Conseil Scolaire de District du Nord-Est de L'Ontario v. Near North District School Board
96 O.R. (3d) 641
Court of Appeal for Ontario,
Weiler, Sharpe JJ.A. and Thorburn J. (ad hoc)
August 6, 2009
- Vous trouverez la version française à la p. 654, post.
Schools -- School boards -- Two school boards entering into agreement as to how to split assets and liabilities after Ontario school boards were reorganized into new district boards -- Parties agreeing to bear their proportionate share of cost of teachers' retirement gratuities -- Agreement not constituting agreement pursuant to s. 135(26.1) of Education Act as reference to "boards concerned" in that subsection referring to "sending" public school board and "receiving" public school board and not to two public school boards such as parties -- Education Act not precluding agreements other than those contemplated by Act -- Agreement in question being valid and enforceable -- Agreement not vitiated by mutual mistake despite fact that parties intended to enter into agreement pursuant to s. 135 of Act -- Education Act, R.S.O. 1990, c. E.2, s. 135(26.1).
In the course of a reorganization of Ontario school boards into new district boards, Nord-Est, a French-language public school board, replaced the French-language section of the Nipissing Board of Education; Near North, an English-language public school board, replaced the English-language Nipissing Board of Education; and Franco-Nord, a French-language separate school board, replaced the French-language section of the Nipissing District Roman Catholic Separate School Board. As the former Nipissing Board of Education and its French-language section would belong to different school boards, the transfer of the Nipissing Board of Education's assets and liabilities required agreements between Near North and Nord-Est as to how to split the assets and liabilities. Among the liabilities were retirement gratuities for teachers who had been transferred to the Nipissing District Roman Catholic School Board and who had not yet retired. Near North and Nord-Est each agreed to bear their proportionate share of the cost of retirement gratuities. A dispute arose between Near North and Nord-Est. They asked the trial judge to determine two questions: whether they had concluded a valid and enforceable agreement within the meaning of s. 135(26.1) of the Education Act to share the liability for the retirement gratuities; and, if so, what were the proportionate shares provided for in that agreement. The trial judge found that the agreement was not an agreement pursuant to s. 135(26.1) of the Act, since the reference to "boards concerned" in that subsection was intended to refer to a "sending" public school board (such as Nord-Est) and a "receiving" separate school board (such as Franco-Nord), not two public school boards such as Nord-Est and Near North. However, she found that there was nevertheless a valid and enforceable agreement to share liability for the public portion of retirement gratuities for teachers now working with Franco- Nord and that, in accordance with the terms of that agreement, Near North was liable in the amount of 94.23 per cent and Nord-Est was liable in the amount of 5.77 per cent. Near North appealed.
Held, the appeal should be dismissed. [page642]
The trial judge erred by deciding the dispute on the basis of a new issue not raised by the order directing the trial of an issue, i.e., the issue of whether an agreement that does not fall within s. 135(26.1) of the Act is legally enforceable. However, Near North would suffer no prejudice if the Court of Appeal were to decide that issue on the basis of the record before the court. There can be a binding agreement between school boards allocating liability for retirement gratuities other than an agreement specified in s. 135(26.1). There is nothing in the Act that expressly precludes agreements other than those specifically contemplated by the Act from being made, and to imply such a restriction would introduce an unwarranted and undesirable degree of rigidity into a complex area of school administration that would impede the accommodation of varying local circumstances. The trial judge did not err in finding that there was consensus ad idem between the parties and in refusing to find that the agreement was vitiated by mutual mistake. In arriving at a consensus regarding the transfer of liability for the retirement gratuities, both parties believed that they were doing so pursuant to s. 135 of the Act. However, in such cases, restitution will only be granted where the claimant can establish that the other party was unjustly enriched at the claimant's expense. That was not the case here. Moreover, the parties' mistake as to responsibility for the payment of retirement gratuities was not so fundamental as to render the entire agreement for the transfer of assets and liabilities void.
