



COURT OF APPEAL FOR ONTARIO

CITATION: Zenex Enterprises Limited v. Pioneer Balloon Canada
    Limited, 2016 ONCA 594

DATE: 20160726

DOCKET: C60765

Hoy A.C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Zenex Enterprises Limited

Plaintiff

(Respondent)

and

Pioneer Balloon Canada Limited
, S. Rossy Inc.,

Dollarama
    S.E.C. and Dollarama L.P.

Defendants

(
Appellant
)

Derek Collins, for the appellant

Michael S. Deverett, for the respondent

Heard: July 19, 2016

On appeal from the judgment of Justice Sandra Chapnik of
    the Superior Court of Justice, dated June 19, 2015 and supplementary reasons,
    dated July 14, 2015.

ENDORSEMENT

[1]

The appellant, Pioneer Balloon Canada Ltd. (Pioneer), appeals
    from the trial judges determination that it owes Zenex Enterprises Ltd. (Zenex)
    $266,725.08 for breaching an oral contract to pay a commission on its balloon
    sales to Dollarama. Zenex seeks to cross-appeal the trial judges decision that
    it pay Pioneer $5,000 in costs for an unsuccessful motion it brought in the
    course of the proceedings.

Background

[2]

Pioneer is a balloon manufacturer. Zenex is a wholesaler and
    distributor of consumer goods. Dollarama, a retail chain store, was a customer
    of Zenex for several years, during which it purchased various goods including balloons
    Zenex had purchased from Pioneer.

[3]

In 2005, Pioneer entered into an agreement to sell balloons to
    Dollarama directly. Several million dollars in balloons were sold by Pioneer to
    Dollarama over the next five years. Zenex claimed that it was entitled to a 5%
    commission on Pioneers sales to Dollarama, pursuant to an agreement it made to
    introduce Pioneer to Dollarama and to assist in obtaining Dollaramas business.
    Pioneer contended that it secured the Dollarama business on its own and that it
    owed only $5,000 as a fee for Zenex president Howard Starrs services

Did Zenex introduce Pioneer to Dollarama?

[4]

Pioneer argues that the trial judge committed a palpable and
    overriding error when she found it was not disputed that in December 2005,
    Zenex introduced Marylynn Borondy, salesperson for Pioneer, to the principal
    buyer at Dollarama. Pioneers submissions focused on its first meeting with
    Dollarama in Montreal, in December 2005. It argues that Mr. Starr did not attend
    this meeting and, therefore, Zenex did not introduce Pioneer to Dollarama. It points
    to evidence that its representatives had to introduce themselves to the company
    at the meeting.

[5]

We do not accept this argument.

[6]

The agreement between Zenex and Pioneer contemplated a commercial
    introduction  an opening of doors by Mr. Starr, offering Pioneer the chance to
    do business directly with one of Zenexs longstanding clients. Mr. Starr could
    not attend the meeting because his wife was ill, but sent a sales
    representative familiar with the business in his place. Pioneer does not
    dispute that the sales representative attended the meeting in the place of Mr. Starr.

[7]

It was open to the trial judge to find that Mr. Starrs absence
    from the first meeting with Dollarama, which he helped arrange, did not
    undermine the role Zenex played in helping Pioneer to secure the contract with
    Dollarama. Pioneer had no prior relationship with Dollarama and the trial judge
    found that but for the introduction through Zenex, the meeting and consequent sales
    by Pioneer to Dollarama would likely never have occurred. The introduction in
    itself was, I find, significant.

[8]

Pioneer attempted to downplay not only the significance of the work
    done by Mr. Starr in arranging the introduction with Dollarama, but also the
    work he did in helping it to secure the contract with Dollarama. For example, Pioneer
    noted that Mr. Starr did not participate in its second meeting with Dollarama
    in March 2006.

[9]

However, the trial judge found that Pioneers second meeting with
    Dollarama was set up without checking with Mr. Starr, who was informed of it
    only the night before. The trial judge found, further, that Mr. Starr provided extensive
    advice to Pioneer on how to deal with Dollarama in a series of telephone calls
    and email messages between the parties, and spent many hours strategizing Ms.
    Borondy as to its program details and Dollarama presentation.

[10]

The trial judge preferred the evidence of Mr. Starr whenever it
    diverged from that of Ms. Borondy, whose testimony she considered self-serving
    and inconsistent, and not credible as a result. She found that Mr. Starr took
    responsibility for and helped service the Dollarama account, and at no time
    worked as a mere employee or sales agent for Pioneer.

[11]

In short, both the specific finding impugned and the trial
    judges decision are amply supported by the record. We see no palpable and
    overriding error.

Did judge wrongly rely on discovery evidence?

[12]

Pioneer submits that the trial judge erred in relying on evidence
    from the discovery that was not referred to during the course of the trial. It
    points specifically to paras. 39, 40, and 46, in which the trial judge quotes
    from the examinations for discovery of Ms. Borondy and Mr. Starr.

[13]

We would not give effect to this ground of appeal.

[14]

There is no doubt that discovery evidence was admitted in
    contravention of r. 34.18 of the
Rules of Civil Procedure
. Zenex
    acknowledges as much. However, the admission of this evidence is of no moment. The
    trial judges findings do not depend on it. There was ample evidence, properly
    admitted, to support the trial judges findings of fact. As a result, the breach
    of r. 34.18 did not result in any substantial wrong or miscarriage of justice.

Additional issues

[15]

Pioneer raised additional issues in its factum, but these were
    not pursued at the hearing of the appeal. Nevertheless, we have reviewed these
    issues and find no errors requiring appellate intervention.

The cross-appeal

[16]

Zenex argues that the trial judge erred in failing to give effect
    to the pre-trial costs decision of the motion judge. The motion judge dismissed
    Zenexs disclosure motion but, in accordance with the agreement of the parties,
    ordered that costs on the motion were to be in the cause. That is, regardless
    of the outcome of the motion, the winner of the trial would be awarded costs for
    the motion in addition to costs for the trial.

[17]

The trial judge concluded that a more appropriate order, and the
    probable intent of the motion judge considering his reasons and decision, would
    have been to order costs to Pioneer in any event of the cause. Accordingly, she
    ordered that costs of the motion, which she fixed in the all-inclusive amount
    of $5,000, be paid to Pioneer.

[18]

We agree with Zenex that the trial judge erred in doing so. Given
    the order of the motion judge, the trial judge was required only to set the
    quantum of costs for the motion. She did so, setting them at $5,000, but that
    exhausted her authority. The trial judge had no authority to alter the motion
    judges order that costs were to be awarded to the winner of the trial.

[19]

Leave to cross-appeal is granted. The cross-appeal must succeed.

Disposition

[20]

The appeal is dismissed. Leave to cross-appeal is granted, the
    cross-appeal is allowed, the trial judges costs award in favour of Pioneer is
    over-turned, and the costs of trial payable to Zenex are increased by the sum
    of $5,000.

[21]

Zenex is entitled to costs for the appeal in the agreed amount
    of $20,000 plus HST, inclusive of disbursements.


Alexandra Hoy A.C.J.O.


David
    Brown J.A.

Grant
    Huscroft J.A.


