Miletic v. Jaksic, 2014 ONSC 5043 (CanLII)

CITATION: Miletic v. Jaksic, 2014 ONSC 5043

COURT FILE NO.: CV-11-2125-00

DATE: 2014-08-29
ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

BOZIDAR MILETIC

Anser Farooq, for the Plaintiff

Plaintiff

– and –

GEORGE JAKSIC, (THE ESTATE OF) NADA JAKSIC, MICRO PRECISION MACHINING LIMITED AND JAMES WHEELER also known as JAMES S. B. WHEELER also known as JAMES STUART BOTHWELL WHEELER

Perry Cheung, for the Defendants George Jaksic, (The Estate of) Nada Jaksic, and Micro Precision Machining Limited

Ian Latimer, for the defendant James Wheeler

Defendants

HEARD: April 24, 2013,

at Brampton, Ontario

Price J.

Reasons For Order

NATURE OF MOTION
[1] Bozidar Miletic emigrated from Slovenia to Canada in 1996. In 2002, he began working as a machinist for George and Nada Jaksic, also natives of Slovenia, at a machine shop that the Jaksics had owned and operated since 1984.

[2] On September 21, 2006, Mr. Miletic entered into an agreement with the Jaksics whereby he believed the machine shop business, Micro Precision Machining Limited, was sold to him. In fact, the shares of the business were never transferred to him, and the Jaksics continued to manage it.

[3] Mr. Miletic, believing that he now owned the machine shop business, and that the Jaksics worked for him, made payments to them as salary and/or installment payments of the purchase price for his shares. It wasn’t until Nada Jaksic died in February 2010 that Mr. Miletic first gained access to the business’ financial records, and learned that it had owed substantial tax arrears, even when he had entered into his agreement to buy it, and was in dire financial difficulty.

[4] When Mr. Miletic consulted James Wheeler, the lawyer he thought had acted for both him and the Jaksics in the sale of the business to him, he discovered that Mr. Wheeler had represented only the Jaksics, and was now not prepared to assist him. He therefore retained another lawyer, who began the present action on his behalf, to recover the funds he had paid to the Jaksics.

[5] Mr. Jaksic and his wife’s estate counterclaimed for the unpaid balance of the purchase price for the business. They now bring the present motion, pursuant to Rule 20.04 of the Rules of Civil Procedure,[1] for summary judgment dismissing Mr. Miletic’s action against them on the ground that it is statute barred and discloses no cause of action. They also move for summary judgment against Mr. Miletic on their counterclaim.

BACKGROUND FACTS
[6] From 1984 to September 21, 2006, George Jaksic (“Mr. Jaksic”) and Nada Jaksic (“Ms. Jaksic”) owned Micro Precision Machining Limited (“Micro Precision” or “the company”), which operated a custom machining business (“the machine shop business” or “the business”). Mr. Jaksic worked for Micro Precision as a machinist and Ms. Jaksic handled its books and administration.

[7] In 2002, Bozidar Miletic (“Mr. Miletic”) began working as a machinist for Micro Precision. He is a certified machinist who has a grade 8 education. He immigrated to Canada from Slovenia in 1996. Mr. Miletic had little previous business experience, having operated only a sole proprietorship without corporate documents, such as a minute book, security agreements, and share certificates. Mr. and Ms. Jaksic were aware that he was not experienced in operating a company.

[8] Soon after Mr. Miletic was hired, he began making inquiries about buying Micro Precision. The discussions became more serious in 2005, and in 2006, the Jaksics retained a lawyer, James Wheeler, for the limited purpose of preparing an Agreement of Purchase and Sale for their sale of the company to Mr. Miletic. Mr. Wheeler has informed the Law Society that he never acted outside the scope of his limited retainer and that, in particular, he was never retained to complete a share transfer and took no steps to do so. Mr. Wheeler later stated in a letter dated August 5, 2010, that he was retained by both parties to draft the Agreement, but now says that he never, in fact, represented Mr. Miletic.

[9] Mr. and Ms. Jaksic brought Mr. Miletic to Mr. Wheeler’s office on September 21, 2006. Mr. Wheeler states that Mr. Miletic was not supposed to be there, as Mr. Wheeler did not represent him. He states that he was not expecting to see Mr. Miletic, although Mr. Miletic states that Mr. Wheeler did not appear to be surprised to see him or ask him to leave when he arrived with the Jaksics.

[10] Mr. Miletic does not remember Mr. Wheeler mentioning that there would be a conflict of interest if he represented both the Jaksics and Mr. Miletic. Instead, he answered all of Mr. Miletic’s questions and Mr. Miletic says that he believed at the time that Mr. Wheeler was representing him. He never signed anything that stated otherwise.

[11] Mr. Wheeler says that the Agreement of Purchase and Sale that he prepared and reviewed with the parties (“the Agreement”) was not, as far as he was concerned, intended to be a final agreement between them or to effect a share transfer. He says that there were no authorizations or directions of any sort prepared or signed. He says that he was expecting the Jaksics to return later to take these steps and to update the minute book, but that Ms. Jaksic called him after September 21, 2006, and informed him that no further work was required in connection with the sale of Micro Precision.

[12] Mr. Miletic says that when the parties signed the Agreement, both the Jaksics and Mr. Wheeler advised him that it was a standard business agreement and that it was not necessary for him to have another lawyer review it. He says that Mr. Wheeler reviewed the Agreement in detail with him and told him that he was there to answer any questions he had. Mr. Miletic states that his English has improved since he immigrated to Canada but it is not his mother tongue and he has difficulty understanding legal contracts.

[13] Mr. Miletic says that neither Mr. Jaksic nor Mr. Wheeler advised him that he should have his own counsel review the Agreement or obtain independent legal advice in connection with it. The Agreement is silent as to independent legal advice, and no documentation has been produced that shows that Mr. Miletic was ever advised to get independent legal advice.

[14] Mr. Miletic and the Jaksics signed the Agreement while they were at Mr. Wheeler’s Office on September 21, 2006. The Agreement provided that the Jaksics would transfer the shares of Micro Precision to Mr. Miletic, effective immediately, for a purchase price of $250,000, payable over time. Mr. Wheeler dated the Agreement and signed it as a witness.

[15] Mr. Miletic says that the Jaksics informed him when he signed the Agreement that Micro Precision would be free and clear of all liabilities such as taxes. Neither they nor Mr. Wheeler advised him at that time that it owed a significant tax debt.

