



COURT OF APPEAL FOR ONTARIO

CITATION: Vista Bahia LP v. Cleaver Crawford LLP, 2015 ONCA
    77

DATE: 20150205

DOCKET: C59297

Feldman, Cronk and Hourigan JJ.A.

BETWEEN

Vista Bahia LP

Applicant (Respondent)

and

Cleaver Crawford LLP

Respondent (Respondent)

and

Heritage Investments Capital,

A Division of 2218713 Ontario Corp.

Respondent (Appellant)

Arnold B. Schwisberg, for the appellant

Jeffrey Haylock, for the respondent, Vista Bahia LP

Lucas E. Lung, for the respondent, Cleaver Crawford LLP

Heard: January 23, 2015

On appeal from the judgment of Justice John Murray of the
    Superior Court of Justice, dated August 7, 2014.

ENDORSEMENT

[1]

The appellant, Heritage Investments Capital, a division of 2218713
    Ontario Corp. (Heritage), appeals from the judgment of Murray J. of the
    Superior Court of Justice, dated August 7, 2014, holding that the respondent,
    Vista Bahia LP (Vista), is entitled to the return of funds in the amount of
    US $250,000, currently held in the trust account of Vistas previous
    solicitors, the respondent, Cleaver Crawford LLP (CC LLP).

[2]

Heritage claims that, contrary to the application judges ruling, the
    funds at issue are impressed with a trust in its favour and that it, rather
    than Vista, is entitled to receipt of the funds from CC LLP.  Heritage also
    submits that the application judge erred, and denied Heritage procedural
    fairness, when he declined to adjourn the application at Heritages request to
    permit Heritage to cross-examine the deponent of an affidavit filed by Vista in
    the proceedings before the application judge.

[3]

In our view, neither ground of appeal is sustainable and the appeal must
    be dismissed.

The Trust Claim

[4]

Before this court, Heritage clarified during oral argument that it now accepts
    that neither the Term Sheet nor the Commitment Letter between Vista and
    Heritage contemplate or require the establishment of a trust or escrow
    agreement or arrangement regarding payment of the standby deposit provided for
    under those documents.  Heritage also acknowledges that no written escrow or
    trust agreement or arrangement was in fact entered into by the parties.

[5]

Instead, Heritage submits that the parties agreed to implement the
    Term Sheet and the Commitment Letter by entering into an agreement or
    arrangement that the funds necessary to pay the standby deposit would be
    provided to CC LLP to be held in trust or escrow by that firm for Heritages
    benefit.  This agreement or arrangement, Heritage says, is evidenced by a
    letter from Heritage to Vista dated June 20, 2013 and an undated response to
    that letter from CC LLP, on Vistas behalf.

[6]

We reject this submission.

[7]

First, nothing in the correspondence relied on by Heritage refers to any
    trust or escrow arrangement or agreement in favour of Heritage in respect of
    funds provided or to be provided by Vista to CC LLP.  And, as Heritage
    concedes, neither do the Term Sheet or the Commitment Letter.

[8]

Second, the terms of the Commitment Letter are inconsistent, in several
    respects, with the notion of a trust or escrow arrangement or agreement relating
    to the funds necessary to pay the standby deposit.

[9]

Third, in Heritages affidavit materials, Heritages own affiant in the proceedings
    before the application judge did not assert any trust or escrow agreement or
    arrangement between the parties based on the June 2013 correspondence between
    Heritage, Vista and CC LLP.  To the contrary, the affiant alleges that
    Heritages letter of June 20, 2013 sought to confirm that funds were in trust
    with CC LLP and were ready to be paid over to Heritage.  In fact, the June
    20, 2013 letter from Heritage to Vista does not say this.

[10]

Simply
    put, there is nothing on this record to substantiate Heritages claim, advanced
    for the first time in oral argument at the appeal hearing, that by reason of
    the June 2013 correspondence, the parties entered into an enforceable trust or
    escrow arrangement or agreement pertaining to the funds required to pay the
    standby deposit.  Indeed, Heritages pleading in the underlying debt action
    between Heritage and Vista fails to assert this claim as now framed by
    Heritage.

[11]

In
    these circumstances, we agree with the application judge that: At best, [the]
    payment of US $250,000 by [Vista] to [CC LLP] was evidence of [Vistas] ability
    to pay US $250,000 when and if required to do so.

[12]

This
    ground of appeal fails.

The Adjournment Complaint

[13]

We
    also do not accept Heritages argument that the application judge erred in law,
    or denied Heritage procedural fairness, by declining to adjourn the application
    before him to permit Heritage to cross-examine Vistas representative on her
    affidavit.

[14]

The
    record confirms that the date of the application  July 24, 2014  was fixed at
    Heritages request to accommodate the schedule of Heritages counsel.  The
    record also reveals that Heritage had indicated its intention to conduct
    cross-examinations as early as June 21, 2014, some four and one-half weeks
    before the agreed application hearing date.  Yet, Heritage took no steps to
    cross-examine, even when it learned that CC LLP did not intend to file any
    affidavit materials on the application.  Instead, Heritage simply elected to
    attend before the application judge on the return date of the application to
    request an adjournment.

[15]

In
    these circumstances, Heritage cannot be heard to now complain of the
    consequences of its own tactical decision not to seek to cross-examine before
    the return date of the application.  Heritage had ample opportunity to
    cross-examine and elected not to do so.

[16]

Moreover,
    and in any event, we are not persuaded that cross-examination of Vistas
    affiant would have made any substantive difference to the determination of the
    legal question whether the funds held by CC LLP were subject to a trust
    interest in favour of Heritage, when, as discussed above, Heritages own
    affiant did not make that assertion.

[17]

We
    therefore see no basis for appellate interference with the application judges
    discretionary decision to deny Heritages adjournment request.  This ground
    also fails.

Disposition

[18]

For
    these reasons, the appeal is dismissed.  Vista is entitled to its costs of the
    appeal, fixed in the amount of $7,000, inclusive of disbursements and H.S.T. 
    CC LLP does not request costs and we make no costs award in its favour.

K. Feldman J.A.

E.A. Cronk J.A.

C.W. Hourigan J.A.


