



COURT OF APPEAL FOR ONTARIO

CITATION: Gold Leaf Products
    Ltd. v. Pioneer Flower Farms Ltd., 2015 ONCA 365

DATE: 20150522

DOCKET: C59064

Strathy C.J.O., LaForme and Tulloch JJ.A.

BETWEEN

Gold Leaf Garden Products Ltd.

Plaintiff (Respondent)

and

Pioneer Flower Farms Ltd.
,

Henk Sikking Sr. and
    Henk Sikking Jr.

Defendants (
Appellant
)

Joanna Nairn and Jonathan Rosenstein, for the appellant

R. Leigh Youd, for the respondent

Heard: May 15, 2015

On appeal from the judgment of Justice J. Christopher
    Corkery of the Superior Court of Justice, dated June 12, 2014.

ENDORSEMENT

[1]

Pioneer Flower Farms Ltd. (Pioneer) and Gold Leaf Garden Products Ltd.
    (Gold Leaf) entered an agreement whereby Gold Leaf would solicit new
    customers for Pioneer. In return, Pioneer was to pay Gold Leaf a 5% commission
    on sales to customers it brought in. Pioneer later terminated the agreement.

[2]

The parties disagreed on whether Pioneer was required to pay Gold Leaf
    ongoing commissions post-termination for sales to those customers Gold Leaf had
    brought in. Gold Leaf brought an action seeking the commissions for sales
    following the termination of the agreement.

[3]

On Gold Leafs motion for summary judgment, the motion judge held that
    the agreement required Pioneer to continue to pay Gold Leaf the commissions.
    Pioneer appeals and raises three issues, which we conclude have no merit.

(i)

Interpretation of the Agreement

[4]

On the first issue  the interpretation of the agreement  the motion
    judge found that para. 5 could be read in two alternative ways. First, that
    commission will be paid only during the period of the agreement. Or second,
    that commission will be paid only for new clients brought to Pioneer during the
    period of the agreement. Read in the latter way, para. 5 would not terminate
    commission from those customers recruited during the agreement who continued to
    purchase from Pioneer. The motion judge chose the second reading.

[5]

Pioneer says that given the two possible readings, the motion judge
    should have found ambiguity. Once he found ambiguity, the rules of construction
    should have led the motion judge to treat para. 5 as a qualification of the
    general term providing for the payment of commissions. We disagree.

[6]

The motion judge found that the first interpretation creates
    inconsistencies between para. 5 and the remainder of the agreement,
    specifically paras. 4 and 7. He found that the second interpretation was
    correct because it gives reasonable meaning to each of the terms of the
    agreement. In other words, he determined the objective intentions of the
    parties, which is the goal of contractual interpretation:
Creston Moly
    Corp. v. Sattva Capital Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, at para.
    49.

[7]

Pioneer has not satisfied us that the motion judge made any error.
    Accordingly, the motion judges interpretation is entitled to deference and
    this ground of appeal is dismissed.

(ii)

Non est factum

[8]

On the second issue of
non est factum
, the law says a person
    who fails to exercise reasonable care in signing a document is precluded from
    relying on this defence:
Marvco Color Research Ltd. v. Harris
, [1982]
    2 S.C.R. 774, at p. 785. Henk Sikking Jr. did not read the agreement when he
    signed it on behalf of Pioneer. He accordingly failed to exercise reasonable
    care in signing the agreement. The motion judge was correct in holding that the
    defence was unavailable to Pioneer. This ground of appeal is dismissed.

(iii)

Set-off

[9]

Finally, on the third issue of set-off, Pioneer submits that the motion
    judge, prior to hearing the summary judgment motion, misdirected Pioneers
    counsel such that he reasonably believed the court would not decide the
    question of equitable set-off on summary judgment. Because of this reasonable
    belief, Pioneer says that it led no evidence on the issue of set-off. It was
    therefore denied natural justice when the motion judge dismissed the defence.

[10]

Pioneer
    has filed what it refers to as fresh evidence consisting of its motion
    solicitors affidavit and his understanding as to what transpired before the
    court below. Transcripts of the proceedings on December 7, 2012 are attached as
    appendices. While the affidavit is not proper fresh evidence, we take no issue
    with the filing of the transcripts for consideration on this appeal. Pioneers
    factum and oral arguments sufficiently convey the interpretation that Pioneer
    submits this court should take from the transcripts. We disagree with Pioneer.

[11]

The
    motion for summary judgment did not proceed on December 7, 2012 as scheduled.
    However, at the hearing, the parties and the motion judge discussed the
    possibility of bifurcating the proceedings between set-off and the rest of the issues.
    Gold Leaf sought to bifurcate the proceedings, to which Pioneer said it could
    not consent. The motion judge did not agree to bifurcate and did not appear to
    see bifurcation as necessary. Furthermore, the order from the December 7
    hearing does not order bifurcation.

[12]

On
    April 10, 2013, Gold Leaf filed a Fresh as Amended Notice of Motion for summary
    judgment. Under grounds, the Notice asserted that [t]here is no genuine issue
    requiring a trial with respect to the defence. The Notice did not identify any
    particular defences. It requested summary judgment or, if appropriate, partial
    summary judgment. In our view, a reasonable solicitor would have read the
    Notice as denying all defences, set-off or otherwise, and asking for as much
    relief on summary judgment as possible.

[13]

In
    sum, as Pioneer did not agree to bifurcation and the motion judge did not order
    it, Pioneer should have known that set-off had not been split off from the rest
    of the issues. Taking the Notice and the absence of a bifurcation order together,
    Pioneer should have known that set-off was at play in the summary judgment
    motion.

[14]

Pioneer,
    in response to the summary judgment motion, was required to put its best foot
    forward  to lead trump or risk losing  and it failed to do so. It was not
    denied procedural fairness with respect to equitable set-off. It knew or ought
    to have known that this issue was before the motion judge.

Disposition

[15]

For
    these reasons, the appeal is dismissed. Gold Leaf is awarded its costs of the
    appeal in the agreed upon amount of $12,500, inclusive of disbursements and
    HST.

G.R. Strathy C.J.O.

H.S.
    LaForme J.A.

"M.
    Tulloch J.A."


