COURT OF APPEAL SUMMARIES (JUNE 11-15)

Hello again.

Please find below our summaries for this week’s civil decisions of the Ontario Court of Appeal.

In Mancinelli v Royal Bank of Canada, the class plaintiffs had sought to add BMO and TD as party defendants to their claim against other financial institutions for conspiracy and price fixing in the foreign exchange markets. Justice Perrell had dismissed the plaintiffs’ motion, having found that class counsel could have, through “reasonable diligence”, discovered BMO and TD’s possible involvement in the secret conspiracy. He made that finding even though there was apparently no public document referencing BMO and TD’s possible involvement, and the first mention of their involvement was by UBS, one of the co-conspirators, after it had entered into a settlement with the class plaintiffs. The Court reversed Justice Perrell’s decision, finding that he had held class counsel to too high a reasonable diligence standard without a proper evidentiary foundation.

In Thunder Bay (City) v. Canadian National Railway Company, the Court was faced with reviewing the lower court’s interpretation of a contract entered into in 1906 between the Town of Fort William and the Grand Trunk Railway regarding the railway’s obligations to maintain a bridge “in perpetuity” for use by “vehicular traffic”. CN, which inherited the agreement, closed the bridge to cars and trucks (which had used the bridge for a century) and argued that the extensive structural changes needed to reopen the bridge for use by cars and trucks fell outside the definition of “maintenance”. It also argued that the meaning of “vehicular traffic” in 1906 only included streetcars, horses and carts, not cars and trucks. The lower court had found in favour of CN, but the Court of Appeal reversed the decision, finding the application judge’ s interpretation unreasonable. In doing so, the Court held that cars and truck traffic was within the contemplation of the drafters of the agreement in 1906, as the beginning of the age of the automobile was only a few years away.

Other topics covered this week included automobile insurance coverage in the leasing context, family law, limitation periods in the breach of contract context, the need for expert evidence on the standard of care on a summary judgment motion in the professional negligence context, administrative law in the software development tax credit context, and vexatious litigants.

I hope everyone is enjoying the weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2053

https://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

Ahmad v Ahmad, 2018 ONCA 536

Keywords: Family Law, Custody and Access, Support, Equalization of Net Family Property

Kowalsky v Asselin-Kowalsky, 2018 ONCA 539

Keywords: Family Law, Support, Equalization, Practice and Procedure, Extension of Time to Appeal, Delay, Incapacity, Fresh Evidence, Sengmueller v Sengmueller, 1994 CarswellOnt 374

Thunder Bay (City) v Canadian National Railway Company, 2018 ONCA 517

Keywords: Contracts, Interpretation, Standard of Review, Extricable Errors of Law, Unreasonableness

Coast Capital Equipment Finance Ltd v Old Republic Insurance Company of Canada, 2018 ONCA 540

Keywords: Contracts, Automobile Insurance, Interpretation, Third Party Liability, Leased Vehicles, Insurance Act, section 5.1, OPCF 25, OPCF 5 Endorsement

Mancinelli v Royal Bank of Canada, 2018 ONCA 544

Keywords: Torts, Conspiracy, Competition Law, Price Fixing, Civil Procedure, Class Actions, Limitation Periods, Discoverability, Limitations Act, 2002, SO 2002, c 24, Sched B, s 5(1)

Davies v Davies Smith Developments Partnership, 2018 ONCA 550

Keywords: Contracts, Partnership Agreements, Breach, Civil Procedure, Limitation Periods, Discoverability, Damages, “Appropriate Means”, Limitations Act, 2002, SO 2002, c 24, Sched B, s.5

McPeake v Cadesky & Associates, 2018 ONCA 554

Keywords: Professional Negligence, Expert Evidence, Summary Judgement, Income Tax Act, s 75(2), Rules of Civil Procedure, rr. 20.04(2.1), (2.2), Connerty v Coles, 2012 ONSC 5218

Pong Marketing and Promotions Inc. v Ontario Media Development Corporation, 2018 ONCA 555

Keywords: Administrative Law, Taxation, Income Tax Credits, Statutory Interpretation, Specialized Tribunals, Standard of Review, Reasonableness, Taxation Act, 2007, S.O. 2007, c. 11, Schedule A, s. 34.

Susin v Susin, 2018 ONCA 549

Keywords: Estates, Civil Procedure, Appeals, Security for Costs, Orders, Setting Aside, Costs, Vexatious Litigants, Frivolous and Vexatious Proceedings, Abuse of Process, Rules of Civil Procedure, Rule 2.1.02(1)

For short civil decisions click here

For criminal and regulatory/ review board decisions click here

Civil Decisions

Ahmad v Ahmad, 2018 ONCA 536

[MacPherson, LaForme, and Roberts, JJA]

Counsel:

NA, acting in person

Robert A. Fernandes, for the respondent

Keywords: Family Law, Custody and Access, Support, Equalization of Net Family Property

Facts:

The appellant and respondent married in 2000 in Pakistan. They had three children and immigrated to Canada in 2013. Days later, the appellant left Canada which the trial judge treated as the day of separation. The appellant returned to Canada in 2015 and commenced family law proceedings seeking divorce, custody, support and equalization of net family property. The respondent commenced claims of her own. The self-represented appellant appeals a trial judgment granting the respondent sole custody of their three children with regular access to the applicant, monthly child support payments to be made by the appellant based on an imputed income, and an equalization payment to be made by the appellant.

Issues:

(1) Did the trial judge err by not including certain hours for religious/festive occasions in his access time?

(2) Did the trial judge err by including the appellant’s Pakistan pension and/or over-valuing this pension?

(3) Did the trial judge err by attributing real property in Pakistan and jewelry for equalization purposes?

(4) Was the trial judge biased in favour of the respondent?

Holding:

Appeal dismissed.

Reasoning:

Overall, the appellant failed to demonstrate that the trial judge committed a palpable or overriding error regarding a material fact. The trial judge’s analysis on all of the issues was thorough, reasonable and grounded in the evidence available to him.

(1) No. The trial judge’s conclusions regarding custody and access were made in the best interests of the children.

(2) No. The trial judge’s imputation of income to the appellant was necessary because the appellant had been less than forthright in his evidence and the trial judge was thus required to use the best evidence available to the court.

(3) No. The trial judge’s equalization findings required third party confirmation due to the appellant’s own lack of credibility.

(4) No. A review of the transcript and record reveals no evidence of bias. The trial judge was careful to ensure that the appellant had every opportunity to present his case. A finding of a lack of credibility does not translate into bias.

Kowalsky v Asselin-Kowalsky, 2018 ONCA 539

[MacPherson, LaForme and Roberts JJ.A.]

Counsel:

Patrick J. Kraemer, Justine A. Dalton and Michael A. van Bodegom, for the appellant

Kim S. Killer and Ainsley Hunter, for the respondent

Keywords: Family Law, Support, Equalization, Practice and Procedure, Extension of Time to Appeal, Delay, Incapacity, Fresh Evidence, Sengmueller v Sengmueller, 1994 CarswellOnt 374

Facts:

This is an appeal from an order determining the issues of equalization, child support and spousal support (“the final trial order”), and from an order dismissing a motion to set aside the final trial order. This appeal involves orders that were granted over ten years ago. It is equally exceptional because the entire passage of time can be explained by the evidence of the appellant’s prolonged history of serious mental health issues, which the court accepted as the basis for granting the appellant an extension of time to appeal in September 2017. The respondent instigated proceedings in 2005 to obtain a divorce and to determine the issue of equalization of the parties’ net family property. The appellant raised claims for child and spousal support. The parties were granted a divorce in 2006. The appellant failed to appear at trial for the remaining issues and the trial proceeded in her absence. Her brother attended and advised that the appellant’s health did not permit her to attend. The appellant’s subsequent motion to set aside the final trial order was dismissed in 2008, when she again failed to attend. The appellant submits that she was unable to attend the trial or her motion because she was physically and mentally incapable of doing so. She maintains that justice requires that the final trial order and the order of the motion judge be set aside.

Issues:

(1) Should the appellant’s fresh evidence be admitted before proceeding with argument on the merits?

(2) Was the appellant incapable of attending the trial and her motion?

(3) Should the decisions under appeal be set aside?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The appellant’s fresh evidence should be admitted because it satisfies all of the criteria for its admission: it could not have been provided before trial; it is credible; and it is conclusive of the main issue on this appeal, namely, whether the justice of the case requires that the orders under appeal be set aside in order to prevent an unjust result: Sengmueller v Sengmueller, 1994 CarswellOnt 374, at para 34.

(2) Yes. A fundamental purpose of the appellant’s fresh evidence was to explain her absence at trial and her motion. To succeed on her appeal, her explanation must be sufficiently cogent that it credibly excuses her absence and that it would be procedurally unfair to allow the trial and motion orders to stand. However, there is no requirement that she prove a certain level of incapacity including one that rises to the definition under the Substitute Decisions Act, SO 1992, C 30 or the Mental Health Act. It was within days of the trial that the appellant was found incapable and involuntarily hospitalized. The appellant lacked the capacity to prepare for and attend at trial and the motion, which resulted in disastrous financial consequences for her. The outcome would likely have been dramatically different had the appellant been present, and had she been given the opportunity to challenge the respondent’s evidence with her own evidence and through cross-examination and submissions.

(3) Yes. In these highly unusual circumstances justice requires that the final trial order and order of the motion judge be set aside. The garnishment order, which flows from these, must also be set aside and the garnished monies in the amount of $248,609 plus interest paid back to the appellant. However, the merits of the family law proceeding must be determined at a new trial. The Court is not in a position to determine the issues of equalization, and child and spousal support, all of which require credibility assessments and finding of fact.

In the result, the appeal was allowed, the final trial order was set aside, the garnishment order was set aside, and an order was made that the issues of equalization and support be determined at a new trial. Given the age of these proceedings, it is in the parties’ best interests that the trial should be case-managed and expedited. The appellant was entitled to partial indemnity costs of this appeal, including the motion for an extension of time and the fresh evidence motion.

Thunder Bay (City) v Canadian National Railway Company, 2018 ONCA 517

[Laskin, MacPherson and Fairburn JJ A]

Counsel:

C Matthews and S Sood, for the appellant

G Pratte, N Effendi and D Ault, for the respondent

Keywords: Contracts, Interpretation, Standard of Review, Extricable Errors of Law, Unreasonableness

Facts:

This appeal concerns the interpretation of an agreement made in 1906 for the construction of a bridge across the Kaministiquia River in Thunder Bay. The parties to the agreement were the Town of Fort William, now amalgamated into the appellant, the City of Thunder Bay, and the Grand Trunk Pacific Railway, now the respondent Canadian National Railway Company (“CN”).

Grand Trunk Pacific built the Bridge, completing it in 1909. The Bridge is a combined railway and roadway bridge. The Bridge remained open for railway trains, cars, trucks, and people for over 100 years. However, in 2013, CN briefly closed the Bridge because of a fire. The fire caused only minor damage and CN reopened the Bridge three days later. But it reopened the Bridge only for railway trains and pedestrians, not for motor vehicles. It claimed that the Bridge could not safely be reopened for motor vehicles because of the risk an “errant” or wayward vehicle would leave the roadway, go across the sidewalk and into the river.

When CN refused to reopen the Bridge for vehicles, Thunder Bay brought an application for a determination of its contractual rights under the 1906 Agreement. Two provisions of this Agreement are central to this appeal: section 3, in which Grand Trunk Pacific agreed to give Fort William “the perpetual right to cross the said bridge for street railway, vehicle and foot traffic”; and section 5, in which CN agreed to “maintain the bridge in perpetuity”.

Before the application judge, Thunder Bay took the position that CN is in breach of its contractual obligation to keep the Bridge open perpetually for vehicles. CN took the position that it could not do so safely without making significant structural changes to the Bridge, which were beyond its obligation to “maintain” under s. 5 of the Agreement. The application judge sided with CN.

On its appeal, Thunder Bay contends that the lower court’s findings are tainted by legal error or are unreasonable. It submits that the parties intended that the citizens of Thunder Bay would have the perpetual right to cross the Bridge by any kind of vehicle and that CN has the obligation to maintain the Bridge in perpetuity. CN contends that the application judge made no legal error, his findings are supported by the evidence, and so appellate intervention is not warranted.

Issues:

(1) Is the application judge’s finding on the parties’ intent tainted by “extricable” errors of law or is it unreasonable?

(2) Did the application judge err in law by holding that Thunder Bay had the onus to give the court a specific and detailed proposal to make the Bridge safe for motor vehicles?

Holding: Appeal allowed.

Reasoning:

(1) Yes, the application judge’s findings were unreasonable and, in addition, were tainted by two extricable errors of law:

(a) Unreasonableness: The application judge’s finding is unreasonable because he failed to give proper effect to the words of the 1906 Agreement or to the context in which the Agreement was made. In this case, the central debate was over the meaning of the words “vehicle traffic” or “vehicular traffic” in the 1906 Agreement, and the parties’ intent in using these words. The application judge interpreted the words narrowly to mean only the vehicle traffic that existed in 1906 – streetcars, horses, and carts. The full context in which the 1906 Agreement was signed unquestionably supports the broad interpretation of vehicle traffic that includes the motorcar. Three contextual considerations are important in interpreting the meaning of vehicle or vehicular traffic in the 1906 Agreement: (i) the purpose of both the 1905 and the 1906 Agreements (to accommodate population growth); (ii) the reasonable expectations of the parties in entering into the 1906 Agreement (that population growth would result in greater transportation needs); and (iii) the coming of the automobile era (back in 1906, the parties can reasonably have been taken to know that soon, not even many years in the future, automobiles would become the predominant mode of road travel).

(b) Error in law #1: In interpreting the 1906 Agreement, the application judge committed an extricable error of law by failing to give any effect to the words “perpetual” and “in perpetuity”. The right to cross the Bridge perpetually, and the obligation to maintain the Bridge in perpetuity, can only mean that the parties intended the Bridge to be open for any kind of vehicle as the word “vehicle” is not defined or limited to any particular kind of vehicle.

CN draws a distinction between maintaining the Bridge and making structural changes to the Bridge. CN contends that making the Bridge safe for cars and trucks would require structural changes to the Bridge, changes that exceed its maintenance obligation under section 5 of the Agreement. But the court viewed the distinction between maintenance and structural changes to be of little practical consequence. As the application judge found, CN consistently took the position that the many repairs and upgrades it has made to the Bridge over the years were matters of maintenance, not structural changes. Yet those repairs and upgrades, all falling within CN’s maintenance obligation, have been sufficient to allow cars and trucks to drive safely across the Bridge. CN’s position is tantamount to relying on the doctrine of frustration of contract to excuse its breach. CN is seeking to show that the 1906 Agreement, at least for vehicle traffic, has become “incapable of being performed”. That argument, however, is not available to it in this proceeding because the application judge made no finding that the 1906 Agreement was at an end, nor could he. He did not even make a finding that CN was incapable of performing its contractual obligation. CN must therefore comply with the 1906 Agreement and reopen the Bridge for cars and trucks after making whatever maintenance repairs and upgrades it thinks necessary to maintain the risk to public safety at an acceptable level.

(c) Error in law #2: The application judge also committed an extricable error of law by taking into account the subsequent conduct of the parties, though the meaning of the 1906 Agreement is not ambiguous. If any relevant ambiguity exists in the meaning of the 1906 Agreement, that ambiguity relates not to the scope of CN’s maintenance obligation, but to the meaning of vehicle traffic. On this question, the subsequent conduct of the parties, especially CN itself, resolves any ambiguity. The subsequent conduct of CN in maintaining the safe operation of the roadways on the Bridge for the exclusive use of cars and trucks supports Thunder Bay’s position that vehicle traffic in the 1906 Agreement was meant to include the advent of motor vehicle traffic.

(2) Yes, the application judge erred in law by placing an onus on Thunder Bay to provide a proposal to make the Bridge safe for motor vehicles. CN has a contractual obligation to maintain the Bridge for motor vehicles in perpetuity, an obligation it has breached. To rectify its breach, CN must reopen the Bridge; it therefore has the onus to determine what maintenance is needed to alleviate any safety concerns associated with the Bridge’s reopening under the Bridge Maintenance Program mandated by the Railway Safety Act, RSC, 1985, c 32 (4th Supp.) and Transport Canada.

Accordingly, the court made the following order:

(a) A declaration that CN has breached the 1906 Agreement.

(b)  Requiring CN to reopen the Bridge for vehicle traffic and maintain the Bridge in accordance with the 1906 Agreement.

Coast Capital Equipment Finance Ltd v Old Republic Insurance Company of Canada, 2018 ONCA 540

[Rouleau, van Rensburg and Pardu JJ.A.]

Counsel:

Caroline Gronke, for the appellant

Patrick Monaghan, for the respondent

Keywords: Contracts, Automobile Insurance, Interpretation, Third Party Liability, Leased Vehicles, Insurance Act, section 5.1, OPCF 25, OPCF 5 Endorsement

Facts:

This appeal concerns a dispute between a lessor of a vehicle, Coast Capital Equipment Finance Ltd. (“Coast Capital”), and an insurer as to whether the lessor is insured for third party liability under a policy of automobile insurance. The appeal turns on the construction of a Certificate of Automobile Insurance and an Ontario Policy Change Form (“OPCF”) 25 Change Form, both issued by the respondent, Old Republic Insurance Company of Canada (“Old Republic”).

An OPCF 23A endorsement provides for payment to a lienholder in the event of damage to the vehicle. An OPCF 5 endorsement expressly allows a lessor to rent or lease a motor vehicle to a lessee who has completed an Ontario Application for Automobile Insurance – Owner’s Form, and also provides coverage to a lessee as if the lessee were the named insured. It is common ground that if that endorsement is part of the policy, both the lessor and the lessee benefit from third party liability insurance.

A trucking company leased two tractors from Coast Capital. Old Republic issued an OPCF 25 Change Form showing the trucking company as the insured, and listing the two tractors. The OPCF 25 Change Form made no mention of either the OPCF 5 or OPCF 23A endorsements. One of the tractors was involved in a motor vehicle accident and it was Old Republic’s position that it was not required to respond to the loss.

The application judge concluded that while the OPCF 23A endorsement was part of the policy, the OPCF 5 endorsement was not and Coast Capital was not entitled to liability coverage. He stated repeatedly that the OPCF 5 endorsement was never part of the Certificate or added by the OPCF 25 Change Form. He did not address the significance of the phrase “AS PER OPCF 5 FORMS” contained in the Certificate.

Issues:

(1) Is the OPCF 5 endorsement part of the Certificate?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court concluded that the OPCF 5 endorsement is part of the Certificate. No deference is owed to the application judge’s decision as he did not address this additional language in the Certificate upon which this appeal turns.

The court emphasized that section 5.1 of the Insurance Act provides that a certificate issued under subsection (5) is “of the same force and effect as if it were the standard policy, subject to the limits and coverages shown by the insurer on the certificate and any endorsements issued with or subsequently to the certificate.”

Following the hearing, the panel requested that the parties provide copies of the forms approved for use at the relevant times. The material submitted following the hearing demonstrates that the Superintendent approved a form of Certificate of Automobile Insurance for the relevant time, and has also approved a custom form of Certificate of Automobile Insurance submitted for approval by Old Republic (the “Approved Certificate”). The Approved Certificate did not contain the phrase “AS PER OPCF 5 FORMS”. This phrase must have been added to the Certificate by Old Republic. If added for this particular transaction, it leads readily to the inference that the Certificate was intended to provide coverage to both the lessor and the lessee.

The court concluded that the insurer intended to provide liability coverage to both the lessor and lessee. The OPCF 25 Change Form did not delete that coverage, but added new vehicles. Absent deletion of the OPCF 5 coverage, the court concluded that Coast Capital is entitled to the benefit of that coverage. Old Republic’s insertion of the OPCF 5 language into the Certificate accords with the commercial reality of the transaction.

The trucking company leased multiple vehicles, to the knowledge of the insurer. It makes commercial sense for the lessors who were financing the purchase of the vehicles to protect themselves from liability as the owners of those vehicles when they would have no control over the trucking company operations.

Mancinelli v Royal Bank of Canada, 2018 ONCA 544

[Hoy A.C.J.O., Brown and Trotter JJ.A.]

Counsel:

Kirk M Baert, Celeste Poltak and Louis Sokolov, for the appellants

Lara Jackson, Wendy Berman and Christopher Horkins, for the respondents, the Bank of Montreal, BMO Financial Corp., BMO Harris Bank N.A., BMO Capital Markets Limited (collectively “BMO”)

Paul Le Vay, Brendan van Niejenhuis and Benjamin Kates, for the respondents, Toronto Dominion Bank, TD Bank, N.A., TD Group Holdings, LLC, TD Bank USA, N.A. and TD Securities Limited (collectively “TD”)

Keywords: Torts, Conspiracy, Competition Law, Price Fixing, Civil Procedure, Class Actions, Limitation Periods, Discoverability, Limitations Act, 2002, SO 2002, c 24, Sched B, s 5(1)

Facts:

This is an appeal from the motion judge’s order dismissing the appellants’ motion to add the respondents, BMO and TD, as defendants in an existing class action alleging a secret conspiracy to manipulate the foreign exchange market.

The appellant, CS, commenced an action against sixteen (16) groups of financial institutions in September 2015, alleging a price-fixing conspiracy in the foreign exchange or foreign currency market between January 1, 2003 and December 31, 2013. The statement of claim included allegations that the defendants (including the proposed defendants) actively attempted to conceal their participation in the conspiracy by, among other things, engaging in secret communications.

The first group of defendants to settle consisted of UBS AG, UBS Securities LLC and UBS Bank (Canada) (collectively “UBS”). The settlement required UBS to cooperate with the appellants. In fulfilling that obligation, UBS gave an evidentiary proffer on May 24, 2016 (the “Proffer”).

On July 20, 2016, CS brought a motion under r. 5.04(2) and r. 26.01 of the Rules of Civil Procedure to add the respondents to the action. The respondents opposed the motion on the basis that the claim against them was barred by the Limitations Act, 2002, SO 2002, c 24, Sched B (the “Act”) and the Competition Act, RSC 1985, c C-34. The defendants did not file a statement of defence and no discovery had taken place at the time the motion was heard.

Class counsel’s evidence on the motion was that they learned of BMO and TD’s involvement in the alleged conspiracy for the first time at the Proffer. UBS advised class counsel that it reviewed approximately 2,000 collusive chats dating as far back as 2008 and that foreign exchange traders at BMO and TD were among the persons participating in those chats. Additionally, class counsel submitted evidence that from the time prior to the commencement of the action to the date of the Proffer, the appellants conducted their own investigations into the alleged conspiracy. However, there was no public information available that referred to or mentioned BMO or TD as being involved.

In dismissing the appellants’ motion, the motion judge acknowledged that there was no evidence that any public documents identified BMO or TD as being involved in the alleged conspiracy. The motion judge thus accepted that the appellants did not know they had a conspiracy claim against the respondents until the Proffer. Nevertheless, the motion judge found as a fact, at para. 61, that the appellants’ evidence on the motion was “insufficient to establish that they behaved as reasonable person[s] in the same or similar circumstances to identify [the respondents] as conspirators and the evidence rather establishes that their identity could have been established with reasonable diligence before the expiry of the limitation period.”

Issue:

(1) Did the motion judge err in dismissing the appellants’ motion on the basis that their claim against the respondents was statute-barred?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court held that the motion judge erred in principle by establishing too high an evidentiary threshold on the motion before him. Additionally, the court found that the motion judge further erred by finding that the appellants could have identified the respondents with due diligence in the absence of any evidentiary foundation and by failing to determine with sufficient precision when they ought to have discovered the claim.

The court held that on a motion to add defendants in a class action alleging a secret conspiracy before any statements of defence had been filed or any discoveries had taken place, the motion judge required the appellants to meet too high of an evidentiary threshold. The appellants provided a reasonable explanation as to why they could not have identified the respondents as co-conspirators before July 20, 2014. Moreover, the respondents led no evidence of any further reasonable steps the appellants could have taken before that time.

Additionally, the court held that a plaintiff’s failure to take reasonable steps to investigate a claim is not a stand-alone or independent ground to find a claim out of time. Rather, the reasonable steps a plaintiff ought to take is a relevant consideration in deciding when a claim is discoverable under s. 5(1)(b) of the Act. On the facts, there was no evidentiary foundation for the motion judge’s finding that the respondents’ identities as co-conspirators could have been established with reasonable diligence. Nor did the motion judge determine with sufficient precision when the appellants ought to have discovered that they had a claim.

Consequently, the court held that these issues required consideration on a summary judgment motion or at trial. Accordingly, the motion judge should have permitted the appellants to add the respondents as defendants, and reserved the respondents’ right to plead a limitation defence.

Davies v Davies Smith Developments Partnership, 2018 ONCA 550

[Strathy C.J.O, Feldman and Brown JJ.A.]

Counsel:

John E.F. Gibson and Paul Bates, for the appellant

Evan L. Tingley, for the respondent

Keywords: Contracts, Partnership Agreements, Breach, Civil Procedure, Limitation Periods, Discoverability, Damages, “Appropriate Means”, Limitations Act, 2002, SO 2002, c 24, Sched B, s.5

Facts:

The appellant retired from a partnership. The partners signed an agreement which called for his equity and his share in the profits to be paid to him between June 2005 and June 2008 according to a schedule of payments. The payments were not made at the times set out in the schedule because the respondent did not have sufficient funds to pay. There were also disagreements over the quantification of the appellant’s share of the profits. The appellant commenced litigation in 2012, four years after the date the payments were to be made. The trial judge found that the appellant’s action was time-barred. His claim was “discovered”, within the meaning of s. 5 of the Limitations Act, 2002 when he did not receive the payments. He knew in July 2008 that he had suffered injury, loss or damage; that the damage was caused by the failure of the respondent to make the payments; and that it was legally appropriate to commence an action. The trial judge dismissed the appellant’s action.

Issue:

  1. Did the trial judge err in finding that the limitation period had expired?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge did not err in finding that the limitation period had expired. The appellant made four submissions: (a) the amount owing to the appellant was in dispute; (b) the profits could not be ascertained until the partnership’s projects had been completed; (c) an action was not an “appropriate” means to remedy the appellant’s loss because the respondent had insufficient funds; and (d) there had been forbearance or novation, making it inappropriate to commence an action. The appellant argued that the claim was not discovered until 2011, when he realized that the respondent had made improper charges to his capital account. In regard to the first two submissions, the Court of Appeal found that the appellant confused “damage” with “damages”. The appellant knew by the end of June 2008 that he had suffered damage, even though the amount of his damages was a matter of dispute and had not been quantified. The appellant’s third submission that the respondent did not have the funds to pay did not stop the limitation period from running. The word “appropriate”, as it appears in s 5 of the Limitations Act, means “legally appropriate”. The appellant cannot rely on his own tactical reasons for the delay. In regard to the fourth submission, there is no evidence that the parties agreed to amend the agreement or to replace it with a new agreement. The answer to this submission is: (a) it was not pleaded; (b) because it was not pleaded, no evidence was adduced with respect to it; and (c) the issue was not argued in the court below.

McPeake v Cadesky & Associates, 2018 ONCA 554

[Juriansz, Benotto, and Fairburn, JJA]

Counsel:

Yan David Payne and Karen J Sanchez for the appellant

Sandra E Dawe for the respondent Cadesky & Associates

Alfred J Esterbauer and Sydney Hodge for the respondent BS

Geoffrey D E Adair for the third party

Keywords: Professional Negligence, Expert Evidence, Summary Judgement, Income Tax Act, s 75(2), Rules of Civil Procedure, rr. 20.04(2.1), (2.2), Connerty v Coles, 2012 ONSC 5218

Facts:

In 1999, the appellant and two associates sold their company to Microsoft. Approximately $4.8 million of the proceeds was received by the appellant’s family trust. The Canada Revenue Agency (“CRA”) attributed all the gains in the family trust to the appellant personally, and reassessed him for some $2.4 million in taxes, interest and penalties in accordance with s. 75(2) of the Income Tax Act. The Federal Court of Appeal later ruled that the CRA’s interpretation of s. 75(2) was incorrect, and concluded it did not apply to property acquired by a trust from a beneficiary in a bona fides sale transaction. The appellant’s tax liability was reduced to approximately $57,000.

The appellant commenced an action against the respondent Cadesky & Associates (“Cadesky”) for professional negligence in its accounting services to the appellant’s company. The motion judge dismissed the appellant’s claim against BS as establishing no genuine issue for trial. The motion judge was satisfied there was a genuine issue for trial as to whether Cadesky was retained with regard to the formation of the family trust or the preparation of the family trust deed. However, she was satisfied that she could determine the issue by resorting to the summary judgement fact-finding powers set out in Rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure. The motion judge found that the parties both failed to file expert evidence regarding the standard of care of an accountant in the circumstances and, in so doing, determined there was no genuine issue for trial because the case did not fall within the exception to this general rule requiring expert evidence to support a claim for professional negligence.

Issues:

(1) Did the motion judge err in requiring the appellant to file expert evidence to support a professional negligence claim on a summary judgement motion?

(2) Did the professional’s conduct fall obviously short of the standard of care and thus meet the general exception to the rule?

(3) Did the motion judge err in finding that the appellant had not filed adequate expert evidence?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellant relied on Connerty v Coles, 2012 ONSC 5218 [Connerty] to support his position that a plaintiff need not file expert evidence to support a professional negligence claim when defending a summary judgment motion. In Connerty, the Superior Court had deteremined that the need for expert evidence on summary judgment motions will be a product of the particular factual circumstances in each case. In this case, the motion judge had before her extensive evidence and was able to develop a full appreciation of the facts and so it was appropriate to file expert evidence. The motion judge did not err in her consideration of Connerty.

(2) No. The motion judge recognized the existence of the general rule but found that this was not a case where the professional’s conduct obviously fell below the standard of care. Evidence of the standard of care in the circumstances was required and there is no basis to interfere with the motion judge’s refusal to resort to the exception to the general rule.

(3) No. The evidence to which the appellant points as qualifying as expert evidence was not expert evidence.

Pong Marketing and Promotions Inc. v. Ontario Media Development Corporation, 2018 ONCA 555

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

Lisa La Horey and Farzin Yousefian, for the appellant

Scott C Hutchinson and Kenneth Grad, for the respondent

Keywords: Administrative Law, Taxation, Income Tax Credits, Statutory Interpretation, Specialized Tribunals, Standard of Review, Reasonableness, Taxation Act, 2007, S.O. 2007, c. 11, Schedule A, s. 34.

Facts:

The Ontario Media Development Corporation (“OMDC”) is an agency of Ontario’s Ministry of Tourism, Culture and Sport. Its purpose is to promote innovation, investment and employment in the cultural media industry in Ontario. Further to that objective, it jointly administers, alongside the Canada Revenue Agency, the Ontario Interactive Digital Media Tax Credit (“DMTC”), a tax credit provided to developers for digital products whose primary purpose is to “educate, inform or entertain the user”.

Pong Marketing and Promotions Inc. (“Pong”) applied to the OMDC for a Certificate of Eligibility for a DMTC of approximately $2 million for its development of 15 digital “sweepstakes” games, which it licenced to third party retailers. The OMDC denied Pong’s application on the basis that the games were not developed for the primary purpose of educating, informing, or entertaining the user, but rather were developed for promoting the sale of long-distance phone cards and related products and services.

Pong brought an application for judicial review, which was successful. The Divisional Court agreed that the OMDC’s decision was inconsistent with the plain meaning of the regulation governing eligibility for the DMTC, and was therefore unreasonable. It also noted that, if the OMDC’s interpretation was reasonable it would have nonetheless applied a residual presumption in favour of the interpretation of the taxpayer, Pong. It remitted the matter back to the OMDC for reconsideration.

The OMDC appealed.

Issues:

(1) Did the Divisional Court err in its interpretation of s. 34(1) of the Taxation Act – specifically, in failing to adequately defer to the OMDC’s interpretation?

(2) Did the Divisional Court err in finding in the alternative that the residual presumption in favour of taxpayers would apply and work in favour of the interpretation advanced by the respondent?

Holding:

Appeal allowed.

Reasoning:

(1) Yes. The dispute was over whether Pong’s products had the requisite characteristics as stated in section 34(1) of the Taxation Act 2007, S.O. 2007, c. 11, Schedule A, specifically, that “their primary purpose is to educate, inform or entertain the user.” The Divisional Court argued that the priority of the users’ intention in playing the games was compelled by section 34. It understood the phrase “while they are being operated” as requiring the purpose of the files to be assessed “when the user is playing it; not the moment when it is created or licensed.” From this premise, the Divisional Court concluded “[t]hat the definition requires the [OMDC] to look at the primary purpose of the game from the perspective of the player.” They determined that Pong’s marketing material and licence agreement templates did not shed any light on the users’ purpose in playing the games, but only evidence Pong’s motivation for developing the products.

The Divisional Court accordingly found the OMDC’s decision to be inconsistent with “the plain meaning of the wording of the [Regulation]”, which required “primary purpose” to be assessed as the purpose of a person playing the games. The purpose of a person playing the games was to be entertained, therefore the purpose of the games was to entertain. In support of this conclusion, it further held that because “the legislature intended to use the tax credit to assist high-technology, knowledge-based industries”, the OMDC’s focus on the purpose of the developer in creating the games “undermines legislative intent.”

The Court of Appeal found that all the Regulation directs is that the OMDC ascertain the primary purpose of a product by determining what functions the digital files perform when they are being operated. Nothing in the text directs that the user’s purposes in playing the games must take priority over any other purpose the products serve.

In assessing what it is the digital files do when they are being operated, the OMDC considered the documentation that it received from the respondent, including promotional materials and licencing agreements. These provided some evidence of the purposes of the digital files by providing evidence of what the developer intended for them to do, and how they were to do it, when they were being operated. As these materials clearly stated, the games were marketed to retailers not for the purpose of entertaining users as an end in itself, but to be used, when operated, as a means to a further, more ultimate end of inducing users to purchase phone cards from the retailers.

To succeed on the appeal the OMDC did not need to establish that its interpretation of the Regulation was more plausible than the one identified by the majority. All it needed to do was establish that its interpretation was reasonable, and that its decision flowed from the evidence before it. The court held that OMDC had established that.

(2) Yes. The Court held that where there is generality and vagueness in the context of an administrative scheme, the intention is for the decision-maker to supply a specification. The majority stated that there would often be no uniquely right answer to a question: only determinations, chosen from among equally acceptable alternatives, which could conceivably have been made differently. Where these determinations are reasonable, courts are not permitted to intervene.

In this case, the Regulation required the OMDC to determine a product’s “primary purpose” as well as whether that purpose was to “educate, inform or entertain the user”. These criteria required evaluations of what is primary, and specifications of what it means to educate, inform or entertain. Were the residual presumption to be applied in the manner suggested by Pong, it would eliminate much of the authority conveyed on the OMDC by statute. The court held this would undermine the statutory scheme and be inconsistent with the rationale for, and nature of, a reasonableness standard of review.

Susin v Susin, 2018 ONCA 549

[Strathy C.J.O., Feldman and Brown JJ.A.]

Counsel:

ES, acting in person

Margaret A. Hoy, for the responding party

Keywords: Estates, Civil Procedure, Appeals, Security for Costs, Orders, Setting Aside, Costs, Vexatious Litigants, Frivolous and Vexatious Proceedings, Abuse of Process, Rules of Civil Procedure, Rule 2.1.02(1)

Facts:

This case involves litigation among nine siblings, relating to the estate of their late father, which has been before the Court of Appeal on three prior occasions. The continued misconduct of some of the participants in the proceedings has been the subject of sanctions, notably an order made in 2008 by Quinn J., declaring JS to be a vexatious litigant. The result of the 11-year history of these proceedings is that a relatively modest estate, consisting primarily of the family home, has been dissipated, leaving behind a slew of unpaid costs orders against the appellants.

The matter before the court came by way of a motion in writing to set aside the order of Fairburn J.A., dismissing the appellants’ motion to set aside the order of Gillese J.A., which required that the appellants each pay the sum of $15,000 into court as security for the costs of their appeal.

Issues:

(1) Should the motion be dismissed under Rule 2.1.01(1)?

Holding: Motion to set aside dismissed.

Reasoning:

(1) Yes. Having considered the submissions of the parties, the motion to set aside the order of Fairburn J.A., the endorsement of Fairburn J.A., and the endorsement of Gillese J.A., as well as the history of this litigation, the court was satisfied that the motion was frivolous, vexatious and an abuse of process and, accordingly, it was dismissed pursuant to Rule 2.1.02(1).

The court was satisfied that it is appropriate to make an order pursuant to Rule 2.1.02(3)prohibiting the appellants, or any of them, from making any further motions in this proceeding without leave of a judge of the Court of Appeal. The Court required that any such motion seeking leave must be made in writing and will not be accepted unless proof of service on the respondent’s counsel is provided at the time of filing. Also, before bringing any such motion, the appellants are required to satisfy all outstanding costs orders made against them by judges of both the Court of Appeal and of the Superior Court of Justice, and shall file proof by affidavit that they have done so

Short Civil Decisions

1806700 Ontario Inc. v Dmuchowski, 2018 ONCA 557

[Strathy C.J.O., Feldman and Brown JJ.A.]

