COURT OF APPEAL SUMMARIES (NOVEMBER 11 – NOVEMBER 15, 2019)

By John Polyzogopoulos on November 17, 2019

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Good evening.

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

The most notable decision of the week was Ontario (Attorney General) v. Bogaerts, in which the Court reversed the Superior Court’s decision to strike down certain portions of the Ontario Society for the Prevention of Cruelty to Animals Act. In upholding the constitutionality of those provisions, the Court reaffirmed that when dealing with regulatory matters, as opposed to criminal matters, a less strenuous and more flexible standard of reasonableness applies. With respect to the s. 8 challenge to that legislation, the Court held that the application judge came to the right conclusion as the provisions imposed a sufficient procedural safeguard against unreasonable search and seizure in the context of animal protection. However, the application judge erred in law in concluding that the impugned provisions engaged the liberty and security of the person interests under s. 7, and in recognizing a novel principle of fundamental justice. Ultimately, the Court found that the powers conferred by the provisions at issue were too remote from the possibility of conviction and imprisonment to engage the liberty interest and they did not plainly interfere with bodily integrity or control over one’s body. Furthermore, with respect to the proposed new principle of fundamental justice, namely that “law enforcement bodies must be subject to reasonable standards of transparency and accountability”, the Court found that it met none of the three criteria established by the Supreme Court of Canada in Malmo-Levine, 2003 SCC 74.

Other topics covered this week included insurance coverage in the MVA context, the duty to defend, and certainty of intention to create a trust in the insolvency context.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Ontario (Attorney General) v. Bogaerts, 2019 ONCA 876

Keywords: Constitutional Law, Freedom from Unreasonable Search and Seizure, Right to Liberty and Security of the Person, Principles of Fundamental Justice, Public Interest Standing, Canadian Charter of Rights and Freedoms, ss 7, 8, Ontario Society for the Prevention of Cruelty to Animals Act, R.S.O. 1990, c. O.36, Ontario Society for the Prevention of Cruelty to Animals Amendment Act (Interim Period), 2019, S.O. 2019, c. 11, Rodriguez v. British Columbia (Attorney General), [1993] 3 S.C.R. 519, Hunter et al. v. Southam Inc., [1984] 2 S.C.R. 145, R. v. Big M Drug Mart, [1985] 1 S.C.R. 295, R. v. Big M Drug Mart, [1985] 1 S.C.R. 295, Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486, Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7, Canada (Attorney General) v. Bedford, 2013 SCC 72, R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606, R. v. Stinchcombe, [1991] 3 S.C.R. 326, Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), [1990] 1 S.C.R. 425, London (City) v. Polewsky (2005), 202 C.C.C. (3d) 257, R. v. Schmidt, 2014 ONCA 188, R. v. Rodgers, 2006 SCC 15, R. v. Pearson, [1992] 3 S.C.R. 665, Wakeling v. United States of America, 2014 SCC 72, R. v. Malmo-Levine, 2003 SCC 74, Canadian Foundation for Children, Youth and the Law v. Canada (Attorney General), 2004 SCC 4

Conners v. D’Angelo, 2019 ONCA 905

Keywords: Contracts, Interpretation, Insurance, Coverage, MVA, Statutory Accident Benefits, Insurance Act, R.S.O. 1990, c. I.8., Uninsured Automobile Coverage, R.R.O. 1990, Reg. 676, Ontario Automobile Policy, s 1.8.2, Shipman v. Dominion of Canada General Insurance Co. (2004), 73 O.R. (3d) 144 (C.A.), Taggart (Litigation Guardian of) v. Simmons (2001), 52 O.R. (3d) 704 (C.A.), McCardle v. Bugler, 2007 ONCA 659, Ortiz v. The Dominion of Canada General Insurance Co. (2001), 52 O.R. (3d) 130 (C.A.)

