CITATION: Joy Estate v. 1156653 Ontario Limited, 2008 ONCA 311
DATE: 20080425
DOCKET: M36075(C47387)
COURT OF APPEAL FOR ONTARIO
DOHERTY, ROSENBERG and BORINS JJ.A.
BETWEEN:
JOHN A. MILLSON, AIMEE JOY-DEARING and GEORGE WILSON as Executors of the Estate of Bruce Thomas Joy, and WINDSOR RACEWAY INC.
Plaintiffs/Defendants by Counterclaim (Appellants)
and
1156653 ONTARIO LIMITED, 308237 ONTARIO LIMITED, ALPHONSO FANELLI, ARTHUR BARAT and J. DOUGLAS LAWSON
Defendants/Plaintiffs by Counterclaim (Respondents)
and
AND BETWEEN:
JOHN A. MILLSON, AIMEE JOY-DEARING and GEORGE WILSON as Executors of the Estate of Bruce Thomas Joy, WINDSOR RACEWAY INC. and WINRAC DEVELOPMENT INC.
Plaintiffs (Appellants)
and
J. DOUGLAS LAWSON
Defendant (Respondent)
Allan Rock, Q.C. and David L. Robins for the appellants Windsor Raceway Inc.
Susan Chapman for the respondent J. Douglas Lawson
Avril A. Farlam for the respondents 1156653 Ontario Limited and 308237 Ontario Limited
Heard and released orally: April 15, 2008
On appeal from the judgment of Justice James C. MacPherson of the Court of Appeal for Ontario dated February 14, 2008.
ENDORSEMENT
[1] As Mr. Rock concedes, the appellants can only succeed on this appeal if they show that the motion judge not only misapprehended the evidence concerning the amount of indebtedness but the evidence as to the current value of the assets.
[2] We have not been persuaded that the motion judge misapprehended the evidence concerning WRI’s secured debt. He was bound to accept Mr. Kruba’s unconfirmed assertion that two of the charges secured the same debt. When asked for documentary evidence to confirm WRI’s assets and debts, the appellants took the position that the respondent should have regard to the public record. The public record consists of financial statements and the abstract of title. These documents show indebtedness exceeding the assets. There is no documentary evidence to confirm that the two registered charges secured the same debt.
[3] Mr. Rock fairly makes the point that in light of Mr. Kruba’s testimony, it would not be open to the Toldo family to require repayment of both amounts. However these are all related party transactions and the appellants have refused to disclose documents that would show the true state of affairs between the appellant companies and the Toldo companies.
[4] Given our conclusion on the indebtedness, it is not strictly necessary to deal with the appellant’s submission that the motion judge erred in relying on the book value of the assets and in particular the value of the land and the buildings as disclosed in the financial statement rather than as assessed in tax bill. However, we note that this tax bill was produced on the eve of the motion without any explanations as to how the market value is arrived at, what assumptions were made, and whether those assumptions were valid given the company’s dire financial position.
[5] There was also no expert evidence to confirm the position that it is appropriate to back out part of the financial statements (the value of the real property) without making adjustments to other parts of the statements. And there was no evidence to explain the impact on the market value of the fact that WRI’s continued existence depends upon the ongoing support of the secured debenture holder and the term loan owner.
[6] Accordingly the motion to review the order of MacPherson J.A. is dismissed. The appellants will have thirty days from today to post security for costs in accordance with the order of MacPherson J.A. Costs fixed at $10,000 inclusive of G.S.T. and disbursements to each respondent. The appellants have indicated that the costs of the motion and this appeal will be paid within thirty days.
Signed: “Doherty J.A.”
“M. Rosenberg J.A.”
“S. Borins J.A.”