Counsel:

Muhammad Aslam Khan, acting in person

Joga Singh Chahal, for the plaintiff

Tim Gleason, for the intervenor Sandeep Singh Johal

Keywords: Civil Procedure, Appeals, Perfection of Appeals, Extension of Time, Security for Costs, Courts of Justice Act, RSO 1990, c C.43, s 7(5)

Criminal and Regulatory/ Review Board Decisions

Krivicic (Re), 2018 ONCA 535

[Feldman, Roberts and Trotter JJ.A]

Counsel:

Jill R. Presser and Jeff Marshman, amici curiae

Elvis Krivicic, acting in person

Megan Petrie, for the respondent, the Attorney General of Ontario

Keywords: Criminal Law, Criminal Harassment, Failing to Comply with a Recognizance, Ontario Review Board, NCR, Public Interest, Fresh Evidence, Criminal Code, s. 672.54, Mental Health Act, RSO 1990, c. M7

R. v Ismail, 2018 ONCA 543

[Pepall, Hourigan and Nordheimer JJ.A.]

Counsel:

Diane Condo, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal Law, Firearms Offences, Evidence, Eye Witness Testimony, Burden of Proof, Fresh Evidence, Sentencing, Mandatory Minimum, Criminal Code, s. 244(3), R. v Palmer, [1980] 1 SCR 75, R. v Lacasse, 2015 SCC 64

R. v McClennan, 2018 ONCA 542

[Doherty, Pepall and Nordheimer JJ.A.]

Counsel:

David Friesen, for the appellant

Stephen Menzies, for the respondent

Keywords: Criminal Law, Summary Convictions, Impaired Care or Control of a Motor Vehicle,  Evidence, Breathalyzer, Palpable and Overriding Error, Criminal Code, s. 258(1)(a)

R. v Patel, 2018 ONCA 54

[Doherty, Pepall and Nordheimer JJ.A.]

Counsel:

Jeffrey Rybak, for the appellant

Megan Patric, for the respondent

Keywords: Criminal Law, Fraud, Self Represented Parties, Right to Counsel, Adjournments, Charter of Rights and Freedoms s 10(b), R. v  Hazout (2005), 199 CCC (3d) 474 (Ont. CA)

R. v Noftall (Publication Ban)

[Lauwers, Pardu and Huscroft JJ.A.]

Counsel:

Nader R. Hasan, duty counsel

Edward Noftall, in person

Leslie Paine, for the respondent

Keywords: Criminal Law, Sexual Assault, Honest but Mistaken Belief in Consent, Evidence, Credibility, Demeanor, Prior Inconsistent Statements, R. v Ewanchuk, [1999] 1 SCR 330, R. v Dinardo, 2008 SCC 24, R. v J. (M.A.), 2015 ONCA 725, R. v Warren, 2016 ONCA 104

R.v R.V., 2018 ONCA 547

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

Jonathan Dawe, for the appellant

Katie Doherty, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Admissibility, Cross-Examination, DNA Evidence, Credibility, Criminal Code, ss. 276, 152,  669.2, R. v M.T., 2012 ONCA 511, R. v Seaboyer, [1991] 2 SCR 577, R. v L.S., 2017 ONCA 685 Canadian Charter of Rights and Freedoms, ss. 7, 11(d)

Simopoulos (Re), 2018 ONCA 546

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

Anita Szigeti, for the appellant Mason Simopoulos

Elena Middelkamp, for the respondent the Attorney General of Ontario

Keywords: Criminal Law , NCRMD, Ontario Review Board, Criminal Harassment, Failure to Comply With Recognizance, Substance Abuse, Medical Marijuana

R.v Ruthowsky, 2018 ONCA 552 (Publication Ban)

[Paciocco J.A. (Motion Judge)]

Counsel:

Gregory Lafontaine, for the applicant

Michael Perlin, for the respondent

Keywords: Criminal Law, Bribery, Attempt to Obstruct Justice, Breach of Trust, Bail Pending Appeal, Public Interest, Reasonable Apprehension of Bias, Criminal Code, ss 679(3), 679(10), R. v Oland, 2017 SCC 17, R. v Manaserri, 2013 ONCA 647

R. v N.B., 2018 ONCA 556

[Laskin and Pepall JJ.A. and Gans J. (ad hoc)]

Counsel:

Anthony Moustacalis, for the appellant

Michael Bernstein and Frank Au, for the respondent

Keywords: Criminal Law, First Degree Murder, Forensic Evidence, Youth Criminal Justice Act, S.C. 2002, c.1, s. 146(2), Canadian Charter of Rights and Freedoms, s 10(b), R. v Azzam, 2008 ONCA 467

R. v Klimitz, 2018 ONCA 553

[Lauwers, Pardu and Miller JJ.A.]

Counsel:

David Klimitz, acting in person

Gerald Chan, appearing as duty counsel

Hannah Freeman, for the respondent

Keywords: Criminal Law, Theft, Fraud, Restitution, Evidence, Cross-Examination, Canadian Charter of Rights and Freedoms, s 11(b), R. v Bradshaw, 2017 SCC 35, R. v Khelawon, 2006 SCC 56

R. v Spilman, 2018 ONCA 551

[Rouleau, Watt and Brown JJ.A]

Counsel:

Derek Norman Spilman, acting in person

Amy Ohler, appearing as duty counsel

Lorna Bolton, for the respondent

Keywords: Criminal Law, Assault Causing Bodily Harm, Dangerous Offenders, Sentencing, Serious Personal Injury Offences, Criminal Code, ss 753(1)(a), 810.2, R. v Boutilier, 2017 SCC 64

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

Advertisements

ONTARIO COURT OF APPEAL SUMMARIES (JUNE 4 – JUNE 8)

Good afternoon.

Following are summaries of this week’s civil decisions of the Ontario Court of Appeal.

Off the top, I would like to congratulate our very own Thomas Durcan on successfully representing the respondents in Farmer v. 145 King Street West, 2018 ONCA 525, which resulted in a dismissal of the claim against our clients.

The theme of this week was real property. In an important environmental law decision involving the contamination of lands from dry cleaning solvents, Huang v. Fraser Hillary’s Limited, the Court acknowledged an apparent divergence in the law of nuisance between Canada and England, but confirmed that in the absence of any binding Supreme Court of Canada authority to the contrary, foreseeability is not a necessary element of the tort of nuisance in Canada. The lower court’s decision was upheld and the appeals by both sides were dismissed. This case, along with the Court’s recent decision in Sorbam v. Litwack, 2017 ONCA 850, focuses liability on the polluter, rather than landlords and neighbours through whose lands contamination may pass but who were not themselves the source of the contamination.

In Saramia Crescent General Partner Inc. v. Delco Wire and Cable Limited, the Court was tasked with determining the proper measure of damages for breach of a commercial lease. The tenant repudiated the lease. In mitigation of its damages, the landlord could not quickly re-let the premises, but also could not afford the carrying costs of the property. It was therefore forced to sell the property. The landlord claimed that it was forced to sell at below market value and claimed, and was awarded, these damages from the tenant. The landlord also claimed, and was awarded, damages for the lost capital appreciation of the property that the landlord would have enjoyed during the balance of the term of the lease. The Court of Appeal set aside both these elements of the damages awarded. Damages for lost capital appreciation were found not to meet the second branch of the two-part Hadley v. Baxendale foreseeability of damage test for breach of contract. It was not in the reasonable contemplation of the parties that the tenant would be responsible for lost capital appreciation upon breach. The Court also did not agree that the evidence supported a finding that the property had been sold for less than fair market value, and accordingly reduced the damage award in that regard as well. The damages were ultimately calculated as the lost rents during the balance of the term of the lease, minus any savings the landlord enjoyed by no longer owning the property (like the interest on its mortgage payments).

In Smiles First Corporation v. 2377087 Ontario Limited (International Union of Painters), the Court granted relief against a landlord’s attempt to terminate Smiles First’s tenancy on the basis that the landlord had not consented to an assignment of the head lease to Smiles First (which also had a sublease with the head tenant). Given that the landlord was not enforcing a right of re-entry, the Court held that this was not a case for relief from forfeiture under section 98 of the Courts of Justice Act, RSO 1990, c C43. Nevertheless, the Court found that Smiles First was entitled to possession until the end of the term of the sublease. The Court found that the application judge erred in law when he concluded that the sublease terminated upon the abandonment of the premises by the head tenant. The Court cited Kowalski and Shoota v. Gale, [1947] 1 DLR 354 (Ont CA) for the proposition that where a tenant surrenders a head lease to the landlord, the subleases with the surrendering tenant survive until the end of their stated terms and do not fall away with the head lease.

Other topics covered this week included the test required to establish a right to a prescriptive easement, striking pleadings without leave to amend, summary judgment in the commercial finance context and the prevailing issue of whether an order is final or interlocutory.

Please feel free to share this blog with friends and colleagues. As always, we welcome your comments and feedback.

I hope everyone is enjoying the weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

https://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

Farmer v. 145 King Street West, 2018 ONCA 525

Keywords: Torts, Negligence, Slip and Fall, Motor Vehicle Accident, Civil Procedure, Dismissal for Delay, Langenecker v. Sauvé, 2011 ONCA 903

Huang v. Fraser Hillary’s Limited, 2018 ONCA 527

Keywords: Torts, Nuisance, Negligence, Trespass, Environmental Law, Contamination, Statutory Liability, Environmental Protection Act, Sections 93 and 99(2), Rylands v. Fletcher, (1868) LR 3 HL 330, Smith v. Inco, 2011 ONCA 628, Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013 SCC 13, Windsor v. Canadian Pacific Railway Ltd., 2014 ABCA 108

Saramia Crescent General Partner Inc. v. Delco Wire and Cable Limited, 2018 ONCA 519

Keywords: Contracts, Real Property, Commercial Leases, Breach of Contract, Repudiation, Damages, Remoteness, Hadley v. Baxendale (1854), 156 ER 145 (UK Ex Ct), Mitigation, Quantification, Fair Market Value, Ticketnet Corp. v. Air Canada (1997), 154 DLR (4th) 271 (CA), Musqueam Indian Band v. Glass, 2000 SCC 52

Smiles First Corporation v. 2377087 Ontario Limited (International Union of Painters), 2018 ONCA 524

Keywords: Contracts, Real Property, Commercial Leases, Assignments, Landlord’s Consent to Assignment, Subleases, Relief from Forfeiture, Courts of Justice Act, RSO 1990, c C 43, s 98, Kowalski and Shoota v. Gale, [1947] 1 DLR 354

Esfahani v. Samimi, 2018 ONCA 516

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Enforcement, Fraudulent Conveyances, Summary Judgment, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, RSC 1985, c B-3, Fraudulent Conveyances Act, RSO 1990, c F 29, Assignment and Preferences Act, RSO 1990, c A 33, Rules of Civil Procedure, Rule 20.04(4), Rule 20.05(1), Courts of Justice Act, RSO 1990, c C 43, s 19(1)(b)

Carpenter v. Doull-MacDonald, 2018 ONCA 521

Keywords: Real Property, Prescriptive Easements, Real Property Limitations Act, RSO 1990, c L 15, s 31, Henderson v Volk, [1982] OJ No 3138 (CA), 1043 Bloor Inc. v. 1714104 Ontario Inc., 2013 ONCA 91

Brozmanova v. Tarshis, 2018 ONCA 523

Keywords: Torts, Fraud, Civil Procedure, Striking Pleadings, Limitation Periods, No Reasonable Cause of Action, Fresh Step, Limitations Act, SO 2002, c 24, s 5(1), Rules of Civil Procedure, Rules 21.01(1)(a)-(b), Hunt v. Carey Canada Inc., [1990] 2 SCR 959

Rescon Financial Corporation v. New Era Development (2011), 2018 ONCA 530

Keywords: Summary Judgment, Real Property Financing, Fiduciary Duty, Negligence, Reverse Onus, Hodgkinson v. Simms, [1994] 3 SCR 377, Sanzone v. Schechter, 2016 ONCA 566

Sickinger v. Sickinger, 2018 ONCA 526

Keywords: Family Law, Spousal and Child Support, Variation, Calculation of Income, Orders, Disclosure, Roberts v. Roberts, 2015 ONCA 450, Fresh Evidence

For short civil decisions click here

For Ontario Review Board decisions click here

For criminal decisions click here

Civil Decisions

Farmer v. 145 King Street West, 2018 ONCA 525

[MacPherson, LaForme and Roberts JJ.A.]

Counsel: 

Antal Bakaity, for the appellant

Thomas Durcan, for the respondents, 145 King Street West and 2748355 Canada Inc.

Jennifer A Reid, for the respondent, JM

Keywords: Torts, Negligence, Slip and Fall, Motor Vehicle Accident, Civil Procedure, Dismissal for Delay, Langenecker v. Sauvé, 2011 ONCA 903

Facts:

This is an appeal from a judgment dismissing the appellants’ action against the respondents. The action arises out of two separate events in 2009 – an alleged slip and fall accident and a motor vehicle accident. After various procedural issues over the years, an order for a timetable was imposed on the parties. There was non-compliance with the timetable, leading the respondents to bring a motion to dismiss the action for delay. The appellant then initiated a motion to amend the timetable. The motions were heard together. The motion judge found that the plaintiff provided no explanation for the delay. The motion judge found that the plaintiff failed to rebut the presumption of prejudice and that there was a substantial risk that there could no longer be a fair trial. The motion judge granted the defendants’ motion to dismiss the action for delay.

Issues:

(1) Did the motion judge err by failing to address first the appellant’s motion to dispense with mediation?

(2) Did the motion judge err by reviewing the entirety of the case as opposed to examining the narrow circumstances of the events subsequent to the imposition of the timetable?

Holding: Appeal dismissed.

Reasoning:

(1) No. It is not clear from the record that the appellant ever made such a motion. In any event, even if it were made and were before the court, the motion judge was entitled to focus on the respondents’ broader motion which also involved consideration of the mediation step in the litigation.

(2) No. The motion judge was obliged to take into account the entire background of the case to put the parties’ motions into their proper context. However, she clearly focussed on the imposition of the timetable in 2015. Indeed, she described it as a “lifeline” that the appellant had failed to grasp.

It was open to the motion judge on this record to conclude that the appellant’s delay was inordinate and inexcusable and that she failed to rebut the presumption of prejudice to the respondents. This gave rise to a substantial risk that a fair trial would not be possible because of the delay: see Langenecker v. Sauvé, 2011 ONCA 903, at paras. 6-7. The motion judge’s findings are entitled to deference. There was no error that would permit appellate intervention.

Huang v. Fraser Hillary’s Limited, 2018 ONCA 527

[Hourigan, Benotto and Fairburn JJ.A.]

Counsel:

Michael S Hebert and Cheryl Gerhardt McLuckie, for the appellant/respondent, EH

Jonathan O’Hara and Michael Rankin, for the appellant/respondent, Fraser Hillary’s Limited

Christopher Reil and Jeremy Rubenstein, for the respondent, DH

Keywords: Torts, Nuisance, Negligence, Trespass, Environmental Law, Contamination, Statutory Liability, Environmental Protection Act, Sections 93 and 99(2), Rylands v. Fletcher, (1868) LR 3 HL 330, Smith v. Inco, 2011 ONCA 628, Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013 SCC 13, Windsor v. Canadian Pacific Railway Ltd., 2014 ABCA 108

Facts:

Fraser Hillary’s Limited (“Fraser”) has operated a dry cleaning business since 1960. DH is the president and sole director of Fraser. DH is also the owner of a residential property that abuts Fraser’s property. EH owns properties directly adjacent to Fraser, but not abutting DH’s residential property.

During the period 1960 to 1974, solvents used in Fraser’s dry cleaning operations spilled onto the ground. Trichloroethylene (“TCE”) was an ingredient in the dry cleaning solution that Fraser used during this time. The environmental danger caused by this chemical was unknown at that time. In 2003, after environmental reports by the Ministry of Environment and Climate Change (MOECC) confirmed the soil and groundwater in EH’s property have a concentration of TCE that exceeds MOECC standards, EH put Fraser on notice about the contamination of his properties. In 2013, the MOECC concluded that it was not receiving significant communications from Fraser and that its remedial efforts to date did not appear to have had a significant impact on the contamination. Consequently, the MOECC issued two Provincial Officer’s Orders requiring Fraser to retain a qualified person and submit a detailed work plan to remediate the contamination. Fraser did not comply with either order and the MOECC initiated enforcement proceedings against Fraser under the Environmental Protection Act (“EPA”).

EH sued Fraser and DH for damages suffered as a result of the contamination of his property. The trial judge held Fraser liable in nuisance and under the EPA for approximately $1.8 million in damages arising from contamination of EH’s land by pollutants from Fraser’s dry cleaning business. The claim against DH in his capacity as landowner of land adjacent to that owned by Fraser was dismissed.

Both Fraser and EH appealed the decision. Fraser submitted that the trial judge erred in finding it liable, both in nuisance and under the EPA, for the remediation costs. EH’s primary submissions were that the trial judge erred in failing to find Fraser negligent, in failing to find DH liable in nuisance or in negligence, and in his assessment of damages.

Issues:

(1) Did the trial judge err in finding Fraser liable in nuisance?

(2) Did the trial judge err in not finding DH liable in nuisance?

(3) Did the trial judge err in finding Fraser liable under s. 99 of the EPA?

(4) Did the trial judge err in not finding Fraser and/or DH negligent?

(5) Did the trial judge err in not finding Fraser liable in trespass?

(6) Did the trial judge err in his assessment of damages?

Holding: Appeals dismissed.

Reasoning:

(1) No. Fraser argued that the trial judge erred in law by failing to consider whether the environmental damage was reasonably foreseeable as part of his nuisance analysis. The court outlined and acknowledged the divergence in British law from Canadian law and the fact that the law may be evolving in this country. Reasonable foreseeability of harm has been accepted as part of British law in respect of nuisance and in the Rylands v. Fletcher, (1868) LR 3 HL 330 (strict liability) context. However, there has been mixed acceptance of the reasonable foreseeability requirement in this country. To demonstrate this point, the court cited its own decision in Smith v. Inco, 2011 ONCA 628, as well as the Alberta Court of Appeals decision in Windsor v. Canadian Pacific Railway Ltd., 2014 ABCA 108.

In Smith v. Inco, the court declined to decide whether foreseeability is a requirement under Rylands v. Fletcher, but did observe that compelling reasons exist to require foreseeability of damage as a necessary element. In Windsor v. Canadian Pacific Railway Ltd., 2014 ABCA 108, the Court followed the Inco decision in upholding the decision to dismiss a class action under the doctrine in Rylands v. Fletcher because the element of foreseeability could not be established. Yet, without discussing whether foreseeability was a necessary element of the nuisance claim, the court permitted certain of the class claimants to pursue their nuisance claims.

The court then noted that the Supreme Court of Canada recently considered the elements of private nuisance in Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013 SCC 13. Nowhere in its analysis did the Court indicate that foreseeability is part of the tort of nuisance. The court concluded that in the absence of any binding Canadian authority, foreseeability is not a necessary part of the tort of nuisance in Canada.  The court stated that “the addition of a foreseeability requirement blurs the distinction between negligence and nuisance.”

(2) No. DH was only sued in his capacity as the owner of the residential property and not as an officer or director of Fraser. The trial judge’s finding that the property in question is not the source of the contaminant is entitled to deference. The court found no error in the trial judge’s conclusion that causation had not been established, and that DH did not subject EH to an unreasonable interference with his use and enjoyment of his properties.

(3) No. The court rejected the argument that the trial judge erred because he retrospectively applied Part X of the EPA. In the court’s view, time does not freeze in 1974 for the purposes of liability under section 99(2) of the EPA. Even if the spills ceased in that year, there was an ongoing obligation under section 93 of the EPA to remediate the damage. That remediation has not been done. Therefore, there is liability under section 99(2)(a)(i) and (ii) because Fraser has not fulfilled a duty imposed on it under Part X of the EPA.

(4) No. The trial judge made a finding of mixed fact and law that Fraser and DH did not breach the standard of care until 2013. He concluded that there had been no appreciable increase in contamination since 2013. The court gave deference to the trial judge’s conclusion that causation had not been established given that there had been no increase in contamination during the relevant time that would have any impact on the requirement for remediation or its associated costs.

(5) No. The trial judge correctly identified that a direct physical intrusion onto EH’s properties was required in order to establish a trespass. He found that the intrusion was not direct because the contaminant entered into the ground, filtered down and was then carried to EH’s properties in the groundwater.

(6) No. The court determined that the trial judge carefully considered the evidence and determined what he felt was the appropriate figure for damages. He was entitled to reject the damages scenarios that he felt were unsuitable in the circumstances. He chose to increase the damages based on evidence about upward adjustments for other similar remediation alternatives in order to compensate EH for the increased costs of remediating to a residential standard. The court saw no palpable or overriding error in his analysis, and accordingly, was not satisfied that there was any basis for appellate interference with the trial judge’s assessment of damages.

Saramia Crescent General Partner Inc. v. Delco Wire and Cable Limited, 2018 ONCA 519

[Pepall, Trotter and Nordheimer JJ.A.]

Counsel:

David R Byers, Patrick G Duffy and Michael Currie, for the appellants

Luisa J Ritacca and Fredrick R Schumann, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Breach of Contract, Repudiation, Damages, Remoteness, Hadley v. Baxendale (1854), 156 ER 145 (UK Ex Ct), Mitigation, Quantification, Fair Market Value, Ticketnet Corp. v. Air Canada (1997), 154 DLR (4th) 271 (CA), Musqueam Indian Band v. Glass, 2000 SCC 52

Facts:

The defendants, Delco Wire and Cable Limited (“Delco”) and IEWC Canada Corp. (“IEWC”) repudiated a commercial lease with respect to a property owned by the plaintiff, Saramia Crescent General Partner Inc. (“Saramia”). Subsequent to the repudiation, Saramia sold the property to mitigate its loss. The issue at trial was what amount of damages, if any, were due to Saramia by Delco and IEWC.

At Trial

The trial judge found that Saramia was forced to sell the property following repudiation, because Saramia could not afford the ongoing maintenance and mortgage expenses absent the rental income. The trial judge also found that the sale was not at fair market value and, as a consequence, did not make Saramia whole for the losses sustained as a result of the repudiation.

The trial judge concluded that Saramia not only would have enjoyed the benefit of the lost rental profits under the lease, but would have also enjoyed the capital appreciation of the property. The trial judge concluded that the sale of the property in 2013 did not account for these benefits, which Saramia would have enjoyed had the lease been honoured.

The trial judge accepted the appraised value at December 31, 2015 as $4,465,000. This value was used in the discounted cash flow (“DCF”) analyses to calculate total damages. For the basis of her damages award, the trial judge adopted the scenario that employed the December 31, 2015, appraised value of the property. In this scenario, this price was then projected forward to 2021 at the same assumed growth rate of 2% per year along with the same 2% discounted rate. The trial judge deducted the mortgage break fee amount that Saramia had to pay from the principal amount available for reinvestment for mitigation purposes. She also awarded an amount of contractual interest owing under the lease.

On appeal, the appellants argued that the sale of the property fully mitigated or avoided any damages, and that damages for lost capital appreciation were too remote.

Issues:

(1) What is the proper measure of damages for breach of a commercial lease?

(2) Were the damages for lost capital appreciation too remote?

(3) Were the damages mitigated?

(4) Does the sale of the Property stop damages from accruing beyond the date of the sale?

(5) Are the damages as calculated by the DCF too uncertain?

(6) Was it an error to award the contractual interest amount as damages?

Holding: Appeal allowed.

Reasoning:

(1) The appellants are liable for the rental payments they did not make, subject to Saramia’s duty to mitigate and the expenses Saramia avoided by selling the property. Any “but for” capital appreciation there may have been in the property going forward is not a proper head of damages for which the appellants are liable through their repudiation.

(2) Yes. The test for remoteness is set out in Hadley v. Baxendale (1854), 156 ER 145 (UK Ex Ct). This test states that damages may be recovered if:

(i) in the usual course of things, they arise fairly, reasonably, and naturally as a result of the breach of contract; or

(ii) they were within the reasonable contemplation of the parties at the time of the contract.

The trial judge conflated the two branches of the test set out in Hadley v Baxendale for remoteness of damages. The test under the first branch is objective. The question is not whether the type of loss was foreseeable as arising naturally in this case, but whether, objectively viewed, lost capital appreciation is a type of loss that foreseeably and naturally arises “according to the usual course of things” from the breach of a commercial lease.

With respect to the second branch of remoteness from Hadley v Baxendale, there was nothing in the evidence that would support a conclusion that the parties contemplated, at the time that they entered into or extended the lease, that capital appreciation of the property would be something for which the tenant would be liable to the landlord if the lease was breached.

Therefore, the claimed damages for lost capital appreciation fell outside of both branches of Hadley v Baxendale and were too remote and not recoverable.

(3) No. First, the Court held that the trial judge erred in her interpretation of fair market value (“FMV”). The definition of FMV is well established as being what a seller is willing to accept and a buyer is willing to pay on the open market in an arm’s length transaction (Musqueam Indian Band v. Glass, 2000 SCC 52). That Saramia was forced to sell the property did not disqualify it as a willing seller. Willing, in this sense, refers to the price offered and accepted. Next, there was no evidence to suggest that Saramia sought a price for the property at anything less than what the property was worth. Despite this, the trial judge found the price to have been below FMV. Opinion evidence that had been offered by Saramia’s Vice-President, which could have been self-serving and which was accepted by the trial judge in making this finding, was contradicted by Saramia’s own property appraisal expert. Further, the evidence established that there were three (3) prospective buyers and that the eventual sale price was comparable to other industrial properties in the market.

Nevertheless, the damages were not fully mitigated. This was because the proceeds from the FMV sale of the property did not compensate Saramia for the lost economic value derived from the lease because the lease had, prior to the sale, been repudiated. Moreover, the Supreme Court held previously held in Musqueam Indian Band v. Glass, 2000 SCC 52, that the FMV of land is the exchange value of the land in fee simple and does not include value derived from a lease.

(4) No. The sale of the property by Saramia was not an independent and inevitable event that occurred regardless of the appellants’ repudiation of the contract. The line of reasoning in Canadian Medical Laboratories Ltd. v. Stabile (1997), 98 OAC 3, is thus distinguishable from the facts of this case. Moreover, it would be anathema to the purpose of the mitigation doctrine to hold that a reasonable action taken by the innocent party intended to mitigate damages could be used by the wrongdoer as a means to escape liability. To the extent that a defendant landlord sells leased premises as a reasonable means of mitigating damages following a tenant’s repudiation of a lease, the sale of the leased premises does not bar the landlord’s claim for lost rental payments after the date of sale.

(5) No. DCF calculations are not purely hypothetical or speculative, but are a sufficiently certain means of quantifying damages where the projections constitute a close approximation of what would have occurred on a balance of probabilities: Ticketnet Corp. v. Air Canada (1997), 154 DLR (4th) 271 (CA), at para. 87. However, the appropriate value to use in the DCF calculations was the 2013 sale price, not the 2015 FMV appraisal. There is no basis to depart from the trial judge’s preference for the KPMG method of calculation. It was appropriate of the trial judge to require that the mortgage break fee be deducted from the proceeds of sale for the purpose of the DCF calculations rather than to treat that amount as a separate head of damages.

(6) Yes. The trial judge’s reasons are unclear as to the legal basis for the award of contractual interest. The reasons show that she could have intended either that the contractual interest was a head of expectation damages resulting from a breached contract, or an amount awarded pursuant to the enforcement of a subsisting contract. In both cases, the award was in error. In the case of expectation damages, the trial judge would have had to rely on a submission from Saramia but the trial judge failed to analyze why she accepted the submission, fatally failing in the process by not linking the “what” and “why.” In the contractual enforcement case, Saramia’s acceptance of the appellants’ repudiation of the Lease terminated the contract and thus the trial judge committed an error in law by awarding contractual interest on the basis of continual rent arrears on a contract which was no longer alive. Interest is instead payable in accordance with the Court of Justice Act.

In the result, the appeal was allowed, and the trial judge’s damages award was set aside, to be replaced by a new damages award calculated in accordance with the court’s reasons.

Smiles First Corporation v. 2377087 Ontario Limited (International Union of Painters), 2018 ONCA 524

[Epstein, van Rensberg and Brown JJ.A.]

Counsel:

Tanya Walker, for the appellants

Arleen Huggins, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Assignments, Landlord’s Consent to Assignment, Subleases, Relief from Forfeiture, Courts of Justice Act, RSO 1990, c C 43, s 98, Kowalski and Shoota v. Gale, [1947] 1 DLR 354

Facts:

The respondent, 2377087 Ontario Limited (the “Landlord”), entered into a head lease with 2445855 Ontario Inc. (“244”) (the “Head Lease”). 244 then subleased the premises to Smiles First by letter of intent (the “Sublease”). Disputes arose under both the Head Lease and the Sublease. Smiles First and 244 advised the Landlord that they had entered into a tentative agreement to resolve their disputes. However, their agreement was “contingent on the Landlord’s approval of assigning 244’s Head Lease to Smiles First and/or the Landlord entering into a new head lease with Smiles First.

Two events then occurred. First, 244 executed an assignment of the Head Lease to Smiles First (the “Head Lease Assignment”). This assignment required the Landlord’s Consent, following which 244 would transfer and assign to Smiles First all of its rights under the Head Lease. Neither Smiles First nor 244 asked the Landlord for consent to the assignment.

Second, the Landlord, 244, and Smiles First embarked on negotiations to revise the leasing arrangements for the Premises. The Landlord wanted to enter into a new head lease directly with Smiles First, and 244 wanted nothing more to do with the premises. The Landlord circulated draft Minutes of Settlement and a new form of head lease with Smiles First. Smiles First refused to sign the Minutes of Settlement, taking the position that it was an “official tenant” pursuant to the Head Lease Assignment. The Landlord responded that it had not consented to the Assignment and expected Smiles First to sign a new head lease directly with it. The Landlord took the position that Smiles First now occupied the Premises as “an occupant subject to a month to month term.”

On March 21, 2017 the Landlord gave Smiles First notice that its tenancy would end on April 30, 2017 (the “Notice of Termination”). Smiles First brought an application of relief from forfeiture, which was dismissed. Smiles First appealed.

Issues:

(1) Did the application judge err in concluding the Landlord was not bound by the Head Lease Assignment?

(2) Did the application judge err in refusing to grant Smiles First relief from forfeiture of its tenancy?

Holding: Appeal allowed.

Reasoning:

(1) No. This issue turned on: (i) the language of the Head Lease Assignment; (ii) the effect of certain correspondence between the parties’ counsel in October and November 2016; and (iii) the acceptance of rent from Smiles First after November 2016.

The application judge held that the Head Lease Assignment did not operate to assign 244’s interest in the Head Lease to Smiles First and was not effective as against the Landlord because neither Smiles First nor 244 obtained the Landlord’s consent to the Head Lease Assignment, as required by the specific terms of the assignment. Further, the correspondence amongst the parties did not constitute actual or constructive notice to the Landlord of the Head Lease agreement. The Court found those findings were based on a reasonable interpretation by the application judge of the terms of the Head Lease Agreement and Head Lease.

Furthermore, the application judge held that the Landlord’s acceptance of rent from Smiles First did not (i) amount to its recognition of an equitable assignment of the Head Lease; (ii) constitute a waiver of its rights; or (iii) estop the Landlord from asserting those rights. The Court held that the evidence showed that the Landlord’s acceptance of the rent was done during the period of time when it had made clear that Smiles First needed to enter into a new head lease directly with it, and saw no reversible error in the application judge’s analysis.

(2) No. This was not a case for relief from forfeiture under s. 98 Courts of Justice Act, RSO 1990, c C43, as the Landlord was not trying to enforce a right of re-entry of forfeiture. However, Smiles First was still entitled to relief against the Landlord’s attempt to terminate its possession of the premises. The application judge found that 244 abandoned the premises as part of its settlement with the Landlord and that this resulted in the termination of the Sublease. As a matter of law, it did not. Where the tenant surrenders a head lease to the landlord, the subleases created by the surrendering tenant survive until the end of their stated terms: Kowalski and Shoota v. Gale, [1947] 1 DLR 354 (Ont CA), at paras. 32-33. Smiles First was entitled to possession of the Premises until the end of the term of the Sublease on the terms and conditions contained in its Sublease.

Esfahani v. Samimi, 2018 ONCA 516

[MacPherson, LaForme and Miller JJ.A.]

Counsel:

A Landry and E Florjancic, for the appellant

A Zweig, for the respondents

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Enforcement, Fraudulent Conveyances, Summary Judgment, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, RSC 1985, c B-3, Fraudulent Conveyances Act, RSO 1990, c F 29, Assignment and Preferences Act, RSO 1990, c A 33, Rules of Civil Procedure, Rule 20.04(4), Rule 20.05(1), Courts of Justice Act, RSO 1990, c C 43, s 19(1)(b)

Facts:

DE obtained a judgment in Germany against KS in 2007 and then a judgment in Ontario recognizing the German judgment and its enforceability in the Superior Court. DE received no payments and brought an action in 2011 claiming damages and pleading that KS fraudulently conveyed properties to evade payment.

In November 2013, KS filed an assignment in bankruptcy. The report of the Trustee in Bankruptcy dated July 3, 2014 was served on DE. He did not file any written opposition to the discharge of KS who was discharged from bankruptcy on August 7, 2014.

Also in 2013, DE brought a summary judgment motion but agreed to proceed with the motion as a mini trial. The mini trial was to address a single issue: whether KS engaged in a series of transactions with the intent to defeat, delay, hinder or prejudice DE from receiving payment for the 2011 judgment. In March 2015 the mini trial judge ruled that KS did engage in the described conduct.

In October 2017, the summary judgment from 2013 continued. DE relied on the Fraudulent Conveyances Act, RSO 1990, c F 29, (“FCA“) and the Assignment and Preferences Act, RSO 1990, c A 33, (“APA”) to recover the proceeds of the fraudulent conveyances. KS argued that because he had been discharged from bankruptcy in 2014, there was no “debt” which can form the basis of a judgment. The motion judge held that DE had failed to follow the correct procedure to realize on the amounts owing under the 2009 enforcement judgment. She dismissed DE’s motion, but noted that “[DE] of course still has the simple and direct option of moving under the Bankruptcy and Insolvency Act to pursue the FCA action.”

Issues:

(1) Is the motion judge’s holding a final order?

(2) What is the correct court jurisdiction for this appeal?

(3) Can the appellant pursue the fraudulent conveyance claim in another forum?

(4) Can the appellant pursue other causes of action previously pleaded?

Holding: Appeal quashed.

Reasoning:

(1) No. The summary judgment order is an interlocutory order, not a final order. In dismissing the summary judgment motion, the motion judge did not invoke Rule 20.04(4) or 20.05(1) to determine the final and substantive rights of the parties.

(2) Divisional Court. An appeal of an interlocutory order properly lies in the Divisional Court with that court’s leave pursuant to section 19(1)(b) of the Courts of Justice Act. The Court of Appeal may only transfer an appeal to the Divisional Court if the appeal does not require leave to appeal to that court.

(3) DE can still pursue his fraudulent conveyance claims in Bankruptcy Court.

(4) To the extent the conspiracy claim can be separated from the fraudulent conveyance claim, DE is free to continue his efforts and carry on with it in the Superior Court.

Carpenter v. Doull-MacDonald, 2018 ONCA 521

[MacPherson, LaForme and Roberts JJ.A.]

Counsel:

Robert Kalanda, for the appellant

Sarah Corman and Hilary Brown, for the respondent

Keywords: Real Property, Prescriptive Easements, Real Property Limitations Act, RSO 1990, c L 15, s 31, Henderson v Volk, [1982] OJ No 3138 (CA), 1043 Bloor Inc. v. 1714104 Ontario Inc., 2013 ONCA 91

Facts:

The appellant appeals from the dismissal of her application for a declaration that she holds a permanent easement over part of the respondent’s property.

The appellant and respondent own neighbouring houses. The appellant claims a right of easement over the passageway between the two houses. No easement is registered on title to the appellant’s property. The appellant bases her claim on the historical use exercised by the former owner of the property over the respondent’s property in order to carry out cleaning and repairs.

She submits that the application judge erred in determining that this historical use of the respondent’s property was not “as of right” but was instead granted by permission or licence.

Issue:

(1) Does the appellant have a right of easement over the passageway between the two houses that runs to the backyards?

Holding: Appeal dismissed.

Reasoning:

(1) No. The application judge concluded that the historical usage of the respondent’s property on which the appellant relies was only “modest, infrequent, and intermittent”, and was permitted by the extension of the former owner’s neighbourly good will.

As noted by the application judge, the threshold for meeting the criteria for establishing an easement is high. The application judge carefully reviewed and applied the correct legal principles, including that a prescriptive easement requires the use of the property over which the easement is claimed to be “a claim of right which is continuous, uninterrupted, open and peaceful for a period of twenty years”: see s. 31 of the Real Property Limitations Act, RSO 1990, c L15; and Henderson v Volk, [1982] OJ No 3138 (CA), at para. 12. Moreover, the use or enjoyment of the easement “must not be permissive but, instead, as if the claimant had the right to the easement”: 1043 Bloor Inc. v. 1714104 Ontario Inc., 2013 ONCA 91, at para. 59. The application judge’s characterization of the occasional permissive historical usage of the respondent’s property was open to him on the record.

Brozmanova v. Tarshis, 2018 ONCA 523

[Brown, Huscroft and Trotter JJ.A.]

Counsel:

Richard Parker, for the appellant

Andrew Kalamut, for the respondents

Keywords: Torts, Fraud, Civil Procedure, Striking Pleadings, Limitation Periods, No Reasonable Cause of Action, Fresh Step, Limitations Act, SO 2002, c 24, s 5(1), Rules of Civil Procedure, Rules 21.01(1)(a)-(b), Hunt v. Carey Canada Inc., [1990] 2 SCR 959

Facts:

The appellant appeals an order striking out her statement of claim without leave to amend. In the claim, the appellant sought damages from her former employer of several years. The appellant alleged that the respondent had billed the Ontario Health Insurance Plan (“OHIP”) for treatments of conditions she had never had. OHIP assured her that the entries would be removed but they remained on her record and the appellant has, since before 2010, been unable to obtain health insurance. The motion judge granted the motion to strike on the grounds that the action was commenced outside the applicable limitation period under Rule 21.01(1)(a) of the Rules of Civil Procedure and on the basis that no reasonable cause of action had been disclosed under Rule 21.01(1)(b).

