ONTARIO COURT OF APPEAL SUMMARIES (MAY 8 – 12, 2017)

Good Afternoon.

In a problematic and highly technical decision in Pennyfeather v. Timminco Limited, the Court of Appeal upheld the dismissal of a secondary securities market misrepresentation class action on the basis that it ran afoul of the hard three-year limitation period set out in s. 138.14 of the Securities Act. That limitation period commences from when the misrepresentation was first made and discoverability or continuing misrepresentations play no part in extending the limitation period. It was not sufficient for the claim to be issued to toll the limitation period (the claim was issued about a year after the misrepresentation). Leave to proceed with the claim had to be obtained before the end of the three years (this had been decided in Timminco #1 and confirmed in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60). Alternatively, the application for leave had to at least have been brought within the three years, in which case, if leave were granted, it could be granted nunc pro tunc. Unfortunately, in this case, the leave motion had not been brought within three years, although that had been partly due to the fact that the court would not schedule it in time.

Congratulations to our very own Jason Mangano and Jennifer A. O’Dell, who were successful in Royal & Sun Alliance Insurance Company of Canada v Intact Insurance Company. In a contest between insurers as to responsibility for indemnifying victims of an accident, at issue was whether an endorsement of an automobile insurance policy that excludes coverage for a named driver is valid even though its form is not that pre-approved by the Superintendent of Financial Services, as required by s 227(1) of the Insurance Act. The Court held that the use of the unapproved form did not invalidate the exclusion from insurance coverage. As a result, RSA was responsible to indemnify under its uninsured motorist coverage.

Other substantive decisions this week included those pertaining to emergency orders under the Building Code Act, and reasonable apprehension of bias.

Have a great weekend.

John Polyzogopoulos
Blaney McMurtry LLP
jpolyzogopoulos@blaney.com
Tel: 416 593 2953
http://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents:

Sutherland Lofts Inc. v. Peck, 2017 ONCA 368

Keywords: Municipal Law, Building Code Act, Orders to Remedy Unsafe Building

Pennyfeather v. Timminco Limited, 2017 ONCA 369

Keywords: Class Actions, Torts, Misrepresentation, Securities Law, Secondary Securities Market, Limitation Periods, Ontario Securities Act, R.S.O. 1990, c. S.5, Part XXIII.1, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 28, Timminco #1, Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, Costs, Issue Estoppel, Henderson v. Henderson (1843), 67 E.R. 313

Royal & Sun Alliance Insurance Company of Canada v Intact Insurance Company, 2017 ONCA 381

Keywords: Insurance Law, Automobile Insurance, Excluded Driver Endorsements, Validity, Insurance Act, RSO 1990, c I.8, s 227(1), Unfair or Deceptive Acts or Practices, Financial Services Commission of Ontario Act, 1997, SO 1997 c 28, s 439, O Reg 7/00, Statutory Interpretation

Cannon v. Cemcor Apartments Inc., 2017 ONCA 378

Keywords: Torts, Negligence, Slip and Fall, Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Reasonable Apprehension of Bias

Azzeh v. Legendre, 2017 ONCA 385

Keywords: Motor Vehicle Accident, Notice to Municipality, s. 44(10) Municipal Act, 2001, Limitations Act, 2002, Plaintiff with a Disability, Rule 7.02(2) Rules of Civil Procedure, Lax v. Lax (2004), 70 O.R. (3d) 520 (C.A.), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404, Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A)

Moore v. Apollo Health & Beauty Care, 2017 ONCA 383

Keywords: Employment Law, Constructive Dismissal

For Civil Endorsements, click here.

For Criminal and Ontario Review Board Decisions, click here.

Civil Decisions:

Sutherland Lofts Inc. v. Peck, 2017 ONCA 368

[Weiler, Pardu and Roberts JJ.A.]

Counsel:

T.Halinski and D. Neligan, for the appellants

V. M’Garry, for the respondent

Keywords: Municipal Law, Building Code Act, Orders to Remedy Unsafe Building

Facts:

Sutherland Lofts Inc. (the “respondent”) owned the property located at 606-610 Talbot Street in St. Thomas (the “Building”). The Building was over 100 years old and was purchased by the respondent in 2003 with the plan of renovating it into a combination of commercial and residential apartments. This plan never progressed and the Building sat vacant from at least the date it was purchased by the respondent. Since that time, the condition of the Building deteriorated.

In June 2015, a significant section of the Building’s second floor collapsed and on September 11, 2015, the roof partially collapsed. The Corporation of the City of St. Thomas (“the City”) engaged an engineering firm to inspect the Building and provide a written report with respect to its structural condition. Chris Peck, the City’s Chief Building Official (“CBO”) issued and served on the respondent an Order Prohibiting Occupancy dated September 15, 2015. In response to the engineering report, also dated September 15, 2015, the CBO issued and served on the respondent an Emergency Order the following day on September 16, 2015, to which the engineering report was attached.

Having determined that the immediate danger of collapse had been alleviated by the respondent’s temporary shoring and hoarding work, on November 5, 2015, the CBO lifted the Emergency Order and replaced it with an Order of the Property Standards Officer, which detailed additional work to be completed. On December 3, 2015, the CBO issued the Order to Remedy Unsafe Building, which is the subject of this appeal.

The respondent did not comply with the orders or complete any additional remedial work. It did not appeal any of the orders but brought an application in March 2016 to have the Order to Remedy declared invalid, and to obtain interim injunctive relief, as well as a declaration that the Building was not unsafe. In the alternative, the respondent requested leave to file a late appeal of the November 5, 2015 Order of the Property Standards Officer and the December 3, 2015 Order to Remedy.

The application judge determined that the Order to Remedy was null, void and inoperative for the following reasons:

(i) It did not comply with the Building Code Act (“the Act”) because it was only served on the owner. The application judge concluded that the Order to Remedy should have also been served on the respondent’s property manager and local supervisory agent, as “such other persons affected” by the Order; and

(ii) It lacked the specificity required under the Act.

