COURT OF APPEAL FOR ONTARIO

CITATION: Berkley Insurance Company v. Rob Piroli Construction Inc., 2016 ONCA 885

DATE: 20161122

DOCKET: C61859

Feldman, Lauwers and Miller JJ.A.

BETWEEN

Berkley Insurance Company

Applicant

and

Rob Piroli Construction Inc.

Respondent

Sonny Ingram, for the respondent

Myron W. Shulgan, for the respondent

Heard and released orally: November 16, 2016

On appeal from the order Justice Paul Perell of the Superior Court of Justice, dated February 8, 2016.

ENDORSEMENT

[1] The appellant brought an application under rule 14 of the Rules of Civil Procedure seeking a mandatory order for the payment of money pursuant to an undertaking to pay. The respondent agreed in its material that there was a contract wherein it undertook to pay the money as part of security for bonds in a construction project and that when the time came for the company to live up to its undertaking, it failed to do so and was in breach of that contract.

[2] The application judge accepted the argument of the respondent that the application had to be dismissed on the ground that the application was not properly brought under rule 14 because the request for a mandatory order was not ancillary to a claim for relief.

[3] We do not agree. The application was properly founded under subrule (h), no material facts in dispute, and under subrules (d) and (g), the determination of rights following the interpretation of a contract and relief ancillary to those rights. In this case, the interpretation of the contract was conceded, allowing the court to determine whether the right to a mandatory order flows from the breach of contract.

[4] Because the application was dismissed on procedural grounds, the application judge did not decide the substantive legal issue nor did he make the necessary findings of fact based on the record to do so.

[5] The respondent’s position on the merits is that an undertaking to pay money is not enforceable by a mandatory order. Damages must be proved. Also, no irreparable harm was shown on this record.

[6] The decision of the application judge that the appellant was not entitled to proceed by application is set aside. The matter is referred back to the application judge for decision on the merits based on the record as it exists, or on an expanded record as determined by the application judge, if requested by the parties.

[7] Costs of the appeal in the agreed amount of $7,500 inclusive of disbursements and HST to the appellant. The disposition of the order of costs below in the amount of $10,000 will be left to the application judge.

“K. Feldman J.A.”

“P. Lauwers J.A.”

“B.W. Miller J.A.”