COURT FILE NO.: CV-20-00637344-0000

DATE: 20220112

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

WILLIAM FEHR SR. and DOROTHEY FEHR

Plaintiffs

• and –

PAUL GRIBILAS and PETER GRIBILAS

Defendants

• and –

J+W FOODS INC., WILLIAM FEHR JR., STEVEN TROUGAKOS

Third Parties

Christine G. Carter for the Plaintiffs

Michael R. Kestenberg for the Defendant Paul Gribilas

Norm Emblem, William Pepall and Spencer Jones for the Defendant Peter Gribilas

Jonathan Rosenstein for the Third Party J+W Foods Inc.

HEARD: December 15, 2021

PERELL, J.

REASONS FOR DECISION

Contents

A. Introduction. 2

B. Overview.. 2

C. Procedural and Evidentiary Background. 3

D. Facts. 4

1. Introduction to the Facts. 4

2. The Dramatis Personae and the Quality of the Factual Record. 5

3. Summary of the Facts. 6

4. Factual Background. 8

E. Is the Case Appropriate for a Summary Judgment?. 16

F. Discussion and Analysis. 18

G. Conclusion. 29

A. Introduction

[1] In this case, there is an action and a third party proceeding. There are three motions before the court. In the main action, there are two summary judgment motions from Defendants seeking a stay or a dismissal of the main action. In the third party proceeding, there is a motion by one of the Third Parties for a stay or dismissal of the main action. The stay motion is also relied on by the Defendants in the main action.

[2] All three motions raise the question: When may a third-party beneficiary of a no-claim-over provision in a general release rely on the release to have an action against themselves stayed or dismissed?

[3] In the main action, the Plaintiffs, William Fehr Sr. and Dorothey Fehr, sue the Defendant Paul Gribilas, who was the lawyer for J+W Foods Inc., and they sue the Defendant Peter Gribilas, who was the accountant for J+W Foods Inc. In the main action, the Fehrs allege that Paul and Peter Gribilas failed to follow instructions, as a lawyer and as an accountant respectively, with the result that the Fehrs never acquired or they lost a 1/3 ownership interest in J+W Foods Inc.

[4] Paul Gribilas commenced third party proceedings against J+W Foods Inc., William Fehr Jr., and Steven Trougakos. Peter Gribilas intended to commence similar third party proceedings. Paul Gribilas and Peter Gribilas respectively submit that if they are liable to William Fehr Sr. and Dorothey Fehr, then the fault lies with the third parties against whom they seek contribution and an indemnity.

[5] For a list of reasons, Paul Gribilas brings a motion for a summary judgment to have the Fehrs’ action stayed or dismissed. For a list of reasons, Peter Gribilas brings a motion for a summary judgment to have the Fehrs’ action stayed or dismissed.

[6] In alliance with the Gribilas’ summary judgment motion, one of the Third Parties, J+W Foods Inc., brings a stay motion. J+W Foods Inc. submits that the main action should be stayed or dismissed because the Plaintiffs signed a release that contains a no-claim-over provision. J+W Foods Inc. - and the Defendants Gribilas - submit that the release bars the main action. If the main action is dismissed, the third party proceeding will also be dismissed as moot.

[7] For the reasons that follow, I grant the three motions, and I permanently stay the Plaintiffs’ action and I permanently stay the third party proceedings.

B. Overview

[8] In the main action and in the third party proceeding, there are many genuine issues requiring a trial that cannot be fairly resolved on the three motions before the court.

[9] I do not know the full story and the truth of what happened between the parties. To learn the truth, it would be necessary that at least nine witnesses testify and be cross-examined. (William Fehr Sr., Dorothey Fehr, William Fehr Jr., Tasia Trougakos-Fehr, John Trougakos, Steven Trougakos, Paul Gribilas, Peter Gribilas, and Christine Carter.) However, on the motions now before the court, only four witnesses testified (Dorothey Fehr, Steven Trougakos, Paul Gribilas, and Peter Gribilas), and none of them were cross-examined. The witnesses’ conflicting accounts of the events largely went uncontradicted, and there are fundamental creditability and reliability questions and a dearth of evidence and a paucity of documents to resolve them.

[10] One might think that in these circumstances, I should dismiss the summary judgment motions and send the main action and the third party proceeding onto trial, since the use of the summary judgement powers afforded by the Rules of Civil Procedure would be none of appropriate, fair, or just.

[11] However, that thought would be incorrect, because I do know the complete truth about the release that is the crux of the main action and of the third party proceedings.

[12] On the matter of the release, the outcome of a trial is inevitable and a foregone conclusion. The release signed by Dorothey Fehr and William Fehr Sr. releases all claims to “an interest in the corporate shareholdings of J+W Foods Inc. by Dorothey Fehr and William Fehr Sr.” Although Paul Gribilas and Peter Gribilas are not signatories of the release, it provides them with a defence to the main action in the sense that the main action should be permanently stayed, and the release makes moot their claim for relief over in the third party proceedings.

[13] Because I can determine the complete factual story and truth about the release about which there are no substantial credibility or reliability questions and since I can determine the release’s effect in law, it is all of appropriate, fair, and just to decide the main action and the third party proceeding summarily. The outcome is that the main action and the third party proceeding are permanently stayed as an abuse of process.

C. Procedural and Evidentiary Background

[14] On March 3, 2020, William Fehr Sr. and Dorothey Fehr commenced their action against Paul Gribilas and Peter Gribilas. William Fehr Sr. and Dorothey Fehr claim damages of $1.0 million as compensation for the loss or the divestiture of their shares in J+W Foods Inc., or they claim a declaration that they are entitled to 1/3 of the shares of J+W Foods Inc.

[15] In the main action, William Fehr Sr. and Dorothey Fehr allege that Paul and Peter Gribilas, J+W Foods Inc.’s corporate lawyer and corporate accountant, respectively, were responsible for maintaining the corporation’s corporate records and thus they are liable in negligence for the alleged loss or improper divestment of the Fehrs’ 1/3 ownership interest in J+W Foods Inc.

[16] On September 24, 2020, Paul Gribilas commenced a third party proceeding against J+W Foods Inc., William Fehr Jr., and Steven Trougakos. Peter Gribilas intends to bring a similar third party proceeding.

[17] On September 29, 2020, Paul Gribilas delivered his Statement of Defence in the main action.

[18] On February 16, 2021 and February 17, 2021, Peter Gribilas delivered his Statements of Defence in the main action. He delivered two pleadings, one for the period when he practised with Burns Hubley LLP and one for the period after he joined KPMG LLP.

[19] On July 23, 2021, Paul Gribilas brought a motion for a summary judgment staying or dismissing the main action. The motion is supported by his affidavit dated July 14, 2021.

[20] On August 13, 2021, Peter Gribilas brought a motion for a summary judgment staying or dismissing the main action. The motion is supported by his affidavit dated July 14, 2021.

[21] On August 25, 2021, the Third Party J+W Foods Inc. brought a motion to stay the main action. Although the motion is supported by the affidavit dated August 25, 2021 of Steven Trougakos, another of the Third Parties, the motion is only brought by J+W Foods Inc. Steven Trougakos is speaking for J+W Foods Inc. Steven Trougakos and William Fehr Jr. as third parties have not defended the third party proceedings but they nevertheless appear to be relying on the motion being brought by J+W Foods Inc.

[22] The Plaintiffs resisted the three motions. They relied on the affidavit of Dorothey Fehr dated September 9, 2021.

[23] There were no cross-examinations of Dorothey Fehr, Steven Trougakos, Paul Gribilas, and Peter Gribilas.

D. Facts

1. Introduction to the Facts

[24] In this next part of my Reasons for Decision, I shall identify the factual matters for which there are genuine issues requiring a trial that cannot be appropriately, fairly, and justly resolved on the three motions before the court.

[25] And, in that part of my Reasons for Decision, I shall set out the findings of fact that appropriately, fairly, and justly can be made on the three motions before the court. Those findings include the factual findings on the dispositive issue of the release signed by the Plaintiffs in April 2019. My legal analysis will follow the discussion of the facts.

[26] Before I begin my analysis of the facts for the summary judgment motions and for J+W Foods Inc.’s stay motion, it is necessary to note the circumstance that William Fehr Sr. and Dorothey Fehr are amending their Statement of Claim to sue Burns Hubley LLP, of which Peter Gribilas was a partner. They no longer sue Peter Gribilas directly.

[27] Nothing ultimately turns on this amendment. It simply ends the confusion about who was retained by Peter Gribilas’ professional liability insurers to defend him from the allegations made against him in the main action.

[28] As will emerge from the factual narrative below, the time span of the story is from 2002 until 2020. During that time, from 2002 to 2012, Peter Gribilas was a partner of Burns Hubley LLP. In March 2012, Peter Gribilas moved his accounting practice to KPMG LLP. The amendment to the Statement of Claim clarifies that Peter Gribilas is sued for the work he did while he was a partner of Burns Hubley LLP. That accounting firm is vicariously responsible for Peter Gribilas’ work, but he is the actor as far as the main action and the third party proceeding is concerned.

[29] Before I begin my analysis of the facts, I underscore that the main action is essentially a professional negligence claim against a lawyer and an accountant both of whom deny that they were retained by the Plaintiffs and I underscore that in the third party proceedings, the defendant lawyer and the defendant accountant seek contribution and indemnity from the Third Parties who were their clients or who gave them instructions about their professional activities.

2. The Dramatis Personae and the Quality of the Factual Record

[30] The main action and the third party proceedings are about the affairs of J&W Foods Inc., a corporation incorporated pursuant to the Ontario Business Corporations Act.[^1] J&W Foods Inc., however, is referred to in the style of cause of the third party proceeding and in various documents as “J+W Foods Inc.”, which is the way that I shall refer to it in these Reasons for Decision.

[31] The nine principal characters involved in the factual story or narrative of the main action and the third party proceeding are William Fehr Sr., Dorothey Fehr, William Fehr Jr., Tasia Trougakos-Fehr, John Trougakos, Steven Trougakos, Paul Gribilas, Peter Gribilas, and Christine Carter.

• William Fehr Sr. is married to Dorothey Fehr.

• Their son is William Fehr Jr., who is married to Tasia Trougakos-Fehr, who is the sister of John and Steven Trougakos and an officer of J+W Foods Inc.

• William Fehr Jr., John Trougakos, and Steven Trougakos were 1/3 interest shareholders of J+W Foods Inc.

