Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on whether a valid professional services contract existed beyond the master services agreement, given missing or unsigned statements of work and unclear agreement on scope and compensation.
• Serious evidentiary gaps exist in Systematix’s proof of approvals for expanded scope and overtime, including an almost total lack of documented change requests and approvals for millions in alleged cost overruns.
• The court finds genuine issues requiring trial on both the existence of a binding contract and whether Systematix performed in accordance with any agreed scope, billing terms, and reporting obligations.
• Summary judgment is refused because the paper record does not allow reliable fact-finding on contested terms, approvals, and performance, even using the court’s enhanced powers under Rule 20.
• As against the UK entities, the court holds that Ontario lacks jurisdiction: no contract with them, no pleaded tort, and unjust enrichment cannot be used as a jurisdictional “back door.”
• Ultimately, Systematix’s summary judgment motion is dismissed and the UK defendants’ jurisdiction motion is granted, leaving all merits issues for trial and no monetary award fixed at this stage.

Factual background and business relationship

Systematix Technology Consultants Inc. is an IT services and consulting provider that entered into a master services agreement (MSA) with Dye & Durham Corporation effective July 13, 2022. Under this MSA, Systematix was to provide information technology consulting services to Dye & Durham on a project-by-project basis. The MSA itself was a framework contract: it did not detail specific projects, but required that the scope of services, schedule, and compensation for each engagement be set out in separate statements of work (SOWs). Systematix later performed work on six software development projects for Dye & Durham, of which four projects are in dispute in this proceeding. Between April and November 2023, Systematix claims it provided $6,596,431.51 in services for which it has not been paid, on top of over $6 million already paid by Dye & Durham on earlier invoices. Dye & Durham contends that Systematix incurred uncontrolled and unexplained costs, well beyond any agreed budget, without clear agreement on scope or appropriate approvals.

Contract structure and key terms under the MSA

The MSA provides that Systematix’s services will consist of those outlined in each SOW, and that compensation will be for “mutually agreed upon projects as set forth in the SOW.” It includes representations that Systematix will perform services in an expeditious and economical manner consistent with Dye & Durham’s best interests, requires invoices to be accompanied by monthly written project reports, and gives Dye & Durham the right to withhold payment where invoice amounts are disputed. The MSA also contains an entire agreement clause, making the MSA and any SOWs the core contractual documents governing the relationship. Two projects had signed SOWs. The first was the “Spider Project,” relating to development support for a UK application; its SOW was signed on October 28, 2022, and the work was completed by December 2022, with no outstanding payment claim. The second was the “Global Billing Project,” involving development of a consolidated billing platform in Toronto; its SOW was signed on December 5, 2022. Both SOWs specified that work would be performed on a time-and-materials basis, described the project scope, identified the Systematix resources, estimated duration, and contained estimated project costs broken down by role, hourly rate, anticipated days, and total cost, based on an eight-hour day. They also obligated Systematix to issue monthly invoices with correlating documentation, maintain detailed work effort logs, and ensure that billable hours were kept to a minimum.

Mechanisms for changes in scope and cost

Each SOW set out a formal change-control structure for expanding or altering the scope of work. For the Spider Project, any further expansion of scope or extension of resources was to be designated as an amendment to the SOW and/or documented through a Systematix Change Control document. For the Global Billing Project, any further expansion or extension was to be documented via the standard Systematix change control process. In practice, however, the evidence showed these mechanisms were not clearly implemented with Dye & Durham’s participation. There were no executed SOW amendments for the disputed projects, and there was almost no documentary trail of approved change requests that would justify the significant additional spending that Systematix later claimed.

Disputed projects and the scope and rate controversies

Systematix asserts that four additional projects that lacked signed SOWs were effectively “extensions” of the Spider Project and governed by its SOW, claiming that they used the same hourly rates and framework. The evidence, however, showed that for these four projects Systematix billed at significantly higher rates than the Spider Project rates, and there was no proof that Dye & Durham ever agreed to the higher rates. Systematix alternately argued that Spider SOW rates were mere estimates, or that the rates in that SOW were incorrect and higher rates had been approved, but it provided no consistent explanation or documentation of such approvals. Furthermore, despite the MSA’s express language linking key terms—scope and compensation—to SOWs, three of the four disputed projects had no signed SOWs at all: one had only a draft SOW that was never executed, another had a draft prepared but never sent, and two had no SOWs. The judge concluded that, for these projects, the work was essentially carried out without SOWs, leaving serious uncertainty about what work was actually agreed and at what price.

