COURT OF APPEAL SUMMARIES (FEBRUARY 13-17, 2017)

Good afternoon:

Below are the summaries for this week’s civil decisions of the Court of Appeal for Ontario. Topics covered included family law, limitation periods, vexatious litigants, easements, lawyers’ professional negligence and class actions.

Perhaps the most interesting decision of the week was the class action decision, Castrillo v. Workplace Safety and Insurance Board, which touches on worker’s compensation law, intentional torts, administrative law and civil procedure. In that case, the court revived a claim against the WSIB for misfeasance in public office and negligence that had been struck by the motion judge as disclosing no reasonable cause of action. The plaintiff’s allegation is that the WSIB has a “secret policy” of wrongfully reducing benefits for non-economic loss by finding “pre-existing impairments” as including asymptomatic pre-existing conditions that did not actually have any impact on a worker’s pre-accident functioning.

The strong privative clause in section 118 of the WSIA that gives the WSIB exclusive jurisdiction and precludes the review of WSIB decisions by a court was found to be insufficient to oust the jurisdiction of the court with respect to a claim for misfeasance in public office and negligence. The court made the point that the legislature can never completely oust the court’s jurisdiction. The court also confirmed once again that the duty of good faith is not a stand-alone claim and therefore struck it as such. However, to the extent the bad faith allegations were tied to the misfeasance in public office claim, they were allowed to remain.

Have a nice family day long 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):

Castrillo v. Workplace Safety and Insurance Board, 2017 ONCA 121

Keywords: Class Actions, Labour and Employment Law, Workplace Safety and Insurance Act, Misfeasance in Public Office, Duty of Good Faith, Negligence, Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, Administrative Law, Privative Clauses, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Jurisdiction, Rules of Civil Procedure, Rules 21.01(1)(b), 21.01(3)(a)

Mihaylov v. 1165996 Ontario Inc., 2017 ONCA 116

Keywords: Real Property, Riparian Rights, Easements, Agreements, Licenses, Planning Act, R.S.O. 1970, c. 349, Planning Act, R.S.O. 1990, c. P.13

Jarbeau v McLean, 2017 ONCA 115

Keywords: Torts, Professional Negligence, Solicitors, Engineers, Lost Chance, Folland v Reardon (2003), 74 OR (3d) 688  (CA), Damages, Cost of Repairs, Diminution in Value, Costs, Offers to Settle, Rules of Civil Procedure, Rule 49.10, Juries, Perverse Verdicts

Hillman v. Letchford, 2017 ONCA 117

Keywords: Family Law, Separation Agreements, Consent Orders, Setting Aside

625805 Ontario Ltd. v. Silverwood Flooring Inc., 2017 ONCA 125

Keywords: Contracts, Joint Ventures, Unjust Enrichment, , Summary Judgment, Limitation Periods, Discoverability, Limitations Act, 2002

Doyle v. Zochem Inc., 2017 ONCA 130

Keywords: Employment Law, Wrongful Dismissal, Termination Without Cause, Duty of Good Faith, Manner of Dismissal, Discrimination, Sexual Harassment, Human Rights Code, Damages, Moral Damages, Double Recovery, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362

 Damallie v. Ping, 2017 ONCA 146

Keywords: Civil Procedure, Vexatious Litigants, Frivolous or Vexatious Proceedings, Abuse of Process, Rules of Civil Procedure, Rule 2.1.01

 

For Criminal Decisions, click here

 

Civil Decisions:

Castrillo v. Workplace Safety and Insurance Board, 2017 ONCA 121

[Hoy A.C.J.O., Lauwers and Benotto JJ.A.]

Counsel:

R. A. Fink and A. McConnell, for the appellant

N. Finkelstein, C. Zayid, and L. Stanic, for the respondent

Keywords: Class Actions, Labour and Employment Law, Workplace Safety and Insurance Act, Misfeasance in Public Office, Duty of Good Faith, Negligence, Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, Administrative Law, Privative Clauses, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Jurisdiction, Rules of Civil Procedure, Rules 21.01(1)(b), 21.01(3)(a)

Facts:

The appellant, Pietro Catrillo, commenced a proposed class action on behalf of a class of injured workers alleged to have been wrongfully denied the full extent of benefits to which they were entitled under the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, (the “WSIA” or the “Act”), by the respondent Workplace Safety and Insurance Board (“WSIB” or the “Board”).  The WSIB reduced the injured workers non-economic loss benefit (“NEL”) awards on the basis of so-called pre-existing conditions that were not true impairments and many of which were reversed on appeal. The appellant discovered these reductions were the result of the implementation of an internal WSIB document, which he calls a “secret policy”. Through it, the WSIB adopted a broader interpretation of the term, “pre-existing impairment”, to include asymptomatic pre-existing conditions, which had previously been excluded. The appellant asserts this change in interpretation was illegally made in order to save WSIB money by reducing NEL awards.

The appellant commenced proceedings under the Class Proceedings Act, 1992, S.O. 1992, c. 6. The action is pleaded in misfeasance in public office, bad faith, and negligence.

The WSIB brought a motion to strike the statement of claim, without leave to amend, under r. 21.01(1)(b), on the basis “that it discloses no reasonable cause of action”, and, under r. 21.01(3)(a), on the basis that “the court has no jurisdiction over the subject matter of the action”.

The motion judge struck the statement of claim without leave to amend under r. 21.01(1)(b) of the Rules of Civil Procedure as disclosing no reasonable cause of action. He considered the WSIB’s decisions reducing the class members’ NEL benefits to be a legal decision that falls within the four corners of the privative clause in the WSIA, and was therefore beyond court challenge.

The appellant appealed.

Issues:

1. Did the trial judge err in his conclusion to strike the cause of action of misfeasance of public office?

(a) Is the cause of action of misfeasance in public office properly pleaded?

(b) Does the privative clause in the WSIA prevent the appellant from pursuing the cause of action?

2. Did the trial judge err in his conclusion to strike the cause of action of breach of dutry of good faith?

(a) Is the cause of action of breach of duty of good faith properly pleaded?

(b) Does the privative clause in the WSIA prevent the appellant from pursuing the cause of action?

3. Did the trial judge err in his conclusion to strike the cause of action of negligence?

(a) Is the cause of action of negligence properly pleaded?

(b) Does the privative clause in the WSIA prevent the appellant from pursuing the cause of action?

Holding:

Appeal allowed.

Reasoning:

The framework for assessing whether to strike a pleading under r. 21.01(b) of the Rules of Civil Procedure on the ground that it discloses no reasonable cause of action is well settled. A claim will only be struck where it is “plain and obvious” that it has no reasonable prospect of success. In assessing this test, the Court must accept the material facts pleaded as true, but this obligation does not extend to bald conclusory statements of fact unsupported by material facts.

The motion judge’s over-arching error is that he dealt with this matter more as a summary judgment motion under r. 20 than as a motion to strike the amended statement of claim as disclosing no reasonable cause of action under r. 21.01(1)(b). He did not interpret the pleading generously, as the cases require, but instead deconstructed it for the purpose of determining whether the privative clause in the WSIA applied to oust the court’s jurisdiction. This was an error in principle.

1. Did the motion judge err in his conclusion to strike the cause of action of misfeasance in public office?

(a) Is the cause of action of misfeasance in public office properly pleaded?

Yes. The motion judge did not set out the elements of the cause of action of misfeasance in public office nor determine whether the elements were properly pleaded.

To pass scrutiny under r. 21.01(1)(b), a pleading of misfeasance in public office must allege facts capable of establishing the ingredients of the tort, in addition to the usual tort requirements of causation and damages. The plaintiff must show: first, the public official was engaged in unlawful conduct in the exercise of his or her public functions; and, second, the public official was aware that the conduct in question was unlawful and was likely to injure the plaintiff.

The pleading asserts that reducing costs was an improper purpose for WSIB’s change in the interpretation of its policy. In doing what it did, the pleading asserts that the WSIB breached its duty of good faith to the appellant and class, who “as injured workers were in a vulnerable position and dependent upon the Defendant to appropriately exercise its statutory responsibility in good faith.”

WSIB also concedes it owes “a general public law duty, to the public and to workers, to act in good faith, and not maliciously or in bad faith.” WSIB does not dispute the allegations in the pleading that it is a public body and its employees are public officials; these are constituent elements of the tort, as is the allegation that the appellant has suffered damages.

The claimant need not allege or prove actual malice in order to make out the mental element of the cause of action of misfeasance. It need only allege and prove bad faith. Although the pleading in this case does assert that WSIB’s actions were “malicious in nature”, it is really focused on WSIB’s bad faith. The assertion of bad faith arises from the allegation that WSIB made the policy change for an improper purpose and without due authority.

At this stage of the proceeding, before the defendant has pleaded and before document production and discovery, the pleading is adequate. The appellant cannot provide more particulars now because many of the necessary supporting facts would be within WSIB’s knowledge and control, and will be revealed as the process unfolds. Further, there is a line of authority supporting the proposition that a public authority cannot use its spending power in a manner inconsistent with its mandate. Therefore, the appellant has adequately pleaded the cause of action of misfeasance in public office and has provided adequate particulars of the claim.

(b) Does the privative clause in the WSIA prevent the appellant from pursuing the cause of action?

No. The privative clause in s. 118 of the WSIA does not prevent the appellant from pursuing the cause of action. The respondent made two submissions with respect to the privative clause in the WSIA. First, it asserted that: “the Act ousts the jurisdiction of the court in favour of the Board in this case.” Second, WSIB argues that the Act prevents the court from awarding the appellant incidental costs in relation to proceedings under it.

In respect of the first issue, the privative clause in the WSIA, s. 118, is strongly worded. The question of whether legislation can oust the jurisdiction of a Superior Court in a manner consistent with the constitutional principle of the rule of law was addressed by the Supreme Court in Crevier v. A.G. (Quebec) et al., [1981] 2 S.C.R. 220. In that case, the Court held that if a tribunal has acted beyond its jurisdiction in making a decision, it is not a decision at all within the meaning of the statute which defines its powers because Parliament could not have intended to clothe such a tribunal with the power to expand its statutory jurisdiction by an erroneous decision as to the scope of its own powers. Although Crevier concerned a tribunal exercising an adjudicative function, this logic applies equally to agencies that do more than adjudicate, but also make policy and regulate, like the WSIB.

The cases make it clear that, as a general principle, the legislature cannot completely oust the jurisdiction of the Superior Court, including, most pertinently, an allegation of misfeasance in public office related to its use of statutory power for an improper purpose.

Further, the motion judge’s decision that the WSIA ousts the jurisdiction of the court in favour of the Board is inconsistent with his other findings that: (1) “the WSIB’s otherwise strong privative clause would not preclude a bad faith or misfeasance in public office claim in appropriate circumstances”; and (2) “If the WSIB ‘crosses the line’ and abuses its power, it is not immune from claims filed in Court”. This determination amounts to a substantive legal decision that the appellant has no chance of success, based “on the facts of this case as pleaded”, even though the claim of misfeasance in public office has been properly pleaded. This is not an available determination on a pleadings motion.

The WSIB’s second argument is that the appellant cannot succeed on its claim for reimbursement of costs thrown away in relation to the pursuit of his appeal rights under the WSIA, because the Act forecloses an award of legal costs.  The WSIB is correct that s. 133 of the WSIA permits the WSIB to pay “reasonable travel and living expenses of, and other allowances for, (a) a worker and his or her witnesses”, among others, and that the Board has repeatedly held that “other allowances” do not include legal costs. However, the claim for the payment of incidental expenses by way of damages in this case is outside the process established by the Act altogether. If the WSIB has conducted itself in a way that takes it outside of the shelter of the privative clause, which is the appellant’s allegation in the amended statement of claim, the argument is that the Board cannot shield itself under s. 133 of the WSIA in respect of the damages claim. The fact that the damages claim is measured by costs thrown away might not negate the claim.

Therefore, the privative clause in the WSIA does not prevent the appellant from pursuing the cause of action at the pleadings stage.

3. Did the motion judge err in his conclusion to strike the cause of action for breach of the duty of good faith?

(a) Is the cause of action of breach of duty of good faith properly pleaded?

In part. Breach of the duty of good faith is not, in itself, a free standing cause of action. The elements of bad faith are therefore properly pleaded as incidental to the claim in misfeasance in public office. However, the free standing claim for relief from breach of the duty of good faith set out at paras. 51-57 of the amended statement of claim should be struck. Leave to amend is granted, but only for the appellant to better tie the bad faith allegation to the claim of misfeasance in public office, if so advised.

(b) Does the privative clause in the WSIA prevent the appellant from pursuing the cause of action?

No. Since the bad faith allegation folds into the misfeasance in public office claim, no separate analysis of the reach of the privative clause respecting bad faith is required.

3. Did the motion judge err in his conclusion to strike the cause of action of negligence?

(a) Is the cause of action of negligence properly pleaded?

Yes. The cause of action of negligence is properly pleaded to pass a rule 21.01(1)(b) analysis. In order to establish a duty of care in negligence, three elements are necessary: (1) The harm complained of must have been reasonably foreseeable; (2) There must have been sufficient proximity between the plaintiff and the defendant that it would be fair and just to impose a duty of care; and (3) There must be no residual policy reasons for declining to impose such a duty.

The first element – foreseeability – is clearly met: the WSIB knew precisely what the effects would be on the class.

The analysis of the second and third Cooper elements is both fact and policy intensive in the context of a statute. That analysis was not undertaken by the motion judge, nor by the parties. Further, the pleading refers to the relationships and to the interactions between the Board and the class members in the statutory context. The stage is set for the development of evidence relating to the application of the second and third Cooper elements. Therefore, the cause of action of negligence is properly pleaded to survive a motion to strike under rule 21.01(b).

(b) Does the privative clause in the WSIA prevent the appellant from pursuing the cause of action?

No. The application of s. 118 of the WSIA does not lead to the inextricable conclusion that the appellant’s negligence claim has no reasonable prospect of success. In fact, s. 179 supports the argument that the WSIB is open to a negligence suit in the proper circumstances. As such, the privative clause in the WSIA cannot prevent the appellant from pursuing the cause of action on a rule 21.01(1)(b) motion.

 

Mihaylov v. 1165996 Ontario Inc., 2017 ONCA 116

[Gillese, Benotto and Roberts JJ.A.]

Counsel:

S. R. Jackson, for the appellants

R. O’Neill, for the respondents

Keywords: Real Property, Riparian Rights, Easements, Agreements, Licenses, Planning Act, R.S.O. 1970, c. 349, Planning Act, R.S.O. 1990, c. P.13

Facts:

In June of 2012, Emil Mihaylov and Sofia Mihaylova (together, the “Mihaylovs” or the “Applicants”) bought waterfront property (the “Mihaylov Land”) that fronts onto Sturgeon Lake (the “Lake”) in Ontario. Sometime during the mid to late 1960s, a galvanized steel water line (the “Pipeline”) was buried beneath the Mihaylov Land so that water from the Lake could pass to an adjoining property. When the Mihaylovs acquired their property, it was subject to Instrument No. R147470, which refers to a document entitled “Water Pipe Easement” and provides that the owner of the adjoining property “shall be able to leave the said water line in its present position, and to draw water from Sturgeon Lake.

1165996 Ontario Inc. (“116”) owns the adjoining property in question (the “Abel Land”). The Abel Land is situated to the west of the Mihaylov Land and has no direct access to the Lake. 116 took title to the Abel Land on July 31, 1998. At the time of purchase, the legal description of the Abel Land included “an easement for a water line over” the Mihaylov Land. Donald Abel is the president and sole shareholder of 116.