• Paul Gribilas is a lawyer who was a boyhood and adult friend of William Fehr Jr., John Trougakos, and Steven Trougakos. Paul Gribilas was the corporate lawyer for J+W Foods Inc. However, when that retainer began is a genuine issue requiring a trial. The terms of Paul Gribilas’ retainer is a genuine issue requiring a trial.

• Peter Gribilas is an accountant and is Paul Gribilas’ brother. Peter Gribilas was a boyhood and adult friend of William Fehr Jr., John Trougakos, and Steven Trougakos. Peter Gribilas was J+W Foods Inc.’s accountant. The terms of his engagement as accountant is a genuine issue requiring a trial.

• Christine Carter is the lawyer retained in 2018 by William Fehr Sr. and Dorothey Fehr to collect on a loan they made to J+W Foods Inc.

• Christine Carter acted for William Fehr Sr. and Dorothey Fehr and Paul Gribilas acted for J+W Foods Inc., William Fehr Jr., and Steven Trougakos with respect to the delivery of a general release in 2019.

[32] As the detailed factual account below will reveal, without hearing from the nine principal actors under the forensic light of a trial, it is not possible summarily to determine what actually happened that led William Fehr Sr. and Dorothey Fehr to sue Paul and Peter Gribilas.

[33] For the three motions before the court only four witnesses delivered affidavits, and there were no cross-examinations. The documentary productions were meagre. Not surprisingly, given that the story spans almost twenty years, there is good reason to doubt the credibility and the reliability of the testimony and the memories of all of the witnesses about the events that occurred between 2002 and 2012. (The events concerning the release are more contemporary having occurred between November 2018 and April 2019).

[34] The evidence for the summary judgment motion also wanted for expert evidence on the duty of care issues involving lawyers and accountants acting for corporations, and it wanted for expert evidence on the value of the shareholding that William Fehr Sr. and Dorothey Fehr baldly submit represents the $1.0 million of damages they suffered from the professional negligence of the defendant lawyer and the defendant accountant.

[35] On the summary judgment motions, the moving parties and the responding parties coyly or slyly relied, I am not sure which, on the directive that the court is to assume that the litigants on a summary judgment motion have put their best evidentiary foot forward and the moving parties relied on adverse inferences from the plaintiff’s alleged failure to submit evidence from William Fehr Sr.

[36] I, however, was not impressed by the clumsy evidentiary footwork of all of the litigants any of whom could have put forward better cases than they did. The matter of adverse inferences was a two-edged sword that could injure the swordsman, and I am not prepared to draw adverse inferences on this paltry evidentiary record proffered for the three motions before the court.

[37] But for the matter of the release, the effectiveness of which in my opinion is a foregone conclusion and about which there are no genuine issues requiring a trial or no genuine issues that cannot be resolved without the need of a trial, I would have dismissed the summary judgment motions and the third parties’ motion and sent the main action and the third party proceeding on to trial.

3. Summary of the Facts

[38] I shall provide a more fulsome account of my own findings of fact in the next section of these Reasons for Decision, but it is helpful first to provide a summary of the facts from the different perspectives of the parties.

[39] From the perspective of William Fehr Sr. and Dorothey Fehr, the factual story or narrative of the immediate case, which was not tempered by cross-examination, may be summarized as follows:

a. In 2002, their son William Fehr Jr. partners with his friends John and Steven Trougakos to start up a meat and food processing business known as J+W Foods Inc.

b. In 2004, John Trougakos sells his 1/3 interest in the business to William Fehr Sr. and Dorothey Fehr and they become owners, directors, and officers of the business.

c. In 2004 and frequently thereafter, William Fehr Sr. and Dorothey Fehr instruct Paul Gribilas, who was their lawyer and the lawyer for J+W Foods Inc., to ensure that their shareholdings in J+W Foods Inc. are protected in the corporate books and records.

d. In 2004 and frequently thereafter until 2008, William Fehr Sr. and Dorothey Fehr instruct Peter Gribilas, who was the accountant for J+W Foods Inc., to ensure that their shareholdings in J+W Foods Inc. are protected in the corporate books and records.

e. On October 31, 2008, William Fehr Sr. and Dorothey Fehr resign as directors and officers of J+W Foods Inc. They do not relinquish their 1/3 ownership interest in the business, which William Fehr Sr. has turned around from a business failure to a successful enterprise.

f. In 2009, William Fehr Sr. and Dorothey Fehr lend J+W Foods Inc. $100,000.

g. The loan is advanced, but the loan is not repaid, and in 2018, William Fehr Sr. and Dorothey Fehr seek to collect on the loan. They retain lawyer Christine Carter to collect the outstanding indebtedness.

h. In the course of seeking to recover payment of the loan, William Fehr Sr. and Dorothey Fehr discover that in breach of the instructions given to them, Paul Gribilas and Peter Gribilas have not ensured that the Fehrs’ shareholdings in J+W Foods Inc. are protected in the corporate books and records of the corporation.

i. On behalf of William Fehr Sr. and Dorothey Fehr, Christine Carter successfully recovers the outstanding loan debt of J+W Foods Inc. In the negotiation of the settlement, Paul Gribilas acts for J+W Foods Inc., William Fehr Jr., Steven Trougakos, and Tasia Trougakos-Fehr.

j. In 2019, J+W Foods Inc. pays $120,000 to discharge its loan indebtedness and in April 2019, William Fehr Sr., Dorothey Fehr, J+W Foods Inc., William Fehr Jr., Steven Trougakos, and Tasia Trougakos-Fehr sign a mutual release of, amongst other things, all claims to “an interest in the corporate shareholdings of J+W Foods Inc. by Dorothey Fehr and William Fehr Sr.”

k. In 2020, William Fehr Sr. and Dorothey Fehr sue Paul Gribilas and Peter Gribilas for breach of their professional duties as a lawyer and as an accountant respectively to ensure that the Fehrs’ shareholdings in J+W Foods Inc. are protected in the corporate books and records of J+W Foods Inc. They sue for $1.0 million which is their guesstimate of the value of the allegedly prospering J+W Foods Inc.

l. In 2021, Paul Gribilas and Peter Gribilas bring motions for summary judgment to have the claims against them stayed or dismissed on the grounds, amongst other grounds, that they are beneficiaries of the 2019 release signed by William Fehr Sr. and Dorothey Fehr.

m. William Fehr Sr. and Dorothey Fehr submit that they are not barred by the release from suing Paul Gribilas and Peter Gribilas respectively for professional negligence. William Fehr Sr. and Dorothey Fehr submit that the release did not and does not insulate Paul Gribilas and Peter Gribilas from professional negligence claims and that Paul and Peter Gribilas are liable for failing to ensure that their 1/3 ownership interest in J+W Foods Inc. was protected in the corporate books and records of J+W Foods Inc.

[40] From the perspective of Paul Gribilas and Peter Gribilas, the Fehrs’ account of the factual story or narrative of the immediate case is untrue on critical matters but for which there is no genuine issue requiring a trial.

[41] Paul Gribilas and Peter Gribilas deny that they respectively had any professional obligations to William Fehr Sr. and Dorothey Fehr. They both deny that they ever knew or ought to have known that William Fehr Sr. and Dorothey Fehr had an ownership interest in J+W Foods Inc. They both deny that they were instructed to ensure that William Fehr Sr. and Dorothey Fehr’s ownership interest in J+W Foods Inc. be protected in the corporate books and records of J+W Foods Inc. They both assert that because of the 2019 general release, William Fehr Sr. and Dorothey Fehr are barred from suing them for professional negligence. They both assert that William Fehr Sr, and Dorothey Fehr have not proven any damages, and that this is another reason why the main action should be dismissed. Peter Gribilas submits that William Fehr Sr.’s and Dorothey Fehr’s action is statute-barred pursuant to the Limitations Act, 2002.[^2]

[42] As I shall explain below, I disagree with Paul Gribilas and Peter Gribilas’s submission that there are no genuine issues requiring a trial. As I have already foreshadowed in the introduction and as I shall explain in detail below, there are a plethora of genuine issues requiring a trial that cannot be fairly resolved on the three motions.

[43] However, as foreshadowed above, and as I shall explain in detail below, I can fairly determine the actual factual story about one dispositive matter. That one dispositive matter makes it unnecessary to resolve the plethora of genuine issues that would require a trial. On the summary judgment motions and on the Third Parties’ motion, I can appropriately, fairly and justly, determine the factual and legal truth about the negotiation and the legal effectiveness of the 2019 release.

4. Factual Background

[44] In November 2002, John Trougakos and William Fehr Jr. incorporate J+W Foods Inc.

[45] There are genuine issues requiring a trial as to whether a lawyer or accountant acted on the incorporation and as to what the initial allocation of shares was for J+W Foods Inc. Dorothey Fehr’s evidence is that Paul Gribilas and Peter Gribilas may have been involved from the outset of the incorporation. Her evidence is that she recalls the Gribilas’ acting as the corporation’s lawyer and the corporation’s accountant within about a year. Paul Gribilas’ evidence is that he was not retained until 2009, although because of his friendship with John Trougakos, he was aware of some of the affairs of J+W Foods Inc.

[46] As to the initial allocation of shares, there is no dispute that shares were intended to be issued to John Trougakos and to William Fehr Jr. What is unclear is whether shares were also intended to be issued to Steven Trougakos. Thus, it is unclear whether at the outset there were two 1/2 interest shareholders or three 1/3 interest shareholders. It is also unclear when and if the intended initial allocation of shares was ever documented.

[47] Dorothey Fehr deposes that on June 1, 2004, she and her husband purchased John Trougakos’s 1/2 ownership interest, which they later came to understand was a 1/3 ownership interest. William Fehr Sr., Dorothey Fehr, and John Trougakos signed a handwritten document written by John Trougakos that read:

John Trougakos current owner of J+W Foods Inc is selling his share for the amount of $6,000. Dorothy [sic] + William Fehr will assume all debts and responsibilities of J+W Foods Inc.”

[48] No lawyers were involved in this buyout of John Trougakos’ ownership interest in J+W Foods Inc.

[49] Having purchased an interest in J+W Foods Inc., William Fehr Sr. and Dorothey Fehr decided to help their son William Fehr Jr. run the business. In 2004, William Fehr Sr. and Dorothey Fehr became the two directors of the corporation replacing John Trougakos and William Fehr Jr. as directors. Dorothey Fehr deposed that the documents making her and her husband directors were prepared by Paul Gribilas. He, however, denies doing so. He says he was not retained until 2009. This is a genuine issue requiring a trial.

