Court File and Parties
COURT FILE NO. CV-14-00010676-00CL DATE: 20240315
ONTARIO - SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST
RE: Werner Jacob Wink, Plaintiff and Paul Boreham, 401 Energy Ltd., Gateway Windfarms Development Inc., Last Chance Wind Power Corp., MFOP Wind Power Ltd. and Farm Owned Power (Melancthon) Ltd., Defendants
BEFORE: Osborne J.
COUNSEL: Craig Allen, for the Plaintiff Bryan C. McPhadden, for the Defendants Paul Boreham, 401 Energy Ltd., Gateway Wind Farms Development Inc., Last Chance Wind Power Corp. and MFOP Wind Power Ltd.
HEARD: May 26, 2023
Reasons for Judgment
1The Plaintiff, Werner Jacob Wink (“Wink” or “the Plaintiff”) moves for summary judgment in this action and asks this Court to determine and award the quantum of damages. In the alternative, Wink seeks summary judgment and an order directing a reference with respect to the quantum of damages sustained by the Plaintiff. In the further alternative, he seeks an order establishing a timetable for the completion of the interim steps required to ready this matter for trial including an order extending the time to sit down the action for trial.
2The Defendants, Paul Boreham (“Boreham”), 401 Energy Ltd. (“401 Energy”), Gateway Wind Farms Development Inc. (“Gateway”), and Last Chance Wind Power Corp. (“Last Chance”) oppose the motion. The action was previously dismissed as against the Defendant, MFOP Wind Power Ltd. (“MFOP”), by order of Hainey, J. on June 7, 2017, as discussed further below.
3This matter is not ripe for summary judgment, and the record is incomplete. (I pause to observe that neither is the record organized or hyperlinked, contrary to the Commercial List Practice Direction, thereby making navigation through the material that has been filed additionally challenging). I am also satisfied that this is not an appropriate case for partial summary judgment.
4For the reasons that follow, the motion is dismissed, albeit with the directions set out below.
Procedural Chronology
5This matter has a painfully long history. The action was commenced in 2014 and, as further described below, little has been done to prosecute or defend the action since that time. It has had an unusual chronology even during the period with which I have addressed issues related to this motion, and all of that is itself the very tail end of the matter.
6The Plaintiff served his summary judgment motion materials in the fall of 2002. The motion was scheduled to be heard in March 2023.
7This matter first came before me in November 2022 by way of a motion of the Defendants to strike parts of the affidavit of the Plaintiff sworn February 7, 2022 filed in support of his motion for summary judgment. The motion to strike was based largely on the submission that many statements in Wink’s affidavit constituted hearsay and/or were based on information or belief but failed to set out what that information was, or to state the source for the information and belief.
8For the reasons set out in my Endorsement dated November 21, 2022, I declined to strike the impugned statements in the affidavit, provided that within 10 days, the Plaintiff provided to the Defendants by way of a supplementary affidavit, the source for the information and belief in respect of each of the impugned statements. The timing was intended to maintain the schedule already set for the pending summary judgment motion.
9Wink then filed a supplementary affidavit in response to the direction contained in my Endorsement.
10The motion for summary judgment returnable on March 27, 2023 then came on before me. Having reviewed the materials filed in advance of the hearing, I raised with counsel the issue of whether one of the parties, the Defendant Boreham, was in fact a party under disability, and I expressed my concern about proceeding in those circumstances, as set out below.
The Capacity of Paul Boreham
11As further described in my Endorsement dated March 27, 2023, my concern was based on the affidavit of Ms. Donna Boreham filed on behalf of the Defendants. Ms. Boreham, a non-party, is the defendant Boreham’s spouse. She stated in her affidavit that he was unable to provide his own evidence in this matter, that she has managed his affairs pursuant to a power of attorney, and that his health was (and is) such that he is unable to instruct counsel, or to provide evidence.
12Donna Boreham’s affidavit included as an exhibit a letter from one of her husband’s treating physicians stating that he was not in a position to be involved in litigation “or to be examined under oath”. The letter was, however, stale-dated in that it was some six years old. There was no more up-to-date medical evidence in the record.
13Accordingly, I raised with counsel whether Boreham could proceed, including with respect to this summary judgment motion, and whether a litigation guardian ought to be appointed pursuant to r. 7. Counsel for all parties were in agreement that, in the circumstances, a motion to appoint a litigation guardian for Boreham was appropriate.
14I therefore adjourned the motion for summary judgment to a rescheduled date, and also scheduled a motion to be brought by the Defendants to be heard in the interim, to appoint a litigation guardian (likely Donna Boreham) for her husband with respect to this proceeding, on the basis of a proper record.
15After a further adjournment necessitated by the late delivery of the motion materials of the moving party Defendants, the motion was heard on May 1, 2023. On the consent of the parties, and on the basis that I was satisfied that the requirements of r. 7 had been met as reflected in my Endorsement of May 1, 2023, Donna Boreham was appointed as litigation guardian of her husband in this proceeding. Further on the consent, and indeed at the request of the parties, I directed that none of the Rule 7 motion materials would form part of the record on this summary judgment motion.
The Motion for Summary Judgment
The Applicable Law
16Summary judgment is sought pursuant to r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The rule is clear that an affidavit for use on such a motion may be made on information and belief, and in response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.
17Rule 20.04 sets out the power of this Court on the disposition of such a motion:
General
20.04 (1) Revoked: O. Reg. 438/08, s. 13 (1).
(2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment. O. Reg. 284/01, s. 6; O. Reg. 438/08, s. 13 (2).
Powers
(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:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence. O. Reg. 438/08, s. 13 (3).
Oral Evidence (Mini-Trial)
(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation. O. Reg. 438/08, s. 13 (3).
Only Genuine Issue Is Amount
(3) Where the court is satisfied that the only genuine issue is the amount to which the moving party is entitled, the court may order a trial of that issue or grant judgment with a reference to determine the amount. R.R.O. 1990, Reg. 194, r. 20.04 (3); O. Reg. 438/08, s. 13 (4).
Only Genuine Issue is Question of Law
(4) Where the court is satisfied that the only genuine issue is a question of law, the court may determine the question and grant judgment accordingly, but where the motion is made to an associate judge, it shall be adjourned to be heard by a judge. R.R.O. 1990, Reg. 194, r. 20.04 (4); O. Reg. 438/08, s. 13 (4); O. Reg. 711/20, s. 7; O. Reg. 383/21, s. 15.
Only Claim Is For An Accounting
(5) Where the plaintiff is the moving party and claims an accounting and the defendant fails to satisfy the court that there is a preliminary issue to be tried, the court may grant judgment on the claim with a reference to take the accounts. R.R.O. 1990, Reg. 194, r. 20.04 (5).
18Rule 20.05 sets out the powers of the court where summary judgment is refused or granted only in part, and provides that the court may make an order specifying what material facts are not in dispute and defining the issues to be tried, and order that the action proceed to trial expeditiously on such terms or directions as are just. Given my disposition of this motion, I have set them out in full:
Powers of Court
20.05 (1) Where summary judgment is refused or is granted only in part, the court may make an order specifying what material facts are not in dispute and defining the issues to be tried, and order that the action proceed to trial expeditiously. O. Reg. 438/08, s. 14.
Directions and Terms
(2) If an action is ordered to proceed to trial under subrule (1), the court may give such directions or impose such terms as are just, including an order,
(a) that each party deliver, within a specified time, an affidavit of documents in accordance with the court’s directions;
(b) that any motions be brought within a specified time;
(c) that a statement setting out what material facts are not in dispute be filed within a specified time;
(d) that examinations for discovery be conducted in accordance with a discovery plan established by the court, which may set a schedule for examinations and impose such limits on the right of discovery as are just, including a limit on the scope of discovery to matters not covered by the affidavits or any other evidence filed on the motion and any cross-examinations on them;
(e) that a discovery plan agreed to by the parties under Rule 29.1 (discovery plan) be amended;
(f) that the affidavits or any other evidence filed on the motion and any cross-examinations on them may be used at trial in the same manner as an examination for discovery;
(g) that any examination of a person under Rule 36 (taking evidence before trial) be subject to a time limit;
(h) that a party deliver, within a specified time, a written summary of the anticipated evidence of a witness;
(i) that any oral examination of a witness at trial be subject to a time limit;
(j) that the evidence of a witness be given in whole or in part by affidavit;
(j.1) that any oral examination of a person or witness proceed by video conference;
(k) that any experts engaged by or on behalf of the parties in relation to the action meet on a without prejudice basis in order to identify the issues on which the experts agree and the issues on which they do not agree, to attempt to clarify and resolve any issues that are the subject of disagreement and to prepare a joint statement setting out the areas of agreement and any areas of disagreement and the reasons for it if, in the opinion of the court, the cost or time savings or other benefits that may be achieved from the meeting are proportionate to the amounts at stake or the importance of the issues involved in the case and,
(i) there is a reasonable prospect for agreement on some or all of the issues, or
(ii) the rationale for opposing expert opinions is unknown and clarification on areas of disagreement would assist the parties or the court;
(l) that each of the parties deliver a concise summary of his or her opening statement;
(m) that the parties appear before the court by a specified date, at which appearance the court may make any order that may be made under this subrule;
(n) that the action be set down for trial on a particular date or on a particular trial list, subject to the direction of the regional senior judge;
(o) for payment into court of all or part of the claim; and
(p) for security for costs. O. Reg. 438/08, s. 14; O. Reg. 689/20, s. 19.
