Propjet Management (Ontario) Inc. v. Pascan Aviation Inc., 2007 ONCA 855

CITATION: Propjet Management (Ontario) Inc. v. Pascan Aviation Inc., 2007 ONCA 855

DATE: 20071207

DOCKET: C47347

COURT OF APPEAL FOR ONTARIO

DOHERTY, MOLDAVER and GILLESE JJ.A.

BETWEEN:

PROPJET MANAGEMENT (ONTARIO) INC.

Plaintiff (Respondent)

and

PASCAN AVIATION INC.

Defendant (Appellant)

Counsel: Paul D’Angelo and Andre Ducasse for the appellant Robert Somerleigh for the respondent

Heard and orally released: December 3, 2007

On appeal from the order of Justice H.M. Pierce of the Superior Court of Justice dated June 1, 2007.

ENDORSEMENT

[1] On the basis of the record before Pierce J., we are satisfied that she properly allowed the motion for summary judgment.

[2] We are, however, satisfied that the new material tendered by the appellant on appeal would alter the result of the summary judgment motion. Based on that material, a motion judge could not grant summary judgment in favour of the respondent.

[3] The appellant, in its fresh evidence, has adequately explained the failure to adduce the material offered on appeal on the summary judgment motion. There was a serious breakdown in the communication between Ontario counsel for the appellant and the instructing solicitors in Quebec. That breakdown resulted in material that has now been produced before us not being produced on the motion for summary judgment. That material was clearly significant and potentially determinative of the outcome on the summary judgment motion. The appellant’s unchallenged explanation for the breakdown in communication provides an adequate justification for this court receiving the evidence on appeal. We make no finding as to the ultimate cause of the breakdown between counsel on the motion and the instructing solicitors in Quebec.

[4] We acknowledge that in most cases, a failure to adduce available material evidence on a summary judgment motion cannot be cured by offering that evidence on appeal. However, in exceptional circumstances, the court will receive as fresh evidence material that could have been available through the exercise of due diligence. We think there is an exceptional circumstance in this case.

[5] In her reasons granting summary judgment, the motion judge placed considerable reliance on an excerpt from a transcript of the cross-examination of the directing mind of the appellant in another, albeit related, proceeding in Quebec. In that excerpt, the witness acknowledged that the debt in issue in this proceeding was owed to the respondent. The motion judge relied on this admission in concluding that there was no genuine issue for trial.

[6] Unfortunately, the motion judge was not provided with later excerpts from the same cross-examination in which the witness significantly qualified that admission. In those later excerpts, the witness contended that the respondent had subsequently agreed to settle the claim for half of the amount owed. This contention is consistent with the position advanced by the appellant in this proceeding both in its statement of defence and on the summary judgment motion.

[7] We have been provided with the relevant additional extracts from the cross-examination. Our review of the entirety of the cross-examination satisfies us that it does not support the contention that the appellant admitted under oath that the full debt was owed to the respondent. Had the motion judge had the benefit of reading all of the relevant parts of the cross-examination, we are satisfied that she would not have relied on the alleged admission made in the extracts placed before her on the motion. The fact that a significant part of the material placed before the motion judge was misleading, although no doubt inadvertently so, is an important factor in our determination that the fresh evidence should be received on the appeal from the order made on that motion.

[8] We note that there has been no trial and no other proceedings in this matter other than the summary judgment motion. We are satisfied that the respondent can be fully compensated for costs thrown away on the summary judgment motion by way of the appropriate costs order. We see no other prejudice to the respondent should we allow the appeal and give the appellant a second opportunity to defend the case on the merits.

[9] In the result, the appeal will be allowed and the order of Pierce J. set aside. We are satisfied that the respondent should have its costs on the motion on a full indemnity basis. That amount, which hopefully counsel can agree on, should be paid out of the $17,000 presently held in court pursuant to the order of Cronk J.A.

[10] Although the appellant has been successful on both the motion to admit evidence and on the appeal itself, in the circumstances of this case, we think the respondent should still receive costs in respect of the appeal, although not its entire costs. We think justice is best served by an order of costs in favour of the respondent on the appeal in the amount of $5,000, inclusive of disbursements and GST. That amount is also payable out of the funds held in court.

“Doherty J.A.”

“M.J. Moldaver J.A.”

“E.E. Gillese J.A.”