Good evening,

This was a busy week for the Court of Appeal. Topics covered included family law, wrongful dismissal, wills and estates, insurance coverage, tort liability of employees, workplace safety, police liability, limitation periods, conditional discharges from bankruptcy and costs against non-parties.

The Court’s 101-page decision in Weyerhaeuser Company Limited v. Ontario (Attorney General) involved a Director’s Order issued by the Ontario Ministry of the Environment requiring the respondents to perform remedial work on an abandoned mercury waste disposal site near Dryden, Ontario. The respondents took the position that they enjoyed the benefit of an indemnity provided by the Government of Ontario to earlier owners of the facility. They contended that Ontario was obligated to indemnify them for any costs incurred to comply with the Director’s Order. The motion judge granted summary judgment to the respondents, holding both were entitled to be indemnified by Ontario for the costs they had incurred and might incur as a result of the Director’s Order. The Court allowed Ontario’s appeal in part, setting aside the dismissal of its summary judgment motion, granting summary judgment dismissing the claim by one of the respondents (Resolute), and directing a final adjudication by the court below on the issue of what, if any, rights the other respondent, Weyerhaeuser, possessed as assignee of the indemnity at the time the Director’s Order was made in 2011. Justice Laskin would have gone further. He would have allowed Ontario’s appeal in full and would have dismissed Weyerhaeuser’s claim, finding that it could not enforce the indemnity.

In the 93-page corporate restructuring decision in Ernst & Young Inc. v. Essar Global Fund Limited, the Court upheld the trial judge’s finding that the conduct of the appellants was oppressive and the remedy he had fashioned to cure the oppression. The Court set out the factors under which a monitor appointed under the CCAA can be a complainant for the purposes of bringing an oppression application under the CBCA.

Merry Christmas to everyone celebrating.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

http://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents 

Fogel v. Chiriatti, 2017 ONCA 1000

Keywords: Family Law, Custody, Division of Property, Matrimonial Home, Child Support, Federal Child Support Guidelines, ss.7,  Costs

Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc., 2017 ONCA 1004

Keywords: Employment Law, Wrongful Dismissal, Severance Pay, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Limitation Periods, Employment Standards Act, 2000, S.O. 2000, c. 41, Ontario Human Rights Code, RSO 1990, c. H19, Occupational Health and Safety Act, RSO 1990, c.O.1, r. 21.01(1)(b), Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Jones v. Friedman, 2006 CarswellOnt 120 (C.A.)

Perri v. Perri, 2017 ONCA 1001

Keywords: Family Law, Spousal Support, Lump-Sum Support, Compensatory Claims, Economic Hardship, Spousal Support Advisory Guidelines, Divorce Act, , R.S.C. 1985, c. 3 (2nd Supp.), ss. 15.2(6)(a) and (c), Standard of Review

Quest Management Services Inc. v. Quest Management Systems, 2017 ONCA 999

Keywords: Civil Procedure, Injunctions, Undertaking as to Damages, Costs,  Liability for Costs, Non-Parties, Corporations, Officers, Directors and Shareholders

Ontario (Labour) v. Quinton Steel (Wellington) Limited, 2017 ONCA 1006

Keywords: Employment Law, Workplace Safety, Provincial Offences, Strict Liability Offences, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, Paragraph 25(2)(h), Industrial Establishments Regulation, Statutory Interpretation, R. v. Brampton Brick (2004), 189 OAC 44 (C.A.)

Sirois v. Weston, 2017 ONCA 1002

Keywords: Civil Procedure, Summary Judgment, Limitation Periods, Hamilton (City) v. Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, Butera v. Chown, Cairns LLP, 2017 ONCA 783

Cole v. RBC Dominion Securities Inc., 2017 ONCA 1009

Keywords: Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 173(1)(o), Discharge from Bankruptcy, Conditions, Surplus Income

Weyerhaeuser Company Limited v. Ontario (Attorney General), 2017 ONCA 1007

Keywords: Environmental Law, Environmental Contamination, Liability, Director’s Clean-Up Orders, Environmental Protection Act, R.S.O. 1990, c. E.19, Contracts, Indemnities, Contractual Interpretation, Factual Matrix, National Trust Co. v. Mead, [1990] 2 S.C.R. 410,  Brown v. Belleville (City), 2013 ONCA 148, 114 O.R. (3d) 561,  Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19

Ernst & Young Inc. v. Essar Global Fund Limited, 2017 ONCA 1014

Keywords: Corporations, Oppression, “Complainant”, Derivative Actions, Canada Business Corporations Act, Sections 238 and 241, Bankruptcy and Insolvency, Companies’ Creditors Arrangement Act

Stekar v. Wilcox, 2017 ONCA 1010

Keywords: Wills & Estates, Testamentary Capacity, Suspicious Circumstances, Vout v. Hay, [1995] 2 S.C.R. 876, Fresh Evidence

Toronto-Dominion Bank, N.A. v. Lloyd’s Underwriters, 2017 ONCA 1011

Keywords: Insurance law, Coverage, Bankers Comprehensive Crime, Professional Indemnity and Directors’ and Officers’ Liability,,  Contractual Interpretation Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, 85 O.R. (3d) 254, Civil Procedure, Summary Judgment, Procedural Fairness

Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017

Keywords: Torts, Negligence, Personal Liability of Employees Acting in the Course of Their Employment, London Drugs Ltd. v. Kuehne & Nagel International Ltd., [1992] 3 S.C.R. 299

For Short Civil Decisions Click Here.

For Long Civil Decisions Click Here.  

Civil Decisions

Fogel v. Chiriatti, 2017 ONCA 1000

[MacPherson, Pepall and Paciocco JJ.A.]

Counsel:

Anthony Di Battista, for the appellant

Grant Gold, for the respondent

Keywords: Family Law, Custody, Division of Property, Matrimonial Home, Child Support, Federal Child Support Guidelines, ss.7,  Costs

Facts:

The parties cohabited for 14 years and separated in May 2014. They have one child. At the time of trial, the respondent was 36 years of age, the appellant was 53, and their son was nine. The appellant appeals from the judgment of Backhouse J. granting the respondent sole custody of the parties’ son. He also appeals from the trial judge’s matrimonial home valuation, division of the notional proceeds of sale, and treatment of the parties’ chattels. Lastly, he seeks leave to appeal the $125,000 costs award made in favour of the respondent.

Issues:

(1) Did the trial judge err in granting the respondent sole custody of the parties’ child?

(2) Did the trial judge err in her determination as to the valuation of the matrimonial home?

(3) Did the trial judge improperly permit the respondent an adjustment resulting from the respondent’s $100,000 payment towards the matrimonial property?

(4) Did the trial judge err in ordering that an amount reflecting ten years of child support and s. 7 expenses under the Federal Child Support Guidelines be secured to the respondent as a fund from the appellant’s share of the notional house proceeds?

(5) Did the trial judge make an error when calculating child support arrears?

(6) Did the trial judge err in neglecting to address the division of chattels despite being asked to do so?

(7) Did the trial judge err in her discretionary costs award?

Holding: Appeal allowed, in part.

Reasoning:

(1) No. The trial judge found the appellant to be lacking in any credibility and, in contrast, accepted the evidence of the respondent. This determination was open to the trial judge to make. Fundamentally, the appellant failed to put his son’s best interests ahead of his own. The trial judge did not make a determination on the necessity of either a psychoeducational assessment or a tooth extraction. Rather, she used the appellant’s refusal to agree as evidence that he put his conflict with the appellant ahead of the needs of his son. She relied not only on the evidence of the respondent, but on that of two independent witnesses as well. She found that the respondent is the better parent and better suited to make decisions for the child.

The finding that the appellant is an important part of his son’s life and his consent to exclusive possession of the matrimonial home did not preclude the granting of custody to the appellant. The trial judge properly applied the best interests of the child test and concluded that those interests were best met by a custodial order in favour of the respondent. This was not an appropriate case for joint custody. The respondent provided a stable environment and had been the primary parent both before and after separation. Significantly, the parties acknowledged that they could not communicate on substantive issues relating to their son. The trial judge’s reasons were well supported by the facts, and her decision was discretionary in nature and entitled to deference.

