COURT FILE NO.: C-0142-18

DATE: 2021-04-06

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Todd White, 2148625 Ontario Limited o/a Hawk & Fox Grill and Convenience

Plaintiffs

– and –

Lorne Byers, Lea Davis, Smoken Spurs Festival Ltd., Peter McIsaac, The Municipality of Powassan, John Doe Corporation

Defendants

W. Stickland, B. Jackson and D. Zacks for the Plaintiffs

J. Kennedy, for the Defendants Lorne Byers, Lea Davis and Smoken Spurs Festival Ltd.

M. Sirdevan, for the Defendants Peter McIsaac and The Municipality of Powassan

HEARD: February 25, 2021

REASONS FOR JUDGMENT

BOUCHER, J.

Introduction

[1] The defendants brought two separate summary judgment motions in this action. They were heard together via Zoom over the better part of a day.

[2] The defendants Byers, Davis and Smoken Spurs Festival Ltd. (hereinafter “SSFL”) deny a contract existed with the plaintiffs, and if it did, they say they missed the limitation period within which to bring this action. Byers and Davis also argue there is no evidence to support the claims against them personally, and if the limitation period argument does not resolve the matter at this stage, then they should be let out of the action.

[3] The defendants The Municipality of Powassan (hereinafter the “Municipality”) and McIsaac also believe the plaintiffs missed the limitation period. They argue in the alternative that there is no evidence to support the claims against them. McIsaac suggests there is no evidence of bad faith and therefore the action as against him in his capacity as mayor is barred by ss. 448(1) of the Municipal Act, 2001.

Background

[4] Since 2013 the Smoke ‘N’ Spurs Festival has taken place annually in Powassan, Ontario. The plaintiff, White, says Byers and Davis lured him away from another festival in 2013 with the promise of a five-year catering contract. This contract is denied by Byers, Davis and SSFL.

[5] For the first three years White, through his corporation, provided food and beverage catering to the festival. On August 15, 2016 SSFL advised White by registered mail that he would not be catering the festival.

[6] With the festival only weeks away, SSFL sought the assistance of the Municipality. SSFL was worried it would not be able to obtain a liquor permit on time and therefore asked the Municipality to cater alcohol under its permit. After a special meeting of council, a resolution was passed supporting the SSFL request, if necessary. As it turned out, within a week of the resolution, SSFL advised the Municipality that it would not need any assistance from it with respect to a liquor permit.

[7] The plaintiffs allege breach of contract, negligence and/or negligent representation and bad faith against the Municipality and McIsaac. At the root of the complaint is the belief that these defendants interfered in the plaintiffs’ dealings with Byers, Davis and SSFL.

The Law – Summary Judgment

[8] Rule 20.04 of the Ontario Rules of Civil Procedure reads as follows:

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment. O. Reg. 284/01, s. 6; O. Reg. 438/08, s. 13 (2).

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence. O. Reg. 438/08, s. 13 (3).

(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[9] In Hyrniak v. Mauldin 2014 SCC 7, [2014] 1 SCR 87 Justice Karakatsanis explained the policy reasons behind the amendments to Rule 20 summary judgment motions:

[1] Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication of civil cases, the development of the common law is stunted.

[2] Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.

[3] Summary judgment motions provide one such opportunity. Following the Civil Justice Reform Project: Summary of Findings and Recommendations (2007) (the Osborne Report), Ontario amended the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (Ontario Rules or Rules) to increase access to justice. This appeal, and its companion, Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, address the proper interpretation of the amended Rule 20 (summary judgment motion).

[4] In interpreting these provisions, the Ontario Court of Appeal placed too high a premium on the “full appreciation” of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants. In my view, a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.

[5] To that end, I conclude that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.

[10] She also set out the following roadmap for motions judges:

[66] On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[67] Inquiring first as to whether the use of the powers under Rule 20.04(2.1) will allow the dispute to be resolved by way of summary judgment, before asking whether the interest of justice requires that those powers be exercised only at trial, emphasizes that these powers are presumptively available, rather than exceptional, in line with the goal of proportionate, cost-effective and timely dispute resolution. As well, by first determining the consequences of using the new powers, the benefit of their use is clearer. This will assist in determining whether it is in the interest of justice that they be exercised only at trial.

[11] The plaintiffs submit that the summary judgment procedure is inappropriate because discoveries have not taken place and I will not be able to make credibility findings on this written record. They further argue the Municipality should have provided an affidavit from McIsaac, rather than from the Chief Administrative Office/clerk-treasurer.

[12] The defendants submit the Rules specifically permit the hearing of this motion prior to discoveries and that the record is more than sufficient to satisfy their burden of establishing there are no genuine issues requiring a trial. They point out the plaintiffs could have availed themselves of r. 39.03 to examine McIsaac. The failure to do so should not now be used as an impediment to the summary judgment procedure. They argue that the summary judgment motion is the time for all the parties to “put their best foot forward.” In Cuthbert v. T. D. Canada Trust 2010 ONSC 830, [2010] O.J. No. 630 Justice Karakatsanis (as she then was) noted at paragraph 12:

… Pursuant to Rule 20.02(2), a responding party “may not rest solely on the allegations or denial in the party’s pleadings but must set out in affidavit material or other evidence, specific facts showing there is a genuine issue requiring at trial.” In other words, consistent with existing jurisprudence, each side must “put its best foot forward.” The court is entitled to assume that the record contains all the evidence which the parties will present if there is a trial, although in some circumstances the interests of justice may require that a material issue should be determined at trial, upon a full evidentiary record.

