COURT OF APPEAL SUMMARIES (November 27– December 1)

By John Polyzogopoulos on December 2, 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 November 27, 2023.

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In Ontario Teacher Candidates’ Council v. Ontario (Education), the Court of Appeal set aside the order of the Divisional Court. The Divisional Court had erred in finding that certain math testing of teacher candidates was unconstitutional because it discriminated against racialized candidates. The evidence relied upon by the Divisional Court had been incomplete and therefore inconclusive.

In Elkins v. Van Wissen, the Court addressed allegations of bad faith evictions under the Residential Tenancies Act upon the sale of a rental home.

Willick v Willard is a Medmal case. A patient who received medical treatment after a fall during renovation work tragically died of a ruptured spleen a few weeks later. The Court upheld the trial judge’s decision that both treating doctors had met the standard of care. The patient had not presented with evidence of a ruptured spleen.

Other topics covered this week included breach of fiduciary duty/conspiracy and security for costs.

Wishing everyone a nice weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Ontario Teacher Candidates’ Council v. Ontario (Education), 2023 ONCA 788

Keywords: Regulated Professions, Teachers, Constitutional Law, Charter Rights, Equality, Canadian Charter of Rights and Freedoms, ss.1, 15, Ontario College of Teachers Act, 1996, S. O. 1996, c. 12, Fraser v. Canada (Attorney General), 2020 SCC 28, Ontario v. G, 2020 SCC 38, R. v. Sharma, 2022 SCC 39, Quebec (Attorney General) v. Alliance du personnel professional et technique de la santé et des services sociaux, 2018 SCC 17, Griggs v. Duke Power Co., 401 U. S. 424 (1971), British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3, Withler v. Canada (Attorney General), 2011 SCC 12

Elkins v. Van Wissen, 2023 ONCA 789

Keywords: Real Property, Landlord and Tenant, Residential Tenancies, Grounds for Termination and Eviction, Sale and Occupation by Purchaser, Bad Faith, ResidentialTenancies Act, 2006, S.O. 2006, c. 17, ss. 49(1), 57(1)(b), TST-94914-18 (Re), 2019 CanLII 134579 (Ont. L.T.B.), Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Honsberger v. Grant Lake Forest Resources Ltd., 2019 ONCA 44, 431 D.L.R. (4th), Price v. Turnbull’s Grove Inc., 2007 ONCA 408, CET-67272-17 (Re), 2017 CanLII 70040 (Ont. L.T.B.), Duarte v. 2132338 Ontario Ltd., 2021 CanLII 146522 (Ont. L.T.B.), TST-10645-19 (Re), 2020 CanLII 31285 (Ont. L.T.B.), TST-42753-13-RV (Re), 2014 CanLII 28557 (Ont. L.T.B.), R. v. Sheppard, 2002 SCC 26, Hanna & Hamilton Construction Co. Ltd. v. Robertson, 2021 ONCA 660

Bank of Nevis International Limited v. Kucher, 2023 ONCA 793

Keywords: Civil Procedure, Security for Costs, Jurisdiction, Forum Non Conveniens, Rules of Civil Procedure, rules 56.01, 61.06(1), Thrive Capital Management Ltd. v Noble 1324 Queen Inc., 2021 ONCA 474, NDrive, Navigation Systems S.A. v Zhou, 2022 ONCA 39, Tsai v Dugal, 2021 ONCA 170

Willick v. Willard, 2023 ONCA 792

Keywords: Torts, Negligence, Medmal, Standard of Care, Causation, Civil Procedure, Appeals, Sufficiency of Reasons, Evidence, Credibility, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(6), Mustapha v. Culligan of Canada Ltd., [2008] 2 S.C.R. 114, Armstrong v. Royal Victoria Hospital, 2019 ONCA 963, Calin v. Calin, 2021 ONCA 558, Hacopian-Armen Estate v. Mahmoud, 2021 ONCA 545, R. v. Dinardo, 2008 SCC 24, Sacks v. Ross, 2017 ONCA 773, R. v. Richardson (1992), 9 O.R. (3d) 194 (C.A.), R. v. Sheppard, 2002 SCC 26, R. v. G.F., 2021 SCC 20, Farej v. Fellows, 2022 ONCA 254, Brochu v. Pond (2002), 62 O.R. (3d) 722 (C.A.), Vokes Estate v. Palmer, 2012 ONCA 510, Iannarella v. Corbett, 2015 ONCA 110

Canadian National Railway Company v. Holmes, 2023 ONCA 800

Keywords: Torts, Conspiracy, Breach of Fiduciary Duty, Joint and Several Liability, Remedies, Constructive Trust, Disgorgement, Punitive Damages, Civil Procedure, Stay of Proceedings, Rules of Civil Procedure, rule 61.04(1), Cirillo v. Ontario, 2021 ONCA 353, Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404

Short Civil Decisions

Fehr v. Gribilas, 2023 ONCA 791

Keywords: Costs

Heliotrope Investment Corporation v. Beach, 2023 ONCA 794

Keywords: Costs

CIVIL DECISIONS

Ontario Teacher Candidates’ Council v. Ontario (Education), 2023 ONCA 788

[Doherty, Nordheimer and Monahan JJ.A.]

Counsel:

Y. Ranganathan, R. Amarnath and M. Stevenson, for the appellants

M. Estabrooks and W. Tamrat, for the respondents

M. Horner and N. Farahani, for the intervener Ontario Human Rights Commission

S. Luft and J. Gutman, for the intervener Ontario Secondary School Teachers’ Federation

G. Avraam, J. Bernardo and R. Khan, for the intervener Canadian Constitution Foundation

facts:

All certified teachers in Ontario may be assigned to teach math to students in Grade 6 or below. To qualify to teach math beyond Grade 6, additional qualifications in math are generally required. However, a teacher without additional qualifications in math can be asked to teach to students in Grades 7 to 12 based on regulations under the Ontario College of Teachers Act, 1996, (the “OCTA”) that permit a principal to assign a teacher to teach in a division or subject not listed on their certificate by agreement of the teacher and principal, with the approval of a supervisory officer. Further, due to the competitive nature of teaching positions, newly certified teachers may find that the only available opportunities are positions that require them to teach math.

In response to a marked decline in Ontario elementary students’ math scores between 2015 and 2019, as measured by the Education Quality and Accountability Office (“EQAO”), Ontario amended the OCTA to add a requirement that teacher candidates successfully complete any prescribed examinations relating to mathematics before obtaining a certificate of qualification from the College. The government subsequently enacted a regulation mandating the EQAO to develop and implement the Math Proficiency Test (“MPT”).

The MPT was officially administered in two testing windows in 2021, from May 10 – August 20 and September 27 – December 15, a 27-week period.

The Divisional Court held that the Ontario College of Teachers (the “College”) should certify candidates without regard to their results on the MPT. Finding that the MPT violated s. 15(1) of the Charter, is not justified under s. 1 and is unconstitutional, and the Court declared both O. Reg. 271/19, Proficiency in Mathematics, and s. 18(1)(c) of the OCTA, to be unconstitutional and of no force and effect.

The Divisional Court made its findings based on the July 2021 Data. The results from those who provided demographic information reflected significant disparities in relative success rates for test takers in different race categories. For example, as of July 26, 2021, 70% of Black candidates and 71% of Indigenous candidates passed the MPT, as compared with 92% of East/Southeast Asian candidates and 91% of White candidates. However, the EQAO noted that these differences needed to be interpreted with caution given the small numbers of test takers from certain demographic groups, including Indigenous and Latinx.

The appellants appealed the December 17, 2021 Order of the Divisional Court declaring that MPT infringes s. 15(1) of the Charter and cannot be justified under s. 1.

issues:

Did the Divisional Court err in finding a prima faciebreach of s. 15(1) of the Charter, either at Step 1 or Step 2 of the s. 15 inquiry?
Did the Divisional Court err in holding that any infringement of s. 15(1) caused by the MPT is not justified under s. 1 of the Charter?

holding:

Appeal allowed.

reasoning:

Yes,

There are two requirements that must be satisfied by a claimant seeking a finding that a challenged law or state action infringes s. 15(1) of the Charter: (i) the challenged law or state action creates a distinction, on its face or in its impact, on the basis of an enumerated or analogous ground; and (ii) the distinction imposes a burden or denies a benefit in a discriminatory manner, by having the effect of reinforcing, perpetuating or exacerbating disadvantage.

Where the claimant alleges that a law which is neutral on its face violates s. 15 because of its adverse effects or impacts, the claimant must show that the law has a “disproportionate impact” on members of a protected group. Such a disproportionate impact can be proven in different ways, including if there are clear disparities in how a law affects the claimant’s group as compared to other comparator groups.
Step 2 of the s. 15 inquiry, whether the distinction imposes a burden or denies a burden in a discriminatory manner, is satisfied if the challenged law creates a distinction that reinforces, perpetuates or exacerbates a disadvantage that exists independently of the impugned distinction.

(1) The Divisional Court Erred in Finding that the MPT Has a Disproportionate Adverse Impact on Entry to the Profession for Racialized Teacher Candidates

The Divisional Court based its findings largely on results from the first seven weeks of the administration of the MPT. This data was both incomplete and preliminary and provided an insufficient basis for the findings. The data was incomplete in the sense that less than half of the candidates who would eventually write the MPT in 2021 had done so by July 26, 2021. A further complication was that not all of those who wrote the test by July 26, 2021, had completed the voluntary demographic questionnaire. This meant the number of candidates who had self-identified as members of racialized groups as of that date was quite small, representing a fraction of the total number of MPT test takers in 2021.

The Divisional Court refused the appellants’ invitation to await further results before making a binding determination on two grounds: (i) there were additional burdens borne by candidates who had to rewrite the test, including a delay in being admitted to the College, which were disproportionately imposed on racialized candidates; and (ii) awaiting further results was wrong because it meant that more racialized candidates would be required to attempt and fail the MPT.

The Court held that the Divisional Court made palpable and overriding errors in these findings and determined that the two grounds relied upon did not justify ruling on the constitutionality of the MPT. The difficulty with the first justification, (i) the adverse impact on racialized candidates from having to rewrite the MPT, was based on a lack of evidence to support it. The second justification, (ii) that any delay simply meant that more racialized candidates would be required to attempt and fail the MPT, was an inference that was unavailable on the facts. The Court noted that in the end, the opposite turned out to be true.

The Court concluded that given the preliminary and incomplete record, the respondents failed to discharge their onus under s. 15. The Divisional Court’s finding that the MPT violated s. 15 of the Charter could be set aside on this basis alone.