[50] Dorothey Fehr deposes that at the time that she and her husband purchased John Trougakos’s shares in 2004, they instructed Paul Gribilas to update the corporate records and they instructed him to ensure that their ownership interest in J+W Foods Inc. was protected. This is disputed by Paul Gribilas. This is a genuine issue requiring a trial.

[51] Dorothey Fehr deposed that between 2004 and 2008 she instructed both Paul Gribilas and Peter Gribilas to update the corporate records and ensure that her and her husband’s ownership interest was protected. To quote paragraphs 26-27 and 29 of her affidavit dated September 9, 2021:

26. Between 2004 and 2008, as President of the Company, I dealt directly with both Peter and Paul Gribilas and provided them with information and instructions. On more than one occasion, I attended at the offices of the law firm and the accounting firm (when Peter was still at Burns Hubley) and asked both Peter and Paul to ensure that our interest as owners were properly protected. I believe that it was their job at the company's lawyers and accountants to take instructions from me as President and carry out my instructions. I believe that they were both negligent in refusing to take instructions from me and never advising me that they were refusing to carry out my instructions.

27. Instead, they both gave me the run around and ignored my requests. On one occasion, I overhead [sic] Paul speaking with my son Billy. I had just left a meeting with Paul, again asking him to make sure the books were accurate. He was on the phone with Billy and thought I had left the building. He was saying: "Don't worry, let's just do it this way for now and once she's out we'll transfer it all back" or words to that effect. This was in 2008, after Paul had advised me that I was "out" because I was "too much of a headache".

28. I got the same type of attitude from the accountant Peter Gribilas. In paragraph 5 of his affidavit, Peter says: "For the years ended October 31, 2004 to 2011 Burns Hubley was engaged by the Company" and prepared "the annual tax returns based on information provided to me by management (William Fehr and Steven Trougakos)". I was the President of the Company from 2004 to 2008 and was the one providing documents and instructions to Peter Gribilas. I was management and owned 1/2 the shares in the Company and he was clearly not taking instructions from me. He also gave me the run around and never addressed the issues I raised or followed my instructions. He never told me that I had bought shares from someone who did not own them on paper.

[52] Peter Gribilas deposed that for the years 2004 to 2011, Burns Hubley LLP was engaged by J+W Foods Inc. pursuant to successive compilation (Notice to Reader) engagement agreements to compile balance sheet and the statements of income and retained earnings and to prepare the annual tax returns based upon information provided by management (William Fehr Jr. and Steven Trougakos). He deposed that his work did not include providing services relating to maintaining the corporate records and that he did not do such work. He expressly denies the allegation that he was engaged to update J+W Foods Inc.’s corporate records.

[53] There are a plethora of genuine issues requiring a trial about whether Paul Gribilas and or Peter Gribilas were retained to ensure that the Fehrs’ interest in J+W Foods Inc. was protected. Amongst the plethora of genuine issues requiring a trial there are the questions of what ensuring the Fehrs’ interest in J+W Foods Inc. means and remarkably there is a genuine issue requiring a trial about whether their interest which they now concede was a 1/3 interest ever needed protection.

[54] I say the matter of the need for protection is a remarkable genuine issue requiring a trial because corporate records are only a formality, and the failure of anyone to update the corporate records would not dispossess the Fehrs’ ownership interest in J+W Foods Inc. In other words, there is a genuine issue requiring a trial why resort was never made to s. 250 of the Ontario Business Corporations Act, which states:

Rectifying error in entering, etc., name

250 (1) Where the name of a person is alleged to be or have been wrongly entered or retained in, or wrongly deleted or wrongly omitted from, the registers or other records of a corporation, the corporation, a security holder of the corporation or any aggrieved person may apply to the court for an order that the registers or records be rectified.

Idem

(2) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order requiring the registers or other records of the corporation to be rectified;

(b) an order restraining the corporation from calling or holding a meeting of shareholders or paying a dividend or making any other distribution or payment to shareholders before the rectification;

(c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the registers or records of the corporation, whether the issue arises between two or more security holders, or between the corporation and any security holders or alleged security holders;

(d) an order compensating a party who has incurred a loss

[55] The matter of rectifying the shareholders’ register is a genuine issue requiring a trial that, however, like the plethora of issues about ensuring that the Fehrs’ ownership interest is protected, becomes moot because of the release that the Fehrs negotiated in late 2018 and signed in 2019.

[56] Returning to the narrative, Dorothey Fehr deposed that between 2004 and 2008 she was the president of J+W Foods Inc. and her husband was the director of sales. She deposed that he was on site every day and that he turned the company around from being a losing venture to a successful business.

[57] In late 2008, Dorothey Fehr and her husband resigned their positions with J+W Foods Inc. They deny relinquishing their 1/3 ownership interest. In paragraph 33 of her affidavit, she deposes as follows:

33. At that time, we had a septic tank flood in our home which caused a lot of stress and took months to deal with. Under extreme stress from the flood and under duress from Steve [Trougakos] we agreed to “resign”. We did not sell our shares or get any money for them.

[58] It is Paul Gribilas’ evidence that he was retained in March 2009 by J+W Foods Inc., after the Fehrs had resigned from J+W Foods Inc., to update its corporate records. He says that he was never aware or told that the Fehrs had an ownership interest in J+W Foods Inc. He deposes that he took instructions from William Fehr Jr. and Steven Trougakos. Once again, there are numerous genuine issues requiring a trial with respect to Paul Gribilas’ retainer as the corporate lawyer for J+W Foods Inc.

[59] In 2009, Paul Gribilas prepared corporate records that indicated that the owners of J+W Foods Inc. were William Fehr Jr., and Steven Trougakos. Notwithstanding their resignation as directors, William Fehr Sr. and Dorothey Fehr signed the corporate resolutions and shareholders’ register allocating shares, which records were backdated to the time of their resignation.

[60] Paul Gribilas sent a reporting letter dated March 11, 2009 to J+W Foods Inc. to the attention of William Fehr Jr and Steven Trougakos reporting that he had prepared the resignations of John Trougakos as the initial incorporator of J+W Foods Inc., and the resignations of Dorothey Fehr and William Fehr Sr. as directors and officers of J+W Foods Inc. effective October 31, 2008.

[61] Paul Gribilas also reported the appointment of Steven Trougakos and William Fehr Jr. as officers and directors and the allocation of 100 common shares to each of them. There are a multitude of genuine issues requiring a trial about the allocation of shareholdings during the history of J+W Foods Inc. and about the legal services provided by Paul Gribilas and when they were provided and for whom they were provided. As already noted above, there are genuine issues requiring a trial about the allocation of shares of J+W Foods Inc.

[62] In May 2009, William Fehr Jr. approached William Fehr Sr. and Dorothey Fehr and asked them to lend $100,000 to J+W Foods Inc., which they agreed to do. Paul Gribilas deposed that he acted for William Fehr Jr. and Steven Trougakos and he prepared a loan agreement and promissory notes. Paul Gribilas prepared an acknowledgment for William Fehr Sr to sign in which he waived independent legal advice and acknowledged that Paul Gribilas did not act for William Fehr Sr. However, after the documents were drafted, they were not used, and Paul Gribilas had nothing more to do with the loan transaction. I am not in a position on the current record to make any findings about Paul Gribilas’ involvement in the 2009 loan, and, once again, there are genuine issues requiring a trial.

[63] On March 1, 2012, Paul Gribilas moved his accounting practice from Burns Hubley LLP to KPMG LLP.

[64] The loan money was advanced, but the loan was not repaid and nine years later in 2018, William Fehr Sr. and Dorothey Fehr retained lawyer Christine Carter to collect on the loan.

[65] On May 28, 2018, Ms. Carter sent a lawyer’s letter to William Fehr Jr. demanding repayment of the loan. The letter also addressed the matter of the shareholdings of J+W Foods Inc. The letter stated:

We have been retained by William Fehr Sr. and Dorothey Fehr in connection with outstanding issues between them and [J+W Foods Inc.] as well as in connection with the loan in the amount of $100,000 advanced to William Fehr Jr. and Steven Trougakos for the benefit of [J+W Foods Inc.] by William Fehr Sr. In accordance with the promissory note dated May 2009, William Fehr Sr, hereby demands payment in full of the outstanding loan plus all accrued interest at the rate of 5% per annum, failing which interest will begin to run on the outstanding balance at the rate of 10% on June 28, 2018. In the event that payment is not received in full, legal proceedings will be instituted without further notice to you.

In addition, we recently have conducted a corporate search which revealed that there are outstanding issues with respect to a share transfer and resignation and appointment of corporate directors. Receipt of all documents related to the share transfer and change in corporate structure is also required on or before June 28, 2018. Kindly contact the writer directly or have your legal representative contact the writer to discuss these issues further, as well as partial reimbursement for the costs of the accounting, software and full reimbursement for spices supplied by [J+W Foods Inc.].

[66] Paul Gribilas was retained to respond to Ms. Carter’s demand letter. Paul Gribilas sends the following letter to Ms. Carter dated September 7, 2018 but sent in November 2018 by way of email attachment:

Dear Ms. Carter,

Please be advised that I am the lawyer for [J+W Foods Inc.], William Fehr Jr., and Steven Trougakos. My clients have provided to me a copy of your correspondence dated May 28, 2018 and delivered to my clients by registered mail. My clients do wish to resolve this matter amicably, especially given the close familial relationship between my client, William Fehr Jr. and your clients.

In order to allow me to better advise my clients, kindly provide to me a fully executed copy of the promissory note mentioned in your referenced correspondence, upon which you clearly rely, for my review. Please also provide to me a fully executed copy of any other document upon which your clients rely to establish the terms and conditions of this loan. Please also provide to me a current payout statement detailing the principal amount of the loan, complete interest calculations with full credit to my clients for all interest payments (partial or otherwise) made by my clients to date.

With respect to the second issue raised in your referenced correspondence, kindly advise of the particular corporate issues to which you refer. I am not aware of any shareholding interest in [J+W Foods Inc.] held by your clients that would entitle them to any internal information. Once I more clearly understand these particular issues, I will again be better able to advise my clients.