Firepower Debt GP Inc. v. TheRedPin, Inc., 2019 ONCA 903

Keywords: Trusts, Certainty of Intention, Bankruptcy and Insolvency, Sales Commissions

Pembridge Insurance Company of Canada v. Chu, 2019 ONCA 904

Keywords: Contracts, Interpretation, Insurance, Coverage, MVA, Duty to Defend, Exclusions, Intentional Acts, Non-Marine Underwriters Lloyd’s London v. Scalera, 2000 SCC 24, Consolidated Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., [1980] 1 S.C.R. 888, Tench v. Erskine (2006), 244 N.S.R. (2d) 55, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Cooper v. Farmers’ Mutual Insurance Co. (2002), 59 O.R. (3d) 417

Short Civil Decisions

Liu v. Longo, 2019 ONCA 892

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1, Khan v. Krylov & Co., 2017 ONCA 625

Criminal Decisions

R. v. D., 2019 ONCA 893

Keywords: Criminal Law, Criminal Negligence Causing Bodily Harm, Dangerous Driving Causing Bodily Harm, Impaired Driving Causing Bodily Harm, Acquittal, Criminal Code, ss. 221, 249(3), 255(2), 255(2.1)

R. v. M.S. (Publication Ban), 2019 ONCA 894

Keywords: Publication Ban, Criminal Law, Incest, Sexual Assault, Child Pornography, Sentencing, Criminal Code, ss. 718.01, 718.2, R. v. Boudreault, 2018 SCC 58, R. v. Lacasse, 2015 SCC 64, R. v. P.M., 2012 ONCA 162

R. v. M., 2019 ONCA 890

Keywords: Criminal Law, Second Degree Murder, Jury Trials, Jury Instruction, Evidence, Video-taped Statements, Credibility, Bad Character Evidence, Res Gestae, Oath-Helping, Post Offence Conduct, R. v. P. (N.A.) (2002), 171 C.C.C. (3d) 70, R. v. Ansari, 2015 ONCA 575, leave to appeal refused, [2015] S.C.C.A. No. 487, R. v. B. (F.F.), [1993] 1 S.C.R. 697, R. v. J.A.T., 2012 ONCA 177, R. v. Khan (1988), 42 C.C.C. (3d) 197 (Ont. C.A.), aff’d [1990] 2 S.C.R. 531, R. v. Nurse, 2019 ONCA 260, Ratten v. The Queen, [1972] A.C. 378 (P.C.), R. v. Nicholas (2004), 182 C.C.C. (3d) 393 (Ont. C.A.), leave to appeal refused, [2004] S.C.C.A. No. 225, R. v. Tash, 2013 ONCA 380, R. v. Santhosh, 2016 ONCA 731, R. v. Adan, 2019 ONCA 709, R. v. Hall, 2010 ONCA 724, R. v. White, [1998] 2 S.C.R. 72

R. v. E., 2019 ONCA 891

Keywords: Criminal Law, Sexual Assault, Ineffective Assistance of Counsel, Disclosure, Sentencing, Canadian Charter of Rights and Freedoms, R. v. Oickle, 2000 SCC 38, R. v. Grant, 2009 SCC 32, R. v. Moran (1987), 36 C.C.C. (3d) 225

R. v. S., 2019 ONCA 895

Keywords: Criminal Law, Robbery, Firearm Offences, Uttering Death Threats, Carrying a Concealed Weapon, Double Jeopardy, Delay, Standard of Review, Correctness, Criminal Code, ss. 87(2), 90(1), 264.1, 344(1), 561(1), Charter of Rights and Freedoms, s. 11(b), R. v. Jordan, 2016 SCC 27, R. v. Coulter, 2016 ONCA 704, R. v. Morin, [1992] 1 S.C.R. 771, D.M.S. v. R., 2016 NBCA 71, R. v. Jurkas, 2018 ONCA 489

R. v. A.S., 2019 ONCA 900

Keywords: Publication Ban, Criminal Law, Sexual Assault, Unlawful Confinement, Robbery, Possession of a Firearm, Sentencing, Pre-Sentence Custody, Fresh Evidence, Canadian Charter of Rights and Freedoms, ss. 12, 24(1), Canadian Civil Liberties Association v. Canada, 2019 ONCA 243, R. v. Lacasse, 2015 SCC 64, R. v. Nasogaluak, 2010 SCC 6

R. v. D., 2019 ONCA 897

Keywords: Criminal Law, Possession of Heroin, Possession of Heroin for the Purpose of Trafficking, Jury Trials, Jury Instructions, W.(D.) Instruction, Controlled Drugs and Substances Act, ss. 4(1), 5(2)

R. v. G., 2019 ONCA 902

Keywords: Criminal Law, Attempting to Possess Heroin for the Purpose of Trafficking, Mens Rea, Sentencing, Criminal Code, s. 718.1, R. v. Lohrer, 2004 SCC 80, R. v. Sinclair, 2011 SCC 40, R. v. Villaroman, 2016 SCC 33, R. v. Jackson, [2007] 3 S.C.R. 514, R. v. Lacasse, 2015 SCC 64

R. v. L., 2019 ONCA 899

Keywords: Criminal Law, Unlawful Confinement, Defences, Consent, Jury Trials, Jury Instructions, Criminal Code, ss. 279, 494(1), 494(3), R. v. Niedermier, 2005 BCCA 15, leave to appeal refused, [2005] S.C.C.A. No. 103, R. v. Magoon, 2018 SCC 14, R. v. Gough, (1985) 18 C.C.C. (3d) 454 (Ont. C.A.)

