ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO: CV-01-222743
DATE: 20130326
B E T W E E N:
Greenbanktree Power Corporation
Applicant/Appellant
- and -
Coinamatic Canada Inc., 200 Dufferin Street Holdings Inc., General Electric Capital Canada Inc., 450 Winona Drive Holdings Inc., MCAP Financial Corporation in Trust for British Columbia Investment Management Corporation, 1150 & 1200 Kingston Road holdings Inc., 120 Raglan Avenue Holdings Inc., Metcap Living Management Inc., Metro-Matic Services Limited
Respondents
Ronald Moldaver, Q.C.
for the Applicant/Appellant Greenbanktree Power Corporation
John Campion & Richard Butler,
for the Respondent Metcap Living Management Inc.
HEARD: March 20, 2013
GOLDSTEIN J.:
[1] On March 20, 2010, I heard an appeal by Greenbanktree Power Corporation (“Greenbanktree”) from a judgment of Master McAfee. I dismissed the appeal with costs, with reasons to follow. These are my reasons.
[2] Greenbanktree owned a small interest in several commercial properties in the City of Toronto. The Respondent Metcap Living Management Inc. (“Metcap”) was the property manager. The commercial properties consisted of five high-rise apartment buildings. Companies owned, or controlled by, or related to Metcap were the majority owner.
[3] Things did not go so well between Greenbanktree and Metcap, and in 2001 the Greenbanktree brought an application for partition and sale. Metcap vigorously opposed the sale. It had only recently purchased the properties. It had a large stake, and a sale would have been very expensive in terms of mortgage penalties and sale costs. It argued that given Greenbanktree’s minority status (it only owned approximately 6% of the properties; Metcap owned the remainder) the sale ought not to have been ordered. Metcap lost. In May, 2002, Justice Pitt ordered a sale of the properties. Metcap appealed to the Divisional Court and the Court of Appeal and lost at each stage.
[4] Greenbanktree subsequently registered the Judgment For Sale on title to the properties. In March, 2004, Metcap sold its interests to a new owner, The El Ad Group, subject to the Judgment For Sale.
[5] Master Linton was appointed as the Referee for the sale of the properties. In 2006 Greenbanktree brought a motion for production of accounts and records from Metcap relating to the management of the properties. Master Linton ordered production. Metcap appealed. The appeal was dismissed by Justice Belobaba.
[6] In 2010, Greenbanktree sold its minority interest privately to El Ad, which then became 100% owner of the properties. Greenbanktree removed the instrument registering the Judgment For Sale from the properties, indicating that it was no longer required. The sale to El Ad was not in accordance with the terms of the Judgment For Sale. Greenbanktree did not inform the Master Linton that it was selling its interest.
[7] In 2011, Greenbanktree brought a Notice of Hearing For Directions And Timetable before Master McAfee, who had replaced Master Linton as the Referee. Greenbanktree asked that the Master set a timetable to examine a representative of Metcap and the scheduling of a hearing to address issues related to the settling of accounts.
[8] In essence, Greenbanktree’s position was that Metcap had overcharged it when it was acting as property manager of the properties. Greenbanktree wanted to use the reference to obtain an accounting in relation to those management fees.
[9] Master McAfee held that as a result of the private sale to Metcap and Greenbanktree’s decision not to proceed with the Judgment For Sale, the Judgment For Sale was no longer enforceable. Since the Master’s jurisdiction was limited to the reference, she lacked jurisdiction to proceed. Master McAfee added that having obtained a Judgment For Sale, Greenbanktree was not free to pick and choose between those portions it wished to pursue.
[10] Greenbanktree argues that the Master erred by misinterpreting her jurisdiction to proceed with a reference. The accounting, Greenbanktree argues, was and remains an independent action. Greenbanktree also argues that the Master erred in finding that Greenbanktree had elected to abandon the reference process.
[11] My review of the Master’s decision is limited. I can only intervene if there is an error of law, the Master exercised her discretion based on the wrong principles, or the Master misapprehended the evidence such that there is palpable and over-riding error: Zeitoun v. Economical Insurance Group (2008), 2008 20996 (ON SCDC), 91 O.R. (3d) 131 (Div.Ct.).
