Author: John Polyzogopoulos

For years, our firm has been preparing weekly summaries of decisions just released by the Court of Appeal for Ontario (other than criminal law decisions) for internal distribution, usually on Friday afternoons. On more than one occasion, our lawyers have relied on decisions they learned about over the weekend at their hearings the following week. We have now decided to share our summaries with the Ontario bench and bar. We hope that you find this service useful and welcome your comments. John Polyzogopoulos, a partner in our Commercial Litigation group, is the editor of this blog. Feel free to contact John regarding any suggestions you may have or with respect to any possible referrals of litigation matters to our firm. John can be reached at 416.593.2953 or jpolyzogopoulos@blaney.com. With over 80 litigators, Blaneys has the expertise and bench strength to take on any kind of litigation matter. We provide quality depth that is on par with the national firms, personal service to rival litigation boutiques, all while having a cost structure that allows us to be very competitive with our rates. Here is a sampling of what we do: • Counsel and Appellate work • Commercial Litigation (including corporate litigation, injunctions, insolvency and banking) • Construction • Labour and Employment • Family • Intellectual Property Litigation • Class Actions • Administrative Law • Aboriginal • Insurance Law, including: • Insurance Coverage Advice • Product Liability • Professional Liability • MVA/Personal Injury/Medical Malpractice • Government Liability 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.

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

Good afternoon,

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

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

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

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

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

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

Have a great weekend.

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

Table of Contents:

Civil Decisions

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

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

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

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

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

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

Halliwell v. Halliwell, 2017 ONCA 506

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

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

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

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

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

Mroue v. Mroue, 2017 ONCA 517

Keywords: International Arbitration, Sharia Law, Costs

Childs v. Childs, 2017 ONCA 516

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

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

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

Salewski v. Lalonde, 2017 ONCA 515

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

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

Keywords: Contracts, Tendering, Termination, Good Faith

Speck v. Ontario, 2017 ONCA 521

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

Lesenko v. Guerette, 2017 ONCA 522

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

Mayers v. Khan, 2017 ONCA 524

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

For Civil Endorsements, click here.

For Criminal Decisions, click here.

Civil Decisions:

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

[Sharpe, Lauwers and Miller JJ.A.]

Counsel:

S. Dewart and T. Gleason, for the appellant

J. Morton and M. Iezzi, for the respondent

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

Facts:

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

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

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

Issues:

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

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

Holding:

Appeal allowed.

Reasoning:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Feldman, Epstein and Miller JJ.A.]

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

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

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

Facts:

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

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

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

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

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

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

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

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

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

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

Issue:

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

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

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

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

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

Result: Appeal allowed, in part.

Reasoning:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Rouleau, Hourigan and Benotto JJ.A.]

Counsel:

V.D., acting in person

P.V., acting in person

L . Hayes, for the responding party

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

Facts:

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

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

Issues:

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

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

Holding: Appeal dismissed.

Reasoning:

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

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

Halliwell v. Halliwell, 2017 ONCA 506

[Gillese, Pepall and Roberts JJ.A.]

Counsel:

D. Ditchfield, for the appellant

R. Bickle, for the respondent

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

Facts:

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

Issues:

(1) Should the trial costs be altered?

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

Holding: Costs awarded to appellant.

Reasoning:

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

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

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

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

J. Macfarlane and C. Peddle, for the appellant

P. Mahoney, for the respondents

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

Facts:

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

Issues:

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

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

Holding: Appeal dismissed.

Reasoning:

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

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

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

[Blair, MacFarland and Hourigan JJ.A.]

Counsel:

J.C. Morton, for the appellant

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

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

Facts:

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

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

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

Issues:

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

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

Holding: Appeal dismissed.

Reasoning:

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

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

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

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

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

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

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

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

Mroue v. Mroue, 2017 ONCA 517

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

E.G. Tannis, for the appellants

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

Keywords: International Arbitration, Sharia Law

Facts:

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

Issues:

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

Holding: Appeal dismissed.

Reasoning:

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

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

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

Childs v. Childs, 2017 ONCA 516

[Gillese, Huscroft and Trotter JJ.A.]

Counsel:

Peter Childs and Caroline Childs, in person

Michael Childs and Andrew Childs, in person

A.V. Mayeski, for BMO Trust Company

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

R. Coutinho, for the Public Guardian and Trustee

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

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

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

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

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

Issues:

Review Motion

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

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

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

C62716 Appeal

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

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

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

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

C61581 Appeal

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

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

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

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

Holding: Review Motion and Appeals dismissed.

Reasoning:

Review Motion

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

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

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

C62716 Appeal

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

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

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

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

C61581 Appeal

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

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

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

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

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

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

W. MacDougall and R. Joffe, for the appellants

A. D’Ascanio, for the respondent

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

Facts:

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

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

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

Issues:

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

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

Holding: Appeal allowed.

Reasoning:

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

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

Salewski v. Lalonde, 2017 ONCA 515

[Simmons, Rouleau and Roberts JJ.A.]

Counsel:

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

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

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

Facts:

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

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

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

The Motion to Strike

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

The Appeal

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

The appellants’ position on jurisdiction

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

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

The respondent’s position on jurisdiction

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

Issues:

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

Holding: Appeal quashed.

Reasoning:

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

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

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

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

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

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

Accordingly, the appeal was quashed.

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

[Simmons, Rouleau and Roberts JJ.A.]

Counsel:

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

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

Keywords: Contracts, Tendering, Termination, Good Faith

Facts:

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

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

Issues:

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

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

Holding: Appeal dismissed.

Reasoning:

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

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

Speck v. Ontario, 2017 ONCA 521

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

Counsel:

T. Speck, in person

D. Mayer, for the respondents

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

Facts:

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

Issues:

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

Holding: Appeal dismissed.

Reasoning:

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

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

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

Lesenko v. Guerette, 2017 ONCA 522

[Rouleau, Trotter and Paciocco JJ.A.]

Counsel:

K.A. MacLean, for the appellants

S. Johal, for the respondent

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

Facts:

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

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

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

Issues:

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

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

Holding: Appeal allowed.

Reasoning:

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

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

Mayers v. Khan, 2017 ONCA 524

[Epstein, Hourigan and Paciocco JJ.A.]

Counsel:

B. Fromstein and A. Longo, for the appellant

G. McKee and D. Styler, for the respondents

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

Facts:

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

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

Issues:

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

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

Holding: Appeal dismissed.

Reasoning:

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

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

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

Civil Endorsements:

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

[Blair, MacFarland and Hourigan JJ.A.]

Counsel:

J.C. Morton, for the appellant

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

Keywords: Costs

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

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

Counsel:

G. Deokaran, for the appellants

T. Arndt, for the respondents

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

Criminal Decisions:

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

[Laskin, Simmons and Pardu JJ.A.]

Counsel:

P. Norton, for the appellant

K. Rawluk, for the respondent

Keywords: Criminal Law, Vetrovec Warning, Inconsistent Evidence

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

[Feldman, MacPherson and Benotto JJ.A.]

Counsel:

K.D.M., appearing in person

I. Grant, duty counsel

A. Wheeler, for the respondent

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

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

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

Counsel:

C. Li, in person

S. Latimer, for the respondent

P. Rochman, amicus curiae

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

R v. Charron, 2017 ONCA 513

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

A. Moustacalis, for the Appellant

Scott Latimer, for the Respondent

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

R. v. Romain, 2017 ONCA 519

[Doherty, LaForme and Trotter JJ.A.]

Counsel:

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

N. Xynnis, for the appellant Spruyt

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

J. Flenning, for the appellant Jack

J. Corelli and J. Neander, for the respondent

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

R. v Codina, 2017 ONCA 527

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

Counsel:

A. Ostroff, for the appellant

X. Proestos, for the respondent

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

R v. Innocent, 2017 ONCA 529

[Tulloch, Lauwers and Brown JJ.A.]

Counsel:

Angelina Marie Codina, in person

J.A. Morische, for the respondent

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

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

ONTARIO COURT OF APPEAL SUMMARIES (JUNE 12 – 16, 2017)

Good afternoon,

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

In Hodge v. Neinstein, the Court upheld the Divisional Court’s certification of a class proceeding against Neinstein & Associates LLP, in which the plaintiffs claim that the firm’s accounts contravened the Solicitors Act.

In Bruff-Murphy v. Gunawardena, the Court of Appeal reviewed the law relating to the admissibility of expert opinion evidence and ordered a new trial after determining that certain expert evidence should not have been admitted.
Other topics covered included municipal law, construction contracts and arbitration agreements.

Have a great weekend.

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

Lea Nebel
Blaney McMurtry LLP
lnebel@blaney.com
Tel: 416-593-3914
http://www.blaney.com/lawyers/lea-nebel
Table of Contents:

Civil Decisions

Allto Construction Services Ltd v. Toronto and Region Conservation Authority, 2017 ONCA 488

Keywords: Contracts, Liquidated Claims, Construction Law, Evidence, Burden of Proof, Oral Testimony

1220510 Ontario Inc. v. Radium-O Developments. Ltd., 2017 ONCA 490

Keywords: Contracts, Settlements, Enforceability, Interest Act, R.S.C. 1985, c I-15 s 8

232169 Ontario Inc. (Farouz Sheesha Café) v. Toronto (City), 2017 ONCA 484

Keywords: Municipal Law. Bylaws, Jurisdiction, Judicial Review, City of Toronto Act, 2006, SO 2006 c 11, Occupational Health and Safety Act, RSO 1990, c O1

6524443 Canada Inc. v. Toronto (City), 2017 ONCA 486

Keywords: Contracts, Real Property, Leases, Arbitration Agreements, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Bajouco v. Green, 2017 ONCA 493
Keywords: Torts, Negligence, Fresh Evidence, R. v. Palmer, [1980] 1 S.C.R. 759, Leave to Appeal, Sault Dock Co. Ltd. v. Sault Ste. Marie (City), [1973] 2 O.R. 479 (CA)

Hodge v. Neinstein, 2017 ONCA 494
Keywords: Solicitor and Client, Contingency Fee Agreements, Solicitors Act, Class Actions, Class Proceedings Act, Certification, Common Issues, Preferable Procedure, Pleadings, Amendments

Bruff-Murphy v. Gunawardena, 2017 ONCA 502
Keywords: Torts, Negligence, MVA, Damages, Evidence, Experts, Admissibility, The Rule in Browne v. Dunn (1893), 6 R. 67 (H.L.), R. v. Mohan, [1994] 2 S.C.R. 9, White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182

For Civil Endorsements, click here.

For Criminal Decisions, click here.

Civil Decisions:

Allto Construction Services Ltd v. Toronto and Region Conservation Authority, 2017 ONCA 488

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

Counsel:

D. LaFramboise, for the appellant

L. Wang, for the respondent

Keywords: Contracts, Liquidated Claims, Construction Law, Evidence, Burden of Proof, Oral Testimony

Facts:

The appellant Allto Construction Service Ltd. (“Allto”) sued the respondent Aplus General Contractor Inc. (Aplus) for $163,202.98, the amount alleged to be owing under a subcontract to install a sewage system during the construction of a pool for the Heart Lake Conservation Area for the Toronto and Region Conservation Authority (the “Owner”). The respondent denied owing the amount claimed, pleaded that during its work Allto damaged an on-site irrigation system for which Aplus incurred repair expenses of $33,611.85, and asserted that Allto had overbilled Aplus $5,135.85 for additional risers which were included within its original scope of work. Aplus asserted a set-off and counterclaim in the amount of $38,747. The trial judge dismissed both the claim and the counterclaim. He stated there was no evidence at trial of invoices for the work performed by Allto and thus Allto had failed to meet its burden to satisfy the court it was owed the amount claimed.

Issues:

Did the trial judge err in dismissing the claim?

Holding: Appeal allowed.

Reasoning:

Yes. The court found the trial judge had erred in principle when he concluded that the appellant had not proved it was owed the amount it claimed. The appellant’s witness had identified the purchase order issued by Aplus and had testified the work had been performed. The respondent’s witness did not contradict that evidence and confirmed the work had been performed without deficiencies. While Aplus denied the amount owing, it admitted the contract and Allto’s performance of the work. A witness had provided oral evidence that the amount claimed had not been paid. The court held this was sufficient to establish Allto’s outstanding claim. There was no requirement for any further proof through invoices.

The only material point of dispute was with respect to whether a sprinkler head in the irrigation system had been damaged, and the cost of its repair. The court held the respondent’s claim for set-off was not made out on the trial record, because Aplus’s documentation was suspect and the amount for the repair of a sprinkler head unreasonable. Moreover, the trial judge was entitled to interpret the admissions as he did – as admitting an entitlement to a back-charge but not a right to the amount the respondent claimed. The court held there was no basis for a set-off to the amount claimed by the appellant.

1220510 Ontario Inc. v. Radium-O Developments. Ltd., 2017 ONCA 490

[MacPherson, Blair and Roberts JJ.A.]

Counsel:

G. Gryguc, for the appellant

L. Mongillo and S. Chahal, for the respondent

Keywords: Contracts, Settlements, Enforceability, Interest Act, R.S.C. 1985, c I-15 s 8

Facts:

The respondent 1220510 Ontario Inc. lent $6,000,000 to the appellant Radium-O Developments Ltd. by way of a vendor take-back mortgage. The mortgage matured with the appellant not having paid the principal owing and was in default as of that date. The respondent started an application for the appointment of a receiver.

After some negotiations, the respondent made a settlement offer for a total amount of $6,162,950.45. This amount included principal, interest, three months’ interest compensation, receivership and legal fees, other fees and taxes. The payment had to be made in full by July 8, 2016. The offer contained a condition that the payment would be rejected and returned if there were any reservations, conditions, qualifications, or protests attached.

The appellant paid the full amount and asked for a discharge. The respondent discharged the mortgage. Later, the appellant disputed the amount charged, specifically the legal fees and discharge costs, before delivering a costs assessment notice and commenced a counter-application seeking to be relieved from paying the three months’ interest compensation and receivership costs.

The respondent moved to enforce the settlement and had its motion granted. The motion judge stated that the appellant could not keep the benefit of the discharge and protest after the fact how much was paid.

Issues:

(1) Did the motion judge err in enforcing the settlement?

(2) Did the motion judge err in approving the costs and fees relating to the respondent’s steps in pursuit of the appointment of a receiver because they were in the nature of a penalty and therefore violated s 8 of the Interest Act?

Holding: Appeal dismissed.

Reasoning:

(1) No. The settlement was a contract with an offer and explicit acceptance. The appellant received the consideration it bargained for – a discharge of the mortgage.

(2) No. The steps taken to appoint a receiver were entirely reasonable in light of the appellant’s default. Further, the three months’ interest compensation did not violate s 8 of the Interest Act, (see Mastercraft Properties Ltd. v. EL EF Investments Inc. (1993), 14 OR (3d) 519 (CA) and Irwin Mintz, In Trust v. Mademont Yonge Inc. and Paul Montgomery, 2010 ONSC 116).

232169 Ontario Inc. (Farouz Sheesha Café) v. Toronto (City), 2017 ONCA 484

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

Counsel:

R.P. Zigler, for the appellants

K. Franz and L. Mendelson, for the respondents

Keywords: Municipal Law. Bylaws, Jurisdiction, Judicial Review, City of Toronto Act, 2006, SO 2006 c 11, Occupational Health and Safety Act, RSO 1990, c O1

Facts:

The appellants operate hookah lounges in Toronto. Hookah lounges offer beverages and food for sale, but are known primarily as places to socialize or relax, and smoke hookahs, a form of water pipe. In 2015, the City of Toronto passed By-Law 1331-2015, which prohibits the use of hookah devices in connection with premises, vehicles, or things required to be licensed by the City for various purposes. The appellants brought an application challenging the validity of the bylaw. The application judge held that the City had the authority to pass the bylaw and that the by-law was valid.

Issues:

(1) Did the application judge err in determining that the purpose of the by-law was the protection of health?

(2) Does the by-law infringe on the appellants’ property and civil rights to an extent not permitted by the City of Toronto Act or the common law?

(3) Did the application judge err in concluding that the by-law does not conflict with or frustrate the purpose of the Occupational Health and Safety Act?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court rejected the appellants’ contention that the primary effect of the law will be the closing of hookah lounges, which overwhelms the City`s health and safety motive when characterizing the purpose of the by-law. The court found the appellants are licensed by the City to sell food and may continue to do so. They also can continue to sell shisha. What they cannot do is to permit the smoking of hookah pipes on their premises. Although many hookah lounges will suffer economic harm as a result of the by-law, this effect is incidental. The court held there was ample support in the record of the application judge’s conclusion that the purpose of the by-law was the protection of public health and safety, which is specifically authorized by s 8(2) of the City of Toronto Act.

(2) No. The court rejected the appellants’ description of the legislation as “targeting and destroying their business property without compensation”. The court found the City of Toronto Act establishes broad by-law making authority which is not to be given the narrow construction advocated by the appellants. The by-law regulates business establishments licensed by the city and falls within the city’s by-law making authority.

(3) No. The court found there was no merit to the appellants’ submission that the by-law conflicts with or frustrates the purpose of the Occupational Health and Safety Act. The by-law was enacted to protect the health and safety of patrons as well as employees of businesses.

Finally, the court held it is not the court’s role to second-guess policy decisions made by elected municipal officials. The City of Toronto Act immunizes by-laws against judicial review for reasonableness and the application judge was limited to determining the legal validity of the city’s by-law. He made no errors in upholding the bylaw.

6524443 Canada Inc. v. Toronto (City), 2017 ONCA 486

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

Counsel:

R.G. Slaught and S. Rollwagen, for the appellant

C.B. Kuehl and C.T. Shorey, for the respondent

Keywords: Contracts, Real Property, Leases, Arbitration Agreements, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Facts: 6524443 Canada Inc. (“Brookfield”) and the City of Toronto (“Toronto”) are parties to a 99-year ground lease. The lease provided for the annual rent for the first period of 40 years. The rent for the second period was to be agreed between the parties, failing which either party could submit the issue to arbitration. Toronto provided notice of arbitration to Brookfield in 2011. The parties entered into an Arbitration Agreement in 2013. The arbitration Award was rendered in 2015. Brookfield filed a notice of appeal in the Superior Court which was denied, leading to this appeal.

Issues:

(1) Did the motion judge err in refusing to consider the affidavit evidence?

(2) Did the motion judge err in concluding that the only right of appeal from the Award is on a question of law, with leave?

Holding: Appeal dismissed.

Reasoning:

Regarding the standard of review where the interpretation of the Arbitration Agreement involves questions of mixed fact and law, the motion judge’s interpretation is reviewable on a standard of reasonableness.

(1) No. The affidavit evidence described the chronology and manner in which the Arbitration Agreement was prepared, and the parties’ competing views as to what was intended in relation to appeal rights. The motion judge correctly observed that evidence with respect to the factual matrix includes objective evidence of the background facts known to the parties at the time of execution of the contract, but does not include evidence of negotiations and of a party’s subjective intentions. To be sure, the affidavit did not offer evidence of the parties’ mutual objectives.

(2) No. First, the motion judge reasonably concluded that the Arbitration Agreement was intended to be a stand-alone agreement governing the arbitration and any rights of appeal from the Award. There was no need to refer back to the lease to interpret any of the terms of the Arbitration Agreement.

Second, both the lease and the Arbitration Agreement provide for the parties’ appeal rights to be governed by the Arbitration Act, 1991. If the parties intended to have broader rights of appeal, they would have so provided explicitly in the Arbitration Agreement.

Bajouco v. Green, 2017 ONCA 493

[Strathy CJO, Brown and Huscroft JJ.A.]

Counsel:
F Bajouco, in person

G Pakozdi, for the respondent

Keywords: Torts, Negligence, Fresh Evidence, R. v. Palmer, [1980] 1 S.C.R. 759, Leave to Appeal, Sault Dock Co. Ltd. v. Sault Ste. Marie (City), [1973] 2 OR 479 (CA)

Facts:

The appellant and respondent are neighbours. The respondent alleged that the appellant was responsible for damages with regards to the flooding of her basement bathroom. The trial judge found in favour of the respondent and awarded her damages of $8,800.77 plus costs and disbursements of $1,515.12. On appeal to the Divisional Court, the judge dismissed her appeal and ordered costs against her in the amount of $3,000. The appellant then sought leave to appeal to the Ontario Court of Appeal and was denied.

The appellant now seeks reconsideration of the Ontario Court of Appeal’s decision denying leave to appeal based on the addition of new evidence. The new evidence suggests that the flooding of the respondent’s bathroom was the fault of back-up water from a sewer, and not from anything to do with the appellant. In addition, the appellant seeks to bring forth documents that suggest the respondent fabricated documents and invoices from contractors.

Issues:

(1) Should the appellant be permitted to introduce new evidence?

(2) Did the Ontario Court of Appeal err in denying the appellant leave to appeal?

Holding: Appeal dismissed.

Reasoning:

(1) The appellant is not permitted to introduce new evidence

The appellant has failed to satisfy the test governing the admissibility of fresh evidence as outlined by the Supreme Court in R. v. Palmer, [1980] 1 S.C.R. 759, at p. 775. The test requires the satisfaction of the following four criteria: (i) the evidence could not have been adduced at trial; (ii) the evidence must be relevant in that it bears on a decisive or potentially decisive issue; (iii) the evidence must be reasonably capable of belief; and (iv) the evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.

Most of the fresh evidence that the appellant seeks to introduce has already been dealt with at trial. The possibility of the sewers causing the flooding was rejected by the trial judge. In addition, the appellant had an opportunity to challenge the accuracy of letters and documents and did not. The evidence she seeks to introduce today simply reiterates the allegations but presents nothing new to the argument.

(2) The Ontario Court of Appeal did not err in denying leave to appeal

The test for granting leave to appeal from a final decision of the Divisional Court is laid out in Sault Dock Co. Ltd. v. Sault Ste. Marie (City), [1973] 2 OR 479 (CA). Leave may be granted in cases that present an arguable question of law or mixed fact and law on the interpretation of legislation; the interpretation, clarification or propounding of a general rule or principle of law; the interpretation of a municipal by-law where the point in issue is a question of public importance; or the interpretation of an agreement where the point in issue involves a question of public importance: Sault Dock, at p. 481.

The appellant has failed to pass the test for granting leave to appeal because her appeal is largely fact-based and seeks mostly to impugn the trial judge’s assessment of the evidence.

Hodge v. Neinstein, 2017 ONCA 494

[Hoy, ACJO, Gillese and Brown JJ.A.]

Counsel:

C. Paliare, O. Soriano and D. Cooney, for the appellant

P. Waldmann and A. Stein, for the respondents

P. Pape, S. Chaudhury and A. Bolieiro for the intervener, the Ontario Trial Lawyer’s Association

Keywords: Solicitor and Client, Contingency Fee Agreements, Solicitors Act, Class Actions, Class Proceedings Act, Certification, Common Issues, Preferable Procedure, Pleadings, Amendments

Facts:

The respondent Hodge was injured in a motor vehicle accident in 2002. She retained the appellants, Gary Neinstein and Neinstein & Associates LLP (“Firm”) and signed a contingency fee arrangement (“CFA”) with the Firm. It provided that the Firm’s legal fees would be equal to 25 per cent of the damages recovered on her behalf, plus partial indemnity costs (which would be no more than 40 per cent of the total recovery), plus disbursements.

Hodge signed a settlement, and the Firm, in calculating their legal fees, included the costs obtained as part of the settlement. She argued that this was a violation of s 28.1(8) of the Solicitors Act, RSO 1990, c S 15 (the “Act”), which sets out the circumstances in which a lawyer is permitted to enter into a CFA. She also alleged that the Firm charged interest on unpaid disbursements in violation of s 33(1) of the Act, which provides that a solicitor may only charge interest on the date one month after the bill is delivered.

Hodge brought a motion to certify a class proceeding against the Firm on behalf of all its contingency fee clients since October 2004. In her Amended Notice of Application, she was seeking, among other relief, a declaration that the Firm was in violation of the Act and had both breached its fiduciary duty to and breached its contracts with the class members, and an order that the Firm repay any amounts taken for costs in addition to a percentage of damages. She also alleged that the Firm charged disbursements that were excessive or improper.

The certification judge concluded that Ms. Hodge failed to satisfy the five-part test for certification under s 5(1) of the Class Proceedings Act1992, SO 1992, c 6 (the “CPA”).  He found a free-standing, strict liability civil wrong for breach of ss. 28.1(8) and 28.1(9) of the Act, and he was satisfied that the Amended Notice of Application disclosed a cause of action under s. 23 and 25 of the Act, and for breach of fiduciary duty and breach of contract. He also concluded that there was an identifiable class, but stated that claims or defences of the class members did not raise common issues and even if they did, a class action was not the preferable procedure because it would inevitably lead to individual assessments of each class member’s claim, which could not be done at a common issues trial. The judge noted even if a breach of s. 28.1 could be said to be a free-standing strict liability civil wrong that would not overcome the common issues problem. However, the judge also found that solicitor-client privilege would not be an insurmountable obstacle if the proceeding was otherwise certifiable, citing at least one procedure which he believed could be undertaken to get around it.

On appeal, the Divisional Court allowed Hodge’s appeal, agreeing that there was a cause of action and that there was an identifiable class. However, the Divisional Court also found that the common issues requirement was satisfied, and that a class proceeding would be a preferable because judicial economy favoured a class proceeding, taking into account the access to justice barriers present for the class members to have their case heard. The Divisional Court also denied Hodge’s motion to amend her Amended Notice of Application to plead the tort of conversion, concluding that it added nothing of substance to the proceeding as currently drafted, meaning it was unnecessary to consider it. Additionally, the Divisional Court also agreed with the certification judge in finding that solicitor-client privilege would not be an insurmountable obstacle to certifying the proceeding. The Divisional Court certified the matter as a class proceeding.

On appeal to the Court of Appeal, the Firm argued that the application brought by Hodge should not have been certified as it failed to disclose a cause of action, fundamentally lacked in commonality and failed the preferable procedure requirement. In particular, the Firm argued that ss. 23-25 of the CPA precluded the possibility of a class proceeding against the Firm because they form a “complete code” and required individual assessments of client accounts.  The Firm reiterated its solicitor-client privilege argument as a reason why the matter should not be certified as a class proceeding.

Hodge cross-appealed, arguing that the Divisional Court erred by denying her leave to amend her Amended Notice of Application to plead the tort of conversion and failing to certify further common issues.

Issues:

(1) Issue on appeal: Did the Divisional Court err in certifying the class proceeding?

(a) Did Hodge’s claim under s 28(1) of the Act disclose a cause of action satisfying s 5.1(a) of the CPA?

(b) Were there common issues in the action?

(c) Is the class proceeding a preferable procedure?

(2) Issue on cross-appeal: Did the Divisional Court err in:

(a) Denying Hodge leaving to amend her Amended Notice of Application to plead the tort of conversion; and

(b) Failing to certify further common issues?

Holding: Appeal dismissed, and cross-appeal allowed in part.

Reasoning:

(1) No. The Court of Appeal found that the Divisional Court was correct in finding a cause of action, that the common issues requirement was satisfied on the basis of 18 common issues in the class, and that the class proceeding was the preferable procedure.

(a) Yes. The Court stated that the Divisional Court correctly concluded that it was not plain and obvious that a cause of action relying on s 28.1 could not succeed, stating that it was not plain and obvious that an application under ss. 23-25 of the Act is not available to review the CFAs at issue in this application.

The Court reviewed the test under s 5(1)(a) of the CPA – finding that it was the same as the test on a motion to strike for no reasonable cause of action per Pro-Sys Consulting Ltd. v. Microsoft Corp., 2013 SCC 57, [2013] 3 S.C.R. 477, at para. 63. The test is whether, assuming the facts pleaded to be true, it is plain and obvious that the claim has no reasonable prospect of success per R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 17. Furthermore, whether the cause of action requirement is met is reviewable on a correctness standard of review per Attis v. Canada (Minister of Health), 2008 ONCA 660, 93 OR (3d) 35, at para. 23.

The Court then applied the test to find that it was not plain and obvious that a cause of action relying section 28.1 of the Act had no reasonable prospect of success. In doing so, the Court distinguished Seneca College v. Bhadauria, [1981] 2 S.C.R. 181; Frame v. Smith, [1987] 2 S.C.R. 99; Canadian Alliance of Pipeline Landowners’ Assn. v. Enbridge Pipelines Inc., 2008 ONCA 227, 237 O.A.C. 200, which cites Canada v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205.

In Seneca College, the Supreme Court considered Ontario’s Human Rights Code, RSO 1970, c 318, and concluded that it foreclosed any civil action based directly upon a breach of its terms or the invocation of any public policy expressed in the Code. In Frame, the Supreme Court similarly concluded that permitting a father to sue the mother and her present husband for frustrating court-ordered access, either by creating a tort or recognizing a fiduciary duty arising out of a court order, “may well do violence to the comprehensive statutory scheme [of the Children’s Law Reform Act] provided by the Legislature” at p. 114.

The Court found that Seneca CollegeFrame and Canadian Alliance were arguably distinguishable for two reasons. The first was that section 28.1 is unique in one important respect: section 28.1(9) specifically provides that a CFA that is subject to approval under subsection (8) is not enforceable unless it is so approved. Section 28.1(9) provides a consequence for the statutory breach. Much of the relief Ms. Hodge seeks flows from that provision – the statutorily-prescribed consequence of the breach – and not the breach itself.

The Court said that the claimants in Seneca CollegeFrame and Canadian Alliance did not seek relief based on a statutorily-provided consequence of a breach of statute. Secondly, the declaration that Hodge was seeking was in respect of rights under an agreement, making it arguably different from an action based on breach of a statutory term, as in Seneca College. The Court acknowledged that the Act does not expressly provide that a client may pursue civil remedies where a CFA that is subject to approval under subsection (8) is “not enforceable unless it is so approved”, but said that it was arguable whether express language was necessarily required despite comments in Canadian Alliance that might be read as suggesting otherwise.

Finally, the Court stated that it was at least arguable that an assessment under s 24 of the Act was not the only remedy available where a CFA was unenforceable pursuant to s. 28.1(9) of the Act, and that it was also argued that the Court of Appeal’s inherent jurisdiction in matters relating to the regulation of lawyer’s accounts suggests that ss. 23-25 of the Act may not constitute a complete code.

The Court accepted that Hodge had adequately pleaded a cause of action for a breach of fiduciary duty. The Court also found that the Divisional Court had erred in finding that Hodge had met the test for show a cause of action in breach of contract because her pleading was deficient, but granted her leave to amend her notice of application. The Court also said that while the Firm had a strong argument that a contract claim would be caught by ss. 23-25 of the Act, the argument was not so strong as to be plain and obvious.

(b) Yes. The Court found that there was no basis to interfere with 18 of the 19 common issues found by the Divisional Court, taking exception only with the third common issue. The Court reviewed the test for s 5(c) of the CPA, citing the Supreme Court of Canada in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534 and in Pro Sys, finding that the underlying commonality question is whether allowing a proceeding to continue as a class proceeding will avoid duplication of fact-finding or legal analysis. The Supreme Court in Pro-Sys listed the balance of the instructions found at paragraphs 39-40 of Dutton as to how to approach the common issues inquiry:

(1) The commonality question should be approached purposively.

(2) An issue will be “common” only where its resolution is necessary to the resolution of each class member’s claim.

(3) It is not essential that the class members are identically situated vis-à-vis the opposing party.

(4) It not necessary that common issues predominate over non-common issues. However, the class members’ claims must share a substantial common ingredient to justify a class action. The court will examine the significance of the common issues in relation to individual issues.

(5) Success for one class member must mean success for all. All members of the class must benefit from the successful prosecution of the action, although not necessarily to the same extent.

The Court stated that at the certification stage, the factual evidence goes only to establishing whether the questions are common to all the class members and that while there must be “some basis in fact” that the issues are common, the test “does not require that the court resolve conflicting facts and evidence at the certification stage”, which the court is ill equipped to do at that stage.  Even a significant level of difference among the class members does not preclude a finding of commonality. If material differences do emerge, the court can deal with them at that time.

The Court agreed with Firm that common issue 3, was not a proper common issue, in finding that, whether the Firm actually took amounts arising from costs in an award or settlement contrary to the Act should be characterized as an individual issue. However, the Court stated that did not affect its conclusion that the Divisional Court was correct in certifying this proceeding because the remaining common issues would be sufficient to meet the certification criteria.

(c) Yes. The Court of Appeal found that the Divisional Court was correct in certifying the class proceeding on the basis that it was a preferable procedure. First, the Court went over the test, stating that in the context of the preferability requirement, the representative plaintiff must show some basis in fact (1) that a class proceeding would be a fair, efficient and manageable method of advancing the claim, and (2) that it would be preferable to any other reasonably available means of resolving the class members’ claims per AIC v. Fischer, 2013 SCC 69, [2013] 3 S.C.R. 949, at para. 48.  They noted that the preferability requirement is to be conducted through the lens of the three principal goals of class actions, namely judicial economy, behavior modification, and access to justice, citing AIC, at para. 22 and Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158, at para. 27, for this proposition. Finally, the Court stated that a certification judge’s preferability analysis is entitled to considerable deference on appeal. A reviewing court should intervene only where the certification judge has made a palpable and overriding error of fact or otherwise erred in principle per Pearson v. Inco Ltd. (2005), 205 O.A.C. 30 (CA), at para. 43.

