ONTARIO COURT OF APPEAL SUMMARIES (FEBRUARY 12 – FEBRUARY 16)

Good Evening,

Below are this week’s Court of Appeal summaries. Topics covered this week included family law (equalization of pension and child abduction), slip and falls, false arrest and wrongful imprisonment, commercial tenancies (whether changing locks constitutes termination of lease leading to wrongful distraint), civil procedure in the bankruptcy context (leave to an undischarged bankrupt to commence a third party claim) and breach of contract (in the context of a distribution arrangement).

I would like to remind all our readers that you are invited to attend the Top Appeals of 2017 CLE that my partner, Lea Nebel and I will be co-chairing with Justice Epstein of the Court of Appeal. We already have almost 50 people registered to attend in person and online, and hope you can join us!

The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place on Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case will be heard by the Supreme Court in the coming months. Counsel on that matter, David M. Smith and Jeremy Opolsky, have agreed to participate in our panel discussion.

The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the “appropriate means” analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists. The law in this area is continuing to evolve.

The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has certainly received the attention of the plaintiffs’ personal injury bar and the media and has, no doubt, been a catalyst behind the Law Society’s efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

I hope everyone enjoys the Family Day long weekend!

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

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

Table of Contents

Lakehead Roofing & Metal Cladding Ltd. v. 1304808 Ontario Inc., 2018 ONCA 129

Keywords: Real Property, Commercial Tenancies, Distraint, Commercial Tenancies Act, R.S.O. 1990, c. L.7, Rays Outfitters v. Lixo Investments, 2014 ONSC 3884

Luckevich v. Ivany, 2018 ONCA 144

Keywords: Bankruptcy and Insolvency, Civil Procedure, Third Party Claims, Bankruptcy and Insolvency Act, ss. 2, 31, 69, 71 & 178

Cana International Distributing Inc. v. Standard  Innovation Corporation, 2018 ONCA 145

Keywords: Contracts, Execution in Counterparts, Quantum Meriut, Defamation, Qualified Privilege

Fawcett v. Fawcett, 2018 ONCA 150

Keywords: Family Law, Net Family Property, Equalization, Pensions, Lump-Sum Payments, Periodic Payments, Pension Benefits Division Act, S.C. 1992, c. 46, Sch. II, Family Law Act, R.S.O. 1990, c. F.3, Canadian Forces Superannuation Act, R.S.C. 1985, c. C-17, Garnishment, Attachment and Pension Diversion Act, R.S.C. 1985, c. G-2

Kidanemariam v. Toronto (City), 2018 ONCA 167

Keywords: Torts, Negligence, Municipal Liability, Failure to Maintain Sidewalk, Summary Judgment, City of Toronto Act, 2006, S.O. 2006, s. 42(3)

Fleming v. Ontario, 2018 ONCA 160

Keywords: Torts, False Arrest, Wrongful Imprisonment, Excessive Use of Force, Constitutional Law, Aboriginal Law, Public Safety, Breach of Peace, Caledonia Conflict, Charter Damages

Gourgy v. Gourgy, 2018 ONCA 166

Keywords: Family Law, Divorce, Child Abduction, Jurisdiction, Hague Convention, Habitual Residence, Acquiescence, Burden of Proof

For Short Civil Decisions click Here.

For Criminal Decisions click Here.

For Ontario Review Board Decisions click Here.

Civil Decisions

Lakehead Roofing & Metal Cladding Ltd. v. 1304808 Ontario Inc., 2018 ONCA 129

[Feldman, MacPherson and Huscroft JJ.A.]

Counsel:

D B Shanks and R Carlino, for the appellant

R W Johansen, for the respondent

Keywords: Real Property, Commercial Tenancies, Distraint, Commercial Tenancies Act, R.S.O. 1990, c. L.7, Rays Outfitters v. Lixo Investments, 2014 ONSC 3884

Facts:

The appellant was a commercial tenant in Thunder Bay, Ontario. The respondent was the landlord. The tenant sought a declaration under the Commercial Tenancies Act, R.S.O. 1990, c. L.7 (the “Act”), that: (i) the landlord had wrongfully and illegally distrained assets and equipment of the tenant after terminating the tenancy by changing the locks; or (ii) the distraint was excessive.

The tenant’s position was that its application could be granted based on the application record. The landlord’s position was that a trial was required to resolve one or more of the factual issues. The application judge found that: (i) terminating the lease was neither the intent of the landlord nor the effect of changing the locks, and therefore the lease was not terminated before the distraint; and (ii) a trial was necessary to determine whether the distraint was excessive, including the amount of any rent that remained owing, and the value of the distrained equipment. He also found that proof of any tenant’s damages also required a trial.

The appellant submitted that the application judge erred in concluding that: (i) the landlord’s notices and actions did not have the effect in law of terminating the lease before the distraint; and (ii) a trial was needed to find excessive distraint, when the values attributed to the distrained equipment by both parties exceeded the rent that remained owing.

Issues:

  • Did the application judge err in finding that the lease had not been terminated and therefore that the distraint was legal?
  • Did the application judge err in concluding that there was insufficient evidence to find that the distraint was excessive?

Holding:

Appeal dismissed.

Reasoning:

  • The appellant submitted that, pursuant to Rays Outfitters v. Lixo Investments, 2014 ONSC 3884, the test to determine whether the changing of the locks terminated the lease is whether the intended and actual effect of changing the locks was to exclude the tenant from the premises, thereby terminating the lease. It argues that in his reasons, the application judge looked only at the written notice, which said that access would be given to the tenant on request, and did not consider or give effect to evidence that in fact the landlord denied access to the tenant on a number of occasions. The Court of Appeal rejected this submission. Both sides submitted affidavit evidence regarding the changing of the locks. While it is true that the application judge did not address the alleged denial of access specifically, the Court of Appeal found that it could be inferred that he did not consider it significant enough to have the effect in law of terminating the lease. Therefore this finding was reasonable.
  • The appellant submitted that both its and the respondent’s estimates of the value of the chattels and equipment being held in distress exceed the value of the rent arrears that remain outstanding. The application judge found the record unclear on the issue of the amount of rent in arrears, or even whether there was any rent in arrears. He also was well aware of the estimated values ascribed by the parties to the equipment and chattels, but because they were merely estimates, he was not prepared to make findings without proper evidence of value. He concluded that proof of damages by the tenant also required a trial. The Court of Appeal found that the application judge could not be faulted for his disposition. He was able to make a determination on the record before him “in a summary way” on the first issue, whether the landlord had terminated the lease by changing the locks. However, the parties did not present sufficient evidence for him to determine the amount of rent that remained outstanding, if any, the value of the goods and equipment that had been distrained, and any damages suffered by the tenant if the distraint was excessive.

Luckevich v. Ivany, 2018 ONCA 144

[Doherty, Paciocco and Nordheimer JJ.A.]

Counsel:

Michael Katzman, for the appellant

Howard W. Reininger, for the respondents

Tim Duncan, for the Trustee in Bankruptcy

Keywords: Bankruptcy and Insolvency, Civil Procedure, Third Party Claims, Bankruptcy and Insolvency Act, ss. 2, 31, 69, 71 & 178

Facts:

In April of 2016, Howard Ivany (“the appellant”) was examined for discovery. The appellant says that during the examination it became clear to him, for the first time, that the respondents were seeking damages against him for actions or omissions of Reiber.

The appellant wished to commence a third party claim in each action against Reiber for contribution and indemnity. He took steps to obtain the consent of the respondents to issue the third party claims. The respondents refused to consent. The appellant then brought a motion for leave to issue the third party claims against Reiber and to extend the time for so doing.

The motion judge found that the appellant could not pursue the third party claims because he is an undischarged bankrupt and thus has no capacity to dispose of or otherwise deal with his property pursuant to s. 71 of the BIA. Consequently, she dismissed the appellant’s motion.

Issues:

(1) Did the motion judge err in dismissing the appellant’s motions for leave to issue third party claims?

Holding: Appeal allowed.

Reasoning:

(1) Yes. Precluding the bankrupt from bringing a claim for contribution and indemnity, in light of the Trustee’s refusal to do so, leaves the situation that the bankrupt could be faced with a judgment for the entire amount due to the respondents, that will come out of his or her estate, with no ability to reclaim some portion of that amount from another person who contributed to the loss. Not only does that result work to the detriment of the bankrupt, it also works to the detriment of all creditors who would otherwise share in the benefit that would result from a reduction (or possible elimination) of any judgment that the respondents might obtain. That result becomes even more egregious in a situation, such as this, where the respondents are seeking to have their claims declared to come within s. 178 of the BIA. If that relief is granted, then the appellant, once discharged, still has the judgment to honour and yet has no ability to then claim the contribution due to him by the third party. The inequity of that result is obvious.

Cana International Distributing Inc. v. Standard  Innovation Corporation, 2018 ONCA 145

[Laskin, Sharpe and Fairburn JJ.A.]

Counsel:

S Laubman and L M Wagner, for the appellants

P Mantas and T Khoury, for the respondent

Keywords: Contracts, Execution in Counterparts, Quantum Meriut, Defamation, Qualified Privilege

Facts:

The appellant, Cana International Distributing Inc. (“Cana”), is a distributor of adult sexual health and wellness products. Cana and the respondent, Standard Innovation Corporation (“SIC”), had extensive discussions relating to the distribution of SIC’s toy called the We-Vibe. These discussions involved two streams of distribution. The first was the mainstream industry targeting retail outlets such as food and drug stores. The second was the adult industry, also referred to as the “sex toy industry”. The appellants assert that separate agreements were reached giving them exclusive distribution rights for the We-Vibe in both streams. The trial judge rejected both contractual claims, finding that no binding agreement was reached for either stream.

Additionally, after the breakdown of the parties’ relationship, the appellant wrote a lengthy letter to Health Canada alleging that it had received 100 to 150 letters complaining of defects and safety concerns with respect to several We-Vibe products. The trial judge found that these statements to Health Canada were ill-founded and awarded SIC damages for defamation. The trial judge refused to consider the defence of qualified privilege.

Issues:

(1) Did the trial judge err in finding that there was no mainstream industry agreement reached between Cana and SIC for exclusive rights to distribute SIC’s We-Vibe product?

(2) Did the trial judge err in finding that there was no adult-industry agreement reached between Cana and SIC for exclusive rights to distribute SIC’s We-Vibe product?

(3) Did the trial judge err by failing to consider the appellant’s alternate claim for quantum meruit?

(4) Did the trial judge err by refusing to deal with the defence of qualified privilege to the respondent’s defamation counterclaim?

Holding: Appeal allowed, in part.

Reasons:

(1) Yes. The trial judge erred in finding no mainstream industry agreement. The terms of the agreement were negotiated by Nelson Wood, president of SIC, and Micheline Ciolli, owner and president of Cana. On August 18, 2009, they exchanged emails requesting signatures on a written “term sheet”.  Wood asked Ciolli to sign the signature page and fax it back and stated “I will sign and fax back a copy to you.” He added “I look forward to growing the mainstream market with you” and noted “[n]ow we can do a term sheet for the Sex Toy Industry.” Ciolli signed the term sheet and mailed it as requested. Wood was away from the office at the time but on September 22, 2009, returned by email a scanned signature page of what he described as “our mainstream agreement”.

Internal SIC emails and memoranda indicate that SIC was proceeding on the basis of a concluded agreement. Both parties conducted themselves in this manner until their relationship broke down in May 2010. Cana performed its obligations as exclusive distributor, secured new customers and dealt with warranty claims. In November 2009, SIC notified its Canadian customers that Cana was the exclusive distributor for the We-Vibe in Canada. SIC and Cana issued a joint press release to the same effect.

In his reasons for judgment, the trial judge described the August – September 2009 email exchange and the signing of the term sheet in the following way: “[A]t best, the two separate signed copies were two unique offers, neither having been accepted by the other party. This is evidenced by subsequent negotiation of their intended agreement.” At para. 124 he stated: “The emails of August and September 2009, referring to a signed copy of the agreement, evidence, at best, two distinct offers, neither of which was accepted by the other party. Moreover, the parties continued to negotiate the terms of this agreement.” These findings reflect both a palpable and overriding error and an extricable error of law. The trial judge’s characterization of the August and September 2009 exchange of emails as an exchange of “two unique offers” cannot be reconciled with the evidence. There were not “two unique offers” but rather two copies of the same document signed in counterpart by both parties. If the basis for the trial judge’s finding was that by signing in the way they did, the parties had not reached an agreement, he made an extricable error of law by ignoring the legal doctrine that an agreement signed in counterparts is a binding agreement.

(2) No. The trial judge did not err in finding that no agreement was reached for the adult-industry stream. The parties exchanged and discussed draft terms but Ciolli admitted they never signed an agreement. The draft term sheet they did discuss contained no reference to exclusivity. The trial judge recognized that the absence of a written agreement is not necessarily fatal, and that the terms of an oral agreement may be sufficiently clear and identifiable to establish an agreement, but concluded that in the present case, there were “too many conflicting documents and emails going back and forth over a lengthy course of time that create significant uncertainty.”

(3) No. The argument advanced on appeal was not made at trial and, in any event, is supported by the record. SIC did agree to reimburse Cana for certain expenses. Cana invoiced SIC for those expenses and SIC paid the invoice.

(4) No. It would take a strained reading of the facts pleaded in the reply and defence to counterclaim to discern a defence of qualified privilege. Moreover, even if the pleading were sufficient, the trial judge made the following finding: “The evidence demonstrates that the statements made are false and were timed and intended to cause harm to Standard Innovation and the sale of its products.”

Fawcett v. Fawcett, 2018 ONCA 150

[Rouleau, Trotter and Paciocco JJ.A.]

Counsel:

P. Pantel, for the appellant
F. F. Black, for the respondent

Keywords: Family Law, Net Family Property, Equalization, Pensions, Lump-Sum Payments, Periodic Payments, Pension Benefits Division Act, S.C. 1992, c. 46, Sch. II, Family Law Act, R.S.O. 1990, c. F.3, Canadian Forces Superannuation Act, R.S.C. 1985, c. C-17, Garnishment, Attachment and Pension Diversion Act, R.S.C. 1985, c. G-2

Facts:

The appellant has a Canadian Forces pension with a commuted value of $747,200. The pension has matured and the appellant is receiving monthly payments. To satisfy an equalization payment of $313,002, the trial judge ordered that a lump sum of this amount be transferred to the respondent. The appellant appeals this decision and requests to pay the respondent on a monthly basis by having her pension payments split at source.

Issues:

(1) Did the trial judge err in determining that the Pension Benefits Division Act only allows for a lump-sum division?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellant’s Canadian Forces pension entitlement derives from the Canadian Forces Superannuation Act, R.S.C. 1985, c. C-17 (“CFSA”). The PBDA governs the division of CFSA pensions as well as pensions granted under many other federal statutes. The PBDA only provides for a lump-sum division of a member’s pension, whether the pension is in pay or not. Section 8 of the PBDA addresses the manner in which the pension is divided and only provides for a one-time transfer of funds into locked-in financial instruments.

The fact that the Garnishment, Attachment and Pension Diversion Act, R.S.C. 1985, c. G-2 permits pension payments to be split at source as family or matrimonial property does not apply in this case. That act only applies to the enforcement of support orders. Financial support orders do not encompass matrimonial property.

There is no federal legislation that clothes the PBDA administrator with the power to split pension payments as a method of dividing family property.

Under the FLA, s. 10.1(5) only allows a judge to order one form of division of pension payments, either lump-sum or pension payments, not both. Section 10.1(3) creates a general power to order an immediate lump-sum division. The combined operation of these two sections allow for the following options: before the pension is in pay, only a lump-sum division is available; once the pension is in pay, a judge may choose between the two options depending on all the circumstances of the case and guided by s. 10.1(4) of the FLA. This interpretation of the FLA is necessary in order to avoid frustration of the PBDA which applies to pensions created by many federal statutes.

Kidanemariam v. Toronto (City), 2018 ONCA 167

[Hourigan, Roberts and Nordheimer JJ.A.]

Counsel:

N P Kapelos, for the appellants

E D Farrell, for the respondent

Keywords: Torts, Negligence, Municipal Liability, Failure to Maintain Sidewalk, Summary Judgment, City of Toronto Act, 2006, S.O. 2006, s. 42(3)

Facts:

The appellant, Selome Walelenge, sustained injuries when walking in front of a building located at 8 Wellesley Street East, Toronto. Ms. Walelenge testified that she veered briefly off the concrete sidewalk and walked on an adjoining narrow strip that was covered with paving stones. She said that as she was walking on the strip, she felt as if she was pushed.  Her foot landed on a section of the strip that was missing a paving stone.  Ms. Walelenge then fell to the sidewalk and suffered injuries.

Ms. Walelenge brought an action in negligence against the City, alleging that it failed to maintain the sidewalk in order to make it safe for pedestrian use. Her husband and daughter asserted Family Law Act, R.S.O. 1990, c. F.3 claims.

The City brought a motion for summary judgment relying on the defences contained in s. 42(3) of the City of Toronto Act, 2006, S.O. 2006, c.11, Sch. A. The motion judge held that the City did not know, and could not reasonably have been expected to have known, about the alleged state of non-repair, given that it was not revealed in its annual walking inspection or in its twice weekly road patrols.  There was also no record of complaint about the area. The motion judge further found that the City took reasonable steps to prevent the default from arising. Accordingly, he concluded that the defences in s. 42(3)(a) and (b) of the Act were available to the City.

Issues:

(1) Did the motion judge err in his application of the summary judgment rule and/or misconstrue the evidence?

Holding: Appeal dismissed.

Reasons:

(1) No. The motion judge carefully considered the evidence from the City that it undertook reasonable steps to prevent any default or state of non-repair from arising. That evidence was essentially unchallenged and the motion judge therefore made no error in finding that the City could avail itself of each of the defences in s. 42(3)(a); (b) and (c) of the City of Toronto Act. Those defences are a complete answer to the appellants’ claims. There was no need for a trial in these circumstances.

Fleming v. Ontario, 2018 ONCA 160

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

Judie Im, Erin Rizok and Sean Hanley, for the appellants

Michael Bordin and Jordan Dicacur, for the respondent

Keywords: Torts, False Arrest, Wrongful Imprisonment, Excessive Use of Force, Constitutional Law, Aboriginal Law, Public Safety, Breach of Peace, Caledonia Conflict, Charter Damages

Facts:

On May 24, 2009, the respondent attended an event held by protestors opposed to the occupation of Douglas Creek Estates (“DCE”) in Caledonia at a private residence. The respondent had a Canadian flag with him. It was his intention to walk north on Argyle Street and watch a Canadian flag being raised at the entrance of DCE.

The respondent began walking north on the west shoulder of Argyle Street, with his Canadian flag. Two Alpha Support Squad police vehicles, and the Offender Transport Unit, spotted the respondent and turned around to approach him.

The respondent saw the approaching vehicles. The officers commanded him to stop. As the vehicles moved onto the shoulder of Argyle, he left the shoulder and continued walking down into a grassy ditch, over a low fence and onto DCE. The respondent’s entry onto DCE caused an immediate reaction from the DCE protesters at the front entrance of DCE. They became angry and upset.

Officer Miller followed the respondent over the fence and told him that he was under arrest to prevent a breach of the peace in accordance with O.P.P. policy. He then took the respondent’s right arm and escorted him over the low fence and off DCE. Officer Miller and some of the other appellant officers instructed the respondent to drop his flag and flag pole, as they viewed the flag pole as a potential weapon.

A struggle ensued. The respondent and some of the officers went to the ground. Eventually, the officers wrested the Canadian flag from the respondent’s hands and handcuffed him. Prior to the handcuffing, however, the respondent says that one of the officers yanked his left arm up behind his back. This action resulted in a serious injury to the respondent’s left elbow leaving him with what was later determined to be a permanent chronic pain condition.

The trial judge concluded that the respondent was falsely arrested and wrongfully imprisoned and that his rights under the Canadian Charter of Rights and Freedoms were violated. She awarded general damages of $80,000; damages for false arrest, wrongful imprisonment and breach of right to pass of $10,000; special damages of $12,986.97; and damages for breach of the respondent’s s. 2(b) Charter rights of $5,000. She declined to award aggravated or punitive damages.

The police appealed. The respondent cross-appealed.

Issues:

(1) Did the police have the authority to arrest the respondent for a breach, or an anticipated breach, of the peace?

(2) If so, did the police use excessive force in effecting the arrest?

Holding: Appeal allowed. Cross-appeal dismissed.

Reasoning:

(1) Yes. There is no doubt that the respondent was entitled, in normal circumstances, to walk along a public street carrying a Canadian flag. He was also entitled to participate in “political action” and to participate in a protest about the ongoing activities on DCE. The respondent was not entitled to engage in any of these activities, however, if his actions would likely lead to a breach of the peace. There are constraints on the exercise of any person’s rights and one of those constraints is where the exercise of a right will lead to a breach of the peace or other public safety concerns.

There is a long history of problems in the Caledonia area, including a long history of violent confrontations over Indigenous land claims. This was well-known to the O.P.P., who are responsible for policing the area and for maintaining public safety and order.

For reasons that are unclear, the trial judge held that the events of May 24, 2009, were not “Aboriginal Critical Incidents” as defined in the Aboriginal Framework. The Court of Appeal disagreed, stating that it is difficult to see how they could be reasonably characterized as anything else. The principal event was a planned flag raising directly across from the entrance to DCE that would undoubtedly lead to a reaction from the DCE protestors. As the Aboriginal Framework expressly notes, its purpose is to address such events before they become a problem.

As part of the Operational Plan, a “buffer zone” between the factions was an entirely legitimate one. Police have the authority to create such zones for proper purposes in order to carry out their duties. The Court found that the actions of the O.P.P. officers were being undertaken in order to avoid a breach of the peace and they were effective at doing that. The respondent was removed from the area without any further issue and without any further disturbance or confrontation with the DCE protestors.

The police had reasonable grounds to believe that there was an imminent risk to the public peace, and a substantial risk of harm to the respondent, that justified their decision to arrest the respondent. The trial judge’s holding to the contrary is fundamentally flawed and cannot stand. A new trial was ordered.

(2) The evidence before this court was insufficient to make those key determinations. As a result, a new trial on these issues was required to permit those factual determinations to be made.

Gourgy v. Gourgy, 2018 ONCA 166

[Sharpe, Watt and Benotto JJ.A.]

Counsel:

S Philbert, for the appellant

S Boulby and K Fishman, for the for the respondent

Keywords: Family Law, Divorce, Child Abduction, Jurisdiction, Hague Convention, Habitual Residence, Acquiescence, Burden of Proof

Facts:

This appeal concerns two related applications brought by the father of a six year old boy. The parties moved to the United States in 2012, first to California and then to Texas. The mother came back to Ontario from time to time with the father’s consent. On October 30, 2016, she came to Ontario with the child in order to visit her family and to work the necessary 15 days so that she could keep her status as a teacher in Ontario. She did not return. In November, she sent the father a text that she had filed for divorce.

The father sought his return to Texas pursuant to the Hague Convention and also sought to dismiss the mother’s Ontario divorce application for lack of jurisdiction. Both applications were allowed and the mother appealed.

Issues:

  • Did the application judge err in his application of the Hague Convention?

Holding:

Appeal dismissed.

Reasoning:

  • The Hague Convention requires that a child wrongfully removed or retained by a parent shall be promptly returned to the habitual residence unless the other parent has acquiesced in the removal pursuant to art. 13(a) or the return will place the child in an intolerable situation pursuant to art. 13(b).  With respect to habitual residence, the mother submitted that the application judge erred when he stated that there was no minimum amount of time necessary to establish habitual residence. In that regard, she relied on conflicting lower court decisions on this point. She also alleges that the child could not be returned to Texas because the father had no “custody” right in Texas, having moved there only six weeks earlier from California. The Court of Appeal disagreed. The question of habitual residence is one of fact. It is the location where the parents demonstrated a settled intention to reside. The application judge considered the parents’ move to the United States, the subsequent move to Texas; the fact that they obtained principal residence status; applied for US social security; bought a house and enrolled the child in school. On this basis, it was open to him to find that the parents had a settled intention to reside in the United States.
  • The burden is on the parent alleging acquiescence or an intolerable situation to demonstrate it. The application judge reviewed the evidence and determined that the mother had not met her burden in this respect. The Court of Appeal found no reason to interfere with this finding of fact.

Short Civil Decisions

Royal Bank of Canada c. Poulin, 2018 ONCA 155

[Les juges Sharpe, Rouleau et Benotto]

Conseiller Juridique:

Maryse Poulin, en personne

James Riewald, pour l’intimée

Mots Clés: Procédure Civile, Droits Linguistiques, Mauvais Fois

Criminal Decisions

R. v. Perera, 2018 ONCA 130

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

No one appearing for the appellant

Hannah Freeman, for the respondent

Keywords: Criminal Law, Endorsement, Appeal Abandoned

R. v. Powell, 2018 ONCA 131

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Derek Powell, appearing in person

Grace Choi, for the respondent

Keywords: Criminal Law, Endorsement, Findings of Fact, Appeal Dismissed

R. v. D.D., 2018 ONCA 134

[Feldman, Brown and Fairburn JJ.A.]

Counsel:

Robert Carew, for the appellant

Lisa Joyal, for the respondent

Keywords: Publication Ban, Criminal Law, Aggravated Assault, Assault with a Weapon, Sexual Assault, Unlawful Confinement, Failing to Provide the Necessaries of Life, Sentencing, Evidence, Mitigating and Aggravating Factors, Appeal Dismissed

R. v. Williams (Publication Ban), 2018 ONCA 138

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A.]

Counsel:

Howard L. Krongold, for the appellant

Rebecca De Filippis, for the respondent

Keywords: Publication Ban, Criminal Law, Sexual Assault, Assault, Break and Enter, Consent, Evidence, Credibility, Similar Fact Evidence, Sentencing, Appeal Allowed in Part

R v. Akpan, 2018 ONCA 137

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Ubong Michael Akpan, appearing in person

Delmar Doucette, duty counsel

Deborah Calderwood, for the respondent

Keywords: Publication Ban, Criminal Law, Endorsement, Evidence, Credibility, Appeal Dismissed

R v. Buchanan, 2018 ONCA 151

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Robert W. Buchanan, in person

Howard L. Krongold, duty counsel

Victoria Rivers, for the respondent

Keywords: Criminal Law, Endorsement, Probable Cause, Appeal Dismissed

R v. Carlson, 2018 ONCA 157

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Shaun Joseph Carlson, acting in person

Lorna Bolton, for the respondent

Howard Krongold, duty counsel

Keywords: Publication Ban, Criminal Law, Endorsement, Sexual Assault, Evidence, Appeal Dismissed

R v. Constant-Booth, 2018 ONCA 154

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Anthony Constant-Booth, acting in person

Deborah Calderwood, for the respondent

Robert B. Carew, duty counsel

Keywords: Criminal Law, Endorsement, Aggravated Assault, Sentencing, Appeal Dismissed

R v. Goulbourne, 2018 ONCA 153

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Christopher Goulbourne, in person

Howard L. Krongold, duty counsel

Deborah Calderwood, for the respondent

Keywords: Criminal Law, Endorsement, Robbery, Evidence, Appeal Dismissed

R v. Hall, 2018 ONCA 143

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Edward Hall, acting in person

Hannah Freeman, for the respondent

Danielle Robitaille, duty counsel

Keywords: Criminal Law, Endorsement, Evidence, Appeal Dismissed

R v. Lillie, 2018 ONCA 133

[Feldman, Paciocco and Fairburn JJ.A.]

Counsel:

Paul Alexander, for the appellant

Davin Michael Garg, for the respondent

Keywords: Publication Ban, Criminal Law, Appeal Dismissed

R v. Manasseri, 2018 ONCA 136

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Charlie Manasseri, appearing in person

Delmar Doucette, duty counsel

Susan Magotiaux, for the respondent

Keywords: Criminal Law, Endorsement, Evidence, Testimony of Accused, Appeal Dismissed

R v. McIntosh, 2018 ONCA 142

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Shawn D. McIntosh, acting in person

Grace Choi, for the respondent

Erika Chozik, duty counsel

Keywords: Criminal Law, Endorsement, Criminal Harassment, Breach of Recognizance, Pointing a Firearm, Appeal Dismissed

R v. McConnell, 2018 ONCA 135

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Todd A. McConnell, appearing in person

Robert Goddard, duty counsel

Lorna Bolton, for the respondent

Keywords: Criminal Law, Endorsement, Evidence, Fresh Evidence, Appeal Dismissed

R v. Reyes, 2018 ONCA 156

[Watt J.A. (In Chambers)]

Counsel:

Althea Reyes, in person

Andrea Baiasu, for the respondent

Keywords: Criminal Law, Breach of Recognizance, Bench Warrant, Criminal Code, ss. 650, ss. 784(1), ss. 812(1)(a), Appeal Dismissed

R v. Saikaley, 2018 ONCA 152

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Salim Saikaley, acting in person

Lorna Bolton, for the respondent

Delmar Doucette, duty counsel

Keywords: Criminal Law, Endorsement, Criminal Harassment, Breach of Recognizance, Breach of Probation, Guilty Plea, Sentencing, Appeal Dismissed

R v. Watts, 2018 ONCA 148

[MacPherson, Huscroft and Trotter JJ.A.]

Counsel:

Lawrence Watts, in person

Xenia Proestos and Yael Pressman, for the respondent

Keywords: Criminal Law, Endorsement, Fraud, Search Warrant, Sentencing, Appeal Dismissed

R v. Hussain, 2018 ONCA 147

[Sharpe, Roberts and Fairburn JJ.A.]

Counsel:

Jennifer Penman, for the appellant

Michael Perlin and Jennifer Epstein, for the respondent

Keywords: Criminal Law, Possession of a Firearm, Evidence, Reasonableness, Sentencing, Charter of Rights and Freedoms, ss. 7, Pre-Sentence Custody, Appeal Dismissed

R v. Meads, 2018 ONCA 146

[Sharpe, Roberts and Fairburn JJ.A.]

Counsel:

Michael Perlin and Jennifer Epstein, for the appellant

Erec Rolfe and Ruchira Kulkarni, for the respondent

Keywords: Criminal Law, Sentencing, Pre-Sentence Custody, Criminal Code, ss. 719(3.1), Charter of Rights and Freedoms, ss. 7, Bail Misconduct Exclusion, R. v. Safarzadeh-Markhali, 2016 SCC 14, Appeal Dismissed

R v. Syed, 2018 ONCA 161

[Hoy A.C.J.O., Simmons and Pardu JJ.A.]

Counsel:

Michael A. Crystal, for the appellant

Helena Solin, for the respondent

Keywords: Criminal Law, Possession of Narcotics, Appeal Dismissed

Ontario Review Board Decisions

Campbell (Re), 2018 ONCA 140

[Laskin, Trotter and Fairburn JJ.A.]

Counsel:

Michael Davies and Meaghan McMahon, for the appellant

Angela Campbell Barbara Walker-Renshaw and John McIntyre, for the respondent the Person in Charge of the Royal Ottawa Mental Health Centre

Rachel Young, for the respondent the Attorney General of Ontario

Keywords: Ontario Review Board, Not Criminally Responsible, Mental Disorder, Criminal Code, ss. 672.56(2), Appeal Dismissed

Conway (Re), 2018 ONCA 139

[Rouleau, Watt and Brown JJ.A.]

