



COURT OF APPEAL FOR ONTARIO

CITATION:
Salvatore v. Tommasini, 2021 ONCA 691

DATE: 20211006

DOCKET: C68972

Benotto, Brown and Harvison
    Young JJ.A.

BETWEEN

Alberino Albert Salvatore, 2232465 Ontario Limited,

and Sprint Mechanical Inc.

Plaintiffs
    (Appellants)

and

David
    Tommasini, Anna Rucchetto, Four Seasons Aviation Ltd.,

and Sky Ship
    Capital Corp.

Defendants
    (Respondents)

Alan G. McConnell, for the appellants

Stephen Dale Denis, for the respondents

Heard: September 8, 2021 by video conference

On
    appeal from the judgment of Justice Edward M. Morgan of the Superior Court of
    Justice, dated December 9, 2020, with reasons reported at 2020 ONSC 7619.

REASONS FOR DECISION

INTRODUCTION

[1]

The
appellants,
Alberino
    Albert Salvatore, 2232465 Ontario Limited, and Sprint Mechanical Inc.,
appeal the order of the motion judge granting summary judgment dismissing their
    action against the respondents
David Tommasini, Anna
    Rucchetto, Four Seasons Aviation Ltd., and Sky Ship Capital Corp.

[2]

The appellants and some of the respondents entered into a series of
    documents regarding the acquisition and operation of a helicopter: a June 24,
    2016 Letter of Intent (the LOI); an LOI amending agreement dated July 15,
    2016 (the July Letter Agreement); a September 14, 2016 Aircraft Management
    Agreement (the AMA); and a September 14, 2016 AMA amending agreement (the September
    Letter Agreement).

[3]

In the action, the appellants alleged that the agreements contained a
    binding obligation on the part of the respondents to pay for one-half of the
    acquisition cost of the helicopter (the Buy-in Claim). As well, the
    appellants alleged that the respondents breached other provisions in the documents
    causing damage to the appellants.

[4]

The motion judge granted summary judgment dismissing the action. The
    appellants appeal. At the hearing, we dismissed the appeal with reasons to
    follow. These are those reasons.

THE MAIN GROUNDS OF APPEAL

[5]

The appellants advance two main grounds of appeal: (i) the motion judge
    erred in finding that the respondents were not subject to an enforceable
    promise to pay the appellant half of the acquisition cost of the helicopter;
    and (ii) the motion judge erred in dismissing the action in its entirety,
    instead of permitting some of the claims to proceed to trial.

The Buy-in Claim

[6]

Article 14.13 of the AMA  the so-called entire agreement clause  provided,
    in part, that [t]his Agreement and the matters referred to herein constitute
    the entire agreement between Owner and Operator regarding the subject matter
    hereof. The clause went on to state that the AMA superseded and cancelled all
    prior agreements with respect to or in connection with the subject matter of
    this Agreement.

[7]

We accept the appellants submission that the motion judge erred in law
    by holding that art. 14.13 of the AMA expressly cancelled the LOI and July
    Letter Agreement. In reaching that conclusion, the motion judge failed to interpret
    art. 14.13 within the context of the entire AMA, contrary to the general
    principles of contract interpretation: Geoff R. Hall,
Canadian
    Contractual Interpretation Law
, 3rd ed. (Toronto: LexisNexis, 2016),
    §2.2.1.

[8]

One recital to the AMA specifically stated:

AND WHEREAS the principals of the Operator, David Tommasini and
    Anna [Rucchetto], have agreed to acquire, and the principal of the Owner,
    Albert Salvatore, have agreed to convey, a direct or indirect 50% interest in
    the Owner, or the successor owner of the Aircraft, as the case may be (the
    Buy-in).

[9]

Accordingly, by its terms the AMA recognized the existence of a Buy-in
    arrangement amongst some of the parties outside of the four corners of the AMA.
    When art. 14.13 is read in that context, it is clear that the subject matter
    of the AMA dealt with the operation of the helicopter, not the Buy-in
    obligations that existed between the parties.

[10]

However,
    in our view that error in law was of no consequence. We see no reversible error
    in the motion judges conclusion, at paras. 21 and 22, that the LOI and July
    Letter Agreement lacked sufficient material facts to characterize them as legal
    contracts, especially given 
the absence of the fundamental
    business terms on which the co-ownership of the Sikorsky and the jointly owned
    business of the parties in operating the helicopter would be built.

