Here are this week’s Court of Appeal Summaries. If you find this blog interesting, please feel free to spread the word.
[Weiler, Laskin and van Rensburg JJ.A]
Allan Zaakir, appearing in person, assisted by Zev Wise, student-at-law
Nancy J. Tourgis and Eric P. Borzi, for the respondent
Keywords: Civil Practice, Summary Judgment, Rule 20
Allan Zaakir did not comply with payment obligations under a Share Purchase Agreement. Hits Entertainment Inc. sued for payment and moved for summary judgment on its action against Mr. Zaakir. The motion was granted, as there was no genuine issue requiring trial. Mr. Zaakir appealed. He submitted that there were genuine issues requiring a trial, including that the business he purchased from the respondent was an “illegal business”.
(1) Should the lower court’s order granting summary judgment be set aside?
Appeal dismissed, with costs to the respondent.
(1) No, the motions judge thoroughly analysed the evidence and applied the proper principles for granting summary judgment. Mr. Zaakir’s contentions that there are issues requiring a trial were not supported by the record. He provided no evidence beyond mere statements to support his contentions.
Tags: Civil Practice, Summary Judgment, Rule 20
[Hoy A.C.J.O., Cronk and Pepall JJ.A.]
P.A. Mahoney and N. Debono, for the appellant
R.E. Carr and C.P. Thompson, for the respondent
Keywords: Invitation to Tender, Tenders, Bids, Breach of Contract, Non-Compliance, Contractual Interpretation, Express or Implied Terms, Waiver of Formality, Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), Contract A, Contract B, Exculpatory Clause, Exclusionary Clause, Unconscionability, Unenforceability, Public Policy
Facts: This appeal arises from a decision of the Superior Court which dismissed the appellant’s action for breach of contract action against the respondent. The appellant, a construction company, responded to an invitation to tender made by the Ministry of Transportation of Ontario (“MTO”), regarding a highway widening project. The appellant submitted the lowest bid, but it was not accepted by the MTO because it failed to comply with the terms of its written invitation to tender. The MTO then accepted the bid of the second-lowest bidder. The appellant sued the Province of Ontario for damages in the form of lost profits, on the basis that MTO allegedly breached the invitation to tender by failing to accept its bid.
(1) Did the trial judge err in finding that “Contract A” was not formed when the appellant submitted its tender to the MTO?
(2) Did the trial judge err in law in concluding that the MTO had the right to investigate the appellant’s bid for non-compliance with the tender documents?
(3) Did the trial judge err in determining that the nature of the appellant’s non-compliance was such that the MTO was not required to accept its bid?
(4) Did the trial judge err in its conclusion that the MTO did not breach the tender agreement when it notified the appellant that its bid was non-compliant 21 days after the opening call for tender rather than within ten days after the opening of tenders?
(5) Did the trial judge err in its holding that the exculpatory clause in the written tender documents applies to the facts of the appellant’s case, thereby barring its claim against the MTO?
Appeal Dismissed. Appellant was ordered to pay the respondent costs of $10,000.
(1) Yes. The parties intended that contractual relations would be created when the appellant submitted its bid, even if the bid did not comply with the tender documents (Contract A). Therefore, according to the language in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), Contract A was formed between the parties when the appellant responded to MTO’s written invitation to tender and submitted its bid. This conclusion was based on a review of several express terms in the tender documents, including the requirement that bidders submit tender deposits with their bids, and an exculpatory clause which protected the MTO from claims arising from its non-acceptance of non-compliant bids.
(2) No. The court agreed with the trial judge’s findings that the tender documents do not expressly preclude the MTO from investigating complaints that bids are non-compliant. Furthermore, the court found that there was no basis for implying a term in the tender documents that would prohibit MTO from conducting an investigation of an allegedly non-compliant bid. Even though the tender documents did not expressly grant MTO the right to conduct investigations of this nature, there was evidence that it had an unwritten policy that it would investigate a bid if another bidder complained that it was not compliant.
(3) No. The court agreed with the trial judge and found that as a result of the nature of the appellant’s non-compliance, the MTO was not required to accept the appellant’s bid. The court reviewed the tender documents and found that it contained both a “privilege clause” and a “discretion clause.” The privilege clause provided MTO with the right not to accept the lowest bid or any bid at all, and the discretion clause gave MTO the right to “waive formalities” contained in a non-compliant bid and accept it as the winning bid. In sum, the court found that the MTO had the choice to waive the non-compliance of a bid (if it amounted to a “formality”) and accept it as the winning bid, but it was not required to do so.
The court found that the appellant’s non-compliance was a formality (contrary to the finding of the trial judge, who thought it was material and more than a formality), because it did not materially affect the price or performance of Contract B. However, the MTO was not required to waive this formality, because it retained discretion in this matter. The MTO acted reasonably and in good faith in choosing not to waive this formality. Therefore, it cannot be sued for failing to waive the appellant’s non-compliance with the formality.
