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Good evening.

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

In Dermann v. Baker, 2019 ONCA 584, the Court considered the qualifying of certain witnesses as experts for the purposes of r. 53.03 of the Rules of Civil Procedure, the standard of review for a trial judge’s charge to the jury in a civil trial, and costs assessments in the context of payments made in advance, and offers to settle. On the first issue, the Court held that r. 53.03 has no application to non-party experts as long as their opinions are limited to those formed based on observations made for a purpose other than litigation. On the second issue, the Court found that a new trial will not be ordered on the basis of a misdirection in a charge unless the error leads to a substantial wrong or miscarriage of justice. Finally, on the third issue, the Court held that r. 49.10(2) of the Rules of Civil Procedure has no application where the plaintiff is awarded a nil judgment.

Continue Reading BLANEY’S APPEALS: ONTARIO COURT OF APPEAL SUMMARIES (JULY 8 – 12, 2019)

Jump To: Table of Contents | Civil Decisions | Short Civil Decisions | Criminal Decisions | Ontario Review Board

Good evening.

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

Although it was a short week, the Court released a couple of decisions that may be of interest to our readers.  For a great summary of the principles governing a motion for security for costs on appeal, see Brown J.A.’s analysis in Health Genetic Center Corp. (Health Genetic Center) v. New Scientist Magazine.

For those interested in contractual interpretation disputes, the Court set aside a partial summary judgment order and substituted an order dismissing the respondents’ action for breach of contract and negligent misrepresentation in Environs Wholesale Nursery Ltd. v Environs Landscape Contracting Ltd., a case involving an Asset Purchase Agreement for the sale of tree farm assets.  The Court also dealt with the proper interpretation of a lease governing a rooftop, and certain rights of way for operating a solar power generation project, in Nissa Corporation v. Enviro Park Solar Ltd.  Both referred to the SCC’s decision in Sattva.

Unfortunately, we do not have any inside information on whether a certain basketball player will be returning to the Toronto Raptors next year, but maybe that decision will be released next week!

Until then, wishing everyone a nice weekend.

Lea Nebel
Blaney McMurtry LLP
416.593.3914 Email


Table of Contents

Civil Decisions

Dare Human Resources Corporation v. Ontario (Revenue), 2019 ONCA 549

Keywords: Labour and Employment, Payroll Tax, Temporary Workers, Placement Agencies, Tripartite Employment Relationship, Employer Health Tax Act, RSO 1990, c E.11, Public Service Employment Act, SC 2003, c 22, ss. 12 & 13, Financial Administration Act, RSC 1985, c F-11, Pointe-Claire (City) v. Quebec (Labour Court), [1997] 1 SCR 1015, IBM Canada Ltd. v. Ontario (Minister of Finance), 2008 ONCA 216, 89 OR (3d) 641, International Brotherhood of Electrical Workers, Local 586 v. Dare Personnel Inc., [1995] OLRB Rep. 935 (Ont. LRB), aff’d [1996] OLRB Rep. 1014 (Ont. CJ (Div. Ct.)).

Environs Wholesale Nursery LTD. v. Environs Landscape Contracting LTD., 2019 ONCA 547

Keywords: Contract Law, Principles of Contractual Interpretation, Agreement of Purchase and Sale, Representations and Warranties, Breach Of Contractual Warranty, Negligent Misrepresentation, Practical Investigations, Economically Feasible Investigations, Pre-Contractual Representations, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2016 ONCA 246, Trade Finance Solutions Inc. v. Equinox Global Ltd., 2018 ONCA 12, Actuate Canada Corp. v. Symcor Services Inc., 2016 ONCA 217, Golden Hill Ventures Ltd. v. Kemess Mines Inc., 2002 BCSC 1460, Opron Construction Co. v. Alberta (1994), 151 A.R. 241 (Q.B.).

Nissa Corporation v. Enviro Park Solar Ltd., 2019 ONCA 563

Keywords: Lease, Roof Equipment, Solar Generation System, Right of Access, Contractual Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53.

Blanchard v Tripp, 2019 ONCA 0559

Keywords: Real Property; Public Roads; Doctrine of Dedication and Acceptance; Doctrine of Neighbourly Tolerance; Affidavit Evidence; Contradictory Evidence; Municipal Act, RSO 1990, c. M.45; Reed v Town of Lincoln (1974), 6 OR (2d) 391 (CA).

Colucci v Colucci, 2019 ONCA 561

Keywords: Family Law, Child Support, Motion to Vary Child Support Order, Retroactive Reduction in Child Support, Three-Year Rule, Date of Effective Notice, Divorce Act, R.S.C. 1985 c. 3, s. 17(1), Federal Child Support Guidelines, s. 14(c), D.B.S. v. S.R.G., 2006 SCC 37, Gray v. Rizzi, 2016 ONCA 152.

Health Genetic Center Corp. (Health Genetic Center) v. New Scientist Magazine, 2019 ONCA 576

Keywords: Defamation, Security for Costs on Appeal, Frivolous, Vexatious, Automatic Stay, Rules of Civil Procedure, r. 63.01(5), r. 61.06(1)(a)(b)(c),  r. 56.01, r. 56.01(1)(d)(f), Libel and Slander Act, s. 12


Short Civil Decisions

King v McPherson-King, 2019 ONCA 554

Keywords: Family Law, Joint Custody, Child Support Payments, Sale of the Matrimonial Home, Equalization, Appeal for Delay, Failure to Comply with Terms, Jurisdiction, Reasonable Costs

Lafontaine v Grant, 2019 ONCA 552

Keywords: Motion to Extend Time to Appeal, Landlord and Tenant Board, Reid v. College of Chiropractors of Ontario, 2016 ONCA 779, Residential Tenancies Act, 2006, S.O. 2006, c. 17, s. 5(2), s. 210

Jacobs v Leboeuf Properties Inc., 2019 ONCA 551

Keywords: Appeal Book Endorsement

Bank of China (Canada) v. Medcap Real Estate Holdings Inc., 2019 ONCA 558

Keywords: Appeal Book Endorsement

Thistle v Schumilas, 2019 ONCA 566

Keywords: Damages, Life Insurance Policy, Negligence, Summary Dismissal of the Action, Capacity to Bring Claim, Ancillary Orders, Motion to Grant Leave, Bankruptcy and Insolvency Act, Courts of Justice Act



Criminal Decisions

R v D.C., 2019 ONCA 553

Keywords: Order for Interim Release Pending New Trial, Assault with a Weapon, Aggravated Assault, Assault, Bail Application, Immigration Detention, Pre-Trial Release, Criminal Code, s. 679(7.1), s. 520, R v. Manasseri, 2017 ONCA 226, Concurrent Jurisdiction

Canada (Attorney General) v. Samuel, 2019 ONCA 0555

Keywords: Moot appeals; Habeas Corpus ; Civil vs Criminal Proceedings; Costs; Corrections and Conditional Release Act, S.C. 1992, c. 20 Mission Institution v. Khela, 2014 SCC 24, [2014] S.C.R. 502; R. v. Campbell, 2010 ONSC 6619; Oliver v. Attorney General (Canada), 2010 ONSC 6431; Re Ange, [1970] 3 O.R. 153 (C.A.)

R. v. D.C.M., 2019 ONCA 562

Keywords: Criminal Law, Sexual Assault, Invitation to Sexual Touching, Sexual Interference, Jury Trial, Jury Instructions, Evidence, Credibility, Consent, Acquittal, Criminal Code, s. 653.1, R. v. Pittiman, 2006 SCC 9, R. v. A.W.B., 2015 ONCA 185

R. v. Imola, 2019 ONCA 556

Keywords: Criminal Law, Fraud Over $5,000, Self-Represented, State-Funded Counsel, Fair Trial, Rowbotham Application, Evidence, Criminal Code, ss.686(2), 686(8) Canadian Charter of Rights and Freedoms, s.11(b), Criminal Proceeding Rules for the Superior Court of Justice (Ontario), SI/2012, R. v. Rowbotham (1998), 25 O.A.C. 321 (C.A.), Browne v. Dunn (1893), 6 R. 67 (H.L.), R. v. Jordan, 2016 SCC 27, R. v. Rabba (1991), 3 O.R. (3d) 238 (C.A.), R. v. Pearson, [1998] 3 S.C.R. 620

R. v. Labelle, 2019 ONCA 557

Keywords: Criminal Law, Possession of a Firearm, Breach of Firearm Prohibition Order, Search Warrant, Informant, Reasonable Expectation of Privacy, Canadian Charter of Rights and Freedoms, ss.8, 24(2), R v. Debot, [1989] 2 S.C.R. 1140, R v. Lowe, 2018 ONCA 110, R v. Edwards, [1996] 1 S.C.R. 128, R. v. Jones, 2017 SCC 60

R v. Canavan, 2019 ONCA 567

Keywords: Impaired Operation of a Motor Vehicle Causing Death, Operating a Motor Vehicle with over 80 mg of Alcohol per 100 ml of Blood, Driving While Impaired Causing Bodily Harm, Charter of Rights and Freedoms, s. 8, s. 10(b), Right to Counsel, Warrantless Seizure, Blood Samples, R v. Culotta, 2018 SCC 57

R v. Wilson, 2019 ONCA 564

Keywords: Sexual Assault, First Degree Murder, Identity, Misapprehension of Evidence, Jury Instruction, Circumstantial Evidence, R v. Griffin, 2009 SCC 28, R v. Villaroman, 2016 SCC 33, Post-Offence Conduct

R v. Yasotharan, 2019 ONCA 568

Keywords: Fraud, Involuntary Guilty Plea, Intellectual Disability, Uninformed Guilty Plea, Miscarriage of Justice, R v. Quick, 2016 ONCA 95, Criminal Code, s. 686(8)

R v. Magdales, 2019 ONCA 572

Keywords: Criminal Law, Trafficking Cocaine, Surveillance, Search Incident to Arrest, Circumstantial Evidence, Reasonable Doubt, Reasonable Inference, Sufficiency of Reasons, R v. Villaroman, 2016 SCC 33

R v. Olusoga, 2019 ONCA 565

Keywords: Criminal Law, Sexual Assault, Threatening Death, Breach of Solicitor-Client Privilege, Rule in Browne v. Dunn, Adverse Inference, Criminal Code, s. 683(1)(a)(iii), Appearance of Unfairness, Public Confidence in the Administration of Justice, Miscarriage of Justice

R. v. Kitsopoulos, 2019 ONCA 0571

Keywords: Criminal Law, Fraudulent Transactions; Doctrine of Willful Blindness; Actual Knowledge

R v D.T., 2019 ONCA 574

Keywords: Criminal Law; Sexual Assault of a Minor; Character Evidence;Collusion; Uneven Scrutiny of Evidence

R v Dhesi, 2019 ONCA 569

Keywords: Criminal Law; Drug-Offences; Possession for the Purpose of Tracking; Possession of Proceeds of Crime; Illegal Search and Seizure; Judicial Summary of Information to Obtain a Search Warrant; R v Garofoli, [1990] 2 SCR 1421; Fitness of Sentence; Validity of a Search Warrant; R v Reid, 2016 ONCA 524


Ontario Review Board

Mott (Re), 2019 ONCA 560

Keywords: Ontario Review Board, Not Criminally Responsible, Theft Under $5,000, Conditional Discharge, Criminal Code, s. 672.54, Winko v. British Columbia (Forensic Psychiatric Institute), [1999] 2 S.C.J. No. 31, Abdikarim (Re), 2017 ONCA 793, Beam (Re), 2018 ONCA 532

Gibson (Re), 2019 ONCA 573

Keywords: Ontario Review Board, Risk of Serious Harm to the Public, Conditional Discharge

Hamill (Re), 2019 ONCA 570

Keywords: Ontario Review Board, First Degree Murder, Criminal Code, s. 672.54, s. 672.81


CIVIL DECISIONS

Dare Human Resources Corporation v. Ontario (Revenue), 2019 ONCA 549

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

G. Sanders and A. Mar, for the appellants

J. Vlasis and J. Elcombe, for the respondent

Keywords: Labour and Employment, Payroll Tax, Temporary Workers, Placement Agencies, Tripartite Employment Relationship, Employer Health Tax Act, RSO 1990, c E.11, Public Service Employment Act, SC 2003, c 22, ss. 12 & 13, Financial Administration Act, RSC 1985, c F-11, Pointe-Claire (City) v. Quebec (Labour Court), [1997] 1 SCR 1015, IBM Canada Ltd. v. Ontario (Minister of Finance), 2008 ONCA 216, 89 OR (3d) 641, International Brotherhood of Electrical Workers, Local 586 v. Dare Personnel Inc., [1995] OLRB Rep. 935 (Ont. LRB), aff’d [1996] OLRB Rep. 1014 (Ont. CJ (Div. Ct.))

FACTS:

The appellants are placement agencies based in Ottawa who supply temporary workers to the Public Service of Canada and federal agencies under agreements between the appellants and the Government of Canada. When clients put out a call for temporary workers, the appellants identify appropriately qualified persons from their inventory of candidates, ascertain the person’s willingness to apply, and negotiate an hourly rate of pay for the placement. The appellants’ primary function is to pay the worker and administer the payroll, on the basis of time sheets signed off by the client, and client manages and directs the workers while they carry out their assignment. However, both the appellants and the client may be involved in dealing with performance or discipline issues.

The respondent issued assessments directing the appellants to pay an employer health tax under the Employer Health Tax Act (“EHTA”). The appellants appealed to the Superior Court of Justice, arguing that they were not obliged to pay the tax because they were not the employers of the workers placed with their clients for temporary work.