R. v. T.C. (Publication Ban), 2019 ONCA 898

Keywords: Publication Ban, Criminal Law, Sexual Assault, Sexual Interference, Self-Represented Accused, Jury Trials, Jury Instructions, Similar Fact Evidence, Criminal Code, ss. 151(a), 152, 271, 486.3, Criminal Proceeding Rules for the Superior Court of Justice (Ontario), SI/2012, Rule 30, R. v. Dawson, 2016 ONCA 880, R. v. MacCormack, 2009 ONCA 72, R. v. Tsigirlash, 2019 ONCA 650, R. v. Handy, 2002 SCC 56, R. v. P.E.C., 2005 SCC 19, R. v. T.B.L. (2003), 173 O.A.C. 159 (C.A.), R. v. Graham, 2015 ONCA 113, R. v. Simpson (1977), 35 C.C.C. (2d) 337 (Ont. C.A.), R. v. Arp, [1998] 3 S.C.R. 339, R. v. J.A.T., 2012 ONCA 177, R. v. B.(L.) (1997), 35 O.R. (3d) 35 (C.A.), R. v. McNeice, 2019 ONCA 836, R. v. Wilson, 2013 ONCA 222

R. v. R., 2019 ONCA 901

Keywords: Criminal Law, Firearm Offences, Sentencing, R. v. Boudreault, 2018 SCC 58

CIVIL DECISIONS

Ontario (Attorney General) v. Bogaerts, 2019 ONCA 876

[Sharpe, Hourigan and Roberts JJ.A.]

Counsel:

Daniel Huffaker, for the appellant
Kurtis R Andrews, for the respondent
Shain Widdifield, for the intervener the Attorney General of Canada
Arden Beddoes, Camille Labchuk and Kaitlyn Mitchell, for the intervener Animal Justice Canada
Stephen McCammon, for the intervener the Information and Privacy Commissioner of Ontario
Andrew Faith and Brookelyn Kirkham, for the intervener Railway Association of Canada
Graeme A Hamilton and Alannah Fotheringham, for the intervener Canadian Civil Liberties Association

facts:

This appeal considered the constitutionality of the statutory authority conferred upon inspectors and agents designated by the Ontario Society for the Prevention of Cruelty to Animals (the “OSPCA”) to exercise the powers of a peace officer in the enforcement of laws pertaining to the welfare and prevention of cruelty to animals. The respondent is a paralegal who was given public interest standing to challenge certain provisions of the Ontario Society for the Prevention of Cruelty to Animals Act.

The application judge dismissed the respondent’s argument that provisions in the OSPCA creating offences were matters of criminal law and therefore beyond the legislative authority of the province. The application judge also dismissed the respondent’s contention that certain provisions in the OSPCA infringed s. 8 of Charter of Rights and Freedoms guaranteeing the right to be secure against unreasonable search and seizure. However, the application judge accepted the submission that some of the OSPCA’s search and seizure provisions violated the s. 7 right not to be denied liberty and security of the person except in accordance with the principles of fundamental justice. He found that those search and seizure powers engaged the liberty and security of the person interests and he recognized a novel principle of fundamental justice, namely, that “law enforcement bodies must be subject to reasonable standards of transparency and accountability”. The application judge struck down the sections of the OSPCA conferring the powers of a peace officer on OSPCA officers and agents as well as two sections authorizing search and seizure.

The appellant, the Attorney General of Ontario, appealed the order granting the respondent public interest standing and the s. 7 order striking down three sections of the OSPCA. The respondent cross-appealed the dismissal of the s. 8 argument and sought to add that “law enforcement bodies must be funded in such manner to avoid actual or perceived conflicts of interest or apprehension of bias” as an additional principle of fundamental justice.

issues:

(1) Did the motion judge err by granting the respondent public interest standing?

(2) Did the application judge err by rejecting the s. 8 challenge to ss. 13(6), 14(1)(b) and 14(1)(c)?

