Court of Appeal for Ontario

Citation: 657722 Ontario Inc. v. Thompson, 2009 ONCA 128

Date: 20090210

Docket: C48906

Before: O’Connor A.C.J.O., Goudge and Epstein JJ.A.

Between:

657722 Ontario Inc., and Johnston Bros. (Bothwell) Limited

Applicants (Respondents in Appeal)

and

Donald William Thompson, Elizabeth Thompson and Thompson’s Orchards Ltd.

Respondents (Appellants)

Counsel:

Michel Castillo for the appellants

Raymond G. Colautti for the respondents

Heard and released orally: January 20, 2009

On appeal from the judgment of Justice John Desotti of the Superior Court of Justice dated May 14, 2008.

ENDORSEMENT

[1] In our view the appeal must be dismissed. We reach the same conclusion as the application judge. However we do so through a different legal route albeit one that was specifically pleaded.

[2] It is clear that Mr. Thompson covenanted not to object to an application on behalf of the respondent to extract aggregate from the subject property. The application judge found that Mr. Thompson used the vehicle of the appellant corporation to engage in just such an objection. He also found that Mr. Thompson’s mother and the corporation were fully aware of both his covenant and the objection. There were ample facts sufficiently uncontested not to require a trial to sustain these conclusions.

[3] These factual conclusions yield the legal conclusion that the appellant corporation served as Mr. Thompson’s agent to take action in breach of his personal covenant.

[4] The relief granted below restraining Mr. Thompson, his agent, (the appellant company), and his mother, is, in the circumstances, the appropriate response to this legal conclusion in order to prevent a breach of Mr. Thompson’s personal covenant.

[5] As to costs, leave to appeal is granted and the appeal allowed. This was, at its heart, simply a legal dispute. In making his costs order, the application judge appeared to rely largely on his view that the appellants’ case was very weak. We do not agree that in the circumstances here, the relative merits of the case justify an award on a substantial indemnity basis. The costs order below is set aside and an award on a partial indemnity basis in the amount of $16,956.32 is substituted.

[6] Costs to the respondent are fixed in the amount of $15,000.00 inclusive of G.S.T. and disbursements.