In affirming the assessments, the appeal judge recognized that he was bound by the Supreme Court’s “comprehensive and flexible approach” to determine whether an employment relationship exists. That approach was provided for in Pointe-Claire (City) v. Quebec (Labour Court), [1997] 1 S.C.R. 1015 and was subsequently adopted by the Ontario Court of Appeal in the context of the EHTA in IBM Canada Ltd. v. Ontario (Minister of Finance), 2008 ONCA 216.

ISSUES:

(1) Did the appeal judge err in his interpretation of the EHTA?

(2) In the alternative, did the appeal judge err in his consideration of the evidence?

HOLDING:

Appeal dismissed.

REASONING:

(1) No. The appeal judge undertook a comprehensive review of all of the circumstances in concluding that the appellants were employers for EHTA purposes. There was no error in his analysis.

The appellants’ first submission was that instead of answering the real issue of whether the appellants were employers for the purposes of the EHTA, the appeal judge wrongly determined the appellants’ liability by default because he was of the view that someone must be the employer and chose between them and the Government of Canada. The workers, appellants, and the Government of Canada were involved in a tripartite relationship where the appellants and the Government of Canada each possessed some of the traditional attributes of an employer. The whole point of the analysis provided for in IBM is to determine the employer for EHTA purposes in such a tripartite arrangement. On the facts of this case, that had to be either the appellants or the Government of Canada.

The two-part test mandated by IBM first requires determination of whether an employment relationship existed and then whether the putative employers paid remuneration. The appellants argued that the appeal judge improperly focused on the fact that they paid remuneration, however this argument was rejected. The Court found that the appeal judge properly considered the issue of who paid remuneration as part of his analysis of whether an employment relationship existed. He did not rely on this fact exclusively. He carefully reviewed the statutory context including the provisions of the EHTA, noting that the legislation provides that the employer is the party who pays remuneration to the employee. Additionally, ss. 12 and 13 of the Public Service Employment Act, and the Financial Administration Act are inconsistent with the notion of the Government of Canada being the employer of the workers.

The appeal judge also analyzed the factual circumstances surrounding the tripartite relationship. The appellants were the only parties who had contractual relationships with the workers and the contractual documentation with the Government of Canada made clear that it was the government’s intention that the workers be the employees of the placement agencies.

The appellants’ second submission was that the appeal judge ignored a previous decision of the Ontario Labour Relations Board that held that they were not employers of the workers for labour legislation purposes. The Court found that no error of law was made as the appeal judge considered but declined to follow that decision. The Court agreed with the appeal judge’s reasoning and affirmed that it was possible to find that a placement agency was an employer for taxation purposes and not labour relations purposes.

(2) No. The appellants and the Government of Canada each appeared to possess some of the traditional attributes of an employer, as is typical in a tripartite arrangement. The trial judge explicitly referenced recruitment, payroll administration, discipline issues, testing, and security clearances. After an analysis of all of the factors, the trial judge determined that the appellants were the employers, not the Government of Canada. As the appeal judge did not misapprehend the evidence or fail to consider any relevant factor, no error was made.


Environs Wholesale Nursery LTD. v. Environs Landscape Contracting LTD., 2019 ONCA 547

[Feldman, Paciocco and Fairburn JJ.A.]

Counsel:

C.G. Paliare and T.H. Lie, for the appellants

MacKenzie and B. MacKenzie, for the respondents

Keywords: Contract Law, Principles of Contractual Interpretation, Agreement of Purchase and Sale, Representations and Warranties, Breach Of Contractual Warranty, Negligent Misrepresentation, Practical Investigations, Economically Feasible Investigations, Pre-Contractual Representations, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2016 ONCA 246, Trade Finance Solutions Inc. v. Equinox Global Ltd., 2018 ONCA 12, Actuate Canada Corp. v. Symcor Services Inc., 2016 ONCA 217, Golden Hill Ventures Ltd. v. Kemess Mines Inc., 2002 BCSC 1460, Opron Construction Co. v. Alberta (1994), 151 A.R. 241 (Q.B.)

FACTS:

The appellants, Environs Landscape Contracting Ltd., and its officer and director, appeal a partial summary judgment order that they are liable for “breach of contractual warranty and/or negligent misrepresentation” to the respondents, Environs Wholesale Nursery Ltd., and its officers and directors.

That liability finding arose from an Asset Purchase Agreement (the “APA”) relating to the sale of tree farm assets to the respondents. Attached to the APA was a “tree inventory” produced by the appellants, which contained inaccurate facts.

In July of 2012, the appellants accepted a conditional offer from the respondents to purchase the business assets. The conditional offer provided for a due diligence period during which the respondents were entitled to inspect the business assets and declare the offer to be null and void if not satisfied.

The respondents were provided with the tree inventory, setting out what the appellants believed to be the type, size and location of the saleable trees. The respondents were given access to the business, attending with an arborist. The arborist could have spent as much time as desired examining the plant stock, but only spent one and a half to two hours inspecting the trees.

The tree inventory attached to the APA noted 236,341 saleable trees on the business property. However, when the respondents conducted a post-closing count, they concluded there were 83,106 fewer saleable trees. The respondents contended that this shortfall was a breach of a material representation made by the appellants in the APA.

ISSUES:

(1) Did the motion judge err in finding that the APA contained at least a representation respecting the number of saleable trees?

(2) Did the motion judge err in finding liability for negligent misrepresentation?

HOLDING:

Appeal allowed.

REASONING:

(1) Yes. The Court found that the motion judge committed an extricable error of law by failing to apply the principles of contractual interpretation to s. 3.1(13) of the APA. Section 3.1(13) reads as follows:

3.1(13) Inventories. The Purchasers acknowledge and agree that through the due diligence process they have satisfied themselves as to the quantity and quality of all plant material, which has been inspected by the Purchasers’ own consultant.

The Court found that the motion judge did not determine what this material provision meant in the contract as a whole, and assigned it no meaning. The Court reminded us that in discharging the responsibility to interpret a contract, a judge must interpret a contract “as a whole and…accord an interpretation to the contested provisions that assigns meaning to each and avoids rendering one or more of them ineffective”: Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2016 ONCA 246; Trade Finance Solutions Inc. v. Equinox Global Ltd., 2018 ONCA 12; Actuate Canada Corp. v. Symcor Services Inc., 2016 ONCA 217.

The Court went on to add that although the tree inventory is specific as to the number, location and species of trees, when the inventory is read with the APA as a whole, it is clear that it is not a representation or warranty. Instead, the due diligence inspection is contemplated to protect the respondents’ expectations regarding the number of trees.

The plain language of s. 3.1(13) drives this conclusion. It reconfirms that the respondents used the due diligence process afforded to them.

The appellants also submitted that the motion judge erred in law by relying upon Golden Hill Ventures Ltd. v. Kemess Mines Inc., 2002 BCSC 1460 and Opron Construction Co. v. Alberta (1994), 151 A.R. 241 (Q.B.) for the proposition that a full investigation clause cannot be relied upon to defeat a representation where the investigation provided for is not practical or economically feasible.

The Court found that those cases deal with full investigation clauses in construction contracts, and do not purport to hold the same principle in simple agreements of purchase and sale. However, even in the event that they do apply to simple agreements of purchase and sale, the Court found that the respondents submitted no evidence establishing that it was not practical or economically feasible for the respondents to conduct a full inspection. The respondents relied on affidavit evidence that it was not practical to perform a count of the individual trees. The Court emphasized that there was no evidence that the respondents could not use other means other than an individual tree count to satisfy themselves of the accuracy of the inventory.

Lastly, the Court found that the conclusion that an inability to count the trees makes it impractical and economically unfeasible to conduct an independent examination creates a paradox in the logic of the motion judge’s decision. The respondents’ entire action was based upon their claim that the tree inventory attached to the APA was a literal representation of the number of saleable trees. Therefore, a finding that it is not practical to achieve such a count supports the appellants’ argument that a warranty or representation of the number of saleable trees could not reasonably have been intended.

(2) Yes. The Court first emphasizes that the motion judge’s negligent misrepresentation finding was accompanied by no actual analysis. Specifically, it was not clear whether that finding was premised on pre-contractual representations made during negotiations, or arose from a belief that breach of a contractual representation automatically sustains a negligent misrepresentation tort claim.

The Court expanded on this finding by stating that neither theory of liability could succeed. The “entire agreement” clause in the APA ensures that any pre-contractual misrepresentations cannot sustain a finding of negligent misrepresentation. Additionally, the finding that the tree inventory was not a contractual representation bars any claim that it is nonetheless a tortious misrepresentation.


Nissa Corporation v. Enviro Park Solar Ltd., 2019 ONCA 563

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

Counsel:

P.R. Jervis and G. Nayerahmadi, for the appellant

Levine and N. Rozario, for the respondent

Keywords: Lease, Roof Equipment, Solar Generation System, Right of Access, Contractual Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

FACTS:

The appellant, Nissa Corporation (“Nissa”), inherited a lease between the respondent, Enviro Park Solar Ltd., (the “Tenant”) and 1809765 Ontario Limited (“180 Ontario”), the original landlord, when it purchased two properties in Napanee, 61A and 60A Enviro Park Lane (“61A” and “60A”) from the Business Development Bank of Canada, the mortgagee in possession of the property. The lease governed the rooftop and certain rights of way at 61A for the purpose of operating a solar power generation project. The Tenant and 180 Ontario were both controlled by Karl Hollett when the lease was entered into.

Nissa disputed the validity of the lease and the Tenant brought an application seeking declarations that: (i) the lease was effective and binding on the parties to the lease and their successors; (ii) the Tenant was the owner of certain equipment on the premises; and (iii) Nissa had wrongly prevented the Tenant from accessing the property. Nissa took the position that the roof lease had been terminated prior to its purchase of the property, or in any event, after the expiry of the cure period. All three declarations were granted in November 2017, along with a damages award due to Nissa’s failure to allow the Tenant to access the property and resulting loss of solar power production.

Nissa brought a second application, taking the position that the manner in which the solar generation system had been installed did not comply with the terms of the lease and that additional rent was therefore owing. The application judge ordered that Nissa was required to maintain the Tenant’s connection to the local electrical utility system via the transformer in the building across the street, at 60A Enviro Park Lane – a building not mentioned in any part of the lease – and that it was not entitled to receive any additional rents for that connection. The application judge ordered, further, that the Tenant had the right to install inverters in the electrical room of the building at 61A.

ISSUES:

(1) Did the application judge err by reading a positive covenant into the lease, requiring it to provide the Tenant with access to the transformer at 60A Enviro Park Lane?

(2) Did the application judge err in interpreting the lease as permitting the Tenant to install and operate inverters inside the building at 61A, in essence allowing conduct of the former landlord to overwhelm the express terms of the lease?

HOLDING:

Appealed allowed in part.

REASONING:

(1) Yes. The application judge erred in law by reading the lease as requiring that a connection to the transformer at 60A be maintained.

The application judge concluded that although the lease did not refer specifically to 60A, context provided that the Tenant had the right to connect to the electrical utility system via the transformer that was located at 60A. She stated the solar project was central to the lease, as demonstrated by the provision in s. 5(a) that the Tenant satisfy itself of the ability to connect to the electrical utility system as a Tenant’s condition in the lease.

The Court noted the application judge’s focus on s. 6(d), which gives the Tenant a right to make necessary connections to the local electrical utility system, and s. 11(b), which provides that the landlord covenants “not to initiate or conduct or carry on maintenance or other activities” that it knows or reasonably should know would adversely affect the solar energy project. The Court explained that the application judge treated ss. 6(d) and 11(b) as extending the leasehold interest to include 60A, but in doing so she failed to give effect to all of the relevant provisions in the lease, including the definitions of Property, Building, Roof, Roof Area and Project. These definitions operate to clearly limit the leasehold interest to 61A.

Additionally, the Court held that the negative language in s. 11(b) precluding the Landlord from engaging in activities that adversely affect the solar energy project cannot be construed as creating an easement, right-of-way or other interest in land not subject to the lease. The application judge erred in relying on the language of this negative covenant to enlarge the description of the leasehold interest to include 60A, despite the definitions that clearly limit the leasehold interest to 61A.

(2) No. The application judge’s interpretation of the lease as permitting the Tenant to install inverters inside the building at 61A reveals no error and is entitled to deference.

The application judge had concerns about the reliability of Mr. Hollett’s evidence, but ultimately rejected it on the basis of her finding that it went beyond what Sattva permitted. She made no error in doing so. Although in the unusual circumstances of this case the lease was entered into by related corporations, both of which were controlled by Mr. Hollett, his affidavit is evidence about the subjective intentions of the parties, and is impermissible on this account. It was also opinion evidence as to how the lease ought to be interpreted. The application judge provided cogent reasons in support of her conclusion rejecting the argument that s. 2(b) does not permit inverters to be installed anywhere other than the Roof. By its terms, s. 2(b)(i) provided that Connecting Equipment, which included inverters, may be connected in places other than the Roof. The language of s. 2(b) was very broad and included provisions designed to facilitate the operation of a solar power system, which necessarily involved the connection of the solar panels on the Roof to equipment that exited the Building in order to connect to the electrical utility system. Thus, the application judge interpreted the right of way broadly rather than narrowly – as more than simply a right of access to the Roof.


Blanchard v Tripp, 2019 ONCA 0559

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

Counsel:

D.J. Wyjad, for the appellants

M.M. Miller, for the respondents

Keywords: Real Property; Public Roads; Doctrine of Dedication and Acceptance; Doctrine of Neighbourly Tolerance; Affidavit Evidence; Contradictory Evidence; Municipal Act, RSO 1990, c. M.45; Reed v Town of Lincoln (1974), 6 OR (2d) 391 (CA).

FACTS:

In 2009, the appellants purchased two parcels of land in an unorganized township, meaning that it has no municipal government. Their land was only accessible by a road that is partially on public land and partially on private land. As a condition of the sale, the appellants were to acquire written permission from the owners of the private roadway (the respondents) for access, but they never obtained such permission and waived the condition.

