ONTARIO COURT OF APPEAL SUMMARIES – JULY 4 – JULY 7, 2017

Good evening,

Following are the summaries for this week’s civil decisions of the Court of Appeal for Ontario. Claims against lawyers were the theme of the week.

In Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP class action case, the Ontario Court of Appeal dismissed Cassels Brock’s appeal from the liability finding against the firm for breach of fiduciary duty, but allowed, in part, the firm’s appeal on damages and remitted the matter back to the trial judge for a recalculation of the loss of chance damages suffered by the terminated GM dealers.

In the companion decision in Trillium Motor World Ltd. v. General Motors of Canada Limited, the Court of Appeal upheld the trial judge’s judgment dismissing the action against General Motors of Canada (“GMCL”). The Court confirmed that GMCL had not contravened the dealers’ rights under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “AWA”).

In Goldentuler Estate v. Crosbie, the estate of a deceased lawyer was granted almost $550,000 in damages, plus $80,000 in punitive damages, against lawyers who had left the firm and improperly taken files with them. The trial and the appeal were both unopposed, as the defendant lawyers’ defence had been struck.

In John v. Ballingall, the court confirmed that an online version of a newspaper article is covered under the Libel and Slander Act, meaning that a plaintiff must give notice under that Act within six weeks of learning of the publication and must commence suit within three months, otherwise the cause of action for libel is lost.

Other topics covered this week included assessment of lawyers’ accounts, breach of contract, breach of trust, real property, commercial leases, crown wardship, employment law, non-share capital corporations, labour law, and SABs.

Have a nice weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

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

Table of Contents

Civil Decisions

Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 544

Keywords: Contracts, Solicitor and Client, Torts, Professional Negligence, Fiduciary Duties, Duty to Avoid Conflicts of Interest, Duty of Loyalty, ,  Damages, Loss of Chance, Class Proceedings, Class Proceedings Act, section 24, Aggregate Damages

Trillium Motor World Ltd. v. General Motors of Canada Limited, 2017 ONCA 545

Keywords: Franchise Law, Arthur Wishart Act (Franchise Disclosure), 2000, section 11, 1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC, 2006 CanLII 25276 (S.C.), Contracts, Enforcability, Public Policy, Class Proceedings, Class Proceedings Act, section 31(2), Costs  

Abou-Mansour v. Abou-Mansour, 2017 ONCA 572

Keywords: Family Law, Civil Procedure, Adjournments, Evidence, Cross-Examination

Morriseau v. Sun Life Assurance Company of Canada, 2017 ONCA 567

Keywords: Labour Law, Collective Agreements, Mandatory Arbitration, Insurance Law, Long-Term Disability Benefits, Jurisdiction, Rules of Civil Procedure, Rule 21.01(3)(a)

Aviva Insurance Co. of Canada v. McKeown, 2017 ONCA 563

Keywords: Insurance Law, Insurance Act, Ontario Regulation 34/10, Statutory Accident Benefits Schedule s. 33(4) 3 (“SABS”), Examinations Under Oath, Automobile Insurance Rate Stability Act, Automobile Insurance Rate Stabilization Act, Financial Services Commission of Ontario Act, Statutory Interpretation

Ares Law Professional Corporation v. Rock, 2017 ONCA 569

Keywords: Contracts, Settlements, Solicitor and Client, Assessment of Accounts, Solicitors Act, s. 3, Cohen v Kealey & Blaney (1985), 10 OAC 344

Angus v. Port Hope (Municipality), 2017 ONCA 566

Keywords: Contracts, Interpretation, Sattva Capital Corp. v. Creston Molly Corp., 2014 SCC 53, Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, Trusts, Three Certainties, Certainty of Intention, Charitable and Non-Charitable Purpose Trusts, Perpetuities Act, Schmidt v. Air Products Canada Ltd., [1994] 2 S.C.R. 611

Canadian Northern Shield Insurance Company v. 2421593 Canada Inc., 2017 ONCA 570

Keywords: Contracts, Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, Inducing Breach of Contract, Summary Judgment

K.F. v. Family and Children’s Services of the Waterloo Region, 2017 ONCA 573

Keywords: Family Law, Access, Child and Family Services Act, R.S.O. 1990, c. C.11, s. 69(6), Fresh Evidence, Catholic Children’s Aid Society of Metropolitan Toronto v. C. M., [1994] 2 S.C.R 165

Polish Alliance of Association of Toronto Limited v. The Polish Alliance of Canada, 2017 ONCA 574

Keywords: Corporations, Non-Share Capital Corporations, Corporations Act, R.S.O. 1990, c. C38, Unincorporated Voluntary Associations, Variation of Trusts Act, R.S.O. 1990, c. V. 1

Couper v. Nu-Life Corp., 2017 ONCA 571

Keywords: Employment Law, Contracts of Employment, Damages

John v. Ballingall, 2017 ONCA 579

Keywords: Torts, Defamation, Libel, Limitation Periods, Libel and Slander Act, ss. 5(1) and 6, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedures, r. 21

D’Ascenzo v. Nichols, 2017 ONCA 578

Keywords: Real Property, Contracts, Agreements of Purchase and Sale of Land, Repudiation, Remedies for Breach, Specific Performance, Rescission

Goldentuler Estate v. Crosbie, 2017 ONCA 591

Keywords: Contracts, Lawyers, Breach of Fiduciary Duty, Damages, Punitive Damages

L’Ouvrier Inc. v. Leung, 2017 ONCA 589

Keywords: Contracts, Real Property, Commercial Leases, Options to Renew, Civil Procedure, Summary Judgment, Adjournments

Gustafson v. Johnson, 2017 ONCA 581

Keywords:Corporations, Winding Up, Civil Procedure, Appeals, Jurisdiction, Ontario Business Corporations Act, section 255

For Civil Endorsements, click here.

For Criminal and Ontario Review Board Decisions, click here.

Civil Decisions

Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 544

[Cron, can Rensburg and Pardu JJ.A.]

Counsel:

P.H. Griffin, R. Jones and D. Glatt, for the appellant

B. Finlay, M. Vermette, M. Statham, D. Sterns, A. Dick and A. Seretis, for the respondent

Keywords: Contracts, Solictor and Client, Torts, Professional Negligence, Fiduciary Duties, Duty to Avoid Conflicts of Interest, Duty of Loyalty, ,  Damages, Loss of Chance, Class Proceedings, Class Proceedings Act, section 24, Aggregate Damages

Facts:

General Motors Corporation in the United States (“GM”) and its Canadian subsidiary, General Motors of Canada Limited (“GMCL”), were among the companies affected by the 2008 global financial crisis. Both companies were on the brink of bankruptcy. Their only hope was financial bailouts from the American and Canadian governments. However, the governments made the bailouts conditional on acceptable restructuring plans. In GMCL’s case, this meant cutting ties with hundreds of its dealerships across Canada.

In late 2008 GMCL had a car dealership network in Canada consisting of 705 franchised dealers, 51 of which were Saturn dealers. One of the ways in which GMCL communicated with its dealers was through the Canadian Automobile Dealers Association (“CADA”). CADA was a long-time Cassel’s client and retained Cassels during the relevant time period.

By the end of 2008, both GM and GMCL were insolvent or close to insolvency. GMCL made many efforts to deal with its potential insolvency. The first was that it proposed a reduction of its dealer network in a revised bailout proposal submitted to the Ontario and federal governments (the “Canadian Governments”).  The second was that it informed the Saturn dealers that it would discontinue the Saturn brand at the end of 2011. The third was that it hired financial advisors to begin preparations for a filing under the Companies’ Creditors Arrangement Act (“CCAA”). A CCAA filing would have had serious financial consequences for GMCL, as well as others associated with or dependent on it. The dealers were particularly vulnerable because they would rank as unsecured creditors with little, if any, prospect for recovery in the bankruptcy or restructuring.

By the end of April 2009, Cassels had three existing retainers involving GMCL and GM and one proposed retainer. The first retainer, as mentioned earlier, was the long-standing CADA retainer. The second retainer came in March 2009, when Saturn retained Cassels to provide legal advice about GMCL’s potential termination of their dealerships. The third retainer came shortly thereafter, when Cassels also accepted a retainer to represent Canada in a potential commercial financing transaction to support GMCL and Chrysler Canada. The proposed retainer was in April 2009, when GMCL requested that Cassels represent the GMCL dealers in respect of a potential CCAA filing by GMCL.

A group of Cassels lawyers, including the firm’s managing partner, met to discuss any potential conflicts of interest prior to accepting the fourth retainer. They ultimately decided that accepting the GMCL retainer would not create a conflict of interest with the firm’s Canada retainer, but agreed that an ethical wall should be erected within the firm and that each client should be informed about the firm’s retainer by the other. As such, Cassels accepted the proposed GMCL retainer.

Six days after Cassels accepted the GMCL retainer, GMCL officially announced that it would be discontinuing its Pontiac brand of cars. This represented 26 percent of GMCL’s sales in Canada. GMCL also released a revised restructuring plan that would reduce its dealer network from 705 to between 395 to 425 dealers by the end of 2010.