Finally, you also claim your clients are entitled to "partial reimbursement for the costs of accounting software" and "full reimbursement for spices supplied by [J+W Foods Inc.]. Kindly provide particulars of the basis of these "claims", and a quantification of the amounts your clients claim to be owing to them.

I trust you will take no steps to commence legal proceedings in these matters until we have had the opportunity to more fully discuss the issues. I await your earliest reply.

[67] Next, Ms. Carter sends the following email message to Paul Gribilas on December 4, 2018:

Hi Paul,

In response, I have been instructed to offer to accept the all-inclusive sum of $120,000 with payment to be made within 15 days. In the event that the offer is not accepted, I have also been instructed to issue the claim within 7 days of today's date seeking repayment of the loan, plus interest and transfer of the shares back to Dorothey and Bill Sr. In the event that the offer is accepted, a full and final release of all issues will be provided. Please get back to me as soon as possible to avoid unnecessary legal fees in finalizing the statement of claim.

[68] The result of these communications is Minutes of Settlement dated December 13, 2018, drafted by Paul Gribilas as follows:

Further to our recent settlement discussions and our telephone conference yesterday, be advised that I have had lengthy discussions with each my clients regarding your clients' offer to settle this matter, and I am instructed to resolve this matter on the following basis:

(a) my client, J+W Foods Inc., will pay to your client the sum of $120,000, all-inclusive, in full and final settlement of all matters between the parties, including, but not limited to, all issues that were raised or could have been raised in your correspondence dated May 28, 2018, my correspondence dated September 7, 2018 and my e-mail (with attachments) dated October 16, 2018;

(b) payment of the settlement amount shall be made as follows:

(i) $100,000.00 shall be payable on January 15, 2019; and

(ii) $20,000.00 shall be payable on July 1, 2019.

(c) the parties will enter into a mutual full and final release, in a form agreeable to counsel acting reasonably, which release shall be fully executed by the parties and held in escrow by their lawyers pending full payment of the settlement amount being made as set out herein;

(d) for clarity, this offer to settle encompasses all of your clients' claims, including their claim to a purported interest in the corporate shareholdings of [J+W Foods Inc.], and given this claim, I require that my individual clients, Steven Trougakos, William Fehr Jr. and Tasia Fehr, also be included as parties to the mutual full and final release;

(e) the parties will each bear their own costs.

I look forward to your earliest reply and hope that we can now settle this matter on the foregoing basis. If your client does agree to settle on the basis of the within offer to settle, then I would ask you to prepare a draft mutual full and final release for my review and comment.

[69] On December 18, 2018, Ms. Carter sent Paul Gribilas an email message confirming that the matter had settled and indicating that she will draft a mutual release shortly.

[70] In implementation of the settlement, on April 12, 2019, the parties signed the following release, which states:

MUTUAL FULL AND FINAL RELEASE IN CONSIDERATION of the payment, or the promise of payment, to Dorothey Fehr and William Fehr Sr. of the sum of ONE HUNDRED and TWENTY THOUSAND DOLLARS ($120,000.00) of lawful money of Canada, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned, WILLIAM FEHR JR, STEVEN TROUGAKOS, TASIA FEHR, J+W FOODS INC. and DOROTHEY FEHR, and WILLIAM FEHR SR, on behalf of themselves, their heirs, agents administrators, trustees, executors, assigns, successors and on behalf of any party or parties who claim a right or interest through them, (hereinafter referred to as the “Releasors”)

HEREBY RELEASE, ACQUIT, AND FOREVER DISCHARGE: ONE ANOTHER (hereinafter referred to as the "Releasees") from all manner of actions, causes of action, suits, debts, dues, accounts, bonds, covenants, contract, complaints, claims and demands for damages, monies, losses, indemnity, costs, interest in loss, or injuries howsoever arising which hereto may have been or may hereafter be sustained by the Releasors, or any of them as a consequence of a loan advanced by Dorothey Fehr and William Fehr Sr., any claim to an interest in the corporate shareholdings of J+W Foods Inc. by William Fehr Sr. and Dorothey Fehr and all claims for outstanding invoices by J+W Foods Inc., any claim for use of the Honda Civic, any claims for outstanding invoices of Little Guys Food Supplies Inc., any claim for use and/or mileage of a truck, any claim for payment of spice jars or computer software, (hereinafter the "Matter") and any and all issues arising from the Matter and any and all actions, causes of action, claims or demands of whatsoever nature, whether in contract or in tort or arising as a result of a fiduciary duty or by virtue of any statute or upon or by reason of any damage, loss or injury arising out of the Matter.

WITHOUT LIMITING THE MUTUAL GENERALITY OF THE FOREGOING, the Releasors declare that the intent of this Full and Final Release is to conclude all issues arising from the Matter and it is understood and agreed that this Release is intended to cover, and does cover, not only all known injuries, losses and damages, but also injuries, losses and damages not now known or anticipated but which may later develop or be discovered, including all the effects and consequences thereof.

AND FOR THE SAID CONSIDERATION it is agreed and understood that the Releasors will not make or continue any claim or take any proceedings against any other person or corporation who might claim, in any manner or forum, contribution or indemnity in common law or in equity, or under the provisions of any statute or regulation, including the Negligence Act and the amendments thereto and/or under any successor legislation thereto, and/or under the Rules of Civil Procedure, from the Releasees discharged by this Full and Final Release, in connection with the Matter.

IT IS AGREED AND UNDERSTOOD that if any Releasor does commence or continue such an action, or take or continue with such proceedings, and the Releasees, or any of them, are added to such proceeding in any manner whatsoever, whether justified in law or not, the offending Releasor(s) will immediately discontinue the proceedings and/or claims or have the Releasees removed from such actions, and the offending Releasors will be jointly and severally liable to the affected Releasee(s) for the legal costs incurred in any such proceeding, on a full indemnity scale. This Mutual Full and Final Release shall also operate conclusively as an estoppel in the event of any claim, action, complaint or proceeding which might be brought in the future by any of the Releasors with respect to the matters covered by this Full and Final Release. This Mutual Full and Final Release may be pleaded in the event any such claim, action, complaint or proceeding is brought, as a complete defence and reply, and may be relied upon in any proceeding to dismiss the claim, action, complaint or proceeding on a summary basis and no objection will be raised by the Releasors in any subsequent action that the other parties in the subsequent action were not privy to formation of this Release.

AND FOR THE SAID CONSIDERATION the Releasors hereby represent and warrant that they have not assigned to any person, firm, or corporation any of the actions, causes of action, claims, debts, suits or demands of any nature or kind which they have released by this Mutual Full and Final Release.

IT IS FURTHER AGREED AND UNDERSTOOD that the Releasees do not admit any liability or obligation of any kind whatsoever to the Releasors and such liability or obligation is specifically denied.

AND IT IS HEREBY DECLARED that the terms of this settlement are fully understood, that the consideration stated herein is the sole consideration for this Release and that such consideration is accepted voluntarily for the purpose of making full and final compromise in settlement of all claims and proceedings that may be brought against the Releasees, now or hereafter brought, for damages, loss or injury resulting from the matters set forth above.

AND IT IS FURTHER UNDERSTOOD AND AGREED that the fact and terms of this Release and the settlement underlying it will be held in confidence and will receive no publication either oral or in writing, directly or indirectly, by the Releasors, unless deemed essential on auditors' or accountants' written advice for financial statement or income tax purposes, or for the purpose of any judicial proceeding, in which event the fact that the settlement agreement is made without any admission of liability will receive the same publication contemporaneously.

DOROTHEY FEHR AND WILLIAM FEHR SR HEREBY AUTHORIZE AND DIRECT WILLIAM FEHR JR., STEVEN TROUGAKOS, TASIA FEHR and J+W FOODS INC. to make the settlement funds payable as follows: $120,000.00 PAPAZIAN HEISEY MYERS in trust.

IN WITNESS WHEREOF the undersigned have executed this Full and Final Release this 12 day of April. 2019

[signatures]

[71] The release contained a certificate of solicitor from Ms. Carter which stated:

I, CHRISTINE CARTER, Lawyer of the City of Toronto, in the Province of Ontario acknowledge that I explained the significance of this Full and Final Release dated April 12, 2019 to DOROTHEY FEHR and WILLIAM FEHR SR. and in my judgment, I do verily believe that they understood the significance of the Full and Final Release and were under no incapacity when it was executed and explained to them.

[72] Dorothey Fehr’s evidence about the settlement and the release both as a factual matter and as a legal matter is set out in paragraphs 36-41 of her affidavit as follows:

36. When we were in the process of collecting the loan, our counsel did raise the issue of the shares with Paul Gribilas, the lawyer for J.+W Foods. Ultimately, the company agreed to repay us $120,000 for the loan. They were not prepared to discuss the value of our shares at that point and refused to compensate us for the fact that we were 1/2 owners of the shares. We had to make a decision whether to accept the money, which our counsel was able to negotiate without actually having to issue a statement of claim. We understood that in exchange for that money, we would be releasing any claim against the company. Paul Gribilas also asked us to release not only J +W Foods but also William Fehr Jr and Tasia Fehr, which we did. He never asked us to sign a release in favour of himself or his brother Peter and we did not do so.

37. The parties to this motion keep insisting that we "released our claim for a shareholding in J+W Foods Inc." That is not accurate. In April 2019, we released J+W Foods Inc., Steven Trougakos, Tasia Fehr and William Fehr Jr. because we wanted our loan repaid. We did not release Peter or Paul Gribilas.

38. We decided that it was best to accept a payment of $120,000 from the company rather than embark on lengthy litigation with the company at that point.

39. While we were happy to recover the money, the fact that we were told by our lawyer and our accountant that we were purchasing shares which our new counsel advised us were never owned by John Trougakos continued not to sit well with me. The more I thought about it, the angrier and more disillusioned I got. I stared [sic] to feel quite strongly that neither Peter nor Paul should get away with this since I had asked them both more than once to ensure that the corporate books were up to date and reflected our share ownership. In March 2020, we issued this claim against Peter and Paul Gribilas.

40. I understand that the release also prevents us from making a claim against someone who might claim contribution and indemnity from Steven, our son Bill or our daughter in law Tasia. I believed and still believe that from 2004 to 2008 my husband and I were both shareholders and directors of the Company. We retained the lawyer and accountant to properly update the corporate records and file tax returns. They failed to do so in accordance with our instructions (or at all). The lawyers and accountants owed the company and us a duty of care. I do not believe that Paul Gribilas has a valid claim against his own client (the company) or against our son or their childhood friend Steven Trougakos, It was his obligation to take instructions from me as President (and not from his childhood friend) and to ensure that the corporate records accurately reflect our shareholdings. My husband and I do not believe that our son takes the third party claim against him or his company seriously as he has never defended it. In fact, counsel served a Notice of Intent to Defend indicating that he was acting for the company only.

