrounding the transaction so far as known to the parties.
[29] Lord Bingham reviewed the jurisprudence from the English and Australian courts on the interpretation of releases. The jurisprudence established that, by using appropriate language, a party can release claims that the party neither knew nor could have known, nor even imagined. However, "in the absence of clear language", the court "will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware": at para. 10. At para. 14, Lord Bingham quoted from a decision of Dixon C.J. of the High Court of Australia in Grant v. John Grant and Sons Pty. Ltd. (1954), 91 C.L.R. 112, [1954] HCA 23, at pp. 129-30 C.L.R.:
From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.
[30] Turning to the release before the court, Lord Bingham pointed out that although the wording was wide enough to cover more than all incidents of the employer/employee relationship, the bank's liquidators acknowledged that they would not seek to apply the release to, for example, a claim for a deposit held in an account at the bank. He concluded from this that the broad words used could not be read literally.
[31] Lord Bingham held, at para. 19, that because the claim for stigma damages was something that the parties to the release "could never have had in contemplation at all", the parties could not have intended that such a claim would be surrendered by the release.
[32] Lord Nicholls of Birkenhead wrote concurring reasons. He pointed out the problem that often arises when interpreting a release: in settling a dispute, the parties want to wipe the slate clean, but then when an unexpected claim comes to light, it is unclear whether the broad general language used was intended to cover the unexpected claim.
[33] In addressing the problem, he refuted the suggestion that unknown claims are not covered by broad general language. I quote his discussion, at para. 27:
The wording of a general release and the context in which it was given commonly make plain that the parties intended that the release should not be confined to known claims. On the contrary, part of the object was that the release should extend to any claims which might later come to light. The parties wanted to achieve finality. When, therefore, a claim whose existence was not appreciated does come to light, on the face of the general words of the release and consistently with the purpose for which the release was given the release is applicable. The mere fact that the parties were unaware of the particular claim is not a reason for excluding it from the scope of the release. The risk that further claims might later emerge was a risk the person giving the release took upon himself. It was against this very risk that the release was intended to protect the person in whose favour the release was made.
[34] That said, Lord Nicholls cautioned that this approach "should not be pressed too far". He explained, at para. 28:
However widely drawn the language, the circumstances in which the release was given may suggest, and frequently they do suggest, that the parties intended or, more precisely, that the parties are reasonably to be taken to have intended, that the release should apply only to claims, known or unknown, relating to a particular subject matter. The court has to consider, therefore, what was the type of claims at which the release was directed.
[35] For example, Lord Nicholls explained, a mutual general release on a settlement of final partnership accounts might properly be interpreted as being confined to claims arising in connection with the partnership business. It would not extend, for example, to a later claim by one partner against the other that the tree roots of his neighbouring property were encroaching.
[36] Applying this discussion of principles to the issue in Ali, Lord Nicholls held that it was clear from the wording that the parties did not intend the release to be limited to known claims, but that it was limited to claims arising out of the ending of the employment relationship. However, the parties were contracting based on the law as it then stood, and a claim arising as a result of a change in the law could not have been within the contemplation of the parties.
[37] Lord Hoffmann, writing in dissent, began by characterizing the words of the release as very broad, without any deliberate gaps. Nevertheless, he explained that there may still be limitations in the scope of the release which could be inferred from the background.
[38] Often a release is given as part of the settlement of a dispute. In such a case, "the scope of the dispute provides a limiting background context to the document": at para. 41. Lord Hoffmann adopted the oft-quoted statement of Lord Westbury in London Railway: "The general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time when the release was given." Lord Hoffmann noted, at para. 42: "This is a rather sweeping statement. It is almost always dangerous to say 'always'. But, in cases of a release given in connection with the settlement of a dispute, it is a fair generalization."
