SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Albert Giglio, Audubon Transport Limited and Alcar Holdings Limited, Plaintiffs

AND:

Victor Peters, Wilfred Goldlust, Frank Lecce, Universal Disposal Services Limited, Vesdar Investments Limited, Essential Holdings Limited, Ontario Material Recycling Centre Inc., Universal Environmental Enterprises Inc., 170 Clairville Properties Limited and Tory, Tory, Deslauriers & Binnington, Defendants

AND BETWEEN:

Victor Peters, Universal Disposal Services Limited, Vesdar Investments Limited, Essential Holdings Limited, Ontario Material Recycling Centre Inc., Universal Environmental Enterprises Inc. and 170 Clairville Properties Limited, Plaintiffs by Counterclaim

AND:

Albert Giglio, Audubon Transport Limited, Alcar Holdings Limited, Nick Giglio, Carla Giglio, Hytec Recycling and Waste Systems Inc., Preferred Recycling Inc., Cam Tenaglia and Giglio’s Fruit and Garden Centre Limited, Defendants by Counterclaim

BEFORE: D. M. Brown J.

COUNSEL:
T. O’Sullivan, T. Wynne and D. Naymark, for the Moving Party, Victor Peters, Defendant and Plaintiff by Counterclaim

A. Esterbauer and C. Westlake, for the Responding Non-Party, Eddy J. Battiston

HEARD: June 10, 11, 12, 13 and 17, and July 11, 2013

REASONS FOR DECISION

I. RULE 57.07 MOTION TO IMPOSE THE COSTS OF AN ACTION ON A PARTY’S COUNSEL

[1] In early 2006 the parties to this lawsuit entered into Minutes of Settlement under which the plaintiff, Albert Giglio, agreed to pay $150,000.00 in damages to the defendant and plaintiff by counterclaim, Victor Peters, and which stipulated that Giglio, and another defendant by counterclaim, Cam Tenaglia, would provide support to Peters for a motion under Rule 57.07 of the Rules of Civil Procedure to recover his costs of the proceeding against the former litigation counsel for Giglio and Tenaglia, Mr. Eddy J. Battiston. Peters eventually initiated that Rule 57.07 motion in May, 2008 (the “Peters Motion”).

[2] Battiston moved to strike out or stay the Peters Motion and to declare the claim against him statute barred by the Limitations Act, 2002. Morawetz J. dismissed that motion on December 15, 2008 and held that the Peters Motion was not time-barred nor an abuse of process. The Court of Appeal dismissed an appeal from that decision by reasons dated September 25, 2009.[^1] Pursuant to further orders of this Court, the Peters Motion ultimately was heard by way of a trial of an issue. Peters sought to recover $158,271.76 in costs from Battiston.

[3] For the reasons set out below, I dismiss the Peters Motion.

II. AN OVERVIEW OF THE HISTORY OF THIS PROCEEDING

[4] In 1992 Victor Peters and Albert Giglio together went into the waste disposal business through a company called Universal Environmental Enterprises Inc. (“Universal”). At the time Peters was a tax lawyer at the Torys law firm; Giglio was a veteran of the waste disposal business.

[5] Pursuant to a December 4, 1995 letter agreement (the “1995 Agreement”) Peters bought out Giglio's shareholdings in Universal. The 1995 Agreement contained a non-competition covenant under which Giglio agreed to refrain from engaging in the waste disposal business for a period of five years. Under the 1995 Agreement Peters was to pay the purchase price to Giglio in several tranches.

[6] Peters did not pay Giglio the purchase price tranche which became due on January 1, 1997. Discussions ensued. Peters told Giglio that he had obtained information that Giglio had gone back into the waste disposal business in breach of his non-compete. Giglio hired a litigation lawyer, Eddie Battiston, to send Peters a demand letter requiring payment of the $80,000 installment. No payment resulted.

[7] Battiston had been called to the Bar in 1976 and was the founding partner of Battiston & Associates. His practice focused on civil litigation.

[8] On May 30, 1997, Battiston issued a Notice of Application on behalf of Giglio and his companies, Audubon Transport Limited and Alcar Holdings Holdings Limited, in which the applicants made two main claims. First, Giglio sought payment from Peters and Universal of the balance of the purchase price due under the 1995 Agreement. Second, Giglio made numerous allegations that Peters had breached fiduciary duties owed by him to Giglio during the course of their past dealings in the waste disposal business.

[9] The application was converted into an action, and a Statement of Claim dated July 31, 1997 was served. Peters defended the action in August, 1997. He denied owing Giglio the January 1, 1997 payment on the basis that he enjoyed set-offs against that amount as a result of payments which he had made to third parties, he denied Giglio’s allegations of breach of fiduciary duty and oppression, and Peters counterclaimed for $500,000 alleging that Giglio had breached the non-competition clause in the 1995 Agreement by participating in a waste business with Cam Tenaglia called Preferred Recycling Inc. Peters and the other Plaintiffs by Counterclaim pleaded that:

Giglio has a financial interest in … Preferred … as well as a business relationship with those companies and Tenaglia, all of which involve the waste business.

and,

Giglio carried on business within a radius of 50 kilometres of the Greater Toronto Area involving the transport of non-hazardous solid waste materials and/or the recycling of fibre-based materials with the individuals and [Preferred]…

The Peters Plaintiffs by Counterclaim sought damages in accordance with the liquidated damages provisions in the 1995 Agreement.

[10] In their August 20, 1997 Reply and Statement of Defence to Counterclaim the defendants by counterclaim, which included Giglio and Tenaglia, denied the allegations that Giglio had a financial interest in Preferred or was involved in the waste disposal business with Tenaglia. Battiston was the solicitor of record for Giglio, Tengalia and the other defendants by counterclaim.

[11] The lawsuit proceeded through productions and examinations for discovery. Then, in 2000 and 2001, several major events occurred. First, Tenaglia changed lawyers and received quite a different assessment of his litigation position from his new lawyer than Battiston had given him. Second, as a result of the November, 2001 pretrial conference before Farley, J., Battiston ceased to represent Giglio on the basis of a potential conflict of interest. The action continued, in a desultory manner, until early 2006 when Peters settled with Giglio and Tenaglia. Giglio agreed to pay Peters $150,000 "for damages". Under the terms of the settlement agreement, Giglio and Tenaglia agreed to provide Peters with affidavits in support of the motion Peters wished to bring against Battiston seeking payment of his costs by personally by Battiston.

[12] Peters did not launch his Rule 57.07 motion against Battiston until two years later, on May 29, 2008 - alacrity of purpose was not a defining characteristic of any of the litigation involving these parties. The Court directed that the motion proceed by way of the trial of issues in light of the credibility disputes involved, and the matter came on for trial before me on December 10, 2012. That hearing date was vacated because Battiston was recovering from serious heart surgery. The trial ultimately was conducted in June, 2013.

(continues verbatim in the same structure)

Date: January 6, 2014

D. M. Brown J.

[^1]: 2009 ONCA 681