41. I verily believe that the Third Party Claim was issued by the lawyer as a ruse for the sole purpose of bringing this motion and attempting to deprive us of our valid claim.

E. Is the Case Appropriate for a Summary Judgment?

[73] The first issue to determine is whether the case at bar is an appropriate one for a summary judgment.

[74] Rule 20.04(2)(a) of the Rules of Civil Procedure[^3] provides that the court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04 (2.1) states:

20.04 (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.

[75] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial.[^4] Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment.[^5]

[76] In Hryniak v. Mauldin[^6] and Bruno Appliance and Furniture, Inc. v. Hryniak,[^7] the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers introduced when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[77] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2). As a matter of discretion, the motions judge may 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 their use 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. To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the issues in the case.[^8]

[78] If a judge is going to decide a matter summarily, then he or she must have confidence that he or she can reach a fair and just determination without a trial; this will be the case when the summary judgment process: (a) allows the judge to make the necessary findings of fact; (b) allows the judge to apply the law to the facts; and (c) is a proportionate, more expeditious and less expensive means to achieve a just result.[^9] The motion judge is required to assess whether the attributes of the trial process are necessary to enable him or her to make a fair and just determination.[^10]

[79] The analytic framework from Hryniak v. Mauldin requires the motions judge, after determining whether the case is appropriate for a summary judgment, to first determine if there is a genuine issue requiring a trial based only on the evidence without using the enhanced fact-finding powers under rule 20.04 (2.1). Second, if there appears to be a genuine issue requiring a trial, the motion judge should determine whether a trial could be avoided by: (a) by using the enhanced powers under rule 20.04 (2.1), which permits weighing the evidence, evaluating the credibility of deponents, and drawing any reasonable inference from the evidence; or (b) by using the power under rule 20.04 (2.2) to order that oral evidence be presented by one or more parties.[^11]

[80] As the discussion above of the facts reveals, there are numerous genuine issues requiring a trial and those genuine issues cannot be fairly resolved using the enhanced fact-finding powers provided by rule 20.03 (2.1).

[81] There is, however, one matter for which there are no genuine issues requiring a trial and for which there is more than adequate evidence to fairly and justly resolve the summary judgment motions and the third party proceedings. Unlike the lengthy history of William Fehr Sr.’s and Dorothey Fehr’s relationship with J+W Foods Inc., which began in 2004, and which is the basis of the professional negligence claims and which is largely undocumented, the history of the release involves what happened in the six months between November 2018 and April 12, 2019 and what happened in those six months is well documented.

[82] I can determine the complete factual story and truth about the release about which there are no substantial credibility or reliability questions. There are no genuine issues requiring a trial about the factual circumstances of the general release signed by the parties in April 2019.

F. Discussion and Analysis

[83] The aspect of the immediate case that is appropriate for a summary judgment is about the enforcement and about who is able to enforce the no-claims-over provision contained in a general release that was bargained for amongst William Fehr Sr., Dorothey Fehr, J+W Foods Inc., William Fehr Jr., Steven Trougakos and Tasia Fehr-Trougakos.

[84] Paul Gribilas and Peter Gribilas are strangers to that release but seek to be beneficiaries of it.

[85] The overarching purpose of a general release is to resolve all matters as between the settling parties and to put an end to the settling parties’ exposure to litigation, and thus a release is typically broad in scope to cover not only the specific litigation but all actions or claims that could have been raised against the settling party including claims advanced by non-settling parties or strangers to the release.[^12] The fundamental premise of a full settlement is that the general release is intended to buy the releasee peace of mind in relation to all claims arising from, and in connection with, the matters raised in the statement of claim both in the settled proceeding, and any other proceeding in which the releasee could be brought back into the dispute.[^13]

[86] No-claims-over clauses, that preclude a settling party from bringing claims that will prompt others to claim contribution and indemnity against the other settling party are implied terms of a standard general release and if there is to be any narrowing in scope of these provisions, it must be specifically negotiated, agreed upon and reflected in the settlement agreement.[^14]

[87] J+W Foods Inc. and the Defendants Gribilas predominately rely on the Court of Appeal’s decision in Sinclair-Cockburn Insurance Brokers Ltd. v. Richards,[^15] in support of their motions for a dismissal of the main action and of the third party proceeding. William Fehr Sr. and Dorothey Fehr predominately rely on Ieradi v. Gordin[^16] to distinguish the Sinclair-Cockburn line of decisions.

[88] In the analysis that follows, I shall discuss each line of cases to reach the conclusion that the Sinclair-Cockburn line of cases governs the immediate case with the result that the main action against Paul and Peter Gribilas and the third party proceeding against J+W Foods Inc., William Fehr Jr., and Steven Trougakos should be permanently stayed.

[89] The facts of Sinclair-Cockburn Insurance Brokers Ltd. v. Richards were as follows:

a. Canadian General Insurance gave Linda Richards, an employee of Sinclair-Cockburn Insurance Brokers, the authority to issue a $5.8 million construction performance bond. Richards was a registered insurance broker with the Registered Insurance Brokers of Ontario, the self-governing body for insurance brokers.

b. Despite her knowing that Wiggins Mechanical was not bondable, Richards fraudulently issued a bond for Wiggins Mechanical. Canadian General had to honour the performance bond when Wiggins Mechanical failed to perform its construction contract.

c. Canadian General was poised to sue Wiggins Mechanical for repayment of the bond and to sue Sinclair-Cockburn, which was vicariously liable for its employee’s fraud in issuing the bond.

d. Sinclair-Cockburn fired Richards, and Sinclair-Cockburn negotiated a settlement with Canadian General and Wiggins Mechanical.

e. Sinclair-Cockburn and Wiggins Mechanical each contributed to the settlement. The parties signed a general release. Under the release, Sinclair-Cockburn promised not to make any claim against any other person who might claim contribution from Wiggins Mechanical.

f. Despite giving the release that included a no-claims-over provision, Sinclair-Cockburn brought an action against Richards for breach of her employment contract and for professional negligence as an insurance broker. There were two branches to Sinclair-Cockburn’s claim. It sued Richards for the money Sinclair-Cockburn had paid in the settlement with Canadian General and Wiggins Mechanical, and it sued for other separate losses that it allegedly suffered from other transactions that Richards had brokered.

g. Richards counterclaimed, and she brought third party proceedings against Wiggins Mechanical for contribution and indemnity.

h. Sinclair-Cockburn delivered a reply and defence to counterclaim in which it undertook that it would not seek to recover from Richards any amounts for which she could claim contribution and indemnity from Wiggins Mechanical. Sinclair-Cockburn gave a similar undertaking to Wiggins Mechanical.

i. Wiggins Mechanical brought a motion for a stay of Richard’s third party claim and also the claims in the main action against Richards on the grounds of abuse of process.

[90] Based on these facts, in a decision upheld by the Court of Appeal, Justice Mesbur stayed the third party action against Wiggins Mechanical, and she stayed the claims against Richards in the main action that were associated with the fraud in issuing the bond. Justice Mesbur did not stay the second branch of Sinclair-Cockburn’s action against Richards.

[91] Justice Laskin (Justices Charron and Armstrong concurring) wrote the judgment for the Court of Appeal that affirmed Justice Mesbur’s decision. In the Court of Appeal, Justice Laskin addressed the two issues of: (1) whether Sinclair-Cockburn’s claims in the main action against Richards should be stayed; and (2) whether the third party claim against Wiggins Mechanical should be stayed.

[92] On the first issue, in a subsequently much cited passage, Justice Laskin stated at paragraphs 13-17:

13. The action against Richards unquestionably falls squarely within the terms of Sinclair-Cockburn's release. Sinclair-Cockburn has made a claim against another person - Richards - who might, and indeed did, claim contribution and indemnity from Wiggins in respect of a matter - the performance bond fraudulently issued to Wiggins - to which the release relates. Nonetheless, Sinclair-Cockburn submits that it should be allowed to continue its action against Richards because it has undertaken not to claim from her any money that she could recover from Wiggins. Thus, Sinclair-Cockburn argues that its claim against Richards does not expose Wiggins to any financial liability.

14. I do not accept this submission. As Mr. Cadsby, counsel for Wiggins, said during oral argument, his client paid a substantial sum of money to buy peace, not just peace from potential liability for a judgment, but peace from even having to respond to a claim from Richards. Sinclair-Cockburn signed an unqualified release. Wiggins is entitled to all the benefits that flow from that release, which include its reputational interest and its interest in not being dragged into a lawsuit. Wiggins was entitled to expect the party who signed the release to live up to its bargain. It is not obliged to accept something almost as good. The undertaking proffered by Sinclair-Cockburn amounts to a unilateral amendment to the release. Nothing in the settlement agreement authorizes such an amendment.

15. Moreover, each party had counsel when the release was negotiated. I find no evidence in the record to suggest that its terms were the product of an error by Sinclair-Cockburn's solicitor. Had Sinclair-Cockburn wanted to preserve its right to pursue Richards on the bond she issued to Wiggins, it should have tried to procure that concession in the settlement negotiations. Apparently, it did not do so.

16. The terms of the release plainly preclude Sinclair-Cockburn's action against Richards to recover the money it contributed to the settlement. As Mesbur J. accurately said, "[p]arties should be held to their promises." The court is entitled to enforce these promises by exercising its stay jurisdiction either under s. 106 of the Courts of Justice Act or rule 21.01(3)(d) to prevent an abuse of process. A stay works no injustice on Sinclair-Cockburn because its effect is simply to hold Sinclair-Cockburn to its bargain. The motions judge thus committed no error in principle when she stayed Sinclair-Cockburn's claims in paragraphs 5A and 6D III) and IV) of its statement of claim and the third-party action. See Re Abitibi Paper Company Limited v. The Queen (1979), 1979 CanLII 1946 (ON CA), 24 O.R. (2d) 742 (C.A.).

17. That Richards indirectly benefits from the stay matters not. That she would benefit must have been or at least ought to have been reasonably foreseeable to Sinclair-Cockburn when it negotiated the settlement agreement. No question of privity of contract arises because Richards has not sought to enforce the stay.