[13] The diametrically opposed positions of the parties on these facts make it impossible for me to find there are no genuine issues that require a trial at the first stage of the Hyrniak test. I must therefore determine if the need for a trial can be avoided by using the powers under rr. 20.02(2.1) and (2.2), without offending the interest of justice.

[14] As set out in Hyrniak, the use of these powers will “not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.”

[15] I have carefully reviewed the record and find that it is sufficient to permit me to weigh the evidence, to make credibility assessments and to draw reasonable inferences. Using the fact-finding powers does not offend the interests of justice. I find this record is as fulsome as it will get, not only because the parties are expected to put their best case forward at this stage, but because the passage of time has not produced any additional evidence that was not essentially known in the summer and fall of 2016. There remain substantial outstanding undertakings by the plaintiffs. There is no reason to believe new evidence will suddenly appear if the case continues to trial.

[16] For the reasons that follow, I find there are no genuine issues that require a trial. In fact, a trial will needlessly lead to more delay and expense.

Motion of the defendants Byers, Davis and SSFL

Did a contract exist with the plaintiffs for the 2016 festival?

The Law

[17] One of the few things upon which the parties agree is that they were not bound by a written contract. The case Ottawa Convention Centre Corp. v. Treefort Hip Productions Inc. [2018] O.J. No. 4577 (SCJ) provides a helpful summary of the law concerning situations where conduct may amount to binding obligations. The facts of that case are similar to this one. The parties worked together at an annual festival over many years. They did not have a written agreement that defined long term obligations. Unlike the present case, they had an MOU and each year they signed licence agreements. Justice Bell summarized the test as follows:

[88] A party’s course of conduct may constitute acceptance of certain terms of business and give rise to binding obligations. The answer to the question of whether a binding course of dealings arises depends upon a reasonable and objective construction of the conduct of the parties (Saint John Tug Boat Co. v. Irving Refinery Ltd., 1964 CanLII 88 (SCC), [1964] S.C.R. 614 at paras 18-19). Put another way, the test is whether the evidence of the relationship between the parties and all that passed between them, viewed objectively in the relevant commercial context, indicates an intention to be bound by particular terms (Benny Haulage Ltd. V. Carosi Construction Ltd. (1996), 33 C.L.R. (2s) 47 (Ont. Ct. J. (Gen. Div.)), appeal heard and quantum of award varied, 39 C.L.R. (2d) 175 (Ont. Div. Ct.), leave to appeal to ONCA refused, July 21, 1998, 40 C.L.R. (2d) 247 (C.A.), at para. 17

The plaintiff’s evidence

[18] White’s evidence is comprised of an affidavit sworn March 4, 2020, together with exhibits, as well as his cross-examination on that affidavit which took place on August 24, 2020.

[19] Prior to 2013 White and Byers had each worked for two years at another festival, the Powassan Fall Festival. Apparently, Byers had a falling-out with the organizers and according to White, he set out to start a competing festival on the same long weekend each year; namely, the Labour Day Weekend.

[20] The plaintiff alleges he and Byers agreed to a five-year contract for exclusive food and beverage catering in 2013, with a further five-year option to renew. In the first two years of the contract, they would split the food and beverage revenues 60%-40%; in the subsequent three years, 70%-30%. In his affidavit, White suggests Byers approached him with the offer for exclusive food and beverage catering. During cross­-examination, he stated he gratuitously included sharing of food revenues, even though Byers did not want this to form part of the agreement.

[21] White explains the contract as something he needed in order to move away from the Fall Fair. He thought having two festivals in a small community on the same weekend would upset a lot of people. He also saw this as a project that would take several years to build up, and accordingly he told Byers he would “guarantee him five years and he said, ‘Yea, no problem.’ At the end of five-years we’ll revisit, but I’d like an option to make sure there could be another five years at my discretion, and he was all over it. He was, like, ‘That’s great. Thank you so much.’ You know, ‘Let’s do it.’ And that’s – that’s how it was.”

[22] The contract was not reduced to writing, though White believes there were text messages back and forth, which have not been located. He felt they were both clear on what they wanted, and their longtime friendship made a written contract unnecessary, saying “I just trusted him that he was going to honour his – his side of the deal, and I was totally prepared to honour my side.”

[23] White suggests in his affidavit that Byers knew he would have to make significant investments for this project, including “barbeques, deep fryers, tables, chairs, coolers, storage trailers, refrigerator trailers, staff training, and insurance, among other expenditures…” He says he made these purchases, but he did not provide any details or receipts. They also sound like purchases someone would need to make if they were just starting out catering and providing beverages for large events. On his own evidence, however, White suggests he provided these services for two years at the Fall Festival. He also catered approximately twenty-five home games per year for a local junior hockey club. He did not provide a breakdown of what he already owned and what he needed to purchase in order to fulfill the contract with Byers.

[24] Although described as an exclusive contract throughout his affidavit, White testified in cross-examination that over time Byers wanted more variety for the festival, which he understood he could not provide. White provided “mainly hot dogs, hamburgers and sausages…[Byers] would run the other vendors by me and just make sure that they weren’t going to, you know, conflict with my menu too much or, you know, take away from what I was providing.”

[25] White was unable to pinpoint when Byers started asking to include other food vendors, suggesting Byers wanted him to control the food side of the festival and accordingly sought his opinion on food ideas all the time. He described it as “a very gentleman [sic] agreement to allow the festival to grow and for both of our – for both of our benefits [sic].”

