



COURT OF APPEAL FOR ONTARIO

CITATION: Colasanti v. 1808278 Ontario Inc., 2019 ONCA 96

DATE: 20190208

DOCKET: C65020

Hourigan, Miller and Paciocco JJ.A.

BETWEEN

Richard
    R. Colasanti, James A. Colasanti,

W. Kelly
    Colasanti and Tracy Jo Lee Gitke,

Trustees
    of the estate of Ronald Colasanti, deceased

Respondents (Plaintiffs)

and

1808278 Ontario Inc.

Appellant (Defendant)

Myron W. Shulgan, for the appellant

Rodney M. Godard and Angela Kubica, for the respondents

Heard and released orally: February 7, 2019

On appeal from the judgment of Justice Thomas J. Carey of
    the Superior Court of Justice, dated February 2, 2018.

REASONS FOR DECISION

[1]

The appellant 1808278 Ontario Inc. (180) gave a promissory note, in
    the amount of $171,000, to Ronald Colasanti. On default, it took the position
    that the promissory note was void for failure of consideration. Mr. Colasanti
    brought an action in debt. That action was continued by the trustees of his
    estate, which was awarded judgment.

[2]

Mr. Colasanti was a principal of a company that owned a 69 acre parcel
    of land in Kingsville, Ontario. That land parcel was acquired by the appellant
    in 2009, for the purpose of constructing a greenhouse to grow vegetables. When
    the appellant subsequently applied for a building permit, it was advised by
    Kingsvilles Chief Building Official that it needed to first acquire a water
    allocation that Kingsville had made to Mr. Colasanti some years prior. The
    appellant took the position that it acquired the water allocation in its
    purchase of the 69 acre parcel. The Chief Building Official disagreed and
    withheld the building permit.

[3]

The appellant negotiated with Mr. Colasanti to acquire the assignment of
    the water allocation. Ultimately, the appellant gave Mr. Colasanti the
    promissory note in exchange for Mr. Colasanti executing the assignment of part
    of his water allocation, amounting to 400,000 gallons of water per day. The
    trial judge found that Mr. Colasanti acted in good faith. Upon receiving the
    executed assignment, the Chief Building Official issued the building permit and
    the appellant constructed its greenhouses.

[4]

The appellant later refused to make payment as required by the
    promissory note.

[5]

At trial, the appellants principal testified that he had never intended
    to pay on the promissory note, and only signed it to expedite the building
    permit from Kingsville. The appellant took the position that it had already acquired
    the water allocation through its purchase of the 69 acre parcel of land, and
    that the Chief Building Official erred in refusing to recognize this. It
    further argued that Mr. Colasanti never held the water allocation personally,
    and could not transfer what he did not have.  Accordingly, it argued, Mr. Colasantis
    purported transfer to the appellant of the appellants own property  a water
    allocation that in fact never belonged to Mr. Colasanti at any time  could not
    constitute valid consideration for the promissory note.

[6]

The trial judge held that the transfer of the allocation was the
    valuable consideration for the promissory note and granted judgment on the
    debt.

[7]

On appeal, the appellant renews its argument below.

[8]

We do not agree that the trial judge erred.

[9]

In exchange for the promissory note, the appellant obtained an immediate
    resolution of its water supply problem, which enabled it to obtain a building
    permit. The trial judge did not err in finding this to be valid consideration,
    capable of supporting the promissory note. Whether it was legally necessary for
    the appellant to obtain a transfer of the water allocation from Mr. Colasanti,
    and whether Mr. Colasanti held the allocation in his personal capacity, are
    issues that cannot be decided in this forum. Nor need these issues be resolved
    in order to determine whether consideration was received. For its own reasons,
    the appellant did not pursue the available statutory appeal from the decision
    of the Chief Building Official. Furthermore, Kingsville was not made a party to
    this litigation and, as the trial judge noted, (t)his was not the proper forum
    to test the legality of the water allocation scheme.

DISPOSITION

[10]

The
    appeal is dismissed. Costs of the appeal are awarded to the respondent in the
    amount of $13,000 inclusive of disbursements and HST.

C.W. Hourigan J.A.
B.W. Miller J.A.
David M. Paciocco J.A.


