Superior Court of Justice - Ontario

CITATION: Sutton v. Ronald Balinsky, 2015 ONSC 3774

COURT FILE NO.: 247/15

DATE: 20150611

RE: DEBORAH SUTTON, Plaintiff

AND: RONALD BALINSKY, ALLAN LIPMAN, ALAN RUDOLPH, LIPMAN, ZENER & WAXMAN LLP and BDO CANADA LLP, Defendants

BEFORE: H. Sachs J.

COUNSEL: Alan J. Lenczner, Q.C., for the Moving Party/Non-Party, Alain Sutton Milton Davis, for the Plaintiff, Responding Party J. Gregory Richards, for the Defendants, Rudolph and BDO Canada LLP

HEARD at Toronto: June 10, 2015

ENDORSEMENT

[1] On this motion, the Non-Party, Alain Sutton, seeks leave to appeal the dismissal of his appeal by Faieta J. (the “Motion Judge”) from the order of Master Glustein. The Master ordered the Defendants, Mr. Rudolph and BDO Canada, to produce certain financial records of Mr. Sutton that post-dated the date of the marriage contract giving rise to the action against the Defendants.

[2] Mr. Sutton argues that leave should be granted under both parts of the test for leave set out at Rule 62.02(4). First, he states that the decision is in conflict with other decisions and that it is desirable that leave be granted. Second, he submits that there is good reason to doubt the correctness of the Motion Judge’s order and that the proposed appeal raises matters of such importance that leave should be granted.

[3] With respect to the question of the conflicting decision requirement, Mr. Sutton argues that the appeal judge’s decision is in conflict with two lines of established authority – the first relating to how damages are to be assessed when a breach of fiduciary duty is alleged; and the second dealing with the use of hindsight when it comes to establishing the value of a business.

[4] In his decision, the Motion Judge relied on excerpts from two cases – one from the Supreme Court of Canada (Canson Enterprises Ltd. v. Boughton & Co., 1991 CanLII 52 (SCC), [1991] 3 S.C.R. 534, at para. 24) and one from the Court of Appeal (Authorson (Litigation Administrator of) v. Canada (Attorney General) (2007), 2007 ONCA 501, 86 O.R.(3d) 321 (C.A.), at para. 160) for the proposition that “losses for breach of fiduciary duty may be assessed at the time of trial with the full benefit of hindsight”. According to Mr. Sutton, the Motion Judge “misread and misapplied” these two cases.

[5] It is true that in the two cases in question, the courts did not allow the plaintiffs to claim all of the restitutionary damages they were claiming based on what had occurred since the breach of fiduciary duty they were relying on to establish their claims. However, this does not mean that the Plaintiff will not be awarded the restitutionary damages she is seeking. The facts in the two cases in question were very different than the facts in the case at bar. It also does not mean that the cases in question do not support the proposition that the Motion Judge relied on in his decision.

[6] It is important to note that in order to qualify under the conflicting decision branch of the test, the conflict must be a conflict in the legal principles, not a conflict arising out of the fact that one judge exercised his or her discretion in a different manner from other judges in different circumstances.

[7] In this case, it cannot be said that the Motion Judge’s decision “conflicts” with the decision of the Supreme Court in Cranson or the decision of the Court of Appeal in Authorson. Even if it did, it is not desirable that leave be granted to have the matter decided by the Divisional Court. The law in this area is not unsettled. Both the Supreme Court and the Court of Appeal have written on and discussed the matter.

[8] I also do not accept that the Motion Judge’s decision conflicts with other decisions on the use of hindsight in valuing a business. In his decision, the Motion Judge quoted and applied the relevant principle on this question that emerges from the Court of Appeal decision in Debora v. Debora, (2006) 2006 CanLII 40663 (ON CA), 83 O.R.(3d) 81; namely, that one can use hindsight to assess “the fundamental assumptions underpinning the opinions expressed by the [experts].”

[9] Again, there is no issue of principle that emerges from the motion judge’s decision that makes it desirable for leave to be granted so that the Divisional Court can pronounce on a matter that the Court of Appeal has already dealt with.

[10] With respect to the second branch of the test under Rule 62.02(4), even if the correctness of the Motion Judge’s decision was open to very serious debate (which I do not accept), Mr. Sutton has not met his onus of establishing that the proposed appeal raises matters of such importance that the leave should be granted. In the end, the appeal arises out of a production order. The issues raised by the appeal are not issues that are of significance to the development of the law or the administration of justice (Greslik v. Ontario Legal Aid Plan (1988), 1988 CanLII 4842 (ON SCDC), 65 O.R. (2d) 110 (Div. Ct.)).

[11] For these reasons, the motion for leave to appeal is dismissed. As per the agreement of the parties, the Plaintiff is entitled to her costs of this motion fixed in the amount of $5000.00.

[12] Mr. Sutton also made a request that I grant a stay of the Master’s order until such time as the decision on the Defendants’ summary judgment motion is released (the motion has been argued and the decision is under reserve). A similar request was made before the Motion Judge, which he denied. When the Motion Judge made his order, the summary judgment motion was being argued in 10 days. I do not find that the fact that the motion has now been argued is a sufficient reason to find that the Motion Judge’s decision on this point (which is entitled to deference) should be varied. For this reason, I decline the request for a stay.

H. SACHS J.

Date: 20150611