Court of Appeal Summaries (January 9 – 13, 2017)

Good afternoon.

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

Determining the standard of review for issues of contractual interpretation has just been made more complicated. The GoodLife Fitness case appears to create a new exception to Sattva, which is supposed to limit appellate review of contractual interpretation cases to situations where a palpable and overriding error of fact was made. The court specifically stated that the Ledcor exception to Sattva, which calls for a correctness standard of review for standard form contracts, did not apply in this case, as the lease in question was heavily negotiated between the parties and their counsel. Accordingly, the court found that Sattva applied. The court agreed with the application judge that the contractual term in question (whether the tenant was leasing the basement) was ambiguous, and therefore resort was to be had to the surrounding factual circumstances in the making of the contract to try to resolve the ambiguity. However, the court disagreed with the application judge’s conclusion as to the proper interpretation of the lease provision in question on the basis that she failed to consider all of the surrounding circumstances. Where it gets interesting is that the court declined to characterize that error as a palpable and overriding error, which is what the appellant was urging. Rather, it cited the “extricable question of law” exception to Sattva, which allows appellate intervention on the standard of correctness when there is an “application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”. The court held that the failure of the applications judge to consider all of the surrounding circumstances amounted to an error of law justifying reversal of the application judge’s decision. This seems to suggest that a failure to consider all of the surrounding circumstances in conducting a factual inquiry can amount to a “failure to consider a relevant factor”. I would have thought that the situation the Supreme Court in Sattva had in mind by “failure to consider a relevant factor” is where a court, in the exercise of its discretion, is supposed to consider several factors, but ignores one or more of them. This decision suggests that an error of mixed fact and law in interpreting a contract can fall short of being a palpable and overriding error but can, nonetheless, be characterized as an error of law justifying appellate intervention. Counsel in future cases can now argue that the failure to consider certain facts or evidence is a “failure to consider a relevant factor” and that this is an error of law reviewable on a standard of correctness.

Other topics covered this week included limitation periods, property law, police liability, costs, and dog bite law.

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):

1079268 Ontario Inc. v. GoodLife Fitness Centres Inc., 2017 ONCA 12

Crombie Property Holdings Limited v. McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16

Nissen v. Durham Regional Police Services Board, 2017 ONCA 10

Mammone v. Mammone, 2017 ONCA 18

RJM56 Investments Inc. v. Kurnik, 2017 ONCA 19

Wilk v Arbour, 2017 ONCA 21

For Short Civil Decisions, click here

For Criminal Decisions, Click here

 

Civil Decisions

1079268 Ontario Inc. v. GoodLife Fitness Centres Inc., 2017 ONCA 12

[Cronk, Rouleau and Huscroft JJ.A.]

Counsel:

J. K. Downing and B. Whitwham, for the appellant GoodLife Fitness Centres Inc.

K. D. Sherkin, E. Barrass and C. Scalzi, for the respondent 1079268 Ontario Inc.

Keywords: Contracts, Leases, Interpretation, Factual Matrix, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Facts:

The lease in question was executed by 1079268 Ontario Inc. (“107”) with GoodLife Fitness Centres Inc.’s (“GoodLife”) predecessor, Extreme Fitness (“Extreme”), on October 30, 2006, following lengthy negotiations between their lawyers and the exchange of several draft leases.

On April 4, 2008, 107’s lawyer wrote to Extreme claiming that it had made extensive renovations to the basement level as well as the ground, second, third floors and mezzanine of the building. He stated that Extreme had converted the basement from a storage area to a functional area for use by Extreme’s fitness club business and that the alterations had increased the usable rental area of the building by approximately 4,600 square feet.

Extreme’s lawyer replied in an email dated April 22, 2008. He asserted that Extreme was not in breach of the lease because the lease included the basement and Extreme was under no obligation to pay additional rent for using it. Extreme continued to pay the rent due under the lease and 107 took no further action. Three years later, Extreme was in financial difficulty, and GoodLife entered into an asset purchase agreement pursuant to which it took an assignment of Extreme’s lease with 107.

