SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-10-394651

DATE: 20120216

RE: Darryl Ian Sheriff, Plaintiff

AND: W. Alfred Apps and Fasken Martineau Dumoulin LLP, Defendants

BEFORE: Carole J. Brown J.

COUNSEL: J. Vale, for the Plaintiff
M. R. Kestenberg, for the Defendants

HEARD: August 31, 2011

ENDORSEMENT

[ 1 ] The defendants, W. Alfred Apps [“Apps”] and Fasken Martineau Dumoulin LLP [“Fasken”] [collectively referred to as “the Firm”] bring this motion for summary judgment pursuant to R. 20, seeking dismissal of the action brought by the plaintiff, Darryl Ian Sheriff [“Sheriff”] on a without costs basis.

The Facts

[ 2 ] The plaintiff, Sheriff, is a sophisticated businessman. He obtained a law degree and was called to the Bar of Ontario, where he practiced some 25 years ago for approximately 3 years. He is currently Vice President in charge of national recruiting of advisors with RBC Dominion Securities. In June of 2003, Sheriff approached the defendant lawyer, Apps, of Fasken, to represent his corporation, Integral Wealth Management Inc. [“Integral”], in relation to a proposed acquisition of an existing wealth management business, including the financing and related regulatory matters. Sheriff alleges that Apps was also retained to give him personal advice regarding his personal business affairs.

[ 3 ] At the time that Apps was retained, Integral was already incorporated as a shell corporation. Sheriff was the sole director and shareholder of Integral. From 2003 onward, the Firm continued to provide legal services to Integral as requested. Apps met with Sheriff numerous times from 2003 to 2008. All invoices for legal services were rendered to and paid by Integral, and all correspondence from the defendants was addressed to Integral.

[ 4 ] In 2004, Apps was retained to assist with the termination of Curtiss Krawetz [“Krawetz”] a consultant for Integral, and also for the recruitment of John Gibson [“Gibson”], an investor in and currently the Chief Executive Officer of Integral. Sheriff remained with Integral as the President and National Sales/Recruiting Manager of Integral.

[ 5 ] In February of 2008, Gibson instructed Apps, on behalf of Integral, to terminate Sheriff’s employment with Integral.

[ 6 ] On February 21, 2008, Apps met with Sheriff, provided him with a draft of the Voluntary Resignation and Separation Agreement [“the Separation Agreement”] and advised Sheriff that he should review the Agreement with independent counsel.

[ 7 ] Sheriff retained counsel, Joel Vale [“Vale”], to review and advise him with respect to the Separation Agreement. Sheriff signed the Separation Agreement and executed releases with the benefit of advice from Vale. The Separation Agreement provided as follows:

1. That Integral would pay Apps $206,981.58, to be paid in monthly installments;

2. Terms concerning the retention of Sheriff’s equity in Integral;

3. The manner in which Integral employees would be advised of Sheriff’s termination;

4. An obligation on Sheriff not to disclose any confidential information and not to make derogatory comments about Integral, the shareholders, employees, officers, directors, customers, financial advisors or any of the prospective candidates of Integral;

5. A release of any claims against Integral and “any related, subsidiary, parent or affiliated companies, and any and all of their and its representative officers, directors, agents and employees and their and its respective heirs, personal representatives, successors and assigns”.

[ 8 ] Neither Sheriff nor his counsel, Vale, took any steps at the time to remove the defendant, Apps, as lawyer of record for Integral on the basis of the conflict of interest that Sheriff is now alleging.

[ 9 ] On October 6, 2008, Integral suspended its monthly payments to Sheriff under the Separation Agreement, as it believed that Sheriff was breaching the terms of the Agreement by disclosing additional confidential information and making derogatory remarks about Integral. As a result, Sheriff served a Notice of Action on Integral. Neither Apps nor Fasken were named as defendants in that Action.