(2) No. The trial judge considered the evidence of the two real property valuation experts put forward by the parties and preferred the opinion of the respondent’s expert over that of the appellant. The trial judge did not substitute her opinion for that of the experts. Rather, she weighed the evidence about the value of the home with the expert evidence regarding a comparable property and the impact of a swimming pool. She accepted the opinion of value proffered by the respondent’s expert, which she was entitled to do.

(3) No. The appellant argued that the consent order of Wilson J. finalized the apportionment of the respective shares of the home and the $100,000 was credited to the respondent at paragraph 3(a) of the consent order. In oral argument, he conceded that the adjustment could have been made by Wilson J. but not by the trial judge; by that time, it was too late.  Paragraph 3(a) of Justice Wilson’s order provided that the respondent was to receive $100,000, being the prepayment of the mortgage paid by the respondent out of funds she received from an inheritance, from the average of the two appraised values of the property as at May 30, 2014. The mortgage, line of credit, and notional real estate commission of four percent were also to be deducted from the average of the appraised values. Justice Wilson then provided that the balance was to be notionally divided between the parties, however, they each would be entitled to seek further adjustment from the other’s respective notional share of the proceeds subject to proper documentary proof. At trial, the respondent called expert evidence on an additional adjustment of $40,951. The trial judge accepted this expert evidence and ordered the adjustment. Based on the language of Wilson J.’s order, further adjustments were permissible.

(4) No. The appellant submitted that the trial judge failed to give proper reasons, awarded security in spite of the fact that the appellant’s support payments were up to date prior to trial, and that he had contributed $8,000 to his son’s private school fees. He argued she also failed to consider the appellant’s evidence at trial that he would pay support. He complains that he is unable to benefit from any present value or any future increase in value of the $211,560 that is secured by the order. The appellant had paid no child support since separating from the respondent in May 2014 other than some private school and camp fees. He also stopped paying support contrary to the terms of an order to which he had consented after only three months, and failed to pay outstanding private school fees and s. 7 expenses despite being ordered to do so. It was only when the parties attended a court conference immediately before the trial that he made a payment on account of child support arrears and outstanding school fees. The evidence of non-compliance supported the trial judge’s conclusion that there was no likelihood that the appellant would pay child support or s. 7 expenses in the future, and that security in the form of a fund was required. Given that the order was for security (as opposed to a lump sum payment), the appellant’s remaining arguments had no merit.

(5) Yes. The error was only noticed by the parties on January 17, 2017, when the motion for security for costs for the appeal was brought. The court ordered Paragraph 8 of the judgment amended by deleting the sum of $33,731 and substituting the sum of $18,575 ($33,731 less $15,156 = $18,575).

(6) No. The trial judge considered the four financial statements filed by the appellant. The appellant’s itemization of chattels was only included in one of the four financial statements. The trial judge found that there was little documentation to support who had paid for the items claimed by the appellant, what had been paid, or current values. On the basis of the evidence before her, it was open to the trial judge to disallow this claim.

(7) No. She properly considered the relevant factors set out in the Family Law Rules. Although the respondent sought full indemnity costs of approximately $237,000, the trial judge reduced the claim to $125,000. She was entitled to do so, and her costs award was owed considerable deference.

Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc., 2017 ONCA 1004

[Hourigan and Brown JJ.A. and Himel J. (ad hoc)]

Counsel:

Rodney Godard and Ioana Vacaru, for the appellant

Anita Lanary and Eric Florjancic, for the respondents

Keywords: Employment Law, Wrongful Dismissal, Severance Pay, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Limitation Periods, Employment Standards Act, 2000, S.O. 2000, c. 41, Ontario Human Rights Code, RSO 1990, c. H19, Occupational Health and Safety Act, RSO 1990, c.O.1, r. 21.01(1)(b), Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Jones v. Friedman, 2006 CarswellOnt 120 (C.A.)

Facts:

The appellant, Dan Bailey, sued his former employer, the respondent, Milo-Food & Agricultural Infrastructure & Services Inc. (“Milo-FAIS”) and its President and CEO, the respondent, Geetu Pathak (“Ms. Pathak”) for wrongful dismissal, severance pay pursuant to the Employment Standards Act, 2000, S.O. 2000, c. 41, emotional upset and mental distress, and breach of the Ontario Human Rights Code, RSO 1990, c. H19 and the Occupational Health and Safety Act, RSO 1990, c.O.1.

The respondents moved to strike the statement of claim pursuant to r. 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the ground that it disclosed no reasonable cause of action and was statute barred.

The appellant was a long term employee of Milo-FAIS and its predecessor company. By letter dated March 7, 2013, Ms. Pathak advised the appellant that Milo-FAIS could “no longer sustain the costs of his position” and proposed two options for his exit from employment. He rejected that offer. By letter dated March 18, 2013, the appellant was advised that his service prior to Milo-FAIS was not recognized and that his employment would end two years hence, on March 22, 2015. The appellant worked for Milo-FAIS until March 22, 2015. He commenced his action on December 21, 2015.

The motion judge granted the respondents’ motion to strike in respect of the appellant’s severance pay and wrongful dismissal claims. He dismissed the respondents’ motion to strike in respect of the appellant’s other claims.

Issues:

  1. Did the motion judge err in concluding that the appellant’s cause of action for wrongful dismissal arose on the date he was provided notice and not on the last day he worked for Milo-FAIS?
  2. Did the motion judge err in finding that the appellant’s claim for severance pay was barred by the limitation period?
  3. Did the motion judge err in dismissing the balance of the respondent’s motion to strike?

Holding:  Appeal allowed, in part.

Reasoning:

  1. No. The Court did not give effect to the appellant’s submission that the motion judge’s interpretation of Jones v. Friedman, 2006 CarswellOnt 120 (C.A.) was misplaced and that he erred by conflating actual dismissal with notice of future dismissal. The Court held that Jones stands for the principle that a cause of action for wrongful dismissal arises on the date of notice of termination. Thus, the motion judge made no error in his reliance on that case or in striking the wrongful dismissal claim.
  2. Yes. The Court accepted the appellant’s novel and credible argument based on ss. 11(5), 63(1)(a), 64(1) and 65(1) of the Employment Standards Actthat until employment is completed, the claim for severance pay does not crystalize. The Court noted that there was no authority submitted by the parties that is contrary to this argument. It also did not accept the respondent’s submission that it is plain and obvious that s. 63(1)(e) of the Employment Standards Actapplies as opposed to s. 63(1)(a) as submitted by the appellant.
  3. No. In the statement of claim, it was alleged that the appellant was subjected to conduct which caused him emotional upset, mental suffering, and which breached his rights under the Human Rights Code and the Occupational Health and Safety Act throughout and until the end of the notice period. For the purpose of a r. 21.01(2)(b) motion, the court stated that these facts must be presumed to be true. The court noted that these claims arguably arise from a continuing cause of action that predates the notice of termination, rather than a series of independent torts. As such, the motion judge was correct to dismiss the motion to strike these claims, since they were “entangled with factual issues.”

Perri v. Perri, 2017 ONCA 1001

[Pepall, Lauwers and Pardu JJ.A.]

Counsel:

A Kania, for the appellant

K Cunningham and A McBean, for the respondent

Keywords: Family Law, Spousal Support, Lump-Sum Support, Compensatory Claims, Economic Hardship, Spousal Support Advisory Guidelines, Divorce Act, , R.S.C. 1985, c. 3 (2nd Supp.), ss. 15.2(6)(a) and (c), Standard of Review

Facts:

This was a 22 year marriage. The parties had two children. The older daughter was no longer a child of the marriage within the meaning of the Divorce Act at the time of trial, but was living with her mother (the respondent). Just two or three weeks before trial, the son moved from his mother’s home to reside with his father (the appellant). He was 19 years old at the time of trial. He was halfway through completing a three-year community college program. The wife was earning about $63,300 a year as a legal secretary. The husband’s annual income was about $100,000. The wife was 49 years old at the time of trial. The husband is the same age as the wife.

