COURT OF APPEAL SUMMARIES (JUNE 11-15)

Hello again.

Please find below our summaries for this week’s civil decisions of the Ontario Court of Appeal.

In Mancinelli v Royal Bank of Canada, the class plaintiffs had sought to add BMO and TD as party defendants to their claim against other financial institutions for conspiracy and price fixing in the foreign exchange markets. Justice Perrell had dismissed the plaintiffs’ motion, having found that class counsel could have, through “reasonable diligence”, discovered BMO and TD’s possible involvement in the secret conspiracy. He made that finding even though there was apparently no public document referencing BMO and TD’s possible involvement, and the first mention of their involvement was by UBS, one of the co-conspirators, after it had entered into a settlement with the class plaintiffs. The Court reversed Justice Perrell’s decision, finding that he had held class counsel to too high a reasonable diligence standard without a proper evidentiary foundation.

In Thunder Bay (City) v. Canadian National Railway Company, the Court was faced with reviewing the lower court’s interpretation of a contract entered into in 1906 between the Town of Fort William and the Grand Trunk Railway regarding the railway’s obligations to maintain a bridge “in perpetuity” for use by “vehicular traffic”. CN, which inherited the agreement, closed the bridge to cars and trucks (which had used the bridge for a century) and argued that the extensive structural changes needed to reopen the bridge for use by cars and trucks fell outside the definition of “maintenance”. It also argued that the meaning of “vehicular traffic” in 1906 only included streetcars, horses and carts, not cars and trucks. The lower court had found in favour of CN, but the Court of Appeal reversed the decision, finding the application judge’ s interpretation unreasonable. In doing so, the Court held that cars and truck traffic was within the contemplation of the drafters of the agreement in 1906, as the beginning of the age of the automobile was only a few years away.

Other topics covered this week included automobile insurance coverage in the leasing context, family law, limitation periods in the breach of contract context, the need for expert evidence on the standard of care on a summary judgment motion in the professional negligence context, administrative law in the software development tax credit context, and vexatious litigants.

I hope everyone is enjoying the weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2053

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

Table of Contents

Ahmad v Ahmad, 2018 ONCA 536

Keywords: Family Law, Custody and Access, Support, Equalization of Net Family Property

Kowalsky v Asselin-Kowalsky, 2018 ONCA 539

Keywords: Family Law, Support, Equalization, Practice and Procedure, Extension of Time to Appeal, Delay, Incapacity, Fresh Evidence, Sengmueller v Sengmueller, 1994 CarswellOnt 374

Thunder Bay (City) v Canadian National Railway Company, 2018 ONCA 517

Keywords: Contracts, Interpretation, Standard of Review, Extricable Errors of Law, Unreasonableness

Coast Capital Equipment Finance Ltd v Old Republic Insurance Company of Canada, 2018 ONCA 540

Keywords: Contracts, Automobile Insurance, Interpretation, Third Party Liability, Leased Vehicles, Insurance Act, section 5.1, OPCF 25, OPCF 5 Endorsement

Mancinelli v Royal Bank of Canada, 2018 ONCA 544

Keywords: Torts, Conspiracy, Competition Law, Price Fixing, Civil Procedure, Class Actions, Limitation Periods, Discoverability, Limitations Act, 2002, SO 2002, c 24, Sched B, s 5(1)

Davies v Davies Smith Developments Partnership, 2018 ONCA 550

Keywords: Contracts, Partnership Agreements, Breach, Civil Procedure, Limitation Periods, Discoverability, Damages, “Appropriate Means”, Limitations Act, 2002, SO 2002, c 24, Sched B, s.5

McPeake v Cadesky & Associates, 2018 ONCA 554

Keywords: Professional Negligence, Expert Evidence, Summary Judgement, Income Tax Act, s 75(2), Rules of Civil Procedure, rr. 20.04(2.1), (2.2), Connerty v Coles, 2012 ONSC 5218

Pong Marketing and Promotions Inc. v Ontario Media Development Corporation, 2018 ONCA 555

Keywords: Administrative Law, Taxation, Income Tax Credits, Statutory Interpretation, Specialized Tribunals, Standard of Review, Reasonableness, Taxation Act, 2007, S.O. 2007, c. 11, Schedule A, s. 34.

Susin v Susin, 2018 ONCA 549

Keywords: Estates, Civil Procedure, Appeals, Security for Costs, Orders, Setting Aside, Costs, Vexatious Litigants, Frivolous and Vexatious Proceedings, Abuse of Process, Rules of Civil Procedure, Rule 2.1.02(1)

For short civil decisions click here

For criminal and regulatory/ review board decisions click here

Civil Decisions

Ahmad v Ahmad, 2018 ONCA 536

[MacPherson, LaForme, and Roberts, JJA]

Counsel:

NA, acting in person

Robert A. Fernandes, for the respondent

Keywords: Family Law, Custody and Access, Support, Equalization of Net Family Property

Facts:

The appellant and respondent married in 2000 in Pakistan. They had three children and immigrated to Canada in 2013. Days later, the appellant left Canada which the trial judge treated as the day of separation. The appellant returned to Canada in 2015 and commenced family law proceedings seeking divorce, custody, support and equalization of net family property. The respondent commenced claims of her own. The self-represented appellant appeals a trial judgment granting the respondent sole custody of their three children with regular access to the applicant, monthly child support payments to be made by the appellant based on an imputed income, and an equalization payment to be made by the appellant.

Issues:

(1) Did the trial judge err by not including certain hours for religious/festive occasions in his access time?

