COURT OF APPEAL SUMMARIES (JANUARY 23, 2023 – JANUARY 27, 2023)

By John Polyzogopoulos on January 29, 2023

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Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of January 23, 2023. It was a very busy week.

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The Court in Rabin v. 2490918 Ontario Inc. considered an appeal from a tenant concerning s.23 of the Commercial Tenancies Act and whether consent to an assignment had been unreasonably withheld by their landlord. The application judge had found that the appellant had waived the requirement under the lease and that the appellant had failed to show that the respondent had either refused to consent to the assignment or unreasonably withheld its consent. The Court found that the application judge had incorrectly addressed and applied the doctrine of waiver, which was not raised by the parties. In applying the doctrine, the application judge erred in construing delay (the landlord’s failure to provide a timely response to the tenant’s request for consent) as a waiver. Ultimately, the Court found that the landlord had unreasonably withheld consent when they failed to provide a response to the request for consent within the 15-day time period contemplated under the lease.

In Costanza v. Dejardins Financial Security Life Assurance Company, the appellant insurer appealed from the judgment of the application judge declaring that the life insurance policy of which the respondent, as beneficiary, was valid, subsisting and binding on the insurer. The issues raised in the appeal concerned the duty of an insured to disclose material facts to their insurer and incontestability once a policy has been in force for two years or more during the life of the insured. The Court dismissed the appeal and declined to admit fresh evidence on the basis that the fresh evidence could not reasonably be expected to have affected the result of the application. The Court found that, while the application judge erred in disregarding admissions by witnesses that the deceased was convicted of an assault which could lead to invalidating the policy, the Court found no error in the application judge’s finding that even if accepting the conviction had been proven on the application, the insurer had failed to establish that the deceased had the intent required for civil fraud at the time he completed the application for insurance. The Court held that, in absence of palpable and overriding error, the finding by the application judge was entitled to deference.

In Continental Currency Exchange Canada Inc. v. Sprott, the Court upheld the motion judge’s decision to grant the respondents a stay of proceedings due to the appellants’ access to documents and emails belonging to the respondents that were confidential and privileged. The Court held that the motion judge correctly applied the test from Celanese Canada Inc. v. Murray Demolition Corp., to assess whether privileged and confidential information attributable to a solicitor and client relationship will prejudice the party possessing the privilege. The Court found that the motion judge’s conclusion that the appellants’ access to privileged information regarding the litigation was a serious risk to the respondents’ privilege and the appropriate remedy was a stay of proceedings.

There were two subsidized housing judicial review appeals (MacKenzie v. Ottawa Community Housing Corporation and Ali v. Peel). Both appeals were dismissed and the initial decisions of the governmental authorities were upheld.
Other topics covered this week included granting an application for intervenor status in a case involving habeas corpus, an appeal of a dismissal of a motion to strike out pleadings, a trial decision determining issues of civil fraud and conspiracy and a refusal of leave to amend pleadings.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Corrigan v. Ontario, 2023 ONCA 39

Keywords: Crown Liability, Civil Procedure, Striking Pleadings, Nullity, Notice of Claim, Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Proceedings Against the Crown Act, R.S.O. 1990, c. P.27, Human Rights Code, R.S.O. 1990, c. H.19, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b), Rules of Civil Procedure, r. 19.02(1)(b), Ball v. Donais (1993), 13 O.R. (3d) 322 (C.A.), Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Zeus v. Spick, [2000] O.J. No. 3758 (S.C.), aff’d [2001] O.J. No. 2848 (C.A.), Beardsley v. Ontario (2001), 57 O.R. (3d) 1 (C.A.), Miguna v. Ontario (Attorney General) (2005), 262 D.L.R. (4th) 222 (Ont. C.A.), Noddle v. The Ontario Ministry of Health, 2019 ONSC 7337, Aba-Alkhail v. University of Ottawa, 2012 HRTO 656, Grogan v. Ontario (Human Rights Tribunal), 2012 ONSC 319

Wong v. Li, 2023 ONCA 42

Keywords: Torts, Fraud, Misrepresentation, Breach of Fiduciary Duty, Law Society of Upper Canada v. Oscar Choi-Wah Wong, 2012 ONLSHP 0180, Law Society of Upper Canada v. Oscar Choi-Wah Wong, 2013 ONLSAP 0031, Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, F.H. v. McDougall, 2008 SCC 53, R. v. G.F., 2021 SCC 20, R. v. Dinardo, 2008 SCC 24

Benbella v. The National Dental Examining Board of Canada , 2023 ONCA 56

Keywords: Administrative Law, Regulated Professions, Civil Procedure, Appeals, Standard of Review, Correctness, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, r. 21.01(1)(b), McCreight v. Canada (Attorney General), 2013 ONCA 483, Potis Holdings Ltd. v. The Law Society of Upper Canada, 2019 ONCA 618

Ali v. Peel (Regional Municipality), 2023 ONCA 41

Keywords: Administrative Law, Judicial Review, Standard of Review, Reasonableness, Remedies, Housing Services Act, 2011, S.O. 2011, c. 6, Sched. 1, O. Reg. 367/11, s. 1(1)-1(2), s.47, s.48, s.54, s.58, Ontario (Health) v. Association of Ontario Midwives, 2022 ONCA 458, Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, Turkiewicz (Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1, 2022 ONCA 780, Briggs v. Durham (Police Services Board), 2022 ONCA 823, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65.

Horani v. Manulife Financial Corporation, 2023 ONCA 51

Keywords: Torts, Occupier’s Liability, Slip and Fall, Civil Procedure, Amending Pleadings, Appeals, Jurisdiction, Final or Interlocutory, Rules of Civil Procedure, rr. 26.01, 48.04(1), Hendrickson v. Kallio, [1932] O.R. 675 (C.A), Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Denton v. Jones, 13 O.R. (2d) 419 (S.C.), Ontario (Securities Commission) v. McLaughlin, 2009 ONCA 280, 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42, Trillium Power Wind Corp. v. Ontario, 2019 ONSC 6905, Hill v. Ortho Pharmaceutical (Canada) Ltd., [1992] O.J. No. 1740, LML Investments Inc. v Choi (2007), 85 O.R. (3d) 351 (S.C.), Jetport v Jones Brown Inc., 2013 ONSC 2740, Lugen Corporation v Starbucks Coffee Canada Inc., 2014 ONSC 7141, Denis v Lalonde, 2016 ONSC 5960, Secure Solutions Inc. v. Smiths Detection Toronto Ltd., 2017 ONSC 2401, A.G.C. Mechanical Structural Security Inc. v. Rizzo, 2013 ONSC 1316, BNL Entertainment Inc. v. Ricketts, 2015 ONSC 1737, Fruitland Juices Inc. v. Custom Farm Service Inc. et al., 2012 ONSC 4902, Cromb v. Bouwmeester, 2014 ONSC 5318, Alofs v. Blake, Cassels & Graydon LLP, 2017 ONSC 950, Chokler v. FCA Canada Inc. 2017 ONSC 4494, Conway v. Law Society of Upper Canada, [2016] O.J. No. 451, Gloucester Organization Inc. v. Canadian Newsletter Managers Inc. (1995), 21 O.R. (3d) 753, Ginkel v. East Asia, 2010 ONSC 905, Whiten v Pilot Insurance Co., [2002] S.C.J. No. 19, Family Delicatessen Ltd. V. London (City), 2006 CanLII 5135 (Ont. C.A), John Sopinka, Mark Gelowitz and David W. Rankin, The Conduct of an Appeal, 5th ed. (Toronto: Lexis Nexis, 2022)

MacKenzie v. Ottawa Community Housing Corporation, 2023 ONCA 43

Keywords: Administrative Law, Judicial Review, Standard of Review, Reasonableness, Statutory Interpretation, Housing Services Act, 2011, S.O. 2011, c. 6, Sched. 1, Part V, s 38, s 42(1), s 43(1), s 45, s 46(1), s 52(1), Ontario Regulation 367/11, made under the Housing Services Act, 2011, S.O. 2011, c. 6, Sched. 1, Sched. 2, s 28(1), s 28(2), Ontario (Health) v. Association of Ontario Midwives, 2022 ONCA 458, Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36Turkiewicz (Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1, 2022 ONCA 780, Briggs v. Durham (Police Services Board), 2022 ONCA 823, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Ali v. Peel (Regional Municipality), 2023 ONCA 41

McGrath v. Joy , 2023 ONCA 46

Keywords: Wills and Estates, Testamentary Capacity, Holographic Wills, Codicils, Civil Procedure, Appeals, Motions, Reconsideration, Succession Law Reform Act, R.S.O. 1990, c. S.26, s. 6, Rules of Civil Procedure, rr. 37.14(6), 57.03(1) and 59.06(2), Pastore v. Aviva Canada Inc., 2012 ONCA 887, Mujagic v. Kamps, 2015 ONCA 360, Meridian Credit Union Limited v. Baig, 2016 ONCA 942, First Elgin Mills Developments Inc. v. Romandale Farms Limited, 2015 ONCA 54, Antonyuk v. Antonyuk, 2022 ONCA 145, Midland Resources Holding Limited v. Shtaif, 2018 ONCA 743

Sigma Capital Management Group Inc. v. Benzer Limited , 2023 ONCA 65

Keywords:Security for Costs, Legal Costs, Settlement Funds, Contractual Interpretation, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Edelstein v. Monteleone, 2017 ONSC 2717

Costanza v. Dejardins Financial Security Life Assurance Company , 2023 ONCA 54

Keywords: Insurance, Duty to Disclose, Civil Fraud, Evidence, Standard of Review, Insurance Act, R.S.O. 1990, c. I.8, s. 178, s. 183(1), ss. 183(3), s. 184(2), 189.1, Evidence Act, R.S.O. 1990, c. E.23, s. 22.1, Gregory v. Jolley (2001), 54 O.R. (3d) 481 (C.A.), Sagl v. Chubb Insurance Company of Canada, 2009 ONCA 388, Palmer v. The Queen, [1980] 1 S.C.R. 759, F.(K.) v. White (2001), 53 O.R. (3d) 391 (C.A.), Andreadis v. Pinto (2009), 98 O.R. (3d) 701 (S.C.J.), Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Frohlich v. Ferraro, 2017 ONCA 978

Dorsey v. Canada (Attorney General) , 2023 ONCA 64

Keywords: Constitutional Law, Habeas Corpus, Deprivation of Liberty, Intervenor Status, Friend of the Court, Public Importance, Habeas Corpus Act, R.S.O. 1990, c. H.1, Canadian Charter of Rights and Freedoms, ss. 7, 9, 10(c), and 12, Corrections and Conditional Release Act, S.C. 1992, c. 20, ss. 28, 29, Rules of Civil Procedure, r. 13, Dumas v. Leclerc Institute, [1986] 2 S.C.R. 459, Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd. (1990), 74 O.R. (2d) 164 (C.A.), Chippewas of Nawash Unceded First Nation v. Canada (AG), 2022 ONCA 755, Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 29, Public Safety and Emergency Preparedness) v. Chhina, 2019 SCC 29, Foster v. West, 2021 ONCA 263, Jones v. Tsige (2011), 106 O.R. (3d) 721 (C.A.), Huang v. Fraser Hillary’s Limited, 2018 ONCA 277, R. v. Doering, 2021 ONCA 924, Ontario (Natural Resources and Forestry) v. South Bruce Peninsula (Town), 2021 ONCA 749

Rabin v. 2490918 Ontario Inc. , 2023 ONCA 49

Keywords:Contracts, Commercial Leases, Assignment of Lease, Consent to Assignment, Withholding Consent, Reasonableness, Landlord and Tenant, Waiver, s. 23, Commercial Tenancies Act, R.S.O. 1990, c. L.7, Iroquois Falls Power Corporation v. Ontario Electricity Financial Corporation, 2016 ONCA 271, Labatt Brewing Company Limited v. NHL Enterprises Canada, L.P., 2011 ONCA 511, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490, 1455202 Ontario Inc. v. Welbow Holdings Ltd. (2003), 33 B.L.R. (3d) 163 (Ont. S.C.), 2197088 Ontario Limited v. Cadogan Corporation, 2018 ONSC 3070, 6791971 Canada Inc. v. Eli Messica, 2020 ONSC 1642, Zellers Inc. v. Brad-Jay Investments Ltd., [2002] O.J. No. 4100 (Ont. S.C.), Jo-Emma Restaurants Ltd. v. A. Merkur and Sons Ltd. (1989), 7 R.P.R. (2d) 298 (Ont. S.C.), Tradedge Inc. (Shoeless Joe’s) v. Tri-Novo Group Inc., 84 R.P.R. (4th) 84 (Ont. S.C.), Quickie Convenience Stores Corp. v. Parkland Fuel Corporation, 2020 ONCA 453, Ruth Sullivan, Sullivan on the Construction of Statutes, 7th ed. (Toronto: LexisNexis Canada, 2022)

National Industries Inc. v. Kirkwood , 2023 ONCA 63

Keywords:Civil Procedure, Amending Pleadings, Motion to Strike, Jurisdiction, Res Judicata, Issue Estoppel, Abuse of Process, Plain and Obvious Test, Rules of Civil Procedure, rr. 21.01, 25.11, 26.01, Toronto (City) v. CUPE., Local 79, 2003 SCC 63, Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (C.A.), Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, McIntosh v. Parent, [1924] 4 D.L.R. 420 (Ont. C.A.), Transamerica Life Canada Inc. v. ING Canada Inc. (2003), 68 O.R. (3d) 457 (C.A.), F.H. v. McDougall, 2008 SCC 53

Continental Currency Exchange Canada Inc. v. Sprott , 2023 ONCA 61

Keywords:Solicitor-Client Privilege, Litigation Privilege, Breach of Privilege, Stay of Proceedings, Presumed Prejudice, Rebuttable Presumption, Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235, Etco Financial Corp. v. Ontario, [1999] O.J. No 3658 (S.C.), R. v. Babos, 2014 SCC 16, Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, R. v. Bruce Power Inc., 2009 ONCA 573, Goodis v. Ontario (Ministry of Correctional Services), 2006 SCC 31, O’Dea v. O’Dea, 2019 NLSC 206, Morneault v. Dynacorp Acquisition Ltd., 2006 ABQB 831, Dixon v. Lindsay, 2021 ONSC 1360

Short Civil Decisions

5000933 Ontario Inc. v. Mahmood , 2023 ONCA 58

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Breach, O. Reg. 332/12 Ontario Building Code

Bitaxis Estate v. Bitaxis, 2023 ONCA 66

Keywords: Wills and Estates, Certificates of Appointment of Estate Trustee with a Will, Testamentary Capacity, Civil Procedure, Notices of Objection, Neuberger v. York, 2016 ONCA 191, Johnson v. Johnson, 2022 ONCA 682

Austin v. House , 2023 ONCA 55

Keywords: Family Law, Custody and Access, Parenting Time, Decision-Making Responsibility, Variation, Civil Procedure, Motions to Change, s. 30 Assessment Motions, Costs, Appeals, Security for Costs, Summary Judgment, Vexatious Litigants, Fresh Evidence, Children’s Law Reform Act, R.S.O. 1990, c. C.12., s.30, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 140, Palmer v. The Queen, [1980] 1 S.C.R. 759, Barendregt v. Grebliunas, 2022 SCC 22, 469 D.L.R. (4th) 1

Lalande v. Lalande, 2023 ONCA 68

Keywords: Family Law, Financial Disclosure, Duty to Disclose, Non-Compliance, Motion to Strike, Roberts v. Roberts, 2015 ONCA 450, Family Law Rules, O. Reg. 114/99, r.1(8).

Hategan v. Frederiksen, 2023 ONCA 57

Keywords: Perfecting Appeal, Extension of Time, Delay, Setting aside Registrar’s Dismissal, Prejudice, Oliveira v. Oliveira, 2022 ONCA 218, Issai v. Rosenzweig, 2011 ONCA 112

Ducharme v. Thibodeau, 2023 ONCA 60

Keywords: Wills and Estate, Notice of Objection, Withdrawal of Notice of Objection, Standing, Costs, Substantial Indemnity.

CIVIL DECISIONS

Corrigan v. Ontario , 2023 ONCA 39

[Doherty, Zarnett and Sossin JJ.A]

Counsel:

H. Mackay and H. McIvor, for the appellant
K.C., acting in person

facts:

In May 2020, the respondent commenced an action against the Crown, including a claim for damages. The respondent did not comply with the terms of s. 18(1) of the Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7 (“CLPA”), which provided that no proceeding that includes a claim for damages may be brought against the Crown unless, at least 60 days before the commencement of the proceeding, the claimant serves a specified form of notice on the Crown. S. 18(6) of the CLPA provided that an action commenced without complying with the notice requirements is a nullity “from the time the proceeding is brought”.
In July 2020, Crown counsel requested the respondent discontinue her action due to non-compliance, but the respondent could start a new action 60 days after the discontinuance of the existing one, as the Crown would treat the service of the claim issued in May 2020 as the prior notice required under the CLPA. In August 2021, the respondent wrote to Crown counsel advising that she had brought a motion for default judgment and had been instructed to serve the motion on the Crown. Crown counsel advised that a motion to strike the claim would be brought at the same time as the motion for default judgment.

The motion judge found that the respondent failed to comply with the CLPA requirements, but dismissed the motion on the ground that the Crown had delayed in bringing its motion. The Crown appealed from the dismissal of its motion to have the respondent’s statement of claim struck out as a nullity due to the failure of the respondent to comply with provisions of the CLPA.

issues:

Did the motion judge err in not striking the action?

holding:

Appeal allowed.

reasoning:

Yes.
Prior to the enactment of the CLPA, s. 7(1) of the Proceedings Against the Crown Act, provided that no action could be brought against the Crown unless prior notice of 60 days was given. It was consistently held under that legislation that proper notice was a precondition to a claim in damages against the Crown, that this requirement could not be abridged, and that an action commenced without proper prior notice was a nullity. It was also held that the requirement could not be waived.
The Court stated that the same approach should be followed under the CLPA. The Court found the motion judge’s conclusion that the Crown was not entitled to have the action struck as a nullity for delay rewrites the legislation. It conditions the Crown’s right to have the action treated as a nullity on the timing of the motion, a condition not found in the text. The Court further stated that this reasoning introduces a notion of waiver by delay that is inconsistent with the judicial interpretation of the prior legislation, which held that its requirements could not be abridged or waived.
The respondent argued that the motion judge was right to dismiss the Crown’s motion because she had noted the Crown in default, and r. 19.02(1)(b) of the Rules of Civil Procedure prevents a defendant who has been noted from bringing a motion without leave. The Court rejected this argument. The procedural rule relied on by the respondent cannot trump the clear effect of the CLPA provision that required the Court to treat the action as a nullity. Moreover, s. 25 of the CLPA states that the Crown may not be noted in default without leave of the court, obtained on a motion made with notice to the Crown, and there was no evidence such leave was obtained.
The respondent also argued that an effect of the noting in default was that the defendant was deemed to admit the allegations in the claim. Since r. 21.01(1)(a), under which the Crown moved, is available only for questions of law that arise from the pleadings, and the only pleading was the claim, there was no basis to consider facts surrounding the failure to give notice. The Court disagreed, stating that a motion under r. 21.01(1)(a) permits evidence to be admitted at the discretion of the court. The Court concluded that the motion judge properly exercised his discretion to consider such evidence.
The respondent also argued that estoppel should operate to prevent the Crown from asserting that the action is a nullity. The respondent had brought an application to the Human Rights Tribunal of Ontario (“HRTO”) which was dismissed because of the existence of the Superior Court action. Section 34(11) of the Human Rights Code, bars an HRTO application where there is an existing civil action dealing with the same alleged rights infringement. The respondent argued that the Crown got the benefit of the existence of the action for the purpose of the dismissal of the HRTO application and should be estopped from claiming the action was a nullity.
The Court was not satisfied that estoppel could have any effect on the operation of the CLPA given s. 18(6). Even assuming it could operate, the Court was not satisfied it would operate here. The motion judge made no findings that the respondent changed her position based on anything the Crown said to her or to anyone else, and he found the Crown acted in good faith throughout. The Court stated that the record was clear that the Crown unequivocally told the respondent that it considered the existing action against it to be a nullity. The Court noted that it was the respondent who not only persisted in maintaining the action but also commenced concurrent HRTO proceedings which created the overlap in proceedings. The Court struck out the statement of claim as against the Crown as a nullity.

