Hello All,

Topics covered by the Court of Appeal this week in its civil decisions included franchise law (duty of disclosure), employment law (WSIB and wrongful dismissal of dependent contractors), insolvency (statutory privilege of documents), debtor-creditor (capacity to execute guarantees), MVA (liability of automobile lessors), family law (property claims of unmarried common law spouses), contracts (interpretation and specific performance), and motions to strike for no reasonable cause of action (a claim by a lawyer against the Law Society and a securities class action).

Enjoy your weekend.

John Polyzogopoulos

Blaney McMurtry LLP
Tel: 416.593.2953

Table of Contents

Civil Decisions

Fleming v. Massey, 2016 ONCA 70

Keywords: Employment Law, Insurance, Workers’ Compensation, Workplace Safety and Insurance Act, Definition of Employee, Waiver of Statutory Rights, Enforceability, Public Policy

U.S. Steel Canada Inc. (Re), 2016 ONCA 68

Keywords: Bankruptcy and Insolvency, Companies’ Creditors Arrangement Act, Investment Canada Act, s.36, s.36(4)(b), s.36(5), Statutory Privilege, Settlement Privilege

2256306 Ontario Inc. v. Dakin News Systems Inc., 2016 ONCA 74

Keywords: Contract Law, Franchise Agreements, Rescission, Arthur Wishart Act, Summary Judgment, Procedural Fairness, Right to be Heard

Conway v. The Law Society of Upper Canada, 2016 ONCA 72

Keywords:   Torts, Misfeasance in Public Office, Regulation of Professions, Lawyers, Civil Procedure, Motion to Strike, No Reasonable Cause of Action, Leave to Amend, Plain and Obvious Test

Keenan v. Canac Kitchens Ltd., 2016 ONCA 79

Keywords: Employment Law, Reasonable Notice of Termination, Dependent vs. Independent Contractors, Exclusivity of Work, Lowndes v. Summit Ford Sales

Royal Bank of Canada v. FTVRB2 Inc., 2016 ONCA 73

Keywords: Debtor-Creditor, Guarantees, Capacity, Non-Est Factum, Summary Judgement, Onus of Proof

Graham v. Lemay, 2016 ONCA 55

Keywords:   Torts, Negligence, Motor Vehicle Accidents, Negligent Entrustment, Duty of Care, Proximity, Highway Traffic Act, s.192(2),  Insurance Law, Ownership of Motor Vehicle, Lessor, Insurance Act, s. 267.12(1), Unnamed Insured, Summary Judgment

Junker v. Hughes, 2016 ONCA 81

Keywords: Family Law, Common Law Spouses, Property, Constructive Trusts, Joint Family Venture, Kerr v. Baranow, Evidence, Financial Disclosure, Retroactive Child Support, Res Judicata

Farkas v. Bedic, 2016 ONCA 82

Keywords: Family Law, Common Law Spouses, Property, Resulting Trusts, Pecore v Pecore, Constructive Trusts, Kerr v Baranow, Joint Family Venture

Flintoff v. Crown William Mining Corporation, 2016 ONCA 86

Keywords: Contract Law, Contract Interpretation, Standard of Review, Palpable and Overriding Error, Sattva

Locking v. McCowan, 2016 ONCA 88

Keywords: Securities Law, Class Actions, Investment Losses, Breach of Trust, Breach of Fiduciary Duty, Knowing Assistance, Civil Procedure, Class Proceedings Act s.5(1)(a), Motion to Strike, No Reasonable Cause of Action

For a list of Civil Law Endorsements, click here

For a list of Criminal and Capacity decisions, click here

Civil Decisions

Fleming v. Massey, 2016 ONCA 70

[Feldman, Juriansz and Brown JJ.A.]


Paul J. Pape and Joanna Nairn, for the appellant

Susan Guzzo and Katarina Germani, for the respondents


The respondents Lombardy Karting and the National Capital Kart Club held a go cart event.  The race required a race director, the appellant Derek Fleming filled the position.  Mr. Massey was driving a go kart and crashed into some hay, leaving Mr. Fleming injured. The respondents argued that Fleming had signed a waiver releasing the respondents from liability for all damages associated with participation in the event.

The appellant main submission is that the waiver was void because it violated public policy, as the appellant was an employee.  The motion judge ruled that the appellant was not an employee, more of a volunteer and that he should have had an idea of what he was signing when he signed the waiver.


Did the motion judge err in finding that the appellant was not an employee? Did the motion judge err in finding that the appellant understood the effect of the waiver when he signed it?

Holding: Appeal Allowed.


The court agreed with the appellant that the motion judge erred in finding that the appellant was not an employee.  On discovery, the representative from National Capital Kart Club admitted that the appellant was an employee on the day of the accident.

The court had to consider whether the waiver signed by the appellant was void by the public policy of the Workplace Safety and Insurance Act because he signed it as an employee.  The court relied on the decision in Ontario (Human Rights Commission) v. Etobicoke that said “an agreement between an employer and employee whereby the latter agrees to waive a statutory duty imposed on the former in the interests of safety is generally not binding on the employee”. The Act provides workers with certain statutory rights of action for damages that abrogate some of the common law doctrines that restricted a worker’s right to recover.  Section16 in the Act did address the subject of waivers.  Section16 states “An agreement between a worker and his or her employer to waive or to forego any benefit to which the worker or his or her survivors are or may become entitled under the insurance plan is void.” After reading the WSIA as a whole, it was apparent its objective is to ensure injured workers have access to compensation.

U.S. Steel Canada Inc. (Re), 2016 ONCA 68

[Hoy A.C.J.O., Blair and Lauwers JJ.A.]


Andrew Hatnay and Adrian Scotchmer, for the appellants Non-USW Active Salaried Employees and Non-USW Salaried Retirees

Kristian Borg-Olivier, for the appellants USW and USW Local 1005

Michael Kovacevic, for the appellant City of Hamilton

Michael E. Barrack and John Mather, for the respondent United States Steel Corporation

Sharon Kour, for the respondent U.S. Steel Canada Inc.

John L. Syme, Joseph Cheng and Jacqueline Dais-Visca, for the respondent Attorney General of Canada

Jonathan G. Bell, for the respondent Ernst & Young Inc. (the Monitor)

Peter D. Ruby, for the Superintendent of Financial Services (Ontario)


This appeal concerned the scope of privilege in section 36 of the Investment Canada Act (“ICA”) with respect to information obtained by a Minister or an officer or employee of Her Majesty in the course of the administration and enforcement of the ICA.

U.S. Steel Canada Inc. (“USSC”) was subject to protection under the Companies’ Creditors Arrangement Act (the “CCAA”). Certain CCAA stakeholders brought a motion for disclosure of the contents of a settlement agreement arrived at during litigation to enforce the ICA (the “Settlement Agreement”). The Settlement Agreement was entered into by USSC, its American parent, United States Steel Corporation (“USS”), and the Attorney General of Canada (“AGC”).

The CCAA judge considered whether section 36 of the ICA barred this disclosure and concluded that the Settlement Agreement was privileged in its entirety under that section of the ICA. Thus, he did not consider whether the Settlement Agreement was protected by common law settlement privilege. He dismissed the motion of four key stakeholders seeking production of the Settlement Agreement, who now appeal the dismissal of their motion.


(1) Does section 36 of the ICA prohibit USSC/USS from disclosing the Settlement Agreement?

(2) Does the common law protect the Settlement Agreement from disclosure on the grounds of privilege?


(1) No – Appeal Allowed

(2) Issue remitted to the CCAA judge.


(1) No.  Initially, the court considered whether the CCAA judge erred in concluding that “information” in section 36 of the ICA includes “undertakings” given in enforcement proceedings. The court rejected the appellants’ submission that the undertakings in the Settlement Agreement were not privileged under section 36 of the ICA. Instead, the court agreed with the CCAA judge’s conclusion that Parliament intended “information” to include undertakings set out in a document given to the Minister. Similarly, the CCAA judge correctly found that “written undertaking” in section 36(4)(b) defines the location of the privileged information and does not define the scope of “information” for the purposes of section 36. This section thus does not make it clear that undertakings are not information for the purposes of section 36.

Nonetheless, the exception to the privilege regime in section 36(4)(b) applied to USSC and USS such that they were not prohibited from disclosing the Settlement Agreement. “Written undertaking” in s. 36(4)(b) meant the Settlement Agreement. Notably, the court rejected USS’s arguments that case law supported its position that s. 36(5) also excepted the supplier of the information, and that restricting s. 36(5) to the persons specifically named therein rendered the section meaningless.

(2) Not decided.  The Court noted that promoting settlement contributes to the effective administration of justice and that, while settlement privilege creates a presumption of inadmissibility with respect to settlement negotiations, exceptions are found “when the justice of the case requires it”. The party seeking to override the settlement privilege must show that there is a competing public interest that outweighs the public interest in securing settlement.

The appellants argued that they demonstrated a competing public interest in favour of disclosure that outweighed the public interest in encouraging settlement, whereas the respondents submitted that the court should return the issue of whether production of the Settlement Agreement and its contents is barred by common law settlement privilege back to the CCAA judge for determination. The court reasoned that because neither it nor the CCAA judge was provided a copy of the Settlement Agreement, there was no review or evaluation as to whether there was a competing public interest in disclosure that outweighed the public interest in settlement. Thus, the issue of settlement privilege was remitted to the CCAA judge for determination.

2256306 Ontario Inc. v. Dakin News Systems Inc., 2016 ONCA 74

[Weiler, LaForme and Huscroft JJ.A.]


