CITATION: Bank of Montreal v. Cardinal, 2016 ONSC 1980

COURT FILE NO.: 11-52499 Ottawa/737-2013 L’Orignal

DATE: 20160321

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Court File No.: 11-52499

BANK OF MONTREAL

Applicant

– and –

JEAN-LUC CARDINAL and THE ESTATE OF RAYMOND CARDINAL, operating as FERME LANIDRAC

Respondents

Guy Pratte/Karen Perron, for the Applicant, Bank of Montreal

Ronald Caza/Érik Labelle Eastaugh for the Respondents

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Court File No.: 737-2013

JEAN-LUC CARDINAL, LINDA CARDINAL, LA SUCCESSION DU FEU RAYMOND CARDINAL ET FERME LANIDRAC

Plaintiffs

– and –

LA BANQUE DE MONTRÉAL et SURGESON CARSON ASSOICATES, INC.

Defendants

Ronald Caza/Érik Labelle Eastaugh, for the Plaintiffs

Guy Pratte/Karen Perron, for the Defendant, La Banque de Montréal

Sally Gomery, for the Defendant, Surgeson Carson Associates, Inc.

HEARD: December 21, 2015

REASONS FOR DECISION

Beaudoin J.

[1] There are two bilingual motions before me. The first is brought in Court file no. 737-2013 (“the L’Orignal action”) wherein La Banque de Montréal (“The Bank”) and Surgerson Carson Associates, Inc. (“The Receiver”) as Defendants seek summary judgment dismissing the Plaintiffs’ claims. The second motion is brought by Jean-Luc Cardinal and the Estate of Raymond Cardinal operating as Ferme Lanidrac (“The Borrowers”) in Ottawa Court file no. 11-52499 wherein the Borrowers seek to set aside the consent judgment granted in favor of the Bank of Montreal dated November 28, 2011. The Borrowers also seek retroactive leave to bring the L’Orignal action against the Receiver.

[2] It is conceded that unless Borrowers are successful in setting aside the judgment of November 28, 2011, summary judgment should be granted dismissing the Plaintiffs’ claims in the L’Orignal action.

Background

[3] The following facts are not seriously in dispute. The Bank and the Borrowers maintained a standard debtor-creditor relationship pursuant to which the Bank granted various credit facilities to the Borrowers. By early 2011, the Borrowers’ credit facilities totalled approximately $4,204,500.

[4] The Borrowers provided security to the Bank. The credit facilities and the security expressly provided that, in the event of default by the Borrowers, the Bank was entitled to, amongst other things, demand payment of the entire indebtedness owing by the Borrowers and to appoint a Receiver and/or Receiver-Manager.

[5] By September 2010, the Borrowers’ financial situation had effectively deteriorated. In order to accommodate the Borrowers, the Bank agreed to their request of payments of interest only on a Bio-Digestor loan to February 28, 2011. In January, 2011, the Bank concluded that the Borrowers had breached various covenants contained in the Credit Facilities and Security. Nevertheless, the Bank again agreed to the Borrowers’ request to extend the moratorium on principal payments on the loan to April 30, 2011.

[6] On March 31, 2011, the parties entered into a Forbearance Agreement following a mediation (FDMA) conducted under the Farm Debt Mediation Service of Agriculture and Agri-Food Canada. Further funds were advanced by the Bank, and amongst the many terms agreed to by the Borrowers, they expressly acknowledged their indebtedness to the Bank in the amount of $3,948,864.22 and their default with regard to their obligations to the Bank. Paragraph 4 of that Forbearance Agreement provided:

The Borrowers jointly and severally acknowledge that they have no claims for set-off, counterclaim or damages on any basis whatsoever against the Bank, its officers, employees and representatives, and if any such claims for set-off, counterclaim or damages or losses exist, they are hereby expressly released and discharged.

[7] Throughout the negotiation and conclusion of this Forbearance Agreement, the Borrowers were represented by counsel and had the benefit of independent legal advice.

