ONTARIO COURT OF APPEAL SUMMARIES (NOVEMBER 20 – NOVEMBER, 24 2017)

Good evening,

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

Congratulations to our very own Bill Anderson for succeeding on our client’s appeal in Holmes v. Hatch Ltd., 2017 ONCA 880. In this Employment law decision, the Court of Appeal allowed the appeal from the motion judge’s decision granting summary judgment against our client on the basis that the motion judge was not at liberty to find liability on a legal theory that was not pleaded by the plaintiff and which our client did not have an opportunity to properly address in the evidence.

Other topics covered included contractual liability, both in the construction context and in the auctioning of real property context, municipal liability for failure to repair a road in the MVA context, child support, child custody, access, Freedom of Religion under section 2(b) of the Charter, choice of law in the sale of goods context, striking third party claims in the class action context, determining a contract claim by way of application rather than by way of action, and setting aside fraudulent conveyances of real property.

Enjoy the weekend,

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

Table of Contents:

Bassett & Walker International Inc. v. Soleau International BVBA, 2017 ONCA 886

Keywords: Sale of Goods, Conflict of Laws, International Sale of Goods Act, Summary Judgment, Appeal Allowed

Collins Barrow Toronto LLP v. Augusta Industries Inc., 2017 ONCA 883

Keywords: Contracts, Debtor-Creditor, Limitation Periods, Applications, Determination of Rights Dependent on Interpretation of Contract, Rules of Civil Procedure, r. 14.05(3)(d)

Mabe Canada Inc. v. United Floor Ltd., 2017 ONCA 879

Keywords: Torts, Negligence, Standard of Care, Industry Standards, ter Neuzen v. Korn, [1995] 3 S.C.R. 674, Foreseeability, Contractual Duties

Fenwick v. Concierge Auctions, ULC, 2017 ONCA 889

Keywords: Contract Law, Contractual Interpretation, Standard of Review, Standard Form Contracts, Correctness, Mixed Fact and Law, Reasonableness, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Real Estate, Auctions, Fees, Real Estate Commissions, Glendinning v. Cavanagh (1908), 40 S.C.R. 414, McBrayne v. Imperial Loan Co. (1913), 28 O.L.R. 653 (C.A.), William Allan Real Estate Co. v. Robichaud (1990), 72 O.R. (2d) 595 (H.C.)

House v. Baird, 2017 ONCA 885

Keywords: Torts, Negligence, Motor Vehicle Accident, Municipal Liability, Road Repair, Contributory Negligence, Negligence Act, R.S.O. 1990, c. N.1, s. 4, Civil Procedure, Damages, Future Pecuniary Damages, Discount Rate, Rules of Civil Procedure, Rule 53.09, Costs, Leave to Appeal Costs, Offers to Settle, Sanderson Orders, Moore (Litigation guardian) v. Wienecke, 2008 ONCA 162

Colucci v. Colucci, 2017 ONCA 892

Keywords: Family Law, Child Support, Jurisdiction, Divorce Act, ss. 15(1) and 17(1), D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37; Buckingham v. Buckingham

E.T. v. Hamilton-Wentworth District School Board, 2017 ONCA 893

Keywords: Constitutional Law, Freedom of Religion, Canadian Charter of Rights and Freedoms, s. 2(a), Human Rights Code, R.S.O. 1990, c. H.19, Education Act, R.S.O. 1990, c. E.2, s. 169.1(1), Doré v. Barreau du Québec, 2012 SCC 12, [2012] S.C.R. 395, Loyola High School v. Québec, 2015 SCC 12, [2015] 1 S.C.R. 613

Wilfert v. McCallum, 2017 ONCA 895

Keywords: Civil Procedure, Judgments, Enforcement, Fraudulent Conveyances, Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, s. 2, Gauthier v. Woollatt, [1940] 1 D.L.R. 275 (Ont. Sup. Ct.), Pleadings, Motions to Strike, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21, Pleading Fraud, Rules of Civil Procedure, Rule 25.06(8), Balanyk v. University of Toronto (1999), 1 C.P.R. (4th) 300 (Ont. S.C.), Bankruptcy and Insolvency, Assignments of Causes of Action, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 38

Holmes v. Hatch Ltd., 2017 ONCA 880

Keywords: Contracts, Employment Law, Employment Agreements, Repudiation, Fundamental Breach, Termination of Employment, Reasonable Notice Period, Civil Procedure, Pleadings, Rodaro v. Royal Bank (2002), 59 O.R. (3d) 74 (C.A.)

Berman v. Berman, 2017 ONCA 905

Keywords: Family Law, Custody, Kaplanis Test, Best Interest of the Child, Maximum Contact Principle, Equalization, Resulting Trust, Loan, Costs

J.K. v. Ontario, 2017 ONCA 902

Keywords: Civil Procedure, Striking Pleadings, Third Party Claims, Contracts, Indemnities, No Reasonable Cause of Action,  Class Proceedings, Crown Liability, Negligence, Breach of Fiduciary Duty, Vicarious Liability, Contributory Negligence, Charter Violations, Canadian Charter of Rights and Freedoms, ss. 7, 9, and 12

York (Municipality) v. Irwin, 2017 ONCA 906

Keywords: Municipal Law, Building Code Violations, Orders to Comply, Provincial Offences, Trials, Disclosure Orders, Certiorari, Collateral Attack, Provincial Offences Act, R.S.O. 1990, c. P.33, Building Code Act, 1992, S.O. 1992, c. 23

For short civil decisions click here.

For criminal decisions click here.

Civil Decisions:

Bassett & Walker International Inc. v. Soleau International BVBA, 2017 ONCA 886

[Cronk, Pardu and Huscroft JJ.A.]

Counsel:

G R Hall and A Lewis, for the appellant

T J Law and A Mazzotta, for the respondent

Keywords: Sale of Goods, Conflict of Laws, International Sale of Goods Act, Summary Judgment, Appeal Allowed

Facts:

The respondent, a trader of seafood products, purchased shrimp from an Ecuadorian supplier for shipment to the appellant, a Toronto-based company, via an Ecuadorian shipping line for delivery to a port in Mexico. Some of the documents pertaining to the sale stipulated that Belgian law applied to disputes arising out of the contract. Other documents contained no governing law provisions. The appellant appealed from a summary judgment holding it liable to the respondent for the full unpaid purchase price for the shrimp. The motion judge determined the appellant’s liability as if it was governed by the law of Ontario.

Issues:

(1) Should summary judgment be set aside on the basis that the motion judge applied the wrong governing law?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The parties appeared to have assumed that the contract was governed by domestic Ontario law. No issue as to the law governing the contract was raised before the motion judge. The question of the proper law of the contract is a threshold issue. The matter not having been raised before or considered by the motion judge, it is uncertain that her analysis of the issues in contention and her conclusions on those issues might not have been different had the proper law of the contract and its application here been fully argued before her. Summary judgment was set aside, and the matter was remitted to the motion judge for a new hearing on the parties’ competing summary judgment motions.

Collins Barrow Toronto LLP v. Augusta Industries Inc., 2017 ONCA 883

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

L Klug, for the appellant

E S Birnboim and B Xue Griffin, for the respondent

Keywords: Contracts, Debtor-Creditor, Limitation Periods, Applications, Determination of Rights Dependent on Interpretation of Contract, Rules of Civil Procedure, r. 14.05(3)(d)

Facts:

Augusta Industries Inc. appeals from the judgment awarded in favour of Collins Barrow Toronto LLP on invoices delivered for services rendered as the auditors for Augusta Industries Inc.

Issues:

(1) Did the application judge err in failing to convert the application into an action, since the appellant alleged that the respondent had been negligent in the provision of its services?

(2) Are any of the outstanding invoices barred through expiration of the applicable two-year limitation period?

Holding: Appeal dismissed.

Reasoning:

(1) No. The application judge concluded that it was open to her to determine the respondent’s claim under r. 14.05(3)(d) of the Rules of Civil Procedure on the basis that the claim arose from the determination of rights that depend on the interpretation of a contract.  While the formal Notice of Application refers to r. 14.05(3)(h), the court held that this did not preclude the application judge from relying on the sub-rule that she did to determine the matter.

Furthermore, the application judge was correct in concluding that there was no reason to postpone the determination of whether the appellant was liable to the respondent on the unpaid invoices. In support, the application judge noted that the appellant had not adduced any expert evidence supporting its allegation of negligence, much of the appellant’s evidence was hearsay (or double hearsay), and there was no reliable evidence that the appellant had suffered any damages.

