COURT FILE NO.: 08-CV-351730

DATE: 20151013

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Parma General Contractors Inc., Plaintiff

AND:

Giancarlo Aloe, M.J.R. Canada Enterprises Inc., The Toronto Dominion Bank and Maria Torres, Defendants

BEFORE: Carole J. Brown, J.

COUNSEL: H. Keith Juriansz, Ron Lachmansingh and O.S. Morozova, for the Plaintiff

Joseph C. Vieni, for the Defendants

HEARD: August 17 and 18, 2015

ENDORSEMENT

[1] The plaintiff seeks an Order opposing confirmation of the Final Report of Master Weibe dated March 27, 2014 or, in the alternative, an Order directing a new trial on a reference of the within actions before a Master of the Superior Court of Ontario other than Master Weibe.

[2] The actions in question arise from a Joint Venture Agreement between Remo Molinari, Giancarlo Aloe, Rocco Chiappetta, Romina Pulcini and MJR Canada Enterprises Inc. ("MJR"). Rocco and Romina are siblings, Rocco and Giancarlo are partners in MJR, and Remo is the father of Parma's principal, Daniel Molinari.

[3] The Joint Venture was created for the purpose of purchasing, severing and redeveloping residential lots in Toronto and sharing in the profits realized from the sales of these lots. The original agreement was made verbally in 2005 and formalized in writing in December of 2007.

[4] Pursuant to the Agreement, the parties agreed to contribute time, money and expertise toward the acquisition, development and sale of properties, from which the profits would be realized. Under the Joint Venture, net profits from the sales of the developed lands would be divided as follows: 33% to Remo-, 33% to Giancarlo, 16.5% to Rocco and 16.5% to Romina.

[5] Remo commenced an action in the Superior Court of Ontario ("the Joint Venture Action") in which he claims that he has not received his share of the proceeds of sale of the joint venture properties or a proper accounting of acquisition and development costs. That action is still pending and has yet to be set down for trial.

[6] The subject actions, in which Parma claimed amounts owing with respect to carpentry, site supervision services and extras, were heard over 20 days with 14 witnesses and voluminous documentation. While there were seven large volumes of transcripts, pleadings and documents before me, I was advised by counsel for the moving party plaintiff that there had been 14 volumes produced at trial before the Master.

[7] Following the trial, the Master rendered Reasons for Judgment dated March 27, 2014 in which he granted judgment to Parma for amounts owing for carpentry and certain extras but denied Parma's claims for amounts owing for site supervision services, fence and deck extras, and framing and non-framing extras. Master Weibe further found that Parma's lien rights had expired and its liens were discharged. He refused Parma's request that the judgment be satisfied from the lien security with the balance paid into court to the credit of the ongoing Joint Venture Action, and he instead ordered that the security held in court be paid out to MJR.

[8] Parma opposes confirmation of Master Weibe's Report on the basis that the Report emanating from the trial is based on errors of fact and/or law, patent misapprehension of the evidence and that the decision is clearly wrong based on the evidence. In particular, Parma states that the Report and Decision are wrong based on the following evidence before the Court:

1. Rocco admitted that Remo and Daniel performed site supervision work and certain extras;

2. Rocco admitted that Remo and Daniel "get paid for their work;"

3. Rocco admitted that Parma was Daniel's company, Remo operated under Parma and that Remo and Daniel billed under Parma;

4. Rocco admitted that Remo was not obliged to perform site supervision services as part of his obligations under the Joint Venture Agreement;

5. Parma properly preserved its liens by registering its name on title within 45 days of services rendered to the subject property by Remo and by a trade who acknowledged that he had been retained by Remo, had never heard of MJR, and had not met Rocco until towards the end of the project;

6. Parma properly perfected its liens by commencing the within actions within the time stipulated for doing so under the Construction Lien Act, R.S.O. 1990, c. C. 30 (the “Act”).

[9] The issues, as raised by the moving party plaintiffs, are stated in their factum to be as follows:

1. What is the standard of review to be applied by the court on the motion to oppose confirmation of the Master's Report on a reference?

2. Did the learned Master err in failing to allow Parma's claims for:

a. The entire amounts billed for carpentry services?

b. Amounts invoiced for site supervision services?

c. Claims for amounts invoiced for fence and deck extras?

d. Amounts invoiced for various framing extras?

e. Amounts invoiced for various non-framing extras?

3. Did the learned Master err in finding that Parma's lien rights had expired?

4. Did the learned Master err in failing to find that Parma's judgment should be satisfied from the security held in court?

5. Did the learned Master err in ordering that the security held in court should be paid to MJR?

6. Did the learned Master err in failing to award Parma costs of the actions?

The Standard of Review on a Motion to Oppose Confirmation of a Master’s Report

[10] The powers of the Master on a reference are set out in s. 58(4) of the Act and provide that:

A master or case management master to whom a reference has been directed has all the jurisdiction, powers and authority of the court to try and completely dispose of the action and all matters and questions arising in connection with the action, including the giving of leave to amend any pleading and the giving of directions to a receiver or trustee appointed by the court.