Wong v. Li, 2023 ONCA 42

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

Counsel:

O.C. Wong, acting in person
D. Lawson, for the respondents

Keywords:Torts, Fraud, Misrepresentation, Breach of Fiduciary Duty, Law Society of Upper Canada v. Oscar Choi-Wah Wong, 2012 ONLSHP 0180, Law Society of Upper Canada v. Oscar Choi-Wah Wong, 2013 ONLSAP 0031, Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, F.H. v. McDougall, 2008 SCC 53, R. v. G.F., 2021 SCC 20, R. v. Dinardo, 2008 SCC 24

facts:

The appellant OW is a real estate lawyer and the respondents JL and JY worked for OW as real estate clerks. The respondent RH is JL’s husband. From about 2003 to 2010, both JL and JY worked for OW and were paid a percentage of fees collected from each real estate transaction. In 2007, the Law Society of Upper Canada (“Law Society”), now the Law Society of Ontario, began investigating OW’s practice and commenced an application against OW based on his failure to supervise 24 transactions involving 12 properties. The transactions contained some irregularities, including a failure to advise lending institutions of financing details and a failure to obtain consent when acting for the lender, vendor, and purchaser on the same transaction.
OW admitted engaging in professional misconduct, including a failure to adequately supervise his staff, and the Law Society Hearing Panel (“Hearing Panel”) initially suspended OW for four months and ordered $10,000 in costs. Upon the Law Society’s appeal, the costs award was increased to $50,000 but the Hearing Panel dismissed the Law Society’s appeal on the length of the OW’s suspension, finding that although there was an egregious degree of abdication, which was systemic and troubling, the abdication was not total.
The appellant commenced an action against JL, JY, and RH alleging fraud, deceit/fraudulent misrepresentation, conspiracy, and breach of fiduciary duty relating to 14 transactions pertaining to 6 properties. The appellant alleged that the respondents used his law office as a platform to promote and facilitate fraudulent schemes and conspiracies.
At trial, the appellant had no independent recollection of the events concerning the processing of the impugned transactions. The respondents presented their interpretation of events and claimed they had done nothing wrong. The trial judge found for the respondents and dismissed all OW’s claims against JL, JY, and RH.

issues:

(1) Did the trial judge err in his application of the test for civil fraud?
(2) Did the trial judge err in failing to adequately address the respondent JL’s credibility?
(3) Did the trial judge err in not finding that the appellant was wronged by JL on the basis of equitable fraud?

holding:

Appeal dismissed.

reasoning:

(1) No.
The Court held that the trial judge correctly applied the test for civil fraud as set out in Bruno Appliance and Furniture, Inc. v. Hryniak after reviewing the transactions relating to the six properties in great detail. The elements of civil fraud are: (i) a false representation made by the defendant; (ii) some level of knowledge (or recklessness) of the representation on the part of the defendant; (iii) the false representation caused the plaintiff to act; and (iv) the plaintiff’s actions resulted in a loss.
The Court noted that the trial judge found that some of the respondents’ actions were disconcerting and their goal appeared to be inducing lenders to advance funds without full awareness of the circumstances; however, no false statements or misrepresentations were made to OW. There was no evidence that the respondent JL failed to respond to inquiries, lied, failed to provide information, or provided half-truths to OW. In two of the more problematic transactions, the respondent RH provided loans to a purchaser to assist with the purchaser’s deposit obligations and there was a notation in the client’s ledger that the loan was a deposit from the purchaser’s lawyer. Though problematic, there was no evidence connecting the loan to JL and no evidence that she made a false misrepresentation pertaining to the transactions and thus the claim failed on this basis.
The Court held that although the transactions each had questionable features, the trial judge found no direct evidence that the appellant was defrauded by the respondents and the appellant failed to identify an overriding and palpable error in the trial judge’s analysis.
(2) No.
The Court held that although the trial judge could have provided more detailed reasons on his acceptance of JL’s evidence, insufficiency in this regard did not compromise the Court’s ability to meaningfully review the trial judge’s conclusions. A trial judge’s credibility findings are owed considerable deference on appeal and any deficiencies in respect of a trial judge’s credibility findings will rarely merit appellate intervention.
(3) No.
The Court upheld the trial judge’s finding that JL did not engage in unconscionable conduct related to the appellant. The Court’s holding on this issue was based on the appellant’s failure to identify any legal error or a palpable and overriding error relating to the claim that the trial judge erred in not finding that JL engaged in equitable fraud as against OW.

Benbella v. The National Dental Examining Board of Canada, 2023 ONCA 56

[Gillese, Tulloch and Roberts JJ.A.]

Counsel:

Y. Hameed, for the appellant
M. Song and S. Coutu, for the respondent

facts:

The appellant was a dental school graduate. He was required to pass the certification process administered by the respondent, the National Dental Examining Board of Canada, to qualify for admission to the profession of dentistry in Canada. This certification process had two components: a written exam and an Objective Structured Clinical Examination (“OSCE”).
The appellant attempted the certification process in November 2018. He passed the OSCE but failed the written exam. He re-wrote the written exam in March 2019 but again failed.
The respondent’s by-laws entitled the appellant to have his written exams manually remarked. They were, but the results did not change. The appellant then sought to appeal the results of his written exam. He cited the respondent’s by-laws in support of his claim that he was entitled to a “Special Appeal” before the respondent’s Appeal Committee.

The “Special Appeal” rule provided that “The Appeals Committee has the power to establish procedures for the conduct of Appeals or Special Appeals. In making a determination, a panel will determine that the Appeal be upheld or dismissed, or make such other determinations that it deems reasonable and just.” The respondent denied the appellant’s request for a Special Appeal. It advised him that the only appeal available to him was the manual rescoring, which had already been done for both of his written exams. In response, the appellant commenced legal action against the respondent. The respondent filed a motion to strike the application, which was subsequently granted. The motion judge ordered that the application be struck in its entirety pursuant to r. 21.01(1)(b) of the Rules of Civil Procedure as it disclosed no reasonable cause of action.

issues:

Did the trial judge err in granting a motion to strike?

holding:

Appeal dismissed.

reasoning:

No.
The Court confirmed that the standard of review is correctness and held that the motion judge correctly found it was plain and obvious that the appellant’s application disclosed no reasonable cause of action.

The Court determined that the provisions of the by-laws must be read as a whole. The Court found that the appeal mechanisms are clearly stated in the by-laws. Nowhere within these provisions were there any stated substantive grounds of appeal from the failure of a written examination.

Accordingly, the Court agreed with the interpretation of the motion judge that when the by-laws are read as a whole, the appeal provisions must be distinguished from the clearly procedural “Special Appeals” provisions, which led to the ultimate conclusion that there is no right to a “Special Appeal”. Thus, the Court held that there was no substantive right of appeal and the injunctive relief sought was rightly dismissed.

Ali v. Peel (Regional Municipality), 2023 ONCA 41

[Zarnett, Coroza and Favreau JJ.A.]]

Counsel:

A. Rosenbluth and R. Thompson, for the appellant
J. Bruce, for the respondent

facts:

The appellant appealed an order of the Divisional Court dismissing her application for judicial review of a decision by the respondent, the Regional Municipality of Peel (the “Region”). In its decision, the Region denied the appellant’s request to be given special priority status on the waitlist for subsidized housing in Peel.

The appellant, who worked as a live-in caregiver, had sought special priority status because her employer had abused her. The appellant relied on a regulatory provision, made under the Housing Services Act, 2011, that gave special priority status for subsidized housing to people who have been abused. The provision defined abuse as including controlling behaviour, and included in the list of possible abusers those on whom people applying for subsidized housing are financially dependent.

The Region found that the appellant met the criteria for rent-geared-to-income housing, but denied her request to be placed on the special priority status list. The Region denied the appellant’s special priority status because she was not in a familial relationship with her abuser and because her economic dependence on her abuser ended with the end of the employment relationship. The Divisional Court held that the Region’s decision was reasonable because it was consistent with the relevant statutory scheme. The Divisional Court also noted that the Region’s mandate was to allocate scarce resources amongst people with competing interests.

issues:

(1) What is the appropriate standard of review?
(2) Was the Region’s decision reasonable?
(3) Did the divisional Court err in inserting its own rationale for denying the appellants request to be placed on the special priority list?

holding:

Appeal dismissed.

reasoning:

(1) The Reasonableness Standard is appropriate.
On an appeal from a decision of the Divisional Court on judicial review, the Court stated that it was to decide whether the Divisional Court identified the appropriate standard of review and applied it correctly. The Court held that the Divisional Court applied a reasonableness standard of review to the Region’s decision. The Court, citing Canada (Minister of Citizenship and Immigration) v Vavilov, held that there was a presumption that the reasonableness standard applied unless a statute provided otherwise or a correctness standard is required by the rule of law. The Court noted no exceptions applied and the reasonableness standard was appropriate.

(2) Yes.
Prior to determining whether the Region’s decision was reasonable, the Court reviewed the statutory scheme under the Housing Services Act. The Court found that section 47(1) of the Housing Services Act required the service manager to create “a system for selecting households from those waiting for rent-geared-to-income assistance in the housing projects in the service manager’s service area.” Section 47(2) of the Act specified that the system is to include “priority rules for households waiting for rent-geared-to-income assistance”.
The Court found that the Regulation sets out the provincial eligibility rules for rent-geared-to income, including for placement on the special priority list. Section 54(1) of the Regulation specified that:(1) A household is eligible to be included in the special priority household category if,
(a) a member of the household has been abused by another individual;
(b) the abusing individual is or was living with the abused member or is sponsoring the abused member as an immigrant; and
(c) the abused member intends to live permanently apart from the abusing individual.
The Court noted that Section 1(2) prescribed the list of people who can be considered as abusers, and includes a person on whom the applicant is “financially dependent”:
For the purpose of the definition of “abuse” in subsection (1), abuse is done by any of the following persons against an individual: […]
3. A person on whom the individual is emotionally, physically or financially dependent. [Emphasis added.]
The Court stated that section 54(2) of the Regulation set out the conditions under which a person no longer living with an abuser can apply to be placed on the special priority list. This included where the application was made within three months of the person no longer living with the abuser.

The appellant argued that the Region’s decision was unreasonable because 1) the Region improperly stated that the special priority list was limited to familial relationships; and 2) there was no basis for excluding employer/employee relationships from the category of financial dependence in the definition of abuser in s. 1(2) of the Regulation. The Court rejected these arguments.

First, the Court held that it was evident that the Region’s reason for rejecting the appellant’s request to be placed on the special priority list was not restricted to the fact that she was not in a familial relationship with her abuser. Rather, the Court held that the Region also rejected the appellant’s request because it decided that employer/employee relationships are not the types of relationships that are meant to be given special priority status. The Court noted that in both the original decision and the appeal decision, the Region did refer to the appellant not being in a familial relationship with her abuser. The Court found that the Region had explained that the appellant was in an employee/employer relationship with him, and that this disqualified her from being placed on the special priority list.

The Court did not accept the appellant’s argument that the Region’s own policy improperly limits inclusion on the special priority list to people in a familial relationship with their abuser. While the title of the Region’s policy refers to “victims of family violence”, the Court held that the policy as a whole referred to all categories of potential abusers listed in s. 1(2) of the Regulation and did not restrict eligibility to circumstances where the abuser and applicant are in a familial relationship.

Second, the Court rejected the appellant’s argument that the reference to financial dependence in s. 1(2) of the Regulation included employer/employee relationships. The Court held that in making this argument, the appellant improperly invited the Court to undertake its own interpretation of the Regulation. The Court noted that it was not the task of the Court to decide how the terms “financially dependent” should be interpreted and applied, but rather whether the Region’s interpretation of those terms was reasonable in the context of the legislative scheme and the facts of the case.

The Court held that the terms “financially dependent” could not be considered in isolation but must be reviewed in the context of the legislative scheme as a whole. The Region was responsible for administering subsidized housing, including the special priority list. The Court held that the Region understood the historical context and purpose of special priority status. Thus, the Court found that it was reasonable for the Region to decide that an employee/employer relationship was not the type of financial dependence contemplated by the Regulation which would allow for placement on the special priority list.

(3) No.
The appellant argued that the Divisional Court improperly amplified the Region’s decision by providing a rationale for the decision that the Region itself did not provide.
The Court held that the Court’s role is to step into the shoes of the Divisional Court and review whether the Region’s decision was reasonable. In light of that, the Court had no concerns with the Divisional Court’s decision and found that it correctly applied the reasonableness standard of review in the circumstances of the case. The Court held that the Divisional Court did not give a different rationale or arrive at the outcome through a different analytical route than the Region. Rather, the Court found that the Divisional Court gave legislative and factual context to the Region’s reasons for denying the appellant’s request.

Horani v. Manulife Financial Corporation, 2023 ONCA 51

[Zarnett, Thorburn and Copeland JJ.A]

Counsel:

G.D.E. Adair, for the appellants
D.A. Zuber and N. Searles, for the respondent

facts:

The appellant tripped and fell at his workplace on August 5, 2014. The Statement of Claim was issued on November 20, 2015, and amended on January 19, 2017 to name a litigation guardian. The action was set down for trial on April 27, 2018. Pretrial conferences were held on January 7, 2021 and March 22, 2022. On both occasions, counsel for the parties advised the pre-trial judge that “pleadings were in order”. Due to the COVID-19 pandemic, trial was pushed from March 2021 to May 16, 2022.

On April 1, 2022, roughly six and a half years after the action was commenced, and six weeks before the 32-day trial was to commence, the appellants sought leave to (1) add a claim for punitive damages in the amount of $2 million, and (2) increase the amount of damages claimed from $4 million to $7 million pursuant to Rule 48.04(1) of the Rules of Civil Procedure. The motion judge dismissed the appellants’ request, but the trial date was lost due to the appeal.

The appellant submitted that (1) the motion judge’s order was a final order that entitled them to bring their appeal to the Court, and that (2) the motion judge erred in law as “there was neither prejudice nor presumed prejudice causally related or flowing from the proposed amendment” that was non-compensable, as any delay or extra work that would result from the amendment were matters compensable in costs.

issues:

(1) Was the decision of the motion judge a final order?
(2) Did the motion judge err in refusing leave to amend the appellants’ pleadings?

holding:

Appeal dismissed.

reasoning:

(1) Yes.

The Court stated that an appeal of the motion judge’s decision was properly before the Court because the order finally disposed of the appellants’ substantive right to claim punitive damages. In particular, orders refusing to permit a party to amend a pleading to advance an additional substantive claim or defence are final orders.

(2) No.

The Court stated that rule 48.04(1) provides that a party who has set an action down for trial shall not initiate or continue any motion or discovery without leave of the court. Under Rule 26.01, the court shall grant leave to amend a pleading unless it would result in prejudice that “could not be compensated for by costs or an adjournment”. However, after an action has been set down for trial, some courts have required the moving party to show “a substantial or unexpected change in circumstances such that a refusal to make an order under Rule 48.04(1) would be manifestly unjust”. Others courts have determined that leave be granted if the moving party can demonstrate that “the interlocutory step is necessary in the interests of justice”. Without deciding which test is correct, the Court held that the appeal must be dismissed because the motion judge properly determined that allowing the appellants’ proposed amendment would result in non-compensable prejudice.

The Court noted that, while the onus to prove actual prejudice lies with the responding party, the onus to rebut presumed prejudice arising from delay lies with the moving party. At some point, the delay will be so lengthy and the justification so inadequate that prejudice will be presumed. The motion judge made several findings in this regard, including: (1) the new claim included new facts and legal arguments, (2) responding to the new claim would require further production, discovery, and preparation, and (3) the appellants provided no explanation for the inordinate delay or any change in circumstances since the trial record was served. Based on these findings, the motion judge held that prejudice was presumed and that the appellants failed to rebut this presumption.

The Court found that the motion judge did not err in her analysis and the appellants offered no clear reason for the delay at the motion and no explanation was offered on appeal other than counsel’s inattention. Further, the Court held that the motion judge correctly found that the prejudice was causally connected to the proposed amendment and was not compensable in costs because it would change the respondent’s litigation strategy and potentially jeopardize an already delayed trial date. Finally, the Court noted that, although the motion judge did permit the amendment to the amount of regular damages, she offered a balanced approach and there was no evidence that she acted arbitrarily or capriciously in exercising her discretion to deny leave to bring a motion to add a claim for punitive damages.

MacKenzie v. Ottawa Community Housing Corporation, 2023 ONCA 43

[Zarnett, Coroza and Favreau JJ.A.]

Counsel:

L. Bisgould, S. Chapman and A. Rosenbluth, for the appellant

G. Langlais, for the respondent City of Ottawa

G. Cormier, for the respondent Ottawa Community Housing Corporation

J. Esmonde, D. Bisnar and A. Hanif, for the intervener Canadian Centre for Housing Rights (formerly the Centre for Equality Rights in Accommodation)

facts:

The appellant, CM, was eligible for rent-geared-to-oncome pursuant to the Housing Services Act (the “Act”) and occupied a unit administered by the respondent, Ottawa Community Housing Corporation, with his two daughters. Recipients of the rent-geared-to-income subsidy are subject to annual review to ensure their continued eligibility, one requirement for eligibility is that recipients must report changes to their household composition within 31 days of the change and must not be absent from their unit for more than 60 consecutive days or 90 days in a year.

In 2018, CM faced criminal charges and his bail conditions required him to live with his surety, who was his mother, and prohibited him from having contact with his two daughters or residing or being alone with anyone under 16 years of age. CM’s daughters were placed in the case of the Children’s Aid Society. CM did not inform the respondents of his bail conditions and the resulting household changes.

In 2019, the respondents terminated CM’s rent-geared-to-income subsidy because he failed to report the change to his household composition within 31 days and because his household had been absent from the unit for more than 60 consecutive days.

CM requested a review of the respondents’ decision and a hearing was held before a three-member panel, which dismissed CM’s review request (the “Review Decision”). In the Review Decision, the Review Panel found that CM failed to report the household change within the required 31 days and was absent from the unit for more than 60 consecutive days, contrary to the eligibility requirements. CM argued that the respondents’ decision was not reasonable because he still resided in the unit during the day but spent the nights at his surety’s house, and further that the removal of the children was only temporary. The Panel concluded that visiting his unit and storing his food and belongings there did not amount to living there as CM was legally bound to reside at his surety’s residence. The Panel further held that a household occupying a unit for non-residential purposes is contrary to the purpose of the legislation, which is to provide rent subsidies to eligible households. Finally, there were no exceptional circumstances that would have justified CM’s failure to report the change in his household composition or his extended absence from the unit. As a result, CM was required to pay full rent for his unit which, at the time of the decision, was an increase from $222 to $1,279 per month.