APPEAL by the plaintiff from the judgment of Gauthier J., [2007] O.J. No. 3089, 165 A.C.W.S. (3d) 1045 (S.C.J.) finding that the parties had entered into a valid and enforceable agreement.
Cases referred to Air Canada v. British Columbia, 1989 CanLII 95 (SCC), [1989] 1 S.C.R. 1161, [1989] S.C.J. No. 44, 59 D.L.R. (4th) 161, 95 N.R. 1, [1989] 4 W.W.R. 97, J.E. 89-785, 36 B.C.L.R. (2d) 145, 41 C.R.R. 308p, 2 T.C.T. 4178 Statutes referred to An Act to Amend the Education Act, S.O. 1986, c. 21 Education Act, R.S.O. 1990, c. E.2, ss. 135 [as am.], (1) [as am.], (24) [as am.], (25), (26), (26.1), (31) [as am.], 346 Fewer School Boards Act, 1997, S.O. 1997, c. 3 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 38.10(3)
George G. Vuicic, for defendant (appellant). S. Margot Blight, for plaintiff (respondent).
The judgment of the court was delivered by
SHARPE J.A. and THORBURN J. (ad hoc): -- Introduction
[1] "Retirement gratuities" are owed to some teachers who were transferred first from a public school board to a separate school board in 1986, and then from a French-language section [page643] of a separate school board to a French-language separate school board in 1997. A retirement gratuity represents the amount of unused leave that a teacher has accumulated during his or her career, and thus is eligible to be paid for.
[2] The appellant, Near North District School Board ("Near North"), and the respondent, Conseil Scolaire de district du Nord-Est ("Nord-Est"), agree that moneys are owed to Conseil Scolaire de district Catholique Franco-Nord ("Franco-Nord"). These moneys are required by Franco-Nord to pay the public school portion of retirement gratuities for employees who transferred from the public school system and are now working for Franco-Nord.
[3] The issue to be determined is whether Near North is responsible to reimburse Franco-Nord for the payment of 94.23 per cent of those gratuities.
[4] The trial judge was asked to decide two questions provided by the parties and incorporated into the consent order of Justice Hoy. Those two questions are: (a) In 1998, during the distribution of assets and liabilities required under the Education Act, R.S.O. 1990, c. E.2, did the respondents (Nord-Est and Near North) conclude a valid and enforceable agreement within the meaning of s. 135(26.1) of the Education Act, to share the liability for paying to the applicant (Franco-Nord) the retirement gratuities of the applicant's [Franco-Nord's] teaching staff in relation to the period prior to 1986? (b) If so, what were the proportionate shares provided for in that agreement?
[5] The trial judge determined that there was no agreement between the parties within the meaning of s. 135(26.1) of the Education Act, and therefore the answer to the first question was "no". However, she held that there was an agreement outside the scope of s. 135, and therefore moneys were payable by Near North to Franco-Nord. Facts
[6] In Ontario, prior to 1986, public school boards received full public funding through the end of high school. Separate school boards received public funding only until the end of Grade 10. Each of the public and separate school boards had French-language sections that were part of those boards.
[7] Separate school boards became eligible to receive full funding through the end of high school in 1986, with the passing of [page644] An Act to Amend the Education Act, S.O. 1986, c. 21. This Act allowed separate school boards to elect to perform the duties of a public school board, and thus be eligible to receive full funding. Teachers who would, as a result, no longer be required in the public system would be transferred to fill the new positions available in those separate school boards that decided to expand their functions. The Nipissing District Roman Catholic Separate School Board elected to exercise the functions of a public school board in 1986. As a result, it began to employ several francophone teachers who had been employed by the Nipissing Board of Education, a public school board.
