DATE: 20050120

DOCKET: C41675

COURT OF APPEAL FOR ONTARIO

RE:

NORTHWOOD MORTGAGE LTD. (Plaintiff/Appellant) – and – GENSOL SOLUTIONS INC., 1424221 ONTARIO INC., GEORGE REX BAILEY, GEORGE LONGO, GEORGE P. LONGO JR., OREST LOZYNSKY and J.P. JACOB also known as SUNNY JACOB (Defendants/Respondents)

BEFORE:

DOHERTY, BORINS and SHARPE JJ.A.

COUNSEL:

David Brooker for the plaintiff/appellant

M.L. Biggar for Orest Lozynsky

Rosemary Fisher for 1424221 Ontario Inc. and George R. Bailey

J.W. Tighe for George Longo, George P. Longo Jr. and J.P. Jacob also known as Sunny Jacob

HEARD:

January 18, 2005

On appeal from the decision of Justice Romain W.M. Pitt of the Superior Court of Justice dated March 19, 2004.

E N D O R S E M E N T

[1] At the oral hearing of this appeal, we did not find it necessary to call on counsel to respond to either the appeal or the cross-appeal and indicated that both the appeal and cross-appeal were dismissed for reasons to follow.

[2] The record on appeal was essentially restricted to the trial judge’s reasons for judgment. We are not persuaded that on the facts found by the trial judge, he erred in refusing to hold 1424221 Ontario Inc. and the individuals named as defendants (“the respondents”) liable on any of the theories advanced by the appellant.

[3] Gensol Solutions Inc. was clearly in breach of its commitment to pay the appellant mortgage broker’s commission. However, on the record before us, the only available explanation for Gensol’s default appears to be that more favourable terms were available elsewhere. Gensol defaulted on its commitment to the appellant to take advantage of a better opportunity. We see no factual findings by the trial judge that could convert what appears to have been an ordinary breach of contract by a corporation to an ordinary creditor to conduct capable of attracting the oppression remedy.

[4] Nor do we accept the submission that the trial judge found facts capable of supporting the conclusion that the respondents were liable as principals. The written agreement was clearly with Gensol and, as found by the trial judge, the respondents could only be found liable if the corporate veil is pierced. The trial judge explicitly refused to make findings capable of supporting that theory of liability.

[5] Finally, even assuming that the causes of action were adequately pleaded, we do not accept the submission that we should take the trial judge’s observation that the appellant “likely” could have proved Longo Sr. liable for misrepresentation and that “it might have been possible to find that the other personal defendants had given Longo Sr. the ostensible authority to bind them” as amounting to findings of those facts. The trial judge did not go so far as to make those findings and, as the appeal was presented on the basis of his reasons and his reasons alone, we are left without a sufficient factual basis to impose liability.

[6] We would not interfere with the trial judge’s order refusing to award the respondents their costs of the trial. While an order depriving a successful party of costs is exceptional, the trial judge found that during the trial the respondents “constantly hovered on the borderline of dishonesty” and that their conduct warranted a costs sanction. We see no reason to interfere with that order.

[7] Given the divided success before this court, both the appeal and the cross-appeal are dismissed without costs.

“D.H. Doherty J.A.”

“S. Borins J.A.”

“Robert J. Sharpe J.A.”