[16] Mr. Wheeler claims that he never sent an account to the Jaksics regarding the sale of Micro Precision to Mr. Miletic. However, in a letter dated January 24, 2007 to Micro Precision, Mr. Wheeler wrote, “we enclose herewith our Statement of Account with respect to this matter and the transfer of shares to Bozidar Miletic, both of which we trust you shall find satisfactory”. Mr. Jaksic remembers sending a cheque to Mr. Wheeler in payment for his work in preparing the Agreement.

[17] Mr. Miletic acknowledges that no representations or warranties, verbal or written, were made to him to induce him to buy Micro Precision, and the Agreement does not contain any representations or warranties.

[18] The Agreement provides that of the purchase price of $250,000, $30,000 was to be paid on the date of closing. There is no dispute, however, that only $10,000 was paid on that date. An additional $20,000 was paid on February 5, 2007. The balance of $220,000 was to be paid by what the Jaksics characterize as a “vendor loan” under the following terms (the “Payment Plan”):

a. $4,000 per month, blended principal and interest, payable for 59 months.

b. One final payment in the amount of $850.75 at the end of the term;

c. Interest at 3% per annum

[19] At the end of the term set out in the Payment Plan, $16,850.75 in interest would have been paid, and a total of $236,850.75 would have been paid in principal and interest. Mr. Jaksic states that of this amount, Mr. Miletic paid $112,000 (28 payments of $4,000.00). His last payment was for the January 6, 2009 installment, which he did not make until March 16, 2009.

[20] Mr. Miletic made no payments after March 16, 2009, and there is no dispute that the installments due from February 6 to August 6, 2009, and the final payment, were never paid. Mr. Jaksic calculates that he is owed $124,850.75, being $236,850.75 less the $112,000 that was paid.

[21] Mr. Jaksic states that on September 21, 2006:

1. He and Ms. Jaksic signed director and shareholder resolutions authorizing the sale of Micro Precision, adopting the Agreement, and electing Mr. Miletic as director and president/secretary/treasurer of the company. Micro Precision’s corporate profile report shows Mr. Miletic as the Director and President of the company beginning September 6, 2006.

2. He and Ms. Jaksic tendered their resignations as directors and officers of Micro Precision.

[22] Mr. Miletic states that, contrary to Mr. Jaksic’s assertions, the Jaksics did not resign as directors of Micro Precision until a few years after the parties signed the Agreement. He states that as of 2010, the Jaksics continued to appear as its directors. He notes that they claim to have resigned as directors in 2006 but have offered no proof of this, other than unsigned documents. Mr. Jaksic states that the signed documents were placed in the company’s minute-book, which was given to Mr. Miletic after the Agreement was signed. Mr. Miletic says that he never received a minute book from the Jaksics or from Mr. Wheeler. In fact, he says that he did not know what a minute book was, or if the company had one, until after Ms. Jaksic’s died and his dispute with Mr. Jaksic arose.

[23] After the Agreement was signed on September 21, 2006, Mr. Miletic believed that he had authority to bind Micro Precision to legal obligations. He opened a new bank account for the company, for which he was the sole signing officer. He acknowledges that neither Mr. nor Ms. Jaksic signed any cheques for the company after he opened the new account. Additionally, in May 2010, Mr. Miletic signed a lease on behalf the company.

[24] After signing the Agreement on September 21, 2006, the Jaksics continued to work for Micro Precision. Mr. Jaksic says that they did so for the benefit of Mr. Miletic, to help him in his transition into the management of the business, and to maintain relationships between the company and its customers. Mr. Miletic acknowledges that after signing the Agreement, he considered himself to be the company’s owner, with authority to terminate Mr. and Ms. Jaksic’s employment if he wanted to, and that he did terminate them or ask them to refrain from helping him perform these functions before 2010.

[25] Mr. Miletic and Mr. Jaksic agree that before this dispute arose, Mr. Miletic got along very well with the Jaksics. Mr. Miletic says that he trusted the Jaksics, as they were directors of Micro Precision and had vast experience in running the business. He says that he had no reason to believe that they would harm him or lie to him.

[26] In spite of the position that Mr. Miletic ostensibly assumed in September 2006 as owner of Micro Precision, his role in its administration was, in fact, minimal. He signed the cheques that Ms. Jaksic gave to him for signing. Mrs. Jaksic handled the company’s finances and the administration of its business. While the parties disagree as to whether she signed cheques, it is not disputed that she signed other documents on behalf of the company, and made payments with the cheques that she had prepared for Mr. Miletic’s signature.

[27] Mr. Miletic says that the Jaksics maintained almost complete control of Micro Precision and its day to day operations. In particular, he did not have any information regarding taxes paid by the company. When Mr. Miletic did make inquiries into the company’s finances, the Jaksics told him that everything was being taken care of. Mr. Miletic does not understand financial data very well, and trusted both the company’s accountant and the Jaksics. He continued to perform his role as a machinist and, on occasion, signed cheques on behalf of the company that Ms. Jaksic had prepared and given to him for signing.

[28] The Jaksics never received any compensation directly linked to the performance of Micro Precision. The Agreement provided that they would receive $25 per hour for their continued employment with the company. They became independent contractors, and payments were made to them through their corporation, Kovinar Inc., as appears from the address and Kovinar’s corporation profile report. They were collectively paid approximately $1,000 per week from September 21, 2006 to April, 2010.

[29] Mr. Miletic says that the Jaksics advised him that any money earned by the business would be put towards his payment for the acquisition of the company’s shares. He therefore did not question the fact that he did not receive a salary for the first year or so after the Agreement was signed.

[30] By March 2009, owing to the effect of the recession on Micro Precision, Mr. Miletic had to choose between paying salaries to the Jaksics or making payments due under the Payment Plan for the purchase of his shares. Mr. Jaksic says that he and his wife advised Mr. Miletic that he was required to pay their salaries before making payments towards the Payment Plan.

[31] Mr. Jaksic did not ask for the payments owing under the Payment Plan after March 2009, as he understood that the recession had hit the company hard and there was no money coming in. He told Mr. Miletic not to worry about the payments. As it was, because Ms. Jaksic prepared the cheques for Mr. Miletic to sign, he continued to pay their salaries until May 2010, shortly after Ms. Jaksic had died, when his relationship with Mr. Jaksic broke down, and he was unable to make any further payments towards the Payment Plan.

[32] Mr. Miletic says that he was unsure why he was required to pay the Jaksics a salary after the first 6 months. The Jaksics referred him to Section 9 of the Agreement, and told him that he was required to pay them in accordance with the Agreement. Mr. Miletic says that he continued to trust the Jaksics and to respect them, as they are elderly, and from his native Slovenia, and had intimate knowledge of the company’s affairs. He continued to deal with them diplomatically, even when he asked them to leave. When they threatened legal action, he did not want to jeopardize the investment he had already made in the company.