(2) No. The application was commenced on April 14, 2016.  The application judge concluded that the first two invoices in dispute were the subject of an express agreement in the January 2014 engagement letter that they would be “settled” by April 15, 2014.  As a consequence, claims on those two invoices were not barred by the two-year limitation period.  The Court held that this interpretation was both available and reasonable on the language of the engagement letter and that the application judge’s interpretation of the engagement letter was owed deference.

The Court also agreed with the application judge that in the interests of expediency, there was no reason to delay the determination of liability on the unpaid invoices pending any determination of a negligence claim.

Mabe Canada Inc. v. United Floor Ltd., 2017 ONCA 879

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

P Pengelley and R Sottile, for the appellant
P J Monaghan and C Lui, for the respondent

Keywords: Torts, Negligence, Standard of Care, Industry Standards, ter Neuzen v. Korn, [1995] 3 S.C.R. 674, Foreseeability, Contractual Duties

Facts:

The Appellant, Mabe Canada Inc., sustained damages of approximately $1 million when a drainage pipe, running underneath a floor installed by the respondent, United Floor Ltd., caused a flood in its warehouse. The appellant’s claim in negligence was dismissed by the trial judge.

Issues:

(1) Did the trial judge err in not taking into account the respondent’s contractual duties in determining the standard of care?

(2) Did the trial judge err in his foreseeability analysis?

(3) Did the trial judge err in failing to determine whether relevant industry practice was itself negligent and should not have been followed?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The trial judge accepted expert evidence that the respondent had no reason to foresee that the pipe would be at a shallow depth. As a result, the respondent’s duty under the contract to notify the builder of the warehouse if subsurface conditions differ significantly from those indicated in the Contract Documents, was not triggered.

(2) No. The trial judge accepted expert evidence that there was no reason for the respondent to not put a stake in the ground at the location it did. This finding was open to the trial judge on the record before him.

(3) No. Although conformity with standard practice in an industry does not necessarily insulate a defendant from a finding of negligence, as the Supreme Court explained in ter Neuzen v. Korn, a practice will be determined negligent only if it does not conform with basic care easily understood by the ordinary person who has no expertise in the practices of the profession. In other words, only where it is “fraught with danger”.

Fenwick v. Concierge Auctions, ULC, 2017 ONCA 889

[Doherty, LaForme and Paciocco JJ.A.]

Counsel:

R G Slaght and P Healy, for the appellant

J E Schatz and S Azzopardi, for the respondent

Keywords: Contract Law, Contractual Interpretation, Standard of Review, Standard Form Contracts, Correctness, Mixed Fact and Law, Reasonableness, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Real Estate, Auctions, Fees, Real Estate Commissions, Glendinning v. Cavanagh (1908), 40 S.C.R. 414, McBrayne v. Imperial Loan Co. (1913), 28 O.L.R. 653 (C.A.), William Allan Real Estate Co. v. Robichaud (1990), 72 O.R. (2d) 595 (H.C.)

Facts:

In 2016 the Weilands decided to try selling their cottage by auction and contracted with Concierge Auctions, ULC, a luxury real estate auction company, under an Auction Marketing Agreement (the “Seller’s Contract”). The Seller’s Contract contemplated that the ultimate buyer would likely be responsible for paying the auction fee (the “Buyer’s Premium”), but there were exceptions. Most notably, the Weilands would have to pay the Buyer’s Premium if they refused to close after the auction produced an agreement of purchase and sale.

The Fenwicks saw an ad posted by Concierge and decided to bid (the “Bid”). In order to do so the Fenwicks had to sign a Bidder Registration Agreement (the “Bidder’s Contract”). In the Bidder’s Contract they agreed to pay a Buyer’s Premium to Concierge if they proved to be the high bidder, unless the sale was not “consummated” because of a default by the Weilands. The Fenwicks paid a total deposit of $430,000 into escrow to secure the Buyer’s Premium, should they have to pay it. The Bid was the highest bid and Fenwick executed an agreement of purchase and sale (the “First Purchase and Sale Contract”) that the Weilands had pre-signed. When the Weilands learned what the Bid was – $4,300,000 minus a rebate of $350,000 – they were not happy. They claimed that the sale price was too low to enable them to pay off the encumbrances on the cottage, and to grant clear title. When the closing date came, the Weilands refused to close.

After the Weilands defaulted, the Fenwicks registered a caution and paid land transfer tax on the contracted amount.

The Fenwicks immediately demanded the return of their $430,000 deposit from the escrow agent. They also threatened the Weilands with a lawsuit, and began to negotiate with them directly. Before long, the Fenwicks and Weilands arrived at a second agreement of purchase and sale (the “Second Purchase and Sale Contract”). That sale closed the next day. Concierge claimed an immediate right to payment once the Fenwicks acquired the property. The Fenwicks brought an application against both Concierge and the escrow agent, demanding the return of the deposit. Concierge ultimately won before the application judge. On April 25, 2017, drawing upon case law related to the payment of real estate fees, she concluded that the two purchase and sale contracts were effectively one continuous agreement, and that since the sale closed, the Fenwicks had to pay Concierge the Buyer’s Premium according to the terms of the Bidder’s Contract. The Fenwicks’ “continuous intention to close the transaction throughout” provided the necessary link. The Fenwicks appeal the decision.

Issues:

(1) Did the application judge err in interpreting Fenwick’s obligation to pay the Buyer’s Premium under the Bidder’s Contract?

(2) Did the application judge err in treating the two purchase and sale contracts as if they were one agreement?

Holding:

Appeal allowed.

Reasoning:

Prior to exploring the issues, the Court of Appeal sought to determine the appropriate standard of review. The Court found that a standard of correctness applies to the interpretation of the Bidder’s Contract, citing Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37. Since the same contract is used for all of Concierge’s auction bidders, the interpretation of the contract has precedential value. Further, there is no specific factual matrix that will assist in the interpretation of the contract and thus the deferential standard of mixed fact and law that typically applies to contract interpretation is not warranted in this case.

The question of whether there was one purchase and sale contract or two does not involve the interpretation of a standard form contract; it is a question of the legal characterization of the factual nexus between the two instruments, and this is a question of mixed fact and law. Therefore a deferential standard of review is to be applied to that issue, as per Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53.

(1) Yes.  The material provision of the Bidder’s contract is as follows:

3. Buyer acknowledges and agrees that the Buyer’s Premium is deemed earned upon conclusion of its Auction and shall be held by [the escrow agent] and disbursed to Concierge by [the escrow agent] upon closing. If the sale of the Property is not consummated for any reason other than default by the Seller, the Buyer’s Premium shall nevertheless be due and payable to Concierge.”

Fenwick argues that this provision implies that if the sale of the property is not “consummated” by reason of the Weilands’ default, the escrow agent is not to disburse the Buyer’s Premium it holds to Concierge. The application judge did not expressly find that the sale had been “consummated” within the meaning of the Bidder’s Contract because she did not, in her decision, engage in a close examination of the provisions. The application judge interpreted the consummation of the sale referred to in the forgoing provision to include sales terms and sales closings not provided for in the purchase and sale agreement that arose from the auction. The Court of Appeal disagreed with that interpretation. When the Bidder’s Contract is read as a whole, giving the words their ordinary and grammatical meaning, the objective intention of the parties provided for in s. 3 was that if the seller refuses to close the sale as required by the First Purchase and Sale Contract, the Buyer’s Premium is not payable from the buyer’s escrow deposit.

The Court of Appeal found that it was clear that the term “sale of the Property” does not refer to any sale of the property, even a sale between the seller and a high bidder. The term “sale of the Property” is used throughout the Bidder’s Contract. It is thus apparent, when read as a whole, that this refers to the specific sale that arises from the auction.

The Court of Appeal also found, based on a “plain reading” of section 3, that it was clear that the term “consummated” refers to the “closing” of the sale. The use of different words – “closing” and “consummated” – to describe the same event, does not change their meaning. The ordinary and grammatical meaning of each word enables them to work as synonyms, and the context in which they are used shows that they were meant to work as synonyms.

Further, the closing contemplated by the term “consummated” is not any closing. When read as a whole, it is clear that the closing or consummation that s. 3 refers to is the closing provided for in the contract of purchase and sale arrived at through the auction.

