



COURT OF APPEAL FOR ONTARIO

CITATION: 3113736 Canada Ltd. v. Cozy Corner
    Bedding Inc., 2020 ONCA 235

DATE: 20200323

DOCKET: C66890

Feldman, Brown and Zarnett JJ.A.

BETWEEN

3113736
    Canada Ltd.

Plaintiff (Respondent)

and

Cozy Corner Bedding Inc.

Defendant (Appellant)

Douglas LaFramboise,
    for the appellant

Varoujan
    Arman, for the respondent

Heard: January 23,
    2020

On appeal from the order of Justice Andrew A. Sanfilippo of the Superior
    Court of Justice, dated April 8, 2019, with reasons reported at 2019 ONSC 2249,
    69 C.B.R. (6th) 102.

Zarnett
    J.A.:

OVERVIEW

[1]

Insolvency legislation preserves the right of a person, who has been
    sued by the insolvent, to raise set-off as a defence. The main issue in this
    appeal is whether that right was given up by a release that the insolvent
    obtained in a class action.

[2]

The respondent, 3113736 Canada Ltd. (Valle Foam) was a manufacturer
    and supplier of foam products. The appellant, Cozy Corner Bedding Inc. (Cozy
    Corner) was one of Valle Foams long-standing customers. In 2010, Valle Foam was
    charged under the
Competition Act
, R.S.C.,
    1985, c. C-34, with fixing prices of its products for a period from 1999 to 2010.
    Along with others, it was also sued for damages for price-fixing in a class proceeding.
    The class was made up of customers who, like Cozy Corner, purchased foam
    products between 1999 and 2012.

[3]

In 2012, on the brink of insolvency, Valle Foam pled guilty to the
    charges and entered into an agreement to settle the class action on terms that did
    not include any payment to the class. The class action settlement included a release
    (the Class Action Release). It released claims by class members against the
    class action defendants, but expressly left unimpaired class members rights to
    advance those claims in a defendants subsequent insolvency. Immediately after
    it agreed to settle the class action, Valle Foam filed for insolvency
    protection under the
Companies Creditors Arrangement Act
, R.S.C., 1985, c. C-36
(the CCAA).

[4]

In 2013, while under CCAA protection, Valle Foam commenced an action
    against Cozy Corner for unpaid invoices rendered in 2011 and 2012. Cozy Corner,
    which made purchases during the price-fixing period, defended the action and
    counterclaimed. It alleged that, due to the price-fixing scheme, it had
    overpaid Valle Foam in amounts that exceeded Valle Foams claim.

[5]

Valle Foam successfully moved for summary judgment for the amount of the
    invoices and a dismissal of the counterclaim. The motion judge rejected Cozy
    Corners contention that it was not bound by the class action settlement
    because it had not received actual notice of it. He characterized Cozy Corners
    defence and counterclaim as raising equitable set-off, but considered equitable
    set-off to be barred by the Class Action Release. Alternatively, he held that Cozy
    Corner had not led sufficient evidence of overcharging in the relevant period to
    meet its burden of showing a genuine issue requiring a trial.

[6]

For the reasons that follow, I would allow Cozy Corners appeal and
    direct that the matter proceed to trial. In light of the exception in the Class
    Action Release, the Class Action Release did not bar Cozy Corner from advancing
    equitable set-off in response to the action that Valle Foam brought while it
    was a CCAA-protected insolvent. The factual record disclosed an issue about
    overcharging which raised a genuine issue requiring a trial.

FACTS

The
Competition Act
Offences and
    Class Actions

[7]

The respondent was known as Valle Foam Industries (1995) Inc. prior to
    its insolvency. It made and distributed flexible polyurethane foam products. Cozy
    Corner was a customer of Valle Foam between 2001 and 2012. Cozy Corners deponent
    gave evidence that it paid Valle Foam over $3 million for product during the
    course of their business relationship. In 2009 alone, Cozy Corner purchased
    $445,000 worth of products from Valle Foam.

[8]

In 2010, Valle Foam was charged under s. 45(1)(c) of the
Competition Act
with conspiring to unduly lessen
    competition in the sale or supply of foam products, and under s. 45(1)(a) of
    the
Competition Act
with conspiring to fix,
    maintain or increase the price for those products. The time period alleged in
    the charges was from January 1, 1999 to March 11, 2010 for the s. 45(1)(c)
    offences and March 12, 2010 to July 27, 2010 for the s. 45(1)(a) offences.