Mr. Abel lives on the Abel Land with his family. He and his wife run a small business known as the Lakeview Cottages & General Store. The ownership of both the Mihaylov Land and the Abel Land has changed a number of times over the years. The various predecessors in title entered into three agreements relevant to these proceedings. The dates of those agreements are: October 8, 1966; May 15, 1968; and May 11, 1979.

In June 2014, the water supply to the Abel Land from the Lake was disrupted, due to a leak in the Pipeline. Without the Mihaylovs’ permission or notice, Mr. Abel went onto the Mihaylov Land and installed an above ground poly-vinyl chloride waterline (the “PVC Line”). The PVC Line ran across the Mihaylov Land. Mr. Abel said that he installed the PVC Line because he was “not able to locate, fix or replace the existing water line” due to the location of the Mihaylovs’ mobile trailer on the Mihaylov Land. Mr. Mihaylov says that Mr. Abel continues to enter onto the Mihaylov Land, without the Mihaylovs’ permission or notice, to service and maintain the PVC Line.

In early May 2015, again without the Mihaylovs’ permission, Mr. Abel excavated part of the Mihaylov Land in an apparent attempt to upgrade or repair the underground Pipeline. Apparently in order to protect the Pipeline’s foot valve, Mr. Abel also installed a PVC structure in the shallow waters of the Lake in front of the Mihaylov Land. The Applicants allege that this structure interferes with free navigation near the shoreline and their riparian rights of egress and ingress along their shoreline. Mr. Abel disputes the location of the foot valve and says that it does not interfere with free navigation near the shoreline nor with the Applicants’ riparian rights. The Applicants contend that the Pipeline is no longer a necessity for the Respondents because there is an active well on the Abel Land. The Respondents say that the shallow well on the Abel Land is not capable of supplying sufficient water to the cabins and cottages and the ability to draw water is integral to the running of their business. They also say that they have spent over $10,000 on a filtration system to purify the water drawn from the Lake.

In June of 2015, the Applicants brought an application in which they asked the court to declare, among other things, that the Respondents had no interest in their property and that the easement registered in 1979 no longer encumbers it (the “Application”). 116 and Mr. Abel are the named Respondents to the Application. The Respondents brought a counter-application seeking, among other things: a declaration that the easement registered against the title to the parties’ respective properties as Instrument No. R147470 is valid and that they have an interest in the lands upon which the Pipeline is situate; an order requiring the Mihaylovs to “remove any and all obstructions from the Water Pipe Easement”; and, an order permitting the Respondents to enter onto the Mihaylov Land for the purpose of burying a new water line “within the boundaries of the existing Water Pipe Easement” (the “Counter-Application”).

By judgment dated February 25, 2016 (the “Judgment”), the application judge dismissed the Application and granted the Counter-Application. The Judgment:

  1. declares that the easement registered against the title to the parties’ respective properties as Instrument No. 147470 is valid and the Respondents have an easement over the Mihaylov Land “in the location of the galvanized water pipe that was the subject of the 1979 [Agreement]” (at para. 2);
  1. orders the Applicants to “remove any and all obstructions from the Water Pipe Easement” (at para. 3); and
  1. orders that the Respondents are permitted to enter upon the Mihaylov Land “for the purpose of repairing the existing water line or burying a new water line within the boundaries of the Water Pipe Easement provided they shall repair any damage done to the [Mihaylov Land] as a result” (at para. 4).

Issue:

 1. Did the application judge err in finding that the 1968 Agreement and the 1979 Agreement are grants of an easement?

2. Did the application judge err in finding that although the grant of easement in the 1979 Agreement breached s. 29(2) of the 1970 Planning Act, s. 50(22) of the 1990 Planning Act applied to validate the otherwise defective easement?

3. Did the application judge err in failing to find that: (a) the easement permitted only the previously installed water Pipeline to be left in its present position; and (b) the Respondents can make repairs to the Pipeline only with the Applicants’ agreement?

4. Does the Respondents’ failure to have paid the sum of $10 per year for the easement, as required by the 1979 Agreement, render that agreement null and void?

 Holding:

Appeal allowed, in part.

 Reasoning:

  1. The 1968 Agreement is a licence and, therefore, the application judge did err in finding that it was the grant of an easement. However, the Court of Appeal agrees with the application judge that the 1979 Agreement was the grant of an easement.

(i) 1968 Agreement

Yes. An easement requires both a dominant and a servient tenement and the easement must accommodate the dominant tenement. While there is a legal description of the Mihaylov Land in the 1968 Agreement and the word “easement” is used in the third provision, those two things cannot change the fundamentally personal nature of the 1968 Agreement. The failure to identify (or even refer to) a dominant tenement is fatal to the notion that the 1968 Agreement is the grant of an easement.

(ii) 1979 Agreement

No. Unlike the earlier agreements, the 1979 Agreement is capable of amounting to the grant of an easement. It refers to the parties by their ownership of the dominant and servient tenements respectively; contains the legal descriptions of both parcels of land; describes the Pipeline as an easement to serve the Abel Land; and contains a broadly worded enurement clause that makes the 1979 Agreement binding not only on the parties but also, among other things, their “successors” – i.e., their successors in title.

Nothing in the words of grant (or otherwise in the 1979 Agreement) gives the Respondents the right to install a new pipeline or replace the existing one. Accordingly, it does not matter that the Pipeline is not described more particularly. The Respondents have the right only to have the Pipeline left in position on the Mihaylov Land, no matter what its dimensions.

Therefore, the Applicants have succeeded in part on this issue.

  1. No. The application judge decided that s. 50(22) of the 1990 Planning Act applied to validate the easement based on the parties’ agreement on certain propositions. Those propositions included that: the subdivision control provisions of the 1970 Planning Act applied to both properties by 1979; in relation to Instrument No. R147470, there was no registered plan of subdivision that provided for an easement and no consent from the local land division committee; and, at the relevant time, s. 29(2) of the 1970 Planning Act prohibited any conveyance that did not meet these (or other inapplicable) requirements, where the grantor retained an interest in the abutting land, and the grantor did retain such an interest.

The Court of Appeal agrees with the application judge, for the reasons that he gave, that s. 50(22) of the 1990 Planning Act applied to validate the easement. Accordingly, the court does not give effect to this ground of appeal.

  1. The answer to the question posed by Issue #3 is “yes”, he did so err.

(i) No Right to Bury a New Water Line

Yes. The application judge’s interpretation – which would permit the Respondents to bury a new water line on the Mihaylov Land – runs contrary to the express language of the grant. The application judge interpreted the words of grant as if they gave the dominant tenement a free-standing right to draw water from the Lake by means of a pipeline. With respect, that interpretation ignores the initial words of the grant which limits the right to having the Pipeline left in place. There is nothing in the words of the 1979 Agreement that would permit an expansion of the express words of grant to include a right on the part of the dominant tenement owners to install a new pipeline. Moreover, the circumstances existing at the time of its creation support the scope of the easement as found by the application judge. Rather, both the language of the grant and the circumstances lead to the conclusion that the right is confined to that which was expressly given: only the right to have the Pipeline left in place.

(ii) The Repair Provision

Yes. A right of repair such as that which the application judge found cannot be implied because it runs afoul of the express terms of the repair provision in the 1979 Agreement. Moreover, the application judge’s interpretation of the repair provision is based on an incorrect premise – namely, that the grant of the easement included the right to repair the Pipeline. Put another way, his interpretation assumed that the servient tenement owner gave the right of repair to the dominant tenement owner.

Accordingly, the court allows this ground of appeal.

  1. The Court of Appeal declines to decide this issue because it is, in effect, being raised for the first time on appeal.