(3) Did the application judge err by finding that ss. 11, 12 and 12.1 engage the liberty and security of the person interests under s. 7?

(4) Did the application judge err in recognizing a novel principle of fundamental justice?

holding:

Appeal allowed. Cross-appeal dismissed.

reasoning:

(1) The Court did not deal with this ground of appeal in any detail. However, the Court pointed out that the combined effect of the order granting the respondent public interest standing and striking out the affidavits providing specific instances of the infringement of Charter rights resulted in the court having a less than satisfactory record. In Downtown Eastside Sex Workers, 2012 SCC 45, the Supreme Court noted that there was a substantial record of affidavit evidence as to the operation and impact of the challenged legislation, to “provide a concrete factual background” for the challenge. By contrast, on this application and appeal, the constitutional arguments were advanced in the abstract without a proper factual foundation. In the Court’s view, it would have been preferable had this challenge come before the court either on the application of an individual who had been subjected to the challenged statutory powers, or upon some other proper record, to provide a concrete factual context for the consideration of the constitutional issues raised.

(2) No. The application judge did not err in dismissing the s. 8 claim. The principal focus of the respondent’s cross-appeal was that all three provisions allow for warrantless searches of and seizures from dwellings. The application judge rejected the s. 8 challenge on the ground that a person subject to a search or seizure under the challenged provisions would not have a reasonable expectation of privacy, in part at least because of their non-criminal nature. The Court agreed with the respondent that the application judge’s analysis was unpersuasive. The Court held there can be no doubt that individuals enjoy an expectation of privacy in their dwellings. However, the search and seizure powers at issue all favour a lower standard of reasonableness. The Court was therefore satisfied that the impugned provisions do not violate s. 8 of the Charter.

First, as the application judge observed, the present case dealt with a regulatory rather than a criminal matter where a “less strenuous and more flexible standard of reasonableness” applies: Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), [1990] 1 S.C.R. 425.

Second, these provisions dealt less with gathering evidence and more with the prevention and alleviation of harm. According to the Court, the present case dealt with exigent circumstances where the expectation of privacy yields to prevention of imminent harm: R. v. Godoy, [1999] 1 S.C.R. 311. An animal in distress is unable to draw attention to its plight. More serious harm or even death may result if prompt action is not taken to relieve the animal’s distress. Entry under ss. 13(6) and 14(1)(c) is only permitted where the owner or custodian has already been ordered to act to relieve animal distress. Seizure under s. 14(1)(b) is only permitted where an animal is in distress and the owner or custodian is not present and cannot be found promptly. While this falls short of the protection afforded by prior authorization obtained through a judicially approved search warrant, in the Court’s view, it is a sufficient safeguard against unreasonable search and seizure in the context of animal protection.

(3) Yes, the application judge erred in concluding that the impugned provisions engage the liberty and security of the person interests under s. 7. It is well-established that the analysis under s. 7 proceeds in two stages. The first question is whether the impugned law infringes life, liberty or security of the person. If the answer to that question is yes, the second question is whether the infringement is in accordance with the principles of fundamental justice.

Liberty

The application judge concluded that because the exercise of the powers conferred by ss. 11, 12 and 12.1 could lead to prosecution, conviction and imprisonment under the offence provisions of the OSPCA,, the liberty interest was engaged. In the Court’s view, this amounted to an error of law for two reasons.

First, this was not an appeal from conviction. The Court agreed with the appellant that viewed on their own, the powers conferred by those provisions are too remote from the possibility of conviction and imprisonment to engage the liberty interest.

Second, the Court found that holding that the risk of imprisonment is possible as an eventual consequence of a search would turn virtually every s. 8 challenge into a s. 7 challenge as well. In the Court’s view, that would be wrong and contrary to established authority.

Security of the Person

The Court held that the application judge also erred in concluding that the impugned provisions engaged the security of the person interest protected by s. 7. The impugned powers plainly do not interfere with bodily integrity or control over one’s body. While the Court held that there was no doubt it would be unsettling to have one’s premises or dwelling subjected to a search under the impugned powers, there was nothing in the record to suggest that a search of that nature would impose the level of state-imposed stress contemplated by the case law.