The Court of Appeal found that the operative clause in s. 3, “[i]f the sale of the Property is not consummated for any reason other than default by the seller, the Buyer’s Premium shall nevertheless be due and payable”, means that if the sale agreed to in the purchase and sale contract does not close on the closing date provided for in the purchase and sale contract for any reason other than the default of the seller, the Buyer’s Premium shall nevertheless be due and payable. The converse, of course, is that if the sale agreed to in the purchase and sale contract does not close on the closing date provided for in the agreement of purchase and sale because of the default of the seller, the Buyer’s Premium is not due and payable under the Bidder’s Contract. The fact that, after the Weilands’ default, the Fenwicks made sustained efforts to acquire the property that is the subject of the Bidder’s Contract, and achieved the acquisition of the property under broadly similar terms, does not change this.

The Court of Appeal allowed the appeal on this ground, finding that it was an extricable error of law for the application judge to ask whether the two purchase and sale contracts were effectively one continuous agreement, instead of interpreting the Bidder’s Contract as a whole to determine what event exempted the buyer from the obligation to pay the Buyer’s Premium.

(2) Undecided. In light of the answer to the first issue, it was unnecessary for the Court of Appeal to reach a conclusion on this issue. The Court did, however, comment in obiter on the tendency in auction cases of reasoning by analogy from cases dealing with the obligation of sellers to pay real estate commissions where the seller has contracted directly with a buyer the agent has introduced. The real estate cases, such as Glendinning v. Cavanagh (1908), 40 S.C.R. 414; McBrayne v. Imperial Loan Co. (1913), 28 O.L.R. 653 (C.A.); and William Allan Real Estate Co. v. Robichaud (1990), 72 O.R. (2d) 595 (H.C.), cited by the application judge, turn on the construction of commission clauses that invite consideration of whether the sale that occurred, in substance, arose from the real estate agent’s efforts. These cases do not apply comfortably to auction contracts where the auction company’s fee is for conducting the auction. Whether a subsequent sale or “closing” that can be linked factually to an earlier auction should attract obligations on any party to pay a fee to an auction company, should turn on the construction of the relevant auction contract, not on general principles addressing the evasion of fees extracted from contracts governing a different enterprise.

House v. Baird, 2017 ONCA 885

[Feldman, Cronk and Miller JJ.A.]

Counsel:

A Rouben, for the appellant/respondent by way of cross-appeal

D I Reisler, for the respondent/appellant by way of cross-appeal Donald Baird

J H Bennett, for the respondent The Corporation of the Township of Wilmot

Keywords: Torts, Negligence, Motor Vehicle Accident, Municipal Liability, Road Repair, Contributory Negligence, Negligence Act, R.S.O. 1990, c. N.1, s. 4, Civil Procedure, Damages, Future Pecuniary Damages, Discount Rate, Rules of Civil Procedure, Rule 53.09, Costs, Leave to Appeal Costs, Offers to Settle, Sanderson Orders, Moore (Litigation guardian) v. Wienecke, 2008 ONCA 162

Facts:

This case involved a car accident on a winter night in 2009. The appellant, House, was driving his friend Bair’s car. He lost control of the car, it moved over into the oncoming lane at the same time as another car was approaching in that lane. The other car hit House’s car, killing one friend in the back seat and injuring House and his other two friends in the car.

In the action by House, the trial judge found House, as the driver, and the respondent Baird, as owner of the car, which had worn and defective tires, equally liable for causing the accident and for House’s injuries. The other driver, Murray, and the respondent municipality were absolved of any liability for the accident. With respect to costs, the trial judge declined to give effect to an offer to settle by Baird, and made a modified Sanderson order requiring Baird to pay one half of the costs of the respondent municipality.

House appeals the decision of the trial judge on three issues: (i) the liability of the respondent municipality; (ii) the apportionment of fault as between himself as the driver and Baird as the owner of the car; and (iii) the failure of the trial judge to adjust the discount rate applicable to the damages calculation. The respondent Baird seeks leave to cross-appeal the costs disposition of the trial judge.

Issues:

(1) Did the trial judge err in law by failing to find that Wilmot breached its statutory duty to keep Huron Road in a reasonable state of repair?

(2) Did the trial judge err by assessing contributory negligence on the part of the appellant at 50%?

(3) Did the trial judge err by failing to give effect to the expert evidence and not applying a lower discount rate than the one provided by Rule 53.09 of the Rules of Civil Procedure?

(4) Did the trial judge err in his costs disposition?

Holding: Appeal and cross-appeal dismissed.

Reasoning:

(1) No.

The determination that a road is in a state of non-repair is contextual and fact-driven. The context includes the “character and location” of the road according to s. 44(1) of the Minimum Maintenance Standards for Municipal Highways (“MMS”). Maintenance standards are not as stringent for rural roads with low traffic volumes. The concept of reasonableness is also inherent in the statutory defence in s. 44(3)(b). Ondrade v. Toronto (City) sets out that the issue is “not whether something different or something more intensive could have been done – rather, the issue is whether the steps that the [municipality] did take were reasonable.”

Ontario has three classes of municipalities: (i) single-tier; (ii) upper-tier; and (iii) lower-tier. The Township of Wilmot is a lower-tier municipality within the Regional Municipality of Waterloo, which is an upper-tier municipality.

The appellant’s arguments amount to a claim that the trial judge failed to apply the proper legal test, failed in his application of the applicable legal principles to the facts, and made erroneous findings of facts.  The trial judge instructed himself, based on Fordham, that a municipality’s duty of repair is limited to maintaining its roads to enable ordinary drivers exercising reasonable care to use the roads safely. He quoted the proper approach to analyzing and applying s. 44 from Fordham, referred to the MMS and reviewed a number of relevant cases. Having reviewed the evidence in detail and made his findings of fact, the trial judge then applied those findings against the statutory standard and found that the municipality had not breached its duty of care. In this case, the trial judge made no error of law, conducted a thorough review of the evidence and made reasonable findings. His analysis is entitled to deference.

(2) No.

The appellant submits that the finding that he was 50% responsible amounted to “speculation” that he was speeding in the face of evidence to the contrary, and that the trial judge’s concerns about marijuana use and the appellant’s state of mind over a pregnancy were not based on evidence. He submits that the 50% allocation should be set aside and reduced to 15-20%, or another amount as the court may direct.

The Court did not give effect to this submission. There was clearly evidence, including the action taken by Murray to brake when he saw the appellant’s car, from which the trial judge could infer that the appellant was negligent in failing to adjust his speed for the conditions, and that he was upset about the pregnancy. There was direct evidence that he smoked multiple pipe bowls of marijuana while driving.

Section 4 of the Negligence Act was enacted to be used in the circumstances that arose here, where it would not be practicable for the trial judge to determine the respective degrees of responsibility for the accident and for the damages House suffered as a result. His decision to apply that section and apportion liability on a 50/50 basis discloses no error.

(3) No.

In Ontario, the discount rate is provided by Rule 53.09 of the Rules of Civil Procedure, and is reconsidered from time to time by the Civil Rules Committee in order to maintain its accuracy and reliability. While the discount rate is fixed by regulation in British Columbia, in Ontario, the parties are entitled to lead expert evidence and, on the basis of that evidence, to ask the trial judge to impose a different discount rate than the one found in the Rule.

The appellant submits that the trial judge erred by accepting the logic of the evidence of the expert but declining to act on it. He argues that the established basis for tort damages, namely, the principle of restoring him to the position he would have been in but for the loss, outweighs the need to apply the Rule to maintain stability in its application.

While the trial judge saw the logic of the expert’s analysis, he did not fully accept his evidence, and was not prepared to act on it. That is the prerogative of a trial judge. There is no basis to interfere.

(4)  No.

Baird seeks leave to appeal both aspects of the costs order. Brad-Jay Investments Limited v. Village Developments Limited sets out that leave to appeal costs will only be granted “in obvious cases where the party seeking leave convinces the court there are ‘strong grounds upon which the appellate court could find that the judge erred in exercising his discretion.’” The Supreme Court confirmed the same principle in Hamilton v. Open Window Bakery Ltd: “[a] court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong”. There is no such error in this case.

(a) Offer to settle

The trial judge made no error in finding that Baird’s offer to settle with three people for his policy limit was uncertain as to the actual amount being offered to the appellant. Uncertainty or lack of clarity in an offer may prevent a party from meeting its burden to show that the judgment obtained was as favourable as the offer, or more or less favourable, as the case may be.

