CITATION: Wilson et al v. Henderson et al, 2012 ONSC 1370
COURT FILE NO.: DC-7-11; DC-8-11; DC-9-11; DC-10-11
DATE: 2012-02-28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
File No: DC-7-11
Andy Wilson c.o.b. as A W Electrical Services
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
Steven D. Gadbois, for the Appellant
Timothy J. McGurrin, for the Respondents
BETWEEN:
File No: DC-8-11
Stanton Mechanical Ltd.
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
Steven D. Gadbois, for the Appellant
Timothy J. McGurrin, for the Respondents
BETWEEN:
File No: DC-9-11
JAS 3 Heating and Cooling Refrigeration LTD
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
Steven D. Gadbois, for the Appellant
Timothy J. McGurrin, for the Respondents
BETWEEN:
File No: DC-10-11
All Canadian Mechanical and Electrical Inc.
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
Steven D. Gadbois, for the Appellant
Timothy J. McGurrin, for the Respondents
HEARD: January 12, 2012
The Honourable Mr. Justice P. J. Flynn
reasons on Appeal
[1] These matters came before me as if one appeal of four related decisions of the Small Claims Court made by Deputy Judge J. Sebastian Winny on June 3, 2011, which dismissed the Appellants’ motions for judgment on the basis of alleged settlements between the parties.
[2] The four different Plaintiffs were all represented by Mr. Gadbois. The thing in common with respect to all of these actions was that the named Defendants Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub were the same.
[3] The deputy judge dismissed the motions on the basis of res judicata, based on an earlier order of the same deputy judge made April 4, 2011, wherein he set aside a default judgement on terms.
[4] In the matter under appeal, the deputy judge found that the very allegations of settlement had been raised by the Appellants and dismissed in that prior motion.
[5] All of the Plaintiffs had claimed in their separate actions for unpaid invoices for the supply and/or installation of various lighting fixtures, mechanical fixtures and equipment, heating, cooling, and refrigeration equipment and electrical services. Even though the title of the proceedings sets out that Ryan Henderson and Ryan Cyrankiewicz carried on business as Tabu Nightclub, the Respondent Ryan Cyrankiewicz is the president of 2214236 Ontario Inc. which is a general partner of Tabu Nightclub LP.
[6] At the hearing of the Appellants’ motions in the Small Claims Court, it was found that the Appellants had not established service of their claims on Mr. Cyrankiewicz. It was found that Mr. Cyrankiewicz did not find out about the various claims until December 2010, and January 2011.
[7] In April 2012, the Appellant All Canadian Mechanical and Electrical Inc. (ACME) had obtained default judgement against the other defendant Henderson c.o.b. as Tabu Nightclub and then proceeded to obtain a Notice of Examination against Mr. Cyrankiewicz. Two months later the other Appellants obtained default judgments against both Henderson and Cyrankiewicz c.o.b.as Tabu Nightclub.
[8] ACME’s Notice of Examination incorrectly stated that “the creditor had obtained judgment against Ryan Henderson and Ryan Cyrankiewicz, c.o.b.as Tabu Nightclub”.
[9] Mr Cyrankiewicz retained Anthony Keller as counsel and he entered into settlement discussions with the Appellant’s counsel Mr. Gadbois. On December 30, 2010, Mr. Keller offered a proposal to settle the ACME claim.
[10] On January 4, 2011, Mr. Gadbois advised Mr. Keller that there were also three other judgments against Mr. Cyrankiewicz related to other parties he represented. He asked if Mr. Keller would accept service of Notices of Examination in respect of those three judgments.
[11] Further conversations occurred between the lawyers and written correspondence on February 11, 2011 indicated that Mr. Gadbois was waiting to obtain settlement instructions and that the settlements might be contingent on receiving payment within two weeks.
[12] The next day Mr. Gadbois’s email indicated that three of his clients, Stanton, JAS 3, and A W Electrical were willing to accept 80 per cent of their claims contingent on receiving payment within two weeks. The matter went a few metres forward when on February 14, 2011, Mr. Keller responded by stating that his client would want all the judgments set aside after payment.
[13] Then Mr. Keller was replaced by Miller Thomson.
[14] In April 2011, motions were brought and heard to set aside noting in default and default judgments, and seeking permission to file defences.
[15] At that time, Mr. Cyrankiewicz still believed that ACME has obtained judgment against him because he had received the Notice of Examination.
[16] In support of the motions to set aside, Andrew Roth swore an affidavit which was amended by his further more recently admitted affidavit sworn December 15, 2011.
[17] Paragraph 4 of that affidavit ends this way “our client proposed to settle the All Canadian Mechanical and Electrical Inc action for 100 percent of the judgment, but hereby revokes his offer”.
[18] So then on April 1, 2011, those motions to set aside default judgments were heard by Deputy Judge Winny, who found that no settlements were ever concluded. He further ruled that even if there had been a valid settlement of the ACME, claim it would be unjust to enforce any such judgment because of the mere possibility that Mr. Cyrankiewicz and his counsel were mislead into an erroneous belief that the ACME judgment existed due to the pending judgment – debtor examination.