Counsel:

Suzan E. Fraser and Sarah Harland-Logan, for the appellant, Paul Conway

Avene Derwa, for the respondent, Her Majesty the Queen (“Ontario”)

Janice Blackburn, for the respondent, the Person in Charge of the St. Joseph’s Healthcare Hamilton

Keywords: Ontario Review Board, Adjournments, Canadian Charter of Rights and Freedoms, ss. 7, ss. 9, Appeal Dismissed

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.

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ONTARIO COURT OF APPEAL SUMMARIES (FEBRUARY 5 – FEBRUARY 9)

Good afternoon,

Below are this week’s Court of Appeal summaries. Topics included Medmal, breach of contract, and several procedural decisions.

We have summarized a criminal decision this week,  R v. Blackett. The Court of Appeal set aside a guilty plea of manslaughter that came about following faulty medical opinions by Dr. Charle Smith on the cause of death.

I hope everyone is enjoying this snowy weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

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

Table of Contents

Zigomanis v. 2156775 Ontario Inc. (D’Angelo Brands), 2018 ONCA 116

Keywords: Contracts, Termination, Morals Clause

Taylor v. Workplace Safety & Insurance Board, 2018 ONCA 108

Keywords: Torts, Misfeasance in Public Office, Odhavji Estate v. Woodhouse, 2003 SCC 69, Bad Faith, Employment Law, Workplace Safety and Insurance Benefits, Civil Procedure, Striking Pleadings, Jurisdiction, Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A, s. 123, Pagourov v. Science Application International Corp., 2007 ONCA 745, Abuse of Process, No Reasonable Cause of Action

Trez Capital Limited Partnership v. Bernstein, 2018 ONCA 107

Keywords: Civil Procedure, Summary Judgment, Viva Voce Evidence, Findings of Fact, Orders, Declarations, Appeals from Orders not Reasons, Limitation Periods, Issue Estoppel

St. Amand v. Tisi, 2018 ONCA 106

Keywords: Contracts, Consensus Ad Idem, Fresh Evidence, Due Diligence

 

Carleton Condominium Corporation 116 v. Sennek, 2018 ONCA 118

Keywords: Civil Procedure, Vexatious Litigants, Lang Michener Lash Johnston v. Fabian (1987), 59 O.R. (2d) 353 (Ont. H.C.)

Kueber v. Royal Victoria Regional Health Centre, 2018 ONCA 125

 

Keywords: Torts, Negligence, Medical Malpractice, Defamation, Summary Judgement, Negligence

Lee v. McGhee, 2018 ONCA 128

Keywords:  Civil Procedure, Striking Pleadings, Jurisdiction, Human Rights Code

For Short Civil Decisions click Here.

For Criminal Decisions click Here.

For Ontario Review Board Decisions click Here.

Civil Decisions

Zigomanis v. 2156775 Ontario Inc. (D’Angelo Brands), 2018 ONCA 116

[LaForme, Rouleau and Paciocco JJ.A.]

Counsel:

Gregory N. Hemsworth, for the appellant

David A. Whitten and Simone Ostrowski, for the respondent

Keywords: Contracts, Termination, Morals Clause

Facts:

In May 2011, the appellant, 2156775 Ontario Inc., carrying on business as D’Angelo Brands (“D’Angelo”), entered into a promotional contract with professional hockey player Michael Zigomanis. Mr. Zigomanis was on a two-way contract with the Toronto Maple Leafs at the time. The promotional contract provided that Mr. Zigomanis would receive periodic payments in the minimum amount of $200,000 over four years, provided he exercised unilateral extension options available to him.

The contract contained a “morals clause” which read in material part that D’Angelo could terminate the contract if the “athlete commits any act which shocks, insults, or offends the community, or which has the effect of ridiculing public morals and decency”.

In February 2012, D’Angelo purported to terminate the contract. The basis for termination was the internet publication of nude photographs of Mr. Zigomanis that Mr. Zigomanis had sent his then girlfriend, prior to signing the contract. D’Angelo claimed that this event violated the morals clause and undermined Mr. Zigomanis’s positive image as a “brand ambassador”, depriving D’Angelo of what it had bargained for.

Mr. Zigomanis sued successfully for wrongful termination of the contract. The trial judge held that according to the terms of the contract, Mr. Zigomanis agreed to promote D’Angelo’s product, not serve as a brand ambassador. The trial judge also held that the morals clause was not offended by the private transmission of nude photographs within a relationship, and that, in any event, this act occurred before the contract was entered into and the morals clause is not retrospective.

The trial judge also accepted Mr. Zigomanis’s testimony that Mr. Zigomanis intended to exercise his option to continue with the contract for four years. The trial judge therefore awarded damages in the amount of $162,500, representing the outstanding periodic payments provided for over the four years of the contract.

Issues:

Did the trial judge err in finding that D’Angelo wrongfully terminated Mr. Zigomanis’ contract and allowing Mr. Zigomanis to exercise his option to continue with the contract for four years?

Holding: Appeal dismissed.

Reasoning:

No. The court did not accept D’Angelo’s argument that the trial judge accepted that the community was shocked by Mr. Zigomanis’ conduct. The court stated that Mr. Zigomanis’ understandable, subjective desire to suppress publication of the photographs and to distance himself from them was evidence only of his desire for privacy, not of the community’s reaction. Furthermore, the widespread public interest that was generated by the photographs says nothing about the community reaction to Mr. Zigomanis’ act in sharing those photos only with an intimate party.

Thus, the court held that the trial judge’s conclusion that the community conscience would not be shocked was reasonable.

Taylor v. Workplace Safety & Insurance Board, 2018 ONCA 108

[Laskin, Huscroft and Paciocco JJ.A.]

Counsel:

P Taylor, acting in person

J-D Be’lec and J Clarke, for the respondent WSIB

A Lokan and D McKenna, for the respondent WSIAT

Keywords: Torts, Misfeasance in Public Office, Odhavji Estate v. Woodhouse, 2003 SCC 69, Bad Faith, Employment Law, Workplace Safety and Insurance Benefits, Civil Procedure, Striking Pleadings, Jurisdiction, Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A, s. 123, Pagourov v. Science Application International Corp., 2007 ONCA 745, Abuse of Process, No Reasonable Cause of Action

Facts:

In 1997, the appellant, Paul Taylor, was injured on the job while unloading a large shipment of goods from a tractor trailer. Over the last 20 years he has been litigating over his Workplace Safety & Insurance Board benefits. He has had numerous hearings before the Board, and brought various appeals before the Workplace Safety & Insurance Appeals Tribunal. Some of his claims have been accepted; some have not.

In February 2014, Taylor started an action against both the Board and the Tribunal. In his amended statement of claim, he sought “compensatory damages” of $1,710,455, broken down into various categories of benefits, as well as punitive damages of $15 million. Both the Board and the Tribunal brought motions to dismiss Taylor’s claim for lack of jurisdiction and alternatively, to strike his pleadings on the ground that they disclosed no reasonable cause of action. In lengthy reasons, the motion judge granted their motions. The main basis for his decision was that Ontario’s Superior Court of Justice does not have jurisdiction to grant relief against the respondents in a civil action. Relief against the Board and the Tribunal must be sought on judicial review.

Issues:

  • Did the motion judge err in dismissing Taylor’s claim for lack of jurisdiction?
  • Did the motion judge err either by striking Taylor’s pleadings as failing to disclose a reasonable cause of action for “bad faith” or misfeasance in public office, or by refusing to grant Taylor leave to amend his statement of claim?

Holding:

Appeal dismissed.

Reasoning:

  • The essence of Taylor’s claim against the Board is that the Board treated him unfairly and denied him the benefits and treatment to which he was entitled. The essence of Taylor’s complaint against the Tribunal is that the Tribunal did not treat him fairly in the hearing process, that the Tribunal’s decision was wrong and should be reversed, and that the Tribunal and its members committed various torts against him. In substance, these complaints are about the decisions made and the process used by the Tribunal and Board in determining Taylor’s entitlement to benefits. Section 123 of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A provides that “[a]n action or decision of the Appeals Tribunal under this Act is final and is not open to question or review in a court. “ In accordance with the decision in Pagourov v. Science Application International Corp., 2007 ONCA 745, an attempt to circumvent the statutory scheme for the determination of benefits by a civil action, as Taylor has attempted, amounts to an abuse of process. Thus this ground of appeal was dismissed.
  • The motion judge struck Taylor’s amended statement of claim in its entirety, as the allegations it contained did not amount to torts recognized in law. At the hearing of the motions, Taylor alleged that the bad faith conduct of the Board and Tribunal described in his amended statement of claim amounted to the tort of misfeasance in public office. On appeal, Taylor argued in substance that his amended statement of claim appropriately pleads the “tort of bad faith” and, when read generously, also discloses a cause of action for misfeasance in public office. He contends that the allegations in his pleadings make out the tort of misfeasance in public office on either of two grounds: the bad faith denial of his claims for benefits; and the improper comments and conduct of a Tribunal member.

With respect to the first claim, a government official’s bad faith conduct is not independently actionable. The law does not recognize a stand-alone action for bad faith.

With respect to the second claim, the motion judge was correct to hold that Taylor’s amended statement of claim does not assert a cause of action for the tort of misfeasance in public office. This tort redresses unlawful conduct in the exercise of public functions. The Supreme Court in Odhavji Estate v. Woodhouse, 2003 SCC 69 found that this tort requires (1) a “public officer must have engaged in deliberate and unlawful conduct in his or her capacity as a public officer”; and (2) “the public officer must have been aware both that his or her conduct was unlawful and that it was likely to harm the plaintiff.” None of Taylor’s claims satisfy these elements and thus his pleadings do not disclose a reasonable cause of action.

Trez Capital Limited Partnership v. Bernstein, 2018 ONCA 107

[Strathy C.J.O., Hourigan and Miller JJ.A.]

Counsel:

Peter H. Griffin and Christopher Yung, for the appellants, Dr. Stanley Bernstein, DBDC West Mall Holdings Inc., 2272551 Ontario Limited, and DBDC Global Mills Ltd.

Sabrina Waraich, for the appellants, Norma Walton, Ronauld Walton, West Mall Holdings Ltd. and Global Mills Inc.

Irving Marks and Dominique Michaud, for the respondents, Trez Capital Limited Partnership, Trez Capital (2011) Corporation and Computershare Trust Company of Canada

Keywords: Civil Procedure, Summary Judgment, Viva Voce Evidence, Findings of Fact, Orders, Declarations, Appeals from Orders not Reasons, Limitation Periods, Issue Estoppel

Facts:

The appellants, Stanley Bernstein and his companies, appeal from the order of the motion judge dismissing their motion for summary judgment. They had moved to dismiss the action commenced by the respondents on the basis that it is statute-barred by operation of the Limitations Act, 2002.

Dr. Bernstein was involved in a business relationship with Norma and Ronauld Walton, who operated The Rose & Thistle Group Ltd. (“Rose & Thistle”). Dr. Bernstein and the Waltons agreed to invest jointly in various commercial real estate projects. Ultimately, Dr. Bernstein invested approximately $110 million in 31 such projects. Each project was held in a separate corporation in which Dr. Bernstein was a 50% shareholder and the Waltons were 50% shareholders (the “project corporations”). The Waltons were responsible for managing and supervising the projects and arranging financing.

The respondent, Trez Capital Limited Partnership (“Trez”), is a commercial lender. It financed four of the projects jointly owned by Dr. Bernstein and the Waltons. For each loan, the Waltons falsely represented to Trez that they were the beneficial owners of 100% of the shares of the relevant project corporation. In an email (“The Resignation Email”), Ms. Walton suggested that Dr. Bernstein temporarily resign his position as a director from Wynford Professional Centre Ltd. (“Wynford”), one of the project corporations that were borrowing from Trez at the time. After loan funds were advanced to Wynford, Dr. Bernstein was immediately reinstated as a director of the corporation.

James Reitan, the then Director of Accounting and Finance at Dr. Bernstein Diet & Health Clinics, had concerns with respect to the Waltons’ management of the projects. At Mr. Reitan`s request, Ms. Walton emailed Gaetano Coscia of Trez and asked for a return email confirming that the Global Mills mortgage was in good standing. Mr. Coscia emailed Ms. Walton and confirmed that the Global Mills mortgage was in good standing. That email was forwarded to Mr. Reitan and Dr. Bernstein.

Mr. Reitan called Mr. Coscia on September 13 to follow up on the status of the Mortgage. The parties to the September 13 Call gave very different evidence about what took place on the call, which was the critical issue for determination on the motion below. Mr. Reitan testified that during the September 13 Call he revealed Dr. Bernstein’s 50% interest in Global Mills. The evidence of Mr. Coscia regarding the September 13 Call is markedly different. In his affidavit he stated that at no time during the September 13 Call did Mr. Reitan reveal Dr. Bernstein’s ownership interest. Dr. Bernstein filed an affidavit in which he swore that he told Mr. Reitan to contact Mr. Coscia and that he did not instruct Mr. Reitan to withhold information about his ownership interest in Global Mills. At trial, Dr. Bernstein testified that he told Mr. Reitan to advise Trez who they were and he said that they discussed telling Trez that he was a 50% shareholder.

Given the conflicting evidence about the September 13 Call, the motion judge ordered a mini-trial on the issue. Dr. Bernstein, Mr. Reitan and Mr. Coscia all gave viva voce evidence. The motion judge preferred the evidence of Mr. Coscia to that of Dr. Bernstein and Mr. Reitan. He dismissed the motion for summary judgment and made a finding that the limitation period had not expired prior to the issuance of the respondents’ statement of claim.

 Issues:

(1) Did the motion judge make findings that went beyond what was required to determine the motion.

(2) Did the motion judge make palpable and overriding errors of fact in his analysis of whether Dr. Bernstein’s ownership interest was revealed during the September 13 Call.

(3) Did the motion judge err when he found that the claim was not discoverable even if the ownership interest was revealed during the September 13 Call.

(4) Did the motion judge err  in finding it was not appropriate for Trez to commence an action until it was known whether its security would be sufficient to pay the mortgage loans.

Holding: Appeal dismissed.

Reasons:

(1) No. The appellants submit that there was a substantive finding regarding Dr. Bernstein’s participation in the misrepresentation to Trez, which was inconsistent with the motion judge’s statement that he would not make any substantive findings of fact. Consequently, they argue that their position at trial has been prejudiced. The motion judge’s statement was made in the context of a discussion about findings impacting defendants who were not participating in the motion for summary judgment, and the statement should be read in context.

The credibility of the parties regarding the September 13 Call was the critical issue for determination on the motion for summary judgment. There was no suggestion that if the appellants failed on their motion that they would have the ability to re-litigate the issue at trial. The motion judge noted, “The parties agree that this procedure is sufficient and capable and that there is a sufficient record for a binding finding of fact to be made as to what took place during the telephone call and for a finding of whether the action is statute-barred.”

The appellants made a tactical decision to bring a motion for summary judgment on the basis that would inevitably require the court to make a credibility assessment of both Dr. Bernstein and Mr. Reitan. They cannot assert that they were taken by surprise that the motion judge made detailed factual findings in doing so. The motion judge was tasked with determining what took place on a call, which occurred over three and a half years earlier, for which there were no contemporaneous notes or subsequent written confirmation. In determining what was said on that call, he was obliged to consider all of the surrounding evidence and draw appropriate inferences. That is precisely what he did, including with regard to Dr. Bernstein’s knowledge of Ms. Walton’s misrepresentation.

Having made the findings he did, the motion judge did not err in finally determining the limitation period issue. The appellants’ limitation defence centered on the disclosure they say was made by Mr. Reitan on the September 13 Call. That evidence was not accepted. It would be contrary to the purpose of the summary judgment rule to afford the appellants another opportunity at trial to persuade the trial judge that their evidence should be accepted. The motion judge’s order only dismisses the motion for summary judgment and declares that the respondents’ claim is not barred by operation of the Limitations Act, 2002.  It is well settled law that it is impermissible to appeal the reasons that underlie an order or judgment: Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2015 ONCA 718, 340 O.A.C. 271, at para. 13; MacKinnon v. Ontario (Municipal Employees Retirement Board), 2007 ONCA 874, 88 O.R. (3d) 269, at para. 44.

(2) No. The motion judge did not make any palpable and overriding errors. However, the motion judge did make two minor factual errors in his credibility analysis. He erred when referring to the consideration of the Resignation Email in an earlier decision in litigation among Dr. Bernstein, the Waltons and various other parties. The motion judge mistakenly stated that he authored the earlier decision when, in fact, it was a decision of D.M. Brown J. However, that error is of no moment, as the reference to the earlier decision was clearly obiter and was made to explain why the motion judge was reaching a different conclusion on the significance of the Resignation Email than the one made previously.

The motion judge also made a minor factual error when he stated that Mr. Reitan did not give evidence regarding a conversation with Dr. Bernstein before the September 13 Call until Dr. Bernstein mentioned the conversation in his affidavit. In fact, while Mr. Reitan made no reference to the conversation in his affidavit, he did testify regarding the conversation during the cross-examination on his affidavit, which preceded the filing of Dr. Bernstein’s affidavit. Despite the submissions of the appellants to the contrary, this was not an overriding error.

(3) and (4). Given the above conclusions, the Court did not consider the appellants’ submissions regarding the alleged legal errors, as they are predicated on a finding that Dr. Bernstein’s ownership interest was revealed during the September 13 Call.

St. Amand v. Tisi, 2018 ONCA 106

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

Derek A. Schmuck, for the appellant

Duncan M. MacFarlane, for the respondent

Keywords: Contracts, Consensus Ad Idem, Fresh Evidence, Due Diligence

Facts:

The Respondent, Tisi, and the Appellant, St. Amand, entered into an Agreement of Purchase and Sale in which St. Amand agreed to build a home for Tisi.

St. Amand electronically signed the agreement on November 2, 2016. Tisi electronically signed the agreement on November 4, 2016 but struck out the phrase “builder’s samples” in six places. These changes were initialled by Tisi but not by St. Amand.

The relationship came at an impasse when Tisi insisted that St. Amand use Tisi’s supplier and St. Amand refused, as he did not know the company and could not warrant its work under the Tarion Home Warranty.

Each party brought an application to the court. St. Amand sought a declaration that the Agreement of Purchase and Sale was void and Tisi sought specific performance. The application judge found in favour of St. Amand. Tisi appealed the application judges’ conclusion that there was no valid Agreement of Purchase and Sale between the parties and sought leave to introduce fresh evidence.

Issues:

(1) Is the fresh evidence that Tisi seeks to introduce on appeal admissible?

(2) Did the application judge err in finding that there was no valid Agreement of Purchase and Sale between the parties?

Holding:

Appeal dismissed.

Reasoning:

(1) No. Even if the evidence proffered by Tisi is credible and relevant to the issue on appeal, it does not meet the “due diligence” requirement and the interests of justice do not warrant its admission. Citing numerous decisions, the court indicated that a failure to exercise due diligence may render the admission of the fresh evidence not in the interests of justice.

(1) No. The application judge made two findings that are sufficient to decide this appeal and that are entitled deference. The first is that the agreement does not state that Tisi could attend to a cabinetmaker of her sole choice. The second is that Tisi’s amendments to the agreement revealed the parties’ inability to agree on material terms. Tisi believed the amended terms permitted her to use whatever supplier she wished and compel St. Amand to pay. While St. Amand expected that what would be used would be his builder’s samples in accordance with his suppliers. Tisi’s amendments were therefore a fundamental change to the agreement which demonstrated that there had been no meeting of the minds.                                                                           

Carleton Condominium Corporation 116 v. Sennek, 2018 ONCA 118

[LaForme, Rouleau and Paciocco JJ.A]

Counsel:

Manorama Sennek, self-represented

Allison J. Klymyshyn, for the respondent

Keywords: Civil Procedure, Vexatious Litigants, Lang Michener Lash Johnston v. Fabian (1987), 59 O.R. (2d) 353 (Ont. H.C.)

Facts:

Ms. Sennek raises over 20 grounds for appeal from the judgment declaring her to be a vexatious litigant. She has also filed a 216 paragraph affidavit setting out her position and appeal books of 868 pages. In essence, she argues that the various actions, proceedings, and appeals that she has brought against the respondent condominium corporation, its property manager, directors and solicitors are warranted in the circumstances. In her view, they do not represent misuse or abuse of the court process.

Issues:

(1) Did the application judge err in holding that the appellant was a vexatious litigant?

Holding: Appeal dismissed.

Reasoning:

(1) No. It is clear that the proceedings, applications, and appeals that Ms. Sennek continues to bring are frivolous and vexatious, and cannot succeed. They are collateral attacks on matters that have been finally determined. They amount to oppression of the various parties Ms. Sennek seeks to pursue.  There is no basis to interfere with the application judge’s finding that six of the seven characteristics of a vexatious litigant listed in Lang Michener Lash Johnston v. Fabian (1987), 59 O.R. (2d) 353 (Ont. H.C.), have been made out in this case.

Kueber v. Royal Victoria Regional Health Centre, 2018 ONCA 125

[Simmons, Roberts and NordheimerJJ.A.]

Counsel:

Barbara Kueber, in person

J Gutman, for the respondent Royal Victoria Regional Health Centre

M Vernon, for the respondent Barrie Medical Clinics Inc.

P Downs, for the respondent doctors

J Boudreau, for the respondent County of Simcoe Paramedic Services

Keywords: Torts, Negligence, Medical Malpractice, Defamation, Summary Judgement, Negligence

Facts:

The motion judge granted summary judgment dismissing the appellant’s medmal action against: County of Simcoe Paramedic Services; Paramedic J. Doe; the nine doctors named in the statement of claim; and Barrie Medical Clinics Inc. He also granted partial summary judgment dismissing her action against Royal Victoria Regional Health Centre as it relates to events on March 10 and 11, 2012.

Issues:

  • Did the motion judge err in dismissing the appellant’s claims against County of Simcoe Paramedic Services?
  • Did the motion judge err in dismissing the appellant’s claims against the nine doctors?
  • Did the motion judge err in dismissing the appellant’s claims against Barrie Medical Clinics Inc.?
  • Did the motion judge err in dismissing the appellant’s claims against Royal Victoria Regional Health Centre?

Holding:

Appeal allowed, in part.

Reasoning:

  • The appellant’s claims against County of Simcoe Paramedic Services and an unknown paramedic fell into three main categories. First, she claimed she was defamed in a March 10, 2012 ambulance call report, which noted anxiety, yelling, and aggressiveness on her part and that she sometimes becomes violent. Second, she claimed that, on March 21, 2012, a paramedic threatened to taser her. Third, she made general allegations that, in essence, the paramedic services provided to her fell below the standard of care, causing her to endure multiple incidents of endangerment and negatively impacting her care. The motion judge gave ample reasons for concluding that: i) summary judgment was appropriate; ii) the paramedic’s description of the appellant’s history and status in the March 10, 2012 ambulance call report was not defamatory; and iii) there was no basis in the record for concluding either that a paramedic threatened to taser the appellant on March 21, 2012 or that paramedic services provided to the appellant fell below the standard of care. The Court of Appeal saw no reason to interfere with these findings.
  • The appellant’s claims against the nine doctors were for medical negligence, falsification of records and defamation, and, in some instances, lack of informed consent. The doctors provided expert opinion evidence supporting their claims that they met the standard of care. The appellant did not cross-examine the doctors’ experts and filed no contradictory expert evidence. Concerning the claims of falsification of records and defamation, the motion judge concluded that they were “rooted in complete speculation and innuendo. The motions judge did not err in dismissing these claims.
  • The appellant visited two of the doctors against whom she advanced claims at Barrie Medical Clinics Inc. Evidence on the summary judgment motion indicated that these doctors were independent contractors. In any event, while the doctors adduced expert evidence supportive of their care and treatment, the appellant failed to introduce contradictory expert evidence. The Court of Appeal found no error in the summary judgemnt dismissing the appellant’s claims against Barrie Medical Clinics Inc.
  • The motion judge granted summary judgment dismissing the appellant’s claims against Royal Victoria Regional Health Centre concerning the March 10 and 11, 2012 hospital visits. At the appeal hearing, Royal Victoria Regional Health Centre acknowledged that its motion for partial summary judgment dismissing the claims against it was limited to the claims concerning the actions of Triage Nurse J. Doe on March 10 and 11, 2012. The claims relating to March 10 and 11, 2012 should not therefore have been dismissed in their entirety. The order for summary judgement was, therefore, amended accordingly.

Lee v. McGhee, 2018 ONCA 128

[Feldman, Paciocco and Fairburn JJ.A.]

Counsel:

Byeongheon Lee, appearing in person

Stephen Cavanagh, for the respondent, Simmons

Keywords:  Civil Procedure, Striking Pleadings, Jurisdiction, Human Rights Code

Facts:

The appellant brought an action based solely on an infringement of a right under Part 1 of the Human Rights Code, R.S.O. 1990, c. H.19. The motion judge struck the appellant’s claim as outside the jurisdiction of the Superior Court.

Issues:

(1) Did the motion judge err in striking the appellant’s claim as outside the jurisdiction of the Superior Court?

Holding:

Appeal dismissed.

Reasoning:

(1) No. Under s. 46.1(2) of the Code, a person cannot bring a civil court action based solely on an infringement of a right under Part 1 of the Code. However, it was clear at appeal that Mr. Lee did not fully appreciate the limits of the statement of claim as drafted. Therefore, he should be entitled to bring a motion, if so advised, to the Superior Court within 45 for leave to amend his statement of claim to bring it within the jurisdiction of the Superior Court.

Short Civil Decisions

Sickinger v. Sickinger, 2018 ONCA 111

[LaForme, Rouleau and van Rensburg JJ.A]

Counsel:

Gary S. Joseph, for the appellant

Katherine Costin, for the respondent

Keywords: Family Law, Civil Procedure, Appeals, Extension of Time

Criminal Decisions

R. v. Blackett, 2018 ONCA 119

[MacFarland, Pardu and Benotto JJ.A.]

Counsel:

James Lockyer, for the appellant

Roger A. Pinnock, for the respondent

Keywords: Criminal Law, Manslaughter, Fresh Evidence, Expert Opinion Evidence, Charles Smith Autopsies, Guilty Pleas, Setting Aside

Facts: This appeal that arises as the result of the reinvestigation of cases where Dr. Charles Smith provided opinion evidence as to the cause of death in children that led to convictions. The appellant was babysitting his 13 month old daughter at the child’s mother’s apartment in Scarborough while the mother was out doing errands. The mother returned to find the child lifeless in her playpen. Resuscitative efforts were unsuccessful and the child was pronounced dead shortly after her arrival at Scarborough Grace Hospital. Notably, the child had a history of breathing difficulties and intestinal problems.

Dr. Smith opined that the child had died as a result of a “mechanical type of asphyxia” likely caused as the result of neck compression or possibly blunt force applied to the abdominal/chest area accompanied by a choking episode. He dismissed the possibility that the child died from aspiration of stomach contents or any other accidental or unexplained cause.

The appellant was charged with second degree murder and was ultimately committed to stand trial on that charge. Eventually he pleaded guilty to manslaughter and was sentenced to three years and three months imprisonment in addition to the 15 months of pre-trial custody. The appellant served his sentence. The appellant seeks to have his guilty plea set aside, the manslaughter conviction quashed and a new trial on the charge of manslaughter.

The Crown did not contest the admission of this evidence nor dispute its contents.

Issues: Should the court set aside the appellant’s guilty plea, quash his conviction of manslaughter and order a new trial in light of the fresh evidence?

Holding: Yes. The Court allowed the appeal, set aside the guilty plea and the conviction for manslaughter and ordered a new trial.

Reasoning:

At the time of the incident, the appellant had spent the day with his daughter Tamara. On the child’s mother’s return from doing errands, Tamara was found lifeless and cold to the touch in the playpen. There is a dispute on the evidence about whether the appellant tried to prevent Ms. Thomas from calling 911 but a call was made. The appellant was described as distraught and confused when police arrived and he was performing CPR on Tamara. The appellant showed police the playpen where Tamara had been found and pointed out to them the stains on the bedding which he thought indicated that the child had thrown up while sleeping. He denied causing harm to the child.

The appellant told police the child had suffered from constant diarrhea and vomiting since coming home from the hospital. Indeed, the child had suffered a fractured right femur a few weeks prior to her death. The paramedics deemed that her crib was unsafe and ruled that the injury was accidental. Since being in the cast “there was a problem with her laying on her back, because she always used to throw up whatever we gave her”. Before noon the appellant put Tamara in her playpen with a bottle of chocolate milk which she drank until falling asleep.

Dr. Smith opined that mechanical asphyxia had caused Tamara’s death. He opined on several hypothetical mechanisms that may have caused the death including smothering and strangulation. He particularly emphasized other injuries found on the child at post mortem including fractures of both left and right femurs and several rib fractures. Concerns about Dr. Smith’s work began to arise in 2001. The Crown sought an independent review or Tamara’s case and Dr. Dowling, Chief Medical Examiner in the province of Alberta was retained. Although some concern was raised in Dr. Dowling’s first report about Dr. Smith’s conclusions; it was generally supportive.

Dr. James Ferris, the head of Pathology at Vancouver General Hospital and former Chief Forensic Pathologist of British Columbia was retained by the appellant to review Dr. Smith’s findings. In his May 3, 2001 report, he disputed some of Dr. Smith’s conclusions and doubted his interpretation of others.

Fifteen months after the appellant was committed for trial – and two weeks prior to the commencement of his trial on the second degree murder charge, the Crown offered to withdraw the second degree murder charge in exchange for the appellant’s plea of guilty to unlawful act manslaughter and a term of imprisonment of four years on the manslaughter conviction.

A number of factors came into play in the appellant’s decision to plead guilty to manslaughter. Of particular significance was the impact he thought Dr. Smith’s evidence would have on the jury. That, together with the fact that a jury was unlikely to be sympathetic toward him because the case involved the alleged murder of an infant and that, in his opinion and that of his lawyer, he would not be an effective witness on his own behalf.

It was in these circumstances that, despite his lawyer’s admonition that he not plead guilty to something he did not do, he nevertheless instructed his lawyer to agree to certain facts that were read into the record when his plea was taken, including that Tamara died of asphyxia that he precipitated in frustration when forcefully trying to feed the child with sufficient violence to cause vomiting and choking. He then left her either unconscious or entering unconsciousness, unable to breathe, and she died.

Filed by way of fresh evidence on appeal were the affidavits of the appellant and his trial counsel, Stephen Bernstein, which explain why the appellant pleaded guilty to manslaughter despite always insisting that he did nothing to cause Tamara’s death.

Since that time, as the fresh evidence discloses, Dr. Milroy had prepared in December, 2007 a detailed medico-legal report in which he was critical of Dr. Smith’s autopsy report and his conclusion that asphyxia was the cause of death. Dr. Milroy’s detailed findings are set out in his report filed as part of the fresh evidence on this appeal. He concluded the cause of death was “unascertained”.  Dr. Milroy in 2013 prepared a further report in which he concluded that Dr. Smith’s conclusion that asphyxia was the cause of Tamara’s death was not supported by the autopsy findings. He could neither exclude a natural or an unnatural cause of death.

Ultimately, the Court held that this is one of those cases where, despite the passage of time since the plea was entered, it should exercise its power to set aside the guilty plea in the interests of justice. The fresh evidence establishes that absent Dr. Smith’s flawed opinion, the appellant would not have pleaded guilty to manslaughter.

R. v. Walendzewicz, 2018 ONCA 103

[Juriansz, Watt and Miller JJ.A.]