In applying this analysis, the Court stated that the issue raised respecting solicitor-client privilege was not a basis for refusing certification. After reviewing the law on solicitor-client privilege set out by the Supreme Court of Canada in Blank v. Canada (Minister of Justice), 2006 SCC 39, [2006] 2 S.C.R. 319, and Minister of National Revenue v. Thompson, 2016 SCC 21, [2016] 1 S.C.R. 381, said the Court stated that it was not a reversible error for the Divisional Court to identify one way in which solicitor-client privilege could be avoided as a problem and leave it to the case management judge to work out the particulars. The Court of Appeal stated that this should not be a bar because the court retains the power under  10(1) of the CPA to decertify the class proceeding if it appears to the court that the certification criteria are no longer satisfied.

The Court of Appeal also dismissed the Firm’s other arguments, finding that the Divisional Court made no error in finding that individual assessments were beyond the reach of the class with a class proceeding being the only realistic opportunity for their claims to be advanced, the Court found that there was no error in behaviour modification towards the Firm and the Bar at large helping to make the proceeding preferable, and that the individual limitation issues in each of the claims would present an obstacle.

(2)

(a) No. It was open for the Divisional Court to decline to consider the proposed amendment to add a cause of action. However, if it declined to consider the proposed amendment on its merits, it should have made clear that its decision that doing so did not bar Ms. Hodge from bringing her motion to amend before the case management judge. The Court stated that the Divisional Court erred in principle by dismissing the motion without focusing on whether the Firm was afforded procedural fairness and whether the proposed amendment would cause prejudice to the Firm.

(b) Yes. The Divisional Court should have certified two additional common issues.

The first was whether the conduct of the Firm – in allegedly failing to disclose information required by the Act and the Regulation in its CFAs and taking as part of their fees amounts arising from awards or settlements for costs – breached fiduciary duties to class members. The Court said that there was some basis in fact for asking whether the taking of costs contrary to the Act constituted a breach of fiduciary duty by the Firm, such that this is a proper common issue. The Court also noted that the record on appeal was replete with examples of final accounts showing party-and-party costs payable to the Firm, in addition to a percentage of the award or settlement, and the only evidence of the Firm not taking such costs was that of someone who it appears will opt out of the class proceeding. However, the Court stated that the issue of whether the Firm actually took to the amounts was an individual issue.
The second was whether there was entitlement to punitive damages. The Court said that entitlement to punitive damages could be certified as a common issue in a proper case, and that whether a defendant has breached a fiduciary duty engages the same kind of fact-finding that will be necessary to determine whether punitive damages are justified per the Supreme Court of Canada’s decision in Rumley v. British Columbia, 2001 SCC 69, [2001] 3 S.C.R. 184, at para. 34. The Court said that if it were found that the Firm breached its fiduciary duty to its clients, and disgorgement – in whole or in part – was ordered, it would be open to the trial judge to consider whether he or she was in a position to determine entitlement to and the quantum of punitive damages, consistent with the principles in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595. If the Firm successfully advanced a quantum meruit claim, the trial judge could determine punitive damages only after individual quantum meruit assessments.

Bruff-Murphy v. Gunawardena, 2017 ONCA 502

[Lauwers, Hourigan and BenottoJJ.A.]

Counsel:

G.D.E. Adair, for the appellants

D.I. Reisler and J.L. Kuredjian, for the respondent

Keywords: Torts, Negligence, MVA, Damages, Evidence, Experts, Admissibility,  The Rule in Browne v. Dunn (1893), 6 R. 67 (H.L.), R. v. Mohan, [1994] 2 S.C.R. 9, White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182

Facts:

The appellant was hit by the respondent while stopped in her motor vehicle. She alleged that she suffered multiple injuries, both physical and psychological. She sued the respondent, who admitted liability. The sole issue in the jury trial was what damages, if any, she suffered. The plaintiff called a number of physicians who had either treated or examined her. The consensus among them was that she suffered in the manner complained of, and that the cause of her suffering was the motor vehicle accident. The defence called two witnesses, one of whom was the expert witness whose testimony was ultimately at issue on this appeal.

The appellant objected to the admission of that expert’s testimony on two grounds. First, because his report was an attack on the appellant’s credibility. Second, he was biased. On the first ground, the appellant submitted that the expert report’s repeated references to inconsistencies in the medical assessment of the plaintiff violated the rule in Browne v. Dunn, given that the plaintiff had no opportunity to explain these inconsistencies.

On this second ground, the appellant submitted that she should be permitted to cross-examine the expert witness on findings made in another court case and two arbitrations that he was not an independent witness. The trial judge ruled against the appellant on both these grounds.

The trial judge then ruled that the expert witness could not testify on certain sections of his report. The relevant sections were primarily where the expert witness was critical of the reliability of the conclusions reached by other doctors examining the appellant. The trial judge also made clear that the expert witness should not testify about the appellant’s credibility.

However, the expert witness effectively did exactly that in his testimony, testifying that in his opinion, she did not actually develop any of the health problems she claimed.

After closing submissions, the trial judge gave his charge to the jury. No special instruction regarding the expert witness’s testimony was requested, nor did the trial judge instruct the jury regarding the duty of expert witnesses. The trial judge also did not raise any concerns with respect to the substance of the expert witness’ testimony or his independence.

The jury returned with a verdict assessing general damages at $23,500 and rejecting all other heads of damages, including special damages, future care costs and past and future income loss.

Issues:

(1) Did the trial judge err in not permitting the appellant to cross-examine the respondent’s expert witness on prior court and arbitral findings made against him?

(2) Did the trial judge err in qualifying the respondent’s expert witness as an expert and/or in not intervening or taking steps to exclude his testimony?

(3) Did the respondent violate the rule in Browne v. Dunn?

Holding: Appeal allowed.

Reasoning:

(1) No. In the present case, the prior comments would have been of no assistance to the jury without an understanding of their factual foundation. That necessary context would only have served to divert the jury from the task at hand and convert the trial into an inquiry regarding the reliability of the expert witness’s testimony in the three other proceedings. Thus, the Court held that the trial judge did not err in prohibiting this line of cross-examination.

(2) Yes. The trial judge was entitled to deference on the first part of the test for admissibility of expert evidence, articulated in R. v. Mohan, which established a low bar for threshold admissibility. While the trial judge’s ruling on this point may have been highly debatable, he was within his authority to decide as he did.

On the second part of the test for admissibility, however, the trial judge failed to properly fulfil his gatekeeper function and engage in a cost-benefit analysis of the expert witness’s testimony that weighed its probative value against its prejudicial effect. From a review of the record, the Court of Appeal found that it was abundantly clear that the prejudicial effect of the expert witness’s testimony far outweighed any probative value. The risk was palpable that the expert witness would fail to remain impartial and would instead act as an advocate for the defence.

(3) In light of the answer to Issue (2), the court deemed an answer to Issue (3) unnecessary.

In the result, the appeal was allowed and a new trial ordered.

Civil Endorsements

Biosweep Canada Corporation v. 2314515 Ontario Inc., 2017 ONCA 508

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

B.N. Radnoff, for the appellant

No one appearing for the respondent

Keywords: Torts, Conversion, Detinue, Passing Off, Unjust Enrichment, Unlawful Interference with Economic Interests, Damages

Paccar Leasing Company Limited v. Sevco Corporation (Appeal Book Endorsement), 2017 ONCA 503

[Simmons, Lauwers and Hourigan JJ.A.]

Counsel:

G. Bogue, for the appellants

S. Lee, for the respondent

Keywords: Motion to Strike, Failure to Pay Costs

Criminal Decisions

Biosweep Canada Corporation v. 2314515 Ontario Inc., 2017 ONCA 508

[MacPherson, Blair and MacFarland JJ.A.]

Counsel:

B.N. Radnoff, for the appellant

No one appearing for the respondent

Keywords: Torts, Conversion, Detinue, Passing Off, Unjust Enrichment, Unlawful Interference with Economic Interests, Damages

R. v. C.F., 2017 ONCA 480

[Feldman, Watt and Huscroft JJ.A.]

Counsel:

J. Lockyer and P. Campbell, for the appellant

P. Cowle, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Exploitation, Admission of Fresh Evidence, Palmer v. The Queen, [1980] 1 S.C.R. 759, Criminal Code, s 486.4

R. v. Pastore, 2017 ONCA 487

[Juriansz, Pepall and Tratter JJ.A.]

Counsel:

A. Schorr, for the appellant

R. Morin, for the respondent

Keywords: Criminal Law, Fraud, Criminal Code, s 380(1)(a), Sentencing, General Deterrence, Denunciation

R. v. Pyrek, 2017 ONCA 476

[Laskin, Watt and Hourigan JJ.A.]

Counsel:

M. Peck, for the appellant

K. Rawluk, for the respondent

Keywords: Criminal Law, Dangerous Driving Causing Bodily Harm, Impaired Driving Causing Bodily Harm, Canadian Charter of Rights and Freedoms, s 11(b), R. v. Jordan, 2016 SCC 27

R. v. Tran, 2017 ONCA 482

[Tulloch, Lauwers and Brown JJ.A.]

Counsel:

J Tran, acting in person

H Loubert, for the respondent

Keywords: Criminal Law, Bail

R. v. Punia, 2017 ONCA 489

[Juriansz JA (In Chambers)]

Counsel:

R. Silverstein, for the appellant

J. Barrett, for the respondent

Keywords: Criminal Law, Criminal Code, s 684

R. v. TH (Publication Ban), 2017 ONCA 485

[MacPherson, Blair and Epstein JJ.A.]

Counsel:

D. Doucette and J. Belton, for the appellant

D. Finley, for the respondent

Keywords: Criminal Law, Sexual Assault, Criminal Code, s 486.4, s 486.6, R. v. Hart, (1999), 135 C.C.C. (3d) 377 (N.S.C.A.), leave to appeal refused, [2000] S.C.C.A. No. 109

R. v. Newton, 2017 ONCA 496

[Laskin, Watt and Hourigan JJ.A.]

Counsel:

D. Doucette and L. Wilhelm, for the appellant

N. Thomas and F. Au, for the respondent

Keywords: Criminal Law, Murder, Attempted Murder, R. v. Jack (1993), 88 Man. R. (2d) 93 (C.A.), aff’d [1994] 2 S.C.R. 310, R. v. Maciel (2007), 219 C.C.C. (3d) 516, leave to appeal refused [2007] 3 S.C.R.

R. v. Denouden (Appeal Book Endorsement), 2017 ONCA 497

[Doherty, Rouleau and Hourigan JJ.A.]

Counsel:

V. Giourgas, for the appellants

K. Farrell, for the respondent

Keywords: Criminal Law, Sentencing

R. v. M.A. (Appeal Book Endorsement), 2017 ONCA 504

[Laskin, Simmons and Pardu JJ.A.]

Counsel:

J. Presser and A. Menchynski, for the appellants

M. Stephen, for the respondent

Keywords: Criminal Law, Collusion, Sentencing

R. v. Munro (Appeal Book Endorsement), 2017 ONCA 498

[Doherty, Rouleau and Hourigan JJ.A.]

Counsel:

D. Lumba, for the appellants

A. Cappell, for the respondent

Keywords: Criminal Law, Evidence, Burden of Proof

R. v. Norvill (Appeal Book Endorsement), 2017 ONCA 501

[Doherty, Rouleau and Hourigan JJ.A.]

Counsel:

M. Salih, for the appellants

K. Papadopoulos, for the respondent

Keywords: Criminal Law, Informants

R. v. Ngoddy (Appeal Book Endorsement), 2017 ONCA 499

[Laskin, Simmons and Pardu JJ.A.]

Counsel:

M. Peterson, for the appellants

J. Morische, for the respondent

Keywords: Criminal Law, Summary Conviction

R. v. D.C., 2017 ONCA 483

[Feldman, Pardu and Benotto JJ.A.]

Counsel:

P. Alexander, for the appellants

M. Stephens, for the respondent

Keywords: Criminal Law, Sexual Assault, R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, Criminal Code, s 486.4, s 486.6

R. v. M.T., 2017 ONCA 505

[Laskin, Simmons and Pardu JJ.A.]

Counsel:

M. Halfyard, for the appellants

L. Schwalm, for the respondent

Keywords: Criminal Law, Sexual Assault, Criminal Code, s 486.4, s 486.6

ONTARIO COURT OF APPEAL SUMMARIES (JUNE 5 – 9, 2017)

Good afternoon,

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

There were a couple of noteworthy cases which may interest those interested in estate and franchise law.

In Levesque v. Crampton Estate, the Court overturned the lower court’s decision that the respondent joint tortfeasor is not barred by the Trustee Act in actions against an estate. In this case, the respondent issued a crossclaim against the estate more than two years after the claim was discovered. The estate brought an action under the Trustee Act to dismiss the crossclaim, arguing that the claim was statute-barred. The motion judge found the Limitations Act trumped other limitation periods that arguably applied and dismissed the motion. The Court of Appeal found that the Trustee Act trumps the limitation periods in the Limitations Act, based on section 19 of the Limitations Act, which defers to limitation periods set out in certain other statutes.

In Mendoza v Active Tire & Auto Inc., the Court overturned the lower court’s decision to forgive the respondent’s deficient disclosure in the sale of a franchise and denied the appellants’ motion to rescind the agreement. The Court of Appeal held that the Arthur Wishart Act was intended to protect franchisees by imposing requirements on franchisors. If a disclosure document is materially deficient, then no disclosure has been made, and rescission is available to the franchisee.

Other topics covered include constructive dismissal, negligent investigation by the LSUC and the application of the Law Society Act, and motions for extensions of time used in a frivolous and vexatious fashion.

Have a great weekend.

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

Lea Nebel
Blaney McMurtry LLP
lnebel@blaney.com
Tel: 416-593-3914
http://www.blaney.com/lawyers/lea-nebel

Table of Contents

Levesque v. Crampton Estate, 2017 ONCA 455

Keywords: Intentional Torts, Assault, Vicarious Liability, Estates, Crossclaims, Contribution and Indemnity, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., s. 18(1), Trustee Act, R.S.O. 1990, c. T.23, s. 38(3), Waterloo Region District School Board v. CRD Construction Ltd., 2010 ONCA 838, Canaccord Capital Corp. v. Roscoe, 2013 ONCA 378, Bikur Cholim Jewish Volunteer Services v. Penna Estate, 2009 ONCA 196

Mendoza v. Active Tire & Auto Inc., 2017 ONCA 471

Keywords: Franchise Law, Arthur Wishart Act, Ontario Regulation 581/00

2441472 Ontario Inc. v. Collicutt Energy Services, 2017 ONCA 452

Keywords: Contracts, Personal Property Security Act, Appeals, Jurisdiction, Final or Interlocutory Orders

Schwilgin v. Szivy, 2017 ONCA 453

Keywords: Civil Procedure, Frivolous, Vexatious and Abusive Proceedings, Rules of Civil Procedure, Rule 2.1

Durbin v. Brant, 2017 ONCA 463

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory Orders

Tiveron v. Collins, 2017 ONCA 462

Keywords: Family Law, Restraining Orders, Procedural Fairness, Costs

Golam v Kapteyn, 2017 ONCA 469

Keywords: Civil Procedure, Settlements, Setting Aside, Incapacity

Robson v. The Law Society of Upper Canada, 2017 ONCA 468

Keywords: Torts, Negligent Investigation, Professions, Lawyers, Law Society of Upper Canada, Immunity, Law Society Act, R.S.O. 1990, c. L.8, s. 9, Conway v. The Law Society of Upper Canada, 2016 ONCA 72, 395 D.L.R (4th) 100, Edwards v. Law Society of Upper Canada (2000), 48 O.R. (3d) 329 (C.A.), aff’d 2001 SCC 80, [2001] 3 S.C.R. 562, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21.01(1)(b)

Essar Steel Algoma Inc. (Re), 2017 ONCA 478

Keywords: Motion, Leave to Appeal, Companies’ Creditors Arrangement Act, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, Diamond v. Western Realty Co., [1924] S.C.R. 308

Giannaris v. City of Toronto (Revenue Services), 2017 ONCA 473

Keywords: Due process, Rules of Civil Procedure

Persaud v. Telus Corporation, 2017 ONCA 479

Keywords: Employment Law, Constructive Dismissal, Intentional Infliction of Mental Distress, Inducing Breach of Contract, Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10

United States v Baratov, 2017 ONCA 481

Keywords: Employment Law, Constructive Dismissal, Intentional Infliction of Mental Distress, Inducing Breach of Contract, Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10

For Criminal and Ontario Review Board Decisions, click here.

Civil Decisions:

Levesque v. Crampton Estate, 2017 ONCA 455

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

Counsel:

M. Sammon, for the appellant

H. Williams, for the respondent

Keywords: Intentional Torts, Assault, Vicarious Liability, Estates, Crossclaims, Contribution and Indemnity, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., s. 18(1), Trustee Act, R.S.O. 1990, c. T.23, s. 38(3), Waterloo Region District School Board v. CRD Construction Ltd., 2010 ONCA 838, Canaccord Capital Corp. v. Roscoe, 2013 ONCA 378, Bikur Cholim Jewish Volunteer Services v. Penna Estate, 2009 ONCA 196

Facts:

The plaintiff, Raymond Levesque, Jr., alleged that he was sexually assaulted by a priest, Father Dale Crampton (“Father Crampton”), in 1976. Mr. Levesque was 12 years old at the time. Father Crampton pleaded guilty to indecent assault and on appeal, was sentenced to eight months’ imprisonment.

Father Crampton died in 2010. In 2013, Mr. Levesque and his family brought an action against Father Crampton’s estate and the Roman Catholic Episcopal Corporation of Ottawa (“RCECO”), claiming that RCECO was vicariously liable for the priest’s conduct and breached independent duties owed to Mr. Levesque. In 2014, RCECO issued a statement of defence and crossclaim against Father Crampton’s estate, relying on the allegations of wrongdoing against Father Crampton in the statement of claim.

In 2015, the plaintiffs consented to an order dismissing their claim against the estate because it was barred by the two-year limitation period in s. 38(3) of the Trustee Act. The estate brought an unsuccessful motion to dismiss the crossclaim, relying on s. 38(3) of the Trustee Act, R.S.O. 1990, c. T.23 (“Trustee Act”). The estate appealed.

Issues:

(1) Did the motion judge correctly find that RCECO’s crossclaim against the Crampton estate was not time-barred by s. 38(3) of the Trustee Act?

Holding: Appeal allowed.

Reasoning:

(1) The Trustee Act

(1) No. The Court of Appeal agreed with the appellant estate’s submission that a crossclaim is an “action” and, therefore, by rule 1.03(1) of the Rules of Civil Procedure, falls within s. 38 of the Trustee Act. On the contrary, the respondent RCECO argued that s. 38(3) of the Trustee Act has no application to a claim for contribution and indemnity against the estate of a deceased person. The respondent relied on the wording of s. 38(2) of the Trustee Act , which provides, in summary, that if a deceased person has committed a wrong to another person, “the person wronged” may maintain an action against the executor or administrator of the deceased person.

The Court of Appeal disagreed with the respondent. The Court of Appeal held that a claim for contribution and indemnity against a deceased person can only be made pursuant to the Trustee Act. Since the purpose of s. 38 of the Trustee Act is to enable claims to be brought against estates, it is reasonable to treat a person seeking contribution and indemnity as a “person wronged”. In this case, the wrong suffered is having been required to pay more than the share of damages proportionate to the person’s fault.

(2) The Limitations Act, 2002

In the Court of Appeal’s view, the limitation period in the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., (“Limitations Act, 2002”) is also plainly applicable to the crossclaim. By virtue of ss. 5 and 18(1) of the Limitations Act, 2002, the claim for contribution and indemnity is discovered on the day the first alleged wrongdoer is served with the claim in respect of which contribution and indemnity is sought. Section 4 sets out the basic two-year limitation period from the date of discovery. There is no merit to the appellant’s submission that s. 18(1) applies to claims against a joint tortfeasor, but not to claims against the joint tortfeasor’s estate. The estate stands in the place of the deceased.

(3) Resolving the Conflict

Since both limitation periods apply, the Court of Appeal necessarily had to resolve the conflict. Relying on Waterloo Region District School Board v. CRD Construction Ltd., 2010 ONCA 838, (“Waterloo”) and Canaccord Capital Corp. v. Roscoe, 2013 ONCA 378, 115 O.R. (3d) 641 (“Canaccord”), the motion judge found that s. 18(1) of the Limitations Act, 2002 “trumps other limitation periods that arguably apply. However, the Court of Appeal distinguished Waterloo from this case. In Waterloo, unlike this case, the limitation period applicable to the crossclaim was the “basic” two-year limitation period, subject to the deemed discovery rule in s. 18 of the Limitations Act, 2002. There was no potential conflict between that limitation period and another one, such as s. 38(3) of the Trustee Act. The Court of Appeal also distinguished Canaacord because there was no conflicting limitation period that applied to the claims for contribution and indemnity. However, such a conflict exists here.

By the terms of s. 19(4) of the Limitations Act, 2002, limitations provisions set out in the Schedule prevail over the provisions of the Limitations Act, 2002. As s. 38(3) of the Trustee Act is set out in the Schedule, it must prevail if it applies: Bikur Cholim Jewish Volunteer Services v. Penna Estate, 2009 ONCA 196, 94 O.R. (3d) 401, at para. 26 (“Bikur”).The Court of Appeal held that the result reached in Bikur is consistent with the nature, purpose and history of the Trustee Act provision. The Limitations Act, 2002 is based on discoverability. Section 18(1) deems the claim to be discovered on the date the claim is served on the person who seeks contribution or indemnity. In contrast, s. 38(3) of the Trustee Act is a “hard” or absolute limitation period. It is triggered by a fixed and known event – the death of the party against whom a claim is made. The purpose of the Trustee Act limitation period is clear. It is to provide a remedy for a limited time, without indefinite fiscal vulnerability to the estate. Accordingly, the Court of Appeal allowed the appeal and RCECO’s crossclaim against the estate was dismissed as being statute-barred.

Mendoza v. Active Tire & Auto Inc., 2017 ONCA 471

[Feldman, Cronk and Miller JJ.A.]

Counsel:

B.V. Hanuka, for the appellants

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

Keywords: Franchise Law, Arthur Wishart Act, Ontario Regulation 581/00

Facts:

The appellants purchased an Active Tire franchise from the respondent. After operating the franchise for three months at a loss, the appellants sought to rescind the agreement under s. 6(2) of the Arthur Wishart Act (“Act”) on the basis that the disclosure was deficient. The motion judge forgave the respondent’s deficient disclosure.

Issues:

(1) Did the motion judge err in law in his interpretation and application of the Act and Ontario Regulation 581/00 (“Regulation”)?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The motion judge erred in his interpretation and application of the Act and Regulation. The respondent’s deficient disclosure could not constitute the disclosure document required by the detailed requirements of the Act and Regulation. The appellants were entitled to rescind the agreement under s. 6(2) of the Act.

The Act is intended as protective legislation for franchisees. The scheme of the Act is to impose a number of requirements on franchisors to fully disclose the type of financial and other information a prospective franchisee would normally need in order to decide whether to become a franchisee.

Where there are a number of material deficiencies, the purported disclosure document is not a disclosure document within the meaning of the Act, and rescission is available under s. 6(2), which states:

(2) A franchisee may rescind the franchise agreement, without penalty or obligation, no later than two years after entering into the franchise agreement if the franchisor never provided the disclosure document.

Where a disclosure document is materially deficient, then no disclosure will be found to have been made. In this case, there were three notable deficiencies in the disclosure document.

(i) The disclosure certificate was signed by only one officer or director, not two, as required by s. 7(2)(c) of the Regulation.

The motion judge found this deficiency to be insignificant and not misleading. This finding was an error. S. 7(2)(c) of the Regulation is linked to s. 7 of the Act, which provides the damages remedy for any misrepresentation in the disclosure statement that causes the franchisee a loss. Under s. 7(1)(e) of the Act, those who sign the disclosure document are liable in damages to the franchisee for any such misrepresentation. The purpose of s. 7(1)(e) of the Act is to give the franchisee substantive rights in damages against the directors and officers who sign the document, and by doing so, to impress upon those who sign, the importance of ensuring that the document is complete and accurate.

The motion judge also accepted the argument that since the appellant acknowledged he had not read the entire 175 page disclosure document, he could not take the position that its contents were of importance to him. This finding was an error. The Act imposes significant disclosure obligations on franchisors for the benefit of franchisees. The rescission remedy is not conditional on the approach taken by a particular franchisee to the disclosed material. This approach is consistent with the intent of the Act. Franchisees are entitled to rely on its contents and the ability to later verify what they believed and understood when they decided to proceed with the franchise.

S. 7(2)(c) of the Regulation and s. 7(1)(e) of the Act constitute material components of any franchise agreement and a failure to follow either constitutes non-disclosure.

(ii) The failure to provide audited financial statements as required by s. 5(4)(b) of the Act and s. 3(1) of the Regulation.

The motion judge found this deficiency to be insignificant and not misleading. This finding was an error. S. 3(1) requires an audited financial statement for the most recently completed fiscal year, prepared in accordance with generally accepted auditing standards. The respondent’s financial year-end is in August; the respondent had not completed its 2014 financial statement during 2015 negotiations. Thus, it could not comply with s. 3(1) as its most recent statement was from 2013.

S. 3(2) provides a 180 day grace period. If 180 days have not passed since the end of the most recently completed fiscal year, a financial statement from the previous fiscal year is acceptable if it meets the requirements of s. 3(1). In this case, the respondent delivered its previous year’s statement over two weeks beyond the 180 day grace period. Financial statements “are clearly an extremely significant component” of the information a prospective franchisee requires to assess the viability of the franchisor’s franchise operations and the safety and security of becoming a franchisee.

Together, the first two deficiencies represent material deficiencies which are fatal to the ability of the purported disclosure document to constitute a disclosure document within the meaning of the Act.

(iii) The failure to provide the disclosure document at one time as required by s. 5(3) of the Act.

S. 5(3) requires one document at one time, and not piecemeal information over a period of months.

2441472 Ontario Inc. v. Collicutt Energy Services, 2017 ONCA 452

[Juriansz, Lauwers and Hourigan JJ.A.]

Counsel:

K.W. McKenzie, for the appellant

H.D. Krupat and B. Clancy, for the respondent

Keywords: Contracts, Personal Property Security Act, Appeals, Jurisdiction, Final or Interlocutory Orders

Facts:

The respondent-Collicutt sold a piece of equipment known as a heat and power package and chiller HVAC to the appellant 2441472 (“244”). The full amount of the purchase price was not paid. 244’s failure to pay spawned five motions. In one of those motions, 244 challenged Collicut’s assertion that it had a valid purchase money security interest in the equipment registered under the Personal Property Security Act (“PPSA”). The motion was dismissed and 244 appealed the motion judge’s order. On appeal, 244 argued that the motion judge erred in law in deciding the issue under the PPSA, while Collicutt argued that since the motion was interlocutory, the appeal should have been brought to the Divisional Court.

Issues:

(1) Is the order under appeal final, thus giving this court jurisdiction to hear the appeal?

Holding: Appeal quashed.

Reasoning:

(1) No. The order below was interlocutory for the following reasons:

(i) The jurisdictional basis for the PPSA part of the motion was not pleaded.

(ii) The motion was not framed as a motion for summary judgment or the determination of an issue before trial.

(iii) The motion judge dismissed the PPSA aspect of the motion.

(iv) The motion judge did not make an explicit, final determination as to the enforceability of any agreement between the parties.

(v) The validity of the PPSA registration is not the real issue in dispute between the parties.

The real issue in dispute is who owes what to whom in relation to the equipment and its alleged deficiencies. Since the order is interlocutory, the Court of Appeal has no jurisdiction over the appeal and it is quashed. However, the appellant, 244 is able to appeal to the Divisional Court.

Schwilgin v. Szivy, 2017 ONCA 453

[Pepall, Lauwers and Huscroft JJ.A.]

Counsel:

L. Schwilgin, acting in person

R.S. Loomer, for the responding party

Keywords: Civil Procedure, Frivolous, Vexatious and Abusive Proceedings, Rules of Civil Procedure, Rule 2.1

Facts:

Counsel for the responding party requested a review pursuant to Rule 2.1 seeking to have Schwilgin’s two motions for an extension of time dismissed on the basis that they are frivolous, vexatious, or otherwise an abuse of the process of the court.

Issues:

(1) Should Schwilgin’s motions for an extension of time be dismissed?

Holding: Motions dismissed.

Reasoning:

(1) Yes. Schwilgin has been found to have used the appeal process as a means of delaying payment, causing considerable prejudice to the respondent. Schwilgin continued to bring motions that have already been dismissed and continues to serve the respondent’s former counsel, despite being informed that counsel no longer acts for the respondent. These motions are frivolous, vexatious, and an abuse of process of the court.

Durbin v. Brant, 2017 ONCA 463

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

Counsel:

G. Brant, in person

S. Bentley-Jacobs, for the respondent

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory Orders

Facts:

Appellant sought to appeal from the application judge’s order referring his account for assessment under the Solicitors Act.

Issues:

(1) Does this court have jurisdiction to hear the appeal?

Holding: Appeal quashed.

Reasoning:

(1) No. The order in question is interlocutory rather than final in nature. Thus, the appeal lies to the Divisional Court. This is because the order at issue does not determine the real matter in dispute between the parties. The appellant has not been deprived of a substantive right because he is not precluded from defending the quantum of his account.

Tiveron v. Collins, 2017 ONCA 462

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

Counsel:

Eric Richard Collins, in person

K. Robinson, for the respondent

Keywords: Family Law, Restraining Orders, Procedural Fairness, Costs

Facts:

The appellant appeals from the order of J. Wilson J of the Superior Court of Justice, dismissing his appeal from the trial judgment of R. Zisman J. of the Ontario Court of Justice.

The appellant raises four issues.

Issues:

(1) Did the trial judge err by denying the appellant procedural fairness due to judicial bias?

(2) Did the trial judge err by imposing a restraining order on the appellant?

(3) Did the trial judge err by prohibiting the appellant from initiating any further court proceedings in this case without leave of the court?

(4) Did the trial judge err by granting costs to the respondent in the amount of $52, 899.32?

Holding: Appeal dismissed.

Reasoning:

(1) No. There is a steep hurdle for litigants who seek to overturn a judicial ruling based on the alleged bias of the judicial decision-maker. This case does not meet this high hurdle. The trial judge’s interventions were designed to clarify the evidence and the matters in issue, minimize irrelevancies, and maintain control of the trial process.

(2) No. The trial judge found that the appellant had engaged in a pattern of persistent and continuing abusive behaviour towards the respondent, and that he acted in a threatening manner toward her, both throughout their relationship and after their separation. The judge believed it unlikely that the appellant would be able “to self-regulate either his conduct or method of communicating”.

(3) No. This case has a lengthy history, involving multiple court appearances and multiple costs awards against the appellant, many of which remain outstanding in full. To that end, the appellant threatened further court proceedings to resolve any disputed issue or conflict with the respondent. The order in question was appropriate, given the appellant’s future litigious intentions, and the litigation history between the parties.

(4) No. The trial judge provided clear and detailed reasons for her cost award. The respondent was successful at trial and had acted reasonably throughout litigation. In contrast, the appellant acted unreasonably by making unsupported allegations and adopting a litigation strategy that was calculated to intimidate the respondent and increase her legal costs.

Golam v Kapteyn, 2017 ONCA 469

[Juriansz, Pepall and Trotter JJ. A.]

Counsel:

Golam Mehedi, acting in person

M. Unea, for the respondents

Keywords: Civil Procedure, Settlements, Setting Aside, Incapacity

Facts:

The appellant appeals from the dismissal of his motion to set aside the settlement and the consent order dismissing his action. He acknowledges signing the settlement but tendered evidence

attempting to show that he did so following a long examination, and was suffering from a headache and additional ailments. The motion judge found that he had not met his burden of proof and there was no legally justifiable reason to set aside the settlement. The appellant also argues that the amount of the costs awarded do not reflect the handwritten endorsement of the motion judge.

Issues:

(1) Did the motion judge err in finding the burden of proof was not met?

(2) Was the amount for costs awarded incorrect?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court found the evidence fell short of establishing incapacity.

(2) No. The court found the official transcript indicated otherwise and was not persuaded to interfere with the formal order.

Robson v. The Law Society of Upper Canada, 2017 ONCA 468

[Lauwers, Hourigan and Bentto JJ.A.]

