Capital Gains Income Streams Corp. et al. v. Merrill Lynch Canada Inc., (2007) 230 O.A.C. 5 (DC)

• Judge: Carnwath, J.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: September 14, 2007
• Jurisdiction: Ontario
• Citations: (2007), 230 O.A.C. 5 (DC)

Capital Gains Income v. Merrill Lynch (2007), 230 O.A.C. 5 (DC)

MLB headnote and full text

Temp. Cite: [2007] O.A.C. TBEd. OC.040

Capital Gains Income Streams Corporation and Income Streams III Corporation  (plaintiffs) v. Merrill Lynch Canada Inc. (defendant)

(04-CL-5531; DC330/07)

Indexed As: Capital Gains Income Streams Corp. et al. v. Merrill Lynch Canada Inc.

Court of Ontario

Superior Court of Justice

Divisional Court

Carnwath, J.

September 25, 2007.

Summary:

The plaintiffs moved pursuant to rule 49.09 for judgment in accordance with the terms of an alleged settlement agreement between the parties.

The Ontario Superior Court, per Cumming, J., in a decision reported at [2006] O.T.C. Uned. 560, dismissed the motion. Cumming, J., found that he could not say whether a settlement had been reached. The plaintiffs appealed to the Court of Appeal. The Court of Appeal had jurisdiction to hear the appeal if the order under appeal was final. However, if the order under appeal was interlocutory, the plaintiffs' appellate remedy lay in an application for leave to appeal to the Divisional Court.

The Ontario Court of Appeal, Laskin, J.A., dissenting, in a decision reported at 225 O.A.C. 210, held that the order under appeal was interlocutory and the court had no jurisdiction to entertain the appeal. The plaintiffs moved for leave to appeal Cumming, J.'s, decision to the Divisional Court.

The Ontario Divisional Court, per Carnwath, J., dismissed the motion.

Courts - Topic 9

Stare decisis - Authority of judicial decisions - Decisions made without jurisdiction - The plaintiffs moved pursuant to rule 49.09 for judgment in accordance with the terms of an alleged settlement agreement - Cumming, J., dismissed the motion, finding that he could not say whether a settlement had been reached - The plaintiffs appealed to the Court of Appeal - The Ontario Court of Appeal, Laskin, J.A., dissenting, held that as the order under appeal was interlocutory, the court had no jurisdiction to entertain the appeal and the plaintiffs' appellate remedies lay in the Divisional Court - The plaintiffs moved for leave to appeal Cumming, J.'s, decision to the Divisional Court - The plaintiffs submitted that there was good reason to doubt the correctness of Cumming, J.'s, decision and they invited the court to take into account the reasons of Laskin, J.A., in the Court of Appeal, which found Cumming, J.'s, decision "unreasonable" - The Ontario Divisional Court, per Carnwath, J., held that it was not bound by Laskin, J.A.'s, conclusion - The court stated that it was not bound by the pronouncements of the Court of Appeal, particularly where they were found in a decision which concluded that the Court of Appeal had no jurisdiction to hear the matter - See paragraphs 22 to 27.

Practice - Topic 9856

Settlements - Judgments based on - The plaintiffs moved pursuant to rule 49.09 for judgment in accordance with the terms of an alleged settlement agreement - Cumming, J., dismissed the motion, finding that he could not say whether a settlement had been reached - The plaintiffs moved for leave to appeal Cumming, J.'s decision, submitting that there were conflicting decisions on the application of rule 49.09 - The Ontario Divisional Court, per Carnwath, J., dismissed the motion - The plaintiffs' submissions failed to recognize the two-step analysis required when construing rule 49.09 - The first step was to consider whether an agreement to settle was reached - In doing so, the proper approach was to treat the motion like a rule 20 motion for summary judgment - If there were material issues of fact or genuine issues of credibility regarding whether (i) the parties intended to create a legally-binding relation or (ii) there was an agreement on all essential terms, a court had to refuse to grant judgment - The second step, once an agreement had been found to exist, was to consider whether, on all the evidence, the agreement should be enforced - In the second step, a rule 20 approach was not applied, but rather a broader approach, taking into account evidence not relevant to a rule 20 inquiry - While the plaintiffs cited several cases as authority for the proposition that a rule 20 approach did not apply to the first step analysis of rule 49.09, none of those cases were authority for that submission - See paragraphs 7 to 21.

Cases Noticed:

Bayersiche Landesbank Girozentrale v. R.S.W.H. Vegetable Farmers Inc. et al., [2001] O.T.C. Uned. 205; 53 O.R.(3d) 374 (Sup. Ct.), refd to. [para. 9].

Milios v. Zagas (1998), 108 O.A.C. 224; 38 O.R.(3d) 218 (C.A.), refd to. [para. 11].

Brzozowski v. O'Leary et al., [2004] O.T.C. Uned. 734; 2004 CarswellOnt 3178 (Sup. Ct.), refd to. [para. 13].

Homewood v. Ahmed et al., [2003] O.T.C. 985; 42 C.P.C.(5th) 291 (Sup. Ct.), refd to. [para. 13].

Weinberg v. Datacom Marketing Inc. et al., [2006] O.T.C. 69; 2006 CarswellOnt 377 (Sup. Ct.), refd to. [para. 13].

Legault v. Johnston et al., [2004] O.T.C. Uned. 22 (Sup. Ct.), refd to. [para. 13].

Vanderkop v. Manufacturers Life Insurance Co., [2005] O.T.C. Uned. A12; 78 O.R.(3d) 276 (Sup. Ct.), refd to. [para. 13].

Royal Bank of Canada v. Central Canadian Industrial Inc. et al. (2003), 180 O.A.C. 275; 2003 CarswellOnt 5214 (C.A.), refd to. [para. 13].

Chan v. Lam (2002), 157 O.A.C. 264 (C.A.), leave to appeal refused (2002), 307 N.R. 199; 180 O.A.C. 199 (S.C.C.), refd to. [para. 13].

Statutes Noticed:

Rules of Civil Procedure (Ont.), rule 49.09 [para. 2].

Counsel:

R.G. Slaght, Q.C., and Paola Calce, for the plaintiffs;

James G.D. Douglas and Angela Vivolo, for the defendant.

This motion was heard on September 14, 2007, before Carnwath, J., of the Ontario Divisional Court, who delivered the following endorsement on September 25, 2007.