[9]

Various class actions were commenced against Valle Foam and others alleged
    to have been involved in the price-fixing scheme. An Ontario class action was
    commenced in 2010. The class actions included claims for damages for price-fixing
    on behalf of purchasers of foam products.

[10]

On
    January 5, 2012, Valle Foam pled guilty to the
Competition
    Act
offences and was fined a total of $6.5 million. The motion
    judge noted that this included an admission of price-fixing in relation to the
    period covered by the charges, namely January 1, 1999 to July 2010.

[11]

On
    January 11, 2012, Valle Foam agreed to a settlement of the class actions
    conditional upon court approval. The next day, January 12, 2012, Valle Foam
    filed for insolvency protection under the CCAA. As described in the affidavit
    of Tony Vallecoccia, the Chief Executive Officer of Valle Foam at the time of
    the CCAA filing (the Vallecoccia Affidavit), the two events were closely
    related. As he deposed, the settlement of the class action:

·

did not involve any payment by Valle Foam to the plaintiff class;

·

was made expressly on the contemplation that Valle Foam would
    immediately be filing for insolvency protection; and

·

provided that the settlement and the termination of the class
    proceedings were without prejudice to the Class Plaintiffs and putative class
    membersasserting their claims as creditors within the proposed CCAA
    proceedings.

[12]

When
    Valle Foam filed for CCAA protection, it obtained a broad stay of proceedings
    against it. Paragraph 13 of the Initial Order provided that until the
    termination of the stay period, no proceeding or enforcement process in any
    courtshall be commenced or continued against...[Valle Foam]. Paragraph 14
    provided that during the stay period, all rights and remedies of anycorporationagainst
    [Valle Foam] were stayed and suspended. The stay period was initially until
    February 10, 2012, but was extended from time to time through to at least April
    30, 2019, that is, beyond the time this matter was heard by the motion judge.

This Action

[13]

In
    addition to its purchases from Valle Foam during the period covered by the
    price-fixing charges, Cozy Corner purchased additional foam product from Valle
    Foam between August 5, 2011 and January 27, 2012. Valle Foam issued invoices
    totaling approximately $200,000 for this product, the bulk of which remained unpaid
    as of April 8, 2013 when Valle Foam demanded payment (the Disputed Invoices).

[14]

On
    May 1, 2013, Valle Foam, while under CCAA protection, instituted this action
    claiming $184,319.34 on the Disputed Invoices, which Cozy Corner had refused to
    pay when it learned of Valle Foams price-fixing guilty plea.

[15]

Cozy
    Corner defended the action and counterclaimed, alleging that it was not required
    to pay the invoices because of the price-fixing and overcharging in which Valle
    Foam had engaged. Cozy Corner referred to the guilty plea and relied on its
    payments to Valle Foam from 2001 to 2012 for product that was the subject of
    price fixing. Cozy Corner counterclaimed for what it estimated was the amount
    it had been overcharged$410,000 representing 10% of the $4.1 million it had
    paid to Valle Foam since 2001. This amount exceeded Valle Foams claim by
    roughly $225,000.

[16]

In
    its reply, Valle Foam relied on the stay in the CCAA order and asked that the
    counterclaim be dismissed. It claimed that Cozy Corner had not suffered any
    loss on the Disputed Invoices because they were in respect of product sold
    after the price-fixing period in the guilty-plea. Valle Foam also alleged that,
    if any amounts were found to be owing to Cozy Corner, they should be set-off
    against its claim. Paragraph 20 of the reply states: ...in the event any
    amounts are owing by [Valle Foam] to [Cozy Corner], which is expressly denied
    for reasons pleaded herein and in the Statement of Claim, [Valle Foam] is
    entitled to set-off those amounts against the amount claimed in the Statement
    of Claim.

The Class Action Settlement Approval

[17]

The
    Ontario class action was certified for settlement purposes against Valle Foam
    and others in July 2013. In August 2013, notice of the certification and of a
    request that the settlement be approved was mailed to, among others, Valle
    Foams customer list, on which Cozy Corners name appeared. Notice was also
    provided in certain media. The notice provided for an opportunity to opt out of
    participation in the class action and a deadline (October 18, 2013) for doing
    so, and stated that if a class member did not opt out you will be bound by the
    settlement. Cozy Corner did not opt out.

