ONTARIO COURT OF APPEAL SUMMARIES (APRIL 23 – APRIL 27, 2018)

Good evening.

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

Topics covered this week included two procedural fairness decisions (one relating to interpreting a contract in a way neither party argued, the other relating to the effect of a lengthy adjournment mid-trial), repair and storage liens in the automobile insurance context, the tort of conversion, as well as several short procedural decisions.

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John Polyzogopoulos
Blaney McMurtry LLP
jpolyzogopoulos@blaney.com
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Table of Contents:

2237446 Ontario Inc. (409 Collision Centre) v. Intact Insurance, 2018 ONCA 394

Keywords: Contracts, Bailment, Repair and Storage Liens Act, R.S.O. 1990, c. R.25, s. 24, Subrogation, Insurance Act, R.S.O. 1990, c. I.8, s. 278

Danilova v. Nikityuk, 2018 ONCA 403

Keywords: Civil Procedure, Evidence, Credibility, Collusion, Procedural Fairness, Adjournments, Prejudice

Union Building Corporation of Canada v. Markham Woodmills Development Inc., 2018 ONCA 401

Keywords:  Real Property, Contracts, Agreements of Purchase and Sale of Land, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Procedural Fairness, Labatt Brewing Co. v. NHL Enterprises Canada L.P., 2011 ONCA 511, Moore v. Sweet, 2017 ONCA 182, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.)

For Short Civil Decisions click here.

For Criminal Decisions click here.

For Ontario Review Board Decisions click here.

Civil Decisions

2237446 Ontario Inc. (409 Collision Centre) v. Intact Insurance, 2018 ONCA 394

[Hourigan, Huscroft and Nordheimer JJ.A.]

Counsel:

M A Klaiman, for the appellant

L M Carr, for the respondents

Keywords: Contracts, Bailment, Repair and Storage Liens Act, R.S.O. 1990, c. R.25, s. 24, Subrogation, Insurance Act, R.S.O. 1990, c. I.8, s. 278

Facts:

The applicant appeals from the dismissal of its application to have the initial certificate that was obtained by the respondent, Intact Insurance, under s. 24(5) of the Repair and Storage Liens Act, R.S.O. 1990, c. R.25 (“RSLA”) declared null and void.

On December 20, 2015, a motor vehicle owned by the respondent, BB, was involved in an accident. It was towed to the storage premises operated by the appellant. On January 6, 2016, Brennan executed a Vehicle Repair and Storage Agreement in which she agreed to pay a storage rate of $85.00 per day. Under her automobile insurance policy, Intact was obliged to reimburse BB for the storage costs.

Intact and the appellant could not agree on the storage charges that were properly due for the storage of the vehicle. Consequently, Intact applied for and received an initial certificate under s. 24 of the RSLA. By virtue of s. 24(6) of the RSLA, once Intact gave the initial certificate to the appellant, the appellant was obliged, within three days of receiving the initial certificate, to release the article described therein to Intact unless, within that period, it filed a notice of objection with the court.

Rather than filing a notice of objection, the appellant brought this application to have the initial certificate declared null and void. The appellant asserted that, since Intact had not paid Brennan for the value of the vehicle, Intact was not, at that time, either the owner of the vehicle, nor was it “any other person entitled to” the vehicle under s. 24(1) of the RSLA. Hence, according to the appellant, Intact was not entitled to obtain the initial certificate.

The application judge found that Intact had “assumed liability” under the contract of insurance and was then subrogated to the rights of its insured under s. 278 of the Insurance Act, R.S.O. 1990, c. I.8. The application judge proceeded from this finding to conclude that Intact was a “person lawfully entitled to” the automobile and thus had the right to obtain an initial certificate under s. 24 of the RSLA.

Issues:

(1) Did the application judge err in dismissing the application to have the insured’s initial certificate declared null and void?

Holding: Appeal dismissed.

Reasoning:

(1) No. It is obvious that the intent of the RSLA is to provide an expeditious procedure for dealing with disputes over storage charges that protects both the storage holder and the owner of the item stored. The interpretation that the appellant argues for would effectively require insurers to settle all matters arising out of a motor vehicle accident with its insured, and make the resulting payment, before it would be able to avail itself of the remedies under the RSLA. In the interim, storage charges would continue to accumulate. That interpretation is not one that is harmonious with the object of the RSLA. It is also not one that reflects the realities of the marketplace, in which this statute operates. There will be many occasions where issues will arise between an insured and an insurer under an automobile insurance policy. It would not be to the benefit of either the insured or the insurer to have charges relating to the storage of motor vehicles involved in accidents mount up while those issues are resolved.