GMCL also prepared a plan for winding down some of its dealerships, including a process for identifying dealers who would receive a Wind-Down Agreement (“WDA”). The WDA proposal was intended to terminate the dealers’ business relationships and agreements with GMCL and eliminate GMCL’s estimated exposure to dealer claims resulting from the restructuring, while providing the dealers with what GMCL considered to be fair treatment in the circumstances.

CADA subsequently helped organize a formation of GMCL dealers into a national group, whose interests would be well-represented if GMCL were to file for bankruptcy protection. Approximately 400 GMCL dealers agreed to participate in this group. It is important to note that Cassels represented CADA and, in turn, this group.

Once the national GMCL dealer group was formed, they held a conference, where Cassels lawyers discussed, among other things: i) whether GM could unilaterally cancel contracts under the CCAA; ii) whether and how GM could sell off assets; and iii) the likelihood of a GM protective bankruptcy filing in the United states and a CCAA filing by GMCL.

GMCL delivered WDAs to 240 dealers approximately two weeks after the national dealer conference. The WDAs’ conditions were not uniform, and dealers were given six days to accept the offers. 202 of the 240 dealers accepted GMCL’s offers.

Cassels did not undertake any negotiations regarding the WDAs, or alternatives to them, with GMCL on behalf of the dealers. Further, with the exception of the Saturn dealers, Cassels did not engage in any discussions with GMCL, or with any dealers, about the possibility of attempting to negotiate improved offers from GMCL or the possibility of seeking an extension of time for the dealers’ consideration of the WDAs.

Trillium Motor World Ltd. (“Trillium”), a GMCL dealer in Toronto, commenced a class action proceeding on behalf of all dealers who had signed WDAs. There were 181 class members. Trillium claimed that Cassels breached its contractual and fiduciary duties to the dealers, including its duty of loyalty, by failing to disclose the existence of the Canada retainer, among other things. Trillium asserted that the dealers’ interests were adverse to Canada’s from the very start: the dealers wanted to get the most money possible from GMCL for their dealerships, and were willing to act as a spoiler in the run-up to a CCAA filing to get the best deal they could. In contrast, as the bailout party, Canada wanted GMCL to avoid a CCAA filing and to pay as little as possible to the dealers under the WDAs.

Cassels denied that it had an existing retainer with the GMCL dealers in the first place; it argued that it had a “contingent” retainer that would only crystallize in the event of a CCAA filing – an event that never occurred. It also maintained that there was no actual conflict between the dealers and Canada; the conflict was only a “potential” one that could be prudently managed if and when it materialized.

The trial judge allowed Trillium’s claim. He found that there was a retainer between Cassels and the dealers, and that the Canada retainer gave rise to a bright line conflict or a substantial risk of conflict with the dealers’ retainer. He found that, at a minimum, Cassels had breached its duties to the dealers by failing to disclose the Canada retainer and its decision that it would not act for the dealers if their interests came into conflict with Canada’s. The trial judge found that, had the dealers been properly represented and advised, they would have negotiated successfully with GMCL.

Cassels appealed the trial judge’s findings on liability and damages. Trillium cross-appealed on the issue of damages.

Issues:

(1) Did the trial judge err in finding an operative retainer between the other class members and Cassels?

(2) Did the trial judge err in finding that Cassels breached its obligations due to the Canada Conflict?

(3) Did the trial judge err in his treatment of the Saturn dealers?

(4) Did the trial judge err in his causation and loss of Chance Analyses?

(5) Did the trial judge err in his assessment of aggregate damages?

Holding: Appeal from liability issues dismissed, appeal from damages issues allowed, in part, cross-appeal dismissed.

Reasoning:

(1) No. The Court confirmed that the nature and scope of a solicitor’s retainer is a factual question on which the findings of the trial judge are entitled to great deference.

In determining whether Cassels breached its contract or its fiduciary duty, the trial judge needed to first determine if Cassels owed contractual or fiduciary duties to some or all of the class members. This determination rested, in the first instance, on whether a retainer between Cassels and the dealers existed and, if so, on the nature of the retainer. It did not require that the precise contours of any retainer found to exist be defined with exactitude. Rather, it only required an examination of the essential subject matter of the contract between the parties in order to then assess whether the contract had been breached.

The trial judge did exactly that. He devoted 23 paragraphs to the retainer issue, including 19 paragraphs expressly on the topic, “What was the scope of the retainer?” The Court held that when the trial judge’s reasons are read in context, they confirm that he came to grips with, and adequately articulated, the essential subject matter of the contract between the parties.

While the trial judge found that a retainer existed, he held that the scope of the retainer was ambiguous. As stated by the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, in matters of contractual interpretation, “the overriding concern is to determine ‘the intent of the parties and the scope of their understanding’”. Further, in order to do so, “a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract.”

However, where there remains any ambiguity, legal principles dictate that this ambiguity must be resolved against Cassels. Accordingly, the trial judge found that the scope of the retainer was not strictly limited to representation in a possible CCAA proceeding. The retainer also included pre-filing advice on issues relating to the restructuring of the dealer network, which meant that Cassels was obligated to provide legal services to the dealers with respect to the Notices of Non-Renewal and the WDAs.

(2) No. Cassels breached its fiduciary and contractual obligations to the class members. The Canada retainer gave rise to a bright line conflict with the dealers’ retainer because the dealers’ interests were directly adverse to Canada’s immediate interests during the relevant period. Moreover, there was a substantial risk of a material and adverse effect on Cassels’ representation of the GMCL dealers by reason of its existing Canada Retainer, regardless whether Canada’s immediate interests and the interests of the GMCL dealers were adverse and even if Cassels’ characterization of a narrow and contingent retainer by the dealers had prevailed.

In R. v. Neil, 2002 SCC 70, [2002] 3 S.C.R. 631, the Supreme Court established the bright line test where a lawyer is not permitted to act for adverse clients unless both parties provide their informed consent. Similarly, in Canadian National Railway Co. v. McKercher LLP, [2013] 2 SCR 649, the Supreme Court of Canada outlined principles for determining whether a conflict of interest can be said to have arisen outside the scope of the bright line conflict rule. That is, the determination of whether a conflict falling outside the scope of the bright line conflict rule exists depends on whether the concurrent representation of the clients in question creates “a substantial risk that the lawyer’s representation of the client would be materially and adversely affected”.

Cassles agreed to act for the GMCL dealers despite its pre-existing Canada Retainer and failing to disclose the Canada Retainer and its implications to the dealers (the “Canada Conflict”). The parties’ interests were directly adverse to Canada’s immediate interests during the relevant period. The dealers wanted to get the most money possible from GMCL for their dealerships, and were willing to act as a spoiler in the run-up to a CCAA filing to get the best deal they could. In contrast, as the bailout party, Canada wanted GMCL to avoid a CCAA filing and to pay as little as possible to the dealers under the WDAs.

Cassles also breached its fiduciary and contractual obligations to the class members was by failing to advise CADA that it was in a conflict once the WDAs were delivered to some, but not all, dealers and nonetheless accepting CADA’s directions not to become involved with the WDAs. In fact, in an email by Bruce Leonard, one of Cassels’ partners, Leonard warned of these potential conflicts and said that, at a minimum, Cassels owed a duty to the dealers to advise them at the outset of the Canada retainer of all of the potential problems that could arise, and not simply to wait and see what happened. Cassels’ failure to make this disclosure was a breach of its duty to provide candid advice and disclosure to the class members.

(3) No. The trial judge addressed the essential subject matter and scope of the Saturn retainer. Saturn retained Cassels in March 2009 to provide legal advice with respect to GMCL’s legal ability to terminate the Saturn dealerships. Given that GMCL sought to effect this purpose through the WDAs, it follows that the Saturn retainer included advice regarding the Saturn WDAs.

Cassels owed the Saturn dealers a duty to advise them at the outset of the Canada retainer and all of the potential problems that could thereafter arise. However, Cassels never disclosed the Canada retainer to the Saturn dealers or the Saturn steering committee. Nor did it tell them about any constraint on its ability to represent the dealers, including Saturn Dealers, in any matter adverse to Canada’s interests. Cassels’ conduct regarding the Saturn Dealers in respect of the Canada Conflict amounted to a breach of the applicable standard of care.

(4) No. If Cassels had met the standard of care and provided proper advice to the dealers, the dealers, acting collectively, would have sought to negotiate with GMCL to improve their compensation under the WDAs. However, because Cassels failed to properly advise and represent the dealers, the dealers lost their only chance to negotiate with GMCL for this purpose.

While Canadian jurisprudence is unsettled as to whether an action for damages for a lost chance stands in tort, the doctrine of lost chance in contract law has been expressly recognized both in Canada and England. Proof of damage is not part of the liability inquiry in contract law. Moreover, plaintiffs may advance a claim for damages for “loss of chance” in solicitors’ negligence cases. The analysis of that claim had two components – causation and quantum.