The application judge concluded that, given her ruling with respect to the invalidity of the Order to Remedy, it was not necessary for her deal with the issue of injunctive relief. Although not stated, presumably also because of her ruling, the application judge did not determine the factual issue of the Building’s structural integrity.

The City and Chris Peck (the “appellants”) appeal the application judge’s order declaring the Order to Remedy Unsafe Building, issued on December 3, 2015 (“the Order to Remedy”), by the CBO, null, void and inoperative. The respondent brings a cross-appeal to obtain an interim injunction preventing the appellants from demolishing the Building, and for a declaratory order that the Building is not “unsafe” as defined in the Act. The application judge declined to deal with these claimed remedies.

Issue:

(1) Were the appeal and cross-appeal moot?

(2) Did the application judge err by determining that the Order to Remedy was null, void and inoperative?

(3) Did the application judge err by determining that the Order to Remedy lacked specificity contrary to the Act?

(4) Should the respondent be granted injunctive and declarative relief?

Holding:

The appeal was allowed. The cross-appeal was dismissed. The issues of whether an interim injunction should be granted, and whether the Building was unsafe, were remitted for hearing before another application judge.

Reasoning:

(1) No. The issues of whether the Order to Remedy lacked specificity and the availability of an interim injunction to prevent demolition, did not raise a hypothetical or abstract question but were still live issues between the parties. The Court of Appeal’s decision would therefore have a practical effect on the parties.

(2) Yes. First, the application judge erroneously declared that the Order to Remedy was null, void and inoperative based on allegedly defective service on the respondent. In the Court’s view, the appellants’ service of the Order to Remedy by registered mail on the respondent as owner of the Building, at the respondent’s last known address, complied with the provisions of ss. 15.9(5) and 27(1) of the Act. It was within the CBO’s discretion as to whether the respondent’s property manager and local supervisory agent should be served with the Order to Remedy.

Further, the Court agreed with the appellants’ submission that the property manager and local supervisory agent were not in possession of the Building, but were at best the respondent’s agents for service. The Building was vacant and there was an order that prohibited occupation. Only the owner was in possession of the Building. As a result, the CBO was not required to serve any other person. There is no basis to suggest that the CBO acted unreasonably in the exercise of his discretion not to serve the respondent’s property manager and local supervisory agent. In any event, delayed service does not invalidate the Order to Remedy.

(3) Yes. The application judge did not provide any reasons or analysis for this conclusion. She also mistakenly referred to s. 15.2(2) of the Act, which prescribes the contents of a Property Standards Order, rather than to s. 15.9 (4), which prescribes the contents of an Order to Remedy Unsafe Building. Unfortunately, her lack of reasons and analysis did not permit the court to conduct a meaningful appellate review. As a result, no deference is owed to her decision and the Court was required to consider the question afresh.

First, s. 15.9(4) of the Act allows for detailed particulars of the remedial steps to be taken to be provided following further investigation. Further, s. 25(4) of the Act allows a judge to order that additional particulars be provided because it empowers a judge to take any action that the CBO may take. In the present case, the court is of the view that the Order to Remedy complies with s. 15.9(4) of the Act, in that it contains sufficient particularity to enable the respondent to know the case it had to meet and the deficiencies that had to be remedied. In particular, the Order to Remedy specifies the areas and items in the Building that comprise the alleged serious, unsafe conditions requiring remediation, including the collapsed and rotten sections of floors and split structural beams that were also noted by the respondent’s own engineer.

When the Order to Remedy is viewed in the context of the long history between the parties, the lengthy correspondence and the detailed engineering reports that the parties exchanged, there can be no doubt that the respondent knew the case it had to meet and the repairs that were necessary to stabilize the Building. Moreover, the respondent applied for a building permit to carry out repairs and its own engineer recommended certain remedial measures that corresponded with those required by the Order to Remedy. The respondent completed some, but not all, of the necessary repairs. The respondent did not complete all of the shoring and hoarding work required, nor any of the waterproofing recommended by its own engineer. This was not due to the respondent’s lack of understanding of what was required, but because of an admitted lack of funds to complete the repairs. Accordingly, the Court saw no basis to invalidate the Order to Remedy.

(4) With respect to the respondent’s request for injunctive and declarative relief, the Court was not in a position to determine these issues on the record before it. In particular, the Court lacked a current evidentiary record describing the present state of the Building. Further, with respect to the injunctive relief requested, the Court had no evidence that the respondent is capable of providing any undertaking with respect to damages. Therefore, the issues of whether an interim injunction should be granted, and whether the Building was unsafe, were remitted for hearing before another application judge.

Pennyfeather v. Timminco Limited, 2017 ONCA 369

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

Counsel:
W. J. Kim, M. C. Spencer and A. Gyamfi, for the appellant/respondent by way of cross-appeal
A. L.W. D’Silva and D. S. Murdoch, for the respondents/appellants by way of cross-appeal Timminco Limited, Dr. Heinz Schimmelbusch, Robert Dietrich, René Boisvert, Arthur R. Spector, Jack L. Messman, John C. Fox, Michael D. Winfield and Mickey M. Yaksich
P. Le Vay, B. Van Niejenhuis and C. Di Carlo, for the respondents Photon Consulting LLC, Rogol Energy Consulting LLC and Michael Rogol
E. Davis, for the respondent John P. Walsh

Keywords: Class Actions, Torts, Misrepresentation, Securities Law, Secondary Securities Market, Limitation Periods, Ontario Securities Act, R.S.O. 1990, c. S.5, Part XXIII.1, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 28, Timminco #1, Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, Costs, Issue Estoppel, Henderson v. Henderson (1843), 67 E.R. 313

Facts:

The statement of claim in this proceeding was filed on May 14, 2009 by Ravinder Sharma, a Timminco shareholder. He sought certification of a class action asserting a statutory claim for misrepresentation by Timminco and its consultants, Photon Consulting LLC (“Photon”) and Rogol Energy Consulting LLC (“Rogol”), in public statements and disclosure documents between March 17, 2008, the date of the first press release and a conference call on May 29, 2008. He also asserted an intention to seek leave to proceed with the statutory cause of action under Part XXIII.1 of the Ontario Securities Act, R.S.O. 1990, c. S.5 (“OSA”), which is a statutory cause of action for misrepresentation in the secondary securities market.

Another law firm commenced a second action on behalf of a different Timminco shareholder in June of 2009. A “carriage dispute” took place between the two law firms as to which action should proceed. On October 29, 2009, the motion judge awarded carriage to the appellant’s counsel in this action. For the next 15 months, the appellant’s counsel focused on attempting to settle the action, probably due to Timminco’s deteriorating financial condition. Little was done to advance the proposed class action. Meanwhile, however, the three-year limitation period was potentially ticking on the OSA cause of action.

A case conference was held on March 10, 2011. The motion judge refused to accelerate the leave and certification motions. Instead, he directed the appellant to bring a motion for “conditional leave” to commence an action under the OSA.

On March 14, 2011, the appellant served a motion, returnable on March 25, 2011, seeking, among other things, a declaration that the three-year limitation period in s. 138.14 of the OSA was suspended by the operation of s. 28 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”), an order granting “conditional leave” to commence an action under s. 138.8(1) of the OSA, and an order tolling the limitation period. The motion was argued on March 25, 2011. As the argument developed, the appellant’s request for conditional leave was not pursued nor did the appellant request nunc pro tunc relief. The submissions focused on whether s. 28 of the CPA had the effect of suspending the limitation period in s. 138.14 of the OSA on the commencement of a putative class action claiming the statutory remedy, even though leave had not been obtained and the appellant had only asserted an intention to obtain leave.

The motion judge concluded that because the statement of claim referred to an intention to commence an action under Part XXIII.1 of the OSA, s. 28 of the CPA suspended the operation of the limitation period in s. 138.14 of the OSA.

After this decision, the appellant served his material for certification and for leave to pursue the statutory claim. This occurred three years and two days after the last alleged misrepresentation identified in the statement of claim. This is the proceeding under appeal in this court.

Meanwhile, the respondents appealed the motion judge’s decision. That resulted in the Court of Appeal’s ruling in Timminco #1, allowing the appeal and determining that s. 28(1) of the CPA did not suspend the limitation period until leave was actually granted. Merely asserting an intention to seek leave was not sufficient. The appellant’s statutory claim was time-barred. Leave to appeal to the Supreme Court of Canada was refused.

Subsequent to Timminco #1, the Supreme Court of Canada released its decision in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60 (“Green (SCC)”). Mr. Pennyfeather’s application for leave to intervene in that appeal was dismissed on December 17, 2014. In Green (SCC), the Supreme Court found that s. 28 of the CPA did not suspend the operation of the limitation period for a statutory claim for misrepresentation before leave had been granted under s. 138.8 of the OSA. This was consistent with the conclusions reached in the Court of Appeal’s decision in Timminco #1. The effect of this was that the three appeals before the Supreme Court in Green (SCC) were time-barred, unless nunc pro tunc relief was available. There was disagreement among the judges who considered nunc pro tunc on its application to the three cases before the court. Côté J. gave the lead judgment. She pointed out that courts have inherent jurisdiction to make orders nunc pro tunc. But she identified an important limit referred to as a “red-line rule”. The red-line rule requires leave to be sought within the limitation period in order for the court’s order to be made nunc pro tunc. Côté J. noted that the case law had identified a number of “non-exhaustive” factors, none of which was determinative, to be considered in deciding whether to grant a nunc pro tunc order. However, leave will not be granted nunc pro tunc when it would undermine the purpose of the limitation period.

In the case at bar, the motion judge held that although the appellant’s nunc pro tunc argument was barred by issue estoppel and by the abuse of process doctrine, he nevertheless had discretion to hear it, relying on Penner v. Niagara (Regional Police Services Board), 2013 SCC 19. In particular, the motion judge observed that the appellant’s nunc pro tunc assertion was not argued at the March 2011 motion and, although the ability of a court to make an order nunc pro tunc was addressed in Green (SCC), the appellant had been denied leave to intervene in that appeal. Therefore, the motion judge exercised his discretion to hear the request for leave under the OSA.

The motion judge then turned to the appellant’s request for leave nunc pro tunc, having regard to the principles set out in Green (SCC). The motion judge found that because the appellant had not sought leave prior to the expiry of the three-year limitation period, it was not appropriate to grant leave nunc pro tunc. The appellant’s motion for “conditional leave” in March 2011 was not a leave motion and a leave motion was never scheduled. Furthermore, he stated that the limitation period in the OSA is an “absolute limitation period” that is “not diluted by principles of discoverability.” Applying the equitable factors from Green (SCC), the motion judge held that, although counsel for the appellant had acted in accordance with the prevailing wisdom that s. 28 of the CPA operated to suspend the limitation period, counsel’s diligence was misdirected. There was no adequate explanation for not advancing the proposed class action on the parallel tracks of litigation and settlement. It was not clear that the respondents were not prejudiced in their ability to defend the action by the passage of time. Finally, there had been no determination of whether the class action had a reasonable possibility of success under s. 138.8 of the OSA, and so it was not possible to rely on the prospects of success to support a nunc pro tunc order.

Pennyfeather appealed. The appellant’s central submission was that in finding that he did not meet the “red-line” rule for equitable relief in Green (SCC), the motion judge erred by overlooking the fact that the appellant’s motion for “conditional leave” was delivered on March 14, 2011, three days before the expiry of any limitation period. The appellant also argued that the motion judge erred in stating that his conditional leave motion was “abandoned”.

On their cross-appeal, the Timminco respondents submitted that the motion judge erred in his application of the principles of res judicata, issue estoppel, and abuse of process.

Issues:

(1) Is nunc pro tunc relief available to the appellant?

(2) If nunc pro tunc relief was available to the appellant, did the motion judge err in principle in the exercise of his discretion in refusing it?

(3) Should the limitation period be extended for later purchasers?

(4) Should leave be granted to the appellants to appeal the motion judge’s award of costs of $124,028.81 to the Timminco respondents and $25,330.07 to the Photon respondents?

(5) Should the cross-appeal be granted?

Holding:

Appeal and cross-appeal dismissed.

Reasoning:

(1) The Court of Appeal found it unnecessary to decide this issue due to the Court’s conclusion that the motion judge did not err in his exercise of discretion in refusing to grant nunc pro tunc relief (if it was even available). At a case conference on March 10, 2011, the motion judge declined to accelerate the scheduling of a certification and leave motion in view of the impending limitation period. The motion judge did, however, direct the appellant to bring a motion to seek “conditional leave” of the court to commence an action under the OSA and to serve that material by March 14, 2011. The meaning of “conditional leave” was not clearly defined. Presumably the intent was that if leave was ultimately granted on the merits, it would be “backdated” or made nunc pro tunc to the date of conditional leave, so as to retrospectively toll the limitation period. In effect, the conditional leave motion was a request for prospective nunc pro tunc relief. Arguably, if leave was ultimately granted, the motion requesting conditional leave would serve as the “tunc” to which the leave order could be “backdated”

Were it necessary to decide this issue, the motion for conditional leave could have served as the anchor for nunc pro tunc relief, had leave ultimately been granted. In the circumstances, it was not clear that using the March 2011 “conditional leave” motion as the anchor for an order nunc pro tunc would necessarily undermine the purpose of the limitation period. In any event, because the Court of Appeal upheld the motion judge’s discretionary refusal to grant nunc pro tunc relief, the Court of Appeal found it unnecessary to decide this issue.

(2) No. The motion judge made no error in principle in the exercise of his discretion not to grant nunc pro tunc relief. Both Côté J. and Cromwell J. in Green (SCC) referred to the deference to be accorded to a judge’s exercise of discretion in either granting or refusing an order nunc pro tunc. Those observations are particularly apt in this case because the motion judge had been case managing this class action since its commencement in May 2009.

The appellant says that the motion judge committed errors in principle: (i) in failing to find that the appeal was pursued diligently; (ii) in failing to find that the appellant’s claim had merit and, instead, treating the merits as neutral; and (iii) in failing to find that the delay was caused by an “act of the court”.

(i) Diligence

No. The motion judge did not err in failing to find that the appeal was pursued diligently. A fair reading of the record indicates that, between mid-May 2010 and mid-February of 2011, very little was happening in the action other than occasional settlement overtures from the appellant’s side. Mr. Sharma, who was then the representative plaintiff, had indicated in the summer of 2009 that he was unable to continue in that capacity and asked to be removed. At the time of the carriage motion in October 2009, counsel indicated that Mr. Pennyfeather was prepared to assume the role. Although a motion to substitute Mr. Pennyfeather as the representative plaintiff was served in January 2010, it was not accompanied by an affidavit from either Mr. Sharma or Mr. Pennyfeather. It was not until February 2011 that the appellant asked the motion judge to schedule a motion to appoint Mr. Pennyfeather in Mr. Sharma’s stead and this motion was heard, together with the “conditional leave” motion, on March 25, 2011. The consequence was that the proposed class action effectively had no representative plaintiff, a fundamental requirement for certification, for some 18 months.

Further, the respondents also served a demand for particulars in December 2009. While the appellant delivered a draft amended statement of claim, it did not fully respond to the respondents’ demand. Thus another very basic task, regularizing the pleading, had not been addressed. Therefore, the evidence supports the motion judge’s finding that the case was not pursued diligently.

(ii) Merits

No. The motion judge did not err by failing to give any weight to the merits of the appellant’s case. The motion judge treated the merits factor as neutral because the merits had not been tested in a contested leave motion. This finding was open to the motion judge.

(iii) Cause of Delay

No. The motion judge did not err in failing to find that the delay was caused by an “act of the court”. The delay here was not caused by an act of the court – it was caused by the appellant’s decision to focus on settlement rather than to advance the statutory claim. It was unrealistic to expect the motion judge to schedule the leave motion at the eleventh hour. The motion judge gave valid reasons for refusing to do so.

(3) No. The limitation period was not extended for later purchasers. The appellant submits that the limitation period did not expire for all class members on May 29, 2011, three years after the date of the last misrepresentation pleaded in the statement of claim. He submits that the Photon Report remained on Timminco’s website until November 11, 2008 and that it gave rise to a new representation each day, triggering the running of a fresh limitation period for every class member who purchased shares between May 14, 2008, the day the Photon Report was posted on Timminco’s website, and November 11, 2008, when the Photon Report was taken down. Thus, claims based on those fresh misrepresentations were not time-barred when the appellant ultimately filed his motion for leave on June 13, 2011.

This submission was rejected for two reasons. First, the appellant’s submission is based on a misconception of the operation of the statutory limitation period. It does not run from the date on which an individual class member saw or heard the misrepresentation or purchased his or her individual shares. It runs from “the date on which the document containing the misrepresentation was first released”. Thus, it is irrelevant to the running of the limitation period that the Photon report remained on Timminco’s website and may or may not have been seen by persons who purchased shares after the date of its first release.

Second, this theory was neither pleaded as part of the appellant’s case nor advanced in the court below. Rule 25.06(8) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 requires a plaintiff to plead full particulars of any misrepresentation. The obvious purpose is to avoid surprise. Nowhere in the statement of claim does the appellant plead a theory of a representation after May 29, 2008 or any continuing representations.

(4) No. Leave should not be granted to the appellant to appeal the motion judge’s award of costs of $124,028.81 to the Timminco respondents and $25,330.07 to the Photon respondents. The awarding and fixing of costs is highly discretionary and is afforded a high level of deference on appeal. The motion judge’s decision with respect to costs was based on his consideration of the relevant principles. The appellant has identified no error in principle in the exercise of his discretion.

(5) No. Due to the disposition of the appeal, it was unnecessary to determine the respondents’ cross-appeal, which asserted that nunc pro tunc relief was barred by the doctrines of res judicata, issue estoppel or abuse of process. However, if considered, the Court would have found that the motion judge did not err in the exercise of his discretion to hear the appellant’s motion. The cross-appeal raised a novel and challenging question, namely whether the principle in Henderson v. Henderson (1843), 67 E.R. 313, 3 Hare 100 (V.C.), applies to issue estoppel. That principle, applicable to cause of action estoppel, holds that a final decision of the court bars re-litigation not only of what was decided, but also what could and should have been decided by the court. The motion judge concluded that both issue estoppel and abuse of process likely applied to prevent the appellant from seeking nunc pro tunc relief because he could have requested that relief when he brought his “conditional leave” motion or on his previous appeal to this court.

However, there is a discretionary element to the application of those doctrines. The motion judge found it was appropriate to exercise that discretion in Mr. Pennyfeather’s favour because Mr. Pennyfeather never had an opportunity to make the argument. He was denied leave to appeal to the Supreme Court in the original Timminco #1 case and he was not permitted to intervene in the appeal to the Supreme Court in Green (SCC). Thus, he never had an opportunity to make an argument about his entitlement to nunc pro tunc relief and it was in the interest of justice that he be given an opportunity to do so. Therefore, the motion judge did not err in exercising his discretion to hear the motion for leave nunc pro tunc, because the appellant never had an opportunity to raise an issue which subsequent jurisprudence revealed should have been raised.

Royal & Sun Alliance Insurance Company of Canada v Intact Insurance Company, 2017 ONCA 381

[Juriansz, Brown and Miller JJ.A.]

Counsel:

C. P. Klinowski, for the appellant

Jason P. Mangano and Jennifer A. O’Dell, for the respondent

Keywords: Insurance Law, Automobile Insurance, Excluded Driver Endorsements, Validity, Insurance Act, RSO 1990, c I.8, s 227(1), Unfair or Deceptive Acts or Practices, Financial Services Commission of Ontario Act, 1997, SO 1997 c 28, s 439, O Reg 7/00, Statutory Interpretation

Facts:

Diane Wilson and her husband met with her insurance broker on February 29, 2012, because her driver’s licence had been suspended and the insurance on the 2004 Impala she owned was being canceled. She wished to maintain insurance coverage on her car so her husband could drive it. Insurance was arranged with the respondent, Intact, on the basis that Wilson would be an excluded driver. Wilson executed an Excluded Driver Endorsement.

The trial judge found that when Wilson completed the form the broker explained to her and she clearly understood that, even if the licence were to be reinstated, Intact still would not insure her and the Excluded Driver Endorsement would continue to apply. Wilson’s licence was reinstated, she drove the vehicle, and had an accident in which Rita and Cathy MacLeod were injured. The MacLeods commenced a personal injury action against Wilson. The MacLeods’ uninsured motor vehicle carrier, Royal & Sun Alliance Insurance Company of Canada (RSA), is the appellant. RSA brought an application for a declaration Wilson was fully insured by Intact. Intact, relying on the Excluded Driver Endorsement, took the position there was no coverage and Wilson was uninsured.

The application judge found the Excluded Driver Endorsement was in full force and effect at the time of the accident and that Intact had no duty to defend or indemnify Wilson in respect of the accident. RSA appealed from that decision.

Issue:

Whether an endorsement of an automobile insurance policy that excludes coverage for a named driver is valid even though its form is not that pre-approved by the Superintendent of Financial Services, as required by s. 227(1) of the Insurance Act, RSO 1990, c I.8

Holding:

Appeal dismissed.

Reasoning:

The use of the unapproved form, as alleged, does not necessarily invalidate an agreement between the parties about exclusion from insurance coverage.

Royal’s main argument on appeal was that the Excluded Driver Endorsement was not in the form pre-approved by the Superintendent and was void because it did not strictly comply with s. 227(1) of the Insurance Act. On the form that Wilson executed, the boxes in the pre-approved standard form were not filled out. Rather, the words “See Certificate of Automobile Insurance” were written in across the boxes. The Certificate of Insurance set out the identifying details of the vehicle. Assuming that the Excluded Driver Endorsement was not in pre-approved form, the question was whether s. 227(1) rendered an unapproved form void. The section itself is silent on the effect of using a form that had not been pre-approved. It was necessary for the Court to interpret s. 227 in the context of the Act, its purposes and the regulatory scheme as a whole to determine the legislative intent. The Court concluded the legislature intended that a lack of compliance with s. 227(1) is a matter for the Superintendent. It was not the role of the courts, while applying the law of contract, to read into s. 227 that a non-compliant form is necessarily void as a matter of contract law.

(a) The objectives of the regulatory automobile insurance regime

The main objectives of the regulatory automobile insurance regime in Ontario include consumer protection and guaranteed compensation of victims: Smith v Co-Operators General Insurance Co: 2002 SCC 30; Peixeiro v Haberman, [1997] 3 SCR 549. The consumer protection objective was at play in this case. The question was whether Wilson, as a consumer of insurance, should be protected from her insurer’s use of an unapproved form. The victims requiring compensation in this case were the MacLeods. No matter the outcome, they could claim compensation from one of the two insurers.

The Smith decision involved the validity of an insurer’s notice under s 71 of the Statutory Accident Benefits Schedule advising the insured of the termination of her statutory benefits. After noting the important consumer protection purpose of the insurance scheme, the court cautioned that it is not the role of the court to set out the specific content of insurance refusal forms. That task was better left to the legislature. However, it is appropriate for the court to interpret in general terms what the legislature intended the insurer to convey under s 71. In furthering the consumer purpose of the Act, courts should limit their role to implementing the insurance regime as designated by the legislature.

