COURT OF APPEAL FOR ONTARIO

DATE: 2002-03-11 DOCKET: C36162

RE: Blake Clemes (Applicant/Respondent) v. Ian John Bourke and Mark Lansdell (Respondents/Appellants)

BEFORE: Catzman, Cronk and Gillese JJ.A.

COUNSEL: J. Douglas Skinner for the appellants Steven W. Pettipiere for the respondent

HEARD: March 7, 2002

On appeal from the judgment of Justice Bonnie J. Wein dated March 8, 2001

ENDORSEMENT

Released Orally: March 7, 2002

[1] The appellants assert that the motions judge erred in finding that the respondent was forced to withdraw from his partnership with the appellants and that a de facto expulsion of him from the partnership had occurred.

[2] In the fall of 1999, the appellants expressed their preference that the respondent leave the partnership. Thereafter, the parties entered into a series of negotiations to resolve their differences, which ultimately proved to be unsuccessful. There is no evidence that these negotiations included the possibility that the respondent would remain as a partner of the firm on some altered basis.

[3] The partnership agreement is not a model of clarity. Nonetheless, on a plain reading of Article 3.5 of the agreement, it is evident that that article applies to involuntary withdrawals or expulsions from the partnership. The appellants argue that Article 8.1, which was relied upon by the respondent in his application, applies only to voluntary withdrawals or expulsions. We are agreed that Article 8.1, by its language, is not so restricted. It refers, and specifically incorporates, the provisions of Article 3.5. It contains no language of qualification regarding the type of withdrawal or expulsion contemplated under Article 8.1(b). If it was the intention of the parties to so restrict Article 8.1, this intention was not realized by the language of Article 8.1.

[4] There was evidence to support the factual findings of the motions judge that the respondent was forced to withdraw from the partnership and we see no basis to interfere with her findings in that regard.

[5] On a combined reading of Articles 3.5 and 8.1 of the partnership agreement, it was open to the motions judge to conclude that the agreement reflects an intention of the parties that on involuntary withdrawal or expulsion – or, in the circumstances of a voluntary withdrawal, at the option of the remaining partners – the Schedule “A” price was to be paid to the departing partner.

[6] A real issue between the parties at the hearing before the motions judge was the determination and valuation of the respondent’s partnership interest. At the hearing before the motions judge this was made clear. No evidence of prejudice to the appellants appears on the record before this court. If such prejudice was alleged to exist at the time of the hearing before the motions judge, the appropriate remedy was to then seek an adjournment for the purpose of adducing further or other evidence. This did not occur.

[7] Accordingly, we would dismiss the appeal. The respondent is entitled to his costs of the appeal on a partial indemnity basis fixed, on consent, in the sum of $3,500 plus applicable goods and services tax.

“Catzman J.A.”

“E. Cronk J.A.”

“E. Gillese J.A.”