[93] With respect to the second issue, Justice Laskin said that Wiggins Mechanical had no independent right to obtain a stay of the third party claim, which was brought by Richards; however, the stay of the third party claim followed from the stay of the main action, which was the catalyst for Richards’ claim over for contribution and indemnity.

[94] As a matter of doctrinal analysis, there are four features of Sinclair-Cockburn Insurance Brokers Ltd. v. Richards that need to be noticed and emphasized for the purposes of understanding the application of its law to the facts of the immediate case.

• First, the stay of the main action and of the third party claim was based on the court’s procedural jurisdiction to stay actions that are an abuse of process. Thus, both Justice Mesbur and Justice Laskin referred to Re Abitibi Paper Company Limited v. The Queen,[^17] where the Court of Appeal held that the Crown’s breach of an agreement not to prosecute constituted an abuse of process.

• Second, and this is a corollary of the first feature, the stay of the main action and of the third party claim was not based on the law of contract, although contractual principles including the concept of privity of contract are mentioned. Thus, a non-party to the release, someone without privity of contract (i.e., Richards) through procedural law was a beneficiary of the court’s exercise of its jurisdiction to stay an action as an abuse of process.

• Third, Sinclair-Cockburn had not contracted for the possibility of suing Richards. In other words, a party can carve out exceptions to the scope of the no-claims-over provision in a release but Sinclair-Cockburn had not done so and was held to its bargain which barred it from suing Richards who foreseeably would claim over against Wiggins Mechanical.

• Fourth, the court did not stay the claims against Richards in the main action for which she had no claim over against Wiggins Mechanical. Those claims did not and could not precipitate a claim over against Wiggins Mechanical and thus were not connected to the no-claims-over provision.

[95] As will appear from the discussion below, these features of the Sinclair-Cockburn case are particularly important to the immediate case, and thus these features are worthy of additional analysis. With respect to the first, second, and third features, it is the court’s abuse of process jurisdiction and not contract law that enforces releases that include a no-claims-over provision. That said, it is the policy of holding contracting parties to their bargains that explains the exercise of the court’s jurisdiction to stay or dismiss the proceedings that breach the contractual obligations.[^18] It is possible to limit the scope of a no-claims-over provision, but Sinclair-Cockburn had not bargained for a limitation to the no-claims-over provision.

[96] With respect to the fourth feature, Wiggins Mechanical had no contractual relationship with Richards to enforce directly against Richards, and thus Justice Laskin concluded that Wiggins Mechanical had no independent right to stay the third party proceeding brought by Richards. However, pursuant to the release, Wiggins Mechanical, had a way to stay the main action, which provided the mechanism to stay the claims for contribution and indemnity in the third party proceeding.

[97] There is an additional feature of Sinclair-Cockburn Insurance Brokers Ltd. v. Richards that should be noticed as it is connected to the other features of the case. The fifth feature of the case emerges from paragraph 6 of Justice Mesbur’s brilliantly incisive decision where she states:

6. Ms. Richards was not a party to the settlement agreement, and therefore cannot raise it as a defence to the plaintiff's claims against her, unless she can bring herself within the exception to the privity of contract doctrine as enunciated by the Supreme Court of Canada in the Fraser River case. Whether she can or not remains for another day. For the purpose of this motion, the settlement agreement is not a defence that the third party can now raise to the claim since it is not a defence available to the defendant. As a result, it cannot pursue a motion for summary judgment to dismiss the claim. The third party is in a position where it is drawn into a lawsuit which it believes the plaintiff agreed never to institute. Rather than pursue summary judgment to dismiss the claim and third party proceedings, it frames its motion under rules 1.04, 21.01(3)(b) and (d) of the Rules of Civil Procedure, and section 106 of the Courts of Justice Act.[^19]

[98] The jurisprudential point that Justice Mesbur is making is that as a matter of the law of privity of contract, Richards (or Wiggins Mechanical, which as a third party could plead Richard’s defences in the main action) had the defence of being protected by the release - unless she could bring herself within the exception to the privity of contract doctrine as enunciated by the Supreme Court of Canada in Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd.[^20] Justice Mesbur was emphasizing that the outcome of the motion in Sinclair-Cockburn was based on an abuse of process rationale and the result was not based on a substantive contract law defence.

[99] The common law has developed and may develop more exceptions to the principle of privity of contract.[^21] In Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., Justice Iacobucci stated that the rules of privity of contract could be relaxed based on a functional inquiry examining whether the parties to the contract either expressly or by implication intended to confer a benefit on a third party and whether the activities performed by the third party came within the scope of the contractual provision. In Fraser River Pile & Dredge Ltd., a vessel was lost due to the negligence of the charterer, and the vessel’s insurer paid the proceeds of insurance to the insured owner of the vessel. Then, the insurer advanced a subrogated claim against the charterer. Based on the functional analysis, the Supreme Court held that as a defence to the subrogated claim, the charterer was entitled to rely on the waiver of subrogation clause in the insurance contract between the insurer and the owner of the vessel.

[100] In Sinclair-Cockburn Insurance Brokers Ltd. v. Richards, Justice Mesbur was emphasizing that a substantive defence was not yet advanced to bar the main action. The issue before the court was the procedural issue of whether there was an abuse of procedure, i.e., an abuse of process.[^22]

[101] Returning to the immediate case after this lengthy exegesis, I agree with J+W Foods Inc. that the principles of Sinclair-Cockburn Insurance Brokers Ltd. v. Richards apply to the circumstances of the immediate case. And I agree with Paul Gribilas and Peter Gribilas that they are beneficiaries of the Sinclair-Cockburn decision pursuant to the law of procedure although they do not have a contractual right to enforce the general release unless they could fit themselves within the principles of Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., which they have not attempted to do.

[102] In the immediate case, pursuant to the release signed with J+W Foods Inc., William Fehr Sr. and Dorothey Fehr agreed not to sue a person who could advance a claim against J+W Foods Inc. The Fehrs, nevertheless, sued Paul and Peter Gribilas, who have in third party proceedings sued J+W Foods Inc. The prospect of suing Paul and Peter Gribilas was in the minds of the Fehrs when they signed the release, but they did not bargain for an exception to the no-claims-over provision, which is meant to be broad in its scope. The run-up correspondence to the settlement makes it clear that J+W Foods Inc., William Fehr Jr., and Steven Trougakos sought an end to William Fehr Sr. and Dorothey Fehr’s having any ownership interest or claim against them or J+W Foods Inc. directly or indirectly. The release was meant to end the litigation and any claim to an interest in J+W Foods Inc. The Fehrs suing Paul and Peter Gribilas was re-litigation of a settled dispute. It was an abuse of process. The court has the abuse of power jurisdiction to stay or dismiss the Fehrs’ claim against the Gribilas brothers in the main action, which in turn makes the brothers’ third party proceedings against J+W Foods Inc. moot.

[103] In short, the immediate case is governed by Sinclair-Cockburn Insurance Brokers Ltd. v. Richards. This conclusion is supported by other cases that have followed the Sinclair-Cockburn decision.

[104] Sinclair-Cockburn Insurance Brokers Ltd. v. Richards was applied by the Court of Appeal in Woodcliffe Corp. v. Rottenberg, [^23] which has some resemblance to the immediate case because it involved a settlement and then a settling party bringing an action against lawyers who were not parties to the settlement agreement. The lawyers claimed over against one of the settling parties.

[105] The facts of the Woodcliffe Corp. case were that the plaintiff was a land developer who sued the joint venturers in a development project. The litigation settled, and the parties executed a mutual release that included a no-claims-over provision. After the settlement, the plaintiff sued the lawyers that had acted for him in the project alleging negligence and breach of fiduciary duty. The plaintiff alleged that the improper conduct of the joint venturers was made possible by the misconduct of the lawyers. The lawyers brought third party claims for contribution and indemnity against the joint venturers. The joint venturers brought motions to stay the main action and the third party proceedings.

[106] With a variation to the order,[^24] the Court of Appeal held that the motions judge properly followed Sinclair-Cockburn Insurance Brokers Ltd. v. Richards by staying the main action and the third party proceeding which could not be litigated without litigating the claims against the third parties that had been settled. In paragraphs 13-14 of the Court of Appeal’s endorsement, it stated:

13. There is no injustice in holding [the Plaintiff] to the bargain it made with the third parties when it gave releases in the previous litigation, particularly where it now has the benefit of the peace it obtained because of those settlements. The object and purpose of the releases was not only to prevent [the Plaintiff] from suing the third parties, but also to ensure that the third parties would not be further disturbed by [the Plaintiff]

14. We agree with the motions judge that it would be unfair to accede to [the Plaintiff’s] alternative submission to permit the main action to proceed but uphold the stay of the third party actions. To do so would preclude the Firm from seeking remedies that it would be entitled to on the basis of agreements that it had nothing to do with. Given [the Plaintiff’s] assertion that it was clear at the time the earlier litigation was settled that it intended to sue the Firm, [the Plaintiff] could have refused to settle unless the Firm was excepted from the "no claims over" provisions of the releases. Having proceeded with the settlements without such an exception, and having obtained the benefits of the settlements, [the Plaintiff] should also have to assume the burden the settlements imposed in terms of precluding claims over.

[107] In my opinion, there is no genuine issue requiring trial about the release. The Sinclair-Cockburn Insurance Brokers Ltd. v. Richards line of authorities is applicable to the facts of the immediate case.

[108] William Fehr Sr. and Dorothey Fehr, however, rely on Justice Lederer’s decision in Ieradi v. Gordin to distinguish the Sinclair-Cockburn line of decisions. In my opinion, however, this decision and several other decisions that are mentioned by Justices Mesbur and Laskin in the Sinclair-Cockburn case do not assist the Fehrs.

[109] The facts of Ieradi v. Gordin case were as follows.

a. The plaintiff, Joseph Ieradi, retained Philip Gordin and the law firm, Berholz, Gordin & Fluxgold, with which Mr. Gordin practised in association, to close a purchase transaction to acquire two land properties. The vendors were the Guerrieris.

b. The transaction did not close, and Ieradi sued the Guerrieris for specific performance. The litigation settled and the Guerrieris paid Ieradi $52,000. Under the minutes of settlement, the parties signed mutual releases. The parties agreed not to sue any person that may have a claim over for relief against the other party.

c. After the settlement was implemented, Ieradi sued Gordin and Berholz, Gordin & Fluxgold. Ieradi alleged that it was because of Gordin’s professional negligence that the purchase transaction had failed to close.

d. Gordin and Berholz, Gordin & Fluxgold issued third party claims against the Guerrieris claiming contribution and indemnity.

e. Relying on the no-claims-over provision, the Guerrieris brought a motion for a stay or dismissal of the main action (the action against the lawyers) and of the third party proceeding brought by the lawyers.

f. Relying on the no-claims-over provision, the lawyers sought an order staying or dismissing the main action.

