ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 09-124SR
DATE: 20120330

BETWEEN: ALAN CLARK and ELIZABETH CLARK

PLAINTIFF – and – DAVE BIRD DEFENDANT

R. Thomson, for the Plaintiff
Mr. Bird, In Person

HEARD: MARCH 29 and 30, 2012

C.J. CONLAN, J.

REASONS FOR JUDGMENT

INTRODUCTORY FACTS AND THE POSITIONS OF THE PARTIES

[1] Pinehurst School is a private school for behaviourally challenged students. It is located in St. Catharines.

[2] The Plaintiffs, the “Clarks”, were Partners at the School. They were signatories to a Partnership Agreement, found at Exhibit 1, Tab 2. They resigned as Partners effective August 31, 2007. The Clarks and the remaining Partners at that time signed a buy- out Agreement, found at Exhibit 1, Tab 3.

[3] The Clarks sued the three other Partners as of August 2007 for what the Clarks allege was a breach of the buy-out Agreement. The action settled on the morning of Trial as against two of the Defendants. The Trial proceeded as against the third Defendant, David Bird.

[4] This was a short Trial which lasted less than two days (March 29 and 30, 2012) including final submissions. The Clarks testified for the Plaintiffs. Mr. Bird and the two other Partners as of August 2007 (and the two co-Defendants named in the Statement of Claim), Ms. MacDonald and Mr. Farquhar, testified for the Defence.

[5] The Plaintiffs claim that, as of today, they are owed a total of $21,925.00 in damages, plus interest and costs. The $21,925.00 is comprised of $2850.00 allegedly owed to Mrs. Clark; $12,421.69 allegedly owed to Mr. Clark and $6653.31 allegedly owed to the Clarks for petty cash reimbursement for expenses that they paid on behalf of the School while they were Partners.

[6] Mr. Bird submits that the Plaintiffs are owed $10,050.00 total as of today - $2850.00 owing to Mrs. Clark and $7200.00 owing to Mr. Clark.

THE ISSUE TO BE DECIDED

[7] The issue and the reason for the discrepancy in the positions of the parties is with regard to whether Mr. Clark breached a term of the Partnership Agreement at Exhibit 1, Tab 2, specifically Article 9.1(b) which provides that he not “knowingly solicit, interfere with or endeavour to entice away from the Partnership any...student”. Mr. Bird also alleges that Mr. Clark breached clause 2.3 of that Partnership Agreement which stipulates that Mr. Clark, among other things, act “honestly and in good faith”. It should be noted that the latter submission was not pleaded by Mr. Bird. Parties should generally be held strictly to their pleadings. This is not Trial by ambush. But given that Mr. Bird is self-represented and considering that the argument regarding clause 2.3 of the Partnership Agreement is similar to the argument concerning Article 9.1(b), the Court will entertain Mr. Bird’s submissions about clause 2.3.

[8] If Mr. Clark violated the Partnership Agreement, then Mr. Bird claims a set-off in terms of the amount owing to Mr. Clark.

ANALYSIS

[9] The Partnership Agreement is poorly drafted. It was prepared by Mr. Bird and then amended as required, according to Mr. Bird, by the Partners at their meetings. There is no definition section. There is, thus, no definitions of the term “Partnership” or any of the key terms in sections 2.3 and 9.1.

[10] Much of the steam behind Mr. Bird’s position could have been met by the Court concluding that Nathaniel Hall, the student that Mr. Clark supposedly interfered with or tried to entice away, was never a member of the Partnership; and since the Partnership and the school (the business of the Partnership) are not necessarily the same, it cannot be said that Mr. Clark breached Article 9.1(b). That, however, would be mincing words and too technical an analysis of the issue. It would be contrary to the well accepted rules of contractual interpretation as summarized by the Court of Appeal for Ontario in Salah v. Timothy’s Coffees of the World Inc, 2010 ONCA 673, particularly at paragraph 16, as referred to by Mr. Bird in his able closing submissions.

[11] It is Mr. Bird’s burden to prove on balance the set-off. It is his burden to prove on balance that Mr. Clark breached the Partnership Agreement. Proof depends on admissible evidence and not speculation or conjecture or assumptions.

[12] It is without question that Nathaniel was a student of Pinehurst School. It is clear that Nathaniel’s father, Derek Hall (unfortunately now deceased), contacted Mr. Clark a few times in December 2007. It is also clear that Nathaniel Hall ended up coming to Owen Sound to live with the Clarks even though, as per Mr. Clark’s testimony, Derek Hall had told Mr. Clark in December 2007 that Nathaniel was registered at Pinehurst School. Nathaniel never attended the second semester at the school for the 2007/2008 academic year. Mr. Bird alleges that was due to Mr. Clark’s interference or enticement in violation of Article 9.1(b) and/or clause 2.3 of the Partnership Agreement, causing Pinehurst School to lose the $11875.00 that the Halls allegedly owed to the school for the second semester and never paid.

[13] There is nil evidence that Mr. Clark in any way solicited Nathaniel or Derek Hall. There is nil evidence that Mr. Clark in any way endeavoured or attempted to entice Nathaniel or Derek Hall away from the school.

[14] On the question of whether Mr. Clark interfered with Nathaniel or Derek Hall, because the Partnership Agreement contains no definitions, the Court must rely upon the ordinary meanings of “interfere” and “interference”. The Court has made reference to the most recent editions of The Concise Oxford Dictionary and Black’s Law Dictionary.