[26] Later in his cross-examination White suggests it was his idea to include other food vendors:

And the food at that time was definitely exclusive to me. But then when we got thinking about it, we just – I didn’t know if I had the capacity, as the event grew, and/or the variety to keep people happy with the – with the food exclusivity. So when I brought this up several times, we – he discussed that with me. So he said, you know what, about the food, don’t you think it would be beneficial for me and for us to include other food vendors and candy vendors, and whatever else. Oh! And then it just made sense that, yeah, and the agreement was that he would also run it by me so that he wasn’t – you know – he wasn’t shooting himself in the foot. Because essentially if he’s taking away from my sales and giving it to the other vendors, he’s taking away his own profits. Right? Because we share in those profits.

[27] According to White, Byers brought in Davis as a partner for the event in the second year (Byers suggests this happened in 2013). In his affidavit White said Davis became a party to the “Catering Agreement.” In cross-examination he testified that Davis discussed the alcohol and food with him and would run food vendors by him because of his exclusive contract. White did not provide any other details, such as any discussions he may have had with Davis about becoming a party to their agreement. There is no evidence Davis was told about the terms of the agreement, and that she agreed to be bound by it, except the suggestion that she ran food vendors by him because of his exclusive contract. Despite assertions to the contrary in his affidavit and cross-examination, he later testified in cross that Davis was not a party to the agreement.

[28] White denied ever contracting with the SSFL, suggesting Byers and Davis dealt directly with him and did not purport to act on behalf of a corporation.

[29] In his affidavit White described the notices he sent annually regarding the festival. Starting in 2013, in late July or early August each year, he would send a catering notification to the Alcohol and Gaming Commission of Ontario (AGCO) as well as to the Municipality advising of his intention to use the catering endorsement under the Hawk & Fox liquor licence.

[30] White suggests in his affidavit that at no time prior to 2016 did he receive any “grievances” about these notifications from those he notified, including the defendants.

[31] In cross-examination White suggested he also included the OPP, the Fire Department and the Building Department on the distribution list of these notices. A notice he sent to these agencies on July 30, 2016 was provided by the Municipality in answer to one of the undertakings given at the cross-examination of Maureen Lang, the Municipality’s CAO/clerk-treasurer. The plaintiff filed this document in his motion record. The notice also included the Public Health Unit.

[32] White testified in cross that he sent these notices in 2013 for the full five years and changed the dates of the festival for each year. This evidence was offered in support of his contention that they had agreed to a five-year contract. When it was suggested to him by counsel that this contradicted his affidavit evidence (i.e., that the notifications were sent each year), the following exchange took place,

Q. You told me – you told me that you sent them all in 2013.

A. And I would send them again in – in closer to the date to make sure that they got them. The’re all through faxes, so there’s no guarantee, and always send it once or twice, sometimes three times. This one here says – I think I sent it three times. I think I sent it 2013, I think I sent it late August or late July, and then again in August.

Q. Of 2016.

A. Correct.

Q. Do you have copies of those fax confirmations from 2016?

A. No, I don’t think so. Like I said, I had a fire in my home and I was lucky to find the ones from ’13.

[33] The only notices from White that I can find in the record include one dated July 30, 2016 which was provided by the Municipality in response to an undertaking, as well as a notice completed on the same date by White on a form required by the AGCO and found in his affidavit.

[34] White’s evidence in cross was that each year he touched base with Byers approximately a month or a few weeks before the festival. With respect to 2016, he stated in his affidavit that in early August he tried several times to contact Byers and Davis, but they did not return his calls. He therefore attended in person at their office on August 19, 2016 to discuss the festival.

[35] At that meeting he advised Byres and Davis that he had sent his notifications and was ready, willing and able to cater the festival. They told him they were advised by the OPP that there was an issue with his liquor licence, and they accordingly went with a Plan “B” and advised him he would not be catering the festival.

[36] In cross-examination White indicated Davis told him they were “thinking about going with another caterer” and not that they had in fact chosen another caterer.

[37] White at first denied receiving the August 15, 2016 letter from SSFL (which clearly indicated he would not be catering) and testified that he showed up at their office that day because they were not responding to his calls.

[38] He later testified he could not remember if he had received the letter and brought it with him to the meeting. He indicated Davis told him they were concerned about prior years’ sales and they were “thinking about going with another caterer” though they refused to identify the other caterer. White told them they were breaching their contract and he would pursue legal remedies.

[39] At this point, according to White, Davis became very upset and began yelling at him. He left the meeting still hopeful that they would change their minds.

[40] White attached to his affidavit three pages of text messages he sent to Byers after the August 19, 2016 meeting. He confirms in the first text message that he is still confused about whether he is catering the festival. He mentions the five-year agreement and says, “I’m also prepared to continue committing 40% of the liquor profits to you guys as agreed by myself and Lorne.” The latter statement contradicts his affidavit as well as his evidence in cross-examination in which he stated the agreed upon ratio would change to 70%-30% for the last two years of the contract (2016, 2017).

[41] He further texted the following to Byers on August 21, 2016 after Byers had denied the existence of a contract:

You were also kind enough to confirm the details of our verbal contract in our recorded conversation the other day that we had a five year agreement and the only thing you ever wanted was 40% of the alcohol profits of which I gave you above and beyond that every year because you kept claiming you were losing money on ticket sales…it doesn’t have to be this way. Everyone is under a tonne of stress…Lea sounds like she’s ready to snap…her violence was off the charts the other day…in the recording she sounds like a raging lunatic…and I know she is directing it at me but I certainly haven’t done anything to her to warrant that abusive threatening behavior towards me…

[42] This evidence is at odds with answers White gave in cross-examination. The following exchange is noteworthy:

Q. And did you make any recordings of that meeting?

A. I may have part – part way through, but I’m not – I may have attempted but I don’t – I don’t think I ever, like, recovered them. I might have tried. I knew – I knew they were up to something when – when they were very hesitant at the – at the meeting, so-.

