



COURT OF APPEAL FOR ONTARIO

CITATION: Distributions Katrina Inc. v. Enroute Imports Inc.,
    2019 ONCA 441

DATE: 20190527

DOCKET: C66073

Feldman, Paciocco and Fairburn JJ.A.

BETWEEN

Distributions Katrina
    Inc.

Plaintiff (Respondent)

and

Enroute Imports Inc. and Vincent P. Pileggi, also
    known as Vincent Pileggi

Defendants (Appellants)

AND BETWEEN

Enroute Imports Inc. and Vincent P. Pileggi, also
    known as Vincent Pileggi

Plaintiffs by Counterclaim (Appellants)

and

Distributions Katrina
    Inc. and Robert Geoffrey

Defendants to the Counterclaim (Respondents)

Damien Buntsma and Elyse Calvi, for the appellants

Robert Malen, for the respondents

Heard and released orally: May 17, 2019

On appeal from the judgment
    of Justice Douglas K. Gray of the Superior Court of Justice, dated September
    25, 2018, with reasons reported at 2018 ONSC 5644.

REASONS FOR DECISION

[1]

This is an appeal from summary judgment on the respondents claim
    without set-off or a stay pending the counterclaim. The appellants say that the
    motion judge erred in three broad respects.

[2]

First, the appellants argue that the motion judge failed to apply the
    appropriate test on summary judgment by failing to appreciate the true nature
    of the arrangement between the parties, particularly as it related to the
    defence of equitable set-off. The appellants suggest that the motion judge
    failed to appreciate that the claim and counterclaim are inextricably linked.
    We do not agree.

[3]

The motion judge specifically addressed that legal issue and accurately
    summarized the law. The appellants do not suggest otherwise. Although the
    motion judge determined that the counterclaim requires a trial because there
    was at least a thin case underlying the counterclaim, he decided that there
    was no reason to deny the respondent judgment in the interim. He concluded that
    there was no equitable ground on which to protect the appellants from the
    respondents claim before the counterclaim proceeded.

[4]

The motion judge understood the law on the defence of equitable set-off
    and applied it properly to the facts. We agree with his reasoning on this
    point. The two claims as pled and as amplified by the factual record are not so
    closely connected that it would be manifestly unjust to allow the respondent to
    enforce payment. As found by the motion judge, the counterclaim does not go to
    the root of the respondents claim.

[5]

Second, the appellants argue that the motion judge erred in granting
    what is described as partial summary judgment in this case. We do not agree
    with that characterization. The normal concerns that arise in relation to
    granting partial summary judgment do not arise here. No potential for inconsistency
    has been demonstrated. We decline to interfere with the motion judges decision
    to grant judgment on the claim and to decline to stay that judgment.

[6]

Finally, the appellants argue that the motion judge erred when he
    pierced the corporate veil and made the individual appellant liable. Although
    there is a lack of reasoning on this issue, the circumstances of this case support
    the motion judges conclusion regarding personal liability, including:

a.

the individual respondent is the president of the corporate appellant company;

b.

he acknowledges that the company is owned by a holding company, Vincent
    Pileggi Family Trust, of which he and his wife are trustees;

c.

he acknowledges he is the decision-maker insofar as the corporate
    appellant is concerned; and

d.

he acknowledges that he personally gave the direction to stop payment on
    three cheques to the respondent after having received the subject product and continuing
    to sell that product, all while additional orders were being placed.

[7]

The appeal is dismissed with costs fixed at $15,000 to the respondent inclusive of disbursements and HST.


K. Feldman J.A.
David M. Paciocco J.A.
Fairburn J.A.