Issue:

(1) Did the motion judge err in striking the statement of claim without leave to amend?

Holding: Appeal dismissed.

Reasoning:

(1) No. Rules 21.01(1)(a) and (b) ask a court to determine a question of law which may dispose of a proceeding. Evidence on such motions is generally prohibited and the pleadings are taken as true (Hunt v. Carey Canada Inc., [1990] 2 SCR. 959). On a Rule 21.01(1)(a) motion, however, the court must ascertain the appropriate day in law on which the claim was discovered under s. 5(1) of the Limitations Act, 2002. Such analysis does not involve a question of law. In some circumstances, allowing a defendant to move under rule 21.01(1)(a) to adjudicate its fact-based defence can be prejudicial to the plaintiff. The respondent’s motion in this case, was, in effect, a motion for summary judgment. That said, the applicant’s counsel did not advance any irregularity in the respondents’ use of rule 21.01(1). The facts pleaded and admissions made by the appellant established that the appellant was statute-barred from advancing the claim. That the damage she discovered in 2009 was not the same damage which she sought recovery for in her action does not matter (Hamilton (City) v Metcalf & Mansfield Capital Corporation). The respondent’s reliance on Rule 21.01(1)(b) (no reasonable cause of action) was misplaced because it had already taken a fresh step by defending the claim and such a motion must be brought before a defence is delivered.

Rescon Financial Corporation v. New Era Development (2011) Inc., 2018 ONCA 530

[MacPherson, LaForme and Roberts JJ.A.]

Counsel:

DK Alderson and A Ottaway, for the appellant

S Crocco and PH Smiley, for the respondents

Keywords: Summary Judgment, Real Property Financing, Fiduciary Duty, Negligence, Reverse Onus, Hodgkinson v. Simms, [1994] 3 SCR 377, Sanzone v. Schechter, 2016 ONCA 566

Facts:

The appellant, New Era Development (2011) Inc. (“New Era”), appeals the summary judgment granted in favour of the respondent Rescon Financial Corporation (“Rescon”) which granted Rescon’s claim and dismissed New Era’s counterclaim against Rescon and its founding principal, EB.

Rescon is a mortgage broker. Rescon claimed $400,000 in fees from New Era for arranging construction financing for a condominium project. New Era denied that it owed fees and submitted on the motion that Rescon failed to perform the terms of the contract between the parties, resulting in $4 million in damages.

In February 2010, RV incorporated New Era which purchased a parcel of land (“the Bristol Lands”) for $2.8 million. In June 2014, RV approached Rescon to arrange about $40 million in financing for the construction and development of the Bristol Lands. On July 8, 2014, RV delivered a signed copy of the retainer agreement between the parties. The parties approached Alterna Savings and Credit Union Limited (“Alterna”) for financing to develop the Bristol Lands. Alterna delivered a Letter of Intent dated September 30, 2014 (the “LOI”), for Construction Financing of the Bristol Project, which was returned with handwritten changes and a cheque for $50,000 payable to Alterna. Rescon obtained a Commitment Letter from Alterna (the “Second Commitment Letter”) proposing a Construction and Development loan of $39 million, as well as a Letter of Credit facility of $1 million on terms that largely reflected the terms found in the Alterna LOI.

After concerns were expressed the Project Monitor regarding the conditions precedent for funding, budget overruns, and mezzanine financing, the relationship between New Era and Rescon began to sour. On June 19, 2015, New Era sent an email to Alterna terminating the Second Commitment Letter. Later that day, Alterna forwarded New Era’s email to Rescon. On July 2, 2015, Rescon sent an email to New Era containing an invoice for $400,000. After further discussions between Rescon and New Era regarding the continuation of their relationship, New Era informed Rescon, via text, that its services were no longer required. New Era refused to pay the $400,000 sought in Rescon’s invoice. Rescon commenced an action. New Era counterclaimed. Rescon’s claim was granted and New Era’s counterclaim was dismissed by way of summary judgment. New Era appealed.

Issues:

(1) Did the motion judge err by finding Alterna’s Second Commitment letter acceptable?

(2) Did the motion judge err by failing to make credibility findings on certain key issues?

(3) Did the motion judge err in rejecting the appellant’s defence of the agent’s breach of duty?

(4) Did the motion judge err in concluding that there was no fiduciary relationship between the parties?

(5) Did the motion judge err in law by determining causation before making findings on the standard of care on the agent’s breach of duty issue and in the absence of any expert evidence filed by the respondents establishing the standard of care?

(6) Did the motion judge err by shifting the onus to the appellant to demonstrate that there was a genuine issue for trial?

(7) Did the motion judge err by dismissing the counterclaim on a summary basis?

Holding: Appeal dismissed.

Reasoning:

(1) No. There is no genuine issue requiring trial regarding whether the Second Alterna Commitment Letter was “an acceptable commitment letter”. New Era had accepted it not only once, but twice.

(2) No. The record before the motion judge discredited RV’s evidence and supported the motion judge’s conclusion.

(3) No. This argument essentially covers the same factual terrain as the first issue and was rejected for the same reasons.

(4) No. The motion judge’s review of the evidence on this issue established clearly that RV was far from being a neophyte shrinking violet in his relationship with EB. Furthermore, the motion judge’s decision on this point was entitled to significant deference: see Hodgkinson v. Simms, [1994] 3 SCR 377, at para. 96.

(5) No. There is no conceivable standard of care analysis that could have made a difference, given that the motion judge correctly found that the respondent did not breach its duty.

(6) No. With the respondents having discharged their evidentiary burden of proving that there was no genuine issue requiring a trial for its resolution, the onus shifted to the appellant to show that the claim had a real chance of success and that there were genuine issues requiring a trial: Sanzone v. Schechter, 2016 ONCA 566, at para. 30. It did not discharge that onus.

(7) No. There was a pronounced overlap between the defence and the counterclaim. The motion judge was not wrong to conclude that the allegations and defences raised in the statement of defence do not raise a genuine issue requiring a trial and so the Counterclaim should be dismissed for the same reason that Rescon’s claim was successful.

Sickinger v. Sickinger, 2018 ONCA 526

[MacPherson, LaForme and Roberts JJ.A.]

Counsel:

Gary S Joseph, for the appellant

Dena N Varah and Katharine Costin, for the respondent

Keywords: Family Law, Spousal and Child Support, Variation, Calculation of Income, Orders, Disclosure, Roberts v. Roberts, 2015 ONCA 450, Fresh Evidence

Facts:

The appellant, RS, appeals the motion judge’s decision dismissing his motion to vary and granting the respondent, PS’ cross-motion. Issues of spousal and child support were decided for RS and PS.

RS brought his first motion to vary to reduce child support and reduce or terminate spousal support. A seven-day trial took place resulting in a final order. He then brought his second motion to vary, which was to be heard on affidavit evidence. It was ordered that RS was to provide current financial disclosure, including his tax returns. Having failed to produce the ordered disclosure, RS sought an adjournment of his second motion to vary. He was in serious default of his obligations to pay support and to make financial disclosure.

RS sought a further adjournment of his second motion to vary. Justice Glustein adjourned the motion and stipulated that no further affidavit material could be filed thereafter. RS did not appeal this order. In spite of this order, RS late-served a financial statement and 13 affidavits on PS. He then brought a Form 14B motion for leave to permit late service of his materials. On a later date, RS purported to serve and file six affidavits, contrary to Justice Glustein’s order that RS did not have a further right of reply. RS then filed a second 14B motion seeking an order that he be permitted the right of reply evidence. The affidavits did not contain RS’ income tax returns.

The motion judge considered the order by Glustein J. She noted the deadline to file any additional materials included his 2015 and 2016 tax returns. She found that RS had not complied with the order. The motion judge denied RS’ 14B motions. She concluded that any materials filed after the deadline would not form part of the motion to vary and would be removed from the court file.

The motion judge dismissed RS’ motion to vary because he had not produced any income tax returns and provided no valid reason for the lack of disclosure. She made further observations and findings.

Regarding an increase in parenting time from 40% to 50%, the motion judge found this was foreseeable at the time and found that there was no material change. The motion judge granted PS’ motion to vary. She found that PS’ financial situation had not changed, but RS’ had.

Issues:

(1) Was RS denied procedural fairness because the motion judge prohibited him from filing his late-filed affidavits?

(2) Was RS denied procedural fairness because the motion judge prohibited him from filing reply evidence?

(3) Did the motion judge err in law when she found that the increase in parenting “was foreseeable” and therefore not a “material change”?

(4) Should RS be granted leave to file his 2015 and 2016 tax returns as fresh evidence on appeal?

Holding: Appeal dismissed.

Reasoning:

(1) No. The record reveals that far from experiencing procedural unfairness, RS has benefitted significantly from several indulgences granted him by the court. The motion judge heard RS’ motion to vary almost three years after he commenced it. At the time, seven different judges dealing with various aspects of the proceeding, including case management, had all ordered RS to produce relevant disclosure.

As the court described it in Roberts v. Roberts, 2015 ONCA 450, at paras. 11-12:

The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing.

(2) No. The motion judge made no error in dismissing his motion to file reply evidence late and in non-compliance with a court order. The exercise of her discretion should not be interfered with on appeal, absent an error on her part, which RS did not establish.

(3) No. The motion judge appropriately made her decision based on the record before her. RS has failed to establish any reason for the court to interfere with her comprehensively reasoned decision.

(4) No. The court declined to admit his 2015 and 2016 tax returns as fresh evidence. RS’ income tax returns were not included in any of the affidavits that were served, nor was there any reasonable explanation for their omission. RS ignored disclosure orders for over two years.

Short Civil Decisions

McPeake v. Cadesky & Associates, 2018 ONCA 500

[Juriansz, Benotto and Fairburn JJ.A.]

Counsel:

Geoffrey DE Adair, for the cross-appellant GJ

Sandra E Dawe, for the cross-respondent Cadesky & Associates

Alfred J Esterbauer and Sydney Hodge, for the cross-respondent BS

Yan David Payne and Karen J Sanchez, for BM

Keywords: Endorsement, Appeal Abandoned, Costs

Ontario Review Board Decisions

Beam (Re), 2018 ONCA 532

[Lauwers, Benotto and Miller JJ.A.]

Counsel:

Stephen F Gehl, for the appellant, MB

Logan Crowell, for the respondent, Ontario Shores Centre for Mental Health Sciences

Justin Reid, for the respondent, Attorney General for Ontario

Keywords: Criminal Law, Assault, Assault with Weapon, Not Criminally Responsible, Mental Disorder, Threat to Public Safety, Re Wall, 2017 ONCA 713, Conditional Discharge

Gibson (Re), 2018 ONCA 533

[Lauwers, Benotto and Miller JJ.A.]

Counsel:

Stephen F Gehl, for the appellant, MG

Catherine Weiler, for the respondent, Attorney General for Ontario

Keywords: Criminal Law, Harassment, Not Criminally Responsible, Mental Disorder, Threat to Public Safety, Conditional Discharge

Criminal Decisions

R. v. George-Nurse, 2018 ONCA 515

[MacPherson, Hourigan and Miller JJ.A.]

Counsel:

D George-Nurse, appearing in person

Brian Snell, appearing as duty counsel

Deborah Calderwood, for the respondent

Keywords: Criminal Law, Intentionally Discharging Firearm, Criminal Code, s 244.2(1)(b), Possession of Firearm in Unauthorized Place, Criminal Code, s 94(1), Appeal, Evidence, Circumstantial Evidence, R. v. Villaroman, 2016 SCC 33, Failure to Testify

R. v. Pitamber, 2018 ONCA 518

[Lauwers, Pardu and Huscroft JJ.A.]

Counsel:

Gerald Chan, duty counsel

Leslie Paine, for the respondent

Keywords: Criminal Law, Sentencing, Pre-sentence Custody, No Contact Provision, R. v. Plante, 2018 ONCA 251, Fresh Evidence, Parity Principle

R. v. Biddle, 2018 ONCA 520

[Laskin, Sharpe and Fairburn JJ.A.]

Counsel:

Leo Adler, for the applicant/appellant

Jamie Klukach, for the respondent

Keywords: Criminal Law, Assault, Assault with Weapon, Assault Causing Bodily Harm, Fresh Evidence, Criminal Code, s 696.3(2), R. v. Dixon, [1998] 1 SCR 244

R. v. Boe, 2018 ONCA 531

[Lauwers, Pardu and Miller JJ.A.]

Counsel:

D Boe, appearing in person

Nader R Hasan, appearing as duty counsel

Ian Bell, for the respondent

Keywords: Criminal Law, Possession for Purposes of Trafficking, Possession of Prohibited Weapon, Reasonable and Probable Grounds, Informants

R. v. Hoad, 2018 ONCA 528

[Lauwers, Pardu and Miller JJ.A.]

Counsel:

BJR Hoad, in person

Kevin Wilson, for the respondent

Keywords: Criminal Law, Possession of Marijuana, Seizure and Detention of Property, Jurisdiction, Certiorari

R. v. Turrett, 2018 ONCA 529

[Lauwers, Pardu and Miller JJ.A.]

Counsel:

Gerald Chan, duty counsel

J Turrett, in person

Leslie Paine, for the respondent

Keywords: Criminal Law, Sentencing, Breach of Court Order

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 28 – JUNE 1)

Good evening,

Following are the summaries of this week’s civil decisions of the Court of Appeal for Ontario.

In a lengthy decision in Tremblay v Ottawa (Police Services Board), the Court set aside an award of damages against the Ottawa police for false arrest, unlawful detention and imprisonment, Charter violations, and negligent investigation. What is noteworthy is that this is a rare example of an appeal being granted mostly as a result of errors of fact rather than errors of law.

Other topics covered this week included whether the deliberations of certain municipal committees were required to be open to the public, municipal liability, spousal support, setting aside default judgments and dismissals for delay, and the age-old problem of determining whether an order is final or interlocutory.

Until next week,

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

https://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

Tremblay v Ottawa (Police Services Board), 2018 ONCA 497

Keywords: Torts, Negligent Investigation, False Arrest, False Imprisonment, Breach of Charter Rights, Probable Cause, Intimidation, Meady v Greyhound Canada Transportation Corp., 2015 ONCA 6, 329 OAC 173, [2007] 3 SCR 129, 495793 Ontario Ltd. v Barclay, (2016) 132 O.R. (3d) 241 (CA),R. v Golub, (1997) 34 OR (3d) 743 (CA), Criminal Code, RSC, 1985, C-46, section 495, Canadian Charter of Rights and Freedoms, Sections 7, 8, 9

Ritchie v Ritchie, 2018 ONCA 486

Keywords: Family Law, Spousal Support, Calculation of Income, Business Losses, Personal Expenses, Equalization of Net Family Property, Shares, Valuation Procedure, Costs, Offers to Settle

Prescott & Russell (United Counties) v David S Laflamme Construction Inc., 2018 ONCA 495

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Adding Parties, Final or Interlocutory, Limitations Act, 2002, s.21

Martin v Barrie (City), 2018 ONCA 499

Keywords: Torts, Negligence, Occupier’s Liability, Duty of Care, Standard of Care, Standard of Review, Mixed Fact and Law, Palpable and Overriding Error, Housen v Nikolaisen, 2002 SCC 33

Ontario Ombudsman v Hamilton (City), 2018 ONCA 502

Keywords: Municipal Law, Jurisdiction, Definition, Municipal Act, 2001, SO 2001, c 25, Section 239(1), Ombudsman Act, RSO 1990, c O 6, Section 14.1, Municipal Elections Modernization Act, 2016, SO 2016, c 15, Section 65, Schnarr v Blue Mountain Resorts Limited, 2018 ONCA 31

Prescott v Barbon, 2018 ONCA 504

Keywords: Civil Procedure, Orders, Administrative Dismissals for Delay, Setting Aside, Reid v Dow Corning Corp (2002), 11 CPC (5th) 80 (Ont SC), Rules of Civil Procedure, Rules 48.14, 48.15

Sammut v Sammut, 2018 ONCA 507

Keywords: Civil Procedure,Default Judgments, Setting Aside, Damages

York Region Standard Condominium Corporation No 1039 v Richmond Hill (Town), 2018 ONCA 511

Keywords: Civil Procedure, Orders, Dismissal for Delay, Standard of Review, Palpable and Overriding Error, Error of Fact, Error of Law

For short civil decisions click here

For criminal decisions click here

Civil Decisions

Tremblay v Ottawa (Police Services Board), 2018 ONCA 497

[Strathy CJO, Juriansz and Huscroft JJ A]

Counsel:

JJ Wright, for the appellants

L Greenspon, for the respondents

Keywords: Torts, Negligent Investigation, False Arrest, False Imprisonment, Breach of Charter Rights, Probable Cause, Intimidation, Meady v Greyhound Canada Transportation Corp., 2015 ONCA 6, 329 OAC 173, [2007] 3 SCR 129, 495793 Ontario Ltd. v Barclay, (2016) 132 OR (3d) 241 (CA), R v Golub, (1997) 34 OR (3d) 743 (CA), Criminal Code, RSC, 1985, C-46, section 495, Canadian Charter of Rights and Freedoms, Sections 7, 8, 9

Facts:

This appeal arises from an action commenced by the respondents, RT and his spouse JM, against the Ottawa Police Services Board (“OPS”), Sergeant JA and other named police officers, for damages for the arrest of RT and the execution of a public safety firearms warrant at the respondents’ home on October 17, 2006. The action alleged negligent investigation, false arrest and false imprisonment, and breach of their rights under ss. 7, 8 and 9 of the Canadian Charter of Rights and Freedoms.

RT and JM were involved in a dispute with their neighbours, who alleged a drainage pipe RT and JM had installed was causing flooding in their homes. Six neighbours brought a civil suit against RT and JM. Some of the neighbours claimed that Tremblay subsequently engaged in intimidating behaviour toward them and their families.

The OPS arrested RT for intimidation and mischief. Having confirmed that RT had a licence and registration to possess three firearms, the OPS also obtained a public safety firearms warrant. Police entered and searched the respondents’ home, seizing the firearms and ammunition.

At his criminal trial, RT was acquitted of intimidation and of criminal harassment. He was found guilty of mischief.

The trial judge found Sgt. JA, who was the investigating officer, and the OPS, as Sgt. JA’s employer, liable to JT for negligent investigation, false arrest, unlawful detention and unlawful imprisonment and breaches of RT’s rights under ss. 7, 8, and 9 of the Charter. She found Sgt. JA and the OPS liable for breach of JM’s rights under s. 8 of the Charter, relating to the search of the home. She awarded RT and JM over $50,000 in damages. The police appealed.

Issues:

(1) Did the trial judge err by defining the standard of care for negligent investigation in the absence of any evidence?

(2) Did the trial judge impose a standard of care inconsistent with the established jurisprudence?

(3) Did the trial judge err by finding that there were not reasonable and probably grounds to arrest for intimidation under s. 495(1) of the Criminal Code?

(4) Did the trial judge err in finding that the public interest limitation in s. 495(2) applies?

(5) Did the trial judge err in failing to apply s. 495(3)?

Held: Appeal allowed.

Reasons:

(1) Yes. The trial judge erred by defining the standard of care for negligent investigation in the absence of any evidence.

Neither side called expert evidence at trial. After the close of evidence, the respondents brought a motion to reopen their case, so they could tender expert evidence to support their claim against the OPS based on inadequate training and supervision. In refusing the motion, the trial judge observed that without expert evidence as to the standard of care applicable to police services in Ontario in 2006 their “claim in negligence against the OPS Board was doomed to fail”.

The trial judge took a different view with regard to the claim in negligence against Sgt. JA. While recognizing the general rule that expert evidence is required to establish the standard of care in a negligent investigation claim, she concluded this case fell within the exception for actions involving non-technical matters within the knowledge and experience of the trier of fact.

In doing so, she relied on the decision of this court in Meady v Greyhound Canada Transportation Corp., 2015 ONCA 6, 329 OAC 173. However, Meady can be distinguished because the trial judge in that case had a wealth of other evidence available to him with respect to the police policies, procedures and standards that applied at the time; evidence not available in the case at bar. To fill that vacuum, the trial judge drew on two sources to guide her determination of the standard of care, both problematic.

First, the trial judge referred to the “Declaration of Principles” set out in s. 1 of the Police Services Act, RSO 1990, c. P.15 which she described, at para. 65, as “somewhat instructive of the standard for care owed by a police officer to members of the community”. The principle set out in this statutory provision is far too general to serve as the basis for defining the standard of care in a particular investigation. The general principle does not displace a police officer’s authority to make an arrest when grounds to do so exist under s. 495 of the Criminal Code.

Second, the trial judge drew on the actions taken by other officers who had investigated earlier complaints that arose out of the dispute as instructive to how Sgt. JA should have proceeded, including personal interviews with the actors and discussing ways to de-escalate the tension.

Ultimately, the trial judge erred by proceeding to define a standard of care that was without any evidentiary basis, and contrary to the only pertinent evidence before her.

(2) Yes. The trial judge imposed a standard of care inconsistent with the established jurisprudence.

The trial judge held that Sgt. JA had a duty to further investigate the red flags that undermined the reliability of the information he had. The trial judge found that in assessing Sgt. JA’s conduct, she was entitled to consider not only the information that Sgt. JA had, but also “the information that he did not have but which he could have had upon simple inquiry.” To support this proposition, she cited the decision of Doherty J.A. in R v Golub, (1997) 34 OR (3d) 743 (CA), at para. 21:

In deciding whether reasonable grounds exist, the officer must conduct the inquiry which the circumstances reasonably permit. The officer must take into account all information available to him and is entitled to disregard only information which he has good reason to believe is unreliable.

This passage does not support the proposition for which it was cited. The words “all information available” refers to the information the officer had in his possession – not additional information the officer “could have had upon simple inquiry”.

In 495793 Ontario Ltd. v Barclay, (2016) 132 OR (3d) 241 (CA) the Court of Appeal reversed a decision that followed an approach similar to that adopted by the trial judge in this case. Notwithstanding the absence of any urgent circumstances, the court pointed out in that case that “the trial judge’s criticism of the police for failing to follow-up on, or take steps to become aware of, possible innocent explanations ignores the established jurisprudence that police are not required to exhaust all avenues of investigation, establish that an accused has no defence, or even obtain an accused’s version of events.”

By proceeding contrary to this well-established principle, the trial judge erred in finding that Sgt. JA was required to take additional investigative steps in light of the red flags she identified.

(3) Yes. The trial judge erred by finding that there were not reasonable and probable grounds to arrest for intimidation under s. 495(1) of the Criminal Code. Had the trial judge focused on the elements of the offence of intimidation, and on the information that was available, she would have concluded that there were reasonable grounds to arrest RT for intimidation. The statements and timeline from P and H provided Sgt. JA with enough information to meet the reasonable and probable grounds standard with respect to these two elements. The trial judge erred in finding there were no reasonable and probable grounds to arrest for intimidation.

 (4) Yes. The trial judge erred in finding that the public interest limitation in s. 495(2) of the Criminal Code applied. Section 495(2) places a duty on a police officer who has grounds for arrest under s. 495(1) to not arrest where he or she believes on reasonable grounds that the public interest may be satisfied without arresting the person. The phrase “believes on reasonable grounds” is both a subjective and objective test and both components must be satisfied. The trial judge set out the correct test for s. 495(2), citing Collins. However, it is not clear from the record that Sgt. JA believed on reasonable grounds that the public interest could be satisfied without arresting RT. The subjective component of the test was not satisfied and therefore the trial judge erred in finding s. 495(2) was violated.

 (5) Yes. The trial judge erred in failing to apply s. 495(3) of the Criminal Code. Section 495(3)(b) deems an arrest to be lawful notwithstanding s. 495(2) unless the person asserting its application “alleges and establishes”, in the proceedings at issue that the police violated s. 495(2). The appellants submit that s. 495(3)(b) required the respondents to specifically allege a breach of s. 495(2) in their statement of claim. Without such notice they come to trial not knowing the case they have to meet.

The respondents submit that s. 495(3) does not require that they specifically plead noncompliance with s. 495(2), but rather, that it is sufficient if the allegation is canvassed in cross-examination at trial. The court did not agree and held that s. 495(3)(b) requires an alleged violation of s. 495(2) be directly put to the police officer who made the arrest. It was not put to Sgt. JA in this case. As there was no separate allegation that s. 495(2) applied, s. 495(3) operated to deem Sgt. JA was acting lawfully when he decided to have Tremblay arrested. The trial judge erred in law by failing to apply the deeming provision of s. 495(3).

Ritchie v Ritchie, 2018 ONCA 486

[Rouleau, van Rensburg and Pardu, JJ A]

Counsel:

GS Joseph and SP Kirby, for the appellant

H Fogelman and C Paterson, for the respondent

Keywords: Family Law, Spousal Support, Calculation of Income, Business Losses, Personal Expenses, Equalization of Net Family Property, Shares, Valuation Procedure, Costs, Offers to Settle

Facts:

The appellant appeals two trial decisions that determined issues unresolved by the parties pursuant to partial minutes of settlement. The issues for trial were:

(a) Duration and quantum of spousal support;

(b) Child and spousal support arrears;

(c) Amount to be paid by the appellant to the respondent to reflect the post-valuation-day increase in the value of her shares in KDL which the respondent had transferred to the appellant;

(d) Disposition of a recreational property in the United States (the “Allegheny Mountain property”);

(e) Costs.

Issues:

(1) Did the trial judge err by refusing to deduct business losses incurred by a company (KMI) which the appellant’s company (KDL) had a majority interest in, in determining the appellant’s income for the purpose of calculating spousal support?

(2) Did the trial judge err in her assessment of the change in value of KDL’s shares?

(3) Did the trial judge err in her disposition of the Allegheny Mountain property?

(4) Did the trial judge err in determining costs?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge found it impossible to determine the appellant’s true income, given all of the inconsistencies in his evidence as well as a lack of relevant, reliable, and cogent information. The appellant hired an expert in business valuation who provided an opinion as to the appellant’s income for support purposes. The expert’s opinion initially deducted losses generated by KMI and HNDL, another corporation controlled by the appellant. KMI, under the sole direction and control of the appellant, owned a historic building that the appellant, his current spouse, and some of their respective children reside in. KMI had accumulated substantial and ongoing losses which were funded by another of the appellant’s companies. The trial judge reasonably held that the business losses incurred by KMI made no financial sense and that there was no economic or commercial reason for the losses except for the personal benefit of the appellant. The court was not bound to accept the appellant’s “business judgement” and refused to deduct the losses incurred by KMI in calculating the appellant’s income because the losses were incurred entirely and solely for the benefit of the appellant and without the knowledge or consent of the respondent. Cross-examination revealed that the appellant had incorporated another corporation through which to funnel monies that contributed to his income. The trial judge found that it was the responsibility of the appellant to satisfy the court of his real income and relying on an improperly instructed expert report substantially hampered the decision-making process of the court. She also drew an adverse inference from the lack of full and fair disclosure of the appellant’s finances. The determination of the appellant’s income was reasonable in light of the evidence and thus there was no basis to interfere with it.

(2) No. The court agreed with the trial judge’s finding that the losses incurred by KMI should not be factored into the calculation of the change in the value of the KDL shares because KMI could not repay its debt which had continued to escalate from the date of separation and also because the appellant had continued to fund the losses incurred by KMI with income from other corporations. The extent to which a corporation provides personal benefits to a shareholder, which notionally claims losses or a negative value on the balance sheet, can be a relevant factor in the assessment of the value of the shares.

(3) No. The appellant submitted that the trial judge ought to have ordered him to pay $16,557.50 on account of both the Allegheny Mountain trailer and land lease and not just the trailer. The trial judge, however, was not provided with the precise nature of the parties’ agreement with respect to the Allegheny Mountain property. The respondent had not had access to the leased land and did not oppose a change to the judgement to include a release of the lease as well as the trailer and so the judgement was amended accordingly. The appellant was ordered to indemnify the respondent for any income tax consequences flowing from the release of the lease.

(4) No. The trial judge awarded costs of $314,566 to the respondent, who had requested costs of over $450,000 on a full indemnity basis. The appellant submitted that the trial judge erred in her costs decision because there was a partial settlement and he did no worse at trial than he would have had he accepted the offer to settle. The appellant, however, did not articulate any basis upon which to disagree with the trial judge’s assessment of the offers made by the parties. The offer to settle made by the respondent ignored child and spousal support arrears and ongoing spousal support. It also did not realistically consider any increase in the value of the appellant’s interest in KDL and thus her offer was far below what the court ordered. The trial judge also appropriately applied the relevant cost factors as set out in the Family Law Rules. The appellant’s actions contributed to the higher costs of the litigation by failing to properly disclose his financials and failing to engage his expert to prepare an analysis of his 2015 and 2016 income. The appellant’s answers regarding his finances were vague and unclear and the appellant’s conduct was unreasonable. The appellant’s own offer to settle was so unreasonable that the trial became inevitable. The appellant’s concealment of information could amount to bad faith and he ought to have expected substantial cost consequences.

Prescott & Russell (United Counties) v David S Laflamme Construction Inc., 2018 ONCA 495

[Doherty and LaForme JJ A and Himel J (ad hoc)]

Counsel:

MW Malcolm and HB Borlack, for the appellant (non-party) WSP Canada Inc.

AR O’Brien, for the respondent The Corporation of the United Counties of Prescott & Russell

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Adding Parties, Final or Interlocutory, Limitations Act, 2002, s.21

Facts:

The respondent (plaintiff in this action) brought a motion under rule 5.04(2) for an order adding WSP Canada Inc. (“WSP”) as a defendant in an ongoing action arising out of alleged negligence in the rehabilitation of a bridge. The motion judge found that the respondent can add WSP as a party to the litigation, having determined that the claim against it was brought within the limitation period.

WSP appealed claiming that the motion judge erred in concluding that the claim could not reasonably have been discovered at a point beyond the applicable time limit under the Limitations Act, 2002. The respondent argued that the motion judge was correct and also raised a preliminary jurisdictional point that the order under appeal is interlocutory and not final, meaning that any appeal lies with leave to the Divisional Court.

Issues:

(1) Does the court have jurisdiction to hear the appeal?

Holding: Appeal quashed.

Reasoning:

(1) No. The order under appeal is interlocutory. The court had no jurisdiction to hear the appeal.

To determine whether the order is final or interlocutory, one must examine the terms of the order, the motion judge’s reasons for the order, the nature of the proceedings giving rise to the order, and other contextual factors that may inform the nature of the order.

In this case, the order contained no language to suggest that any final determination was made on the Limitations Act, 2002 issue. It simply allowed the respondent to add WSP as a defendant. In her reasons, the motion judge did not purport to decide the issue for any purpose other than the determination of the motion to add WSP as a party.

The court did not accept the contention that because the motion judge was required to make a finding as to the application of the Limitations Act, 2002, her finding must be regarded as binding in the litigation and therefore final. Section 21 of the Limitations Act, 2002 forbids adding a party where the limitation period has expired. It does not foreclose adding a party absent an affirmative finding that the limitation period has not expired.

Having regard to the above factors, the court concluded that the motion judge’s determination that the action was brought within the limitation period was made for the purposes of the motion only. The order was not final and WSP may seek leave to appeal in the Divisional Court, or it may raise the limitations argument at trial. The court made no comments on the merits of the motion judge’s decision.

Martin v Barrie (City), 2018 ONCA 499

[Feldman, MacPherson and Rouleau JJ A]

Counsel:

H Klein, for the appellants

S Zacharias, for the respondents

Keywords: Torts, Negligence, Occupier’s Liability, Duty of Care, Standard of Care, Standard of Review, Mixed Fact and Law, Palpable and Overriding Error, Housen v Nikolaisen, 2002 SCC 33

Facts:

This is an appeal from a judgment dismissing the appellants’ action in negligence against the respondents. In 2011, the appellants attended a Winterfest event hosted by the City of Barrie (the “City”). The appellant, Ms. M, went down a snow slide at the event, when she struck a piece of hardened, protruding ice and suffered an injury. The trial judge found that Ms. M’s injury was caused by the ice. However, the trial judge did not find that the City had breached the appropriate standard of care, and therefore dismissed the action.

Issues:

(1) Did the trial judge make a palpable and overriding error by concluding that the ice chunk that struck Ms. M was “small”?

(2) Did the trial judge err in the inference he drew from the hearsay utterance (“I have to fill this again”) of an on-site City employee that Ms. M heard immediately after she was hurt?

(3) Did the trial judge err in concluding that the City did not breach the standard of care?

Holding: Appeal dismissed.

Reasoning:

(1) No. Ms. M herself testified that she did not see the ice chunk until after she struck it and she described it as about four to six inches in size. The trial judge’s characterization of it as “small” was entirely justified.

(2) No. The utterance of the City’s employee supports the position of the respondents. It demonstrates that the employee stationed at the bottom of the slide in the landing area was paying close attention to the condition of the landing and moved quickly to fill in the gap in the snow as would be expected.

(3) No. The trial judge made no error of any kind – let alone a palpable and overriding error – in his analysis of the evidence and his application of the relevant negligence law principles. He did not ignore the evidence relating to inspection and maintenance. Therefore, there is no error in his finding that the City did not breach the appropriate standard of care.

Ontario Ombudsman v Hamilton (City), 2018 ONCA 502

[Doherty and LaForme JJ A and Himel J (ad hoc)]

Counsel:

RA Centa and D Cooney, for the appellant

B MacNeil, for the respondent

Keywords: Municipal Law, Jurisdiction, Definition, Municipal Act, 2001, SO 2001, c 25, Section 239(1), Ombudsman Act, RSO 1990, c O 6, Section 14.1, Municipal Elections Modernization Act, 2016, SO 2016, c 15, Section 65, Schnarr v Blue Mountain Resorts Limited, 2018 ONCA 31

Facts:

The Ontario Ombudsmen (“Ombudsmen”) appeals the ruling of the Divisional Court that the Ombudsmen did not have jurisdiction under section 14.1 of the Ombudsman Act to investigate the alleged non-compliance with the open meeting requirement of section 239 of the Municipal Act by the Election Compliance Audit Committee (“Audit Committee”) or the Property Standards Committee (“Standards Committee”).

The City of Hamilton cross-appeals that even if the entities in question were “local boards”, the deliberation component of their proceedings did not constitute “meetings” within the meaning of section 239(1) of the Municipal Act, 2001, SO 2001, c 25.

Section 239(1) of the Municipal Act declares that “all meetings shall be open to the public”. Section 239.1(b) of the Municipal Act provides that a person may request an investigation of whether a “municipality or local board” has complied with the public meeting requirement in s. 239. The Ombudsman, under section 239.1(b), may conduct that investigation. Section 14.1 of the Ombudsman Act dovetails with section 239.1(b) of the Municipal Act by empowering the Ombudsman to investigate complaints made with respect to the failure to comply with the public meeting requirement of section 239.

Issues:

(1) Did the Divisional Court err in holding that neither the Audit Committee nor the Standards Committee was a “local board” within the meaning of section 14.1 of the Ombudsman Act, RSO 1990, c O 6?

(2) If the Divisional Court is found to have erred, does the deliberative component of the Audit Committee and the Standards Committee constitute “meetings” within the meaning of section 239(1) of the Municipal Act, 2001, SO 2001, c 25?

Holding: Appeal and cross-appeal dismissed.

Reasoning:

(1) No. Neither the Audit Committee nor the Standards Committee are among the entities specifically identified in the definition provided s. 1(1) of the Municipal Act:

‘Local board’ means a municipal service board, transportation commission, public library board, board of health, police services board, planning board, or any other board, commission, committee, body or local authority established or exercising any power under any Act with respect to the affairs or purposes of one or more municipalities, excluding a school board and a conservation authority.

The Ombudsman’s submission would have considerable force if the general language at the end of the definition of “local board” stood alone. It does not. That general language follows the identification of several specific entities as “local boards”. As this court recently observed in Schnarr v Blue Mountain Resorts Limited, 2018 ONCA 313, at para. 52:

Where a class of things is modified by general wording that expands the class, the general wording is usually restricted to things of the same type as the listed items (ejusdem generis).

Applying the maxim of statutory interpretation of ejusdem generis to the definition of “local board”, the Court was satisfied that the general language at the end of the definition does not include entities which cannot be said to carry on the operations of the municipality. The functions of the Audit Committee and the Standards Committee do not fall within that descriptor. They are not local boards.

(2) Given the finding that neither is a “local board”, it was unnecessary to decide this question. However, the Court noted that on April 1, 2018, the Municipal Elections Modernization Act, 2016, section 65 came into force and repealed subsection 88.34 of the Municipal Elections Act. The new provision, which applies to the Audit Committee, reads:

Open Meetings

(9.1) The meetings of the Committee under subsection (9) shall be open to the public, but the Committee may deliberate in private. 2017, section 20, Schedule 10, (section 2).

Prescott v Barbon, 2018 ONCA 504

[Watt, Pepall and Miller JJ A]

Counsel:

WG Scott, for the appellants

D Fulton, for the respondent ERS

DV Abreau and T J Buckley, for the Respondent RB

D Polgar, for the intervenor Economical Insurance Company

Keywords: Civil Procedure, Orders, Administrative Dismissals for Delay, Setting Aside, Reid v Dow Corning Corp (2002), 11 CPC (5th) 80 (Ont SC), Rules of Civil Procedure, Rules 48.14, 48.15

Facts:

On December 28, 2008, the appellants were passengers of a motor vehicle. One of the appellants was driving. The two respondents’ vehicles and appellant driver’s vehicle were involved in a three-car collision. The appellants sued for injuries sustained in the accident. Wawanesa Mutual Insurance Company denied coverage to respondent ERS because he was operating the vehicle without the owner’s consent.