Q. And when you were making that recording, was it an audio or video recording of the meeting?

A. It would have been a video recording, if I would have done it, because I would get that – but I never – I never had anything to provide from the meeting afterwards, so -.

Q. And did Lorne or Lea consent to you recording the meeting or conversation?

A. Yeah. I said I’m – you know what, tell me this in – in – I said tell me this in – so I can get it, like, you know, so I have it not in writing, but so I have – then they wouldn’t talk and she kicked me out of her office, asked me to leave.

Q. If I could just take you to your text messages in your affidavit, at exhibit “D” as in Dan, and, more specifically, page eighty-eight (99) of your affidavit.

A. Yes.

Q. On the far right there’s a long paragraph that begins with, “Nice try,” but about midway down after the brackets, you wrote in a text message, quote, “You were also kind enough to confirm the details in our verbal contract in our recorded conversation the other day.” So looking at that, text messages, does that refresh your memory of whether or not you recorded the meeting?

A. Yeah, I can’t – like, I didn’t have – it didn’t – I may have tried, but it didn’t – it didn’t work, so -. Right? When I went to review it, it wasn’t – it wasn’t on my phone.

Q. Meaning you couldn’t hear or see anything on it?

A. Yeah.

Q. Okay. If I could take you ahead to the next page of your text messages, page eighty-nine (89) of your affidavit, Mr. White. In the middle, there’s three paragraphs, the last one on page eighty-nine (89), beginning with, “It doesn’t have to be this way.”

A. Ummhmm.

Q. In the middle you wrote, quote, “In the recording she sounds like a raging lunatic,” closed quote. So I guess if you told me under oath moments ago you couldn’t hear anything, why would [sic] type that in a text message?

A. I’m not sure. I will – you know what, I’ll check my phone when I look for the other stuff to see if that recording is still available.

[43] White provided an undertaking to make best efforts to find this recording. The Municipality and McIsaac suggest in their factum that this undertaking is outstanding.

[44] On August 24, 2016 Davis sent a no trespass letter to the plaintiffs by registered mail. In his affidavit and in cross-examination he testified that he could not recall receiving this letter. When it was pointed out to him in cross-examination that his lawyer referred to the letter in his August 31, 2016 correspondence to SSFL, he maintained that he could not recall giving him the letter.

[45] With respect to not accepting the repudiation of the contract, White’s evidence was that up until the start of the festival, he was ready willing and able to step in as the caterer. When questioned further for details he testified that he had not sent a request to the OPP for paid duty officers because he was not planning on using them that year – they had used them in 2015 and he did not find it beneficial.

[46] With respect to food for the festival, White testified that he had called his regular food supplier and told them to be ready to ship an order on the day of the festival. His evidence on this point was as follows:

Q. Okay. As of August 31, 2016, had the food actually been ordered for the Spurs Festival?

A. Yes. It – it was ready. So I told them that – well, before, they – they had -. So their warehouse is in North Bay, and they can deliver the same day. So the food, I put them on notice, said on Friday, ‘If I give you – if I give you a call, you guys need to be prepared to deliver on those days.’ And they were like, “No problem.”

[47] According to White, he was not required to spend any money on food for the 2016 festival because Byers ultimately excluded him from it. This is despite the fact his supplier was ready to deliver enough food for him to cater the festival on not even one days’ notice. His testimony was that he may call them on Friday – which must have been September 2, 2016 the first day of the festival. Although he did not provide any details regarding how much food he required, the notice he sent to the AGCO (on the AGCO form) dated July 30, 2016 suggests 2,000 attendees at the festival.

The evidence of Byers, Davis and SSFL

[48] Byers swore an affidavit December 09, 2019 in support of this motion. Davis swore an affidavit the same date which adopted the evidence of Byers. In reply to the plaintiff’s affidavit, Davis swore a reply affidavit dated March 19, 2020, which was adopted on the same day in an affidavit sworn by Byers. Byers and Davis were both cross-examined on their affidavits on August 26, 2020.

[49] Byers and Davis denied the existence of a multiyear agreement with the plaintiffs, as well as an agreement with respect to the 2016 festival. They also denied any exclusivity agreement with the plaintiffs. Rather, their evidence was that the festival took place and was organized on a year to year basis.

[50] With respect to planning in 2016, their evidence was that they met with White in the spring or early July to discuss White doing the catering for that year’s festival. Byers testified in cross that White was flip-flopping on whether he would do the catering. He complained about losing money every year and he pressured them to not allow any other food vendors, which they refused. Byers asked White verbally to confirm everything was in order but did not ask for any documentation. During her cross-examination Davis testified White said at that meeting that everything was ready.

[51] It was for this reason that they were surprised to learn from the OPP on July 26, 2016 that White had not yet taken steps to hire paid duty police for the festival. The OPP called the AGCO on their behalf on July 29, 2016 and confirmed they, too, had not received necessary paperwork from White. Byers and Davis were concerned about a thirty-day time period regarding the alcohol licence, which could jeopardize the event.

[52] As a result, Byers reached out to several caterers without success. He then contacted the Municipality’s Manager of Recreation and Facilities to determine if it would be possible for the Municipality to cater the alcohol for the festival. Byers also spoke with Mayor McIsaac on August 15, 2016 who in turn indicated this would be something that Municipal Council would have to consider.