Danilova v. Nikityuk, 2018 ONCA 403

[Doherty and Pepall JJ.A. and Gray J. (ad hoc)]

Counsel:

A M Chapman and J Mor, for the appellants

A Dhillon and L Loader, for the respondents, AN and VN

A M Mae and W Thomson for the respondents, YS and YMCA Simcoe/Muskoka

Keywords: Civil Procedure, Evidence, Credibility, Collusion, Procedural Fairness, Adjournments, Prejudice

Facts:

The appellants raise three grounds of appeal. Two concern the trial judge’s credibility assessments and the third alleges prejudice resulting from a five-month adjournment in the course of the trial proceedings.

Issues:

(1) Did the trial judge prefer the evidence of the respondents over the appellants in a peremptory manner that failed to demonstrate the basis upon which the trial judge’s credibility determinations were made?

(2) Was there evidence that one of the respondents colluded with three witnesses called by the YMCA in respect of their evidence?

(3) Did the adjournment of the trial cause serious prejudice to the appellants, effectively denying them meaningful access to justice?

Holding: Appeal dismissed.

Reasoning:

(1) No. Counsel relied on a single passage in para. 59 of the reasons for judgment. It is true that para. 59 is conclusory, however, that paragraph must be read in the context of the entire judgment. Throughout the judgment, the trial judge made findings of fact that amply justified the trial judge’s ultimate credibility findings and fully explained to the reader the reasons for that finding. Read as a whole, the reasons adequately explain the trial judge’s findings.

(2) No. The record does not offer any evidentiary support for a collusion finding. It is difficult to find collusion in a situation in which the “will-says” said to be prepared by one of the respondents, one of the alleged colluders, are inconsistent in material respects with the evidence given by witnesses who are said to have colluded with YS. We observe that, in some cases, the version of events in the “will-says” were more favourable to the respondents but in at least one case, the “will-says” were more favourable to the appellants.

(3) No. No actual prejudice has been demonstrated by the appellants and in this case none can be assumed merely from the length of the adjournment.

Union Building Corporation of Canada v. Markham Woodmills Development Inc., 2018 ONCA 401

[Hourigan, Huscroft and Nordheimer JJ.A.]

Counsel:

B Zarnett and F Kussner, for the appellant

G J. Tighe and B R Michelson, for the respondent

Keywords:  Real Property, Contracts, Agreements of Purchase and Sale of Land, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Procedural Fairness, Labatt Brewing Co. v. NHL Enterprises Canada L.P., 2011 ONCA 511, Moore v. Sweet, 2017 ONCA 182, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.)

Facts:

By an Agreement of Purchase and Sale made in July 2015 (the “APS”), the appellant agreed to sell to the respondent an undeveloped 3.6 acre parcel of land for a sale price of $3,960,000. The land was zoned agricultural and was part of a larger 19.29 acre parcel of land owned by the appellant in the City of Markham (the “City”). The respondent wished to purchase the land so that it could develop it for its head office. The APS contained a provision, clause 17, making the sale conditional upon the City consenting to a severance of the land being sold to the respondent from the larger parcel owned by the appellant, pursuant to s. 50 of the Planning Act, R.S.O. 1990, c. P.13. Clause 17 provided that the appellant would seek the severance and satisfy any conditions the City imposed, except for conditions that were “onerous or unreasonable”. In the event the City imposed an onerous or unreasonable condition, clause 17 provided that the appellant could give the respondent the opportunity to satisfy such severance condition. If the respondent chose not to do so, then the APS would be null and void.

The severance was obtained by the appellant but it was made subject to certain conditions. One of the severance conditions that the City imposed was to require the appellant to enter into the Cathedral West Cost Sharing Agreement (the “Cost Sharing Agreement”) – a private agreement among other landowners in the area who were developing, or had developed, their lands. The appellant had no intention of developing its property and had not previously entered into the Cost Sharing Agreement. One aspect of entering into the Cost Sharing Agreement was that the appellant would have to fund development-related costs in the amount of $407,582.

