COURT FILE NO.: CV-13-476057
DATE: 20151104
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SHELDON KIDECKEL
Plaintiff
– and –
GLENBARRA RENEWABLE ENERGY SOLUTIONS INC. and GEMCO SOLAR INC., and FOVERE GLENBARRA ENERGY FUND I LTD.
Defendants
Gerald Sternberg and Sidney Silverman, for the Plaintiff
Shane E. Kazushner, for the Defendant Fovere Glenbarra Energy Fund I Ltd.
HEARD: July 7, 2015 and September 21, 2015
M. D. FAIETA j.
reasons FOR DECISION
INTRODUCTION
[1] The Defendant Fovere Glenbarra Energy Fund I Ltd. (“Fovere”) brings this motion for summary judgment to dismiss the claim brought by the Plaintiff for payment of commissions arising from introducing the defendants to the owners of three rooftop locations that were suitable for the installation of solar photovoltaic systems.
[2] The Defendants Glenbarra Renewable Energy Solutions Inc. and Gemco Solar Inc. (“Gemco”) merged some time ago. Gemco was in the business of installing solar photovoltaic systems as well as other types of systems. With the approval of the Ontario Power Authority, each of these solar photovoltaic systems will generate electricity and a substantial cash flow for many years.
[3] Fovere provided project financing to Gemco and others for the installation of these rooftop solar systems. The terms of these financing arrangements included an option for Fovere to acquire ownership of these projects.
[4] The Plaintiff brings this action for payment of commissions in the amount of $100,000.00 allegedly owing to him by the Defendants for his services of identifying and acquiring leases for three rooftop locations upon which rooftop solar systems were built by Gemco, financed by Fovere and now owned by Fovere.
[5] Gemco has not defended this action. It appears to be out of business.
[6] The Plaintiff submits that Fovere’s liability is based in contract and unjust enrichment. The Plaintiff also submits that Fovere and Gemco were partners on these three projects. For the reasons that follow, I find that the Plaintiff has not demonstrated a genuine issue requiring a trial involving Fovere and dismiss the claim against Fovere with costs.
ANALYSIS
[7] This motion for summary judgment is brought pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. When considering a motion for summary judgment, the following principles are applicable:
A court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.[^1] This will occur "...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".[^2]
In determining whether there is a genuine issue requiring a trial, a court shall consider the evidence submitted by the parties.[^3]
A court "...is entitled to assume that the parties have respectively advanced their best case and that the record contains all the evidence that the parties will present at trial...The onus is on the moving party to show that there is no genuine issue requiring a trial, but the responding party must present its best case or risk losing...".[^4]
A court may exercise any of the following powers for the purpose of determining whether there is a genuine issue requiring a trial, unless it is in the interest of justice for such powers to be exercised only at a trial.
Weigh the evidence.
Evaluate the credibility of a deponent.
Draw any reasonable inference from the evidence.[^5]
Order that oral evidence be presented by one or more parties for the purposes of exercising the above powers.[^6]
The use of the above discretionary powers "...will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole."[^7]
[8] On my own initiative this motion was adjourned on July 7, 2015 so that oral evidence could be received under Rule 20.04(2.2) of the Rules of Civil Procedure. This mini-trial was held on September 16, 2015. Three witnesses were called: (1) the Plaintiff; (2) Darryl Abbott, President of Fovere; and (3) Jean Micheal Aoun, President of Gemco.
BACKGROUND
[9] The plaintiff testified that the plaintiff met Darren Cooper, at that time President of Gemco, in November 2010. Gemco was looking for rooftops upon which to install solar photovoltaic systems and the plaintiff knew the owners of properties with potentially suitable locations that may be willing to lease their rooftop for such purpose. They discussed a commission arrangement. After that meeting the plaintiff made some inquiries with the principal of Westdale Properties.
[10] A few months, the plaintiff and Gemco signed an agreement dated February 16, 2011 whereby Gemco agreed to pay the plaintiff a commission for locating and securing rooftops for their solar panel systems. The agreement provided that the plaintiff was an independent contractor. A copy of the agreement was marked as Exhibit 2. The plaintiff states that this written agreement reflected an oral agreement that he had made with Darren Cooper and Greg Judd of Gemco in November 2010.
[11] The Plaintiff testified that all the allegations contained in his Claim are true.