Counsel:

R. Watson, for the appellant

S. Dewart and I. McKellar, for the respondents

Keywords: Torts, Negligent Investigation, Professions, Lawyers, Law Society of Upper Canada, Immunity, Law Society Act, R.S.O. 1990, c. L.8, s. 9, Conway v. The Law Society of Upper Canada, 2016 ONCA 72, 395 D.L.R (4th) 100, Edwards v. Law Society of Upper Canada (2000), 48 O.R. (3d) 329 (C.A.), aff’d 2001 SCC 80, [2001] 3 S.C.R. 562, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21.01(1)(b)

Facts:

The Law Society of Upper Canada (“LSUC”) brought disciplinary proceedings against the appellant in 2007 that finally resolved in his favour in October 2014. The appellant then brought an action claiming damages from LSUC for negligent investigation, malicious prosecution, and mischief in public office. The appeal concerns the motion judge’s decision to strike the claim for negligent investigation as disclosing no reasonable cause of action under rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

The motion judge based his decision on s.9 of the Law Society Act, R.S.O. 1990, c. L.8, which provides that no action or other proceedings for damages shall be instituted against any LSUC official for any act done in good faith in the performance of a duty or exercise of power. The appellant argues that s. 9 only protects LSUC employees and officials from negligence claims, but not LSUC itself.

Issues:

1) Is LSUC immune from suit by virtue of s.9 of the Law Society Act?

Holding: Appeal dismissed.

Reasoning:

1) Yes. LSUC is protected from negligence claims in cases where their investigations were performed in good faith. In Conway v. The Law Society of Upper Canada, 2016 ONCA 72, 395 D.L.R (4th) 100, the Court held that “mere negligence in the good faith performance of the LSUC’s duties or functions is not enough to establish liability.” Similarly, in Edwards v. Law Society of Upper Canada (2000), 48 O.R. (3d) 329 (C.A.), aff’d 2001 SCC 80, [2001] 3 S.C.R. 562, the Court stated that “it is also important that immunity to civil suit is codified in s. 9 of the Law Society Act…This jurisprudence clearly establishes a judicial immunity from negligence for the Law Society’s discipline process, including the investigative function at the front end.”

Essar Steel Algoma Inc. (Re), 2017 ONCA 478

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

Counsel:

P.H. Griffin, M.B. Lerner, K. Nusbaum and R. Trenker, for the moving parties, GIP Primus LP and Brightwood Loan Services LLC

P.D.S. Jackson, A. Gray, J. Opolsky, A. Shelley, for the moving party, Port of Algoma Inc.

A. Taylor, E. Kolers and S. Sopic, for the applicants/respondents

C.P. Prophet, N. Kluge and D. Contractor, for the Monitor Ernst & Young Inc.

Keywords: Motion, Leave to Appeal, Companies’ Creditors Arrangement Act, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, Diamond v. Western Realty Co., [1924] S.C.R. 308

Facts:

GIP Primus LP and Brightwood Loan Services LLC (collectively “GIP”) and Port of Algoma Inc. (“Portco”) applied for leave to appeal from an order made in the context of insolvency proceedings under the Companies’ Creditors Arrangement Act (“CCAA”), involving Essar Steel Algoma Inc. (“Algoma”).

In 2014, Algoma was in need of a cash injection and an attempt was made to address this issue through a solvent restructuring under the Canada Business Corporations Act (“CBCA”). During this complex transaction, GIP advanced US $150 million to Portco, which was in turn paid to Algoma. In total, Algoma received a total purchase price of US $171.5 million. Portco paid a smaller amount to Algoma and the balance of the purchase price was paid by a US $19.8 million promissory note from Portco to Algoma. Portco’s obligation under the note was assumed by Essar Global Fund Ltd. (“Essar”), the indirect parent of Portco and Algoma.

The restructuring was unsuccessful, and Algoma filed for protection under the CCAA in November, 2015. Under the initial CCAA order, Algoma was required to make certain payments; these payments ceased in May, 2016. At this time, the Debtor-In-Possession (“DIP”) lenders refused to approve budgets providing for these payments as long as the $19.8 million remained outstanding. The refusal gave rise to the current proceedings. In a series of three motions brought by Portco, supported by GIP (in the latter of the three, vice versa), Portco/GIP sought an order requiring Algoma to resume the payments, relying on the provisions of s. 11.01(a) of the CCAA. Portco/GIP advanced three different arguments, all of which were rejected.

Issues:

(1) Should leave to appeal be granted?

Holding: Motion for leave to appeal dismissed.

Reasoning:

(1) No. Leave to appeal is granted sparingly in CCAA proceedings because of the “real time” dynamic of CCAA matters and the “generally discretionary character underlying many of the orders made by supervising judges in such proceedings”, and the deference owed to such decisions. In considering whether to grant leave, the court will consider whether:

(i) the proposed appeal is prima facie meritorious or frivolous;

(ii) the point on the proposed appeal is of significance to the practice (of insolvency law);

(iii) the point on the proposed appeal is of significance to the proceeding; and

(iv) whether the proposed appeal will unduly hinder the progress of the action.

The leave motion failed on the first two factors.

First, on the merits, the moving parties’ attempts on the first, second, and third motion all involved the interpretation of s. 11.01(a) and its application in the particular circumstances of the CCAA proceeding. Those issues were determined adversely against the moving parties three times. No steps were taken to obtain leave to appeal from the motion judge’s orders on the first and second motion. There was not any prima facie merit in the attempt to seek leave to appeal. Further, all the relevant factors for the application of issue estoppel are present, and the decisions are binding on the moving parties absent a successful appeal.

Second, with respect to the significance to the practice, the s. 11.01(a) issues have considerable significance for the particular CCAA proceeding, but do not have significance for the practice in the circumstances of the proceeding. Whether s. 11.01(a) is available to benefit the moving parties, thereby giving them an advantage over other stakeholders in terms of the servicing of the GIP loan, depends upon the interpretation and application of the particular agreements that underlie the transaction.  In this case, the proposed appeals arise out of the unique and inter-relatedness of the initial agreements that formed the solvent restructuring transaction. There is little assistance to the general practice of insolvency law that would arise from the proposed appeals.

Giannaris v. City of Toronto (Revenue Services), 2017 ONCA 473

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

Counsel:

George Giannaris, acting in person

C. Henderson, for the respondents

Keywords: Due process, Rules of Civil Procedure

Facts:

The appellant brought a motion to set aside the Registrar’s dismissal of his appeal for delay and granting him a 30-day extension of time within which to perfect his appeal from the orders of the Superior Court of Justice. Cronk J.A. dismissed Giannaris’ motion and granted the City’s cross-motion that he be prohibited from bringing any further motions in this proceeding – save for any motion to a full panel of the court to review Cronk J.A.’s decision – under r. 37.16 of the Rules of Civil Procedure.

Issues:

(1) Was the appellant denied due process?

Holding: Appeal dismissed.

Reasoning:

(1) No. The panel reviewed Cronk J.A.’s decision and determined there was no merit to the appellant’s submissions that he had never been before a court of competent jurisdiction, or that he had been denied due process.

Persaud v. Telus Corporation, 2017 ONCA 479

[Laskin, Lauwers and Brown JJ.A.]

Counsel:

K. Zvulony, for the appellants

T. Weisberg, for the respondents

Keywords: Employment Law, Constructive Dismissal, Intentional Infliction of Mental Distress, Inducing Breach of Contract, Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10

Facts:

The appellant was employed by Telus. She resigned and then sued the respondents for constructive dismissal. The action was dismissed at trial, where the appellant alleged constructive dismissal based on a significant change in her working conditions, namely, an increase in her working hours, and a “poisoned work environment.” The trial judge found she resigned out of dissatisfaction with management, unhappiness with the direction the company was taking, her critical view of the performance evaluation structure, and was particularly bothered by the treatment of her friend and mentor.

Issues:

(1) Did the trial judge err in law by finding that the reasons for the resignation must be related to the constructive dismissal?

(2) Did the trial judge err in law by finding that a report of sabotage was not made in bad faith or was outrageous?

(3) Did the trial judge err in law by finding that the respondent did not induce breach of contract?

Holding: Appeal dismissed.

Reasoning:

(1) No. The requirement for a causal link between the breach of contract and the damages suffered by the plaintiff is an essential element for a breach of contract claim. When an employee consents or acquiesces to changes to an essential term of the employment contract, the changes will not amount to a constructive dismissal.

The trial judge was correct in setting out the primary principles of law: “An employee is entitled to a reasonable period of time to assess [her] circumstances and make an election. However, a considerably extended period of time will preclude an action for constructive dismissal. In most circumstances, courts will view an employee’s willingness to remain in the altered position for a significant period of time as acceptance of the new terms, absent other mitigating factors.” In this case, the plaintiff remained silent as to an increase in working hours, thereby precluding a claim for constructive dismissal.

(2) No. Regarding the intentional infliction of mental distress claim, the trial judge found “there [was] no basis to find that Telus acted in ‘bad faith’ or in an ‘unfair’ manner, or engaged in any conduct that was ‘flagrant and outrageous,’” when it conducted a legitimate investigation into the sabotage of its IP system. The sabotage caused Telus a significant loss of revenue, and Telus had a good faith basis to conclude that the plaintiff was responsible.

(3) No. The appellant was in discussions to possibly enter into a contract with a third party, TekSystems, who had an opportunity to provide services to Telus in Edmonton. The appellant signed the contract through her consulting firm, but there was no evidence that TekSystems signed. Therefore, there was no evidence that Telus knew of this discussion and no evidence to establish that there was a valid and enforceable contract.

United States v Baratov, 2017 ONCA 481

[Miller J.A. (In Chambers]

Counsel:

R. Pillay and A. Dicarlo, for the applicant

H.J. Graham, for the respondent

Keywords: Extradition, Judicial Interim Release, Unauthorized Use of a Computer, Flight Risk, Misapprehensions of the Evidence, Material Change in Circumstances, Fresh Evidence, Extradition Act, SC 1998, c 18, Criminal Code, RSC 1985, c C-46, United States of America v Thomlison, 2007 ONCA 42, Mandall v United States of America, 2010 ONSC 1202, United States of America v Pannell (2005), 193 CCC (3d) 414 (Ont. C.A.), United States of America v Ugoh, 2011 ONSC 1810, R v Riezaie (1996), 31 OR (3d) 713 (CA), United States of America v Chan (2000), 144 CCC (3d) 93 (Ont. C.A.), R v St-Cloud, 2015 SCC 217

Facts:

The applicant was denied interim release in the Superior Court pending his hearing for extradition to the United States, who seeks to prosecute him for conduct re;atomg to the Canadian offence of unauthorized use of a computer, contrary to s. 342.1 of the Criminal Code, R.S.C. 1985, c. C-46. The application judge denied the application for interim release finding the detention justified on all three grounds set out in s. 515(10) of the Criminal Code: (1) flight risk, (2) the need to protect the public, and (3) the need to maintain public confidence in the administration of justice. The application judge found the offence alleged to be a “serious offence”, committed for the benefit of, at the direction of, or in association with, a criminal organization, and therefore found that the reverse onus provided for in s. 515(6)(a)(ii) of the Criminal Code applied, which required applicant to satisfy the court that detention is not justified. The court found the applicant did not discharge the onus.

Issues:

(1) Did the application judge err and misapprehend the evidence before him?

(2) Was there a material change in circumstances since the order which necessitates a variation of that order?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court stated the standard of review was the test from United States of America v. Chan (2000), 144 C.C.C. (3d) 93 (Ont. C.A.), “not whether I would grant bail if the matter came before me at first instance, but rather, whether the applicant can demonstrate [a] reviewable error on the part of [the application judge].” The court found even though the application judge misapprehended the evidence in some respects, these errors did not result in an improper application of the test. No error in principle was identified.

(2) No. The court stated it had the authority to vary the order, per R. v. St-Cloud, 2015 SCC 217 – if the court was satisfied of a material change in circumstances, such that the application judge would not have made the order that he did, had he been aware of these circumstances. The applicant had sought and was granted leave to admit fresh evidence, and argued the fact he was no longer accused of participating in a conspiracy, but only of unauthorized use of a computer, narrowed the allegations considerably and dictated that the reverse onus provision should not apply.

The court rejected this submission and stated that it remained the case that the applicant was alleged to have performed work, at the direction of others, for payment, for what he knew to have been a criminal purpose. The element of conspiracy in a criminal enterprise therefore remained, as did the application of the reverse onus provision. The court found that in the event the reverse onus provision did not apply, on the findings of the application judge and considering the fresh evidence, the Crown would still have discharged its onus of establishing that the release of the applicant would not be warranted under the three-part test.

Ontario Review Board (Mental Health and Detention Decisions)

Jeffrey (Re), 2017 ONCA 464

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

Counsel:

M. Davies, for the appellant

M. Medeiros, for the respondent, Her Majesty the Queen

No one appearing for the respondent, The Person in Charge of Providence Care Mental Health Services

Keywords: Criminal Law, Mental Health, Ontario Review Board, Detention Orders, Public Safety, Community Access, Winko v Forensic Psychiatric Institute (BC), [1999] SCJ No 31

Criminal Decisions

R v Kraus, 2017 ONCA 458

[Juriansz, Pepall and Trotter JJ.A.]

Counsel:

R. Litkowski, for the appellant

J. Epstein, for the respondent

Keywords: Criminal Law, Impaired Driving, Driving Causing Bodily Harm, Judicial Notice

R v KM (Publication Ban), 2017 ONCA 457

[Juriansz, Pepall and Trotter JJ.A.]

Counsel:

S. Purohit, for the appellant

K. Farrell, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Incest, Breach of Probation

R v Muir, 2017 ONCA 461

[Simmons, Pardu and Benotto JJ.A.]

Counsel:

R.C. Bottomley and M. Quenneville, for the appellant

P. Fraser, for the respondent

Keywords: Criminal Law, Armed Robbery, Identification, Jury Instructions

 R v Giamou, 2017 ONCA 466

[Epstein, Pardu and Benotto JJ.A.]

Counsel:

T. Yuen, for the appellant

J. Streeter, for the respondent

Keywords: Criminal Law, Possession for the Purpose of Trafficking, Assault, Citizen’s Arrest, Police Conduct, Canadian Charter of Rights and Freedoms, ss 8, 9, R v Buhay, 2003 SCC 30, R v Reid, 2016 ONCA 524

R v French, 2017 ONCA 460

[Feldman, MacPherson and Benotto JJ.A.]

Counsel:

David French, acting in person

J.R. Presser and A. Menchynski, appearing as amicus curiae

R. Pinnock, for the respondent

Keywords: Criminal law, Second Degree Murder, Parole Eligibility, Fresh Evidence, Hearsay, Canadian Charter of Rights and Freedoms, R v Parks (1993), 84 CCC (3d) 353 (Ont CA), R v Drysdale, 2011 ONSC 5451,  McKnight (1999), 135 CCC (3d) 41 (Ont CA), R v Wristen (1999), 141 CCC (3d) 1, R v Czibulka, 2011 ONCA 82

 

R v Reilly, 2017 ONCA 465

[Juriansz, Epstein and Pepall JJ.A.]

Counsel:

A. Lewis, for the appellant

M. Medeiros, for the respondent

Keywords: Criminal Law, Uttering Death Threats

R v Davies, 2017 ONCA 467

[Hoy A.C.J.O., Feldman and Benotto JJ.A.]

Counsel:

A. Ostroff, for the appellant

S. Porter, for the respondent

Keywords: Criminal Law, Robbery, Use of an Imitation Firearm, Sentencing, Fresh Evidence, R v Lacasse, [2015] 3 SCR 1089

R v Zvolensky, 2017 ONCA 475

[Sharpe, Watt and Pardu JJ.A.]

Counsel:

F. Addario, A. Furgiuele and D. Doucette, for the appellant Zdenek “Dennis” Zvolensky

A.K. Kapoor and S. Harland-Logan, for the appellant Ronald Cyr

J.M. Rosen, P.J.I. Alexander and L. Daviau, for the appellant Nashat Qahwash

J. Speyer and A. Wheeler, for the respondent

Keywords: Criminal Law, Juror Ineligibility, Canadian Charter of Rights and Freedoms, Criminal Code, R v Zvolensky, 2016 ONCA 947, R v Zvolensky, 2017 ONCA 273, R v Reid, 2016 ONCA 524, Guindon v Canada, 2015 SCC 41

R v Sanderson, 2017 ONCA 470

[Feldman, Gillese and Pepall JJ.A.]

Counsel:

M. Halfyard and B. Vandebeek, for the appellant

A. Campbell, for the respondent

Keywords: Criminal Law, Sexual Assault, Indecent Assault, Gross Indecency, Credibility, Reply Evidence, Case-Splitting, Collateral Fact Rule, R v WD, [1991] 1 SCR 742, R v Krause, [1986] 2 SCR 466, R v GP (1996), 31 OR 504 (CA), R v Chaulk, [1990] 3 SCR 1303, R v Drake (1970), 1 CCC (2d) 396 (Sask QB), Browne v Dunn (1893), 6 R 87 (HL (Eng)), R v Campbell (1977), 17 OR (2d) 673 (CA), R v TK, 2013 ONCA 257, R v Markman, [2002] OJ No 4250 (Ont CA), R v Prebtani, 2008 ONCA 735, R v Lawes (1996), 187 AR 321, affirmed [1997] 2 SCR 694

R v FL (Publication Ban), 2017 ONCA 472

[Weiler, Feldman and Huscroft JJ.A.]

Counsel:

V. Rondinelli, for the appellant

H. Freeman, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Invitation to Sexual Touching, Credibility, Kienapple v R, [1975] 1 SCR 729, R v W(D), [1991] 1 SCR 772, R v DT, 2014 ONCA 44, R v AM, 2014 ONCA 769, R v RW, [1992] 2 SCR 122

R v AG (Publication Ban), 2017 ONCA 474

[Tulloch, Lauwers and Brown JJ.A.]

Counsel:

Y.S. Rahamim, for the appellant

A.J. Hotke, for the respondent

Keywords: Criminal Law, Sexual Interference, DNA evidence, Pre-Sentence Report, R v Lacasse, 2015 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.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 29 – JUNE 2, 2017)

 

Good afternoon,

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

There were a couple of noteworthy cases which may interest those interested in personal injury and class action law.

In Letestu Estate v. Ritlyn Investments Limited, the Court overturned the lower court’s decision that the estate of a deceased tenant had 1 year to sue the landlord of the tenant. The estate claimed that the deceased had tripped on a “worn, torn and unsecured carpet” in his living room and fell, resulting in personal injury (prior to his death). The motion judge dismissed the estate’s action, after concluding the claim fell within the exclusive jurisdiction of the Landlord and Tenant Board over the subject matter, and was outside the 1 year limitation period prescribed under the Residential Tenancies Act. The Court of Appeal found that the Superior Court had jurisdiction and the 2 year limitation period under the Limitations Act applied.

In Wellman v. TELUS Communications Company, the motions judge certified a class action to include both consumers and non-consumers (business customers) and refused Telus’ motion to stay the claims of non-consumers which it argued were claims subject to a mandatory arbitration clause contained in Telus’ contracts. The motions judge applied section 7(5) of the Arbitration Act and the decision of the Court of Appeal in Griffin v. Dell Canada Inc., in refusing to grant a partial stay. The issue on appeal was whether the Court’s analysis in Griffin had been overtaken by the analysis mandated in the Supreme Court of Canada’s decision in Seidel v. TELUS Communications Inc.  The Court ultimately affirmed that Griffin remains good law in respect of class proceedings commenced in Ontario.

Other topics covered include competing claims for relief relating to an easement, vicarious liability of a taxi company (employer) for wrongful acts of a taxi driver (employee) and Criminal Code s. 490 applications (return of items seized by the police).

Have a great weekend.

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

Lea Nebel
Blaney McMurtry LLP
lnebel@blaney.com
Tel: 416-593-3914
http://www.blaney.com/lawyers/lea-nebel

Table of Contents

Civil Decisions

Letestu Estate v. Ritlyn Investments Ltd., 2017 ONCA 442

Keywords: Torts, Negligence, Slip and Fall, Residential Tenancies, Estates, Residential Tenancies Act, 2006, S.O. 2006, c.17, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., Trustee Act, R.S.O. 1990, c. T.23 Efrach v. Cherishome Living, 2015 ONSC 472

Wellman v. TELUS Communications Co., 2017 ONCA 433

Keywords: Class Actions, Consumer Contracts, Arbitration Clauses, Enforceability, Consumer Protection Act, 2002, S.O. 2002, c.30, Sched. A, Arbitration Act, 1991, S.O. 1991, c. 17, Griffin v. Dell Canada Inc., 2010 ONCA 29, 98 O.R. (3d) 481, Seidel v. TELUS Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531

Remicorp Industries Inc. v. Metrolinx, 2017 ONCA 443

Keywords: Easements, Declaration, Injunction, Abandonment of Easement, Abandonment by Implied Release, Abandonment by Operation of Law, Remedies

McGinn v. Evanshen, 2017 ONCA 431

Keywords: Contracts, Shareholder Agreements, Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633

Berman v. Berman, 2017 ONCA 447

Keywords: Family Law, Civil Procedure, Appeals, Security for Costs

Hercules Moulded Products Inc. v. Foster, 2017 ONCA 445

Keywords: Real Estate, Insurance Law, Title Insurance, Failure to Disclose, Actual Loss

Kondratiev v. Boyko, 2017 ONCA 444

Keywords: Civil Procedure, Striking Pleadings, Rules of Civil Procedure, Rule 21, Limitation Periods, Abuse of Process, Limitations Act, 2002

Ivic v. Lakovic, 2017 ONCA 446

Keywords: Sexual Assault, Vicarious Liability, Employer Liability, Bazley v. Curry

Floward Enterprises Ltd. (H. Williams and Co.) v. Winberg Estate, 2017 ONCA 448

Keywords: Civil Litigation, Police Seizure, Ex parte Proceeding, Ruby v. Canada (Solicitor General), 2002 SCC 75, [2002] 4 S.C.R. 3, Criminal Code, R.S.C. 1985, c. C-46, s.490(7), R. v. Backhouse (2005), 194 C.C.C. (3d) 1

For Civil Endorsements, click here.

For Criminal Decisions, click here.

Civil Decisions

Letestu Estate v. Ritlyn Investments Ltd., 2017 ONCA 442

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

Counsel:

B.A. Percival Q.C., D. Zacks and J.P. McCoy, for the appellant

K.J. Raddatz and K.C. Dickson, for the respondent

Keywords: Torts, Negligence, Slip and Fall, Residential Tenancies, Estates, Residential Tenancies Act, 2006, S.O. 2006, c.17, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., Trustee Act, R.S.O. 1990, c. T.23 Efrach v. Cherishome Living, 2015 ONSC 472

Facts:

In December 2011 the appellant estate commenced an action for damages for injuries the deceased suffered when he allegedly slipped and fell over a damaged carpet in his residential rental unit. The action claimed $500,000 in damages from the respondent, the owner, and manager of the apartment building. The appellant estate commenced the action 23 months after the alleged slip and fall. The respondent, on the eve of trial, moved under Rule 21 of the Rules of Civil Procedure to strike the claim on the basis the Superior Court had no jurisdiction to hear the claim.

The motion judge dismissed the estate’s action, after concluding that the claim fell within the exclusive jurisdiction of the Landlord and Tenant Board (the “Board”), and was outside the one-year limitation period prescribed under s. 29(2) of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “Act”).  The estate appealed the motion judge’s decision.

Issues:

(1) Did the motion judge err in determining that the Superior Court lacks jurisdiction over the action?

(2) Did the motion judge err in determining that the action is statute-barred?

Holding: Appeal allowed.

Reasoning:

(1) The Superior Court Has Jurisdiction over the Claim

Yes. A plain reading of the four relevant provisions of the Act demonstrates the Act does not grant the Board exclusive jurisdiction over all claims of non-repair against a landlord:

Section 29(1) of the Act provides for a tenant or former tenant of a rental unit to apply to the Board for a variety of orders, including that the landlord breached an obligation under s. 20(1) (the landlord’s duty to repair).

Section 168(2) provides that the Board “has exclusive jurisdiction to determine all applications under the Act and with respect to all matters in which jurisdiction is conferred on it by this Act.”

Section 207(1) provides that the Board may, “where it otherwise has the jurisdiction, order the payment to any given person of an amount of money up to the greater of $10,000 and the monetary jurisdiction of the Small Claims Court ($25,000).”

Section 207(2) of the Act, provides that “a person entitled to apply under the Act but whose claim exceeds the Board’s monetary jurisdiction may commence a proceeding in [court] for an order requiring payment of that sum and…the court may exercise any power that the Board could have exercised if the proceeding had been before the Board and within its monetary jurisdiction”.

The Act does not grant the Board exclusive jurisdiction over all claims of non-repair against a landlord. Rather, the Board has jurisdiction over a tenant’s or former tenant’s claim for damages (as well as other claims within the Board’s authority) where the “essential character of the claim” is for non-repair and within its monetary jurisdiction.

Per s. 207(2) of the Act, the Court of Appeal held that since the estate claimed damages exceeding the monetary jurisdiction of the Small Claims Court, and therefore exceeded the jurisdiction of the Board, the appellants were entitled to commence their proceeding in the Superior Court. Furthermore, through the operation of section 207(2), the court would be able to make any order the Board could have made in addition to any relief it could grant in a court proceeding.

(2) The Limitation Period for Applications to the Board Does Not Apply

Yes. The motion judge concluded that, although the estate’s claim exceeded the monetary jurisdiction of the Board, the action had to be commenced within the one-year limitation period for applications to the Board under the Act (s. 29(2)) before the court could assume jurisdiction. In reaching this conclusion, the motion judge applied the decision in Efrach v. Cherishome Living, 2015 ONSC 472, [2015] O.J. No. 293 (Div. Ct.), where the court reasoned that after the expiry of the one-year limitation period for making a claim to the Board, the claim could not be transferred to the Superior Court since that court can only exercise powers that the Board could have exercised if the proceeding had been before the Board.

The Court of Appeal expressed no opinion on the result in Efrach, but disagreed with the conclusion that the one-year limitation period for applications to the Board applied. The Court of Appeal reasoned that there is no basis for importing the limitation period prescribed by the Act for applications to the Board into an action of this kind. The limitation of actions is governed by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. Section 19 of the Limitations Act, 2002 lists the limitation periods, (including section 38(3) of the Trustee Act, R.S.O. 1990, c. T.23), which requires a tort action by an estate to be commenced within two years of the deceased’s death. The schedule in section 19 of the Limitations Act was applicable in this case.

Since the appellant commenced the action within two years of the deceased’s death (and within two years of the alleged slip and fall), the action is not barred by the limitation period. Accordingly, the appeal was allowed, the Superior Court has jurisdiction over the action.

Wellman v. TELUS Communications Co., 2017 ONCA 433

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

Counsel:

G.L.R. Ranking and A. Borrell, for the appellant

J.P. Rochon, P. Jervis, L. Fenech and E. Karp, for the respondent

Keywords: Class Actions, Consumer Contracts, Arbitration Clauses, Enforceability, Consumer Protection Act, 2002, S.O. 2002, c.30, Sched. A, Arbitration Act, 1991, S.O. 1991, c. 17, Griffin v. Dell Canada Inc., 2010 ONCA 29, 98 O.R. (3d) 481, Seidel v. TELUS Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531

Facts:

Consumers and business customers brought claims against TELUS that became the subject of class proceedings. Accordingly, one motion before the judge was to certify class proceedings. Wellman, the representative plaintiff, claimed that TELUS overcharged customers during the class period by rounding up calls to the next minute without disclosing this practice.

TELUS’s contracts contained standard terms and conditions, including a mandatory arbitration clause. TELUS conceded that s. 7(2) of the Consumer Protection Act enabled consumer claims to proceed to court notwithstanding any arbitration clause. It submitted, however, that the claims of business customers were governed by the mandatory arbitration clause, in accordance with s. 7(5) of the Arbitration Act, and therefore ought to be stayed. TELUS moved for a partial stay of proceedings with respect to the claims of the business customers.

The motion judge refused to stay the business customer claims, relying on the authority of the Ontario Court of Appeal in Griffin. There, the Court refused to grant a partial stay of non-consumer claims on the basis of s. 7(5) of the Arbitration Act, which gives the court discretion to determine whether it is reasonable to separate the matters dealt with in an arbitration agreement from the other matters in the litigation. The motion judge concluded that it was not reasonable to separate the matters. She accordingly certified the class, including the business customers.

TELUS initially appealed to the Court of Appeal to reconsider the Court’s decision in Griffin, which was rejected. TELUS subsequently appealed the motion judge’s ruling in this case, arguing that Griffin has been superseded or modified by the Supreme Court’s decision in Seidel, and that applying the reasoning in Seidel, a partial stay ought to have been granted. The motion judge’s interpretation of the Arbitration Act in light of Griffin and Seidel was therefore at issue in this appeal.

Issues:

(1) Was the motion judge correct in applying Griffin to determine whether a partial stay of proceedings should be granted under s. 7(5) of the Arbitration Act for business customer claims, or should she have applied Seidel?

(2) Does the presence of an arbitration clause oust the Ontario court’s jurisdiction over the dispute?

(3) Did the motion judge err in deciding whether a stay should be issued in the context of a class proceedings preferability analysis?

Holding:

Appeal dismissed.

Reasoning:

(1) Yes. After a thorough review of the jurisprudence and relevant legislation, the Court found that while both Griffin and Seidel involved arbitration clauses in the context of a proposed class proceeding, Seidel was decided under the relevant laws of British Columbia, which differ in material ways from those of Ontario. Seidel emphasized that, in determining whether a court action can proceed in the face of an agreement to arbitrate, it is essential to consider the legislation that applies in the relevant jurisdiction. Griffin remains good law in respect of proceedings commenced in Ontario, and has not been overtaken by Seidel.

(2) No. There is nothing in Ontario’s Arbitration Act, which governs domestic arbitrations, to suggest that an arbitration clause removes or ousts the court’s jurisdiction over a dispute. Similarly, the substantive right to arbitrate does not supersede the procedural right to a class proceeding, contrary to TELUS’s argument. The question of whether the right to arbitrate must be given effect is governed by the domestic legislation of Ontario and cannot be determined in a legislative vacuum. Under the Ontario Arbitration Act, jurisdiction is specifically retained in the situations covered by s. 7(5).

(3) No. Notwithstanding that the motion judge conducted these two analyses under the same heading of “Preferable Procedure”, the question of the enforceability of the arbitration agreement was determined without resort to the Class Proceedings Act. She did not refuse a stay of proceedings based on the conclusion that a class action would be a “preferable procedure”.

Blair J.A., concurring in the result, additionally raised questions about the correctness of Griffin as it related to a partial stay of the non-consumer claims. While acknowledging the binding effect of Griffin, Blair J.A. posed two questions for consideration:

First, may the words “other matters” in s. 7(5) of the Arbitration Act – when considered in the context of s. 7 as a whole and the purposes of that Act – be read in a way that cross-pollinates the partial-refusal-to-stay power from a single arbitration agreement context to other arbitration agreements involving different parties and containing arbitration clauses that are otherwise valid and enforceable? Or do “other matters” refer to other matters arising between the same contracting parties but that are not covered by the arbitration agreement between them?

Second, Blair J.A. asked whether the Class Proceedings Act, 1992, S.O. 1992, c. 6 (a procedural rights statute) may be used to override the provisions of the Arbitration Act affording contractual parties the right to agree to binding arbitration (a substantive right)?

Without offering answers to these two questions, Blair J.A. sought to flag these two considerations in order to explain his reservations with the correctness of Griffin. Ultimately, however, he concluded that these questions were best answered at a later time.

Remicorp Industries Inc. v. Metrolinx, 2017 ONCA 443

[Sharpe, Pepall and Hourigan JJ.A.]

Counsel:

W.J. Earle, for the appellant

D. Cherepacha and K. Gossen, for the respondent

Keywords: Easements, Declaration, Injunction, Abandonment of Easement, Abandonment by Implied Release, Abandonment by Operation of Law, Remedies

Facts:

Remicorp and Metrolinx had competing claims for relief relating to an easement – specifically one contested easement (“the Access Easement”) and one uncontested easement (“the Maintenance Easement”). Together, the easements provide access for maintenance of railway tracks used by GO Trains and the Union Pearson Express.

The appellant, Metrolinx, sought a declaration that the Access Easement was valid and an injunction requiring the respondent, Remicorp Industries Inc., to remove certain encroachments on it. Remicorp, which owns the lands on which the Access Easement was located, sought a declaration that the Access Easement had been abandoned, extinguished or, in the alternative, that it be relocated.

The application judge accepted Remicorp’s position, finding that the easement was abandoned. Although Remicorp had sought relocation as alternative relief, the application judge ordered that the easement be relocated. Metrolinx appealed on the basis that the application judge erred in concluding that the easement had been abandoned, and in ordering it to be relocated.

