COURT OF APPEAL SUMMARIES (SEPTEMBER 20 – SEPTEMBER 24, 2021)

By John Polyzogopoulos on September 25, 2021

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Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of September 20, 2021. The theme this week was family law.

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Congratulations to our own Ryan Kniznik for his success in Muraven v. Muraven. In that case, the Court dismissed an appeal addressing property, child support and prejudgment interest issues.

In Meloche v. Meloche, the Court was asked to answer the following question: Where a retired member spouse’s pension payments are divided at source for family law purposes, can the parties agree (or can a court order or can an arbitrator award) that payment sharing continue to the non-member spouse’s estate for the balance of the retired member spouse’s life? The motion judge had answered that question in the negative. However, after an exhaustive review of the relevant provisions of the Pension Benefits Act and the Family Law Act, the Court set aside that decision and answer the question in the affirmative.

In Lalonde v. Agha, the Court dismissed the appellant’s appeal from the trial judge’s order that the parties’ religious marriage in Tennessee that was not formally valid in that state because no marriage licence was obtained, was nonetheless deemed valid in Ontario pursuant to s. 31 of the Marriage Act, and therefore that the parties were “spouses” under the Family Law Act.

In Smith v. Kane, the Court upheld the trial judge’s decision that there was no breach of the standard of care of a family doctor in failing to diagnose a rare condition that resulted in the loss of the patient’s leg that could have been avoided if there had been an earlier diagnosis.

In Johnson v Ontario, the Court determined that a decision to deny an extension of time to a class member to opt out of a class proceeding so that the class member could proceed with his own individual action was a final order, not an interlocutory order. The Court was of the view that the opt out right was of such importance, that the denial of that right amounted to a decision that affected substantive legal rights, and not merely procedural rights. The order dismissing the class member’s motion for an extension of time to opt out of the class proceeding was therefore characterized as a final order. Ontario’s motion to quash the appeal on the basis that the order was interlocutory and therefore before the wrong court was dismissed.

Lastly, for our readers who have not yet heard about it, I would like to introduce them to a new publication, Civil Procedure & Practice in Ontario (CPPO). The CPPO is a new free online resource jointly published by the University of Windsor and CanLII. As most of our readers probably know, CanLII is a not-for-profit organization operated by the Federation of Law Societies of Canada and is dedicated to assisting with access to justice through the free and open dissemination of the laws of Canada to all members of the public. The CPPO was written by a team of 135 leading litigators and experts in Ontario civil procedure, led by Professor Noel Semple of Windsor Law School.

CPPO will serve as a guide to Ontario’s Rules of Civil Procedure, Courts of Justice Act, and Limitations Act, and will be accessible not only to practitioners, but to members of the public. It contains not only the text of all these rules and statutory provisions, but also commentary and annotations to all the relevant case law applying and interpreting each rule and section. To access Civil Procedure & Practice in Ontario, please click here, and make sure to bookmark the site for easy access.

Together with my colleague, Natasha Rambaran, I had the privileged and honour to contribute two chapters to CPPO dealing with Rules 54 and 55 (Directing a Reference and Procedure on a Reference). I would like to thank Professor Semple for inviting me to participate in this very worthwhile project.

I would encourage all of our readers to consult CPPO in their daily practice, and to spread the word among colleagues. In addition, the authors and Professor Semple would welcome any feedback and ideas for improvement, as the resource will not be static. The intention is for CPPO to be continually updated and refined.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Smith v. Kane, 2021 ONCA 634

Keywords: Torts, Negligence, Medical Malpractice, Standard of Care, Causation, Contributory Negligence, Expert Evidence, ter Neuzen v. Korn, [1995] 3 S.C.R. 674, Kaiman v. Graham, 2009 ONCA 77, Whitby (Town) v. G&G, 2020 ONCA 654, Samms Estate v. Moolla, 2019 ONCA 220, Nattrass v. Weber, 2010 ABCA 64, McCann v. Hyndman, 2004 ABCA 191, Housen v. Nikolaisen, 2002 SCC 33, Hajgato v. London Health Association (1982), 36 O.R. (2d) 669 (S.C.), Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, Rowlands v. Wright, 2009 ONCA 492, Gent and Gent v. Wilson, [1956] O.R. 257 (C.A.), Ellen I. Picard & Gerald B. Robertson, Legal Liability of Doctors and Hospitals in Canada, 5th ed. (Toronto: Carswell, 2017)

Blacklock v. Tkacz, 2021 ONCA 630

Keywords: Family Law, Motion, Estate, Deceased, Retroactive Child Support, Decree Nisi, Costs, Divorce Act, Family Law Act, Family Law Rules, O. Reg. 114/99, Katz v. Katz, 2014 ONCA 606

Meloche v. Meloche, 2021 ONCA 640

Keywords: Family Law, Motion, Question of Law, Divorce, Equalization, Net Family Property, Pension, Estate, Standard of Review, Correctness, Statutory Interpretation, Costs, Family Law Rules, O. Reg. 114/99, Pension Benefits Act, R.S.O. 1990, c. P.8, Family Law Act, R.S.O. 1990, Family Law Matters, O. Reg. 287/11, Divorce Act, Colucci v. Colucci, 2021 SCC 24, Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, Harvey v. Talon International Inc., 2017 ONCA 267, 137 O.R. (3d) 184, Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601, Hickman Motors Ltd. v. Canada, [1997] 2 S.C.R. 336, 148 D.L.R. (4th) 1, State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, S.H. v. D.H., 2019 ONCA 454, 146 O.R. (3d) 625, Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis, 2014), Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), 2004 SCC 54, [2004] 3 S.C.R. 152, Kendra D.M.G. Coats et al., Ontario Family Law Practice 2020, Volume 2 (Toronto: LexisNexis Canada, 2019)

Johnson v. Ontario, 2021 ONCA 650

Keywords: Torts, Negligence, Breach of Charter Rights, Crown Liability, Civil Procedure, Class Proceedings, Opting Out, Extension of Time, Appeals, Jurisdiction, Final or Interlocutory, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 9, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1), Canadian Charter of Rights and Freedoms, s. 24(1), Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Hendrickson v. Kallio, [1932] O.R. 675 (C.A.), Ball v. Donais (1993), 13 O.R. (3d) 322 (C.A.), Buck Brothers Ltd. v. Frontenac Builders Ltd. (1994), 19 O.R. (3d) 97, Skunk v. Ketash, 2016 ONCA 841, Nutech Brands Inc. v. Air Canada, [2008] O.J. No. 1065 (S.C.), 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2012 ONSC 4317, rev’d on other grounds 2013 ONCA 279, Currie v. McDonald’s Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321 (C.A.), Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534, Webb v. K-Mart Canada Ltd. (1999), 45 O.R. (3d) 389, Workmen Optometry v. Aviva Insurance, 2021 ONSC 3843, Dumoulin v. Ontario (Ontario Realty Corp.), [2004] O.J. No. 2778, M.J. Jones Inc. v. Kingsway General Insurance Co. (2003), 233 D.L.R. (4th) 285 (Ont. C.A.), Smith Estate v. National Money Mart Company, 2008 ONCA 746, leave to appeal refused, [2008] S.C.C.A. No. 535, Fontaine v. Canada (Attorney General), 2018 ONCA 832, Locking v. Armtec Infrastructure Inc., 2012 ONCA 774, Hendrickson v. Kallio, [1932] 4 D.L.R. 580 (Ont. C.A.), Sun Life Assurance Co. of Canada v. York Ridge Developments Ltd. (1998), 116 O.A.C. 103, Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, Paul M. Perell and John W. Morden, The Law of Civil Procedure in Ontario, 2d ed. (Markham: Lexis-Nexis Canada Inc., 2014), Kennedy, Gerard, Civil Appeals in Ontario: How the Interlocutory/Final Distinction Became So Complicated and the Case for a Simple Solution?, (2020) 45:2 Queen’s L.J. 243

Skinner v. Skinner, 2021 ONCA 658

Keywords: Family Law, Spousal Support, Child Support, Variation, Material Change in Circumstances, Arrears, Imputing Income, Section 7 Extraordinary Expenses, Child of Marriage, Spousal Support Advisory Guidelines, Willick v. Willick, [1994] 3 S.C.R. 670, Lavie v. Lavie, 2018 ONCA 10, 8 R.F.L. (8th) 14, Rosenberg v. Rosenberg (2003), 42 R.F.L. (5th) 440 (Ont. S.C.), Hickey v. Hickey, [1999] 2 S.C.R. 518

Lalonde v. Agha, 2021 ONCA 651

Keywords: Family Law, Marriage, Validation, Definitition of Spouse, Equalization of Net Family Property, Marriage Act, R.S.O. 1990, c. M.3, s. 4 and 31, Family Law Act, R.S.O. 1990, c. F.3, s. 1(1), Tennessee Code Annotated, The Marriage Act, 1896, S.O. 1896, c. 39, s. 29, Alspector v. Alspector (1957), 9 D.L.R. (2d) (Ont. C.A.), Debora v. Debora (1999), 167 D.L.R. (4th) 759 (Ont. C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Berthiaume v. Dastous, [1930] 1 D.L.R. 849 (P.C.), Brook v. Brook (1861), 11 E.R. 703 (H.L.), Porteous v. Dorn et al., [1975] 2 S.C.R. 37, Powell v. Cockburn, [1977] 2 S.C.R. 218, Peppiatt v. Peppiatt (1916), 30 D.L.R. 1 (Ont. C.A.), Kerr v. Kerr and Ontario (Attorney General), [1934] S.C.R. 72, Clause v. Clause (1956), 5 D.L.R. (2d) 286, Breakey v. Breakey (1846), 2 U.C.Q.B. 349, Smith v. Waghorn, 2012 ONSC 496, Dutch v. Dutch (1977), 1 R.F.L. (2d) 177 (Ont. Co. Ct.), Harris v. Godkewitsch (1983), 41 O.R. (2d) 779 (Ont. Prov. Ct.), Kanafani v. Abdalla, 2010 ONSC 3651, Chhokar v. Bains, 2012 ONSC 6602, Aden v. Mohamud, 2019 ONSC 6493, Moza and Thusu (Re), 2021 ONSC 1552, Friedman v. Smookler, [1964] 1 O.R. 577, Ayoub v. Osman, 2006 CanLII 9309 (Ont. S.C.), Isse v. Said, 2012 ONSC 1829, Jama v. Basdeo, 2020 ONSC 2922, Walker, Janet, Castel & Walker: Canadian Conflict of Laws, loose-leaf (ReI. 82-9/2020), 6th ed. (Markham, Ont.: LexisNexis Butterworths, 2005) vol. 2, Payne, Julien D. and Marilyn A., Canadian Family Law, 8th ed. (Toronto: Irwin Law, 2020) H.R. Hahlo, Nullity of Marriage in Canada: With A Sideways Glance At Concubinage And Its Legal Consequences, (Toronto: Butterworth & Co. (Canada), 1979), Riddell, William Renwick, The Law of Marriage in Upper Canada, (1921) 2 Can Historical Rev 226

