DATE: 19991105
DOCKET: C28836
COURT OF APPEAL FOR ONTARIO
RE: ANGOSS II PARTNERSHIP, ANGOSS SOFTWARE
INTERNATIONAL (U.S.A.), INC. and ANGOSS SOFTWARE
INTERNATIONAL LIMITED (Plaintiffs (Defendants by
Counterclaim) (Respondents)) v. TRIFOX, INC.
(Defendant (Plaintiff by Counterclaim)
(Appellant))
BEFORE: CARTHY, AUSTIN AND MacPHERSON JJ.A.
COUNSEL: G. D. E. Adair, Q.C.
For the appellant/defendant
A. M. Robinson
For the respondents/plaintiffs
HEARD: October 19 and 20, 1999
On appeal from the judgment of Blair J. dated December 11, 1997.
ENDORSEMENT
[1] Trifox puts its appeal from the decision of Blair J. on five
grounds.
[2] The first is that Blair J. erred in concluding that the
agreement of December 13, 1993 required Trifox to deliver to
Angoss Source Code and Object Code from which Angoss would be
able to build the products it proposed to sell. The trial judge
found that “what the parties contracted to transfer to Angoss was
all versions of the TRIM and the Virtual G.U.I. computer
programmes and (in terms of source code) the Source Code in fully
commented and documented format with respect to those computer
programmes and with respect to the Vortex product line. Included
in the agreement to transfer all versions of the software and the
fully commented and documented source code was the commitment to
transfer the porting kit and the means of creating the porting
kit.”. In our view, that conclusion is unassailable.
[3] It was then argued, alternatively, that if the argument to
sell those codes was a term of the contract and, if there was a
breach, that breach was neither fundamental nor substantial. This
was put on the basis that, whether it had the codes or not,
Angoss was never in a position to use them to build products.
Rather, its concern was in marketing, not building. We agree with
the trial judge that, having agreed to sell the codes, it was a
substantial breach to fail to deliver them, however difficult
Angoss’ lack of response might have made such delivery.
[4] Trifox also relied upon s.4.7 of the agreement as rendering
non-delivery as something less than a breach of the contract and
as giving rise to a right on the part of Angoss to give notice to
correct, and, in the event Trifox failed to correct, as giving
Angoss a right to reduce the royalties payable, but not to
terminate. This provision is of no assistance to the appellant in
the circumstances. Section 4 deals not with the original transfer
of assets but with their future maintenance, support and
development. Section 4.7 applies to Trifox’s failure “to
adequately perform its obligations in this section”, not to a
failure to perform the obligations imposed by s.2. [emphasis
added].
[5] It was also argued that the trial judge erred in failing to
draw an adverse inference from the failure of Angoss to call as
its witnesses at trial, its employees, Ken Ono and Darren
Inksetter, both of whom visited Trifox in April 1995. According
to counsel, this point was raised at trial. It is not dealt with
in the extensive and detailed reasons of the trial judge.
[6] According to the documentary evidence, Ono was impressed
with what he learned at Trifox. On the other hand, it was his
communications with Trifox upon his return which led to the
eventual termination of the contract. Accordingly, it is not at
all clear what inference it is suggested be drawn. Nor is it
clear that either Ono or Inksetter could shed any further light
on the matters underlying the grounds of appeal dealt with
earlier in these reasons.
[7] Insofar as damages are concerned, the court was invited, in
effect, to retry several aspects of the award. We have not been
persuaded, however, that the trial judge erred in his overall
assessment.
[8] Accordingly, the appeal is dismissed with costs.
“J.J. Carthy J.A.”
“Austin J.A.”
“J. C. MacPherson” |