[33] Mr. Jaksic says that Mr. Miletic’s payments to him and his wife were consistently late. From Mr. Miletic’s viewpoint, he was doing well, despite the tough economic times, he continued paying the Jaksics their salaries.

[34] Mr. Miletic first had full access to Micro Precision’s records after Nada Jaksic’s death in February 2010. Until then, the Jaksics were taking care of the company’s finances, including tax-related matters, banking, and budgeting.

[35] At the time of Ms. Jaksic’s death, Mr. Miletic was engaged to be married to Aurelia Miletic, whom he later married on December 12, 2012. When Ms. Jaksic died, Mr. Miletic brought Aurelia to work at Micro Precision so that she could handle the matters that Ms. Jaksic had formerly dealt with. It was at that time that he first learned that the company was in a dire financial position. When he looked at some of the company’s tax records, he realized the business had a huge tax debt.

[36] Soon after Mr. Miletic got access to the financial and tax documents, the Jaksics’ daughter, Kathy Costa, took all of the records and advised Mr. Miletic that she would prepare the company’s tax returns. She did not return the documents to him, and it was not until later that he learned, from correspondence he received from the Canada Revenue Agency, the full extent of the company’s tax debt. He then learned that its significant tax debt had existed even in 2006, when he had signed the Agreement.

[37] September 21, 2006, when the Agreement was signed, was the last time Mr. Miletic met with Mr. Wheeler or heard from him. They had no further contact until June 25, 2010, when Mr. Wheeler sent Mr. Miletic a letter on behalf of the Jaksics demanding payment of the balance of the purchase price for the shares.

[38] Mr. Wheeler says that it was as at Kathy Costa’s request that he sent the demand letter to Mr. Miletic. In the letter, he told Mr. Miletic that he represented the Jaksics and mentioned for the first time a General Security Agreement, which Mr. Miletic is alleged to have signed. Mr. Miletic says that he was never, in fact, asked to sign a promissory note or general security agreement, and that no such note or agreement has been produced to him. Mr. Miletic says that he first learned from this letter that Mr. Wheeler did not represent him, and thereupon consulted another lawyer, Mr. Garvey.

[39] Mr. Wheeler wrote to Mr. Jaksic on August 5, 2010, advising him that he could not act for him, either. In that letter, Mr. Wheeler confirmed that he had been retained by both parties to draft the Agreement, but it appears that he never informed Mr. Miletic that he had not completed the sale of Micro Precision by effecting a share transfer to Mr. Miletic.

[40] Mr. Miletic retained Mr. Garvey to handle his case, and it was at that time that he learned that there were documents that should have been given to him when he signed the Agreement and that, other than the Agreement itself, none of the documents required to give effect to the sale of shares had ever been signed. He also learned that the Jaksics had never resigned as directors of the company.

[41] Mr. Wheeler has said that Mr. Miletic took the minute book when the Agreement was signed in 2006. However, in his August 5, 2010 letter, he says that both Mr. Miletic and Mr. Jaksic took the minute book. Mr. Wheeler now acknowledges that there cannot be more than one minute book, and says that he mis-typed his letter. Mr. Miletic submits that Mr. Wheeler’s position that Mr. Miletic had the minute book does not conform with his position that he was expecting the Jaksics to return to update the minute book.

[42] In 2010, Mr. Miletic initiated a complaint against Mr. Wheeler with the Law Society of Upper Canada. The Law Society later reprimanded Mr. Wheeler.

[43] Mr. Miletic says that as soon as Mr. Jaksic and his daughter realized that Mr. Miletic was aware of the company’s financial problems, they took steps to close the business.

[44] Mr. Jaksic moves for summary judgment dismissing Mr. Miletic’s action. Additionally, Mr. Jaksic and his wife’s estate move for judgment for $124,850.75 on their counterclaim, and for costs on a substantial indemnity scale.

ISSUES
[45] The Court must determine whether there is a genuine issue for trial as to whether Mr. Miletic’s action is statute barred and as to whether he has a defence to Mr. Jaksic’s counterclaim for the balance of the purchase price for the company.

PARTIES’ POSITIONS
[46] Mr. Jaksic argues that summary judgment should be granted dismissing Mr. Miletic’s claim on the ground that it is statute barred, having been commenced in May 2011, more than two years after 2006, when the Agreement was signed, and that any deficiencies were discoverable prior to May 2009. Mr. Miletic argues that summary judgment should not be granted because he began his action less than two years after Ms. Jaksic died in February 2010, when he first discovered that he had the claim, and because there are too many contested issues of fact, requiring testimony from too many witnesses, to be resolved without a trial.

[47] Mr. Jaksic further argues that Mr. Miletic’s statement of Claim does not disclose a cause of action. Mr. Miletic has pleaded the contract, and has set out facts that amount to a breach of the contract, and has claimed damages, but has not explicitly pleaded that Mr. Jaksic’s conduct constituted a breach of contract.

ANALYSIS AND EVIDENCE
General Principles

[48] Rule 20.04(2) provides that where there is no genuine issue for trial with respect to a claim or defence, the Court shall grant Summary Judgment accordingly.

[49] The court may grant summary judgment in the following circumstances:

1) Where the parties agree;

2) Where the claim is without merit;

3) Where the motions judge is able to dispose of matter and where the trial process is not required in the “interest of justice.”[2]

[50] The Supreme Court of Canada, in Hryniak v. Mauldin, gave guidance as to how Rule 20 of the Rules of Civil Procedure, governing motions for summary judgment, should be applied to promote timely and affordable access to the civil justice system. Karakatsanis J., on behalf of the court, noted that such motions are an opportunity to simplify pre-trial procedures and move the emphasis away from the conventional trial, in favour of proportional procedures tailored to the needs of the particular case. She stated:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.[3] (Emphasis added)

[51] Karakatsanis J. held that the judge hearing a motion for summary judgment must compare the procedures available in such a motion, supplemented, if necessary, by the fact-finding tools provided in Rules 20.04(2.1) and (2.2), with those available at trial, to determine whether the court can make the necessary findings of fact and apply the principles of law to those facts in a proportionate, most expeditious, and least expensive manner to achieve a just result:

This inquiry into the interest of justice is, by its nature, comparative. Proportionality is assessed in relation to the full trial. It may require the motion judge to assess the relative efficiencies of proceeding by way of summary judgment, as opposed to trial. This would involve a comparison of, among other things, the cost and speed of both procedures. (Although summary judgment may be expensive and time consuming, as in this case, a trial may be even more expensive and slower.) It may also involve a comparison of the evidence that will be available at trial and on the motion as well as the opportunity to fairly evaluate it. (Even if the evidence available on the motion is limited, there may be no reason to think better evidence would be available at trial.)[4] (Emphasis added)

[52] Based on guidelines set out in Hryniak v. Mauldin, I must first determine, based on the evidence before me, and without using the new fact-finding powers, whether there is a genuine issue requiring trial, to fairly and justly adjudicate the dispute, and whether the motion is a timely, affordable, and proportionate procedure under Rule 20.04(2)(a). If there is no genuine issue requiring trial, I must grant summary judgment.