The appellants’ action was administratively dismissed as abandoned in August 2011, pursuant to r. 48.15 of the Rules of Civil Procedure. The appellants’ lawyer failed to inform his clients of the dismissal and only reported the matter to LawPRO over two years later. The appellants served a notice of motion to set aside the dismissal in February 2014, two years and six months after the dismissal order. Master Hawkins heard the motion and overturned the registrar’s administrative dismissal. The respondents appealed the Master’s decision. The appeal judge allowed the appeal and overturned the Master’s decision, reinstating the administrative dismissal. The appellants appeal from that decision and the respondents seek leave to appeal the appeal judge’s costs award.

Issues:

(1) Was interference with the Master’s decision justified?

(2) Did the Master err in failing to consider the entire statutory scheme relating to administrative dismissals in his contextual analysis?

(3) Did the Master err in finding the respondents partially responsible for the administrative dismissal?

(4) Did the Master err in his approach to the factors set out in Reid v Dow Corning Corp (2002), 11 CPC (5th) 80 (Ont SC), particularly on his failure to consider the principle of finality in his prejudice analysis?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. While the decision of a Master granting or refusing to set aside an administrative dismissal is discretionary and entitled to deference, interference with the Master’s decision was justified. A Master’s decision may be set aside only if made on an erroneous legal principle or infected by palpable and overriding error of fact.

(2) Yes. While the Master was correct in some of his contextual analysis and interpretation of the rules, he incorrectly described the changes to rr. 48.14 and 48.15 and the statutory scheme at para. 19, as he noted that: “What now constitutes an acceptable level of diligence in the prosecution of an action is a much easier test to meet than was the case in the past.” He stated that the repeal of r. 48.15 “may … be considered as part of the context in which this motion […] was argued.” Rule 48.15 was in force when the registrar dismissed the action as abandoned, but by the time the motion was argued, it had been repealed. As such, it could not form part of the applicable context, and it was an error for the Master to make this statement.

(3) Yes. The Master erred in finding the respondents partially responsible for the administrative dismissal. The appeal judge took issue with this finding. She stated that the party who commences the proceeding bears the primary responsibility for its progress, and the Master erred in law in concluding that the respondents were at fault for not filing a defence. The rule governing administrative dismissals places no obligation on defendants to file a defence to prevent a registrar’s dismissal. Therefore, the Master’s approach in treating the respondents as blameworthy created a categorization that does not exist under the Rules of Civil Procedure. The appeal judge’s conclusion is correct.

In addition, there was another fundamental problem embedded in the Master’s consideration of the first and second criteria of the Reid test. There was no evidence filed by the appellants that it had always been their intention to proceed with the action. This was inadequate particularly given that there was no evidence or reference of any contact with any of the respondents between January 3, 2012 and February, 2014. The Master’s finding that the respondents intended to prosecute their claim was unreasonable in light of the full factual context.

(4) Yes. The Master erred in his approach to the factors set out in Reid, particularly on his failure to consider the principle of finality in his prejudice analysis. In considering the fourth Reid factor, the Master was required to address: (i) did the appellant satisfy their onus to establish no significant actual prejudice to the respondents’ ability to defend the action due to the appellants’ delay; and (ii) whether in light of the delay, the principle of finality and the respondents’ reliance on the security of its position should nevertheless prevail. There is no need to resort to presumptions or inferences of prejudice. The question is simply whether the interest in finality must trump the opposite party’s pleas for an indulgence. The appeal judge acknowledged in her reasons that the Master addressed the issue of prejudice but maintained that the Master erred in failing to consider the finality principle. This assessment was correct.

The appeal judge was correct in setting aside the Master’s decision and considering the merits of the motion anew. There was no reason to interfere with the costs order made by the appeal judge, and leave to appeal that order was denied.

Sammut v Sammut, 2018 ONCA 507

[Feldman, MacPherson and Rouleau JJ A]

Counsel:

DN Magisano and C Shorey, for the appellant

MA Ross, for the respondent

Keywords: Civil Procedure, Default Judgments, Setting Aside, Damages

Facts:

The respondent brought action in the Superior Court of Justice against the appellant alleging that she began to divert and steal money from him. At the time, the appellant’s whereabouts were unknown and she was noted in default. Pursuant to noting in default, the appellant was deemed to admit truth of all allegations of fact made in the statement of claim. On the basis of unchallenged evidence, the respondent established that the appellant used fraud and theft to obtain funds. Woollcombe J of the Superior Court of Justice granted default judgment against the appellant for $466,420.22, plus interest and costs of $5,000.

The appellant moved to set aside the order on the basis that she was not served with the respondent’s Statement of Claim and, therefore, did not have an opportunity to defend the case against her. The appellant’s home address and email address had been incorporated into a previous court order. However, at some point the appellant moved to a new address and there was a one letter error in the email address.

Wein J of the Superior Court of Justice rejected this argument, concluding that while there was an error in recording her email address, she was served at the mail address she had given, and there were ample indications that she was aware of the action against her.

The appellant appeals from the order of Wein J denying the appellant’s motion to set aside the order of Woollcombe J.

Issues:

(1) Did the motion judge err in refusing to set aside the default judgment as of right?

(2) Did the motion judge fail to properly consider and apply the test for setting aside a default judgment?

(3) Did the motion judge fail to properly review the quantification of damages arrived at by the judge who granted the default judgment?

Holding: Appeal allowed, in part.

Reasoning:

(1) No. A motion judge’s decision concerning setting aside a default judgment is discretionary.

(2) No. The appellant did not establish that the motion judge made an error in principle, a palpable and overriding error of fact, or that the decision is so clearly wrong as to amount to an injustice. The appellant had a clear obligation to advise the respondent of a change in her mailing address. She did not do this. The initial one letter error in her email address was of no moment; it is clear that the appellant received the relevant legal documents throughout the litigation.

(3) Yes. The court agreed that the motion judge erred on two points. First, by saying that “[the appellant] has not provided any evidence that would undermine the conclusion that a substantial amount of money was owing to [the respondent].” Second, by concluding that “[i]t is simply too late now to bring forward arguments concerning the quantification of the amount owing”.

Unlike the default judgment motion, the appellant was represented by counsel at the motion to set aside and filed extensive material, including a comprehensive affidavit. In the court’s view, it was not “too late” for the appellant to challenge the quantification in the default judgment.

Having reviewed the record and read and heard extensive submissions, the court was of the view that the global damages award must be reduced to $289,740.39.

York Region Standard Condominium Corporation No 1039 v Richmond Hill (Town), 2018 ONCA 511

[Feldman, MacPherson and Rouleau JJ A]

Counsel:

P Di Monte, for the appellant

K Sherkin and R Wozniak, for the respondents

Keywords: Civil Procedure, Orders, Dismissal for Delay, Standard of Review, Palpable and Overriding Error, Error of Fact, Error of Law

Facts:

This appeal is from an order dismissing the appellant’s claim against the respondents for delay. The claim involved allegations of negligence in the construction of a condominium built in 2004, resulting in defects that were discovered on August 5, 2012.

The claim was issued on August 1, 2014. However, it was not served on the defendants within the six months provided in the Rules of Civil Procedure. Consequently, some of the defendants – the respondents in this appeal – brought a motion for dismissal of the claim against them for delay.

The appellant explained that it encountered problems locating and serving the respondents due to inaccurate information filed in the respondents’ corporation profile records. In support of the motion, the respondents filed an affidavit to the effect that the documents relating to the condominium project were purged in the normal course of business and that this documentation was no longer available as a result. The respondents’ affidavit, however, did not specify when the documents were destroyed. Nevertheless, the master found that the appellant’s documents were available and that the documents of the institutional defendants (Tarion and Richmond Hill) had been preserved. Consequently, the master dismissed the motion on the basis that the appellant had an adequate explanation for the delay and established that the respondents suffered no prejudice.

On appeal to the Superior Court, the judge allowed the appeal and dismissed the claim as against the respondents. The judge held that the master had made palpable and overriding errors of fact and errors of law.

Issue:

(1) Did the master make palpable and overriding errors of fact?

(2) Did the master make palpable and overriding errors of law?

Holding: Appeal allowed.

Reasoning:

(1) No. The master did not make palpable and overriding errors of fact. The error was contained in the typed version of the master’s handwritten reasons which were presented to and relied upon by the appeal judge. More specifically, the central error of fact identified by the appeal judge was the master’s finding that the “documents of the individual Defendants have been preserved”. However, the typed version incorrectly transcribed “institutional” as “individual”. Consequently, the court held that there was no inconsistency in the master’s findings.

(2) No. The master correctly stated that the onus was on the appellant to explain the delay and establish that the respondents had suffered no prejudice. Moreover, the court held that it was open to the master to infer that the respondents’ documents were destroyed well before the claim was issued, such that the delay in service of the claim engendered little or no prejudice. As a result, the court held that the master’s decision was entitled to deference and ought to be restored.

Short Civil Decisions

Giffen v Thomson, 2018 ONCA 490

[Juriansz, Benotto and Fairburn JJ A]

Counsel:

No one appearing for the appellants

M Robertson, for the respondent

Keywords: Appeal Abandoned, Trust Funds, Costs

Perry v D’Souza, 2018 ONCA 491

[Doherty and LaForme JJ A and Himel J (ad hoc)]

Counsel:

A Moustacalis, for the appellant

J Figliomeni, for the respondent

Keywords: Summary Judgment, Evidence, Costs

Kowalsky v Asselin-Kowalsky, 2018 ONCA 492

[Doherty and LaForme JJ A and Himel J (ad hoc)]

Counsel:

K Kieller and A Hunter, for the moving party, MK

P Kraemer, for the responding party, D A-K

Keywords: Jurisdiction, Costs

Loken v St Peter’s Court Apartments, 2018 ONCA 501

[Pepall, van Rensburg and Paciocco JJ A]

Counsel:

J Morton, for the appellant

J Schmidt, for the respondent

Keywords: Real Property, Adverse Possession, Costs

Walderman v Investia Services Financiers Inc., 2018 ONCA 505

[Feldman, MacPherson and Rouleau JJ A]

Counsel:

J Binavince, for the appellant

J Hamilton, for the respondent TR

S Robinson, for the respondent AC

M Doherty, for the respondents Investia Financial Services Inc. and CMC Markets Inc.

Keywords: Civil Procedure, Appeals, Administrative Dismissal for Delay

Wachsberg v Wachsberg, 2018 ONCA 508

[Juriansz, Benotto and Fairburn JJ A]

Counsel:

G Karahotzitis and PD Schmidt, for the appellant

H Niman and K Normandin, for the respondent

Keywords: Family Law, Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Separation Agreements, Disclosure, Hendrickson v Kallio, [1932] OR 675

Carr v Condon, 2018 ONCA 509

[Juriansz, Benotto and Fairburn JJ A]

Counsel:

Aaron Franks and Michael Zalev, for the appellant

Kirsten Hughes, Larissa Bazaan and Stephen Grant, for the respondent

Keywords: Family Law, Spousal Support, Compensatory Support,  Spousal Support Advisory Guidelines, Moge v Moge, [1992] 3 S.C.R. 813, Divorce Act, RSC 1985, c 3, section 17(7), Standard of Review, Hickey v Hickey, [1999] 2 SCR 518

Abrahamovitz v Berens, 2018 ONCA 512

[Laskin, Feldman and Miller JJ A]

Counsel:

SS Marr and Z Silverberg, for the appellant, the Estate of GZ

DP Jacobs, for the respondents

Keywords: Estates, Costs

Arrocha v Harrison, 2018 ONCA 513

[Watt, Huscroft and Trotter JJ A]

Counsel:

P Harrison, in person

I Frisch, for LA

C Smith and A Pachai, for the City of Toronto

Keywords: Family Law,Support, Fraud, Orders, Costs, Failure to Comply, Family Law Rules, Rule 1(8)(b)

Foisey v Green Estate, 2018 ONCA 514

[Watt, Huscroft and Trotter JJ A]

Counsel:

BN Radnoff, for the appellant

J Lester, for the respondent

Keywords: Estates, Appeals, Jurisdiction, Interlocutory Orders, Durbin v Brant, 2017 ONCA 463

Criminal and Regulatory Offences

R v Jurkus (Publication Ban), 2018 ONCA 489

[Sharpe, Pepall and Fairburn JJ A]

Counsel:

M Fawcett, for the appellant

P Ducharme, for the respondent, SJ

J Presser and J Marshman, for the respondent, LL

Keywords: Criminal Law, Stay of Proceedings, Unreasonable Delay, R v Jordan, 2016 SCC 27, Canadian Charter of Rights and Freedoms, Section 11(b)

R v Peters, 2018 ONCA 493

[Strathy CJO, Juriansz and Roberts JJ A]

Counsel:

N Jamaldin and P Genua, for the appellant

C Walsh, for the respondent

Keywords: Criminal Law, Smuggling, Narcotics, Sentencing, Canadian Charter of Rights and Freedoms, Sections 7 & 10(a), (b)

R v Ajise, 2018 ONCA 494

[Sharpe, Pardu and Fairburn JJ A]

Counsel:

RC Bottomley, for the appellant

X Proestos, for the respondent

Keywords: Criminal Law, Fraud, Evidence, Opinion, Prior Inconsistent Statements, Dissent

R v Ahmaddy, 2018 ONCA 496

[Watt, Huscroft and Trotter JJ A]

Counsel:

F Mirza, for the appellant

JDM Clarke, for the respondent

Keywords: Criminal Law, Trafficking, Evidence, Credibility, Controlled Drugs and Substances Act, S.C. 1996, c 19, Section 5(3)(a)

R v Allen, 2018 ONCA 498

[Watt, Hourigan and Miller JJ A]

Counsel:

P Campbell, for the appellant, JR

M Bojanowska, for the appellant, MDA

J Kerbel, for the appellant, ZD

J Patton, for the respondent

Keywords: Criminal Law, First Degree Murder, Fresh Evidence, Supreme Court Act, RSC 1985, c S-26, Section 43(1.1), Criminal Code, RSC 1985, c C-46, Section 683(1)(d)

R v AHM (Publication Ban), 2018 ONCA 503

[Strathy CJO, Juriansz and Hourigan JJ A]

Counsel:

MM Dwyer, for the appellant

A Cappell, for the respondent

Keywords: Criminal Law, Sexual Assault, Common Assault, Corroborative Evidence, R v W(D), [1991] 1 SCR 742

R v Singh, 2018 ONCA 506

[Feldman, MacPherson and Rouleau JJ A]

Counsel:

Arjun Vishwanth, for the appellant

Katie Doherty, for the respondent

Keywords: Provincial Offences, Jurisdiction, Certiorari, Provincial Offences Act, RSO 1990, c P 33, Sections 34, 36, 141(4)

R v McLellan, 2018 ONCA 510

[Doherty, Rouleau and Miller JJ A]

Counsel:

B Greenspan and N Lutes, for the appellant Kyle M

MR Gourlay, for the appellant Kristopher M

J Klukach and K Shai, for the respondent Her Majesty the Queen

Keywords: Criminal Law, First Degree Murder, Jury Instructions, Criminal Code, RSC 1985, c C-46, Section 21(2)

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 22 – 25)

Good evening.

Following are summaries of this week’s civil decisions of the Court of Appeal of Ontario.

In a case that has received much media and judicial attention, Yaiguaje v Chevron Corporation, it appears that the Court has finally put an end to the matter. The Court determined that the shares of Chevron Canada and its assets are not available to satisfy a US$9.5 billion judgment against the ultimate US parent, Chevron Corporation. The Court stated that the separate legal personality of corporations is fundamental to our law, and embodied in statute, and there was no basis for piercing the corporate veil in accordance with the test set out in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co., (1996), 28 O.R. (3d) 423. The Court commented that to allow the judgment to be enforced against the shares in, and assets of, Chevron Canada, would be to incorporate into our law the “group enterprise” theory of liability, which holds that where several corporations operate closely as part of the same “group” of corporations, they are in reality a single enterprise and should, accordingly, be responsible for each other’s debts. This theory has been consistently rejected by our courts, and was rejected once again. The Court did, however, significantly reduce the costs awarded to the Chevron corporations, having determined that this was public interest litigation.

In Beatty v Wei, the Court set aside the application judge’s interpretation of the Illegal Substances Clause commonly used as an additional term in the Ontario Real Estate Association/Toronto Real Estate Board standard form Agreement of Purchase and Sale (APS). Given that this was a standard form contract, the standard of review was correctness. Since the Sellers’ representation and warranty that the use of the property had never been for the growth or manufacture of illegal substances was limited to their “knowledge and belief”, the Court found that there was no breach of that clause when it was subsequently discovered by the Purchaser, much to the surprise of the Sellers, that the home had previously been used to illegally grow cannabis. It was therefore the Purchaser who was in breach for failing to close.

Other topics covered this week included the reversal of summary judgment granted against the Attorney General in a negligence and breach of statutory duty claim arising out of the assault by and against inmates on the basis that the judge’s findings of fact were not supported by the evidence and a trial was required, discoverability of a nuisance claim where a parallel injurious affection claim was before the OMB, discoverability in a MVA action, production of settlement privileged documents on a motion to set aside an approved proposal in bankruptcy, a mortgage priority dispute involving the doctrine of equitable subrogation, setting aside default judgments and extension of time to appeal.”

Please feel free to share this blog with friends and colleagues. As, always we welcome your comments and feedback.

I hope everyone has an enjoyable weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2053

Table of Contents

Yaiguaje v Chevron Corporation, 2018 ONCA 472.

Keywords: Corporations, Separate Legal Personality, Piercing Corporate Veil, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co., (1996), 28 O.R. (3d) 423, Civil Procedure, Orders, Enforcement, Execution, Exigible Assets, Execution Act, RSO, 1990, c E24, Costs, Public Interest Litigation

Beatty v Wei, 2018 ONCA 479.

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Ontario Real Estate Association/Toronto Real Estate Board Standard Forms, Contractual Interpretation, Standard of Review, Correctness, Illegal Substances Clause, Breach of Representation, Breach of Warranty, Ledcor Construction Ltd v Northbridge Indemnity Insurance Co, 2016 SCC 37

Fontenelle v Canada (Attorney General), 2018 ONCA 475.

Keywords: Torts, Negligence, Statutory Duty of Care, Summary Judgment, Genuine Issue Requiring Trial, Fact-Finding Powers, Fair and Just Determination, Standard of Review, Hryniak v Mauldin, 2014 SCC 7

Har Jo Management Services Canada Ltd v York (Regional Municipality), 2018 ONCA 469.

Keywords: Torts, Nuisance, Expropriations, Injurious Affection, Ontario Municipal Board, Exclusive Jurisdiction, Expropriations Act, RSO 1990, c. E.26, Ontario Municipal Board Act, R.S.O. 1990, c. O.28, Civil Procedure, Limitation Periods, Discoverability, Subjective Branch of Discoverability Test, Objective Branch of Discoverability Test, Fennell v Deol, 2016 ONCA 249, “Appropriate Means”, 407 ETR Concession Company Limited v Day, 2016 ONCA 709, 133 OR (3d) 762, Presidential MSH Corporation v Marr Foster & Co. LLP, 2017 ONCA 325, Limitations Act, 2002, s.5

Alderton v Haylor Properties Niagara Inc, 2018 ONCA 483.

Keywords: Employment Law, Wrongful Dismissal, Civil Procedure, Default Judgments, Setting Aside, Mountainview Farms Ltd v McQueen, 2014 ONCA 194

Bergen v Fast Estate, 2018 ONCA 484

Keywords: Torts, Negligence, Motor Vehicle Accident, Civil Procedure, Limitation Periods, Discoverability, Fennell v Deol, 2016 ONCA 249, Limitations Act, SO 2002, c 24, ss 5(1) and 5(2), Summary Judgment, Best Foot Forward

Emery Silfurtun Inc (Re), 2018 ONCA 485

Keywords: Bankruptcy and Insolvency, Proposals, Civil Procedure, Setting Aside, Evidence, Documentary Disclosure, Settlement Privilege, Appeals, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss 63(1), 193(a)

L-Jalco Holdings Inc v MacPherson, 2018 ONCA 488

Keywords: Real Property, Contracts, Mortgages, Priority, Equitable Subrogation, Mutual Trust Co v Creditview Estate Homes Limited, [1997] OJ No 3258 (CA), Civil Procedure, Summary Judgment

Rahsepar v. Estabrooks, 2018 ONCA 487

Keywords: Civil Procedure, Appeals, Extension of Time, Kefeli v Centennial College of Applied Arts and Technology (2002), 23 CPC (5th) 35 (Ont. C.A., in Chambers)

For short civil decision click here

For criminal and provincial offences decisions click here

Civil Decisions

Yaiguaje v Chevron Corporation, 2018 ONCA 472

[Hourigan, Huscroft and Nordheimer JJ.A.]

Counsel:

Lenczner, B. Morrison, K. Baert and C. Poltak, for the appellants

Grant, for the appellants

Zarnett, S. Kauffman and P. Kolla, for the respondent Chevron Canada Limited

L.P. Lowenstein, L. K. Fric, C. Hunter and R. Frank, for the respondent Chevron Corporation

O’Sullivan and P. Michell, for Chevron Canada Capital Company

Keywords: Corporations, Separate Legal Personality, Piercing Corporate Veil, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co., (1996), 28 O.R. (3d) 423, Civil Procedure, Orders, Enforcement, Execution, Exigible Assets, Execution Act, RSO, 1990, c E24, Costs, Public Interest Litigation

Facts:

The appellants are indigenous peoples of the Orienté region of the Republic of Ecuador. From 1964 to 1992, oil exploration and extraction activities were undertaken on their lands resulting in extensive environmental pollution of the area.

One of the corporations involved in the oil operations was an indirect subsidiary of Texaco Inc. (“Texaco”). Since 2001, Texaco has been part of the global conglomerate, Chevron Corporation. Chevron Corporation’s principal business is holding 100 percent of the shares in its subsidiary corporations and managing those investments.

The appellants sought compensation for the environmental devastation through a class action in the Ecuadorian court resulting in a US$9.5 billion judgment against Chevron Corporation. Since Chevron Corporation had no assets in Ecuador, the appellants sought enforcement of their judgment in the United States. Chevron Corporation opposed the enforcement of the judgment on the ground that it had been obtained by fraud and the United States District Court accepted Chevron Corporation’s submission and made an order enjoining any enforcement proceedings of the Ecuadorian judgment in the United States.

The appellants then targeted the shares and assets of Chevron Canada Limited (“Chevron Canada”) in an action in 2012 in the Ontario Superior Court of Justice for the recognition and enforcement of the Ecuadorian judgment. The parties agreed to determine by means of a summary judgment motion the issue of whether Chevron Canada’s shares and assets are exigible to satisfy the judgment debt of Chevron Corporation. Hainey J. heard the motion for summary judgment. Chevron Corporation and Chevron Canada were successful on that motion.

The appellants argued that the broad wording of s. 18(1) of the Execution Act, R.S.O., 1990, c. E.24 (the “Act”), permits execution on Chevron Canada’s shares and assets to satisfy the Ecuadorian judgment. In the alternative, they submitted that the court should pierce the corporate veil in order to render Chevron Canada’s shares and assets exigible.

Motion for Summary Judgment

Hainey J. concluded that the shares and assets are not available pursuant to the Execution Act to satisfy the Ecuadorian judgment against Chevron. He noted that Chevron Corporation does not own the shares of Chevron Canada. Rather, all of Chevron Canada’s shares are owned by its direct parent, Chevron Canada Capital Company (“CCCC”). Furthermore, Hainey J. concluded that Chevron Canada’s shares and assets cannot be made available to satisfy the judgment by piercing the corporate veil because the appellants failed to meet the test established in Transamerica Life Insurance Co. of Canada v Canada Life Assurance Co., (1996), 28 O.R. (3d) 423 (Gen. Div.).

Motion to add CCCC as a party

Over a month after arguments concluded on the summary judgment motion, the appellants brought a motion to further amend their Amended Statement of Claim to add CCCC as a defendant. Hainey J. dismissed this motion on the basis that because the appellants sought the same relief against CCCC as they did against Chevron Canada, their claim against CCCC could not succeed for the same reasons that it could not against Chevron Canada. Hainey J. further held that the appellants did not establish that the courts of Ontario would have jurisdiction over CCCC, a company incorporated in Nova Scotia with no assets or operations in Ontario.

Costs

Hainey J. awarded costs of the motion on a partial indemnity basis in the amounts of $533,001.81 to Chevron Canada and $313,283 to Chevron Corporation. Given the high stakes of the litigation, the various theories the appellants advanced, and the appellants’ numerous requests for additional discovery and cross-examination, it was reasonable for the appellants to expect Chevron Corporation and Chevron Canada to expend significant resources to defend the claims. Hainey J. rejected the appellants’ submissions that he should award no or only nominal costs because the appellants’ action raised novel points of law that were in the public interest. As the appellants were partially successful on their motion to strike Chevron Corporation’s defences, Hainey J. reduced Chevron Corporation’s claim for costs by $50,000.

Issues:

(1) Did Hainey J. err in his interpretation of the Act, such that Chevron Canada’s shares and assets are exigible to satisfy the judgment debt of Chevron Corporation?

(2) Did Hainey J. err in failing to pierce the corporate veil?

(3) Did Hainey J. err in dismissing the motion to add CCCC as a party?

(4) Should the appellants’ motion to tender fresh evidence on appeal be granted?

(5)(a) Should leave to appeal the costs order be granted?

(b) If so, should the court interfere with the costs order?

Holding: Appeal dismissed, except on the issue of costs.

Reasoning:

(1) No. The appellants sought a declaration against Chevron Canada that the shares of its company are exigible. Such an order is a legal impossibility and cannot be made. A corporation’s shares do not belong to the corporation, but to the shareholders. Chevron Corporation has no existing rights as against the assets of Chevron Canada. The appellants relied on s. 18(1) to argue that it permits the seizure of any interest and further submit that Chevron Corporation has an “indirect interest” in Chevron Canada. It is not enough to state that Chevron Corporation has an amorphous indirect right to the assets of Chevron Canada; there must be an existing legal right that permits seizure of the assets. While a sheriff may seize money, equipment, or shares owned by a judgment debtor corporation, the assets of the issuing corporation are not exigible. Hainey J. did not err in rejecting the appellants’ submission that under the Act, Chevron Canada’s shares and assets are exigible to satisfy the Ecuadorian judgment. The appellants’ interpretation is not supported by the wording of the Act and would violate fundamental principles of our corporate law.

(2) No. The court has repeatedly rejected an independent just and equitable ground for piercing the corporate veil in favour of the approach taken in Transamerica, which states that there are only three circumstances where the court will pierce the corporation veil:
(1) When the court is construing a statute, contract or other document;
(2) When the court is satisfied that a company is a “mere façade” concealing the true facts; and
(3) When it can be established that the company is an authorized agent of its controllers or its members, corporate or human.
This test is consistent with the principle reflected in the various business corporation statutes in Canada that corporate separateness is the rule. It is important that courts be rigorous in their application of the Transamerica test because the rule is provided for in statute and stakeholders of corporations have a right to believe that, absent extraordinary circumstances, they may deal with the corporation as a natural person.

The appellants submitted that Hainey J. erred in finding that Chevron Corporation did not wield sufficient control of Chevron Canada to meet the first part of the Transamerica test. This argument was not considered as the appellants could not meet the second part of the conjunctive test: that the subsidiary company was incorporated for a fraudulent or improper purpose or used by the parent as a shell for improper activity. In the appellants’ Amended Statement of Claim, they specifically plead that Chevron Canada has not engaged in any inappropriate conduct. Hainey J. correctly found that, under the Transamerica test, this is a complete bar to the request to pierce the corporate veil.

The appellants argued that Transamerica is not applicable because in this case we are dealing with the enforcement of a judgment debt, not a case of first instance where the issue is establishing liability. This submission was not accepted. If it were, a judgment against any corporation could be enforced against the assets of any other related corporation. Not only is such an argument problematic from a policy standpoint, it comes dangerously close to the adoption of the group enterprise theory of liability. That theory holds that where several corporations operate closely as part of the same “group” of corporations, they are in reality a single enterprise and should, accordingly, be responsible for each other’s debts. This theory has been consistently rejected by our courts.

The appellants further submitted that the corporate separateness of Chevron Corporation and Chevron Canada should be ignored for policy reasons. Yet they provided no guidance regarding the basis upon which it will be appropriate to pierce the corporate veil in future cases. Their submissions boiled down to an exhortation that we should do the right thing, untethered to the jurisprudence, the statutory rights of corporations, or any discernible principle. Even if the court were free to do that, which it is not, this case illustrates the difficulties with such an approach. At this stage, the equities of this case are far from clear.

(3) No. The claim against CCCC’s assets must fail for the same reasons that the claim against Chevron Canada’s assets must fail. Accordingly, the amended pleading was not legally tenable and did not disclose a cause of action as against CCCC. The test under rule 5.04(2) was not met to add CCCC as a party.

(4) No. The documents proposed to be tendered relate primarily to the interactions among Chevron Canada and its subsidiaries. They are, at best, of marginal relevance to the matters at issue on these appeals and could not have affected the result.

(5)(a) Yes. Hainey J. erred when he found that this was not public interest litigation. The fact that this is public interest litigation impacts on the quantum of costs. It should have been factored into Hainey J.’s analysis of a reasonable amount of costs in all of the circumstances.

(5)(b) Yes. It fell to the court to make the proper costs award in all of the circumstances. When the true nature of the litigation is considered, the amounts awarded below were excessive. The court reduced the costs awarded to $150,000 to Chevron Canada and $100,000 to Chevron Corporation, all-inclusive.

Nordheimer J.A. (concurring):

Norheimer J.A. disagreed with Hourigan J.A. and Huscroft J.A. on (i) whether the test established in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. is the appropriate one to apply in these circumstances; and (ii) on the general approach he adopts with respect to when it is appropriate to pierce the corporate veil. While he accepted the conclusion that it would not be appropriate to do so in this case, he did not agree that it would never be appropriate to lift the corporate veil to permit the enforcement of a judgment unless the requirements of the Transamerica test are met.

Beatty v Wei, 2018 ONCA 479

[Pepall, Hourigan and Brown JJ.A.]

Counsel:

John Lo Faso and David Morawetz, for the appellants JoB and JaB

Patrick Bakos and Shida Azari, for the respondent Zhong Wei

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Ontario Real Estate Association/Toronto Real Estate Board Standard Forms, Contractual Interpretation, Standard of Review, Correctness, Illegal Substances Clause, Breach of Representation, Breach of Warranty, Ledcor Construction Ltd v Northbridge Indemnity Insurance Co, 2016 SCC 37

Facts:

This appeal puts into question the interpretation of an Illegal Substances Clause (“the Clause”) commonly used in the Ontario Real Estate Association/Toronto Real Estate Board standard forms of Agreement of Purchase and Sale (“APS”). At issue is the second part of the Clause, where the seller represents and warrants that “to the best of the Seller’s knowledge and belief, the use of the property and the buildings and structures thereon has never been for the growth or manufacture of illegal substances.”

In the present case, after the parties had entered into an APS, the Purchaser discovered that the property had been used as a marijuana grow-op before the Sellers had acquired it. The Purchaser took the position that he was entitled to terminate the agreement and demanded the return of his deposit. The Sellers disagreed and refused to terminate the APS. Competing applications ensued. The application judge held that the Purchaser’s discovery of information about the property’s prior use amounted to a breach by the Sellers of their representation and warranty in the Clause. The application judge held the Purchaser was entitled to rescind the agreement and obtain the return of the deposit, but directed the Purchaser’s claim for damages to proceed to trial. The Sellers appealed.

Issues:

(1) Is the interpretation of a standard form contract a question of law subject to the standard of review of correctness?

(2) Did the application judge err in his interpretation of the Clause?

Holding: Appeal allowed.

Reasoning:

(1) Yes. In Ledcor Construction Ltd v Northbridge Indemnity Insurance Co, 2016 SCC 37, the Supreme Court recognized that: “[W]here an appeal involves the interpretation of a standard form contract, the interpretation at issue is of precedential value, and there is no meaningful factual matrix that is specific to the parties to assist the interpretation process, this interpretation is better characterized as a question of law subject to correctness review”: para. 24.  Illegal Substances Clauses are standard provisions commonly included in residential APS’s in the Toronto region. There is no meaningful factual matrix specific to the parties that could assist interpreting the Clause. In addition, interpretation of the Clause in this case will have precedential value, since Illegal Substances Clauses are widely-used. Therefore, the interpretation of the Clause is best characterized as a question of law subject to a correctness review.

(2) Yes. As set out below, the application judge erred in his interpretation of the Clause in various ways.

The application judge’s differentiation of the “representation” from the “warranty” in the Clause. When he considered the legal effect of the Clause, the application judge applied different analytical approaches to the same contractual term: he interpreted the “warranty” language as a term of the contract, while he looked at the “representation” language through the lens of the principles concerning pre-contractual representations. That approach contained several errors: It failed to consider the inter-related nature of the “representation” and the “warranty” in this particular contract. It failed to address the real interpretive issue of what the representation in the Clause actually meant. It was problematic to view the “representation” in the Clause as a pre-contractual or collateral representation. Finally, to treat the “representation” contained in the Clause as something other than a term of the contract would ignore the language of the entire agreement clause in the APS. Instead, the application judge should have interpreted the Clause as a term of the parties’ contract in accordance with the standard rules of contractual interpretation.

The application judge’s reliance on a duty to disclose to inform his interpretation of the Clause. The application judge erred in his reasoning, as he posited that if the Sellers had discovered after the execution of the APS, that the property had been used as a marijuana grow-op before they acquired it, their silence or failure to disclose such information to the Purchaser could found an action for misrepresentation. From this, he concluded that the Purchaser’s rights are not affected by the fact that he was the one who discovered this information and communicated it to the Sellers. This reasoning is not persuasive, as the representation and warranty the Sellers gave about the use of the premises was limited, not absolute. It was a representation or warranty “to the best of [their] knowledge and belief”. The Purchaser’s discovery that a previous owner of the house had used it for a grow-op was a complete surprise to the Sellers. While liability may attach where a vendor knew about a major latent defect but concealed the information from the purchaser, these are not the facts of the present case. Therefore, the application judge improperly applied principles concerning a vendor’s concealment of material information about the condition of a property to a situation where no such concealment had occurred.

The meaning of the Illegal Substances Clause: The Sellers’ representation and warranty that the use of the property had never been for the growth or manufacture of illegal substances was limited to their knowledge and belief as it existed when they executed the APS. This conclusion is reached for three reasons: (1) The plain language used in the clause; (2) The absence of any language in the Clause that speaks of the Sellers’ knowledge and belief at the date of closing, in contrast to the use of such language in other provisions of the APS; and (3) The effect of the “survives closing” language at the end of the Clause does nothing more than clarify that whatever the content of the representation or warranty given by the Sellers, it did not merge with the deed on closing. The representation and warranty survived closing to offer a basis for a post-closing action of breach. However, that language does not assist in ascertaining the content or meaning of the representation or warranty given.

For these reasons, the Sellers’ representation and warranty in the Clause that the use of the property had never been for the growth or manufacture of illegal substances was limited to their knowledge and belief as it existed when they executed the APS [emphasis added]. At that time, they did not know about the property’s prior use as a grow-op. In those circumstances, the application judge erred in finding the Sellers had breached the Clause. They did not breach the Clause.

In the result, the Sellers were entitled to a declaration that the Purchaser was in breach of the APS for failing to complete the purchase, and were entitled to keep the $30,000 deposit that had been paid by the Purchaser. The matter was remitted to the Superior Court to determine the Sellers’ entitlement to the costs of the application below, the real estate broker and agent’s entitlement to costs and the Sellers’ claim to damages.

Fontenelle v Canada (Attorney General), 2018 ONCA 475

[Lauwers, Benotto and Nordheimer JJ.A.]

Counsel:

Sean Gaudet and Joel Levine, for the appellant

Doug Wright, for the respondents

Keywords: Torts, Negligence, Statutory Duty of Care, Summary Judgment, Genuine Issue Requiring Trial, Fact-Finding Powers, Fair and Just Determination, Standard of Review, Hryniak v Mauldin, 2014 SCC 7

Facts:  

This action arises out of an assault that was committed on the respondent, JF, by the three named individual defendants, none of whom defended the underlying action. The assault occurred while the respondent and the three named defendants were all inmates at Millhaven Institution, a maximum security penitentiary located in Bath, Ontario. The respondent was seriously injured.

The underlying action alleged that the Attorney General of Canada, as the representative of the Federal Crown, was negligent and breached a statutory duty of care by failing to keep the respondent reasonably safe while he was an inmate of the penitentiary.

The Attorney General of Canada appeals from the summary judgment of the motion judge who found in favour of the respondents on the issue of liability but ordered the issue of damages to proceed to trial.

Issue:

(1) Did the motion judge err in granting summary judgment in favour of the respondents?

Holding:  Appeal allowed.

Reasoning:

(1) Yes. The court held that the motion judge greatly exceeded his authority in granting summary judgment in favour of the respondents. In so doing, he made unjustified findings of fact. The evidentiary record before the motion judge was insufficient to reach a fair and just determination that any duty of care owed by the appellant to the respondent had been breached. A trial was necessary to determine liability in this case. Thus, the court held that the trial judge’s conclusion could not be sustained.

