Jump To: Table of Contents | Civil Decisions | Short Civil Decisions

Good afternoon.

There were only two civil decisions of any length released by the Court of Appeal this past week, dealing with security for costs of an appeal and variation of spousal support.

However, in J.M.J. Family Trust v. Simcoe Block (1979) Limited, we are reminded that a debtor’s liability for “reasonable” legal fees incurred by a creditor enforcing a commercial agreement is not the same thing as liability for costs under the costs regime under the Rules. Unless the concepts of “full, substantial or partial indemnity costs” are imported into the commercial document, what is “reasonable” in the circumstances is not tied to such concepts.

Have a great weekend, and stay safe.

John Polyzogopoulos

Blaney McMurtry LLP

416.593.2953 Email


Table of Contents

Civil Decisions

Heidari v. Naghshbandi, 2020 ONCA 757

Keywords: Civil Procedure, Appeals, Security for Costs, Frivolous and Vexatious, Rules of Civil Procedure, Rules 61.06(1), Yaiguaje v. Chevron Corporation, 2017 ONCA 0827, Health Genetic Center Corp. v. New Scientist Magazine, 2019 ONCA 0968, York University v. Markicevic, 2017 ONCA 0651, Pickard v. London Police Services Board, 2010 ONCA 0643, Henderson v. Wright, 2016 ONCA 0089, Combined Air Mechanical Services Inc. v. Flesch, 2010 ONCA 0633

Nettleton v. Nettleton, 2020 ONCA 753

Keywords: Family Law, Separation Agreements, Spousal Support, Variation, Material Change in Circumstances, Imputing Income, Pensions, Child Support Guidelines, O. Reg. 391/97, Spousal Support Advisory Guidelines, Boston v. Boston, 2001 SCC 43, Hickey v. Hickey, [1999] 2 S.C.R. 518

Short Civil Decisions

Abbas v. Albohamra, 2020 ONCA 740

Keywords: Family Law, Child Support, Imputing Income, Child Support Guidelines, O. Reg. 391/97

Anderson v. Bubb, 2020 ONCA 746

Keywords: Family Law, Spousal Support, Civil Procedure, Jurisdiction, Attornment, Family Law Act, RSO 1990, c. F.3, Divorce Act, RSC 1985, c. 3

J.M.J. Family Trust v. Simcoe Block (1979) Limited, 2020 ONCA 741

Keywords: Contracts, Debtor-Creditor, Promissory Notes, General Security Agreements, Contractual Liability for Costs of Enforcement, Reasonable Legal Fees, Costs, Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.)

Metropolitan Toronto Condominium Corporation No. 590 v. The Registered Owners and Mortgagees of Metropolitan Toronto Condominium Corporation No. 590, 2020 ONCA 749

Keywords: Real Property, Condominiums, Duty to Repair and Maintain

Norris v. Starkman, 2020 ONCA 744

Keywords: Contracts, Solicitor-Client, Legal Fees, Civil Procedure, Assessments, Special Circumstances, Adding Parties, Solicitors Act, R.S.O. 1990, c. S.15, ss. 4, McCarthy Tétrault LLP v. Guberman, 2012 ONCA 0679


CIVIL DECISIONS

Heidari v. Naghshbandi, 2020 ONCA 757

[Jamal J.A. (Motions Judge)]

Counsel:

S.N. Zeitz, for the moving parties

A. Niksich, for the responding party

Keywords: Civil Procedure, Appeals, Security for Costs, Frivolous and Vexatious, Rules of Civil Procedure, Rules 61.06(1), Yaiguaje v. Chevron Corporation, 2017 ONCA 0827, Health Genetic Center Corp. v. New Scientist Magazine, 2019 ONCA 0968, York University v. Markicevic, 2017 ONCA 0651, Pickard v. London Police Services Board, 2010 ONCA 0643, Henderson v. Wright, 2016 ONCA 0089, Combined Air Mechanical Services Inc. v. Flesch, 2010 ONCA 0633

facts:

This was a motion for security for costs under Rule 61.06(1) of the Rules of Civil Procedure. The moving party and the respondent were friends and business partners for a long time. Over the course of this relationship, they made several loans to each other and entered into several transactions, most of which were undocumented. They also made loans to a corporation which they were both shareholders and directors of. These loans were also undocumented. Their relationship eventually soured and litigation over the loans and repayment of the various debts amongst themselves and the corporation.

The responding party to this motion was sued by the moving party and the corporation in 2009. The responding party counterclaimed in both actions for various reasons, but after nearly ten years of litigation, withdrew the counterclaim against the corporation on the eve of trial. At the trial of both the actions, the judge found that the issues turned on credibility and that the defendant (the responding party to this motion) was not credible. The trial judge found in favour of the plaintiffs in both actions, and in doing so, ordered substantial indemnity costs.

The defendant appealed, and the moving party seeks an order for security of costs of the appeal.

issues: 

(1) Should security for costs be granted under Rule 61.06(1)(a) of the Rules of Civil Procedure?

(2) If not, has the moving party established “other good reason” to order security for costs under Rule 61.06(1)(c)?

holding: 

Motion dismissed.

reasoning: 

(1) Should security for costs be granted under Rule 61.06(1)(a) of the Rules of Civil Procedure?

No. The Court first set out several of the governing principles for a motion under Rule 61.06(1), including:
1. Rule 61.06(1) is permissive in that even if the test is met, the motion judge may refuse to grant security for costs, and such orders should not be made routinely;
2. The analysis is a two-step process wherein the moving party must first establish the elements of the test and then the motion judge must “take a step back” and consider the justness of the order, justness to be assessed by considering, among other things, the merits of the appeal, any delay in moving for security for costs, the impact of actionable conduct by the respondent on the available assets of the appellant, access to justice concerns, the public importance of the litigation, and the amount and form of security sought by the moving party; and
3. Whether an order for security for costs is being used as a litigation tactic to prevent a case from being heard on its merits.

Under Rule 61.06(1)(a), the moving party must prove that there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. “Good reason to believe” means that the motion judge need only make a tentative, not a definitive conclusion on either the merits or sufficiency of assets. The frivolous and vexatious aspect requires the moving party to show that the appeal is frivolous in that it is devoid of merit or with little prospect of success, and vexatious in that it is taken to annoy or embarrass the respondent or conducted in a vexatious way.

Turning to the case at hand, the moving party submitted that the appeal was frivolous as it related only to questions of fact, namely findings of credibility, and raised no arguable error in law. While the Court has previously held that such appeals are frivolous (see Henderson v. Wright) because there is little probability that an appellate panel would overturn such credibility findings, the respondent raised an arguable error of law. At trial, the judge held that several of the loans were actually joint investments, an issue that was not argued by the parties. The responding party submitted this was an error in law. The Court agreed that this was not a frivolous argument on appeal.

On the question of whether the appeal was vexatious, the Court was not satisfied that it was. The moving party pointed out the respondent’s conduct in abandoning a counter-claim after ten years of litigation and that the respondent had defaulted on previous cost orders. However, the Court found that the previous cost order was stayed by the ongoing appeal, and that no costs were explicitly allocated to the respondents’ abandonment of the counterclaim. Further, the Court held that the respondent was appealing to clear its name, overturn the findings of credibility against it, and to challenge amounts of money it now owes under the trial decisions. These are proper reasons to bring an appeal and thus, it was not vexatious.

While the moving party failed to meet its burden under Rule 61.06(1)(a), the Court went on to briefly consider the sufficiency of assets. The respondent provided previous tax returns that showed annual income of around $100,000 per year. This was sufficient to cover the estimated costs of the appeal, therefore insufficiency of assets was not made out.

(2) If not, has the moving party established “other good reason” to order security for costs under Rule 61.06(1)(c)?

No. Under Rule 61.06(1)(c), a court may also award security for costs of an appeal for “other good reason.” While there is no definitive list of what is ‘good reason’, the reason must be consistent with the purposes for ordering security, and must be fairly compelling. Previous cases that have awarded security under this rule involved instances of fraud by the appellant, where the appellant has taken steps to put their assets out of reach of creditors or where the appeal has a low chance of success and while there are sufficient assets, they would be nearly impossible to enforce against. The Court of Appeal held that none of these circumstances existed, and thus found no “other good reason” to award security for costs. The motion was dismissed.


Nettleton v. Nettleton, 2020 ONCA 753

[Feldman, Simmons and Harvison Young JJ.A.]

Counsel:

P. Buttigieg, for the appellant

J. Beaton and B. Barsalou, for the respondent

Keywords: Family Law, Separation Agreements, Spousal Support, Variation, Material Change in Circumstances, Imputing Income, Pensions, Child Support Guidelines, O. Reg. 391/97, Spousal Support Advisory Guidelines, Boston v. Boston, 2001 SCC 43, Hickey v. Hickey, [1999] 2 S.C.R. 518

facts:

The appellant, former wife, appealed from a change order reducing the amount of spousal support payable to her under a separation agreement.

Under the terms of the separation agreement, the respondent was required to pay the appellant $2,750 each month on account of spousal support and $800 for child support. The amount payable for spousal support was subject to variation based on a material change in circumstances, whether foreseeable or not. The separation agreement also provided that spousal support “will be varied upon the husband’s retirement based upon the needs and financial circumstances of both parties at that time” (the “retirement adjustment clause”).

The separation agreement also required the respondent to pay to the appellant two amounts on account of equalization of net family properties: half of the respondent’s pension as of the date of separation using a projected retirement age of 63.5 years; and equalization of the remaining assets. However, when the respondent was only 57 years of age, the plant where he worked was closed and his pension plan was terminated. He found other work within approximately six weeks. In 2009, he received the pension plan payout totaling $581,228.32. He transferred the maximum eligible amount, $419,505.44, into a Locked-in Retirement Account (“LIRA”) and received a cash payout for the balance, including interest, totaling $167,818.

