Court File and Parties

COURT FILE NO.: CV-15-205-00 DATE: 20161012 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ARNOLD HENNESSY HOLDINGS INCORPORATED Plaintiff – and – FLAPPERLESS INCORPORATED and PHILIP HENNESSY Defendants

Counsel: G. Edward Lloyd, for the Plaintiff S. Daniel Baldwin, for the Defendants

HEARD at Kingston: 2 September 2016

Reasons for Decision

(Plaintiff’s Motion for Summary Judgment)

mew j.

[1] Arnold Hennessy was an Ontario inventor who held the right and interest in patents and technology developed by him, including the rights to certain “tip-tank” toilet technology. The main feature of this technology is the absence of a flapper outlet. The result is what is claimed to be a more water-efficient flushing toilet.

[2] Arnold Hennessy assigned all of his personal right and interest in the patents and technology which he had developed to a corporation, Arnold Hennessy Holdings Inc., which was wholly owned by him.

[3] Through a series of agreements, commencing in 1998, Hennessy Holdings licensed another company, Flapperless Incorporated, to commercialise the toilet tank technology developed by Arnold Hennessy. Those agreements provided for the payment of royalties by Flapperless to Hennessy Holdings.

[4] At the outset, the shareholders of Flapperless included Arnold Hennessy and his nephew, Philip Hennessy. At some later date, Arnold Hennessy’s shareholding was transferred to Philip Hennessy and another individual. Philip Hennessy is currently a director and president of Flapperless.

[5] Arnold Hennessy died on 20 August 2014. Philip Hennessy describes his late uncle as his business partner and his friend, with whom he enjoyed a close and meaningful personal and professional relationship up to the time of his uncle’s death.

[6] A dispute has now arisen as to what, if any, royalties are payable by the defendants to the plaintiff.

[7] The written agreement between the parties was amended and restated as of 1 October 2003, and further amended, by written agreement, on 2 February 2006. The agreement incorporates an “entire agreement” provision and, accordingly, the plaintiff says that its entitlement to the payment of royalties is a straightforward matter of contractual interpretation and, therefore, readily susceptible to summary judgment.

[8] The defendants say that the issue is not so straightforward. They raise a number of concerns, namely:

a. whether the claim should properly be brought in the name of the Estate of Arnold Hennessy, rather than Hennessy Holdings; b. whether the action, which was commenced on 30 April 2015, is statute barred; c. whether Flapperless and Arnold Hennessy entered into an enforceable oral agreement amending the terms of the written licence agreement; and d. whether there are other procedural and evidentiary issues which should preclude the granting of summary judgement at this time.

[9] As already indicated, the parties had governed their business relationship through written agreements, the first of which was entered into in 1998.

[10] On the face of the written agreements between the plaintiff and Flapperless, Flapperless was required to pay Hennessy Holdings US $120,000 annually during the lifetime of Arnold Hennessy. After the death of Arnold Hennessy, the agreement provided that 50% of the annual royalty payment of $120,000 would be paid to Hennessy Holdings and the other 50% to Philip Hennessy personally.

[11] As a result of the 2006 amendments, the parties also agreed that upon the incapacity or death of Arnold Hennessy, the intellectual property rights covered by the agreements would become the sole and exclusive property of Philip Hennessy.

[12] From 2013 on, Flapperless reduced the amount that it paid to US $60,000 per year (or the net equivalent thereof) and, when Arnold Hennessy died, ceased royalty payments altogether.

[13] Briefly stated, the defendants say that Philip Hennessy and Arnold Hennessy came to an oral agreement in late 2012 to reduce royalties from $120,000 per year to $60,000 per year and further provided that no royalties would be payable after the death of Arnold Hennessy because, under the agreements, the intellectual property then became the sole and exclusive property of Philip Hennessy.

Preliminary Objections to the Motion Proceeding

[14] The defendants have raised numerous arguments in support of their position that summary judgment is not appropriate at this juncture.

[15] In no particular order, these arguments include the following:

a. The plaintiff has failed to disclose the corporate file; b. The plaintiff has failed to provide documentary discovery; c. The amended agreement of 2006 was drafted by a lawyer following a meeting on 2 February 2006, attended by Philip Hennessy and Arnold Hennessy, which Philip Hennessy says was taped. The tape has not been produced. It is possible that the tape is contained in the corporate file of the plaintiff; d. The plaintiff has failed to produce certain medical information pertaining to the medical status and, hence, competency of Arnold Hennessy at material times; e. The current lawyer of record for the plaintiff also acted for Arnold Hennessy in a personal capacity and also advised Mr. Hennessy’s daughter, Ruth Bailey, in connection with the request made by Arnold Hennessy in May or June 2011 to his then lawyer seeking the revocation of a power of attorney. The lawyer is a potential witness and such, should not be acting as counsel on the summary judgment motion.