CM appealed the Review Decision to the Divisional Court, which dismissed CM’s application for judicial review, finding that the respondents’ decision was reasonable as it was based on the respondents’ interpretation of the relevant statutory and regulatory provisions and the application of those provisions to CM’s circumstances.

issues:

(1) What is the applicable standard of review?
(2) What is the statutory and regulatory scheme?
(3) Was the City respondents’ finding that CM failed to report the change in his household’s composition reasonable?
(4) Was the respondents’ finding that CM was absent from the unit reasonable?
(5) Was the respondents’ finding that there were no extenuating circumstances reasonable?
(6) What was the impact of the submissions made by the intervener?

holding:

Appeal dismissed.

reasoning:

(1)
The Court, citing Canada v. Vavilov, held that the appropriate standard of review was a reasonableness standard of review. On an appeal from a Divisional Court decision, the Court must conduct a de novo review of the administrative decision maker’s decision and step into the shoes of the Divisional Court. In doing so, there is a presumption that the reasonableness standard of review applies unless a statute provides otherwise or a correctness standard is required by the rule of law. CM and the respondents agreed that no such exceptions apply. The Court held that the Divisional Court identified the appropriate standard of review of reasonableness.

(2)
The Court stated that Part V of the Act addresses the rent-geared-to-income assistance regime in Ontario. Pursuant to s. 43(1) of the Act, service managers are responsible for establishing “occupancy standards for determining the size and type of unit permissible for a household receiving rent-geared-to-income assistance.” Section 46(1) of the Act also requires service managers to determine the size and type of unit an eligible household is entitled to occupy. Section 52(1) of the Act requires service managers to conduct periodic reviews to ensure that households receiving rent-geared-to-income assistance remain eligible for the assistance. Section 53 requires service managers to provide written notice when they determine that a household is no longer eligible for rent-geared-to-income assistance. Further, Ontario Regulation 367/11, under the Act sets out the provincial eligibility rules for receiving and continuing to receive rent-geared-to-income assistance (the “Regulation”).

(3) Yes.
The Court held that the respondent City’s determination that CM failed to report the change in his household composition was reasonable. CM argued that he did not report the change because he expected his daughters to be returned to him at the conclusion of the criminal proceedings and therefore that the change was temporary.

Section 28(1) of the Regulation provides that a household ceased to be eligible for rent-geared-to-income assistance if the household fails to notify the service manager of a change described in section 28(2), a change relevant to a household’s eligibility. Pursuant to section 28(3), this change must be reported within 30 days and the respondents’ rules state that a notice of change must be provided within 31 days.

The Court noted that a change in household composition is significant because of the amount of assistance each household receives is dependent in part on the number of people in the household. There was no dispute that CM’s children stopped living with him in June 2018 due to his bail conditions and that he did not notify the respondents of this change. However, CM argued that the temporary nature of the change meant that he was not required to report it. The Court held that the respondent City’s decision was reasonable as its reasoning and conclusion was logical and accords with the applicable factual and legal context of the case. There was no information as to whether or when the children would return to live with CM, as such the Court found it was reasonable for the respondent City to treat this as a change CM was required to report.

(4) Yes.
The Court held that the respondent City’s determination of the meaning of “absent” in the rule that a resident must not be absent from their unit for 60 consecutive days or 90 days in a year was reasonable. CM argued that it was unreasonable for the City to find that he was absent from the unit given that he was present in the home throughout the day, and used the unit for all aspects of his daily life except for sleeping.

The Court held that the respondent City considered these facts but found that it did not amount to occupying the unit for residential purposes, which is what the rent-geared-to-income assistance is meant to assist with. The Court found this to be a reasonable interpretation as the respondent City considered the purpose of the legislative scheme and the factual context that includes: (1) providing housing assistance to people who have a low income and do not have another residence; and (2) a long waiting list for a limited number of available units.

The Court held that the benefits conferred under the Act are different from those conferred by other types of benefit conferring legislation. Due to the limited number of subsidies available for public housing and limited number of public housing units, allowing CM to maintain his unit for an extended period of time while unable to reside in it deprives another eligible household from residing at the unit. The Court further held that the respondents’ role is to make decisions about eligibility and continued eligibility in the context of these competing interests. As such, the Court found that the respondent City’s interpretation of the word “absent” was reasonable, given the circumstances.

(5) Yes.
The Court held that the respondent city’s finding that there were no extenuating circumstances was reasonable because it considered whether there were extenuating circumstances and because CM did not provide any information that would give rise to extenuating circumstances. The Court further held that it was evident from the decision that the respondent City was aware of CM’s criminal proceedings and the impact on his children, but it was entitled to conclude that these were not extenuating circumstances that would justify waiving the notice requirement. The Court stated that the decision was not unreasonable and was owed deference.

The Court further found that the presence of extenuating circumstances would have only impacted the issue of notice and not the issue of CM’s absence from the unit and, in any event, CM’s absence from the unit for more than the prescribed amount of time would justify terminating his rent-geared-to-income assistance.

(6)
The Court rejected the intervener’s arguments. The Court reiterated that its role is not to interpret the Act afresh, but to decide whether the respondents’ decisions are reasonable. The respondents arrived at a defensible interpretation of the Act, and the decisions were justified based on the factual circumstances of the case. The Court found that the respondents’ decisions were reasonable and the international legal instruments relied on by the intervener did not affect that conclusion.

McGrath v. Joy, 2023 ONCA 46

[Gillese, Trotter and Nordheimer JJ.A.]

Counsel:

O. Niedzviecki, for the moving party D.R.
K.P. Nagrani, for the responding party M.R.M.

facts:

JPJ died by suicide on July 13, 2019. He left a signed two-page note, wholly in his own handwriting, in the pocket of his shorts (the “Suicide Note”). JPJ had previously made two wills: one in 2014 and another in 2016.

MRM is JPJ’s stepson and one of two named beneficiaries in the Suicide Note. MRM brought an application to have the Suicide Note declared JPJ’s valid will and admitted to probate (the “Application”).

DR was a beneficiary under the 2016 will. Under its terms, DR was to receive JPJ’s shares in two corporations. DR along with JPJ’s wife, opposed the Application on the basis that MRM had failed to prove that JPJ had testamentary capacity to make a will when he wrote the Suicide Note. DR also took the position that, if the Suicide Note was valid, it should be considered to be a codicil to the 2016 will and not affect his inheritance.

The application judge noted that there was no dispute that the Suicide Note met the requirements in s. 6 of the Succession Law Reform Act (the “SLRA”), for a valid holographic will – the only issue was whether JPJ had testamentary capacity to make a will when he wrote the Suicide Note. Based largely on JPJ’s consumption of alcohol and drugs the day before his death, the application judge held that MRM, as the propounder of the will, had not met the evidentiary burden of establishing JPJ’s testamentary capacity when he wrote the Suicide Note and dismissed the Application. Consequently, the application judge said, it was not necessary that he consider DR’s alternate submission that the Suicide Note should be considered a codicil to the 2016 will.

MRM appealed, raising two issues: did the application judge err in (1) determining that JPJ lacked testamentary capacity when he wrote the Suicide Note; and (2) his costs orders.
DR argued that, if the Suicide Note were found to be valid, it was “more correctly characterized” as a codicil to the 2016 will. The Court allowed the appeal and held that JPJ had testamentary capacity because he had a “sound disposing mind” when he wrote the Suicide Note: he understood the nature and effect of a will; he recollected the nature and extent of his property; he understood the extent of what he was giving under the will; and, he understood the nature of the claims that might be brought by a person excluded from the will.
Before an order reflecting the Court’s decision had been taken out, DR brought a Motion asking the Court to re-open the appeal and re-hear submissions on whether the Suicide Note was a codicil to the 2016 will, rather than JPJ’s will. He acknowledged that he had taken the position on the appeal that the Suicide Note could be a codicil and was “obviously not intending to disinherit DR” but did so without reference to statute and case law supporting his position. He also contended that para. 88 of the reasons implied there is no legal authority for a testator to create a handwritten codicil and, thus, has thrown this area of law into disarray.

issues:

(1) Does the Court have jurisdiction to reconsider its decision before a formal order is issued?
(2) What is the test to meet to reconsider a decision?
(3) Did DR meet the test for a reconsideration of the decision?

holding:

Motion dismissed.

reasoning:

(1) Yes.
The Court held that it had jurisdiction to reconsider its decision before a formal order had been taken out and, accordingly, the Court was not functus officio.

(2)
The Court stated that the party seeking to re-open an appeal after the appeal decision has been rendered faces a “high hurdle”. Further, the Court stated that it will re-open an appeal prior to the entering of an order only in rare circumstance where it is in the interests of justice to withdraw the reasons of the Court and re-hear the case on the merits.

(3) No.
The Court found that DR had not raised the kind of “rare circumstance” where the interests of justice would require the Court to withdraw its reasons and re-hear the issue of whether the Suicide Note was JPJ’s final will or a codicil to his 2016 will. The Court stated that DR had argued this issue on appeal and the Court had already expressly addressed the matter in its reasons.

Further, the Court held it would not be in the interests of justice to permit the matter to be re-argued. DR argued that para. 88 of the Court’s reasons can be read as implying that, pursuant to s. 6 of the SLRA, a testator cannot make a holograph codicil. The Court clarified that para. 88, read in context, did not do this. The Court stated that in addressing whether the Suicide Note was more correctly characterized as a codicil, the Court had already determined that the Suicide Note was JPJ’s valid will. Having left “everything” to two named beneficiaries by means of the Suicide Note, the Court determined that the Suicide Note could not be construed as a codicil to the 2016 will. However, the Court clarified, that it does not mean that a holograph will could never be construed to be a codicil pursuant to s. 6 of the SLRA.

Sigma Capital Management Group Inc. v. Benzer Limited, 2023 ONCA 65

[MacPherson, Hoy and Coroza JJ.A.]

Counsel:

M. Doyle and S. Jamshidimoghadam, for the appellants
C. Statham, for the respondent

facts:

The appellants, Benzer Ltd. (“Benzer”) and its controlling shareholder, R. M., were ordered to distribute funds held in trust by Friedman Law Professional Corporation (“Friedman”) following the settlement of two actions. The funds were paid to Freidman following the settlement of two related actions against KPMG for professional negligence: one commenced by the appellants (the “Benzer Action”), and the second by Komtech Inc. (“Komtech” and the “Komtech Action”). The two actions were consolidated.

Shortly before commencing the Komtech Action, Komtech had filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act. In connection with its insolvency, Komtech entered into an asset purchase agreement with 2279591 Ontario Inc. (“227”) with respect to Komtech’s assets, including the Komtech Action. 227 subsequently assigned the Komtech Action to Sigma Capital Management Group Inc. (“Sigma”) in trust for the shareholders of Komtech and Sigma agreed “to assume all of the costs and expenses pertaining to [the Komtech Action] except for $200,000 of such costs and expenses, which shall be paid for by [227]” pursuant to s. 2 of an agreement dated April 26, 2011 (the “Assignment Agreement”).

Section 2 of the Assignment Agreement further provided that “[f]or greater certainty at no time shall [227] have any liability for payment of any costs and expenses including legal fees and disbursements exceeding the sum of $200,000, Plus Taxes, if any.”

The Assignment Agreement also provided, in s. 3, how 227 was to be compensated for undertaking this funding obligation, where it stated: “… to a maximum of the amount of the legal costs awarded, if any, and (ii) in addition to the amount referred to in paragraph 3(i), to pay to [227] 15% of the net amounts recovered from, in connection with or out of, the [Komtech] Action, minus the legal costs awarded to [Sigma].”

In a second agreement (the “Assumption Agreement”), Benzer assumed 227’s funding obligation under the Assignment Agreement in consideration of the assignment to it of 227’s rights under s. 3 of the Assignment Agreement.

In October 2016, KPMG moved for security for costs against Sigma and Sigma was ordered to pay, and paid, $250,000 into court in respect of the Komtech Action. It raised this amount from its shareholders. The appellants were not ordered to pay security for costs in respect of the Benzer Action; however, Benzer is a shareholder of Sigma and paid its proportionate share of the security for costs Sigma was ordered to pay.

In 2019, the appellants and Sigma accepted KPMG’s offer to settle the Benzer Action and the Komtech Action. The offer was that 1) KPMG would pay to the plaintiffs the all-inclusive sum of $130,000 and consent to an order in the Komtech Action releasing the monies posted as security for costs to the plaintiffs, and 2) the actions would be dismissed on a without costs basis and the parties would exchange full and final releases.

On May 24, 2019, the appellants, Sigma, and KPMG signed a Mutual Full and Final Release and the sum of $130,000 (the “Settlement Funds”) was paid to Friedman. The monies that had been posted as security for costs in respect of the Komtech Action, plus accrued interest (the “Security Funds”), were paid out of court and deposited in trust by Friedman.
No agreement was ever reached by the parties as to how the funds were to be apportioned. Friedman was paid $44,780.10 on account of unpaid legal fees with respect to the Benzer Action and the Komtech Action and Sigma brought the application for an order as to the distribution of the remaining funds.

The appellants appealed the judgment of the application judge which found 1) Benzer was not entitled to be reimbursed for the costs and expenses pertaining to the Komtech Action that it had paid under s. 3(i) of the Assignment Agreement because no costs had been awarded and 2) the Security Funds should not be included in calculating Benzer’s entitlement under s. 3(ii) of the Assignment Agreement.

issues:

(1) Did the application judge err in concluding that Benzer was not entitled to be reimbursed for the costs and expenses pertaining to the Komtech Action that it had paid under s. 3(i) of the Assignment Agreement?
(2) Did the application judge err in concluding that the Security Funds should not be included in calculating Benzer’s entitlement under s. 3(ii) of the Assignment Agreement?

holding:

Appeal dismissed.

reasoning:

(1) No.
The Court held that the application judge carefully instructed herself as to the applicable principles of contractual interpretation. Her interpretation was a question of mixed fact and law subject to appellate review on the deferential standard of palpable and overriding error, unless there was an extricable error of law: Sattva Capital Corp. v. Creston Moly Corp. The Court held that the appellants failed to identify a palpable and overriding error or an extricable error of law.

The Court held that the application judge did not commit an extricable error of law by failing to consider the wording of the Assumption Agreement in concluding that Benzer was not entitled to reimbursement pursuant to s. 3(i) of the Assignment Agreement. Pursuant to the Assumption Agreement, 227 assigned to Benzer, all of 227’s “rights, title and interest in and to the reimbursement of the Costs […]”. Costs are defined in the Assumption Agreement as the expenses and costs pertaining to the Komtech Action. 227’s right to reimbursement of the Costs is pursuant to the Assignment Agreement between 227 and Sigma. 227 could not assign a greater right of reimbursement to Benzer under the Assumption Agreement than it had bargained for under the Assignment Agreement. The Court found that Sigma was not a party to the Assumption Agreement.

The appellants argued that the phrase “to a maximum of the legal costs awarded, if any” found in the Assignment agreement only applies where legal costs are awarded. In other words, “if any” only modifies “to the maximum of the legal costs awarded” and has no application if no costs are awarded. The appellants submitted that application judge’s interpretation leads to an absurdity because percentage of compensation in s. 3(ii) does not, in all cases, provide adequate compensation to a litigation funder required to advance up to $200,000.

The Court agreed with the application judge stating that the fact that an agreement provides for different levels of compensation to a litigation funder depending on whether costs were awarded was not an absurdity.

(2) No.
The Court held that there was no basis to interfere with the application judge’s characterization of the security for costs paid as analogous to a litigation expense. Further, the Court noted that the application judge had reviewed the cases cited by the parties, but their usefulness was limited given that the cases were fact and contract specific and did not provide assistance as to how the specific agreements were to be interpreted in light of the circumstances of the case. The Court concluded that there was no reviewable error.

Costanza v. Dejardins Financial Security Life Assurance Company, 2023 ONCA 54

[van Rensburg, Sossin and Copeland JJ.A.]

Counsel:

N. Bonder and A. White, for the appellant
A.L. McFadden and J.P. Cavanagh, for the respondent

Keywords:Insurance, Duty to Disclose, Civil Fraud, Evidence, Standard of Review, Insurance Act, R.S.O. 1990, c. I.8, s. 178, s. 183(1), ss. 183(3), s. 184(2), 189.1, Evidence Act, R.S.O. 1990, c. E.23, s. 22.1, Gregory v. Jolley (2001), 54 O.R. (3d) 481 (C.A.), Sagl v. Chubb Insurance Company of Canada, 2009 ONCA 388, Palmer v. The Queen, [1980] 1 S.C.R. 759, F.(K.) v. White (2001), 53 O.R. (3d) 391 (C.A.), Andreadis v. Pinto (2009), 98 O.R. (3d) 701 (S.C.J.), Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Frohlich v. Ferraro, 2017 ONCA 978

facts:

On January 9, 2012, DC (“the deceased” or “the insured”) applied for life insurance. Question 21(a) of the application asked the following question: “In the last 3 years, have you been convicted of or pleaded guilty to any criminal offence or any moving violations or driving under the influence of alcohol or drugs?” The deceased answered “no”. On February 9, 2012, the insurer issued the life insurance policy to the deceased (“the policy”). The policy contained a life insurance benefit of $500,000 and designated the respondent, JPC, as the primary beneficiary. The respondent is the deceased’s son.

On December 3, 2017, DC was shot and killed. On December 4, 2017, the respondent made a claim under the insurance policy. The insurer refused the claim and took the position that the deceased made a material and fraudulent misrepresentation on his application for life insurance asserting that the deceased’s answer to Question 21(a) was false. The insurer claimed that the deceased was convicted of assault causing bodily harm and sentenced to 90 days imprisonment on March 11, 2009 – 2 years, 9 months, and 29 days prior to the day he submitted the application for insurance.

The policy contained an incontestability clause, which stated: “Except for nonpayment of premiums, we will not contest the Basic Plan after it has been in force during the Insured’s lifetime for 2 years from the Policy Date.” At the time of the deceased’s death, the policy had been in effect for more than five years. The deceased paid all premiums as required on the policy.

The respondent sought a declaration that the policy was valid, subsisting, and binding on the insurer. The insurer argued that the policy was voidable due to fraudulent non-disclosure or misrepresentation by the deceased in the application for insurance.

The application judge found that the insurance policy was valid and concluded that the insurer had not proven on a balance of probabilities that the deceased obtained the insurance through fraudulent non-disclosure or misrepresentation.

The application judge noted that an insured has a duty to make full disclosure of material facts to an insurer and that the duty is codified under s. 183(1) of the Insurance Act (the “Act”). She recognized that a failure to disclose or a misrepresentation of material fact renders the contract voidable pursuant to ss. 183(3) and 184 of the Act. However, s. 184(2) establishes that, where a contract has been in effect for two years during the lifetime of the person whose life is insured, a failure to disclose a material fact or misrepresentation of fact does not, in the absence of fraud, render the contract voidable.

The insurer argued that the policy was voidable on two bases. First, the insurer argued that the deceased had made a fraudulent material misrepresentation in answering “no” to question 21(a), which asked if he had “been convicted of or pleaded guilty to any criminal offence or any moving violations or driving under the influence of alcohol or drugs” in the last three years. Second, the insurer argued that the deceased was obliged to disclose the fact that he had a “criminal history” or “criminal background”, and had failed to do so. The insurer argued that this was a material non-disclosure.