The dealers’ lost chance to negotiate with GMCL was real and significant. The trial judge found that but for Cassels’ divided loyalty, Cassels would likely have provided advice to the dealers about the WDAs and proposed the option of collective negotiation with GMCL. If the dealers had been properly advised and represented by Cassels, they would have banded together and instructed Cassels to negotiate with GMCL regarding the WDAs. It was likely that GMCL would have negotiated with the dealers. Further, there was a real chance that those negotiations would have proven to be productive

With respect to the quantum component of the analysis, Cassels argued that the trial judge was obliged to identify and assign each step in the causation chain a percentage chance of occurrence, and then multiply those percentage chances of each contingency occurring in order to determine an overall percentage probability of the dealers achieving a successful outcome in negotiations with GMCL. However, this “cumulative probabilities” approach has not been employed in other loss of chance cases and has been specifically rejected by some courts in England.

In any case, the trial judge found that, absent a breach by Cassels, the dealers had a 55 percent chance of obtaining a successful negotiation with GMCL for more compensation under the WDAs. The trial judge took into account all of the contingencies identified by the parties, including the fact that the dealers potentially stood to realize nothing in any CCAA filing. He also recognized that a loss of chance will be smaller when more contingencies are involved. However, the trial judge concluded these contingences did not negate the dealers’ chance of achieving a higher payout through negotiation, nor did they push the chance outside the realm of real and significant possibility.

(5) Yes. The trial judge calculated the lost chance as the difference between the amount approved by GMCL’s US parent as being available to pay the dealers and the amount paid: $218 million – $126 million = $92 million. The trial judge erred in using the $126 million figure, the amount paid, as the second number. Neither side in hypothetical negotiations could have known that 38 terminated dealers would reject the WDAs. The offers on the table totalled $143.5 million. Unbeknownst to the dealers, GMCL had $218 million to spend. The trial judge should have calculated the value of the lost chance to negotiate successfully as the difference between the money approved for the WDAs and the money offered: $218 – $143.5 = $74.5 million. This reduces the overall starting point for the quantification of the aggregate damages award from $92 million to $74.5 million.

The question of the final quantification of damages by applying the lost chance analysis should be remanded to the trial judge for further consideration using $74.5 million as the starting point.

Trillium Motor World Ltd. v. General Motors of Canada Limited, 2017 ONCA 545

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

Counsel:

D. Sterns, Al. D.J. Dick, A. Seretis, B. Finlay Q.C., M. Vermette and M. Statham, for the appellant/respondent by cross-appeal Trillium Motor World Ltd.

K. Thomson, J. McCamus, S. R. Campbell, S. L. Weingarten, D. S. Morritt and K. Sachar, for the respondent/appellant by cross-appeal General Motors of Canada Limited

Keywords: Franchise Law, Arthur Wishart Act (Franchise Disclosure), 2000, section 11, 1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC, 2006 CanLII 25276 (S.C.), Contracts, Enforcability, Public Policy, Class Proceedings, Class Proceedings Act, section 31(2), Costs  

Facts:

This is the first of two appeals and cross-appeals that arose out of the public bailout of General Motors of Canada (“GMCL”) in the spring of 2009. This decision addresses a class action against GMCL brought by franchisees whose dealerships were terminated as part of the bailout, and a counterclaim by GMCL against the franchisees.

GMCL became insolvent in May 2009. To survive and avoid proceedings under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-26 (“CCAA”), it required bailout money. The Canadian and US governments demanded that GMCL aggressively restructure as a condition of providing the assistance. On May 20, 2009, GMCL delivered Wind-Down Agreements (“WDAs”) to 240 dealers. The WDAs offered payment in exchange for a release of all claims, including those that could be advanced under the Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000 c. 3 (the “Act”), and provided for an end to the dealers’ business relationships with GMCL.

The WDAs also contained a promise by the signing dealer not to sue GMCL. They required the dealer to opt out of or disclaim any interest in any future class proceeding that purported to assert claims released by the WDAs. They required any dealer who failed to opt out to indemnify GMCL against any damages and legal costs GMCL might subsequently incur by defending a class proceeding.

202 out of the 240 dealers signed the WDAs and accepted the payment offered. After GMCL made its final payments, a class proceeding was brought on behalf of all dealers who signed the WDAs, claiming that GMCL breached the rights provided to these franchisees under the Act. The appellant Trillium Motor World Ltd. (“Trillium”) was named as the representative plaintiff.

The trial judge held that GMCL acted honestly and fairly and did not breach the dealers’ rights under the Act. He further held that the releases barred the dealers’ class proceeding. Trillium appealed these rulings. The trial judge also concluded that the dealers’ promises not to sue GMCL, and to indemnify GMCL should a dealer fail to opt out of class proceedings were void on public policy grounds. GMCL cross-appealed on this ruling.

At trial, the arguments turned on whether the WDAs were settlement agreements and therefore fell within the judicially-developed exception to the application of s. 11 of the Act articulated in 1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC, 2006 CanLII 25276 (S.C.) (“Tutor Time”). Section 11 of the Act provides that “any purported waiver or release by a franchisee of a right given under this Act or of an obligation or requirement imposed on a franchisor or franchisor’s associate by or under this Act is void”.

Issues:

(1) Did the trial judge err by failing to consider the remedial purposes of the Act in finding that the releases were operative?

(2) Did the trial judge err by applying the Tutor Time exception to this case?

(3) Did the trial judge err by not finding that GMCL breached its duty of fair dealing as a result of the manner in which it obtained the releases?

(4) Were the covenants not to sue and indemnify void for public policy reasons?

(5) If so, is the trial judge required to find the whole release void for public policy reasons?

Holding: Appeal dismissed. Cross-appeal dismissed.

Reasoning:

(1) No. The trial judge explicitly stated that the “overarching purpose” of the Act is to “mitigate and alleviate the power imbalance that exists between franchisors and franchisees”. The perilous financial circumstances that GMCL faced at the time were an important part of the factual context. In addition, GMCL also owed duties to the dealers who did not sign WDAs.

(2) No. According to Tutor Time, a voluntarily-negotiated settlement of existing statutory claims, entered into with the benefit of legal advice, in settlement of a dispute for existing and known breaches of the Act is not caught by s. 11 of the Act. A settlement is a voluntary arrangement that brings a dispute or potential dispute to an end: Data General Canada Ltd. v. The Molnar Systems Group Inc. (1991), 6 O.R. (3d) 409 (C.A.), at p. 415. The Court of Appeal agreed with the trial judge’s conclusion that the release in this case characterized the WDA document as a settlement. Furthermore, each dealer who signed a WDA obtained legal advice and knew that they were giving up any legal claims they might have against GMCL.

(3) No. The trial judge held that GMCL did not breach the duty of dealing fairly with the terminated dealers when presenting them with the WDAs. That conclusion was reasonably open to him and the Court of Appeal found no basis to intervene.

(4) Yes. The difference in treatment between individual litigants and members of a class is expressly contemplated by s. 31(2) of the Class Proceedings Act, 1992, S.O. 1992 c. 6. Class members, other than the representative party, are not liable for costs except with respect to the determination of their own individual claims. GMCL’s counterclaim is, in essence, a claim for reimbursement of its costs in defending the class proceeding. Given that the legislature has adopted a policy that class members are not liable for costs, the Court of Appeal saw no error in the trial judge’s conclusion that public policy barred enforcement of the covenant not to sue.

(5) No. The trial judge held that the Tutor Time exception applied, and he favoured the public policy of giving effect to settlements of known and existing claims reached with the benefit of legal advice. The dealers who signed the WDAs were enriched by execution of the agreements; they received payments to which they would not have been otherwise entitled. The Court of Appeal did not identify any palpable and overriding error in the trial judge’s conclusion that, although the release was valid, the covenant not to sue was void and severable.

Accordingly, the Court of Appeal dismissed the appellant’s appeal and the respondent’s cross-appeal.

Abou-Mansour v. Abou-Mansour, 2017 ONCA 572
[Sharpe, Lauwers and Miller JJ.A.]

Counsel:

N. Denchik, for the appellant

J. Rechtstaffen, for the respondent

Keywords: Family Law, Civil Procedure, Adjournments, Evidence, Cross-Examination

Facts:

Based upon medical evidence, the trial judge found that the respondent was unemployed and effectively unemployable and therefore refused to impute income.

Issues:

(1) Did the trial judge err by curtailing the appellant’s cross-examination of the respondent with respect to his medical condition, or by failing to grant the appellant an adjournment to summons additional witnesses?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The trial judge enforced the time limits set out in the trial scheduling form, and the appellant did not ask for more time to continue her cross-examination. Nor did the appellant provide the trial judge with a reasonable explanation as to why the witnesses had not been summoned in a timely manner prior to trial. The trial judge therefore made no error in refusing an adjournment.

Morriseau v. Sun Life Assurance Company of Canada, 2017 ONCA 567

[LaForme, Hourigan and Paciocco JJ.A.]

Counsel:

R.E. Somerleigh and V. Popescu, for the appellant

S. Simpson and E. Bennett-Martin, for the respondent

Keywords: Labour Law, Collective Agreements, Mandatory Arbitration, Insurance Law, Long-Term Disability Benefits, Jurisdiction, Rules of Civil Procedure, Rule 21.01(3)(a)

Facts:

The appellant was a unionized employee of Lakehead District School Board (“LDSB”), subject to a collective agreement that provided certain long-term disability (“LTD”) benefits. The LDSB was self-insured with respect to LTD benefits. The respondent was contracted with the LDSB to provides administrative services with respect to LTD benefits. The respondent effectively acted as agent for the LDSB, while the LDSB had final decision-making power for the payment of LTD benefits.

The appellant sought LTD coverage following a motor vehicle accident, but that request was denied in a letter sent to her by the respondent. She then commenced an action seeking, among other things, a declaration that she was totally disabled within the definition in the contract between the respondent and the LDSB, and an order requiring Sun Life to approve the payment of LTD benefits.

The motion judge found that the court did not have jurisdiction, because the dispute arises from the interpretation, application or administration of a collective agreement. Accordingly, he struck the appellant’s statement of claim.

Issues:

(1) Is the respondent not a party to the collective agreement, in which case it does not have standing to challenge the court’s jurisdiction?

(2) Did the motion judge err in finding that the essence of the dispute involved a subject matter covered by the collective agreement?

(3) Does the motion judge’s order leave the appellant without a remedy?

Holding:

Appeal dismissed.

Reasoning:

(1) No. Pursuant to r. 21.01(3)(a) of the Rules, the respondent had standing to have the action dismissed on the basis that the court lacked jurisdiction. The respondent was named as the defendant in the within action, and r. 21.01(3)(a) provides that a defendant may move to have an action dismissed on the ground that the court has no jurisdiction over the subject matter of the action.

(2) No. The standard of review on a finding that the collective agreement covers the subject matter of the dispute is palpable and overriding error. The Court of Appeal rejected the argument that the motion judge made any such error. The language of the collective agreement supported a finding that the LDSB was required to pay benefits under that agreement, not the respondent. Moreover, the motion judge’s analysis was supported by the analysis of comparable collective agreements in other case law.

(3) No. The real dispute was between the appellant and the LDSB, against whom the appellant might seek an appropriate remedy through arbitration. There is no contract between the appellant and the respondent, and there was no legal basis upon which to order that benefits be paid by the respondent. The entitlement to LTD benefits is a product of collective bargaining, and any dispute is therefore arbitrable under the collective agreement. The appellant did not advance any convincing grounds for concluding that an arbitrator would decline jurisdiction over a claim for those benefits.

Aviva Insurance Co. of Canada v. McKeown, 2017 ONCA 563

[Juriansz, Pepall and Miller JJ.A.]

Counsel:

E.K. Grossman, for the appellant

V. Chowbay, for the respondents

Keywords: Insurance Law, Insurance Act, Ontario Regulation 34/10, Statutory Accident Benefits Schedule s. 33(4) 3 (“SABS”), Examinations Under Oath, Automobile Insurance Rate Stability Act, Automobile Insurance Rate Stabilization Act, Financial Services Commission of Ontario Act, Statutory Interpretation

Facts:

Six applicants for benefits demanded that Aviva provide a “reason” in the sense of a “justification” for its request that they attend examinations under oath (“EUO”). Aviva brought an application for a declaration that a justification was not required, and for an order compelling the six applicants to attend examinations. The application judge dismissed the application and issued a declaration that an insurer must provide a “justification” to compel an applicant for statutory benefits to attend an EUO if the insurer requests one pursuant to s. 33(2) of the SABS.

Issues:

(1) Does an insurer have to provide a “justification” in order to exercise its statutory right to examine under oath an applicant who has claimed benefits under the SABS?

Holding: Appeal allowed.

Reasoning:

(1) No. An insurer is not required to provide a justification for its request that the applicant attend an EUO. A general statement of the purpose of the EUO that provides notice of the general types of questions that will be asked is sufficient. Applicants must attend the EUOs. Following is the legal reasoning applied by the Court:

(a) The proper approach to statutory interpretation is to read the words of an Act in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of the legislature.

(b) The application judge’s interpretation of s. 33 is reviewable on a correctness standard. In adopting the meaning “justification” for the word “reason,” the application judge drew unsupported inferences, employed extraneous considerations, and failed to consider the entire legislative context of s. 33(4)3.

(c) The two main overall objectives of the Ontario automobile insurance regime are consumer protection and guaranteed compensation of victims. Smith v. Co-Operators General Insurance Co., 2002 SCC 30 at para. 11; Peixeiro v. Haberman, [1997] 3 S.C.R. 549 at paras. 22-24.

(d) The legislative objectives in creating the EUO were to reduce insurance costs, address fraud and increase accountability within the system. The application judge erred by reasoning that the use of EUOs might result in an increase in the overall costs of the system.

(e) The application judge was correct in observing that Ontario’s automobile insurance system was, and is, intended to be an efficient, no-fault regime and as non-adversarial as possible. However, her apprehension that unless an insurer is required to provide a justification for an EUO, the process would become more adversarial, was misplaced.

(f) Legislative history indicates that the EUO was created as an additional “mechanism” to accomplish the legislative objective of the quick and expeditious determination of claims and of increasing accountability within the system.

(g) Analogies to civil litigation are unhelpful in a statutory regime meant to replace tort law because the legislative object of the automobile insurance regime is to replace the tort resolution of disputes arising from automobile accidents with the process it prescribes. Requiring insurers to provide justification for EUOs is not in keeping with the non-adversarial process intended by the legislature.

(h) The modern approach to statutory interpretation is the mandated purposive approach, but it must be applied to the text considered in its entire context. Bell ExpressVu Ltd. Partnership v. Rex, 2002 SCC 42 at para. 26.

(i) One theme of the procedures for claiming benefits set out in the SABS is that the insured person must cooperate with the insurer so that the insurer has the information necessary to determine the entitlement. Similarly, the SABS creates a number of mechanisms that allow the insurer to request information and documentation from the applicant. Thus, requiring an insurer to provide a justification for its request for an EUO is not in keeping with the cooperative approach to information sharing through the SABS.

(j) The SABS has provisions with limitations, such as s. 33(2), s. 37, s. 44(1), and s. 44(5). If the legislature intended to limit or qualify s. 33(4)3, it would have been included under the qualifications of s. 33(2).

(k) The insurer’s duty to act in good faith applies throughout its processing of an application for benefits, and the practices of an insurer are subject to the general supervision of the Superintendent as per the FSCO Act, s. 5(2)(c). The Superintendent has powers pursuant to the Insurance Act, s. 439 and s. 440, to investigate and sanction “Deceptive Acts and Practices.” This is the legislated route to address non-compliant EUOs.

(l) The court need not defer to a tribunal in interpreting the relevant legislation when jurisdiction over the legislation is shared: Rogers Communications, 2012 SCC 35. However, when exercising coordinate jurisdiction, a court should proceed with a full appreciation of the expertise of the tribunal. Although jurisdiction is no longer shared with FSCO (exclusive jurisdiction to hear such appeals now lies with the Licence Appeal Tribunal, the FSCO arbitrator’s interpretations of SABS are still persuasive authority.

Ares Law Professional Corporation v Rock, 2017 ONCA 569

[LaForme, Hourigan and Paciocco JJ.A.]

Counsel:

L. James, for the appellant

P.J. Pape and J.L. Nairn, for the respondents

Keywords: Contracts, Settlements, Solicitor and Client, Assessment of Accounts, Solicitors Act, s. 3, Cohen v Kealey & Blaney (1985), 10 OAC 344

Facts:

The respondents were retained pursuant to a contingency fee agreement with the appellant, the client in an action against Food Basics. After five-years, the solicitor-client relationship broke down and the respondents were removed as solicitors of record. The appellant retained new counsel, Mr. Igbinosun. After the retainer was terminated, the respondents, the appellant and Mr. Igbinosun entered into an agreement (the “Undertaking”), which provided that Mr. Igbinosun and the appellant were undertaking to protect the account of the respondents in the amount of no more than $50,000. This amount could be subject to possible negotiated reduction or an assessment.

Mr. Igbinosun passed away and the appellant chose to self-represent. The appellant entered into a settlement agreement with Food Basics, which provided that Food Basics would pay costs directly to the respondents. It did not contain any reference to the Undertaking. Food Basics informed the respondents that their insurer was willing to cover the cost of some of the disbursements and to pay half of the appellant’s outstanding account to settle the action the respondents had brought against the appellant. Later on, they advised Food Basics was willing to pay half of the respondents’ listed disbursements, $5,000 of their legal fees, or alternatively, whatever amount would be determined by an assessment officer. The respondents accepted the offer and the matter proceeded to assessment.

The assessment officer rejected the argument that the Undertaking applied to limit the respondents’ total recovery to $50,000 and held it would have applied had Mr. Igbinosun represented the client at the time of the settlement, but because the client was then acting for himself the agreement no longer governed. The Undertaking had not been incorporated into the settlement with Food Basics and the appellant should reasonably expect to pay fees pursuant to the retainer agreement. The assessment officer assessed the outstanding amount at $125,602.83.

The appellant brought a motion to oppose confirmation of the assessment, and the respondents brought a cross-motion for judgment in the amount of the assessment. The motion was dismissed and the cross-motion was allowed. The appellant filed a second appeal to the Court of Appeal and is advancing essentially the same arguments as it did on the confirmation motion.