[16] In my view, many of these preliminary issues are more tactical than substantive, and none of them should preclude the motion from proceeding on its merits.

Role of Counsel

[17] Counsel for the plaintiff on this motion is not, in fact, a witness on the motion. He may or may not in due course be a witness should this matter proceed to trial. But that is not a sufficient basis to disqualify him from acting at the present time.

Disclosure

[18] Many of the complaints about disclosure and discovery which are made by the defendants now were also made when the parties appeared before Madam Justice MacLeod-Beliveau to obtain directions and a timetable pertaining to this summary judgment motion. MacLeod-Beliveau J. expressly declined to order the plaintiff to deliver an affidavit of documents, referring to the decisions of Fehr v. Sun Life Assurance Company of Canada, 2014 ONSC 2183 and 1870553 Ontario Inc. v. Kiwi Kraze Franchise Co. Ltd. 2015 ONSC 1632 as instructive. Furthermore, the defendants cross-examined the deponents of the plaintiff’s affidavits and requested production of some of the very things that they complain have not been produced. Yet no motion was brought compelling the productions that were sought.

[19] Knowing full well that each party has an obligation to put its best foot forward, the defendants, if they genuinely felt that their interests would be prejudiced if certain documents and records (which they were able to clearly identify) were not before the court, should have asked for and, if necessary, sought an order for the production of those documents and records (see, generally, Thyssenkrupp Elevator (Canada) Ltd. v Amos, 2014 ONSC 3910, per Myers J. at para 34). They cannot complain, not having done so.

Admissibility of Doctors’ Letters

[20] The motion record also contains letters pertaining to Arnold Hennessy written by two physicians. The letters were not written in contemplation of this litigation. Neither of these physicians are tendered as experts and the requirements of Rule 53 of the Rules of Civil Procedure have therefore not been complied with. The defendants argue that these letters are, at best, business records, and cannot be relied upon as proof of the truth of their contents (indeed, an issue is taken with respect to one of the letters as to whether it is a business record, because it was a letter written in response to a request for a medical report made by the lawyer representing Ruth Bailey at the time, and now representing the plaintiff, regarding the competency of Arnold Hennessy to revoke his daughter’s power of attorney over his property).

[21] I ruled that, in my view, the letters were part of the doctors’ business records. I allowed argument of the summary judgment motion to proceed with the letters remaining part of the record, but reserved the right to determine whether, and if so, how much, weight or reliance should be attached to the letters’ contents.

Suitability of Summary Judgment

[22] As Myers J. succinctly put it in Thyssenkrupp Elevator, at para. 38, on a motion for summary judgment the judge should ask:

Am I able to reach a fair and just determination on the merits of this issue by finding the necessary facts, applying the necessary law, in a proportionate, more expeditious and less expensive means than imposing the full trial model? (Hryniak, at para. 49) Do I have confidence that I can find the necessary facts? (Hryniak, at para. 50) Would better evidence necessarily be available at trial? (Hryniak at para. 58)

[23] In my view, and having due regard not only to the paragraphs in Hryniak v. Mauldin, 2014 SCC 7 referred to by Myers J., but also to the overarching question of whether the motion provides sufficient evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure (Hryniak at para 66), I am satisfied that my answers to the rhetorical questions posed by my colleague are ‘yes’, ‘yes’ and ‘no’.

Is Hennessy Holdings the Proper Plaintiff?

[24] There is no doubt that the agreements which form the subject of this action were entered into between Hennessy Holdings and Flapperless. However, it appears that for a number of years, the royalty payments were made not to the plaintiff but, rather, to Arnold Hennessy personally. Indeed, the evidence of Philip Hennessy is that Arnold Hennessy was paid as an employee of Flapperless. Flapperless therefore remitted CPP and EI contributions and deducted income tax from the cheques it wrote to Arnold Hennessy.

[25] The defendants argue that the significance of this change in the arrangements for payment from that contemplated by the agreement is twofold.

[26] Firstly, the defendants say that the oral agreement to pay royalties personally to Arnold Hennessy constitutes strong evidence that the payment provisions under the written licence agreements no longer represented the intentions of the parties.