Issues:                      

(1) Did the application judge err in concluding that the Access Easement had been abandoned by implied release?

(2) Did the application judge err in concluding that the Access Easement was extinguished by operation of law?

(3) Did he also err in concluding that the Access Easement could be moved?

(4) Is Metrolinx entitled to a remedy for Remicorp’s encroachments on the Access Easement and Metrolinx’s lands?

Holding: Appeal allowed.

Reasoning:

(1) Abandonment by Implied Release

Yes. An easement can be released impliedly. Non-use, coupled with an intention to abandon the easement, may demonstrate implied release, but on its own, non-use is insufficient. Intention to abandon must be proven.

In this case, the application judge erred in this analysis by failing to consider three separate registrations on title that reiterated Metrolinx’s ongoing right of easement for the Access Easement. Second, given that easement rights may have value, there was no evidence of any consideration flowing from Remicorp to Metrolinx in exchange for a release of the Access Easement. Third, the application judge’s holding that the Access Easement be moved elsewhere was inconsistent with the finding that Metrolinx abandoned it. Lastly, any potential acquiescence by Metrolinx was overtaken by the written agreement that provided an express grant to the easement in clear and unambiguous language, which the application judge failed to meaningfully address.

(2) Extinguishment by Operation of Law

Yes. The Court of Appeal, after a substantial review of the authorities, concluded that extinguishment of an easement by operation of law can occur under two circumstances. The first is by statute, which may allow a court to modify or cancel an easement (note that no such legislation exists in Ontario). The second is by operation of common law. Examples of this include unity of ownership or possession of the dominant or servient lands, or the destruction of either. Similarly, the permanent expiry of the purpose for which the easement was granted may extinguish the easement.

Here, the application judge found abandonment based on operation of law by virtue of Metrolinx’s lack of use and lack of need for the Access Easement. The Court of Appeal rejected this view, holding that the express grant put no time limits on the easement. Notwithstanding Metrolinx’s lack of use or need, the purpose for which the Access Easement had been created – access to the railroad tracks – was still in effect.

(3) Relocation of Access Easement

Yes. In considering whether to relocate the Access Easement, the application judge failed to apply the relevant legal principles. Section 119(5) of the Land Titles Act requires proof that modification to an easement will be “beneficial to the persons principally interested in the enforcement of the condition or covenant”, which Ontario case law has held to mean a balancing test between the interests of the applicant and the respondent. In this case, the benefits to Remicorp were difficult to discern, while the detriment to Metrolinx was clear.

(4) Remedy

Yes. The Court held that Metrolinx’s right to the Access Easement continued, and that Remicorp was required to remove the encroachments it had built.

McGinn v. Evanshen, 2017 ONCA 431

[Strathy C.J.O., Cronk and Pepall JJ.A.]

Counsel:

M. Gelowitz and L. Franschman, for the appellant

B. Sachdeva, for the respondent

Keywords: Contracts, Shareholder Agreements, Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633

Facts:

The respondent was a senior management figure at Indwisco Limited for over 23 years. The most current shareholders’ agreement (“the Agreement”) gave the original shareholders, Peter and Al, the right to purchase the other’s if the other wished to sell, became incapable, or died. If the other shareholder declined or was unable to purchase the shares, the respondent was given the right to do so.

Peter was diagnosed with a terminal illness, at which time he transferred his shares to himself and his wife (the appellant), jointly, with right of survivorship. The motion judge accepted evidence that this was done to avoid taxes or probate fees upon his death. However, the Agreement contained a provision that limited the appellant’s rights in relationship to those shares. For all other purposes, those shares were Peter’s alone.

Following Al’s death, the respondent argued that on Peter’s death, he was entitled to purchase the shares held jointly by Peter and the appellant. Peter and the appellant took a contrary position and sought a declaration that the respondent had no right to purchase the shares on Peter’s death. Peter died shortly thereafter.

The motion judge resolved the issue in the respondent’s favour, after considering the terms of the Agreement in light of the factual matrix in which it was executed. She rejected the appellant’s submission that her ownership of the jointly held shares, by right of survivorship, gave her independent status as a shareholder, holding instead that the respondent could purchase the shares on Peter’s death. The wife appealed.

Issues:

(1) Did the motion judge commit an extricable error of law in her interpretation of the shareholders’ agreement, or a palpable and overriding error in her assessment of the evidence?

Holding: Appeal dismissed.

Reasoning: (1) No. The Court dismissed the three arguments put forward by the appellant:

(i) The appellant submitted that the motion judge failed to recognize that the Agreement contained protection for the “founders” (Al and Peter), and that the respondent was not entitled to acquire the “founder’s shares”. The Court dismissed this on the basis that there was nothing in the factual matrix to suggest that the concepts of “founders” or “founder’s shares” played a part in the formation of the Agreement. There was nothing to prevent the respondent from increasing his shareholdings if Peter and Al were unwilling or unable (by way of death, for example) to exercise their own options.

(ii) The appellant submitted that the motion judge should have recognized that the appellant was a shareholder, pursuant to her right of survivorship. The Court found the motion judge’s interpretation of the evidence to be reasonable; a sole provision designed for Peter’s tax and estate planning did not alter the rest of the Agreement’s provisions, which did not contemplate what the appellant proposed.

(iii) Lastly, the appellant submitted that the motions judge erred in her interpretation of the option clause of the Agreement. The motion judge ruled that the option clause contemplated a scenario with a sole surviving shareholder, which therefore gave the respondent the right to purchase the shares. The Court held that the motion judge’s interpretation, in light of the factual matrix, was reasonable and therefore entitled to deference.

Berman v. Berman, 2017 ONCA 447

[Epstein J.A.]

K. Maurina, for the appellant

D. Frodis, for the respondent

Keywords: Family Law, Civil Procedure, Appeals, Security for Costs

Facts:

The parties were married on July 31, 2011. Their daughter was born in February 2013. The parties separated on December 30, 2013. In July 2014, Rogers J. awarded the mother (the respondent) sole custody of the daughter. However, the trial judge ordered that the daughter remain with the father (the appellant) on some weeknights and some weekends. The trial judge also ordered the father to pay $682 in monthly child support, as well as an additional $5,014 in arrears. The mother was then ordered to make an equalization payment of $44,569.26 to the father. Finally, the trial judge awarded the mother costs of $132,000 plus HST. The father brought a motion for an extension of time in which to perfect the appeal. The mother brought a motion for security of costs.

Issue:

(1) Is an extension of time appropriate?

(2) Should there be an order for security of costs?

Holding: The appellant’s motion was granted. The respondent’s motion was dismissed.

Reasoning:

(1) Yes. The delay was a modest one, and it was explained by the fact that there was a long delay between the start of trial and the release of the trial judgment. The respondent’s counsel agreed that there was no principled basis on which to oppose the motion.

(2) No. To award security costs under r. 61.06(1)(a) of the Rules of Civil Procedure¸ R.R.O. Reg. 194, there must be a good reason to believe both that the appeal is frivolous and vexatious, and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. While the father faces an “uphill battle” in his appeal, the judge did not believe the appeal to be frivolous and vexatious. Similarly, the record showed that the father has the ability to pay the costs of the appeal, as he has an income of $75,000 a year, as well as a reputation as a successful car salesman.

Hercules Moulded Products Inc. v. Foster, 2017 ONCA 445

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

Counsel:

M. Carlson, for the appellant

C. Kuehl, for the respondents

Keywords: Real Estate, Insurance Law, Title Insurance, Failure to Disclose, Actual Loss

Facts:

Hercules had obtained title insurance from Stewart with a “Commercial Lender Endorsement” to protect its security, which was a mortgage granted by the owner of the Windsor properties to secure money lent to it by Hercules. The mortgage transaction closed in February 2006 and the title insurance policy (the “Policy”) was issued the same month. Before Hercules’s mortgage transaction closed, Hercules was notified of an application brought by the City of Windsor (the “City”) for an order allowing the City to fill in the excavation on one of the Windsor properties. The court issued an order allowing the City to fill in the excavation. The City did so and added the cost, over $500,000, to the tax bill for the property.

The mortgage went into default in or around 2007 and Hercules began sale proceedings in 2009. In July 2010, Hercules entered into an agreement of purchase and sale with Farhi Holdings (“Farhi”). One week before closing, Farhi sent a requisition letter indicating that Hercules had not complied with 13 development agreements with the City of Windsor that were registered on title and complained of an encroachment extending from one property onto the other. Farhi refused to close as no satisfactory response was made to these requisitions.

Hercules made claims against Stewart related to: (1) the cost of filling in the excavation, added to the tax bill for the property; (2) the development agreements registered against the title; and (3) the encroachment.

The motion judge rejected all the claims on many different grounds.

Issues:

(1) Did the motion judge err in rejecting the claim for the excavation?

(2) Did the motion judge err in rejecting the claim for the development agreements and the encroachment?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court found coverage was excluded under section 3(b) of the Policy as the application by the City was a matter (a) Not known to Stewart on the date of the Policy; (b) Not registered in the public records that a normal title search would disclose; (c) Known to Hercules before the mortgage transaction closed; and (d) Not disclosed to Stewart prior to the date the insured claimant became insured under the Policy.

(2) No. Actual loss was required to sustain a claim under the language of the Policy. The court held that the motion judge’s conclusions that the development agreements and the encroachment did not cause any loss or damage were findings open to him on the evidence. This was sufficient basis to conclude that Stewart was not obliged to indemnify Hercules, and there was no need to explore further the motion judge’s other findings pursuant to this issue.

Kondratiev v. Boyko, 2017 ONCA 444

[Hourigan, Benotto and Roberts JJ.A.]

Counsel:

M. Wright and G. Cantin, for the appellants

O. Pasparakis and A. Campbell for the respondents

Keywords: Civil Procedure, Striking Pleadings, Rules of Civil Procedure, Rule 21, Limitation Periods, Abuse of Process, Limitations Act, 2002

Facts:

The appellant plaintiffs, Alexey Kondratiev and Smart Games Canada, Inc., appealed the order of the motion judge striking their statement of claim, without leave to amend, pursuant to r. 21 of the Rules of Civil Procedure.  The statement of claim was struck on the grounds that it was time-barred and an abuse of process.

Issues:

(1) Was the motion judge correct in striking the appellants’ entire statement of claim without leave to amend?

Holding: Appeal allowed, in part.

Reasoning:

(1) No. The unanimous Court of Appeal stated that paragraph 39 of the statement of claim should not have been struck because it was not “doomed to fail” as the motion judge found with respect to the other pleaded causes of action, nor in those circumstances would it constitute an abuse of process. The motion judge did not consider whether the new claim against the respondent defendant, Oleg Boyko, arising out of the dissolution of one of the corporate defendants in 2013, as set out in paragraph 39 of the statement of claim, was also statute-barred or an abuse of process. The claim in paragraph 39, which, for the purpose of a motion under rule 21, the motion judge had to take as true, was not statute-barred by s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B because the claim was not discovered by the appellants until October 2013. The respondent, in their notice of motion, only sought to strike paragraphs 26 to 38 of the statement of claim as statute-barred and similarly focused their abuse of process grounds on the argument that the claims were out of time.

The Court found that the other factual allegations in paragraphs 26 to 38 of the statement of claim made against the respondent with respect to events arising before 2013 were identical to the allegations made against him in a proceeding against related parties in 2009, in which he was not named as a party. The Court stated that was clear on the face of the pleadings that, as the motion judge determined, those pre-2013 claims against the respondent were discovered more than two years before the commencement of this action. The Court found that the motion judge was open to reject, as not credible, the appellants’ evidence that the 2013 claims were not discovered until 2015.

Ivic v. Lakovic, 2017 ONCA 446

[Hoy A.C.J.O., Blair and Hourigan JJ.A]

Counsel:

B.T. Verbanac and M. Machado, for the appellant

S. Winny, for the respondent

Keywords: Sexual Assault, Vicarious Liability, Employer Liability, Bazley v. Curry

Facts:

The appellant attended a party. She was intoxicated and felt unwell. The appellant’s friend called her a taxi, which subsequently picked the appellant up from the party. The appellant alleges that the taxi driver sexually abused her inside the taxi.

The appellant sued the taxi driver and the taxi company itself, claiming that the latter was vicariously liable for the acts of the driver. The motion judge dismissed the appellant’s claim against the taxi company.

Issue:

(1) Should the taxi company be vicariously liable for the taxi driver’s actions?

Holding: Appeal dismissed.

Reasoning:

(1) No. When assessing vicarious liability for an unauthorized, intentional wrongdoing, courts must look to the factors listed in Bazley v. Curry [1999] 2 S.C.R. 534. Those include:

(i) The opportunity that the enterprise afforded the employee to abuse his or her power;

(ii) The extent to which the wrongful act may have furthered the employer’s aims;

(iii) The extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise;

(iv) The extent of power conferred on the employee in relation to the victim; and

(v) The vulnerability of potential victims to wrongful exercise of the employee’s power.

In order for there to be a finding of vicarious liability, there must be a strong connection between what the employer was asking the employee to do and the wrongful act. There was no such connection in this case.

The first factor is the opportunity the taxi company afforded the driver to abuse his power. Such opportunity was negligible – While drivers have an opportunity for misconduct, such opportunity is not intimately connected to their functions.

As to the second and third factors, the alleged sexual assault did not further the taxi company’s aims in any respect and was not related to friction, confrontation or intimacy inherent in the employer’s aims.

With respect to the fourth factor, the taxi company did not confer any power onto the driver in relation to the appellant.

Finally, while the appellant was vulnerable to the driver, the power the driver allegedly wrongfully exercised was not predicated on his employment.

Floward Enterprises Ltd. (H. Williams and Co.) v. Winberg Estate, 2017 ONCA 448

[Gillese, Huscroft and Trotter JJ.A.]

Counsel:

P. Adam, for the appellant

J. Green for the respondent, Floward Enterprises Ltd.

M. Fawcett, for the respondent, Her Majesty the Queen

Keywords: Civil Litigation, Police Seizure, Ex parte, Criminal Code ss. 490(7) and 490(9)(c), R. v. Canada (Solicitor General) 2002 SCC 75, R. v. Backhouse (2005), 194 C.C.C. (3d) 1

Facts:

Martin Winberg (“Winberg”) bought a diamond and, at his request, the acquaintance agreed to store the diamond at his home. Later, the acquaintance told Winberg that his friend, Brian Colyer (“Colyer”), had stolen the diamond, and the thefts were promptly reported to the Toronto Police Service. During the police investigation, the police located the diamond at the respondent, Floward Enterprises Ltd., operating as H. Williams & Company (the “Pawnbroker”).  The police believed that Colyer had stolen the diamond and then pawned it to the Pawnbroker, and they took possession of the diamond.

Around the time that the criminal proceedings against Colyer were concluded, the Pawnbroker learned from the police that Winberg, who had by that point passed away, had a potential interest in the diamond because he was the person from whom the police believed the diamond had been stolen. The police, in a letter addressed to both the lawyers for the deceased and the Pawnbroker, explained that the prosecution against Colyer was complete, the police no longer needed the diamond, and there were “at least two adverse claims” to it. The Pawnbroker wrote letters to the police demanding the immediate release of the diamond to it, asserting its entitlement to the diamond.  The police did not comply.

The Pawnbroker brought an application under ss. 490(7) and (9)(c) of the Criminal Code, R.S.C. 1985, c. C-46 (the “Application”), seeking a court order requiring the police to return the diamond to it.  The Pawnbroker did not give the appellant, the Estate of Martin Winberg, notice of its Application.  The written material filed on the Application was brief and did not mention the Estate or the fact that the Estate was laying claim to the diamond.

When the application was heard, the Pawnbroker did not tell the court that there was another interested party who might challenge the return of the diamond to it. The application was granted, and by order (“the Order”), the police were required to release the diamond to the Pawnbroker. The police forwarded a copy of the Order to the Estate.

The Estate moved quickly to appeal, arguing that the application judge erred in law in deciding the Application without requiring that notice be given to it. The Crown took a limited role in the appeal, claiming its sole interest was to protect the integrity of the s.490 process and submitting that the Pawnbroker failed to make full and frank disclosure.

Issues:

(1) Should the Order be set aside as a result of the Application being decided in the absence of full and frank disclosure by the Pawnbroker?

(2) If so, should the Court accede to the Estate’s request for an order than the diamond be returned to it?

Holding: Appeal allowed.

Reasoning:

(1) Yes. Justice Gillese, writing for the unanimous Court of Appeal, stated that the Pawnbroker met the notice requirements in s. 490(7) but did not make full and frank disclosure of material facts including the Estate’s claim of interest in the diamond.  S. 490(7) allows for a person who has had an item seized by the police to apply to the Court for an order to have it returned, and on a plain reading, only requires the Attorney General to be notified. The Court stated that s. 490(7) needed to be interpreted within the overall purpose of s.490 as a whole. The Court cited the Court of Appeal’s decision in R. v. Backhouse (2005), 194 C.C.C. (3d) 1, at paras. 98-114 where it was found that the overall purpose of s.490 is to ensure that, subject to judicial supervision, police return a seized item to the lawful owner or person lawfully entitled to its possession when its continued detention is not required for the purposes of an investigation or court proceeding.

The Court stated that although the Pawnbroker met the notice requirements in s. 490(7), the Application was made on an ex parte basis. The Court cited the Supreme Court of Canada’s decision in Ruby v. Canada (Solicitor General), 2002 SCC 75, [2002] 4 S.C.R. 3, at para. 25, where it was stated that:

“Ex parte, in a legal sense, means a proceeding, or a procedural step, that is taken or granted at the instance of and for the benefit of one party only, without notice to or argument by any adverse party.”

The Court found that the Application was taken at the instance of the Pawnbroker and for its benefit only.  The Attorney General was not an adverse party – it was a neutral third party, meaning no adverse party had notice and none was present to argue at the Application.  Therefore, the Application was brought and decided on an ex parte basis.

The Pawnbroker failed to make full and frank disclosure. In Ruby, the SCC stated at para. 27 that:

“In all cases where a party is before the court on an ex parte basis, the party is under a duty of utmost good faith in the representations that it makes to the court.  The evidence presented must be complete and thorough and no relevant information adverse to the interest of that party may be withheld.  Virtually all codes of professional conduct impose such an ethical obligation on lawyers.”

The Court stated that in order for the court to properly fulfill its supervisory role and achieve the purpose of s. 490 – to see that seized things are returned to their lawful owners or those lawfully entitled to their possession once they no longer are required for any criminal investigation or proceeding – judges hearing applications under s. 490(7) must be able to rely on applicants to have made full and frank disclosure.  The Court said that only through such disclosure can the court make informed decisions about, among other things, whether other interested parties must be given notice of the proceeding. The Pawnbroker did not fulfill this requirement in failing to provide disclosure of the interest of the Estate in the diamond.

(2) No. The Court stated that there were serious, complicated factual and legal disputes between the Estate and the Pawnbroker that must be resolved to determine entitlement to the diamond, and that the record before the Court was wholly inadequate to make such a determination.

Short Civil Endorsements

Sutherland Lofts Inc. v. Peck, 2017 ONCA 439

[Weiler, Pardu and Roberts JJ.A.]

Counsel:

T. Halinski and D. Neligan, for the appellants

V. M’Garry, for the respondent

Keywords: Costs Endorsement

Fierro v. Fierro Estate (Appeal Book Endorsement), 2017 ONCA 438

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

G. Gryguc, for the appellant

G.G. Walsh, for the respondent, Canada Lend Inc.

R. Migicovsky, for the respondent, Rose and Rose

Keywords: Appeal Book Endorsement

Lin v. Hayes (Appeal Book Endorsement), 2017 ONCA 437

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

A. Rachlin, for the appellant

R.S. Baldwin, for the respondent, Kristie King

S. Pitano, for the respondents, Qing Bin Lin and Ying Ling Yan

Keywords: Appeal Book Endorsement

Cowan v. General Filters Inc., 2017 ONCA 456

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

C.A. Chekan, for the appellant

E. Key and R.K. MacGregor, for the plaintiffs/respondents

Keywords: Interlocutory versus Final Order, Subpoena

Criminal Decisions

R. v. Dunstan, 2017 ONCA 432

[Doherty, Blair and Lauwers JJ.A.]

Counsel:

F. Addario and A. Burgess, for the appellant

N. Devlin, for the respondent

Keywords: Criminal Law, Trafficking, Proceeds of Crime, Expert Spectrographic Voice Identification Analysis, Canadian Charter of Rights and Freedoms, Section 8, Courts of Justice Act, Section 136(3), Endean v. British Columbia, 2016 SCC 42

R. v. Reid, 2017 ONCA 430

[Watt, van Rensburg and Pardu JJ.A]

Counsel:

I.R. Smith and A.J. Ohler, for the appellant

T. Gilliam, for the respondent

Keywords: Criminal Law, Trafficking, Proceeds of Crime, Confidential Informant, Tele-warrant, Information to Obtain, Cross-Examination, Garofoli Application, R. v. Garofoli, [1990] 2 S.C.R. 1421, R. v. Pires; R. v. Lising, 2005 SCC 66, Criminal Code, Section 487.1, R. v. Clark, 2017 SCC 3, R. v. Debot, [1989] 2 S.C.R. 1140

R. v. Srikanthan, 2017 ONCA 435

[Rouleau, Trotter and Paciocco JJ.A.]

Counsel:

B. Vandebeek, for the appellant

A. Alyea, for the respondent

Keywords: Criminal Law, Jury Instructions

R. v. Arnaud, 2017 ONCA 440

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

Counsel:

R.C. Bottomley and M. Quenneville, for the appellant

M. Potrebic, for the respondent

Keywords: Criminal Law, Importing Narcotics, R. v. W.(D.), [1991] 1 S.C.R. 742

R. v. Gordon, 2017 ONCA 436

[Doherty, Miller and Paciocco JJ.A.]

Counsel:

P. Calarco, for the appellant

M. Fawcett, for the respondent

Keywords: Criminal Law, Right to Trial, Delay, Canadian Charter of Rights and Freedoms, Section 11(b), R. v. Jordan, 2016 SCC 27, R. v. Morin, [1992] 1 S.C.R. 771

R. v. M.N. (Publication Ban), 2017 ONCA 434

[Weiler, Feldman and Huscroft JJ.A.]

Counsel:

H. Pringle, for the appellant

M. Campbell, for the respondent

Keywords: Criminal Law, Child Pornography, R. v. Morelli, 2010 SCC 8

R. v. Heron, 2017 ONCA 441

[MacPherson, Blair and Epstein JJ.A.]

Counsel:

A. Furgiuele, for the appellant

D. Quayat, for the respondent

Keywords: Criminal Law, Smuggling, Duties, Breach of Trust, CPIC Check

R. v. Monckton, 2017 ONCA 450

[MacFarland, Pardu and Trotter JJ.A.]

Counsel:

R. Boggs, for the appellant

C. Harper, for the respondent

Keywords: Criminal Law, Second-Degree Murder, Child Abuse, Jury Instruction, Expert Evidence, Mens Rea, Inconsistent Verdicts, Parole Sentence, Aboriginal Status

R. v. Pasian, 2017 ONCA 451

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

Counsel:

J. Dawe, for the appellant

A. Weiler and C. Otter, for the respondent

Keywords: Criminal Law, Trafficking, Firearm Possession, Information to Obtain (ITO), R. v. Grant, 2009 SCC 32

R. v. Tmenov, 2017 ONCA 454

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

Counsel:

J. Stilman, for the appellant

N. Thomas, for the respondent

Keywords: Criminal Law, Sentencing

R. v. Mannette, 2017 ONCA 449

The text of this decision is subject to a statutory non-publication order. Full text of the reasons may be obtained at the Court of Appeal Registry Office.

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.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 23 – 26, 2017)

Good afternoon,

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

In an important employment law decision in Brake v PJ-M2R Restaurant Inc., a majority of the Court clarified that while employment income earned during the notice period of a wrongful dismissal is generally treated as mitigation of loss, income earned during the notice period are not always deductable if they fall within one of the following three categories: First, EI benefits are not deducted. Second, statutory entitlements (under the ESA, for example) are not subject to mitigation. Third, where an employee commits to full-time employment, but the contract permits simultaneous alternate employment, and the first employer terminates her without notice, any income from the second employer that she could have earned while continuing with the first is not deductible. All of these reasons in the present case supported the trial judge’s determination not to deduct from the plaintiff’s damages aware her income derived from a much inferior job that she took after she was constructively dismissed.

The majority left open the question of when supplementary employment income and/or income obtained in the balance of the notice period rises to a level that it, or a portion of it, should be considered as a substitute for the amounts that would have been earned under the original contract, and, accordingly, be treated as deductible mitigation income.

Feldman, J.A., concurring in the result, went further, and held that where a wrongfully dismissed employee is effectively forced to accept a much inferior position because no comparable position is available, the amount she earns in that position is not in mitigation of damages and need not be deducted from the amount the employer must pay. This is because, at law, the employee is not obligated to accept the much inferior position in mitigation of damages.

In Gilmor v. Nottawasaga Valley Conservation Authority, the Court of Appeal applied Dunsmuir in concluding that the appropriate standard for review on an appeal from a decision of the Commissioner under the Conservation Authorities Act is reasonableness.  In so doing, the Court overturned the Divisional Court and restored the Commissioner’s decision not to permit construction of a building in a flood plain.

In Belanger v Sudbury (Regional Municipality), the Court reviewed the statutory defences to a municipality being found negligent under s.284(1) of the Municipal Act for failing to keep a roadway or highway in a reasonable state of repair. The damage award in that sad case of catastrophic injury was agreed at $12 million.

Other topics covered include the retroactivity/retrospectivity of municipal by-laws, contractual interpretation, repair and storage liens (no limitation period applicable to possessory liens), patent infringement, and leave to commence fourth party claims in the construction law context.

Have a great weekend.

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

Table of Contents

Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402

Keywords: Employment Law, Wrongful Dismissal, Constructive Dismissal, Employment Standards Act, Notice, Statutory Entitlements, Damages, Mitigation

Gilmor v. Nottawasaga Valley Conservation Authority, 2017 ONCA 414 

Keywords: Municipal Law, Administrative Law, Standard of Review, Correctness, Reasonableness, Dunsmuir v. New Brunswick

Belanger v Sudbury (Regional Municipality), 2017 ONCA 428

Keywords: Torts, Negligence, MVA, Contributory Negligence, , Municipal Liability, Highway Maintenance, Municipal Act, R.S.O. 1990, c. M.45, s. 284, Lloyd v. Bush, 2017 ONCA 252, , Frank v Central Elgin (Municipality), 2010 ONCA 574 

Burlington (City) v Burlington Airpark Inc., 2017 ONCA 420

Keywords: Municipal Law, Statutory Interpretation, Retroactivity, Retrospectivity, Legislation Act, 2006, S.O. 2006, c.21, Sch. F., s.52, Municipal Act, 2001, S.O. 2001, c. 25, s.440

OrthoArm Incorporated v GAC International LLC, 2017 ONCA 418

Keywords: Intellectual Property, Patents, Infringement, Contracts, License, Costs, Rules of Civil Procedure, Rule 57.01

Eden Agency Inc. v. Palinkas, 2017 ONCA 421

Keywords:  Contracts, Bailment, Repair and Storage Liens Act, R.S.O 1990, c. R.25, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

TMS Lighting Ltd. V. KJS Transport Inc., 2017 ONCA 427

Keywords: Damages, Tort Damages, Evidence, Deference

56 King Inc. v. Aviva Canada Inc., 2017 ONCA 408

Key Words: Insurance Law, Appraisals, Insurance Act, s. 128

Bentivoglio v Groupe Brigil Construction, 2017 ONCA 413

Keywords: Civil Procedure, Construction Law, Third and Subsequent Party Claims, Leave to Commence, Nunc Pro Tunc, Construction Lien Act, s. 56

Allied Properties Reit v 1064249 Ontario Inc., 2017 ONCA 419

Keywords: Real Property, Municipal Law, Zoning, Legal Non-Conforming Use, Injunctions, Standard of Review

Best Source Inc. v. International Industries Corporation, 2017 ONCA 411

Keywords: Contracts, Assignment, Contractual Interpretation, Standard of Review

For Civil Endorsements, click here.

For Criminal and Ontario Review Board Decisions, click here. 

Civil Decisions:

Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402

[Gillese, Pepall, and Feldman JJ.A.]

Counsel:

J.F. Lalonde, for the appellant

M.V. Peters, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Constructive Dismissal, Payment In Lieu of Notice, Employment Standards Act, Statutory Entitlements, Damages, Mitigation, Michaels v. Red Deer College, [1976] 2 S.C.R. 324, Sylvester v. British Columbia, [1997] 2 S.C.R. 315, Jack Cewe Ltd. v. Jorgenson, [1980] 1 S.C.R. 812, Karas v. Rowlett, [1944] S.C.R. 1

Facts:

A long-serving McDonald’s restaurant manager, Ms. Brake, who had received “excellent” performance reviews for over a decade, was dismissed from her position without notice or payment of her statutory entitlements. She successfully sued for wrongful dismissal and was awarded damages representing 20 months’ compensation in lieu of notice, inclusive of statutory severance under the Employment Standards Act. The employer appealed.

Issues: Did the trial judge err:

(1) By failing to give adequate reasons for his findings of fact and credibility determinations?

(2) In finding that Ms. Brake had been constructively dismissed?

(3) By failing to find that Ms. Brake’s decision to not accept the offer of continued employment as a First Assistant amounted to a failure to mitigate her damages, thus disentitling her to any damages?

(4) In setting the notice period at 20 months?

(5) In his treatment of mitigation during the notice period?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The trial judge articulated the relevant legal principle, reviewed the evidence, made his findings, and indicated how he applied the legal principles in light of those findings. The trial judge did not make a palpable and overriding error in his findings. Accordingly, the first ground of appeal was dismissed.

(2) No. When the appellant offered Ms. Brake the non-supervisory position of First Assistant, with “meaningfully inferior benefits,” or to face termination, it unilaterally made a substantial or fundamental change to her employment contract, and in so doing, it constructively dismissed her.

(3) No. A reasonable person in Ms. Brake’s position would not have been expected to accept the demotion to First Assistant. Since there was no palpable and overriding error in the finding of law and fact, the third ground of appeal was dismissed.

(4) No. The trial judge based the reasonable notice period of 20 months on the Bardal factors. The trial judge added seven years of full-time service at a previous McDonald’s franchise with the thirteen years of actual service with PJ-M2R. The trial judge’s finding in this regard was owed considerable deference.

(5) No. First, there is no “magic formula” that an employee must follow when making reasonable efforts to obtain other employment and thereby mitigate her loss. When an employer alleges that a former employee has not reasonably mitigated his or her losses, “the question is whether [the employee] has stood idly or unreasonably by, or has tried without success to obtain other employment:” Michaels v. Red Deer College, [1976] 2 S.C.R. 324, at p. 331. The fact that Ms. Brake did not apply for other restaurant management positions does not mean that she did not make reasonable efforts to mitigate, as she was entitled to consider her long-term interests.

Second, the trial judge did not err when he did not reduce the damages award by the amounts that Ms. Brake received during the notice period, or the “amounts received in mitigation of loss.”

The controlling rule here is that an employee who is dismissed without reasonable notice is entitled to damages for breach of contract based on the employment income the employee would have earned during the reasonable notice period, less any amounts received in mitigation of loss during the notice period: Sylvester v. British Columbia, [1997] 2 S.C.R. 315, at paras. 14-17.

Gillese J.A. (Pepall J.A. concurring) disagreed with the trial judge’s interpretation of analyzing loss mitigation, stating that the court does need to consider whether income received from a job that was inferior to the one from which the employee was dismissed was mitigation income.

The controlling general principle here is that employment income earned during the notice period is generally to be treated as mitigation of loss. The income earned by Ms. Brake during the notice period need not be deducted from the damages award for the following three reasons:

(a) Employment Income benefits are not to be deducted from damages awarded for wrongful dismissal. Jack Cewe Ltd. v. Jorgenson, [1980] 1 S.C.R. 812, at p. 818.

(b) Statutory entitlements are not subject to mitigation. Any employment income earned during a statutory entitlement period is not deductible as mitigation income. This is because the Employment Standards Act benefits are minimum entitlements and may not be reduced whether sought in an action or by the administrative route. Boland v. APV Canada Inc., (2005), 250 D.L.R. (4th) 376 at paras. 21-22.

Gillese J.A. was of the view that where a blended damages award is made on the basis of wrongful dismissal and statutory entitlements, the burden is on the employer to prove what employment income is attributable to the statutory entitlement period and what employment income is attributable to the balance of the notice period. Red Deer College, at p. 331.

(c) During the balance of the notice period, where an employee has committed herself to full-time employment with one employer, but her employment contract permits for simultaneous employment with another employer, and the first employer terminates her without notice, any income from the second employer that she could have earned while continuing with the first is not deductible from her damages.