Short Civil Decisions

Public Guardian and Trustee v. Zammit, 2021 ONCA 648

Keywords: Wills and Estates, Powers of Attorney, Public Guardian and Trustee, Substitute Decisions Act, 1992, S.O. 1992, c.30, s.32(1) and s.38(1), RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Ogden Entertainment Services v. United Steelworkers of America, Local 440 (1998), 38 O.R. (3d) 448 (C.A.)

31 Kingsbury Inc v. Delta Elevator Company Limited, 2021 ONCA 656

Keywords: Civil Procedure, Appeals, Abandonment, Costs

Maynard v. Mississippi Mills (Municipality), 2021 ONCA 639

Keywords: Municipal Law, By-Laws, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Jurisdiction, Ontario Land Tribunal Act, S.O. 2021, Local Land Appeal Tribunal Act, S.O. 2017, Country Pork Ltd. v. Ashfield (Township), 60 O.R. (3d) 529, Grabe v. Ottawa (City), 2019 CanLII 107083, Rules of Civil Procedure, Rule 21.01(1)(b)

College of Massage Therapists of Ontario v Schoelly, 2021 ONCA 655

Keywords: Civil Procedure, Appeals, Mootness

Markham (City) v. AIG Insurance Company of Canada, 2021 ONCA 649

Keywords: Civil Procedure, Appeals, Costs

Jonas v Akwiwu, 2021 ONCA 641

Keywords: Child Support, Retroactive Variation, Effective Date of Variation, Material Change in Circumstances, Delay in Application, Fresh Evidence on Appeal, Palmer Test, R. v. Palmer, [1980] 1 S.C.R. 759

Hanna & Hamilton Construction Co. Ltd v. Robertson, 2021 ONCA 660

Keywords: Bankruptcy and Insolvency, Debt Surviving Bankruptcy, Civil Procedure, Procedural and Natural Justice, Reasons, Appeals, Lack of Reasons, Appeal Allowed, R. v. Sheppard, [2002] 1 SCR 869

Diamond v. Berman], 2021 ONCA 653

Keywords: Family law, Spousal Support, Variation, Spousal Support Advisory Guidelines

CIVIL DECISIONS

Smith v. Kane, 2021 ONCA 634

[Fairburn A.C.J.O, van Rensburg and Huscroft JJ.A.]

Counsel:

R. Naimark, K. MacLeod, C. Madison, for the appellant
J. Sirivar and S. Rogers,for the respondent

facts:

In November 2007, the appellant slipped and fell on some ice, injuring her ankle. She first consulted her family doctor, the respondent, about the injury on December 13, 2007. At issue in this case was the respondent’s care of the appellant between January and October 2008, and in particular, in January, when the respondent ordered X-rays and an ultrasound, and between July and October, when the appellant was seen on three occasions. In December 2008, the respondent referred the appellant, at her request, to an orthopaedic surgeon. The appellant was diagnosed with a rare condition, Charcot foot. In 2009, the appellant was forced to have a portion of her leg amputated.

The trial judge found in favour of the appellant on the issue of causation: but for the negligence of the respondent, if such had been found, the appellant’s leg more probably than not would have been saved had a referral to an appropriate consultant been made on or before October 24, 2008. The trial judge found that if X-rays had been taken at the end of July 2008, they would clearly have shown a marked neuropathic fracture and significant radiological deformity, compelling a referral to an orthopaedic specialist. The trial judge also concluded that there was no contributory negligence. In the end, however, the trial judge dismissed the action because he was not persuaded that the respondent had breached the standard of care of a family doctor.

issues:

(1) Did the trial judge err in his assessment of the expert evidence, by (a) misapprehending the evidence of the appellant’s standard of care expert; and (b) ignoring an important concession by the respondent’s expert.

(2) Did the trial judge err in failing to find a breach of the standard of care, even in the absence of expert evidence, based on his ordinary knowledge and common sense?

(3) Did the trial judge err in failing to find a breach of the standard of care in the respondent’s alleged failure to diagnose the appellant’s ongoing foot pain and swelling?

holding:

Appeal dismissed.

reasoning:

(1) No.

(a) The trial judge did not overlook aspects of the evidence of the appellant’s expert. The Court supported the trial judge’s finding that the appellant’s expert did not provide any “detailed or cogent evidence or relation for what the respondent did or failed to do” during the relevant time period. Further, that the appellant’s expert did not say that it fell below acceptable standards not to contemporaneously repeat or alter foot imaging by at least mid-September.

(b) The respondent’s expert did not concede that there was a breach of the standard of care. The alleged “concession” had to be considered in the context of the parties’ submissions and the trial judge’s conclusion regarding the meaning of the word “reasonable”. Moreover, the alleged concession had to be considered in the context of the totality of the expert’s trial evidence. With that being said, the other evidence unequivocally contradicted the inference of a concession that there was a breach of the standard of care.

(2) No.

This argument was no raised at trial. Generally, the Court will not entertain entirely new issues on appeal.
There was no scope for the application of the principle recognized in ter Neuzen. The trial judge and counsel recognized that expert evidence was essential in determining whether the respondent breached the standard of care of a reasonable family physician in her care and treatment of the appellant during the relevant period.

(3) No.

Although this case was in general terms about the delay in diagnosing the appellants condition, it was agreed that the standard of care for a family doctor would not have required the respondent to have diagnosed or even suspected this condition. The standard of care issue, in the context of the case, including the trial judge’s causation findings, was what steps ought to have been taken as part of the standard of care of a reasonable family physician, that would have assisted in a timely diagnosis. While the alleged failure to diagnose was not itself a breach of the standard of care, it was relevant to the failure to refer and to repeat imaging. The argument at trial was that the referral to an orthopaedic specialist and repeat imaging were steps that should have been taken in circumstances where, in the summer and fall of 2008, there was no diagnosis for the appellant. In other words, in the context of this case the failure to diagnose in itself could not have been a breach of the standard of care, in view of the concession that the respondent could not reasonably have diagnosed Charcot foot, and the causation findings.

Blacklock v. Tkacz, 2021 ONCA 630

[Juriansz, Lauwers, Sossin JJ.A.]

Counsel:

M.L. Riddell, for the appellant
W.R. Clayton, for the respondent

Keywords: Family Law, Motion, Estate, Deceased, Retroactive Child Support, Decree Nisi, Costs, Divorce Act, Family Law Act, Family Law Rules, O. Reg. 114/99, Katz v. Katz, 2014 ONCA 606

facts:

The appellant brought a motion against the trustee of the estate of her deceased husband for retroactive child support payments. The deceased had died on March 14, 2019, and the motion was filed on October 4, 2019.

The motion judge dismissed the motion. The motion judge held that under section 17 of the Divorce Act, an application cannot be brought to claim or vary a support order against a deceased’s estate if the original order is silent on whether that order binds the estate.

The appellant appealed the dismissal of the motion.

issues:

(1) Did the motion judge err in dismissing the motion because the application was related strictly to the payor’s lifetime on a retroactive basis?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court held that the motion judge correctly decided that an application under s. 17(1) of the Divorce Act to change child support cannot be brought after the death of the payor. The appellant sought an application to vary the original support order. As there was no order binding the estate, there was no subsisting order that could be varied to bind the estate.

Meloche v. Meloche, 2021 ONCA 640

[Fairburn A.C.J.O., Van Rensburg and Huscroft JJ.A.]

Counsel:

A. Franks and M. Zalev, for the appellant
M. Aroca and A. Harmon, for the respondent

Keywords: Family Law, Motion, Question of Law, Divorce, Equalization, Net Family Property, Pension, Estate, Standard of Review, Correctness, Statutory Interpretation, Costs, Family Law Rules, O. Reg. 114/99, Pension Benefits Act, R.S.O. 1990, c. P.8, Family Law Act, R.S.O. 1990, Family Law Matters, O. Reg. 287/11, Divorce Act, Colucci v. Colucci, 2021 SCC 24, Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, Harvey v. Talon International Inc., 2017 ONCA 267, 137 O.R. (3d) 184, Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601, Hickman Motors Ltd. v. Canada, [1997] 2 S.C.R. 336, 148 D.L.R. (4th) 1, State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, S.H. v. D.H., 2019 ONCA 454, 146 O.R. (3d) 625, Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis, 2014), Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), 2004 SCC 54, [2004] 3 S.C.R. 152, Kendra D.M.G. Coats et al., Ontario Family Law Practice 2020, Volume 2 (Toronto: LexisNexis Canada, 2019)

facts:

The parties were married. The appellant applied to the court for a divorce and equalization of the net family property. The appellant wanted to divide the respondent’s pension payments and wanted his share of the pension payments to continue to his estate following his death. The appellant had been diagnosed with ALS and his death appeared imminent.