Evidence of approvals, timesheets, and project reporting

A central evidentiary weakness in Systematix’s position concerned how approvals for work, scope changes, and overtime were documented. In its pleadings, Systematix claimed that changes in scope were approved through project change request forms following its internal “standard project change control process.” It later shifted to say approvals could be found in Jira (a project management tool), Confluence (a documentation repository), or “signed change requests,” but its own witnesses conceded that Jira would not house approvals and Dye & Durham did not have access to Confluence; no signed change requests were produced. On the summary judgment motion, Systematix again adjusted its theory, asserting that approvals could be located in emails and Microsoft Teams messages. Yet Systematix produced no such emails, and Dye & Durham located only one email approving overtime of approximately $5,000—a negligible amount compared with the alleged $9.5 million in cost overruns. As for Teams messages, Dye & Durham’s evidence was that, in the ordinary course, it did not retain those messages and had not enabled the relevant retention settings; there had been no prior litigation hold or discovery plan directing it to preserve Teams data. The court rejected Systematix’s late-raised accusation of spoliation and its invitation to draw an adverse inference, emphasizing that Systematix bore the onus to prove there was no genuine issue requiring trial. Timesheet evidence was similarly problematic. Systematix provided weekly timesheet summaries, many of which were blank, approved only by internal Systematix personnel, and included narratives describing work arguably out of scope, such as internal meetings, severance payments, administrative attendance, and generic “D&D planning” or “D&D admin.” The MSA had required monthly project reports with invoices, but those reports were not provided. Altogether, the documentation did not convincingly show that Dye & Durham had agreed to the expanded scope, overtime, and categories of work for which it was billed.

Summary judgment framework and its application

The summary judgment motion required the judge to determine whether there was a “genuine issue requiring a trial,” and, if so, whether that issue could be resolved using the court’s enhanced powers under Rules 20.04(2.1) and 20.04(2.2), including weighing evidence, evaluating credibility, drawing inferences, or hearing limited oral evidence. The court approached the case through the lens of Hryniak v. Mauldin, which emphasizes that summary judgment is appropriate only where the necessary factual findings can be made on the paper record and the process is proportionate, timely, and just. Systematix tried to frame the dispute as a simple debt collection matter arising from unpaid invoices. The judge rejected this characterization, viewing it instead as a complex contractual and evidentiary dispute requiring fact-finding on contract formation, essential terms, and performance—issues not suitable for resolution on the motion record alone.

Whether there was a valid contract and a meeting of the minds

The court’s first major legal question was whether there was a valid contract between Systematix and Dye & Durham in relation to the disputed projects, beyond the high-level MSA framework. Under Ontario contract law, a binding agreement requires mutual intention to be bound and a meeting of the minds on essential terms. In a professional services context where projects were to be defined by SOWs, the court held that at least the scope of work and compensation were essential terms. For three of the four disputed projects, there were no signed SOWs and no clear independent agreements spelling out these terms. Even for the Global Billing Project, which did have a signed SOW, the estimated cost for the initial phase was approximately $1.187 million, yet by April 2023 Systematix had invoiced over $3.07 million, after which Dye & Durham instructed Systematix to stop work and the project was never completed. These facts raised serious doubt that there had been a stable consensus on scope and price even under that SOW. On this record, the judge concluded there were material disputes over whether the parties had ever truly agreed on essential terms—both as to what work was to be done and what compensation was payable. Those disputes required live evidence and credibility assessments at trial and could not be resolved summarily, even with enhanced powers.

Whether Systematix complied with any contractual obligations

As an alternative holding, the court found that even if a valid contract existed, there remained a genuine issue requiring trial as to whether Systematix performed in accordance with the agreed contractual framework. The MSA and SOWs required detailed work logs, monthly project reports, and clear approvals for changes in scope and overtime. Yet Systematix had not produced the mandated reporting, timesheet support was incomplete or internally self-approved, and there was almost no documentary evidence of Dye & Durham approving material scope expansions or significant overtime. The court was not satisfied that Systematix had adequately demonstrated what work was actually done, what was properly in scope, or what was compensable. This independently supported the conclusion that a trial was required to resolve whether Systematix was entitled to payment of the claimed outstanding invoices.