Counsel:

Erika Chozik, for the appellant

Alex Hrybinsky, for the respondent

Keywords: Publicaiton Ban, Criminal Law, Sexual Assault, Assault Causing Bodily Harm, Uttering Threats

R. v. Halladay-Runions, 2018 ONCA 105

[MacFarland, Benotto and Brown JJ.A.]

Counsel:

Jeffrey Langevin, for the appellant

Frank Au, for the respondent

Keywords: Criminal Law, Break and Enter, Reasonable Apprehension of Bias, Sentencing

R. v. Lynch, 2018 ONCA 102

[MacFarland, Pardu and Benotto JJ.A.]

Counsel:

Janani Shanmuganathan, for the appellant

Aaron Shachter, for the respondent

Keywords: Criminal Law, Sentencing

R. v. Lowe, 2018 ONCA 110

Counsel:

Paul J.I. Alexander, for the appellants

David Quayat, for the respondent

Keywords: Criminal Law, Possession and Trafficking, Garofoli Procedure, Debot Criteria

 R. v. Van Duong, 2018 ONCA 115

Counsel:

Daniel C. Santoro and Andrew Furgiuele, for the appellants

Jennifer Conroy, for the respondent

Keywords: Criminal Law, Fraud, Possession, Search and Seizure, Canadian Charter of Rights and Freedoms, s. 8

R. v. Aragon, 2018 ONCA 124

[MacFarland, Benotto and Brown JJ.A.]

Counsel:

Ariel Herscovitch, for the appellant

Andreea Baiasu, for the respondent

Keywords: Criminal Law, Contempt of Court

R. v. Mahamud, 2018 ONCA 122

[MacFarland, Pardu and Benotto JJ.A.]

Counsel:

Ian Carter, for the appellant

Katie Doherty, for the respondent

Keywords: Criminal Law, Robbery, Identification Evidence, Reliability

R. v. Oddi, 2018 ONCA 120

[MacFarland, Pardu and Benotto JJ.A.]

Counsel:

Albert Oddi, acting in person

Michael McEachren, for the responding parting

Keywords: Criminal Law, Evidence, Forfeiture Order

R. v. Scott, 2018 ONCA 123

[MacFarland, Pardu and Benotto JJ.A.]

Counsel:

Catriona Verner, for the appellant

Mabel Lai, for the respondent

Keywords: Criminal Law, Reverse Onus, Fresh Evidence

R. v. Barclay, 2018 ONCA 114

[Hoy A.C.J.O., Doherty and Feldman JJ.A.]

Counsel:

Jonathan Dawe, for the appellant

Jeanette Gevikoglu, for the respondent

Keywords: Criminal Law, Drug Possession and Trafficking, Unlawful Detention, Sentencing

R. v. Kenegarajah, 2018 ONCA 121

[Watt, Hourigan and Miller JJ.A]

Counsel:

Michael Dineen, for Anantha Neeranjan

Ian Kasper, for Rajitha Kanagarajah

Mark Halfyard, for Kuhen Neshan

Ian Smith, for Ramanan Kenegarajah

Michael Bernstein, for the respondent

Keywords: Criminal Law, Fraud, Money Laundering, Criminal Organizations, “Single Transaction” Rule, Knowledge and Control

R. v. P.K., 2018 ONCA 109

[Juriansz, Miller and Fairburn JJ.A.]

Counsel:

Ian B. Kasper, for the appellant

Elena Middelkamp, for the respondent

Keywords: Publication Ban, Criminal Law, Sentencing, Youth Criminal Justice Act

R. v. Lexier, 2018 ONCA 126

[MacFarland, Pardu and Benotto JJ.A.]

Counsel:

Nicolas M. Rouleau and Daniel C. Santoro, for the appellant

Heather Graham, for the respondent

Keywords: Criminal Law, Fraud, Extradition

Ontario Review Board Decisions 

Coburn (Re), 2018 ONCA 112

[Juriansz, Miller and Fairburn JJ.A.]

Counsel:

Suzan E. Frazer, for the appellant

Lillian Coburn Elena Middelkamp, for the respondent, the Attorney General of Ontario

Michele Warner, for the respondent, the Person in Charge of the Centre for Addiction and Mental Health

Keywords: Health Law, Ontario Review Board, Public Safety

Sokal (Re), 2018 ONCA 113

[Rouleau, Watt and Brown JJ.A.]

Counsel:

Anita Szigeti, for the Appellant, Roman Sokal

Rebecca De Filippis, for the Respondent, Her Majesty the Queen

Keywords: Publication Ban, Health Law, Ontario Review Board

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 (JANUARY 29 – FEBRUARY 2)

Good afternoon,

Following are summaries of all civil decisions released this week by the Court of Appeal for Ontario.

In Rutman v. Rabinowitz, 2018 ONCA 80, the Court canvassed the law of internet defamation and damages.

In Phoenix Interactive Design Inc. v. Alterinvest II Fund L.P., 2018 ONCA 98, the Court confirmed that the four-part test test set out in Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573, rather than the two-part test set out in Morrison v. Coast Finance Ltd. (1965), 55 D.L.R. (2d) 710 (B.C. C.A.) is the applicable test in Ontario.

In The Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company, 2018 ONCA 101, the Court held that the standard of review applicable of SAB arbitral decisions is reasonableness.

Additional topics covered this week included relief from forfeiture in the commercial leasing context, the scope of the OMB’s authority to vary Official Plans passed by municipalities, and breach of contract in the RFP context.

I would like to invite all of our readers to attend the Top Appeals of 2017 CLE that my partner, Lea Nebel and I will be co-chairing with Justice Epstein of the Court of Appeal. The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place on Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case will be heard by the Supreme Court on February 8. Counsel on that matter, David M. Smith and Jeremy Opolsky, have agreed to participate in our panel discussion. The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the “appropriate means” analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists. The law in this area is continuing to evolve. The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has certainly received the attention of the plaintiffs’ personal injury bar and the media and has, no doubt, been a catalyst behind the Law Society’s efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

Wishing everyone a nice weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

Table of Contents

Houle v. St. Jude Medical Inc., 2018 ONCA 88

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory Orders, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b), s. 19(1)(b), Class Actions, Funding Agreements

North Elgin Centre Inc. v. McDonald’s Restaurants of Canada Limited, 2018 ONCA 71

Keywords: Real Property, Commercial Leases, Options to Renew, Waiver, Petridis v. Shabinsky, 35 O.R. (2d) 215 (H.C.)

Richmond Hill (Town) v. Elginbay Corporation, 2018 ONCA 72

Keywords: Municipal Law, Official Plans, Planning Act, Section 42, Ontario Municipal Board, Jurisdiction

Kaymar Rehabilitation Inc. v. Champlain Community Care Access Centre, 2018 ONCA 76

Keywords: Contracts, Breach of Contract, Requests for Proposal, Non-Compliant Bids

Rutman v. Rabinowitz, 2018 ONCA 80

Keywords: Torts, Defamation, Libel, Concerted Action Liability, Vicarious Liability, Damages, Standard of Review, General Damages, Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, Aggravated Damages, Punitive Damages, Whiten v. Pilot Insurance Co., 2002 SCC 18

Phoenix Interactive Design Inc. v. Alterinvest II Fund L.P., 2018 ONCA 98

Keywords: Contracts, Interpretation, Debtor-Creditor, Commercial Loans, Bonus Payments, Enforceability, Unconsionability, Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573, Morrison v. Coast Finance Ltd. (1965), 55 D.L.R. (2d) 710 (B.C. C.A.), Barclays’ Bank PLC v. Metcalfe & Mansfield Alternative Investments VII Corp., 2013 ONCA 494,Interest, Criminal Interest Rate,  Criminal Code, R.S.C. 1985, c. C-46, s.347, Crown Corporations, Business Development Bank, Ultra Vires, Business Development Bank of Canada Act, S.C. 1995, c. 28

The Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company, 2018 ONCA 101

Keywords: Insurance Law, MVA, SABS, Arbitration, Standard of Review, Reasonableness, Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Intact Insurance Company v. Allstate Insurance Company of Canada, 2016 ONCA 609, Insurance Act, R.S.O. 1990, c.18, s. 268 (2), Statutory Accident Benefits Schedule , O. Reg 34/10 and 283/95, Arbitration Act, 1991, S.O. 1991, c.17

For Short Civil Decisions click Here

For Ontario Review Board Decisions click Here

For Criminal Decisions click Here

Civil Decisions

Houle v. St. Jude Medical Inc., 2018 ONCA 88

[Simmons, Roberts and Nordheimer JJ.A.]

Counsel:

Brandon Kain and Vladimira Ivanov, for the moving parties/respondents

Margaret Waddell, for the responding parties/appellants and proposed class counsel

Benjamin Zarnett and David Lederman, for Bentham IMF Capital Limited

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory Orders, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b), s. 19(1)(b), Class Actions, Funding Agreements

Facts:

The appellants, Shirley and Roland Houle, appealed from the order of Justice Paul Perrell of the Superior Court of Justice dated August 29, 2017. The moving parties, St. Jude Medical Inc. and St. Jude Medical Canada, Inc., brought this motion to quash the appeal on the basis that the order in issue was an interlocutory, not final, order and thus was only appealable to the Divisional Court with leave.

The plaintiffs were proposed representative plaintiffs in a proposed class action. The proposed representative plaintiffs and proposed class counsel sought third party litigation funding from Bentham IMF Capital Limited (“Bentham”). The proposed representative plaintiffs, proposed class counsel and Bentham entered into a funding agreement dated August 6, 2017 (the “Funding Agreement”) under which Bentham agreed to pay a portion of the legal fees and disbursements for the proposed class action on certain terms.

The proposed representative plaintiffs brought a motion seeking approval of the Funding Agreement and for an order that would make the Funding Agreement binding on all putative class members. The motion judge conditionally approved the Funding Agreement, subject to certain changes being made to certain of its terms, failing which the approval motion would be dismissed. The proposed representative plaintiffs, proposed class counsel and Bentham all objected to the required changes. As a result, rather than make the changes to the Funding Agreement, they appealed the conditional approval order. In apparent recognition that there might be an issue over jurisdiction, appeals were taken both to the Court of Appeal and by way of a motion for leave to appeal to the Divisional Court.

The moving parties contended that the order in issue was an interlocutory order, therefore any appeal lies to the Divisional Court with leave (Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1)(b)), and should be quashed. The responding parties contended that the order was final and thus the appeal lies to the Court of Appeal (Courts of Justice Act, s. 6(1)(b)).

Issues:

(1) Should the appeal be quashed on the basis that the order in issue is an interlocutory order, and not final order, and thus is only appealable to the Divisional Court with leave?

Holding: Motion granted.

Reasoning:

(1) Yes. The court explained that there is no definition in the Courts of Justice Act as to what constitutes a final order and decisions on this issue have not always followed a consistent approach for determining whether an order is final or interlocutory.

In support of their position, the moving parties pointed to various decisions that have dealt with this issue and which have held that the following are all interlocutory orders in the context of class proceedings: orders for security for costs, carriage orders, and orders denying approval of a settlement.

However, the court explained that the issue in this case is complicated by the fact that two of the parties appealing the conditional approval order are not, strictly speaking, parties to the proceeding. Where “non-parties” are involved, the question of whether an order is final or interlocutory is made more difficult.

Nonetheless, the court held that the order in issue here did not finally dispose of the rights of proposed class counsel and Bentham. The motion judge did not dismiss the approval motion. Rather, his order conditionally approved the Funding Agreement, subject to certain revisions being made to it. Subject to making the required revisions, the proposed representative plaintiffs, proposed class counsel and Bentham got what they had asked the motion judge for – approval of the Funding Agreement.

However, the responding parties decided not to revise the Funding Agreement, and, as a result, their motion for approval was dismissed. In that respect, the order here is akin to other forms of conditional orders, such as an order for security for costs. Where security for costs is ordered, if the security is not posted, the proceeding may come to an end. Nevertheless, the order requiring that security be posted is still an interlocutory order.

Thus, the court held that the order in issue was an interlocutory order, only appealable to the Divisional Court with leave. The appeal was therefore quashed.

North Elgin Centre Inc. v. McDonald’s Restaurants of Canada Limited, 2018 ONCA 71    

[Pepall, Hourigan and Brown JJ.A.]

Counsel:

Ronald G  Slaght, Andrew Parley and Margaret Robbins, for the appellant

Martin P Zarnett, for the respondent

Keywords: Real Property, Commercial Leases, Options to Renew, Waiver, Petridis v. Shabinsky, 35 O.R. (2d) 215 (H.C.)

Facts:

On March 11, 1997, the appellant, McDonald’s Restaurants of Canada Ltd. (“McDonald’s”), as tenant, and North Elgin Centre Inc. (“North Elgin”), as landlord, entered into a twenty-year commercial lease (the “Lease”), which was a ground lease in respect of lands in Richmond Hill, Ontario upon which McDonald’s built and renovated a restaurant. The parties agreed that the original term of the Lease would end on March 10, 2017.

The Lease included an option to renew for two consecutive additional terms of ten years each. There was no dispute that McDonald’s gave proper notice of its intention to renew the Lease prior to the expiry of the original term. However, the application judge held that the renewal provision required McDonald’s to do more than simply provide notice of its intention to renew. She found that because the parties had not agreed on a rental rate at least nine months before the end of the original term, McDonald’s was obliged under the Lease to either refer the issue to arbitration or revoke its intention to renew.

McDonald’s failed to take either action. The application judge found, therefore, that the Lease was uncertain as to a material term — the rental rate. Accordingly, the parties were left without an enforceable agreement. She went on to find that because the parties were engaged in negotiations, North Elgin waived its right to insist on strict compliance with the terms of the renewal provision. However, she also found that North Elgin later revoked its waiver and reverted to its strict legal rights. As a result, the application judge held the doctrine of waiver did not apply and the Lease was at an end. McDonald’s appealed.

Issues:

(1) Did the application judge err in finding that North Elgin revoked its waiver?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The application judge made a palpable and overriding error of mixed fact and law in finding that the waiver had been revoked. The principle of waiver provides that if one party leads another party to believe that its strict legal rights under a contract will not be insisted upon, intending that the other party will act upon that belief and the other does so, then the first party may not afterwards insist on its strict legal rights when it would be inequitable to do so: Petridis v. Shabinsky, 35 O.R. (2d) 215 (H.C.), at para. 20. Further, for the revocation of a waiver to be effective, it must provide reasonable notice to the receiving party: Petridis, at para. 20. To qualify as reasonable, the notice must make clear that the party who granted the waiver will insist upon the strict enforcement of its legal rights. The notice must also afford the opposite party an opportunity to cure any defect resulting from its reliance on the waiver.

The correspondence between the parties did not indicate that North Elgin would be insisting upon the strict enforcement of its legal rights. There was no clear revocation of the waiver. Because the waiver was not properly revoked, the issue of fair market rental rates shall be referred to arbitration.

Richmond Hill (Town) v. Elginbay Corporation, 2018 ONCA 72

[MacFarland Watt and Benotto JJ.A.]

Counsel:

Earl A. Cherniak, Q.C., Cynthia Kuehl, Ira T. Kagan, David Winer and Alexandra DeGasperis, for the appellants Elginbay Corporation and Zamani Homes (Richmond Hill) Ltd.

Jeffrey E. Streisfield, for the appellants Haulover Investments Limited, Yvonne Worden and Robert Salna Holdings Inc.

Barnet H. Kussner and Kim Mullin, for the respondent the Corporation of the Town of Richmond Hill

Stan Floras, for the respondent the Ontario Municipal Board

Robert G. Doumani, for the intervener the Corporation of the City of Mississauga

Nadia Chandra, for the intervener the Corporation of the Town of Oakville

Andrea Wilson-Peebles, for the intervener the Corporation of the City of Markham

Bruce Engell, for the intervener the Corporation of the City of Vaughan

Keywords: Municipal Law, Official Plans, Planning Act, Section 42, Ontario Municipal Board, Jurisdiction

Facts:

In July 2010, the Town adopted a new Official Plan (OP) which provided at s.3.1.8.a.ii that the required parkland conveyance for residential developments was the greater of (1) five per cent of the proposed development, and (2) one hectare per 300 dwelling units proposed. This was challenged by numerous parties before the Ontario Municipal Board (OMB).

Ultimately, the OMB ordered that the following underlined words be added to s.3.1.8.a.ii of the OP:

up to 1 hectare of land for each 300 dwelling units proposed for residential development, as may be specified by by-law in accordance with section 42(3) of the Planning Act, provided that in no case shall the amount of land required to be conveyed for park or other public recreational purposes exceed the equivalent of 25% of the land proposed for development.

The 25% cap was at issue before the Divisional Court and on this appeal.

The Divisional Court unanimously found that the OMB erred in law by determining that it had the authority to modify the OP by approving a policy which imposes a lower maximum different than as provided for in subsection 42(3) of the Planning Act, namely “1 hectare per 300 dwelling units”. The developer appealed.

Issues:

(1) Was the OMB authorized under s. 42 of the Planning Act (the “Act”), either alone or in conjunction with s. 17(50), to impose the cap?

(2) Did the Divisional Court err in determining that the OMB’s powers were different and lesser than the Town’s adoption powers respecting the Town’s OP, such that the Town alone could self-impose a specific parkland dedication rate?

Holding: Appeal dismissed.

Reasoning:

(1) No. The OMB is a creature of statute, and can only do what the legislature has empowered it to do through various statutory provisions. The only proviso to the authority bestowed on the municipality under s. 42 of the Planning Act is found in s. 42(4): there must be an OP “in effect” in the municipality and it must contain “specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement.”

Section 42(1) gives the municipality the specific power to require, by by-law, a developer of residential land to convey land in an amount not exceeding five percent to the municipality for parkland. This by-law is not appealable to the OMB. Section 42(3) then says that the by-law that s.42(1) authorizes the municipality to make and that is not appealable to the OMB may require “that land be conveyed … at a rate of one hectare for each 300 dwelling units proposed or at such lower rate as may be specified in the by-law.”

While there can be no question that for matters within its jurisdiction the OMB has very broad powers, none of these provisions bestows jurisdiction on the OMB to set the rate under that provided for in s. 42(3).

As a matter of statutory interpretation, it is presumed that the provisions of legislation are meant to work together as part of a functional whole. Section 42 deals with conveyance of land for park and recreational purposes under Part V of the Act. Section 17(50) falls under Part III of the Act and is a more general provision setting out the OMB’s powers on appeal (or transfer of an OP). The appellants’ interpretation that s. 17(50) authorizes the OMB to set the rate of land conveyance cannot be reconciled with the fact that s. 42 provides that where a municipality determines to use the alternative requirement, that it will do so by way of a bylaw that is not appealable to the OMB. In contrast, the Divisional Court’s interpretation gives effect to both provisions.

(2) No. The OMB’s power to act as the original decision maker could have acted does not confer on it the power to interfere in specific circumstances where the legislature has limited its ability to do so.

Kaymar Rehabilitation Inc. v. Champlain Community Care Access Centre, 2018 ONCA 76

[Pepall, Hourigan and Brown JJ.A.]

Counsel:

Monica Song and Scott McLean, for the appellant

Joel Richler, Robin Linley and Brittiny Rabinovitch, for the respondent

Keywords: Contracts, Breach of Contract, Requests for Proposal, Non-Compliant Bids

Facts:

In late 2003, the respondent, Champlain Community Care Access Centre (“Champlain”), issued a request for proposals (“RFP”) for the provision of physiotherapy, occupational therapy, and social work services (the “Therapy Services”). Champlain intended to split the work between two service providers. The RFP attracted four bidders, including the appellant, Kaymar Rehabilitation Inc. (“Kaymar”).

In the result, Kaymar was not one of the two successful bidders. In 2005, Kaymar commenced this action against Champlain and the two successful bidders, Cota Comprehensive Rehabilitation and Mental Health Services (“COTA”) and Carefor Health and Community Services (“Carefor”), formerly the Victorian Order of Nurses, Ottawa-Carleton Branch. Kaymar claimed that the successful bidders did not have compliant bids and that it should have been awarded the contracts.

Kaymar’s action as against COTA and Carefor was dismissed following a summary judgment motion. Kaymar’s action against Champlain proceeded to trial and was also dismissed. The trial judge awarded Champlain costs of $1,864,000.00, some of which were calculated on a substantial indemnity basis. Kaymar appeals the dismissal of its action against Champlain and seeks leave to appeal the cost award.

Issues:

(1) Did the trial judge err in interpreting the RFP documents in a way that entitled Champlain to expand the scope of a bidder’s qualifying experience to include those who lacked experience in providing Therapy Services?

(2) Did the trial judge err in holding that Carefor submitted a compliant bid?

(3) Should leave to appeal the cost award be granted and should the costs be reduced?

Holding: Appeal dismissed. Appeal on costs allowed, in part.

Reasoning:

(1) No. The trial judge’s interpretation was reasonable. Section 2.2 of the RFP clearly gave priority to information contained in the Data Sheet over that in any other schedule. By its terms, s. 1.3(1) of Schedule C recognized that priority. It stated an applicant shall provide evidence that it had been “actively engaged in the services as described in the Data Sheet [in] a community setting or, if set out in the Data Sheet the required equivalent experience…” The “experience equivalents” section of the Data Sheet opened the door to bids from applicants that had experience in providing “professional services”, even though they did not have experience in providing Therapy Services.

(2) No. The trial judge did not err in finding Champlain could broaden the “experience equivalents” in the RFP to encompass “professional services”.

(3) Yes, leave to appeal costs should be granted. Given the length of the proceeding, the serious nature of the allegations, the complexity of the issues, the length of the trial, and Champlain’s unqualified success at trial, the Court concluded that a fair and reasonable award of partial indemnity costs of the action to Champlain is $1,675,000.00, and reduced the costs accordingly.

Rutman v. Rabinowitz, 2018 ONCA 80

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

Helen A. Daley and Michael Finley, for the appellants Moishe Bergman and Artcraft Company Inc.,

John J. Adair, for the appellant Saul Rabinowitz

Matthew P. Sammon and S. Jessica Roher, for the respondent

Keywords: Torts, Defamation, Libel, Concerted Action Liability, Vicarious Liability, Damages, Standard of Review, General Damages, Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, Aggravated Damages, Punitive Damages, Whiten v. Pilot Insurance Co., 2002 SCC 18

Facts:

The respondent, Ronald Rutman, a Toronto chartered accountant and businessman, was subjected to an orchestrated internet defamation campaign specifically designed to harm his personal and professional reputations. The campaign involved postings on the internet of numerous defamatory allegations, including that he had engaged in tax fraud and was a thief and a cheat. The allegations were entirely without substance. The defamatory statements were made by the appellant, Saul Rabinowitz, who admitted liability at trial. The trial judge found the appellants, Moishe Bergman and Artcraft Company Inc., jointly and severally liable for the defamation. Rabinowitz and Bergman were Rutman’s long-time business associates. Rabinowitz managed Artcraft Limited, a company owned by Rutman. Bergman was responsible for sales. The internet defamation campaign included social media postings impersonating Rutman using fake email addresses and sending defamatory emails about Rutman from anonymous addresses to his friends, family and business associates.

At trial, Bergman denied that he participated with Rabinowitz in the publishing of those statements and Artcraft denied any responsibility for Rabinowitz’s actions. The trial judge found that the words complained of were defamatory, were about Rutman, and were published to a third party. The trial judge awarded: $200,000 in general damages as against all three defendants; $200,000 in aggravated damages; $250,000 in punitive damages as against Rabinowitz; and $50,000 in punitive damages as against Bergman.

Rabinowitz appeals the trial judge’s damages awards.  Bergman and Artcraft appeal from the joint and several liability holding against them. In the alternative, they seek to reduce the quantum of the general damages award to $25,000. Bergman also seeks to set aside the punitive damages awarded against him.

Issues:

(1) Did the trial judge err by misconstruing the test for concerted action liability?

(2) Did the trial judge err by inferring Bergman’s knowledge of the internet defamation campaign?

(3) Did the trial judge err by misconstruing the test for the vicarious liability of Artcraft?

(4) Did the trial judge err in assessing damages?

Holding: Appeal dismissed.

Reasoning:

(1) No. Concerted action may occur in a variety of ways. Generally, it involves a common design or conspiracy. Canadian authorities suggest that concerted action liability arises when a tort is committed in furtherance of a common design or plan, by one party on behalf of or in concert with another party. The trial judge was correct to hold that the test for concerted action liability was made out in respect of Bergman. That Bergman did not publically approve or repeat the defamatory statements at issue does not absolve him from liability for Rabinowitz’s tortious conduct. Bergman was not merely a passive or silent observer of the internet defamation campaign. There was ample evidence at trial to support the trial judge’s conclusion that there was a common design between Bergman and Rabinowitz to cause harm to Rutman. It was not necessary for the trial judge to find that Bergman was an active participant in the internet defamation campaign from the outset in order to attract joint and several liability. The trial judge found that Bergman was aware of the campaign at least by the end of April 2009 and was willing to use it to his potential advantage. Bergman did not simply agree with or acquiesce in Rabinowitz’s campaign. To the contrary, on the trial judge’s factual findings, he was involved in authorizing the use of Artcraft equipment and personnel to facilitate the defamation campaign.

(2) No. The trial judge’s appreciation of the evidence and his fact-finding are entitled to deference from this court. His factual findings can be disturbed by a reviewing court only if they are tainted by palpable and overriding error. No such error has been established here. It was open to the trial judge on the evidentiary record to conclude there were sound reasons for disbelieving Bergman’s claim that he never agreed to Rabinowitz’s defamation campaign, and was unaware of it until April 2009.

(3) No. The trial judge considered and rejected the same arguments Bergman and Artcraft raise on appeal regarding Artcraft’s vicarious liability. The trial judge found that Rabinowitz and Bergman were the controlling shareholders, directors, and directing minds of Artcraft, and that they authorized the use of company equipment and employees to perpetrate the internet defamation campaign and to try to conceal their involvement in it.

(4) No. In the leading case of Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, the Supreme Court of Canada addressed the standard of appellate review applicable to a jury’s award of general damages in a defamation case, stating: “the assessment of damages is ‘peculiarly the province of the jury’” and “an appellate court is not entitled to substitute its own judgment as to the proper award for that of the jury merely because it would have arrived at a different figure.” A different and less deferential standard applies to appellate review of a jury award of punitive damages. Appellate review in these circumstances is based upon the court’s estimation as to whether the impugned award serves a rational purpose. Drawing on Whiten v. Pilot Insurance Co., 2002 SCC 18, if an award of punitive damages, together with the compensatory damages awarded, “produces a total sum that is so ‘inordinately large’ that it exceeds what is ‘rationally’ required to punish the defendant, it will be reduced or set aside on appeal”. The court also relied upon the Newfoundland Court of Appeal’s decision in Farrell v. St. John’s Publishing Co., [1986] N.J. No. 19 (CA), which states that “In assessing damages in a libel action, a judge, sitting without a jury, has a great deal of latitude and the Court of Appeal will not readily interfere with his award unless it is satisfied that he arrived at his figure either by applying a wrong principle of law or through a misapprehension of the facts or that the amount awarded was so extremely high or so low as to make it an entirely erroneous estimate of the damages.”

The appellants argued that there was insufficient evidence of actual harm to Rutman. It is trite law that general damages in libel cases are presumed from the very publication of the false statement. The injured plaintiff bears no obligation to prove actual loss or injury. Special damages for pecuniary loss are rarely claimed in libel actions and are often exceedingly difficult to prove, resulting in them being grouped with general damages. The inability to point to specific reputational harm is not an admission that such harm did not occur, and the injurious effects of defamatory statements regarding a professional are particularly acute.

The pernicious effect of defamation on the internet, or “cyber libel”, distinguishes it, for the purposes of damages, from defamation in another medium. Consequently, while the traditional factors to be considered in determining general damages for defamation remain relevant (for instance, the plaintiff’s conduct, position and standing, the nature and seriousness of the defamatory statements, the mode and extent of publication, the absence or refusal of any apology or retraction, the whole conduct and motive of the defendant from publication through judgment, and any evidence of aggravating or mitigating circumstances), they must be examined in light of the internet context of the offending conduct. In the trial judge’s reasons, he recognized, correctly, the purposes of compensatory damages in libel cases, as well as the traditional considerations relevant to assessing the quantum of such damages, listed above. They also confirm he appreciated the requirement that the analysis of the damages occasioned by the extensive internet defamation campaign.

Factors such as the broad nature of the allegations, how widely they were spread, and the reason the defamation was carried out, militated towards a significant general damages award. The trial judge considered the controlling principles for the awarding of general compensatory damages in an internet defamation case, and applied them to the facts as he found them. The quantum of general damages that he awarded to achieve the purposes of such an award was well within his discretion and was amply supported by the evidentiary record.

Similarly, there was no basis to fault the trial judge for his award or quantification of aggravated damages. The trial judge, for clear and detailed reasons, found that the insidious nature of Rabinowitz’s conduct compounded Rutman’s suffering and angst; that Rabinowitz acted maliciously, motivated by anger and personal business self-interest; that his motives and conduct, including his “malevolence and spite” and the “manner of committing the wrong”, aggravated the injury done to Rutman, including to his dignity and pride; and that Rabinowitz admittedly acted to cause additional harm to Rutman. On these findings, which also are not challenged on appeal, a significant aggravated damages award was clearly justified.

As the courts have repeatedly emphasized, libel cases are particularly fact-sensitive and, in that sense, each is unique. In fashioning his damages awards, the trial judge appreciated that, for this reason, a comparison with awards in other libel cases was of little assistance. Although Rabinowitz relies on several libel cases in which the amount of the compensatory damages awarded was lower than that awarded here, other libel cases reveal compensatory damages awards in amounts higher than those awarded by this trial judge. The variability in the amount of compensatory damages awarded in Canadian libel cases does not mean that the award in this case is “incoherent”, as Rabinowitz argues. Rather, it underscores the highly fact-sensitive and unique nature of each libel case. Given all the factors at play , including Rabinowitz’s admitted misconduct, the nature of the defamatory statements, and their impact on Rutman, no other libel case is especially instructive, let alone controlling, on the issue of the quantification of damages.

The trial judge’s reasons confirm that he appreciated the purposes of punitive damages, their exceptional nature, the need to be fair to both sides, and the basis for Rabinowitz’s contention at trial that any award of punitive damages as against him should be limited to $25,000 to $50,000. The trial judge’s reasons belie the contention that he ignored or failed to apply the governing principles concerning punitive damages. His reasons make it abundantly clear that he was cognizant of these principles and properly applied them to the facts of this case. It cannot be said that the quantum of the punitive damages awarded as against Rabinowitz was irrational, given the underlying objectives of such damages.

Phoenix Interactive Design Inc. v. Alterinvest II Fund L.P., 2018 ONCA 98

[Pepall, Lauwers and Huscroft JJ.A.]

Counsel:

G Benchetrit and M Kril-Mascarin, for the appellant/respondent by way of cross-appeal

R F Leach and M A Polvere, for the respondents/appellants by way of cross-appeal

Keywords: Contracts, Interpretation, Debtor-Creditor, Commercial Loans, Bonus Payments, Enforceability, Unconsionability, Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573, Morrison v. Coast Finance Ltd. (1965), 55 D.L.R. (2d) 710 (B.C. C.A.), Barclays’ Bank PLC v. Metcalfe & Mansfield Alternative Investments VII Corp., 2013 ONCA 494,Interest, Criminal Interest Rate,  Criminal Code, R.S.C. 1985, c. C-46, s.347, Crown Corporations, Business Development Bank, Ultra Vires, Business Development Bank of Canada Act, S.C. 1995, c. 28

Facts:

The appeal involves the principles applicable to the calculation of a bonus that the respondents promised to pay to the appellant on the sale of the respondents’ company. The application judge determined that the bonus payable amounted to $242,552.79, and not $888,462.78, as claimed by the appellant. She dismissed the respondents’ claim that no bonus was payable because it allegedly in contravention of the criminal rate of interest, was unconscionable, or was ultra vires the objects of the appellant, the Business Development Bank of Canada (“BDC”).