However, in the Court’s view, the application judge should have confined his analysis of any challenged search and seizure provision to the specific s. 8 guarantee. The Court did not agree with the application judge’s determination that a s. 7 analysis was appropriate in the “particular context” of this case to address the respondent’s issues. Rather, the issue should have been framed in terms of the reasonableness of the powers of search and seizure. To succeed, the respondent should have been required to show that conducting a search or seizure without reasonable standards to ensure transparency, accountability and adequate funding is unreasonable under s. 8. The Court disagreed with the respondent’s submission that if the Court accepted that the analysis should proceed under s. 8, the Court should still strike down ss. 11, 12 and 12.1 on the grounds that the absence of transparency, accountability and adequate funding renders searches conducted under these provisions unreasonable. The respondent’s complaint is with the general governance of the OSPCA, not with the definition of its statutory powers or the manner in which they are exercised.

The Court addressed the specific provisions challenged as being unreasonable: ss. 12 and 12.1. Subsection 12(1) allows inspectors and agents with a warrant to search a building or place to determine if an animal is in distress while subsection 12(6) allows for entry without a warrant upon reasonable grounds to believe that an animal is in immediate distress. Section 12.1 allows inspectors, agents and veterinarians who are lawfully in a place to take a carcass or sample of a carcass. Neither provision authorizes the warrantless search of a dwelling. Section 12, dealing with exigent circumstances and the seizure of a carcass or part of a carcass, represents a minimal interference with the owner’s or custodian’s rights. They are arguably less intrusive of an owner’s or custodian’s privacy interest than the other provisions the Court dealt with. For the reasons the Court gave with respect to the other provisions challenged under s. 8, the Court rejected the challenge to ss. 12 and 12.1.

(4) Yes, the application judge erred in recognizing a novel principle of fundamental justice. In applying the three criteria summarized by the Supreme Court of Canada in Malmo-Levine, 2003 SCC 74, the Court agreed with the appellant that the proposed new principle of fundamental justice meets none of these three criteria.

The Court first addressed the first criterion, namely, whether transparency, accountability and adequate funding qualifies as a “legal principle” capable of supporting s. 7 analysis. The application judge gave as examples of transparency the open court principle and legislation relating to access to information. The need to support legal decisions with reasons was given as an example of accountability. In the Court’s view, those examples fell short of supporting what is required to constitute a legal principle that “provides meaningful content for the s. 7 guarantee” and that avoids the “adjudication of policy matters”. A legal principle that is used “as a rule or test in common law, statutory or international law” will satisfy the first criterion of the principles of fundamental justice test: Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7. Transparency and accountability have a more limited legal pedigree. They are background values that the law sometimes takes into account in various ways and in various contexts. Courts may consider these values in interpretation but they have not crystallized into the kind of operational or normative legal principles that can be independently deployed by a court to determine rights and obligations that will satisfy the s. 7 test.

The Court then discussed the second criterion: whether transparency, accountability and adequate funding are “vital or fundamental to our societal notion of justice.” The Court cited Canadian Foundation for Children, where the Supreme Court of Canada held that while “the best interests of the child” is a legal principle that succeeds at the first stage, it fails to meet the second criterion as a principle that is vital to our societal notion of justice. In the Court’s view, “best interests of the child” is much closer to being “vital or fundamental to our societal notion of justice” than transparency, accountability and proper funding. The latter values are regularly subordinated to other concerns.

Finally, the Court did not think that the proposed principle satisfied the third branch of the test that it “be capable of being identified with precision and applied to situations in a manner that yields predictable results.” It was far from clear to the Court what measures would be required to satisfy this alleged principle of fundamental justice. Achieving transparency, accountability and adequate funding for any public body opens a complex and multifaceted inquiry that could yield a wide range of outcomes.

To accept transparency, accountability and adequate funding as a principle of fundamental justice would, in the Court’s view, create uncertainty and necessarily involve the courts in the “adjudication of policy matters”. However, the Court pointed out that the operation of the OSPCA is not entirely devoid of transparency and accountability. If a prosecution is brought by the OSPCA, any searches or seizures are subject to judicial and Charter scrutiny.

Conners v. D’Angelo, 2019 ONCA 905

[Strathy C.J.O., Doherty and Sharpe JJ.A.]

Counsel:

Aliza Karoly, for the appellant
Arthur R Camporese, for the respondent

facts:

The appellant sustained injuries in a motor vehicle accident. He was a passenger in a vehicle driven by an unlicensed driver, without the permission of the owner. He sued the driver of the vehicle, the owner of the vehicle, and the owner’s liability insurer. He claimed that he was an “insured” under the owner’s policy issued by the respondent, Gore Mutual Insurance Company, and was entitled to uninsured motorist coverage for damages.