[12] Paragraphs 6 and 8 of the Statement of Claim alleges that the defendants agreed to pay the plaintiff a commission of $125 per kW of electricity capable of being generated by the solar panels in accordance with the following schedule:
(a) Upon execution of a Memorandum of Understanding between one or more of the defendants and the landowner – 10% of the total commission;
(b) Upon the grant of the Feed in Tariff application – 5% of the total commission;
(c) Upon the Ontario Power Authority’s grant of the Notice to Proceed – 25% of the total commission;
(d) Upon the completion of the installation project by the one or more of the defendants – 60% of the total commission.
[13] The plaintiff testified that he identified and secured rooftop leases for the premises described below. Based on this formula the plaintiff alleges, at paragraphs 8 – 11 of his Statement of Claim, that:
(a) 1170 Birchmount Road, Toronto – a total of $62,500.00 is owed and the sums of $6,250.00 and $558.00 were paid, leaving a balance of $55,692.00 owing;
(b) 76 Miranda Avenue, Toronto – a total of $31,250.00 is owed and the sums of $3,750.00 and $279.00 were paid, leaving a balance of $27,221.00 owing;
(c) 1450 Castlefield Avenue, Toronto – a total of $31,250.00 is owed and the sums of $3,750.00 and $279.00 were paid, leaving a balance of $27,221.00 owing.
[14] After Mr. Cooper’s association with Gemco ended, the plaintiff dealt with Jean Aoun.
[15] Mr. Aoun sent the following email to the plaintiff on October 17, 2012:
As we agreed to, upon you obtaining the three signed leases from Westdale Properties before Wednesday, October 24, 2012, Gemco Solar will advance you $50,000 against commissions belonging to you.
[16] The plaintiff’s lawyer sent the following letter, dated February 7, 2012, to Mr. Aoun. The letter states in part that:
I have been retained by Mr. Sheldon Kideckel for independent legal advice with respect to services he has rendered to Gemco Solar. I have been advised that he was commissioned in November 2010 by Westdale Properties to enter into a contractual arrangement with Gemco Solar, in order to place solar panels on the three rooftops at 76 Miranda Avenue, 1450 Castlefield Avenue and 1166 Caledonia Road.
Mr. Kideckel has informed me that he was to receive an advance in the sum of $50,000.00 once the three leases were signed as per your email sent to him on October 17, 2012.
Mr. Kideckel needs to know forthwith whether all three leases have been signed …
[17] In response emails that were exchanged, Mr. Aoun sent the following email on February 8, 2013 to the plaintiff’s lawyer:
I am not continuing this conversation. I leave it up to Shelly [the plaintiff] to explain to you what he [has] and hasn’t done and based on what agreement and if you think we made a mistake somewhere, please let me know. Otherwise, I am not sure what there is to go through. You saw the email and the terms. You know Shelly was unable to get the leases signed. Therefore, he did not earn the $50,000.
[18] The plaintiff’s lawyer sent the following letter to Mr. Aoun at Gemco on February 12, 2013, which in part states:
… I have now received written and oral confirmation from Ryan Kimmel of Westdale Properties Inc., that the leases at Miranda and Castlefield with Gemco Solar Inc. have been duly executed and signed.
Mr. Kideckel is entitled to an advance forthwith as partial consideration for the services that have been rendered to Gemco Solar Inc. It would be unconscionable for you to withhold payment of at least two thirds, given the binding consideration and authenticity of these two leases. …
Should you chose not to cooperate in providing Mr. Kideckel of at least two thirds of the $50,000.00 advance owed to him at this time, we are determined to proceed immediately by initiating a statement of claim.
We fully intend to pursue this matter vehemently, and in so doing, we intend to advise Fovere Capital Management as to your conduct. …
[19] By email dated February 13, 2013 Mr. Aoun responded:
As you have seen from the documents and I highlighted to you, your client did not obtain the signed leases by the required date nor has he even obtained signatures on all three leases. As such he is not entitled to the $50,000.
If there is something else he believes he is entitled to, please let me know and provide the backup to support his position. …
[20] A further letter, dated February 26, 2013, was sent by Mr. Aoun to the plaintiff’s lawyer:
Gemco Solar does not know what your client is relying upon to base his claim of money owed to him. … Your client has revised his claim of monies owing and changed the slightly the projects but the issue remains the same, our records do not show that he is owed anything at this point. …
[21] Subsequently the plaintiff visited Gemco’s offices with his wife. However, the plaintiff found that their offices were closed.
[22] The plaintiff commenced this action on March 12, 2013 against Gemco and Fovere.