[53] If there appears to be a genuine issue requiring a trial, I must exercise my discretion to determine whether the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2), provided their use will not be contrary to the interests of justice and will lead to a fair and just result, and serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.[5]

[54] The onus is on the moving party to establish that there is no genuine issue of material fact requiring a trial. Once that onus is met, the burden shifts to the responding party, as the party opposing the summary judgment, to demonstrate that the claim does have a real chance of success.[6] The party opposing summary judgment must show “a real chance of success”. A self-serving affidavit is not sufficient to create a triable issue in the absence of detailed facts and supporting evidence.

a) Does Mr. Miletic’s action raise a genuine issue for trial?
[55] Mr. Jaksic submits that Mr. Miletic’s claim should be dismissed, arguing that none of the causes of action he has advanced is supported by the facts or law. I will address each of these in turn.

Fraudulent misrepresentation

[56] Mr. Jaksic submits that Mr. Miletic does not plead facts supporting the essential elements of this cause of action. He says that Mr. Miletic does not specify any representation that was made, or that was false, or that the Jaksics knew to be false. He notes that Mr. Miletic has acknowledged that no representations or warranties were made to induce him to buy Micro Precision, and that no financial or other corporate records were given to him to induce him to buy the company.

[57] This court has identified the essential elements of fraudulent misrepresentation that must be set out in a pleading as follows:

(a) the misrepresentation complained of was made by the defendant;

(b) the misrepresentation is false;

(c) the defendant knew when making the statement, it was false or was recklessly uncaring whether it was true or false; and

(d) the representation induced the plaintiff to act to their prejudice.[7]

[58] Mr. Miletic asserts that both Mr. Jaksic and Mr. Wheeler falsely represented to him that he was the owner of Micro Precision, intending him to rely on their representation. He says that he believed the Agreement was complete and enforceable and that Mr. Wheeler and the Jaksics knew it was not.

[59] Mr. Miletic further asserts that Mr. Jaksic represented that he and Mrs. Jaksic would resign as directors of Micro Precision once the Agreement was signed. This did not happen until a few years later. The Jaksics also advised Mr. Miletic that he would receive the company’s shares, which also never happened. Rather, the Jaksics maintained effective control of the company, even after the Agreement was signed. Mr. Miletic did not question the Jaksics because he trusted them, and believed they were acting in the company’s and his best interest.

[60] Mr. Miletic further says that the Jaksics told him that Micro Precision had no substantial liabilities when the parties signed the Agreement. He later learned that the company had a substantial tax liability, from 2006 onward.

[61] Mr. Miletic says that in reliance on the representations made to him by Mr. Wheeler and the Jaksics, including especially the representation that he was now the owner of the company, Mr. Miletic continued making payments to the Jaksics for both the shares and the Jaksics’ salary. He claims, as damages, the amounts he paid to the Jaksics from September 2006 to June 2010.

[62] I find, on the evidence that Mr. Miletic has put forth facts that disclose a cause of action in fraudulent misrepresentation, and that there is a genuine issue for trial as to whether such representations were made to him, and as to the loss he suffered as a result. If his claim proceeds to trial, and he establishes that the shares were never transferred to him, the court will be required to calculate his damages based on the payments he made to the Jaksics.

Unjust enrichment

[63] Mr. Jaksic submits that Mr. Miletic does not plead what elements of unjust enrichment he relies on. He argues that there was fair consideration for the shares and for the services that the Jaksics provided. He says that Mr. Miletic did not plead that there was an unfair result arising from the Agreement and that there is therefore no basis for setting the transaction aside based on unconscionability. He asserts that the Agreement was an arms-length purchase and sale of the company’s shares, with consideration given by both parties. It involved a fair purchase price, and included support from the vendor in the form of financing and continued participation of the Jaksics in the business, and that Mr. Miletic has taken the position that he was represented by counsel, Mr. Wheeler, in the transaction, although it is Mr. Wheeler’s position that he represented only the Jaksics, and that he was retained for the limited purpose of drafting the Agreement.

[64] In Meditel Inc v. Baldhead Systems Inc., the Divisional Court upheld a restitutionary claim for a repudiatory breach of contract. Swinton J. stated:

The appellant argues that the trial judge erred in ordering damages because she made an express finding that the parties had no consensus ad idem on the services to be provided and the scope of the project (see pages 10 and 12 of the reasons). Therefore, the appellant argues there was no contract between the parties…

While the appellant argues that the trial judge erred in ordering rescission, as the status quo ante could not be restored, we see no error of law in her order that Baldhead return the monies paid by Meditel. As Professor John McCamus stated in the Law of Contracts, “Restitution is available to the victim of a repudiatory breach where there has been a total failure of consideration” (at page 644). In effect, this is what the trial judge ordered.[8]

[65] Although Mr. Miletic does not explicitly repudiate the Agreement and request restitution as a form of relief in his Statement of Claim, the facts he has pleaded may support a claim for such relief if his pleadings are amended. If the shares were not transferred to him then, notwithstanding the Agreement, there was a total failure of consideration and Mr. Miletic would have a valid claim for restitution of the amount he paid to the Jaksics as the purchase price for the shares.

The Security Agreement and Promissory Note

[66] Mr. Jaksic submits that the Security Agreement referred to in section 2 of the Agreement, and the Promissory Note, were intended to benefit Mr. Jaksic but that he is not relying on them. Instead, he seeks to enforce the Payment Plan in the Agreement. He notes, however, that the Statement of Claim does not set out any facts respecting a Promissory Note, or the failure to deliver it.

[67] If Mr. Jaksic does not rely on the Promissory Note, and has never produced one, the fact that Mr. Miletic does not set out facts respecting such a Note, or the failure to deliver it, is not material to the issues before me.