The insurer had filed a partial printout from the Canadian Police Information Centre, purporting to list information of criminal convictions of the deceased (the “CPIC printout”). The CPIC printout included the following entry: “2009-03-11. Brampton, ON. Assault CBH, SEC 267 (B) CC, 90 days and mandatory weapons prohibition SEC 109 CC”.

The application judge found that the CPIC printout was not sufficient evidence to prove that the deceased was convicted of assault on March 11, 2009, because it was not authenticated in any way. The application judge found that there was no evidence to confirm whether the March 11, 2009 date represented a date of conviction, imposition of sentence, or some other date. She noted that a CPIC printout is a police record, not a court record and the insurer had chosen not to file a certified copy of the Information or Indictment or any other court record.
The application judge was not satisfied on a balance of probabilities that any misrepresentation by the deceased in his answer to question 21(a) was made with knowledge that it was false or with recklessness as to its truth or falsity. The insurer had argued that the deceased must have known that the conviction was within three years of the application because he served time in custody. The application judge found that this argument was based on a misconception of the criminal process. She found that the deceased could have been mistaken in calculating when he was convicted due to multiple court appearances that are part of criminal proceedings. She found that it was at least as likely, if not more likely, that the deceased was mistaken or merely negligent as to the date of conviction when he filled out the application for insurance.

The application judge then considered the insurer’s argument that the deceased made a material non-disclosure in failing to disclose a “criminal history” or “criminal background”. The insurer relied on two printouts of online news articles posted days after the deceased was killed.

Based on these news articles, the insurer argued that the deceased was known to police, that his murder was believed to be targeted and related to a dispute over money or drugs. The application judge ruled the news articles to be inadmissible and unreliable. They were a “dangerous” type of hearsay, “namely rumour and unsubstantiated innuendo.” She found that the fact that the news articles asserted that “the police” said the deceased was involved in criminal activity was not evidence that the deceased was, in fact, involved in criminal activity.
As a result of the inadmissibility and unreliability of the news articles, the application judge was not satisfied that the deceased had a criminal history or background or that the insurance policy was voidable for failure to disclose it.

issues:

(1) Should the Court grant the motion to admit fresh evidence?
(2) Did the application judge err in finding that the insurer had not proven that the deceased had been convicted of assault causing bodily harm in the three years preceding his application?
(3) Did the application judge err in law in her application of the test for civil fraud?
(4) Did the application judge err in finding that the deceased’s representation that he had not been convicted of a criminal offence in the three years preceding his application had not been proven by the insurer to have been made with knowledge that it was false or with recklessness as to its truth or falsity?
(5) Did the application judge err in finding that the insurer had not proven that the deceased had a “criminal history” or “criminal background” that he failed to disclose?

holding:

Appeal dismissed.

reasoning:

(1) No.
The Court clarified that the four-part test for admissibility of fresh evidence is well-established: (1) the evidence should generally not be admitted if, by due diligence, it could have been adduced at trial; (2) the evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial; (3) the evidence must be credible in the sense that it is reasonably capable of belief; and (4) the evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result (the “Palmer test”).

The insurer sought to introduce a certified copy of an Indictment relating to the deceased. The certified copy of the Indictment establishes the fact that the deceased was convicted of assault on February 2, 2009, and was sentenced to imprisonment. February 2, 2009 is over 2 years prior to the submission of the insurance application by the deceased.
The respondent conceded that the fresh evidence met the second and third branches of the Palmer test. Thus, the Court only addressed the first and fourth branches of the test. The Court found that the first branch of the Palmer test was complicated by admissions made by BS, the ex-common-law partner of the deceased, and the mother and litigation guardian of the respondent. The Court noted that in cross-examination, BS agreed that the deceased was convicted of assault in March of 2009.

The Court agreed with the insurer that it had satisfied the due diligence branch of the Palmer inquiry. In her evidence on the application, BS admitted the fact of the deceased’s assault conviction, but took the position that any incorrect statement in the insurance application was made by mistake. It was in the Court’s view, given BS’s unequivocal admissions about the conviction, there was no failure of due diligence by the insurer in not obtaining and filing a certified copy of the Indictment before the application judge. Based on the admissions made by BS, the Court found that the insurer was entitled to rely on the admissions by BS on behalf of the respondent.

In regards to the fourth branch, the Court found that fresh evidence could not reasonably be expected to affect the result of the application. The Court found that the fresh evidence would not materially change the factual basis relied on by the application judge to find that the insurer failed to meet its burden to prove that if there was a misrepresentation in the answer to question 21(a) it was made fraudulently.

(2) Yes.
The Court agreed with the insurer that the application judge made a palpable and overriding error of fact when she did not address admissions made by BS. However, the Court noted that the error was more of a fundamental error of procedural unfairness to the insurer. In the Court’s view, the failure of the application judge to address the admissions of BS in relation to the conviction constituted a palpable and overriding error in the application judge’s conclusion that the insurer had not proven that the deceased was convicted of a criminal offence in the three years preceding the insurance.

The Court found it was procedurally unfair to disregard the clear admissions by BS about the conviction, which the insurer had relied on, without giving the insurer an opportunity to provide further evidence on the issue. However, the Court clarified that their conclusion should not be read as suggesting that a CPIC printout is sufficient proof of a prior conviction in the absence of an admission. The Court explained that the proper method to prove the existence of a criminal conviction, if not admitted, is with a certified copy of the Indictment or Information. The Court held that the fresh evidence could not reasonably be expected to affect the result of the application.

(3) No.
The Court found that the argument raised a question of law and the standard of review was correctness. The Court found that there can be no doubt that the application judge applied the correct legal standard for the intent for civil fraud and held that the fresh evidence had no bearing on the ground of appeal. Thus, the Court found that the insurer’s grounds provided no basis to conclude that the fresh evidence could reasonably be expected to affect the result of the application.

(4) No.
The Court stated that the issue regarding whether knowledge or recklessness had been proven by the insurer are questions of fact or mixed fact and law and are reviewed on a palpable and overriding error standard. The Court established that the insurer bore the burden of proof to establish that the deceased made the incorrect representation in his answer to question 21(a) knowingly or recklessly. The Court concluded that the insurer failed to show any palpable and overriding error in the findings of fact and the application judge’s findings were entitled to deference.

(5) No.
The Court clarified that an appeal is not a forum to advance new arguments. The Court found that the insurer did not rely on the CPIC printout or any specific criminal conviction(s) in its argument before the application judge that the deceased failed to disclose his “criminal history” or “criminal background”. Rather, the Court found that insurer chose to rely only on the news articles. The Court held that it would be inappropriate to allow the insurer on appeal to fundamentally change the basis on which their argument was made.

Dorsey v. Canada (Attorney General), 2023 ONCA 64

[Sossin J.A. (Case Management Judge)]

Counsel:

J. Orkin, A. Weaver, S. Borys, and K. Mitchell, for the appellants
J. Provart and W. Wright, for the respondent
P. Quick, for the intervener John Howard Society of Canada
G. Philipupillai and S. Moyo, for the proposed intervener the Black Legal Action Centre
J.D. Rose, for the proposed intervener the Canadian Association of Elizabeth Fry Societies
N.R. Hasan and D. Goudge, for the proposed intervener the Canadian Civil Liberties Association
A. Craig, for the proposed intervener the Canadian Prison Law Association

facts:

This case involved a challenge to the application of the law of habeas corpus. The appellants applied for a writ of habeas corpus ad subjiciendum for orders that they be transferred to minimum-security institutions unless the respondent, on behalf of he Correctional Service of Canada, can justify their continued detention in a medium-security institution. The Canadian Civil Liberties Association (the “CCLA”), the Black Legal Action Centre (the “BLAC”), the Canadian Association of Elizabeth Fry Societies (the “CAEFS”), and the Canadian Prison Law Association (the “CPLA”) sought leave to intervene as friends of the court.

Canada opposed these motions either on the basis that the interveners would introduce new issues on appeal or that their proposed submissions are duplicative of the appellants’ argument. The moving parties each argue that the nature of the issues before the court are of constitutional and public importance, which transcend the immediate parties.

The CCLA is a well-recognized national organization dedicated to the furtherance of civil liberties in Canada. One of CCLA’s major objectives is the protection of the rights of prisoners and detainees from arbitrary or excessive use of power, with a focus on issues and cases that result in broad, systemic change. The CCLA submitted that any state decision, which results in an ongoing deprivation of liberty and is substantially inconsistent with the least restrictive option, always triggers habeas corpus.

The BLAC is a not-for-profit legal clinic with the mandate to address individual and systemic anti-Black racism in Ontario. The BLAC has specialized knowledge on anti-Black racism in the criminal system. Given its expertise, the BLAC can provide the court with the unique perspective of the impact of denying access to habeas corpus review for a denial of a transfer to a lower security institution on Black inmates. The BLAC submitted that it would make a useful contribution by focusing its arguments on the impacts of denying habeas corpus review on Black inmates, through the lens of substantive equality and s. 15 Charter values.

CAEFS is the non-profit association of the community-based Elizabeth Fry Societies. The objective of the CAEFS includes addressing and promoting the human rights of criminalized women, trans, non-binary and Two-Spirit people. CAEFS also has significant involvement with Indigenous women who are disproportionately represented among the women CAEFS serves. CAEFS submitted that it will make a useful contribution by submitting that the court should consider substantive equality as a factor in their determination of whether a particular continuing deprivation of liberty attracts Charter protection.

The CPLA is a national organization made up of lawyers, paralegals, and academics who work on behalf of federal and provincial inmates in the provision of legal services, research on prison law issues, and in making representations to legislative and government bodies. The CPLA submitted that it would make a useful contribution by contrasting the constitutional and statutory protection of the liberty interests at stake in transfer decisions, and why such interests may be disregarded in light of the asymmetrical, policy-based decision-making structures and the institutional factors that may often pull against the least restrictive principle.

issues:

Should intervenor status as friends of the court be granted for the moving parties?

holding:

Motions granted.

reasoning:

Yes.

The Court noted that there are four criteria in determining whether to grant intervenor status: (1) the nature of the case, (2) whether contributions will be useful, (3) potential injustice to the parties, and (4) the terms of intervention. The Court held that each of the criteria favour granting intervention in this case.

First, the Court held that the issue before the court is whether refusal of transfers to a lower security institution amounts to a deprivation of liberty such that the writ of habeas corpus is available. Habeas corpus is a constitutional right entrenched in s. 10(c) of the Charter and is a legal remedy that is fundamental to the protection from unlawful deprivations of liberty. The issue before the court is of public importance and transcends the immediate parties. Furthermore, the Court noted that as a dispute involving the state, the more onerous standard for interventions in private disputes does not apply. Canada argued that the nature of this case was not suited for intervenors because habeas corpus applications are meant to be an expeditious process. The Court disagreed stating that this is not a standard habeas corpus application and relates to a threshold issue regarding what constitutes a “deprivation of liberty” such that that habeas corpus is available.

Second, the Court stated that each proposed intervenor is well-positioned to assist the court as they are all established and reputable organizations with specialized knowledge and expertise. Third, the Court noted that there is no injustice to the parties from the positions of the proposed interveners as they do not inappropriately weigh in on the actual merits of the appeal. Rather, the proposed interveners are advancing legal arguments that are properly the subject of an intervention. Canada argued that it would face injustice because each proposed intervenor is aligned in interest with the appellants. The Court disagreed for three reasons: (1) intervenors do not need to be disinterested to obtain status, (2) it is particularly important in appeals involving the state and raising issues of public importance that the court hear from different perspectives, and (3) any potential injustice can be cured through appropriate terms of intervention.

Rabin v. 2490918 Ontario Inc., 2023 ONCA 49

[Gillese, Tulloch and Roberts JJ.A.]

Counsel:

M. Drudi, for the appellant
P. Gribilas, for the respondent

Keywords: Contracts, Commercial Leases, Assignment of Lease, Consent to Assignment, Withholding Consent, Reasonableness, Landlord and Tenant, Waiver, s. 23, Commercial Tenancies Act, R.S.O. 1990, c. L.7, Iroquois Falls Power Corporation v. Ontario Electricity Financial Corporation, 2016 ONCA 271, Labatt Brewing Company Limited v. NHL Enterprises Canada, L.P., 2011 ONCA 511, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490, 1455202 Ontario Inc. v. Welbow Holdings Ltd. (2003), 33 B.L.R. (3d) 163 (Ont. S.C.), 2197088 Ontario Limited v. Cadogan Corporation, 2018 ONSC 3070, 6791971 Canada Inc. v. Eli Messica, 2020 ONSC 1642, Zellers Inc. v. Brad-Jay Investments Ltd., [2002] O.J. No. 4100 (Ont. S.C.), Jo-Emma Restaurants Ltd. v. A. Merkur and Sons Ltd. (1989), 7 R.P.R. (2d) 298 (Ont. S.C.), Tradedge Inc. (Shoeless Joe’s) v. Tri-Novo Group Inc., 84 R.P.R. (4th) 84 (Ont. S.C.), Quickie Convenience Stores Corp. v. Parkland Fuel Corporation, 2020 ONCA 453, Ruth Sullivan, Sullivan on the Construction of Statutes, 7th ed. (Toronto: LexisNexis Canada, 2022)

facts:

The appellant tenant had run a dentistry practice from the leased premises throughout his 44-year tenancy. The respondent acquired the building with the view of demolishing it and redeveloping the property at some time in the future. The appellant’s lease expired on December 31, 2025. There was a five-year option to renew.

The appellant wished to semi-retire, and sought to sell his business to two dentists. As part of the sale of his practice, the appellant sought the respondent’s consent, as landlord, to the assignment of the lease under article 11.1 of the lease. Article 11.1 stated that the respondent shall, within 15 days, notify the tenant whether or not it consented to the assignment of the lease. In accordance with the lease, on February 2, 2021, the appellant, through his real estate lawyer, gave the respondent the requisite formal written notice of the assignment. The respondent did not provide any response within the 15-day deadline. The respondent, several days after the deadline, stated that consent would be provided if a demolition clause was added to the lease. This was not accepted by the appellant.

On March 12, 2021, after the respondent had reviewed the proposed purchaser’s credit application, the respondent informed the appellant that it was not consenting to the assignment. The appellant, after several more attempts to secure consent, commenced an application.

The application judge concluded that the appellant had waived the requirement under article 11.1(a) of the lease that the respondent provide its consent within 15 days of receiving the appellant’s notice of its intent to assign the lease. The application judge determined that the appellant had failed to show that the respondent had either refused to consent to the assignment or unreasonably withheld its consent. As a result, the application was dismissed without prejudice.

The appellant appealed the dismissal of his application for an order under s. 23(2) under the Commercial Tenancies Act (“CTA”) to require the respondent landlord to consent to the assignment of the lease. The appellant submitted that the application judge erred in finding that the appellant had waived the respondent’s neglect or refusal to provide its consent within the 15-day deadline set out in the lease or at all, and in failing to find that the respondent had unreasonably withheld its consent to the requested assignment.

issues:

(1) Did the application judge err in finding that the appellant had waived the 15-day notice period under article 11.1(a) of the lease?
(2) Did the application judge err in not focusing his analysis on s.23 of the CTA?

holding:

Appeal allowed.

reasoning:

(1) Yes
The Court held that the application judge applied the doctrine of waiver when it was not raised or argued by the parties and had erred in his application of the doctrine of waiver. The Court held that the application judge correctly found that the respondent had failed to respond to the appellant’s request for its consent to the assignment of the lease, but failed to consider the consequences of that failure to provide a timely response.

The Court held that it is not open to a judge to dispose of a material issue in a proceeding on a basis that has not been raised or argued by the parties. The Court held that the application judge relied on the doctrine of waiver to dispose of the material issue of the respondent’s compliance with article 11.1(a) of the lease without giving the parties the opportunity to make appropriate submissions. The Court found that this alone warranted the setting aside of the application judge’s decision.

The Court held that the application judge had erred when he made no reference to this “stringent test” in determining whether waiver had occurred. The Court held that he failed to consider whether the February 18 follow-up email by the appellant’s real estate lawyer amounted to an unequivocal and conscious intention to abandon the appellant’s right to insist on the respondent’s compliance with article 11.1(a) and to rely on the consequences when the respondent failed to respond. The Court found that when the doctrine of waiver is correctly applied, the February 18 email could not be construed as a waiver. The Court noted that, as the appellant’s real estate lawyer attempted to resolve the respondent’s failure to respond in order to close the transaction for his client did not amount, without more, to a waiver of the appellant’s rights or of the respondent’s defective performance.

(2) Yes
The Court held that as neither party had raised the issue of waiver, the application judge’s analysis should have focussed on the relevant lease provisions and s. 23 of the CTA to determine whether the respondent had neglected or refused to give its consent to the requested assignment, and, if so, whether consent was unreasonably withheld. Subsection 23(1) of the CTA stipulates that a landlord’s consent to an assignment is not to be unreasonably withheld, unless the lease expressly provides to the contrary.

The Court held that article 11.1 of the lease provided that the respondent’s consent to any assignment by the appellant was required but that the respondent’s consent was not to be unreasonably withheld, subject only to article 11.1(a), which required the appellant to provide written notice of the assignment to the respondent and certain additional information if required by the respondent, and which required the respondent to advise the tenant if it would consent or not within 15 days. The Court noted that, as the CTA did not define refusal, neglect, or consent, those words were presumed to have their ordinary meaning.
The Court, citing 1455202 Ontario Inc. v. Welbow Holdings Ltd., held that there were six principles to be applied in determining whether a landlord reasonably withheld consent to an assignment:

i. The burden is on the tenant to satisfy the court that the refusal to consent was unreasonable.
ii. It is the information available to – and the reasons given by – the landlord at the time of the refusal – and not any additional, or different, facts or reasons provided subsequently to the court – that is material.
iii. The question must be considered in the light of the existing provisions of the lease that define and delimit the subject matter of the assignment as well as the right of the tenant to assign and that of the landlord to withhold consent.
iv. A probability that the proposed assignee will default in its obligations under the lease may, depending upon the circumstances, be reasonable ground for withholding consent.
v. The financial position of the assignee may be a relevant consideration.
vi. The question of reasonableness is essentially one of fact that must be determined on the circumstances of the particular case, including the commercial realities of the marketplace and the economic impact of an assignment on the landlord.
Applying these principles, the Court held that the appellant had met his burden to satisfy the court that the respondent neglected and also refused to consent unreasonably. The Court held that this was evidenced by the respondent’s neglect to respond to the request for consent within the 15-day time limit.

In determining whether that amounted to an unreasonable withholding of consent, the Court considered the reasons offered by the respondent for its failure to respond within the 15-day period provided for in the lease. The Court found that, given that the appellant had notified the respondent in December that he was going to seek the assignment and that time was of the essence, the formal request in February should have come as no surprise nor should the necessity of responding within the 15-day period. In the Court’s view, the neglect to consent within time amounted to an unreasonable withholding of consent.

The Court also found that the application judge had erred by failing to find that the respondent had subsequently refused its consent and that its consent was unreasonably withheld, as indicated in its real estate lawyer’s emails of February 24 and March 12 and by its unreasonable and last-minute request for financial information in its litigation lawyer’s email of March 23. The Court noted that the respondent had sought only the insertion of a demolition clause within the 15-day response period. This, the Court held, was a landlord’s attempts to obtain an amendment to the lease for its own benefit in exchange for providing consent, which has consistently been characterized as an unreasonable withholding of consent. As such, the respondent was not entitled to require a demolition clause as a precondition to giving consent, and the Court held that this “conditional consent” amounted to an unreasonable withholding of consent.