(2) The Evidence from the 2021 Administration of the MPT Failed to Establish that it has had a Disproportionate Adverse Impact on Racialized Candidates

No clear and consistent disparities were evident from the first administration of the MPT in 2021. Not only were the differences in success rates between racialized and non-racialized candidates much smaller than in the relevant precedents, but the December 2021 Data was not final. This is because approximately 300 of the candidates who unsuccessfully wrote the test in 2021 did not attempt the test a second time.
A high proportion of candidates who did not pass the test on their first attempt succeeded in subsequent attempts by December 2021. What is unknown is: (i) when during 2021 these 300 candidates who did not pass the test on their first attempt actually wrote the test; (ii) why they did not attempt to rewrite it by December 2021; and (iii) whether any of them would have rewritten the test in 2022 had they been provided with the opportunity to do so. Had the MPT been offered in 2022, it is possible that some proportion of those 300 candidates would have attempted and passed the test, thereby raising the overall success rate for both racialized and non-racialized candidates beyond that observed in the December 2021 Data. Ignoring the results of those who have passed the MPT but required more than one attempt to do so does not accurately reflect the impact of the test on entry to the profession.

(3) The Respondents Did Not Establish that the MPT is Discriminatory by Having the Effect of Reinforcing, Perpetuating or Exacerbating Disadvantage

The Court found that based on the record, the respondents did not establish that the MPT was discriminatory, in the sense that it demonstrably perpetuated, exacerbated or reinforced the existing disadvantage of racialized teachers in Ontario.
Nevertheless, despite the clear evidence of disadvantage associated with their race experienced by the claimant group at all stages of their education, the Court was unable to conclude, based on the record, that the MPT would reinforce, perpetuate or exacerbate that disadvantage.

Ontario argued that it is not discriminatory to require professionals to demonstrate competence in a subject needed to properly perform their jobs, nor is it a disadvantage. Moreover, the frequent administration of the MPT to allow multiple retakes, coupled with only informing the Registrar when a candidate successfully completes the MPT, takes into account the needs of those candidates who may not pass on a first attempt. It was to be kept in mind that the MPT was based on questions drawn from EQAO exams administered to Ontario students in grades 3, 6 and 9.

The Court found that the Divisional Court erred in law by relying on general evidence on standardized testing without regard to the fuller context of the content of the MPT and its administration, as is required at step two of the s. 15(1) inquiry. Had it done so, it would have found insufficient evidence to support a breach of the claimants’ s. 15 rights.

Undecided

The Court found it unnecessary to consider whether, had there been a finding of a violation of s.15, any such violation could have been justified under s.1 of the Charter.

Elkins v. Van Wissen, 2023 ONCA 789

[Gillese, Benotto and Copeland JJ.A.]

Counsel:

R. Hardy, for the appellant M.E.

No one appearing for the appellant J.F.

A. Dos Reis, for the respondent J.V.W

No one appearing for the respondent G.V.W

No one appearing for the respondent M.V.W.

D.M. Fulton, for the respondents Embleton Homes Inc., P.S.C., S.S.K., M.S., Embleton Homes and S.S.

E. Fellman, for the Landlord and Tenant Board

Keywords: Real Property, Landlord and Tenant, Residential Tenancies, Grounds for Termination and Eviction, Sale and Occupation by Purchaser, Bad Faith, Residential Tenancies Act, 2006, S.O. 2006, c. 17, ss. 49(1), 57(1)(b), TST-94914-18 (Re), 2019 CanLII 134579 (Ont. L.T.B.), Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Honsberger v. Grant Lake Forest Resources Ltd., 2019 ONCA 44, 431 D.L.R. (4th), Price v. Turnbull’s Grove Inc., 2007 ONCA 408, CET-67272-17 (Re), 2017 CanLII 70040 (Ont. L.T.B.), Duarte v. 2132338 Ontario Ltd., 2021 CanLII 146522 (Ont. L.T.B.), TST-10645-19 (Re), 2020 CanLII 31285 (Ont. L.T.B.), TST-42753-13-RV (Re), 2014 CanLII 28557 (Ont. L.T.B.), R. v. Sheppard, 2002 SCC 26, Hanna & Hamilton Construction Co. Ltd. v. Robertson, 2021 ONCA 660

facts:

ME and her son JF (the “Tenants”) rented and occupied a single-family residence (the “Residence”). The landlords were GW, JW, and MW (the “Vendor Landlords”). PC and SK (the “Original Purchasers”) signed and dated an Agreement of Purchase and Sale (the “APS”) for the Property. A Form 160, “Registrant’s Disclosure of Interest Acquisition of Property” was also completed. On the Form 160, PC declared he was a registered real estate salesperson representing Homelife/Miracle Realty Ltd. in connection with a proposed offer to purchase the Property. Immediately below that, in preprinted words, the Form 160 provided: “Please be advised that, if the proposed Offer is accepted, I will be either directly or indirectly acquiring an interest in your Property”. Below that statement, a preprinted note called for an explanation if the registrant’s interest was indirect. PC handwrote the following explanation: “Being a partner, we are buying this property as a future development”.

Pursuant to s. 49(1) of the Residential Tenancies Act, (“RTA”), the Vendor Landlords served the Tenants with a Form N12, entitled “Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit”. The Tenants vacated. Over the following months, the Residence remained vacant. Toward the end of 2018, the son of one of the Original Purchasers moved into the Residence but stayed for only approximately 25 days. The Residence was subsequently rented out for a higher amount than what the Tenants had been paying. The Tenants later filed three applications with the Board: T1, T2, and T5 applications. The Tenants alleged that the s. 49 Termination Notice was given in bad faith and the Original Purchasers did not want the Residence for their own use.

The Board dismissed the Tenants’ T5 Application. The Tenants appealed the Board decision to the Divisional Court pursuant to s. 210(1) of the RTA. The Divisional Court dismissed their appeal.

issues:

Did the Board err in their approach to determining whether, pursuant to s. 57(1)(b) of the RTA, the Vendor Landlords acted in bad faith in giving the s.49 Termination Notice?
Did the Divisional Court err by failing to address the potential liability of the Purchasers of the Property?

holding:

Appeal allowed.

reasoning:

Yes.

Section 57(1)(b) required the Board to determine whether the Vendor Landlords gave the s. 49 Termination Notice “in bad faith”. The Board decided that matter based on a single consideration: at the time the Vendor Landlords served the s. 49 Termination Notice, the Vendor Landlords said they had “no reason not to believe it was the [Original] Purchasers’ intention for a family member to move into the unit”. The Court held that this was an unduly narrow approach for determining bad faith under s. 57(1)(b) and amounts to an error of law. The Court further held that to ignore events after a landlord gives a tenant a s. 49 termination notice limits the Board from fulfilling its responsibility to determine bad faith under s. 57(1)(b) and undermines the RTA’s stated purpose of providing tenants with protection from unlawful evictions.

When ss. 49(1) and 57(1)(b) are read together, it is clear that the objective of those provisions is to prevent the sale of a property from being used to unlawfully evict a tenant. It is an error of law for the Board to restrict its consideration to the evidence at the point in time when the landlord gives the tenant a s. 49 termination notice.

As a result of artificially narrowing the assessment of bad faith to when the s. 49 Termination Notice was given, the Board failed to consider that, after the notice was given but before the sale of the Property closed, the Vendor Landlords and/or their lawyer knew that title to the Property would be taken in the name of Embleton Homes Inc., a corporation. A corporation cannot personally occupy a residence for residential purposes. This information must be relevant to the Board’s determination of the Vendor Landlords’ bad faith under s. 57(1)(b).

When deciding the Tenants’ T5 Application, the Board did not consider whether the Purchasers “in good faith” required the Residence for residential occupation. According to the Court, that failure constituted an error in law. When deciding applications brought under s. 57(1)(b), it is insufficient for the Board to assess only whether the landlord acted in bad faith in giving a s. 49 termination notice. The Board must also assess the purchaser’s good faith, which s. 49(1) requires. After making both those determinations, the Board must then consider what orders to make in respect of each of the landlord and the purchaser.

The failure of the Board to address the evidence on the central issue of the Vendor Landlords’ bad faith prevented appellate review and constituted an error of law. The Court concluded that because the Board failed to make the factual findings necessary to fairly resolve the Tenants’ T5 Application, the Court was not in a position to decide it.

Yes.

The Tenants’ appeal to the Divisional Court required that Court to determine whether the Board committed errors on questions of law. The Divisional Court dismissed the appeal on the basis that the Board made no such errors. However, the Board did err on questions of law by, among other things, failing to address the Purchasers’ potential liability. The Court held that it was therefore an error of law for the Divisional Court to fail to identify and address that Board error of law. On a fair reading of the Tenants’ documents and submissions before the Board, it was apparent that the Purchasers’ potential liability was a live issue which the Board was required to address.

Bank of Nevis International Limited v. Kucher, 2023 ONCA 793

[Trotter J.A. (Motions Judge)]

Counsel:

N. Shaheen and M. Kawatra for the moving parties

J. Hardy and R. O’Hare, for the responding party

facts:

The respondents in this appeal moved for security for costs under rr. 56.01 and 61.06(1) of the Rules of Civil Procedure.

The appellant, a Nevisian bank which has no connections to Canada, commenced an action against the respondents in defamation, breach of a confidentiality agreement, and related causes of action. The respondents brought a motion to dismiss the action on jurisdictional grounds. They also asserted that the Canadian courts should decline jurisdiction under the doctrine of forum non conveniens. The motion judge accepted both submissions, dismissed the action and awarded costs in the amount of $50,000. The bank appealed.

issue:

Should security for costs be granted?

holding:

Motion granted.

reasoning:

Yes.

The test for granting security for costs is set out in rules 61.06 and 56.01 of the Rules of Civil Procedure. Rule 61.06 (1) requires a party to show where it appears that,

(a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal; (b) an order for security for costs could be made against the appellant under rule 56.01; or (c) for other good reason, security for costs should be ordered, a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just[…].

Rule 61.06(2) provides that if an appellant fails to comply with an order under subrule (1), a judge of the appellate court on motion may dismiss the appeal.

The Court stated that it must first be determined whether the requirements of r. 61.06(1)(a), (b), or (c) are met; if so, the question is whether it is just to order security for costs, considering the circumstances and the interests of justice. The Court found that this was an appropriate case to award security for the costs of the appeal and the underlying motion. The appellant acknowledged that it should be required to post some security based on its complete lack of connection to Ontario.

The Court also found that there was a solid basis to conclude that the appeal was frivolous, and also possibly vexatious.

The motion judge had provided thorough reasons for concluding that Nevis was the only appropriate forum to commence the action. In the Court’s view, the appellant’s controlling and directing mind, Mr. P., had attempted to avoid invoking the jurisdiction of the Nevisian courts for fear of not receiving a fair trial in light of outstanding criminal proceedings against him. The motion judge concluded that this claim was without foundation.

There was “other good reason” to order security for costs. At the heart of the matter was the disappearance of US$2.53 million. The Court noted that this was important context that bears on the risk the respondents face in being unable to recover the considerable costs already expended in responding to what would appear to be a retributive action commenced by the appellant.

The Court directed the appellant to post security for costs for the appeal in the amount of $25,000, and for the underlying motion in the amount of $50,000.

Willick v. Willard, 2023 ONCA 792

[Tulloch C.J.O., Lauwers and Miller JJ.A.]