[11] Section 51 of the Act further mandates the court, be it a judge or a master, to dispose completely of the actions.

[12] The general provisions for the conduct of a reference are set out at rule 55.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”).

[13] Where, as here, confirmation of the master's report is contested pursuant to rule 59.04 (5) of the Rules, the court "may confirm the report in whole or in part or make such other order as is just." In doing so, the master is owed a high degree of deference, and a master's award should not be disturbed unless it appears unsatisfactory on all of the evidence: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Jordan v. McKenzie, [1987] O.J. No. 1193, 18 A.C.W.S. (3d) 731 (Ont. S.C.); Heyday Homes Ltd. v. Gunraj, [2005] O.J. No. 2986, 140 A.C.W.S. (3d) 819 (Ont. S.C.).

[14] The jurisprudence recognizes that the function of a master conducting a trial in a reference on viva voce evidence is analogous to that of a judge. The standard of review is that of a true appeal, with the onus on the party opposing confirmation to demonstrate that the decision of the master is wrong. Deference is owed to a master sitting as a trial judge. The appellate court will not interfere with a master's decision at trial unless there has been some error of principle, an absence or excess of jurisdiction or a patent misrepresentation of the evidence. It is not the role of the appellate court to retry the action: Zeitoun v. Economical Insurance Group, 2008 20996 (ON SCDC), 91 O.R. (3d) 131, 292 D.L.R. (4th) 313 (Ont. Div. Ct.), aff’d 2009 ONCA 415; Heyday Homes Ltd. v. Gunraj; and Housen v. Nikolaisen.

[15] As recognized by the Supreme Court of Canada in Housen v. Nikolaisen, at paras. 3-6:

The role of the appellate court was aptly defined in Underwood v. Ocean City Realty Ltd. (1987), 12 B.C.L. (2d) 199 (C.A.), at p. 204, where it was stated:

The appellate court must not retry a case and must not substitute its views for the views of the trial judge according to what the appellate court thinks the evidence establishes on its view of the balance of probabilities.

[16] The principle of non-intervention is a rule of law, as observed by the Supreme Court of Canada in Hodgkinson v. Simms, 1994 70 (SCC), [1994] 3 S.C.R. 3377, [1994] S.C.J. no. 84, at para. 53:

It is axiomatic that the reviewing court must exercise considerable deference with respect to a trial judge's findings of fact, all the more so when those findings are based on credibility … I stress that the principle of non-intervention stated in this line of cases is not merely cautionary; it is a rule of law. Failing a manifest error, an appellate court simply has no jurisdiction to interfere with the findings and conclusions of fact of any trial judge.

[17] As regards errors of law, the standard is one of correctness. As regards issues of mixed fact and law, determination of an error falls on a "spectrum of particularity." Where the proposition is one of general application, it tends toward correctness, and where it concerns a particular set of circumstances not likely to have application beyond the case at hand, it tends toward that of palpable and overriding error: Housen v. Nikolaisen, supra, at paras. 8, 10, 25, 28.

[18] Trial judgments should be upheld by an appellate court unless there is a "palpable and overriding error." A "palpable error" is one that is obvious, plain to see or clear. An "overriding error" of fact is an error that is sufficiently significant to vitiate the challenged finding of fact. The appellant must demonstrate that the error goes to the root of the challenged finding of fact such that the fact cannot safely stand in the face of that error: Housen v. Nikolaisen, supra, at paras. 10, 22-23; Heyday Homes Ltd. v. Gunraj, supra.

[19] It is not the role of an appellate court to interfere with a conclusion based on an inference drawn from the evidence presented before the trial judge, reassess the weight to be assigned to underlying facts presented at trial, or to interfere with findings of credibility that are based on observation of the witnesses and their evidence. Where evidence exists that supports a conclusion, interference with the conclusion entails interference with the weight assigned by the trial judge to the various pieces of evidence adduced. Where there is no palpable and overriding error with respect to the underlying facts relied on by the trial judge in drawing an inference, it is only where the inference drawing process itself is palpable in error that an appellate court could interfere with the factual conclusion. It is not the role of the appellate court to interfere with factual conclusions with which it may have a difference of opinion regarding the weight to be assigned to the evidence and underlying facts: Housen v. Nikolaisen, supra, at paras. 21-25.

The Findings of the Master

[20] In his lengthy and carefully analyzed decision, the Master reviewed the background of the case, the various litigation arising from the joint venture and the issues and evidence presented by the 14 witnesses over 20 days.

[21] As regards the evidence, the Master commented as follows:

[34] Before I deal with the above noted issues, I must comment on the credibility of the evidence presented at trial.

[35] The trial had a total of 14 witnesses. Parma produced 8 witnesses in the following order: Harpreet Attal (City Cards manager), John Grossi (a plumber), Jennifer Borges (Rogers clerk), Pietro Gambino (associate of paving trade), Roberto Rota (IBM manager and friend of Daniel), Dorian Kolinas (Daniel's wife), Marco Molinari (Daniel's brother), Michael Matzaridis (Daniel's brother-in-law) and Daniel. The major witness for Parma was Daniel. The Defendants produced 6 witnesses in the following order: Joseph Chita (principal of JC Concrete & Drain), Wayne Penny (cleanup trade), Romina, Gerry Kuchartz (trim trade), Giulio Mallozzi (principal of Wireline Electric) and Rocco. Rocco was the major witness for the Defendants.