National Industries Inc. v. Kirkwood, 2023 ONCA 6

[Paciocco, Harvison Young and Thorburn JJ.A.]

Counsel:

J.R. Morse, D. Trafford and E.A. Cherniak, for the appellants
R.W. Traves and N.D. Kolos, for the respondents

facts:

In 2007, the appellants decided to build a new plant in Alabama. In 2013 the appellants’ CEO was indicted on securities fraud offences in Alabama in connection with the operation of the project. In 2014, those charges were settled by the payment of USD $22 million, which the appellants funded. The appellants sought indemnification for the settlement payment pursuant to Directors and Officers liability (“D&O”) insurance policies that the appellants had arranged through their long-standing insurance broker, the respondent.

In 2016, the appellants issued a statement of claim against the respondents alleging that the non-disclosure occurred because of the respondents’ negligence and the breach of their fiduciary duty. In 2017, the appellants brought a motion to amend their statement of claim, which was denied because the Master found that the proposed amendments constituted new causes of action outside of the limitation period. The appellants’ appeal to the Divisional Court was denied.

The respondents subsequently consented to certain amendments to the statement of claim. However, when the appellants served them a copy, there was an omission that would have made it clear that the agreed upon timeframe for the claim was limited to 2010 and 2011. Therefore, the respondents delivered a Demand for Particulars seeking the time period for allegations of negligence pleaded. In response, the appellants identified the time frame being 2007 to 2011. The respondents brought a motion to strike out the certain portions of the Response and Reply based on the doctrines of res judicata, issue estoppel, and abuse of process. The motion judge granted the relief sought because the appellants attempted to relitigate issues resolved by the Master in the pleadings motion.

issues:

(1) Did the motion judge err in deferring to the Master?
(2) Did the motion judge err by effectively giving the Master’s decision effect beyond her jurisdiction?
(3) did the motion judge err in a Rule 21 motion by applying res judicata, issue estoppel, and abuse of process to a pleadings decision of an associate justice?
(4) Did the motion judge err by applying res judicata, issue estoppel and abuse of process to the master’s reasoning rather than to her decision?
(5) Did the motion judge err by failing to apply the “plain and obvious” test?
(6) Did the motion judge err in failing to find that the pleadings could be interpreted to include events in 2008 and 2009?
(7) Did the motion judge err by failing to apply the correct test?

holding:

Motion dismissed.

reasoning:

(1) No.
The appellants argued that the motion judge was obliged, in a motion to strike hearing, to conduct his own assessment of the grounds for striking the pleadings. The Court noted that the appellants mischaracterized the motion judge’s ruling. The motion judge undertook his own assessment and found as a matter of law that, given the necessary findings that the Master had made in resolving the pleadings motion, the causes of action in the pleadings that were the subject of the motion to strike before him were prohibited by the re-litigation doctrines. The Court held that the outcome was not the result of deference but rather the result of the motion judge’s independent assessment.

(2) No.
The appellants submitted that the motion judge’s reliance on the Master’s decision gave it the effect of summary judgment, which a Master does not have the jurisdiction to order. The Court disagreed, stating that the Master’s decision was not tantamount to summary judgment because it was about what was not pleaded, whereas summary judgment is a determination of what was pleaded.

(3) No.
The appellants argued that a decision of an associate justice in a Rule 26.1 pleadings motion cannot support the application of the re-litigation doctrines in a Rule 21 motion. The Court conceded that there is no case law on whether an associate justice’s decision can be used to trigger the re-litigation doctrines. To invoke issue estoppel (1) the issue must be the same as previously decided, (2) the prior judicial decision must be final, and (3) the parties to both proceedings must be the same. The Court noted that there can be no question that the Master acted within her jurisdiction, as a court of competent jurisdiction and that her decision denying the pleadings motion was a “prior judicial decision”. The Court held that to suggest that re-litigation doctrines cannot be applied to decisions of an associate justice would make many applications before associate justices pointless.

The Court stated that abuse of process, on the other hand, is much more flexible. It can be applied where the litigation before the court is found to be in essence an attempt to relitigate a claim in which the court has already determined. The Court held that nothing in the doctrine of abuse of process precluded its application to a decision of an associate justice.
The appellants argued that the re-litigation doctrines only apply to findings of fact. The Court disagreed stating that both doctrines operate to prevent the improper re-litigation of issues decided, whether those issues are of fact, mixed fact and law, or law. Furthermore, the Court noted that if parties could disregard pleadings rulings in the expectation that they can be re-litigated later, it would unsettle the efficient and fair administration of justice and render pleadings rulings and appeals from those rulings pointless.

(4) No.
The appellants argued that the motion judge erred in applying the re-litigation doctrines to the “reasoning” of the Master, when these doctrines only apply to decisions. They argued that the only thing the Master decided was stated in her formal order, namely, that leave to amend the statement of claim was dismissed. The Court disagreed, noting that issue estoppel applies to determinations that are fundamental to a judicial decision.

(5) No.
The appellants argued that the motion judge erred by failing to apply the “plain and obvious” test, which applies in motions to strike pleadings. The Court stated that, although the motion judge did not articulate this test, it is clear that this is the standard he applied.

(6) No.
The appellants argued that the motion judge erred because their pleadings “could be interpreted to plead causes of action in relation to events in 2008 and 2009”. The Court dismissed this ground of appeal for two reasons. First, the motion before the motion judge was not an appeal of the decision of the Master. That appeal was litigated at the Divisional Court. Second, it was clear on reading the statement of claim that the pre-2010 facts were only included to support the negligence claims the appellants made relating to 2010 and 2011.

(7) No.
The appellants argued that the motion judge erred by striking pleadings without determining whether “the determination of law sought under Rule 21.01 would, dispose of all or part of the action, substantially shorten the trial or result in a substantive savings of costs”, which “is the applicable test set out in Rule 21.01(1)”. The Court held that this test only applies to a motion under Rule 21.01(1)(a), whereas the respondents’ motion was under Rule 21.01(1)(d). The test for Rule 21.01(1)(d) is whether the action is “otherwise an abuse of process of the court”, which the motion judge properly applied.

Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61

[Paciocco, Harvison Young and Thorburn JJ.A.]

Counsel:

M.P. Michell and Z. Naqi, for the appellants
P.L. Vay, S.M. Robinson and S. Aylward, for the respondents

Keywords: Solicitor-Client Privilege, Litigation Privilege, Breach of Privilege, Stay of Proceedings, Presumed Prejudice, Rebuttable Presumption, Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235, Etco Financial Corp. v. Ontario, [1999] O.J. No 3658 (S.C.), R. v. Babos, 2014 SCC 16, Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, R. v. Bruce Power Inc., 2009 ONCA 573, Goodis v. Ontario (Ministry of Correctional Services), 2006 SCC 31, O’Dea v. O’Dea, 2019 NLSC 206, Morneault v. Dynacorp Acquisition Ltd., 2006 ABQB 831, Dixon v. Lindsay, 2021 ONSC 1360

facts:

In 2015, the respondent ES advised that he no longer wished to participate in a joint venture to establish a new Schedule I bank. Litigation ensued when the transaction did not close. While working to establish the bank, the parties moved into the same office space and shared the same computer file server (the “File Server”). Shortly after ES informed the appellant SP of his intention to stop participating in the project, SP instructed his assistant to save a back up of all of the respondent Continental Bank of Canada’s (“Continental”) email accounts in the File Server to a separate location. Continental emails consisting of 22 “PST files” were copied onto a hard drive (the “Email Server Copy”) and each PST file contained thousands of emails and attachments. The Email Server Copy contained a copy of every email sent or received up to January 13, 2015.

The parties continued to share office space and the File Server for nine months after the transaction was terminated. On September 9, 2015, ES applied for a receiver to be appointed. On September 27, 2015, the appellants removed the File Server which at the time still contained the respondents’ data. On October 8, 2015, respondents’ counsel wrote to the appellants’ counsel demanding a copy of the Continental data on the File Server. On November 6, 2015, the appellants’ IT provider confirmed that no Continental data was “currently” accessible by Continental employees. The appellants’ IT confirmed that the use of the word “currently” was included because up until that date the Continental data was accessible to the appellants.

In May 2019, the respondents discovered that the appellants were in possession of privileged documents belonging to Continental regarding the joint venture, including: legal opinions and strategy documents prepared for the respondents by counsel, and all emails sent or received by anyone with a Continental email address, including emails from counsel and documents prepared for litigation. As a result, the respondents brought a motion to stay the proceedings.
The motion judge held that: (i) the respondents discharged their burden to demonstrate that the appellants obtained access to their confidential and privileged information that was relevant to the issues in this litigation; (ii) the appellants did not rebut the presumption of prejudice as they led no evidence as to what documents they reviewed; and (iii) the only appropriate remedy was a stay of proceedings. The motion judge found that the appellants had access to the respondents’ relevant and privileged information and while there was no direct evidence that the appellants reviewed the documents, the appellants led no evidence to rebut the presumption of prejudice against the respondents. As a result, the motion judge stayed the proceedings.

issues:

(1) Did the motion judge make inconsistent findings as to whether the appellants accessed and reviewed privileged information?
(2) Did the motion judge conflate the presumption of prejudice to the respondent with the imposition of the remedy of a stay of the appellants’ proceeding?
(3) Did the motion judge err in holding that the appellants had the onus to “show that there is another remedy, short of a stay of the action, that will cure the problem”?
(4) Did the motion judge err in imposing a stay against all of the appellants although only SP was presumed to have accessed and reviewed the documents?

holding:

Appeal dismissed.

reasoning:

(1) No.
The Court found that the motion judge correctly applied the test set out in Celanese Canada Inc. v. Murray Demolition Corp., noting that the onus is on the party with unauthorized access to show that there is no risk that privileged and confidential information attributable to a solicitor and client relationship will be used to prejudice the party possessing the privilege. The Court noted that although the motion judge stated that it was impossible to know whether the documents were mundane or significant, he found that, once the PST files from the Email Server Copy and the appropriate program to access these files were installed, SP asked his assistant to conduct searches of the emails roughly on a “weekly” basis. The motion judge concluded that the appellants had access to privileged communications “for a long period” and some of the communications were reviewed under SP’s direction.
The Court held that there was ample evidence to support the motion judge’s finding and held that the appellants provided no evidence of what they actually reviewed, and thus, they failed to rebut the presumption of prejudice.

(2) No.
The Court found that the motion judge did not hold or imply that a stay is always warranted whenever the presumption of prejudice has not been rebutted. The motion judge assessed the significance of the privileged information to the litigation in coming to his decision to stay the proceedings and found that the privileged information was relevant to the transaction at issue in the litigation. The Court noted that the motion judge considered other possible remedies but noted that the appellants did not discharge their onus of rebutting the presumption of prejudice. The Court held that the motion judge did not err in his holding that access to privileged information, such as legal opinions about the transaction, risks serious prejudice.

The Court found that the motion judge’s determination of the appropriate remedy did not conflate presumed prejudice and remedy. Presumed prejudice is the precondition for imposition of any remedy and the lack of evidence on the scope of documentary review and the nature of documents accessed is relevant to fashioning the appropriate remedy. The Court found that the motion judge correctly took all of these factors into consideration before addressing possible remedies.

(3) No.
The Court agreed with the appellants that the motion judge mistakenly stated that the appellants had the onus of showing that another remedy would cure the problem, as the onus is on the respondents to show that a stay was the only appropriate remedy. However, Court maintained that the motion judge applied the correct analysis.
The motion judge noted that the appellants had access to the privileged communications over an extended period, the documents were about the very transaction at issue, and some of those documents were searched and reviewed by SP’s assistant under his direction. Further, the motion judge found that the appellants’ actions to access the respondents’ privileged documents were intentional. The Court noted that the motion judge was entitled to presume that the respondents suffered significant and ongoing prejudice for a prolonged period. Thus, the Court held that the motion judge did not err in holding that a stay was warranted because there was significant presumed ongoing prejudice to the respondents. Finally, the Court noted that given the serious prejudice resulting from the breach by the appellants themselves (not their counsel), the motion judge correctly held that no remedy short of a stay would cure the problem.

(4) No.
The Court held that because SP was responsible for managing and conducting the litigation on behalf of all the appellants and on cross-examination, the discussions surrounding the litigation were affected by his access to privileged communications, and those concerns could not be resolved.

SHORT CIVIL DECISIONS

5000933 Ontario Inc. v. Mahmood, 2023 ONCA 58

[MacPherson, Hoy and Coroza JJ.A.]

Counsel:

O. Hoque and F.M. S. B. Hossain, for the appellants
C. D. Neil, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Breach, O. Reg. 332/12 Ontario Building Code

Bitaxis Estate v. Bitaxis, 2023 ONCA 66

[MacPherson, Hoy and Coroza JJ.A.]

Counsel:

D. M. Smith and M. D. Lahn, for the appellant
B. D. Arkin, for the respondent

Austin v. House, 2023 ONCA 55

[Feldman, Lauwers and Roberts JJ.A.]

Counsel:

M. H. Tweyman, for the appellant
N. Wilson, for the respondent

Lalande v. Lalande, 2023 ONCA 68

[MacPherson, Brown and Coroza JJ.A.]

Counsel:

S. M. Fehrle, for the appellant
C. Allen, for the respondent

Keywords: Family Law, Financial Disclosure, Duty to Disclose, Non-Compliance, Motion to Strike, Roberts v. Roberts, 2015 ONCA 450, Family Law Rules, O. Reg. 114/99, r.1(8).

Hategan v. Frederiksen, 2023 ONCA 57

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

Counsel:

J. Kary, for the moving party
A. N. Wood and L. Cadieux-Shaw, for the responding party, E.M.F
M. Freiman, for the responding party B.F.

Keywords: Perfecting Appeal, Extension of Time, Delay, Setting aside Registrar’s Dismissal, Prejudice, Oliveira v. Oliveira, 2022 ONCA 218, Issai v. Rosenzweig, 2011 ONCA 112

Ducharme v. Thibodeau, 2023 ONCA 60

[Feldman, Lauwers and Roberts JJ.A.]

Counsel:

A. Rogerson and C. Dookie, for the appellant
O. D. Thomas, for the respondent

Keywords: Wills and Estate, Notice of Objection, Withdrawal of Notice of Objection, Standing, Costs, Substantial Indemnity.

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.

COURT OF APPEAL SUMMARIES (JANUARY 16, 2023 – JANUARY 20, 2023)

By John Polyzogopoulos on January 22, 2023

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

Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of January 16, 2023.

Continue Reading

In Moran v. Fabrizi, the appellant, TM, was injured in a car accident as the passenger of a car being driven by EI. The respondent, OF, ran a red light causing the car accident. TM sued OF, EI and TM’s mother, the car’s owner. TM settled for $220,000. OF then sued DC in a third party action seeking contribution and indemnity of the settlement amount claiming DC had engaged in acts of violence (road rage) preceding the accident. OF claimed that DC’s actions contributed to OF running the red light. The trial judge found DC to be 50 percent responsible for causing TM’s injuries and required him to indemnify OF for $110,000. DC argued that the trial judge erred in the application of the test for causation.

The Court found that the trial judge accurately set out the law of causation in Clements v. Clements, noting that the trial judge’s language of application tracked closely with DC’s assertion that “[I]nherent in the phrase ‘but for’ is a requirement that [DC’s] negligence was necessary to bring about the injury.” DC argued that OF did not succeed in making out the ‘agony of the moment’ (emergency) defence at trial and so DC’s behaviour could not in law be a cause of the accident. The Court clarified that the doctrine can provide a defence that goes to the standard of care element of negligence. The defendant can use it as a shield against responsibility for conduct in a situation of emergency or panic. However, the doctrine does not have any bearing on the causation analysis. The Court upheld the trial judge’s decision.

Other topics this week included failing to close on a APS for land, stay pending appeal in a very contentious estates dispute involving a 100 year old litigant represented by a litigation guardian, and the partial lifting of an automatic stay pending appeal on the basis of undue hardship in a corporate divorce dispute.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferriera
Blaney McMurtry LLP
416.597.4895 Email

Civil Decisions

Hrovic v. Hrovic, 2023 ONCA 27

Keywords: Corporations, Family Law, Civil Procedure, Orders, Appeals, Stay Pending Appeal, Lifting of Automatic Stay, Rules of Civil Procedure, r. 63.01(1), r. 63.01(2), r. 63.01(5), Ryan v. Laidlaw Transportation Ltd. (1994), 19 O.R. (3d) 547 (Ont. C.A.), Horeca Financial Services v. Light, 2014 ONCA 811, SFC Litigation Trust v. Chan, 2018 ONCA 710, Mortimer v. Cameron, [1993] O.J. No. 4169 (C.A.)

Gefen v. Gefen, 2023 ONCA 19

Keywords: Wills and Estates, Capacity, Estate Trustees During Litigation, Civil Procedure, Orders, Appeals, Stay Pending Appeal, Substitute Decisions Act, S.O. 1992, c. 30, s. 22, Rules of Civil Procedure, r. 7.03, 39.03, Gefen Estate v. Gefen, 2022 ONCA 174, Calvert (Litigation Guardian of) v. Calvert (1997), 32 O.R. (3d) 281

Nguyen v. Zaza, 2023 ONCA 34

Keywords: Breach of Contract, Real Property, Agreements of Purchase and Sale of Land, Time of the Essence, Deposits, Forfeiture, 1854329 Ontario Inc. v. Cairo, 2022 ONCA 744, 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, Domicile Developments Inc. v. MacTavish (1999), 175 D.L.R. (4th) 334 (Ont. C.A.), Benedetto v. 2453913 Ontario Inc., 2019 ONCA 149, R. v. R.E.M., 2008 SCC 51

Moran v. Fabrizi, 2023 ONCA 21

Keywords: Torts, Negligence, Motor Vehicle Accident, Causation, But For Test, Standard of Care, Defences, “Agony of the Moment”, Insurance Coverage, Priority Dispute, Negligence Act, R.S.O. 1990 c. N. 1., Bell Canada v. Cope (Sarnia) Ltd., (1980), 31 O.R. (2d) 571 (C.A.), 119 D.L.R. (3d) 254, Pet Valu Inc. v. Thomas, 2004 CarswellOnt 370 (S.C.), J.K. v. Ontario, 2017 ONCA 902, Clements v. Clements, 2012 SCC 32, Isaac Estate v. Matuszynska, 2018 ONCA 177, Report on Contribution Among Wrongdoers and Contributory Negligence (Toronto: Ontario Law Reform Commission, 1988), Erika Chamberlain & Stephen Pitel, eds, Fridman’s The Law of Torts in Canada, 4th ed (Toronto: Carswell, 2022), Fleming in the Law of Torts, 6th ed. (Sydney: Law Book Co., 1983)

Short Civil Decisions

Royal Bank of Canada v. Hogarth, 2023 ONCA 30

Keywords: Civil Procedure, Summary Judgment, Deference

LeBlanc v. Alghamdi, 2023 ONCA 37

Keywords: Civil Procedure, Vexatious Litigants, Frivolous, Vexatious and Abuse of Process, Courts of Justice Act, R.S.O. 1990, c. C.43, s.140, s.19, s. 140, Rules of Civil Procedure, r. 59.06

CIVIL DECISIONS

Hrovic v. Hrovic, 2023 ONCA 27

[Coroza J.A. (Motion Judge)]

Counsel:

G.M. Sidlofsky, for the responding party (M53912)/moving party (M53914)
D.A. Taub and S. Mosonyi, for the moving party (M53912)/responding party (M5914)

Facts:

The underlying action related to a division of a business built by the appellant, DH and respondent, MH. The trial judge was required to determine the respective shareholdings of the parties and the value of that shareholding. The trial judge determined that the respondent held 50 percent of the company and the value of the business was $10,800,000. The Trial Judge ordered that the appellant pay the respondent $5,400,000 to purchase all her shares in the company. The appellant appealed and an automatic stay of the trial order was imposed pursuant to r. 63.01(1) of the Rules of Civil Procedure.