[11]

When the Buy-in and Owners Agreement sections of the LOI are read
    together, they provide: (i) the respondents agreed to pay 50% of the
    helicopters acquisition costs after one year, termed the Buy-in Amount; (ii)
    upon receipt of the Buy-in Amount, Albert Salvatore would convey to the
    respondents a one half-interest in the entity that owned the helicopter, termed
    the Buyer; (iii) while the legal form and structure of the ownership of the
    helicopter had not yet been settled, the end result is that the ownership and
    operation of the Aircraft is to be as a separate stand-alone business, directly
    or indirectly owned and controlled by Albert and David/Anna, each as to 50%;
    (iv) the LOI referred to the entity that owned the helicopter as the Owner;
    and (v) Albert and David/Anna shall enter into a definitive agreement in
    respect of the Owner (which will be the form of a Partnership Agreement,
    Shareholders Agreement or some other form, depending on the final structure of
    the Aircraft ownership).

[12]

In other words, the LOI contemplated a quid pro quo under which
    the respondents would, after one year, pay 50% of the acquisition costs of the
    helicopter in return for which they would receive a one-half interest in the
    entity that ultimately owned the helicopter and operated the stand-alone helicopter
    business. The rights and obligations of those with an interest in the Owner
    were to be set out in a definitive Owners Agreement.

[13]

In his reasons, the motion judge observed, at para. 23, that

[o]n its face, the LOI made any further business dealings
    with respect to the helicopter conditional on the negotiation of what it dubbed
    a definitive agreement settling all material aspects of the separate
    stand-alone business of owning and operating it. In our view, that was an
    accurate interpretation of the LOI.

[14]

In the result, the parties never entered into an Owners Agreement.
    In the absence of such an agreement, there was no certainty about what bundle
    of ownership rights and obligations the respondents would receive or be subject
    to upon their payment of the Buy-in Amount. Put colloquially, the parties never
    agreed on the quid that the respondents would receive in return for their
    quo  namely, their payment of the Buy-in Amount. In those circumstances, we
    see no reversible error in the motion judges conclusion that there was no
    genuine issue requiring a trial with respect to the appellants Buy-in Claim
    and breach of the duty of good faith claim.

The AMA and Internal Cost Claims

[15]

In
    their statement of claim, the appellants also alleged two other types of breach
    of contract. First, the appellants pleaded that the respondents failed to
    reimburse them for the respondents costs associated with the importation,
    registration and adding the Helicopter to the Four Seasons AOC: Statement of
    Claim, para. 31 (the Internal Cost Claim). Second, the appellants alleged
    that the respondents had breached certain provisions of the AMA, including one
    dealing with a short form lease: Statement of Claim, paras. 38, 41 and 47 (the
    AMA Claims). In para. 50 of their statement of claim, the appellants pleaded
    that, as a result of these breaches, they had suffered damages estimated at
    $225,000 in respect of costs of finding a replacement aircraft on a temporary
    basis and eventually a new hangar facility, pilot and maintenance for the
    helicopter, as well as an estimated $300,000.00 in future lost profits from
    the Venture.

[16]

In
    granting summary judgment, the motion judge dismissed the action in its
    entirety, including the AMA and Internal Cost Claims. However, the motion
    judges reasons did not address those claims. They should have. Nonetheless,
    that omission does not alter the result in this case.

[17]

This
    was a summary judgment motion. The respondents notice of motion clearly sought
    the dismissal of the entire action. In response to such a request for relief,
    the appellants were obliged to put their best foot forward. Yet, the appellants
    failed to adduce any evidence particularizing or supporting their pleaded AMA
    and Internal Cost Claims.

[18]

In
    his affidavit filed on behalf of the appellants, Mr. Ian Bergeron made the general
    statement that [t]he refusal to pay the Buy-in was followed by further
    breaches of the agreement between the parties by the defendants, resulting in
    damages being suffered by the plaintiffs as detailed in the pleadings herein.
    Mr. Bergeron did not specify the damages suffered or adduce any evidence to
    support or quantify such damages. As a result, there was no evidence before the
    motion judge that would have permitted him to conclude that there was a genuine
    issue requiring trial regarding any damages suffered by the appellants in
    respect of their AMA and Internal Cost Claims. Accordingly, we see no error in
    the motion judges dismissal of the action as a whole.

DISPOSITION

[19]

For
    the reasons set out above, the appeal is dismissed.

[20]

In accordance with the agreement of the parties, the respondents
    are entitled to their partial indemnity costs of the appeal fixed in the amount
    of $43,663.20, inclusive of disbursements and applicable taxes. The parties
    have agreed that the appellants shall pay those costs of the appeal, together
    with the costs awarded below, on or before December 8, 2021.

M.L.
    Benotto J.A.

David
    Brown J.A.

Harvison
    Young J.A.