BDC and other financial institutions established the appellant, Alterinvest II Fund L.P. (“ALP”), to provide subordinate debt and equity financing to small and medium sized businesses in Canada. The respondent, Phoenix Interactive Design Inc. (“Phoenix”), was seeking such financing. Kyle MacDonald was the founder of Phoenix, and its President and Chief Executive Officer. She was also the principal of the respondent, 1932780 Ontario Inc. (“193”), (together with Phoenix, the “Phoenix parties”), which was formed in March 2015 as the amalgam of a number of predecessor companies. In November 2010 ALP offered Phoenix a loan for $2.25 Million with a November 23, 2015 Maturity date to refinance an existing $1.25 Million loan and meet additional working capital needs. The loan had a fixed interest rate of 12.8% per annum and monthly royalties commencing February 2011. In the loan agreement, Phoenix and 193’s predecessors were described as the “Borrowers”. The parties agreed that ALP would be paid a bonus if any of the Borrowers were sold. The provision provided that if 50% or more of any Borrower was sold, then a bonus of 1% of net proceeds, after transaction costs, would be payable notwithstanding repayment of the credit facilities. The provision was in force until the maturity date. The loan agreement also precluded sale or reorganization of any of the Borrowers without ALP’s consent.

In 2014 Phoenix was approached with an offer. In February 2015, MacDonald met with ALP to advise that negotiations were underway for the sale of Phoenix. She also advised that the Phoenix parties were not willing to pay ALP the bonus in accordance with the loan agreement because she believed that the fee would be disproportionate to the amount outstanding on the loan.  ALP disagreed and then on March 5 2015 Phoenix paid the full amount of $408,944.66 that was outstanding under the loan agreement for principal, fees, and royalties. This did not include the bonus.

Prior to the closing of the stock purchase transaction, 193’s predecessor companies amalgamated to form a new company, 1926723 Ontario Inc. (“Targetco”). Phoenix Interactive International Inc. (“Holdco”), which was owned by MacDonald, held all the shares in Targetco. Targetco issued dividends totaling $50 million on March 10 and 11, 2015. In satisfaction of the dividends, Targetco issued promissory notes totaling $50 million to Holdco. On March 13, 2015 Phoenix was sold to a company called Diebold for $92.5 Million. The $50 million debt under the promissory notes from the pre-closing reorganization, plus an additional $5.125 million of debt (representing income tax liabilities), formed part of the purchase price and were repaid by the purchaser on the date of closing.

The Parties were unable to agree on the amount of the bonus payable to ALP The Phoenix parties argued that the bonus calculation should not include the $55.125 million, whereas ALP argued that those funds formed part of the proceeds of sale and therefore should be included in the bonus calculation.

Issues:

(1) Should the bonus calculation include the sum of $55.125 million

(2) Is the bonus contrary to s. 347 of the Criminal Code, which sets out the criminal rate of interest?

(3) Is the bonus unconscionable?

(4)Is the bonus ultra vires BDC’s legislated mandate?

Holding:

Appeal dismissed.

Reasoning:

(1) Yes. First, the purchase price between the Phoenix parties and Diebold was $92.5 million. Phoenix conceded that the $55.125 million debt was repaid by the purchaser and was received by Phoenix on the closing of the sale to the purchaser. Second, the establishment of the debt of $55.125 million was created by the Phoenix parties as part of the pre-sale reorganization. No such reorganization was permitted pursuant to the loan agreement absent ALP’s consent and no consent was either requested or received. In accordance with Barclays’ Bank PLC v. Metcalfe & Mansfield Alternative Investments VII Corp., 2013 ONCA 494, a party is precluded from taking advantage of and benefitting from a state of affairs caused by its own wrongdoing. The Phoenix parties acknowledged that the $55.125 million was paid to them on the closing of the sale transaction from the sale consideration received from the purchaser. At its heart, that sum formed part of the proceeds of disposition on account of the sale to the purchaser. The Court of Appeal found that it would be a strange result if Phoenix’s obligation to pay the bonus was reduced or eliminated due to their tax minimization manoeuvres, which contravened the terms of the loan agreement, did not actually reduce the amount they received, and formed part of the consideration for the sale to the purchaser.

(2) No.The Phoenix parties submit that the bonus was contrary to s. 347 of the Criminal Code. Specifically, they take issue with the applications judge’s conclusion that the outstanding loan amount did not have a zero balance when Diebold bought Phoenix because the bonus payment was still owing. They argue that the bonus payment was not an existing obligation because it was based on a future event – the sale of Phoenix – that was uncertain at the time the loan was prepaid. The Court of Appeal found that the application judge correctly decided that the loan agreement required payment of the bonus regardless of any prepayment in advance of the loan’s maturity date. Therefore, the bonus was owing and there was no zero balance. This conclusion is based on the application judge’s reliance on s. 4.6(a) of the loan agreement, which states that the “obligation to pay the bonus will survive prepayment.” Furthermore, the prepayment was made on March 5, mere days before the Phoenix sale closed on March 13. The Phoenix parties cannot fairly argue that the obligation to pay the bonus was some uncertain future obligation.

The “voluntariness principle” suggests that a legal credit agreement does not become illegal as a result of a voluntary prepayment. Phoenix made a voluntary prepayment during the term of the loan. This payment was not required by ALP; it was entirely within the control of Phoenix. The Phoenix parties cannot rely on the prepayment to argue that when Phoenix was subsequently sold, the bonus was illegal because ALP purported to charge an effective annual interest rate that was infinite on a loan balance of zero.

(3) No. Phoenix argued that the applications judge erred because she applied the four-part test from Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573 rather than the two-part test from Morrison v. Coast Finance Ltd. (1965), 55 D.L.R. (2d) 710 (B.C. C.A.). The Court of Appeal disagreed. First, Titus is the law in Ontario. It was decided in 2007 by the Court of Appeal and re-affirmed in subsequent decisions. The Court of Appeal for Ontario has not endorsed the 1965 Morrison test. Second, the Morrison test consists of two elements: (a) an inequality in the position of the parties, arising out of the ignorance, need or distress of the weaker party; and (b) the substantial unfairness of the bargain that is obtained by the stronger party. Even if the Morrison test were applicable, Phoenix has not established that this test was met.

(4) No.Phoenix argued that BDC may only structure loans that are in accordance with the objects set out in ss. 4(1) and 4(2) of its enabling legislation, the Business Development Bank of Canada Act, S.C. 1995, c. 28 (the “BDC Act”). These objects are to “support Canadian entrepreneurship by … raising funds or capital” and to “give particular consideration to the needs of small and medium-sized businesses”. The Phoenix parties submitted that the bonus provision did not advance BDC’s objects because the bonus constituted a “cash grab” that was detrimental to Canadian entrepreneurship. The Court of Appeal disagreed. The bonus provisions were not ultra vires. First, the objects listed were not violated. Second, subsections 14(1)(a) and 22(b) of the BDC Act provide BDC with the power to “make loans and investments” and “determine and charge interest and any other form of compensation for services [it] provides in the exercise of its powers under this Act”. A plain reading of these provisions indicates that Parliament conferred broad discretion upon BDC in the exercise of its powers under the BDC Act. It was therefore open for BDC to negotiate the rate of return and the loan structure that it did.

The Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company, 2018 ONCA 101

[Hoy, A.C.J.O., van Rensburg and RobertsJJ.A.]

Counsel:

M K Donaldson, for the appellant, State Farm Mutual Automobile Insurance Company

D Strigberger and T W Gillibrand, for the respondent, The Dominion of Canada General Insurance Company

N Colville-Reeves and J Brimfield, for the appellant, Dominion of Canada General Insurance Company (Travelers)

T L Brooks and A Alfano, for the respondent, Belairdirect Insurance

Keywords: Insurance Law, MVA, SABS, Arbitration, Standard of Review, Reasonableness, Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Intact Insurance Company v. Allstate Insurance Company of Canada, 2016 ONCA 609, Insurance Act, R.S.O. 1990, c.18, s. 268 (2), Statutory Accident Benefits Schedule , O. Reg 34/10 and 283/95, Arbitration Act, 1991, S.O. 1991, c.17

Facts:

These two appeals were heard together because they give rise to the same main issues: the standard of review applicable to insurance arbitral decisions resolving priority disputes arising from the statutory accident benefits regime under the Insurance Act, R.S.O. 1990, c. I.8, and statutory and contractual interpretation issues affecting the priority question.  Both appeals involve arbitral decisions concerning the interpretation of “insured person” under s. 3(1) of the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (“SABS”), as applied to the particular provisions of the claimants’ respective insurance policies. The question is whether the claimants, who were both listed as excluded drivers on their parents’ automobile policies, were covered for SABS when not driving the vehicles to which their driving exclusions applied. This will determine which insurer has first priority to respond to the claimants’ SABS claims.

Under s. 3(1) of the SABS, an “insured person” is defined as “any person specified in the policy as a driver of the insured automobile”.  In the arbitration that was the subject of the State Farm appeal (“State Farm arbitration”), the arbitrator found that an excluded driver can be an “insured person” under the SABS. The appeal judge applied a standard of correctness and overturned the arbitrator’s decision. In the arbitration leading to the Dominion appeal (“the Dominion arbitration”), the arbitrator was also of the view that an excluded driver can be an “insured person” under the SABS. However, he concluded that he was bound by the appeal decision in the State Farm appeal. The appeal judge, who was not similarly bound, applied a reasonableness standard to the arbitrator’s underlying reasoning and found that his original interpretation was reasonable.

Issues:

(1) What is the appropriate standard of review of the arbitrators’ decisions?

Holding:

State Farm appeal allowed. Dominion appeal dismissed.

Reasoning:

Prior to considering the issue, the Court of Appeal determined that the standard of review applicable to the appeal judges’ determination of the standard of review is a correctness standard.

(1) The standard of review of the arbitrators’ decisions is reasonableness. The decision in Intact Insurance Company v. Allstate Insurance Company of Canada, 2016 ONCA 609 involved an insurance arbitrator’s determination of a priority dispute between two insurers concerning the payment of statutory accident benefits. To resolve this issue, the arbitrator had to determine whether the claimants were principally dependent for financial support on the insured, their mother’s new partner. This required the arbitrator to make factual findings concerning the relationship between the claimants and the insured, in accordance with the arbitrator’s interpretation of the relevant insurance policy and statutory provisions. The Court of Appeal in Intact found that in cases such as this, even an extricable question of law is reviewed on a reasonableness standard. This standard of review recognizes the expertise of insurance arbitrators. It was further noted that where a decision-maker is interpreting its home statute, or statutes closely connected to its function, there is a presumption that a reasonableness standard will apply.

Dominion argued that the reasoning in Intact should not apply because it involved a question of mixed fact and law rather than a pure question of law. The Court of Appeal did not accept this contention. The Court found that Dominion’s characterization of Intact as a fact-driven case was too narrow. In addition, the depiction of the standard of review dispute as simply one of choosing between “a mixed fact and law exercise” or “an extricable legal error”, without regard for the nature of the decision-maker, was explicitly rejected by the Court in Intact. Furthermore, the Supreme Court also recently confirmed in Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 that while the nature of the question (whether legal, factual, or mixed) is dispositive of the standard of review applicable to appeals from civil litigation judgments by courts, it is not dispositive in the context of commercial arbitral awards by specialized arbitrators.

The Court of Appeal also distinguished both Intact and the present appeal from the Supreme Court decision of Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37. The Court stated that in Ledcor, unlike in Intact, there was no expert arbitral decision-maker involved. Rather, the court in Ledcor was dealing with an appeal from a trial judge’s interpretation of a standard form contract. In Ledcor, the Supreme Court articulated the interpretation of a standard form contract as an exception to the rule that contractual interpretation by a specialized arbitrator is a question of mixed fact and law subject to deferential review on appeal. The court held that an appeal from a trial judge’s interpretation of a standard form contract, that has precedential value and does not require engagement with any meaningful factual matrix, is a question of law that should be reviewed for correctness. In Ledcor, the court was not assessing a specialized arbitrator’s interpretation of the home statute and the exercise of specialized expertise, which would have given rise to a deferential standard of review.

Here the Court found that neither appellant had identified an exceptional question that would serve to rebut the reasonableness standard. Accordingly, the standard of review should have been reasonableness.

Short Civil Decisions

Andrews v. Andrews, 2018 ONCA 81

[Pepall, Hourigan and Brown JJ.A]

Counsel:

A Semaan, for the appellant

L Di Pierdomenico, for the respondent
Keywords: Family Law, Child Support, Striking Pleadings

Mohawks of the Bay of Quinte v. Brant, 2018 ONCA 82

[Laskin, Sharpe and Fairburn JJ.A]

Counsel:

Andrew Clifford Miracle, In Person

Roger Horst, for the respondent
Keywords: Aboriginal Law, Contracts, Creditor-Debtor, Evidence

Ontario (Provincial Police) v. Assessment Direct Inc., 2018 ONCA 78

[Doherty, LaForme and Paciocco JJ.A]

Counsel:

J Patton, for the applicants

R Shekter and K Wong, for the respondents

E Dann, for the referee
Keywords: Constitutional Law,  Freedom from Unreasonable Search and Seizure, Litigation Privilege

Allingham (R.C. Allingham Construction) v. Perrault, 2018 ONCA 92

[Sharpe, LaForme and van Rensburg  JJ.A]

Counsel:

C H Culic, for the appellants

C E Wright, for the respondent
Keywords: Contracts, Interpretation, Evidence, Witnesses, Credibility, Expert Opinions

Bank of Montreal v. Serpa, 2018 ONCA 94

[Simmons, Roberts and Nordheimer JJ.A]

Counsel:

Paul Serpa, in Person

C Staples, for the respondent
Keywords: Contracts, Debtor-Creditor, Dismissal for Delay

Galati v. Galati, 2018 ONCA 93

[Simmons, Roberts and Nordheimer JJ.A]

Counsel:

M A Cummings, for the appellant

no one appearing for the respondent
Keywords: Family Law, Divorce, Uncontested Trial

Levesque v. Crampton Estate, 2018 ONCA 75

[Strathy C.J.O., Gillese and Pardu JJ.A]

Counsel:

J B Barnes, for the respondent/appellant on the appeal

S Cavanagh, for the moving party/ respondent on the appeal
Keywords: Motion for Reconsideration

Reece v. Toronto (Police Services Board), 2018 ONCA 91

[Sharpe, LaForme and van Rensburg JJ.A]

Counsel:

D Zarek, for the respondent, Certas Direct Insurance Company, improperly named as Desjardins General Insurance

N Kolos, for the respondent, Toronto Police Services Board
Keywords: Torts, Fraud, Racial Profiling, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B

Berkley Insurance Company v. Rob Piroli Construction Inc., 2018 ONCA 74

[Laskin, Sharpe and Fairburn JJ.A]

Counsel:

M Shulgan, for the appellant

S Ingram, for the respondent
Keywords: Appeal Book Endorsement

Blair v. (Re), 2018 ONCA 97

[Doherty, Pepall and Brown JJ.A]

Counsel:

H Chaiton, for the moving party, Patricia Virc

Finley Lawrence Blair, the responding party, appearing in-person
Keywords: Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, s. 193

Turtle Creek Landscape Inc. v. Summit Auto Brokers Inc., 2018 ONCA 95

[Sharpe, LaForme and van Rensburg JJ.A]

Counsel:

L Reece, for the appellant

S Cadili, for the respondent
Keywords: Civil Procedure, Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7

Ontario Review Board Decisions

LePage (Re), 2018 ONCA 89

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A]

Counsel:

S E Fraser, for the appellant

C Tier, for the respondent

J Blackburn, for the Person in Charge, Waypoint Centre for Mental Health Care
Keywords: Review Board, Criminal Law, Mental Health Law, Criminal Code s. 672.78(3)(b), Amicus Curiae

Criminal Decisions

R v. F.H.L., 2018 ONCA 83

[Watt, Epstein and Brown JJ.A]

Counsel:

P Giancaterino and M Sciarra, for the appellant

A Cappell, for the respondent
Keywords: Publication Ban, Criminal Law, Sexual Assault, Sentencing, R. v. Gladue, [1999] 1 S.C.R. 688, Gladue Principles

R v. Kazenelson, 2018 ONCA 77

[Simmons, Lauwers and Pardu JJ.A]

Counsel:

B H Greenspan and L P Strezos, for the appellant

D Krick, for the respondent
Keywords: Criminal Law, Criminal Negligence, Workplace Accident, Sentencing

R v. Rocha, 2018 ONCA 84

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A]

Counsel:

P J I Alexander, for the appellant

Tanit Gilliam, for the respondent
Keywords: Criminal Law, Possession, Cocaine, Trafficking, Property Obtained by Crime, Canadian Charter of Rights and Freedoms, Search and Seizure, R. v. Garofoli, [1990] 2 S.C.R. 1421, R. v. Debot, [1989] 2 S.C.R. 1140

R v. Berry, 2018 ONCA 86

[Hoy A.C.J.O., Sharpe and Rouleau JJ.A]

Counsel:

A Moustacalis, for the appellant

N Dennison, for the respondent
Keywords: Criminal Law, Aggravated Assault, Evidence, Adverse Inferences, Eyewitness Testimony

R v. Duffy, 2018 ONCA 90

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A]

Counsel:

M Adams, for the appellant

L Kinahan, for the respondent
Keywords: Criminal Law, Aggravated Assault, Obstruction of Justice, Circumstantial Evidence, Directed Verdict of Acquittal

R v. D.A., 2018 ONCA 96

[Doherty, LaForme and Paciocco JJ.A]

Counsel:

M Sandler and A Ross, for the appellant

A Hotke, for the respondent
Keywords: Publication Ban, Criminal Law, Sexual Offences, Unreasonable Delay, R. v. Jordan, 2016 SCC 27

R v. Gibson, 2018 ONCA 79

[Hoy A.C.J.O., Sharpe and Rouleau JJ.A]

Counsel:

B Snell, for the appellant

M Campbell, for the respondent
Keywords: Publication Ban, Criminal Law, Production of Records

R v. K.L., 2018 ONCA 100

[MacFarland, Pardu and Benotto JJ.A]

Counsel:

P Calarco, for the appellant

R Young, for the respondent
Keywords: Publication Ban, Criminal Law, Evidence, Credibility

R v. Brownlee, 2018 ONCA 99

[Rouleau, Pepall and Miller JJ.A]

Counsel:

J N Pepper, for the appellant

A Hotke, for the respondent
Keywords: Criminal Law, Theft, Possession of Property Obtained by Crime, Sufficiency of Reasons, R. v. W.(D.), [1991] 1 S.C.R. 742, Kienapple v. R., [1975] 1 S.C.R. 729

R v. Correia, 2018 ONCA 104

[Juriansz, Watt and Miller JJ.A]

Counsel:

S O’Connell, for the appellant

C Harper, for the respondent
Keywords: Criminal Law, Aggravated Assault, Mischief of Property, Dangerous Operation of a Motor Vehicle, Sentencing

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 (JANUARY 22 – JANUARY 26, 2018)

Good evening.

It was a busy week for the Ontario Court of Appeal. Numerous decisions were released on such issues as estates litigation, wrongful dismissal, the liability of directors and officers for acts of the corporation, insider trading and tipping, fraud and franchise law, among other issues.

In a positive decision for franchisors, the Court allowed the franchisor’s appeal in Raibex Canada Ltd. v. ASWR Franchising Corp.. The Court held that the failure to disclose in a franchise disclosure document served under the Arthur Wishart Act a lease for a location that did not yet exist, and the cost of upgrading an existing location rather than building one out from a shell, did not entitle the franchisee to the two-year rescission remedy under ss 6(2) of the AWA.

In Finkelstein v. Ontario Securities Commission, a regulatory prosecution, the Court discussed the test for establishing insider trading and insider tipping under Section 76(5)(e) of the Securities Act.

In DBDC Spadina Ltd. v. Walton, the Court discussed at length the claims and remedies of knowing assistance of breach of trust/fiduciary duty and knowing receipt of trust property in the context of whether corporations under the de facto control of a fraudster could be saddled with liability for knowing assistance or knowing receipt. The court also discussed the remedies of damages for such breaches, as well as the constructive trust remedy. Justice van Rensburg dissented because the effect of the majority’s decision would be to grant most of the remaining spoils to the large claimants and deny recovery to claimants owed smaller amounts.

Finally, I would like to invite all of our readers to attend the Top Appeals of 2017 CLE that my partner, Lea Nebel and I will be co-chairing with Justice Epstein of the Court of Appeal. The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place on Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case will be heard by the Supreme Court on February 8. Counsel on that matter, David M. Smith and Jeremy Opolsky, have agreed to participate in our panel discussion. The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the “appropriate means” analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists. The law in this area is continuing to evolve. The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has certainly received the attention of the plaintiffs’ personal injury bar and the media and has, no doubt, been a catalyst behind the Law Society’s efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

Wishing everyone a very nice weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

Table of Contents

Bennett v. Bennett Estate, 2018 ONCA 45

Keywords: Contracts, Real Property, Rights of First Refusal, Privity of Contract

Grabarczyk v. 2198802 Ontario Limited, 2018 ONCA 47

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Applications, Actions

Iaboni Estate v. Iaboni, 2018 ONCA 48

Keywords: Wills and Estates, Passing of Accounts, Notices of Objection

DAC Group (Holdings) Limited v. Fuego Digital Media Inc., 2018 ONCA 43

Keywords: Civil Procedure, Appeals, Jurisdiction,  Stay Pending Appeal, Final or Interlocutory Orders, Arbitrations, Arbitration Act, 1991 S.O. 1991, s. 50 (5),(8)

Ceballos v. DCL International Inc., 2018 ONCA 49

Keywords: Employment Law, Wrongful Dismissal, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Corporations, Liability of Officers and Directors, Piercing Corporate Veil, Rules of Civil Procedure, Rule 21

Wittington Properties Limited v. Goodlife Fitness Centres Inc., 2018 ONCA 52

Keywords: Real Property, Commercial Leases, Options to Renew, Remedies, Relief from Forfeiture, 1383421 Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.)

El-Khodr v. Lackie, 2018 ONCA 66

Keywords: Civil Procedure, Appeals, Motions for Reconsideration or Rehearing, Procedural Fairness, Notice, Stare Decisis, Over-Ruling Prior Jurisprudence Deciding Issues Not Argued, Statutory Accident Benefits, Bannon v. Hagerman Estate (1998), 38 O.R. (3d) 659 (C.A.), Ontario Drug Benefit Program

Finkelstein v. Ontario Securities Commission, 2018 ONCA 61

Keywords: Administrative Law, Securities Regulation, Insider Trading, Insider Tipping, Securities Act, R.S.O. 1990, c. S.5, ss. 76 and 127

York (Regional Municipality) v. Tomovski, 2018 ONCA 57

Keywords: Civil Procedure, Appeals, Jurisdiction, Appeals from Reasons, Provincial Offences Act, R.S.O. 1990, c. P., s. 139, Presumptive Delay Ceiling, R v. Jordan, 2016 SCC 27, Stay of Proceedings, Canadian Charter of Rights and Freedoms, s. 11(b)

1418885 Ontario Ltd. v. 2193139 Ontario Limited, 2018 ONCA 54

Keywords: Real Property, Agreements for Purchase and Sale of Land, Conditions, Requisitions, Zoning, Residential Rental Units, Legal Non-Conforming Use, Waiver, Civil Procedure, Summary Judgment

DBDC Spadina Ltd. v. Walton, 2018 ONCA 60

Keywords: Torts, Fraud, Breach of Fiduciary Duty, Knowing Assistance of Breach of Trust, Knowing Receipt of Trust Property, Unjust Enrichment, Joint and Several Liability, Corporations, Controlling Mind, Identification Doctrine, Canadian Dredge and Dock Company Limited v. R., [1985] 1 S.C.R. 662, Remedies, Constructive Trust, Indalex Ltd., Re, 2013 SCC 6, Damages

Raibex Canada Ltd. v. ASWR Franchising Corp., 2018 ONCA 62

Keywords: Contracts, Franchise Law, Rescission, Disclosure, Misrepresentation, Damages, Arthur Wishart Act, 2000, S.O. 2000, ss. 3, 5, 6 & 7, Caffé Demetre Franchising Corp. v. 2249027 Ontario Inc., 2015 ONCA 258, Canada Inc. v. Dollar It Ltd., 2009 ONCA 385, Fresh Evidence, Sengmueller v. Sengmueller (1994), 17 O.R. (3d) 208 (C.A.), Civil Procedure, Summary Judgment

Tam v. El-Hawary, 2018 ONCA 70

Keywords: Corporations, Oppression, Affiliates, Ontario Business Corporations Act, R.S.O. 1990, c. B.16, s 1 (4)

Conner v. Scotia Capital Inc., 2018 ONCA 73

Keywords: Employment Law, Wrongful Dismissal, Striking Pleadings, Frivolous, Vexatious or Abuse of Process, Rules of Civil Procedure, Rule 21.01(3)(d), Summary Judgment

Criminal Decisions

Short Civil Decision and Ontario Review Board Decision

 

Civil Decisions:

Bennett v. Bennett Estate, 2018 ONCA 45

[Feldman, MacPherson and Huscroft JJ.A.]

Counsel:

William V. Sasso, for the appellant

Christopher Statham, for the respondent A. Miron Topsoil Ltd.

No one appearing for the respondents the Estate of Joyce Margaret Bennett, Deceased, Alan Leslie Soles and Bertram Shan Soles

Keywords: Contracts, Real Property, Rights of First Refusal, Privity of Contract

Facts:

The Bennett brothers (Donald, John, Dennis and George) divided a large parcel of land given to them by their father into separate properties, and entered into an agreement establishing a right of first refusal in the event of a sale of any of the properties by any of them. Donald Bennett died in 2006 and is survived by his wife Darlene Bennett. John Bennett died in 2009, and his property was transferred to his wife Joyce and her sons, Bertram Shaun Soles and Alan Leslie Soles.

In 2012, Joyce and her sons proposed to sell their property to Miron Topsoil Ltd. The agreement of purchase and sale acknowledged the right of first refusal agreement. Notice of the offer to sell to Miron was given by the vendor’s lawyer to the surviving brothers, Dennis and George, as well as to Darlene Bennett.

Darlene Bennett provided notice that she was exercising the right to purchase the property under the right of first refusal, and provided the required deposit. Both Miron and Darlene Bennett took the position that they were entitled to purchase the property. Neither proposed sale of the property closed. Darlene Bennett brought a motion for summary judgment requesting an order of specific performance granting her the right to purchase the property. Miron responded with its own motion for summary judgment, requesting an order dismissing Darlene Bennett’s claim on the basis that she was not entitled to exercise the right of first refusal.

The motion judge found that the right of first refusal agreement clearly limited the right of first refusal to parties to the agreement, a right that did not extend to “family members” of the parties. Darlene Bennett could not exercise the right of first refusal because she was not a party to the agreement.

Issues:

(1) Was Darlene Bennett entitled to exercise the right of first refusal on the basis that she was a “family member” under the agreement?

Holding: Motion dismissed.

Reasoning: No. There was no evidence before the motion judge and the Court of Appeal concerning the appellant’s ability to exercise the right of first refusal on behalf of the estate. The vendor’s simple act of extending the offer to the appellant did not establish her legal entitlement to accept it on behalf of the estate, as the appellant asserts, nor did the respondent’s statement that the appellant “purported” to exercise the right of first refusal constitute an admission that she had done so in accordance with the agreement. The motion judge was asked to determine the appellant’s entitlement on the basis that she was a “family member”. He cannot be faulted for having done so.

The motion judge’s interpretation of the agreement is entitled to deference. It was open to the motion judge to find that the agreement was not ambiguous. On its face, the right of first refusal is limited to parties to the agreement. The problem for the appellant is that she failed to establish her ability to act on behalf of Donald Bennett’s estate.

The motion judge also did not err in his analysis of the privity of contract doctrine. The doctrine applies only where the contract in question confers the relevant benefit on a third party. The motion judge’s finding that the agreement did not confer a right of first refusal on anyone but the parties to the agreement is determinative of this analysis. In the absence of a benefit conferred on a third party, recent caselaw ameliorating the strictures of the privity doctrine and allowing third parties to enforce contractual provisions for their benefit is irrelevant and cannot assist the appellant.

Grabarczyk v. 2198802 Ontario Limited, 2018 ONCA 47

[Simmons, Roberts and Nordheimer JJ.A]

Counsel:

Julian Binavince, for the appellants

Jonathan Rosenstein, for the respondent

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Applications, Actions

Facts:

The appellant, 2198802 Ontario Limited (the “appellant”), offered to purchase real property from the respondent under an offer that was accepted on October 10, 2015. The offer stipulated that it was conditional on the appellant satisfying itself of certain matters, and that unless the appellant gave notice in writing “not later than 11:59 p.m. thirty (30) days after acceptance, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned” (the “due diligence clause”). The 30-day period elapsed on November 9, 2015. The appellant did not deliver notice in writing that the condition was satisfied by that date. Nonetheless, the appellant submitted an Amendment to Agreement of Purchase and Sale to the respondent that was accepted on November 14, 2015. The Amendment purported to delete the due diligence clause from the original agreement and to substitute an identically worded due diligence clause, save that “sixty (60)” was substituted for “thirty (30)”.

The application judge concluded that even though the original agreement had become null and void, the amendment reflected an intention to create a new agreement incorporating all the terms of the original agreement, but modifying the original due diligence period from 30 days to 60 days from the date of acceptance of the original offer.

Issues:

(1) Did the application judge err by treating the modification as a new agreement?

Holding: Appeal allowed.

Reasoning:

(1) Yes. While holding that there was a new agreement, the application judge’s interpretation treated the amendment as a resurrection of the original agreement. The application judge failed to turn her mind to the distinction between resurrection of a prior agreement; creation of a new agreement; the parties’ intentions in that regard; and the parties’ intentions had they turned their minds to the fact that the original agreement had become null and void. The record did not sufficiently address the parties’ intentions with respect to whether they turned their mind to the fact that their original agreement had become null and void. This gap created an issue requiring the matter to proceed by way of action rather than by way of application. The application judge’s order was set aside, and an order was substituted directing that the matter proceed by way of action.

Iaboni Estate v. Iaboni, 2018 ONCA 48

[Strathy C.J.O. and Hourigan and Miller JJ.A.]

Counsel:

A S Schorr, for the appellant

E Bisceglia and H Tariq, for the respondents

Keywords: Wills and Estates, Passing of Accounts, Notices of Objection

Facts:

This appeal arose from a long-running dispute between the appellant, Carlo Iaboni, and his two siblings, the respondents Ferdinando Iaboni and Norma Morretto. The subject of the dispute was the administration of the estates of their parents Umberto and Lidia Iaboni. After Lidia became incapable, the three children managed the property of both Umberto and Lidia pursuant to a power of attorney. In 2008, Carlo resigned as attorney and the respondents continued to manage the property of their parents. When Umberto died in 2010, he left his estate to Lidia. After Lidia died in 2012, there was a dispute among the siblings over the administration of her estate. Bank of Nova Scotia Trust Company (“BNS”) was appointed as estate trustee.