As Rand J. explained in Karas v. Rowlett, [1944] S.C.R. 1, at p. 8, for income earned by the plaintiff after a breach of contract to be deductible from damages, “the performance in mitigation and that provided or contemplated under the original contract must be mutually exclusive, and the mitigation, in that sense, is a substitute for the other.”

Gillese left open the question as to when supplementary employment income and/or income obtained in the balance of the notice period rises to a level that it, or a portion of it, should be considered as a substitute for the amounts that would have been earned under the original contract, and, accordingly, be treated as deductible mitigation income.

Feldman, J.A., concurring in the result, was of the view that where a wrongfully dismissed employee is effectively forced to accept a much inferior position because no comparable position is available, the amount she earns in that position is not in mitigation of damages and need not be deducted from the amount the employer must pay. This is because the employee was not obligated, at law, to accept such inferior position in mitigation of damages.

Gilmor v. Nottawasaga Valley Conservation Authority, 2017 ONCA 414

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

Alex Gilmor and Tania Gilmor, in person

J. Thomas Curry and Andrew M. Porter, for the intervener, Conservation Ontario

J.A. Olah, for the appellant, Nottwasaga Valley Conservation Authority

S.Blake and J. Glick, for the intervener, Minister of Natural Resources

D. N. Germain, for the respondent, The Township of Amaranth

J. Opolsky and J. Toshach Weyman, Amicus Curiae

Keywords: Municipal Law, Administrative Law, Standard of Review, Correctness, Reasonableness, Dunsmuir v. New Brunswick

Facts:

Alex and Tania Gilmor (“the respondents”) decided to build a home without first obtaining any of the required approvals. Part of their lot is on a floodplain – “hazardous land” within the meaning of the Conservation Authorities Act, R.S.O. 1990, c. C.27 (“CAA”). The land is subject to the control of the Nottawasaga Valley Conservation Authority (“the NVCA”).

The NVCA denied the respondents’ application for approval to build in 2011. The respondents appealed the NVCA’s decision to the Mining and Lands Commissioner, who conducted a hearing de novo in 2013. The Commissioner found that the respondents’ proposed development was neither appropriate nor safe, and consequently denied approval.

The respondents appealed the Commissioner’s decision to the Divisional Court. The Divisional Court allowed their appeal. On the question of standard of review, the Divisional Court acknowledged that reasonableness is normally the standard of review applied to questions of law involving the interpretation of a tribunal’s home statute, but held that the correctness standard applied in this case for two reasons.

First, the court characterized the question before the Commissioner as a matter of general importance to the legal system that was beyond the Commissioner’s expertise. Second, the court stated that the Commissioner’s reliance on safety considerations in rejecting the appellant’s application “amounted to a positive assertion of jurisdiction to scrutinize applications on the basis of safety”, which overlapped with municipal authority to administer the Building Code Act, 1992, S.O. 1992, c. 23 (“BCA”) and possibly the Planning Act, R.S.O. 1990, c. P.13. The court therefore applied a correctness test to the Commissioner’s decision, ultimately allowing the respondents’ appeal.

The NVCA appealed.

Issues:

(1) Was correctness the appropriate standard of review?

(2) If reasonableness was the appropriate standard of review, was the Commissioner’s decision reasonable?

Holding:

Appeal allowed.

Reasoning:

(1) The Appropriate Standard of Review

No. For reasons summarized below, the Court found that reasonableness was the applicable standard of review, not correctness.

The presumption of reasonableness applies

Following the decision of the Supreme Court in Dunsmuir v. New Brunswick, 2008 SCC 9, there are only two standards of review – correctness and reasonableness. The Court of Appeal went on to list a series of cases, including Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47, in which the courts have established that the reasonableness standard applies presumptively when a tribunal is interpreting its home statute or statutes that are closely related to its function. On the contrary, correctness review is confined to a narrow range of cases in which the presumption of reasonableness review is rebutted.

Was the presumption of reasonableness review rebutted?

The Commissioner had considerable institutional expertise when it comes to interpreting and applying the CAA, and relative expertise compared to the court in any event. The mere existence of a right of appeal from the Commissioner’s decision did not rebut the presumption that reasonableness review applies in this case. Dunsmuir limits correctness review to four categories of questions:

  1. constitutional questions;
  2. jurisdictional questions;
  3. questions of general law both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise;
  4. questions concerning the jurisdictional lines between two or more competing specialized tribunals.

When a tribunal is required to decide one of these questions, the presumption of reasonableness review is rebutted. The question raised in this case was whether either of the latter two exceptions applies: whether a general question of law of central importance was raised or whether jurisdictional lines between two or more competing tribunals had to be determined.

Was a question of law of central importance raised?

In order for correctness review to apply, a question of law must be not only a general question of central importance to the legal system as a whole, but also a question that is beyond the tribunal’s specialized expertise. The questions of law arising in this case were not general in nature; they concerned the interpretation of specialized legislation and regulations governing flooding and development which have no impact beyond the specialized administrative regime in which they arise, nor were the answers to these questions beyond the Commissioner’s expertise. 

Did a question concerning jurisdictional lines arise?

Correctness review is required only if it is necessary to determine jurisdictional lines between competing specialized tribunals. The decision impugned in this case arose out of an application to build a home on hazardous land – a floodplain under the jurisdiction of the NVCA at first instance and the Commissioner on appeal. Although the BCA regulation specifically adverted to construction standards for buildings constructed on floodplains, neither the regulation nor the BCA purported to authorize development on floodplains. They simply established the relevant construction standards in the event that development on a floodplain is permitted.

The Court therefore held here that the Divisional Court erred in concluding that the Commissioner’s authority overlapped with authority under the BCA, and that correctness review applied as a result. Reasonableness was in fact the correct standard.

(2) Was the Commissioner’s Decision Reasonable?

Yes. The Court held that the reasonableness of the Commissioner’s decision depended on the answer to two specific questions:

(a) Was the Commissioner’s interpretation of ss. 2 and 3 of O. Reg. 172/06 reasonable?

(b) Was the Commissioner’s exercise of discretion under s. 3 reasonable?

The interpretation of ss. 2 and 3

The Commissioner had to determine whether the respondents were entitled to build a home on their land which is “hazardous land” within the meaning of the CAA. The starting point was the NVCA’s mandate under the CAA and its regulations. Section 28 (1)(c) of the CAA authorized the NVCA to make a regulation prohibiting development, and O. Reg. 97/04 specifically required that the regulation prohibit development in or on hazardous lands, wetlands, and river or stream valleys.

The Commissioner interpreted s. 2(1) as prohibiting development within the floodplain, with the burden on the respondents to convince the Commissioner to permit their development pursuant to the exercise of the discretion under s. 3(1). The Commissioner refused to exercise the discretionary power under the regulation to permit the proposed development.

The exercise of discretion under s. 3

Having established that the respondents’ proposed development was prohibited by s. 2 of the regulation unless the Commissioner exercised her discretion to permit it under s. 3, the Commissioner had to exercise the discretion under s. 3 reasonably. The Commissioner asserted that the discretionary power to permit development “indicates concern regarding any development in the floodway which might damage people and property.” The appellant and interveners submitted that the discretion under s. 3 may be exercised on the basis of safety concerns. The Divisional Court did not deny that safety was a relevant consideration. However, the court insisted that safety could not be elevated to a stand-alone head of jurisdiction in the control of flooding.

The Court of Appeal was of the view that although the Commissioner took an arguably strict approach to public safety by denying approval even though the proposed development met some of the flood safety guidelines, the Commissioner’s decision was not an unreasonable one. The court’s task in conducting reasonableness review is not to weigh the evidence, reach its own judgment, and then use that judgment as a benchmark for assessing the reasonableness of the Commissioner’s decision. Accordingly, the Divisional Court’s order was set aside and the Commissioner’s order was restored. 

Belanger v Sudbury (Regional Municipality), 2017 ONCA 428

[Strathy C.J.O., Cronk and Pepall JJ.A.]

Counsel:

C. Boggs and D. Litwin, for the appellants

P. Pape, S. Chaudhury, J. Morse, and J. Nairn for the respondents

Keywords: Torts, Negligence, MVA, Contributory Negligence, , Municipal Liability, Highway Maintenance, Municipal Act, R.S.O. 1990, c. M.45, s. 284, Lloyd v. Bush, 2017 ONCA 252, , Frank v Central Elgin (Municipality), 2010 ONCA 574

Facts:

On November 22nd, 2000, the respondent, Lisa Marie Belanger was involved in a serious motor vehicle accident during a winter storm while driving on Regional Road 35 (“RR35”) in the Regional Municipality of Sudbury (the “Region”). She sustained catastrophic injuries, and sued the appellant, Region and the City of Greater Sudbury in negligence. She claimed that they had failed to meet their obligations under s.284(1) of the Municipal Act, R.S.O. 1990, c. M.45 as then in force to keep RR35 in a reasonable state of repair. At trial, only liability was in issue, with the parties agreeing that an appropriate quantum of damages was $12 million.

The trial judge ruled in favour of the respondents, holding that the Region was 100% liable for the damages claimed. He found that the conditions on RR35 at the time of the accident constituted a state of non-repair within the meaning of 284(1), and held that but for these conditions, the accident would not have occurred.

On appeal, the Region did not contest the trial judge’s threshold finding that RR35 was in a state of non-repair at the time of the accident, and instead relied on the statutory defences to negligence set out in ss. 284(1.2) and 284(1.3) of the Act. At the time of the accident, those sections provided that a municipality was not liable for failing to keep a highway or bridge in a reasonable state of repair: i) “if it did not know and could not reasonably have been expected to know about the state of repair of the highway or bridge” (s. 284(1.2)); or ii) “if it took reasonable steps to prevent the default from arising” (s. 284(1.3)).

Relying on those statutory defences, the Region appealed from the trial judge’s liability findings. The Region maintained that both defences were established at trial and the trial judge erred in holding to the contrary. The Region also argued that the trial judge erred in his apportionment of liability by failing to find Belanger contributorily negligent.

Issues:

  1. Did the trial judge err in his treatment of the statutory defences in s. 284(1.2) of the Act?
  2. Did the trial judge err in his treatment of the statutory defences in s. 284(1.3) of the Act?
  3. Did the trial judge err in his treatment of the Region’s contributory negligence claim?

Holding: Appeal dismissed.

Reasoning:

(1) Justice Cronk, writing for a unanimous court, found that the trial judge made no palpable and overriding error in making the findings of fact concerning the conditions on RR35 and is entitled to deference on his conclusion that the City had failed to make out the statutory defence n ss. 284(1.2) of the Act. The trial judge held that the Region’s employees reasonably ought to have been expected to know of the emergence of conditions on RR35 giving rise to the risk of a refreeze, conditions that were caused by the Region’s failure to employ the plowing and salting sequence of preventative maintenance works outlined by expert evidence and contemplated by the Region’s own standards and procedures.

The trial judge was entitled to find that the Region was negligent under s.284(1.2) based on the findings of fact he made. The Court of Appeal previously considered the duty of a municipality regarding road maintenance and statutory defences to a claim against a municipality based on its alleged non-repair of a road, including in winter storm conditions in Lloyd v. Bush, 2017 ONCA 252, which confirms that proof of a state of non-repair, as in this case, is not in itself sufficient to establish a municipality’s liability for the alleged failure to meet its duty of road maintenance. The Court cited para. 64 of Lloyd, where the Court of Appeal had held:

Rather, a municipality will only be liable for failing to salt and/or sand and clear the road of snow where it had actual or constructive knowledge that road conditions created an unreasonable risk of harm to users of the highway, and where the municipality unreasonably neglected that risk.

The Court reviewed the findings of fact made by the trial judge regarding the Region’s procedures and maintenance activities, the applicable weather conditions, and the road conditions, and found that there was no palpable and overriding error present. The trial judge was entitled to accept expert evidence that the Region’s crews ought to have known of a risk of a refreeze on RR35 that caused the conditions leading to the accident, and to find that the Region’s failure to follow its own policies that morning were applicable to determining that the Region’s crews ought to have known about the conditions.

(2) Since the trial judge had a clear understanding of the operative standard and was entitled to make the applicable findings of fact, there was no palpable and overriding error. The trial judge’s reasons clearly indicated that he appreciated the requirement that he assess the reasonableness of the road maintenance works actually performed by the Region on the day in question and that he undertook this analysis in dismissing the Region’s defence under s.284(1.3). He relied on the Court of Appeal’s decision in Frank v Central Elgin (Municipality), 2010 ONCA 574 in appreciating that the operative standard was reasonableness, as opposed to perfection, in assessing the Region’s efforts at rectifying the conditions on RR35. The trial judge made specific findings of fact about the nature and timing of the Region’s road maintenance and was entitled to rely on these facts when considering the reasonableness of the Region’s steps.

The Court also dismissed the Region’s argument that the trial judge erred by asking whether the Region could have acted differently rather than assessing whether the Region acted reasonably  in the circumstances it faced. Justice Cronk found that the trial judge had conducted a detailed analysis that did not just rely on consideration of alternative or additional steps, and was entitled to find that the Region had failed to meet its onus to establish the s.284(1.3) statutory defence.

(3) The trial judge was entitled to find that Belanger was not contributorily negligent. The Region argued that the trial judge’s finding was fatally flawed because the trial judge failed to appreciate, as a matter of law, the presumption of negligence against the driver when their vehicle crossed the centre line of the road in expressly noting the presumption in his reasons. Although it would have been preferable for the trial judge to do so, the Region’s invocation of the presumption was specifically addressed at trial, and the Region appeared to have acknowledged that the presumption of negligence was rebutted if Belanger lost control of her car. The Court was of the view that the trial judge had implicitly found the presumption as having been rebutted and was entitled to find no contributory negligence.

Burlington (City) v Burlington Airpark Inc., 2017 ONCA 420

[Feldman, Sharpe and Roberts JJ.A.]

Counsel:

J. Laskin and P. Wells, for the appellants

I. Blue and A. Husa for the respondents

Keywords: Municipal Law, Statutory Interpretation, Retroactivity, Retrospectivity, Legislation Act, 2006, S.O. 2006, c.21, Sch. F., s.52, Municipal Act, 2001, S.O. 2001, c. 25, s.440

Facts:

The appellant, Burlington Airpark Inc., (“Airpark”) owns an aerodome located in the City of Burlington, the respondent in this appeal. Airpark began fill and site alteration work in 2008, and Burlington accepted until 2013 that the work was part of airport improvement and therefore not subject to regulation by a municipality. In 2013, Airpark applied for a severance to obtain land needed to extend the main runway. Burlington subsequently investigated, taking the position that Airpark was conducting a commercial fill operation and that By-Law 6-2003 applied. A consent order was entered into precluding Airpark from conducting any further fill or site alteration work pending the determination of Burlington’s application to enforce compliance with the by-law. Both the Ontario Superior Court and the Ontario Court of Appeal held that Airpark was subject to the by-law.

While the cross-applications were before the courts, Burlington passed a more stringent by-law, By-Law 64-2014. This repealed By-Law 6-2003 and provided no transitional provision to continue it. Burlington requested Airpark file an application under By-Law 64-2014 but Airpark refused, maintaining that the 2014 by-law could not be applied retroactively. Airpark subsequently applied under By-Law 64-2014 to complete its work, but Burlington refused to process the application unless Airpark submitted an application for a permit under By-Law 64-2014 for work done previous to that by-law’s enactment.

In 2015, Burlington commenced an application seeking a mandatory order under the Municipal Act, 2001, S.O. 2001, c. 25, s.440 requiring Airpark to remove all fill deposited since 2008, or, in the alternative, an order requiring Airpark to submit an application under By-Law 64-2014 for all work performed since 2008. Airpark argued that (1) the by-law could not be applied retroactively, that it was (2) constitutionally inapplicable to its operations because Burlington had in effect enacted the by-law to specifically target Airpark’s aeronautics operation, (3) that the by-law was impermissibly vague, and (4) that the application was out of time and barred by the Limitations Act, 2002.

The application judge found in Burlington’s favour, declining to consider the issue of retroactivity while dismissing Airpark’s other arguments.

Issues:

Can Burlington require Airpark to apply for a permit under the 2014 by-law for work done prior to the enactment of that by-law?

Holding:

Appeal allowed.

Reasoning:

No. Justice Sharpe, writing for the Court, found that there is nothing in By-Law 64-2014 that can justify requiring remediation of work conducted, or a situation conducted, before the by-law came into force. The thrust of the by-law is prospective and makes no provision for remediating work done without a permit under By-Law 6-2003. Accordingly, the Court held that Airpark cannot be held to the standard of work under By-Law 64-2014 for work conducted years earlier under a different by-law.

Second, the Court found that By-Law 64-2014 is not retroactive in nature. The Court found that the by-law does not operate retrospectively by attaching new consequences for the future, and there is no language to suggest it was intended to operate retroactively. Therefore, requiring Airpark to obtain a permit in 2014 based upon standards set in 2014 for work conducted years before would plainly change the law from what it was at the time the work was undertaken.

Finally, the Court found that the Legislation Act, 2006, S.O. 2006, c.21, Sch. F., s.52, does not operate to continue the application of By-Law 6-2003. Burlington argued that s.52(3) served to continue the application of By-Law 6-2003 in providing that, if an Act or regulation was repealed, revoked, replaced, or amended, “[p]roceedings commenced under the former Act or regulation shall be continued under the new or amended one, in conformity with the new or amended one as much as possible”. The Court found that s.52(3) does not apply to municipal by-laws since the Legislation Act, 2006, applies to only “Acts and regulations”, precluding application to by-laws. A municipal by-law in not an Act, and s.17(a) of Part III of the Legislation Act, 2006, provides that “regulation” does not include a by-law of a municipality.

The Court closed by noting that although there is public importance in enforcing standards designed to protect the public from environmental harm, the important principle that enactments not be interpreted as declaring past law to be different from what it was barring clear legislative intention must be respected under the rule of law.

OrthoArm Incorporated v GAC International LLC, 2017 ONCA 418

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

Counsel:

A. J. Sanche and D. Murynka, for the appellant

J. A. Aucoin and A. Kapur, for the respondent

Keywords: Intellectual Property, Patents,  Infringement, Contracts, License, Costs, Rules of Civil Procedure, Rule 57.01

Facts:

OrthoArm Incorporated (OrthoArm) invented a type of “self-ligating” orthodontic bracket. OrthoArm’s bracket is covered by U.S. Patent No. 5,630,715 (the “715 Patent”). In 1997, OrthoArm licensed the worldwide rights to manufacture, use, market, and sell products covered by the 715 Patent to the respondent GAC International, LLC (“GAC”). Under the agreement, OrthoArm was entitled to receive a license fee based on net sales of such products.

In 2007, GAC began to market and sell orthodontic brackets it had developed with a third party manufacturer, without accounting to OrthoArm for profits under the License Agreement. OrthoArm alleged that these brackets (the “Accused Products”) were an extension of its original invention and were covered by the 715 Patent. GAC denied the allegation, and claimed that the Accused Products were developed by the third party in accordance with its own U.S. patent. Because the 715 Patent is a U.S. patent, the trial proceeded on the basis of American patent law.

The trial judge accepted that one element, a “slidable locking shutter”, was not present in the Accused Products. If even one element of a claim is not found in an Accused Product, the product does not infringe the patent claim. Every claim contained language identical or similar to the requirement of “a slidable locking shutter movable between open and closed positions”. The trial judge interpreted “slidable locking shutter” to mean that the shutter must only slide in moving between the open and closed positions to trap the wire. In the Accused Products, she found a small sliding action when the locking shutter is moved within the occlusal-gingival opening but, for the most part, that the locking shutter moves from open to closed position and back through a rotating motion. As such, she found the Accused Products not to be covered by the 715 patent.

In dismissing the action, the trial judge awarded costs against the appellant of $300,000 for fees and $90,000 for disbursements, plus HST.

Issues:

(1) Did the trial judge err in determining the Accused Products were not covered by the 715 Patent?

(2) Did the trial judge err in awarding costs in favour of the respondent?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The court held the trial judge correctly interpreted the words “slidable” and “movable” within the context of the specification. She looked at how the terms were employed together in claim 1, as well as in the other claims that were part of the specification, noting that the claims also referred to the locking shutter being “slidably mounted on said bracket between open and closed positions” and “a locking means slidably carried by the bracket member between open and closed positions”. The court held she was correct in finding the term “between”, in the context in which it is used, to mean from a point to a point. The trial judge correctly concluded that the words and the figures were consistent with the conclusion that the sliding motion must take the locking shutter from the open to the closed position and back again. She observed that the only thing that gives the locking shutter the ability to slide between the open and closed positions is the guide bar sliding in the occlusal-gingival opening. In this context, “between” does carry the meaning of “from and to”, and does not reasonably carry the alternative meaning argued by the appellant of “at”, “into” or “across”.

(2) No. The court held the trial judge’s reasons demonstrate she considered and applied the relevant factors under rule 57.01 of the Rules of Civil Procedure. She addressed the appellant’s concern about proportionality when she awarded the respondent less than 65% of its claim for partial indemnity costs. The court also found that this was not a case of divided success. The respondent was entirely successful in the proceedings and it would have been an error for the trial judge to focus on individual issues in awarding costs.

Eden Agency Inc. v. Palinkas, 2017 ONCA 421

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

B. L. Yellin, for the appellant

M. A. Munro, for the respondent 

Keywords:  Contracts, Bailment, Repair and Storage Liens Act, R.S.O 1990, c. R.25, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

Facts:

The respondent, Palinkas, stored food processing equipment owned by the appellant, Eden Agency Inc., and claimed a storage lien under the Repair and Storage Liens Act, R.S.O 1990, c. R.25. The respondent retained the equipment in breach of his obligation under s. 17 of the Act to sell it after receiving a letter from the appellant dated May 30, 2012. Under s. 21 of the Act, the effect of his failure to comply was that the respondent became liable to pay damages. The trial judge ordered him to pay damages to the appellant in the amount of US$129,500. The trial judge then reduced the damages to be paid by giving the respondent a credit of $27,900 for storage fees calculated at $900 a month for 31 months, from January 1, 2010 to July 31, 2012.

Issue(s):

  1. Should credit have been given to the respondent?
  2. If credit should have been given to the respondent, does the Limitations Act, 2002 affect the amount of credit that should be given?

Holding:

Appeal dismissed. 

Reasoning:

(1) Yes. The appellant made two arguments. First, the respondent is not entitled to a credit because he did not claim a set-off in the statement of defence and did not counterclaim for the credit. The Court of Appeal rejected that argument. As noted in theCanadian Encyclopedic Digest(Ont. 4th), vol. 37, title 94 at § 3:

A legal lien is a defence rather than a cause of action, although it will usually relate to a cause of action. Generally speaking, such liens are not subject to limitations periods, since under the law of Ontario limitation periods generally tend only to bar recourse to judicial remedies, rather than to extinguish rights. However, in the case of some statutory liens, the lien expires at the end of a relevant limitation period and ceases to exist as a right.

Citing Debor Contracting Co. v. Core Rentals Ltd, (1982), 40 O.R. (2d) 24, the Court of Appeal concluded that it was open to the trial judge to reduce the measure of damages by the value of the amount of the lien.

Second, the appellant argued that there was no evidence to support the amount of the credit for storage fees. The Court of Appeal also rejected that argument. There was evidence before the trial court that the consignor of the equipment (not the appellant) and the respondent had agreed on a storage fee of $900 per month. This was known to the appellant’s principal who acknowledged by letter of May 30, 2012, to pay at that rate for a short period of time. The Act does not require the relevant agreement to be between the owner of an article and the storer. Further, there was no evidence that the amount charged was unreasonable. The trial judge properly exercised her authority under s. 4 of the Act by providing for a credit.

(2) No. The appellant submitted that the time period for the credit should be no longer than the two year limitation period under theLimitations Act, 2002, S.O. 2002, c. 24, Sched. B. This would reduce the credit from $27,900 to $21,600. However, the Court of Appeal reiterated that the limitation period does not generally run against possessory liens. Since the appellant offered no contrary submissions, the Court of Appeal rejected the appellant’s argument.

TMS Lighting Ltd. V. KJS Transport Inc., 2017 ONCA 427

[Pepall, Lauwers and Huscroft JJ.A.]

Counsel:

T. Slade and C. Giordano, for the appellants

P. Pape and J. Nairn, for the respondents

Keywords: Damages, Tort Damages, Evidence, Deference

Facts:

This appeal concerns the awarding of damages in trespass and nuisance, and has been tried at the trial level twice. The first trial awarded damages for all three of lost productivity, trespass and nuisance, but the decision was set aside because the respondent had failed to establish damages due to lost productivity. A second trial was ordered and was limited to assessing damages for trespass and nuisance. At the second trial, Justice Tzimas of the Superior Court of Justice awarded damages in the amount of $532,000.

The appellant appeals the second trial decision for the same reason as the first, alleging that the respondent has once again failed to present a reasonable and reliable basis on which to quantify damages. The appellant claims that the trial judge erred in misapprehending the evidence and should have only awarded nominal damages.

Issues:

  • Did the trial judge err in her understanding of the evidence?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The trial judge did not err in her understanding of the evidence. The question at issue in the second trial was how much of the respondent’s diminished productivity was caused by the appellant. In answering the question, the respondent produced evidence that it had not provided at the first trial, as well as an expert opinion about the quantification of damages.

The evidence produced by the respondent was sufficient to make a decision on damages. While the respondent’s records were lacking in some respects as a result of his business being relatively small and unsophisticated, the trial judge nonetheless found there to be enough evidence and an explanation to account for these deficiencies.

The trial judge interpreted the evidence appropriately. After carefully reviewing the evidence, the trial judge used it to make inferences from lost revenue and lost net income in order to reach the fixed damages amount of $532,000. Her conclusion factored in external factors such as the impact of the recession and a difference between lost sales in the Canadian and US markets.

With all of the above in mind, the trial judge’s reasoning was sound and her decision on damages was therefore entitled to deference.

56 King Inc. v. Aviva Canada Inc., 2017 ONCA 408

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

S. J. Winny, for the appellant

E. Bowker, for the respondent

Key Words: Insurance Law, Appraisals, Insurance Act, s. 128

Facts:

The appellant commenced a claim under an insurance policy for damage to a commercial property caused by windstorms in July 2013. The statement of claim was issued on February 14, 2014. On January 25, 2016, the insurer elected an appraisal under s. 128 of the Insurance Act. The appellant rejected the appraisal on the basis that it was too late.

The insurer brought a motion requesting a declaration that the appellant’s losses could be determined by appraisal. The motions judge granted the insurer’s motion.

The appellant appealed the motion judge’s decision.

Issues:

  • Did the motion judge have jurisdiction to make the order?
  • Is the two-year delay prior to the demand for appraisal a bar for appraisal?
  • Is the effect of the motion judge’s decision to bifurcate the jury trial?

Holding:

Appeal dismissed.

Reasoning:

  • The appellant’s action was based on claims under an insurance policy. Similarly, the respondent sought relief that flowed from this policy. This relief was sought pursuant to the Insurance Act, which does not define application. Finally, it is illogical to commence an additional proceeding by way of application for relief arising from the same insurance contract.
  • The statutory condition does not impose a time limit on the insurer’s right to invoke appraisal. While the court has discretion to refuse an appraisal, this is only the case when the respondent has been abusive. In the current case, there was no abuse on the part of the respondent.
  • The independent operation of the Insurance Act appraisal process will simply limit and narrow the issues left for trial.

Bentivoglio v Groupe Brigil Construction, 2017 ONCA 413

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

Counsel:

C. O’Brien, for the appellants

H. Borlack and J. M. Brown, for the respondent (Third party)

G. Poliguin for the respondents

Keywords: Civil Procedure, Construction Law, Third and Subsequent Party Claims, Leave to Commence, Nunc Pro Tunc, Construction Lien Act, s. 56

Facts:

Genivar moved for an order dismissing the third party claim, or in the alternative, granting leave to continue its fourth party claim against Mastron. The basis for the motion to dismiss was that the defendant Brigil had not obtained leave to commence the third party claim under the Construction Lien Act. Mastron argued that the fourth party claim should be dismissed because it too had been commenced without leave. The motion judge refused to dismiss the third and fourth party claims. In doing so, he held that an order by Hackland J. dated December 10, 2013, was intended to continue the proceedings under the “ordinary track,” and, as such, the proceedings continued to be governed by the Rules of Civil Procedure. He granted leave nunc pro tunc to Genivar to issue its fourth party claim against Mastron.

Issues:

(1) Did the motion judge err in granting leave to commence the fourth party claim?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The court held that the motion judge correctly found that the intention of the order of Hackland J. — made on consent of Genivar — was to continue the action on the “ordinary track”. After disposing of the lien claim entirely, the order of Hackland J. did not expressly state whether the remainder of the action would continue under the “ordinary track”, but merely that the third party claim would “survive”. The third party claim sought damages for breach of contract and negligence in addition to contribution and indemnity. Since only claims for contribution and indemnity are permitted in construction lien third party proceedings under s. 56 of the Construction Lien Act, a third party claim that asserts other claims can only proceed on the ordinary track. As a practical matter, the third party claim here could only “survive” in proceedings on the “ordinary track”. The decision to allow Genivar to continue the fourth party claim was correct. The court noted, however, that since the third party proceedings continued on the ordinary track, there was no need for the nunc pro tunc order for leave.

Allied Properties Reit v 1064249 Ontario Inc., 2017 ONCA 419

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

Counsel:

P. DiMonte, for the appellants

D. Reiter and M. Cowan for the respondents

Keywords: Real Property, Municipal Law, Zoning, Legal Non-Conforming Use, Injunctions, Standard of Review

Facts:

The appellant conceded that its commercial parking lot was not in compliance with the Zoning By-Law and wished to defeat the respondent’s request for an injunction restraining operation of the lot. To do so, the appellant needed to establish that its property was a legal non-conforming use by demonstrating that a commercial parking lot had operated continuously and without interruption on the property since the passage of the Zoning By-Law in 1993.

The application judge stated that the appellant failed to do so because there was no evidence to support its position that the use of the property had not changed since the passage of the By-Law. She accepted expert evidence that the lot was used as an accessory lot rather than a stand-alone commercial parking lot between 1993 and 1996, and granted the injunction along with declaratory relief.

Issues:

Did the application judge make a palpable and overriding error warranting setting aside the injunction?

Holding:

Appeal dismissed.

Reasoning:

No. The application judge made findings that were open to her based on the record. The role of the Court of Appeal is not to make different findings than the application judge. There is no basis for the Court of Appeal to interfere with the facts found.

Best Source Inc. v. International Industries Corporation, 2017 ONCA 411

[Strathy C.J.O., Cronk and Pepall JJ.A.]

Counsel:

Ryan Wozniak and Carmine Scalzi, for the appellant

Michael F. Smith, for the respondents

Keywords: Contracts, Assignment, Contractual Interpretation, Standard of Review

Facts:                  

Headwaters Inc. (“Headwaters”) was the exclusive sales agent in Canada for the respondent, International Industries Corporation (“IIC”) with respect to several products, including one called “Mean Green”. The respondent David Cloer is the principal of IIC. Headwaters had two operative agreements with IIC – the Joint Venture Marketing Agreement (“JVMA”), and the International Sales Agency Agreement (“ISAA”). In February 2009, the appellant, Best Source Inc., offered to purchase from Headwaters the exclusive right to sell “Mean Green” in Canada. Negotiations culminated in the execution of a letter agreement dated March 10, 2009, whereby Headwaters, with IIC’s consent, assigned its rights and obligations with respect to “Mean Green” under the JVMA to the appellant. The assignment agreement contemplated that the parties would negotiate an “agency agreement” and that “in the interim and ultimately upon completion of a satisfactory agency agreement with IIC, [the appellant] will now stand in the position of [Headwaters] under the [JVMA] with respect to the Mean Green product.”  The motion judge found that the parties conducted themselves as if the sales agency agreement was in place even though the agency agreement was never finalized.

On the motion, and in the Court of Appeal, the appellant claimed that the only contract assigned to it was the JVMA. The appellant’s principal, Mr. Calabrese, said that he was unaware of the ISAA until after litigation commenced. The motion judge rejected that evidence. He found that Mr. Calabrese was not only aware of the ISAA, but that he had received a copy of it. The motion judge noted that, while the assignment agreement was being negotiated, Mr. Calabrese’s lawyer advised Mr. Calabrese that he had spoken to Mr. Cloer, who told him that IIC had a “written brokerage/sales agency agreement” with Headwaters, covering a number of different products, and was prepared to consent to the assignment of the agreement with respect to “Mean Green”. The motion judge also found that the reasonable interpretation of the assignment agreement was that the parties intended that the appellant would step into the shoes of Headwaters as IIC’s sales agent. In so doing, the appellant took on all the obligations of the ISAA, including the arbitration clause.

Issues:

  • Were the contractual rights assigned to the appellant limited to those set out in the JVMA?

Holding:

Appeal dismissed.