[8] Public school boards that transferred teachers to newly expanded separate schools were statutorily obligated to retain responsibility for a portion of the retirement gratuities payable to the transferred teachers. As teachers are able to carry over their leave entitlements from one year to the next, the retirement gratuity can only be calculated at the end of a teacher's career, rather than at the end of each school year. When the teachers were transferred from the Nippissing Board of Education to the Nipissing District Roman Catholic Separate Board, the "sending" public school board was required to reimburse the "receiving" separate school board for any retirement gratuities to be paid to the transferred teachers in proportion to the length of time they were at the public board. The Nipissing Board of Education elected to pay this amount upon the retirement of each of the transferred teachers, rather than make an estimated lump-sum payment at the time of the transfer.
[9] This arrangement remained in place until the Education Act was substantially amended in 1997 by the Fewer School Boards Act, 1997, S.O. 1997, c. 3. This Act, which took effect on January 1, 1998, amalgamated several school boards to create "district" school boards. It also created, for the first time, a number of French-language school boards, both public and separate. As a result of these changes: (1) Nord-Est, a French-language public school board, replaced the French-language section of the Nipissing Board of Education (as well as a number of other French-language sections of public school boards); (2) Near North, an English-language public school board, replaced the English-language Nipissing Board of Education (as well as two other public school boards); and (3) Franco-Nord, a French language separate school board, replaced the French-language section of the Nipissing District Roman [page645] Catholic Separate School Board, to which the affected teachers had been transferred in 1986.
[10] The process of reorganizing the existing school boards into new district boards was overseen by the Education Improvement Commission ("EIC"). This process involved the transfer of assets and liabilities from former school boards to the new district school boards, including the newly created French-language public and separate district school boards. Among the liabilities held by the Nipissing Board of Education were the remaining retirement gratuities for teachers who had been transferred to the Nipissing District Roman Catholic Separate School Board and who had not yet retired.
[11] As of 1998, the inventory prepared by one of Near North's predecessor boards estimated the amount of $252,231 as the liability accrued by the former Nipissing Board of Education for the unfunded retirement gratuities. Neither Near North nor Nord-Est made any inquiries concerning the accuracy of this figure. It was clear, however, that this sum was merely an estimate, as the actual figure depends on a number of factors unknown until an employee retires.
[12] As the former Nipissing Board of Education and its French-language section would now belong to different school boards, the transfer of the Nipissing Board of Education's assets and liabilities required agreements between Near North and Nord-Est as to how to split the assets and liabilities. A joint request was submitted to the EIC by Near North, and approved by Nord-Est, for the transfer of all assets and liabilities of the school boards that they were replacing. With respect to the retirement gratuities, Near North and Nord-Est each agreed to bear their proportionate share of the cost of any retirement gratuities assumed by the former Nipissing Board of Education. On August 31, 1998, the EIC issued an order giving effect to the joint request between Nord-Est and Near North. Legislation
[13] Section 135 of the Education Act was amended on January 1, 1998. The relevant portions of that section provide as follows:
135(1) In this section,
"designated person" means a person designated or deemed to be designated under section 135 of this Act, as it read immediately before the Education Quality Improvement Act, 1997 received Royal Assent; ("personne désignée")
"transferred" means transferred under section 135 of this Act, as it read immediately before the Education Quality Improvement Act, 1997 received Royal Assent. ("muté"). [page646] . . . . .
(24) On termination of employment with the board to which a designated person's teaching contract, employment contract or employment relationship is transferred, the person is entitled to payment of an amount calculated in accordance with, (a) the collective agreement that applied on the last date the person was employed by the public board that designated the person, as though the person had been in the continuous employ of the public board, if a collective agreement applied in respect of the person on that date; or (b) the policy of the public board that designated the person as of the last date he or she was employed by the public board, as though the person had been in the continuous employ of the public board, if no collective agreement applied in respect of the person on that date.
(25) In lieu of the payment under subsection (24), the designated person is entitled to require payment of an amount calculated in accordance with, (a) the collective agreement that applies in respect of the person on the last date the person is employed before the termination of employment, if a collective agreement applies in respect of the person on that date; or (b) the policy of the board with which the person is employed as of the last date he or she is employed by that board, if no collective agreement applies in respect of the person on that date.