[39] In Ali, the context for the release was not ending litigation, but ending an employment relationship. Therefore, "all claims" meant claims arising from the employment relationship, and included both known and unknown claims. Lord Hoffmann reasoned that because the bank paid specific amounts for the known claims, the extra month's salary it paid for the release must have been for unknown claims, including those not then known to the law. For the bank, the purpose of the release was finality. For the employee, the more unlikely or remote a claim, the more likely the employee would be willing to release it for extra money.
[40] Lord Hoffmann's approach was to give effect to what the parties agreed on ordinary principles of construction. He rejected the submission that because the bank conceded that in spite of the very broad language of the release, some claims such as personal injury claims or claims on accounts held at the bank were not covered, therefore all unknown claims were not covered. He explained that while the bank did not advocate for a literal meaning (i.e., covering any claim whatsoever), it argued for a contextual meaning that would exclude claims outside the employment relationship, but would not exclude unknown claims altogether. Further, if the context demonstrated that both parties intended that the release applied to claims unknown to both of them, he saw nothing unfair in giving effect to that intention. He concluded that it would give the language of the release "a strained construction" to interpret it to exclude the stigma claim: at para. 75.
[41] In summary, the real issue in Ali was not whether the general words of the release should be interpreted to include unknown claims. All the Law Lords agreed that the release covered factually unknown claims. Rather, the issue was whether it was fair to conclude that it was in the parties' contemplation that the release included a claim for stigma damages, where such a claim was unknown in law (and in fact) to the parties when they drafted and signed it.
(b) Application to this case
[42] The factual context and wording of the release are both quite different in this case than in Ali. However, I have discussed the opinions in the Ali case at some length because the Law Lords considered virtually every interpretive issue that could arise in applying the concept of what was "in the contemplation of the parties" when faced with a broadly worded release. One can distill the following principles from these reasons:
(1) One looks first to the language of a release to find its meaning: at para. 8.
(2) Parties may use language that releases every claim that arises, including unknown claims. However, courts will require clear language to infer that a party intended to release claims of which it was unaware: at paras. 9-10.
(3) General language in a release will be limited to the thing or things that were specially in the contemplation of the parties when the release was given: at para. 13.
(4) When a release is given as part of the settlement of a claim, the parties want to wipe the slate clean between them: at para. 23.
(5) One can look at the circumstances surrounding the giving of the release to determine what was specially in the contemplation of the parties: at para. 28.
[43] Applying these principles to the interpretation of the mutual release between these parties, the context was that the release was given as part of the settlement of a fees action by accountants against their client. The client had been unhappy with the service provided by the accountants on three matters. In their lawyer's letter, the client complained that the accountants overcharged for what was accomplished, were in a conflict of interest, performed unnecessary work and performed deficient work. Because the release was given as part of the settlement of the fees claim, its purpose for both parties was to wipe the slate clean in respect of the dispute between the parties.
[44] The release does not purport to release all possible claims, without limitation, that may exist between the parties. Nevertheless, to the extent that the release contains general language, the court must try to determine the matters that were specially within the contemplation of the parties. In this case, one will look at the fact that the context is the settlement of an action. In that context, the language of the release limits its intended scope.
[45] The language of the release refers to all claims existing up to the present time, "arising from any and all services provided by DMCT to Prinova through to and including December 31, 2007". In other words, it limits the claims that are released to those that existed up to that time, arising from all of the services provided by the accountants to the client up to the end of December 2007. And for greater certainty, it releases all claims made in the fees litigation, as well as all defences or counterclaims that were pleaded or could have been pleaded. Negligent provision of services would have been a viable defence or counterclaim in the fees litigation.
[46] Because the release is specific as to the exact claims that are released, there is no need to search for what was contemplated by the parties. It is spelled out specifically and clearly.
[47] The claim that the client now seeks to assert against the accountants is a claim that arises out of the services that the accountants provided before the end of December 2007. The client says that its claim is nevertheless not barred by the language of the release on two bases: first, the claim was unknown to the parties at the time the release was signed and the release does not say that it includes unknown claims. Second, the claim did not exist at the time the release was signed because neither party knew about it or had any reason to know about it at that time.
