Court of Appeal Summaries (September 22 to 26, 2014)

Hi everyone.  This week’s instalment of Blaney’s Ontario Court of Appeal summaries includes decisions covering the following topics:  Child Welfare, Family Law (the variation of spousal support where child support has ceased), Leave to Appeal Costs Orders where the costs ordered were set off against other debts (leave not required), and Extension of Time to Appeal (because of a change in the law after the appeal period has expired but before the order was issued and entered).  There are also several short endorsements covering issues such as malicious prosecution, contempt, extension of time to perfect appeal and summary judgment, one case in the context of limitation periods and the other in the context of whether admissions made by counsel in argument or on discovery are sufficient to grant summary judgment.

I find the issue raised in the Leighton v Best case interesting.  That was a case where the law changed after the appeal period expired but before the order was issued and entered and after the judge who made the order refused to reconsider it on the basis of the change in the law.  Even though there was no crystallized intention to appeal before the appeal period expired, leave was granted to extend the time to appeal on the basis of the change in the law.  The questions that came to my mind in reading the decision were questions like, How long after the appeal period expires can you seek leave to extend the time to appeal because of a change in the law?  Does the order have to remain unsettled at the time the law changed in order to be able to extend the appeal period?  If not, can you extend the time to appeal if the law changed one month, one year or five years after the appeal period expired?  That can’t be the case because otherwise there would never be finality to any decision.  But where is the line drawn?  Maybe there are answers to some or all of these questions.  Unfortunately, these questions were not canvassed in the Leighton v Best decision.

Wishing everyone a nice weekend.

John Polyzogopoulos Blaney McMurtry LLP
jpolyzogopoulos@blaney.com
Tel: 416.593.2953
http://www.blaney.com/lawyers/john-polyzogopoulos

Leighton v Best, 2014 ONCA 667
[Weiler, J.A. (In Chambers)]
Counsel:
A. L. Barber, for the moving parties
R. Kerr, for the responding party

Keywords: Civil Procedure, Extension of Time to Appeal, Change in Law After Appeal Period Expired, Survival of Claims in Bankruptcy, Bankruptcy and Insolvency Act ss. 178(1)(a.1)(i)

Facts:
After a hockey fight, Best was held liable to Leighton for damages for injuries sustained as a result of the altercation. Leighton commenced garnishment proceedings against Best and received funds between September 2010 and August 2011. In September 2011, Best made an assignment in bankruptcy, which resulted in a stay of the garnishment proceedings. Leighton brought a motion for a declaration that his award of damages would survive Best’s discharge from bankruptcy, pursuant to ss. 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act. The motions judge dismissed the motion on September 13, 2013. Leighton sought an extension of time to appeal this decision, as a result of the Court of Appeal reversing a decision relied on by the motions judge (Dickerson v 1610396 Ontario Inc.). The Court of Appeal decision was discovered by Leighton’s counsel two weeks after the appeal period had expired. This was brought to the attention of the motions judge by Leighton’s counsel before the order dismissing the motion had been issued and entered, however the motions judge refused to reconsider.

Issue: Should an order to extend the time to serve and file a notice of appeal be granted?

Holding: Motion allowed, with costs to the responding party.

Reasoning:
Yes, the test for an order to extend the time to appeal is well settled. The test is whether the justice of the case requires that an extension be granted having regard to the circumstances of the particular case and all relevant considerations including: 1) whether the moving party formed a bona fide intention to appeal during the time permitted for an appeal; 2) the length of the delay and the explanation for the delay; 3) the merits of the proposed appeal; and 4) any prejudice to the responding party. The court held that although it had taken almost a year to bring the motion to extend, it was not fatal and had to be considered with all the factors. The judge found that the merits of appeal were strong, since the motions judge made strong reference to the similarities between the Dickerson case and Leighton’s case when coming to a decision. Additionally, although there was some prejudice to Best for being unable to obtain an earlier complete discharge from bankruptcy, it should not prevent an extension from being granted, as it was held to be in the interests of justice to extend the time to file a notice of appeal.