(26) The amount of the payment under subsection (24) or (25) shall be shared by the public board that designated the person and the board or boards to which the person's employment was transferred under this section in the ratio that the number of years of service of the person with each board bears to the total number of years of service of the person with such boards.
(26.1) Despite subsection (26), the boards concerned may agree to share the amount of the payment under subsection (24) or (25) in any manner, including the payment of the entire amount by one of the boards. . . . . .
(31) For the purposes of this section, the following rules apply: 1. "Public board" in subsections (24) and (30) has the same meaning as it did immediately before the Education Quality Improvement Act, 1997 received Royal Assent. 2. A reference in subsection (26) to the public board that designated a person shall be deemed to be a reference to the successor to the old board that designated the person. 3. A reference to the board or boards to which a person's employment is transferred shall be deemed to be a reference to the successor or successors to the old board or old boards to which the person's employment was transferred. 4. Except as otherwise provided by regulation, for the purposes of paragraph 2, the successor to an old board that designated a person, [page647] i. in the case of a person designated in relation to schools and classes operated under Part XII of this Act, as it read on December 31, 1997, is the French-language public district school board the area of jurisdiction of which includes all or the major part of the area of jurisdiction of the old board that designated the person, and ii. in the case of a designated person other than one described in subparagraph i, is the English-language public district school board the area of jurisdiction of which includes all or the major part of the area of jurisdiction of the old board that designated the person. 5. Except as otherwise provided by regulation, for the purposes of paragraph 3, the successor to an old board to which a person's employment was transferred is, i. in the case of a person designated in relation to schools and classes operated under Part XII of this Act, as it read on December 31, 1997, is the French-language separate district school board the area of jurisdiction of which includes all or the major part of the area of jurisdiction of the old board to which the person's employment was transferred, and ii. in the case of a designated person other than one described in subparagraph i, is the English-language separate district school board the area of jurisdiction of which includes all or the major part of the area of jurisdiction of the old board to which the person's employment was transferred.
[14] The parties agree that the effect of s. 135, as amended, is to provide that liability for the public portion of the retirement gratuities lies exclusively with Nord-Est, absent an agreement within the meaning of s. 135(26.1). Section 135(26.1) provides that the boards contemplated in s. 135(26), here Nord- Est and Franco-Nord, can share liability for retirement gratuities in a manner other than as contemplated in s. 135(26). No other type of agreement in relation to retirement gratuities is referred to in s. 135, or elsewhere in the Education Act. The Claim
[15] In 1998 and 1999, Franco-Nord paid out retirement gratuities to several transferred teachers and sought and obtained reimbursement from Near North for over $300,000. In 2000 and 2001, Franco-Nord submitted five additional invoices, totalling over $220,000, which Near North refused to pay on the basis that it was not liable pursuant to s. 135(26). Franco- Nord then sought payment from Nord-Est, which also refused to pay on the basis that Near North had agreed to assume primary responsibility for the payment of retirement gratuities in their agreement made under s. 135(26.1).
[16] On August 21, 2003, Franco-Nord issued a Notice of Application against Nord-Est. The estimate as of May 28, 2007 [page648] for the public portion of the retirement gratuities payable to the employees of Franco-Nord who had already retired was $759,068.84. Franco-Nord estimated that the public portion of retirement gratuities for 12 employees of Franco-Nord who had not yet retired would be approximately $66,692.09.
[17] An order was made on October 7, 2003, on consent, adding Near North as a defendant to the action and adjourning the matter for a trial of an issue pursuant to rule 38.10(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. As noted above, at para. 4, the issues to be determined at trial were whether Near North and Nord-Est had concluded a valid agreement pursuant to s. 135(26.1) of the Education Act so as to require Near North to shoulder a portion of the retirement gratuities owing to Franco-Nord, and if so, what proportion of those gratuities were Near North and Nord-Est each responsible for. Decision on the Trial of the Issue
[18] At the trial, Near North argued that it was not liable to pay any portion of the retirement gratuities owing to Franco-Nord. It claimed that the agreement it had concluded with Nord-Est, in which the two boards each agreed to bear their proportionate share of the retirement gratuities owing to Franco-Nord, was not an agreement pursuant to s. 135(26.1) of the Education Act, and thus did not serve to relieve Nord-Est of its statutory obligation to pay for the public portion of the retirement gratuities.
