Court File and Parties

CITATION: Caron v. Brooks, 2010 ONCA 257

DATE: 20100409

DOCKET: C50498

COURT OF APPEAL FOR ONTARIO

Juriansz, Rouleau and Watt JJ.A.

BETWEEN

Michel Caron

(Plaintiff) Respondent

and

Sydney Brooks, Lyn Brooks and Videoempire Inc.

Defendants (Appellant)

Counsel: Kathleen Erin Cullin, for the appellant Lyn Brooks Howard E. Reininger, for the respondent

Heard and released orally: March 31, 2010

On appeal from the judgment of Justice David J. Nadeau of the Superior Court of Justice dated April 17, 2009.

Endorsement

[1] This is an appeal of Lyn Brooks and Videoempire Inc. of the judgment of Nadeau J. rendered April 17, 2009, after the trial of an issue. They also seek leave to appeal the costs award.

[2] The trial of an issue arose out of an action in which the respondent claimed that a mortgage transaction structured by his former solicitor, Sydney Brooks, was fraudulent. Brooks had structured the transaction to include his wife, Lyn Brooks, and a corporation of which they were both directors, Videoempire Inc. Sydney Brooks and the appellants alleged that the mortgage had been registered as security for outstanding legal fees owed to Sydney Brooks and advanced a counterclaim seeking payment of those legal fees. Sydney Brooks later declared bankruptcy and was a party to the trial of the issue for procedural purposes only.

[3] After the trial of the issue, the trial judge expunged the mortgage and found that Lyn Brooks had been complicit in the fraudulent mortgage transaction but dismissed the claim for damages against her. The trial judge also found that the respondent did not owe Sydney Brooks any money for legal services. He awarded costs against Lyn Brooks and Videoempire Inc. in the amount of $75,000.

[4] The appellant submits that there was no evidence upon which the trial judge could find that she committed fraud or was complicit in the fraud of Sydney Brooks. We disagree. During oral argument, counsel for Lyn Brooks recognized that she had committed acts that furthered her transaction but submitted she did so without knowledge that it was fraudulent. For example, she signed the letter directing the agent to register the mortgage and later gave instructions that it be enforced. We add that, contrary to counsel’s submissions, the record did contain evidence that Lyn Brooks prepared the mortgage. Sydney testified that she did so.[^1] In any event, Lyn Brooks, as a director of Videoempire, would have known there was no debt owing from Sydney Brooks to Videoempire and no basis for registering the charge in the name of Videoempire. As mentioned, Lyn Brooks gave instructions that the charge be enforced.

[5] In all of these circumstances, the findings of the trial judge and his award of costs were fully supported. We do not agree that the trial judge exceeded his jurisdiction by finding that the respondent owed no legal fees to Brooks. That was a necessary part of his reasoning, which, incidentally, rendered a future accounting moot.

[6] The appeal is dismissed. Leave to appeal the costs award is not granted. Costs of the appeal are fixed in the amount of $5,000 inclusive of disbursements and GST.

“R.G. Juriansz J.A.”

“Paul Rouleau J.A.”

“David Watt J.A.”

[^1]: See lines 30-32 on p. 654 of the transcript of the trial of the issue.