The appellant brought a motion to decide a question of law under Rule 16(12)(a) of the Family Law Rules. The appellant brought forward the following question: Where a retired member spouse’s pension payments are divided at source for family law purposes, can the parties agree (or can a court order or can an arbitrator award) that payment sharing continue to the non-member spouse’s estate for the balance of the retired member spouse’s life?

The motion judge answered this question in the negative. The motion judge concluded that the Pension Benefits Act specifically precluded a deceased non-member spouse’s share of a retired member’s pension payments from continuing to the non-member’s estate after the non-member’s death.
The appellant died two days after the motion judge’s ruling. The sole Estate Trustee of the appellant’s estate pursued this appeal.

issues:

(1) Did the motion judge err by concluding that the pension payments could not continue to be shared after the appellant’s death?

(2) In the alternative, did the motion judge err by ordering retroactive sharing of the monthly pension amounts?

holding:

Appeal allowed.

reasoning:

(1) Yes.

The Court held that where a retired member spouse’s pension payments are divided at source for family law purposes, payment sharing can continue to the non-member spouse’s estate for the balance of the retired member spouse’s life.

After undergoing an extensive analysis of the relevant statutory provisions, the Court concluded that there was nothing in the “Family Law Matters” sections of the Pension Benefits Act (ss. 67.1 to 67.9) or the Family Law Act that precluded the parties from agreeing to, a court from ordering, or an arbitrator from awarding a continuation of shared pension payments to the deceased non-member’s estate for the balance of the member spouse’s life. When these provisions are read together as a cohesive unit, they leave open the possibility of proceeding in this exact way.

(2)

In light of the answer to the first issue, the Court declined to address the second issue.

Johnson v Ontario, 2021 ONCA 650

[Lauwers, Coroza and Sossin JJ.A.]

Counsel:

R.V. Bambers and L. Brost, for the moving party

M.R. Sharp, N.S. Barkhordari and N.S. Gosai, for the responding party D.P.

K. Egan and M. Peerless, for the responding parties G.J., M.S. and T.H.

facts:

D.P., an inmate in the Elgin Middlesex Detention Centre in 2016, sued Ontario claiming damages for negligence and under s. 24(1) of the Canadian Charter of Rights and Freedoms for breaches of ss. 7 and 12 after sustaining a permanent disabling injury resulting from Ontario’s delay in seeking medical treatment for D.P.

When he started his lawsuit, D.P. was not aware of the existence of two class actions that had been certified and consolidated on behalf of persons incarcerated at the Elgin Middlesex Detention Centre. A long-form notice about the class action was sent to D.P., but not at Joyceville Institution, the federal prison D.P. had been transferred to in 2017. D.P. deposed that he learned of the class proceeding only when he received a letter from counsel from Ontario dated June 2020 asking D.P.’s counsel to discontinue the action or to limit the claim in view of this class action. D.P. responded by seeking an extension of time within which he could opt out of the class action. The motion judge, however, refused to extend the period of time within which D.P. could opt out of the class proceeding under s. 9 of the Class Proceedings Act, and in doing so, effectively terminated D.P.’s individual action.

The appellant appealed to the Court. Ontario moved to quash the appeal on the basis that the motion judge’s order was interlocutory and therefore appealable only to the Divisional Court under s. 19(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

issues:

(1) Was the motion judge’s decision to refuse to extend the time within which a class member can opt out of a class proceeding final or interlocutory?

holding:

Motion dismissed.

reasoning:

(1) Final.

An interlocutory order is one which does not determine the real matter in dispute between the parties—the very subject matter of the litigation—or any substantive right to relief of a plaintiff or substantive right of a defendant. Even though the order determines the question raised by the motion, it is interlocutory if these substantive matters remain undecided.

In general terms, the policy underlying the distinction between interlocutory and final orders is the proportionality principle. For judicial decisions that are of comparatively less importance to the parties and the public than other decisions (particularly those other decisions that are determinative of the outcome of the litigation), there should be no appeal at all, or the right of appeal should be curbed by a leave requirement.

Ontario argued that the Class Proceedings Act is “entirely a procedural statute” and submitted that any right under it, such as the right to opt out, should also be seen as nothing more than procedural, certainly not substantive.

However, the Court commented that one can speak of the right to opt out as itself a substantive right. The right of a party to opt out is fundamental to the court’s jurisdiction over unnamed class members. It is also fundamental to preserve the legal rights of those who wish to exercise those rights other than through the class action. Our society places a high premium on a person’s ability to initiate and participate in litigation as an incident of personal autonomy. Along with it goes the right to appoint counsel of one’s choice, the right to participate meaningfully in the development of litigation strategy, to participate in settlement negotiations, and to settle the action. The legislative right to opt out of a class proceeding recognizes these significant rights.

In general terms, a decision that determines the forum in which the merits of the dispute are to be heard is considered to be a final decision.

The Court held that it was reasonable in this case to treat the order under appeal as a final order for the purposes of determining appeal rights since the appellant lost substantive rights of significant importance when his motion for an extension of time within which to opt out of the class action was denied.

Relevant to the Court’s reasoning was that Ontario could have brought a motion to the Superior Court in the appellant’s individual action seeking a stay of that action. In that case, that stay, if obtained, would no doubt have been a final order.

Although courts often distinguish between substantive and procedural rights in litigation terms, they are in fact symbiotic. It is not always possible or wise to distinguish one from the other. In the overall context, the appellant lost substantive rights of significant importance when his motion for an extension of time within which to opt out of the class action was denied. In the Court’s view, it was reasonable to treat the order under appeal as a final order for the purposes of determining appeal rights.

Because the removal of the appellant’s substantive rights rendered the motion judge’s decision final, it was not necessary to resolve the question of whether foreclosing the opt-out option constituted a change of forum (which would have also made the order final).

Skinner v. Skinner, 2021 ONCA 658

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

Counsel:

E.M. Carroll, for the appellant
E. Sadvari and R. Gill, for the respondent

Keywords: Family Law, Spousal Support, Child Support, Variation, Material Change in Circumstances, Arrears, Imputing Income, Section 7 Extraordinary Expenses, Child of Marriage, Spousal Support Advisory Guidelines, Willick v. Willick, [1994] 3 S.C.R. 670, Lavie v. Lavie, 2018 ONCA 10, 8 R.F.L. (8th) 14, Rosenberg v. Rosenberg (2003), 42 R.F.L. (5th) 440 (Ont. S.C.), Hickey v. Hickey, [1999] 2 S.C.R. 518

facts:

The appellant and respondent both sought to change the support order between them due to a material change in circumstances. The respondent also argued that the appellant was no longer entitled to spousal and child support. The motion judge found that there had been a material change in the respondent’s circumstances and reduced the arrears owing. The motion judge also found that the appellant’s entitlement to spousal support ended as of June 30, 2019, and her entitlement to child support ended as of December 31, 2017 and December 31, 2019, for the first and second child of the marriage, respectively.

issues:

(1) Did the motion judge err in finding that there had been a material change in circumstances warranting a reduction in the respondent’s support obligations?
(2) Did the motion judge err in finding that the respondent was excused from his unintentional underemployment for the years of 2011-2016?
(3) Did the motion judge err in reducing arrears back to 2011?
(4) Did the motion judge err in failing to address the children’s Section 7 extraordinary expenses accumulated after March 31, 2011?
(5) Did the motion judge err in finding that one child was not a “child of the marriage” in 2018 and 2019 and that the other child did not qualify for child support effective December 31, 2019?

holding:

Appeal dismissed.

reasoning:

(1), (2), (3), (5) No.

In regard to issues 1, 2, 3, and 5, the Court found that the motion judge cited the applicable authorities and correctly distilled the governing tests. The motion judge applied the test for a material change in circumstances as set out in Willick v. Willick, the test for imputing income as stated in Lavie v. Lavie, and the criteria for assessing whether a child constitutes a child of the marriage as described in Rosenberg v. Rosenberg. The Court further found that the motion judge’s conclusions were reasonable and based on the evidence before her.

(4) No.

The Court found that while the motion judge did not directly address retroactive Section 7 expenses, the motion judge did not err. The appellant would have had to establish that the expenses were necessary, in the children’s best interest, and reasonable in relation to the means of the spouses and children and the family’s spending patterns before separation.

Lalonde v. Agha, 2021 ONCA 651

[Brown, Roberts and Zarnett JJ.A.]

Counsel:

R.J.M. Ballance, for the appellant

M. DiCarlo, for the respondent

facts:

On August 7, 1998, the parties participated in a religious marriage ceremony at a mosque in Memphis, Tennessee. Following the marriage ceremony, the parties received a marriage certificate with the seal of the mosque’s Imam, though no marriage licence was issued by any government entity. The parties lived openly as husband and wife for many years in Ontario until their separation in 2016.

The appellant appeals from the trial judge’s final order that the parties’ August 7, 1998 marriage in Memphis, Tennessee was deemed to be a valid marriage pursuant to s. 31 of the Marriage Act, and therefore, that the parties were “spouses” under the Family Law Act for the purposes, among others, of equalization of net family property.

issues:

(1) Can s. 31 of the Marriage Act apply to validate a marriage solemnized outside of Ontario?

(2) If s. 31 applies to marriages solemnized outside of Ontario, can a court consider the subjective intention of the parties to comply with the Marriage Act?

holding:

Appeal dismissed.

reasoning:

(1) Yes.

The Court found no error in the trial judge’s conclusion that s. 31 of the Marriage Act applied to validate the parties’ formally invalid marriage notwithstanding that it was solemnized in Tennessee. The Court further noted that the appellant’s position that s. 31 can only apply to marriages solemnized in Ontario represents an overly narrow and technical interpretation of s. 31.

