Hello everyone. Below are summaries of this week’s Ontario Court of Appeal civil decisions (non-criminal). Topics covered include intellectual property, police liability, wrongful dismissal, occupier’s liability, and the oppression remedy under the Condominium Act.  In Bienstock v Adenyo, the Court of Appeal applied the Supreme Court’s 2006 decision in Pro Swing Inc v. Elta Golf Inc, which confirmed that non-monetary foreign judgments can be enforced in Canada.

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John Polyzogopoulos
Blaney McMurtry LLP
Tel: 416.593.2953

Apotex Inc. v. Eli Lily and Company, 2015 ONCA 305

[Doherty, Feldman and Blair JJ.A.]

D. D. Conklin and N. D. Luca, for the appellant
P. Smith and T. J. Burke, for the respondents

Keywords: Intellectual Property, Patent Law, Patented Medicines (Notice of Compliance) Regulations, Unjust Enrichment, Disgorgement of Profits, Motion to Strike, , Rules of Civil Procedure, Rule 21.01(1)(b)

The appellant, Apotex, is the generic manufacturer of a drug used to treat Attention Deficit Hyperactivity Disorder (“ADHD”). The respondents Eli Lily and Company and Eli Lilly Canada Inc. (“Lilly”) are also brand name manufacturers of drug used to treat ADHD, for which they held a patent. Lilly’s patent for the drug was subsequently declared invalid by the Federal Court. Apotex then became entitled to recover from Lilly, under s. 8(1) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (“PMNOC regulations”), the loss it suffered as a result of its two year exclusion from the market. During that two year period, Lilly earned about $70 million in sales of its patented drug, which it sold at monopolistic prices.

Apotex then brought an action against Lilly, including a claim for unjust enrichment, on the basis that it was entitled to recover all of the monopolistic profits Lilly earned during the time it was excluded from selling its generic drug in the market. Apotex was seeking a disgorgement of these profits, as the appropriate remedy. To support its claim for unjust enrichment, Apotex pleaded the following: (1) it suffered a deprivation by the delay in the issuance of the Notice of Compliance for its generic product; (2) Lilly enjoyed a corresponding benefit by an extension of its market exclusivity equivalent to Apotex’s delay, resulting in a windfall to Lilly; and (3) there is no juristic reason for Lilly to retain that windfall. It should be noted that Apotex would never have earned the same amount of the profits Lilly earned during that time, as it sells a generic product at a lower price.

Apotex, appealed the decisions of the motion judge and the Divisional Court, both of which  struck its claim for unjust enrichment against Lilly, pursuant to rule 21.01(1)(b) of the Rules of Civil Procedure.  The Divisional Court found that it was plain and obvious that Apotex’s unjust enrichment claim had no reasonable prospect of success. Specifically, it found that while the PMNOC regulations constitute a complete code of remedies for pharmaceutical companies by virtue of their operation, it is possible for a party to obtain another remedy if can establish a cause of action that is “totally independent” of this regulatory regime. Applying this principle, it struck Apotex’s claim for unjust enrichment on the basis that Apotex had not asserted an independent cause of action outside the ambit of the PMNOC regulations, as the impugned representations were made by Lilly on a form prescribed by the regulations.

(1) Did the Divisional Court err in striking Apotex’s claim for unjust enrichment under rule 21.01(1)(b), on the basis that it was plain and obvious that it had no reasonable prospect of success?

The appeal was dismissed and costs fixed at the agreed-upon amount of $17,500 were awarded to Lilly. The parties have agreed that the costs below of $22,932.75 and $15,000 would also be payable to Lilly.

(1) No. The Divisional Court did not err in striking Apotex’s claim for unjust enrichment. The Court of Appeal first reviewed the test for unjust enrichment, which requires a plaintiff to establish three things: (1) an enrichment of or benefit to the defendant; (2) a corresponding deprivation of the plaintiff; and (3) the absence of a juristic reason for the enrichment, Kerr v. Baranow, 2011 SCC 10. It also reviewed the test on a motion to strike- whether the facts as pleaded, assumed to be true, could support a successful unjust enrichment claim, Imperial Tobacco Canada Ltd., 2011 SCC 42.

Applying these legal tests, it was held that Apotex’s unjust enrichment claim (as a stand-alone cause of action) should be struck because it was unable to establish that it suffered a corresponding deprivation. Specifically, Apotex was never deprived of the portion of Lilly’s revenues, as represented by its monopolistic profits, because Apotex is a generic drug manufacturer and would never have earned those profits. Furthermore, applying the “transfer of wealth” principle outlined in Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, it was held that the monopolistic profit was not in any way transferred from Apotex to Lilly, or lost by Apotex. The court did address the fact that Apotex’s pleadings expressly mentioned that public consumers were harmed by virtue of paying higher prices for Lilly’s drug when Apotex would have otherwise been able to sell its generic version of the drug. On this point, the court held that the public (and not Apotex) may have actually suffered a corresponding deprivation as a result of Lilly’s monopolistic pricing for two years, when Apotex was barred from the market. However, this loss is not something that Apotex can recover for the public.