[ 10 ] Sheriff and Integral settled the dispute and entered into minutes of settlement and a second release on March 5, 2009. Sheriff was, again, represented by Vale and Integral was represented by Apps. Neither Sheriff nor Vale protested that Integral was being represented by Apps. The minutes of settlement provided that Integral would continue to remit payments to Sheriff provided that Sheriff did not further breach the terms of the Agreement. The second release once again released Integral and its agents from further liability. All payments have since been made to Sheriff, in accordance with the terms of the Separation Agreement and minutes of Settlement. After all payments were satisfied and received by Sheriff in accordance with the agreement, Sheriff brought this action as against Apps and Fasken, who had not been specifically named in the first action and settlement thereof.

[ 11 ] The action brought by Sheriff alleges that Sheriff and Apps were in a solicitor-client relationship, that Apps breached his duties to Sheriff by acting for Integral, that he was in a position of conflict of interest, that he used confidential information against Sheriff with respect to the termination and that Sheriff has, as a result, suffered damages in the amount of $2,720,700.00 with respect to loss of income, loss of capital invested in Integral, loss in recruitment bonuses, loss of capital value from mismanagement of Integral after his termination, and repayment of legal fees paid by Integral to the Firm.

The Issues

[ 12 ] The issue in this summary judgment motion is whether there is a genuine issue requiring a trial.

[ 13 ] In addressing this issue, I will consider the following issues raised by the parties:

1. Was the defendant in a solicitor-client relationship with the plaintiff, such that he owed duties of confidentiality and loyalty?

2. If there was such a solicitor-client relationship, did the defendant place himself in a conflict of interest by acting for Integral?

3. If there was a conflict of interest, did the plaintiff waive the conflict of interest either impliedly by his actions or inaction, or expressly with a valid release covering both Integral and its agents;

4. If the defendant did breach his duty, are damages owing, and is disgorgement an appropriate remedy?

Rule 20 and Analysis

Summary Judgment and the Jurisdiction under Rule 20

[ 14 ] The issue in this motion is whether there are any genuine issues of fact requiring a trial.

[ 15 ] The amended Rule 20.04(2) provides for the granting of summary judgment where the Court is satisfied that there is no genuine issue requiring a trial. As recently explained by Justice Frank in Central Sun Mining Inc. v. Vector Engineering Inc., 2011 ONSC 1439 :

…the purpose of Rule 20 of the Rules of Civil Procedure is to dispose of actions at an early stage where it is possible to safely predict the result without a trial. The rule should be interpreted broadly so as to ensure its effectiveness in enabling parties to avoid the expense of unnecessary litigation and enabling the courts to reduce delay and increase access to justice.

[ 16 ] In determining whether there is a genuine issue requiring a trial, the motions judge must consider the evidence submitted by the parties, and has the power to weigh evidence, evaluate the credibility of the deponent and draw reasonable inferences from the evidence.

As Justice D. Brown held in Optech Inc. v. Sharma, 2011 ONSC 680 :

“…if the judge concludes that the nature of the factual dispute, assessed in light of the quality of the written evidentiary record, would enable the judge to make findings of facts with the same degree of certainty, and subject to the same requirements of the law of evidence as could be done at a “regular trial”, then it strikes me that the case would be ripe for determination and final disposition on the basis of a summary judgment motion”.

[ 17 ] On a summary judgment motion, the moving party has the burden of showing that the claim does not raise a genuine issue requiring a trial. Where the moving party meets that burden, the responding party has an evidentiary burden to set out facts to demonstrate that a genuine issue requiring a trial exists. R. 20 contemplates that a complete evidentiary record will be before the motions judge. Both parties must put their “best foot forward” and produce the evidence which would be produced at trial, and cannot rely on mere allegations or the pleadings.

[ 18 ] With respect to the evidentiary onus on the responding party, the Court in Reid v. Livingstone, 2004 13020 , stated:

“A responding party is not entitled to sit back and rely on the possibility that more favourable facts may develop by trial. If the respondent wishes to avoid summary judgment, it must put its best foot forward and “lead trump, or risk losing”.”