After the respondent’s obligation to pay child support terminated, the respondent continued to pay the appellant more than her initial monthly spousal support. As the separation agreement was not amended, the appellant received part of the monthly payment tax-free.

The respondent notified the appellant he intended to retire, but the parties were unable to agree on a variation of spousal support. Accordingly, the respondent reduced his monthly spousal support payments to $671 based on his calculations of the amount payable under the Spousal Support Advisory Guidelines (“SSAGs”), having regard to his then existing retirement income and the appellant’s income.

The appellant then filed the separation agreement with the court for the purpose of enforcement. In response, the respondent brought a change motion requesting that the spousal support payable under the separation agreement be reduced.

In her response to the change motion, the appellant requested that spousal support continue in the amount specified in the separation agreement, and requested that support for the previous years be recalculated based on the respondent’s income in those years, yielding an order for retroactive support.

The trial judge declined to order retroactive support for a variety of reasons including: the respondent continued to pay child support during the period he was unemployed, raised the quantum of spousal support when he was no longer required to pay child support, assisted the appellant in purchasing a home by co-signing her mortgage and providing her with $10,000, and the respondent’s financial hardship because of his income at the time of trial.

The trial judge ordered that spousal support be reduced as follows, subject to credit for amounts previously paid for the relevant periods: January 1, 2017, $2,181 per month; and commencing January 1, 2018, $1,009 per month. Once the respondent started receiving LIRA income at the age of 72, 42.2 percent would be considered available for calculating spousal support.

issues: 

(1) Did the trial judge err by failing to take account of the 2009 cash payment for retroactive support?

(2) Did the trial judge err by misapprehending the actuarial evidence concerning the respondent’s projected LIRA income?

(3) Did the trial judge err by failing to consider the whole of the evidence including the economic hardship suffered by the appellant and the tools available for imputing income?

holding: 

Appeal dismissed.

reasoning: 

Did the trial judge err by failing to take account of the 2009 cash payment for retroactive support?

No. The trial judge was well aware of the $167,818 pension payout the respondent received in 2009. He noted that the amount netted to about $96,000 after tax, and that the respondent gave evidence about what he had done with the money. Bottom line: at the time of trial in 2018, the money was long gone and did not form part of the respondent’s current income. There was no evidence to support a finding that the respondent knew what would be happening with his pension while he was still under an obligation to pay child support. The trial judge made no error in failing to reach back nine years to impose some form of retroactive support order to account for the fact that, in 2009, the husband had received a one-time cash pension payout, a significant portion of which had already been subject to equalization.

(2) Did the trial judge err by misapprehending the actuarial evidence concerning the respondent’s projected LIRA income? And (3) Did the trial judge err by failing to consider the whole of the evidence including the economic hardship suffered by the appellant and the tools available for imputing income?

No to both. These two issues were interrelated and were therefore, considered together. There was no error in principle or misapprehension of the evidence in the trial judge’s reasons. The trial judge was fully aware of the fact that there was a minimum withdrawal threshold for the LIRA once the respondent turned 72 and that it was open to him, as trial judge, to impute income to the respondent before the respondent began making LIRA or RRIF withdrawals.

The trial judge recognized the minimum nature of the LIRA withdrawal requirements when he noted that the respondent “will be forced to take out a minimum of 5 percent annually upon reaching age 72.” He also implicitly acknowledged his ability to immediately impute income to the respondent when he declined the respondent’s suggestion that 14.05 percent of a notional annual pension income, calculated by the respondent’s actuary ($4,377), be imputed immediately. The trial judge declined this suggestion because he concluded the respondent’s plan to hold off on withdrawals until age 72 would ultimately benefit both parties.

The trial judge was also well aware of the appellant’s dependence on the respondent for income and her demonstrated need for support. He said so explicitly in his reasons. However, he also noted that the appellant had used her equalization payment to purchase a house, that she still had the house at the time of trial and that she had taken no steps to prepare for the respondent’s retirement and resulting reduction in his income and ability to pay spousal support.

The decision to order high end SSAGs support recognized the long-term nature of the marriage as well as the appellant’s needs. The decision to include 42.2 percent of the respondent’s actual LIRA withdrawals in his income to calculate spousal support responded to the appellant’s economic hardship by double-dipping, at least to some extent. The decision not to impute LIRA income earlier or at a higher level than the respondent’s actual withdrawals reflected the trial judge’s overall assessment of the parties’ circumstances.


SHORT CIVIL DECISIONS

Abbas v. Albohamra, 2020 ONCA 740

[Feldman, Simmons and Harvison Young JJ.A.]

Counsel:

R.B. Moldaver (Q.C.), for the appellant

E. Aiaseh, for the respondent

Keywords: Family Law, Child Support, Imputing Income, Child Support Guidelines, O. Reg. 391/97

Anderson v. Bubb, 2020 ONCA 746

[Tulloch, Miller and Paciocco JJ.A.]

Counsel:

M.R. Banasinski, for the appellant/respondent by way of cross-appeal

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

Keywords: Family Law, Spousal Support, Civil Procedure, Jurisdiction, Attornment, Family Law Act, RSO 1990, c. F.3, Divorce Act, RSC 1985, c. 3

J.M.J. Family Trust v. Simcoe Block (1979) Limited, 2020 ONCA 741

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

Counsel:

M. Kestenberg and K. Schoenfeldt, for the appellant

D. Nunes, for the respondents

Keywords: Contracts, Debtor-Creditor, Promissory Notes, General Security Agreements, Contractual Liability for Costs of Enforcement, Reasonable Legal Fees, Costs, Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.)

Metropolitan Toronto Condominium Corporation No. 590 v. The Registered Owners and Mortgagees of Metropolitan Toronto Condominium Corporation No. 590, 2020 ONCA 749

[Fairburn A.C.J.O., Juriansz and Nordheimer JJ.A.]

Counsel:

E.S. Lederman and K. Hayden, for the appellant

M.H. Arnold, for the respondents

Keywords: Real Property, Condominiums, Duty to Repair and Maintain

Norris v. Starkman, 2020 ONCA 744

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

Counsel:

P.H.S., acting in person and for the appellant Starkman Professional Corporation c.o.b. Starkman Barristers

D.A.N., acting in person

Keywords: Contracts, Solicitor-Client, Legal Fees, Civil Procedure, Assessments, Special Circumstances, Adding Parties, Solicitors Act, R.S.O. 1990, c. S.15, ss. 4, McCarthy Tétrault LLP v. Guberman, 2012 ONCA 0679


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

Good afternoon.

Please find below our summaries of the civil decisions of the Court of Appeal for the week of November 16, 2020.

Sokoloff v Tru-Path Occupational Therapy Services Ltd was another anti-SLAPP decision, perhaps the first by the Court since the Supreme Court’s recent decision in Pointes Protection..

Skof v. Bordeleau considered the jurisdiction of the Superior Court in a claim by a former police officer against his former employer, and whether that jurisdiction was ousted by the collective bargaining agreement or by the Police Services Act (no in both cases).

Other topics covered this week included family law and stay pending appeal in a mortgage enforcement case.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

2257573 Ontario Inc. v. Furney, 2020 ONCA 742

Keywords: Civil Procedure, Summary Judgment, Stay Pending Appeal, Serious Issue to be Tried, Irreparable Harm, Balance of Convenience, Mortgages, Interest, Order for Possession, Power of Sale, Rules of Civil Procedure, RRO 1990, Reg 194, r 63.01(1), Criminal Code of Canada, RSC 1985, c C.46, s 347, RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311, Wilfert v McCallum, 2017 ONCA 895, Starkman v Home Trust Company, 2015 ONCA 436, Circuit World Corporation v Lesperance (1997), 33 OR (3d) 674 (Ont CA), Centurion Farms Ltd v Citifinancial Canada Inc, 2013 ONCA 79, Manufacturers Life Co v Granada Investments Ltd (2001), 150 OAC 253 (Ont CA), Oak Orchard Developments Ltd v Iseman, [1987] OJ No 361 (Ont HC), Joseph E Roach, The Canadian Law of Mortgages, 3rd ed. (Toronto: LexisNexis, 2018)

Skof v. Bordeleau, 2020 ONCA 729

Keywords: Labour Law, Collective Agreements, Regulated Professions, Police, Civil Procedure, Striking Pleadings, Jurisdiction, Judicial Review, Remedies, Declaratory Relief, Injunctive Relief, Damages, Police Services Act, R.S.O. 1990, c. P. 15, s. 89, Judicial Review Procedure Act, s. 8, Rules of Civil Procedure, Rule 21.01(3)(a), TeleZone Inc. v. Canada (Attorney General), 2008 ONCA 892, aff’d 2010 SCC 62, Weber v. Ontario Hydro, [1995] 2 S.C.R. 929, Piko v. Hudson’s Bay Co. (1998), 167 D.L.R. (4th) 479 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 23, Regina Police Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 14

Sokoloff v Tru-Path Occupational Therapy Services Ltd, 2020 ONCA 0730

Keywords: Torts, Defamation, Civil Procedure, Anti-SLAPP, Public Interest, Costs, Courts of Justice Act, ss. 137.1, 1704604 Ontario Ltd. v Pointes Protection Association, 2018 ONCA 0685, aff’d 2020 SCC 22, Grant v Torstar Corp., 2009 SCC 61, Platnick v. Bent, 2018 ONCA 0687, aff’d 2020 SCC 23, Hamilton v Open Window Bakery Ltd., 2004 SCC 9, Veneruzzo v Storey, 2018 ONCA 0688

Short Civil Decisions

Elguindy v. Elguindy, 2020 ONCA 739

Keywords: Family Law, Civil Procedure, Costs, Leave to Appeal, Courts of Justice Act, RSO 1990, c. C.43, s. 133(b), Brad-Jay Investments Limited v. Village Developments Limited, 218 O.A.C. 315 (C.A.)