Prior to his mother’s death, and prior to the appointment of BNS, Carlo had objected to the respondents’ management of their parents’ property and brought an action against the respondents alleging misappropriation of funds, seeking an accounting of transactions since he resigned as trustee for property in 2008, and seeking reinstatement as a trustee for property. There was a settlement between the siblings whereby they agreed to exchange an accounting of their mother’s assets. The respondents provided an accounting, the appellant did not. The appellant took no steps to pursue the action and it was dismissed administratively for delay.

In 2015, BNS brought an application to pass accounts for Lidia’s estate, and Carlo filed a notice of objection, on substantially the same grounds as had been the basis of his earlier action that was administratively dismissed. The respondents brought a motion to strike the notice of objection, which was granted because the notice of objection was: (1) without merit, (2) an abuse of process for attempting to relitigate the subject matter of the appellant’s dismissed action; and (3) time-barred under the Limitations Act, 2002. At the hearing, Carlo consented to the passing of accounts from the time of the appointment of BNS, but not before.

Issues:

  • Did the motion judge err in striking the notice of objection?

Holding: Appeal dismissed

Reasoning:

  • The appellant consented to the passing of accounts from the time of the appointment of BNS, and has not appealed that aspect of the order. The motion judge made findings of fact that the appellant had not substantiated his suspicions. That was fatal to the appeal, as those findings were entitled to deference.

DAC Group (Holdings) Limited v. Fuego Digital Media Inc., 2018 ONCA 43

[Benotto J.A. (In Chambers)]

Counsel:

Kevin Higgins, self-represented, appearing for the Moving Party

L Theall and M Wright, for the Responding Party

Keywords: Civil Procedure, Appeals, Jurisdiction,  Stay Pending Appeal, Final or Interlocutory Orders, Arbitrations, Arbitration Act, 1991 S.O. 1991, s. 50 (5),(8)

Facts:

The parties to this motion attended arbitration concerning the ownership of certain software. The arbitrator declared that the respondent (“DAC”) owned the software, provided for injunctive relief, and ordered costs of over $1.5 million.  Fuego Digital Media Inc.  (“Fuego”) commenced an application under s. 46 of the Arbitration Act, 1991 S.O. 1991, c.17 to set aside parts of the award. The application judge stayed the award pending final determination pursuant to section 50(5) and 50(8) of the Arbitration Act.

Issue:

(1) Is an order granting a conditional stay of enforcement of an arbitration award final or interlocutory?

Holding:Appeal quashed.

Reasoning:

(1) The order is interlocutory and jurisdiction lies with the Divisional Court, not the Court of Appeal. First, the merits of Fuego’s application remain to be determined. Second, the award is under s. 50(5) of the Arbitration Act which confirms that a final order has yet to be made. This matter is pending and remains before the court for a final determination under s. 50(3) of the Arbitration Act.

Ceballos v. DCL International Inc., 2018 ONCA 49

[Simmons, Roberts and Nordheimer JJ.A.]

Counsel:

Danilo Ceballos in person

Jaime VanWeichen and Heidi LeBlanc, for the respondents

Keywords: Employment Law, Wrongful Dismissal, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Corporations, Liability of Officers and Directors, Piercing Corporate Veil, Rules of Civil Procedure, Rule 21

Facts:

The appellant, Danilo Ceballos, appealed from the order of the motion judge that struck out his claim against the individual respondent, George Swiatek.

The appellant was employed by DCL International Inc.  He was first laid off from his employment and then subsequently his employment was terminated.  Both of these actions were taken by way of letters signed by Mr. Swiatek, in his capacity as the President and Chief Executive Officer of DCL.

In his statement of claim, the appellant essentially alleged that the reason given by DCL for his termination, namely, economic downturn, were false. The appellant alleged that his employment was wrongfully terminated as a reprisal for his workplace injury claim.

The respondents brought a Rule 21 motion to dismiss the appellant’s entire action on the basis that it was statute-barred, and that the claim against Mr. Swiatek disclosed no reasonable cause of action.  The motion judge determined that the discoverability of the appellant’s claims against DCL was a triable issue.  However, the motion judge dismissed the claim against Mr. Swiatek on the basis that the appellant had not pleaded sufficient grounds that would take Mr. Swiatek’s actions outside of the scope of his duties and responsibilities as an officer of DCL so as to possibly attract personal liability.

Issues:

(1) Did the motion judge err in failing to find that the appellant pleaded allegations of tortious conduct on the part of Mr. Swiatek that would, if proven, find individual liability against him?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court stated that there is no question that, if sufficiently and adequately pleaded, allegations of conspiracy, fraudulent misrepresentation and other tortious conduct may form the basis of a reasonable cause of action against an officer or a director of a corporation.

However, to permit the piercing of the corporate veil, the claim must be specifically pleaded.

The court held that in this case, the motion judge correctly struck out the claim against Mr. Swiatek as disclosing no reasonable cause of action against him.  There was no proper and sufficient pleading of the necessary elements of a specific and separate tortious act by Mr. Swiatek, necessary to give rise to personal liability on his behalf. Therefore, the court held that it was plain and obvious that the claim, as baldly pleaded, could not succeed.

Wittington Properties Limited v. Goodlife Fitness Centres Inc., 2018 ONCA 52

[Simmons, Roberts and Nordheimer JJ.A.]

Counsel:

John K. Downing and Brian Whitwham, for the appellant

Wolfgang Kaufmann and Daniel Waldman, for the respondent

Keywords: Real Property, Commercial Leases, Options to Renew, Remedies, Relief from Forfeiture, 1383421 Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.)

Facts:

For many years, the appellant has leased premises from the respondent for the operation of a fitness club called the St. Clair Club. Under the provisions of the lease as set out in a lease amending and extension agreement, the appellant was entitled to extend the lease for an additional five years, provided the appellant was not “in default of the Lease and has not regularly been in default during the Extended Term beyond any applicable cure periods”.

The application judge determined that the appellant had breached the lease in two ways. First, by operating its club at Park Road, it breached the geographic restrictions on the non-compete clause of the lease. Second, it breached the lease by not calculating and reporting its gross revenue to the respondents, which formed the basis for the calculation of its percentage rental payments under the lease. The application judge further determined that the appellant was given ample notice to cure its defaults under the lease but did not do so.

Issues:

(1) Did the application judge make an overriding and palpable error in her interpretation of the meaning of the non-compete provisions of the lease?

(2) Did the application judge err in determining that the admitted failure to accurately report gross revenue constituted a breach of lease?

(3) Did the application judge err in failing to find that the doctrine of promissory estoppel and waiver applied in this case?

(4) Did the application judge err in failing to grant the appellant relief from forfeiture of its option to extend the lease because any breaches were “technical” in nature?

Holding: Appeal dismissed.

Reasoning:

(1) No. The application judge’s conclusions about the breach caused by the operation of the Park Road Club were open to her based on her interpretation of the lease and the other evidence before her.

(2) No. These conclusions were firmly rooted in the evidence. This evidence included the report of the accountant retained by the respondent under the audit provisions of the lease and the admissions made by the appellant’s Vice President of Accounting.

(3) No. There was no evidence to support the appellant’s argument with respect to either waiver or promissory estoppel.

(4) No. The evidence did not satisfy a necessary condition for relief from forfeiture, namely, evidence that “the tenant has made diligent efforts to comply with the terms of the lease which are unavailing through no default of his or her own”: see 1383421 Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.), at para. 80.

El-Khodr v. Lackie, 2018 ONCA 66

[Doherty, MacFarland and Rouleau JJ.A.]

Counsel:

J Y Obagi and E A Quigley, for the moving party

B A Percival, Q.C. and J W Gibson, for the responding parties

Keywords: Civil Procedure, Appeals, Motions for Reconsideration or Rehearing, Procedural Fairness, Notice, Stare Decisis, Over-Ruling Prior JurisprudenceDeciding Issues Not Argued, Statutory Accident Benefits, Bannon v. Hagerman Estate (1998), 38 O.R. (3d) 659 (C.A.), Ontario Drug Benefit Program

Facts:

By way of a motion in writing, the moving party seeks an order: (i) withdrawing the reasons for decision in this appeal dated September 19, 2017; (ii) granting a rehearing of the within appeal before the same five-judge panel that is scheduled to hear a new trilogy of cases in Carroll v. McEwen (C62293); Cadieux v. Cloutier (C63160) and Persad v. Silva (C62935); (iii) in the alternative, a stay of the decision rendered in this appeal, pending determination in the appeal in that new trilogy of cases, which involve issues that over-lap to those that were considered in the within appeal; and (iv) such further and other relief as the Honourable Court may deem just.

Issues:

(1) Did the three-judge panel of the Court of Appeal, in its ruling in this matter, effectively over-rule Bannon v. Hagerman Estate (1998), 38 O.R. (3d) 659 (C.A.) and its progeny without notice to counsel that it intended to do so and where any such challenge could only and ought to have been heard by a five-judge panel?

(2)  Did the Court of Appeal address an entirely new issue in its reasons, one not raised by either party, dealing with the trial judge’s treatment of the Ontario Drug Benefit Program, and, in so doing, ignore relevant jurisprudence of the Court of Appeal in Lurtz v. Duchesne (2005) 194 O.A.C. 119 (Ont. C.A.)?

Holding: Motion dismissed.

Reasoning:

(1) No. The Court of Appeal did not overrule Bannon. While the court’s reasons, in particular paras. 55 through 61, call into question whether Bannon remains good law in Ontario, nowhere in the reasons does the court “overrule Bannon”, as suggested by the moving party.

(2) No. The Treatment of the Ontario Drug Benefit Program was not a new issue. The issue of the Ontario Drug Benefit Program and its applicability was argued during the appeal. The trial judge’s treatment of the issue was the subject of a ruling made at trial after the point was argued before her. In the Court of Appeal, the issue was squarely addressed by the moving party at paras. 66 through 70 of his factum filed in the appeal, and in paras. 32 through 35 of the responding parties’ factum filed in the appeal. The issue of whether the liability insurer of the responding parties was entitled to an assignment of the moving party’s entitlement to statutory accident benefits payments in relation to these expenses was directly before the court and was the subject of oral argument by both parties.

The Court of Appeal also noted that the moving party did not appropriately bring their motion. Issues raised in this motion are properly the subject of further appeal, and not a motion for reconsideration.

Finkelstein v. Ontario Securities Commission, 2018 ONCA 61

[Simmons, Rouleau and Brown JJ.A.]

Counsel:

S Bieber and I Graham, for the appellant Howard Jeffrey Miller

J Wright and G Temelini, for the respondent Man Kin (Francis) Cheng

J M Lynch and C Johnson, for the respondent/appellant Ontario Securities Commission

Keywords: Administrative Law, Securities Regulation, Insider Trading, Insider Tipping, Securities Act, R.S.O. 1990, c. S.5, ss. 76 and 127

Facts:

The Ontario Securities Commission (“OSC”) initiated administrative proceedings against five individuals, including the appellant Howard Miller and the respondent Francis Cheng, alleging they had breached the insider trading and tipping provisions of the Securities Act, R.S.O. 1990, c. S.5 (the “Act”), and had acted contrary to the public interest by recommending to family and clients the purchase of shares in a reporting issuer, Masonite International Corporation (“Masonite”). The OSC alleged Miller and Cheng stood in a special relationship with Masonite and had informed another person of a material fact with respect to the issuer before the material fact had been generally disclosed.

The OSC alleged the material, non-public information about Masonite flowed through a chain of five people. Dissemination of the information originated with Mitchell Finkelstein, a mergers and acquisitions lawyer in Toronto who was working on a takeover bid involving Masonite. Finkelstein informed an investment adviser friend in Montreal, Paul Azeff, of material facts about the bid. In turn, Azeff informed a Montreal accountant, L.K., who passed the information on to the appellant, Howard Miller, an investment advisor in Toronto, who then conveyed the information to his associate, Francis Cheng, an investment advisor at the same firm. Finkelstein learned that Masonite had agreed to a takeover transaction that would be completed quickly. Both Miller and Cheng conceded that this information was material, non-public information, as defined in the Act. Miller was Cheng’s mentor.

By Reasons and Decision dated March 24, 2015 (the “Merits Decision”), the OSC hearing panel (the “Panel”) found that Finkelstein, Azeff, Bobrow, Miller, and Cheng were in a special relationship with Masonite and had informed others of material facts concerning Masonite before they had been generally disclosed, contrary to s. 76(2) of the Act and contrary to the public interest in violation of s. 127. As well, the Panel found Azeff, Miller, and Cheng each purchased Masonite securities with knowledge of undisclosed material facts contrary to s. 76(1) and the public interest. The Panel imposed administrative sanctions on the five by reasons dated August 24, 2015 (the “Sanctions Decision”).

The Divisional Court allowed Cheng’s appeal but dismissed all others. Miller’s leave to appeal to the Court of Appeal was granted, as was the OSC’s appeal with respect to Cheng. There was no dispute Miller and Cheng received material, non-public information about Masonite. At issue was the Panel’s interpretation and application of s. 76(5)(e) in finding that Miller and Cheng “ought reasonably to have known” that their respective tippers stood in a special relationship with Masonite.

Issues:

(1) Was the Panel’s interpretation of S.76(5)(e) of the Act reasonable?

(2) Was the Panel’s finding that Miller contravened ss. 76(1) and (2) of the Act, together with the public interest, reasonable?

(3) Was the Panel’s finding that Cheng contravened ss. 76(1) and (2) of the Act, together with the public interest, reasonable?

(4) Were the Panel’s sanctions against Cheng reasonable?

Holding: Miller appeal dismissed. OSC appeal granted.

Reasoning:

Prior to discussing the issues, the Court of Appeal first considered the statutory scheme of the Act. The Court noted that “the prohibition in s. 76(1) against insider trading is a significant component of the schemes of investor protection and of the fostering of fair and efficient capital markets and confidence in them” and that “it would be grossly unfair to permit a person who obtains undisclosed material information with respect to a reporting issuer because of his relationship with the issuer to trade with the informational advantage this gives him or her.” The Court of Appeal noted as well that insider trading undermines investor confidence in capital markets, stating that it is for this reason that the OSC regards insider tipping as conduct just as serious as illegal insider trading.

The Court then went on the review the definition of “person in a special relationship” with the issuer. The Court found that this definition creates two categories: The first encompasses those who are part of, or very closely connected to, the issuer, as set out in ss. 76(5)(a)-(d). The second encompasses those further removed from the issuer but who receive material, non-public information in the circumstances specified in s. 76(5)(e). The Court noted that “the core of this appeal concerns the interpretation of s. 76(5)(e) and its application to the circumstances of Miller and Cheng. Specifically: were Miller and Cheng persons who learned of a material fact with respect to the issuer, Masonite, from any other person who was a “person in a special relationship with the issuer”, and ought they reasonably to have known that the other person was a person in such a relationship?”

(1) Yes. Miller and Cheng take issue with a set of factors the Panel used to guide its application of the “person connection” requirement to the specific circumstances of the case. In their view, the use of the factors resulted in an unreasonable interpretation and application of s. 76(5)(e).  Section 76(5)(e) contains two requirements to establish liability: an “information connection” and a “person connection.” The parties regard as reasonable the Panel’s interpretation of how the “information connection” is established. The opening language of s. 76(5)(e) describes the “information connection” requirement: the person “learns of a material fact or material change with respect to the issuer” from any other person in a special relationship.  To prove the tippee possesses knowledge of a material fact or material change that has not been generally disclosed, the adjudicator must contrast the knowledge of the tippee with the information available in the public domain.

The “person connection” test requires a demonstration that the recipient of material, non-public information “ought reasonably to have known” that the person who provided the information was in a special relationship with the issuer. This is an objective test. The Panel explored a number of factors to reach its determination. Those factors are: (a) the relationship between the tipper and the tippee (e.g., close friends, are they aware of the tipper trading patterns); (b) The professional qualification of the tipper; (c) the professional qualification of the tippee; (d) how detailed and specific the information is; (e) how long after the information is received does the tippee trade; (f) did the tippee take any steps to verify the information; (g) has the tippee owned the stock before; and (h) was the trade a significant one relative to the size of the tippee’s portfolio.

Miller argued that all the Factors fundamentally diverge from the plain language of s. 76(5)(e) and, therefore, constitute an unreasonable interpretation of the section. He contends the language of the section mandates an inquiry into the informant/tipper’s special relationship with the issuer and what the tippee ought to have known about that relationship. Instead, the factors focus on the relationship between the tipper and the tippee, not on that between the tipper and the issuer.

Cheng’s quarrel with the factors is narrower in scope. He acknowledges the factors are relevant to the application of the objective knowledge test. However, he contends two of the factors are not relevant: the lapse of time between the tippee receiving the information and initiating a trade, and the intermediate steps taken by the tippee to verify the information before trading.

The “knows or ought reasonably to have known” requirement in s. 76(5)(e) focuses on the state of the tippee’s knowledge about whether the information was conveyed to him by a person in a special relationship with an issuer. Section 76(5)(e) extends the chain of potential liability by including as a proscribed source of information “a person or company described in this clause,” that is a person whom the tippee “knows or ought reasonably to have known” was a person or company in a special relationship with the issuer. This provision catches tippees who, themselves, convey information they have received to others. Section 76(5)(e) calls for an inquiry into the tippee’s knowledge of his tipper’s connection with the issuer or any other person in a special relationship with the issuer who stood higher up the information chain and from whom the tipper received the information.

There was no dispute that Miller and Cheng did not have actual knowledge that their informant, or tipper, was in a special relationship with Masonite. The question before the Panel was: ought they reasonably to have known? As observed by the Panel, the reality of most insider trading cases is that circumstantial evidence “usually forms the bulk of the evidence in cases where insider trading and tipping is alleged.”  In such circumstances, it was reasonable for the Panel to identify certain factors, or groups of circumstantial evidence, that could assist in drawing permissible inferences as to whether it was more likely than not that insider trading and tipping had occurred. Miller contends that the factors focus exclusively on the “information connection” and not the “person connection.” The Court of Appeal disagrees. Factor (b) directs a panel to look into the tipper’s qualifications and employment to ascertain whether the tipper holds a position that puts him or her in a milieu where transactions are discussed. The Court of Appeal finds that all the factors used by the Panel were reasonable in addressing whether the parties “ought reasonably to have known” the person from whom they received information was in a special relationship with the issuer. The factors point to a consideration of certain groups of circumstantial evidence that may permit drawing a deduction, in a logical and reasonable fashion, about the tippee’s state of knowledge of the relationship between the tipper and the issuer or another person in a special relationship higher up the information chain. The probative value of such evidence will depend upon the specific circumstances, when considered in light of the totality of the evidence.

(2) Yes. Miller submits the Panel’s findings that he contravened ss. 76(1) and (2) of the Act and acted contrary to the public interest was unreasonable because it failed to find that L.K., the person from whom Miller received the Masonite MNPI, was in a special relationship with Masonite.

The Divisional Court rejected a similar argument made by Miller concluding that while the Panel did not make an express finding that L.K. was in a special relationship, it undertook an analysis of the issue, and a finding that L.K. stood in a special relationship was implicit in its reasons. The court agreed with the Divisional Court’s conclusion.

(3) Yes. The Panel found that Cheng learned of the Masonite MNPI from Miller, a person whom he ought reasonably to have known was in a special relationship with Masonite. Cheng therefore was a person in a special relationship with Masonite within the meaning of s. 76(5)(e). The Panel concluded that Cheng purchased Masonite securities with knowledge of material facts not generally disclosed, contrary to s. 76(1) of the Act and the public interest. The Panel also held that Cheng, with knowledge of the Masonite MNPI, recommended that a client purchase Masonite securities thereby acting contrary to the public interest.

The Divisional Court set aside those findings and allowed Cheng’s appeal. It held that the Panel made a number of factual errors in its analysis of the evidence concerning Cheng that undermined the foundation upon which the Panel concluded that Cheng ought to have known he was receiving inside information.

The court held that the function of a reviewing court, such as the Divisional Court, is to determine whether the tribunal’s decision contains an analysis that moves from the evidence before it to the conclusion that it reached, not whether the decision is the one the reviewing court would have reached: Ottawa Police Services, at para. 66. The court held that the Divisional Court failed to do so in the case of the Panel’s decision regarding Cheng. Instead, it impermissibly re-weighed the evidence and substituted inferences it would make for those reasonably available to the Panel.

In his compelled interview, Cheng admitted that Masonite was not one of the stocks he was following at the time. Cheng stated he could not recall the specifics about what he did after receiving Miller’s information about Masonite. He then talked about his normal practice, but unequivocally denied seeing any information that confirmed what Miller was telling him regarding Masonite.

At the same time, the evidence showed that immediately upon his return from Asia on November 29, 2004, Cheng started buying Masonite shares for his wife, his brother in Hong Kong, and other family members. By the end of November, Masonite shares accounted for 98% of the value of his wife’s portfolio. That evidence reasonably supported the Panel’s findings that Cheng did not conduct due diligence on Masonite after receiving Miller’s information and started “precipitously” to buy Masonite shares for family members upon receipt of the Masonite MNPI from Miller.

Accordingly, the court held that the findings of fact made and inferences drawn by the Panel in respect of Cheng were reasonably supported by the record. It set aside the Divisional Court’s ruling on this issue and restored the Panel’s decision.

(4) Yes. In its Sanctions Decision, the Panel imposed on Cheng (i) a 10-year trading ban, with carve-outs, (ii) a 10-year ban on acting as a director or officer of a reporting issuer, (iii) a 10-year ban on registration, (iv) $200,000 in administrative penalties, or $100,000 per breach, and (v) costs of $25,000. The Panel rejected OSC Staff’s request for an order that Cheng disgorge the profits made by his family members on their Masonite purchases.

In its Merits Decision, the Panel stated: “We find that neither Miller nor Cheng knew that the MNPI Miller received from LK and that Cheng received from Miller came from a knowledgeable person.” In its Sanctions Decision, the Panel stated: “As registrants, [Miller and Cheng] knew that they were utilizing MNPI…” Cheng submits these statements conflict and render the sanctions against him unreasonable.

The OSC submits the statements are not inconsistent – the statement in the Merits Decision refers to Cheng’s knowledge about where the material information came from, whereas that in the Sanctions Decision refers to Cheng’s knowledge that the information was material and non-public.

The Court accepted the OSC’s submission that the sanctions are reasonable and did not accept Cheng’s argument that the sanctions are unreasonable.

York (Regional Municipality) v. Tomovski, 2018 ONCA 57

[Juriansz J.A. (In Chambers)]

Counsel:

C G Bendick, for the moving party

R Tomovski, for the responding party

L Schwalm, for the intervener

Keywords: Civil Procedure, Appeals, Jurisdiction, Appeals from Reasons, Provincial Offences Act, R.S.O. 1990, c. P., s. 139, Presumptive Delay Ceiling, R v. Jordan, 2016 SCC 27, Stay of Proceedings, Canadian Charter of Rights and Freedoms, s. 11(b)

Facts:

The moving party (the Municipality of York), supported by the Attorney General, seeks leave to appeal a judgment in its favour. The responding party, Mr. Tomovski, was charged with speeding contrary to s. 128 of the Highway Traffic Act, R.S.O. 1990, c. H.8. The police officer laid a charge pursuant to Part I of the Provincial Offences Act, R.S.O. 1990, c. P.33 (“POA”). The responding party decided to contest the charge. The trial date was originally scheduled for May 22, 2015.

The trial date was adjourned multiple times due to certain disclosure requests and the failure to provide notice of a s. 11(b) Canadian Charter of Rights and Freedoms application to the Attorneys General for Canada and Ontario. When the s. 11(b) Charter application was finally heard on February 10, 2016, the Justice of the Peace hearing the s. 11(b) Charter application applied the analytical framework from R v. Morin, [1992] 1 S.C.R. 771, and held that the delay breached s. 11(b), and stayed the proceedings.

York appealed the stay of proceedings pursuant to s. 135 of the POA. When the matter came before the provincial court appeal judge on February 17, 2017, the Supreme Court of Canada had released its decision in R v. Jordan, 2016 SCC 27. In the provincial court appeal judge’s decision, the provincial court appeal judge held that the 18 month presumptive delay ceiling set out in R v. Jordan was “too high to adequately protect Part I [of the POA] defendants’ constitutional right to be tried within a reasonable time.” He found “the appropriate presumptive ceiling for Part I proceedings is in the 13 to 15 month range” and applied a 14 month presumptive ceiling to this case. Nevertheless, the provincial court appeal judge found that Mr. Tomovski’s s. 11(b) Charter right was not breached because a significant portion of the delay was attributable to Mr. Tomovski. He allowed York’s appeal and ordered a new trial.

York proposes that leave to appeal should be granted on the following questions of law:

(a) What should the presumptive delay ceiling be?

(b) How should s. 11(b) of the Charter be applied for Part I POA proceedings commenced by a certificate of offence?

Issues:

(1) Should leave to appeal be granted on the questions of law proposed by York?

Holding: Motion dismissed.

Reasoning:

(1) No. There is no question that the proposed questions of law transcend the immediate case and pertain to the administration of justice generally in the province. The issue is whether York is seeking leave to appeal from a “judgment” of the provincial court appeal judge rather than his reasons and thus whether the court has jurisdiction to hear the appeal. It is well established that “[a]n appeal lies from the judgment, not the reasons for judgment”: R v. Sheppard, 2002 SCC 26.

York and the Attorney General submit that the word “judgment” in s. 139 of the POA is broad enough to allow an appeal of the provincial court appeal judge’s determination that the presumptive delay ceiling for Part I POA proceedings is in the 13 to 15 month range. York points out that s. 135 of the POA only provides a right of appeal from “an acquittal, conviction or sentence” entered by a Justice of the Peace to a judge of the Ontario Court of Justice whereas s. 139 allows leave to appeal from any “judgment”.

The Court of Appeal did not find the text of s. 135 helpful, nor did it find the authorities submitted by York and the Attorney General, and the subsequent case law, to be persuasive. York argues it is seeking leave to appeal from the provincial court appeal judge’s “decision” that the presumptive delay ceiling for Part I POA proceedings is 13 to 15 months. While the Court of Appeal accepted that a “judgment” appealable under s. 139 may in some circumstances be described as a “decision”, it was not persuaded that s. 139 extends to a “decision” in the sense York suggests.

The proposed appeal seeks an advisory opinion of the court that is detached from the underlying facts. Ontario courts have repeatedly held that appeals cannot be based on a disagreement with certain determinations within the reasons for judgment.

1418885 Ontario Ltd. v. 2193139 Ontario Limited, 2018 ONCA 54

[Simmons, Roberts and Nordheimer JJ.A.]

Counsel:

David Goodman, for the appellant

Charles Chang, for the respondent

Keywords: Real Property, Agreements for Purchase and Sale of Land, Conditions, Requisitions, Zoning, Residential Rental Units, Legal Non-Conforming Use, Waiver, Civil Procedure, Summary Judgment

Facts:

The respondent was the owner of land and entered into an agreement of purchase and sale (the “APS”) with the appellant to buy the Property. Two deposits were to be paid.  The Property had been advertised for sale as containing a variety of buildings, including residential apartments. An issue arose respecting the residential apartments and whether they were a permitted use under the existing zoning by-law applicable to the Property. The lawyer for the appellant submitted a requisition that required the respondent to provide “on or before closing an amendment to the local zoning bylaws to permit the current use to continue legally after closing”. The lawyer for the respondent rejected this requisition and advised that the residential apartments were “a legal non-conforming use”.

The lawyer for the appellant suggested that if a resolution could not be reached, the deposits had to be returned. On the day set for closing, the lawyer for the appellant advised the lawyer for the respondent that the appellant would not be closing the purchase because of the issue over the residential apartments.

This claim was then commenced by the appellant for the return of the deposits. After pleadings were exchanged, the appellant brought a motion for summary judgment for the amount of the deposits. The motion judge dismissed that motion. The motion judge then also dismissed the appellant’s entire action. The motion judge made various findings, including that the appellant had, by its conduct, waived the objection.

Issue: Was the finding that the appellant had waived the objection a proper one based on the evidence?

Holding: Appeal allowed.

Reasoning:

No. None of the conduct of the appellant amounts to an unequivocal act constituting waiver. It is consistent with the appellant placing itself in a position to close the transaction if, in the end result, it decided to waive the deficiency or some other solution came about. That never happened. There was a deficiency arising from the APS. It was never waived by the appellant. In accordance with the express terms of the APS, given that deficiency, the APS came to an end and the deposits had to be returned. That is the conclusion to which the motion judge ought to have come. The appellant was entitled to summary judgment as claimed.

DBDC Spadina Ltd. v. Walton, 2018 ONCA 60

[Cronk, Blair and van Rensburg JJ.A.]

Counsel:

Peter H. Griffin and Shara N. Roy, for the appellants, DBDC Spadina Ltd. and those corporations listed on Schedule A hereto

Rosemary A. Fisher and B. Sarsh, for the respondents, Christine DeJong Medicine Professional Corporation and Dennis and Peggy Condos

Mark Dunn, for Schonfeld Inc., Inspector/Manager

  1. Blumenfeld, for the respondents, Gideon and Irene Levytam

Keywords: Torts, Fraud, Breach of Fiduciary Duty, Knowing Assistance of Breach of Trust, Knowing Receipt of Trust Property, Unjust Enrichment, Joint and Several Liability, Corporations, Controlling Mind, Identification Doctrine, Canadian Dredge and Dock Company Limited v. R., [1985] 1 S.C.R. 662, Remedies, Constructive Trust, Indalex Ltd., Re, 2013 SCC 6, Damages

Facts:

This appeal arises out of a complex multi-million dollar commercial real estate fraud perpetrated by Norma and Ronauld Walton over the course of several years.  The appellants and the respondents are all victims of the fraud. Underlying the issues on appeal is a contest between them over who ranks in priority to whom in claiming against the proceeds remaining from the sale of certain properties acquired as part of the fraudulent scheme.

The appellant corporations, known as the DBDC Applicants, are owned and controlled by Dr. Stanley K. Bernstein. Through them, Dr. Bernstein invested approximately $111 million with the Waltons, in 31 projects, between September 2010 and June 2013. In each instance, the individual DBDC applicant entered into an equal shareholding agreement with the Waltons with respect to the specific-project corporation that was to acquire and hold the particular property. The corporations into which the DBDC Applicants’ monies were to be invested are known as the “Schedule B Companies”. These investments took the form of equity (approximately $2.6 million), shareholder loans ($78.5 million) and mortgages ($29.5 million).

The respondent, Christine DeJong Medicine Professional Corporation (“DeJong”), is owned and controlled by Dr. Christine DeJong. She and her husband, Michael DeJong, invested approximately $4 million with the Waltons – Dr. DeJong through DeJong, and Michael through his own corporations. Those investments were made in equal shareholder arrangements in substantially the same form as those entered into between the Waltons and the DBDC Applicants. The specific-project corporations established for the purposes of the DeJong investments are included in the group of companies known in the proceedings as the “Schedule C Companies”. The properties acquired by the Schedule C Companies are collectively known as the “Schedule C Properties”. The individual respondents, Dennis and Peggy Condos, and Gideon and Irene Levytam, made similar, but smaller investments in the same fashion. Their interests were also in relation to certain of the Schedule C Companies and the Schedule C Properties those companies acquired.