On summary judgment, the motion judge dismissed the appellant’s claim against the insurer. He found that, pursuant to s. 1.8.2 of the standard Ontario Automobile Policy (“OAP 1”), the insurance contract excluded uninsured motorist coverage for the appellant because the automobile was operated without the owner’s consent. Consequently, the appellant’s claim under the owner’s policy was limited to certain Statutory Accident Benefits (“SABs”). Any other claim would have to be made to the Motor Vehicle Accident Claims Fund. The appellant argued that he qualifies as an “insured” under s. 224(1) of Part VI (Automobile Insurance) of the Insurance Act because, as an occupant of the vehicle, he was entitled to receive SABs under the owner’s policy.

issues:

(1) Does the appellant qualify as “a person insured under the contract”?

(2) Does s. 1.8.2 conflict with the Act, and is the coverage provided by the Act restricted by statute?

holding:

Appeal dismissed.

reasoning:

(1) No. The appellant asserted that he qualified as an “insured” under s. 224(1) of Part VI (Automobile Insurance) of the Insurance Act because, as an occupant of the vehicle, he was entitled to receive SABs under the owner’s policy. Having qualified as an “insured”, the appellant asserted that he also qualified as “a person insured under the contract” under s. 265(1) and is therefore entitled to uninsured motorist coverage. However, the Court held that even if the appellant did qualify as “a person insured under the contract”, the coverage available could be modified or excluded by regulation. The Court relied on the reasoning in Shipman, and held that coverage for the appellant in this case, an occupant of a vehicle driven without the owner’s consent, is plainly excluded (other than for certain SABs).

(2) No. A submission to substantially the same effect was rejected by the court in Ortiz v. The Dominion of Canada General Insurance Co. (2001), 52 O.R. (3d) 130 (C.A.). There is no conflict with the Act. The Act, the regulation, and the OAP 1 operate in harmony.

Firepower Debt GP Inc. v. TheRedPin, Inc., 2019 ONCA 903

[Lauwers, Fairburn and Zarnett JJ.A.]

Counsel:

Jordan Goldblatt, for the appellant Agents
Jeffrey S Klein, for the appellant, Certain Underwriters of Lloyd’s of London
Harvey Chaiton, for the respondent, Firepower Debt GP Inc.
Aubrey E Kauffman, for the respondent, Trilogy Growth Fund LP
Harry Fogul, for the receiver, MNP Ltd.

Keywords: Trusts, Certainty of Intention, Bankruptcy and Insolvency, Sales Commissions

facts:

TRP Realty operated a real estate brokerage business with a focus on the new and future condominium market. TRP Realty engaged Agents to perform the listing and selling activities that generated trades in real estate and TRP Realty’s entitlement to commissions. Under agreements with each of the Agents, TRP Realty was required to pay a specified portion of the commissions it earned and received to the Agents.

In June 2018, TRP Realty became insolvent and a receiver was appointed. At the time of the appointment of the receiver, there were commissions to be received by TRP Realty on transactions in new and future condominium projects that were scheduled to close at various times through 2023. The Agents are owed a portion of those pending commissions.

The receiver brought a motion for advice and directions as to whether these commissions, when collected, were to be held in trust for the benefit of the Agents to the extent of TRP Realty’s obligation to pay a portion of them to the Agents. If the amount was required to be held in trust, it would be excluded from TRP Realty’s available assets which were subject to the claims of creditors, including the claims of the Respondent secured creditors.

Before the motion judge, the parties agreed that the existence of a trust requires three certainties to be present: subject-matter, object, and intention. The disagreement between the parties was about certainty of intention. The motion judge rejected the claim that there was a trust because he was unable to agree that the requirement for certainty of intention to create a trust had been established. The Agents and their insurer appealed.

issues:

(1) Did the motion judge make errors which led him to attach significance to evidence which weighed against the existence of the requisite intention on the part of TRP Realty?

(2) Did the motion judge give appropriate significance to the evidence that was said to support a conclusion that TRP Realty intended that the Agents’ commissions be held in trust?

holding:

Appeal dismissed.

reasoning:

(1) No. The appellants argued that the motion judge erred when he placed weight on the fact that the agreements between TRP Realty and the Agents did not contain a provision that commissions are to be held in trust by TRP Realty for the benefit of the Agents. However, the appellant’s provided no authority for the proposition that a formal agreement that does not provide for a trust must be ignored when considering whether an intention to create a trust existed. In the Court’s view, the motion judge was entitled to consider the fact that the agreements with each of the Agents neither created a trust, nor required that one be created. This was especially so given that the agreements specified that they contained “the entire agreement between the parties”. It was for the motion judge to decide what weight to put on that evidence.