Haley v Stepan Canada Inc., 2020 ONCA 0737

Keywords: Civil Procedure, Summary Judgment, Genuine Issue Requiring Trial, Evidence, Onus of Proof, Burden of Proof, Expert Evidence

J.D.M. v T.L.L.M., 2020 ONCA 734

Keywords: Family Law, Civil Procedure, Contempt Evidence, Standard of Proof

CIVIL DECISIONS

2257573 Ontario Inc. v. Furney, 2020 ONCA 742

[Jamal J.A. (Motions Judge)]

Counsel:

R.K. Watson, for the moving parties

H.W. Reininger, for the responding party

Keywords: Civil Procedure, Summary Judgment, Stay Pending Appeal, Serious Issue to be Tried, Irreparable Harm, Balance of Convenience, Mortgages, Interest, Order for Possession, Power of Sale, Rules of Civil Procedure, RRO 1990, Reg 194, r 63.01(1), Criminal Code of Canada, RSC 1985, c C.46, s 347, RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311, Wilfert v McCallum, 2017 ONCA 895, Starkman v Home Trust Company, 2015 ONCA 436, Circuit World Corporation v Lesperance (1997), 33 OR (3d) 674 (Ont CA), Centurion Farms Ltd v Citifinancial Canada Inc, 2013 ONCA 79, Manufacturers Life Co v Granada Investments Ltd (2001), 150 OAC 253 (Ont CA), Oak Orchard Developments Ltd v Iseman, [1987] OJ No 361 (Ont HC), Joseph E Roach, The Canadian Law of Mortgages, 3rd ed. (Toronto: LexisNexis, 2018)

facts:

The appellants, experienced real estate investors, owned three properties in Niagara-on-the-Lake. In 2017, the appellants encountered financial difficulties and were introduced to the respondent, a mortgage lender, through an acquaintance investor to obtain short-term financing. This acquaintance owned property in Woodstock. The appellants negotiated several high-interest, short-term loans from the respondent — totalling almost $900,000 — secured by mortgages on the appellants’ and acquaintance’s properties. The appellants were represented by counsel on these transactions. Unable to obtain longer term financing, the appellants accumulated interest, other charges, and penalties on the mortgage loans with the respondent. The appellants defaulted on their loans and have not paid anything towards the mortgages to date.

In late 2017, the respondent sued the appellants for defaulting under the mortgage agreements. The respondent then moved for summary judgment, seeking orders for possession of all properties and repayment of the principal advanced, interest, and other penalties, fees and charges under the agreements. In response, the appellants claimed the respondent had breached an alleged oral agreement, under which the respondent agreed to discharge three executions against the properties. They also claimed the respondent failed to provide timely and accurate mortgage discharge statements and that, once the penalties, fees, and charges were included in the calculation of the effective annual interest rate, the mortgage loans involved a criminal rate of interest contrary to s. 347 of the Criminal Code. Finally, the appellants counterclaimed against the respondent, alleging that they suffered damages when the respondent unreasonably refused to discharge the executions against the Properties.

By order of October 14, 2020, the motion judge granted summary judgment in favour of the respondent for the amounts owing under the mortgage loans, and orders of possession on one property owned by the appellants and the property owned by their acquaintance. These properties were sold under power of sale. The appellants’ claim that the respondent orally agreed to discharge three executions against the properties as part of refinancing arrangements was rejected. The motion judge accepted that by including the penalties, fees and other charges within the calculation of the effective annual interest rate it would exceed the criminal rate of interest under s. 347 of the Criminal Code. However, the respondent was only seeking repayment of the principal and interest under the mortgage loans at this point. The appellants moved to stay the orders for possession pending appeal of the order for summary judgment.

issues:

Have the appellants satisfied the three-part RJR-Macdonald test for granting a stay pending appeal?

holding:

Motion dismissed.

reasoning:

No. To obtain a stay of a judgment pending appeal, a moving party must meet the three-part RJR-Macdonald test for an interlocutory injunction:

(1) Is there a serious question to be determined on the appeal?
(2) Will the moving party suffer irreparable harm if the stay is denied?
(3) Which party does the balance of convenience favour if the stay is granted?

The Court emphasized that “these three criteria are not watertight compartments” and that the interests of justice must remain paramount.

Serious question to be determined

The threshold to meet this prong of the test is low, and turns on whether the issue on appeal is frivolous or vexatious. The appellants alleged the motion judge erred in law and fact in determining the total amount due under the mortgage loans. They did not dispute that the mortgage loans were in default and have been for several years. Even if the appellants succeeded on appeal in reducing the interest payable, their mortgage loans will still be in default, which triggers the respondent’s right to possession. There is thus no serious question on the appeal about the respondent’s right to possession of the properties.

Despite this, the appellants argued that that they were now ready, willing, and able to satisfy their monetary obligations, but their proposal would have required the respondent to subordinate or relinquish its mortgages on the properties. The respondent did not accept this. The existence of a proposal did not alter the conclusion that there was no serious question to be determined regarding the respondent’s right to possession.

Irreparable Harm

Irreparable harm is “harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other.” The appellants argued they would suffer irreparable harm if the stay was denied.

First, they argued that the respondent would have engaged in improvident sale of the properties, destroying the appellants’ equity and jeopardizing their ability to repay the respondent and third-party judgment creditors. The Court pointed out that in any sale, the mortgagee has a legal obligation to take reasonable precautions to obtain the true market value of the properties as of the date of sale. The appellants provided no evidence to support that the respondent would breach that legal obligation.

Second, the appellants argued that they would have no effective remedy against the respondent if they succeed on the appeal or counterclaims, because the respondent is a numbered company whose assets and financial condition are unknown. They feared the respondent’s assets might be depleted before the final determination of the appeal or counterclaims. Again, however, no evidence was provided to justify this fear.

Third, the appellants claimed that denying the stay would cause them to lose their right to redeem the mortgages and repurchase the properties. The Court rejected this argument. At the time of the hearing of the motion, the appellants had not sought to exercise their right to redeem the mortgages, nor did they provide any evidence to suggest that doing so in the foreseeable future was a realistic possibility.

Balance of Convenience

The Court did not accept the appellants’ submission that the balance of convenience favoured granting a stay. This factor overwhelmingly favoured the respondent. If the stay was denied, the appellants would lose their right to redeem the mortgages, but there was no realistic prospect of doing so in the foreseeable future. By contrast, the respondent loaned money to the appellants in exchange for mortgage security it sought to realize upon, after an extended period of default, and after the motion judge already ruled in its favour. In these circumstances, the respondent would have suffered greater harm if its right to possession was delayed any further.


Skof v. Bordeleau, 2020 ONCA 729

[Huscroft, Nordheimer and Harvison Young JJ.A.]

Counsel:

P. Champ, for the appellant

R.F. Caza and M.P. Dupont, for the respondents

Keywords: Labour Law, Collective Agreements, Regulated Professions, Police, Civil Procedure, Striking Pleadings, Jurisdiction, Judicial Review, Remedies, Declaratory Relief, Injunctive Relief, Damages, Police Services Act, R.S.O. 1990, c. P. 15, s. 89, Judicial Review Procedure Act, s. 8, Rules of Civil Procedure, Rule 21.01(3)(a), TeleZone Inc. v. Canada (Attorney General), 2008 ONCA 892, aff’d 2010 SCC 62, Weber v. Ontario Hydro, [1995] 2 S.C.R. 929, Piko v. Hudson’s Bay Co. (1998), 167 D.L.R. (4th) 479 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 23, Regina Police Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 14

facts:

The appellant is a police officer with the Ottawa Police Service, and also serves as President of the Ottawa Police Association (“OPA”). In 2019, the Ontario Provincial Police charged the appellant with certain offences under the Criminal Code. In response, the individual respondent, who is the chief of the Ottawa Police Service, suspended the appellant pursuant to s. 89 of the Police Services Act, R.S.O. 1990, c. P. 15 (“PSA”).

The appellant then began an action against the respondents claiming, inter alia, declaratory relief, injunctive relief and damages. The respondents brought a motion to dismiss the action on the basis that the Superior Court of Justice did not have jurisdiction to decide the claim, and asserted that the issues should be properly determined under the applicable collective agreement. The respondents also submitted in the alternative, if the collective agreement was not applicable to the dispute, the appellant should have sought relief under either the PSA, or by way of an application for judicial review.

The motion judge agreed with the respondents that the Superior Court of Justice did not have jurisdiction to decide the matter, and dismissed the action under Rule 21.01(3)(a) of the Rules of Civil Procedure.

issues:

(1) What is the proper test under Rule 21.01(3)(a)?
(2) Does the Superior Court of Justice have jurisdiction over the subject matter of the appellant’s action?

holding:

Appeal allowed.

reasoning:

(1) What is the proper test under r. 21.01(3)(a)?

The Court only addressed this issue as a brief introduction into its more substantive analysis. Nevertheless, the Court emphasized that the Superior Court of Justice is a court of inherent jurisdiction. As such, it has jurisdiction over every conceivable claim with two narrow exceptions. First, if the claim does not disclose a reasonable cause of action. Second, if the jurisdiction of the Superior Court of Justice has been expressly excluded by legislation or by an arbitral agreement (TeleZone Inc. v. Canada (Attorney General), 2008 ONCA 892, aff’d 2010 SCC 62).

The Court went on to note that some authorities have engaged in a debate on whether it is appropriate to use the “plain and obvious” test under Rule 21.01(3)(a). Instead of furthering that debate, the Court instead concluded that in order to find that the Superior Court of Justice does not have jurisdiction over a claim, it must be “clear and unequivocal” that the jurisdiction has been ousted, as per the TeleZone decision. The Court declined to provide any further analysis on this issue, and concluded its commentary by noting that the motion judge did not appear to approach the motion with the “clear and unequivocal” test in mind.

(2) Does the Superior Court of Justice have jurisdiction over the subject matter of the appellant’s motion?

Yes. As mentioned above, the respondents proposed three alternative modes of deciding the appellant’s action to the exclusion of the Superior Court of Justice’s jurisdiction: (i) the collective agreement, (ii) the Police Services Act, or (iii) by way of an application for judicial review. The Court addressed each of these proposed alternatives individually, and found that none precluded the appellant from bringing an action in the Superior Court of Justice.

(i) Collective Agreement
On this proposed alternative, the Court noted the motion judge’s critical error in finding that the appellant continued to be an employee of the Ottawa Police Service during his term as President of the OPA, and therefore remained subject to the collective agreement. While the appellant continued to be an employee of the Ottawa Police Service in the technical sense, the materials filed in the record clearly demonstrated that once the appellant was elected as President of the OPA, he was no longer subject to the collective agreement. Both the collective agreement itself, as well as a Memorandum of Agreement signed by the OPA and Ottawa Police Service, contained express provisions providing for this exception.

The respondents made an additional effort to avoid this result by arguing that the “essential character” of the claim is one covered by the collective agreement. The Court responded to this argument by invoking principles of case law from Weber v. Ontario Hydro, [1995] 2 S.C.R. 929 and Piko v. Hudson’s Bay Co. (1998), 167 D.L.R. (4th) 479 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 23. These cases stand for the proposition that notwithstanding the “exclusive jurisdictions” of arbitrators, a court of inherent jurisdiction retains residual discretionary powers to grant remedies not possessed by a statutory tribunal or arbitrator.

As a final point, the case of Regina Police Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 14, made it clear that a dispute raised by an employee does not necessarily bring such dispute within the scope of a collective agreement. The context of the dispute determines jurisdiction, not the identity of the parties.

(ii) Police Services Act
The motion judge found that the appellant “may fall under Part V of the PSA” but did not identify specifically how that fact provided any remedy to the appellant. The Court noted that there is no provision in the PSA that permits an officer to challenge a suspension ordered by a Chief of Police under s. 89. Further, there is no provision in the PSA that would authorize the Ontario Civilian Police Commission to grant relief under Part V of the PSA, contrary to the submission of the respondents.

As a result of the inapplicability of the collective agreement, in conjunction with the lack of any specific remedies provided by the PSA, the Court concluded that the only remedy for an officer in this instance is to seek relief through the court process.

(iii) Judicial Review
The conclusion that the only available avenue for relief is the court process raises the subsequent question of the proper forum for seeking relief from the court. Notwithstanding the lack of a definitive answer that the appellant’s dispute in fact constitutes a claim for judicial review, the Court concluded that there is nothing in the Judicial Review Procedure Act (“JRPA”) that precludes a party from seeking relief by way of an action. In fact, the JRPA specifically considers that possibility in s. 8, which provides that a judge from the Superior Court of Justice can deal with such actions summarily, or refer the action to Divisional Court to be treated as an application for judicial review.

Also critical to note is the differing range of remedies available in applications for judicial review, as opposed to actions in the Superior Court of Justice. In the former, unlike the latter, damages are not available. Therefore, given that there is no authority precluding the appellant’s action, and given that the appellant is seeking damages as a remedy, it is not “clear and unequivocal” why the Superior Court of Justice does not have the jurisdiction to address this dispute.


Sokoloff v Tru-Path Occupational Therapy Services Ltd, 2020 ONCA 0730

[Huscroft, Zarnett and Coroza JJ.A.]

Counsel:

S. Chaudhury and C. Senese, for the appellants

J.C. Lisus, A. Winton and V.A. Calina, for the respondents

Keywords: Torts, Defamation, Civil Procedure, Anti-SLAPP, Public Interest, Costs, Courts of Justice Act, ss. 137.1, 1704604 Ontario Ltd. v Pointes Protection Association, 2018 ONCA 0685, aff’d 2020 SCC 22, Grant v Torstar Corp., 2009 SCC 61, Platnick v. Bent, 2018 ONCA 0687, aff’d 2020 SCC 23, Hamilton v Open Window Bakery Ltd., 2004 SCC 9, Veneruzzo v Storey, 2018 ONCA 0688

facts:

The respondent in this appeal is the plaintiff to the main action and operates a law firm. As part of their business, the respondents would refer clients who needed occupational therapy services to the appellants. As part of this arrangement, the respondents would hold back settlement funds to ensure the appellants were paid all their fees not covered by clients’ insurers. Eventually, the respondents began to have issues with some of the fees and charges being made by the appellants and the business relationship deteriorated and was eventually terminated.

The appellant believed the respondent still owed them significant amounts of money under their arrangement. As part of their effort to get the respondent to pay the fees, the appellant took to protest outside the respondents’ offices, displaying signs with various messages relating to the fees and the conduct of the respondents. The respondents brought a defamation action against the appellants claiming damages arising from the appellant’s protests.

The appellant brought a motion under s. 137.1 of the Courts of Justice Act to dismiss the defamation suit. The motion judge dismissed the motion, holding that the appellant’s expression on the signs did not relate to a matter of public interest and so was not covered by s.137.1. Further, even it was a matter of public interest, the respondents’ interests were sufficiently impaired such that the action should move to trial to determine the suit on its merits. The motion judge awarded costs on a partial indemnity basis against the appellant, despite the default position in s. 137.1(8) that a successful responding party under a s. 137(1) motion is not entitled to costs.

The appellant appeals the motion judge’s decision to dismiss their motion and also seeks leave to appeal the costs award.

issues:

(1) Did the motion judge err in finding that the appellant’s expression did not concern a matter of public interest?

(2) Should leave to appeal costs be granted?

holding:

Appeal dismissed. Motion for leave to appeal costs dismissed.

reasoning:

(1) No. Section 137.1 motions are designed to prevent ‘SLAPP’ or Strategic Legislation Against Public Participation. SLAPP is litigation, or threats of litigation that are used to prevent a person from commenting on a matter of public interest. The Supreme Court of Canada has recognized several indicia of SLAPP, including: (1) “a history of the plaintiff using litigation or the threat of litigation to silence critics”; (2) “a financial or power imbalance that strongly favours the plaintiff”; (3) “a punitive or retributory purpose animating the plaintiff’s bringing of the claim”; and (4) “minimal or nominal damages suffered by the plaintiff”.

The statutory scheme of s. 137.1 is that under s. 137.1(3), a judge shall, subject to ss. (4) dismiss a proceeding against a person if the person can satisfy the judge that the impugned expression relates to a matter of public interest. Section 137.1 (4) provides that a judge shall not dismiss the proceeding if there is substantial merit to the proceedings, the moving party has no valid defence and the harm suffered or to be suffered by the responding party is sufficiently serious that the public interest favours allowing the proceeding rather than preventing it. In this sense, s. 137.1 acts as a screening provision for SLAPP proceedings.

The first step in an inquiry under s. 137.1 is to determine what the impugned expression was about, or what it pertained to (Pointes Protection) The motion judge found that while the public certainly has an interest in the conduct of lawyers and law firms, this was merely a case of how a lawyer chose to conduct their business and was a matter of contractual dispute. The motion judge drew particular attention to the methods used by the appellant in advancing this dispute, namely protesting, and also to the fact the appellant testified he was not concerned with the public interest, just with getting the money he felt he was owed. The appellant submitted that these two considerations do not properly form the test under s. 137.1 and thus the motion judge erred in considering them.

The Supreme Court of Canada has made clear that no qualitative evaluation of the expressions is to be made at this stage of the inquiry. The Supreme Court stated in Pointes Protection that “…it is not legally relevant whether the expression is desirable or deleterious, valuable or vexatious, or whether it helps or hampers the public interest”. The issue at this stage is the subject matter. If the subject matter is identified as public in nature, than a balancing act and qualitative assessment occur later in the analysis.

The Court of Appeal agreed with the appellant’s submissions that the motion judge’s consideration of the nature of expression and the appellant’s motivations in making them were irrelevant to the determination of the subject matter. This was an error. However, the Court of Appeal then went on to consider whether despite the error, the motion judge still appropriately classified the subject matter of the appellant’s expression as not public in nature.

The Court of Appeal found that the record before the motion judge amply supported that this was a private dispute. While the analysis under s. 137.1(3) should be both broad and purposive as well as generous and expansive, there is no one test to determine public interest and the expression is to be assessed as a whole and the question is whether “some segment of the community would have a genuine interest in receiving information on the subject” (Pointes Protection). The dispute in this case arose between two parties trying to determine what fees were owed between them and the appellant was trying to pressure the respondent into paying. The fact that the respondents were members of a regulated profession does not change the character of a private dispute over a contract.

The appellant submitted that because the respondent gave an undertaking to protect the amounts owed, the public interest was engaged in ensuring lawyers are held to their undertakings. The court dismissed this argument because the test under s. 137.1(3) is that the expression must relate to the public interest, not merely mention something that is of public interest. While the public undoubtedly has an interest in ensuring lawyers adhere to their undertakings, that was not what the expression related to. It related to a private dispute and only mentioned undertakings.

