ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
TILAK DIAS
Plaintiff (Respondent)
Antony Niksich for the defendants (appellants)
- and -
RD GROUP INTERNATIONAL and DALE SMITH
Tilak Dias plaintiff (respondent), in person
Defendants (Appellants)
Heard: April 15, 2008
1This is an appeal from the judgment of the Honourable Deputy Judge Winer dated April 30, 2007. In that decision, the plaintiff Tilak Dias was awarded $6,219.13, representing a "refund" under a contract for job-search services between Dias and a non-party to the proceeding, BH International ("BH").
Facts
2Dias executed a written contract with BH, a job-search agency, in August 2004. BH was to assist Dias in obtaining employment.
3Dias paid a fee of $6,219.13 to BH. Dias testified that the fee was obtained from Dias by an individual named Les Walker on behalf of BH.
4The contract between Dias and BH provided in part;
…If you are still not satisfied at any interval, you are under no obligation to continue. BH Careers will refund any unearned portion of the fee according to the allocation schedule listed… .
5Some time after Dias entered into the contract with BH, a great amount of litigation arose around BH, and BH withdrew to the United States.
6Smith was the manager of the BH branch in North York, Ontario.
7Smith learned in late October 2004 that BH was shutting down its branches in Canada.
8In the face of BH shutting down its branches in Canada, Smith formed a new company, RD Group ("RD"), carrying on business as a job search agency.
9The plaintiff claimed that RD was the successor company to BH by way of amalgamation or takeover. The plaintiff claimed that RD was bound by the contractual obligations of HD. Further, that Smith was personally bound by the contract.
10Smith testified in the clearest of terms that he founded a new company, engaged in the same kind of business, when HD closed its operations in Canada. Smith testified that he was the owner of RD whilst he had been only an employee of HD.
11He denied that RD amalgamated with or succeeded HD. No contractual obligations of HD were assumed by RD.
12The only "evidence" touching upon the issue tendered by the plaintiff was a memorandum from RD.
13It is addressed from RD to "All current clients receiving our career search and management services."
14The following is the text of the memorandum:
We appreciate your understanding and support during these times of positive change. Allowing us to take even more control of and responsibility of the career management services we deliver to you. Your satisfaction is our intention. RD Group International signals new ownership and a renewed determination to continue to support our existing and new clients in the best manner possible. The service level has not changed. It will continue to improve in new and productive ways at the planning and implement stage right now. The primary location has not changed. We recently consolidated the former three Toronto and GTA region offices into the original downtown Bay Street location. Almost all of the existing clients have made this transition smoothly. A few have not and we sincerely regret this. We earnestly desire to do all we can to rectify these few situations which were briefly compromised. The people here have not changed. Below you will see our team consisting of the best of the best professionals emerging within our ranks. Each of us is committed unconditionally to helping each of you achieve the career objectives you want so strongly. As always, we need your unqualified and due diligence participation in this partnership with us in order to succeed together.
Please feel free to contact any of our team below to assist you in our career goals. Senior career advisement, Murray Nahnybida, director, Jeanette Roy, Patricia Campbell, Gord McCray and Doug Longman (ph). Senior career consultant Steven Fischer, Rene Year (ph), Richard Bastisitch (ph) and Dale Smith. Administrators Susan Maxwell and Lorraine Sandy (ph).
15The trial judge took the document to mean, and held that the plaintiff was entitled to accept the memorandum to mean, that RD had taken over the HD contract with the plaintiff. He held that the plaintiff was entitled to assume the new company took over his contract and his payments. The trial judge went on to find the plaintiff was entitled to a refund under the contract and awarded the plaintiff the above noted sum.
16In making these findings the trial judge committed a palpable and overriding error.
17The memorandum is, simply put, no evidence whatsoever that RD was a successor to HD, nor that it had bound itself to the contracts of HD. There was no other evidence at trial which could possibly make RD liable on the contracts.
18In reference to Smith, he was only an employee of HD. He did not sign the contract. He did not take on personal liability on the contract of HD. Although he was the owner of RD, he committed no wrongful or fraudulent conduct which justified piercing the corporate veil. Montreal Trust Co. of Canada v. Scotia McLeod Inc. (1995), 129 D.L.R. (4th) 711 (Ont. C.A.). Furthermore, RD was not liable and Smith could therefore not be liable.
19Accordingly, the appeal is allowed, the judgment below set aside and the action dismissed.
20Costs here and below to the appellant fixed at $1,500.
Ferrier J.
Released: April 30, 2008
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COURT FILE NO.: DC 237/07
DATE: 20080430
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
TILAK DIAS
Plaintiff
(Respondent)
- and -
RD GROUP INTERNATIONAL and DALE SMITH
Defendants
(Appellants)
REASONS FOR JUDGMENT
FERRIER J.
Released: April 30, 2008
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