On September 23, 2016, the application judge released the decision under appeal. He:

  • awarded the DBDC Applicants damages in the amount of $66,951,021.85, plus interest, as against the Waltons personally, for fraudulent misrepresentation, deceit (civil fraud), and breach of fiduciary duty, and declared that the damage award would survive bankruptcy;
  • dismissed the DBDC Applicants’ claim for joint and several damages against the Listed Schedule C Companies, concluding that Norma Walton was not the controlling mind of the Listed Schedule C Companies and therefore, that they could not be liable for knowing assistance or knowing receipt arising out of her breach of fiduciary duty;
  • granted DeJong constructive trusts in the aggregate amount of $2,176,045.57 against four properties owned by four of the Listed Schedule C Companies into which the DeJongs had invested;
  • awarded costs against the DBDC Applicants in favour of DeJong, the Condos and the Levytams, further particularized in a Costs Endorsement dated November 28, 2016; and
  • dismissed the Waltons’ counter-application for damages.

Issues:

(1) Did the application judge err in holding that the Listed Schedule C Companies are not jointly and severally liable to the DBDC Applicants on the basis of knowing assistance and/or knowing receipt?

(2) Did the application judge err in granting DeJong constructive trusts over the Listed Schedule C Properties in question?

(3) Did the application judge err in awarding costs against the DBDC Applicants?

Holding: Appeal allowed.

Reasoning (R.A. Blair J.A. and E.A. Cronk JJ.A.):

(1) Yes. A stranger to a trust or fiduciary relationship may be liable under the doctrine of “knowing receipt” if the stranger receives trust property in his or her own personal capacity with constructive knowledge of the breach of trust or fiduciary duty. A stranger to a trust or fiduciary obligation may also be liable in equity on the basis of “knowing assistance” where the stranger, with actual knowledge, participates in or assists a defaulting trustee or fiduciary in a fraudulent and dishonest scheme. The criteria for establishing a claim for knowing assistance in the breach of a fiduciary duty are: there must be a fiduciary duty; the fiduciary – in this case, Ms. Walton – must have breached that duty fraudulently and dishonestly; the stranger to the fiduciary relationship – in this case, the Listed Schedule C Companies – must have had actual knowledge of both the fiduciary relationship and the fiduciary’s fraudulent and dishonest conduct; and the stranger must have participated in or assisted the fiduciary’s fraudulent and dishonest conduct.

In determining whether the above criteria were met and whether the Schedule C Companies should be held jointly and severally liable for damages arising from knowing assistance in the breach by Ms. Walton of her fiduciary duties to the DBDC Applicants, there were three questions to be answered. The first is whether Norma Walton was the directing and controlling mind of the Listed Schedule C Companies for purposes of the transactions through which her fraud was perpetrated, such that her knowledge and conduct in that regard may be attributed to the Schedule C Companies as their knowledge and conduct. Second, if the answer to that question is “yes”, does it follow that the knowledge and participation requirements for knowing assistance have been met with respect to those Listed Schedule C Companies utilized by Ms. Walton in the course of perpetrating her scheme? Third, if the answer to the foregoing question is “yes”, are the Listed Schedule C Companies nonetheless able to avoid joint and several liability in damages on the basis that knowing assistance liability, having its roots as an equitable doctrine, ought not to apply on the facts of this case?

There is no issue in the present case that Ms. Walton owed a fiduciary duty to the DBDC Applicants and Dr. Bernstein, or that she fraudulently breached that duty. The liability of the Listed Schedule C Companies – the “strangers” to the fiduciary relationship in this scenario – therefore turns on a determination of the third and fourth requirements for knowing assistance: their actual knowledge of the fiduciary relationship and the fraudulent breach, and their participation or assistance in the breach itself.

The application judge dismissed the DBDC Applicants’ claim on the basis that Ms. Walton was not the directing and controlling mind of the Listed Schedule C Companies, and accordingly that her knowledge and conduct could not be taken to be their knowledge and conduct for the purpose of the knowing assistance claim. The majority disagreed with this conclusion. The application judge failed to recognize that, for purposes of attribution and determining whether a person is the controlling mind of a corporation with respect to a particular transaction or series of transactions, the formal governing structure established by the contractual and corporate documentation is not dispositive. What matters is the factual reality of the situation and whether Walton was acting “within the field of operation assigned to [her]” and “carrying out [her] assigned function[s]” with respect to the corporations at the time she used them as vehicles to perpetrate her fraud.

Further, the application judge mistakenly focused on whether it was appropriate to hold that “Ms. Walton could cause the Schedule C investors to be a party to her fraudulent dealings with Dr. Bernstein.” The pertinent question was whether Ms. Walton had caused the Schedule C Companies to participate in her fraudulent dealings. The errors of fact, or of mixed fact and law, consist of the application judge’s failure to find, on this record: (i) that Ms. Walton’s position as the sole active director, officer and manager of the Listed Schedule C Companies, for all practical purposes, and her conduct and knowledge with respect to them, met the legal test for the directing and controlling mind of those companies; and (ii) that the Listed Schedule C Companies participated in the fiduciary breach.

It was not open to the application judge to hold that Ms. Walton was not the alter ego and directing and controlling mind of the Listed Schedule C Companies, as she orchestrated the transfer of source funds from the investors and, in some cases, the re-casting of corporate shareholding structuring necessary to affect those purposes. It was a palpable and overriding error on the part of the application judge to find that Ms. Walton was not in fact the directing and controlling mind of the Schedule C Companies. Overall, Ms. Walton’s knowledge and conduct can be attributed to the corporations.

In a detailed analysis, the court rejected the Respondents argument that the criteria set out in Canadian Dredge regarding when a corporation may be pinned with criminal liability had not been met (the identification doctrine). In that case, Estey J stated the identification doctrine only operates where the Crown demonstrates that the action taken by the directing mind: (a) was within the field of operation assigned to him; (b) was not totally in fraud of the corporation; and (c) was by design or result partly for the benefit of the company. As the instant case concerns a civil matter, policy considerations dictate that these criteria should not be applied in a rigid fashion.

For purposes of the “participation” and “knowledge” analyses, it matters little that the DBDC Applicants were unable to demonstrate the receipt of any particular Schedule B Company funds by any particular Listed Schedule C Company (other than the funds with respect to which Brown J. previously granted constructive trusts). It is therefore of little significance that the “net transfer analysis” was not intended to, and does not, establish such a connection. The fact that the net transfer analysis wasn’t intended to be used for the purpose of establishing a claim by the DBDC Applicants against the property of other defrauded investors is not relevant, and emphasizing this fact conflates knowing assistance with knowing receipt. If it were necessary to demonstrate the receipt of funds by the defendant in order to establish a claim for knowing assistance, there would be no need for the knowing assistance remedy. The claim of “knowing assistance” is designed to capture circumstances where “knowing receipt”, unjust enrichment, or a constructive trust on some other basis cannot be established, but where a fault based remedy is appropriate to compensate for the defendant’s knowing assistance in the perpetration of a fraudulent and dishonest breach of fiduciary duty. This is one of those cases.

The majority did not agree with the argument that the Listed Schedule C Companies were not participants in Ms. Walton’s fraudulent breach because they were victims of the same fraudulent scheme, and were merely used by Ms. Walton as “conduits” or “pawns” in the perpetration of that scheme, without the demonstration of receiving any benefit themselves. The Listed Schedule C Companies are not defrauded victims of Ms. Walton’s fraudulent scheme; their investors and preferred shareholders are the defrauded victims. Ms. Walton’s breach of fiduciary duty to the DBDC Applicants was to cause the funds they invested in the Schedule B Companies to be diverted out of those Companies for her own personal use. That the Schedule C investors or the Schedule C Companies were also the objects of a similar co-mingling and diversion of their funds was not important for the “participation” and “knowledge” requirements of the knowing assistance analysis. For the Listed Schedule C Companies to be found liable on that basis, it need not be shown that they assisted directly in acts involving the diversion of Schedule B Companies’ funds into the Listed Schedule C Companies’ accounts. It need only be shown that they knowingly assisted in Ms. Walton’s fraudulent and dishonest scheme to divert monies out of the Schedule B Companies’ accounts. It is the overall fraudulent scheme, and the Listed Schedule C Companies’ knowing assistance in the perpetration of that “shell game” that provides the prism through which liability for this claim must be determined.

DeJong and the other Respondents raise an additional argument. They submit that the fact they had no knowledge of the scheme or breaches personally, or in their capacities as lenders to or shareholders of the Schedule C Companies, shields the Listed Schedule C Companies from liability for knowing assistance. However, it is the knowledge of the corporation that is relevant to the establishment of liability, not the knowledge of the corporation’s creditors, shareholders, or its directors or officers other than the directing mind. If the existence of an express prohibition forbidding a directing mind to commit an act is not sufficient, by itself, to avoid corporate criminal responsibility, the breach of a shareholder agreement on the part of the directing mind cannot be sufficient to avoid corporate civil responsibility. The fact that Ms. Walton was carrying out the transactions for a corrupt purpose, and not advising her co-investors of the details, does not affect the attribution of her intentions and actions to the Listed Schedule C Companies. For these reasons, the DBDC Applicants established the necessary components for a claim of knowing assistance in a breach of fiduciary duty.

The Respondents advanced an additional argument based on equitable grounds, submitting that to give effect to the claim for damages based on knowing assistance in the circumstances of this case would be to “[stretch] the bounds of equity in ways not contemplated by the goals of restitutionary proprietary remedies.” This argument conflates a claim for damages, claim for knowing assistance, with a claim for proprietary remedy, claim for knowing receipt. Knowing assistance is not a remedy grounded in the principles of restitution or proprietary remedies. The DBDC Applicants are not seeking a restitutionary or proprietary-based remedy; they seek only a remedy in damages.

Liability for knowing assistance does not depend on receipt of property and the measure of recovery does not depend on value of property obtained as a result of the breach of fiduciary’s obligations. The essence of liability for knowing receipt is unjust enrichment, while the essence for liability for knowing assistance is knowing participation or assistance in the breach in furtherance of the defaulting trustee or fiduciary’s fraudulent and dishonest conduct. It is the knowledge of the Listed Schedule C Companies, rather than the knowledge of their investors or shareholders, which is relevant in assessing the claim for knowing assistance.

The requirement of knowledge for knowing assistance is actual knowledge, whereas for knowing receipt the requirement is constructive knowledge. It is hard to conceive of a case where in the face of a defendant’s participation or assistance in a fraudulent and dishonest scheme perpetuated by a fiduciary with actual knowledge of both the fiduciary relationship and the fraudulent and dishonest scheme, a court would decline a remedy.

The Listed Schedule C companies are not excused from “fault” on the ground that they were simply caught up because they remained participants and actors in the scheme. Once it is determined that the Listed Schedule C Companies knowingly participated in the fraudulent and dishonest breach of fiduciary duty by the Waltons, the DBDC Applicants are entitled to an award of damages against them as knowing accessories to the breach. The appropriate measure is the loss caused to the applicants by the dishonest fiduciary’s fraudulent scheme arising from the participation and assistance of the Listed Schedule C companies in that scheme. The Listed Schedule C Companies are jointly and severally liable for the losses sustained. However, any amounts recovered by the applicants pursuant to the constructive trusts awarded must be applied in reduction of the damage award.

(2) Yes. The application judge granted constructive trusts in favour of DeJong against the properties as a remedy for breach of fiduciary duty. However, in Indalex Ltd., Re, 2013 SCC 6, the Supreme Court of Canada held that a remedial constructive trust for a breach of fiduciary duty is only appropriate if the wrongdoer’s acts give rise to an identifiable asset which it would be unjust for the wrongdoer (or sometimes a third party) to retain. The application judge failed to apply the Indalex principle that the fiduciary’s wrongful acts must give rise to an identifiable asset, and he failed to give effect to the interests of the other creditors and third parties.

The DBDC Applicants also submitted that, in an insolvency context, the availability of other remedies and the adverse impact of imposing a proprietary remedy on other creditors and parties must be taken into account in determining whether to impose a constructive trust. Granting a constructive trust over the properties as a remedy for breach of fiduciary duty would enable DeJong to leapfrog over other creditors in its capacity as a lender by obtaining a proprietary remedy not available to other creditors. It is not enough to say that, because different groups of investors have been victims of an overall fraudulent scheme, and one group of investors is entitled to a constructive trust against certain of those properties to which their funds can be traced, the other group of investors is in equity entitled to a proprietary remedy against those or other properties in order to achieve some similar recovery in an attempt to be equitable. These factors do not justify the imposition of a proprietary remedy, for the benefit of the latter group of investors/creditors and to the prejudice of others, where the fiduciary breach did not directly relate to the acquisition of the properties in question.

(3) Yes. Leave was granted to appeal the costs portion of the Judgments and Orders and the costs order, and the costs order was set aside and remitted for reconsideration in view of the above.

The appeal was allowed, and the judgments and orders of the application judge holding that the Listed Schedule C Companies were not jointly and severally liable to the DBDC Applicants, granting constructive trusts in favour of DeJong, and awarding costs against the DBDC Applicants in favour of DeJong, the Condos and the Levytams, were all set aside.

Dissent (van Rensburg J.A.):

van Rensburg J.A. agreed that Norma Walton was in breach of the fiduciary duties she owed to the DBDC Applicants and that the DBDC Applicants are unable to establish the liability of the Listed Schedule C Companies for knowing receipt. She did not agree with the conclusion that the Listed Schedule C Companies participated in or assisted Ms. Walton in the breach of her fiduciary duties to the DBDC Applicants, and in awarding damages of $22.6 million against these ten companies. In her opinion, liability for knowing assistance cannot be made out in this case.

A judgment for $22.6 million against the Listed Schedule C Companies would enable the DBDC Applicants to share as unsecured creditors in the proceeds of sale of each of ten Schedule C Properties, after satisfying the constructive trust claims they made out against some of the properties. She argued this judgment will overwhelm the claims of the investors in the ten Listed Schedule C Companies, who were victims of the Waltons in the same manner as the appellants. She argued that the damage award does not correspond with the loss caused by the actions of the fiduciary or with the loss caused by or benefit to some or all of the Schedule C Companies.

In her view, the “participation” element of the fault-based claim of knowing assistance is not made out on this record. She would have dismissed the DBDC Applicants’ appeal.

van Rensburg J.A. identified two general concerns:

(1) The knowing receipt and knowing assistance claims were late-breaking add-ons to the oppression proceedings against the Waltons; and

(2) Since the DBDC Applicants’ claims against the Listed Schedule C Companies depend on the court’s acceptance of the “net transfer analysis”, its purpose and limitations must be understood.    

Raibex Canada Ltd. v. ASWR Franchising Corp., 2018 ONCA 62

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

Geoffrey B. Shaw and Christopher Horkins, for the appellants

David S. Altshuller and Lara Di Genova, for the respondents

Keywords: Contracts, Franchise Law, Rescission, Disclosure, Misrepresentation, Damages, Arthur Wishart Act, 2000, S.O. 2000, ss. 3, 5, 6 & 7, Caffé Demetre Franchising Corp. v. 2249027 Ontario Inc., 2015 ONCA 258, Canada Inc. v. Dollar It Ltd., 2009 ONCA 385, Fresh Evidence, Sengmueller v. Sengmueller (1994), 17 O.R. (3d) 208 (C.A.), Civil Procedure, Summary Judgment

Facts:

The central issue on this appeal is whether the franchise disclosure document (“FDD”) provided by the appellant franchisor was so inadequate that it entitled the respondent franchisee to rescind the parties’ franchise agreement under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3 (the “AWA”).

The franchise agreement in issue was between Raibex Canada Ltd. (the “Franchisee”) and ASWR Franchising Corp. (the “Franchisor”). It gave the Franchisee the right to acquire and operate an AllStar Wings and Ribs (“ASWR”) franchise in Mississauga. Neither the agreement nor the FDD specified a site for the prospective franchise. Rather, the agreement stipulated that a suitable location would be selected through the “reasonable best efforts” of both parties. The FDD included an estimated range of costs for constructing an ASWR franchise from a shell, but did not provide cost estimates for converting a pre-existing restaurant to an ASWR outlet (a “conversion”). The parties, working together, agreed upon a site for the franchise outlet that included an existing restaurant suitable for conversion. Differences arose after the costs of developing the franchise proved higher than the Franchisee expected. The Franchisee purported to rescind the franchise agreement on the basis of material non-disclosure. The Franchisor sought judgment for certain costs it incurred after taking over the restaurant following receipt of the Franchisee’s notice of rescission.

The parties brought motions for summary judgment to, among other things, determine the validity of the Franchisee’s decision to rescind the agreement. The motion judge held that the franchise agreement had been validly rescinded and dismissed the Franchisor’s claim for damages. The Franchisor appeals both aspects of her decision. The Franchisee cross-appeals certain related issues addressed in the motion judge’s reasons, and moves to admit fresh evidence.

Issues:

(1) Did the motion judge err in holding that the franchise agreement was validly rescinded?

(2) If the Franchisee did not validly rescind the agreement, is the Franchisor entitled to damages?

(3) Did the motion judge err in dismissing the Franchisee’s claims based on misrepresentation and breach of the duty of fair dealing?

(4) Should the fresh evidence be admitted?

Holding: Appeal allowed. Cross-appeal and motion to admit fresh evidence dismissed.

Reasoning:

(1) Yes. The inquiry into whether disclosure deficiencies are such that they justify rescission under s. 6(2) ultimately focuses on whether the franchisee has been “effectively deprived … of the opportunity to make an informed [investment] decision”: Caffé Demetre Franchising Corp. v. 2249027 Ontario Inc., 2015 ONCA 258, at para. 63. The seriousness of any given failure to comply with s. 5 must be measured by reference to the underlying purposes of s. 5 and the AWA more broadly in order to “obligate a franchisor to make full and accurate disclosure to a potential franchisee so that the latter can make a properly informed decision about whether or not to invest in a franchise”: Canada Inc. v. Dollar It Ltd., 2009 ONCA 385 at para. 16.

The lengthy and detailed FDD in this case should have put the Franchisee on notice as to the potential risks associated with pursuing a conversion opportunity.

The AWA draws a clear distinction between imperfect disclosure (or deficient disclosure) and situations where a franchisor provides “no disclosure”, thereby entitling the franchisee to rescission within a two year window. The motion judge erred in law by failing to give effect to this important legislative distinction.

(2) Yes. The Franchisor is entitled to damages arising out of the Franchisee’s failure to fulfill its financial obligations under the franchise agreement. However, these damages should account for the financial benefits the Franchisor derived from operating the franchise outlet. The matter was therefore remitted back to the Superior Court for a determination of this issue.

(3) No. the motion judge correctly dismissed the s. 3 and s. 7 misrepresentation claims. They were not particularized in the Franchisee’s statement of claim and were largely ignored in its oral and written argument. By not mounting a defence to the cross-motion, the Franchisee failed to “put its best foot forward”.

(4) No. The proposed evidence did not exist at the time of the hearing. This is not one of those rare cases where admission of such evidence would further the interests of justice (see: Sengmueller v. Sengmueller (1994), 17 O.R. (3d) 208 (C.A.), at paras. 8-10), and the motion was not brought in a timely fashion. There is no basis to assess the reliability of the proposed evidence.

Tam v. El-Hawary, 2018 ONCA 70

[Laskin, Sharpe and Fairburn JJ.A.]

Counsel:

M Diegel, for the appellant

J-F Laberge, for the respondent

Keywords: Corporations, Oppression, Affiliates, Ontario Business Corporations Act, R.S.O. 1990, c. B.16, s 1 (4)

Facts:

The appellants (Stanley Tam aka Stanley Bor Tam, 1202817 Ontario Inc., RTM Resources Inc. and 1041376 Ontario Inc.) concede that the motion judge did not err in finding that Tam and the pharmacy, 1202827 Ontario Inc. (“120”) are liable. The appellants argue, however, that the motion judge erred in finding that the landlord, 1041376 Ontario Inc. (“104”), and RTM Resources Inc. are also liable. The appellants submit that the statement of claim pleads that these defendants are liable because they intended to defeat the respondent’s claim, and yet the motion judge held that the question of intent could not be decided until after a trial. Second, the respondent pleaded that 104 and RTM were liable as affiliates, and yet she led no evidence to show that they were affiliates.

Issues:

(1) Did the motion judge err in finding that the landlord, 1041376 Ontario Inc. (“104”), and RTM Resources Inc. are liable?

Holding: Appeal dismissed.

Reasoning:

(1) No. On the pleadings point, once the appellants concede that Tam and 120 are liable, they concede that under the oppression remedy it is effect not intent that matters, as indeed the motion judge found. On the affiliate point, the motion judge’s reasons are sufficient to support a finding that both 104 and RTM are affiliates. Under section 1(4) of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16, one body corporate shall be deemed to be affiliated with another body corporate if each of them is controlled by the same person.

Conner v. Scotia Capital Inc., 2018 ONCA 73

[Simmons, Roberts and Nordheimer JJ.A.]

Counsel:

Amanda Chapman, for the appellant

David Di Paolo and Caitlin Sainsbury, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Striking Pleadings, Frivolous, Vexatious or Abuse of Process, Rules of Civil Procedure, Rule 21.01(3)(d), Summary Judgment

Facts:

The appellant’s employment with the respondent, Scotia Capital Inc., was terminated on October 19, 2012.  In December 2012, the appellant entered into a settlement agreement with the respondent and also signed a release. In October 2014, the appellant commenced an action against the respondent for wrongful dismissal, defamation and conversion of his book of business.

The respondent successfully brought a motion under rule 21.01(3)(d) to stay or dismiss the appellant’s action based on the settlement agreement and release. The motion judge determined that the respondent did not breach a duty of good faith to the appellant, did not make fraudulent misrepresentations to him and that the settlement agreement entered into by the parties was neither unconscionable nor unenforceable.

Issues:

(1) Did the motion judge err in dismissing the appellant’s action?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court stated that to dismiss a case as frivolous or vexatious or an abuse a process on a motion under rule 21.01(3)(d), a court must be satisfied that on the face of the action and in all the circumstances, it is plain and obvious that the action cannot succeed. Rather than articulating or applying this test, the motion judge proceeded as if she was hearing a summary judgment motion and made findings of fact based on the evidence presented.  However, unlike a summary judgment motion, it cannot be presumed that all relevant evidence has been presented on a rule 21.01(3)(d) motion.

The court stated that given the dispute over the validity of the release, this was not an appropriate case to be determined on a rule 21.01(3)(d) motion. The court therefore allowed the appeal and set aside the order below.

Criminal Decisions:

R v. Hansen, 2018 ONCA 46

[Sharpe, Watt and Roberts JJ.A.]

Counsel:

  1. Lafontaine, for the appellant
  2. Schwartz, for the respondent

Keywords: Criminal Law, Perjury, Obstruction of Justice, Sentencing, Controlled Drugs and Substances Act, Section 11, Evidence, Search Warrants, Credibility

R v. J.S., 2018 ONCA 39

[Simmons, Rouleau and Roberts JJ.A.]

Counsel:

  1. Lumba, for the appellant
  2. Latimer, for the respondent

Keywords: Criminal Law, Sexual Assault, Forensic Evidence

R v. Ontario (Review Board), 2018 ONCA 50

[Rouleau, Watt and Brown JJ.A.]

Counsel:

  1. Jenner, for the appellant
  2. Mackenzie, for the respondent

Keywords: Constitutional Law, Jurisdiction, Criminal Proceedings Rules, r. 27.03, Rules of Civil Procedure, r. 14.05(3)(g.1)

R v. Tran, 2018 ONCA 35

[Doherty, LaForme and Paciocco JJ.A.]

Counsel:

  1. Kerbel, for the appellant
  2. Devlin, for the respondent

Keywords: Criminal Law, Consent, Conviction Quashed

Wong v. Canada (Attorney General), 2018 ONCA 68

[Doherty, LaForme and Paciocco JJ.A.]

Counsel:

Ian B. Kasper, for the appellant

Sanam Goudarzi and Korinda McLaine, for the respondent

Keywords: Criminal Law, Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 27(1),  Mission Institution v. Khela, 2014 SCC 24

R v. Degraw, 2018 ONCA

[Feldman, Fairburn and Nordheimer JJ.A.]

Counsel:

  1. Sheppard, for the appellant
  2. Schwartz, for the respondent

Keywords: Criminal Law, Firearms Offences, Constructive Possession, Evidence

R v. Foster, 2018 ONCA 53

[Watt, Epstein and Brown JJ.A.]

Counsel:

  1. Martell, for the appellant
  2. Proestos and Y. Pressman, for the respondent

Keywords: Criminal Law, Controlled Substances, Trafficking, Duress, Sentencing

R v. Parshall, 2018 ONCA 59

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A.]

Counsel:

  1. DesLauriers, for the appellant
  2. Carrasco, for the respondent

Keywords: Criminal Law, Canadian Charter of Rights and Freedoms, Search and Seizure, Search Warrants

R v. Dagenais, 2018 ONCA 63

[Strathy C.J.O., Doherty J.A. and McCombs J. (Ad Hoc)]

Counsel:

  1. Dineen and M. Halfyard, for the appellant
  2. Schwartz and E. Whitford, for the respondent

Keywords: Criminal Law, Accessory to Murder, Obstructing Police, Public Mischief

R v. Le, 2018 ONCA 56

[Doherty, Lauwers and Brown JJ.A.]

Counsel:

  1. McDunnough, for the appellant
  2. Sandy Tse, for the respondent

Keywords: Criminal Law, Evidence, Canadian Charter of Rights and Freedoms, s. 8

R v. Pindus, 2018 ONCA 55

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

Counsel:

  1. Gourlay and K. Grad, for the appellant
  2. De Filippis, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Sentencing

R v. Sagoo, 2018 ONCA 58

[Feldman J.A. (Motion Judge)]

Counsel:

  1. Price, for the appellant
  2. Smith Joy, for the respondent

Keywords: Criminal Law, Driving Prohibition

R v. Victoria, 2018 ONCA 69

[Watt, Brown and Miller JJ.A.]

Counsel:

  1. Vandebeek, for the appellant
  2. G. Walsh, for the respondent

Keywords: Criminal Law, Controlled Substances, Possession, Canadian Charter of Rights and Freedoms, s. 8, Sentencing

Short Civil Decision and Ontario Review Board Decision:

Srebrolow Lebowitz Spadafora PC v. PW Lawyers Professional Corporation, 2018 ONCA 64

[Laskin, Sharpe and Fairburn JJ.A.]

Counsel:

  1. Slade and C. Giordano, for the appellants
  2. Srebrolow and G. Fabiano, for the respondents

Keywords: Contracts, Solicitors, Referral Fees, Rules of Professional Conduct

Ohenhen (Re), 2018 ONCA 65

[Watt, Tulloch, Pardu, Benotto and Roberts JJ.A.]

Counsel:

  1. Szigeti and J. Berger for the appellant, Julius Ohenhen
  2. R. Presser and A. Menchynski, for the appellant Gaurav Kalra
  3. Alyea for the respondent, Her Majesty the Queen
  4. S. MacKenzie for the respondent, the Person in Charge of the Centre for Addiction and Mental Health
  5. Walker-Renshaw and J. McIntyre, for the respondent, the Person in Charge of Royal Ottawa Mental Health Centre

Keywords: Ontario Review Board, Criminally Responsible, Mental Disorder, Health Care Consent Act, Consent, Criminal Code, s. 672.55(1), Conditions, Treatment

ONTARIO COURT OF APPEAL SUMMARIES (JANUARY 15 – JANUARY 19, 2018)

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

While there were several civil decisions released by the Court of Appeal this week, they were, for the most part, procedural in nature. Topics covered included striking pleadings in the family law context, vexatious litigants, insolvency, wills and estates, and debtor-creditor.

Enjoy the weekend,

John Polyzogopoulos
Blaney McMurtry LLP
jpolyzogopoulos@blaney.com
Tel: 416 593 2953
http://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents: 

Laurentian Bank of Canada v. Bernier, 2018 ONCA 23

Keywords: Contracts, Debtor-Creditor, Civil Procedure, Summary Judgment, Orders, Setting Aside, Fresh Evidence, Mehedi v. 2057161 Ontario Inc., 2015 ONCA 670

Midland Resources Holding Limited v. Shtaif, 2018 ONCA 33

Keywords: Civil Procedure, Appeals, Applications for Reconsideration, Rules of Civil Procedure, Rule 59.06(2)(d)

Struik v. Dixie Lee Food Systems Ltd., 2018 ONCA 22

Keywords: Bankruptcy and Insolvency, Receiverships, Civil Procedure, Appeals, Standing

Van Sluytman v. Muskoka (District Municipality), 2018 ONCA 32

Keywords: Civil Procedure, Vexatious Litigants, Self-Represented Litigants, Frivolous or Vexatious Actions, Summary Dismissal, Rules of Civil Procedure, r. 2.1.01(1), Gao v. Ontario WSIB, 2014 ONSC 6100, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Courts of Justice Act, s. 140, Re Lang Michener et al. v. Fabian et al. (1987) 59 O.R. (2d) 353 (H.C.)

Wouters v. Wouters, 2018 ONCA 26

Keywords: Family Law, Striking Pleadings, Breach of Court Orders, Natural Justice, Procedural Fairness, Self-Represented Litigants, Family Law Rules, Rules of Civil Procedure, Irregularities

Ali v. Fruci, 2018 ONCA 41

Keywords: Wills and Estates, Testamentary Capacity, Undue Influence

For Short Civil Decisions Click Here

For Criminal Decisions Click Here

Civil Decisions: 

Laurentian Bank of Canada v. Bernier, 2018 ONCA 23

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:

Kevin Scullion, for the appellant

James M. Butson and Cristina Internicola, for the respondent

Keywords: Contracts, Debtor-Creditor, Civil Procedure, Summary Judgment, Orders, Setting Aside, Fresh Evidence, Mehedi v. 2057161 Ontario Inc., 2015 ONCA 670

Facts:

The appellant was sued by the respondent bank for a shortfall when it repossessed and sold a motorcycle that had been purchased by her husband with financing provided by the bank. The respondent was named as co-defendant because the loan document bore her signature as guarantor of the loan. Her husband filed a statement of defence on behalf of both defendants, but neither contested the motion and the respondent was granted summary judgment. The respondent took steps to enforce the judgment debt and scheduled an examination of the appellant. The appellant failed to attend two examinations scheduled subsequently. The respondent then brought a motion to compel her attendance. The appellant did not attend and an order of costs was made. The appellant did not pay and has not paid any outstanding costs orders.

In January 2016, the appellant brought a motion to set aside the judgment and swore an affidavit alleging that her husband, who died in 2011, entered the contract to purchase the motorcycle and forged her signature. No supporting evidence was adduced.

Issue: Should the summary judgment be set aside in light of fresh evidence?

Holding: Appeal dismissed.

Reasoning:

No. The motion judge properly applied the test set out by the court in Mehedi v. 2057161 Ontario Inc., 2015 ONCA 670. On the motion, the appellant proffered no expert evidence to support her claim that her signature had been forged, nor did she provide an adequate explanation for her delay in moving to set aside the judgment. The motion judge found that the respondents would be prejudiced given the four-year delay in attempting to realize on the judgment. The onus was on the appellant to demonstrate that the order should be set aside. Ultimately, the motion judge was not satisfied that she met her burden. His discretionary decision is entitled to deference. Further, the appellant’s fresh evidence application was available when the motion was brought and it was incumbent on the appellant to produce it at that time.

Midland Resources Holding Limited v. Shtaif, 2018 ONCA 33

[Doherty, Brown and Roberts JJ.A.]

