DATE: 20020304 DOCKET: C35359 & C35360

COURT OF APPEAL FOR ONTARIO

RE:

EDPERBRASCAN CORPORATION (Plaintiff/ Appellant) – and – 177373 CANADA LIMITED (Defendant/Respondent)

AND BETWEEN

LABATT BREWING COMPANY LIMITED (Plaintiff by Counterclaim/Respondent) – and – EDPERBRASCAN CORPORATION, EPSIM INVESTMENTS LIMITED and MICO INVESTMENTS LTD. (Defendants by Counterclaim/Appellants)

BEFORE:

AUSTIN, MOLDAVER AND MACPHERSON JJ.A.

COUNSEL:

R. Paul Steep and Geoff R. Hall for the appellant EdperBrascan Corporation

Bernie McGarva for the appellants Epsim Investments Limited and Mico Investments Ltd.

Neil Finkelstein and Jeff Galway for the respondents 177373 Canada Limited and Labatt Brewing Company Limited

HEARD:

February 25 and 26, 2002

On appeal from the judgment of Justice Dennis Lane dated October 27, 2000.

E N D O R S E M E N T

Released Orally: February 26, 2002

[1] EdperBrascan Corporation (“Edper”) appeals from the summary judgment of Lane J. requiring Edper to pay $135.5 million and other amounts in fulfilment of Edper’s obligations under paragraph 4 of a letter agreement of March 9, 1993 between Edper and Labatt.

[2] Lane J.’s reasons provide a detailed analysis of the agreement in issue and of the conduct of the parties in relation thereto. We agree with his approach, his analysis and his conclusions. In particular, we agree that on the basis of the material before him, it was an appropriate case for summary judgment. We agree, as well, with his interpretation of the agreement.

[3] We had some concern with respect to the fact that although the agreement provides that Edper may discharge its obligation to Labatt by way of shares in four corporations, instead of, or in addition to cash, Lane J. limited the relief afforded to Labatt to payment in cash. We are persuaded, however, that he was correct in doing so.

[4] The four corporations in question are: Brascan Limited, Noranda Inc., London Insurance Group and one of Great Lakes Power Limited or Great Lakes Power Inc. Edper insisted on offering the shares of a Great Lakes company and we agree with Lane J. that on the material before the court, Labatt was entitled to reject them as not “equivalent value”.

[5] London Insurance Group has long since passed from Edper’s control. The parties appeared to agree that it need not be considered. That leaves Brascan and Noranda. Before the action was commenced by Edper, Labatt had indicated that its willingness to accept Brascan shares but Edper was apparently not willing. That would leave Noranda.

[6] While Edper in its submissions to this court argued that Lane J. erred in restricting Edper to payment by way of cash, it was never made clear by Edper that it would now willingly pay in shares of Noranda. The relief demanded by Edper is the right to require Labatt to accept payment in Great Lakes shares.

[7] The letter agreement of March 9, 1993 provided for the “orderly liquidation” of $300 million in investments over the period ending February 15, 1996. In the event this was not accomplished, Brascan committed itself to paying for the balance on March 31, 1998. Lane J. ’s reasons are dated October 27, 2000, over two and a half years after the passing of that deadline. In our view, having regard to the passage of time and the nature of the shares involved, it would not have been appropriate to invite Edper to further delay compliance with its contractual obligations by permitting it to elect to pay in shares. To do so would have required the court to rewrite the agreement for the parties. We do not agree that Lane J. should have attempted to do so. Even if we were of that view, it is now far too late, almost four years after the fact, for this court to attempt to do so.

[8] Lane J. declined to hear counsel for Mico and Epsim, upon the ground that no relief was sought as against either of them in the summary judgment proceedings. Although this court did hear from counsel for Mico and Epsim, we are not persuaded that Lane J. erred in this respect. In any event, with our disposition of Edper’s appeal, the position of Mico and Epsim is now moot.

[9] The appeals of Edper, Mico and Epsim are accordingly dismissed, all with costs. Those costs are fixed at $40,899 in the case of Edper and at $9,500 in the case of Mico and Epsim.

“Austin J.A.”

“M. J. Moldaver J.A.”

“J. C. MacPherson J.A.”