Specified Facts
(3) At the trial, any facts specified under subrule (1) or clause (2) (c) shall be deemed to be established unless the trial judge orders otherwise to prevent injustice. O. Reg. 438/08, s. 14.
Order re Affidavit Evidence
(4) In deciding whether to make an order under clause (2) (j), the fact that an adverse party may reasonably require the attendance of the deponent at trial for cross-examination is a relevant consideration. O. Reg. 438/08, s. 14.
Order re Experts, Costs
(5) If an order is made under clause (2) (k), each party shall bear his or her own costs. O. Reg. 438/08, s. 14.
19The Supreme Court of Canada considered the scope and application of summary judgment in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, observing, as has been quoted with approval in many subsequent cases, that the purpose of a summary judgment motion is to ensure the fair, just, proportionate, timely and affordable adjudication of disputes.
20The court must therefore engage in a two-step process. First, is the court able to determine that there is no genuine issue requiring trial, without resort to the fact-finding powers in r. 20? Second, if there appears to be a genuine issue, can the need for trial be avoided by using the fact‑finding powers, unless it is in the interests of justice for such powers to be exercised only after trial?
21Those fact-finding powers include the ability to weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence.
22The Supreme Court was clear in Hryniak (at para. 66), that use of the fact-finding powers is not contrary to the interests of justice if they lead to a fair and just result and serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
23Partial summary judgment, however, is another matter. It is, generally, the rare case that will justify partial summary judgment. Justice Brown, writing for a unanimous panel of the Court of Appeal for Ontario, set out a cautionary approach in Malik v. Attia, 2020 ONCA 787, 29 R.P.R. (6th) 215 (“Malik”), at para. 62, stating that, when faced with a partial summary judgment motion, a motions judge should make three simple requests of counsel or the parties:
i. demonstrate that dividing the determination of this case into several parts will prove cheaper for the parties;
ii. show how partial summary judgment will get the parties case in and out of the court system more quickly; and
iii. establish how partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the divided case.
24In Malik, the Court of Appeal quoted with approval from 2287913 Ontario Inc. v. Blue Falls Manufacturing Ltd, 2015 ONSC 7982 (“Blue Falls”), in which Myers J. observed, at para. 10, that “summary judgment lies best when the moving party is able to identify a discrete, neat, gating issue that might be resolved on a motion to thereby save the parties the cost and delay associated with going to trial on a number of other issues.”
25As noted in Blue Falls, an issue on which summary judgment is typically granted is one that can be easily separated or bifurcated from the main action and be addressed expeditiously and in a cost-efficient manner, such that granting summary judgment could significantly improve access to justice. Where, however, partial summary judgment would lead to potential delay or increase the risk of creating duplicative proceedings or inconsistent findings, it should be declined.
26Myers, J. noted in Blue Falls, at para. 6, that if one or more causes of action survive summary judgment (as is inevitably the case where partial summary judgment is sought in the first place): “it seems to me that the same facts that formed the basis of the motion will then have to go to trial. Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 (Ont. C.A.), suggests that a motion for summary judgment is not appropriate in that circumstance.”
27Similarly, the Court of Appeal for Ontario in Healthy Lifestyle Medical Group Inc. v. Chand Morningside Plaza Inc., 2019 ONCA 6, 46 C.P.C. (8th) 25, at para. 9, noted that: “this court cautioned against partial summary judgment where it is possible that the trial judge “will develop a fuller appreciation of the relationships and the transactional context than the motions judge” which could risk “inconsistent findings and substantive injustice””.
28Finally, Myers, J. observed in Blue Falls, at para. 14, and I agree, that complexity alone is not a basis to reject a motion for summary judgment. The provisions of r. 20 give a motions judge significant flexibility to address even complex matters.
Analysis
29As set out in his Notice of Motion, the Plaintiff Wink moves against the (remaining) Defendants:
a. for summary judgment in an amount to be determined by this Court;
b. “additionally, and alternatively,” an order directing a reference with respect to the quantum of damages sustained by the Plaintiff;
c. alternatively, an order establishing a timetable for the completion of the interim steps required to ready this matter for trial including an order extending the time to set the action down for trial; and
d. costs of the motion and the action.
30The Defendants have not delivered a Notice of Motion, but in argument sought an order granting summary judgment in their favour and dismissing the action.
31I accept that, in appropriate circumstances, summary judgment may be granted against the moving party and in favour of a responding party, if warranted by the record. A responding party is not required to bring a cross-motion for judgment: Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922 at paras. 50 – 52; Landrie v. Congregation of the Most Holy Redeemer, 2014 ONSC 4008 at para. 50; and King Lofts Toronto I Ltd. v. Emmons, [2014] O.J. No. 1333, 2014 ONCA 215 at paras. 14 - 15, aff’g [2013] O.J. No. 4418, 2013 ONSC 6113 (S.C.J.)](https://www.minicounsel.ca/scj/2013/6113).
32As observed by the Court of Appeal for Ontario in King Lofts, the Supreme Court of Canada in Hryniak has approved a “culture shift” requiring judges to manage the process in line with the principle of proportionality in the application of r. 20. In that case, the Court of Appeal found that the principles of proportionality and sensible management of the court process supported the decision of the motion judge to grant summary judgment in favour of the respondent.
The Record
33The moving party, Wink, relies on his own affidavit sworn February 7, 2022 and his supplementary affidavit sworn pursuant to the order referred to above on December 2, 2022, each with the respective Exhibits thereto, and the transcript of the cross-examination of Donna Boreham on her affidavit described below.
34Wink also submits that he can rely on findings of fact in the decision of Morgan, J. dated September 28, 2015 in a different proceeding or proceedings: Norton McMullen Consulting Inc. v. Boreham, 2015 ONSC 5862 (the “Morgan Decision”). The Morgan Decision is addressed further below.
35The Morgan Decision determined different combined motions in two related actions. The Plaintiffs in the first action were Norton McMullen Consulting Inc. (“Norton”) and Paul Simpson (“Simpson”). The Defendants were Boreham, 401 Energy, Last Chance and MFOP. The Attorney General of Ontario was an Intervenor. The Plaintiffs in the second action were Boreham, 401 Energy, MFOP and Gateway. The Defendants were Norton, Simpson and Rob Gilroy. Relevant for the purposes of this motion, as emphasized by Wink, is the fact that both Boreham and 401 Energy were parties to both of those actions.
36The Defendants rely on the affidavit of Donna Boreham sworn December 21, 2022 together with the Exhibits thereto, and the transcript of the cross-examination of Wink on his two affidavits described above.
37Part of the challenge here, and a significant part of the deficiency in the record that impairs my ability to make the determinations necessary for summary judgment, and certainly summary judgment in respect of all claims against all Defendants, is the fact that notwithstanding that this action has been outstanding for almost a decade, no party has conducted examinations for discovery. Indeed, virtually nothing of substance has been done to prosecute or defend the action beyond the delivery of Affidavits of Documents and the productions listed in the respective Schedule “A”s to those affidavits.
38Nor has any party moved for any other relief to advance either the prosecution or defence of the action (i.e., such as a motion by the Plaintiff for the imposition of a case management timetable; a motion to dismiss if the Defendants refused or failed to attend to be examined for discovery; a motion by the Defendants to compel examinations for discovery; or a motion to dismiss the action for delay if the Plaintiff failed or refused to move it forward).
39In addition, and as further discussed below, neither party appears to have even requested let alone brought a motion to compel, in the absence of cooperation, any evidence of third parties either by way of document production or examination of non-parties. In my view, third parties to this action have or at least are very likely to have material relevant information and documents.
40Wink’s claim is challenging in part because in his own affidavit on which he relies, he states that he “repeats and relies on the allegations of fact” in the statement of claim and that his claim “has been included in the notice of motion as documentary evidence to be relied upon by me at the hearing of this motion”.