The asset purchase agreement required court approval. 107 opposed the sale to GoodLife on the basis that Extreme was in breach of its obligations under the lease. 107 reiterated its earlier position that the lease did not include the basement and that Extreme owed back rent for its use of the basement. In addition, 107 asserted that the square footage had been understated in the lease and that the premises were significantly larger. The asset purchase agreement was approved in a vesting order dated March 27, 2013. 107’s claims against Extreme were settled subsequently, and the court ordered that 107’s claims against GoodLife (post-March 27, 2013) should be adjudicated by way of a separate application. 107 then brought an application for rectification of its lease with GoodLife and a determination of the amount of back rent, if any, that GoodLife owed under the lease. The application judge determined that the lease did not include the basement and therefore 107 was entitled to additional rent for GoodLife’s use of the basement. GoodLife appealed.

Issue:

Does the appellant GoodLife’s lease with the respondent 107 include the basement of the premises?

Holding: Appeal allowed.

Reasoning:

Yes. As the Supreme Court of Canada explained in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633 (“Sattva”), contractual interpretation is properly characterized as a mixed question of fact and law and is subject to deferential review on appeal. Although the court has since held that standard form contracts are an exception to this rule and are subject to review on the standard of correctness, that exception does not apply here: see Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37. The provisions of the lease in question were negotiated by the parties and their interpretation is subject to the Sattva principles.

Sattva makes clear that the standard of review is palpable and overriding error, unless it is possible to identify an extricable question of law, in which case correctness review applies. Sattva emphasizes that questions of law are relatively rare; courts must be cautious in identifying extricable questions of law, lest contractual interpretation collapse into correctness review. Nevertheless, the Supreme Court identified three examples of legal errors that may be made in the course of contractual interpretation: “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”.

Although the application judge acknowledged the need to consider the circumstances surrounding the negotiation in interpreting the lease, she failed to consider all the relevant circumstances. This constituted an error of law (as opposed to a palpable and overriding error of fact). Considered as a whole, the surrounding circumstances demonstrate that the lease includes the basement. When the interpretation of the lease is informed by consideration of all the surrounding circumstances – and in particular, the email correspondence and the evidence of Extreme’s lawyer – the parties’ intention that the entire premises, including the basement, were to be leased on a lump sum basis is clear and must be given effect. Although inconsistent provisions remained in the lease, it does not, without more, provide a basis for concluding otherwise. The application judge considered it significant that 107 appears to have assumed that Extreme would agree to lease additional space in adjoining premises that it owned, but this did not come to pass. It may be that Extreme’s use of the basement – which was known to 107 for some time – rendered the leasing of additional premises unnecessary. Be that as it may, 107 is entitled only to the rent GoodLife is required to pay under the lease, and in the view of the Court of Appeal, the lease includes the basement.

Crombie Property Holdings Limited v. McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16

[Rouleau, van Rensburg and Miller JJ.A.]

Counsel:

P. Wardle and J. Gibson, for the appellant

L. Finney and A. Wood, for the respondents McColl-Frontenac Inc. (formerly known as Texaco Canada Limited), Imperial Oil Limited and 172965 Canada Limited

L. Phillips-Smith, for the respondent Avondale Stores Limited

B. Weintraub and C. Harris, for the respondent Dimtsis Dentistry Professional Corporation

Keywords:  Civil Procedure, Limitation Periods, Limitations Act, 2002, s. 5, Discoverability, Torts, Nuisance, Environmental Law, Contamination

Facts:

The appellant Crombie Property Holdings Limited (“Crombie”) brought an action for damages resulting from the contamination by hydrocarbons of a property (the “Crombie Property”). The contamination was alleged to have migrated from an adjacent property (the “Dimtsis Property”), which had been used as a gas station until 2004. The defendants to the action – the respondents in the appeal – were the owners of the Dimtsis Property.

The action was commenced by notice of action issued on April 28, 2014. In its statement of claim the appellant asserted that it was not aware of soil and groundwater contamination at its property that had migrated from the Dimtsis Property until September 17, 2012, though they had purchased the property on April 10, 2012. Crombie had hired Stantec Consulting Ltd. (“Stantec”) to assist with its environmental due diligence. In their statements of defence, the respondents pleaded that the claims asserted by the appellant had been discovered more than two years before the action was commenced and were therefore barred by the Limitations Act, 2002. The respondents moved for summary dismissal accordingly.

The motion judge granted the motion and dismissed the action. She concluded that the appellant had become aware of sufficient material facts to form the basis of the action by March 9, 2012, at which time the appellant waived all conditions for the purchase transaction, including environmental conditions, such that it was required to complete the purchase of all 22 properties.