The court held that the motion judge correctly cited the law that applies to summary judgment motions, particularly the decision in Hryniak v. Mauldin, 2014 SCC 7. However, he failed to properly apply that law in reaching his decision. The court noted that while the decision to exercise summary judgment powers is discretionary, deference is not owed to that decision where the motion judge comes to a decision “that is so clearly wrong that it resulted in an injustice”: Hryniak, at para. 83.

Har Jo Management Services Canada Ltd v York (Regional Municipality), 2018 ONCA 469

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

Shane Rayman and Conner Harris, for the appellant

Frank Sperduti and Andrew Baker, for the respondent

Keywords: Torts, Nuisance, Expropriations, Injurious Affection, Ontario Municipal Board, Exclusive Jurisdiction, Expropriations Act, RSO 1990, c. E.26, Ontario Municipal Board Act, R.S.O. 1990, c. O.28, Civil Procedure, Limitation Periods, Discoverability, Subjective Branch of Discoverability Test, Objective Branch of Discoverability Test, Fennell v Deol, 2016 ONCA 249, “Appropriate Means”, 407 ETR Concession Company Limited v Day, 2016 ONCA 709, 133 OR (3d) 762, Presidential MSH Corporation v Marr Foster & Co. LLP, 2017 ONCA 325, Limitations Act, 2002, s.5

Facts:

The appellant’s property was damaged by flooding following two significant rainfalls on May 21 and May 28, 2013. The floodwaters came from adjacent land that the respondent municipality had expropriated in 2009 for a construction project. In 2011, the appellant instituted a proceeding before the Ontario Municipal Board (“OMB”) claiming damages for injurious affection in respect of that expropriation.

Following the flooding, on June 3, 2013, the appellant’s lawyer wrote a claim letter stating that the respondent’s construction activities resulted in the flooding and consequent damage to the appellant’s property, and indicating that the source of the flooding had to be determined without delay. In its response of June 28, 2013, the respondent advised that the flooding was not caused by its construction activities, but that there was a blocked catch basin on the appellant’s property that the appellant should arrange to flush.

The appellant instituted the within action on June 29, 2015, two years following the receipt of the June 28, 2013 letter (June 28, 2015 was a Sunday). The respondent pleaded that the action was statute-barred and brought a motion for summary judgment. The motion judge agreed and dismissed the action on the basis that the appellant’s claim was discoverable when the flooding occurred in May 2013.

Issues:

1) Did the motion judge err in law or misapprehend the evidence by finding that the appellant had sufficient knowledge regarding the cause of the flooding on June 3, 2013, to commence an action against the respondent in Superior Court for damages that were not properly damages for injurious affection, and therefore not within the exclusive jurisdiction of the OMB?

2) Did the motion judge err in law by finding that the appellant had an ongoing duty, up to the date it commenced the action, to discover the cause of the damage?

3) Is the effect of recent case law of the court to postpone the commencement of the limitation period until the OMB determines its jurisdiction over the claim?

Held: Appeal allowed.

Reasons: 

1) Yes. The basic two-year limitation period set out in s. 4 of the Limitations Act, 2002 begins to run on the day the claim was discovered. A claim is discovered on the earlier of two dates: the day on which a plaintiff either knew or ought to have known the constitutive elements of the claim and that a proceeding in Superior Court would be an appropriate means to seek a remedy. The court found that the motion judge erred in two ways: first in law, by not considering whether an action in Superior Court would be an appropriate means to seek a remedy; and second, by misapprehending the evidence of the appellant’s lawyer, which explained why up until June 26, 2013, the appellant believed that a claim before the OMB would be an appropriate means to seek a remedy for the flooding damage.

2) Yes. The respondent argued that, even if the motion judge erred on the first issue, the action is statute-barred on the motion judge’s alternative finding that the appellant did not rebut the presumption under s. 5(2) of the Limitations Act, 2002 by failing to exercise due diligence. The court found that the motion judge also erred in law on this alternative ground. A plaintiff rebuts the presumption under s. 5(2) by demonstrating when it gained actual knowledge of its claim (s. 5(1)(a)). A plaintiff need not show that it exercised due diligence in order to rebut that presumption, because due diligence is only relevant to the objective inquiry under s. 5(1)(b), not the inquiry into subjective knowledge under s. 5(1)(a): Fennell v Deol, 2016 ONCA 249, at paras. 23-24. If a plaintiff fails to exercise the diligence a reasonable person would, the claim is potentially discoverable earlier than the date the plaintiff had actual knowledge of the claim. Due diligence is therefore only relevant to the period of time preceding a plaintiff’s actual knowledge of its claim, not the period after. Once a claim has been discovered, there is no ongoing duty on a plaintiff to further investigate the claim.

3) Not decided. The appellant argued for the first time in oral argument on appeal that the recent decisions of the court in 407 ETR Concession Company Limited v Day, 2016 ONCA 709, 133 OR (3d) 762 and Presidential MSH Corporation v Marr Foster & Co. LLP, 2017 ONCA 325, 135 OR (3d) 321 apply, with the effect that the limitation period for this action will not begin to run until the OMB determines whether it has exclusive jurisdiction over the claim for damage arising from the flooding. Because the court concluded that the appellant’s claim is not statute-barred in any event, it was not necessary to decide whether the 407 ETR and Presidential MSH cases and the concept of “appropriate means” apply to postpone the commencement of the limitation period.

Alderton v Haylor Properties Niagara Inc, 2018 ONCA 483

[Pepall, van Rensburg and Paciocco JJ.A]

Counsel:

Aaron Rousseau for the appellants

Barry W. Adams for the respondent

Keywords: Employment Law, Wrongful Dismissal, Civil Procedure, Default Judgments, Setting Aside, Mountainview Farms Ltd v McQueen, 2014 ONCA 194

Facts:

The respondent sued the appellants Haylor Properties Niagara Ltd. and its principal, AW, for wrongful dismissal in 2011. A trial record was filed in November 2013 and a trial date was fixed for September 2015 to accommodate the appellants’ counsel. The appellants’ counsel was subsequently removed from the record, prompting an adjournment. This pattern continued until the trial was marked peremptory for a date in November 2016. In September 2016, the respondent brought a motion to strike the statement of defence. The motion was adjourned when the appellants asserted they had new counsel but neither counsel nor the appellants attended on the return date. The statement of defence was struck, the appellants were noted in default, and the respondent was granted judgment and costs in the uncontested matter. A motion to set aside the default judgement was dismissed. The motion judge, referring to the Mountainview Farms Ltd v McQueen factors, accepted that the motion had been brought promptly and that the appellants had an arguable defence. He concluded, however, that the circumstances leading to the default had not been adequately explained and that an order setting aside the default judgment would be prejudicial to the respondent and the justice system.

Issues:

(1) Did the motion judge fail to consider that the appellants had a plausible explanation for their failure to attend at the uncontested trial?

(2) Did the motion judge make palpable and overriding errors of fact in concluding that the appellants had been intentionally delaying the matter?

Holding: Appeal dismissed.

Reasoning: 

(1) No. The explanation for the failure to attend was not relevant. The issue on the motion was not whether the appellants were able to explain their failure to attend the trial. They had been noted in default and thus were not entitled to notice of the uncontested trial or to participate further in the trial. The appellants knew the matter had been set peremptory and did not attend to oppose the motion to strike their defence. They cannot therefore rely on a failure to receive notice from the court that the uncontested trial was proceeding as a basis for setting aside the default judgment.

(2) No. The appellants argued that the motion judge erred in saying that the appellants had not paid certain costs. This was brought to the attention of the motion judge by the respondent’s counsel and the motion judge acknowledged the error. This did not play a role in the decision and was not an overriding factor.

The appellants also assert that the motion judge erred in saying that they were never examined for discovery when Wood was, in fact, examined. This was an error, but nothing turned on it because Wood was only discovered after repeated adjournments. The motion to set aside the default judgment was refused because of the appellants’ pattern of delay, not because of a failure to attend discovery. A motion judge’s decision on a motion to set aside a default judgement is discretionary and attracts deference.

Bergen v Fast Estate, 2018 ONCA 484

[Rouleau, Roberts and Fairburn JJ.A]

Counsel:

D.B. Williams and M.M. Khami, for the appellant

C.J. Prince, for the respondent third party

Keywords: Torts, Negligence, Motor Vehicle Accident, Civil Procedure, Limitation Periods, Discoverability, Fennell v Deol, 2016 ONCA 249, Limitations Act, SO 2002, c 24, ss 5(1) and 5(2), Summary Judgment, Best Foot Forward

Facts:

The appellant appeals from the summary judgment dismissal of his action against the defendant. The appellant was one of three occupants involved in a single motor vehicle accident on February 5, 2012. Two of the occupants tragically died and the appellant was seriously injured. The appellant commenced an action on January 31, 2014, against the deceased defendants’ estates but not, at that time, against J.B. Sr, the appellant’s own father and owner of the vehicle. It was not until July 31, 2014 that appellant’s counsel learned from Aviva that the owner of the vehicle was J.B. Sr. and not the appellant. On October 28, 2014, the appellant obtained an ex parte order adding J.B Sr. as a defendant.

The third party respondent, Aviva, subsequently brought a successful motion for summary judgment to dismiss the action against J.B. Sr. on the basis that it was statute-barred. The motion judge determined that there was no genuine issue requiring a trial on the limitation period issue. Specifically, he found that the appellant had failed to put his “best foot” forward and rebut the statutory presumption under s. 5(2) of the Limitations Act, 2002, that he knew of the matters referred to in clause 5(1)(a) of the Act on the day the act or omission on which his claim is based took place, ie. that the appellant’s father was the owner of the car and not himself.

Issues:

(1) Did the motion judge err in his discoverability of the appellant’s claim against the owner of the vehicle?

Holding: Appeal dismissed.

Reasoning:

(1) No. The motion judge properly took into account all the circumstances relevant to the issue of discoverability in this case. It is well established that a limitation period begins to run on the date that the claim was discovered.  The statutory presumption of the discoverability of the claim provided for under s. 5(2) was explained by the court in Fennell v. Deol, 2016 ONCA 249, at para. 21, as follows:

Section 5(1)(a) considers when the person with the claim had actual knowledge of the material facts underlying the claim. Unless the contrary is proved under s. 5(2), the person is presumed to have known of the matters in s. 5(1)(a)(i) through (iv) on the date of the events giving rise to the claim.

In response to Aviva’s motion for summary judgment, no evidence was filed that had the effect of rebutting the presumption that as at the date of his accident, the appellant knew he was not the owner of the motor vehicle but his father was. Absent any evidence rebutting the presumption, the appellant and his counsel (as the appellant’s agent) were presumed to know who owned the vehicle prior to the issuance of the statement of claim. As the motion judge stated, “[t]here could never be an argument that the appropriate remedy against the owner of the vehicle was anything other than to include him as a defendant in the action when the Statement of Claim was issued”.

Given the appellant’s obligation to put his “best foot forward” in response to Aviva’s motion for summary judgment and his onus to rebut the presumption under s. 5(2), the motion judge was entitled to assume that there would be no additional evidence at trial to assist the appellant on these issues.

Emery Silfurtun Inc (Re), 2018 ONCA 485

[Strathy C.J.O., Roberts and Paciocco JJ.A.]

Counsel:

Catherine Francis, for the appellant, Emery Silfurtan Inc.

Peter I. Waldmann, for the respondent, Warburg-Stuart Management Corporation

Keywords: Bankruptcy and Insolvency, Proposals, Civil Procedure, Setting Aside, Evidence, Documentary Disclosure, Settlement Privilege, Appeals, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss 63(1), 193(a) 

Facts:

This appeal arises from an order of the motion judge requiring the appellant and the trustee of the appellant’s bankruptcy proposal to disclose to the respondent all documents and communications that set out any and all terms of the appellant’s settlement with its creditor, Zodax. The Zodax settlement was important to the respondent because the appellant contended that it discharged the respondent’s security interest, which the respondent relied upon in its bankruptcy claim.

The procedural history was as follows:

The appellant, Emery Silfurtun Inc., filed a proposal to its unsecured creditors under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”). The appellant and its creditor, Zodax, subsequently entered into a settlement of Zodax’s claims. The appellant’s proposal was approved by a majority of its creditors. The trustee made its motion for approval on notice to all creditors who filed proofs of claim in the proposal for court approval. However, the respondent had registered a general security agreement against the appellant’s assets to secure its claim for professional services allegedly rendered by the appellant, and was given notice. None of the creditors opposed court approval of the proposal, which was approved by Master Mills on November 22, 2016. The appellant fully performed the proposal as of December 6, 2016. A Certificate of Full Performance of Proposal was issued by the appellant’s trustee.

The appellant subsequently attempted to resolve the respondent’s asserted secured claim. However, negotiations failed. In February, the appellant commenced an application to set aside the respondent’s security on the basis of the settlement concluded with Zodax. The next month, the respondent commenced an action against the appellant to enforce its security by appointing a receiver and manager over the assets and undertaking of the appellant. The respondent then brought a motion to annul the appellant’s proposal in the bankruptcy proceedings pursuant to s. 63(1) of the BIA. More specifically, the respondent alleged that the appellant entered into a secret settlement agreement with Zodax and failed to disclose the particulars to the appellant’s creditors. Moreover, the respondent alleged that this was done to circumvent the bankruptcy process and fraudulently obtain court approval of the proposal.

On July 13, 2017, Conway J. ordered that the respondent’s motion to annul the bankruptcy proposal would proceed before the applications. She also directed that the respondent’s production motion be heard before the other proceedings. Conway J.’s order was not appealed.

The motion judge held that the respondent’s allegations gave rise to serious questions about the propriety of the proposal process and thus concluded that production of the settlement documentation was necessary. The motion judge also held that the appellant had waived any privilege by relying on its settlement with Zodax in support of its application.

Issues:

(1) Is leave to appeal required?

(2) Did the motion judge err in determining the production motion before the annulment motion?

(3) Did the motion judge err in ordering production of the settlement documentation and correspondence?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. The court held that leave was required because the motion judge’s production order did not involve future rights nor was it likely to affect other cases of a similar nature in the bankruptcy proceedings. Leave to appeal was granted to the appellant under s. 193(e) of the BIA.

(2) No. There was a clear direction order from Conway J. requiring the motion judge to hear the production motion before the other applications. As the motion judge noted in his reasons, the production motion was the only matter before him. No appeal was taken from the order of Conway J., nor was there any attempt to have it set aside or modified. Furthermore, the motion judge correctly determined that he could not resolve the issue as to whether the respondent’s annulment motion was an abuse of process because of the conflicting evidentiary record before him. Finally, the respondent was not required to appeal from Master Mills’ approval order. The respondent’s annulment motion was authorized under s. 63(1) of the BIA.

(3) No. The court held that the motion judge did not err in ordering production of the settlement documentation and correspondence. It was within the motion judge’s authority to determine that the countervailing interests to the public interest in settlement privilege included the respondent’s allegations of impropriety on the part of the appellant and their potential effect on the integrity of the proposal process. Absent production of the settlement documentation and communications, the motion judge concluded that it was impossible to determine whether the conduct of the parties and the terms of the settlement were bona fide or improper.

L-Jalco Holdings Inc v MacPherson, 2018 ONCA 488

[Pepall, van Rensburg and Paciocco JJ.A.]

Counsel:

Bryan Skolnik, for the appellant

Mark Ross, for the respondent

Keywords:  Real Property, Contracts, Mortgages, Priority, Equitable Subrogation, Mutual Trust Co v Creditview Estate Homes Limited, [1997] OJ No 3258 (CA), Civil Procedure, Summary Judgment

Facts: 

On September 3, 2008, the appellant, L-Jalco Holdings, lent money to 837047 Ontario Limited (“837”). That loan was secured, in part, by a $1,100,000 mortgage placed on a commercial building at the corner of Queen and Division Streets in Kingston, Ontario. There were two prior mortgages on the property at the time. DP held the first mortgage in the amount of $449,070.37.

The respondent, BM, held the second mortgage in the amount of $49,900. L-Jalco paid off DP’s mortgage and more than $75,000 in tax arrears, but not BM’s mortgage.

837 subsequently defaulted on its payments on the L-Jalco mortgage, and on June 13, 2012, the property was sold by L-Jalco under power of sale. This was done without notice to BM. The building sold for $425,000. L-Jalco now claims all of the proceeds of sale. It brought an action against BM claiming that even though her mortgage was registered in priority to to L-Jalco’s, it is entitled to priority based on equitable subrogation for having paid off DP’s first mortgage and the property taxes. BM counter-claimed for priority payment of the amount outstanding on her mortgage.

In claiming equitable subrogation, L-Jalco relied on its claim that BM’s lawyer failed to fulfill an undertaking to discharge her mortgage that L-Jalco claims he provided. L-Jalco also argued that BM should not be enriched by assuming first priority as a result of L-Jalco’s act of paying off the first mortgage. L-Jalco argued that it could simply have taken an assignment of the DP mortgage, thereby securing priority over her mortgage, making it equitable that it receive priority to BM through the doctrine of equitable subrogation.

On June 29, 2017, BM was granted summary judgment. The motion judge rejected L-Jalco’s claim that BM’s lawyer undertook to discharge her mortgage. The motion judge also dismissed L-Jalco’s claim to equitable subrogation and ordered L-Jalco to pay BM the sum secured by her mortgage of $49,900. J-Lalco appealed.

Issues: 

(1) Did the motion judge err in placing the onus on L-Jalco to establish the availability of the remedy of equitable subrogation when the summary judgment motion was brought by BM?

(2) Did the motion judge err in determining that facts were readily discernible even though there was disputed evidence relating to central issues?

(3) Did the motion judge fail to properly apply the doctrine of equitable subrogation?

Held: Appeal dismissed.

Reasoning:

(1) No. The motion judge was correct to impose the burden on L-Jalco to prove its entitlement to equitable subrogation, notwithstanding that BM initiated the summary judgment motion. Once BM proved that her mortgage was registered in priority to L-Jalco’s mortgage, the burden fell squarely on L-Jalco to prove the equitable subrogation claim it relied upon, in answer.

(2) No. At the commencement of the motion, L-Jalco encouraged the trial judge to proceed by way of summary judgment by commenting that, “there really isn’t much dispute about the facts”. L-Jalco relied heavily on documentary evidence to establish its claim that BM had undertaken to discharge her mortgage. The motion judge was well situated to assess this evidence. Therefore, the court saw no palpable or overriding error in the motion judge’s decision to proceed by way of summary judgment despite the evidence in dispute.

(3) No. The motion judge’s decision not to grant the remedy of equitable subrogation was discretionary. As the court recognized in Mutual Trust Co. v. Creditview Estate Homes Limited, [1997] OJ No 3258 (CA), at pp. 6-7, “the fundamental principle underlying the doctrine of subrogation [is] one of fairness in the light of all the circumstances”. On the findings the motion judge was entitled to make, L-Jalco went ahead with the loan to 837 knowing that BM’s mortgage stood in priority to its own and that she would not postpone her interest.

Rahsepar v Estabrooks, 2018 ONCA 487

[Brown J.A.]

Counsel:

SJ, acting in person

Andi Jin, for the respondent

Keywords: Civil Procedure, Appeals, Extension of Time, Kefeli v Centennial College of Applied Arts and Technology (2002), 23 CPC (5th) 35 (Ont. C.A., in Chambers)

Facts:

The applicant sought an order granting her an extension of time to file a notice of appeal from the order of James J. dated June 7, 2017, striking out her statement of claim without leave to amend.

Issues:

(1) Should the applicant be granted an extension of time to file a notice of appeal?

Holding: Motion dismissed.

Reasoning:

(1) No. The principles that govern this request are set out in cases such as Kefeli v. Centennial College of Applied Arts and Technology (2002), 23 CPC (5th) 35 (Ont. C.A., in Chambers): (i) whether the applicant formed an intention to appeal within the relevant period; (ii) the length of, and explanation for, her delay; (iii) the prejudice to the respondent; (iv) the merits of the appeal; and (v) whether the justice of the case requires the extension sought.

The intention to appeal

The respondent does not contest that the applicant formed an intention to appeal within the requisite period.

The length of and explanation for the delay

The applicant filed her motion for an extension order some 10 months following the order she seeks to appeal. That is a long delay. The applicant deposed that it took 7 months for this court to consider her request for a fee waiver. The applicant did not include in her motion material any application for a fee waiver or any communication from the court approving or denying her fee waiver. As a result, there was a lack the evidence to assess this part of the applicant’s explanation.

The applicant also deposed that since June 2017 she had suffered from various medical problems that prevented her from filing a notice of appeal or bringing a motion for an extension of time. After reviewing all of the evidence, Brown J.A. saw no evidentiary basis to support the applicant’s contention that any medical condition prevented her from filing her motion for an extension of time until April 2018.

Prejudice to the respondent

The respondent did not contend she had suffered any prejudice from the applicant’s delay.

Merits of the appeal

The applicant sued the respondent, an employee in the Registrar’s office of the Superior Court of Justice in Ottawa, for damages for “inflicting unnecessary emotional pain, suffering and uncertainty.”

Brown J.A. noted that the applicant’s claim is very difficult to follow. The applicant alleged that the respondent mismanaged paperwork and court filings involved in the applicant’s related proceeding, which resulted in certain orders being made against and to the prejudice of the applicant. The respondent’s behaviour also caused the applicant stress. Even on the most liberal reading of the applicant’s amended statement of claim, Brown J.A. was unable to discern a cause of action, and saw no merit to her appeal.

The justice of the case

Brown J.A. considered the multi-year history of the respondent’s motion to strike and the delays in scheduling that motion due to the applicant’s conduct, together with all of the factors set out above. When considered as a whole, the justice of the case required the dismissal of the applicant’s motion.

Short Civil Decisions

Koetsier v St-Denis, 2018 ONCA 477

[Lauwers, Benotto and Nordheimer JJ.A.]

Counsel:

Michelle Kropp and Kenneth Peacocke, for the appellant

Réjean Parisé, for the respondent

Keywords: Family Law, Custody, Orders, Variation, Material Change in Circumstances, Parental Conflict, Litman v. Sherman, 2008 ONCA 485

Criminal and Provincial Offences Decisions

Halton Region Conservation Authority v Hanna, 2018 ONCA 476

[MacFarland, Watt and Paciocco JJ.A]

Counsel:

BH Greenspan, R. McKechney and P Hamm, for the appellants

Jull and J. Nehmetallah, for the respondent

Keywords: Provincial Offences, Conservation Authorities Act, RSO 1990, c C27, ss, 28(1), 28(16), Appeals, Standard of Review, Palpable and Overriding Error, Sentencing, Fines, Aggravating and Mitigating Factors

R v Stele, 2018 ONCA 478

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

John Collins, for the appellant

Joseph Hanna, for the respondent

Keywords: Criminal, Dangerous Driving Causing Bodily Harm, Criminal Negligence Causing Bodily Harm

R v Hunt, 2018 ONCA 480

[Strathy C.J.O., Watt and Epstein JJ.A.]

Counsel:

Deepa Negandhi, for the appellant

Philippe G. Cowle, for the respondent

Keywords: Criminal Law, Assault with a Weapon, R v Nasogaluak, 2010 SCC 6, [2010] 1 SCR 206 

R v Inksetter, 2018 ONCA 474

[Hoy A.C.J.O., MacFarland and Roberts JJ.A.]

Counsel:

Lisa Joyal, for the applicant (appellant)

Paolo Giancaterino, for the respondent

Keywords: Criminal Law, Possession of Child Pornography, Make Available Child Pornography, Sentencing

R v PH, 2018 ONCA 482

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

David North, for the appellant

Carmen Elmasry, for the respondent

Keywords: Criminal Law, Sexual Offences Against a Minor, R v W (D) [1991] 1 SCR 742 

R v RP, 2018 ONCA 473

[MacPherson, Hourigan and Miller JJ.A.]

Counsel:

RP, acting in person

Peter Copeland, appearing as duty counsel

Justin Reid, for the respondent

Keywords: Criminal Law, Sexual Interference, Attempt to Obstruct Justice, Orders Under Sex Offender Information Registration Act, S.C. 2004, c. 10 (“SOIRA”), Right of Appeal

R v Brown, 2018 ONCA 481

[Epstein, Paciocco and Nordheimer JJ.A.]

Counsel:

Richard Litkowski and Jessica Zita, for the appellant

Shawn Porter, for the respondent

Keywords: Criminal Law, Possession of a Loaded Prohibited Firearm Without a License, Possession of Cocaine for the Purpose of Trafficking, Possession of the Proceeds of Crime, Evidence, Admissibility

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 13- MAY 18)

Good afternoon.

Following are the summaries of this week’s civil decisions of the Court of Appeal for Ontario.

Off the top, I would like to congratulate our very own Roger Horst and Rafal Szymanski on successfully representing the respondent in Correct Building Corporation v. Lehman. The Court dismissed the appeal against our client and granted our client’s cross-appeal, resulting in a dismissal of all claims against our client by way of summary judgment.

Other topics covered this week included whether a landlord’s insurer can bring a subrogated claim against a tenant of a commercial property for negligence causing fire, a fee dispute between lawyer and client, uninsured motorist coverage, agreements of purchase and sale of land and setting aside consent orders. The Court also denied leave to appeal the provincial offences convictions arising out of the Sunrise Propane incident in North York that took place almost ten years ago now.

Wishing everyone an enjoyable Victoria Day (and royal wedding) long weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

https://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents 

Skunk v. Ketash, 2018 ONCA 450

Keywords: Contract Law, Contractual Interpretation, Insurance Law, Rules of Civil Procedure, Rule 21.01, Uninsured Vehicles, OPCF 44R Family Protection Coverage Endorsement, R. v. Clarke, 2013 ONCA 7

Sri Guru Nanak Sikh Centre Brampton v. Rexdale Singh Sabha Religious Centre, 2018 ONCA 459

Keywords: Civil Procedure, Settlements, Enforceability, Standard of Review, Palpable and Overriding Error

Ehsaan v. Zare, 2018 ONCA 453

Keywords: Summary Judgment, Costs, Real Property, Damages, Appraisals, Davies v. Clarington, 2009 ONCA 722, Ontario Ltd. v. Niagara (Regional Municipality), [2005] O.J. No. 1907

Royal Host GP Inc. v. 1842259 Ontario Ltd., 2018 ONCA 467

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Covenant to Insure, Tenant Negligence, Fire, Subrogation, Agnew-Surpass v. Cummer-Yonge, [1976] 2 S.C.R. 221, Ross Southward Tire v. Pyrotech Products, [1976] 2 S.C.R. 35, T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749

Lang Michener LLP v. King, 2018 ONCA 471

Keywords: Contracts, Solicitor and Client, Torts, Solicitor’s Negligence, Costs

Correct Building Corporation v. Lehman, 2018 ONCA 462

Keywords: Torts, Negligent Misrepresentation, Fraudulent Misrepresentation, Conspiracy, Negligence, Inducing Breach of Contract, Wrongful Interference with Economic Relations, Summary Judgment

Civil Decisions

Skunk v. Ketash, 2018 ONCA 450

[Rouleau, Roberts and Fairburn JJ.A.]

Counsel:

Edward S.E. Kim, for the appellant

Alex W. Demeo, for the respondent, Jevco Insurance Company

Keywords: Contract Law, Contractual Interpretation, Insurance Law, Rules of Civil Procedure, Rule 21.01, Uninsured Vehicles, OPCF 44R Family Protection Coverage Endorsement, R. v. Clarke, 2013 ONCA 7

Facts:

This is an appeal from the determination of a legal question under Rule 21.01 of the Rules of Civil Procedure, resulting in the dismissal of the appellant’s claim against the respondent insurer. The appellant was a passenger in his spouse’s vehicle when it was taken without consent by an uninsured driver, Laurel Ketash. The vehicle was then involved in an accident and the appellant was injured. The motion judge determined that the appellant’s spouse had no applicable and collectible bodily injury liability insurance because Ms. Ketash was driving the vehicle without the owner’s consent. He concluded that because the appellant’s spouse owned the vehicle, he was excluded from uninsured automobile coverage under the Insurance Act, R.S.O. 1990, c I.8, the Ontario Automobile Policy (OAP) and the OPCF 44R Family Protection Coverage Endorsement.

Section 265(2) of the Insurance Act provides a definition of an “uninsured automobile. Section 1.11 of the OPCF 44R Family Protection Coverage, reads in virtually identical terms to those included in the appellant’s policy: an “uninsured automobile …does not include an automobile owned by or registered in the name of the insured or his or her spouse”. The motion judge found no ambiguity in the plain language of the statute or the contractual policies at issue and concluded that the language is clear on its face.

Issues:

(1) Did the motion judge err in his interpretation of section 1.11 of the insurance policy?

Held: Appeal Dismissed

Reasons:

(1) No. The principles of statutory interpretation require that the court first look to the plain meaning of the statute. If the words have a plain meaning and give rise to no ambiguity, then the court should give effect to those word as per R. v. Clarke, 2013 ONCA 7. The meaning of the definition of “uninsured automobile” under s. 265(2) is clear and unambiguous: “uninsured automobile means … but, does not include an automobile owned by or registered in the name of the insured or his or her spouse [emphasis added].”

As a general rule, clauses in insurance policies will be granted a liberal meaning “in favour of the insured and those clauses excluding coverage will be construed strictly against the insurer. The difficulty here is that the provision, virtually identical to the wording of the same definition of “uninsured automobile” under s. 265(2), is clear on its face. In order to arrive upon the appellant’s interpretation of the provision, it would be necessary to read words into the provision. The provision would have to be interpreted as meaning that an “uninsured automobile … does not include an automobile owned by or registered in the name of the insured or his or her spouse, [but only where the insured or his or her spouse has deliberately chosen not to insure the vehicle].”

Reading the words out of an insurance policy or giving the words an opposite meaning is not synonymous with a liberal interpretation. The same can be said for adding the phrase that would be required to give effect to the appellant’s submission. The fact that this may produce a “harsh result” does not mean that it is an absurd result, as it is in accordance with the plain meaning of the unambiguous provision.

Sri Guru Nanak Sikh Centre Brampton v. Rexdale Singh Sabha Religious Centre, 2018 ONCA 459

[Lauwers, Benotto and Nordheimer JJ.A.]

Counsel:

M Wiffen, for the appellant

P Baxi, for the respondent, Sri Guru Nanak Sikh Centre Brampton

J Nussbaum, for the respondent, Rexdale Singh Sabha Religious Centre

Keywords: Civil Procedure, Settlements, Enforceability, Standard of Review, Palpable and Overriding Error

Facts:

The defendant, Sikh Spiritual Centre Toronto, appeals from the judgment of the motion judge refusing to set aside the consent order of Justice Mark Edwards dated February 4, 2016 that enforced a settlement between the parties.

Issues:

(1) Did the motion judge err by refusing to set aside the consent order that enforced a settlement between the parties?

Holding: Appeal dismissed.

Reasoning:

(1) No. The motion judge gave very lengthy reasons for her decision.  She reviewed, in detail, the factual background of this matter including how the loan came about, the commencement of the litigation, and the steps that were taken that led to the settlement.  The motion judge concluded that the settlement had been entered into by a Director of the appellant who was authorized to do so.  The motion judge also pointed out that the appellant was represented by counsel throughout the proceeding, including all aspects of the settlement.  Finally, the motion judge concluded that there was no proper basis for her to exercise her discretion not to enforce the settlement.  It was clear, in the motion judge’s view, that the appellant had borrowed the monies in question and that the settlement, by which most of the monies were to be repaid over time, was a reasonable one.

The conclusions reached by the motion judge are entitled to deference by this court. Given that those conclusions reflect findings of fact, this court can only interfere if the appellant demonstrates that the motion judge has made palpable and overriding errors: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.  The appellant has failed to do so in this case.  It is not the role of this court to reweigh the evidence or to substitute our view of the evidence for that of the judge of first instance.

Ehsaan v. Zare, 2018 ONCA 453

[Rouleau, Roberts and Fairburn JJ.A.]

Counsel:

SNZ, for the appellant

SR, for the respondents

Keywords: Summary Judgment, Costs, Real Property, Damages, Appraisals, Davies v. Clarington, 2009 ONCA 722, Ontario Ltd. v. Niagara (Regional Municipality), [2005] O.J. No. 1907

Facts:

The appellant obtained judgment against the respondents on a motion for summary judgment. The appellant’s action arose out of a failed transaction to purchase the respondents’ property, which the respondents refused to close.

The motion judge granted the appellant judgment in the amount of $118,954.95, including $43,000 for the difference in value of the property from the date of the agreement of purchase and sale to the closing date. The motion judge ordered that there be no costs.

The appellant’s appeal is narrow: she takes issue with the amount of $43,000 awarded, submitting that the motion judge erred in taking the average between the parties’ respective property appraisals. She also seeks leave to appeal the motion judge’s order that she receive no costs of her action or motion for summary judgment.

With respect to the damages issue, at trial, there was a dispute between the parties as to the appropriate appraised value of the property. The appellant’s own appraisal evidence was that the value of the property was between $1.275 and $1.375 million as of the closing date. The respondents’ evidence appraised the property as of the closing date at a value of $1.375 million; however, they disputed that value and relied on the lower end of the appellant’s appraisal evidence. The motion judge concluded that there was “no basis for the court to prefer one or other of the appraisals” and determined that the “reasonable conclusion” would be to take the midpoint of the highest and lowest appraised values.

Issues:

(1) Did the motion judge err in its assessment of damages?

(2) Did the motion judge err in not awarding costs to the appellant?

Holding: Appeal allowed in part

Reasoning:

(1) No. The motion judge’s assessment and calculation of damages are entitled to deference. His explanation as to why he took the average of the figures submitted by the parties, including the absence of a basis to understand which appraisal was preferable, was reasonable on this record. We see no basis to interfere with it.

(2) Yes. It is well established that a costs award should be set aside on appeal only if the motion judge erred in principle or the award was plainly wrong: Davies v. Clarington, 2009 ONCA 722, at para. 27.

The motion judge erred in failing to award any costs to the appellant and that the error justifies appellate intervention. While an award of costs is always discretionary and the court has the discretion not to award any costs to the successful party, the latter discretion should be exercised sparingly. The general principle that a successful party is entitled to costs should not be departed from except for very good reasons. Examples of the exceptional instances where such an order has been made include: misconduct of the parties; miscarriage in the procedure; or oppressive and vexatious conduct of proceedings. (See: 1318706 Ontario Ltd. v. Niagara (Regional Municipality), [2005] O.J. No. 1907, at para. 50.)

Here, the motion judge erred by depriving the successful party of her partial indemnity costs for conduct that did not rise to the level of misconduct that would justify such a punitive order. It was neither fair, proportionate nor reasonable for the motion judge to deprive the appellant of all of her costs.

Royal Host GP Inc. v. 1842259 Ontario Ltd., 2018 ONCA 467

[Hoy A.C.J.O., Juriansz and Miller JJ.A.]

Counsel:

J C. Lisus and A J. Winton, for the appellant

D Rabinowitz and S D McGarry, for the respondents

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Covenant to Insure, Tenant Negligence, Fire, Subrogation, Agnew-Surpass v. Cummer-Yonge, [1976] 2 S.C.R. 221, Ross Southward Tire v. Pyrotech Products, [1976] 2 S.C.R. 35, T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749

Facts:

The appellant owns a multi-story commercial building in which it operates a hotel. The respondents leased a portion of the building in which they operated a restaurant. A fire broke out in the respondents’ kitchen causing extensive damage to the building. The appellant was indemnified by its insurer for its losses and its insurer commenced this subrogated action, in the appellant’s name, seeking recovery of the damages suffered. The action alleges the fire was caused by the respondents’ negligence.

The respondents took the position that even if the fire were caused by their negligence, the terms of the lease prevented the appellant from bringing this action. The respondents brought a motion by way of special case seeking determination of whether the lease bars the plaintiff’s insurer from bringing a subrogated action for damages in the name of the plaintiff, as against defendants. Section 7.02 of the Lease provided as follows:

The Landlord shall take out and maintain, to the full replacement value, fire and other hazard insurance, as the Landlord in its sole discretion may deem advisable, on the Building, excluding any property thereon with respect to which the Tenant or other tenants are obliged to insure, and its own general liability insurance, including general liability insurance in respect of the Common Areas in an amount no less than $10,000,000.00 in respect of any injury to or death of one or more persons and loss or damage to the property of others, the costs of which shall be included in Common Expenses.

Notwithstanding the Landlord’s covenant contained in this Section 7.02, and notwithstanding any contribution by the Tenant to the cost of any policies of insurance carried by the Landlord, the Tenant expressly acknowledges and agrees that

  • the Tenant is not relieved of any liability arising from or contributed to by its acts, fault, negligence or omissions, and
  • no insurance interest is conferred upon the Tenant, under any policies of insurance carried by the Landlord, and
  • the Tenant has no right to receive any proceeds of any policies of insurance carried by the Landlord.

The motion judge concluded that the language in s. 7.02 referring to the tenant’s negligence did not create a right of subrogation for the landlord’s insurer and so dismissed the action. The motion judge had based their analysis on a trilogy of Supreme Court decisions, namely: Agnew-Surpass v. Cummer-Yonge, [1976] 2 S.C.R. 221, Ross Southward Tire v. Pyrotech Products, [1976] 2 S.C.R. 35, and T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749.

Issues:

(1) Did the motion judge err in concluding that the language in s. 7.02 referring to the tenant’s negligence did not create a right of subrogation for the landlord’s insurer?

Holding:

Appeal allowed.