The appellants sought a declaration that the road is a public highway, or in the alternative that it is a common road or an access road and an injunction preventing the respondents from closing or barricading the road.

The claim that the road had become a public road was dismissed by the motion judge. The appellants relied on s. 261 of the Municipal Act, which in essence states that when a road is built using public funds or public labour, or if the owner of the road designates it for public use, the road becomes a public road. The appellants argued all three of these possible criteria before the motion judge but all the arguments were rejected.

The appellants only appeal on the third argument, the dedication and acceptance argument.

ISSUES:

(1) Did the motion judge err in finding that the possibility that the province may become an owner through dedication and acceptance militated against a finding of a public road by dedication and acceptance?

(2) Did the motion judge err in finding that the relationship between the respondents and the road was one of ‘neighbourly tolerance’ not of dedication and acceptance?

(3) Did the motion judge fail to consider or misunderstand affidavit evidence?

(4) Did the motion judge err in classifying the varying affidavit evidence as contradictory?

holding:

Appeal dismissed.

reasoning:

(1) No. The discussion of the province’s potential ownership was only brought up after a conclusion was reached by the motion judge that dedication and acceptance had not been made out on the evidence. Since this discussion did not inform the conclusion of the motion judge, it is not appealable and so the court dismissed this issue without further discussion.

(2) No. Neighbourly tolerance is the idea that where a claimant proves the owner of a private road had an intention to dedicate the road to the public, and this intention is then carried out and accepted by the public, the road will become a public one.

The concept of ‘neighbourly tolerance’ was introduced in Reed. In that case, the judge stated that an intention to dedicate a road to public access should not be readily inferred from use of the road by members of the public, particularly in rural communities where normal road infrastructure is not present. In cases like that, it is more likely a courtesy, or a neighbourly tolerance rather than an intention to dedicate.

While Reed is distinguishable on its facts, the court was satisfied that the motion judge considered the history of use of the road and was not satisfied that the use went beyond neighbourly acceptance. There is nothing in the jurisprudence that suggests a prolonged period of use indicates an intention to dedicate. While it may be a factor, it is not determinative and the motion judge made no error in his finding on the issue.

(3) No. The argument on this point related to evidence of the original land owner of all the lands in the area. Over time, he parcelled off the land to various owners (including the respondents). At each of these sales, he indicated the road was a public road. The respondents, upon purchasing the land, sought an easement for access. The Court found that this action indicated it was not a public road otherwise an easement would not have been needed. The initial owner also had options available to him to expressly declare the road public but chose not to do so. He was a Roads Commissioner in the area and so was well aware of his options but chose not to pursue them. The appellants submit that this, along with other similar evidence on the issue was misunderstood by the judge and wrongly dismissed.

The Court was satisfied with the motion judge’s assessment of the evidence and found no clear or overriding error to warrant appellate intervention on the finding of fact.

(4) No. The appellants submitted that the motion judge erred in classifying certain evidence as contradictory as it related to the determination of an intent to dedicate. They also submit the judge weighed certain pieces of evidence too heavily in his assessment. The court dismissed this argument as it was essentially a finding of fact. Further, they agreed with the classification of the evidence as contradictory.

Regarding the question of placing too much weight on certain evidence, the Court found the motion judge’s decision was not determined by the evidence in question, but was merely one of the factors  considered in arriving at the decision. There was no error to override.


Colucci v. Colucci, 2019 ONCA 561

[Brown, Roberts and Zarnett JJ.A.]

Counsel:

S.K. Multani, for the appellant

R.M. Gordner, for the respondent

Keywords: Family Law, Child Support, Motion to Vary Child Support Order, Retroactive Reduction in Child Support, Three-Year Rule, Date of Effective Notice, Divorce Act, R.S.C. 1985 c. 3, s. 17(1), Federal Child Support Guidelines, s. 14(c), D.B.S. v. S.R.G., 2006 SCC 37, Gray v. Rizzi, 2016 ONCA 152

facts:

The appellant appeals the motion judge’s order allowing the respondent’s request under s. 17(1) of the Divorce Act, R.S.C. 1985 c. 3, to vary and retroactively reduce a 1996 child support order.  Respondent seeks leave to cross-appeal from the cost order awarded to the appellant.

The parties were married in 1983 and had two daughters, in 1988 and 1989, respectively. The parties separated in 1994 and were divorced in 1996. The parties’ divorce judgment provided for custody of the parties’ two daughters to the appellant and required the respondent to pay child support in the amount of $115 per week per child. The respondent’s child support obligations ended in 2012 when the children ceased to be “children of the marriage” under the Divorce Act.

However, by 2012, the respondent had fallen into substantial arrears of child support. While his taxable income was in decline from 1997 onwards, he did not commence a motion to change the order with respect to his child support obligations until November 2016. By this time, the arrears with interest amounted to more than $170,000. He made few payments and the Family Responsibility Office was required to compel payment of the respondent’s support obligations.

From 2001 to 2016, the respondent left Canada without notifying the Family Responsibility Office of his whereabouts and income during his absence.

At the respondent’s November 2016 motion to vary the original order, the motion judge relied on s. 14(c) of the Federal Child Support Guidelines. The motion judge found that the coming into force of the Guidelines in 1997, subsequent to the original child support order, constituted a “change of circumstances,” which permitted a variation order under s. 17(4) of the Divorce Act. As such, the motion judge recalculated the arrears and reduced them to $41,642.

issues:

(1) Did the motion judge err in failing to apply the principles articulated in D.B.S. v. S.R.G., 2006 SCC 37 and Gray v. Rizzi, 2016 ONCA 152?

holding:

Appeal allowed.

reasoning:

Yes. The Court began its analysis by finding that the motion judge was correct in determining that the enactment of the Guidelines constituted a change in circumstances that permitted the respondent to seek a variation. However, the motion judge made a critical error in concluding that the respondent was entitled “as of right” to a retroactive reduction extending years into the past without any consideration of the principles set out in D.B.S. and Gray, including the application of the “three-year rule”.

The factors articulated by the Supreme Court in D.B.S. were intended to serve as general principles applicable, with appropriate adaptation, to retroactive support variations. The Court emphasized that these principles apply irrespective of whether the variation order is sought for a retroactive decrease or increase in the quantum of child support.

In Gray, the Court clarified that the four factors governing retroactive support orders identified in D.B.S., subject to exceptional circumstances, should be adapted to apply to applications to decrease support retroactively:

  1. Whether there was a reasonable excuse as to why a variation in support was not sought earlier;
  2. The conduct of the payor parent;
  3. The circumstances of the child; and
  4. Any hardship occasioned by a retroactive award

The Court in Gray also endorsed the general rules from D.B.S. that the date of effective notice should serve as the date to which the award should be retroactive and that it usually will be inappropriate to make a support award retroactive to a date more than three years before the formal notice was given (“Three-Year Rule”).

In specific cases of requests to retroactively reduce child support, the Court in Gray identified two overarching considerations. The first is that the best interests of the child is the paramount issue. Second, there must be a distinction made between requests for a reduction based on a current inability to pay, and arrears arising from a change in financial circumstances that affected the payor’s ability to make the payments as they became due. The former case will generally not result in a reduction unless the payor can demonstrate, on a balance of probabilities, that he or she cannot and will not ever be able to pay the arrears.

Finally, the Court in Gray set out seven key factors of the D.B.S. analysis to guide a court in deciding whether to grant retroactive relief, the date of retroactivity, and the appropriate quantum of relief. The factors are as follows:

  1. The nature of the obligation to support, whether contractual, statutory or judicial;
  2. The ongoing needs of the support recipient and the child;
  3. Whether there is a reasonable excuse for the payor’s delay in applying for relief;
  4. The ongoing financial capacity of the payor and, in particular, his or her ability to make payments towards the outstanding arrears;
  5. The conduct of the payor, including whether the payor has made any voluntary payments on accounts of arrears, whether he or she has cooperated with the support enforcement authorities, and whether he or she has complied with obligations and requests for financial disclosure from the support recipient;
  6. Delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears; and
  7. Any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears

In light of these factors, the Court found that the respondent was not entitled to a retroactive variation order more than three years from November 17, 2016, the date he commenced his motion.

The respondent failed to make full and accurate financial disclosure. The respondent has been, at best, a recalcitrant payor who over 23 years made few support payments, particularly when he was absent from the country for 15 years. Through his conduct, the respondent has placed a substantial financial burden on his family.

The respondent has not discharged his onus to explain his significant failure to make support payments and his delay in proceeding with his application to vary. Outside of a 1998 request to the appellant to consider a reduction of his support obligations, which was rejected, the respondent took no steps to further his request to reduce his obligations between 1998 and 2016. In short, the respondent unreasonably failed to do anything for 18 years.


Health Genetic Center Corp. (Health Genetic Center) v. New Scientist Magazine, 2019 ONCA 576

[Brown J.A. (Motions Judge)]

Counsel:

Zvulony, for the appellants

Barton, for the respondents

Keywords: Defamation, Security for Costs on Appeal, Frivolous, Vexatious, Automatic Stay, Rules of Civil Procedure, r. 63.01(5), r. 61.06(1)(a)(b)(c),  r. 56.01, r. 56.01(1)(d)(f), Libel and Slander Act, s. 12

facts:

The appellants, Health Genetic Center Corp. o/a Health Genetic Center and Yuri Melekhovets, brought a defamation action against the respondents, Peter Aldhous and Reed Business Information Ltd. The appellants alleged that an article in the New Scientist Magazine that questioned the reliability of a blood paternity test they marketed defamed them. After a 13-day hybrid trial, the trial judge dismissed their action and awarded costs to the respondents in the amount of $1,478,766.64. The appellants appeal the dismissal of their action and the award of costs.

Prior to trial, the appellants paid into court $300,000 as security for costs. The respondents now move for an order requiring the appellants to pay more: (i) $85,000 as security for the costs of the appeal; and (ii) $1,178,766.64 as security for the costs awarded at trial. Alternatively, the respondents seek an order lifting the automatic stay of the cost award pursuant to r. 63.01(5) of the Rules of Civil Procedure. The respondents contend security for costs should be ordered for two main reasons: (i) the appeal is frivolous and vexatious; and (ii) the appellants have insufficient assets to pay the costs of the appeal and the trial. The respondents rely upon a combination of rr. 61.06(1)(a), (b) and (c), r. 56.01, including rr. 56.01(1)(d) and (f), and s. 12 of the Libel and Slander Act.

issues:

(1) Should the respondents be granted an order for security of costs?

(2) Should the automatic stay under rule 63.01(5) in respect of the trial cost award be lifted?

holding:

Motion dismissed. Appeal allowed in part for costs.

reasoning:

(1) No.

(A) The respondents did not establish the elements set out in r. 61.06(1)(a). An order for security of costs on appeal under r. 61.06(1) is not a routine order. Yaiguaje v. Chevron Corporation, 2017 ONCA 827 summarizes the principles governing a motion for security for costs on appeal, as articulated in Pickard v. London Police Services Board, 2010 ONCA 643. Rule 61.06 is permissive, not mandatory. In an appeal, there is no entitlement to an order for security for costs. Even where the requirements of the rule have been met, a motion judge has discretion to refuse to make the order. The “overarching principle to be applied to all the circumstances is the justness of the order sought”.

In ascertaining whether “there is good reason to believe that the appeal is frivolous and vexatious”, the court need not reach a definitive conclusion. The case law indicates that in order to satisfy the “frivolous and vexatious” element of r. 61.06(1)(a), the moving party must demonstrate two matters. First, the moving party must show that there is “good reason” to believe that the appeal appears to be devoid of merit. Second, the moving party must demonstrate that there is something that supports the conclusion that the appeal is “vexatious” in the sense that it is taken to annoy or embarrass the respondent or has been conducted in a vexatious manner.

The Court determined that the appeal was not vexatious. The appellants engaged the process of the court to seek a remedy for what they considered to be untruthful and damaging statements about their reputation, as was their statutory right. The Court was not persuaded that the appeal was devoid of merit.

(B) On its face, s. 12(1) deals with security for costs in an action, not on an appeal. Whether the language of r. 61.06(1)(b) is sufficient to make s. 12(1) applicable to an appeal is not a matter on which the Court needed to make any definitive pronouncement for the simple reason that the Court regarded that statutory language as functionally equivalent to r. 61.06(1)(a)’s use of the terms “frivolous” and “insufficient assets”. Since the respondents have not met those requirements of r. 61.06(1)(a), that finding applies equally to their claim based on s. 12 of the Libel and Slander Act through r. 61.06(1)(b).

(C) The Court saw no “other good reason” to order security for the costs of the appeal, considering the appellant had disclosed the location and value of his residential realty in Ontario, filed copies of notices of assessment for his personal tax returns and financial statements of the corporate appellant, paid all costs ordered in this proceeding (save for the award of trial costs in respect of which they seek leave to appeal), and posted $300,000 by way of security for costs.

(2) No. The court must be satisfied that, taking all circumstances into account, it would be in the interests of justice to lift the stay. Recent jurisprudence indicates that a court should have regard to three principal factors: (i) the financial hardship to the respondent if the stay is not lifted; (ii) the ability of the respondent to repay or provide security for the amount paid; and (iii) the merits of the appeal. The stay has been lifted where a plaintiff is suffering financial hardship, particularly in personal injury and family law cases, or has a well-founded fear that the appellant is dissipating or divesting assets to avoid payment. However, even where such factors are present, the plaintiff must satisfy the court that the prejudice of maintaining the stay outweighs the risk of subjecting the appellant to the uncertainties of recovery if the appeal is successful.