Issues:

(1) Did the assessment officer err in failing to appreciate the “peculiar position” of Food Basics, and improperly interpreted “the client” to mean Food Basics instead of the appellant?

(2) Did the assessment officer misapprehend the evidence regarding the true value of the claim in determining the reasonableness of the lawyer’s fees?

(3) Did the assessment officer lack jurisdiction due to “special circumstances” present in this assessment?

(4) Did the assessment officer and motion judge err in treating the Undertaking as irrelevant to the client’s expectations regarding costs because Food Basics was not party to it?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court held it was evident on a reading of the assessment officer’s decision that he appreciated that the appellant was the client.

(2) No. The court held that although the assessment officer found that the value of the claim was likely higher than the $30,000 for which it was settled, the history of this litigation provided ample evidence in support of that view.

(3) No. The court held the motion judge was correct in finding that the issues identified by the appellant did not constitute special circumstances that would impact the assessment officer’s jurisdiction. The court held special circumstances that operate to oust jurisdiction are exceptional situations, particularly those that cause quantum and accounting of fees to become entwined with larger legal and factual questions, such that assessing costs necessarily requires answering questions outside the assessor’s jurisdiction. They are typically “questions that require a decision from the court by action or application”. The court held there were no such questions at play here.

(4) No. The court held that if the appellant believed the Undertaking applied to limit the assessed account, then he had the obligation to raise that issue in advance of the hearing, which he failed to do. Moreover, the court found that had the Undertaking applied, by its terms it was “subject to negotiation between the parties and, if necessary, further assessment proceedings”, and such an assessment proceeding did occur. Finally the court held that parties had agreed to be bound by the result of the assessment.

Angus v. Port Hope (Municipality), 2017 ONCA 566

[Strathy C.J.O, Gillese and Pardu JJ.A.]

Counsel:

C.G. Paliare, R.P. Stephenson and L. Scott, for the appellant

A.J. Lenczner, Q.C. and P.E. Veel, for the respondent

Keywords: Contracts, Interpretation, Sattva Capital Corp. v. Creston Molly Corp., 2014 SCC 53, Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, Trusts, Three Certainties, Certainty of Intention, Charitable and Non-Charitable Purpose Trusts, Perpetuities Act, Schmidt v. Air Products Canada Ltd., [1994] 2 S.C.R. 611

Facts:

In 2000, the Government of Canada (“Canada”) and the former municipalities of the Town of Port Hope, the Township of Hope, and the Municipality of Clarington (collectively, the “Municipalities”) struck a deal: Canada would make a payment of $10 million to each of the Municipalities in exchange for each of the Municipalities storing low-level radioactive waste (the “Waste”) at safe sites within their respective communities. The parties “papered” the deal with an agreement executed by the Municipalities in December 2000 and by Canada on March 29, 2001 (the “Agreement”).

On January 1, 2001, Hope Township and the Town of Port Hope were amalgamated into a new entity called the Corporation of the Town of Port Hope and Hope (the “Municipality of Port Hope”). On April 12, 2001, the Municipality of Port Hope received two $10 million cheques from Canada, which was the payment due to Hope Township under the Agreement (the “Payment”). When the payment was received, no trust agreement had been concluded between Hope Township and Royal Trust (at the time of the initial agreement, the proposed trustee) nor had any such agreement been concluded between the Municipality of Port Hope and Royal Trust.

In 2014, an application was brought in which it was alleged that the Municipality of Port Hope had misused the income earned on the Payment because it had failed to apply that income exclusively to defray the lower tier municipal taxes or levies of ratepayers of the former Hope Township. The application judge granted the application and interpreted the Agreement as having created a non-charitable purpose trust that was saved by s. 16 of the Perpetuities Act. Further, he found that the Municipality of Port Hope breached its duties as trustee because it failed to use the power to appoint in accordance with the strict terms of the trust.

Issues:

(1) Did the Agreement constitute a contract and thus not establish a trust over the Payment?

(2) Did the Agreement create a charitable trust, not a non-charitable purpose trust?

Holding: Appeal allowed and cross-appeal dismissed.

Reasoning:

(1) Yes. The Agreement did not create a trust and the Municipality of Port Hope did not breach its duties in respect of the Payment and income earned on it (“Hope Township Fund”). The legal interpretation of the Agreement, including Schedules, involves issues of mixed fact and law, thus the court owes deference to the decision of the application judge. However, deference is not owed where, as in this case, the first-instance decision maker has made an extricable legal error, which includes a failure to apply the correct principle, a failure to consider a required element of a legal test, or a failure to consider a relevant factor. Sattva Capital Corp. v. Creston Molly Corp., 2014 SCC 53 at paras. 50-53; Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19 at para. 21-22.

(2) No.

(a) The Agreement, including Schedules, is a contract. Notwithstanding that a contract can create a trust, this Agreement provides the context within which Schedule 8 is to be interpreted, and was unquestionably a contract: a written expression of the mutually beneficial commercial bargain struck between the parties.

(b) Canada’s Payment to Hope Township was the discharge of its contractual obligation under Article 7.1(b) of the Agreement. Canada did not and could not make the Payment as the settlor of a trust and did not settle the Payment on trust. To settle property on trust, one must intend that the property be the subject of the trust.

(c) Article 7.1(b) of the Agreement did not create a trust. 7.1(b) contained permissive language, allowing Hope Township to use the Payment as it saw fit. Since there are no constraining words in 7.1(b), it cannot have created a trust over the Payment.

(d) Pursuant to Article 7.2 of the Agreement, Hope Township had to deal with the Payment in accordance with Schedule 8.

(e) Schedule 8 did not create a trust of the Payment or of the Hope Township Fund. It did not create a non-charitable purpose trust, an express trust for persons, or a charitable trust.

The application judge erred by finding a non-charitable purpose trust by: (1) incorrectly applying the law governing non-charitable purpose trusts (see Schmidt v. Air Products Canada Ltd., [1994] 2 S.C.R. 611 at 640-641); and (2) making a finding contrary to the parties’ express intentions in the Agreement.

Non-charitable purpose trusts differ in that the funds are placed in trust not for persons but to see that a particular purpose is fulfilled. The Agreement expressly stated that the “ratepayers” were the beneficiaries of the Payment.

Creation of an express trust requires an intention to create a trust. To find that an express trust for persons has been created, there must be certainty of intention, certainty of subject matter, and certainty of objects. Certainty of intention can be found to exist where a person who owns property transfers it to another (the trustee) with the intention that the trustee hold and manage the property for the exclusive benefit of others. Certainty of subject matter requires the subject matter of the trust to be ascertained or ascertainable. Certainty of objects requires a determinate number of people with identifiable future members. Notwithstanding the reflexive nature of the certainties, none of the three were met. Moreover, the reflexive nature of the certainties reinforces that there was no intention to create a trust.

The Agreement had provisions for tax abatements. As such, it was not a purpose that the law regards as charitable, thus a charitable trust could not have been created. On this point the cross-appeal was dismissed.

(f) The Municipality of Port Hope did not become a trustee nor did it breach its obligations in respect of the use of the Hope Township Fund. While Schedule 8 originally provided that Payment was to be made to a trustee, an agreement could not be finalized with a trustee and an amendment was made to the Agreement. The amendment expressly authorized the Municipality of Port Hope to use an investment counsellor to manage the Hope Township Fund, thereby extinguishing any obligation to create a trust. The Municipality of Port Hope could not have breached its obligations as there were no trust obligations attached to the use of the Hope Township Fund.

Canadian Northern Shield Insurance Company v. 2421593 Canada Inc., 2017 ONCA 570

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

Counsel:

M.A. McKillop and J.A. Caldwell, for the appellants

G.R. Hall and J.L. Cole, for the respondents, 2421593 Canada Inc. and Vancouver City Savings Credit Union

B.H. Bresner, for the respondents, The Co-operators Group Limited, Federated Agencies Limited and 7081332 Canada Ltd.

Keywords: Contracts, Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, Inducing Breach of Contract, Summary Judgment

Facts:

The appellants commenced an action against 2421593 Canada Inc. (“Vancity Insurance”) and Vancouver City Savings Credit Union (together the “Vancity respondents”) for damages and other relief following the alleged breach of an oral agreement. They also sued The Co-operators Group Limited (“Cooperators”), Federated Agencies Limited and 7081332 Canada Ltd. (together the “Co-operators respondents”) for damages for inducing breach of contract.

Each of the two groups of respondents brought motions for summary judgment.  The motion judge dismissed the action, primarily because he concluded on his review of the evidence that the parties expected and required there to be a signed written agreement in order for there to be a binding contractual agreement (referred to on in this case as the “Precondition”). This disposed of the claims for breach of contract and for inducing breach of contract. He also determined that, in any event, the decision of the Vancity respondents not to proceed with the alleged contract with CNS/RSA could not have been induced by Co-operators several months later.

Issues:

(1) Did the motion judge err in finding the existence of the Precondition, and therefore err in granting summary judgment against the Vancity respondents?

(2) If the motion judge erred in granting summary judgment, should the dismissal nevertheless be upheld on the basis that there is no genuine issue requiring trial?

