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Reasons for Judgement in OBHA favour.

Monday, 18 May, 2015 21:41
Reasons for Judgement in OBHA favour.

Superior Court of Justice, Toronto Small Claims Court ruling

Court File No,: SC-13-24059
Plaintiff and Defendant in Defendant's claim
Defendant and Plaintiff in Defendant's claim
HEARD: November 13, 2014
                 January 15, 2015
1. This is a dispute that should never have happened. The Plaintiff, Canadian Ball Hockey Association (CBA), was so intimately associated with the Defendant, Ontario Ball Hockey Association (OBA), that CBA referred to the alliance as a partnership. At one stage, the president of CBA, Domenic Di Gironimo, was concurrently the treasurer of OBA. The members of CBA were the various provincial associations, of which OBA was
significantly the largest. The OBA's membership consisted of leagues, teams, officials and individUal players.
2. The various disputes are belated claims about money. OBA became sufficiently dissatisfied with their arrangements with CBA that, I conclude, in the summer or fall of 2011, OBA began to withdraw from CBA. OBA stopped paying fees to CBA and ultimately CBA terminated OBA's membership as a of April 2012, for non-payment.
3. Grievances then began to accumulate. The claims were unusually complicated because during the long close association between the parties, no one was inclined to put arrangements in writing. It appears that the whole ediface operated substantially on trust, punctuated by annual general meetings of CBA, which seems to have reflected the current and changing practices. Once the trust had broken down, the parties have had to rely of various oral agreements and practices. The result hwas been a proliferation of claims and counterclaims dependant mostly on the recollectiosn of individuals as to what they believed had been agreed upon.hey believed had been agreed upon.
4. The Plaintiff's case focused on three invoices, two of which were issued after OBA's membership had been terminated. The Defendant's claims flowed from actions taken by CBA after that termination. The third claim by CBA, relating to distribution of balls was withdrawn.
,Invoice 201292 dated September 21, 2011: $7,296.21
5. This invoice is for alleged residual unpaid membership fees for the 2011 spring/summer season in the amount of $4,082.21. OBA had paid CBA $101,396.70 for its members. CBA asserted that the membership total should have been $105,483.00 and claimed the
6. The second amount of $3,210.00 related to gate fees collected at a nationaltournament held in Ontario in 2011 . lt was agreed that these fees were to be shared 50/50 between the parties.
7. With respect to the allegedly unpaid membership fees, OBA has acknowledged the membership numbers reflected by the invoice, but denies admitting liability for the amount claimed. OBA did not challenge the dollar amount at trial, even in the face of clear pima facie evidence put forward by CBA. OBA argues that CBA has failed to prove the dollar amounts in issues on a balance of probabilities. ln the absence of any evidence to oppose CBA's position, I am satisfied the dollar amounts have been proven and that CBA is entitled to the $4,082.21claimed from OBA.
8. With respect to the gate fee issue, there is no dispute of the amount in issue. CBA argues that on-site logistics including collection of gate fees were organized by OBA. 
Unusually, CBA relies on the evidence of Mauro Gugini as supporting its contention. My notes, however, indicates that his evidence was exactly opposed to CBA's position. He stated that the gate fees were collected by CBA as were entry fees for each team. CBA also says Mr. Gerionimo handled all the tournament receipts, a fact Mr. Gironimo could not recall. At that time, he was both te presiden tof CBA and treasure of OBA, so it remains a question in which capacity he reeived the funds. In any event, in his reconcililation as between the parties, he gave CBA a credit of $3,210.00 (Exhibit A, Tab 2, page 3). Both parties relied on that reconciliation. lt was not argued that this credit did not reflect CBA effectively receiving its share of the gate revenue.
9. I am satisfied that the gate revenues were effectively shared and that this part of CBA's claim is not substantiated.
lnvoice 201457 dated April 30, 2012: $15,297.00
