



COURT OF APPEAL FOR ONTARIO

CITATION:  Winter v. Sherman Estate, 2018 ONCA 703

DATE: 20180829

DOCKET: C64434

Sharpe, Juriansz and Roberts JJ.A.

BETWEEN

Kerry J.D. Winter, Jeffrey Barkin, Paul T. Barkin
and Julia Winter, personal representative of Dana C. Winter, deceased

Plaintiffs
(Appellants)

and

The Estate of Bernard C. Sherman, deceased, Meyer
    F. Florence,
Apotex Inc. and Joel D. Ulster

Defendants
(Respondents)



Brad Teplitsky, for the appellants

Katherine Kay and Mark Walli, for the respondents

Heard: August 15, 2018

On appeal from the judgment of Justice Kenneth G.
    Hood of the Superior Court of Justice, dated September 15, 2017, with reasons
    reported at 2017 ONSC 5492.


REASONS FOR DECISION

[1]

The appellants appeal
    from the dismissal of their action.
[1]
The motion judge found there was no genuine
    issue requiring a trial that the late Dr. Sherman owed the appellants an
ad hoc
fiduciary duty to look after their
    financial interests. He also
dismissed the action on the ground that the action was
    an abuse of process in that it was an attempt to re-litigate issues determined
    by the appellants unsuccessful action against the
Royal Trust Company
    and Royal Trust Corporation of Canada ("Royal Trust")
, the trustee of
    their parents estates.

[2]

These
    proceedings arise out of a bitter family dispute between the appellants and
    their first cousin, the late Dr. Sherman. The appellants allege Dr. Sherman made
    a commitment to look after their financial interests when the appellants were
    very young children
and
    recently orphaned. Specifically, they contend this
ad hoc
fiduciary duty arose during the
    purchase by Dr. Sherman and Joel Ulster of the assets of the family businesses
    owned by the estates of the appellants parents (the Empire Companies). They plead
    the respondents breached that duty by dishonouring an option agreement given as
    part of the consideration for the purchase that would have allowed the appellants
    to be employed by and acquire 5% of the shares of the Empire Companies. Because
    of the breach, the appellants claim a 20% interest in Apotex Inc. or the
    equivalent in damages.

[3]

The appellants
    submit that the motion judge erred by failing to recognize that the crux of the
    present action against the respondents was whether Dr. Sherman owed them an
ad hoc
fiduciary duty and to identify the
    clear indicia of the fiduciary relationship between them. They say he further
    erred by concluding that the identical issues had been determined by Perell J. in
    the proceedings against Royal Trust and were dispositive of the issues in the
    present action.

[4]

We do not accept these
    submissions.

[5]

The motion judge properly
    considered the criteria for the creation of
an
ad hoc
fiduciary duty as articulated by the
    Supreme Court in
Elder Advocates of Alberta Society v. Alberta
, 2011 SCC 24, [2011] 2 S.C.R. 261.
    Applying those criteria, he carefully analyzed the evidence of the parties
    relationship and the communications between Dr. Sherman and Royal Trust in
    relation to Dr. Shermans acquisition and subsequent sale of his interest in
    the Empire Companies. He did not accept the appellants interpretation of that
    evidence as giving rise to a fiduciary relationship or duty. Rather, he concluded
    that Dr. Sherman did not undertake to look after the appellants interests or ever
    abandon his own self-interest. As the motion judge succinctly put it:

It was up to Royal Trust to look after the plaintiffs interests,
    not Sherman. It is clear from the correspondence, Shermans evidence, the
    purchase agreement itself, and the findings made by Justice Perell that there
    was only so much that Sherman was prepared to do for the plaintiffs if he was
    to become the buyer of the Empire Companies.  Royal Trust knew that.  At the
    end of the day, Sherman was looking after his own interests  not those of the
    plaintiffs. His obligations to the plaintiffs were clearly set out in the
    purchase agreement and eventual option agreement. The obligations, such as they
    were in the contracts, cannot create a fiduciary duty.  There was never a point
    where Sherman relinquished his own self-interest and agreed to act solely on
    behalf of the plaintiffs:
Hodgkinson v. Simms
, [1994] 3 S.C.R. 377,
    at para. 33. To the contrary, Shermans self-interest was always clear. That
    self-interest was made known to Royal Trust and found its way into the
    contracts for the purchase of the Empire Companies.

