SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: C-123-11
DATE: 2012-08-14

RE: Sunvest Realty Corp. And Sunvest Homes Corp., Plaintiffs

and

Robert Baxter and Baxter I.C.I. Corp., Defendants

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL:
J. F. Byrne, for Moving Parties, Defendants
C.L. Melville, for Responding Parties, Plaintiffs

HEARD: July 6, 2012

ENDORSEMENT

[ 1 ] Robert Baxter and Peter de Groot were involved in a business relationship for many years. Acrimony is now their focus, with multiple actions having been initiated.

[ 2 ] This action involved one parcel of real property, owned by Baxter I.C.I. Corp. Sunvest Financial Corp. holds a first mortgage. The plaintiffs, however, claim a fifty per cent interest in the property, and in the shareholdings of Baxter I.C.I. Corp., on the basis of an alleged joint venture agreement.

[ 3 ] The action is doomed to fail. For the reasons that follow, the defendants’ motion for summary judgment dismissing the action is granted.

Background

[ 4 ] Mr. de Groot is the principal of the plaintiff corporations, and other related entities, that are involved in property development. He is a real estate broker and the owner or principal of one of the local Re/Max franchises.

[ 5 ] Mr. Baxter is the principal of the corporate defendant. He is an engineer and a real estate agent. Mr. Baxter was employed as a real estate agent by the Re/Max franchise. He also acted as a consultant for Mr. de Groot, providing advice and other services regarding proposed development projects.

[ 6 ] On May 6, 2008, Baxter I.C.I. Corp. “in trust for a company to be incorporated” entered into an agreement of purchase and sale with K & W Optical Limited to acquire property in the City of Waterloo, known as 151 Weber Street South. The purchase price was to be $700,000.00

[ 7 ] The transaction closed on July 3, 2008. The purchase price was reduced to $580,000.00, apparently as a result of environmental contamination. The corporate defendant took title “in trust” although there is no trust agreement.

[ 8 ] A mortgage was registered in favour of Sunvest Financial Corp., one of Mr. de Groot’s companies, for $600,000.00. Only $505,000.00 was advanced on the mortgage.

[ 9 ] The same solicitor, who has long acted for Mr. de Groot, represented both the purchaser and the mortgagee in the transaction.

Litigation

[ 10 ] On June 15, 2010, Sunvest Homes Corp. commenced an action against the defendants (Court File No: C-554-10) similar to the within case. The statement of claim, for some unknown reason, was never served. The action was later discontinued.

[ 11 ] This statement of claim was issued on February 9, 2011. As previously stated, the claim seeks an ownership interest in the property and in the defendant corporation, and other relief. The foundation of the claim appears to be an alleged joint venture agreement regarding the acquisition of the property. The agreement is said to be oral or constructed from a series of email communications. The plaintiffs advance a damage claim for $1,000,000.00. They also say the personal defendant is liable for breach of trust by the corporate defendant.

[ 12 ] In their statement of defence, the defendants deny any joint venture or trust agreement. They claim the transaction was completed on the basis of the actual agreement; that is, Sunvest Financial Corp. would provide mortgage financing. They also say the claim is statute-barred.

Motion

[ 13 ] The defendants seek summary judgment dismissing the action on the basis it is statute-barred, having been commenced more than two years after the alleged cause of action arose. Alternatively, they seek summary judgment dismissing the real property and personal claims. Other grounds advanced are the lack of a written agreement, as required by the Statute of Frauds and, indeed, that there was no joint venture agreement.

Summary Judgment

[ 14 ] Rule 20.04 (2)(a), Rules of Civil Procedure , now allows for summary judgment when the court is satisfied there is no genuine issue “requiring” a trial. The court may consider the evidence tendered by the parties, weigh the evidence, evaluate the credibility of a deponent and draw reasonable inferences unless it is determined such ought occur at trial.

[ 15 ] The test is described as whether the court can have a “full appreciation” of the evidence and issues that is required to make dispositive findings, by way of summary judgment based upon the record, or can this full appreciation only be achieved at trial: see Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 , at paras. 50-58 .