[8] On or about April 6, 2011, only seven days after the execution of this First Forbearance Agreement, the Borrowers, through their counsel, informed the Bank that they would not be able to honour the terms of the First Agreement. As a result, the parties met on April 11, 2011 to discuss possible amendments and as a result, the parties entered into a Second Forbearance Agreement dated April 28, 2011. Most of the material terms of this Second Agreement dealt with the conditions pursuant to which the Bank would advance further funds to the Borrowers. As in the case of the First Agreement, the Borrowers were represented by counsel of their choice.

[9] In August 2011, the Borrowers advised the Bank through their counsel that they could not honour the terms of the Second Forbearance Agreement. On or about August 10, 2011, a further meeting was held between the parties wherein the Borrowers proposed initiating a sale process to sell certain landholdings over time in order to repay the Bank. A Third Forbearance Agreement was entered into on or about September 7, 2011. Again, throughout the negotiation and conclusion of this agreement, the Borrowers were represented by counsel of their choice and had the benefit of independent legal advice.

[10] In this Third Forbearance Agreement, the Borrowers expressly acknowledged their numerous breaches of the credit facilities, security, and the previous Forbearance Agreements, their indebtedness owing to the Bank and their inability to repay the indebtedness by September 1, 2011 as agreed. The indebtedness at that time was $4,349,179.18. The Bank disclosed its legal and professional fees as of that date in the amount of $159,700.10. The Borrowers further agreed that the terms of the First and Second Forbearance Agreements continued to apply. In the event of default, the Borrowers consented to the appointment without notice of a Receiver by the Bank. Paragraph 14 states:

In the event of default under this agreement which default shall be determined by the Bank in its sole discretion, the Bank shall be at liberty to apply to a court of competent jurisdiction without notice to the Borrowers for an order appointing a Receiver, which order shall be substantially in the form of the order in Schedule “A” hereof. The Borrowers hereby irrevocably authorize and direct the Bank’s solicitors, Kelly Santini LLP to sign on their behalf any consent document as may be required by the Bank to obtain such order.

[11] There was a further release of any claims whatsoever against the Bank. Within less than a month of the conclusion of the Third Forbearance Agreement, the Bank determined that the Borrowers had breached several terms and conditions of the Agreement and these defaults were confirmed by the Bank’s counsel in letters to the Borrowers’ counsel on September 20 and 22, 2011 and October 7, 2011. The Bank then lost confidence in the Borrowers, and in compliance with the express provisions of the Third Forbearance Agreement, the Bank obtained a Receivership Order without notice on October 7, 2011.

[12] On or about October 20, 2011, the Borrowers retained new counsel and brought a motion to set aside the Receivership Order. The Borrowers filed three affidavits wherein they attacked various aspects of the Bank’s conduct during 2010 and 2011, including the Bank’s actions leading up to the FDMA mediation and in each of the three Forbearance Agreements and the propriety of the appointment of the Receiver. In the context of that motion, the parties prepared detailed affidavits and reports outlining their respective positions on all the material issues leading up to and including the appointment and actions of the Receiver. The Borrowers filed a final 14 page affidavit sworn November 20, 2011. As such, any and all disputes pertaining to the events between December 2010 and November 2011 were within each party’s knowledge, fully disclosed and squarely before the Court.

[13] On November 23, 2011, the Bank, the Receiver and the Borrowers, along with their respective counsel, met to discuss settling all outstanding matters between them. They subsequently entered into a Memorandum of Understanding (MOU). Paragraph 3 of the MOU anticipated a final order and it provided:

An order will go on consent on Monday November 28, 2011 whereby the Receiver will be removed, and all claims will be released except claims by the Bank under its Security.

[14] On November 24, 2011, counsel for the Borrowers wrote to counsel for the Receiver and expressed a concern that the Bank would receive funds in excess of its indebtedness calculated at $385,000 and proposed that this sum be paid to the Trustee in Bankruptcy for the benefit of the Cardinal’s unsecured creditors. The Borrowers would receive no direct benefit from any surplus to invest in the Farm. Counsel also wanted to insure that the sum of $200,000 payable to them for fees would be transferred to them before their clients filed a Notice of Intention (NOI) to file a proposal.