(b) Sanderson order

Baird submits that the trial judge erred in making the modified Sanderson order by failing to consider the factors set out by this court in Moore (Litigation guardian) v. Wienecke, 2008 ONCA 162, which he says would not have supported the order.

Applying Moore, the threshold issue before a Sanderson order should be made is: was it reasonable for the plaintiff to join the several defendants in one action? The trial judge found that in this case it was reasonable for the appellant to sue both the municipality and Baird.

The next step is to then consider the four factors that Moore identifies as being relevant to a trial judge’s exercise of discretion: (i) whether the defendants tried to blame each other; (ii) whether the unsuccessful defendant caused the successful defendant to be added as a party; (iii) whether the causes of action were independent of each other; and (iv) the plaintiff’s ability to pay the costs.

In this case, the trial judge either explicitly considered, or was certainly aware of, these factors. While Baird’s counsel did not actively try to implicate Wilmot in the conduct of the cross-claim, Baird maintained the cross-claim throughout, and had rejected Wilmot’s offer to contribute. The appellant’s causes of action against Baird and Wilmot were related, arising out of the same accident and relating to contribution and causation. Any award against the appellant would reduce his limited recovery and his ability to pay a costs award made against him.

Each of these factors, unlike in Moore, could support the decision to alleviate the burden on the appellant by making the unsuccessful defendant, Baird, responsible for the costs of the successful defendant, Wilmot. In this case, the trial judge took a very fair approach by reducing Baird’s costs responsibility by half, to reflect counsel’s approach at trial of not aggressively trying to shift blame onto Wilmot. The Moore factors “need not be applied mechanically” and the exercise is a discretionary one. The Court found that the trial judge made no error and his decision should attract deference.

Colucci v. Colucci, 2017 ONCA 892

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

R Gordner, for the appellant

S Multani, for the respondent

Keywords: Family Law, Child Support, Jurisdiction, Divorce Act, ss. 15(1) and 17(1), D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37; Buckingham v. Buckingham

Facts:

The appellant father and the respondent mother were married in 1983 and divorced in 1996. They have two children born in 1988 and 1989. The appellant father was ordered to pay child support to the respondent mother at the time of the divorce in the amount of $115.00 per week for each child. He made more or less regular payments until April, 1998. Thereafter, payments were irregular and they eventually ceased in June 1999. He accrued more than $175,000 in arrears by the time both children were over eighteen years old and were no longer “children of the marriage”. Since the divorce, the father has lived and worked as an unskilled labourer in Canada, the U.S. and Italy. His income tax returns and other financial disclosure report a declining income since 1997.

The father brought a motion to change the order retroactively and to have his arrears rescinded on the ground that there had been a change in circumstances. The mother brought a cross-motion to dismiss the application for want of jurisdiction. The father brought a motion for summary judgment, asking the court to determine that narrow issue. The motion judge dismissed the father’s motion and granted summary judgment dismissing the application to vary on the ground that D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37 (“D.B.S.”) deprives the court of jurisdiction to rescind or vary support arrears once the children are no longer “children of the marriage”.

Issues:

(1) Did the motion judge err by dismissing the father’s application on the ground that the court did not have jurisdiction to entertain it?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The issue of jurisdiction turns on the effect of the Supreme Court’s decision in D.B.S. That and related decisions dealt with four applications to vary child support orders, two under Alberta legislation and two under the Divorce Act. One of the points considered was whether an application for child support could be made under the Divorce Act after the child had ceased to be a “child of the marriage”. Relying on the specific language of the section, Bastarache J. held that s. 15.1(1) conferred jurisdiction to make a child support order only where there were children who were still “children of the marriage”.

One of the four cases decided together with D.B.S., Henry v. Henry, involved an application for retroactive variation of a child support order. At the time the notice of motion to vary was filed, the eldest child was no longer a child of the marriage. The Supreme Court held that as the Notice to Disclose/Notice of Motion had been served while that child still was a child of the marriage, there was jurisdiction to entertain the application. That might suggest that there would have been no jurisdiction had the proceedings not been initiated while the child was still a child of the marriage, but the court did not directly consider or decide that point. In some cases, including the case at bar, trial level judges have held that D.B.S. governs and declined to vary child support orders after the children are no longer “children of the marriage”.

There is, however, a more persuasive line of conflicting authority supporting the view that given the different wording and purpose of s. 17(1), the test for jurisdiction to vary differs from the test for jurisdiction to make an original order under s. 15.1(1). The leading and most carefully reasoned decision is an Alberta Queen’s Bench decision in Buckingham v. Buckingham, 2013 ABQB 155, where Strekaf J. concluded that both the wording of the statute and the principles of child support favoured distinguishing D.B.S. and interpreting s. 17(1) to allow a court to vary a child support order even though the children are no longer children of the marriage. Courts have also retained jurisdiction on the basis that the payor parent’s deliberate absence or deception prevented the recipient from applying for a variation while the child was still a “child of the marriage”.

To date, where retroactive variation is sought when the children are no longer entitled to support, the courts have seen fit to entertain the request in the following situations: in variation proceedings where there is an existing order and an established support obligation under the Divorce Act; in motions to change proceedings where there is an existing order and an established support obligation under the Family Law Act; and when there has been blameworthy conduct on behalf of a support payor that has contributed to the support recipient’s failure to bring the retroactive support claim within the requisite time.

As Strekaf J. observed in Buckingham, the interpretation of s. 15.1(1) in D.B.S. turned on the precise wording of that provision, which confers jurisdiction to make a child support order for any who were, “at the material time”, “children of the marriage”. The jurisdiction to vary a child support order under s. 17(1) is at large and is not limited by those words. One must look first to the words of the statute, and given the difference between the words of s. 15.1(1) and 17(1), courts are not bound to import the interpretation accorded to s. 15.1(1) by the Supreme Court in D.B.S. when interpreting s. 17(1). Section 17(1) does not, by its language, limit the jurisdiction of the court to vary a child support order to the time period when the children are still “children of the marriage”, and the decision in D.B.S. does not compel interpreting the jurisdiction conferred by s. 17(1) as being precisely the same as that conferred by s. 15.1(1).

Allowing a court to vary an existing order after the children cease to be “children of the marriage” is consistent with the principles of child support. The principles at play are first, that the amount of child support depends upon the income of the parents; second, that as the parents’ income changes, so too does the obligation to pay support. The third relevant principle must be balanced with the second, namely, that child support orders should, as far as possible, foster certainty, predictability and finality. If an order imposes a child support obligation that does not correspond to the payor parent’s income, the order is not consistent with that principle. It is for that reason that D.B.S. permits retroactive orders in appropriate circumstances. Section 17(1) allows a court to vary an order where there has been a material change in circumstances to ensure that the child receives an amount of support commensurate with the income of the payor parent.

The court should not be deprived of jurisdiction to consider the request of a recipient parent who struggled to support the children and to shift part of that burden to the payor parent if there was a change in circumstance that would have justified a variation while the children were still children of the marriage. While the argument for allowing post-“child of the marriage” applications to decrease support is less compelling, if there is to be jurisdiction to entertain applications to increase, the law should adopt an even-handed approach and, from a jurisdictional perspective, treat payor and recipient parents the same way. If a court has jurisdiction to consider a recipient parent’s request for a retroactive increase in child support where the payor’s income increased, there should also be jurisdiction to consider a payor parent’s request for a reduction where his or her income declined.

Certainty, predictability and finality are important values in the family law regime. The interests of fairness and the need to ensure that children get the support they deserve precludes a rigid approach that forbids changing support orders when there has been a change in circumstances. The existence of s. 17(1) demonstrates that finality has its limits and that neither children nor parents can safely assume that support orders will never change. The interest of certainty and finality does not justify erecting a rigid jurisdictional bar on variation applications simply because the children are no longer “children of the marriage”.

For these reasons, neither the language of s. 17(1) nor the principles of child support require denying a court jurisdiction to vary an existing child support order or well established written or oral argument after the children cease to be “children of the marriage”. The appeal was allowed and summary judgment was granted, declaring that the court has jurisdiction to entertain the application. The matter was remitted to the Superior Court for a determination on the merits.