[27] Secondly, the effect of this change to the payment obligation under the written agreements was to replace the plaintiff as the party entitled to the receipt of royalty payments with Arnold Hennessy personally. Consequently, any action to recover royalty payments should have been advanced by Mr. Hennessy’s estate, rather than by the plaintiff.

[28] While it was suggested in argument that there had been a written draft agreement, the effect of which would have been to require royalty payments to be made by Mr. Hennessy personally rather than Hennessy Holdings, there is no evidence that such written agreement was ever, in fact, finalised.

[29] It was also suggested, during the course of argument, that there may have been some tax credit benefits which accrued to Flapperless if payments to Arnold Henmnessey were made by way of salary to Arnold Hennessy rather than through payment of royalties to his corporation and that, accordingly, the arrangement was for the benefit of Flapperless rather than Arnold Hennessy.

[30] Be all of that as may, the arrangement whereby payment of royalties to which the plaintiff was entitled was made to Arnold Hennessy personally was clearly satisfactory to both parties.

[31] I do not regard this arrangement as supporting the contention that because Arnold Hennessy as principal of the plaintiff asked or agreed to have royalty payments made to him personally rather than to his holding company that it follows that there was an oral amendment to the licence agreements. As the party entitled to payment of royalties, and in the absence of any evidence to the contrary, it was, in my view, open to Arnold Hennessy to nominate anyone he wanted to receive those payments on Hennessy Holdings’ behalf, including himself personally.

[32] Nor does this arrangement validate the defendants’ argument that there were other, legally binding, oral amendments to the licence agreements.

[33] It follows that I do not accept that the Estate of Arnold Hennessy is or should be the true plaintiff in this matter. In my view, the evidentiary record does not support the contention that the plaintiff has, either by words or by deeds, foregone the right to seek enforcement of its agreement with Flapperless Inc.

Is the Action Statute Barred?

[34] A portion of the argument directed to the limitation issue assumed that Arnold Hennessy was (or would be found to be) the proper plaintiff. As I have decided that Hennessy Holdings is an appropriate plaintiff, my discussion and analysis of the arguments on limitation pertains only to Hennessy Holdings.

[35] The presumptive date on which the two year limitation period runs is the day on which the person with the claim first knew that injury, loss or damage had occurred: Limitations Act, 2002, c.24, Sch. B, s. 5(2).

[36] The first indication that Flapperless had reduced the amount of the royalty payable to the plaintiff was when it wrote a cheque payable to Arnold Hennessy, dated 5 March 2013, for $8,250.00. This was meant to be the royalty payment for the first quarter of 2013 and to represent a gross payment of $15,000.

[37] According to Philip Hennessy, this first reduced royalty payment would have constituted notification to the plaintiff that the amount of the royalty had been changed.

[38] Specifically, the defendants argue that receipt of the cheque for $8,250 in March 2013 would have constituted notification to the plaintiff that the quarterly royalty had been reduced from $30,000 to $15,000.

[39] There are a number of problems with this reasoning.

[40] Firstly, there is a factual dispute as to when the $8,250 cheque came to the attention of the plaintiff.

[41] Prior to 2013, royalty cheques had been delivered by Philip Hennessy to Arnold Hennessy when Philip Hennessy went in to visit him at the retirement home he was living in. Arnold Hennessy had moved into the retirement home in May 2011. Arnold Hennessy’s daughter, Ruth Bailey, asserts that her father had been diagnosed with Alzheimer’s disease in 2009. Although there is a dispute about the extent to which his mental faculties had, in fact, deteriorated, the unchallenged evidence of Ms. Bailey is that after her father moved into the retirement home in May 2011, she would take royalty cheques from her father when she visited him and would pay them into the bank for him.

[42] In March 2013, unable to find the royalty cheque for the last quarter of 2012, Ruth Bailey says that she telephoned Philip Hennessy to ask him to send a replacement for the missing cheque and to send all future cheques directly to her. Philip Hennessy was not there when Ms. Bailey called, so she left a message with Mr. Hennessy’s wife.

[43] Ms. Bailey testifies that she received the missing cheque in April 2013. She banked it on 15 April 2013. It was in the amount of $16,500 (Canadian funds) which Ms. Bailey took to be the net equivalent of a gross amount of $30,000.