(2) Yes.

The Court disagreed with the appellant’s position that the parties’ subjective intentions to comply with the law of Ontario was irrelevant. Neither the English nor the French language version of s. 31 precluded the assessment of the parties’ subjective intentions to comply, nor have they been excluded from judicial consideration.

The Court further stated that the parties believed that the marriage ceremony created a binding marriage in conformity with the laws of Tennessee and Ontario, and their subsequent conduct showed they acted on that belief, which indicated an intention to enter into a valid, legally recognized marriage. There was no evidence in the present case that either party intended not to be legally married or was deliberately not complying with the law of Ontario. Both parties had the capacity to enter into the marriage and consented to do so. Most importantly, neither of them knew that a marriage license was required to create a formally valid marriage.

SHORT CIVIL DECISIONS

Public Guardian and Trustee v. Zammit, 2021 ONCA 648

[Tulloch, van Rensburg and Nordheimer JJ.A]

Counsel:

P. Z., acting in person
M. Tubie, for the moving party
M. Z. P. Geddie, for the responding party

31 Kingsbury Inc. v. Delta Elevator Company Ltd.>, 2021 ONCA 656

[Simmons, Pepall and Trotter, JJ.A]

Counsel:

J. Wortzman, for the appellant
C.Gastle and H Gastle, for the respondent

Keywords: Civil Procedure, Appeals, Abandonment, Costs

Maynard v. Mississippi Mills (Municipality), 2021 ONCA 639

[Benotto, Brown and Harvison Young, JJ.A.]

Counsel:

S. M., acting in person
T. Fleming and L. Scheulderman for the respondent

College of Massage Therapists of Ontario v. Schoelly, 2021 ONCA 655

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

Counsel:

E. Richler and A. Hountalas, for the appellant
No one appearing for the respondent

Keywords: Civil Procedure, Appeals, Mootness

Markham (City) v. AIG Insurance Company of Canada, 2021 ONCA 649

[Doherty, Brown and Thorburn JJ.A.]

Counsel:

D. G. Boghosian and S. S. Taylor, for the Corporation of the City of Markham and Lloyd’s Underwriters
M. B. Snowden and S. A. Kamayah, for AIG Insurance Company of Canada

Keywords: Civil Procedure, Appeals, Costs

Jonas v. Akwiwu, 2021 ONCA 641

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

Counsel:

K. A., acting in person
E. Adams-Idode, for the respondent

Hanna & Hamilton Construction Co. Ltd. v. Robertson, 2021 ONCA 660

[Watt, Benotto and Trotter JJ.A.]

Counsel:

Not listed.

Diamond v. Berman, 2021 ONCA 653

[Rouleau, Hoy and Thorburn JJ.A.]

Counsel:

D. Sherr, for the appellant
M. Greenstein, A. Krol & K. Hunter, for the respondent

Keywords: Family law, Spousal Support, Variation, Spousal Support Advisory Guidelines

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 (SEPTEMBER 13 – SEPTEMBER 17, 2021)

By John Polyzogopoulos on September 17, 2021

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

Good evening.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of September 13, 2021.

Continue Reading

In a very lengthy child custody/abduction/relocation case, N. v. F., the Court upheld the trial judge’s decision to order that the parties’ children be returned to Dubai, as Ontario did not have jurisdiction to deal with the custody issues. It was felt that on the balance of probabilities, the children’s best interests would be served by their return to Dubai, so that a court there could adjudicate the matters of custody, access, and guardianship. The Court confirmed that significant deference must be paid to family law decisions, and given the absence of a legal error or a palpable and overriding error of fact or mixed fact and law, the Court should not interfere. Lauwers J.A. dissented.

Other topics covered this week included leave to appeal a bankruptcy matter (denied), agreements of purchase and sale of land, a dispute over rights of way over a Toronto property that dated back to the early 1900’s, and the quashing of an appeal because the order appealed from was interlocutory.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

N. v. F., 2021 ONCA 614

Keywords: Family Law, Custody and Access, Relocation, Child Abduction, Civil Procedure, Conflict of Laws, Jurisdiction, Appeals, Fresh Evidence, Standard of Review, Constitutional Law, Children’s Law Reform Act, R.S.O. 1990, c. C.12, ss. 22, 23 and 40, Canadian Charter of Rights and Freedoms, s. 2(a), 6(1), 7 and 15, Ojeikere v. Ojeikere, 2018 ONCA 372, 140 O.R. (3d) 561, Palmer v. The Queen, [1980] 1 S.C.R. 759, H.E. v. M.M., 2015 ONCA 813, 393 D.L.R. (4th) 267, leave to appeal refused, [2016] S.C.C.A. No. 63, Hickey v. Hickey, [1999] 2 S.C.R. 518, Van de Perre v. Edwards, 2001 SCC 60, Grayson Consulting Inc. v. Lloyd, 2019 ONCA 79, E. (Mrs.) v. Eve, [1986] 2 S.C.R. 388, Canadian Western Bank v. Alberta, 2007 SCC 22, Office of the Children’s Lawyer v. Balev, 2018 SCC 16, McKee v. McKee, [1950] S.C.R. 700, rev’d [1951] 2 D.L.R. 657 (P.C.), R. v. S. (S.), [1990] 2 S.C.R. 254, References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, Reference re Pan‑Canadian Securities Regulation, 2018 SCC 48, Geliedan v. Rawdah, 2020 ONCA 254, Thomson v. Thomson, [1994] 3 S.C.R. 551, M.A.A. v. D.E.M.E., 2020 ONCA 486, leave to appeal refused, [2020] S.C.C.A. No. 402, Bolla v. Swart, 2017 ONSC 1488, Fraser v. Canada (Attorney General), 2020 SCC 28, Parsons v. Styger (1989), 67 O.R. (2d) 1 (H.C.), aff’d (1989), 67 O.R. (2d) 11 (C.A), J.P.B. v. C.B., 2016 ONCA 996, Divito v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 47.

James Henry Ting (Re), 2021 ONCA 622

Keywords: Bankruptcy and Insolvency, Civil Procedure, Orders, Enforcement, Contempt, Leave to Appeal, Bankruptcy and Insolvency Act, R.S.C 1985, c. B-3, s. 193(e), Bankruptcy and Insolvency General Rules, C.R.C., c. 386, Rule 31(2), Rules of Civil Procedure, Rule 61.03.1 , Business Development Bank of Canada v. Pine Tree Resorts Inc, 2013 ONCA 282, Carey v. Laiken, 2015 SCC 17, Susin v. Susin, 2014 ONCA 733.

Forest Meadows Developments Inc. v. Shahrasebi, 2021 ONCA 620

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of land, Representation, Reliance, Breach of Contract, Anticipatory Breach, Termination of Contract, Standard of Review, Deference, Finding of Fact, Costs.

Yekrangian v. Boys, 2021 ONCA 629

Keywords: Real Property, Easements, Rights of Way, Abandonment, Palmer v. The Queen, [1980] 1 S.C.R. 759, Owners Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417 (C.A.)¸ Remicorp Industries Inc. v. Metrolinx, 2017 ONCA 443, Gale on Easements, 20th ed. (London: Thomson Reuters (Professional) UK Limited, 2017), Tasker v. Badgerow, [2007] O.J. No. 2487 (S.C.J.), Overs v. ten Kortenaar (2006), 46 R.P.R. (4th) 118 (Ont. Sup. Ct.)

Pinder v. Biggar, 2021 ONCA 623

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

Short Civil Decisions

Gefen v. Gaertner, 2021 ONCA 631

Keywords: Civil Procedure, Appeals, Costs, Fontaine v. Canada (Attorney General), 2012 ONCA 206, Byers (Litigation Guardian of) v. Pentex Print Master Industries Inc. (2003), 62 O.R. (3d) 647 (C.A.), Ross v. Canada Trust Company, 2021 ONCA 161

South Beach Street Development Ltd. v. US Income Partners LLP, 2021 ONCA 624

Keywords: Civil Procedure, Settlements

CIVIL DECISIONS

N. v. F., 2021 ONCA 614

[Lauwers, Hourigan and Brown JJ.A.]

Counsel:

F. L. Jamal, F. Yehia and E. C. Conway, for the Appellant

B. R.G. Smith, L. Love-Forester and A. Lokan, for the Respondent

E. Garfin and H. Evans, for the intervener Attorney General of Ontario

C. E. Tempesta and S. Scott, for the intervener Office of the Children’s Lawyer

facts:

In the decision under appeal, the trial judge held that Ontario did not have jurisdiction to deal with the case under ss. 22 or 23 of the Children’s Law Reform Act (“CLRA”) and ordered the parties’ children be returned to the United Arab Emirates (“UAE”). After an 11-day trial, the trial judge found that the respondent was “significantly more credible” than the appellant, and disbelieved many of the appellant’s claims about why the children should remain in Ontario. He concluded that, on the balance of probabilities, the children’s best interests would be served by their return to Dubai, so that a court there could adjudicate the matters of custody, access, and guardianship.

The appellant is a Canadian citizen, and the respondent is a Pakistani national. The parties married in February 2012 and lived together in Dubai, the UAE, for eight years. They have two children under the age of five, who are both Canadian citizens. Neither the parties nor children are UAE nationals. In mid-2020, the appellant advised the respondent that she intended to take the children to Milton, Ontario, for a month-long trip to visit her parents. The respondent consented to the trip, and the appellant purchased return airline tickets. After arriving in Canada, the appellant told the respondent of her unilateral decision to not return to Dubai with the children. The appellant took no steps in the Ontario courts to determine the jurisdictional issue that arose regarding the custody and access of the children. The respondent commenced legal proceedings in Dubai and then in Ontario to have the children returned.

issues:

(1) Should the proposed fresh evidence be admitted?

