ONTARIO COURT OF APPEAL SUMMARIES (JUNE 19 – JUNE 23, 2017)

Good afternoon,

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

In a lengthy administrative law decision in Law Society of Upper Canada v Abbott, the Court restored LSUC’s Hearing Division decision to revoke the license of a lawyer found guilty of knowingly assisting or participating in mortgage fraud.

In a pleadings motion decision in Grand River Enterprises Six Nations Ltd. v. Attorney General (Canada), the Crown appealed the motion judge’s decision to refuse to strike novel claims against it for breach of fiduciary duty, misfeasance in public office and negligence. The Court of Appeal struck the fiduciary duty claim but upheld the motion judge’s decision on the other claims.

In Parsaei v. Toronto (Police Services Board), the Court of Appeal considered a civil action against the Toronto Police Service for wrongful arrest of the appellant, who was acquitted of criminal charges. In dismissing the appeal from the motion judge’s dismissal of the claim on a motion for summary judgment, the Court of Appeal pointed out that demonstrating reasonable and probable grounds in support of an arrest and the laying of charges is far different from the Crown having to prove the factual and mental elements of an offence necessary to establish guilt beyond a reasonable doubt.

In Mroue v Mroue, the lower court enforced an arbitration award made against one brother in favour of another in Iran under Sharia Law. The Court of Appeal upheld the lower court’s decision.

Other topics covered include the standard of review from a commercial arbitration award, allegations stemming from a termination in the context of a collective agreement, and a tendering case.

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:

Civil Decisions

The Law Society of Upper Canada v. Abbott, 2017 ONCA 525

Keywords: Administrative Law, Regulated Professions, Lawyers, Disciplinary Proceedings, Penalty, Standard of Review, Reasonableness, Law Society of Upper Canada v. Mucha, 2008 ONLSAP 5, Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, Bishop v. Law Society of Upper Canada, 2014 ONSC 5057 (Div Ct)

Grand River Enterprises Six Nations Ltd. v. Attorney General (Canada), 2017 ONCA 526

Keywords: Aboriginal Law, Breach of Fiduciary Duty, Torts, Misfeasance in Public Office, Negligence, Civil Procedure, Motions to Strike, No Reasonable Cause of Action, Rules of Civil Procedure, R.R.O. 1990, Rule 21, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Odhavji Estate v. Woodhouse, 2003 SCC 69, Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, Excise Act, 2001, S.C. 2002, c. 22, Customs Act, R.S.C. 1985, c.1, Indian Act, R.S.C. 1985, c. I-5, Canada (Attorney General) v. Telezone Inc., Mackin v. New Brunswick, 2002 SCC 13, Cooper v. Hobart, 2001 SCC 79, Granite Power Corp. v. Ontario, 72 OR (3d) 194 (CA), Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41

Children’s Aid Society of Toronto v. V.D. (Publication Ban), 2017 ONCA 514

Keywords: Family Law, Child Protection, Crown Wardship, Civil Procedure, Vexatious Litigants, Rules of Civil Procedure, Rule 2.1.02, 37.16

Halliwell v. Halliwell, 2017 ONCA 506

Keywords: Costs, Appeals, Divided Success, Family Law, Property Equalization, Support

Lundy’s Regency Arms Corp. v. Niagara Hospitality Hotels Inc., 2017 ONCA 507

Keywords: Real Property, Contracts, Commercial Leases, Interpretation, Damages

Parsaei v. Toronto (Police Services Board), 2017 ONCA 512

Keywords: Torts, Wrongful Arrest, Negligent Investigation, Standard of Proof, Richardson v. Vancouver (City), 2006 BCCA 36, Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7

Mroue v. Mroue, 2017 ONCA 517

Keywords: International Arbitration, Sharia Law, Costs

Childs v. Childs, 2017 ONCA 516

Keywords: Wills and Estates, Guardianship, Personal Care, Property Litigation, Substitute Decisions Act, 1992, s 3, Orders, Variation, Rules of Civil Procedure, r. 59.06(2)(a), Courts of Justice Act, s. 133(a)

Ledore Investments Limited (Ross Steel Fabricators & Contractors) v. Ellis-Don Construction Ltd., 2017 ONCA 518

Keywords: Contracts, Breach of Contract, Commercial Arbitration, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp, 2014 SCC 53, Popack v. Lipszyc, 2016 ONCA 135, Dunsmuir v. New Brunswick, 2008 SCC 9

Salewski v. Lalonde, 2017 ONCA 515

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, S.(R.) v. H.(R.) (2000), 52 O.R. (3d) 152 (C.A.), Skunk v. Ketash, 2016 ONCA 841, Longo v. MacLaren Art Centre, 2014 ONCA 526, 323 O.A.C. 246

Graillen Holdings Inc. v. Orangeville (Town), 2017 ONCA 520

Keywords: Contracts, Tendering, Termination, Good Faith

Speck v. Ontario, 2017 ONCA 521

Keywords: Labour Law, Collective Agreements, Greivances, Dismissal, Just Cause, Weber v. Ontario Hydro, [1995] 2 S.C.R. 929

Lesenko v. Guerette, 2017 ONCA 522

Keywords: Real Property, Life Interests, Contracts, Statute of Frauds, s. 19, Unjust Enrichment, Presumption of Resulting Trust, Pecore v Pecore, 2007 SCC 17, Kerr v Baranow, 2011 SCC, Summary Judgment, Hryniak v Mauldin, 2014 SCC 7, Credibility, Trotter Estate, 122 OR (3d) 625, Baywood Homes Partnership v Haditaghi, 2014 ONCA 450

Mayers v. Khan, 2017 ONCA 524

Keywords: Torts, Negligence, MVA, Summary Judgement Motion, Negligence, Sanzone v. Schechter, 2016 ONCA 566

For Civil Endorsements, click here.

For Criminal Decisions, click here.

Civil Decisions:

The Law Society of Upper Canada v. Abbott, 2017 ONCA 525

[Sharpe, Lauwers and Miller JJ.A.]

Counsel:

S. Dewart and T. Gleason, for the appellant

J. Morton and M. Iezzi, for the respondent

Keywords: Administrative Law, Regulated Professions, Lawyers, Disciplinary Proceedings, Penalty, Standard of Review, Reasonableness, Law Society of Upper Canada v. Mucha, 2008 ONLSAP 5, Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, Bishop v. Law Society of Upper Canada, 2014 ONSC 5057 (Div Ct)

Facts:

In February 2007, a client advised the respondent that it suspected mortgage fraud in one of its transactions, and complained to the Law Society, following which a Law Society investigation was conducted for over five years. The investigation report was issued in November 2012, the disciplinary Notice of Application was issued in April 2013, and the hearing finally took place before the Hearing Division of the Law Society Tribunal over four days in August 2014.

The Hearing Division found the respondent had engaged in professional misconduct by knowingly participating in or assisting in mortgage fraud in seven transactions over a four-month period in late 2006 and early 2007; by failing to disclose material facts to his lender clients; and by failing to perform legal services to the standard of a competent lawyer. The Hearing Division ordered that his licence to practise law be revoked, but gave him the opportunity to seek a stay pending appeal.

The respondent appealed. The Appeal Division unanimously agreed that the respondent had engaged in professional misconduct, but a majority (“the Majority”) took the position that the Hearing Division had made several errors of law in assessing the effect of the Law Society’s investigative and procedural delay. The majority substituted a two-year suspension, stating that the mitigating circumstances presented by the respondent, coupled with delay, constituted exceptional circumstances that merited mitigation. The Divisional Court dismissed the Law Society’s appeal of the Appeal Division’s decision. The Law Society appealed.

Issues:

(1)  Did the Appeal Division err in allowing the respondent’s appeal from the penalty of licence revocation imposed by the Hearing Division?

(2) Did the Divisional Court err in dismissing the Law Society’s appeal of the Appeal Division’s order?

Holding:

Appeal allowed.

Reasoning:

(1) Yes. The Court first reviewed the relevant standard of review and other key principles applicable to Law Society proceedings:

The Appeal Division must review the Hearing Division’s penalty decisions on a reasonableness standard.

In determining the penalty for knowing participation in mortgage fraud, priority is to be given to the public interest in maintaining the integrity of the profession.

The presumptive penalty is licence revocation, although that penalty can be withheld in exceptional circumstances. Such circumstances will usually be personal to the member, such as medical reasons or financial desperation/duress. Those circumstances must explain why the misconduct occurred and why there is no fear of repetition.

Where delay is claimed to constitute such an extraordinary circumstance, the effect of delay must be examined via the two branches of Blencoe:

  • first, hearing fairness – whether the delay impairs the defence’s ability to make full answer and defence given the quality of the evidence; and
  • second, whether the delay gives rise to an abuse of process.

The Court held that the Hearing Division’s imposition of the presumptive penalty fell within the range of possible, acceptable and defensible outcomes that were open on the evidence. In order to justify its rejection of that outcome, the Majority was required to identify an overriding error of principle made by the Hearing Division that renders its penalty decision unreasonable. The Majority did not identify any such error of principle.

In the Court’s view, the Majority failed to: defer to the Hearing Division’s penalty decision, as it was obliged to do; pay respectful attention to the Hearing Division’s penalty reasons and consider them as a whole; and consider whether the Hearing Division’s penalty fell within the range of possible, acceptable and defensible outcomes that were open on the evidence.

First, the Court held that the core difference between the Majority and the Hearing Division was that the Majority considered it to be part of the Law Society Tribunal’s function to “curb inordinate delay”. Consequently, the Majority criticized the Hearing Division for failing to make findings of the significance of the delay, which would include the balancing of public and private interests.

The Court noted, however, that the Majority did not read the Hearing Division’s reasons fairly. Rather, the Hearing Division adverted precisely to the balance between two aspects of the public interest; namely, the public interest in the fairness of the administrative process should the proceeding go ahead, on the one hand, and on the other, the harm to the public interest in the enforcement of the legislation if the proceedings were halted. The Hearing Division carefully assessed the tension between the public interest in fairness and in enforcement, and its assessment was entirely reasonable. Accordingly, the Court concluded that the Majority erred in setting that assessment aside.

Similarly – and contrary to the Majority – the Court held that the Hearing Division recognized the need to take into account both specific and general deterrence and addressed the issue directly. Its analysis on this point was entirely reasonable.

Secondly, the Majority claimed that the Hearing Division “misdirected itself” as to the effect of delay on the penalty in light of the “widened formulation” of mitigating circumstances from Bishop. The Court held that this was not a fair reading of the Hearing Division’s penalty decision. The Hearing Division instructed itself correctly in considering the mitigating circumstances advanced by the respondent.

At bottom, the Court was of the view that the Majority simply disagreed with the weight given in Hearing Division’s reasoning to the effect of delay as an exceptional circumstance warranting mitigation in this case. The Hearing Division considered the right questions and gave cogent answers.

Lastly, the Hearing Division and the Majority disagreed about the prejudice that must be shown in order to warrant a reduction in penalty under Blencoe. The Hearing Division followed Blencoe’s requirement that exceptional circumstances must be shown, while the Majority confined Blencoe to cases where a stay of proceedings is at issue. The Court held the Majority to be erroneous in its interpretation that the more rigorous Blencoe test only applied to stays.

Rather, the Court noted, the key point made in all of the mortgage fraud lawyer discipline cases was that dishonest misconduct presumptively results in revocation. The Court then reviewed several of the cases that the Majority referred to in support of its decision that a lesser penalty was warranted, concluding that those cases cited by the Majority were all distinguishable and provided no guidance in a case where the presumptive penalty is licence revocation.

In its concluding remarks on this issue, the Court held that the Hearing Division did not make any palpable and overriding errors in apprehending the evidence, nor did it make any errors of law. Its reasons were reasonable, and its imposition of the presumptive penalty fell within the acceptable range of outcomes. The findings of the Majority instead reflected its strong resolve to impose a lesser penalty than revocation in order to send a message to the Law Society that delay is unacceptable. In doing so, the Majority exceeded its responsibility as an adjudicative body and misapprehended Blencoe. These amounted to clear errors in principle.

(2) Yes. The Court noted that it did not owe any deference to a Divisional Court decision on judicial review, as was the case here. The principal question was therefore whether the Divisional Court correctly identified the standard of review and applied it properly. The Court found that the Divisional Court failed to correctly apply proper principles of a reasonableness review, and since the Appeal Division’s decision was unreasonable, the Divisional Court therefore erred in upholding that decision.

Grand River Enterprises Six Nations Ltd. v. Attorney General (Canada), 2017 ONCA 526

[Feldman, Epstein and Miller JJ.A.]

W. Linden, C. Mohr, V. Yankou and J. Pollice, for the appellant

B. Finlay, B. Jetten, and M. Vermette, for the respondents

Keywords: Aboriginal Law, Breach of Fiduciary Duty, Torts, Misfeasance in Public Office, Negligence, Civil Procedure, Motions to Strike, No Reasonable Cause of Action, Rules of Civil Procedure, R.R.O. 1990, Rule 21, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Odhavji Estate v. Woodhouse, 2003 SCC 69, Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, Excise Act, 2001, S.C. 2002, c. 22, Customs Act, R.S.C. 1985, c.1, Indian Act, R.S.C. 1985, c. I-5, Canada (Attorney General) v. Telezone Inc., Mackin v. New Brunswick, 2002 SCC 13, Cooper v. Hobart, 2001 SCC 79, Granite Power Corp. v. Ontario, 72 OR (3d) 194 (CA), Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41

Facts:

The respondents, Grand River Enterprises Six Nations Ltd. (“GRE”) and four individuals who are shareholders of GRE and former members of the partnership that pre-existed GRE, have sued the appellant, the Attorney General of Canada (the “Crown”), for $1.5 billion in damages, plus equitable compensation in the same amount. They allege the Crown is liable for misfeasance in public office, negligence, breach of fiduciary duty and breach of aboriginal rights.

GRE was incorporated and operated on reserve to manufacture and sell tobacco products, and each of the four respondents is a status Indian and was a partner in the Grand River Enterprises partnership prior to incorporation. The Minister of National Revenue repeatedly advised the partnership that payment of excise duties and taxes was an essential precondition to obtaining a tobacco manufacturing license under the Excise Act, 2001, S.C. 2002, c. 22 (“Excise Act”), and that manufacture of tobacco products without a license would contravene the Act. This representation was wrong, and the Minister knew it was wrong. This was meant to impose tax liability where it would not otherwise exist and deprive the respondents of their rights to be free of taxation.

In 1996, criminal prosecutions were brought against the partnership and the partners for violating excise and customs legislation, and the charges, although resolved when one partner pleaded guilty to two Customs Act, R.S.C. 1985, c.1 violations, were aimed at forcing the partnership to incorporate. Additional forms of pressure were brought, such as the RCMP raiding their premises and the Crown confiscating money the partnership had paid into the Reserve’s community fund. The respondents incorporated, and later entered into an agreement with the Department of National Revenue providing that the government would carry out intensified enforcement against contraband and ensure that other on-Reserve manufacturers would abide by the same rules.

The respondents’ claims are based on two theories of liability – “forced incorporation” and “failure to enforce”.

Under the respondents’ “forced incorporation” theory, the individual respondents allege that, as a result of Crown misconduct – misconduct that amounts to misfeasance in public office and breach of fiduciary duty – they were forced into incorporating their partnership. As a result, GRE paid taxes that the individual respondents would have been exempt from paying as “Indians” under s. 87 of the Indian Act, R.S.C. 1985, c. I-5.

Under the respondents’ “failure to enforce” theory, they allege that the Crown undertook to combat the problem of contraband and counterfeit tobacco products on the Six Nations of the Grand River Reserve (the “Reserve”), but failed to do so. They claim that while the Crown adopted initiatives to combat the problem of contraband tobacco, including the 1994 Anti-Smuggling Initiative (the “Initiative”), the Crown failed to follow through, even after a promise was made to intensify enforcement against contraband to level the playing field between GRE and other on-Reserve tobacco manufacturers. They allege that the failure to implement or administer the Initiative, including the failure to properly enforce existing laws relating to the manufacture and sale of tobacco products, amounted to negligence, misfeasance in public office and breach of fiduciary duty, and caused the respondents to incur substantial losses.

The Crown moved under r. 21 of the Rules of Civil Procedure to strike the respondents’ claims on the basis of 1) lack of jurisdiction, and 2) failure to disclose any viable cause of action. The Crown’s motion was largely unsuccessful. The motion judge struck only one aspect of the claim relating to breach of aboriginal rights, with leave to amend, and granted leave to amend to add the remaining partners. Otherwise, the motion to strike was dismissed.

For jurisdictional reasons, the Crown brought two separate appeals from the motion judge’s decision.

The appeal from the refusal to strike portions of the claim on jurisdictional grounds was brought to the Court of Appeal as of right. On this appeal, the Crown argued that, in effect, the respondents, through the “forced incorporation” claims, are seeking to recover excise duties and taxes, and that such claims are barred by s. 174 of the Excise Act. The Crown also relied on s. 12 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, which gives the Tax Court exclusive jurisdiction to hear references and appeals under the Excise Act. The motion judge concluded that the Superior Court had jurisdiction to hear the forced incorporation claims (the “forced incorporation appeal”).

In the second appeal, the Crown challenged the motion judge’s refusal to strike the respondents’ tort and breach of fiduciary duty claims for failure to enforce on the basis that they disclose no reasonable cause of action. The second appeal was joined with the first appeal after the Divisional Court granted the Crown leave to appeal from the determination that those claims could proceed and then transferred the appeal to the Court of Appeal (the “failure to enforce appeal”).

Issue:

(1) The forced incorporation appeal: Did the motion judge err in concluding that the Superior Court had jurisdiction to hear the forced incorporation claims?

(2) The failure to enforce appeal: Did the motion judge err in refusing to strike the respondents’ tort and breach of fiduciary duty claims for failure to enforce on the basis that they disclosed no reasonable cause of action?

(i) Did the motion judge err in refusing to strike the respondents’ tort claim for misfeasance in public office for failure to enforce?

(ii) Did the motion judge err in refusing to strike the respondents’ tort claim for negligence for failure to enforce?

(iii) Did the motion judge err in refusing to strike the respondents’ fiduciary duty claims for failure to enforce?

Result: Appeal allowed, in part.

Reasoning:

(1) No. The Court of Appeal stated that there was no basis to interfere with the motion judge’s conclusion that the Superior Court has jurisdiction to hear the claims for relief based on the respondents’ theory of forced incorporation. A Superior Court judge cannot hear a claim caught by Excise Act, s.174, but they may decide if s.174 applies. The Court of Appeal found that at this stage of the proceedings, it was not plain and obvious that s.174 was engaged. The test, according to the Ontario Court of Appeal in Canada (Attorney General) v. Telezone Inc., 2008 ONCA 892, is whether “the Superior Court has jurisdiction, or it doesn’t have jurisdiction”.

The Court of Appeal initially rejected the respondents’ argument that, because the amounts claimed were paid by GRE, that that meant the claim should be characterized as a claim to recover duties and taxes paid under the s. 174. The Court found that s.174 does not only preclude claims by persons who actually paid taxes, but also precludes claims by any “person” from seeking to recover any “money paid”. However, the Court accepted the respondents’ submission that if they were to prove the pleaded cause of action in relation to forced incorporation, they would be entitled to damages and equitable compensation flowing from the breaches.

It was open for the Superior Court judge to hear the damages claim, as pleaded. The Court of Appeal found that just because a tax assessment may be relevant to a claim or to the assessment of damages, that does not necessarily mean that it should be characterized as a matter that goes to the Tax Court. The Tax Court cannot take misconduct into account in an appeal against assessments, and private law claims based on Crown misconduct may be heard by a provincial superior court. As such, it was open for the Superior Court judge to conclude that the Superior Court has jurisdiction because it was not plain and obvious that s.174 of the Excise Tax Act barred the claim.

(2) No to (i) and (ii). Yes to (iii). The motion judge erred in failing to strike the fiduciary claims for failure to enforce as disclosing no reasonable cause of action, but did not err in allowing the tort claims for failure to enforce to proceed to trial. The Court of Appeal, citing the Supreme Court of Canada in R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Odhavji Estate v. Woodhouse, 2003 SCC 69, and Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 first stated the test is whether the claim has no reasonable prospect of success. However, the Supreme Court of Canada in Imperial Tobacco said that motions to strike must be approached “generously”, erring on the side of allowing novel but arguable claims to proceed to trial because “actions that yesterday were deemed hopeless may tomorrow succeed”. The Court then proceeded to consider the issues:

(i) No. The Court of Appeal found that it was open for the motion judge to decline to strike the tort claim for misfeasance in public office relating to the failure to enforce. The Court of Appeal rejected the Crown’s claim that the respondents had not sufficiently pleaded the element of malice by failing to plead unlawful conduct and particulars. The Crown argued that there is no statutory duty to implement any particular law enforcement measure in any particular matter, and relied on the Supreme Court of Canada’s statement in Mackin v. New Brunswick, 2002 SCC 13, as showing that damages would not be awarded “absent conduct that is clearly wrong, in bad faith, or an abuse of power”. The Court of Appeal cited the test set out in Odhavji Estate v. Woodhouse, 2003 SCC 69 at paragraph 32, in considering misfeasance in public office:

“[T]he tort of misfeasance in a public office is an intentional tort whose distinguishing elements are twofold: (i) deliberate unlawful conduct in the exercise of public functions; and (ii) awareness that the conduct is unlawful and likely to injure the plaintiff. Alongside deliberate unlawful conduct and the requisite knowledge, a plaintiff must also prove the other requirements common to all torts. More specifically, the plaintiff must prove that the tortious conduct was the legal cause of his or her injuries, and that the injuries suffered are compensable in tort law.”

In reviewing this test, the Court of Appeal found that there is no requirement for a breach of a statutory duty to make out a claim for misfeasance in public office, and that conduct by a public officer may be unlawful even where there is no positive duty to act.

In dismissing the appellant’s argument that the proper particulars of the tort had not been pleaded, the Court also found that the respondent’s failure to identify the Ministers responsible for the alleged misfeasance was not fatal to the claim because it is difficult to expect the respondents to be specific at the pleadings stage. The Court also found that the pleading disclosed the cumulative effect of the Crown’s course of conduct sufficient to satisfy the requirement of bad faith to be present to satisfy the requirement for particulars. The Court said that pre-existing malice or bad faith at the forced incorporation stage could be said to underlie the later failure to enforce. As such, the motion judge did not err in allowing the misfeasance in public office claim to proceed to trial.

(ii) No. The motion judge did not err in concluding that a negligence claim should be permitted to proceed to trial. As the respondents asserted a novel duty of care, the Court of Appeal applied the two-part test from Cooper v. Hobart, 2001 SCC 79, looking under the first step to see if the harm that occurred was the reasonably foreseeable consequence of the defendant’s act, and if there are reasons, notwithstanding the proximity between the parties established, that tort liability should not be recognized. The Court said that it was not plain and obvious that the claim could not succeed. The case was differentiated from the Court of Appeal’s decision in Granite Power Corp. v. Ontario, 72 OR (3d) 194 because the respondents had pleaded that there was a clear agreement between themselves and the government and legislative scheme was relied on as the basis for imposing a duty of care.

The Court of Appeal also found that it was not plain and obvious that ministers could not hold a private law duty of care based on Odhavji. There was some direct involvement between the Minister and the respondents. It was also not plain and obvious that the negligence claim should be struck on the basis that discretionary public law duties to enforce law cannot give rise to a private law duty sufficient to ground an action in negligence. The respondents alleged a systemic failure by Ministers to enforce legislation with specific interactions giving rise to the duty of care. Finally, the Court found that it was not plain and obvious, applying the Supreme Court of Canada’s decisions in Imperial Tabacco and  Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41, that the public duties or duties to police and prosecutors would conflict with the private duties owed by the Minister in this case.

The Court then looked to see if there were any residual policy considerations outside the relationship of the parties that may negative the imposition of a duty of care. The Court first found that there was a reasonable chance that the matter may not turn out to be a matter of policy, rejecting the Crown’s argument that it would engage a matter of core policy. The Court also rejected the Crown’s argument that concerns about indeterminate liability were a basis for striking the claim, and concluded that it was open for the motion judge to decline to strike the claim for negligence for the failure to enforce.

(iii) Yes. The motion judge erred in failing to strike the fiduciary claims as disclosing no reasonable cause of action because it was plain and obvious that the fiduciary duties, as pleaded, do not satisfy the tests for establishing a fiduciary duty as set out in Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14. The Supreme Court of Canada described the two tests at paragraphs 49 – 50 as:

“In the Aboriginal context, a fiduciary duty may arise as a result of the “Crown [assuming] discretionary control over specific Aboriginal interests”: Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511, at para. 18. The focus is on the particular interest that is the subject matter of the dispute: Wewaykum Indian Band v. Canada, 2002 SCC 79, [2002] 4 S.C.R. 245, at para. 83. The content of the Crown’s fiduciary duty towards Aboriginal peoples varies with the nature and importance of the interest sought to be protected: Wewaykum, at para. 86.

A fiduciary duty may also arise from an undertaking, if the following conditions are met:

(1) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries; (2) a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries); and (3) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control.”

The Court noted that the Supreme Court in Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 stated that it will be rare that a Crown actor will owe a fiduciary duty and that the Court should apply a rigorous test at the pleadings stage in assessing the fiduciary claims.

The Court found that the plaintiff was unable to show that the Minister owed an ad hoc fiduciary duty under the second test because the alleged agreement or undertaking pleaded did not amount to an undertaking that would give rise to a fiduciary duty. The undertaking did not amount to an undertaking of responsibility to act in the best interest of the fiduciary within the meaning of Elder Advocates because it was not an “undertaking of loyalty to act in the beneficiaries’ best interests”. It was merely an undertaking to treat everyone equally. The motion judge had ignored this requirement, and as such, erred in concluding that it was not plain and obvious that the fiduciary duty claim should have been struck.

The Court, for the purposes of completeness, also concluded that the final prong in establishing an ad hoc fiduciary duty recognized in Elder Advocates at paragraph 36 that there be “a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control” was not met. Agreeing to enforce laws against third parties did not meet this standard because it is not analogous to the direct administration of specific private law interests.

Finally, the Court dismissed the respondent’s argument that a fiduciary duty was established under the “Wewaykum test” where the Crown assumed discretionary control over a specific or cognizable aboriginal interest. The Court found that the harm from the claim related to GRE instead of the individual respondents who are said to have aboriginal rights. This meant that the breach of the individual respondents’ rights stemmed from the forced incorporation rather than the failure to enforce. Therefore, it was plain and obvious that the Crown did not assume discretionary control over specific aboriginal interests.

Children’s Aid Society of Toronto v. V.D. (Publication Ban), 2017 ONCA 514

[Rouleau, Hourigan and Benotto JJ.A.]

Counsel:

V.D., acting in person

P.V., acting in person

L . Hayes, for the responding party

Keywords: Family Law, Child Protection, Crown Wardship, Civil Procedure, Vexatious Litigants, Rules of Civil Procedure, Rule 2.1.02, 37.16

Facts:

VD and PV’s child was apprehended by the Children’s Aid Society (CAS) in 2011, when he was three years old. He has now been in child protection for six years. He was displaying signs of significant delay in all areas of functioning and his situation was described as “severe neglect”. By order dated July 29, 2015, the trial judge found him in need of protection and made him a Crown ward. Two parenting capacity assessments were conducted for his father and three for his mother. They were both found not to have the capacity to be a caregiver to their son. The CAS obtained a restraining order to prevent the mother from harassing the child’s foster parents.

The parents appealed the order of the trial judge to the Superior Court of Justice, asserting that he was biased, had misdirected himself, and had erred in law in numerous respects. The Superior Court of Justice found there was no merit to the grounds of appeal and dismissed it. The parents are now appealing to the Court of Appeal, and seeking various orders for relief. The panel declined to grant any of the requested relief and dismissed the appeal on its merits. The mother now moves for a reconsideration of the appeal and to have a new trial, resuming allegations of bias on the part of the trial judge, misfeasance by the expert witnesses, and defamation against her.

Issues:

(1) Did the trial judge show bias and err in making the child a Crown ward?

(2) Should the motion to re-open the appeal be dismissed for delay or as frivolous, vexatious or otherwise and abuse of process of the court under r.2.1.02?

Holding: Appeal dismissed.

Reasoning:

(1) No. The Court of Appeal held that the appeal should be dismissed for two reasons. First, it lacked merit. It is the third appeal sought from the order of the trial judge, and previous appeals on the same grounds had been dismissed twice. Second, the delay in the mother’s actions were damaging to the child and contrary to the imperatives of child protection legislation, which requires matters be held to strict timelines.

(2) Yes. The Court held the parents must be precluded from launching further motions without leave. The motion was dismissed as frivolous, vexatious and an abuse of process under rule 2.1.02 of the Rules of Civil Procedure and her actions in pursuing this matter seriously impact the well-being of the child. Moreover, the Court found the appellant to be attempting to delay the proceedings by a multiplicity of frivolous motions. As such, the Court ordered that the parents are prohibited from making any further motions in relation to the child protection proceeding, without leave, under rule 37.16 of the Rules of Civil Procedure.

Halliwell v. Halliwell, 2017 ONCA 506

[Gillese, Pepall and Roberts JJ.A.]

Counsel:

D. Ditchfield, for the appellant

R. Bickle, for the respondent

Keywords: Costs, Appeals, Divided Success, Family Law, Property Equalization, Support

Facts:

The result of the partially successful appeal was that the equalization payment ordered at trial remained, but the amount of spousal support was reduced. Since the appeal had been allowed in part, it was necessary to consider the costs of the appeal but also the costs award at trial.

Issues:

(1) Should the trial costs be altered?

(2) Should the costs of the appeal be altered?

Holding: Costs awarded to appellant.

Reasoning:

(1) No. The court was reluctant to disturb the trial costs since it knew the quantum was based on the consent of the parties.

(2) Yes. Despite the fact that the appellant was wholly unsuccessful on the appeal of the equalization payment and failed on a number of grounds of appeal relating to spousal support, he was successful in having the quantum of spousal support reduced on appeal. Thus, the appellant was prima facie entitled to some part of his partial indemnity costs. The court awarded the appellant $21,000, but refused his request to have the costs of appeal applied against the trial costs.

Lundy’s Regency Arms Corp. v. Niagara Hospitality Hotels Inc., 2017 ONCA 507

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

J. Macfarlane and C. Peddle, for the appellant

P. Mahoney, for the respondents

Keywords: Real Property, Contracts, Commercial Leases, Interpretation, Damages

Facts:

The appellants, Niagara Hospitality Inc., as tenant, and Kerrio Corporation, as guarantor, appeal a judgment ordering them to pay $4,247,467.42 in damages and pre- and post-judgment interest to the respondents Lundy’s Regency Arms Corp., as landlord, and two related number companies. The trial judge concluded that the appellant breached the repair and maintenance provisions of the lease.

Issues:

(1) Did the trial judge err by finding that the lease imposed an obligation to maintain the premises to an “enhanced standard” of repair?

(2) Did the respondents present evidence of the premises’ state of repair at the commencement of the lease term?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge referred to several sets of words and phrases in the lease, as well as to the underlying use of the leased premises, to support this conclusion.

(2) No. However, the trial judge concluded that there was sufficient evidence to establish a basis for comparing the state of the leased premises at the beginning and end of the lease. This evidence included the tenant’s/ “sellers” representations and warranties, a 2004 inspection report, sworn testimony, and the appellant’s unwillingness to undertake the significant repairs that would have been required to maintain their franchises with Days Inn hotel and Denny’s restaurant.

Parsaei v. Toronto (Police Services Board), 2017 ONCA 512

[Blair, MacFarland and Hourigan JJ.A.]

Counsel:

J.C. Morton, for the appellant

R.L. Bush and K. Shani, for the respondent

Keywords: Torts, Wrongful Arrest, Negligent Investigation, Standard of Proof, Richardson v. Vancouver (City), 2006 BCCA 36, Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7

Facts:

The appellant and two other women, Linda Pitney, and Carole Tovell, were charged criminally in connection with (i) a series of threatening letters that were posted around, and mailed to residents who lived in the area of Perth Avenue Public School in Toronto, (ii) a series of related hostile and harassing phone calls made to staff and the principal of the school and to members of the Toronto District School Board, and (iii) a harassing letter sent to a member of the Board.

Detective Constable MacPhail was the member of the Toronto Police Services assigned to investigate the threats. Following the investigation, all three women were charged with a number of related offences. The appellant was acquitted but required to enter into a Peace Bond.

Thereafter, the appellant launched civil actions against the Toronto Police Services Board, Detective Constable MacPhail, and others. This led to the defendants’ motions for summary judgment that resulted in the judgment under appeal. The motion judge granted summary judgment because there was no genuine requiring trial. Based on the evidence before her, she found that Detective Constable MacPhail had reasonable and probable grounds to believe that the appellant had committed the offences with which she was charged. Accordingly, the appellant’s claim could not succeed.