E.T. v. Hamilton-Wentworth District School Board, 2017 ONCA 893

[Sharpe, Lauwers and Miller JJ.A.]

Counsel:

A Polizogopoulos, for the appellant

M J Zega and Giovanna Di Sauro, for the respondent

D B M. Boss, for the intervenor Christian Legal Fellowship

K Hughes and L Sheffield, for the intervenor Elementary Teachers’ Federation of Ontario

J Hunter and E Bala, for the intervenor Attorney General of Ontario

Keywords: Constitutional Law, Freedom of Religion, Canadian Charter of Rights and Freedoms, s. 2(a), Human Rights Code, R.S.O. 1990, c. H.19, Education Act, R.S.O. 1990, c. E.2, s. 169.1(1), Doré v. Barreau du Québec, 2012 SCC 12, [2012] S.C.R. 395, Loyola High School v. Québec, 2015 SCC 12, [2015] 1 S.C.R. 613

Facts:

The appellant E.T. is the father of two primary school-aged children who attend a school within the jurisdiction of the respondent, Hamilton-Wentworth District School Board (the “Board”). E.T. is a committed Christian and a member of the Greek Orthodox Church.

The appellant advised the Board that his religious beliefs require him to shelter his children from what his religion regards as “false teachings”. He provided the Board with a standard form list of topics that included matters such as “moral relativism”, “environmental worship”, “instruction in sex education”, and “discussion or portrayals of homosexual/bisexual conduct and relationships and/or transgenderism as natural, healthy or acceptable”. He asked the Board to provide him with advance notice of any classroom instruction or discussion of these issues so that he could decide whether or not to withdraw his children from those classes or activities.

The Board offered to exempt the appellant’s children from the “Healthy Living” strand in the elementary program, which is offered as a discrete part of the curriculum and involves education on human development and sexual health. However, the Board explained to the appellant that its Equity Policy aims to provide an integrated secular and respectful learning environment that does not discriminate against any child. The Board’s program aims to promote a positive and inclusive environment that accepts all pupils, including those of any sexual orientation, gender identity and gender expression. The Board advised E.T. that, given the integrated nature of its program and the generality of the items on his list, it was neither practical nor possible to comply with his request for prior notification of any time one of the items on his list would arise for discussion in the classroom. The Board also expressed the concern that if E.T.’s children were required to leave the classroom every time one of these topics came up for discussion, the Board’s policy of providing an inclusive and non-discriminatory program would be undermined.

E.T. brought this application seeking declaratory relief, asserting that his parental authority over the education of his children had been denied and that his freedom of religion as guaranteed under s. 2(a) of the Charter of Rights and Freedoms was violated by the Board’s failure to provide him with the accommodation he requested. He also asserted a claim of religious discrimination under the Human Rights Code, R.S.O. 1990, c. H.19 and a violation of the Education Act, R.S.O. 1990, c. E.2.

E.T.’s application rested on the general assertion that the Board’s policies and decisions violated his religious freedom. He provided no evidence of any actual instance where his or his children’s religious freedom had been violated.

Issues:

(1) Did the application judge err in finding that the Board reasonably refused his request for advance notification of any classes, lessons or activities involving topics that he has identified as being sensitive, and for permission to withdraw his children from such classes, lessons or activities?

Holding: Appeal dismissed.

Reasoning (Sharpe J.A.):

(1) No. E.T.’s claim rested upon his general and pervasive dissatisfaction with the nature of the Board’s curriculum with respect to matters of equity, non-discrimination and inclusiveness. Given the very nature of the Board’s curriculum, E.T. argued that his children may be exposed to views with which he, for religious reasons, does not agree. However, Justice Sharpe found that E.T. did not prove a single instance where his children were coerced to do something that was contrary to his or their religious beliefs or where they were denied the right to manifest or observe their religion as they wished. Nor did he provide any evidence that his right to inculcate his children with his own religious views was curtailed or infringed.

Justice Sharpe held that the jurisprudence from the Supreme Court of Canada makes it clear that exposing students who are attending non-denominational public schools to ideas that may challenge or even contradict their parent’s sincerely-held religious beliefs does not amount to an infringement of religious freedom.

He accepted that E.T. has a sincere religious belief that he has an obligation to keep his children from being exposed to what he describes as “false teachings”. This sincere belief was the basis on which the application judge found that the Board’s Policy and its denial of the requested accommodation engaged the Charter by limiting its protections under s. 2(a) for E.T. and his children. However, a sincere religious belief alone is insufficient to establish interference with E.T.’s freedom of religion; in other words, his subjective belief that he must shield his children from hypothetical “false teachings” does not gain absolute protection. The onus remains on E.T. to proffer evidence that, from an objective standpoint, the instruction and activities to which his children are in fact exposed interferes with his ability to shield his children from “false teachings”. Justice Sharpe held that E.T. failed to satisfy this onus.

As such, while Justice Sharpe agreed with the result reached by the application judge, he disagreed with the conclusion that E.T. has established an infringement of his s. 2(a) right to freedom of religion.

The protection of religious freedom, like that of any other Charter right, “must be measured in relation to other rights and with a view to the underlying context in which the apparent conflict arises” (Amselem, at para. 62; S.L., at para. 25). In this case, E.T.’s children attend a non-denominational public school with a mandate to provide an open, accepting and inclusive educational experience for all children. E.T. did not ask to have his children exempted from certain specific and well-defined elements of the curriculum whose subject matter conflicts with his religious views. Instead, he sought to have advance notice and the ability to have his children leave the classroom at any time a “false teaching” would arise, an exercise that would undermine the message of diversity and inclusion which is woven throughout the integrated curriculum.

Exempting some students on a regular basis from classroom discussions touching on diversity, inclusivity and acceptance, within a public school program designed to promote precisely those principles, would run a serious risk of endorsing the non-acceptance of students of other family backgrounds, sexual orientations, gender expressions and gender identities.

Justice Sharpe stated that E.T. cannot, by virtue of his religious beliefs, insist that a non-denominational public school board restructure its inclusive and integrated program, designed to meet its statutory objective of ensuring a respectful and accepting climate for all children, so that he can ensure that his own children are not exposed to any views that he does not accept. The Board has a statutory mandate to provide an inclusive and tolerant educational environment, one that respects the principles of equality enshrined in s. 15 of the Charter. Equality, inclusivity and acceptance of difference are values, not facts, and it is unrealistic to expect teachers to provide a learning environment that is truly welcoming to all students in a value-free manner.

Lauwers J.A., B.W. Miller J.A. (Concurring)

Lauwers J.A. and B.W. Miller J.A. concurred with the result reached by Justice Sharpe and also dismissed the appeal for lack of evidence; however, his reasoning for that conclusion differed.

The central issue for Justice Lauwers was: what are the limits imposed by the Canadian Charter of Rights and Freedoms on a province’s power to use publicly funded education to inculcate, in the language of s. 264 of the Education Act, certain beliefs and dispositions educational authorities have determined are desirable or necessary?

Reasoning

Justice Lauwers stated that the appeal was governed by the Doré/Loyola two-step framework. The first step was to determine “whether the decision engages the Charter by limiting its protections.” If so, the second step was to determine “whether, in assessing the impact of the relevant Charter protection and given the nature of the decision and the statutory and factual contexts, the decision reflects a proportionate balancing of the Charter protections at play”.

Justice Lauwers dismissed the appeal for the following reasons:

First, Justice Lauwers stated that public education is designed to inculcate children in necessary civic virtues. Section 169.1 of the Education Act, the statutory authority underpinning the challenged school board decision, was enacted to further this purpose. Teachers play a critical role in inculcating civic virtues in schoolchildren.

However, Justice Lauwers stated that E.T. made a plausible claim that the school board’s decision to refuse to provide him with the accommodation he seeks limits his freedom of religion. As such, E.T.’s claim met the first half of the first step of the Doré/Loyola framework: his religious freedom was implicated.

Yet, Justice Lauwers was unable to find, based on the evidence, that the appellant had proven substantial interference with his freedom of religion, as the balance of the first step of the Doré/Loyola framework would require. For this reason, Justice Lauwers dismissed the appeal.

Lastly, although Justice Lauwers dismissed the appeal, he had serious concerns about the application of the Doré/Loyola framework to line decision makers such as teachers, principals and supervisory officers. In his view, in order to justify a Charter limit, the record of evidence considered by the line decision maker should demonstrate the elements of accountability, intelligibility, adequacy and transparency courts expect from administrative tribunals.