10. This invoice was issued after CBA had terminated OBA's membership with respect to fees for a fall-winter season. The issue was initiated by CBA at its annual meeting on October 1 5-16, 2011 . According to Mauro Cugini, who had been executive director of OBA since 1998, there had never been a separate charge for fall-winter play. Since this change was proposed by CBA, it was expected to be ratified by the provincial associations. This did not occur at OBA's annual meeting on the first weekend in November 2011.
11 Previously, fees for the spring-surnmer season were substantially employed to purchase insurance coverage for the associations and their members. According to Mr. Cugini, insurance was calculated annually and premiums in the year at issue were paid in about May 2011- $60,000, in June-July 2011 - $30,000 and the balance of $30,700 before the CBA's annual general meeting. Mr. Cugini stated that OBA paid all three (3) amounts
for coverage effective June 1 5, 2011 to August 31 , 2012. The period of coverage was confirmed by Mr. Di Gironimo. No evidence was led to contradict the evidence set out in this paragraph.
12. It is to be noted that the fees for OBA and other provincial associations provided funds for the insurance which was purchased and issued well before the October 15-16,2011 CBA annual general meeting. There is no evidence that CBA purchased additional coverage for the fall-winter season, which was included within the existing coverage dates.
13. Mr. Cugini further stated that OBA only had three fall-winter leagues in operation. One league resigned from the OBA when the possibility of new fall-winter fees was raised. By comparison Tab 1 in Exhibit A shows that there were 55 adult and 30 youth leagues playing in the spring-summer season, plus over 20,000 individuals. ln an e-mail dated February 4,2012, Mr. Cugini stated that he had not received any fall-winter registrations but offered to provide a head count once registrations were received. Between the date of that e-mail and April 12,2012 when CBA terminated OBA's membership, their
relations obviously deteriorated. The evidence was almost silent as to the events during that period.
14. The calculation of the alleged fall-winter fees argued by the Plaintiff is entirely hypothetical and reaches an amount which is very doubtful compared to the evidence of OBA. I do not accept CBA's calculation of this claim. I am also in doubt that the imposition of this new fee has been justified. Bear in mind the ultimate payers of these fees are the individual members of OBA, who had never been consulted. The failure of these members to register, as reported by Mr. Cugini,, may reflect resistance to any new fees. On the balance of probabilities, I am not convinced that CBA was entitled to impose these fees on OBA as a liability that it probably could not pass on to its members. This claim is therefore refused.
lnvoice 201565 dated May 6, 2013: $1,322.21
15. The trophy for the national championship in 2011 was won by the Brampton Midnight Express team. Paragraphs 28 and 29 of the Amended Claim state that the team was allowed temporary possession of the trophy. While in the team's possession, the trophy was damaged beyond repair. CBA  replaced the trophy at a cost oÍ $1,322.21 (Exhibit A, Tab 40). Relying on paragraph 18 of CBA's Regulations (Tab 34, p. 125), CBA invoiced
the replacement cost to the team on June 8, 2012 (Tab 39). When the amount was not paid by the team, in May 2013 CBA issued the invoice in issue to OBA. Bylaw paragraph 18.2 imposes liability for trophy damage on the team and/or association in possession of the trophy when damaged. I find that the replacement cost was properly billed to the team which had possession of the trophy on June 8,2012 (Tab 39). There is no justification for CBA's attempt to transfer liability to OBA a yeat later. This claim is therefore rejected.
OBA's claim for refund of insurance premiums: $11,077.00
16.  A substantial part of the membership fees paid by OBA to CBA annually, mostly in the spring, was intended to purchase insurance protection for OBA's members: leagues,teams, officials and individual players. ln June 2011, CBA accordingly purchased two policies, each for the effective period from June 15,2011 to Augusl31,2012 (Exhibit B, Tab 15). At that time, OBA was in financial good standing with CBA. I have no doubt that the premiums were paid from the fund of membership fees received by CBA from OBA and the other provincial associations. lt is fair to deem that CBA received the
membership fees subject to a trust for the purchase of the insurance. The cost of this insurance was a major justification for the fees OBA had charged to its members.