(2) Did the trial judge err by including the appellant’s Pakistan pension and/or over-valuing this pension?

(3) Did the trial judge err by attributing real property in Pakistan and jewelry for equalization purposes?

(4) Was the trial judge biased in favour of the respondent?

Holding:

Appeal dismissed.

Reasoning:

Overall, the appellant failed to demonstrate that the trial judge committed a palpable or overriding error regarding a material fact. The trial judge’s analysis on all of the issues was thorough, reasonable and grounded in the evidence available to him.

(1) No. The trial judge’s conclusions regarding custody and access were made in the best interests of the children.

(2) No. The trial judge’s imputation of income to the appellant was necessary because the appellant had been less than forthright in his evidence and the trial judge was thus required to use the best evidence available to the court.

(3) No. The trial judge’s equalization findings required third party confirmation due to the appellant’s own lack of credibility.

(4) No. A review of the transcript and record reveals no evidence of bias. The trial judge was careful to ensure that the appellant had every opportunity to present his case. A finding of a lack of credibility does not translate into bias.

Kowalsky v Asselin-Kowalsky, 2018 ONCA 539

[MacPherson, LaForme and Roberts JJ.A.]

Counsel:

Patrick J. Kraemer, Justine A. Dalton and Michael A. van Bodegom, for the appellant

Kim S. Killer and Ainsley Hunter, for the respondent

Keywords: Family Law, Support, Equalization, Practice and Procedure, Extension of Time to Appeal, Delay, Incapacity, Fresh Evidence, Sengmueller v Sengmueller, 1994 CarswellOnt 374

Facts:

This is an appeal from an order determining the issues of equalization, child support and spousal support (“the final trial order”), and from an order dismissing a motion to set aside the final trial order. This appeal involves orders that were granted over ten years ago. It is equally exceptional because the entire passage of time can be explained by the evidence of the appellant’s prolonged history of serious mental health issues, which the court accepted as the basis for granting the appellant an extension of time to appeal in September 2017. The respondent instigated proceedings in 2005 to obtain a divorce and to determine the issue of equalization of the parties’ net family property. The appellant raised claims for child and spousal support. The parties were granted a divorce in 2006. The appellant failed to appear at trial for the remaining issues and the trial proceeded in her absence. Her brother attended and advised that the appellant’s health did not permit her to attend. The appellant’s subsequent motion to set aside the final trial order was dismissed in 2008, when she again failed to attend. The appellant submits that she was unable to attend the trial or her motion because she was physically and mentally incapable of doing so. She maintains that justice requires that the final trial order and the order of the motion judge be set aside.

Issues:

(1) Should the appellant’s fresh evidence be admitted before proceeding with argument on the merits?

(2) Was the appellant incapable of attending the trial and her motion?

(3) Should the decisions under appeal be set aside?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The appellant’s fresh evidence should be admitted because it satisfies all of the criteria for its admission: it could not have been provided before trial; it is credible; and it is conclusive of the main issue on this appeal, namely, whether the justice of the case requires that the orders under appeal be set aside in order to prevent an unjust result: Sengmueller v Sengmueller, 1994 CarswellOnt 374, at para 34.

(2) Yes. A fundamental purpose of the appellant’s fresh evidence was to explain her absence at trial and her motion. To succeed on her appeal, her explanation must be sufficiently cogent that it credibly excuses her absence and that it would be procedurally unfair to allow the trial and motion orders to stand. However, there is no requirement that she prove a certain level of incapacity including one that rises to the definition under the Substitute Decisions Act, SO 1992, C 30 or the Mental Health Act. It was within days of the trial that the appellant was found incapable and involuntarily hospitalized. The appellant lacked the capacity to prepare for and attend at trial and the motion, which resulted in disastrous financial consequences for her. The outcome would likely have been dramatically different had the appellant been present, and had she been given the opportunity to challenge the respondent’s evidence with her own evidence and through cross-examination and submissions.

(3) Yes. In these highly unusual circumstances justice requires that the final trial order and order of the motion judge be set aside. The garnishment order, which flows from these, must also be set aside and the garnished monies in the amount of $248,609 plus interest paid back to the appellant. However, the merits of the family law proceeding must be determined at a new trial. The Court is not in a position to determine the issues of equalization, and child and spousal support, all of which require credibility assessments and finding of fact.

In the result, the appeal was allowed, the final trial order was set aside, the garnishment order was set aside, and an order was made that the issues of equalization and support be determined at a new trial. Given the age of these proceedings, it is in the parties’ best interests that the trial should be case-managed and expedited. The appellant was entitled to partial indemnity costs of this appeal, including the motion for an extension of time and the fresh evidence motion.

Thunder Bay (City) v Canadian National Railway Company, 2018 ONCA 517

[Laskin, MacPherson and Fairburn JJ A]

Counsel:

C Matthews and S Sood, for the appellant

G Pratte, N Effendi and D Ault, for the respondent

Keywords: Contracts, Interpretation, Standard of Review, Extricable Errors of Law, Unreasonableness

Facts:

This appeal concerns the interpretation of an agreement made in 1906 for the construction of a bridge across the Kaministiquia River in Thunder Bay. The parties to the agreement were the Town of Fort William, now amalgamated into the appellant, the City of Thunder Bay, and the Grand Trunk Pacific Railway, now the respondent Canadian National Railway Company (“CN”).