Counsel:

T. Samson and R. Marinacci, for the appellants

Sarit E. Batner and Erin S. Chesney, for the respondents

facts:

On March 10, 2014, BW was doing renovation work and fell. MW, his spouse, took him to Welland County Hospital where he was admitted to the emergency room. Dr. PW treated him and eventually discharged him, referring him to his family doctor, Dr. MC, for follow up.

BW suffered from non-alcoholic cirrhosis of the liver such that his blood did not clot as quickly as the average person. He also suffered from splenic hypertension and an enlarged spleen. As a result, compared to the average person, BW had a relatively high risk of splenic rupture and consequent fatal injury.

BW underwent three CT scans. The first CT scan was of BW’s chest and showed that his left ninth rib was fractured and that there was fluid in his chest. The second CT scan showed dense fluid in the peritoneal cavity and heterogeneity in his spleen, which raised the suspicion of a splenic injury. The third CT scan showed BW’s pre-existing conditions: cirrhosis of the liver, splenic hypertension, and an enlarged spleen. BW’s second and third CT scans showed fluid in his peritoneal cavity but, in PW’s clinical judgment, that fluid was not blood. PW based this judgment on the fact that the amount of fluid had not changed between CT scans, which one would expect if an organ were bleeding.

On March 18, 2014, BW saw his family doctor, MC, who reviewed his hospital records, conducted a physical examination, and ordered an ultrasound for April 27, 2014. The physical examination had not revealed any bruising.

On March 24, 2014, BW passed away. He was 51 years old. The cause of death was exsanguination – loss of blood, resulting from the rupture of a subcapsular hematoma in his spleen. The appellants, BW’s spouse and his sons sued the respondents, Dr. PW and Dr. MC for medical negligence in treating BW.

The trial judge dismissed the action. He found that BW had not suffered a detectable injury to his spleen when Dr. PW treated him. The trial judge also found that Dr. MC’s decision to clear BW for a return to work was appropriate. The appellants appealed the trial judge’s decision concerning Dr. PW and Dr. MC.

issues:

Did PW and MC, each or both, breach the standard of care that each of them owed to BW?
Did the trial judge err in law in his analysis of the respondents’ credibility?
Did a breach of the standard of care cause BW’s death?
Did the trial judge’s reasons provide an adequate basis for the appeal?

holding:

Appeal dismissed.

reasoning:

The Court in addressing the breach of standard of care, noted that “[i]n any case where standard of care is in issue, the court must determine what is reasonably required to be done (or avoided) by the defendant”: Armstrong at para 87.

The Court rejected the argument that the trial judge’s decision contained no analysis as to what the standard of care was for a reasonably prudent doctor. In the view of the Court, the trial judge’s reasons showed that he engaged with the standard of care that was applicable to each respondent.

On the content of the standard of care owed by PW, the trial judge noted that the respondent’s expert general surgeon, Dr. Cobourn, opined that PW had “met the standard of care” because “there was no clinical evidence at the time of [BW’s] admission to hospital that he had suffered either type of splenic injury” and “therefore no reason… to have been concerned about the risk of delayed splenic rupture”: at para. 24. The trial judge had “preferred the evidence” of Dr. Cobourn: at para. 48. The trial judge also stated that “in the absence of a splenic injury… it was appropriate to refer the patient to his family doctor for follow up”: at para. 44. These statements articulated the standard of care applicable to PW. In the absence of evidence of splenic injury, a reasonably prudent surgeon in PW’s circumstances would have discharged the patient without cautions against delayed splenic rupture.

The standard of care for MC was likewise demonstrated in the opinions of the experts. The respondents’ expert family doctor, Dr. Bornstein, opined that “it was appropriate for MC to let [BW] go back to work” because “his spleen had not been injured on March 10”: at para. 31. The trial judge agreed, holding that MC was “entitled to conclude that [BW] had not suffered a splenic injury” on the basis of PW’s conclusions as well as his own physical examination: at para. 45. In light of these considerations, the trial judge found that MC’s advice “was reasonable and met the standard of care”: at para. 45. These statements constituted an articulation of the standard of care applicable to MC. In the absence of evidence of splenic injury, it was noted that a reasonably prudent family doctor in MC’s circumstances would have cleared BW for work without cautions against splenic rupture.

The trial judge considered PW’s testimony to be credible despite three challenges advanced by the appellants. Two of the challenges involved two documents indicating that BW might have suffered a peritoneal hemorrhage while he was under PW’s care. The third challenge pertained to a finding of fact that PW discussed the CT scans with Dr. Aggarwal despite the lack of a record of that conversation.

The appellants characterized the trial judge’s credibility findings as amounting to legal error. However, the Court stated that it recognizes the particular advantage of trial judges in assessing the credibility of witnesses and defers to credibility findings in the absence of palpable and overriding error: Calin at para 16; Madmoud at para 66-67. Given the advantages of trial judges in assessing credibility, the Supreme Court has stated: “Rarely will the deficiencies in the trial judge’s credibility analysis, as expressed in the reasons for judgment, merit intervention on appeal”: R. v. Dinardo, para 26.

The appellants also submitted that it was an error to treat MC’s testimony as credible because it was based on knowledge that MC did not have at the time he assessed BW. Specifically, the appellants argued that the imaging available to MC only ruled out a peritoneal hemorrhage, not a splenic injury altogether. The appellants stated that MC was therefore wrong to suggest that PW had ruled out splenic injury and was not concerned about it. However, this was considered by the Court to be too narrow a view of the evidence that was available to MC, which established that PW had ruled out splenic injury, including the fact of BW’s discharge by PW, BW’s hospital admissions records indicating that hospital staff had identified no splenic injury, and MC’s own physical examination of BW.

Given the trial judge’s analysis, there was no basis on which the Court could reject the trial judge’s credibility findings. Each finding of credibility was open to the trial judge on the evidence before him.

Firstly, the issue in this case was whether there was a breach of a standard of care, and whether it caused BW’s injury. It was not incumbent on the trial judge to make a definitive ruling on the cause of BW’s death if there was no breach of the standard of care. In other words, having found no breach of the standard of care, he was not required to go on to make a finding on the cause of BW’s death.

Second, the Court rejected the appellant’s argument that the conclusion on an intervening event was an “irrational inference.” The submission on the potential intervening event somewhat overstated the strength of the trial judge. He was aware that there were two conclusions available on the evidence: that the delayed rupture was caused by the fall on March 10 or that the rupture was caused by another, later injury.

Third, the Court noted that in choosing between the two possible causes of the ruptured subcapsular hematoma available on the evidence, the trial judge’s determination was not “irrational.” Instead, it was a reasonable statement given his finding that there were no visible subcapsular hematomas during BW’s stay at the Welland County Hospital and that BW experienced new pain and bruising well after the initial trauma.

The appellants argued that the trial judge’s reasons had not clearly addressed whether, if the respondents had instructed BW to remain home, the shorter route to the hospital would have had any effect on his care and thus his likelihood of surviving. But, having determined that neither doctor breached the applicable standard of care, this was not an issue the trial judge needed to address. It was not relevant to liability.

The Court noted that it is trite law that a meaningful right of appeal “must not be an illusory right,” as it would be if the reasons provided by the judge for their decision were insufficient.

In Sheppard, Binnie J established that: “The trial judge’s duty is satisfied by reasons which are sufficient to serve the purpose for which the duty is imposed, i.e., a decision which, having regard to the particular circumstances of the case, is reasonably intelligible to the parties and provides the basis for meaningful appellate review of the correctness of the trial judge’s decision.”: para 55.

The onus was on the appellant to show an actual error or that the reasons frustrated appellate review: R v G.F. at para 79. The Supreme Court in G.F. “recently cautioned against appellate courts reviewing trial judge’s reasons with an overly critical eye, especially in cases turning on credibility assessments”: paras. 74-76. While an appeal court “must be rigorous in its assessment,” merely raising an ambiguity or an uncertainty in the reasons is insufficient to justify appellate intervention; “the appeal court must determine the extent and significance of the ambiguity”: G.F., at para. 79. To generalize this proposition, the flaw in the reasons must render doubtful both the trial judge’s chain of reasoning and the outcome of the case.

Where the reasons are deficient in explaining the result to the parties, and the appeal court does not consider itself able to do so, a new trial may be needed. This is a case-specific assessment. To order a new trial in a civil matter, the court must be satisfied that “the interests of justice plainly require that to be done”: Brochu at para 68. There must be a real prospect that a substantial wrong or miscarriage of justice has occurred: Courts of Justice Act, s. 134(6); Vokes Estate at para. 7; Iannarella at para. 23.

In the view of the Court, the appellants had not met their onus of showing that the trial judge made an actual error or that his reasons frustrated appellate review, for two reasons. First, the reasons in this case were not perfect, but they were adequate for appellate review, which the Court undertook in the preceding reasons. Second, the focus of the appellants’ complaint was on the trial judge’s speculation about whether an intervening event caused BW’s death. Once the trial judge determined that the doctors had not breached their respective standards of care, there was no act or omission on anyone’s part that could, in legal terms, have caused BW’s tragic death. That aspect of the trial judge’s reasons was not relevant to the outcome of the case. This asserted flaw in the trial judge’s reasons had not rendered doubtful his chain of reasoning or the outcome of the case.

Canadian National Railway Company v. Holmes, 2023 ONCA 800

[Benotto, Roberts and Copeland JJ.A.]

Counsel:

M. Munro, for the appellants

P. Griffin and B. Morrison, for the respondent

facts:

The appellants sought to appeal the May 7, 2021, dismissal of their motion to stay the action. The appellant, Ms. F, also appealed the March 17, 2022, judgment of conspiracy, joint and several liability, disgorgement of profits and the award of punitive damages made against her.

These appeals represented the culmination of the respondent’s 15-year odyssey to recover several million dollars taken by the appellants as a result of their deceitful scheme. The trial judge found that Mr. H, a former supervisory employee of the respondent, breached his fiduciary duty to the respondent by hiring the corporate appellants, his own companies, and causing the respondent to approve his corporations’ invoices. He also found that Mr. H’s common law wife, Ms. F, was deeply involved in the management of the corporations, knew or ought to have known she was assisting him with this deceitful scheme perpetrated through the corporations and benefitted from the improperly obtained profits.

The trial judge ordered a constructive trust over all their assets, including those in the living trusts, and a tracing order, so that the respondent could enforce its judgment and hold the appellants accountable.

issues:

Did the trial judge err in dismissing the motion to stay?
Did the trial judge err in the judgment of conspiracy, joint and several liability, disgorgement of profits, and the award of punitive damages?

holding:

Appeal dismissed.

reasoning:

First, the appellants’ stay motion was not properly before the Court. The trial judge made a dispositive endorsement, giving “a very high level explanation of the result”, with more detailed reasons to follow. There was no further order taken out for the dismissal of the stay motion. The judgment disposing of the action did not contain any provision dismissing the stay motion or any reference to the May 27, 2021, dismissal of the stay motion. It is well-established that an appeal is from the order rather than the reasons for the order.

Second, Ms. F’s grounds of appeal amounted to an invitation for the Court to redo the trial judge’s findings. That is not the role of an appeal court. The trial judge made findings of fact that were firmly grounded in the evidence. He was the best placed to make these findings, having had the benefit of the entire factual record and the witnesses before him in a lengthy trial.

The trial judge made clear and unassailable findings that Ms. F participated in a conspiracy to assist Mr. H to breach his fiduciary duty to the respondent by deceitfully hiring and approving invoices from his own corporations. He also found that these actions resulted in the appellants benefiting from millions of dollars of ill-gotten profits. Absent error, which the Court did not see, the trial judge’s findings were owed considerable deference on appeal. There was no basis for appellate intervention.

The respondent was entitled to its costs from the appellants, on a joint and several basis, in the all-inclusive agreed upon amount of $40,000.

SHORT CIVIL DECISIONS

Fehr v. Gribilas, 2023 ONCA 791

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

Counsel:

C.G. Carter, for the appellants/respondents by way of cross appeal

E.A. Cherniak and S. Jones, for the respondent/appellant by way of cross appeal Burns Hubley LLP

M.R. Kestenberg and A. Hershtal, for the respondent/appellant by way of cross-appeal P.G.

J. Rosenstein, for the respondent J+W Foods Inc.

Keywords: Costs

Heliotrope Investment Corporation v. Beach, 2023 ONCA 794

[Doherty, Pepall and Zarnett JJ.A.]

Counsel:

J.G. B. and M. L. B., acting in person

P. Ostroff, D. Sayer and A. Stikuts, for the applicant (respondent)

Keywords: Costs

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 (November 20– November 24)

By John Polyzogopoulos on November 25, 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 November 20, 2023.

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Brian Huber Holdings Ltd. v. West Perth (Regional Municipality) was a dispute over whether a 50-year old cost sharing agreement was triggered, which would require significant payments by the municipality to the original developer, when a new development was proposed adjacent to the one built 50 years ago. The issue was whether the new development would benefit from the servicing installed by the original developer 50 years ago. The Court agreed with the court below that the cost sharing was not triggered, and dismissed the appeal.

In Benzacar v. Terk, the Court detailed the process for garnishing wages and making a garnishee liable for a portion of the judgment for failing to properly respond to a garnishment.

In SIR Corp v Aviva Insurance Company of Canada, SIR, which owns numerous Jack Astors restaurants, was denied business interruption coverage under its insurance policy for losses incurred due to COVID-19 pandemic restrictions that closed restaurants. The Court upheld the application judge’s dismissal of the coverage claim, noting that the policy did not cover losses unless access to premises was impaired due to a ‘peril insured or threat thereof’, and COVID-19 was not deemed a ‘catastrophe’ within the meaning of the policy. The Court also denied the insured leave to appeal the $100,000 costs award..

In Wasylyk v. Simcoe (County), the County of Simcoe was held 100% liable at trial for a catastrophic car accident due to the failure to adequately clear ice and snow from the road. The Court dismissed the appeal.

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

Brian Huber Holdings Ltd. v. West Perth (Regional Municipality), 2023 ONCA 775

Keywords: Contracts, Interpretation, Real Property, Land Development, Subdivision Agreements, Cost-Sharing Agreements, Rules of Civil Procedure, r 14.05, Prism Resources Inc. v. Detour Gold Corporation, 2022 ONCA 326, Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711

Benzacar v. Terk , 2023 ONCA 773

Keywords: Civil Procedure, Orders, Enforcement, Garnishments, Wages Act, R.S.O. 1990, c. W.1, s. 7, Rules of Civil Procedure, r. 60.08, Entes Industrial Plants Construction & Erection Contracting Co. Inc. v. Centerra Gold Inc., 2023 ONCA 294, Turchiaro v. Liorti, [2004] O.J. No., aff’d [2006] O.J. No.1113 (C.A.), Century Services Inc. v. Canada (Attorney General), 2010 SCC 60

SIR Corp. v. Aviva Insurance Company of Canada, 2023 ONCA 778

Keywords: Contracts, Insurance, Coverage, COVID-19, Estoppel by Representation, Civil Procedure, Costs, Insurance Act, R.S.O. 1990, c. I.8, s. 124(1), Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9, Rules of Civil Procedure, r. 54, Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53, Ledcor Construction Ltd v Northbridge Indemnity Insurance Co, 2016 SCC 37, Jesuit Fathers of Upper Canada v Guardian Insurance Co of Canada, 2006 SCC 21, Sky Clean Energy Ltd (Sky Solar (Canada) Ltd) v Economical Mutual Insurance Company, 2020 ONCA 558, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Sabean v Portage La Prairie Mutual Insurance Co, 2017 SCC 7, Carter v Intact Insurance Company, 2016 ONCA 917, MDS Inc v Factory Mutual Insurance Company, 2021 ONCA 594, Pilot Insurance Company v Sutherland, 2007 ONCA 492, Lloyds Syndicate 1221 (Millennium Syndicate) v Coventree Inc, 2012 ONCA 341, Sagl v Chubb Insurance Company of Canada, 2009 ONCA 388, Canadian National Railway Co v Royal and Sun Alliance Insurance Co of Canada, 2008 SCC 66, Le Treport Wedding & Convention Centre Ltd v Co-operators General Insurance Company, 2020 ONCA 487, EPCOR Electricity Distribution Ontario Inc v Municipal Electric Association Reciprocal Insurance Exchange, 2022 ONCA 514, Cabell v The Personal Insurance Company, 2011 ONCA 105, LCA Marrickville Pty Limited v Swiss Re International SE, [2022] FCAFC 17, Star Entertainment Group Limited v Chubb Insurance Australia Ltd, [2022] FCAFC 16, Tomko v Wawanesa Mutual Insurance Co et al, 2007 MBCA 8, National Bank of Greece (Canada) v Katsikonouris, [1990] 2 S.C.R. 1029, Stag Line, Limited v Foscolo, Mango & Co, Ltd, [1932] AC 328 (UK HL), Sher-Bett Construction (Manitoba) Inc v The Co-operators General Insurance Company, 2021 MBCA 10, Ontario v St. Paul Fire and Marine Insurance Company, 2021 ONSC 7786, Ryan v Moore, 2005 SCC 38, Fram Elgin Mills 90 Inc v Romandale Farms Limited, 2021 ONCA 201

Wasylyk v. Simcoe (County), 2023 ONCA 781

Keywords: Torts, Negligence, MVA, Rebuttable Presumption, Causation, Defences, Contributory Negligence, Municipal Act, 2001, S.O. c. 25, Fordham v. Dutton-Dunwich (Municipality), 2014 ONCA 891, Housen v. Nikolaisen, [2002] SCC 35, L. (H.) v. Canada (AG), [2005] SCC, Farej v. Fellows, [2022] ONCA 254, R. v. Sheppard, [2002] SCC 26, R. v. G.F., [2021] SCC 20, Lloyd v. Bush, 2017 ONCA 252, Kamin v. Kawartha Dairy Ltd. (2006), 79 O.R. (3d) 284 (C.A.), Giuliani v. Halton (Regional Municipality), 2011 ONCA 812, El Dali v. Panjalingam, 2013 ONCA 24, Giuliani v. Halton (Regional Municipality), 2010 ONSC 4630, Greer (Litigation Guardian of) v. Kurtz, [2008] O.J. No. 2185 (SCJ), Belanger v. Sudbury (Regional Municipality), 2017 ONCA 428

Short Civil Decisions

Voreon Inc. v. Matas Management Services Inc., 2023 ONCA 779

Keywords: Costs

Bell v. Long, 2023 ONCA 785

Keywords: Costs

Chippewas of Nawash Unceded First Nation v. Canada, 2023 ONCA 787

Keywords: Aboriginal Law, Costs, Le Treport Wedding & Convention Centre Ltd. v Co-operators General Insurance Company, 2020 ONCA 556, William v British Columbia, 2013 BCCA 1

CIVIL DECISIONS

Brian Huber Holdings Ltd. v. West Perth (Regional Municipality), 2023 ONCA 775

[Trotter, Sossin and Monahan JJ.A.]

Counsel:

J. Damstra, for the appellant

S.J. O’Melia, for the respondent

facts:

This appeal arose from the interpretation of a cost-sharing provision in a Subdivision Agreement (the “Agreement”) that was entered into almost 50 years ago.

Arris Land Development Corporation (“Arris”) entered into the Agreement with the Township of Mitchell. In 1982, Arris sold its assets and assigned its rights and obligations under the subdivision to the appellant, Brian Huber Holdings Ltd. (“Huber”), while the Township of Mitchell, along with the Townships of Logan, Hibbert, and Fullarton, were amalgamated into the Corporation of the Municipality of West Perth (“West Perth”).

At the heart of this dispute was a provision entitled “Cost Sharing,” found in Schedule B to the Agreement. The effect of the provision is that West Perth is responsible for collecting monies from purchasers if and when the lands adjacent to the subdivision are developed, and then paying them to Huber (less a collection fee). The clear intention of this arrangement was to compensate Huber for the upfront costs expended in building the infrastructure that will benefit abutting lands. The amount of these payments is determined on the basis of the proportions set out in a table, plus interest. Because interest is calculated on a compounded basis from the date of the Agreement, the amounts are significant.

The issue arose when West Perth refused to comply with this provision, arguing it was not legally enforceable and later stating no benefit was derived from Huber’s improvements in a new adjacent subdivision. Huber brought an application under Rule 14.05 of the Rules of Civil Procedure seeking various declarations and damages.

The application judge found that West Perth only had to seek reimbursement from a developer or builder on the lands adjacent to the subdivision if the developer or builder derived a benefit from the improvements installed by Huber. That obligation was not triggered by the proposed subdivision because there was no benefit to be derived. Accordingly, West Perth did not breach the Agreement.

issues:

Did the application judge err by not constructing the cost-sharing provision as a whole?
Did the application judge err in his assessment of the commercial efficacy of his interpretation of the provision?
Did the application judge err by implying a term when it was unnecessary to do so?
Did the application judge err in concluding that there was no evidence that the builders of the new subdivision would benefit from the services installed as part of Arthur Street?

holding:

Appeal dismissed.

reasoning:

The application judge identified the applicable principles of contractual interpretation. In applying these principles, he considered the Agreement as a whole. The Court disagreed with the appellant’s submission that, in his interpretation of the cost-sharing provision, the application judge failed to consider the table to which it referred. The table details the proportionate contributions of Huber and whoever acquires and builds on the adjacent lands. However, the actual proportions were not in issue on the application; instead, the question was whether the cost-sharing provision was triggered in the first place. The table provided no assistance on this issue.

Another strand of this same submission was that the application judge failed to give effect to the following clause: “Upon the application of the relevant owner for a sub-divider’s agreement or if none, for a building permit, the Town shall collect from such owner the share charged against him for the construction of the aforementioned services”. The appellant submitted that West Perth’s obligations would be triggered upon the issuance of a building permit, even if the structure to be built did not require connection to the Arthur Street road or sanitary/storm sewers.