Counsel:

Michael Shtaif and Eugene Bokserman, in person

Symon Zucker, for the respondents Midland Resources Holding Limited, Alex Shnaider and Eduard Shyfrin

Keywords: Civil Procedure, Appeals, Applications for Reconsideration, Rules of Civil Procedure, Rule 59.06(2)(d)

Facts:

By reasons released April 20, 2017, the court: (i) dismissed the appeal by Eugene Bokserman of the US$1.5 million judgment against him; and (ii) allowed, in part, the appeals by Michael Shtaif and Gregory Roberts, reducing the judgments against them to US$8.27 million.

Shtaif and Bokserman moved under rule 59.06(2)(d) of the Rules of Civil Procedure for a “reconsideration” of the court’s decision to maintain awards of damages against them. Rule 59.06(2)(d) states: “A party who seeks to … (d) obtain other relief than that originally awarded, may make a motion in the proceeding for the relief claimed.” The appellants contended that the trial judge “miscalculated” Midland’s damages as at June 20, 2006, by only considering the accruing loss at that date, without considering the accruing gain which, they contended, flowed from the closing of the Reef Energy transaction after that date. They argue that it was not fair or just for the court to rely on the trial judge’s miscalculation of damages in affirming the judgment in part.

Issues:

(1) Should the court reconsider the damages awarded against the appellants?

Holding: Appeal dismissed.

Reasoning:

(1) No. Shtaif and Bokserman are not simply pointing out a “mathematical oversight” in the trial judge’s damage calculation; they are advancing a theory of damages not argued on the appeal. In their appeal factum, the appellants identified seven grounds of appeal, none of which involved a claim that the trial judge miscalculated Midland’s damages as of June 20, 2006, by failing to take into account any post-June 20, 2006 gain. Although the appellants did submit the trial judge erred in finding Midland acted reasonably to mitigate its damages, the court did not give effect to that ground of appeal. Consequently, r. 59.06(2)(d) offers no basis for the court to “reconsider” its decision.

Struik v. Dixie Lee Food Systems Ltd., 2018 ONCA 22

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

Robert J. Reynolds, for the moving party

Jillian Burford-Grinnell, for the respondent, Dixie Lee Ontario Ltd.

Keywords: Bankruptcy and Insolvency, Receiverships, Civil Procedure, Appeals, Standing

Facts:

On January 23, 2017, Rasaiah J. granted partial summary judgment to Maria Struik (“Struik”).  She declared Dixie Lee Ontario Ltd. (“DLOL”) to be a guarantor of certain obligations and ordered it to pay Struik monthly amounts together with interest and costs. On March 1, 2017, DLOL served a notice of appeal after the time to appeal.

On March 3, 2017, Rasaiah J. granted a further order appointing Struik as the Receiver of all of the assets, undertaking and property (the “Property”) of DLOL with the power to take possession, control and manage the business of DLOL and, on notice to DLOL and Joseph Murano (the directing mind of DLOL), market and sell the Property.  All rights and remedies against DLOL, the Receiver, or affecting the Property were stayed.

DLOL sought an extension of time to serve and file the notice of appeal of the receivership order.  A chambers judge of the Court of Appeal granted the extension by order dated August 1, 2017. It is not clear if the receivership order was brought to the attention of the chambers judge. Struik brought this motion before a panel to review the order of the chambers judge.

Issues:

(1) Should the order of the chambers judge extending the time to appeal be set aside?

Holding: Motion granted.

Reasoning:

(1) Yes. The thrust of the notice of appeal is that Struik breached and repudiated the contract relating to the guarantee, thereby releasing DLOL from the guarantee. In lengthy and detailed reasons, Rasaiah J. expressly addressed this issue noting that the language of the guarantee precluded such defences and claims. Other than disagreeing with the order, no specific error could be identified by the appellant.

Moreover, the justice of the case is not served by permitting the appeal to proceed.   Although not raised by either party, given the terms of the receivership order, the party purporting to resist the motion and to proceed with the appeal of the January 23, 2017 judgment, namely DLOL, has no status independent of the receiver to do so.

Van Sluytman v. Muskoka (District Municipality), 2018 ONCA 32

[Pepall, Benotto and Paciocco JJ.A.]

Counsel:

Rory Adrian Van Sluytman, acting in person

M Williams and J Glick, for the respondent, the Attorney General of Ontario (C63372, C63373, C63380 and C64065)

J W Clow and M J Hudswell, for the respondent, the District Municipality of Muskoka (C63372 and C63373)

L Crowell, for the respondents, Orillia Soldiers’ Memorial Hospital (C63375) and Muskoka Algonquin Healthcare (C63377)

K Kalogiros and B Mattalo, for the respondent, Dr. Anthony Denning Shearing (C63376)

P D Duda, for the respondent, Muskoka-Parry Sound Community Mental Health Service (C63378)

Ian S. Epstein and Zack Garcia, for the respondent, Lake Country Community Legal Clinic (C63380)

M Abraham, for the respondent, Legal Aid Ontario (C63380)

H Sheikh, for the respondent, the Attorney General of Canada

P Sibenik and W Wong for the respondent, Legislative Assembly of Ontario (C63380)

Keywords: Civil Procedure, Vexatious Litigants, Self-Represented Litigants, Frivolous or Vexatious Actions, Summary Dismissal, Rules of Civil Procedure, r. 2.1.01(1), Gao v. Ontario WSIB, 2014 ONSC 6100, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Courts of Justice Act, s. 140, Re Lang Michener et al. v. Fabian et al. (1987) 59 O.R. (2d) 353 (H.C.)

Facts:

The appellant, Mr. Van Sluytman, brought eight appeals before the Court of Appeal. Seven appeals concerned orders made by the Superior Court of Justice under the summary procedure provided for in Rule 2.1.01(1) dismissing actions brought by the appellant on the basis that they were frivolous or vexatious (the “Rule 2.1.01 Orders”).  The eighth appeal was an appeal of an application that had been brought by the Attorney General of Ontario, wherein the appellant was declared a vexatious litigant under s. 140 of the Courts of Justice Act (the “Vexatious Litigant Order”).

The appellant’s claims in the actions giving rise to the Rule 2.1.01 Orders related generally to his numerous complaints about his interactions, over many years, with various government agencies, law enforcement officials, and mental health care and medical personnel in Ontario. For each of the R. 2.1.01 Orders, the reviewing judge considered the governing principles concerning the exercise of the court’s discretionary authority under R. 2.1.01 as set out in such leading authorities as Gao v. Ontario WSIB, 2014 ONSC 6100, Gao v. Ontario WSIB, 2014 ONSC 6497 and Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733. It was found that each action’s statement of claim exhibited many of the hallmarks of pleadings in vexatious actions and, in each case, the reviewing judge concluded that the appellant’s pleading: (i) failed to advance a clear or legitimate cause of action; (ii) was replete with the type of grandiose claims that characterize vexatious actions; and/or (iii) in some instances, asserted one or more claims that were barred by the expiry of a governing limitation period. Accordingly, the actions were dismissed pursuant to Rule 2.1.01.

Issues:

(1) Did the reviewing judge err in ordering the Rule 2.1.01 Orders on the basis of drafting deficiencies in the appellant’s pleadings?

(2) Did the reviewing judge err in ordering the Rule 2.1.01 Orders in light of the appellant’s allegation that government authorities failed to provide him with directions regarding how to proceed with an action in compliance with the Rules of Civil Procedure?

(3) Did the reviewing judge err in ordering the Rule 2.1.01 Orders in light of the alleged absence of any notice given to the appellant, as required by R. 2.1.01(3)1?

(4) With respect to the Vexatious Litigant Order, did the application judge err in declaring the appellant a vexatious litigant pursuant to s. 140 of the Court of Justice Act?

Holding: Appeals dismissed.

Reasoning:

(1) No. Having considered the appellant’s pleadings in each proceeding, the Court of Appeal agreed with the reviewing judges that they fell far short of meeting the pleadings requirements applicable to all litigants.  Further, they failed to advance any justiciable cause of action. On this ground alone, it was open to the reviewing judges to dismiss the appellant’s actions using R. 2.1.01(1).

In light of the Court of Appeal’s conclusions, it did not consider whether the expiry of a limitation period may be relied upon as an independent basis on which to dismiss an action under R. 2.1.01(1).

(2) No. The involved government authorities were not obliged at law to furnish directions to the appellant, a self-represented litigant, on how to frame and plead his claims against the respondents.  The Rules of Civil Procedure provide detailed and clear procedures for the commencement of proceedings and delineate the requisite and permissible contents of pleadings. The appellant was obliged to comply with the Rules of Civil Procedure, but failed to do so.

(3) No. Although it is not entirely clear whether notice was given in all seven actions, it was evident that notice was given in the action before Di Luca J. and in at least two of the actions before Wood J., who had dealt with six of the appellant’s actions concurrently.  Moreover, in oral submissions, the appellant conceded that he may have had received notice in one or two of the actions. It is clear that notice was directed to be given and was given in at least some of the actions. Even if the appellant did not receive notice under R. 2.1.01 to make submissions, the Court held that no prejudice or injustice would in any event arise given that the outcome would have been unaffected by submissions.

(4) No. The Court of Appeal reached a similar conclusion regarding the appellant’s appeal from the Vexatious Litigant Order, finding that this discretionary order was amply justified. The application judge concluded that the various actions commenced by the appellant are a classic reflection of many of the characteristics outlined in Re Lang Michener et al. v. Fabian et al. (1987) 59 O.R. (2d) 353 (H.C.) (a case that describes many of the salient characteristics of vexatious proceedings).

Wouters v. Wouters, 2018 ONCA 26

[Simmons, Cronk and Paciocco JJ.A.]

Counsel:

Suzor, for the appellant
G. McFadyen, for the respondent

Keywords: Family Law, Striking Pleadings, Breach of Court Orders, Natural Justice, Procedural Fairness, Self-Represented Litigants, Family Law Rules, Rules of Civil Procedure, Irregularities

Facts:

On November 22, 2016, the wife brought a motion returnable on December 8, 2016 seeking, among other things, an order striking the husband’s pleadings for failing to comply with various court orders. In the same motion, the wife also asked for an order rectifying the overpayment of support of $53,996.19 by setting it off against support payments of $77,371.10, which she asserted had been paid from her share of funds held in trust.

On December 12, 2016, the husband brought a motion returnable December 15, 2016, seeking a payout of $50,000 from the proceeds of sale of the farm property held in trust by the wife’s counsel. On December 15, 2016, the husband brought a motion returnable December 22, 2016, requesting leave to call oral evidence from his accountant on his motion for an accounting.

On December 22, 2016, the motion judge granted leave to the husband to call oral evidence from his accountant. This December 2016 order was, in part, subject to the accountant providing a letter to the wife’s counsel by January 20, 2017, outlining his intended evidence. However neither the motion judge’s handwritten endorsement, nor a typed transcription, included the requirement that the accountant’s letter go to the wife’s counsel.

The motion judge struck the husband’s pleadings noting that the continuing record consisted of 12 volumes and disclosed that 16 judges had been involved in the case. He observed that the wife’s affidavit set out many examples of the husband’s effort to stand in the way of the progress of the application and acts to the disadvantage of the wife. He also noted that the husband breached four orders.

Issues:

(1) Did the motion judge err in striking the husband’s pleading?

Holding:

Appeal allowed.

Reasoning:

(1) Yes. The motion judge’s rulings adversely affected the appellant’s ability to respond to the wife’s motion to strike.

The motion judge denied the husband the opportunity to call oral evidence from his accountant because the appellant had not delivered the accountant’s letter as required by the terms of the December 2016 order. However, in making this ruling, the judge never grasped nor entertained the husband’s point that the handwritten endorsement of the December 2016 order did not say that the letter should have been sent to the wife’s counsel. Had the motion judge grasped the husband’s position, it may have been possible to receive the accountant’s evidence by affording the wife’s experienced counsel an opportunity to review the accountant’s letter that the appellant asserted he had filed with the trial coordinator.

The second ruling to strike the appellant’s reply factum on the basis that it did not comply with the Family Law Rules also adversely affected the appellant’s position because the motion judge failed to turn his mind as to whether the reply factum contained any material that could properly be considered on any of the motions before the court for the husband’s benefit. Although the Family Law Rules and the Rules of Civil Procedure are designed, at least in part, to ensure procedural orderliness and efficiency, they are not so rigid or inflexible as to preclude the court from examining non-compliant documents submitted by self-represented litigants to ensure that any properly admissible portions are received. If the husband delivered documents in advance of the motion hearing to comply with outstanding undertakings or court orders, he should not have been precluded from demonstrating compliance because he did not file an affidavit in response to the motion to strike. If the documents or responses were included in his reply factum, that demonstrated pre-hearing compliance.

Also the motion judge was wrong to conclude that the records reveal a consistent effort by the wife’s counsel to pursue outstanding disclosure or to get this matter on for trial. The records reveal that the wife and the wife’s counsel also contributed to the delay.

Finally, in the context of not having a full picture of the husband’s position on the motion to strike, the motion judge failed to properly consider whether any lesser remedy would suffice. It is a well-established principle in family law that pleadings should be struck only in exceptional circumstances and where no other remedy would suffice. Before striking pleadings, a court should consider the availability of any alternate remedy and the importance and materiality of any items not produced.

Ali v. Fruci, 2018 ONCA 41

[Strathy C.J.O., Hourigan and Miller JJ.A.]

Counsel:

C McClelland, for the appellant

R Budgell and L Thompson, for Mary Fruci

K Garland, for Robert David Willis

Keywords: Wills and Estates, Testamentary Capacity, Undue Influence

Facts:

The appellant, Lorilee Ali, appeals the judgment of the trial judge dismissing her action seeking to have certain wills of Florence Louisa Blackburn declared invalid. Ms. Ali was the great-niece of Ms. Blackburn, who died in June 2007. Over the course of a five-year period between 1998 and 2003, Ms. Blackburn executed three wills and two codicils. In Ms. Blackburn’s 1998 will and two codicils executed in 1999, Ms. Ali was an estate trustee and the residual beneficiary. In wills created in 2000 and 2003, Ms. Ali was neither estate trustee nor beneficiary. Instead, in the 2000 will the respondents Mary Fruci and Robert Willis were beneficiaries and were respectively the estate trustee and alternate estate trustee. Pursuant to the 2003 will, Ms. Fruci was the residual beneficiary and Mr. Willis was the estate trustee. Mr. Willis was also entitled to the transfer of Ms. Blackburn’s home upon her death. Ms. Ali commenced an action seeking to invalidate the 2000 and 2003 wills on the basis of lack of testamentary capacity, lack of knowledge and approval of contents, and undue influence. On appeal, Ms. Ali submits that the trial judge misapprehended the medical evidence regarding the issue of Ms. Blackburn’s testamentary capacity. Further, she submits that the trial judge erred in failing to distinguish between Ms. Blackburn’s capacity to manage property and financial affairs and her testamentary capacity.

Issues:

(1) Did the trial judge err in the analysis?

Holding:

Appeal dismissed.

Reasoning:

(1) In considering the issue of testamentary capacity, the trial judge carefully and thoroughly examined the evidence, including the evidence of Ms. Blackburn’s doctor and other professional witnesses who testified as to her capacity. His conclusion that Ms. Blackburn had testamentary capacity was fully supported by the evidence. There was no error in the trial judge making reference to Ms. Blackburn’s capacity to manage her property and financial affairs in his analysis of her testamentary capacity. That was relevant evidence that he was entitled to rely upon. The trial judge identified the correct legal test for testamentary capacity and properly applied it to the evidence.

Short Civil Decisions:

J.K. v. Ontario, 2018 ONCA 20

[Hoy A.C.J.O., Huscroft and Paciocco JJ.A.]

Counsel:

Tamara D. Barclay and Jonathan Sydor for the appellant, Her Majesty the Queen in right of the Province of Ontario

Kirk Baert and James Sayce for the respondent plaintiff, J.K.

Kirk Boggs for the respondents Banyan Community Services Inc. et al.

No one for the respondent Casatta Ltd.

Keywords: Costs Endorsement, Amendment of Pleadings

Dunn v. Dunn, 2018 ONCA 28

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

Andreus Snelius, for the appellant

Kevin Caspersz, for the respondent

Keywords: Family Law, Equalization of Net Family Property, Consent Orders

Trade Capital Finance Corp. v. Cook, 2018 ONCA 27

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

Peter Carey, for the appellant

Brendan Wong, for the respondents

Keywords: Civil Procedure, Mareva Injunctions, Writs of Seizure and Sale

772067 Ontario Limited v. Victoria Strong Manufacturing Corporation, 2018 ONCA 36

[Laskin, Trotter and Fairburn JJ.A.]

Counsel:

Paul Starkman, for the appellant

Clifford Cole, for the respondents

Keywords:Real Property, Commercial Leases, Commercial Tenancies Act, s. 19

Sultan v. Hurst, 2018 ONCA 37

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

Jillian van Allen, for the appellant

Jeffrey Goit, for the respondent

Keywords: Civil Procedure, Service, Validation, Rules of Civil Procedure, r. 14.08

Lord v. Clearspring Spectrum Holdings L.P., 2018 ONCA 38

[Doherty, Benotto and Miller JJ.A.]

Counsel:

Arthur Hamilton and Jed Blackburn, for the appellants

Robert Staley, Alan Gardner and William Burtolin for the respondents

Keywords: Costs Endorsement

St. James No. 1 Inc. v. VanderWindt, 2018 ONCA 44

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

Justin Nasseri, for the appellant

Daniell Bartley, for the respondents

Keywords: Real Property, Municipal Law, Heritage Buildings, Ontario Heritage Act, s. 34

Criminal Decisions:

R v. Bebonang, 2018 ONCA 30

[Laskin, Cronk and Fairburn JJ.A.]

Counsel:

Paula Rochman, for the appellant

Amy Alyea, for the respondent

Keywords: Criminal Law, Attempted Murder, Aggravated Assault, Mens Rea, Evidence, Character Evidence, Criminal Code, s. 753

R v. Hasiu, 2018 ONCA 24

[Epstein, Paciocco and Nordheimer JJ.A.]

Counsel:

Eva Taché-Green, for the appellant

Jennifer Conroy, for the respondent

Keywords: Criminal Law, Drug Trafficking, Sentencing, Corrections and Conditional Release Act, Fresh Evidence, R. v. Palmer, [1980] 1 S.C.R. 759, Jurisdiction, Functus Officio, Nunc pro tunc, , R. v. Krouglov, 2017 ONCA 197, R. v. Malicia (2006), 82 O.R. (3d) 772 (C.A.)

R v. Hofsteede, 2018 ONCA 31

[Rouleau, Watt and Brown JJ.A.]

Counsel:

Lauren Binhammer, for the appellant

Althea Francis, for the respondent

Keywords: Criminal Law, Drug Trafficking, Sentencing, Repeat Offender

R v. Shahcheraghi, 2018 ONCA 29

[Rouleau, Watt, Brown JJ.A.]

Counsel:

Catriona Verner, for the appellant

Frank Au, for the respondent

Keywords: Criminal Law, Assault, Criminal Code, ss. 268 & 686, R. v. Lohrer, 2004 SCC 80

R v. Zagrodskyi, 2018 ONCA 34

[Laskin, Trotter and Fairburn JJ.A.]

Counsel:

Matthew Gourlay and Reem Zaia, for the appellant

Nancy Dennison, for the respondent

Keywords: Criminal Law, Domestic Abuse, Sexual Assault, Evidence, Immigration Law, Immigration and Refugee Protection Act

R v. Al-Kazragy, 2018 ONCA 40

[Feldman, Fairburn and Nordheimer JJ.A.]

Counsel:

Erika Chozik, for the appellant Payam Khastou

Naomi Lutes, for the appellant, Mohammad Al-Kazragy

Richard Posner and Lance Beechener, for the appellant Arash Arashvand

Elise Nakelsky and Peter Scrutton, for the respondent Crown

Keywords: Criminal Law, First & Second Degree Murder, Charge to Jury, Inconsistent Verdicts,  R. v. Pittiman, 2006 SCC 9, R. v. Catton, 2015 ONCA 13, R. v. White, 2011 SCC 13, R. v. Villaroman, 2016 SCC 33

ONTARIO COURT OF APPEAL SUMMARIES (JANUARY 8 – JANUARY 12, 2018)

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

Congratulations to our very own Bill Anderson for succeeding on the main issues in our client’s appeal in Nemeth v. Hatch Ltd., 2018 ONCA 7. In this Employment law decision, the Court of Appeal found that it is not necessary to include an explicit stipulation in a termination clause of an employment agreement in order to displace the common law, as long as the intention is clear from the words used. Additionally, the Court of Appeal found that silence in a termination clause concerning an employee’s entitlement to severance pay does not denote an intention to contract out of the Employment Standards Act.

In Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12, the court enforced an arbitration clause in an insurance policy and stayed an action brought in Ontario in favour of arbitration in London, England.  The “Action Against Insurer” clause stipulating the address for service of process on Lloyd’s of London in Canada was found not to constitute an alternative dispute resolution clause. It was found to effectively be an address for service clause, which would include service of a notice of arbitration to be held in London.

Other topics include a review of the “Real and Substantial Connection Test” in Sgromo v. Scott., the Family law case of Lavie v. Lavie, in which the court reviewed the law relating to the imputing of income for the purposes of calculating support, and Brown v. Canada, which was a Charter damages case for unlawful detention of an illegal immigrant for the purpose of deportation.

Finally, I would like to invite all of our readers to attend the CLE that my partner, Lea Nebel and I will be chairing featuring the top Court of Appeal decisions of the year. Justice Epstein will be making the keynote address. The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place on Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case will be heard by the Supreme Court in the coming months. Counsel on that matter, David M. Smith and Jeremy Opolsky, have agreed to participate in our panel discussion. The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the “appropriate means” analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists. The law in this area is continuing to evolve. The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has certainly received the attention of the plaintiffs’ personal injury bar and the media and has, no doubt, been a catalyst behind the Law Society’s efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

Enjoy the weekend,

John Polyzogopoulos
Blaney McMurtry LLP
jpolyzogopoulos@blaney.com
Tel: 416 593 2953
http://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents:

Nemeth v. Hatch Ltd., 2018 ONCA 7

Keywords: Employment Law, Termination Without Cause, Termination Clauses, Notice Employment Standards Act, 2000, S.O. 2000, c. 41, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986,Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158

Sgromo v. Scott, 2018 ONCA 5

Keywords: Contracts, Civil Procedure, Jurisdiction, Real and Substantial Connection, Club Resorts Ltd. v. Van Breda, 2012 SCC 17

Lavie v. Lavie, 2018 ONCA 10

Keywords: Family law, Spousal Support, Child Support, Imputing Income, Underemployment, Federal Child Support Guidelines, Section 19(1)(a), Drygala v. Pauli, (2002), 61 O.R. (3d) 711 (Ont. C.A.)

Union Gas Limited v. Norwich (Township), 2018 ONCA 11

Keywords: Municipal Law, Public Utilities, Contracts, Drainage Act, R.S.O. 1990, c. D.17, Seidel v. Telus Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531

Brown v. Canada (Public Safety), 2018 ONCA 14

Keywords: Constitutional Law, Unlawful Detention, Habeas Corpus, Immigration Law, Deportation, Immigration and Refugee Protection Act, S.C. 2001, c. 27, Charter Remedies, Canadian Charter of Rights and Freedoms, ss. 7, 9, 12 and 24

Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12

Keywords: Contracts, Arbitration Clauses, Civil Procedure, Stays in Favour of Arbitration, International Commercial Arbitration Act, R.S.O. 1990 c. I.9, UNCITRAL Model Law

Toronto (Police Service) v. L.D., 2018 ONCA 17

Keywords: Administrative Law, Professions, Discipline Proceedings, Police, Certiorari, Appeals, Jurisdiction, Constitutional Law, Constitution Act, 1867, Division of Powers, Criminal Law, Police Services Act, R.S.O. 1990, c. P. 15, Youth Criminal Justice Act, S.C. 2002, c.1,  Courts of Justice Act, R.S.O. 1990, c. C.43,  R. v. Parker, 2011 ONCA 819, Criminal Code, Part XXVI.

For Short Civil Decisions Click Here.

For Criminal Decisions Click Here.

Civil Decisions:

Nemeth v. Hatch Ltd., 2018 ONCA 7

[Sharpe, Benotto and Roberts JJ.A.]

Counsel: 

DN Persaud and S Pope, for the appellant

William D. Anderson, for the respondent

Keywords: Employment Law, Termination Without Cause, Termination Clauses, Notice Employment Standards Act, 2000, S.O. 2000, c. 41, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986,Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158

Facts:

The appellant appeals from the dismissal of his action for damages arising out of the termination of his employment without cause, following his motion for summary judgment. The appellant was employed by the defendant for just over 19 years when his employment was terminated. The defendant gave the appellant 8 weeks’ notice of termination, paid him 19.42 weeks’ salary as severance pay, and continued his benefits, including his pension benefits, during the 8-week notice period. This was consistent with the appellant’s minimum entitlements under the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”), and reflected the respondent’s interpretation of the termination clause in the appellant’s employment contract. The termination clause provided that “the notice period shall amount to one week per year of service with a minimum of four weeks or the notice required by the applicable labour legislation.”

The appellant appeals on three grounds (1) That the appellant retained his rights to common law notice because the termination clause does not contain express language excluding entitlements under the common law; (2) the termination is void under s. 5(1) of the ESA because it purports to contract out of the appellant’s statutory entitlements to severance pay by absence of reference; and (3) the motion judge erred in failing to consider the appellant’s alternative argument that he is entitled to one week’s notice for every year of employment under the termination clause, with the result that he should have received 19 weeks’ notice.

Issues:

(1) Is it necessary to include an explicit stipulation in a termination clause in order to displace the common law?

(2) Is the termination clause void because it purports to contract out of the ESA?

(3) Does the termination clause entitle the appellant to 19 weeks’ notice of termination of his employment?

Holding:

Appeal allowed, in part.

Reasoning:

(1) No. The well-established presumption is that on termination, an employee is entitled to common law notice. However, in accordance with the Supreme Court of Canada decision in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, this presumption may be rebutted if the contract of employment “clearly specifies some other period of notice, whether expressly or impliedly”, provided that it meets the minimum entitlements prescribed under the ESA. In accordance with Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, the intention to displace an employee’s common law notice entitlement must be clearly and unambiguously expressed in the contractual language used by the parties.  The need for clarity does not mean that the parties must use a specific phrase or particular formula, or state literally that “the parties have agreed to limit an employee’s common law rights on termination”. It suffices that the parties’ intention to displace an employee’s common law notice rights can be readily gleaned from the language agreed to by the parties. Here, in accordance with Matchinger, the clause clearly “specifies some other period of notice” and, accordingly, this ground of appeal was dismissed.

(2) No. Silence of the termination clause concerning the appellant’s entitlement to severance pay does not denote an intention to contract out of the ESA.

(3) Yes. The motion judge did not consider this argument, however even if the motion judge had considered it, the Court of Appeal is of the view that the clause gives rise to two possible interpretations: one that would limit the appellant’s notice entitlement to the minimum prescribed by the ESA; the other that would not. Pursuant to the decision in Wood, when presented with a termination clause that could reasonably be interpreted in more than one way “courts should prefer the interpretation that gives the greater benefit to the employee”. The second sentence of the termination clause provides that the appellant is entitled to receive one week’s notice for every year of service. It is not limited by the subordinate clause following the preposition “with”. Rather, the words “a minimum of four weeks or the notice required by the applicable labour legislation” prescribe the minimum floor of the appellant’s notice entitlement under the agreement, in order that the notice provision of “one week per year of service” does not run afoul of the minimum requirements of the ESA. There is no language restricting the appellant’s entitlements to only the minimum notice period under the ESA. Therefore this ground of appeal was allowed and the appellant was entitled to receive 19 weeks’ notice.

Sgromo v. Scott, 2018 ONCA 5

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

A Challis and A Fletcher, for Leonard Gregory Scott and Eureka Inventions LLC

P Henein and K Byers, for the respondents Bestway (USA), Inc., Bestway (Hong Kong) International Ltd., Bestway Inflatables & Material Corp. (Shanghai), and Patrizio Fumagali

J Lester and W Mouck, for the respondent Bail Hotline Bail Bonds, Inc.

P Choe, for the respondents Polygroup International, Polygroup Limited, Polygroup Services N.A., Inc., Ricky Tong, William Kaufmann, Scott Hershock, Lewis Cheng, Elmer Cheng, and Paul Cheng

D Zulianello and K Commisso, for the respondent Imperial Toy LLC, Peter Tiger, and Art Hirsch Pietro Sgromo, acting in person on his own behalf and on behalf of the appellant, Wide Eyes Marketing Ltd.

Keywords: Contracts, Civil Procedure, Jurisdiction, Real and Substantial Connection, Club Resorts Ltd. v. Van Breda, 2012 SCC 17

Facts:

The appellant, Peter Anthony Sgromo (“Mr. Sgromo”), brought four related actions arising out of various dealings with the respondents as a consultant. During the period of time at issue in his lawsuits – roughly 2001 to 2016 – Mr. Sgromo lived in the United States. The actions of the various respondents of which he complains all took place in the United States, almost entirely in California. Mr. Sgromo currently resides in Ontario.

The respondents brought motions to dismiss or stay the appellants’ actions, principally on the ground that an Ontario court had no jurisdiction over his claims because there is no real and substantial connection between his litigation and this province. In each action, the motion judge granted the motion and stayed the action brought by Mr. Sgromo (and, where applicable, Wide Eyes).

Issues:

(1) Did Mr. Sgromo enter into a consulting contract with Imperial Toy at the Toronto airport, thus giving Ontario jurisdiction over his claim against that company?

(2) Did Mr. Sgromo enter into a consulting contract with Bestway at the Toronto airport, thus giving Ontario jurisdiction over Mr. Sgromo’s claim in his litigation against Mr. Scott and the Bestway companies?

(3) Were some of the respondents carrying on business in Ontario, thus satisfying one of the presumptive connecting factors for jurisdiction under the principles set out by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda?

Holding: Appeal dismissed.

Reasoning:

Ontario Courts have no jurisdiction over Mr. Sgromo’s claims.

(1) and (2) No. The Court dealt with the first two issues — two work visa applications made by Imperial Toy and Bestway at the Toronto airport to Homeland Security, whose authorization Mr. Sgromo required to work in the United States as their consultant. Neither application was a contract. Any consulting arrangement or other business relationship between the parties took place in California. The two visa applications made at the Toronto airport do not establish a real and substantial connection to Ontario.

(3) No. Mr. Sgromo submits that because the products of some of the respondents were advertised, marketed, and distributed in Ontario, the respondents were in substance carrying on business here. The respondents acknowledge that under Van Breda, carrying on business in Ontario is a presumptive factor establishing a real and substantial connection to this province.

The Court noted, however, that in Van Breda, LeBel J. emphasized that even active advertising in Ontario would not be enough to establish that a defendant was carrying on business here.

Lavie v. Lavie, 2018 ONCA 10

[Sharpe, Rouleau and Fairburn JJ.A.]

Counsel:

K Lavie, acting in person

C A Torry, for the respondent

Keywords: Family law, Spousal Support, Child Support, Imputing Income, Underemployment, Federal Child Support Guidelines, Section 19(1)(a), Drygala v. Pauli, (2002), 61 O.R. (3d) 711 (Ont. C.A.)

