



COURT OF APPEAL FOR ONTARIO

CITATION: Com Dev Ltd. and Routes Astroengineering Ltd. v.
    Microsat Systems Canada Inc., 2017 ONCA 372

DATE: 20170505

DOCKET: C61688

Doherty, Benotto and Trotter JJ.A.

BETWEEN

Com Dev Ltd. and
Routes
    Astroengineering Ltd.

Plaintiffs (Respondents)

and

Microsat Systems Canada Inc.

Defendant/Plaintiff by Counterclaim (Appellant)

Douglas D. Langley, for the appellant

Evert Van Woudenberg, for the respondents

Heard and released orally:  April 27, 2017

On appeal from the judgment of Justice David G. Stinson of
    the Superior Court of Justice, dated January 12, 2016.

ENDORSEMENT

[1]

This is a factually complicated contractual dispute.  The trial judge
    heard about 12 days of highly technical evidence.  His detailed reasons span
    189 paragraphs and are found at 2016, ONSC 289.

[2]

Counsel for the appellant presents three arguments.  First, he submits
    that the trial judge should have considered this as a case of mutual repudiation
    of the contract.  He submits that while it was open to the trial judge to
    conclude that the appellant had repudiated the contract in March 2009, the
    trial judge erred in failing to consider, much less find, that the respondent
    had also breached the contract by his conduct after March 2009 and before the
    repudiation as found by the trial judge in February 2010.

[3]

Counsel submits that the trial judge failed to address the question of
    whether the parties had mutually repudiated the agreement.  He suggests that
    the question was raised on the evidence and had to be determined by the trial
    judge to properly adjudicate the claim.  Counsel categorizes the failure to
    address this material issue as an error in law.  We accept that
    characterization for the purposes of this endorsement.

[4]

In our view, the trial judge did address the respondents conduct
    between March 2009 and February 2010.  He described the respondents continuing
    efforts to fully comply with the agreement and he rejected the argument that
    the delays in performance of the agreement constituted a breach of any term of
    the agreement.  In our view, those were factual findings which were open to the
    trial judge and we have not been shown any basis upon which we should interfere
    with that factual finding.  Those findings foreclose the mutual repudiation
    agreement.

[5]

The second argument made by the appellant assumes that only the
    appellant was in breach, but argues that even on that basis, the trial judge
    had to take into account, by way of set-off or otherwise, the many deficiencies
    in the work performed by the respondent.

[6]

We agree with counsel for the respondent that the answer to this
    argument lies in the trial judges approach to the various payments that were made
    under the agreements.  Under the terms of the contract, payments were due when
    milestones were achieved or met.  If the milestone was met, payment was due. 
    If subsequent milestones were not reached, whether because of deficiencies in
    prior work or deficiencies in subsequent work, then payments referable to that
    milestone were not paid.

[7]

The trial judge, in our view, properly addressed deficiencies by
    considering whether the amounts were owed under the particular milestones
    described in the contract.  His approach is fully set out in his reasons and
    accurately summarized at paras. 186 and 187 of his reasons.  His findings are
    fact-intensive and we see no ground upon which to interfere with any of those
    findings.

[8]

The third argument refers to a payment of $22,369, made in relation to
    what was referred to as Milestone 14C, involving a specific battery
    component. The trial judge dealt with this issue at paras. 118-23.  Counsel for
    the appellant submits that the respondents failure to deliver the required
    test results constituted a failure to comply with a prerequisite to payment
    under Milestone 14C.  Counsel notes that in relation to other milestones in
    which tests results were not delivered, the trial judge found against the
    respondents claim.  He submits that the same reasoning compels the rejection
    of the claim for $22,369 in respect of Milestone 14C.

[9]

The trial judge dealt separately with the requirements of each of the
    contractual milestones.  In the particular case of milestone 14C, the trial
    judge found that the required testing had been done and that the battery
    component had successfully passed the test.  All that had not been done was a
    forwarding of these test results to the respondent.  In fact, the trial judge did
    not make a finding one way or the other as to whether the results had been
    forwarded.  In his view, the evidence was uncertain on that point.  The trial
    judge did conclude, however, that but for the appellants actions, the report
    referable to the completed testing would inevitably have been forwarded to the
    appellant.  In our view, it was open to the trial judge to make this finding.

[10]

The
    trial judges finding in respect of Milestone 14C is distinguished from his
    findings in respect of some of the other milestones because in those cases
    (e.g. Milestones 10 and 12) the trial judge made a finding that the respondent
    had failed to do the necessary work or to have the necessary testing completed. 
    As indicated above, in the case of Milestone 14C, the work was done and the
    tests were there to be read by the appellant.  This distinction explains the
    different conclusions reached by the trial judge.  We do not accept the
    argument that there is any inconsistency in his finding in relation to
    Milestone 14C and his finding in relation to the milestones in respect of which
    testing was not done.

[11]

As
    we would reject the three arguments advanced on appeal, the appeal must be
    dismissed.

[12]

The
    respondent is entitled to its costs which are fixed at $24,500, inclusive of
    disbursements and all relevant taxes.

Doherty J.A.

M.L. Benotto J.A.

G.T.
    Trotter J.A.