In the result, all but paragraph 5 of the Judgement is set aside and the following declaration is madet:

  1. the easement granted in the 1979 Agreement and registered against the parties’ respective properties as Instrument No. R147470 is valid;
  1. the scope of the easement is limited to leaving the existing Pipeline in its present position on the Mihaylov Land;
  1. the Respondents may make only those repairs to the Pipeline which the Applicants agree to, in advance; and
  1. if the Applicants permit the Respondents to enter onto the Mihaylov Land to make repairs to the Pipeline, the Respondents shall repair any damage done to the Mihaylov Land as a result of those repairs.

In addition, there is an order restraining and enjoining the Respondents from entering onto the Mihaylov Land for any purpose other than with the Applicants’ express agreement.

Jarbeau v McLean, 2017 ONCA 115

[Simmons, LaForme and Pardu JJ.A.]

Keywords: Torts, Professional Negligence, Solicitors, Engineers, Lost Chance, Folland v Reardon (2003), 74 OR (3d) 688  (CA), Damages, Cost of Repairs, Diminution in Value, Costs, Offers to Settle, Rules of Civil Procedure, Rule 49.10, Juries, Perverse Verdicts

Counsel:

P. J. Pape, S. Chaudhury and J. H. Nasseri, for the appellant

M. H. Arnold, C. G. Paliare and A. Young, for the respondents

Facts:

The respondents, Darren and Lillian Jarbeau, purchased a leaky home from Thermolith Homes Limited (Thermolith). The home did not meet the standards set by Ontario’s building code. The engineer hired by Thermolith negligently certified the design and construction of the home.

The lawyer hired by the Jarbeaus to sue those responsible for building and selling them a defective home was also negligent. Their lawyer, Ian McLean, sued Thermolith, the City of North Bay and Tarion Warranty Corporation, but he failed to sue the engineer within the limitation period. McLean negligently advised the Jarbeaus that they did not have a cause of action against the engineer because they did not have a contract with him.

The Jarbeaus settled the first action. They then sued McLean. The claim pleaded against McLean was that but for his negligence, the Jarbeaus would have successfully sued the engineer and recovered all of their losses from him. On the eve of trial, McLean admitted his advice was negligent.

In light of McLean’s admission, the trial focused on whether his negligence caused the Jarbeaus any damages. Following a trial within a trial of the cause of action that could have been brought against the engineer, a jury found in the Jarbeaus’ favour. The jury assessed the cost to repair the home at $433,000 and the diminution in value of the home because of the defects at $265,000. The jury then deducted $75,000 the Jarbeaus received in the settlement of the first action, for a net amount of $190,000 for the diminution in value claim.

The trial judge characterized the cost of repair finding as perverse and granted judgment for $190,000, representing the lesser of the cost to repair and the diminution of value. He slashed over $100,000 from the costs claimed by the Jarbeaus, even though they had bettered a settlement offer before trial, explaining that the jury’s diminution in value finding was also perverse.

McLean appealed from the judgment on two grounds: (1) that the trial judge erred in his instructions on causation by failing to instruct the jury that the Jarbeaus’ claim should be framed as a claim for a loss of the chance to have the engineer present at the settlement table in the first action. This would entitle the Jarbeaus to damages in proportion to the probability that their action against the engineer would have succeeded – an amount that McLean submits is necessarily less than 100%.  And (2) that the award for diminution in value was perverse, as the jury must have attributed zero value to the home and concluded that only the land had value, despite the absence of evidence to support this conclusion.

The Jarbeaus cross-appealed on three grounds: (1) that neither of the jury’s assessments of damages was perverse and the trial judge ought to have granted judgment for the cost to rebuild the home rather than diminution of the value of the home due to the defects; (2) that the trial judge erred by refusing to allow the Jarbeaus to advance a claim for legal costs incurred in the first action as damages in the proceeding against McLean on the ground it was not pleaded in the statement of claim; (3) that the trial judge erred by reducing the Jarbeaus’ claim for legal costs in circumstances where they recovered judgment exceeding the amount for which they offered to settle pursuant to r. 49.10.

McLean asked the Court of Appeal to reduce the damages to $50,000 or $60,000 if the Court agreed that the jury’s assessment of damages on both diminution in value and cost to repair was perverse. Alternatively, if the Court of Appeal agreed that the trial judge should have framed the Jarbeaus’ claim as one for the loss of a chance, McLean asked that the Court reduce the damages by 10-20%, which would reflect the contingency that an action against the engineer may not have succeeded or may have settled for an amount less than the total loss.

The Jarbeaus asked that the Court of Appeal grant judgment for the costs to repair or rebuild, without deducting the amount recovered from the parties in the first action because those funds were consumed almost entirely by legal fees. They also asked that the Court award them their trial costs pursuant to r 49.10.

Issue:

(1) Whether the trial judge erred in his instructions on causation.

(2) Whether the trial judge erred in his assessment of damages.

(3) Whether the trial judge erred with respect to his costs award.

Holding:

Appeal dismissed, cross-appeal allowed.

Reasoning:

(1) No. McLean argued that the trial judge erred in his instructions on causation and that the trial judge should have structured the Jarbeaus’ claim as one for the loss of the chance to successfully sue the engineer or for the loss of the chance of having the engineer at the settlement table. The Court of Appeal disagreed. The “but for” test set out in the trial judge’s charge was the appropriate test for causation in negligence in all but rare cases. The plaintiff must show on a balance of probabilities that “but for” the defendant’s negligent act, the injury would not have occurred. Inherent in the phrase “but for” is the requirement that the defendant’s negligence was necessary to bring about the injury i.e. the injury would not have occurred without the defendant’s negligence. This was a factual inquiry. If the plaintiff does not establish this on a balance of probabilities, having regard to all the evidence, her action against the defendant fails.

McLean’s submission misunderstood the nature of the Jarbeaus’ claim. If the Jarbeaus’ claim against the engineer had been litigated, it would have been assessed on a balance of probabilities: but for the engineer’s negligence, would they have suffered the loss? If they persuaded a judge or jury on this standard, they would have been entitled to full recovery. McLean’s negligent advice precluded them from litigating that claim.

The Jarbeaus were able to reproduce the evidence they would have led at that unrealized trial through a trial within a trial. In doing so, they were able to prove that they would have recovered 100% of their loss against the engineer.

In some cases of solicitor’s negligence, where it is practically impossible to determine what would have happened but for the solicitor’s negligent conduct, courts have allowed a plaintiff to advance a claim for the loss of the chance to recover.

McLean referred to two cases – Kitchen v Royal Air Force Association [1958] 2 All ER 241 (CA), and Henderson v Hagblom, 2003 SKCA 40, leave to appeal refused [2003] SCCA No 278. In Kitchen, the plaintiff sued lawyers who missed a limitation period. There was a “trial within a trial” to determine what would have happened if the plaintiff had been able to sue. Lord Evershed did not accept that it must be “always all for the plaintiff or nothing” and posited three potential scenarios. If it is plain that an action could have been brought, and if it had been brought that it must have succeeded, the damaged plaintiff would recover the full amount of the damages lost by the failure to bring the action originally. If the plaintiff never had a cause of action, and there was no case which the plaintiff could reasonably ever have formulated, then it is equally plain that the answer is that she can get nothing save nominal damages for the solicitors’ negligence. There may be cases where it would be impossible to try the “action within the action”. It may be that for some reason the action for negligence was not brought until e.g. 20 years after the event and in the process of time the material witnesses or many of them may have died or become out of reach for the purpose of being called to give evidence. In such a case, assuming that the plaintiff has established negligence, the court has to determine what the plaintiff has lost by that negligence. The question is whether the plaintiff has lost some right of value – some chose in action of reality and substance. In such a case, it may be that its value is not easy to determine, but it is the duty of the court to determine that value as best it can.

In Hagblom, Hagblom was sued for negligent construction of a chimney in a home destroyed by fire. His lawyer was negligent in defending him. The Saskatchewan Court of Appeal had to decide whether to allow Hagblom to advance a claim that he lost the chance to successfully defend the homeowners’ lawsuit by reason of the lawyer’s negligence. The Court held that it was not feasible to send the case back for trial within a trial. The Court conducted a loss of chance analysis of Hagblom’s chances of success on the underlying action. While Hagblom had a potentially winnable case, he could not be assured of success because the cause of the fire remained a mystery even after examining the expert evidence. The court assessed the chances that Hagblom would have successfully defeated the homeowners’ action at 75% and set his damages at that percentage.

McLean also relied on Folland v Reardon (2003), 74 OR (3d) 688  (CA), in which Folland claimed he would have been acquitted of a criminal offence, but for the negligence of defence counsel. In Folland, the Court of Appeal discussed the elements of a cause of action for breach of contract based on solicitor’s negligence. In most cases of solicitor’s negligence, liability rests on both a tort and contractual basis. The imposition of liability grounded in the loss of a chance of avoiding a harm or gaining a benefit is controversial in tort law, particularly where the harm alleged is not purely economic. Whatever the scope of the lost chance analysis in fixing liability for tort claims based on personal injuries, lost chance is well recognized as a basis for assessing damages in contract. In contract, proof of damage is not part of the liability inquiry. If a defendant breaches his contract with the plaintiff and as a result the plaintiff loses the opportunity to gain a benefit or avoid harm, that lost opportunity may be compensable.

A plaintiff can recover damages for lost chance in an action for breach of contract if four criteria are met: (a) the plaintiff must establish on the balance of probabilities that but for the defendants’ wrongful conduct, the plaintiff had a chance to obtain a benefit or avoid a loss; (b) the plaintiff must show that the chance lost was sufficiently real and significant to rise above mere speculation; (c) the plaintiff must demonstrate that the outcome, that is, whether the plaintiff would have avoided the loss or made the gain, depended on someone or something other than the plaintiff himself or herself; (d) the plaintiff must show that the lost chance had some practical value.

Where a plaintiff in a tort action arising out of solicitor’s negligence can establish on a balance of probabilities that but for the negligence he or she would have avoided the loss, he or she should be fully compensated for that loss. Where a plaintiff can only establish that but for the solicitor’s negligence, he or she lost a chance to avoid a loss, a claim for breach of contract may permit recovery for the value of that chance.

A plaintiff in a solicitor’s negligence case can fully recover her loss in appropriate circumstances. None of the cases cited in argument involved a defendant attempting to reframe a plaintiff’s case as a loss of chance, where the loss the plaintiff claims is the opportunity to successfully litigate or settle a claim in full and the “trial within a trial” approach allows the plaintiff to test that claim. In such circumstances, the plaintiff is entitled to advance the trial within a trial on the balance of probabilities standard, and to fully recover if that standard is met.

The Jarbeaus were entitled to frame their case on an all-or-nothing basis by asserting that the engineer was negligent, and that they would have made full recovery had the engineer been sued. The trial judge’s instructions collapsed treatment of McLean’s negligence and the engineer’s negligence, and were consistent with the notion of a trial within a trial in a solicitor’s negligence case, particularly where the lawyer’s negligence is admitted.

A jury could, in its assessment of damages, properly be invited to consider future contingencies in assessing the losses that properly flow from the lawyer’s negligence. For example, if a plaintiff successfully recovered judgment against an at-fault party, but there was no possibility of collection of that judgment, the plaintiff may recover nominal damages against a negligent solicitor who caused the loss of the opportunity to sue the at-fault party.

The trial was focused on whether or not the Jarbeaus would have obtained judgment against the engineer if they had sued him. There was a “trial within a trial” on the issue of the engineer’s negligence. The jury found that the engineer failed to meet the standard of care expected of a reasonable and competent professional engineer, and but for his negligence and McLean’s negligence, the Jarbeaus would not have suffered the harm.  Given the jury’s finding regarding the engineer’s negligence and McLean’s admission of negligence in advising the Jarbeaus not to sue the engineer, it is plain that an action could have been brought against the engineer and would have succeeded. At trial, the engineer admitted he had erred.

(2) Yes.

(a) Diminution in value of the home

To calculate diminution of value in a home, the trier of fact must first calculate the difference between the fair market value of the home assuming no defects and the value of the home with its defects.

The Court of Appeal held that the jury’s conclusion that the diminution of value of the property is not so plainly unreasonable and unjust as to satisfy the stringent test for setting aside a jury verdict as perverse – that no jury reviewing the evidence as a whole and acting judicially could have come to that conclusion.

(b) Cost to repair the home

On the evidence before the jury, there was a basis for the jury to assess the cost to repair and related costs at $433,000. The jury’s assessment of the cost to repair was not unreasonable or unjust. The trial judge erred when he characterized the assessment as perverse.

(c) Should damages be assessed on a diminution of value or cost to repair basis?

The damages awarded to a plaintiff should put him or her in the same position as they would have been in had they not sustained the wrong for which they are receiving compensation or reparation. The Jarbeaus purchased a new home in 2007. They ended up with a home with many deficiencies that is not building code compliant and should never have been built. The fairest measure of damages is that which would provide the Jarbeaus with what they bargained for – a home free of defects. Accepting the jury’s assessment that the home itself had no value, damages should not be awarded on the lesser diminution in value basis because this does not take into account the difficulty of selling this home and the cost of demolition, if the property were to be sold as vacant land.

There was no issue of a windfall or betterment if the cost to repair is awarded. Many courts have concluded that the measure of damages may properly be fixed as the cost to repair the deficiencies in a home or to rebuild a home.

The Court of Appeal set aside the verdict entered by the trial judge, and substituted judgment in favour of the Jarbeaus for $433,000, as assessed by the jury.

The Court of Appeal did not deduct the $75,000 recovered by the Jarbeaus in settling the first action. Of that, $25,000 represented an undertaking to repair the roof, which was ultimately of no value to the Jarbeaus. The remaining $50,000 was consumed almost entirely by legal fees. The Jarbeaus settled because they had concerns about their ability to collect from the builder.

(3) Yes.

Rule 49.10(1) provides that where a plaintiff makes an offer to settle at least seven days before the start of the trial and obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs up to the date the plaintiff served the offer to settle and substantial indemnity costs thereafter, unless the court orders otherwise.

The Court noted that the trial judge’s criticisms of the Jarbeaus’ counsel were largely unjustified. The trial judge refused to allow the Jarbeaus to advance a claim for the costs of the first action on the ground that it was not pleaded. A claim for those costs was in fact made in the statement of claim, and particulars of the amounts were given on discovery and in answer to undertakings. The trial judge was repeatedly critical of the Jarbeaus’ counsel for attempting to advance an un-pleaded claim. While there were some slips by counsel, they were modest, and did not warrant penalizing the Jarbeaus to such a significant extent.

Whether a jury verdict is or is not perverse or unreasonable is a matter for an appellate court, not an issue to be dealt with by the trial judge: Lang v McKenna, [2000] OJ No 2983 at para 24. The jury’s assessments of damages were not perverse. There was a significant punitive element in the trial judge’s reduction of costs, and that punitive element was not warranted.

The Court of Appeal concluded that in any event, the trial judge erred by failing to give effect to the purposes of r 49.10(1). The rule is intended as an incentive to settlement, and to ensure that the objective of the rule is fulfilled, the rule should be applied in the vast majority of cases.

While proportionality might affect the amount of costs, in circumstances like these, proportionality should not be used to deprive a plaintiff bettering his or her offer of the scale of costs to which r 49.10(1) entitles them – substantial indemnity costs from the date of the offer.

The Court of Appeal set aside the trial judge’s decision on costs, and substituted an award of $231,000, in favour of the Jarbeaus.