[36] As a general comment, I found that all of the major witnesses (and persons) in this case had significant credibility issues. I will discuss this in further detail.

[37] The most challenging part of this case was the absence of the key partner, Remo, who died in May, 2012. Because of this, I relaxed the hearsay rules of evidence in order to allow in essential evidence about what Remo said and did. Neither side put into evidence any recorded or written evidence from Remo. Mr. Vieni tried to introduce some of Remo's discovery evidence from the JV Action in closing argument, but I did not allow it as it had not been entered as evidence. The absence of written or recorded evidence from Remo was noted by me in light of what Master Polika stated in his directions of April 25, 2012 was discussed at that time about Parma getting Remo's trial evidence by alternative means in light of his ill health.

[22] The Master then went on to assess the credibility of some of the witnesses, including the two most central witnesses, Rocco and Daniel, as well as Romina, Messrs. Chita, Kuchartz, Mallozzi, and Wayne Penny. In assessing their credibility, he analyzed both viva voce and documentary evidence. In assessing the documentary evidence and absences thereof, he further drew adverse inferences. His lengthy assessment can be found at pages 7 through 11, paragraphs 34 through 54 of the decision.

[23] As regards the credibility of both Rocco and Daniel, both of whom he assessed as having significant credibility issues, he stated as follows:

[48] In general, though, I had concerns about Rocco's credibility given his troublesome evidence about largely collateral matters. It showed at minimum a cavalier attitude towards transparency and veracity. In assessing Rocco's credibility on the critical issues in the case, I therefore applied what I viewed to be a standard of overall reasonableness using objective corroboration wherever possible, just as I did with Daniel's evidence.

[24] As regards the conflicting evidence presented, of which there was much, he stated as follows:

[54] For the reasons stated, I assessed the relative merits of conflicting evidence from Daniel and Rocco on an issue by issue basis as discussed above, and preferred the evidence of Messrs. Chita and Mallozzi, on the one hand, to Daniel's, on the other hand, where the two conflicted.

[25] Thus, in arriving at his decisions on the various issues, the Master assessed the evidence as regards each of the issues in light of his findings of credibility. Those assessments of credibility were based on an analysis of the evidence adduced and were arrived at through the application of a "standard of overall reasonableness using objective corroboration wherever possible."

[26] The Master had the benefit of hearing, assessing and weighing the evidence presented over 20 days. He further had the benefit of assessing the credibility of the witnesses who presented that evidence. From this evidentiary matrix, he made findings of fact and drew inferences. These tasks are all intertwined.

[27] Mr. Lachmansingh addressed each of the issues set forth above at paragraph 9 as regards the alleged errors of fact and law made by the Master. Over a period of two days, he carefully took me through transcript evidence of various witnesses in the trial proceedings and some documentary evidence in support of his submissions and allegations of error. The submissions were based for the most part on the testimony given at trial, certain pieces of documentary evidence and admissions made by Rocco. He requests that this Court reject certain evidence given at trial. He submits that the Master erred in drawing certain inferences and implying certain contractual terms. He requests that on a restitutionary quantum meruit basis this Court award the plaintiff the additional monies sought on a contractual quantum meruit based on an agreement that this Court may find existed between Rocco and Parma. Alternatively, he requests that, on a restitutionary quantum meruit basis, this Court award the plaintiff monies based on an implied agreement that MJR retained Parma to perform site supervision on two of the subject properties on the basis of the amount invoiced by Parma or, in the further alternative, on the basis of an amount fixed by this Court based on the factual matrix underlying the action.

[28] Mr. Lachmansingh submitted that the Master erroneously assessed both viva voce and documentary evidence on many of the issues in arriving at his factual findings. However, the transcripts upon which he relied and the evidence in support of his argument could, in my view, be interpreted differently. I do not agree with his interpretation of the various transcript passages to which he took me in attempting to demonstrate errors on the part of the Master. Indeed, I interpreted the passages similarly to the interpretations given by the Master, who had the benefit of all of the evidence before him. Such differences of interpretation do not permit this Court to interfere with any of the decisions of the Master and, indeed, as indicated above, I did not agree with the interpretations of the plaintiff in any event. Indeed, the findings of facts and drawing of evidentiary conclusions from those facts is the role of the trial judge, not that of a court sitting on appeal. Drawing factual conclusions is inextricably intertwined with assigning weight to evidence, unless it attracts a differential standard of review, as recognized by the Supreme Court of Canada in Housen v. Nikolaisen, supra.

[29] The alleged errors of the Master are reviewed and analyzed below.

(Endorsement continues exactly as in the original judgment through paragraphs [30]–[62].)

Carole J. Brown, J.

Date: October 13, 2015