SimEx Inc. v. IMAX Corp. et al., (2005) 206 O.A.C. 3 (CA)

• Judge: Weiler, Rosenberg and Gillese, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 15, 2005
• Jurisdiction: Ontario
• Citations: (2005), 206 O.A.C. 3 (CA)

SimEx v. IMAX Corp. (2005), 206 O.A.C. 3 (CA)

MLB headnote and full text

Temp. Cite: [2005] O.A.C. TBEd. DE.076

SimEx Inc. (applicant/appellant) v. IMAX Corporation and Robots of Mars, Inc. (respondents/respondents in appeal)

(C43373)

Indexed As: SimEx Inc. v. IMAX Corp. et al.

Ontario Court of Appeal

Weiler, Rosenberg and Gillese, JJ.A.

December 15, 2005.

Summary:

SimEx Inc. applied for the interpretation of a transfer agreement under which it had acquired rights to certain films that were the subject of a production agreement between a subsidiary of the respondent IMAX Corp. and a third party.

The Ontario Superior Court, in a decision reported at [2005] O.T.C. 178, held that the assignment attached to the transfer agreement conveyed both the burden and the benefits of the production agreement to SimEx, including the obligation that any dispute concerning royalties would be resolved by arbitration. The court dismissed SimEx’s application for a declaration that any legal proceedings concerning the transfer agreement had to be brought in Ontario courts as stipulated in that agreement. SimEx appealed.

The Ontario Court of Appeal allowed the appeal. It was for the Ontario courts to interpret the transfer agreement. The transfer agreement did not assign to SimEx the obligations under the production agreement to pay royalties or submit disputes to arbitration.

Contracts - Topic 6806

Assignment - General - Without notice or consent (incl. withholding of) - The Ontario Court of Appeal stated that there was no rule of law that prevented a party to a contract from assigning the rights and benefits of the contract to a third party while keeping the burdens - To the contrary, without the consent of the other party to the contact, the ordinary rule was that the party could only assign the benefits and would remain personally liable to the other party - See paragraph 50.

Contracts - Topic 6807

Assignment - General - Effect of assignment - SimEx applied for the interpretation of a transfer agreement under which it had acquired rights to certain films that were the subject of a production agreement between a subsidiary of the respondent IMAX and a third party - The application judge held that the assignment attached to the transfer agreement conveyed both the burden and the benefits of the production agreement to SimEx, including the obligation that any dispute concerning royalties would be resolved by arbitration - The court dismissed SimEx's application for a declaration that any legal proceedings concerning the transfer agreement had to be brought in Ontario courts as stipulated in that agreement - SimEx appealed - The Ontario Court of Appeal allowed the appeal - It was for the Ontario courts to interpret the transfer agreement - The transfer agreement did not assign to SimEx the obligations under the production agreement to pay royalties or submit disputes to arbitration.

Contracts - Topic 7400

Interpretation - General principles - General - The Ontario Court of Appeal stated that “while the court strives to interpret a contract in a manner consistent with the intent of the parties, the parties are presumed to have intended the legal consequences of their words. The court will consider the context or factual matrix in which the contract was drafted, including commercial reasonableness, to understand what the parties intended. The court will not adopt an interpretation that is ‘clearly’ commercially absurd. The court must also consider the contract as a whole. The various provisions ‘should be read, not as standing alone, but in light of the agreement as a whole and other provisions thereof’ ... Where the contract is unambiguous, extrinsic evidence is inadmissible.” - See paragraph 23.

Cases Noticed:

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 19].

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201, refd to. [para. 20].

Andersen (Arthur) Inc. v. Toronto-Dominion Bank et al. (1994), 71 O.A.C. 1; 17 O.R.(3d) 363 (C.A.), refd to. [para. 21, footnote 1].

Canadian Premier Holdings Ltd. et al. v. Winterthur Canada Financial Corp. et al. (2000), 132 O.A.C. 172 (C.A.), refd to. [para. 22].

Scanlon v. Castlepoint Development Corp. et al. (1992), 59 O.A.C. 191; 99 D.L.R.(4th) 153 (C.A.), refd to. [para. 23].

Pompey (Z.I.) Industrie et al. Ecu-Line N.V. et al., [2003] 1 S.C.R. 450; 303 N.R. 201, refd to. [para. 25].

Lounsbury Co. v. Duthie, [1957] S.C.R. 590, refd to. [para. 45].

Rodaro et al. v. Royal Bank of Canada et al. (2002), 157 O.A.C. 203; 59 O.R.(3d) 74 (C.A.), refd to. [para. 45].

Tru-Wall Group Ltd. v. Stadium Corp. of Ontario Ltd., [1995] O.J. No. 2610 (Gen. Div.), refd to. [para. 46, footnote 3].

ABN Amro Bank Canada v. Krupp Mak Maschihnenbau GmbH et al. (1996), 91 O.A.C. 229; 135 D.L.R.(4th) 130 (Div. Ct.), dist. [para. 47].

Petro-Canada v. 366084 Ontario Ltd. (1995), 25 B.L.R.(2d) 19 (Ont. Gen. Div.), refd to. [para. 49].

Authors and Works Noticed:

Fridman, Gerald Henry Louis, The Law of Contract in Canada (4th Ed. 1999), p. 727 [para. 50].

Counsel:

John B. Laskin and Sandeep J. Joshi, for SimEx Inc., appellant;

Julian Heller and Rebecca Toth for IMAX Corporation, respondent;

Darryl T. Mann, for Robots of Mars Inc., respondent.

This appeal was heard on September 15, 2005, by Weiler, Rosenberg and Gillese, JJ.A., of the Ontario Court of Appeal. Rosenberg, J.A., released the following decision for the court on December 15, 2005.