As the Court of Appeal found the motion judge correctly characterized the expression as not relating to the public interest, the protections of s. 137.1 were not engaged and analysis of the stages of the inquiry were not necessary. The appeal was dismissed.

(2) No. Under s. 137.1(8), the responding party to a s. 137.1 motion is not entitled to costs if successful, unless the judge determines that such an award is appropriate in the circumstances. Initially, the motion judge awarded costs to the respondent without reference to this section. Once alerted of the error, the motion judge invited parties to make submissions on costs. After reviewing the submissions, the motion judge awarded partial indemnity costs against the appellant, but reduced the amount from what the responding party requested to be more in line with what costs were incurred by the applicant.

The motion judge acknowledged that s. 137.1(8) had strong policy reasons behind it, namely ensuring that s. 137.1 motions are accessible and that litigation, or the threat thereof, is not used by powerful parties to silence the criticism or expression of other persons, that policy did not apply here. The parties in this dispute were both sophisticated parties and were both members of regulated professions. The appellants were trying to get their bills paid and chose to use allegedly defamatory language and use the ‘court of public opinion’ to win their dispute. This type of conduct is not what s. 137.1(8) is designed to protect.

Decisions as to cost awards are owed substantial deference and should not be granted unless there are strong grounds on which the appellate court could find an error in principle or that the cost award was plainly wrong. While the Court of Appeal acknowledged the motion judge’s analysis had certain flaws in the timeline of events, they were not sufficiently serious so as to justify appellate intervention. Leave to appeal costs was refused.


SHORT CIVIL DECISIONS

Elguindy v. Elguindy, 2020 ONCA 739

[Fairburn A.C.J.O., Roberts and Coroza JJ.A.]

Counsel:

A. E., acting in person

M. J. Bates, for the responding party

Keywords: Family Law, Civil Procedure, Costs, Leave to Appeal, Courts of Justice Act, RSO 1990, c. C.43, s. 133(b), Brad-Jay Investments Limited v. Village Developments Limited, 218 O.A.C. 315 (C.A.)

Haley v Stepan Canada Inc., 2020 ONCA 0737

[Fairburn A.C.J.O., Pepall and Roberts JJ.A.]

Counsel:

A. Moras, for the appellant

A. Potasky, for the respondents

Keywords: Civil Procedure, Summary Judgment, Genuine Issue Requiring Trial, Evidence, Onus of Proof, Burden of Proof, Expert Evidence

J.D.M. v T.L.L.M., 2020 ONCA 734

[Fairburn A.C.J.O., Pepall and Roberts JJ.A.]

Counsel:

M.H. Tweyman, for the appellant

J.L. Daboll, for the respondent

K. Bingham, for the Office of the Children’s Lawyer

Keywords: Family Law, Civil Procedure, Contempt Evidence, Standard of Proof

Jump To: Table of Contents | Civil Decisions | Short Civil Decisions

Good afternoon.

Please find below our summaries of the civil decisions of the Court of Appeal for the week of November 9, 2020.

Jesan Real Estate Ltd. v. Doyle deals with relief from forfeiture of deposits in respect of a “rent to own” occupancy agreement in the residential tenancy context. The tenant, who was self-represented on the appeal, arguably failed to properly exercise his option to purchase the property in accordance with the terms of the notice provisions in the agreement and, as a result, risked losing $35,000 in deposits. The owner/landlord brought an application for a declaration that occupancy agreement was null and void, and that the deposits paid had been forfeited. The landlord also sought a writ of possession to evict the tenant and his family.

The application judge found that the notice provisions to exercise the option contained in the occupancy agreement were ambiguous and that the tenant had substantially complied with them, and therefore had validly exercised the option to purchase the property. However, applying the common law of contract and the law of relief from forfeiture, the Court of Appeal reversed this decision, finding that the option to purchase had not been properly exercised. The Court only granted relief from forfeiture in respect of $2,625 of the total of $35,000 in deposits paid. There would appear to be no legislative protection of residential tenants who enter into “rent to own” agreements.

Regarding the landlord’s request for a writ of possession, the Court found that the landlord’s attempt in the occupancy agreement to contract out of the Residential Tenancies Act was void. The tenant was therefore entitled to the protections of the Residential Tenancies Act, and the Court refused to issue a writ of possession to the landlord. That aspect of the case was referred to the Landlord and Tenant Board, which has exclusive jurisdiction to deal with residential tenancies.

It seems to me that these types of “rent to own” agreements in the residential tenancy context have the potential to be predatory and to be open to abuse, particularly in the current economic environment in which the barrier to first-time home ownership is so high. Perhaps it would be advisable for the legislature to consider regulating the terms of such agreements, whether by way of amendments to the Residential Tenancies Act, the Consumer Protection Act or the introduction of some new piece of legislation.

Other topics covered this week included family law (marriage contracts and access/contempt), the enforcement of settlements, and vexatious litigants.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Jonas v Pacitto, 2020 ONCA 727

Keywords: Family Law, Marriage Contracts, Setting Aside ,Spousal Support, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), Family Law Act, R.S.O. 1990, c. F.3, s. 34(4), Spousal Support Guidelines, s.6, Federal Child Support Guidelines, SOR/97-175, s.19(1)(e), Dougherty v. Dougherty, 2008 ONCA 302, Miglin v. Miglin, 2003 SCC 24, Scheel v. Henkelman (2001), 52 O.R. (3d) 1 (C.A.), Rados v. Rados, 2019 ONCA 627, Ballanger v. Ballanger, 2020 ONCA 626, Slongo v. Slongo, 2017 ONCA 272

Kearns v Canadian Tire Corporation, 2020 ONCA 709

Keywords: Contracts, , Interpretation, Settlements, Consensus Ad Idem, Unilateral Mistake, Fraud, Wrongful Dismissal, Employment Law, Wrongful Dismissal, Civil Procedure, Summary Judgment, Rules of Civil Procedure, Rules 20.04(2.1) and (2.2), Oliveri v. Sherman, 2007 ONCA 491, Alampi v. Swartz (1964), 43 D.L.R. (2d) 11 (Ont. C.A.), Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

L v Ontario Civilian Police Commission, 2020 ONCA 720

Keywords: Civil Procedure, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1, Gao v Ontario (workplace Safety and Insurance Board), 2014 ONSC 6974, Scaduto v The Law Society of Upper Canada, 2015 ONCA 0733, R v Cunningham, 2010 SCC 10, R v 974649 Ontario Inc., 2001 SCC 81, Jonsson v Lymer, 2020 ABCA 167

Gagnon v Martyniuk, 2020 ONCA 708

Keywords: Family Law, Custody and Access, Civil Procedure, Contempt, Fresh Evidence, Family Law Rules, O. Reg 114/99, r.31(5), Les Services aux Enfants et Adultes de Prescott-Russell v. N.G. (2006), 82 O.R. (3d) 669 (C.A.), Godard v. Godard, 2015 ONCA 568, Hefkey v. Hefkey, 2013 ONCA 44

Jesan Real Estate Ltd. v Doyle, 2020 ONCA 714

Keywords: Contracts, Interpretation, Standard of Review, Real Property, Residential Tenancies, Occupancy Agreements, Rent to Own, Options to Purchase, Sufficiency of Notice, Bilateral Contracts, Substantial Non-Performance, Unilateral Contracts, Strict Performance, Time of the Essence, Deposits, Relief from Forfeiture, Unconscionability, Residential Tenancies Act, 2006, S.O. 2006, c. 17, ss. 3(1), s. 4, Sail Labrador Ltd. v. Navimar Corp., [1999] 1 S.C.R. 265, Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, Fuller v. Aphria Inc., 2020 ONCA 403, Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517, leave to appeal to S.C.C. refused, 38247, Ju v. Tahmasebi, 2020 ONCA 383, Azzarello v. Shawqi, 2019 ONCA 820, Stockloser v. Johnson, [1954] 1 Q.B. 476 (Eng. C.A.), Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, Matthews v. Algoma Timberlakes Corp., 2010 ONCA 468, leave to appeal refused, [2010] S.C.C.A. No. 369

Short Civil Decisions

Jog v Bank of Montreal, 2020 ONCA 721

Keywords: Civil Procedure, Summary Judgment, Procedural Fairness, Self-Represented Litigants

Central Lumber Limited v Gentile, 2020 ONCA 719

Keywords: Contracts, Construction Law, Breach of Trust, Costs, Construction Lien Act; R.S.O. 1990, c. C.30, s. 8 and s. 13

Jay-Pee Drycleaners Inc. v 2321324 Ontario Inc., 2020 ONCA 711

Keywords: Civil Procedure, Appeals, Extension of Time


CIVIL DECISIONS

Jonas v Pacitto, 2020 ONCA 727

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

M. Tubie, for the appellant

B. Tseitlin, for the respondent

Keywords: Family Law, Marriage Contracts, Setting Aside ,Spousal Support, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), Family Law Act, R.S.O. 1990, c. F.3, s. 34(4), Spousal Support Guidelines, s.6, Federal Child Support Guidelines, SOR/97-175, s.19(1)(e), Dougherty v. Dougherty, 2008 ONCA 302, Miglin v. Miglin, 2003 SCC 24, Scheel v. Henkelman (2001), 52 O.R. (3d) 1 (C.A.), Rados v. Rados, 2019 ONCA 627, Ballanger v. Ballanger, 2020 ONCA 626, Slongo v. Slongo, 2017 ONCA 272

facts:

The parties married in 2003 and separated in 2016. Prior to their marriage, they executed a Marriage Contract (the “Contract”) which provided that, upon dissolution of the marriage, neither party would be entitled to the property of the other, and the appellant waived any right to claim spousal support.