Reasoning:

(1) In this case, there was an agreed statement of facts and the motion judge’s reasoning was restricted to the interpretation of the wording of the lease in light of the legal principles enunciated in the trilogy. The motion judge’s analysis erred in principle by proceeding as if the Supreme Court, in the trilogy, pronounced a rule of general application. The motion judge repeatedly referred to “the general rule”. The starting point for the analysis is that in the trilogy the Supreme Court did not enunciate freestanding principles. The principles drawn from the trilogy are contractual in nature. They are conclusions that flow from and reflect the particular provisions of the leases that were in issue in those cases. In the trilogy, the Supreme Court determined that it is the terms of the lease that establish the rights and obligations between landlord and tenant, and not the insurance policy. The trilogy has not affected the fundamental tenet of contractual interpretation that it is necessary to discern the intentions of the parties in accordance with the language they have agreed to in the contract. The motion judge recognized that his task was to interpret the lease in accordance with the intentions of the parties, but he allowed the principles of the trilogy to override the plain language of the lease.

The first part of s. 7.02 of the lease in this case both obligates the landlord to purchase and maintain fire insurance on the building and requires the tenant to pay its proportionate share of the cost of such insurance. Section 7.02 continues with a “notwithstanding” provision. The plain meaning of s. 7.02 of the lease considered in isolation is that the tenant remains liable for its own negligence notwithstanding the landlord’s covenant to purchase insurance and the tenant’s contribution for the cost of that insurance.

The lease must be interpreted in accordance with the language the parties have used. In law, a tenant is liable for damage caused by its negligence. The question is whether the parties to a lease have contracted that the ordinary principles of negligence law will not apply and the tenant will not be liable to the landlord for damages caused by its negligence. Here, the Court of Appeal has found that the parties have not done so.

Lang Michener LLP v. King, 2018 ONCA 471

[Brown, Huscroft and Trotter JJ.A.]

Counsel:

GK, acting in person

Gavin Tighe and Robert Winterstein, for the respondent

Keywords: Contracts, Solicitor and Client, Torts, Solicitor’s Negligence, Costs

Facts:

The appellant, GK, a lawyer, appeals from the order granting summary judgment dismissing his counterclaim against the respondent, Lang Michener LLP.

In 2007, Mr. K retained Lang Michener to defend him in proceedings commenced by the trustee of a bankrupt Italian company, Sincies Chiementin SpA (“Sincies”), to enforce a judgment issued by an Italian court on October 1, 2001 against Mr. K (the “Italian Judgment”). The amount of the Italian Judgment was US$600,000, plus interest, currency appreciation and costs. Following a four day hearing, Whalen J. granted the trustee summary judgment recognizing and enforcing the Italian Judgment (the “Enforcement Judgment”): 2010 ONSC 6453.

The Court of Appeal dismissed Mr. K’s appeal from the Enforcement Judgment: 2012 ONCA 653. Mr. K’s request for leave to appeal to the Supreme Court of Canada was denied: [2012] S.C.C.A. No. 516.

In March 2011, Lang Michener commenced an action against Mr. K seeking payment of its fees for services rendered in the enforcement proceeding. Mr. K counter-claimed and sought judgment against Lang Michener in the amount he owed under the Italian Judgment, together with all legal fees and other costs he had incurred in defending the trustee’s enforcement and recognition claim. The motion judge granted summary judgment dismissing Mr. K’s counterclaim. Mr. K appealed.

Mr. K limits his appeal to the motion judge’s dismissal of the part of his counterclaim alleging negligent advice given by Lang Michener in 2008 in respect of a possible claim against LawPro. Mr. K also seeks leave to appeal the motion judge’s award of costs of $45,000 against him.

Issues:

(1) Did the motion judge err in dismissing the appellant’s counterclaim alleging negligent advice given by Lang Michener?

(2) Did the motion judge err in awarding costs of $45,000 against the appellant?

Holding: Appeal dismissed.

Reasoning:

(1) No. The motion judge made no error in finding the Italian court had specifically declined to take jurisdiction over Mr. K in relation to allegations of professional liability. That finding was firmly anchored in the reasons of the Italian court.

Coverage under the Policy was only available for liability resulting from an error, omission or negligent act “in the performance of or the failure to perform PROFESSIONAL SERVICES for others.” The Italian Judgment was clear that Mr. K’s liability was not in respect of professional services he had rendered. Accordingly, the court saw no error in the motion judge’s conclusion, at para. 52 of his reasons, that “regardless of the advice that was given by Kelly, [Mr.] K has suffered no damages: he would have lost an action against LawPro, and so his failure to start such a lawsuit after LawPro denied coverage in November 1997 has cost him nothing.”

(2) No. Leave to appeal costs was granted, but the costs awarded were reasonable and therefore the court did not interfere.

Correct Building Corporation v. Lehman, 2018 ONCA 462

[Pepall, Trotter and Paciocco JJ.A.]

Counsel:

R. Krupnyk, for the appellants/respondents by way of cross-appeal

R. J. Horst and R. Szymanski, for the respondents/appellants by way of cross-appeal R. S. and Indicom Appraisal Associates Ltd.

A. Formosa and F. Bogach, for J. L., Jon Babulic, R. Forward, J. Foster, C. Magwood, E. Archer, D. McKinnon, J. Robinson, A. Nuttal, J. Moore, and M. Prowse

Keywords: Torts, Negligent Misrepresentation, Fraudulent Misrepresentation, Conspiracy, Negligence, Inducing Breach of Contract, Wrongful Interference with Economic Relations, Summary Judgment

Facts:

The appellant was negotiating with the City of Barrie and the YMCA to finalize an agreement of purchase and sale of a property. The City requested a quotation from Indicom, the respondent, to assist the City in negotiations for the potential sale of the property.

The respondents provided the City with an appraisal wherein they warned that a change in assumptions might change the stated value. The appraisal also contained limitations on use and certain limiting conditions. The respondents noted that no environmental factors affecting the property had been considered.  The respondents cautioned that if placing reliance on the report, an expert qualified in environmental issues should be retained.  In addition, the respondents noted in the report that an archeological survey had not been completed.

The appellant saw the appraisal and thought it contained a major flaw and offered to purchase the property for an amount less than the appraisal amount. The City rejected this offer. The appellant then brought an action stating that it continued pointless negotiations with the City in reliance on the respondent’s appraisal. On a summary judgment motion, the appellant’s claim for negligent and fraudulent misrepresentation and conspiracy were dismissed. The judge ordered a mini-trial on whether the limitation period for a claim of negligence, inducing breach of contract, and wrongful interference with economic relations had expired. Both sides appealed.

Issues:

(1) Did the motion judge err in dismissing the claims for misrepresentation?

(2) Did the motion judge err in ordering a mini-trial on whether the limitation period for a claim of negligence, inducing breach of contract, and wrongful interference with economic relations had expired?

Holding:

Appeal dismissed. Cross-appeal allowed.

Reasoning:

(1) No. The appellants did not rely on the appraisal nor did the appraiser expect anyone other than the City to rely on the appraisal.

(2) Yes. The issues identified for the mini-trial would have changed nothing. The limitation period commenced on August 26, 2010, when the appellant wrote to the City complaining about the appraisal. The motion judge found there was no reliance, evidence of any purpose or intention to injure the appellant and no evidence of unlawful conduct by the respondents. Therefore the claims for inducing breach of contract and wrongful interference with economic relations have no possibility of success. Those claims were therefore dismissed as well.

Short Civil Decisions

Di Battista Gambin Developments Limited v. Brampton (City), 2018 ONCA 457

[Rouleau, Roberts and Fairburn JJ.A.]

Counsel:

Robert D. Malen, for the appellant

Signe Leisk and Melissa Winch, for the respondent

Keywords: Real Estate, Application, Interpretation of Subdivision Agreement, Transfer, Land Parcels

Mori Essex Nurseries Inc. v. Northbridge General Insurance Corporation, 2018 ONCA 452

[Rouleau, Roberts and Fairburn JJ.A.]

Counsel:

Anne Juntunen, for the appellants

William Chalmers, for the respondents

Keywords: Insurance Coverage, Commercial General Liability Policy, Care and Custody Exclusion

Apotex Inc. v. Abbott Laboratories Limited, 2018 ONCA 466

[Strathy C.J.O., Juriansz and Huscroft JJ.A. ]

Counsel:

Steven G. Mason and David A. Tait for the appellant Abbott Laboratories Ltd.

Christopher C. Van Barr and Kiernan Murphy for the appellant

Takeda parties Andrew R. Brodkin and Michael A. Wilson for the respondent

Keywords: Civil Procedure, Costs, Partial Indemnity

Gulf Developments Inc. v. Essex (Town), 2018 ONCA 465

[Lauwers, Benotto and Nordheimer JJ.A.]

Counsel:

James K. Ball, for the appellant

Rodney M. Godard and Ioana Vacaru, for the respondents

Keywords: Contracts, Construction, Tendering, Bid Shopping, Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860, R. (Ont.) v. Ron Engineering, [1981] 1 S.C.R. 111

Design Filtration Microzone Inc. v. Cunningham, 2018 ONCA 468

[Hoy A.C.J.O., Brown and Trotter JJ.A.]

Counsel:

Nigel McCready, for the appellant Bruce Sevigny, for the respondent

Keywords: Employment Law, Wrongful Dimissal, Notice Period, Paquette v. TeraGo Networks Inc., 2016 ONCA 618

Criminal and Regulatory Offences

Ontario (Ministry of the Environment and Climate Change) v. Sunrise Propane Energy Group Inc., 2018 ONCA 461

[Trotter J.A. (Motions Judge)]

Counsel:

Leo Adler, for the applicants

Nicholas Adamson and Justin Jacob, for the respondent

Keywords: Environmental Law, Leave to Appeal, Section 186(1), Section 186(2), Section 194(2), Environmental Protection Act, R.S.O. 1990, c. E.19, Section 25(2)(a) and (h), Occupational Health and Safety Act, R.S.O. 1990, c. O.1, section 131, Provincial Offences Act, R.S.O. 1990

Facts:

On August 10, 2008, a series of explosions rocked the north end of Toronto. They occurred at a propane gas facility operated by Sunrise Propane Energy Group Inc. (“Sunrise”) during a “truck-to-truck transfer” (“TTT”) where a large propane truck was transferring propane to a smaller truck. The spread of heat caused other propane tanks at the facility to explode. This resulted in numerous contaminants being discharged into the environment including heat, vibration, sound, gas vapour, asbestos, smoke, dust, metal fragments, and other debris. It forced the immediate evacuation of approximately 12,000 people from their homes while the fire persisted at the facility. Displaced residents suffered lost wages and had to pay for temporary shelter and clothing. The explosions caused major structural damages to homes and businesses in the area. There was one death and others were injured.

The applicants, Sunrise Propane Energy Group Inc., 1367229 Ontario Inc., Shay Ben-Moshe and Valery Belahov, were charged under ss. 186(1), 186(2), and 194(2) of the Environmental Protection Act, R.S.O. 1990, c. E.19 (“EPA”) for discharging contaminants into the environment (in violation of s. 14) and failing to comply with lawful orders issued to address the clean-up. They were also charged under ss. 25(2)(a) and (h) of the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (“OHSA”) for failing to properly train and ensure the safety of its employees.

After a 14-day trial, the applicants were convicted of nine provincial offences. They were collectively ordered to pay fines totalling $5.3 million. Appeals of both the convictions and sentences were dismissed.

The applicants sought to invoke the jurisdiction of the Court of Appeal to review their convictions and sentences. However, they were first required to seek leave to appeal.

Issues:

(1) Should the court grant the applicant’s leave to appeal?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court stated that leave to appeal to the Court of Appeal in the provincial offences context is only permitted on questions of law that are essential in the public interest or for the due administration of justice in the province.

The applicants already had a full appeal to the Superior Court of Justice and a further appeal to this court is not automatic. The court stated that leave to appeal is required under s. 131 of the Provincial Offences Act, R.S.O. 1990, c. P.33 (“POA”), which sets the bar very high and has been granted sparingly.

The applicants proposed two grounds of appeal. The first ground relates to the defence of officially induced error.

Well before the incident, Donald Heyworth, a TSSA inspector, attended at Sunrise on a couple of compliance visits. He ordered Sunrise to comply with the Director’s Public Safety Order prohibiting TTTs, except at a licensed “bulk plant.” Discussions were held about upgrading the Sunrise facility to permit TTTs. As he was leaving Sunrise one day, someone asked Mr. Heyworth, “Can we continue operating?” He replied, “Yes.” At trial he explained that he meant that Sunrise could continue to transfer propane from trucks to stationary tanks, and then fill cylinders from those tanks.

In June 2007, the TSSA issued a Code Adoption Document, which was posted to its website on June 14, 2007. The Document prohibited TTTs unless the facility was a bulk plant. There was no evidence of anyone purporting to give the applicants an exemption from the requirements set out in this Document.

The trial judge found that the applicants could rely on an officially induced error, but only up to the date where the code adoption document was issued in June of 2007 which prohibited the truck-to-truck transfers.

The appeal judge found no error in the trial judge’s application of this doctrine and the court of appeal also found no error.

The applicants’ second ground of appeal related to the enforcement of the Order issued in the aftermath of the explosions. The court held that this ground of appeal turned on whether the trial judge properly interpreted the Order. However, this was a question of mixed fact and law, not one of law alone. Even if it was construed as an error of law, it had not been demonstrated that the interpretation of the administrative/enforcement Order issued in this case was essential in the public interest or for the due administration of justice in the province.

R v Al Ubeidi, 2018 ONCA 463

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

Howard Piafsky, for the appellant

Evan Weber, for the respondent

Keywords: Criminal, Evidence Constructive Possession, Circumstantial Evidence, Error of Law

R v Hungwe, 2018 ONCA 456

[LaForme, Watt and Nordheimer JJ.A]

Counsel:

Michael Davies and Meaghan McMahon, for the appellant, Dennis Hungwe

Anthony J. Does, for the appellant, Christian Nkusi

Howard L. Krongold, for the appellant, Moussa Daoui

John Hale, for the appellant, Richard Issachar Ellis

Jonathan Dawe, for the appellant, Geovanni Nicholas Ellis

Andreea Baiasu, for the respondent

Keywords: Criminal Procedure, Robbery, Jury Charge, Questioning Witnesses, Prior Consistent Statement’

R v SC, 2018 ONCA 454

[Rouleau, Tulloch and Fairburn JJ.A]

Counsel:

R. C., acting in person

Julianna Greenspan, appearing as duty counsel

Deborah Krick, for the respondent

Keywords: Publication Ban, Evidence, Sexual Assault, Similar Fact Evidence

R v Higgins, 2018 ONCA 451

[Feldman, Roberts and Trotter JJ.A.]

Counsel:

Melissa Adams, for the appellant

Mark Halfyard, for the respondent

Keywords: Criminal, Dangerous Driving Causing Bodily Harm, Mens Rea, s. 249(1) of the Criminal Code

R v Notaro, 2018 ONCA 449

[Feldman, Paciocco and Fairburn JJ.A.]

Counsel:

Peter Lindsay, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal, Accuracy of Blood Alcohol Breath Test, Residual Alcohol in Mouth

R v Vorobiov, 2018 ONCA 448

[Laskin and Pepall JJ.A. and Gans J.]

Counsel:

Scott Hutchison and Apple Newton-Smith, for the appellant

Eric Siebenmorgan and Rachel Young, for the respondent

Keywords: Criminal, Murder Plot, Evidence, Cross-Examination, Browne v. Dunn Instruction, Conduct After Murder

R v Dawson, 2018 ONCA 458

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

Breana Vandebeek, for the appellant

Craig Harper, for the respondent

Keywords: Criminal, Drug and Weapon Possession, Judicial Notice, Exculpatory Statement

R v Groskopf, 2018 ONCA 455

[Brown J.A.]

Counsel:

Dano Sahulka and Efstathios Balopoulos, for the applicant

Susan Magotiaux, for the respondent

Keywords: Criminal, Sexual Assault and Exploitation, Public Interest, Criminal Code, s. 679(3)(c)

R v Jackson, 2018 ONCA 460

[Doherty, Epstein and Pepall JJ.A.]

Counsel:

Rebecca De Filippis, for the appellant

Ian Carter, for the respondent

Keywords: Criminal Law, Impaired Driving, Summary Conviction, Standard of Review, Criminal Code, s. 253(1)(a)

R v Lawrence, 2018 ONCA 464

[Doherty, Epstein and Pepall JJ.A.]

Counsel:

Ian Carter, for the appellant

Rebecca De Filippis, for the respondent

Keywords: Criminal Law, Aggravated Assault

R v CL, 2018 ONCA 470

[Trotter J.A.]

Counsel:

David J. D’Intino, for the applicant

Susan Magotiaux, for the respondent

Keywords: Criminal Law, Sexual Assault, Bail, Public Interest

ONTARIO COURT OF APPEAL SUMMARIES (MAY 7- MAY 11)

Good afternoon,

Following are summaries of this week’s civil decisions of the Court of Appeal of Ontario.

The most significant decision of the week was easily Mega International Commercial Bank (Canada). In that case, the Court confirmed that the limitation period to bring claims for contribution and indemnity are not hard-capped at two years from the date a defendant was served with the plaintiff’s claim. Rather, section 18 of the Limitations Act, 2002 only creates a rebuttable presumption. The discoverability test set out in section 5 still applies, and if met, can extend the limitation period for bringing claims for contribution and indemnity.

Other topics covered this week included another decision in the residential schools class action, damages for breach of a fixed term personal services contract, breach of a non-solicitation covenant, an unpleasant dispute between neighbours, medical negligence, coverage for a mortgagor under a property insurance policy taken out by a mortgagee, a claim for damage to cargo under a marine insurance policy, leave to appeal and extension of time to appeal.

Wishing all the mothers a Happy Mother’s Day!

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

https://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

Fontaine v. Canada (Attorney General), 2018 ONCA 421

Keywords: Civil Procedure, Class Actions, Jurisdiction, Mootness, Standing, Deemed Undertaking, Evidence, Privilege, Rules of Civil Procedure, Rules 30.1.01 and 31.11(8)

Mohamed v. Information Systems Architects Inc., 2018 ONCA 428

Keywords: Contracts, Personal Services, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Termination, Duty of Good Faith Performance, Damages, Mitigation, Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256

Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429

Keywords: Torts, Solicitors’ Negligence, Contracts, Guarantees, Civil Procedure, Limitation Periods, Contribution and Indemnity, Discoverability, “Appropriate Means”, Fraudulent Concealment, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 18

Kalair v. Central 1 Credit Union, 2018 ONCA 434

Keywords: Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Standard of Review, Deference, R. v. Gatfield, 2016 ONCA 23

MD Physician Services Inc. v. Wisniewski, 2018 ONCA 440

Keywords: Contracts, Employment, Restrictive Covenants, Non-Solicitation, Enforceability, Ambiguity, Elsley Estate v. J.G. Collins Agencies Ltd.,  [1978] 2 S.C.R 916

Robert v. Assis, 2018 ONCA 442

Keywords: Torts, Trespass, Intrusion Upon Seclusion, Nuisance, Abuse of Process, Reasonable Apprehension of Bias, Fresh Evidence

Crump v. Fiture, 2018 ONCA 439

Keywords: Torts, Medical Negligence, Standard of Care, Causation, Reasons for Decision

Rill v. Adams, 2018 ONCA 443

Keywords: Civil Procedure, Leave to Appeal, Torts, Medical Negligence, Standard of Care

Hanson v. Totten Insurance Group Inc., 2018 ONCA 446

Keywords: Real Property, Contracts, Mortgages, Property Insurance, Coverage, Named Insureds, Insurable Interest, Subrogation

Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438

Keywords: Contracts, Insurance, Shipping, Summary Judgment, Evidence, Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423

For short civil decisions click here

For criminal decisions click here

Civil Decisions

Fontaine v. Canada (Attorney General), 2018 ONCA 421

[Hoy A.C.J.O., Juriansz and Miller JJ.A.]

Counsel:

Margaret L. Waddell and Fay K. Brunning, for the appellants Claimant H15019, Claimant K-10106 and M.

Catherine A. Coughlan and Brent Thompson, for the respondent Attorney General of Canada

Peter C. Wardle, for the intervenor

Diane Soroka, David Schulze and Maryse Décarie-Daigneault, for the Independent Counsel

Keywords: Civil Procedure, Class Actions, Jurisdiction, Mootness, Standing, Deemed Undertaking, Evidence, Privilege, Rules of Civil Procedure, Rules 30.1.01 and 31.11(8)

Facts: These appeals arise out of the implementation of the Indian Residential Schools Settlement Agreement (2006) (the “IRSSA”). The IRSSA is a settlement agreement that resolved class actions and pending individual actions across Canada against the Attorney General of Canada and other parties implicated in the tragic history of abuse perpetrated on indigenous children at residential schools. Among other things, the IRSSA provides for financial compensation to these victims. All eligible class members who had resided in a residential school are entitled to payment of a minimum amount, called a “Common Experience Payment”. The IRSSA also provides that class members who allege they suffered serious physical, sexual or psychological harm at a residential school may apply for additional compensation through the Independent Assessment Process (“IAP”).

This appeal involves St. Anne’s Indian Residential School in Fort Albany, Ontario. The appellants sought a declaration that Canada had breached its disclosure obligations under the IRSSA by refusing to produce transcripts of examinations for discovery from a related action (the Cochrane action). The administrative judge dismissed H-15019’s Request for Directions (“RFD”). He concluded that Canada had not breached its disclosure obligations under the IRSSA by refusing to produce the Cochrane Transcripts.

K-10106 and M sought extensive, far-reaching relief in their RFD. The administrative judge considered two preliminary issues: did they satisfy the test to obtain legal standing to bring their RFD and, if so, did the court have jurisdiction to provide the broad relief requested? The administrative judge concluded that K-10106 and M did not satisfy the test to obtain standing, the court did not have jurisdiction to grant most of the relief they sought, and, of the remaining items, there was no good reason for the court to exercise its jurisdiction. The appellants appeal the orders dismissing their RFDs.

Issues:

(1) Is H-15019’s appeal moot, and, if so, should the court exercise its discretion to hear his appeal?

(2) Does the deemed undertaking rule apply to the Cochrane transcripts?

(3) Was the administrative judge’s interpretation of the Order and the IRSSA unreasonable?

(4) Did the administrative judge err by failing to lift the deemed undertaking?

(5) Are the Cochrane Transcripts protected by settlement privilege?

(6) Did the administrative judge err in finding K-10106 and M did not have standing?

Held: Appeal dismissed.

Reasoning:

(1) Yes, the appeal is moot, but should still be heard by the court. Further disclosure could not impact him, because he has already been awarded the highest amount available, but the circumstances warrant the court hearing H15019’s appeal. Unquestionably, an adversarial relationship continues to prevail between the appellants and Canada. All appear, represented by counsel. Further, judicial economy favours determining these issues.

(2) No. The discovery evidence at issue was obtained in 62 distinct civil actions instituted in Cochrane by 154 survivors of St. Anne’s. H-15019 was not a plaintiff in any of the Cochrane Actions. He argues that the evidence of a survivor obtained in a civil proceeding commenced by that survivor can be used for the purpose of an IAP of a different survivor because they are the same proceeding. They are clearly not the same proceeding, and they involve different claimants. Rule 31.11(8) is inapplicable. Most of the Cochrane Actions settled before the advent of the IRSSA. No other actions could be or were subsequently brought in relation to the subject-matter of those settled actions.

(3) No. The interpretation of the IRSSA is a question of mixed fact and law reviewable for palpable and overriding error. There is no basis to interfere with the administrative judge’s conclusions that Canada did not breach its disclosure obligations in refusing to produce the Cochrane Transcripts. The deemed undertaking rule was not displaced by the IRSSA or the Applications Judge’s Order.

(4) No. While the administrative judge did not specifically address this argument in the reasons that are the subject of this appeal, he rejected it in an earlier decision regarding the disposition of documents created within the IAP. The administrative judge was entitled to consider the fact that considerable information was already available to Claimant H-15019 in determining whether the interests of justice outweighed the prejudice to the examinees of setting aside the deemed undertaking and providing further disclosure to him. His assessment of the interests of justice was not infected by a palpable and overriding error.

(5) No. The administrative judge agreed with Canada that the Cochrane Transcripts were covered by settlement privilege and disagreed with Claimant H-15019 that Canada had not met the evidentiary burden of showing that the discoveries were communications made with a view to settlement. Given the findings above, it was not necessary to determine whether there was an adequate basis for the administrative judge’s finding.

(6) Yes. Given the broad scope of their RFD, the administrative judge’s standing analysis was tainted by his focus on their complaints regarding the lawyers. The Court would have granted K-10106 and possibly M standing. However, this point is irrelevant, as there is no basis to interfere with the administrative judge’s conclusion that the court does not have, or should not exercise, its jurisdiction to order the broad entitlement to re-hearings that K-10106 and M seek, or to order a re-hearing of K-10106’s claim. There is also no basis to interfere with the administrative judge’s conclusion that the court should not exercise its case-by-case jurisdiction in the case of K-10106.

Mohamed v. Information Systems Architects Inc., 2018 ONCA 428

[Feldman, Watt, Paciocco JJ.A.]

Counsel:

J A LeNoury and R MacKinnon, for the appellant

L Sabsay, for the respondent

Keywords: Contracts, Personal Services, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Termination, Duty of Good Faith Performance, Damages, Mitigation, Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256

Facts:

The appellant engaged the respondent to provide technological consulting services under an Independent Consulting Agreement (“ICA”) for a six-month project that had an anticipated start date of November 2, 2015, and an anticipated end date of May 31, 2016. In the ICA, the parties agreed that the respondent would be an independent contractor. The project was with Canadian Tire, whose agreement with the appellant included a term that the appellant would not send any consultant who had a criminal record, except with Canadian Tire’s consent. After agreeing to work full-time under the ICA, the respondent resigned from his permanent, full-time employment.

Around November 2, 2015, the respondent told the appellant – before he signed the ICA and before he was assigned to the Canadian Tire project – that he had a dated criminal record from high school. He also agreed to a background security check. On November 4, he again disclosed his criminal record to the appellant in a declaration of criminal record form. On November 5, he began work at Canadian Tire, but when the security check report came back one month later disclosing the criminal record, Canadian Tire received a copy and, as a result, asked the appellant to replace the respondent. Although the respondent asked the appellant to consider him for other roles, the appellant terminated the respondent’s engagement on December 10, 2015, relying on para. 11.III of the ICA.

The respondent sued the appellant for breach of the ICA, claiming six months’ remuneration, that is, the full amount that would have been paid had the contract been completed, on the basis that the ICA was a fixed term contract where the respondent had no duty to mitigate his damages. Both parties moved for summary judgment, where the respondent asked the court to award damages for breach of contract, and the appellant asked the court to dismiss the action. Neither side took the position that a trial of any issue was required. The motion judge awarded judgment to the respondent in the full amount.

Issues:

(1) Did the motion judge make extricable errors of law in his approach to the interpretation of the termination clause of the ICA?

(2) Did the motion judge err in finding that the appellant was entitled to terminate the ICA under para. 11.III but that it did not do so in good faith?

(3) Did the motion judge err in law in finding that the ICA was a fixed term contract, and by applying the principle from the court’s decision in Howard v. Benson that the measure of the respondent’s damages is the amount owing for the unexpired term of the contract with no duty to mitigate?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. Because the issue before the court was the interpretation and enforcement of a non-standard form contract between the parties, on appeal, the principles articulated by the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633 apply. As a result, significant deference is owed to the trier of fact on the findings regarding the interpretation of the particular contract.

At para. 39 of his reasons, the motion judge specifically identified the principle of good faith as “an operative principle in the performance of contracts” – not a principle applicable to the interpretation of contracts. Applying the principle of good faith to the performance of the termination provision, he concluded at paras. 39-40 that the principle “qualifies ISA’s rights to terminate without cause”, such that the appellant could not “simply, and in an unfettered way, determine that it is in their best interest to replace Mr. Mohamed and then terminate the contract”. He added at para. 42 that the appellant was “mistaken in thinking that it had an unfettered right to terminate Mr. Mohamed’s contract” because the case law supported the respondent’s understanding that “there was some element of good faith or trust in the exercise of the provision”. The motion judge then went on to find that the appellant breached the ICA by not acting in good faith when it exercised its rights under the termination provision.

Having made the finding of breach, the motion judge nevertheless went on to find, essentially in the alternative, that the termination clause was void for vagueness. The motion judge made two extricable errors of law in the application of the principles of contractual interpretation in reaching this conclusion.  First, having found that the meaning of the termination provision was clear when read literally, there was no basis to apply the contra proferentem rule. That rule may be used only to resolve an ambiguity (see: Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, at pp. 899-900), not to create one.  Second, having found the meaning of the termination clause to be clear, the subsequent conclusion that the clause is vague and uncertain because of the differing notice requirements is inconsistent, and does not bear logical scrutiny. The motion judge identified no basis on the record for concluding that it was not the intention of the parties to require notice of termination only where the respondent’s engagement was being terminated for breach of the ICA, or that the clause could not be implemented as it reads. The result of finding two extricable errors of law in the motion judge’s finding that the termination clause is unenforceable is that the finding cannot stand and must be set aside. However, nothing ultimately turns on this conclusion, because of the motion judge’s other finding that the appellant was obliged to exercise its rights under para. 11.III of the ICA in good faith and that it breached the agreement by failing to do so.

(2) No. Although the appellant had a prima facie unfettered right to terminate the contract, it had an obligation to perform the contract in good faith and therefore to exercise its right to terminate the contract only in good faith. Although the motion judge did not state explicitly the basis for concluding that the appellant breached its good faith obligation, he had reviewed the facts and circumstances earlier in his reasons. Because the respondent disclosed his criminal record to the appellant right at the beginning, before signing the ICA and before commencing the project with Canadian Tire, and complied with all the requirements of the security check, the appellant’s reliance on the criminal record to terminate the contract one month later was not a good faith exercise of its rights under the termination clause of the ICA.

(3) No. Although he was willing to accept that his engagement could be terminated with no payment when the appellant deemed it to be in its best interests to do so, the respondent expected, as he was entitled to do, that the appellant would only exercise its rights under the termination clause in good faith. When that did not occur, the respondent was entitled to damages. Although the contract does not provide for what damages would flow from a failure to terminate in good faith, based on the specific terms and circumstances of this contract, it is reasonable to infer that the parties intended that if the power to terminate was not exercised in good faith, then damages for breach would be based on the wages owed for the remaining term of the agreement, without a duty to mitigate.

Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429

[Doherty, Paciocco and Nordheimer JJ.A.]

Counsel:

Eliot N. Kolers and Zev Smith, for the appellant

M Scott Martin and Marco P. Falco, for the respondents

Keywords: Torts, Solicitors’ Negligence, Contracts, Guarantees, Civil Procedure, Limitation Periods, Contribution and Indemnity, Discoverability, “Appropriate Means”, Fraudulent Concealment, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 18

Facts:

This is an appeal from summary judgment dismissing the appellants’ third party claims for contribution and indemnity against the respondent lawyer and law firm as statute-barred.

Mr. Y and Ms. L, the appellants, commenced the underlying third party claims against their former lawyer, Mr. S and his law firm, Sun & Partners, after Mega International Commercial Bank (Canada) (“Mega International”) sued Mr. Y and Ms. L on personal guarantees they provided to Mega International’s predecessor, International Commercial Bank of Cathay (Canada) (“International Commercial”). Those personal guarantees were given to secure financing for a Toronto development property that Mr. Y and Ms. L were involved in. Mr. Y and Ms. L claim that their lawyer, Mr. S, was instructed to obtain releases from those personal guarantees, but failed to do so – hence their claims for contribution and indemnity.

Mr. Y and Ms. L did not sue Mr. S and his law firm until more than two years after Mega International served Ms. L with a claim against her on her personal guarantee. The motion judge held that s. 18 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B establishes an absolute two-year limitation period for contribution and indemnity claims, which commenced when Ms. L was served with Mega International’s claim. Hence, he found that Mr. Y’s and Ms. L’s third party claims were statute-barred.

Issues:

(1) Does s. 18 of the Limitations Act, 2002 incorporate discoverability principles?

(2) If the discoverability principles under ss. 4 and 5 of the Limitations Act, 2002 apply, should the motion judge’s findings relating to Mr. Y’s and Ms. L’s knowledge of their claims against Mr. S, made in the context of the fraudulent concealment determination, be relied upon to resolve the discoverability issue?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court held that the motion judge erred in law in holding that the Limitations Act, 2002, s. 18 creates an absolute limitation period of two years for the commencement of contribution and indemnity claims. Properly interpreted, s. 18 works with other provisions of the Limitations Act, 2002 to create a presumed start date for the running of the limitation period. That presumed limitation period start date will result in a claim for contribution or indemnity being statute-barred two years after the party seeking contribution or indemnity is served with a claim in the proceeding in which contribution or indemnity is sought, unless that party proves that the claim for contribution or indemnity was not discovered and was not capable of being discovered through the exercise of due diligence until some later date.

Section 18 of the Limitations Act, 2002, the section directly in issue in this appeal, provides:

Contribution and indemnity

18(1) For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.

The court stated that s. 18 takes on meaning when it is linked to the Limitations Act, 2002, s. 5(2). Subject to the absolute 15-year limitation period in s. 15(2), ss. 5(2) and 18 together establish the presumptive limitation period for contribution and indemnity claims – a presumptive limitation period that incorporates the discoverability principles outlined in ss. 4 and 5(1). The court emphasized the interaction between ss. 5(2) and 18 for two reasons.

First, s. 18 is linked expressly to s. 5(2) in its opening phrase, “For the purposes of subsection 5(2) and section 15”. This opening phrase cannot be read as a direction to exclude contribution and indemnity claims from the operation of ss. 5(2) and 15.

Second, the thing or fact that s.18 deems to have occurred is the same thing or fact that is used in s. 5(2) as the trigger for the presumptive limitation period in ss. 4 and 5. Section 18 deems “the day on which the first alleged wrongdoer was served with the claim in respect of which contribution or indemnity is sought [to be] the day the act or omission on which the alleged wrongdoer’s claim is based took place.” Meanwhile, s. 5(2) treats “the day the act or omission on which the claim is based took place” to be the day on which a person with a claim is presumed to know that they have a claim within the meaning of s. 5(1). Section 5(2) is the only other provision in the Limitations Act, 2002 apart from s. 18 that uses the operative phrase underlined in the preceding sentences. The two sections are clearly meant to intersect and work together. In effect, s. 18 provides the variable used in s. 5(2) as the trigger for the presumed limitation period for contribution and indemnity claims.

The court therefore held that the motion judge erred in his interpretation of s. 18. The two-year limitation period prescribed by ss. 4, 5(2), and 18 for contribution and indemnity claims presumptively begins on the date of service of a claim in respect of which contribution and indemnity is sought. That presumptive limitation period start date, however, can be rebutted by the discoverability principles prescribed in s. 5 of the Limitations Act, 2002.

(2) No.  In law, fraudulent concealment differs from discoverability in its focus and its requirements. The court stated that the motion judge nonetheless made a finding while addressing the fraudulent concealment claim that Mr. S relies on as resolving the discoverability issue in his favour. Specifically, the motion judge found, at para. 57 of his reasons, that there was no fraudulent concealment because Mr. Y and Ms. L were “aware of the essential facts giving rise to a claim against the alleged wrongdoer”, Mr. S.

The court held that the finding that Mr. Y and Ms. L were aware of the essential facts giving rise to a claim against Mr. S is not a finding of discoverability within the meaning of the Limitations Act, 2002, s. 5(1). The court cannot, therefore, utilize this holding to dismiss this appeal on the basis that the motion judge resolved the discoverability issue indirectly.

The reason the motion judge’s “knowledge” finding is not the same as a discoverability finding is because the knowledge finding does not resolve the discoverability consideration in s. 5(1)(a)(iv) of the Limitations Act, 2002 with respect to whether the party with the claim knew that bringing the claim was legally appropriate (the “appropriate means” branch of the discoverability test).

It would not be appropriate in these circumstances to treat a finding that the defendants had knowledge of the main action as a finding that a third party claim against their lawyer was discoverable. The motion judge did not overtly address whether Mr. Y or Ms. L knew it to be legally appropriate to bring their third party claims against Mr. S. In the court’s view, this was enough to dispose of the appeal.

The court stated that the decision of the motion judge to grant summary judgment was undermined by his misinterpretation of the Limitations Act, 2002, s. 18. Simply put, that error clouded the motion judge’s understanding of the nature and complexity of the case he was being asked to resolve on summary judgment. Had he appreciated the nature of the dispute before him, i.e., when Mr. Y and Ms. L discovered that it was legally appropriate to commence a third party claim against their own lawyer, he may have found a genuine issue requiring a trial.    

Kalair v. Central 1 Credit Union, 2018 ONCA 434

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

KEW, for the moving party

DS and AF, for the responding party

Keywords: Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Standard of Review, Deference, R. v. Gatfield, 2016 ONCA 23

Facts:

Mr. K’s motion for an extension of time to file a notice of appeal – which he had missed by 2 weeks – was dismissed by Roberts J.A. on October 11, 2017. Justice Roberts was satisfied that Mr. K had formed the requisite intention to appeal, provided an adequate explanation for the short delay, and there was no prejudice occasioned to the respondent from the delay. However, she concluded that Mr. K had failed to meet “the admittedly low threshold of demonstrating that there was some merit to the proposed appeal such that the court should not reasonably deny the important right of appeal”.

Pursuant to s. 7(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43, Mr. K moved before a panel to review the decision of Roberts J.A. and to set aside her order or vary it. As additional support for this review, and by way of an affidavit dated April 26, 2018 contained in a supplementary motion record filed April 27, 2018, Mr. K outlines proposed merits of the appeal that were not before Roberts J.A.