The appellants also argued that the motion judge erred when he found that TRP Realty’s audited financial statements were a clear statement of its intention that the pending commissions were not held in trust, and that the Agents’ split of the commissions represented an unsecured debt owing to them. In making this finding, the motion judge contrasted Agent’s commissions, which were not indicated to be held in trust, and purchasers’ deposits, which were expressly noted as being held in trust. The appellants argued that it was a palpable and overriding error for the motion judge to overlook a third relevant category, namely, amounts to be paid to Cooperating Brokerages, which the appellants said were not shown on the financial statement as amounts being held in trust, but were unambiguously required to be held in trust. It was argued that this undermined the inference that the financial statements were a reliable indicator of what were and were not intended to be trust funds.

The Court rejected this argument for two reasons. First, the parties did not agree about what the financial statements showed concerning commissions owed to Cooperating Brokerages. Second, even if the appellants were correct about amounts to be paid to Cooperating Brokerages, it would not have materially detracted from the motion judge’s point that the financial statements supported an inference inconsistent with the existence of a certainty of intention that the Agents’ commissions were to be held in trust. Although a similar inference from a failure to record amounts owed to Cooperating Brokerages as being held in trust on the financial statements could be overcome, the motion judge’s essential point was that the inference was not outweighed for Agents’ commissions.

(2) Yes. The motion judge considered the evidence of the existence and history of a separate commission account at TRP Realty’s banks, entries on various transaction documents, and evidence of TRP Realty’s founder given in the proceedings below in which he stated his understanding about to whom the Agents’ commissions belonged. He concluded it was essentially ambiguous and the evidence in favour of the trust was outweighed by evidence which was inconsistent with a trust, namely, the absence of a mention of a trust requirement in the agreements with the Agents and the representations in TRP Realty’s financial statements, which were inconsistent with a trust. That weighing of evidence was entitled to deference, and in the Court’s view, involved no palpable and overriding error.

The appellant also argued that the motion judge engaged in speculation about the reasons for a separate commission account. The Court found no palpable and overriding error in motion judge’s consideration of the commercial context for a separate account, especially in light of the main grounds for his decision.

Pembridge Insurance Company of Canada v. Chu, 2019 ONCA 904

[Simmons, Pardu and Nordheimer JJ.A.]

Counsel:

Thomas J Donnelly and Joyce Tam, for the appellant
Todd J McCarthy, for the respondent

facts:

The Dominion of Canada General Insurance Company (“Dominion”) appealed from an application judge’s decision that Pembridge Insurance Company of Canada (“Pembridge”) was under no duty to defend DC and JC from claims related to a motor vehicle accident. Dominion is DC’s auto-insurer and conceded a duty to defend allegations of negligent driving against him. Pembridge provides JC’s homeowner insurance. DC is JC’s son, and was living at home at the time of loss. Pembridge therefore covers DC under the homeowner’s policy.

In the underlying litigation, TM, claims OF caused her injuries by driving through a red light. OF made a third party claim against DC, alleging, among other things, that DC not only drove negligently but also got out of his vehicle; threatened OF and his passenger with violence; yelled at them, hit the window and other parts of the vehicle; and made other gestures causing OF and his passenger to fear for their lives. OF claimed, among other things, that his flight from DC led to the collision which caused TM’s injuries.

The Pembridge homeowner’s policy insured the policy holder for “legal liability arising out of [their] personal actions anywhere in the world” but excluded claims made arising from “the ownership, use or operation of any motorized vehicle”.

issues:

(1) Did the motion judge err by failing to compare the allegation against DC and JC in the pleading with the homeowner policy’s language, and by considering it “more appropriate” for Dominion to provide coverage?

(2) Did the motion judge err in concluding that the intentional act exclusion in the homeowner’s policy meant that Pembridge was under no duty to defend?