Tags: Civil Procedure, Extension of Time to Appeal, Change in Law After Appeal Period Expired, Survival of Claims in Bankruptcy, Bankruptcy and Insolvency Act ss. 178(1)(a.1)(i)

Korea Data Systems (USA), Inc. v. Aamazing Technologies Inc. (Ajay Amazing Technologies Inc.), 2014 ONCA 652
[Watt, Tulloch and Benotto JJ.A.]
Counsel:
S. Hutchinson, for the moving party Korea Data Systems (USA), Inc. on M44059
H. Book, for the moving party Christina Chiang on M43941 and M44015
C. Francis and M. A. Freake, for the moving party Mendlowitz & Associates Inc. on M43880
J.T. Curry and K.M. Pentney, for the moving party Jay Chiang on M44009

Keywords: Costs, Set-off, Whether Leave to Appeal Costs Order Required,s. 133(b) of the Courts of Justice Act, Security for Costs 

Facts:
The motions before the court arose out of a proposed appeal by the appellant, Korea Data Systems (USA), Inc. (“KDS”) of an order for costs made in favour of Christina Chang (“CC”).  The trial judge ordered KDS and the Estate Trustee jointly and severally liable for costs of the fraudulent conveyance action against CC. Also, there was a refusal to allow a set-off of the costs for the amount by which CC was indebted to KDS.

Issues:
(1) Is leave required to appeal the costs order and, if so, should this court grant leave?
(2) Should the costs appeal be separated from the main appeal?
(3) Should KDS be required to post security for costs?

Reasoning:
(1) No. The trial judge’s decision not to allow set-off had a substantive effect on the legal rights of KDS. The Court referred to Jamieson v. Loueiro and concluded that this appeal was not “only as to costs.” Therefore, leave was not required under s. 133(b) of the Courts of Justice Act.

(2) No. The complexity of the issues involved and the commonality of the history made it necessary to have the costs appeal heard with the enforcement appeal. The Court held that the appeals should be heard together.

(3) No. The appeal was not frivolous devoid of merit. This was not an appropriate case for security for costs.

Tags: Costs, Set-off, Whether Leave to Appeal Costs Order Required, s. 133(b) of the Courts of Justice Act, Security for Costs

Gray v. Gray, 2014 ONCA 659
[Hoy A.C.J.O., Gillese and Lauwers JJ.A.]
Counsel:
B.R.G. Smith and S. Conlin, for the appellant
C.A. Allen and M.L. Celhoffer, for the respondent

Keywords: s. 15.3 of the Divorce Act, Child Support, Spousal Support, Needs Basis, Compensatory Basis, Spousal Support Advisory Guidelines, Calculation of Income

Facts:
The respondent, James David Gray (Mr. Gray) brought a motion to change to eliminate child support for the children of the marriage because they were all now adults. Mr. Gray also sought to eliminate the obligation to pay spousal support, which was set in 1998 at $800/month, indexed. The appellant, Kathleen Janet Gray (Ms. Gray) sought an increase in spousal support. The motion judge conducted a trial in which he terminated child support and ordered spousal support to continue at $800/month, indexed. Ms. Gray appealed that decision.

Issue: Whether spousal support ordered by the motion judge was adequate in light of the law as it applies to the facts of this case.

Holding: Appeal allowed. 

Reasoning:
The court should not overturn a support order unless the reasons for decision disclose an error in principle, a significant misapprehension of the evidence or unless the award is clearly wrong.

Based on the evidence accepted by the motion judge, the spousal support amount of $800 per month, indexed, was clearly wrong due to a number of errors in principle and a significant misapprehension of some of the evidence.

There are two distinct conceptual bases for entitlement to spousal support that were relevant to this case: the needs basis and the compensatory basis (the third basis, contractual, was not relevant in this case).

The motion judge’s determination of Ms. Gray’s entitlement to support on a needs basis was correct in principle but but the trial judge’s determination of actual need was wrong in fact and in principle. In determining need, courts ought to be guided in part by the principle that the spouse receiving support is entitled to maintain the standard of living to which she was accustomed at the time cohabitation ceased. In 1998, Thompson J awarded an amount of spousal support that was lower than he might have otherwise ordered, because child support payments awarded at that time were high. This award recognized that there is financial synergy that benefits the spouse who has custody of the children and is consistent with s 15.3 of the Divorce Act. The spousal support award in 1998 was not based on Ms. Gray’s actual need. It was therefore wrong for the motion judge to conclude that Ms. Gray’s need in 2014 was no greater than it was in 1998 when the order of $800/month, indexed was made.

In determining need, the motion judge also erred in the determination of Ms. Gray’s income in that he included the amount Ms. Gray received in spousal support payments as part of her income.

