CITATION: Toronto Hydro-Electric System Limited v. Toronto (City), 2015 ONSC 1406

DIVISIONAL COURT FILE NO.: 586/14

DATE: 20150313

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: TORONTO HYDRO-ELECTRIC SYSTEM LIMITED and TORONTO HYDRO ENERGY SERVICES INC., Plaintiffs/Appellants/moving parties

AND:

CITY OF TORONTO, AECOM CANADA LTD. SONCIN CONSTRUCTION CORPORATION and QX LTD., Defendants/Respondents

AND:

BLACK & MCDONALD LIMITED and CORE EXCAVATION LTD., Third Parties

BEFORE: E. Kruzick J.

COUNSEL: Kelly Friedman, for the Plaintiffs/Appellants, Toronto Hydro-Electric Systems Limited and Toronto Hydro Energy Services Inc.

Iain Peek, for the Defendants/Respondents, City of Toronto and Soncin Construction Corporation

Jeffrey Percival, for the Defendant/Respondent, AECOM Canada Ltd.

William Blakeney, for the Defendant/Respondent, QX Ltd.

Joseph A. Baldanza, for the Third Party, Black & McDonald Limited

David A. Zuber and Joseph Villeneuve, for the Third Party/Appellant/Moving Party, Core Excavation Ltd.

HEARD at Toronto: March 2, 2015

ENDORSEMENT

Nature of the motion

[1] This is a motion made in writing by the third party in this action, Core Excavation Ltd. (“Core”), for leave to appeal an order made by Chiappetta J. on December 9, 2014.

BackGround

[2] In 2010, the City of Toronto (“Toronto”), contracted with the defendant Soncin Construction Corporation (“Soncin”) to be its general contractor for a project. Soncin retained Core as its subcontractor for some demolition work. The other defendant, AECOM Canada Ltd. (“AECOM”) was the project administrator.

[3] In the main action, Toronto Hydro-Electric System Limited and Toronto Hydro Energy Services Inc. (“Hydro”) sued Toronto, Soncin, AECOM and QX Ltd. for damages as a result of costs it incurred to repair and re-route power cables resulting from the demolition. Soncin and Toronto issued a third party claim again its two subcontractors, one of whom was Core. The third party claim is for contribution and indemnity pursuant to the Negligence Act, R.S.O. 1990, c. N.1.

[4] In the statement of claim, Hydro alleges that Soncin and Toronto failed to engage “qualified” subcontractors, Core being one of them. Toronto and Soncin deny this allegation.

[5] Core, in its third party defence, denies it was negligent. Core takes the position that a full and final release with Soncin and Toronto are a complete defence on the third party claim. Core moved for summary judgment on this basis. The motion was denied.

test

[6] In their argument, both parties accurately referred to the test to be applied on this motion for leave to appeal.

[7] Rule 62.02(4) of the Rules of Civil Procedure governs when leave may be granted. The test for granting leave to appeal to the Divisional Court from this interlocutory order, as set out in Bell ExpressVu Limited Partnership v. Morgan, (2008) 67 C.P.C. (6th) 263, 2008 63136, is an onerous one.

[8] In reviewing the factum of the moving party and applying the test and the law the moving party has failed to meet the requirements. Accordingly, the motion for leave is denied.

Analysis

Overview

[9] I have reviewed the reasons of the motions judge. They are clear, thorough, organized and well-reasoned.

[10] The grounds on which leave may be granted, pursuant to rule 62.02(4), are twofold: (1) if there is a conflicting decision and I, as the judge hearing this motion find that leave should be granted, or (2) there appears to be good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that leave to appeal should be granted.

Conflicting Decisions

[11] Core argues that there is a conflicting decision. When considering whether there is conflicting jurisprudence this court’s decision in Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542, provides some guidance as to the approach.

[12] As set out in Comtrade Petroleum, to meet the requirement of a “conflicting decision”, the moving party must demonstrate a difference in the principles chosen as a guide in the exercise of discretion. Core, as I find, has failed to demonstrate that difference.

