COURT OF APPEAL SUMMARIES (NOVEMBER 28-DECEMBER 2, 2016)

Hello,

Below are the summaries for this week’s civil decisions of the Court of Appeal. Perhaps the most interesting decision was Shewchuk v. Blackmont Capital Inc. in which the court discussed the admissibility of subsequent conduct of the parties for the purposes of determining the intent of the parties in a contract interpretation case. The court explained that subsequent conduct is not part of the factual matrix (which only includes the surrounding circumstances up to and including the signing of the agreement). It went on to caution that subsequent conduct evidence is dangerous for a number of reasons, and should only be used when there is an ambiguity in the contract and the factual matrix itself is not enough to resolve the ambiguity. Subsequent conduct can also be used to assess credibility.

There was also an interesting class action decision, Bancroft-Snell v Visa Canada Corporation, in which the court upheld the motion judge’s decision to declare unenforceable as against the settlement funds or costs award, a fee splitting agreement between primary class counsel having carriage of the matter and competing class counsel who had agreed not to engage in a carriage fight in exchange for entering into the fee splitting arrangement. The court held that such side deals should be paid for out of class counsel’s pocket as a cost of doing business.

Other topics covered included appeal routes in bankruptcy and corporate oppression matters, family law (striking pleading for failure to comply with disclosure orders and interpreting cohabitation agreements), will and estates (rectification of a will and property claims of common law spouse as against deceased spouse’s estate), motions to strike pleadings for no cause of action (piercing corporate veil), medmal, property insurance, and wrongful dismissal.

Thank you to all the attendees and panelists at yesterday’s CLE that I chaired at the OBA entitled “Top Appeals of 2015-6 from the Ontario Court of Appeal” for making it an interesting and enjoyable program.

As always, we welcome your comments and feedback. Please feel free to share this blog with anyone whom you think may be interested.

Have a nice weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416.593.2953

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

Table of Contents

Civil Decisions (click on case name to read summary)

Bancroft-Snell v Visa Canada Corporation, 2016 ONCA 896 

Keywords: Class Actions, Class Proceedings Act, 1992, Solicitor and Client, Fees, Approval by Court, Carriage Disputes, Fee Splitting 

Barber v Humber River Regional Hospital2016 ONCA 897 

Keywords: Medical Malpractice, Emergency Room Negligence, Sanderson Order

Shewchuk v Blackmont Capital Inc, 2016 ONCA 912

Keywords: Contracts, Interpretation, Ambiguity, Subsequent Conduct, Standard of Review, Reasonableness, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, Bell Canada v. The Plan Group, 2009 ONCA 548, 96 O.R. (3d) 81, Hobbs v. Esquimalt & Nanaimo Railway Co. (1899), 29 S.C.R. 450

Re IceGen Inc, 2016 ONCA 902

Keywords: Endorsement, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, s. 193, Appeals, Leave to Appeal, 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225

Re IceGen Inc2016 ONCA 907 

Keywords: Bankruptcy and Insolvency, Appeals, Leave to Appeal,  Bankruptcy and Insolvency Act, s. 193(e)

McLaughlin v McLaughlin2016 ONCA 899

Keywords: Endorsement, Estates Law, Wills, Rectification

1186708 Ontario Inc v Gerstein, 2016 ONCA 905

Keywords: Endorsement, Corporations, Derivative Actions, Civil Procedure, Appeals, Jurisdiction, Ontario Business Corporations Act, ss. 246, 255

Gadbois v Newcom Business Media Inc., 2016 ONCA 891

Keywords:  Endorsement, Employment Law, Wrongful Dismissal, Damages, Payment in Lieu of Notice

Hojjatian v Intact Insurance Company, 2016 ONCA 904

Keywords: Endorsement, Insurance Law, Property Policy, Coverage, Water Damage, Summary Judgment

Mitchell v Lewis2016 ONCA 903

Keywords: Civil Procedure, Motions to Strike, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21, Breach of Contract, Breach of Trust, Unjust Enrichment, Conspiracy, Conversion, Fraudulent Misrepresentation, Fraud, Piercing Corporate Veil

Harstein v Ricottone2016 ONCA 913 

Keywords: Endorsement, Property, Ownership, Wills and Estates, Trusts, Statute of Frauds, Family Law, Cohabitation Agreements, Interpretation

Rana v Unifund Assurance Co2016 ONCA 906

Keywords: Endorsement, Civil Procedure, Appeals, Motions to Quash, Courts of Justice Act, s 19(1)(b), Jurisdiction

Manchanda v Thethi, 2016 ONCA 909

Keywords: Endorsement, Family Law, Motions to Strike, Failure to Comply with Orders, Disclosure, Family Law Rules, r. 1(8), Kovachis v. Kovachis, Roberts v. Roberts

Jackson v Solar Income Fund Inc2016 ONCA 908

Keywords: Endorsement, Civil Procedure, Applications, Rules of Civil Procedure, Rule 14.05(3)(h), Contracts, Interpretation, Factual Matrix

Short Endorsements (click here for decisions)

Criminal Law Decisions (click here for decisions)

Ontario Review Board (click here for decisions)

Civil Decisions:

Bancroft-Snell v Visa Canada Corporation, 2016 ONCA 896 

[Cronk, Blair and Pardu JJ.A.]

Counsel:

R. Mogerman and J. D. Winstanley, for the appellants

No one appearing for the respondent, Visa Canada Corporation

J. Musgrove, for the respondent, MasterCard International Incorporated

M. Eizenga, for the respondent Bank of America Corporation

M. Jamal and D. Rankin, for the respondent Bank of Montreal

M. Kremer, for the respondent, Bank of Nova Scotia

K. Kay, for the respondent, Canadian Imperial Bank of Commerce

D. G. Cohen, for the respondent, Capital One Financial Corporation

No one appearing for the respondent, Citigroup Inc.

V. de l’Étoile, for the respondent, Fédération Des Caisses Desjardins du Québec

No one appearing for the respondent, National Bank of Canada Inc.

P. J. Martin, for the respondent, Royal Bank of Canada

C. Lonsdale, for the respondent, Toronto Dominion Bank

A. Tibbs and V. Vuia, for the intervenor, Merchant Law Group LLP

B. van Niejenhuis and C. Di Carlo, appearing as amicus curiae

Keywords: Class Actions, Class Proceedings Act, 1992, Solicitor and Client, Fees, Approval by Court, Carriage Disputes, Fee Splitting

Facts:

At the heart of this appeal is a Fee Sharing Agreement entered into between Class Counsel and the Merchant Law Group in settlement of a carriage dispute involving competing multi-jurisdictional class proceedings launched across Canada. The Fee Sharing Agreement provided that the Merchant Law Group was to receive up to an $800,000 share of the fees recovered by Class Counsel from the proceedings, essentially in exchange for agreeing to stay its rival proceedings in two provinces.

The motions judge took a negative view of this arrangement when asked to approve Class Counsel’s fees in conjunction with a subsequent motion to approve a partial settlement of the actions in all jurisdictions. He reduced the requested fees of approximately $3.4 million by 10% to reflect his refusal to approve of the Fee Sharing Agreement. In addition, he declared it unenforceable and ordered that Class Counsel not pay the Merchant Law Group “any sums from the settlement proceeds or from any other source now or in the future … on account of the Fee Sharing Agreement.”

Issue:

Was the motions judge entitled to take into account and otherwise deal with the Fee Sharing Agreement in the course of determining the quantum of fees that it was fair and reasonable for the class members to pay and Class Counsel to receive as a result of the settlements?

Holding:

Appeal dismissed, but order below varied.

Reasoning:

Yes. First, the court does have authority pursuant to s. 32 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the “CPA”) to review the Fee Sharing Agreement and its effect, and to grant relief accordingly. Alternatively, it has the authority to do so pursuant to s. 12 of the CPA.

Secondly, whether or not to give effect to the Fee Sharing Agreement in the context of the fee approval process, and in conjunction with the settlement approval process, and if so, on what terms, is a matter of discretion. The motion judge is entitled to considerable deference in the exercise of that discretion.

In the circumstances here, the motion judge did not err in exercising his discretion to reduce Class Counsel’s fees and order that no payments be made to the Merchant Law Group out of the fees approved or the settlement funds..

The motion judge made the 10% reduction not on the basis of the $400,000 plus disbursements and taxes that had been earmarked for the Merchant Law Group but to reflect his view of legal services that were not earned. The 10% reduction was his call and well within the purview of his discretion.

If competing class counsel wish to engage in a competitive carriage dispute for the right to carry the class action and in the process make a side agreement respecting fees as a way to persuade one or the other to back away, they should pay the fees out of their own pockets as part of their variable costs of doing business and not expect that the counsel walking away will have direct access to payment out of the contingency fee. To hold otherwise would be to defeat the purpose of attempting to discourage these types of competing actions that provide little or no benefit to the members of the class. The motion judge therefore went too far by prohibiting class counsel to pay the amount owing under the fee splitting arrangement from “any other source”, so the order was amended accordingly.

Barber v Humber River Regional Hospital2016 ONCA 897 

[Cronk, Juriansz and Roberts JJ.A.]

E. J. Baron, S. Rogers, and J. Katz, for the appellant

A. Mladenovic, D. R. Neill and E. J. Roche, for the respondents

Keywords: Medical Malpractice, Emergency Room Negligence, Sanderson Order

Facts:

Mark Barber died on February 17, 2006 at Humber River Regional Hospital in Toronto from pneumococcal bacterial meningitis, at age 46. The respondents, his surviving wife and two daughters, sued the emergency room physicians Drs. Joshi and Shergold, alleging that Barber’s death resulted from their failure to properly investigate, diagnose and treat his meningitis. The trial judge found that Dr. Joshi fell below the applicable standard of care in three respects. He failed to adequately consider the possibility that Barber had meningitis at 10 am on February 13, 3006 when he first examined him. He did not do a spinal tap or lumbar puncture to rule out the possibility of meningitis. Finally, Dr. Joshi failed again to suspect and diagnose meningitis and treat it properly at 12:30 on February 13 when he assessed the patient for a second time.

Barber was discharged from the hospital at 2:40 pm. At 8:15 pm staff in the detention center where Barber was being held were informed that blood cultures taken earlier in the day from the hospital had tested positive for bacteria, most likely streptococcus bacteria, and as a result Barber was to be returned to the hospital immediately.

He arrived at the hospital at 11:43 pm where he was assessed by an ER triage nurse. She recorded Barber as alert, orientated and cooperative, with regular and effortless breathing and normal skin color.

At 10 am on February 14, Barber was diagnosed with meningitis. His condition did not improve and he suffered two cardiac arrests in the late evening of the February 14. He was resuscitated and intubated but remained comatose and gravely ill. He passed away at 5:51 pm on February 17, 2006 after being taken off life support. His post-mortem examination revealed his cause of death as bacterial meningitis.

Dr. Joshi testified that he considered three possible explanations for Barber’s condition: i) an infective process, like pneumonia, ii) fever, iii) dehydration. He acknowledged that he did not consider the possibility of meningitis, did not include it in his provisional diagnosis, and did not order a lumbar puncture to rule it out.

An expert in infectious disease, Dr. Fong, testified that by the 10 am assessment, Mr. Barber likely already had bacterial meningitis. Upon his arrival at the hospital, Barber had a documented history of fever, a decreased level of consciousness, an ashen appearance, had not been oriented to person, place and time, was sweating profusely and was uncommunicative. Given these symptoms it was Dr. Fong’s opinion that Barber was exhibiting signs of brain dysfunction, mandating a full examination of his head and neck, and assessment of his level of consciousness, and, unless contraindicated, the performance of a lumbar puncture to rule out the possibility of meningitis.

The trial judge found that had Dr. Joshi properly diagnosed and treated the meningitis, Barber would not have died or suffered serious neurological sequelae. The action was dismissed against Dr, Shergold.

Dr. Joshi appeals from the liability finding against him, arguing that the trial judge erred in her standard of care and causation analyses. He also seeks leave to appeal the trial judge’s costs ruling that required him to pay the costs found to be owing to Dr. Shergold.

Issues:

1) Did the trial judge err in finding that by the 10 am assessment, Barber had confusion caused by bacterial meningitis?

2) Did the trial judge err by relying exclusively on Dr. Fong’s opinion evidence to find that the appellant breached the applicable standard of care?

3) Did the trial judge err by failing to assess causation with the benefit hindsight?

4) Should the Sanderson Order against Dr. Joshi be set aside?

Holding:

Appeal dismissed.

Reasoning:

1) No. The factual finding that Barber was suffering from confusion caused by bacterial meningitis was open to the trial judge on the record before her and was firmly grounded in the evidence. By the time of the 10 am assessment, Barber’s medical records contained numerous entries consistent with the patient experiencing a decreased level of consciousness.

2) No. Dr. Joshi asserted that the trial judge erred in relying exclusively on Dr. Fong’s testimony. The trial judge relied heavily on Dr. Fong’s evidence in finding that Dr. Joshi breached the standard of care but this is not the only evidence on which she relied. She also relied on factual findings gleaned from the evidence. Dr. Fong was qualified as an expert because he taught medical students and therefore was familiar with the minimum standard of care required of emergency room physicians. He testified that knowing how patients present with meningitis is at the core of what medical students know when they are finished their training.

Dr. Fong was clear in his evidence that where there is a history of a decreased level of consciousness coupled with fever, a lumbar puncture should be performed to rule out possible meningitis. Two other experts gave evidence of similar effect.

3) No. The trial judge’s reasons confirm that she appreciated the two competing causation theories advanced at trial. The trial judge’s causation analysis was thoughtful and thorough. Faced with conflicting expert evidence on the determination of Mr. Barber’s probable outcome had he received the Standard Treatment for meningitis, she declined to adopt the defence “actual outcome” theory of causation, instead relying on the medical studies and statistical outcomes evidence proferred by the experts.

4) No. The trial judge ordered Dr. Joshi to pay $43,000 to Dr. Shergold on account of his successful defence of the action. The jurisdiction of the Court of Appeal to interfere with a trial judge’s costs award is very limited. The trial judge’s application of the test for granting a Sanderson Order was neither plainly wrong nor infected by reviewable error. She held that it would be unfair to require the respondents, who are of limited means, to pay Dr. Shergold’s costs when it was reasonable for them to join him in the action. This finding was unimpeachable.

Shewchuk v Blackmont Capital Inc., 2016 ONCA 912

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

Counsel:

J. Groia and K. Richard, for the appellant

N. Campbell and D. McLeod, for the respondent

Keywords: Contracts, Interpretation, Ambiguity, Subsequent Conduct, Standard of Review, Reasonableness, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, Bell Canada v. The Plan Group, 2009 ONCA 548, 96 O.R. (3d) 81, Hobbs v. Esquimalt & Nanaimo Railway Co. (1899), 29 S.C.R. 450

Facts:

The appellant, a successful stockbroker, was employed by the respondent as an investment advisor (“IA”) in its Calgary office. He was a member of the respondent’s Retail Group brokers, whose clients were primarily individual investors. The respondent also had a Capital Markets group, based in Toronto, which procured financing for banks, public companies, and other institutional clients.

Each IA, like the appellant, had a Compensation Plan, which set out their commission scale. As a top-producing IA, the appellant was compensated at the highest level: 52 percent of the fees the respondent earned from a retail transaction.

The IA Compensation Plan identified several “Special Payout Items,” including “Capital Markets Referrals.” If an IA referred business to the Capital Markets group, he or she could earn a referral fee of “up to 15% of the net revenue” generated by the transaction. The amount of the fee was discretionary and was determined by executives of the Retail Group and Capital Markets, depending on the “value added” of the IA’s relationship with the client, having regard to any pre-existing relationship between the respondent and the client.

The appellant and other IAs were dissatisfied with their compensation for transactions they referred to Capital Markets. The appellant, who was particularly vocal, initiated discussions for a new contract for himself, making it clear that he would leave the company if his concerns were not resolved to his satisfaction. His negotiations with the Calgary branch manager of the Retail Group culminated in the execution of a letter agreement dated April 11, 2006 (the “April 11 Agreement”).

The April 11 Agreement was, in essence, an amendment to the IA Compensation Plan. It had two financial components. First, it granted the appellant 100,000 deferred stock units in the respondent’s parent corporation, each of which entitled him to acquire one share. This was in addition to the stock units to which he was entitled as an IA upon meeting his investment targets in a given year. Second, it provided for compensation in addition to what he received under the IA Compensation Plan.

The April 11 Agreement was expressed to be in full and final satisfaction of all compensation-related disputes between the appellant and the respondent. The April 11 Agreement was expressed to be confidential and would be terminated if the appellant breached confidentiality, in which case his compensation would revert to the standard IA Compensation Plan. The appellant acknowledged that the confidentiality provision meant that he could not disclose the existence of the April 11 Agreement to Capital Markets personnel.

The appellant asserted, among other things, that he was entitled to a 52 percent commission under the IA Compensation Plan, as well as a further 10 percent commission under the April 11 Agreement, on four Capital Markets transactions in which the respondent was a member of the underwriting syndicate or a participant in the financing. He claimed to have directly sourced these transactions for the respondent through his connections with the clients.

The central issue at trial was whether the April 11 Agreement applied to Capital Markets transactions, as the appellant asserts. The trial judge found that the parties’ contract was ambiguous. He considered the factual circumstances surrounding the contract to interpret it and resolved the ambiguity in the April 11 Agreement in favour of the respondent.

Issues:

1) Should the trial judge’s interpretation of the April 11 Agreement be reviewable on a correctness standard?

2) Was the contract ambiguous?

3) Did the trial judge commit a legal error by placing undue weight on the parties’ conduct subsequent to the April 11 Agreement? In answering this question, the court discussed the following issues:

a. When is evidence of the subsequent conduct of the parties admissible to interpret their contract?

b. How should courts assess the weight or cogency of that evidence?

c. Did the trial judge make appropriate use of the evidence of subsequent conduct?

Held: Appeal dismissed.

Reasoning:

1) The Supreme Court made clear in Sattva, at para. 55, that a question of contractual interpretation is “inherently fact specific” and that, usually, appellate courts should show deference to first-instance fact finders. The appellant’s reliance on this court’s decision in Bell Canada v. The Plan Group, 2009 ONCA 548, 96 O.R. (3d) 81 is misplaced. In that case, the majority described the exercise of contract interpretation as “a legal exercise” (at paras. 25, 30). This approach has been expressly overtaken by Sattva.

2) Leaving aside the fact that the approach to contractual interpretation in Hobbs v. Esquimalt & Nanaimo Railway Co. (1899), 29 S.C.R. 450 has been overtaken by a century of jurisprudence, culminating in Sattva, the appellant concedes that the trial judge was required to consider the IA Compensation Plan in interpreting the April 11 Agreement, which expressly referred to the plan and confirmed its ongoing application. The trial judge found that the foregoing gave rise to an ambiguity, which he was required to resolve through the application of the rules of contract interpretation, having regard to the factual matrix surrounding the April 11 Agreement.

3) The trial judge did not err in giving undue weight to evidence of the appellant’s subsequent conduct. His considered the evidence to be relevant to the parties intentions at the time of executing the April 11 Agreement.

a. In Sattva, the Supreme Court held that evidence of the “factual matrix” or “surrounding circumstances” of a contract is admissible to interpret the contract and ought to be considered at the outset of the interpretive exercise. Subsequent conduct must be distinguished from the factual matrix. In Sattva, the Supreme Court stated at para. 58 that the factual matrix “consist[s] only of objective evidence of the background facts at the time of the execution of the contract, that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting” (citation omitted and emphasis added). Thus, the scope of the factual matrix is temporally limited to evidence of facts known to the contracting parties contemporaneously with the execution of the contract. It follows that subsequent conduct, or evidence of the behaviour of the parties after the execution of the contract, is not part of the factual matrix.

There are some dangers associated with reliance on evidence of subsequent conduct. One danger, recognized in England where such evidence is inadmissible, is that the parties’ behaviour in performing their contract may change over time. Using their subsequent conduct as evidence of their intentions at the time of execution could permit the interpretation of the contract to fluctuate over time. Another danger is that evidence of subsequent conduct may itself be ambiguous. A third danger is that over-reliance on subsequent conduct may reward self-serving conduct whereby a party deliberately conducts itself in a way that would lend support to its preferred interpretation of the contract. These dangers, together with the circumscription of a contract’s factual matrix to facts known at the time of its execution, militate against admitting evidence of subsequent conduct at the outset of the interpretive exercise. Evidence of subsequent conduct should be admitted only if the contract remains ambiguous after considering its text and its factual matrix.

Despite its dangers, evidence of subsequent conduct can be useful in resolving ambiguities. It may help to show the meaning the parties gave to the words of their contract after its execution, and this may support an inference concerning their intentions at the time they made their agreement. Canadian courts have never adopted the absolute exclusionary rule prevailing in the United Kingdom. The lesson learned in Canada from the British position is that the parties’ subsequent conduct is relevant only to inferentially establishing their intentions at the time they executed their contract. Like evidence of post-offence conduct in criminal matters, it is a kind of circumstantial evidence that “invokes a retrospectant chain of reasoning”; the trier of fact is invited to infer the parties’ prior intentions from their later conduct.

b. In Canadian National Railways, Lambert J.A. suggested, at p. 262, that, once admitted, the weight or cogency of evidence of post-contractual conduct will depend on the circumstances. The inherent dangers of evidence of subsequent conduct mean that when it is admitted it must be used cautiously and its weight will vary from case to case. Evidence of the parties’ subsequent conduct is admissible to assist in contractual interpretation only if a court concludes, after considering the contract’s written text and its factual matrix, that the contract is ambiguous. The court may then make retrospectant use of the evidence, giving it appropriate weight having regard to the extent to which its inherent dangers are mitigated in the circumstances of the case at hand, to infer the parties’ intentions at the time of the contract’s execution.

c. The trial judge properly used the evidence of the parties’ subsequent conduct to resolve any residual ambiguity in the April 11 Agreement. There is one qualification which relates to the trial judge’s reference to subsequent conduct forming part of the factual matrix. Since the factual matrix only encompasses circumstances at the time the contract was made, subsequent conduct does not enter into that part of the analysis.

However, the trial judge did not consider the subsequent conduct as part of the factual matrix. He used it to test the appellant’s contention that the parties intended the April 11 Agreement to apply to Capital Markets transactions and to test the credibility of the appellant’s explanation of his subsequent conduct. He found that the appellant’s repeated attempts to negotiate a revenue sharing agreement with Capital Markets after April 11, 2006 were at odds with his contention that the relationship with Capital Markets had been resolved by the April 11 Agreement. He found the appellant’s conduct was consistent with the respondent’s interpretation of the contract and rejected as incredible the appellant’s attempts to explain his conduct.

IceGen Inc (Re), 2016 ONCA 902

[Gillese J.A.]

Counsel:

G. Benchetrit, for the moving party KSV Kofman Inc., in its capacity as Trustee in the Consolidated Bankruptcy of IceGen Inc. and 1807983 Ontario Limited

C.Francis, for the responding party Dr. Lionel Gerber

T. Reyes, for the responding party Rushlade Investments Limited

Keywords: Endorsement, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, s. 193, Appeals, Leave to Appeal, 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225

Facts:

The trustee in the consolidated bankruptcy Estate of IceGen Inc. and 1807983 Ontario Limited (the “Trustee”) moved for an order requiring Dr. Lionel Gerber to obtain leave to appeal the order of Penny J. (the “Penny Order”), pursuant to s. 193(e) of the Bankruptcy and Insolvency Act (“BIA”). Dr. Gerber opposed the motion on the basis that leave was not required pursuant to s. 193(c) of the BIA which provides that there is a right to appeal “if the property involved in the appeal exceeds in value ten thousand dollars.”

Issue:

Did the Penny Order fall within s. 193(c) of the BIA such that Dr. Gerber does not require leave to appeal it?

Holding:

Motion granted.

Reasoning:

No. The Court held that the decision in 2403177 Ontario Inc. v. Bending Lake Iron Group Limited (“Bending Lake”), 2016 ONCA 225 provided a full answer to Dr. Gerber’s objections to the motion. Dr. Gerber is required to obtain leave before he can appeal.

In Bending Lake, at para. 53, Justice Brown states that s. 193(c) does not apply to (i) orders that are procedural in nature, (ii) orders that do not bring into play the value of the debtor’s property, or (iii) orders that do not result in a loss. The Penny Order approved the auction process recommended by the Trustee. Dr. Gerber’s complaints related to the process leading to the Penny Order and to the auction process. Therefore, the Penny Order was procedural in nature.

In Bending Lake, Justice Brown found that the order that approved the sale of the debtor’s assets and vesting title in the purchaser marked the final step in the receiver’s monetization of the debtor’s assets and so did not bring into play the value of the debtor’s property. Similarly in the present case, the Penny Order contained the same wording as that considered by Justice Brown in Bending Lake. The Penny Order did not “put into play” the value of the debtor’s property. For the same reason, the Penny Order did not result in a gain or loss. It did not determine the entitlement of any party with an economic interest in the debtor to the sale proceeds.

Re IceGen Inc2016 ONCA 907 

[Gillese, Benotto and Roberts JJ.A.]

Counsel:

C. Francis and T. Dunn, for the moving party/appellant Dr. Lionel Gerber
A. Merskey, for the responding parties/respondents Rushlade Investments Limited and Anthony Heller
G. Benchetrit, for the responding party/respondent KSV Kofman Inc., in its capacity as Trustee in the Consolidated Bankruptcy of IceGen Inc. and 1807983 Ontario Limited

Keywords: Bankruptcy and Insolvency, Appeals, Leave to Appeal,  Bankruptcy and Insolvency Act, s. 193(e)

Facts:

IceGen went bankrupt, so its estate trustee sought offers for the assets and arranged an auction. The only bidders were Dr. Gerber and Rushlade Investments Ltd., a company run by Anthony Heller, the brother of Philip Heller. The auction process was not successful.