Grand Trunk Pacific built the Bridge, completing it in 1909. The Bridge is a combined railway and roadway bridge. The Bridge remained open for railway trains, cars, trucks, and people for over 100 years. However, in 2013, CN briefly closed the Bridge because of a fire. The fire caused only minor damage and CN reopened the Bridge three days later. But it reopened the Bridge only for railway trains and pedestrians, not for motor vehicles. It claimed that the Bridge could not safely be reopened for motor vehicles because of the risk an “errant” or wayward vehicle would leave the roadway, go across the sidewalk and into the river.

When CN refused to reopen the Bridge for vehicles, Thunder Bay brought an application for a determination of its contractual rights under the 1906 Agreement. Two provisions of this Agreement are central to this appeal: section 3, in which Grand Trunk Pacific agreed to give Fort William “the perpetual right to cross the said bridge for street railway, vehicle and foot traffic”; and section 5, in which CN agreed to “maintain the bridge in perpetuity”.

Before the application judge, Thunder Bay took the position that CN is in breach of its contractual obligation to keep the Bridge open perpetually for vehicles. CN took the position that it could not do so safely without making significant structural changes to the Bridge, which were beyond its obligation to “maintain” under s. 5 of the Agreement. The application judge sided with CN.

On its appeal, Thunder Bay contends that the lower court’s findings are tainted by legal error or are unreasonable. It submits that the parties intended that the citizens of Thunder Bay would have the perpetual right to cross the Bridge by any kind of vehicle and that CN has the obligation to maintain the Bridge in perpetuity. CN contends that the application judge made no legal error, his findings are supported by the evidence, and so appellate intervention is not warranted.

Issues:

(1) Is the application judge’s finding on the parties’ intent tainted by “extricable” errors of law or is it unreasonable?

(2) Did the application judge err in law by holding that Thunder Bay had the onus to give the court a specific and detailed proposal to make the Bridge safe for motor vehicles?

Holding: Appeal allowed.

Reasoning:

(1) Yes, the application judge’s findings were unreasonable and, in addition, were tainted by two extricable errors of law:

(a) Unreasonableness: The application judge’s finding is unreasonable because he failed to give proper effect to the words of the 1906 Agreement or to the context in which the Agreement was made. In this case, the central debate was over the meaning of the words “vehicle traffic” or “vehicular traffic” in the 1906 Agreement, and the parties’ intent in using these words. The application judge interpreted the words narrowly to mean only the vehicle traffic that existed in 1906 – streetcars, horses, and carts. The full context in which the 1906 Agreement was signed unquestionably supports the broad interpretation of vehicle traffic that includes the motorcar. Three contextual considerations are important in interpreting the meaning of vehicle or vehicular traffic in the 1906 Agreement: (i) the purpose of both the 1905 and the 1906 Agreements (to accommodate population growth); (ii) the reasonable expectations of the parties in entering into the 1906 Agreement (that population growth would result in greater transportation needs); and (iii) the coming of the automobile era (back in 1906, the parties can reasonably have been taken to know that soon, not even many years in the future, automobiles would become the predominant mode of road travel).

(b) Error in law #1: In interpreting the 1906 Agreement, the application judge committed an extricable error of law by failing to give any effect to the words “perpetual” and “in perpetuity”. The right to cross the Bridge perpetually, and the obligation to maintain the Bridge in perpetuity, can only mean that the parties intended the Bridge to be open for any kind of vehicle as the word “vehicle” is not defined or limited to any particular kind of vehicle.

CN draws a distinction between maintaining the Bridge and making structural changes to the Bridge. CN contends that making the Bridge safe for cars and trucks would require structural changes to the Bridge, changes that exceed its maintenance obligation under section 5 of the Agreement. But the court viewed the distinction between maintenance and structural changes to be of little practical consequence. As the application judge found, CN consistently took the position that the many repairs and upgrades it has made to the Bridge over the years were matters of maintenance, not structural changes. Yet those repairs and upgrades, all falling within CN’s maintenance obligation, have been sufficient to allow cars and trucks to drive safely across the Bridge. CN’s position is tantamount to relying on the doctrine of frustration of contract to excuse its breach. CN is seeking to show that the 1906 Agreement, at least for vehicle traffic, has become “incapable of being performed”. That argument, however, is not available to it in this proceeding because the application judge made no finding that the 1906 Agreement was at an end, nor could he. He did not even make a finding that CN was incapable of performing its contractual obligation. CN must therefore comply with the 1906 Agreement and reopen the Bridge for cars and trucks after making whatever maintenance repairs and upgrades it thinks necessary to maintain the risk to public safety at an acceptable level.

(c) Error in law #2: The application judge also committed an extricable error of law by taking into account the subsequent conduct of the parties, though the meaning of the 1906 Agreement is not ambiguous. If any relevant ambiguity exists in the meaning of the 1906 Agreement, that ambiguity relates not to the scope of CN’s maintenance obligation, but to the meaning of vehicle traffic. On this question, the subsequent conduct of the parties, especially CN itself, resolves any ambiguity. The subsequent conduct of CN in maintaining the safe operation of the roadways on the Bridge for the exclusive use of cars and trucks supports Thunder Bay’s position that vehicle traffic in the 1906 Agreement was meant to include the advent of motor vehicle traffic.

(2) Yes, the application judge erred in law by placing an onus on Thunder Bay to provide a proposal to make the Bridge safe for motor vehicles. CN has a contractual obligation to maintain the Bridge for motor vehicles in perpetuity, an obligation it has breached. To rectify its breach, CN must reopen the Bridge; it therefore has the onus to determine what maintenance is needed to alleviate any safety concerns associated with the Bridge’s reopening under the Bridge Maintenance Program mandated by the Railway Safety Act, RSC, 1985, c 32 (4th Supp.) and Transport Canada.