[110] In Ieradi v. Gordin, applying Sinclair-Cockburn Insurance Brokers Ltd. v. Richards, Justice Lederer stayed the third party proceeding. Then Justice Lederer concluded that the stay of the third party proceeding did not mean that the main action should be stayed. Justice Lederer declined to exercise the court’s abuse of process jurisdiction to stay the main action.

[111] To reach his conclusion that the main action should not be stayed Justice Lederer carefully analyzed the Court of Appeal’s decisions in Holdthaus v. Bank of Montreal,[^25] Owen v. Zosky,[^26] Sinclair-Cockburn Insurance Brokers Ltd. v. Richards, and Woodcliffe Corp. v. Rotenberg.[^27]

[112] Justice Lederer’s analysis yielded the legal proposition that a litigant, to have the benefit of the protection of a no-claim-over provision in a release for which the litigant was not a signatory, the litigant must satisfy two preconditions; namely (a) he or she must have been sued with respect to the subject matter of the release; and (b) he or she must have a viable claim-over to trigger the protection of the no-claim-over provision.

[113] The explanation for the first precondition to the protection of the no-claim-over provision is that the cases examined by Justice Lederer demonstrate that a stay on the grounds of abuse of process will be granted only to preclude claims that are connected to the claims that are being released. Claims against the litigant seeking a stay that are independent of the subject matter of the release will not be stayed. This legal phenomenon is demonstrated in Sinclair-Cockburn where Sinclair-Cockburn’s claims against Richards about her fraudulently issuing a construction bond for Wiggins Mechanical were stayed - but its claims for other breaches of her employment contract were not stayed. There is therefore nothing controversial about Justice Lederer’s first precondition to the enforcement of a no-claims-over provision.

[114] Justice Lederer’s explanation for the second precondition to triggering the protection of the release, i.e., that the litigant must have a viable claim-over is found in paragraphs 23 of his judgment, where he states:

23. The question this proposes is whether the claim for negligence brought against the defendant solicitors, Gordin, Berholz and Fluxgold, is independent of their claims made in the third party proceeding. If a third party proceeding is not sustainable, it does not require the protection offered by the release. If a third party proceeding without merit can still be stayed based on a "no action clause" in a prior release and, on that basis, the main action stayed, then any defendant can get that advantage simply by issuing a third party proceeding even though it has no chance of success. I fear that is what is being hoped for here.

[115] The logic of Justice Lederer’s explanation for a precondition to the enforcement of a no-claims-over provision can be elucidated by the following line of argument. A stay of proceedings is a discretionary extraordinary order that is not granted upon request or as a matter of course.[^28] A stay for the benefit of a third-party beneficiary of a release should not be granted where the triggering of the preclusive clause is disingenuous, which is to say not genuine. The triggering of the preclusive, claims-barring provision, will not be genuine, if the triggering claim is not legally viable. If the triggering claim is not legally viable, then the extraordinary order of a stay cannot be justified because it is not necessary to protect the litigant that was a signatory of the release, and it would be unjust to protect the third-party beneficiary who has no privity of contract.

[116] Applying these legal propositions and these lines of argument to the facts of Ieradi v. Gordin, Justice Lederer reasoned that although Mr. Ieradi had promised not to sue anyone who could claim over against the Guerrieris but had nevertheless sued Mr. Gordin and Berholz, Gordin & Fluxgold, who had claimed over against the Guerrieris, the action against the lawyers should not be stayed because there was no viable claim against the Guerrieris. Thus, Justice Lederer stated at paragraph 27 of his judgment:

27. In the case before this Court, the third parties cannot be held accountable for the negligence of the defendant solicitors. The defendant solicitors cannot claim over against the third parties. There is no prejudice to the defendant solicitors. They are still able to rely on the proposition that it was not possible to tender since clear title had not been provided by the third parties. The defendant solicitors have to respond to the claim and prove the defence. Accordingly, the main action will not be struck out.

[117] The proposition from Ieradi v. Gordin that if there is no viable legal basis for the claim against the third party, then the promise by the plaintiff not to make a claim against anyone who might claim indemnity from the third party does not justify a stay of proceedings was followed by the Divisional Court in Searle v. McCabe, Filken & Garvie LLP[^29] by a single judge on a leave to appeal decision.

[118] The Court of Appeal’s decision in 1562860 Ontario Ltd. (c.o.b. Shoeless Joe's) v. Insurance Portfolio Inc.[^30] (Shoeless Joe’s) is also consistent with the principles developed by Justice Lederer in Ieradi v. Gordin.

[119] The facts of the Shoeless Joe’s case were that Shoeless Joe’s operated a restaurant that was substantially damaged by a flood of its premises. Shoeless Joe’s had a business interruption loss insurance policy with Dominion of Canada General Insurance Company. The business interruption coverage had a maximum limit of $400,000. The policy limit was subject to a “rate of recovery loss” condition under which Shoeless Joe’s was obligated to have adequate coverage for business interruption with another insurer and if it did not have that insurance, then the limits in Dominion’s policy would be reduced in accordance with a formula.

[120] Shoeless Joe’s sued Dominion for the insurance proceeds. The litigation settled, and the parties exchanged a mutual release that included a no-claims-over provision. After the settlement, Shoeless Joe’s sued its insurance broker, Insurance Portfolio Inc., and alleged that it was liable for: (a) Shoeless Joe’s entering into an improvident settlement; and (b) Shoeless Joe’s being underinsured. Insurance Portfolio Inc., in turn, brought third party proceedings against Dominion. Then, relying on the no-claims-over provision, Dominion brought a motion, amongst other things, for a stay of the main action and for a stay of the third party proceeding.

[121] Justice Bielby granted the stays and Shoeless Joe’s appealed. The Court of Appeal held that Justice Bielby was correct in staying the third party proceeding and that he was correct in staying the main action - in so far as it involved an allegation that Insurance Portfolio Inc. was responsible for the improvident settlement of the insurance loss claim. However, the Court of Appeal concluded that Justice Bielby was wrong in staying the main action insofar as it was based on the allegation that Insurance Portfolio Inc. was responsible for Shoeless Joe’s being underinsured.

[122] The rationale for the stay of Shoeless Joe’s improvident settlement allegation in the main action is set out in paragraph 8 of the Court of Appeal’s endorsement, where it stated:

8. […] [The main action and the third party proceeding] raise issues of negligence arising from the way the insurance claim was settled and are not incompatible with each other. The claim in the main action based on the manner of the appellant's settlement of its insurance claim and the claim of the respondents for indemnity from the third party based on this, must remain stayed. For this claim in its main action, the appellant must live with the consequences of its release of the third party. Indeed, in argument, the appellant did not oppose this.

[123] The rationale for lifting the stay of Shoeless Joe’s allegation against Insurance Portfolio Inc. of being responsible for Shoeless Joe’s being underinsured is set out in paragraphs 5 and 6 of the Court of Appeal’s endorsement as follows:

5. In our view, it is plain and obvious that the respondents' third party claim for indemnification arising from the appellant's underinsured claim cannot succeed. The appellant's allegation in the main action is that the respondents left the appellant underinsured. The respondents' third party claim arising from this is founded on the allegation that the appellant was not underinsured, but was properly insured, and the third party was negligent in adjusting the claim and in paying less than it should have.

6 If the appellant succeeds in the main action and proves that it was underinsured, the basis of the respondents' third party claim falls away. It cannot succeed because it cannot establish that the appellant was properly insured. On the other hand, if the appellant fails, it has suffered no loss due to underinsurance, and there is nothing for which the respondent can claim contribution or indemnity. In either case, the third party claim arising from the underinsured claim in the main action cannot succeed. It is not just clearly linked with the appellant's claim. It is incompatible with it. A stay of the third party proceedings arising from the underinsured claim is therefore appropriate and, in those circumstances, permitting the main action to proceed based on this claim no longer engages the appellant's release of the third party. To that extent, the stay of the main action ordered at first instance must be lifted.

[124] I understand from these passages of the Court of Appeal’s decision that with a partial stay of Shoeless Shoe’s claim in the main action against Insurance Portfolio Inc. and given that the premise of Insurance Portfolio Inc.’s remaining third party claim was that Insurance Portfolio Inc. had obtained adequate insurance, there was no viable third party claim to engage the no-claims over provision against the claim in the main action that Insurance Portfolio Inc. had not obtained adequate insurance for Shoeless Joe’s. In this sense, the claim over was not viable.

[125] The factual circumstances of the immediate case are much different from those of Ieradi v. Gordin or 1562860 Ontario Ltd. (c.o.b. Shoeless Joe's) v. Insurance Portfolio Inc.

[126] In my opinion, the Ieradi v. Gordin line of authorities, including the Shoeless Joe’s case, are of no assistance to William Fehr Sr. and Dorothey Fehr because the preconditions suggested by those cases to Paul Gribilas and Peter Gribilas taking shelter behind the no-claims-over provision in the release signed by the Fehrs and J+W Foods Inc. are satisfied. The Gribilas brothers are being sued with respect to the subject matter of the release and they have a viable claim-over to trigger the protection of the no-claim-over provision.

[127] In their factum, relying on Ieradi v. Gordin, William Fehr Sr. and Dorothey Fehr submit that Paul Gribilas has no viable (valid) claim for contribution and indemnity against J+W Foods Inc. and during argument they submitted that Peter Gribilas has no viable claim for contribution and indemnity against J+W Foods Inc. In their factum, the Fehrs state that they believe that the third party claim was issued by Paul Gribilas “as a ruse for the sole purpose of bringing this motion and attempting to deprive them of their valid claim and attempting to deny them access to justice.”

[128] The fatal flaw in these submissions is they conflate the merits of a claim with its viability. Both Paul and Peter Gribilas have legally viable claims for contribution and indemnity against J+W Foods Inc., Steven Trougakos, and William Fehr Jr. that the Gribilas’s professional liability insurers have no doubt instructed them to pursue.