The trustee wished to conduct a second auction. Although court approval was not required for that auction, the trustee sought it nonetheless because the first auction had become so badly derailed. It brought a motion (the “Motion”) for court approval of the auction process that it recommended in the Second Report of the Trustee dated November 23, 2015 (the “Second Report”), and vesting title in the successful bidder.

At the hearing of the Motion on December 2, 2015, Dr. Gerber asked for an adjournment. The motion judge refused the adjournment. As a result, Dr. Gerber did not take part in the second auction and the assets of IceGen were sold to Rushlade.

Dr. Gerber brings two motions to the court: a motion for leave to appeal the Order; and a motion for the admission of fresh evidence.

Issue:

Should leave be granted to appeal the motion to the Ontario Court of Appeal?

Holding:

Motion dismissed.

Reasoning:

No. Leave to appeal the motion should not be granted. In deciding whether to grant leave under s. 193(e) of the Bankruptcy and Insolvency Act, the court will look to whether the appeal: (a) raises an issue that is of general importance to the practice in bankruptcy/insolvency matters or to the administration of justice as a whole; (b) is prima facie meritorious; and (c) would not unduly hinder the progress of the bankruptcy/insolvency proceedings. The proposed appeal did not satisfy any element for the test for leave.

McLaughlin v McLaughlin2016 ONCA 899

[Simmons, Pepall and Huscroft JJ.A.]

Counsel:

R. D. Allison, for the appellant

A. J. Rabinowitz and D. B. Stewart, for the intervenor

Judith Corrado, in person

Keywords: Endorsement, Estates Law, Wills, Rectification

Facts:

The testatrix executed a primary and a secondary will for which she had provided instructions to her long-time solicitor who had prepared several previous wills for her. The secondary will was intended to deal with her house. The primary will was intended to deal with the balance of her estate.

As a result of clerical errors, the secondary will contained some mistakes including a revocation clause revoking all other wills, which included the primary will; it repeated specific bequests contained in the primary will; and it did not contain a disposition of the residue of the estate such that an intestacy would be created.

On a subsequent application to remove an objection to the appointment of an estate trustee for the primary will, of his own initiative, the application judge embarked on an examination of the validity of the secondary will. Ultimately, he found that the secondary will was not valid based on Lemon J.’s finding that the testatrix did not read it or have knowledge of or approve of its contents.

Issue:

Did the application judge err in declaring the secondary will invalid?

Holding:

Appeal allowed.

Reasoning:

Yes. It was implicit in Lemon J.’s order for rectification of the secondary will, which was made nunc pro tunc, that he had determined that the secondary will is valid. The application judge’s decision undermined that of Lemon J., ignored his own and Lemon J.’s findings of the testatrix’s intentions, and improperly created an intestacy in circumstances where the evidence resulted in an opposite conclusion.

Lemon J.’s decision to rectify the secondary will was premised on his finding that the secondary will had not been read. That finding cannot then be used to find the secondary will, as rectified, invalid.

The judgment of the application judge holding the secondary will invalid is set aside. In its place, the Court substituted an order holding the secondary will valid.

1186708 Ontario Inc v Gerstein, 2016 ONCA 905

[Gillese, Benotto and Roberts JJ.A]

Counsel:

J. Zibarras and D. Meirovici, for the appellants
H. L. Shankman, for the respondents Estate of Saul Mintz, Richard Mintz and Andrea Mintz
D. Dutt and D. Stewart, for the respondents Irwin Mintz, Faye Mintz (deceased), 2135637 Ontario Ltd., Minkids Holdings, 781526 Ontario Ltd. and Mintz & Partners LLP
E. Perilz, for the respondents Howard Mintz, 781527 Ontario Inc., Dawn Trading Ltd., 497505 Ontario Inc., Rhonda Strasberg, Ettie Wosnick and Morris Wosnick
L. Galessiere, for the respondents Estate of Sydney Gerstein, Matanah Investments Corp. and Lerric Investments Corp.

Keywords: Endorsement, Corporations, Derivative Actions, Civil Procedure, Appeals, Jurisdiction, Ontario Business Corporations Act, ss. 246, 255

Facts:

Some of the defendants brought a motion to strike portions of the plaintiffs’ fresh as amended statement of claim. In response, the plaintiffs brought a motion for leave to commence a derivative action nunc pro tunc. The plaintiffs’ motion was brought under s. 246 of the Ontario Business Corporations Act (the “OBCA”). The two motions were heard together and disposed of by order of the Superior Court of Justice dated February 24, 2016 (the “Order”). Paragraph 1 of the Order provided that the plaintiffs’ motion was statute-barred by virtue of s. 4 of the Limitations Act, 2002.

The plaintiffs appealed paragraph 1 of the Order. However, an issue arose as to the proper jurisdiction to hear the appeal.

Issue:

What is the proper jurisdiction to hear an appeal in respect of an order made under the OBCA?

Holding:

The appeal must be transferred to the Divisional Court.

Reasoning:

The proper jurisdiction to hear an appeal in respect of an order made under the OBCA is the Divisional Court. Under s. 6(1)(b) of the Courts of Justice Act, an appeal lies to this court from “a final order of a judge of the Superior Court of Justice, except … an order from which an appeal lies to the Divisional Court under another Act” (emphasis added). Under s. 255 of the OBCA, “[a]n appeal lies to the Divisional Court from any order made by the court under this Act.” Though the claim was determined to be statute-barred by the Limitations Act, 2002, not the OBCA, the claim in para. 1 of the Order was brought under s. 246 of the OBCA. Given the broad scope afforded to s. 255 of the OBCA in the court’s jurisprudence, para. 1 of the Order should be interpreted as being an order within the meaning of s. 255 of the OBCA. Therefore, the proper jurisdiction for the appeal was the Divisional Court.

Gadbois v Newcom Business Media Inc., 2016 ONCA 898

[Weiler, Rouleau and Roberts JJ.A.]

Counsel:

J. Howlett, for the appellant

D. Chodos, for the respondent

Keywords: Endorsement, Employment Law, Wrongful Dismissal, Damages, Payment in Lieu of Notice

Facts:

Mr. Gadbois was terminated without notice from his employment. The issue on appeal was the amount that the appellant was entitled to receive in compensation as damages for the failure to give him reasonable notice of termination. Specifically, his commission income and bonus were disputed.

Gadbois was primarily responsible for selling advertising space in two Magazines. Newcom acquired the assets of one of those magazines ― Business Information Group (“BIG”) ― in January 2015 and retained Gadbois. The parties signed a new employment contract on January 24, 2015, which essentially provided for the same salary, commission, bonus and benefits as Gadbois had been receiving from BIG.

