COURT OF APPEAL FOR ONTARIO
CITATION: R & G Draper Farms (Keswick) Ltd. v. Nature's Finest Produce Ltd., 2016 ONCA 481
DATE: 20160616
DOCKET: C60875
Blair, MacFarland and Lauwers JJ.A.
BETWEEN
R & G Draper Farms (Keswick) Ltd.
Plaintiff
(Respondent/Appellant by way of cross-appeal)
and
Nature’s Finest Produce Ltd., Kejay Farms, Kejay Investments Inc., Jason Raymond Stallaert, Kevin Cornelius Stallaert, Campbell Soup Company and Campbell Soup Company Canada
Defendants
(Appellants/Respondents by way of cross-appeal)
BETWEEN
Nature’s Finest Produce Ltd., Kejay Farms, Kejay Investments Inc., Jason Raymond Stallaert, Kevin Cornelius Stallaert
Plaintiffs by Counterclaim
(Appellants/Respondents by way of cross-appeal)
and
R & G Draper Farms (Keswick) Ltd
Defendant by Counterclaim
(Respondent/Appellant by way of cross-appeal)
and
2077583 Ontario Ltd., 1318910 Ontario Ltd., Daniel Ubald Bigras, 1099039 Ontario Ltd., 2123979 Ontario Ltd., C.H. Robinson, A.C. Schmieding Produce Co. Inc. and Nicole Shannon Marie Verhey-Stallaert
Third Parties
Raymond G. Colautti and Anita Landry, for the appellants/respondents by way of cross-appeal
Morris Manning, Q.C., for the respondent/appellant by way of cross-appeal
Heard: May 9, 2016
On appeal from the judgment of Justice Mark L. Edwards of the Superior Court of Justice, dated July 16, 2016, with reasons reported at 2015 ONSC 4620.
ENDORSEMENT
[1] The appellants, Nature’s Finest Produce Ltd., Kejay Farms and Kejay Investments Inc. (“Nature’s Finest”) appeal from the motion judge’s summary judgment. He found Nature’s Finest and R & G Draper Farms (Keswick) Ltd. (“Draper Farms”) entered into a settlement under which Nature’s Finest was to pay Draper Farms about $189,000 for a load of carrots. This represented a reduction from the original purchase price of $231,000 to account for the fact that some of the carrots were bad. The judgment provides, in para. 1:
THIS COURT ORDERS AND ADJUDGES that the Plaintiff’s Motion for Summary Judgment as it relates to the settlement is granted against Nature’s Finest Produce Ltd. Kejay Farms and Kejay Investments Inc. in the amount of $168,757.32.
[2] There are two interrelated bases for the appeal. First, Nature’s Finest argues that while the parties agreed on the full amount of the settlement at about $189,000, they had not agreed on whether the rate of payment was to be $20,000 per month, as Nature’s Finest proposed, or $40,000 per month, as Draper Farms proposed. Nature’s Finest asserts that this difference is fatal to the existence of a settlement, because there was no consensus ad idem on a fundamental term.
[3] Second, in reasoning that the settlement required the payment of $40,000 a month, the motion judge relied in part on the payment of two cheques by Nature’s Finest to Draper Farms in the amount of about $20,000 that he initially inferred were sent following the settlement. After the release of his judgment, Nature’s Finest brought a motion for reconsideration in conjunction with a motion to introduce fresh evidence. The fresh evidence tendered by Nature’s Finest on the motion to reconsider showed that the cheques were sent before, and not after, the last exchange on the settlement specifying $40,000 per month. However, the motion judge dismissed the fresh evidence and the reconsideration motions, for reasons reported at 2015 ONSC 6006, on the following basis, at para. 27:
Even if I were to relax the due diligence requirement for the receipt of the fresh evidence, sought to be adduced by the defendants, in my view, it would have made no difference to the ultimate result. As I have already noted, once the plaintiff had responded to the defendant's email of April 18 with a suggestion of an increased monthly payment of $40,000, no response was forthcoming from the defendants, either repudiating this revised term of settlement or a demand that the $20,845.68 be returned. While my original Reasons may have referred to the absence of any stop payment on the cheques, the same analysis in my view holds true with respect to the fact that the defendants failed to demand the $20,845.68 be repaid by the plaintiff.
[4] In his summary judgment decision, the motion judge relied on Shoom v. Acktion Corp., [2003] O.J. No. 5204 (C.A.), for the proposition that the most fundamental term of the settlement between the parties is the principal amount, and that it was open to the court to infer agreement on the rate of payment from the behaviour of the parties after the exchange of emails related to the settlement. He stated, at para. 33:
Ohri's responding email of April 19, 2011 leaves the court with no doubt that the most fundamental term of the settlement between the parties was that there was an agreement with respect to the principle amount of $189,603.00. Ohri's responding email in no way calls that figure into dispute. The only issue raised in Ohri's email to Taylor was the terms of payment, i.e. $20,000.00 per month versus $40,000.00 per month. Ohri's email of April 19, 2011 was never responded to by Taylor. Using the same line of analysis that the Court of Appeal did in Shoom, it is not unreasonable for this court to come to the conclusion that the silence on the part of Taylor to the proposed terms of $40,000.00 per month implicitly acknowledges an agreement on that amount and it is not, in my view, unfair to infer such an agreement.
