917488 Ontario Inc. v. The Town of Gore Bay, 2015 ONSC 2324
Citation: 917488 Ontario Inc. v. The Town of Gore Bay, 2015 ONSC 2324 Court File No.: C14-0009 Date: 20150410 Superior Court of Justice - Ontario
Re: 917488 Ontario Inc, Applicant And: The Corporation of the Municipality of the Town of Gore Bay, Respondent
Before: The Honourable Mr. Justice R. Dan Cornell
Counsel: Applicant, self-represented Gerard E. McAndrew, for the Respondent
Heard: April 7, 2015
ENDORSEMENT
[1] On April 7, 2015, I heard a motion brought by 917488 Ontario Inc. seeking to have the law firm of Weaver Simmons removed as solicitors of record for The Corporation of the Municipality of the Town of Gore Bay. At the conclusion of the hearing, I indicated that the motion was to be dismissed with costs with reasons to follow. I now take this opportunity to deliver such reasons.
Introduction
[2] The nature of this proceeding is uncertain. It was originally brought by Gordon’s Lodge as an originating notice of motion. For this reason, it is not possible to determine whether the moving party is a plaintiff, applicant or some such other party. For the limited purpose of this endorsement, I will refer to 917488 Ontario Inc. as the applicant and The Town of Gore Bay as the respondent.
[3] The applicant has brought a motion seeking enforcement of orders made by the Ontario Municipal Board (“OMB”) in 1975 and 1980. In addition, the applicant has made very extensive claims against the respondent in the originating notice of motion and various subsequent notices of motion that have been filed. The present notice of motion contains the following claims:
An Order removing the Firm Weaver Simmons, G. McAndrew as Solicitor of Record for the Respondent.
An Order dispensing with any and all requirements and/or Rules in relationship to the Corporation of the Town of Gore Bay as may be appropriate;
An Order reporting the Firm Weaver Simmons, to the Law Society of Upper Canada for conflict of interest (rule 2.04). . Rule 2; Rules of Professional Conduct – Relationship to Clients When Client an Organization (1.1).
An Order requiring the Firm Weaver Simmons to return all Legal Costs for the Company known as Gordon’s Lodge (owned by 917488 Ontario Inc.) for the period of 1997-2012 in the amount of $350,000 CDN without delay.
An Order requiring the Firm Weaver Simmons to payout and discharge the Mortgages on the Lands known as Gordon’s Lodge (owned by 917488 Ontario Inc.) without delay.
An Order requiring the Firm Weaver Simmons to return all Mortgage Lender and Mortgage Broker Fees incurred on Gordon’s Lodge (owned by 917488 Ontario Inc.) in the amount of $300,000 CDN without delay.
An Order for direction for Gordon’s Lodge (917488 Ontario Inc.) to seek redress on behalf of 917488 Ontario Inc. dating as far back as 1998 by their Representative for the received revenues by Weaver Simmons to Gordon’s Lodge between the years of 1998-2007 in the amount of estimated of $5,500,000 CDN, interception of proceeds of crime for a company known as Gordon’s Lodge (owned by 917488 Ontario Inc.) an active business.
An Order for costs as may be appropriate; Such further and other grounds as the Applicant may advise and this Honourable Court deems fit.
[4] The grounds for this relief as stated in the notice of motion are confusing.
[5] A host of preliminary issues are presented by the various claims which have been advanced by the applicant. Some of these preliminary issues were addressed in an endorsement of R.D. Gordon J. dated August 8, 2014. These issues include:
(1) Is there an originating proceeding from which this motion derives?
(2) Is the plaintiff “Gordon’s Lodge” a legal entity capable of bringing this motion?
(3) Is Laura Pinkerton to be permitted to represent the applicant corporation?
(4) Is the firm of Weaver Simmons who act for the Town of Gore Bay in a position of conflict?
(1) Is there an originating proceeding from which this motion derives?
