COURT FILE NO.: CV-12-2346-SR
DATE: 20150709
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: LONG BRANCH FOUNDRY INC. – and – ALUMEN INC.
BEFORE: André J.
COUNSEL: Amrita Mann, for the Plaintiff (Defendant to the Counterclaim)
John Lockhart, for the Defendant (Plaintiff by Counterclaim)
HEARD: June 29, 2015
ENDORSEMENT
[1] The defendant, Alumen Inc. (“Alumen”), brings a motion to amend its pleadings. This motion is unopposed however; the question of costs is outstanding.
[2] The plaintiff, Long Branch Foundry Inc. (“Foundry”) brings a motion for summary judgment on account of an outstanding debt which Alumen does not dispute yet has not paid. While not denying its debt to Foundry, Alumen maintains that it has a right of set-off against the amount it owes to Foundry. Alumen has also filed a counterclaim against Foundry for money allegedly owed to it by Foundry.
[3] I must therefore decide the following issues:
Should I grant Foundry’s motion for summary judgment?
Should any debt owed by Alumen to Foundry be set-off against any debt which Foundry owes to Alumen?
Should I award costs in these matters and, if so, to whom?
BACKGROUND FACTS
[4] Foundry is owned and operated by Luigi Soda and his wife, Christine Soda (“Christine”).
[5] Alumen is operated by Ronald Bardier (“Ron”) and his wife Christina Bardier (“Christina”).
[6] Between June 30, 2011, and January 24, 2012, Foundry supplied aluminum products to Alumen in accordance with an agreement.
[7] Foundry sent a number of invoices to Alumen with respect to the materials it had provided to Alumen.
[8] Foundry has repeatedly asked Alumen for payment of the amounts contained in the invoices.
[9] Alumen has refused to pay the approximately $29,442.25 it owes to Foundry.
[10] At no time did Alumen question or take issue with the quality of the products delivered to Alumen.
[11] Ronald Bardier deposed that he entered into a joint venture with Christine Soda to supply the City of Hamilton (“the City”) with aluminum light fixtures, steel and concrete poles and design work. Foundry was awarded the contract by the City but failed to share any of the profits from this contract with Alumen. As a result, Foundry owes Alumen approximately $82,713.28 plus HST.
[12] Foundry denies that any such agreement between the parties existed and denies that it owes Alumen any money.
LEGAL PRINCIPLES
[13] Rule 20.04(2) of the Rules of Civil Procedure (“the Rules”) indicates that:
20.04(2) the court shall grant summary judgment if,
a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
[14] Rule 20.04(2.1) provides that:
In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties, and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at trial:
weighing the evidence
evaluating the credibility of a deponent
drawing any reasonable inference from the evidence.
[15] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merit of a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. Hryniak v. Maudlin, 2014 SCC 7 at para. 49.
ANALYSIS
[16] Alumen does not dispute that it owes Foundry for the aluminum materials supplied to it between June 30, 2011, and January 24, 2012. Neither does it dispute that the materials supplied were free from all defects.
[17] Indeed, counsel for Alumen conceded that, absent his claim for set-off and counterclaim, there is no genuine issue for trial and I would therefore be able to render summary judgment in this matter.
ISSUE NO. 2 – Should Alumen’s claim for a right of set-off against the debt it owes to Foundry be granted?
[18] In its “Statement of Defence and Counterclaim”, (“Statement of Defence”) Alumen pleads in paragraph 15 that:
In March 2012, Ron met with Christine and reached an agreement with Christine that the money that Long Branch owed Alumen would be set-off against the money that Alumen owed Long Branch and both debts would be reduced to zero.
[19] Alumen also pleads in paragraph 17 of its “Statement of Defence” that:
In the alternative, the Defendant pleads the Plaintiff owes it half of the profits from the Hamilton contract or the sum of $82,713.28 before HST.