Harjaap Mann, for the appellants

Michael Fleischmann, for the respondents


The respondents purchased a news kiosk, International News, from a franchisee of the appellants in February 2011. The appellants advised the parties that there would be a $10,000 transfer fee before consenting to the sale but the parties went ahead with the sale regardless and the respondents paid royalties to the appellants and took over the kiosk. The respondents operated without interruption but did not enter into a franchise agreement with the appellants until October, 2012.

In August, 2013, the respondents tried to rescind the franchise agreement because of the appellants’ alleged failure to provide disclosure as required under the Arthur Wishart Act. The appellants argued they were exempt from disclosure and both parties brought a motion for summary judgment. The motion judge found that the exemption provisions under the Act did not apply because the franchise agreement executed by the respondents was a new agreement between different parties, so the obligation to disclose arose at the time that the new agreement was executed.


Were the appellants denied a fair hearing by the motion judge because they were not heard on the respondents’ cross-motion?

Holding: Appeal dismissed.


No. The court acknowledged that the motion judge’s remarks did create an expectation that there would be further argument on the respondents’ cross-motion if the appellants were unsuccessful on their motion for summary judgment. However, the issues on the motion and cross-motion were intrinsically connected and all of the relevant material was before the court when the appellants’ motion was argued.

The motion judge’s findings of fact were supported by the record and there was no basis for the court to interfere with them. In the circumstances, summary judgment in favour of the respondents was inevitable. As a result, the motion judge’s decision to deal with both the motion and cross-motion without further argument did not result in any prejudice to the appellants.

Conway v. The Law Society of Upper Canada, 2016 ONCA 72

[Weiler, van Rensburg and Roberts JJ.A.]


David Robert Conway, in person

Brendan van Niejenhuis, for the respondent


The appellant appealed from the dismissal of his action against the The Law Society of Upper Canada (“the LSUC”) following a motion to strike the appellant’s statement of claim as disclosing no reasonable cause of action and as being frivolous, vexatious and an abuse of process. The appellant’s dispute with the LSUC has a long history stretching back to his first administrative suspension in June 2000 for his failure to pay transaction levies, and involves a myriad of different civil, disciplinary and bankruptcy proceedings that form the basis for his claims against the LSUC. The appellant settled the civil and trustee proceedings with the LSUC and entered into releases and consent judgments. In the present action, the appellant complains that he has been the subject of relentless and inequitable targeting, abuse of process and denial of due process by the LSUC in numerous proceedings.


(1) Did the motion judge err in striking out the appellant’s statement of claim in its entirety?

(2) Did the motion judge err in determining that the appellant should not be granted leave to amend his statement of claim?

Holding: Appeal allowed to grant the appellant leave to serve and file, within 60 days, a fresh as amended statement of claim to plead with proper particulars a tenable cause of action against the LSUC based on the tort of misfeasance in public office arising out of its alleged bad faith conduct in relation to the appellant. Otherwise, the appeal is dismissed.


(1) No, the motion judge did not err as his reasoning and conclusions that the various individual acts by the LSUC were incapable of giving rise individually to any viable cause of action in the manner as pleaded by the appellant. The motion judge correctly struck out the factual claims as scandalous, frivolous and vexatious.  The claims against the LSUC in relation to the civil and trustee proceedings that the appellant was seeking to re-litigate in the present action were also correctly struck out as an abuse of process.

(2) Yes, the appellant should have been granted leave to properly plead the tort of misfeasance in public office. Taking all of the appellant’s factual allegations as true, and reading the essence of his pleading as a claim for misfeasance in public office, it was not plain and obvious that a proper pleading of a reasonable cause of action founded on the alleged bad faith conduct against the LSUC would fail. However, the appellant’s current pleading was woefully deficient. The appellant did not plead any of the requisite elements of any viable cause of action based on alleged bad faith conduct that may deprive the LSUC of its statutory immunity, nor with any precision the particulars that support these allegations, as required under the Rules of Civil Procedure. The LSUC is entitled to know with particularity the case that it has to meet.

Keenan v. Canac Kitchens Ltd., 2016 ONCA 79

[Gillese, MacFarland and van Rensburg JJ.A.]


Paul Boshyk, for the appellant

Bram A. Lecker and Matthew A. Fisher, for the respondents


Lawrence Keenan began working for Canac Kitchens Ltd., a division of Kohler Canada Co., in 1976. Canac was a manufacturer and distributor of kitchen cabinets.  For the first six years of his employment he worked as an installer of kitchen cabinets, and in 1983, he became a foreman for the company.  His wife began to work for the company in 1983 as a foreman as well.

The Keenan’s relationship with Canac ended in 2009.  Canac was closing its operations and no longer needed their services.  Canac gave the Keenans no notice, no payment in lieu of notice and none of the statutory entitlements.

Canac claimed that the Keenans were independent contractors, thus they were not entitled to any of the statutory entitlements upon termination.  Each of them had worked for the company for a few years before being told in 1987 that they would carry on their work as contractors.

Shortly after 1987, Canac presented the Keenans with a draft agreement, which reflected the new arrangements whereby they became sub-contractors of Canac. Only Mrs. Keenan signed. Upon their termination, the Keenans brought an action against Canac.

At trial, the judge found that the Keenans were in fact economically dependent on Canac due to the fact that they worked exclusively for Canac.  Having found that they were dependent contractors, they were entitled to reasonable notice on termination.  Canac appealed the decision.


Did the trial judge err in:

(1) finding that the Keenans were dependent – rather than independent –

contractors; and

(2) awarding the Keenans 26 months of notice.

Holding: Appeal Dismissed.


(1) The court held that the trial judge’s decision was correct with regards to this submission. A determination of exclusivity must take into account a full history of the relationship. The court ruled that due to the fact that the Keenans worked exclusively with Canac, the trial judge’s finding that the Keenans were dependent was appropriate.

(2) The court made it clear that in reliance on the decision of Lowndes v. Summit Ford Sales, reasonable notice is case specific and only exceptional circumstances will support a notice period in excess of 24 months. The court held that given the Keenans’ age and length of service, and the character of the positions they held, it would not interfere with the award of 26 months.

Royal Bank of Canada v. FTVRB2 Inc., 2016 ONCA 73

[Gillese, MacFarland and van Rensburg JJ.A.]


Joseph Kary, for the appellant, Janice Oliver Goldman

Rachel Moses, for the respondent RBC


The appellant, Ms. Goldman, appealed the motion judge’s decision to grant summary judgment in favour of the respondent, RBC, on the basis of certain guarantees signed by the Ms. Goldman. There was no issue that Ms. Goldman signed the guarantees nor was there any question that the loans which are the subject of the guarantees are in default.

The issue relates to Ms. Goldman’s capacity to enter into the guarantees, which was first raised in November, 2013 on a receivership motion by RBC in relation to the three companies and the debts that underlie the guarantees that are the subject of the appeal. The motion judge held that no material was filed on the issue of capacity. The issue was raised again in July, 2013 where it was noted in the motion judge’s decision that no steps had been taken to determine the issue of capacity. The motion for summary judgment was heard on May 15, 2015, at which time Ms. Goldman’s lawyer sought an adjournment on the basis his client lacked capacity. The adjournment was not granted and the motion judge proceeded to hear the motion.


(1)  Did the motion judge err in proceeding with RBC’s motion for summary judgment in the face of “clear” evidence that Ms. Goldman lacked capacity?

(2) Did using the loan money for a purpose other than the purpose for which it was advanced constitute a material change that released Ms. Goldman from the guarantees?

 Holding: Appeal dismissed.


(1) No. Ms. Goldman’s lawyer filed two affidavits having to do with his client’s capacity. An affidavit from Ms. Goldman’s son that offered hearsay evidence that his mother has been diagnosed with dementia and early stage Alzheimer’s. He also offered his own observations of his mother’s conduct and attached medical records and a letter from a physician. Nothing in the letter said anything about lack of capacity. The second affidavit was from a former co-worker of Ms. Goldman who spoke to her forgetfulness.  However, she was not qualified to make a diagnosis of lack of capacity.

The onus is on anyone alleging lack of capacity to prove it. There was no evidence before the motion judge to support a finding that Ms. Goldman lacked capacity.

(2) No. The court did not accept Ms. Goldman’s argument that because the corporation used the loan money advanced by RBC for a reason other than for which it was advanced, that this constituted a material change to the loan arrangement that would, absent Ms. Goldman’s consent, release her from the guarantees.

The evidence showed that RBC advanced the loan money as it was directed by the principal of the three companies, Ms. Godman’s son. This was a “continuing all accounts” guarantee for which the purpose is to allow the customer and the lender to change their business arrangements without having to involve the guarantor.

The motion judge correctly found that non est factum did not apply on the basis that Ms. Goldman was an intelligent woman who had previously guaranteed her son’s companies’ loan arrangements and was given the opportunity to solicit independent legal advice. There was no basis on the evidence that Ms. Goldman was unduly influenced. Finally, in response to the argument that because RBC did not fully advance the loan monies, Ms. Goldman was not obligated to RBC, there was no requirement that the monies be fully advanced before she became obligated to RBC. This was an all accounts continuing guarantee.

Graham v. Lemay, 2016 ONCA 55

[Gillese, Pepall and Lauwers JJ.A.]


William J. Sammon, for the appellants/respondents by way of cross-appeal

David A. Zuber, for the respondents Daimler Chrysler Financial Services Canada Inc. and CorePointe Insurance Company

W.S. Chalmers, for the respondent/appellant by way of cross-appeal, Chrysler Canada Inc.