[53] On the same day that Byers met with McIsaac, Davis sent two registered letters regarding the festival – one to White telling him his application to the AGCO to cater the event was not accepted, and the other to the Municipality telling them their application to cater the event was successful. The letters were on Smoke N Spurs Festival letterhead and signed by Byers as a Director. Davis deposed that the letter to White was not returned to her as undelivered, though she could not find the confirmation of receipt.

[54] In the letter to White, Byers refers to the meeting in early July in which White assured them everything was in place for the festival. He refers to the phone call from the OPP and to the AGCO and their worry that Plan “A” (which he confirmed in cross was White) would not submit the paperwork within the prescribed time. A Plan “B” was developed in the event Plan “A” could not proceed. He also mentions that on August 11, 2016 SSFL was notified Plan “A” did not get the paperwork done in time for the AGCO and accordingly the committee recommended proceeding with Plan “B”.

[55] In cross-examination Byers initially denied the Municipality was Plan “B” but this changed when he was confronted with the letter of even date that he sent to the Municipality. He testified “Like a Plan “B” or a Plan “C” it was an alternative plan, I guess is the way I was looking at it.” He denied having a written contract with the Municipality because they did not get to that point.

[56] He also mentioned other businesses they approached unsuccessfully to take over the catering. Davis described Plan “B” as “getting another caterer” in cross-examination. She confirmed Byers’ efforts in that regard.

[57] When asked what application by White was being rejected, Byers referred to the meeting in late spring or early July in which they discussed the festival and said that is what was rejected.

[58] Byers and Davis confirmed in cross-examination that they had never prior to 2016 written to White to tell him his application had been accepted. They also testified that calls were made to White without success to discuss the problems with the AGCO paperwork, though they could not recall exact dates.

[59] A special meeting of Municipal Council took place on August 18, 2016. An audio/visual recording of the meeting was filed in evidence by the plaintiffs. At the outset McIsaac tells everyone that he cannot approve the request from SSFL – it is a decision of council. During this meeting Byers advised council of the following:

a. A Plan “B” is required because of a lack of paperwork submitted to two authorities. Byers was worried that a 30-day window had collapsed.

b. AGCO inspector advised the other application (i.e. The Plaintiffs’) was not complete and correct.

c. Based on advice from the OPP and AGCO they need to proceed with Plan “B” and accordingly would like the Municipality to cater alcohol to the festival so that it can proceed.

[60] Based on ballpark numbers from the previous years, council agreed they could cater the festival, though not food. Some work had already been done in terms of contacting the OPP and municipal insurer. It is clear from the meeting that council agreed to do this on an emergency basis, and as a back-up in the event the festival could not find another way to licence the event. It is also evident council made this decision because the festival is a benefit to the community.

[61] By resolution of the same date Municipal Council accordingly agreed to “the urgent request of the Smoke n Spurs Festival to run the Bar under the Sportsplex Catering Liquor Licence for the Festival weekend.”

[62] On August 19, 2016 White attended at SSFL’s office and met with Byers and Davis. According to them, White attended with the August 15, 2019 letter. White said he was going to a lawyer if they did not allow him to work at the festival. Davis told him they were using another vendor and his services would not be needed. Although in her reply affidavit she states White failed to provide them with any documentation to substantiate his assertion that he was ready, Davis agreed in cross-examination that they did not ask White for this documentation.

[63] On August 24, 2016 Davis sent a no-trespass letter by registered mail to the plaintiffs. The letter is on Smoke N Spurs Festival letter head and is signed by Byers and Davis as directors. The letter refers to “malicious and nuisance telephone calls and text messages [that are] abusive, harassing, obscene...” Again, although she could not produce a confirmation of receipt, she testified that it was not returned to her as undelivered.

[64] On August 25, 2016 Byers advised the Municipality the SSFL had obtained a special occasion permit and accordingly would not need the assistance of the Municipality. This ended the Municipality’s involvement.

Analysis

[65] I do not find White to be a credible witness. As discussed above there are many inconsistencies within his evidence, some of them quite serious. What could be more important in a contract case – one that is based on an alleged verbal contract – than the terms of the agreement? If the terms are not clear – even for White - how am I to find there was an agreement by which the parties agreed to be bound?

[66] I need not repeat what I have already discussed in detail, but it is clear to me that White’s evidence was inconsistent on important issues such as the percentage split on earnings, whether the contract was exclusive to him (and whether it was on alcohol or alcohol and food), when he sent notices and whether Davis was a party to the agreement.

[67] I also found White to be careless with the truth. Several examples can be found in his evidence regarding the August 19, 2016 meeting with Byers and Davis. One relates to whether he recorded the meeting. His text messages to Byers are clear: he recorded Byers confirming the existence of the multi-year contract as well as Davis becoming very upset. Yet when he was questioned about this, he suggested he may have recorded part of it, though he couldn’t recall if he had ever been able to recover it from his phone. When he was asked if Byers and Davis consented to being recorded, he said that they refused and kicked him out of their office. If this was the truth, then he would not have had the recordings he referred to in his text message. Why would he say he couldn’t retrieve them if they had not been taken because they did not consent?

[68] White knew that if he had a recording of Byers admitting to a multi-year contract, his case would be much easier to prove. When pressed on whether he could share this recording, he went from not being sure he had made one, to not being sure he could find it or access it, to not having taken it at all. When pressed again in cross that his text says he listened to Davis and she sounded “like a raging lunatic”, he fell back to his position that he would check his phone again to determine if he could find it. A recording of the meeting has not been offered by White.