[6] This proceeding, if I can use that term as loosely as possible, had its genesis in orders of the OMB that were made in 1975 and 1980. It appears that the OMB made a further order dated November 12, 1981. If an order of the OMB is filed with the Superior Court of Justice, it becomes enforceable as a judgment or order of such court pursuant to section 86(1) of the Ontario Municipal Board Act. If the true intent of the moving party is to enforce the OMB order(s), then presumably enforcement would be conducted in the usual manner by way of garnishment, writ of seizure and sale or one of the other remedies available to enforce a judgment or court order.
[7] Apart from this, various other claims are presented by the applicant including damages in excess of $2,750,000, repayment of a mortgage broker’s fee in an amount of $300,000 and conveyance of unopened shoreline road allowance upon which some four or five cottages or cabins are located. These claims would ordinarily be presented by way of an action.
[8] Rule 14 provides that a proceeding can be commenced by way of action or, if permitted, by way of application. Counsel for the respondent raised a preliminary concern about the applicant’s ability to pursue the relief that the applicant seeks within this “proceeding”. It was therefore agreed that the respondent would bring a motion to address this issue within 30 days of the release of this endorsement.
(2) Is the plaintiff “Gordon’s Lodge” a legal entity capable of bringing this motion?
[9] It was recognized that “Gordon’s Lodge” is not a legal entity. The moving party has attempted to address this concern by filing new motion material which names 917488 Ontario Inc. as the applicant.
[10] At the time that the motion was argued, only photocopies of incomplete title abstracts were provided with the result that I was unable to determine whether or not 917488 Ontario Inc. has ever owned a registered interest in the property in question. For this reason, I will require counsel for the respondent to provide me with certified copies of all title abstracts for land owned by any of the Gordon’s Lodge entities from 1975 to date. These title abstracts are to be provided to me within ten days of the release of this endorsement.
(3) Is Laura Pinkerton to be permitted to represent the applicant corporation?
[11] The material filed by the moving party indicates that Laura Pinkerton and Andrew Pinkerton own all of the shares and are the sole officers and directors of the various operating and holding companies that they allege own Gordon’s Lodge.
[12] As currently framed, 917488 Ontario Inc. is the corporate entity that is seeking the requested relief. Counsel for the Town of Gore Bay had quite properly indicated that a corporation shall be represented by a lawyer, except with leave of the court. At the time that the motion was argued, counsel for the Town of Gore Bay indicated that he was consenting to such leave being granted. I hereby grant leave to Laura Pinkerton to represent 917488 Ontario. Inc.
(4) Is the firm of Weaver Simmons who act for the Town of Gore Bay in a position of conflict?
[13] By way of notice of motion dated August 29, 2014, the applicant seeks, among other things, to have the firm of Weaver Simmons removed as counsel for the respondent.
[14] The argument for the removal of Weaver Simmons as counsel rested upon an allegation of conflict of interest. The applicant asserted that this conflict existed because Weaver Simmons had represented the applicant or one of her corporations during the time period in question. In order to fully understand the applicant’s position, some background information is required.
[15] People by the name of Rusk previously owned Gordon’s Lodge. It appears that they transferred the property to Gordon’s of Manitoulin Limited in or about 1982. In or about 1996, the Pinkertons entered into a share purchase arrangement whereby they acquired all of the Rusks’ shares in such corporation. As security for the purchase price, three mortgages were provided to the Rusks.
[16] Default under the mortgages occurred. On January 29, 1998, a final order of foreclosure was registered in favour of Robert and Virginia Rusk.
[17] It appears that there was a Planning Act problem with one or more of the mortgages provided by way of security with the result that a correcting order was registered on January 31, 2001.
[18] Robert and Virginia Rusk had become the owners of Gordon’s Lodge by way of the foreclosure proceedings. In September of 2001, they transferred the property to Gordon’s Lodge (1998) Limited. The information provided to me indicates that the Rusks operated the business until 2007. At that point in time, it appears that the Pinkertons resumed possession and operation of Gordon’s Lodge, but it is not clear to me how that was accomplished.
[19] To the extent that I could follow the argument advanced as to the existence of a conflict of interest, it appeared to me to be based upon the fact that having recovered Gordon’s Lodge in or about 2007, the Pinkertons were entitled to assert the position that they had an uninterrupted ownership interest since 1996 despite the intervention of the successful foreclosure proceedings.