[15] On November 24, 2011, the Bank, the Receiver and the Borrowers met once again with their respective counsel to formalize their Settlement Agreement. The Recitals to that Agreement acknowledge that the Borrowers had sought to set aside the appointment of the Receiver and stipulate that the parties wish to resolve all outstanding issues between them in relation to the payment of the indebtedness and the appointment of the actions of the Receiver.

[16] Consistent with the terms that were discussed, the settlement provided that the Borrowers would sell all of their assets by March 2012 in order to repay their indebtedness to the Bank. They also agreed to file a NOI and to file a proposal to deal with their other creditors. The Settlement Agreement included an entire agreement clause whereby the Borrowers acknowledged that no representations were made to induce them to enter into the settlement. Paragraph 12 provided:

The parties acknowledge and agree that except as herein expressed or stated, no representation, statement, understanding, promise or agreement has been made or exists, either oral or in writing, which in any way affects the Bank’s right to obtain satisfaction of the indebtedness due to it or to induce the parties to enter into this agreement.

[17] In addition, Schedule B to the Settlement Agreement included a detailed Full and Final Release in favour of the Bank and the Receiver with respect to all claims arising as a result of: the Credit Facilities, the Bank’s administration, enforcement and realization of the Credit Facilities and Security as well as the appointment of the Receiver and the Receiver’s actions and omissions. That Full and Final Release was signed by the Borrowers on November 28, 2011 and it specifically provides:

IF THE RELEASORS commence any proceeding involving any claim, complaint or demand against the Releasees for any cause, matter or thing relating to the matters dealt with in this Release, this Release may be raised as a complete bar to any such claims, demand or complaint in the proceeding.

THE RELEASORS ACKNOWLEDGE that they have had sufficient time and opportunity to seek independent legal and other professional advice with respect to the terms of this Release and the Agreement and they are fully satisfied with all information provided to them which affected their decision to execute this Release and the Agreement and further acknowledge that they have no outstanding requests for information. The Releasors acknowledge that they fully understand and voluntarily accept the terms of this Release and the Agreement with the intention that they will be bound by them. The Releasors confirm that they are making a full and final compromise, adjustment and settlement of all claims set out as set out in this Release. The Releasors acknowledge that, except as set out in this Release and Agreement, there has been no representation of fact or opinion, threat or inducement to them which affected their decision to execute this Release.

[18] On November 28, 2011, in accordance with the terms of the MOU and the Settlement Agreement, the parties through their respective counsel, appeared before me and obtained a court order terminating the Receivership. The Termination Order also confirmed and approved the Settlement Agreement and the Receiver’s Preliminary Report, Supplementary Report and The First and Final Report were accepted by me. The First and Final Report included the Receiver’s Statement of Receipts and Disbursements as of that date, November 28, 2011.This Statement detailed Receipts of $684,177.98, Disbursements of $539,946.73 and a balance of $144, 231.25.

[19] Although he signed the Full and Final Release on the same day, Jean-Luc Cardinal claims he only received viewed this Report on December 1, 2011. There is no dispute that the First and Final Report which included this Statements of Receipts and Disbursements was presented to me for acceptance on November 28, 2011.

[20] Shortly thereafter, there was correspondence from Borrowers’ counsel about the December 2011 milk quota cheque only. While litigation was threatened, nothing came of it. By April 2012, the Borrowers were unable to comply with some of the terms of the Settlement Agreement and they requested that amendments be made. On April 3, 2012, the parties negotiated an Amended Settlement Agreement. Pursuant to this Amended Settlement Agreement, the Borrowers executed another Full and Final Release. The Borrowers acknowledged being in breach of the November 24, 2011 Agreement. The parties acknowledged that the Borrowers would be selling their remaining Farm. The parties also agreed that they may have to re-attend before me in the event of a breach of that Amending Agreement for the appointment of a Receiver. This Amending Agreement contained the following clauses:

15. The parties acknowledge and agree that except as herein expressed or stated, no representation, statement, understanding, promise or agreement has been made or exists, either oral or in writing, which in any way affects the Bank’s right to obtain satisfaction of the indebtedness due to it or to induce the parties to enter into this Agreement.