Facts:

The appellant, Kevin Lavie, appeals from the trial judge’s decision dealing with division of property, as well as spousal and child support following marriage breakdown. Following their separation, the parties agreed on joint custody with the children spending equal time with both parents. Tanya worked as a teacher from 1998 to 2004. She left teaching after her second child was born. The parties agreed at that point that Tanya would not return to her teaching career so she could be more available to the children. In 2006, Tanya began operating Balls of Fun (BOF), a child play center. Based on the evidence of the expert evaluator, the trial judge determined Tanya’s personal income from BOF to be $15,000 in 2009. Kevin worked as an editor for a television show, but was terminated in 2012. The trial judge determined that Kevin’s income for 2012 was $77,923.

In his judgment, the trial judge rejected Kevin’s position that he was entitled to an equalization payment of $64,915.97, and a post-separation adjustment payment of $52,669.16. Based on his assessment of the evidence, he concluded that Tanya was to make an equalization payment of $5,380.27, and that Kevin was to make a post-separation adjustment payment to Tanya of $1,440. The trial judge also ordered Kevin to pay retroactive child and spousal support of $714 and $691 per month respectively commencing November 1, 2009. With respect to Tanya, the trial judge declined to impute income equal to a teacher’s salary. Instead, based on the fact that the parties had agreed that Tanya should not return to teaching, he found that she was not intentionally underemployed. He therefore accepted the evaluator’s opinion that her estimated income at the time of separation was $15,000.

The judge ordered the set-off amount of child support and then added to this an amount of spousal support payable to Tanya to achieve equal net disposable incomes between the parties. This was reflected in the amount of support awarded. Given the uncertainty of Kevin’s employment prospects, the trial judge also provided that Kevin could seek to have the spousal support issue reconsidered in 2017 without the need to establish a material change in circumstances.

Issues:

(1) Did the trial judge give the appellant a fair hearing?

(2) Did the trial judge err in his treatment of the BOF shareholder loan?

(3) Did the trial judge err by imputing income to the appellant but not the respondent?

(4) Should the fresh evidence be considered?

Holding: Appeal allowed, in part.

Reasoning:

(1) No, there is no basis for concluding that Kevin was not afforded a fair hearing. The trial judge gave him considerable assistance as a self-represented party. At the outset of the hearing, the trial judge provided him with the Superior Court of Justice memorandum on trial procedures. He was not prevented from presenting any relevant evidence.

(2) No. The expert evidence at trial was that BOF’s value to Tanya was $55,000 in total, which included the value of the shareholder loan. The expert explained that, given the amount of bank debt and the payment obligations of BOF for rent, employees, and the like, $55,000 was all that could be salvaged by Tanya if she sought to dispose of BOF. The Court deferred to the trial judge’s acceptance of this expert evidence.

(3) Yes. The trial judge rejected Kevin’s submission that income should be imputed to Tanya. He found that because Tanya was not intentionally underemployed, there was no basis to impute income to her as Tanya and Kevin had made a joint decision that Tanya would primarily care for the children. Section 19(1)(a) of the Federal Child Support Guidelines permits the court to impute additional income where a spouse is intentionally underemployed. As per Drygala v. Pauli, (2002), 61 O.R. (3d) 711 (Ont. C.A.), in order to find intentional underemployment and to impute income to a parent, there is no need to find a specific intent to evade child support obligations. The trial judge erred by concluding that Tanya was not intentionally underemployed. The reasons for underemployment are irrelevant. If a parent is earning less than she or he could be, he or she is intentionally underemployed. From the time she chose to start BOF and to earn $15,000 per year rather than the over $70,000 per year Tanya would have earned returning to teaching, she was intentionally underemployed.

Section 19(1)(a) also provides that the court must consider if such intentional under-employment is “required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse”. The trial judge found that the decision for Tanya to start BOF did not rise to the level of a “requirement” for the purpose of s. 19(1)(a). The trial judge ought to have concluded that s. 19(1)(a) was engaged in this case. Where s. 19(1)(a) is engaged, the court retains discretion to decide whether, and if so, how much, income to impute to the under-employed spouse. When imputing income based on intentional under- employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered include age, education, experience, skills and health of the parent. The judge’s finding that Tanya’s decision not to return to her teaching position and to work on building up BOF was made jointly by the parties. That alone, however, did not justify imputing $70,000 in additional income to Kevin and no additional income to Tanya.

At the time of the trial, the parties were sharing parenting responsibilities equally such that the children could only directly benefit from Tanya’s extra time at home while staying with her. For the other half of the time, they would benefit equally from Kevin’s ability to work fewer hours. Kevin may also have chosen to support building a business that he could ultimately benefit from, but after separation, he could no longer benefit from the business’ growth. Taking all of this into account, it was appropriate to either impute additional income to both parties or to neither of them.

The Court held that while Kevin was still employed, no additional income should be imputed to Tanya. Once Kevin became unintentionally unemployed, it was not appropriate to impute to him his former full salary while at the same time imputing no additional income to Tanya. After this period, the court imputed income of $70,000 to both parties such that they are deemed to be earning the same amount, so no spousal or child support was owed.

The court varied the original judgment to provide that as of January 1, 2013, there was no spousal or child support owing by either party. The court also modified the provision that Kevin can bring a review of spousal support after October 5, 2017, to provide that either party may bring a review of spousal or child support based on any relevant change in circumstances since trial. The parties need not meet the threshold of a material change in circumstances. A qualifying change would include that either party now has a stronger claim for child or spousal support based on bona fide but unsuccessful efforts to secure employment income beyond that earned at trial.

Kevin raised a number of additional grounds of appeal. These were based on the trial judge’s factual findings, and were entitled to deference.

(4) No. The fresh evidence would not have affected the outcome of the trial. To the extent that it involves changes in circumstances since the trial, the fresh evidence is best considered on a future motion to vary the support obligations.

Union Gas Limited v. Norwich (Township), 2018 ONCA 11

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

Counsel:

C Smith and E Sherkey, for the appellant

R Aburto and J Polowin, for the respondent

P Tunley, for the intervener, Ontario Energy Board

Keywords: Municipal Law, Public Utilities, Contracts, Drainage Act, R.S.O. 1990, c. D.17, Seidel v. Telus Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531

Facts:

This appeal concerns a dispute between a utility and a rural municipality over the sharing of the utility’s costs to relocate parts of a gas pipeline as a result of the rural municipality’s construction of certain drainage works. The disposition of the appeal requires the court to consider the terms of a franchise agreement dated September 28, 2004 between the parties (the “Franchise Agreement”), and provisions of the Drainage Act, R.S.O. 1990, c. D.17 (the “Act”).

Union Gas Limited (“Union”) asserts that The Corporation of the Township of Norwich (“Norwich”) is required to pay Union 35% of its costs to relocate a gas pipeline necessitated by certain drainage works, in accordance with the Franchise Agreement. Norwich argues that Union should assume the full cost of relocation, as its engineer directed, under s. 26 of the Act.

The application judge held that the cost to relocate gas works when a drain is constructed under the Act is an increase in the cost of “drainage works”, and therefore subject to s. 26 of the Act, which provides for the utility to assume the entirety of the increased cost of drainage works caused by the existence of the public utility’s works. He held that the cost-sharing provisions of the Franchise Agreement did not “trump and hold priority over” s. 26 of the Act. Union appealed the application judge’s decision.

Issues:

(1) Did the application judge err in interpreting s. 26 of the Act to apply to the cost of relocating gas works?

(2) Did the application judge err in concluding that the Act overrides the cost-sharing provisions of the Franchise Agreement?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The application judge erred in its interpretation of Seidel v. Telus Communications Inc., 2011 SCC 15 as standing for a general principle that “no mere contract inter partes can take away that which the law has conferred”. The court stated that there is no such general principle, and the application judge was not correct in his interpretation of what was said, or quoted from, in Seidel. Accordingly, the application judge, informed by this error, did not consider whether the Franchise Agreement cost-sharing provisions applied to the parties’ dispute.

The court explained that the correct approach to analyzing the interplay between the Franchise Agreement and the Act was as follows:

  1. to consider whether the Act wouldprohibit contracting out of s. 26, and whether it would be contrary to public policy to recognize an agreement that does so; and
  2. to interpret the Franchise Agreement itself, to determine whether there is anything in the contract that would take the parties out of the cost-sharing mechanism to which they have agreed, in the case of drainage works undertaken under the Act.

Regarding the first issue, the question is whether the Act expressly, or by necessary implication, would prohibit a utility and a municipality from arriving at their own agreement respecting the sharing of costs, where the construction of the drainage works requires the relocation of a pipeline. The court held that there is nothing in the legislative scheme that would preclude such a cost-sharing agreement in circumstances where the utility is required by the municipality to alter its pipeline to accommodate drainage works. Enforcement of the parties’ contractual cost-sharing agreement would not undermine the detailed procedures set out in the Act for the proposal, planning and approval of drainage works, and the sharing of the municipality’s own costs.

(2) Yes. In terms of the second issue of whether the Franchise Agreement applies to the current dispute, the court held that there is nothing in the Franchise Agreement that would exclude drainage works from “municipal works”, or that would remove from its cost-sharing provisions the drainage works undertaken by Norwich in this case. The Franchise Agreement describes the cost-sharing mechanism in clear language and it unambiguously applies when a municipality requests relocation of a gas system to accommodate any municipal works. Accordingly, the Franchise Agreement would override Norwich’s by-law approving the engineer’s report to the extent it purported to assess Union for the entire cost of relocating its pipeline.

Brown v. Canada (Public Safety), 2018 ONCA 14

[Simmons, Rouleau and Brown JJ.A.]

Counsel:

J M Vecina and J Will, for the appellant

B Assan, M Anderson and M Mathieu, for the respondents

Keywords: Constitutional Law, Unlawful Detention, Habeas Corpus, Immigration Law, Deportation, Immigration and Refugee Protection Act, S.C. 2001, c. 27, Charter Remedies, Canadian Charter of Rights and Freedoms, ss. 7, 9, 12 and 24

Facts:

Prior to being deported to Jamaica, the appellant, Mr. Brown, was detained for the purpose of removal in a maximum security institution for five years. He brought a habeas corpus application and sought damages under s. 24(1) of the Canadian Charter of Rights and Freedoms as a remedy for the breach of his ss. 7, 9 and 12 Charter rights. Because he was deported before the application was decided, the habeas corpus portion of the application was dismissed as moot. He nonetheless proceeded with the Charter damages aspect of the application, maintaining that prior to being deported, the detention he suffered was cruel, unusual, arbitrary and indefinite. His application for Charter damages was dismissed. He appeals that dismissal, arguing that the application judge erred.

Issues:

(1) Did the application judge err in finding that there was no breach of ss. 7 and 9 of the Charter?

(2) Did the application judge err in finding that there was no breach of s. 12 of the Charter?

Holding: Appeal dismissed

Reasoning:

(1) No. After considering all of the evidence, the application judge concluded that the detention had not become unlawful. The Immigration Division had made the fact-driven determination that Mr. Brown constituted a flight risk as well as a danger to the public. These determinations are entitled to deference. Pursuant to the Immigration and Refugee Protection Act, S.C. 2001, c. 27, there is a statutory process for continuous and regular reviews by the Immigration Division every 30 days in a quasi-judicial process recognized by the courts as being procedurally fair. There are also provisions for oversight by the Federal Court. Additionally, multiple factors warranted Mr. Brown’s detention. As a result, the deprivation of liberty was in compliance with the principles of fundamental justice and justified in the circumstances. Section 9 of the Charter had also been respected because the legislative criterion for detention had been met. Mr. Brown’s detention was for the valid purpose of removal. He could not be removed earlier because Jamaica had to issue a travel document.

(2) No. The application judge’s determination that the Immigration Division process for review of Mr. Brown’s detention was fair and lawful ought not to be disturbed. Nor should his findings that there had been no lack of diligence on the part of the CBSA in effecting Mr. Brown’s removal and that the delays, although lengthy, were largely beyond their control. The application judge also considered and rejected Mr. Brown’s submission that he did not receive adequate treatment of his mental health issues while in detention. These findings were well supported by the record.

Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12

[Doherty, LaForme, and Miller JJ.A.]

Counsel:

R Morris and John Mather for the appellants

A D’Silva and M Walli for the respondent

Keywords: Contracts, Arbitration Clauses, Civil Procedure, Stays in Favour of Arbitration, International Commercial Arbitration Act, R.S.O. 1990 c. I.9, UNCITRAL Model Law

Facts:

The respondents entered into an agreement with the appellants which provided that the respondents would provide “trade credit” insurance on the appellant’s factored accounts. This agreement was made up of an underlying base policy and a “Schedule” which sets out terms specific to the policy and which included certain “endorsements”. The base policy contained a clause providing that any dispute arising in connection with the contract shall be referred to and finally resolved by arbitration in London, UK.

One of the endorsements contained in the “Schedule” contained an “Action Against Insurer” provision which set out that any action to enforce the obligations of the Underwriters may validly be served upon the Attorney In Fact in Canada for Lloyd’s Underwriters in Montreal. All of the endorsements state that they prevail over any conflicting wording in the underlying policy.

The appellants made several claims for loss under the policy and ultimately commenced an action against the Insurers in Ontario for losses under the insurance contract. The respondents brought a motion to stay the appellant’s action in accordance with the clause contained in the base policy providing for arbitration. The motion judge refused to stay the action. In his view, both the arbitration clause and the “Action Against Insurer” clause provided for alternative, optional methods of dispute resolution.

Issues:

(1) Did the motion judge conclude that the policy provided for a dual-track dispute resolution process contrary to the objective terms of the agreement by failing to apply the correct principles of contractual interpretation?

(2) Did the motion judge err in not applying the legal test for a stay under the International Commercial Arbitration Act and the UNCITRAL Model Law?

Holding: Appeal allowed.

Reasoning:

(1) Yes.  The approach in Ontario is that in cases where the “existence or validity of the arbitration agreement” is not clear  it is preferable for the arbitrator to decide the issue: Dalimpex Ltd. v. Janicki, (2003), 64 O.R. (3d) 737 (Ont. C.A.), at paras. 21-22.

Although the motion judge expressed the correct legal principles, it was unnecessary and an error for him to “widen” the meaning to the Action Against Insurer endorsement clause and turn it into an alternative dispute resolution provision in order to give it effect. The plain language of the clause can be given meaningful effect without conflicting with the mandatory language of the arbitration clause, thereby giving effect to all of the terms of the insurance policy.

The word “action” and the word “defendant”, does not necessarily refer to a civil action. They can also be used in reference to arbitration proceedings. Also, Action Against Insurer clause does not specify where or how claims to enforce obligations under the agreements are to be determined. This derogates from the argument that the clause was an alternate dispute resolution provision.

The Action Against Insurer endorsement does not clearly provide for an alternative right of the insured to commence a domestic action against the Insurers. It is arguably a service of suit clause. As a result, it cannot be said that the arbitration provision was clearly inoperative on the facts of this case.

(2) Yes. To the extent that the motion judge held that arbitration must be the sole method of dispute resolution agreed to between the parties in order to attract the operation of the UNCITRAL Model Law, doing so was wrong in law. The Model Law is not restricted in its application to international commercial agreements that provide for arbitration as the sole method of dispute resolution. An agreement by the parties to submit certain, but not all disputes in a contract to arbitration does attract its application.

The Model Law may even apply to an arbitration agreement if the right of arbitration is merely optional. If the parties agree that arbitration is an optional method of dispute resolution, and one of the parties chooses to commence arbitration, there is no reason why art. 8 of the Model Law should not apply to stay any duplicative court actions in Ontario. Since, after electing to commence an arbitration, the parties agreed to respect that choice, at that point it may be said that the parties have agreed to submit the dispute to arbitration.

Toronto (Police Service) v. L.D., 2018 ONCA 17

[Feldman, MacPherson and Huscroft JJ.A.]

Counsel:

G Glickman, for the appellant, Chief of Police Toronto Police Service

No one appearing for the respondent L.D

J Mulcahy, for the respondent, Steven Mignardi

J Stewart and M Birdsell, for the intervener Justice for Children and Youth

M Saksznajder and C Goncalves, for the intervener, Office of the Independent Police Review Director

M Bojanowska, for the intervener, Criminal Lawyers’ Association

D Krick, for the Attorney General (Ontario) (written submissions only, by invitation of the Court)

Keywords: Administrative Law, Professions, Discipline Proceedings, Police, Certiorari, Appeals, Jurisdiction, Constitutional Law, Constitution Act, 1867, Division of Powers, Criminal Law, Police Services Act, R.S.O. 1990, c. P. 15, Youth Criminal Justice Act, S.C. 2002, c.1,  Courts of Justice Act, R.S.O. 1990, c. C.43,  R. v. Parker, 2011 ONCA 819, Criminal Code, Part XXVI.

Facts:

Constable Steven Mignardi of the Toronto Police Service (“TPS”) was charged under the Police Services Act, R.S.O. 1990, c. P. 15 (“PSA”) with discreditable conduct in relation to the alleged assault of L.D., a young person who had been arrested by the TPS. The matter has been referred to a disciplinary hearing. In the context of this administrative proceeding, the TPS brought an application for an order under s. 119(1)(s) of the Youth Criminal Justice Act, S.C. 2002, c.1 (“YCJA”) allowing access to the police records from the evening in question. Constable Mignardi brought a cross-application under ss. 119(1)(s) and 123 of the YCJA for access to records in the TPS’ possession relating to additional incidents where L.D. was investigated, detained, arrested, convicted, and/or prosecuted. Cohen J., of the Ontario Court of Justice (sitting as a youth justice court judge under the YCJA) released her decision dismissing both the TPS and Mignardi applications. Both the TPS and Constable Mignardi appealed the youth court judge’s decision to the Superior Court of Justice. The TPS cited s. 40(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) as the basis for the appeal. The appeal was heard by Morgan J. of the Superior Court of Justice, who allowed the appeal and ordered that the records sought by Mignardi be produced. Although the appeal judge did not expressly address the records sought by the TPS in its appeal, those records were included in the records sought by Constable Mignardi. The TPS appealed the Superior Court judge’s decision to the Court of Appeal under s. 6(1)(b) of the CJA. During the hearing, the court raised the issue of the jurisdiction of the Superior Court judge to hear an appeal from the decision of the youth court judge.

Issues:

(1) Does s. 40(1) of the CJA support an appeal to the Superior Court of Justice from a decision of a youth court judge made under the YCJA?

(2) Is there another route to appeal or review a decision of a youth court judge to the Superior Court of Justice?

(3) Should the Court of Appeal decide the appeal?

Holding: The Court declined to hear the appeal and set aside the decision of the Superior Court of Justice.

Reasoning:

(1) No. Section 40(1) of the CJA provides “If no provision is made concerning an appeal from an order of the Ontario Court of Justice, an appeal lies to the Superior Court of Justice.” TPS conceded that its appeal of the youth justice court’s decision to the Superior Court grounded in s. 40(1) of the CJA was misconceived in light the decision in R. v. Parker, 2011 ONCA 819. In Parker, the appellant (Parker) applied to the Ontario Court of Justice for the return of marijuana plants that had been seized under the Controlled Drugs and Substances Act, S.C. 1996, c. 19 (“CDSA”) . The application was dismissed and the appellant appealed to the Superior Court of Justice. The Superior Court judge held that he could hear the appeal under s. 40(1) of the CJA. He dismissed the appeal and Parker appealed again. The Court of Appeal found “While the interplay between federal and provincial jurisdictions in drug cases can be problematic, we are satisfied that the correct characterization of a s. 24 application is that it flows out of Parliament’s criminal law power. Accordingly, provincial rights of appeal have no application.”

The question was, therefore, whether the YCJA, like the CDSA, is a federal law anchored in s. 91(27) of the Constitution Act, 1867. This question has been definitively answered in the affirmative, pursuant to earlier jurisprudence. It follows that provincial legislation such as s. 40(1) of the CJA cannot create an appeal right from an order made under the YCJA.

(2) Yes. The appellant and respondent jointly submitted that there is a route to review a decision of a youth court judge relating to the records provisions of the YCJA. The route is an application for certiorari brought under Part XXVI of the Criminal Code before a judge of the Superior Court of Justice. This submission accords with the decision in Parker and thus it was accepted. Section 784 of the Criminal Code provides a right to appeal a decision granting or refusing certiorari to the Court of Appeal.

(3) No. In Parker, the Court of Appeal, having determined that the proper route to review the Ontario Court of Justice judge’s decision was a certiorari application to a Superior Court judge, went on to hear and determine the appeal from the Superior Court judge’s decision on the merits. That Court found “There is little, if any, disadvantage to a party seeking to review a [CDSA] s. 24 order having to apply for certiorari rather than proceeding by way of appeal. In this province, the reviewing court is the same, the Superior Court of Justice. The grounds of review are also the same and, one advantage to a party is that an appeal lies to this court as of right.” The Court of Appeal acknowledged that, pursuant to Parker, it had the jurisdiction to treat the appeal decision as a decision made on an application for certiorari, and to determine the appeal on the merits. However, Justice MacPherson declined to do so. The Court found that the issues and surrounding circumstances were sufficiently different from those in Parker to justify a more cautious result. In Parker, the Superior Court upheld the decision of the Court of first instance. Here, in contrast the Superior Court quashed the decision. Had the appeal been brought properly as an application for certiorari, Justice Morgan could only have quashed Justice Cohen’s decision and ordered access to the records if he found that she had exceeded her jurisdiction in denying access, or if her reasons had disclosed an error of law on the face of the record. His reasons, however, did not consider either of those bases and the Court of Appeal cannot, therefore, properly review his decision to determine if he erred in law. The court therefore set aside the Superior Court’s decision, with the parties being free to go back to the Superior Court on an application for certiorari.

Short Civil Decisions

Ramadhin v. New Venture Group Inc., 2018 ONCA 6

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:

A D Powell and A Ahmad, for the appellant Bakshish Mand

D Zacks and T Walker, for the respondent

Keywords: Appeal Book Endorsement, Real Property, Mortgages, Enforcement, Power of Sale, Torts, Negligence, Realtors, Improvident Sale, Limitation Periods

Toronto-Dominion Bank v. Froom,  2018 ONCA 15

[Simmons, Lauwers and Pardu JJ.A.]

Counsel:

A Froom, in person by videoconference

T J Burke, for the respondent

Kewywords: Costs Endorsement

Fenwick v. Concierge Auctions, ULC, 2018 ONCA 18

[Doherty, LaForme and Paciocco JJ.A.]

Counsel:

R G Slaght and P Healy, for the appellant

J E Schatz and S Azzopardi, for the respondent

Keywords: Costs Endorsement

Marshall v. Marshall, 2018 ONCA 25

[Feldman, Pepall and Huscroft JJ.A.]

Counsel:

F Leitch, Q.C., for the appellant

M Kropp, for the respondent

Keywords: Family Law, Property, Presumption of Resulting Trust

Willowbrook Nurseries Inc. v. Royal Bank of Canada, 2018 ONCA 21

[Pardu, Trotter and Paciocco JJ.A.]

Counsel:

P J Pape, for the appellant

M A Davis and R Macdonald, for the respondent

Keywords: Costs Endorsement

Criminal Decisions

R v. Brown (Publication Ban), 2018 ONCA 9  

[Trotter J.A. (In Chambers)]

Counsel:

P J.I. Alexander, for the applicant

A Hotke, for the respondent

Keywords: Criminal Law, Application to Appoint Counsel, Criminal Code, s. 684, Lack of Sufficient Means, Desirability in the Interests of Justice, R v. Bernardo (1997), 121 C.C.C. (3d) 123 (Ont. C.A.)

R v. Ipeelee, 2018 ONCA 13  

[Doherty, LaForme and van Rensburg JJ.A.]

Counsel:

F J O’Connor, for the appellant

A Baiasu, for the respondent

Keywords: Criminal Law, Sentencing, R v. Grant, 2016 ONCA 639

R v. Telesford (Publicaton Ban), 2018 ONCA 19

[Laskin, Trotter and Fairburn JJ.A.]

Counsel:

M J Mattis, for the appellant

M Townsend, for the respondent

Keywords: Criminal Law, Indirect or Circumstantial Evidence, Crown Witnesses

R v. Youssef, 2018 ONCA 16

[Laskin, Feldman and Blair JJ.A.]

Counsel:

R Litkowski, for the appellant

K Rawluk, for the respondent

Keywords: Criminal Law, Robbery, Identity, R v. Villaroman, 2016 SCC 33

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 (January 1 – January 5, 2018)

Good afternoon and Happy New Year!

It was another quiet holiday week at the Court of Appeal.

In Stokker v. Storoschuk, 2018 ONCA 2, the Court reaffirmed the proper legal test in Nissar v. Toronto Transit Commission, 2013 ONCA 361 for restoring an action that has been administratively dismissed for delay.

In Vancise v. Canada (Attorney General), 2018 ONCA 3, the appellant was compensated by the federal government under the Health of Animals Act for the loss of his cattle that were infected with anaplasmosis after he had imported infected cattle from the US.  The appellant then commenced an action against the government in negligence for not guarding against the importation of anaplasmosis. The motion judge dismissed the action on the basis that it was barred by s. 9 of the Crown Liability and Proceedings Act, which bars actions against the federal government when it has already provided compensation under a government program. The Court of Appeal upheld the motion judge’s decision.

Wishing everyone a warm and safe weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

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

 

Table of Contents

Stokker v. Storoschuk, 2018 ONCA 2

Keywords: Civil Procedure, Administrative Dismissal for Delay, Rules of Civil Procedure, Rule 48.11(b), 48.14, Nissar v. Toronto Transit Commission, 2013 ONCA 36, Gill v. Khindria, 2016 ONSC 5057

Vancise v. Canada (Attorney General), 2018 ONCA 3

Keywords:  Torts, Negligence, Crown Liability, Bar Against Double Recovery, Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, Section 9, Health of Animals Act, S.C. 1990, c. 21, Sections 51 and 53

For Criminal and Ontario Review Board Decisions Click Here.

 

Civil Decisions

Stokker v. Storoschuk, 2018 ONCA 2

[Laskin, Huscroft and Paciocco JJ.A.]

Counsel:

James Lawson, for the appellant

Christopher Lee, for the respondents

Keywords: Civil Procedure, Administrative Dismissal for Delay, Rules of Civil Procedure, Rule 48.11(b), 48.14, Nissar v. Toronto Transit Commission, 2013 ONCA 36, Gill v. Khindria, 2016 ONSC 5057

Facts:

Beginning in 2005, Mr. Stokker and Ms. Storoschuk were in a romantic relationship. Throughout their relationship, the parties were involved in a number of business transactions. Disagreements emerged over land and money. In 2007, Mr. Stokker, the appellant, sued the respondents, Ms. Storoschuk and her corporation, 1641516 Ontario Inc. Since then, the appellant’s lawsuit has languished. It was dismissed administratively twice for delay and then reinstated on consent. Three court-ordered timetables imposed on the appellant were not met.

In December 2015 the action had, once again, been removed from the list. The respondents, unaware of this, brought a motion under rule 48.14 of the Rules of Civil Procedure to have the appellant’s action dismissed for delay. The motion was adjourned for a short time. On the return date, March 17, 2016, the appellant was not called upon to show cause as to why his action should not be dismissed. Instead, the parties agreed to a fourth timetable, as well as a consent order under r. 48.14(4). The timetable set out a series of completion dates that the appellant would have to meet to ready the matter for trial. Clause 3 of the order provided that, “pursuant to Rule 48.14(1), the Registrar shall dismiss this action for delay with costs unless the action has been restored to the trial list on or before August 18, 2016.”

The appellant was late in performing some of the steps in the fourth timetable, but managed to complete the required tasks and to bring a rule 48.11(b) motion to reinstate the action before the August 18, 2016 deadline. The respondents opposed the motion, but the master reinstated the action to the trial list. The respondents appealed to a single judge of the Superior Court of Justice and the appeal was allowed. The appellant now comes before the Court of Appeal, arguing that the appeal judge erred in law in allowing the appeal.

Issues:

(1) Did the appeal judge err in allowing the appeal?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The parties agree that each level of court applied the proper legal test for restoring an action. In Nissar v. Toronto Transit Commission, 2013 ONCA 361, at para. 31, the court said: “The applicable test is conjunctive: a plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation, and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice.”

The appeal judge held that the master erred in applying the first leg of the test by not considering the overall delay from the inception of the litigation. However, in the court’s view, the master was correct to give focus to the period following the March 17, 2016 consent order and timetable. Where delay has been addressed in a prior court order, or consented to, it is any subsequent delay that requires explanation.

As was held in Gill v. Khindria, 2016 ONSC 5057, on a rule 48.11 motion, the court should only consider delay subsequent to a consent order withdrawing a motion to dismiss. The master did not err, therefore, in focusing on the period after the r. 48.14(4) consent order was made. Indeed, in this case there was no delay subsequent to the order, as the appellant had met the imposed deadline of August 18, 2016. The master was therefore correct to reinstate the action to the trial list. The order reinstating the action should not have been set aside.

Vancise v. Canada (Attorney General), 2018 ONCA 3

[Pepall, Benotto and Paciocco JJ.A.]

Counsel:

Teplitsky, for the appellant
W. Wright, for the respondents

Keywords:  Torts, Negligence, Crown Liability, Bar Against Double Recovery, Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, Section 9, Health of Animals Act, S.C. 1990, c. 21, Sections 51 and 53

Facts:

In 1996, the appellant imported four cattle from the United States which were later discovered to be infected with anaplasmosis. At the time, the Canadian government’s policy was to destroy any animals infected with anaplasmosis. Upon discovery of the condition of the four imported animals, the original herd was quarantined at the appellant’s farm by order of the respondents as an “infected place”. During quarantine, seven other cattle became infected and were destroyed. The rest were treated.

Under ss. 51 and 53 of the Health of Animals Act, the Minister exercised discretion to compensate the appellant for the value of the destroyed animals and the costs of eradication treatment for his herd.

In 2012, the appellant commenced the action that is the subject of this appeal against the respondents pleading negligence in not guarding against the importation of animals infected with anaplasmosis and in imposing inadequate quarantine on his farm. The respondent was granted a motion for summary judgment dismissing the appellant’s action on the basis that it was barred by s. 9 of the Crown Liability and Proceedings Act. The appellant appeals the decision of the motion judge.

Issues:

(1) Does Section 9 of the Crown Liability and Proceedings Act apply to bar the appellant’s action?

Holding:

Appeal dismissed.

Reasoning:

(1) Yes. Section 9 is not only a bar on double recovery. Its effect is to prevent actions for recovery where a government scheme has already provided a form of compensation in relation to the death, injury, damage or loss relied on in the action. This is so even where different heads of compensation are claimed. It also bars compensation that arises from “the same factual basis as the action”. The appellant has already been compensated by the respondents under ss. 51 and 53 of the Health of Animals Act.

Criminal Decisions

R v. Short, 2018 ONCA 1

[Hoy A.C.J.O., Doherty and Feldman JJ.A.]

Counsel:

Michael Dineen, Jennifer Micallef and Kristen Allen, for the appellant

Roger A. Pinnock, for the respondent

Keywords: Criminal Law, First Degree Murder, Third Party Suspects, Demeanour Evidence, Opinion Evidence, Hearsay, Appeal Allowed

R v. D.L.T., 2018 ONCA 4

[Sharpe, Watt and Roberts JJ.A.]

Counsel:

Yoni Rahamim, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Unlawful Confinement, Appeal Dismissed

R v. Nur, 2018 ONCA 8

[Sharpe, Watt and Roberts JJ.A.]

Counsel:

Yoni Rahamim, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal Law, Manslaughter, Evidence, Post-Offence Conduct, R. v. Hall, 2010 ONCA 724, Appeal Dismissed

 

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.