Accordingly, the court made the following order:

(a) A declaration that CN has breached the 1906 Agreement.

(b)  Requiring CN to reopen the Bridge for vehicle traffic and maintain the Bridge in accordance with the 1906 Agreement.

Coast Capital Equipment Finance Ltd v Old Republic Insurance Company of Canada, 2018 ONCA 540

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

Counsel:

Caroline Gronke, for the appellant

Patrick Monaghan, for the respondent

Keywords: Contracts, Automobile Insurance, Interpretation, Third Party Liability, Leased Vehicles, Insurance Act, section 5.1, OPCF 25, OPCF 5 Endorsement

Facts:

This appeal concerns a dispute between a lessor of a vehicle, Coast Capital Equipment Finance Ltd. (“Coast Capital”), and an insurer as to whether the lessor is insured for third party liability under a policy of automobile insurance. The appeal turns on the construction of a Certificate of Automobile Insurance and an Ontario Policy Change Form (“OPCF”) 25 Change Form, both issued by the respondent, Old Republic Insurance Company of Canada (“Old Republic”).

An OPCF 23A endorsement provides for payment to a lienholder in the event of damage to the vehicle. An OPCF 5 endorsement expressly allows a lessor to rent or lease a motor vehicle to a lessee who has completed an Ontario Application for Automobile Insurance – Owner’s Form, and also provides coverage to a lessee as if the lessee were the named insured. It is common ground that if that endorsement is part of the policy, both the lessor and the lessee benefit from third party liability insurance.

A trucking company leased two tractors from Coast Capital. Old Republic issued an OPCF 25 Change Form showing the trucking company as the insured, and listing the two tractors. The OPCF 25 Change Form made no mention of either the OPCF 5 or OPCF 23A endorsements. One of the tractors was involved in a motor vehicle accident and it was Old Republic’s position that it was not required to respond to the loss.

The application judge concluded that while the OPCF 23A endorsement was part of the policy, the OPCF 5 endorsement was not and Coast Capital was not entitled to liability coverage. He stated repeatedly that the OPCF 5 endorsement was never part of the Certificate or added by the OPCF 25 Change Form. He did not address the significance of the phrase “AS PER OPCF 5 FORMS” contained in the Certificate.

Issues:

(1) Is the OPCF 5 endorsement part of the Certificate?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court concluded that the OPCF 5 endorsement is part of the Certificate. No deference is owed to the application judge’s decision as he did not address this additional language in the Certificate upon which this appeal turns.

The court emphasized that section 5.1 of the Insurance Act provides that a certificate issued under subsection (5) is “of the same force and effect as if it were the standard policy, subject to the limits and coverages shown by the insurer on the certificate and any endorsements issued with or subsequently to the certificate.”

Following the hearing, the panel requested that the parties provide copies of the forms approved for use at the relevant times. The material submitted following the hearing demonstrates that the Superintendent approved a form of Certificate of Automobile Insurance for the relevant time, and has also approved a custom form of Certificate of Automobile Insurance submitted for approval by Old Republic (the “Approved Certificate”). The Approved Certificate did not contain the phrase “AS PER OPCF 5 FORMS”. This phrase must have been added to the Certificate by Old Republic. If added for this particular transaction, it leads readily to the inference that the Certificate was intended to provide coverage to both the lessor and the lessee.

The court concluded that the insurer intended to provide liability coverage to both the lessor and lessee. The OPCF 25 Change Form did not delete that coverage, but added new vehicles. Absent deletion of the OPCF 5 coverage, the court concluded that Coast Capital is entitled to the benefit of that coverage. Old Republic’s insertion of the OPCF 5 language into the Certificate accords with the commercial reality of the transaction.

The trucking company leased multiple vehicles, to the knowledge of the insurer. It makes commercial sense for the lessors who were financing the purchase of the vehicles to protect themselves from liability as the owners of those vehicles when they would have no control over the trucking company operations.

Mancinelli v Royal Bank of Canada, 2018 ONCA 544

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

Counsel:

Kirk M Baert, Celeste Poltak and Louis Sokolov, for the appellants

Lara Jackson, Wendy Berman and Christopher Horkins, for the respondents, the Bank of Montreal, BMO Financial Corp., BMO Harris Bank N.A., BMO Capital Markets Limited (collectively “BMO”)

Paul Le Vay, Brendan van Niejenhuis and Benjamin Kates, for the respondents, Toronto Dominion Bank, TD Bank, N.A., TD Group Holdings, LLC, TD Bank USA, N.A. and TD Securities Limited (collectively “TD”)

Keywords: Torts, Conspiracy, Competition Law, Price Fixing, Civil Procedure, Class Actions, Limitation Periods, Discoverability, Limitations Act, 2002, SO 2002, c 24, Sched B, s 5(1)

Facts:

This is an appeal from the motion judge’s order dismissing the appellants’ motion to add the respondents, BMO and TD, as defendants in an existing class action alleging a secret conspiracy to manipulate the foreign exchange market.

The appellant, CS, commenced an action against sixteen (16) groups of financial institutions in September 2015, alleging a price-fixing conspiracy in the foreign exchange or foreign currency market between January 1, 2003 and December 31, 2013. The statement of claim included allegations that the defendants (including the proposed defendants) actively attempted to conceal their participation in the conspiracy by, among other things, engaging in secret communications.