[ 19 ] To say that evidence will be forthcoming at trial is not sufficient. This includes substantiating a claim for damages with evidence of the losses: Continental Insurance Co. v. Almassa International Inc. , 2002 79661 (ON SC) , 2002 Carswell Ont. 1727, 39, C.C.L.I (3d) 129.

[ 20 ] Under Rule 20, this Court must determine whether a trial is genuinely necessary “because the issues cannot be truthfully, fairly and justly resolved without the forensic machinery of a trial”: Healey v. Lakeridge Health Corp., 2010 ONSC 725 (): 2011 ONSC 55 ().

[ 21 ] I have also taken into consideration the recent decision of the Ontario Court of Appeal in Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 , which has provided guidance with respect to the application of R.20.

[ 22 ] The Court of Appeal developed the “full appreciation” test to determine whether a claim can be disposed of by way of summary judgment. The motions judge must determine whether the full appreciation of the evidence and issues that is required to make dispositive findings can be achieved by way of summary judgment on the basis of the motion records, or whether this full appreciation can only be achieved by way of trial.

Summary Conclusion

[ 23 ] I find, for the reasons set forth below, that there is no genuine issue requiring a trial, considering all of the evidence and applicable caselaw in this matter. A full appreciation of the issues and facts can be achieved on the basis of the motion materials. I grant summary judgment to the defendant, on a without costs basis, as requested.

1. Was there a solicitor-client relationship between Sheriff and Apps, such that Apps owed Sheriff duties of confidentiality and loyalty?

[ 24 ] A corporate lawyer has a duty to the corporation rather than to its officers. Rule 2.02 (1.1) of the Rules of Professional Conduct states as follows:

Notwithstanding that the instructions may be received from an officer, employee, agent or representative, when a lawyer is employed or retained by an organization, including a corporation, in exercising his or her duties and in providing professional services, the lawyer shall act for the organization.

[ 25 ] The commentary to this Rule indicates that a lawyer may also accept a joint retainer and act for a person associated with the organization, but should be alert to the prospects of conflicts of interest arising. With respect to the solicitor-client relationship and conflicts of interest, this Court has stated in Harris v. Leikin Group Inc. , [2011] O.J. No. 2667, 2011 ONSC 3556 , as follows:

[368] At the heart of the fiduciary duty lies the duty of loyalty, which includes the duty to avoid conflicting interests. The duty of a corporate solicitor is to the company, and the solicitor must advise all directors so that they may make an informed decision as a board in the best interests of the company. Since the best interests of the company are not necessarily those of the majority shareholders or directors, a corporate solicitor who seeks to represent both the company and the majority of its shareholders or directors stands in a conflict position. 376

[369] A solicitor-client relationship does not arise between a corporate solicitor and a corporate officer merely because the officer had consulted or given instructions to the corporate solicitor.

[ 26 ] In certain circumstances, a solicitor and client relationship with the individual shareholders or directors of a corporation may exist even where the solicitor purports to act on behalf of the corporation only and bills all services to it: Harris v. Leikin, supra .

[ 27 ] In determining whether a solicitor-client relationship existed, it is necessary to determine whether the indicia of the solicitor-client relationship were present. Such indicia include: a contract or retainer; a file opened by the lawyer; meetings between the lawyer and the party; correspondence between the lawyer and the party; a bill rendered by the lawyer to the party; a bill paid by the party; instructions given by the party to the lawyer; the lawyer acting on the instructions given; statements made by the lawyer that the lawyer is acting for the party; a reasonable expectation by the party about the lawyer’s role; legal advice given; and legal documents created for the party. Not all indicia need to be present: Jeffers v. Calico Compressions Systems , 2002 ABQB 72 , [2002] 6W.W.R. 707 (Alberta Q.B.), [2002] A.J. No. 79; DiNunzio v. Hamilton (City) , [2010] O.J. No. 1144, 2010 ONSC 1693 , aff’d [2011] O.J. No. 237, 2011 ONCA 65 ; Harris V. Leiken Group Inc., supra .

