$110M Actions Ends on Heels of Court Decisions

Valeo Sylvania L.L.C. brought an action against Ventra Group Inc. seeking, among other relief, general, special and punitive damages totalling $110 million for breach of contract and also a declaration that it had validly terminated the governing agreement between the parties.

Valeo Sylvania is an American-based joint venture between OSRAM SYLVANIA (the North American business of OSRAM GmbH of Munich, a Siemens AG company) and the Valeo Group of Paris. The defendant, Ventra, is an Oakville, Ontario-based global supplier of a broad range of high-quality engineered mechanical assembles and is a leading North American supplier of high precision moulded plastic components for the automotive industry. As reported in the November/December 2001 issue of Lexpert, Ventra was recently taken over by VTA Acquisition Company, a subsidiary of Flex-N-Gate Corporation.

At the commencement of the proceeding, Valeo Sylvania moved, without notice, for an order to obtain interim possession of certain injection moulds that Ventra had used to manufacture the car parts it supplied to Valeo Sylvania pursuant to the parties’ agreement. Mr. Justice John Wilkins granted Valeo Sylvania’s ex parte motion for interim possession of the moulds and Valeo Sylvania promptly had it enforced, removing the moulds from Ventra’s Chatham, Ontario facility and bringing them to Valeo Sylvania’s plant in the U.S. A motion was brought on Ventra’s behalf to set aside Mr. Justice Wilkins’s ex parte order. Ventra’s motion was heard on November 15 and 16, 2001 before Mr. Justice Robert Blair. Mr. Justice Blair found that the order of Mr. Justice Wilkins should be set aside because of Valeo Sylvania’s failure to make full and fair disclosure. Mr. Justice Blair ordered Valeo Sylvania to return the moulds in issue to Ventra within five days.

Jan-Paul Waldin and Allan Herman of Waldin, de Kenedy in Toronto represented Valeo Sylvania. Ventra was represented by a litigation team from Fasken Martineau DuMoulin LLP, consisting of Jeffrey Kaufman, Berkley Sells, Murray Braithwaite, Scott Rollwagen and Tate McLeod.

Waldin, de Kenedy retained the services of Earl Cherniak and Melanie Schweizer of Lerner & Associates LLP in Toronto to bring a motion to stay Mr. Justice Blair’s order, pending an application for leave to appeal. Valeo Sylvania’s motion was heard on November 27, 2001 before Mr. Justice A. Donald MacKenzie of the Divisional Court. Mr. Justice MacKenzie ruled in favour of Ventra and dismissed Valeo Sylvania’s motion for a stay on the basis that Valeo Sylvania had not met the first component of the test for a stay pending an appeal, namely whether there was a serious issue to be decided. A confidential settlement was reached between the parties shortly thereafter.