COURT FILE NO.: 464/08

DATE: 20081126

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

BLUE NOTE MINING INC.

Plaintiff

• and -

CANZINCO LTD. and BREAKWATER RESOURCES LTD.

Defendants

Peter H. Griffin and

Nadia Campion, for the Plaintiff

H. James Marin and

Sylvia M. Samuel, for the Defendants

HEARD at Toronto: November 26, 2008

JANET WILSON J.: (Orally)

1The defendants’ motion to seek to appeal from the decision of Pepall J.,dated September 3, 2008, is dismissed. Neither of the tests outlined in Rule 62.02 (4)(a) or (b) have been met.

2Pepall J. refused the defendants’ request for a stay of the Ontario proceedings. She concluded that the Ontario Court, not the New Brunswick Court, was the appropriate forum to determine the party’s dispute, both in terms of the written contract and also in accordance with the assessment of the competing factors comprising the forum’s convenience.

3There are no conflicting decisions and there is no reason for this matter to be considered by the Divisional Court. The Ontario Court of Appeal has recently rendered decisions dealing with the analysis of the forum convenience issues. See Precious Metal Capital Corp. v. Smith, 2008 ONCA 577, [2008] O.J. No. 4368 (C.A.); Young v. Tyco International of Canada Ltd., 2008 ONCA 709, [2008] O.J. No. 4046 (C.A.)

4Defence counsel suggests that there is good reason to doubt the correctness of the order in question. He raises several issues.

5The asset purchase agreement is clear that the parties attorn to the jurisdiction of the Ontario Court and that Ontario law applies. The defence suggests that as the issues raised in this matter concern pre-contractual misrepresentations, the attornment clause does not apply. He suggests that the motions court judge has mischaracterized the plaintiff’s claim.

6The defence further argues that Breakwater is not a party to the agreement and therefore the attornment clause does not apply to Breakwater. Pepall J. considered both of these issues and concluded that Breakwater was bound as an affiliate and all of the issues were appropriately dealt with by the Ontario Court. She concludes at pages 9 and 10 of her decision:

“I am also not persuaded that the nature of Blue Note’s claims takes this action outside the scope of the parties’ purchase agreement. It seeks a declaration with respect to rights flowing from the agreement; an agreement the terms of which the moving parties rely upon. As to Breakwater, although it was not a party to the purchase agreement, it is encompassed by the definition of affiliate in the agreement and at least one of the indemnities. I do not consider these to be exceptional circumstances.”

7I agree with the conclusions reached by Pepall J.

8Pepall J. then correctly considers the principles with respect to whether a stay should be granted in accordance with s.106 of the Courts of Justice Act and the decision of Navionies Inc. v. Nautical Data International [2006] O.J. No. 5397 (Ct.?????). She carefully considers the list of factors enunciated in Muscutt v. Courcelles (2002), 2002 44957 (ON CA), 60 O.R. (3d) 20 at para. 41 (C.A.). She concludes that strong cause has not been established by the defendants and concludes the stay of the Ontario proceeding is not appropriate. She does acknowledge that the moving parties have some compelling arguments but on balance she concludes that the stay should not be granted.

9I disagree with defence counsel’s arguments there is good reason to doubt the correctness of the decision. The decision is supported by the evidence and Pepall J. correctly and carefully applies the relevant principles of law.

10For these reasons the motion for leave to appeal the decision pursuant to both s.62.02(4)(a) and (b) is dismissed.

COSTS

11The parties agree that costs should be fixed in the amount of $5,000.00, inclusive of GST, payable by the unsuccessful party. In these circumstances, the defendants shall pay this sum to the plaintiff.

JANET WILSON J.

Date of Reasons for Judgment: November 26, 2008

Date of Release: November 27, 2008

COURT FILE NO.: 464/08

DATE: 20081126

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT