Hello for another week.
Civil law topics covered by the Court of Appeal this week included the assignment of leases and whether a landlord was reasonable in refusing to consent because the assignee was affiliated with a competitor, family law, real property, municipal law and, as usual, several appeals from summary judgment.
I hope everyone has a safe and fun Family Day long weekend.
Table of Contents
Keywords: Contracts, Franchise Law, Arthur Wishart Act, Requests to Admit, Rules of Civil Procedure, Rule 51.03, Conflict of Interest, Withdrawal of Counsel, Adjournments, Ineffective Assistance of Counsel
Keywords: Real Property, Commercial Leases, Shopping Malls, Lease Assignments, Consent, Whether Required, Whether Unreasonably Withheld, Commercial Tenancies Act, ss. 23(2)
Keywords: Family Law, Fraudulent Conveyance, Summary Judgment, Procedural Fairness, Fresh Evidence, Interlocutory Orders, Leave to Appeal, Courts of Justice Act, s.19(1)(b)
Keywords: Contracts, Real Property, Costs
Keywords: Municipal Law, Site Alteration Permit, Municipal Act, 2001, ss. 223.16, 239(2)(f), 239.1 & 239.2, Municipal Council Meetings, Public, In Camera, Solicitor-Client Privilege, Investigator’s Report
Keywords: Contracts, Indemnities, Non est factum, Summary Judgment, Oral Evidence, Refusals on Cross-Examination
For a list of Civil Endorsements, click here
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For a list of Criminal Decisions, click here
[Feldman, MacPherson and Miller JJ.A.]
Ashraf Ahmad, acting in person
David Fogel, for the respondent
The appellant was the manager of a food franchise business, The Rotisseries Mom’s Express Limited. The respondent was a franchisee that entered into a franchise agreement with the franchisor. This contract was governed by the Arthur Wishart Act (“AWA”). The franchisee brought an action against the corporate franchisor and two personal “franchisor’s associates”, the appellant and Pierre McLean. The defendants, through their counsel Mr. Cadieux, stated that they wanted to comply with the AWA and that they would pay any amounts properly owing to the franchisee. Unfortunately, the parties were unable to settle their dispute as they could not agree on the amount, and a trial date was set. The defendants did not respond to a Request to Admit, and, by virtue of rule 51.03 of the Rules of Civil Procedure, they were deemed to admit the truth of the facts set out in the Request to Admit and the authenticity of the documents listed in it.
The defendants’ instructions to their counsel was that they intended to settle with the plaintiff and that they did not want to run up legal fees preparing for a trial that would not take place. As the trial date approached, Mr. Cadieux grew concerned that he was unable to contact his clients, and eventually informed the defendants that he could no longer represent them based on a serious conflict of interest that had arisen between them. Mr. Cadieux brought a motion to be removed as counsel of record for the defendants and also sought an adjournment of the trial so that the defendants could seek new counsel. Counsel for the plaintiff opposed the adjournment request and moved for judgment on the basis of the unanswered Request to Admit. The trial judge refused to grant the adjournment. The motion for judgment based on the Request to Admit then proceeded. Mr. Cadieux stayed in the courtroom and represented the defendants, who were not present. The trial judge rendered partial judgment in favour of the plaintiff.
(1) Did the trial judge err by not permitting defendants’ counsel to get off the record at the commencement of the trial and by not granting the appellant’s request for an adjournment to enable him to retain and instruct new counsel?
(2) Did the appellant receive ineffective assistance from his counsel in the proceedings that culminated in the partial judgment against him?
Holding: Appeal dismissed.
(1) No. Based on Khimji v. Dhanani, the decision to adjourn a hearing is a discretionary one. There was no reason to interfere with the trial judge’s exercise of discretion in this case. The trial date was well-known to the appellant. The day before the hearing, his counsel advised him to attend in person and described the various scenarios. The appellant chose not to attend his own trial with his eyes wide open. In addition, the appellant’s counsel remained in court and represented his client on the plaintiff’s motion in reliance on the Request to Admit despite his desire to be removed from the record. Finally, the result of the motion was a fair result. The trial judge ordered recovery for the plaintiff based on the unanswered Request to Admit only on what he called “hard” expenses, namely, those expenses corroborated by appropriate documentation.
(2) No. Under D.W. v. White, ineffective assistance of counsel claims in civil cases are unusual and only available in the “rarest of cases.” The appellant did not meet this high burden. Mr. Cadieux represented his clients faithfully and in accordance with their instructions. He also stayed and represented them on the motion for judgment before he was removed from the record. The problem in the run-up to the trial date was not created by Mr. Cadieux’s efforts. Rather, the problem was the appellant’s unwillingness to communicate with his counsel at a crucial time, coupled with an apparent late-breaking falling out between the appellant and Mr. McLean.
Hudson’s Bay Company v. OMERS Realty Corporation, 2016 ONCA 113
[Gillese, MacFarland and van Rensburg JJ.A.]
Sheila Block and Molly Reynolds, for the appellants
Jonathan Lisus and James Renihan, for the respondents
The respondents leased space in three shopping malls: Yorkdale, Square One and Scarborough Town Centre, where they operated Hudson’s Bay stores as anchor tenants. The malls are owned and operated by the landlord appellants (the “Landlords”), represented by Oxford Properties Group (“Oxford”). The respondents sought to transfer the lease holdings to their joint venture with RioCan Real Estate Investment Trust (“RioCan”), including the leases at Yorkdale, Square One and Scarborough Town Centre (the “Leases”). The respondents sought consent from Oxford to assign and sublease the Leases, however, Oxford refused for fear of the degree of control that one of its competitors, RioCan, would have over Oxford’s properties.
The respondents then proposed a revised joint venture which would consist of two limited partnerships, the second being formed to hold the Leases. The Leases would be assigned to Hudson’s Bay Company (“HBC”) in its capacity as general partner of the second limited partnership, rather than the company jointly controlled by HBC and RioCan. Oxford refused to consent and the respondents brought an application under ss. 23(2) of the Commercial Tenancies Act for a declaration that the Landlords’ consents were not required for assignment and sublease of the Leases, or, alternatively, that the Landlords were unreasonably withholding their consent.
The application judge found in favour of the respondents. She noted that the Leases contained provisions that restrict their transfer or assignment. However, each of the Leases also contained an exception for an assignment to an affiliate of the existing tenant (the “affiliate exception”). As the Leases were to be assigned to HBC as general partner of the second partnership, the assignments fell within the affiliate exception. She found that no consent was necessary.
However, had consent been required, she found that the Landlords were entitled to withhold consent under the Square One lease, but not with the Yorkdale and Scarborough Town Centre leases. The distinction was that the Square One lease had a provision that consent to assignment may be arbitrarily withheld. With the other two leases, the applicants had met the burden of proving that the Landlords were acting unreasonably in withholding consent. Given that HBC would continue to operate the stores and be liable under the Leases, there was no reason to believe HBC’s interests would diverge from Oxford’s interests going forward.
Did the application judge err in:
(1) holding that the assignment “to a limited partnership through its general partner” is an assignment to an affiliated company or corporation and therefore exempt from the consent requirement;
(2) finding, in the alternative, that the Yorkdale and Scarborough Town Centre leases require the Landlords to exercise their consent rights reasonably; and
(3) ignoring uncontested evidence and applying the wrong legal test to the evidence regarding the Landlords’ reasons for withholding consent.
Holding: Appeal dismissed.
(1) No. The application judge correctly found that the affiliate exception applied and consent was not required. HBC did not hold bare title, nor was it a mere nominee for the true beneficial owner as Oxford suggested. Further, the application judge did not hold that an assignment to a limited partnership through its general partner fell within the affiliate exception. Rather, she concluded that the proposed assignments of the Leases would be to the general partner and not to the limited partnership. As such, Oxford’s characterization of the “beneficial” or “effective” ownership of the Leases should not direct the analysis.
The court adopted the application judge’s reasoning and held that she correctly concluded that, based on the unique legal nature of the limited partnership structure and the role played by the general partner, the Leases would be assigned to HBC, as general partner. This is because a limited partnership is not a legal entity, so title to any real property must be held through its general partner; therefore, a lease can only be assigned to the general partner, not to a limited partnership. Further, the general partner retains control over the property and is solely responsible for the operations of the limited partnership. To take part in the control or management of the business would jeapordize the limited partner’s status as limited partner. Lastly, the general partner is solely liable for all payments under the contract and performance of all obligations. In the present case, the court found there would be no relationship between the Landlords and the limited partner. The legal relationship would continue to be between the Landlords and HBC. HBC would be liable for rents and amounts owing under the Leases, as well as compliance with all obligations and covenants under the Leases.
Based on its conclusion on the first issue, the court found it unnecessary to address the second and third grounds of appeal.
Shoukralla v. Shoukralla, 2016 ONCA 128
[Weiler, LaForme and Huscroft JJ.A.]
Victor Opara, for the appellants, Margelyn Delfin Dumolong, Luzviminda Jardenil Bautista and Gina Tumulak Aung
Michael Shoukralla, in person
G. William McKechnie Q.C., for the respondent, Carmen Shoukralla
Carmen Shoukralla (the “Wife”) commenced an application against her husband Michael Shoukralla (the “Husband”) seeking, among other things, an order that a property located in Toronto (the “Property”) be sold and the proceeds be made available to satisfy her equalization entitlement and child support arrears and to secure child support. A January 2011 court order prohibited the Husband from selling, encumbering or registering mortgages on any properties without a further court order.
At a subsequent trial concerning the family law issues, the evidence revealed that the Husband sold the Property. The Wife secured an adjournment of the trial to move to add the appellant purchasers. While the appellants did not attend or file any material for the motion, the judge was satisfied that service requirements were met and granted the motion, among other relief.
At the conclusion of the trial, the Wife brought a motion for summary judgment seeking an order to set aside the Husband’s transfer of the Property. The Wife did not serve the appellants, but counsel for the appellants attended the motion and submitted without evidence that they were never served with any prior documents and were unaware of the action between the Wife and Husband. The motion judge rejected these submissions and found that the appellants had been served with previous documents and orders, but accepted that the appellants had not been served with the summary judgment motion materials.
The motion for summary judgment was adjourned and later heard. The trial judge released separate reasons for the trial judgment and the summary judgment motion. The Wife was successful in both, with a finding that the transfer of the Property was a fraudulent conveyance.
The appellants appealed the order adding them as parties on the application and the order granting summary judgment.
Should the appeals of the two orders be allowed?
Holding: Appeal Dismissed
No. Initially, the appellants argued that their right to procedural fairness was violated because the order to add them as parties was made without notice and was therefore subject to a de novo review. They also argued that they were never properly served with the notice of motion, and thus the judge should have held a de novo review on whether service was effective.
The Court reasoned that because the order was interlocutory, any appeal would have to be to the Divisional Court with leave pursuant to s. 19(1)(b) of the Courts of Justice Act. Thus, the appeal from the order adding them as parties was not properly before the court.
The appellants’ second argument was that the judge violated their right to procedural fairness by failing to provide them with the opportunity to adequately prepare and respond to the motion. The Court rejected this argument, reasoning that the appellants’ counsel refused to accept service on behalf of his clients on a scheduled return date. They were thus given three weeks to respond to the motion and there was no evidence that they requested additional time or an adjournment. Thus, the appellants failed to demonstrate any error.
The appellants also submitted that the motion judge improperly relied on evidence from the trial in adjudicating on the summary judgment motion. The Court also rejected this submission, and instead found that the motion judge’s findings were well-supported by the motion record. While there was some reference to the trial evidence, it was not essential to the decision and did not constitute a palpable and overriding error.
Finally, the Court rejected the submission that the motion judge erred in finding that there was a fraudulent conveyance. Reviewing the case law and the evidence, the judge found that there were “ten badges of fraud” surrounding the transfer, each of which was supported by the Wife’s evidence. Furthermore, the appellants did not rebut the presumption of fraud. The court also rejected the appellants’ tendering of fresh evidence, as the test to admit such evidence had not been met.
Wainfleet (Township) v. Vrbicek, 2016 ONCA 123
[Doherty, Epstein and Miller JJ.A.]
Ivan Vrbicek, appearing in person
Sarah J. Draper, for the respondent
The appellant claimed the respondent agreed to sell the parcel of land that included Parts 7, 10 and 12 of Lot 17 to the appellant. The respondent argued the lots were not included.
The trial judge accepted the respondent’s argument that those parts were excluded in the sale. The trial judge found that the appellant failed to prove any damages flowing from the failure to convey what the appellant believed was “worthless” land.
(1) Did the trial judge err in dismissing the claim?
(2) Did the trial judge err in ordering costs?
Holding: Appeal dismissed. Costs on a partial indemnity basis fixed at $8,000 in favour of the respondent.
(1) No. There is no reason to interfere with the trial judge’s decision. The trial judge thoroughly reviewed the evidence put forth at trial.
(2) No. The trial judge has the discretion to assess costs. She outlined the factors relevant to her assessment and they were properly considered. The appellant did not formally ask for leave to appeal costs, but the issue was nonetheless addressed.
Georgina (Town) v. Blanchard, 2016 ONCA 122
[Hoy A.C.J.O., Pardu and Roberts JJ.A.]
Lawrence Hansen, for the appellants, Marvin Blanchard, 1124123 Ontario Limited and Baldwin 33, Inc.
John R. Hart, for the respondent, The Corporation of the Town of Georgina
In the course of considering whether to grant the appellants a site alteration permit for a property in Georgina, the respondent, The Corporation of the Town of Georgina, relied on s. 239(2)(f) of the Municipal Act, 2001 (the “Act”) to hold two in camera meetings. That section permits a municipality to depart from the normal requirement that all meetings be held in public if the subject matter is subject to solicitor-client privilege. An investigator appointed by the municipality under s. 239.2(3) of the Act, whoconcluded that the subject matter considered at the in camera meetings indeed fell within the exception in s. 239(2)(f). The application judge dismissed the appellants’ application to set aside the investigator’s report.
(1) Did the application judge err in concluding that s. 223.16 of the Act applied to the investigator?
(2) Did the application judge err in concluding that the investigator’s reference to a site alteration agreement (as opposed to an application) in her report was a mis-description and likely a typographical error?
(3) Should the investigator’s report be set aside because the municipality did not prove compliance with its duties under the Act in appointing the investigator?
Holding: Appeal dismissed.
(1) No. Under s. 239.1 of the Act, a person may request that an investigation of whether a municipality was permitted to close all or part of a meeting to the public be undertaken: “(a) by an investigator referred to in subsection 239.2 (1); or (b) by the Ombudsman appointed under the Ombudsman Act, if the municipality has not appointed an investigator referred to in subsection 239.2 (1).” Section 223.16 provides as follows: “No proceeding of the Ombudsman under this part shall be held bad for want of form, and, except on the ground of lack of jurisdiction, no proceeding or decision of the Ombudsman is liable to be challenged, reviewed, quashed or called in question in any court.” The appellants’ submission that the lack of jurisdiction limitation only applied to investigations in respect of closed meetings conducted by the Ombudsman was rejected. Section 239.2(9) of the Act provides that s. 223.16 (among others) applies “with necessary modifications with respect to the exercise of functions described in this section.” “This section” is s. 239.2 and the functions described in s. 239.2 include the functions of an investigator. The investigator was appointed pursuant to s. 239.2 and exercised the function described in that section. Section 223.16 therefore applied. Given the conclusion on this issue, there was no need to address the appellants’ arguments seeking to challenge the exercise by the investigator of her function under s. 239.2 other than on the ground of lack of jurisdiction.
(2) No. It was clear from the investigator’s report as a whole that the investigator understood that the matter before the respondent was a site alteration application, and not a site alteration agreement. The appellants failed to establish lack of jurisdiction.
(3) No. Section 239.2(3) requires that, in appointing an investigator, “the municipality shall have regard to, among other matters, the importance of the matters listed in [s. 239.2(5)]”. Those matters are: “(a) the investigator’s independence and impartiality; (b) confidentiality with respect to the investigator’s activities; and (c) the credibility of the investigator’s investigative process.” The appellants provided no authority for their argument that a municipality is required to prove compliance with s. 239.2(3), and the court saw no basis to impose such an onus on a municipality. Moreover, there was no reason to doubt that the respondent complied with s. 239.2(3). The process in this case was transparent, and the investigation was conducted by a lawyer.
The Guarantee Company of North America v. Ciro Excavating & Grading Ltd., 2016 ONCA 125
[Hoy A.C.J.O., Pardu and Roberts JJ.A]
Daniel Chitiz and Alastair McNish, for the appellant
Richard Yehia, for the respondent
The appellant appeals the motion judge’s order granting summary judgment to the respondent in the amount of $1,170,312.47 payable under an indemnity agreement and dismissing the appellant’s cross- motion for summary judgment dismissing the respondent’s action against her. The appeal is founded largely on the refusal of Cosimo Leopizzi, who swore an affidavit attesting to the appellant’s execution of the indemnity agreement, to answer numerous questions when cross-examined. Mr. Leopizzi asserted that the questions exceeded the permissible limits of that examination.
The motion judge concluded that the appellant could not rely on the defence of non est factum, which is available to someone who, as a result of misrepresentation, has signed a document mistaken as to its nature and who has not been careless in doing so. The motion judge found that she had not shown that Mr. Leopizzi had misrepresented the indemnity agreement, nor had she ever taken steps to inform herself about what she was signing. He concluded that she was careless to the point of indifference and could not avoid being bound by the indemnity agreement.
The motion judge granted the respondent summary judgment in the amount of $1,170,312.47 payable under the indemnity agreement (the appellant did not dispute that the respondent had paid this amount) and dismissed the appellant’s cross-motion for summary judgment.
The appellant submits that the motion judge erred:
(1) in finding that the appellant did not attempt to bring a refusals motion;
(2) in refusing to draw an adverse inference as to Mr. Leopizzi’s credibility as a result of these refusals;
(3) in failing to direct a hearing with oral evidence if he were not prepared to draw an adverse inference as to Mr. Leopizzi’s credibility as a result of the refusals; and
(4) in concluding that the appellant’s defence of non est factum could not succeed.
Holding: Appeal Dismissed.
(1) The court was not persuaded that the motion judge’s statement that, if the refusals were so important, the appellant should have brought a refusals motion, but did not do so, amounts to a palpable and overriding error. There was also no evidence to support the appellant’s allegation that she did not sign the indemnity agreement.
(2) The court agreed that in light of all the evidence before him, the motion judge came to a reasonable conclusion. The motion judge analyzed Mr. Leopizzi’s refusals and noted that “there were no refusals when he was asked specific questions about [the appellant] signing the [indemnity] agreement and his presence as a witness.”
(3) The court said that a party to a motion for summary judgment cannot say oral evidence is not necessary if it is successful, but is required if there is a chance that it will not be successful. In the case at bar, there is no indication that the appellant stated unequivocally that oral evidence was required on the hearing of the motion.
(4) The court held that the motion judge accurately recited the test for non est factum set out in Marvco Color Research Ltd. v. Harris: “the defence of non est factum is available to someone who, as a result of misrepresentation, has signed a document mistaken as to its nature and character and who has not been careless in doing so.” There was no evidence of any misrepresentation.