The court further held that even if Apotex’s pleadings could be interpreted as also seeking unjust enrichment as a restitutionary remedy for a tort committed against it, such as misrepresentation or abuse of process, this was not a case in which the exceptional remedy of disgorgement would be available. Finally, the Court of Appeal noted that remedial unjust enrichment is an exceptional remedy that should not be invoked unless other available remedies are inadequate. In this case, it was held that section 8 of the PMNOC regulations allow generic drug manufacturers like Apotex to be made whole, as Lilly is obligated to pay Apotex for the profits Apotex would have earned had it not been wrongfully excluded from the market. Therefore, remedial unjust enrichment was not available to Apotex.

The Canada Trust Company v. Potomski, 2015 ONCA 324

[Pardu J.A. (In Chambers)]

R. J. Potomski, acting in person
J. Kukla, for the respondent

Keywords: Real Estate Law, Mortgages, Costs of Enforcement of Mortgage, Stay of Enforcement of Mortgage, Extension of Time to Perfect Appeal

This was a motion for a stay of enforcement of a writ of possession granted in a mortgage action and for an extension of time to perfect an appeal.

The appellant granted a mortgage to the respondent on January 20, 1992. Under the terms of the mortgage agreement, the respondent was entitled to recover costs associated with the mortgage, such as fees and disbursements incurred in enforcement proceedings, from the appellant.

On April 27, 2011, the appellant entered a mortgage renewal agreement with the respondent. This agreement provided that the “Property Tax Payment amount will be adjusted annually in accordance with our procedures”. These “procedures” permitted the respondent to increase or decrease the monthly Property Tax Payment in order to reimburse the respondent for amounts debited to the “Tax Account” for the appellant’s benefit. The Tax Account is an account on the respondent’s books in relation to the mortgage. Such adjustments would change the quantum of the appellant’s monthly mortgage payments.

Following the appellant’s November 2008 default, the respondent issued a notice of sale and eventually obtained summary judgment, including costs on a substantial indemnity basis. Although the respondent did not exercise its power of sale and the mortgage was ultimately renewed, a $13,278.20 deficit was added to the appellant’s Tax Account in July 2011. This was the amount claimed by the respondent for its costs on the summary judgment proceedings. The appellant’s monthly mortgage payments were increased to reflect the $13,278.20 costs award.

The appellant again defaulted on the mortgage on October 17, 2011.

In December 2011, after attempting to make a mortgage payment, the appellant was informed that the quantum of his monthly mortgage payment had increased by about 25%. After making multiple inquiries, he was told that his monthly payments had been increased to account for the $13,278.20 deficit in his Tax Account. The appellant claimed he did not know what liability the deficit represented.

The respondent brought a motion for summary judgment before Justice Platana seeking payment in the amount of $51,732.74 plus interest, possession of the mortgaged property, leave to obtain a writ of possession for the property, and post-judgment interest.

The appellant argued that he was not required to make his monthly mortgage payments because the respondent did not respond to his repeated inquiries into why the monthly amount had increased and what the deficit in the Tax Account represented.

Justice Platana found that this was not a defence to the appellant’s default. The mortgage agreement was clear that costs incurred by the respondent in enforcing the mortgage would be charged to the appellant. Justice Platana also found that there was “clear evidence” the appellant was aware of the $13,278.20 cost award against him and that this had not been paid. Justice Platana found the appellant was in default on the mortgage and granted the respondent’s motion for summary judgment on October 14, 2014.

The respondent obtained a writ of possession on March 29, 2015. The appellant brought a motion before the Divisional Court to stay the March 29, 2015 writ of possession. On April 15, 2015, Gates J. granted the stay on the following conditions: 1) that the appellant file a notice of appeal of the order of Platana J., dated October 14, 2014, with the Ontario Court of Appeal; 2) that the appellant perfect his appeal in the Court of Appeal immediately; 3) that the appellant pay the cost order granted by Platana J. immediately (in the amount of $14,132.90); and 4) that the appellant pay the costs of the motion before Gates J. immediately (in the amount of $4,234.02).

Justice Gates specified that execution of the writ of possession would only be stayed if the appellant fulfilled these obligations by 4:30 p.m. on May 4, 2015.

The appellant said he filed a notice of appeal with the Court of Appeal. He brought this motion to stay the orders of Platana J., or alternatively, to stay execution on the writ of possession. He also sought an extension of time to perfect his appeal. The appellant had not complied with two of the conditions set out by Justice Gates.

(1) Should the order of Justice Platana be stayed pending appeal?
(2) Should an extension of time to perfect the appeal be granted?

Motion dismissed.

(1) No. In order to stay an order pending an appeal the appellant must demonstrate that: 1) there is a serious issue to be tried; 2) he will suffer irreparable harm if the stay is not granted; and 3) the balance of convenience favors granting the stay. The appellant did not meet this threshold.

(2) No. The relevant factors in determining whether to grant an extension of time to perfect an appeal are: 1) whether the appellant had an intention to appeal within the relevant period; 2) the length of delay and the explanation for the delay; 3) any prejudice to the respondent; 4) the merits of the appeal and 5) whether the justice of the case requires granting an extension. The appellant did not meet this threshold.