The first group of defendants to settle consisted of UBS AG, UBS Securities LLC and UBS Bank (Canada) (collectively “UBS”). The settlement required UBS to cooperate with the appellants. In fulfilling that obligation, UBS gave an evidentiary proffer on May 24, 2016 (the “Proffer”).

On July 20, 2016, CS brought a motion under r. 5.04(2) and r. 26.01 of the Rules of Civil Procedure to add the respondents to the action. The respondents opposed the motion on the basis that the claim against them was barred by the Limitations Act, 2002, SO 2002, c 24, Sched B (the “Act”) and the Competition Act, RSC 1985, c C-34. The defendants did not file a statement of defence and no discovery had taken place at the time the motion was heard.

Class counsel’s evidence on the motion was that they learned of BMO and TD’s involvement in the alleged conspiracy for the first time at the Proffer. UBS advised class counsel that it reviewed approximately 2,000 collusive chats dating as far back as 2008 and that foreign exchange traders at BMO and TD were among the persons participating in those chats. Additionally, class counsel submitted evidence that from the time prior to the commencement of the action to the date of the Proffer, the appellants conducted their own investigations into the alleged conspiracy. However, there was no public information available that referred to or mentioned BMO or TD as being involved.

In dismissing the appellants’ motion, the motion judge acknowledged that there was no evidence that any public documents identified BMO or TD as being involved in the alleged conspiracy. The motion judge thus accepted that the appellants did not know they had a conspiracy claim against the respondents until the Proffer. Nevertheless, the motion judge found as a fact, at para. 61, that the appellants’ evidence on the motion was “insufficient to establish that they behaved as reasonable person[s] in the same or similar circumstances to identify [the respondents] as conspirators and the evidence rather establishes that their identity could have been established with reasonable diligence before the expiry of the limitation period.”

Issue:

(1) Did the motion judge err in dismissing the appellants’ motion on the basis that their claim against the respondents was statute-barred?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court held that the motion judge erred in principle by establishing too high an evidentiary threshold on the motion before him. Additionally, the court found that the motion judge further erred by finding that the appellants could have identified the respondents with due diligence in the absence of any evidentiary foundation and by failing to determine with sufficient precision when they ought to have discovered the claim.

The court held that on a motion to add defendants in a class action alleging a secret conspiracy before any statements of defence had been filed or any discoveries had taken place, the motion judge required the appellants to meet too high of an evidentiary threshold. The appellants provided a reasonable explanation as to why they could not have identified the respondents as co-conspirators before July 20, 2014. Moreover, the respondents led no evidence of any further reasonable steps the appellants could have taken before that time.

Additionally, the court held that a plaintiff’s failure to take reasonable steps to investigate a claim is not a stand-alone or independent ground to find a claim out of time. Rather, the reasonable steps a plaintiff ought to take is a relevant consideration in deciding when a claim is discoverable under s. 5(1)(b) of the Act. On the facts, there was no evidentiary foundation for the motion judge’s finding that the respondents’ identities as co-conspirators could have been established with reasonable diligence. Nor did the motion judge determine with sufficient precision when the appellants ought to have discovered that they had a claim.

Consequently, the court held that these issues required consideration on a summary judgment motion or at trial. Accordingly, the motion judge should have permitted the appellants to add the respondents as defendants, and reserved the respondents’ right to plead a limitation defence.

Davies v Davies Smith Developments Partnership, 2018 ONCA 550

[Strathy C.J.O, Feldman and Brown JJ.A.]

Counsel:

John E.F. Gibson and Paul Bates, for the appellant

Evan L. Tingley, for the respondent

Keywords: Contracts, Partnership Agreements, Breach, Civil Procedure, Limitation Periods, Discoverability, Damages, “Appropriate Means”, Limitations Act, 2002, SO 2002, c 24, Sched B, s.5

Facts:

The appellant retired from a partnership. The partners signed an agreement which called for his equity and his share in the profits to be paid to him between June 2005 and June 2008 according to a schedule of payments. The payments were not made at the times set out in the schedule because the respondent did not have sufficient funds to pay. There were also disagreements over the quantification of the appellant’s share of the profits. The appellant commenced litigation in 2012, four years after the date the payments were to be made. The trial judge found that the appellant’s action was time-barred. His claim was “discovered”, within the meaning of s. 5 of the Limitations Act, 2002 when he did not receive the payments. He knew in July 2008 that he had suffered injury, loss or damage; that the damage was caused by the failure of the respondent to make the payments; and that it was legally appropriate to commence an action. The trial judge dismissed the appellant’s action.

Issue:

  1. Did the trial judge err in finding that the limitation period had expired?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge did not err in finding that the limitation period had expired. The appellant made four submissions: (a) the amount owing to the appellant was in dispute; (b) the profits could not be ascertained until the partnership’s projects had been completed; (c) an action was not an “appropriate” means to remedy the appellant’s loss because the respondent had insufficient funds; and (d) there had been forbearance or novation, making it inappropriate to commence an action. The appellant argued that the claim was not discovered until 2011, when he realized that the respondent had made improper charges to his capital account. In regard to the first two submissions, the Court of Appeal found that the appellant confused “damage” with “damages”. The appellant knew by the end of June 2008 that he had suffered damage, even though the amount of his damages was a matter of dispute and had not been quantified. The appellant’s third submission that the respondent did not have the funds to pay did not stop the limitation period from running. The word “appropriate”, as it appears in s 5 of the Limitations Act, means “legally appropriate”. The appellant cannot rely on his own tactical reasons for the delay. In regard to the fourth submission, there is no evidence that the parties agreed to amend the agreement or to replace it with a new agreement. The answer to this submission is: (a) it was not pleaded; (b) because it was not pleaded, no evidence was adduced with respect to it; and (c) the issue was not argued in the court below.