The application judge found that the wife was entitled to spousal support on a compensatory basis. He found that she had suffered economic hardship from the breakdown of the marriage. At the hearing, both parties said they preferred a lump-sum spousal support order rather than periodic payments. There was a high degree of animosity between the parties. The application judge accepted that a clean break would be appropriate. He calculated the support payment according to the mid-point of the Spousal Support Advisory Guidelines (“SSAGs”) amount, $1,194.00 per month, and selected a ten-year duration for the support payment, to arrive at a lump sum spousal support order of $143,280 – which he indicated was to be adjusted for tax consequences. The application judge declined to make any order that the son continued to be a child of the marriage. The son had only moved to his father’s home within a few weeks of the trial. The application judge indicated that there were many unanswered questions about the son.

Issues:

(1) Did the application judge err by awarding the wife compensatory spousal support?

(2) Did the application judge err by failing to recognize that the wife was obliged to contribute support for the son?

Holding: Appeal allowed, in part.

Reasons:

The standard of review of spousal support decisions is deferential. As the court observed in Halliwell v. Halliwell, 2017 ONCA 349, at para. 88, “[a]ppellate courts should not interfere with support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or the award is clearly wrong”.

(1) No. The application judge specifically found that after separation, the husband enjoyed much the same standard of living that he had before separation, but that the same was not true for the wife. The Divorce Act, ss. 15.2(6)(a) and (c), mandate consideration of not only economic disadvantage flowing from the marriage, but also economic disadvantage flowing from the breakdown of the marriage. The application judge’s order was not simply an award based on the disparity of the parties’ incomes. It was also a recognition of a 22-year marriage during which the parties had two children.

(2) No. Given that the son had moved into his father’s home within a few weeks of the trial, and the absence of full information about the son’s circumstances, the application judge did not err by refusing to treat the son as a child of the marriage for the purposes of calculating spousal support. More information was required to make a finding that the son was a child of the marriage. The application judge did not foreclose consideration of this issue. He indicated that the issue of whether the son was still a child of the marriage could “be revived with a proper evidentiary record.” Neither party attempted to do so.

Notwithstanding the dismissal of the appeal on the main issues, the court varied the order below as to the amount of support payable to take into account of tax considerations, the security for the support ordered, and the removal of the obligation for ongoing disclosure.

Quest Management Services Inc. v. Quest Management Systems, 2017 ONCA 999

[Strathy C.J.O., Juriansz and Huscroft JJ.A.]

Counsel:

David A. Schatzker, for the appellant

Bayo Odutola, for respondents

Keywords: Civil Procedure, Injunctions, Undertaking as to Damages, Costs,  Liability for Costs, Non-Parties, Corporations, Officers, Directors and Shareholders

Facts:

The motion judge awarded costs against Peter Merrill (“Merrill”), a non-party, the sole shareholder, president and director of Quest Management Systems Inc. (“Quest”), a plaintiff in this action. He did so because he found that the plaintiffs’ action was an abuse of process and that Quest had provided a “fraudulent” undertaking to the court on its application for an interlocutory injunction.

The motion judge found that the evidence established that Merrill was the sole shareholder and president of Quest, that Quest had suffered losses of approximately $36,000 in 2013 and $25,000 in 2012, had negative shareholder equity for the three years 2012-2014 and had assets of less than $800. He found that the undertaking given by Merrill on behalf of Quest was a fraudulent misrepresentation as to Quest’s means to satisfy a damage award and justified an award of costs against Merrill personally in order to prevent the administration of justice from being brought into disrepute.

Issues:

(1) Did the motion judge err in principle by awarding costs against the appellant (a non-party)?

Holding: Appeal allowed.

Reasoning:

(1)  Yes. Costs may be ordered against a non-party principal of a corporation but only in exceptional circumstances (including fraud or gross misconduct in the instigation or conduct of litigation) if the principal commits an abuse of process. But costs should not be awarded simply because the principal directed the operations of the corporation. There was no evidence in this case of the requisite “exceptional circumstances”, and the motion judge erred in principle in awarding costs against the appellant. For these reasons, the appeal was allowed and the order of the motion judge was set aside, as was the order with respect to costs of the motion.

Ontario (Labour) v. Quinton Steel (Wellington) Limited, 2017 ONCA 1006

[Pardu, Huscroft and Fairburn JJ.A.]

Counsel:

W Wilson, for the appellant

J Warning, for the respondent

Keywords: Employment Law, Workplace Safety, Provincial Offences, Strict Liability Offences, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, Paragraph 25(2)(h), Industrial Establishments Regulation, Statutory Interpretation, R. v. Brampton Brick (2004), 189 OAC 44 (C.A.)

Facts:

Martin Vryenhoek died when he fell from a temporary welding platform while working at the factory of his employer, the respondent Quinton Steel. The welding mask used by the deceased was made of “speed glass” which was clear and allowed forward vision, but became opaque once welding began in order to provide eye protection. He would move along the platform by walking sideways, slowly, and would know that he had reached the end of the platform only by feeling the tip of the A-frame with his foot. . No guardrails were installed. Quinton Steel was charged under s. 25(2)(a) of the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (“OHSA”) with failing to inform, instruct and supervise a worker to protect the health or safety of the worker, and under s. 25(2)(h) with failing to take “every precaution reasonable in the circumstances for the protection of a worker”. The Crown alleged that the respondent “failed to take the reasonable precaution of installing guardrails at the open sides of a raised wood platform”. Both charges were dismissed following trial before a justice of the peace. The Crown did not appeal dismissal of the charge under s. 25(2)(a). The Crown appealed dismissal of the count under s. 25(2)(h), but the appeal was dismissed by a summary appeal conviction judge. The Crown appeals again and submits that the trial justice erred in law by failing to adjudicate the s. 25(2)(h) charge as laid, arguing that the trial justice did not make the findings of fact necessary to determine whether it was reasonable to require that guardrails be installed on the platform Vryenhoek used while welding.

Issues:

(1) Did the justice of the peace err in failing to find that the respondent had violated section 25(2)(h) of the OHSA.

Holding:

Appeal allowed.

Reasoning:

(1) The OHSA is public welfare legislation. It is specifically designed to protect workers and, as such, it must be interpreted generously, not narrowly or technically, in order to allow it to achieve this purpose. The respondent’s factory is an industrial establishment as defined in the OHSA and the Industrial Establishments Regulation applies to it. Section 25(1) of the OHSA refers specifically to the regulations and imposes a duty on employers to ensure that the measures and procedures prescribed by the regulations are carried out. But s. 25(1) does not exhaust employers’ duties under the OHSA. Section 25(2)(h) provides: Without limiting the strict duty imposed by subsection (1), an employer shall, (h) take every precaution reasonable in the circumstances for the protection of a worker. Section 25(2)(h) establishes a duty that is “even more sweeping” than s. 25(1). It is more sweeping because it does not depend on the existence of a specific regulation prescribing or proscribing particular conduct.

The OHSA is for the most part a strict liability regime. The Crown is required to prove only the actus reus of the offence beyond a reasonable doubt. If the Crown succeeds in doing so, an employer can avoid liability only by establishing, on a balance of probabilities, that it acted with due diligence in seeking to avoid the event that occurred. The Crown was not required to establish a failure to comply with any of the regulations in order to prove that s. 25(2)(h) had been violated. Instead, the Crown was required to prove that the installation of guardrails was a reasonable precaution in the circumstances of this workplace in order to protect a worker and that the respondent failed to install the guardrails. This was the actus reus of the offence.