[69] Another example involves the purpose of the August 19, 2016 meeting. White suggests it was a regular check-in with Byers and Davis. He suggests at that point he was not aware of any problems with him catering the festival, except that Byers and Davis were not returning his calls (which prompted the in-person visit). Both Byers and Davis say that he attended that meeting with the letter dated August 15, 2016 which clearly says he is not catering the festival. In his affidavit he swore he could not recall receiving the letter. By the end of his cross-examination, his evidence was that he could not remember if he brought a copy of the letter with him to the meeting, saying “As a matter of fact – I don’t know, I can’t remember. It’s a long time ago.”

[70] Whether he had received the letter – or brought it with him – is significant because the letter not only says he will not be participating in the festival, but that they are going with a Plan “B”. Yet White suggests that during the meeting Byers and Davis were equivocal about his participation in the festival. If Davis was undecided, why would she become so upset by White’s threat to sue them?

[71] A further example involves the August 24, 2016 no-trespass letter. In his affidavit and in cross White alleged he could not recall receiving the letter. When pressed on this in cross – including the fact his lawyer said in his August 31, 2016 letter that it had been provided to him – White could still not recall receiving the letter or providing it to his lawyer. When pressed further on whether he could have also received the August 15, 2016 letter, White suggests that it is not in his lawyer’s notes and states “So if he didn’t have it, then I don’t think I received it.”

[72] Why did White resist saying the obvious – that he must have received the August 24, 2016 letter? I believe White maintained this narrative – that he left the August 19, 2016 meeting possibly still the caterer and he could not recall receiving the letters from SSFL – to support his legal argument that the contract was not breached by Byers and Davis until September 02, 2016, the first day of the festival.

[73] I found Byers and Davis to be credible and reliable witnesses – their evidence was essentially consistent on major points, both internally and as between themselves. Byers acknowledged when inconsistencies were pointed out to him. For example, he was initially reluctant to admit in cross that the Municipality was the Plan “B” referred to in their letter of August 15, 2016 to White, when clearly that was the case at that point in time. They also acknowledged that in prior years they had not in writing approved White’s application – though they had rejected it in writing in 2016. They also admitted they did not ask for written confirmation that he was “ready, willing and able” to cater the event in 2016.

[74] I did not feel that Byers and Davis were crafting answers to suit their narrative. When this happens, cross-examination usually roots it out, as was the case with White.

[75] Applying the test set out in Ottawa Convention Centre Corp., I am unable to find that the parties agreed to define their relationship by a long-term contract. These were people that knew each other and that lived in a small community. From year-to-year they would meet at some point, usually July, to discuss the open-ended possibility of the plaintiffs catering food and alcohol at the festival. This provided enough time for alternative arrangements to be made in the event the plaintiffs did not want to, or could not, cater the event. For three years this worked well for all of them.

[76] In 2016, however, things changed. I find that in early July White told Byers and Davis in a meeting that he would be able to cater food and alcohol at the festival but expressed some concern about losses and exclusivity regarding food catering. When they were contacted by the OPP late in July with information that suggested the contrary, they became concerned and immediately took steps to fix the problem. They tried unsuccessfully to reach White. They contacted other potential caterers. They reached out to the Municipality in a last effort to save the festival. When they were in fact able to secure their own special occasion permit, they relieved the Municipality from their commitment to assist.

[77] When Byers and Davis received the concerning information from the OPP, they were not bound by any contractual obligations to the plaintiffs. It was their festival, and they were free run it as they wished. Based on the information which they believed to be from credible sources, they realized White was not able to cater the event which put it in jeopardy. At that point they had no obligation to give White another chance to prove he could cater the event. With only a month before the festival, they took reasonable steps to ensure it could proceed.

[78] They advised White in writing that his services would no longer be required. Though they had never accepted his services in writing before, this was clearly a different situation. It was reasonable for them to make it clear in writing that they needed to go with a Plan “B”.

[79] The claims of negligence and/or negligent misrepresentation against Byers, Davis and SSFL are without merit. The statement of claim provides no details regarding these allegations. The evidence of the plaintiffs on these motions seems to suggest that Byers, Davis and SSFL made misrepresentations about the plaintiffs at the special meeting of Municipal Council on August 18, 2016. This is not the case. Byers told council what he had been told by the OPP and AGCO. Given the short timeframe and lack of a contract with the plaintiffs, he acted reasonably in seeking out other caterers – the Municipality being the last resort.

The corporations

[80] A note about the corporate plaintiff and SSFL. I have mostly referred to White and Byers and Davis when discussing these parties. This is because the parties dealt directly with each other but were clearly speaking on behalf of the corporations. For example, each of them referred to the corporations in their correspondence to each other and to others.

[81] There are many reasons to use corporations in the business world, including limiting liability and tax planning. Although there was no direct evidence on their motives, I can draw the reasonable inference that these businesspeople used the corporations for business reasons. Nothing in the evidence supports the notion that Byers and Davis acted outside the scope of their roles as directors and officers of SSFL. I found no evidence that would support a separate actionable breach against Byers and/or Davis. They personally did not engage in tortious conduct or “exhibit a separate identity or interest from that of the company so as to make the act or conduct complained of their own.” (ScotiaMcLeod Inc. v. Peoples Jewellers Ltd., 1995 CanLII 1301 (ON CA), [1995] O.J. No. 3556 (ONCA).

[82] The plaintiffs asked me to find personal liability on the part of Byers and Davis because SSFL was not incorporated until a few months after the first festival. After the 2013 festival, as I have already found, Byers and Davis acted on behalf of the corporation and it is reasonable to infer that any obligations and benefits that could have been created in 2013 would have accrued to the corporation.