There were two motions before the Court. The first was a motion by which the appellant wanted to file an extended factum of 45 pages (exceeding the 30-page limit).

In the second motion, the respondent requested that the automatic stay pending appeal be lifted in respect of $2,686,437.31. According to the respondent, this amount represented the appellant’s “best position” were he to succeed on all issues in the appeal. In other words, this is the amount that the appellant owes the respondent even taking into account his valuation advanced at trial. The respondent argued that she will suffer financial hardship if the stay is not lifted, and the appellant’s appeal in respect of that amount is not meritorious.

Issues:

(1) Should the order be made allowing the appellant to submit an extended factum (exceeding 30 pages)?

(2) Should the Court lift the automatic stay imposed pursuant to r. 63.01(1)?

Holding:

Motion granted.

Reasoning:

(1) Yes.

The Court was persuaded by the appellant’s submission that there was some complexity to this matter and granted an extension to file a factum that is 45 pages in length, particularly since the respondent took no position. The Court also granted permission for the respondent to file a factum of equal length.

(2) Yes.

The Court noted that an automatic stay should only be lifted in cases of demonstrable and unusual hardship to the respondent, and when a reasonable measure of protection can be afforded to the appellant to allow recovery if the appeal succeeds. The Court reiterated the three principal factors that courts assess to determine whether to lift an automatic stay pending appeal: (1) the financial hardship to the respondent to the appeal if the stay is not lifted; (2) the ability of the respondent to repay or provide security for the amount paid; and (3) the merits of the appeal.

The Court reviewed the decision of SFC Litigation Trust v. Chan, where Brown J.A. held that while the first factor goes to the respondent’s need, the latter two factors reduce the risk that a successful appellant will be forced to bear the loss, rendering the appeal moot. The Court may impose this risk on an appellant in an appropriate case, but there is no reason to do so absent evidence of significant prejudice to the respondent from the stay.

The Court disagreed with the appellant’s argument that the respondent had not provided evidence of financial hardship. The respondent’s unchallenged affidavit stated that on March 1, 2020, the appellant removed her as an officer and director of the business in order to unilaterally run it, and dismissed her. The respondent has commenced a separate lawsuit against the business and the appellant for damages for wrongful dismissal, unpaid salary, and unpaid vacation pay, among other things. The respondent argued that the trial judge’s finding about her stake in the business raised the question about whether the appellant had any legal authority to terminate her from the business. Significantly, the respondent asserted in her affidavit that since her termination, the COVID-19 pandemic made it difficult for her to find a new job because she had been working in a highly specialized field with the business since 1998. She had no income following her termination from the business for more than two years until she began a new job in April 2022. The Court found that these assertions stood unchallenged.

With respect to the second requirement, the Court found that the respondent had not proposed any means of ensuring that the proceeds realized from lifting the stay pending the appeal’s outcome would be secured. That said, the Court found that this factor supported the respondent’s request in the context of the appeal because the appellant’s own position advanced in his draft factum was that the judgment should be set aside, and the appellant should be required to pay $1,874,400 for the respondent’s interest in the company.

As the Court understood his argument, the appellant asserted that any amount owing to the respondent, even on a successful appeal would be offset by substantial costs in the court below and on the appeal. The appellant claimed that he incurred costs in the proceeding below in the amount of $507,327.13 and to date, the costs of the appeal are at about $125,000. The Court noted that the trial judge awarded costs payable to the respondent in the amount of $325,000.

The Court further found that even accepting the appellant’s argument that he should be awarded full recovery of these costs if successful on appeal, would still leave a payment of a substantial amount of money to the respondent. Therefore, the rationale of ensuring that the appellant’s prospect of recovering monies owed to him if successful on an appeal through the mechanism of an automatic stay does not apply when, by his own admission, he would not have to bear the loss, because he acknowledged that this is money that is owed to the respondent to purchase her interest.

The Court further explained that, with respect to the merits of the appeal, the appeal was not particularly a strong one. The Court found that majority of the grounds of appeal took issue with the trial judge’s findings of fact, together with alleged errors of law in making the finding that the respondent was entitled to a 50 percent ownership interest in the business. The Court’s view was that the grounds of appeal were grounded in factual findings and unlikely to succeed.

In sum, the Court found that if the automatic stay imposed by r. 63.01 was intended to offer some protection to an appellant against payments which it might not eventually be obligated to make, thus putting it to the uncertainties of recovery, then the exercise of the Court’s discretion to lift the stay in respect of an amount was appropriate if the risk that the automatic stay seeks to prevent is non-existent.

The Court found that it was in the interests of justice to lift the stay to release some funds to the respondent.

Gefen v. Gefen, 2023 ONCA 29

[George J.A. (Motion Judge)]

Counsel:

B. Salsberg and I. Matckars, for the moving party H.G. (“HG1”)
R. Moldaver, for the moving party H.G.
A. Fishman, for the responding party H.G. (“HG2”)
A. Rabinowitz and S. Blydorp, for S.E., Guardian of Property and Litigation Guardian for H.G.
C. Graham, for the Y.G. Estate

Facts:

In 2013, after the death of her husband EG, HG commenced an action against her sons, HG1 and HG2. In that initial action, HG2 and YG (HG’s other child) counterclaimed, and HG1 brought a third-party claim. The trial ended in divided success. While there was no judgment against HG1, Kimmel J. found that he had unconscionably procured approximately $8.66 million of HG’s assets. The appeal of that decision was dismissed by the Court. Kimmel J. also ordered that the Estate (of which HG is the trustee and sole beneficiary) pay more than $1 million in costs to HG1, YG, and HG2.

In 2021, HG2, in his capacity as a creditor of the Estate (by virtue of the unpaid costs award from trial) commenced an application and brought a motion which sought a declaration that HG was incapable of instructing counsel or managing property, and for the appointment of a litigation guardian. On November 4, 2022, the motion judge granted the motion.

After the application was commenced, HG2 sought to compel an examination of HG pursuant to r. 39.03. The motion judge granted the order, observing at the time that it “should not have been necessary” and that the “result of the motion was inevitable”. HG was examined in February 2022 when, at least according to HG2, HG’s counsel, Mr. M, repeatedly, and improperly, interrupted and refused “dozens of basic and essential questions”. While Mr. M did not agree with this characterization, HG2 further claimed that the answers HG did provide were “illogical, tangential, and/or confused”. This led to the capacity assessment, and ultimately the motion judge’s finding that HG was incapable of instructing counsel or managing her property.

The motion judge appointed SE as litigation guardian and guardian of property; ordered costs against Mr. M personally; and restrained Mr. M from representing HG in any proceeding concerning the Estate. She also ordered that HG1 not serve as HG’s attorney or litigation guardian.

HG2 sought to pass over the appointments of HG as the sole Estate Trustee of his father EG’s estate (“Estate”), and the appointment of himself and HG1 as alternate trustees. The Estate is presently being administered by an Estate Trustee during Litigation (“ETDL”) as ordered by Newbould J. on January 27, 2015.

HG and HG1 (“moving parties”) appealed the motion judge’s order, which, inter alia, (1) appointed SE as Litigation Guardian and Guardian of Property for HG; (2) directed SE to attend mediation on HG’s behalf and that he have full authority to settle any objections made by HG (3) removed Mr. M as HG’s counsel of record (in all matters related to the Estate); (4) lifted a September 5, 2022 stay of all litigation in which HG was involved; (5) directed HG1 to pay the costs he had been ordered to pay to that point, within 15 days, and HG to similarly pay all outstanding costs orders within 30 days; and (6) ordered Mr. M to pay $3,500 in costs personally. Pending hearing of their appeal, the moving parties sought a stay of the motion judge’s order.

HG2 opposed the request for a stay, as did YG’s estate, which was owed costs by EG’s estate. SE also opposed a stay, taking the position that because he was fully accountable to the court for any decision he made, or action he took on behalf of HG, there would be no irreparable harm to the moving parties if the motion judge’s order took immediate effect and was operative pending the outcome of the appeal.

Issues:

(1) Is there a serious issue to be tried?

(2) Would the moving parties suffer irreparable harm if the stay was not granted?

(3) Does the balance of convenience test favour granting the stay?

Holding:

Motion dismissed.

Reasoning:

(1) No.

The Court agreed with HG2’s counsel that many of the moving parties’ complaints about the motion judge’s order were procedural in nature, and did not go the merits per se. The Court explained that the argument that the motion judge somehow usurped the authority of one of her judicial colleagues – who was scheduled to hear the main application on a later date – had no relevance or bearing on the issues before the Court. The Court found that the motion judge had the authority to hear the motion and make the order she did. The Court further explained that there was no “error” or procedural misstep that would warrant the Court’s intervention.

The Court also addressed the moving parties’ concerns over the fact that there was no viva voce evidence from Ms. P, the person who assessed HG’s capacity. To this end, the Court pointed out that Mr. M did not swear an affidavit that spoke to HG’s ability to instruct him. The Court found that there was no evidence in support of the position that HG was capable of instructing counsel and noted that the alternative assessor, Mr. C, only formed an opinion as to her capacity to manage property, a lower standard. Thus, the Court found, that in the circumstances, given HG’s age (100 years old) and her examination, and in light of the uncontradicted evidence that she was incapable, the motion judge’s finding that HG lacked capacity to instruct counsel was likely unassailable. Moreover, her strong reasons for preferring Ms. P’s evidence over Mr. C’s likely make her finding that HG lacked capacity to manage her property similarly unassailable.

The Court rejected the moving party’s argument that HG2 lacked standing to seek passing over the appointments of HG. First, the Court noted that on the record it did not appear that HG2’s ability to seek an order passing over HG as estate trustee was argued before the motion judge. Second, pursuant to r. 7.03 and s. 22 of the Substitute Decisions Act, “any person” has standing to seek the appointment of a guardian of property, and any applicant has standing to seek the appointment of a litigation guardian for the respondent in an application. The Court explained that the motion judge had weighed in on this question in her January 19, 2022 endorsement (on a r. 39 motion), and in her June 6, 2022 decision (on HG2’s motion to appoint a capacity assessor). In both instances, HG sought leave to appeal to the Divisional Court, which was denied. Therefore, the Court concluded this was not a serious issue to be heard on appeal.

(2) No.

The Court found that there would be no irreparable harm to either HG or HG1 should Court to deny the request for a stay. HG, who had been found to be incapable, presently has a guardian managing her property (SE). Pending the appeal, SE will continue in this role. SE is an officer of the court who will have to account for every action he takes on HG’s behalf. The Court rejected the argument that, if a stay was not granted, HG would be unable to contest the ETDL’s ongoing passing of accounts. The Court held that this argument continued to ignore SE, the function he served, and his legal obligations.

(3) No.

The Court noted that on a balance of convenience, HG would not be inconvenienced were a stay not granted. As for HG1, the motion judge’s order did not affect his rights. Therefore, the Court held that the balance of convenience favoured allowing the motion judge’s order to take effect and to continue pending the outcome of the appeal.

Nguyen v. Zaza, 2023 ONCA 34

[Zarnett, Thorburn and Copeland JJ.A.]

Counsel:

A. Duggal and G.S. Dhillon, for the appellant
V. Scalisi, for the respondents

facts:

On December 19, 2020, the parties entered into an Agreement of Purchase and Sale (the “APS”) for to the sale of real property. The appellant was listed as the purchaser and the respondent son (“Junior”) was listed as the seller. The APS stated that the closing date was November 15, 2021, and that time was of the essence. The APS was conditional on the appellant arranging financing and a satisfactory home inspection. However, the appellant released both of those conditions by a waiver signed on January 6, 2021.

On January 18, 2021, the respondent father (“Senior”) transferred title to the property to Junior and his wife for nominal consideration. On the closing date, the respondents tendered the documents required for closing. However, the appellant did not tender the purchase price. The motion judge found that at all times the respondents were ready, willing, and able to complete the sale in accordance with the APS.

issues:

(1) Did the motion judge err in her conclusion that the appellant was responsible for the failure to close the sale when she did not tender the purchase price on the closing date?

holding:

Appeal dismissed.

reasoning:

(1) No.

The appellant first argued that, because Senior was allegedly the respondent who signed the APS and held title at that time, Junior was not entitled to require the appellant to complete the sale on the closing date. Further, the appellant argued that her consent was required for transfer of title on January 18, 2021. The Court disagreed. First, the motion judge found, as a fact, that Junior signed the APS. The Court held that this finding was supported by the record and there was no reason to interfere with it. Second, as stated in 1854329 Ontario Inc. v. Cairo, in order for a seller to be entitled to the sale price at closing, the seller need only be in a position to ensure that good title is conveyed to the purchaser. The Court held that the motion judge was correct in finding that there was no requirement to hold title on the date that the APS is signed. Lastly, the Court noted that the appellant was made aware of the change to title and entered into an Amended APS to reflect this change. The closing date remained the same and time continued to be of the essence.

With respect to the Amended APS, the appellant argued that the respondents ought to have provided it earlier than the date of closing. The Court noted that the factual findings of the motion judge did not support this argument. The APS gave the appellant until November 2, 2021 to examine title. The respondents were not made aware that a lawyer was conducting the transaction for the appellant until November 3, 2021. This lawyer did not have a copy of the APS, and on request, counsel for the respondents sent a copy that same day. It was not until then that the appellant’s lawyer requested the Amended APS. On the record before the motion judge, she found that the further delay was on account of the appellant’s lawyer. The Court found no palpable and overriding error with this finding.

The Court concluded that the motion judge correctly held that a seller is entitled to refuse an extension of time to close where a buyer seeks an extension because they do not have financing. Furthermore, in the absence of a specific term in the APS for the disposition of the deposit, the deposit is intended as security for the buyer’s performance of the contract, and is forfeited to the seller if the buyer fails to close.

Moran v. Fabrizi, 2023 ONCA 21

[Lauwers, Paciocco and Zarnett JJ.A.]

Counsel:

F. A. Benedetto and J.C. Rioux, for the appellant
D. Zarek and M. A. Harper, for the respondent

facts:

TM was injured in a car accident. She was a passenger in a minivan driven by her grandmother, EI. OF ran a red light and his car collided with the minivan. In the main action, TM sued three individuals: OF, as the owner and driver of the car that struck the minivan, EI, who was the driver of the minivan, and TM’s mother as the minivan’s owner. TM did not sue DC (who had engaged in an act of road rage against OF). TM’s action was settled for $220,000. OF sued DC in the third party action seeking contribution and indemnity for the settlement under s. 5 of the Negligence Act.

The fight in the third party action was between OF’s insurer, who settled with TM, and DC’s insurer, over what proportion each policy would be required to contribute to the payment of the settlement. The trial judge found in favour of OF. The trial judge found that DC’s “threats of physical violence amount to intentional tortious conduct” and that “the accident would not have occurred but for DC’s conduct.” The trial judge ultimately found DC to be 50 percent responsible for causing TM’s injuries and required him to indemnify OF for $110,000.

issue:

Did the trial judge err in his understanding and application of the test for causation that applies in determining whether DC “caused or contributed to” the accident in which TM was injured, within the meaning of ss. 1 and 5 of the Negligence Act?

holding:

Appeal dismissed.

reasoning:

No.

The Court held that to trigger third party indemnity under s. 5 of the Negligence Act, there need not be negligence on the part of both parties. One party’s tort can be negligence and the other party’s tort intentional. The fact that DC’s tort was intentional while OF’s tort was negligence had no bearing on whether DC must share OF’s liability under s. 5 of the Negligence Act.

The Court held that it was necessary for OF to prove that DC’s tortious conduct was causally linked to TM’s injuries. The Court noted that the trial judge accurately set out the law of causation from Clements v. Clements (“Clements”). The Court held that the trial judge’s language of application tracked closely with DC’s assertion that “[I]nherent in the phrase ‘but for’ is a requirement that [DC’s] negligence was necessary to bring about the injury.” Accordingly, the Court held that the trial judge applied the right test to the facts.

Further, the Court saw no basis in the trial judge’s sparse comment for doubting the conviction in his determinative finding on the “but for” test. The Court held that the trial judge was simply adding the superfluous observation that, had he been unable to make a factual causation finding by applying the “but for” test, DC would still not have escaped liability because the “material contribution” test would have applied and would have been satisfied. The Court saw no basis or need to apply the “material contribution” test, noting that this was not a case where “special circumstances” posed by “difficulties of proof that multi-tortfeasor cases may pose” require the “robust and common sense application of the ‘but for’ test of causation” to be replaced by the “material contribution” test, as per Clements.

DC argued that OF’s own actions in responding to DC’s aggression constituted an intervening act that broke the causal link between DC’s actions and TM’s injuries. The Court rejected this argument, stating that minimizing DC’s role as merely an ancillary aspect of the ultimately negligent decision of OF did not absolve DC, since the trial judge had found that OF’s negligent decision was not the one and only effective cause of TM’s injuries.

DC argued that since OF did not succeed in making out the ‘agony of the moment’ defence at trial, DC’s behaviour could not in law be a cause of the accident. The Court stated that the doctrine can provide a defence that goes to the standard of care element of negligence. The defendant can use it as a shield against responsibility for conduct in a situation of emergency or panic. The doctrine can be used to excuse a defendant’s conduct that might otherwise be considered negligent.

The Court held that in the circumstances, only OF could have used the doctrine of agony of the moment or emergency as a defence, but he did not plead it. DC could not raise this defence against liability for the obvious reason that he created whatever emergency there was. Similarly, DC could not rely on the trial judge’s implicit rejection of OF’s “agony of the moment” defence to argue that the causal chain between DC’s intentional tortious behaviour and TM’s injuries is broken or too remote. The “agony of the moment” defence only goes to the standard of care element of negligence (as a reasonable motorist). The doctrine did not have any bearing on the causation analysis.

The Court concluded that it was not open to DC to capitalize on the doctrine of “agony of the moment” to escape liability. Further, OF continued to owe a duty of care towards TM and failed to meet the applicable standard of care. But that does not absolve DC nor does OF’s breach of the duty of care constitute an intervening cause. The Court found that that the appellant framed his grounds of appeal as errors of law, but in substance, the submissions alleged errors of fact. The trial judge correctly found that the appellant’s conduct was a “but for” cause of the plaintiff’s injuries. Further, the Court found that the appellant failed to identify any reviewable errors with the trial judge’s finding.

SHORT CIVIL DECISIONS

Royal Bank of Canada v. Hogarth, 2023 ONCA 30

[Zarnett, Thorburn and Copeland JJ.A.]

Counsel:

G.H. and N.C.L., acting in person
J. Satin, for the respondent

Keywords: Civil Procedure, Summary Judgment, Deference

LeBlanc v. Alghamdi, 2023 ONCA 37

[Feldman, Lauwers and Roberts JJ.A.]

Counsel:

L.A., acting in person
J.F. Lalonde, for the respondents

Keywords: Civil Procedure, Vexatious Litigants, Frivolous, Vexatious and Abuse of Process, Courts of Justice Act, R.S.O. 1990, c. C.43, s.140, s.19, s. 140, Rules of Civil Procedure, r. 59.06

COURT OF APPEAL SUMMARIES (JANUARY 9, 2023 – JANUARY 13, 2023)

By John Polyzogopoulos on January 14, 2023

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

Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of January 9, 2023.