At trial, the parties provided different versions of how the Contract came into existence. The appellant contested the validity of the Contract on the basis that she was vulnerable as a result of a number of factors. The respondent gave a different account and could not recall discussing the Contract with the appellant. He testified that he advised the appellant to get legal advice and to have the Contract translated and signed.

Based on supporting documentation relating to the execution of the Contract, the trial judge determined that the Contract was valid and binding as it applied to the division of property. However, he found that the appellant’s financial circumstances at the time of trial warranted some award of spousal support. He ordered minimal support based on the appellant’s annual income of $15,564, and the respondent’s declared annual income of $24,226 totalling a lump sum payment of $40,000. The appellant appealed, arguing that the Contract should have been invalidated in its entirety and that the trial judge failed to impute further income from the respondent’s rental properties.

issues:

Did the trial judge err:

  1. by failing to invalidate the Contract in its entirety?
  2. in the amount of support awarded?
holding:

Appeal allowed in part.

reasoning:
  1. Did the trial judge err by failing to invalidate the Contract in its entirety?

No. The appellant submitted that she had satisfied the requirements to set aside the Contract in its entirety. She contended that the trial judge failed to give sufficient weight to all relevant considerations. In particular, a combination of factors – including her lack of proficiency in the English language, the lack of independent legal advice, her economic dependency on the respondent, and the prospect of having to return to Hungary – created vulnerabilities that undermined the validity of the Contract. The appellant further submitted that the trial judge failed to take into account the fact that the Contract was not negotiated; instead, it was imposed upon her. Lastly, she contended that the trial judge placed too much weight on the execution documents pertaining to the Contract.

The Court held that the appellant’s position could not succeed based on the trial judge’s findings. He addressed each of the issues raised on appeal and the appellant failed to adduce sufficient evidence to satisfy the burden of proof required to set aside the Contract. Given the competing accounts between the appellant and the respondent, he was required to make credibility findings. The trial judge did not find that the appellant was vulnerable to the extent that it undermined the Contract she had entered into. He found that she made a number of choices, including not to seek legal advice. Although the appellant claimed that the Contract was imposed upon her, there was no evidence that she attempted to negotiate a more favourable arrangement.

The appellant submitted that the trial judge placed too much weight on the documents that pertained to the execution of the Contract. However, the Court found that this amounted to a challenge to the trial judge’s factual findings. A trial judge’s findings of fact, including credibility assessments, are entitled to substantial deference on appeal, especially in family law cases.

2. Did the trial judge err in the amount of the lump sum award?

Yes. The appellant disputed the trial judge’s calculation of the respondent’s income, contending that the trial judge ought to have imputed further income from the respondent’s rental properties. Although appellate courts should afford deference to support orders made by trial judges, the unique circumstances of this case required intervention. Although the appellant had the onus of demonstrating why income should be imputed to the respondent, and in what amount, the respondent was required to make proper disclosure of all sources of income, but failed to do so.

Section 6 of the Spousal Support Guidelines provides that the starting point for determining income for spousal support purposes is the definition of income under the Federal Child Support Guidelines. Section 19(1)(e) of those Guidelines provide that the court may impute income where the “spouse’s property is not reasonably utilized to generate income”. The Court stated that although the imputation of income is discretionary, the facts of this case cried out for this factor to be considered. The Court held that the trial judge erred in his assessment of the amount of spousal support by not at least considering imputing additional income to the respondent. This was a fairly long marriage, of which the appellant worked hard at home while the respondent’s properties increased significantly in value, to nearly $5 million at the time of trial.

The Court noted that the respondent was over 80 years old and may reasonably be able to generate significantly more income from his properties, beyond that included in his declared income of $24,226. The Court also noted the appellant was over 60 years old, and would be in need of support for many years, as she had no real employment prospects and an annual income that was below the poverty line.

Because of the time that had passed between the trial and the hearing of the appeal (almost three years), the Court decided that it was not well-positioned to decide the matter afresh. Accordingly, the Court remitted the case back to the Superior Court of Justice for a focused hearing on the imputation of income to the respondent for the purposes of calculating the award of spousal support. Both parties were ordered to provide that court with current property valuations as well as income statements.


Kearns v Canadian Tire Corporation, Limited, 2020 ONCA 709

[Lauwers, Brown and Nordheimer JJ.A.]

Counsel:

S.F. Gleave, for the appellant

M.A. Fisher, for the respondent

Keywords: Contracts, , Interpretation, Settlements, Consensus Ad Idem, Unilateral Mistake, Fraud, Wrongful Dismissal, Employment Law, Wrongful Dismissal, Civil Procedure, Summary Judgment, Rules of Civil Procedure, Rules 20.04(2.1) and (2.2), Oliveri v. Sherman, 2007 ONCA 491, Alampi v. Swartz (1964), 43 D.L.R. (2d) 11 (Ont. C.A.), Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

The appellant terminated the employment of the respondent in July 2018. In both July 2018 and September 2018, the appellant made certain termination-related payments to the respondent. In October 2018, the respondent commenced a wrongful dismissal action against the appellant. In November 2018, just prior to the parties attending mediation, the appellant then made a third termination-related payment to the respondent (the “November Payment”).

Mediation was successful, and the minutes of settlement (the “Minutes”) provided that the appellant would pay the respondent $150,000 “in addition to amounts already paid”. However, the representatives of the appellant who attended the mediation were not aware of the November Payment. When those representatives later learned of the November Payment, they sought to deduct the amount from the amount agreed to in the Minutes.

The respondent then brought a motion to enforce the Minutes, which was granted by the motion judge.

issues:
  1. Did the motion judge err in the interpretation of the Minutes?
  2. Did the motion judge err by deciding the matter without a trial?
holding:

Appeal dismissed.

reasoning:

(1) Did the motion judge err in the interpretation of the Minutes?

No. The motion judge applied Olivieri v. Sherman, 2007 ONCA 491, the leading authority on the enforcement of minutes of settlement. In his analysis, the motion judge made five key findings.

First, the Minutes included all terms essential to the formation of a contract. Second, there was no evidence to support the contention that the respondent knew that the appellant was mistaken when it signed the Minutes. Third, the appellant failed to demonstrate that there was fraud or something akin to fraud on the part of the respondent. Fourth, the Minutes constituted a valid and binding contract. Finally, the circumstances did not support the exercise of discretion to decline to enforce the Minutes.

In accordance with these findings, the Court concluded that a number of factors prevented the acceptance of the appellant’s submission that the Minutes resulted from a unilateral mistake that justified their rectification. In order to succeed on such a submission, one must establish that a mistake occurred and there was fraud, or the equivalent of fraud, on the part of the respondent. In other words, the appellant would need to demonstrate that, at the time the agreement was executed, the respondent knew that the appellant misunderstood its significance and did nothing to correct their mistaken understanding (Alampi v. Swartz (1964), 43 D.L.R. (2d) 11 (Ont. C.A.), Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56; 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273).

These factors relied on by the Court included the fact that the November Payment was documented on the payroll records of the appellant, and that the appellant’s representatives who attended the mediation deposed that they had reviewed these records. Also, the appellant’s argument ignored a key principle of contractual interpretation. Namely, it suggested that the motion judge was required to consider the subjective understandings of the appellant’s representatives. The Court rejected this suggestion by applying Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, which stands for the proposition that the only context that need be considered is the objective evidence of the background facts at the time of the contract’s execution.

As a final point, the Court noted that the appellant’s submission contradicted its own statement of issues filed at the mediation. In that document, the appellant acknowledged that it had provided the respondent with “thirty (30) weeks’ pay in lieu of additional notice”, which was an express component of the November Payment. This offered further support to the conclusion that there was no fraud or bad faith on the part of the respondent, i.e. that he must have known that the appellant misunderstood the significance of the Minutes.

(2) Did the motion judge err by deciding the matter without a trial?

No. The Court acknowledged the enhanced powers available to a motion judge on a motion to enforce the minutes of a settlement under Rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure. The Court saw no reason to interfere with the motion judge’s conclusions, and that these conclusions sufficiently disposed of the need to consider the enhanced powers available under Rule 20. The Court agreed with the motion judge’s conclusion that the factual record was complete, and that there were no genuine issues of credibility that required a trial.


L v Ontario Civilian Police Commission, 2020 ONCA 720

[Pepall, Benotto and Coroza JJ.A.]

Counsel:

M.S. Dunn, for the intervener the Attorney General of Ontario

No one appearing for the applicant

No one appearing for the respondent

Keywords: Civil Procedure, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1, Gao v Ontario (workplace Safety and Insurance Board), 2014 ONSC 6974, Scaduto v The Law Society of Upper Canada, 2015 ONCA 0733, R v Cunningham, 2010 SCC 10, R v 974649 Ontario Inc., 2001 SCC 81, Jonsson v Lymer, 2020 ABCA 167

facts:

This appeal concerned an order dismissing a proceeding pursuant to Rule 2.1.01(1) of the Rules of Civil Procedure. In 2006, members of the Toronto Police service entered the home of the appellant in order to execute a search warrant. The police mistook the appellant’s disabled brother for the appellant and in the course of trying to arrest him, tasered him. The brother was taken to hospital and was later released.

Since these events in 2006, the appellant and his family have embarked on a lengthy course of litigation against the Toronto Police Service, the respondents and several other parties, all without success. In May 2019, the appellant accused a judge of being corrupt and other improprieties, for which he was convicted of contempt. The Superior Court issued a restraining order preventing the appellant from bringing any further proceedings before any court in Ontario (except the Court of Appeal) without the permission of a case management judge.