First, the respondents did not provide evidence that they would suffer financial hardship in the event the automatic stay is not granted. The respondents filed three affidavits from two of their lawyers; none contained evidence of any financial hardship to the respondents in the event the stay is not lifted.

Second, the respondents did not establish the conditions set out in rr. 61.06(a), (b) or (c) for entitlement to an order for security of costs. Had they met those conditions and further demonstrated that the justice of the case supported ordering security for costs, the respondents could then submit that security for costs should cover not only the costs of the appeal, but also the “costs of the proceeding”: r. 61.06(1). Since they have not met those conditions under r. 61.06(1), the Court strongly questioned whether it remains open to them to seek security for “the costs of the proceeding” by asking the court to allow them to execute on the costs judgment that is the subject of an appeal. The Court was not prepared to grant them relief via an indirect route when they did not satisfy the conditions of the direct route.


SHORT CIVIL DECISIONS

King v. McPherson-King, 2019 ONCA 554

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

L.J.K., self-represented

Slan, for the respondent

Keywords: Family Law, Joint Custody, Child Support Payments, Sale of the Matrimonial Home, Equalization, Appeal for Delay, Failure to Comply with Terms, Jurisdiction, Reasonable Costs

Lafontaine v. Grant, 2019 ONCA 552

[Brown J.A. (Motions Judge)]

Counsel:

Battick, for the appellant

Sheppard, for the respondent

Keywords: Motion to Extend Time to Appeal, Landlord and Tenant Board, Reid v. College of Chiropractors of Ontario, 2016 ONCA 779, Residential Tenancies Act, 2006, S.O. 2006, c. 17, s. 5(2), s. 210


Jacobs v. Leboeuf Properties Inc., 2019 ONCA 551

[Huscroft, Trotter and Zarnett JJ.A.]

Counsel:

J. Kennaley, for the appellant

Rance, for the respondent

Keywords: Appeal Book Endorsement


Bank of China (Canada) v. Medcap Real Estate Holdings Inc., 2019 ONCA 558

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

Turton, for the appellant

Rotenberg, for the respondent

Keywords:Appeal Book Endorsement


Thistle v. Schumilas, 2019 ONCA 566

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

Sidney, for the appellant

Zeitz, for the respondent

Keywords: Damages, Life Insurance Policy, Negligence, Summary Dismissal of the Action, Capacity to Bring Claim, Ancillary Orders, Motion to Grant Leave, Bankruptcy and Insolvency Act, Courts of Justice Act


CRIMINAL DECISIONS

R v D.C., 2019 ONCA 553

[Brown J.A. (Motions Judge)]

Counsel:

Achtemichuk, for the appellant

Weiler, for the respondent

Keywords: Order for Interim Release Pending New Trial, Assault with a Weapon, Aggravated Assault, Assault, Bail Application, Immigration Detention, Pre-Trial Release, Criminal Code, s. 679(7.1), s. 520, R v. Manasseri, 2017 ONCA 226, Concurrent Jurisdiction


Canada (Attorney General) v. Samuel, 2019 ONCA 0555

[Sharpe, Brown and Roberts JJ.A.]

Counsel:

J.T. Sloan, for the appellant

Phillips and A. Mamikon, for the respondent

Keywords: Moot appeals; Habeas Corpus ; Civil vs Criminal Proceedings; Costs; Corrections and Conditional Release Act, S.C. 1992, c. 20 Mission Institution v. Khela, 2014 SCC 24, [2014] S.C.R. 502; R. v. Campbell, 2010 ONSC 6619; Oliver v. Attorney General (Canada), 2010 ONSC 6431; Re Ange, [1970] 3 O.R. 153 (C.A.)


R. v. D.C.M., 2019 ONCA 562

[Doherty, MacPherson and Benotto JJ.A.]

Counsel:

Xynnis, for the appellant

Whitford, for the respondent

Keywords: Criminal Law, Sexual Assault, Invitation to Sexual Touching, Sexual Interference, Jury Trial, Jury Instructions, Evidence, Credibility, Consent, Acquittal, Criminal Code, s. 653.1, R. v. Pittiman, 2006 SCC 9, R. v. A.W.B., 2015 ONCA 185


R. v. Imola, 2019 ONCA 556

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

Counsel:

Cunningham, for the appellant

Schwartz, for the respondent

Keywords: Criminal Law, Fraud Over $5,000, Self-Represented, State-Funded Counsel, Fair Trial, Rowbotham Application, Evidence, Criminal Code, ss.686(2), 686(8) Canadian Charter of Rights and Freedoms, s.11(b), Criminal Proceeding Rules for the Superior Court of Justice (Ontario), SI/2012, R. v. Rowbotham (1998), 25 O.A.C. 321 (C.A.), Browne v. Dunn (1893), 6 R. 67 (H.L.), R. v. Jordan, 2016 SCC 27, R. v. Rabba (1991), 3 O.R. (3d) 238 (C.A.), R. v. Pearson, [1998] 3 S.C.R. 620


R. v. Labelle, 2019 ONCA 557

[Juriansz, Watt and Harvison Young JJ.A.]

Counsel:

Furgiuele, for the appellant

Derwa, for the respondent

Keywords: Criminal Law, Possession of a Firearm, Breach of Firearm Prohibition Order, Search Warrant, Informant, Reasonable Expectation of Privacy, Canadian Charter of Rights and Freedoms, ss.8, 24(2), R v. Debot, [1989] 2 S.C.R. 1140, R v. Lowe, 2018 ONCA 110, R v. Edwards, [1996] 1 S.C.R. 128, R. v. Jones, 2017 SCC 60


R v. Canavan, 2019 ONCA 567

[Brown, Miller and Trotter JJ.A.]

Counsel:

P.J. Ducharme, for the appellant

Webb, for the respondent

Keywords: Impaired Operation of a Motor Vehicle Causing Death, Operating a Motor Vehicle with over 80 mg of Alcohol per 100 ml of Blood, Driving While Impaired Causing Bodily Harm, Charter of Rights and Freedoms, s. 8, s. 10(b), Right to Counsel, Warrantless Seizure, Blood Samples, R v. Culotta, 2018 SCC 57


R v. Wilson, 2019 ONCA 564

[Sharpe, Simmons and Fairburn JJ.A.]

Counsel:

Derstine and R. Remigio, for the appellant

Papadopoulos, for the respondent

Keywords: Sexual Assault, First Degree Murder, Identity, Misapprehension of Evidence, Jury Instruction, Circumstantial Evidence, R v. Griffin, 2009 SCC 28, R v. Villaroman, 2016 SCC 33, Post-Offence Conduct


R v. Yasotharan, 2019 ONCA 568

[Doherty, MacPherson and Benotto JJ.A.]

Counsel:

MacIsaac and S.G. Cameron, for the appellant

Lai, for the respondent

Keywords: Fraud, Involuntary Guilty Plea, Intellectual Disability, Uninformed Guilty Plea, Miscarriage of Justice, R v. Quick, 2016 ONCA 95, Criminal Code, s. 686(8)

R v. Magdales, 2019 ONCA 572

[Watt, Tulloch and Lauwers JJ.A.]

Counsel:

Pillay, for the appellant

Egan, for the respondent

Keywords: Criminal Law, Trafficking Cocaine, Surveillance, Search Incident to Arrest, Circumstantial Evidence, Reasonable Doubt, Reasonable Inference, Sufficiency of Reasons, R v. Villaroman, 2016 SCC 33


R v. Olusoga, 2019 ONCA 565

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

Counsel:

Olusoga, acting in person

Dineen, duty counsel

Hotke, for the respondent

Keywords: Criminal Law, Sexual Assault, Threatening Death, Breach of Solicitor-Client Privilege, Rule in Browne v. Dunn, Adverse Inference, Criminal Code, s. 683(1)(a)(iii), Appearance of Unfairness, Public Confidence in the Administration of Justice, Miscarriage of Justice


R. v. Kitsopoulos, 2019 ONCA 0571

[Watt, Tulloch and Lauwers JJ.A.]

Counsel:

Moustacalis and C. Cole, for the appellant

Brienza, for the respondent

Keywords: Criminal Law, Fraudulent Transactions; Doctrine of Willful Blindness; Actual Knowledge


R v D.T., 2019 ONCA 574

[Doherty, MacPherson and Benotto JJ.A.]

Counsel:

Marshman, for the appellant

Shaikh, for the respondent

Keywords: Criminal Law; Sexual Assault of a Minor; Character Evidence;Collusion; Uneven Scrutiny of Evidence


R v Dhesi, 2019 ONCA 569

[Doherty, MacPherson and Benotto JJ.A.]

Counsel:

M.J. Webb, for the appellant

Gilliam, for the respondent

Keywords: Criminal Law; Drug-Offences; Possession for the Purpose of Tracking; Possession of Proceeds of Crime; Illegal Search and Seizure; Judicial Summary of Information to Obtain a Search Warrant; R v Garofoli, [1990] 2 SCR 1421; Fitness of Sentence; Validity of a Search Warrant; R v Reid, 2016 ONCA 524


ONTARIO REVIEW BOARD

Mott (Re), 2019 ONCA 560

[Sharpe, Brown and Roberts JJ.A.]

Counsel:

F. Embry, for the appellant

Shin, for the respondent, Attorney General of Ontario

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

Keywords: Ontario Review Board, Not Criminally Responsible, Theft Under $5,000, Conditional Discharge, Criminal Code, s. 672.54, Winko v. British Columbia (Forensic Psychiatric Institute), [1999] 2 S.C.J. No. 31, Abdikarim (Re), 2017 ONCA 793, Beam (Re), 2018 ONCA 532

Gibson (Re), 2019 ONCA 573

[Doherty, MacPherson and Benotto JJ.A.]

Counsel:

S.F. Gehl, for the appellant

Teed, for the respondent

Keywords: Ontario Review Board, Risk of Serious Harm to the Public, Conditional Discharge

Hamill (Re), 2019 ONCA 570

[Watt, Tulloch and Lauwers JJ.A.]

Counsel:

Mudry, for the appellant

Paine, for the respondent Attorney General of Ontario

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

Keywords: Ontario Review Board, First Degree Murder, Criminal Code, s. 672.54, s. 672.81

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.

Jump To: Table of Contents | Civil Decisions | Short Civil Decisions | Criminal Decisions | Ontario Review Board

Good evening.

The key decision of the week was Reference re Greenhouse Gas Pollution Pricing Act, in which the Court found the Greenhouse Gas Pollution Pricing Act (the “Act”) to be constitutional. The Act puts a price on carbon pollution in order to reduce greenhouse gas (“GHG”) emissions and to encourage innovation and the use of clean technologies. It places a fuel charge on certain producers, distributors, and importers who produce carbon-based fuels. It also establishes emissions limits for large industrial emitters of GHGs. The Act serves as a backstop and applies in provinces and territories that have not adopted sufficiently stringent carbon pricing mechanisms. The Province of Ontario asked the Court of Appeal to determine whether the Act is unconstitutional. It argued that Parliament does not have the power under the Constitution to enact the Act and that the charges the Act imposes are unconstitutional taxes. The Court determined that the main thrust of the Act was to establish minimal national standards to reduce GHG emissions. Further, the Court held that the Act properly falls within Parliament’s power to legislate on matters of national concern for the peace, order, and good government of Canada. The Act leaves ample opportunity for provinces to pass legislation on other aspects of GHG regulation, and the charges it imposes are not unconstitutional regulatory charges.

The jurisdiction of a court to make an order for costs against a non-party in litigation, specifically Legal Aid Ontario (“LAO“), was considered in Hunt v Worrod. The Court began by stating that courts have inherent jurisdiction to make an order for costs against a non-party in cases where there is an abuse of process. However, the Court emphasized that without conduct amounting to bad faith or an improper purpose, a finding of abuse of process cannot be made against LAO. LAO’s statutory mandate is to fund litigation for low-income individuals. As an independent, publicly accountable, and non-profit organization, LAO is not required to undertake legal and factual analyses of the cases it funds to determine merit. The Court also found that there is no leave requirement for an appeal against a costs award that was made pursuant to a court’s inherent jurisdiction.

In SFC Litigation Trust v. Chan, the Court of Appeal dealt with several issues relating to a Litigation Trust suing the former director of Sino-Forest for frauds committed against the corporation and its shareholders. Among the issues were the interpretation of an insolvency plan under the Companies’ Creditors Arrangement Act (“CCAA“), the factors to consider when awarding damages in such a case, and the doctrine of election. The Court ultimately determined that the claim was not barred by the terms of the CCAA plan, and that the trial judge considered the appropriate factors and made sound findings of fact when arriving at the damages award.

There were also some family law decisions dealing with variation of support and with custody.

Wishing everyone an enjoyable long weekend and Happy Canada Day!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email


Table of Contents

Civil Decisions

SFC Litigation Trust v. Chan, 2019 ONCA 525

Keywords: Torts, Fraud, Breach of Fiduciary Duty Contracts, Interpretation, Standard of Review, Corporations, Doctrine of Separate Identity of Corporate Personality, Causation, Damages, Double Recovery, Doctrine of Election, Bankruptcy and Insolvency, Companies’ Creditors Arrangement Act, RSC 1985, c. C-36, Clements v Clements, 2012 SCC 32; Hercules Management Ltd. v. Ernst and Young, [1997] 2 SCR 165, Bilta (UK) Ltd v. Nazir (No. 2), 2015 UKSC 23

Knight v. Knight, 2019 ONCA 538

Keywords: Family Law, Marriage Contracts, Separation Agreements, Equalization of Net Family Property, Civil Procedure, Leave to Appeal, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 133(b)

Hunt v. Worrod, 2019 ONCA 540

Keywords: Civil Procedure, Costs, Costs Against Non-Party, Inherent Jurisdiction, Abuse Of Process, Appeals, Leave To Appeal, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 131(1), 133(b), Legal Aid Services Act, 1998, SO 1998, c. 26, ss. 89, 99, 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184

Makwana v. Bishnu, 2019 ONCA 543

Keywords: Family Law, Child and Spousal Support, Variation, Material Change in Circumstances, Fraudulent Conveyances, Costs, DBS v. SRG, 2006 SCC 37, Gray v. Rizzi, 2016 ONCA 152, 129 OR (3d) 201, Kerr v. Baranow, 2011 SCC 10, Fraudulent Conveyances Act, RSO 1990, c. F.29, s 2

Rigillo v. Rigillo, 2019 ONCA 548

Keywords: Family Law, Joint Custody, “Maximum Contact” Principle, Divorce Act, RSC, 1985, c. 3 (2nd Supp.), ss 16(10), Young v. Young, [1993] 4 SCR 3, BV v. PV, 2012 ONCA 262

Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544

Keywords: Constitutional Law, Division of Powers, Peace, Order, and Good Government, National Concern, Pith and Substance, Environmental Law, Carbon Tax, Climate Change, The Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11, Courts of Justice Act, RSO 1990, c. C.43, Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c. 12, Cap and Trade Cancellation Act, 2018, SO 2018, c. 13, Ocean Dumping Control Act, SC 1974-75-76, c. 55, Canada Temperance Act, RSC 1927, c. 196, Food and Drugs Act, RSC 1970, c. F-27, Reference re Pan-Canadian Securities Regulation, 2018 SCC 48, Johannesson v. Municipality of West St. Paul, [1952] 1 SCR 292, Re: Anti-Inflation Act, [1976] 2 SCR 373, R. v. Crown Zellerbach Canada Ltd., [1988] 1 SCR 401, Reference re Securities Act, 2011 SCC 66, Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, Reference re Firearms Act (Can.), 2000 SCC 31, Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 SCR 3, Reference re Employment Insurance Act (Can.), ss. 22 and 23, 2005 SCC 56, R. v. Hydro-Québec, [1997] 3 SCR 213, Attorney-General for Ontario v. Attorney-General for the Dominion, [1896] A.C. 348, Attorney-General for Ontario v. Canada Temperance Federation, [1946] AC 193 (P.C.), Munro v. National Capital Commission, [1966] SCR 663, R. v. Hauser, [1979] 1 S.C.R. 984, Labatt Breweries of Canada Ltd. v. Attorney General of Canada, [1980] 1 SCR 914, Schneider v. The Queen, [1982] 2 SCR 112, R. v. Wetmore, [1983] 2 SCR 284, Attorney-General for Canada v. Attorney-General for Ontario, [1937] AC 326 (P.C.), Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 SCR 327, R. v. Comeau, 2018 SCC 15, Rogers Communications Inc. v. Chateauguay (City), 2016 SCC 23, Alberta (Attorney General) v. Moloney, 2015 SCC 51, Connaught Ltd. v. Canada (Attorney General), 2008 SCC 7, Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, [1931] SCR 357, Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 SCR 134, Canadian Association of Broadcasters v. Canada, 2008 FCA 157, Re: Exported Natural Gas Tax, [1982] 1 SCR 1004

Short Civil Decisions

Asghar v. Ruffudeen, 2019 ONCA 533

Keywords: Civil Procedure, Appeal Abandoned, Costs

Wilson v. Fatahi-Ghandehari, 2019 ONCA 532

Keywords: Civil Procedure, Judicial Discretion

Richard v. Niagara Falls (City), 2019 ONCA 531

Keywords: Real Property, Adverse Possession, Vesting Orders

BGOI Films Inc. v. 108 Media Corporation, 2019 ONCA 539

Keywords: Civil Procedure, Appeals, Motion to Quash, Arbitrations, Arbitration Act, 1991, S.O. 1991, c. 17, ss. 45(1), 50(3)

Massoumi v. Bafas, 2019 ONCA 536

Keywords: Civil Procedure, Appeals, Extension of Time

Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 550

Keywords: Civil Procedure, Appeals, Costs, Small Claims Court, Rules of Civil Procedure, Rule 57.05(1)

Criminal Decisions

R v. Passera , 2019 ONCA 527

Keywords: Criminal Law, Importing Cocaine, Sentencing, Pre-Sentence Custody Credit, Parole Eligibility, Bail, Criminal Code, s. 718.1, s. 719(3.1), s. 719(1), Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 120, s. 128(1), s. 115, s. 119, 139(1), Canadian Charter of Rights and Freedoms, s. 1, s. 7, s. 12, R v. Suter, 2018 SCC 34, R v. Zinck, 2003 SCC 6, R v. Summers, 2014 SCC 26, R v. Wust, 2000 SCC 18, R v. Carvery, 2014 SCC 27

R v. Cusick , 2019 ONCA 524

Keywords: Criminal Law, Child Pornography, Evidence, Exclusion, Canadian Charter of Rights and Freedoms, Section 8, Section 24(2), Criminal Code, ss 163.1(1) & 487(1), R. v. Spencer, 2014 SCC 43, R. v. Debot, [1989] 2 S.C.R. 1140, R. v. Araujo, 2000 SCC 65, R. v. Grant, 2009 SCC 32

R. v. Donoghue , 2019 ONCA 534

Keywords: Criminal Law, Expert Evidence, DNA Evidence

R. v. L.T , 2019 ONCA 535

Keywords: Criminal Law, Sexual Assault, Consent, Defences, Honest but Mistaken Belief, Evidence, Credibility, R. v. Barton, 2019 SCC 33, R. v. Park, [1995] 2 SCR 836

R. v. J.L , 2019 ONCA 523

Keywords: Criminal Law, Sexual Assault, Sexual Touching, Evidence, Admissibility, Disclosure, Jury Instructions, Sentencing, Criminal Code, ss.152, 278, R. v. Shearing, [2002] 3 SCR 33, R. v. T.C., [2004] OJ No. 4077

R v. R.S. , 2019 ONCA 542

Keywords: Criminal Law, Sexual Assault of a Minor, Breach of Prohibition Order, Dangerous Offenders, Sentencing, Criminal Code, s. 161, s. 752.1, s. 753(4.1), R v. Anthony-Cook, 2016 SCC 43

R v. Cepic , 2019 ONCA 541

Keywords: Criminal Law, Sexual Assault, Evidence, Credibility, Stereotypes, Myths, Assumptions

R v. Espinoza-Ortega , 2019 ONCA 545

Keywords: Criminal Law, Impaired Driving Causing Bodily Harm, Refusing to Provide Breath Sample, Dangerous Operation of a Motor Vehicle, Failure to Stop at the Scene of an Accident, Criminal Negligence Causing Bodily Harm, Sentencing, Joint Submission, Criminal Code, s. 722(2), s. 722(5), R v. Anthony-Cook, 2016 SCC 43, R v. Wong, 2018 SCC 25

R. c. Lauzon , 2019 ONCA 546

Keywords: Droit pénal, Criminal Law, Négligence criminelle causant la mort, Criminal Negligence Causing Death, Preuve, Evidence, Crédibilité, Credibility, Déclarations antérieures incompatibles, Prior Inconsistent Statements, l’al. 219(1)(b) du Code criminel, LRC (1985), ch. C-46, l’art. 13 de la Charte canadienne des droits et libertés, R. c. Nedelcu, 2012 CSC 59, R. v. Wenham, 2013 ONSC 7431, R. c. Henry, 2005 CSC 76, ACI Brands Inc. v. Pow, 2014 ONSC 2784


CIVIL DECISIONS

SFC Litigation Trust v. Chan, 2019 ONCA 525

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

Counsel:

R. Rueter, S.J. Erskine, and M. Martin, for the appellant

R.W. Staley, J.G. Bell, W.A. Bortolin, J.M. Berall and P. Bell, for the respondent

FACTS:

The appellant was the co-founder, Chief Executive and Chairman of the board of directors of Sino-Forrest Corporation (“SFC”). Between 2003 and 2010, SFC showed massive financial growth and ultimately raised nearly three billion dollars in Canadian debt and equity markets. However, after an investor report in 2011 called into question the legitimacy of SFC’s revenues and assets, SFC was revealed to be a massive fraud scheme and ultimately entered Companies’ Creditors Arrangement Act (“CCAA”) protection in 2012.

As part of the insolvency plan under the CCAA, all of SFC’s litigation claims were transferred to a litigation trust, the respondent in this appeal. The respondent brought a claim against the appellant and several members of his “inside management team”, for fraud and breach of their fiduciary duties to the corporation.

At trial, the Judge ultimately found for the respondents, finding that the appellant had committed at least four separate fraudulent transactions, and a breach of fiduciary duty separate from the frauds. All of the frauds essentially focused on the appellant’s use of non-arm’s length parties to consummate “paper transactions” where only money changed hands, but never actually any assets. There was little to proof that any of the assets actually existed, but rather that these ‘paper transactions’ were being used to funnel money into companies affiliated with the appellant for his own personal gain. On the basis of these transactions, the balance sheet and financial statements of SFC were grossly overstated, allowing them to access vast amounts of capital in Canadian financial markets that they would not have had access to otherwise.

The trial judge awarded just over $2.6 billion in damages, and $5 million in punitive damages to the respondent. The appellant appealed the decision on four grounds:

ISSUES:

(1) Did the Litigation Trust have standing to bring this claim?
(2) Did the trial judge err in his assessment of causation and damages?
(3) Does the doctrine of election apply to nullify the claim?
(4) Did the trial judge err in his acceptance of certain evidence?

HOLDING:

Appeal dismissed.

REASONING:

(1) Did the Litigation Trust have standing to bring this claim?

Yes. The appellant relied on three main arguments as to why this claim was not properly transferred to the Litigation Trust under the insolvency plan:
1. The claims are the same as, or overlap with, the claims asserted in separate Class Actions proceedings, which were explicitly not transferred under the plan.
2. The claims constituted “Excluded Claims” under the insolvency plan, and so were not transferred.
3. The claim constitutes an “SFC Intercompany Claim’ which was expressly transferred to a different group under the insolvency plan.

Before analyzing the three arguments, the Court first discussed the standard of review and the contractual interpretation principles to be used in this appeal, such as reading the document as a whole, determining the intentions of the parties and avoiding commercial absurdity. Regarding the standard of review, the Court held that a CCAA plan is essentially “… a contract, sanctioned by the Court.” CCAA plans are often highly fact-specific, and must be interpreted in light of the factual matrix. Given that the trial judge is in the best position to consider this factual matrix, the standard of review ought to afford a high level of deference to the trial judge and appellate intervention is only warranted for extricable legal error.

The Court addressed the appellant’s arguments as follows:

1. The appellant placed great weight on the fact that this claim, and the claims brought in class actions were based on nearly identical facts and acts, and sought nearly identical damages awards. In Hercules, the Supreme Court held that a tort committed against a corporation is actionable only by the corporation, and not the shareholders or creditors who may indirectly have suffered a loss. The trial judge found that a tort had been committed and that the corporation itself had suffered a loss. The insolvency plan expressly transferred “any cause of action … asserted by … SFC against any and all third parties.” Referring again to Hercules, the Court held that despite factual overlap, the same or similar facts may give rise to a cause of action by both the corporation and the shareholders. “… Where a shareholder has been directly and individually harmed, that shareholder may have a personal cause of action even though the corporation may also have a distinct cause of action.”

2. The Court quickly dismissed the second argument as a repackaging of the first argument and did not discuss it again.

3. In the insolvency plan, SFC Intercompany claims were defined as claims relating to money owed to SFC by subsidiaries. The appellant’s argument suggested that the claim is based on money lost because it was transferred to illegitimate subsidiaries, which is an intercompany claim. The Court rejected this argument, holding that in light of the interpretive principles discussed above, an intercompany claim was intended to cover debt obligations, and the rights SFC derived thereof, as between SFC and a subsidiary.

(2) Was there an error in the assessment of causation and damages?

No. The Court held that damages awards are findings of fact, and thus are owed a high degree of deference. An appellate court should not upset a damages award unless there is palpable and overriding error.

The Court broke this issue down into five sub-issues, addressed in turn below:

1. Factual findings appropriately underpin causation conclusions and damages assessments

The trial judge relied primarily on five findings of facts to underpin the damages award. The five findings related primarily to establishing but-for causation of the respondent’s loss stemming from the appellant’s actions. The trial judge ultimately held that the loss resulted from a chain of events flowing from the appellant’s fraud and breach of fiduciary duty. The Court did not see any error in these findings and was unwilling to overturn the damages award.

2. There was no legal error in the trial judge’s causation analysis.

The Court found that the trial judge applied the proper but-for causation test, and interpreted it appropriately in accordance with Clements. While the appellant submitted that there were other possible explanations for the loss, it is the defendant who bears the onus of proving these alternate causes once a loss arising from fraud has been established. The trial judge did not feel these alternates were sufficiently proven, and so was entitled to reject them.

3. The trial judge did not award compensation for amounts that could not legally be considered losses of SFC.

The appellant’s submissions on this point focussed on the concept that the money raised by SFC in the capital markets did not belong to the corporation, but to the shareholders and creditors of the company, and therefore SFC could not attempt to recover for the loss of said money. The trial judge dismissed this argument because the appellant’s fraud caused SFC to incur obligations and raise money on the capital markets that it would not have otherwise done. The appellant’s fraud subsequently deprived SFC of the means with which to satisfy its obligations and so SFC did indeed suffer a loss. Applying Bilta, the Court upheld this finding by the trial judge and did not find a legal error warranting appellate intervention.

4. Double recovery doctrine does not apply

The appellant submits that even if both this claim, and the class action claims are allowed to proceed, the risk of double recovery would arise and the doctrine of double recovery would bar recovery in one of the claims. The Court rejected this submission, as it amounted to a conflation of the doctrine. Double recovery does not relieve a defendant from being liable to two groups in separate actions. Instead, it serves to prevent a plaintiff from recovering for the same loss in different actions. That was not the case here, and so the argument was dismissed.

