Hi-Tech Group Inc. v. Sears Canada Inc., (2001) 141 O.A.C. 56 (CA)

• Judge: Morden, Goudge and Feldman, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 11, 2001
• Jurisdiction: Ontario
• Citations: (2001), 141 O.A.C. 56 (CA);2001 CanLII 24049 (NS CA);2001 CanLII 24049 (ON CA);52 OR (3d) 97;11 BLR (3d) 197;[2001] CarswellOnt 9;[2001] OJ No 33 (QL);102 ACWS (3d) 79;141 OAC 56;4 CPC (5th) 35

Hi-Tech Group Inc. v. Sears Can. Inc. (2001), 141 O.A.C. 56 (CA)

MLB headnote and full text

Temp. Cite: [2001] O.A.C. TBEd. JA.036

The Hi-Tech Group Inc. (formerly M C Club Services, Inc.) (plaintiff/appellant) v. Sears Canada Inc. (defendant/respondent)

(C34440)

Indexed As: Hi-Tech Group Inc. v. Sears Canada Inc.

Ontario Court of Appeal

Morden, Goudge and Feldman, JJ.A.

January 11, 2001.

Summary:

The plaintiff managed consumer clubs on behalf of retailers. The plaintiff and defen­dant retailer entered into an agreement. The defendant delivered notice of termination pursuant to a termination clause. The plain­tiff sued for various breaches, including invalid termination of the agreement. The defendant moved for partial summary judg­ment dismissing the claim for breach of the termination clause.

The Ontario Superior Court granted sum­mary judgment dismissing the claim for invalid termination. The plaintiff appealed.

The Ontario Court of Appeal allowed the appeal, set aside the summary judgment and dismissed the defendant's motion.

Contracts - Topic 2109

Terms - Express terms - Renewal clauses -The plaintiff managed consumer clubs on retailers' behalf - The plaintiff and defen­dant retailer entered into an agreement in May 1994 - The defendant delivered notice of termination pursuant to a termination clause - The clause provided that the agreement ended on May 31, 1995, but "it would automatically renew for successive terms of one year, subject to termination by either party upon 120 days prior written notice" - The defendant delivered notice of termination on February 1996, to be effec­tive no later than June 30, 1996 - The plaintiff sued for invalid termination, asserting that notice was to precede the commencement of the renewal term be­ginning on May 31, 1996 or automatically renew for a year - The defendant suc­cessfully moved for summary judgment dismissing the claim - On appeal, the Ontario Court of Appeal held that the clause was ambiguous and susceptible to more than one meaning, including the plaintiff's interpretation - Accordingly, there was a genuine issue for trial - The court set aside the summary judgment - See paragraphs 9 to 26.

Contracts - Topic 7430

Interpretation - Ambiguity - Admissibility of extrinsic evidence - The plaintiff and defendant entered into an agreement - The agreement provided for a termination clause - The defendant terminated the agreement - The plaintiff sued for invalid termination and adduced extrinsic evidence to support its interpretation of the ter­mination clause - The defendant was grant­ed summary judgment dismissing the claim - On appeal, the plaintiff asserted that the motions judge erred in holding that extrin­sic evidence relating to the agreement was inadmissible - The Ontario Court of Ap­peal reviewed the law regarding the admis­sibility of extrinsic evidence and evidence of surrounding circumstances as aids in the interpretation of agreements - The court set aside the summary judgment, where it was the trial judge's responsibility to determine the extent of the admissibility of the evi­dence and to make the proper findings on it - See paragraphs 9 to 26.

Contracts - Topic 7521

Interpretation - Surrounding circumstances - General - [See Contracts - Topic 7430 ].

Practice - Topic 5708

Judgments and orders - Summary judg­ments - Bar to application - Existence of issue to be tried - The Ontario Court of Appeal reviewed the onus of proof on a motion for summary judgment - The court reviewed the Supreme Court of Canada's decision in Guarantee Co. of North Ameri­ca v. Gordon Capital Co and stated the court must be satisfied that there was no genuine issue for trial before it could grant summary judgment - The legal burden rested on the moving party and never shifted - Guarantee Co. never intended to detract from this rule - See paragraphs 28 to 31.

Cases Noticed:

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201, refd to. [para. 14].

Brown Brothers v. Popham, [1939] 4 D.L.R. 662 (Ont. C.A.), refd to. [para. 22].

Prenn v. Simmonds, [1971] 1 W.L.R. 1381 (H.L.), refd to. [para. 23].

Reardon Smith Line Ltd. v. Yngvar Han­sen-Tangen, [1976] 1 W.L.R. 989 (H.L.), refd to. [para. 23].

Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69; 206 N.R. 299; 157 N.S.R.(2d) 81; 462 A.P.R. 81, refd to. [para. 23].

Guarantee Co. of North America v. Gor­don Capital Corp., [1999] 3 S.C.R. 423; 247 N.R. 97; 126 O.A.C. 1, refd to. [para. 28].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 29].

Dawson et al. v. Rexcraft Storage and Warehouse Inc. et al. (1998), 111 O.A.C. 201; 164 D.L.R.(4th) 257 (C.A.), refd to. [para. 29].

Ungerman (Irving) Ltd. et al. v. Galanis and Haut (1991), 50 O.A.C. 176; 4 O.R.(3d) 545 (C.A.), refd to. [para. 29].

Lang et al. v. Kligerman et al., [1998] O.A.C. Uned. 374 (C.A.), refd to. [para. 30].

Kaighin Capital Inc. v. Canadian National Sportsmen's Shows (1987), 58 O.R.(2d) 790 (H.C.), refd to. [para. 30].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed. Reissue), vol. 13, paras. 166 [para. 25]; 174 [para. 22].

Waddams, Stephen M., The Law of Con­tracts (4th Ed. 1999), p. 232 [para. 23].

Counsel:

Robert Rueter and Young Park, for the appellant;

Jerome R. Morse and Susan B. Wortzman, for the respondent.

This appeal was heard on November 8, 2000, by Morden, Goudge and Feldman, JJ.A., of the Ontario Court of Appeal.

The following decision of the court was delivered by Morden, J.A., on January 11, 2001.