[18]

On
    February 11, 2014, the settlement of the class actions was approved in Ontario
    (the Class Action Settlement Order). Ontario settlement class members were
    defined as including all persons who purchased foam products from January 1,
    1999 to January 10, 2012, and who did not validly opt out. The Class Action Settlement
    Order gave effect to the Class Action Release, described more fully below, and
    deemed the Released Claims (also described below) to be discontinued.

[19]

The
    Class Action Release provides that class members release Valle Foam, among
    others, from the Released Claims, which include any and all manner of claims,
    demands, actions,damages whenever incurred,relating in any way to any conduct
    [between] January 1, 1999 to the date hereof [January 10, 2012]in respect of
    the purchase, sale, pricing, discounting, marketing, distributing of or
    compensation for, Foam Products

[20]

The
    Class Action Release is subject to the following exception:

Notwithstanding anything in this
    Settlement Agreement to the contrary, including but not limited to this
    Settlement Agreements provisions relating to the release of the Released
    Claims granted by the Releasors in favour of
the
Releasees and the discontinuance of proceedings as against the Domfoam
    Defendants, nothing in this Settlement Agreement shall preclude the Plaintiffs,
    or any member of the Settlement Class, individually or collectively, from
    filing against the Domfoam Defendants a claim in any creditor protection,
    restructuring, insolvency or other bankruptcy proceeding in Canada and/or the
    U.S. to the extent that such claim is based upon, arising out of or relating to
    facts, occurrences, transactions or other matters alleged in the Proceedings.
    To the extent permitted by law, the Domfoam Defendants shall not object to the
    filing by the Plaintiffs, or any member of the Settlement Class, of any such
    claim against the Domfoam Defendants in any creditor protection, restructuring,
    insolvency or other bankruptcy proceeding in Canada or the U.S., and further
    agree that nothing in this Settlement Agreement shall in any way impair or
    limit such claim against the Domfoam Defendants or the ability of such
    claimant(s) to seek recovery in any such creditor protection, restructuring or
    other bankruptcy proceeding in Canada or the U.S. for any such claim(s) against
    the Domfoam Defendants.

[21]

The
    term Domfoam Defendants in the Class Action Release included Valle Foam.

The
Motion
Judges Decision

[22]

The
    motion judge rejected Cozy Corners argument that it was not bound by the Class
    Action Release because it did not receive actual notice of the class action, the
    settlement approval, or the right to opt-out. He found that the procedure that
    had been undertaken in the class action provided adequate notice to class
    members.

[23]

In
    addition, the motion judge found that the claims in the defence and counterclaim,
    which Cozy Corner sought to set-off against the respondents claim, fell within
    the definition of Released Claims in the settlement. Cozy Corner was bound by
    the Class Action Release, and its counterclaim was deemed to be discontinued,
    as it had not opted out of the class action settlement. The motion judge held
    this to be a sufficient ground to grant judgment on Valle Foams claim and dismiss
    the counterclaim: at paras. 49-55.

[24]

In
    the alternative, he also found that Cozy Corner had not put its best foot
    forward to show, by evidence, that there was price-fixing on the invoices on
    which it was sued, or the amount of over-charging due to price-fixing on prior
    invoices. He therefore would have granted judgment and dismissed the counterclaim
    on this basis if he had not done so on the basis of the Class Action Release: at
    para. 78.

[25]

Finally,
    he held that if he had not dismissed the counterclaim on the basis of the Class
    Action Release, he would have rejected Valle Foams request to stay the
    counterclaim on the basis of the CCAA stay of proceedings. He reasoned that a
    claim for equitable set-off can be continued in response to a claim brought by
    a party protected by a
CCAA
proceeding
    notwithstanding a stay order, and that the counterclaim is a form of set-off
    responsive to the claim by the party under
CCAA
protection: at paras. 80-82.

[26]

As
    a consequence, the motion judge granted judgment in favour of Valle Foam in the
    sum claimed on the Disputed Invoices ($184,319.34), with pre-judgment and
    post-judgment interest, and dismissed Cozy Corners counterclaim.

ANALYSIS

Standard of Review

[27]

The motion judges decision that there was
    no genuine issue requiring a trial is a finding of mixed
fact and law. Where there is no extricable error in principle,
    findings of mixed fact and law should not be overturned absent palpable and
    overriding error:
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R. 87,
    at para. 81.

Is Cozy Corner Bound by the Class Action
    Release?

[28]

Cozy
    Corner submits that the motion judge erred in finding that it was bound by the
    Class Action Release because of its contention that it did not actually receive
    notice of the class action, the settlement which contained the release, or the
    right to opt-out.