McPeake v Cadesky & Associates, 2018 ONCA 554

[Juriansz, Benotto, and Fairburn, JJA]

Counsel:

Yan David Payne and Karen J Sanchez for the appellant

Sandra E Dawe for the respondent Cadesky & Associates

Alfred J Esterbauer and Sydney Hodge for the respondent BS

Geoffrey D E Adair for the third party

Keywords: Professional Negligence, Expert Evidence, Summary Judgement, Income Tax Act, s 75(2), Rules of Civil Procedure, rr. 20.04(2.1), (2.2), Connerty v Coles, 2012 ONSC 5218

Facts:

In 1999, the appellant and two associates sold their company to Microsoft. Approximately $4.8 million of the proceeds was received by the appellant’s family trust. The Canada Revenue Agency (“CRA”) attributed all the gains in the family trust to the appellant personally, and reassessed him for some $2.4 million in taxes, interest and penalties in accordance with s. 75(2) of the Income Tax Act. The Federal Court of Appeal later ruled that the CRA’s interpretation of s. 75(2) was incorrect, and concluded it did not apply to property acquired by a trust from a beneficiary in a bona fides sale transaction. The appellant’s tax liability was reduced to approximately $57,000.

The appellant commenced an action against the respondent Cadesky & Associates (“Cadesky”) for professional negligence in its accounting services to the appellant’s company. The motion judge dismissed the appellant’s claim against BS as establishing no genuine issue for trial. The motion judge was satisfied there was a genuine issue for trial as to whether Cadesky was retained with regard to the formation of the family trust or the preparation of the family trust deed. However, she was satisfied that she could determine the issue by resorting to the summary judgement fact-finding powers set out in Rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure. The motion judge found that the parties both failed to file expert evidence regarding the standard of care of an accountant in the circumstances and, in so doing, determined there was no genuine issue for trial because the case did not fall within the exception to this general rule requiring expert evidence to support a claim for professional negligence.

Issues:

(1) Did the motion judge err in requiring the appellant to file expert evidence to support a professional negligence claim on a summary judgement motion?

(2) Did the professional’s conduct fall obviously short of the standard of care and thus meet the general exception to the rule?

(3) Did the motion judge err in finding that the appellant had not filed adequate expert evidence?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellant relied on Connerty v Coles, 2012 ONSC 5218 [Connerty] to support his position that a plaintiff need not file expert evidence to support a professional negligence claim when defending a summary judgment motion. In Connerty, the Superior Court had deteremined that the need for expert evidence on summary judgment motions will be a product of the particular factual circumstances in each case. In this case, the motion judge had before her extensive evidence and was able to develop a full appreciation of the facts and so it was appropriate to file expert evidence. The motion judge did not err in her consideration of Connerty.

(2) No. The motion judge recognized the existence of the general rule but found that this was not a case where the professional’s conduct obviously fell below the standard of care. Evidence of the standard of care in the circumstances was required and there is no basis to interfere with the motion judge’s refusal to resort to the exception to the general rule.

(3) No. The evidence to which the appellant points as qualifying as expert evidence was not expert evidence.

Pong Marketing and Promotions Inc. v. Ontario Media Development Corporation, 2018 ONCA 555

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

Lisa La Horey and Farzin Yousefian, for the appellant

Scott C Hutchinson and Kenneth Grad, for the respondent

Keywords: Administrative Law, Taxation, Income Tax Credits, Statutory Interpretation, Specialized Tribunals, Standard of Review, Reasonableness, Taxation Act, 2007, S.O. 2007, c. 11, Schedule A, s. 34.

Facts:

The Ontario Media Development Corporation (“OMDC”) is an agency of Ontario’s Ministry of Tourism, Culture and Sport. Its purpose is to promote innovation, investment and employment in the cultural media industry in Ontario. Further to that objective, it jointly administers, alongside the Canada Revenue Agency, the Ontario Interactive Digital Media Tax Credit (“DMTC”), a tax credit provided to developers for digital products whose primary purpose is to “educate, inform or entertain the user”.

Pong Marketing and Promotions Inc. (“Pong”) applied to the OMDC for a Certificate of Eligibility for a DMTC of approximately $2 million for its development of 15 digital “sweepstakes” games, which it licenced to third party retailers. The OMDC denied Pong’s application on the basis that the games were not developed for the primary purpose of educating, informing, or entertaining the user, but rather were developed for promoting the sale of long-distance phone cards and related products and services.

Pong brought an application for judicial review, which was successful. The Divisional Court agreed that the OMDC’s decision was inconsistent with the plain meaning of the regulation governing eligibility for the DMTC, and was therefore unreasonable. It also noted that, if the OMDC’s interpretation was reasonable it would have nonetheless applied a residual presumption in favour of the interpretation of the taxpayer, Pong. It remitted the matter back to the OMDC for reconsideration.

The OMDC appealed.

Issues:

(1) Did the Divisional Court err in its interpretation of s. 34(1) of the Taxation Act – specifically, in failing to adequately defer to the OMDC’s interpretation?

(2) Did the Divisional Court err in finding in the alternative that the residual presumption in favour of taxpayers would apply and work in favour of the interpretation advanced by the respondent?

Holding:

Appeal allowed.