The purpose of compensatory support is to share the economic advantages and disadvantages that accrued because of the marriage and its subsequent breakdown. The Court disagreed with the motion judge’s conclusion that Ms. Gray was not entitled to compensatory support because the motion judge’s reasoning did not offer any analysis of the economic consequences of the marriage or its breakdown, as intended by the Supreme Court in Moge v Moge, [1992] 3 SCR 813 at paras 41-42. The Court found that the evidence supported an entitlement to compensatory support.

In determining the appropriate level of spousal support, the Court found that the motion judge referred to the Spousal Support Advisory Guidelines (SSAG) but did not advert to them when he set the amount of spousal support. The Court used the SSAG as a guideline and considered complicating factors, such as variations based on the post-separation income increases of the support payor and the support payor’s second family, in determining the appropriate level of spousal support. It concluded that $2,720/month was an appropriate level of spousal support for Ms. Gray on an indefinite basis, subject to a review based on a material change in circumstances.

Tags: Divorce Act, Child Support, Spousal Support, Needs Basis, Compensatory Basis, Spousal Support Advisory Guidelines, Calculation of Income

Bennett Environmental Inc. v. Bennett, 2014 ONCA 655
[Juriansz, LaForme and Lauwers JJ.A.]
Counsel:
J. A. Bennett, acting in person
E. N. Kolers and D. Hodgson, for the respondent

Keywords: Counterclaim, Malicious prosecution, Prematurity

Facts: The motion’s judge granted the respondent’s motion to strike the appellant’s counterclaim without leave to amend. The appellant’s counterclaim rested on three allegations: (1) that the respondent made misleading statements to the United States Department of Justice; (2) that these misleading statements resulted in his indictment; and (3) that he has suffered damage as a result of public knowledge of the indictment.

Issues:  Did the appellant’s counterclaim entirely rest on malicious prosecution?

Decision:  Appeal dismissed.

Reasoning:
Yes. A claim for malicious prosecution can only succeed if the impugned prosecution has been terminated in favour of the plaintiff.  The appellant asserted that the prosecution against him was without merit and based on false or negligently provided statements. Because the prosecution was still ongoing, the appellant’s claims were premature. The Court also applied Gottlieb v. Stikeman Elliot LLP, and concluded that the decision could not be distinguished on the basis that it involved a domestic prosecution and the appellant’s involved a foreign one.

Tags: Counterclaim, Malicious prosecution, Prematurity

Ceridian Canada Ltd. v Azeezodeen, 2014 ONCA 656
[Juriansz, LaForme and Lauwers JJ.A]
Counsel:
F. Azeezodeen, acting in person
R. Cookson, for the respondents

Keywords: Civil Practice, Breach of Court Order, Contempt Proceeding, Sentencing

Facts:
Ms. Azeezodeen was an independent contractor with the respondent company, Pendylum Inc., and was subcontracted to work with the respondent company, Ceridian Canada Ltd. After being terminated by Pendylum for refusing to undergo a background check, Ms. Azeezodeen embarked on an email campaign against the respondents. Ms. Azeezodeen told Ceridian that if it did not settle and pay her a significant sum of money by a certain date, she would issue a damaging press release disclosing confidential business methods and disparaging the company’s reputation. In May 2014 Ceridian obtained a five-day ex-parte injunction against Ms. Azeezodeen, which was later extended. The motions judge found that Ms. Azeezodeen had breached the injunction and held her in contempt of court. She was given a sentence of 20 days imprisonment to be served on weekends. She appealed both the contempt finding and the corresponding sentence.

 Issues:
(1) Should the motion judge’s finding that Ms. Azeezodeen was in contempt of court be set aside?
(2) Should the corresponding sentence be set aside?

 Holding: Appeal dismissed, with costs to the respondent.

Reasoning:
(1) No, although Ms. Azeezodeen argued that the original injunction should not have granted, this is not a defence to a contempt proceeding. A Superior Court order must be obeyed until it is set aside. Although Ms. Azeezodeen focused narrowly on the wording of the order, the court rejected a formalistic interpretation of the injunction. Instead, one must comply with both the letter and spirit of an injunction. The court held that the motions judge had an ample basis for finding that she had breached the letter and spirit of the injunction and the contempt finding was proper.

(2) No, Ms. Azeezodeen did not demonstrate an error of principle in the motion judge’s reasoning or that the sentence imposed was not fit.