Newcom merged its pre-existing publication Canadian Technician (“CT”) with SSGM to form a new magazine: Canadian Auto Repair & Service (“CARS”). Upon merging, Newcom’s existing CT advertising contracts were handed over to Gadbois so that he could arrange with the clients to switch their ads into CARS. The parties agreed that a new agreement on commission was never reached. Gadbois was granted summary judgment. The employer appealed.

Issue:

1) Did the motion judge err in calculation of Gadbois’ commission?

2) Did the motion judge err in calculation of Gadbois’ bonus?

Holding:

Appeal allowed, in part.

Reasoning:

1) No. For the first six months of the year preceding his termination, Gadbois was paid commission respecting advertising for CARS, including the CT sales, at the rate stipulated for SSGM in the contract. It was open to the motion judge to hold that as Newcom had continued to pay Gadbois for all CARS revenue at the commission rate under the SSGM contract this should be continued during the notice period. The standard of review from these findings of fact was palpable and overriding error and the trial judge did not commit any palpable or overriding error in this regard.

2) Yes. The Court agreed with the appellant that the motion judge had erred in awarding a bonus for 2015. Specifically, the evidence did not support the motion judge’s conclusion that the appellant had promised the respondent he would receive a bonus regardless of the company’s profits.

Evidence about the payment of a bonus ought to have been read in context. The company had given all sales representatives a guarantee that their total compensation for 2015 would not decrease relative to the previous year’s because of the change in ownership. The evidence before the motion judge was that the respondent’s bonus was discretionary and that none had been paid to him in 2014. Further, because of the commissions he earned, his 2015 compensation, including the pay in lieu of reasonable notice awarded by the motion judge, greatly exceeded what he received in 2014. Finally, the respondent did not provide any evidence that the appellant made a verbal commitment to pay a bonus regardless of the company’s profits.

Hojjatian v Intact Insurance Company, 2016 ONCA 904

[Gillese, Benotto and Roberts JJ.A.]

Counsel:

M. Kermani, in person

J. Goit, for the respondents

Keywords: Endorsement, Insurance Law, Property Policy, Coverage, Water Damage, Summary Judgment

Facts:

The appellants appeal the dismissal of their action for indemnity under their insurance contract with the respondents, in relation to water damage to their home. The motion judge dismissed their motion for summary judgment and their action because he found that the water damage to the appellants’ home was not covered under their insurance contract with the respondents.

Issue:

1) Should Benotto J.A. recuse herself from hearing this appeal because she had sat on previous appeals involving the appellants, their house and their mortgagee?

2) Did the motion judge err in finding that the water damage was excluded under their insurance contract?

Holding:

Appeal dismissed.

Reasoning:

1) No. As a preliminary issue, the appellants’ request was dismissed. The Court was satisfied that there was no conflict of interest which precludes Benotto J.A. from hearing the appeal.

2) No. It was open to the motions judge to accept the expert opinion evidence, including the evidence of the appellants’ experts, that the cause of the water damage to the appellants’ property was the ongoing seepage of ground or surface waters into the house caused by pre-existing wear and tear and construction defects, and other deficiencies in the property, including damaged weeping and shower tiles, and inadequate exterior grading. The appellants’ insurance contract expressly excludes damage caused by this kind of water penetration.
Further, the appellants did not raise before the motion judge the allegations that the water damage was caused by a sewer back-up or that they had extended coverage under the Gold Key Plus Extension. Aside from the fact that the appellants should not be permitted to raise on appeal issues that were not raised before the motion judge, the appellants have provided no support for these allegations.

Finally, there was no basis for disturbing the motion judge’s dismissal of the claim for punitive damages. As a result, the Court found no reason to interfere with the motion judge’s decision.

Mitchell v Lewis2016 ONCA 903

[Weiler, Rouleau and Roberts JJ.A.]

Counsel:

H. Niroomand, for the appellants

M. Magonet, for the respondents

Keywords: Civil Procedure, Motions to Strike, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21, Breach of Contract, Breach of Trust, Unjust Enrichment, Conspiracy, Conversion, Fraudulent Misrepresentation, Fraud, Piercing Corporate Veil

Facts:

The appellants appeal the order of the motions judge striking out all but two of the causes of action pleaded in their statement of claim without leave to amend. The appellants’ action arose out of a consulting agreement between the appellant, The Mitchell Consulting Group, and the respondents, Global Learning Group Inc. (GLGI) and its affiliated group of companies. The appellants claimed that the respondents breached their obligations by failing to pay amounts owing under the agreement.

The appellants alleged that the respondents Robert Lewis and Wendy Lewis guaranteed GLGI’s payment for services rendered under the agreement and that they and GLGI further agreed to hold in trust any monies owing to the appellants under that agreement. Further, the appellants pleaded that on or about November 11, 2011, Ryan Mitchell and Robert Lewis reduced to writing the alleged oral trust agreement for funds owed to the appellants up to that time. The alleged agreement provided that Robert Lewis would hold three lots belonging to Ardoch Lake Developments Inc. in trust for the appellants as security for the funds they were owed by GLGI.

The appellants alleged that Robert and Wendy Lewis fraudulently converted monies from GLGI – monies that were owed to and held in trust for the appellants – to their own use. The appellants claimed breach of contract, breach of trust, breach of fiduciary duty, fraud, fraudulent misrepresentation, conversion, conspiracy and unjust enrichment.

The motion judge struck out the appellants’ Fresh as Amended Statement of Claim that asserts only the breach of contract claim against GLGI and the breach of trust claim against Robert Lewis in relation to three lots held by Ardoch LAke Developments Inc.

The motion judge refused the appellants leave to amend the other claims. The appellants’ Fresh as Amended Statement of Claim was the third iteration of its pleading. It followed receipt of the defendants’ detailed factums and a prior attendance before the motion judge, which served to point out the deficiencies in the appellants’ pleading. Nevertheless, the appellants were not able to correct those deficiencies. As a result, the motion judge concluded that given the history of the evolution of the claim, he was not satisfied that granting the plaintiffs leave to further amend it to remedy the above identified deficiencies will result in a proper pleading to which the defendants can respond.

Issues:

1) Whether the motion judge erred in allowing the breach of trust claim to go forward only as against Robert Lewis and not also against Ardoch Lake Developments Inc. as the owner of the lots which are impressed with the alleged trust.

2) Whether there were sufficient material facts pleaded to support the claims for unjust enrichment, conspiracy, conversion, fraudulent misrepresentation, and fraud based on the alleged breach of trust.

3) With respect to the claims of fraudulent diversion of funds and unjust enrichment as against Robert and Wendy Lewis personally, whether the motion judge erred in determining that the pleading could not support piercing the corporate veil of the corporations over which Robert and Wendy Lewis had control because there was no allegation that the corporations were sham corporations.

Holding:

Appeal allowed, in part.

Reasoning:

1) Yes. In the Fresh as Amended Statement of Claim, the appellants alleged that the respondents breached the trust agreement by diverting funds and failing to perform in accordance with the agreement. They pleaded that under this agreement, Ryan Mitchell had an interest in the Ardoch Lake Developments lots. These lots are owned not by Robert Lewis but by Ardoch Lake Developments Inc. The Court of Appeal agreed that, to properly plead the breach of trust claim in relation to the lots, it is necessary that the appellants be permitted to plead it as against the owner of those lots.

2) No. The motion judge found that the pleadings for those claims were deficient in that they contained mostly bald allegations and lacked sufficient particularity in relation to the defendants. The claims were based on an alleged oral trust for which no material facts were pleaded. There was no error in the motion judge’s exercise of his discretion not to grant the appellants leave to amend their pleading in relation to those claims.

3)  No. The motion judge correctly determined that the claim against Robert and Wendy Lewis personally, based on the alleged breach of an oral trust agreement, was untenable because of the appellants’ failure to plead any material facts. However, the motion judge erred by restricting the circumstances in which it would be appropriate to pierce the corporate veil to those involving sham corporations and by failing to consider whether the appellants’ pleading of fraudulent and improper conduct against Robert and Wendy Lewis could be sufficient to support a finding of personal liability against them. The motion judge adopted too narrow a view of when the corporate veil could be pierced.

While the corporate veil has been pierced in cases involving sham corporations, that remedy is not limited to those cases. Most recently, this court in Shoppers Drug Mart Inc. v. 6470360 Canada Inc., 2014 ONCA 85, 372 D.L.R. (4th) 90, at para. 43, confirmed that the appropriate test to apply in determining whether the corporate veil should be pierced was stated by Laskin J.A. in 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.): Typically, the corporate veil is pierced when the company is incorporated for an illegal, fraudulent or improper purpose. But it can also be pierced if, when incorporated “those in control expressly direct a wrongful thing to be done.” The motion judge erred in concluding that the pleading relating to the alleged diversion of funds by Robert and Wendy Lewis could not, if properly pleaded with sufficient particulars, support a claim for piercing the corporate veil and for personal liability against Robert and Wendy Lewis.

Harstein v Ricottone2016 ONCA 913 

[Simmons, Pepall and Huscroft JJ.A.]

Counsel:

F. E. Leitch, Q.C., for the appellant

M.W. Fowler, for the respondents

Keywords: Endorsement, Property, Ownership, Wills and Estates, Trusts, Statute of Frauds, Family Law, Cohabitation Agreements, Interpretation

Facts:

As a result of financial difficulties, the appellant transferred two cottage properties to a friend and to his sister and brother-in-law, respectively, subject to a right of repurchase. As part of resolving his financial difficulties, the appellant sold the house where he and his common law spouse were living and they moved to one of the cottage properties. When the appellant later repurchased the two cottage properties, he directed that title be taken in the name of his former common law spouse. The appellant and his former common law spouse subsequently separated. The appellant sued his former common law spouse, claiming that she held the two cottage properties in trust for him. The appellant’s former common law spouse died before the action came to trial.

In dismissing the appellant’s action, the trial judge found that there was no written trust declaration for the cottage properties; that the evidence fell short of establishing an express oral trust; that a claim based on an express oral trust would, in any event, be barred by s. 9 of the Statute of Frauds, R.S.O. 1990, c. S.19; and that there was no fraud on the part of the appellant’s former common law spouse. He construed the cohabitation agreement as a whole and determined that the appellant’s claim was barred by its provisions.

The trial judge dismissed the appellant’s action claiming ownership of two cottage properties and found that the two properties, which were once owned by the appellant, are owned by the estate trustees of the appellant’s former common law spouse.

Issues:

1) Did the trial judge err in his interpretation of the cohabitation agreement by favouring general terms of the cohabitation agreement over the more specific terms?

2) Did the trial judge err in failing to find that a trust was created when the properties were transferred to the appellant’s former common law spouse?

Holding:

Appeal dismissed.

Reasoning:

1) No. The argument focuses on paragraph 10 of the cohabitation agreement dealing with the family residence. However, even that paragraph makes it clear that to protect a substitute residence, the substitute residence was to be registered in the appellant’s name. Read as a whole, the cohabitation agreement makes it clear that, subject to a written variation of the cohabitation agreement or other written instruments, ownership rights are governed by title. Paragraph 10 of the cohabitation agreement is consistent with this requirement. The trial judge’s interpretation did not favour general provisions of the cohabitation over the more specific.

2) No. The trial judge did not accept the appellant’s version of the events surrounding the transfer of the properties and concluded the evidence was not satisfactory to create an express oral trust. Further, the trial judge concluded, correctly in our view, that there was no written trust agreement. In any event, even if the trial judge had found an express oral trust, the cohabitation agreement makes it clear that, in the absence of a written agreement, property is owned by the party in whose name it is registered.

Rana v Unifund Assurance Co2016 ONCA 906

[Pepall, Hourigan and Huscroft JJ.A.]

Counsel:

K. Rana, acting in person

C. M. Martin, for the moving party

Keywords: Endorsement, Civil Procedure, Appeals, Motions to Quash, Courts of Justice Act, s 19(1)(b), Jurisdiction

Facts:

The moving party, Unifund Assurance Company, moved to quash the appellant’s appeal of the January 5, 2016 order of Dow J. and the April 7, 2016 order of Dunphy J.

In the January 5, 2016 order, Dow J. adjourned the trial of the action to January 30, 2017; ordered costs thrown away payable by the appellant within 45 days or by February 29, 2016; and ordered her to execute certain medical record authorizations. Dunphy J.’s April 7, 2016 order dismissed the appellant’s motion to set aside or vary Dow J’s January 5, 2015 order requiring her to pay costs thrown away and ordered her to pay costs within 30 days. He determined that the record before him did not justify intervention pursuant to r. 59.06 of the Rules of Civil Procedure, and that the Human Rights Code was inapplicable.

Counsel for the moving party wrote to the appellant confirming that it appeared she was appealing from Dow J’s January 5, 2016 order and Dunphy J’s April 7, 2016 order, both interlocutory orders for which the appeal route was to the Divisional Court. Counsel advised of the moving party’s intention to bring a motion to quash the appellant’s appeal for lack of jurisdiction. The appellant responded that she was not appealing Dow J’s January 5, 2016 order.

The appellant brought a motion for leave to appeal Dunphy J’s April 7, 2016 order in the Divisional Court. On August 16, 2016, Nordheimer J. dismissed the appellant’s motion for leave to appeal to the Divisional Court.

