COURT FILE NO.: CV-16-544206
DATE: 20190204
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RINC CONSULTING INC. c.o.b. ROUSTAN CAPITAL, and WALTER GRAEME ROUSTAN in his personal capacity as trustee of the WALTER GRAEME ROUSTAN TRUST
Plaintiffs
– and –
GRANT THORNTON LLP
Defendant
Counsel:
M. Philip Tunley, for the Plaintiffs
Peter A. Downard and Rachel Laurion, for the Defendant
HEARD: January 31, 2019
ENDORSEMENT
diamond J.
[1] After the release of my Reasons for Decision on January 14, 2019, the plaintiffs brought a motion before me seeking (a) directions with respect to settling the form of Judgment; and (b) an Order that I determine four matters which the plaintiffs argued were not addressed in my Reasons (as I am technically not functus).
[2] In support of the relief sought, the plaintiffs rely upon the provisions of Rule 59.06 of the Rules of Civil Procedure. The provisions of that rule are as follows:
59.06(1) An order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding.
59.06(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
[3] The crux of the plaintiffs’ submissions is that I have jurisdiction to hear their motion as my Reasons require amendment due to a failure on my part to adjudicate four specific issues and/or claims raised in this proceeding. As such, while the plaintiffs are bringing their motion pursuant to Rule 59.06(2)(d), they are specifically relying upon the provisions of Rule 59.06(1).
[4] The relevant jurisprudence is clear that Rule 59.06 is not to be implemented as a means to revisit findings or alleged errors in a judge’s Reasons, but for the purpose of correcting errors in memorializing such Reasons into a formal judgment. Accordingly, the circumstances under which I may revisit my decision to award additional relief are quite limited. As held by the Court of Appeal for Ontario in Meridian Credit Union Limited v. Baig 2016 ONCA 942:
“The first observation that we would make is that Baig’s reliance on r. 59.06 of the Rules of Civil Procedure is misplaced. Rule 59.06(1) addresses the jurisdiction of the court to amend an “order” where it contains “an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate”. Rule 59.06(2) allows a party to move for the court to modify or set aside an order under particular conditions; to suspend the operation of an order; to carry an order into operation; or to obtain relief other than that originally awarded. All of these grounds for re-opening an appeal concern orders, whereas Baig alleges errors in this court’s reasons; no order has yet been taken out.
Nevertheless, generally speaking, there is no jurisdictional impediment to this court reconsidering its decision when no order has been taken out and entered: Mujagic v. Kamps, 2015 ONCA 360, 125 O.R. (3d) 715, at para. 5. However, a party seeking to re-open an appeal after the appeal decision has been rendered faces “a high hurdle”: Chuang v. Toyota Canada Inc., 2016 ONCA 852, at para. 7. The court will re-open an appeal prior to the entering of the order “sparingly and only where it is clearly in the interests of justice”: Mujagic, at para. 12. Baig has not raised the kind of “rare circumstance” where “the interests of justice” would require us to withdraw our reasons and rehear the case on the merits: Aviva Canada Inc. v. Pastore, 2012 ONCA 887, 300 O.A.C. 355, at para. 9.”
[5] I am thus only prepared to entertain the plaintiffs’ motion if an inadvertent failure to deal with a claim led to an error in expressing my manifest intention. Using that lens, I now address each of the plaintiffs’ four requests raised on their motion.
Nominal Damages
[6] In my Reasons, I found that the defendant Grant Thornton LLP (“GT”) did indeed breach its agreement with the plaintiffs, and GT was not able to rely upon any of the limitation clauses in the agreement. I then proceeded to reject the plaintiffs’ theory of damages, and found that the plaintiffs were not entitled to damages for GT’s breach of contract.
[7] The plaintiffs submit that given my finding that GT breached the contract, the plaintiffs should nevertheless be entitled to resulting nominal damages. The plaintiffs’ claim for nominal damages was subsumed in its overall claim for damages, and I am prepared to entertain the plaintiffs’ request. The plaintiffs rely upon the Court of Appeal for Ontario’s recent decision in Mars Canada Inc. v. Bemco Cash & Carry Inc. 2018 ONCA 239, and in particular the following passage at paragraph 33 therein:
“Having established a valid contract and a breach, the respondent was entitled to damages, even nominal damages. Nominal damages are always available in a breach of contract action.”
[8] In my view, an aggrieved party’s right to obtain nominal damages is not as black and white as the plaintiffs suggest. An award of nominal damages for breach of contract is still within the discretion of the Court. As held by the Court of Appeal for Ontario in Place Concorde East Limited Partnership v. Shelter Corporation of Canada 2006 CanLII 16346 (ONCA), it is still open to the Court in an appropriate case to decline to award even nominal damages where there is a proven breach of contract.
[9] GT argues that since the plaintiffs’ theory of damages was rejected, its damages (including any award of nominal damages) are based upon “fictitious losses”, and as such an award of nominal damages ought to be rejected as well. I agree. In Rosenhek v. Windsor Regional Hospital 2010 ONCA 13, the Court of Appeal for Ontario held that nominal damages may be awarded where general damages are unproven due to a failure to adduce available evidence. In other words, an award of nominal damages presumes that there are perhaps some unquantified damages which a party has failed to prove.
[10] In my view, this is not a situation where nominal damages ought to be awarded. The plaintiffs’ evidence in support of their claim for damages was fully adduced at trial, and that evidence was rejected.