In December of 2019, the appellant sought to bring his fourth action against the respondent. The request was denied and in February 2020 the appellant’s application for mandamus was also denied on the basis that it was found to be frivolous.

The appellant appealed the order refusing mandamus. In July 2020, the appellant sought to once again bring an action against the respondent, which was once again refused by the case management judge. The Attorney General of Ontario intervened in September 2020 to request that the appellant’s appeal be determined pursuant to Rule 2.1 and that it be dismissed as frivolous, vexatious and an abuse of process.

issues:
  1. Should the appeal be dismissed pursuant to Rule 2.1 of the Rules of Civil Procedure?
holding:

Appeal dismissed

reasoning:

(1) Yes

Rule 2.1 was introduced to help courts deal with an increasingly frequent problem, vexatious and abusive litigants. The rule allows a court to dismiss a proceeding summarily on its own initiative where the proceeding is vexatious, frivolous or otherwise abusive on its face.

The Court of Appeal proceeded to review several articles and decisions on the hallmarks of vexatious litigants, including that they are often self-represented, refuse to stop at all costs, exhaust every right of appeal and always seek leave to appeal when required, make unintelligible arguments, irrelevant submissions and have distinctive writing styles. The articles and jurisprudence also noted the damage these litigants do to the justice system as a whole, in that they increase cost for all parties, bring the administration of justice into disrepute and disproportionately impact court staff, who often receive the brunt of the abuse with little recourse against such litigants.

Two further concerns addressed by the Court were that not all self-represented parties are vexatious, and that even a vexatious litigant may have a legitimate issue for the court to consider.

However, the Court of Appeal found that this was not not such a situation. They found that the appellant exhibited several of the hallmark identifiers of a vexatious litigant and that his appeal was without any prospect of success and was clearly vexatious, frivolous and an abuse of process on its face. The appeal was thus dismissed.

The Court of Appeal then turned its consideration how to balance the need to protect the justice system from vexatious litigants with access to justice concerns. In this case, the appellant, despite a restraining order requiring leave to commence any proceedings, continued to bring proceedings regularly. The Court considered the issue of what further steps could be taken to restrain his behaviour while also allowing him to access the courts if a legitimate cause of action ever arose.

The Court has the ability to determine its own process, even though it is a statutory court (R. v. Cunningham). The Court considered whether to require the appellant to only access the courts through a lawyer in the future. While this practice has been used in other courts, it must be used sparingly, as requiring legal counsel can unduly increase costs and prevent parties from accessing the courts (Jonsson v. Lymer). However, as Chief Justice Strathy remarked in his 2020 Opening of the Courts speech, access to justice requires reinvesting in legal aid, rather than providing litigants with ‘do-it-yourself’ litigation kits. Self-represented litigants inevitably strain judicial resources and increase costs. “In order to be fair, and to avoid unreasonable delay, particularly but not exclusively where the state is a litigant, both parties must have competent legal representation.” (Strathy, CJO – 2020 Opening of the Courts speech)

Ultimately, the Court held that the appellant represented an extreme case that called for exceptional relief. The Court ordered that the appellant cannot interact with the Court of Appeal in any matter arising from the 2006 events except through lawyer.


Gagnon v Martyniuk, 2020 ONCA 708

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

Z. Tufman and G.A.P. Tufman, for the appellant

Osipov, for the respondent

Keywords: Family Law, Custody and Access, Civil Procedure, Contempt, Fresh Evidence, Family Law Rules, O. Reg 114/99, r.31(5), Les Services aux Enfants et Adultes de Prescott-Russell v. N.G. (2006), 82 O.R. (3d) 669 (C.A.), Godard v. Godard, 2015 ONCA 568, Hefkey v. Hefkey, 2013 ONCA 44

facts:

The parties had three children and were often in conflict over the respondent’s access to the children. Earlier proceedings in July 2010 resulted in a final order. The respondent alleged that the appellant increasingly ignored this order. The respondent commenced a new proceeding in September 2017, seeking increased access to his children. At a case conference in February 2018, McDermot J. made a consent order (“the Order”) that addressed access issues and required the appellant to obtain the respondent’s written consent before she could take the children out of the country. There were compliance issues with this order almost immediately. On a number of occasions, the parenting exchanges of the children did not happen, or they were late. The appellant also took the children out of the country without obtaining the respondent’s written consent.

The respondent initiated contempt proceedings in March 2019. The motion judge found the appellant in contempt for failing to comply with the consent order. She was subsequently sentenced to a non-custodial penalty which required the appellant to participate in a cooperative parenting program or face a fine for non-attendance. The appellant appealed and submitted that the motion judge made errors at both stages of the proceedings. She also brought a motion to adduce fresh evidence.

issues:
  1. Did the motion judge err in making her order?
  2. Should the fresh evidence be accepted?
holding:

Appeal dismissed.

reasoning:

(1) Did the motion judge err in the interpretation of the Minutes?

  1. Did the motion judge err in making her order? No.

The Contempt Finding

The Court held that the motion judge made no error in finding the appellant in contempt. The appellant submitted that the trial judge ought not to have responded to a high conflict family law dispute with a contempt finding. She further submitted that the motion judge should not have conducted the hearing solely on the basis of affidavit evidence. Rather, a trial was necessary to establish contempt beyond a reasonable doubt. Finally, the appellant submitted that the trial judge failed to appreciate that contempt is a remedy of last resort and must be used sparingly. The Court rejected these submissions.

The motion judge carefully instructed herself on the law of contempt and the proof required to make a finding of contempt, as demonstrated by her reasons. Additionally, the Court noted that the motion judge specifically recognized that contempt is a remedy of last resort that must be used sparingly. The appellant submitted that, although the motion judge repeated this principle, she did not give effect to it, and there is no evidence that she considered any alternatives to contempt. However, as the motion judge found, this case involved multiple, wilful breaches of court orders, which she rightly found were flagrant. Accordingly, the Court held that it was within the discretion of the motion judge to resort to contempt as the only appropriate option in this case.

The Penalty Imposed

The Court held that the penalty imposed by the motion judge was reasonable. The appellant argued that ordering her to pay a fine to the respondent when she fails to attend the parenting program in a timely manner was not a proper exercise of discretion. She submitted that this penalty aggravated a highly antagonistic situation, and did not take into consideration the best interests of the children. The Court was not persuaded by this submission.

Rule 31(5) of the Family Law Rules provides judges with wide discretion with respect to penalties for contempt. The motion judge demonstrated great restraint in penalizing the appellant’s flagrant contempt. The fine structure she imposed was designed to compel the appellant to participate in the cooperative parenting program. The order also required the respondent to attend, given that the program was “cooperative” in nature. The fines were meant to avoid wasting the respondent’s time. The Court held that there was nothing about this aspect of the order that could be considered contrary to the best interests of the children.

  1. Should the fresh evidence be accepted?

No. The Court refused to admit the fresh evidence. The fresh evidence mostly related to events that followed the contempt proceedings. The appellant relied on the fresh evidence to demonstrate that there were good reasons why the children did not wish to interact with their father, and that she was always acting in the best interests of her children.

The Court determined that the fresh evidence could have no effect on the motion judge’s contempt findings. The issues raised by the proposed fresh evidence were best addressed in the Superior Court in the context of a Motion to Change the consent order, which motion was currently before that court.


Jesan Real Estate Ltd. v Doyle, 2020 ONCA 714

[Feldman, Fairburn and Nordheimer JJ.A.]

Counsel:

P. Baxi, for the appellant

S.D., acting in person

Keywords: Contracts, Interpretation, Standard of Review, Real Property, Residential Tenancies, Occupancy Agreements, Rent to Own, Options to Purchase, Sufficiency of Notice, Bilateral Contracts, Substantial Non-Performance, Unilateral Contracts, Strict Performance, Time of the Essence, Deposits, Relief from Forfeiture, Unconscionability, Residential Tenancies Act, 2006, S.O. 2006, c. 17, ss. 3(1), s. 4, Sail Labrador Ltd. v. Navimar Corp., [1999] 1 S.C.R. 265, Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, Fuller v. Aphria Inc., 2020 ONCA 403, Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517, leave to appeal to S.C.C. refused, 38247, Ju v. Tahmasebi, 2020 ONCA 383, Azzarello v. Shawqi, 2019 ONCA 820, Stockloser v. Johnson, [1954] 1 Q.B. 476 (Eng. C.A.), Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, Matthews v. Algoma Timberlakes Corp., 2010 ONCA 468, leave to appeal refused, [2010] S.C.C.A. No. 369

facts:

The appellant rented a home to the respondent pursuant to an Occupancy Agreement (the “OA”). Related to the OA, the parties also entered into an Option to Purchase Agreement (the “OPA”), whereby the respondent could exercise an option to purchase the property at the end of the rental term. The OPA provided that, as long as the respondent complied with the terms of the OA, he would have the option to purchase the property for the price of $489,000.

The respondent agreed to pay a deposit of $20,000 upon signing the OPA. If the option to purchase was exercised, this deposit would be credited to the purchase price. If the option was not exercised, the deposit would be forfeited. The OPA also provided for a monthly credit of $375 towards the purchase price for each month that the monthly occupancy payment was paid when due. The monthly option credit was similarly non-refundable in the event that the option to purchase was not exercised.

The option to purchase under the OPA was intended to be exercised by way of written notice, provided by registered mail or personal service, accompanied by an additional deposit of $1,000. The OPA also provided for time limits for providing the notice to exercise the option. Further, the OPA contemplated that in the event financing could not be obtained for the purchase, then the OA could be extended for an additional 6-month term.