Issues:

(1) Did the motion judge err in granting summary judgment?

(2) Did the motion judge err in finding that the police had reasonable and probable grounds to lay the charges in the first place?

Holding: Appeal dismissed.

Reasoning:

(1) No. The Court of Appeal relied on the direction provided by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, at paras. 49 and 66, that summary judgment is to be granted where the record enables the motion judge to reach a fair and just determination on the merits and to do so in a timely, more affordable, and proportionate manner.

On a motion for summary judgment each party is obliged to put its best case forward. It is no answer for the appellant to say that contested facts had not been subject to cross-examination; she had ample time to cross-examine Detective Constable MacPhail on his affidavit, but did not do so.

(2) No. The Court of Appeal held that there was ample evidence to support the motion judge’s finding that the police had reasonable and probable grounds to arrest the appellant and to lay the charges. That evidence included (i) the exhaustive affidavit of Detective Constable MacPhail; (ii) the transcripts of the preliminary hearing and the trial; (iii) the information that Detective Constable MacPhail had consulted two Crown attorneys prior to laying the charges and had been advised that there was ample evidence to support his doing so; and (iv) the reasons of the trial judge following the trial.

The Court of Appeal held that the findings of the trial judge, even in acquitting the appellant, would support a determination that the police had reasonable and probable grounds to lay charges. In concluding his analysis of the evidence, the trial judge said:

I am not for a moment saying the two women are innocent. In Scotland they have three verdicts, guilty, not guilty and not proven. To me this is a case of just not proven. I am deeply suspicious but I am simply not convinced beyond a reasonable doubt, so on these charges they are acquitted.

Demonstrating reasonable and probable grounds in support of an arrest and the laying of charges is not the same thing as the Crown having to prove the factual and mental elements of an offence necessary to establish guilt beyond a reasonable doubt. The Court stated that the mistake in conflating the issues pertaining to criminal responsibility and those pertaining to the civil liability of police is well-summarized by the British Columbia Court of Appeal in Richardson v. Vancouver (City), 2006 BCCA 36 – a case involving an allegedly wrongful arrest on a charge of obstructing justice – at para. 20:

There is no logical relationship between the criminal and civil determinations; they are each aimed at different questions: “Did the accused obstruct?” is not the same as “Did the officer have reasonable and probable grounds to believe he did?”

The Court found that those comments applied with equal validity in this case and dismissed the appeal.

Mroue v. Mroue, 2017 ONCA 517

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

E.G. Tannis, for the appellants

C. Spiteri and J.E. MacDonnell, for the respondent

Keywords: International Arbitration, Sharia Law

Facts:

The underlying trial concerned an arbitration decision as between the appellant and respondent that took place in Iran under Sharia Law. The appellant sought to address the same issues that were dealt with at the arbitration at the trial in Ontario. The trial judge held that the arbitration decision was final in nature and there was no reason why the appellant should not be estopped from asserting the same issues in the Ontario action that had been determined by the arbitrator in Iran.

Issues:

(1) Did the trial judge err in dismissing the claim on the basis that the issues had already been determined in the arbitration in Iran?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge relied on the evidence before him without error and is entitled to deference. In coming to his conclusion, the trial judge found that all four conditions for a binding ruling according to Sharia Law had been met, those four criteria being:

  1. The parties agreed to proceed by way of arbitration;
  2. The arbitrator was qualified;
  3. The arbitrator had jurisdiction to rule on property disputes deriving from the payment of money;
  4. The parties agreed on the question to be put to the arbitrator.

In addition, all parties agreed to the arbitration and accepted that the judgment of the arbitrator would be binding upon them. Therefore, there was now no reason for the appellant to seek a different outcome on the same set of facts

Childs v. Childs, 2017 ONCA 516

[Gillese, Huscroft and Trotter JJ.A.]

Counsel:

Peter Childs and Caroline Childs, in person

Michael Childs and Andrew Childs, in person

A.V. Mayeski, for BMO Trust Company

D. Stephens and K. Handler, for the intervener Wendy Griesdof

R. Coutinho, for the Public Guardian and Trustee

Keywords: Wills and Estates, Guardianship, Personal Care, Property Litigation, Substitute Decisions Act, 1992, s 3, Orders, Variation, Rules of Civil Procedure, r. 59.06(2)(a), Courts of Justice Act, s. 133(a)

Facts: Mrs. Childs has Alzheimer’s disease. These two appeals are brought by her four children, who disagree about her care. Michael and Andrew brought an application in which they sought a declaration of Mrs. Childs’ incapacity, revocation of existing powers of attorney, and their appointment as guardians of their mother’s personal care and property. Peter and Caroline responded with an application in which they sought to have Peter appointed as guardian of Mrs. Childs’ property and Caroline as her guardian for personal care. In addition, they sought the appointment of counsel for their mother under s. 3 of the Substitute Decisions Act.

On consent, the applications judge found Mrs. Childs incapable in terms of management of personal care and property. Caroline was appointed guardian of personal care and BMO Trust Company was appointed guardian of property. Michael was appointed litigation guardian. The remaining issue was Caroline’s compensation for the care she had provided and would provide to her mother. The applications judge held she was to be paid $25,000 for the care she had provided, and $500 per month going forward. Peter and Caroline had to pay part of Section 3 Counsel’s cost, part of Michael and of Andrew’s costs, and had to bear their own costs, since it was their decision to litigate that issue.

Shortly after, Caroline indicated that she was in the process of arranging full-time professional care for Mrs. Childs. Section 3 Counsel brought a motion to vary under r. 59.06(2)(a) of the Rules of Civil Procedure seeking an order to set aside Caroline’s appointment as guardian of Mrs. Childs’ personal care on the ground of new facts arising. The applications judge appointed Michael as an additional guardian of Mrs. Childs’ personal care, and increased Caroline’s compensation to $50,000.00 per year. Peter and Caroline had to pay for 50% of Section 3 Counsel’s costs, 50% of BMO’s costs, 50% of Michael and Andrew’s costs, and had to bear their own costs. Peter brought a motion to compel the passing of accounts by BMO, which was dismissed.

Prior to the hearing of the appeals, five more motions were brought. Peter and Caroline moved for leave to appeal (1) the Costs order (2) the Vary Motion Ruling, and (3) the Vary Motion Costs Order. Peter moved for leave to appeal (4) the decision rendered in the Passing of Accounts Motion. Section 3 Counsel moved for (5) leave to intervene on the appeals. Leave to appeal the Costs order was granted on the issue of personal liability only and not on quantum. Leave to appeal the Vary Motion Ruling was granted. Leave to appeal the Vary Motion Costs order was granted but again on liability only. Peter withdrew his motion for an order compelling the passing of accounts by BMO. Leave for Section 3 Counsel to intervene was granted, as serious allegations concerning her conduct were being made. Peter and Caroline moved to set aside or vary this decision. The Court of Appeal ordered that the review motion be heard in conjunction with the appeals.

Issues:

Review Motion

(1) Did Simmons J.A. err in finding the quantum of costs could not be argued?

(2) Did Simmons J.A. err in striking certain parts of the materials submitted?

(3) Did Simmons J.A. err in permitting Section 3 Counsel to intervene on the appeal?

C62716 Appeal

(1) Did the application judge err in appointing BMO as guardian of Mrs. Childs’ property?

(2) Did the application judge err in appointing Michael as Mrs. Childs’ litigation guardian?

(3) Did the application judge err in his award of compensation for past personal care services to Caroline?

(4) Is there a reasonable apprehension of bias on the part of the application judge?

C61581 Appeal

(1) Did the application judge err in jointly appointing Michael and Caroline as guardians to Mrs. Childs’ personal care?

(2) Was there improper conduct on the part of Section 3 Counsel?

(3) Did the application judge err in hearing the Vary Motion?

(4) Did the application judge err in finding that Section 3 Counsel had acted commendably throughout?

Holding: Review Motion and Appeals dismissed.

Reasoning:

Review Motion

(1) No. An award of costs is a discretionary matter entitled to significant deference by appellate courts. The court held there was no error in principle in the quantum of costs awarded, nor was it plainly wrong.

(2) No. The Court found the materials struck pertained to the quantum of costs, for which the court found there was no basis for interfering. Moreover, the materials had not been filed in the court below, and the general rule is that such materials are inadmissible.