[129] Before moving on to consider several cases about the circumstances in which a defendant cannot rely on a no-claim-over provision in a release to which the defendant was not a privy and only a potential beneficiary, I should add that there is a second explanation why the Ieradi v. Gordin line of cases is not of assistance to William Fehr Sr. and Dorothey Fehr.

[130] There is another explanation for why Justice Lederer made the right decision to allow the claim against the lawyers to proceed in that case notwithstanding the presence of the no-claim-over provision in the settlement with the Guerrieris. The simple explanation is that it was not disputed that the third party proceedings against the Guerrieris should be stayed as an abuse of process. The point is that if the claim against the party that bargained for the no-claim-over provision is being barred, then there is less discretionary pressure on the court to also bar the claim against the lawyers who have no-privity of contract.

[131] To bring this analysis to a conclusion, as mentioned above, in Sinclair-Cockburn Insurance Brokers Ltd. v. Richards, Justice Mesbur at first instance and Justice Laskin in the Court of Appeal distinguished several cases where the no-claim-over provision in the release did not come to the aid of a litigant who had not been a signatory to the release. These cases do not assist William Fehr Sr. and Dorothey Fehr in the immediate case in their resistance to the no-claim-over provision in the release that they signed.

[132] In Owen v. Zosky,[^31] the plaintiff sued her former lawyer for negligently providing services in a dental malpractice case that the plaintiff settled herself with the dentist. The plaintiff and dentist signed a general release containing a no-claim-over provision. In the subsequent solicitor’s negligence action, the lawyer claimed over against the dentist. In the solicitor’s negligence action, the dentist pleaded in the main action and brought a summary judgment motion to have the action dismissed. In bringing the summary judgment motion, the dentist relied on the release between the plaintiff and the dentist, but – and this is the key to understanding the approaching zero precedential value of Owen v. Zosky – there was no motion by the lawyers as defendants to dismiss the proceedings against them based upon the release.

[133] On the dentist’s summary judgment motion, which procedurally could only be based on defences that the lawyer could have raised in the main action, the motions judge stayed the main action and the third party proceeding to enforce the no-claims-over provision. This decision, however, was strictly speaking not available given the limitations of what a third party can plead in the main action. The stay of the third party proceeding was not appealed, and the Court of Appeal allowed the plaintiff’s appeal and lifted the stay of the action against the lawyer achieved by the dentist. As Justice Carthy said in his judgment for the Court, it was difficult to articulate a general statement of the principles that had been engaged by the motions judge and in these circumstances, the only sensible thing to do was to lift the stay in the main action, In the result, Owen v. Zosky has nothing useful to say about no-claims-over provisions.

[134] In Van Patter v. Tillsonburg District Memorial Hospital,[^32] the no-claims-over provision was not enforced on technical procedural grounds.

[135] In Van Patter, the plaintiff who had been injured in a motor vehicle accident settled with the defendants, the driver and owner of the vehicle, involved in the accident. The plaintiff signed a release that included a no-claim-over provision. Subsequently, discovering more injuries from the accident, the plaintiff sued the treating doctors who in turn brought third party proceedings making a claim-over for contribution and indemnity against the driver and owner of the vehicle. The third parties, driver and owner, delivered a defence in the main action and moved for a summary judgment relying on the no-claims over provision. Reversing the motion judge who granted a summary judgment dismissing the plaintiff’s claim, Justice Borins in the Court of Appeal held that in bringing summary judgment the third parties were limited to the defences available to the doctors who had no substantive law right to rely on the no-claims-over provision. Thus, the summary judgment could not succeed, and the action would have to be tried.

[136] The Van Patter decision is no help for William Fehr Sr. and Dorothey Fehr and decides nothing more than there were genuine issues requiring a trial in that case.

[137] In the immediate case, the approach of J+W Foods Inc. is not the approach adopted by the third parties in the Van Patter case. J+W Foods Inc. does not bring a motion for summary judgment. It adopts the approach that proved successful in Sinclair-Cockburn Insurance Brokers Ltd. v. Richards. Although Paul and Peter Gribilas are moving for a summary judgment insofar as the no-claims-over provision is concerned, they are moving for a summary judgment for a stay of the main action as an abuse of process not on the substantive grounds of the law of contract.

[138] In short, there is no genuine issue requiring a trial; the immediate case, main action and third party proceeding, are governed by the authority of the Sinclair-Cockburn Insurance Brokers Ltd. v. Richards line of cases.

G. Conclusion

[139] For the above reasons, the main action and the third party proceedings are permanently stayed.

[140] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the submissions of the Defendants and the Third Parties within twenty days of the release of these Reasons for Decision followed by the submissions of the Plaintiffs within a further twenty days.

Perell, J.

Released: January 12, 2022

COURT FILE NO.: CV-20-00637344-0000

DATE: 20220112

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

WILLIAM FEHR SR. and DOROTHEY FEHR

Plaintiffs

• and -

PAUL GRIBILAS and PETER GRIBILAS

Defendants

• and -

J+W FOODS INC., WILLIAM FEHR JR., STEVEN TROUGAKOS

Third Parties

REASONS FOR DECISION

PERELL J.

Released: January 12, 2022

[^1]: R.S.O. 1990, c. B.16.

[^2]: S.O. 2002, c.24, Sch. B.

[^3]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[^4]: Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372 at para. 11; Dawson v. Rexcraft Storage & Warehouse Inc., 1998 CanLII 4831 (ON CA), [1998] O.J. No. 3240 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 1994 CanLII 814 (ON CA), 18 O.R. (3d) 481 (C.A.).

[^5]: Toronto-Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798.

[^6]: 2014 SCC 7.

[^7]: 2014 SCC 8.

[^8]: Campana v. The City of Mississauga, 2016 ONSC 3421; Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994, leave to appeal to Div. Ct. refused, 2015 ONSC 1953 (Div. Ct.); Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836 at para. 38; George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001.

[^9]: Hryniak v. Mauldin, 2014 SCC 7 at paras. 49 and 50.

[^10]: Hryniak v. Mauldin, 2014 SCC 7 at paras. 51-55; Wise v. Abbott Laboratories, Ltd., 2016 ONSC 7275 at paras. 320-336; Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2016 ONSC 5784 at paras. 122-131.

[^11]: Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98; Hryniak v. Mauldin, 2014 SCC 7 at para. 66

[^12]: Terranata Winston Churchill Inc. v. Teti Transport Ltd., 2020 ONSC 7577; Betser-Zilevitch v. Nexen Inc., 2018 FC 735 at para. 83, aff'd 2019 FCA 230.

[^13]: Terranata Winston Churchill Inc. v. Teti Transport Ltd., 2020 ONSC 7577 at paras. 59-60; Sinclair-Cockburn Insurance Brokers Limited v. Richards, [2002] O.R. (3d) 105 at para. 14 (C.A.).

[^14]: Terranata Winston Churchill Inc. v. Teti Transport Ltd., 2020 ONSC 7577 at paras. 42-56; Brager v. Ontario (Natural Resources), 2017 ONSC 1759, at para. 22; Ahmed v. Shang, 2016 ONSC 4794; Radvar v. Canada (Attorney General), [2005] O.J. No. 5239 (S.C.J.).

[^15]: 2002 CanLII 45031 (ON CA), [2002] O.J. No. 3288 (C.A.), aff’g [2001] O.J. No. 3487 (S.C.J.), leave to appeal to S.C.C. ref’d [2002] S.C.C.A. 450.

[^16]: [2007] O.J. No. 4357 (S.C.J.).

[^17]: (1979), 1979 CanLII 1946 (ON CA), 24 O.R. 742 (C.A.).

[^18]: Waldman (c.o.b. Eshkol Products) v. D.N. Kimberley Insurance Brokers Ltd., [1998] O.J. 4974 (Gen. Div.); Paletta v. Agro, [1990] O.J. No. 1417 (H.C.J.)

[^19]: Sinclair-Cockburn Insurance Brokers Ltd. v. Richards, [2001] O.J. No. 3487 at para. 6 (S.C.J.), aff’d 2002 CanLII 45031 (ON CA), [2002] O.J. No. 3288 (C.A.), leave to appeal to S.C.C. ref’d [2002] S.C.C.A. 450

[^20]: 1999 CanLII 654 (SCC), [1999] 3 S.C.R. 108

[^21]: Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., 1999 CanLII 654 (SCC), [1999] 3 S.C.R. 108; London Drugs Ltd. v. Kuehne & Nagel International Ltd., [1992] 2 S.C.R. 299.

[^22]: With respect this feature of the Sinclair-Cockburn decision, although it was not argued in the immediate case, it is arguable that based on the exception to the privity of contract rule, Paul Gribilas and Peter Gribilas might be able to directly enforce the release of which they are third party beneficiaries.

[^23]: 2005 CanLII 31292 (ON CA), [2005] O.J. No. 2800 (C.A.).

[^24]: The variation was that since it was conceded by all parties that the claim against the lawyers for an accounting of funds could not be subject to a third party claim and therefore this claim in the main action was not stayed.

[^25]: [1999] O.J. No. 2240, aff’d 2000 CanLII 5665 (ON CA), [2000] O.J. No. 951 (C.A.).

[^26]: [2000] O.J. No. 4838 (C.A.)

[^27]: 2005 CanLII 31292 (ON CA), [2005] O.J. No. 2800 (C.A.).

[^28]: Ieradi v. Gordin [2007] O.J. No. 4357 at paras. 8-10 (S.C.J.); Canadian Express Ltd. v. Blair (1992), 1992 CanLII 7535 (ON SC), 11 O.R. (3rd) 221 at p. 223 (Gen. Div.); Tri-Can Contracting Ltd. v. Canada (1988), 20 F.T.R. 176 at para. P. 178 (T.D.); Varnam v. Canada (Minister of National Health and Welfare) 12 F.T.R. 34 at p. 36 (T.D.).

[^29]: 2011 ONSC 4832 (Div. Ct.).

[^30]: 2011 ONCA 180 varying [2009] O.J. No. 1537 (S.C.J.).

[^31]: [2000] O.J. No. 4838 (C.A.)

[^32]: (1999), 1999 CanLII 3754 (ON CA), 45 O.R. (3d) 223 (C.A.), rev’g (1998), 1998 CanLII 14834 (ON SC), 39 O.R. (3d) 716 (Gen. Div.).