41Notwithstanding these deficiencies however, in my view, I am able to make certain findings of fact as set out below. Whether those findings are sufficient to entitle the Plaintiff to judgment is another matter.
The Claim
42At its core, this action is a claim by Wink that Boreham has failed to account to him for millions of dollars pursuant to reciprocal profit-sharing agreements related to wind farm power projects. Wink asserts that the corporate Defendants are also liable because they were created by Boreham as part of his scheme to divert to him profits that ought to have been paid over to Wink.
43Wink alleges that he and Boreham held, directly or indirectly through their respective holding companies, “approximately equal shareholdings in GWC and 401 Energy”.
GWC
44The Georgian Wind Power Corporation Project (“GWC”) was created by Wink and Boreham to develop wind energy projects and was the corporate vehicle used by these two parties (together with a third individual, Michael Monette (“Monette”)) to develop a wind farm on lands owned by Stelco on the north shore of Lake Erie in Haldeman County, Ontario. Initially, each of the three of those individuals held an equal one-third of the issued and outstanding shares.
45GWC entered into a memorandum of understanding and an agreement to enter into a land lease with Stelco to develop the project. However, in April, 2005, Stelco terminated the project. GWC then commenced an action against Stelco for breach of contract. That action was ultimately settled following a trial.
DMP
46The Dufferin / Melancthon project (“DMP”) is the most relevant project on this motion. DMP was being developed by the Defendant, 401 Energy, a corporation of which 49% of the equity (49 Class A shares) was owned by Wink and 51% of the equity (51 Class A shares) was owned by Boreham.
47401 Energy was created to develop the DMP, a wind farm in Melancthon Township, Dufferin County, Ontario.
48As further described below, what in large part gave rise to this motion in the first place was the fact that the DMP was ultimately sold to an entity that was the largest wind developer in China, China Longyuan Power Group Corporation Limited (“China Longyuan”), or an affiliate of China Longyuan.
49China Longyuan subsequently built 49 wind turbines as part of the DMP with the capacity to generate over 99 MW of electrical power annually.
The Profit Sharing Agreements
50In February, 2009, Wink and Boreham entered into reciprocal profit-sharing agreements relating to each of GWC (the “GWC Profit Sharing Agreement”) and DMP (the “DMP Profit Sharing Agreement” [1]).
51Wink’s position on this motion, which I accept as a fact, is that “to address problems relating to the action brought by GWC against Stelco”, he and Boreham agreed to exchange, without additional consideration or compensation, their respective shares in each of the GWC and DMP (held directly or indirectly), such that Wink would own the GWC and continue to prosecute the action against Stelco, while Boreham would own 401 Energy and continue to develop the DMP.
52Wink asserts that pursuant to these reciprocal profit-sharing agreements:
a. he agreed to cause GWC to continue to prosecute the Stelco action and that he would receive 52% of the profits while Boreham would receive 48% of the profits, a division he says was “attributable to our collective two-thirds shareholdings in GWC”; and
b. Boreham agreed to cause 401 Energy to develop the DMP, with Boreham to receive 51% of the profits and he (Wink) to receive 49% of the profits “attributable to our collective 100% shareholdings in 401 Energy”.
53It is not seriously contested on this motion that the DMP Profit Sharing Agreement was entered into by the parties as of February 11, 2009. Indeed, as further set out below, the Defendants’ pleading is to the effect that notwithstanding that Agreement, the transaction with China Longyuan did not trigger any payment obligation to the Plaintiff.
54The DMP Profit Sharing Agreement is attached to Wink’s Affidavit as Exhibit “D”. That Agreement reflects the following:
a. the parties are Boreham and Wink;
b. Recital “A” confirms that Boreham and Wink were the only shareholders of 401 Energy, with Boreham owning 51% and wink owning 49%;
c. Recital “C” confirms that, based on the fact that Boreham and Wink were of the opinion that, at December 10, 2008, the interest of [Boreham’s company] in GWC was of the same value as the interest of Wink in 401 [Energy], Wink transferred absolute title to his 49 shares of 401 [Energy] in exchange for the transfer by [Boreham’s company] to Wink of absolute title of all of its shares in the capital of GWC;
d. Recital “D” confirms that Boreham subsequently agreed that if he elects to sell any of the … shares of 401 [Energy] that he will pay to Wink, as and when received, a pro rata share of the consideration paid by the purchaser … net of the costs of sale … including commissions and legal and accounting fees;
e. a “Sale Agreement” is defined as an agreement of purchase and sale entered into by Boreham (or a Permitted Transferee - essentially a related party to Boreham) as seller, pursuant to which he agrees to sell any of the shares in the capital of 401 Energy owned by Boreham to a third party (any person dealing at arm’s-length with Boreham);
f. pursuant to section 2, if at any time Boreham enters into a Sale Agreement, Wink is entitled upon a sale by Boreham to a copy of the sale agreement and Closing Documents (defined) and, upon the completion of such sale of shares, Boreham shall pay to Wink or as he directs, as and when received, Wink’s Proportionate Share of the Net Sales Proceeds, net of any bona fide collection costs and the Holdback;
g. Wink’s “Proportionate Share” is defined as 47% of the Net Sale Proceeds, being the Sale Proceeds minus the Sale Costs;
h. the “Holdback” is defined as 10% of Wink’s Proportionate Share of the Net Sale Proceeds;
i. “Sale Proceeds” is the purchase price for any shares stipulated in a Sale Agreement minus any credit to which the purchaser is entitled (such as a credit for an outstanding liability of 401 Energy);
j. “Sale Costs” means the bona fide costs of selling the shares incurred by the Seller such as commissions, legal and accounting fees and costs incurred for collection of any deferred payment of Sale Proceeds;
k. also pursuant to section 2, Wink agreed that Boreham alone would have the right to decide if and when to sell; and pursuant to section 3, Wink acknowledged that he had, notwithstanding his entitlement to share in Net Sale Proceeds, no legal or equitable ownership in any of the shares;
l. pursuant to section 3, Wink also waived any entitlement to receive financial statements or financial information with respect to 401 Energy or any other information as to the status of its business, save that if requested in writing by Wink, Boreham was obligated to confirm (not more frequently than quarterly yearly) that Boreham continued to be the owner of shares and whether he was entertaining any offers to purchase any shares that he continued to own;
m. pursuant to section 4, Wink agreed that, provided Boreham continued to advance the development and commercialization of the Projects without delay, Boreham shall have the [unlimited and unqualified right] to incorporate another corporation to carry on the same business, and Wink had no right to share in the profits of such competing business or in the proceeds of any sale thereof;
n. pursuant to section 5, the Holdback was to be held by Boreham in an interest-bearing trust account to be released to Wink (with interest earned) if, as and when Boreham received his own pro rata share of the Net Stelco Proceeds and the amount received by Boreham equals or exceeds Wink’s Proportionate Share, failing which there was to be an adjustment. (I pause to note that it is common ground between the parties on this motion that there were no Stelco Proceeds for distribution or adjustment given the ultimate settlement of the action with Stelco);
o. pursuant to section 7, Boreham agreed to indemnify Wink (and his company) for any and all costs, fees and expenses, including legal fees on a full indemnity basis, that either may incur by reason of Boreham’s breach of the Agreement; and
p. pursuant to section 8, a failure by Wink (or his company) to monetize their interest in GWC within nine years from the date of this Agreement will relieve Boreham from all of his obligations under this Agreement.
55The GWC Action proceeded to trial in April and May 2012, under the direction of Wink and Monette. Pursuant to a judgment dated December 19, 2012, GWC was awarded damages, but in the amount of only $75,000. The action was subsequently settled while an appeal was pending but the result was that there was no profit (i.e., no Net Stelco Proceeds, as defined in the DMP Profit Sharing Agreement) for any of the shareholders of GWC. That was effectively the end of that side of the equation.
56On the DMP side of the equation, however, Wink alleges that the additional corporate Defendants named in this action were “created or used by Boreham and/or others” without his knowledge for the purpose of diverting to Boreham profits properly payable to Wink under the DMP Profit Sharing Agreement.
57The allegation is that the corporate Defendants were created by Boreham to acquire and hold an interest in the DMP. Wink’s position is that, to the best of his knowledge, 51% of the DMP is or was held by an entity (and originally a Defendant) called Farm Owned Power (Melancthon) Ltd. (“Farm Owned Power”) for “members of the Community of the Township of Melancthon”, while the remaining 49% of the DMP was held for Boreham.
58Wink’s position is that at the time the DMP Profit Sharing Agreement was made in February, 2009, the interests of each of he and Boreham in the DMP were held exclusively through 401 Energy.
