DATE: 20030604
DOCKET: C39061
COURT OF APPEAL FOR ONTARIO
RE: STEVEN SCHERER (Plaintiff (Respondent)) – and – PETER D. GATES, 826534 ONTARIO LIMITED and RECREATIONAL ADVENTURES INC. (Defendants (Appellants))
BEFORE: MOLDAVER, GOUDGE and CRONK JJ.A.
COUNSEL: Daryl W. Schnurr for the appellants
Anthony T. Keller for the respondent
HEARD: May 22, 2003
On appeal from the order of Justice Peter B. Hambly of the Superior Court of Justice dated October 3, 2002
E N D O R S E M E N T
[1] The appellants appeal from the order of Hambly J. dismissing their motion and allowing the respondent’s cross-motion to the extent that it sought the dismissal of the appellants’ motion on the basis of the doctrine of res judicata. In their motion, brought in February 2002, the appellants sought various forms of relief including:
An order setting aside the order of Wallace J. dated July 24, 1998;
An order requiring the respondent to pay to the appellants the costs of a motion for an interim injunction granted by Salhany J. on June 24, 1998; and
An order requiring the respondent to pay damages sustained by the appellants as a result of the interim injunction imposed by Salhany J. and a reference to determine the amount of the damages.
[2] For reasons that follow, we would uphold the order of Hambly J. and dismiss the appeal.
[3] In our view, Hambly J. was entitled to rely upon the doctrine of res judicata as a basis for refusing the appellants’ request to set aside Wallace J.’s order of July 24, 1998. In this regard, we agree with Hambly J. that the setting aside of Wallace J.’s order was central to an earlier motion heard by him in June 2000 in which the appellants sought summary judgment on the action and costs (and/or damages under rule 40.03) arising from the interim injunction granted by Salhany J. on June 24, 1998. While the costs component of the motion required the appellants to negate the order of Wallace J., they did not move at that time to set it aside. In view of that, Hambly J. was correct in holding that the setting aside of Wallace J.’s order was relief the appellants could and should have sought, if at all, in their June 2000 motion before him.
[4] To the extent that Hambly J. had a discretion whether to apply the doctrine of res judicata to bar the relief sought by the appellants in their February 2002 motion, which forms the subject matter of this appeal, we believe for several reasons that he did not err in exercising his discretion as he did.
[5] First, in the aftermath of Wallace J.’s order, the parties conducted themselves as if the interim injunction issued by Salhany J. had been dissolved. The appellants were thus able to continue their work on the golf course within 200 feet of the respondent’s lot, something that they could not have done had Salhany J.’s interim injunction remained in force. On that basis alone, there is a strong argument that the appellants should be estopped by their conduct from seeking damages that may have been occasioned by the interim injunction. The appellants had the benefit of the order of Wallace J., which they now seek to set aside.
[6] Second, as the respondent correctly points out, the appellants have not particularized or quantified the damages (apart from legal costs) that they allegedly suffered as a result of the interim injunction. In this respect, we find the following aspect of Hambly J.’s reasons compelling:
The defendants [appellants] claimed damages which they allege that they suffered from the granting of the injunction. Apart from the legal costs in defending the motion, they do not specify what these damages are, although they seek a reference to determine the quantum. It is difficult to understand what damages the defendants could have suffered in the space of 30 days by being prevented from working within 200 feet of the plaintiff’s [respondent’s] lot. I agree with Mr. Keller that the substance of the defendants’ claim would appear to be for the costs of the proceeding before Justice Salhany.
In other words, although clothed differently, it appeared to Hambly J., as it does to us, that the appellants’ February 2002 motion was essentially an attempt to circumvent their earlier failure to obtain their costs of the injunction proceedings. In June 2000, Hambly J. ordered, among other things, that the appellants be paid their costs of the proceedings before Salhany J. on a solicitor and client basis. That aspect of his order was subsequently set aside by this court on February 13, 2001 because of the appellants’ failure to have Wallace J.’s order of July 24, 1998 set aside. In the result, therefore, the appellants’ efforts to recover the costs of the injunction proceedings were unsuccessful because they failed to initiate the proper procedural step.
[7] Third, much time has passed since the orders of Salhany J. and Wallace J. Although the appellants cannot be held accountable for all of the delay, we fail to see how the interests of justice would be advanced by permitting them to proceed, some five years later, with a damages claim that to this day remains unspecified and unquantified.
[8] For these reasons, we are not persuaded that Hambly J. erred in relying upon the doctrine of res judicata as a basis for rejecting the appellants’ request to set aside Wallace J.’s order.
[9] The remaining question is whether Wallace J.’s order constitutes a bar to the appellants’ attempt to now seek damages arising from Salhany J.’s interim injunction. Hambly J. addressed that issue, at least indirectly, in his reasons as follows:
In my view, Justice Wallace’s order is not only a bar to the defendants obtaining costs of the motion resulting in the interim injunction ordered by Justice Salhany, it is also a bar to the defendants obtaining an order that the plaintiff pay damages pursuant to its undertaking to pay damages in the event that it was found that the interim injunction ought not to have been issued. The defendants consented to the interim injunction being dissolved. The defendants imposed no conditions on the injunction being dissolved. The defendants now ask for damages resulting from the granting of the injunction. It is barred from doing so by Justice Wallace’s order [emphasis added].
[10] As Hambly J. points out in this passage, the appellants sought no conditions on the injunction being dissolved. Accordingly, as one would expect, Wallace J.’s order is silent on the matter of damages, just as it is silent on the matter of costs. In the circumstances, we do not accept the appellants’ contention that the issue of damages was left open following Wallace J.’s order, which was obtained on consent of the parties. On the contrary, we are satisfied that it was the clear intention of the parties that Wallace J.’s order act as a bar to any claim that the appellants might have for damages arising out of the interim injunction. Otherwise, the respondent surely would not have consented to the order.
[11] Accordingly, we agree with Hambly J. that Wallace J.’s order bars the appellants from obtaining damages (if any) occasioned by the interim injunction.
[12] For these reasons, we would dismiss the appeal with costs of the appeal awarded to the respondent on a partial indemnity scale, fixed at $10,000 inclusive of GST and disbursements.
Signed:“M.J. Moldaver J.A.”
“ S. T. Goudge J.A.”
“E.A. Cronk J.A.”