Court of Appeal for Ontario
Date: 2023-12-01 Docket: C70522
Before: Benotto, Roberts and Copeland JJ.A.
Between:
Canadian National Railway Company Plaintiff (Respondent)
And:
Scott Paul Holmes, Jennifer Lynn Parisien, also known as Jennifer Lynn Flynn in her personal capacity and as the sole proprietor and operating as Efficient Construction, Janice Shirley Maureen Holmes, Murray Fussie, Scott Albert Pole, Rick Sousa, in his personal capacity and operating as Trax Unlimited, Michael Sousa, in his personal capacity and operating as Trax Unlimited, Julie Sousa, 2035113 Ontario Ltd., Complete Excavating Ltd., Monterey Consulting & Construction Ltd., 2071438 Ontario Ltd., operating as Complete Trax, 2071442 Ontario Ltd., The Scott Holmes Living Trust*, The Jennifer Lynn Flynn Living Trust*, Greyslone Ltd. and Belview Management Ltd. Defendants (Appellants*)
Counsel: Marc Munro, for the appellants Peter Griffin and Brendan Morrison, for the respondent
Heard: November 28, 2023
On appeal from the judgment of Justice Markus Koehnen of the Superior Court of Justice, dated March 17, 2022.
Reasons for Decision
[1] The appellants seek to appeal the May 7, 2021 dismissal of their motion to stay the action. The appellant, Jennifer Flynn, also appeals the March 17, 2022 judgment of conspiracy, joint and several liability, disgorgement of profits and the award of punitive damages made against her. The other appellants do not otherwise challenge the trial judge’s findings and judgment against them. The trial judge had found that the appellants accrued $10,264,237 in profits as a consequence of improperly using Scott Holmes’ position as a supervisor with the respondent to secure construction work for companies he owned and operated.
[2] We dismissed the appeals for reasons to follow. These are our reasons.
[3] These appeals represent the culmination of the respondent’s 15-year odyssey to recover several million dollars taken by the appellants as a result of their deceitful scheme. The trial judge found that Mr. Holmes, a former supervisory employee of the respondent, breached his fiduciary duty to the respondent by hiring the corporate appellants, his own companies, and causing the respondent to approve his corporations’ invoices. He also found that Mr. Holmes’ common law wife, Ms. Flynn, was deeply involved in the management of the corporations, knew or ought to have known she was assisting him with this deceitful scheme perpetrated through the corporations and benefitted from the improperly obtained profits. The trial judge made adverse credibility findings against Mr. Holmes and Ms. Flynn. He also determined that they engaged in “deception and abuse of the litigation process”. He ordered the appellants, jointly and severally, to disgorge profits in the amount of $10,264,237 and awarded $1,000,000 in punitive damages against them. As there was no evidence that assets held by Mr. Holmes, Ms. Flynn and their respective living trusts were acquired with anything other than the respondent’s funds, the trial judge ordered a constructive trust over all their assets, including those in the living trusts, and a tracing order, so that the respondent could enforce its judgment and hold the appellants accountable.
[4] We are not persuaded that there is any basis for appellate intervention.
[5] First, the appellants’ stay motion is not properly before this court. On May 7, 2021, the trial judge dismissed Mr. Holmes and Ms. Flynn’s motion to stay the respondent’s action as an abuse of process for its alleged failure to immediately communicate the details of its settlement with other defendants, who departed from the action in 2012. The trial judge made a dispositive endorsement, giving “a very high level explanation of the result”, with more detailed reasons to follow. There was no further order taken out for the dismissal of the stay motion.
[6] The trial began shortly after the dispositive endorsement was issued and went for almost a month. In his reasons for judgment dated March 17, 2022, the trial judge expanded upon but did not vary from his earlier reasons for dismissing the stay motion. The judgment disposing of the action did not contain any provision dismissing the stay motion or any reference to the May 27, 2021 dismissal of the stay motion.
[7] It is well-established that an appeal is from the order rather than the reasons for the order: Cirillo v. Ontario, 2021 ONCA 353, 486 C.R.R. (2d) 25, at para. 73; Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404, 131 O.R. (3d) 455, at para. 33. The appellants did not appeal the trial judge’s May 7, 2021 order within the 30-day deadline prescribed under r. 61.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. We are not persuaded by the appellants’ argument that the May 7, 2021 order was part of the trial proceedings. The March 17, 2022 judgment was independent from the dismissal order of the stay motion. The appeal from the judgment is not an appeal from the May 7, 2021 order. As a result, the appeal from the May 7, 2021 is not before us.
[8] The appellants have not sought to extend the time to appeal but submit that the failure to appeal was an irregularity that should be excused by this court. In the circumstances of this case, there is no evidentiary or other basis to warrant the exercise of our discretion to allow the appellants to appeal the May 7, 2021 order. The overall justice of the case requires that we not do so. In our view, the appellants’ delay in pursuing their appeal of the May 7, 2021 order following a long and costly trial would be extremely prejudicial to the respondent and is consistent with the behaviour the trial judge referred to as “deception and abuse of the litigation process”.
[9] Second, Ms. Flynn’s grounds of appeal amount to an invitation for this court to redo the trial judge’s findings. That is not our role. The trial judge made findings of fact that were firmly grounded in the evidence. He was the best placed to make these findings, having had the benefit of the entire factual record and the witnesses before him in a lengthy trial.
[10] Ms. Flynn submits that the trial judge erred in ordering her to disgorge profits and that her limited actions with the corporations caused no direct harm to the respondent. We disagree. The trial judge made clear and unassailable findings that Ms. Flynn participated in a conspiracy to assist Mr. Holmes to breach his fiduciary duty to the respondent by deceitfully hiring and approving invoices from his own corporations. He also found that these actions resulted in the appellants benefiting from millions of dollars of ill-gotten profits. Absent error, which we do not see here, the trial judge’s findings are owed considerable deference on appeal. There is no basis for appellate intervention.
Disposition
[11] Accordingly, the appeals are dismissed.
[12] The respondent is entitled to its costs from the appellants, on a joint and several basis, in the all-inclusive agreed upon amount of $40,000.
“M.L. Benotto J.A.”
“L.B. Roberts J.A.”