OTTAWA
COURT FILE NO.: 12-54685
DATE: 2015/11/27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FINCANTIERI CANTIERI NAVALI ITALIANI S.P.A. and FINCANTIERI MARINE SYSTEMS NORTH AMERICA INC.
Plaintiffs
– and –
ANMAR ENERGY LTD. and ANMAR MECHANICAL AND ELECTRICAL CONTRACTORS LTD.
Defendants
Andrew J.F. Lenz and Brett W. Hodgins, for the Plaintiffs
H. James Marin, for the Defendants
HEARD: Via Written Submissions
DECISION ON leave to appeal
Patrick SMITH J.
[1] This is a motion for leave to appeal to the Divisional Court from the order of Justice Martin James, dated September 2, 2015, brought pursuant to Rule 62.02(a) and (b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
Procedural History and Background
[2] On this motion the defendant, Anmar Mechanical seeks leave to appeal the dismissal of its motion for summary judgment.
[3] There are two related actions by way of background. In Court File No. 12-54372 Fincantieri Cantieri Navali Italiani S.p.A. (“FC Italy”) and Fincantieri Marine Systems North America Inc. (“FMSNA”) sues Anmar Energy Ltd. (“Anmar Energy”) for damages for breach of contract, misrepresentation and unjust enrichment. In Court File No. 12-54685 (the action in which this motion is brought) FMSNA and FC Italy sue Anmar Energy and Anmar Mechanical advancing similar allegations and causes of action as above.
[4] The actions relate to the aborted sale by FC Italy and FMSNA of a generator manufactured in Italy by FC Italy to be allegedly sold to Anmar Mechanical and Anmar Energy.
[5] Anmar Mechanical moved for summary judgment on the basis that it was not a proper party to the action given the identity of the parties set out in the contractual documents alleged by the plaintiffs and the absence of evidence supporting the alternative claim for misrepresentation and unjust enrichment.
The Test for Granting Leave to Appeal
[6] The test for granting leave to appeal under Rule 62.02(4) is well-settled. It is recognized that leave should not be easily granted and the test to be met is a very strict one. There are two possible branches upon which leave may be granted. Both branches involve a two-part test and, in each case, both aspects of the two-part test must be met before leave may be granted.
[7] Under Rule 62.02(4)(a), the moving party must establish that there is a conflicting decision of another judge or court in Ontario or elsewhere (but not a lower level court) and that it is, in the opinion of the judge hearing the motion, “desirable that leave to appeal be granted.” A “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts: Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542 (Div. Ct.).
[8] Under Rule 62.02(4)(b), the moving party must establish that there is reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – that aspect of the test is satisfied if the judge granting leave finds that the correctness of the order is open to “very serious debate”: Nazari v. OTIP/RAEO Insurance Co., 2003 40868 (ON SC), [2003] O.J. No. 3442 (S.C.J.); Ash v. Lloyd’s Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Gen. Div.). In addition, the moving party must demonstrate matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice: Rankin v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569 (H.C.J.); Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110 (Div. Ct.).
Discussion
Conflicting Decision
[9] As set out above Rule 62.02(4)(a) and (b) has two branches. I will address the second branch of the rule first.
[10] For reasons that follow, I am not satisfied that it is desirable that leave to appeal be granted (Rule 62.04(a)) or that the case involves a matter of public importance (Rule 62.04(b)).
[11] In dismissing the motion Justice James stated the following:
[49] The moving party advances a very simple proposition on this motion, namely, there was never a contract and if a contract had been concluded, it would have been with Anmar Energy, not Anmar Mechanical. In my view, this is an oversimplification of the true state of affairs. Anmar Mechanical had an indirect ownership interest in the project. It was also the project manager without the benefit of a written contract (although Mr. Grossi had sworn there was a written contract). It was funding the project by working capital of $10,000,000 (see Moving Party’s Supp. Motion Record, Tab 1, p. 5), and by providing temporary financing to Anmar Energy by paying at least the first invoice from the respondents. A Request for Proposals prepared by 1721027 Ontario Inc. in June, 2009 contained an organizational chart that showed that the construction contract would be performed by Anmar Mechanical.