5. The trial judge applied the correct principles of damages assessment.

The appellant submitted that the trial judge erred by awarding damages based on principles of equity only applicable in breach of trust cases. The Court dismissed this argument for two reasons. First, the trial judge found the appellant had control over the direction of the fraudulent funds and so this was a relationship in the character of a trust. Second, the trial judge did in fact rely primarily on the correct common law principles of damage, and the references to equitable factors was a slight one, in relation to a sub-issue of the damages determination.

(3) Does the Doctrine of Election apply?

No. The doctrine of election essentially prevents a party from asserting that an agreement is valid to obtain benefit thereunder, only to turn around and claim the agreement is void to secure a different benefit. The appellant submits that since the insolvency plan deemed the obligations of SFC to have full force and effect, SFC elected to treat these agreements as valid. The Court dismissed this argument. Firstly, the cases relied upon by the appellant were easily distinguishable on their facts. Secondly, at the trial level, it was found that the timber assets (which this litigation is primarily based upon), did not actually exist, or if they did, had no value until actually discovered and recovered upon. It would be inconsistent for the Court to treat the plan as deeming the non-existent to be existent, or to ascribe value to valueless items. The trial judge found that the plan did not do this, and that no election occurred. The Court affirmed this finding and dismissed the doctrine of election argument.

(4) Did the trial judge err in his acceptance of certain facts?

No. The appellant submitted there were fundamental errors of fact. The first relates to one of the four proven frauds. The fraud was deemed to have occurred in all 525 transactions completed by a subsidiary, based on the analysis of one contract of that subsidiary. While fraud cannot always be proven by reference to a sample, the trial judge considered this argument and dismissed it. Relying on much evidence, contracts were all concluded from a template and the appellant himself testified that the content of much of the contracts was identical. The appellant had the opportunity to prove that some contracts were different, but failed to lead such evidence. The trial judge’s finding was also not based solely on the contracts, but an incredibly lengthy discussion of how the subsidiary’s business model as a whole was fraudulent. Where a trial judge has found fraud after weighing large quantities of complex evidence, this decision is owed significant deference. Absent a palpable error to the very outcome of the case, the finding should not be disturbed.

The appellant also submitted that the trial judge erred by allowing the respondent to give affidavit evidence consisting of its opinions, despite the appellant not being an expert. The Court dismissed this argument. The trial judge considered this argument at trial and accepted it. He only relied on the affidavit as a description of events that would need to be later proven by admissible evidence.

Knight v. Knight, 2019 ONCA 538

[Feldman, Brown and Miller JJ.A.]

Counsel:

G. Joseph and K. Younie, for the appellant

J.P. Schuman, for the respondent

FACTS:

This appeal arises out of hard-fought – and expensive – matrimonial litigation. The parties’ marriage contract dated June 24, 2011, excluded the appellant’s corporate assets from division. It specifically provided that the parties agreed “to exclude [the appellant’s] interest in the Corporations… and monies owing to him from the Corporations… which may require [the appellant] to transfer assets or pay monies to [the respondent] as part of an equalization payment to her under the Family Law Act, as amended”.

At trial, however, the question arose as to the status of monies owed by the appellant to his corporations. The appellant was unsuccessful at trial in seeking an unequal division of net family property. The court wrote to the parties, requesting that they advise as to the specific quantum of equalization payment and the amounts of child and spousal support payable. The parties could not settle the calculation of the equalization payment.

Far overshadowing the amount in issue in the substantive appeal was the costs order of $490,000 plus HST, enforced through the Family Responsibility Office (“FRO”). The appellant seeks leave to appeal. The respondent’s legal fees were in the amount of $265,000, while the appellant’s legal fees came in at $172,000. The largest component of the costs award is a disbursement of $228,306 paid to the respondent’s accounting expert. The respondent delivered an offer to settle prior to each stage. The appellant argued that he did not have a fair opportunity to review the bill of costs at trial. The trial judge rejected this submission. The trial judge wholly blamed the appellant for the high costs, whose approach to the litigation he characterized as unreasonable: “his goal was to ensure that [the respondent] suffer a considerable financial defeat even if she enjoyed success at trial.”

The appellant also sought to appeal the decision to make the entirety of the costs award enforceable as support by the FRO (“FRO order”), as opposed to only that part of the costs award attributable to the issue of support. As set out in s. 133(b) of the Courts of Justice Act, a discretionary order of costs may not be appealed without leave. Leave to appeal a costs order are not granted without strong grounds upon which the appellate court could find that the trial judge had erred in the exercise of his or her discretion.

ISSUES:

(1) Did the trial judge not provide sufficient reasons on the issue of the inclusion of certain promissory notes in the equalization payment calculation to allow for appellate review?

(2) Did the trial judge err in including the promissory notes in the calculation of net family property since the promissory notes are “corporate in nature” and therefore excluded by the marriage contract from the calculation of net family property?

(3) Did the trial judge err in principle such that the appellant should be granted leave to appeal the costs award against him?

HOLDING:

Appeal dismissed. Motion for leave to appeal costs also dismissed.

REASONING:

(1) No. The trial judge made an obvious slip in his initial reasons in characterizing $67,315 as a de minimis amount, and he corrected this. Nothing further was required.

(2) No. The marriage contract specifically excluded from the net family property calculation monies owed to the appellant by the corporations. It does not exclude monies owed by the appellant to the corporations, which are personal debts. The promissory notes are not, in the sense used in the marriage contract, “corporate in nature”.

(3) No. The costs appeal is fact-based and seeks to have the Court to perform a line-by-line analysis that was not pursued at trial. The trial judge correctly referred to the relevant factors to be considered in awarding costs under Rule 24(11). The Court found nothing in the costs endorsement that reveals an error in principle or an error in the exercise of discretion on the part of the trial judge. Although the appellant frames the proposed appeal as a question of the proportionality of the costs award, there is no genuine argument advanced as to how the order is disproportionate, given the trial judge’s explanation that the costs order is necessary to defeat what he perceived to be the appellant’s tactic of ensuring the respondent would not benefit from her success in the litigation. In this instance, the appeal to proportionality is nothing other than an attempt to have the Court second-guess the quantum of the award.

With respect to the FRO order, there was no error in principle in the trial judge not having expressly addressed whether a lesser sum would have sufficed for enforcement. The enforcement decision is discretionary.

Hunt v. Worrod, 2019 ONCA 540

[Sharpe, Pepall and Roberts JJ.A.]

Counsel:

G. Forrest and M. Stephenson, for the appellant/moving party Legal Aid Ontario

M. Barrack, A. McEwen and K. Whaley, for the respondent/responding party

R. Muscolino, for the respondent/responding party

J. Martin and E. Rathbone, for the Intervener Ontario Association of Child Protection Lawyers

J. Phillips and W. Wanless, for the Intervener Family Law Association

FACTS:

The respondent K.H. suffered a brain injury in June 2011. His sons were appointed as his guardians of property and personal care (collectively the “Hunt respondents”). K.H. had a relationship with K.W. prior to the accident.

In a dispute over title to a property, K.H.’s sons commenced an application against K.W. seeking a declaration that the marriage was void ab initio. Legal Aid Ontario (“LAO”) granted K.W. a legal aid certificate and funded her legal fees throughout the proceedings. K.W. hired A.T. to be her counsel in the litigation. LAO was not a party to the application and did not participate in the trial.

In his reasons for decision on the issue of costs, the application judge characterized K.W.’s claims to the title of the property as “meritless”. He ordered K.W. to pay the Hunt respondents’ costs of $385,279.54 on a full recovery basis. The application judge also noted that it was highly unlikely that K.W. would ever be in a financial position to pay any of these legal costs.

The application judge then considered the Hunt respondents’ requests for costs against A.T. personally. Their request was based on the alleged failure of A.T. as legal counsel to meet his reporting requirements to LAO. Specifically, they submitted that if A.T. had properly reported to LAO, then LAO would not have continued to fund K.W.’s “meritless” defence. The application judge did not make an order of costs against A.T., stating that his communications with LAO were privileged. Therefore, there is no evidentiary basis for finding that he acted improperly in his reporting requirements.

Turning to the request for costs against LAO, the application judge commented that in ordering costs against a non-party, a court should exercise caution. The circumstances meriting such an award must be “exceptional and constitute an abuse of the court’s process”. The application judge concluded that LAO had failed to properly carry out its mandate to monitor the proceedings, contributed significantly to the hardships and challenges faced by the Hunt respondents, and needlessly wasted judicial resources. This constituted an abuse of process and LAO was ordered to pay $192,639.77 to the Hunt respondents.

ISSUES:

(1) Is leave to appeal the costs order required?

(2) Did the application judge err in ordering costs against LAO?

HOLDING:

Appeal allowed.

REASONING:

(1) Is leave to appeal required?

No. LAO argued that, with the exception of the “person of straw” category under s. 131(1) of the Courts of Justice Act, non-party costs awards are made pursuant to the inherent jurisdiction of the court and as such, leave to appeal is not required. Both parties agreed that the “person of straw” category was inapplicable in this case.

Leave to appeal is required for costs awards made pursuant to statutory jurisdiction under s. 131(1) by virtue of the language of s. 133(b). However, the Court found that there is no such leave requirement for an award of costs that relies on inherent jurisdiction.

(2) Did the application judge err in ordering costs against LAO?

Yes. The Court found that the application judge fundamentally misconstrued the role of LAO. In addition, the application judge’s findings with respect to LAO were inconsistent with his conclusions relating to the claim for costs against A.T. personally.

The Court reasoned that LAO does not represent the client nor does it direct the litigation. Rather, it simply provides funding to the client to retain counsel from the private bar. The statutory system is not established on the basis that LAO is required to engage in a detailed factual and legal analysis independent of and disconnected from counsel’s legal opinion. The costs award against LAO based on its failure to adequately monitor the litigation is inconsistent with and would frustrate the statutory scheme.

Furthermore, as Strathy C.J.O. explained in 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184, when exercising inherent jurisdiction against a non-party, courts must do so “sparingly and with caution”.

Without evidence of something more, such as bad faith or a collateral or improper purpose in granting funding to a litigant, LAO’s conduct in funding litigation pursuant to its statutory purpose, and any conduct incidental thereto, including its monitoring of the litigation it funds, cannot support a finding of abuse of process.

However, the Court found that even if the application judge’s finding of abuse of process was correct, any conclusion of improper conduct by LAO would require the impermissible review of the reporting and opinion letters of the lawyer holding the legal aid certificate. Sections 93 and 89 of the Legal Aid Services Act create a tripartite relationship of solicitor-client privilege. Therefore, allowing this type of scrutiny would risk putting LAO in a position where it must seek a waiver of privilege from clients in order to mount a defence to claims against it for non-party costs.

In this respect, the crux of the allegations against A.T. were substantially the same as those asserted against LAO. The Court therefore found that the application judge’s findings against LAO were also inconsistent with his findings in favour of A.T.

Makwana v. Bishnu, 2019 ONCA 543

[Sharpe, Trotter and Harvison Young JJ.A.]

Counsel:

G. S. Joseph and M. Newman, for the appellant

A. Chima, for the respondent

J. Madhany, for the respondent (Respondent / Appellant by way of cross-appeal)

H. Wasserman, in person

FACTS:

The applicant and respondent were involved in a romantic relationship and lived together for a short period of time in the 1990s. They had one daughter together. After the breakdown of the relationship, the appellant was awarded sole custody as well as child and spousal support. The trial judge at the time had made adverse findings as to the credibility of the respondent and found he attempted to conceal his true income. The trial judge awarded spousal support at $1,750 per month and child support at $733 per month. The spousal support could be reviewed in three years, even without proving any material change in circumstances.

The respondent failed to comply with the support orders and the order for costs. Further, he filed for bankruptcy in 2003 and remains undischarged. The appellant has since moved to the United States with her daughter and is remarried.

The respondent brought this motion to vary the spousal and child support in October 2011. He had brought an earlier motion to vary in 2002, but it was not permitted to proceed until he paid the outstanding costs from trial. The respondent’s income from 2002 to 2009 was essentially zero. Further, he led evidence indicating that he has suffered from physical and mental health issues since 1999 and that he is living on social assistance.

The appellant, however, sought an order setting aside certain conveyances made by the respondent as fraudulent. As a result of that application, SB and the respondent’s trustee in bankruptcy were added as parties.

The motion judge made adverse findings of credibility against the respondent, but did find that the respondent had developed medical problems that impacted his ability to earn income. Further, the motion judge found that given the appellant’s employment and re-marriage, there had been a material change in her circumstances and the spousal support should terminate as of December 31, 2002. The motion judge also ordered that the child support terminate as of June 30, 2013, at which date the daughter was 18 years old and no longer in full-time school. The motion judge also reduced the child support amount due to the respondent’s declining health from 2004 to 2009 at $300 monthly, and from 2010 to 2013 at $176 monthly. The motion judge dismissed the fraudulent conveyance action.

ISSUES:

(1) Whether the motion judge erred by varying the orders for child and spousal support.

(2) Whether the fraudulent conveyance application should have been dismissed.

(3) Whether the application judge erred by refusing to award SB costs despite the dismissal of the fraudulent conveyance application.

HOLDING:

(1) Appeal allowed in part.

REASONING:

(1) Yes.

(i) Child Support

The motion judge erred as he appears to have fixed child support on the basis of what he found the respondent’s income had likely been, rather than considering the factors mandated in D.B.S. v. S.R.G., 2006 SCC 37. Two factors of particular concern were (a) whether there is a reasonable excuse for the respondent’s delay in applying for relief; and (b) the respondent’s conduct, including whether he made any effort to comply with the order and his compliance with financial disclosure requirements.