(4) No. While a provision in the tender documents required the MTO to notify bidders within 10 days of the opening call for tenders if their bids were rejected, the MTO did not reject the appellant’s bid within that timeline. Instead, the MTO notified the appellant 21 days after the opening call that its bid was non-compliant. The tender documents did not expressly or impliedly require the MTO to notify all non-compliant bidders in 10 days whether or not the “formalities” in their bids were waived. The tender documents only required the MTO to notify the successful bidder within 30 days after opening call that its tender was selected.
(5) No. The language of the exculpatory clause is clear and when considered together with the commercial context of the tender documents as a whole, it applies to prevent the appellant from bringing this claim for breach of contract against the respondent. Furthermore, the exculpatory clause is not unconscionable, as the appellant is a sophisticated commercial party who could have chosen not to submit a bid if it did not agree with the clause. Finally, the clause was not contrary to public policy and is enforceable.
Tags: Invitation to Tender, Tenders, Bids, Breach of Contract, Non-Compliance, Contractual Interpretation, Express or Implied Terms, Waiver of Formality, Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), Contract A, Contract B, Exculpatory Clause, Exclusionary Clause, Unconscionability, Unenforceability, Public Policy
[Strathy C.J.O. (In Chambers)]
Douglas Elliott and Ruzbeh Hosseini, for the moving parties
Sarit Batner, for the responding party, Robert Hryniak
Luisa Ritacca, for the responding party, Cassels Brock & Blackwell LLP J
Jonathan Rosenstein, for the responding party, Gregory Jack Peebles
Keywords: Costs, Security for Costs, Priority of Payment for Costs
The Mauldin Group brought a successful motion for summary judgment against the defendant, Robert Hryniak, finding that he had engaged in fraud. Hryniak was ordered to pay damages of approximately $1.2 million USD to the Mauldin Group. Hryniak filed notices of appeal, staying the judgments against him. As Hryniak failed to perfect his appeals within the required time, he brought a motion for an extension of time. At the same time, the Mauldin Group brought a motion for: (1) an order lifting the automatic stay on enforcement pending appeal; (2) an order that Hryniak post security for costs; and (3) an order requiring Hryniak to pay the amounts awarded by summary judgment. In January 2011, the motions came before Weiler J.A. She granted Hryniak’s motion for an extension of time but imposed conditions, including that he post an irrevocable letter of credit with the Accountant in the amount of $950,000. Instead of a letter of credit, Hryniak deposited a $950,000 bank draft with the Accountant. With interest, this deposit is now worth just over $1 million.
The successful plaintiffs, the Mauldin Group, seek payment of the $1 million in funds posted by Hryniak, to the Accountant of the Superior Court of Justice pursuant to a prior order of the court. This money would partially satisfy their judgment. The motion is opposed by Hryniak. He says the majority of the money should be paid in priority, to his lawyers, McCarthy Tétrault LLP (“McCarthys”).
He relies upon:
a) an order of this court in 2011, requiring that he post a letter of credit in the amount of $950,000 as a condition of granting his request for an extension of time to perfect his appeal;
b) the assertion by McCarthys of a solicitor’s lien under s.34(1) of the Solicitor’s Act, R.S.O. 1990, c. S.15; and
c) case law in the Mareva injunction context that suggests a party should not be deprived of the means to mount a legal defence.
(1) Should funds posted for security to the court be paid to one’s own solicitor in priority to satisfying the judgment of the successful party?
No. Motion is dismissed with costs.
(a) The Order of Weiler J.A.:
The purpose of the order was to preserve the asset and to prevent its dissipation. The issue of Hryniak’s legal fees was not raised before Weiler J.A. and no inference can be drawn from the manner in which the funds were to be provided.
(b) Solicitor’s Lien:
The amount held by the Accountant was not “property recovered or preserved through the instrumentality of the solicitor” for the purposes of s. 34(1). Furthermore, an order under s. 34(1) is discretionary and in the judge’s view the equities in the case were overwhelmingly against granting a charge. If McCarthys is successful in obtaining a priority charge on the full amount of its claim, the Mauldin Group will get very little or nothing, even though it was successful on the summary judgment motion, on the appeal to this court, on the appeal to the Supreme Court and on the motion for rehearing before the Supreme Court.
(c) Mareva Jurisprudence:
First, a Mareva order may provide for the payment of legal fees. If it does not, the defendant will generally bring a motion to permit payment of fees. However, no such request was made at the time of Weiler J.A.’s order. Second, the order is generally made while the litigation is ongoing, not after a judgment has been rendered. Third, there is no unfairness to Hryniak. Payment of his legal fees at this time is not required to permit him to proceed with the litigation. To the extent there is unfairness, it falls on McCarthys which will be unpaid for much of its work. However, McCarthys accepted that risk in continuing to work when it was no longer being paid, and without any assurance that it would be paid.