Seif v. Toronto (City), 2015 ONCA 321

[Hoy A.C.J.O., van Rensburg and Brown JJ.A.]

D. A. Zuber and J.B. Tausendfreund, for the appellant
K. Franz, for the respondent

Keywords: Summary Judgment, Delay, Notice, Reasonable Excuse, Prejudice, Dissent

The appellant, Robin Seif, sued the respondent, the City of Toronto (the “City”), for damages arising from a “trip and fall”. She appeals the decision of the motion judge granting summary judgment, dismissing her claim against the City because the appellant did not have a reasonable excuse for her failure to give notice to the City within ten days of her injury.

(1) Did the motion judge err in law by failing to interpret “reasonable excuse” broadly and liberally and to consider all of the circumstances, including her relatively short four-month delay, her ignorance of the notice requirement, and her initial uncertainty as to the severity of her injuries?
(2) Does the appellant have a reasonable excuse for the delay in notice?
(3) Is the City prejudiced in its defence as a result of the delay?

Appeal allowed.

(1) Yes. The court concluded that the motion judge erred in his approach to determining whether or not the appellant had established a reasonable excuse for her delay. While the motion judge acknowledged that “reasonable excuse” is to be given a broad and liberal interpretation, he then narrowed his focus to whether the appellant’s delay was a result of her injury and whether she was capable of giving notice sooner.

(2) Yes. The test to be applied is whether, in all of the circumstances of the case, it was reasonable for the appellant not to give notice until she did. Interpreting “reasonable excuse” broadly and liberally, in all of the circumstances of this case, it was reasonable for the appellant not to give notice until she did. The appellant did not intend to sue the City at the outset because at first she did not think her injuries were serious. She followed a course of treatment. She decided to explore legal action only when she found out that she would suffer pain and limitations in her fractured wrist for the rest of her life. Once she decided to seek a legal remedy, she promptly retained counsel. Counsel immediately gave notice to the City.

(3) No. The majority of the court did not agree with Hoy A.C.J.O’s dissenting opinion that the motion judge’s summary dismissal of the action should be upheld on the basis that the appellant had failed to prove that the City would not be prejudiced in its defence by her delay in giving notice.

The majority was not satisfied that the respondent met its burden under Rule 20 to establish that there was no genuine issue requiring a trial on the issue of prejudice.

The City contended that, if the lip of the sidewalk that the appellant slipped on did not exceed two centimetres at the time of the incident, it may have a statutory defence to the claim. However, the City’s argument was that it did not have the opportunity to obtain a reliable measurement of the lip to counter the evidence due to the delay in notice.

Whether or not prejudice results from the failure to give timely notice is a fact-based inquiry. The appellant took photographs a few days after notice was given. She recalled seeing a “significant lip in the sidewalk” of at least one inch when she revisited the location of her fall a week after the accident. The City took measurements and photos before the area was repaired. The appellant provided the name and contact information of a witness, that the respondent attempted without success to contact, but only shortly before the motion. Evaluating this evidence would require, in part, an assessment of the appellant’s credibility and reliability, including weighing the evidence of her observations about the size of the lip of the sidewalk made a week after the accident against the City’s evidence that no problem with the sidewalk had been reported in its June 2011, annual inspection.

In addition to the existence of numerous material facts in dispute, the court also found that the record on the issue of prejudice was incomplete. There was no evidence at this stage about the climate conditions and precipitation, and how the interlocking bricks might have been affected, between the date of the accident and when notice was given in December 2011. In the absence of such evidence, it was not possible to know whether the inability to measure the area before the seasons changed would prejudice the City in its defence.

Dissent: [Hoy A.C.J.O]

Appeal dismissed

The motion judge did not go on to consider whether the appellant’s delay in giving notice prejudiced the City in its defence. It would have been preferable had he done so.

The onus of showing that there is no prejudice to the defendant as a result of the delay in giving notice rests on the plaintiff. Hoy A.C.J.O determined that the appellant had not established that the City was not in a materially worse evidentiary position than it would have been without the appellant’s delay. It did not have the opportunity to obtain a reliable measurement of the sidewalk lip to counter the evidence of the appellant and her husband.

King v 1416088 Ontario Ltd. (Danbury Industrial), 2015 ONCA 312

[Simmons, Gillese and Rouleau JJ.A]

R. G. Chapman, for the appellants
M.A. Fisher and B. A. Lecker, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Employment Standards Act, Pension, Common Employer

Jack King worked as an accountant for the Danbury group of companies from September 1973 to October 2011. In 1981 Mr. King entered into an agreement with the Danbury company that was his formal employer at the time. Under the terms of his agreement, he was entitled to retirement compensation of $736.60 per month, for life, so long as he continued to be employed with the company or its successors until he was 65. His employment was terminated without cause. When his employment was terminated, he was nearly 73 years old and was given no compensation for the wrongful termination. At the time of the termination, Mr. King’s formal employer was the appellant 1416088 Ontario Ltd., carrying on business as Danbury Industrial.