[19] After a three-day hearing, the trial judge made the following determinations: (a) The agreement between Nord-Est and Near North was not an agreement pursuant to s. 135(26.1) since the reference to "boards concerned" in that subsection was intended to refer to a "sending" public school board (such as Nord-Est) and a "receiving" separate school board (such as Franco- Nord), not two public school boards such as Nord-Est and Near North. (b) Nevertheless, there was a valid and enforceable agreement between Nord-Est and Near North to share liability for the public portion of retirement gratuities for employees now working with Franco-Nord. (c) Therefore, in accordance with the terms of their agreement, Near North is liable for the retirement gratuities of the transferred teachers in the amount of 94.23 per cent, and Nord-Est is liable in the amount of 5.77 per cent. Near North's contractual obligation to pay 94.23 per cent of the retirement gratuities extends to all future gratuities, i.e., until the last teacher [page649] who transferred in 1986 has retired, and is not limited to the gratuities owing when the agreement was made. Issues
[20] This appeal raises the following issues: (1) Did the trial judge err by deciding the dispute on the basis of a new issue not raised by the order directing the trial of an issue? (2) Did the trial judge err in finding that there could be a legally binding agreement for the payment of retirement gratuities that does not fall within s. 135(26.1) of the Education Act? (3) Did the trial judge err by finding that there was consensus ad idem between the parties and in refusing to find the agreement was vitiated by mutual mistake? (4) Did the trial judge err by refusing to limit Near North's liability for future liability for retirement annuities to $252,231, the figure estimated at the time the agreement was made?
[21] For the reasons set out below, we conclude that the trial judge erred by deciding an issue that was not raised by the order directing the trial of an issue. However, as all of the necessary evidence to determine whether there was such an agreement was before the trial judge, and as all the relevant legal arguments have now been made before us, it is appropriate for this court to decide whether there was legally binding agreement between the parties that would require Near North to reimburse Nord-Est for any amount owing to Franco-Nord on account of the retirement gratuities. Analysis
Issue 1: Did the trial judge err by deciding the dispute on the basis of a new issue not raised by the order directing the trial of an issue?
[22] The trial judge decided that the answer to the first question was that the parties had not entered into an agreement within the meaning of s. 135(26.1) of the Education Act. No appeal is taken from that finding. However, without giving the parties any notice or opportunity to make submissions on the point, she proceeded on her own initiative to decide that there was an agreement between Near North and Nord-Est, albeit not an agreement within the meaning of s. 135(26.1), and granted [page650] the declaration of liability against Near North on the basis of the terms of that agreement.
[23] Nord-Est submits that the judge simply reformulated the first question in two parts (was there an agreement and did that agreement fall within the reach of s. 135(26.1)) and answered each part of the question separately. Nord-Est submits that all of the evidence as to the negotiation and terms of the agreement was before the trial judge and that no additional evidence was required for her to make her determination.
[24] We agree that the question posed by the order directing the trial of an issue logically divides into these two parts and that all the evidence required to answer that two-part question was before the trial judge. However, a third issue is also raised, namely, the legal issue of whether an agreement that does not fall within s. 135(26.1) is legally enforceable. That issue was not addressed by the parties in argument before the trial judge or by the trial judge in her reasons. By proceeding as she did, the trial judge effectively expanded the scope of the question that had been put to her and gave an answer that did not take into account Near North's legal position, since advanced before us, that only agreements contemplated by s. 135(26.1) are legally binding. By deciding that Near North was bound by an agreement that did not fall within s. 135(26.1), the trial judge went beyond the issue that had been presented to her by the order directing the trial of an issue and thereby erred.
