Court File and Parties

Court of Appeal for Ontario Date: 2021-06-25 Docket: C68494

Doherty, Benotto and Thorburn JJ.A.

Between: Erica Leslie and Grip Fast Strategies Corp. Appellants (Plaintiffs/Respondents by Cross-Appeal)

And: Encanto Potash Trading Corporation and Encanto Potash Corp. and Stavros Daskos Respondents (Defendants/Appellants by Cross-Appeal)

Counsel: Stéphane Hutt and Maxime Desforges, for the appellants John E. MacDonell, for the respondents

Heard: June 21, 2021

On appeal from the order of Justice Stanley J. Kershman of the Superior Court of Justice, dated April 23, 2020.

Reasons for Decision

[1] The appellant, Erica Leslie, through her company, the appellant Grip Fast Strategies Corp. (“Grip Fast”) provided consulting services to the respondent, Encanto Potash Corp. (“Encanto”). The arrangement went well for a time, but Ms. Leslie alleges Encanto stopped paying her invoices. The appellants also allege Encanto reneged on a stock option promised to Ms. Leslie. Ms. Leslie and Grip Fast sued Encanto, an affiliated company, Encanto Potash Trading Corp. (“EPTC”) and Stavros Daskos, the C.E.O. of Encanto.

[2] All of the defendants moved for summary judgment. The motion judge allowed the motion brought by Mr. Daskos and EPTC He dismissed the action against them. The motion judge dismissed the motion brought by Encanto and directed the matter proceed to trial.

[3] Encanto moved successfully for security for costs as against the appellant, Grip Fast.

[4] Ms. Leslie and Grip Fast appeal from the order dismissing the action against Mr. Daskos. The appellant, Grip Fast, also appeals the order for security for costs. There is no appeal from the dismissal of the action against EPTC.

[5] Encanto cross-appeals from the refusal of the motion judge to grant summary judgment dismissing the claim against Encanto.

[6] The order dismissing the action against Mr. Daskos is a final order. Ms. Leslie and Grip Fast have a right of appeal from that dismissal to this court. The order requiring Grip Fast to post security for costs is interlocutory, as is the order dismissing Encanto’s motion for summary judgment.

[7] Interlocutory orders are not appealable in the normal course to this court. All parties to the appeal, however, submit the appeals from the interlocutory orders are so interrelated with the issues arising on the appeal from the dismissal of the action against Mr. Daskos that this court should exercise its jurisdiction under s. 6(2) of the Courts of Justice Act, R.S.O. 1990, c.43 and hear the interlocutory appeals.

[8] After considering counsel’s submissions, the court decided to first hear argument on the merits of the appeal from the dismissal of the action against Mr. Daskos. After hearing those submissions, the court concluded that the appeal, as against Mr. Daskos, failed.

[9] The court advised counsel that the dismissal of the appeal as it related to the action against Mr. Daskos did not require the determination of any issues that were integral to the other appeals. There was therefore no basis upon which to invoke the court’s jurisdiction under s. 6(2) of the Courts of Justice Act in respect of the appeal by Grip Fast, or the cross-appeal by Encanto.

[10] The appeal by Grip Fast against the order for security for costs and the cross-appeal by Encanto from the refusal to dismiss the action against Encanto are quashed as interlocutory, without prejudice to the parties seeking appellate review in the appropriate forum, if so advised.

[11] We turn now to our reasons for dismissing the appeal from the dismissal of the action against Mr. Daskos. The appellants submit, apart from an affidavit which in no way addressed the substance of the claims, the defendants filed no evidence on the summary judgment motion. They submit, absent any such evidence, Mr. Daskos could not possibly meet his evidentiary burden on the summary judgment motion and the motion should have been dismissed on that basis.

[12] The motion judge was obliged to consider the motion on the material the parties chose to put in front of him. Mr. Daskos chose not to file an affidavit. Ms. Leslie filed an affidavit. Neither side cross-examined and neither side sought to augment the written record through the examination of witnesses under r. 39.03.

[13] The evidence and documents before the motion judge indicated that Ms. Leslie dealt with Mr. Daskos in his capacity as C.E.O. of her client, Encanto. All of the documentary evidence relevant to the contract spoke of an agreement between Ms. Leslie and Encanto. That material included the actual terms of the written document, the many invoices provided by Ms. Leslie over several months, various filings by Ms. Leslie with the federal government, communications between Ms. Leslie and Encanto over the course of the relationship, and the demand letter sent on Ms. Leslie’s behalf in July 2018, demanding payment on outstanding invoices.

[14] The motion judge concluded, based on the documentary evidence and Ms. Leslie’s affidavit, that there could be no genuine issue as to the identity of the contracting parties. There is no reason to interfere with that conclusion. It is fully supported in the record.

[15] The pleadings also made a bald allegation that Mr. Daskos had provided a personal guarantee in respect of any consulting fees owed to Ms. Leslie. Ms. Leslie’s affidavit at one point refers to Mr. Daskos assuring her he would “honour his guarantee to pay”. No details are provided in the pleadings or in the affidavit. Nothing else in the affidavit or the exhibits to the affidavit lends any support to the claim that Mr. Daskos personally guaranteed the debt. Certainly, the documents memorializing the agreement, and Ms. Leslie’s attempts to secure payment on the invoices for services provided, offer no support for the assertion that Mr. Daskos personally guaranteed the debt. It was open to the motion judge to find there was no triable issue in respect of the alleged guarantee.

[16] In addition to the claim based on the alleged personal guarantee of Mr. Daskos, the appellants made other claims against Mr. Daskos in the amended Statement of Claim. The motion judge did not address these claims in his reasons, although he did engage counsel in respect of the merits of these claims during oral argument. It is clear from those comments, that he was unable to discern any evidentiary basis for the personal claims against Mr. Daskos.

[17] Some of the claims fail at the pleadings level. For example, the oppression claim and the claim to pierce the corporate veil and render Mr. Daskos personally responsible for Encanto’s conduct are simply unsupported by anything in the pleadings, much less in the evidence.

[18] Other claims are entirely unsupported by the evidence. There is no evidence Mr. Daskos misrepresented his background to Ms. Leslie or, that if he did, Ms. Leslie could reasonably rely on any representation made by Mr. Daskos as to the enforceability of the agreement with Encanto. Similarly, with respect to the claim Mr. Daskos induced a breach of contract by Encanto, there was no basis to hold that anything done by him in respect of the non-payment of the invoices was done in any capacity other than as C.E.O. of Encanto.

[19] The motion judge properly dismissed the claim against Mr. Daskos.

[20] The appeal from the dismissal of the claim against Mr. Daskos is dismissed. Costs to the respondents, Encanto and Mr. Daskos, in the total amount of $8,000, inclusive of disbursements and relevant taxes.

“Doherty J.A.”

“M.L. Benotto J.A.”

“J.A. Thorburn J.A.”