There is no question that the respondent did not install guardrails on the temporary platform from which Vryenhoek fell. The trial justice’s finding to the contrary has no support in the record and was not defended by the respondent. As per R. v. Brampton Brick (2004), 189 OAC 44 (C.A.), the surrounding circumstances are an element of the offence under s. 25(2)(h) that must be considered before it can be concluded that a precaution not taken was reasonable. In order to apply s. 25(2)(h), the trial justice had to consider all of the relevant circumstances including the nature of the workplace, the work being performed by Vryenhoek, the equipment he was using, and the manner in which he was performing the work. Vryenhoek was welding while moving from side-to-side across a temporary platform; he was wearing a welding helmet that afforded him only limited sight and could not see the end of the platform from which he fell to his death. The question for the trial justice was whether the installation of guardrails on the A-frame platform was a reasonable precaution in these circumstances. The trial justice did not answer this question. Instead, he concluded that s. 25(2)(h) of the OHSA was not violated because the respondent had not violated any provision of the regulations, and s. 25(2)(h) could not be used to extend an employer’s duties beyond those set out in the regulations. The focus of the trial justice’s reasons was on the relationship between the statutory requirement and the regulations. He concluded that the respondent could not be convicted of violating s. 25(2)(h) because the regulations had not been violated. This conclusion is incorrect. Section 25(1) of the OHSA requires employers to ensure that the measures and procedures prescribed by the regulations are carried out. But employers are required to comply with s. 25(2)(h) as well as s. 25(1), and the application of s. 25(2)(h) does not depend on compliance with any of the regulations.

Regulations cannot “occupy the field” by displacing statutory authority. Section 25(2)(h) specifically requires that employers take every precaution reasonable in the circumstances for the protection of a worker, that duty is not varied or limited by the existence of specific regulations. Certainty is an important aspect of the rule of law; parties should be able to ascertain what the law requires in order that they can arrange their affairs in compliance with its demands, but prescriptive certainty is not required in the context of regulatory offences such as s. 25(2)(h). That section establishes a standard, rather than a rule, the requirements of which are tailored to suit particular circumstances. Employers must take every precaution reasonable in the circumstances in order to protect workers. Reasonableness is a well-known legal concept that is interpreted and applied in a wide variety of legal contexts. Its use in s 25(2)(h) does not give rise to intolerable uncertainty.

Sirois v. Weston, 2017 ONCA 1002

[Feldman, Fairburn and Nordheimer JJ.A.]

Counsel:

Christopher S. Spiteri & John MacDonell, for the appellants

Aaron Postelnik, for the respondent, Tanya Lemcke

Keywords: Civil Procedure, Summary Judgment, Limitation Periods, Hamilton (City) v. Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, Butera v. Chown, Cairns LLP, 2017 ONCA 783

Facts:

The plaintiffs appeal from the summary judgment that dismissed the plaintiffs’ claim against the defendant on the basis that the two-year limitation period had expired prior to the claim being instituted against the respondent. The appellants purchased a rural property as a retirement place in late 2009. In early 2010, they became aware that a company had an option to purchase an adjoining property upon which the company intended to build a solar farm. The option had been registered on title to the adjoining property one day after the appellants had signed their agreement of purchase and sale. The appellants say that they would not have purchased the property had they known about the option that the solar farm company had to purchase the adjoining lands. As a result of this information, the appellants first attempted to prevent the construction of the solar farm. They failed in those efforts. Construction of the solar farm began in February 2013. The appellants asked the respondent, late in 2012, to provide them with an opinion regarding the value of the property at that time. The respondent provided that opinion in December 2012, which stated that the value of the property had declined significantly given the impending construction of the solar farm.

The appellants commenced their action on November 30, 2011. The appellants did not include the respondent as a defendant. It was not until October 2013 that the appellants sought leave to amend their statement of claim to add the respondent as a defendant. Leave was granted on November 1, 2013, and the statement of claim was amended to add the respondent as a defendant on November 30, 2013. In response to the motion for summary judgment, the appellants argued that the limitation period did not begin to run until February 2013 when the construction of the solar farm actually commenced. Up until that point, the appellants say that they did not know that they had suffered actual damage arising from the potential solar farm.

The motion judge rejected the appellants’ position, concluding that the Plaintiffs discovered their cause of action against Ms. Lemcke by February 2010. Although the extent of the damages was still unknown, they knew at that time that they had suffered damage, but chose to wait to bring the action.

Issues:

(1) Did the motion judge err in granting summary judgment?

Holding: Appeal dismissed.

Reasoning:

(1) No.  By at least February 2010, the appellants knew about the possible construction of the solar farm on the property adjacent to theirs. They expressly said that they would not have purchased their property if they had had this knowledge before the closing. They also knew at that time that the value of their property would be negatively impacted. The court endorsed the decision of LaForme J.A. in Hamilton (City) v. Metcalfe & Mansfield Capital Corporation that the plaintiff suffers damage sufficient to complete the cause of action when they enter into the transaction, not when the loss is monetized into a specific amount.

The contention that the appellants did not know they had a cause of action until damage occurred when the construction of the solar farm commenced in February 2013, is contradicted by the fact that they commenced the action originally in November 2011 against both the vendor and the appellants’ real estate lawyer, based on the same factual foundation and complaint that is now alleged against the respondent.

The appellants’ reliance on the Court of Appeal’s decision in Butera v. Chown, Cairns LLP, was found to be misplaced. The expiration of the limitation period as it related to the sole defendant was precisely the type of discrete issue that could be separated from the other claims in the action and “dealt with expeditiously and in a cost effective manner.

Cole v. RBC Dominion Securities Inc., 2017 ONCA 1009

[Pepall Benotto and Paciocco JJ.A.]

Counsel:

Hari Nesathurai and Glen Perinot for the appellant, Henry Cole

Jeremy Devereaux and Danny Urquhart for the respondent, RBC Dominion Securities Inc

Keywords: Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 173(1)(o), Discharge from Bankruptcy, Conditions, Surplus Income

Facts:

While in bankruptcy, the appellant had a surplus monthly income of $12,500, but failed to make any surplus income payments. The appellant applied for a discharge from bankruptcy. The registrar in bankruptcy ordered that (1) as a condition of his discharge, the appellant pay $284,346 to the Trustee as surplus income to October 2015, payable at a rate of $5,000 per month; (2) as a condition of his discharge, the appellant pay an additional $5,000 per month to the Trustee for a further six years for a total additional payment of $360,000; and (3) the appellant’s discharge from bankruptcy be suspended for two years. The appellant’s appeal of the order was dismissed by Wilton-Siegel J.  The appellant now appeals from that order.

Issues:

(1) Did the court below err in dismissing the appellant’s appeal of the registrar’s order?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The judge below read the registrar’s reasons in their totality and was readily able to discern her intention and meaning. The judge’s decision to uphold the registrar’s order was reasonable because the registrar’s order was discretionary in nature and there was ample evidence to support her decision. Discharge from bankruptcy pursuant to s. 172 of the Bankruptcy and Insolvency Act, provides that on proof of any of the facts referred to in s. 173, the court shall require the bankrupt, as a condition of discharge, to pay monies or comply with such other terms as the court may direct. The registrar found that the facts referred to in s. 173(1)(o) had been established in this case: The appellant had failed to provide information to enable the Trustee to calculate surplus income.

Weyerhaeuser Company Limited v. Ontario (Attorney General), 2017 ONCA 1007

[Laskin, Lauwers and Brown JJ.A.]

Counsel:

Leonard Marsello, Tamara Barclay, and Nansy Ghobrial, for the appellant, Her Majesty the Queen as represented by the Ministry of the Attorney General

Christopher Bredt, Markus Kremer, and Alannah Fotheringham for the respondent, Weyerhaeuser Company Limited

Crawford Smith and Jeremy Opolsky, for the respondent, Resolute FP Canada Inc.

Keywords: Environmental Law, Environmental Contamination, Liability, Director’s Clean-Up Orders, Environmental Protection Act, R.S.O. 1990, c. E.19, Contracts, Indemnities, Contractual Interpretation, Factual Matrix, National Trust Co. v. Mead, [1990] 2 S.C.R. 410,  Brown v. Belleville (City), 2013 ONCA 148, 114 O.R. (3d) 561,  Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19

Facts:

On August 25, 2011, the Ontario Ministry of the Environment issued a Director’s Order requiring the respondents, Weyerhaeuser Company Limited and Resolute FP Canada Inc., to perform remedial work on an abandoned mercury waste disposal site near Dryden, Ontario. The respondents are two of the previous owners of the site.

Weyerhaeuser and Resolute took the position that they enjoyed the benefit of a December 1985 indemnity provided by the Government of Ontario to earlier owners of the Dryden pulp and paper facility, including the waste disposal site. As a result, they contended Ontario was obligated to indemnify them for any costs incurred to comply with the Director’s Order.

Ontario denied the 1985 indemnity had any such effect. It took the position the indemnity only covered third party claims resulting from mercury spills emanating from the Dryden property, not the regulatory compliance costs incurred by the owners of the waste disposal site. This litigation ensued.

All parties moved for summary judgment, raising two issues: (i) whether the indemnity covers the costs of complying with the Director’s Order; and (ii) if it does, whether Weyerhaeuser and Resolute are entitled to its benefit.

The motion judge granted summary judgment in favour of Weyerhaeuser and Resolute, holding both were entitled to be indemnified by Ontario for the costs, losses, expenses, liabilities or obligations they had incurred and might incur as a result of the Director’s Order.

As set out in further detail below, the court concluded (in a 101 page decision, Laskin J. dissenting) that the motion judge did not err in finding that the 1985 indemnity covered the costs of complying with the Director’s Order. That said, the court concluded that the motion judge erred in finding that the respondents are entitled to claim indemnification under the indemnity. The court allowed Ontario’s appeal in respect of Resolute: the motion judge erred in finding Resolute enjoyed the benefit of the indemnity as a successor of Great Lakes. Thus, the court granted judgment in favour of Ontario dismissing Resolute’s claim.

As to Weyerhaeuser, the court allowed Ontario’s appeal in part, set aside the dismissal of its summary judgment motion, granted a declaration that Bowater Pulp and Paper Canada Inc. (a corporate predecessor to Resolute) assigned the full benefit of the indemnity to Weyerhaeuser under a 1998 asset purchase agreement, and directed a final adjudication by the court below on the issue of what, if any, rights Weyerhaeuser possessed as assignee of the indemnity at the time the Director’s Order was made in 2011. Justice Laskin would have allowed Ontario’s appeal in full, determining that Weyerhaeuser could not enforce the indemnity.

Chronology of Events

In the 1960s, the Dryden Paper Company Limited (“Dryden Paper”) owned and operated a pulp and paper mill in Dryden, Ontario. In 1971 Dryden Paper constructed a waste disposal site (“WDS”) on lands it owned to serve as a burial site for mercury-contaminated waste from the chlor-alkali plant. From 1971 to 1981, eight concrete cells were buried at the WDS. The cells contained stabilized mercury contaminated sludge, as well as mercury contaminated rubble and equipment from the demolished chlor-alkali plant.

In 1976, Dryden Paper and Dryden Chemicals amalgamated to form Reed Ltd. (“Reed”).

In 1979, Great Lakes purchased Reed. Ontario agreed to limit the combined liability of Great Lakes and Reed for any environmental damages caused by Reed prior to Great Lakes’ purchase of the Dryden operations to $15 million.

Between 1980 and 1984, the Governments of Canada and Ontario engaged in mediation with the Islington and Grassy Narrows First Nations to address the problems caused by the mercury discharge. Great Lakes was reluctant to contribute to any settlement payment unless it obtained releases from liability.

The indemnities required by s. 2.4(a) of the Memorandum of Agreement (“MOA”) from Ontario to Great Lakes and Reed in respect of the “issues” were contained in a scheduled document to the settlement’s December 16, 1985 Escrow Agreement entitled, “Ontario Indemnity,” which was signed by Ontario, Great Lakes, Reed, and Reed International P.L.C. (“Ontario Indemnity”). The interpretation of this indemnity lies at the heart of this litigation.

The post-1985 corporate history of Great Lakes is complex. For the purposes of this appeal, it suffices to note that in 1998, Great Lakes became Bowater, which in turn in 2010 became part of Abitibi-Consolidated Inc., which in 2012 became the respondent, Resolute.

In August 1998, Weyerhaeuser entered into an agreement with Bowater to purchase certain assets used in the Dryden pulp and paper business. Severance of the WDS property from the rest of the Dryden realty could not be obtained before closing of the agreement. As a result, severance of the WDS property ultimately was obtained about two years later, at which time Weyerhaeuser reconveyed the WDS to Bowater on August 25, 2000.

Weyerhaeuser sold the Dryden paper plant to Domtar Inc. in 2007.

In April 2009, AbitibiBowater Inc. and certain related companies, including the owner of the WDS, Bowater filed for protection under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”).

The Director’s Order made clear that the named parties were not relived from complying with any other applicable order or with future orders issued in accordance with the EPA, as circumstances might require.

Weyerhaeuser filed a notice of appeal to the Environmental Review Tribunal seeking to revoke or amend the Director’s Order. Weyerhaeuser commenced this action against Ontario in May 2013.

Issues:

(1) Does the Ontario Indemnity cover the costs of complying with the Director’s Order?

(2) Do the Respondents enjoy the benefit of the Ontario Indemnity?

(3) Did the motion judge err in holding Weyerhaeuser was an assignee of the Ontario Indemnity?

(4) Is Weyerhaeuser entitled to claim indemnification under the Ontario Indemnity for the costs of complying with the Director’s Order?

(5) Did the motion judge err in holding Weyerhaeuser was a “successor” under the Ontario Indemnity?

(6) Does Resolute enjoy the benefit of the Ontario Indemnity?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The motion judge did not err in law, or commit a palpable and overriding error on any question of mixed fact and law or question of fact, in arriving at his conclusion that the Ontario Indemnity entitled an indemnitee to be indemnified for the costs, losses, expenses, liabilities, or obligations it incurred or might incur as a result of the Director’s Order.

There was no legal error in the motion judge’s statement that the interpretation of a contract should start with the language of the contract. The plain meaning of the words in a contract is the logical place to start the contractual interpretation exercise. The decision-maker must always turn his or her mind to the factual matrix when interpreting a contract and the motion judge’s reasons disclose he did so.

The motion judge also did not err in law by ignoring the true nature of an indemnity. The language of an indemnity is appropriately read more broadly than covering simply claims by third parties (TransCanada Pipelines Ltd. v. Potter Station Power Ltd. Partnership (2002), 35 B.L.R. (3d) 62). The motion judge held the Ontario Indemnity contained clear and unambiguous language covering losses caused by the first party indemnitor.

Finally, the motion judge’s interpretation of the Ontario indemnity did not result in an unlawful fettering of legislative discretion. The Province has not sought by legislation to relieve itself from the financial obligations it assumed voluntarily in the Ontario Indemnity. Absent such legislation, Ontario remains bound by the terms of the deal it struck.

(2) No. Whether Weyerhaeuser or Resolute enjoy the benefit of the Ontario Indemnity turns on the determination of the second issue of contractual interpretation raised in this appeal: the meaning of the enurement clause in s. 6 of the Ontario Indemnity.

(3) The degree of specificity used by parties to identify assigned assets is a matter of negotiation and choice. Here, the parties chose to use general language to describe the “purchased assets’, including assigned contracts.

(4) The incomplete appeal record regarding the 2007 Domtar transaction is insufficient to permit the Court of Appeal to exercise its fact-finding powers under ss. 134(1) and (4) of the Courts of Justice Act, R.S.O. 1990, c. C.43 to determine that issue.

(5) The motion judge erred in his application of Brown v. Belleville (City), 2013 ONCA 148, 114 O.R. (3d) 561 to the interpretation of the enurement clause in the Ontario Indemnity. With respect, he failed to explain how the facts in this case, which differ so materially from those in Brown, could support an interpretation of the word “successor” in reference to a corporation as meaning something other than a corporate successor.

(6) The Court held that Ontario never formally conceded that Resolute, as the corporate successor of Great Lakes, had the benefit of the Ontario Indemnity. When Bowater assigned the full benefit of the Ontario Indemnity to Weyerhaeuser under the 1998 APA, it did not retain any right relating to the indemnity that it could pass on down the corporate family tree to a successor corporation. Accordingly, Resolute has no legal interest in the Ontario Indemnity upon which it can assert a claim against Ontario.

Dissent [Laskin J.A.]