The respondent had a long history of failing to comply with the support order, and while he did launch a motion to vary in 2002, he failed to proceed because he was unable to satisfy prior costs awards. Therefore, the 2002 motion does not stand as an excuse for failing to proceed expeditiously with the application to vary. Further, the respondent’s failure to make child support payments may have had an adverse effect on the daughter’s decision to pursue post-secondary education. However, the ongoing financial capacity of the respondent, including his ability to make payments towards outstanding arrears, is a relevant factor.

The motion judge did not err in failing to pay adequate attention to the income imputed in the 1999 judgment. There was sufficient evidence that the respondent’s income has changed significantly since that time. The motion judge was correct to terminate the child support as of June 30, 2013. However, the Court held that the motion judge’s order reducing the amounts should be varied, as it would unduly reward the respondent for the failure to move more quickly and to comply with the 1999 order and disclosure. The Court held that the monthly child support should be reduced between 2004 and 2013 from $733 monthly to $366 monthly.

(ii) Spousal Support

The motion judge did not err in treating the review clause in the 1999 judgment as a termination clause. The 1999 judgment contemplated that the appellant would become self-sufficient within three years, which turned out to be the case.

While considerations similar to the D.B.S. factors are relevant to spousal support, spousal support has a different legal foundation than child support, and there is no presumptive entitlement to spousal support. The SCC has emphasized the need for flexibility and a holistic view of each matter on the basis of its particular factual matrix. The motion judge’s variation of the arrears for spousal support did not rest upon the means or income of the respondent, but instead on the appellant’s entitlement to support, her means and needs and the material change of circumstances. By 2002, the appellant was earning a significant income and had married someone else. Therefore, the appellant’s changed circumstances as of December 31, 2002, were justification to discontinue spousal support.

(2) No. The application judge was correct in finding that while the conveyance by the respondent of his interest in the property in December 1999 was fraudulent, the subsequent transfer to SB in 2002 was not. SB acted in good faith and without any knowledge of fraudulent intent within the meaning of s. 2 of the Fraudulent Conveyances Act. While the appellant and the trustee may have a remedy against the proceeds of the earlier conveyance that was found to be fraudulent, they have no remedy against the property or the transferee as the property had been transferred to a good faith purchaser for value.

(3) No. SB was not denied procedural fairness and the application judge did not err by refusing to order costs in SB’s favour. The application judge set out a clear procedure to be followed for making costs submissions. Months had passed and counsel made no costs submissions. Therefore, the application judge was entitled to end the matter and order that no costs award would be made.

Rigillo v. Rigillo, 2019 ONCA 548

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

M. Stangarone and S. Kirby, for the appellant

H. Niman and K. Normandin, for the respondent

FACTS:

The appellant (father) had sought joint custody and shared parenting of the couple’s six year old child. The father appeals the decision of the trial judge that the child’s primary residence should be with the respondent (mother), with the father receiving one overnight with the child per week and alternating weekends. While the parties have joint custody, the trial judge ordered that if the parties are unable to agree on matters relating to the child’s physical, emotional and educational well-being, then ultimately those decisions are to be made by the mother.

ISSUES:

Did the trial judge err in the custody order and decision-making authority granted to the respondent?

HOLDING:

Appeal allowed.

REASONING:

Yes. The trial judge erred by failing to address the “maximum contact” principle set out in s. 16(10) of the Divorce Act, RSC, 1985, c. 3 (2nd Supp.). That provision states:

In making an order under this section, the court shall give effect to the principle that a child of the marriage should have as much contact with each spouse as is consistent with the best interests of the child and, for that purpose, shall take into consideration the willingness of the person for whom custody is sought to facilitate such contact. [Emphasis added.]

The trial judge makes no reference to the maximum contact principle in the reasons for judgment. The Court here referenced the findings of the trial judge that prior to the party’s separation, they had parented effectively as a team. Further, the father’s conduct post-separation in and of itself was not a reason to ignore the contribution he made to raise the child. Based on these findings of fact, there was no reason why the maximum contact principle would not apply in this case.

The trial judge further erred by premising the decision on the assumption that the respondent was entitled to remain the child’s primary caregiver. The respondent had been named the child’s primary caregiver only under an arrangement embodied in a consent order made a few years prior. The order specifically noted that it was made “without prejudice to either parties’ claim with respect to custody and access”.

The Court found that the trial judge used an “erroneous approach” by failing to apply the maximum contact principle without providing any reason for departing from it, as well as by proceeding on the basis of the status quo that had developed as a result of an interim without prejudice order. Given the trial judge’s findings of fact that while both parties had misbehaved, the child had enjoyed the benefits of “effective parenting” by both, it was an error to make an order that departed significantly from equal parenting time.

The Court also held that the order regarding decision-making authority should be set aside and reconsidered alongside the issue of parenting time. The Court stated that there was nothing in the record or the trial judge’s findings of fact that would suggest that anything other than an order granting both parties meaningful decision-making authority is appropriate.

Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544

[Strathy C.J.O., Hoy A.C.J.O., Macpherson, Sharpe and Huscroft JJ.A.]

Counsel:

Hunter, P. Ryan and T. Lipton, for the Attorney General of Ontario

Telles-Langdon, C. Mohr, M. Matthews and N. Goodridge, for the Attorney General of Canada

W.E. Gould, for the intervener Attorney General of New Brunswick

J.G. Morley, for the intervener Attorney General of British Columbia

P.M. McAdam, Q.C. and A. Jacobson, for the intervener Attorney General of Saskatchewan

Wuttke and A.S.R. Williamson, for the intervener Assembly of First Nations

Attaran, for the intervener Athabasca Chipewyan First Nation

Elgie, for the intervener Canada’s Ecofiscal Commission

F. Castrilli and R.D. Lindgren, for the interveners Canadian Environmental Law Association, Environmental Defence, and Sisters of Providence of St. Vincent de Paul

King, M. Finley and L. Langstaff, for the intervener Canadian Public Health Association

B. E. Hallsor, Q.C., C. Van Geyn and A. Wudbrick, for the intervener Canadian Taxpayers Federation

Robitaille, for the interveners Centre québécois du droit de l’environnement and Équiterre

Christensen and J. Ginsberg, for the intervener David Suzuki Foundation

Hume, for the intervener Intergenerational Climate Coalition

DeMarco and J. McGillivray, for the intervener International Emissions Trading Association

Westaway and N. Chalifour, for the intervener United Chiefs and Councils of Mnidoo Mnising

Martin, for the intervener United Conservative Association

FACTS:

Parliament has determined that atmospheric accumulation of greenhouse gases (“GHGs”) causes climate changes that pose an existential threat to human civilization and the global ecosystem. There was no dispute that global climate change is taking place and that human activities are the primary cause. The combustion of fossil fuels, like coal, natural gas and oil and its derivatives, releases GHGs into the atmosphere. When incoming radiation from the Sun reaches Earth’s surface, it is absorbed and converted into heat. GHGs act like the glass roof of a greenhouse, trapping some of this heat as it radiates back into the atmosphere, causing surface temperatures to increase. Carbon dioxide (“CO2”) is the most prevalent GHG emitted by human activities. This is why pricing for GHG emissions is referred to as carbon pricing, and why GHG emissions are typically referred to on a CO2 equivalent basis.

Temperatures in Canada have been increasing at roughly double the global average rate. With the longest coastline in the world, high altitude areas where warming is amplified, and significant Arctic territory, Canada has been disproportionately impacted by global warming. In the Canadian Arctic, for instance, the rate of warming has been even higher than in southern parts of Canada, estimated at three times the global rate. It is predicted that temperatures in Canada will continue to increase at a rate greater than the rest of the world.

Both nationally and globally, the economic and human costs of climate change are considerable. Canada’s Minister of Finance has estimated that climate change will cost Canada’s economy $5 billion per year by 2020, and up to $43 billion per year by 2050 if no action is taken to mitigate its effects. The World Health Organization has estimated that climate change is currently causing the deaths of 150,000 people worldwide each year. Rising sea levels threaten the safety and lives of tens of millions of people in vulnerable regions.

As a practical matter and indeed as a legislative matter, there is nothing the provinces and territories can do to address the emission of GHGs by their geographic neighbours and constitutional partners. Without a collective national response, all they can do is prepare for the worst. In December 2015, the parties to the United Nations Framework Convention on Climate Change adopted the Paris Agreement. The Preamble to that agreement recognized that climate change represented “an urgent and potentially irreversible threat to human societies and the planet”.

A UN Working Group produced a Final Report, on a consensus basis, which noted that “[m]any experts regard carbon pricing as a necessary policy tool for efficiently reducing GHG emissions”. Based on this report, the federal government announced the Pan-Canadian Approach to Pricing Carbon Pollution (the “Pan-Canadian Approach”). This stated that economy-wide carbon pricing is the most efficient way to reduce emissions and that carbon pricing would be a foundational element of Canada’s response to climate change. The Pan-Canadian Approach included a national benchmark for carbon pricing (the “Benchmark”). The stated goal of the Benchmark is to ensure that carbon pricing mechanisms of gradually increasing stringency apply in all Canadian jurisdictions by 2018, either in the form of an explicit price-based system (e.g., a “carbon tax”) or a “cap-and-trade” system. It also stated that the federal government would introduce “backstop” carbon pricing legislation to apply in jurisdictions that do not meet the Benchmark.

Shortly after announcing the Pan-Canadian Approach, and after extensive discussions with the provinces, Canada ratified the Paris Agreement. Canada is required to report and account for progress towards achieving a “nationally determined contribution”, which Canada stated at 30 percent below 2005 levels by 2030. On December 9, 2016, eight provinces, including Ontario, and the three territories adopted the Pan-Canadian Framework on Clean Growth and Climate Change (the “Pan-Canadian Framework”), which explicitly incorporated the Benchmark. At that time, British Columbia, Alberta and Québec already had carbon pricing mechanisms, and Ontario had announced its intention to join the Québec/California cap-and-trade system. Manitoba subsequently adopted the Pan-Canadian Framework on February 23, 2018. Saskatchewan did not adopt it. The Pan-Canadian Framework emphasized the significant risks posed by climate change to human health, security and economic growth and recognized carbon pricing as “one of the most effective, transparent, and efficient policy approaches to reduce GHG emissions”, promote innovation and encourage individuals and industries to pollute less.

On March 27, 2018, the Greenhouse Gas Pollution Pricing Act (the “Act”) was introduced in Parliament as part of the Budget Implementation Act, 2018, No. 1. On June 21, 2018, it received Royal Assent. The Act gave effect to the principles expressed in the Pan-Canadian Framework and fulfilled the federal government’s Benchmark commitment to introduce “backstop” legislation. In July 2018, Ontario announced its withdrawal from the national carbon pricing program, revoked its cap-and-trade regulation and prohibited trading of emissions allowances. It introduced the Cap and Trade Cancellation Act, 2018, S.O. 2018, c. 13, and cancelled seven programs that the federal government had agreed to co-fund, through the Low Carbon Economy Fund.

The Preamble of the Act includes, among other observations: “Recent anthropogenic emissions of greenhouse gases are at the highest level in history and present an unprecedented risk to the environment, including its biological diversity, to human health and safety and to economic prosperity. … The United Nations, Parliament and the scientific community have identified climate change as an international concern which cannot be contained within geographic boundaries. … As recognized in the Pan-Canadian Framework … climate change is a national problem that requires immediate action by all governments in Canada as well as by industry, non-governmental organizations and individual Canadians.”

The Act puts a price on carbon pollution in order to reduce GHG emissions and to encourage innovation and the use of clean technologies. It does so in two ways. First, it places a regulatory charge on carbon-based fuels. This charge is imposed on certain producers, distributors and importers and will increase annually from 2019 through to 2022. Second, it establishes a regulatory trading system applicable to large industrial emitters of GHGs. This is referred to as an Output Based Pricing System (the “OBPS”). It includes limits on emissions, a “credit” to those who operate within their limit, and a “charge” on those who exceed it. Net revenues from the fuel charge and excess emissions charge are returned to the province of origin, or to other prescribed persons.

The Act does not apply in all provinces. Rather, the Act and its regulations serve as the “backstop” contemplated by the Pan-Canadian Framework in those provinces that have not adopted sufficiently “stringent” carbon pricing mechanisms. Many provinces have enacted legislation establishing their own carbon pricing mechanisms. Some provinces have not and are, therefore, “listed provinces” and subject to the backstop regime. The fuel charge applies in Ontario, New Brunswick, Manitoba and Saskatchewan and will apply in Yukon and Nunavut. The OBPS applies in Ontario, New Brunswick, Manitoba, Prince Edward Island and partially in Saskatchewan and will also apply in Yukon and Nunavut.

Part 1 of the Act establishes the “charge” on carbon-based fuels. Subject to a number of exceptions, the charge applies to fuels that are produced, delivered or used in a “listed province”, brought into a “listed province” from another place in Canada, or imported into Canada at a location in a “listed province.” Other provisions in Part 1 of the Act address a rebate regime, registration and reporting requirements, the administration and enforcement of the fuel charge, and other miscellaneous matters. Finally, the Governor in Council has authority under this part of the Act to make regulations to carry out Part 1. Part 1 of the Act has applied in Ontario, New Brunswick, Manitoba and Saskatchewan since April 1, 2019, and will apply in Yukon and Nunavut effective July 1, 2019.