Breach of Contract and Rescission

[68] Mr. Jaksic submits that Mr. Miletic does not plead the terms of the contract that he says were breached, and that there is no remedy known as rescission, or facts pleaded that would support such a claim. He states that, in any event, Mr. Miletic is in breach of the Agreement and is therefore not entitled to the equitable remedy of rescission.

[69] This court observed, in Liquid Rubber Industries Inc. v. Bilbija, that rescission is an equitable remedy. Its availability depends on the facts of a case.

Whether Russlar has affirmed the Purchase Agreement such that rescission is not available is a question of fact. Affirmation will not be inferred from conduct in circumstances where the represented is not fully aware of all the facts: Brown & Root, paras. 54 to 56. At issue, therefore is Karam’s credibility as to when he became aware of the alleged fraud.

Further, notwithstanding Russlar’s reorganization of LRI after the closing, rescission is still available in law. Rescission is an equitable remedy which is discretionary and when applied must be molded to the particular circumstances of the case. See Brown & Root, paras. 59 to 64. Whether rescission is available to the plaintiffs must be determined having regard to all the facts.[9] (Emphasis added)

[70] Mr. Miletic argues that there was no contract, and that rescission should therefore be available as a remedy. I agree with this argument in part. Rescission is one of two alternative remedies for breach of contract. The other is damages. He must waive his claim to damages if he seeks rescission.

[71] If Mr. Miletic proceeds on the basis of breach of contract, he is entitled to claim that the Jaksics were holding the shares, or his payments, or both, in trust, as the Jaksics had not yet transferred the shares to him. If he waives damages, and sues for rescission, his claim is based on the unequal position of the parties, the unconscionability of the transaction, based on the detriment to him and the benefit to the Jaksics, and the lack of juridical basis for the Jaksics’ enrichment at his expense. In that case, he is entitled to the return of his money. If he is unable, at this point, to establish the unconscionability of the transaction on economic grounds, he may still be entitled to have it set aside on the ground that:

1. He had no independent legal advice, and there was material non- disclosure of the company’s tax liability, if not an outright fraudulent misrepresentation that the company had no such liability; and

2. He did not receive what he bargained for in the transaction, which was the transfer of the shares, and access to the company’s books.

[72] On all of the facts, I conclude that rescission is a remedy available to Mr. Miletic, as is a claim for restitution. As the Plaintiff did not bring a summary judgement motion and there are glaring differences in the evidence of the Plaintiff and the Defendants these matters are genuine issues requiring a trial.

Constructive Trust

[73] If there was a finding at trial that a valid contract existed when Mr. Miletic and the Jaksics executed the Agreement, there is a triable issue as to whether the Jaksics held the shares, or Mr. Miletics’ payments, or both, as constructive trustees for Mr. Miletic. Donovan Waters in his classic text Waters’ Law of Trusts in Canada, discusses the relationship between a contract and a constructive trust:

First it is clear that the law can bind a person with trustee obligations whenever it finds him with a legal or equitable interest in property over which another has rights. Like the trust of express or implied intention, therefore, the constructive trust is concerned with property; the contract is concerned with obligations. But this simple distinction conceals a much closer connection. A constructive trust is imposed to compel a property owner to recognize his obligations to hold that property for another, and to give that other a means of enforcing the performance of that obligation…

The connection between contract and constructive trust becomes closer, however, when it is the very obligation created by the contract that becomes the property upon which a constructive trust is imposed.[10]

[74] It was the Jaksics’ obligation to transfer the shares to Mr. Miletic as the consideration for his purchase of the business. If it is found that the Agreement was a valid contract, and that the obligation created by it (to transfer the shares) was not complete when the Agreement was signed, then it may be found that Mr. Miletic had a legal or equitable interest in the shares, and/or the payments they received from him, and that they held them as a constructive trustee for him. Although a claim for constructive trust has not been pled, the facts pled in the Statement of Claim support such a claim and disclose a genuine issue for trial.

Oppression

[75] Mr. Jaksic states that he and his wife’s Estate have adduced evidence that they resigned as directors of the company on September 6 or 21, 2006, and that, accordingly, the shares of the company were sold to Mr. Miletic on the latter date. He says that he and his wife could therefore not have acted in a manner that was oppressive to Mr. Miletic’s interest, and that would warrant a remedy under s. 248 of the Ontario Business Corporates Act (“OBCA”). In any event, he says, Mr. Miletic has not pled facts supporting a claim based on oppressive conduct by them.

[76] The issue of whether the Jaksics, in fact, ever transferred the shares of the company to Mr. Miletic, and whether they resigned from their positions in 2006, is one which, based on the conflicting evidence, must be determined at trial. The determination of this issue requires viva voce testimony from Mr. Wheeler, Mr. Jaksic, and Mr. Miletic, as well as records that must be interpreted in the context of their testimony. These issues cannot conveniently be determined on a motion for summary judgment, even if the court were to exercise the expanded powers available to it under Rule 24.04(2.2).

[77] The broad language and all-encompassing nature of an Oppression claim is emphasized in section 248(1) of the OBCA as stated:

248. (1) A complainant and, in the case of an offering corporation, the Commission may apply to the court for an order under this section.

(2) Where, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates,

(a) any act or omission of the corporation or any of its affiliates effects or threatens to effect a result;

(b) the business or affairs of the corporation or any of its affiliates are, have been or are threatened to be carried on or conducted in a manner; or

(c) the powers of the directors of the corporation or any of its affiliates are, have been or are threatened to be exercised in a manner,

that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation, the court may make an order to rectify the matters complained of. R.S.O. 1990, c. B.16, s. 248 (2).

[78] The language within the statute of “any” security holder, creditor, director or officer raises triable issues concerning Mr. Miletic’s interest in the shares for the period of time the shares were not transferred to him. In addition as the supposed “president” of the company, not having shares and integral information tied to the financial health of the company may have oppressed his interest.

Breach of Fiduciary Duty

[79] Mr. Jaksic asserts that Mr. Miletic does not plead any facts that support a finding that there was a trust relationship, whether constructive or otherwise, between the Jaksics and Mr. Miletic, or that the Jaksics owed a fiduciary duty to Mr. Miletic, or that there was action that constituted a breach of the said duty. The facts pled disclose such a breach, however, and it is open to the Plaintiffs to bring an motion to amend their pleadings with leave of the Court.