(2) What is the applicable standard of review?

(3) Did the trial judge err in declining jurisdiction under s. 22 of CLRA?

(4) Did the trial judge err in declining jurisdiction under s. 23 of the CLRA?

(5) Did the trial judge err in declining to exercise parens patriae jurisdiction?

(6) Did the trial judge err in making an order under s. 40 of the CLRA?

holding:

Appeal dismissed (Lauwers J.A. dissenting).

reasoning:

(1) No.

The evidence sought to be tendered was of little or no relevance to the issues in the proceeding, and in the case of one of the documents, could have been available at trial if the appellant had acted with reasonable diligence. To obtain leave to file such evidence, the moving party must establish that the evidence: (a) is credible; (b) could not have been obtained by reasonable diligence before the trial or motion; and (c) would likely be conclusive of an issue on the appeal. The appellant failed to meet the test for the admission of fresh evidence on appeal.

(2) Custody and Support Orders: Deference.
Questions of Foreign Law: Correctness.

The jurisprudence established that significant deference must be paid to family law decisions. It is not the role of appellate courts to redo a trial judge’s analysis based on vague notions of what they perceive to be a just result. This runs the risk of rendering results-based rulings, which create uncertainty in the law. Absent a legal error or a palpable and overriding error of fact or mixed fact and law, an appellate court cannot redo a lower court’s analysis to achieve a result that it deems to be in the best interests of the child.
For issues regarding the proper interpretation of foreign law, the appropriate standard of appellate review in Ontario is correctness.

(3) No.

CLRA s. 22, which defines the circumstances in which an Ontario court will assume jurisdiction for the purposes of making a parenting or contact order, does not apply. The trial judge correctly found that s. 22(1)(a) does not ground jurisdiction because the children were not living in Ontario with both parents since their arrival in June 2020. Further, the appellant failed to establish that all six enumerated criteria were met under s. 22(1)(b), as required for an Ontario court to assume jurisdiction. These findings were well-grounded in the evidence and free of error. They were immune from appellate interference.

(4) No.

A trial judge’s exercise of powers under s. 23 is discretionary. The trial judge carefully considered the expert evidence regarding the UAE law and made the correct decision about its application in this case. He also reached conclusions available to him regarding the respondent’s parenting plan and the issue of serious harm. There was nothing in the record to suggest that the respondent wanted to limit the appellant’s interaction with the children The trial judge accepted expert evidence that there were solutions to resolve concerns associated with the appellant’s residency status. The trial judge correctly concluded that the application of UAE custody law would not harm the children.

Lauwers J.A. (dissenting): The trial judge made a palpable and overriding error because he failed to properly assess the harm of an involuntary separation of the children from the appellant. There was no evidence that a negotiated settlement agreement acceptable to the appellant and reasonably congruent with the best interests of the children under Ontario law would be enforceable in Dubai. The trial judge should have also found a risk of serious harm to the children in the application of UAE custody law, because a parenting determination by the Dubai courts would not be made based on the children’s best interests, as understood under Ontario law. On these grounds, Lauwers J.A. would have allowed the appeal, and ordered that the Ontario Superior Court had jurisdiction to make a parenting order in relation to the children

(5) No.

The trial judge correctly applied the leading authority on parens patriae jurisdiction and found no necessity for the court to protect the children. There was no basis for appellate interference with this highly discretionary judgment call.

(6) Not answered.

This issue was not raised in the Notice of Appeal and was not argued by the appellant in her factum. Despite the fact the Office of the Children’s Lawyer (“OCL”) raised the issue in its factum, it was not properly before the Court and therefore it declined to consider it.

Brown JJ.A (concurring): The trial judge was correct in concluding that CLRA s. 40(3) “is all about the return of children to a place (in this case, Dubai) that they are most closely connected to, for a determination of custody issues in that place, provided no serious harm will result” and that the section falls within Ontario’s lawful authority to legislate matters of child welfare and family law. CLRA s. 40(3) is intra vires the legislative power of Ontario. The trial judge correctly found that a return order made under s. 40(3) does not infringe the appellant or children’s Charter rights under s. 2(a), 6(1), 7, or 15.

Lauwers J.A. (dissenting): Section 40, cl. 3 of the CLRA allows a court to order a child’s return to another jurisdiction in cases of wrongful retention. Because the dissent would have found that Ontario should exercise jurisdiction under s. 23, a return order under s. 40 was not available

James Henry Ting (Re), 2021 ONCA 622

[Lauwers J.A]

Counsel:

A. Rogerson and A. Jazayeri for the moving party, AHT

A. Ishai and A. Zur for the responding parties, CB and JW

facts:

This was an application for leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act, R.S.C. 1985, Rule 31(2) of the Bankruptcy and Insolvency General Rules, C.R.C., c. 386, and r. 61.03.1 of the Rules of Civil Procedure. The order sought to be appealed found the applicant, AHT, in contempt of court for failing to attend at an examination in aid of the foreign bankruptcy of his father, JHT, as required by the order of Penny J. dated January 15, 2019.

issues:

(1) Did the motion judge err by failing to recuse herself after hearing damning descriptions of the conduct and character of the moving party’s father during argument?

(2) Did the motion judge err in law by dispensing with the requirement of Rule 60.11(2) that requires personal service on the alleged contemnor and not by an alternative thereto unless the court orders otherwise?

holding:

Motion dismissed.

reasoning:

(1) No.

There was no merit to the suggestion that the motion judge was unable to disabuse herself of the prosecutor’s rhetorical flourishes. Such a disposition is routinely expected from judges. The motion judge properly instructed herself, and counsel raised nothing in her reasons to suggest that she did not meet this expectation.

(2) No.

The motion judge knew that the burden on the Trustees was to prove contempt beyond a reasonable doubt. To paraphrase Blair J.A. in Susin, there was substantive compliance here because the purpose of personal service had been met in the circumstances and there had been no substantial wrong or miscarriage of justice. There was nothing in this matter that rose to the level required for leave to be granted as specified in Pine Tree Resorts. The proposed appeal does not raise an issue that is of general importance to the practice in bankruptcy/insolvency matters nor to the administration of justice as a whole. There was no prima facie merit to the proposed appeal, and granting leave in these circumstances would unduly hinder the progress of the bankruptcy proceeding.

Forest Meadows Developments Inc. v. Shahrasebi, 2021 ONCA 620

[Benotto, Brown and Harvison Young JJ.A.]

Counsel:

M.A. Ross and V.M. Ivanov, for the appellant

E. Battiston and H. Rosenberg, for the respondent

facts:

The appellant and respondent entered into an Agreement of Purchase and Sale of land (“APS”) in March 2017. Closing was initially supposed to occur on March 25, 2018, but was later extended to October 29, 2019. Closing did not occur on October 29. The respondent argued that she was ready to close on October 29, and the failure of the appellant to close on that date was a breach of the APS. The appellant argued that it had relied on the representations by the respondent that she would not be able to close on October 29 because her house was not selling at a price necessary to finance the purchase of the new property, and therefore the appellant had slowed down construction and preparation for the final appraisal, which would be necessary to close and a prerequisite for the respondent to obtain the financing that had been preapproved. The appellant commenced an application arguing that the respondent had made representations that she would not close on October 29, that she was in anticipatory breach of the APS, and that the appellant was entitled to terminate the APS. The application judge dismissed the application. The application judge found that there had been no anticipatory breach or representations that could have given rise to reasonable reliance by the appellant. The appellant appealed the application judge’s order.

issues:

(1) Did the application judge err in finding that the respondent did not say or represent that she would not be able to close on October 29?

(2) Did the application judge err in failing to give weight to the September 12th meeting between the respondent, her husband, and a representative of the appellant?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court found that the application judge did not err in finding that the respondent did not say or represent that she would not be able to close on October 29. Findings of fact attract a high level of deference. The Court did not find any palpable or overriding error to justify intervention. The application judge’s findings were well grounded in the record before her. While the respondent had communicated the difficulty she was having selling her house for the price necessary, she had never said that she would not be able to close on October 29.

(2) No.

The Court found that the application judge did not err in failing to give weight to the September 12th meeting, which was recorded by the appellant. The application judge gave good reasons for declining to give much weight to that meeting, namely that there was ample written correspondence between the parties and their counsel and that there was clear unfairness where the respondent, and her husband were not aware that their conversation with the appellant on September 12th was being recorded.

Yekrangian v. Boys, 2021 ONCA 629

[Fairburn A.C.J.O., Miller and Zarnett JJ.A]

Counsel:

M. Solmon and R. Joshi, for the appellants

J. Barr and A. Dear, for the respondents

facts:

The appellants purchased a Toronto residential property in 2017, intending to replace the existing house with a much larger one. They have been prevented from proceeding with their plans by the existence of rights of way registered on title in favour of two neighbouring properties. The appellants had notice of the rights prior to completing the purchase because they are registered on title. The appellants believed, relying on advice from their realtor, that the rights of way had been abandoned. Their neighbours, the beneficiaries of the rights of way, believed otherwise. The appellants sought a declaration that the rights of way had been abandoned, and an order deleting them from title. The application judge disagreed and dismissed the application. The appellants appealed.

issues:

(1) Should the appellants be granted leave to adduce fresh evidence on appeal (a copy of a survey of 121 Massey dated December 16, 1986, a reported Ontario Municipal Board decision, and a deed of land for 174 Strachan registered in 1967)?

(2) Did the application judge misinterpret the rights of way?

a. What is the applicable standard of review?
b. Did the application judge make an extricable error in principle by apprehending the two rights of way as one and failing to distinguish them?
c. Did the application judge err in principle by requiring the appellants to produce evidence of non-use?
d. Did the application judge err in the interpretation of the purpose of the rights of way?

(3) Did the application judge err by finding the appellants had not established the rights of way had not been abandoned?

(4) Can the appellants seek as an alternative to deleting the right of way from title for the first time on appeal that the Court modify the right of way in favour of 176 Strachan and provide a declaration that 176 Strachan has abandoned the portion of its right of way currently obstructed by the house?

holding:

Appeal allowed in part.

reasoning:

(1) No.
None of the evidence satisfied the test for admission established in Palmer v. The Queen, [1980] 1 S.C.R. 759. There was no satisfactory explanation provided as to why the evidence, which pre-existed the hearing of the application, was not introduced then.

(2) No.

a. Deference.
Absent an extricable error of law, or a palpable and overriding error of fact, the application judge’s interpretation of the deed was subject to deference on appeal.

b. No.
Although there are two rights of way, in the sense that two different properties are entitled to use a portion of the lands of 121 Massey and two sets of legal relationships are established, the portion of the land that is burdened is more or less identical in both cases. The application judge did not misapprehend the two rights of way as one by failing to distinguish them. The application judge’s reasons as a whole made it abundantly clear that she understood there were two sets of legal relations at issue: one between 121 Massey and 174 Strachan, and one between 121 Massey and 176 Strachan.

c. No.
The application judge understood she had to consider all the relevant evidence from whatever source, and not simply the evidence led by the appellants, in order to determine whether the appellants had established an intention to abandon the rights of way.

d. No.
The appellant’s argument of tying the nature of the rights of way to the sheds located on the property was speculative. There was no express statement in any of the title documents explaining the nature of rights of way.

(3) No.

General Principles

The party asserting abandonment must prove, in the absence of express release, that the party holding the easement demonstrated a fixed intention never to assert the right conferred by the easement, or to transmit it to anyone else: Remicorp. An intention to abandon is found more readily where a permanent structure has been constructed over the right of way, and the holder of the right of way has not objected to it.

174 Strachan

The Court of Appeal concluded that the application judge made a palpable and overriding error in not finding that the house extension constituted a complete obstruction to the use of the right of way by 174 Strachan. It was inconceivable that the extension could have been built without the knowledge and acquiescence of a predecessor in title, who could not have failed to appreciate that it constituted a complete and permanent obstruction. The application judge erred by not finding that there had been an intention to abandon the right of way by a predecessor in title to the respondents CB and KB.

176 Strachan

The presence of the extension was, in itself, not sufficient to establish that predecessors in title to 176 Strachan had any intention to abandon the right of way in its entirety, as opposed to abandoning only one portion of it that was unnecessary for it use.

Conclusion

The application judge made no error in concluding that the appellants did not meet their burden of establishing non-use. More significantly, they did not meet their burden of proving on a balance of probabilities that either the current owners of 176 Strachan or their predecessors in title intended to abandon the right of way in total. The fences and sheds do not obstruct the right of way to the same extent as the extension of the house. They are not structures of any permanence, nor have they prevented the right of way from being used to access the rear of 176 Strachan for occasional maintenance, renovation, and repair. To the extent that the fences constituted an obstruction, they were and are easily removable. Similarly, a garden shed is not typically constructed in a manner that makes it impractical or disproportionately expensive to remove or modify to facilitate the sort of access contemplated by the rights of way. The sheds were either easily removable or the appellants failed to discharge their burden of establishing that they were not. Permitting sheds and fences (and even constructing a fence) did not, in this case, suggest abandonment.

(4) Yes, remitted to Superior Court for a determination of the dimensions of the portion of lands subject to the right of way in favour of 176 Strachan.

It was an inescapable conclusion that if the predecessors in title to 174 Strachan, by acquiescing to the construction of the extension of 121 Massey, abandoned their right of way, then the predecessors in title to 176 must similarly have abandoned that portion of the right of way on which the house extension sits.

Pinder v. Biggar, 2021 ONCA 623

[Benotto, Brown and Harvison Young]

Counsel:

S. Barbier and B. Tustain, for the moving parties

D. Spiller, for the responding party WB

J. Davies, for the responding party Hospodar Davies & Goold

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

facts:

The respondents moved to quash an appeal brought by the appellant from an order made by a motion judge following a garnishment hearing (the “Order”) on the basis that the Order was interlocutory.

In 2018, the appellant commenced an oppression action against the respondents in which he obtained an interlocutory injunction and orders to produce information. The appellant alleged that the respondents failed to comply with the production order and moved for contempt. The respondents brought a cross-motion to dissolve the injunction. By an order dated June 5, 2019, the motion was dismissed and the injunction was dissolved.

The appellant appealed the order to the Ontario Court of the Appeal and the Divisional Court. The order was upheld, and the appellant was ordered to pay costs totalling $128,500.

The respondents sought to enforce the cost orders in a garnishment hearing. The motion judge ordered the costs to be paid and an additional $5,600 for accrued post-judgment interest. The appellant appealed the motion judge’s Order. The respondent moved to quash the appeal as not being within the Court of Appeal’s jurisdiction.

issues:

(1) Is the Order interlocutory?

holding:

Motion granted.

reasoning:

(1) Yes.

The Order was interlocutory. It was made in the original oppression action. The Order did not finally dispose of the rights of the parties in the oppression action, finally dispose of any issue raised by a defence in the oppression action, or end a discrete proceeding before the court.

Since the Order was interlocutory, the Court had no jurisdiction to hear the appeal, and accordingly, the appeal was quashed.

SHORT CIVIL DECISIONS

Gefen v. Gaertner, 2021 ONCA 631

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

Counsel:

C. Graham, for the moving party

D. Moldaver, Q.C, for the responding party

D. McMurtry, for the responding party

South Beach Street Development Ltd. v. US Income Partners LLP, 2021 ONCA 624

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

Counsel:

M. R. Harris, for the appellants Amaryco Inc. and F. L.

Y. Pejman, for the respondent

Keywords: Civil Procedure, Settlements

COURT OF APPEAL SUMMARIES (SEPTEMBER 7 – SEPTEMBER 10, 2021)

By John Polyzogopoulos on September 10, 2021

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

Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of September 7, 2021.

Continue Reading

Congratulations to our very own Anthony H. Gatensby and W. Colin Empke for their success in Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance! In that case, the Court determined that there was no duty on the part of our client to defend its insured against two claims of breach of contract in an arbitration proceeding.

In James v. Chedli, a creditor made a demand for repayment of loans after the death of the debtor. The debtor’s estate successfully brought a motion for summary judgment. The court set aside the motion judge’s order, finding several palpable and overriding factual errors.

In Re: Urbancorp Toronto Management Inc., the Court refused to stay an order of the supervising CCAA judge ordering a sale process pending an appeal from the order.

Lastly, I am very excited and proud to help announce the release of Civil Procedure & Practice in Ontario (CPPO). The CPPO is a new free online resource jointly published by the University of Windsor and CanLII. As most of our readers probably know, CanLII is a not-for-profit organization operated by the Federation of Law Societies of Canada and is dedicated to assisting with access to justice through the free and open dissemination of the laws of Canada to all members of the public. The CPPO was written by a team of 135 leading litigators and experts in Ontario civil procedure, led by Professor Noel Semple of Windsor Law School.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

2161907 Alberta Ltd. v. 11180673 Canada Inc., 2021 ONCA 590

Keywords: Contracts, Breach, Wrongful Termination, Duty of Good Faith, Bad Faith, Doctrine of Frustration, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Bhasin v. Hrynew, 2014 SCC 71, M. Callow Inc. v. Zollinger, 2020 SCC 45, Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7

Urbancorp Toronto Management Inc. (Re), 2021 ONCA 613

Keywords: Bankruptcy and Insolvency, Civil Procedure, Stay Pending Appeal, Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Hodgson v. Johnston, 2015 ONCA 731, (Re) Brainhunter (2009), 62 C.B.R. (5th) 41 (Ont. Sup. Ct.), Marchant Realty Partners Inc. v. 2407553 Ontario Inc., 2021 ONCA 375

James v. Chedli, 2021 ONCA 593

Keywords: Evidence, Promissory Notes, Limitation, Standard of Review, Bills of Exchange Act, Evidence Act, Real Property Limitations Act, Limitations Act, Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1. S.C.R. 401, Burns Estate v. Mellon (2000), 48 O.R. (3d) 641 (C.A.), Royal Bank v. Davidson (1972), 25 D.L.R. (3d) (N.S.C.A.), Goss v. Nugent (1833), 5 B & Ad. 58, 110 E.R. 713 (Eng. K.B.), Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200

Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance, 2021 ONCA 612

Keywords: Contracts, Interpretation, Insurance, Professional Errors and Omissions, Coverage, Duty to Defend, Standard of Review, Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147; B.G. Checo International Ltd. v. British Columba Hydro and Power Authority, [1993] 1 S.C.R. 12, Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, Crum & Forster Specialty Insurance Company v. DVO, Inc., 939 F. (3d) 852 (7th Cir. Ct. App. 2019), Cabell v. The Personal Insurance Company, 2011 ONCA 105, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33

Short Civil Decisions

Tanti v. Tanti, 2021 ONCA 607

Keywords: Family Law, Civil Procedure, Appeals

Dunn Aggregates Limited v. Coco Paving Inc., 2021 ONCA 604

Keywords: Contracts, Asset Purchase Agreement, Restrictive Covenants, Civil Procedure, Interlocutory Injunctions, Undertaking in Damages, Costs, Rules of Civil Procedure, Rule 40.03, United States of America v. Yemec, 2013 ONSC 50, 35 C.P.C. (7th) 57, aff’d 2014 ONCA 274

Alajajian v. Alajajian, 2021 ONCA 602

Keywords: Family Law, Property, Spousal Support, Standard of Review, Costs

Florovski v. Florovski, 2021 ONCA 606

Keywords: Family Law, Disclosure

CIVIL DECISIONS

Alberta Ltd. v. 11180673 Canada Inc., 2021 ONCA 590

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

Counsel:

J. Thomas Curry, B. Kolenda and A. Quinn, for the Appellant
J. Hoffman, for the Respondent

facts:

In the decision under appeal, the application judge dismissed the application of 2161907 Alberta Ltd. (“216”) and granted the application of 11180673 Canada Inc. (“111”). 216 was ordered to pay the Branding Fee (defined below) and was declared to have acted in bad faith, having had no valid reason to terminate the agreements between the parties.

