SNC-Lavalin Profac, Inc. v. Sankar, 2009 ONCA 802

CITATION: SNC-Lavalin Profac, Inc. v. Sankar, 2009 ONCA 802

DATE: 2009-11-13

DOCKET: C50340 and C50422

COURT OF APPEAL FOR ONTARIO

Weiler, Sharpe and Rouleau JJ.A.

BETWEEN

SNC-Lavalin Profac, Inc.

Plaintiff (Respondent)

and

Derek Sankar, Audrey Holder-Sankar, Massdan Group Inc., Capital General Contractor, Capital General Contractor Ltd. (also known as Capital General Contractor), Express Contracting Services, K & A General Contracting (also known as KA Contracting), R & D Contracting and Consulting, Gallego General Contracting, Tita Contracting, Roofs Are Us, Francine Vachon, Kalamazad Chintamani (also known as Kalazad Chintamani) Rabbi Chintamani, Afzal Mohammed Yasin, (also known as Al Yasin), Carmin Amy Chintamani (also known as Carmin Harryram, Carmin Chin Carmin Harriram), Samnouth Hariram, Kharima Hunt, Denesh Ramsamujh, Rabeena Ramsamujh, John F. Gallego, Leszed Guminsky, Teresita Gallego (also known as Teresita Gil) And Maria E. Gil, D.M.S. Contracting Services, Jubilee Cleaners and Harbard Coin Laundry & Dry Cleaning

Defendants (Appellants)

Counsel:

W.D. Dunlop and Richard Campbell, for the appellants Audrey Holder-Sankar, Massdan Group Inc., Jubilee Cleaners and Harbard Coin Laundry & Dry Cleaning

Robert Kostyniuk, for the appellants Derek Sankar and DMS Contracting Service

Joel Richler and Erin Hoult, for the respondent SNC-Lavalin Profac Inc.

Heard: November 6, 2009

On appeal from the judgment of Justice Alfred J.C. O’Marra of the Superior Court of Justice dated March 18, 2009.

ENDORSEMENT

Appeal

[1] It is common ground that the sole issue before us on the appeal is whether the motion judge erred in his interpretation of the Defence Fee Funding Protocol (the “DFFP”), an agreement between the parties relating to the payment of the appellants’ legal costs from assets frozen by a Mareva injunction. The appellants’ motion to vary the terms of the Mareva order was dismissed and there is no appeal against that order.

[2] Among the assets frozen by Mareva order was a bank account containing substantial funds to which the plaintiff did not assert a proprietary claim. The DFFP provides as follows:

Upon receipt of the approval or deemed approval [of legal fees] defence counsel shall be at liberty to deliver the approval to the banker of the defendants without further approval, court order or formality, in order to obtain funds which shall forthwith be made payable by a bank draft to defence counsel drawn upon the defendants’ account in the amount of the approval.

[3] The motions judge held at para. 36 of this reasons that:

….[W]hile there was an agreement that accounts would be honoured if approved there is no agreement or promise that if the funds in the defendants’ account became depleted other assets subject to the Mareva order would be accessed to satisfy their payment. It cannot be maintained the plaintiff promised the defendants could make use of all of the proprietary assets beyond the defendants’ bank account. This is not a situation where there was a pre-existing contract that was varied by the agreement. The fees protocol explicitly states that the defence counsel shall be at liberty to deliver the approved account to the banker of the Defendants to be made payable by bank draft drawn on the defendants’ account. It does not reference any other source of funds or assets.

[4] The appellants argue that the motion judge erred and that he ought to have interpreted the DFFP so as to allow them to access further funds once the money in the bank account had been depleted. We disagree.

[5] We see no merit in the submission that a reasonable interpretation of the wording “defendants’ bank account”, “banker of the Defendants” and “…bank draft drawn on the defendants’ account” are generic terms referable to any and all of the funds frozen by the Mareva order. The position put forward by the appellants is both inconsistent with the wording of the DFFP and contrary to commercial good sense as it is difficult to see why the respondent would have agreed to terms that would afford the appellants access to all of the frozen funds, including those against which a proprietary claim is asserted.

[6] Nor do we agree that the motion judge erred by failing to find that the respondent is estopped from refusing to authorize payment of legal accounts from all frozen funds and assets based on statements made in correspondence between counsel. Those statements are, at best, ambiguous as to the respondent’s willingness to consider allowing the appellants access to any frozen funds against which a proprietary claim is asserted. As the appellant made no clear statement or undertaking to support the alleged estoppel, the motion judge did not err by rejecting this argument.

[7] We see nothing in the fresh evidence application that could affect the outcome of this appeal and that application is dismissed.

[8] Accordingly, the appeal is dismissed.

Cross-Appeal

[9] The respondent cross-appeals the motion judge’s determination that the Spence J.’s order “requires” payment of $3,500/month to the appellants for living expenses. The respondent submits that the motions judge should have prioritized the assets to which the appellant could look for payment or otherwise limit their access to certain of the funds.

[10] The motion judge was not asked to vary Spence J.’s order and he did not err in his interpretation of that order as affording the appellants access to $3,500/month for living expenses from the all of the assets frozen by the Mareva injunction.

[11] Accordingly the cross-appeal is dismissed.

Costs

[12] Costs should follow the results of the appeal and cross-appeal respectfully, and accordingly we award a net amount of $10,000 to the respondent, inclusive of disbursements and GST.

“K.M. Weiler J.A.”

“Robert J. Sharpe J.A.”

“Paul Rouleau J.A.”