[5] Nature’s Finest has not demonstrated that the motion judge erred in relying on Shoom in concluding that an implied agreement had been reached on the terms of repayment, given his factual findings.
[6] Draper Farms, the respondent/appellant by cross-appeal, seeks to appeal the motion judge’s failure to dismiss Nature’s Finest’s counterclaim for damages for the bad carrots. In his reasons for dismissing the reconsideration motion, the motion judge said, at paras. 30 and 31:
When the motion was originally heard on June 17, 2015, I engaged counsel in discussion as to how best to deal with all of the various motions that were before me. I suggested to counsel, that dealing with the question of whether or not there was a settlement could ultimately assist the parties with respect to the outcome concerning the remaining motions, including the viability of the defendants' counterclaim. It was conceded by counsel for the defendants during the course of those discussions that if I decided the question of settlement in favour of the plaintiffs that this likely would pose significant difficulties for the defendants with respect to their counterclaim. I remain of the view that having now found in favour of the plaintiff on the question of whether there was a settlement of the debt owed by the defendant to the plaintiff that the most likely outcome with respect to the defendants' counterclaim would be that the counterclaim is subsumed within that settlement.
While I may be of that view, at this stage of the proceedings, it would, in my opinion, be unfair not to allow the defendants to proceed with their counterclaim, while at the same time allowing the plaintiffs to take the position that the determination of the settlement incorporated implicit terms that there would be a mutual release of all potential claims between the parties as they existed as of mid-April 2011. (Emphasis in original.)
[7] Draper Farms argues that the motion judge erred in law in failing to dismiss the counterclaim as part of the summary judgment motion, relying on this court’s decision in Bogue v. Bogue, 1999 CanLII 3284 (ON CA), [1999] O.J. No. 4310, 46 O.R. (3d) 1. There, Rosenberg J.A. said, at para. 13:
In my view, there was evidence upon which the motions judge was entitled to find that a final settlement of all the issues had been reached on December 10th and that there was an agreement in respect to the essential terms. While there was no express discussion about a release, the settlement of the action implied an obligation to furnish releases: Fieguth v. Acklands Ltd. (1989), 1989 CanLII 2744 (BC CA), 59 D.L.R. (4th) 114 (B.C.C.A.). At the end of those negotiations, the parties had bound themselves to the settlement.
[8] Nature’s Finest argues that this court has no jurisdiction over the cross-appeal, because the order that Draper Farms seeks to appeal is interlocutory, and accordingly the appeal lies to the Divisional Court under s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[9] We would not give effect to this argument.
[10] The judgment under appeal grants Draper Farms’ motion for summary judgment “as it relates to the settlement”. This is a final order. The difficulty in this case is caused by the motion judge’s reconsideration reasons, which were released after the defendants filed their notice of appeal in this court; these reasons are inconsistent with the wording of the motion judge’s formal judgment.
[11] In his supplementary reasons, the motion judge found that it would be unfair not to allow the defendants to proceed with their counterclaim. This subsequent ruling is inconsistent with his original ruling granting summary judgment in favour of the plaintiff on the basis of an agreed upon settlement of the parties’ claims.
[12] We observe that in their original notice of appeal, one of the appellants’ grounds of appeal related to the dismissal of their counterclaim. They struck this ground from their notice of appeal after the motion judge released his supplementary reasons. The respondent then moved before Pepall J.A. for an extension of time to file a cross-appeal in light of the amendments to the notice of appeal.
[13] In her endorsement granting the extension, Pepall J.A. noted, at para. 12: “the panel may ultimately conclude that the issues raised by the moving party do not require a cross-appeal in order to be advanced in this court.” This is the approach we now take.
[14] In keeping with the principle that an appeal is from the order and not the reasons, there was no need for Draper Farms to cross-appeal from a judgment in its favour. This principle is reflected in r. 61.07(1), which states:
61.07 (1) A respondent who,
(a) seeks to set aside or vary the order appealed from; or
(b) will seek, if the appeal is allowed in whole or in part, other relief or a different disposition than the order appealed from,
shall, within fifteen days after service of the notice of appeal, serve and file a notice of cross-appeal […]
[15] The order under appeal granted the relief that the respondent, as plaintiff, was seeking. The respondent need not cross-appeal from that order in order for this court to have jurisdiction to review the motion judge’s subsequent reasons permitting the defendants’ counterclaim to proceed.
[16] Turning to the substance of the issues raised on the cross-appeal, we agree with the respondent that the motion judge ought to have given effect to this court’s reasoning in Bogue v. Bogue. He gave no reasons for stating that it would: “be unfair not to allow the defendants to proceed with their counterclaim”. Given the trial judge’s finding that the parties had reached a settlement of the action, he ought to have found an implied obligation on the part of the appellants to provide a release of their counterclaim.
[17] For these reasons, we dismiss the appeal from the motion judge’s summary judgment in the respondent’s favour. Accordingly, there will be no further proceedings on the counterclaim.
[18] If the parties cannot agree on costs of the appeal and of the proceedings in the court below, they may provide this court with written submissions no more than 10 pages in length, within 10 days of the release of these reasons.
“R. A. Blair J.A.”
“J. MacFarland J.A.”
“P. Lauwers J.A.”