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In Ontario v. Madan, Ontario sued SJM, a senior IT employee with Ontario for fraud. Ontario also sued SJM’s wife and two sons, alleging that the family members were complicit in, and/or beneficiaries of a scheme that defrauded Ontario of millions of dollars. The fraud related to the government’s Support for Families Program, which was commenced in April 2020 to help families with the costs associated with at-home learning necessitated by the pandemic. The appellant family members (“the appellants”) filed separate statements of defence and counterclaimed against Ontario on the basis that it was contributorily negligent in that it failed to take reasonable steps to prevent and limit the frauds perpetrated by SJM. The appellants further alleged that Ontario, as the fraudster’s employer, was vicariously liable for his “wrongful acts” including his invasion of the appellants’ privacy. The court below struck much of their defence and counterclaims as disclosing no reasonable cause of action or defence. The Court upheld that decision.

In Northwinds Brewery Ltd. v. Caralyse Inc., the Court largely upheld the trial judge’s decision finding no default by the Tenant, and that the Tenant had therefore validly exercised an option to extend the Lease for a second five-year term. However, the Landlord was successful on appeal in getting more occupation rent (although Court did not call it “occupation rent”, but rather “non-lease-based rent”) for a part of the common areas that the Tenant was exclusively occupying (a shed the Tenant had installed). The court below had limited “occupation rent” arrears to two years on the basis of the regular two-year limitation period. However, the Court found that the Real Property Limitations Act applied to this claim to “non-lease based” rent arrears, whether it was characterized as rent or damages, since the amount awarded fell within the RLPA’s definition of “rent” as “periodical sums of money charged upon or payable out of land.”

In Assayag-Shneer v. Shneer, the Court confirmed that courts do not have authority under the Divorce Act to amend support orders in the absence of a material change in circumstances. However, courts are entitled to exercise their discretionary power to alter post-judgement interest pursuant to the Courts of Justice Act on arrears for a default of a support order notwithstanding a finding that there is no material change in circumstances. Perhaps most interestingly, the Court determined that the common law doctrine on the non-enforceability of contractual penalties and section 98 of the Courts of Justice Act, which gives a court the power to relieve against penalties and forfeitures, are inapplicable to vary the terms of a consent court order. Once a clause in a settlement is inserted in a consent court order, it cannot be set aside by a court later as penal.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferriera
Blaney McMurtry LLP
416.597.4895 Email

Civil Decisions

Ontario v. Madan, 2023 ONCA 18

Keywords: Torts, Intrusion Upon Seclusion, Breach of Privacy, Fraud, Conversion, Unjust Enrichment, Negligence, Contributory Negligence, Vicarious Liability, Crown Liability, Remedies, Mareva Injunctions, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, No Reaasonable Defence, Courts of Justice Act, R.S.O. 1990, c. C.43, S. 98, Civil Remedies Act, 2001, S.O. 2001, c. 28, Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Sched. 17, Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, Man Financial Canada Co. v. Keuroghlian, 2008 ONCA 592, Garland v. Consumers’ Gas Co., 2004 SCC 25, Love v. Turf Management Systems Inc. (1997), 38 B.L.R. (2d) 70 (Ont. Gen. Div.), Jones v. Tsige, 2012 ONCA 32, Owsianik v. Equifax Canada Co., 2022 ONCA 813, Bazley v. Curry, [1999] 2 S.C.R. 534, Evans v. Bank of Nova Scotia, 2014 ONSC 2135, Walters (Litigation Guardian of) v. Ontario, 2017 ONCA 53, Ontario v. Phaneuf, 2010 ONCA 901, Bruno v. Dacosta, 2020 ONCA 602, Francis v. Ontario, 2021 ONCA 197, Just v. British Columbia, [1989] 2 S.C.R. 1228, Aylmer Meat Packers Inc. v. Ontario, 2022 ONCA 579, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Darmar Farms Inc. v. Syngenta Canada Inc., 2019 ONCA 789

Assayag-Schneer v. Schneer, 2023 ONCA 14

Keywords: Family Law, Divorce, Support, Orders, Variation, Material Change in Circumstances, Contracts, Minutes of Settlement, Penal Clauses, Setting Aside, , Civil Procedure, Post-Judgment Interest Rate, Variation, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 15.2(4)(c), 15.2(6), 17(1), 17(4.1), Courts of Justice Act, R.S.O. 1990, c. C.43., ss. 98, 129, 130, Family Law Rules, O. Reg. 114/99, r. 25(19), Crosbie v. Crosbie, 2012 ONCA 516, L.M.P. v. L.S., 2011 SCC 64, Willick v. Willick, [1994] 3 S.C.R. 670, Robert McAlpine Ltd. v. Byrne Glass Enterprises Ltd., [2001] O.J. No. 3208 (C.A.), Eastwalsh Homes Ltd. v. Anatal Development Corporation et al. (1995), 26 O.R. (3d) 528 (Gen. Div.), Peachtree II Associates – Dallas L.P. v. 857486 Ontario Ltd. (2005), 76 O.R. (3d) 362 (C.A.), Dunlop Pneumatic Tyre Co. Ltd. v. New Garage & Motor Co. Ltd., [1915] A.C. 79, (H.L.), Herskovits v. Herskovits (2001), 17 R.F.L. (5th) 339 (Ont. S.C.)

Sutton v. Sutton, 2023 ONCA 16

Keywords: Family Law, Spousal Support, Equalization of Net Family Property, Imputed Income, Civil Procedure, Appeals, Fresh Evidence, Family Law Act, R.S.O. 1990, c. F.3, s. 33(10), Palmer v. The Queen, [1980] 1 S.C.R. 759

Spot Coffee Park Place Inc. v. Concord Adex Investments Limited, 2023 ONCA 15

Keywords: Contracts, Interpretation, Exclusion Clauses, Real Property, Commercial Leases, Torts, Negligent Misrepresentation, Civil Procedure, Appeals, Standard of Review, Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, D.L.G. & Associates Ltd. v. Minto Properties, 2015 ONCA 705, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29, Ontario First Nations (2002) Limited Partnership v. Ontario Lottery Gaming Corporation, 2021 ONCA 592

Northwinds Brewery Ltd. v. Caralyse Inc., 2023 ONCA 17

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Rentable Area, Options to Extend, Right to Exercise, Default, Remedies, Occupation Rent, , Civil Procedure, Limitation Periods, Costs, Partial Indemnity, Proportionality, Reasonable Expectations, Rules of Civil Procedure, r. 57, Limitations Act, 2002, SO 2002, c 24, Sched B, s. 17(1), Real Property Limitations Act, RSO 1990, c L15, Pickering Square Inc. v. Trillium College Inc., 2014 ONSC 2629, Sterling Waterhouse Inc. v. LMC Endocrinology Centres (Toronto) Ltd., 2015 ONSC 3987, Shewchuk v. Blackmont Capital Inc., 2016 ONCA 912, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Smith Estate v. Rotstein, 2011 ONCA 491, Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.)
Short Civil Decisions

Chiappino & Associates Limited v. 6891799 Canada Inc., 2023 ONCA 22

Keywords: Costs Endorsement

Taylor v. Hanley Hospital Inc., 2023 ONCA 25

Keywords: Costs Endorsement

Kudrocova v. Kronberger, 2023 ONCA 26

Keywords: Family Law, Parenting, Decision-Making, Parental Alienation, Variation, Material Change in Circumstances, De Facto Status Quo

CIVIL DECISIONS

Ontario v. Madan, 2023 ONCA 18

[Doherty, Feldman and Trotter JJ.A.]

Counsel:

C. Du Vernet and C. McGoogan, for the appellants
C. Wayland and A. Huckins, for the respondent

Facts:

The respondent, His Majesty the King in Right of Ontario (“Ontario”), sued SJM, his wife, SM, and two sons, CM and UM. SM, CM and UM are the appellants (“the appellants”). Ontario alleged that SJM, using his IT position at the Ontario Ministry of Education (the “Ministry”), defrauded Ontario of millions of dollars. Ontario further alleged that the appellants were complicit in, and/or beneficiaries of the fraud. The appellants filed separate statements of defence.

Ontario alleged two fraudulent schemes. The first scheme targeted the Support for Families Program (“SFFP”), to support at-home learning necessitated by the pandemic and administered by the Ministry to provide grants of $200 to $250 per student. Applications were made to the Ministry using the online process that SJM helped develop.

Ontario alleged that between April 2020 and August 2020, SJM and the appellants made thousands of fraudulent applications under the SFFP using fictitious names. The applications were approved and funds paid into one of the over 2,500 bank accounts opened by SJM in his name or names of the appellants. Ontario alleged that payments in excess of 10 million dollars were made into those accounts as a result of the fraudulent applications.

The second scheme alleged that SJM had been paid kickbacks by consultant vendors who obtained contracts with the Ministry. SJM was responsible for selecting vendors and signing off on consultants’ timesheets. Ontario alleged that the kickback scheme had been going on for at least ten years.

Ontario did not allege that the appellants participated in the kickback scheme. However, Ontario alleged that SJM diverted proceeds, directly and indirectly, from the scheme to himself and to the appellants, by way of money payments or by way of property/assets obtained from the proceeds of the scheme. Ontario alleged that SJM and the appellants were unjustly enriched at Ontario’s expense.

The appellants denied any knowledge of, or involvement in, the fraudulent schemes in their statements of defence. The appellants pleaded that Ontario was contributorily negligent in that it failed to take reasonable steps to prevent and limit the frauds perpetrated by SJM. They claimed Ontario’s damages should be reduced to reflect Ontario’s responsibility for the frauds.

The sons, CM and UM, pleaded that their father, SJM, had admitted to them that, without their knowledge or consent, he had deposited proceeds from the SFFP fraud into bank accounts in their names opened for that purpose. The wife, SM, pleaded that she was a victim of SJM’s identity theft, fraud, and “wrongful acts”. The appellants did not crossclaim against SJM.

The appellants did, however, counterclaim against Ontario, alleging that Ontario, as a result of the dishonesty, negligence and ineptitude of its employees, and inadequacy of its computer systems, was largely responsible for losses resulting from the frauds. The appellants claimed that several named employees of Ontario had engaged in various dishonest or negligent acts that had resulted in damage to the appellants. The counterclaims further alleged that Ontario, as SJM’s employer, was vicariously liable for his “wrongful acts” including his invasion of the appellants’ privacy through his use of their private information to open fraudulent bank accounts in their names into which he directed proceeds of the SFFP fraud.

Ontario moved to strike parts of the statements of defence, including the contributory negligence defences advanced by the appellants. Ontario also moved to strike the counterclaims in their entirety, with the exception of a wrongful dismissal claim made by SM. The motion judge struck the contested parts of the statements of defence and the counterclaims. The motion judge also refused leave to amend the pleadings.

Issues:

1) Did the motion judge err in striking the contributory negligence defences?

2) Did the motion judge err in striking the claims in the statements of defence and counterclaims relating to Ontario’s alleged misuse of the Mareva injunction?

3) Did the motion judge err in striking the allegation in the counterclaims that Ontario was vicariously liable for Sanjay’s SJM’s invasion of the appellants’ privacy?

4) Did the motion judge err in striking the allegations in the counterclaims that Ontario was either directly or vicariously liable to the appellants in negligence?

5) Did the motion judge err in not granting leave to the appellants to amend their pleadings?

Holding:

Appeal dismissed.

Reasoning:

(1) No.

The Court explained that the contributory negligence defence advanced by the appellants was predicated on Ontario’s alleged failure to take adequate steps to protect itself from the fraud perpetrated against it. Accordingly, the proposition that a fraudster’s liability for damages flowing from its fraud should be reduced to reflect a victim’s failure to protect itself from the fraud would, if accepted, strongly suggest that if perpetrated against the right victim, crime would indeed pay. However, the Court determined that a victim’s negligence or carelessness affords no defence, partial or otherwise, to an allegation of dishonesty.

Further, the appellants argued that Ontario’s failure to take reasonable steps to protect itself and others from the frauds constituted “misconduct”, which was considered when deciding whether Ontario should be entitled to equitable relief by way of its unjust enrichment claim. To establish unjust enrichment, Ontario must have shown, first, an enrichment of the appellants, second, a corresponding deprivation of Ontario and, third, an absence of a juristic reason for the enrichment.

The Court held that the appellants’ position was untenable in law and that there was no authority to suggest that a plaintiff’s carelessness or negligent conduct can demonstrate the kind of moral turpitude required to justify invoking the “clean hands” doctrine to deny what would otherwise be appropriate equitable relief based on unjust enrichment.

Lastly, the appellants contended that even if Ontario established the requisite criteria, the appellants were entitled to keep at least some of the indirect proceeds of fraud because Ontario failed to take proper steps to protect itself from fraud. The Court reasoned that on this approach, the appellants would become the beneficiaries of a windfall, occasioned by Ontario’s failure to protect itself from SJM’s fraud. The Court rejected this argument and noted that the result as proposed by the appellants would be a permanent financial loss for Ontario, the victim of the fraud, and a windfall gain for the appellants, bystanders to the fraud. That would be the antithesis of equity.

(2) No.

The Court held that the pleadings relating to the Mareva injunction and preservation order were properly struck. First, the appellants did not plead any material facts capable of supporting the claim that Ontario froze funds. The Court further held that without any reference in the pleadings to actual terms of the Mareva injunction or preservation order, there was no basis upon which the appellants could plead that the seizures were in contravention of the terms of the orders. Second, there was no allegation that any of the funds frozen by court order were frozen in violation of the terms of those orders. Finally, the Court held that the appellants’ bald claims that Ontario “abused the authority it obtained from this Honourable Court” and that Ontario “simply grabbed all the money it could find” were properly struck as entirely unsupported by any material facts in the appellants’ pleadings.

(3) No.

The Court reiterated the test for the tort of invasion of privacy, or intrusion upon seclusion which is met when the alleged tortfeasor invades or intrudes upon the private affairs or concerns of another. That invasion or intrusion must be intentional or reckless, and it must be sufficiently serious that a reasonable person would regard the invasion of privacy as highly offensive causing distress, humiliation or anguish: Jones v. Tsige; Owsianik v. Equifax Canada Co. The tort is complete without proof of pecuniary damage. Essentially, the tort of intrusion upon seclusion seeks to protect the integrity and autonomy of one’s personal information through the recognition of one’s right to control access to, dissemination of, and use of one’s private information by others.

The Court noted that, on the facts, as pleaded by the appellants, their right to control access to and use of their private information was compromised by SJM’s dishonest use of information entrusted to him by his family members to open bank accounts as a step to further a scheme to defraud the SFFP. The appellants allege that the use of the information to establish the accounts was an infringement of the appellants’ right to control their private information.

The Court noted that Ontario could only be vicariously liable if Ontario could be said to be legally responsible for SJM’s misuse of the appellants’ private banking information to establish the false accounts as a step in his scheme to defraud. However, the Court found that nothing alleged in the pleadings could support a finding that Ontario should be held vicariously liable for SJM’s invasion of the appellants’ privacy. The Court cited Bazley v. Curry, which dealt with the nature and scope of an employer’s vicarious liability for the actions of its employees to support their finding. Specifically, Bazley determined that “employers may justly be held liable where the act falls within the ambit of the risk that the employer’s enterprise creates or exacerbates”. The Court found that the risk that SJM would misuse private banking information entrusted to him by his family was not a risk “that the employer’s enterprise creates or exacerbates.” Nor was the violation of the appellants’ privacy rights by SJM’s misuse of their private banking information “so connected with the employment that it can be said that the employer has introduced the risk of the wrong”. The Court held that, in fact, there was no connection between SJM’s employment with Ontario and the wrong underlying the intrusion upon seclusion claim.

(4) No.

The motion judge held that under s. 8 of the Crown Liability and Proceedings Act (the “Act”), the Crown could not be held directly liable in tort. The Crown could be held vicariously liable for the tortious acts of its officers, employees or agents. Under the Act, Ontario is liable for torts committed by an officer, employee or agent of the Crown and Ontario’s liability in tort extends only to acts or omissions attributable to an officer, employee or agent of the Crown. Ontario’s tort liability is vicarious and depends on the plaintiff’s ability to prove the tortious conduct or omission of an officer, employee or agent of Ontario. The Court held that the vicarious nature of the Crown’s liability in tort under the Act is clear in s. 8 of the Act.

The Court agreed with the motion judge in its reasons to strike the claims alleging that Ontario was vicariously liable. The Court affirmed that the relationship giving rise to the requisite proximity must be one between identified officers, agents or employees of Ontario (including SJM) and the appellants. It is only if the appellants had properly pleaded the existence of the requisite proximity between identified Crown employees and the appellants that the inquiry could have properly turned to Ontario’s responsibility in law for the acts or omissions of those identified employees. The appellants did not to plead the existence of any special relationship between the appellants and any identifiable officer, agent or employee of Ontario. Instead, the appellants pleaded a “special relationship” with Ontario. The Court ruled that the claim failed on that ground alone.

The transfer of funds into accounts in the names of the appellants could not, on its own, establish the requisite proximity between the appellants and any employee, officer or agent of Ontario. The appellants could not claim proximity while also claiming that that they had no knowledge of the existence of the vast majority of accounts SJM had opened in their names, and no control over, or access to, any of those accounts. The appellants also did not plead any communication or form of contact, direct or indirect, with any employee, officer or agent of Ontario in respect of those accounts. Nor did the appellants claim any involvement in, or knowledge of, the SFFP applications that generated the funds deposited into the accounts. Finally, they did not claim any entitlement, or interest in any of the funds transferred into those accounts under the auspices of the SFFP. The Court concluded that the mere fact that Ontario and the appellants were both cheated by SJM as part of the same scheme did not create a “special relationship” giving rise to a duty of care owed to the appellants by any officer, agent or employee of Ontario.

(5) No.

The Court held that most of the deficiencies in the pleadings were not amenable to any possible amendment. To the extent that any of the pleadings may have been capable of amendment, the Court deferred to the motion judge’s discretion and her refusal to permit any amendment. The appellants had already amended their pleadings once, and they offered no concrete suggestions to the motion judge, or the Court, as to any appropriate amendments that could be made.

Assayag-Schneer v. Schneer, 2023 ONCA 14

[Miller, Zarnett and Coroza JJ.A.]

Counsel:

H.T. Strosberg, K.C. and E. Betts, for the appellant
J.K. Hannaford, for the respondent

Facts:

The parties were divorced by a judgment dated September 13, 1999. The parties entered into Minutes of Settlement (the “Minutes”), following which the court made an order that contained the terms of the Minutes (the “Order”). The Order was made on consent.
Paragraph 2 of the Order provided that the respondent was to pay the appellant a total of $388,000 as spousal support through a series of payments. Paragraph 3 of the Order provided that, upon the respondent’s default, the total amount owing would be doubled, plus $50,000. The respondent first defaulted in February 2001, at which time there was $228,000 outstanding on the Order.

The motion judge identified that, pursuant to s. 17(4.1) of the Divorce Act (the “Act”), a variation to a support order can be made where the court is satisfied that there has been a material change in circumstances. The motion judge found that the respondent had not demonstrated a material change in circumstance to seek a variation of the Order. However, he went on to find that Paragraph 3 of the Order was a “penalty”, and was therefore unenforceable and deleted it from the Order. The motion judge held that a finding of no material change in circumstance does not disentitle the court from finding a penalty clause unenforceable, but cited no authority for this proposition. Lastly, the motion judge varied the post-judgment interest payable on the arrears of spousal support, reducing it from the 6% rate specified in the Order to 3.5% on the ground that there had been a dramatic decline in interest rates and an extensive passage of time since the arrears started accumulating.