Mr. King sued various Danbury corporations for which he had worked over his career. The trial judge found that all of the appellant companies were Mr. King’s common employer, and so were jointly and severally liable for the monies owed to Mr. King. The trial judge held the pension agreement was valid and all the appellant companies were liable for benefits due under the agreement.

(1) Did the trial judge err in making his determinations?

Appeal dismissed with costs to the respondent fixed at $15,000, all inclusive.

(1) No, the appeal should be dismissed. The court held there was no error in the trial judge’s conclusion that there was a sufficient relationship among the appellant companies that they should be regarded as one for the purpose of liability for the wrongful termination of Mr. King’s employment. There was no dispute that the trial judge set out the applicable legal principles from Downtown Eatery (1993) Ltd. v Ontario and the trial judge made clear findings of fact that supported his conclusions.

The court rejected submissions related to s.4 of the Employment Standards Act, as the ESA issue was resolved prior to trial and formed no part of the judgment under appeal. Additionally, the court did not accept the appellant companies’ submission that the principles in Downtown Eatery were modified by s.4 of the ESA.

The court held that the fact that the appellant companies did not execute the pension agreement did not relieve them of liability. They were jointly and severally liable for the amounts owing.

Bienstock v Adenyo Inc., 2015 ONCA 310

[Simmons, Gillese and Rouleau JJ.A.]

A. L. W. D’Silva and A. Kreaden, for the appellants
R. Hosseini, for the respondent

Keywords: Civil Litigation, Summary Judgment, Conflict of Laws, Recognition and Enforcement of Foreign Judgments, Constructive Trust, Pro Swing Inc. v Elta Golf Inc.

The motion judge granted summary judgment to the respondent against the corporate appellants, permitting the respondent to enforce a Delaware judgment in excess of $3 million USD against the appellants in Ontario. In addition, based on a finding that a fraudulent transfer of assets to Adenyo Inc. had taken place, the Delaware judgment also imposed a constructive trust in favour of the respondent over the proceeds of sale of the assets of the corporate appellants until such time as the full amount owing under the judgment was paid by the corporate appellants. The appellants appealed from the portion of the summary judgment permitting the respondent to enforce the order for a constructive trust in Ontario

Appeal dismissed.

The motion judge’s reasons demonstrate that he was alive to the possibility that permitting the order for a constructive trust to be enforced in Ontario had the potential to impact on the rights of third parties. On the record before the motion judge, the possibility that the order for a constructive trust could be enforced in Ontario in a manner that is unfair or unjust to third parties was entirely speculative. There was no error in the motion judge’s consideration of the factors from Pro Swing Inc. v Elta Golf Inc., 2006 SCC 52.

Stafford v. Stafford, 2015 ONCA 306

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

J. A. Layne and Andrea Acri, for the applicant (appellant)
R. Parisé, for the respondent (respondent in appeal)

Keywords:   Family Law, Spousal Support, Bankruptcy and Insolvency Act

Facts: The trial judge recognized that the operation of the Bankruptcy and Insolvency Act could give rise to an inequity which “may” make an order as to post-retirement support appropriate. He also determined that the appellant’s entitlement to post-retirement support and the quantification of that entitlement, if any, was, in this case, best addressed by way of a review of the spousal support upon the respondent’s retirement when matters relevant to support (e.g. the parties’ means and needs) had crystallized.

Appeal dismissed.

Reasoning: The trial judge acknowledged and considered the controlling jurisprudence in Decaen v. Decaen, 2013 ONCA 218. Having regard to the age (early forties) of the parties at the time of the trial and the time-limited support order the trial judge had made at the end of the trial as part of his main disposition of the various issues raised by the parties, the Court saw no error in law or principle in the manner in which the trial judge exercised his discretion.

Hull v. Metropolitan Toronto Condominium Corporation No. 721, 2015 ONCA 307

[Simmons, Gillese and Rouleau JJ.A.]

M. A. Spears and M. J. Campbell, for the appellant
L. Nebel and V. Arman, for the respondents

Keywords:   Real Estate Law,  Condominium Act, 1998, ss. 134 and 135, Compliance Orders, Oppression, Failure to Provide Reasons

Facts: The appellant appealed from an order dismissing his application for relief under ss. 134 and 135 of the Condominium Act, 1998.

Holding: Appeal allowed. The application judge’s reasons were inadequate. The Court held that the application be remitted for a fresh hearing with costs of the initial hearing reserved to the judge on the new hearing.

Reasoning: The application judge’s reasons failed to reflect that he appreciated the issues raised on the application. Further, he failed to set out the right legal test for relief under s. 135 of the Condominium Act (the “Act”). The Act provides that a court may make an order “if the court determines that the conduct of an owner, [or] a corporation … is … oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant.” In this case, the application judge erred by failing to refer to the “unfairly disregards the interests of the applicant” branch of the test, which was central to the issues on the application.

While the application judge provided that there had been no breaches of the Act, he gave no basis for his conclusion. To reach this conclusion, the application judge would have had to have made findings of fact, and this would have necessitated resolving conflicts in the evidence, and this was not done.

