



COURT OF APPEAL FOR ONTARIO

CITATION: R & G Draper Farms (Keswick) Ltd. v. Nature's
    Finest Produce Ltd., 2016 ONCA 481

DATE: 20160616

DOCKET: C60875

Blair, MacFarland and Lauwers JJ.A.

BETWEEN

R & G Draper Farms (Keswick) Ltd
.

Plaintiff

(Respondent/Appellant
    by way of cross-appeal)

and

Natures Finest Produce Ltd., Kejay Farms, Kejay

Investments Inc.
, Jason Raymond Stallaert,

Kevin
    Cornelius Stallaert, Campbell Soup Company and

Campbell
    Soup Company Canada

Defendants

(
Appellants/Respondents
    by way of cross-appeal
)

BETWEEN

Natures Finest Produce Ltd., Kejay
    Farms

Kejay Investments Inc
., Jason
    Raymond Stallaert

Kevin Cornelius Stallaert

Plaintiffs by
    Counterclaim

(
Appellants/Respondents
    by way of cross-appeal
)

and

R
    & G Draper Farms (Keswick) Ltd

Defendant by
    Counterclaim

(Respondent/Appellant
    by way of cross-appeal)

and

2077583 Ontario Ltd., 1318910 Ontario Ltd., Daniel Ubald
    Bigras

1099039 Ontario Ltd., 2123979 Ontario Ltd., C.H. Robinson,

A.C. Schmieding Produce Co. Inc. and

Nicole Shannon Marie Verhey-Stallaert

Third Parties

Raymond G. Colautti and Anita Landry, for the appellants/respondents
    by way of cross-appeal

Morris Manning, Q.C., for the respondent/appellant by
    way of cross-appeal

Heard:  May 9, 2016

On appeal from the judgment of Justice Mark L. Edwards of
    the Superior Court of Justice, dated July 16, 2016, with reasons reported at
    2015 ONSC 4620.

ENDORSEMENT

[1]

The appellants,
Natures
    Finest Produce Ltd., Kejay Farms and Kejay Investments Inc
. (
Natures Finest)
appeal
    from the motion judges summary judgment. He found Natures Finest and R &
    G Draper Farms (Keswick) Ltd. (Draper Farms) entered into a settlement under
    which Natures Finest was to pay Draper Farms about $189,000 for a load of
    carrots. This represented a reduction from the original purchase price of
    $231,000 to account for the fact that some of the carrots were bad. The
    judgment provides, in para. 1:

THIS COURT ORDERS AND ADJUDGES that the Plaintiffs Motion for
    Summary Judgment as it relates to the settlement is granted against Natures
    Finest Produce Ltd. Kejay Farms and Kejay Investments Inc. in the amount of
    $168,757.32.

[2]

There are two interrelated bases for the appeal. First, Natures Finest
    argues that while the parties agreed on the full amount of the settlement at
    about $189,000, they had not agreed on whether the rate of payment was to be
    $20,000 per month, as Natures Finest proposed, or $40,000 per month, as Draper
    Farms proposed. Natures Finest asserts that this difference is fatal to the
    existence of a settlement, because there was no consensus ad idem on a
    fundamental term.

[3]

Second, in reasoning that the settlement required the payment of $40,000
    a month, the motion judge relied in part on the payment of two cheques by
    Natures Finest to Draper Farms in the amount of about $20,000 that he
    initially inferred were sent following the settlement. After the release of his
    judgment, Natures Finest brought a motion for reconsideration in conjunction
    with a motion to introduce fresh evidence. The fresh evidence tendered by
    Natures Finest on the motion to reconsider showed that the cheques were sent before,
    and not after, the last exchange on the settlement specifying $40,000 per
    month. However, the motion judge dismissed the fresh evidence and the
    reconsideration motions, for reasons reported at 2015 ONSC 6006, on the
    following basis, at para. 27:

Even if I were to relax the due diligence requirement for the
    receipt of the fresh evidence, sought to be adduced by the defendants, in my
    view, it would have made no difference to the ultimate result. As I have
    already noted, once the plaintiff had responded to the defendant's email of
    April 18 with a suggestion of an increased monthly payment of $40,000, no
    response was forthcoming from the defendants, either repudiating this revised
    term of settlement or a demand that the $20,845.68 be returned. While my
    original Reasons may have referred to the absence of any stop payment on the
    cheques, the same analysis in my view holds true with respect to the fact that
    the defendants failed to demand the $20,845.68 be repaid by the plaintiff.

[4]

In his summary judgment decision, the motion judge relied on
Shoom
    v. Acktion Corp
.,
[2003] O.J. No. 5204 (C.A.),
for the
    proposition that the most fundamental term of the settlement between the
    parties is the principal amount, and that it was open to the court to infer
    agreement on the rate of payment from the behaviour of the parties after the
    exchange of emails related to the settlement. He stated, at para. 33:

Ohri's responding email of April 19, 2011 leaves the court with
    no doubt that the most fundamental term of the settlement between the parties
    was that there was an agreement with respect to the principle amount of
    $189,603.00. Ohri's responding email in no way calls that figure into dispute.
    The only issue raised in Ohri's email to Taylor was the terms of payment, i.e.
    $20,000.00 per month versus $40,000.00 per month. Ohri's email of April 19,
    2011 was never responded to by Taylor. Using the same line of analysis that the
    Court of Appeal did in
Shoom
, it is not unreasonable for this court to
    come to the conclusion that the silence on the part of Taylor to the proposed
    terms of $40,000.00 per month implicitly acknowledges an agreement on that
    amount and it is not, in my view, unfair to infer such an agreement.