216 holds the Ontario rights to the “Tokyo Smoke” cannabis brand and licenses it to various retail operators. 111 won a cannabis retail operator license in an August 2019 allocation lottery by the Alcohol and Gaming Commission of Ontario’s (“AGCO”). In November 2019, 111 and AGCO entered into a License Agreement for the use of the Tokyo Smoke brand and a Sublease, whereby 111 rented the retail premises from 216 for the operation of a cannabis store. 216 offered 111 funding for start-up costs, including monthly rent of $105,409.03, and an approximately $2 million inducement to open under the Tokyo Smoke banner (the “Branding Fee”). The Branding Fee was due once 111 obtained its Retail Store Authorization from the AGCO.

Two days before opening, a dispute arose and 216 refused to pay 111’s June rent. Accordingly, 111 advised 216 that it would be laying off employees and not opening the store as planned. 216 took 111’s position as a “threat to cease to carry on business”, in breach of the License Agreement, and terminated its relationship with 111. 216 brought an application seeking a declaration that 111 had breached their various agreements, that the Branding Fee was not payable, and that 111 must vacate the retail premises. 111 brought a counter-application seeking payment of the Branding Fee, and a declaration that 216 had wrongfully terminated the License Agreement and breached its duty of good faith in the performance and enforcement of contractual relations.

issues:

(1) Did the application judge err in finding that 216’s termination of the License Agreement was invalid?

(2) Did the application judge err in finding that 216 had breached the duty of good faith?

(3) Did the application judge err in failing to issue a declaration that the Sublease between the parties was validly terminated on August 5, 2020?

holding:

Appeal allowed in part.

reasoning:

(1) No

The application judge’s interpretation and application of contractual terms was owed deference on appeal, and there was no basis to interfere with her findings. 111’s statements were not a “threat to cease to carry on business” for the purposes of the License Agreement. 111’s statements occurred after being told that 216 would not be financing June rent. 111 correctly believed that 216 had breached their agreements, and was consequently unsure whether the store would open in the face of an unexpected $95,000 shortfall. Given the circumstances, it was clearly reasonable for the application judge to find that 111’s statements did not meet the requirements of the parties’ termination clause.

(2) Yes.

216’s erroneous belief that the circumstances gave rise to rise to a right of termination does not amount to bad faith, regardless of 216’s desire to end its relationship with 111. The termination right was part of the parties’ bargain, and reflected the licensor’s legitimate interest in protecting its brand. The License Agreement contained an express contractual duty of good faith that bound both parties, and four legal doctrines were addressed to conclude that 216 did not seek to undermine 111’s interests in bad faith:

a. The duty of cooperation between the parties to achieve the objects of the contract

216 did not knowingly mislead 111 about its intention with respect to the Branding Fee or the deferral of rent. 216 did not lie to 111 at any point, but simply changed positions given new information. This position was not taken dishonestly, unreasonably, capriciously or arbitrarily.

b. The duty to exercise contractual discretion in good faith

While 216’s basis for terminating the License Agreement ultimately proved invalid, its position on termination was not so unreasonable, malicious, or inconsiderate of 111’s legitimate contractual interests as to constitute bad faith. A party is not prevented from exercising a valid right of termination simply because it is anxious to end a relationship, and “pounces” on what it views as an opportunity to do so.

c. The duty not to evade contractual obligations in bad faith

The fact that termination releases a party from making a significant payment does not amount to bad faith, even where a court later finds that the termination was invalid. 216 did not manufacture an artificial reason to avoid paying the Branding Fee, but believed its termination of the Licensing Agreement was justified.

d. The duty of honest performance

There was no deliberate attempt by 216 to create the conditions that triggered 111’s perceived contractual default. It would not be appropriate to characterize 216’s error as bad faith simply because it set in motion the events that resulted in the License Agreement’s invalid termination

(3) Issue not addressed.

The application judge awarded 216 its rent payments under the Sublease for June 1 to September 8, and granted 216 possession of the retail premises as of September 8. From a practical perspective, the Sublease was at an end and all of the outstanding issues under the Sublease were resolved. 216 sought a declaration that the Sublease was validly terminated and that, consequently, the License Agreement was frustrated and at an end. The issue regarding the doctrine of frustration should not be addressed for the first time on appeal.

Urbancorp Toronto Management Inc. (Re), 2021 ONCA 613

[Miller J.A.]

Counsel:

K. Kraft, N. Rabinovitch, and M. Beeforth, for the moving party
R. Schwill, M. Milne-Smith, and R. Nicholls, for the responding party, KSV Restructuring Inc., in its capacity as monitor
M. Gottlieb, J. Renihan, and J. Dietrick, for the responding party, Mattamy Homes Limited

facts:

The motion involved a group of companies owned by Urbancorp Inc. (“UCI”). The moving party, the Foreign Representative of UCI, sought a stay pending its motion for leave to appeal an order of the supervising judge.

The order authorized a process for the sale of a 51% interest in a real estate development project, Downsview Homes Inc (“DHI”), owned by a subsidiary of UCI, Urbancorp Downsview Park Developments Inc. (“Downsview”). The responding party, Mattamy Homes Limited (“Mattamy”), owned the remaining 49% of DHI.

Mattamy was the lender in a debtor-to-possessor facility (the “DHI Facility”) with Downsview. Downsview was unable to repay its debt, and Mattamy refused to extend the payment deadline unless a sale process was conducted for Downsview’s interest in DHI.

Mattamy and Downsview were also in a payment dispute that arose from a co-ownership agreement. The supervising judge ordered arbitration of the payment dispute. The outcome will have a material impact on the value of Downsview’s interest in the DHI.

Downsview argued before the supervising judge that the sale process for Downsview’s interest be postponed until the payment dispute could be arbitrated. The supervising judge held that the sale process should not be postponed. Downsview sought leave to appeal. Downsview moved for a stay of the sale process until the leave application could be decided.

issues:

(1) Should the motion to stay the sale process pending appeal be granted?
a. Is there a serious issue to be determined on appeal?
b. Will the moving party suffer irreparable harm if the stay is not granted?
c. Does the balance of convenience favour the granting of the stay.

holding:

Motion dismissed.

reasoning:

(1) No.

The test for staying an order pending appeal is set out in RJR-MacDonald Inc. v. Canada (Attorney General): (i) is there a serious issue to be determined on appeal, (ii) will the moving party suffer irreparable harm if the stay is not granted, and (iii) does the balance of convenience favour the granting of the stay?

a. No.

The moving party set out four issues that it characterized as important, both to the parties and to the CCAA as a whole: (i) the level of deference owed by the court to a “Super Monitor”; (ii) the extent to which a Super Monitor needs to obtain independent evidence to support the fairness and viability of a proposed sale process; (iii) whether the evidentiary onus regarding fairness and viability of the sale process remains with the Super Monitor or shifts to the party objecting to the sale process; and (iv) the extent to which a court can rely on a decision that is released after the parties’ hearing.

Additionally, the moving party faces the high hurdle of the standard of review applicable to a decision under the supervising judge in a CCAA proceeding. The weakness of the grounds for appeal as well as the unlikelihood that the moving party will satisfy the other ground of the test for leave to appeal, the moving party is unlikely to obtain leave to appeal. This factor weighed in favour of dismissal. The Court concluded that the first two issues would be arguable however weak, and the latter two issues would be highly unlikely to attract leave.

The question to be determined is whether refusal to grant relief would so adversely affect the moving party’s interests that the harm could not be remedied were the moving party to lose the motion but succeed on the appeal. To question the efficacy of the sale process in order to find irreparable harm to the moving party would be to effectively reverse a factual finding of the supervising judge, contrary to the role of an appellate court on a stay motion.

c. No.

The balance of convenience favoured Mattamy. Determining the balance of convenience requires an inquiry into which of the two parties will suffer the greater harm from granting or refusing the stay. Comparing the potential commercial prejudice to Mattamy from delaying the sale process against what the supervising judge concluded to be an absence of genuine prejudice to the moving party in proceeding with the sale process prior to the conclusion of the arbitration, the balance of convenience favoured Mattamy.

James v. Chedli, 2021 ONCA 593

[Feldman, Paciocco and Coroza JJ.A.]

Counsel:

P. Bakos, for the appellant
M. R. Kestenberg and A. Hershtal, for the respondents

facts:

After the death of a debtor, the creditor made a demand for payment of two outstanding loans made by promissory notes. The debtor’s estate brought a motion for summary judgment. The issue on the respondents’ summary judgment motion was whether those notes had become unenforceable, either because they were statute-barred, or because they had been materially altered without the assent of the borrowers, rendering them void.

The motion judge granted summary judgment in favour of the respondents and dismissed the claims against them. He found that: 1) the first note was not enforceable, either because it had already been paid off in full, or if it had not, then it had been materially altered without the assent of the borrowers and was voided and not enforceable against them; and 2) the second note was not enforceable because it was statute-barred. There was no independent corroboration that it had been consensually converted to a demand note and, because it remained a term note, the action was out of time.

The creditor appealed.

issues:

(1) Did the motion judge err by deciding the motion for summary judgment?