Hillman v. Letchford, 2017 ONCA 117

[Weiler, Benotto and Roberts JJ.A.]

Counsel:

Dawn Hillman, in person

Ian Letchford, in person

Keywords: Family Law, Separation Agreements, Consent Orders, Setting Aside

Facts:

The parties were in a common-law relationship from 1985 to 1999. They have two adult children. They moved from Canada to England in 1991 and then to Ireland in 1997. The appellant worked at various jobs while the parties lived in Canada. After they left Canada, she did not work outside the home. The respondent worked as a Managing Director at CIBC. He was terminated from CIBC in 2002 and later began receiving pension pay, as well as income from a new job.

When the parties separated, Irish law did not recognize common-law relationships. The appellant was not entitled to spousal support and was only entitled to the share of the jointly-held property for which she had made a direct financial contribution. On August 25, 1999, the parties entered into a consent agreement that included terms for custody and access, temporary child support (until an action could be brought in Canada), a share in the property and money. The agreement was incorporated into a consent order.

The appellant then moved to Canada and issued a statement of claim seeking custody, child support, spousal support and interests in the respondent’s property based on unjust enrichment, implied trust and constructive trust. The respondent paid child support in the interim.

In 2006, the appellant sought and obtained an order allowing her to question a CIBC representative regarding the respondent’s remuneration. Despite obtaining the order, the appellant did not conduct the questioning.

The matter was scheduled for trial in 2007. On February 6, 2006, the parties entered into final Minutes of Settlement which provided that the respondent would pay the appellant $201,814 as lump-sum child support for the children who were then 17 and 14. In addition, the respondent would pay the appellant $200,000 in settlement of all other claims, including the property claims.

On December 19, 2011, nearly six years later, the appellant brought an application to set aside the 2006 agreement and resulting consent order. She sought a new trial on the statement of claim that would have gone to trial in 2007.

The application resulted in a 13-day trial. Both parties represented themselves. The trial judge made a number of findings, four of which are the basis for this appeal.

Issues:

  1. Did the Trial Judge err in deciding that neither party was under duress or unconscionable circumstances at the time of the minutes of settlement?
  2. Did the Trial Judge err in deciding that the appellant neglected to pursue disclosure from the CIBC although she obtained an order permitting her to do so?
  3. Did the Trial Judge err in deciding that the application was brought almost six years after the agreement and there was a lack of reasonable diligence on the part of the appellant?
  4. Did the Trial Judge err in deciding that the non-disclosure was not a material inducement to entering the agreement and the non-disclosure would not have materially affected the negotiations?
  5. Did the Trial Judge err in her determination of the fairness of the agreement?

Holding: Appeal dismissed.

Reasoning:

  1. No. The appellant was represented by counsel and had been provided with a report from PricewaterhouseCoopers which outlined the financial affairs of the respondent. There was no evidence that she was under duress and the trial judge’s conclusions in this regard are entitled to deference.
  1. No. While it is correct that the respondent must prove the value of his assets, the appellant did apply for an order to question a representative of the CIBC and then failed to follow through with it. This factor was correctly taken into account by the trial judge. The Court noted in any event that the trial judge acknowledged that “[t]his factor carries less weight than the others”.
  1. No. There was no explanation on the record as to why she did not seek to inquire into the respondent’s assets and bring the application earlier. There was no basis to find collusion. It was therefore open to the trial judge to find a lack of reasonable diligence.
  1. No. The trial judge determined that the Spanish property was irrelevant because it was purchased after separation. The respondent’s interest in the property could only be relevant to his income for child and spousal support purposes. However, there was no evidence that the respondent ever received any rental income from the property, so it could not have impacted the settlement. Similarly, the trial judge was not satisfied that the appellant would not have settled had the stock options been disclosed.
  1. No. The detailed and thorough analysis of the fairness of the agreement by the trial judge reflects no error.

625805 Ontario Ltd. v. Silverwood Flooring Inc., 2017 ONCA 125

[MacPherson, Hourigan and Miller JJ.A.]

Counsel:

B. Teplitsky, for the appellant

I. Andriessen, for the respondents

Keywords: Contracts, Joint Ventures, Unjust Enrichment, , Summary Judgment, Limitation Periods, Discoverability, Limitations Act, 2002

Facts:

On November 16, 2009, Henry Smith and his son Carl Smith, homebuilders operating through 625805 Ontario Ltd. (“625”), entered into a Joint Venture Agreement (“JVA”) with Tamar Royt, who was in the business of hardwood supply through Silverwood Flooring Inc. (“Silverwood”). The stated purpose of the JVA was: “to combine their efforts and co-operate for the purposes of selling and installing hardwood flooring to low rise developers and selling hardwood flooring products to high rise development projects.”

In or about March 2010, the Smiths secured a significant customer for the joint venture, M5V Condominiums Project (the “M5V Project”).  The Smiths terminated the joint venture in April 2010. The Royt Group accepted the termination. However, the former partners to the JVA could not agree on their respective obligations and benefits from M5V Project.

On December 9, 2010, the Smiths commenced an application against Ms. Royt, 2219970 Ontario Inc., and an independent company potentially involved in hardwood flooring supplies for the M5V Project. The Smiths did not name Silverwood as a defendant in the application because it was not a party to the JVA and the Smiths claimed they had no knowledge, at the time of commencing the application, that Silverwood supplied hardwood flooring on the M5V Project.

On January 20, 2012 based on Ms. Royt’s answers during cross-examination on an affidavit, the Smiths learned that Silverwood had supplied the hardwood flooring for the M5V Project. The Smiths did not add Silverwood as a respondent in their application at this juncture. Subsequent, settlement discussions between the parties proved unsuccessful.

On September 9, 2015, 625 issued a statement of claim against Silverwood, Ms. Royt and John Doe for unjust enrichment. Silverwood and Ms. Royt moved for summary judgment dismissing the action on the basis that the relevant limitation period had expired. The motion judge granted summary judgment and dismissed the action.

Issues:

Did the motion judge err by concluding that the appellant’s action was commenced outside the relevant two-year limitation period?

Holding:

Appeal allowed.

Reasoning:

The appellant, 625, acknowledged that the motion judge was correct in that it became aware on January 20, 2012, that Silverwood had supplied the hardwood flooring for the M5V Project; thus, its statement of claim was prima facie outside the applicable two-year limitation period in the Limitations Act, 2002.

However, the appellant argued that this prima facie conclusion should not stand because Ms. Royt lied about the profits made on the M5V Project. The Court of Appeal stated that in the face of this allegation, two features of the respondent’s position drew the attention of the Court. First, the respondents did not file any materials – for example, a reply affidavit by Ms. Royt – countering the appellant’s allegation of lying. Second, in cross-examination on her affidavit filed in the Smiths’ original application, Ms. Royt testified that proceeds of the M5V Project were not “as much as the 2 percent management fee” and refused to answer any further questions about the profitability of the M5V Project.

The Court disagreed with the motion judge’s reasoning that the plaintiff “knew or ought to have known that it sustained some damage … in that monies were retained by [Silverwood] that the [plaintiff] considered to belong to the JV.” Although Ms. Royt admitted that the M5V Project made a profit, she described the profit as “[not] as much as the 2 percent management fee” in her cross-examination.

Therefore, this was not a case where a party knows that it has suffered a loss but does not know the extent of the loss: see, for example, Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156. Rather, it was not unreasonable for the appellant to think that it had not suffered any damage in light of the two percent management fee to which Ms. Royt was entitled before profits could be distributed to the joint venture.

In these circumstances, the appellant discovered the potential damage that grounded its unjust enrichment claim when Ms. Royt told Henry Smith in 2015 that Silverwood made a profit of at least $200,000 on the M5V Project. It follows that the appellant’s action, commenced on September 9, 2015, was commenced within the two-year limitation period.