On February 3, 2017, the respondent’s agent emailed an offer to purchase for the agreed price of $489,000. The $1,000 additional deposit required under the OPA was not included. The appellant refused the offer. The respondent’s agent then advised the respondent to make a second offer for more money, and a second offer was made for $550,000, together with the deposits previously provided for ($20,000, plus $375 from each lease payment that had been made on time, plus adding the $1,000 deposit), plus an additional $500 in order to “round up” the down payment amount to $35,000. The appellant accepted the second offer. However, the respondent ran into difficulties obtaining financing. When the respondent failed to close on the agreed date, his lawyer advised the appellant that the respondent was exercising his right to extend the OPA by 6 months.

The appellant responded by arguing that the February 3 offer sent by email was not valid notice under the OPA, and that in any event the OPA had already expired. The respondent proceeded by registering a caution on the property and continuing to reside there and make monthly rent payments as per the OA.

The appellant commenced this litigation by seeking a declaration that the OA and OPA were null and void, and for leave to issue a writ of possession. The application judge reached the conclusion that the parties continued to be operating under the OPA, and that the appellant failed to comply with its obligation to sell the property for the option price of $489,000.

In reaching this conclusion, the application judge relied on the Supreme Court of Canada decision in Sail Labrador Ltd. v. Navimar Corp., [1999] 1 S.C.R. 265. The application judge found that the OA and OPA constituted a bilateral contract, and that the legal result of this characterization was that only “substantial non-performance” of the terms of the contract by the respondent would be sufficient to disentitle him to performance by the appellant. The application judge defined “substantial non-performance” as requiring a finding that the respondent’s failure in performance substantially deprived the appellant of what it had bargained for.

After reviewing the facts, the application judge concluded none of the alleged breaches of the option conditions amounted to substantial non-performance.

issues:
  1. Was the appellant entitled to reject the exercise of the option to purchase because the notice did not comply with the OPA?
  2. Was the second agreement to purchase the property for $550,000 a new contract or an extension of the OPA?
  3. Is the deposit to be forfeited to the appellant or is the respondent entitled to any relief from forfeiture?
  4. Is the appellant entitled to an order for a writ of possession?
holding:

Appeal allowed.

reasoning:

(1) Was the appellant entitled to reject the exercise of the option to purchase because the notice did not comply with the OPA?

Yes. The Court did not disagree with the application judge’s analysis of Sail, and the enforceability of bilateral contracts as requiring substantial performance (as opposed to unilateral contracts, which require strict performance). However, the Court added in the qualifier mentioned at para. 50 of Sail, which states that the substantial non-performance doctrine is always subject to the express terms of the contract.

Contrary to the application judge’s finding that there were no clauses in the OPA that had the effect of requiring strict performance of the conditions, the Court noted several. Of particular importance to the Court’s reasoning was the inclusion of two non-waiver clauses, as well a “time of the essence clause”.

The standard of review for the interpretation of contracts is set out in Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53. While appellate courts are required to be deferential on questions of fact and questions of mixed fact and law, no deference is owed to errors of law. Since the application judge did not take into account the specific clauses in the contract that contradicted her findings, she was found to commit an error of law in her interpretation of the contract (Fuller v. Aphria Inc., 2020 ONCA 403, Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517, leave to appeal to S.C.C. refused, 38247).

The Court proceeded to undertake its own analysis of the circumstances in regard to three instances of non-compliance with the OPA: the timing of the notice, the method of delivery, and the $1,000 deposit.

Related to the timing of the notice, the application judge had found that there was some ambiguity under the agreement, as it seemed to provide for both a 60-day and 90-day notice period for exercising the option. The Court acknowledged that this could potentially give rise to ambiguity in some cases. However, in this case, the notice was only given 25 days before the end of the rental term, and therefore no ambiguity existed in fact. Further, the inclusion of the “time of the essence” clause reserved the appellant’s right to insist upon strict compliance.

Regarding the method of delivery, as stated above, the OPA stipulated that notice was to be provided by either registered mail or personal service. The Court acknowledged that no address was provided in the agreement, therefore service by registered mail was not possible. However, the Court maintained that personal service was still possible, and that, had the notice been delivered on time, the respondent could have made the argument that a proof of receipt by email would have constituted personal service.

Lastly, the Court disagreed with the application judge’s finding that the $1,000 could be paid after the OA had expired because of its ambiguous timing requirements. In the Court’s analysis of the agreement, the option was only validly exercised upon receipt of written notice and a $1,000 deposit 60 days prior to the end of the term of the OA. Further, even if the timing was ambiguous, the Court noted that when an agreement does not expressly reference a time for performance, the law will imply a term that it must be performed within a reasonable time (Ju v. Tahmasebi, 2020 ONCA 383). The fact that the respondent did not finally pay the $1,000 deposit required until after the second agreement was reached meant that this could not be payment within a reasonable time.

In sum, the application judge erred by failing to analyze the deficiencies in compliance in the context of the specific contractual requirements of non-waiver and the “time of the essence” provisions. Due to the respondent’s failure to exercise the option in accordance with the requirements of the OPA, the Court concluded that the appellant was entitled to reject the notice of intent.

(2) Was the second agreement to purchase the property for $550,000 a new contract or an extension of the OPA?

The second agreement was a new contract. The fact that the second agreement included a deposit which was comprised of the same components contemplated by the OPA led the application judge to view the parties’ treatment of this deposit as evidence that the OPA remained in effect.

However, once again, the Court found that the application judge failed to consider the entirety of the agreement, specifically the inclusion of an “Expiration of Option” provision in the OPA. This provision stipulated that in the event the option to purchase was not exercised, the agreement expires. Given that the Court already reached the conclusion that the option was not exercised properly in accordance with the terms of the agreement, then the agreement could not possibly be considered to remain in effect. As a result of this finding, the Court concluded that the respondent was not entitled to the 6-month extension provided for in the OPA.

(3) Is the deposit to be forfeited to the appellant or is the respondent entitled to any relief from forfeiture?

The appellant was entitled to retain some of the deposits, but the respondent was also entitled to partial relief from forfeiture. In circumstances where a purchaser fails to close an agreement of purchase and sale, the vendor is entitled to retain the deposit regardless of whether he or she suffers a loss. However, this principle is always subject to the court’s ability to grant the equitable remedy of relief from forfeiture (Azzarello v. Shawqi, 2019 ONCA 820). Courts in Ontario follow the same test for relief of forfeiture as prescribed by the English Court of Appeal decision of Stockloser v. Johnson, [1954] 1 Q.B. 476 (Eng. C.A.). First, a court must consider whether the forfeited deposit was out of all proportion to the damages suffered. Second, the court must consider whether it would be unconscionable for the seller to retain the deposit.

In this case, the Court applied Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282 for the proposition that numerous factors, aside from the mere size of the deposit, should be considered as indicia of unconscionability. The Court concluded that certain amounts, namely, the initial $20,000 deposit as well as the monthly credit payments of $375 up to the time of the late attempt to exercise the initial option to purchase, should be forfeited because the agreement that the respondent entered into expressly provided for their forfeiture in the event that the transaction did not close. Therefore, there was no basis for finding unconscionability in respect of those amounts.

However, the Court did find that the respondent ought to be granted relief from forfeiture of the additional deposit funds paid pursuant to the second agreement ($1,500 plus $1,125 in total further monthly credit payments). Critical to this conclusion was the fact that the appellant suffered no loss due to the fact that the value of the property had increased, and the fact that the appellant chose to make no effort to facilitate the respondent securing the financing necessary to close the transaction. In these circumstances, it was unconscionable to allow the appellant to retain those additional deposits.

(4) Is the appellant entitled to an order for a writ of possession?

The Court declined to reach a conclusion on this issue due to the fact that the Landlord and Tenant Board has the exclusive jurisdiction to determine applications between landlords and tenants under the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “RTA”). However, the Court did note that the apparent handwritten addition to the OA’s “Applicable Law” provision that “this is not a tenancy under the Landlord and Tenant Act of Ontario” was invalid.

The Court did not comment on the validity of the handwritten addition itself in light of it lacking any accompanying signatures or initials. However, it was mentioned that notwithstanding any such amendment, the OA remains governed by the RTA, as it is not possible to contract out of the provisions of the RTA (ss. 3(1) and s. 4, Matthews v. Algoma Timberlakes Corp., 2010 ONCA 468, leave to appeal refused, [2010] S.C.C.A. No. 369).


SHORT CIVIL DECISIONS

Jog v Bank of Montreal, 2020 ONCA 0721

[Feldman, Simmons and Harvison Young JJ.A.]

Counsel:

C.J., acting in person

McNeill-Keller and J. Lindner, for the respondent

Keywords: Civil Procedure, Summary Judgment, Procedural Fairness, Self-Represented Litigants

Central Lumber Limited v Gentile, 2020 ONCA 719

[Feldman, Simmons and Harvison Young JJ.A.]

Counsel:

L. Akazaki for the appellant, Gentile

Long and L. Kung for the respondents, Central Lumber Limited

Keywords: Contracts, Construction Law, Breach of Trust, Costs, Construction Lien Act; R.S.O. 1990, c. C.30, s. 8 and s. 13

Jay-Pee Drycleaners v 2321324 Ontario Inc., 2020 ONCA 711

[van Rensburg J.A. (Motions Judge)]

Counsel:

Byeongheon (Jay-Pee Drycleaners Inc.) acting for in person

J. Bosada for the moving party/respondent, 2321324 Ontario Inc.

Keywords: Civil Procedure, Appeals, Extension of Time


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.