Issue: Whether the Court of Appeal had jurisdiction to hear the appeals.

Holding: Motion granted

No. An appeal lies to the Divisional Court from an interlocutory order of a judge in the Superior Court with leave, pursuant to s 19(1)(b) of the Courts of Justice Act. Both the January 5, 2016 order of Dow J. and the April 7, 2016 order of Dunphy J. are interlocutory orders. As such, an appeal did not lie to the Court of Appeal, and it did not have jurisdiction.

The Court of Appeal granted the moving party’s motion and the appeal from Dunphy J’s April 7, 2016 order was quashed. In any event given Nordheimer J’s order, the appeal before the Court of Appeal was moot. To the extent any appeal was taken from Dow J’s January 5, 2016 order, it too was quashed. The appellant’s cross-motion was dismissed.

Manchanda v Thethi, 2016 ONCA 909

[Gillese, Benotto and Roberts JJ.A.]

Counsel:

R. Parker, for the appellant

E. Rayson and M. Weisbrot, for the respondent

Keywords: Endorsement, Family Law, Motions to Strike, Failure to Comply with Orders, Disclosure, Family Law Rules, r. 1(8), Kovachis v. Kovachis, Roberts v. Roberts

Facts:

The appellant sought to appeal the order of the motion judge striking his pleadings for failure to comply with court orders and allowing the respondent to amend her application. The underlying action was a matrimonial litigation.

Three court orders specifically required the appellant to deposit rental income, which he collected from jointly owned property, into a specified joint account. There were also orders for financial disclosure.

 The respondent claimed that the disclosure provided by the appellant did not satisfy the court orders and moved to strike his pleadings under r. 1(8) of the Family Law Rules. The respondent also sought leave to amend her application to include a claim for constructive trust on the matrimonial home owned by the appellant. The motion judge struck the appellant’s pleadings and allowed the respondent to amend her application.

Issue:

Did the motion judge err in striking the appellant’s pleadings?

Holding:

Appeal dismissed.

Reasoning:

No. The circumstances were exceptional and egregious. In Kovachis v. Kovachis, 2013 ONCA 663, the Court of Appeal allowed an appeal from an order striking the pleadings of a non-compliant party because the motion judge had failed to: (i) consider the substantial disclosure already made; (ii) itemize what disclosure the party had failed to provide; (iii) make a finding of willful disobedience of the order; and (iv) consider proportionality. In the present case, the motion judge did just that. In detailed reasons he itemized the disclosure already made and what remained outstanding. He found that the breach was willful. He considered proportionality in the light of disclosure already made, saying that he was less moved by the quantity than by the quality of the disclosure. The appellant had not disclosed basic documents such as his income tax returns, financial statements, bank account statements, credit card statements, and investment account statements. Therefore, the motion judge’s findings were supported on the record before him.

Furthermore, after continual admonitions by the courts and the legislature that parties to a matrimonial proceeding must produce financial documentation, willful non-compliance must be considered egregious and exceptional. The Court of Appeal has stated that the most basic obligation in family law proceedings is the duty to disclose financial information. The requirement is immediate and ongoing per Roberts v. Roberts, 2015 ONCA 450.

Jackson v Solar Income Fund Inc2016 ONCA 908

[Feldman, Lauwers and Miller JJ.A.]

Counsel:

A. I. Schein, for the appellant

T. H. Lie, for the respondent

Keywords: Endorsement, Civil Procedure, Applications, Rules of Civil Procedure, Rule 14.05(3)(h), Contracts, Interpretation, Factual Matrix

Facts:

The respondent, having been refused payment by the appellant on a promissory note, brought a successful application to enforce payment in the amount of $263,600. The Appellant argued that the application judge erred by refusing to look beyond the face of the promissory note to the factual matrix, which included a share purchase agreement, service agreement, and side-agreement, all said to be part of a transaction to merge two corporations.

Issue:

Whether the promissory note was modified by a subsequent agreement such that, despite its clear wording, it is not enforceable on demand.

Holding:

Appeal allowed.

 Reasoning:

 This case requires an understanding of the broader factual matrix, which includes the other agreements that may or may not conflict with the promissory note. This cannot be determined simply by reading the promissory note in isolation from the larger transaction of which it appears to be a part, or of understanding what the various agreements together were expected to achieve. The respondent cannot rely on Rule 14.05(3)(h), which authorizes proceeding by way of application “where it is unlikely that there will be any material facts in dispute.” There are material facts in dispute, in particular, whether there was an agreement to convert the promissory note from a demand note to a note not payable on demand, and the resolution of this dispute requires the trial of an action.

Civil Endorsements:

Mishev v Shah2016 ONCA 911

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

Counsel:

I. Mishev, acting in person

P. T. Summers, for the respondents

 Keywords: Endorsement, Adjournments, Assistance of Counsel, Delay

Criminal Decisions:

R v Biggs, 2016 ONCA 910

[MacPherson, Blair and Watt JJ.A.]

Counsel:

M. R. Gourlay, for the appellant

B. Gluckman, for the respondent

Keywords: Criminal Law, Controlled Drugs and Substances Act, Possession for the Purpose of Trafficking, Constructive Possession, Failure to Comply with a Probation Order

R v Rockey, 2016 ONCA 891

[Watt, Pepall and Tulloch JJ.A.]

Counsel:

D. Rockey, in person

E. Chozik, duty counsel

J. Mannen, for the respondent

Keywords: Criminal Law, Sentencing, Conditional Sentence, Driving Prohibitions, Driving while Disqualified, Aggravating Factors, Lack of Remorse

R v JF (Publication Ban)2016 ONCA 900

[LaForme, Rouleau and Brown JJ.A.]

Counsel:

A. Risen, for the appellant

D. Bonnet, for the respondent

Keywords: Criminal Law, Sexual Assault, Consent, Burden of Proof, Remorse

R v Knezevic, 2016 ONCA 914

[Laskin, Gillese and Watt JJ.A.]

Counsel:

T. Lemon and S. Siew, for the appellant

J. Lockyer and A. Ostroff, for the respondent

Keywords: Criminal Law, Importing and Possession of Drugs, Blind Courier

Ontario Review Board Decisions:

Re Edwards2016 ONCA 901

[LaForme, Rouleau and Brown JJ.A.]

Counsel:

S. Pashang, for the appellant

D. Bonnett, for the respondent, Her Majesty the Queen

M. Warner, for the respondent, Centre for Addiction and Mental Health

Keywords: Endorsement, Ontario Review Board, Not Criminally Responsible on Account of Mental Disorder, Detention Orders, Conditional Discharges

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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