Court File and Parties

CITATION: Grant Thornton LLP v. Direct Plastics Ltd., 2010 ONCA 187

DATE: 20100311

DOCKET: C51214

COURT OF APPEAL FOR ONTARIO

Simmons, Cronk and Rouleau JJ.A.

BETWEEN

Grant Thornton LLP

Plaintiff (Respondent)

and

Direct Plastics Ltd.

Defendant (Appellant)

Counsel: Harry Van Bavel, for the appellant Shawna M. Sosnovich, for the respondent

Heard and released orally: March 9, 2010

On appeal from the Order of Justice Michael G. Quigley of the Superior Court of Justice, dated July 14, 2009.

ENDORSEMENT

[1] The appellant’s main complaint on this appeal is that the motion judge erred in dismissing its counterclaim, in which it alleged that the respondent was professionally negligent and breached its contractual obligations to the appellant in respect of services provided by the respondent to the appellant. The motion judge ruled that the appellant provided no persuasive evidence in support of these allegations.

[2] We see no basis on which to interfere with the motion judge’s assessment of this issue. The appellant failed to file the best available or, indeed, any direct evidence on the summary judgment motion to support the claims it sought to advance in its counterclaim. The only evidence filed by the appellant was an affidavit sworn by a representative of a subsequent purchaser of the appellant, based on information and belief. The deponent of that affidavit had no personal knowledge of or involvement in any of the matters at issue.

[3] In these circumstances, it was entirely open to the motion judge to conclude that there was no genuine issue for trial concerning the appellant’s counterclaim. He, therefore, did not err in dismissing it.

[4] With respect to the respondent’s cross-appeal, the motion judge found, in effect, that the agreement between the parties was ambiguous as to when any fees owing to the respondent were payable. Accordingly, he ruled that the proper interpretation of the agreement concerning the timing of payment to the respondent was a genuine issue for trial.

[5] Before this court, however, the appellant acknowledges that on any interpretation of the agreement, if the appellant’s counterclaim was properly dismissed, the respondent is entitled to partial summary judgment in the amounts of $220,295.83 and $30,984.45. The appellant acknowledges that these funds are fees earned by the respondent in respect of tax cash refunds or tax credits actually received by the appellant.

[6] In our view, this acknowledgement was proper. In light of the terms of the agreement between the parties, there is no genuine issue for trial regarding the timing of payment of these amounts. The respondent, therefore, was entitled to summary judgment regarding these fees.

[7] With respect to the remaining fees claimed, on the contract interpretation theory most favourable to the appellant, the appellant had already received funds sufficient to trigger a payment obligation to the respondent in excess of what the respondent is claiming. By the conclusion of oral argument in this court, we did not understand the appellant to argue otherwise. The possibility of a voluntary reimbursement by the appellant to the Canada Revenue Agency, as occurred in this case, was not contemplated under the agreement between the parties. The fact of that reimbursement does not affect the obligations inter se of the parties.

[8] The respondent has voluntarily agreed to restrict its claim to an amount based on what it expects that it will be entitled to under an anticipated notice of reassessment to be issued to the appellant by the Canada Revenue Agency. The respondent also recognizes its continuing contractual obligation to readjust the quantum of the fees owed to it, and to reimburse the appellant accordingly, as may be necessary, on the appellant’s receipt of an actual notice of reassessment from the Canada Revenue Agency.

[9] In these circumstances, there is no genuine issue for trial regarding the timing of payment of the remaining fees to which the respondent is entitled. Summary judgment in the full adjusted amount claimed by the respondent in respect of these remaining fees therefore should be granted and we so order.

[10] We reject the respondent’s claim for pre-judgment interest at the rate of 18 per cent per annum on its outstanding invoices. This rate was never agreed on by the parties. The respondent, however, is entitled to pre- and post-judgment interest in accordance with the Courts of Justice Act.

[11] The appeal is dismissed and the cross-appeal is allowed in accordance with these reasons. The respondent is entitled to its costs of the appeal and cross appeal on a partial indemnity basis, fixed in the sum of $10,000, inclusive of disbursements and G.S.T. The respondent is also entitled to its costs of the proceedings below on a partial indemnity scale, fixed in the amount of $12,000, inclusive of disbursements and G.S.T.

“Janet Simmons J.A.”

“E.A. Cronk J.A.”

“Paul Rouleau J.A.”