DATE: 20020405 DOCKET: C37266

COURT OF APPEAL FOR ONTARIO

RE:

AMHIL ENTERPRISES LTD. (Plaintiff (Respondent)) -and- SELECT, INC. (Defendant (Appellant))

BEFORE:

FELDMAN, MacPHERSON, SIMMONS JJ.A.

COUNSEL:

Paul D. Amey

For the appellant

Thomas N.T. Sutton and Mark Polley

For the respondent

HEARD:

April 4, 2002

RELEASED ORALLY:

April 4, 2002

On appeal from the order of Justice Arthur Gans made on November 9, 2001 at Toronto.

ENDORSEMENT

[1] In November, 2001, Gans J. granted summary judgment in favour of the respondent in the amount of $378,270.98, plus prejudgment interest and costs fixed at $5000. With respect to a stay of execution pending trial on the counterclaim, Gans J. ordered that the appellant pay the amount of the judgment into court by the end of the month, such amount to remain in court pending determination of the counterclaim; otherwise, there would be no stay of execution of the judgment on the claim.

[2] The appellant raises two grounds of appeal. The first is that Gans J. erred in failing to apply the doctrine of equitable set-off in respect of the issues raised in the counterclaim. The second is that he erred in failing to order an unconditional stay of execution pending the trial on the counterclaim.

(1) We find no error in Gans. J.’s conclusion that the doctrine of equitable set-off does not apply in this case. He was entitled to conclude that the issues raised in the counterclaim do not “go to the very root of the claim”, and are not “so clearly connected that it would be manifestly unjust to allow the plaintiff to enforce payment without taking the cross-claim into account.” See Holt v. Telford, 1987 18 (SCC), [1987] 2 S.C.R 193 at 212. In its factum, the appellant concedes that although the claims arise out of the same set of dealings, they are over different time-frames. Gans J. declined to order summary judgment on $50,000 of the total claim on the basis that that portion could be the subject of the equitable set-off defence, as it could amount to inflated prices charged within the relevant invoices.

(2) Gans J. exercised his discretion under Rule 20.05(3) of the Rules of Civil Procedure for the imposition of terms of proceeding with the counterclaim. We find no basis upon which to interfere with his order. The appellant had admitted that the invoiced amounts were due and owing. Although not prepared to find that the counterclaim was a sham, Gans J. was “somewhat skeptical” that it would succeed at trial. He also noted that the appellant did not appear to have assets in the jurisdiction. These grounds amply justified the order for payment into court. In any event, Gans J. did not make the payment a condition of proceeding, as he allowed the counterclaim to proceed in any event, but without any stay of execution, again a discretionary order for which there is no basis for this court to interfere.

[3] The appeal is therefore dismissed with costs fixed at $6,000 including G.S.T.

Signed: “K. Feldman J.A.”

“J.C. MacPherson J.A.”

“J. Simmons J.A.”