[5]

Natures Finest has not demonstrated that the motion judge erred
    in relying on
Shoom
in concluding that an implied agreement had been
    reached on the terms of repayment, given his factual findings.

[6]

Draper Farms, the respondent/appellant by cross-appeal, seeks to appeal
    the motion judges failure to dismiss Natures Finests counterclaim for
    damages for the bad carrots. In his reasons for dismissing the reconsideration
    motion, the motion judge said, at paras. 30 and 31:

When the motion was originally heard on
    June 17, 2015, I engaged counsel in discussion as to how best to deal with all
    of the various motions that were before me. I suggested to counsel, that
    dealing with the question of whether or not there was a settlement could
    ultimately assist the parties with respect to the outcome concerning the
    remaining motions, including the viability of the defendants' counterclaim. It
    was conceded by counsel for the defendants during the course of those
    discussions that if I decided the question of settlement in favour of the plaintiffs
    that this
likely
would pose significant difficulties for the defendants with
    respect to their counterclaim. I remain of the view that having now found in
    favour of the plaintiff on the question of whether there was a settlement of
    the debt owed by the defendant to the plaintiff that the most likely outcome
    with respect to the defendants' counterclaim would be that the counterclaim is
    subsumed within that settlement.

While I may be of that view, at this stage of the proceedings,
    it would, in my opinion, be unfair not to allow the defendants to proceed with
    their counterclaim, while at the same time allowing the plaintiffs to take the
    position that the determination of the settlement incorporated implicit terms
    that there would be a mutual release of all potential claims between the
    parties as they existed as of mid-April 2011. (Emphasis in original.)

[7]

Draper Farms argues that the motion judge erred in law in failing to
    dismiss the counterclaim as part of the summary judgment motion, relying on
    this courts decision in
Bogue v. Bogue
,
[1999] O.J. No. 4310, 46 O.R. (3d) 1. There, Rosenberg
    J.A. said, at para. 13:

In my view, there was evidence upon which the motions judge was
    entitled to find that a final settlement of all the issues had been reached on
    December 10th and that there was an agreement in respect to the essential
    terms. While there was no express discussion about a release, the settlement of
    the action implied an obligation to furnish releases:
Fieguth v. Acklands
    Ltd.
(1989), 59 D.L.R. (4th) 114 (B.C.C.A.). At the end of those
    negotiations, the parties had bound themselves to the settlement.

[8]

Natures Finest argues that this court has no jurisdiction over the
    cross-appeal, because the order that Draper Farms seeks to appeal is
    interlocutory, and accordingly the appeal lies to the Divisional Court under s.
    19(1)(b) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43.

[9]

We would not give effect to this argument.

[10]

The judgment under appeal grants Draper Farms motion for summary
    judgment as it relates to the settlement. This is a final order. The difficulty
    in this case is caused by the motion judges reconsideration reasons, which
    were released after the defendants filed their notice of appeal in this court;
    these reasons are inconsistent with the wording of the motion judges formal
    judgment.

[11]

In his supplementary reasons, the motion judge found that it would be
    unfair not to allow the defendants to proceed with their counterclaim. This
    subsequent ruling is inconsistent with his original ruling granting summary
    judgment in favour of the plaintiff on the basis of an agreed upon settlement
    of the parties claims.

[12]

We observe that in their original notice of appeal, one of the appellants
    grounds of appeal related to the dismissal of their counterclaim. They struck
    this ground from their notice of appeal after the motion judge released his
    supplementary reasons. The respondent then moved before Pepall J.A. for an
    extension of time to file a cross-appeal in light of the amendments to the
    notice of appeal.

[13]

In her endorsement granting the extension, Pepall J.A. noted, at para.
    12: the panel may ultimately conclude that the issues raised by the moving
    party do not require a cross-appeal in order to be advanced in this court. This
    is the approach we now take.

[14]

In keeping with the principle that an appeal is from the order and not the
    reasons, there was no need for Draper Farms to cross-appeal from a judgment in
    its favour. This principle is reflected in r. 61.07(1), which states:

61.07 (1) A respondent who,

(a) seeks to set aside or vary the order appealed from; or

(b) will seek, if the appeal is allowed in whole or in part,
    other relief or a different disposition than the order appealed from,

shall, within fifteen days after service of the notice of
    appeal, serve and file a notice of cross-appeal []

[15]

The order under appeal granted the relief that the respondent, as plaintiff,
    was seeking. The respondent need not cross-appeal from that order in order for
    this court to have jurisdiction to review the motion judges subsequent reasons
    permitting the defendants counterclaim to proceed.

[16]

Turning to the substance of the issues raised on the cross-appeal, we
    agree with the respondent that the motion judge ought to have given effect to
    this courts reasoning in
Bogue v. Bogue
. He gave no reasons for
    stating that it would: be unfair not to allow the defendants to proceed with
    their counterclaim. Given the trial judges finding that the parties had
    reached a settlement of the action, he ought to have found an implied
    obligation on the part of the appellants to provide a release of their counterclaim.

[17]

For these reasons, we dismiss the appeal from the motion judges summary
    judgment in the respondents favour. Accordingly, there will be no further
    proceedings on the counterclaim.

[18]

If the parties cannot agree on costs of the appeal and of the
    proceedings in the court below, they may provide this court with written
    submissions no more than 10 pages in length, within 10 days of the release of
    these reasons.


R. A. Blair J.A.

J.
    MacFarland J.A.


P.
    Lauwers J.A.