The appellant Jodi Graham (“Jodi”) was a passenger in a motor vehicle and suffered serious injuries as a result of a collision with a motor vehicle driven by Mario Pietrantonio (“Pietrantonio”). The Pietrantonio vehicle had been leased. In the lease, Daimler Financial Services Canada Inc. (“Daimler Financial”) was described as the lessor. At the time of the accident, Chrysler Canada Inc. (“Chrysler”) was the beneficial owner of the Pietrantonio vehicle.

Pietrantonio was a co-owner along with his father Luciano (“Luciano”) of West End Tile Limited (“West End”). The lessees of the Pietrantonio vehicle, West End and Luciano, carried $2 million in third-party liability insurance. West End and Luciano leased the Dodge Durango vehicle pursuant to a lease with Daimler Financial, who was the registered owner of the Pietrantonio vehicle. Daimler Financial carried a standard lessors’ contingent automobile policy of insurance and a standard excess insurance policy that provided $10 million of coverage. The policies were issued by the respondent CorePointe Insurance Company. Both policies stated that coverage extended only to the named insured, Daimler Financial, and excluded coverage for any lessee or employee of a lessee. Furthermore, coverage was available only if the lessee’s insurance was not collectible.  According to the appellants, Jodi’s damages will significantly exceed the limits of the third-party liability insurance carried on the two vehicles.

The appellants commenced an action against various parties, including Daimler Financial and Chrysler, both of whom were respondents on the appeal.  Both the respondents and the appellants moved for summary judgment. On the motion for summary judgment, the judge granted two orders. The first order  provided that Chrysler was an owner of the vehicle driven by Mario within the meaning of s.192(2) of the Highway Traffic Act, and that Chrysler and Daimler Financial were lessors within the meaning of s. 267.12(1) of the Insurance Act and as such were entitled to a cap on liability. The appellants’ claims of negligent entrustment against Daimler Financial and another defendant, Capital Dodge, were dismissed. The second order was on consent, and provided that the appellants’ motion for summary judgment and a declaration that Mario was an unnamed insured entitled to coverage under Daimler Financial’s standard excess policy was dismissed. However, the appellants’ consent was without prejudice to the appellants’ right to appeal the consent dismissal on the basis that the decision in Xu v. Mitsui Sumitomo Insurance Company Limited (“Xu”) was wrongly decided or, in the alternative, did not apply to Daimler Financial if it was found not to be a lessor within the meaning of s. 267.12(1) of the Insurance Act.


(1) Was Chrysler correctly found to be an owner and vicariously liable for Mario’s alleged negligence pursuant to s. 192(2) of the Highway Traffic Act?

(2) Are Chrysler and Daimler Financial lessors within the meaning of s. 267.12(1) of the Insurance Act and entitled to the benefit of the cap on liability?

(3) Is Mario an unnamed insured under Daimler Financial’s standard excess policy?

(4) Was the claim of negligent entrustment against Daimler Financial properly dismissed?

Holding: Appeal and cross-appeal dismissed.


(1) Yes. The motions judge did not err in concluding that Chrysler was an owner for the purposes of s. 192(2) of the Highway Traffic Act. Chrysler admitted that it was the non-registered owner of the Pietrantonio vehicle. Moreover, its conduct was consistent with that admission in that it had claimed significant tax deductions in its capacity as owner. The agreements between Daimler Financial and Chrysler explicitly stated that Chrysler was the beneficial owner.

(2) Yes. The language of s. 267.12(1) of the Insurance Act, its legislative purpose, and the agreements between Chrysler and Daimler Financial all supported the motion judge’s conclusion that Chrysler was a lessor within the meaning of that subsection and was therefore entitled to the cap on liability. Daimler Financial retained legal title to the Pietrantonio vehicle. Furthermore, by virtue of the assignment to Daimler Financial from Capital Dodge, the lease itself described Daimler Financial as lessor. The appellants failed to identify any error in the motion judge’s analysis on the application of s. 267.12(1) to Daimler Financial.

(3) No. Xu is dispositive of this issue. In Xu, the motion judge accurately considered the legislative history and purpose of s. 267.12(1). He correctly concluded that permitting a lessee to access a lessor’s insurance, as an unnamed insured, would undermine the animating purpose of that provision. That analysis was upheld by the Court of Appeal. The appellants in this case did not present any cogent reasons for revisiting that conclusion. The Court of Appeal will not overturn one of its prior decisions unless sitting as a five-judge panel. In this case, the appellants’ request for a five-judge panel on the basis that Xu was wrongly decided was refused. The three-judge panel on the current appeal could request that an appeal be assigned to a five-judge panel if convinced that an arguable case can be made for reviewing or overruling the prior decision at issue. However, all of the appellants’ arguments for reviewing Xu were rejected.

(4) Yes, the claim of negligent entrustment was properly dismissed. The vehicle was leased not to Mario but to West End and Luciano. The motions judge concluded that a duty on Daimler Financial to ascertain the competency of the driver of the vehicle was too remote. It was reasonable for the lessors to rely on the insurance that had been obtained by the lessees. On this basis, the motion judge correctly concluded that there was no genuine issue requiring a trial on the issue of negligent entrustment.  As noted by the motions judge, in the present case, Daimler Financial leased the Pietrantonio vehicle to Luciano and West End. Finding a duty of care in the present case would lead to the conclusion that the lessor had an obligation to inquire into who would be driving it. The relationship between the appellants and Daimler Financial does not disclose proximity sufficient to justify imposing a duty.

Junker v. Hughes, 2016 ONCA 81

[Gillese, MacFarland and van Rensburg JJ.A.]


Michelle Kropp (agent for Tony Sferruzzi, lawyer on record) and Kenneth Peacocke, for the appellant

Joseph A. Irvine, for the respondent


The appellant, Ms. Hughes and the respondent, Mr. Junker separated in 2007 after a seven year relationship. The parties were never married.  A trial was held in 2015 on two unresolved issues: Mr. Junker’s constructive trust claim against the proceeds of sale of Ms. Hughes’ house that they lived in together during the relationship, and her claim for retroactive child support.


(1) Did the trial judge err in her finding Mr. Junker had overpaid his child support?

(2) Did the trial judge err in awarding Mr. Junker damages for a constructive trust claim against Ms. Hughes’ property?

Holding: Appeal dismissed.


(1) No. Ms. Hughes position was that the trial judge had erred in ruling that Mr. Junker had overpaid his child support and dismissing her claim for retroactive child support.  She argued that entries on bank records produced by Mr. Junker corresponded to payments for his other children’s expenses and that the trial judge should have credited these to her and Mr. Junker’s child.

During oral argument, it emerged that Ms. Hughes’ real issue was that Mr. Junker may have attempted to recover the overpayment from her, or credited amounts against his future child support payments.  This claim was not made at trial and based on comments of the trial judge, the court held that the issue of overpayment and its possible effects are res judicata.

(2) No.  The house in question was purchased by Ms. Hughes in 2000 and the parties lived there until they separated in 2007.  She made the down payment, monthly mortgage payments and the title was taken in her name.  The house was sold in 2010 for substantially above the purchase price.

Mr. Junker is a contractor and argued that he made improvements to the house during the time he lived there.  He also stated that he made financial contributions to household bills and the mortgage payments.  He paid rent from 2005 onward after he had paid back a significant loan that Ms. Hughes had made to him.

The trial judge found that Mr. Junker had proven his claim for unjust enrichment.  Ms. Hughes was enriched by the increase in value of the property.  The corresponding deprivation was Mr. Junker’s compensation for his contributions made for the collective benefit of the family and that there was no juristic reason for this.  The trial judge found that the parties were involved in a joint family enterprise and awarded Mr. Junker an amount in damages.

Ms. Hughes’ argued that there was no evidence of deprivation or a joint family venture. These arguments all challenged the trial judge’s findings of fact.  While the record was not ideal, the trial judge was in the best position to determine if the trial should proceed without further financial disclosure.  The trial judge was entitled to assess the claim on the basis of the parties’ testimony and limited records.

Even though the trial judge did not consider the evidence under the various headings in Kerr v. Baranow used to determine the existence of a joint family venture, she did consider all of the appropriate factors.  As well, the trial judge did not err in awarding Mr. Junker the lesser of one half of the net proceeds from the sale of house after repayment to the Ms. Hughes of her down payment, and the amount of Mr. Junker’s claimed contributions.  While it would have preferable for the trial judge to have specifically addressed the proportionate contribution Mr. Junker made to the joint family venture, it was implicit in her decision that the parties had contributed equally to the increase in the value of the house.

Farkas v. Bedic, 2016 ONCA 82

[Laskin, Pardu and Brown JJ.A.]


Paul D. Amey, for the appellant

Julie K. Hannaford and D. Clarke, for the respondent


The appellant, Bedic and the respondent, Farkas, began dating in 1994, began living together in 1997 and cohabited for 13 and a half years before separating in 2011. During the course of their relationship, they acquired and maintained several hotel and cottage properties. Each party contributed financially and by physical labour to the properties.

When the relationship ended, Farkas sought a 50 percent interest in the properties or in the proceeds from their sale. At trial, the judge found in her favour, holding that many of the key facts were not disputed, and finding in favour of Farkas where the evidence of each party differed. Bedic appealed, challenging the trial judge’s findings on two of the properties: the Queensway Motel and the Fairview Motel.


(1) Did the trial judge err in finding that Farkas had a 50 percent beneficial interest in the Queensway Motel?

(2) Did the trial judge err in finding that Bedic holds title to the Fairview Motel in trust for himself and Farkas equally?

(3) Did the trial judge err in finding that Bedic had failed to account for money he withdrew from the parties’ joint account?

Holding: Appeal dismissed.


