





CITATION:
Mull v. National
          Bank of Canada, 2011 ONCA 488



DATE: 20110705



DOCKET: C53213



COURT OF APPEAL FOR ONTARIO



MacPherson, Juriansz and Karakatsanis JJ.A.



BETWEEN



John Mull



Plaintiff (Appellant) (Respondent by
          Cross-Appeal)



and



National Bank of Canada and National Bank Financial
          Inc.



Defendants (Respondents in Appeal) (Appellants
          by Cross-Appeal)



Raymond M. Slattery and Catherine Francis, for the appellant
          John Mull



Linda Plumpton and Justin Necpal, for the respondents



Heard:  June 29, 2011



On appeal from the order of Justice Colin Campbell of the
          Superior Court of Justice dated December 17, 2010.



ENDORSEMENT



[1]

This is an appeal by the appellant, Dr.
    John Mull, from the Order of Campbell J. staying and dismissing his action
    pursuant to s 106 of the
Courts of
    Justice Act
, R.S.O. 1990, c. C-43 and Rule 21.01(3
)(
d)
    of the
Rules of Civil Procedure
.

[2]

Campbell J. found that to permit this
    claim, well known to the appellant at the time of the restructuring, to proceed
    would operate as a manifest unfairness to the other market participants,
    including the respondents, who compromised their claims as part of the Plan of
    Compromise and Arrangement under the CCAA that restructured the Canadian market
    for ABCP.

[3]

The appellant submits that the motion judge
    erred in principle by not accepting the facts pleaded as proven, by making
    findings of prejudice without evidence, and in not properly articulating or
    applying the test for granting a stay.

[4]

We reject these grounds of appeal.

[5]

To the extent that the motion judge
    referred to any significant facts or circumstances not part of the pleadings,
    they were reasonable inferences available to him from the pleadings, the record
    and the circumstances of the prior proceedings.

[6]

The motion judge exercised his discretion
    to stay the appellants claim as an abuse of process on the basis of the
    Release that formed part of the Plan. He considered the purpose of the Plan,
    the context and language of the Release and concluded that the Release clearly
    applied to bar the claims asserted in this action. It is implicit in his
    decision that he considered that it was the clearest of cases, or plain and
    obvious and beyond doubt that the Release disposed of this claim.

[7]

The appellant argues that it is not plain
    and obvious that the Release bars this claim, which is founded in contract and
    arises from the respondents publicly announced re-purchase program, or
    alternatively based upon the way the respondents set up his account. He submits
    that the claim does not relate to the ABCP market claims and the Release was
    not intended to relieve the respondents of their contractual obligations
    outside the provision of the Plan.

[8]

We do not accept the appellants
    submissions that this claim could be characterized as unrelated to the Plan or
    falling outside the scope of the Release; that on a purposive approach, the
    Release could be construed as limited only to tort or similar claims that would
    give rise to third party proceedings; or that such a determination could be
    made only at trial, with a full factual matrix.

[9]

As noted by this court in the previous
    appeal, in the context of these CCAA proceedings, the Release was a necessary
    component of the Plan and is very broadly drafted and bars all claims relating
    to ABCP, including those against the respondents, except for claims for fraud
    which were specifically carved out. The language of the Release itself clearly
    captures any claims whether in tort or contract ... relating to or otherwise
    in connection with the ABCP market in Canada, the business and affairs of any
    of the Released Parties relating to or otherwise in connection with the
    Affected ABCP and arising out of any activities undertaken as a result of the
    Standstill, in anticipation of or preparation for the restructuring of the Affected
    ABCP or CCAA Proceedings.

[10]

Finally, the appellant argues that the motion judge
    erred by relying upon estoppel principles in the absence of a full record. In
    particular, the appellant submits that he could not have changed the market
    restructuring, could not have opted out of the Plan, and that it was not
    appropriate to have raised his claim in the sanction hearing because the
    Monitor had advised him that it was not relevant to the matters before the
    court in the CCAA proceeding.

[11]

The circumstances surrounding the appellants
    participation in the CCAA proceedings were relevant to the motion judges
    exercise of discretion in this case. The motion judge noted the appellants
    active participation in the CCAA proceedings and in the challenge to the scope of
    the Release through his legal counsel, as part of the Ad Hoc Committee of
    Investors. Further, the court was specifically advised of the general nature of
    the appellants claim for the purpose of adjudicating on the scope and fairness
    of the release in the sanction hearing.

[12]

The motion judge concluded that it would be unjust for
    the appellant to proceed with his claims for the full value of his original
    ABCP notes, when the other note holders had received only a portion of the
    value of their notes under the Plan. He noted that the appellant had voted in
    favour of the Plan and had not brought a motion to carve out his claim, nor
    sought any determination that his claim was not caught by the release, nor
    joined in the appeal relating to the scope of the Release.

[13]

We agree with the motion judge that it is not
    appropriate for this claim to proceed in isolation. We see no error in
    principle in the exercise of his discretion. The appeal is dismissed.

[14]

The cost award in this case was unusual. However, the
    motion judge was aware of all the circumstances, not only in this motion but in
    the underlying CCAA proceedings. He was in the best position to weigh the
    competing factors and to determine what was fair and reasonable in these
    particular circumstances. We defer to the exercise of his discretion in this
    case.

[15]

The appeal and cross-appeal are dismissed. The
    respondents shall have costs fixed in the amount of $20,000, inclusive of
    disbursements and HST.

J.C.
    MacPherson J.A.

R.G.
    Juriansz J.A.

Karakatsanis
    J.A.