The appellant took the position that this severance condition was onerous or unreasonable under clause 17. The appellant invoked its rights under clause 17 and gave the respondent the option to satisfy the severance condition. The respondent disagreed that the severance condition was onerous or unreasonable. It took the position that clause 17 required the appellant to satisfy the condition. However, in order to prevent the APS from floundering on this issue, the respondent agreed to pay the $407,582 necessary to satisfy the severance condition but reserved its rights to seek that amount back from the appellant. On that basis, the purchase of the property closed.

The respondent then brought the underlying application to the Superior Court of Justice for a determination that the appellant was required to pay the $407,582 that the respondent had paid to satisfy the severance condition. Rather than interpreting the wording of clause 17, as was suggested in the Notice of Application, the application judge interpreted clause 19.  The respondent did not advance an argument based on clause 19 in its pleadings. The application judge observed that clause 19 of the APS required the amended zoning to be in full force and effect at the time of closing. However, the amended zoning, as passed by the City, had a “hold” in place. The “hold” would be lifted once there was compliance with the Cost Sharing Agreement and payment of the accompanying obligations. The application judge concluded that the amended zoning was not “in full force and effect” until that payment was made. Consequently, he found the appellant was required to bear the costs and granted the application.

Issues:

(1) Did the application judge err in his interpretation of the APS?

Holding: Appeal allowed.

Reasoning:

(1) Yes. In a normal situation, an application judge’s interpretation of a non-standard form contract is entitled to deference. Accordingly, on an appeal from a judicial decision, the interpretation of a non-standard form contract is normally reviewable only for palpable and overriding error unless there is an extricable question of law. However, natural justice overtakes questions of contractual interpretation where a judge decides a proceeding on a basis that was not anchored in the pleadings, evidence, positions or submissions of the parties. In this case, the parties proceeded before the application judge for a determination of their respective rights based on the interpretation of clause 17 of the APS. There is also not a single mention of clause 19 in the Notice of Application, nor is there any mention of the zoning issue generally. The application judge’s decision to dispose of the application on a basis that was not advanced by the parties amounts to a denial of procedural fairness.

The Court of Appeal decided to reach its own determination on the interpretation of clause 17 pursuant to its powers under section 134(1)(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43, rather than remit it to a new application judge.

Clause 17 permits the appellant to refuse to comply with a condition of severance that is onerous or unreasonable. The application judge made brief reference at the tail end of his reasons to the fact that, while the $407,582 that had to be paid under the Cost Sharing Agreement was approximately 10.3% of the $3,960,000 sale price, there was no evidence as to the percentage that the $407,582 represented in terms of the profit the appellant would make on the sale of the property. The Court of Appeal found that this was not the appropriate test to be applied in determining whether the amount to be paid under the Cost Sharing Agreement was onerous or unreasonable under clause 17. In fact, the Court of Appeal found that it was not the onerous exception that applied to the payment, but the unreasonable exception. What rendered the payment unreasonable, in these circumstances, was the fact that the appellant never had any intention of developing this property. It was selling the property. It was the respondent that wished to develop the property.

Reasonableness must be interpreted objectively. On the application, there was ample objective evidence demonstrating that a reasonable person would not consider the requirement that a vendor of undeveloped land pay the costs associated with the future development of the land to be a reasonable interpretation of the APS. The Court of Appeal found, therefore, that the requirement that the Cost Sharing Agreement be entered into, with the requisite $407,582 payment in order to obtain the severance, was an unreasonable one for the appellant to bear. As a result the Court of Appeal allowed the appeal and dismissed the application.

Short Civil Decisions

Gravelle (CodePro Manufacturing) v. Denis Grigoras Law Office, 2018 ONCA 396

[Hourigan, Huscroft and Nordheimer JJ.A.]

Counsel:

Gordon Gravelle, acting in person

B Hardick, for the respondents

Keywords: Civil Procedure, Limitation Periods, Discoverability, Arbitration, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., s. 4

Weenen v. Biadi, 2018 ONCA 393

[Epstein, Hourigan and Paciocco JJ.A.]

Counsel:

S Turney and A Reklitis, for the moving party, Fasken Martineau DuMoulin LLP

Y D Payne, for the responding party, Matthew Weenen

Keywords: Civil Procedure, Costs, Solicitors’ Liens, Charging Orders, Solicitors Act, R.S.O. 1990, c. S.15, s. 34(1)

665750 Ontario Inc. v. Atlantic Towing Inc., 2018 ONCA 397

[Benotto, Brown and Miller JJ.A.]

