Court File and Parties

Court File No.: CV-15-520340 Date: 20170307 Superior Court of Justice – Ontario

Between:

JVJ Consulting Inc. Plaintiff/Respondent

- and -

Osborne Barnwell [sic] et al. Defendant/Appellant

Before: F.L. Myers J.

Counsel: Osborne Barnwell, Defendant/Appellant, in person R.A. Gosbee for the Plaintiff/Respondent

Heard: March 6, 2017

Transcription of Handwritten Endorsement

[1] The Master declined summary judgment on the basis that Mr. Barnwell had not met his evidentiary burden to show there was no genuine issue for trial on the discrete issue of whether the assignment clause in para. 15 of the escrow agreement prevented King Square from assigning its rights, such as they were, to JVJ.

[2] In my respectful view, the Master erred in principle in coming to this view. She did not consider the tests set out in paras. 59 through 66 of Hryniak v. Mauldin, 2014 SCC 7 to consider first if the issue raised was a proper one for summary judgment considering the interests of justice and the goals of efficiency, affordability, and proportionality.

[3] The Master found that the question of identifying the source of the plaintiff’s right to sue was a serious issue requiring a trial. But, apart from noting the defendant’s burden, she did not say why this was so. Had she found that the interests of justice precluded proceeding on the record before her, para. 66 of Hryniak then directs to a ladder of other possible resolution mechanisms short of a trial. Here, all of the evidence of the circumstances surrounding the entry into the escrow agreement and the subsequent interactions of the parties is before the court. No one suggests that further evidence is required. No one asks for examinations or further documents.

[4] In my respectful view the issue of interpreting the escrow agreement raised by the appellant is a discrete, narrow issue, that is on the “law” side of the “mixed facts and law” continuum. Such issues are well suited to summary resolution. Griva v. Griva, 2016 ONSC 1820 at para. 19.

[5] Mr. Barnwell says that the escrow agreement contemplates its enforcement. He points to paras 9, 10 and 15 in particular. Para. 10 is especially instructive. It allows the escrow agent to hold the escrowed funds if he is being sued. It cannot apply by its terms once the funds have been released and the agreement has come to an end. Nothing in the agreement speaks to rights or interests of parties after the funds have been released and the agreement is no longer executory.

[6] Moreover, s. 53 of the Conveyancing and Law of Property Act, RSO 1990, c. C.34 validates assignments on proper notice provided there is no statutory or other impediment to the assignment. See RBC v. Rodaro. In my view, reviewing the words of para. 15, its context in the agreement, and the purpose of the agreement, para. 15 did not require Mr. Barnwell’s consent for the assignment to the plaintiff by King Square. By its very terms, the assignment recognized the agreement had come to an end. No action is left for any party to perform. The plaintiff is not suing to have Mr. Barnwell release funds to it from escrow. It sues as assignee of the cause of action that arose when Mr. Barnwell released the funds to Mr. Leung without written instructions or having obtained a legal opinion in advance. That is a separate cause of action at common law that is not a right or interest under the escrow agreement that required consent to assign.

[7] I also consider that the agreement was an escrow agreement with a law firm. In my view, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 requires a common sense approach that does not artificially insulate a lawyer qua escrow agent/trustee from complete transparency and accountability. I agree with the Master to the extent that she was moving the action forward on the merits. My result is the same in that the motion for summary judgment is dismissed. However, instead of sending a discrete interpretation issue to trial, I decide it against Mr. Barnwell. Meridian v. Baig, 2016 ONCA 150 at para. 17. Under the Skunk v. Ketash, 2016 ONCA 841 decision, I note that this is a final finding that should be in the order.

[8] In addition, under Hryniak on dismissal of the motion the court is required to be seized and make orders for the efficient management of the action. The Master did not advert to this issue and therefore erred in failing to seize herself or provide reasons for declining to do so. Such reasons, if discernible would be subject to high deference in light of the discretion involved. Therefore, I direct as follows to move the action along:

1. King Square is added as a party defendant (see para. 51 of the Li affidavit). It is added to have all necessary parties before the court out of an abundance of caution;
2. Master Mills is seized of case managing this action to its most efficient, affordable, and proportional conclusion;
3. If he has not done so already, Mr. Barnwell is to provide to the plaintiff copies of all correspondence between himself and John Leung touching on the release of the escrowed funds to him and copies of all bank statements which show any part of the escrowed funds being deposited by Mr. Barnwell, being moved to any other account up to and including the final release of the funds from escrow.
4. The parties shall exchange sworn affidavit of documents by April 7, 2017; and
5. Costs payable forthwith by Mr. Barnwell to JVJ fixed at $6,332.55 on a partial indemnity basis. This is a reasonable amount well within Mr. Barnwell’s expectation given his own cost outline.

F.L. Myers J. Date: March 7, 2017