657722 Ontario Inc. v. Thompson
657722 Ontario Inc., and Johnston Bros. (Bothwell)
Limited, Applicants (Respondents in Appeal), and
Donald William Thompson, Elizabeth Thompson and
Thompson's Orchards Ltd., Respondents (Appellants)
 O.J. No. 521
2009 ONCA 128
Ontario Court of Appeal
D.R. O'Connor A.C.J.O., S.T. Goudge and
G.J. Epstein JJ.A.
Heard: January 20, 2009.
Oral judgment: January 20, 2009.
Released: February 10, 2009.
On appeal from the judgment of Justice John Desotti of the Superior Court of Justice dated May 14, 2008.
Michel Castillo for the appellants.
Raymond G. Colautti for the respondents.
[Editor's note: An amended judgment was released by the Court May 13, 2009. The changes were not indicated. This document contains the amended text.]
The following judgment was delivered by
1 THE COURT (orally):-- In our view the appeal must be dismissed. We reach the same conclusion as the application judge. However we do so through a different legal route albeit one that was specifically pleaded.
2 It is clear that Mr. Thompson covenanted not to object to an application on behalf of the respondent to extract aggregate from the subject property. The application judge found that Mr. Thompson used the vehicle of the appellant corporation to engage in just such an objection. He also found that Mr. Thompson's mother and the corporation were fully aware of both his covenant and the objection. There were ample facts sufficiently uncontested not to require a trial to sustain these conclusions.
3 These factual conclusions yield the legal conclusion that the appellant corporation served as Mr. Thompson's agent to take action in breach of his personal covenant.
4 The relief granted below restraining Mr. Thompson, his agent, (the appellant company), and his mother, is, in the circumstances, the appropriate response to this legal conclusion in order to prevent a breach of Mr. Thompson's personal covenant.
5 As to costs, leave to appeal is granted and the appeal allowed. This was, at its heart, simply a legal dispute. In making his costs order, the application judge appeared to rely largely on his view that the appellants' case was very weak. We do not agree that in the circumstances here, the relative merits of the case justify an award on a substantial indemnity basis. The costs order below is set aside and an award on a partial indemnity basis in the amount of $16,956.32 is substituted.
6 Costs to the respondent are fixed in the amount of $15,000.00 inclusive of G.S.T. and disbursements.