Counsel:

S N Zeitz, for the appellant

T Robinson and R Blumberg, for the respondent

Keywords: Torts, Conversion, Unjust Enrichment, Damages

Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 400

[Doherty, Brown and Nordheimer JJ.A.]

Counsel:

J A Olah, for the appellant, Blue Mountain Resorts Limited

E Chadderton and J Beleskey, for the respondents/appellants by cross-appeal, Snow Valley Resorts (1987) Ltd. Aka Snow Valley (Barrie), Snow Valley Barrie, Snow Valley Ski Resort, Snow Valley, and 717350 Ontario Ltd. (collectively, “Snow Valley”)

P J Pape, S Chaudhury, and E Rankin, for the respondent, and for the appellant/respondent by cross-appeal

Keywords: Endorsement, Costs, Partial Indemnity, Public Interest Litigation, Odhavji Estate v. Woodhouse, 2003 SCC 69

Ernst & Young Inc. v. Essar Global Fund Limited, 2018 ONCA 405

[Blair*, Pepall and van Rensburg JJ.A.]

Counsel:

P D S Jackson, A Gray, J R Opolsky, A Shelley and D Shiff, for the appellants Essar Global Fund Limited, New Trinity Coal, Inc., Essar Ports Algoma Holding Inc., Algoma Port Holding Company Inc., Port of Algoma Inc., and Essar Steel Limited

C P Prophet, N Kluge and D Contractor, for the respondent Ernst & Young Inc. in its capacity as Monitor of Essar Steel Algoma Inc. et al.

E Kolers and P Corney, for the respondent Essar Steel Algoma Inc.

P H Griffin, M Jilesen, R Trenker and K Nusbaum, for the appellants GIP Primus, L.P. and Brightwood Loan Services LLC

Keywords: Endorsement, Costs, Partial Indemnity, Joint or Several Liability

Criminal Decisions

R v. G.C. (Publication Ban), 2018 ONCA 392

[Rouleau, Tulloch and Fairburn JJ.A.]

Counsel:

G.C., in person

E Chozik, duty counsel

D Calderwood, for the respondent

Keywords: Criminal Law, Incest, Sexual Assault, Ineffective Assistance of Counsel, R v. Stark, 2017 ONCA 148, R v. Khan, 2001 SCC 86

R v. Walters, 2018 ONCA 391 

[Rouleau, Tulloch and Fairburn JJ.A.]

Counsel:

Donald Charles Walter, in person

E Chozik, duty counsel

G J Tweney, for the respondent

Keywords: Criminal Law, Dangerous Offenders, Criminal Harassment, Failure to Comply with Probation Orders,  Criminal Code, s. 753(1)(a)(i), R v. Walters, 2012 ONSC 3567, Sentencing, R v. Boutilier, 2017 SCC  64, [2017] 2 S.C.R. 936

R v. M.B. (Publication Ban), 2018 ONCA 399

[Feldman, Roberts and Trotter JJ.A.]

Counsel:

M Halfyard and B Vandebeek, for the appellant

N Dennison, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Credibility

Review Board Decisions

Carangay (Re), 2018 ONCA 395

[Hoy A.C.J.O., Sharpe and Nordheimer JJ.A.]

Counsel:

R Browne, for the appellant

C Elmasry, for the Crown

Keywords: Criminal Law, Not Criminally Responsible, Ontario Review Board, Significant Threat to the Safety of the Public, Conditional Discharge

Leuschner (Re), 2018 ONCA 398 

[Hoy A.C.J.O., Sharpe and Nordheimer JJ.A.]

Counsel:

A Szigeti, for the appellant

J Epstein, for the respondent, the Attorney General of Ontario

M Warner, for the respondent, the Person in Charge of the Centre for Addiction and Mental Health

Keywords: Criminal Law, Ontario Review Board, Not Criminally Responsible, Assault, Failure to Appear, Breach of Recognizance, Significant Risk to the Public, R v. Ferguson, 2010 ONCA 810

Mott (Re), 2018 ONCA 404

[Strathy C.J.O., Watt and Epstein JJ.A]

Counsel:

J Fernandes, for the appellant

K Doherty, for the respondent the Attorney General of Ontario

J A Zamprogna Ballès, for the respondent the Southwest Centre for Forensic Mental Health Care, St. Joseph’s Health Care London

Keywords: Criminal Law, Theft, Not Criminally Responsible, Ontario Review Board, Significant Risk to the Public, Kelly (Re), 2015 ONCA 95

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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