[13] Core referred the court to the contract of the parties and argues waiver and/or estoppel. Core argues the Supreme Court of Canada decision in Sattva Capital Corporatin v. Creston Molly Corporation, 2014 SCC 53, 373 D.L.R. (4th) 393, for the proposition that the goal of contractual interpretation, to ascertain the objective intentions of the parties, is inherently fact specific.

[14] Here there are two contracts in issue, the main contract between Toronto and Soncin and the subcontract between Soncin and Core. Core argues that its contract is a complete bar to the third party claim as Soncin failed to provide notice of its claim pursuant to the language of the contract.

[15] The motions judge considered the language of the contract, the affidavit evidence and cross-examinations as put before her. She found, as she was entitled to do, that there were inconsistencies in terms of the respective intentions of conduct so that she was unable to determine with confidence if Soncin and Toronto waived their respective right to claim contribution and seek indemnity from Core.

[16] In Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, the Supreme Court dealt with the principles of promissory estoppel. As set out in that case, the party relying on the doctrine must establish that the other party has, by words or conduct, made a promise which was intended to affect their legal relationship and to be acted on. It is an equitable defence that requires evidence, or evidence from which an inference can be drawn.

[17] I find the motions judge did not err in failing to find the contract provisions as a bar to the claim against Core. The motions judge found that the evidence on the parties’ intentions was inconsistent and deficient. She found that she could not sufficiently infer the parties’ intentions to abandon their rights to a claim for contribution and indemnity based on the negotiations which took place and the payment of the releases of Core’s hold back relating to the project. I agree with the respondents that, on the record, the evidence was simply not available to the motions judge to satisfy her that there is no genuine issue for trial.

[18] In looking at the Supreme Court of Canada authorities, I agree with the respondents that the evidentiary record must establish an “unequivocal intention” to abandon rights. As held by the motions judge, I do not find that is clear in this case. I agree with the motions judge that based on the conduct of the parties to the contract, the issue must be flushed out at trial.

[19] I therefore do not find merit in the argument that there is a conflicting decision.

Importance of the Issue

[20] In considering whether there is good reason to doubt the correctness of the order made by the motions judge I must consider whether the decision is one which would benefit from “very serious debate” as per Brownhall v. Canada (Ministry of Defence), (2006), 2006 7505 (ON SC), 80 O.R. (3d) 91. Core, the moving party, has failed to demonstrate that the decision challenged is one requiring “serious debate” or one which warrants resolution by a higher court: Brownhall at para. 30. The matter as put before me, I find, is limited to the facts in dispute and to the specific contracts between the parties so that it does not meet the standard of general importance to go to a higher court.

[21] Even if this is an important issue, as the motions judge found, within the context of the contract in issue, an assessment of the conduct of the parties necessitates a trial.

Methodology and Approach

[22] The moving party also takes issue with the approach taken by the motions judge. Core relies on this court’s decision in Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200. Core submits that the motions judge failed to follow the roadmap for summary judgment set out in that decision of Corbett J. I disagree.

[23] From my review of the endorsement, although the case was not specifically referenced, the methodology employed was as set out in Sweda.

[24] To be more specific, the motions judge followed the Sweda roadmap and considered all of the necessary points. In her analysis in the handwritten endorsement of December 9, 2014, she held that:

(1) she could not make the finding that there was no genuine issue requiring a trial (either based on contract or the conduct of the parties),

(2) the issue of Core’s qualification, which was raised in the main action, required a trial, and

(3) seizing herself of the third party claim was not an option where the claim should be determined in the context of the main action and a trial.

conclusion

[25] In my review, there is no good reason to doubt the correctness of the order in question.

[26] As expressed by the motions judge, the issues before the court were found to be not straight-forward interpretations of contract. Rather, in her review of the record and in the exercise of her discretion, the motions judge, I find, rightly concluded that a full trial involving the moving party was required in order to avoid substantive unfairness. Accordingly, leave to appeal is denied.

costs

[27] If the parties cannot agree, they may make brief three page written submissions on costs together with cost summaries with 15 days. Otherwise the court will assume costs are settled.

E. Kruzick J.

Date: March 13, 2015