17. When CBA terminated the membership of OBA on April 20,2012, CBA obtained a refund of premiums calculated on the coverage of OBA and its members from that date to August 31, 2012. ïhe refund was effectively a return of the insurance trust arrangement relating solely for withdrawn coverage for OBA. The refund was paid to CBA only as holder of the policies, for the benefit of OBA and its members (see Exhibit B, Tab 17). Having terminated part of the insurance coverage funded by OBA, CBA is not entitled to retain the refund which resulted.
18. ln anticipation of its imminent termination of its CBA membership, OBA purchased replacement insurance for its members in April 2012 (Exhibit B, Tab 16). ln the circumstances, I have no doubt that CBA should have been passed the refund on to OBA. There will therefore be judgment for the OBA for the refund amount of $11 ,077.00
Oral agreements for sharing rent & staff costs
19. This is a belated claim probably inspired by this litigation. Tony lannitto, vice-president of CBA testified that an arrangement for CBA to use a small pad of OBA's office space originated orally in 2002 and was amended in 2007. No one went to the trouble of documenting what is in essence a long-standing sublease. The Statute of Frauds requires leases over three (3) years in length must be in writing. No such writing exists. OBA relies on financial statements and budgets such as Exhibit B, Tab 13 which shows CBA's proposed (as of August 23,2010) budget for 2011 which includes an expense for
"Office rent & cost sharing" of $20,000. Other similar documents are of similar effect. Such entries are designed to account for actual or continued expenses. They are budget items but do not by themselves document a lease for a finite term. They are more consistent with at most a month to month arrangement. As far as I can tell, this arrangement was not reflected by any invoicing, including the amount currently claimed
for two months, November and December 2011.
20. Shelley Callaghan was on CBA's Board as vice-president for the women's division. She testified that the rent item was discussed at CBA's annual general meeting in October 2011 , as only a verbal agreement which could be terminated at the end of October without further charge. On the second day of the meeting, a possible "weaning" off of payments was raised. However, Mauro Cugini, the executive director of OBA, responded
that if CBA was not using the space "cancel now", the decision was then made to terminate the arrangement and was approved by the majority of the other member provinces. Mr. Cugini could not recall saying "cancel now" so that evidence is not disputed and is exactly what happened. The result was not challenged at that time. There is no direct evidence that there ever was a finite termination date to justify this late
claim for two more months' rent. The claim for $3,333.30 rent is therefore dismissed.
21 The remaining claim for unpaid cost sharing re OBA's office staff in the amount of $2,200.00 also depends on a $10,000 item in the same proposed CBA budget labled "Reception & admin costs" (Exhibit B, Tab 13). OBA argues this refers to an unwritten staff sharing in OBA's office. Somehow, CBA argues that it refers to payment for copies of rule books at $1.00 per copy produced in Ontario. While CBA's argument is dubious,
the same conclusion, as for the lease, applies again. As far as I could tell, there was no designated person handling CBA matters in OBA's office. Any service was little more than a post box for CBA matters which were simply passed on. There is no reason I can detect why this a!'rangement eould not be terminated at will, along with the so-called lease. This claim is also rejected.
22. ln the result, CBA shall have judgment against OBA for $4,082.21 (see par. 7). OBA shall have judgment against CBA on its Defendant's Claim for $1 1,077.00 (see par. 18). The award to CBA will be set off against OBA's award, leaving a balance due from CBA to OBA in the amount of $6,944.79.
23. I consider it inappropriate that these two parties should need a two-day trial and lengthy written arguments to resolve these issues. Each parly should therefore pay its own costs.
May 12,2015
Burton Tait,
Deputy Judge


Tags: Ontario

Ontario Province


Asociation: Ontario Ball Hockey Association

Address: 5-56 Pennsylvania Avenue Concord, Ontario, L4K 3V9

Links: www.ontarioballhockey.ca

Year founded: 1974