[48] In my view, neither of these objections bears scrutiny.
[49] Although the release does not specifically say that it includes unknown claims, it includes all claims arising from the services provided by the accountants up to the end of December 2007. By including all claims, but limiting the description of the claims that are intended to be covered both by subject matter and by time frame, there is no need to further specify the types of claims that are included. The language is specific and fully understandable: it includes all claims related to professional services provided during the specified time frame. There is no need, for example, to say, "including tort claims, negligence claims, breach of contract claims, costs claims", etc. They are all included unless specifically excluded. The same analysis applies to unknown claims -- by specifying the claims contemplated by the parties and describing them inclusively, all claims in the defined category are included unless specifically excluded. Had it said "including known and unknown claims", that would just have been another way of saying that the release includes all claims.
[50] In my view, the language used by the parties in this release was clear and unequivocal in its intent and effect. The Divisional Court did not find the language "exceptionally comprehensive" enough to include the claim that arose. I do not agree. More words would not assist. I agree with the observation by Lord Hoffmann in Ali, at para. 38, that the solution does not lie with more verbiage.
[51] The problem for the client here is not that the words used are unclear, but that the claim that arose was unanticipated. In signing the release, the parties intended to fully and finally settle the fee dispute -- a dispute that arose because the client was unhappy with both the time spent and the quality of service provided by the accountants. The language of the release covers all claims arising from the work the accountants did on the butterfly transaction in 2007. The parties were wiping the slate clean in respect of that work. Had the client wished to exclude claims it might later discover arising from that work, it could have bargained for that result.
[52] The Divisional Court held that because the parties were not aware that the accountants had given negligent advice on the butterfly transaction, the client's claim for negligence did not exist when the release was signed. With respect, this statement constitutes an error of law. The negligent advice on how to put in place a butterfly transaction to achieve a tax-free division of the client's business was provided by the accountants in April 2007. Because neither party was apparently aware that the advice was negligent, there would be a discoverability issue for the purpose of determining the relevant limitation period. However, the fact that the claim was not discovered does not mean that it did not exist, nor that it was not discoverable. In fact, it did exist, but came to light only upon being discovered by other accountants four years later.
(c) Other issues raised by the statement of claim
[53] The client did not commence this action with a claim for negligent advice and a defence based on the release. Rather, the statement of claim seeks to set aside the release on the basis that it was entered into based on the misrepresentation by the accountants that their advice on the butterfly transaction would result in no tax consequences, and that because that turned out to be untrue, the release was unconscionable.
[54] The accountants responded by moving for summary judgment on the basis that the release released any claim against it arising from the impugned advice. The courts below found that the release did not bar the underlying negligence claim. I have found that the release does bar the underlying claim. This leaves the question whether there is anything left to be determined in the action.
[55] There is no claim made for fraudulent misrepresentation or concealment. To the contrary, it is acknowledged that the accountants did not know that the advice on the butterfly transaction was ineffective or negligent at the time it was given. Therefore, the misrepresentation claim is, in effect, a claim based on negligent advice on the butterfly transaction. I have found that that claim is barred by the release. The unconscionability claim is similarly founded upon the negligent advice on the butterfly transaction. It is therefore barred as well.
Result
[56] The Divisional Court upheld the decision of the motion judge, which dismissed the appellant's motion for summary judgment and set this matter down for trial, because it found that the respondent's claims were not barred by the release. I would allow the appeal, set aside the decision of the Divisional Court and grant summary judgment dismissing the action.
[57] I would fix the costs of the appeal and motion for leave to appeal at $24,000, inclusive of disbursements and HST. I would award the costs of the three proceedings below to the appellant in the amounts fixed by the courts below.
Appeal allowed.
Footnote:
1 Sault Dock also recognizes that the court may grant leave where it appears in the interests of justice to do so, such as where there is new evidence, an obvious misapprehension on the Divisional Court's part of a relevant fact, or a clear departure from the established principles of law resulting in a miscarriage of justice. None of these criteria apply in this case.
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