(1) No. The court did not agree that Farkas’ 50 percent interest should revert to Bedic by a resulting trust. Although Bedic referred to an agreement for Farkas’ $125,000 contribution into the Queensway Motel, whereby he would repay the loan and Farkas would repay her half interest in the property to him, at trial this agreement was not relied on. The court agreed that the parties had not relied on this agreement nor did their actions demonstrate a reliance on the agreement when the property was sold in 2006. Bedic did not offer to pay Farkas $125,000 and Farkas did not ask for the money back.   Further, the court found the facts did not support the existence of a resulting trust because here, Farkas provided value in exchange for the equity interest in Queensway transferred to her. Lastly, Bedic’s conduct did not demonstrate an intention to create a resulting trust per Pecore v Pecore. The court found he treated the equity from the sale of the motel as belonging beneficially to both him and Farkas.

In addition, the court found the facts reasonably supported the trial judge’s finding that Bedic and Farkas contributed more or less equal amounts of capital to the Queensway Motel.

(2) No. The court agreed with the trial judge’s finding of a joint family venture in connection with the Fairview Motel. The court found that to remedy what would otherwise be Bedic’s unjust enrichment, the trial judge effectively found that Farkas had a beneficial 50 percent interest in the Fairview Motel by way of a constructive trust, which was reasonably supported by the evidence. As constructive trustee, Bedic was obligated to convey that 50 percent interest to Farkas or pay her one half the value of Fairview. The court reiterated the test from Kerr v Baranow, stating that even though the trial judge did not expressly review the evidence under the factors cited in Kerr v Baranow, the evidence and his findings show a joint family venture between Bedic and Farkas.

Per Kerr v Baranow, the court also found that the evidence supported a link between Farkas’ contribution to her partnership with Bedic and their accumulation of wealth. Further, the evidence supported the trial judge’s finding that each party’s proportionate share in the Fairview Motel should be equal and the court found no reason to interfere with the remedy ordered.

(3) No. The court rejected Bedic’s submissions that the parties’ banking records show the money he took was properly accounted for. The money in question represented part of the net proceeds of sale from the Queensway Motel. The court did not find it within their task to redo the trial judge’s forensic accounting as he had the evidence to support his finding and his order. The trial judge’s finding was not unreasonable and the court found no reason to interfere with his order.

Flintoff v. Crown William Mining Corporation, 2016 ONCA 86

[Pepall, Pardu and Roberts JJ.A.]


Douglas D. Langley, for the appellants

David Milosevic, for the respondents

Facts: The plaintiffs/respondents were victimized by a fraudster, against whom they obtained judgment. Crown William Mining Corporation, a corporation that is controlled by the appellants, purchased the respondents’ judgments in exchange for two promissory notes and 200,000 shares of Crown William.

The purchase agreement contained a “Put-Right option” which provided that after a two-year holding period the respondents could compel the appellants to repurchase the shares from them for $3 per share, exercisable only during a one-year period commencing January 22, 2013. The respondents exercised the option but the appellants did not purchase the shares. The respondents then commenced the present action and obtained summary judgment for specific performance.

The appellants argued that the motion judge erred in granting summary judgment in favour of the respondents because the Put-Right option was a unilateral contract, one of the respondents (Ms. Rinder) had signed a release that barred her claim, and because the motion judge erred in the remedy granted.


(1) Was the Put-Right option a unilateral or bilateral contract?

(2)  Were the respondents in substantial compliance with the notice provisions of the purchase agreement?

(3) Did the failure to provide s. 116 certificates mean that the respondents could not compel the appellants to purchase the shares?

(4) Did the release bar Ms. Rinder’s claim?

(5) Did the motion judge err in the remedy granted?

Holding: Appeal dismissed.


(1) No.  The court reasoned that whether the Put-Right option was part of a unilateral agreement was a question of mixed fact and law, and the appellants did not identify any extricable legal error. Thus, in the absence of a palpable and overriding error (Sattva), the motion judge’s conclusion was owed deference: the conclusion was reasonable and supported by the evidence.

(2) Yes.  The court agreed with the motion judge that the plaintiffs/respondents substantially complied with the notice requirement as contemplated by the purchase agreement, and there was no basis to interfere with that conclusion.

(3) No.  The motion judge correctly held that this was not a precondition for the respondents to exercise the option, and thus this conclusion was also reasonable.

(4) No.  The agreement released the appellants from all claims that Ms. Rinder may have had against them as of the date of the agreement, which was dated April 19, 2011. The motion judge concluded that her claim arose after April 19, 2011 and was thus not barred. The court found that this interpretation of the release agreement was reasonable.

(5) No.  Specifically, the appellants argued that the motion judge erred by granting specific performance, when the respondents’ notice of motion only asked for summary judgment and damages. The court rejected this submission on the basis that the appellants were not prejudiced by a judgment that was within the terms of the relief claimed in the statement of claim.