[44] The next cheque which Ms. Bailey received and deposited was the cheque for $8,250. She deposited it on 24 May 2013. Her evidence is that she “would have received this cheque very shortly before that date as I always banked the cheques straight away.” Ms. Bailey did not question the reduction in the amount of the royalty payment. She says that she assumed the payment was in accordance with the 2006 agreement.

[45] The defendants say that even if Ms. Bailey did not appreciate that the cheque represented a change from what the written agreement required, both Arnold Hennessy and Ms. Bailey’s husband, John Dolland (who is shown in the corporation profile report for Arnold Hennessy Holdings Inc. as the company’s president), were familiar with the agreements should have realised that the reduced payment was in breach of the agreements.

[46] Assuming, for the sake of argument, that upon receipt of the cheque in the reduced amount, Ms. Bailey or Mr. Dolland knew or should have known that the royalty obligations of Flapperless under the agreements had been breached, there would only be a limitation issue if the cheque was received and looked at prior to 30 April 2013 (the present action having been commenced on 30 April 2015).

[47] The defendants argue that the factual dispute about when Ms. Bailey received the cheque for the reduced amount that can only be resolved at trial.

[48] I disagree.

[49] The best evidence that Philip Hennessy can muster is that “In early March of 2013, the first reduced royalty cheque … was drafted, sent, and made payable to Uncle Arnold.”

[50] Although Mr. Hennessy goes on in his affidavit to state his belief that Ms. Bailey received or had knowledge of the first reduced royalty cheque in March 2013, and that she had “material knowledge at least as of January 2013, if not sooner) that royalty cheques were to be reduced from greater amounts than had once been paid, there is no other evidence that corroborates Mr. Hennessy’s views.

[51] On the other hand, Ms. Bailey is able to point to her well established practice of banking cheques straight away after receipt. The first reduced cheque was banked on 24 May 2013. Ms. Bailey was cross-examined on her affidavit. Her evidence on this point was unshaken.

[52] It is not necessary to have a trial to resolve this evidentiary conflict. From the record that is available to me, I am able to confidently conclude that, on a balance of probabilities, Ms. Bailey received the cheque for the reduced amount on or shortly before 24 May 2013, and in any event less than two years prior to the commencement of this action.

[53] Even if I am wrong about the date that the plaintiff, through Ruth Bailey, received the cheque for the reduced amount, I do not accept that receipt of the cheque constituted immediate notice to the that Flapperless had breached its royalty payment obligations. The defendant relies upon the plaintiff to have known that the amount of the cheque was for a reduced amount (which Ms. Bailey and Mr. Dolland acknowledge) and to have immediately realised that the reduction was a breach of the agreement. But there is nothing else about the reduction stated in writing.

[54] The presumption that the limitation period runs from the date that the breach occurred can be displaced if a reasonable person with the abilities and in the position of the plaintiff would not have known of the breach until a later date (Limitations Act, 2002, s. 5(1)(b)).

[55] Ms. Bailey says that it was not until immediately after the death of Arnold Hennessy in August 2104 that she reviewed the agreements and questioned Philip Hennessy about the reduced payment. Only then did Philip Hennessy tell her about the oral agreement which he says he had entered into with Arnold Hennessy to reduce royalties.

[56] I accept the evidence of Ms. Bailey and Mr. Dolland, that when the first cheque for the reduced amount was received they did not immediately realise that Flapperless was in breach of its payment obligation. They assumed, wrongly as it turns out, that there was nothing untoward. I do not find their initial lack of appreciation that there had been a breach to be unreasonable.

[57] I do note that on 21 January 2015 the plaintiff’s solicitor wrote to the defendants’ solicitors stating that when Arnold Hennessy had misplaced what the letter described as the “December 2012 cheque”, Ruth Bailey had requested cheques from Flapperless to be forwarded to her in January 2013. The letter continues “I would like to note that it was at this time that the quarterly cheques received from Flapperless would cut in half.”

[58] As the affidavit of Ruth Bailey attests, it was not until February 2013 that she made an inquiry about the royalty cheque for the fourth quarter of 2012 and not until well after that that she received and banked the cheque for the first quarter of 2013. To the extent that the lawyer’s letter suggests a different chronology, Ms. Bailey’s affidavit is the better evidence, and I accept it.

[59] To summarise, based upon my finding as to when the cheque was received, the action was commenced less than two years before the plaintiff, or anyone acting on the plaintiff’s behalf, knew that “injury, loss or damage had occurred.”