The Court agreed that the application judge did not specifically analyze the words of the provision in his written reasons. However, the scenario posed by the appellant was not helpful to its cause. The Court noted that it was inconceivable that, at the time of the Agreement, the parties would have contemplated West Perth extracting payment under the Agreement from a farming family who builds a structure upon their lands, one that does not require any of the Arthur Street servicing. Any other interpretation would be unreasonable.

The appellant submitted that the application judge erred in his conclusion that Huber’s interpretation of the Agreement was “divorced from commercial sense” and that it made “no sense in the context of the purpose of the agreement and does not make good business sense”. The appellant submitted that the application judge erred in making this assessment from a subjective perspective, rather than looking at the matter objectively. The Court disagreed, finding that the application judge’s analysis was sound and fair, and construed the Agreement in a reasonable manner.

The Court held that the appellant was correct that, in the course of his reasons, the application judge referred to the fact that the newly proposed development would not need to connect to the Arthur Street “water lines”. This service was beyond the scope of the Agreement between Huber and West Perth. It was the subject of an agreement with a public utility. In the Court’s view, this reference was minor and did not detract from the application judge’s firm grasp of the focus and operation of the Agreement.

The appellant submitted that the application judge erred in concluding that there was no evidence that the lands adjacent to the subdivision gained any benefit from the services that were part of Arthur Street. In the Court’s view, there was an evidentiary basis in the record to ground the application judge’s conclusion on this issue. A sworn affidavit was introduced, which placed the issue squarely in play. It was open to the appellant to adduce evidence on this issue, or to request an adjournment of the application to seek a different opinion. Similarly, it could have applied to adduce fresh evidence on appeal. However, none of these options were pursued. In conclusion, the obligations of West Perth under the cost-sharing provision of the Agreement were not triggered in this case. The application judge made no error in so finding.

Benzacar v. Terk, 2023 ONCA 773

[Lauwers, Zarnett and Thorburn JJ.A.]

Counsel:

C. MacLeod and N. J. Kasozi, for the appellant

C. A.L. Caruana, for the respondents 6990371 Canada Inc., 6044402 NB Ltd., and 4106971 Canada Inc.

I.T. , acting in person

facts:

The appellant, AB, and the respondent, IT, are former spouses. For many years AB had been attempting to collect amounts IT was ordered to pay to her under a 2011 Quebec Superior Court judgment and a 2017 Ontario Superior Court order.

AB attempted to collect the debt owing by way of garnishment pursuant to r. 60.08 of the Rules of Civil Procedure. AB sought to garnish debts owing to IT by the respondents 604402 NB Ltd. (“604”) and 4106971 Canada Inc. (“410”). IT is a salaried employee of 604 and, through a corporation that was found by the motion judge to be his alter ego, is a recipient of management fees it pays.

Under r. 60.08 a creditor who holds an order for the payment of money may enforce it by garnishment of debts payable to the debtor, that is, IT, by other persons (“garnishees” − 604 and 410). A garnishee who wishes to dispute the garnishment in whole or in part must serve a garnishee’s statement in a prescribed form within 10 days after service of the notice of garnishment. The form requires the garnishee to acknowledge what debts are or will be owing, or to explain why there are and will be none.

After being served with notices of garnishment in 2017, both 604 and 410 filed garnishee statements, prepared and signed on their behalf by IT. The garnishee statements did not acknowledge that there were or would be any debts owing by either company to IT. Only the part of each form applicable to a garnishee who does and will not owe any money to the debtor was filled out. However, between 2019 and 2021, 604 did pay certain amounts to the sheriff, representing 20% of the amounts it actually paid as salary in those years to IT.

On a motion by AB contending that the response of the garnishees was inadequate, the motion judge granted certain relief. AB appealed, arguing that the relief granted did not go far enough.

issues:

Did the motion judge err in failing to find that 604 filed a false garnishee statement and that as a consequence, 604 was liable for the entire judgment debt owed to her?
Did the motion judge err in failing to find that the CBTI payment was subject to the garnishment?
Should the salary for 2018 have been imputed to Mr. T, with 40% of it being garnished?

holding:

Appeal allowed.

reasoning:

Yes.

Subrule 60.08(17) speaks of a creditor’s entitlement to an order in the lesser of two specified amounts if a garnishee statement is not served and filed. The first inquiry is whether a garnishee’s statement has been served and filed. This includes determining whether a statement that was served and filed is, by reason of material misrepresentations or omissions, in effect no statement at all, a question of mixed fact and law. If no statement has been served and filed, the court’s second task is to determine the amount payable by the garnishee to the debtor, another question of mixed fact and law. The court’s third task is, as a matter of law, to give effect to the creditor’s entitlement to an order in the lesser of the amount payable by the garnishee to the debtor or the amount in the notice. The usual appellate standards of review to each of these inquiries should apply. The court is not granted a discretion to do other than as the subrule dictates.

The proposition that if a garnishee statement proves to be false, the court may treat the garnishee as though it has not filed the required statement at all in Turchiaro is subject to two caveats. First, the statement must be materially false. Second, there must be no reasonable justification for the statement’s incorrect content. A garnishee must file a garnishee statement if it wishes to contest the garnishment, in whole or in part: r. 60.08(15).

The statement must acknowledge what is or will be owing or declare that nothing is or will be, with an explanation. An acknowledgment that there is a debt owing by the garnishee to the debtor triggers an obligation on the garnishee to make a payment to the sheriff: r. 60.08(14). A proper denial of any debt, with a proper explanation, provides the creditor with information so that it may consider what other steps might be taken. A garnishee statement that falsely claims no debt is or will be owing when one is or will be, or that provides misleading or incomplete information in support of a false assertion of no indebtedness, is the antithesis of what is required of a garnishee statement.

Whether a garnishee statement is materially false without reasonable justification must be judged by assessing it as a whole, taking into account what it says and what it omits to say on the subjects the statement is required to address.

The motion judge failed to assess 604’s statement against the facts that she had found and in light of the clear message it conveyed as a whole. The 604 statement left the first required paragraph totally blank. That paragraph must be filled in when the garnishee has or will owe money to the debtor. The 604 statement did fill in the second paragraph. That paragraph is only applicable when there is or will be no money owing by the garnishee. The clear import of the statement is that there were and would be no debts owing by 604 to IT. 604 was indebted to IT at the time of the garnishee statement, and the first paragraph should have been filled in and so indicated.

Moreover, the required form for a garnishee statement required disclosure not only of what is owed but of what the garnishee will owe because of arrangements existing when the garnishment notice is served. The salary and management fee arrangements existing at the time the garnishment notice was served would result in debts of 604 to IT that would fall due in the period following the service of the garnishment notice. 604’s statement failed to make this necessary disclosure.

604’s garnishee statement was materially false. No reasonable justification for the inaccurate statement was suggested. Neither 604’s payment to the sheriff of a portion of the salary payments it actually made to IT after the notice of garnishment was served, nor the motion judge’s order requiring payment to the sheriff in respect of payments by 604 to Ego Capital, cured the falsity of the statement itself.

The motion judge erred in refusing to make an order under r. 60.08(17). The garnishee statement should have been treated as no statement at all. Pursuant to the rule, AB was entitled to an order for payment by 604 of the amount in the notice of garnishment served on 604 ($256,143.49), unless the amount payable by 604 to IT was less than that amount. The phrase “amount … payable to the debtor by the garnishee” in r. 60.08(17) would appear to refer to the amount payable at the time the court makes (or should have made) a finding, which would be the date of the motion judge’s decision. The motion judge did not make a specific finding of what amount was payable to the debtor, IT, by the garnishee, 604.

What was payable by 604 to IT exceeded what was paid and exceeded the amount in the notice of garnishment. The motion judge found that the salary arrangements in place for IT prior to service of the notice of garnishment called for payments of $220,000 per year plus car allowance. IT’s legal entitlement to salary was, in the relevant time frame, always for these amounts, which clearly exceeds what he was paid.

2 and 3.

The Court held that it was unnecessary to address these issues due to the disposition of the first issue.

SIR Corp. v. Aviva Insurance Company of Canada, 2023 ONCA 778

[Hoy, Benotto and Favreau JJ.A.]

Counsel:

R. Barnable and M. Sharp, for the appellants

E. Snow and M. C. Mandelker, for the respondent

facts:

Facts:

The appellants, SIR Corp. and related entities (collectively “SIR”), owned and operated approximately 60 restaurants. During the COVID-19 pandemic, an emergency order under the Emergency Management and Civil Protection Act, and similar orders in other provinces of Canada and in the State of New York (collectively, the “Orders”) prevented SIR from offering in-person dining at its restaurants.

SIR applied for a declaration that it was entitled to coverage under an insurance policy, covering the period September 30, 2019 to September 30, 2020, issued by the respondent (the “Policy”), Aviva Insurance Company of Canada (“Aviva”), for damage to its food and beer stock and for business losses allegedly suffered as a result of the Orders. If successful, SIR sought an order directing a reference under r. 54 of the Rules of Civil Procedure, to determine the quantum of its losses.

The application judge determined that the Policy did not cover SIR’s losses and dismissed SIR’s application, awarding costs to Aviva. She also rejected SIR’s alternative argument that Aviva was estopped from denying coverage because it had covered a similar claim in January 2020 at a SIR restaurant in St. John’s, Newfoundland and Labrador, which occurred when a government-declared state of emergency was in effect. SIR appealed the dismissal of its application and sought leave to appeal the costs award.

issues:

Did the application judge err in determining that the Policy did not cover SIR’s losses?
Did the application judge err in rejecting SIR’s estoppel argument?
Did the application judge err in awarding costs to Aviva?

holding:

Appeal dismissed.

reasoning:

Contractual interpretation is a question of mixed fact and law subject to deferential review on appeal. The Court would not intervene unless the application judge made a palpable and overriding error in her interpretation of the Policy or an extricable error of law, in which case the standard of review was correctness.

The Court agreed with SIR that the application judge committed an extricable legal error by treating the Binder as forming part of the Policy. This error influenced her determination that the Orders were not a ‘peril insured’ under Clause 16 and subsequently impacted her interpretation of Clause 14.

Insurance policies form a special category of contracts and are subject to a unique three-step interpretative approach. The Court stated that it was crucial to examine the terms of the policy in light of the surrounding circumstances, as this formed an essential part of the interpretive process.

The Court determined that there was no coverage under Clause 16 for the losses SIR sustained during the period it was prevented from offering in-person dining unless access to its premises was impaired as a result of a ‘peril insured or threat thereof’. SIR’s interpretation that the Orders were a ‘peril insured’ was countered by Aviva’s view, which the Court agreed with, that ‘peril insured’ means “all risks of direct physical loss or damage, except as excluded.” Therefore, the Orders did not fit this definition, and as a result, coverage was not available under Clause 16.

The Court addressed the argument whether the COVID-19 pandemic was an “other catastrophe” within the meaning of Clause 14. The application judge had found that it was not an “other catastrophe” for the purposes of Clause 14. The Court agreed that, in the context of the policy, COVID-19 was not a “catastrophe”, because the policy’s foundation required a risk of direct physical loss or damage to property. Additionally, the Orders were not the direct cause of the damage sustained, thus Clause 14 did not provide coverage for SIR’s losses.