(3) Did the motion judge err in granting summary judgment against the Co-operators respondents?

Holding:

Appeal allowed with respect to the action against the Vancity respondents. Appeal dismissed with respect to the Co-operators respondents.

Reasoning:

(1) Yes. The motion judge’s finding that there was a Precondition – that is, that the parties’ intended and agreed that their “legal obligations were to be deferred until a formal contract had been approved by both sides and executed” – was a palpable and overriding error. The evidence reviewed was not capable of supporting such a conclusion, whether considered individually or cumulatively. The evidence only goes so far as to support the conclusion that the parties intended and agreed to eventually set out their agreement in writing, and that they were taking steps to negotiate the terms of their contract, not that they had “established that both sides acted on the understanding and intent that there was to be a formal executed written contract in order to be legally bound”. Consequently, the motion judge’s grant of summary judgment relied on a fundamentally flawed analysis, and was therefore erroneous.

(2) No. The motion judge held that if he had considered it necessary to decide whether an oral agreement had come into being, he “would be inclined to order a trial of the issue in spite of the agreement of the parties that the case [could] be decided on a motion for summary judgment without the need for a trial”. The Court of Appeal observed that there were several factual disputes that remained unresolved, and the Court of Appeal was therefore not in a position to adjudicate.

(3) No. The motion judge additionally provided a reasonable, alternative basis for dismissing the claim against the Co-operators respondents that did not rely on his conclusions with respect to whether a binding contract had been formed. There was no evidence that Co-operators deliberately sought to procure the termination of the alleged oral contract, nor that Co-operators was even in a position to determine whether a contract in fact existed. Lastly, the timing of events was such that the Vancity respondents had decided against settling contractual terms with the appellants several months before Co-operators engaged in the alleged inducements.

K.F. v. Family and Children’s Services of the Waterloo Region, 2017 ONCA 573

[Sharpe, Lauwers and Miller JJ.A.]

Counsel:

G. Ichim, for the appellants

J. Boich, for the respondents

Keywords: Family Law, Access, Child and Family Services Act, R.S.O. 1990, c. C.11, s. 69(6), Fresh Evidence, Catholic Children’s Aid Society of Metropolitan Toronto v. C. M., [1994] 2 S.C.R 165

Facts:

This is an appeal from an order of the Superior Court dismissing an appeal from an order of the Ontario Court of Justice making an order of Crown wardship with no access by either parent.

The child was apprehended at the age of eight weeks, at the same time, three other children of the appellant were apprehended. The appellant had a long-standing history with the respondent. The immediate reason for the apprehension was that the older children expressed a fear of violence by the appellant’s then partner, the father of the child who is the subject of this appeal. The child has been in the custody of prospective adoptive parents for approximately four years.

Fresh evidence in child protection matters is contemplated by the Child and Family Services Act, R.S.O. 1990, c. C.11, s. 69(6) (the “Act”). The test for admission is set out in Catholic Children’s Aid Society of Metropolitan Toronto v. C. M., [1994] 2 S.C.R. 165 at 190:

(a)   could the evidence have been previously adduced;

(b)   is the evidence highly relevant;

(c)   is the evidence potentially decisive to a best interest determination; and

(d)   is the evidence credible.

The respondent sought to introduce the affidavit of a Children’s Aid Society (“CAS”) services worker that provided up to date information on the circumstances of the child. This is the type of evidence contemplated by s. 69(6) of the Act. Accordingly, the Court of Appeal admitted the evidence from the CAS.

The appellant also sought to introduce fresh evidence. Firstly, the appellant sought to introduce video evidence of access visits between the child and the appellant. Since the CAS fresh evidence related to the circumstances of the appellant’s access visits, the Court of Appeal held that it was appropriate to admit the video recordings tendered by the appellant.

The appellant further sought to introduce affidavit evidence from a doctor who had not seen the child. However, the Court of Appeal found this evidence problematic because the appellant failed to provide an adequate foundation to assess the doctor’s expertise with respect to the general view that the doctor expressed regarding open adoption. Notwithstanding this oversight, the Court of Appeal reviewed the doctor’s affidavit.

The appellant sought to have access to the child.

Holding: Appeal dismissed.

Issues:

(1) Should the Court grant the appellant access to the child?

Reasoning:

(1) No. Section 59(2.1) of the Act provides that when a Crown wardship order is made, no order of access shall be made unless (a) the relationship between the person and the child is meaningful and beneficial to the child; and (b) the ordered access will not impair the child’s future opportunities for adoption. The onus for establishing those factors rests with the party seeking access.

The trial judge found that there was no evidence that the relationship between the child and the appellant was beneficial to the child. That finding, made when the child was two and a half years old, is entitled to deference in the Court of Appeal. Moreover, the issue was not who was at fault for a breakdown in the relationship between CAS and the appellant. Instead, the issue was about the best interest of the child in regards to the appellant being granted access.

Neither the video tendered by the appellant, nor the doctor’s affidavit provided a sufficient basis to disturb the findings of the trial and appeal judges that the appellant failed to show that she should have access, despite Crown wardship, on the basis that the relationship between her and the child is meaningful and beneficial to the child.

Polish Alliance of Association of Toronto Limited v. The Polish Alliance of Canada, 2017 ONCA 574

[Hoy A.C.J.O., van Rensburg and Trotter JJ.A.]

Counsel:

B.A. Kaminski, for the appellant

B. Romano and J. Nussbaum, for the respondents

Keywords: Corporations, Non-Share Capital Corporations, Corporations Act, R.S.O. 1990, c. C38, Unincorporated Voluntary Associations, Variation of Trusts Act, R.S.O. 1990, c. V. 1

Facts:

This action arises out of a dispute between the appellant and respondents about a clubhouse on Lakeshore Boulevard in Toronto estimated to be worth $50 million or more. The respondents are 28 members of the appellant Polish Alliance of Canada, an organization incorporated under the Corporations Act, R.S.O. 1990, c. C38. The respondents sought to separate from the appellant and take with them the property in dispute.

At the initial hearing, the court determined that the respondents’ withdrawal from the appellant’s organization was invalid due to not having the unanimous consent of the members. In addition, the court noted that had their withdrawal been valid, they would have been entitled to take the property with them because the property was being held for them in trust from time to time. The respondents appealed to the Ontario Court of Appeal but their appeal was dismissed because the court found no basis to interfere with the application judge’s decision. However, the court stated that future attempts to withdraw from the organization may be valid.

The respondents subsequently asked the trial judge to reconsider their withdrawal after they had obtained unanimous consent from the members. The judge granted their requested judgment. The appellants now appeal this decision.

Issues:

  • Did the trial judge err in concluding the clubman’s veto applied?
  • Did the trial judge err in concluding that the consent to withdraw was unanimous?
  • Did the trial judge err in concluding that the respondents were entitled to take the property with them when they left?
  • Did the trial judge err in suggesting the Variation of Trusts Act as an alternative basis for relief?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellants argue that the clubman’s veto does not apply because the Polish Alliance of Canada is incorporated under the Corporations Act. This does not matter because the respondents were part of an unincorporated association seeking to leave the incorporated association.

(2) No. The appellants argue that the trial judge did not count the number of members correctly. The number of members was determined by a court order, and that is what the trial judge relied on. It is not now open to the appellants to argue against the membership determined by court order.

(3) No. It is not open to the appellants to revisit questions of title to the property.

(4) No. The trial judge relied on the clubman’s veto in granting relief, not the Variation of Trusts Act.

Couper v. Nu-Life Corp., 2017 ONCA 571

[LaForme, Hourigan and Paciocco JJ.A.]

Counsel:

J.J. Pirie and J.R. Bernardo, for the appellants and respondents by way of cross-appeal

J.J. Adair, for the respondent and appellant by the way of cross-appeal

Keywords: Employment Law, Contracts of Employment, Damages

Facts:

This appeal and cross appeal arise out of an oral employment agreement between two friends and their respective companies. Mr. Couper was president of the appellant corporation, Nu-Life Corp. (“Nu-Life”). He was friends with Mr. Frankel, the senior executive officer of Vitaquest International LLC (“Vitaquest”). Vitaquest eventually became the primary financier of Nu-Life. Nu-Life became insolvent in 2002 requiring it to restructure. After restructuring, Vitaquest held 90 percent equity in Nu-Life and Mr. Couper and Mr. Frankel began discussions about an employment contract for Mr. Couper at Vitaquest. The trial judge found an oral employment agreement was reached in October 2003 and granted judgment to Mr. Couper for unpaid salary, but not for a $5 million payment. Both sides appealed.

Issues:

  • Did the trial judge err in finding that the respondent Mr. Couper was entitled to damages equivalent to base pay for the period October 2003 to March 2005?
  • Did the trial judge err in finding that the appellant Mr. Couper was not entitled to a US$5 million payment from Vitaquest?

Holding: Appeal and cross-appeal dismissed.           