[29]

I
    would not interfere with the motion judges conclusion on this point.

[30]

Subsection 29(3) of the
Class
    Proceedings Act, 1992
, S.O. 1992, c. 6,
states
    that [a] settlement of a class proceeding that is approved by the court binds
    all class members. Cozy Corner does not dispute that it falls within the class
    definition in the Ontario class action, that it did not opt out, and that even
    after Valle Foam raised the class action settlement against it, it brought no
    motion in the class action to extend the time for it to opt out.

[31]

Cozy
    Corners argument that it did not receive actual notice of the class action,
    the settlement approval hearing, or of the opportunity to opt out, is therefore
    unavailing. While the law is clear that adequate notice to class members must
    be provided, the lack of actual notice to any particular class member does not
    prevent the class (except for opt outs) from being bound where sufficient steps
    have been undertaken to provide adequate notice:

Currie v.
    McDonalds Restaurants of Canada Ltd.
(2005)
, 74 O.R. (3d) 321 (C.A.), at
    paras. 28 to 31;
Airia Brands Inc. v. Air Canada
,

2017
    ONCA 792, 417 D.L.R. (4th) 467, at para. 86, leave to appeal refused: [2017]
    S.C.C.A. No. 476.

[32]

The
    motion judges finding that sufficient steps to provide adequate notice had
    been undertaken was completely justified on the record. It is entitled to
    deference. Cozy Corners lack of actual notice did not prevent it from being
    bound by the Class Action Release.

Does the Class Action Release Cover Equitable Set-Off?

[33]

Cozy
    Corner further argues that the motion judge erred in viewing the Class Action Release
    as applying to Cozy Corners assertion of equitable set-off.

[34]

The
    motion judges interpretation of the Class Action Release is subject to a
    deferential standard of review, absent extricable error:
Creston
    Moly Corp. v. Sattva Capital Corp.
, 2014 SCC 53, [2014] 2 S.C.R.
    633, at paras. 50 and 55. However, here the motion judge failed to interpret the
    Class Action Release as a whole and give meaning to all of its terms, which is
    a fundamental principle of contractual interpretation:
Ventas
    Inc. v. Sunrise Senior Living Real Estate Trust,
2007 ONCA 205, 85
    O.R. (3d) 254, at para 24. His reasons do not advert to or analyze the
    exception in the Class Action Release. This is an extricable legal error within
    the meaning of
Sattva
, at para. 53.
    Accordingly, his interpretation is not subject to deference.

[35]

The
    motion judge relied on the following term of the Class Action Release as
    indicative of its breadth:

Released Claims
mean any and all manner of claims, demands, actions . . . , damages whenever
    incurred, damages of any kind including compensatory, punitive or other
damages
, liabilities of any nature whatsoever,
    . . . relating in any way to any conduct occurring anywhere, from January 1,
    1999 to the date hereof [January 10, 2012] in respect of the purchase, sale,
    pricing, discounting, marketing, distributing of or compensation for, Foam
    Products, or relating to any conduct alleged (or which could have been alleged)
    in the Proceedings or the Other Actions

[36]

Cozy Corner argues that equitable set-off falls outside of this
    language because it is a defence, not a claim. Equitable set-off is not, for
    example, precluded by a limitation period the way a claim is:
Grand Financial Management Inc. v. Solemio Transportation Inc
., 2016 ONCA 175, 395 D.L.R. (4th) 529, leave to appeal refused: [2016]
    S.C.C.A. No. 183, at paras. 92 to 94.

[37]

I would not give effect to this argument. Although equitable set-off is
    a defence, it is one that arises from the defendant having a cross-claim that
    is closely connected to the plaintiffs claim:
Telford
    v. Holt
, [1987] 2 S.C.R. 193, at p. 212. It is a way
    of raising, as a defence, a plaintiffs liability to take into account a loss
    it occasioned to the defendant in reduction of the plaintiffs claim. It is
    often referred to as a claim for equitable set-off:

Canada Trustco Mortgage Co. v. Pierce (Estate Trustee of)
(2005), 254 D.L.R. (4th) 79 (C.A.), at para. 50, leave to appeal
    refused: [2005] S.C.C.A. No. 337.

[38]

The definition of Released Claims refers to any and all manner of
    claim and also to liabilities of any nature whatsoever. In my view, this
    language is broad enough to capture a claim for equitable set-off.