The remedies under the Act are discretionary. Beyond expressing a conclusion, there was no indication in the application judge’s reasons as to how and on what basis he exercised any discretion.

Chaudry (Re), 2015 ONCA 317

[Gillese and Lauwers JJ.A. and Speyer J. (ad hoc)]

M. O’Bonsawin and B.W. Renshaw, for the appellant the Person in Charge of the Royal Ottawa Mental Health Centre – Member of the Royal Ottawa Health Care Group
M. Davies, for the respondent Baber Javed Chaudry
G. Choi, for the respondent Attorney General of Ontario

Keywords: Administrative Law, Mental Health, Ontario Review Board, Charter of Rights and Freedoms, s. 7, s. 24(1) Criminal Code, Appellate Jurisdiction, Procedural Fairness, Costs

In 2006, Baber Javed Chaudry (“Mr. Chaudry”) was found not criminally responsible on account of mental disorder in respect of two charges of assault and ordered detained within the secure forensic unit of the Royal Ottawa Mental Health Centre (the “Hospital”). As mandated by s. 672.81(1) of the Criminal Code, R.S.C. 1985, c. C-46, the Ontario Review Board (the “Board”) held annual hearings to review Mr. Chaudry’s detention.

Following a hearing on July 5, 2012, the Board made a disposition in which it ordered that Mr. Chaudry be detained within the Secure Forensic Assessment Unit of the Hospital, with privileges that included living in the community in Hospital approved accommodation. Mr. Chaudry was approved to live in the community with his mother and sister. Less than a month after that annual review hearing, Mr. Chaudry’s mental state had deteriorated and he had become threatening towards his mother. The Hospital issued a warrant of committal dated August 2, 2012, and asked for police assistance in having Mr. Chaudry returned to it. Mr. Chaudry was then re-admitted to the Hospital’s Secure Forensic Assessment Unit, where he remained for approximately two months before being released back into the community.

The Board held a restriction of liberty hearing. Through counsel, Mr. Chaudry brought an application within that proceeding, asking the Board to find that the Hospital had infringed his section 7 Charter rights by: (1) mishandling his re-admission; (2) failing to notify the Board of his restriction of liberty in a timely way; and (3) detaining him on a more secure ward than was necessary and failing to extend appropriate privileges during his hospitalisation. Counsel for Mr. Chaudry initially also sought an order that the Hospital pay the costs of his Charter application. However, at the outset of the Board hearing, Mr. Chaudry withdrew his request for costs.

Before the Board, the Hospital did not dispute that its failure to give timely notice of Mr. Chaudry’s restriction of liberty violated his s. 7 Charter rights. However, it submitted that it had already reviewed its procedures and taken the necessary steps to ensure that this problem would not repeated. Apart from this, the Hospital denied that Mr. Chaudry’s Charter rights had been infringed by its conduct.

The Board concluded that Mr. Chaudry’s s. 7 Charter rights had been breached because the last two weeks of his detention on the Secure Forensic Assessment Unit “did not represent the least onerous and least restrictive decision”. It was on the basis of this breach that the Board then ordered the Hospital to pay Mr. Chaudry $500 in costs.

(1) Did the Court of Appeal have jurisdiction to hear an appeal from the decision of the Board?
(2) Did the Board err in finding that Mr. Chaudry’s continued detention on the Secure Forensic Assessment Unit was not the least onerous and least restrictive disposition and was contrary to s. 7 of the Charter?
(3) Did the Board have jurisdiction to award costs as a remedy under s. 24(1) of the Charter?
(4) Did the Board err in ordering costs against the Hospital on its own motion?

Appeal allowed.

(1) Yes. The Court of Appeal had jurisdiction to hear an appeal from a Board decision rendered after a restriction of liberty hearing. The Court’s jurisdiction to hear appeals in matters involving mental disorder comes from s. 672.72(1) of the Criminal Code (the “Code”). The Board’s amended decision fell within the statutory definition of “disposition” in s. 672.1(1) of the Code and the Court of Appeal therefore had jurisdiction to hear an appeal against it.

(2) Yes. The question for the Board was whether, in failing to give Mr. Chaudry the privileges associated with detention on the Forensic Rehabilitation unit during the last two weeks of his hospitalization, the Hospital breached the least onerous and least restrictive standard. The Court of Appeal held that the Board erred in concluded that it had breached this standard. It was not clear that the Board tested the Hospital’s decision against the least onerous and least restrictive standard. In any event, the Board’s finding was not supported by the evidence. The evidence demonstrated that, in establishing Mr. Chaudry’s privileges in the last two weeks of his hospitalization, the Hospital carefully considered and balanced Mr. Chaudry’s treatment needs with public safety concerns. The restrictions were no more than what was necessary to protect public safety.

(3) No. Given the statutory framework governing the Board, including its mandate, structure and functions, Parliament did not intend that the Board be empowered to order costs as a s. 24(1) remedy. Applying the two-step test articulated in R v Conway, 2010 SCC 22, the Court of Appeal concluded that introducing the potential for costs orders would detract from the Board’s ability to meet its statutory mandate and functions. The potential of a costs order would inevitably raise the stakes for the party facing the allegations, heighten the adversarial tenor of the proceedings, and prolong Board hearings. Consequently, if costs orders were available, hearings would likely become more adversarial and less inquisitorial, with a shift in focus away from the twin goals of public safety and the fair treatment of NCR accused persons. Furthermore, the statutory powers given to the Board provided it with a sufficient arsenal of remedies.