Wilfert v. McCallum, 2017 ONCA 895

[Feldman J.A. (In Chambers)]

Counsel:

P Starkman, for the moving parties

S A Hashim, for the responding parties

Keywords: Civil Procedure, Judgments, Enforcement, Fraudulent Conveyances, Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, s. 2, Gauthier v. Woollatt, [1940] 1 D.L.R. 275 (Ont. Sup. Ct.), Pleadings, Motions to Strike, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21, Pleading Fraud, Rules of Civil Procedure, Rule 25.06(8), Balanyk v. University of Toronto (1999), 1 C.P.R. (4th) 300 (Ont. S.C.), Bankruptcy and Insolvency, Assignments of Causes of Action, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 38

Facts:

The action was brought under s. 38 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”), for an order setting aside as a fraudulent conveyance, the 1993 conveyance by McCallum of his one half interest in the matrimonial home to his wife, Boughner. The appellants have appealed the dismissal of the action under Rule 21, and bring a motion seeking a stay to prevent Boughner from disposing of the property pending the appeal. The appellants are judgment creditors of the respondent McCallum, as a result of an action for defamation they brought against him in respect of statements made in 2014. They obtained default judgment on May 12, 2015, following which, McCallum filed an assignment in bankruptcy in September 2015. The appellants obtained an assignment of rights under s. 38 of the BIA to bring the fraudulent conveyance action.

Issues:

(1) Should the order dismissing the action and setting aside a certificate of pending litigation be stayed pending the hearing of the appeal?

Holding: Motion dismissed.

Reasoning:

(1) No. The primary legal issue on the appeal is whether the 1993 conveyance was a fraudulent conveyance within the meaning of s. 2 of the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29,  and whether the appellants are “creditors or others” within the meaning of the section. Section 2 provides: Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns.

The appellants became creditors of the respondents many years after the impugned conveyance. The leading case on the test for when a subsequent creditor can set aside a conveyance as fraudulent is Gauthier v. Woollatt, [1940] 1 D.L.R. 275 (Ont. Sup. Ct.), which identified two circumstances: (i) if there remains unpaid a creditor from the time of the conveyance who would have been entitled to impeach the conveyance; or (ii) if the debtor’s purpose in making the conveyance was to defraud present and future creditors generally.

On the record before the court, there was a mortgage on the property to the Royal Trust Corporation of Canada at the time of the conveyance, which was discharged in 2007. There is a bare pleading that there were other creditors, beyond Royal Trust, in 1993 and that the respondents’ intent was to defraud. However, there are no particulars whatsoever to support that bare allegation. The appellants rely on the principle that on a Rule 21 motion the facts pleaded are taken to be true. However, that principle must be tempered by the principle that fraud must be pleaded with particularity: see Rule 25.06(8); Balanyk v. University of Toronto (1999), 1 C.P.R. (4th) 300 (Ont. S.C.), at para. 28.

In the court’s view, on the basis of the record and the law, the issue to be heard on appeal cannot be said to be a serious one. The appellants filed no evidence to support a claim of irreparable harm, or to demonstrate that the balance of convenience favours the granting of a stay pending appeal. They rely on the discharge of the CPL as establishing irreparable harm. However, there is no evidence that the respondent Boughner intends to sell the property imminently, or that if she did, the proceeds would not be available to satisfy a judgment if the appeal were to be successful.

Holmes v. Hatch Ltd., 2017 ONCA 880

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

William D. Anderson, for the appellant

A H Monkhouse and B Faderin, for the respondent

Keywords: Contracts, Employment Law, Employment Agreements, Repudiation, Fundamental Breach, Termination of Employment, Reasonable Notice Period, Civil Procedure, Pleadings, Rodaro v. Royal Bank (2002), 59 O.R. (3d) 74 (C.A.)

Facts:

The appellant employer, Hatch Ltd (“Hatch”), appeals from a summary judgment awarding the respondent employee, Paul Holmes (“Holmes”), 18 months reasonable notice at common law for the termination of his employment, subject to his mitigation obligations and applicable statutory deductions.

The motion judge’s core finding, which anchored her decision to grant summary judgment in favour of Holmes, was that Hatch breached the termination clause contained in the written employment agreement between the parties, thereby repudiating, as a matter of law, the entire benefit of the employment agreement. Specifically, the motion judge held, as a fact, that Hatch failed to consider Holmes’ years of service, position and age when fashioning his termination package, contrary to the express wording of the termination clause.

Issues:

(1) Did the motion judge err in finding that the contract was invalid?

Holding: Appeal allowed.

Reasoning:

(1) Yes. First, the motion judge’s finding of Hatch’s breach of contract underpinned her entire decision. She found, on the evidence before her, that the breach involved Hatch’s failure to take account of some of the specific factors set out in the termination clause. This failure, she held, was a fundamental breach of contract that, at law, constituted a repudiation by Hatch of the entire employment agreement. As a result, the motion judge concluded that the contract was invalid and Holmes was entitled to common law damages based on reasonable notice of termination.

The difficulty with these findings, however, is that Holmes did not plead this type of breach of contract by Hatch. Nor did he allege in his pleading that Hatch repudiated the employment agreement on this basis. Similarly, he did not advance these claims in his Notice of Motion or factum on the summary judgment motion. It was only when the motion judge raised the notion of this type of breach during oral argument, and on her own motion, that the parties made oral and subsequent written submissions on this issue. In these circumstances, Hatch was denied the opportunity to lead evidence on the precise breach allegation on which the motion judge’s decision ultimately turned. Put somewhat differently, the motion judge decided the summary judgment motion on the basis of a legal theory of liability that was neither pleaded nor advanced by Holmes in support of his motion. As a result, prior to oral argument of the motion, Hatch did not know the evidentiary burden that the motion judge ultimately held it had to meet. The law assumes that the parties’ pleadings properly delineate all relevant claims in dispute and define the issues. In Rodaro v. Royal Bank (2002), 59 O.R. (3d) 74 (C.A.), at para. 60, the Court of Appeal had described the operative principle in this fashion:

It is fundamental to the litigation process that lawsuits be decided within the boundaries of the pleadings. As Labrosse J.A. said in 460635 Ontario Ltd. v. 1002953 Ontario Inc., [1999] O.J. No. 4071 (Ont. C.A.), at para. 9:

The parties to a legal suit are entitled to have a resolution of their differences on the basis of the issues joined in the pleadings. A finding of liability and resulting damages against the defendant on a basis that was not pleaded in the statement of claim cannot stand. It deprives the defendant of the opportunity to address that issue in the evidence at trial.

Hearing fairness was therefore fatally compromised.

Second, because the motion judge concluded that Hatch had fundamentally breached and repudiated the employment agreement on this basis, thereby rendering it invalid, she did not address or rule on Holmes’ arguments concerning the enforceability of the employment agreement. These included his contentions that the termination clause does not reflect a clear agreement to contract out of the common law or, in the alternative, that it is ambiguous on this issue, that the termination clause violates the provisions of the Employment Standards Act, 2000,  and that it was not supported by any valid consideration. These issues, therefore, have yet to be determined.

The appeal was allowed and the summary judgment was set aside. The matter was remitted to the Superior Court of Justice for a new hearing of Holmes’ summary judgment motion, if he is so advised, before a different judge of that court.

Berman v. Berman, 2017 ONCA 905

[Sharpe, Epstein and Van Rensburg JJ.A.]

Counsel:

M Stangarone and S Kirby, for the appellant
D Frodis, for the respondent

Keywords: Family Law, Custody, Kaplanis Test, Best Interest of the Child, Maximum Contact Principle, Equalization, Resulting Trust, Loan, Costs

Facts:

Following an eleven-day trial, the trial judge gave comprehensive reasons resolving issues of custody, access, support and equalization. The appellant raises four issues on appeal.

Issues:

(1) Did the trial judge err by granting sole custody of the parties’ child to the respondent?

(2) Did the trial judge err by failing to consider or apply the maximum contact principle?

(3) Did the trial judge err in her equalization award?

(4) Did the trial judge err in awarding the respondent approximately 60% of the full indemnity costs she claimed?

Holding:

Appeal dismissed.

