DIVISIONAL Court FILE NO.: 74166/05

DATE: 20060411

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

DURNO, ASTON AND WILSON JJ.

B E T W E E N:

EVERETT DEVELOPMENTS INC. and

JOHN PARK

J. DANIEL DOOLEY, for the Appellants (Plaintiffs)

• and -

GARY ANDREW PALLISTER, PALLISTER BACKHOE & GRADING LTD., NADINE MARILYN PALLISTER and HARRY PALLISTER

JAMES A. IRONSIDE, for the Respondents (Defendants)

Heard in Newmarket: March 6, 2006

REASONS FOR JUDGMENT

WILSON, J.:

1This is an appeal from the decision of Justice Keenan dated December 1, 2004. He heard four days of evidence and a detailed accounting between the parties.

2The plaintiffs (appellants), Everett Developments Inc. and John Park were seeking payment in the amount of $31,322.05 alleging that there was a joint venture with the defendants.

3The defendants (respondents), Gary Andrew Pallister and Pallister Backhoe & Grading Ltd. sought payment in the amount of $35,000.00 for wages earned. The defendants denied that there was a joint venture agreement that had come to fruition.

4The learned trial judge accepted that the plaintiffs had proved damages in the amount of $26,895.45 of the $31,322.05 claimed. He also found that Pallister was entitled to be paid for the work performed in the amount of $30,167.05. These two amounts offset each other leaving a net amount owed by the plaintiffs to Pallister in the amount of $3,271.60. Hence the appeal to this court as the net amount in dispute is less than $25,000.00.

5The appellants raise several issues.

1. That the learned trial judge exhibited bias towards the plaintiffs.

2. The learned trial judge cut the plaintiffs off in making submissions and failed to consider relevant evidence with respect to the non-joint venture items claimed.

3. The learned trial judge erred by concluding the case could be determined on a “middle ground” not specified in the pleadings.

6The respondents raise a cross-appeal with respect to costs.

7The learned trial judge ordered on consent that the claim against Nadine Marilyn Pallister and Harry Pallister be dismissed. He ordered no costs. The respondents seek leave to appeal from the decision of the learned trial judge failing to order costs.

8John Park is a Masters of Business Administration graduate with extensive business experience. Gary Pallister is a workingman with a Grade 8 education and extensive experience in excavating.

9Park and Pallister had discussions about a potential joint venture. They began working together in their troubled relationship in April 2000 which terminated in October of 2000.

10The learned trial judge concluded that although there had been “broad brush” discussions about a joint venture relationship that the essential terms were never agreed to. He stated at paragraphs 8, 9 and 19 of his judgment as follows:

8“When the work was undertaken under the joint venture, it is clear that Pallister had never understood Park’s meaning of a ‘joint venture’. There was no joint venture agreement. There was no written document which spelled out the relationship, the duties, the rights and the liabilities of the parties.”

9“From the outset, there was conflict between Park and Pallister. Pallister expected to get personal compensation for the work that he did perform in the contracts. Park expected that all contract revenue was to come to the joint venture. The wages of employees and operating expenses were to be paid out and the remaining balance to be split between Park and Pallister.”

19It is clear that Pallister needed to have a steady income for the work done by him. He had always had an hourly rate and continued to bill at the rate of $20.00 per hour. Counsel for Park points out that Pallister’s handwritten notes show that he expected an hourly wage and 50 percent of the profits after the wages had been deducted. “

11The learned trial judge concluded that from the beginning the absence of consensus was a hallmark of the relationship between the parties.

12At paragraphs 20 and 21 of his judgment, the learned trial judge concludes that the plaintiffs had failed to establish the claim that a joint venture relationship was formalized. He also concluded that Pallister was entitled to be paid for the work that he had done. The learned trial judge then proceeds with determining the issues raised in the lawsuit by way of an accounting between the parties.

Issues Raised on the Appeal:

1. Bias:

13We do not agree with the appellant’s assertion that the learned trial judge exhibited bias or a reasonable apprehension of bias towards the appellants. Clearly the learned trial judge was frustrated by the detailed accounting information and the failure of the parties to clearly clarify the issues in dispute. We note that the learned trial judge was faced with some 13 volumes of detailed accounting information. He prodded both counsel, requiring them to focus and proceed with the trial within the five-day estimate of time. Had he failed to do so this trial would have taken a much longer period of time at significant expense to both parties.

2. The Non-Joint Venture Claims:

14The appellants suggest that the learned trial judge limited evidence with respect to various non-joint venture claims.

15We note that the plaintiffs’ total net claim after considering the detailed accountings of credits and debits was $31,322.05. The learned trial judge allowed the claim in the amount of $26,895.45. The reasons for the learned trial judge are unfortunately sparse and do not specify the reasons for reducing the claim by some $4,500.00. The reduction may well relate to engineering design work claimed by Park and not allowed. It would have been helpful for the learned trial judge to be more precise in this calculation. The dilemma, however, faced by the learned trial judge was enunciated by defence counsel during his submission during argument to the learned trial judge. I note Page 26 of the transcript of October 6, 2004, wherein counsel states:

“What it does suggest is that Mr. Park has created a virtual impenetrable fog of financial data to a point that it’s almost impossible to understand without the assistance of experts and even then what has transpired in this exercise.”

16It is clear that the learned trial judge reviewed the accounting presented by each counsel on a line-by-line basis.

17We conclude, therefore, given the amount in dispute, that that failure of the learned trial judge to be precise about the $4,500.00 reduction in the amount claimed by the plaintiffs is not a reviewable error warranting a new trial.

3. Issue Not Pleaded:

18The appellants allege that the learned trial judge branched out on his own considering issues that were not properly pleaded or before him.

19We do not agree. The case cited by the appellant, ACH International Inc. v. Royal Bank of Canada (2005) 2005 17769 (ON CA), O.J. No. 2048, (C.A.) is clearly distinguishable. It was clear from the opening comments of counsel at this trial that both parties contemplated an accounting between the parties to unravel this unfortunate relationship. The parties could not agree on the details of the accounting, and in particular, whether Pallister was entitled to be paid an hourly wage in addition to profits.

20In our view, ACH involved very different facts. In ACH the learned trial judge determined the case upon a completely alternate tort that was neither pleaded nor argued. We conclude that the Statement of Defence as drafted is broad enough to include the accounting that was conducted. I refer to paragraph 4 of the Statement of Defence.

4“Gary further states and the fact is that while the plaintiff Parks talked of a joint venture from time to time no specific terms were ever agreed upon, no documents were ever generated or signed to reflect a joint venture agreement, and at no time did Gary participate in a joint venture with the plaintiffs.”

21We also note that the plaintiffs’ claim included compensation with respect to joint venture claims as well as personal items claimed by Parks outside the joint venture. The plaintiffs, by their own pleading, contemplated an accounting between the parties. Again, counsel made both detailed, written and oral arguments with respect to each accounting item in their submissions to the learned trial judge.

22For these reasons we conclude that the appeal must be dismissed.

23We also conclude that leave to appeal the order of costs ought not to be granted. Cost orders are inherently discretionary, not to be lightly interfered with. We see no reason to interfere with respect to the decision of the learned trial judge to decline to order costs in favour of Nadine and Harry Pallister. The cross-appeal is also dismissed.