[25] The more difficult question is what impact that error should have now that the order has been appealed and all issues arising between the parties have been fully argued before this court.
[26] In our view, Near North would suffer no prejudice if we were to decide all issues on the basis of the record now before this court. In argument before us, Near North failed to identify any additional evidence that it would lead to supplement the existing record. Near North submitted that had it known that it could be held liable on an agreement outside the contemplation of s. 135(26.1), it would have cross-claimed against the EIC and its members. However, that strategy is precluded by s. 346 of the Education Act, which clothes the EIC and its members with immunity from liability.
[27] The only issue not addressed before the trial judge is the legal issue of whether in law there can be a binding agreement allocating liability for retirement gratuities other than an agreement specified in s. 135(26.1). Near North concedes that it has now had full opportunity to argue that issue on this appeal. In these circumstances, it is in the interests of justice for this court to deal with all issues raised on this appeal rather than remit [page651] the matter to the Superior Court and put the parties and the administration of justice to the expense of further litigation.
Issue 2: Did the trial judge err in finding that there could be a legally binding agreement for the payment of retirement gratuities that does not fall within s. 135(26.1) of the Education Act?
[28] Near North submits that in the light of the detailed provisions in the Education Act relating to the allocation of assets and liabilities arising from the changed school board structure in 1998, any agreement falling outside s. 135(26.1) is precluded and unenforceable.
[29] We do not accept that submission. We are not persuaded that such a preclusion can or should be implied from the language of s. 135 or any of its subsections. Section 135(26.1) appears to be intended to introduce an element of flexibility into the allocation of assets and liabilities, not rigidity. It allows the school boards that are affected by the specific allocation of responsibility contained in s. 135(26) to "contract out" and make other suitable arrangements. We see no reason to read a provision intended to introduce a measure of flexibility as between the boards that actually are directly affected by s. 135(26) (Nord-Est and Franco-Nord) as impliedly introducing an element of rigidity with respect to a board that is not directly affected by that provision (Near North).
[30] Certainly, there is nothing in the Education Act that expressly precludes agreements other than those specifically contemplated by the Act to be made between the changing array of school boards that have existed from 1986 to the present. In our view, to imply such a restriction would introduce an unwarranted and undesirable degree of rigidity into a complex area of school administration that would impede the accommodation of varying local circumstances.
[31] We conclude, accordingly, that the agreement whereby Near North undertook to bear its proportionate share of the cost of any retirement gratuity obligation assumed by the former Nipissing Board of Education is not precluded by the provisions of the Education Act.
Issue 3: Did the trial judge err by finding that there was consensus ad idem between the parties and in refusing to find the agreement was vitiated by mutual mistake?
[32] Near North submits that the evidence shows that prior to entering their agreement, the parties failed to contemplate or [page652] take into account the impact of s. 135 upon their respective positions. Near North asserts that it operated under the belief that it was legally required to assume part of the liability for retirement gratuities payable to Franco-Nord and that, but for this mistake, Near North would never have entered into the agreement. Accordingly, Near North submits that the agreement should be set aside on the basis either that there was no consensus ad idem or that the agreement was vitiated by mutual mistake.
[33] The trial judge considered this issue and rejected Near North's submission. We see no reason to interfere with her conclusion.
[34] In arriving at a consensus regarding the transfer of liability for the retirement gratuities, both parties believed that they were doing so pursuant to s. 135 of the Education Act. However, in such cases, restitution will only be granted where the claimant can establish that the other party was unjustly enriched at the claimant's expense: see Air Canada v. British Columbia, 1989 CanLII 95 (SCC), [1989] 1 S.C.R. 1161, [1989] S.C.J. No. 44, at paras. 64-66.
[35] The trial judge carefully reviewed the course of the negotiations, the context in which they took place and the agreement that ensued. There was no evidence of abuse of authority or oppression. She concluded that any misunderstanding or misapprehension as to the effect of s. 135 on liability did not undermine or vitiate the agreement.