(b) The statutory setting of s 227 of the Insurance Act

Section 239(1) of the Insurance Act provides that “every contract evidenced by an owner’s policy insures the person named therein”. Section 240 creates an “excluded driver” exception, defined in s. 224(1) as “a person named as an excluded driver in an endorsement under s. 249”. Section 249 provides that an insured “may stipulate by endorsement to a contract evidenced by a motor vehicle liability policy that any person named in the endorsement is an excluded driver under the contract.” In that context, s. 227(1) provides that an insurer shall not use a form for an endorsement unless the form is approved by the Superintendent. All of these provisions refer to the “contract” between the insured and the insurer

(c) The Superintendent’s regulatory powers

The Superintendent appointed under the Financial Services Commission of Ontario Act, 1997, SO 1997 c 28, has the general function of administering and enforcing the Insurance Act. Section 439 of the Act provides that “no person shall engage in any unfair or deceptive act or practice”. “Unfair or deceptive acts or practices” are prescribed by O Reg 7/00. The Regulation prescribes as an unfair or deceptive at or practice “the use of a document in place of a form approved for use by the Superintendent, unless none of the deviations in the document from the approved form affects the substance or is calculated to mislead.” Section 441(2) of the Act gives the Superintendent the power to order a person to cease or refrain from an unfair or deceptive act, to perform acts to remedy the situation, and even to cease engaging in the business of insurance or any aspect of the business of insurance.

The Court drew from reading s. 227(1) in context that the legislature did not intend for the courts, while engaged in adjudicating a contractual dispute, to consider a contractual provision void merely because its form fails to strictly comply with s. 227(1) of the Insurance Act. The court’s function is to determine the contractual dispute, and any alleged breach of s. 227(1) is a matter for the Superintendent. In fulfilling its function, the court may well consider an alleged deviation from a pre-approved form to the extent it is relevant to its enforceability in contract.

The Court found support for this interpretation in s. 126, which seems to indicate that the role of the courts is to determine the validity of contracts of insurance as a matter of contract law and the consequence of a failure to comply with a provision of the Act is to be determined as specifically set out by the Act and its regulations.

The application judge was correct in finding that the Excluded Driver Endorsement on the Intact policy insuring Wilson’s vehicle was in full force and effect on June 6, 2012, when Wilson was involved in an accident with the MacLeods.

Cannon v. Cemcor Apartments Inc., 2017 ONCA 378

[Doherty, Benotto and Trotter JJ.A.]

Counsel:

P. J. Pape, for the appellant

A. Rachlin, for the respondent

Keywords: Torts, Negligence, Slip and Fall, Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Reasonable Apprehension of Bias

Mr. Cannon slipped on the ice in the parking lot of the apartment where he lived and broke his leg. Under the terms of his lease, the landlord, Cemcor Apartments Inc. (“Cemcor”), was responsible for maintaining the parking lot. Cemcor had a contract with Myles Property Management Inc. (“Myles”) to clear the snow and ice from the parking lot.

Mr. Cannon sued Cemcor for negligence. It is common ground that under the Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Cemcor owed a duty of care to Mr. Cannon. In the language of the statute, Cemcor was under a duty “to take such care as in all of the circumstances of the case is reasonable” to ensure that Mr. Cannon was “reasonably safe while on the premises.”

The trial judge dismissed the claim. Mr. Cannon appealed. At the end of oral argument, the court advised counsel that the appeal was dismissed.

Issue:

(1) Did the trial judge err in finding that Cemcor followed its own maintenance policy on the day of the accident?

(2) Did the trial judge’s interventions in the course of the trial demonstrate a reasonable apprehension of bias?

Holding: Appeal dismissed.

Reasoning:

(1) No. In considering whether, according to Cemcor’s own maintenance criteria, the entire parking lot should have been plowed, the trial judge focused on the actual conditions in the parking lot at the time of the accident, as described by various witnesses called by both Mr. Cannon and Cemcor.

The trial judge ultimately held, based largely on the evidence of defence witnesses, but to some extent on Mr. Cannon’s evidence, that the parking lot was adequately cleared at the time of the accident, but for the “isolated slippery spot” on which Mr. Cannon slipped and fell.

The trial judge made no factual error in his analysis of the evidence. The condition of the parking lot at the time Mr. Cannon fell was the crucial factual issue. Evidence of Cemcor’s snow removal policy, evidence of snowfalls in the preceding weeks and days, and the Environment Canada records of snowfall at the Sudbury airport, some 20 to 25 kilometres away from the parking lot, while no doubt relevant, were regarded by the trial judge as of secondary value to the descriptions of the condition of the parking lot given by the persons who were in the parking lot on the day of the accident.

It was open to the trial judge to treat the firsthand evidence of the witnesses as more probative of the condition of the parking lot at the time of the accident than the statistical information from Environment Canada.

The Court of Appeal rejected the argument that the Environment Canada records unequivocally established that the amount of snow on the ground in the parking lot was in excess of the amount that on Cemcor’s own maintenance criteria required the plowing of the entire parking lot. While the records indicated significant snowfall in the Sudbury area in December and January, they were not so compelling as to require the trial judge to reject the evidence of the witnesses who were actually in the parking lot on the day of the accident. The trial judge made no error in his analysis of the evidence.

(2) No. The interventions by the trial judge during closing argument were not inappropriate. There were many interventions by the trial judge during counsel’s cross-examination of the defence witnesses. Some were appropriate. Trial judges have a responsibility to ensure that cross-examinations are conducted fairly and in accordance with the rules of evidence. It was also appropriate for the trial judge to interrupt counsel when the purpose of a certain line of questioning was unclear to the trial judge. Sometimes, a trial judge cannot assess relevancy without some idea of where a line of questioning is going.

It must be said that the efficiency and, perhaps more importantly, the tone of the trial suffered, to some degree, as a result of the trial judge’s many interventions and the tensions that developed between counsel and the trial judge as a result of those interventions. The court understood the appellant’s concern about the appearance of fairness. However, the trial judge’s interventions did not rise to the high level required to displace the presumption of judicial impartiality.

Having regard to that presumption, a reasonable person, properly informed, would not apprehend bias as a result of the trial judge’s interventions.

The Court of Appeal also disagreed that the transcript showed that the trial judge took over carriage of the defence. As counsel for the respondent correctly pointed out, it was impossible to say from the transcript alone whether some of the trial judge’s interventions were at his own initiative, or in response to defence counsel standing to make an objection.

Azzeh v. Legendre, 2017 ONCA 385

[Weiler, Benotte and Roberts JJ.A.]

Counsel:

S. Zacharias and N. Marotta, for the appellant the City of Greater Sudbury

G.Mazin, S. Sharma, I. Ahsan, and H. Tse, for the respondent Bayden Zachary Azzeh

W.G Scott, for the proposed defendant, Wallbridge, Wallbridge

Keywords: Motor Vehicle Accident, Notice to Municipality, s. 44(10) Municipal Act, 2001, Limitations Act, 2002, Plaintiff with a Disability, Rule 7.02(2) Rules of Civil Procedure, Lax v. Lax (2004), 70 O.R. (3d) 520 (C.A.), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404, Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A)

Facts: Bayden Azzeh suffered brain injuries in a car accident in Sudbury on September 7, 2007, when he was 17 days old. His mother, Julia Neville, was driving the car. After the accident, Neville retained the firm Wallbridge, Wallbridge to act on her and Bayden’s behalf. The contingency fee agreement was for both mother and son. The statement of claim was issued in 2008 and settled in 2011.

In 2014, Neville issued a statement of claim on Bayden’s behalf against the driver and owner of the other car. Neville did not swear the affidavit required to be sworn as a litigation guardian.  In 2015, Bayden changed lawyers and his grandmother Ingrid swore an affidavit as litigation guardian. Bayden’s lawyers brought a motion to amend the pleadings to add the City of Sudbury, among others, as a defendant and to increase the amount of damages sought.

The City unsuccessfully opposed the motion on two grounds: first, the claim was statute-barred as under the two-year limitation period of the Limitations Act, 2002, and second, the claim was barred because Bayden failed to give the City notice within ten days of the accident, as required under s. 44(10) of the Municipal Act, 2001, SO 2001, c. 25.

The City appealed.

Issues:

(1) Did the motion judge err in finding that the two-year limitation period under the Limitations Act, 2002 did not bar the claim against the City?

(2) Did the motion judge err in finding that notice had been given to the City within the ten-day period set out in s. 44 of the Municipal Act, 2001?

(3) Did the motion judge err in finding that there was no prejudice to the City?

Holding: Appeal allowed.

Reasoning:

Where an order has both final and interlocutory aspects that are so interrelated that once the first issue was before the court, leave would inevitably be granted on the second, both aspects can be heard by the court: Lax v Lax.

(1) The motion judge held that Bayden was not represented by a litigation guardian until June 11, 2014, once Neville issued the statement of claim on Bayden’s behalf, and that is when the two-year limitation period began to run. The Court agreed.

Where the person with a claim is a minor, the Act requires that the minor be “represented by a litigation guardian in relation to the claim”, meaning that the litigation guardian may do anything in a proceeding that the party under a disability would ordinarily be required or authorized to do (r. 7.05(1)). The fact that Neville had a contingency agreement with Wallbridge did not result in Bayden being represented by a litigation guardian.

However, Bayden was represented by a litigation guardian when the statement of claim was issued in June 2014, as Neville clearly held herself out as Bayden’s litigation guardian to the defendants. The fact that she did not sign the affidavit made the proceeding an irregularity, but not a nullity. A limitation period is not tolled simply because the person holding herself out as litigation guardian had not filed the required affidavit under the Rules. To allow the limitation period to toll on that basis would effectively make the limitation period unlimited because the litigation guardian could indefinitely delay filing the affidavit.

Neville had no conflict of interest in relation to Bayden’s claim against the City.

Time began to run on the limitation period on June 11, 2014, and ended on June 11, 2016. Bayden filed his motion to add the parties on September 15, 2015. Thus, the motion was not statute-barred.

(2) Section 44(10) of the Municipal Act, 2001 provides that no action shall be brought against a municipality for failure to keep a highway in a reasonable state of repair unless notice is given to the municipality within ten days of the occurrence of the injury. The notice requirement in s. 44(10) is similar in character to a limitation period, although it is not strictly speaking a limitation period: Patrick v. South West Middlesex (Municipality), 2017 ONSC 17 at para. 81. However, under s. 44(12), the action is not barred if there is a reasonable excuse for not giving notice and the municipality is not prejudiced in its defence.

The plaintiff bears the onus of establishing a reasonable excuse: Argue v. Tay (Township), 2013 ONCA 247, 10 M.P.L.R. (5th) 11, leave to appeal refused [2013] S.C.C.A. No. 246. The words “reasonable excuse” are to be given a liberal interpretation because the municipality is protected by the requirement that it not be prejudiced in its defence.

Bayden had a representative – Neville – who was capable of forming the intention to sue the municipality within the notice period, and she had retained a lawyer to pursue claims on his behalf.

There was nothing in the record to suggest that by the time Neville acted as Bayden’s litigation guardian, on June 11, 2014, the extent of his injuries were unknown.

Roberts J.A. [dissenting in part]

Holding: Roberts J.A. would allow the City’s appeal to the extent that leave would be granted to plead the limitation and notice period defences under the Acts. Otherwise, Roberts J.A. Would have dismissed the appeal.

Reasoning:

The motion judge erred in making a final determination with respect to the limitation and notice period issues. This was a pleadings motion, not a motion to determine an issue of law before trial, nor was it a summary judgment motion. No declaratory relief was requested, and there was no trial of an issue. There were, however, credibility and factual issues that should have been left for final determination on a summary judgment motion or at trial.

The respondent met the low onus placed on him on a motion to amend a pleading. Parties on an amendment motion are not expected to “put their best foot forward”, as they would on a motion for summary judgment. As a result, the evidentiary burden on the moving party on an amendment motion, even to add parties after the expiry of a limitation period, is low: Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A.), at para. 14.The motion judge did not err in the exercise of her discretion by adding the City as a defendant. On an amendment motion, the motion judge is not to decide the merits of the underlying action and proposed amendments: Fram Elgin Mills 90 Inc. v. Romandale Farms Limited.

The Court has cautioned against the practice of challenging a claim based on a limitation defence where the proposed defendant has yet to deliver a statement of defence, because a court cannot gain a complete picture of the issues in a case without reading all of the pleadings.

The notice period issue under the Municipal Act, 2001 gives rise to myriad credibility issues and issues of fact. Specifically, pursuant to s. 44(12) of the Act, the questions as to whether the respondent had reasonable excuse for the delay in giving the requisite ten-day notice under s. 44(10) of the Act, and whether the City has suffered prejudice in its defence, require determination on a summary judgment motion or at trial.

