COURT OF APPEAL FOR ONTARIO

CITATION: Zenex Enterprises Limited v. Pioneer Balloon Canada Limited, 2016 ONCA 594

DATE: 20160726

DOCKET: C60765

Hoy A.C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Zenex Enterprises Limited

Plaintiff (Respondent)

and

Pioneer Balloon Canada Limited, S. Rossy Inc., Dollarama S.E.C. and Dollarama L.P.

Defendants (Appellant)

Derek Collins, for the appellant

Michael S. Deverett, for the respondent

Heard: July 19, 2016

On appeal from the judgment of Justice Sandra Chapnik of the Superior Court of Justice, dated June 19, 2015 and supplementary reasons, dated July 14, 2015.

ENDORSEMENT

[1] The appellant, Pioneer Balloon Canada Ltd. (“Pioneer”), appeals from the trial judge’s determination that it owes Zenex Enterprises Ltd. (“Zenex”) $266,725.08 for breaching an oral contract to pay a commission on its balloon sales to Dollarama. Zenex seeks to cross-appeal the trial judge’s decision that it pay Pioneer $5,000 in costs for an unsuccessful motion it brought in the course of the proceedings.

Background

[2] Pioneer is a balloon manufacturer. Zenex is a wholesaler and distributor of consumer goods. Dollarama, a retail chain store, was a customer of Zenex for several years, during which it purchased various goods including balloons Zenex had purchased from Pioneer.

[3] In 2005, Pioneer entered into an agreement to sell balloons to Dollarama directly. Several million dollars in balloons were sold by Pioneer to Dollarama over the next five years. Zenex claimed that it was entitled to a 5% commission on Pioneer’s sales to Dollarama, pursuant to an agreement it made to introduce Pioneer to Dollarama and to assist in obtaining Dollarama’s business. Pioneer contended that it secured the Dollarama business on its own and that it owed only $5,000 as a fee for Zenex president Howard Starr’s services

Did Zenex introduce Pioneer to Dollarama?

[4] Pioneer argues that the trial judge committed a palpable and overriding error when she found it was not disputed that in December 2005, Zenex introduced Marylynn Borondy, salesperson for Pioneer, to the principal buyer at Dollarama. Pioneer’s submissions focused on its first meeting with Dollarama in Montreal, in December 2005. It argues that Mr. Starr did not attend this meeting and, therefore, Zenex did not introduce Pioneer to Dollarama. It points to evidence that its representatives had to introduce themselves to the company at the meeting.

[5] We do not accept this argument.

[6] The agreement between Zenex and Pioneer contemplated a commercial introduction – an opening of doors by Mr. Starr, offering Pioneer the chance to do business directly with one of Zenex’s longstanding clients. Mr. Starr could not attend the meeting because his wife was ill, but sent a sales representative familiar with the business in his place. Pioneer does not dispute that the sales representative attended the meeting in the place of Mr. Starr.

[7] It was open to the trial judge to find that Mr. Starr’s absence from the first meeting with Dollarama, which he helped arrange, did not undermine the role Zenex played in helping Pioneer to secure the contract with Dollarama. Pioneer had no prior relationship with Dollarama and the trial judge found that “but for the introduction through Zenex, the meeting and consequent sales by Pioneer to Dollarama would likely never have occurred. The introduction in itself was, I find, significant.”

[8] Pioneer attempted to downplay not only the significance of the work done by Mr. Starr in arranging the introduction with Dollarama, but also the work he did in helping it to secure the contract with Dollarama. For example, Pioneer noted that Mr. Starr did not participate in its second meeting with Dollarama in March 2006.

[9] However, the trial judge found that Pioneer’s second meeting with Dollarama was set up without checking with Mr. Starr, who was informed of it only the night before. The trial judge found, further, that Mr. Starr provided extensive advice to Pioneer on how to deal with Dollarama in a series of telephone calls and email messages between the parties, and spent many hours strategizing Ms. Borondy as to its program details and Dollarama presentation.

[10] The trial judge preferred the evidence of Mr. Starr whenever it diverged from that of Ms. Borondy, whose testimony she considered “self-serving and inconsistent”, and not credible as a result. She found that Mr. Starr took responsibility for and helped service the Dollarama account, and at no time worked as a mere employee or sales agent for Pioneer.

[11] In short, both the specific finding impugned and the trial judge’s decision are amply supported by the record. We see no palpable and overriding error.

Did judge wrongly rely on discovery evidence?

[12] Pioneer submits that the trial judge erred in relying on evidence from the discovery that was not referred to during the course of the trial. It points specifically to paras. 39, 40, and 46, in which the trial judge quotes from the examinations for discovery of Ms. Borondy and Mr. Starr.

[13] We would not give effect to this ground of appeal.

[14] There is no doubt that discovery evidence was admitted in contravention of r. 34.18 of the Rules of Civil Procedure. Zenex acknowledges as much. However, the admission of this evidence is of no moment. The trial judge’s findings do not depend on it. There was ample evidence, properly admitted, to support the trial judge’s findings of fact. As a result, the breach of r. 34.18 did not result in any substantial wrong or miscarriage of justice.

Additional issues

[15] Pioneer raised additional issues in its factum, but these were not pursued at the hearing of the appeal. Nevertheless, we have reviewed these issues and find no errors requiring appellate intervention.

The cross-appeal

[16] Zenex argues that the trial judge erred in failing to give effect to the pre-trial costs decision of the motion judge. The motion judge dismissed Zenex’s disclosure motion but, in accordance with the agreement of the parties, ordered that costs on the motion were to be “in the cause”. That is, regardless of the outcome of the motion, the winner of the trial would be awarded costs for the motion in addition to costs for the trial.

[17] The trial judge concluded that a more appropriate order, and the probable intent of the motion judge considering his reasons and decision, would have been to order costs to Pioneer in any event of the cause. Accordingly, she ordered that costs of the motion, which she fixed in the all-inclusive amount of $5,000, be paid to Pioneer.

[18] We agree with Zenex that the trial judge erred in doing so. Given the order of the motion judge, the trial judge was required only to set the quantum of costs for the motion. She did so, setting them at $5,000, but that exhausted her authority. The trial judge had no authority to alter the motion judge’s order that costs were to be awarded to the winner of the trial.

[19] Leave to cross-appeal is granted. The cross-appeal must succeed.

Disposition

[20] The appeal is dismissed. Leave to cross-appeal is granted, the cross-appeal is allowed, the trial judge’s costs award in favour of Pioneer is over-turned, and the costs of trial payable to Zenex are increased by the sum of $5,000.

[21] Zenex is entitled to costs for the appeal in the agreed amount of $20,000 plus HST, inclusive of disbursements.

“Alexandra Hoy A.C.J.O.”

“David Brown J.A.”

“Grant Huscroft J.A.”