[12] Greenbanktree argues that there were two aspects to the reference: the sale of the properties, and the accounting as between Greenbanktree and Metcap for the management of the properties. Greenbanktree says that although the sale aspect was extinguished when it sold its interest to El Ad, the accounting aspect was still intact. Greenbanktree, therefore, argues that the Master erred by finding that she had no jurisdiction to proceed.
[13] I respectfully disagree. In my view, the Master was correct in finding that she lacked jurisdiction to proceed. Quite simply, the terms of the reference were set out in the Judgment For Sale. The Judgment For Sale is now moot. Greenbanktree itself rendered the Judgment For Sale moot.
[14] I also disagree that the reference contained a sale of land aspect and an accounting for management fees aspect. The Judgment For Sale states, part:
This Court orders and adjudges that all necessary inquiries be made, accounts taken, costs assessed, and steps taken by the Master at Toronto for the sale of the lands described in the attached schedule in accordance with the interests of the parties entitled to share in them.
This Court orders and adjudges that the lands, or such part of it as the referee thinks fit, be sold under the direction of the referee…
[15] There is no indication that Justice Pitt had an intention that there be a separate accounting for the management of the properties aside from that which was necessary for the sale.
[16] As noted, Greenbanktree brought a motion for production brought before the Referee, Master Linton, in 2006. It won and Metcap appealed. Justice Belobaba, in ordering production, summarized Greenbanktree’s argument:
Greenbanktree argues that the accounts and records that were ordered to be produced are necessary not only for an accounting between former and present co-owners, but are also relevant to the present-day marketing and sale of the properties.
[17] I see nothing in Justice Belobaba’s judgment that indicates that he found a freestanding right to an accounting in respect of management fees by Greenbanktree. In my view, Justice Belobaba dismissed the appeal and upheld the Master’s order on the basis that the accounting was a necessary and ancillary part of the sale. Justice Belobaba also noted:
It is also important to remember that the learned Master merely ordered that the accounts and records covering Metcap’s period of management be produced for review. Relevance has not yet been determined. As the Master noted in para. 6 of his order:
“I do not now make a final determination of whether the documentation will be held to be relevant at the hearing for the taking of accounts, but it has a semblance of relevance at this stage of the reference proceeding and should be produced as herein ordered.”
[18] There is no indication that Justice Belobaba decided the appeal based on anything other than the traditional jurisdiction of a Master in relation to production and discovery.
[19] Master McAfee also found that Greenbanktree had made an election when it decided to sell its interest outside the reference process. By electing to sell its interest to El Ad privately, it chose to forego the reference process and could not then, as she put it “pick and choose between those portions of the Judgment For Sale that it wishes to pursue”.
[20] Greenbanktree argues that the Master erred in finding an election, because even if the sale of land aspect of the reference was moot, the management fee aspect of the reference was still ongoing. Since I have already found that there was no separate accounting for the management fees, it is obvious that Greenbanktree’s argument cannot succeed. That said, I agree with the Master. As Epstein J.A. for the Court of Appeal commented in Charter Building Co. v. 1540957 Ontario Inc. (c.o.b. Mademoiselle Women’s Fitness & Day Spa), 2011 ONCA 487, [2011] O.J. No. 3006, 107 O.R. (3d) 133:
The essence of the doctrine of election is that a person is precluded from exercising a right that is inconsistent with another right if he has consciously and unequivocally exercised the latter.
[21] By choosing to proceed with a private sale outside the reference process, that is exactly what Greenbanktree did. It cannot now seek to invoke the process of the court when it is convenient, and then jettison that process when it is inconvenient, and then seek to invoke it again when it is once again convenient.
[22] Accordingly, the appeal is dismissed with costs. As noted at the hearing, if the parties are unable to agree on quantum they may submit brief written submissions.
GOLDSTEIN, J.
Released: March 26, 2013
Coinamatic Canada Inc., Metcap, 2013 ONSC 1746
COURT FILE NO: CV-01-222743
DATE: 20130326
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Greenbanktree Power Corporation
- and -
Coinamatic Canada Inc., 200 Dufferin Street Holdings Inc., General Electric Capital Canada Inc., 450 Winona Drive Holdings Inc., MCAP Financial Corporation in Trust for British Columbia Investment Management Corporation, 1150 & 1200 Kingston Road holdings Inc., 120 Raglan Avenue Holdings Inc., Metcap Living Management Inc., Metro-Matic Services Limited
JUDGMENT
GOLDSTEIN J.
Released: March 26, 2013