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Labour & Employment Law Blog

Be Specific-Inferring Common Intention Rules the Day when Joint Venture Agreements remain Silent: The Ontario Court of Appeal’s Decision in Zachary Timoon Dentistry Professional Corp. v. Tonino Ciocca Dentistry Professional Corp., 2015 ONCA 812

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Case Summary

BACKGROUND

Through their professional corporations, two dentists entered into a joint venture agreement (hereinafter “JVA”) to continue their business relationship in general practice dentistry. The JVA included a provision which related to the necessary notice to effect termination, but did not include the consequences of termination, such as whether a dissolution or a buy-out would take place with respect to the parties’ interests in the general dentistry practice.

Dr. Tonino Ciocca on behalf of Tonino Ciocca Dentistry Professional Corp. (hereinafter the “appellant”) began additional training with the view to establish an independent practice from the business relationship governed by the aforementioned JVA with Dr. Zachary Timoon on behalf of Zachary Timoon Dentistry Professional Corp (hereinafter the “respondent”). In 2013 the appellant successfully opened two (2) new clinics specializing in prosthodontics.

Although the appellant continued to work at the general practice dentistry clinic during his training, it was the understanding of the parties the joint venture would terminate, without winding-up the practice. However, the appellant was reluctant to sell his interest to the respondent until his new specialized practice was amply profitable.

The dispute arose when the respondent gave the necessary notice of termination under the JVA to the appellant and began to seek to exclude him from the general practice. Although the parties came to an agreement which included the appellant remaining at the practice once a week, there was still a disagreement as to how the appellant would ultimately leave the practice, including whether the appellant would withdraw over time and the parties buy-out rights.

The respondent applied to court for termination of the joint venture and a declaration which would exclude the appellant from the general dentistry practice and name the respondent as the sole owner. The appellant disputed the respondent’s right to be declared sole owner of the practice, but did not dispute the right to termination or the effective termination date.

The application judge declared the respondent as the sole owner, to the exclusion of the appellant, of the general dentistry practice. The applicant judge also directed that the financial ramifications of the order and declaration, such as the buy-out value and method of payment, are to be dealt with by further application or civil procedure and not during these proceedings.

ISSUES

The appellants submitted that:

  1. the application judge erred by exceeding his jurisdiction by ordering and making a declaration that the appellant must transfer ownership to the respondent; and
  2. the application judge erred in ordering that other proceedings are required to determine the parties’ financial issues rather than making a determination within the application.

THE ONTARIO COURT OF APPEAL’S DECISION

The Court dismissed the appeal for the foregoing reasons.

First, the Court found that the application judge had the requisite jurisdiction to make the order and declaration the appellant was required to transfer full ownership to the respondent. The Court reasoned that if the appellant were to maintain an ongoing ownership interest it would in effect “nullify the termination provision in the JVA, or at least make the termination meaningless.” (para 16).

Meaning, that the application judge’s decision was just ad reasonable given the facts. Once the JVA was terminated, there was a common intention that the appellant would be bought out by the respondent, otherwise the termination of the JVA would have been ineffective.

Secondly, the Court rejected the argument that the application judge erred in not directing the outstanding financial dispute to proceed to trial of the issues. Rather, the Court agreed that the application judge, leaving the choice of dispute resolution proceedings open to the parties granted better flexibility and that a trial would not grant any material advantage as argued by the appellant.

OUR THOUGHTS

The above matter highlights the importance of contract drafting. Although the joint venture agreement included a termination provision, the lack of specificity with respect to the consequences of termination left the parties to litigate. It is advisable to include details beyond how to effect termination in a joint venture agreement rather than leave it to a court to infer the common  intention of the parties.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.

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Legal Receptionist

Zeilikman Law is an employment law firm located in Vaughan, Ontario. We are looking to hire a legal receptionist to join our firm. Preference will be given to candidates who have experience working as a receptionist at another law firm.

Location: Vaughan, Ontario.

Start Date: Immediately.

Hours: Monday to Friday, 9 am to 5 pm. Full time. In-person only. This is not a remote work position.

Wages: 35,000 to 40,000 per year.

Duties and Responsibilities:

  • Manage our firm’s multi-line telephone system to receive incoming calls.  Screen incoming telephone call inquiries to determine the nature of the telephone call and provide standard information related to our legal services.  Take and deliver messages and route incoming telephone calls to the appropriate staff person.
  • Answer general inquiries coming from the firm’s social media and website email.
  • Welcome in-person visitors upon arrival.  Direct visitors to the appropriate staff person and / or office or boardroom.
  • Organize in-person visitor schedule to prevent overlap and multiple bookings.
  • Receive, sort, and distribute daily mail and deliveries.
  • Arrange for couriers.
  • Keep front reception, kitchenette area and boardroom tidy.
  • Perform various clerical duties such as filing, photocopying, and faxing on an as-needed basis.
  • Process client or other payments.
  • May be asked to run minor errands outside of office such as attending post office to arrange a courier or pick up mail.
  • May be asked to assist other law clerks or lawyers of the firm as required and as appropriate.
  • Any other basic administrative duties or tasks as deemed appropriate.

Required Skills:

  • Basic knowledge of general office procedures including filing, faxing, and printing and copying.
  • Basic word processing computer skills.
  • Proficient in receptionist and telephone practices, etiquette, and decorum.
  • Professional attitude and appearance.
  • Excellent organizational skills.
  • Positive customer service attitude is a must.
  • Must be able to maintain confidential and sensitive information.

Education and Experience:

  • Highschool diploma or equivalent.
  • 1 – 2 years’ experience in an office setting with an emphasis in accounting, reception or clerical work is required.   We would prefer experience in a law firm environment.

Applications for this position should be sent via email to jennifer@zeilikmanlaw.com. All applications should include a cover letter, resume and at least two references. Only successful candidates will be contacted.