In the alternative, she held that although the draft Phase II report prepared by Stantec was dated May 9, 2012, Crombie had more than a sufficient basis for an action by March 30, 2012 when laboratory results were “made available” to it. In the further alternative the motion judge stated that, even if Crombie did not know about the drilling results until May 2012, the appellant ought to have known and did not exercise due diligence.

Issue: Did the motion judge err when she concluded that the appellant knew or ought to have known it had a cause of action against the respondents more than two years before it commenced its action?

Holding: Appeal allowed.

Reasoning:

The specific issue was whether Crombie’s claim in respect of the environmental contamination of its property was “discovered” within the meaning of s. 5 of the Limitations Act, 2002 before April 28, 2012. The appellant must have known or ought reasonably to have known of the material facts necessary for a claim. It is “reasonable discoverability” and not “the mere possibility of discovery” that triggers a limitation period: Van Allen v. Vos, 2014 ONCA 552.

The motion judge made a palpable and overriding error when she equated “knowledge of potential contamination with knowledge of actual contamination” and concluded that Crombie knew about its claim by March 9, 2012. The material fact in question in this case was that the Crombie Property was contaminated by hydrocarbons.  The motion judge did not point to any evidence that Crombie had actual knowledge of the hydrocarbon contamination at the Crombie Property at that time. Rather, she referred to material that was available to Crombie from “a review of the property” (presumably the draft Phase I ESA results reported by Stantec) and the “compilation of material that was presented to them” (presumably the historical environmental reports Crombie received on February 29, 2012).

However, any information available to Crombie at that time about actual contamination was historical. Historical reports revealed the presence of hydrocarbons in groundwater in 2005 that were marginally above potable water standards. Point in fact, the purpose of the Phase II drilling and sampling program recommended and undertaken by Stantec was to determine whether or not the soil or groundwater at the Crombie Property was contaminated. The draft Phase II ESA report was submitted to Crombie by Stantec on May 9, 2012.  The test results showed that petroleum hydrocarbons in certain soil and groundwater samples exceeded MOE site condition standards.

It was not sufficient that Crombie had suspicions of possible contamination. The issue under s. 5(1)(a) of the Limitations Act, 2002 for when a claim is discovered is the plaintiff’s “actual” knowledge. The suspicion of certain facts or knowledge of a potential claim may be enough to put a plaintiff on inquiry and trigger a due diligence obligation, in which case the issue is whether a reasonable person with the abilities and in the circumstances of the plaintiff ought reasonably to have discovered the claim, under s. 5(1)(b). In the present case, the suspicion of contamination was sufficient to give rise to a duty of inquiry, it was not sufficient to meet the requirement for actual knowledge. The subsurface testing, while confirmatory of the appellant’s suspicions, was the mechanism by which the appellant acquired actual knowledge of the contamination.

Moreover, the motion judge erred in framing the discoverability issue when she stated that the appellant’s claims were “available and discoverable” well before April 28, 2012. She was required to determine when the appellant had actual knowledge of the elements of its claim, and in particular that the property was contaminated by hydrocarbons, and when a reasonable person with the appellant’s abilities and in its circumstances, ought to have known of the contamination.  The fact that contamination was there to be discovered was, of course, not sufficient to start the limitations clock.

The motion judge made a second palpable and overriding error in failing to consider the relevant circumstances: a transaction involving 22 properties. The motion judge concluded in the alternative that Crombie had knowledge of the material facts sufficient for its claim when the subsurface test results were “available” to Stantec (which she assumed was by the end of March). If the subsurface test results were sufficient to confirm that the Crombie Property was contaminated (which is a reasonable conclusion), it was not sufficient that the results were “available”. The question was when Crombie had knowledge of the test results.

First, the motion judge stated that, although the draft Phase II report containing the findings from the soil and groundwater sampling was not provided to Crombie until May 9, 2012, “[i]t is difficult to believe that Crombie did not know about these results given that they were directing and presumably paying Stantec to go ahead with the further testing.” However, the fact that Crombie was directing and paying Stantec was not sufficient to ground the conclusion that Crombie knew about the test results as soon as they were reported by the laboratory to Stantec.

Second, the motion judge concluded that because Stantec had verbally reported to Crombie the results of the Phase I ESA during the due diligence period it “only [made] sense” that they would have continued to do so when it received the laboratory results. She rejected the evidence provided by Crombie’s Director of Acquisitions and Dispositions, which asserted that Crombie received no status updates from Stantec between March 13 and April 12, 2012. The motion judge stated that the absence of communication with Stantec during this “crucial time period” made no sense.

The Court held that this reasoning was problematic because it completely ignored the circumstances of the multi-property transaction Crombie was involved in, the due diligence process and the waiver of conditions. Nowhere in her reasons did the motion judge refer to the fact that Crombie was involved in purchasing 22 properties. “It was unreasonable for the motion judge to draw an inference about Crombie’s knowledge of the test results without considering such circumstances.”

It was also a palpable and overriding error for the motion judge to fail to take into consideration the multi-property transaction and Crombie’s waiver of conditions in her assessment of what Crombie knew or ought to have known about hydrocarbon contamination. Subsection 5(1)(b) of the Limitations Act, 2002 asks when “a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of” the elements of the claim. What the motion judge ought to have considered, was whether, a reasonable person in Crombie’s position, after the waiver of conditions, would have sought out and obtained the laboratory results before April 28, 2012.

Nissen v. Durham Regional Police Services Board, 2017 ONCA 10

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

Roger Horst, Rafal Szymanski and Lisa Bruni, for the appellants

M.A. Hoy, for the respondents

Keywords: Torts, Police Liability, Breach of Confidence, Informer Privilege, Damages, Mental Distress

Facts: Margaret Stack brought an action against the police (the appellants) for what was pleaded as breach of informer privilege.

Ms. Stack attended the police station and gave a videotaped statement that her neighbours’ teenaged son broke into another neighbour’s house and stole their guns. According to Ms. Stack, she gave this statement after securing an officer’s promise that her identity as an informant would not be disclosed. She did not know that her statement was being videotaped. According to the officer, he never promised confidentiality to Ms. Stack, and she was a regular witness.

Following criminal charges, Ms. Stack’s videotaped statement was included in the Crown disclosure package given to the young offender.

Thereafter, the young offender’s father drove his truck at Ms. Stack. She managed to jump out of the way, physically unharmed. Ms. Stack’s husband reported this incident to police. An officer spoke with the young offender’s father, but did not advise Ms. Stack or her husband of this. They continued to feel threatened as the young offender’s family leered in their direction and made “clucking” noises at Ms. Stack. This harassing behaviour ultimately led Ms. Stack and her family to sell their family home and move to another community.

Trial Decision: The trial judge found that the officer promised Ms. Stack confidentiality, and by virtue of this promise, she was a confidential informant to whom the privilege attached.

As this was a novel case concerning the civil consequences of breach of informer privilege, the trial judge considered whether liability should be assessed on a strict or reasonableness standard. He found that, in the circumstances, he was not required to make such a finding, as the respondents were liable on either standard.

The trial judge was satisfied on the evidence, which included evidence given by Ms. Stack, her family and friends, and her litigation expert, that Ms. Stack suffered from severe and prolonged symptoms of post-traumatic stress disorder. Less weight would be placed on this evidence due to the absence of any medical records from Ms. Stack’s treating physicians with respect to her past and ongoing psychological issues.

The trial judge invited counsel to make submissions as to whether or not the personal injury cap on general damages applied to injuries that are solely psychological in nature. The trial judge ultimately determined that he did not have to decide the issue, as Ms. Stack’s $345,000 general damages award did not exceed the cap. The trial judge declined to award punitive damages.

Arguments on Appeal: The appellants appealed the trial judge’s finding on both liability and damages. In support of their appeal on liability, the appellants argued that the trial judge erred: (i) by omitting elements of the test for informer privilege, which reflect the appropriate circumstances in which to deny an accused his right to full disclosure; and (ii) in finding that the officer promised Ms. Stack confidentiality. In support of their argument that the $345,000 damages award was excessive, the Appellants argued that the trial judge erred by: (i) relying on case law with respect to general damage awards that were outside the personal injury context, and hence whose damages awards included compensation for injuries beyond psychological injury; (ii) failing to consider the evidence of Ms. Stack’s expert that Ms. Stack suffered two psychological traumas prior to the disclosure of her identity to the young offender; and (iii) in finding that the failure of the police to follow-up with Ms. Stack and her family was an “aggravating factor” that justified an increase in the award of general damages.

Issues:

  1. Did the trial judge err in finding that Ms. Stack was promised confidentiality?
  2. Did the trial judge err in finding that Ms. Stack established the necessary elements for a claim for damages?
  3. Were the damages awarded excessive?

Holding: Appeal dismissed.

Reasoning:

  1. No. The trial judge thoroughly reviewed the evidence of Ms. Stack and other witnesses, and clearly explained the basis for his finding. His finding was supported by conversations in the videotaped statements and other evidence. The trial judge’s finding attracts deference, and the Court of Appeal found no reason to interfere.
  2. No. The Court of Appeal found that this case fell within the long-recognized cause of action for breach of confidence. The trial judge found that Ms. Stack was promised confidentiality in exchange for anonymity. This granted Ms. Stack a legal and equitable right to remain anonymous, and Ms. Stack was entitled to recover on the basis of breach of that right.

The Court of Appeal was not persuaded that it must be proven, even in a criminal case where informer privilege is being asserted, that the information was difficult to obtain or that the witness would be endangered if their identity were disclosed. The Court found that adding these additional elements would place citizens in an impossible situation, as citizens would typically not have a way of determining whether police could obtain the information from another source, nor could citizens gauge what the police considered to be the risk of harm they faced should their identity be disclosed. It is up to the police to decide whether or not to make a promise of confidentiality. If the police tell a witness that their identity will not be revealed in order to get information, the promise should be kept.

3) No. The Court of Appeal found that, although the general damages award was generous, the trial judge’s reasons did not reveal any error of law or principle that would justify intervention.

The Court of Appeal found no reason why the general damage awards in  Cinar v. Robertson, 2013 SCC 73, where $400,000 was awarded for psychological injury arising from breach of copyright, and Young vs. Bella 2006 SCC 3, where $430,000 was awarded for psychological injury arising from circumstances that are akin to defamation, could not shed light on the damages awarded for this psychological injury, which the trial judge noted to be “severe.”

Further, although Ms. Stack’s litigation expert testified as to a series of traumatic events that occurred prior to the disclosure of Ms. Stack’s identity, it was open to the trial judge on the facts to conclude that the end result psychological harm suffered by Ms. Stack was entirely attributable to the disclosure of her identity.

It was further open to the trial judge to find that the failure to take meaningful steps to protect Ms. Stack and her family from retribution was an aggravating factor that increased the psychological harm suffered by Ms. Stack. The duty that police owed to Ms. Stack, after promising her confidentiality in exchange for her information, did not end after her identity was disclosed.

Mammone v. Mammone, 2017 ONCA 18

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

Counsel:
A. Rouben, for the appellants
A. J. McNish, for the respondents

Keywords: Endorsement, Property Law, Statute of Frauds, s. 4, Evidence Act, s. 13

Facts:

The respondent brought an application for the sale of two properties owned jointly by the two Mammone brothers, Emilio and the deceased Frank. Emilio resisted the sale on the basis that Frank, prior to his death, had agreed to sell his interest in the two properties to Emilio for $110,000.

The application judge rejected this position and granted the respondent’s application for the sale. Applying s. 13 of the Evidence Act, R.S.O. 1990, c.E. 23, and s. 4 of the Statute of Frauds, R.S.O. 1990, c.S. 19, he held “there is no evidence directly from Frank Mammone that he had agreed to complete this transaction” and Emilio’s actions at the relevant times did not demonstrate part performance.

The appellants appeal from the judgment of the application judge.

Issues:

Did the application judge err in his conclusion on the issues involving s.13 of the Evidence Act and s. 4 of the Statute of Frauds?

Holding:

Appeal dismissed.

Reasoning:

No. The application judge did not err in his conclusion on the issues involving s.13 of the Evidence Act and s. 4 of the Statute of Frauds. The application judge explicitly applied Burns Estate and Erie Sand to the fact situation before him. He accurately stated the governing legal principles from these cases and then engaged in a careful identification and analysis of the key facts that needed to be considered under the umbrella of these principles. The application judge’s conclusion does not come anywhere close to being a palpable and overriding error.

Further, as the application judge noted, the evidence relating to the actions and testimony of Emilio and Frank’s lawyers at the relevant time simply does not support a conclusion that the brothers had reached an agreement that Frank would sell his interest in the two properties to Emilio for $110,000.

 

RJM56 Investments Inc. v. Kurnik, 2017 ONCA 19

[Cronk, Rouleau and Huscroft JJ.A.]

Counsel:

M. L. Solmon and D. M. Sherman, for the appellant

M.R. Kestenberg, for the respondent

A. Kinoshita and P. T. Sugunasiri, for Canada Revenue Agency

Keywords: Endorsement, Civil Procedure, Costs, Rules of Civil Procedure, Rule 49, Offers to Settle

Facts:

The court allowed the appellant’s appeal from the judgment granting partial summary judgment but dismissed its appeal of the lower court’s dismissal of its application. The appellant was awarded its costs of the appeal fixed in the amount of $15,000 inclusive of disbursements and applicable taxes. The decision also provided that if the parties could not agree on costs in the court below, they were to make brief written submissions, which are the subject of this hearing.

The appellant seeks costs in the court below on a partial indemnity basis from the commencement of the application up to the date of its offer to settle and on a substantial indemnity basis thereafter under rule 49 of the Rules of Civil Procedure, for its original application and for defending against the respondent’s motion. In the alternative, the appellant seeks partial indemnity costs for the proceedings in the court below fixed in the amount of $57,031.43, inclusive of disbursements and HST. It also seeks costs of the appeal on a substantial indemnity basis as a result of the offer to settle that was made in the context of its application.

 Issue:  Did the court err in its costs of the appeal fixed in its original decision?

 Holding: Appeal dismissed.

Reasoning:

 No. With respect to the costs of the original application and motion, the court agreed with the respondent’s submission that the offer to settle referred to by the appellant is of no relevance to the issue of costs. It was made as an offer to settle the appellant’s own application and that application has been dismissed.

The court also agreed with the respondent’s submission that the result on appeal, and as a consequence in the court below, was mixed. This is because the appeal was allowed strictly on the basis of the motion and the appeal of the dismissal of the application was dismissed as moot. The $57,031.43 being sought by the appellant in partial indemnity costs for the original application and motion was deemed excessive.

In the court below, the respondent, who had initially been successful on both the application and the motion, received a costs award of $28,565.99. In the court’s view, taking into account the fact that the appellant’s application was not successful but that the appellant was successful on appeal with respect to the motion and specifically on the critical issue of its obligation to pay additional amounts to the respondent, a reasonable amount for costs in the court below is the same amount originally awarded to the respondent, that is, $28,565.99. Costs of the application and motion in the court below are awarded to the appellant fixed in the amount of $28,565.99, inclusive of disbursements and applicable taxes.

Wilk v Arbour, 2017 ONCA 21

[Weiler, Rouleau and Roberts JJ.A.]

Counsel:

S. E. E. Wright and D. H. Yoon, for the appellant

D. E. Preszler, for the respondent

Keywords: Torts, Negligence, Dog Owners’ Liability Act, Statutory Interpretation,  , Causation, Intervening Act

Facts:

The appellant, Arbour, owned a Great Dane named Zeus. On December 28, 2013, the respondent, Wilk, who at the time was in a romantic relationship with the appellant, offered to take Zeus for a walk and Mr. Arbour accepted. Wilk had walked Zeus before, but always with Arbour. During the walk, Zeus suffered a seizure, regained consciousness, came out of his collar and fell into a ditch. Wilk also slipped into the ditch when she tried to retrieve Zeus. She collided with Zeus, who bit her thumb, causing her to lose her thumb above the joint.

Wilk brought an action for damages for her injuries under s 2 of the Dog Owners’ Liability Act (DOLA).

Arbour brought a motion for summary judgment to dismiss Wilk’s action. He alleged the claim raised no genuine issue for trial as Wilk was in the possession of Zeus at the time that he bit her and, as an “owner”, she was not entitled to compensation under s 2(1) of the Act. His position was that the Act only provides for liability by an owner to “another person” i.e. a non-owner.

Wilk brought a cross-motion for summary judgment on the basis that she did not possess Zeus and that Arbour, as the owner, was liable for her injury, and requested an order that the action proceed to trial on the issue of damages only. Wilk had also sued Arbour in negligence. Zeus had health problems and had suffered seizure-like incidents in the past. Arbour typically cooked Zeus’ meals in advance and administered medication for seizures, but on the morning at issue Zeus had not been fed and had not received his medication before Wilk took him for a walk. Wilk alleged Arbour was aware that Zeus was more likely to suffer a seizure after missing a meal and that he knew she would only feed or medicate Zeus if he specifically instructed her to do so. Wilk also alleged negligence on the part of Arbour in that Zeus’ collar was too loose. Arbour claimed that the injury to Wilk was not reasonably foreseeable and sought to have her action in negligence dismissed against him as well.