[36] The former Nipissing Board of Education had no reserve funds, and Near North and Nord-Est had to reach an agreement on a reasonable division of all assets and liabilities. The trial judge aptly described the context of these negotiations at para. 85 of her reasons:
The representatives who entered into the negotiation for the transfer of assets and liabilities on behalf of the new boards, Near North and Nord-Est, were educated, experienced administrators. Although laypersons and not lawyers, it is nonetheless evident that the parties to these negotiations had a sophisticated understanding of the functioning of school boards, and their legislative underpinnings. Moreover, all parties were aware that the negotiations were taking place in the context of significant change to the Education Act, the statute that governs the functioning of school boards and their employees. In this context, I would expect all parties to know the law and govern themselves accordingly.
[37] As the trial judge observed, retirement gratuities were only one of many items included in the transfer of assets and liabilities, some of which had higher values. As she put it, at para. 84, "[t]he fact that one of the parties now takes the position that it should not have entered into such agreement, in light of subsection 135(26), does not lead to the conclusion [page653] that the parties were not ad idem at the time the agreement was reached".
[38] Moreover, the trial judge also found, at para. 95, that even if the parties were ignorant of or misunderstood the effect of s. 135(26), their mistake as to responsibility for the payment of retirement gratuities was not so fundamental as to render the entire agreement for the transfer of all assets and liabilities void:
The parties were obliged to fairly divide the assets and liabilities of the former boards, including Nipissing, between them, and to ensure that both sides were economically able to function. The EIC also had an obligation to ensure that Near North's ability to exercise its powers, carry out its duties, and conduct its day to-day-operations would not be unduly impaired, and that Nord-Est would be able to discharge its administrative and operational responsibilities for the assets, liabilities, and employees that were being transferred to it.
[39] She concluded, at para. 97:
In the context of the entire transfer of assets and liabilities, the liability for the retirement gratuities, even at its highest estimated number, is not sufficiently significant to render the entire agreement void. In my view, there is no common fundamental misapprehension of the facts, going to the root of the agreement.
[40] These were essentially findings of fact and we see no error that would justify appellate intervention and, accordingly, we reject the submission that the agreement between Near North and Nord-Est is vitiated by any mistake or lack of consensus ad idem.
Issue 4: Did the trial judge err by refusing to limit Near North's liability for future retirement gratuities to $252,231, the figure estimated at the time the agreement was made?
[41] Near North states that its proposal for the distribution of assets and liabilities with Nord-Est was premised on the total amount of the liability for retirement gratuities being $252,231. No other amount was identified or discussed. Therefore, if the court is of the view that the agreement should be upheld, Near North's liability should be limited to a maximum amount of 94.23 per cent of $252,231, which is its proportionate share of the amount identified by the parties as the total obligation for retirement gratuities. Near North also claims that even if the amount of $252,231 was an estimate, Near North never envisaged that the actual amount owing as of 2007 would be $825,760.93.
[42] Nord-Est takes the position that the joint demand and the order from the EIC are consistent with the unanimous evidence of the three people who negotiated the agreement and wrote the documents. [page654]
[43] We are not persuaded that we should interfere with the trial judge's findings which are factual in nature and supported by the record. The figures upon which the estimate was based were drawn up by employees of a predecessor board, not by either Near North or Nord-Est. Neither party took steps to verify the basis for the figure. The actual amount of the liability cannot be known until the teachers concerned actually retire. The agreement that the parties made and that was approved by the EIC does not specify a limit and speaks instead of payment of a "proportionate share of costs".
[44] Accordingly, we reject Near North's submission that the trial judge erred by refusing to fix its liability by reference to the estimated amount. Conclusion
[45] For these reasons, we dismiss the appeal with costs to the respondent in the amount agreed to by the parties, $35,000 inclusive of disbursements and GST.
Appeal dismissed.