59He states in his affidavit, in relevant part, that: “public documents relating to the [DMP] disclose that a joint venture was created comprised of 10 companies holding land leases on farm properties … and 49% of the shares of each of the 10 project companies is held by Boreham, directly or indirectly, through 401 Energy and/or MFOP Wind and/or other companies created by Boreham … The organizational structure for the [DMP] also appears to entail a bare trustee, Farm Owned Power, the shares of which are held by the 10 project companies, including Last Chance… At all material times, 401 Energy, under the direction of Boreham, acted as the agent of Farm Owned Power, the bare trustee. … All monies paid for shares of each of the 10 project companies are subject to the profit-sharing agreements between Boreham and I because they concern Boreham’s direct or indirect interest in the project”.
The Sale of the DMP to China Longyuan
60Wink’s evidence is that he believes that Boreham was approached by China Longyuan in December, 2010 with respect to a possible purchase by China Longyuan of the DMP for approximately $30 million. On or about March 7, 2011, Farm Owned Power, again as bare trustee for the 10 project companies, entered into an agreement pursuant to which China Longyuan (or its Canadian affiliate) was to acquire the DMP, including the Feed-in Tariff Contract (the “FIT Contract”) with the Province of Ontario. The assignment of that FIT Contract was a condition of the purchase of the DMP by China Longyuan.
61Wink goes on to state that “according to public documents”, the agreement with China Longyuan closed on July 4, 2011 as a share purchase agreement with Dufferin Wind and Farm Owned Power. He states in his affidavit, on information said to be from lawyers for 401 Energy (again, not identified), that the following took place:
a. a new corporation, Dufferin Wind, was incorporated in New Brunswick and the single share issued to Farm Owned Power as trustee;
b. the FIT Contract and the multiple leases of the project properties were assigned or transferred to Dufferin Wind;
c. Farm Owned Power then entered into a share purchase agreement with each of the 10 project companies and the Canadian affiliate of China Longyuan (China Longyuan Canada Renewables Ltd.) pursuant to which that entity purchased the shares of Dufferin Wind held by Farm Owned Power for $30 million (the “China Longyuan Share Purchase Agreement”); and
d. the purchase price of $30 million was payable in three tranches, the first of which, in the amount of $6.2 million, was paid on June 30, 2011.
62Wink then directly quotes in his Affidavit from what he says is the China Longyuan Share Purchase Agreement the relevant provisions concerning subsequent payment tranches.
63I pause to observe, however, that notwithstanding the references to full excerpts from the document in Wink’s Affidavit, the China Longyuan Share Purchase Agreement itself, which is obviously a critical and key piece of evidence, is not part of the record on this motion. It was not attached to either the original Affidavit or the Supplementary Affidavit of Wink, nor was it marked as an Exhibit on either cross-examination. The source for the reproduced verbatim excerpts is not clear.
64That said, I am satisfied for the reasons described further below (including the admissions of the Defendants in their pleading) as well as the various references in other documents to the China Longyuan Share Purchase Agreement (including correspondence from counsel to the Defendants referencing the Agreement), and finally the Morgan Decision, that it exists and was entered into on or about the date pleaded by the Plaintiff.
65It appears that (using defined terms in the China Longyuan Share Purchase Agreement) the share sale was agreed to proceed in tranches as follows:
a. the First Tranche, consisting of 67% of the shares, was a sale of those shares in exchange for the First Tranche Purchase Price, itself consisting of the First Payment, the Second Payment and the Third Payment;
b. the First Payment (of the First Tranche) was paid on behalf of the Purchaser to counsel for the Vendors on March 7, 2011 in the amount of $650,000;
c. the Second Payment (of the First Tranche) was due to be paid on the First Tranche Closing in the amount of $5,550,000;
d. the Third Payment (of the First Tranche) in the amount of $13,900,000 was payable within 10 days of the earlier of: the Project receiving a Notice to Proceed pursuant to the FIT Contract from the Ontario Power Authority (subject to defined conditions); or the pouring of the first foundation on the Project Real Property for a wind turbine;
e. the Second Tranche related to the sale of the remaining 33% of the shares for a purchase price of $9,900,000 upon the achieving of a defined milestone.
66The evidence of Wink is that following the First Payment and the Second Payment in the aggregate amount of $6.2 million referred to above, the Third Payment of $13.9 million and the Second Tranche (apparently being the final payment) of $9.9 million were both contemplated, although it is unclear if they were ever paid.
67They were dependent upon defined milestones being reached in the development of the DMP. As I understand the evidence of the Plaintiff, he is not certain whether those subsequent payments were ever made, and that is in large part why he seeks an accounting from the Defendants of amounts received.
68In addition, I cannot reconcile Wink’s affidavit evidence that there were to be three payment tranches, with the terms of the China Longyuan Share Purchase Agreement summarized above, which appear to contemplate the total purchase price of $30 million payable over two tranches, rather than three, with the First Tranche consisting of three Payments as set out above.
69Wink states that since the Ontario Power Authority granted conditional approval to Dufferin Wind to build the DMP on July 5, 2013, and Dufferin Wind applied for an electricity generation licence as a FIT Program participant, he believes that the milestones in the China Longyuan Share Purchase Agreement have been achieved and that the Third Payment of the First Tranche as defined in the Agreement of $13,900,000 was also “triggered and paid”.
70However, there is no evidence beyond Wink’s statement of belief as to whether this Third Payment was in fact triggered or paid (or both), and nor is there any evidence whatsoever about the Second Tranche payment of $9,900,000 being either triggered or paid.
71Wink acknowledges that Boreham paid him the sum of $300,000 on June 24, 2011. This payment was made via cheque from 401 Energy delivered to Boreham by Leslie Mason (“Mason”), who was counsel for the company reporting to Boreham, under cover of a letter from Mason to Wink dated July 8, 2011. Mason was Boreham’s lawyer who, according to Wink, had also previously acted for Farm Owned Power and who drafted both reciprocal profit-sharing agreements. Wink states that Mason also represented him (Wink) in relation to corporate matters involving GWC.
72Wink states that the payment of $300,000 was made as an advance toward his share of the First Tranche “profits” pursuant to the China Longyuan Share Purchase Agreement. Boreham offered no evidence as to this payment, although his wife Donna Boreham states, and the Defendants submit on this motion, that the sum was paid to Wink as a gift, even though it was paid from proceeds realized under the China Longyuan Share Purchase Agreement.
73Exhibit “E” to Wink’s Affidavit is an electronic mail message dated the same date as the date of the cheque (June 24, 2011) from Boreham to Mason with a copy to Wink bearing as the Subject: “Amendment to the February 11, 2009 Agreement between Wink and Boreham”.
74In that electronic mail message, Boreham instructs his counsel, Mason, to pay Wink $300,000 “from 401’s share of the proceeds”. However, it goes on to state that “it is recognized by … Wink that [Boreham’s] management company, Gateway Wind Farms, is entitled to take up to a 20% share “depending upon the outcomes of the GWC lawsuit and the same provision is to apply to myself concerning [Wink’s] position on the GWC side” of the total proceeds to 401 Energy from the projects in question before the agreement of February 11, 2009 provisions are enacted. Everything else in the agreement stays the same”. The subsequent cheque and covering letter representing the $300,000 payment from the law firm is also attached.
75Wink’s position is that he never received any funds beyond the initial $300,000, and that Boreham has failed to remit any further funds, account for any further profits or offer any transparency whatsoever.
76On the contrary, according to Wink, Boreham requested in June, 2011 at or around the time the $300,000 payment was made, that Wink defer receipt of his full proportionate share of the profits until the Second Tranche payment, to allow Boreham to repay landowners who had loaned funds to Boreham and/or 401 Energy for the DMP. There is no evidence either way on this point from Boreham or anyone else.
77Wink asserts that he subsequently learned that approximately one month later, in August 2011, Boreham and his companies entered into a settlement agreement with Farm Owned Power to facilitate the sale of the project assets to China Longyuan’s Canadian affiliate (the “Settlement Agreement”). He attaches as an Exhibit a copy of that Settlement Agreement which, he submits, is further evidence that a Sale Agreement as defined in the DMP Profit Sharing Agreement was entered into by Boreham.
78That Settlement Agreement, seemingly dated August, 2011, is executed by Boreham on his own behalf, and in his capacity as an officer of each of 401 Energy, MFOP and Gateway Wind Farms. The Settlement Agreement includes the following references to a sale to Longyuan Canada (or its affiliate) (defined terms below are defined in the Settlement Agreement):
a. the recitals refer to a share purchase agreement with Longyuan Canada dated as of June 27, 2011 in which the Project Companies and Farm Owned Power are vendors and Longyuan Canada is the purchaser;
b. the Settlement Agreement sets out the agreement between the parties as to the allocation of the Purchase Price (payable under the Share Purchase Agreement with Longyuan Canada); and
c. Norton McMullen (one of the parties to the two actions that were the subject of the Morgan Decision discussed above and below) are acknowledged as having been paid.