The motion judge held that a person possesses a dog within the meaning of the Dog Owners’ Liability Act when that person exercises “dominion and control” over the dog, or, in other words, when the person is sovereign or stands in the shoes of the owner. He concluded Wilk was not in possession of Zeus at the relevant time and was not an owner, and held that Wilk was entitled to compensation and ordered that her action proceed on the issue of damages only.

The motion judge dismissed Wilk’s claim in negligence, having held that the injury was not reasonably foreseeable.

Issue:

(1) Whether the motion judge erred in his interpretation of the word “possess.”

(2) Whether the motion judge made a palpable and overriding error in finding that Wilk was not in possession of Zeus at the time of the incident.

(3) Whether the motion judge made a palpable and overriding error in finding that Wilk’s injuries were not reasonably foreseeable and that her action in negligence ought to be allowed to proceed.

Holding

Appeal allowed, cross-appeal dismissed.

Reasoning:

(1) Yes.

The purposive approach to statutory interpretation required the judge to first consider the ordinary meaning of the word or words being interpreted; next, the context in which the words are found and the purpose of the legislation; and then, whether the proposed interpretation produced a just and reasonable result. The motion judge followed the first step, having considered dictionary definitions of the words “possess” and “possession”. Having regard to the paucity of case law interpreting the provision in issue, he commented on legislation in the US.

The Court of Appeal noted that one principle of language and of statutory interpretation is that the meaning of a word is influenced by context. In s 1(1) of the DOLA, owner ”includes a person who possesses or harbours the dog.” The words “owner,” “possesses” and “harbours” have one thing in common – the ability to exercise control over the dog.

The word “possesses” in the definition of “owner” under the DOLA includes a person who is in physical possession and control over a dog just before it bites or attacks another person or animal.

In defining “owner” to include a person who “possesses” or “harbours” a dog, the legislature indicated an intention to impose liability on persons who had less than the full collection of rights belonging to an owner but who had attributes of ownership, possession and harbouring (providing safe shelter to the dog), where a measure of control over the dog is exercised.

The meaning ascribed to the word “possesses” by the motion judge is also not consonant with the overall purpose of the DOLA. Section 2(1) of the Act imposes liability on the owner of a dog, as defined in s 1, for damages resulting from a bite or attack by the dog on a person or domestic animal. The definition of owner in the Act is consistent with the common law strict liability doctrine of scienter, which extends liability beyond the dog’s owner to one who harbours or possesses it. However, s 2(3) of the Act does away with the common law scienter requirement that a person wishing to sue for being bitten by a dog must establish a propensity on the part of the dog to viciousness or mischief, knowledge of the dog’s propensity by the owner, or that the injury was attributable to the owner’s negligence. The owner of the dog is responsible for any damage caused by the dog biting or attacking a person or animal irrespective of whether the owner knew the dog might hurt someone or made efforts to prevent that from happening. In addition, s 4(3) of the Act provides that in certain circumstances a court may order that a dog be destroyed or impose other security measures with respect to the dog.

Ms. Wilk submitted that the legislature intended to impose responsible dog ownership and that actual physical possession voids the legislature’s stated intention regarding the enforcement of the responsibility that goes along with dog ownership.

The Court of Appeal rejected this submission and held that the legislature wished to make those who were in a position to exercise a measure of control over a dog responsible for its behaviour. The person exercising actual control over a dog is generally in the best position to avoid damage being caused by the dog to another person or animal. By requiring dominion as well as control over a dog, for a person to possess a dog, the motion judge read into the DOLA a higher standard for liability than the unambiguous plain meaning of the words required and one that was not consonant with the Act’s overall purpose of liability for those exercising control over a dog. The trial judge therefore erred in his interpretation of “a person who possesses a dog” under the DOLA.

(2) Yes. The critical time to determine possession is the time just before the incident. Ms. Wilk was the person exercising actual control of the dog just prior to the incident and she was best placed to prevent the bite that occurred.