[ 16 ] Summary judgment may be considered in the following cases:

i) when the parties agree a motion is the appropriate method to determine the action

ii) where a claim or defence is shown to be without merit; or

iii) where the action or defence has no chance of success and, hence, a trial process is not required in the interests of justice.

See Combined Air, supra , at paras. 41-44 and 75.

[ 17 ] The court is entitled to assume each party has “put its best foot forward” as to the issues and material issues requiring determination. See Pizza Pizza Ltd. V. Gillespie (1990), 1990 4023 (ON SC) , 75 O.R. (2d) 225 (Gen. Div.) at p. 237; Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996) 1996 7979 (ON SC) , 28 O.R. (3d) 423 (Gen. Div.); and Combined Air, supra , at para. 56.

Analysis

[ 18 ] But for the limitation defence, I would allow this action to proceed to trial. The joint venture agreement appears, at best, to be oral and, hence, it is unlikely the property claim can succeed given the Statute of Frauds . The claim as to an ownership interest in the corporate defendant comes across as an attempt to overcome that deficiency. Similarly, the claim against the personal defendant is weak, at best. Nevertheless, credibility would be a significant factor and beyond the scope of a motion.

[ 19 ] The claims, however, are clearly statute-barred. Mr. de Groot sinks his own case by his admissions and cross-examination as hereinafter discussed. Credibility here is of minimal importance and can be assessed by virtue of the documentation. A full appreciation of the evidence on this issue occurs.

[ 20 ] Much was made of email communications. Mr. Baxter was dissatisfied with the business relationship and, in particular, his compensation. The “Bone to Bob” email from Mr. Baxter on January 31, 2007, sought an improved compensation plan. One of his proposals can be interpreted as a generic joint venture. The property in question, however, was not yet considered.

[ 21 ] For the purpose of this motion, I would assume there was a joint venture agreement. Certainly, there were discussions in 2007 and 2008.

[ 22 ] The transaction closed on July 3, 2008. Mr. de Groot would receive a reporting letter from his solicitor regarding the mortgage. But no joint venture agreement was prepared.

[ 23 ] On his cross-examination (p. 47), Mr. de Groot said he expected his company would take an ownership interest in the property, or a new company would be set up, “shortly after closing”. That is to say the joint venture was to be then established. Hence, there is a strong argument in favour of starting the limitation period, say, on July 31, 2008.

[ 24 ] Discoverability is said to be in issue. In this regard, by the Fall of 2008 the relationship changed. It became confrontational. On November 6 and 13, 2008, Mr. Baxter continued to bring up his compensation. He specifically made reference to Sunvest’s involvement in the property “as lender only”.

[ 25 ] Mr. de Groot would say this was an attempt by Mr. Baxter to re-negotiate. Indeed, in his reply on November 21, 2008, he told Mr. Baxer “going at it alone was not the deal Bob!!”. Then, on December 29, 2008, Mr. de Groot would refer to his company owning 50 per cent of the property.

[ 26 ] These communications, in my view, are critical. In their own words, the individuals staked out and announced their positions. No clearer evidence was required.

[ 27 ] Mr. de Groot attempts to say he was unaware until June 2009 that Mr. Baxter was reneging on their joint venture agreement. Such, however, ignores what had transpired in November and December 2008. In one sense, Mr. de Groot’s position is not credible and it appears to be an attempt to avoid the limitation issue.

[ 28 ] Mr. de Groot is an experienced real estate broker and developer. As such, he clearly understood in the Fall of 2008 that the joint venture was not being completed. Credibility, therefore, is of no concern. The emails suffice.

[ 29 ] If the limitation period did not commence on July 31, 2008, it is a certainty by December 31, 2008. I so find.

[ 30 ] The statement of claim was not issued until February 9, 2011, well beyond the expiration of the limitation period of two years set out in the Limitations Act, 2002 .

[ 31 ] Accordingly, the motion is granted and the action is dismissed.

[ 32 ] If the parties are unable to agree on the issue of costs, brief written submissions are to be delivered to my chambers in Cayuga within 30 days.

D.J. Gordon J.

Released: August 13, 2012