Bad Faith

[80] Mr. Jaksic submits that Mr. Miletic seeks damages for the Jaksics’ bad faith, but that bad faith is not a cause of action. In any event, he says, the amounts claimed are arbitrary and without factual support, and that Mr. Miletic has not identified what “relevant funds” he is referring to, or alleged facts that give rise to a tracing of assets or other accounting remedy. He says that Mr. Miletic acknowledges that the only reason the company lost its profitability was the effect of the recession and that there was no improper conduct on the part of the Jaksics in the management of the company.

[81] It is evident from the Claim that Mr. Jaksic is complaining that he paid money for shares that he thought he had received but had not, in a company that he thought had no substantial liability but that, in fact, had such liabilities. While bad faith is not itself a cause of action, a fraudulent misrepresentation as to the companies’ liabilities, or lack of such liabilities, or as to whether ownership of the company had, in fact, been transferred to Mr. Miletic, would amount to bad faith, as well as a breach by the Jaksics, as trustees, of a fiduciary duty they owed to Mr. Miletic, which would support a cause of action based on misrepresentation, breach of contract, breach of trust, or breach of fiduciary duty.

Interest and Costs

[82] Mr. Jaksic submits that Mr. Miletic is not entitled to pre-judgment or post-judgment interest or costs, because he has not established any underlying claim. He submits that Mr. Miletic’s claim is without merit or, alternatively, that the court is able to dispose of it without the need for a trial.

[83] Mr. Miletic claims that Mr. Jaksic made a material misrepresentation to him in stating that he was the owner of the company when, in fact, he was not, and in stating that the company had no substantial liabilities when, in fact, it did. His theory is that the parties entered into the Agreement on September 11, 2006, but that the Agreement was never implemented, because:

1. Ms. Jaksic instructed Mr. Wheeler that no further steps were required in connection with the sale, and failed to disclose these instructions to Mr. Miletic, notwithstanding that, putting the facts in their most favourable light for the Jaksics, she still held Mr. Miletics’ shares in trust for him.

2. Mr. Jaksic, who retained the company’s minute book following the meeting at Mr. Wheeler’s office, never returned it.

3. Share certificates were never issued to Mr. Miletic.

4. The necessary resolutions were never passed by the company to make Mr. Miletic the owner and President of the company.

5. Mr. Wheeler never advised Mr. Miletic, when the Agreement was signed, that he was not Mr. Miletic’s solicitor, or that Mr. Miletic required independent legal advice in connection with his transaction, and never reported to him, or delivered the documents that would be his obligation to provide if he had represented Mr. Miletic.

[84] Mr. Miletic did not discover the misrepresentation of the company’s tax liability until February 2010, when Ms. Jaksic died and he first obtained access to the company’s tax records. He did not learn that Mr. Wheeler had not been his lawyer until June 2010, when he received Mr. Wheeler’s demand letter, and he did not learn that the shares had not been transferred to him until he consulted Mr. Garvey.

b) Should Mr. Miletic’s action be dismissed on the ground that it is statute-barred?
[85] Mr. Jaksic argues that Mr. Miletic’s action is barred pursuant to the Limitations Act, 2002.[11] Section 4 of the Act provides:

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

[86] Section 5 of the Limitations Act provides as follows:

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

[87] Mr. Jaksic argues that the facts alleged by Mr. Miletic in paragraph 1 of his Claim, if true, were discoverable shortly after September 21, 2006, when the Agreement “closed” or, in any event, before May 20, 2009, two years prior to the issuance of the Statement of Claim on May 20, 2011. He says that Mr. Miletic has not pled any facts indicating that his claim was only discoverable later, and that he knew or ought to have known that he had a cause of action on September 21, 2006 or shortly thereafter, and that his claim is therefore barred by the 2 year limitation period pursuant to s. 4 of the Limitations Act, 2002.

[88] Mr. Jaksic argues that Mr. Miletic’s claim is premised on the fact that if he had known the financial circumstances of the company in 2006, he would not have agreed to buy it, and that Mr. Miletic had the authority, immediately after buying the company in September, 2006, to make any inquiries he wanted about the company’s financial condition. He could have obtained access to any of the company’s records, but chose not to do so until 2010. He notes that Mr. Miletic acknowledges that, within six-months after September 21, 2006, he realized that there was a problem respecting his purchase of the company and, accordingly, any claim based on misrepresentations made to him was discoverable within six months after September 21, 2006.

[89] Mr. Jaksic argues that Mr. Miletic’s claim is additionally based on the fact that the Jaksics did not relinquish control of the company after selling it to him. He says, in this regard, that Mr. Miletic was aware of the Jaksics’ continued involvement in the company after September 21, 2006, and chose not to assume his managerial duties or remove the Jaksics until 2010. He notes that Mr. Miletic acknowledges that he could have asked the Jaksics to cease their involvement at any time after September 21, 2006, and that he should have done so shortly, at the latest, after March 21, 2007, when the six month transition period ended. He should have consulted a lawyer at that time about his concerns as to their continued involvement. Mr. Jaksic argues that Mr. Miletic’s failure to do so should not entitle him to argue that the financial condition of the company was not discoverable until 2010.

[90] The Court of Appeal has held that the limitation period does not begin to run until the claimant discovers that he has a cause of action, or “a basis on which to make a claim”. In Maynes v. Allen-Vanguard Technologies Inc., the Court stated:

Having regard to the discoverability principle in Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549 (S.C.C.), the limitation period would only have begun to run when the plaintiffs discovered they had “a cause of action” or a basis on which to make a claim.[12] (Emphasis added)

[91] Section 5(b) of the Limitations Act provides that a plaintiff discovers that he has a cause of action on “the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a)”. This Court, in Sabourin v Proulx, described the purpose of the discoverability principle as follows:

The discoverability principle postpones the commencement of the statutory limitation period. The rationale is that it would be unjust to invoke limitation consequences before a claimant knows or by reasonable diligence ought to have known of the cause of action.[13] (Emphasis added)

[92] In Sabourin, LeRoy J. held that discoverability is a question of fact, dependent on the circumstances of each case, to determine whether a person actually discovered or ought to have discovered the material facts. He stated:

Apart from establishing an approach to summary judgment motions, the Court of Appeal in Aguonie also elaborated the meaning of the discoverability rule as developed by the Supreme Court of Canada in Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549, 151 D.L.R. (4th) 429 (S.C.C.). The court set aside the summary judgment in Aguonie, supra, and required that the matter proceed to trial. Justice Borins noted at paras. 29-30:

The starting point for the application of the discoverability rule and s. 2(8) is the same. It is the time when the appellants’ cause of action arose. This will define the starting date of the limitation period. It is a question of fact when the cause of action arose and when the limitation period commenced. The application of the discoverability rule is premised on the finding of these facts: when the appellants learned they had a cause of action against the respondents; or, when, through the exercise of reasonable diligence, they ought to have learned they had a cause of action against the respondents. These facts constitute genuine issues for trial and, in resolving them, the motions judge assumed the role of a trial judge.”[14]

The discoverability principle governs the commencement of a limitation period and stipulates that a limitation period begins to run only after the plaintiff has the knowledge, or the means of acquiring the knowledge, of the existence of the facts that would support a claim for relief: Nielsen v. Kamloops (City) (1984), 1984 CanLII 21 (SCC), 10 D.L.R. (4th) 641 (S.C.C.); Central & Eastern Trust Co. v. Rafuse (1986), 1986 CanLII 29 (SCC), 31 D.L.R. (4th) 481 (S.C.C.); Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549 (S.C.C.).”[15] (Emphasis added)

[93] Mr. Miletic’s relationship with the Jaksics did not break down until June 2010. In so far as his ownership of Micro Precision was concerned, Mr. Miletic had no reason to suspect foul play until after Ms. Jaksic died and he discovered that:

(1) Mr. Wheeler had not, in fact, been his lawyer;

(2) The shares were not transferred to him in 2006;

(3) The Jaksics had not resigned as directors at that time;

(4) The company had owed a substantial tax liability throughout the period from when the Agreement was signed until 2010.

[94] While Mr. Miletic would have liked to see the Jaksics leave the company, he did not consider it proper to force them out. He continued to pay Mr. Jaksic a salary until May 2010. Had he known that he had a claim against the Jaksics, he would have stopped paying their salaries. I find that that it was not until June 2010, when he retained Mr. Garvey, that Mr. Miletic knew that he had a cause of action against the Jaksics or Mr. Wheeler.

[95] Mr. Miletic’s relationships with Mr. Wheeler and the Jaksics were ones of dependence. The Jaksics were older than Mr. Miletic, they had been his employers, and had been officers and directors of Micro Precision, with intimate knowledge of its business, since 1984. Both Mr. Miletic and the Jaksics were Slovenian, and the evidence supports an inference that the Slovenian culture which they shared is high in the power-distance index.[16]

[96] I find that, at the very least, Mr. Miletic relied heavily on the Jaksics to handle the financial affairs of the business, and that he relied on both them and Mr. Wheeler in concluding that he had become the owner of Micro Precision in 2006. This Court, in Sheeraz et al. v Kayani et al., found that s. 5 of the Limitations Act must be interpreted in a way that takes account of a relationship of dependence. The Court stated:

It is consistent with the spirit of these provisions that s. 5 also be interpreted in a manner that allows some regard to the effect of a relationship of dependence… Section 5 should be interpreted broadly to have regard for the effect that his dependence may have had on his ability to assess whether his lawyer has breached a duty owed to him or whether a proceeding was the appropriate means of seeking a remedy.[17] (Emphasis added)

[97] I find, in all the circumstances, including Mr. Miletic’s dependence on the defendants, that his claim was not discoverable until June 2010.

[98] I find as a fact that Mr. Miletic could not reasonably have discovered his cause of action against the Jaksics until June 2010. By then, Ms. Jaksic had died, and Mr. Miletic had obtained at least preliminary access to the company’s financial and tax records. From 2006 to February 2010, Ms. Jaksic maintained control over the company’s finances and realistically, Mr. Miletic did not have the means of acquiring the knowledge of the company’s dire financial straits. It was only after Ms. Jaksic died that Mr. Miletic could reasonably have been expected to discover that he had a cause of action against Mr. Jaksic and Mr. Wheeler.

[99] Apart from the court’s interpretation of the discoverability principle in the Limitation Act, the defendants are prevented by their fraudulent concealment of the facts from relying on the limitation period. Fraudulent concealment has been defined to include “conduct, which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for one to do towards the other”.[18]

[100] Had Mr. Miletic known that Mr. Wheeler was not his lawyer, which it was Mr. Wheeler’s duty to advise him, and apparently did not, or that Ms. Jaksic had instructed Mr. Wheeler, after the Agreement was signed, not to take any further steps in connection with the sale, which it was the Jaksics’ fiduciary duty to tell him, but they obviously did not, and he had no other way of knowing this fact, he would have known to consult his own lawyer, and would then have discovered that he had not been given the documents that Mr. Wheeler and the Jaksics should have given him, and would then have known that he had a cause of action against them. When the very facts that would have put Mr. Miletic to his inquiry were wrongfully withheld from him by those who had an obligation to inform him of them, it cannot reasonably be asserted that his cause of action was discoverable by him without those facts.

[101] The Ontario Court of Appeal, in Giroux Estate v. Trillium Health Centre, stated:

Unlike the discoverability rule, with which Abella J.A. was concerned [in Waschkowski], the common law doctrine of fraudulent concealment is not a rule of construction. It is an equitable principle aimed at preventing a limitation period from operating “as an instrument of injustice” (see M. (K.), supra, at para. 66). When applicable, it will “take a case out of the effect of [a] statute of limitation” and suspend the running of the limitation clock until such time as the injured party can reasonably discover the cause of action (see M. (K.) supra, at paras. 65 and 66). Its underlying rationale is grounded in the well-established principle, reiterated in Goldin (Trustee of) v. Bennett and Co. 2003 CanLII 4764 (ON CA), (2003), 65 O.R. (3d) 691, [2003] O.J. No. 2778 (C.A.) at para. 35, that equity will not permit a statute to be used as an instrument of fraud.

In other words, unlike the discoverability rule, the doctrine of fraudulent concealment is not dependent upon the particular wording of the limitation provision. When applied, there is no risk that the limitation provision will be construed in a manner not intended by the legislature. Fraudulent concealment is concerned with the operation of the provision, not its interpretation. Stated succinctly, it is aimed at preventing unscrupulous defendants who stand in a special relationship with the injured party from using a limitation provision as an instrument of fraud.[19] (Emphasis added)

[102] Mr. Miletic was never told, and therefore had no knowledge, that he did not actually own the business, or that the Jaksics had instructed Mr. Wheeler to take no further steps to transfer it to him, or that he had not been given documents that would ordinarily be given to the purchaser of a business, or that the Jaksics had never resigned as officers or directors of the company, or that the company owed a substantial tax liability as early as 2006. He could not have discovered these facts until Ms. Jaksic who, on Mr. Miletics’ account, appears to have been the principal agent of the concealment of those facts from him, died. In these circumstances, the limitation period, as against the Jaksics, did not run until after February 2010.