(3) No. The Court held that this decision was the exercise of Simmons J.A.’s discretion and was entitled to deference on review.

C62716 Appeal

(1) No. The Court found BMO had been appointed as the guardian of Mrs. Childs’ property on consent of all of the parties. An appeal from a consent order would require leave of the court to which the appeal is to be taken. No such consent was sought, and on consideration the court refused to grant it. The Court held there was great judicial resistance in granting leave to appeal consent orders, and evidence of factors such as fraud, duress or undue influence was needed, none of which were present here.

(2) No. The Court held the applications judge had exercised a discretionary power and thus, the decision warranted deference.

(3) No. The Court found the claim in unjust enrichment failed because the application judge found that Caroline had gratuitously provided the care in question for her mother.

(4) The Court held there was a strong presumption of judicial integrity. A party who alleged a reasonable apprehension of judicial bias had to provide the court with “cogent evidence” that an informed person, viewing the matter realistically and practically, and “having thought the matter through”, would conclude that the judge’s impugned conduct would cause a reasonable apprehension of bias. The Court held Peter and Caroline’s submissions on this ground of appeal did not rise to the requisite level.

C61581 Appeal

(1) No. The Court held that the application judge had exercised a discretionary power and thus, the decision warranted deference. Moreover, Caroline had consented to sharing the role of guardian for personal care.

(2) No. The Court categorically rejected the suggestion that Section 3 Counsel failed in her duties.

(3) No. The Court saw no error in the application judge’s determination that the variation motion fell within the scope of r. 59.06(2)(a). The court found he had done so because Caroline had indicated to all parties that she would continue to live with and care for her mother in her mother’s home, whether or not her claims for compensation for such care were granted by the court. Caroline’s intentions to arrange full-time professional caregivers for her mother while she sought outside employment stood in direct contrast of those representations, and met the requirements of r. 59.06(2)(a).

(4) No. The Court held that Section 3 Counsel had discharged her professional obligations well and with patience, dignity and integrity.

Ledore Investments Limited (Ross Steel Fabricators & Contractors) v. Ellis-Don Construction Ltd., 2017 ONCA 518

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

W. MacDougall and R. Joffe, for the appellants

A. D’Ascanio, for the respondent

Keywords: Contracts, Breach of Contract, Commercial Arbitration, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp, 2014 SCC 53, Popack v. Lipszyc, 2016 ONCA 135, Dunsmuir v. New Brunswick, 2008 SCC 9

Facts:

In a major bridge construction project in southwestern Ontario, the respondent was the general contractor and the appellant was a subcontractor supplying steel to the project. The underlying dispute arose out of the final subcontract accounting between the parties. The respondent wrote to the appellant a number of times about delay and ultimately withheld some funds.

The parties referred their dispute to a commercial arbitrator. Both parties relied on an article of the subcontract to say that the other party was estopped from raising certain delay claims. The arbitrator agreed with both parties’ assertions on the estoppel issue.

The appellant accepted the arbitrator’s decision. The respondent did not and subsequently appealed the commercial arbitrator’s decision. The appeal judge allowed the respondent’s appeal from the arbitrator’s award. The appellant appeals that decision.

Issues:

(1) Is the standard of review of a commercial arbitrator’s decision reasonableness?

(2) Did the appeal judge err by determining that the arbitrator’s decision was unreasonable?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The standard of review on appeal from a commercial arbitration award will generally be reasonableness. However, the appellant mistook the appeal judge’s use of the word “erred”, while describing the commercial arbitration’s award, to mean that she applied a standard of correctness. The appeal judge explicitly framed the legal issues in terms of reasonableness and applied the proper test in her analysis.

(2) Yes. The principal focus must be on the arbitrator’s decision, which was reasonable. The question of whether the respondent advanced a “claim” for delay in writing within the time permitted under the subcontract is a question of mixed law and fact. The question required the arbitrator to both interpret the article, and to decide whether the language contained in the respondent’s letters was sufficient to constitute a “claim”. The arbitrator was aware of the cases the respondent relied on in this appeal and did not ignore or misperceive them. In fact, the arbitrator’s decision was consistent with the principal case relied on by the respondent.

Salewski v. Lalonde, 2017 ONCA 515

[Simmons, Rouleau and Roberts JJ.A.]

Counsel:

A. Tomkins and A.M. Tardif, for the appellants

R. De Toni and J.D. Dempster, for the respondent

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, S.(R.) v. H.(R.) (2000), 52 O.R. (3d) 152 (C.A.), Skunk v. Ketash, 2016 ONCA 841, Longo v. MacLaren Art Centre, 2014 ONCA 526, 323 O.A.C. 246

Facts:

According to the facts as pleaded, the respondent, Doyle Salewski Inc. (“DSI”), is a trustee in bankruptcy. In its statements of claim, issued in July 2015, DSI alleges that in 2010 or early 2011, Golden Oaks began a real estate “rent-to-own” program. DSI claims that following investigation, it learned that Golden Oaks was engaged predominately in the business of selling promissory notes to investors and that this activity generated over 96% of its revenue.

In its action against the appellants, Monique Lalonde and Paul Lalonde (collectively “the Lalondes”), DSI alleges that the Lalondes loaned money to Golden Oaks at usurious rates of interest. DSI claims that the usurious interest paid by Golden Oaks is “misappropriated monies of stakeholders” which should be returned to DSI, representing the interests of all stakeholders. DSI relies on s. 347 of the Criminal Code and claims the return of usurious interest based on the doctrine of unjust enrichment.

In its action against the appellant, Lorne Scott, DSI alleges that Scott is a licensed real estate agent who received commissions from Golden Oaks for referring investors to Golden Oaks. DSI claims that the commissions are unlawful and contrary to the Securities Act, R.S.O. 1990, c. S.5, because Scott is not licensed to sell promissory notes, or receive remuneration for their sale. DSI claims that the commissions paid by Golden Oaks are “misappropriated monies of stakeholders” which should be returned to DSI, representing the interests of all stakeholders. In addition, DSI relies on unjust enrichment to claim recovery of commissions paid to Scott.

The Motion to Strike

In their notice of motion, the appellants sought an order striking the claims for usurious interest and unlawful commissions and striking amendments made to the Scott statement of claim prior to service. The motion judge dismissed the appellant’s motion.

The Appeal

The appellants appealed the order dismissing their motion and granting a cross-motion permitting amendments to several statements of claim. During oral argument, the Court of Appeal raised the issue of whether the order appealed from was final or interlocutory and, therefore, where it had jurisdiction to hear the appeal. It heard submissions on the merits and reserved its right on the question of jurisdiction.

The appellants’ position on jurisdiction

The appellants submitted that the order under appeal was final because their written and oral submissions on the motion sought a determination of a question of law under rule 21.01(1)(a), that the usurious interest claims and the unlawful commissions claims are statute-barred. Relying on Beardsley v. Ontario (2001), 57 O.R. (3d) 1 (C.A.), at para. 21, the appellants argued that a claim can be struck under rule 21.01(1)(a) based on the expiry of a limitation period “where it is plain and obvious from a review of a statement of claim that no additional facts could be asserted that would alter the conclusion that a limitation period had expired”.

Relying on ss. 30(1)(d), 67 and 71 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, and other jurisprudence, the appellants also submitted that where claims such as these are advanced by a trustee in bankruptcy, there can be no question but that the trustee in bankruptcy steps into the shoes of the bankrupt. The appellants also argued that the motion judge’s reasons for dismissing their motion to strike finally determined that (i) the respondent is not a person advancing its claims through a predecessor in right, title or interest under s. 12 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., (the “Limitations Act, 2002”) and (ii) the limitation clock therefore runs based on the respondent’s knowledge of the claims, rather than the bankrupts’ knowledge of the claims. The appellants further asserted that the motion judge’s finding that the respondent was not a person claiming through a predecessor under s. 12 of the Act will make that issue res judicata or subject to issue estoppel.

The respondent’s position on jurisdiction

The respondents agreed with the appellants that the order permitting them to amend their statements of claim was final and gave rise to a claim of res judicata or issue estoppel on the question forming the subject matter of the appellants’ appeal.

Issues:

  • Is the order under appeal a final order?
  • If not, should the Court reconstitute itself as a panel of the Divisional Court and hear the appeal?

Holding: Appeal quashed.

