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 (OCTOBER 10 – OCTOBER 13, 2017)

Good evening.

There were only two substantive civil decisions of the Court of Appeal this week. One dealt with a construction contract dispute. The other was a solicitor’s negligence action. In both matters, summary judgment was granted in the court below and the appeal was allowed. A reminder that summary judgment does not always avoid cost and delay.

Enjoy the weekend.

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

Table of Contents: 

Civil Decisions

2395446 Ontario Inc. v. King’s and Queen’s Custom Homes Inc., 2017 ONCA 782

Keywords: Contracts, Construction Law, Delay Claim, Penalty Clause, Extras, Evidence, Credibility, Misapprehension of Evidence, Summary Judgment

Butera v. Chown, Cairns LLP, 2017 ONCA 783

Keywords: Torts, Solicitors Negligence, Franchise Law, Arthur Wishart Act (Franchise Disclosure), S.O. 2000, c. 3, Civil Procedure, Limitation Periods, Appeals, Fram Elgin Mills 90 Inc. v. Romandale Farms Ltd., 2016 ONCA 404, Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7, Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922

For Civil Endorsements, click here.

For Criminal Decisions, click here.

Civil Decisions

2395446 Ontario Inc. v. King’s and Queen’s Custom Homes Inc., 2017 ONCA 782

[Doherty, LaForme and Miller JJ.A.]

Counsel:

Gregory M. Sidlofsky, for the appellants

Benjamin Salsberg, for the respondents

Keywords: Contracts, Construction Law, Delay Claim, Penalty Clause, Extras, Evidence, Credibility, Misapprehension of Evidence, Summary Judgment

Facts:

The appellant, Nikolay Chsherbinin, entered into a construction management contract with the respondent, King’s and Queen’s Custom Homes Inc. (“KQ”), in which KQ agreed to manage the construction of improvements at Chsherbinin’s new law office. After the completion of the work, the appellants brought an action to recover alleged overpayments to the respondents, and for damages pursuant to a penalty clause for construction delays.

The appellants’ motion for summary judgment was unsuccessful and the motion and action were both dismissed.

Issues:

  1. Did the motion judge err in finding that there was no overpayment to KQ?
  2. Did the motion judge err in finding that the penalty clause for delay did not apply to the construction of a feature wall in the reception area?
  3. Did the appellants receive a fair hearing?

Holding: Appeal allowed.

Reasoning:

  1. Yes. Chsherbinin claimed to have overpaid KQ by $9,322.29. The basis of the claim was that advance payments made by Chsherbinin at KQ’s request exceeded the amounts ultimately invoiced by KQ.

KQ then provided an account reconciliation that set out extra work requested by Chserbinin that largely accounted for the discrepancy. After the extra work was taken into account, there remained only a small overpayment from Chsherbinin of $677.79.

Chsherbinin, however, claimed the full $9,322.29 as an overpayment on the basis that the items referenced in the reconciliation email were not extras, as they had been included in the original contract. He further argued that he had not approved any extras in writing, as required by the contract.

The motion judge rejected this argument and found that Chsherbinin requested the work, received exactly what he asked for, and paid for what he received. However, as set out below, this was an error.

  1. Yes. The motion judge found that the purpose of the penalty clause was to avoid Chsherbinin having to continue to pay rent in his former premises while waiting for his new premises to become move-in ready. The motion judge found, and it was uncontested, that Chsherbinin did move in to the new premises on April 2. The basis of Chserbinin’s delay claim is primarily that a feature wall in the reception area was not completed by April 2.

The motion judge made a finding that the contract did not require the installation of the feature wall by April 2.

Since the motion judge did not accept that the penalty clause applied to work that was not intended to be completed by April 2, the fact that there was delay in the installation of the feature wall was immaterial.

  1. No. The motion judge was highly critical of Chsherbinin and the court found that his assessment of Chsherbinin’s evidence was impaired by two serious errors.

First, although the motion judge stated that there were several examples of “over-reaching” in Chsherbinin’s affidavit, he listed only the one that he said was the “most glaring”: that although Chsherbinin claimed in his affidavit that it was KQ’s principal, Sula Kogan, who drafted the penalty clause, he later contradicted himself on cross-examination by stating that he amended the penalty clause on his own computer in his office after discussions with Kogan.

However, the court found that the apparent contradiction was the product of the motion judge’s error in mixing up Chsherbinin and Kogan’s evidence on cross-examination.

Second, the motion judge faulted Chsherbinin for not disclosing a fifth invoice from KQ, which he thought to be material to the question of whether KQ had been paid in excess of the amount it had invoiced. However, the respondent conceded that there no fifth invoice from KQ, and the motion judge erred not only in finding there was, but in drawing an adverse inference against Chsherbinin for not producing it.

The court was satisfied that the motion judge’s strong, but unsupported findings against Chsherbinin’s credibility would have influenced his assessment of all of the issues before him. It held that this conclusion was supported by the motion judge’s inexplicable outright dismissal of Chsherbinin’s overpayment claim, despite KQ’s concession that there had been a small overpayment that was recoverable by Chsherbinin.

Butera v. Chown, Cairns LLP, 2017 ONCA 783

[Juriansz, Pepall and Miller JJ.A.]

Counsel:

N G Wilson, for the appellants

J D Campbell, for the respondents

Keywords: Torts, Solicitors Negligence, Franchise Law, Arthur Wishart Act (Franchise Disclosure), S.O. 2000, c. 3, Civil Procedure, Limitation Periods, Appeals, Fram Elgin Mills 90 Inc. v. Romandale Farms Ltd., 2016 ONCA 404, Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7, Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922

Facts:

The appellant, Luciano Butera, is the sole owner and operator of the appellant, 1515404 Ontario Inc., a Mitsubishi Motors franchisee operating as Niagara Mitsubishi, and of the appellant, Canterra Property Holdings Inc. (collectively referred to as the appellants). When their dealership failed, the appellants sued various Mitsubishi companies (“Mitsubishi”) for damages for breach of contract, misrepresentation, negligence, and breaches of the provisions of the Arthur Wishart Act (Franchise Disclosure, 2000), S.O. 2000, c. 3.

Mitsubishi moved for summary judgment on the basis that the applicable two-year limitation period had expired. The appellants conceded that the applicable limitation period was two years. Justice Hambly granted summary judgment to Mitsubishi and dismissed the appellants’ action. The appellants appealed from Hambly J.’s dismissal of their action and asked that the judgment be set aside. In their grounds for appeal, among other things, they took the position for the first time that a six-year limitation period was applicable. Mitsubishi successfully moved to strike that ground of appeal on the basis that the appellants had raised a new issue that they had not advanced before Hambly J. The Court of Appeal then dismissed the appellants’ appeal. It agreed with Hambly J. that the action was time-barred by the two-year limitation period.

The appellants then sued the respondents, their solicitors in the action against Mitsubishi, for negligence. The appellants stated that in the original action, the respondents had failed to take the position that a six-year limitation period applied rather than the two years found by Hambly J. Accordingly, they had lost the opportunity on appeal to argue the merits of their claims against Mitsubishi. They claim $5 million in damages flowing from their lost opportunity to argue the merits of their claims in negligence, misrepresentation, breach of contract, and breaches of the Arthur Wishart Act.

The respondents argued that the appellants did not appeal Hambly J.’s misrepresentation conclusion and therefore there could be no lost opportunity. Justice Belobaba agreed with the respondents’ position and therefore allowed the respondents’ motion for partial summary judgment and dismissed the damages claim. The partial summary judgment was appealed.

Issues:

(1) Did the motion judge err in concluding that the appellants had not appealed the misrepresentation finding?

(2) Did the motion judge err in failing to consider the advisability of an award of partial summary judgment?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The motion judge erred in law in framing the issue as an analysis of whether there was an appeal from the “finding” of no misrepresentation. While issue estoppel may be based on reasons alone, an appeal is from an order or a judgment, not from the reasons for decision: Fram Elgin Mills 90 Inc. v. Romandale Farms Ltd., 2016 ONCA 404, at para. 33; and Glennie v. McD. & C. Holdings Ltd., [1935] S.C.R. 257, at p. 268. Here, the appellants appealed from the judgment of Hambly J. and asked that it be set aside. As a matter of law, this included the claims based on misrepresentation. To the extent that the notice of appeal lacked specific detail, it was implicit that the appellants were appealing the judgment that encompassed misrepresentation. The appellants’ factum filed before the Court of Appeal was replete with references to misrepresentation. No one would have been caught by surprise.

(2) Yes. The motion judge made an extricable error in principle in failing to consider whether partial summary judgment was appropriate in the context of the litigation as a whole. As the appellants point out, the action is proceeding to trial on the Arthur Wishart Act claims, which include allegations of a breach of the duty of fair dealing and deficient disclosure, the claims in negligence, and for breach of contract. These claims are intertwined with the misrepresentation claims. An award of partial summary judgment in these circumstances may lead to inconsistent results to the extent the misrepresentation claims were not barred due to a limitation period. On the other hand, had the litigation as a whole been considered, partial summary judgment would not have been an appropriate award as it would not serve the objectives of proportionality, efficiency, and cost effectiveness.

Since Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Court of Appeal has considered partial summary judgment in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, and in Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922. A motion for partial summary judgment should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner.

In addition to the danger of duplicative or inconsistent findings considered in Baywood and CIBC, partial summary judgment raises further problems that are anathema to the stated objectives underlying Hryniak. First, such motions cause the resolution of the main action to be delayed. Typically, an action does not progress in the face of a motion for partial summary judgment. Second, a motion for partial summary judgment may by very expensive. Third, judges, who already face a significant responsibility addressing the increase in summary judgment motions that have flowed since Hryniak, are required to spend time hearing partial summary judgment motions and writing comprehensive reasons on an issue that does not dispose of the action. Fourth, the record available at the hearing of a partial summary judgment motion will likely not be as expansive as the record at trial, therefore increasing the danger of inconsistent findings. Lastly, a motion for partial summary judgment differs from a motion for summary judgment. If the latter is granted, subject to appeals, it results in the disposal of the entire action.

Short Civil Endorsements

Tracy v. Iran (Information and Security), 2017 ONCA 777

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

Counsel:

Colin Stevenson and J. Daniel McConville for the appellants

John Adair and Gordon McGuire for the respondents, Tracy and Bennett

John B. Laskin, Sarah Whitmore, Eliot Che for the respondents, Marthaler, Holland and American Center for Civil Justice, Inc.

Jacqueline Dais-Visca, and Joseph Cheng for the intervener, the Attorney General of Canada

Keywords: Costs Endorsement, Partial Indemnity

Deltro Group Ltd. v. Potentia Renewables Inc., 2017 ONCA 784

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

William Brock and Maureen Littlejohn, for the moving party

Michael Mazzuca, for the responding party

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Courts of Justice Act R.S.O. 1990. C. C. 43, ss. 6(1)(b) and 19(1)(b), Ontario Medical Association v. Miller, [1976] 14 O.R. (2d) 468, Appeal Quashed

McAfee v. McAfee, 2017 ONCA 785

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

Robert McAfee, acting in person

Erin MacKenzie, for the respondent

Keywords: Family Law, Offers to Settle, Severability Clauses, Inadvertent Error, Milos v. Zagas, [1998] 38 O.R. (3d) 218, Appeal Dismissed

Ontario (Attorney General) v. Reyes, 2017 ONCA 786

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

Althea Reyes, acting in person

Domenico Polla, for the respondent

Keywords: Civil Procedure, Vexatious Litigants, Courts of Justice Act, s. 140

Criminal Decisions:

R v. Overland, 2017 ONCA 776

[Pepall, van Rensburg and Fairburn JJ.A.]

Counsel:

Gay Overland, acting in person

Peter Fraser, for the respondent

Keywords: Criminal Law, Sentencing, Ineffective Assistance of Trial Counsel

R v. Tang, 2017 ONCA 775

[Brown J.A. (In Chambers)]

Counsel:

Andrew Burgess, for the appellant

Amy Alyea, for the respondent

Keywords: Criminal Law, Drug-trafficking, Sentencing, Judicial Interim Release, Surveillance, Public Interest Criterion, Criminal Code s. 679(3)(c), Canadian Charter of Rights and Freedoms s. 8 ,R. v. Oland, 2017 SCC 17

R v. Jarvis, 2017 ONCA 778

[Feldman, Watt and Huscroft JJ.A.]

Counsel:

Christine Bartlett-Hughes and Jennifer Mannen, for the appellant

Susan M. Chapman and Jennifer Micallef, for the respondent

Keywords: Criminal Law, Voyeurism, Criminal Code, s. 162(1)(c), s. 162, s. 676(1)(a), Canadian Charter of Rights and Freedoms s. 8, s. 24(2), Reasonable Expectation of Privacy, R. v. Grant, 2009 SCC 32, [2009] 2 S.C.R. 353, R. v. Sharpe, 2001 SCC 2, R. v. Morrisey, 2011 ABCA 150, R. v. Colley, 2009 BCCA 289, R. v. M.B., 2014 QCCA 1643, R. v. Lebenfish, 2014 ONCJ 130, R. v. Villaroman, 2016 SCC 33, R. v. Taylor, 2015 ONCJ 449, R. v. Cole, 2012 SCC 53, Polius; R. v. Manley, 2011 ONCA 128, R. v. B.-H., 2013 ONSC 1183; R. v. Rafferty, 2012 ONSC 703; R. v. Morelli, 2010 SCC 8, Polius; R. v. Fearon, 2010 ONCJ 645, R. v. Harrison, 2009 SCC 34, R. v. Buhay, 2003 SCC 30

R v. R.B., 2017 ONCA 779 (Publication Ban)

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

Counsel:

R.B., in person

Amy Ohler appearing as duty counsel

Lorna Bolton, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Credibility

R v. Bennett, 2017 ONCA 780

[Doherty, Huscroft and Miller JJ.A.]

Counsel:

Diana M. Lumba and Carlos F. Rippell, for the appellant

John Patton, for the respondent

Keywords: Criminal Law, Firearms, Telewarrant, Confidential Informant, Disclosure Request, Disclosure Order, Information to Obtain (“ITO”), Canadian Charter of Rights and Freedoms, s. 8, s. 9, s.24(2), R. v. Garofoli, [1990] 2 S.C.R. 1421, R. v. Crevier, 2015 ONCA 619, R. v. Stinchcombe, [1991] 3 S.C.R. 326, R. v. McNeil, 2009 SCC 3, R. v. Davey, 2012 SCC 75, R. v. Reid, 2016 ONCA 524, World Bank Group v. Wallace, 2016 SCC 15, R. v. Lising, 2005 SCC 66, R. v. Green, 2015 ONCA 579, R. v. Grant, 2009 SCC 32, R. v. Ansari, 2015 ONCA 575

R v. Doodnaught, 2017 ONCA 781 (Publication Ban)

[Watt, Lauwers and Huscroft JJ.A.]

Counsel:

Diana M. Lumba and Carlos F. Rippell, for the appellant

John Patton, for the respondent

Keywords: Criminal Law, Sexual Assault, Sufficiency of Reasons, Similar Fact Evidence, R. v. Ferianz, [1962] O.W.N. 40 (C.A.), R. v. Minhas (1986), 29 C.C.C. (3d) 193 (Ont. C.A.), R. v. Davison (1974), 20 C.C.C. (2d) 424 (Ont. C.A.), R. v. Imrich, [1978] 1 S.C.R. 622, R. v. Morrissey (1995), 97 C.C.C. (3d) 193 (Ont. C.A.), R. v. Sinclair, 2011 SCC 40, R. v. Dinardo, 2008 SCC 24, R. v. Handy, 2002 SCC 56, R. v. Arp, [1998] 3 S.C.R. 339, R. v. Thomas (2004), 190 C.C.C. (3d) 31 (Ont. C.A.)

R v. Osinfolarin, 2017 ONCA 787

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

Counsel:

Oluwaseye Osinfolarin, acting in person

Ian R. Smith, duty counsel

Scott Wheildon, for the respondent

Keywords: Criminal Law, Drug Importation, Jury Selection

R v. Silva, 2017 ONCA 788

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

Counsel:

Eduardo Silva, acting in person

Ian R. Smith, appearing as duty counsel

Lorna Bolton, for the respondent

Keywords: Criminal Law, Robbery with a Firearm, Possession of a Restricted Firearm, Search Warrant, Information to Obtain (“ITO”), Canadian Charter of Rights and Freedoms, s. 8, s. 24(2), R. v. Grant, 2009 SCC 32, R. v. McGuffie, 2016 ONCA 365

 

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ONTARIO COURT OF APPEAL SUMMARIES (OCTOBER 2 – OCTOBER 6, 2017)

Good evening.

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

In an insurance coverage decision in Reeb v. The Guarantee Company of North America, the Court held that there was a conflict of interest on the part of counsel for the insured who had been appointed by the insurer because the insurer would have benefited financially if the decision below was affirmed and the appeal was dismissed.  Independent counsel was therefore required who did not take instructions from the insurer. On that ground alone, the appeal was allowed. The court appointed amicus curiae to assist with submissions on having new counsel appointed for the insured and on the issue of the costs of the appeal.

In a lengthy and important decision in Sacks v. Ross, the Court reviewed the test for causation involving multiple tortfeasors in delayed diagnosis medmal cases. In addition, the court detailed the process regarding the formulation of jury instructions and questions.

The Court also released four family law decisions. In Smith v. Smith and Moses Estate v. Metzer, the issue was the enforceability of cohabitation agreements.

In Fiorito v. Wiggins, the Court affirmed the lifting of the automatic stay of proceedings arising out of the wife’s bankruptcy under section 69.4 of the Bankruptcy and Insolvency Act in order to allow a father to enforce a significant cost award against her RRSPs, even though RRSPs are exempt property and do not form part of a bankrupt’s estate available to unsecured creditors. While there were compelling facts in support of the father in this case based on the conduct of the mother, this might be an example of “bad facts making bad law”. The decision opens the door to unsecured creditors getting around the BIA exemption of RRSPs as property available to creditors of a bankrupt estate. In support of its decision, the court noted that while RRSPs are exempt property in bankruptcy, they are not exempt from seizure under the Execution Act. Following this line of reasoning, it may be open to any unsecured judgment creditor with sympathetic facts to attempt to move to lift the stay in order to pursue RRSPs.

In Slate Management Corporation v. Canada (Attorney General), the court dismissed an appeal from a rectification order that unwound a tax driven amalgamation as moot because CRA had not sought leave to stay the rectification order pending appeal.

Other topics covered included contracts and adverse possession.

Happy Thanksgiving.

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

Table of Contents:

Civil Decisions

Patel v. Borges, 2017 ONCA 761

Keywords: Real Property, Mortgages, Enforceability, Spousal Consent, Consideration

Smith v Smith, 2017 ONCA 759

Keywords: Family Law, Cohabitation Agreements, Setting Aside, Divorce Act R.S.C., 1985, c. 3 (2nd Supp.), Miglin v. Miglin, 2003 SCC 24

Sickinger v. Sickinger, 2017 ONCA 7640

Keywords: Family Law, Civil Procedure, Appeals, Administrative Dismissal, Setting Aside

Fiorito v. Wiggins, 2017 ONCA 765

Keywords: Family Law, Bankruptcy and Insolvency, Lifting Automatic Stay of Proceedings, Bankrupcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 69.4, Property of the Bankrupt, Exempt Property, RRSPs, Material Prejudice, Equitable Grounds, Execution Act, R.S.O. 1990, c. E.24, Orders, Security for Performance, Family Law Act, R.S.O 1990, c. F. 3, ss. 9, Schreyer v. Schreyer, 2011 SCC 35

Moses Estate v. Metzer, 2017 ONCA 767

Keywords: Family Law, Property, Cohabitation Agreements, Setting Aside, Family Law Act, ss. 56(4), Dochuk v. Dochuk (1999), 44 RFL (4th) 97

Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766

Keywords: Contracts, Oral Contracts, Summary Judgment

Slate Management Corporation v. Canada (Attorney General), 2017 ONCA 763

Keywords: Corporations, Tax Law, Amalgamations, Business Corporations Act, R.S.O. 1990, c. B.16, s. 183, Income Tax Act, R.S.C. 1985, s. 87 (11), Mistake, Rectification, Nunc Pro Tunc, Fairmont Hotels Inc. v. Canada (Attorney General), 2016 SCC 56, [2016] 4 S.C.R. 720, TCR Holding Corp. v. Ontario, 2010 ONCA 233, Norcan Oils Ltd. v. Fogler, [1965] S.C.R. 36, Civil Procedure, Appeals, Mootness, Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342

Reeb v. The Guarantee Company of North America, 2017 ONCA 771

Keywords:  Insurance Law, Coverage, Solicitor and Client, Conflict of Interest, Hoang v. Vicentini, 2015 ONCA 780, Amicus Curiae

Beffort v. Zuchelkowski, 2017 ONCA 774

Keywords: Real Property, Adverse Possession, Fresh Evidence

Sacks v. Ross, 2017 ONCA 773

Keywords: Torts, Negligence, Medical Malpractice, Causation, Multiple Tortfeasors, Delayed Diagnosis and Treatment, “But For” Test, Juries, Instructions and Questions, Standard of Review

Holterman v. Fish, 2017 ONCA 769

Keywords: Torts, Misfeasance in Public Office, Consent Discontinuance, Setting Aside, Fresh Evidence

For Civil Endorsements, click here.

For Criminal Decisions, click here.

Civil Decisions

Patel v. Borges, 2017 ONCA 761

[Hourigan, Brown and Roberts JJ.A]

Counsel:

L Menon and D Paul, for the appellant

R Piehler, for the respondent

Keywords: Real Property, Mortgages, Enforceability, Spousal Consent, Consideration

Facts:

The appellant brought an action to enforce a mortgage registered against a residential property solely owned by the respondent. The respondent’s spouse, who had been borrowing large sums of money from the appellant, signed a promissory note agreeing to register a mortgage against the property in the appellant’s favour as security for the loans. However, the respondent testified that she understood that the mortgage was to replace an existing second mortgage and not as a third mortgage to secure her husband’s debts. She submitted that the mortgage was unenforceable as she received no consideration. The trial judge dismissed the appellant’s action, finding that the respondent received no consideration for the mortgage and that the purpose of the mortgage was to pay off the existing second mortgage and not to secure the loans made to the respondent’s spouse. The appellant submits that the trial judge erred in finding that the respondent received no consideration for the mortgage and that the purpose of the mortgage was to pay off the existing second mortgage.

Issues:

(1) Did the trial judge err in finding that the respondent received no consideration for the mortgage?

(2) Did the trial judge err in finding that the purpose of the mortgage was to pay off the existing second mortgage?

Holding: Appeal dismissed.

Reasoning:

(1)  No. The trial judge conducted a thorough review of the evidence and his findings were open to him on the record. The mortgage commitment stated that the security sought was a second mortgage and the respondent signed an acknowledgment and a solemn declaration to that effect.

(2) No. The new mortgage was only in the amount of $165,000 and the existing second mortgage had a balance of $203,000. The trial judge specifically considered this issue. He accepted the respondent’s evidence that she believed that the amount advanced would be sufficient to discharge the existing second mortgage once certain unreasonable charges in the discharge statement were resolved and removed.

Smith v Smith, 2017 ONCA 759

[MacFarland, Watt and Benotto  JJ.A.]

Counsel:

P D Marshall, for the appellant

S Klotz and J Klotz, for the respondents

Keywords: Family Law, Cohabitation Agreements, Setting Aside, Divorce Act R.S.C., 1985, c. 3 (2nd Supp.), Miglin v. Miglin, 2003 SCC 24

Facts:

The parties are husband and wife. Before their marriage, they signed a cohabitation agreement whereby the wife released her claims to spousal support. Upon separation, the wife sought to claim spousal support. The trial judge upheld the cohabitation agreement and dismissed her claim. The wife alleges that the trial judge erred in upholding the cohabitation agreement because the release of support does not meet the provisions of the Divorce Act R.S.C., 1985, c. 3 (2nd Supp.).

Issue:

Did the trial judge err in upholding the cohabitation agreement?

Holding:

Appeal dismissed.

Reasons:

No. In Miglin v. Miglin, 2003 SCC 24, the Supreme Court set out a two-stage analysis to be applied in dealing with initial applications for spousal support in the face of a release. The first stage is subdivided into two parts and considers: (1) the circumstances surrounding the negotiation and execution of the agreement to determine whether there is any reason to discount it; and (2) a consideration of the substance of the agreement to determine whether it is in substantial compliance with the general objectives of the Divorce Act. The second stage requires the court to consider whether, at the time of the application, the applicant has established that the agreement no longer reflects the original intention of the parties and whether the agreement is still in substantial compliance with the objectives of the Divorce Act.

The objectives of the Divorce Act include “certainty, finality and autonomy.” Subsection 15.2(6) of the Divorce Act provides that a spousal support order should: (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses financial consequences arising from childcare over and above any obligation for the support of the child; (c) relieve any economic hardship of the spouse arising from the breakdown of the marriage; and (d) in so far as practicable, promote economic self-sufficiency of each spouse.

The wife argues that there was a power imbalance between her and the husband, she had not discussed spousal support with the husband, the financial disclosure was incomplete, the trial judge misconstrued the evidence when he said that her income at the date of the agreement was $70,000, and she did not have independent legal advice.

The Court found that the trial judge properly considered the Miglin test, there was no error of law or misapprehension of fact on the part of the trial judge, and therefore the appeal was dismissed.

Sickinger v. Sickinger, 2017 ONCA 7640

[Brown J.A.]

Counsel:

B Ludmer, for the moving party
G Smith, for the responding party

Keywords: Family Law, Civil Procedure, Appeals, Administrative Dismissal, Setting Aside

Facts:

The moving party husband and the responding party wife married in 1991 and entered into a separation agreement in 2007. Divorce was granted in 2008. They have three children, now ranging in age from 17 to 23 years old.

In 2009 the husband brought a motion to change which ultimately resulted in the March 20, 2012 final order of Perkins J that all three children reside with the wife.

In April 2014 the husband commenced the present motion to change. Extensive case conferencing ensued.

After multiple adjournments, the motion to change initiated by the moving party in April 2014 finally was heard almost three years later in February 2017 by McWatt J. The husband was in serious default in payment of support and in making financial disclosure. The motion to change was dismissed.

The husband appealed but failed to perfect the appeal on time, even after being notified by the Court of Appeal that it would be summarily dismissed if he did not perfect on time. As a result, the appeal was administratively dismissed. The husband moved to set aside the administrative dismissal.

Issues:

(1) Should the motion to set aside an order dismissing the appeal be granted?

Holding:

Motion denied.

Reasoning:

(1) No. The overriding consideration on a motion to set aside an order dismissing an appeal is the justice of the case, which entails a consideration of the merits of the appeal: Akagi v. Synergy Group (2000) Inc., 2014 ONCA 731, at para. 8. In addition, factors analogous to those typically considered on a motion to extend the time to appeal inform a request to set aside the administrative dismissal of an appeal: (i) the explanation for not perfecting the appeal within the time stipulated by the rules; (ii) the length of and explanation for the delay in moving to set aside the administrative dismissal; and (iii) prejudice to the respondent.

More justification must be shown by a party moving to aside an administrative dismissal of an appeal than would have been required had the party earlier availed itself of its rights to move for an extension of time to perfect the appeal: Langer v. Yorkton Securities Inc. (1986), 57 O.R. (2d) 555 (C.A.), at para. 14.

The record strongly suggests the husband is delaying the preparation of the materials needed to perfect his appeal. It is also clear from the evidence that the husband was fully aware of his obligation to perfect the appeal in a timely fashion and the possibility of its dismissal for delay. In any event, the husband knew by May 19, 2017, that a notice of intention to dismiss had been issued by the court requiring perfection of his appeal by May 16 yet he did not try to perfect it.

Also, even though the husband’s appeal was dismissed on May 23, 2017, the he did not file his motion to set aside the dismissal order until three months later on August 24, 2017. None of the reasons he offers for this delay provide a reasonable explanation. Instead, they disclose a persistent strategy of foot-dragging by the husband. His grounds of appeal have little merit.

