Executive Summary: Key Legal and Evidentiary Issues

• Mr. Macgillivray and Mr. Poirier disputed whether their decades-long property partnership remained active when the 384 Property was sold in 2018.
   
• Central to the case is whether Mr. Poirier owed fiduciary duties to his partner at the time of that sale.
   
• Undisclosed purchase offers from the Nokiiwin Tribal Council raised questions about a breach of the duty of disclosure.
   
• Allegations of deceit and unlawful means conspiracy arose from Mr. Provenzano's role as Mr. Poirier's agent.
   
• Validity of the January 2018 agreement, under which Mr. Macgillivray accepted $450,000, was challenged as procured through misrepresentation.
   
• A "boomerang judgment" issue arose even though the plaintiff had not filed a cross-motion for summary judgment.
   

Facts of the case

Mr. Macgillivray and Mr. Poirier practised litigation together in a law partnership for twenty years, until Mr. Poirier left in 1998 to focus on criminal law. Separately, the two men jointly acquired two properties on Fort William Road in Thunder Bay: the 395 Property in 1982 and the 384 Property in 1990. They shared the costs of acquiring and renovating the 384 Property equally, occupied it to run their law firm, and rented out the remaining space to tenants. Monthly balance sheets and income statements were prepared, and profits and losses were split evenly. Tullio Provenzano, a real estate businessman, was periodically retained to help manage the properties.

By 2016, Mr. Poirier had stopped paying $2,000 per month in rent for his portion of the 384 Property. When he refused to resume payment, Mr. Macgillivray sued in Small Claims Court in 2018, but the claim was dismissed on the basis that no express month-to-month rental agreement existed, even though the deputy judge acknowledged the partnership relationship. Between 2016 and 2017, the two men exchanged letters about dissolving or dividing the properties, without resolution.

In January 2018, Mr. Poirier received two purchase offers for the 384 Property, of $1,175,000 and $1,250,000, both addressed to him and Mr. Macgillivray as registered owners. Rather than disclosing these offers, Mr. Poirier had Mr. Provenzano contact Mr. Macgillivray to negotiate a buyout of his interest. Mr. Provenzano told Mr. Macgillivray that $600,000 was "not available" and steered him toward accepting $450,000, tied to the 2015 appraised value of $840,000. Mr. Macgillivray agreed on condition that Mr. Poirier receive the same amount, and signed a written agreement and power of attorney to that effect on January 31, 2018. The property ultimately sold for $1,220,000, and Mr. Poirier received $769,147.02 after adjustments. Mr. Macgillivray did not learn the true sale price until November 2018.

Policy and legislative provisions at issue

Section 2 of Ontario's Partnerships Act defines a partnership as the relationship between persons carrying on business together with a view to profit, and the court applied this definition to determine whether Mr. Macgillivray and Mr. Poirier remained partners in January 2018. Section 38 of the same Act provides that partners' rights and obligations continue after dissolution to the extent necessary to wind up partnership affairs and complete unfinished transactions.

The January 31, 2018 agreement between the parties was also central. Its operative terms provided that Mr. Macgillivray would receive $450,000 from the sale of his interest in the 384 Property "regardless of the sale price to a third party," with payment to come from the sellers' solicitors on closing, and stated that he would receive "no more" than that amount even if the property sold for a higher price.

Reasoning and analysis

Justice Cornell found that a partnership existed between Mr. Poirier and Mr. Macgillivray at the relevant time, pointing to their equal sharing of capital, profits, and losses, their joint management of the properties, their shared use of Mr. Provenzano's company for maintenance, and admissions by Mr. Poirier himself, including a pleading describing them as partners and a letter calling Mr. Macgillivray his "only partner left." The court held that these fiduciary duties, including the duty of disclosure, survived any purported dissolution under section 38 of the Partnerships Act.

On that basis, the court concluded Mr. Poirier breached his fiduciary duty by concealing the Tribal Council offers from Mr. Macgillivray in order to secure a larger share of the sale proceeds for himself. The court distinguished the defence's reliance on Simkeslak Investments Ltd. v. Kolter Yonge LP Ltd., noting that unlike in Simkeslak, Mr. Macgillivray was not separately negotiating his own sale and continued to trust Mr. Poirier as a partner. The agreement was found to have been obtained through deceit, since Mr. Provenzano misrepresented that $600,000 was unavailable and withheld the existence of the Tribal Council offers, entitling Mr. Macgillivray to rescind it. The court also found the elements of unlawful means conspiracy and civil fraud were made out against both Mr. Poirier and Mr. Provenzano, given their coordinated concealment and Mr. Macgillivray's resulting financial loss.

Ruling and overall outcome

The defendants' motion for summary judgment dismissing Mr. Macgillivray's action was dismissed. Instead, the court granted Mr. Macgillivray a "boomerang judgment," finding that despite the absence of a cross-motion, the record justified summary judgment in his favour against both Mr. Poirier and Mr. Provenzano, who were held jointly and severally liable. The successful party is the plaintiff, Mr. Macgillivray. The court did not fix a final damages figure, directing the parties to deliver written submissions on the proper measure of damages and costs, though Mr. Macgillivray's own submissions had proposed disgorgement figures ranging from $769,147.02 down to $160,000 depending on the remedy sought. As the amount of the award has not yet been determined by the court, the monetary outcome remains Not Specified.