[23] The plaintiff’s claim against Fovere is based on the following allegations:
• Fovere agreed to pay the plaintiff a commission for the three projects:
• Fovere is liable in quantum meruit for the unpaid commissions;
• The plaintiff alleges that Fovere and Gemco were “alter ego” corporations and thus Fovere is jointly and severally liable to the plaintiff for Gemco’s liability in contract and quantum meruit.
ISSUE #1: DID THE PLAINTIFF HAVE AN AGREEMENT WITH FOVERE FOR THE PAYMENT OF HIS COMMISSIONS?
[24] A written agreement between Fovere and the plaintiff was not tendered. In his oral evidence the plaintiff admitted that he did not have an agreement with Fovere for the payment of commissions. Mr. Abbott also confirmed this fact. Accordingly, I find that the Plaintiff did not have an agreement with Fovere for the payment of the commissions that he claims in this action.
ISSUE #2: IS GEMCO THE ALTER EGO OF FOVERE?
[25] The plaintiff alleges, at paragraph 14 of the Statement of Claim, that:
… the named defendants are “alter ego” corporations, each jointly and severally liable for payment of the commissions claimed. In fact, they were integrated in the development of the very same three projects …. [and] were managed, directed, controlled and guided by the same minds, and/or are interwoven and associated with one another to such extent that they should be treated as one and the same, for satisfaction of his claim. Each defendant, in some capacity, participated in a significant manner, in the development of each of the three projects … for which the Plaintiff claims payment of commissions. To the extent that one or more of the Defendants may choose to set up the defence of separateness of identities to deny liability, the Plaintiff alleges that the corporate veil should be pierced.
[26] In Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 1996 7979 (ON SC), 28 O.R. (3d) 423 at 433-434 (Gen. Div.), aff’d [1997] O.J. No. 3754 (C.A.), Sharpe J. (as he then was) stated that:
…the courts will disregard the separate legal personality of a corporate entity where it is completely dominated and controlled and being used as a shield for fraudulent or improper conduct. The first element, 'complete control', requires more than ownership. It must be shown that there is complete domination and that the subsidiary company does not, in fact, function independently ... The second element relates to the nature of the conduct: is there "conduct akin to fraud that would otherwise unjustly deprive the claimants of their rights?
[27] The above test was approved by the Ontario Court of Appeal in 642947 Ontario Ltd. v. Fleischer, 2001, as a guiding principle for determining whether the corporate veil should be pierced.
[28] The plaintiff submits that Gemco is Fovere’s alter ego for several reasons.
[29] First, the plaintiff pointed to the commonality of the word “Glenbarra” in both corporate defendant names as evidence that Gemco was Fovere’s alter ego. Mr. Abbott explained that he decided to include the Glenbarra name upon the incorporation of Fovere to suggest a linkage with Gemco as a developer. However, there was no control exercised by Fovere over Gemco’s affairs.
[30] Second, the plaintiff also submitted that John Hamilton was an officer of both Fovere and Gemco. However, Mr. Abbott testified that Mr. Hamilton worked for Gemco not Fovere.
[31] Third, the plaintiff testified about one meeting with Gemco that Mr. Abbott attended and one that he had lunch with Mr. Abbott to celebrate one of the completion of one of the solar roof panel contracts.
[32] In my view, there is no genuine issue requiring a trial with respect to the plaintiff’s alter ego liability claim. The evidence does not come anywhere close to showing that Gemco was under Fovere’s complete control nor does it show that Gemco’s separate corporate personality was used for fraudulent or improper purposes.
ISSUE #3: ARE FOVERE AND GEMCO PARTNERS IN RESPECT OF THE THREE SOLAR PROJECTS?
[33] The plaintiff did not allege in his Statement of Claim that there was a partnership between Gemco and Fovere, but this position was advanced in his closing submissions.
[34] The Partnerships Act, R.S.O. 1990, c. P.5, provides:
Liability of partners
10. (1) Except as provided in subsection (2), every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while the person is a partner, and after the partner’s death the partner’s estate is also severally liable in a due course of administration for such debts and obligations so far as they remain unsatisfied, but subject to the prior payment of his or her separate debts.
Persons liable by “holding out”
15. (1) Every person, who by words spoken or written or by conduct represents himself or herself or who knowingly suffers himself or herself to be represented as a partner in a particular firm, is liable as a partner to any person who has on the faith of any such representation given credit to the firm, whether the representation has or has not been made or communicated to the persons so giving credit by or with the knowledge of the apparent partner making the representation or suffering it to be made.