The wife submits that she would be prejudiced if the dismissal order is set aside. She states arrears now exceed $100,000, and that she “ought not be required to continue in litigation in which the husband has refused to abide by the court process.” This was accepted by the court.

Fiorito v. Wiggins, 2017 ONCA 765

[Laskin, Feldman and Miller JJ.A.]

Counsel:

B Jaffe, for the appellant

B Ludmer, for the respondent

Keywords: Family Law, Bankruptcy and Insolvency, Lifting Automatic Stay of Proceedings, Bankrupcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 69.4, Property of the Bankrupt, Exempt Property, RRSPs, Material Prejudice, Equitable Grounds, Execution Act, R.S.O. 1990, c. E.24, Orders, Security for Performance, Family Law Act, R.S.O 1990, c. F. 3, ss. 9, Schreyer v. Schreyer, 2011 SCC 35

Facts:

The parties were involved in years of custody and access litigation for their two daughters after their separation in 2008. They entered into minutes of settlement whereby the mother had custody of the girls with substantial access to the father. However, the mother did not comply with the access provisions of the settlement. The mother was found to be in contempt and was sentenced to six months’ probation.  Custody of the children remained with the mother, but she was required to grant access to the father in accordance with the order. The children were found to be in need of protection. There was to be a review of the custody and access order in six months’ time.

Upon review, Justice Harper found that although the ordered access was occurring, the children refused to interact with the father and were rude and disrespectful to him and his new wife. As a result, he granted custody of the children to the father with access to the mother only during weekly sessions with the children’s therapist. The mother could bring a change motion if she was able to demonstrate that she would promote a loving relationship between the children and both parents. Costs in the amount of $400,000 were awarded to the father for the 2011 and 2013 proceedings.

However, on appeal in October 2015, the Court set aside the contempt finding as there was no outstanding order at the time to be the subject of contempt, ordered another access review to be held by February 2016, and reduced the costs award to $200,000.

In January 2016, the father brought a motion for the purpose of obtaining or ensuring payment of the $200,000 costs award. He wanted security as a condition of proceeding with the review hearing. The court made a temporary order, on consent, that:

(i) the mother produce to the father copies of all bank and investment statements;

(ii) the mother produce to the father financial and accounting records for her corporation;

(iii) examinations be held according to a stated timetable; and

(iv) pending the return of the motion, the mother was restrained from disposing of her RRSP’s and from dissipating assets.

On that motion, the mother filed evidence swearing that she intended to pay the awarded costs and denied a suggestion in the evidence submitted on behalf of the father that she intended to file for bankruptcy after the review to thwart the father’s claim.

On the review hearing, the father brought a motion requesting the assistance of the court in enforcing the costs award by garnishment against the financial institutions where the mother had registered assets. The motion was never heard, as the mother made an assignment into bankruptcy on February 22, during the review hearing.

The current appeal is in relation to a subsequent motion brought by the father for an order annulling the bankruptcy or, alternatively, lifting the stay under s. 69.4 of the Bankruptcy and Insolvency Act (the “BIA”), and authorizing the father to continue his enforcement of the costs award against the mother’s registered assets.

The motion judge determined that the father was entitled to have the stay lifted, based on three factual findings:

(i) this was an extreme case of one parent undermining the other parent with the children during eight years of litigation in which the father was trying to have a relationship with his children;

(ii) the Court of Appeal determined that the mother should pay the father $200,000 in costs for the two trials before Harper J., but she had paid nothing; and

(iii) when the court restrained the mother from disposing of her RRSP’s or dissipating assets and allowed the review hearing to proceed without the payment of the costs award, the court and the father relied on the mother’s representations in her affidavits that she intended to pay the costs and that she did not intend to thwart that payment by making an assignment into bankruptcy.

Issues:

(1) Did the motion judge err in law by lifting the stay under s. 69.4 of the BIA in order to allow the enforcement of a family law costs award?

(2) Did the motion judge err in law by misapprehending the meaning of “prejudice” and of “equitable” under s. 69.4 of the BIA?

(3) Did the motion judge misapprehend the evidence regarding whether the father would receive any payment towards his costs award in the bankruptcy?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellant relies on the Supreme Court of Canada case of Schreyer v. Schreyer, 2011 SCC 35. In that case, the husband made an assignment into bankruptcy without giving notice to the wife, who had an equalization claim under Manitoba family law legislation. He was also discharged without notice to her, thereby releasing him from her claim. However, the husband owned a farm, which was exempt from execution by creditors under s. 13 of Manitoba’s The Judgments Act and could not be disposed of by the trustee in bankruptcy for distribution to creditors. Speaking for the court, LeBel J. stated that the appropriate remedy for the appellant would be to apply for leave to pursue a claim against the exempt property pursuant to s. 69.4 of the BIA. Lifting the stay of proceedings cannot prejudice the estate assets available for distribution. This procedure would allow bankruptcy law to maximize returns to the family rather than focusing on the needs of the bankrupt.

The appellant submits that LeBel’s comments apply only to an equalization payment, not to custody cost awards. Her argument hinges on what she submits is a necessary link between a lift-stay order and a spouse’s ability, before bankruptcy, to obtain an order granting a proprietary interest in the other spouse’s property under s. 9(1) of the Family Law Act (FLA).

In Schreyer, LeBel J. explained that the only way Ms. Schreyer’s equalization claim would not have been extinguished by Mr. Schreyer’s discharge from bankruptcy was by obtaining an order lifting the stay so she could pursue a proprietary remedy under s. 17 of the Family Property Act of Manitoba.  The appellant therefore submits that the lift-stay remedy is only applicable where the debtor spouse is then able to obtain a proprietary interest in exempt assets in pursuit of an equalization claim.

The Court rejected this submission, distinguishing the facts of Schreyer from those of the present case. In Manitoba, a farm property is exempt from execution by creditors. As a result, a proprietary order would have been necessary to allow a spouse to realize on such property outside bankruptcy. By contrast, in Ontario, outside of bankruptcy, RRSP’s are not exempt from execution by creditors, as they are not a class of property specified under the Execution Act. Therefore no order under ss. 9(1)(b) or (d) of the Family Law Act is necessary to allow a spouse to execute any debt against an RRSP belonging to the other spouse. However, once a spouse makes an assignment into bankruptcy, that spouse’s RRSP’s become exempt property. Accordingly, the lift-stay remedy allows the creditor spouse to execute any debt against RRSP’s; they are only exempt under the bankruptcy regime, not under the provincial property and creditor’s rights laws.

Schreyer does not suggests that the equitable considerations for allowing a spouse to obtain the lift-stay remedy to execute against exempt or protected assets of the other spouse are limited to enforcing an equalization claim and would not apply, in appropriate circumstances, to a costs award arising out of protracted family litigation.

The Court highlights LeBel J.’s identification of maximizing returns to the family unit as a whole, not just the bankrupt, as a policy objective of bankruptcy law in Schreyer. This is the effect of lifting the stay and allowing the creditor spouse, where it is equitable to do so, to realize against exempt assets of the bankrupt spouse, which are not available to other creditors in the bankruptcy.

(2) No.

(A) Material Prejudice

The Court finds that while differential treatment may justify a finding of material prejudice, it is not a necessary factor. Material prejudice can arise from the size of the debt and the expected loss. In this case, the motion judges’ three factual findings of: (i) the need for the father to pursue lengthy custody and access litigation in order to have any relationship with his children; (ii) the mother’s failure to pay anything toward the costs ordered by the Court of Appeal; and (iii) the fact that the mother thwarted the enforcement of the costs award by reneging on assurances she made to the court about her intent to pay the costs and not use bankruptcy to thwart that payment, ground the finding of prejudice.

  1. 69.4(a) also requires that the material prejudice be related to the “continued operation” of the stay. The motion judge was entitled to find that the father would “in all likelihood, receive nothing” absent a lifting of the stay.

(B) Equitable Grounds

Under s. 69.4, courts have a broad discretion based on the particulars of the case in a finding of equitable grounds. It was within the motion judge’s discretion to take into account the circumstances regarding the background to the debt, particularly in the context where other creditors would not be affected by the order being sought. Although the appellant characterizes her decision to make an assignment into bankruptcy in the midst of the review hearing as a “change in [her] intention”, there is no explanation on the record for that change. In addition, since the respondent would be enforcing the costs award against exempt assets in the bankruptcy, other creditors would not be affected.

(3) No. The motion judge’s finding was reasonable based on the appellant’s statement of affairs. Although it is open for any creditor to oppose the discharge of the bankrupt, there is no guarantee that any order will be made or that any funds will be available. Any potential increase in the value of the home is purely speculative.

Regardless, the bankruptcy regime includes s. 69.4 and the ability of the court to lift the stay in favour of a particular creditor in prescribed circumstances. The use of that provision in these circumstances is based on sound reasons consistent with the scheme of the BIA to relieve against the automatic stay.

Moses Estate v. Metzer, 2017 ONCA 767

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

Counsel:

S Morris and J Adair, for the appellant

I Ellyn and R Kniznik, for the respondent

Keywords: Family Law, Property, Cohabitation Agreements, Setting Aside, Family Law Act, ss. 56(4), Dochuk v. Dochuk (1999), 44 RFL (4th) 97       

Facts:

The applicant and deceased respondent (represented by the deceased’s estate) were in a common law relationship, but separated prior to the deceased respondent’s death. The couple signed a cohabitation agreement in 2007, which stated that the rights of ownership would govern property division, the parties waived any claims to beneficial ownership, they agreed to deal with their property as though they were unmarried, and they specifically waived rights to the property of the other. At trial, the respondent claimed either a constructive or resulting trust interest in a property which the appellant alone held title, or an order setting the relevant clauses of the cohabitation agreement. The trial judge found that though never formalized, a property development agreement (the “PDA”) existed between the former spouses, and that this agreement and not the cohabitation agreement governed the property. As evidence of the PDA, the trial judge relied upon the appellant’s testimony and letters sent between the parties. The trial judge found that the PDA was not an enforceable agreement to amend the Cohabitation Agreement because it was not in writing, signed by the parties, and witnessed, as required by s. 55(1) of the Family Law Act, R.S.O. 1990 (“FLA”). However, relying on s. 56(4)(b) of the FLA, the trial judge set aside the Cohabitation Agreement as it applied to the properties. The trial judge granted an award in favour of the respondent for amounts owed under the PDA.

Issues:

(1) Did the trial judge err in setting aside the Cohabitation Agreement, only as it applied to the development properties?

(2) Did the trial judge err in not setting aside the whole Cohabitation Agreement, including the waiver of support clause?

(3) Did the trial judge err in calculating the amount owing under the terms of the PDA?

Holding: Appeal dismissed.

Reasons:

(1). Yes, in part. Section 56(4) of the FLA permits a court, on application, to set aside a domestic contract or a provision for a number of reasons, including if a party did not understand the nature or consequences of the domestic contract. In applying this section, the trial judge employed the two part test set out in Dochuk v. Dochuk (1999), 44 RFL (4th) 97. First, the party seeking to set aside all or part of a cohabitation agreement must demonstrate that one of the circumstances listed in s. 56(4) has been engaged. Next a court should consider whether it is appropriate to exercise discretion in favour of setting aside the agreement or a provision within it. On the first step, the trial judge correctly concluded that neither side fully understood the consequences of the Cohabitation Agreement with regard to the properties. Next, the trial judge justifiably set aside the agreement, stating that to do otherwise “would be a failure of justice.” This decision was based on detailed factual findings that were supported by the record.

However, the court did find that the trial judge erred in setting aside the property waiver clause of the Cohabitation Agreement only as it related to the development properties. Section 56(4) permits a court to set aside a contract or provision in its entirety. It does not permit a court to amend a domestic contract by holding that it does not apply to certain assets. Therefore, the entirety of the relevant clauses in the cohabitation agreement were set aside. The respondent was entitled to the return of the deceased spouse’s investment in the property and half of the profits from the sale of that property.

(2). No. This finding was open to the trial judge, and she reached it with reasonable basis, including the respondent’s receipt of cash gifts and income from the properties. There was no finding that the parties did not understand or did not intend any aspect of the spousal support waiver.

(3). No. The trial judge relied on an expert report that was supported by other evidence in calculating the amount owing under the terms of the PDA.

Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766

[Hourigan, Roberts and Nordheimer JJ.A.]

Counsel:

R Swaine, for the appellant

C Salazar, for the respondent

Keywords: Contracts, Oral Contracts, Summary Judgment

Facts:

This case involves an oral agreement between the parties regarding the sale and installation of Shaw Cable packages in Ontario. The motion judge found that the appellants, Mobile Zone Inc., Mohammad Shahzad, and Swati Damle, were in breach of the agreement and had misappropriated funds owing to the respondents, Net Connect Installation Inc., under the agreement. He further found that the appellants owed monies to the respondents pursuant to loans made by the respondents.

The appellants appeal an order granting summary judgment to the respondents for damages and other related relief. The appellants also seek leave to appeal the full indemnity costs award made against them in the amount of $144,991.

Issues:

(1) Did the motion judge err in finding that the agreement was not a joint venture?

(2) Did the motion judge err in finding that the appellants breached the agreement?

(3) Did the motion judge err in finding that the agreement was not varied by further agreements made in March and November 2013?

(4) Did the motion judge err in finding that one of the appellants, Swati Damle, impermissibly dissipated her assets?

(5) Did the motion judge err in awarding judgment to a non-party?

Holding: Appeal dismissed, subject to one amendment to judgment below.

Reasoning:

(1) No. The Court found that the motion judge conducted a very thorough review of the evidence regarding the contractual arrangements entered into by the parties. Specifically, in reaching the conclusion that the parties were not engaged in a joint venture, the motion judge found that there was no common undertaking, no mutual control, and no expectation to share in profits. These findings were available on the record.

(2) No. The appellants’ argument that there had been a breach of the agreement is premised on the incorrect notion that the parties were engaged in a joint venture.

(3) No. The motion judge’s finding that there had not been variations to the agreement in March and November 2013 were available to him on the record and the appellants have not identified any error with that finding.

(4) No. With respect to the finding that Ms. Damle impermissibly dissipated her assets, the evidence established that she sold and encumbered properties during the course of these proceedings. Regardless, this was only one factor that the motion judge relied upon in support of his costs award. The Court declined to grant leave to appeal costs.

(5) Yes. The Court held that the motion judge erred in making his damage award in favour of all of the respondents, as only the corporate litigants were parties to the agreement. Accordingly, the Court ordered that the judgment be varied to remove the non-parties.

Slate Management Corporation v. Canada (Attorney General), 2017 ONCA 763

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

Counsel:

G R Hall and R MacIsaac, for the respondent

C Akey and D Aird, for the appellant

Keywords: Corporations, Tax Law, Amalgamations, Business Corporations Act, R.S.O. 1990, c. B.16, s. 183, Income Tax Act, R.S.C. 1985, s. 87 (11), Mistake, Rectification, Nunc Pro Tunc, Fairmont Hotels Inc. v. Canada (Attorney General), 2016 SCC 56, [2016] 4 S.C.R. 720, TCR Holding Corp. v. Ontario, 2010 ONCA 233, Norcan Oils Ltd. v. Fogler, [1965] S.C.R. 36, Civil Procedure, Appeals, Mootness, Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342

Facts:

On January 1, 2015, three subsidiaries of Slate Asset Management LP amalgamated under the Business Corporations Act, R.S.O. 1990, c. B.16, in a single step. SLAM intended to increase the cost amount of the real estate owned by Huntingdon Capital Corp., one of its amalgamating subsidiaries – obtaining what is colloquially referred to as a “tax bump” – through the amalgamation. Increasing the cost amount of the properties would reduce the amount of capital gains tax payable on any subsequent disposition.

SLAM later learned that it had not achieved its intended tax outcome because it amalgamated the three subsidiaries in a single step. Under s. 87(11) of the Income Tax Act, R.S.C. 1985, a “bump” is only available on an amalgamation where a parent amalgamates with one or more of its wholly owned subsidiaries.

On June 9, 2016, Slate (the corporation resulting from the amalgamation of the three subsidiaries) applied for a rectification order. By order dated June 27, 2016, the application judge granted the relief Slate had requested, including approving a plan of arrangement under the OBCA deeming the initial amalgamation not to have occurred and the required two-step amalgamation to have occurred on January 1, 2015, nunc pro tunc; and directing the Director under the OBCA to cancel the certificate of amalgamation in respect of the initial amalgamation and endorse the Articles of Arrangement pursuant to s. 183 of the OBCA with a certificate dated January 1, 2015.

On July 26, 2016, the Attorney General served a notice of appeal of the rectification order. However, it did not seek a stay of the rectification order pending appeal. On August 2, 2016, the plan of arrangement was implemented. This was more than five weeks after the application judge granted the rectification order.

On December 9, 2016, the Supreme Court of Canada released its decision in Fairmont Hotels Inc. v. Canada (Attorney General), 2016 SCC 56, overruling the test for rectification applied by the application judge, and clarifying the test for rectification in a tax context. The AG appeals the rectification order, arguing that Slate does not meet the test in Fairmont, and that the rectification order should be set aside. It seeks an order cancelling the certificate of arrangement and reinstating the certificate of amalgamation issued on January 1, 2015.

Issue:

Did the application judge err in issuing a rectification order to Slate?

Holding: Appeal quashed.

Reasoning:

No. The appeal was quashed as moot. While commercial certainty is important, it is also important that courts be able to relieve persons from the effect of their mistakes. In TCR Holding Corp. v. Ontario, 2010 ONCA 233, this court held that an application judge has equitable authority to set aside an amalgamation nunc pro tunc based on the Superior Court’s equitable jurisdiction to relieve persons from the effect of their mistakes.

In the court’s view, if there is authority to direct the Director to cancel a certificate of amalgamation and endorse the Articles of Arrangement nunc pro tunc with a certificate dated January 1, 2015 incident to a rectification order, then there is authority to order the Director to cancel that certificate of arrangement and reinstate the certificate of amalgamation if it is determined on appeal that the applicant was not entitled to rectification. However, in the exercise of that authority, the court should be guided by the principle in Norcan Oils Ltd. v. Fogler, [1965] S.C.R. 36. In the court’s view, where, as here: (1) the Director under the OBCA issues a certificate pursuant to a rectification order; (2) the appellant could reasonably have sought a stay of the rectification order pending appeal; (3) the court is not satisfied that no third party acted, directly or indirectly, in reliance on the certificate issued pursuant to the rectification order and would not be prejudiced by its revocation; and (4) there are no special circumstances which justify exercising the power to cancel the certificate, thereby undermining certainty in a court-approved corporate fundamental change, the principle in Norcan requires the court to decline to exercise its authority to order the revocation of that certificate or otherwise unwind the court-approved corporate fundamental change.

While the AG is correct that the relief requested would not undermine third party reliance on the existence of the amalgamated company (as was the case in Norcan), Slate has provided evidence that third parties have relied on the financial consequences of the plan of arrangement implemented pursuant to the rectification order. The evidence of Slate’s General Counsel that third parties indirectly relied on the certificate of arrangement was not challenged through cross-examination and the AG did not provide any evidence to contradict it. It is not disputed that the financial impact of the “bump” achieved through the plan of arrangement is material to Slate. It is reasonable to think it may also have been significant to the lender which increased the credit extended to Slate.

Finally, fraud is not alleged and there are no other special circumstances which justify exercising the power to cancel the certificate of arrangement. Because Norcan, properly interpreted, would not permit the court to give effect to a decision that Slate fails to meet the test for rectification in Fairmont, this appeal is purely academic.

Once a court determines that an appeal is moot, it is necessary to decide whether the court should nonetheless exercise its discretion to hear the case: Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, at p. 353. Three factors are relevant in determining whether a court should entertain a moot appeal: (i) the presence of an adversarial context that will ensure that the issues are well and fully argued; (ii) concern for judicial economy; and (iii) awareness of the court’s proper law-making function: Borowski, pp. 358-363.

Considering these factors, the court was not persuaded that it should exercise its discretion to hear the appeal. While the appeal involves two sophisticated parties represented by counsel and its resolution would not intrude on the role of the legislative branch of government, the second factor weighs heavily against hearing it. There are no special circumstances in this case that justify the use of scarce judicial resources to resolve the appeal: it will not have a practical effect on the rights of the parties; it does not entail an important issue that might independently evade review or of which a resolution is in the public interest; and the appeal is not of jurisprudential importance. It concerns the application of the recently revised test for rectification to very particular facts. As a result, there is no social cost in leaving the matter undecided.

Reeb v. The Guarantee Company of North America, 2017 ONCA 771

[Sharpe, Lauwers and Roberts JJ.A]

Counsel:

B R Mitchell, for the appellant

J M K Garrett, for the respondent

Keywords:  Insurance Law, Coverage, Solicitor and Client, Conflict of Interest, Hoang v. Vicentini, 2015 ONCA 780, Amicus Curiae

Facts:

This is an appeal from the dismissal of an application for a declaration that the appellant, Ryan Reeb, is an insured under two policies issued by the respondent insurers. James Riley and Ryan Reeb (“Reeb”) (both 14) were playing with pellet guns at Riley’s house. Reeb shot Riley who lost an eye. The underlying action is by James Riley against Ryan Reeb and his parents. Reeb’s parents were separated at the time of the incident.  The mother had a homeowner’s insurance policy that had third party liability limit of $1 million. The claim was for $1.5 million. The insurer appointed counsel to defend Reeb. The insurer was represented by another firm with regards to coverage. Reeb’s counsel brought an application for a declaration that Reeb is insured under two additional policies. The first policy was that of Reeb’s father and the second was that of the second wife of Reeb’s father. These insurers are the respondents in this matter.

The motion judge dismissed the application to provide coverage under the respondents’ policies on the grounds that coverage was excluded by the “intentional act” exclusion clause in those policies. Reeb appealed. If this appeal fails, Reeb will not be entitled to coverage under the respondents’ policies. Moreover, it is likely that this will also eliminate coverage under the mother’s policy, which has a similar “intentional act” exclusion.

The Court raised with the parties whether the Reeb’s counsel was in a conflict of interest, as he was being instructed and paid by the mother’s insurer to defend Reeb, but if the appeal fails, it will be to that insurer’s financial advantage.

Issue:

Is there a conflict of interest?

Holding:

Appeal allowed.

Reasons:

Yes. When a lawyer is retained by an insurance company to represent its insured, a conflict of interest may arise where the interests of the insurance company and the insured are not in alignment. In Hoang v. Vicentini, 2015 ONCA 780, the Court of Appeal recently reiterated the criteria to be considered when determining whether there is a conflict of interest between an insured and his insurer with respect to the insured’s legal representation. The balance is between the insured’s right to a full and fair defence of the civil action against it and the insurer’s right to control that defence because of its potential ultimate obligation to indemnify. That balance is appropriately struck by requiring that there be, in the circumstances of the particular case, a reasonable apprehension of conflict of interest on the part of counsel appointed by the insurer before the insured is entitled to independent counsel at the insurer’s expense.

Here, there is a reasonable apprehension of a conflict between the interests of Reeb and the insurer. The apprehension of a conflict precludes the Court from ruling on the merits of the appeal. Reeb ought to have had independent counsel who did not report to or take instructions from the insurer to advise him on the advisability of bringing the underlying application in the face of a settlement offer, and representing him on this appeal. The appeal was therefore allowed on this ground alone. The Court then invited submissions as to what should happen next. It ordered that independent counsel should be appointed for Reeb. It also appointed amicus curiae to assist with submissions on Reeb’s future representation and the costs of the appeal.

Beffort v. Zuchelkowski, 2017 ONCA 774

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

M Z Tufman and G A P Tufman, for the appellants

J S G MacDonald, for the respondents

Keywords: Real Property, Adverse Possession, Fresh Evidence

Facts:

Ownership of a strip of land abutting two properties was disputed. The plaintiffs were awarded adverse possession at trial. The defendant appealed.

Issues:

(1) Did the trial judge err in finding that the respondent had established adverse possession?

(2) Did evidence from the president of a photogrammetric mapping company meet the test for the admissibility of fresh evidence on appeal?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge gave detailed reasons for accepting the evidence pled by the respondents, that for the relevant 10-year period prior to the land being converted to the Land Titles system, their predecessors in title had adversely possessed the disputed strip. The evidence established that a chain fence divided the lands, and had incorporated the strip of land into the area owned by the respondents. It was reasonable to reject the evidence of one of the prior owners, who testified that the chain link fence was not present when they owned the land. The trial judge did not err in finding that a statutory declaration relied upon by the appellants reflected a mutual mistake of all parties at the time that the chain link fence was the boundary.

(2) No. The fresh evidence was filed late without sufficient explanation. Further, the fresh evidence was not sufficiently reliable to overcome the direct evidence of the various witnesses and the contemporary photographs already submitted.

Sacks v. Ross, 2017 ONCA 773

[Lauwers, Hourigan and Benotto JJ.A.]

Counsel:

G MacKenzie and B MacKenzie, for the appellants

F McLaughlin, D E Charach and L Stanic, for the respondents Theodore Ross, Aliyah Kanji, Anna Maureen Bendzak and Jeffery Singer (the “respondent physicians”)

A L Marrison, W D T Carter and J M McIntyre, for the respondents Sunnybrook Health Sciences Centre, Pamela Raye-Ilogu and X. Li (the “respondent hospital”)

Keywords: Torts, Negligence, Medical Malpractice, Causation, Multiple Tortfeasors, Delayed Diagnosis and Treatment, “But For” Test, Juries, Instructions and Questions, Standard of Review

Facts:

The appellant, Jordan Sacks, suffered catastrophic injuries arising from complications after a routine bowel surgery. An anastomotic leak occurred after the surgery, spilling bowel contents into his abdominal cavity and sending him into septic shock. As a result, Mr. Sacks lost both legs below the knees, all of his fingertips and was in a coma for weeks following his emergency surgery.

At trial, the appellants asserted that the medical team’s negligent delay in Mr. Sack’s diagnosis and treatment at Sunnybrook Hospital caused his injuries. The responds argued that the delay was not material to the outcome of Mr. Sack’s injury as he contracted a rare flesh-eating disease that could not have been diagnosed or treated when it first arose. Consequently, his injuries were unavoidable and not the result of anyone’s breach of the standard of care.

The jury found that five of the defendants had breached their standard of care, however, it did not find that any of these breaches caused the injuries at issue. Therefore, the action was dismissed.

The appellants argued that the trial proceeded on a mistaken understanding of the appropriate causation test to be applied in a case of delayed diagnosis and treatment. The respondents submitted, to the contrary, that the trial judge did engage the correct causation test and formulated appropriate jury questions and instructions. The jury had before it two clearly opposed explanations of causation, and simply found the evidence and the arguments advanced by the respondents to be more persuasive.

This appeal concerns the proper test for causation in delayed diagnosis medical negligence cases involving multiple tortfeasors.

Issues:

(1) Did the trial proceed on a correct understanding of causation in negligence cases?

(2) Were the jury questions and the jury instructions on causation legally correct?

(3) Did any legal error in the jury questions or the jury instructions deprive the appellants of a fair trial?

Holding: Appeal dismissed.

Reasoning:

The Court held that the jury clearly and unambiguously accepted the defence evidence on the cause of the plaintiff’s injuries. While the Court agreed with the appellants that the jury questions and instructions were problematic, the deficiencies in them did not affect the outcome.

The Court engaged with the “global but for” test issue in this appeal for two reasons. First, from the outset, the underlying question in this case was how to apply the “but for” test in cases of delayed medical diagnosis and treatment involving multiple defendant tortfeasors. Second, cases that engage jury questions, jury instructions and the causation test involving multiple tortfeasors do not often come to the Court of Appeal. Thus, the Court determined that it had a responsibility to consider the issues and to provide assistance to trial judges and counsel in such cases going forward.

(1) Yes. The Court outlined the workings of the “but for” test in various contexts.

(i) Simple Negligence Action: A simple negligence action is one in which a single defendant is alleged to have negligently done something that caused the plaintiff’s injury. To succeed the plaintiff must prove both the defendant’s breach of the standard of care and causation. The plaintiff must show on a balance of probabilities that “but for” the defendant’s negligent act, the injury would not have occurred. In other words, the defendant’s negligence must be necessary in causing injury to the plaintiff.

When the issue concerns an omission by the defendant rather than an action, the trier of fact is required to attend to the fact situation as it existed in reality the moment before the defendant’s breach of the standard of care, and then to imagine that the defendant took the action the standard of care obliged her to take, in order to determine whether her doing so would have prevented or reduced the injury. Both types of simple negligence actions are factual inquiries.

(ii) The Causal Reasoning Process: Regardless of whether the defendant’s breach of the standard of care is an act or an omission, the trier of fact’s cognitive process in determining causation has three basic steps. The first is to determine what likely happened in actuality. The second is to consider what would likely have happened had the defendant not breached the standard of care. The third step is to allocate fault among the negligent defendants.

(iii) Negligence Actions Involving Multiple Defendants: The basic “but for” test also applies in these more complex cases where loss flows from a variety of negligence acts from different parties. The parties will be held to be jointly and severally liable and the judge apportions liability in relation to the degree of fault of each party.

(2) No. The appellants submitted that the jury instructions proceeded on the wrong legal understanding of causation in the context of a claim for delayed medical diagnosis and treatment against multiple tortfeasors. They asserted that a “global but for” test should have been applied. While the Court found errors in the jury questions, it found that using a “global but for” test for causation would not have resulted in a different verdict in this case. While the jury found five of the defendants breached the elements of their respective standards of care, it did not find that any of the breaches caused Mr. Sack’s injuries.

The Court set out the governing principles for determining the jury questions and jury instructions, considered the trial judge’s decision on the jury questions and instructions, and addressed the arguments of the parties.

(i) Civil Jury Questions

The jury is the trier of fact. Jury questions are intended to identify and track the findings of fact that must be made in a case. Jury questions should respond to the facts in issue and be logically sequential. They should be expressed as simply and clearly as possible. Jury questions should also be neutrally expressed and not contain any embedded assumptions. It is better if the questions can be answered in a “yes” or “no” format followed by a blank space in which the jury can insert a damages figure if it finds liability, and its reasons if called for. The jury’s answers should permit the judge to complete the judgment.

The question to the jury with respect to negligence should require that the jury specify in what respects the defendant was negligent. In complex cases, counsel should be prepared to propose and discuss the questions during a case management meeting or at the trial management conference. A civil jury trial should start with a working set of jury questions to guide the court, subject to revision as the evidence unfolds.

(ii) The Trial Judge’s Decision on the Jury Questions

To set the jury questions regarding causation, the trial judge cited the test prescribed by the Supreme Court. In Clements, McLachlin J. describes the test for loss that flows from different acts from various parties as follows:  

In such cases, the defendants are said to be jointly and severally liable. The judge or jury then apportions liability according to the degree of fault of each defendant pursuant to contributory negligence legislation.

It is important to reaffirm that in the usual case of multiple agents or actors, the traditional “but for” test still applies. The question, as discussed earlier, is whether the plaintiff has shown that one or more of the defendants’ negligence was a necessary cause of the injury. Degrees of fault are reflected in calculations made.

The trial judge noted the distinction between the “but for” test for factual causation and the “material contribution to the risk of injury” test, but ultimately found this case not to be the exceptional one in which the material contribution test to determine cause-in-fact should be used. The trial judge also found that there was no compelling reason not to use the language in Clements and that the phrase “cause or contributed to” proposed by the plaintiffs would confuse the jury.

(iii) Civil Jury Instructions

The purpose of jury instructions is to explain to the jury what their role is in the trial and their corresponding duties. Jury instructions function to remind the jury as to the judge’s opening remarks but also review the respective roles of the judge and the jury, the onus and burden of proof, the elements of the applicable law tailored to the case, how the jury ought to assess the evidence including credibility and expert evidence, and procedural instructions on how to deliberate. Jury charges usually contain statements of the positions of the parties prepared by them for inclusion in the charge.

The trial judge’s duty is to be an educator and to instruct the jury on the law. The trial judge must balance the competing tasks of making the jury charge both comprehensive and comprehensible. At trial, the judge articulated the test for causation in language that echoed Clements:

The plaintiffs must prove on the balance of probabilities that but for the conduct that you have identified as breaching the standard of care, sometimes we call this the “negligent conduct”, the injury would not have [occurred].

In an action alleging delay in diagnosis and treatment, such as this one, the plaintiff must establish on a balance of probabilities that the failure to diagnose the anastomotic leak in a timely fashion was a necessary cause of the unfavourable outcome for Jordan.

[A] defendant’s conduct need not be the sole cause. It does not have to be the most important cause. However, it must have been a necessary cause of the harm. … [T]he plaintiff must show on a balance of probabilities that the injury would not have occurred without the defendant’s negligence.

In concluding her instructions on causation, the trial judge said to the jury:

[Y]ou will be asked to determine the issue of causation for each of the defendants. This means that you must decide on the evidence whether but for the actions of each defendant Jordan would not have suffered the injuries that he did, specifically the multiple surgeries and amputations.

In assessing the adequacy of a jury charge, the Court of Appeal must ask if the jury would have understood the issues of fact, the relevant legal principles, how the facts relate to the law, and the positions of the parties based on the trial judge’s remarks.

A. The Causal Reasoning Process in Cases of Delayed Diagnosis and Treatment Against Multiple Tortfeasors: The normal causal reasoning process has three steps, as noted. First, the trier of fact must determine, on the evidence, whether the delay in treatment led to the plaintiff’s injury, considering only what the plaintiff needed by way of timely diagnosis and treatment in order to avoid injury, and without considering the presence or absence of any breaches of the standard of care. Second, the trier of fact must determine what would likely have happened had the defendant not breached the standard of care. If an actual delay led to injury, the plaintiff must establish fault: there was a breach of the standard of care on the part of one or more of the defendants that caused or contributed to the delay in diagnosis and treatment. Third, the trier of fact is to allocate fault among the negligent defendants.

The analysis of the second and third steps requires the trier of fact to determine     sequentially and separately with respect to each event in the chain of events leading to the plaintiff’s injury, whether there was a breach of the standard of care on the part of one or more of the defendants that caused or contributed to the delay that led to the injury. The trier of fact, assisted by the trial judge and the parties, must separate for analytical purposes, the events in the flow, and apply the causal reasoning process to each event in sequence. The Court found that the jury charge did not provide such instructions.

B. Problems with Using the Clements’ Wording of the “But For” Test in Jury Instructions: The appellants submitted that the jury was not asked to determine whether there was a delay in the diagnosis and treatment of the plaintiff’s condition that caused his injuries, quite apart from any negligence, which is the first step in the causal reasoning process. The Court rejected this argument, noting that while it would have been preferable to have included a basic question to this effect in the jury questions, there is no             doubt that in this case the jury was told the crux of the point.

The appellants further submitted that it was incorrect to ask the jury to determine whether the conduct of each defendant was necessary to bring about the plaintiff’s injuries. The Court acknowledged that in delayed diagnosis cases involving multiple tortfeasors could  present instances of “circular causation” in which the use of the word “necessary” could create confusion in the minds of the jury and lead to injustice. In such instances, it would be better if the word were not used in explaining the “but for” test to the jury. The Court found that the trial judge should not have rejected the use of the phrase “caused or contributed to” in the formulation of the jury questions and the instructions, and instead to have insisted on the language from Clements.

C. The Appellants’ Proposed “Global but for” Test: The appellants submitted that the questions and instructions were deficient because they did not tell the jury to consider     “whether Jordan’s injuries would have been avoided but for the defendants’ collective      negligent conduct.” They base the “global but for” test in Clements. Essentially, they argued that the traditional test applies in a case of multiple actors, but the question becomes whether it has been shown that one or more of the actors’ negligence was a necessary cause of the injury. The Court rejected the appellant’s argument that their proposed “global but for” test for causation would have resulted in a different verdict.

(3) No. A jury verdict in a civil trial will be set aside only if it is so plainly unreasonable and unjust as to satisfy the court that no jury reviewing the evidence as a whole and acting judicially could have reached it. The Court held that the competing injury causation theories in this case were clearly and unambiguously put to the jury via the evidence and particularly the expert evidence, in jury submissions by the parties, in the trial judge’s explanation of the positions of the parties, and in her jury instructions. Further, the answers given by the jury demonstrate that even if the jury questions had been expressed differently, the jury would not have found in the appellants’ favour.

The Court set out the jury submissions by the parties, the trial judge’s explanation of each party’s positon, her jury instructions and the jury’s answers.

(i) The Jury Address:

  1. The Defence Addresses: The jury heard first from counsel for the Sunnybrook defendants and then from the counsel for the doctors. Defence counsel submitted to the jury that the infection was not preventable on the evidence.  They emphasized that the leak occurred in the plaintiff’s abdomen, infecting his back muscles and eventually tracking down to his thigh. They represented that a necrotizing retroperitoneal soft tissue infection destroyed his back and thigh muscles on May 17th and it only got worse from there. Due to the profound septic shock the plaintiff experienced, he required large amounts of vasopressor which caused the necrotic to travel to his feet. Therefore, the defence asserted that based on clinical data the damages were not preventable.
  2. The Plaintiff’s Jury Address: The plaintiff’s counsel argued that the outcome was caused by the total failure of the healthcare team. This argument rested on proving that the plaintiff’s injuries would have been prevented but not for the collective delay in his diagnosis and subsequent treatment. The plaintiff’s counsel strongly challenged the defence expert regarding necrotizing fasciitis. They asserted that it was in fact a later development and would not have occurred had the sepsis been properly treated on May 17th.

(ii)  The Jury Instructions: In her jury instructions, the trial judge went over the positions of the plaintiffs and the defence, which were prepared by them for insertion into the instructions. At the very end of her instructions, just before reaching the jury questions, the trial judge summarized the expert evidence. She then dealt with causation throughout her instruction to the jury. She then returned to the issue in discussing the questions. There were no objections to the jury instruction.

(iii) The Jury’s Answers: The competing causation theories were put clearly to the jury via the evidence and particularly the expert evidence, in jury submissions by the parties, in the trial judge’s expression of the positions of the parties, and in her jury instructions. The jury’s answers must be assessed in that light.

The jury’s answers must be measured against the findings requested by trial counsel for the appellants. The jury found that five of the defendants breached the standard of care, but not of two defendants, Dr. Jeffery Singer nor Nurse Pamela Raye-Illogu. However, the jury did not find that any of the breaches of the standard of care by the defendants caused the injuries for which Mr. Sacks claimed compensation. The Court went through the events sequential and summarized the jury’s finding based on each act of negligence.

The sequence of relevant events started with Mr. Sacks’s surgery on May 13, 2008. Between then and early on May 16, 2008, when his condition started to deteriorate, he developed an anastomotic leak. The appellants do not allege that there was negligence in the surgery or in the fact that the anastomotic leak developed.

Against this backdrop, the first event to be assessed is Mr. Sacks’s presentation of pain and distended abdomen starting at 7:50 a.m. on May 16, when he was under the care of Nurse Raye-Ilogu. At 4:30 p.m. she informed Dr. Bendzsak and Dr. Kanji about Mr. Sacks’s pain. The jury found only that: “Dr. Kanji failed to document a complete assessment in the chart to assist in the communication of the patient’s ongoing care.”

The second event was that at 5:08 p.m. on May 16, at the direction of Dr. Kanji, Nurse Raye-Ilogu entered a bloodwork order in the hospital computer. She went off duty at 7:50 p.m. The jury made no adverse finding against her.

The third event is that the results of the bloodwork were entered into the hospital’s computer system at 9:51 p.m. The jury found the following deficiencies respecting Sunnybrook:

– The true collect time of the blood was not entered into the system by Sunnybrook           Health Sciences Centre.

– The hospital did not follow its own “turnaround time policy” when it failed to contact the “floor/requester to advise that results will be delayed.”

The fourth event is that on the evening of May 16, Mrs. Sacks called Dr. Ross at home and expressed concern about Mr. Sacks’s condition. Dr. Ross visited Mr. Sacks between 7:30 and 8:00 p.m. that evening. The jury found only that: “Dr. Ross did not communicate appropriately with his team when he failed to document, in the chart, his evening assessment on May 16th.”

The fifth event occurred at 8:00 p.m. on May 16 when Nurse Li first examined Mr. Sacks, and continued throughout her shift. The jury found only that: “Nurse Lee [sic] failed to complete documentation with a specific failure to record pain scales before administering medication and a failure to record accurate locations of pain.”

The sixth event was Dr. Singer’s assessment of Mr. Sacks’ in the early morning hours of May 17. The jury made no adverse findings respecting Dr. Singer. The seventh event occurred at 9:00 a.m. on May 17, when Dr. Ross resumed Mr. Sacks’s care. He ordered immediate bloodwork, then a CT scan. Trial counsel requested the jury to find that Dr. Ross failed to start antibiotics in a timely way. The jury found that: “Dr. Ross failed to begin antibiotics within the first hour of recognizing severe sepsis.”

Crucially, the jury did not find that any of the breaches of the standard of care by the defendants caused the injuries for which Mr. Sacks claimed compensation. Given the clarity and vigour of the positions considered by the jury, this is dispositive. The Court of Appeal determined that the appellants’ case foundered at the first logical question in the causal reasoning process: have the plaintiffs proven, on a balance of probabilities, that a delay in treatment led to the plaintiff’s injuries, considering only what he needed by way of timely diagnosis and treatment in order to avoid the injuries? The jury’s answer to this question was clearly “no” and it rejected the appellant’s causation theory on the evidence.

Holterman v. Fish, 2017 ONCA 769

[Feldman, Cronk and Miller JJ.A.]

Counsel:

F M Holterman and T. S. Tiffin, acting in person
H A Daley and S. Bieber, for the respondents

Keywords: Torts, Misfeasance in Public Office, Consent Discontinuance, Setting Aside, Fresh Evidence

Facts:

The CRA investigated the appellants for fraud under the suspicion that they had underreported their incomes for the years 1995-99. The respondent Andrew Fish was a CRA investigator who swore an Information to Obtain (ITO) in support of a search warrant for this investigation. A year after charges were laid against the appellants, the appellants filed Notices of Objection with the Minister of National Revenue (“MNR”) to dispute that the monies they had received were payments rather than loans, and were therefore subject to income tax.

There was a criminal trial which found that the ITO contained misstatements and that Fish had been intentionally misleading. This finding was not overturned at the appeal.

The appellants then commenced a civil action against the respondents for misfeasance in public office. At trial, the judge said the onus is on the appellants to prove that the money that was the subject of the investigation was a loan and not income. In light of this, the appellants decided it was best to pursue a discontinuance of the action, which they obtained on consent of the respondents.

One month after discontinuance, the appellants received Notices of Reassessment from the MNR which reassessed the money that was the subject of the investigation as now non-taxable. The appellants then brought a motion to set aside the discontinuance on the basis of exceptional circumstances arguing that if the reassessments were available at trial, it would have likely changed the result of the trial.

The motion judge concluded that the reassessments could not help prove what Fish knew twelve years earlier, at a time before the search warrants were executed, before the CRA investigation was complete, and before the Notices of Objection setting out the appellants’ argument had been received. The motion judge also found that this evidence could have been obtained by the appellants if they had exercised proper diligence.

Issue:

(1) Did the motion judge err in refusing to exercise his discretion to set aside the notice of discontinuance?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellants fall far short of meeting the high bar for setting aside the consent discontinuance. The test from 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., requires consideration of whether the new evidence, if presented at trial, would probably have changed the result and also whether the evidence could have been obtained before trial by exercise of reasonable diligence. This test includes the considerations of finality, apparent cogency of the evidence, delay, fairness and prejudice. The appellate court must in addition consider the importance of deferring to trial judges who are in the best position to decide whether at the expense of finality, fairness dictates that the trial be reopened.

Specifically, the interest of finality poses a great obstacle. Although there may be exceptional circumstances where departure from such a decision will be justified, courts should not allow significant and considered measures to terminate litigation to be lightly undone.

In this case, the MNR’s conclusion that the appellants had no tax liability is not an empirically ascertainable event. Rather, it is a technical determination made by applying legal rules to established or apparent facts. For this reason, the argument cannot be made that because in 2016 the MNR concluded the appellants had no liability in 2002, then there could have been no good reason in 2002 for anyone to have suspected otherwise. The reassessments provide no evidence of what Fish knew in 2002. As well, the bare fact of the reassessment does not significantly advance the argument that, in 2002, Fish had no reason to believe that the appellants were in breach of the ITA. The reassessments do not provide the appellants with the evidentiary foundation to establish a case for misfeasance in public office.

However, the court did not agree with the motion judge that the appellants failed to exercise reasonable diligence in pursuing evidence by not having exercised their statutory right to appeal the CRA’s original assessments to the Tax Court of Canada. That is an unduly harsh and costly onus to put on the appellants. Nevertheless, the appellants cannot succeed on this appeal because the fresh evidence is not of a nature that could have affected the result had the matter proceeded to judicial determination.

Short Civil Endorsements

Roda v. Toronto Police Services Board, 2017 ONCA 768  

[Sharpe, Blair and Epstein JJ.A.]

Counsel:

F Roda, acting in person

R Oliver and P Ma, for the respondents, Toronto Police Services Board and P.C. Bronagh Fynes

Keywords: Torts, Negligent Investigation, Evidence, Perjury

CLE Leasing Enterprise Ltd. v. Dhuga, 2017 ONCA 764

[MacFarland, Watt and Benotto JJ.A.]

Counsel:

No one appearing for the appellants

B Waseil, for the respondent

Keywords: Meritless Appeal, Failure to Appear

Criminal Decisions

R v. Nnabuogor, 2017 ONCA 762

[Cronk, Juriansz and Paciocco JJ.A.]

Counsel:

R Litkowski, for the appellant

A Baiasu, for the respondent

Keywords: Criminal Law, Evidence, Motive to Lie, R v. L.(L.), 2009 ONCA 413

R v. Baron, 2017 ONCA 772

[Gillese, Huscroft and Trotter JJ.A.]

Counsel:

J P Baron, acting in person

D Stein, appearing as duty counsel

C Harper, for the respondent

Keywords: Criminal Law, Fraud, Canadian Charter of Rights and Freedoms, s. 11(b), Right to be Tried Within a Reasonable Time, Delay, Presumptive Ceiling, Transitional Exceptional Circumstances, Case Complexity, Seriousness of Offence, R v. Jordan, 2016 SCC 27, R v. Cody, 2017 SCC 31, R v. Morin, [1992] 1 S.C.R. 771, Joint Offenders, R v. L.G., 2007 ONCA 654

R v. Carty, 2017 ONCA 770

[Cronk, Juriansz and Paciocco JJ.A.]

Counsel:

M Dineen, for the appellant

C Bartlett-Hughes, for the respondent

Keywords: Criminal Law, First Degree Murder, Evidence, Hearsay, Motive to Mislead, Spontaneous Statement Exception, R v. Khan (1988), 27 O.A.C. 142 (C.A.), Post-Offence Conduct Jury Instruction, R v. White, 2011 SCC 13

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 (SEPTEMBER 25 – SEPTEMBER 29, 2017)

Good evening.

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

In perhaps the final round in the Yaiguaje v. Chevron Corporation case, the Ecuadorian plaintiffs, who hold a judgment of approximately $9.5 billion from an Ecuadorian court against Chevron Corporation, appeal from the dismissal, by way of summary judgment, of their enforcement proceedings against Chevon Canada, a seven degree removed subsidiary of Chevron Corporation. Chevron Corporation and Chevron Canada successfully moved for security for costs of the appeal, including the costs of the motion for summary judgment in the court below, of over $1 million. It will be interesting to see whether this spells the end of this case or whether the security is posted.

In Keatley Surveying Ltd. v. Teranet Inc., the Court of Appeal upheld the dismissal of the class action by surveyors in Ontario, who alleged that Teranet Inc. infringed their copyright by digitizing, storing, and copying plans of survey created by the surveyors and registered or deposited in the provincial registry offices. The Court affirmed the lower court decision by holding that the province owns the copyright in the plans of survey deposited with the registry offices as a result of the combined effect of section 12 of the Copyright Act and the provincial legislation governing the land registry system. There was therefore no copyright breach arising from the fact that users of Teranet can access and make copies of plans of survey.

The Court released two decisions dealing with Rule 21.01. In Ridel v. Goldberg, the Court held that since discoverability issues generally involve questions of mixed fact and law, Rule 21.01(1)(a) will rarely be the appropriate avenue for determining limitation period issues. In Harris v. Ontario (Community Safety & Correctional Services), the Court held that the claim did not plead the issue that was decided on the Rule 21.01 motion. In this case, the issue decided was whether claims for legal expenses incurred in connection with a coroner’s inquest are recoverable at law in a wrongful death action brought pursuant to s. 61(1) of the Family Law Act. The court held that the motion judge should not have answered the question (the judge held such costs were recoverable as damages), given that such damages were not pleaded in the statement of claim.

Finally, Justice Brown, in Chambers, was uncertain about his jurisdiction to grant a charging order to secure solicitor’s fees with respect to not only work performed on the appeal before the Court, but with respect to the work performed on the proceedings before the Superior Court. His Honour adjourned the motion to a panel of the Court of Appeal, which will soon decide the question.

Please feel free to share this blog with your friends and colleagues. As always, we welcome your comments and feedback.

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

Ridel v Goldberg, 2017 ONCA 739

Keywords: Civil Procedure, Determination of a Question of Law, Limitation Periods, Rules of Civil Procedure, R. 21.01(1)(a), Salewski v. Lalonde, 2017 ONCA 515, Bankruptcy and Insolvency, Property of Bankrupt, Causes of Action, Assignments, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 38

Yaiguaje v Chevron Corporation, 2017 ONCA 741

Keywords: Civil Procedure, Appeals, Security for Costs, Judgments, Enforcement, Execution Act, Corporations, Piercing Corporate Veil, Chevron Corp v. Yaiguaje, 2015 SCC 42, Belokon v. Kyrgz Republic, 2016 ONSC 4506, Shoppers Drug Mart Inc. v. 6470360, 2014 ONCA 85, 642947 Ontario Ltd. v. Fleischer, (2001), 56 O.R. (3d) 417 (C.A.)

Highland Shores, Children’s Aid Society v C.S.D., 2017 ONCA 743

Keywords: Family Law, Crown Wardship, Civil Procedure, Summary Judgment, Appeals, Jurisdiction, Interlocutory Order, Final Order

Harris v Ontario (Community Safety & Correctional Services), 2017 ONCA 750

Keywords: Civil Procedure, Determination of Question of Law, Rules of Civil Procedure, Rule 21.01(1)(a), Torts, Negligence, Wrongful Death,  Family Law Act, RSO 1990, c. F.3., ss 61(1), Damages, Legal Expenses, Coroner’s Inquests

Keatley Surveying Ltd. v Teranet Inc., 2017 ONCA 748

Keywords: Intellectual Property Law, Copyright, Class Actions, Copyright Act, RSC 1985 c. C-42, s. 12, Electronic Land Registration Services Act, S.O. 2010, c. 1, the Registry Act, R.S.O. 1990, c. R.20; Land Titles Act; Surveyors Act, RSO 1990, c. ss. 29 and 30

Weenen v Biadi, 2017 ONCA 738

Keywords: Solicitor and Client, Legal Fees, Charging Orders, Jurisdiction, Solicitors Act, ss. 34(1), Courts of Justice Act, ss. 7(4), Sealing Orders

For Civil Endorsements, click here

For Capacity and Consent Board Decisions, click here

For Criminal Decisions, click here

Civil Decisions

Ridel v. Goldberg, 2017 ONCA 739

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

Counsel:

P Anisman, for the appellants

N Holmberg, for the respondent

Keywords: Civil Procedure, Determination of a Question of Law, Limitation Periods, Rules of Civil Procedure, R. 21.01(1)(a), Salewski v. Lalonde, 2017 ONCA 515, Bankruptcy and Insolvency, Property of Bankrupt, Causes of Action, Assignments, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 38

Facts:

This action was commenced more than two years after the Ridels (the appellants) obtained a trial judgment against e3m Investments Inc. for negligence, breach of contract and breach of fiduciary duty in relation to their investment accounts, but within two years of the dismissal of e3m’s appeal from that judgment.  In the action against e3m, the trial judge found that the respondent Robert Goldberg, the president, CEO and sole director of e3m, had abdicated his responsibility to supervise the employee who handled the appellants’ accounts. After e3m’s appeal was dismissed, e3m made an assignment in bankruptcy. The appellants then obtained an order pursuant to s. 38 of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, authorizing the assignment to them of the trustee’s cause of action for damages incurred by e3m as a result of the respondent’s breach of duties of care and supervision. They then commenced this action.

The focus of the appellants’ argument before the motion judge related to the relevance of e3m’s appeal to the calculation of the limitation period. They argued that until the appeal was decided, it would not have been appropriate for them to bring this action. Before the Court of Appeal however, the appellants shifted ground and argued that it could not be said that e3m could or should have considered an action against Goldberg, e3m’s own directing mind, until after e3m’s bankruptcy.

Issue:

Did the motion judge err in ruling on a Rule 21.01(1)(a) motion that the action was barred by the two-year limitation period?

Holding: Appeal allowed.

Reasoning:

Yes. The Court of Appeal was of the view that it was not appropriate for the court to rule on the issues raised by the parties on the limited record that was before it. This was a Rule 21.01(1)(a) motion for which the court only had the pleadings before it. There was no evidence before the court concerning what has become the main focus of the appellants’ submission, namely, the relationship between e3m and Goldberg and the control he is alleged to have exercised over e3m in relation to the claim advanced by the appellants.

In Salewski v. Lalonde, 2017 ONCA 515, the Court of Appeal observed, at para. 45, that as the discoverability issue is one of mixed fact and law, there may well be no circumstance “in which a limitation issue under the Act can properly be determined under Rule 21.01(1)(a) unless pleadings are closed and it is clear that the facts are undisputed.” The Court of Appeal was of the view that a more complete record would be required to permit the court to determine the issues raised by the parties on this appeal. Therefore, this order does not purport to determine the limitation period issue. Instead, that issue may be determined in the normal course, and on a proper factual basis, in these proceedings.

Yaiguaje v. Chevron Corporation, 2017 ONCA 741

[Epstein J.A. (in Chambers)]

Counsel:

Suzy Kauffman, for the moving party Chevron Canada Limited on M47811

Larry P. Lowenstein and Laura Fric, for the moving party Chevron Corporation on M47813

Paul M. Michell, for Chevron Canada Capital Company

Alan J. Lenczner, Q.C., Brendan F. Morrison, Kirk M. Baert, Celeste Poltak and Garth Myers, for the responding parties

Keywords: Civil Procedure, Appeals, Security for Costs, Judgments, Enforcement, Execution Act, Corporations, Piercing Corporate Veil, Chevron Corp v. Yaiguaje, 2015 SCC 42, Belokon v. Kyrgz Republic, 2016 ONSC 4506, Shoppers Drug Mart Inc. v. 6470360, 2014 ONCA 85, 642947 Ontario Ltd. v. Fleischer, (2001), 56 O.R. (3d) 417 (C.A.)

Facts:

The appellants (the “Ecuadorian plaintiffs”) hold a judgment of approximately $9.5 billion from an Ecuadorian court (the “Ecuadorian judgment”) against the respondent, Chevron Corporation. The Ecuadorian plaintiffs seek to enforce that judgment in Ontario against Chevron and its seventh level, indirect subsidiary, Chevron Canada.

Chevron and Chevron Canada initially contested the jurisdiction of Ontario courts to enforce the Ecuadorian judgment. The matter reached the Supreme Court of Canada, which affirmed Ontario’s jurisdiction over the Ecuadorian plaintiffs’ action: Chevron Corp v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69.