(4) Yes. The Board owed the Hospital a common law duty of procedural fairness in relation to the matter of costs. It breached that duty by making the costs order on its own motion, without giving the Hospital notice that it might be subject to such an order, and without giving the Hospital the opportunity to make submissions on the matter. The Hospital, for the purposes of the duty of procedural fairness analysis, is a person whose rights or interests were affected by the Board decision. The costs order was a significant decision and, as it adversely affects the Hospital’s interests, the Hospital would have legitimately expected to have been heard on the matter before the Board decided it.

Starz (Re), 2015 ONCA 318

[Gillese and Lauwers JJ.A. and Speyer J. (ad hoc)]

G. M. Starz, appearing in person
J. R. Presser and B. Saad, appearing as amicus curiae
J. Blackburn, for the respondent, the Person in Charge of the Centre for Addiction and Mental Health
G. Choi, for the respondent, the Attorney General of Ontario

Keywords:   Administrative Law, Mental Health, Ontario Review Board, Annual Review Requirements, Canadian Charter of Rights and Freedoms, Section 7, Charter Remedies

In September 2008, the appellant, Glen Michael Starz (“Mr. Starz”), was found not criminally responsible (“NCR”) on account of mental disorder in relation to charges arising from an assault of an elderly woman on a streetcar. As a result, Mr. Starz was placed under the jurisdiction of the Ontario Review Board (the “Board”).

In 2011, the Board granted Mr. Starz a conditional discharge (“2011 Disposition”).  The conditions of his discharge required him to reside at a fixed address in Toronto, report to the Centre for Addiction and Mental Health (“CAMH”) weekly, and abstain from the non-medical use of alcohol and drugs.

Mr. Starz’s 2011 Disposition was not reviewed again until April 2013 – four months past the annual deadline mandated by subsection 678.12(1) of the Criminal Code (the “Code”). The Board again ordered that Mr. Starz be conditionally discharged (“2012 Disposition”). The conditions were largely the same, but slightly less onerous.

When it became evident that the Board would be late in hearing the 2012 Disposition, Mr. Starz brought an application to the Board in which he alleged that the delay violated his rights under s. 7 of the Charter.  He asked that the Board order costs, damages and declaratory relief, pursuant to s. 24(1) of the Charter. Mr. Starz’s Charter application was meant to be heard during the 2012 Disposition but, due to scheduling difficulties, was not heard until the summer of 2013.  The Board dismissed the Charter application, holding that Mr. Starz’s Charter rights had not been breached and that it had no jurisdiction to grant the relief that he sought (the “Charter Decision”).

Mr. Starz then appealed both the 2012 Disposition and the Charter Decision.  After his 2013 annual review, Mr. Starz abandoned his appeal against the 2012 Disposition, but continued to pursue his appeal against the Charter Decision. The Attorney General raised questions about this court’s jurisdiction to hear an appeal from the Charter Decision without also hearing an appeal from a disposition. In response, Mr. Starz, with the aid of amicus curaie, resurrected his appeal against the 2012 Disposition for the limited purpose of determining jurisdictional issues arising from the Board hearing and deciding his annual review separately from his Charter application.

(1) Does the Board have jurisdiction to hear a Charter application separately from the annual disposition review with which it is associated?
(2) If the Board renders a decision on a Charter application separately from an annual review disposition, is there a right of appeal to this court from the Charter decision?
(3) Is a delay in hearing an annual disposition review a breach of an NCR accused person’s s. 7 Charter rights? (4) Must the Board use an inquisitorial process when it hears a Charter application?
(5) What remedies are available to the Board in the event that it finds a breach of an NCR accused person’s Charter rights?

Appeal dismissed.

(1) We do not accept that because the Board issued the 2012 Disposition prior to hearing the Charter application, it lost jurisdiction over the latter.  In the circumstances of this case, both the 2012 Disposition and the Charter Decision were heard together over the course of two days. Both were originally scheduled to be heard on the same day, but because the hearing of the 2012 annual review took the whole day, the Charter application had to be put over.  The same panel of the Board remained seized and it took into consideration evidence that it had heard during the first day of the annual review. Had the Board waited until it could release the 2012 Disposition and the Charter Decision simultaneously, Mr. Starz would have had to wait an additional four months to receive the 2012 Disposition, which relaxed his conditions, albeit minimally.  Thus, Mr. Starz was not prejudiced by the bifurcation of the hearing – he benefitted from it.

(2) Given the Court’s conclusion on issue #1, it need not decide this issue, as the appeal is properly before this Court.

