790668 Ontario Inc. et al. v. D'Andrea Management Inc. et al., 2015 ONCA 557

• Judge: MacFarland, Lauwers and Huscroft, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 19, 2015
• Jurisdiction: Ontario
• Citations: 2015 ONCA 557;(2015), 336 O.A.C. 383 (CA)

790668 Ont. v. D'Andrea Mgt. Inc. (2015), 336 O.A.C. 383 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. JL.027

790668 Ontario Inc., Frezza Management Inc., Elio Frezza, Gina D'Andre-Vozza, Donna D'Andrea Hogan, Onorio Frezza, Tara Frezza, Julia Frezza and Michael Frezza (plaintiffs) v. D'Andrea Management Inc. , Daney D'Andrea , D'Andrea Developments Inc., Rick D'Andrea, 1317539 Ontario Inc. , 1476335 Ontario Inc., 1052534 Ontario Limited, Aldo Rotondi, Jose Nunes, 1536962 Ontario Ltd., St. Willibrord Community Credit Union Limited, now operating as Libro Financial Group, Siskind Cromarty Ivey & Dowler LLP and Fausto Boniferro (defendants/appellants/respondents)

(C59051; 2015 ONCA 557)

Indexed As: 790668 Ontario Inc. et al. v. D'Andrea Management Inc. et al.

Ontario Court of Appeal

MacFarland, Lauwers and Huscroft, JJ.A.

July 29, 2015.

Summary:

Complex family and corporate relationships resulted in the minority shareholders of D'Andrea Management Inc. (DMI) engaging in litigation with DMI and D'Andrea over DMI's assets. Boniferro was a partner in a law firm and represented the minority shareholders until a third party action was commenced against him and his firm. Boniferro and the firm moved for summary judgment.

The Ontario Superior Court, in a decision reported at 2014 ONSC 3312, allowed the motion, and dismissed the third party claim.

The Ontario Superior Court ordered DMI, D'Andrea and a numbered corporation (the DMI parties) to pay Boniferro and the law firm partial indemnity costs in the full amount of the actual costs paid. The DMI parties appealed from the decision granting summary judgment and sought leave to appeal the costs order.

The Ontario Court of Appeal dismissed the appeal from the summary judgment decision, granted leave to appeal the costs order, and allowed the costs appeal in part.

Barristers and Solicitors - Topic 4441

Relations with third parties (incl. opposite parties) - Duty to third or opposite parties - General - The minority shareholders of D'Andrea Management Inc. (DMI) commenced litigation with DMI and D'Andrea over DMI's assets - Boniferro was a partner in a law firm and represented the minority shareholders until a third party action was commenced against him and his firm - Boniferro and the firm obtained summary judgment dismissing the third party claims against them - DMI and others (the DMI parties) appealed, asserting that the motion judge failed to give effect to reasoning in Baywood Homes Partnership et al. v. Haditaghi et al. (2014, ONCA) which required that a summary judgment motion be assessed in the context of the litigation as a whole - The DMI parties asserted that Boniferro's actions were intertwined with what others were doing, and the third parties were effectively acting through Boniferro - They asserted that the trial judge would have a better understanding and appreciation than the motion judge as to how best to characterize Boniferro's actions - The Ontario Court of Appeal rejected the argument - The core allegation in the pleadings respecting the conspiracy claim was that Boniferro advised the DMI parties that a shareholders' meeting had been improperly convened, that he intimidated DMI to adjourn that meeting, and DMI and its shareholders were relying upon him - The judge concluded that Boniferro was acting as counsel for the minority shareholders and owed no duty of care to the DMI parties who were represented by their own solicitor - She added that, assuming the tort of breach of authority existed, there was no evidence that the DMI parties conferred any authority on Boniferro - She then turned her mind to the complaint that Boniferro had abused privileged information and breached a trust by disclosing the information to the mortgagee - The judge observed that any privilege belonged to Bonfierro's clients and not to the DMI parties and, as there was no allegations that a trust existed, there was no breach of trust - Her findings were well-explained and supported by the evidence - See paragraphs 9 to 18.

Barristers and Solicitors - Topic 4447

Relations with third parties (incl. opposite parties) - Duty to third or opposite parties - Confidentiality - [See Barristers and Solicitors - Topic 4441 ].

Practice - Topic 1308.1

Pleadings - General principles - Prayers for relief - The minority shareholders of D'Andrea Management Inc. (DMI) commenced litigation with DMI and D'Andrea over DMI's assets - Boniferro was a partner in a law firm and represented the minority shareholders until a third party action was commenced against him and his firm - Boniferro and the firm obtained summary judgment dismissing the third party claims against them - DMI and others appealed, asserting that the motion judged erred in concluding that the pleadings did not allege conspiracy - The Ontario Court of Appeal rejected the assertion - The motion judge concluded that conspiracy was not pleaded against Boniferro for several reasons, including that no damages for conspiracy were sought in the prayer for relief - The judge was of the view that the use of the generic term "and others" in the prayer for relief meant individuals unknown to the parties and was insufficient to include Boniferro - Those conclusions were not unreasonable - See paragraphs 6 to 8.