[ 28 ] Most of these indicia are not present in this case. There is no contract or retainer with Sheriff; the only express retainer was with Integral. There is no evidence that a file was ever opened by the Firm for Sheriff personally. There is no evidence of any meetings between Sherrif and Apps concerning personal issues, although there were many meetings between Sheriff and Apps regarding corporate matters over the years. There was no evidence of legal advice given by Apps to Sheriff personally, although there was one email in evidence referencing a personal interest that Sheriff had in residential property, and enclosing a legal decision of potential interest. All accounts were rendered to and paid by Integral. After 2004, all instructions received by the Firm were from Gibson pertaining to Integral and there is no evidence adduced of any legal advice given by Apps or the Firm to Sheriff nor any legal documentation created for the benefit of Sheriff personally.

[ 29 ] Based on all of the evidence and the relevant caselaw, I find that there is no solicitor-client relationship between Sheriff and Apps and, accordingly, there is no genuine issue for trial with respect to this allegation.

2. If there was a solicitor-client duty owed, did the defendant put himself in a conflict of interest?

[ 30 ] In the event that I am incorrect in my analysis of the previous issue, I will address the conflict of interest issue.

[ 31 ] A conflict of interest is defined as an interest that would be likely to affect adversely a lawyer’s judgment on behalf of, or loyalty to, a client or prospective client, or an interest that a lawyer might be prompted to prefer to the interests of a client or prospective client. A lawyer who has acted for a client in a matter may not thereafter act against the former client in the same matter, in any related matter, or in any new matter if the lawyer has obtained from the other retainer relevant, confidential information. However, it is not improper for the lawyer to act against the client in a fresh and independent matter wholly unrelated to any work the lawyer has previously done for that person and where previously obtained confidential information is irrelevant to that matter: Law Society of Upper Canada Rules of Professional Conduct , Rule 2.04 (1) – (5).

[ 32 ] In MacDonald Estate v. Martin , 1990 32 (SCC) , [1990] 3 S.C.R. 1235, the leading case on the issue of conflicts of interest against former clients, the tests for a disqualifying conflict of interest are as follows:

1. Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand; and

2. Is there a risk that it will be used to prejudice the client?

[ 33 ] The determination of a conflict of interest in acting against the former client is an objective test and must be determined from the point of view of the reasonably informed person: Chapters Inc. v. Davis Ward & Beck LLP (2001), 2001 24189 (ON CA) , 52 O.R. (3d) 566, [2001] O.J. 206. The onus is on Sheriff to prove that Apps was in a relationship with him that was sufficiently related to Integral’s termination of Apps: Chapters Inc. v. Davies Ward & Beck, supra . Sheriff argues that his financial position, which he shared with Apps, resulted in Integral having an unfair advantage in negotiating settlement of the action. It was the uncontroverted evidence of Gibson, the CEO of Integral, that Sheriff’s financial position had no bearing on the amount that Integral agreed to pay Sheriff, as that was the maximum amount that they were willing to pay. Further, the uncontroverted evidence is that the information concerning Sheriff’s financial position was not provided to Gibson who ultimately determined the terms of the Separation Agreement and minutes of settlement, and who confirmed that the amount to Sheriff under the Separation Agreement was the maximum amount that Integral was prepared to pay. Sheriff adduced no evidence that he would have been paid more had Apps not known about Sheriff’s financial position. As well, Sheriff’s position was not confidential according to Sheriff’s own witness, Krawetz.

[ 34 ] I have already found there to be no indicia of a solicitor-client relationship between Apps and Sheriff personally. I further find that there is no evidence which was advanced by Sheriff sufficient to establish a conflict of interest.

3. If a conflict of interest existed, did the plaintiff waive the conflict impliedly by his inaction or expressly with the valid release signed, on two occasions, by Sheriff?

[ 35 ] I have already found that there was no solicitor-client relationship and no conflict of interest. However, I address this issue as the issue is clearly dispositive of the case. I conclude that Sheriff waived the conflict of interest impliedly by his inaction, and expressly with the two releases executed by him.