(1)No. Justice Laskin concluded that the motion judge’s interpretation reflects both errors of law and is unreasonable. Properly interpreted, the 1985 Indemnity covers only pollution claims brought by third parties against the respondents. It does not indemnify the respondents for the costs of complying with the Director’s Order.

Holding: Appeal allowed.

Ernst & Young Inc. v. Essar Global Fund Limited, 2017 ONCA 1014

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

Counsel:

Patricia D.S. Jackson, Andrew D. Gray, Jeremy Opolsky, Alexandra Shelley and Davida Shiff, for the appellants Essar Global Fund Limited, New Trinity Coal, Inc., Essar Ports Algoma Holding Inc., Essar Ports Canada Holding Inc., Algoma Port Holding Company Inc., Port of Algoma Inc., and Essar Steel Limited

Clifton P. Prophet, Nicholas Kluge and Delna Contractor, for the respondent Ernst & Young Inc. in its capacity as Monitor of Essar Steel Algoma Inc. et al.

Eliot N. Kolers and Patrick Corney, for the respondent Essar Steel Algoma Inc.

Peter H. Griffin, Monique Jilesen and Kim Nusbaum, for the appellants GIP Primus, L.P. and Brightwood Loan Services LLC

Keywords: Corporations, Oppression, “Complainant”, Derivative Actions, Canada Business Corporations Act, Sections 238 and 241, Bankruptcy and Insolvency, Companies’ Creditors Arrangement Act

Facts:

Algoma owns steel production operations and, in late 2013, was faced with a liquidity crisis. It is owned by the parent company, Essar Global, through its subsidiaries. Its investments are managed by Essar Capital. On September 26, 2016, Newbould J. granted an order authorizing the Monitor appointed under the Companies’ Creditors Arrangement Act (“CCAA”) to commence and continue proceedings under s. 241 of the Canada Business Corporations Act (“CBCA”) for oppression against Algoma’s parent, the appellant Essar Global Fund Limited (“Essar Global”), and the remaining appellants, other companies owned directly or indirectly by Essar Global (the “Essar Group”). The action arose in the context of a recapitalization of Algoma and a transaction between Algoma and Port of Algoma Inc. (“Portco”), two companies indirectly owned by Essar Global, in which Algoma’s port facilities in Sault Ste. Marie (the “Port”) were conveyed to Portco (the “Port Transaction”).

The trial judge found the Port Transaction and other conduct of Essar Global to be oppressive and granted a remedy that was designed to address that oppression. Essar Global and some of the members of the Essar Group, together with GIP, appeal from that judgment. The appellants advance a number of arguments, many of them factual, in support of their appeal. The appellants’ two principal legal submissions are first, that the Monitor lacked standing to bring an oppression claim and second, that the alleged harm was to Algoma and that therefore the appropriate redress was a derivative action.

Issues:

(1) Did the Monitor lack standing to be a complainant under s. 238 of the CBCA?

(2) Could the claim of the Monitor only be brought as a derivative action under s. 239 of the CBCA rather than an oppression action under s. 241 of the CBCA?

(3) Did the trial judge err in his analysis of reasonable expectations?

(4)Did the trial judge err in his analysis of wrongful conduct and harm?

(5)Did the trial judge err in tailoring a remedy?

(6) Was there procedural unfairness?

(7) Should the fresh evidence be admitted?

(8) Should leave to appeal costs be granted to GIP and the costs award varied?

Holding: Appeal dismissed.

Reasoning:

(1) No. The Court found that a monitor can be a complainant under the CBCA and should have been made one in this instance, however that will only occur on rare occasions. Factors a CCAA supervising judge should consider when exercising discretion as to whether a monitor should be authorized to be a complainant include whether:

(i) there is a prima facie case that merits an oppression action or application;

(ii) the proposed action or application itself has a restructuring purpose, that is to              say, materially advances or removes an impediment to a restructuring; and

(iii) any other stakeholder is better placed to be a complainant.

These factors are not exhaustive, and none of them is necessarily dispositive; they are simply factors to consider. In the circumstances that presented themselves here, the CCAA supervising judge was justified in providing authorization. A prima facie case had been established; the Monitor had reviewed and reported to the court on related party transactions; the oppression action served to remove an insurmountable obstacle to the restructuring; and the Monitor could efficiently advance an oppression claim, representing a conglomeration of stakeholders, namely the pensioners, retirees, employees, and trade creditors, who were not organized as a group and who were all similarly affected by the alleged oppressive conduct.

(2) No. There will be circumstances in which a stakeholder suffers harm in the stakeholder’s capacity as stakeholder, from the same wrongful conduct that causes harm to the corporation. Where the harm alleged was solely harm to the corporation, the case falls into an overlapping category. The question is whether the impugned conduct is “oppressive” and, if so, whether the stakeholder has suffered harm in its capacity as a stakeholder as a result of that conduct.

(3) No. There was evidence of subjective expectations before the trial judge. The trial judge also drew reasonable inferences from the evidence and circumstances that existed at Algoma in 2014 in support of the expectations relied upon by the Monitor, as he was entitled to do. The trial judge also correctly noted that, due to the fact-specific nature of the inquiry into reasonable expectations, not all listed factors must be satisfied in any particular case. There was conflicting evidence before the trial judge and it was for the trial judge to weigh the evidence and make factual findings. Based on the record before him, those factual findings were available to him.

(4) No. The trial judge recognized that the trade creditors, employees, pensioners and retirees were not parties to, nor did they play any role in, the amended Plan of Arrangement proceedings. The trial judge did not make his finding of wrongful conduct based on Essar Global’s breach of the Equity Commitment Letter. Rather, he found that the totality of Essar Global’s conduct regarding the Recapitalization and Port Transaction satisfied the wrongful conduct requirement. Taken in context, the trial judge made no error in his treatment of the release in favour of Essar Global.

While the reasons of the trial judge on Essar Global’s cash contribution are admittedly confusing, having regard to the record before him and reading the reasons as a whole, the Court was not persuaded that the trial judge misunderstood Essar Global’s contribution to the recapitalization. Indeed, the causal connection between Essar Global’s equity commitment and the Port Transaction is a factual matter and the trial judge’s factual finding was supported by the evidence.

The trial judge also correctly described the business judgment rule. However, the Court made two additional points with respect to the business judgment rule. First, the rule shields business decisions from court intervention only where they are made prudently and in good faith. Second, the rule’s protection is available only to the extent that the Board of Directors’ actions actually evidence their business judgment.

The Court held that it is a contrivance for Essar Global to impugn the trial judge’s conclusion regarding the business judgment rule on the basis that an independent committee was not required. Although it is true that an independent committee was not legally or technically required, the Board’s decision not to strike one, in the circumstances surrounding the restructuring transactions, spoke volumes. The totality of the evidence supported the Board’s lack of good faith, and rendered the business judgment rule inapplicable.

(5) No. Trial judges have broad latitude to fashion oppression remedies based on the facts before them. The trial judge properly identified the need to avoid an overly broad remedy and varying the transaction as he did was one such way. The trial judge’s remedy removes Portco’s control rights and, after GIP is paid, restores the Port to the ownership of Algoma. If GIP becomes the equity owner of Portco, its consent will be required to any change of control.  Unlike a damages award, the remedy was responsive to the oppressive conduct. Further, the remedy granted preserves the security GIP had bargained for and therefore GIP has not suffered any prejudice as a result of the remedy. Finally, regarding the issue of set-off, the Court noted that Newbould J.’s subsequent ruling is a full answer to GIP’s arguments on this point, and ensures that GIP will not suffer any prejudice as a result of the remedy granted in response to Essar Global’s oppressive conduct.

(6) No. The trial judge was the supervising CCAA judge and deeply acquainted with the facts of the restructuring. Of necessity, and on agreement of all parties to the oppression action, the timelines for pleadings, productions, and examinations were truncated. Additionally, no party objected at trial that the process had been procedurally unfair. Given the context and the complexity of the dispute, the pleadings were not as clear as they might have been in a less abbreviated schedule.  That said, on a review of the record, the Court was not persuaded that there was any procedural unfairness with respect to the claims or that the appellants did not know the case they had to meet.

(7) No. In both its original and its amended statement of claim, the Monitor alleged that representatives of Essar Global were members of Algoma’s Board and exercised de facto control over Algoma, such that they made decisions for the benefit of Essar Global while unfairly disregarding the interests of Algoma’s stakeholders. Essar Global cannot claim to have been caught by surprise by the issue of the Board’s independence being in play. The fresh evidence could have been obtained with reasonable diligence prior to trial. Regardless, the evidence would not have affected the result at trial, and is not conclusive of any issue on appeal.

(8) No. The Court held that there was no basis on which to interfere with the costs award of the trial judge as there was no error in principle in the trial judge’s exercise of discretion.

Stekar v. Wilcox, 2017 ONCA 1010

[Simmons, Cronk and Paciocco JJ.A.]

Counsel:

M A Klaiman, for the appellant

P E Trudelle, for the respondent

Keywords: Wills & Estates, Testamentary Capacity, Suspicious Circumstances, Vout v. Hay, [1995] 2 S.C.R. 876, Fresh Evidence

Facts:

Following the trial of an issue over the course of a six-day hearing, the trial judge granted a declaration that the Will of Jerrald McNamara (the “Deceased”) dated May 21, 2012 (the “2012 Will”), not be admitted to probate, dismissed the appellant’s probate application, and awarded costs in favour of the respondent (Wilcox) in the total amount of $100,000, payable by the appellant and Frank Stekar and Guilio D’Ambrosi, jointly and severally. The appellant appeals from the denial of probate for the 2012 Will.

Issues:

(1) Did the trial judge err in determining that there were suspicious circumstances surrounding the preparation and execution of the 2012 Will?

(2) Did the trial judge err in applying the test for testamentary capacity and in finding that the Deceased lacked testamentary capacity at the time of the execution of the 2012 Will?

(4) Did the trial judge err in holding that the Deceased had no knowledge of and failed to approve the contents of the 2012 Will?

Holding: Appeal dismissed.

Reasons:

(1) No. At the appeal hearing, the appellant conceded that although some of the circumstances cited by the trial judge may not have been suspicious, others were. As a result, the appellant did not press his challenge to the trial judge’s finding of suspicious circumstances. Suspicious circumstances present included the fact that the Deceased provided for a radical change from his previous will, that the 2012 Will was typed despite the deceased not owning a computer, and that in the days prior to the making of the 2012 Will the deceased had made various contradictory statements regarding the identity of the intended beneficiaries. The circumstances present in this case, which are firmly anchored in the evidentiary record, strongly support the trial judge’s finding of suspicious circumstances surrounding the 2012 Will.  This key finding is unassailable.

(2) No. The trial judge held, correctly, that the appellant bore the burden of proving the Deceased’s testamentary capacity.  The presumption of testamentary capacity otherwise applicable was displaced by the suspicious circumstances regarding the preparation and execution of the 2012 Will.  It therefore fell to the appellant, as a matter of law, to establish the Deceased’s testamentary capacity, as well as his knowledge and approval of the 2012 Will: see for example, Vout v. Hay, [1995] 2 S.C.R. 876.

There was evidence at trial that in the two months prior to the making of the 2012 Will, the Deceased was involuntarily hospitalized for a lengthy period (about six or seven weeks) during which he suffered from hallucinations, delusions and confusion and was confined to a psychiatric ward.  On his discharge from hospital on April 20, 2012, he continued to suffer from what medical personnel described as “shakable” delusions.  In other words, the Deceased’s delusional state, while not intractable, persisted following his discharge from hospital.  Further, on June 1, 2012, just ten days after the execution of the 2012 Will, the appellant was re-admitted to hospital while exhibiting confusion and reduced alertness. On this evidence, which was fully canvassed by the trial judge, there can be no sustainable suggestion that the Deceased’s testamentary capacity was free from doubt at the time of the execution of the 2012 Will. The trial judge was entitled to conclude that his medical condition, including his delusional state and any personality disorder from which he may have suffered, clearly bore on his mental health and, hence, on the question of his testamentary capacity. Moreover, the trial judge’s reasons confirm that he was alert to the test for testamentary capacity and that he properly applied it to the facts of this case.

(3) No. The trial judge did not find, as a fact, that the Deceased lacked knowledge of and failed to approve the contents of the 2012 Will. Rather, he held that the appellant fell short of meeting his clear burden to establish such knowledge and approval. This conclusion was inescapable on the record at trial.  Specifically, it was supported by: i) the fact that the testamentary dispositions under the 2012 Will were completely at odds with the Deceased’s testamentary intentions as communicated to his treating physician and various friends in the 60 days prior to the execution of the 2012 Will, as well as with the provisions of the 1999 Will; ii) the fact that the 1999 Will was handwritten by the Deceased himself, whereas he could not have prepared the typed 2012 Will; iii) the absence of any evidence at trial regarding the instructions for or the preparation of the 2012 Will; and iv) the absence of any evidence from Joy Vassal, who was present when the 2012 Will was executed and stamped and signed it.

The fresh evidence that the appellant seeks to tender on appeal does not alter the conclusions set out above.

Toronto-Dominion Bank, N.A. v. Lloyd’s Underwriters, 2017 ONCA 1011

[Simmons, Brown and Fairburn JJ.A.]

Counsel:

Gary H. Luftspring and Sam R. Sasso, for the appellants London Underwriters and Axis

Jamieson Halfnight and Anne Juntunen, for the appellants Chubb Insurance Company of Canada and Liberty Mutual Insurance Company

Christopher Reain and Clarence Lui, for the appellant Arch Insurance Company and Arch insurance Canada Ltd.

Peter Greene and David Vaillancourt, for the appellant AIG Insurance Company of Canada and/or AIG Commercial Insurance Company of Canada and/or AIG Excess Liability Insurance International Limited

William Blakeney and Thomas Galligan, for the appellants, XL Insurance company PLC and/or XL Insurance Limited, Endurance Speciality Insurance Ltd., Houston Casualty Company and Markel Bermuda Limited and/or Max Bermuda Ltd.

Eric A. Dolden and Gerry J. Gill, for the appellants Allied World Assurance Company Ltd.

William G. Scott and Housep Afarian, for the respondent TD Bank, N.A.

Keywords: Insurance law, Coverage, Bankers Comprehensive Crime, Professional Indemnity and Directors’ and Officers’ Liability,,  Contractual Interpretation Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, 85 O.R. (3d) 254, Civil Procedure, Summary Judgment, Procedural Fairness

Facts:

The issues on appeal relate to a partial summary judgment granted in relation to an insurance policy. TD Bank, N.A. (the “Bank”) is a named insured under a “Bankers Comprehensive Crime, Professional Indemnity and Directors’ and Officers’ Liability Programme” (the “insurance policy”) issued by the appellants, a syndicate of insurers (the “insurers”). The insurance policy is divided into two parts. The second part provides directors and officers liability coverage. The first part is divided into two sections: a financial institutions bond (“fidelity coverage”, for, among other things, claims involving employee dishonesty) and a financial institutions professional liability policy (“professional liability coverage”, for, among other things, claims involving errors or omissions by the financial institution).

A Florida lawyer and customer of the Bank ran a Ponzi scheme involving the fraudulent sale of non-existing interests in structured settlements supposedly handled by his law firm. Substantial funds placed by investors in the scheme flowed through the law firm’s accounts at the Bank. After the scheme collapsed, about 19 investor groups sued the Bank. One investor group obtained judgment against the Bank based on claims for fraudulent misrepresentations by Bank employees and conduct by Bank employees that aided and abetted the fraudster.

Following that judgment, the Bank settled the other investor claims. The Bank then sought indemnity under both the professional liability coverage and fidelity coverage sections of the insurance policy for amounts paid to the investor groups. The appellants have denied coverage under both sections. In this action, the Bank seeks a declaration that it is entitled to indemnity under the professional liability section of the insurance policy for loss relating to the Ponzi scheme and damages for breach of contract in the amount of $300,000,000, the amount of the available coverage. Further, to the extent that coverage is excluded under that section of the policy, the Bank seeks a declaration that it is entitled to indemnity and damages under the fidelity coverage section of the policy. The Bank brought a motion for partial summary judgment while documentary production was underway and prior to oral discovery. In its motion, the Bank sought a declaration concerning the interpretation of one element of the preamble to the fidelity coverage section of the insurance policy. The interpretation sought related to the conduct of one former employee in relation to three of the investor groups.