Issues:

(1) Did the motion judge err in dismissing the appellant’s motion for an extension of time to file a notice of appeal?

Holding: Appeal dismissed.

Reasoning: 

(1) No. In Mr. K’s April 26th affidavit he provides particulars of “merits of the appeal that were not before Roberts J.A.”. In the affidavit he claims that “much of the legal merits of [his] appeal were not known to [him] and [his] new counsel until more recently when [his] previous counsel provided information and parts of the file”.

A full panel of the court owes considerable deference to a chambers judge’s decision regarding whether to grant an extension of time: R. v. Gatfield, 2016 ONCA 23, at para. 11.

The conclusory statements in the affidavit before Roberts J.A. do not support the argument that she may have made an error in dismissing Mr. K’s motion. To the contrary, Roberts J.A. addressed all the relevant factors and properly applied those factors to the evidentiary record before her. In particular, she concluded there was no merit to the appeal. The panel agreed with that conclusion. Mr. K failed to provide any reason (even in his new material) for why the panel should interfere with the exercise of discretion by Roberts J.A.

MD Physician Services Inc. v. Wisniewski, 2018 ONCA 440

[MacPherson, Hourigan and Benotto JJ.A.]

Counsel:

Nigel Campbell and Doug McLeod, for RBC Dominion Securities Inc.

Kenneth Dekker and Annie Tayyab, for the respondents

Keywords: Contracts, Employment, Restrictive Covenants, Non-Solicitation, Enforceability, Ambiguity, Elsley Estate v. J.G. Collins Agencies Ltd.,  [1978] 2 S.C.R 916

Facts:

The appellants are two former employees of the respondent companies (“MD”). They, together with their current employer, the respondent RBC Dominion Securities Inc. (“RBC”), appeal from the trial judge’s finding that they breached the non-solicitation terms of their employment contract with MD.

The appellants were hired by MD in 2003 and 2005 respectively. They each signed identical non-solicitation agreements which provided as follows:

Non-Solicitation. The Employee agrees that the Employee shall not solicit during the Employee’s employment with the Employer and for the period ending two (2) years after the termination of his/her employment, regardless of how that termination should occur, within the geographic area within which s/he provided services to the Employer.

“Solicit” means: to solicit, or attempt to solicit, the business of any client, or prospective client, of the Employer who was serviced or solicited by the Employee during his/her employment with the Employee.

The appellants Wisniewski left MD in 2013 to join RBC, a competitor. On their first day of work with RBC, the appellants wrote out from memory a list of MD’s clients that they had serviced and began phoning them.  The trial judge found they had breached their non-solicitation covenants.

On appeal, they allege that the agreement was ambiguous in regard to the term “solicit”, the geographic scope, the applicability to prospective clients, and the temporal length of the restriction. They also allege errors relating to the formation of the contracts generally.

Issue: Was the agreement so ambiguous with respect to the meaning of “solicit” as to render it unenforceable?

Holding:  Appeal dismissed.

Reasoning: No. The meaning of the word “solicit” is obvious. The calls made by the appellants to former clients were not – as the appellants suggest – courtesy calls. They were clearly made with a view to bringing the clients to RBC. The calls were made immediately after being hired by RBC, they were made personally, by telephone and followed a predetermined structure. The evidence supports the trial judge’s conclusion that the calls were to solicit business.

The trial judge properly directed himself with respect to the legal principles that address the enforceability of a non-solicitation clause. He referred to and applied the test in Elsley Estate v. J.G. Collins Agencies Ltd. He concluded that MD is a specialized company dealing with physicians and has a proprietary interest in ensuring that its business is not used by financial planners to take customers away from it.

He found that the clause was reasonable in terms of the public interest. It protects MD without unduly compromising its employees. There was no ambiguity with respect to the two year term.

The scope of the proscribed activities was clearly defined by the agreement. With respect to the formation of the contracts, the trial judge found that the individual appellants were provided with a copy of the non-solicitation provisions before starting their employment. This was a factual finding open to him on the evidence as were other factual findings made in his judgment. There is no reason for appellate intervention.

Robert v. Assis, 2018 ONCA 442

[Hourigan and Benotto and Fairburn JJ.A.]

Counsel:

J Sebastian Winny, for the appellants

Sharon Ilavsky, for the respondents

Keywords: Torts, Trespass, Intrusion Upon Seclusion, Nuisance, Abuse of Process, Reasonable Apprehension of Bias, Fresh Evidence

Facts:

The appellants brought an action against their next door neighbour seeking injunctive relief and damages for: (i) invasion of privacy arising from video and audio cameras which they say were trained on their property; (ii) nuisance arising from outside speakers, floodlights and the occasional errant hockey puck; (iii) trespass arising primarily from the construction of two fences; and (iv) abuse of process arising from an application for a peace bond made by the respondents before a justice of the peace. The trial judge dismissed the action. The appellants allege that the trial judge failed to decide the case on the merits, provided inadequate reasons and demonstrated a reasonable apprehension of bias.

Issues:

(1) Did the trial judge err in dismissing the action?

Held: Appeal dismissed.

Reasons: The trial judge carefully detailed the evidence of all parties and the claims made by the appellants. He concluded that the intrusion upon seclusion claim had not been proved. He found that there was no credible evidence to support the allegation. He also found that the claims by both parties were “hyperbolized”. He found that the nuisance had not been established, as the appellants never approached the respondents about such things as lights and music. The “couple of incidents” in which hockey pucks wound up in the appellants’ yard did not rise to the level of nuisance. Although a great deal of time at trial was spent on trespasses, the trial judge was not satisfied that the trespass with respect to the construction of the fence took place. Also, there was no evidence from a surveyor to establish where the lot line was in connection with the alleged moving of the stakes. There was no evidence of abuse of process as the trial judge found no dishonesty in relation to the application for a peace bond. The reasons read as a whole, indicate that findings of credibility were essential to all of these determinations. Those findings are entitled to deference. Further, the reasons clearly provide the parties with the rationale for the trial judge’s decision.

The bias allegation appears to arise from the trial judge’s question to counsel and subsequent comments about the fact that the parties did not take advantage of various mediation services. There is a strong presumption of judicial impartiality and a heavy burden on a party who seeks to rebut this presumption. The judge’s inquiry into mediation was eminently reasonable.

The fresh evidence is not admissible. It consists of further information about security cameras and a suggestion that the trial judge wrote bullet point comments about his reasons to a legal publisher, reacted with anger at the conclusion of counsel’s submissions, and asked about mediation. The evidence could have been adduced at trial, and it is clear that the proposed evidence is more of the same evidence already rejected by the trial judge.

Crump v. Fiture, 2018 ONCA 439

[Hourigan, Benotto and Fairburn JJ.A.]

Counsel:

S E. Batner and C. Piovesan, for the appellant
A Mladenovic and J. V. Leone, for the respondents

Keywords: Torts, Medical Negligence, Standard of Care, Causation, Reasons for Decision

Facts:

The respondent first complained of abdominal pain on May 20, 2000. By the evening of May 23, she was still suffering from pain and her mother took her to a walk-in clinic. The clinic doctor concluded that she likely had acute appendicitis with perforation. He referred her to the emergency room at the local hospital.

The emergency room concluded that she potentially had appendicitis and referred her for a surgical consult. The appellant, a general surgeon, examined her and concluded that she could be suffering from: (1) mesenteric adenitis secondary to respiratory tract infection and viremia; (2) menstrual pain related to cramps; or (3) early appendicitis.

The appellant did not order an ultrasound or admit her to the hospital. He discharged her and gave instructions to her mother regarding the circumstances upon which the respondent should be returned to the hospital.

By May 31, the respondent had a rising fever and was referred to the hospital where she underwent surgery. Her appendix had ruptured causing significant damage to her bowel.

Issues:

(1) Did the trial judge err in determining the standard of care of a general surgeon?

(2) Did the trial judge err in finding that causation had been established?

(3) Were the reasons of the trial judge neither timely nor sufficient?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellant’s evidence was that he instructed the respondent’s mother to bring her back if her condition did not get better but the evidence of the respondent’s mother  was that she was to bring her daughter back only if her condition worsened. The trial judge preferred the mother’s evidence. In addition, evidence from the medical charts corroborated the mother’s version of the instructions. The trial judge did not err in finding that the appellant should have prioritized appendicitis as a “top drawer consideration”. This was supported by the evidence. The trial judge made no palpable and overriding error in finding that the appellant fell below the requisite standard of care for a general surgeon as at the relevant time.

(2) No. It is not a fair reading of the trial judge’s reasons to say that he solely relied on a different ranking of differential diagnosis in finding causation. The trial judge also relied on the finding that the appellant was negligent in his discharge instructions. The fact that the family doctor advised the respondent to follow the appellant’s advice does not interfere with the chain of causation as the expert witness testified that in the circumstances a family doctor would defer to the advice given by a surgeon.

(3) No. While there are parts of the reasons that would have benefitted from a more detailed analysis, this court was able to understand the trial judge’s conclusions on the issues and how he reached them. Also, while there was an inordinate delay in releasing reasons, in the context of this case, the delay did not impede the trial judge’s ability to fairly decide the case.

Rill v. Adams, 2018 ONCA 443

[Strathy C.J.O., Roberts and Paciocco JJ.A.]

Counsel:

W.R., acting in person
L. Brusven, for the respondents

Keywords: Civil Procedure, Leave to Appeal, Torts, Medical Negligence, Standard of Care

Facts:

In the underlying action, the moving party alleged negligent medical diagnosis and drug treatment against the respondents. However, that action was dismissed because after being granted more than six months to provide satisfactory evidence that the respondents had breached the standard of care, the moving party still had not done so.

The moving party appealed to the Divisional Court. The Divisional Court judge dismissed the appeal giving careful reasons why the moving party’s action could not succeed in the absence of evidence of a breach of the standard of care. The judge considered both the fact that the moving party was self-represented, and the fact that it would be unfair to submit the parties to a proceeding that had no reasonable prospect of success. The moving party seeks leave to appeal to the Court of Appeal.

Issues:

(1) Should leave to appeal be granted?

Holding:

Motion dismissed.

Reasoning:

(1) No. The appellant has not identified any error in the reasons of the Divisional Court judge. There is no question of law or matter of public importance.

Hanson v. Totten Insurance Group Inc., 2018 ONCA 446

[MacFarland, LaForme and Epstein JJ.A.]

Counsel:

S Pickard, for the appellants

M Pearce and B Stephenson, for the respondents Totten Insurance Group Inc. and Lloyd’s Underwriters

M Stocks, for the respondents JM and LM

Keywords: Real Property, Contracts, Mortgages, Property Insurance, Coverage, Named Insureds, Insurable Interest, Subrogation

Facts:

This is an appeal from an order dismissing the appellants’ motion for summary judgment in a mortgage enforcement action. The respondents, Lloyd’s Underwriters (“Lloyd’s”) and Totten Insurance Group Inc. (“Totten”), had issued a policy of insurance to the respondents, JM and LM, the mortgagees of a property owned by the appellants, the mortgagors. Following a loss to the property, Lloyd’s paid JM and LM their mortgage loss and claimed, through subrogation, against the mortgagors. The mortgagors brought a motion for summary judgment in which they sought a determination as to whether the Lloyd’s policy covered their interest in the property so that the payment on the policy extinguished the mortgage debt.

In the usual situation of a homeowner with a mortgaged property, the homeowner, as required by standard mortgage terms, obtains and pays for a policy of insurance in his or her name. That policy will cover the homeowner’s interest in the property as well as the interest of the mortgagee. It is common practice for such policies to contain what is known as a standard mortgage clause. Such a clause will protect the interest of a mortgagee despite an act of the insured homeowner that would otherwise breach policy conditions. See, generally: Gowling Lafleur Henderson LLP, Marriott and Dunn: Practice in Mortgage Remedies in Ontario, loose-leaf (2018-Rel. 1), 5th ed. (Toronto: Thomson Reuters, 1994), vol. 2 at pp. 50-7 to 50-13; and Walter M. Traub, Falconbridge on Mortgages, loose-leaf (2017-Rel. 25), 5th ed. (Toronto: Thomson Reuters, 2017), at pp. 38-7 to 38-15.

However, in this case the appellants, who had obtained a private mortgage in the sum of $250,000 from JM and LM, were unable to obtain property insurance. JM and LM obtained a policy of insurance for $200,000 in their own names, which was underwritten by Lloyd’s. That policy stated that it protected only the interest of JM and LM as mortgagees.

Issues:

(1) Did the Lloyd’s policy also cover the appellants’ interest in the property?

(2) Is Lloyd’s entitled to exercise its right of subrogation having paid out the mortgagees’ interest?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellants argue that the motion judge erred in reaching the conclusion that the policy was only for the mortgagees’ benefit. They contend that the only reasonable interpretation of Standard Charge Term 16 is that a mortgagee must obtain insurance that will cover the interests of both the mortgagor and mortgagee when a mortgagor does not, for whatever reason, insure the subject property. The appellants argue that the language in Standard Charge Term 16 “…otherwise the Chargee may provide therefor and charge…” (emphasis added) can only mean that the mortgagee/chargee, if it chooses to obtain insurance coverage, must obtain the same coverage that the mortgagor/chargor is required to obtain. They argue the word “therefor” can only refer back to the language in the earlier portion of the provision which outlines the mortgagor’s/chargor’s obligation to insure.

There are a number of difficulties with this argument. First, the obligation to insure lies on the mortgagor/chargor in the first instance and is mandatory – the mortgagor/chargor will “immediately insure”. There is no obligation on the mortgagee/chargee to insure. That portion of the clause dealing with the mortgagee’s/chargee’s right to insure is merely permissive – the mortgagee/chargee “may provide therefor” (emphasis added). The appellants’ argument converts the permissive language of this term into a mortgagee’s/chargee’s mandatory obligation to obtain like insurance. Second, as the mortgagees discovered, mortgagees/chargees can only obtain insurance in their own names to cover their own interest in the subject property. The mortgagees do not have an insurable interest in the equity of redemption – only the appellants do. Finally, this Standard Charge Term 16 is for the benefit of mortgagees/chargees. The property is to be insured by the mortgagor/chargor and the cost of that insurance is to be borne by the mortgagor/chargor. The assumption of risk lies with the mortgagor/chargor, not the mortgagee/chargee.

Moreover, the appellants argument that the mortgagors expected that the insurance policy would cover their interest was rejected by the motion judge. Her finding in this regard is well-supported on the record before her.

(2) Yes. Their motion for summary judgment having been dismissed in its entirety, including their request for injunctive relief, there was no remaining impediment to the insurers proceeding with their power of sale proceedings.

Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438

[Doherty and Pepall JJ.A. and Gray J. (ad hoc)]

Counsel:

Rui Fernandes, James Manson, and Sean Lawler, for the appellant

Marc Isaacs and Hilary Weise, for the respondent

Keywords: Contracts, Insurance, Shipping, Summary Judgment, Evidence, Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423

Facts:

The appellant, Broadgrain Commodities Inc., sold 26 containers of sesame seeds to Beidahuang Grain Group Co. Ltd. (“Beidahuang”).  They were to be shipped CIF (‘cost, insurance, freight’) from Tin Can Island in Nigeria to Xingang in China.

The goods were loaded on board the transport vessel on October 15, 2014.  Beidahuang paid the appellant for the goods on December 12, 2014.  The goods arrived in China on December 17, 2014.  The goods had been damaged during transit, but the timing of the damage could not be determined.  The cargo was unfit for human consumption and was sold for salvage.  Beidahuang kept the salvage proceeds.

The goods were insured by the respondent, Continental Casualty Company carrying on business as CNA Canada, under a policy of marine insurance in favour of the appellant.  The appellant sought compensation from the respondent under the insurance policy, but the respondent denied coverage.  The appellant then sued the respondent, who subsequently brought a motion for summary judgment.

Issues:

(1)Did the motion judge err in granting summary judgment based on the finding that the appellant did not sustain any loss since the goods had been paid for in full by Beidahuang?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellant pleaded that the shipments were damaged by contact with water, resulting in a loss of US$550,081.38 to the appellant.  The appellant’s affidavit of documents and examination for discovery were silent on any evidence of loss.  The issue of a loss based on subsequent short-payments by Beidahuang relating to other shipments was first raised in an affidavit filed in response to the respondent’s summary judgment motion.

The court held that as stated by the Supreme Court in Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423, at para. 31: “[A] self-serving affidavit is not sufficient in itself to create a triable issue in the absence of detailed facts and supporting evidence”.

Here, no evidence of any kind was filed to support the allegation of short-payments: no dates, no amounts, no invoices, no credit statements, nothing.  Nor was there any explanation given for the absence of any supporting details or documentation. Accordingly, the court held that there was no palpable and overriding error, and deference is owed to the motion judge’s conclusion that the appellant was paid in full and that there was no credible evidence to the contrary.

Short Civil Decisions

The Catalyst Capital Group Inc. v. Moyse, 2018 ONCA 447

[Doherty, MacFarland and Paciocco JJ.A.]

Counsel:

B H Greenspan, D C Moore and M Biddulph, for the appellant

R A Centa, K Borg-Olivier and D Cooney, for the respondent, Brandon Moyse

K E Thomson, M Milne-Smith and A Carlson, for the respondent, West Face Capital Inc.
Keywords: Costs Endorsement

Cowan v. General Filters Inc., 2018 ONCA 445

[Pepall, Lauwers and Paciocco JJ.A.]

Counsel:

C I R Morrison, for the appellant

C A Chekan, for the respondent Dana Canada Inc. Filter Division

No one appearing for the respondents JC, SC, General Filters Inc., Canadian General Filters Limited, Lippert & Wright Fuels Ltd. also known as Dave Lippert Fuels Ltd., K & S Climate Control, and Oil Tech Plus Ltd.
Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Fusarelli v. Dube, [2005] O.J. No. 4398 (C.A.), Chertow v. Chertow (2001), 146 O.A.C. 141

Criminal Decisions

R v. Gilchrist, 2018 ONCA 430

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

C Gilchrist, in person

L Schwalm, for the respondent
Keywords: Provincial Offences, Driving Without Insurance, Provincial Offences Act, R.S.O. 1990, c. P. 33, Compulsory Automobile Insurance Act, R.S.O. 1990 c. P. 25

R v. Natsis, 2018 ONCA 425

[van Rensburg, Pardu and Miller JJ.A.]

Counsel:

M Henein and M Gourlay, for the appellant

J Klukach and L Schwalm, for the respondent
Keywords: Criminal Law, Impaired Driving Causing Death, Dangerous Driving Causing Death, Expert Evidence, Sentencing

R v. Piccinini, 2018 ONCA 433

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

C Kerr, for the appellant

M Flanagan, for the respondent
Keywords: Criminal Law, Fraud Over $5000, Theft Over $5000, R. v. Kienapple, [1975] 1 S.C.R. 729, Sentencing

R v. Spence, 2018 ONCA 427

[Doherty, van Rensburg and Nordheimer JJ.A.]

Counsel:

C Verner and L Beechener, for the appellant

E Nakelsky, for the respondent
Keywords: Criminal Law, Manslaughter, Murder, Accessory After-The-Fact

R v. Hejazi, 2018 ONCA 435

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

M Dineen, for the appellant

C Suter, for the respondent
Keywords: Criminal Law, Breaking and Entering, Sexual Assault with a Weapon, Robbery, Unlawful Confinement, Possession of the Proceeds of Crime, Sentencing

R v Polanco, 2018 ONCA 444

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

D M Garg, for the appellant

M Gourlay, for the respondent
Keywords: Criminal Law, Summary Conviction, Assault, Assault with a Weapon, Assault Causing Bodily Harm, Theft Under $5,000

Workplace Safety and Insurance Board v. Curtis, 2018 ONCA 441

[Sharpe, Pardu and Fairburn JJ.A.]

Counsel:

David Shulman, for Selvamenan Kathirkamapillai

Andrew Bigioni, for Douglas Koomson

David Curtis and Mark Wiffen, amicus for David Curtis

Keywords: Regulatory Offences, Workplace Health and Safety, Mens Rea, Benefits, Material Change in Circumstances, Duty to Inform, Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16 Sched. A, s. 149(2)

R v. Vu, 2018 ONCA 436

[Simmons, van Rensburg and Nordheimer JJ.A.]

Counsel:

J Norris, for D Vu

C A Chekan, for the respondent Dana Canada Inc. Filter Division

K Schofield and D Stein, for H T P and W W L

N Devlin and J North, for the Public Prosecution Service of Canada
Keywords: Criminal Law, Unauthorized Production of Marijuana, Sentencing, Mandatory Minimum, Canadian Charter of Rights and Freedoms, Section 12, Controlled Drugs and Substances Act, S.C. 1996, c. 19

R v. Williams, 2018 ONCA 437

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A.]

Counsel:

W Cunningham, for the appellant

R Young, for the respondent
Keywords: Criminal Law, Assault Causing Bodily Harm, Dangerous Offenders

 

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

ONTARIO COURT OF APPEAL SUMMARIES (APRIL 30 – MAY 4, 2018)

Good evening.

Following are summaries of this week’s civil decisions of the Court of Appeal for Ontario.

In Maple Leafs Foods, a class action brought by Mr. Sub franchisees against Maple Leaf for economic loss suffered as a result of the listeria outbreak at a Maple Leaf plant several years ago was dismissed. The Court held that while Maple Leaf may well have had liability for personal injury suffered by anyone who consumed contaminated meat, it did not have a duty not to harm the reputation or profits of Mr. Sub franchisees who sold Maple Leaf meats.

In a doctor’s professional discipline decision, the Court restored the penalty for professional misconduct imposed by the discipline committee, in the process, overturning the Divisional Court.

In Jackson v. Stephen Durbin and Associates, the Court held that any retainer agreement between a lawyer and client that ties the amount of compensation to be paid to the outcome is a contingency fee agreement. The retainer agreement at issue was for a family law matter. Section 28.1(3)(b) of the Solicitors Act prohibits contingency fee agreements in family law cases.

Finally, the Court released its decision in Forcillo in R. v. Forcillo. The appeal from the conviction of the constable for attempted murder was dismissed.

I hope everyone has an enjoyable weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

https://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2018 ONCA 407

Keywords:Torts, Negligence, Duty of Care, Established Categories, Proximity, Foreseeability, Damages, Pure Economic Loss, Anns/Cooper Test, Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.); Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, PlasTex Canada Ltd. v. Dow Chemical of Canada Ltd., 2004 ABCA 309, 245 D.L.R. (4th) 650, leave to appeal refused [2004] S.C.C.A. No. 542; 376599 Alberta Inc. v. Tanshaw Products Inc., 2005 ABQB 300, 379 A.R. 1; Country Style Food Services Inc. v. 1304271 Ontario Ltd. (2005), 200 O.A.C. 172, Civil Procedure, Class Actions, Summary Judgment

Capcorp Planning (2003) Inc. v. Ontario (Finance), 2018 ONCA 406

Keywords: Taxation, Retail Sales Tax, Statutory Interpretation, Failure to Collect and Remit, Unfunded Employee Benefits Plans, Burden of Proof, Retail Sales Tax Act, R.S.O. 1990, c. R. 31

Davis v. East Side Mario’s Barrie, 2018 ONCA 410

Keywords: Torts, Negligence, Slip and Fall, Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A., Civil Procedure, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Rules of Civil Procedure, R.R.O. 1990, Reg. 194

Butler v. Royal Victoria Hospital, 2018 ONCA 409

Keywords: Torts, Negligence, Medical Malpractice, Causation, Damages, Future Loss of Income, Costs

Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2018 ONCA 412

Keywords: Civil Procedure, Dismissal for Delay, Rule 48.14, Rules of Civil Procedure

992548 Ontario Inc. v. 8657181 Canada Inc., 2018 ONCA 416

Keywords: Real Property, Mortgages, Civil Procedure, Default Judgments, Setting Aside, Relief from Forfeiture, Winters v. Hunking, 2017 ONCA 909

Beaver v. Hill, 2018 ONCA 415

Keywords: Civil Procedure, Motions, Interim Costs, Cross-Examination on Affidavits, Orders, Breach, Re Ferguson and Imax Systems Corp. (1984), 47 O.R. (2d) 225 (Div. Ct.), Dickie v. Dickie, 2007 SCC 8

College of Physicians and Surgeons of Ontario v. Peirovy, 2018 ONCA 420

Keywords: Administrative Law, Regulated Professions, Doctors, Professional Discipline, Standard of Review, Reasonableness, Penalty, R. v. Chase, [1987] 2 S.C.R. 293

Rahaman v. Fiscia, 2018 ONCA 418

Keywords: Contracts, Real Property, Debtor-Creditor, Civil Procedure, Applications, Rules of Civil Procedure, Rule 2.01

Yasin v. Ontario, 2018 ONCA 417

Keywords: Administrative Law, Vital Statistics Act, R.S.O. 1990, c. V.4, Jurisdiction, Remedies, Declarations, Civil Procedure, Necessary and Proper Parties

Jackson v. Stephen Durbin and Associates, 2018 ONCA 424

Keywords: Contracts, Solicitor and Client, Illegality, Contingency Fee Agreements, Family Law, Solicitors Act, R.S.O. 1990, c. S. 15, s. 28.1(3)(b)

Criminal Decisions

Short Civil Decision

Civil Decisions:

1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2018 ONCA 407

[Sharpe, Rouleau and Fairburn JJ.A.]

Counsel:

S. Stieber and E. Bowker, for the appellants

P.W. Kryworuk, R. Case and J. Damstra, for the respondent

Keywords:Torts, Negligence, Duty of Care, Established Categories, Proximity, Foreseeability, Damages, Pure Economic Loss, Anns/Cooper Test, Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.); Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, PlasTex Canada Ltd. v. Dow Chemical of Canada Ltd., 2004 ABCA 309, 245 D.L.R. (4th) 650, leave to appeal refused [2004] S.C.C.A. No. 542; 376599 Alberta Inc. v. Tanshaw Products Inc., 2005 ABQB 300, 379 A.R. 1; Country Style Food Services Inc. v. 1304271 Ontario Ltd. (2005), 200 O.A.C. 172, Civil Procedure, Class Actions, Summary Judgment

Facts:

In August 2008, certain Maple Leaf brand ready-to-eat (“RTE”) meats became contaminated with listeria. Some people fell seriously ill and some died after eating the meat. Maple Leaf recalled meats that were produced at the production plant where the infected meat originated. The recall and plant closure affected the supply of two of the RTE meats used by the franchisees of Mr. Submarine Ltd. (“Mr. Sub”). The agreement requires the franchisees to purchase products exclusively from Mr. Sub or sources or suppliers approved by it. Although franchisees may purchase products not previously authorized by Mr. Sub, this may only be done with Mr. Sub’s approval. The franchisees did not buy the RTE meats directly from Maple Leaf. Instead, Maple Leaf dealt with distributors who, in turn, dealt with the franchisees. The franchisees would place their orders with, and be invoiced by, the distributors. Similarly, the distributors would place their orders with Maple Leaf and, in turn, be invoiced by Maple Leaf.

A class action was certified on behalf of Mr. Sub franchisees against Maple Leaf Foods Inc. and Maple Leaf Consumer Foods Inc. (collectively “Maple Leaf”). The representative plaintiff, 1688782 Ontario Inc., claims damages on the basis that Maple Leaf: (a) negligently manufactured and supplied potentially contaminated meat; and (b) negligently represented that the supplied meats were fit for human consumption. There is no evidence that any Mr. Sub customer was harmed by any contaminated product. However, the representative plaintiff alleges that the franchisees suffered economic losses arising in large part from the reputational harm they say they experienced from being publicly associated with Maple Leaf in the aftermath of the listeria outbreak. In particular, the representative plaintiff claims damages for loss of past and future sales, past and future profits, and loss of capital value and goodwill. It also claims damages for clean-up costs and other costs related to the disposal, destruction and replacement of RTE meats.

After certification of the class action, Maple Leaf brought a summary judgment motion seeking dismissal of certain claims on the basis that Maple Leaf owed no duty of care to the class. The representative plaintiff, in turn, asked that summary judgment be granted in its favour. The appeal by Maple Leaf arises from the motion judge’s decision concluding that Maple Leaf owed a duty of care to the franchisees “in relation to the production, processing, sale and distribution of the RTE Meats” and a duty of care “with respect to any representations made that the RTE Meats were fit for human consumption and posed no risk of harm.”

Issues:

(1) Did the motion judge err in finding that Maple Leaf supplied the representative plaintiff with a defective product dangerous to public health?

(2) Did the motion judge err in concluding that this case falls within a recognized duty of care?

(3) Did the motion judge err in failing to consider and properly apply the Anns/Cooper test?

(4) Did the motion judge err in finding that damages for pure economic loss are recoverable in this case?

Holding: Appeal allowed.

Reasoning:

(1) No. Reading the impugned comment in context, the motion judge was saying that there was a risk that the two core menu items could compromise human health, given that they had been produced at the same plant as the tainted products.

(2) Yes. Maple Leaf submitted that the motion judge improperly relied on three decisions to conclude that Maple Leaf’s relationship with the representative plaintiff fell within a recognized duty to supply a product fit for human consumption: PlasTex Canada Ltd. v. Dow Chemical of Canada Ltd., 245 D.L.R. (4th) 650, leave to appeal refused [2004] S.C.C.A. No. 542; 376599 Alberta Inc. v. Tanshaw Products Inc., 2005 ABQB 300; Country Style Food Services Inc. v. 1304271 Ontario Ltd. (2005), 200 O.A.C. 172. Plas-Tex and Tanshaw are said to support the conclusion that a manufacturer has a recognized duty of care to those in its supply chain not to manufacture and provide a product that has become dangerous as a result of negligence.

The motion judge’s summary judgment reasons are not entirely clear on this point, but any ambiguity as to whether the motion judge determined that the relationship between the parties fell within an established category is resolved by the motion judge’s costs ruling. The motion judge concluded that the certification and summary judgment motions did not raise a novel issue of law, noting that “the relationship between the parties fell within a recognized duty of care.”

The motion judge, who did not have the benefit of Livent when she decided this case, improperly relied on Plas-Tex, Tanshaw and Country Style to conclude that Maple Leaf’s relationship with the representative plaintiff fell within a recognized duty of care to supply a product fit for human consumption. The majority in Livent warned that courts should be cautious in finding proximity based upon a previously established or analogous category.

Plas-Tex, Tanshaw and Country Style are readily distinguishable from this case, where it is alleged that Maple Leaf should be held liable for damages for the reputational harm to the franchisees as a result of a recall and their public association with Maple Leaf. As a result, it is necessary to conduct a full Anns/Cooper analysis to assess whether the motion judge’s conclusion that the relationship between Maple Leaf and the franchisees was such that a duty of care to supply fit meat extends to the damages at issue on this appeal is sustainable.

(3) Yes. In concluding that Maple Leaf owed a duty to supply a product fit for human consumption to the representative plaintiff, the motion judge found that the circumstances of the relationship between the representative plaintiff and Maple Leaf were such that Maple Leaf was under an obligation to be mindful of the plaintiff’s legitimate interests in conducting its affairs. The motion judge erred in failing to consider the scope of the proximate relationship or scope of any such duty arising from it.

To the extent there may be a duty to supply meat fit for human consumption, it does not extend to the franchisees’ damages for pure economic loss at issue here. Maple Leaf’s duty of care in tort to supply meat fit for human consumption, a duty which is aimed at protecting human health, was owed to the franchisees’ customers, not the franchisees. The claim advanced against Maple Leaf in this action rests upon an alleged additional and quite different duty owed to franchisees to protect their reputation and pay for any consequent damages for pure economic losses.

The alleged damages are, in large part, a consequence of the public announcement of the recall and resulting publicity. To conclude that Maple Leaf owed a duty of care in tort to the franchisees to protect them against the kinds of damages at issue on this appeal would be to enlarge the duty to safeguard the health and safety of customers by supplying fit meat to include a quite different and added duty to franchisees to protect against reputational harm. To do so would constitute an unwarranted expansion of a duty owed to one class of plaintiffs and extend it to the fundamentally different claim advanced by the franchisees.

The motion judge found that it was “reasonable, appropriate, and foreseeable for consumers to avoid buying food from a restaurant where there had been a food recall arising from problems in the plant of its meat supplier that were not ‘resolved’ for a relatively significant period of time”. However, this finding of reasonable foreseeability is not enough to give rise to a duty of care in tort to the franchisees which can only arise where the foreseeable harm falls within the scope of a proximate relationship. In light of these conclusions, it is unnecessary to address the issue of whether there are any residual policy considerations that would negate the imposition of a duty of care.

In the context of negligent misrepresentation cases, proximity is most usefully considered before foreseeability because “[w]hat the defendant reasonably foresees as flowing from his or her negligence depends upon the characteristics of his or her relationship with the plaintiff, and specifically … the purpose of the defendant’s undertaking”. While Livent affirms that when undertaking a full proximity analysis the court must examine all relevant factors arising out of the relationship between the plaintiff and the defendant, two factors are determinative in the case of negligent misrepresentation – the defendant’s undertaking and the plaintiff’s reliance.

Here, the motion judge found that Maple Leaf ought reasonably to have foreseen that the representative plaintiff would rely on its representation – namely, that the RTE meats were fit for human consumption and posed no risk of harm – and its reliance was reasonable in the circumstances. She noted that the representative plaintiff was within a known and readily identifiable category of persons and that Maple Leaf was the representative plaintiff’s exclusive supplier. Maple Leaf was aware that the RTE meats would be offered for sale to consumers who could be injured if it was unfit. There was an error in failing to consider the scope of the proximate relationship between the parties, which in turn affected the foreseeability analysis.

Maple Leaf undoubtedly undertook – in the context of its contractual relationship with the franchisor – to supply meat safe for human consumption by Mr. Sub customers. The nature or purpose of such an undertaking was to ensure that Mr. Sub customers who ate RTE meats would not become ill or die as result of eating the meats. The purpose of the undertaking was not, however, to protect the reputational interests of the franchisees. The reputational damage said to be sustained by the plaintiff, arising from Maple Leaf’s supply to others and from the recall – aimed at safeguarding health and safety – falls outside the scope of Maple Leaf’s undertaking to the franchisees. Accordingly, the alleged injury was not reasonably foreseeable.

In light of the conclusions on stage one of the Anns/Cooper analysis, it is unnecessary to address residual policy considerations other than to note that the concern about encouraging effective recalls is equally applicable in this context. In conclusion, Maple Leaf’s duty of care with respect to any representations made that the RTE meats were fit for human consumption and posed no risk of harm does not extend to the damages for pure economic loss claimed here.

(4) Not decided. Maple Leaf argues that the motion judge erred in determining that the damages claimed as arising out of economic losses were recoverable. In particular, it says that there can be no claim in negligence for a defective but non-dangerous good, where no personal injury or damage to property was incurred. Given the conclusion that the motion judge erred in her duty of care analysis, it was unnecessary to consider this argument on appeal.

Capcorp Planning (2003) Inc. v. Ontario (Finance), 2018 ONCA 406

[Watt, Pepall and Miller JJ.A.]

Counsel:

L. Patyk and J. DeFreitas, for the appellant

G. Sanders and C. Morris, for the respondent

Keywords: Taxation, Retail Sales Tax, Statutory Interpretation, Failure to Collect and Remit, Unfunded Employee Benefits Plans, Burden of Proof, Retail Sales Tax Act, R.S.O. 1990, c. R. 31

Facts:

The Respondent, Capcorp Planning (2003) Inc. (“Capcorp”), sold an employee health and welfare plan (“HWP”). Some employers found the HWP attractive, especially owner/manager operations where the owner or manager of the corporation was the only employee seeking coverage.

Under Capcorp’s HWP, a participating employer agreed to pay specified expenses incurred by participating employees. When an employee incurred an expense said to be covered by the HWP, the employer submitted a claim and a cheque to Capcorp for the expense claimed and an administrative fee for Capcorp. After a review of the claim, Capcorp determined whether the expense claimed was covered by the HWP. If the claim was covered, Capcorp reimbursed the employee for the expense.

Capcorp did not charge retail sales tax (“RST”) on any amounts employers paid and it received in respect of claims made under the HWP. The Appellant, the Minister of Revenue (“the Minister”), considered that RST was exigible for these amounts, assessed Capcorp accordingly and required Capcorp to pay a penalty of $278,625.31, including interest for failure to collect and remit the RST the Minister considered applicable. The assessment was based on the auditor’s determination that the HWP was a “benefits plan” subject to taxation under the Retail Sales Tax Act, R.S.O. 1990, c. R. 31 (“RSTA”), as amended. Capcorp, by extension, was required to charge, collect and remit RST. Failure to do so rendered the company liable to the penalty assessed.

Capcorp objected, but the Minister affirmed the assessment and penalty.

The appeal judge concluded that the HWP was not a policy of insurance, group insurance, or a funded benefits plan. In his view, the HWP was most akin to an “unfunded benefits plan” for the purposes of the RSTA. He accepted the evidence adduced by Capcorp that most of the employers who enrolled in the HWP could not obtain health insurance that would supplement their OHIP coverage. In the absence of evidence from the Minister to contradict the testimony about the HWP constituency, the appeal judge concluded that since those who enrolled in the HWP would not be able to obtain insurance coverage, they were not required to pay RST on the amount they paid to Capcorp.

Issues:

(1) Did the appeal judge err in his interpretation of the definition of an “unfunded benefits plan” under the RSTA?

(2) In the alternative, did the appeal judge err in in his consideration of the evidence, by prematurely shifting the burden of proof to the Minister, in failing to consider relevant evidence and in misapprehending the nature and sufficiency of Capcorp’s evidence?