[15] This Court finds no reliable evidence that Mr. Clark interfered with the Halls. I accept that Derek Hall contacted Mr. Clark. How Derek Hall knew how or where to contact Mr. Clark I do not know. In December 2007, Mr. Clark by his own admission knew that Nathaniel Hall was registered at Pinehurst School. Whether Mr. Clark knew that Nathaniel Hall was registered for the second semester of the 2007/2008 academic year I do not know. Even if he did know that, however, there is no evidence that Mr. Clark meddled in the affairs of the school and the Halls; or that he obstructed or hindered any agreement that may have existed between the Halls and the school. I have not heard from Nathaniel or Derek Hall (the latter because he is deceased). It is an admitted fact that Nathaniel told the admissions coordinator, Ms. MacDonald, that he was not returning to the school for other reasons – see Ms. MacDonald’s note to file dated January 15, 2008 marked as Exhibit 5. It is pure speculation for Mr. Bird to argue that, but for the conduct of Mr. Clark, Nathaniel would have returned to the school for the second semester, and Derek Hall would have paid to the school the $11,875.00. That may or may not have happened. I do not know. I cannot draw that inference on the proven facts. Actually, there is no evidence that the Halls were contractually bound to pay the $11,875.00 and have Nathaniel return to the school for the second semester except for Exhibit 4 – the Registration Agreement allegedly signed by the Halls. I say allegedly because the document was tendered as an Exhibit and identified by Mr. Bird and Ms. MacDonald, but there is no admission by the Plaintiffs that the said document was in fact signed by the Halls or either of them. I have no evidence from the Halls directly. I have no evidence from anyone who can say that s/he saw either of the Halls sign the document. Ms. MacDonald, although normally the staff person at the school who has the students sign such documents, specifically testified that she could not recall seeing Nathaniel Hall sign the document. Interestingly, the school took no steps whatsoever to collect the $11,875.00 from the Halls once it became apparent that Nathaniel was not returning to the school for the second semester.

[16] There is simply no reliable evidence upon which it can be said that Mr. Bird has proven on balance that Mr. Clark interfered with the Halls and, thus, no basis to conclude that Mr. Clark breached Article 9.1(b) of the Partnership Agreement.

[17] On the issue of whether Mr. Clark violated clause 2.3 of the Partnership Agreement, an issue not pleaded by Mr. Bird but argued by him at Trial, I reject the submission that Mr. Clark failed to act in good faith. Assuming that the said clause survived the resignation of the Clarks as Partners in August 2007, there was no intent to defraud the school or seek unconscionable advantage vis a vis the school. There was no dishonesty or unfair dealing. There was no unfaithfulness to obligation. At its very highest, the evidence is that Mr. Clark, at the request of Derek Hall, permitted Nathaniel Hall to live with him in Owen Sound when Mr. Clark knew in December 2007 that Nathaniel Hall was registered at Pinehurst School. There is no evidence that Mr. Clark influenced that decision. Mr. Bird wants the Court to infer that Mr. Clark knowingly allowed the Halls to breach an agreement that they had with the school or at least acquiesced in that breach of contract occurring, thereby depriving the school of $11,875.00. Inferences need to be reasonable and drawn from proven facts. Mr. Clark testified that he never saw Exhibit 4 (the Registration Agreement) before the within litigation. I accept that. He testified further that he knew nothing about the payment arrangements between the Halls and the school. I accept that. He testified as well that he was unaware that Nathaniel Hall was registered to attend the second semester at the school in 2008. Mr. Bird argues that Mr. Clark must have known that based on the normal registration procedures that existed while the Clarks were Partners at the school. I am not prepared to make that inference.

[18] Mr. Bird has failed to prove on balance that Mr. Clark breached any provision of the Partnership Agreement. There will be no set-off.

[19] With that issue decided, the Plaintiffs’ Claim must be allowed as the pleadings, the evidence at Trial and the submissions by the parties reveal no other material facts in dispute. The only contentious issue was Mr. Bird’s set-off claim. The Plaintiffs’ Claim has been proven on a balance of probabilities. As a Partner, Mr. Bird clearly breached the terms of the buy-out Agreement marked Exhibit 1, Tab 3. Causation and the resulting damages (the amounts owing to the Clarks) are not disputed.

CONCLUSION

[20] Judgment is awarded against Mr. Bird and in favour of the Plaintiff, Mr. Clark, as follows: $8,875.00 ($11,875.00 less the $3000.00 referred to in the Partial Minutes of Settlement filed with the Court the morning of 29 March 2012), plus prejudgment interest in accordance with the provisions of the Courts of Justice Act on the amount of $6653.31 (petty cash) commencing January 1, 2010, plus postjudgment interest in accordance with the provisions of the Courts of Justice Act, plus costs in an amount to be determined upon hearing submissions from the parties.

[21] The Plaintiffs had requested that prejudgment interest on the $6653.31 commence October 31, 2007. The Clarks both testified that Mr. Bird promised that the school would pay back the petty cash advances in September 2007. Mr. Bird denies having said that. Ms. MacDonald does not recall Mr. Bird saying that. Mr. Farquhar does not recall Mr. Bird saying that. There is evidence that petty cash reimbursements to the Partners sometimes took a year or longer. I am not satisfied on balance that there was a commitment to pay back the $6653.31 in September 2007. I am not accusing anyone of being untruthful; I am simply concluding that the burden of proof has not been met by the Plaintiffs on that narrow issue. Hence, I choose January 1, 2010 (more than two full years after the Clarks’ resignation as Partners) as the date to commence the prejudgment interest on the $6653.31, as I find that to have been more than ample time for the amount to have been repaid.

[22] Thank you to the parties for conducting a polite and streamlined Trial. I wish Pinehurst School much success going forward.

The Honourable Mr. Justice C.J. Conlan

Released: March 30, 2012

COURT FILE NO.: 09-124SR
DATE: 20120330

JUDGMENT

Released: March 30, 2012