[39]

However, the exception (excerpted at para. 20 of these reasons) is an
    important restriction on what would otherwise be the broad effect flowing from the
    definition of Released Claims. The exception allows class members (like Cozy
    Corner) to make claims arising from the matters in issue in the Class Actions (i.e.
    the price-fixing activities) in the course of an insolvency proceeding taken by
    a beneficiary of the Class Action Release (like Valle Foam). It leaves the
    right to make such claims unimpaired.

[40]

In
    my view the right to claim equitable set-off in an insolvency falls within the
    exception.

[41]

The
    CCAA preserves the ability of a creditor to raise set-off when sued by a
    company that is subject to CCAA protection. Section 21 of the CCAA, which
appears within a group of sections appearing under the heading Claims,
provides:

The law of set-off or compensation applies to all
    claims made against a
debtor
company and to all actions instituted by it for the recovery of debts due to
    the company in the same manner and to the same extent as if the company were
    plaintiff or defendant, as the case may be.

[42]

Section 21 of the CCAA extends to claims for equitable set-off:
Algoma Steel Inc. v. Union Gas Ltd.
(2003),
    63 O.R. (3d) 78 (C.A.), at paras. 13-16. Because successfully raising set-off
    against the insolvent permits a dollar-for-dollar reduction in what would otherwise
    be a liability to the insolvent, claims for set-off are to be viewed with
    caution:
Algoma
, at paras.
    14-15. However, here the motion judge accepted that what Cozy Corner raised was
    a claim for equitable set-off.

[43]

Valle Foam argues that the exception in the Class Action Release only
    applies to permit Cozy Corner to file a claim for payment of the overcharges in
    a CCAA claims process. It argues that the exception does not extend to allowing
    Cozy Corner to raise set-off as a defence when Valle Foam, while under CCAA
    protection, sues it.

[44]

I would not give the exception so narrow a reading. In my view, the
    exception in the Class Action Release preserves the right of class members like
    Cozy Corner to raise claims in insolvency proceedings to the same extent as the
    law applicable to that insolvency proceeding permits. The CCAA governs Valle
    Foams insolvency proceeding and envisages that Valle Foam, as a company
    subject to its protection, may sue to recover on debts owed to it, but that if
    it does, a defendant can raise equitable set-off. Accordingly, I do not view Cozy
    Corners assertion of equitable set-off as falling outside of the right of Cozy
    Corner to seek recovery in a creditor protection, restructuring, insolvency or
    bankruptcy proceeding in Canada, a right which was specifically said not to
    have been impaired by the Class Action Release.

[45]

There is no unfairness to Valle Foam in this conclusion. Although the
    motion judge viewed the settlement as reflecting a choice by Cozy Corner to
    pursue its remedy against [Valle Foam] in the administration of the class
    settlement (para. 68), there was in fact no remedy to be pursued in the class
    settlement as Valle Foam made no payment to settle. More accurately put, the
    settlement channeled claims into Valle Foams CCAA process, and left them
    unimpaired in that process. Cozy Corner, by raising a claim of equitable
    set-off in its defence and counterclaim, is raising a right specifically
    available in the CCAA process, which was not compromised by the Class Action Release.

Was there Sufficient Evidence of Overcharging to
    Raise a Genuine Issue for Trial?

[46]

The motion judge held that, in any event, Cozy Corner failed to lead
    and establish evidence to support its claim of equitable set-off. He stated, at
    paras. 76 to 77, that:

Cozy Inc. did not produce any evidence of
    price-fixing by Valle Inc. during the period of the 2011-2012 Invoices,
    recalling that the Offence Period admitted by Valle Inc. in its guilty plea
    under the
Competition Act
charges (January 1, 1999 to July 2010) pre-dated the 2011-2012 purchases in
    question. Section 9.1 of the Class Settlement Agreement specifically states
    that any step taken by Valle Inc. in the Class Action settlement shall not be
    deemed, construed or interpreted to be an admission of any violation of any
    statute or law, or of any wrongdoing or liability by Valle Inc.