2. No.

On January 17, 2020, St. John’s, Newfoundland and Labrador, declared a state of emergency, due to hurricane-force winds and extreme snowfalls, and ordered all businesses to close. The state of emergency remained in effect for approximately nine days. SIR’s Jack Astor’s restaurant in St. John’s suffered some food spoilage and business losses, and SIR made a claim under Clause 15. Aviva paid SIR’s claim. SIR argued that Aviva was estopped from now denying coverage, given that it had paid the St. John’s claim. The application judge was not satisfied that SIR made out its claim for estoppel by representation. The Court found it was clear from the application judge’s reasons that she was not satisfied that Aviva impliedly represented that it would cover SIR for food spoilage and business losses any time closure of its business was mandated by an order of a civil authority concerned about public safety. The Court concluded that the estoppel argument failed.

3. No.

Before the application was heard, SIR and Aviva agreed that costs of the application would be $100,000, all inclusive. The application judge rejected SIR’s argument that the costs agreement should not be enforced and awarded Aviva costs in the all-inclusive amount of $100,000, as stipulated in the costs agreement, as well as full indemnity costs for the preparation of Aviva’s costs submissions in the all-inclusive amount of $8,136. A judge’s discretion in determining the entitlement, scale, and quantum of a costs order was entitled to considerable deference. Leave to appeal a costs decision was granted sparingly. The application judge did not err in exercising her discretion to award costs in accordance with the costs agreement. Leave to appeal the costs award was not warranted.

Wasylyk v. Simcoe (County), 2023 ONCA 781

[Doherty, Nordheimer and George JJ.A.]

Counsel:

A. A. Evangelista and Avi Cole, for the appellants

J. T. Curry and D. Knoke, for the respondents

facts:

The respondent was driving her vehicle toward Bradford, Ontario when she collided with a vehicle being driven westbound. The respondent claimed that the County of Simcoe (“Simcoe”) was liable for her damages under s. 44 of the Municipal Act, 2001 (the “Act”). She claimed that Simcoe had failed to keep the relevant portion of the road, CR 88, in a reasonable state of repair by failing to take reasonable steps to remove the ice and snow accumulated on the roadway. This caused her to lose control of her vehicle and spin into the oncoming lane where she collided with the westbound vehicle.

The trial judge found Simcoe 100 percent liable. The trial judge concluded that the statutory defence in s. 44(3)(c) was not available. Simcoe could not establish that it had treated the hazardous conditions at the relevant part of CR 88 within three hours of learning of those conditions.

The trial judge accepted that, as the respondent was on the wrong side of the road when the accident occurred, there was a rebuttable presumption she was negligent. In her view, there was no evidence that the respondent was distracted when she lost control of her vehicle and no evidence that her all season tires caused or contributed to the accident.

issues:

Did the trial judge fail to apply the proper legal test in determining whether the relevant part of CR 88 was in a state of non-repair at the relevant time?
Did the trial judge fail to give adequate reasons for her causation finding?
Did the trial judge misapprehend the evidence from the respondent’s expert?
Did the trial judge err in finding that the respondent was not contributorily negligent?

holding:

Appeal dismissed.

reasoning:

Simcoe’s submission does not actually take issue with the legal test to be applied in determining whether a road was in a state of disrepair. Instead, Simcoe attacked the trial judge’s factual finding that the respondent lost control of her vehicle on account of the condition of the road. Simcoe submitted that, in the face of the evidence that the respondent lost control twice in less than 10 seconds, and in the absence of evidence that anyone else lost control, the finding that the respondent lost control because of the road condition was an unreasonable finding of fact. This submission raised a question of fact and was subject to the palpable and overriding standard of review.

The Court held that there was ample evidence, all reviewed by the trial judge in her reasons, from emergency responders, other drivers using the road, and Simcoe employees, that the relevant part of CR 88 was slippery and icy.

The Court noted that it did not follow, from the absence of evidence that other drivers had difficulty maintaining control of their vehicle on the relevant part of CR 88, that in fact other drivers did not have difficulty maintaining control of their vehicles on that part of the road. Furthermore, evidence that another driver or drivers were able to safely manoeuvre along the roadway was, at best, a piece of the evidentiary picture to be considered with the rest of the evidence relevant to the condition of the roadway. The totality of the evidence in this case would not have justified a finding of fact that no other driver had difficulty maintaining control of their vehicle on the relevant part of CR 88.

The respondent had to establish that “but for” the “defects” in the repair of the road, in this case the icy and snowy conditions of the roadway, the respondent would not have lost control and collided with the vehicle. To meet that burden, the respondent was not obliged to point to the specific ice patch or accumulation of snow on the road that caused the respondent’s vehicle to lose control. The respondent was, however, required to prove that the hazardous conditions brought about by the ice and snow on the road caused the accident.

The trial judge turned to causation after a detailed review of the evidence and a finding that at the scene of the accident the conditions of CR 88 were slippery and hazardous. In addition to the trial judge’s factual findings about the condition of the roadway and the connection between that condition and the respondent’s loss of control of her vehicle, the trial judge made a series of other factual findings relevant to the respondent’s manner of driving. She concluded that the respondent was travelling well under the speed limit, was not impaired, and was not distracted in any way. She was also travelling on a straight section of the roadway. The findings of fact made by the trial judge reasonably led to the inference that the hazardous conditions of the CR 88 caused the respondent to lose control of her vehicle.

The Court held that there was no inconsistency between the trial judge’s finding that the accident was caused by the slippery and hazardous conditions on the road, and the finding that the respondent lost control of her vehicle twice in less than 10 seconds. The loss of control twice in a short timespan could reasonably be viewed as evidence of just how slippery and hazardous the road was at the relevant time and place. Trial judges are not required to expressly refer to all of the evidence advanced for or against a finding of fact.

The Court held that the trial judge’s failure to specifically allude to the evidence that the respondent lost control of her vehicle twice in less than 10 seconds did not inhibit meaningful appellate review of the causation finding.

A trial, the respondent’s expert, in his reports and in his evidence, referred to two explanations for the icy and hazardous conditions of CR 88. According to one explanation, the slippery and icy conditions developed because the salt placed on the roadway by Simcoe acted as a “magnet” attracting blowing snow. That snow melted upon contact with the salt, but later refroze on the roadway as the temperature dropped. The second explanation offered was based on the heavy traffic along CR 88. The expert opined that the heat generated by the tires of the vehicles would melt the snow which had blown on the road. The melted snow would then refreeze, creating ice when the temperatures dropped as the day went on. This explanation was put forward by the expert at trial and appears to have developed, at least in part, because the expert saw no evidence of salt or sand on the relevant part of CR 88 in the photographs provided to him. Simcoe contended that, at trial, the expert effectively abandoned the first of the two explanations set out above and that the trial judge misapprehended his evidence and relied on the abandoned explanation in her reasons.

The Court held that the two explanations for the icing of the road were not mutually exclusive, or even inconsistent with each other. The respondent was obligated to prove that the icy and snowy conditions rendered the road in a state of disrepair for the purposes of the Act. It was not necessary in establishing that the road was in a state of disrepair to demonstrate how the road became icy.

In finding that Simcoe did not take reasonable steps to address the hazardous conditions on CR 88, the trial judge focused on Simcoe’s failure to perform the necessary ongoing active maintenance called for by Simcoe’s own procedures. Neither the trial judge’s finding that CR 88 was in a state of disrepair, nor her finding that Simcoe did not take reasonable steps to prevent that default, turned on a determination of the exact physical cause of the icy conditions. Even if the trial judge’s reasons confused, to some extent, the contents of the expert’s pretrial report, and his testimony, that confusion was not material to either of the essential factual findings to which the expert’s testimony was relevant.

The appellant submitted that as the respondent was on the wrong side of the road when the collision occurred, she had the onus to demonstrate she was not negligent.

Simcoe’s argument on the contributory negligence claim came down to two submissions. First, Simcoe submitted that the trial judge failed to consider the evidence that the respondent took no steps to adjust her driving after the first loss of control. Simcoe submitted that this evidence was crucial to Simcoe’s argument on the contributory negligence issue and the trial judge’s failure to consider the evidence amounts to a palpable and overriding error. Second, Simcoe submitted that on a totality of the material evidence, including the respondent’s failure to adjust her driving after the first loss of control, and bearing in mind the presumption operating against the respondent, the finding that the respondent was not contributorily negligent was an unreasonable finding, constituting a palpable and overriding error.

The Court held that findings of negligence or contributory negligence turned on the evidence of the particular case and the assessment of that evidence by the trier of fact who heard the evidence. Factual findings made by other trial judges in other cases may assist a trial judge in her evaluation of similar evidence that has been placed before her. The extent to which the prior findings by other judges may assist a subsequent trial judge, is entirely for that judge to determine.

The evidence relevant to the respondent’s manner of driving immediately before the accident came from DS, who was driving in front of the respondent and watching the respondent’s vehicle through the rear-view mirror. The trial judge also expressed significant concerns about the credibility and reliability of other parts of DS’s evidence. Her testimony provided little assistance on either the time the respondent had to react after the first loss of control, or what steps, if any, the respondent took in response to the first loss of control. The Court held that it was not unreasonable for the trial judge to decline to draw inference about the respondent’s driving from DS’s evidence and found no error in the trial judge’s conclusion that the respondent was not contributorily negligent in the accident.

SHORT CIVIL DECISIONS

Voreon Inc. v. Matas Management Services Inc., 2023 ONCA 779

[Roberts, Favreau and Copeland JJ.A.]

Counsel:

B. van Niejenhuis, R. Atkins, and S. Ahmad, for the appellant

R. Allan, for the respondents

Keywords: Costs

Bell v. Long, 2023 ONCA 785

[Lauwers, Zarnett and Thorburn JJ.A.]

Counsel:

M.B. , acting in person

J. E. Sirdevan, for the respondent

Keywords: Costs

Chippewas of Nawash Unceded First Nation v. Canada, 2023 ONCA 787

[Lauwers, Pardu and George JJ.A.]

Counsel:

R. Townshend, C. Guirguis, R. Pelletier, J. McNamara, K. Nerland and B. Brookwell, for the appellants (C69830) and the appellants/ respondents by way of cross-appeal (C69831), Chippewas of Nawash Unceded First Nation and Saugeen First Nation

M. Beggs, M. McCulloch, B. Ennis, C. Tsang and S. Voleti, for the respondent (C69830 & C69831), the Attorney General of Canada

D. J. Feliciant, R. Ogden, J. McRandall and J. Lepan, for the respondent (C69830) and the respondent/appellant by way of cross-appeal (C69831), His Majesty the King in Right of Ontario

M. J. Dougherty and D. McKenna, for the respondent/appellant by way of cross-appeal (C69831), the Corporation of the Township of Georgian Bluffs

G. F. Stewart, for the respondents/appellants by way of cross-appeal (C69831), the Corporation of the Municipality of Northern Bruce Peninsula and the Corporation of the Town of South Bruce Peninsula

M. Jackson, T. Williams-Davidson, E. Bulbrook and N. Baker-Grenier for the intervener the Council of the Haida Nation (C69830)

R. Tillman and R. Ariss, for the intervener Heiltsuk Nation (C69830)

K. Rose, for the intervener Songhees Nation and Esquimalt Nation (C69830)

T. Slade and C. Giordano, for the intervener Walpole Island First Nation (C69830)

Keywords: Aboriginal Law, Costs, Le Treport Wedding & Convention Centre Ltd. v Co-operators General Insurance Company, 2020 ONCA 556, William v British Columbia, 2013 BCCA 1

COURT OF APPEAL SUMMARIES (November 13 – November 17)

By John Polyzogopoulos on November 19, 2023

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 November 13, 2023.