Reasoning:

No. While it is true that the assignment agreement made no reference to the ISAA, and only referred to the JVMA, the assignment agreement contemplated that pending the negotiation of an agency agreement, the appellant would “stand in the position” of Headwaters in relation to the “Mean Green” product. In order to “stand in the position” of Headwaters, the appellant required an assignment of the ISAA, which set out the essential business terms of the sales agency arrangement. The appellant referred to a letter from IIC’s lawyer, written in response to a letter from the appellant’s lawyer protesting IIC’s decision not to renew the agreement. The letter from the appellant’s lawyer made reference to the sales agency agreement with Headwaters and took the position that the agency agreement expired in 2010, and any rights inherent in the agency terminated with the lapse of the agreement.

While the motion judge did not address this issue directly, he found as a fact that the appellant and IIC conducted themselves as if the sales agreement were in place. The appellant operated under the sales agreement and had the benefit of it. The parties’ conduct did not constitute a waiver of the sales agreement or the arbitration clause in it. In the Court of Appeal’s view, the lawyer’s letter did not undermine the motion judge’s conclusion that the ISAA was assigned to the appellant and that the parties acted in accordance with its terms.

The Court of Appeal concluded that the motion judge’s findings of fact were entitled to deference, as is his interpretation of the contractual documents, which was grounded in his appreciation of the factual matrix. Those findings supported the conclusion that the bundle of rights possessed by Headwaters included those under both the JVMA and the ISAA, that both agreements were necessary to enable the appellant to act as the sales agent for “Mean Green” in Canada, and that both agreements were assigned to the appellant.

Short Civil Endorsements

DeMarco v Nicoletti (Appeal Book Endorsement), 2017 ONCA 417

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

Counsel:

M. DeMarco, acting in person

K. Watters, for the respondent

Key Words: Security for costs order

Duff (Duff Capital Group) v. Genesys Laboratories Canada Inc. (Appeal Book Endorsement), 2017 ONCA 429

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

Counsel:

J.B. Simpson, for the appellant

R.S. Duff, acting in person

Key Words: Standard of Review, Contracts

Ontario Review Board

Parsons v. Komer, 2017 ONCA 407

[Gillese, Benotto, and Roberts JJ.A.]

Counsel:

T. Whillier, for the appellant

J.P. Thomson, for the respondent

Key Words: Health Law, Ontario Review Board, Administrative Law, Criminal Law, Health Care Consent Act, Self-represented Litigant, Procedural Fairness, Adjournments

Criminal Decisions

R. v. E.H. (Publication Ban), 2017 ONCA 423

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

Counsel:

E. Chozik, for the appellant

A. Wheeler, for the respondent

Key Words: Criminal Law, Publication Ban, Sexual Assault, Sexual Interference, Ineffective Assistance of Trial Counsel, Credibility Assessment

R. v. I.W.S. (Publication Ban), 2017 ONCA 409

[MacPherson, Blair and Epstein JJ.A.]

Counsel:

M. Webb, for the appellant

N. Dennison, for the respondent

Key Words: Criminal Law, Publication Ban, Sexual Assault, Sexual Touching, Kiennaple, W(D) Principles,

R. v. Richards, 2017 ONCA 424

[Watt, Lauwers and Benotto JJ.A.]

C. Rippell and M. Salih, for the appellant

J. Streeter, for the respondent

Key Words: Possession for the Purpose of Trafficking, Trial Fairness, Reasonable Apprehension of bias, Presumption of Judicial Integrity, Admissibility of Evidence, Voluntariness, Oickle, s.10(b) Charter Right to Counsel, Grant

R. v. Sliwka (Publication Ban), 2017 ONCA 426

[Doherty, MacFarland and Paciocco JJ.A.]

K. Shai, for the appellant

D. Derstine, for the respondent

Key Words: Physical Assault, Sexual Assault, Failure to Give Reasons, Teskey, Error of Law, Appellate Review

R. v. Sohal, 2017 ONCA 425

[Rouleau, Trotter and Paciocco JJ.A.]

M. Halfyard and B. Vandebeek, for the appellant

A. Hotke, for the respondent

Key Words: Assault, Suspended Sentence, Appeal of Summary Conviction, Immigration, Deportation, Pham

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.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 15 – 19, 2017)

Good Afternoon,

Following are the summaries of civil decisions for the week.

In Biancaniello v. DMCT LLP, the Court of Appeal reversed the Divisional Court and the original motion judge, and held that a full and final release is just that, a full and final release. The fact that the plaintiff may not have discovered the claim until after giving the release did not mean that the claim had not been released.

In Bollman v. Soenen, a medical negligence case, the court discussed the principles surrounding informed consent, which contain subjective and objective aspects

In Black v. Owen, the Court reaffirmed its decision in Amberwood Investments Ltd. v. Durham Condominium Corp. No. 123, which held that the common law rule that positive covenants do not run with freehold land is settled law in Ontario.

Finally, in Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), an insured missed the normal two-year limitation period to sue his insurer for the alleged wrongful termination of disability benefits. The plaintiff argued that when it wrote to him to terminate his benefits, the insurer should have advised him of the limitation period and that the failure to do so was a breach of the insurer’s duty of good faith. Although acknowledging the commentary of our partner, Rod Winsor, in his book, Good Faith in Canadian Insurance Law, suggesting that good faith or other principles might support a duty to advise of a limitation period in some circumstances, notwithstanding authority to the contrary, the court was not prepared to create a duty on an insurer to inform an insured of the limitation period. The legislature had created such a duty in certain circumstances, and could choose to expand that duty to other circumstances if it wanted to do so.

Other topics covered include dismissal for delay, family law (setting aside domestic contracts), wrongful dismissal and construction law (breach of trust).

Have a great weekend.

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

Table of Contents:

De Jesus v. Linamar Holdings Inc. (Camcor Manufacturing), 2017 ONCA 384

Keywords: Employment Law, Wrongful Dismissal, Just Cause, Burden of Proof, McKinley v. BC Tel, 2001 SCC 38, Reasonable Apprehension of Bias

Biancaniello v. DMCT LLP, 2017 ONCA 386

Keywords: Torts, Professional Negligence, Accountants, Contracts, Settlements, Releases, Standard of Review, Correctness, Sattva Capital Corp. v. Creston Moly Corp.

Airex Inc. v. Ben Air System Inc., 2017 ONCA 390

Keywords: Construction Law, Breach of Trust, Construction Lien Act, R.S.O. 1990, c. C.30, ss. 8 to 11, Summary Judgment, Burden of Proof

Bollman v. Soenen, 2017 ONCA 391

Keywords: Torts, Negligence, Medical Malpractice, Informed Consent, Reibl v Hughes, [1980] 2 SCR 880, Expert Evidence

Virc v. Blair, 2017 ONCA 394

Keywords: Family Law, Domestic Contracts, Setting Aside, Misrepresentation, Family Law Act, R.S.O. 1990, c. F.3, s 56, LeVan, 2008 ONCA 388, Equalization of Net Family Property, Child Support, Retroactive Child Support, Fresh Evidence, R. v. Palmer, [1980] 1 S.C.R. 759, Standard of Review, Findings of Fact, Palpable and Ovveriding Error

Black v. Owen, 2017 ONCA 397

Keywords: Real Property, Positive Covenants Rule, Benefit and Burden Exception, Conditional Grant of Easement Exception, Amberwood Investments Ltd. v. Durham Condominium Corp. No. 123 (2002), 58 O.R. (3d) 481 (CA)

Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), 2017 ONCA 395

Keywords: Insurance Law, Duty of Good Faith, Duty to Inform, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Insurance Act, R.S.O. 1990, c. I.8

Temelini v. Canada Permanent Trust Company, 2017 ONCA 410

Keywords: Civil Procedure, Dismissal for Delay

For Criminal Decisions, click here.

Civil Decisions:

De Jesus v. Linamar Holdings Inc. (Camcor Manufacturing), 2017 ONCA 384

[Rouleau, Pardu and Roberts JJ.A.]

Counsel:
R. A. Konduros, for the appellant
M. MacKillop and Todd Weisberg, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Just Cause, Burden of Proof, McKinley v. BC Tel, 2001 SCC 38, Reasonable Apprehension of Bias

Facts:

The appellant was employed as a production supervisor with the respondent. On October 8, 2013, his employment was terminated for cause after approximately 19.5 years of continuous employment, without notice or compensation in lieu of notice. The respondent terminated the appellant’s employment because of a series of incidents that culminated in his having allowed 1,500 defective camshafts to be processed with “roping” marks during his shift and then in his having lied to the respondent about what had happened.

The trial judge accepted the respondent’s evidence that 1,500 defective camshafts had been produced during the appellant’s shift and that, if the appellant and his team had in fact been carrying out the mandated checks as often as they said they had, it would have been impossible for the appellant or his team members not to have discovered the defective camshafts. Indeed, the trial judge accepted the evidence of one of the packers that she and other packers had brought the roping issue to the appellant’s attention on three occasions during their shift. The trial judge concluded that the appellant had lied about the roping issues that had occurred during his shift.

The trial judge held that the appellant’s failure to supervise and to take any remedial steps once the roping problem was brought to his attention, combined with his dishonesty about what had happened, went to the heart of the employment relationship. Accordingly, the trial judge concluded that these facts, when taken together with the appellant’s earlier disciplinary incidents, established on a balance of probabilities that the respondent had just cause to terminate the appellant’s employment.

The employee appealed the trial judge’s dismissal of his wrongful dismissal action.

Issues:

  • Did the trial judge reverse the onus that the respondent had to meet, erroneously requiring the appellant to prove that his employment had not been terminated for cause?
  • Is there a reasonable apprehension of bias?

Holding:

Appeal dismissed.

Reasoning:

  • The appellant submits that an improper reversal of the employer’s onus resulted in the trial judge erroneously accepting the respondent’s “impossibly exaggerated” evidence that 1,500 defective camshafts were produced during the appellant’s shift and the respondent’s hearsay evidence that 604 of those defective camshafts had to be scrapped. In support of his allegation of the trial judge’s error, the appellant points to the following sentence near the end of the trial judge’s conclusion, at para. 163: “On all of the evidence, the plaintiff has not met his onus that he was wrongfully terminated from his employment with the defendant.” This concluding sentence referring to “onus” must be read in the context of the entirety of the trial judge’s reasons. From the respondent’s written and oral submissions at trial, it is apparent that the respondent accepted that it had the onus to demonstrate, on a balance of probabilities, that it had just cause to terminate the appellant’s employment without notice or compensation in lieu of notice. Moreover, the trial judge applied the correct analysis for determining whether just cause has been established, as set out by the Supreme Court of Canada in McKinley v. BC Tel, 2001 SCC 38. Taken in this context, the trial judge’s above-noted sentence at para. 163 of her reasons merely alludes to the fact that the appellant was unsuccessful at trial. Her analysis itself does not reflect a reversal of the employer’s onus

 

The trial judge did err in accepting the hearsay evidence about the 604 scrapped defective camshafts. However, this was not a palpable and overriding error because it did not affect the trial judge’s assessment of the evidence or her ultimate determination of the issues. As the trial judge stated several times in her reasons, the key factual issue that she had to decide was whether 1,500 defective camshafts had been produced during the appellant’s shift. Whether or not 604 of those camshafts were ultimately scrapped was immaterial to the trial judge’s determination of the total number of defective camshafts.

 

  • Judges are afforded a strong presumption of impartiality that is not easily displaced, although that presumption can be rebutted by the trial judge’s conduct. In support of his allegation of bias, the appellant places particular emphasis on the trial judge’s negative reaction to counsel’s failure to bring to the court’s attention a decision of the Court of Appeal that questioned a procedural ruling that the trial judge had made earlier. The trial judge initially chastised appellant’s counsel, describing his failure to bring the case to the court’s attention as “bad advocacy”. However, once counsel for both parties apologized and explained that the failure was unintentional, the trial judge’s initial annoyance immediately disappeared.

 

This exchange and the other concerns raised by the appellant do not demonstrate bias on the part of the trial judge. There is no evidence of inappropriate treatment by the trial judge of the appellant and his counsel. Criticism of counsel by the trial judge, as occurred here, or disagreement with the findings urged upon her by counsel, does not amount to bias or give rise to a reasonable apprehension of bias.

Biancaniello v. DMCT LLP, 2017 ONCA 386

[Feldman, Epstein and Miller JJ.A.]

Counsel:

T. Galligan, for the appellants

A. Pantel, for the respondents

Keywords: Torts, Professional Negligence, Accountants, Contracts, Settlements, Releases, Standard of Review, Correctness, Sattva Capital Corp. v. Creston Moly Corp.

Facts:

The respondent, Prinova Technologies, was incorporated in 1998 as a consulting business offering advice on document automation. It also developed a software business. From 2004 to 2007, the appellant, DMCT LLP, acted as Prinova’s accountant. DMCT billed Prinova a total of $66,632.45 for services rendered on three separate matters, including a butterfly transaction. Prinova objected to paying the fees. Prinova alleged that it obtained little value for the services rendered and incurred damages as a result of some of the advice provided by DMCT. DMCT sued for its fees. Before a statement of defence was delivered, the parties agreed to settle the litigation for a total payment by Prinova of $35,000. As part of the settlement, the parties executed a mutual release dated March 31, 2008 (the “2008 Release”).

In late 2011, in the course of a restructuring, Prinova learned that far from being tax-free, the butterfly transaction DMCT had structured could be subject to an income tax liability of approximately $1.24 million. As a result, Prinova obtained a court order dated January 23, 2013, rescinding the steps taken to implement the butterfly transaction. As part of the rescission application, Prinova included an affidavit from Enzo Testa, the DMCT partner who had advised Prinova on the butterfly transaction. In that affidavit, Testa acknowledged, without explanation, that the transactions as designed by DMCT did not comply with the relevant provisions of the Income Tax Act, and therefore were contrary to Prinova’s intentions. Prinova incurred over $250,000 in legal and accounting fees in the process of obtaining the rescission order.

In May 2012, Prinova filed a notice of action against DMCT seeking an order setting aside the 2008 Release and claiming damages for negligence, breach of contract, misrepresentation and breach of fiduciary duty. DMCT moved for summary judgment to dismiss the action on the basis that Prinova’s claim was barred by the 2008 Release.

The motion judge dismissed DMCT’s motion for summary judgment, finding that the release did not bar Prinova’s claim. She explained that the wording of the 2008 Release refers to claims “existing to the present time” – i.e., in 2008. DMCT’s “admitted negligence” only came to light in 2011.

 The Divisional Court dismissed DMCT’s appeal, stating: “Unless a release has exceptionally comprehensive language, it applies only to claims that were known to the parties at the time that it was executed. A dispute that had not emerged, or a question which had not arisen, cannot be absorbed by the words of a general release. If the parties want to bar unknown claims, they must use clear and unequivocal language to express that intention.” The Divisional Court agreed with the motion judge that at the time it signed the release, Prinova did not know that DMCT’s advice on the butterfly transaction had been negligently given, and therefore it did not know that it had a claim for negligence against DMCT.

 Issues:

Did the Divisional Court err in law in its interpretation of the standard language used in the 2008 Release?

 Holding: Appeal allowed.

Reasoning:

Yes. First, the Court of Appeal addressed the issue of standard of review. The appeal came before the Court as an appeal from the Divisional Court with leave. This affected the applicable standard of review. Leave will only be granted in a second appeal in exceptional circumstances, specifically where the court would be giving guidance on certain types of issues of general public importance. In the present case, the question before the Court was of general public importance because although the release was not on a standard form, it used language that is standard in many common release documents. From a standard of review perspective, the appeal raised a question of law to which the correctness standard applies.

The seminal decision on the proper approach to the interpretation of a release is the House of Lords’ decision in London and South Western Railway v. Blackmore (1870), L.R. 4 H.L. 610. At p. 263, Lord Westbury stated: “The general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time the release was given.” In Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69, Cory J. cited this principle with approval: “What the statement quoted means is that in determining what was contemplated by the parties, the words used in a document need not be looked at in a vacuum. The specific context in which a document was executed may well assist in understanding the words used. It is perfectly proper, and indeed may be necessary, to look at the surrounding circumstances in order to ascertain what the parties were really contracting about.”

After quoting the decision in Bank of Credit and Commerce International SA v. Munawar Ali, [2001] UKHL 8 at length, the Court enumerated the principles to be applied in interpreting a release clause:

  1. “One looks first to the language of a release to find its meaning”;
  2. “Parties may use language that releases every claim that arises, including unknown claims. However, courts will require clear language to infer that a party intended to release claims of which it was unaware”;
  3. “General language in a release will be limited to the thing or things that were specially in the contemplation of the parties when the release was given”;
  4. “When a release is given as part of the settlement of a claim, the parties want to wipe the slate clean between them”; and
  5. “One can look at the circumstances surrounding the giving of the release to determine what was specially in the contemplation of the parties”.

Applying these principles to the mutual release at issue, although the release did not specifically say that it included unknown claims, it included all claims arising from the services provided by the accountants up to the end of December 2007. By including all claims, but limiting the description of the claims that are intended to be covered both by subject matter and by time frame, there was no need to further specify the types of claims that were included. The language was specific and fully understandable: it included all claims related to professional services provided during the specified time frame. There was no need, for example, to say, “including tort claims, negligence claims, breach of contract claims, costs claims”, etc. They were all included unless specifically excluded. The same analysis applied to unknown claims – by specifying the claims contemplated by the parties and describing them inclusively, all claims in the defined category were included unless specifically excluded. Had the client wished to exclude claims it might later discover arising from that work, it could have bargained for that result.

The Divisional Court had held that because the parties were not aware that the accountants had given negligent advice on the butterfly transaction, the client’s claim for negligence did not exist when the release was signed. This finding constituted an error of law.

Airex Inc. v. Ben Air System Inc., 2017 ONCA 390

[Simmons, Rouleau, and Roberts JJ.A.]

Counsel:

C. Holland, for the appellants

J.L. Faso and D. Morawetz, for the respondent

Keywords: Construction Law, Breach of Trust, Construction Lien Act, R.S.O. 1990, c. C.30, ss. 8 to 11, Summary Judgment, Burden of Proof

Facts:

The appellants appeal from a summary judgment declaring them in breach of the trust provisions of the Construction Lien Act, R.S.O. 1990, c. C.30 (the “Act”) and ordering them to jointly and severally pay $216,662.84 to the respondent, Airex Inc. (“Airex”).

The corporate appellant, Ben Air System Inc. (“Ben Air”) entered into a subcontract with Omico Mechanical Ltd. (“Omico”) to do a portion of Omico’s HVAC work on a TTC facility (“the project”). Ben Air subsequently ordered certain HVAC equipment for the project from Airex.

The appellant, Beny Quattrociocchi, is the president of Ben Air. The appellant, Juan Cumming, is the project manager of Ben Air. There was no dispute on the motion that Mr. Quattrociocchi signed a guarantee in favour of Airex, guaranteeing Ben Air’s present and future indebtedness to Airex. Further, subject to one issue regarding a claimed set-off and an argument concerning mitigation, there was no issue on the motion that Ben Air owed Airex monies on account of HVAC equipment for the project. There was also no issue that Omico paid $387,228.32 plus HST to Ben Air on account of Ben Air’s subcontract and that those funds are trust funds in relation to the project under s. 8 of the Act.

 Issue: Did the motion judge err in failing to find a genuine issue requiring a trial concerning whether Ben Air breached s. 8 of the Act?

 Holding: Appeal dismissed.

 Reasoning:

No. Ben Air failed to file evidence on the motion that carried sufficient weight to support its position. It was Airex’s role to demonstrate no genuine issue requiring a trial. However, once Airex demonstrated the following facts (which were never really in dispute), Airex had established that it was the beneficiary of trust monies under s. 8(1) of the Act:

  • it was a sub-contractor on the project;
  • it supplied materials to Ben Air, a contractor on the project, for which it (Airex) had not been paid; and
  • Ben Air had received payments on account of the project from Omico, another contractor on the project.

It was then for Ben Air to show that the trust monies had been properly applied. Moreover, the appellants were required to put their best foot forward on the summary judgment motion. Viewed as a whole, the evidence the appellants filed was contradictory and lacked documentary support. It did not carry sufficient weight to support their assertions that they had paid out more money than they received in relation to the contract – or even that payments they had made on the contract left them without sufficient trust funds to pay Airex.

As for the claimed set-off, the respondent produced documents indicating it complied with the contract at issue. The appellants did not produce documents to demonstrate otherwise. The court found no basis on which to interfere with the motion judge’s decision that there was no genuine issue requiring a trial concerning the set-off.

Bollman v. Soenen, 2017 ONCA 391

[Simmons, Pepall and Huscroft JJ.A.]

Counsel:

A. I. G. Michael and K. N. Knight, for the appellant/respondent by way of cross-appeal

R. G. Slaght and L. N. Beck, for the respondent/appellant by way of cross-appeal

Keywords: Torts, Negligence, Medical Malpractice, Informed Consent, Reibl v Hughes, [1980] 2 SCR 880, Expert Evidence

Facts:

In June 2008, the respondent, Dr. Gary Soenen, performed a laparoscopially assisted vaginal hysterectomy (“LAVH”) on the appellant, Barbara Young (formerly Bollman). In the days and weeks following the surgery, Ms. Young experienced significant pain and complications. During subsequent corrective surgery, it was determined that her left ureter was transected.

Ms. Young sued Dr. Soenen for negligence. Among other things, she claimed that, as a general surgeon, he was not qualified to perform the surgery; that he did not adequately explain the risks of or alternatives to surgery, thus failing to obtain her informed consent; and that he did not meet the standard of care either in performing the surgery or in his post-operative care.

The trial judge found that Dr. Soenen severed Ms. Young’s left ureter during the hysterectomy. Nonetheless, he rejected Ms. Young’s claims that Dr. Soenen was not qualified to perform the surgery and failed to meet the standard of care in performing it. Further, while the trial judge was not satisfied that Dr. Soenen met his duty of fully informing Ms. Young about the risks of surgery and other treatment options, and found that Ms. Young “met the subjective component of the test” for informed consent, he concluded that a reasonable person experiencing Ms. Young’s symptoms would have chosen to proceed with the surgery had full disclosure been made. The trial judge therefore rejected Ms. Young’s negligence claim based on lack of informed consent.

However, the trial judge found Dr. Soenen negligent in his post-operative care. In particular, he found that Dr. Soenen’s failure to consider and investigate a surgical injury on July 7, 2008 (which was a week before the date of the scan that revealed the ureteric injury) breached the standard of care. He noted that Ms. Young suffered pain and complications for an additional week and had to undergo an additional laparoscopic surgery. He concluded that both would have been avoided had Dr. Soenen ordered a CT scan with contrast on July 7, 2008. He awarded Ms. Young $35,000 in damages.

Ms. Young appeals the dismissal of her claim for negligence based on lack of informed consent. Dr. Soenen cross-appeals the finding of post-operative negligence.

Issues:

  1. Whether the trial judge erred in the application of the test for informed consent in medical negligence cases.
  2. Whether the trial judge erred by finding that Dr. Soenen’s failure to consider and investigate a surgical injury a week before the date of the scan that revealed the ureteric injury breached the standard of care.

Holding:

Appeal dismissed, cross-appeal allowed.

Reasoning:

  1. No. In the trial judge’s view, the Supreme Court’s decision in Reibl v Hughes, [1980] 2 SCR 880 established a two-part test for informed consent, both components of which must be established on a balance of probabilities: (i) what the patient would have agreed to if the risks were known, a subjective test; and (ii) what a reasonable person would have done, an objective test. The duty to fully inform Ms. Young of the risks of surgery and available alternative options rested with Dr. Soenen. The trial judge was not satisfied Dr. Soenen made full disclosure to his patient. His notes were of no assistance and he provided minimal detail of what his usual practice in terms of disclosure actually was. The trial judge therefore concluded that Ms. Young met the subjective component of the test. However, in his view, it was impossible for her to meet the second component. The trial judge concluded a reasonable person experiencing Ms. Young’s symptoms would have chosen a surgical solution if all treatment options and material risk, including ureteric injury, had been disclosed.

The Supreme Court of Canada discussed the modified objective test for informed consent in Arndt v Smith, [1997] 2 SCR 539. The test enunciated relies on a combination of objective and subjective factors in order to determine whether the failure to disclose actually caused the harm of which the plaintiff complains. It requires that the court consider what the reasonable patient in the circumstances of the plaintiff would have done if faced with the same situation. The trier of fact must take into consideration any “particular concerns” of the patient and any “special considerations affecting the particular patient” in determining whether the patient would have refused treatment if given all the information about the possible risks.

Although the trial judge expressed the test somewhat differently, the Court of Appeal was not persuaded that that he erred in applying the test as set out and explained by the Supreme Court. The trial judge’s reasons demonstrate that he believed Ms. Young when she said that she would have tried medical management had full disclosure been made. However, he found her evidence in that respect tainted by hindsight and therefore unreliable. Taking account of her circumstances at the time, and assessing her situation from the perspective of a reasonable person, he concluded that what was the most important was a final solution. The trial judge concluded that Ms. Young wanted relief, having had two failed surgical procedures and having experienced considerable pain and fatigue. Rather than a trial of medical management, a reasonable person who had experienced Ms. Young’s symptoms over the same time frame and with the attempts at correction she had tried, would have opted for surgery – which carried a very small risk of injury to the ureters – to resolve her problem, rather than medical management which might do no more than ameliorate her symptoms.

The Court of Appeal was not persuaded that the trial judge ignored or failed to consider the evidence of Ms. Young’s expert in reaching this conclusion. In reaching his conclusion, the trial judge considered all the evidence and applied the test for informed consent as enunciated and explained by the Supreme Court. In the absence of error, his conclusion is entitled to deference.

  1. Yes. The expert evidence read as a whole did not support the trial judge’s finding that Dr. Soenen breached the standard of care. Although two doctors gave the opinions relied on by the trial judge when testifying in-chief, during cross-examination, both acknowledged that had Dr. Soenen taken certain steps he said he had taken (performing a pelvic examination, reviewing ultrasound and blood test reports and speaking to the radiologist) before deciding on a course of action, declining to order a CT scan would be a reasonable decision and within the standard of care (or at least not an unreasonable decision). Considering the evidence as a whole, the trial judge’s conclusion that Dr. Soenen fell below the standard of care in his post-operative care was not supported by the expert evidence.

Virc v. Blair, 2017 ONCA 394

[Laskin, Benotto and Trotter JJ.A.]

Counsel:

M. F. L. Blair, in person

B. R.G. Smith and S. Conlin, for the respondent

Keywords: Family Law, Domestic Contracts, Setting Aside, Misrepresentation, Family Law Act, R.S.O. 1990, c. F.3, s 56, LeVan, 2008 ONCA 388, Equalization of Net Family Property, Child Support, Retroactive Child Support, Fresh Evidence, R. v. Palmer, [1980] 1 S.C.R. 759, Standard of Review, Findings of Fact, Palpable and Ovveriding Error

Facts:

The appellant (husband) is a businessman. He and the respondent (wife), a lawyer, were married for 14 years when they separated. They signed a separation agreement prepared by the husband. The wife did not seek independent legal advice, believing that the husband’s financial disclosure was accurate. She later determined that he had misstated the value of his assets at the date of marriage. She brought an application to set aside the agreement.

The trial judge set aside the separation agreement. He found that the husband had misled the wife with respect to the value of his company at the date of marriage. The trial judge revised the calculations to determine the appropriate amount of equalization and support payments.

The husband appeals the trial judge’s decision to set aside the separation agreement, as well as the amount he awarded for the equalization payment and retroactive child support. He does not contest the spousal support award.

Issue:

 (1) Is the fresh evidence admissible?

(2) Did the trial judge err in setting aside the Separation Agreement?

(3) Did the trial judge err in calculating the equalization payment?

(4) Did the trial judge err in awarding retroactive child support for Michael and Jeffrey?

Holding: Appeal dismissed.

Reasoning:

(1) No. The principles governing the admissibility of fresh evidence on appeal are outlined in R. v. Palmer. The Palmer test requires the applicant to satisfy four criteria: (i) the evidence could not have been adduced at trial; (ii) the evidence must be relevant in that it bears on a decisive or potentially decisive issue; (iii) the evidence must be reasonably capable of belief; and (iv) the evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.

The proposed evidence does not meet the test. The correspondence could have been adduced at trial. It also could not reasonably have affected the result at trial, since the trial judge had the benefit of the same information in the husband’s sworn financial statements.

(2) No. The husband submits that the trial judge misapprehended the evidence and consequently erred in setting aside the Separation Agreement.

However, the Court of Appeal determined that the trial judge correctly followed the two-step process directed by the Court of Appeal in LeVan, 2008 ONCA 388. Step one requires the party seeking to set aside the agreement to demonstrate that one or more of the circumstances in s. 56(4) of the Family Law Act is engaged. The trial judge concluded that the husband had breached his disclosure obligations (s. 56(4)(a)) and, in accordance with the law of contract (s. 56(4)(c)), had materially misrepresented his assets. The trial judge then moved to step two and exercised his discretion to set aside the Separation Agreement.

(3) No. The husband claimed $1,500,000 as part of his date of marriage deduction from his net family property for a number of inter-related legal proceedings in which he was involved. The amount claimed was the proceeds of the legal proceedings that were not resolved until after the marriage date, but were based on pre-marriage events. The husband submits that these litigation receivables were contingent assets at the date of marriage and the trial judge erred in finding their value at the date of marriage to be nil.

After reviewing the facts in some detail, the trial judge concluded that the husband had not met his onus of proving that the various legal proceedings in which he was personally involved would be either adjudicated or settled in his favour in the amounts claimed. This issue is a factual one. Accordingly, the Court of Appeal saw no palpable or overriding error in the trial judge’s reasons.

(4) No. The husband submitted that the trial judge erred in awarding retroactive support for Jeffrey and Michael for three reasons: (i) the trial judge relied on an understated 2008 income figure for the wife; (ii) the wife acknowledged in her application that the children “generally” spent equal time with each parent, so the presumptive Guideline amount does not apply; and (iii) Jeffrey (age 19) and Michael (age 21) were not children of the marriage at the time of the award.

The Court of Appeal disagreed with the appellant. First, the trial judge carefully outlined the wife’s income sources and determined her income for each of the relevant years. The husband had failed to identify a palpable and overriding error in the trial judge’s findings of fact. Second, the trial judge conducted a detailed analysis of the children’s primary residence for the years 2008-2015. He made findings of fact that although the children went back and forth between the parents’ homes, for the period from July 2000 to March 2009, the children resided primarily with the wife. Third, at the time of the trial, both Michael and Jeffrey were in university and thus qualified as children of the marriage.

The trial judge’s reasons, read as a whole, make it clear that the husband’s conduct was blameworthy. The trial judge also addressed the circumstances of the children. Although the children lived a privileged lifestyle, the husband’s assets, according to the trial judge, “enabled him to fund a lifestyle for himself and the children that was materially different from what the wife could offer”.

Ultimately, the trial judge determined that the wife had made an early request for child support; he turned his mind to the fact that the children lived at a high standard and the award would amount to a transfer of wealth; and he found the husband had engaged in blameworthy conduct. In considering the appropriateness of the award determined by the Guidelines, the trial judge exercised his discretion to reduce it from $506,865 to $450,000. The Court of Appeal found no error in the trial judge’s analysis and therefore would not interfere with the award of retroactive child support.

Black v. Owen, 2017 ONCA 397

[Feldman, Cronk and Miller JJ.A.]

Counsel:

S. Hutchison and M. Gourlay, for the appellants

A. Spafford and S. Gaudet, for the respondents

Keywords: Real Property, Positive Covenants Rule, Benefit and Burden Exception, Conditional Grant of Easement Exception, Amberwood Investments Ltd. v. Durham Condominium Corp. No. 123 (2002), 58 O.R. (3d) 481 (CA)

Facts:

This appeal concerned the alleged obligation of the appellants, Gerald Owen and Katherine Anderson, to pay an annual levy as a contribution to maintenance costs and taxes for certain private property situated in Toronto. The payment obligation was said to arise under an 1891 trust deed concerning certain common property in the Park (the “Trust Deed”).

Under the terms of the Trust Deed, the original covenantors agreed to appoint trustees to hold certain roadways, drives, a park reserve and stipulated land reservations in Wychwood Park (the “Common Property”) as private property for the benefit of the original covenantors and “all persons hereinafter claiming through or under them any portion of the said property”. For this purpose, the original contracting parties granted their respective interests in the lands comprising the Common Property in Wychwood Park to the trustees, upon several express trusts.