[50] Against this background, Anmar Mechanical conducted discussions/ negotiations/dealings with the respondents for months prior to the incorporation of Anmar Energy. By contrast, Anmar Energy may have only existed on paper. It was newly-incorporated, perhaps as a single-purpose entity, it is not clear whether it had any employees and Anmar Mechanical paid its bills, or at least the bill from the respondents. An inference could be drawn (but I am not) that Anmar Energy was simply the alter ego of Anmar Mechanical.
[51] In addition, it is difficult to reconcile the contents of the email from
Mr. Baril to Mr. Bongiorni on November 24th, 2009 with the position now taken that there was never a contract. In the email Mr. Baril is clearly pushing the respondents to pick up the pace of their work when he says:
I would like to reiterate the importance for your company to start right a way (sic) the engineering for this project… We are experiencing serious delays due to the lack of engineering cooperation coming from Fincantieri…Fincantieri has clearly changed its business approach. Your “new” approach to dealing with these contract issues is not realistic, specially (sic) since this “new” approach was initiated after the agreement (emphasis added) and without any warning to ANMAR.
[52] One might also wonder why Anmar paid an invoice from the respondents for €260,700 if there was no contract. Recall, however, that the letter of intent (also referred to as the Letter of Award) from October 15th, 2009 specifically addressed the issue of commencement of invoicing. Might this be construed as an implicit acknowledgement that contract relations had been formed?
[53] These observations should not be taken to ignore or gloss over potential problems with the legal positions asserted by the respondents but it is Anmar Mechanical’s motion for summary dismissal. In my view the respondents have raised genuine issues that require a trial. At this stage I need not assess the likelihood of success at trial beyond determining that the issues raised are genuine.
[54] Having made this determination, I am also of the view that the interest of justice precludes utilizing the enhanced powers available to the judge presiding at a motion for summary judgment in the circumstances here. Sometimes justice requires that the case unfold by way of the trial narrative with oral testimony and cross-examination in the presence of the trier of fact. The case raises complicated factual and legal issues. Credibility will be a significant factor. The monetary value of the respondents’ claim is not yet clear but will likely be substantial. This is not a case where the proportionality doctrine elevates the need for summary disposition. At paragraph 33 of Hryniak, Karakatsanis, J. poses the question: Is the added expense and delay of fact finding at trial necessary to a fair process and just adjudication? My answer on these facts is in the affirmative.
[55] The moving party’s position on the motion has two elements. Firstly it requests that the court find that Anmar Mechanical is not a party to a contract. Secondly, it states that if the court determines there is no genuine issue regarding Anmar Mechanical’s status as a party to a contract, then the subsidiary questions are whether the claims for misrepresentation and unjust enrichment ought to be dismissed as well (see Moving Party’s Factum, para. 59). Having determined the first question in the affirmative, considering how the moving party has framed its position, it is unnecessary to address the subsidiary questions. In the alternative, I would hold that there is a genuine issue requiring a trial arising from the delay in announcing in May, 2010 that the project was to be placed on hold although the critical issue of the size of the generator appears to have been known since as early as the previous June, perhaps even earlier.
[56] The decision in Hryniak underscores the importance of endeavoring, where possible, to use the time and attention invested by the judge hearing the motion to the parties’ benefit where there are unresolved issues following the disposition of the motion. Having given this direction due consideration in this case, I conclude that this is not appropriate here for two reasons. Firstly, I don’t view this case as suitable for a disposition by way of a trial of an issue or for use of the hybrid/summary trial procedure. Secondly, as a circuiting judge based outside Ottawa, experience suggests that scheduling visiting judges for long trials can be difficult and itself a source of delay. I would say even more so where, as here, the trial will proceed with a jury.
