Ontario Court Of Appeal Summaries (August 7 – 11, 2017)

Following are the summaries for this week's two civil decisions of the Court of Appeal for Ontario.

In RBC Dominion Securities Inc. v. Crew Gold Corporation, the court applied familiar principles of contractual interpretation in affirming the lower court's decision that had determined that RBC was not entitled to be paid a fee pursuant to an investment banking agreement when it had no involvement in the transaction that was ultimately concluded by its client.

In York University v Markicevic, the Court of Appeal granted security for costs of an appeal even though the appeal was found not to be frivolous, on the basis taht the appellant had been found liable in fraud and had attempted to put his assets beyond the reach of creditors, and had not challenged those findings.

Have a great weekend.

Table of Contents

Civil Decisions

RBC Dominion Securities Inc. v. Crew Gold Corporation, 2017 ONCA 648

York University v. Markicevic, 2017 ONCA 651

For Criminal Decisions, click here.

Civil Decisions

RBC Dominion Securities Inc. v. Crew Gold Corporation, 2017 ONCA 648

[Weiler, van Rensburg and Huscroft JJ.A.]


J. Devereux and M. Bookman, for the appellants

A. Crawley and N. Vandervoort, for the respondent

Keywords: Contracts, Interpretation, Standard of Review, Palpable and Overriding Error, Factual Matrix, Plain Meaning, Commercial Reasonableness, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Salah v. Timothy's Coffees of the World Inc., 2010 ONCA 673, Kentucky Fried Chicken v. Scott's Food Services Inc. (1998), 41 B.L.R. (2d) 42 (Ont. C.A.)


The appellants, RBC Dominion Securities Inc. and Royal Bank of Canada Europe Limited (together "RBC"), contracted with the respondent, Crew Gold Corporation ("Crew"), to provide investment banking services (the "Agreement"). RBC provided services under the Agreement to assist Crew in developing and implementing "strategic alternatives". The Agreement provided for service fees based on specific work performed by RBC, and for a "Success Fee", payable on completion of a "Transaction", as defined by the Agreement. The agreement defined a "Transaction" as follows:

The Transaction "may involve (i) a sale of all or a substantial portion of the shares, business or assets of the Company to a third party, (ii) an investment by a third party in the Company that results in a change of control of the Company or (iii) an amalgamation, arrangement or other business transaction involving the Company and a third party to effect such sale or disposition".

In the course of the Agreement, Crew, then a public company, was the subject of a takeover by Endeavour Financial Corporation ("Endeavour") and OAO Severstal ("Severstal") via the TSX and Oslo Stock Exchange, an event that was not anticipated by either party. The sole issue between the parties was whether, under the Agreement, RBC was entitled to a Success Fee in respect of any or all of the transactions involved in the takeover, even though it played no part in the transactions. RBC was of the view that Crew owed them the Success Fee, per the terms of the Agreement, and therefore sued Crew for its outstanding Success Fee Invoices.

At trial, RBC argued that the language of the Agreement was sufficiently broad and general so as to permit the claim, even though RBC was not involved in the Endeavour and Severstal purchases of Crew shares. Alternatively, RBC argued that the separate purchases by Endeavour and Severstal amounted to the sale of a "substantial portion of the shares... of the Company to a third party". RBC relied on what it asserted was the expanded definition of Transaction in the definition of "Transaction Proceeds" to argue that these purchases constituted Transactions under the Agreement. RBC also asserted that, unlike the other fees payable under the Agreement, there was nothing to tie the Success Fee to services provided by RBC; and that the payment of the Service Fee depended only on the closing of a Transaction. Finally, RBC relied on the tail provision to argue that it was entitled to a Success Fee so long as a Transaction was concluded within 12 months of the termination of the Agreement, regardless of RBC's contribution.

The trial judge found in favour of Crew. First, he noted there was no ambiguity in the language used in respect of the terms "Transaction" or "Success Fee". He held that, in interpreting the term "Transaction" and determining the intention of the parties at the time the Agreement was drawn, it was too limiting to simply have regard to the preamble and the...

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