In regard to the 2009 invoices, Cozy Inc. did not
    produce any evidence of the amount of over-charging said to have resulted from
price
fixing by Valle Inc. so as to establish a
    quantification of the damage claim that it asserted. The 10% over-pricing value
    pleaded by Cozy Inc. was not established by any evidence. Cozy Inc. submitted
    that it could not produce this evidence because the Plaintiff had refused
to
provide it. I agree with Corbett J. in [
Sweda Farms Ltd. v. Egg Farmers of Ontario
,
    2014 ONSC 1200], at para. 28, that a burden of persuasion rests on [the responding
    party] to establish that it has taken reasonable steps to obtain the evidence
    it needs for the motion for summary judgment, and that the missing evidence
    would be material to the disposition of the motion. Cozy Inc. has not shown
    that it took reasonable steps to obtain the evidence that it says the Plaintiff
    has on the over-pricing value.

[47]

In my view, the motion judge made a palpable and overriding error in
    his assessment of the evidentiary record in coming to this conclusion.

[48]

The motion judge noted that the Disputed Invoices fell outside the time
    period for which Valle Foam had entered a guilty plea, and that Cozy Corners
    principal had conceded on cross-examination that the only reason these invoices
    were not paid was due to the
Competition Act
charges on which Valle Foam was convicted. The motion judge was
    entitled to view the amount of the Disputed Invoices as established.

[49]

But, even if the amount of the Disputed Invoices sued upon was
    established, any overcharging on prior invoices issued and paid during the
    period of price-fixing could, in the circumstances, qualify as a
    cross-claimso clearly connected with the demand of [Valle Foam] that it would
    be manifestly unjust to allow [Valle Foam] to enforce payment without taking
    into consideration the cross-claim:
Telford
, at p. 212. The parties were in a long-term supply arrangement, and
    overcharging for a period from 2001 to 2010, if it occurred, could form the
    basis of an equitable set-off against amounts properly charged in following
    years. The motion judge made no finding to the contrary. His concern was with
    the evidence in support of the amount of overcharging.

[50]

Valle Foams evidence in support of its motion for summary judgment
    attached the Vallecoccia Affidavit, which had been used in support of its CCAA
    filing. The Vallecoccia Affidavit stated that Valle Foam had agreed to a
    substantial fine in its prosecution by the Competition Bureau based on a
    number of factors, including the Bureaus practice of assuming a 20% overcharge.
    It went on to say that in the absence of a settlement, Valle Foam faced
    substantial exposure in the class action even if [Valle Foam was] only exposed
    to several liability and the Court calculates damages based on
a

modest 5% overcharge
 (emphasis added). The motion judge did not advert to that evidence.

[51]

Given that Valle Foams own evidence included the amount of the
    Competition Bureaus assumption concerning its overcharging (20%), and described
    its potential exposure in the class action using a percentage of overcharging that
    its CEO considered to be modest (5%), there was some basis in the evidence that
    there had been an overcharge which, when applied to the amount of Cozy Corners
    prior purchases from Valle Foam (in excess of $3 million), yielded an amount that
    could substantially negate or reduce Valle Foams claim. Valle Foam supplied no
    other evidence of the amount of the overcharges or to explain the Vallecoccia
    statements.

[52]

The motion judge noted that when asked by Cozy Corner to provide the
    amounts of the overcharges, Valle Foam did not do so. Although the motion judge
    referred to the request and refusal, he did not explain what further steps were
    required to be taken by Cozy Corner at this stage to qualify as reasonable
    steps to obtain the evidence that it says [Valle Foam] has on the over-pricing
    value: at para. 77. Nor did he explain why an adverse inference could not be
    drawn against Valle Foam from its failure to provide such information:
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194, r. 20.02 (1);
Indcondo Building Corp. v.
    Steeles Jane Properties

Inc
. (2001), 14 C.P.C. (5
th
) 117 (Ont. Sup. Ct.).

[53]

In my view, taken together, the record disclosed facts showing a
    genuine issue requiring a trial on the amount of the overcharges and their
    effect on Valle Foams claim.

CONCLUSION

[54]

I would allow the appeal, set aside the summary
    judgment, and direct the matter to proceed to trial. The parties did not
    address whether, if Cozy Corner establishes equitable set-off in an amount that
    exceeds Valle Foams claim, it could, in addition to defeating that claim, obtain
    judgment for any excess in a manner analogous to what s. 111 of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43,
allows in cases of legal set-off. Nothing in these
    reasons preordains the determination of that issue if it arises.

[55]

In accordance with the agreement of the parties, I would award Cozy
    Corner the costs of the appeal in the amount of $5,000, inclusive of
    disbursements and applicable taxes.

Released: March 23, 2020

K.F.


B. Zarnett J.A.

I agree. K. Feldman J.A.

I agree. David Brown J.A.