[6]

There is no error
    in the motion judges meticulous analysis or findings.

[7]

Further, the
    appellants too narrowly construe the doctrine of abuse of process.
This doctrine is flexible
    and unencumbered by the specific requirements of
res judicata
or issue estoppel:
Behn v. Moulton
    Contracting Ltd
.
, 2013 SCC 26, [2013] 2 S.C.R. 227, at para 40;
Toronto (City) v.
    C.U.P.E., Local 79
, 2003 SCC 63, [2002] 3 S.C.R. 77, at para. 42. Where a
    precondition for issue estoppel has not been met, such as mutuality of parties,
    courts have turned to the doctrine of abuse of process to preclude
    re-litigation of the same issue:
C.U.P.E.
, at para. 37. While the doctrine is similar to issue
    estoppel in that it can bar litigation of legal and factual issues that are
    necessarily bound up with the determination of an issue in the prior
    proceeding, abuse of process also applies where issues could have been
    determined:
Danyluk v. Ainsworth Technologies Inc.
, 2001 SCC 44, [2001] 2 S.C.R. 460,
    at para. 54;
Aba-Alkhail v. University of Ottawa
, 2013 ONCA 633, 363 D.L.R. (4th)
    470, at para. 13;
McQuillan v. Native Inter-Tribal Housing Co-Operative Inc.
(1998), 42 O.R. (3d) 46
    (C.A.), at pp. 50 - 51. As such, the doctrine of abuse of process is broader
    than
res
    judicata

and
    issue estoppel and applies to bar litigation that, if it proceeded, would
    violate such principles as judicial economy, consistency, finality and the
    integrity of the administration of justice:
C.U.P.E.
, at para. 37
.

[8]

We agree with the
    motion judge that the whole evidentiary underpinning of this action is the same
    as that of the Royal Trust action and that it would be unfair and an abuse of
    process to allow the appellants to in effect, re-litigate their case, with a
    new theory, to see if this one will succeed where previous theories have
    failed. Moreover, the doctrine of abuse of process applies to prevent
    re-litigation of previously decided facts:
Intact Insurance Company v. Federated
    Insurance Company of Canada
, 2017 ONCA 73, 134 O.R. (3d) 241, at para. 28, leave to
    appeal refused, [2017] S.C.C.A. No. 98;
R. v. Mahalingan
,

2008 SCC 63, [2008] 3
    S.C.R. 316, at para. 46;
C.U.P.E.
, at para 37.

As
    the motion judge determined, the relief and issues put forward by the appellants
    in these proceedings arise from the same relationships and subject matter that
    have already been dealt with by Perell J. and the Court of Appeal in the Royal
    Trust action.

[9]

We do not accept
    the appellants argument that their present action encompasses more than the
    interpretation of the option agreement and that the existence of a fiduciary
    duty overlays any obligations that Dr. Sherman had under that agreement.  As
    the motion judge observed, Perell J. determined that the limited, qualified,
    contingent and conditional option agreement expressed precisely what had been
    agreed upon by the parties and that Dr. Sherman was not prepared to offer
    anything further.

[10]

As a result, we
    find no error in the motion judges determination that the appellants present
    action is an abuse of process.

Disposition

[11]

Accordingly, the
    appeal is dismissed.

[12]

The respondents are
    entitled to their costs of $60,000, the amount the parties agreed to be
    reasonable, including disbursements and all applicable taxes.

Robert J. Sharpe J.A.

R.G. Juriansz J.A.

L.B. Roberts J.A.





[1]

By notice dated August 8, 2018, the respondents abandoned
    their costs appeal.