Moore v. Apollo Health & Beauty Care, 2017 ONCA 383

[Laskin, Lauwers and Brown JJ.A.]

Counsel:

Alexandra E. Moore, acting in person

Stephanie E. Sangster, for the respondent

Keywords: Employment Law, Constructive Dismissal

Facts:

The appellant, Alexandra Moore, sued her former employer, the respondent Apollo Health & Beauty Care (“Apollo”), in Small Claims Court for constructive dismissal and other employment-related damages. Ms. Moore represented herself throughout the matter. At trial, she advanced two claims.

First, Ms. Moore alleged Apollo had fundamentally changed the terms of her employment, thereby constructively dismissing her. The trial judge found in Ms. Moore’s favour, holding Apollo had constructively dismissed her. However, the trial judge concluded Apollo provided Ms. Moore with appropriate termination notice calculated in accordance with the terms of the employment contract.

Second, Ms. Moore alleged Apollo had failed to pay her amounts for hours she had worked, for two statutory holidays, and for six sick days. The trial judge did not award any amount for these claims on the basis Ms. Moore had abandoned them during her trial evidence.

Ms. Moore appealed to the Divisional Court, requesting that the court overturn the trial judge’s ruling that she had abandoned portions of her claim and his finding on “wrongful termination.” A single judge of the Divisional Court dismissed her appeal. Ms. Moore then sought and obtained leave to appeal to Court of Appeal.

Issues:

(1) Did the trial judge err in relying on the notice provisions of her employment contract to calculate damages for constructive dismissal?

(2) Did the trial judge err in finding she had abandoned her claim for Unpaid Wages?

Holding:

Appeal allowed, in part.

Reasoning:

(1) No. Provisions respecting notice of termination of employment can limit the pay applicable on constructive dismissal. The court saw no error in the trial judge’s findings that Apollo gave Ms. Moore notice of its intent to terminate “that was well within the contractual requirements” and that Ms. Moore “received what she was entitled to.”

(2)  Yes. In his reasons, the trial judge stated: “In the course of her evidence the Plaintiff abandoned her claim for unpaid wages as well as missed holiday and sick pay.” The appeal judge held that the trial judge made no palpable and overriding error in construing her evidence as the abandonment of her claim for such damages.

The Court stated that both the trial judge and appeal judge erred in so concluding. They committed two errors. First, both misapprehended Ms. Moore’s evidence and did not assess one short statement made by her in the context of her entire evidence. Second, they failed to take the proper approach in ascertaining whether Ms. Moore, a self-represented person, in fact had abandoned part of her claim.

As a result of the trial judge’s error in treating as abandoned Ms. Moore’s claim for Unpaid Wages, the Court set aside his dismissal of that part of her claim. The evidentiary record supported Ms. Moore’s claim for Unpaid Wages and as such, the Court granted judgment to Ms. Moore in the amount of $1,558.43.

Civil Endorsements

Mizrachi Organization of Canada v. Bernstein, 2017 ONCA 370

[Juriansz, Lauwers and Hourigan JJ.A.]

C. Linthwaite, for the appellants

G. M. Sidlofsky, for the respondents

Keywords: Costs Endorsement

Nemmour c. Toronto (City), 2017 ONCA 377

[Rouleau, Pardu and Roberts JJ.A.]

Counsel:

Mohamed Nemmour, in person

M. Cornett, for the respondents

Keywords: Endorsement, Property Law

A.B.S. v. S.A.S., 2017 ONCA 382

[Sharpe, Lauwers and Hourigan JJ.A.]

Counsel:

A.B.S., acting in person

J. Ryan for the respondent

Keywords: Endorsement, Family Law, Custody

Criminal and Ontario Board Decisions

R v. Al-Enzi, 2017 ONCA 373

[Gillese, Huscroft and Trotter JJ.A.]

A. Gold, for the appellant

D. Garg, for the respondent

Keywords: Endorsement, Criminal Law, Driving while Disqualified

R. v. Myles, 2017 ONCA 375

[Gillese, Huscroft and Trotter JJ.A.]

E. Tache-Green for the appellant

K. Farrell for the respondent

Keywords: Criminal Law, Criminal Harassment, Joint Sentencing

R. v. Saikaley, 2017 ONCA 374

[Doherty, Hourigan and Roberts JJ.A.]

Counsel:

M. Lacy and J. Wilkinson, for the appellant

J. North and I. Bell, for the respondent Attorney General of Canada

R.W. Hubbard and M. Fawcett, for the respondent Attorney General of Ontario

N. Hasan, for the intervener Criminal Lawyers’ Association

F. Addario and A. Burgess, for the intervener Canadian Civil Liberties Association

Keywords: Criminal Law, Criminal Rate of Interest, Criminal Organization, Conspiracy, Extortion, Canadian Charter of Rights and Freedoms, Search and Seizure, Unreasonable Delay, s. 8 and 11(b)

R v. Hamade, 2017 ONCA 387

[Doherty, MacFarland and Miller JJ.A.]

E. Tanny, for the appellant

J. Epstein, for the respondent

Keywords: Criminal Law, Assault with a Weapon, Evidence, Cross-examination

Starson (Re), 2017 ONCA 352

[Weiler, Feldman and Huscroft JJ.A.]

A. Szigeti and J. Berger, amici curiae

K. Doherty, for the respondent

G. S. MacKenzie, for the Person in charge of the Centre for Addiction and Mental Health

Keywords: Endorsement, Conditional Discharge

Krivicic (Re), 2017 ONCA 379

[Weiler, Feldman and Huscroft JJ.A.]

Counsel:

J. Presser,Amicus Curiae

E. Krivicic, in person

C. Harper, for the Respondent Crown

C. Blackburn, for the Respondent persons in charge of Providence Health Care Kingston and North Bay Regional Health Centre

Keywords: Not Criminally Responsible, Significant Threat to the Safety of the Public, Absolute Discharge

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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