79Ultimately, Wink asserts, he believes that the Second Tranche First Payment in the amount of $13.9 million was paid. Of that amount, 51% was paid to Farm Owned Power and 49% (or $6,811,000) was paid to 401 Energy. Of that 49% paid to 401 Energy, 49% (or $3,337,390) ought to have been paid over to Wink, but was not.
80Wink then states that he believes that Boreham received “in excess of $2 million from “the First Tranche Second Payment” and he was assured by Boreham that the balance of funds owed to [me] from the First and Second Tranche were to be released “from the third payment that would be made”. He states that “Boreham admitted to me that he had flowed $2 million through his Royal bank account”. Beyond these (hearsay) statements in Wink’s Affidavit, however, there is no objective evidence in the record as to whether any additional funds were received by or on behalf of Boreham or not, and if so, in what amount and when.
81Then, according to Wink, and in the absence of further payments or adequate disclosure from Boreham, he retained counsel who, following negotiations with Mason on behalf of 401 Energy, negotiated an agreement with MFOP Wind and 401 Energy pursuant to which funds owing under China Longyuan Share Purchase Agreement would be paid to Wink’s counsel for him in trust. However, that never happened either.
82There was then an exchange of correspondence between counsel for the parties as Wink continued to demand payment of his share of the proceeds. Counsel for Wink wrote to Mason on July 19, 2012 to state that: “we understand that you have a copy of the February 11, 2009 Profit Sharing Agreement among Mr. Boreham and Mr. Wink”.
83Wink’s counsel took the position in that correspondence that a sale agreement within the meaning of the DMP Profit Sharing Agreement had been entered into, that partial payment had been made and moreover that a further substantial payment was due before the end of 2012”. Information due according to the terms of the Profit Sharing Agreement was requested. Wink provided an authorization and direction that any amounts owing to him and his company be paid to his counsel.
84Both parties then retained new counsel. New counsel for Wink, Mr. William Sasso, then received a letter from new counsel for Boreham (Gilbert’s, LLP), with a copy to Mason, dated November 9, 2012. That correspondence from Boreham’s counsel states, in relevant part, that:
a. any payments owed must flow through Boreham as the [China Longyuan Profit Sharing Agreement] makes clear that Wink is only entitled to his share of the Net Sale Proceeds, i.e., net of commission, legal and accounting fees, bona fide collection costs and the [H]oldback;
b. in addition, Boreham is currently in litigation with his former accountant, Paul Simpson, over accounting fees associated “with the sale to Longyuan” and further that that action with the accountant “will have an impact on the deductions to be applied to the sale proceeds”; and
c. “we thought it best to advise you of this position prior to the closing of the next payment from Longyuan”.
85Wink’s counsel responded on November 23, 2012 to advise that counsel accepted the email referred to above as “a written acknowledgement on behalf of Boreham through his lawyers that he is a party to a binding February 11, 2009 Profit Sharing Agreement under which he is obligated to pay Wink a proportionate share of the net sale proceeds of the share purchase agreement with China Longyuan”. Wink’s counsel took issue with respect to the directions regarding funds, and also requested further information about the legal proceeding with the accountant. There is no evidence that was ever provided.
86Then, on July 18, 2013, counsel for Boreham, Gilbert’s LLP, wrote to Wink’s counsel on a “with prejudice” basis, advising that first, Boreham would not consent to any payments to Wink through his lawyers, and second, that a third payment would be made in respect of the DMP in 2014 and that the “Net Sale Proceeds” would not be determined until at least that time. However, that never happened either.
The Morgan Decision
87As noted above, Boreham was a party to each of the two actions which were the subject of the joint motion resulting in the Morgan Decision. Wink was not a party to either of those two actions.
88Wink relies on findings of fact in the Morgan Decision as further evidence of the sale to China Longyuan and the fact that such a sale triggered the payment obligations under the DMP Profit Sharing Agreement.
89The Defendants dismissed that submission and referred to the Morgan Decision as “tangentially related litigation”, which they submit is not particularly relevant or helpful to the disposition of this motion, particularly since Wink was not a party to those proceedings. I disagree with that submission, and accept the position of the Plaintiff, Wink, in this regard.
90A party to a prior judicial proceeding can be bound by findings of fact and mixed fact and law made in a prior proceeding, notwithstanding that the opposite party in the later proceeding was not a party in the first proceeding. The obvious purpose of the rule is to prevent re-litigation of previously decided issues: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 SCR 77 (“Toronto v C.U.P.E.”), at paras. 30, 37 and 51.
91It is not an application of issue estoppel, since the requirement there of mutuality of parties has not been met: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 25.
92Nor is it properly characterized as a collateral attack on the earlier decision. Wink is not seeking here to overturn the prior finding, and obviously neither is Boreham although he appears to take the position that whatever the findings of fact were made in the earlier proceeding, the Plaintiff should have the obligation to prove those facts (again) in this action.
93The rule is one of estoppel based on abuse of process and the inherent power of the court to prevent the misuse of its procedure. The doctrine of abuse of process has been applied to preclude re-litigation in circumstances where the strict requirements of issue estoppel are not met, but where allowing litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice.
94The motive of the party who seeks to re-litigate, and the capacity in which he or she does so, cannot be decisive factors in the application of the bar against re-litigation. What is improper is to attempt to impeach a judicial finding by the impermissible route of re-litigation in a different forum, to prevent a party from re-litigating the same issue.
95Re-litigating the issue may be permitted: (1) when the first proceeding is tainted by fraud or dishonesty; (2) when fresh, new evidence, previously unavailable, conclusively impeaches the original result; or (3) when fairness dictates that the original result should not be binding in the new context: Toronto v C.U.P.E. at para. 52. In my view, none of those circumstances applies here.
96Accordingly, in my view, the Morgan Decision is relevant to this motion.
97Wink relies in particular on the following findings of fact reflected therein:
a. Boreham managed Farm Owned Power and 401 Energy;
b. the funds to purchase 51% of the shares of each of the 10 project companies came from local investors to 401 Energy;
c. Boreham received approximately $4.3 million from the sale of the shares in the project company, which was to have been invested in the development of the [DMP];
d. a dispute arose between Boreham and the local investors which resulted in a settlement, implemented upon the ultimate sale of the [DMP], pursuant to which settlement the local investors recovered their initial investment from the proceeds of sale prior to the 51/49 split with Boreham and his entities;
e. in March 2011, the DMP was sold for $30 million to an affiliate of China Longyuan;
f. on December 21 and 22, 2010, Boreham’s lawyer, Mason, attended a meeting with China Longyuan. Boreham maintained telephone contact with … Mason in order to provide them with his guidance; and
g. the sale to China Longyuan closed on June 28, 2011.
98As stated above, Wink takes the position on this motion that as a result of the sale of the DMP to China Longyuan, he is entitled to his share of the proceeds of sale all in accordance with the terms of the DMP Profit Sharing Agreement, and particularly section 2(c) thereof.
99The Defendants dispute that, and in fact seek a dismissal of the action in its entirety.
100In their Statement of Defence dated October 15, 2013, the Defendants do not admit that Wink is entitled to any of the relief sought. They deny the paragraph of the Statement of Claim containing the allegation that the parties entered into the DMP Profit Sharing Agreement, although, oddly, admit the paragraph in which Wink pleads that: “the GWC Profit Sharing Agreement provides that obligations relating to disability insurance were conditional upon the performance by Boreham of his obligations under the complementary [DMP] Profit Sharing Agreement”. They further admit the paragraph in which Wink pleads that the performance by Boreham of his obligations under the [DMP] Profit Sharing Agreement is conditional upon the performance by Wink and his company of their obligations in respect of the GWC Profit Sharing Agreement.
101However, the Defendants go on to plead in the Statement of Defence that Wink’s claim in this action is “premised on an incorrect and unsupportable reading of the DMP Profit Sharing Agreement” which the Defendants then admit was entered into. Their position, however, is that the Agreement “entails the payment by Boreham to Wink of certain amounts if and when any of the issued and outstanding shares in the capital of 401 Energy are sold to a third party. No such sale has taken place as of the date of this pleading (i.e., September 5, 2013). Thus, they plead, “Wink is not presently, and never has been, entitled to receive any amounts under the [Agreement]”. [Emphasis in original].