(2) Did the motion judge make an unreasonable inference from the evidence that the first promissory note was repaid by D.C. in November 2006 and the funds re-advanced as a new loan?

(3) Did the motion judge err by finding that s. 144(1) of the Bills of Exchange Act applied and voided the first note as against A.C.?

(4) Did the motion judge err by finding that there was insufficient corroborative evidence that D.C. assented to the amendment of the notes from term notes to demand notes?

holding:

Appeal allowed in part.

reasoning:

(1) No.

The appellant’s real complaint was with the inferences the motion judge drew from the evidence rather than with the summary judgment procedure. The Court held the motion judge was entitled to treat the record as complete and to conclude that it was sufficient to determine the action by way of summary judgement.

(2) Yes.

The Court outlined there was no evidence that either the appellant or D.C. intended to start fresh with a new loan for $500,000. The motion judge put his focus on the word “re-advanced”, which the Court held had no legal significance in determining the intention of the parties. Therefore, the motion judge’s finding that a new loan was issued was unreasonable.

(3) No.

The motion judge did not err, because the first note as against A.C. was materially altered by the appellant in his letter of November 20, 2006 to the Cs. He reduced the principal amount of the note from $531,000 to $500,000, and the timing of the interest payments on the new principal amount. The appellant acknowledged in his testimony that A.C. never gave her assent to this or any subsequent changes to the first note. Therefore, in accordance with s. 144(1) of the Bills of Exchange Act, the first note was void as against A.C. and unenforceable against her.

(4) Yes.

The Court concluded there were two pieces of potentially cogent, independent evidence to corroborate D.C.’s assent to the alteration of the first note. First, the evidence of N.D.L. indicating he spoke with D.C. after the conversion of the note and D.C. expressed his intention to repay both notes. Second, D.C. made a number of payments after the first note was converted, including a $30,000 bank draft of which $25,000 was allocated by the appellant to the loan covered by the first promissory note.

The Court concluded the motion judge misapprehended the evidence and drew an unreasonable inference by failing to find that D.C.’s payment of $30,000 to the appellant after the appellant amended the first note and converted it to a demand note constituted independent corroborative evidence of his assent. Further, N.D.L.’s evidence of his discussions with D.C. was consistent with that conclusion.

Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance Company, 2021 ONCA 612

[Feldman, Oaciocco, Coroza J.A]

Counsel:

Anthony H. Gatensby and W. Colin Empke for the appellant
J. Brown and C.J. Micucci for the respondent

Keywords: Keywords: Contracts, Interpretation, Insurance, Professional Errors and Omissions, Coverage, Duty to Defend, Standard of Review, Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147; B.G. Checo International Ltd. v. British Columba Hydro and Power Authority, [1993] 1 S.C.R. 12, Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, Crum & Forster Specialty Insurance Company v. DVO, Inc., 939 F. (3d) 852 (7th Cir. Ct. App. 2019), Cabell v. The Personal Insurance Company, 2011 ONCA 105, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC

facts:

The issue on appeal was whether the appellant insurer, XL Specialty Insurance Company, has a duty to defend its insured, the respondent Panasonic Eco Solutions Canada Inc., against two claims of breach of contract brought against Panasonic by a group of companies collectively operating as Solar Flow-Through Fund (“Solar”) in an arbitration proceeding. The insurance policy was a professional errors and omissions policy that excludes contractual liability claims unless the insured would have had the liability in the absence of the contract.

The XL policy insuring Panasonic is an errors and omissions policy, formally named a Professional and Contractor’s Pollution Legal Liability Policy. The policy covers monetary judgments that Panasonic becomes legally obligated to pay because of a claim “resulting from an act, error or omission in Professional Services”. XL agreed that Solar’s claim arises from the delivery of professional services.

The application judge referred to the principle that where the pleadings are imprecise, “the insurer’s obligation to defend will be triggered where, on a reasonable reading of the pleadings, a claim within coverage can be inferred”: Monenco.

The application judge was unable to determine on the record before him whether the damages Solar sought were attributable to negligence by Panasonic or to circumstances beyond Panasonic’s control. He presumed that this may be one of the issues in the underlying arbitration. The application judge noted, as an aside, that if it turned out that the delay was due to deliberate acts or omissions by Panasonic, as opposed to negligence, then there would be no coverage.

The application judge held that XL has a duty to defend on of the claims but not the other. The application judge concluded that Panasonic’s liability under the Proceeds Agreement was in effect a debt claim that arose under the contract and could not come within the exception to the exclusion. He also rejected the efficacy of the negligent misrepresentation and unjust enrichment claims. The negligent misrepresentation claim was based on representations by Panasonic that it would pay under the agreement, and was therefore based solely on Panasonic’s breach of the Proceeds Agreement by failing to make payments under it. The application judge further found that the unjust enrichment claim was excluded under the policy because the policy does not cover claims for equitable remedies.

XL appealed and Panasonic cross-appealed.

issues:

(1) What is the standard of review?

(2) What are the principles of interpretation and application of insurance policies?

(3) What is the proper interpretation of the exclusion clause?

(4) Does Solar’s claim under the Engineering Agreement give rise to a duty on XL to defend the claim?

(5) Does Solar’s claim under the Proceeds Agreement give rise to a duty on XL to defend the claim?

holding:

Appeal allowed. Cross-appeal dismissed.

reasoning:

(1) Correctness.

As per Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, the standard of review for the interpretation of a standard form policy of insurance is correctness.

(2)

The Court reiterated that the principles governing the duty to defend were articulated in the Supreme Court of Canada’s decision, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49 as follows: The duty to defend is triggered by the pleading by the claimant against the insured; the insurer has a duty to defend if the facts alleged in the pleading would, if true, require the insurer to defend; the duty to defend is broader than the duty to indemnify; pleadings are interpreted broadly; any doubt is resolved in favour of the insured; and the court should determine the substance of the claim rather than the legal label.

The Court followed and summarized the general principles of policy interpretation in the Supreme Court of Canada’s decision, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, as follows: If the language of the policy is unambiguous, the court should give effect to clear language, reading the contract as a whole; if the language of the insurance policy is ambiguous, the general rules of contract construction should be relied upon; courts should prefer interpretations that are consistent with the reasonable expectations of the parties. If the rules of construction fail to resolve the ambiguity, courts will construe the policy contra proferentum – against the insurer.

(3)

The meaning of the exception clause is that the policy continues to cover professional losses caused by the insured in performing its professional functions in its relationship with the claimant that arise in law, regardless of the terms of their contract. These would include liability for losses that third parties may suffer as a result of an insured’s negligence in performing the professional services contract, as well as liability to the claimant for negligence in performing the contractual obligations under the doctrine of concurrent liability in contract and tort. The interpretation makes sense from the point of view of both the insured and the insurer, and gives effect to both their reasonable expectations, in light of the purpose of the professional errors and omissions insurance contract. The insurer will be responsible for the losses caused by the insured’s negligent performance of its professional obligations; but the insurer will not indemnify the insured for any extra obligations it undertakes in a contract, or for the breach of any extra obligations that it undertakes in a contract.

(4) No.

The claim does not give rise to a duty to defend under the Proceeds Agreement. The exclusion excludes coverage for liability arising from breach of contract, and the exception does not apply because the obligation to pay liquidated damages is purely contractual and does not otherwise arise. A liquidated damages clause demonstrates the fairness of the contractual exclusion and exception clause of the insuring agreement when it is interpreted in accordance with the reasonable expectations of the parties to that agreement.

The trial judge erred in law in his application of the test for determining the duty to defend by failing to apply the exclusion and the exception to the exclusion in his analysis of the liquidated damages clause.

(5) No.

The claim does not give rise to a duty to defend under the Proceeds Agreement. The Court found the claim under the Proceeds Agreement is essentially a debt owing and arises under the contract. Panasonic’s liability under the Proceeds Agreement arose out of its assumption of liability under a contract and out of its breach or contract, falling squarely within the contractual exclusion. The claim could not come within the exception because Panasonic would not have had the liability to Solar to pay it following the sale of the projects, except under the contract. There would be no claim without the contract. Therefore, if the claim came within the coverage under the policy, it is excluded by contractual liability exclusion clause, and it is not saved by the exception to the exclusion.

The claims for negligent misrepresentation and unjust enrichment do not give rise to a duty to defend. The negligent misrepresentation alleged against Panasonic is that it misled Solar into working on the promise that it would be paid under the Proceeds Agreement. This was solely based on Panasonic’s failure to make payments under the Proceeds Agreement, in breach of the contract. The contractual liability exclusion was triggered, and the exception to the exclusion did not apply. Unjust enrichment is an equitable claim that is specifically not compensable under the XL insurance policy.

SHORT CIVIL DECISIONS

Tanti v. Tanti, 2021 ONCA 607

[Strathy C.J.O., Lauwers and Sossin JJ.A.]

Counsel:

J. Nwawe, for the moving party
W.R. Gilmour, for the responding party
K. Kinch, for the responding party

Keywords: Family Law, Civil Procedure, Appeals

Dunn Aggregates Limited v. Coco Paving Inc., 2021 ONCA 604

[Juriansz, Lauwers and Sossin JJ.A.]

Counsel:

J. Ball, for the appellant
J. Leslie & T. Kalnins, for the respondent

Alajajian v. Alajajian, 2021 ONCA 602

[Juriansz, Lauwers and Sossin JJ.A.]

Counsel:

E. Birnboim, for the appellant
D.Z. Frodis, for the respondent

Keywords: Family Law, Property, Spousal Support, Standard of Review, Costs

Florovski v. Florovski, 2021 ONCA 606

[Strathy C.J.O., Lauwers and Sossin JJ.A.]

Counsel:

F. Yehia and G. Pop-Lazic, for the appellant
C. Doris and S. Bunting, for the respondent

Keywords: Family Law, Disclosure

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Counsel:

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email