Reasoning:

(1) No. the trial judge fairly considered the evidence and properly reviewed the relevant factors to conclude that it was in the best interests of the child that the respondent be granted sole custody.  The trial judge did not misapply or elevate the Kaplanis test for joint custody. There was evidence to support her finding that the degree of cooperation and communication required by Kaplanis and other appellate decisions to warrant a joint custody order was not present. It is for the trial judge to assess whether the parties’ ability to cooperate and communicate effectively in making parenting decisions warrants a finding that joint custody is in the best interests of the child.

(2)  The parenting schedule ordered by the trial judge took into account several factors, including the parties’ respective work schedules and the history of their ability to communicate and cooperate with respect to the child. The trial judge observed that the respondent was prepared to ensure the appellant played an active role in the child’s life. The order increased rather than decreased the appellant’s parenting time with his child from the interim order. The appellant’s concern is with the frequency of contact. The trial judge was best placed to determine the schedule that was in the best interests of this child.

(3) No.  However, the trial judge’s valuation corresponded with that provided by the appellant in his sworn financial statements and net family property statements. Her valuation was supported by the evidence. The trial judge took into account the proper legal test regarding the presumption of resulting trust and the relevant evidence in concluding that the respondent’s parents expected to be repaid a loan while the appellant’s brother-in-law did not. Those were factual findings open to the trial judge. It was also open to the trial judge to find that the appellant had failed to demonstrate that he came to the marriage with over $50,000 in cash.

(4) No. The costs award was amply supported by the trial judge’s assessment of the respondent’s success in the action and the conduct of the proceedings, including the respondent’s offer to settle.

J.K. v. Ontario, 2017 ONCA 902

[Hoy A.C.J.O., Huscroft and Paciocco JJ.A.]

Counsel:

T D Barclay and J Sydor for the appellant, Her Majesty the Queen in right of the Province of Ontario

K Baert and J Sayce for the respondent plaintiff, J.K.

C K Boggs for the respondents Bayan Community Services Inc., Craigwood Youth Services, Pwi-di-Goo-Zing-Ne-Yaa-Zhing Advisory Services, CAS of Nipissing and Parry Sound, William W. Creighton Youth Services, Ray of Hope Inc., Northern Youth Services Inc., Youth Services Bureau of Ottawa, Anago (Non) Residential Resources Inc., Kennedy House Youth Services Inc., North Eastern Ontario Family and Children’s Services/Services a la Famille et a L’Enfance du Nord-Est de L’Ontario, St. Lawrence Youth Association, Kinark Child and Family Srvc. Corp. (Markham), and York Detention Centre Ltd.

No one for the respondent Casatta Ltd.

Keywords: Civil Procedure, Striking Pleadings, Third Party Claims, Contracts, Indemnities, No Reasonable Cause of Action,  Class Proceedings, Crown Liability, Negligence, Breach of Fiduciary Duty, Vicarious Liability, Contributory Negligence, Charter Violations, Canadian Charter of Rights and Freedoms, ss. 7, 9, and 12

Facts:

This is a proposed class proceeding against Her Majesty the Queen in Right of the Province of Ontario (the “Crown”) alleging negligence, breach of fiduciary duty, and breach of Charter rights in the use of solitary confinement in youth detention centres across Ontario.

The Crown operates or oversees the operation of 23 youth detention centres in Ontario. Some are operated by the Ministry of Children and Youth Services (the “MCYS”), but others are operated by the Third Parties.  J.K., the plaintiff in this proposed class action under the Class Proceedings Act, 1992, S.O. 1992 c. 6, alleges that children in these facilities are regularly subjected to lengthy and wholly inappropriate periods of solitary confinement. He sues the Crown for damages on behalf of all persons who were detained and/or incarcerated at one of the facilities between January 1, 2007, and the present day. He asserts that the Crown was negligent, breached its fiduciary duties, and breached class members’ rights under ss. 7, 9 and 12 of the Canadian Charter of Rights and Freedoms. The Crown launched third party claims against the detention centres operated by Third Parties.

The Third Parties had contracted to provide services to the Crown in accordance with the policies, guidelines and requirements of the Crown, as communicated to them. The service contracts which govern their relationship include the following indemnity clause: “12(a) The Service Provider will, both during and following the term of this contract, indemnify and save harmless Ontario from all costs, losses, damages, judgments, claims, demands, suits, actions, complaints or other proceedings in any manner based upon, occasioned by or attributable to anything done or omitted to be done by the Service Provider, its directors, officers, employees, agents or volunteers in connection with services provided, purported to be provided or required to be provided by the Service Provider pursuant to this contract.”

The Crown claimed against each of the Third Parties under the indemnity clause in the service contract in respect of any amounts found owing to J.K. and the class members in respect of any facility operated by the Third Party.  In turn, J.K. and the Third Parties brought motions seeking to have the Crown’s third party claims struck out, severed, or stayed.

The motion judge considered this court’s decision in Taylor v. Canada (Health Canada), 2009 ONCA 487, 95 O.R. (3d) 561. The motion judge concluded that Taylor applied and precluded third party claims for breach of fiduciary duty and class members’ Charter rights.  In his words, “…those claims are claims for which the Crown exclusively would be liable and thus these claims would not support any third party claim against the [Third Parties] which cannot be liable for matters for which the Crown exclusively would be liable.” (para. 19).

Issues:

(1) Is it is plain and obvious that the Crown’s third party claim against 15 non-government, non-profit organizations (the “Third Parties”), which operated some of the youth detention centres under contract with the Crown, has no reasonable prospect of success and was properly struck, without leave to amend.?

Holding: Appeal allowed.

Reasoning:

(1) No. It is not plain and obvious that the Crown’s third party claim has no reasonable prospect of success.

Firstly, although the Court of Appeal agreed with the motion judge that J.K. could preclude third party claims arising out of his claim based in vicarious liability, they stated that para. 45 of the Fresh as Amended Statement of Claim was not clear enough to justify striking the Crown’s third party claim.  The Court stated that it would not strike the Crown’s third party claim as having no reasonable prospect of success unless J.K. amended his Fresh as Amended Statement of Claim to explicitly reflect what the court believed to be the reasoning underpinning the motion judge’s decision to strike the Crown’s third party claim. That is, if J.K. seeks damages against the Crown based on vicarious liability for harms perpetrated on residents of facilities that are operated by the Third Parties, by the Third Parties and their agents and employees, when acting within the authority granted to them by the Crown, he is not entitled to any such damages for which the Crown could claim contribution and indemnity from the Third Parties.

Moreover, the Court agreed with the Crown that it is not plain and obvious that J.K.’s claim that the Crown breached its fiduciary duty could not also support a third party claim. It is possible that the damages suffered by J.K. were caused concurrently by the Crown’s breach of its fiduciary duty and the Third Parties’ negligence. The indemnity clause in the service contracts might permit the Crown to seek indemnity for any damages for which it is found liable as a result of its breach of fiduciary duty if the damages were also “occasioned by or attributable to” the Third Party’s negligence.

York (Municipality) v. Irwin, 2017 ONCA 906

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

Counsel:

G C Borean, for the appellant

C G Bendick, for the respondent

Keywords: Municipal Law, Building Code Violations, Orders to Comply, Provincial Offences, Trials, Disclosure Orders, Certiorari, Collateral Attack, Provincial Offences Act, R.S.O. 1990, c. P.33, Building Code Act, 1992, S.O. 1992, c. 23

Facts:

The appellant Robert Irwin (“Irwin”) is charged with various offences under Part III of the Provincial Offences Act (the “POA”). He is alleged to have violated the Building Code Act (“BCA”) by not complying with six orders to comply that the respondent issued in 2013 under that Act.

The respondent, The Regional Municipality of York (“York”) asserts that various additions and alterations to Irwin’s property were constructed without a building permit. At trial, Irwin testified that the 2013 orders were identical to orders to comply that had been issued against him in 1995 and 1996 (the “Earlier Orders”), that led to charges that were withdrawn. Irwin sought an order requiring York to provide disclosure of prior charges and prosecutions against him. The justice of the peace issued the disclosure order after hearing argument.

The respondent applied to the Superior Court for an order for certiorari under s. 140 of the POA. The application judge granted an order quashing the disclosure order and requiring the justice of the peace to continue with the trial of the charges. The application judge concluded that, although the Earlier Orders may well have applied to the same buildings on the property and required the same actions, they had different compliance deadlines and therefore constituted distinct offences. York was entitled to issue more than one order to comply and each failure to comply would be a distinct offence. The application judge also accepted that, while the appellant might have relied on the withdrawal of the 1996 charges had he appealed the six orders, he could not now attack the validity of the order having failed to avail himself of the appeal mechanisms under the BCA.