[35] The plaintiff testified that Mr. Judd told him that Fovere was a “partner”.
[36] In a news release that it published on the internet related to a particular project, Gemco stated that Gemco and Fovere were “partners”.
[37] Mr. Aoun explained that the reference to “partners” by saying the language was “common in our industry when we go into market” and that “it really means that we are working together”.
[38] Fovere submits that there was no evidence that Fovere and Gemco were partners as there is no evidence that they shared profits or expenses nor was there an expectation that their profits and expenses would be shared.
[39] Further, Fovere submits that s. 15 of the Partnerships Act is not satisfied as the Fovere did not hold itself out to the plaintiff as a being a partner of Gemco in late 2010 when the plaintiff entered into a contract with Gemco. The plaintiff was not aware of Fovere’s existence until 2011 or 2012 and thus long after he had agreed to work for Gemco in September or October 2010. Had Fovere held itself out to the plaintiff as being a partner of Gemco, then the plaintiff would have demanded payment prior to commencing this action from Fovere rather than only demanding payment from Gemco.
[40] In my view, the allegation that Fovere is liable for Gemco’s obligations to the plaintiff based on their alleged partnership does not raise a genuine issue requiring a trial. I also agree with Fovere’s submission that it is not liable under s. 15 of the Partnerships Act because there is no evidence that the plaintiff was led to believe by Fovere, at the time that the plaintiff entered into his commission contract with Gemco in late 2010 or early 2011, that Fovere was Gemco’s partner.
ISSUE #3: IS FOVERE LIABLE IN UNJUST ENRICHMENT?
[41] The plaintiff pleads the principle of quantum meruit. He seeks compensation on a quantum meruit basis for Fover’s alleged unjust enrichment. He submits that his services were furnished at the request or acquiescence of the defendants, that his services remain unpaid for and that it would be unjust for the defendants to not make payment.
[42] In Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, para. 30, the Supreme Court of Canada stated:
As a general matter, the test for unjust enrichment is well established in Canada. The cause of action has three elements: (1) an enrichment of the defendant; (2) a corresponding deprivation of the plaintiff; and (3) an absence of juristic reason for the enrichment …
[43] There is no evidence that Fovere has been enriched. The evidence of Mr. Abbott and Mr. Aoun is that Fovere paid Gemco all amounts that it was owed under their agreements for the three projects. Fovere does not owe any money to Gemco. Any failure by Gemco to pay the plaintiff a commission did not enrich Fovere.
[44] There is no genuine issue requiring a trial that Fovere was unjustly enriched by the plaintiff.
CONCLUSIONS
[45] The defendant’s motion for summary judgment is granted. There is no genuine issue requiring a trial with respect to the plaintiff’s claim against Fovere.
[46] Fovere claims $21,844.45 for its partial indemnity costs of this motion, including multiple civil practice court attendances, cross examination and multiple motion dates. It also seeks $5,000.00 for its costs of defending this action. Fovere’s position is that this claim should not have been commence against it. For the reasons given above, I agree. In my view the amount of costs claimed by Fovere is fair and reasonable. It is an amount that is within the reasonable contemplation of the plaintiff as his outline of costs for this motion was $18,278.13 on a partial indemnity basis. Both parties filed a Factum and a brief two page supplemental written submission; however, unlike Fovere, the Factum and written submissions filed by the plaintiff was bereft of legal analysis, particularly in respect of the claims for unjust enrichment and liability based on partnership.
[47] I order that costs of $26,844.45 be paid by the plaintiff to Fovere forthwith.
Mr. Justice M. D. Faieta
Released: November 4, 2015
COURT FILE NO.: CV-13-476057
DATE: 20151104
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SHELDON KIDECKEL
Plaintiff
– and –
GLENBARRA RENEWABLE ENERGY SOLUTIONS INC. and GEMCO SOLAR INC., and FOVERE GLENBARRA ENERGY FUND I LTD.
Defendants
REASONS FOR DECISION
Mr. Justice M. D. Faieta
Released: November 4, 2015
[^1]: Rule 20.04(2)(a).
[^2]: Hryniak v. Maudlin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49.
[^3]: Rule 20.04(2.1).
[^4]: Lopez v. Dr. M. Douris Dentistry Professional Corp., 2015 ONSC 3675, 23 C.C.E.L. (4th) 71, at para. 9.
[^5]: Rule 20.04(2.1).
[^6]: Rule 20.04(2.2).
[^7]: Hryniak, at para. 66.