Tags: Costs, Security for Costs, Priority of Payment for Costs
[Feldman, MacPherson and Hourigan JJ.A.]
P.J. Pape and T.A. Pagliaroli, for the appellants
Bombier and K. Pentney, for the respondents, Dr. I. Chandran, Dr. S. Girvitz and Dr. J. Bohay
W.D.T. Carter, E. Krajewska and L. Crowell, for the respondent, William Osler Health Centre
Medical malpractice, standard of care, causation, appellate review of factual findings, palpable and overriding error, Grass (Litigation Guardian of) v Women’s College Hospital
In this medical malpractice case, Ms. Mangal gave birth to a healthy baby by caesarean section at the respondent hospital. Nine hours later she was pronounced dead. Ms. Mangal’s family, the appellants, brought an action against the respondents, alleging that that she had died of post-partum haemorrhaging that the nurses and physicians caring for her had failed to properly diagnose and treat. A variety of negligent acts were alleged to have caused or contributed to Ms. Mangal’s death.
The trial judge, Marrocco J., ultimately dismissed the claim against all respondents. He determined that Ms. Mangal died because of a blockage in her lung that prevented blood from flowing from the right side of her heart to the left side. He found a single breach of the requisite standard of care, determining that Dr. Bohay, an anaesthetist, breached his duty of care by failing to promptly notify an obstetrician about Ms. Mangal’s condition at a critical stage. However, Marrocco J. found that, on a balance of probabilities, the blockage that caused Ms. Mangal’s death could not have been avoided if Dr. Bohay had not delayed in contacting an obstetrician and the decision to return Ms. Mangal to surgery had been made a half hour earlier.
- Did the trial judge err in finding that Ms. Mangal died from a blockage in her lung?
- Did the trial judge err in finding that various omissions by the respondent physicians and the respondent hospital played no causal role in Ms. Mangal’s death?
- Did the trial judge err in finding that Dr. Bohay breached the standard of care by not ensuring that an obstetrician was promptly called?
Appeal and cross-appeal dismissed.
[Hourigan, MacPherson JJ.A.]
The trial judge considered the theories advanced by both parties and rejected them. He was not obliged to accept either party’s theory of liability. It was open to him to accept some, none, or all of a witness’s evidence, including an expert witness’s evidence. The trial judge’s decision to reject the appellants’ cause of death theory was well grounded in the evidence and is entitled to deference. The appellants did not adduce evidence that supported their theory that Ms. Mangal was actively bleeding for hours or that any haemorrhage went unnoticed and untreated. The trial judge’s conclusion with respect to the cause of death was open to him and was based on reasonable inferences based on the evidentiary record. The appellants failed to show that he made any palpable and overriding error in reaching his finding.
The appellants failed to establish a palpable and overriding error in the trial judge’s conclusion that the 30-minute delay in surgery, caused by Dr. Bolay’s delay in contacting an obstetrician, was not causally linked to Ms. Mangal’s death. Accepting the trial judge’s cause of death theory, there is no evidence than an earlier surgery would have prevented Ms. Mangal’s blockage in the lung and her subsequent heart failure.
Furthermore, even if the appellants could establish a palpable and overriding error in the trial judge’s conclusion regarding the cause of death, they did not establish that the trial judge erred in rejecting their cause of death theory. In those circumstances, without the critical finding of a cause of death, it was not possible to establish a causal link between the delay in the surgery and Ms. Mangal’s death.
Finally, it was not pleaded and there was no evidence adduced at trial to show, that the delay in ordering and administering blood products fell below the standard of care. Even if it did, as the trial judge found, the appellants did not establish that this caused or contributed to Ms. Mangal’s death. There was also no evidence to show that the respondents’ administration of blood products in proportion to blood fell below the standard of care.
It was open to the trial judge to find that Dr. Bohay’s orders to the nurse on duty should have prioritized notification to an obstetrician of Ms. Mangal’s condition. Thus, it was open to him to find that Dr. Bohay’s conduct fell below the standard of care.
[Feldman J.A. (dissenting)]
Feldman J.A. would have allowed the appeal and ordered a new trial.
First, on the trial judge’s conclusion that Ms. Mangal died because of a blockage in the lung, Feldman J.A. held that this was not supported by the evidence at trial. His conclusion, therefore, constituted a palpable and overriding error. Furthermore, the trial judge’s conclusion on Ms. Mangal’s death was not put forward by either party at trial, was not the opinion of any experts, and was based on pieces of evidence that were not explored with witnesses on cross-examination. This was contrary to the decision in Grass (Litigation Guardian of ) v Women’s College Hospital (2005), 75 OR (3d) 85 (CA) and constituted an error of law. Overall, these errors undermined the trial judge’s analysis of the standard of care and causation.