[20] Alumen asserts that its claim is both a set-off and/or a counterclaim. If the former, then paragraph 15 of Alumen’s “Statement of Defence” constitutes a defence and would be a genuine issue for trial. Erie Meat Products Ltd. v. Export Packers Co. Ltd., 1980 CanLII 1920 (ON CA), [1980] O.J. No. 3901, 39 O.R. (2d) 97 at paras. 5-8. If the latter, I would be required to consider the following options:
(1) Whether or not judgment should be granted in favour of Foundry.
(2) Whether I should preserve Alumen’s right to continue with its counterclaim?
(3) Whether the execution of Foundry’s judgment, if granted, should be stayed; and
(4) Whether there should be a trial of both the claim and counterclaim with no order made against either party.
Erie Meat Products Ltd. v. Export Packers Co. Ltd., supra
[21] Foundry provided materials to Alumen between June 2011 and January 2012. Alumen has pleaded that in March 2012, a co-owner of Foundry made an agreement with the owner of Alumen that the money Alumen owed to Foundry and that owed by the latter to the former would be set-off.
[22] Alumen relies on s. 111(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 as the basis for its claim for a legal set-off against Foundry.
[23] Pursuant to Canadian Imperial Bank of Commerce v. Tucker Industries Inc.; Benyon Co., Claimant (1983), 1983 CanLII 302 (BC CA), 149 D.L.R. (3d) 172 at para. 6, and Telford v. Holt, 1987 CanLII 18 (SCC), 2 S.C.R. 193, 41 D.L.R. (4th) 385 at paras. 25-27 (S.C.C.), the conditions precedent for a legal set-off are as follows:
(1) Both obligations must be debts.
(2) Both debts must be mutual cross obligations.
(3) “Mutual debts” means debts due from either party to the other for liquidated sums or money demands which can be ascertained with certainty at the time of pleading.
[24] In my view, the application of s. 111(1) of the Courts of Justice Act and the above noted cases suggests, at the very minimum, that Alumen is asserting a right of legal set-off. To that extent, its assertion of an agreement between Christine Soda and Ron Bardier constitutes a genuine issue for trial within the ambit of Rule 20.04(2)(a).
[25] Pursuant to Rule 20.04(2.1), I may weigh the evidence, evaluate the credibility of the deponents and draw any reasonable inference from the evidence.
[26] In my view however, weighing this evidence will not enable me to reach a fair and just determination on the merits of Foundry’s motion for summary judgment. Given the conflicting evidence regarding an agreement concerning set-off, it is in the interests of justice that both Ron Bardier and Christine Soda testify under oath and be cross-examined on the issue. The affidavit evidence does not enable me to fully weigh the evidence of these witnesses or draw any reasonable inferences from it.
[27] Accordingly, I decline to grant Foundry’s motion for summary judgment.
[28] I similarly decline to grant Alumen’s counterclaim for the sum of $64,023.75 including HST, which is purported to represent half the profit realized by Foundry on its contract with the City of Hamilton. The counterclaim is based on an alleged breach of contract to which Foundry has not been given an opportunity to file a Reply to the Counterclaim.
CONCLUSION
[29] The plaintiff’s motion for summary judgment is dismissed.
[30] The defendant may proceed with its counterclaim, subject to the merits of the claim and the limitation period set out in the Limitations Act.
COSTS
[31] Each party will bear its own costs.
[32] With respect to the defendant’s motion to amend its pleadings, the defendant will pay to the plaintiff costs fixed in the amount of $600 inclusive, within sixty (60) days of today’s date.
André J.
DATE: July 9, 2015
COURT FILE NO.: CV-12-2346-SR DATE: 20150708
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: LONG BRANCH FOUNDRY INC. – and – ALUMEN INC.
BEFORE: André J.
COUNSEL: Amrita Mann, for the Plaintiff (Defendant to the Counterclaim)
John Lockhart, for the Defendant (Plaintiff by Counterclaim)
ENDORSEMENT
André J.
DATE: July 8, 2015