16. The Borrowers jointly and severally acknowledge that they have no claims for set-off, counterclaim or damages on any basis whatsoever against the Bank, its officers, employees, consultants and representatives, and if any such claims for set-off, counterclaim for damages or losses exist, they are hereby expressly released and discharged.

[21] Pursuant to the terms of the Full and Final Release, the Borrowers further released and discharged the Bank and the Receiver from:

…any and all actions, causes of action, claims, debts, accounts, covenants, contracts, interests and demands for damages, indemnity, costs, interest loss or injury of every nature and kind howsoever arising which the Releasors may now have, or may hereafter have arising out of the advancing of credit facilities by the Bank of Montréal to the Releasors, the administration and enforcement of such indebtedness, and all matters related to such indebtedness including, without restricting the generality of the foregoing, all matters that have occurred since the Release executed by the Releasors on November 28, 2012 including all damages not known but which may arise in the future.

[22] There is no evidence that, prior to executing the Amended Settlement Agreement, the Borrowers complained that the Bank had previously made any misrepresentations which induced them to enter into the prior Settlement Agreement. The Borrowers remained silent regarding these alleged misrepresentations despite the fact that, according to them, they became aware of material misrepresentations immediately upon taking possession of the Farm from the Receiver and, in any event, prior to the execution of the Amended Settlement Agreement. Moreover, Jean- Luc Cardinal remained on the Farm during the period of Receivership. His affidavits filed in November 2011 and before the First Settlement Agreement detailed his complaints about the Receiver’s actions.

[23] Further, the FULL AND FINAL RELEASE to the Amended Agreement specifically provided:

THE RELEASORS ACKNOWLEDGE that they had sufficient time and opportunity to seek independent legal and other professional advice with respect to the terms of this release and the Amending Agreement and that they are fully satisfied with all information provided to them which affected their decision to execute this Release and the Amending Agreement and further acknowledge that they have no outstanding requests for information. The Releasors acknowledge that they fully understand the terms and voluntarily accept the terms of this Release and the Amending Agreement with the intention they will be bound by them. The Releasors confirm that they are making a full and final compromise, adjustment and settlement of all claims as set out in this Release. The Releasors acknowledge that, except as set out in this Release and the Amending Agreement, there has been no representation of fact or opinion, threat or inducement to them which affected their decision to execute this Release.

[24] In accordance with the terms of the Amended Settlement Agreement, the Borrowers sold the remaining assets on or about May 8, 2012 by negotiating the necessary Agreements of purchase and sale. At no point prior to that did they take any steps to avoid the sale on the grounds now alleged. The Borrowers continued to be represented by their counsel when they entered into these Agreements. The parties acted pursuant to the terms of the Amended Settlement Agreement.

[25] On October 3, 2013, the Borrowers commenced the L’Orignal action seeking over $30,000,000 in damages against the Bank and the Receiver wherein they allege that the Bank had breached the Third Forbearance Agreement and had improperly sought the Order appointing the Receiver. There are allegations of negligence against the Receiver with respect to its seven week operation of the Farm during its period of Receivership which the Plaintiffs claim caused their ultimate loss of the Farm.

[26] The Defendants then brought their Motion for Summary Judgment on March 24, 2015 wherein they pleaded that claims being advanced in that action had been settled and judicially determined in the previous proceedings. In Response, the Borrowers alleged that the Bank and/or the Receiver made certain misrepresentations at the November 23 and 24, 2011 settlement meetings regarding various financial affairs of the Farm which induced them to enter into this Settlement Agreement.