The motion judge’s error in interpreting the word “possesses” affected his application of the word. In holding that Ms. Wilk was not in possession of the dog and therefore not an owner, the motion judge committed a palpable and overriding error. The Court of Appeal held that the word “possesses” in the definition of “owner” under the DOLA includes a person who is in physical possession and control over a dog just before it bites or attacks another person or animal. This definition accords with the definition in Black’s Law Dictionary and existing Canadian jurisprudence. By using the word “includes”, the Court of Appeal insisted that this definition is not exhaustive. The meaning of “possesses” in the DOLA must be assessed in the context of the specific circumstances of any given case. Given the variety of circumstances that may arise, a rigid definition is to be avoided.

(3) No. To establish liability for animals in negligence, special circumstances must exist. The owner of an animal cannot be negligent if the animal acts in an unexpected way and injures someone. For a person to be held negligent there must be foreseeability of harm and unreasonable conduct, or put another way, it must be found that “the owner of the particular animal, with its particular characteristics, in the particular circumstances [could] have reasonably foreseen the danger that could result in damage”.

In this case, the motion judge determined that Wilk’s injuries were not reasonably foreseeable since the risk of Wilk being bitten was not a “consequence fairly to be regarded as within the risk created” by Arbour’s alleged negligence.

Wilk’s decision to leave the safety of the path, and proceed down the icy slope to retrieve the dog, interrupted the alleged chain of causation and was an intervening act. Given the voluntary, intervening act, Arbour’s alleged negligence was not the proximate cause of Wilk’s injury.

 

Civil Endorsements

(Re) Girard, 2017 ONCA 11

[Juriansz, Watt and Roberts JJ.A.]

Counsel:

Robin Girard, in person

H. L. Krongold, amicus curiae

K. Rawluk, for the Attorney General of Ontario

J. Blackburn, for the Person in Charge of North Bay Regional Health Centre

Keywords: Endorsement, Ontario Review Board

 

D.H. v. Ferencz, 2017 ONCA 20

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

Counsel:

M. Perez, appearing as amicus curiae

J. Blackburn, for the respondent

Keywords: Endorsement, Consent and Capacity Board, Ontario Evidence Act

 

Criminal Law Cases

R. v. Jageshur, 2017 ONCA 15

 [Simmons, van Rensburg and Miller JJ.A.]

Counsel:

R. J. Posner and L. C. Beechener, for the appellant

R. Visca and B. L. Gluckman, for the respondent

Keywords: Criminal Law, Possession of Cocaine for the Purpose of Trafficking, Carrying a Weapon for a Purpose Dangerous to the Public Peace, Controlled Drugs and Substances Act, s. 5(2), Stay of Proceedings, Abuse of Process, Reverse Sting, Sentencing, Aggravating Factors, Parole Eligibility

 

R. v. Berry, 2017 ONCA 17

[MacPherson, Blair and Watt JJ.A.]

Counsel:

L. C. Beechener and E. Taché-Green, for the appellant

E. Siebenmorgen, for the respondent

Keywords: Criminal Law, Murder, Evidence, Hearsay, Ante-Mortem Statements, Juries, Charge to Jury, Sentencing, Parole Eligibility

 

R. v. Tarroza, 2017 ONCA 14

[Simmons, Pardu and Miller JJ.A.]

Counsel:

J. Wilkinson, for the appellant

B. Puddington, for the respondent

Keywords: Criminal Law, Endorsement, Possession of Cocaine for the Purpose of Trafficking, Conspiracy

 

R. v. M.W., 2017 ONCA 22

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

Counsel:

P. Copeland, for the appellant TF

E. Chozik and N. Langille, for the appellant MW

B. Jones, for the respondent

Keywords: Publication Ban, Criminal Law, Section 64(1) Youth Criminal Justice Act, Sentencing, Adult Sentence, Intensive Rehabilitative Custody Supervision Program, Presumption of Diminished Moral Blameworthiness

 

R. v. Richards, 2017 ONCA 24

 [Weiler, Pepall and Trotter JJ.A]

Counsel:

M. Halfyard, for the appellant

B. G. Puddington, for the respondent

Keywords: Endorsement, Criminal Law, Possession of Cocaine and Crack Cocaine for the Purpose of Trafficking, Confidential Informant, R. v. Debot, [1989] 2 S.C.R. 1140, Warrantless Search

 

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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