Reasoning:

(1) Yes. The dispute was over whether Pong’s products had the requisite characteristics as stated in section 34(1) of the Taxation Act 2007, S.O. 2007, c. 11, Schedule A, specifically, that “their primary purpose is to educate, inform or entertain the user.” The Divisional Court argued that the priority of the users’ intention in playing the games was compelled by section 34. It understood the phrase “while they are being operated” as requiring the purpose of the files to be assessed “when the user is playing it; not the moment when it is created or licensed.” From this premise, the Divisional Court concluded “[t]hat the definition requires the [OMDC] to look at the primary purpose of the game from the perspective of the player.” They determined that Pong’s marketing material and licence agreement templates did not shed any light on the users’ purpose in playing the games, but only evidence Pong’s motivation for developing the products.

The Divisional Court accordingly found the OMDC’s decision to be inconsistent with “the plain meaning of the wording of the [Regulation]”, which required “primary purpose” to be assessed as the purpose of a person playing the games. The purpose of a person playing the games was to be entertained, therefore the purpose of the games was to entertain. In support of this conclusion, it further held that because “the legislature intended to use the tax credit to assist high-technology, knowledge-based industries”, the OMDC’s focus on the purpose of the developer in creating the games “undermines legislative intent.”

The Court of Appeal found that all the Regulation directs is that the OMDC ascertain the primary purpose of a product by determining what functions the digital files perform when they are being operated. Nothing in the text directs that the user’s purposes in playing the games must take priority over any other purpose the products serve.

In assessing what it is the digital files do when they are being operated, the OMDC considered the documentation that it received from the respondent, including promotional materials and licencing agreements. These provided some evidence of the purposes of the digital files by providing evidence of what the developer intended for them to do, and how they were to do it, when they were being operated. As these materials clearly stated, the games were marketed to retailers not for the purpose of entertaining users as an end in itself, but to be used, when operated, as a means to a further, more ultimate end of inducing users to purchase phone cards from the retailers.

To succeed on the appeal the OMDC did not need to establish that its interpretation of the Regulation was more plausible than the one identified by the majority. All it needed to do was establish that its interpretation was reasonable, and that its decision flowed from the evidence before it. The court held that OMDC had established that.

(2) Yes. The Court held that where there is generality and vagueness in the context of an administrative scheme, the intention is for the decision-maker to supply a specification. The majority stated that there would often be no uniquely right answer to a question: only determinations, chosen from among equally acceptable alternatives, which could conceivably have been made differently. Where these determinations are reasonable, courts are not permitted to intervene.

In this case, the Regulation required the OMDC to determine a product’s “primary purpose” as well as whether that purpose was to “educate, inform or entertain the user”. These criteria required evaluations of what is primary, and specifications of what it means to educate, inform or entertain. Were the residual presumption to be applied in the manner suggested by Pong, it would eliminate much of the authority conveyed on the OMDC by statute. The court held this would undermine the statutory scheme and be inconsistent with the rationale for, and nature of, a reasonableness standard of review.

Susin v Susin, 2018 ONCA 549

[Strathy C.J.O., Feldman and Brown JJ.A.]

Counsel:

ES, acting in person

Margaret A. Hoy, for the responding party

Keywords: Estates, Civil Procedure, Appeals, Security for Costs, Orders, Setting Aside, Costs, Vexatious Litigants, Frivolous and Vexatious Proceedings, Abuse of Process, Rules of Civil Procedure, Rule 2.1.02(1)

Facts:

This case involves litigation among nine siblings, relating to the estate of their late father, which has been before the Court of Appeal on three prior occasions. The continued misconduct of some of the participants in the proceedings has been the subject of sanctions, notably an order made in 2008 by Quinn J., declaring JS to be a vexatious litigant. The result of the 11-year history of these proceedings is that a relatively modest estate, consisting primarily of the family home, has been dissipated, leaving behind a slew of unpaid costs orders against the appellants.

The matter before the court came by way of a motion in writing to set aside the order of Fairburn J.A., dismissing the appellants’ motion to set aside the order of Gillese J.A., which required that the appellants each pay the sum of $15,000 into court as security for the costs of their appeal.

Issues:

(1) Should the motion be dismissed under Rule 2.1.01(1)?

Holding: Motion to set aside dismissed.

Reasoning:

(1) Yes. Having considered the submissions of the parties, the motion to set aside the order of Fairburn J.A., the endorsement of Fairburn J.A., and the endorsement of Gillese J.A., as well as the history of this litigation, the court was satisfied that the motion was frivolous, vexatious and an abuse of process and, accordingly, it was dismissed pursuant to Rule 2.1.02(1).

The court was satisfied that it is appropriate to make an order pursuant to Rule 2.1.02(3)prohibiting the appellants, or any of them, from making any further motions in this proceeding without leave of a judge of the Court of Appeal. The Court required that any such motion seeking leave must be made in writing and will not be accepted unless proof of service on the respondent’s counsel is provided at the time of filing. Also, before bringing any such motion, the appellants are required to satisfy all outstanding costs orders made against them by judges of both the Court of Appeal and of the Superior Court of Justice, and shall file proof by affidavit that they have done so

Short Civil Decisions

1806700 Ontario Inc. v Dmuchowski, 2018 ONCA 557

[Strathy C.J.O., Feldman and Brown JJ.A.]