[27] The Borrowers then initiated their own Motion on May 29, 2015 to set aside the November 28, 2011 Agreement and Termination Order. They rely on their allegations filed in response to the summary judgment motion. By agreement of the parties, the motions were scheduled to be heard by me.

[28] A motion to set aside and order is governed by Rule 59.06(2) of the Rules of Civil Procedure which provides:

Setting Aside or Varying

(2) A party who seeks to,

(a) have an order set aside or varied on the ground of fraud or of facts arising or discovered after it was made;

(b) suspend the operation of an order;

(c) carry an order into operation; or

(d) obtain other relief than that originally awarded,

may make a motion in the proceeding for the relief claimed.

[29] The Borrowers argue that the Receiver owed them a fiduciary duty and was required to disclose all relevant information to them in the course of their negotiations and settlement. They claim that the Receiver did not make this disclosure and misrepresented the financial situation with respect to the Farm. They maintain that a negligent misrepresentation is sufficient to set aside the Order made on November 28, 2011 and they need not establish fraud.

[30] They rely on the decision of Master Sandler in Chitel v. Rothbart, 1984 CarswellOnt 358 which held that a consent order can be set aside on the grounds of common mistake, misrepresentations or fraud, or on any other ground which would invalidate a contract.

[31] They further cite this passage from Halsbury’s Laws of England which can be found in Canadian Imperial Bank of Commerce v. White Lake Services Ltd., 1982 CarswellNS 91 at para. 14:

A judgment given or an order made on consent may be set aside and a fresh action brought for the purpose, on any grounds which would invalidate a compromise not contained in a judgment or order. Compromises have been set aside on the ground that the agreement was illegal as against public policy, or was obtained by fraud or misrepresentation, or nondisclosure of a material fact which there was an obligation to disclose, or by duress or was concluded under mutual mistake of fact, ignorance of a material fact, or without authority.

[32] The Bank and the Receiver submit that the Borrowers must establish fraud and rely on the decision of this Court in International Corona Resources Ltd. v. LAC Minerals Ltd. [1988] O.J. No. 3188 at paras. 50-63.

[33] The misrepresentations are the only basis argued by the Borrowers to set aside the Termination Order. These have been summarized by the parties under four categories.

Legal/Professional Fees

[34] According to the Borrower, the first misrepresentation was that that total amount of legal/professional fees would be $257,862. The Bank and the Receiver note that the Third Forbearance Agreement disclosed that the legal/professional fees of the Bank up to August 24, 2011 were already at $159,700.10.

[35] It is evident that after that date, the Bank had to incur fees to appoint a Receiver and then respond to the Borrowers’ Motion. The Receiver had incurred professional and legal fees in the course of its Receivership. These fees in the amount of $209,108.62, ($45,418.98 legal + Receiver’s remuneration of $168,986.25) were fully disclosed in the Receiver’s Statement of Receipts and Disbursements dated November 28, 2011. The Borrowers themselves sought $200,000 for their own counsel for their work in the motion to set aside the receivership and entering into the MOU and the Settlement Agreement. This amount was also included in the Receiver’s Statement of Receipts and Disbursements.

[36] If the amount sought by the Borrowers is included, legal and professional fees totalled $586,808.72. As such, I find that the total quantum disclosed to the Borrowers on the date the Settlement Agreement and approved by the Court was no less than $568,808.72.

Other Expenses of the Receiver

[37] The second misrepresentation alleged was that other expenses of the Receiver would be $200,000. The Receiver’s Statement of Receipts and Disbursements dated November 28, 2011 disclosed other expenses of $330,838.11, after deducting the $209,018.62 for legal and professional expenses. Paragraph 8 of the Settlement Agreement also provides that the Receiver would also pay amounts owed to Belcan of approximately $170,000. These amounts were owed to Belcan prior to the Receivership. I find that these amounts, fully disclosed to the Borrowers on the date of the Settlement Agreement, grossly exceed the $200,000 claimed by Mr. Cardinal.