Doyle v. Zochem Inc., 2017 ONCA 130

[Weiler, Pepall and Trotter JJ.A.]

Counsel:

M. A. Smith and R. C. Leck, for the appellants
A. Assuras, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Termination Without Cause, Duty of Good Faith, Manner of Dismissal, Discrimination, Sexual Harassment, Human Rights Code, Damages, Moral Damages, Double Recovery, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362

Facts:

Doyle, worked for the respondent, Zochem, a company with about 50 employees that produces zinc oxide, as a plant supervisor and health and safety coordinator. In order to perform her job, Doyle needed the cooperation of Rogers, the plant maintenance manager. Zochem considered him to be irreplaceable. However, Rogers sexually harassed Doyle through her employment with Zochem.

In the period leading up to Doyle’s termination, the plant where she worked was being prepared for sale. At a July 14, 2011 production meeting, during which Doyle raised legitimate safety concerns, Rogers and another co-worker, who were aware that Doyle was to be terminated, felt free to ignore the safety issues she raised and demeaned and belittled her in front of the others. She left the meeting in tears.

Doyle, unaware that Wrench (the assistant general manager) was going to terminate her and that the termination letter was already in the making, turned to Wrench and made a complaint of sexual harassment. Wrench did a “cursory” investigation of the complaint and heard from Rogers, but did not give Doyle an opportunity to respond.

Doyle was terminated without cause on July 19, 2011. Doyle brought a claim against her employer for her dismissal.

The trial judge ordered the appellant, Zochem, to pay $60,000 in moral damages for the breach of its implied contractual obligation of good faith in the manner of dismissal of its employee, Doyle.  In addition to awarding moral damages, the trial judge held that Doyle was entitled to general damages of ten months’ salary in lieu of notice of termination and $25,000 damages for her sexual harassment claim under the Human Rights Code, R.S.O. 1990, c. H.19 (the Code).

Zochem appealed the trial judge’s decision to award moral damages.

Issue:

  • Should the quantum of moral damages be reduced on the basis that the trial judge took into account irrelevant considerations?
  • Was the awarding of moral damages, taking into consideration sexual harassment, and Human Rights Code damages for infringing Doyle’s right to freedom from harassment, double recovery?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The quantum of moral damages ought not to be reduced on the basis that the trial judge took into account irrelevant considerations.

There is an obligation of good faith in the manner of dismissal of an employee and damages are available where an employer engages in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. Initially the award, now known as moral damages, involved compensation through an addition to the period of notice. However, in Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362, the Court essentially did away with the distinction between aggravated damages and moral damages and held that these damages should be recognized through a fixed monetary award rather than through an extension of the notice period.

The question of moral damages is a fact specific exercise. The factors relevant to an award of moral damages are not limited to the examples in Honda and Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701. Nor, is the time frame limited to the moment of dismissal. Pre and post termination conduct may be considered in an award for moral damages, so long as it is “a component of the manner of dismissal”.

The trial judge referenced some considerations that were irrelevant to an assessment of moral damages. For example, the trial judge commented that the dismissal arose, in part, because the company was getting ready to be sold; the General Manager did not select the “most logical choice for his successor”, a person who would not have terminated Doyle; Zochem terminated at least four key employees; and the appellant planned the dismissals of two employees well in advance. These business considerations could not form the basis of a moral damages award.

However, the trial judge also properly considered relevant factors to an award of moral damages. For example, Wrench recruited employees to “dig up dirt” to discredit Doyle in order to justify her termination and created performance reviews to bootstrap the pre-existing determination to terminate Doyle. The trial judge found that Wrench’s dealings with Doyle were “completely disingenuous”. Wrench assured Doyle that her job was not in jeopardy when in fact the decision to terminate had already been made and the termination letter was probably already in the making. After the termination decision had already been made, Wrench’s response to Doyle’s sexual harassment complaint was insensitive to the point of verging on cruel. Further, when Doyle was terminated, her car was brought around without her permission. Her car keys had been taken from her purse in order to do so. Although the letter of termination presented with a full release contained a sentence suggesting that Doyle seek legal advice before accepting the benefits offered, she was pressured to immediately sign the release without it.

The appellant further submitted that the trial judge’s consideration of the meeting on July 14, 2011 and the subsequent sexual harassment investigation were unrelated to the manner of termination, in part, because the decision to terminate Doyle had already been made. The Court rejected this submission. It is not just conduct at the moment of termination that may be considered, but conduct that is a component of the manner of dismissal. Given that the decision to dismiss had already been made, Wrench’s cursory investigation and attendant dismissal of Doyle’s complaint of sexual harassment are proper considerations respecting moral damages.

Furthermore, the Court rejected the appellant’s argument that the denial of short term disability benefits, while temporally related, is a distinct decision made outside the manner of termination. The employer’s denial of short term disability benefits without adequate evidence has been considered a breach of the good faith obligation. Therefore, the trial judge rightfully considered this factor in assessing moral damages.

Regardless of the trial judge’s error in considering some irrelevant factors, the trial judge’s award was nonetheless justified. It is trite law that a trial judge’s reasons must be read as a whole and in context. In particular, the assessment of damages “… is not the equivalent of a mathematical equation in which an error in a sub-calculation produces an error in the outcome. In this case, there is evidence of untruthful, misleading or unduly insensitive conduct. Therefore, the trial judge’s assessment of moral damages is not diminished by the lesser irrelevant considerations he did take into account.

(2) No. The trial judge’s award of both moral damages, taking into consideration sexual harassment, and Human Rights Code damages for infringing Doyle’s right to freedom from harassment, was not double recovery. While there is an overlap of conduct, the conduct relating to the award of moral damages and that relating to Code damages for sexual harassment is not identical. Moral damages are awarded as a result of the manner of dismissal, where the employer engages in conduct during the course of dismissal that is unfair or is in bad faith, that caused mental distress. In contrast, Code damages are remedial, not punitive in nature, and compensate for the intrinsic value of the infringement of rights under the Code. Such damages are compensation for loss of the right to be free from discrimination and the experience of victimization. Where, as here, the awards in question vindicate different interests in law, there will be no overlap in the damages awarded although the same conduct is considered. Given that the awards in question vindicate different interests in law, the trial judge did not err in awarding both Code damages and moral damages.

 Damallie v. Ping, 2017 ONCA 146

[MacFarland, van Rensburg and Huscroft JJ.A.]

Counsel:

J. Lauwers for the defendant/respondent

C. Damallie, acting in person

Keywords: Civil Procedure, Vexatious Litigants, Frivolous or Vexatious Proceedings, Abuse of Process, Rules of Civil Procedure, Rule 2.1.01

Facts:

This matter had its genesis in a Small Claims Court action brought by Mr. Damallie against Dr. Peony Ping. He alleged professional negligence in his dental treatment at the hands of Dr. Ping in February, 2012. His action was dismissed by Deputy Judge Shapiro on July 4, 2013.

On January 8, 2014, Mr. Damallie brought a motion before Sachs J., sitting as a single judge of the Divisional Court for an extension of time to file a Notice of Appeal from the decision of the Deputy Judge. His motion was dismissed. Sachs J. found for reasons she gave, that the claim was without merit.

On January 10, 2014, Mr. Damallie filed a notice of motion to set aside the order of Sachs J. On September 24, 2014 a three-judge panel of the Divisional Court dismissed that motion.

On October 14, 2014 Mr. Damallie filed a notice of motion seeking leave to appeal to the Court of Appeal from the decision of the Divisional Court. He did not perfect his motion for leave within the time requirements of the Rules and since that time he has brought numerous motions seeking extensions of time to bring his motion for leave and when refused, further motions to review the orders of the single judges of the Court of Appeal before a panel.

He sought an extension of time before Weiler J.A. on April 8, 2015, and his motion was dismissed. He then sought to set aside Weiler J.A.’s order. He again failed to comply with the time requirements and appeared before Roberts J.A. on July 29, 2015, seeking an extension of time to review the order of Weiler J.A. and again, his motion was dismissed.