[60] Furthermore, I would not, in any event, fix the date of receipt of reduced cheque as the date upon which the claim was discovered. I would not go so far as to say that the claim could not have reasonably been discovered until as late as August 2014 when Ms. Bailey, as trustee of her recently deceased father’s estate, went through his papers and realised that the payments had not been made in accordance with the agreement. But it was, in my view, reasonable for Ms. Bailey and Mr. Dolland not to have twigged to the fact that there was something wrong until, at the earliest, more than one reduced payment had been received by them on the plaintiff’s behalf.

[61] I find that the limitation defence raised by the defendants is, accordingly, without merit and should be finally disposed of on this summary judgment motion.

The Oral Agreement

[62] The only evidence that an oral agreement was entered into comes from Philip Hennessy. Arnold Hennessy, of course, is no longer available to provide his perspective.

[63] Although much was made in argument about Arnold Hennessy’s mental capacity in and before late 2012, which was when the agreement was said to have been made, I have concluded that a determination of whether or not an oral agreement was made and, if so, what its effect would be, does not require me to resolve any question relating to the late Mr. Hennessy’s capacity.

[64] Philip Hennessy explains the rationale behind the oral agreement which he says was entered into: revenues were reducing and the royalty payments were becoming an increasingly larger impediment to the overall profitability of the business of Flapperless. Specifically, Philip Hennessy says this:

In November 2012, when we discussed projected sales, I advised him that we were losing a contract with a major U.S. distributor which would see sales reduced by 50%. Uncle Arnold responded by stating he did not wish to receive nor he did need $120,000.00 per annum in royalties in the face of reduced sales.

It was agreed that we would reduce his royalties by 50% and pay same in CDN dollars to reflect the decline in sales. As stated, it was never the intention of the parties to see royalties paid in excess of proceeds. Uncle Arnold fully understood the terms of the oral agreement and their implications.

[65] All previous amendments to the agreements between Flapperless and the plaintiff had been effected in writing. The “Entire Agreement” provision of the agreement provided that “This Agreement, as amended and restated … constitutes the entire agreement and understanding” between the parties and that “[n]o modification, supplement or waiver of this Agreement shall be binding unless executed in writing by authorized officers of each party”.

[66] Notwithstanding this, the defendants argue that there was an oral agreement as described and that it should be given full effect. They rely on the decision of the Court of Appeal in Shelanu Inc. v. Print Three Franchising Corp. (2003), 64 O.R. (3d) 533. That case involved a franchise agreement and an alleged oral agreement to entitle a franchisee to receive a greater royalty rebate than that specified in the written agreement between the parties. Unlike in the present case, the existence of the oral agreement and its terms were conceded. However, the franchisee asked the court to enforce the written agreement, rather than the oral agreement, due to the existence of an “entire agreement” provision in their written contract. The Court of Appeal noted, at para. 54:

Where the parties have, by their subsequent course of conduct, amended the written agreement so that it no longer represents the intention of the parties, the court will refuse to enforce the written agreement. This is so even in the face of a clause requiring changes to the agreement to be in writing.

[67] The difficulty faced by the defendants in this case is not just the application of legal principle but, also, in persuading the court that, on a balance of probabilities, there was an oral agreement. We have only Philip Hennessy’s word for it.

[68] Furthermore, unlike in Shelanu, which involved a contract of adhesion, the present case involves an agreement entered into between two parties of apparently similar bargaining authority, both of whom were represented by lawyers when they entered into their written agreements. While Arnold and Philip Hennessy no doubt had a close personal and working relationship, they had the good sense to memorialise their business arrangements with each other in writing. The oral agreement asserted by Philip Hennessy would represent a marked departure from previous practice (in making this observation, I reiterate my earlier expressed view that the diversion of royalty payments from the plaintiff to Arnold Hennessy personally did not represent an oral agreement to amend the licence agreements).

[69] Whether or not Philip Hennessy felt that his uncle was struggling in terms of his mental acuity, he would, or certainly should, have realised that there would be little or no other evidence of the oral agreement once Arnold Hennessy had either died or become incapable.

[70] The evidence of Ms. Bailey and Mr. Dolland is that neither them were aware of any oral agreement to change the royalty arrangements until after Arnold Hennessy’s death, when Philip Hennessy told them about the agreement he said he had made.