(3) Did the motion judge err by making factual findings about DC’s actions?

holding:

Appeal allowed.

reasoning:

(1) Yes. It is arguable that the exclusion in the Pembridge homeowner policy for acts arising from “the ownership, use or operation of any motorized vehicle”, when construed narrowly, does not apply to DC’s alleged assaults. In other parts of the policy, Pembridge excluded coverage for matters such as terrorism or fungal contamination where there are other causes of the losses, whether concurrent or sequential. In other exclusions, Pembridge uses the language of bodily injury arising “directly or indirectly” from an excluded event. The automobile exclusion does not include that language. Consequently, a court might conclude that the automobile exclusion in the Pembridge homeowner policy did not apply so as to exclude coverage for DC’s actions after he got out of his car. Under these circumstances, the motion judge erred in concluding that Pembridge had no duty to defend under the use of an automobile exclusions.

(2) Yes. The Pembridge homeowner policy also excludes bodily injury “caused by any intentional or criminal acts” by any person insured by the policy. DC’s alleged conduct after he left his vehicle was intentional in the sense that it was advertent behaviour. However, in Non-Marine Underwriters Lloyd’s London v. Scalera, 2000 SCC 24, a clause excluded insurance coverage for bodily injury “caused by any intentional or criminal act”. In the context of damage claims for sexual battery, the Supreme Court of Canada concluded that this clause could not be read literally. Instead, the exclusion clause had to be read to require that in addition to the intentional act, there was also an intent to injure. Here, there was no allegation that DC intended to harm TM. There is also no allegation that DC intended to harm OF. It is not clear that the assaults and threats attributed to DC would be sufficient to invoke the exclusion. Based on Scalera, it is arguable that the intentional or criminal act exclusion has no application. Since the exclusion clause may be narrowly construed, and since there was a possibility that Pembridge may have to indemnify DC and JC depending on what facts are ultimately found, there was a duty to defend.

(3) Yes. A duty to defend motion does not resolve the ultimate factual issues as to a duty to indemnify. That motion involves comparing allegations in the pleadings and the relevant policy. Findings of fact are not made about the accident’s circumstances. Determination of ultimate responsibility for indemnity must await those findings of fact.

SHORT CIVIL DECISIONS

Liu v. Longo, 2019 ONCA 892

[Simmons, Pardu and Nordheimer JJ.A.]

Counsel:

XL, acting in person
Michael McChesney, for the respondent, Certas Direct Insurance Company
Gerry Antman, for the respondent, AL

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1, Khan v. Krylov & Co., 2017 ONCA 625

CRIMINAL DECISIONS

R. v. D., 2019 ONCA 893

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

Davin Michael Garg, for the appellant
James Brennan Smart, for the respondent

R. v. M.S. (Publication Ban), 2019 ONCA 894

[Watt, Huscroft and Trotter JJ.A.]

Counsel:

Jeffrey Berman, for the appellant
Adam Wheeler, for the respondent

R. v. M., 2019 ONCA 890

[Strathy C.J.O., Doherty and Tulloch JJ.A.]

Counsel:

Paul JI Alexander, for the appellant
Deborah Krick, for the respondent

R. v. E., 2019 ONCA 891

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

Counsel:

DE, self-represented
Erica Whitford, for the respondent

R. v. S., 2019 ONCA 895

[Watt, Lauwers and Paciocco JJ.A.]

Counsel:

Ian R Smith, for the appellant
Katie Doherty, for the respondent

R. v. A.S., 2019 ONCA 900

[Simmons, Watt and Miller JJ.A.]

Counsel:

Alexander Ostroff, for the appellant
Tracy Kozlowski, for the respondent

R. v. D., 2019 ONCA 897

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

Counsel:

Richard Litkowski and Jessica Zita, for the appellant
Maria Gaspar, for the respondent

R. v. G., 2019 ONCA 902

[Simmons, Watt and Miller JJ.A.]

Counsel:

Mindy Caterina, for the appellant
Howard Piafsky, for the respondent

R. v. L., 2019 ONCA 899

[Watt, Huscroft and Jamal JJ.A.]

Counsel:

Andrew Menchynski, for the appellant SL
Cristina Candea, for the appellant OL
Michael Perlin, for the respondent

R. v. T.C. (Publication Ban), 2019 ONCA 898

[Strathy C.J.O., Watt and Zarnett JJ.A.]

Counsel:

Michael Davies and Meaghan McMahon, for the appellant
Frank Au, for the respondent

R. v. R., 2019 ONCA 901

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

Counsel:

Paul Calarco, for the applicant (appellant)
Natalya Odorico, for the respondent

Keywords: Criminal Law, Firearm Offences, Sentencing, R. v. Boudreault, 2018 SCC 58

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.

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CIVIL DECISIONS

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SHORT CIVIL DECISIONS

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John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email