All the covenants contained in the Trust Deed are expressed to bind both the original covenantors and their heirs, executors, administrators or assigns. The Trust Deed also expressly states that the annual levy contemplated under the first trust provision constitutes a charge upon the lands held by each landowner in the Park or “his, her or their executors, administrators or assigns or anyone claiming under him, her or them.” [emphasis added]

Unlike many of the other properties in Wychwood Park, the appellants’ property is accessed and serviced by a public, municipal road. The appellants assert that they derive no benefit from the expenditure of the annual levy imposed under the Trust Deed, they disclaim any benefit from their property’s inclusion in Wychwood Park, they maintain that they have never agreed to pay the annual levy contemplated by the Trust Deed and, further, they wish to be excluded from any use of the Common Property. They rely on the Positive Covenants Argument (defined below) to defeat the respondents’ debt action against them. The respondents are the current trustees of the Wychwood Park trust.

The appellants deny any liability for the contested levies. They contend that the covenant to pay contained in the Trust Deed offends the well-established common law rule that positive covenants do not run with freehold land, whether in law or in equity. This rule is commonly referred to as the rule in Austerberry v. Oldham Corpn. (1885), 29 Ch. D. 750 (C.A.), which has clearly been adopted in Canada: Parkinson v. Reid, [1966] S.C.R. 162. The appellants argue that, as no exception to this general rule is recognized under Ontario law, the requirement under the Trust Deed to pay the annual levy is unenforceable as against them (the “Positive Covenants Argument”).

In Amberwood Investments Ltd. v. Durham Condominium Corp. No. 123 (2002), 58 O.R. (3d) 481 (CA), leave to appeal to S.C.C. abandoned, [2002] S.C.C.A., the Ontario Court of Appeal held that the common law rule that positive covenants do not run with freehold land is settled law in Ontario and that legislative action is required and advisable for any reform of it. The Court also considered whether two exceptions to this rule recognized under English law, known as the “benefit and burden exception” and the “conditional grant of easement exception”, could and should be adopted in Ontario.

The majority in Amberwood concluded that it would be inadvisable to adopt the benefit and burden exception to the rule about positive covenants in Ontario. The majority also declined to import the conditional grant exception.

The litigation history in this matter involved two Small Claims Court actions for unpaid annual levies and two subsequent appeals to a single judge of the Divisional Court. Regarding the second action, Deputy Judge Caplan accepted the Positive Covenants Argument advanced by the appellants. However, the appeal judge allowed the appeal, set aside Deputy Judge Caplan’s judgment and ordered the appellants to pay the unpaid levies for 2010 to 2013 in the amount of $12,799.81.  The appeal judge also granted an unqualified declaration that they were liable to pay the annual levies assessed against their property in accordance with the Trust Deed.

Issues:

(1) Did the appeal judge err by failing to follow binding appellate precedent, namely, the majority decision in Amberwood?

(2) Did the appeal judge err by finding that the benefit and burden exception forms part of the law of Ontario and applies on the facts of this case?

(3) Did the appeal judge err by finding that the conditional grant exception forms part of the law of Ontario and applies on the facts of this case?

(4) Did the appeal judge err by finding that the principle of res judicata operates to prevent the appellants from arguing that they receive no benefit under the Trust Deed? and

(5) Did the appeal judge err by granting declaratory relief requiring the appellants to pay the annual levies under the Trust Deed in perpetuity?

Holding:

Appeal allowed.

Reasoning:

(1) Yes. The Court held that it was unnecessary for the disposition of the appeal to address all the grounds of appeal raised by the appellants. The Court concluded that the appeal judge erred in law by failing to follow binding appellate precedent, namely, the Court’s majority decision in Amberwood, and by holding that the benefit and burden and conditional grant exceptions to the positive covenants rule applied in this case. The appeal judge was not entitled to adopt, as she did, the minority opinion in Amberwood as reflecting current Ontario law, either on the basis of an alleged evolution in the English jurisprudence concerning the positive covenants rule or in reliance on her interpretation of the decision of another Superior Court judge in another case.

The majority decision in Amberwood remains good law in Ontario. Recently, in Heritage Capital Corp. v. Equitable Trust Co., the Supreme Court cited Amberwood, at para. 25, for the proposition that the positive covenants rule applies “even if an agreement contains an express intention to the contrary”. The Court went on to state: “As a result, the common law rule is that ‘[n]o personal or affirmative covenant, requiring the expenditure of money or the doing of some act can, apart from statute, be made to run with the land.’”

Amberwood was directly relevant to the matters in issue before the appeal judge. It was also a precedent binding on her. Absent reconsideration by the Court of Appeal of its decision in Amberwood (which is not requested by the parties), or an authoritative pronouncement by the Supreme Court of Canada that displaces the majority’s holdings in Amberwood (which not only has not occurred, but would run contrary to Heritage Capital), it was not open to the appeal judge to disregard the binding majority opinion in Amberwood and, instead, to adopt and follow the minority opinion in that case. She erred in law in so doing.

(2) Yes. The benefit and burden exception to the positive covenants rule does not form part of Ontario law at the present time. In Amberwood, the majority unequivocally held that the principle of benefit and burden, often referred to as the doctrine in Halsall v. Brizell, [1957] 1 All E.R. 371, has not been and should not be imported into Ontario law absent legislative reform in this area of the law.

Thus, the acceptance of a benefit under a deed, by itself, will not trigger liability under a positive covenant set out in the same deed. Based on her extensive review of the English authorities, Charron J.A. concluded in Amberwood, at para. 73: “The simple fact that Amberwood received certain benefits upon obtaining title to the Phase 2 lands is clearly not sufficient, without more, under the English common law to render it liable under the positive covenant contained in the same instrument.” Rather, to trigger liability under the positive covenant, there must be a correlation, evident in the deed itself, between the benefits received and the burden of the positive covenant. The operation of the rule is not defeated merely by reason of a successor landowner having acquired the lands in question with notice of the positive covenant.

Accordingly, some other recognized legal principle, other than acquisition of the property in question with notice of the term under the Trust Deed providing for payment of the annual levy, must apply in order to conclude that the appellants are bound under the Trust Deed to pay the annual levy.

(3) Yes. The majority in Amberwood, did not accept that a conditional grant exception should be recognized under Ontario law as a separate and distinct exception to the positive covenants rule. The majority concluded that none of the grants of benefit or easement in the agreement at issue in Amberwood was framed in a manner that limited the scope of the grants themselves. At its highest, all that the agreement did was reflect the parties’ intention to write in, as a term of their contractual bargain, the benefit and burden principle. This attempt to create a contractual exception to the positive covenants rule, while binding on the original contracting parties, could not displace the rule that positive covenants do not bind successors-in-title.

The Court disagreed with the appeal judge’s conclusions that under Ontario law, the conditional grant principle applies as a free-standing exception to the positive covenants rule, separate and apart from the benefit and burden principle. Moreover, the Court held that the fact that the appellants had knowledge of the Trust Deed is no bar to the operation of the positive covenants rule. The appellants had never agreed to pay the levies, and they disclaim any benefits under the Trust Deed. Further, there had been no binding judicial finding that the appellants are beneficiaries of the trust or that, in fact, they have derived benefits from it.

Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), 2017 ONCA 395

[Strathy C.J.O., Laskin and Trotter JJ.A.]

Counsel:

D. J. Fife and M. Anne Cameron, for the appellant
V. Genova, for the respondent

Keywords: Insurance Law, Duty of Good Faith, Duty to Inform, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Insurance Act, R.S.O. 1990, c. I.8

Facts:

The appellant was a self-employed eaves trough installer. In 1999, he bought an insurance policy from the respondent. The policy insured him against disability arising from accidents. In 2004, he purchased additional coverage for disability arising from sickness.

In September 2007, the appellant fell from a roof and suffered serious injuries. He received disability benefits until November 2011, when the respondent terminated its payments because he no longer had a “total disability”, as defined by the policy. On January 12, 2012, the respondent’s lawyer wrote to the appellant explaining that since benefits had been paid for 24 months, he was not entitled to receive further benefits unless he was unable to engage in any and every occupation for which he was reasonably fit by reason of his education, training and experience.

In early 2015, the appellant consulted counsel, who told him that there was a two-year limitation period on his claim protesting the termination of his benefits. The appellant alleges that, had the insurance company told him about the limitation period when it denied his claim, he would have brought an action earlier. He commenced this action in April 2015, more than two years after the termination of his benefits and receipt of the letter from the respondent’s lawyer.

Before the motion judge, the appellant argued that the respondent’s denial was not sufficiently clear and unequivocal to trigger the limitation period. The motion judge found against him, holding that the limitation period began to run when the appellant received the lawyer’s letter on January 12, 2012. The appellant did not pursue that argument on appeal.

The appellant’s alternative submission in the court below, and the one advanced on appeal, was that the insurer’s duty of good faith and fair dealing obliged it to advise its insured of the applicable limitation period on denying or discontinuing insurance benefits and that the two-year limitation period did not begin to run until the insurer gave this notice. The motion judge rejected this argument. The appellant appealed on this ground.

Issue:

Does the insurer’s common law duty of good faith and fair dealing require it to inform he insured of the existence of the limitation period?

Holding:

Appeal dismissed.

Reasoning:

No. Under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, the limitation period began to run when the claim was “discovered”, as determined by s. 5.

The insurer’s duty of good faith did not require it to give notice of the limitation period to its insured. There is no doubt that parties to an insurance contract owe each other a duty of utmost good faith. The duty of good faith is not the same as a fiduciary duty. At its highest, the obligation of good faith and fair dealing arguably carries with it a positive obligation on an insurer to inform its insured of the nature of the benefits available under the policy. In this case, however, the appellant asks the court to extend the duty of good faith to require an insurer to disclose information outside the policy – namely, the existence of a limitation period.

Some commentators have suggested that it would be severe and unfair for the insured to be denied benefits when the insurer was aware of the limitation period, but the insured was not: see, for example, Roderick Winsor, Good Faith in Canadian Insurance Law (Toronto: Thomson Reuters Canada, 2016), at para. 2.30. However, the appellant acknowledges that no Canadian case has gone that far. While no court has imposed a duty on the insurer to inform the insured of the limitation period, some legislatures have done so. Ontario’s Insurance Act, R.S.O. 1990, c. I.8 was amended in 2012 to require life, disability and creditors insurers to include a statement in regards to the Limitations Act, 2002 in the insurance policy and certificate; however, the Ontario legislature could have gone much further, for example, by adopting the approach taken in Alberta or British Columbia (which both require notice of the limitation period). The Ontario legislature presumably chose not to do so and the court should not impose consumer protection measures on insurers, outside the terms of their policies, that the legislature has not seen fit to require.

The consequences of the appellant’s proposed expansion of the duty of good faith are significant. The appellant’s interpretation would effectively judicially overrule the provisions of the Limitations Act, 2002 by making notice given by an insurer to an insured the trigger for the limitation period, rather than discoverability of the underlying claim. This would defeat the purpose of the statute and bring ambiguity, rather than clarity, to the process.

Under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, the limitation period began to run when the claim was “discovered”, as determined by s. 5. The insurer’s duty of good faith did not require it to give notice of the limitation period to its insured. While the legislatures of some provinces have imposed a statutory obligation to that effect, there is no such requirement in Ontario. Whether there should be is a matter left to the legislature.

Temelini v. Canada Permanent Trust Company, 2017 ONCA 410

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

H. Walch, for the appellant

G. B. Dingle and A. Laskin, for the respondents

T. Gleason and R. Glass, for the interveners, Claudio Martini and Shulgan Martini, Marusic LLP

Keywords: Civil Procedure, Dismissal for Delay

Facts:

In 1984, the appellant, Paul Temelini, commenced an action against the RCMP and other defendants for, among other things, malicious prosecution resulting from fraud charges, for which he was ultimately acquitted (the “RCMP Action”). In the RCMP Action, documentation was produced by the RCMP that led Mr. Temelini to believe that he had a cause of action against the respondents. Specifically, Mr. Temelini alleges that the respondent, Robert Thorn, an employee of the respondent Canada Permanent Trust Company, provided confidential financial information about him and his businesses to the RCMP during the course of the RCMP’s criminal investigation.

Mr. Temelini commenced this action against Canada Permanent Trust Company, a successor company, and Mr. Thorn (the “Canada Permanent Action”) in 2004, seeking damages for the alleged wrongful disclosure. By 2016, the Canada Permanent Action had not progressed beyond the pleading stage. Mr. Temelini had not delivered an affidavit of documents, no discoveries had taken place, and no production had been made. The respondents brought a motion to dismiss for delay.

In granting the respondents’ motion, the motion judge found that the lengthy delay in this case was inexcusable and was attributable to Mr. Temelini’s decision to prioritize the RCMP Action over the Canada Permanent Action. He concluded that while the actions were subject to a common timetable and joint case management, the appellant consigned the Canada Permanent Action to “dormancy” while the RCMP Action proceeded to trial. The motion judge also found that the death of the key witness for the RCMP constituted prejudice to the respondents and that a fair trial was no longer possible.

Issues:

  1. Did the motion judge err in not considering all of the relevant circumstances in determining whether there was a reasonable explanation for the delay?
    1. Specifically, did he err in failing to take into account the status of the RCMP Action and the alleged deliberate deceit perpetrated by his second counsel regarding the status of the Canada Permanent Action?
  2. Did the motion judge err when he found that he had prioritized the RCMP Action?

Holding: Appeal dismissed.

Reasoning:

  1. No. The motion judge carefully reviewed the circumstances surrounding the failure of Mr. Temelini to advance the Canada Permanent Action. He specifically considered the impact of an order made in 2008 by Master Beaudoin that the two actions be case managed together and subject to a common timetable. The motion judge’s conclusion was amply supported by the evidence. The incontrovertible fact is that, while the RCMP Action proceeded to trial, the Canada Permanent Action never advanced beyond the pleading stage after 12 years. The court accepted that the RCMP Action was complex and time-consuming, but that did not excuse Mr. Temelini’s failure to take any steps to advance the Canada Permanent Action.
  2. No. In finding that the delay was inexcusable, the motion judge also considered and rejected Mr. Temelini’s argument that the delay was attributable to the conduct of his second counsel in the Canada Permanent Action, Mr. Martini. The motion judge recognized the disputed evidence regarding Mr. Martini’s role in the delay, but he reiterated his conclusion that the appellant made a decision “to prioritize the RCMP action over that as against Canada Permanent” and found that “the time scope of [Mr. Temelini’s] non-disclosure to Canada Permanent is so broad that it cannot be explained away by the narrow involvement of Mr. Martini.” The motion judge held that any production failures that took place during Mr. Temelini’s retainer of Mr. Martini were “typical” of Mr. Temelini’s approach to the Canada Permanent Action throughout its duration, “not just the discrete part handled by Mr. Martini.”

The motion judge was aware of the allegation that Mr. Martini deliberately misled Mr. Temelini by telling him that production had been made in the Canada Permanent Action. However, he was entitled to discount that evidence given that production had not been made prior to Mr. Martini’s retainer or after his withdrawal from the case.

Criminal Decisions:

United States v. Lane, 2017 ONCA 396

[Laskin, Watt, and Hourigan JJ.A.]

J. Norris, for the applicant

R. Kramer and M. Rahman, for the respondent

Keywords: Criminal Law, Child Pornography, Extradition, Treaty on Extradition Between the Government of Canada and the Government of the United States of America, Judicial Review

R. v. J. C. (Publication Ban), 2017 ONCA 392

[Strathy C.J.O., Cronk and Pepall JJ.A.]

Counsel:

G. Cudmore, for the appellant

J.  Witkin, for the respondent

Keywords:

Criminal Law, Publication Ban, Sexual Interference, R. v. W.(D.), (1991), 63 C.C.C. (2d) 399, Evidence, Credibility, Deference

R. v. Kossyrine, 2017 ONCA 388

[Laskin, Watt and Hourigan JJ.A.]

Counsel:

V. Rondinelli, for the appellant

M. Bernstein, for the respondent

Keywords: Criminal Law, First Degree Murder, Juries, Challenges for Cause, Discharging Juror, New Trial

R. v. Bullock, 2017 ONCA 398

[MacPherson, Blair and Epstein]

Counsel:

J.  Shanmuganathan, for the appellant

A. Cappell, for the respondent

Keywords: Criminal Law, Armed Robbery, Aggravated Assault, Assault with a Weapon, Unlawful Confinement

R. v. Murray (Publication Ban), 2017 ONCA 393

Counsel:

P. Campbell, for the appellant

G. Choi and L. Schwalm, for the respondent

Keywords: Criminal Law, Publication Ban, First Degree Murder, Accessory, State of Mind, Knowledge, Juries, Challenges for Cause, Charge to the Jury, Evidence, Credibility, Reliability, Inconsistent Statements

R. v. Agtual, 2017 ONCA 404

[Rouleau, Trotter and Paciocco JJ.A.]

Counsel:

I. Grant, for the appellant

R. Shallow, for the respondent

Keywords: Criminal Law, Possession of Weapon, Evidence

R. v. Ibrahim, 2017 ONCA 400

[Hoy A.C.J.O., LaForme and Benotto JJ.A.]

Counsel:

S. Ibrahim, appearing in person

R. De Filippis, for the respondent

Keywords: Criminal Law, Criminal Code, s. 839(1), Summary Conviction, Question of Law

R. v. Mathur, 2017 ONCA 403

[Gillese, Huscroft and Trotter JJ.A.]

Counsel:

E. Taché-Green, for the appellant

E. Carley, for the respondent

Keywords: Criminal Law, Fraud, Criminal Code, s. 380(1)(a), Sentencing, Character Reference, Restitution

R. v. Pearson, 2017 ONCA 389

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

Counsel:

M. Halfyard and B. Vandebeek for the appellant

B. Wassenaar and H. Leibovich for the respondent

Keywords: Criminal Law, Murder, Pre-Trial Ruling, Admissibility of Evidence, Voluntariness, Canadian Charter of Rights and Freedoms, s. 10(b), Search Incident to Arrest, Evidence, Admissibility, Probative Value, Prejudice

R. v. Pitt, 2017 ONCA 401

[Hoy A.C.J.O., Feldman and Benotto JJ.A.]

Counsel:

R.  Pitt, appearing in person

H. Pringle, appearing as amicus

C. Harper, for the respondent

Keywords: Criminal Law, Criminal Code, s. 259(4)(b), Driving While Disqualified, Possession of Prohibited Items, Sentencing, Forfeiture Order, Vehicle Seizure, Probation

R. v. Last (Publication Ban), 2017 ONCA 406

[MacPherson, Blair and Epstein JJ.A]

Counsel:

D. J. Brodsky, for the appellant

D. Arron, for the respondent

Keywords: Criminal Law, Publication Ban, Dangerous Offender, Repetitive Behaviour, Severe Psychological Damage, Criminal Code, s. 753(a)

R. v. Burke, 2017 ONCA 405

[MacPherson, Blair and Epstein JJ.A.]

Counsel:

M. Halfyard and C. McKeown, for the appellant

H. Loubert, for the respondent

Keywords: Criminal Law, Robbery, Aggravated Assault, Repeat Offender, Sentencing, Proportionality, Mitigating Circumstances

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.

ONTARIO COURT OF APPEAL SUMMARIES (MAY 8 – 12, 2017)

Good Afternoon.

In a problematic and highly technical decision in Pennyfeather v. Timminco Limited, the Court of Appeal upheld the dismissal of a secondary securities market misrepresentation class action on the basis that it ran afoul of the hard three-year limitation period set out in s. 138.14 of the Securities Act. That limitation period commences from when the misrepresentation was first made and discoverability or continuing misrepresentations play no part in extending the limitation period. It was not sufficient for the claim to be issued to toll the limitation period (the claim was issued about a year after the misrepresentation). Leave to proceed with the claim had to be obtained before the end of the three years (this had been decided in Timminco #1 and confirmed in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60). Alternatively, the application for leave had to at least have been brought within the three years, in which case, if leave were granted, it could be granted nunc pro tunc. Unfortunately, in this case, the leave motion had not been brought within three years, although that had been partly due to the fact that the court would not schedule it in time.

Congratulations to our very own Jason Mangano and Jennifer A. O’Dell, who were successful in Royal & Sun Alliance Insurance Company of Canada v Intact Insurance Company. In a contest between insurers as to responsibility for indemnifying victims of an accident, at issue was whether an endorsement of an automobile insurance policy that excludes coverage for a named driver is valid even though its form is not that pre-approved by the Superintendent of Financial Services, as required by s 227(1) of the Insurance Act. The Court held that the use of the unapproved form did not invalidate the exclusion from insurance coverage. As a result, RSA was responsible to indemnify under its uninsured motorist coverage.

Other substantive decisions this week included those pertaining to emergency orders under the Building Code Act, and reasonable apprehension of bias.

Have a great weekend.

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

Table of Contents:

Sutherland Lofts Inc. v. Peck, 2017 ONCA 368

Keywords: Municipal Law, Building Code Act, Orders to Remedy Unsafe Building

Pennyfeather v. Timminco Limited, 2017 ONCA 369

Keywords: Class Actions, Torts, Misrepresentation, Securities Law, Secondary Securities Market, Limitation Periods, Ontario Securities Act, R.S.O. 1990, c. S.5, Part XXIII.1, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 28, Timminco #1, Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, Costs, Issue Estoppel, Henderson v. Henderson (1843), 67 E.R. 313

Royal & Sun Alliance Insurance Company of Canada v Intact Insurance Company, 2017 ONCA 381

Keywords: Insurance Law, Automobile Insurance, Excluded Driver Endorsements, Validity, Insurance Act, RSO 1990, c I.8, s 227(1), Unfair or Deceptive Acts or Practices, Financial Services Commission of Ontario Act, 1997, SO 1997 c 28, s 439, O Reg 7/00, Statutory Interpretation

Cannon v. Cemcor Apartments Inc., 2017 ONCA 378

Keywords: Torts, Negligence, Slip and Fall, Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Reasonable Apprehension of Bias

Azzeh v. Legendre, 2017 ONCA 385

Keywords: Motor Vehicle Accident, Notice to Municipality, s. 44(10) Municipal Act, 2001, Limitations Act, 2002, Plaintiff with a Disability, Rule 7.02(2) Rules of Civil Procedure, Lax v. Lax (2004), 70 O.R. (3d) 520 (C.A.), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404, Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A)

Moore v. Apollo Health & Beauty Care, 2017 ONCA 383

Keywords: Employment Law, Constructive Dismissal

For Civil Endorsements, click here.

For Criminal and Ontario Review Board Decisions, click here.

Civil Decisions:

Sutherland Lofts Inc. v. Peck, 2017 ONCA 368

[Weiler, Pardu and Roberts JJ.A.]

Counsel:

T.Halinski and D. Neligan, for the appellants

V. M’Garry, for the respondent

Keywords: Municipal Law, Building Code Act, Orders to Remedy Unsafe Building

Facts:

Sutherland Lofts Inc. (the “respondent”) owned the property located at 606-610 Talbot Street in St. Thomas (the “Building”). The Building was over 100 years old and was purchased by the respondent in 2003 with the plan of renovating it into a combination of commercial and residential apartments. This plan never progressed and the Building sat vacant from at least the date it was purchased by the respondent. Since that time, the condition of the Building deteriorated.

In June 2015, a significant section of the Building’s second floor collapsed and on September 11, 2015, the roof partially collapsed. The Corporation of the City of St. Thomas (“the City”) engaged an engineering firm to inspect the Building and provide a written report with respect to its structural condition. Chris Peck, the City’s Chief Building Official (“CBO”) issued and served on the respondent an Order Prohibiting Occupancy dated September 15, 2015. In response to the engineering report, also dated September 15, 2015, the CBO issued and served on the respondent an Emergency Order the following day on September 16, 2015, to which the engineering report was attached.

Having determined that the immediate danger of collapse had been alleviated by the respondent’s temporary shoring and hoarding work, on November 5, 2015, the CBO lifted the Emergency Order and replaced it with an Order of the Property Standards Officer, which detailed additional work to be completed. On December 3, 2015, the CBO issued the Order to Remedy Unsafe Building, which is the subject of this appeal.

The respondent did not comply with the orders or complete any additional remedial work. It did not appeal any of the orders but brought an application in March 2016 to have the Order to Remedy declared invalid, and to obtain interim injunctive relief, as well as a declaration that the Building was not unsafe. In the alternative, the respondent requested leave to file a late appeal of the November 5, 2015 Order of the Property Standards Officer and the December 3, 2015 Order to Remedy.

The application judge determined that the Order to Remedy was null, void and inoperative for the following reasons:

(i) It did not comply with the Building Code Act (“the Act”) because it was only served on the owner. The application judge concluded that the Order to Remedy should have also been served on the respondent’s property manager and local supervisory agent, as “such other persons affected” by the Order; and

(ii) It lacked the specificity required under the Act.

The application judge concluded that, given her ruling with respect to the invalidity of the Order to Remedy, it was not necessary for her deal with the issue of injunctive relief. Although not stated, presumably also because of her ruling, the application judge did not determine the factual issue of the Building’s structural integrity.

The City and Chris Peck (the “appellants”) appeal the application judge’s order declaring the Order to Remedy Unsafe Building, issued on December 3, 2015 (“the Order to Remedy”), by the CBO, null, void and inoperative. The respondent brings a cross-appeal to obtain an interim injunction preventing the appellants from demolishing the Building, and for a declaratory order that the Building is not “unsafe” as defined in the Act. The application judge declined to deal with these claimed remedies.

Issue:

(1) Were the appeal and cross-appeal moot?

(2) Did the application judge err by determining that the Order to Remedy was null, void and inoperative?

(3) Did the application judge err by determining that the Order to Remedy lacked specificity contrary to the Act?

(4) Should the respondent be granted injunctive and declarative relief?

Holding:

The appeal was allowed. The cross-appeal was dismissed. The issues of whether an interim injunction should be granted, and whether the Building was unsafe, were remitted for hearing before another application judge.

Reasoning:

(1) No. The issues of whether the Order to Remedy lacked specificity and the availability of an interim injunction to prevent demolition, did not raise a hypothetical or abstract question but were still live issues between the parties. The Court of Appeal’s decision would therefore have a practical effect on the parties.

(2) Yes. First, the application judge erroneously declared that the Order to Remedy was null, void and inoperative based on allegedly defective service on the respondent. In the Court’s view, the appellants’ service of the Order to Remedy by registered mail on the respondent as owner of the Building, at the respondent’s last known address, complied with the provisions of ss. 15.9(5) and 27(1) of the Act. It was within the CBO’s discretion as to whether the respondent’s property manager and local supervisory agent should be served with the Order to Remedy.

Further, the Court agreed with the appellants’ submission that the property manager and local supervisory agent were not in possession of the Building, but were at best the respondent’s agents for service. The Building was vacant and there was an order that prohibited occupation. Only the owner was in possession of the Building. As a result, the CBO was not required to serve any other person. There is no basis to suggest that the CBO acted unreasonably in the exercise of his discretion not to serve the respondent’s property manager and local supervisory agent. In any event, delayed service does not invalidate the Order to Remedy.

(3) Yes. The application judge did not provide any reasons or analysis for this conclusion. She also mistakenly referred to s. 15.2(2) of the Act, which prescribes the contents of a Property Standards Order, rather than to s. 15.9 (4), which prescribes the contents of an Order to Remedy Unsafe Building. Unfortunately, her lack of reasons and analysis did not permit the court to conduct a meaningful appellate review. As a result, no deference is owed to her decision and the Court was required to consider the question afresh.

First, s. 15.9(4) of the Act allows for detailed particulars of the remedial steps to be taken to be provided following further investigation. Further, s. 25(4) of the Act allows a judge to order that additional particulars be provided because it empowers a judge to take any action that the CBO may take. In the present case, the court is of the view that the Order to Remedy complies with s. 15.9(4) of the Act, in that it contains sufficient particularity to enable the respondent to know the case it had to meet and the deficiencies that had to be remedied. In particular, the Order to Remedy specifies the areas and items in the Building that comprise the alleged serious, unsafe conditions requiring remediation, including the collapsed and rotten sections of floors and split structural beams that were also noted by the respondent’s own engineer.

When the Order to Remedy is viewed in the context of the long history between the parties, the lengthy correspondence and the detailed engineering reports that the parties exchanged, there can be no doubt that the respondent knew the case it had to meet and the repairs that were necessary to stabilize the Building. Moreover, the respondent applied for a building permit to carry out repairs and its own engineer recommended certain remedial measures that corresponded with those required by the Order to Remedy. The respondent completed some, but not all, of the necessary repairs. The respondent did not complete all of the shoring and hoarding work required, nor any of the waterproofing recommended by its own engineer. This was not due to the respondent’s lack of understanding of what was required, but because of an admitted lack of funds to complete the repairs. Accordingly, the Court saw no basis to invalidate the Order to Remedy.

(4) With respect to the respondent’s request for injunctive and declarative relief, the Court was not in a position to determine these issues on the record before it. In particular, the Court lacked a current evidentiary record describing the present state of the Building. Further, with respect to the injunctive relief requested, the Court had no evidence that the respondent is capable of providing any undertaking with respect to damages. Therefore, the issues of whether an interim injunction should be granted, and whether the Building was unsafe, were remitted for hearing before another application judge.

Pennyfeather v. Timminco Limited, 2017 ONCA 369

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

Counsel:
W. J. Kim, M. C. Spencer and A. Gyamfi, for the appellant/respondent by way of cross-appeal
A. L.W. D’Silva and D. S. Murdoch, for the respondents/appellants by way of cross-appeal Timminco Limited, Dr. Heinz Schimmelbusch, Robert Dietrich, René Boisvert, Arthur R. Spector, Jack L. Messman, John C. Fox, Michael D. Winfield and Mickey M. Yaksich
P. Le Vay, B. Van Niejenhuis and C. Di Carlo, for the respondents Photon Consulting LLC, Rogol Energy Consulting LLC and Michael Rogol
E. Davis, for the respondent John P. Walsh

Keywords: Class Actions, Torts, Misrepresentation, Securities Law, Secondary Securities Market, Limitation Periods, Ontario Securities Act, R.S.O. 1990, c. S.5, Part XXIII.1, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 28, Timminco #1, Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, Costs, Issue Estoppel, Henderson v. Henderson (1843), 67 E.R. 313

Facts:

The statement of claim in this proceeding was filed on May 14, 2009 by Ravinder Sharma, a Timminco shareholder. He sought certification of a class action asserting a statutory claim for misrepresentation by Timminco and its consultants, Photon Consulting LLC (“Photon”) and Rogol Energy Consulting LLC (“Rogol”), in public statements and disclosure documents between March 17, 2008, the date of the first press release and a conference call on May 29, 2008. He also asserted an intention to seek leave to proceed with the statutory cause of action under Part XXIII.1 of the Ontario Securities Act, R.S.O. 1990, c. S.5 (“OSA”), which is a statutory cause of action for misrepresentation in the secondary securities market.

Another law firm commenced a second action on behalf of a different Timminco shareholder in June of 2009. A “carriage dispute” took place between the two law firms as to which action should proceed. On October 29, 2009, the motion judge awarded carriage to the appellant’s counsel in this action. For the next 15 months, the appellant’s counsel focused on attempting to settle the action, probably due to Timminco’s deteriorating financial condition. Little was done to advance the proposed class action. Meanwhile, however, the three-year limitation period was potentially ticking on the OSA cause of action.

A case conference was held on March 10, 2011. The motion judge refused to accelerate the leave and certification motions. Instead, he directed the appellant to bring a motion for “conditional leave” to commence an action under the OSA.

On March 14, 2011, the appellant served a motion, returnable on March 25, 2011, seeking, among other things, a declaration that the three-year limitation period in s. 138.14 of the OSA was suspended by the operation of s. 28 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”), an order granting “conditional leave” to commence an action under s. 138.8(1) of the OSA, and an order tolling the limitation period. The motion was argued on March 25, 2011. As the argument developed, the appellant’s request for conditional leave was not pursued nor did the appellant request nunc pro tunc relief. The submissions focused on whether s. 28 of the CPA had the effect of suspending the limitation period in s. 138.14 of the OSA on the commencement of a putative class action claiming the statutory remedy, even though leave had not been obtained and the appellant had only asserted an intention to obtain leave.

The motion judge concluded that because the statement of claim referred to an intention to commence an action under Part XXIII.1 of the OSA, s. 28 of the CPA suspended the operation of the limitation period in s. 138.14 of the OSA.

After this decision, the appellant served his material for certification and for leave to pursue the statutory claim. This occurred three years and two days after the last alleged misrepresentation identified in the statement of claim. This is the proceeding under appeal in this court.

Meanwhile, the respondents appealed the motion judge’s decision. That resulted in the Court of Appeal’s ruling in Timminco #1, allowing the appeal and determining that s. 28(1) of the CPA did not suspend the limitation period until leave was actually granted. Merely asserting an intention to seek leave was not sufficient. The appellant’s statutory claim was time-barred. Leave to appeal to the Supreme Court of Canada was refused.