[71] Even if there was an oral agreement, Philip Hennessy equivocated over its terms. When he was cross-examined, he was asked to confirm that it was his position that once he owned the intellectual property he would no longer have to make any royalty payments. The following exchange occurred:

Q. Okay. Is it your position that once you own the patent, you don't have to make any more payments? A. That in itself is actually unclear to me. Q. Okay. So, 50% of the payment to you, and 50% to - to Arnold Hennessy Holdings, that's unclear? A. It is. Q. Okay. A. Because my Uncle and I never went that far. We never discussed it that far. We never went beyond the total amount. We never went on into .... We didn't. So, 50% of what, is the way - that's - in my mind, it's 50% of what? Is it - is there something - probably. 50% of what?

[72] As the plaintiff observes in its factum, Philip Hennessy knew perfectly well that he should be paying 50% of something.

[73] In the circumstances, I am not prepared to accept Philip Hennessy’s uncorroborated evidence that there was an oral agreement to vary the terms of the written agreements between the parties. I find as a fact that there was no such agreement.

[74] Consequently, the effect of the “Entire Agreement” clause is academic.

Claim Against Philip Hennessy Personally

[75] Although the 2003 Licence Agreement was between Hennessy Holdings and Flapperless only, both Arnold Hennessy and Philip Hennessy were parties to the February 2006 amending agreement. Furthermore the 2006 amendments provided for the transfer to Philip of the plaintiff’s intellectual property rights if Arnold Hennessy became incapable or died. Philip Hennessy is, accordingly, a proper party to the action. However, I find no basis to pierce the corporate veil to make Philip Hennessy personally liable for the financial obligations resulting from Flapperless breaching its contract with the plaintiff.

Damages and Other Relief

[76] Flapperless should have continued paying the plaintiff royalties at the rate of US $120,000.00 in 2013 and 2014 until Arnold Hennessy’s death and, thereafter, paid US $60,000.00 per annum for the term of 2003 Licence Agreement, as amended by the 2006 Amending Agreement, for the term of those agreements. The plaintiff is entitled to judgment against Flapperless based on paragraphs 1.1 to 1.5 of its amended statement of claim.

[77] The plaintiff also asks, in paragraph 1.6 of its prayer for relief, for a declaration that until all royalty payments due to the plaintiff have been made, the plaintiff’s right, title and interest in and to the licensed patents and the licensed technology has not and shall not become the property of Philip Hennessy.

[78] Article 12.3 of the 2003 Licence Agreement contemplates, as an alternative to termination of the agreement for breach of contract, the recovery of damages or the exercise of any other remedy. The article talks about rights and obligations of the “Licensor” (Hennessy Holdings) and the “Licensee” (Flapperless). It is not clear to me the extent to which Philip Hennessy personally would be bound by Article 12.3.

[79] The plaintiff has elected not to terminate the agreement. Nevertheless, it seeks to effectively enjoin the transfer of the intellectual property to Philip Hennessy, which the 2006 Amending Agreement provides for upon the incapacity or death of Arnold Hennessy, until Flapperless has remedied its indebtedness to the plaintiff. Aside from the uncertain application of Article 12.3 to Philip Hennessy personally, a difficulty with the plaintiff’s request is that upon Arnold Hennessy’s death the intellectual property was, by the terms of the 2006 amending agreement, transferred to Philip. The subsequent pursuit of remedies by the plaintiff does not have the effect of reversing what has already occurred. By analogy to injunctive relief, even if it could be said that the transfer to Philip Hennessy could somehow be tied to the failure of Flapperless to make royalty payments, damages would be an adequate remedy. Accordingly, I am not persuaded that the plaintiff is entitled to the relief sought by it in paragraph 1.6 of its amended statement of claim.

Costs

[80] I am provisionally of the view that the defendants should pay the plaintiff’s costs of this summary judgment motion and of the action. The parties have provided bills of costs, although I note that, in the case of the defendants, the bill of costs submitted relates only to the summary judgment motion, not to the action as a whole. If the parties cannot agree on costs, they should serve and deliver costs submissions, not to exceed 3 pages in length, together with revised bills of costs (if deemed appropriate) as follows:

a. By the plaintiff within 10 business days after the release of these reasons; and b. By the defendants within 10 days of receipt of the plaintiff’s costs submissions.

[81] I may be spoken to with respect to any issues that arise in respect of the terms of the order and any issues of implementation arising from these reasons.

Graeme Mew J.

Released: 12 October 2016

Correction made: 1 November 2016:

Paragraph 18, line 2: “ ... the parties appeared by Madam Justice MacLeod-Beliveau..." is corrected to read “ ... the parties appeared before Madam Justice MacLeod-Beliveau …”