Reasoning:

(1) No. Firstly, although the motion judge’s reasons contain certain findings, the reasons do not include a disposition section in which the motion judge formally invokes rule 21.01(1)(a) and purports to determine a question of law. The Court of Appeal found that the notice of motion to strike invoked only rule 21.01(1)(b) and the formal order simply dismissed the motion. On the face of those documents, the order under appeal was interlocutory: S.(R.) v. H.(R.) (2000), 52 O.R. (3d) 152 (C.A.).

Secondly, although the motion judge referred in his reasons to the appellants’ submissions premised on rule 21.01(1)(a), the Court of Appeal was not persuaded that, read fairly, his reasons for dismissing their request for a determination that the limitation period for the unjust enrichment claims had expired reveal an intention to make a binding determination. Moreover, the Court of Appeal held that the motion judge was not in a position, on a pleadings motion, to make binding determinations of fact.

The Court of Appeal reiterated that in the absence of an express indication by the motion judge that any conclusions expressed in dismissing a motion for summary judgment are intended to be binding on the parties, it should be presumed that they are not: Skunk v. Ketash, 2016 ONCA 841, 94 C.P.C. (7th) 141, at para. 58.

Thirdly, the Court of Appeal was not satisfied that the motion judge had authority to make a binding determination under rule 21.01(1)(a). The basic limitation period established by the Limitations Act, 2002 is premised on the discoverability rule, which raises issues of mixed fact and law: Longo v. MacLaren Art Centre, 2014 ONCA 526, 323 O.A.C. 246, at para. 38. The Court of Appeal reasoned that although the respondent had delivered a statement of claim, it was not yet clear what allegations it would make in response to a limitations defence.

In the Court of Appeal’s view, the appellants’ motion was premature. Therefore, the motion judge’s reasons for dismissing the appellants’ motion should not be read as a final determination of the limitations issue in favour of the respondent giving rise to res judicata or issue estoppel.

(2) No. Since the appellants’ motion was premature, it was not appropriate for the Court of Appeal to seek permission from the Chief Justice of the Superior Court to reconstitute itself as a panel of the Divisional Court.

Accordingly, the appeal was quashed.

Graillen Holdings Inc. v. Orangeville (Town), 2017 ONCA 520

[Simmons, Rouleau and Roberts JJ.A.]

Counsel:

P.D. McCutcheon and C.A. Snider, for the appellants

J.R. Hart and E. Lidakis, for the respondent

Keywords: Contracts, Tendering, Termination, Good Faith

Facts:

The appellants, Graillen Holdings Inc. (“Graillen”) and Region of Huronia Environmental Services Ltd. (“Rohe”),  appeal from the dismissal of their action for damages arising out of the respondent Town’s 2010 tendering process and the termination of an agreement of purchase and sale. In 2010, the Town put collection, haulage, storage and disposal services out for tender. It also entered into an agreement of purchase and sale with Graillen, to purchase its lagoons for storage of the Town’s biosolids waste. The agreement contained a termination clause that the Town could exercise at its sole discretion. In response to the 2010 tendering process, the Town received bids from the appellants, and another company, Entec Waste Management Inc. (“Entec”). Entec’s bid proposed a new form of dewatering process, which would obviate the Town’s need for storage of its biosolids waste, and, as a result, the Town’s reason to purchase Graillen’s lagoons. Entec’s bid was less expensive than Rohe’s. The Town awarded the contract to Entec and terminated the agreement of purchase and sale with Graillen.

The trial judge found that the Entec bid was non-complaint because it had failed to include certain documents and that, by accepting Entec’s bid, the Town had thereby breached the 2010 tendering process. However, the trial judge determined that the appellants were not entitled to damages because they failed to demonstrate that they would have been awarded the contract by the Town. The trial judge concluded that the Town would have instead re-tendered the contract.

Issues:

(1) Did the trial judge err in concluding that the tender contract would not have been awarded to Rohe, as the compliant bidder?

(2) Did the trial judge err in concluding that the Town terminated the agreement of purchase and sale reasonably and in good faith?

Holding: Appeal dismissed.

Reasoning:

(1) No. The Court of Appeal found that it was open for the trial judge to reach this conclusion based on the evidence. First, the trial judge found that the appellants had not met their onus of showing on a balance of probabilities that the contract would have been awarded to Rohe. Second, the 2010 tendering process had disclosed to the Town that its preferred option of adopting a dewatering process was viable, and therefore could be the subject of a new and different tendering process. Third, Rohe’s tender suffered from similar problems to those which occurred during the Town’s 2005 tendering process. These problems included the appellant’s desire to re-negotiate the length of the contract and a lack of clarity regarding the price and volume of Rohe’s bid as submitted. Fourth, the Town had time to re-tender as its contract with the appellants did not expire until later in 2010. Moreover, the Town had waste storage capacity until 2011.

(2) No. The Court of Appeal saw no basis to interfere with the trial judge’s findings. Once the Town decided to adopt the dewatering process, the purchase of Graillen’s lagoons was no longer required and made no economic sense. Furthermore, the Town’s exercise of its option to terminate the agreement was made for legitimate business reasons and in good faith, with the understanding that at the time, the Entec bid was compliant.

Speck v. Ontario, 2017 ONCA 521

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

Counsel:

T. Speck, in person

D. Mayer, for the respondents

Keywords: Labour Law, Collective Agreements, Greivances, Dismissal, Just Cause, Weber v. Ontario Hydro, [1995] 2 S.C.R. 929

Facts:

The appellant was a unionized Crown employee until 2014 when his employment was terminated following a third-party investigation into alleged misconduct. He brought claims of conspiracy to injure and unlawful means conspiracy, misfeasance in public office, abuse of process, defamatory libel, and slander. The respondents successfully brought a motion under Rule 21.01(3) of the Rules of Civil Procedure to dismiss the appellant’s claims on the basis that they fell under the terms of the collective agreement and therefore were within the exclusive jurisdiction of the Grievance Settlement Board. The motion judge held the essential nature of the claim arose out of the collective agreement.

Issues:

(1) Did the motion judge err in determining that the claim arose out of the collective agreement?

Holding: Appeal dismissed.

Reasoning:

(1) No. The motion judge did not err in applying the legal test or in characterizing the pleadings in this claim as arising out of the collective agreement. The Crown did not step outside the collective agreement when it suspended the appellant under the Public Service of Ontario Act.

Suspensions fall within the interpretation, administration, application or violation of the collective agreement, even if non-disciplinary. The collective agreement expressly stipulated that no employee shall be disciplined or discharged without just cause. As a result, it is implicit that the Crown’s managerial rights extend to investigating allegations of wrongdoing to determine if there is just cause to discipline or discharge an employee.

The third-party investigator’s conduct is properly characterized as falling within the disciplinary procedures of the collective agreement. In Weber v. Ontario Hydro, [1995] 2 S.C.R. 929, at paras. 74-78, the Court rejected the argument that hiring a private firm to investigate took the matter outside the scope of the collective agreement because, as was in this case, the essential character of the investigation fell within the ambit of the agreement.

Lesenko v. Guerette, 2017 ONCA 522

[Rouleau, Trotter and Paciocco JJ.A.]

Counsel:

K.A. MacLean, for the appellants

S. Johal, for the respondent

Keywords: Real Property, Life Interests, Contracts, Statute of Frauds, s. 19, Unjust Enrichment, Presumption of Resulting Trust, Pecore v Pecore, 2007 SCC 17, Kerr v Baranow, 2011 SCC, Summary Judgment, Hryniak v Mauldin, 2014 SCC 7, Credibility, Trotter Estate, 122 OR (3d) 625, Baywood Homes Partnership v Haditaghi, 2014 ONCA 450

Facts:

The appellants are husband and wife and the respondent is the appellant’s sister. In 2009, the parties agreed to sell their homes and purchase a home together. The respondent sold her house and a portion of the proceeds were used to purchase the subject property. The appellants and the respondent had agreed that they would jointly occupy the property. The appellants were identified in the agreement of purchase and sale as buyers of the property, but the whole of the purchase price, as well as the land transfer tax and the solicitor’s fees and disbursements, were paid out of the proceeds of sale of the respondent’s property. The respondent’s name did not appear in the agreement of purchase and sale nor on title. According to the respondent, she also invested money towards renovation of the property. The appellants claim they paid a substantial amount in materials and labour towards the renovation and that they had worked on the property.