Issues:

1) Did the motion judge err in deleting a support provision of the divorce judgement in the absence of a material change in circumstances?

2) Did the motion judge err in varying the post-judgement interest rate on arrears in the absence of a material change in circumstances?

Holding:

Appeal allowed in part.

Reasoning:

(1) Yes.

Pursuant to L.M.P. v. L.S. (“LMP”), s. 17(4.1) of the Act is a threshold question. Accordingly, the Court found that the motion judge could not vary the Order without finding that there was a material change in circumstances. The Court noted that failure to meet the threshold question in s. 17(4.1) of the Act ought to have been dispositive of the motion to vary the Order.

In addition, the Court noted that the motion judged erred in conducting a de novo assessment of Paragraph 3 of the Order, determining it to be an unenforceable penalty. Relying on LMP, the Court noted that the motion judge ought not to consider the correctness of the Order. Rather, it is presumed that the judge who granted the Order knew and applied the law correctly. Furthermore, the Court noted that the common law doctrine of non-enforceability of contractual penalties only applies to contracts, not court orders. The doctrine does apply to family law agreements, however, the parties had the Minutes incorporated in the Order on consent. Therefore, the motion judged erred in applying this doctrine.

(2) No.

The statutory post-judgment interest rate is found at s. 129 of the Courts of Justice Act (the “CJA”). Pursuant to s. 130 of the CJA, a judge has the discretion to change the rate of interest referred to at s. 129. In Crosbie v. Crosbie, the Court found that the statutory post-judgment interest rate should apply unless there are compelling and exceptional reasons to change it. Crosbie further noted that a dramatic decline in interest rates over a period of time was a compelling and exceptional reason to impose a rate other than the statutory one. The Court found that there was no indication in the Act that the threshold question of finding a material change in circumstance had any application to a judge’s discretion to change the statutory post-judgement interest rate.

Sutton v. Sutton, 2023 ONCA 16

[Doherty, Zarnett and Sossin JJ.A.]

Counsel:

J.S., acting in person
M. Ibghi and T. Garton, for the respondent
Keywords: Family Law, Spousal Support, Equalization of Net Family Property, Imputed Income, Civil Procedure, Appeals, Fresh Evidence, Family Law Act, R.S.O. 1990, c. F.3, s. 33(10), Palmer v. The Queen, [1980] 1 S.C.R. 759

facts:

The appellant appealed the judgment and associated costs order that was made in favour of his wife, the respondent, after a trial of family law claims. The trial judge awarded the respondent an equalization payment of $362,703.28, which was to be partially satisfied by a transfer from the appellant’s pension. She also awarded the respondent a lump sum of $199,144 for retroactive and ongoing spousal support. She ordered that the balance of the equalization payment and the lump sum support were to be paid out of the proceeds of the sale of the matrimonial home, which she ordered be listed for sale. She gave the respondent the right to register a charge against the matrimonial home to secure payment of these amounts. The trial judge also awarded the respondent costs of $105,930, and gave her the right to register a charge against the matrimonial home to secure their payment.

The appellant did not call into question the legal principles that the trial judge applied to the facts she found. The appellant questioned the trial judge’s factual findings, pointing to other evidence and explanations that, he submitted, should lead the Court to substitute different factual conclusions for those reached by the trial judge. He also sought to introduce fresh evidence on the appeal.

issues:

(1) Did the trial judge made any reversible error in her credibility findings?

holding:

Appeal dismissed.

reasoning:

(1) No.
The appellant focused his submissions on three main points. First, the appellant challenged the trial judge’s conclusion that the respondent’s income potential was $46,000 per year, an amount she used in determining the quantum of spousal support that she ordered. He argued this amount was based on the respondent working as a personal care support planner, and did not consider her ability to earn income as a real estate agent. The Court rejected this argument and held that the appellant had not shown a palpable and overriding error in the trial judge’s conclusion to impute income to the respondent of $46,000 per year. The Court found the trial judge carefully reviewed the income earning history of both parties. $46,000 was the most the respondent had ever earned in any year prior to 2021, which included the years in which she worked as a real estate agent.

Second, the appellant argued that the trial judge erred when she referred to a list that the appellant gave the respondent during the marriage that set out his expectations of how she was to dress, maintain the home, be satisfied with the lifestyle he provided, take his advice, admire him, and guard his reputation. The appellant says that he introduced the list at trial to show he was working to repair and maintain the marriage and did not realize that the trial judge would use it against him – if he had, he would have introduced an email to show that the list originated from a website the respondent shared with him. He asked that the email (which he described orally in argument) be admitted as fresh evidence on the appeal. The Court noted that fresh evidence is only admitted on an appeal if, among other matters, the fresh evidence is “such that if believed it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result”: Palmer v. The Queen. The Court found the trial judge’s use of the list as an indicator of the functions performed and expected to be performed by the spouses during the marriage would not have been affected by the proposed fresh evidence in any material way. It is the spousal roles, not their genesis, that give rise to the entitlement to support. The Court did not admit the fresh evidence and rejected this ground of appeal.

Third, the appellant addressed the costs award of the trial judge. At trial, the respondent made submissions and the appellant did not make any submissions in response. The appellant stated in oral argument that he failed to do so because he was appealing the trial judgment. The Court declined to interfere with the trial judge’s discretionary costs award as the appellant had not identified an error in principle in the costs award that would displace the deference owed to the trial judge in these circumstances.

The Court was not satisfied that the trial judge made any reversible error in her credibility findings. A trial judge enjoys a wide discretion over such findings. Although the appellant referred to items of evidence that were not referred to by the trial judge that he submitted should have counted against the respondent’s credibility, the trial judge was not obliged to refer to each item of evidence in concluding about credibility. The Court was also not satisfied that the trial judge made any error in her management of a trial that involved a self-represented litigant that would warrant appellate interference. The record disclosed that the trial judge provided significant assistance to the appellant about both substantive law and procedure. The trial judge did not make any findings that there was an unconscionable course of conduct that was an obvious and gross repudiation of the relationship.

Spot Coffee Park Place Inc. v. Concord Adex Investments Limited, 2023 ONCA 15

[Pepall, Harvison Young and George JJ.A.]

Counsel:

S. Sood and D. Reiter, for the appellant
G.M. Sidlofsky and P. Neufeld, for the respondent

facts:

The respondent, Spot Coffee Park Place Inc. (“Spot Coffee”) was a commercial tenant of the appellant landlord, Concord Adex Investments Limited (“Concord”). The dispute arose regarding an alleged pre-contractual negligent misrepresentation about customer parking at the leased premises, a retail unit at Concord Park Place. In early 2010, the landlord began discussing the possibility of leasing a retail unit at Concord Park Place with the principals of what became Spot Coffee. In Concord’s presentation meeting, its representative showed Spot Coffee a blueprint of an underground parking facility labelled “retail parking” and depicting a customer parking lot. The representative took the principals of Spot Coffee on a site tour and showed them where the customer parking was going to be, assuring Spot Coffee there would be ample parking for its customers.

On September 3, 2010, the parties entered into an Offer to Lease for the commercial premises and, on October 29, 2010, the parties entered into a Formal Lease. Both the Offer to Lease and the Formal Lease contained an entire agreement clause which included language stating that the Offer to Lease and the Formal Lease were the only agreements between the parties relating to the subject matter of the lease.

When Spot Coffee opened its café, it encountered problems with customer parking, as customers had to drive to a different building to park. On May 29, 2013, Spot Coffee abandoned the premises due to the parking challenges causing it to suffer losses.
The trial judge found that Concord owed Spot Coffee a duty of care and acted negligently by making inaccurate and/or misleading representations through its representative regarding the availability of parking. The trial judge reasoned that the entire agreement clause did not preclude Spot Coffee’s claim, as it pertained to the subject matter in the lease only and the parking issue was not mentioned in the lease.

Concord argued that the trial judge failed to consider the lease as a whole, amounting to an extricable error of law reviewable on a correctness standard. Specifically, Concord argued that the trial judge failed to consider articles 3.2 and 6.6(b) of the lease which dealt with parking and formed part of the “subject matter” of the Lease.

issues:

(1) What is the applicable standard of review?

(2) Did trial judge fail to consider the Lease as a whole and err in concluding that the respondent’s claim was not precluded by the language of the entire agreement clause in the Lease?

holding:

Appeal dismissed.

reasoning:

(1)

The Court noted that contractual interpretation involves issues of mixed fact and law, as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix (Sattva). Justice Rothstein in Sattva carved out extricable questions of law from this more limited standard of review stating that “[L]egal errors made in the course of contractual interpretation include ‘the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor’”. The Court noted that applicable standard of review is on a correctness standard. The Court noted that if articles in the Lease were specific and relevant, ignoring them could amount to a failure to read the Lease as a whole and thus could meet the correctness standard of review threshold. In addition, if customer parking was included as part of the ‘subject matter’ of the Lease, a finding to the contrary might amount to a palpable and overriding error.

(2) No.

The Court held that the trial judge did not err in finding that Spot Coffee’s claim was not precluded by the entire agreement clause. The Court noted that the trial judge considered the provision and whether the appellants’ impugned representations related to the subject matter of the Lease. The Court reviewed article 3.2 and 6.6(b) and saw no extricable error of law or any palpable and overriding error. In the absence of any palpable and overriding error or error of law, deference was owed to the trial judge’s interpretation that customer parking was not the “subject matter” of the Lease and that the entire agreement clause did not preclude Spot Coffee’s claim.

Northwinds Brewery Ltd. v. Caralyse Inc., 2023 ONCA 17

[van Rensburg, Sossin and Copeland JJ.A.]

Counsel:

B. Fromstein and A. F. Longo, for the appellant
G. Galati and P. Wallner, for the respondent

facts:

The appellant, a Landlord, owned a commercial plaza where the respondent, the Tenant, leasing two units (the “Premises”), operated a restaurant, brewpub and retail business. The Lease was for an initial five-year term that began July 1, 2014 (the “Commencement Date”). The Lease provided for annual minimum rent of $12 per square foot, and required the respondent to pay as “additional rent” its proportionate share of annual taxes, maintenance and insurance (“TMI”) and operating costs.

After the Tenant gave notice in October 2018 to extend the Lease for a second five-year terms, the Landlord issued a series of default notices. The Tenant obtained interim and interlocutory injunctions restraining the Landlord from terminating the Lease and interfering with its quiet enjoyment of the Premises. The proceeding was converted into an action.
Several issues proceeded to trial, including: (1) whether the Tenant was in default under the Lease; (2) whether the Landlord was in default; (3) whether the Landlord was entitled to receive rent for (i) the Shed Area and (ii) the mezzanine; (4) whether the Tenant had validly exercised its option to extend the Lease for a second five-year term; and (5) the applicable limitation periods for the various claims.

The trial judge found that it was not until the Tenant served a notice of extension in October 2018 that the Landlord raised any serious concerns, including issues about the Shed Area and mezzanine, and TMI. The trial judge rejected the Landlord’s evidence that it had sent Additional Rent statements to the respondent in each of the years 2015 to 2017 setting out the Tenant’s proportionate share of TMI and operating expenses. He concluded that the Landlord had not proven any rent arrears, any default by the Tenant or any other reason for the Landlord to terminate the Lease, and that the Tenant had validly exercised its option to extend the Lease for a second five-year term. He awarded the Tenant damages for breach of the Landlord’s covenant to repair in the sum of $7,159.04.

The trial judge also concluded that the “Rentable Area of the Premises” did not include the mezzanine, and therefore no rent was payable. As for the Shed Area, the trial judge concluded the Landlord was entitled to receive “non-lease-based rent”. The Landlord was awarded the sum of $1,791.80, and the trial judge declared that the Tenant was to continue paying non-lease-based rent at a rate of $52.70 monthly.

The Tenant was awarded costs on a partial indemnity basis in the sum of $116,516.71.

issues:

(1) Did the trial judge err in his approach to the Shed Area by (a) awarding non-lease-based rent at 50% of the combined rent under the Lease; and (b) applying the two-year limitation period under the Limitations Act, 2002, rather than the six-year limitation period applicable to “rent arrears” under the Real Property Limitations Act (RPLA)?

(2) Did the trial judge err in concluding that the mezzanine was not part of the Rentable Area of the Premises?

(3) Did the trial judge err in concluding that the Tenant had validly exercised its option to extend the Lease?

(4) Did the trial judge err in his award of costs?

holding:

Appeal allowed, in part.

reasoning:

(1) Yes, in part.

The Landlord asserted that the trial judge erred in the amount awarded in respect of the Shed Area. The Landlord argued that the trial judge erred by creating a new contract between the parties when he imposed “non-lease-based rent” at a rate of 50% of the rent payable under the Lease instead of the full rate. The Landlord also contended that the trial judge erred in applying the Limitation Act, 2002: it was entitled to rent arrears retroactive to six years prior to the issuance of the counterclaim pursuant to s.17(1) of the RPLA.
The Court held that the trial judge did not err when he declared the Tenant entitled to continued occupation of the Shed Area. The Court also found that it was not an error to fix the rent for the Shed Area at a rate that was 50% of the combined rent under the lease. The Court held that the trial judge provided for a remedy that protected the status quo and was responsive to the respective interests of the parties. The Court found that the trial judge recognized that the Tenant had installed the shed prior to the Commencement Date under the Lease, and that the shed and the equipment it housed were essential to the respondent’s business. The Court noted that the trial judge recognized the Tenant’s continuing right to exclusively occupy the Shed Area going forward, while also accepting that the Landlord was entitled to future rent as well as arrears of rent.

The Court held that the judge did err in regards to the limitation period issue. The Court found that the judge should have applied the six-year limitation period under the RPLA to the Landlord’s claim for arrears. The Court found that although the Shed Area was not part of the Rentable Area of the Premises, that conclusion did not take it outside of the terms of the RPLA. Instead, the Court held that monthly payments for the exclusive occupation of the Shed Area “fit neatly” within the RPLA’s definition of “rent” as they constituted “periodical sums of money charged upon or payable out of land”.

The Court also denied the Tenant’s arguments that the trial judge had awarded “rent in the nature of a license fee”, taking the award outside of the definition of rent arrears under the RPLA. The Court noted that, as the Tenant had ongoing rights to the Shed Area, independent of the Landlord’s agreement, the award of “non-lease-based rent” was consistent with a lease and not a licence.

Finally, the Court also disagreed with the Tenant’s argument that the trial judge had awarded the Landlord damages. The Court held that the Landlord’s claim was consistently referred to as one for rent arrears, and that was precisely what was ordered. Further, the Court held that even if the arrears could be characterized as a form of damages, the six-year limitation period in s.17 of the RPLA applied to rent arrears as well as damages in respect of rent arrears.

(2) No.

During the fixturing period in early 2014, the Tenant constructed an internal mezzanine that sat above an office and washrooms also installed by the Tenant. The Landlord claimed that the mezzanine increased the Rentable Area of the Premises. The trial judge disagreed.
The Court held that in determining whether the mezzanine was included in the Rentable Area of the Premises, the trial judge properly focused on the wording of the Lease. Based on these provisions, the trial judge held that Rentable Area of the Premises simply meant the “square footage measured at the ground floor encompassed within the walls of the building structure”.

The Court held that in coming to this conclusion the trial judge did not err in referring to the offer to lease. The Landlord had relied on the fact that a mezzanine was specifically excluded from the rentable area in the offer to lease, and that it was not mentioned in the Lease itself, to argue that the mezzanine the Tenant installed was part of the rentable area. The Court held that the trial judge was correct to reject this interpretation, and correctly concluded that since the offer to lease specifically excluded the mezzanine that was onsite before the Tenant made its alterations, the omission of any mention of a mezzanine in the Lease represented a mutual understanding that it was not to be included.

The Court also held that the trial judge was correct to consider the communication between the parties, despite the Landlord’s characterization of them as “irrelevant subsequent conduct”. These communications included: (a) the Tenant providing the Landlord with an architectural drawing in 2014 that measured the Rentable Area of the Premises at 5,106 square feet based on the inside surface of all walls, doors, and windows; (b) the Landlord providing the Tenant its own measurement of the space in July 2015, which bore the notation “Mezzanine: Not Measured (as per client’s instructions)”; and (c) the Landlord’s failure to dispute the Tenant’s 2014 architectural drawings.

The Court found that the trial judge was correct to infer from this conduct that the Landlord had accepted that the mezzanine would not be included in the Rentable Area of the Premises. The Court held that given that Article 3.7 of the Lease expressly contemplated further actions which might affect the size of the Rentable Area of the Premises, these communications between the parties were directly relevant to the determination of whether the mezzanine was included.

(3) No

The Court found that the trial judge had accepted that the Tenant gave notice that was clear, explicit, unambiguous and unequivocal. The trial judge had rejected the argument that the notice was invalid because the Tenant purported to exercise the option on conditions. The Court held that the validity of the notice was not affected by the fact that the Landlord subsequently purported to set out a different rate for Additional Rent. Further, the Court held that the notice was not an attempt to unilaterally fix the Tenant’s proportionate share of the TMI and operating expenses for a second five-year term.

The Court also found that, irrespective of how the Lease contemplated written notice to be given, there was no evidence of the Landlord ever delivering notice or communicating by mail. The Court held that the trial judge was correct to find that email was overwhelmingly the preferred method of communication, and this met the condition in the Lease for communication to be given in writing.

(4) No.

The Landlord asserted that the trial judge erred in principle by not considering its own bill of costs in determining the reasonable expectations of the losing party. The Court disagreed, and found that the trial judge referred to the fact that the parties provided both oral and written submissions on costs, and specifically adverted to the Landlord’s position that the Tenant should recover no more than 50% of the reasonable partial indemnity costs.

The Court held that the trial judge determined a reasonable and proportional amount for costs after considering all relevant factors under r.57 of the Rules of Civil Procedure. Accordingly, the Court found no reversible error in the trial judge’s award of costs to the Tenant or in the amount fixed for reasonable partial indemnity costs. The Court also found that the Landlord failed to meet the test for leave to appeal costs, as they had failed to establish “strong grounds upon which [this court] could find that the judge erred in exercising his discretion.”

SHORT CIVIL DECISIONS

Chiappino & Associates Limited v. 6891799 Canada Inc., 2023 ONCA 22

[Lauwers, Huscroft and Miller JJ.A.]

Counsel:

Z. Rehman, for the appellants
T. Watson, for the respondent

Keywords: Costs Endorsement

Taylor v. Hanley Hospital Inc., 2023 ONCA 25

[Roberts, Miller and Zarnett JJ.A.]

Counsel:

L. Samfiru and L. Cerda, for the appellant
I.A. Johncox, for the respondent

Keywords: Costs Endorsement

Kudrocova v. Kronberger, 2023 ONCA 26

[Roberts, Thorburn JJ.A. and Tzimas J. (ad hoc)]

Counsel:

T. Frederick, for the appellant
M.J. Ruhl and K. Gordon, for the respondent

Keywords: Family Law, Parenting, Decision-Making, Parental Alienation, Variation, Material Change in Circumstances

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Ines Ferreira Blaney McMurtry LLP 416.593.2953 Email

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John Polyzogopoulos Blaney McMurtry LLP 416.593.2953 Email

Ines Ferriera Blaney McMurtry LLP 416.597.4895 Email

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferriera
Blaney McMurtry LLP
416.597.4895 Email