Tags: Civil Practice, Breach of Court Order, Contempt Proceeding, Sentencing

Kim v. The Manufacturers Life Insurance Company, 2014 ONCA 658
[Juriansz, LaForme and Lauwers JJ.A.]
Counsel:
D.W. Kim, acting in person
M.B. Anderson , for the respondent

Keywords:  Motion for summary judgment, Limitations Act, 2002 s. 5, limitation periods, discoverability of claim, disability, fraudulent concealment of documents

Facts:
This appeal arises from a decision of the Superior Court granting the respondent’s motion for summary judgment, on the basis that the appellant failed to commence its action within the two-year limitation period prescribed the Limitations Act, 2002. At the Superior Court, the appellant unsuccessfully argued that he missed the two-year limitation period because his psychological condition made him incapable of commencing an action against the respondent. On appeal, the appellant argued that the limitation period should be suspended because the respondent fraudulently concealed documents.

Issue: Was the limitation period suspended because the respondent fraudulently concealed documents from the appellant?

Holding: Appeal dismissed.

Reasoning:
No. The appellant discovered his claim against Manulife on September 28, 2008, as demonstrated by his demand letter to the respondent of the same date. In this  letter, the appellant pointed out to the respondent that it had breached its contractual obligations under their brokerage agreement. Regardless of whether or not the respondent fraudulently concealed documents, this did not affect the appellant’s knowledge that he had a cause of action. The appellant’s statement of claim was issued almost four years after his letter.

Tags: Motion for Summary Judgment, Limitations Act, 2002 s. 5, Limitation Period, Discovery of Claim, Disability, Fraudulent Concealment of Documents

McNally Construction Inc. v Hamilton Port Authority, 2014 ONCA 651
[Simmons, Rouleau and Hourigan JJ.A.]
Counsel:
M. Abradjian and R. Kis, for the appellant
P.J. Brunner, for the respondent

Keywords: Summary Judgment, Third Party Claim, Contribution and Indemnity, Palpable and Overriding Error, Contractual Limitation Period

Facts:
The background to this appeal can be found at 2014 ONSC 1180. At that motion for summary judgment, brought by the respondent third party against the appellant defendant, the motion judge granted the motion, dismissing the appellant’s claim against the respondent for contribution and indemnity. The motion judge found that the plaintiff and plaintiff’s counsel had made formal and informal admissions at examinations for discovery and at the summary judgment motion that conclusively established that the plaintiff had no claim against the third party.

Holding:  Appeal allowed. The motion judge’s dismissal of the third and fourth party claims was set aside.

Reasoning:
At the motion hearing, comments by the plaintiff’s counsel with respect to the respondent’s liability did not constitute an admission that the plaintiff did not have a claim against the respondent. Those comments were qualified with respect to the respondent’s liability. Further, the plaintiff maintained its plea in its statement of claim that the respondent was negligent. Although plaintiff’s counsel acknowledged at the motion hearing that the plaintiff did not, at that stage, have any evidence of a claim against the respondent, this did not exclude the possibility that such a claim would be made out at trial on the whole of the evidence. The motion judge’s finding was a palpable and overriding error.

Finally, the question of whether the third party claim against the respondent was barred by the contractual one-year limitation period was best left to be resolved at trial. The appellant had raised questions as to whether the limitation period had run and whether it applied to claims for contribution and indemnity.

Tags:  Summary Judgment, Third Party Claim, Contribution and Indemnity, Palpable and Overriding Error, Contractual Limitation Period

Winwin Capital Management, LLC v. Oversea Chinese Fund Limited Partnership, 2014 ONCA 662; and Toronto-Dominion Bank v. Tang, 2014 ONCA 657
[Juriansz, LaForme and Lauwers  JJ.A.]
Counsel:
W. Tang, acting in person
A. Zavaglia, for the respondent Winwin Capital Management, LLC
J. Kukla, for the respondent Toronto-Dominion Bank

Keywords:   Administrative Dismissal, Extensions of Time to Perfect Appeal

Facts:
The appellant is involved in concurrent criminal and civil appeal proceedings.

After the appellant’s civil appeal was dismissed for delay, the dismissal was set aside and the appellant was granted an extension to perfect his appeal. The appellant then missed the extended deadline, and the appeal was again dismissed for delay.