[103] Mr. Miletic’s cause of action against Mr. Wheeler did not begin to run until June 2010, when Mr. Miletic received Mr. Wheeler’s letter and learned that he had not been Mr. Miletic’s lawyer in 2006. It was not until then that he really had cause to consult Mr. Garvey, and it was only then that he discovered the deficiencies in the sale of the business that he supposed had occurred in 2006.

c) Should Mr. Miletic be given leave to amend his pleadings?
[104] Rule 26.02 states:

26.02 A party may amend the party’s pleading,

(a) without leave, before the close of pleadings, if the amendment does not include or necessitate the addition, deletion or substitution of a party to the action;

(b) on filing the consent of all parties and, where a person is to be added or substituted as a party, the person’s consent; or

(c) with leave of the court. (Emphasis added)

[105] Although the pleadings are now closed, Mr. Miletic may move, with leave of the Court, to amend his pleading. As stated in Toronto-Dominion Bank v Rohatyan the Court has jurisdiction to amend pleadings after they are closed, and even after a motion for summary judgment.[20]

[106] Even if the required amendments raise a new cause of action, I am satisfied that Mr. Miletic has pleaded the facts supporting the causes of action that he proposes to rely on. Additionally, based on the material before the court, it is unlikely that an amendment, at this early stage of the action, will take the defendants by surprise, or result in any prejudice to them.[21]

d) Does Mr. Miletic’s defence to the Jaksics’ Counterclaim raise a genuine issue for trial?
[107] Mr. Jaksic argues that Mr. Miletic’s action arises from the purchase and sale of a business, the payment plan set forth, and the default under said payment plan. The Plaintiff by Counterclaim (Mr. Jaksic and his wife’s Estate) assert that Mr. Miletic owes them $124,850.75, representing the unpaid balance owed under the Payment Plan. This figure is derived as follows:

a. The Payment Plan provides for payment of $236,850.75, including $220,000 in principal and $16,850.75 in interest over fifty-nine monthly payments and one final payment.

b. Miletic made twenty-eight (28) payments of $4,000 towards the Payment Plan, for a total of $112,000.

c. The Moving Party takes the position that the unpaid amount still owed under the Payment Plan is $124,850.75, being the total amount to be paid ($236,850.75) less the amount actually paid ($112,000).

[108] Mr. Jaksic states that Mr. Miletic, in his defence to the Counterclaim, relies on the facts set forth in the Statement of Claim. Mr. Jaksic argues that in doing so, Mr. Miletic has admitted the facts that establish his Counterclaim, as follows:

1. Mr. Miletic signed the Agreement containing the Payment Plan.

2. He took possession of the company.

3. He made payments pursuant to the Payment Plan.

4. He failed to pay $140,000 owing as part of the purchase price for the company ($30,000 owing as part of the initial payment, and $110,000 owing pursuant to the Payment Plan).

5. He made payments towards the Payment Plan for twenty-seven and a half (27.5) months.

[109] Mr. Jaksic argues that in making payments pursuant to the Payment Plan, Mr. Miletic implicitly admitted the debt he owed to the Jaksics. Additionally, in his examination, he explicitly admitted that $119,000 remains owing under the Payment Plan. Based on his admission, Mr. Jaksic argues that summary judgment should be granted to him for $119,000 claimed by him in his counterclaim.

[110] Mr. Jaksic asserts that Mr. Miletic’s admission in his pleading that he paid $140,000 towards the purchase price of the company is consistent with Mr. Jaksic’s allegation that $30,000 was paid towards the purchase price on closing and $112,000 was paid pursuant to the Payment Plan, except that Mr. Miletic alleges that he paid $2,000 less than he actually paid.

[111] Mr. Jaksic and his wife’s Estate say that Mr. Miletic pleads that $140,000 was paid towards the purchase of Micro Precision but does not plead that he paid any more than this amount. Accordingly, Mr. Jaksic argues, Mr. Miletic implicitly admits that no more than $140,000 was paid and, in that event, he must also admit that he owes the balance of $124,850.75. He says that summary judgment should therefore be granted for that amount.

[112] Mr. Jaksic’s argument presumes that Mr. Miletic’s defence is about accounting for the amount paid and the amount outstanding on the Payment Plan. It is not. It is based on the invalidity of the Agreement, and the misrepresentations that the company had been transferred to him when it had not been, and that the company had no substantial liabilities when it did. If the Agreement is invalid on this basis, then, as discussed above, Mr. Miletic may be entitled to damages or to rescission and restitution of the payments he made.

e) The trial of the action
[113] In Hryniak v. Mauldin, The Supreme Court provided helpful direction as to how, having dismissed a motion for summary judgment, the motion judge can expedite proceedings toward a final resolution of the issues. Karakatsanis J. stated, in this regard:

Where a motion judge dismisses a motion for summary judgment, in the absence of compelling reasons to the contrary, she should also seize herself of the matter as the trial judge. I agree with the Osborne Report that the involvement of a single judicial officer throughout

saves judicial time since parties will not have to get a different judge up to speed each time an issue arises in the case. It may also have a calming effect on the conduct of litigious parties and counsel, as they will come to predict how the judicial official assigned to the case might rule on a given issue.

While such an approach may complicate scheduling, to the extent that current scheduling practices prevent summary judgment motions being used in an efficient and cost effective manner, the courts should be prepared to change their practices in order to facilitate access to justice.

CONCLUSION AND ORDER
[114] Based on the foregoing, it is ordered that:

1. Mr. Jaksic’s motion for summary judgment dismissing Mr. Miletic’s claim is dismissed.

2. Mr. Jaksic’s motion for summary judgment on his counterclaim is dismissed.

3. I am seizing myself of the trial of the action.

4. The parties shall, after October 1, 2014, arrange a Pre-Trial Conference before me, to discuss the steps required for the trial of this action.

5. If the parties are unable to agree on the costs of this motion, they may make written submissions, not to exceed four pages, with a Costs Outline, by September 30, 2014.

__________________________

Price J.

Released: August 29, 2014

CITATION: Miletic v. Jaksic, 2014 ONSC 5043

COURT FILE NO.: CV-11-2125-00

DATE: 2014-08-29

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

BOZIDAR MILETIC

Plaintiff

– and –

GEORGE JAKSIC, (THE ESTATE OF) NADA JAKSIC MICRO PRECISION MACHINING LIMITED AND JAMES WHEELER also known as JAMES S. B. WHEELER also known as JAMES STUART BOTHWELL WHEELER

Defendants

REASONS FOR ORDER

Price J.

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