Following the Supreme Court’s ruling, Chevron and Chevron Canada brought motions for summary judgment before the Ontario Superior Court. Both motions sought the dismissal of the Ecuadorian plaintiffs’ claims against Chevron Canada, on the basis of its separate corporate personality from Chevron. The Ecuadorian plaintiffs brought a cross-motion for summary judgment, seeking a declaration that Chevron Canada’s assets were eligible to satisfy Chevron Corp.’s judgment debt. The Ecuadorian plaintiffs also brought a motion to add Chevron Canada Capital Company (“CCCC”) as a defendant to their action, and to strike the defences in Chevron Corp.’s statement of defence.

The motion judge granted the respondent corporations’ motion for summary judgment. He dismissed the Ecuadorian plaintiffs’ cross-motion and motion to add CCCC as a defendant, and partially granted their motion to strike. The Ecuadorian plaintiffs appealed all four decisions.

The respondents bring a motion for an order for security for costs totaling $1,022,951.47; $160,000 for the appeal and the rest for the proceedings below. They submit that such an order is appropriate as the Ecuadorian plaintiffs are not ordinarily resident in Ontario, have not provided evidence of impecuniosity, and have not established a good chance of success in the pending appeal. The Ecuadorian plaintiffs submit that security for costs should not be awarded given the merits of their appeal and Chevron’s delay in bringing this motion. They also urge this court to adopt a new approach to the law of security for costs, one that displays sensitivity to the principle of international comity and the similarity of this proceeding to a class action.

Issues:

(1) Are the respondents entitled to an order for security for costs?

Holding: Motion granted.

Reasoning:

(1)  Yes. There is no question that the Ecuadorian plaintiffs are normally resident outside of Ontario, thus “triggering the enquiry” into security for costs. The Ecuadorian plaintiffs have put forward no evidence to demonstrate that they are impecunious. Since the Ecuadorian plaintiffs cannot be deemed impecunious, they must demonstrate that their appeal has something akin to a “good chance of success” to resist the motion.

To do so, they would have to establish a proper basis for execution against Chevron Canada under the Execution Act, or provide “some compelling reason for lifting the corporate veil”. So far they have done neither.

The Act is only engaged when the judgment debtor has an existing right or interest in the property over which execution is sought. Conway J. adopted this position in Belokon v. Kyrgz Republic, 2016 ONSC 4506, stating at para. 31, that “The Execution Act is a procedural statute. It does not create new rights — it only provides a process for the enforcement of otherwise existing rights.”

As it pertains to piercing the corporate veil, the Court of Appeal confirmed in Shoppers Drug Mart Inc. v. 6470360, 2014 ONCA 85 that the appropriate test to apply in determining whether the corporate veil should be pierced remains that stated by Laskin J.A. in 642947 Ontario Ltd. v. Fleischer, (2001), 56 O.R. (3d) 417 (C.A.), at para. 68:

Typically, the corporate veil is pierced when the company is incorporated for an illegal, fraudulent or improper purpose. But it can also be pierced if when incorporated “those in control expressly direct a wrongful thing to be done”: Clarkson Co. v. Zhelka, [1967] O.J. No. 1054 at p. 578. Sharpe J. set out a useful statement of the guiding principle in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 at pp. 433-34: “the courts will disregard the separate legal personality of a corporate entity where it is completely dominated and controlled and being used as a shield for fraudulent or improper conduct.”

As stated by Sharpe J. (as he then was) in Transamerica at para. 22, the first part of the test, “complete control”, requires more than ownership. It requires “complete domination, and that the subsidiary company does not, in fact, function independently.” The second part of the test relates to the nature of the corporations’ conduct. There must be “conduct akin to fraud that would otherwise unjustly deprive claimants of their rights.”

On the first branch, the motion judge concluded that Chevron Canada was not completely dominated and controlled by Chevron, but rather that it had a typical parent/subsidiary relationship. Moreover, in coming to this conclusion, the motion judge reasonably relied upon and adopted the findings of Brown J. (who ruled on the issue of jurisdiction earlier in this litigation). These findings include that Chevron Canada initiates its own plans and budgets, funds its day to day operations and some recent capital expenditures, and files its own tax returns and corporate statements. Brown J. also noted that the relevant corporate structure has been in place since 1966, and was clearly not instituted in order to avoid the Ecuadorian judgment.

In terms of the second branch, and as the motion judge noted, the Ecuadorian plaintiffs expressly do not plead that the corporate structure of which Chevron Canada is a part was designed or used as an instrument of fraud or wrongdoing. At para. 24 of their pleadings, the Ecuadorian plaintiffs state that “the plaintiffs do not allege any wrongdoing against Chevron Canada”. Nor have the Ecuadorian plaintiffs provided convincing proof that Chevron’s corporate structure is being used “as a shield for fraudulent or improper conduct.”

Finally, the Ecuadorian plaintiffs seek to resist the motion by relying on an alleged “new approach” endorsed by the Supreme Court for recognition and enforcement actions. Epstein JA does not read the Chevron decision as establishing any such new approach. The case dealt only with jurisdiction. It does not hold that plaintiffs seeking to enforce a foreign judgment should be treated differently than any other litigant in our courts. The just order in this case is therefore one for security for costs.

Accordingly, Chevron Canada is entitled to security for costs of the appeal in the amount of $50,000 and for the proceedings below in the amount of $541,335.14. Chevron is entitled to security for costs of the appeal in the amount of $30,000 and for the proceedings below in the amount of $321, 616.33.

Highland Shores, Children’s Aid Society v. C.S.D., 2017 ONCA 743

[Doherty, LaForme and Miller JJ.A.]

Counsel:

C Murray and D Tobin, for the appellant
C Pilgrim, for the respondent C.S.D.

Keywords: Family Law, Crown Wardship, Civil Procedure, Summary Judgment, Appeals, Jurisdiction, Interlocutory Order, Final Order

Facts:

The appellant (the “CAS”) moved for summary judgment, declaring A.E. a ward of the Crown. Kirkland J., of the Ontario Court of Justice allowed the motion. The respondent then appealed the order of Kirkland J. to the Superior Court of Justice where Tranmer J. allowed the appeal, set aside the order of Kirkland J., and directed that “the matter shall proceed to trial”.

The appellant now appealed the decision of Tranmer J. to the Court of Appeal.

Issues:

(1) Does the Court of Appeal have jurisdiction to set aside Tranmer J.’s decision that the matter shall proceed to trial?

Holding: Appeal quashed.

Reasoning:

(1) No. An order of a Superior Court judge refusing to grant summary judgment and directing that the matter proceed to trial is an interlocutory and not a final order. The fact that the order set aside by the Superior Court judge was a final order is not determinative of the proper characterization of the order made by the Superior Court judge. The Court of Appeal must make its own assessment of the nature of the order. There is no appeal from the order of Tranmer J. to the Court of Appeal. An appeal lies to the Divisional Court only with leave of that court.

Harris v Ontario (Community Safety & Correctional Services), 2017 ONCA 750

[Doherty, LaForme and Miller JJ.A.]

Counsel:

D Kloeze and A Christian-Brown, for the appellant

A C Murray, for the respondents

A James and M Gibson, for the intervener, the Urban Alliance on Race Relations

Keywords: Civil Procedure, Determination of Question of Law, Rules of Civil Procedure, Rule 21.01(1)(a), Torts, Negligence, Wrongful Death,  Family Law Act, RSO 1990, c. F.3., ss 61(1), Damages, Legal Expenses, Coroner’s Inquests

Facts:

On a Rule 21.01 motion the respondents asked the motion judge to answer the question of whether claims for legal expenses incurred in connection with the inquest conducted into the death of a family member are potentially recoverable in law pursuant to s. 61(1) of the Family Law Act, R.S.O. 1990, c. F.3. The motion judge ruled that claims for legal expenses incurred in connection with the inquest conducted into the death of the deceased are potentially recoverable in law pursuant to subsection 61(1) of the FLA. The pleadings did not raise the issue of legal expenses connected to the inquest at issue. The appellants appeal this ruling on the ground that Rule 21.01 did not give the judge the authority to answer this question.

Issues:

Did the motion judge err in answering the question of law posed by the respondents pursuant to Rule 21.01?

Holding: Appeal allowed.

Reasons:

Yes. Rule 21.01 is available only to answer “questions of law raised by the pleadings.” The pleadings said nothing about a coroner’s inquest or any legal expenses incurred by the respondents in connection with the inquest. The motion judge could not properly answer the question raised on the motion without the actual pleadings raising that question of law.

Keatley Surveying Ltd. v. Teranet Inc., 2017 ONCA 748

[Doherty, Brown and Miller JJ.A.]

Counsel:

Kirk M. Baert and Celeste Poltak, for the appellant/respondent by way of cross-appeal

Paul Morrison, Julie K. Parla, Hovsep Afarian and Paul J. Davis, for the respondent/appellant by way of cross-appeal

Michael S. Dunn and Savitri Gordian, for the intervener, the Attorney General of Ontario

Keywords: Intellectual Property Law, Copyright, Class Actions, Copyright Act, RSC 1985 c. C-42, s. 12, Electronic Land Registration Services Act, S.O. 2010, c. 1, the Registry Act, R.S.O. 1990, c. R.20; Land Titles Act; Surveyors Act, RSO 1990, c. ss. 29 and 30

Facts:

The appellant, Keatley Surveying Ltd., brought a class action on behalf of all surveyors in Ontario who registered or deposited plans of survey in the provincial land registry offices. The appellant claimed that the respondent, Teranet Inc., infringed on surveyors’ copyright by digitizing, storing, and copying plans of survey created by surveyors and registered or deposited in the electronic land registration and administration system (ELRS). The respondent is a service provider that operates the ELRS, retained by the province.

The motion judge held in favour of the respondent, granted Teranet’s motion and dismissed the action. He held that the plans of survey registered or deposited under the ELRS belong to the province of Ontario, and not to the surveyor who created the plan.

The appellant appeals the dismissal of the action, arguing that the motion judge erred in holding that land surveyors do not maintain copyright in the plans of survey deposited or registered in the ELRS. The appellant further challenges the constitutionality of the provincial legislation that the respondent relies on to support its position that the copyright in the plans of survey deposited and registered in the ELRS belongs to the province.

The respondent submits that the appellant should not be allowed to raise constitutional issues for the first time on appeal, and in any event, that there is no merit in the vires argument. The respondent renews arguments made in respect of the other common issues by way of cross-appeal. The Attorney General of Ontario intervenes and supports the respondent’s position.

Issues:

1. Does the copyright in the plans of survey belong to the province of Ontario, pursuant to s. 12 of the Copyright Act, as a result of the registration and/or deposit of those plans of survey in the Ontario Land Registry Office?

2. Can the appellant raise the constitutional issue for the first time on appeal, and if so, is there merit in the vires argument?

Holding: Appeal and cross-appeal dismissed.

Reasoning:

1. Yes. The province owns the copyright in the plans of survey registered with the Land Registry Office. Teranet manages the ELRS for the province pursuant to statutory authority under the Electronic Land Registration Services Act and to the terms of licensing agreements with the province. In accordance with those agreements, the province retains all rights, title, and interest, including intellectual property rights, to the data used in ELRS. Teranet’s role is exclusively that of the service provider retained by the province.

Copyright is a creature of statute. Copyright subsists in plans of survey prepared by surveyors. Plans of survey are “artistic works” pursuant to s. 2 of the Copyright Act and attract protection provided by s. 5. The land surveyor who prepares a plan of survey is the author of that “work”.

This case is concerned only with copyright in plans of survey that have been registered or deposited under the ELRS. The copyright rests in either the province or the land surveyor who created the plan of survey. If the land surveyor has copyright, the making and distribution of paper or digital copies of the plan of survey is a breach of copyright committed by an employee of the province. However, if the province has copyright in the registered or deposited plans of survey, the appellant has no claim for breach of copyright, regardless of whether a government, employee or third party retained by the government, makes the copy.

Section 12 of the Copyright Act states:

Without prejudice to any rights or privileges of the Crown, where any work is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, the copyright in the work shall, subject to any agreement with the author, belong to Her Majesty and in that case shall continue for the remainder of the calendar year of the first publication of the work and for a period of fifty years following the end of that calendar year. [emphasis added]

The key question in this case is whether the registered or deposited plans of survey are “published by or under the direction or control of “the Crown. The rights of the Crown are informed by a series of provincial statues dealing with land registry in Ontario: the Registry Act; Land Titles Act; and the Surveyors Act. Considered in its entirety, the statutory scheme gives the Crown complete control over registered or deposited plans of survey and complete control over the publication of the plans of survey within the meaning of the Copyright Act. The provisions oblige the Crown to maintain possession and custody of all registered plans of survey. The Crown must provide access to those plans upon request. The surveyor cannot place any marking on the plan claiming any kind of copyright. The surveyor cannot make any change on the plan once it is registered or deposited without the permission of the examiner of surveys. However, the examiner can make changes without the permission of the surveyor. Importantly, the Crown is statutorily obliged to provide certified copies upon request. Therefore, certified copies of plans of survey made available to members of the public under the statutory scheme are artworks published under the “direction or control” of the Crown for the purposes of s. 12 of the Copyright Act.

The Court clarifies that ownership of copyright does not flow from the provincial land registration scheme. Rather s. 12 of the Copyright Act vests copyright in the Crown by virtue of the publication of plans under the “direction or control” of the Crown.

In its reasoning, the Court specifically refers to an Australian case, Copy Agency Limited, which considers whether the Australian Crown or the surveyor had copyright in the registered plans of survey. In doing so, the Australian court considered ss. 176 and 177 of the Australian Copyright Act 1968. Those sections read together are similar to s. 12 of the Canadian Copyright Act. The Australian Federal Court of Appeal held that the question turned on whether it is the first publication of the relevant plans. An “artistic work” is “first published” when it is made available to the public. The Court rejected the submission that a registered plan of survey was a different work than the unregistered plan prepared by the surveyor. The Court held that the plans were published by surveyors prior to the registration of the plans, either when plans were provided to the surveyors’ clients or when plans were made available to various regulatory and planning authorities. Accordingly, the Crown’s publication of the plans in the context of the land registration scheme could not vest copyright in the Crown.

S. 12 of the Canadian Copyright Act does not limit publication to “first publication”. Instead, s. 12 refers to any work that is “published” under the direction or control of the Crown and provides for a period of copyright measured from the Crown’s “first publication” of the work. The question of whether the Crown has copyright under s. 12, unlike its Australian counterpart, does not depend on whether the work has been previously published in Canada.

Surveyors are under no obligation to deposit or register plans of survey under the ELRS. A land surveyor who does not want a plan registered or deposited can (a) insert an appropriate term in the retainer with their client (b) refuse to sign the declaration required for the plan to be registered or deposited, or (c) place on the plan a claim of copyright or any other restrictions on the copy of the survey. As land surveyors are under no obligation to register or deposit plans of survey under the ELRS and can prevent any plan from being registered or deposited, there is no validity to the appellant’s submission that the above scheme is a form of expropriation.

2. On the Court’s interpretation, there is no vires problem. Federal legislation, s. 12 of the Copyright Act, bestows copyright in the Crown and provincial legislation informed the copyright inquiry mandated by s. 12.

Weenen v. Biadi, 2017 ONCA 738

[Brown J.A. (In Chambers)]

Counsel:

Alan B. Dryer, for the appellants

David Winer, for the respondent

Keywords: Solicitor and Client, Legal Fees, Charging Orders, Jurisdiction, Solicitors Act, ss. 34(1), Courts of Justice Act, ss. 7(4), Sealing Orders

Facts:

The moving party solicitor moved under s. 34(1) of the Solicitors Act, R.S.O. 1990, c. S.15, for an order charging the damages and costs awarded to the responding party client. The solicitor alleged an outstanding total of $360,000, consisting of fees and disbursements incurred for both the trial and appeal. The client has initiated assessment proceedings against the solicitor.

Issues:

(1) Does the Ontario Court of Appeal have jurisdiction to grant a charging order to secure solicitor’s fees?

(2) If there is such jurisdiction, is it limited only to granting a charging order in respect of fees and disbursements incurred in appeal proceedings before the court, or can the court also grant a charging order in respect of fees and disbursements incurred below in the Superior Court of Justice?

Holding: Motion adjourned to a panel of the Court of Appeal.

Reasoning:

Brown JA was uncertain about the court’s jurisdiction to grant the charging order requested. Combined with the need to determine a question relevant to both solicitors and clients, Brown JA decided to adjourn the motion to a panel of the Court of Appeal, as per the Courts of Justice Act, s. 7(4). He held that a question of jurisdiction is best decided by a panel, not a single judge sitting in Chambers. The filed motion materials were ordered sealed, given their confidential nature.

Short Civil Endorsements

SMTCL Canada Inc. v. Master Tech Inc., 2017 ONCA 744

[Doherty, LaForme and Miller JJ.A.]

Counsel:

Fariborz Mirzaee Tavana, for the appellant

Carlin McGoogan, for the respondent

Jeff Van Bakel, for the intervener, Wajeb Assaf

Keywords: Endorsement, Contracts, Solicitor and Client, Torts, Solicitor’s Negligence, W. (D.) v. White (2004), 189 O.A.C. 256, Appeal Dismissed

Haider Humza Inc. v. Rafiq, 2017 ONCA 737

[Doherty, LaForme and Miller JJ.A.]

Counsel:

Pathik Baxi, for the appellant, Mohammed Rafiq

Joanna Nairn, for the respondents

Keywords: Endorsement, Dismissal for Delay, Appeal Dismissed

Zeleny v. Canada (Attorney General), 2017 ONCA 745

[Doherty, LaForme and Miller JJ.A.]

Counsel:

Deryl Clayton Zeleny, self-represented

Mathew Johnson, for the respondent, Attorney General of Canada

Keywords: Endorsement, Appeal Dismissed

Gottlieb v. Malone Given Parsons Ltd., 2017 ONCA 757

[MacFarland, Watt and Benotto JJ.A.]

Counsel:

Alan B. Dryer, for the appellants

David Winer, for the respondent

Keywords: Municipal Law, Development Charges, Appeal Dismissed

Criminal Decisions

R v. Caporiccio, 2017 ONCA 742

[Laskin, Trotter and Fairburn JJ.A.]

Counsel:

Peter Lindsay and Maleeka Mohamed, for the appellant

Rachel Young, for the respondent

Keywords: Criminal Law, Fraud, Mens Rea, Evidence, Credibility, Reliability, R. v. Gagnon, 2006 SCC 17, [2006] 1 S.C.R. 621, Appeal Dismissed

R v. Gopie, 2017 ONCA 728

[Gillese, van Rensburg and Brown JJ.A.]

Counsel:

Saman Wickramasinghe and Zachary Kerbel, for the appellant

David Littlefield and Holly Akin, for the respondent

Keywords: Criminal Law, Drug Trafficking, Conspiracy to Import a Narcotic, Delay, Canadian Charter of Rights and Freedoms, ss. 11(b), Stay of Proceedings, R. v. Morin, [1992] 1 S.C.R. 771, R. v. Jordan, 2016 SCC 27, Sentencing, R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089, Appeal Dismissed

R v. Sargeant, 2017 ONCA 725

[Gillese, van Rensburg and Brown JJ.A.]

Counsel:

David Littlefield and Holly Akin, for the appellant

Carlos F. Rippell and Diana M. Lumba, for the respondent

Keywords: Criminal Law, Drug Trafficking, Conspiracy To Import A Narcotic, Delay, Canadian Charter Of Rights And Freedoms, ss. 11(b), Stay Of Proceedings, R. v. Carter, [1982] 1 S.C.R. 938, Appeal Dismissed

R v. Cooke, 2017 ONCA 749

[Cronk, Juriansz and Paciocco JJ.A.]

Counsel:

Richard Litkowski and Jessica Zita, for the appellant George Cooke

Paul Burstein and Karen Symes, for the appellant Matthew Cooke

Susan Magotiaux, for the appellant (C60905) and respondent (C61409 and C61447)

Keywords: Criminal Law, Manslaughter, Break and Enter to Commit Robbery, R. v. Newton, 2017 ONCA 496, Appeal Allowed

R v. T.B-J., 2017 ONCA 746

[Pardu, Huscroft and Fairburn JJ.A.]

Counsel:

Matthew Asma, for the appellant

David W. Russell, for the respondent, T.B-J.

Michael Ellison, for the respondent, N.A.M.

Jane Stewart and Mary Birdsell, for the intervener, Justice for Children and Youth

Keywords: Criminal Law, Youth Offenders, Sentencing, Appeal Dismissed

R c. Doirin, 2017 ONCA 755

[Sharpe, Rouleau and Benotto]

Counsel:

Sarah Desabrais and Sarah Paré-Wild, for the appellant

Philippe Cowle, for the respondent

Keywords: Criminal Law, Kidnapping, Ineffective Assistance of Lawyer, Fresh Evidence, Credibility, Appeal Dismissed

R v. Foster, 2017 ONCA 751

[Pardu, Huscroft and Fairburn JJ.A.]

Counsel:

Stephen Whitzman, for the appellant

Katherine Beaudoin, for the respondent

Keywords: Criminal Law, Possession of Firearm, s. 96(1) of the Criminal Code, Voluntariness, Derived Confessions Rule, Exclusion of Evidence, Trial Fairness, Appeal Dismissed

R v. Way, 2017 ONCA 754

[Pardu, Huscroft and Fairburn JJ.A]

Counsel:

Melissa Adams, for the appellant

Timothy Breen, for the respondent

Keywords: Criminal Law, Child Pornography, Sentencing, Appeal Allowed

R v. Philips, 2017 ONCA 752

[Gillese, van Rensburg and Brown JJ.A.]

Counsel:

Delmar Doucette, Andrew Furgiuele and Angela Ruffo, for the appellant, Jemaine Phillips

Richard Litkowski and Catriona Verner, for the appellant, Drai O’Hara-Salmon

John Patton, for the respondent

Keywords: Criminal Law, First-Degree Murder, Aiding and Abetting, Self-Defence, Expert Evidence, Provocation, Jury Instructions, Appeal Dismissed

R v. Wilkinson, 2017 ONCA 756

[Rouleau, Trotter and Paciocco JJ.A.]

Delmar Doucette and Andrew Furgiuele, for the appellant

Michael Fawcett, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Abuse, Collusion, Appeal Dismissed

Consent and Capacity Board Decisions

Jones (Re), 2017 ONCA 758

[Cronk, Juriansz and Paciocco JJ.A.]

Erin Dann and Janani Shanmuganathan, for the appellant

Elizabeth Teed, for the Attorney General of Ontario

Logan Crowell, for the Person in Charge of Ontario Shores Centre for Mental Health Sciences

Keywords: Ontario Review Board, Mental Health Law, Detention, Fresh Evidence, Appeal Dismissed

Pellett (Re), 2017 ONCA 753

[Laskin, Pepall and Trotter JJ.A]

Counsel:

Ken J. Berger, for the appellant Rosemary Pellet

Erica Whitford, for the respondent Attorney General of Ontario

Gavin S. MacKenzie, for the respondent Centre for Addition and Mental Health

Keywords: Review Board, Mental Health Law, Absolute Discharge, Not Criminally Responsible, Appeal Allowed

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 (SEPTEMBER 18 – SEPTEMBER 22, 2017)

Good evening.

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

The Court released two companion decisions (El-Khodr v. Lackie and Cobb v. Long Estate) relating to the deductibility of collateral benefits, namely Statutory Accident Benefits, from MVA damage awards.. The decisions are lengthy and detailed and go into depth on how amendments to the Insurance Act have impacted the deductibility of collateral benefits. The Court also dealt with the applicable prejudgment interest rate and whether collateral benefits should be deducted when determining whether an offer to settle attracts Rule 49 consequences (yes).

In Rahimi v. SouthGobi Resources Ltd., a secondary market securities class action case, the Court reversed the certification motion judge and certified the claim against the individual officers responsible for the allegedly misleading representations of the corporation.

Finally, there was a family law decision (Whalen-Byrne v. Byrne) that considered the proper calculation of the period of cohabitation for the purposes of determining the duration of spousal support under the SSAGs, and a municipal law summary judgment decision regarding the propriety of how municipal wastewater processing fees were calculated.

It looks like the beautiful summer weather we have been having lately will carry over into weekend, so I hope you all enjoy it.

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

Table of Contents:

Civil Decisions

Rahimi v. SouthGobi Resources Ltd., 2017 ONCA 719

Keywords: Securities Law, Secondary Market Misrepresentations, Class Actions, Securities Act, R.S.O. 1990, s. 138.8(1), s. 138.4(6)(a), Defence of Reasonable Investigative Efforts

Nylene Canada Inc. v. Arnprior (Town), 2017 ONCA 726

Keywords: Municipal Law, Municipal Services, Wastewater, Fees, Unjust Enrichment, Negligence, Municipal Act, ss. 394(1)(c) and 450, Summary Judgment

El-Khodr v Lackie, 2017 ONCA 716

Keywords: Insurance Law, Motor Vehicle Accidents, Damages, Collateral Benefits, Statutory Accident Benefits, Deductibility, Double Recovery, Cox and Carter Orders, Insurance Act, RSO 1990 c. I.8,  Sections 258.3(8.1) and 267.8, Bannon v. McNeely (1998), 38 O.R. (3d) 659 (C.A.), Gilbert v. South, 2015 ONCA 712, Jang v. Jang (1991), 54 B.C.L.R. (2d) 121 (C.A.) ,  Gurniak v. Nordquist, 2003 SCC 59, Mikolic v. Tanguay, 2016 ONSC 71, (Div. Ct.), Prejudgment Interest, Courts of Justice Act, R.S.O. 1990, c. C.43, s 127

Cobb v. Long Estate, 2017 ONCA 717

Keywords: Insurance Law, Motor Vehicle Accidents, Damages, Collateral Benefits, Statutory Accident Benefits, Deductibility, Double Recovery, Statutory Interpretation, Costs, Offers to Settle, Rule 49

Whalen-Byrne v. Byrne, 2017 ONCA 729

Keywords: Family Law, Spousal Support, Duration, Length of Cohabitation, Divorce Act, Spousal Support Advisory Guidelines

For Civil Endorsements, click here. 

For Capacity and Consent Board Decisions, click here. 

For Criminal Decisions, click here. 

Civil Decisions

Rahimi v. SouthGobi Resources Ltd., 2017 ONCA 719

[Epstein, Hourigan and Paciocco, JJ.A.]

Counsel:
Michael G. Robb, Paul Bates and Alex Dimson, for the appellant

John A. Campion, Gavin Tighe, and Stephanie Clark, for the respondents

Keywords: Securities Law, Secondary Market Misrepresentations, Class Actions, Securities Act, R.S.O. 1990, s. 138.8(1), s. 138.4(6)(a), Defence of Reasonable Investigative Efforts

Facts:

Paiman Rahimi is the representative plaintiff in a putative secondary market securities class action against the respondents SouthGobi Resources Ltd. (“SGR”), Terry Krepiakevich, Matthew O’Kane, Andre Deepwell, Pierre Lebel, Gordon Lancaster and Alexander Molyneux (collectively, save for Molyneux, the “Individual Respondents”) and Deloitte LLP.

SGR is a coal mining company trading on the Toronto and Hong Kong stock exchanges. Krepiakevich and O’Kane are two of its former CFOs. Deepwell, Lebel and Lancaster are directors and members of SGR’s audit committee.

The entirety of SGR’s revenue came from the coal-mining operations in Mongolia of its subsidiary SouthGobi Sands LLC (“SGS”).

SGS agreed to what are known as “bill and hold” contractual arrangements with certain of its customers. These customers ordered coal, which SGS stockpiled for customer pickup at a bonded yard that was under the control and supervision of the Mongolian government. The customers would pay the contract price as soon as the coal was delivered to the yard. Under that arrangement, they were able to avoid rising prices in coal and have greater flexibility in transporting it.

In 2012, a Chinese company attempted to purchase SGR, but the deal was blocked by the Mongolian government, which shut down SGS’s coal-mining operation in Mongolia in May 2012. The company produced no coal from then until September 2013. Coal prices in China were falling and, by the middle of 2012, SGS’s bill and hold customers had trouble making timely payments, resulting in a growing number of forfeitures of coal and repossessions by SGS.

SGR stopped using bill and hold agreements in mid-2012. It adopted a revenue recognition policy that required delivery of coal to the customer as a prerequisite to recognition. The transfer of title provisions in SGS’s bill and hold agreements were amended to take effect in January 2013, and the change in revenue recognition policy was to be implemented on a go-forward basis.

SGR concluded that there was no need in January 2013 to change its earlier financial statements as a result of these subsequent changes in operation. PwC, which reviewed the earlier financials from 2010 to mid-2012, agreed with this position.

SGR issued a formal restatement of its prior financial statements on November 8, 2013.

The press released noted that “as a result of the potentially material effects on the Company’s financial statements, the previous financial information provided by the Company in respect of the periods to be covered by the Restated Financials are no longer accurate and should not be relied upon.”

Following the November 8 press release, SGR’s share price dropped about 18 per cent.

SGR released another press release on November 14, 2013, indicating that there was “a material weakness in the Company’s internal controls over the financial reporting.” The “material weakness” was explained as a failure to ensure that “all aspects of sales arrangements were considered” in determining the appropriate financial accounting in respect of the bill and hold contracts used. In other words, there was no assurance that the accounting for the bill and hold contracts were IFRS compliant.

Rahimi sought leave under s. 138.8(1) of the Securities Act, R.S.O. 1990, c. S.5 (“SA”) to proceed with a misrepresentation claim. SGR and the Individual Respondents took a very unusual position. They relied on the defence of reasonable investigative efforts afforded to them by s. 138.4(6)(a) of the SA. In support of that defence, they submitted that the financial statements during the class period did not need to be restated and that SGR had no material weaknesses in its internal financial reporting controls. In other words, the Individual Respondents’ position was that there was no misrepresentation during the class period; rather, any potential misrepresentation was in the Restatement and/or the November 14 Press Release.

The motion judge permitted the claim to proceed as against SGR but not the Individual Respondents, holding that there was no reasonable possibility that the Individual Respondents would not be able to succeed on a defence of reasonable investigation under s. 138.4(6)(a) of the SA.

Rahimi appeals the motion judge’s denial of leave as against the Individual Respondents (the “Rahimi Appeal”). SGR brings a separate appeal (the “Corporation Appeal”) against the motion judge’s ruling granting leave for the claim to proceed against it.

Issues:

(1) Did the motion judge err in denying leave on the claim against the Individual Respondents?

(2) Did the motion judge err in granting leave on the claim against SGR?

Holding: Rahimi Appeal allowed. Corporation Appeal dismissed.

Reasoning:

(1) Yes. The primary error made by the motion judge was treating the leave motion as if it were a trial in which he had to finally resolve significant credibility issues on the record before him. The motion judge failed to give meaningful consideration to gaps in the evidentiary record and the significant credibility issues apparent from that record. In particular, he failed to consider compelling evidence that contradicted the defence narrative offered by SGR and the Individual Respondents on the leave motion.

This was not a case where there was truly uncontroverted evidence adduced by a defendant in support of a reasonable investigation defence. This was a case where there was conflicting evidence emanating from SGR on that key issue for determination. The motion judge erred in accepting the denials asserted by the Individual Respondents without considering the lack of production, the absence of evidence from PWC and Deloitte and the unqualified statements made in the Restatement and the November 14 Press Release. In coming to these unwarranted evidentiary conclusions regarding the credibility of the Individual Respondents as if the leave stage constitutes a mini-trial, the motion judge failed to properly implement the screening mechanism of the leave requirement in s. 138.8 of the SA by foreclosing a misrepresentation claim that has a reasonable possibility of success. The residual credibility problems with the Individual Respondents’ central defence, which could only be determined at trial, meant that this was not a case in which the policy objective of the leave requirement of protecting defendants from unmeritorious claims would be advanced by denying leave to Rahimi’s claim on the basis of that defence.

Continuous disclosure obligations are not a shell game where investors are left to guess where the truth lies. Investors have a right to know a corporation’s true state of affairs. The motion judge failed to consider this policy imperative and rendered a decision with respect to the Individual Respondents that is inconsistent with basic notions of securities regulation. The discrepancy between the position asserted in this litigation and the position taken in the Restatement and the November 14 Press Release is so jarring that the motion judge should not have refused to grant leave to proceed against any of the respondents.

(2) No. With respect to the claim against SGR, the motion judge made no error in determining that there was no certainty at this stage that SGR’s reasonable investigation defence would succeed at trial. This is a case filled with credibility issues and gaps in the evidentiary record. It is not possible on this record to be satisfied that there is no reasonable possibility that SGR would not be able to succeed on a defence of reasonable investigation under s. 138.4(6)(a) of the SA.

Nylene Canada Inc. v. Arnprior (Town), 2017 ONCA 726

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

Counsel:

Pasquale Santini, for the appellant

Paul A. Webber and Melanie H. Levesque, for the respondents

Keywords: Municipal Law, Municipal Services, Wastewater, Fees, Unjust Enrichment, Negligence, Municipal Act, ss. 394(1)(c) and 450, Summary Judgment

Facts:

The respondent, the Corporation of the Town of Arnprior, charged wastewater processing fees based on wastewater rates multiplied by the amount of a user’s water consumption. The appellant, Nylene Canada Inc., commenced an action against the respondent alleging that charging for wastewater processing services based on water consumption contravened s. 394(1)(c) of the Municipal Act. That provision prohibits a municipality from imposing a fee or charge based on the use of a service, other than a service provided by the municipality. The appellant argued that the fees should instead be calculated based on the amount of water that actually exits as wastewater. The appellant alleged that the respondent had been unjustly enriched by its fee structure and negligent in failing to implement a system where users can apply for a rebate for their unused sewer capacity.

The respondent brought a motion for summary judgment dismissing the action under Rule 20 of the Rules of Civil Procedure. The motion judge granted summary judgment and dismissed the appellant’s action. He held that the facts were largely not in dispute and there was no issue of credibility. He found that the respondent did not violate s. 394(1)(c) and had made a policy based decision that was immune from civil action under s. 450 of the Municipal Act. Section 450 provides that no proceeding based on negligence in connection with the exercise or performance of a discretionary power or function shall be commenced against a municipality if the action stems from a policy decision made in good faith.

The appellant concedes that this was a proper case for summary judgment but that the policy decision is not immune from civil action under s. 450 because the decision was not “a good faith exercise of discretion” as per s. 394(1)(c).

Issue:

(1) Was the motion judge correct in his determination that the respondent did not violate s. 394(1)(c) of the Municipal Act?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. The respondent did not violate s. 394(10(c).  The respondent imposed a fee based on the use of service that it provided to all its rate payers.

 

El-Khodr v Lackie 2017 ONCA 716

[Doherty, Macfarland and Rouleau JJ.A.]

Counsel:

BA Percival and JW Gibson, for the appellants

JY Obagi and EA Quigley, for the respondents

Keywords: Insurance Law, Motor Vehicle Accidents, Damages, Collateral Benefits, Statutory Accident Benefits, Deductibility, Double Recovery, Cox and Carter Orders, Insurance Act, RSO 1990 c. I.8,  Sections 258.3(8.1) and 267.8, Bannon v. McNeely (1998), 38 O.R. (3d) 659 (C.A.), Gilbert v. South, 2015 ONCA 712, Jang v. Jang (1991), 54 B.C.L.R. (2d) 121 (C.A.) ,  Gurniak v. Nordquist, 2003 SCC 59, Mikolic v. Tanguay, 2016 ONSC 71, (Div. Ct.), Prejudgment Interest, Courts of Justice Act, R.S.O. 1990, c. C.43, s 127

Facts:

The plaintiff (respondent) was catastrophically impaired when his tow truck was rear ended by the appellants’ vehicle. The trial proceeded before a jury and damages of $2,931,006 were awarded. The trial judge found that: (1) Prejudgment interest on the general damage award should be calculated at 5%, the rate that was in effect prior to January 1, 2015, when s. 258.3(8.1) of the Insurance Act was amended; (2) The respondent was required to assign his future income replacement benefit from his Statutory Accident Benefits (“SAB”)  insurer only to the age of 60 and not thereafter; (3) The jury should treat the existence of the Ontario Drug Benefit Program, which would cover the cost of the respondent’s medication after the age of 65, as a “contingency” only rather than as a certainty; and (4)  There should be no assignment to the appellant of any future payments to be made to the respondent by the SABs insurer in relation to medication and assistive devices or professional services.

The appellant appealed these findings of the trial judge. This appeal was heard together with Cobb v. Long Estate, 2017 ONCA 717, with reasons in that case being released concurrently. Both appeals deal with the regime in Part VI of the Insurance Act, R.S.O. 1990, c. I.8 for the treatment of SABs in the calculation of damages arising from motor vehicle accidents. The issue in relation to prejudgment interest is also common to both and the reasoning in Cobb on this point applies to this case as well.

Issues:

(1) Should prejudgment interest be calculated at 5%?

(2) Should the respondent be required to assign his future income replacement benefit from his SABs insurer only to the age of 60?

(3) Should the existence of the Ontario Drug Benefit Program have been treated as a “contingency” rather than a certainty?

(4) Should future SAB payments to be made to the respondent in relation to medication, assistive devices and professional services be assigned to the appellant?

Holding: Appeal allowed.

Reasoning:

(1) No. The amendment to the Insurance Act was effective from the day that it came into force and applied to all actions then in the system. The Courts of Justice Act (“CJA”) does not create a right to any particular rate of interest and context indicates that the legislature intended s.258.3(8.1) to apply to actions that had already arisen. The default interest rate pursuant to s.127 of the CJA is 2.5% and thus the prejudgment interest should be reduced accordingly.

(2) No. In her final reasons for judgment, the trial judge commented that the appellants admitted that the award did not disclose the retirement age that the jury had utilized and that it was a matter of speculation that the jury had used age 64. To ensure that the respondent’s entitlement to full compensation was not jeopardized, she held that the appellants were entitled to an assignment of income replacement benefits based on a retirement age of 60. The respondent presented his case through a variety of future earning scenarios by way of an accounting expert. Most of these scenarios involved the respondent retiring at age 64, others at 67.  The jury awarded an amount equal to a scenario in which the respondent was to retire at 64, therefore the obligation to assign should continue to the respondent’s 64th birthday.

(3) No. Under O. Reg 201/96 created pursuant to the Ontario Drug Benefit Act (“ODBA”), persons over the age of 65 are eligible for the Ontario Drug Benefit Program (“ODBP”), which covers the cost of prescription drugs. The jury was instructed to treat the ODBP as a contingency because there was substantial uncertainty about whether it would be available in 2028. The trial judge erred in this respect, as she should have instructed the jury to award damages based on the law as it currently exists.

(4) Yes. Following the jury verdict, the appellants sought an assignment of the SABs payments to which the respondent would be entitled post-trial. The trial judge’s refusal to make any assignment in relation to future professional services and future medication and assistive devices is the subject of this ground of appeal. The trial judge noted that the parties had not adopted the language proposed for the jury verdict sheet, accordingly the verdict sheet did not require the jury to specify costs under separate subheadings, and included only “Future Professional Services” and “ Future Medication & Assistive Devices.” This led the trial judge to conclude that “As a result of the jury’s global awards of $424,550 for Future Professional Services, and $82,429 for Future Medication and Assistive Devices, the Defendants are now unable to meet their onus to demonstrate that the jury award compensated the Plaintiff for the same loss in respect of which the Defendants now claim an assignment of benefits.” The trial judge considered the prevention of double recovery under section 267.8 the Insurance Act balanced against the respondent’s right to full compensation.

The trial judge in this case applied a strict matching approach on the basis of Bannon v. McNeely (1998), 38 O.R. (3d) 659 (C.A.), a case decided under a former statutory regime for the deduction of benefits, and Gilbert v. South, 2015 ONCA 712, 127 O.R. (3d) 526, a recent decision of this court that applies the Bannon approach in the assignment of benefits context. The Court of Appeal found that a strict qualitative and temporal matching requirement should not be applied to section 267.8. As it currently sits, the assignment and trust provisions of the Insurance Act requires the court to match benefits that will be received after trial to the broad, enumerated statutory categories only in a general way.

Justice MacFarland, writing for the court, made the following comments:

The policy rationale underlying Bannon is no longer relevant. For accidents that occurred between 1971 and October 1989 the Insurance Act established a scheme that required future accident benefits payable to a plaintiff by the no-fault insurer be paid to the insurer responsible for payment of the tort damages. At common law, “Cox and Carter” orders were fashioned if entitlement to future benefits could not be strictly proven and the present value of future benefits could not be deducted. The courts imposed these orders to ensure there would be no double recovery. Such an order would require the defendant to pay the damage award, while providing the defendant with credit for collateral benefits paid to the date of trial. Future statutory benefits that the plaintiff would receive after trial were subject to a trust and would be paid to the defendant’s insurer in the tort action when received. For accidents occurring between October 1989 and January 1994, it was unclear whether “Cox and Carter” orders were still available or whether a defendant was simply entitled to a deduction at trial for the present value of future accident benefits that might be payable after trial. It was also unclear whether deductions of no-fault benefits could be made against any head of tort damages.

In Bannon, the court required a defendant claiming the benefit of a statutory deduction to bear a strict onus of establishing the present value of any future no-fault benefits to which a plaintiff was entitled. Under the regime in operation at the time, the deduction was made from the damage award immediately after the verdict on damages and at a time when the entitlement to the future receipt of the deducted benefit might have been uncertain. If the SABs insurer decided not to pay the benefit for any reason, the plaintiff would have already accounted, by way of a reduction in her damage award, for a benefit that she would not ultimately receive. Certainty was required under that statutory regime to avoid the risk of under-compensation of the plaintiff.

The current statutory scheme was introduced in November 1996, in s. 29 of the Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21. For present purposes, the 1996 amendments did three important things: they codified the principle that SABs benefits that fall into the enumerated three general categories are deductible; they eliminated the quantification and deduction of the present value of future benefits that might be payable; and they codified the common-law “Cox and Carter” orders. Thus the policy rationale supporting the strict matching requirement in Bannon no longer applies.

Bannon may no longer be good law in this province. The Ontario matching principle articulated in Bannon is based on the approach of the British Columbia Court of Appeal in Jang v. Jang (1991), 54 B.C.L.R. (2d) 121 (C.A.) In Gurniak v. Nordquist, 2003 SCC 59,  a majority of the Supreme Court of Canada expressly stated that Jang was wrongly decided.

In the Insurance Act’s regime for mandatory assignment of accident benefits, plaintiffs who have recovered damages for future income losses, future healthcare costs or other ongoing expenses have an obligation to pay the corresponding statutory benefits, as the plaintiff receives them, to the defendant’s insurer. In Gilbert, this court applied the strict matching approach adopted in Bannon to these assignment provisions. In Gilbert, the plaintiff was not catastrophically injured, so, according to the version of the Statutory Accident Benefits Schedule, O. Reg. 34/10, in force at the time, the plaintiff’s receipt of health care benefits would cease after ten years and have a monetary limit of $100,000. The plaintiff’s insurer had an obligation to provide coverage to Gilbert in relation to any damages caused by an uninsured driver. The insurer brought a motion for a declaration that Gilbert was required to hold certain future statutory benefits in trust and pay them to the insurer or, in the alternative, for an order assigning the plaintiff’s right to future statutory benefits from the accident benefit insurer. The insurer argued that the jury’s award of damages for future care costs, coupled with the plaintiff’s entitlement to statutory benefits for medical and rehabilitation expenses, would constitute double recovery in the absence of an order requiring a trust or an assignment of those future benefits. The judge in Gilbert concluded that the plaintiff should not be subjected unfairly to deductions based on collateral benefit entitlements that are in doubt and/or which may not truly overlap with sums recovered in the tort action. He noted that there was no evidence to indicate with certainty the total amount of statutory accident benefits the plaintiff would receive. Also, it was unclear for what time period the jury award was intended to compensate. In addition to the temporal uncertainty, the trial judge concluded that there were qualitative concerns as the jury award made no allocation of the future care costs towards any particular category of future care expenditures. Because certain future care expenses were not recoverable under the SABs, he concluded that there was no way of making an accurate determination of the extent to which the jury award was intended to cover aspects of future treatment for which the plaintiff would not be reimbursed under the SABs. The trial judge in that case concluded that if these qualitative distinctions were not made, the plaintiff could receive less than the full compensation to which he was entitled and thus declined to order either a trust or an assignment. The Court of Appeal upheld the decision.

The decision in Gilbert is anchored by the trial judge’s factual determination that the jury award encompassed future care costs for which accident benefits would not be received and that the trial record did not provide a basis to reconcile the two. The Insurance Act now requires a plaintiff to hold in trust or to assign any benefits that she receives from her SABs insurer after the trial judgment. These provisions ensure that the plaintiff is fully compensated by the jury award but limit double recovery by assigning only those benefits actually received in the future to the tort insurer.

However, the question as to whether the strict matching requirement between heads of damage and statutory benefits to the current statutory scheme should be reconsidered is left undecided, as Justice MacFarland found that the Gilbert decision can be distinguished on its facts. First, the respondent here has been designated catastrophically impaired. The ten-year temporal limitation for SABs that concerned the trial judge in Gilbert did not arise in this case. Second, there were no benefits for which the assignment was requested that were not covered by SABs. The transportation expense that concerned the trial judge in Gilbert is not in issue. All of the claims in this case that make up the awards for future professional service and future medication and assistive devices were itemized sufficiently and all were covered by the SABs schedule. If there is no trust or assignment in respect of the SABs to which he will be entitled and which he will receive in the future for medication, assistive devices and professional services, the respondent will be over-compensated and his receipt of any such benefits with no obligation to account to the tort insurer will constitute double recovery – a result this legislative scheme was specifically designed to avoid. The trial judge thus erred in failing to order that there be an assignment in relation to the cost of future medication, assistive devices, and professional services.

Cobb v. Long Estate, 2017 ONCA 717

[Doherty, MacFarland and Rouleau JJ. A.]

Counsel:

G. Paliare and T. H. Lie, for The Estate of Martin T. Long (Defendant)

Rouben and K. Bonn, for Wade Brett Cobb, Erica Mae Cobb and James Wade Cobb, a minor by his Litigation Guardian, Erica Mae Cobb (Plaintiff)

Keywords: Insurance Law, Motor Vehicle Accidents, Damages, Collateral Benefits, Statutory Accident Benefits, Deductibility, Double Recovery, Statutory Interpretation, Costs, Offers to Settle, Rule 49

Facts:

This is the companion decision to El-Khodr v Lackie.

On July 8, 2008, the vehicles driven by Martin T. Long and the plaintiff, Wade Cobb, collided. Long was charged with operating a motor vehicle while impaired or “over 80” (Criminal Code, R.S.C., 1985, c. C-46, s. 253(1)), to which charge he pleaded guilty in August 2009. Mr. Long died before the trial of the civil action, so his estate became the defendant in this litigation.

In December 2009, the plaintiffs brought this action in negligence and gross negligence, claiming $2.35 million in compensatory damages and $3 million in punitive damages. The trial took place over the course of 19 days in the fall of 2015. The jury awarded $220,000 in compensatory damages. After deducting amounts pursuant to the Insurance Act for collateral benefits that Wade Cobb had received from his insurer and for the statutory deductible for general damages (i.e., damages for “non-pecuniary” losses, such as “pain and suffering” and “loss of amenity”), the trial judge calculated a final judgment amount of $34,000.

At trial, the real issue dividing the parties was the quantum of damages to which the plaintiff, Wade Cobb, was entitled. By the time of trial, Mr. Cobb’s injuries would be described as soft tissue in nature, resulting in chronic pain, such that he claimed to be permanently disabled and unable to resume either his pre-accident employment in the contracting field or any other meaningful employment.

The trial judge rejected the plaintiff’s request to put the question of punitive damages to the jury. The plaintiff alleged this was a proper case for that question to go to the jury because of Mr. Long’s drinking and driving conviction arising from the accident and the fact that Mr. Long had an earlier conviction for a similar offence.

From the jury’s award for past and future income losses, which totalled $150,000, the trial judge deducted the sum of $159,300 that the plaintiffs had received before trial in SABs for income replacement benefits. This sum was comprised of $29,300 received before the settlement of June 29, 2010, and the $130,000 portion of that settlement apportioned to “all past and future income replacement benefits”. This deduction resulted in a net award of zero for the loss of past and future income.

The plaintiff had received $9,150 in housekeeping and home maintenance benefits (“HKHM benefits”) before trial from his SABs insurer. Accordingly, the trial judge reduced the jury’s award of $5,000 for past HKHM expenses to zero. However, the trial judge refused to apply the remaining $4,150 in HKHM benefits that the plaintiff had received before the trial to the amount that the jury had awarded for future housekeeping loss, maintaining that award at $10,000.

The trial judge did not determine whether the amendment in s. 258.3(8.1) of the Insurance Act, which came into force on January 1, 2015, and which reduced the default rate of prejudgment interest for non-pecuniary losses for bodily injury or death from five percent to the bank rate at the time the proceeding was commenced (here, .5 percent), applied retrospectively. Instead, the trial judge exercised his discretion pursuant to s. 130 of the Courts of Justice Act and set the prejudgment interest rate at three percent.

Effective August 1, 2015, the statutory deductible applicable to an award for non-pecuniary damages increased from $30,000 to $36,540 through an amendment to s. 5.1(1) of the regulation entitled Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996, O. Reg. 461/96.

The trial judge concluded that the change to the regulation was “substantive”, as opposed to “procedural”, and, accordingly, should not be applied retrospectively to this action. He applied a deductible of $30,000, leaving a net general damage award of $20,000.

In his reasons on costs, the trial judge addressed whether the amendment to s. 267.5(9) of the Insurance Act that came into force on August 1, 2015 should apply to this action. Until July 31, 2015, under s. 267.5(9) and this court’s decision in Rider v. Dydyk, 2007 ONCA 687, 87 O.R (3d) 507, the court was not to consider the statutory deductible in determining entitlement to costs. Effective August 1, 2015, however, s. 267.5(9) was amended so that entitlement to costs was to be determined “with regard” to the statutory deductible. The difference here was significant, because of a defence settlement offer made March 13, 2014.

In reasons for judgment dated December 23, 2015 and reported at 2015 ONSC 7373, the trial judge determined that he “would not give the Insurance Act amendments retroactive application”. He added, however, that if he was wrong in that determination, he would exercise his discretion and order that each side bear its own costs.

Issues:

The plaintiffs raise three grounds of appeal:

  1. Did the trial judge err by deducting, pursuant to s. 267.8(1) of the Insurance Act, the amounts allocated to income replacement benefits in the SABs settlement from the jury awards for past and future income loss?
  2. Did the trial judge err in refusing to put the question of punitive damages to the jury?
  3. Did the trial judge err in his determination of prejudgment interest?

The defendant also raises three grounds of appeal:

  1. Did the trial judge err by failing to deduct the full amount of the HKHM benefits received by the plaintiff before the trial from the damages awarded for the housekeeping loss?
  2. Did the trial judge err in applying the statutory deductible in force prior to August 1, 2015 ($30,000) rather than the statutory deductible in force at the time of judgment ($36,540)?
  3. Did the trial judge err in his assessment of costs?

Held: Plaintiff’s appeal dismissed. Defendants’ appeal allowed.

Reasoning:

1. No. The attribution of the settlement funds to particular claims is a question of fact on which the court owes deference to the trial judge. The record fully supports the trial judge’s determination on this issue. In the settlement negotiations, the SABs insurer left it up to plaintiff’s counsel to determine the allocation of the settlement amounts. The Settlement Disclosure Notice divided the settlement compensation of $152,000 into $130,000 for income replacement benefits, $20,000 for medical benefits and $2,000 for “other items”. Correspondence from the settlement negotiations indicates that, before executing the Release, the plaintiff had agreed to allocate $130,000 of the $152,000 settlement to income replacement benefits, $20,000 to medical benefits and $2,000 to the plaintiff’s legal costs. There was no evidence in the record that the plaintiff had negotiated for compensation arising from any allegation of bad faith.

Claims advanced in a tort action for both past and future income loss are required to be separately advanced. Pre-judgment interest is owed on past income claims but not on future loss claims. The onus on a plaintiff is different – a plaintiff who claims for pre-trial pecuniary loss must prove the amount of that loss on the balance of probabilities. In contrast, a claim for future (i.e., post-trial) pecuniary loss needs only be proved on the basis of a “real and substantial possibility” of impairment of future earnings and a jury instructed accordingly.

Both types of claims are still claims for income loss. The Insurance Act does not differentiate between past and future losses.

Section 267.8(1) speaks only to amounts received prior to the trial for income loss. Whether those amounts relate to past or future claims is irrelevant for the purpose of deductibility.

2. No. The key point is that punitive damages are awarded “if, but only if” all other penalties have been taken into account and found to be inadequate to accomplish the objectives of retribution, deterrence, and denunciation.” Where tortious acts have already been sanctioned by the imposition of a criminal sentence, it is inappropriate to award punitive damages in a civil lawsuit. To do so is to punish twice for the same offence. Where, however, the civil proceedings establish that…the sentence does not fully sanction the tortfeasor’s behaviour… punitive damages may be awarded.  Here, the court found that there was no evidence to suggest that the defendant’s criminal sentence, consisting of a fine of $1,300 and a one-year driving prohibition, was insufficient to meet the objectives of retribution, deterrence and denunciation; and that the trial judge’s decision not to put the question of punitive damages to the jury was reasonable in the circumstances. His decision in this regard is therefore entitled to deference.

3. No. For the purposes of s. 128, s. 127(1) defines “prejudgment interest rate” as “the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the proceeding was commenced”. However, s. 128(2) creates an exception from this default rate of prejudgment interest for damages for non-pecuniary loss arising from personal injuries:

The relevant “rule of court” to which s. 128(2) refers is r. 53.10 of the Rules of Civil Procedure, which provides:

53.10 The prejudgment interest rate on damages for non-pecuniary loss in an action for personal injury is 5 per cent per year.

Therefore, s. 128 of the Courts of Justice Act contemplates two default rates of prejudgment interest: one for damages for non-pecuniary loss in personal injury actions, and one, called “the prejudgment interest rate”, for all other money awards for which s. 128 makes prejudgment interest available. The plaintiffs commenced their action on December 8, 2009, so the applicable prejudgment interest rate in s. 128(1) is .5%.

The effect of s. 258.3(8.1) of the Insurance Act is that, in an action for damages arising out of a motor vehicle accident, the prejudgment interest rate on non-pecuniary damages will now be the rate provided for in ss. 127 and 128(1) of the Courts of Justice Actsubject to the overriding discretion of the court in s. 130 of the same statute to increase or reduce the rate, to change the interest period, or to disallow interest altogether.

In this case, the trial judge did not make a determination one way or the other as to whether the amendment applied retrospectively. Instead, he chose what he described as “a third choice” and exercised the discretion available to him under s. 130(1)(b) of the Courts of Justice Act. Having “taken into account the factors set out in s. 130(2)” and having “considered the overall circumstances of the case”, he fixed the interest rate for non-pecuniary damages at three percent.

This was not erroneous. The amendment in the Insurance Act to the prejudgment interest rate was intended to have retrospective effect and it applies to all actions that are tried after its commencement.

First, as a matter of statutory interpretation, there is a presumption that the legislature does not intend to interfere with “vested rights”: Dikranian, at paras. 32-33. Dikranian, at paras. 37-40, endorsed Prof. Côté’s test for establishing a “vested right”: (1) the individual’s legal situation must be “tangible and concrete rather than general and abstract” (i.e.: the individual must point to a specific right); and (2) the legal situation must have been sufficiently constituted at the time of the new legislation’s commencement. In other words, by the time of the legislation’s commencement, the right must have crystallized and become “inevitable” and “certain”: 1392290 Ontario Ltd. v. Ajax (Town), 2010 ONCA 37, 257 O.A.C. 311, at paras. 37-38.The characterization of the “right” at issue is important to the success of the argument that the right had “vested” by commencement: 1392290 Ontario Ltd., at para. 39.

