COURT OF APPEAL FOR ONTARIO

CITATION: Franmed Consultants (1993) Inc. v. Medcan Health Management Inc., 2020 ONCA 687

DATE: 20201029

DOCKET: C67989

Doherty, Paciocco and Coroza JJ.A.

BETWEEN

Franmed Consultants (1993) Inc., 1852421 Alberta ULC and Dr. Robert Francis

Plaintiffs (Appellant)

and

Medcan Health Management Inc., Shaun Francis, Andrew Carragher, Paige Francis, Edwin F. Hawken, Urban Joseph, Beau Laskey, Thomas P. Reeves, Owen Rogers and Craig Shepherd

Defendants (Respondent)

AND BETWEEN

Medcan Health Management Inc.

Plaintiff by Counterclaim

and

Franmed Consultants (1993) Inc., Dr. Robert Francis and Leonard Goodman

Defendants by Counterclaim

Ronald B. Moldaver, Q.C., for the appellant

Fredrick R. Schumann, for the respondent

Heard: October 14, 2020 by video conference

On appeal from the order of Justice Barbara A. Conway of the Superior Court of Justice, dated January 16, 2020.

REASONS FOR DECISION

[1] The appellant, Franmed Consultants (1993) Inc. (“Franmed”), appeals from the motion judge’s decision to dismiss its action against the respondent, Medcan Health Management Inc. (“Medcan”), under r. 20 of the Rules of Civil Procedure, R.R.O. 1990. Reg. 194. Franmed also applies for leave to appeal the motion judge’s costs award to Medcan in the amount of $100,000 for the action and the motion. At the conclusion of the oral hearing, we dismissed the appellant’s appeal and application for leave to appeal costs with reasons to follow. These are our reasons.

[2] Dr. Robert Francis is the owner and sole shareholder of Franmed. He operates a medical practice called the Chairman’s Plan through Franmed, in a space leased by Medcan.

[3] Dr. Francis is also the founder of Medcan. He controlled Medcan until 2016, when his son, Shaun Francis, acquired joint control of the company.

[4] From the 1990s until 2019, Medcan made annual payments to Franmed. The payments increased over time and, by 2018, Medcan was paying Franmed $1.2 million per year. Dr. Francis claimed that these were payments for services that Franmed provided to Medcan.

[5] In 2018, Medcan’s board of directors assembled an independent committee to examine the relationship between Dr. Francis, Franmed and Medcan. On September 12, 2018, Shaun, on behalf of the board, sent a letter to Dr. Francis notifying him that Medcan would pay Franmed $1.2 million annually for two more years until September 2020, when the payments would cease. Dr. Francis did not accept this arrangement. By January of 2019, the board determined that Dr. Francis was a risk to Medcan’s reputation because of his erratic behaviour and that the payments to Franmed should be discontinued.

[6] Franmed brought an action against Medcan for damages arising from breach of contract. Franmed argues that it had a longstanding contract with Medcan of indeterminate duration which required Medcan to make the payments it had been making to Franmed over the years. Franmed further argues Medcan breached the agreement when it purported to terminate it. Franmed submits damages are the appropriate remedy in the circumstances as they now exist between the parties. Franmed fixes those damages at the equivalent of reasonable notice were the agreement capable of termination. Franmed submits that seven years constitutes reasonable notice.

[7] Medcan defended the action and issued a counterclaim. The actions became the subject matter of two summary judgment motions heard together by the motion judge. After carefully examining the evidence, the motion judge held that the documentary evidence did not support the existence of a contract or define any terms of the alleged contract. She found that the only reference to an oral agreement was in the September 12, 2018 letter sent by Shaun. However, this referenced Medcan’s willingness to make an additional two years of payment to Franmed; in her view, the letter did not refer to or support the existence of any ongoing obligation of Medcan to make annual payments to Franmed. The motion judge concluded that while Medcan historically made payments to Franmed, there was no contract that required it to do so in perpetuity. Accordingly, the motion judge dismissed Franmed’s action.

[8] On appeal, Franmed argues that the motion judge’s conclusion that there was no contract is unreasonable. It contends that the documents before the motion judge, including Shaun’s letter of September 12, 2018, draft term sheets used in negotiations when Medcan attempted to purchase the Chairman’s Plan from Franmed, financial statements, and Dr. Francis’ affidavit evidence point to the existence of a contract.

[9] We do not accept this submission. The core issue on the motion was whether a contract existed between Franmed and Medcan, and the motion judge’s decision is entitled to deference.

[10] In our view, the motion judge’s decision rested on inferences and findings that were clearly open to her and reasonable on the evidence adduced on the motion. There is no basis to interfere with the motion judge’s conclusion that there was no contract.

[11] The motion judge’s finding that there was no contract is fatal to Franmed’s other arguments in relation to oppression and relief from forfeiture. These arguments are predicated on the existence of a contract.

[12] Turning to Franmed’s application for leave to appeal the costs awarded below, the motion judge made several costs orders. First, she awarded Medcan costs for the action and the motion in the amount of $100,000. Second, she ordered Franmed to pay costs in the amount of $30,000 that were fixed by a different judge on a previous motion and made payable in the cause. Third, she awarded Shaun Francis costs for the action and the motion in the amount of $30,000. Finally, she ordered Franmed to pay costs in the amount of $5,000 that were agreed to between the parties in respect of a previous motion argued before a different judge.

[13] Franmed seeks leave to appeal only the costs order of $100,000 for the action and the motion. Franmed’s complaint is that the quantum ordered was excessive.

[14] We see nothing in this submission, and no basis for disturbing the motion judge’s discretionary costs order.

[15] Accordingly, we dismiss the appeal and refuse leave to appeal costs. Medcan is entitled to costs of the appeal fixed in the agreed upon amount of $8,500, inclusive of disbursements and applicable taxes.

“Doherty J.A.”

“David M. Paciocco J.A.”

“S. Coroza J.A.”