Reasoning:

(1) No. Vitaquest submitted that damages ought to be calculated on the basis of pay in lieu of reasonable notice, and further submitted that the employment agreement came to an end on November 14, 2013. This is incorrect. The appropriate measure of damages is a straightforward calculation of unpaid base wages from October 20, 2003 to March 2005, because this is a case for unpaid base salary, not wrongful dismissal. In addition, the trial judge’s finding that the employment agreement was repudiated by Vitaquest in March 2005 is entitled to deference.

(2) No. There is no reason to interfere with the trial judge’s conclusion that no term entitling Mr. Couper to a US$5 million payment was included either in the employment agreement or any separate agreement.

John v. Ballingall, 2017 ONCA 579

[Doherty, Benotto and Trotter JJ.A.]

Counsel

M. Zemel and O. Ha-Redeye, for the appellant

I. Fisher and K. Pulfer, for the respondents

Keywords: Torts, Defamation, Libel, Limitation Periods, Libel and Slander Act, ss. 5(1) and 6, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedures, r. 21

Facts: The appellant is a rapper who performs under the name of Avalanche the Architect. The appellant wrote a rap song entitled “Got Yourself a Gun”. As a result of the content of the lyrics, he was criminally charged with uttering threats to cause death or bodily harm and criminal harassment. The respondent Alex Ballingall, a reporter working for the respondent, Toronto Star, contacted the appellant and conducted an interview with him. Ballingal’s article was published in the Star’s online version on December 4, 2013, and described the criminal proceedings. It was titled “Rapper says death threat just a lyric”. On December 5, the appellant sent an email to Ballingal complaining of some factual inaccuracies in the article, and stating he had never admitted to making death threats, which the title suggested. The appellant then issued a statement of claim on April 28, 2015, alleging that the words “Rapper says death threat just a lyric” in the online version of the article were false and defamatory.

The appellant’s claim was struck on a r. 21 motion because he did not give notice within six weeks of becoming aware of the article, or issue a statement of claim within the three-month limitation period provided for in the Libel and Slander Act (LSA).

The appellant submitted that the online version of the article is not “in a newspaper” because there is no paper, and as such the LSA does not apply. The appellant submitted that the notice and limitation period under the LSA does not start to run until the article is no longer on the internet. He argued that, for every day that the defamatory words are published online, a new and distinct cause of action accrues, and a new limitation period begins to run. Accordingly, his claim was not out ot time and complied with the LSA. Finally, the appellant submitted that the motion judge had incorrectly admitted evidence on the r. 21 motion and that there were findings of fact necessary to be made before the action could be dismissed.

Issues:

(1) Does the LSA apply to the online article?

(2) Was the LSA complied with?

(3) Did the motion judge err in applying r. 21.01(1)(a) to dismiss the claim?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. The court stated that it had considered this same issue in Weiss v Sawyer, and had concluded that a newspaper does not cease to be a newspaper when it is published online. The court found that to hold otherwise would ignore the principles of statutory interpretation, which are flexible enough to achieve the intent of the legislature in the context of evolving realities, and that it would be absurd to provide different regimes for print and online versions of newspapers. The court found that the LSA applied to the digital version of the article published.

(2) No. The court held that the appellant was relying on an incorrect interpretation. The time by which the plaintiff must give notice under s. 5(1) of the LSA and bring his action under s. 6 begins to run when the libel has come to the knowledge of the person defamed. Here, when the appellant wrote an email to the defendants on December  5, he was aware of the facts on which his cause of action might be founded. The court held the limitation clock had begun to run at that time. Therefore, the limitation period expired long before the Statement of Claim was issued sixteen months later.

(3) No. The court found that the record did not support those allegations. Moreover, since the court had found the LSA to apply to the online newspaper article and the claim was out of time, it was plain and obvious that the action could not succeed.

D’Ascenzo v. Nichols, 2017 ONCA 578

[MacPherson, Cronk and Benotto JJ.A.]

Counsel:

M. Boire, for the appellant/respondent by way of cross-appeal

J.F. Laberge and M. Ranaivoson, for the respondents/ appellants by way of cross-appeal

Keywords: Real Property, Contracts, Agreements of Purchase and Sale of Land, Repudiation, Remedies for Breach, Specific Performance, Rescission

In 2006, the respondents sought to purchase from the appellant (a) the appellant’s shares in 1702620 Ontario Inc., (b) the Petting Zoo vacant land, and (c) the Lot 511 vacant land. The share purchase agreement included the terms by which the appellant was to sell the Petting Zoo and Lot 511 to the respondents. However, the appellant did not take the required steps to have Lot 511 severed pursuant to the Planning Act, R.S.O. 1990, c. P.13. No mortgage was ever registered on title to either property.

The share purchase transaction closed on November 24, 2006. Since the closing, as of January 2013, the respondents made payments to the appellant towards the purchase of the Petting Zoo and Lot 511 totalling $168,727. The respondents did not make any further payments after January 2013. After that point, the respondents demanded clear title to the Petting Zoo because they alleged they had paid for it in full, and said they would pay the remaining $27,500, owing for Lot 511, when the appellant cleared up the title issues relating to the severance of that property.

The appellant refused to convey title to the Petting Zoo and informed the respondents that he was “foreclosing” on Lot 511.

The respondents commenced an action and brought a motion for summary judgment, which was granted in part. The motion judge ordered rescission and damages with respect to one of the properties (the Petting Zoo), and issued a certificate of pending litigation with respect to the other property (Lot 511), pending a trial of the issue of specific performance, which involved the issue of the granting of a severance of the two properties.

The appellant sought to overturn the motion judge’s decision on the basis that the respondents defaulted on their debt obligation and therefore forfeited their interest in both properties. In the alternative, the appellant sought to vary the judgment and alleged that the motion judge erred in determining the appropriate remedies for both properties.

Issues:

(1) Did the motion judge err by resolving the issues by way of a summary judgement?

(2) Did the motion judge err by not concluding that the respondents breached the contract by not continuing their monthly payments towards the mortgage?

(3) Did the motion judge err by granting rescission of the agreement to purchase the Petting Zoo?

(4) Did the motion judge err by granting specific performance of the Lot 511 purchase?

Holding: Appeal dismissed.

Reasoning:

(1) No. There was a comprehensive record before the motion judge including all the relevant commercial documents and extensive affidavit evidence and cross-examinations thereon from the parties and their joint lawyer.

(2) No. The reason the respondents stopped making payments in 2013 was that the appellant had taken no steps to obtain the severance of Lot 511.

(3) No. Although ‘rescission’ is probably the wrong legal term (it is evident from the motion judge’s reasons that he meant repudiation), it was clearly open to the motion judge, on the question of remedy, to treat the two properties separately and to determine that the respondents, after spending so much money over many years towards the purchase of the Petting Zoo, were entitled to treat the contract as at an end and to obtain damages as restitution of monies paid.

(4) No. The motion judge did not order specific performance. He found that the respondents’ entitlement to specific performance of Lot 511 was established, except for the crucial issue of severance, which he determined “will have to be established in a trial as to that issue.” Accordingly, he directed that a Certificate of Pending Litigation be registered on title to Lot 511.

Goldentuler Estate v. Crosbie, 2017 ONCA 591

[MacPherson, Cronk and Benotto JJ.A.]

Counsel:

R. Thapar, for the appellant

No one appearing for the defendants

Keywords: Contracts, Lawyers, Breach of Fiduciary Duty, Damages, Punitive Damages

Facts:

The appellant estate appealed from the trial judge’s damages assessment at an undefended trial. The damages trial was undefended because the defendants’ statement of defence and counterclaim were struck by the Superior Court. The defendants’ pleading having been struck by court order, this appeal also proceeded on an undefended basis.

The trial judge found that the defendants were liable to the appellant for damages arising from breaches by them of their duties of loyalty, good faith and avoidance of conflict of interest and self-interest during the course of their employment with Henry Goldentuler, a deceased lawyer (the “Deceased”).  The breaches arose from the defendants’ wrongful removal and transfer to a competing law firm of 120 client files from the Deceased’s law offices. The trial judge awarded the appellant general damages totalling about $345,000 plus pre-judgment interest of about $145,000, and special damages of a little over $26,000. She declined to award punitive damages.

The appellant argued, on various grounds, that the trial judge erred in her quantification of general and special damages, and by refusing to award punitive damages in the circumstances of this case.

Issues:

(1) Did the trial judge err in her quantification of general damages?

(2) Did the trial judge err in her quantification of special damages?

(3) Did the trial judge err by refusing to award punitive damages?

(4) Did the trial judge err in any other respect in calculating damages?

Holding: Appeal allowed, in part.

Reasoning:

(1) Yes. The trial judge’s first error was her reduction, by 44 percent, of the general damages she found were otherwise appropriate to account for overhead expenses notionally attributed to the files wrongfully removed by the defendants.  The agreed arrangement between the parties contemplated that any fees generated on completion or settlement on the disputed files were to be shared on an equal, 50/50 basis between the parties, with the appellant bearing sole responsibility for overhead expenses.

Yet, the trial judge both reduced the general damages otherwise owed to the appellant by 44 percent on account of overhead expenses and further reduced the general damages awarded by an additional 50 percent to reflect the fees-sharing arrangement agreed by the parties. This resulted, in effect, in “double-counting” because the fee-sharing arrangement between the parties already took account of the appellant’s responsibility for overhead expenses.