[57] In the result, the motion is dismissed with costs. On the issue of costs, the parties delivered envelopes containing their positions on costs at the conclusion of oral argument. The envelopes are, as yet, unopened. The respondents, in their factum, requested an opportunity to make costs submissions. Accordingly, if the parties wish to make further costs submissions they may do so within the next thirty days on a schedule agreed to by counsel.
[12] I agree with the comments of Justice James. I agree that a determination of the issue will require an assessment of conflicting evidence as well as findings on credibility. As mentioned above, the test for granting leave to appeal is a strict one. Given the facts of the case and the issues involved, I find that the moving party has failed to satisfy me that it is desirable that leave to appeal be granted.
[13] While the matters at issue are of great importance to the parties before me, I do not find that they are matters of such general public importance that leave to appeal should be granted. Nor do the issues include questions relevant to the development of the law and administration of justice.
[14] With respect to the first branch of Rule 62.04(a), an applicant must satisfy the court that there is a conflicting decision with respect to a difference in the principle chosen as a guide to the exercise of a Judge’s discretion (Comtrade, supra at para. 7).
[15] A judge who exercises his or her discretion when the circumstances of the case are different than in other jurisprudence is not necessarily making a “conflicting decision”.
[16] Anmar Mechanical asserts that Justice James erred in failing to apply the governing principles relating to (a) the rule in Browne v. Dunn (as applied in R. v. Dexter, 2013 ONCA 744); settlement privilege as set out in the case of Sable Offshore Energy Inc. v. Ameron International Group Corp. 2013 SCC 37, [2013] 2 S.C.R. 623; and (c) by accepting theories not pleaded.
[17] I disagree. In my view, the Moving Party has failed to establish that Justice James exercised his discretion improperly and that there is a conflicting decision elsewhere on the issue(s) before the court. I find that the principles chosen in reaching his decision were proper and that his decision is entitled to deference (Nikore v. Proper, 2010 ONSC 2307).
[18] I find therefore that the first branch of Rule 62.02(4)(a) has not been met.
[19] Rule 62.02(4)(b)requires a moving party to satisfy the court that there is good reason to doubt the correctness of the motion judge’s decision. (Bell ExpressVu Limited Partnership v. Morgan (2008), 2008 63136 (ON SCDC), 67 C.P.C. (6th) 263 at paras. 1-3 (Ont. Div. Ct.)
[20] The phrase “good reason to doubt the correctness of a decision” does not require a conclusion that the decision in question was wrong or even probably wrong. Nor does it require that the judge hearing the leave motion would have decided it differently had he or she been presiding as the motion judge. The test is whether the decision is open to serious debate (Judson v. Mitchele, 2011 ONSC 6004 at para 15, 108 O.R. (3d) 129. See also Ash v. Lloyd’s Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 at 284 (Gen. Div.)).
[21] Anmar Mechanical submits that Justice James made several errors that individually or cumulatively establish that there is good reason to doubt the correctness of his decision.
[22] After having reviewed the decision and evidentiary record I do not agree with the position of the Moving Party that the decision is open to serious debate and that there is good reason to doubt the correctness of the decision.
Disposition
[23] The motion to grant leave to appeal is dismissed.
Costs
[24] In the event that the parties are unable to resolve the issue of costs themselves they may file written submissions within 30 days not to exceed five pages in length within 30 days.
Mr. Justice Patrick Smith
Released: November 27, 2015
OTTAWA COURT FILE NO.: 12-54685
DATE: 2015/11/27
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
FINCANTIERI CANTIERI NAVALI ITALIANI S.P.A. and FINCANTIERI MARINE SYSTEMS NORTH AMERICA INC.
Plaintiffs
– and –
ANMAR ENERGY LTD. and ANMAR MECHANICAL AND ELECTRICAL CONTRACTORS LTD.
Defendants
DECISION ON LEAVE TO APPEAL
Mr. Justice Patrick Smith
Released: November 27, 2015