The appellant appeals to the Court of Appeal by right, under s. 140(3) of the POA. He says that the application judge ought not to have granted certiorari during the trial and that any issue as to the relevance of the Earlier Orders ought to have awaited an appeal post-trial. He argues that the application judge ought not to have granted the order he did without finding that a substantial wrong or miscarriage of justice had occurred, as required by s. 141(4) of the POA, and that the test is not met in this case.

Issue:

(1) Did the application judge err by granting certiorari during the trial?

Holding: Appeal allowed.

Reasoning:

(1) Yes. A justice of the peace who is hearing a trial of charges under Part III of the POA is entitled to determine questions of the relevance of evidence and to make disclosure orders, without such decisions being challenged mid-trial. Applications for certiorari should be granted only rarely. Most erroneous rulings made during a trial are appealable only at the end of the trial as part of an appeal against conviction, dismissal or sentence. R. v. 1353837 Ontario Inc. sets out the test for intervention mid-trial by certiorari under s. 140 of the POA, which is whether the erroneous ruling makes the proceeding “so unfair that the interests of justice require the court to intervene and grant prerogative relief.”

The Court of Appeal found that the application judge erred by failing to consider the substantial wrong or miscarriage of justice test in s. 141(4) of the POA, and in determining on the merits and mid-trial the issue of whether the Earlier Orders were relevant to the appellant’s defence. Even if the disclosure order was wrong, complying with it does not amount to a substantial wrong or miscarriage of justice. The disclosure order will not preclude the respondent from arguing that the materials disclosed are not in fact relevant and that what is disclosed does not afford a defence. By contrast, the effect of the application judge’s order is that any defence based on earlier compliance is effectively taken “off the table”. Whether or not the appellant’s argument amounts to a collateral attack on the order to comply, that issue should have been resolved at trial on a proper record, and it was premature for the respondent to bring the issue forward before the trial was concluded.

Short Civil Decisions:

Matusovski v. Tzaferis, 2017 ONCA 881  

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

V Matusovski, acting in person

B R Moodie and B M Martin, for the respondents

Keywords: Torts, Negligence, Motor Vehicle Accident, Medical Examination

Corbett v. Odorico, 2017 ONCA 887

[Pardu, Trotter and Paciocco JJ.A.]

Counsel:

T J McCarthy, M Switzer and S Cummings, for the appellant

A A Farrer, for the respondents

Keywords: Civil Procedure, Miscarriage of Justice

Hsieh v. Ontario (Community and Social Services), 2017 ONCA 890

[Rouleau, Trotter and Paccioco JJ.A.]

Counsel:

M C Hsieh, acting in person

M Singh, for the respondent

Keywords: Civil Procedure, Appeals, Test for Leave to Appeal, Sault Dock Co. v. Sault St. Marie (City), [1973] 2 O.R. 479 (C.A.)

Tree-Techol Tree Technology and Research Company Inc. v. VIA Rail Canada Inc., 2017 ONCA 894

[MacFarland, Hourigan and Benotto JJ.A.]

Counsel:

B N Martin and B R Moodie, for the appellant/ moving party Intact Insurance Company

T Hanran, for the responding parties VIA Rail Canada Inc. and Canadian National Railway Company

E Savas, for the responding parties Tree-Techol Tree Technology and Research Company Inc., 1374007 Ontario Ltd. And Bryan M. McNair

Keywords: Costs Endorsement

Yami Talk Catering Management Ltd. v. 2309603 Ontario Inc., 2017 ONCA 888

[Pardu, Trotter and Paciocco JJ.A.]

Counsel:

M El Rashidy and C Handapangoda, for the appellants

S E Kazushner, for the respondents

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

Crawford v. Mori, 2017 ONCA 899

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

Counsel:

R Burns and J Broderick, for the appellants

B D Moldaver, for the respondents

Keywords: Civil Procedure, Settlement Agreements, Enforceability, Specific Performance

Criminal Decisions:

R v. S.M., 2017 ONCA 878 (Publication Ban)

[Strathy C.J.O., Doherty J.A. and McCombs J. (ad hoc)]

Counsel:

N Dennison, for the appellant

W Thompson and S Secter, for the respondent

Keywords: Criminal Law, Sexual Assault, Amended Indictment, Evidence, Reliability

R v. Thompson, 2017 ONCA 882

[Strathy C.J.O., Doherty J.A. and McCombs J. (Ad Hoc)]

Counsel:

P B Norton, for the appellant

D Krick, for the respondent

Keywords: Criminal Law, Attempted Murder, Evidence, Credibility, Reliability

R v. Brissard, 2017 ONCA 891 (Publication Ban)

[Pardu, Huscroft and Fairburn JJ.A.]

Counsel:

J Norris and M Conway for the appellant/respondent in sentence appeal, Timothy Dominic Brissard

D Finley for the respondent/appellant in sentence appeal, Her Majesty the Queen

Keywords: Criminal Law, Sexual Assault, Dangerous Offenders, Criminal Code, ss. 271 and 753, Character Evidence, Prior Sexual Conduct, Pattern of Repetitive Behaviour, Sentencing, Risk of Re-Offending

R v. Fourtounes, 2017 ONCA 898

[Rouleau, Pepall and Miller JJ.A.]

Counsel:

J Carlisle, for the appellant Jory Fourtounes

H J Doan, for the appellant Clifford Lewis

D Finley, for the respondent

Keywords: Criminal Law, Sentencing, Characterization of Offence, Aggravating Factors

R v. O’Connell, 2017 ONCA 896

[Strathy C.J.O., Doherty J.A. and McCombs J. (ad hoc)]

Counsel:

H L Krongold, for the appellant

A Cappell, for the respondent

Keywords: Criminal Law, Evidence, Palpable and Overriding Error

R v. Pum, 2017 ONCA 901

[Rouleau, Pepall and Miller JJ.A.]

Counsel:

D Gosbee, for the appellant

V Rivers, for the respondent

Keywords: Criminal Law, Marihuana Grow-Op, Controlled Drug and Substances Act, ss. 7(1) and 5(2), Misapprehension of Evidence, Unreasonable Verdict

R v. Arsenault, 2017 ONCA 884

[Rouleau, Pepall and Miller JJ.A.]

Counsel:

J Zita, for the applicant/appellant

K Healey, for the respondent

Keywords: Criminal Law, Possession for the Purpose of Trafficking, Sentencing, Mandatory Minimum Sentence, R. v. Lloyd, 2016 SCC 13

R v. Barnett, 2017 ONCA 897

[Doherty, LaForme, Rouleau JJ.A.]

Counsel:

D M Garg for the appellant, Her Majesty the Queen

M C Halfyard and B Vandebeek for the respondent, Antonio Barnett

Keywords: Criminal Law, Sentencing, Criminal Code, ss. 719(3), (3.1) and s. 726.1, Pre-Sentence Custody Credit, R v. Wilson, 2008 ONCA 510

R v. Johnson, 2017 ONCA 904 (Publication Ban)

[Watt, Hourigan and Miller JJ.A.]

Counsel:

A Ostroff, for the appellant

R DeFilippis, for the respondent

Keywords: Criminal Law, Sexual Assault, Misapprehension of Evidence

R v. Sahdev, 2017 ONCA 900 (Publication Ban)

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

M Halfyard and B Vandebeek, for the appellant

K Farrell, for the respondent

Keywords: Criminal Law, Sexual Assault, Severance Application, Standard of Review, Failure to Provide Reasons, R v. Sliwka, 2017 ONCA 426, 38 C.R. (7th) 115, Criminal Code, s. 686(1)(b)(iii), R v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788

R v. Budimirovic, 2017 ONCA 908

[Watt, Hourigan and Miller JJ.A.]

Counsel:

DAchtemichuk, for the appellant

T Gilliam, for the respondent

Keywords: Criminal Law, Production of Audio Recordings of In Camera Proceedings, Criminal Code, s. 683(1)(a)

R v. Lysenchuk, 2017 ONCA 912

[Feldman, Tulloch and Benotto JJ.A.]

Counsel:

T Yuen, for the appellant

J McKee, for the respondent

Keywords: Criminal Law, Possession of Child Pornography, Evidence

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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