The respondent moved out of the property and now claims the funds were advanced pursuant to an oral agreement with the appellants, which provided each of the three parties would have a one-third ownership interest in the property. Two-thirds of the amount of the purchase price was a loan to the appellants. The appellants claim the agreement was that the respondent would pay for the purchase price in exchange for the entitlement to live on the property for the rest of her life, under the understanding that the appellants would pay for the bulk of the renovations and all future ownership costs.

The motion judge reasoned that the respondent would not have agreed to pay the whole of the purchase price on the terms alleged by the appellants. He accepted the respondent’s version and found the appellants were therefore enriched to the detriment of the respondent. He saw no need for a trial and granted the respondent’s motion for summary judgment, finding the respondent had an interest in the property of the full purchase price and an additional $30,000.00 for her contribution to the renovations to the property.

Issues:

(1) Did the motion judge err in granting the motion for summary judgment?

(2) Did the motion judge err in fixing the amount of the interest of the respondent in the property?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The Court found there was little explanation as to why the motion judge rejected the appellants’ version, when there was substantial affidavit evidence supporting it. The appellants’ wills had been amended to reflect the respondent’s life interest and they had paid all of the property expenses from the outset. The Court held the motion judge’s reasons did not explain why this evidence was rejected nor did he make credibility findings. The Court held that, given the important issues which turned on credibility in this case, the failure to make such findings was an error.

(2) Yes. The Court found the motion judge accepted the respondent’s version of events to the effect that the parties had agreed that the money advanced by the respondent was to acquire a one-third interest in the property and that the balance was a loan. However, the motion judge then gave no effect to that agreement. The motion judge relied on the presumption of resulting trust and found the appellants held the whole property in trust for the respondent, in reliance on the presumption of resulting trust as set out in Pecore v Pecore, 2007 SCC 17. Moreover, the Court held where a remedy is granted for unjust enrichment, per the Supreme Court of Canada in Kerr v Baranow, 2011 SCC 10, courts must take into account the mutual exchange of benefits between the parties. In this case, considering the mutual conferral of benefits would include determining the understanding of the parties when they entered into the arrangement, as well as calculating the amounts advanced by both parties to purchase the property and to renovate and maintain the property. The Court held the necessary findings had not been made by the motion judge.

Mayers v. Khan, 2017 ONCA 524

[Epstein, Hourigan and Paciocco JJ.A.]

Counsel:

B. Fromstein and A. Longo, for the appellant

G. McKee and D. Styler, for the respondents

Keywords: Torts, Negligence, MVA, Summary Judgement Motion, Negligence, Sanzone v. Schechter, 2016 ONCA 566

Facts:

The appellant and the respondent were involved in a motor vehicle accident. At a summary judgement motion, the motion judge dismissed the MVA claim against the respondent. In doing so, the motion judge heard and accepted evidence, including that of an independent witness, who said that the appellant made a left-hand turn, facing a yellow light, in front of an oncoming truck, owned and driven by the respondents. The motion judge also accepted evidence that the respondent did not go through a red light, as the appellant alleged in her claim. The motion judge further found that there was no evidence that the respondent ought to have anticipated that the appellant would turn in front of him or that he could have avoided the accident.

The appellant appeals the motion judge’s order dismissing the claim.

Issues:

(1) Did the motion judge reverse the evidentiary burden on the summary judgment motion?

(2) Should the motion judge have ordered a mini-trial instead of granting a summary judgment?

Holding: Appeal dismissed.

Reasoning:

(1) No. The motion judge correctly identified and applied the burden of proof applicable on a summary judgment motion. The moving party bears the evidentiary burden of demonstrating that there is no genuine issue requiring a trial. The burden only shifts to the responding party once the moving party has discharged its evidentiary burden.

(2) No. The motion judge rejected the appellant`s initial theory for why a trial was necessary – that she was turning on an “advance green light” and that the respondent ran a red light. This conclusion was not appealed.

The appellant advanced a secondary theory – that a trial was necessary to determine whether the respondent was contributorily negligent for failing to take reasonable precautions to avoid the accident. The appellant submitted that the onus was on the respondents to lead expert evidence that the respondent could have done nothing to avoid the accident. However, given that the trial judge concluded that the respondents demonstrated that there was no genuine issue requiring a trial, the appellant had to demonstrate that the respondent contributed to the accident, such as by not driving more slowly given the conditions. The appellant did not do this.

Civil Endorsements:

Parsaei v. Toronto (Police Services Board) (Costs), 2017 ONCA 523

[Blair, MacFarland and Hourigan JJ.A.]

Counsel:

J.C. Morton, for the appellant

R.L. Bush and K. Shani, for the respondent

Keywords: Costs

Jundi v Ouaida (Appeal Book Endorsement), 2017 ONCA 415

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

Counsel:

G. Deokaran, for the appellants

T. Arndt, for the respondents

Keywords: Endorsement, Fraudulent Misrepresentation, Rescission, Unconscionability, Procedural Fairness

Criminal Decisions:

R. v. Bellaire (Appeal Book Endorsement), 2017 ONCA 511

[Laskin, Simmons and Pardu JJ.A.]

Counsel:

P. Norton, for the appellant

K. Rawluk, for the respondent

Keywords: Criminal Law, Vetrovec Warning, Inconsistent Evidence

R. v. K.D.M. (Publication Ban), 2017 ONCA 510

[Feldman, MacPherson and Benotto JJ.A.]

Counsel:

K.D.M., appearing in person

I. Grant, duty counsel

A. Wheeler, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Invitation to Sexual Touching, Sentencing, R. v. Pittiman, 2006 SCC 9, Multi-Count Indictment, Jury Verdict,  R. v. Chase, [1987] 2 S.C.R. 293, R. v. Tremblay, 2016 ABCA 30, R. v. Brown, [1991] 2 S.C.R. 518, R. v. Roncaioli, 2011 ONCA 378, R. v. Ferguson, 2008 SCC 6, R. v. Nelson, 2014 ONCA 853, R. v. L(S), 2013 ONCA 176, R. v. Tyler, 2015 ONCA 599

R. v. Li (Publication Ban), 2017 ONCA 509

[Rouleau, Trotter, and Paciocco JJ.A.]

Counsel:

C. Li, in person

S. Latimer, for the respondent

P. Rochman, amicus curiae

Keywords: Criminal Law, Child Abduction, Pre-Sentence Custody, Mental Health ActR. v. Summers, 2014 SCC 26.

R v. Charron, 2017 ONCA 513

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

A. Moustacalis, for the Appellant

Scott Latimer, for the Respondent

Keywords: Criminal Law, Assault, Burden of Proof, Sentencing, Credit for Pre-Trial Custody, R. v. W.(D)., [1991] 1 S.C.R. 742, R. v. Biniaris, 2000 SCC 15

R. v. Romain, 2017 ONCA 519

[Doherty, LaForme and Trotter JJ.A.]

Counsel:

R. Bottomley and S. Foda, for the appellant Romain

N. Xynnis, for the appellant Spruyt

M. Halfyard and B. Vandebeek, for the appellant Osbourne

J. Flenning, for the appellant Jack

J. Corelli and J. Neander, for the respondent

Keywords: Criminal Law, Fraud, R. v. Villaroman, 2016 SCC 33, Corbett Application, R. v. Bernard, 2013 ONCA 371, Bad Character Evidence

R. v Codina, 2017 ONCA 527

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

Counsel:

A. Ostroff, for the appellant

X. Proestos, for the respondent

Keywords: Criminal Law, Possession for the Purpose of Trafficking, Wilful Obstruction of a Peace Officer, Failure to Comply with a Recognizance, Evidence, Credibility, Oath-Helping, Unreasonable Verdict, R v Vetrovec, [1982] 1 SCR 811

R v. Innocent, 2017 ONCA 529

[Tulloch, Lauwers and Brown JJ.A.]

Counsel:

Angelina Marie Codina, in person

J.A. Morische, for the respondent

Keywords: Criminal Law, Breach of Recognizance, Pre-Trial Custody, Habeas Corpus, Jurisdiction, Immigration Law, Immigration and Refugee Protection Act, ss. 91, 126 and 138(1), Criminal Code, ss. 145(3), 524(4), 524(8) and 579, Criminal Proceedings Rules, r. 43.03(6), Canadian Charter of Rights and Freedoms, ss. 7 and 11(d), R v Codina, 2017 ONCA 93, R v Codina, 2017 ONSC 1384, R v Johnson (1991), 3 OR (3d) 49 (CA)

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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