[Hoy A.C.J.O., Pardu and Roberts JJ.A.]
Maurizio P. Artale, for the appellant
Amandeep Sidhu, for the respondent
Keywords: Endorsement, Default Judgment, Setting Aside, Air of Reality Test, Appeal Dismissed
[Hoy A.C.J.O., Pardu and Roberts JJ.A.]
Jens Peter Elmgreen, appearing via teleconference
Richard W. Greene, for J. William Evans
James R. Webster, for Constance Marie Georgette Larouche Elmgreen
Keywords: Endorsement, Motion, Family Law, Spousal Support, Perfecting Appeal, Adjournment
[Simmons, Pepall and van Rensburg JJ.A.]
Douglas Christie, for the appellants
Jordan D. Sobel for the respondents William Benazzi and WB Capital Management Inc.
Tim Gleason and Chris Donovan, for the respondents Derek Sorrenti and Sorrenti Law Professional Corporation
Keywords: Appeal Book Endorsement, Interlocutory Order, Jurisdiction, Appeal Dismissed
[Gillese, Watt and Tulloch JJ.A.]
Jill Presser and Jeff Marshman, for the appellant
Michael Fawcett, for the Crown
Janice Blackburn, for the Person in Charge of Waypoint Centre for Mental Health Care
Keywords: Ontario Review Board, Treatment Impasse, Hearsay, Appeal Dismissed
[Watt, Lauwers and Hourigan JJ.A.]
R. Michael Rodé, for the appellant Coleby Benjamin
Hannah Freeman, for the respondent, Attorney General
Janice Blackburn, for the respondent, person in charge, Waypoint Centre for Mental Health Care
Keywords: Ontario Review Board, Disposition, Appeal Dismissed
[Watt, Lauwers and Hourigan JJ.A.]
Suzan E. Fraser and Sarah Harland-Logan, for the appellant
Dena Bonnet, for the respondent, Attorney General
[Watt, Lauwers and Hourigan JJ.A.]
Michael Davies and Meaghan McMahon, for the appellant
Brian G. Puddington and Zoe Oxaal, for the respondent
Keywords: Criminal Law, Arrest, Reasonable and Probable Grounds, Leave to Appeal Probation Order
[Gillese, Watt and Pardu JJ.A.]
John McInnes, for the appellant
Jesse Razaqpur, for the respondent Jaswinder Singh
Robert Lepore, for the respondent Asogian Gunalingam
Andrea Danon and J. Stanley Jenkins, for the intervener Legal Aid Ontario
Louis P. Strezos, for the intervener Criminal Lawyers Association
Keywords: Criminal Law, Disclosure, Mistrial, Costs, Appeal Allowed
[Gillese, Watt and Tulloch JJ.A.]
Paul Lewin, for the appellants
John Patton, for the respondent
Keywords: Criminal Law, Forgery, Certiorari, Discharge, Preliminary Inquiry
[Gillese, Watt and Tulloch JJ.A.]
Howard Piafsky, for the appellant
Mark Evans and Jeffrey Root, for the respondent
Keywords: Criminal Law, Drug Trafficking, Range of Sentence, Departure, Appeal Allowed
[Feldman, Cronk and Roberts JJ.A.]
Constance Baran-Gerez, for the appellant
Andreea Baiasu, for the respondent
Keywords: Criminal Law, Sexual Assault, Sentencing, Appeal Dismissed
[Hoy A.C.J.O., Laskin and Roberts JJ.A.]
Charles Granek, for the appellant
Ian Bell, for the respondent
Keywords: Criminal Law, Importing Cocaine, Sentencing, Appeal Dismissed
[MacPherson, Tulloch and Benotto JJ.A.]
Daryl Argent, in person
Michael Dineen, duty counsel
Joanne Stuart, for the respondent
Keywords: Criminal Law, Luring a Child into Sexual Activity, Entrapment, 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.