Income From The Harvest

[38] The third alleged misrepresentation claimed by Mr. Cardinal was that the harvest would generate income of $1,000,000. In his affidavit of November 20, 2011, he acknowledged at paragraph 29 that there would be losses of at least $117,000 regarding the soya crop for that year. I find that the Statement of Receipts and Disbursements clearly disclose revenues far below $1,000,000; namely in the amount of $684,177.98, and this amount also includes $298,039.37 from the sale of property.

Cash Flow Shortfall

[39] The fourth alleged misrepresentation refers to an unexpected cash flow shortfall of $43,703.29. I find that the November 28, 2011 statement discloses the fact that the Receiver had previously received the government subsidy of $30,000 and the electricity rebate in the amount of $13,703.29 for a total of $43,703.29.

Analysis and Conclusion

[40] I agree that a Receiver owes a duty to make full disclosure of all documents in its possession which are relevant to the issues in the Receivership. I also agree that a misrepresentation may be sufficient to set aside an order made on consent, but the evidence of any such misrepresentations must meet a strict test.

[41] Since the Borrowers now wish to pursue a claim in damages against the Receiver, there is no issue that they need retroactive leave to commence their action against the Receiver. When the actions of a Receiver form the basis of intended proceedings have been approved by the Court, as they have in this case, a Plaintiff must demonstrate a strong prima facie case to obtain that leave. In Bank of America Canada v. Willann Investment Ltd. [1993] O.J. No. 3039, the Court concluded that a strict test is required as there would be little point in a Receiver seeking an order approving its conduct since the purpose of that order is to provide the Receiver a measure of judicial protection. This strong prima facie test was applied by the Court of Appeal in 1117387 Ontario Inc. v. National Trust Co., 2010 ONCA 340. This test is applicable here. Although the Borrowers allege misrepresentations by both the Bank and the Receiver, their Factum targets the Receiver only.

[42] Moreover, as the Supreme Court of Canada held in the in the case of Ronald Elwyn Lister Ltd. v. Dunlop Canada Ltd., [1982] 1 S.C.R. at paras. 52-54, it will be very difficult to find a legal principle to vitiate an agreement where parties experienced in business with full knowledge of the facts enter into a settlement agreement, negotiated and drafted by their respective solicitors. This is particularly so when the Agreement has been fully acted upon and executed by the parties and approved by the Court. Here we have parties who executed three Forbearance Agreements and two Settlement Agreements and who consented to a Termination Order. The last Full and Final Release was executed after the Termination Order that the Borrowers sought to set aside and it contains clear language that the Releasors release the Bank and the Receiver for all matters arising since the “Release executed by the Releasors on November 28, 2012, including all damages not known but which may arise in the future.”

[43] The Bank and the Receiver deny that they made any of the representations as alleged. There is no independent corroboration of Mr. Cardinal’s evidence. He admitted on cross-examination that at least two of his counsel were present at all times during his discussions with the Bank and/or the Receiver. Neither of them provided any evidence. Mr Cardinal claims that the misrepresentations were critical because there was a $700,000 shortfall and, as result, he was unable to keep the Farm, a fact he claims was known to the Bank and to the Receiver.

[44] There is no reference in any of the documentation with regard to the ongoing viability of the Farm or to projections of revenues or expenses. Pursuant to paragraph 2 of the First Settlement Agreement of November 24, 2011, the Borrowers were to sever a piece of property consisting of approximately 150 acres, and within five business days of the severance being completed, the Borrowers were to convey or cause to be conveyed that property together with their milk quota, herd, bio-digester, equipment, buildings and accounts receivable to a third party. Paragraph 3 directed that the Borrowers would then enter into a series of unconditional agreements of purchase and sale set for another 340 acres.

[45] The First Settlement Agreement expressly provided that the Receiver would retain the October and November milk proceeds and would keep all proceeds from the sale of the 2011 crops, except for $200,000 that would be remitted to the Borrowers to pay their legal fees. In cross-examination, Mr. Cardinal admitted that any surplus generated by the Receivership would be paid to his Proposal Trustee for the benefit of other creditors who were owed approximately $800,000. This was also confirmed in the letter from his counsel dated November 24th, 2011.

