Court File and Parties

CITATION: 1284342 Ontario Inc. v. KMTC-KEY Management Technology Corporation, 2007 ONCA 518

DATE: 20070706

DOCKET: C46103

COURT OF APPEAL FOR ONTARIO

O’CONNOR, MOLDAVER and ROULEAU JJ.A.

BETWEEN:

1284342 ONTARIO INC.

Plaintiff (Appellant)

And

KMTC-KEY MANAGEMENT TECHNOLOGY CORPORATION AND FAB-TELE COMMUNICATIONS LTD.

Defendants (Sivabatham Visvalingam/Respondent in the Appeal)

COUNSEL:

Marek Z Tufman for the appellant

Patrick Di Monte for Sivabatham Visvalingam/Respondent in the Appeal

Heard and endorsed: July 4, 2007

On appeal from the judgment of Justice Peter B. Hambly dated September 22, 2006.

APPEAL BOOK ENDORSEMENT

[1] The appellant did not submit to the motion judge that the respondent was not entitled to redeem the mortgage; rather the appellant took the position that the only issues to be resolved related to the amounts that were required to redeem the mortgage. In these circumstances, we are satisfied that it is not open to the appellant to raise this issue on appeal.

[2] The appellant raises two issues relating to the motion judge’s determination of the amounts necessary to redeem the mortgage. The first relates to legal costs.

[3] The motion judge found that the parties had agreed to settle the outstanding costs issues on the basis of payments to the appellant in the amount of $20,000. We are satisfied that this finding was open to the motion judge on the record before him, without directing a trial of an issue. The correspondence between counsel indicates that there was an agreement before the appellant attempted to withdraw it. Accordingly, we would not interfere with the motion judge’s disposition of the costs issue.

[4] The second issue relates to the management fees claimed by the appellant after taking possession of the property. The motion judge declined to allow these fees. We agree. The motion judge ordered all of the operating losses incurred by the appellant in operating the business to be paid into court by the respondent, subject to a reference. These included the payments made to employees or others in the operation of that business. The management fees in dispute relate solely to a claim by the appellant for time allegedly spent by its principal and his family members in relation to the property. The appellant did not pay any of the claimed fees to these individuals, nor did the appellant include them in the financial statements of the business introduced into evidence.

[5] Moreover, we do think that s. 8 of the Standard Charge terms provides that in these circumstances, the appellant is entitled to claim for unpaid management fees. That clause permits the appellant to recover “expenses which may be incurred” in taking, recovering and keeping possession.

[6] In the result, we see no basis to interfere with the motion judge’s conclusion that there was not “material before [him] to justify a management fee”.

[7] Accordingly, the appeal is dismissed. The motion judge had directed that the redemption take place within forty-five days. Because of the appeal, that redemption has not occurred. Accordingly, if the parties cannot agree, they shall return to the Superior Court of Justice within thirty days to seek directions.

[8] The appellant shall pay the respondent’s costs on a partial indemnity scale fixed in the amount of $7,000 inclusive of disbursements and G.S.T.