102The same position is repeated later in the pleading with specific reference to the payment section of the DMP Profit Sharing Agreement: “accordingly, as of the date of this pleading, none of Boreham’s obligations to Wink pursuant to Section 2 of the [DMP] Profit Sharing Agreement have been triggered.” [Emphasis added].
103The Defendants then plead that, “further and in the alternative, to the extent Wink is entitled under the [DMP] Profit Sharing Agreement to receive any portion of the proceeds of the sale of the [Project], … the amount to which Wink is entitled cannot the ascertained at the present time”.
104Further, in the Statement of Defence, the Defendants plead that:
a. in or about June 2011, the DMP was sold to Longyuan Canada through a series of transactions, including a Share Purchase Agreement dated June 27, 2011, but this was not a sale of 401 Energy;
b. the First and Second Payments pursuant to the sale, in the amounts of $650,000 and $5,550,000, respectively, were made to [Farm Owned Power] in mid-2011;
c. as the DMP had extensive financial obligations, the Defendants have realized only modest amount as a result of those payments;
d. the Third Payment in respect of the sale of the DMP was expected to be made in 2013, contingent on certain milestones being reached;
e. it is unclear when the Final Payment will be made (i.e., as of the date of the pleading) as it is also contingent on certain milestones being reached; and
f. the completion of the sale of the DMP will not occur until this Final Payment is made.
105With respect to the $300,000 payment that Wink pleads was made in 2011, the Defendants admit that the funds were transferred but plead that the payment was a gift, although they admit that it was paid out of the proceeds of the sale of the DMP, and further plead that the payment was not made in respect of any legal, equitable or other interest of Wink in the DMP, under the DMP Profit Sharing Agreement or otherwise.
106I pause to observe that the Defendants do not plead the expiry of any limitation period. Nor have they brought any motion in the several years since the Statement of Defence was delivered seeking to amend their Defence to assert any such pleading. This is discussed further below given their request that I dismiss the action, in part based on the expiry of the applicable limitation period.
107As stated at the outset of these reasons, Boreham has filed no affidavit on this summary judgment motion. Rather, the affidavit evidence on which the Defendants rely comes from his wife, Donna Boreham, who swore one affidavit on December 21, 2022 (“the Donna Boreham Affidavit”) in which she states, among other things, that:
a. she was not personally involved in any of the transactions, nor was she involved in any of the corporate Defendants, and “therefore ha[s] no direct knowledge of the matters in issue”. Her “limited knowledge of the matters herein is based entirely on what little Paul [Boreham] has told me but which information I believe to be true”;
b. her knowledge of the Profit Sharing Agreement is “based solely on having read the agreement”;
c. she is aware that [Boreham] paid Wink $300,000 “to sever their relationship”;
d. on her husband’s behalf, she has been instructing legal counsel “for years”, with the result that she has direct knowledge of the steps taken in the litigation.
108Regrettably, beyond that, however, her affidavit is almost exclusively argument and submissions. Donna Boreham submits that she would be prepared to attend a judgment debtor examination in this action despite the fact that judgment has not been obtained, in the hope of demonstrating to Wink that there “was no practical reason for pursuing this action even if he thinks it’s meritorious”. Since Wink rejected that “proposition”, she believes that he is “pursuing this action for some ulterior purpose”. That is the extent of her affidavit evidence.
109Donna Boreham was cross-examined on her affidavit. Among other things, she gave evidence on that cross-examination that:
a. she does not know what the DMP is, other than having seen the name;
b. she has no knowledge of essentially all of the facts set out in the Morgan Decision summarized above, including the 10 project companies, the local investors, or the fact that, as found by Morgan, J., Boreham received approximately $4.3 million from the sale of shares in the project companies;
c. she had no knowledge of the litigation with the consulting companies resulting in the litigation determined by the Morgan Decision;
d. she had no knowledge of the finding by Morgan, J. that the DMP (including Boreham’s 49%) was sold for $30 million to an affiliate of China Longyuan Power;
e. she had no knowledge of the negotiation resulting in the party settling on a $30 million price;
f. she had no knowledge of whether the agreement with China Longyuan was in fact signed March 9, 2011 or whether it in fact closed on June 28, 2011;
g. she never spoke with her husband, Boreham, about the Profit Sharing Agreement;
h. she reviewed the correspondence in Wink’s affidavit between counsel related to Wink’s demand for payment in the exchange that followed, although she denied knowing even the identity of her husband’s (Boreham’s) own counsel; and
i. she had no knowledge as to whether there was any accounting of funds provided by Boreham to Wink, although understood that $300,000 was given in 2011, but had no knowledge as to whether any additional funds were paid thereafter.
110The Defendants also cross-examined Wink on his affidavit in February, 2022, and rely in this motion on the following admissions by him:
a. Wink was aware of the key events that occurred between March and August, 2011 at the time they occurred. Since the action was not commenced until the Statement of Claim was issued on September 5, 2013, however, the applicable two-year limitation period had expired with the result that this action is statute barred;
b. with respect to the $300,000 cheque dated July 8, 2011, the evidence of Wink was that he was to have been paid $1 million instead of $300,000 although never received the balance; and
c. Wink was not aware that Farm Owned Power was no longer a Defendant, having been let out of the action, notwithstanding that it was this corporation that received the bulk of the money being claimed.
111In the main, the Defendants take the position that the motion of the Plaintiff for summary judgment should be dismissed, but summary judgment should be granted in favour of the Defendants and indeed the action should be dismissed, for three main reasons: a lack of evidence; the expiry of the limitation period; and the fact that the Defendants would be prejudiced if the action were allowed to continue now, given the deteriorated health of Boreham.
112In submissions, the Defendants argued vigourously that while the Plaintiff pleads the China Longyuan Share Purchase Agreement and the fact that Boreham received funds from it, their only evidence is the stated belief of Wink. They submit that the Plaintiff has not adduced any evidence about the performance of the China Longyuan Share Purchase Agreement or the achieving of certain anticipated performance milestones. The Defendants submit in their factum that “the Plaintiff has provided some evidence of possible part performance up to the second milestone but no conclusive evidence in that regard”.
113I observe that the relief sought by Wink in the action is broader than the relief sought on this motion as set out above.
114In the Statement of Claim in this action, Wink claims, among other things, and based on the above, the following:
a. $10 million in damages for breach of the DMP Profit Sharing Agreement;
b. a mandatory order for disclosure of all financial and other information and documentation required to determine the compensation paid and payable to Boreham;
c. declaratory relief for oppression;
d. an order directing an investigation to be made of [the corporate Defendants] and any affiliates required to determine the gross and net profits from the DMP and the Plaintiff’s proportionate share of such profits;
e. an accounting in conjunction with the determination of damages for breach of contract; and
f. interest and costs.
115As stated at the outset of these reasons, the record on this motion is deficient and lacking in a number of key respects, aside from the obvious absence, for example, of the China Longyuan Share Purchase Agreement itself, which underpins the whole action.
116Notwithstanding the absence of that document, however, I am satisfied on the basis of the record such as it is that the China Longyuan Agreement was entered into by Boreham and companies which he controls, or controlled at the time of the agreement, in March 2011. I am further satisfied that the share purchase transaction contemplated in that Agreement closed on or about June 28, 2011. Finally, I am satisfied that the purchase price was $30 million; that Boreham received at least $4.3 million; and that the purchase price was payable in tranches, with the latter tranches subject to certain milestones having been achieved.
117I also find that the China Longyuan Share Purchase Agreement is a Sale of 401 Energy within the meaning of the DMP Profit Sharing Agreement and that payment of the proceeds of sale including the $4.3 million already received by Boreham and the total $30 million purchase price, if and when received, were and are Sale Proceeds within the meaning of the DMP Profit Sharing Agreement such that, contrary to the position advanced by the Defendants, the payment and accounting obligations to the Plaintiff were triggered.
118In my view, this conclusion is inescapable on even the limited evidence in the record on this motion. That evidence is not limited, contrary to the suggestion of the Defendants, to the stated belief of Wink.
119Rather, it flows directly from the findings in the Morgan Decision. It is also consistent with the references to the China Longyuan transaction in the Settlement Agreement entered into by Boreham and the local company investors referred to above, and inconsistent with the submission of the Defendants that either there was no agreement or at least no agreement that triggered any payment obligations.
120Moreover, it is not expressly denied by the Defendants, who I find admit the existence of both agreements (the DMP Profit Sharing Agreement and the China Longyuan Share Purchase Agreement) although they deny the triggering of any obligations in favour of Wink as of the date of their pleading.