[46] In the Amending Agreement dated April 3, 2012, the Borrowers acknowledged that they would be entering into an agreement of purchase and sale pursuant to which their remaining Farm was to be sold. These agreements make it clear that the purpose of the discussions and the settlements was to allow the Borrowers, through the sale of the Farm’s property and assets, to obtain sufficient funds to achieve a settlement with the Bank and potentially with other creditors.

[47] There was no reason for the Receiver to assess the viability of the Farm as an ongoing concern or to provide any information regarding the Farm’s continued operations beyond the Statement of Receipts and Disbursements that it provided. The Borrowers went on to sell the remaining parcels of land with the assistance of the same counsel who helped negotiate the Settlement Agreements.

[48] There is no evidence of any misrepresentation beyond Mr. Cardinal’s self-serving statements that would justify the setting aside of the Consent Termination Order that was obtained on November 28, 2011. The Borrowers continued to sign Full and Final Releases that contained clear language that no representations had been made to induce them into signing the agreements they entered into.

[49] More importantly, I find that the Receiver fulfilled its obligation to disclose relevant information, and the Borrowers and their counsel consented to an order that approved the First and Final Report that contained detailed information. As noted in my review of the alleged misrepresentations, the First and Final Report is a complete answer to the Borrower’s claims of misrepresentation. The Borrowers’ counsel submits that it was not reasonable to expect that Borrowers would have reviewed that Statement of Receipts and Disbursements given the volume of material that was filed with the Court on November 28, 2011, the same date that they signed the Full and Final Releases. I reject that argument.

[50] Even if I accept that Mr. Cardinal did not look at that Statement until December 1, 2011, he was by then in possession of the Farm, he had received full disclosure and if this information varied in any way from the representations he claims were made to him during the negotiations, he would have been aware of any misrepresentations at that time. His counsel then sought and received additional information about the milk quota only. Mr. Cardinal then went on to sign an Amended Settlement Agreement and one more Full and Final Release on April 3, 2012 that contained this language:

“…they (Releasors) are fully satisfied with all information provided to them which affected their decision to execute this Release and the Amending Agreement and further acknowledge that they have no outstanding requests for information… The Releasors acknowledge and that except as set out in this Release and the Amending Agreement, there has been no representation of fact or opinion, threat or inducement to them which affected their decision to execute this Release. ”

[51] The Borrowers may regret their signing of the Agreements and their loss of a family Farm that has been in their family for over one hundred years, but that is not a basis to set aside an Agreement approved by the parties, their counsel and the Court and later ratified in an Amended Settlement Agreement. As a result, the Borrowers’ motion to set aside the Termination Order is dismissed; there is no genuine issue requiring a trial and summary judgment is granted dismissing the claims against the Bank and the Receiver in the subsequent action by application of the doctrine of res judicata.

[52] In the absence of any Agreement, the parties may make brief written submissions with respect to costs as follows. The successful Bank and Receiver will provide me with their submissions within 20 days and the Borrowers, 20 days thereafter.

Mr. Justice Robert N. Beaudoin

Released: March 21, 2016

CITATION: Bank of Montreal v. Cardinal, 2016 ONSC 1980

COURT FILE NO.: 11-52499 Ottawa/737-2013 L’Orignal

DATE: 20160321

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BANK OF MONTREAL

Applicant

– and –

JEAN-LUC CARDINAL and THE ESTATE OF RAYMOND CARDINAL, operating as FERME LANIDRAC

Respondents

AND BETWEEN:

JEAN-LUC CARDINAL, LINDA CARDINAL, LA SUCCESSION DU FEU RAYMOND CARDINAL ET FERME LANIDRAC

Plaintiffs

– and –

LA BANQUE DE MONTRÉAL et SURGESON CARSON ASSOICATES, INC.

Defendants

REASONS FOR decision

Beaudoin J.

Released: March 21, 2016