Feldman J.A. disagreed that the appellants failed to meet their onus of proof regarding the cause of Ms. Mangal’s death. The appellants’ position was supported by expert evidence and was consistent with the written conclusion of most of the physicians involved in Ms. Mangal’s treatment. Because the trial judge looked for a cause of blockage, he did not consider the appellants’ evidence for the cause of death, as he otherwise would have, to determine whether they met their onus of proof.
As a result of the trial judge’s conclusion on Ms. Mangal’s death, his assessment of whether an earlier decision to go to surgery was more likely than not to have contributed to her death was necessarily flawed. His causation analysis was also contrary to Grass . The appellants did not have an opportunity to address the causation analysis ultimately relied on by the trial judge. It was not an analysis put forward by them, by the respondents, or by the witnesses at trial. The trial judge was only entitled to reject both parties’ theories of causation if he did so based on the evidence.
Medical malpractice, standard of care, causation, appellate review of factual findings, palpable and overriding error, Grass (Litigation Guardian of) v Women’s College Hospital
[Gillese, van Rensburg and Hourigan JJ.A.]
A. Farrer, R.C. Halpern and K.L. Cahill, for the appellants
D.A. Cruz, C. Hubbard and S. Kushner, for the respondents
Keywords: Medical Malpractice, Prenatal Care, Professional Negligence, Pre-eclampsia, Causation, Standard of Care
In 1992, the appellant sought prenatal care from the respondent, who had been her doctor for seven years. She saw him approximately 14 times throughout her pregnancy.
The appellant had a history of high blood pressure, though her blood pressure was normal until her third trimester. The respondent prescribed her a low dose of Vasotec and gave her a sample pack of four pills. She took the sample pills, but never filled the prescription. The respondent was aware that the appellant was at risk of developing pre-eclampsia, a condition that can inhibit blood supply from mother to fetus. Signs of the condition are a sudden increase in blood pressure, protein in the urine, and swelling.
At birth, the baby was not breathing and was resuscitated by the respondent. The baby was diagnosed with cerebral palsy – the result of brain damage that occurred due to a lack of oxygen in the baby’s blood supply.
The appellant argued the respondent’s negligent prenatal care caused the baby’s cerebral palsy. Evidence was adduced to show the risks that Vasotec poses to fetuses. Further, it was disputed whether two urine tests were performed during the appellant’s final trimester. Numerous experts testified about the appellant’s likely medical condition, methods of testing for pre-eclampsia, and to the treatment of pregnant women with high blood-pressure.
The trial judge held the respondent did not breach the standard of care expected of a doctor in 1993 by prescribing Vasotec. He found that the dose was too low to cause injury. Further, the trial judge held that although the respondent fell below the standard of care in his record-keeping policies, this did not cause the baby’s injury. The trial judge found as fact that the baby’s oxygen deprivation occurred within the few minutes before delivery and was not the result of pre-eclampsia.
On appeal, the appellant arguef the trial judge erred in rejecting alternative theories of causation – namely that the baby would not have suffered oxygen deprivation had the respondent referred the appellant to an obstetrician or performed an induction.
(1) Did the trial judge commit a palpable and overriding error in failing to find that the mother
(2) Did the trial judge err in concluding that the respondent was not negligent in during prenatal treatment, particularly in light of the respondent’s admission that he fell below the standard of care?
(3) Did the trial judge err in dismissing the alternative causation theories?
(4) Did the trial judge err in dismissing the informed consent claim?
(1) No. The trial judge found that the mother did not have pre-eclampsia after taking into account all of the evidence. It was a proper exercise of the trial judge’s discretion to admit expert evidence not addressed in the expert report, as it was in response to another expert’s testimony and within the scope of his expertise.
(2) No. In light of other expert opinion and the context in which the doctor’s admissions were given, it would have been an error for the trial judge to accept the doctor’s admissions as determinative of the issue. The respondent admitted he fell below the standard of care during a line of questioning that presumed the urinalyses were never performed. The trial judge found as fact that the tests were done.
(3) No. The trial judge gave due consideration to the appellant’s theory regarding induction. Although the presence of pre-eclampsia and hypertension might lead one to recommend an induction, the evidence did not establish that the appellant was suffering from either condition to such an extent that it would have had a material effect on the baby’s oxygen levels.
(4) No. The standard of care in 1993 did not require the respondent to warn the appellant of the risks associated with the prescribed medication, nor did it require him to recommend an induction.
Tags: Medical Malpractice, Prenatal Care, Professional Negligence, Pre-eclampsia, Causation, Standard of Care
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