Jurisdiction challenge by the UK defendants

Separately, the UK-based entities—Dye & Durham (UK) Holdings Limited and Dye & Durham (UK) Limited—brought a motion challenging the Ontario court’s jurisdiction. Both are UK-based subsidiaries: the holding company has no operations and holds only the shares of the UK operating entity. Systematix alleged that they were parties to the MSA and SOWs relating to UK projects and advanced breach of contract, unjust enrichment, and quantum meruit claims. Applying the Supreme Court of Canada’s framework in Club Resorts Ltd. v. Van Breda, the court examined the recognized presumptive connecting factors: whether the defendants were domiciled or resident in Ontario, carried on business in Ontario, committed a tort in Ontario, or entered into a contract connected with the dispute that was made in Ontario. Systematix argued primarily that a contract connected with the dispute had been made in Ontario and, alternatively, that unjust enrichment provided a jurisdictional basis.

Absence of contractual and tortious connecting factors

The court rejected the suggestion that any contract with the UK defendants had been made in Ontario or at all. The MSA was between Systematix and Dye & Durham Corporation alone, not the UK entities. The MSA contemplated services being provided to Dye & Durham, invoices being issued to Dye & Durham, and payment obligations existing only as against Dye & Durham. In practice, all invoices were sent to and paid by the Canadian parent; Systematix had never invoiced the UK entities or demanded payment from them before litigation. Similarly, the SOWs were only between Systematix and Dye & Durham; Systematix’s representative acknowledged on cross-examination that the UK entities were not signatories and were not parties to any SOWs or draft SOWs. Although the Spider Project involved work on a UK-used application, the UK entities were not parties to the MSA or SOW, did not receive invoices, and that project was not even the subject of the unpaid amounts being claimed. The court also noted that the claim did not plead any tort at all, so there was no basis to argue that a tort had been committed in Ontario. These findings eliminated two of the core Van Breda connecting factors.

Unjust enrichment and the attempt to expand jurisdiction

Systematix further contended that its unjust enrichment claim against the UK entities could ground jurisdiction based on the location of its “corresponding deprivation” in Ontario, where its head office is located. It argued that unjust enrichment is conceptually similar to tort (involving a “wrong” and resulting harm) and to contract (involving a transfer of value), and that the place where the plaintiff suffers deprivation should itself be treated as a presumptive connecting factor. The court reviewed authorities, including Thompson, Knowles, and Postans, and held that they did not establish such a standalone connecting factor. In Thompson, deprivation in Ontario was one factor among several, including the defendant’s connection to Ontario and considerations of fairness, and the decision pre-dated Van Breda. In Knowles, the Ontario Court of Appeal upheld jurisdiction based on the location of property in Ontario, not the location of deprivation, and explicitly declined to decide whether deprivation could itself be a presumptive factor. In Postans, the Alberta court considered location of enrichments and deprivations but again in combination with other factors, notably the situs of property. The judge concluded that post-Van Breda Ontario case law did not recognize the plaintiff’s deprivation location as a presumptive connecting factor in unjust enrichment, and adopting such a factor would effectively allow plaintiffs to use unjust enrichment as a jurisdictional “back door” whenever they suffered economic harm in Ontario, undermining the Supreme Court’s jurisdiction framework.

Final rulings and practical outcome

In the result, the court dismissed Systematix’s motion for summary judgment against Dye & Durham. There were genuine issues requiring a full trial as to whether a valid contract existed for the disputed projects and, even if so, whether Systematix had complied with its contractual obligations on scope, billing, reporting, and approvals. The evidentiary record was too conflicted and incomplete to allow the court to make the necessary factual findings on a paper record. On the jurisdiction motion, the court granted the UK defendants’ request, holding that Ontario courts lacked jurisdiction over Systematix’s claims against them because no recognized presumptive connecting factor was established and unjust enrichment could not by itself create one. As a result, the claims against the UK defendants were dismissed for want of jurisdiction. The endorsement did not fix any specific damages, debt, or cost award in favour of any party. Systematix did not obtain any monetary judgment, and the court instead encouraged the parties to attempt to agree on costs within 30 days, failing which a timetable for written costs submissions would be set. Consequently, the successful parties on these motions—Dye & Durham Corporation on resisting summary judgment and the UK defendants on jurisdiction—received no quantified monetary award at this stage, and the exact amount of any costs or damages ordered in their favour cannot be determined from this decision.