(3) Not every delay in holding an annual review hearing within the statutory timeline will result in a finding that the NCR accused person’s s. 7 Charter rights have been breached.  Where the Board grants a conditional discharge to an NCR accused person, its liberty rights under s. 7 rights will not be violated if the least onerous and restrictive conditions are imposed that are consistent with public safety, the accused’s mental condition and other needs, and his or her eventual reintegration into society. Although Mr. Starz was required to abide by the slightly more onerous conditions imposed under the 2011 Disposition, the liberty infringement was insignificant. The Board did not err in finding that Mr. Starz’s frustration and humiliation over being unable to drink alcohol socially did not have a serious or profound effect on Mr. Starz’s psychological integrity. Further, the 12-month timeline within which the Board must review cases under its jurisdiction is not a principle of fundamental justice.

(4) No. The fact that the Charter application is brought within the context of the Board does not alter the legal framework applicable to Charter applications – the onus is on the Charter claimant to prove its case. To the extent that there is a concern about an unrepresented NCR accused person having the burden to prove a Charter claim, without the help of an inquisitorial Board, this can be addressed through s. 672.5 of the Criminal Code, which gives the accused person the right to be represented by counsel and also requires the Board to assign counsel to act for the accused person “wherever the interests of justice so require”.  Furthermore, where counsel is assigned by the Board and the accused does not receive legal aid, the Attorney General must pay counsel’s fees and disbursements to the extent the accused cannot pay.

(5) The Board did not err in finding that it did not have the authority to grant the remedies of costs, damages and declaratory relief. In the companion case of Chaudry (Re), 2015 ONCA 317, this Court concluded that the Board did not have jurisdiction to award costs. The same principles apply to the Board’s lack of jurisdiction to award damages and declaratory relief. The Board has a wide range of statutory powers at its disposal to address Charter infringements, such as the ability to: (1) redress any aspect of a conditional discharge that does not meet the least onerous and least restrictive standard; and (2) provide hospitals with guidance on their obligations under the Criminal Code and Charter. Furthermore, the Board’s power to make orders also provides it with an effective and flexible remedy to redress a Charter breach.  This case provides a good example of this power and its utility as a remedy.  In the 2012 Disposition, the Board ordered that Mr. Starz’s 2013 annual review hearing was to be held within 8 months of the delayed 2012 hearing.  This exercise of the Board’s statutory powers had the effect of putting Mr. Starz back on the review schedule that he would have been on, absent the delay.

Sheridan v Ontario, 2015 ONCA 303

[Juriansz, MacFarland and Lauwers JJ.A]

M. Manning, Q.C., and T. R. Simone, for the appellant
W. Manuel and K. Smith, for the respondents
N. Groot, for the respondent, Nicole Lewis

Keywords: Endorsement, Torts, Malicious Prosecution, Negligent Investigation, Deceit, Conspiracy, Abuse of Process, Intentional Infliction of Mental Suffering, Breach of Privacy, Charter of Rights and Freedoms, sections 7, 9, 10(a) and 11(a), , Ontario Provincial Police, Motion to Strike, No Reasonable Cause of Action, Abuse of Process, Refusal of Leave to Amend, Admissibility of Evidence, Reasons for Judgment in Related Proceedings

The parties are employed by the Ontario Provincial Police. The appellant was married to the respondent Sheridan from 2002-2010. In the late 2010, in the midst of marital strife, Sheridan complained to the OPP about her husband’s conduct. As a result of her complaint, the appellant was charged with two counts of assault and one count of threatening death. During the course of the investigation, Sheridan made a false statement under oath to the investigating officer Raymond. Three weeks after giving the statement, Sheridan called Raymond and told her that a portion of her statement was untrue. Raymond did not disclose the change in statement to anyone. At the appellant’s criminal trial it was exposed that Sheridan, the complainant, lied in her statement to police, had told the investigating officer that she lied and neither of these facts were disclosed to the defence or prosecution.  The prosecutor advised the court there was no reasonable prospect of conviction and a peace bond was imposed.

On the basis of these facts the appellant commenced a civil action against the respondents asserting various causes of action including deceit, conspiracy, negligence, negligent investigation, false arrest, malicious prosecution, breach of privacy, abuse of process and intentional infliction of mental suffering. He also sought declaratory relief for the infringements of his rights under s. 7, 9, 10(a) and 11(a) of the Canadian Charter of Rights and Freedoms. The respondent police officers moved to strike out the statement of claim and to dismiss the action for failing to disclose a reasonable cause of action or as an abuse of process.

The motion judge concluded none of the causes of action asserted against the moving OPP respondents had any chance of success save for the claim of abuse of process against Raymond, and the claims of deceit and conspiracy against Lewis. The appellant and the respondent, Raymond, by way of cross-appeal, appeal these findings.

(1) Did the motion judge err in his findings?

Appeal dismissed and the cross-appeal of the respondent Raymond is allowed.