(a) Implied Waiver

[ 36 ] Jurisprudence indicates that persons must protest conflicts of interest at the earliest opportunity to do so, particularly in the context of motions to remove solicitors of record: Kjartanson v. Rutley , 1995 11045 (MB QB) , [1995] M.J. No. 328, 127 DLR (4 th ) 187; Seigel v. Seigel , [2009] O.J. No. 5680 .

[ 37 ] The evidence indicates that Sheriff only protested on one occasion when Apps told him that he was being terminated, stating that Apps “sold him out”. After that, he did not protest further for another two years. Moreover, Sheriff did not included Apps as a named party in his original action against Integral, although he had the benefit of advice from his lawyer, Vale. As well, Sheriff consulted with his lawyer, Vale, before he signed the release and did not protest that Apps was acting as solicitor for Integral at the time, nor did he protest during the negotiation and signing of the Settlement Agreement and minutes of settlement with Integral that Apps was the solicitor of record for Integral, again despite the benefit of Vale’s representation of him.

[ 38 ] Sheriff argues that he cannot waive his rights with respect to conflict of interest through his conduct, citing the Superior Court decision of Serniak v. Terniak [2003] O.J. 1664 . However, this decision was overturned by the Ontario Court of Appeal, which stated:

[1] In our view, the motions judge erred in concluding that Ms. Serniak did not acquiesce in Mr. Teitel’s alleged conflict of interest and breach of fiduciary duty and in concluding that it is not possible by conduct to waive rights with respect to such a conflict and such a breach: Serniak v. Terniak , [2004] O.J. No. 474 .

[ 39 ] The Court further held as follows:

[2] This is not a case of “mere delay”. Even assuming that there was such a conflict or breach, Ms. Serniak’s active participation for a period of 4½ years through 19 days of assessment hearing reasonably leads to the conclusion that she acquiesced in Mr. Teitel’s conduct. It was not open to her at the end of that period to raise the issue for the first time: Louie v. Lastman [2002] 61 O.R. (3 rd ) 459 at paras. 16-18 . Throughout the enforcement and assessment proceedings, she has from time to time had the benefit of legal counsel. She has offered no explanation for her delay in raising the issue of conflict of interest or breach of fiduciary duty in the assessment proceedings, a delay which has caused demonstrable prejudice to the integrity of the assessment process in general and to Mr. Teitel in particular.

[ 40 ] Similarly, in this case, Sheriff had the benefit of independent legal counsel from Joel Vale from 2008, when he was first terminated by Integral, through his settlement in March, 2009.

[ 41 ] I find that, by his conduct, the plaintiff waived any potential conflict of interest vis-à-vis the defendants . The evidence on this issue is clear and can be fully appreciated on a summary judgment motion, without the benefit of trial.

(b) Express Waiver

[ 42 ] Similarly, with respect to the issue of express waiver pursuant to the valid release executed by Apps, I find the evidence to be clear and able to be fully appreciated on a summary judgment motion. I find that there is no genuine issue requiring a trial for the reasons that follow.

(i) Economic Duress

[ 43 ] Sheriff claims, firstly, that the releases signed by him were done under economic duress, and are not valid. There is no evidence to support his claim. Rule 20.02 (2) clearly provides that the responding party “may not rest solely on the allegations or denials in the party’s pleadings, but must set out in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial. It is not sufficient for the responding party to rely only on pleadings or self-serving evidence contained in the affidavit.

[ 44 ] In determining whether economic duress was present in the signing of the agreement, it must be established that the party was coerced and the pressure exerted to “coerce” the party’s will was not legitimate. The following factors are to be considered in determining whether a party’s will has been coerced, as follows:

(i) whether the defendant protested at the time;

(ii) whether there was an effective alternative course open to the defendants;

(iii) whether the defendant was independently advised; and

(iv) after entering into the contract, whether the defendant took steps to avoid it.