Practice - Topic 1335

Pleadings - The issues - Issues to be raised must be pleaded - [See Practice - Topic 1308.1 ].

Practice - Topic 1458

Pleadings - Statement of claim - General - Necessity of claiming damages or relief - [See Practice - Topic 1308.1 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - [See Barristers and Solicitors - Topic 4441 ].

Practice - Topic 7109

Costs - Party and party costs - Special orders - Discretion to exceed scale of costs (incl. power to award percentage of actual costs) - The minority shareholders of D'Andrea Management Inc. (DMI) commenced litigation with DMI and D'Andrea over DMI's assets - Boniferro was a partner in a law firm and represented the minority shareholders until a third party action was commenced against him and the firm - Boniferro and the law firm obtained summary judgment dismissing the third party claims against them - The motion judge noted that the LawPro hourly rates were "roughly two thirds of those charged by lawyers practising in this area with comparable experience" - She declined to apply a "double discount" and awarded Boniferro and the law firm partial indemnity costs in the full amount of the actual rates charged by counsel to LawPro - The Ontario Court of Appeal reduced the costs award by one third - The court stated that "While a court has discretion to determine the size of the discount to a party's actual costs when awarding partial indemnity costs, with due consideration of the factors set out in rule 57.01(1) of the Rules of Civil Procedure ..., I am unable to see, on the facts in this record, a basis to depart from the ordinary rule of thumb that partial indemnity costs should be about one-third less than substantial indemnity costs." - See paragraphs 19 to 23.

Practice - Topic 7170

Costs - Party and party costs - Liability for - Joint and several liability - Third parties obtained summary judgment - The respondents (D'Andrea Management Inc. (DMI), D'Andrea and a numbered corporation) were held jointly and severally liable for partial indemnity costs - The respondents appealed the costs award - D'Andrea asserted that the motion judge erred in holding the respondents jointly and severally liable - The Ontario Court of Appeal rejected the assertion - The motion judge made the following pertinent observation: "I cannot accept Mr. Daney D'Andrea's assertion that he has been in a large measure a bystander to the proceedings. He suggests that he did not oppose the relief sought. However, he filed material on the motion, adopting Mr. Corbett's position and opposition to the motion, although he did not appear at the hearing. He has attended from time to time during these proceedings and has taken an active role." - As the case management judge with five years experience with the parties and the issues, the motion judge was in the best position to make that assessment, which was imminently reasonable - See paragraphs 25 and 26.

Practice - Topic 7241

Costs - Party and party costs - Offers to settle - General (incl. what constitutes and validity) - Third parties obtained summary judgment - The respondents were ordered to pay partial indemnity costs - The respondents appealed the costs award, asserting that the motion judge failed to give any consideration to their offers to settle that would have removed the third parties from the action - The Ontario Court of Appeal rejected the assertion - The motion judge adverted to the offers to settle, and concluded that they were not reasonable in the context - She concluded that there was no justification for awarding costs on a scale other than a partial indemnity scale - She did not err in declining to consider the offers - See paragraph 24.

Torts - Topic 5098

Interference with economic relations - Conspiracy - Pleading - [See Practice - Topic 1308.1 ].

Cases Noticed:

Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 5].

Baywood Homes Partnership et al. v. Haditaghi et al. (2014), 322 O.A.C. 322; 120 O.R.(3d) 438; 2014 ONCA 450, refd to. [para. 5].

Hamilton (City) v. Thier + Curran Architects Inc. et al., [2015] O.A.C. Uned. 36; 2015 ONCA 64, refd to. [para. 5].

Normart Management Ltd. v. West Hill Redevelopment Co. et al. (1998), 113 O.A.C. 375; 37 O.R.(3d) 97 (C.A.), refd to. [para. 6].

Bongiardina et al. v. Vaughan (City) (2000), 135 O.A.C. 154; 49 O.R.(3d) 641 (C.A.), refd to. [para. 11].

Mantella v. Mantella, [2006] O.T.C. 322 (Sup. Ct.), refd to. [para. 21].

Geographic Resources Integrated Data Solutions Ltd. et al. v. Peterson et al., [2013] O.A.C. Uned. 173; 2013 ONSC 1041, refd to. [para. 21].

Wasserman, Arsenault Ltd. et al. v. Sone et al. (2002), 164 O.A.C. 195; 38 C.B.R.(4th) 119, refd to. [para. 22].

Boucher v. Public Accountants Council (Ont.) et al. (2004), 188 O.A.C. 201; 71 O.R.(3d) 291 (C.A.), refd to. [para. 22].

Kim v. Rezai, 2015 ONSC 3140, refd to. [para. 22].

Counsel:

John B. Laskin, for the appellant, D'Andrea Management Inc.;

Edward Babin, for the appellants, Daney D'Andrea and 1317539 Ontario Inc.;

John H. McNair and Mavis J. Butkus, for the respondents, Siskind Cromarty Ivey Dowler LLP and Fausto Boniferro.

These appeals were heard on June 19, 2015, by MacFarland, Lauwers and Huscroft, JJ.A., of the Ontario Court of Appeal. Lauwers, J.A., released the following decision for the court on July 29, 2015.