DATE: 20030220

DOCKET: C38371

COURT OF APPEAL FOR ONTARIO

RE: BURGOYNE HOLDINGS INC. (Plaintiff) – and – KPMG, KPMG PEAT MARWICK THORNE, PEAT MARWICK THORNE, THORNE ERNST & WHINNEY, THORNE RIDDELL and JOSCELYN, LAUGHLIN, HARPER, TORY & ASSOCIATES (Defendants/ Appellants) – and HENRY B. BURGOYNE, BOYD J. ARNOLD, CHARLES J. BURKE and LUCY MAGDA (Third Parties/Respondents)

BEFORE: MORDEN, CHARRON and GOUDGE JJ.A.

COUNSEL: Glenn A. Hainey and Debra Haak for the appellants Peter A. Mahoney for the respondents Henry B. Burgoyne and Charles J. Burke

HEARD: February 14, 2003

RELEASED ORALLY: February 14, 2003

On appeal from the judgment of Justice Gertrude F. Speigel of the Superior Court of Justice dated May 15, 2002.

E N D O R S E M E N T

[1] In our view, it is not plain and obvious that the defendants’ claim against Burgoyne and Burke in the third party proceeding cannot succeed. Accordingly, we think that the motions judge erred in dismissing this claim. Her reasons reflect two errors.

[1] First, she erred in holding that the claim was not maintainable because it was a claim for contribution and not damages. This, in itself, cannot be a proper basis for dismissing the claim. In most third party proceedings, the claim asserted is a claim for contribution. Furthermore, to the extent that this might have been relevant to the motions judge’s decision, we note that the legal basis of the claim pleaded against the third parties is not the same as the legal basis of the allegation of contributory negligence pleaded in the statement of defence against the plaintiff.

[2] Second, she erred in holding that the representations of the third parties had to be made “outside the scope of their office” for the claim against them to be valid. This is not a requirement of liability in a claim against an officer or director. What is required is that the alleged breach of duty be owed (in the context of this case) by the third parties to the defendants. Their conduct must be tortious in itself.

[3] The appeal is allowed, the order of Speigel J. is set aside and an order is made dismissing the motion of the third parties.

[Submissions made on costs.]

[4] The appellants are entitled to the costs of the motion fixed in the amount of $3,000 and to the costs of the appeal fixed in the amount of $5,000.

“J.W. Morden J.A.”

“Louise Charron J.A.”

“S.T. Goudge J.A.