Stott v. Merit Investment Corp., 1988 192 (ON CA) , [1988] O.J. No. 134, 63 O.R. (2d) 545, 48 DLR (4 th ) 288; William L. Rutherford Limited v. Iwaski W , [2008] O.J. No. 2606 , reversed on other grounds in [2009] O.J. No. 769, 2009 ONCA 82 ; Gordon v. Roebuck 1992 7443 (ON CA) , [1992] O.J. No. 1499 (CA); Sifam Management Sales Limited v. Raznick, [2005] O.J. No. 3688 (S.C.J.) .

[ 45 ] Based on the circumstances of this case, and the evidence before me, it is clear that the case does not meet the first branch of the test for economic duress, namely, there is no proof that Sheriff’s will was coerced in signing the Release. Sheriff only protested during his first conversation with Apps about Apps betraying him. He did not protest further during the settlement discussions, and he never protested that he was being forced into the agreement. Indeed, Sheriff was represented by independent legal counsel, Vale, throughout the entire process and Vale did not raise any protest, nor move to have Apps removed from the record with respect to the action and the negotiations. Further, Sheriff took no steps to avoid the settlement agreement after signing it. Indeed, he complied with the agreement for some time, until all monies were paid to him.

[ 46 ] I find that the tests for establishing economic duress have not been met. The Release is not invalid as it was not signed under economic duress, but rather was signed with the benefit of representation by Sheriff’s own lawyer. There is no genuine issue requiring a trial.

(ii) The Terms of the Release

[ 47 ] The Release executed by Sheriff includes release of Integral’s “related, subsidiary, parent, or affiliated companies, and any and all of their and its representative officers, directors, agents and employees and their and its respective heirs, personal representatives, successors and assigns”.

[ 48 ] The defendants argue that the plain and ordinary meaning of the word “agents” in the release includes Apps and Fasken.

[ 49 ] As observed in Neinstein v. Marrero , 2007 13939 (ON SC) , [2007] O.J. No. 1595, settlement agreements and releases are contracts and therefore must be interpreted with the reasonable expectations of the parties in mind:

[12] Settlement agreements are contracts. A court must interpret settlement agreements in a manner to ascertain the reasonable expectations of the parties, as expressed by the language that they have chosen and as understood with reference to the surrounding circumstances, or factual matrix, in which the agreement was concluded: see generally, Cinabar Enterprises Ltd. v. Bertelson , [2000] S.J. No. 337 (Q.B.), at paras. 46-53 . As Professor Waddams noted at page 100 of his text, The Law of Contracts , 3d ed. (Toronto: Canada Law Book, 1993): “A reasonable expectation need not mean that all the implications must be spelled out in the mind of the promisee. All promises, even those we call express promises, contain elements of implication.” In addition, a settlement agreement must be read as a whole in order to give effect to the reasonable expectations of the parties.

[ 50 ] In Neinstein , in finding that contractors, sub-contractors, consultants, and sub-consultants were covered by a release, Justice Brown held that the language of the release made it clear that the parties intended to include non-parties in the release. He stated:

[20] First, the applicants are not consistent in the position they take regarding the inclusion of non-parties in the release. If, as the applicants contend, only the parties and those named in the litigation are entitled to the benefit of the release, why are the applicants content to include in the release the “assigns, partners, employees, solicitors and agents, officers, directors” of the parties? Strictly speaking, those persons should not be included on the applicants’ theory of the interpretation of the Minutes. Of course, such persons are included because the general expectation when one drafts a general release is to include such persons in a release; their close relationship to the parties makes their inclusion natural.

[21] Section 16 of the Release called for a “Full + Final Mutual Release (General)”, and it is standard practice to infer from such language that the successors, assigns, etc. of the parties would be included as releasees. Put another way, it is an accepted implied term of an agreement to enter into a general release that such persons will benefit from the release. Without their inclusion the parties to the release risk losing that finality which they seek.