[83] Accordingly, I find that even if a catering contract existed, the claims against Byers and Davis are without merit and should be dismissed.

Conclusion

[84] For these reasons, the motion of the defendants Byers, Davis and SSFL is granted and the claims against them are therefore dismissed.

[85] In light of the dismissal of the claims on their merits against these defendants, I need not address the limitation period arguments.

Motion of the defendants McIsaac and The Municipality

[86] For the reasons that follow, I would dismiss the claims against McIsaac and the Municipality because they were commenced outside the prescribed limitation period and, in any event, are without merit.

The Law

[87] Section 4 of the Limitations Act, 2002, provides that “…a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”

[88] In determining when a claim is discovered, s. 5 of the Act provides as follows:

5(1) A claim is discovered on the earlier of,

a) the day on which the person with the claim first knew,

i) that the injury, loss or damage had occurred,

ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

iii) that the act or omission was that of the person against whom the claim is made, and

iv) that having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it, and

b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[89] In Longo v. MacLaren Art Centre 2014 ONCA 526 para 44, the Court of Appeal provided guidance on applying the provisions of section 5 of the Act:

Certainty of a potential defendant’s responsibility for an act or omission that caused or contributed to the loss is not a requirement. All that is required is that the plaintiff has prima facie grounds to infer that the acts or omissions were caused by the identified parties.

[90] Subsection 448(1) of the Municipal Act provides “No proceeding for damages or otherwise shall be commenced against a member of council…for any act done in good faith…”

[91] The onus of establishing whether the Municipality has acted in bad faith rests on the plaintiff. There is no obligation to prove it acted in good faith.[^1]

[92] The standard to be met is high and the evidence must demonstrate the Municipality has acted other than in the public interest.[^2]

The Evidence

[93] White suggests the Municipality entered into an agreement with Byers, Davis and SSFL prior to the special meeting on August 18, 2016. He bases this partly on the letter Davis sent to the Municipality on August 15, 2016 which accepts their offer to cater the festival and which refers to a “joint venture.” He also suggests he spoke with members of council shortly after the special meeting and learned of the agreement.

[94] Byers spoke to McIsaac on August 15, 2016 regarding his concerns about not having a contract for catering services for the festival. As a result of this conversation, the Municipality gave notice of a special meeting of council as required by law.

[95] In his letter to council Byers used the term “joint venture” which he described in cross as a commitment to cater if the festival ultimately required it, rather than a confirmed agreement. He testified that he understood the catering would have to be approved by council.

[96] The August 15, 2016 letter also included wording that suggested the Municipality’s application to the AGCO had been accepted. Byers agreed in cross-examination that this did not refer to an actual physical application that was submitted by the Municipality. He clarified this statement by suggesting it referred to the fact that the Manager of Recreation and Facilities had confirmed to him verbally that they could cater the festival.

[97] White admitted in cross-examination that the Municipality cannot enter into a joint venture without a resolution of council, though he maintained that something must have been done prior to the meeting to apply to the AGCO before a fifteen-day deadline.

[98] In text messages to the Municipality dated August 20, 2016 White stated:

As discussed on the phone, it appears you guys were mislead [sic] to believe The Hawk and Fox was not able to cater the Smoke and Spurs. Simply an outright lie. We were completely blind sided by the news the municipality has taken over the catering of the Smoke n Spurs….Please take the time and call local AGCO inspector Lorne Blais or his supervisor OPP officer Terra Markic to confirm everything I’m telling you is the truth and you’ve been lied to…

…You told me the municipality really doesn’t want to do the catering and that you’re scrambling and not prepared and you only agreed because you guys thought it was an “emergency situation” and called an emergency meeting in error and made a [sic] uninformed decision. Like I said me and our employees are completely blind sided by the municipal involvement.

[99] Counsel for White sent a letter dated August 25, 2016 to the Municipality. The letter outlines White’s concerns that the Municipality, by agreeing to the catering contract, has negligently interfered with his business relationship with the festival. It alleges conflict of interest on the part of McIsaac as well as other municipal employees. It concludes by suggesting that unless the Municipality removes itself from providing catering services, an action will be commenced.

[100] Counsel for White sent a letter to SSFL on August 31, 2016 which confirmed, among other things, that the Municipality had decided not to provide catering services to the festival.

[101] White also alleges the Municipality had private financial information about his alleged contract with the festival. In cross-examination, however, he was unable to substantiate this allegation, other than to say that McIsaac had once asked him how much money he made on alcohol sales at the festival.

Analysis

The Limitation Period

[102] Counsel for the plaintiffs submit that the claims framed in bad faith and negligence could not have been discovered prior to the first week of September 2018. This is when, it is argued, he received the audio/visual recording of the special meeting of council. White suggests the video revealed details he could not have known before, such as Byers and Davis making false representations about his state of readiness to cater the festival, and the Municipality accepting the representations they knew to be false. If I accept this as the date the claims were discoverable, then the notice of action was issued before the two-year limitation period began to run.

[103] I find that the details in the audio/visual recording provided essentially the same information to White that he knew by at least August 20, 2016. On that date he sent text messages to the Municipality suggesting they had been misled to believe he could not cater the event. He suggested this resulted in them blindsiding him with their agreement to cater the festival.

[104] White also became aware this agreement to cater ended on August 25, 2016 when Byers advised the Municipality, they had obtained their own special occasion permit. I find this ended the resolution to provide catering to the festival and accordingly the Municipality’s involvement in the matter. White must have known about this change before his counsel sent the letter dated August 31, 2016 in which he acknowledges the Municipality had pulled out of the festival.