[19] The deputy judge held that the four judgments against Ryan Henderson c.o.b. as Tabu Nightclub and Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub and the Notice of Examination against Ryan Cyrankiewicz should be set aside.
[20] After that defences were filed where Mr. Cyrankiewicz denied the allegations of the Plaintiff’s claims against him personally.
[21] The parties were back before Deputy Judge Winny on June 3, 2011, where the deputy judge heard further motions brought by the Appellants to enforce the alleged terms of settlement.
[22] The Appellants argued at that time that the deputy judge should recuse himself based on a conflict of interest because he had heard the prior motion in April. The deputy judge ruled that there was no conflict of interest which would require him to recuse himself and then dismissed the motions as res judicata. He found that the Appellants had chosen to present evidence and argument on the settlements on prior motions. It was the Appellants who had asked for the court’s ruling in April and they could not now raise the same issue in a later motion.
[23] The deputy judge used some interesting language when he said “my decision rejected the Plaintiff’s position on the alleged settlement. I observed that their position was the functional equivalent of a motion for judgement on a settlement”.
[24] Whatever it was, I agree with the deputy judge. The mere fact of a prior ruling adverse to the Plaintiffs on an issue which they chose to raise both in April and in July does not create a conflict of interest.
[25] Moreover I agree with the deputy judge that the letter and email communications by Mr. Gadbois and Mr. Keller do not establish settlement in all four proceedings.
[26] It is not this court’s responsibility on an appeal to substitute its own view and findings of fact for those of the deputy judge.
[27] Weighing the evidence before him, it was open to the deputy judge to make the finding he did, that there was no settlement of these four claims for the reasons that he set out. I agree with counsel for the Respondents that the deputy judge did not err when he found that there was no conflict. He gave full consideration to all matters. The mere fact that there was a second hearing before this same deputy judge does not give rise to a reasonable apprehension of bias. Nor did the Appellant present any evidence or argument that would give reason for the deputy judge recuse himself. The deputy judge met the requirements of procedural fairness.
[28] The second ground of appeal by the Appellant is that the deputy judge erred in finding that the prior motion constituted res judicata.
[29] The three preconditions of res judicata are:
i. the issue must be the same as the one decided in the prior decision;
ii. the prior judicial decision must have been final; and
iii. the parties to both proceedings must be the same.
[30] It is clear that the prior judicial decision in this case was final and that the parties to both proceedings were the same. So the question becomes was the issue the same in both hearings?
[31] The motions heard on April 4, 2011, were to set aside default judgments. The Plaintiff had argued that the motion should be dismissed because settlements had been concluded. That issue was raised specifically by the Plaintiff. Then on June 3, 2011, the deputy judge ruled that the Plaintiffs “squarely raised the allegations of settlement” and the Plaintiffs chose to present evidence in argument on the settlement issue in response to the earlier motions. In my view, the deputy judge correctly applied the law relating to the res judicata doctrine, as a finding of settlement did not arise “collaterally or incidentally”, but was “fundamental to the decision arrived at”.
[32] It is simply the case that settlements had not been reached. Rather, the deputy judge correctly has it that the settlement discussions between the parties’ lawyers were only proposals. At least that finding was available to him on the facts and in my view there is no overriding and palpable error.
[33] Moreover, the deputy judge made an alternate ruling that, even if there had been a settlement of the ACME claim, it would be unjust to uphold that judgement, because it was probable Mr. Cyrankiewicz and his counsel were under the erroneous belief that there had been a judgment against Mr. Cyrankiewicz. Mr. Cyrankiewicz would be prejudiced by the enforcement of that so-called settlement, and should be given an opportunity to defend the allegations against him through the regular trial process.
[34] The Appellant will face no prejudice as the litigation is ongoing and the Respondents can seek full recovery of their damages though the litigation.
[35] Accordingly I would dismiss the appeals in respect of all four claims.
Costs
[36] The Respondents were entirely successful and in the usual course would be entitled to their costs.
[37] I will fix those costs after receiving and reviewing the parties’ Costs Submissions as follows:
i. on or before March 30, 2012, the Respondents shall serve and deliver to me at my Kitchener chambers their Form 57b Costs Outline, not augmented by more than one page, together with their Bill of Costs and any relevant Offer(s) to Settle; and
ii. on or before April 20, 2012, the Appellants shall serve and deliver to me at my chambers in Kitchener its Form 57b, not augmented by more than one page, together with any relevant Offer(s) to Settle.
P. J. Flynn J.
Released: February 28, 2012
CITATION: Wilson et al v. Henderson et al, 2012 ONSC 1370
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Andy Wilson c.o.b. as A W Electrical Services
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
BETWEEN:
Stanton Mechanical Ltd.
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
BETWEEN:
JAS 3 Heating and Cooling Refrigeration LTD
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
BETWEEN:
All Canadian Mechanical and Electrical Inc.
Appellant
– and –
Ryan Henderson and Ryan Cyrankiewicz c.o.b. as Tabu Nightclub
Respondents
REASONS FOR JUDGMENT
P. J. Flynn J.
Released: February 28, 2012