(1) The admissibility of the transcript of the reasons given by the trial judge at the time the peace bond was imposed was an issue before the motion judge. He concluded the criminal court’s reasons and disposition were matters of material fact and formed an integral part of the plaintiff’s claim. The court agreed with this conclusion and found no error in the motion judge’s decision to admit the reasons and disposition of the judge who determined the criminal proceedings. The court agreed with the motion judge that the outcome of the criminal trial was unfavourable to the appellant as the peace bond was imposed despite the appellant’s strenuous objection. The result is that the appellant could not, as a matter of law, make out his claims for malicious prosecution and negligent investigation. His claims that the proceedings against him were instituted without reasonable cause and his breach of Charter rights claims therefore also must fail. The court agreed with the motion judge and held that with the exception of Raymond, none of the claims could be made out.

In regards to the cross-appeal, the court did not agree with the motion judge that the claims against Raymond should be dismissed. The motion judge was not correct in finding that the allegations against officer Raymond for failure to disclose could form the basis of a separate cause of action when he had concluded that the claims of malicious prosecution and negligent investigation could not succeed against all the OPP defendants.

The court saw no error in the motion judge’s exercise of discretion to refuse leave to amend the portion of the appellant’s pleadings that were struck out. The costs awarded were reasonable and the court declined to interfere.

Armstrong (Re), 2015 ONCA 326

[Feldman, Pardu and Brown JJ.A.]

A. Szigeti, for the appellant
M. Wit, for the respondent, Person in Charge of Ontario Shores Centre for Mental Health Sciences
F. Au, for the respondent, Attorney General for Ontario

Keywords: Endorsement, Administrative Law, Mental Health, Judicial Review, Ontario Review Board

Facts: The appellant appealed the disposition of the Ontario Review Board (the “Board”), dated June 27, 2014, in which it decided not to transfer him from the Medium Secure Unit to the General Unit. The appellant argued that this decision was unreasonable, because he had no violent incidents and had made some progress over the past year.  The appellant also submitted that the Board erred in finding that he had refused treatment and had made no progress.

(1) Was the Board’s decision not to transfer the appellant to the General Unit unreasonable?

The appeal was dismissed, and no costs were awarded to either party.

(1) No. The Board’s findings were reasonable and based on the evidence. Therefore, its decision was not unreasonable. Specifically, the evidence showed the appellant attended programs, but refused to cooperate.

The appellant also argued that the Board failed to recognize a treatment impasse. It was held that since the appellant’s next annual review is scheduled for June 2015, the Board will assess at that time whether the appellant has made progress, whether the diagnosis needs to be revisited, and whether there is an impasse that merits an independent assessment.

Hoang v. Mann Engineering Ltd., 2015 ONCA 300

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

K.M. Hoang, appearing in-person
J. C. Hopkins and J. Tetreault, for the respondents (defendants)

Keywords: Endorsement, Employment Law, Wrongful Dismissal, Just Cause,, Employment Standards Act

Facts: This appeal challenged factual findings of the trial judge.

(1) Was the employment relationship governed by an April 21, 2011 offer letter?

(2) Was there just cause for termination?

(3) Did a deduction of $6,250 run afoul of s. 13 of the Employment Standards Act?

Appeal allowed, in part

(1) No. The appellant asserted that the employment relationship was governed by an April 21, 2011 offer letter. The trial judge rejected this argument. She found that the appellant did not accept the terms of the offer letter meaning there was no “amended employment contract” and that the earlier mutual agreement was the only operative contract of employment. These findings were justified on the trial record.

(2) No. The appellant challenged the finding of just cause for termination. On the trial judge’s findings, the appellant’s dismissal was fully justified. On the trial judge’s findings, the appellant repeatedly conducted himself in a manner which rendered his continued employment a virtual impossibility. Once again, those findings were justified on the evidence.

(3) Yes. The appellant had a valid point in respect of the $6,250. The respondent purported to deduct that amount from the final payment made to the appellant. The court was satisfied that the respondent treated this as a deduction from wages. In doing so, the respondent ran afoul of s. 13 of the Employment Standards Act.

Brown v. University of Windsor, 2015 ONCA 311

[Simmons, Gillese and Rouleau JJ.A.]

J. A. Renaud and M. R. Todd, for the appellant
M.J. Kennedy, for the respondent, The University of Windsor
J. Cheng, for the respondent, Attorney General of Canada

Keywords: Endorsement, Civil Procedure, Adding Party

Facts: The appellant appeals from an order dismissing his motion to add the Attorney General of Canada as a party defendant to a pending action against the University of Windsor relating to the sharing of employment insurance premium reductions. The appellant proposed to assert three causes of action against the added defendant: breach of fiduciary duty; breach of trust; and negligence.

(1) Did the motion judge err in not adding the Attorney General of Canada as a party to the action?

Appeal dismissed.

(1) No.  The court concluded that the motion judge set out the correct test for determining whether a party may be added to an action. He also identified the proper elements of each cause of action the appellant proposed to assert and analyzed in relation to each whether the appellant had pleaded a tenable cause of action.

Growmark Inc. v. Clark (Hamland Farms), 2015 ONCA 308

[Simmons, Gillese and Rouleau JJ.A.]

D. R. Good, for the appellant
J. M. Skinner, for the respondent

Keywords:   Endorsement

Facts: Counsel for the appellant did not attend.

Holding: Appeal dismissed as abandoned. Costs to the respondent on a partial indemnity scale fixed in the amount of $7,500

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