Subsequent to Timminco #1, the Supreme Court of Canada released its decision in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60 (“Green (SCC)”). Mr. Pennyfeather’s application for leave to intervene in that appeal was dismissed on December 17, 2014. In Green (SCC), the Supreme Court found that s. 28 of the CPA did not suspend the operation of the limitation period for a statutory claim for misrepresentation before leave had been granted under s. 138.8 of the OSA. This was consistent with the conclusions reached in the Court of Appeal’s decision in Timminco #1. The effect of this was that the three appeals before the Supreme Court in Green (SCC) were time-barred, unless nunc pro tunc relief was available. There was disagreement among the judges who considered nunc pro tunc on its application to the three cases before the court. Côté J. gave the lead judgment. She pointed out that courts have inherent jurisdiction to make orders nunc pro tunc. But she identified an important limit referred to as a “red-line rule”. The red-line rule requires leave to be sought within the limitation period in order for the court’s order to be made nunc pro tunc. Côté J. noted that the case law had identified a number of “non-exhaustive” factors, none of which was determinative, to be considered in deciding whether to grant a nunc pro tunc order. However, leave will not be granted nunc pro tunc when it would undermine the purpose of the limitation period.

In the case at bar, the motion judge held that although the appellant’s nunc pro tunc argument was barred by issue estoppel and by the abuse of process doctrine, he nevertheless had discretion to hear it, relying on Penner v. Niagara (Regional Police Services Board), 2013 SCC 19. In particular, the motion judge observed that the appellant’s nunc pro tunc assertion was not argued at the March 2011 motion and, although the ability of a court to make an order nunc pro tunc was addressed in Green (SCC), the appellant had been denied leave to intervene in that appeal. Therefore, the motion judge exercised his discretion to hear the request for leave under the OSA.

The motion judge then turned to the appellant’s request for leave nunc pro tunc, having regard to the principles set out in Green (SCC). The motion judge found that because the appellant had not sought leave prior to the expiry of the three-year limitation period, it was not appropriate to grant leave nunc pro tunc. The appellant’s motion for “conditional leave” in March 2011 was not a leave motion and a leave motion was never scheduled. Furthermore, he stated that the limitation period in the OSA is an “absolute limitation period” that is “not diluted by principles of discoverability.” Applying the equitable factors from Green (SCC), the motion judge held that, although counsel for the appellant had acted in accordance with the prevailing wisdom that s. 28 of the CPA operated to suspend the limitation period, counsel’s diligence was misdirected. There was no adequate explanation for not advancing the proposed class action on the parallel tracks of litigation and settlement. It was not clear that the respondents were not prejudiced in their ability to defend the action by the passage of time. Finally, there had been no determination of whether the class action had a reasonable possibility of success under s. 138.8 of the OSA, and so it was not possible to rely on the prospects of success to support a nunc pro tunc order.

Pennyfeather appealed. The appellant’s central submission was that in finding that he did not meet the “red-line” rule for equitable relief in Green (SCC), the motion judge erred by overlooking the fact that the appellant’s motion for “conditional leave” was delivered on March 14, 2011, three days before the expiry of any limitation period. The appellant also argued that the motion judge erred in stating that his conditional leave motion was “abandoned”.

On their cross-appeal, the Timminco respondents submitted that the motion judge erred in his application of the principles of res judicata, issue estoppel, and abuse of process.

Issues:

(1) Is nunc pro tunc relief available to the appellant?

(2) If nunc pro tunc relief was available to the appellant, did the motion judge err in principle in the exercise of his discretion in refusing it?

(3) Should the limitation period be extended for later purchasers?

(4) Should leave be granted to the appellants to appeal the motion judge’s award of costs of $124,028.81 to the Timminco respondents and $25,330.07 to the Photon respondents?

(5) Should the cross-appeal be granted?

Holding:

Appeal and cross-appeal dismissed.

Reasoning:

(1) The Court of Appeal found it unnecessary to decide this issue due to the Court’s conclusion that the motion judge did not err in his exercise of discretion in refusing to grant nunc pro tunc relief (if it was even available). At a case conference on March 10, 2011, the motion judge declined to accelerate the scheduling of a certification and leave motion in view of the impending limitation period. The motion judge did, however, direct the appellant to bring a motion to seek “conditional leave” of the court to commence an action under the OSA and to serve that material by March 14, 2011. The meaning of “conditional leave” was not clearly defined. Presumably the intent was that if leave was ultimately granted on the merits, it would be “backdated” or made nunc pro tunc to the date of conditional leave, so as to retrospectively toll the limitation period. In effect, the conditional leave motion was a request for prospective nunc pro tunc relief. Arguably, if leave was ultimately granted, the motion requesting conditional leave would serve as the “tunc” to which the leave order could be “backdated”

Were it necessary to decide this issue, the motion for conditional leave could have served as the anchor for nunc pro tunc relief, had leave ultimately been granted. In the circumstances, it was not clear that using the March 2011 “conditional leave” motion as the anchor for an order nunc pro tunc would necessarily undermine the purpose of the limitation period. In any event, because the Court of Appeal upheld the motion judge’s discretionary refusal to grant nunc pro tunc relief, the Court of Appeal found it unnecessary to decide this issue.

(2) No. The motion judge made no error in principle in the exercise of his discretion not to grant nunc pro tunc relief. Both Côté J. and Cromwell J. in Green (SCC) referred to the deference to be accorded to a judge’s exercise of discretion in either granting or refusing an order nunc pro tunc. Those observations are particularly apt in this case because the motion judge had been case managing this class action since its commencement in May 2009.

The appellant says that the motion judge committed errors in principle: (i) in failing to find that the appeal was pursued diligently; (ii) in failing to find that the appellant’s claim had merit and, instead, treating the merits as neutral; and (iii) in failing to find that the delay was caused by an “act of the court”.

(i) Diligence

No. The motion judge did not err in failing to find that the appeal was pursued diligently. A fair reading of the record indicates that, between mid-May 2010 and mid-February of 2011, very little was happening in the action other than occasional settlement overtures from the appellant’s side. Mr. Sharma, who was then the representative plaintiff, had indicated in the summer of 2009 that he was unable to continue in that capacity and asked to be removed. At the time of the carriage motion in October 2009, counsel indicated that Mr. Pennyfeather was prepared to assume the role. Although a motion to substitute Mr. Pennyfeather as the representative plaintiff was served in January 2010, it was not accompanied by an affidavit from either Mr. Sharma or Mr. Pennyfeather. It was not until February 2011 that the appellant asked the motion judge to schedule a motion to appoint Mr. Pennyfeather in Mr. Sharma’s stead and this motion was heard, together with the “conditional leave” motion, on March 25, 2011. The consequence was that the proposed class action effectively had no representative plaintiff, a fundamental requirement for certification, for some 18 months.

Further, the respondents also served a demand for particulars in December 2009. While the appellant delivered a draft amended statement of claim, it did not fully respond to the respondents’ demand. Thus another very basic task, regularizing the pleading, had not been addressed. Therefore, the evidence supports the motion judge’s finding that the case was not pursued diligently.

(ii) Merits

No. The motion judge did not err by failing to give any weight to the merits of the appellant’s case. The motion judge treated the merits factor as neutral because the merits had not been tested in a contested leave motion. This finding was open to the motion judge.

(iii) Cause of Delay

No. The motion judge did not err in failing to find that the delay was caused by an “act of the court”. The delay here was not caused by an act of the court – it was caused by the appellant’s decision to focus on settlement rather than to advance the statutory claim. It was unrealistic to expect the motion judge to schedule the leave motion at the eleventh hour. The motion judge gave valid reasons for refusing to do so.

(3) No. The limitation period was not extended for later purchasers. The appellant submits that the limitation period did not expire for all class members on May 29, 2011, three years after the date of the last misrepresentation pleaded in the statement of claim. He submits that the Photon Report remained on Timminco’s website until November 11, 2008 and that it gave rise to a new representation each day, triggering the running of a fresh limitation period for every class member who purchased shares between May 14, 2008, the day the Photon Report was posted on Timminco’s website, and November 11, 2008, when the Photon Report was taken down. Thus, claims based on those fresh misrepresentations were not time-barred when the appellant ultimately filed his motion for leave on June 13, 2011.

This submission was rejected for two reasons. First, the appellant’s submission is based on a misconception of the operation of the statutory limitation period. It does not run from the date on which an individual class member saw or heard the misrepresentation or purchased his or her individual shares. It runs from “the date on which the document containing the misrepresentation was first released”. Thus, it is irrelevant to the running of the limitation period that the Photon report remained on Timminco’s website and may or may not have been seen by persons who purchased shares after the date of its first release.

Second, this theory was neither pleaded as part of the appellant’s case nor advanced in the court below. Rule 25.06(8) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 requires a plaintiff to plead full particulars of any misrepresentation. The obvious purpose is to avoid surprise. Nowhere in the statement of claim does the appellant plead a theory of a representation after May 29, 2008 or any continuing representations.

(4) No. Leave should not be granted to the appellant to appeal the motion judge’s award of costs of $124,028.81 to the Timminco respondents and $25,330.07 to the Photon respondents. The awarding and fixing of costs is highly discretionary and is afforded a high level of deference on appeal. The motion judge’s decision with respect to costs was based on his consideration of the relevant principles. The appellant has identified no error in principle in the exercise of his discretion.

(5) No. Due to the disposition of the appeal, it was unnecessary to determine the respondents’ cross-appeal, which asserted that nunc pro tunc relief was barred by the doctrines of res judicata, issue estoppel or abuse of process. However, if considered, the Court would have found that the motion judge did not err in the exercise of his discretion to hear the appellant’s motion. The cross-appeal raised a novel and challenging question, namely whether the principle in Henderson v. Henderson (1843), 67 E.R. 313, 3 Hare 100 (V.C.), applies to issue estoppel. That principle, applicable to cause of action estoppel, holds that a final decision of the court bars re-litigation not only of what was decided, but also what could and should have been decided by the court. The motion judge concluded that both issue estoppel and abuse of process likely applied to prevent the appellant from seeking nunc pro tunc relief because he could have requested that relief when he brought his “conditional leave” motion or on his previous appeal to this court.

However, there is a discretionary element to the application of those doctrines. The motion judge found it was appropriate to exercise that discretion in Mr. Pennyfeather’s favour because Mr. Pennyfeather never had an opportunity to make the argument. He was denied leave to appeal to the Supreme Court in the original Timminco #1 case and he was not permitted to intervene in the appeal to the Supreme Court in Green (SCC). Thus, he never had an opportunity to make an argument about his entitlement to nunc pro tunc relief and it was in the interest of justice that he be given an opportunity to do so. Therefore, the motion judge did not err in exercising his discretion to hear the motion for leave nunc pro tunc, because the appellant never had an opportunity to raise an issue which subsequent jurisprudence revealed should have been raised.

Royal & Sun Alliance Insurance Company of Canada v Intact Insurance Company, 2017 ONCA 381

[Juriansz, Brown and Miller JJ.A.]

Counsel:

C. P. Klinowski, for the appellant

Jason P. Mangano and Jennifer A. O’Dell, for the respondent

Keywords: Insurance Law, Automobile Insurance, Excluded Driver Endorsements, Validity, Insurance Act, RSO 1990, c I.8, s 227(1), Unfair or Deceptive Acts or Practices, Financial Services Commission of Ontario Act, 1997, SO 1997 c 28, s 439, O Reg 7/00, Statutory Interpretation

Facts:

Diane Wilson and her husband met with her insurance broker on February 29, 2012, because her driver’s licence had been suspended and the insurance on the 2004 Impala she owned was being canceled. She wished to maintain insurance coverage on her car so her husband could drive it. Insurance was arranged with the respondent, Intact, on the basis that Wilson would be an excluded driver. Wilson executed an Excluded Driver Endorsement.

The trial judge found that when Wilson completed the form the broker explained to her and she clearly understood that, even if the licence were to be reinstated, Intact still would not insure her and the Excluded Driver Endorsement would continue to apply. Wilson’s licence was reinstated, she drove the vehicle, and had an accident in which Rita and Cathy MacLeod were injured. The MacLeods commenced a personal injury action against Wilson. The MacLeods’ uninsured motor vehicle carrier, Royal & Sun Alliance Insurance Company of Canada (RSA), is the appellant. RSA brought an application for a declaration Wilson was fully insured by Intact. Intact, relying on the Excluded Driver Endorsement, took the position there was no coverage and Wilson was uninsured.

The application judge found the Excluded Driver Endorsement was in full force and effect at the time of the accident and that Intact had no duty to defend or indemnify Wilson in respect of the accident. RSA appealed from that decision.

Issue:

Whether an endorsement of an automobile insurance policy that excludes coverage for a named driver is valid even though its form is not that pre-approved by the Superintendent of Financial Services, as required by s. 227(1) of the Insurance Act, RSO 1990, c I.8

Holding:

Appeal dismissed.

Reasoning:

The use of the unapproved form, as alleged, does not necessarily invalidate an agreement between the parties about exclusion from insurance coverage.

Royal’s main argument on appeal was that the Excluded Driver Endorsement was not in the form pre-approved by the Superintendent and was void because it did not strictly comply with s. 227(1) of the Insurance Act. On the form that Wilson executed, the boxes in the pre-approved standard form were not filled out. Rather, the words “See Certificate of Automobile Insurance” were written in across the boxes. The Certificate of Insurance set out the identifying details of the vehicle. Assuming that the Excluded Driver Endorsement was not in pre-approved form, the question was whether s. 227(1) rendered an unapproved form void. The section itself is silent on the effect of using a form that had not been pre-approved. It was necessary for the Court to interpret s. 227 in the context of the Act, its purposes and the regulatory scheme as a whole to determine the legislative intent. The Court concluded the legislature intended that a lack of compliance with s. 227(1) is a matter for the Superintendent. It was not the role of the courts, while applying the law of contract, to read into s. 227 that a non-compliant form is necessarily void as a matter of contract law.

(a) The objectives of the regulatory automobile insurance regime

The main objectives of the regulatory automobile insurance regime in Ontario include consumer protection and guaranteed compensation of victims: Smith v Co-Operators General Insurance Co: 2002 SCC 30; Peixeiro v Haberman, [1997] 3 SCR 549. The consumer protection objective was at play in this case. The question was whether Wilson, as a consumer of insurance, should be protected from her insurer’s use of an unapproved form. The victims requiring compensation in this case were the MacLeods. No matter the outcome, they could claim compensation from one of the two insurers.

The Smith decision involved the validity of an insurer’s notice under s 71 of the Statutory Accident Benefits Schedule advising the insured of the termination of her statutory benefits. After noting the important consumer protection purpose of the insurance scheme, the court cautioned that it is not the role of the court to set out the specific content of insurance refusal forms. That task was better left to the legislature. However, it is appropriate for the court to interpret in general terms what the legislature intended the insurer to convey under s 71. In furthering the consumer purpose of the Act, courts should limit their role to implementing the insurance regime as designated by the legislature.

(b) The statutory setting of s 227 of the Insurance Act

Section 239(1) of the Insurance Act provides that “every contract evidenced by an owner’s policy insures the person named therein”. Section 240 creates an “excluded driver” exception, defined in s. 224(1) as “a person named as an excluded driver in an endorsement under s. 249”. Section 249 provides that an insured “may stipulate by endorsement to a contract evidenced by a motor vehicle liability policy that any person named in the endorsement is an excluded driver under the contract.” In that context, s. 227(1) provides that an insurer shall not use a form for an endorsement unless the form is approved by the Superintendent. All of these provisions refer to the “contract” between the insured and the insurer

(c) The Superintendent’s regulatory powers

The Superintendent appointed under the Financial Services Commission of Ontario Act, 1997, SO 1997 c 28, has the general function of administering and enforcing the Insurance Act. Section 439 of the Act provides that “no person shall engage in any unfair or deceptive act or practice”. “Unfair or deceptive acts or practices” are prescribed by O Reg 7/00. The Regulation prescribes as an unfair or deceptive at or practice “the use of a document in place of a form approved for use by the Superintendent, unless none of the deviations in the document from the approved form affects the substance or is calculated to mislead.” Section 441(2) of the Act gives the Superintendent the power to order a person to cease or refrain from an unfair or deceptive act, to perform acts to remedy the situation, and even to cease engaging in the business of insurance or any aspect of the business of insurance.

The Court drew from reading s. 227(1) in context that the legislature did not intend for the courts, while engaged in adjudicating a contractual dispute, to consider a contractual provision void merely because its form fails to strictly comply with s. 227(1) of the Insurance Act. The court’s function is to determine the contractual dispute, and any alleged breach of s. 227(1) is a matter for the Superintendent. In fulfilling its function, the court may well consider an alleged deviation from a pre-approved form to the extent it is relevant to its enforceability in contract.

The Court found support for this interpretation in s. 126, which seems to indicate that the role of the courts is to determine the validity of contracts of insurance as a matter of contract law and the consequence of a failure to comply with a provision of the Act is to be determined as specifically set out by the Act and its regulations.

The application judge was correct in finding that the Excluded Driver Endorsement on the Intact policy insuring Wilson’s vehicle was in full force and effect on June 6, 2012, when Wilson was involved in an accident with the MacLeods.

Cannon v. Cemcor Apartments Inc., 2017 ONCA 378

[Doherty, Benotto and Trotter JJ.A.]

Counsel:

P. J. Pape, for the appellant

A. Rachlin, for the respondent

Keywords: Torts, Negligence, Slip and Fall, Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Reasonable Apprehension of Bias

Mr. Cannon slipped on the ice in the parking lot of the apartment where he lived and broke his leg. Under the terms of his lease, the landlord, Cemcor Apartments Inc. (“Cemcor”), was responsible for maintaining the parking lot. Cemcor had a contract with Myles Property Management Inc. (“Myles”) to clear the snow and ice from the parking lot.

Mr. Cannon sued Cemcor for negligence. It is common ground that under the Occupiers’ Liability Act, R.S.O. 1990, c. O.2, Cemcor owed a duty of care to Mr. Cannon. In the language of the statute, Cemcor was under a duty “to take such care as in all of the circumstances of the case is reasonable” to ensure that Mr. Cannon was “reasonably safe while on the premises.”

The trial judge dismissed the claim. Mr. Cannon appealed. At the end of oral argument, the court advised counsel that the appeal was dismissed.

Issue:

(1) Did the trial judge err in finding that Cemcor followed its own maintenance policy on the day of the accident?

(2) Did the trial judge’s interventions in the course of the trial demonstrate a reasonable apprehension of bias?

Holding: Appeal dismissed.

Reasoning:

(1) No. In considering whether, according to Cemcor’s own maintenance criteria, the entire parking lot should have been plowed, the trial judge focused on the actual conditions in the parking lot at the time of the accident, as described by various witnesses called by both Mr. Cannon and Cemcor.

The trial judge ultimately held, based largely on the evidence of defence witnesses, but to some extent on Mr. Cannon’s evidence, that the parking lot was adequately cleared at the time of the accident, but for the “isolated slippery spot” on which Mr. Cannon slipped and fell.

The trial judge made no factual error in his analysis of the evidence. The condition of the parking lot at the time Mr. Cannon fell was the crucial factual issue. Evidence of Cemcor’s snow removal policy, evidence of snowfalls in the preceding weeks and days, and the Environment Canada records of snowfall at the Sudbury airport, some 20 to 25 kilometres away from the parking lot, while no doubt relevant, were regarded by the trial judge as of secondary value to the descriptions of the condition of the parking lot given by the persons who were in the parking lot on the day of the accident.

It was open to the trial judge to treat the firsthand evidence of the witnesses as more probative of the condition of the parking lot at the time of the accident than the statistical information from Environment Canada.

The Court of Appeal rejected the argument that the Environment Canada records unequivocally established that the amount of snow on the ground in the parking lot was in excess of the amount that on Cemcor’s own maintenance criteria required the plowing of the entire parking lot. While the records indicated significant snowfall in the Sudbury area in December and January, they were not so compelling as to require the trial judge to reject the evidence of the witnesses who were actually in the parking lot on the day of the accident. The trial judge made no error in his analysis of the evidence.

(2) No. The interventions by the trial judge during closing argument were not inappropriate. There were many interventions by the trial judge during counsel’s cross-examination of the defence witnesses. Some were appropriate. Trial judges have a responsibility to ensure that cross-examinations are conducted fairly and in accordance with the rules of evidence. It was also appropriate for the trial judge to interrupt counsel when the purpose of a certain line of questioning was unclear to the trial judge. Sometimes, a trial judge cannot assess relevancy without some idea of where a line of questioning is going.

It must be said that the efficiency and, perhaps more importantly, the tone of the trial suffered, to some degree, as a result of the trial judge’s many interventions and the tensions that developed between counsel and the trial judge as a result of those interventions. The court understood the appellant’s concern about the appearance of fairness. However, the trial judge’s interventions did not rise to the high level required to displace the presumption of judicial impartiality.

Having regard to that presumption, a reasonable person, properly informed, would not apprehend bias as a result of the trial judge’s interventions.

The Court of Appeal also disagreed that the transcript showed that the trial judge took over carriage of the defence. As counsel for the respondent correctly pointed out, it was impossible to say from the transcript alone whether some of the trial judge’s interventions were at his own initiative, or in response to defence counsel standing to make an objection.

Azzeh v. Legendre, 2017 ONCA 385

[Weiler, Benotte and Roberts JJ.A.]

Counsel:

S. Zacharias and N. Marotta, for the appellant the City of Greater Sudbury

G.Mazin, S. Sharma, I. Ahsan, and H. Tse, for the respondent Bayden Zachary Azzeh

W.G Scott, for the proposed defendant, Wallbridge, Wallbridge

Keywords: Motor Vehicle Accident, Notice to Municipality, s. 44(10) Municipal Act, 2001, Limitations Act, 2002, Plaintiff with a Disability, Rule 7.02(2) Rules of Civil Procedure, Lax v. Lax (2004), 70 O.R. (3d) 520 (C.A.), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404, Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A)

Facts: Bayden Azzeh suffered brain injuries in a car accident in Sudbury on September 7, 2007, when he was 17 days old. His mother, Julia Neville, was driving the car. After the accident, Neville retained the firm Wallbridge, Wallbridge to act on her and Bayden’s behalf. The contingency fee agreement was for both mother and son. The statement of claim was issued in 2008 and settled in 2011.

In 2014, Neville issued a statement of claim on Bayden’s behalf against the driver and owner of the other car. Neville did not swear the affidavit required to be sworn as a litigation guardian.  In 2015, Bayden changed lawyers and his grandmother Ingrid swore an affidavit as litigation guardian. Bayden’s lawyers brought a motion to amend the pleadings to add the City of Sudbury, among others, as a defendant and to increase the amount of damages sought.

The City unsuccessfully opposed the motion on two grounds: first, the claim was statute-barred as under the two-year limitation period of the Limitations Act, 2002, and second, the claim was barred because Bayden failed to give the City notice within ten days of the accident, as required under s. 44(10) of the Municipal Act, 2001, SO 2001, c. 25.

The City appealed.

Issues:

(1) Did the motion judge err in finding that the two-year limitation period under the Limitations Act, 2002 did not bar the claim against the City?

(2) Did the motion judge err in finding that notice had been given to the City within the ten-day period set out in s. 44 of the Municipal Act, 2001?

(3) Did the motion judge err in finding that there was no prejudice to the City?

Holding: Appeal allowed.

Reasoning:

Where an order has both final and interlocutory aspects that are so interrelated that once the first issue was before the court, leave would inevitably be granted on the second, both aspects can be heard by the court: Lax v Lax.

(1) The motion judge held that Bayden was not represented by a litigation guardian until June 11, 2014, once Neville issued the statement of claim on Bayden’s behalf, and that is when the two-year limitation period began to run. The Court agreed.

Where the person with a claim is a minor, the Act requires that the minor be “represented by a litigation guardian in relation to the claim”, meaning that the litigation guardian may do anything in a proceeding that the party under a disability would ordinarily be required or authorized to do (r. 7.05(1)). The fact that Neville had a contingency agreement with Wallbridge did not result in Bayden being represented by a litigation guardian.

However, Bayden was represented by a litigation guardian when the statement of claim was issued in June 2014, as Neville clearly held herself out as Bayden’s litigation guardian to the defendants. The fact that she did not sign the affidavit made the proceeding an irregularity, but not a nullity. A limitation period is not tolled simply because the person holding herself out as litigation guardian had not filed the required affidavit under the Rules. To allow the limitation period to toll on that basis would effectively make the limitation period unlimited because the litigation guardian could indefinitely delay filing the affidavit.

Neville had no conflict of interest in relation to Bayden’s claim against the City.

Time began to run on the limitation period on June 11, 2014, and ended on June 11, 2016. Bayden filed his motion to add the parties on September 15, 2015. Thus, the motion was not statute-barred.

(2) Section 44(10) of the Municipal Act, 2001 provides that no action shall be brought against a municipality for failure to keep a highway in a reasonable state of repair unless notice is given to the municipality within ten days of the occurrence of the injury. The notice requirement in s. 44(10) is similar in character to a limitation period, although it is not strictly speaking a limitation period: Patrick v. South West Middlesex (Municipality), 2017 ONSC 17 at para. 81. However, under s. 44(12), the action is not barred if there is a reasonable excuse for not giving notice and the municipality is not prejudiced in its defence.

The plaintiff bears the onus of establishing a reasonable excuse: Argue v. Tay (Township), 2013 ONCA 247, 10 M.P.L.R. (5th) 11, leave to appeal refused [2013] S.C.C.A. No. 246. The words “reasonable excuse” are to be given a liberal interpretation because the municipality is protected by the requirement that it not be prejudiced in its defence.

Bayden had a representative – Neville – who was capable of forming the intention to sue the municipality within the notice period, and she had retained a lawyer to pursue claims on his behalf.

There was nothing in the record to suggest that by the time Neville acted as Bayden’s litigation guardian, on June 11, 2014, the extent of his injuries were unknown.

Roberts J.A. [dissenting in part]

Holding: Roberts J.A. would allow the City’s appeal to the extent that leave would be granted to plead the limitation and notice period defences under the Acts. Otherwise, Roberts J.A. Would have dismissed the appeal.

Reasoning:

The motion judge erred in making a final determination with respect to the limitation and notice period issues. This was a pleadings motion, not a motion to determine an issue of law before trial, nor was it a summary judgment motion. No declaratory relief was requested, and there was no trial of an issue. There were, however, credibility and factual issues that should have been left for final determination on a summary judgment motion or at trial.

The respondent met the low onus placed on him on a motion to amend a pleading. Parties on an amendment motion are not expected to “put their best foot forward”, as they would on a motion for summary judgment. As a result, the evidentiary burden on the moving party on an amendment motion, even to add parties after the expiry of a limitation period, is low: Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A.), at para. 14.The motion judge did not err in the exercise of her discretion by adding the City as a defendant. On an amendment motion, the motion judge is not to decide the merits of the underlying action and proposed amendments: Fram Elgin Mills 90 Inc. v. Romandale Farms Limited.

The Court has cautioned against the practice of challenging a claim based on a limitation defence where the proposed defendant has yet to deliver a statement of defence, because a court cannot gain a complete picture of the issues in a case without reading all of the pleadings.

The notice period issue under the Municipal Act, 2001 gives rise to myriad credibility issues and issues of fact. Specifically, pursuant to s. 44(12) of the Act, the questions as to whether the respondent had reasonable excuse for the delay in giving the requisite ten-day notice under s. 44(10) of the Act, and whether the City has suffered prejudice in its defence, require determination on a summary judgment motion or at trial.

Moore v. Apollo Health & Beauty Care, 2017 ONCA 383

[Laskin, Lauwers and Brown JJ.A.]

Counsel:

Alexandra E. Moore, acting in person

Stephanie E. Sangster, for the respondent

Keywords: Employment Law, Constructive Dismissal

Facts:

The appellant, Alexandra Moore, sued her former employer, the respondent Apollo Health & Beauty Care (“Apollo”), in Small Claims Court for constructive dismissal and other employment-related damages. Ms. Moore represented herself throughout the matter. At trial, she advanced two claims.

First, Ms. Moore alleged Apollo had fundamentally changed the terms of her employment, thereby constructively dismissing her. The trial judge found in Ms. Moore’s favour, holding Apollo had constructively dismissed her. However, the trial judge concluded Apollo provided Ms. Moore with appropriate termination notice calculated in accordance with the terms of the employment contract.

Second, Ms. Moore alleged Apollo had failed to pay her amounts for hours she had worked, for two statutory holidays, and for six sick days. The trial judge did not award any amount for these claims on the basis Ms. Moore had abandoned them during her trial evidence.

Ms. Moore appealed to the Divisional Court, requesting that the court overturn the trial judge’s ruling that she had abandoned portions of her claim and his finding on “wrongful termination.” A single judge of the Divisional Court dismissed her appeal. Ms. Moore then sought and obtained leave to appeal to Court of Appeal.

Issues:

(1) Did the trial judge err in relying on the notice provisions of her employment contract to calculate damages for constructive dismissal?

(2) Did the trial judge err in finding she had abandoned her claim for Unpaid Wages?

Holding:

Appeal allowed, in part.

Reasoning:

(1) No. Provisions respecting notice of termination of employment can limit the pay applicable on constructive dismissal. The court saw no error in the trial judge’s findings that Apollo gave Ms. Moore notice of its intent to terminate “that was well within the contractual requirements” and that Ms. Moore “received what she was entitled to.”

(2)  Yes. In his reasons, the trial judge stated: “In the course of her evidence the Plaintiff abandoned her claim for unpaid wages as well as missed holiday and sick pay.” The appeal judge held that the trial judge made no palpable and overriding error in construing her evidence as the abandonment of her claim for such damages.

The Court stated that both the trial judge and appeal judge erred in so concluding. They committed two errors. First, both misapprehended Ms. Moore’s evidence and did not assess one short statement made by her in the context of her entire evidence. Second, they failed to take the proper approach in ascertaining whether Ms. Moore, a self-represented person, in fact had abandoned part of her claim.

As a result of the trial judge’s error in treating as abandoned Ms. Moore’s claim for Unpaid Wages, the Court set aside his dismissal of that part of her claim. The evidentiary record supported Ms. Moore’s claim for Unpaid Wages and as such, the Court granted judgment to Ms. Moore in the amount of $1,558.43.

Civil Endorsements

Mizrachi Organization of Canada v. Bernstein, 2017 ONCA 370

[Juriansz, Lauwers and Hourigan JJ.A.]

C. Linthwaite, for the appellants

G. M. Sidlofsky, for the respondents

Keywords: Costs Endorsement

Nemmour c. Toronto (City), 2017 ONCA 377

[Rouleau, Pardu and Roberts JJ.A.]

Counsel:

Mohamed Nemmour, in person

M. Cornett, for the respondents

Keywords: Endorsement, Property Law

A.B.S. v. S.A.S., 2017 ONCA 382

[Sharpe, Lauwers and Hourigan JJ.A.]

Counsel:

A.B.S., acting in person

J. Ryan for the respondent

Keywords: Endorsement, Family Law, Custody

Criminal and Ontario Board Decisions

R v. Al-Enzi, 2017 ONCA 373

[Gillese, Huscroft and Trotter JJ.A.]

A. Gold, for the appellant

D. Garg, for the respondent

Keywords: Endorsement, Criminal Law, Driving while Disqualified

R. v. Myles, 2017 ONCA 375

[Gillese, Huscroft and Trotter JJ.A.]

E. Tache-Green for the appellant

K. Farrell for the respondent

Keywords: Criminal Law, Criminal Harassment, Joint Sentencing

R. v. Saikaley, 2017 ONCA 374

[Doherty, Hourigan and Roberts JJ.A.]

Counsel:

M. Lacy and J. Wilkinson, for the appellant

J. North and I. Bell, for the respondent Attorney General of Canada

R.W. Hubbard and M. Fawcett, for the respondent Attorney General of Ontario

N. Hasan, for the intervener Criminal Lawyers’ Association

F. Addario and A. Burgess, for the intervener Canadian Civil Liberties Association

Keywords: Criminal Law, Criminal Rate of Interest, Criminal Organization, Conspiracy, Extortion, Canadian Charter of Rights and Freedoms, Search and Seizure, Unreasonable Delay, s. 8 and 11(b)

R v. Hamade, 2017 ONCA 387

[Doherty, MacFarland and Miller JJ.A.]

E. Tanny, for the appellant

J. Epstein, for the respondent

Keywords: Criminal Law, Assault with a Weapon, Evidence, Cross-examination

Starson (Re), 2017 ONCA 352

[Weiler, Feldman and Huscroft JJ.A.]

A. Szigeti and J. Berger, amici curiae

K. Doherty, for the respondent

G. S. MacKenzie, for the Person in charge of the Centre for Addiction and Mental Health

Keywords: Endorsement, Conditional Discharge

Krivicic (Re), 2017 ONCA 379

[Weiler, Feldman and Huscroft JJ.A.]

Counsel:

J. Presser,Amicus Curiae

E. Krivicic, in person

C. Harper, for the Respondent Crown

C. Blackburn, for the Respondent persons in charge of Providence Health Care Kingston and North Bay Regional Health Centre

Keywords: Not Criminally Responsible, Significant Threat to the Safety of the Public, Absolute Discharge

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.