The appellant sought another extension. He argued he missed the deadline because he was incarcerated and in segregated custody for two months, and also because he did not have the funds to hire a lawyer for both his criminal and civil appeals. The further extension was refused because the appeal had no discernible merit.

The appellant appeals the refusal for another extension. He also seeks a stay of proceedings pending the conclusion of his criminal appeal. He argues he will then be able to afford a lawyer to help him with the civil appeal.

Issue: Did the appellate motions judge err in refusing to grant the appellant a further extension?

Holding: Motion dismissed.

Reasoning:
No. Although the Court of Appeal accepted that the appellant’s failure to perfect his appeal in time was a result of his incarceration, the appeal had no reasonable prospect of success. The decision to grant an extension is discretionary and entitled to deference. The appellate judge did not commit an overriding error, nor did she apply the wrong legal principle in arriving at her decision.

Tag:   Administrative Dismissal, Extensions of Time to Perfect Appeal

Algonquins of Pikwakanagan v. Children’s Aid Society of the County of Renfrew, 2014 ONCA 646
[Doherty, Tulloch and Benotto JJ.A.]
Counsel:
Hensel, S. Clarke and J. Friedland for the appellants, Algonquins of Pikwakanagan
M.McCarty, for the respondent, Office of the Children’s Lawyer
Ferri and K.A. Pegg, for the respondent, the Children’s Aid Society of the County of Renfrew

Keywords:      Family Law, Custody, Aboriginal, First Nations, ss 37(2), 37(3), 37(4) and 57(5) Child and Family Services Act, Best Interests of the Child, Due Weight and Consideration of First Nations’ Status

Facts:
This was an appeal by the Algonquins of Pikwakanagan and MB, the maternal grandmother of the children S and Z, from a Superior Court judgement which dismissed an appeal from an Ontario Court of Justice ruling ordering Crown wardship of the children with access to MB. The appellants sought to have the children placed in MB’s custody. The Children’s Aid Society (CAS) and the children, through their counsel, requested that the appeals be dismissed.

The CAS apprehended the children in 2009 because MB was unable to protect them from unsupervised contact with C, their mother, and because MB, who was overwhelmed following the breakup of her marriage, could not care for the children. The CAS attempted to place the children with a First Nations’ family but was unable to find a suitable family. The CAS ultimately placed the children with the Ds, a non-Aboriginal family.

Issues:
(1) Was the apprehension justified and were the children in need of protection at the date of the second trial?
(2) Did the trial judge err in his consideration of the children’s Aboriginal heritage?
(3) What is in the best interests of the children today?
(4) Should MB be awarded costs?

Holding: Appeal dismissed. 

Reasoning:
(1) Yes. Subsection 37(2) of the Child and Family Services Act (CFSA) sets out criteria for determining whether apprehension is justified. There was ample evidence that the children were in need of protection at the time of apprehension and at the time of the second trial.

(2) No. The appellants argued that in determining an Aboriginal child’s best interests, First Nations status should be given more weight than other factors. The court rejected this argument.  Subsection 37(3) of the CFSA lists factors that must be considered in determining the best interests of a child. Subsection 37(4) directs that the importance of the child’s cultural identity and the uniqueness of Aboriginal culture, heritage and traditions shall be taken into account. Similarly, ss 57(5) requires the Court to place an Aboriginal child with a member of the child’s extended family, a member of the child’s band or native community or another “Indian family,” unless there is a substantial reason not to do so. The court held that nothing in the CFSA suggests that the weight given to one consideration should be greater than that given to another consideration, and that ss 57(5) should not be read as usurping the best interests of the child. All considerations, including First Nations’ issues, are subject to the ultimate issue: what is in the best interests of the child?

(3) The trial judge ruled that the children should remain with the Ds, with continued contact with MB to maintain a connection to their Aboriginal culture and heritage. The Court held that this access regime was in the best interests of the children.

(4) No. MB argued that she was entitled to costs because the CAS failed to consult with the Algonquins of Pikwakanagan in contravention of ss 213(a) of the CFSA. The Court rejected this argument, finding that the CAS had made a genuine attempt to consult, assist and seek assistance from both MB and the Algonquins of Pikwakanagan.

Tags:   Family Law, Custody, Aboriginal, First Nations, ss 37(2), 37(3), 37(4) and 37(5) Child and Family Services Act, Best Interests of the Child, Due Weight and Consideration of First Nations’ Status

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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