Counsel:

Muhammad Aslam Khan, acting in person

Joga Singh Chahal, for the plaintiff

Tim Gleason, for the intervenor Sandeep Singh Johal

Keywords: Civil Procedure, Appeals, Perfection of Appeals, Extension of Time, Security for Costs, Courts of Justice Act, RSO 1990, c C.43, s 7(5)

Criminal and Regulatory/ Review Board Decisions

Krivicic (Re), 2018 ONCA 535

[Feldman, Roberts and Trotter JJ.A]

Counsel:

Jill R. Presser and Jeff Marshman, amici curiae

Elvis Krivicic, acting in person

Megan Petrie, for the respondent, the Attorney General of Ontario

Keywords: Criminal Law, Criminal Harassment, Failing to Comply with a Recognizance, Ontario Review Board, NCR, Public Interest, Fresh Evidence, Criminal Code, s. 672.54, Mental Health Act, RSO 1990, c. M7

R. v Ismail, 2018 ONCA 543

[Pepall, Hourigan and Nordheimer JJ.A.]

Counsel:

Diane Condo, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal Law, Firearms Offences, Evidence, Eye Witness Testimony, Burden of Proof, Fresh Evidence, Sentencing, Mandatory Minimum, Criminal Code, s. 244(3), R. v Palmer, [1980] 1 SCR 75, R. v Lacasse, 2015 SCC 64

R. v McClennan, 2018 ONCA 542

[Doherty, Pepall and Nordheimer JJ.A.]

Counsel:

David Friesen, for the appellant

Stephen Menzies, for the respondent

Keywords: Criminal Law, Summary Convictions, Impaired Care or Control of a Motor Vehicle,  Evidence, Breathalyzer, Palpable and Overriding Error, Criminal Code, s. 258(1)(a)

R. v Patel, 2018 ONCA 54

[Doherty, Pepall and Nordheimer JJ.A.]

Counsel:

Jeffrey Rybak, for the appellant

Megan Patric, for the respondent

Keywords: Criminal Law, Fraud, Self Represented Parties, Right to Counsel, Adjournments, Charter of Rights and Freedoms s 10(b), R. v  Hazout (2005), 199 CCC (3d) 474 (Ont. CA)

R. v Noftall (Publication Ban)

[Lauwers, Pardu and Huscroft JJ.A.]

Counsel:

Nader R. Hasan, duty counsel

Edward Noftall, in person

Leslie Paine, for the respondent

Keywords: Criminal Law, Sexual Assault, Honest but Mistaken Belief in Consent, Evidence, Credibility, Demeanor, Prior Inconsistent Statements, R. v Ewanchuk, [1999] 1 SCR 330, R. v Dinardo, 2008 SCC 24, R. v J. (M.A.), 2015 ONCA 725, R. v Warren, 2016 ONCA 104

R.v R.V., 2018 ONCA 547

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

Jonathan Dawe, for the appellant

Katie Doherty, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Admissibility, Cross-Examination, DNA Evidence, Credibility, Criminal Code, ss. 276, 152,  669.2, R. v M.T., 2012 ONCA 511, R. v Seaboyer, [1991] 2 SCR 577, R. v L.S., 2017 ONCA 685 Canadian Charter of Rights and Freedoms, ss. 7, 11(d)

Simopoulos (Re), 2018 ONCA 546

[MacFarland, Watt and Paciocco JJ.A.]

Counsel:

Anita Szigeti, for the appellant Mason Simopoulos

Elena Middelkamp, for the respondent the Attorney General of Ontario

Keywords: Criminal Law , NCRMD, Ontario Review Board, Criminal Harassment, Failure to Comply With Recognizance, Substance Abuse, Medical Marijuana

R.v Ruthowsky, 2018 ONCA 552 (Publication Ban)

[Paciocco J.A. (Motion Judge)]

Counsel:

Gregory Lafontaine, for the applicant

Michael Perlin, for the respondent

Keywords: Criminal Law, Bribery, Attempt to Obstruct Justice, Breach of Trust, Bail Pending Appeal, Public Interest, Reasonable Apprehension of Bias, Criminal Code, ss 679(3), 679(10), R. v Oland, 2017 SCC 17, R. v Manaserri, 2013 ONCA 647

R. v N.B., 2018 ONCA 556

[Laskin and Pepall JJ.A. and Gans J. (ad hoc)]

Counsel:

Anthony Moustacalis, for the appellant

Michael Bernstein and Frank Au, for the respondent

Keywords: Criminal Law, First Degree Murder, Forensic Evidence, Youth Criminal Justice Act, S.C. 2002, c.1, s. 146(2), Canadian Charter of Rights and Freedoms, s 10(b), R. v Azzam, 2008 ONCA 467

R. v Klimitz, 2018 ONCA 553

[Lauwers, Pardu and Miller JJ.A.]

Counsel:

David Klimitz, acting in person

Gerald Chan, appearing as duty counsel

Hannah Freeman, for the respondent

Keywords: Criminal Law, Theft, Fraud, Restitution, Evidence, Cross-Examination, Canadian Charter of Rights and Freedoms, s 11(b), R. v Bradshaw, 2017 SCC 35, R. v Khelawon, 2006 SCC 56

R. v Spilman, 2018 ONCA 551

[Rouleau, Watt and Brown JJ.A]

Counsel:

Derek Norman Spilman, acting in person

Amy Ohler, appearing as duty counsel

Lorna Bolton, for the respondent

Keywords: Criminal Law, Assault Causing Bodily Harm, Dangerous Offenders, Sentencing, Serious Personal Injury Offences, Criminal Code, ss 753(1)(a), 810.2, R. v Boutilier, 2017 SCC 64

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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