[105] The plaintiffs clearly had much more than prima facie grounds regarding potential claims against McIsaac and the Municipality by at least August 20, 2016. The notice of action was therefore issued outside the two-year limitation period and accordingly their claims against these defendants are statute-barred.

Bad Faith and Negligence

[106] The evidence establishes that the Municipality received on August 8, 2016 the notice from White suggesting he had notified the AGCO and the OPP that he would be catering the event. The plaintiffs argue that this notice together with White’s text messages made it clear that he was prepared to proceed. He therefore submits that they chose to knowingly act to his detriment on false information from Byers. The plaintiffs also submit that there is likely more evidence to support their allegations of bad faith and negligence. They refer to the following outstanding Freedom of Information requests filed on August 25, 2016:

a. Date(s), time(s), locations(s), meeting minutes, and ANY correspondence regarding meetings (authorized or unauthorized by council) with Mayor McIsaac or any other municipal representatives regarding the Smoke “N” Spurs festival 2016;

b. ALL correspondence written or verbal offering employment to Mayor McIsaac’s children directly or indirectly, internal or external posting, in any way to work or volunteer at the Smoke “N” Spurs Festival 2016;

c. All municipal job recognition and identification, job descriptions, job postings, job applications and resumes, and hiring process interviews, hiring selection and recommendation, and all council resolutions authorizing the aforementioned activities under the Municipality of Powassan Hiring By-Law;

d. ALL deleted text messages on Mayor Pet McIsaac’s municipal paid cell phone;

e. Copies of ALL council or committee meeting minutes whereby Mayor McIsaac and/or Councillor Glabb did or did not declare a municipal conflict of interest during discussions and decisions on the Smoke “N” Spurs, the Hawk & Fox, Chip Stands or Todd White;

f. All sponsorships given to the Smoke “N” Spurs both monetary and in kind (eg use of municipal bleachers);

g. All advertising or promotions the municipality has done for the Smoke “N” Spurs festival. Including but not limited to municipal website, municipal bill boards, municipal electronic sign, Mayor McIsaac’s Facebook Page, and Mayor McIsaac’s twitter page;

h. The date, time and duration of all phone calls and texts received or sent from all municipal paid cell phones and land lines to 705 471 7055, 705 498 4452 and 705 724 6400;

i. ALL municipal staff, mayor and council correspondence related to the Smoke “N” Spurs Festival September 2, 3 and 4, 2016. Including but not limited to all audio/video recordings, written resolutions, other written, e-mails, municipal phone texts, messenger from Mayor McIsaac’s facebook page, Mayor McIsaac’s twitter page, any municipal social media and any municipal correspondence method not publicly known. Also including all abovementioned sources that have been deleted;

j. The council resolution or other document that gave council’s approval to send a catering notification form to the AGCO on August 2, 2016. (This catering notification form was the municipalities’ notification that they were going to cater the Smoke “N” Spurs festival 2016.) Also please provide copies of the written notification forms sent to the AGCO, the health department, municipal clerk, fire department and building department.

[107] I disagree. The responses to the requests above – if they exist – are largely irrelevant or moot because the Municipality never followed through with its commitment as a back-up caterer.

[108] The evidence I have accepted is unable to establish bad faith and negligence on the part of McIsaac and the Municipality. After meeting with Byers, McIsaac brought the issue to a special meeting of council. It was not a secret meeting and they were not required to invite White. At that meeting McIsaac acknowledged several times that he cannot bind council and a vote is required. Byers detailed his concerns and request. Councilors had the chance to ask questions. They accepted Byers’ concerns as being valid, contrary to the plaintiff’s assertions. Accepting Byers’ concerns does not amount to bad faith or negligence. Council agreed by resolution to help if no other caterer could be located. It is noteworthy that they did not in their resolution exclude the plaintiffs as potential caterers.

[109] Council made this decision in the public interest, noting that the festival was beneficial to the community. Nothing in my review of that meeting suggests anything untoward on the part of McIsaac and the Municipality.

[110] Six days after agreeing to assist, the Municipality was advised SSFL would cater the alcohol themselves. Nothing in the evidence suggests McIsaac and the Municipality did anything in that brief period that could be construed as bad faith or negligence.

Conclusion

[111] For these reasons, I find the claims against McIsaac and the Municipality are statute-barred. In any event, I also find there is no merit to them, and they are accordingly dismissed.

[112] If counsel cannot agree on costs, the defendants may within 30 days of the date of these reasons file written submissions on costs, no longer than 5 pages each, excluding any offers to settle, bill of costs or books of authority. The plaintiffs will have 15 days from receipt of these materials to deliver responding submissions. There will be no reply.

Justice P.J. Boucher

Released: April 06, 2021

COURT FILE NO.: C-0142-18

DATE: 2021-04-06

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Todd White, 2148625 Ontario Limited o/a Hawk & Fox Grill and Convenience

Plaintiffs

– and –

Lorne Byers, Lea Davis, Smoken Spurs Festival Ltd., Peter McIsaac, The Municipality of Powassan, John Doe Corporation

Defendants

REASONS FO JUDGMENT

Boucher, J.

Released: April 06, 2021

[^1]: Equity Waste Management of Canada v. Halton Hills (Town) (1997) at paras 55-56. See also Seguin (Township) v. Hamer 2014 ONCA 108 at para 5 and Uukkivi v. Lake of Bays (Township) 2004 CanLII 71891 (ONSC) at para 31.

[^2]: Municipal Parking Corporation v. Toronto (City) 2009 CanLII 65385 (ONSC) at paras 24 and 27.