In seeking to review Roberts J.A’s order, again he missed time requirements and his motion was dismissed for delay by the Registrar. He sought to set aside the Registrar’s order before Hourigan J.A. on February 17, 2016. Again his motion was dismissed.

There have been further orders and further appearances. A motion seeking an extension of time to set aside the order of Hourigan J.A. was dismissed by Hoy A.C.J.O. on April 14, 2016.

Further motions that were outstanding came on for hearing before Gillese J.A. on July 27, 2016. At that time, she issued a stay order covering all pending proceedings pending a referral to a panel of this court.

Issue: Are the motions frivolous, vexatious and an abuse of the process of the court?

Holding: Motions Dismissed.

Reasoning: Yes. The motions are frivolous, vexatious and an abuse of the process of the court.

The court found that Mr. Damallie simply does not accept the findings of the trial judge, the four judges of the Divisional Court and the many judges of the Court of Appeal that his action against Dr. Ping is without merit and has no chance of success. He continues to bring motions one after another, often without serving Dr. Ping or her counsel as he is required to do.

 

Criminal Decisions:

R. v. Al-Shimmary (Publication Ban), 2017 ONCA 122

[Hoy A.C.J.O., Doherty and Miller JJ.A.]

Counsel:

David Finley, for the appellant

Brian Eberdt, for the respondent

Keywords: Publication Ban, Endorsement, Criminal Law, Sexual Interference, Sentencing, Denunciation, Deterrence

R. v. Karaisaridis, 2017 ONCA 127

[MacPherson, Rouleau and Brown JJ.A.]

Counsel:

Anastasios Karaisaridis, acting in person

Delmar Doucette, duty counsel

Yael Pressman, for the respondent

Keywords: Endorsement, Criminal Law, Possession of Narcotics, Trafficking, Sentencing

R. v. Khan(Publication Ban), 2017 ONCA 114

[Doherty, LaForme, Pepall, Hourigan & Miller JJ.A.]

Counsel:

John McInnes, for the appellant

David Butt and Maija Martin, for the respondent

Matthew Gourlay and Maya Borooah for the intervener Criminal Lawyers’ Association

Keywords: Publication Ban, Criminal Law, Sexual Assault, Evidence, Admissibility of Statement

R. v. Lin, 2017 ONCA 124

[Hoy A.C.J.O., Doherty and Miller JJ.A.]

Counsel:

Tung-Chieh Wu, for the appellant

Andrew Cappell, for the respondent

Keywords: Endorsement, Criminal Law, Assault, Search Incident to Arrest, Canadian Charter of Rights and Freedoms, Evidence, Admissibility, Procedural Fairness

R. v. Williams (Publication Ban), 2017 ONCA 126

[MacPherson, Juriansz and Rouleau JJ.A.]

Counsel:

Wayne Leroy Williams, acting in person

Enzo Rondinelli, duty counsel

Holly Loubert, for the Crown

Keywords: Endorsement, Publication Ban, Criminal Law, Sexual Assault, Ineffective Assistance of Counsel

United States v. A.B. (Publication Ban), 2017 ONCA 119

[Sharpe, Rouleau and Benotto JJ.A.]

Counsel:

Nancy Dennison, for the respondent

Julie Santarossa, for the appellant

Keywords: Endorsement, Publication Ban, Criminal Law, Extradition, Judicial Review, Canadian Charter of Rights and Freedoms, s. 7, s. 6(1)

R. v. Dyce (Publication Ban), 2017 ONCA 123

[Juriansz J.A.]

Counsel:

Wayne Dyce, acting in person

Nader R. Hasan, duty counsel

Michelle Campbell, for the Crown

Keywords: Publication Ban, Criminal Law, Criminal Code, s. 684, Jury Instructions, Propensity Evidence, Mistaken Belief, Credibility, Burden of Proof

 

R. v. D.S.(Publication Ban), 2017 ONCA 131

[Simmons, Pardu and Miller JJ.A.]

Counsel:

Misha Feldmann, for the appellant

Michael Perlin, for the respondent

Keywords: Publication Ban, Criminal Law, Sexual Assault, Assault with a Weapon, Assault Causing Bodily Harm, Domestic Abuse, Jury Instructions, Rule in Browne v. Dunn

R. v. L.F.P. (Publication Ban) 2017 ONCA 132

The text of this decision is subject to a statutory non-publication order. Full text of the reasons may be obtained at the Court of Appeal Registry Office.

R. v. McKenzie (Publication Ban), 2017 ONCA 128

[Weiler, Pepall and Trotter JJ.A.]

Counsel:

Eva Taché-Green, for the appellant

Kathleen E. Farrell, for the respondent

Keywords: Publication Ban, Criminal Law, Sexual Assault, Sentencing, Deterrence, Denunciation Immigration Consequences, Immigration and Refugee Protection Act, S.C. 2001, c. 27

R. v. Osborne, 2017 ONCA 129

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

Counsel:

Clayton C. Ruby and Annamaria Enenajor, for the appellant

Grace Choi, for the respondent

Keywords: Criminal Law, First Degree Murder, Evidence, Admissibility, Criminal Code, s. 715.1, s 715.2, Application for Mistrial

R. v. Clermont, 2017 ONCA 134

[MacPherson, Juriansz and Rouleau JJ.A.]

Counsel:

[MacPherson, Juriansz and Rouleau JJ.A.]

Counsel:

Ely Clermont, acting in person

Vincenzo Rondinelli, duty counsel

Luke Schwalm, for the respondent

Keywords: Endorsement, Criminal Law, Impaired Driving, Criminal Code, s. 255(2), Evidence, Admissibility, Prior Inconsistent Statements

R. v. D.C. (Publication Ban), 2017 ONCA 143

[Hoy A.C.J.O., Doherty and Miller JJ.A.]

Counsel:

Timothy E. Breen, for the appellant

Peter Fraser, for the respondent

Keywords: Publication Ban, Endorsement, Criminal Law, Sexual Assault, Reasonable Apprehension of Bias, Misapprehension of Evidence

R. v. Siscoe (Publication Ban), 2017 ONCA 133

[MacPherson, Rouleau and Brown JJ.A]

Counsel:

John Siscoe, acting in person

Frank Au, for the respondent

Keywords: Publication Ban, Endorsement, Criminal Law, Aggravated Assault, Sexual Assault, Forcible Confinement, Sentencing, Community Supervision, Mental Disorder, Risk of reoffending

R. v. Staples, 2017 ONCA 138

[Laskin J.A. (In Chambers)]

Counsel:

Michael Lacy and Marco Sciarra, for the applicant

Susan Magotiaux, for the respondent

Keywords: Criminal Law, First Degree Murder, Criminal Code, s. 684(1), Appointment of Counsel

R. v. Garabet, 2017 ONCA 139

[Sharpe, Rouleau and Benotto JJ.A.]

Counsel:

Mark J. Sandler and Amanda Ross, for the appellant

Howard Piafsky, for the respondent

Keywords: Criminal Law, Evidence, Admissibility, Search Warrants, Canadian Charter of Rights and Freedoms, s. 8, s. 24(2)

R. v. Carson, 2017 ONCA 142

[Simmons, Pardu and Miller JJ.A.]

Counsel:

Roger Shallow, for the appellant

Patrick McCann, for the respondent

Keywords: Criminal Law, Influence Peddling, Criminal Code, s. 121(1)(d), Statutory Interpretation

R. v. R.S. (Publication Ban), 2017 ONCA 141

[MacPherson, Rouleau and Brown JJ.A.]

Counsel:

R.S., in person

Delmar Doucette, as duty counsel

Frank Au, for the respondent

Keywords: Publication Ban, Criminal Law, Human Trafficking, Assault, Sentencing

 

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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