Continue Reading

In D’Silva v Algrnati, the appellant vendors who refused to close on the sale of land argued that the Agreement of Purchase and Sale became null and void due to non-compliance with severance conditions and Planning Act requirements. The Court dismissed the appeal, noting that non-compliance was as a result of the appellants’ own default.

In Ontario Securities Commission v. Bridging Finance Inc, the motion judge made a finding that certain classes of owners of units in a publicly traded limited partnership that was put into receivership by the Ontario Securities Commission had priority over other unit holders as a result of s. 130.1 of the Ontario Securities Act. The Court found that the Securities Act did not contain any priority rules between claimants and allowed one of the appeals.

In Brown v. Williams, which was too short to summarize, the Court allowed the appeal and restored a defence that had been struck after moving counsel was less than candid with the court.

Other topics covered in short decisions this week included security for costs, default judgment and an estates matter.

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

D’Silva v. Algranti, 2023 ONCA 758

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Remedy, Anticipatory Breach, Remedies, Specific Performance, Civil Procedure, Summary Judgment, Planning Act, RSO 1990, c P 13, ss 50(21), Morgan Trust Company of Canada v Falloncrest Financial Corporation, 2006 CanLII 38728 (C.A.)

Ontario Securities Commission v. Bridging Finance Inc., 2023 ONCA 769

Keywords: Contracts, Interpretation, Remedies, Rescission, Securities Law, Enforcement, Bankruptcy and Insolvency, Receiverships, Priority of Claims, Pari Passu, Appeals, Standard of Review, Ontario Securities Act, RSO 1990, c S 5, ss 129. 130.1, Limited Partnerships Act, RSO 1990, c L16, s 24, Bankruptcy and Insolvency Act, RSC, 1985, c B-3, ss 14.06(7)(b) 67(3), Companies’ Creditors Arrangement Act, RSC, 1985, c C-36, ss 11.8(8)(b), 18.3(2), Residential Tenancies Act, 2006, SO 2006, c 17, Ontario Business Corporations Act, RSO 1990, c. B.16, ss 221(1), 222, Personal Property Security Act, RSO 1990, c P 10, ss 30-35, Wages Act, RSO 1990, c W 1, Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, MacDonald v. Chicago Title Insurance Co. of Canada, 2015 ONCA 842, Ledcor Construction Ltd. v Northbridge Indemnity Insurance Co., 2016 SCC 37, Mikelsteins v. Morrison Hershfield Limited, 2019 ONCA 515, Harvey v. Talon International Inc., 2017 ONCA 267, Oakville (Town) v Clublink Corporation ULC, 2019 ONCA 826, Ventas, Inc. v Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, Century Services Inc. v. Canada (Attorney General), 2010 SCC 60, Hamilton (City) v. The Equitable Trust Company, 2013 ONCA 143

Short Civil Decisions

Brown v. Williams, 2023 ONCA 777

Keywords: Civil Procedure, Striking Pleadings, Adjournments, Professional Responsibility, Lawyers, Duty of Candour to the Court, Bell ExpressVu Limited Partnership v. Torroni, 2009 ONCA 85

Doherty v. Doherty, ONCA 763

Keywords: Wills and Estates, Civil Procedure, Applications

Gill v. MacIver, 2023 ONCA 776

Keywords: Civil Procedure, Appeals, Security for Costs, Frivolous and Vexatious, Rules of Civil Procedure, r. 61, Lavallee v. Isak, 2022 ONCA 290, Pickard v. London Police Services Board, 2010 ONCA 643, Henderson v. Wright, 2016 ONCA 89, York University v. Markicevic, 2017 ONCA 651, Chemical Vapour Metal Refinishing v. Terekhov, 2016 ONSC 7080, Heidari v. Naghshbandi, 2020 ONCA 757

HSBC Bank Canada v. 1481396 Ontario Inc., 2023 ONCA 762

Keywords: Contracts, Interpretation, Contra Proferentem, Real Property, Mortgages, Civil Procedure, Default Judgment, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37

CIVIL DECISIONS

D’Silva v. Algranti, ONCA 758

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

Counsel:

J. Binavince, for the appellants

W. C. McDowell, A. Quinn and E. K. Gyan, for the respondents

facts:

In 2017 the appellants purchased two adjoining lots on Lake Muskoka for redevelopment. One lot had a cottage and a cabin, and the other was vacant. On September 16, 2020, the parties entered into an agreement of purchase and sale (“APS”) with respect to the lot containing the cottage, cabin, and a newly built dock and boathouse (the “Property”). The APS included paragraph 15, which was a condition for Planning Act compliance by the sellers and their covenant to proceed diligently and at their expense to obtain any necessary consent by completion.

In the months that followed, it was the common understanding of the parties and their lawyers that the required severance from the Town had been obtained, and that all that remained was the provision of the relevant property identification numbers (“PINs”). The parties agreed to several amendments to the APS. One amendment was to the completion date The parties agreed that the closing would take place “as soon as possible after the land registry office issues a PIN number and legal description” and the amendment stated that the respondents’ preferred date was November 6, 2020, and no later than December 15, 2020.
On October 10, the parties walked the Property together. The appellants confirmed that land severance was complete, and that they were only waiting for the PINs to be issued. On October 16, the appellants’ lawyer informed the respondents’ lawyer that her clients did not want to move forward with the sale. The respondents refused to terminate the APS.
On December 14, the respondents’ lawyer confirmed that his clients remained ready and willing to purchase the Property regardless of their stated preference for a closing of December 15.

The respondents commenced an action on January 15, 2021, claiming that the appellants breached the APS and sought specific performance. The respondents moved for summary judgment. The appellants’ position was that the APS had become null and void on November 5, 2020. The motion judge rejected this argument. She concluded that the September 24 email from the appellants’ lawyer contained a clear and unequivocal representation that everything had been completed.

The appellants argued in the alternative that the APS had come to an end on December 22. The motion judge rejected this argument. She referred to what had taken place in the days preceding December 22, concluding that the appellants were essentially relying on their own defaults to terminate the APS. The motion judge also rejected the appellants’ argument that the APS was void for uncertainty because the legal description of the Property did not provide any rights of way to access the road.

issues:

1. Did the motion judge err in rejecting the argument that the APS became null and void on November 5?
2. Did the motion judge err in concluding that the APS was not terminated on December 22, 2020?

holding:

Appeal dismissed.

reasoning:

1. No.

The appellants argued it was wrong for the motion judge to conclude that the September 24 email from their lawyer to the respondents’ lawyer constituted compliance with the severance condition or their waiver of the condition. The Court disagreed and found that the motion judge drew a reasonable inference from the references in the September 24 email from the appellants’ lawyer which asserted her understanding that severance had been obtained, and “was intended to provide assurance to the respondents that they could rely on, and have confidence in, her representation that everything was completed, and the condition regarding consent to severance was moot”. The motion judge reasonably concluded that the representation was intended to be relied on and was in fact relied on by the respondents.

2. No.

First, the Court disagreed with the contention that the motion judge erred in her interpretation of para. 15 of the APS, when she failed to hold that the APS was null and void when the Planning Act condition was not met on the completion date. The appellants only referred to the opening phrase of s. 50(21) of the Planning Act. Section 50(21) must be read in full: [A]n agreement, conveyance, mortgage or charge made, or a power of appointment granted, assigned or exercised in contravention of this section or a predecessor thereof does not create or convey any interest in land, but this section does not affect an agreement entered into subject to the express condition contained therein that such agreement is to be effective only if the provisions of this section are complied with. [Emphasis Added.]

The effect of para. 15, combined with para. 10 of the standard form APS, is that vendors are required to do what is required to obtain Planning Act approval. Section 50(21) remedies an agreement that would otherwise contravene the Planning Act where, as here, the agreement is subject to an express condition that it is to be effective only if the subdivision control provisions of the Planning Act are complied with.

Second, the motion judge did not err in holding that the appellants failed to act diligently to obtain the required consents, and therefore were in breach, and not permitted to rely on the finality clause to terminate the APS. This conclusion was grounded in the fact and expert evidence on the motion. The motion judge found that the appellants failed to take steps to rectify the Planning Act issues after December 21, 2020, although there were further steps available. Whether or not the appellants’ refusal to take steps post-closing could be considered a breach of their obligations under the APS, there was no evidence that they discharged their obligations before the extended closing date of December 22. Their refusal to take any further steps when it was brought to their lawyer’s attention that more was required to be done was reasonably considered by the motion judge to be inconsistent with their obligations under the APS.

Third, the motion judge did not err in finding the respondents waived their objection to title. The respondents’ waiver and the practical requirement for post closing co-operation must be considered in context. After the appellants’ lawyer communicated that they would take no further steps to address the conveyancing issues, the respondents’ lawyer indicated that his clients remained willing to close the transaction, and that they were prepared to rectify the conveyancing issues at their own cost. It was the appellants who had proceeded with the initial severance application and subsequent dealings with the Town. The appellants had a duty to rectify the issues and co-operate in the correction of the conveyances.