[20] On March 29, 2001, Weaver, Simmons delivered a 37 page account. No client is named, but it is directed to “c/o Gordon’s Lodge, 1 Water Street, P.O. Box 324 Gore Bay ON P0P 1H0”. Beyond this, it states “re: Rusk v. Gordon’s Lodge/Pinkerton – our file no. 21057”. There is one entry on page 14 which indicates that there was a telephone attendance with Laura Pinkerton on June 10, 1999. The applicant points to this as confirmation that Weaver Simmons was acting for her at that time.
[21] Beyond this, the applicant refers to the trust statement contained on page 37. This trust statement shows that three payments were received. These include $20,000 and $5,445.02 received from Gordon’s Lodge and $15,000 received from LPIC. The sum of $5,445.02 was disbursed to Revenue Canada. The sum of $35,000 was disbursed to Fred Fortier. Mr. Fortier was a lawyer acting for the Royal Bank of Canada.
[22] In response, Weaver Simmons has filed an affidavit by Bryan Searle. This affidavit indicates that Weaver Simmons had been retained by Robert Rusk and Virginia Rusk in order to enforce the mortgage security that they held. Mr. Searle indicates that at no time did he or Weaver Simmons have a retainer or act for Laura Pinkerton or 917488 Ontario Inc.
[23] Additional affidavit material was filed on behalf of Weaver Simmons indicating that enquiries into their accounting records and consultations with senior partners indicate that at no point in time has that firm represented Laura Pinkerton or 917488 Ontario Inc. To the contrary, such records indicate that Weaver Simmons has acted against the aforementioned parties on previous occasions.
[24] I find as a fact that at no point during the relevant period of time have Laura Pinkerton, Andrew Pinkerton, 917488 Ontario Inc. or any other corporation owned by the Pinkertons had a retainer agreement, retainer letter or any other form of retainer with Weaver Simmons. I further find that there is a total absence of correspondence or other form of documentation that would even create the suggestion that a solicitor-client relationship may have existed between such parties and Weaver Simmons.
[25] I find as a fact that Weaver Simmons was retained by the Rusks and successfully completed the foreclosure proceedings on their behalf. I further find as a fact that the services rendered by Weaver Simmons pursuant to the account dated March 29, 2001, were on behalf of the Rusks who had recovered possession of Gordon’s Lodge at that time.
[26] When all is said and done, it is clear that from the time such firm was retained to bring the foreclosure proceedings, through and until the rendering of the account dated March 29, 2001, Weaver Simmons was acting for the Rusks. The Rusks had retained Weaver Simmons to collect the debts owing by the Pinkertons and their associated corporations including the foreclosure proceedings. The Pinkertons and their associated corporations have never retained Weaver Simmons for any purpose.
Conclusion
[27] There is nothing in the material before me that suggests that Weaver Simmons is in a conflict of interest position. Accordingly, the applicant’s motion to have Weaver Simmons removed as solicitors of record for the Town of Gore Bay is dismissed.
[28] I make the following Order.
The respondent, Town of Gore Bay, shall deliver its motion material to address the form and substance of the “proceeding” initiated by 917488 Ontario Inc. within 30 days.
Weaver Simmons shall file a certified copy of titled abstract for the land that comprises Gordon’s Lodge.
Leave is hereby granted for Laura Pinkerton to represent 917488 Ontario Inc.
The applicant’s motion to have Weaver Simmons removed as solicitors of record for the Town of Gore Bay be and the same is hereby dismissed with costs.
Costs
[29] The Town of Gore Bay is entitled to the costs of this motion. The Town of Gore Bay shall have 14 days to deliver their costs submissions, such submissions not to exceed two pages plus supporting documentation. The applicant shall have 14 days after receiving such material to deliver any responding material, such responding material not to exceed two pages. Weaver Simmons shall have seven days from the receipt of such responding material, if any, to deliver any reply submissions, such submissions not to exceed one page.
[30] If such cost submissions are not received within these timeframes, it shall be assumed that the parties have resolved the issue of costs.
The Honourable Mr. Justice R. Dan Cornell
Date: April 10, 2015