Holding: Appeal allowed.

Reasoning:

(1) Yes. Section 2.1(1) of the RSTA, in relevant part, requires that “[e]very person who is resident in Ontario, or who carries on business and Ontario and who:

(a) enters into a contract of insurance with an insurer;

(b) is a person whose risk is covered by group insurance;

(c) is a planholder or member of a benefits plan;

shall pay … a tax at the rate of 8 percent of the premium payable” (emphasis added).

A “benefits plan” is defined under s. 1(1) of the RSTA as a funded benefits plan, an unfunded benefits plan or a qualifying trust. The term “unfunded benefits plan” is exhaustively defined in s. 1(1) to mean:

a plan which gives protection against risk to an individual that could otherwise be obtained by taking out a contract of insurance, whether the benefits are partly insured or not, and where payments are made by the planholder directly to or on behalf of the member of the plan or to the vendor upon the occurrence of the risk. [Emphasis added.]

The court considered whether the term “unfunded benefits plan” included a plan that provides protections generally available under contracts of insurance, but unavailable to specific participants because of their pre-existing medical conditions, or some other reason.

The court stated that it has been long established that there is but one principle or approach to statutory interpretation which is that the words of the statute are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of the enacting legislative body.

In light of these principles, the court held that the HWP is an “unfunded benefits plan” as the term is defined in s. 1(1) of the RSTA, and thus subject to RST, although the plain language within s. 1(1) did not resolve the issue at hand. To reach this conclusion, the court looked to the legislative purpose and found that benefits plans became subject to RST following an amendment to the RSTA: Bill 138, An Act to amend the Retail Sales Tax Act, 3rd Sess., 35th Leg., Ontario, 1994.

Therefore, benefits plans – funded or unfunded – are taxed because the legislature has determined that such plans are substitutes for insurance, and should therefore receive similar tax treatment to contracts of insurance. Crucially, a plan does not cease to be a substitute for a contract of insurance simply because it provides protections above and beyond those that specific plan members could have obtained in the marketplace. The court stated that to hold otherwise would arbitrarily exclude some benefits plans from the scope of s. 1(1), unduly restricting the provision’s reach.

(2) Yes. On the appeal in the Superior Court of Justice, the appeal judge held that Andrew Noseworthy, the Chief Executive Officer of Capcorp, established a prima facie case that planholders – individual owner/managers – could not obtain insurance coverage for the same risks covered by the HWP. Since the Minister had failed to adduce any contrary evidence, the appeal judge quashed the Minister’s assessment.

The court stated that under s. 18(1) of the RSTA, where a vendor has failed to make a return or a remittance as required under the Act, the Minister may make an assessment of the tax collected by the vendor for which the vendor has not accounted and the assessed amount is deemed to be the tax collected by the vendor. Subject to being varied or vacated on an objection or appeal and subject to a reassessment, the Minister’s assessment is deemed to be valid and binding on the taxpayer or vendor: RSTA, s. 18(8). It follows from these statutory provisions that the taxpayer bears the burden of establishing that the factual findings (or assumptions) on which the Minister grounded the assessment are wrong.

The court held that the appeal judge’s error in finding that Capcorp’s evidence constituted a prima facie case that rebutted the assumptions underlying the Minister’s assessment followed from the judge’s error in interpreting the term “unfunded benefits plan” under s. 1(1) of the Act.

The court held that Capcorp’s evidence was general in nature and fell short of establishing a prima facie case that “protection against risk to an individual” including any undertaking to pay, among other things, “for supplemental healthcare, drugs, dental care, vision care, hearing care or for protection against loss of income due to illness or accident…”, could not “otherwise be obtained through contracts of insurance”, on the proper construction of the phrase.

Davis v. East Side Mario’s Barrie, 2018 ONCA 410

[MacFarland, LaForme and Epstein JJ.A]

Counsel:

J. Keenan Sprague, for the appellants

R. Love and E. Vila, for the respondent

Keywords: Torts, Negligence, Slip and Fall, Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A., Civil Procedure, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Rules of Civil Procedure, R.R.O. 1990, Reg. 194

Facts:

The appellant KD, while carrying her newborn baby PD, fell while going down a set of stairs to use a washroom located on the lower level of the respondent’s Barrie premises. KD pleaded “negligence, breach of duty, breach of contract and breach of the Occupiers’ Liability Act, R.S.O. 1990, c. O.2” (the “OLA”) regarding the staircase where the fall occurred. The respondent brought a motion for summary judgment. During the motion the appellant advanced a novel argument alleging that the defendant breached its statutory warranty that its service supplied to the plaintiff would be of reasonably acceptable quality pursuant to the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (“CPA”). The motion judge granted summary judgment on the basis of the record before him and dismissed the appellant’s action “as pleaded” but did so “without prejudice to the plaintiffs to bring a motion to amend their statement of claim to plead the ‘novel questions of law’ described above.”

The parties agreed to an order amending the statement of claim “without prejudice to any of the Defendant’s rights, including but not necessarily limited to the Defendant’s right to bring a further motion for procedural/substantive relief on the grounds that the amendments do not disclose a cause of action, are barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, and otherwise do not disclose a genuine issue requiring trial”.

A second motion for summary judgment followed and proceeded before de Sa J. (the “Second Motion Judge”) and is the subject of this appeal. The Second Motion Judge concluded “In my view, it is essentially an alternative theory of liability for the same complaint…I agree with the Plaintiffs that the Amended Claim does not advance a “new cause of action” for the purposes of the Limitations Act and under normal circumstances an amendment would be permissible under Rule 26.01 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194].” He went on, however, despite the agreement of the parties to argue only the limitation point before him, to conclude that there was no genuine issue for trial.

In light of the agreement of counsel as to the issue to be argued before the Second Motion Judge, this appeal falls to be determined on whether or not the Second Motion Judge erred in concluding that the amendments to the statement of claim did not constitute a new cause of action. The appellants concede that if they do, their claim is statute-barred.

Issues:

(1) Is the CPA claim a new cause of action?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. However, because it is a new cause of action, it is barred by the Limitation Act, 2002.  The original statement of claim pleaded general negligence, breach of duty, breach of contract and breach of the OLA. The focus clearly was on the appellant’s fall down the stairs as the cause of her injuries. The amended claim, on the other hand, is focused on the failure to advise and contains new pleas in support of what the appellants describe as their alternative theory of liability. The original statement of claim focused on the staircase that they alleged was dangerous, inadequately maintained, poorly lit and caused the plaintiff to fall. In the amended claim the plea is very different. The appellant pleads a new duty of care: a duty to advise the appellant of the existence and availability of washroom facilities on the main floor of the restaurant. They argue that provisions of both the OLA and the CPA support these arguments. While the OLA was pleaded in the original statement of claim, it was pleaded in relation to the condition of the staircase. The new claim is a fundamentally different claim based on facts not originally pleaded. It is not mere particulars of the prior claim. The CPA and its relationship with the OLA is a new plea in support of a new cause of action and the Second Motion Judge erred in finding to the contrary. Because the new plea raises a new cause of action, it is statute-barred as it is raised for the first time, long after the two-year period of limitation has expired.

Butler v. Royal Victoria Hospital, 2018 ONCA 409

[LaForme, Epstein and Pardu JJ.A.]

Counsel:

V. Wise and R. Mediratta, for the appellants

G. MacKenzie and B. MacKenzie, for the respondents

Keywords: Torts, Negligence, Medical Malpractice, Causation, Damages, Future Loss of Income, Costs

Facts:

In September 2008, SB was diagnosed with hypotonic cerebral palsy. SB’s condition was caused by hospital nurses’ negligent artificial rupture of her membranes at the birth of her and her twin brother on January 26, 2007. Only at the beginning of the trial did the appellants admit they fell below the standard of care. That admission left the issues of causation and damages to be determined. In particular, the appellants submitted SB’s cognitive and behavioural issues were not entirely caused by the birth injury and that the claims under various heads of damages were excessive.

After a five-and-a-half-week trial, in comprehensive reasons for judgment, the trial judge held that the birth injury was the sole cause of the numerous conditions that were negatively affecting SB. He awarded the respondents $5,568,393 in damages, which included $1,881,846 for future loss of income. The trial judge, in separate reasons for decision, fixed the respondents’ costs in the amount of $2,201,259 inclusive of fees, HST, and disbursements. The fee portion of the costs award totaled $1,503,466.

The appellants submit the trial judge erred in two respects when deciding the issue of SB’s future income loss, namely: (i) his finding that SB would have completed college; and (ii) his approach to contingencies. They also appeal the costs award.

Issues:

  • Did the trial judge err with respect to the award for future loss of income?
  • Did the trial judge err with respect to the issue of costs?

Holding: Appeal dismissed.

Reasoning:

(1) No. First, the trial judge’s finding that there was a real and substantial possibility that SB would have graduated from college, but not university, and would have been employed full-time if it were not for the birth injuries she sustained is entirely reasonable. In making this finding, the trial judge properly weighed the evidence and neither ignored relevant evidence nor failed to consider a relevant factor in a legal test. There was ample evidence before him to support his conclusion that SB probably would have completed college but for the appellants’ negligence. The appellants have failed to demonstrate any reason why the court should disturb his conclusion.

Second, although trial judges are entitled to adjust an award for future loss of income to account for general contingencies—whether upwards or downwards—it is not an error of law for the trial judge to decline to do so: see Graham v. Rourke, 75 O.R. (2d) 622 at p. 636; Gerula v Flores, [1995] O.J. No. 2300, at para. 41. It is certainly arguable that an inference is available that both positive and general contingencies could be drawn from all the evidence: see Beldycki Estate v. Jaipargas, 2012 ONCA 537; Gerula, at para. 41.

While the trial judge based his assessment on the starting point of female average full time earnings to age 65, it was open to him to conclude that temporary absences from the workforce would be offset by benefit programs such as employment or disability insurance.  He was therefore not obliged to make a downward adjustment for non-participation in the workforce.  Calculation of the future loss of income of any child, let alone one born profoundly disabled, is not an exact science.

  • Leave to appeal a costs order will not be granted except in obvious cases where the party seeking leave convinces the court there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion”: Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 OAC 315, at para. 22. The trial judge noted that this case involved more than eight years of litigation leading up to trial, which included days of examinations for discovery, multiple pre-trials, and countless exchanges of correspondence. The trial judge was not required to adopt a weighted average of partial indemnity and substantial indemnity costs. A costs award does not have to be measured with exactitude. Rather, it should reflect a fair and reasonable amount that should be paid by the unsuccessful parties: Zesta Engineering Ltd v. Cloutier (2002), 21 C.C.E.L. (3d) 161..

Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2018 ONCA 412

[MacFarland, LaForme and Epstein JJ.A.]

Counsel:

P. A. Ivanoff and E. Thomas, for the appellant, Iroquois Falls Power Corp.

B. Maynard, for the respondents, Chubb Insurance Company of Canada and American Home Assurance Company

R. Rueter, for the respondents, Jacobs Canada Inc. and McDermott Incorporated

Keywords: Civil Procedure, Dismissal for Delay, Rule 48.14, Rules of Civil Procedure

Facts:

Iroquois Falls Power Corp. (“IFPC”) appeals from the orders of the Superior Court of Justice dismissing its action for delay and awarding costs to the respondents. The action was commenced in 2005. IFPC alleged that the engineering work related to two natural gas turbines at a power generating station was negligently performed. This action was dismissed in March 2007 when the respondents obtained summary judgment. The Court of Appeal allowed IFPC’s appeal, in part.

IFPC then brought a motion to amend its statement of claim, which was dismissed in September 2008. The Court of Appeal overturned that decision in 2009. No further steps have been taken since then to bring the action to trial.

As of January 1, 2017, Rule 48.14(1) now requires the registrar to dismiss all actions in Ontario that were five or more years old and had not been set down for trial. There is no authority for the registrar to order costs. The respondents brought a motion on January 4, 2017, under Rule 24.01(1) to dismiss IFPC’s action for delay and for their costs of the action. IFPC did not dispute that the action should be dismissed for delay but instead brought its own motion to require the court give effect to Rule 48.14(1) and dismiss the action, but without costs. In particular, IFPC took the position that its action should have been dismissed by the registrar on January 1, 2017, pursuant to Rule 48.14(1) with no costs. IFPC, therefore, asked the motion judge for an order, nunc pro tunc, that this action be administratively dismissed effective January 1, 2017.

The motion judge granted the respondents’ motion under Rule 24.01(1) and under the court’s inherent jurisdiction and ordered that the action of IFPC be dismissed for delay. Further, he found that the registrar had acted appropriately in not dismissing the action under Rule 48.14(1). He held that the Rule does not apply to case managed actions, such as this one. The motion judge declined IFPC’s request to grant an order under the Rule, nunc pro tunc dismissing the action effective January 1, 2017.

Issue: In dismissing the action for delay under Rule 24, did the motion judge fail to recognize that the “new regime” that has been ushered in by the legislature under Rule 48.14 takes precedence over Rule 24?

Holding: Appeal dismissed.

Reasoning:

Rule 48.14 does not take precedence over Rule 24.01, nor does it oust the jurisdiction of the court from dealing with any action that is subject to dismissal by the registrar under Rule 48.14.

There is no hierarchy as between Rule 24.01 and Rule 48.14. Each of the Rules simply provide a different means that may lead to the dismissal of the plaintiff’s action for delay. There is nothing in the language of Rule 48.14 to even suggest an intention that the jurisdiction of the registrar to issue an administrative order under Rule 48.14 takes precedence over the jurisdiction of the court.

Non-compliance with a rule is an irregularity and a court “may grant all necessary amendments or other relief, on such terms as are just” and where “necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part”: Rule 2.01(1). Thus, rather than Rule 48.14 ousting the jurisdiction of the court in favour of the registrar, the court’s paramount jurisdiction is manifestly recognized.

992548 Ontario Inc. v. 8657181 Canada Inc., 2018 ONCA 416

[MacFarland, LaForme and Epstein JJ.A.]

Counsel:

P. Starkman, for the appellant

J. McNulty, for the respondent

J. Masterman, for LH Golf Group Inc.

Keywords: Real Property, Mortgages, Civil Procedure, Default Judgments, Setting Aside, Relief from Forfeiture, Winters v. Hunking, 2017 ONCA 909

Facts:

The appellant, 8657181 Canada Inc., mortgaged property it owned to the respondent, 992548 Ontario Inc. The appellant defaulted on the mortgage and the respondent obtained a default judgment for foreclosure. This is an appeal from the dismissal of the appellant’s motion to set aside the judgment and for relief from forfeiture with respect to the default under the mortgage.

Issues:

(1) Did the motion judge err in dismissing the appellant’s motion to set aside the judgment?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellant’s argument is based on the court’s recent decision in Winters v. Hunking, 2017 ONCA 909, decided after the motion judge’s reasons were released. The appellant argues that the motion judge erred by not considering the importance of the windfall the respondent would realize in the context of the appellant’s circumstances if the default foreclosure judgment were to stand.

This case is very different from Winters v. Hunking. The appellant did not provide any evidence relating to its investment, appraised value, or the portion of the purchase price allocated to the land in the original purchase. There is no evidentiary foundation for the respondent’s claim that the property is undervalued. No consideration of windfall is possible without evidence.

It is important to emphasize that setting aside a default judgment for foreclosure is exceptional relief, and the outcome in Winters v. Hunking turns on its facts. The motion judge’s decision was discretionary and entitled to deference. The issue is whether a decision whether to set aside a default judgment for foreclosure is whether the equities in favour of the mortgagor outweigh those in favour of the mortgagee or – to the same effect, adopting the language pertaining to setting aside default judgments, generally – whether the decision to set aside the order leads to a just result in all the circumstances.

Beaver v. Hill, 2018 ONCA 415

[Brown J.A. (Motions Judge)]

Counsel:

A. Lokan, for the responding party

M. McCarthy, for the moving party

Keywords: Civil Procedure, Motions, Interim Costs, Cross-Examination on Affidavits, Orders, Breach, Re Ferguson and Imax Systems Corp. (1984), 47 O.R. (2d) 225 (Div. Ct.), Dickie v. Dickie, 2007 SCC 8

Facts: The applicant Mother filed an affidavit in support of her motion for advance (interim) funding in respect of the appeal of the respondent, the father, from the order of Chappel J. dismissing his challenge to the jurisdiction of Ontario courts to adjudicate Mother’s claims against him for custody, child support, and spousal support. The Father wants to cross-examine the Mother on her affidavit, which she opposes.

The Father identifies the areas on which he wants his counsel to cross-examine: (i) her retainer agreement with her counsel; (ii) payments she has made to counsel; (iii) efforts she has made to obtain legal funding from other sources; (iv) the amount she is prepared to contribute to fund her response to the appeal; and (v) the basis for her request for $100,000 in interim costs.

Issue:

(1) Should the Father be permitted to cross-examine the Mother on her affidavit submitted in support of her motion seeking interim costs?

Reasoning:

(1) No. Two competing principles are at play in respect of the Father’s request for an order compelling the Mother to attend for cross-examination on her affidavit. On the one hand, there is a prima facie right of a party to cross-examine an affiant. However, the court retains an inherent power to control its own process. Consequently, in cases where it appears to be in the interests of justice, a court may refuse to permit such cross-examination or restrict its scope: Re Ferguson and Imax Systems Corp. (1984), 47 O.R. (2d) 225 (Div. Ct.). On the other hand, a court may decline to entertain a request by a party to invoke its assistance where the party is not in compliance with an order of the court: Dickie v. Dickie, 2007 SCC 8.

In the present case, the Father has not complied with the an order for disclosure (Disclosure Order). He has not made any documentary production, nor has he served an affidavit explaining why he cannot or when he will. While the Father is seeking to vary the Disclosure Order, but that does not change the fact that he has not complied with it. Full and prompt financial disclosure is a key element of Ontario’s family law regime. The failure to comply with court-ordered disclosure is a most serious matter. Given these circumstances, the motion judge was not prepared to accede to the Father’s request for an order compelling the Mother to attend for cross-examination on her affidavit.

College of Physicians and Surgeons of Ontario v. Peirovy, 2018 ONCA 420

[Rouleau, Benotto and Roberts JJ.A.]

Counsel:

W. Niels, F. Ortved, D.M. Porter, and J. Katz, for the appellant

E. Widner and R. Ainsworth, for the respondent

Keywords: Administrative Law, Regulated Professions, Doctors, Professional Discipline, Standard of Review, Reasonableness, Penalty, R. v. Chase, [1987] 2 S.C.R. 293

Facts:

This decision is an appeal from the order of the Divisional Court, reversing a decision of the Ontario College of Physicians and Surgeons Discipline Committee.

The appellant, Dr. P, was found guilty of professional misconduct by the Discipline Committee of the College of Physicians and Surgeons (“the Discipline Committee”). He appeals from the order of the Divisional Court, which overturned the penalty imposed on him by the Discipline Committee, and remitted the penalty decision to the Discipline Committee for reconsideration.

The Divisional Court allowed the College’s appeal. While acknowledging that the Discipline Committee’s decision on penalty was subject to deference, the Divisional Court determined that the penalty imposed was unreasonable on the bases submitted by the College.

Dr. P was granted leave to appeal the Divisional Court’s decision. He submits that it should be set aside and the Discipline Committee’s penalty be reinstated.

Decision Below – Liability

In the liability phase of the hearing, the Discipline Committee heard from the various complainants and Dr. P. The allegations included claims that while examining patients with a stethoscope, he cupped patients’ breasts, touched patients’ nipples, placed his stethoscope directly on patients’ nipples and in one instance “tweaked” or squeezed a patient’s nipple.

The Discipline Committee accepted the evidence of the four complainants as to the inappropriateness of the touching, finding that their description of what had occurred was inconsistent with a misunderstanding. The Discipline Committee concluded that the allegations had been made out, that the touching was deliberate and that there was no consent from the patients or clinical reason for Dr. P to have touched them in that manner.

Relying on the Supreme Court of Canada’s decision in R. v. Chase, [1987] 2 S.C.R. 293, the Discipline Committee concluded that, even in the absence of a finding as to Dr. P’s motivation, a finding of sexual abuse could be made where the touching in question was objectively a violation of a patient’s sexual integrity.

The Discipline Committee therefore found Dr. P guilty of sexual abuse in relation to the four patients. In each case, the abusive conduct consisted of medically unnecessary touching of the breast or nipples of the patients during medically required chest examinations conducted using a stethoscope.

The Discipline Committee also found that Dr. P had asked a fifth patient out on a date immediately following his medical examination of her during which her breasts were exposed. While not found to be sexual abuse, that conduct, as well as the four sexual abuse incidents, constituted disgraceful, dishonourable and unprofessional conduct.

The Discipline Committee was also informed that Dr. P had pleaded guilty to simple assault of two of the complainants in relation to these same incidents. These convictions, for which Dr. P received a conditional discharge, were considered relevant to his suitability to practice. The Discipline Committee also considered these convictions to be professional misconduct.

Decision Below – Penalty

The Discipline Committee accepted the expert evidence of Dr. Rootenberg that Dr. P did not meet the diagnostic criteria for psychopathology or sexual deviance, which, he testified, is relevant with respect to relapse and prevention. The Discipline Committee also accepted the expert evidence that the risk of Dr. P re-offending by committing further sexual transgressions in the future was low.

Dr. Martin’s expert evidence was relevant to the issues of remediation and risk management that the Discipline Committee was required to consider in determining the appropriate penalty. She highlighted deficits in Dr. P’s interactive skills with patients that give rise to the same risk factors of misunderstanding by patients outlined by the experts who testified at the liability hearing. However, the Discipline Committee also accepted Dr. Martin’s opinion that Dr. P had made good progress in remedying the deficits identified while working with him from August 2013 to June 2015.

The Discipline Committee then explained that the fact that four patients had been subjected to sexual abuse in fairly close succession was an aggravating factor. Based on the expert evidence, it declined however to infer that this was indicative of “predatory intent or uncontrollable deviant urges on Dr. P’s part”. It is at this point that the Discipline Committee posited another possible inference that could explain why there were four patients abused in close succession:

Another possible inference is that this pattern reflects a physician who was genuinely and completely unaware of the ways in which his behaviour in relation to his patients was, in fact, abusive.

It is this quote that the Divisional Court cites as demonstrating that the Discipline Committee made an unreasonable finding that contradicted the findings it made at the liability stage.

The Discipline Committee ultimately suspended Dr. P’s licence for six months. He was ordered to submit to a reprimand, and required to pay $64,240 for the victims’ therapy costs and $35,680 in costs of the proceedings. He was also ordered to continue undergoing individualized instruction with Dr. Martin focused on consent, boundaries, and doctor-patient communications, and to complete a clinical education program focused on physical examinations.

A number of restrictions were also imposed on Dr. P’s return to practice, such as being prohibited from engaging in any encounter with female patients except under the supervision of a practice monitor approved by the College.

Issues:

(1) Did the Divisional Court err in concluding that the Discipline Committee made inconsistent findings of fact warranting intervention?

(2) Did the Divisional Court err in determining that the penalty imposed by the Discipline Committee was manifestly unfit?

Holding: Appeal allowed.

Reasoning:

Majority – Rouleau J.A. and Roberts J.A.

(1) Yes. The court stated that the Divisional Court correctly selected and articulated the reasonableness standard of review. However, the Divisional Court failed to properly apply the reasonableness standard. Instead, it incorrectly substituted its own assessments of the evidence and penalty for those of the Discipline Committee.

The Divisional Court found the Discipline Committee’s penalty decision to be unreasonable because it was based on inconsistent findings of fact. Specifically, it rejected the Discipline Committee’s suggestion that Dr. P’s unawareness as to how his behavior was abusive could possibly explain the abuse of four patients.

This “possible inference” of unawareness drawn by the Discipline Committee was, in the Divisional Court’s view, inconsistent with the finding of fact that there were several offences. More importantly, the inference was considered inconsistent with the Discipline Committee’s finding at the liability stage that Dr. P had touched the complainants in a way that an objective observer would find to be sexual and which the complainants described as “blatantly sexual”.

The court found that there are several problems with the Divisional Court’s concern. First, the Discipline Committee’s finding is well supported by the testimony of the experts. This includes the College’s expert at the liability hearing, who testified that touching a female patient’s nipple with either the hand or the stethoscope during a lung examination should be avoided because it is medically unnecessary and could be misinterpreted. In addition, the finding is supported by the Discipline Committee’s assessment of Dr. P’s testimony. Finally, the Discipline Committee did not, as the Divisional Court suggests, find that Dr. P’s awkward, unskilled and non-empathic manner was the only cause; it simply opined that it was a factor.

The Divisional Court advanced a second basis for rejecting the Discipline Committee’s suggestion that the several counts of sexual abuse could possibly be explained by Dr. P’s genuine and complete unawareness of the ways in which his behaviour was abusive. In the Divisional Court’s view, such an inference is inconsistent with Dr. P having been found guilty of criminal assault on two of the complainants.

The court held that this basis is also flawed. The Discipline Committee’s possible inference is not inconsistent with a finding of guilt for simple assault. Simple assault contemplates an unwanted touching. The Discipline Committee found that Dr. P deliberately touched the complainants in areas that were medically unjustified and that the complainants had not consented to the touching. This is sufficient to support the simple assault convictions. A sexual motivation need not be proven to support a conviction for simple assault.

Thus, the court held that while the Divisional Court chose the correct standard of review, it erred in its understanding of the evidence and of the reasons of the Discipline Committee, and it effectively sought to retry the case in a manner inconsistent with the proper application of the standard of review.

(2) Yes. The court stated that there were several reasons why the Divisional Court’s analysis was flawed regarding the issue of whether the Discipline Committee imposed an unfit penalty.

First, it misunderstood the Discipline Committee’s reasons and misapplied the reasonableness standard of review. As the Divisional Court properly stated, “a penalty decision of such a tribunal is at the heart of its discretion and is due great deference”. Nevertheless, the Divisional Court in effect simply substituted its view of what might constitute an appropriate penalty and did not defer to the Discipline Committee’s decision as was required. Furthermore, the penalty imposed was not manifestly unfit but represented the Discipline Committee’s careful consideration of all relevant factors and was within the range of reasonable outcomes.

To be overturned by a reviewing court, the Discipline Committee must have made an error in principle or the penalty must be “clearly unfit”. To be clearly unfit, the penalty must fall outside of the range of reasonableness. The Discipline Committee considered a number of its previous decisions involving the sexual abuse of patients. The factual scenarios in those cases were, like the present case, disturbing. However, they showed that the penalty imposed on Dr. P was in line with those that have been imposed in Ontario.

The penalty imposed by the Discipline Committee was carefully tailored to the circumstances of this case, and fit comfortably within the range of penalties imposed in other similar or more serious cases of sexual abuse of patients. It was based on forensic psychiatric evidence accepted by the Discipline Committee as well as the evidence it heard during the liability phase. It also took into account the progress shown by Dr. P in addressing some of the concerns. Further, following the lodging of the complaints, Dr. P had practiced with supervision for about five years without any incident.

Thus, the court allowed the appeal and restored the penalty imposed by the Discipline Committee.

Benotto J.A., dissenting, agreed with the majority that the correct standard of review was applied, but did not agree that the Divisional Court erred in its application. She would have dismissed the appeal.

Rahaman v. Fiscia, 2018 ONCA 418

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

H. Sarros, for the appellants

J. R. Smith, for the respondents

Keywords: Contracts, Real Property, Debtor-Creditor, Civil Procedure, Applications, Rules of Civil Procedure, Rule 2.01

Facts:

The appellants appeal from the judgment of the application judge who ordered them to pay to the respondents the sum of $120,000.

The parties are two individuals and their respective corporations. They had entered into an agreement by which the appellants were to sell a property to the respondents. Concurrent with these events, the appellants had borrowed the sum of $120,000 from the respondents. Those monies were to be repaid through the closing of the sale of the property.

The sale of the property did not go according to plan. The first agreement of purchase and sale for the property was not completed. A second agreement of purchase and sale was entered into. At the same time, the appellant, F, signed an acknowledgment of the $120,000 loan on behalf of himself and his company. Some weeks later, F alone signed a promissory note respecting the $120,000 loan. This promissory note stipulated that $40,000 was to be applied as a deposit on the sale of the property and the remaining $80,000 was to be paid on the closing of the sale.

This sale of the property was also not completed, at least in part because the $40,000 was never paid by the appellants. The respondents brought an application seeking the return of the $120,000. The application judge granted that relief. In doing so, he rejected the position of the appellants that the entire sum of $120,000 was a deposit on the sale of the property and, since that transaction did not close, the appellants did not have to repay that amount since the deposit was forfeited.

Issues:

(1) Did the application judge err in granting relief to the respondents?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court saw no error in the conclusion reached by the application judge. The evidence clearly established that the $120,000 was a loan that was to be repaid by the appellants, either through the sale of the property or directly, if the sale was not completed. Neither the loan acknowledgment nor the promissory note referred to the $120,000 as being a deposit.

The court also agreed with the application judge that it would have been better for this matter to have proceeded as an action upon which a summary judgment motion could have been brought. It was not the type of issue that ought have been dealt with by way of application. However, like the application judge, in the particular circumstances of this case, especially the lack of any real factual dispute, the court found that any technical error in the procedure followed was insufficient to undermine the result: Rule 2.01 of the Rules of Civil Procedure.

Yasin v. Ontario, 2018 ONCA 417

[Strathy C.J.O., Roberts and Paciocco JJ.A.]

Counsel:

J. Currie, for the appellant

A. Armstrong, for the respondent

Keywords: Administrative Law, Vital Statistics Act, R.S.O. 1990, c. V.4, Jurisdiction, Remedies, Declarations, Civil Procedure, Necessary and Proper Parties

Facts:

The appellant brought an application in the Superior Court of Justice, naming Her Majesty the Queen in Right of the Province of Ontario as the respondent. He sought a declaration that his date of birth is January 1, 1951, rather than November 5, 1955. His application was dismissed.

In a brief endorsement, the application judge stated, without elaborating, that: (a) Her Majesty the Queen in Right of Ontario (“Ontario”) was not a proper party to the application; (b) the Superior Court of Justice has no jurisdiction to make the order sought; and (c) the appellant failed to prove his true date of birth, given his inconsistent statements.

It is not entirely clear what “inconsistent statements” the judge was referring to. Counsel for Ontario maintained that the application judge was correct: it is not a proper party to the proceeding because the only relevant Ontario statute is the Vital Statistics Act, R.S.O. 1990, c. V.4, which deals with the registration of births in Ontario or on board ships registered in Ontario. The Vital Statistics Act expressly does not apply to births outside Ontario. Ontario took no position on the substantive issues or merits of the appeal.

Issues:

(1) Did the application judge err by dismissing the application on the basis that Ontario was not a proper party?

(2) Should the Court of Appeal exercise its inherent jurisdiction to grant declaratory relief in this case?

Holding: Appeal dismissed.

Reasoning:

(1) No. In the absence of any request for relief that would affect Ontario, or any demonstrated interest of Ontario in the proceeding, the application judge properly dismissed the application.

(2) No. One would have thought that there was some administrative route available, short of a proceeding in the Court of Appeal, to either correct the birth date shown on the appellant’s Canadian identity documents or to satisfy Canada Revenue Agency of the appellant’s correct date of birth to enable him to obtain CPP benefits. Counsel did not point the court to any such mechanism. In the absence of more specific evidence as to how this matter has developed, it cannot be determined whether the appellant’s proper route is through administrative channels, judicial review or an application in the Superior Court for directions or other relief, including declaratory relief.

On a proper record, and with the proper parties before it, the court may have jurisdiction to make a declaration of the appellant’s birth date to enable him to obtain CPP benefits. Her Majesty the Queen in Right of Canada, represented by the Attorney General of Canada, would be a proper party to such proceedings. A proper record would include: (a) a statement by the appellant, under oath, setting out the reasons for seeking the order; (b) the disclosure of any public or other records that would be affected by the order; and (c) any other matter that could be affected by the order. This would enable the court to consider the implications of the order and to identify any other parties, which could include the Province of Ontario, who should receive notice of the application.

Jackson v. Stephen Durbin and Associates, 2018 ONCA 424

[Benotto, Brown and Miller JJ.A.]

Counsel:

S. Dewart and S. Bentley-Jacobs, for the appellant

M. G. Cochrane, for the respondent

Keywords: Contracts, Solicitor and Client, Illegality, Contingency Fee Agreements, Family Law, Solicitors Act, R.S.O. 1990, c. S. 15, s. 28.1(3)(b)

Facts:

The sole issue on appeal was whether a “Results Achieved Fee” charged by the appellant law firm in a family law matter is a prohibited contingency fee agreement under the Solicitors Act, R.S.O. 1990, c. S. 15 (the “Act”)

The respondent retained the appellant to represent him in family law litigation. The primary issue was the custody of the respondent’s 6-year old daughter. The respondent signed a retainer agreement outlining hourly rates, daily fees for court appearances and an automatic yearly increase of 15% with respect to those fees. The retainer agreement also provided for “an increase in fees in the event of a positive result achieved (“Results Achieved Fee”).  The respondent was awarded sole custody, half the proceeds of the sale of the matrimonial home and costs of $192,000. The appellant received $423,510.47 in trust representing the respondent’s share of the proceeds of sale from the matrimonial home plus the costs award. The appellant deducted $132,597.74 from the trust to satisfy the outstanding account. The appellant also unilaterally deducted a Results Achieved Fee of $72,433.24. It is unclear on the record how the appellant arrived at this amount. The trial judge concluded that the agreement at issue was a contingency fee agreement since, under the plain terms of the agreement, the solicitor would receive no fees for his services unless an amount was recovered.

Issues:

(1) Is the “Results Achieved Fee” for a family law matter a contingency fee agreement that is prohibited by the Act?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. The Act was amended in 2004 to include the phrase “contingent, in whole or in part” on a successful outcome. Consequently, a premium or bonus added on to a lawyer’s fee is captured by the meaning of contingency fee agreement and is thus prohibited by s. 28.1(3)(b) of the Act. The Court of Appeal concluded that a contingency fee agreement is an agreement under which any part of a lawyer’s compensation is tied to the successful resolution of the matter for which the lawyer was retained. Section 28.1(3)(b) of the Act prohibits contingency fee agreements in respect of family law matters. Therefore, the Results Achieved Fee was prohibited by the Act.

Criminal Decisions:

R v. Forcillo, 2018 ONCA 402

[Strathy C.J.O., Doherty and Trotter JJ.A.]

Counsel:

M. Lacy, J. Wilkinson and B. Badali, for the appellant

H. Leibovich, S. Reid and M. Perlin, for the respondent

Keywords: Criminal Law, Attempted Murder, Defences, Lawful Use of Force, Criminal Code, s. 25, Self-defence, Criminal Code, s. 34, Fresh Evidence, Palmer v. The Queen, [1980] 1 S.C.R. 759, Sentencing, Mandatory Minimum Sentences, Canadian Charter of Rights and Freedoms

R v. Roberts, 2018 ONCA 411

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

G. Lafontaine, for the appellant

M. Fawcett, for the respondent

Keywords: Criminal Law, Impaired Driving Causing Bodily Harm, Evidence, Credibility, Canadian Charter of Rights and Freedoms, sections 8 and 10(a)

R v. Ahmed, 2018 ONCA 426

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

J. Foy, for the appellant

A. Derwa, for the respondent

Keywords: Criminal Law, Fraud, Breach of Trust, Sentencing, Denunciation and Deterrence, Principle of Restraint, Parity Principle, R. v. Lacasse, 2015 SCC 64

Short Civil Decisions:

Sub-Prime Mortgage Corporation v. Cedeno, 2018 ONCA 408

[Strathy C.J.O., Watt and Epstein JJ.A.]

Counsel:

D. Paul, for the appellant

G. E. Cohen, for the respondent

Keywords: Real Property, Mortgages, Default Judgments, Fresh Evidence

Albanese v. Franklin, 2018 ONCA 431

[MacPherson, Hourigan and Benotto JJ.A.]

Counsel:

M. A. Hoy, for the appellant

M. Cruickshank, for the respondents

Keywords: Unlawful Arrest, R. v. Lohnes, [1991] 1 S.C.R. 167

Correia v. Pinto, 2018 ONCA 382

[Hourigan, Benotto and Fairburn JJ.A.]

Counsel:

S. Mandalagiri, for the appellant

E. Upenieks and A. Kwok, for the respondents

Keywords: Appeal Book Endorsement, Trial List

Chinese Publications for Canadian Libraries Ltd. v. Markham (City), 2018 ONCA 413

[Doherty and Pepall JJ.A. and Gray J. (ad hoc)]

Counsel:

Q. Li Cao, for the plaintiff (appellant)

D. G. Boghosian and M. Fish, for the defendants (respondents)

Keywords: Civil Procedure, Summary Judgment, Procedural Fairness, Costs

2363523 Ontario Inc. v. Nowack, 2018 ONCA 414

[Rouleau, Pardu and Paciocco JJ.A.]

Counsel:

P. Slansky, for the moving party

N. Groot, for the responding party

Keywords: Civil Procedure, Security for Costs, Evidence of Impecuniosity

Caron c. Perrier, 2018 ONCA 422

[Les juges Rouleau, van Rensburg et Pardu]

Counsel:

A. Bluteau, for the appellant

J. Guindon, for the respondent

Keywords: Procédure Civile, Ordonnances, Outrage au Tribunal, Fraude

Caron c. Perrier, 2018 ONCA 423

[Les juges Rouleau, van Rensburg et Pardu]

Counsel:

A. Bluteau, for the appellant

J. Guindon, for the respondent

Keywords: Procédure Civile, Motion, Remise de L’Appel, Contre-Interrogatoire