121Finally, in my view, the denial by the Defendants of any obligations of reporting or payment to Wink are completely inconsistent with the position taken by their counsel in the exchange of correspondence in 2012 and 2013, summarized above. In particular, the written correspondence of September 9, 2012 is irreconcilable with the position now taken that there were no obligations owed to Wink as a result of the transaction. Counsel for the Defendants specifically responded to his request for an accounting and payment by referring to the necessary deductions that would have to be made before payment could be made (i.e., commissions, the Holdback and transaction costs). Those deductions would appear to be appropriate, in principle (there is no evidence that they have been quantified), but of course they are relevant in the first place only when a Sale as defined in the agreement has taken place.
122Yet the September 9, 2012 correspondence goes even further and expressly references litigation between Boreham and his accountant, Paul Smith, and says that deductions would have to be made from “the sale proceeds”. Finally, the lawyer for the Defendants confirms in that correspondence that they wanted to advise Wink of the above issues before “the next payment from Longyuan”.
123Moreover, the position of the Defendants is also completely incongruent with the July 18, 2013 “with prejudice” correspondence from their counsel to the effect that a “third payment” from China Longyuan would not be received until 2014 and therefore Net Sales Proceeds (as defined in the DMP Profit Sharing Agreement) could not be determined until that time.
124Finally, in my view, my conclusions are consistent with the $300,000 paid to Wink and the circumstances in which that payment was made, including the electronic mail message from Boreham himself in which he instructed his counsel to make the payment. I reject the suggestion that the payment was a gift or otherwise unrelated to Wink’s entitlements for an accounting and profits. It was clearly an amount to be credited against amounts owing to Wink. The email from Boreham dated July 24, 2011 specifically references the DMP Profit Sharing Agreement and the entitlements thereunder.
125I also find the evidence of Ms. Donna Boreham on her cross-examination to be incredible in that she managed this litigation “for years” and to have instructed counsel on behalf of the Defendants, yet purported to have no knowledge whatsoever of any of the DMP Profit Sharing Agreement, the Settlement Agreement, the China Longyuan Share Purchase Agreement, the purchase price of $30 million, or any of the findings in the Morgan Decision. For the purposes of this motion, I reject that evidence.
126In short, the position taken by the Defendants when Wink began demanding an accounting and payment of his share of the profits was essentially one not of an absence of any right to an accounting or profits, but rather one of prematurity: he was not entitled to a payment since the full purchase price had not yet been paid, and the Defendants could not yet quantify the exact amount to which he was entitled since deductions and other credits still had to be calculated.
127I find that considering all of the evidence in the record, Wink was, and is, entitled to both an accounting and his share of the profits (i.e., the Net Sale Proceeds from China Longyuan).
128However, I cannot determine the quantum to which the Plaintiff is entitled.
129Wink himself cannot quantify with precision the amount to which he says he is entitled, but submits that Boreham (directly or indirectly through companies he controlled) received $34,300,000, with the result that Wink is entitled to $9,010,000 less the $300,000 advanced to him, for a net of $8,910,000 less deductions, expenses and costs, of which he has no details.
130On this motion, counsel for Wink submitted that, based on the sale price to China Longyuan of the DMP of $30 million, Boreham would have received $14.7 million in respect of his 49% ownership, of which Wink is entitled to $7,203,000 plus an additional $2,107,000 being Wink’s share of the original payment of $4,300,000, less a credit of $300,000 on account of the advance received earlier, net of costs fees and expenses. I cannot reconcile on the basis of the record before me, these numbers with any greater precision than that.
131Moreover, I cannot determine on the basis of the evidence before me whether the full Purchase Price payable under the China Longyuan Share Purchase Agreement was paid, as there is no evidence upon which I can be satisfied on a balance of probabilities that the events necessary to trigger the Third Payment of the First Tranche, or to trigger the Second Tranche, in fact occurred, or if so, when. It follows that I cannot determine what amounts of interest may be owing.
132In short, there is simply an absence of evidence in the record as to what happened with the China Longyuan transaction after 2013. As stated above, there are references in the record to further payments expected in 2014, but no evidence as to whether they were in fact received, and if so, when or in what amount.
133In his Supplementary Affidavit sworn after the motion to strike referred to above, Wink repeats a number of the statements from his original Affidavit. In addition, it attaches a number of additional documents as Exhibits. While additional particulars to address the deficiencies in the original Affidavit have been provided, other deficiencies remain, in that some of the earlier statements are simply repeated. For example, at paragraph 11 of the Supplementary Affidavit, Wink references the Third Tranche payment referenced in his earlier Affidavit, but states simply that: “I verily believe that the Third Tranche payment in the amount of $13,500,000 was paid by Longyuan and that 49% ought to have been paid to 401 Energy. Additionally, I verily believe that 49% of the 401 Energy monies ought to have been paid to me pursuant to the [DMP] Profit Sharing Agreement” (para. 11). As to whether or not either or both of those things actually occurred, however, there is no evidence beyond the stated belief.
134Moreover, at para. 13, Wink states that “I verily believe that Boreham received many millions of dollars … I also received information concerning the quantum of monies paid to interested parties from the [Morgan Decision]”. However, neither that information, nor the source for the professed belief, is provided.
135Further still, and beyond the issues with respect to an accounting and quantum, I cannot determine on the basis of the record before me the liability of the corporate Defendants, against which various claims are advanced. There is some evidence of activities undertaken by them (or some of them) in part flowing from the Settlement Agreement with the local landowners and Farm Owned. However, in my view the evidence falls well short of what is required to make a determination to allow (or dismiss) the action as against them. I cannot determine with any degree of certainty, specifically which corporate Defendant did what, when, or precisely what funds were received by which entity and when, let alone whether the receipt of any such funds would be actionable as against those entities by Wink.
136I observe that the DMP Profit Sharing Agreement was clear according to its terms that Boreham had the ability to conduct the business of 401 Energy to advance the commercialization of the Project essentially free of interference from or management participation of Wink. Boreham had the right to incorporate other companies. Whether, and the extent to which, these provisions and others in the DMP Profit Sharing Agreement bear on the liability of the corporate Defendants for the causes of action pleaded, I cannot determine on this record.
137Nor can I determine the quantum of the liability of the corporate Defendants, or the proportionate liability of those parties, based on the record.
138Finally with respect to the corporate Defendants, Farm Owned Power appears, based on the facts referred to above, to have been a key participant in some of the impugned actions, including the Settlement Agreement. However, it is no longer a Defendant.
139Wink himself states in his affidavit at paragraph 20 that this action against Farm Owned Power was dismissed by Hainey, J. on June 7, 2017. His own pleading appears inconsistent with his evidence given on cross-examination to the effect that he was unaware that it was no longer a Defendant and that in his view, “it better be a Defendant”. The record is insufficient for me to make a determination about the circumstances surrounding the dismissal of the action as against that Defendant, and on whose instruction such a step was taken.
140In sum, and even if I could be satisfied that summary judgment ought to be granted as against the Defendant 401 Energy, I cannot be satisfied as to whether judgment should be granted against the corporate Defendants, and if so, which ones and in respect of which causes of action. Finally, I cannot in any event make findings as to the quantum of damages owed as against any Defendant, with the result that if summary judgment were granted against any or all of them (including even 401 Energy alone or together with Boreham but without the other corporate Defendants), a reference to determine damages or the trial of that issue would be necessary in any event.
141It follows that, at best, summary judgment would be partial, and I am not satisfied that any of the three questions stated by the Court of Appeal in Malik to be relevant on a motion for partial summary judgment could be answered in a manner that would favour partial summary judgment being granted now.
142Indeed, in my view, a trial that would clearly be necessary in any event, and granting partial summary judgment now will not in the end provide a result that is cheaper or more efficient for the parties or for the justice system. Rather, directions should be given in respect of this matter to keep it on track as described below.
143Having determined that this is not an appropriate case for partial summary judgment in favour of the Plaintiff, I must address the request of the Defendants that the action be dismissed now for the three reasons they advance: a lack of evidence; the expiry of the limitation period; and the fact that the Defendants would be prejudiced if the action were allowed to continue now, given the deteriorated health of Boreham.
144First, for the reasons expressed above, I am not persuaded that there is such a lack of evidence that the action should be dismissed. On the contrary, and as set out above, the evidence that is in the record points in the opposite direction: there was a Sale within the meaning of the DMP Profit Sharing Agreement, there are Net Sale Proceeds, and the Plaintiff has a viable cause of action for his claim for, among other things, an accounting and payment of his share of those Sale Proceeds.
145I further observe that the contractual obligation on the Defendants to report to Wink and pay to him his proportionate share of any profits was not dependent upon his demand that they do so. It was triggered upon a Sale occurring. Moreover, the Plaintiff did in fact make inquiries and demand an accounting and payment, both directly and through counsel, and was deferred by the Defendants saying that the sale to China Longyuan was not yet complete, his requests were premature, and events (such as the Third Payment of the First Tranche) had yet to occur, following which there would need to be an adjustment for appropriate credits and deductions such as transaction costs. The Defendants never followed up to fulfil their obligations even of reporting, let alone making payment, or even to advise whether the milestones had been met, the full Purchase Price had been paid, or not.