Second, new legislation that affects substantive rights is presumed to have a purely prospective effect unless a clear legislative intent that it is to apply retrospectively is evident. However, “procedural legislation designed to govern only the manner in which rights are asserted or enforced” applies immediately to both pending and future cases because such legislation does not affect the “substance” of the relevant rights: R. v. Dineley, 2012 SCC 58, [2012] 3 S.C.R. 272, at para 10. In Dineley, the Supreme Court emphasized that this presumption of immediate application does not apply to “procedural legislation” if that legislation “affects substantive rights”. Therefore, “the key task” lies “not in labelling the provisions “procedural” or “substantive”, but in discerning whether they affect substantive rights”: Dineley, at para. 11.

The plaintiff has not demonstrated that he has a crystallized or certain right to a particular rate of prejudgment interest. This the court was of the view that it was not necessary to consider the application of the presumptions or to decide whether s. 258.3(8.1) of the Insurance Act, which only deals with the rate of prejudgment interest and not with the entitlement to prejudgment interest, is substantive in nature. Even if the rate of prejudgment interest constitutes a substantive right, the fact that a particular presumption could apply does not necessitate a conclusion that the amendment does not apply in this case. Common-law presumptions on temporal application of legislation are simply aids in the identification of legislative intent. A contextual analysis of the legislation demonstrates that the legislature intended s. 258.3(8.1) to apply to causes of action that had already arisen but not yet been tried.

4. Yes. There is no reason to distinguish between the past and future awards. The head of damage is to compensate for loss of the ability to carry out HKHM both in the past and the future. The language of the legislation requires a reduction from the damages awarded. That is, all payments received before the trial for SABs in respect of pecuniary loss.

5. Yes. The legislature intended for the 2015 amendment to s. 5.1.(1) to have retrospective application. Accordingly, the amendment applied at the time of the judgment and the trial judge erred in holding otherwise.

The 2015 amendment to s. 5.1 of the Court Proceedings Regulation contains no transition provision that clearly indicates its temporal application. In contrast, the version of s. 5.1 in force before August 1, 2015 specifically stated that it was applicable to accidents that occurred on or after October 1, 2003. The court also noted that s. 267.5(8.1.1) of the Insurance Act specifically provides that the statutory deductible does not apply to “damages awarded for non-pecuniary loss awarded in respect of a person who dies as a direct or indirect result of an incident that occurs after August 31, 2010” (emphasis added). It is noteworthy that within that part of the statute that deals with the statutory deductible, the language distinguishes between those sections that are specifically intended to have only a prospective application and those that are not. The fact that there is no similar temporal language in the current version of s. 5.1 of the regulation provides some support for the argument that the change should apply to accidents occurring before its promulgation.

Absent persuasive evidence of a legislative intention to apply the version of a regulation in force at a specific date, section 59 of the Legislation Act, 2006 ensures application of the current version of a regulation to which a statutory provision refers. Thus, the interpretation of the regulation at issue must start from the premise that the regulation that is intended to apply to any given case is the regulation that is in force from time to time and not the version of the regulation that was in force at the date of the accident.

A regulation applies retrospectively where authorized by the regulation’s enabling statute, either by express words or by necessary implication: British Columbia (Attorney General) v. Parklane Private Hospital Ltd., [1975] 2 S.C.R. 47, at p. 60; Keyes, at p. 498-9. The Insurance Act authorizes the immediate application of the amended regulation to accidents that occurred before its promulgation. The fact that the dates for calculating the prescribed damage quantum in s. 267.5(8.3) of the Insurance Actabove which the deductible does not apply, match the dates in s. 5.1(1) of the Court Proceedings Regulation proves that the legislature must have authorized the executive to amend s. 5.1(1) with retrospective application to pending and future proceedings.

6. Yes.  The Court of Appeal concluded that the amendment to s. 267.5(9) which changed the words “without regard” to “with regard”, applies to the fixing of costs in this case for two reasons: (1) there is no vested right to costs, and (2) costs legislation is “procedural”. Thus the trial judge erred in holding otherwise.

The defendant’s offer to settle on March 13, 2014 of $40,000 inclusive of all damages was a valid Rule 49 offer and, based on the amount of the trial judgment as revised, was more favourable than the judgment that the plaintiffs achieved at trial. In the ordinary course, it should follow that the plaintiffs would be entitled only to their partial indemnity costs to the date of the offer and the defendant to its partial indemnity costs thereafter. However, in his reasons on costs, the trial judge said that, if he was incorrect in his calculation of the judgment amount, and it was determined that the deductible was to be taken into account so as to reduce the judgment figure for costs purposes, he would have ordered that each side bear its own costs. The defendant advised the court that it was prepared to live with that order and will not require the plaintiffs to pay the defendant’s partial indemnity costs from the date of the offer.

In response to the plaintiff’s assertion of entitlement to substantial indemnity on the basis of s. 4(6) of the Victims’ Bill of Rights, 1995, the court noted that the record does not disclose that any effort was made by way of motion before the trial judge to have the reasons corrected in this or any other relevant respect. In the circumstances the court must accept the reasons of the trial judge as they were written. In any event, the trial judge’s assessment of costs at approximately $409,000 on a judgment of $22,136.60, (or $34,000, as the trial judge found) is out of all proportion and cannot stand. On any proportional basis, the plaintiff’s costs, even taking the defence offer out of the equation for the moment, could not have been expected to exceed approximately $200,000, given the results achieved.

Whalen-Byrne v. Byrne, 2017 ONCA 729

[Laskin, Feldman and Miller JJ.A.]

Counsel:

Michael J. Polisuk, for the appellant/respondent by way of cross-appeal

Chelsea Hooper and Christina Doris, for the respondent/appellant by way of cross-appeal

Keywords: Family Law, Spousal Support, Duration, Length of Cohabitation, Divorce Act, Spousal Support Advisory Guidelines

Facts:

Both the appellant, Timothy Byrne, and the respondent, Kellie Whalen-Byrne, appeal from the February 17, 2016 order of Douglas J., which dealt with child support and spousal support. Each party raises a single issue. Mr. Byrne submits that the trial judge erred by failing to characterize a $75,000 advance he made to Ms. Whalen-Byrne as a payment on account of spousal support.

On her cross-appeal, Ms. Whalen-Byrne submits that in fixing the duration of spousal support, the trial judge erred by finding that the length of the parties’ cohabitation was only 13 years instead of 16.5 years. Thus, Ms. Whalen-Byrne contends that the trial judge erred in holding that the duration of spousal support should be 11 years from the date of separation.

Issues:

  1. Did the trial judge err by failing to characterize a $75,000 advance that Mr. Byrne made to Ms. Whalen-Byrne as a payment on account of spousal support?
  2. Did the trial judge err by finding that the length of the parties’ cohabitation was 13 years instead of 16.5 years?

Holding: Appeal dismissed. Cross-appeal allowed.

Reasoning:

  1. The $75,000 advance made to Ms. Whalen-Byrne was not a payment on account of spousal support.

On October 23, 2013, Mulligan J. made an order on the consent of the parties that Mr. Byrne pay Ms. Whalen-Byrne interim disbursements of $75,000. The order resolved Ms. Whalen-Byrne’s motion for interim disbursements. Importantly, the order provided: “The aforesaid payment is without prejudice to the issue of whether or not such payment shall be credited against an equalization payment.” In April 2015, the parties resolved all net family property issues, and their resolution was incorporated into a final order. This order included a provision for a $399,000 equalization payment from Mr. Byrne to Ms. Whalen-Byrne. The order said nothing about the $75,000 advance for interim disbursements.

The Court held that if Mr. Byrne was to receive any credit for his $75,000 advance, it was to be a credit against an equalization payment, not against his support obligation. As equalization issues were resolved well before trial, the dismissed Mr. Byrne’s appeal.

  1. The trial judge erred in finding the length of cohabitation to be 13 years instead of 16.5 years.

(a) Length of cohabitation

The parties began living together in June 1993. From the end of October 1996 until March 1997 – a period of approximately five months – Ms. Whalen-Byrne moved out of the matrimonial home and stayed with her mother. The parties then reconciled and married in late June 1999. They separated on April 25, 2010.

Under the Divorce Act, R.S.C. 1985, c. 3 (2d. Supp.), the length of cohabitation is a relevant factor in determining the duration of spousal support. The trial judge found that for the purpose of Ms. Whalen-Byrne’s claim for spousal support, the period of cohabitation was 13 years from March 1997 to April 2010. In other words, he did not include the three years and five months that the parties cohabited before their separation in October 1996.

The Court held that Mr. Byrne and Ms. Whalen-Byrne never formally separated in October 1996. At most what occurred was a brief “interim separation” with, as the trial judge found, “the possibility of resumption of cohabitation.” Therefore, the Court found that the appropriate period of cohabitation for the purpose of support is 16 years and 10 months (June 1993 to April 2010), less the 5 month period the parties lived apart – a total period of cohabitation of 16 years and 5 months.

(b) Duration of spousal support.

In fixing the duration of spousal support at 11 years from the date of separation, the trial judge took into account the relevant considerations under the Divorce Act and the Spousal Support Advisory Guidelines. For a period of cohabitation of 13 years, the Guidelines propose a duration of support between 6.5 years and 13 years from the date of separation. The trial judge’s order of 11 years was towards the upper end of the range.

For the appropriate cohabitation period of 16.5 years, the Guidelines propose a duration of support between 8.25 years and 16.5 years from the date of separation. Consistent with the trial judge’s consideration of the Guideline’s ranges, the Court fixed the duration of spousal support toward the upper end of the applicable range – at 14 years from the date of separation.

Short Civil Endorsements

Pepper v. Sanmina-Sci Systems (Canada) Inc., 2017 ONCA 730

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

Counsel:

Elizabeth Bennett-Martin and Stephen Simpson, for the appellant

Brian A. Pickard, for the respondent

Keywords: Insurance Law, Limitation Periods, Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218, Appeal Allowed

Weglarz v. Toronto (Police Services Board), 2017 ONCA 727

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

Counsel:

Fred Fischer, for the respondent

Andrew Weglarz, acting in person

Keywords: Endorsement, Civil Procedure, Striking Pleadings, Appeal Dismissed

Muslim Green Cemeteries Corporation v. Toronto Muslim Cemetery Corp., 2017 ONCA 732

[Doherty, LaForme and Miller JJ.A.]

Counsel:

Shahzad Siddiqui, for the appellant

John Longo and Patrick Copeland, for the respondent

Keywords: Endorsement, Administrative Law, Adjournment, Appeal Dismissed

Criminal Decisions

R v. Cho (Publication Ban), 2017 ONCA 723

[Watt, Epstein and Brown JJ.A]

Counsel:

Janani Shanmuganathan, for the appellant

Hannah Freeman, for the respondent

Keywords: Criminal Law, Assault with a Weapon, Sexual Assault, Evidence, Burden of Proof, Credibility, Sentencing, Appeal Dismissed

R v. Nield, 2017 ONCA 722

 

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

Karl Gowenlock, for the appellant

Davin M. Garg, for the respondent

Keywords: Criminal Law, Impaired Driving, Summary Conviction Appeal, Canadian Charter of Rights and Freedoms, ss. 9 and 24(2), Highway Traffic Act, R. v. Hajivasilis, 2013 ONCA 27, Criminal Code, ss. 839., R. v. R.R. (2008), 90 O.R. (3d) 641, Leave to Appeal Refused

R v. Niemi, 2017 ONCA 720

[Doherty, MacFarland and Paciocco JJ.A.]

Counsel:

David E. Harris, for the appellant

Randy Schwartz and Jeffrey Pearson, for the respondent

Keywords: Criminal Law, First Degree Murder, Sexual Assault, Evidence, Inculpatory Statements,  R. v Hart, [2014] SCC 52, One Party Consent Wiretap, Jury Directions, Appeal Dismissed

R v. Verdon, 2017 ONCA 721

[Laskin, Trotter and Fairburn JJ.A]

Counsel:

Eva Taché-Green, for the appellant

Michelle Campbell, for the respondent

Keywords: Criminal Law, Intimidation, Criminal Harassment, Assault, Sentencing, Indeterminate Sentence, Aging Offenders

R v. Abedi (Publication Ban), 2017 ONCA 724

[Laskin, Trotter and Fairburn JJ.A.]

Counsel:

Joshua Frost and Eric Neubauer, for the appellant

Andrew Cappell, for the respondent

Keywords: Criminal Law, Evidence, Loss of Evidence, Prejudice,

R v. Hamilton (Publication Ban), 2017 ONCA 735

[Laskin, Pepall and Trotter JJ.A.]

Counsel:

Carol Cahill, for the appellant

Rochelle Direnfeld, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Evidence, Admissibility, Appeal Dismissed

R v. M.G.T. (Publication Ban), 2017 ONCA 736

[Watt, Benotto and Roberts JJ.A]

Counsel:

Michael W. Lacy, for the appellant Luke Schwalm, for the respondent

Keywords: Criminal Law, Sexual Assault, Re-opening Request, Fresh Evidence, Appeal Dismissed

R v. N.J. (Publication Ban), 2017 ONCA 740

[Pardu, Benotto and Huscroft JJ.A.]

Counsel:

Raymond Boggs, for the appellant

Karen Shai, for the respondent  

Keywords: Criminal Law, Manslaughter, Sentencing, Bail Conditions, Appeal Dismissed

Consent and Capacity Board Decisions

Murray (Re), 2017 ONCA 731

[Watt, Epstein and Brown JJ.A. ]

Counsel:

Jason Murray, acting in person

Kelley Bryan, appearing as amicus curiae

Katherine Beaudoin, for the Attorney General of Ontario

Janice Blackburn, for St. Joseph’s Healthcare Hamilton

Keywords: Ontario Review Board, Administrative Law, Involuntary Detention, Procedural Fairness, Self-Representation, Amicus Curiae

 

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 (SEPTEMBER 11 – SEPTEMBER 15, 2017)

Good afternoon. Below are the summaries of this week’s civil decisions of the Court of Appeal for Ontario. There were two family law decisions, one in the context of the appointment of amici by the court, and the other a summary judgment decision with respect to property equalization. There was also an insurance decision regarding uninsured motorist coverage for an accident occurring in Minnesota and a case involving malicious prosecution.

Congratulations to Giovanna Asaro and Lisa Bruni of our office in successfully resisting an appeal from the dismissal of the claim against our client, the York Children’s Aid Society.

Please feel free to share this blog with anyone whom you think might be interested. As always, we welcome your comments and feedback.

Enjoy the weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzopopoulos@blaney.com

Tel: 416-592-2953

 

Table of Contents

Civil Decisions

Patinios v. Cammalleri, 2017 ONCA 700

Keywords: Torts, Malicious Prosecution, Miazga v. Kvello Estate, 2009 SCC 51, Courts of Justice Act, R.S.O. 1990, c. C.43, s.108(10)

Chao v. Chao, 2017 ONCA 701

Keywords: Family Law, Property Law, Resulting Trust, Pecore v. Pecore, 2007 SCC 17, Equalization Payment, Security, Family Law Act, s. 9(1)(b), s. 10(1)(d), Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7¸ Family Law Rules, Rule 16

Morwald-Benevides v. Benevides, 2017 ONCA 699

Keywords: Family Law, Civil Procedure, Amicus Curiae, Compensation, Legal Aid Ontario, Stay of Proceedings, Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43

Hartley v. Security National Insurance Company, 2017 ONCA 715

Keywords: Insurance Law, Motor Vehicle Accidents, Contractual Interpretation, Out of Province, Coverage, Underinsured Motorist Coverage, , Family Protection Coverage Endorsement, OPCF 44R, s. 1.1.5(a), s. 4, Special Damages, Foreign Legal Costs

 

 

 

Patinios v Cammalleri 2017 ONCA 700

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

Counsel:

M Simaan, for the appellant

R Cammalleri, acting in person

Keywords: Torts, Malicious Prosecution, Miazga v. Kvello Estate, 2009 SCC 51, Courts of Justice Act, R.S.O. 1990, c. C.43, s.108(10)

Facts:

The appellant appeals the dismissal of his action for malicious prosecution. The criminal trial that was the subject of this action was stayed at the request of the Crown. The trial judge concluded that this was the result of a negotiated resolution, making it necessary to examine whether there were any sanctions imposed as a result of the stay.

Issue:

Did the trial judge err in dismissing the malicious prosecution action?

Holding:

Appeal Dismissed.

Reasoning:

No. To establish malicious prosecution the plaintiff must prove that (1) the prosecution was initiated by the defendant; (2) it was terminated in the plaintiff’s favour; (3) there was an absence of reasonable and probable cause to commence the prosecution; and (4) the defendant’s conduct in setting the criminal process in motion was fueled by malice (Miazga v. Kvello Estate, 2009 SCC 51).

The first element is not in dispute.

With respect to the second element, the appellant claimed that there was no evidence to support the trial judge’s conclusion that there was a negotiated resolution, making it necessary to examine whether there were any sanctions imposed as a result of the stay.

On the third and fourth elements the appellant argued that the respondent’s failure to attend at trial, and his own unchallenged evidence that the incidents leading to the charges did not occur, should have led the trial judge to find that the charges were groundless and motivated by malice.

The Court of Appeal acknowledged that the appellant’s argument about the second element may have some merit, but found that the appellant had failed to establish the third and fourth elements on a balance of probabilities. Section 108(10) of the Courts of Justice Act provides that it is for the trier of fact to determine whether there was reasonable and probable cause for instituting the prosecution. Here the trier of fact found that the appellant had failed to establish the necessary facts on a balance of probabilities, the conclusions were supported by the evidence before him, and accordingly, the appeal was dismissed.

 

Chao v. Chao, 2017 ONCA 701

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

Counsel:

Alex Toolsie, for the appellant

Glenda D. McLeod, for the respondent

Keywords: Family Law, Property Law, Resulting Trust, Pecore v. Pecore, 2007 SCC 17, Equalization Payment, Security, Family Law Act, s. 9(1)(b), s. 10(1)(d), Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7¸ Family Law Rules, Rule 16

Facts:

This is a dispute between husband and wife over property ownership following the breakdown of their marriage. The parties separated in 2011 after 37 years of marriage.

The main issue in the matrimonial proceedings is how to characterize the more than $1.3 million in investments derived from money that the husband’s parents provided during the parties’ marriage. The money was invested, with some investments in the husband’s name, others in the wife’s name, and the remaining in both names jointly. The income generated from the investments was used to pay the majority of the family’s expenses.

At or about the time of separation, and without the wife’s consent, the husband transferred more than $1 million of the investments to his mother, Lillian Chao, or to accounts maintained by him with his mother or other family members (in some cases after forging the wife’s signature).

The husband argues that all the disputed investments were held in resulting trust for his parents or were loans that must be repaid to his mother (since his father is deceased). The wife argues that all of the advances were gifts to both parties and that there was no expectation of repayment.

On summary judgment, the husband was ordered to pay the wife the sum of $592,308 in equalization, as well as spousal support arrears and pre-judgment interest. The wife was also granted a charge over the former matrimonial home to secure payment of the equalization amount.

The husband appeals the motion judge’s decision.

Issues:

  1. Was the summary judgment procedure appropriate in this matter?
  2. Was it appropriate to strike portions of the husband’s affidavit?
  3. Was there improper double counting?
  4. Were the investment monies properly characterized?
  5. Was it was appropriate for the motion judge to grant security against the former matrimonial home?

Holding: Appeal dismissed.

Reasoning:

  1. The Summary Judgement Procedure was Appropriate in this Matter.

Rule 16(6) of the Family Law Rules provides that, on a summary judgment motion, if there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order.

The moving party bears the onus of showing there is no genuine issue requiring a trial. The responding party may not rest solely on mere allegations or denials, but shall “set out, in an affidavit or other evidence, specific facts showing that there is a genuine issue for trial”: r. 16(4.1).

The husband made three related arguments disputing the appropriateness of summary judgment in this case.

First, the husband argued that a decision should not have been made without his mother’s oral testimony, since her rights were affected by the judgment. The court did not give effect to this argument. The summary judgment procedure was invoked by the wife at a time when all of the evidence she had regarding the investments was available, and when it was apparent that the husband would not provide any further disclosure. It was up to the husband to ensure that his mother’s position was before the court, and to join her as a party to the extent her interests were implicated. The appropriateness of adding a party to litigation cannot determine the suitability of summary judgment. The fact that the husband chose to put his mother’s position before the court by affidavit, without seeking to join her as a party, was not a basis for refusing summary judgment.

Second, the husband argued that summary judgment should not have been granted without requiring oral evidence from his mother either under r. 16(6.2) or in a directed trial. The husband argues that her affidavit did not provide complete information. However, the husband did not ask for his mother to provide oral evidence at the summary judgment motion. Instead he asserted before the motion judge and on appeal, that his mother would be willing to attend at a trial to provide a complete account of the various advances that were made. This argument ignores the requirement in summary judgment for each party to “put its best foot forward”. The court held that the husband cannot succeed on summary judgment by saying that further or better evidence would be available in the future. The motion judge was entitled to assume that the evidence before him was the best evidence available.

Lastly, the husband argued that it was an error to grant summary judgment since there were material facts in dispute. The husband relied on Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 that summary judgment is most often appropriate in document driven cases, with few witnesses and limited contentious factual issues. The court disagreed and stated that the decision in Hryniak clearly states that these articulated circumstances “are helpful observations but…should not be taken as delineating firm categories of cases where summary judgment is and is not appropriate” (at para. 48). The court agreed with the motion judge that there were no material facts in dispute.

  1. It was appropriate to strike portions of the husband’s affidavit.

The husband contests the striking out of passages in which he pointed out errors in the wife’s assumptions and calculations relating to the investment accounts. He says that striking these passages ought to have been reserved as a “last resort” and deprived the court of important evidence relevant to the equalization issue.

The court disagreed. The motion judge on summary judgment did not strike the husband’s pleadings, and his order did not prevent the husband’s participation in the motion. Rather, the motion judge struck paragraphs from the husband’s affidavit containing evidence of the husband, which ought to have been supported by documents he failed to disclose. As such, the motion judge did not err in striking these paragraphs of the husband’s affidavit. Rule 19 of the Family Law Rules provides that where a party does not follow the disclosure rule, the court may order that a document favourable to the party’s case may not be used: r. 19(10)(b). The husband did not file his own net family property statement. He failed to comply with orders to provide documents respecting his investments, and with an order requiring his answers to undertakings and refusals on examination.

The wife’s amended net family property statement was based on information that the wife says was available to her, including accounts transferred, disposed of or dissipated by the husband prior to and after separation.

The husband asserted that the motion judge erred in accepting the wife’s figures, which included investments that no longer existed or had been transferred into new accounts. The court held that the husband cannot fail to provide a full accounting of the investments he managed, controlled, and ultimately liquidated and transferred, and then complain that the judgment was based on incomplete information.

  1. The investment monies were properly characterized.

The motion judge found that the presumption of resulting trust had been rebutted, and that the various advances made by the husband’s parents to the husband and wife could not be characterized as loans.

The husband argues that the motion judge erred in concluding that all of the advances of his parents were by way of gift, and that the evidence did not rebut the presumption of resulting trust.

The court disagreed. There was little evidence to distinguish the circumstances of the various advances, which in any event were all characterized by the husband as advances that were invested by the husband on behalf of his parents, with the income used for the parties’ living expenses.

In concluding that the advances were by way of gift, the motion judge applied the correct legal test and considered the relevant factors. He began his inquiry with the presumption of resulting trust and then weighed all the evidence to determine the parents’ actual intent at the time of the transfer: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795.

The legal test is intent at the time of the transfer. Evidence of intention that arises subsequent to a transfer must be relevant to the intention of the transferor at the time of the transfer. The court must assess the reliability of such evidence and determine what weight it should be given, guarding against evidence that is self-serving or tends to reflect a change in intention: Pecore, at paras. 44 and 59.

The conclusion that the monies advanced to the parties were given with the intent to make a gift was amply supported by the objective evidence in this case. The court found no error in principle.

  1. It was appropriate for the motion judge to grant security against the former matrimonial home.

Sometime after separation, the parties agreed on the value of the matrimonial home and consented to an order dated January 22, 2016, transferring the wife’s interest in the home to the husband for $390,000. The motion judge ordered a charge on the former matrimonial home, now fully owned by the husband, as security for payments he owed to her under the judgment.

The husband argued that the January 2016 consent order prohibits the charge because the consent order provides that “[n]either party shall make any further claim with respect to the former matrimonial home once the property is transferred.” The court did not give effect to this argument. The charge is not in respect of a claim to the property, but rather secures “the performance of an obligation imposed by the order” against property that now belongs to the husband: Family Law Act, s. 9(1)(b), s. 10(1)(d). Accordingly, the court found no basis to interfere with the judgment.

 

Morwald-Benevides v. Benevides, 2017 ONCA 699

[Feldman, Gillese, Pepall JJ.A.]

Counsel:

Chantelle Blom, for the appellant non-party Crown

Bonnie C. Oldham, appearing as amicus curiae

  1. Andrew Thomson, appearing as amicus curiae

Keywords:

Family Law, Civil Procedure, Amicus Curiae, Compensation, Legal Aid Ontario, Stay of Proceedings, Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43

Facts:

During a complex custody and access trial, the trial judge appointed an amicus on behalf of each party to assist the court. The wife had discharged several lawyers, while counsel for the husband sought to have herself removed as lawyer on record due to nonpayment of fees. The Attorney General was not given notice of the appointments. The Attorney General challenged the amicus appointments, which was rejected by the trial judge. The Attorney General appealed this ruling. The appeal judge determined that he required the assistance of amicus to resolve the issues raised on appeal, and appointed the same lawyers who had served as amicus at trial. The two lawyers would not accept legal aid rates for acting on the appeal, and wanted to negotiate rates with the Attorney General. The Attorney General was not prepared to negotiate, and instead provided the court with a list of three highly qualified counsel who were prepared to assist the court and to accept legal aid rates. The appeal judge determined that he required the two lawyers who were already familiar with the case to assist, and ordered a stay of the Crown`s appeal, stating that the Attorney General was obligated to “attempt to negotiate a mutually acceptable rate in good faith”. The non-party Crown appealed this decision.

Issues:

(1) Did the appeal judge err in finding that the Attorney General had an obligation to negotiate a fair and reasonable fee agreement with the appointed amici;

(2) Did the appeal judge err in staying the Crown’s appeal; and

(3) Did the appeal judge err in holding that two amici, as opposed to a single amicus, were required to provide responding submissions.

Holding: Appeal allowed.

Reasoning:

(1) Yes. Whether the appeal judge had jurisdiction to make the orders that he did turns on the interpretation and application of the Supreme Court’s decision in Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43. The majority decision in Criminal Lawyers’ Association imposed no obligation on the Attorney General to negotiate rates with amicus. The majority did suggest that when a judge requires help and appoints amicus, the amicus and the Attorney General “should meet to discuss rates and a mode of payment”, but there is no requirement that the negotiation be in good faith. While the Attorney General did not meet with counsel appointed as amicus, they did correspond to discuss rates. This correspondence fulfilled the expectations set out by the majority in Criminal Lawyers’ Association.

(2) Yes. The decision in Criminal Lawyers’ Association made the remedy of a stay available to a judge where the assistance of amicus is “truly essential”, the appointed amicus and the Attorney General cannot agree on a rate of remuneration, and there is no other recourse but to stay the proceedings until another appropriate amicus is found. Although the appeal judge’s preferred counsel were not available, as they would not work for legal aid rates, a court is not necessarily entitled to amicus of its choice where other appropriate counsel have been made available by the Attorney General. A stay was not required, as the Attorney General offered three experienced counsel for the appeal judge’s consideration.

(3) Yes. While two amici were required by the trial judge given the circumstances of the case, the appeal was not concerned with the merits between the parties, but rather with the constitutional and policy issues surrounding the power to appoint amicus in a civil case. Applying the “truly essential” test, there was no basis for the decision to appoint two amici.

The stay was set aside, and the matter remitted back to the appeal judge to select one of the three amicus counsel originally proposed by the Attorney General.

Hartley v. Security National Insurance Company, 2017 ONCA 715  

[Epstein, Hourigan and Paciocco JJ.A.]