[11] Accordingly, the plaintiffs’ claim for nominal damages is dismissed.
Special Damages
[12] The plaintiffs submit that my Reasons did not dispose of their request for an award of special damages based upon various professional fees incurred between March 2015 and May 2016. To begin, I agree with the plaintiffs that my disposition of their claim for special damages was inadvertently omitted in my Reasons. This was very likely due to the fact that the entire thrust of the plaintiffs’ closing submissions focused on their main damage theory. Indeed, in their 71 pages of written closing submissions, only three lines were devoted to a request for special damages. Nevertheless, I am prepared to entertain this request.
[13] The parties do not quarrel with respect to the governing jurisprudence. As held in Statti Investments Ltd. v. Baresa Kitchen Cabinets Inc. 2014 ONSC 2466, as special damages are exceptional in their character “they must be proven to some degree of meaningful strictness in order to be recoverable at all.”
[14] As stated in my Reasons, the trial of this action proceeded in a quasi-summary fashion. The only evidence tendered by the plaintiffs in support of their claim for special damages was contained in paragraph 92 of the affidavit of Graeme Roustan (“Roustan”) sworn December 14, 2017, wherein Roustan stated as follows:
“As a result of GT’s actions and default, the plaintiffs incurred approximately $300,000.00 CDN of professional fees which were wasted and are unrecoverable.”
[15] Attached to Roustan’s affidavit were various redacted invoices from (a) U.S. and Canadian law firms and (b) a company known as Kingsdale Shareholders Service. The redactions to the invoices preclude a meaningful review of both the type of services performed for the plaintiffs, and, more importantly, whether those services were incurred as a result of GT’s breach of contract.
[16] It is difficult, if not impossible, to find the presence of a causal link between the various services performed for the plaintiffs and GT’s breach of contract. During argument of their motion, the plaintiffs submitted that the missing survey was part of a “whole package” orchestrated and commissioned by Roustan as a result of PSG implementing their “Own the Moment” sales strategy. Some of these invoices reference services which in fact pre-date the agreement, and it is just as easy to conclude that the majority, if not all, of those services would have been incurred by the plaintiffs regardless of whether GT breached the contract.
[17] The evidence tendered by the plaintiffs was far from clear and cogent, and lacking in particulars. As such, I agree with GT that the plaintiffs have not met their onus to strictly prove special damages, both from an evidentiary perspective and a causation analysis.
[18] Accordingly, the plaintiffs’ claim for special damages is dismissed.
Damages for Purchase of New Shares
[19] The plaintiffs submit that my Reasons did not address their alternative theory of damages, namely that had GT provided the plaintiffs with the survey as required by the agreement, the plaintiffs would not have purchased an additional 163,962 shares (on margin) in PSG.
[20] I am not prepared to entertain this request, as the findings made in my Reasons dispose of this claim. At paragraphs 103-105 of my Reasons, I specifically found that Roustan purchased 163,962 shares (on margin) for his own investing strategic goals in a declining market, all while armed with credible information that PSG was nevertheless carrying out a practice of channel stuffing. This is dispositive of the plaintiffs’ claim for damages for the purchase of those new shares.
Damages for Loss of Chance
[21] The plaintiffs submit that my Reasons did not address their claim for the loss of an opportunity to secure resignations from PSG board members, and thus convince PSG to abandon its new sales strategy. The plaintiffs admit that this damage theory was not pursued at trial or in their written or oral closing submissions, and the plaintiffs are pursuing this damage theory for the first time on their motion.
[22] In their Statement of Claim, and specifically under the heading “Damages”, the plaintiffs include a claim for “the loss of the opportunity to persuade PSG to change course on its plan sales approach, and any resulting decrease of the value of their shareholdings in PSG.”
[23] I agree with GT that the Court cannot possibly have overlooked something that was not before the Court in the first place. As such, I am not prepared to entertain this request.
[24] In any event, there is insufficient evidence in the record before me to support this damage theory. As set out in my Reasons, the relationship between Roustan and PSG board members was adversarial, antagonistic and fractured at all material times. By the June 5, 2015 meeting, Roustan was already armed with credible information that PSG was participating in a practice of channel stuffing, and he made his case well known to the PSG board members. Nothing was going to change the course of PSG’s new sales strategy, and there is no evidence before me to conclude otherwise other than Roustan’s own personal desire to change their minds.
[25] On a balance of probabilities, even if GT had delivered the survey before June 5, 2015, I cannot find that Roustan would have secured a different result than what had actually happened.
Final Matters
[26] As requested by the plaintiffs, and as agreed by GT, the time for commencing an appeal of my decision will commence as of the date of the release of this Endorsement.
[27] In addition, the timeline for the exchange of written costs submissions will now commence after the release of this Endorsement, with the costs of the plaintiffs’ motion being included in those costs submissions.
Diamond J.
Released: February 4, 2019
COURT FILE NO.: CV-16-544206
DATE: 20190204
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
RINC CONSULTING INC. c.o.b. ROUSTAN CAPITAL, and WALTER GRAEME ROUSTAN in his personal capacity as trustee of the WALTER GRAEME ROUSTAN TRUST
Plaintiffs
– and –
GRANT THORNTON LLP
Defendant
ENDORSEMENT
Diamond J.
Released: February 4, 2019