[ 51 ] In this case, as in Neinstein , Integral used an expansive release clause covering “any related, subsidiary, parent or affiliated companies, and any and all of their and its representative officers, directors, agents and employees and their and its respective heirs, personal representatives, successors and assigns.” Apps was acting in his capacity as agent for Integral in the termination of Sheriff. It is clear that Integral reasonably expected that the term “agents” in the Release would cover their solicitor, Apps. Sheriff should have reasonably expected the same.

[ 52 ] Moreover, in Radvar v. Canada (Attorney General), [2005] O.J. No. 5239 , aff’d [2007] O.J. No. 773, 2007 ONCA 137 , the Superior Court of Justice found that non-parties can be beneficiaries to a release where the release covers agents and the non-parties are acting in their capacities as agent to the covered parties. Frank J. stressed at paras. 56 and 57 that this is because the potential illegality of the acts of the agents was reasonably in the contemplation of the parties:

[56] Mr. Radvar had knowledge at the time he settled the action with Chubb and executed the Release, of the basis for the claims advanced against Signum and Rye in this action. The illegality of those acts was clearly in his contemplation. Had Mr. Radvar wanted to preserve his right to sue Signum and Rye, he should have tried to procure that concession in the settlement negotiations: see Sinclair-Cockburn Insurance Brokers Ltd. v. Richards . There is no evidence that he did so. In any event, he did not obtain the concession.

[57] Though not signatories to the Release, Signum and Rye are entitled to its benefits. As a result, Signum and Rye are entitled to summary judgment dismissing the claim against it.

[ 53 ] Similarly, Sheriff and his lawyer, Vale, could have reasonably contemplated at the time of drafting the settlement and release that Apps had a potential conflict of interest and that he was acting as agent to Integral. If Apps had wanted to preserve his right to sue Sheriff and Fasken, he should have made that clear by requesting Integral to include a term expressly excluding him from the release. There is no such evidence of such.

[ 54 ] Based on the foregoing, I find that there is no genuine issue regarding the validity and scope of the release which requires a trial. A full appreciation of the issue can be obtained on the basis of the evidence before me. I find this issue to be dispositive of the motion.

4. If the defendant breached his duty to the plaintiff, what damages may be owing to the plaintiff and, is disgorgement an appropriate remedy?

[ 55 ] As a result of the above findings, I do not need to determine the issue of damages. I will however, make the following comments regarding the plaintiff’s claim for damages and disgorgement.

[ 56 ] Sheriff seeks damages in the total amount of $2,720,700.00. Sheriff takes the position, that at trial, he intends to prove that Integral would be profitable but for his termination and that he would currently be enjoying the benefits from his income and performance bonuses from February of 2008, as well as significant capital appreciation value related to his equity participation in Integral, including his common and class B shares. Sheriff indicates that he intends to prove at trial that, as a result of the Firm’s conduct, he is entitled to damages of 47,700.00, compensatory damages of an additional 14 months of $250,000.00, general damages of $623,000.00 for his loss in capital invested in Integral that was not returned, general damages for bonuses in relation to recruitment work of $300,000.00 and special damages of $1,500,000.00 for loss of capital value resulting from mismanagement after his termination.

[ 57 ] However, Sheriff has not provided any evidence of his damages for purposes of the summary judgment motion. To say that more evidence will be forthcoming at trial, including substantiating a claim for damages with evidence of the alleged losses, is not sufficient. Continental Insurance Co. v. Almassa International Inc. , supra.

[ 58 ] I find that Sheriff has failed to provide the evidence necessary to support any claim for damages and has failed to put his best foot forward in this summary judgment motion.

[ 59 ] Further, taking into consideration the cases of Strother v. 3464920 Canada Inc. , 2007 SCC 24 , [2007] 2 S.C.R. 177 and Honig v. Reddick , [2009] O.J. No. 3449 , disgorgement would not have been an appropriate remedy in the circumstances of this case.

Order

[ 60 ] Based on all of the evidence, the material filed, the submissions of counsel and the applicable caselaw and the above analysis, this Court grants summary judgment in favour of the defendants, Apps and Fasken, on a without costs basis.

Carole J. Brown J.

Date: February 16, 2012