Counsel:

W G Woodward, for the appellant

R Campbell, for the respondent

Keywords: Insurance Law, Motor Vehicle Accidents, Contractual Interpretation, Out of Province, Coverage, Underinsured Motorist Coverage, , Family Protection Coverage Endorsement, OPCF 44R, s. 1.1.5(a), s. 4, Special Damages, Foreign Legal Costs

Facts:

Glen Hartley, the respondent, and his wife, Theresa Hartley, were seriously injured in a traffic accident while touring on a motorcycle in the State of Minnesota. The Hartleys’ motorcycle was struck by a State of Minnesota owned truck, operated by a state employee. The Hartleys retained Minnesota counsel and sued the State of Minnesota for damages.  Even though Mr. Hartley’s injuries warranted damages in excess of US$500,000, he obtained a settlement of only US$500,000. This was the maximum payable by Minnesota to a tort claimant, in the circumstances. After legal costs were accounted for, Mr. Hartley was left with approximately C$386,500. Mr. Hartley looked to his Canadian insurance company, Security National Insurance Company (“SNIC”), the appellant, to pay him the difference between the damages he received of approximately C$386,500, and the C$1,000,000 underinsured motorist coverage ceiling provided for in an endorsement to his motor vehicle insurance policy. Specifically, he relied on the optional statutory Family Protection Coverage Endorsement, OPCF 44R, pursuant to a policy issued to Mr. Hartley by SNIC. SNIC refused to pay, stating that Minnesota was not an “inadequately insured motorist” within the meaning of OPCF 44R, and that, even if there were coverage, the policy would not include legal expenses incurred in the Minnesota action. Mr. Hartley sued.

The motion judge held that Minnesota was “underinsured” or, in the words of OPCF 44R, an “inadequately insured motorist”. He also held that Mr. Hartley could claim the legal costs he paid (“U.S. fees”) as special damages against SNIC. SNIC appealed.

Issues:

(1) Did the motion judge err in finding that Minnesota is an “inadequately insured motorist” within the meaning of OPCF 44R?

(2) Did the motion judge err in allowing Mr. Hartley to claim his U.S. fees as special damages in his Ontario action against SNIC?

Holding:

Appeal allowed, in part.

Reasoning:

(1) No. SNIC raised three bases for refusing Mr. Hartley’s claim for the shortfall left after his settlement agreement. First, it argued that Minnesota was not underinsured, but self-insured, and therefore underinsured coverage does not apply. Second, it argued that the shortfall in recovery is not the result of underinsurance, but rather the result of a statutory immunity. Finally, SNIC contended that even if a self-insured state enjoying statutory immunity can be an “inadequately insured motorist”, it is not accurate to say that Minnesota is underinsured since Minnesota offers single occurrence coverage up to US$1,500,000 that exceeds the C$1,000,000 coverage ceiling payable under OPCF 44R. SNIC thus maintains that its maximum liability is zero under the terms of OPCF 44R.

SNIC’s first argument was misdirected. Given the definition of “inadequately insured motorist” in s 1.1.5(a) of OPCF 44R, the fact that Minnesota chooses to self-insure is not inconsistent with it being an “inadequately insured motorist”. Interpreting the language of this section would lead an average person applying for insurance to understand the ordinary meaning of the phrase “financial guarantees as required by law in lieu of insurance” as including a legislated obligation by an uninsured state (such as the Minnesota Torts Claims Act) to indemnify its employees by paying compensation for tortious damage caused by those employees. Even though the motion judge did not engage in a close exercise in contract interpretation, he was correct in holding that Minnesota was an “inadequately insured motorist” within the meaning of OPCF 44R.

With regards to SNIC’s second argument, the legal entitlement to recover that triggers the obligation to indemnify is not compromised by limits on the ability to recover, whether those limits arise from statutory bars to action or statutory or contractual immunity provisions. The kind of limited immunity created by Minnesota’s Torts Claim Act does not, therefore, prevent the legal entitlement to recover under OPCF 44R. In fact, the damage limitation imposed by Minnesota’s Torts Claim Act impedes the ability to recover fully against the tortfeasor, thereby triggering the call on the “inadequately insured motorist” coverage. The fact that Minnesota’s Tort Claims Act provides a partial statutory immunity, capping the amount of damages recoverable from the state, is therefore not an answer to Mr. Hartley’s claim.

Regarding SNIC’s third argument, the court held the following: When the words “The insurer’s maximum liability under [OPCF 44R]… is the amount which the limit of family protection coverage exceeds the total of all limits of motor vehicle liability insurance, or bonds, or cash deposits, or other financial guarantee as required by law in lieu of insurance, of the inadequately insured motorist” in s. 4 of OPCF 44R are given their ordinary meaning in context, it is clear that they refer to the funds available to the claimant bringing the claim. Refuge from liability for the shortfall in coverage under Minnesota’s Tort Claims Act cannot therefore be found in the insurer’s maximum liability.

(2) Yes. The U.S. fees cannot be claimed against SNIC as special damages. These fees cannot be claimed as compensatory damages, nor can they be claimed as special damages. OPCF 44R does not offer coverage to Mr. Hartley for U.S. fees, and its terms make clear that compensation will solely be for a shortfall in compensatory damages caused by an inadequately insured motorist.

Short Civil Decisions

Huszti Holdings Inc v Your Quick Gateway (Windsor) Inc. (Appeal Book Endorsement), ONCA 708

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

Counsel:

Mark P. Nazarewich, for the appellants

Shaun F. Laubman and Niklas Holmberg, for the respondent

Keywords: Real Property, Easements, Expiration

S.C. v. York Region Children’s Aid Society (Publication Ban) (Appeal Book Endorsement), 2017 ONCA 707

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

Counsel:

Giovanna Asaro and Lisa Bruni, for the respondent

S.C., acting in person

Keywords: Civil Procedure, Striking or Dismissing Pleadings, No Reasonable Cause of Action

Consent and Capacity Board Decisions

Wall (Re), 2017 ONCA 713

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

Anita Szigeti, for the appellant Abraham Wall

Janice Blackburn, for the respondent the Person in Charge of St. Joseph’s Health Care Hamilton

Rebecca Schwartz, for the respondent Attorney General of Ontario

Keywords: Health Law, Criminal Law, Review Board, Significant Threat to Public Safety, Criminal Code, ss. 672.54, 672.78(1), Winko v. British Columbia (Forensic Psychiatric Institute), [1999] 2 S.C.R. 625, Re Carrick, 2015 ONCA 866, Re Ferguson, 2010 ONCA 810

Nelson v Livermore, 2017 ONCA 712

[Doherty, Benotto and Trotter JJ.A.]

Counsel:

Suzan E. Fraser, for the appellant

Janice Blackburn and Julia Lefebvre, for the respondent Dr. Craig Livermore

Yashoda Ranganathan and Hayley Pitcher, for the respondent Attorney General of Ontario

Keywords: Health Law, Consent and Capacity Board, Mental Health Act, R.S.O. 1990, c. M.7, ss. 24(1). Canadian Charter of Rights and Freedoms, ss. 7, 9, 11(h), and 12, Involuntary Admission

Flowers (Re), 2017 ONCA 710

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

Jonathan Ferrandes, for the appellant

Barbara Walker-Renshaw, for the respondent the Person in Charge of Ontario Shores Centre for Mental Health Sciences

Jennifer Epstein, for the respondent Attorney General of Ontario

Janice Blackburn, for the respondent the Person in Charge of Waypoint Centre for Mental Health Care

Keywords: Health Law, Criminal Law, Ontario Review Board, Involuntary Admission, Assault, Not Criminally Responsible by Reason of Mental Illness

Criminal Decisions

R v Kemp, 2017 ONCA 703

[MacPherson, Rouleau and Miller JJ.A.]

Counsel:

Amy Ohler, duty counsel

Peter M. Campbell, for the respondent

Keywords: Criminal Law, Possession for the Purposes of Trafficking, Controlled Drugs and Substances Act, ss 5(2), Canadian Charter of Rights and Freedoms, ss 11(b), R v Jordan, (2002) 162 C.C.C. (3d) 385, R v Moran, 21 O.A.C. 257

R v Patel, 2017 ONCA 702

[Simmons, van Rensburg and Miller JJ.A.]

Counsel:

Lisa Joyal, for the appellant

Nader Hasan and Stephen Aylward, for the respondent

Keywords: Criminal Law, First Degree Murder, Crown Appeal, Jury Charge, Criminal Code, ss 21 (1) and (2), R v Caddedu, 2013 ONCA 729,  R v Simpson, 60 O.A.C. 327

 

R v Sandhu, 2017 ONCA 709

[Laskin, Trotter and Fairburn JJ.A. ]

Counsel:

Melina Macchia, for the appellant

Concetta Zary, for the respondent

Keywords: Criminal Law, Possession for the Purposes of Trafficking, Knowledge and Control, Evidence, Reasonable Inferences, R v Pannu, 2015 ONCA 67

R v. Del Mastro, 2017 ONCA 711

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

Counsel:

Scott Fenton, for the appellant

Croft Michaelson, Q.C. and Brendan Gluckman, for the respondent

Keywords: Criminal Law, Election Law, Exceeding Election Expense Limits, Willfully Exceeding Personal Contribution Limits, Filing False or Misleading Election Campaign Returns, Canada Elections Act, S.C. 2000, c. 9, ss. s. 407(1), 407(3), 463(1), 497(3)(v) and 500(5), Interpretation Act, R.S.C. 1985, c. I-21, ss. 34(2), Harper v. Canada (Attorney General), 2004 SCC 33, R. v. Raghubeer, 2006 ONCJ 165, R. v. R.(R.), 2008 ONCA 497

R v. Ebagua (Appeal Book Endorsement), 2017 ONCA 706

[MacPherson, Rouleau and Miller JJ.A.]

Counsel:

Anthony Moustacalis, for the appellant

N Devlin, for the respondent

Keywords: Criminal Law, Unfair Proceedings, Ineffective Legal Counsel, New Trial

 

R v. Hayne (Appeal Book Endorsement), 2017 ONCA 704

[MacPherson, Rouleau and Miller JJ.A.]

Counsel:

Kathryn Wells, for the appellant

Luke Schwalm, for the respondent

Keywords: Criminal law, Driving Motor Vehicle While Disqualified, Identification Evidence

R v. McClung (Appeal Book Endorsement), 2017 ONCA 705

[MacPherson, Rouleau and Miller JJ.A.]

Counsel:

Eva Taché-Green, for the appellant

Nancy Dennison, for the respondent

Keywords: Criminal Law, Warrant of Committal, Sentencing, Credit for Pre-Trial Custody

R v. R.A. (Publication Ban), 2017 ONCA 714

[Gillese, Huscroft and Trotter JJ.A.]

Counsel:

Howard L. Krongold, for the appellant

Rachel Young, for the respondent

Keywords: Criminal Law, Publication Ban, Sexual Assault Against a Minor, Sexual Interference, Invitation to Sexual Touching, Evidence, Hearsay, Criminal Code, ss. 151, 152, 271 and 715.1, Kienapple v. R., [1975] 1 S.C.R. 729, R. v. Khan, [1990] 2 S.C.R. 531, R v W.(D.), [1991] 1 S.C.R. 742, R. v. H. (D.), 2016 ONCA 569

R v. Grandine, 2017 ONCA 718

[MacPherson, Simmons and Brown JJ.A.]

Counsel:

Michael W. Lacy and Adam Posluns, for the appellant

Roger Shallow, for the respondent

Keywords: Criminal Law, Manslaughter, Sentencing, Criminal Code, ss. 245 and 215, R. v. Groot (1998), 41 O.R. (3d) 280, R. v. Largie, 2010 ONCA 548 and R. v. Khan, 2001 SCC 86

R v. Grandine, 2017 ONCA 718

[MacPherson, Simmons and Brown JJ.A.]

Counsel:

Michael W. Lacy and Adam Posluns, for the appellant

Roger Shallow, for the respondent

Keywords: Criminal Law, Manslaughter, Sentencing, Criminal Code, ss. 245 and 215, R. v. Groot (1998), 41 O.R. (3d) 280, R. v. Largie, 2010 ONCA 548 and R. v. Khan, 2001 SCC 86

ONTARIO COURT OF APPEAL SUMMARIES (SEPTEMBER 4-SEPTEMBER 8)

Good afternoon,

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

In Daniel v Miller, Canfield, a partner of a law firm sued her old firm for wrongful dismissal after the firm was dissolved. She relied on the Supreme Court’s Human Rights Code decision in McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39 to argue that she was really an employee. She was unsuccessful at trial and in a fairly brief endorsement, her appeal was dismissed, much to the relief of law firms nationwide, I’m sure.

In an insurance coverage decision in National Gallery of Canada v Lafleur de la Capitale Inc., the Court allowed the appeal solely on the basis that the application judge’s reasons for decision did not allow for meaningful appellate review. The case was remitted to the Superior Court for a new hearing in front of a different judge.

Other topics covered this week included  a division of powers/constitutional law decision in the taxation/aboriginal law context, malicious prosecution and security for costs.

Have a nice weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

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

Table of Contents

Civil Decisions

Grand River Enterprises Six Nations Ltd. v. Ontario (Finance), 2017 ONCA 680

Keywords: Constitutional Law, Division of Powers, , Constitution Act, 1867, ss. 91 and 92, Pith and Substance, Canadian Western Bank v. Alberta, 2007 SCC 22, Double Aspect Doctrine, Canada Post Corp. v. Hamilton (City), 2016 ONCA 767, Taxation, Tobacco Tax Act, R.S.O. 1990, c. T.10, s. 12(2)(f. 1), Guindon v. Canada, 2015 SCC 41, Indian Act, R.S.C. 1985, c. I-5, ss. 87(1) and (2), Statutory Interpretation, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27

National Gallery of Canada v. Lafleur de la Capitale Inc.

Keywords: Insurance Law, Comprehensive General Liability, Coverage, Duty to Defend, Procedural and Natural Justice, Duty to Provide Reasons

Farley v. Ottawa (Police Services Board), 2017 ONCA 689

Keywords: Torts, Malicious Prosecution, Negligent Investigation, Constitutional Law, Canadian Charter of Rights and Freedoms, Reasonable and Probable Grounds, Miazga v. Kvello Estate, 2009 SCC 51, Summary Judgment

Novak v. St. Demetrius (Ukrainian Catholic) Development, 2017 ONCA 693

Keywords: Civil Procedure, Appeals, Security for Costs, Rules of Civil Procedure, Rule 61.06(1)(a), York University v. Markicevic, 2017 ONCA 651

Daniel v. Miller, Canfield, Paddock and Stone, LLP, 2017 ONCA 697

Keywords: Employment Law, Wrongful Dismissal, Partnerships, Law Firms, McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39, Standard of Review, Mixed Fact and Law, Palpable and Overriding Error

Lin v. Fleury, 2017 ONCA 695

Keywords: Civil Procedure, Appeals, Leave to Appeal, Jurisdiction, Rules of Civil Procedure, Rule  2.1(01)(1)

For Criminal Decisions, click here.

For Civil Endorsements, click here.

Civil Decisions

Grand River Enterprises Six Nations Ltd. v. Ontario (Finance), 2017 ONCA 680

[Strathy, Cronk and Pepall JJA] 

Counsel:

Brian Duxbury and Ben A. Jetten, for the appellant

Lise G. Favreau, Michael S. Dunn and Padraic Ryan, for the respondent

 Keywords: Constitutional Law, Division of Powers, , Constitution Act, 1867, ss. 91 and 92, Pith and Substance, Canadian Western Bank v. Alberta, 2007 SCC 22, Double Aspect Doctrine, Canada Post Corp. v. Hamilton (City), 2016 ONCA 767, Taxation, Tobacco Tax Act, R.S.O. 1990, c. T.10, s. 12(2)(f. 1), Guindon v. Canada, 2015 SCC 41, Indian Act, R.S.C. 1985, c. I-5, ss. 87(1) and (2), Statutory Interpretation, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27

Facts:

The appellant is the largest Canadian exporter of tobacco. It manufactures tobacco on the Six Nations of the Grand Reserve Territory in Ontario. It produces tobacco for export and tobacco products for sale to “Indians” and “bands” on “reserves”, within the meaning of the Indian Act. It does not sell tobacco to retailers outside reserves and does not sell to consumers who are required to pay taxes under the Tobacco Tax Act (the “TTA”).

The TTA regulates the manufacture, distribution and retail sale of tobacco products in order to collect tax. It imposes a tax on consumers of tobacco products, with the exception of tobacco products sold to “Indians” on a “reserve” for use by “Indians” which are not subject to tax. As part of the regulatory system established by the TTA, each party in the distribution chain is required to obtain a permit or registration certificate and to account for its tobacco supplies. This includes entities whose tobacco is not subject to taxable sale in Ontario because it is intended for export or sale on reserves.

Section 12(2)(f.1) of the TTA requires the Minister of Finance (the “Minister”) to demand security from parties, like the appellant, who manufacture and sell tobacco intended for export or for sale on First Nations reserves.  In December 2013, the Minister issued two permits to the appellant. One authorized the possession, storage and sale of unmarked fine cut tobacco (“UFCT”) for export. The other authorized the sale of UFCT to First Nations retailers. The Minister subsequently informed the appellant that he would be seeking security in relation to the issued permits.

The appellant took the position that the Minister’s demand for security was unlawful because no tax was payable on tobacco produced for export or for sale on reserves.

The Divisional Court dismissed the application. This court granted the appellant leave to appeal.

Issues:

(1) Is the Minister’s demand for security unreasonable and arbitrary?

(2)  Is s. 12(2)(f.1) of the Tobacco Tax Act constitutionally valid or applicable to tobacco destined for export or for sale on a reserve?

Holding: Appeal dismissed.

Reasoning:

(1) No. The Minister’s interpretation of the provision was reasonable and is entitled to deference.

The appellant’s interpretation of the statute is illogical. It submits that the definition of UFCT, when read with the definition of “marked fine cut tobacco”, means that UFCT must be in a “box, tin or other container” used for retail sale. The appellant argues that  since its export tobacco is not packaged in this manner, it is not UFCT.

However, the modern approach to statutory interpretation requires that the words of an act are read within its entire context and in harmony with its scheme, its object and the intention of Parliament (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27). “Marked fine cut tobacco” is defined under s. 1(1) as “fine cut tobacco in a package that is marked or stamped with an indicium as required under the regulations”. This refers to fine cut tobacco that has a mark or stamp on its packing to indicate that taxes have been paid. UFCT is defined as “fine cut tobacco” that is not tobacco falling within the definition of “marked fine cut tobacco.” “Fine cut tobacco” is not defined in the TTA. It is, however, defined in the Regulation as “loose tobacco product that has been refined to the point where it could be formed  into a cigarette”. The court found that since the appellant’s tobacco is “fine cut tobacco” and is not “marked fine cut tobacco” it clearly falls within the definition of UFCT.

The appellant never objected to the issuance of the permits to purchase and sell UFCT. The words of s. 12(2) are mandatory and therefore require the Minister to demand       security.

The appellant’s submission that its product is “partially manufactured tobacco” and not “fine cut tobacco” is contradicted by the evidence of its own witness.

(2) Yes. Section 12(2)(f.1) is constitutionally valid because it is incidental to a scheme of direct taxation within the province.

The pith and substance analysis (Canadian Western Bank v. Alberta, 2007 SCC 22) supports the constitutionality of s. 12(2)(f.1). The provision cannot be divorced from its context. The appellant acknowledges that the direct tax imposed by the TTA is constitutionally valid. The collection of the tax from wholesalers rather than retailers does not transform it into an ultra vires indirect tax. Nor does the enforcement process for the collection of the tax have the effect of taxing parties who are part of the collection process. The pith and substance of the TTA is plainly the imposition of a tax on the consumption of tobacco.  This is direct taxation within the province and falls squarely within provincial jurisdiction under s. 92(2). The purpose and effect of the legislation is to elaborate the marking regime, the registration and permitting system and the collection machinery designed to serve this end. Section 12(2)(f.1) is in pith and substance a provision in furtherance of the legislative scheme to ensure the integrity of the machinery for collection of the tax.

The double aspect doctrine (Canada Post Corp. v. Hamilton (City), 2016 ONCA 767) further permits both levels of government to legislate in relation to different aspects of the regulation of the same commodity. The purpose of the provision is not to single out or punish wrongdoers, but rather to proactively protect against lost tax revenue should product be diverted out of non-taxable markets and into the domestic market.

In Guindon v. Canada, 2015 SCC 41, the appellant argued that a provision under the Income Tax Act (the “ITA”) was criminal in nature and that consequently she was entitled to the protection of s. 11 of the Canadian Charter of Rights and Freedoms. In rejecting this submission, the Supreme Court found that “provisions, such as administrative monetary penalties, that encourage compliance by these non-taxpayers are integral to the ITA’s regulatory regime and are not criminal in nature simply because the target is not the taxpayer.” The Court of Appeal found this case instructive in this case. The court noted that the administrative penalties, fines and other assessments in the TTA are similarly integral to the scheme of the Act.

National Gallery of Canada v. Lafleur de la Capitale Inc.2017 ONCA 688

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

Counsel:
Kelly Hart, for the appellants

Mark Charron and Stephanie Doucet, for the respondent

Keywords: Insurance Law, Comprehensive General Liability, Coverage, Duty to Defend, Procedural and Natural Justice, Duty to Provide Reasons

Facts:

The appellants, Intact Insurance Company (“Intact”) and Lafleur de la Capitale Inc.”, appeal from an order requiring them to assume and fund the two actions brought forth by the respondent, National Gallery of Canada.

In August 2013, an employee of Lafleur, Conrad Lafrenière, tragically suffered fatal injuries in the course of his employment. He was carrying out maintenance work on a vehicle ramp located on the respondent’s premises. When a vehicle approached to enter the underground garage, Mr. Lafrenière stepped back towards the ledge of the ramp and fell.

The two underlying actions were commenced against the respondent by the spouse of the late Mr. Lafrenière (“the Arsenault action”) and other family members bringing claims under the Family Law Act, R.S.O. 1990, c. F.3 (“the Lafrenière action”).

Under a contract between the respondent and Lafleur de la Capitale Inc. (“Lafleur”) for landscaping and maintenance services at the respondent’s premises (the “maintenance contract”), the appellant Lafleur was required to add the respondent as a named insured under its comprehensive general liability (“CGL”) policy with Intact. This policy provides for coverage of not less than five million dollars per occurrence for bodily injury or property damage.

A January 21, 2014 Endorsement to the policy adds the respondent as an additional insured “but only insofar as [its] Legal Liability arises vicariously out of the operations of [Lafleur] in connection with [its landscaping and snow removal services]”.

The CGL policy contains numerous exclusions. Relevant to these proceedings are the exclusions for workers’ compensation claims and claims arising out of an employer’s liability for injuries to employees incurred in the course of employment.

In answering whether or not Intact owed the respondent a duty to defend the two actions, the application judge provided a brief declaration that Intact has a duty to defend. The appellants submit that the application judge’s brief reasons do not permit meaningful appellate review.

 

Issues:

Do the application judge’s brief reasons permit meaningful appellate review?

Holding: Appeal allowed.

Reasoning:

No. The application judge’s reasons are inadequate and do not permit meaningful appellate review.

In his brief reasons, the application judge did not conduct the necessary analysis of the pleadings, maintenance contract and policies, which were essential in this complex case, to address the coverage issue.

While the application judge’s reasons advert to the relevant principles, he did not engage in any analysis of the critical issues that had to be addressed and resolved in the present case.

The Court was also concerned that it did not have the benefit of full argument on all matters that are relevant to the disposition of the application. As a result, the Court allowed the appeal and remitted the application for a new hearing before a different judge.

Farley v. Ottawa (Police Services Board), 2017 ONCA 689

[Watt, Huscroft and Trotter JJ.A]

Counsel:

Diane Condo, for the appellant

Stuart Zacharias, for the respondent
Keywords: Torts, Malicious Prosecution, Negligent Investigation, Constitutional Law, Canadian Charter of Rights and Freedoms, Reasonable and Probable Grounds, Miazga v. Kvello Estate, 2009 SCC 51, Summary Judgment

Facts:

The plaintiff appealed a decision granting the Ottawa Police Services Board summary judgment dismissing his action, in which he claimed damages for malicious prosecution, negligent investigation and breach of Charter rights. These claims arose following an investigation conducted by the Ottawa Police which resulted in the appellant’s arrest on charges of first degree murder, conspiracy to commit murder, and possession of explosives with the intent to cause bodily harm or death. The appellant was found guilty by a jury, but successfully appealed the decision on the basis of misdirection and misreception of hearsay evidence, resulting in a new trial being ordered. The second trial took place several years later, but two of the Crown’s key witnesses were unavailable. The trial judge determined that the Crown’s evidentiary problems were too significant, and consequently acquitted the appellant. The appellant then commenced proceedings against the Ottawa Police Services Board.

On the motion for summary motion brought by the Ottawa Police Services Board, the motion judge found that there was no evidence of malicious prosecution or evidence that the investigation fell below a standard of reasonable care. There was also no evidence of negligence, and no basis for a Charter infringement claim. Therefore, the motion judge found that there was no issue requiring trial, and the summary judgment motion was granted.

 

Issues:

(1) Did the motion judge err by weighing evidence and drawing inferences that were beyond his authority on the motion for summary judgment?

Holding: Appeal dismissed.

Reasoning:

(1) No. Critical to the appellant’s action is the assertion that the police did not have reasonable and probable grounds upon which to believe the appellant committed the alleged offences. Counsel for the appellant conceded committal for trial at the conclusion of the preliminary inquiry, and the prosecution would likely have continued if not for the Crown’s evidentiary issues. The Court held that this demonstrated that there were reasonable and probable grounds for the criminal prosecution, citing Miazga v. Kvello Estate, 2009 SCC 51. Therefore, the appellant had no prospect of success at trial, and the motion for summary judgment was properly granted.

< a name= “08094” Novak v. St. Demetrius (Ukrainian Catholic) Development, 2017 ONCA 693

[Epstein J.A. (In Chambers)]

 

Counsel:

S Novak, acting in person

M Wiffen, duty counsel

N Brankley, for St. Demetrius Ukrainian Catholic Development Corporation and Ukrainian Canadian Care Centre (collectively, the respondents)

Keywords: Civil Procedure, Appeals, Security for Costs, Rules of Civil Procedure, Rule 61.06(1)(a), York University v. Markicevic, 2017 ONCA 651

Facts:

The appellant, Ms Novak, issued a statement of claim alleging that the respondents wrongfully denied her a full-time position at the Ukrainian Catholic Care Centre (“UCCC”). The action was dismissed after a trial by Diamond J. The trial judge found Ms. Novak’s claim to be statute-barred and further held that Ms. Novak had failed to prove her claim on the merits. After serving a notice of appeal, Ms. Novak was ordered to pay the costs of the trial.

The respondents seek an order for security for costs under r. 61.06(1) of the Rules of Civil Procedure that allows a judge to order security for costs in an appeal where it appears that there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. The respondents argue that there is good reason to believe that Ms. Novak’s proposed appeal is both frivolous and vexatious. To succeed in her appeal, Ms. Novak would have to prove that the trial judge made a palpable and overriding error not only in concluding that she commenced the action out of time but also that she failed to prove her case on the merits.

Issue:

Should the court exercise its discretion to order security for costs?

Holding:

Motion granted.

Reasoning:

Yes. Ms. Novak pointed to no evidence that would support a finding that the limitation period may not have begun to run after June 2009 when the union advised all parties that it would not be taking any further action regarding Ms. Novak’s grievance. This fact was sufficient to support a finding that Ms. Novak’s appeal is frivolous. In addition, the trial judge’s findings of fact in support of her conclusions on the merits, particularly that there was no evidence to support the essential argument that Ms. Novak was ever promised a full-time position with the UCCC, were supported by the record.