The court therefore increased the total general damages awarded to a little over $500,000, plus pre-judgment interest.

(2) Yes. The trial judge awarded special damages equal to two-thirds of the disbursements incurred by the Deceased in respect of the disputed files ($26,339.32). The Court of Appeal held that the Deceased was entitled to payment of all disbursements actually incurred by him, i.e., $39,509.29, plus pre-judgment interest, since the disbursements were a real, out-of-pocket expenses incurred by the Deceased, and established on the evidence at trial.

(3) Yes. The trial judge declined to award punitive damages in this case primarily on the ground that the claim for these damages were based on the inordinate delay caused by the defendants in the progress of the litigation.  The Court of Appeal disagreed. The appellant’s punitive damages claim was not solely related to litigation delay caused by the defendants. Rather, it focused on the defendants’ egregious pre-litigation behaviour in effecting the wrongful removal of the relevant client files from the Deceased’s offices, the transfer of those files to a competing law firm, and the persistent failure to return the removed files. Furthermore, the defendants’ conduct was indeed outrageous and high-handed. As a result, it cried out for sanction by the courts. The court therefore awarded $80,000 in punitive damages.

(4) No. The trial judge’s calculation of damages was well within her domain and supported by the governing authorities and evidentiary record, save as set out above.

L’Ouvrier Inc. v. Leung, 2017 ONCA 589

[MacPherson, Cronk and Benotto JJ.A.]

Counsel:

J.G. Hodder and C. Stienburg, for the appellants

D. Barbaree, for the respondents

Keywords: Contracts, Real Property, Commercial Leases, Options to Renew, Civil Procedure, Summary Judgment, Adjournments

Facts:

In 2011, the parties entered into an agreement to lease a unit (used as a restaurant) in a building owned by the appellants (the “Agreement”). It contained an option for renewal that the respondent could exercise so long as it was not in default of the Agreement, and provided written notice of its intention to exercise the option. In addition to the regular rental payments, the respondent was also liable for additional rent to be paid in monthly installments, calculated as the estimated proportionate share of direct costs associated with the occupancy and use of the premises.

In 2013, the appellants demanded a further amount in rent. The respondent took the position that this demand did not comply with the Agreement and refused to pay it. The matter was not resolved.

In September 2015, the respondent sent the appellants’ son a text message essentially indicating that it wanted to exercise its renewal option under the Agreement. The appellants took the position that they would not renew the Agreement due to the respondent’s refusal to pay the additional rent demanded. They did not allege, then or later, that the notice of renewal was deficient or in nonconformity with the Agreement.

The parties tried to negotiate a renewal of the Agreement but negotiations broke down. During this time period, the respondent was also trying to sell its business to a third party.

In early 2016, the respondent commenced an action seeking specific performance, an injunction to prevent the appellants from interfering with its rights under the Agreement, and damages for losses caused by the appellants’ breach of contract. The respondent also moved for an injunction to prevent the appellants from evicting it. The parties agreed to settle the matter, but the appellants failed to honour the settlement. The appellants subsequently locked the doors of the premises, posted a notice of distress, and took over the respondent’s liquor licence. As a result, the respondent’s planned sale of its restaurant business fell through.

The respondent brought a motion for summary judgment seeking damages, including punitive damages. The appellants brought a counterclaim alleging unpaid arrears, damage to the property, and punitive damages. They sought to adjourn the summary judgment motion, but their request was denied.

The motion judge found that the respondent was not in breach of the Agreement, and that the appellants had breached the Agreement and engaged in conduct warranting the imposition of punitive damages.  The motion judge therefore granted summary judgment in favour of the respondent, and dismissed the appellants’ counterclaim.

Issues:

(1) Did the motion judge err by not granting an adjournment because they did not have a lawyer and were not fluent in English?

(2) Did the respondent fail to give proper written notice of its intent to exercise the renewal option?

(3) Did the motion judge err in finding that the respondent was not in default of the Agreement?

(4) Did the motion judge err by failing to address the issue of non-rent default?

(5) Did the motion judge err in granting summary judgment against one of the two appellants, given that he was not properly named as a party?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellants had been represented by a lawyer earlier in the proceedings, had filed a notice of intent to act in person, and an interpreter was present and participated in the hearing. The request for an adjournment came 90 minutes into the hearing. In these circumstances, the motion judge’s discretionary decision to refuse an adjournment was reasonable.

(2) No. The respondent’s text message to the appellants’ son led to extensive negotiations between the parties. Accordingly, the appellants, by their conduct, acknowledged receiving notice of the respondent’s desire to renew the lease. Further, the appellants did not advance this complaint at the time of the notice.

(3) No. The motion judge carefully considered this issue and agreed with the respondent’s submission that it was not subject to additional rent in the amounts sought by the appellants. There was no error in his analysis.

(4) No. The appellants did not raise potential non-rent default issues on the summary judgment motion. They were therefore precluded from doing so on appeal.

(5) No. This issue was not raised in the court below. In addition to the fact that the appellants were not permitted to raise on appeal an issue that was not before the motion judge, the appellant fully participated in the proceedings and never requested that he be removed as a named party. Accordingly, the motion judge committed no error in granting summary judgment against him.

Gustafson v. Johnson, 2017 ONCA 581

[Lauwers J.A. (In Chambers)]

Counsel:

M.J. Holervich, for the moving parties

B. Johnson and A. Curle, in person

Keywords:Corporations, Winding Up, Civil Procedure, Appeals, Jurisdiction, Ontario Business Corporations Act, section 255

Facts:

The moving parties sought an order transferring this appeal from the Court of Appeal to the Divisional Court at Thunder Bay. The appeal followed a decision wherein the Superior Court made an order that the corporations at issue be wound up under the OBCA.

Issues:

(1) Is the proper court to hear this appeal the Divisional Court?

Holding:Motion granted.

Reasoning:

(1) Yes. This case is a winding up application under the OBCA. Under s. 255 of the OBCA: “[a]n appeal lies to the Divisional Court from any order made by the court under this Act.”

It was necessary for the application judge to determine who the shareholders were, in order to decide whether the corporations should be wound up. The balance of the order gives directions to determine the liabilities of the corporations and to liquidate assets, which are ancillary to the winding up order. Accordingly, the proper route of appeal is the Divisional Court. The appeal was therefore transferred to the Divisional Court in Thunder Bay.

Civil Endorsements

Mendoza v. Active Tire & Auto Centre Inc., 2017 ONCA 586

[Feldman, Cronk and Miller JJ.A.]

Counsel:

B.V. Hanuka, for the appellants

M.A. Davis and R.D. Davis, for the respondent

Keywords: Costs

Criminal and Ontario Review Board Decisions

Ince (Re), 2017 ONCA 584

[Weiler, Hourigan and Pardu JJ.A.]

Counsel:

E. Dann, for the appellants

R. Young, for the respondent

Keywords: Ontario Review Board, Hybrid Orders

R. v. Dieckmann, 2017 ONCA 575

[Doherty, Rouleau and Pepall JJ.A.]

Counsel:

A.K. Kapoor, S.H. Logan, R.C. Bottomley and M. Quenneville, for the appellants

M. Comiskey and X. Proestos, for the respondent

Keywords: Criminal Law, Fraud, Fine in Lieu of Forfeiture, Issue Estoppel, Canadian Charter of Rights and Freedoms, s. 11(b), Transitional Exceptional Circumstances, R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, R. v. Cody, 2017 SCC 31, Evidence, Hearsay, Co-Conspirators’ Exception to Hearsay, Jury Instructions

R. v. Malcolm, 2017 ONCA 577

[Weiler, Hourigan and Pardu JJ.A.]

Counsel:

G. Grill and E. Bingham, for the appellant

J. Streeter, for the respondent

Keywords: Criminal Law, Drug Possession, Controlled Drugs and Substances Act, S.C. 1996, c. 19, s. 4(5), Evidence, Search Warrants, Credibility, Deference, Sentencing, Jurisdiction

R. v. McDonald, 2017 ONCA 568

[MacPherson, Cronk and Watt JJ.A.]

Counsel:

P. Campbell, for the appellant

G. Choi, for the respondent

Keywords: Criminal Law, First Degree Murder, Evidence, Admissibility, Circumstantial Evidence, Expert Evidence, Fresh Evidence, Relevance, Extrinsic Misconduct, Causation, Jury Instructions

R. v. DaCosta, 2017 ONCA 588

[Weiler, Hourigan and Pardu JJ.A.]

Counsel:

M. Dineen, for the appellant

K. Healey, for the respondent

Keywords: Criminal Law, Drug Importation, Evidence, Credibility, Circumstantial Evidence

R. v. Ramta, 2017 ONCA 580

[Laskin, Simmons and Pardu JJ.A.]

Counsel:

K. Heath and D. Derstine, for the appellant

G. MacDonald, for the respondent

Keywords: Criminal Law, Attempted Robbery, Fresh Evidence, Sentencing, Credits, R. v. Ghadban, 2015 ONCA 760, 342 O.A.C. 177, Rehabilitation

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