ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-15-049-00
DATE: 2015 Sept 15

BETWEEN:

Rebel Scrap Metal Inc. Parts-A-Plenty Inc. and 816 Goodyear Road Inc.

Plaintiff/Respondent

– and –

The Corporation of the Township of Stone Mills

Defendant/Moving Party

M. Panacci, for the Plaintiff/Respondent on Motion

S. vanHelden, for the Defendant/Moving Party

HEARD: September 11, 2015 at Kingston

TRANMER J.

MOTION FOR SUMMARY JUDGMENT

BACKGROUND

[1] The factual background to the litigation between the parties occurred in March through May of 2011. It involved the plaintiffs before me attempting to open and operate a salvage business in the Township. The facts are set out in the decision dated September 24, 2012 of Mr. Justice Leroy.

[2] The allegations by the plaintiffs against the defendant in the present action were made in the proceedings before Justice Leroy. He makes specific reference to them, for example “The Respondents’ position is… the Applicant’s engagement with the Respondents and enactment of the ICB was done in bad faith… (para. 3); “What part, if any, does the Township clerk's comment to Mr. Sinclair at the end of March 2011 that they were “good to go”…”, A heading in his decision; “the Respondents had not framed a bad faith cross claim at the time of hearing” (para. 30); “it is impossible to know, based on the affidavit material, whether there may be an issue requiring a trial involving Respondents’ allegations of municipalities bad faith. The allegations were made. There is no direct evidence on the issue. The court is not about to speculate.” (para. 33); “the Respondents bear the burden of proof in showing bad faith” (para. 35); “Nothing written here is intended to prejudice the respondent should they choose to pursue remedies against the Township and individuals involved in bad-faith dealings. I eschew adjudication on those issues”… In the circumstances, bad-faith dealings constitute a separate cause of action collateral to the core issues.” (para. 37).

[3] It was open to the plaintiffs in the present action to have brought a cross application based on the same factual background as in that Application. Indeed, Justice Leroy did not grant their claim that such issues should be the subject of a trial.

[4] The Ontario Court of Appeal dismissed an appeal from Justice Leroy's decision on March 21, 2013.

[5] On May 17, 2013, the action which is the subject of the proceedings before me was commenced by the Plaintiffs, through legal counsel, with the issuance of the Statement of Claim. The claims are based on the same factual background. The claims allege bad faith, misrepresentation, fraud and breach of fiduciary obligations, as well seek an order quashing the same municipal bylaw.

[6] On July 17, 2013, the parties, including those involved in the initial Application, and those in the present proceedings, entered into and signed a “Mutual Full and Final Release”. It is agreed before me that the plaintiffs in the present proceedings, as well as Todd Sinclair, a principal in those plaintiffs, received consideration therefor, which included paying a reduced sum on account of the costs awarded against them in the Application proceedings. The plaintiff and Todd Sinclair released the Township “…of and from all…actions, proceedings, causes of actions, claims and demands whatsoever, up to and including the present time…and including any and all matters which former could've form the subject matter of the said action, or a similar action including any claim of bad faith regarding the approval of the salvage yard…”.

ISSUE

[7] The issue before me is whether the Mutual Full and Final Release is a bar to the present action.

DEFENDANT'S POSITION

[8] The defendant's position is that the Release is a complete bar to the present action, and therefore, summary judgment should be granted dismissing the action.

PLAINTIFFS’ POSITION

[9] Todd Sinclair confirms in his responding affidavit that he signed the Release. He swore that at the time he signed the Release, he believed the plaintiffs had causes of action against the Township for, among other things, bad-faith, as set out in the Statement of Claim dated May 17, 2013. He swore that he signed the Release because the Township had the majority, if not all, of the legal and political power, with respect to the matter, including during his discussions with them with respect to the signing of the Release. He swore that the plaintiffs and he were in a much weaker bargaining and power position. “I was personally fearful that I would lose my home and face personal ruin and bankruptcy if I did not settle with the Township and sign the…Release.” “I was influenced by the Township to sign the … Release because I was in the weaker position, financially and otherwise… I had no choice but to accept its offer. If I did not, I did verily believe at that time and I still do so that I would've faced personal ruin and bankruptcy.”

[10] Counsel for the plaintiffs argues that the Release is not a bar to the present action because of the unequal bargaining power of the parties, undue influence by the Township and intimidation by the Township.

ANALYSIS

[11] On the record before me, there is absolutely no evidence of undue influence or intimidation on the part of the Township which compelled the plaintiffs to enter into the Release.

[12] With respect to the allegation of unequal bargaining power, I note that the plaintiffs were represented by counsel throughout the litigation, including the preparing and issuing the Statement of Claim, which is before me, issued just two months prior to the execution of the Release. I reject that submission. Mr. Sinclair’s evidence does not support such an assertion.

[13] Plaintiffs’ counsel argues that the Township manipulated the terms of engagement surrounding the dispute by bringing the initial Application with its limited scope. However, there were other avenues of relief open to the plaintiffs through municipal law remedies and damage claims. There is no evidence on the record before me of any inequality of bargaining power at all, let alone sufficient to render the Release of no force and effect.

[14] The clear intention of the Mutual Full and Final Release is to settle all past, present and future claims arising from the plaintiffs’ desire to set up and operate the salvage yard business in the Township. The plaintiffs do not allege with respect to the Release misrepresentation, fraud, mistake of fact, lack the capacity, lack of independent legal advice or other suitable advice or non est factum. The plaintiffs were experienced in business and in retaining legal representation. The affidavit evidence of Todd Sinclair does not bear out duress capable of impugning the validity of the Release. He gave no evidence in his Affidavit as to his assets, wealth or impecuniosity as at the date he signed the Release. On the evidence before me, he received a $20,000 discount on the costs payable by him and the other plaintiffs. The evidence on the record before the Court of Appeal was that he had assets in the order of $439,000. The claim before me was for damages in the amount of $5 million. This is a substantial undertaking and far riskier than reducing his known jeopardy by $20,000.

[15] The evidence of the plaintiffs does not meet the test for unconscionability, as set out in the authorities cited to me, including Marjadsingh v. Walia 2012 ONSC 6659. Sequin v. Chaput 2010 ONSC 1275 and Taske v. Prairiefyre 2004 66295 (ONSC). Indeed counsel for the plaintiffs submitted that they were not asserting unconscionability in regard to the Release.

[16] On the record before me, the Mutual Full and Final Release is valid, of full force and effect and a bar to the present litigation. This is a case where there is no genuine issue for trial on that point. Accordingly, summary judgment is granted in favour of the defendant, and the claim is dismissed.

[17] If the parties are unable to agree to costs, the defendant may make written submissions limited to two pages and the costs outline within five days of receipt of this endorsement. The plaintiff shall have five days to respond in like fashion.

Honourable Mr. Justice Gary W. Tranmer

Released: September 15, 2015

COURT FILE NO.: CV-15-049-00
DATE: 2015 Sep 15

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Rebel Scrap Metal Inc. Parts-A-Plenty Inc. and 816 Goodyear Road Inc.

Plaintiff/Respondent

– and –

The Corporation of the Township of Stone Mills

Defendant/Moving Party

MOTION FOR SUMMARY JUDGMENT

Tranmer J.

Released: September 15, 2015