Locking v. McCowan, 2016 ONCA 88

[Gillese, MacFarland and van Rensburg JJ.A.]


John Archibald and Paul Bates, for the appellant

Thomas Curry and Julia G. Brown, for the respondents


The appellant is the representative plaintiff in a proposed class action by unit holders of Partners REIT, an unincorporated real estate investment trust whose units trade on the Toronto Stock Exchange. The appellant claims that the class sustained losses when the REIT’s unit price dropped because an improper property transaction had to be set aside. McCowan was the REIT’s interim CEO at the relevant time and Weinberg was one of the trustees. On April 2, 2014, the respondent Philip and her company Holyrood Holdings Limited sold three properties to the REIT at McCowan’s behest. McCowan failed to disclose that he had a longstanding, close personal and business relationship with Philip. When McCowan’s conflict of interest was exposed, the transaction was set aside and all monies paid were returned to the REIT. However, it is alleged that the fall-out caused the REIT’s unit price to drop by more than 30%. By order dated August 19, 2015, the motions judge permitted the breach of trust claim against Weinberg and the knowing assistance claim against McCowan to proceed. However, he struck the knowing assistance claim against the respondents.


Did the motions judge err in striking the knowing assistance claim against the respondents?

Holding: Appeal allowed.


Yes. The motion judge’s first error was in failing to accurately and generously construe the claim made against the respondents. He read the Amended Statement of Claim as alleging that the respondents’ only assistance or participation in the breach of trust was their suppression of information which they had no duty to disclose. On the pleadings, however, it is alleged that the respondents were active participants – playing the roles of genuinely disinterested arm’s length parties who were the sole owners of the properties – who concealed the improprieties underlying the transaction and sold those properties to the REIT.

The motion judge’s second error relates to his approach to the third element of the test for a knowing assistance claim against the respondents. In order for a knowing assistance claim to succeed, the plaintiff must establish: (i) an act of fraud or dishonesty on the part of the trustee; (ii) that the defendant had knowledge of the trustee’s dishonest conduct; and (iii) that the defendant assisted the trustee in perpetrating the dishonest conduct. The motion judge viewed this third element as requiring that the defendant take a positive step to help or to take part in the trustee’s breach of trust. However, what amounts to “assistance” has not been fully explored by the jurisprudence, and it may be that silence, in certain circumstances, is sufficient to constitute assistance. Thus, it was not plain and obvious that the knowing assistance claim against the respondents could not possibly succeed, as required by s.5(1)(a) of the Class Proceedings Act.

Civil Endorsements

Packall Packaging Inc. v. Ciszewski, 2016 ONCA 78

[Doherty, Brown and Miller JJ.A.]


Peter W.G. Carey, for the appellants Geoffrey D.E. Adair, Q.C., for the respondents

Keywords: Endorsement, Costs, Partial Indemnity

Sabet v. Elhalwagy, 2016 ONCA 84

[Simmons, Pepall and Pardu JJ.A.]


Ioulia Vinogradova, for the appellant

John O’Sullivan, for the respondent

Keywords: Costs Endorsement, Substantial Indemnity Costs, Failure to Pay Costs

Criminal Decisions

Ontario (Attorney General) v. $104,877 in U.S. Currency (In rem), 2016 ONCA 71

[Doherty, Pardu and Benotto JJ.A.]


Glenroy Bastien, for the appellant

Miriam Young and Anastasia Mandziuk, for the respondent

Keywords: Criminal Law, Civil Forfeiture, Civil Remedies Act, s. 3, s. 8, Proceeds from Unlawful Activity

R v. C.K.-D, 2016 ONCA 66

[Sharpe, Hourigan and Benotto JJ.A.]


C. K.-D., in person

Lou Strezos, duty counsel

Michael Bernstein, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Child Witness, Credibility, Sentencing

R v. Johnson, 2016 ONCA 69

[Feldman, Cronk and Roberts JJ.A.]


Anthony Fitzroy Johnson, appearing by video conference

Yoni Rahamim, appearing as duty counsel

Roger A. Pinnock, for the respondent

Keywords: Criminal Law, Aggravated Assault, Sentencing, Credit for Pre-Sentence Custody

R v. Mahomood, 2016 ONCA 75

[MacPherson, MacFarland and Roberts JJ.A.]


Najam Mahmood, acting in person

Erin Carley, for Her Majesty the Queen

Keywords: Criminal Law, Tax Evasion, Income Tax Act, Excise Tax Act, Sentencing

R v. S.C., 2016 ONCA 83

[Laskin, Hourigan and Pardu JJ.A.]


Mark Halfyard, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal Law, Sexual Offences, Evidence, Credibility

R v. Hemsworth, 2016 ONCA 85

[Cronk, Epstein and Brown JJ.A.]


Zachary Kerbel, for the appellant

Mary Ellen Hurman, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Kienapple v R, Evidence, Credibility, Witnesses


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.