146Second, I am not satisfied on the record before me that the limitation period expired more than two years before this action was commenced such that it should be dismissed on that basis either.
147It is common ground among the parties that the Statement of Claim was issued on September 5, 2013. The last formal correspondence between the parties in the record is the “with prejudice” correspondence from counsel for the Defendants to counsel for the Plaintiff dated July 18, 2013 (Exhibit “L” to the Wink Affidavit), less than two months before the action was commenced.
148That correspondence expressly refers to the demands made by and on behalf of the Plaintiff to proceeds from the sale of the DMP. At the risk of repeating myself, I note that the letter is clear that any proceeds “that your client may be entitled to” are subject to deductions. The letter is also clear that “a third payment was to be made in respect of the Project in 2014, with the result that the Net Sale Proceeds will not be determined until at least that time”.
149Accordingly, the Defendants took the position in that correspondence, delivered “with prejudice” less than two months before the commencement of this action, that no cause of action had yet accrued to the Plaintiff, and his complaints were premature since the Net Sale Proceeds to which he claims he was entitled to had not been and could not be yet calculated since the significant portion of the Purchase Price (the Third Payment) was not even due until the following year.
150The Defendants cannot take that position, and then succeed on what is, in my view, the completely inconsistent position on this motion that the limitation period had expired since the Plaintiff knew or ought to have known of all of the matters set out in s. 5(1) of the Limitations Act, 2002 more than two years before the action was commenced.
151In fairness, counsel for the Defendants conceded in argument on this motion that in any event, the action could not be dismissed for delay in respect of the Third Payment of the First Tranche or the Second Tranche for the reasons expressed above.
152Accordingly, I would not dismiss the action on the basis of the limitation period even if it had been pleaded, which as observed above it has not been.
153Third, I am not persuaded that the Defendants have been prejudiced by the delay in that Boreham’s health has deteriorated, as described above, such that the action should be dismissed on that basis either. Courts are rightfully cautious in dismissing an action for delay, particularly in circumstances where the Defendants have not fulfilled their contractual obligations of reporting and providing information to the Plaintiff.
154In the main, I am not persuaded that Boreham’s evidence will be critical in respect of the elements of the main causes of action in any event. There is no issue that the parties entered into the DMP Profit Sharing Agreement. The Settlement Agreement is clear. The findings in the Morgan Decision are clear. The China Longyuan Share Purchase Agreement was entered into and closed in 2011.
155There are numerous available sources from which evidence could be adduced as to what payments were received, when, what deductions should be made, and as to the other matters so as to arrive at a calculation of Net Sale Proceeds and the entitlement of the Plaintiff. Many of these matters ought to be objective and mechanical.
156I find it likely that most of the documents necessary to establish the facts relevant to these matters (in favour of either party) ought to be fairly readily available. Possible sources for evidence might well include the ordinary course financial reporting and financial statements of all of the Defendants, income tax returns and notices of assessment.
157They might include evidence from individuals who, based on the record before me, were centrally involved in the transactions at issue, such as Mason (who, I pause to observe, acted at least at some points in time for both the Plaintiff and the Defendants). Other lawyers may have relevant evidence and records to provide as well. Issues of privilege can be addressed as and when they arise. The counterparties to the relevant agreements could also be possible sources.
158As noted at the outset of these reasons, the parties have not yet even exchanged Affidavits of Documents, let alone conducted examinations for discovery or brought motions to compel, if necessary, the examination of non-parties.
159In short, I am not satisfied that the action should be dismissed in favour of the Defendants who deferred and put off the Plaintiff when he made his timely inquiries by taking the position that those were premature, to then say the action should be dismissed due to the deteriorating health of Boreham. This is particularly so when they were initially content to proceed without the appointment of a litigation guardian on the implicit basis that Boreham still had capacity. Liability or lack thereof should be determined on the basis of a full record and by a judge who will have the benefit of the knowledge as to whether the other sources for information and evidence have been exhausted.
160Finally, in my view, it is no answer to this action for the Defendants to submit, based on the Affidavit of Donna Boreham who also states that essentially there is no point in the Plaintiff pursuing this action since the Defendants have no funds and she would be willing to be examined in aid of execution to prove that is so.
161First, a defendant does not escape liability or exposure to a judgment simply by asserting that they could not satisfy it if indeed it were granted. Entitlement to judgment and ability to enforce that judgment are very different things. Moreover, there is, of course, no evidence whatsoever about the assets or lack thereof in any of the corporate Defendants.
162For all of these reasons, I decline to dismiss the action.
Result and Disposition
163The motion for summary judgment is dismissed. I also decline to dismiss the action.
164Pursuant to r. 20.05(1), an order shall go:
a. specifying that the following material facts are not in dispute:
i. the DMP Profit Sharing Agreement was entered into by the parties as described in that agreement;
ii. Boreham managed Farm Owned Power and 401 Energy;
iii. the China Longyuan Share Purchase Agreement was entered into in March 2011, and closed on June 28, 2011;
iv. the DMP was sold for $30 million to an affiliate of China Longyuan;
v. the China Longyuan Share Purchase Agreement is a “Sale” within the meaning of section 2(c) of the DMP Profit Sharing Agreement;
vi. Boreham received at least $4.3 million from the sale of the shares in the project company, which was to have been invested in the development of the [DMP]; and
vii. Boreham has failed to provide an accounting in respect of the Net Sales Proceeds or pay to the Plaintiff his proportionate share thereof, except for the amount of $300,000 already paid; and
b. directing that the action proceed to trial expeditiously.
165Pursuant to r. 20.05(2), I make the following directions and impose the following terms:
a. the Defendants shall deliver within 60 days a statement setting out what material facts are not in dispute;
b. the parties shall exchange Affidavits of Documents and productions referred to in Schedule “A” to those Affidavits within 90 days;
c. document production will be made in a form agreed by counsel acting reasonably, and failing such agreement within 30 days, will be made electronically with documents produced in searchable PDF format;
d. examinations for discovery will be completed on dates agreed by counsel acting reasonably, but in any event will be completed by October 30, 2024. The scope of examinations for discovery is limited to matters not already covered in the affidavits and on the cross examinations conducted to date in respect of this motion, and is further limited so as to not include material facts not in dispute as set out above;
e. undertakings will be answered within 60 days of the completion of examinations for discovery;
f. motions, if any, for production from non-parties and/or discovery of non-parties pursuant to r. 30.10 shall be brought as soon as possible but in any event no later than November 30, 2024;
g. the parties shall schedule and complete a mediation of all issues as soon as possible following completion of the above steps;
h. the parties shall exchange written summaries of the anticipated evidence of all witnesses for trial no later than 90 days before trial;
i. any experts engaged by or on behalf of the parties in respect of any issues including but not limited to the calculation of Net Sale Proceeds and the entitlement of the Plaintiff thereto, must meet on a without prejudice basis in order to identify the issues on which they agree and the issues on which they do not agree, to attempt to clarify and resolve any issues that are the subject of disagreement and to prepare a joint statement setting out the areas of agreement and any areas of disagreement and the reasons for it; and
j. the date by which this action must be set down for trial is hereby extended to March 1, 2025.
166Pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, costs are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.
167Rule 57.01 provides that in exercising its discretion under s. 131, the court may consider, in addition to the result in the proceeding (and any offer to settle or contribute), the factors set out in that Rule.
168The overarching objective is to fix an amount that is fair, reasonable, proportionate and within the reasonable expectations of the parties in the circumstances: Boucher v. Public Accountants Council for the Province of Ontario, (2004) 71 O.R. (3d) 291 (C.A.).
169At the conclusion of the hearing in this matter, I requested that counsel confer and agree, if possible, on the quantum of costs of this motion. By electronic mail communication to my judicial assistant, counsel jointly advised that they had agreed on the quantum of costs of $30,000, inclusive of disbursements and taxes.
170However, in my view, and given the disposition of the motion and for the reasons set out above, which I have considered as against the factors set out in r. 57.01, in my view the appropriate disposition of costs is that they be reserved to the trial judge if they cannot be resolved by the parties, since the trial judge will have the benefit of the full evidentiary record and therefore be in the best position to determine what costs should be paid, and if so by which parties.
171Order to go to give effect to these Reasons.
Osborne J. Date: March 15, 2024
1Sometimes referred to in the motion materials as the 401 Energy Profit Sharing Agreement.