Part 2 of the Act sets out the mechanism for pricing industrial GHG emissions by emission-intense industrial facilities. Covered facilities (located in a backstop jurisdiction) subject to the OBPS are exempt from paying the fuel charge, but are required to pay compensation for the portion, if any, of their GHG emissions that exceed their applicable emissions limit. Facilities covered by the federal regime are subject to periodic compliance reporting requirements. There are two mechanisms for pricing industrial GHG emissions. First, if a facility’s emissions fall below its prescribed limit, the facility will be issued surplus credits called “compliance units.” Second, if a facility’s emissions exceed its prescribed limit, the facility must pay compensation for its excess emissions. Compensation may be made by remitting compliance units, paying an excess emissions “charge payment” to Canada, or doing a combination of both. The Governor in Council also has a variety of other order and regulation making powers, including the power to set GHG emission limits. The other provisions in Part 2 of the Act address the collection of information and samples, administration and enforcement, and offences and punishment. Part 2 of the Act has applied in Ontario, New Brunswick, Manitoba, Prince Edward Island and partially in Saskatchewan since January 1, 2019, and will apply in Yukon and Nunavut effective July 1, 2019.

ISSUES:

(1) Is the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, unconstitutional in whole or in part?

HOLDING:

The Act is constitutional.

REASONING:

(1) No. The Act is constitutional and falls within Parliament’s power to legislate on matters of national concern for the peace, order, and good government (“POGG”) of Canada. The majority determined that the main thrust of the Act was to establish minimal national standards to reduce GHG emissions. A.C.J.O. Hoy, in her concurring judgment, determined that the main thrust of the Act was establishing minimum national greenhouse gas emissions pricing standards to reduce greenhouse gas emissions. Establishing minimal national standards to reduce GHG emissions has a singleness, distinctiveness, and indivisibility that distinguishes it from matters of provincial concern. The Act leaves ample opportunity for provinces to pass legislation on other aspects of GHG regulation.

The analytical approach to the constitutionality of legislation on federalism grounds is well-established. In the first step, referred to as “characterization”, the court determines the true subject matter or “pith and substance” of the challenged law. This step of the analysis requires an examination of the purpose and effects of the law to identify its “main thrust.” The Court determined that the purpose of the Act was reflected in its Preamble and in Canada’s international commitments and domestic initiatives to reduce GHG emissions on a nation-wide basis. It does this by establishing national minimum prices for GHG emissions, through both the fuel charge and the OBPS excess emissions charge. The Act’s purpose and effects demonstrate that the pith and substance of the Act can be distilled as: “establishing minimum national standards to reduce greenhouse gas emissions.” The means chosen by the Act is a minimum national standard of stringency for the pricing of GHG emissions.

The second step in the federalism analysis is the classification of the Act based on its pith and substance so characterized. The Court addressed the principles relating to the national concern branch of the POGG power that emerged from R v Crown Zellerbach Canada Ltd, [1988] 1 SCR 401, and applied it to this decision.

First, the Court considered whether reducing GHG emissions was a new matter that was not recognized at Confederation. The record demonstrated that global warming and climate change and, in particular, the role played by anthropogenic GHG emissions in those processes, were not widely understood by the scientific community until well after Confederation. Accordingly, it cannot be said that establishing minimum national standards to reduce GHG emissions, as distinct from efforts to reduce local air pollution, was a matter in existence in 1867.

Next, the Court considered whether the matter before it had a singleness, distinctiveness, and indivisibility that clearly distinguished it from matters of provincial concern. The Court determined that establishing minimum national standards to reduce GHG emissions met these requirements. GHGs are a distinct form of pollution, identified with precision in Schedule 3 to the Act. They have known and chemically distinct scientific characteristics. They combine in the atmosphere to become persistent and indivisible in their contribution to anthropogenic climate change. They have no concern for provincial or national boundaries. Emitted anywhere, they cause climate change everywhere, with potentially catastrophic effects on the natural environment and on all forms of life. They are exactly the type of pollutant that both the majority and the minority in R v Crown Zellerbach contemplated would fall within the national concern branch of the POGG power.

The international and interprovincial impacts of GHG emissions inform not only the “national” nature of the concern, but the singleness, distinctiveness and indivisibility of the matter of establishing minimum national standards to reduce GHG emissions. Like the production, use and application of atomic energy, which was considered in Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327, the matter of establishing minimum national standards to reduce GHG emissions is “predominantly extra-provincial and international in character and implications, and possesses sufficiently distinct and separate characteristics to make it subject to Parliament’s residual power.”

The application of the “provincial inability” test leaves no doubt that establishing minimum national standards to reduce GHG emissions is a single, distinct and indivisible matter. While a province can pass laws in relation to GHGs emitted within its own boundaries, its laws cannot affect GHGs emitted by polluters in other provinces – emissions that cause climate change across all provinces and territories. However stringent a province’s GHG emissions reduction measures, they cannot, on their own, reduce Canada’s net emissions.

The final consideration from R v Crown Zellerbach was that a matter of national concern must have not only a singleness, distinctiveness, and indivisibility, but also a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution.

Properly characterized, the Act deals only with the establishment of minimum national standards to reduce GHG emissions. It operates on a nation-wide basis and leaves scope for provincial standards that meet or exceed that minimum. It also leaves ample provincial legislative opportunity for other aspects of GHG regulation, including laws aimed at the causes and effects of GHG emissions within the province. The characterization of the Act and its classification as falling within the national concern branch of the POGG power do not have the effect of drawing all regulation of GHG emissions into federal jurisdiction. On the contrary, federal jurisdiction in this field is narrowly constrained to address the risk of provincial inaction regarding a problem that requires cooperative action.

The Act recognizes and respects the jurisdiction of individual provinces to enact their own legislation in relation to GHG emissions, including the ability of provinces to legislate fuel charges, to set emissions limits and to participate in output based pricing systems, provided that they are sufficiently stringent. A number of provinces have done so. The Act strikes an appropriate balance between Parliament and provincial legislatures, having regard to the critical importance of the issue of climate change caused by GHG emissions, the need to address it by collective action, both nationally and internationally, and the practical inability of even a majority of the provinces to address it collectively.

While the principle of cooperative federalism cannot validate an unconstitutional law, it does support the concurrent operation of statutes enacted by governments at both levels. The Act encourages just that, making room for the operation of provincial carbon pricing legislation of sufficient stringency. Cooperative federalism, in which Parliament addresses a matter of national concern and the provinces address the aspects of the issue that fall within their enumerated powers, can also serve as an interpretative aid. The Court cited Reference re Pan-Canadian Securities Reference, 2018 SCC 48, to demonstrate that courts should favour a harmonious reading of statutes so as to permit their concurrent operation. A harmonious reading of the Act, which itself confines its operation to the creation of a national minimum pricing scheme to address a national and international concern, permits it to operate concurrently with provincial laws applicable to the environment in general, and to the reduction of GHG emissions in particular. The environment is an area of shared constitutional responsibility. The Act is Parliament’s response to the reality and importance of climate change while securing the basic balance between the two levels of government envisioned by the Constitution.

In order for the charges imposed under the Act to be constitutional, the charges must have a nexus to the purposes of the Act. The Court held that behaviour modification was one of the purposes of the charges, which has been recognized as an appropriate purpose for a regulatory scheme. The funds are returned to provinces, taxpayers and institutions to reward them for their participation in a program that benefits the provinces and the entire country. This promotes and rewards behaviour modification, encourages shifts to cleaner fuels, and fosters innovation, all of which are purposes identified in the Preamble of the Act. The fuel charge and the excess emissions charge under the Act are constitutional regulatory charges.


SHORT CIVIL DECISIONS

Asghar v. Ruffudeen, 2019 ONCA 533

[Juriansz, van Rensburg and Paciocco JJ.A.]

Counsel:

A. Asghar, for themself

M. Kropp, for the respondent

Keywords: Civil Procedure, Appeal Abandoned, Costs

Wilson v. Fatahi-Ghandehari, 2019 ONCA 532

[Juriansz, van Rensburg and Paciocco JJ.A.]

Counsel:

P. Robson, for the moving party

A. Mohammed and S. Siddiqui, for the responding party

Keywords: Civil Procedure, Judicial Discretion

Richard v. Niagara Falls (City), 2019 ONCA 531

[Juriansz, van Rensburg and Paciocco JJ.A.]

Counsel:

C. Du Vernet and C. Mcgoogan, for the appellant

M. Bordin, for the respondent

Keywords: Real Property, Adverse Possession, Vesting Orders

BGOI Films Inc. v. 108 Media Corporation, 2019 ONCA 539

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

J. A. de Jong, for the moving party

T. Dumigan, for the respondent

Keywords: Civil Procedure, Appeals, Motion to Quash, Arbitrations, Arbitration Act, 1991, S.O. 1991, c. 17, ss. 45(1), 50(3)

Massoumi v. Bafas, 2019 ONCA 536

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

S. Babwani, for the appellant

R. Kalanda, for the respondent

Keywords: Civil Procedure, Appeals, Extension of Time

Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 550

[Lauwers, Pardu and Nordheimer JJ.A.]

Counsel:

C. Dockrill, for the appellants

R. Kornblum, for the respondent

Keywords: Civil Procedure, Appeals, Costs, Small Claims Court, Rules of Civil Procedure, Rule 57.05(1)


CRIMINAL DECISIONS

R v. Passera, 2019 ONCA 527

[Doherty, Brown and Trotter JJ.A.]

Counsel:

M. Smith, for the appellant

K. Wilson, for the respondent

I. Grant and S. Secter, for the intervener Criminal Lawyers’ Association (Ontario)

I.B. Kasper, for the intervener Canadian Civil Liberties Association

E.R. Hill and C, Kasper, for the intervener Aboriginal Legal Services

Keywords: Criminal Law, Importing Cocaine, Sentencing, Pre-Sentence Custody Credit, Parole Eligibility, Bail, Criminal Code, s. 718.1, s. 719(3.1), s. 719(1), Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 120, s. 128(1), s. 115, s. 119, 139(1), Canadian Charter of Rights and Freedoms, s. 1, s. 7, s. 12, R v. Suter, 2018 SCC 34, R v. Zinck, 2003 SCC 6, R v. Summers, 2014 SCC 26, R v. Wust, 2000 SCC 18, R v. Carvery, 2014 SCC 27

R v. Cusick, 2019 ONCA 524

[Juriansz, Watt and Harvison Young JJ.A.]

Counsel:

M. Halfyard and B. Vandebeek, for the appellant

M. Goswami, for the respondent

Keywords: Criminal Law, Child Pornography, Evidence, Exclusion, Canadian Charter of Rights and Freedoms, s. 8, s. 24(2), Criminal Code, ss. 163.1(1) & 487(1), R. v. Spencer, 2014 SCC 43, R. v. Debot, [1989] 2 SCR 1140, R. v. Araujo, 2000 SCC 65, R. v. Grant, 2009 SCC 32

R. v. Donoghue, 2019 ONCA 534

[Brown, Miller and Trotter JJ.A.]

Counsel:

A. Marchetti, for the appellant

A. Wheeler, for the respondent

Keywords: Criminal Law, Expert Evidence, DNA Evidence

R. v. L.T, 2019 ONCA 535

[Benotto, Roberts and Miller JJ.A.]

Counsel:

N. Jamaldin, for the appellant

M. Petrie, for the respondent

Keywords: Criminal Law, Sexual Assault, Consent, Defences, Honest but Mistaken Belief, Evidence, Credibility, R. v. Barton, 2019 SCC 33, R. v. Park, [1995] 2 SCR 836

R. v. J.L, 2019 ONCA 523

[Doherty, Watt and Pardu JJ.A.]

Counsel:

K. Agnihotri, for the appellant

C. Suter, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Touching, Evidence, Admissibility, Disclosure, Jury Instructions, Sentencing, Criminal Code, ss.152, 278, R. v. Shearing, [2002] 3 SCR 33, R. v. T.C., [2004] OJ No. 4077

R v. R.S., 2019 ONCA 542

[Sharpe, Brown and Roberts JJ.A.]

Counsel:

V. Singh, for the appellant

J. Cameron, for the respondent

Keywords: Criminal Law, Sexual Assault of a Minor, Breach of Prohibition Order, Dangerous Offenders, Sentencing, Criminal Code, s. 161, s. 752.1, s. 753(4.1), R v. Anthony-Cook, 2016 SCC 43

R v. Cepic, 2019 ONCA 541

[Benotto, Roberts and Miller JJ.A.]

Counsel:

C. McKeown, for the appellant

K. Rawluk, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Credibility, Stereotypes, Myths, Assumptions

R v. Espinoza-Ortega, 2019 ONCA 545

[Feldman, Roberts and Fairburn JJ.A.]

Counsel:

R. Gregor, for the appellant

A. Hotke, for the respondent

Keywords: Criminal Law, Impaired Driving Causing Bodily Harm, Refusing to Provide Breath Sample, Dangerous Operation of a Motor Vehicle, Failure to Stop at the Scene of an Accident, Criminal Negligence Causing Bodily Harm, Sentencing, Joint Submission, Criminal Code, s. 722(2), s. 722(5), R v. Anthony-Cook, 2016 SCC 43, R v. Wong, 2018 SCC 25

R. c. Lauzon, 2019 ONCA 546

[Les juges Sharpe, Benotto et Roberts]

Counsel:

C. Mainville, duty counsel for the appellant

P. Cowle, for the respondent

Keywords: Droit pénal, Criminal Law, Négligence criminelle causant la mort, Criminal Negligence Causing Death, Preuve, Evidence, Crédibilité, Credibility, Déclarations antérieures incompatibles, Prior Inconsistent Statements, l’al. 219(1)(b) du Code criminel, LRC (1985), ch. C-46, l’art. 13 de la Charte canadienne des droits et libertés, R. c. Nedelcu, 2012 CSC 59, R. v. Wenham, 2013 ONSC 7431, R. c. Henry, 2005 CSC 76, ACI Brands Inc. v. Pow, 2014 ONSC 2784


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