Citing York University v. Markicevic, 2017 ONCA 651, at para. 35, “an appeal that appears to rise even to the level of “low prospect of success” or “unlikely to succeed” is not “frivolous and vexatious”. To find that an appeal is “frivolous and vexatious” there must be something that supports the conclusion that the appeal is “vexatious” in order for security for costs to be available under r. 61.06(1)(a)”. In concluding that there is good reason to believe that Ms. Novak’s appeal is vexatious, the Court referred to Ms. Novak’s conduct in the appeal, including an email that Ms. Novak sent to respondents’ counsel in which she refers to the court system as a “circus”.

Lastly, on the basis of the evidence of the respondents and of Ms. Novak herself, the Court concluded that there is good reason to believe that Ms. Novak has insufficient assets to pay the costs of the appeal. The appellant was ordered to pay $20,000 into court as security for the costs of the appeal.

< a name =”08095″>Daniel v. Miller, Canfield, Paddock and Stone, LLP, 2017 ONCA 697

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

Counsel:

Robert G. Matlack, for the appellant

Myron W. Shulgan and Nicole Marcus, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Partnerships, Law Firms, McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39, Standard of Review, Mixed Fact and Law, Palpable and Overriding Error

Facts:

(Taken from the lower court decision) The appellant was a partner in a law firm that, by early January, 2014, had dissolved. The lawyers and staff of the dissolved firm had relocated either to the Windsor firm of Shibley, Righton or to a reconstituted version of the firm organized by three members of the firm under its original name.

The appellant was not offered a comparable position or remuneration at the Shibley, Righton firm or any position at the reconstituted firm, nor was she offered a severance package by her firm before its dissolution.  The appellant took the position at trial that she was an employee and that in these circumstances the termination of her employment amounted to a constructive dismissal, without notice.  She argued that in these circumstances, she was entitled to damages for wrongful dismissal.

The trial judge dismissed her claim, finding that she was a partner for, among other, the following reasons:

  • She conducted herself as a partner, was treated as a partner and was held out to clients, the Law Society and Canada Revenue Agency as a partner;
  • She received a draw, without source deductions of income tax or employment insurance, and filed her tax returns as a partner;
  • She made contributions to a capital account, which were recorded in the financial statements, and was at risk that her capital contributions could be lost;
  • She received enhanced benefits and insurance, which were available only to partners in the firm;
  • She attended partners’ meetings at which decisions were made, participated in the management of the firm and, contrary to her evidence, was entitled to vote on decisions made at partners’ meetings;
  • She had access to confidential information, which was only available to partners, about the business and financial affairs of the firm;
  • She signed firm cheques and opinions on behalf of the firm;
  • She shared in the profits of the firm through a bonus dependent on the profit of the firm; and
  • She had “built up a not insignificant practice of her own.”

The appellant’s core submission on appeal was that in finding that she was a partner in the respondent law firm, rather than an employee, the trial judge gave insufficient consideration to the fact that her work was controlled by the partner whose clients she served and that she was dependent on the firm for her work. In so doing, she says, the trial judge failed to apply the test set out by the Supreme Court of Canada in McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39, [2014] 2 S.C.R. 108.

Issues:

1) Did the trial judge err in finding that a partnership relationship existed?

2) Did the trial judge fail to apply the test set out by the SCC in McCormick v. Fasken Martineau DuMoulin LLP?

Holding: Appeal dismissed.

Reasoning:

1) No. The trial judge applied the relevant legal principles to his findings of fact and concluded that a partnership relationship existed in the context of the factual matrix in the case. This was a conclusion of mixed fact and law and the appellant has demonstrated no palpable and overriding error. In reaching this conclusion, the trial judge accepted the evidence of two other members of the firm, whose circumstances were similar to the appellant’s, who testified that they conducted themselves as partners in the firm and were treated as such.

2) No. McCormick, to which the trial judge adverted, dealt with the issue of whether a mandatory retirement provision in a law firm’s partnership agreement offended the Human Rights Code, R.S.B.C. 1996, c. 210. The control and dependency test was applied to determine whether a particular workplace relationship placed a person in a position of vulnerability for the purpose of the Code. McCormick does not establish control and dependency as an all-purpose test to determine whether a person is a partner or an employee. Here, the trial judge correctly concluded that one must examine all the surrounding circumstances, the substance of the relationship, the behaviour of the parties and the intention of the parties, in order to determine whether a partnership exists.

Lin v. Fleury, 2017 ONCA 695

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

K Lin, Acting in person

G Tanner. for the respondent

Keywords: Civil Procedure, Appeals, Leave to Appeal, Jurisdiction, Rules of Civil Procedure, Rule  2.1(01)(1)

Facts:

The appellant had issued a claim against the respondents seeking damages for $50,000 from Fleury and $300,000 from Ann. The cause of action was unclear. The Superior Court of Justice dismissed the action with costs. The appellant then filed a notice of appeal in the Divisional Court. The Divisional Court quashed the appeal after being satisfied that the amounts involved exceeded the monetary jurisdiction of that court.

By Notice of Motion, the appellant sought leave to appeal to the Ontario Court of Appeal from the decision of the Divisional Court. The respondents invoked r. 2.1.01(1) to dismiss the appeal on the grounds that it is frivolous, vexatious and an abuse of the court’s process.

Issues:

  1. Is the appellant’s leave to appeal frivolous, vexatious and an abuse of the process of the court?
  2. Did the Divisional Court err in finding that it had no jurisdiction to entertain the appellant’s appeal because the amounts claimed exceeded the monetary jurisdiction of that court?

Holding: Motion for leave to appeal dismissed.

Reasoning:

  1. Yes. The court was satisfied that the motion for leave to appeal is frivolous, vexatious and an abuse of the process of the court.
  2. No. The Divisional Court had no jurisdiction to entertain the appellant’s appeal because the amounts claimed exceeded the monetary jurisdiction of that court. The motion for leave is dismissed under r.2.1.01(1).

Criminal Decisions

R v Ellacott 2017 ONCA 680

[Weiler, Feldman and Huscroft JJ.A]

Counsel:

E Dann, for the appellant

G Macdonald, for the respondent

Keywords: Criminal Law, Sexual Assault, First Degree Murder, Sentencing, Criminal Code, s. 745.1(a), Youth Criminal Justice Act, Moral Blameworthiness, R. v. D.B 2008 SCC 25, [2008] 2 S.C.R. 3, R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089, R. v. Grant, 2016 ONCA 639, 351 O.A.C. 345, R. v. W.(M.), 2017 ONCA 22, 134 O.R. (3d) 1,   Aggravating and Mitigating Factors, R. v. Bradley, 2008 ONCA 179, 234 O.A.C. 363 , Principles of Rehabilitation and Integration, R. v. O.(A.), 2007 ONCA 144

 

R v Prohaska (Publication Ban) 2017 ONCA 681

[Watt, Huscroft and Trotter JJ.A]

Counsel:

F Miller, for the appellant

R De Filippis, for the respondent

Keywords: Criminal Law, Assault, Sexual Assault, Sexual Interference, Criminal Code, s. 265(1)(a)

R v Sangs 2017 ONCA 683

[Watt, Huscroft and Trotter JJ.A]

Counsel:

F Bernhardt, for the appellant

G Zaman, for the respondent

Keywords: Criminal Law, Trafficking, Immigration Law, Permanent Residency, Immigration and Refugee Board,  Immigration Refugee Protection Act, S.C. 2001, c. 27, ss. 36(1)(a) and 64

 

R v Tadesse 2017 ONCA 682 

[Watt, Huscroft and Trotter JJ.A]

Counsel:

H Pringle, for the appellant

J Epstein, for the respondent

Keywords: Criminal Law, Carrying a Concealed Weapon, Criminal Code, ss. 90(2), 469, 553 and 536(2) , Jurisdiction, Ontario Court of Justice, Election of Mode of Trial, R. v. Vuong, 2010 ONCA 798

R v LS(Publication Ban) 2017 ONCA 685

[Doherty, Huscroft and Miller JJ.A]

Counsel:

A Menchynski and J Marshman, for the appellant

E Siebenmorgen for the respondent
Keywords: Criminal Law, Sexual Assault, Assault, Mistaken Belief in Consent, Evidence, Prior Sexual History, Prior Statements, Credibility, R. v. Ewanchuk, [1999] 1 S.C.R. 330, Criminal Code ss.273.2(b), 276, 276.1 and 276.2, R. v. Davis, [1999] 3 S.C.R. 759, R. v. Harris, [1997] O.J. No. 3560, R. v. S. (P.) (2007), 221 C.C.C. (3d) 45, Jury Instructions, R. v. C. (A.R.), [2002] O.J. No. 5364 (Sup. Ct.), R. v. B. (B.), [2009] O.J. No. 862 (Ont. Sup. Ct.), SentencingR. v. Ghadban, 2015 ONCA 760

R v Mohammed 2017 ONCA 691

[Watt, Huscroft and Trotter JJ.A]

Counsel:

K Bailey, for the appellant

A Cappell for the respondent
Keywords: Criminal Law, Possession of a Prohibited Firearm, Possession of Marijuana, Trafficking, Sentencing

R v Simard 2017 ONCA 690

[Watt, Huscroft and Trotter JJ.A]

Counsel:

GD Cudmore and P Douglas, for the appellant

J Patton  for the respondent
Keywords: Criminal Law, Attempted Murder, Unlawful Confinement, Uttering Death Threats, Assaulting a Police Officer, Not Criminally Responsible by Reason of Mental Disorder, Sentencing

R v Stevens 2017 ONCA 686

[Watt, Huscroft and Trotter JJ.A]

Counsel:

L Gunn, for the appellant

A Hrybinsky for the respondent
Keywords: Criminal Law, Impaired Operation of a Motor Vehicle Causing Death, Dangerous Operation of a Motor Vehicle Causing Death, Sentencing

R v Brown 2017 ONCA 694

[ Watt, Epstein and Brown JJ.A]

Counsel:

J Abou-Eid, for the appellant

K Beaudoin, for the respondent

Keywords: Criminal Law, Circumstantial Evidence, Standard of Proof

R v Picard (Publication Ban) 2017 ONCA 692

[ Doherty, Rouleau and Pepall JJ.A]

Counsel:

R Pinnock and T Kozlowski, for the appellant

H L Krongold, for the respondent

Keywords: Criminal Law, First Degree Murder, Unreasonable Delay, Canadian Charter of Rights and Freedoms, s. 11(b), R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, Defence Delay, Exceptional Circumstances, Complexity, R. v. Coulter, 2016 ONCA 704, 133 O.R. (3d) 433, R. v. Cody, 2017 SCC 31, Transitional Exceptional Circumstances, R. v. Manasseri, 2016 ONCA 703, 132 O.R. (3d) 401, leave to appeal refused, [2016] S.C.C.A. 513, R. v. Williamson, 2016 SCC 28, [2016] 1 S.C.R. 741, Institutional Delay, R. v. Morin, [1992] 1 S.C.R. 771, Crown Delay

R v Loor 2017 ONCA 696

[Laskin, Simmons and Pardu JJ.A]

Counsel:

M A Moon and L Gensey, for the appellant

A Martin, for the respondent

Keywords:  Criminal Law, Drug Trafficking, Evidence, Circumstantial Evidence, R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, Sentencing, Proportionality,  R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089, Aggravating and Mitigating Factors

Civil Endorsements

Slongo v Slongo 2017 ONCA 687

[ Simmons, LaForme and Pardu JJ.A]

Counsel:

P C Buttigieg and R A Fernandes, for the appellant

H I Fogelman and EL Chaiton-Murray, for the respondent

Keywords: Family Law, Costs, Offers to Settle, Spousal Support, Child Support

Bruff-Murphy v Gunawardena 2017 ONCA 698

[Lauwers, Hourigan and Bennoto JJ.A]

Counsel:

G D E Adair, for the appellants

D I Reisler and J L Kuredjian, for the respondent

Keywords: Costs Endorsement

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 (AUGUST 28 – September 1)

Good afternoon,

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

Two of the three substantive decisions this week were in family law. One was  a relocation application for a five year old child where the mother was unsuccessful at first instance but successful on appeal. The other concerned the application of the presumption of resulting trust in the division of property following the dissolution of a common law relationship.  There was also a decision reminding counsel of the importance of making full and fair disclosure of all material facts when moving without notice.

Wishing everyone a great long weekend.

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

Table of Contents:

Chechui v. Nieman, 2017 ONCA 669

Keywords: Family Law, Property Law, Joint Tenancies, Gratuitous Transfers, Gifts, Presumption of Resulting Trust, Unjust Enrichment, , Pecore v. Pecore, 2007 SCC 17, Kerr v. Baranow, 2011 SCC 10

Misir v. Misir, 2017 ONCA 675

Keywords: Civil Procedure, Motions, Without Notice, Full and Fair Disclosure of Material Facts, Rules of Civil Procedure, Rule 39.01(6), Mariani v. Mariani, [2010] O.J. No. 1464 (S.C.), Balanyk v. Greater Niagara General Hospital, [1997] O.J. No. 4867 (C.A.)

Porter v. Bryan, 2017 ONCA 677

Keywords: Family Law, Custody, Mobility

For Criminal Decisions, click here.

For Civil Endorsements, click here.

Multitechture Inc. v. Gaertner (Appeal Book Endorsement), 2017 ONCA 674

[Laskin, Juriansz and Miller JJA]

Counsel:

  1. Diegel, for the appellant
  2. Cavanagh, for the respondent

Keywords: Endorsement, Contract Law, Cooling Off Period, Damages

Westmount-Keele Limited v. Royal Host Hotels and Resorts Real Estate Investment Trust, 2017 ONCA 673

[Laskin, Juriansz and Miller JJ A]

Counsel:

  1. Borg-Olivier, for the appellant
  2. Woycheshyn and G. Beaulne, for the respondents

Keywords: Endorsement, Appeals, Jurisdiction, Interlocutory or Final Orders, Amending Pleadings, Limitation Periods, Contracts, Summary Judgment

Levesque v. Crampton Estate, 2017 ONCA 676

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

Counsel:

  1. Sammon, for the appellant
  2. Williams, for the respondent

Keywords: Costs endorsement

Gilmore v. Nottawasaga Valley Conservation Authority, 2017 ONCA 678

[Doherty, Brown and Huscroft JJ. A.]

Counsel:

  1. Gilmor and T. Gilmor, in person
  2. T. Curry and A. Porter, for Conservation Ontario
  3. A. Olah, for Nottawasaga Valley Conservation Authority
  4. Blake and J. Glick, for Ministry of Natural Resources
  5. N. Germain, for Township of Amaranth
  6. Opolsky, Amicus Curiae

Keywords: Cost Endorsement, Amicus Curiae

R v. Tremble, 2017 ONCA 671

[Weiler, Feldman and Huscroft JJ A]

Counsel:

  1. Posner and L. Beechener, for the appellant
  2. Rupic, for the respondent

Keywords: Criminal Law, First Degree Murder, O’Connor application, Unknown Third Party Suspect Defence, Air of Reality, Standard of Review

R v. Pammett, 2017 ONCA 679

[Tulloch, Lauwers and Brown JJ. A.]

Cousel:

  1. L. Pammett, in person
  2. Hotke, for the Respondent
  3. Faith, Duty Counsel

Keywords: Criminal Law, Contempt, Refusal to Testify, Sentencing, Mitigating Factors, Consecutive vs. Concurrent Sentences

Chechui v. Nieman, 2017 ONCA 669

[Cronk J.A.]

Counsel:
Earl A. Cherniak, Q.C., Zohar R. Levy and Valois P. Ambrosino, for the appellant

Harold Niman and Chloe van Wirdum, for the respondent

Keywords: Family Law, Property Law, Joint Tenancies, Gratuitous Transfers, Gifts, Presumption of Resulting Trust, Unjust Enrichment, , Pecore v. Pecore, 2007 SCC 17, Kerr v. Baranow, 2011 SCC 10

Facts:

The appellant, Ian Jamieson Nieman (“Ian”), and the respondent, Victoria Chechui (“Victoria”), met in October 2009.  In July 2010, the parties began living together at Victoria’s house in Toronto. Ian’s mother, Dianne, then received a $4 million inheritance and decided to invest part of it in a home on Austin Terrace in Toronto for Ian and Victoria’s use. Ian and Dianne owned the house as tenants in common, with Ian owning 99 per cent and Dianne owning 1 per cent. In December 2010, Victoria sold her house and moved with Ian into the Austin Terrace property.

In December 2012, Dianne suffered a series of strokes and the parties agreed to have Dianne live with them. Dianne would require the use of a wheelchair, so the parties and Dianne decided to look for a new, wheelchair-accessible home in Toronto to accommodate Dianne’s needs.

On March 16, 2013, Ian and Victoria entered into an agreement of purchase and sale to buy a house on Brookdale Avenue in Toronto for $2.6 million (the “Brookdale Property”).

To finance the purchase of the Brookdale Property, Victoria obtained a $1 million mortgage in the parties’ joint names from RBC Dominion Securities Inc. (“RBC”). The mortgage was later converted to a line of credit in the same amount. In addition, after obtaining independent legal advice, Dianne executed a gift letter, required by RBC, gifting $1.7 million to both Ian and Victoria.

On closing, title to the Brookdale Property was taken in both Ian and Victoria’s names, as joint tenants. The parties moved into the Brookdale Property in April 2013.  About one month later, Dianne passed away.

The Austin Terrace property was listed for sale after Dianne’s death and eventually sold in October 2013 for $2.325 million. Ian deposited his share of the sale proceeds in his bank account, repaid the $1 million RBC line of credit on the Brookdale Property in full, and deposited $800,000 into an investment account with RBC, held jointly with Victoria.

Approximately two and a half months later, in January 2014, the parties separated. Their separation precipitated a dispute regarding Victoria’s entitlement to a 50 per cent interest in the Brookdale Property and in the funds held in the RBC investment account.

 

Issues:

  1. Is the respondent entitled to a 50 percent interest in the Brookdale Property?
  2. Is the appellant entitled to a credit regarding the funds used by him to repay the joint line of credit?

Holding: Appeal allowed, in part.

Reasoning:

  1. Yes. The respondent is entitled to a 50 percent interest in the Brookdale Property.

First, title to the Brookdale Property was taken in the parties’ joint names. In addition, the Brookdale agreement of purchase and sale was in both Ian and Victoria’s names.

The application judge expressly rejected Ian’s claims that he did not know what the term “joint tenancy” meant, that he did not direct that title to the Brookdale Property be put in joint names, and that he did not read the real estate closing documents when he signed them. These findings were open to the application judge on the evidentiary record. His assessment of the credibility of Ian’s evidence on these issues attracted deference from the court.

Second, there was the significant factor of Dianne’s $1.7 million gift to both Ian and Victoria to assist in the acquisition of the Brookdale Property. There was ample evidence before the application judge to support his conclusion that this gift, to Ian’s knowledge, was to both Ian and Victoria, and not to Ian alone.

Specifically, the application judge relied on: i) the terms of the gift letter itself; ii) the evidence from Dianne’s wills and estates lawyer regarding her intended gift, evidence from the lawyer providing independent legal advice to Dianne regarding the gift letter, and the RBC mortgage specialist’s testimony that all persons who were going to be on title to the Brookdale Property were to be named as mortgagors on the mortgage security, and iii) the application judge’s rejection of Ian’s testimony that Dianne’s gift was to him alone. The court found no error in the application judge’s approach to or assessment of the whole of the evidence on this issue.

Third, Ian’s argument that Victoria was unjustly enriched when she received an interest in the Brookdale Property was considered and properly dismissed by the application judge.

While Ian mentioned unjust enrichment in his Answer, he failed to plead it with any specificity.  When Ian was given an opportunity by a case conference judge to address deficiencies in his pleading by submitting an Amended Answer, he did not plead any further facts in support of an unjust enrichment claim.

Regardless, the application judge’s factual finding that Dianne gifted $1.7 million to Ian and Victoria jointly is fatal to Ian’s unjust enrichment claim regarding the Brookdale Property. The joint gift furnishes a juristic reason for Victoria’s enrichment in respect of the Brookdale Property. The absence of a juristic reason for the enrichment in question is a necessary pre-requisite to any finding of unjust enrichment.

  1. Yes. The applicant is entitled to a credit in respect of funds used by him to repay the joint line of credit.

The court found that the application judge’s finding that Ian “gifted the payment of [$1 million] to pay off the line of credit” was tainted by palpable and overriding error.

There is no dispute that the debt incurred under the line of credit was joint. Thus, Ian was responsible for payment of at least 50 per cent of the funds owed under the line of credit; this defeats his claim for the repayment of the full $1 million debt under the joint line of credit.

The issue, therefore, is whether, on the future division of the proceeds of sale from the disposition of the Brookdale Property, Ian is entitled to credit for his repayment of Victoria’s $500,000 share of the parties’ joint debt under the line of credit.

The court found that there was no affirmative evidence that Ian intended to gift Victoria the equivalent of $500,000 by reason of his repayment of her share of the line of credit. The application judge’s ruling rested on Victoria’s evidence that the parties always intended to own the Brookdale Property “jointly and equally regardless of their contributions to the purchase”. The court did not agree that the parties’ intention to hold joint title to the Brookdale Property necessarily rebuts the presumption of a resulting trust in respect of Ian’s repayment of Victoria’s debt under the line of credit.

First, Ian’s repayment of the $1 million line of credit, established to facilitate the purchase of the Brookdale Property, was gratuitous and directly linked to the acquisition of the house.  The Supreme Court emphasized in Kerr and in Pecore that in situations involving gratuitous transfers, as in this case, the governing consideration is the transferor’s actual intention.

In these circumstances, the relevant question was what Ian intended at the time of repaying the line of credit – not what the parties commonly intended concerning ownership of the Brookdale Property. By focusing on the latter question, rather than the former, the application judge erred.

Accordingly, Ian’s repayment of Victoria’s share of the parties’ debt under the line of credit was gratuitous, and directly linked to the purchase of the Brookdale Property. Victoria bore the onus of establishing that Ian intended to gift her the sum of $500,000. There was no independent evidence of such an intention by Ian. It follows that Victoria failed to meet her burden to prove that Ian intended to gift the repayment of the line of credit to her, in whole or in part.

A resulting trust therefore arises in relation to Ian’s repayment of Victoria’s share of the joint debt under the line of credit.  Thus, the court found that the appropriate remedy was for Ian to be credited with the amount of $500,000 on division of the proceeds of sale of the Brookdale Property.

Misir v. Misir, 2017 ONCA 675

[Pepall, van Rensburg and Trotter JJ.A.]

Counsel:

D Reiter, S Hicks and B Chung, for the appellants

A Chima, for the respondent

Keywords: Civil Procedure, Motions, Without Notice, Full and Fair Disclosure of Material Facts, Rules of Civil Procedure, Rule 39.01(6), Mariani v. Mariani, [2010] O.J. No. 1464 (S.C.), Balanyk v. Greater Niagara General Hospital, [1997] O.J. No. 4867 (C.A.)

 

Facts:

 

An action was commenced in 2001 by Randy Misir (the respondent in this appeal). The action was not defended. The respondent obtained a judgment after an assessment of damages for $85,984, and the appellants were noted in default.

In 2004, the appellants moved to set aside the judgment upon learning that the judgment and writs of execution had been filed against them. Swinton J. granted an order that set aside the judgment and the noting in default. Swinton J. required that the appellants serve a statement of defence by June 30, 2004. The appellants filed their statement of defence on June 28, 2008.

The original judgment was later reinstated in 2008 by Brown J. When the respondent appeared before Brown J., he was asked provide evidence under oath that no defence was filed and that he did not know where the appellants were. The respondent testified that a statement of defence was never served on him by or after June 30, 2004, and that he noted the defendants in default “in September, or sometime of that year, of 2004”. He also testified that the appellants had commenced an action against him which had been administratively dismissed. Finally, he testified that he did not know where the defendants lived, that they disappeared, and that Immigration was looking for them.

In early 2015, the appellants moved to set aside the judgment of Brown J. In the interim, the respondent brought an application to enforce the judgment by a court-supervised sale of the appellants’ property. The appellants’ unsuccessful attempt to set aside the reinstatement of the judgment is the subject of this appeal.

 

Issue:

 

Did the motion judge err in dismissing the appellants’ motion to set aside the reinstated default judgment, and in authorizing the respondent to sell the appellants’ property in satisfaction of the judgment?

 

Holding:

 

Appeal allowed.

 

Reasoning:

 

Yes. The respondent did not make full and fair disclosure of material facts. The Brown J. judgment ought to have been set aside on this basis. A party who seeks relief from the court in proceedings without notice is obliged to make full and fair disclosure of all material facts. This is a common law rule that is enshrined in rule 39.01(6). It is unnecessary to find that the court was deliberately misled before a court will set aside such an order. The basis of the rule is fairness. As the rule confirms, the failure to make such disclosure is a reason, in itself, to set aside the order made: Mariani v. Mariani, [2010] O.J. No. 1464 (S.C.) and Balanyk v. Greater Niagara General Hospital, [1997] O.J. No. 4867 (C.A.).

The respondent’s counsel provided information to the court that was inaccurate – that no statement of defence had been filed, and that there had been no communication between the parties in the interim. The respondent did not correct this information.

Porter v. Bryan, 2017 ONCA 677

[Laskin, Feldman and Miller JJ.A.]

Counsel:
Paul Mongenais, for the Appellant

Thomas Mann, for the Respondent

Keywords: Family Law, Custody, Mobility

Facts:

 

This appeal concerns the proposed relocation of a five year old child from Cochrane, Ontario to Thunder Bay. The child’s mother and father separated in November 2015 and agreed to joint custody and a shared parenting schedule by way of a consent order made in September 2016. That order was made without prejudice to the appellant mother bringing a mobility motion to move their son to Thunder Bay. That motion was heard and dismissed in January 2017.

The appellant mother was a prisoner transport officer in Cochrane but resigned because the unpredictability of her work impaired her ability to care for her son. Post-resignation the mother was unable to find employment in Cochrane. However, she had multiple job offers in Thunder Bay, where her extended family and new partner live.

The father is employed as a forest-fire crew leader with the Ministry of Natural Resources during the fire season from April to September. During his deployment, he lives in Cochrane eight to ten days per month. In the off-season, he is employed in Cochrane and lives there full-time. His extended family resides in Cochrane.

The mother argued that the move was necessary for her to remain financially viable, and to provide for her son, as she could find no employment in Cochrane that allowed her to fulfill her duties as a parent. She argued that she was her son’s primary caregiver and, accordingly, her decisions about where to live and work ought to be given considerable weight.

The father opposed relocation on several bases. The principal objection is that relocation would, in the words of the motion judge, “leave [the son] without meaningful parental influence from his father.” He also argued that whatever financial hardship the mother is experiencing is entirely self-imposed, and that the necessity of taking employment in Thunder Bay is mere pretext to be with her new partner.

The motion judge agreed with the father that neither party was the primary caregiver to the child. He also agreed that the mother’s financial difficulties were self-imposed given that she would likely still be able to find suitable work in Cochrane. Accordingly, the mother’s motion was dismissed.

 

Issues:

(1) Did the motion judge err in concluding that the mother was not the primary caregiver?

(2) Did the motion judge err in concluding that the mother’s financial difficulties were self-imposed?

(3) Did the motion judge err in concluding that the mother could still be able to find suitable work in Cochrane?

Holding: Appeal allowed.

Reasoning:

 

(1) Yes. The motion judge made an error in principle by not characterizing the mother as the primary caregiver of the child. The motion judge held that in circumstances of joint and shared custody, there is no primary caregiver, and therefore neither parent’s interests can have greater weight than the other’s. This is incorrect. Although the parties have joint and shared custody, the mother in this case is nevertheless the primary caregiver. This conclusion was supported by both parties’ evidence.

(2) Yes. The motion judge made a palpable and overriding error in concluding that the mother’s financial difficulties were self-imposed. They were not. Her resignation resulted from her employer’s withdrawal of an accommodation that had made her former employment compatible with her parenting responsibilities.

(3) Yes. The motion judge further erred in finding that the mother could be expected to find suitable employment in Cochrane. There was no evidence on which to base that finding. Although the motion judge did not have the benefit of the mother’s fresh evidence, that evidence attests both to her continued inability to find work in Cochrane, and her employment opportunities in Thunder Bay.