Ontario Securities Commission v. Bridging Finance Inc., 2023 ONCA 769

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

Counsel:

R. Staley and D. Fenton, for the appellant, General Unitholders (COA23-CV-0559), and the respondent, General Unitholders (COA-23-CV-0560 and COA-23-CV-0514)

G. H. Finlayson and M. G. Smith, for the respondent, Outside Quebec Misrepresentation Claimants (COA-23-CV-0559)

S. Rigaud, E. Bédard, E. St-Pierre and J. Bouzaglou, for the respondent, Quebec Misrepresentation Claimants (COA-23-CV-0559), and the appellant, Quebec Redemption Claimants (COA-23-CV-0560)

R. English and M. J. van Zandvoort, for the appellant, Outside Quebec Redemption Claimants (COA-23-CV-0514)

J. L. Finnigan, G. B. Moffat and A. Driedger, for the respondent, PricewaterhouseCoopers Inc. (COA-23-CV-0514 and COA-23-CV-0560)

Keywords: Contracts, Interpretation, Remedies, Rescission, Securities Law, Enforcement, Bankruptcy and Insolvency, Receiverships, Priority of Claims, Pari Passu, Appeals, Standard of Review, Ontario Securities Act, RSO 1990, c S 5, ss 129. 130.1, Limited Partnerships Act, RSO 1990, c L16, s 24, Bankruptcy and Insolvency Act, RSC, 1985, c B-3, ss 14.06(7)(b) 67(3), Companies’ Creditors Arrangement Act, RSC, 1985, c C-36, ss 11.8(8)(b), 18.3(2), Residential Tenancies Act, 2006, SO 2006, c 17, Ontario Business Corporations Act, RSO 1990, c. B.16, ss 221(1), 222, Personal Property Security Act, RSO 1990, c P 10, ss 30-35, Wages Act, RSO 1990, c W 1, Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, MacDonald v. Chicago Title Insurance Co. of Canada, 2015 ONCA 842, Ledcor Construction Ltd. v Northbridge Indemnity Insurance Co., 2016 SCC 37, Mikelsteins v. Morrison Hershfield Limited, 2019 ONCA 515, Harvey v. Talon International Inc., 2017 ONCA 267, Oakville (Town) v Clublink Corporation ULC, 2019 ONCA 826, Ventas, Inc. v Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, Century Services Inc. v. Canada (Attorney General), 2010 SCC 60, Hamilton (City) v. The Equitable Trust Company, 2013 ONCA 143

facts:

Bridging Finance Inc. (“Bridging”) is a privately held investment management firm which offered alternative investment options to retail and institutional investors through its investment vehicles (collectively, “Bridging Funds”). Bridging raised capital from investors through the sale of units (“Units”).

Serious issues arose regarding the operations of Bridging. On April 30, 2021, the Ontario Securities Commission (“OSC”) issued an application requesting an order pursuant to s. 129 of the Ontario Securities Act (“OSA”) to place the Bridging Funds into receivership. Bridging was ordered not to redeem existing Units in any of the Bridging Funds. In addition, on April 30, 2021, the OSC issued a temporary order (the “Temporary Order”) to cease trading the securities of most of the Bridging Funds.

The “General Unitholders” were those Unitholders that have not opted out of representation by the Representative Counsel for the General Unitholders, and are neither Statutory Rescission Claimants nor Redemption Claimants.

Following the appointment of the Receiver, certain Unitholders and their advisors informed the Receiver that they may wish to pursue and/or preserve certain rights of rescission or rights of action for damages that arose before the Appointment Order as a result of alleged misrepresentations contained in the offering memoranda. These investors (the “Statutory Rescission Claimants”) asserted that they should have a priority claim on the assets of the Bridging Funds.

Other Unitholders provided notice of their intention to redeem Units in the Bridging Funds prior to the Date of Appointment and the Temporary Order and had redemption dates on or before April 30, 2021. However, due to the Temporary Order and the Appointment Order, such redemptions were not completed (the “Redemption Claims”). Those investors (the “Redemption Claimants”) also submitted that they should have had a priority claim over the assets of the Bridging Funds.

The Receiver brought a motion seeking an order declaring that the Redemption Claims and the Statutory Rescission Claims had no priority over the claims of the General Unitholders (i.e., those investors who had not opted out) and an order that all Unitholders shall rank pari passu with respect to the distribution of the proceeds of the Bridging Funds.

The motion judge ordered that the Statutory Rescission Claims had priority over the General Unitholders’ Claims and that the Redemption Claims did not have priority over the General Unitholders’ Claims. He further ordered that the Redemption Claims and the General Unitholders’ Claims shall rank pari passu with respect to the distribution of the proceeds of the Bridging Funds.

issues:

1. What is the appropriate standard of review?
2. Did the motion judge err in finding that the Redemption Claims are not entitled to any priority over the General Unitholders’ Claims?
3. Did the motion judge err in finding that the Rescission Claims are entitled to priority over the General Unitholders’ Claims?
4. Should all Unitholders rank pari passu with respect to the distribution of proceeds of the Bridging Funds?

holding:

Appeal of the Redemption Claimants dismissed. Appeal of the General Unitholders allowed.

reasoning:

1. Correctness.

The standard of review of a decision interpreting a contract depends on the nature of the contract. The constating documents were contracts of adhesion and there was no relevant factual matrix that formed part of the contractual analysis. Further, the interpretation of the OSA, as a statute of general application, must be reviewed on a correctness standard.

2. No.

The Court found that the motion judge correctly determined that the claims had not crystallized as at the time of the Appointment Order and that they were still subject to Bridging’s discretion to refuse to honour or postpone the redemption requests.

The Redemption Claimants’ core argument was that the constating documents created an enforceable liability pursuant to which they are required to be paid within 30 days of the applicable Valuation Date. The motion judge concluded that the “fatal problem with this argument is that the redemption requests of these Redemption Claimants had not been completed.” He reasoned that the Unitholders who provided a notice to redeem but whose payments had not been issued by Bridging at the time of the Appointment Order had incomplete redemption requests because they were not priced, contracted, or paid out. In addition, the motion judge found that the redemption was subject to Bridging’s overall discretion to refuse or postpone a redemption request.

The Redemption Claimants made two primary arguments: 1) they argued that the motion judge did not take into consideration the clear language of all the redemption provisions, including the language that provides that a redemption request becomes an enforceable liability on the Redemption Date. 2) they argued that the motion judge erred in considering post-contractual internal practices of the Fund Administrator as evidence supporting his derogation from the parties’ constating documents.

The Court rejected these arguments, noting that contracts are to be interpreted as a whole, in a manner that gives meaning to all of their terms and avoids an interpretation that would render one or more of the terms ineffective. They are also to be interpreted in a fashion that accords with sound commercial principles and good business sense, and that avoids a commercial absurdity.

3. Yes.

The motion judge found that the Statutory Rescission Claims were entitled to priority over the General Unitholders’ Claims and that the remedy for these claimants must be meaningful, Accordingly, he imposed a constructive trust. The Court disagreed with how the motion judge arrived at this conclusion. It appeared that there were two possible sources for the priority granted by the motion judge to the Statutory Rescission Claims: (a) the wording of s. 130.1 of the OSA, and (b) the nature of the rescission remedy.

(a) Section 130.1 of the OSA

The motion judge grounded his reasoning regarding the remedy by relying on s. 130.1 of the OSA. The Court noted that priority cannot be grounded in the OSA, as there is nothing in the language of the statute that suggests that the legislature intended to grant a priority. When legislatures grant priorities, they do so in clear and unambiguous terms. The ordinary meaning of a legislative provision is deemed to be the meaning intended by the legislature, unless compelling reasons exist to justify a departure from the ordinary meaning. The Court noted that courts have held that the absence of express statutory language was fatal to claims for statutory priority.

The Court noted that the whole point of creating statutory priorities was to alert the world regarding the distribution scheme for a given fund. The idea was to create certainty so that claimants understand where they stand relative to other claimants. A clear priority scheme also made it easier for courts to adjudicate competing claims. They were not required to examine the equities of the positions of the parties but are only obliged to implement the existing rules. The important public policy objectives of certainty, transparency, and efficiency underlying statutory priorities would be eroded if courts presumed an intention of a legislature to create a priority. The Court declined to presume a priority in this case.

(b) The Nature of the Rescission Remedy

The argument advanced by the Statutory Rescission Claimants was that rescission was a proprietary remedy, which puts the claimant in a position where the contract is void ab initio.
The competing claims were the General Unitholders’ Claims, which, as mentioned, were the claims that are not Statutory Rescission Claims or Potential Redemption Claims. In the Agreed Statement of Facts, the parties referenced a court order that tolled limitation periods for certain claims. Included in this list were claims for damages or rescission pursuant to “any common law or civil law rights.”

The General Unitholders’ Claims included common law claims to rescission. In other words, there was a subclass of Unitholders who could potentially assert a successful common law claim for rescission. The Court found, based on this, that there was no basis to award a priority to the Statutory Rescission Claimants over those with common law claims to rescission. Regardless of how the claim for rescission is established, the nature of the remedy was identical. Thus, the motion judge erred in finding that the Statutory Rescission Claimants have a “different relationship to the assets.”

In summary, neither the wording of s. 130.1 of the OSA nor the nature of the remedy of rescission provided a basis for finding that the Statutory Rescission Claimants have a priority. Accordingly, the Court granted the General Unitholders’ appeal.

4. Yes.

There was no basis to find a priority for either the Redemption Claims or the Statutory Rescission Claims. Therefore, the Unitholders should share pari passu. This was consistent with the constating documents of the Bridging Funds, which provided that holders of Units had the same rights and obligations as all other holders of the same class or series of Units.

SHORT CIVIL DECISIONS

Brown v. Williams, 2023 ONCA 777

[Miller, Paciocco and Nordheimer JJ.A.]

Counsel:

J.W., acting in person

M.A. Klaiman, for the respondent

Keywords: Civil Procedure, Striking Pleadings, Adjournments, Professional Responsibility, Lawyers, Duty of Candour to the Court, Bell ExpressVu Limited Partnership v. Torroni, 2009 ONCA 85

Doherty v. Doherty , 2023 ONCA 763

[Lauwers, Hourigan and Coroza JJ.A.]

Counsel:

T.R.D. and S.J.D., acting in person

K. Gale and P. Mahajan, for the respondent

Keywords: Wills and Estates, Civil Procedure, Applications

Gill v. MacIver, 2023 ONCA 776

[Roberts J.A. (Motion Judge)]

Counsel:

B. Radnoff and D. Seifer, for the respondent/moving party, The Pointer Group Incorporated

J.G. Saikaley and A.Brunet, for the appellant/responding party, Dr. K.K.G.

Keywords: Civil Procedure, Appeals, Security for Costs, Frivolous and Vexatious, Rules of Civil Procedure, r. 61, Lavallee v. Isak, 2022 ONCA 290, Pickard v. London Police Services Board, 2010 ONCA 643, Henderson v. Wright, 2016 ONCA 89, York University v. Markicevic, 2017 ONCA 651, Chemical Vapour Metal Refinishing v. Terekhov, 2016 ONSC 7080, Heidari v. Naghshbandi, 2020 ONCA 757

HSBC Bank Canada v. 1481396 Ontario Inc., 2023 ONCA 762

[Lauwers, Hourigan and Coroza JJ.A.]

Counsel:

M. Z. Tufman, for the appellants

J. P. E. Hardy, for the respondent

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

John Polyzogopoulos Blaney McMurtry LLP 416.593.2953 Email

Ines Ferreira Blaney McMurtry LLP 416.593.2953 Email

Table of Contents

CIVIL DECISIONS

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SHORT CIVIL DECISIONS

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

John Polyzogopoulos Blaney McMurtry LLP 416.593.2953 Email

Ines Ferreira Blaney McMurtry LLP 416.593.2953 Email

Table of Contents

CIVIL DECISIONS

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

SHORT CIVIL DECISIONS

Counsel:

Counsel:

Counsel:

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

John Polyzogopoulos Blaney McMurtry LLP 416.593.2953 Email

Ines Ferreira Blaney McMurtry LLP 416.593.2953 Email

Table of Contents

CIVIL DECISIONS

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

SHORT CIVIL DECISIONS

Counsel:

Counsel:

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 Ferreira
Blaney McMurtry LLP
416.593.2953 Email

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email