The motion judge granted partial summary judgment. He declared that the Bank “sustained ‘direct financial loss’ within the meaning of the second paragraph of Section One (A) of the Policy regarding at least some of the funds deposited [in the law firm’s] accounts at [the Bank] by [three of the investor groups].” The insurers appeal from the partial summary judgment.

Issues:

(1) Did the motion judge err in granting partial summary judgment?

Holding: Appeal allowed.

Reasoning:

Yes. In granting partial summary judgment, the motion judge made four material errors, rendering the judgment fundamentally flawed.

The first error was failing to properly interpret Rule 20 insofar as the bank’s motion did not seek judgment on all or part of any of the claims set out in the prayer for relief in its Statement of Claim.

The second error was failing to interpret the policy as a whole. The motion judge ignored the fundamental principle of contractual interpretation that a provision in a contract must be interpreted in light of the contract as a whole: Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, 85 O.R. (3d) 254, at para. 24

The third error was adopting a theory of liability not advanced by the parties. The motion judge adopted a theory not pleaded or advanced by the parties (that the Bank held the funds deposited by investors into the law firm’s accounts as a constructive trustee). This was procedurally unfair.

The fourth error was misconstruing the relief sought by the appellants. In determining this was an appropriate case in which to grant partial summary judgment, the motion judge relied on his view that the insurers were asking him to grant reverse summary judgment – in other words, to hold that the Bank did not suffer “a direct financial loss” – and thus were effectively acknowledging that this was an appropriate case for summary judgment. This finding was also procedurally unfair.

Cumulatively, the errors identified resulted in the motion judge granting partial summary judgment of a kind not available under Rule 20, following a procedurally unfair motion process, which was characterized by the motion judge ignoring a fundamental principle of contractual interpretation.

Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

G Mackenzie, B Mackenzie and D Strelshik for the appellant

B Roti, for the respondents

Keywords: Torts, Negligence, Personal Liability of Employees Acting in the Course of Their Employment, London Drugs Ltd. v. Kuehne & Nagel International Ltd., [1992] 3 S.C.R. 299

Facts:

The appellant Abigail Sataur pleaded that she was injured when a barista at a Starbucks store in Brampton poured scalding hot water on her hands. Through her Litigation Guardian, Ms. Sataur sued Starbucks, the barista (Jane Doe) and the manager of the store, Danielle Bovenberg, for negligence. She has alleged that each of the two individual defendants owed her a duty of care and that each was personally liable for breaching their duty.  On a motion brought by Starbucks, the motion judge struck the Statement of Claim against the individual defendants on the grounds that it did not disclose a reasonable cause of action and that suing the individual defendants amounted to an abuse of process.

Issues:

(1) Did the motion Judge err in law in striking the Statement of Claim against both individual defendants?

Holding:

Appeal allowed.

Reasoning:

(1) The motion judge found that “the general rule remains that employees are not liable for what they do within the scope of their authority and on behalf of their corporation”. This is not the case. As per London Drugs Ltd. v. Kuehne & Nagel International Ltd., [1992] 3 S.C.R. 299 “It has always been accepted that a plaintiff has the right to sue the person who was negligent, regardless of whether the employee was working for someone else or not.”

Further, the motion judge also held that the pleading against the individual defendants was an abuse of process because they were named parties solely to obtain discovery. The Court of Appeal found, however, that it is not an abuse of process to bring a lawsuit against individual defendants for the purpose of obtaining discovery from them, if the plaintiff has pleaded a proper cause of action against those individual defendants. Therefore since there was a proper cause of action, it was not an abuse of process to bring an action for this purpose.

Short Civil Decisions

Chavdarova v. The Staffing Exchange, 2017 ONCA 996

[Hourigan and Brown JJ.A. and Himel J.]

Counsel:

Lyudmila Chavdarova, for the appellant

Michael Polvere, for the respondent

Keywords: Appeal Book Endorsement, Failure to Comply with Pre-Trial Order, Evidence, Damages, Appeal Allowed

Toronto-Dominion Bank v. Froom, 2017 ONCA 998

[Simmons, Lauwers and Pardu JJ.A.]

Counsel:

Arthur Froom, in person by videoconference

Todd J. Burke, for the respondent

Keywords: Contract Law, Administrative Dismissal, Jurisdiction

Whitfield v. Whitfield, 2017 ONCA 995

[Hourigan, Brown JJ.A. and Himel J.]

Counsel:

Dr. Anges Whitfield, appearing in person

Matthew Gourlay, for the respondent, Bryan Whitfield

Keywords: Torts, Sexual Assault, Defamation, Jurisdiction

Lee v. McGhee, 2017 ONCA 997

[Hourigan, Brown JJ.A. and Himel J.]

Counsel:

Robin Brown, for the moving party

Byeongheon Lee, appearing in person

Keywords: Human Rights Law, Discrimination, Motion to Dismiss, Ontario Human Rights Code, s. 46.1(2), Courts of Justice Act, s. 134(3)

Pitney v. Toronto (Police Services Board), 2017 ONCA 1005

[Doherty, Benotto and Miller JJ.A.]

Counsel:

Linda Pitney, appearing in-person

Carole Tovell, appearing in-person

Rebecca Bush and Kathryn Shani, for the respondents

Keywords: Torts, Police Liability, Summary Judgment

1079268 Ontario Inc. v. GoodLife Fitness Centres Inc., 2017 ONCA 1012

[Cronk, Rouleau and Huscroft JJ.A.]

Counsel:

John K. Downing and Brian Whitwham, for the appellant

Kevin D. Sherkin, Elizabeth Barrass and Carmine Scalzi, for the respondent

Keywords: Real Property, Commercial Leases, Costs

1268223 Ontario Limited v. Fung Estate, 2017 ONCA 1003

[Feldman, Fairburn and Nordheimer JJ.A.]

Counsel:

Eduardo F. Lam, for the appellant

Justin M. Jakubiak & Sara Hickey, for the respondent

Keywords: Estates Law, Family Law, Property, Gift, McNamee v. McNamee

Lord v. Clearspring Spectrum Holdings L.P., 2017 ONCA 1016

[Doherty, Benotto and Miller JJ.A.]

Counsel:

Arthur Hamilton and Jed Blackburn, for the appellants

Robert Staley, Alan Gardner and William Bortolin for the respondents

Keywords: Contracts, Interpretation, Arbitration Clauses, Oppression

Dashti v. Moghimi, 2017 ONCA 1018

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

Veena Pohani, for the appellant

Joel Etienne and Naila Waheed, for the respondent

Keywords: Family Law, Equalization of Net Family Property, Matrimonial Home, Family Law Act, s. 5(6)

Criminal Decisions

 R v. M.R., 2017 ONCA 985

[Simmons, Lauwers and Pardu JJ.A]

Counsel:

Mark Halfyard, for the appellant

Andrew Hotke, for the respondent

Keywords: Criminal Law, Assault, Sentencing, Conditional Discharge

R v. Sanchez, 2017 ONCA 994

[Epstein, Paciocco and Nordheimer JJ.A.]

Counsel:

David M. Humphrey and Jill D. Makepeace, for the appellant

Christine Tier, for the respondent

Keywords: Criminal Law, Assault, Sexual Assault, Sexual Interference

R v. Hassan, 2017 ONCA 1008

[Epstein J.A.]

Counsel:

Colin Wood, for the applicant

Jeanette Gevikoglu, for the respondent

Keywords: Criminal Law, Drug Trafficking, Sentencing, Bail, Criminal Code, s. 679(4)

R v. Marshall, 2017 ONCA 1013

[Juriansz, Pepall and Trotter JJ.A.]

Counsel:

Alison Craig, for the appellant

Deborah Krick, for the respondent

Keywords: Publication Ban, Criminal Law, Sexual Assault, Evidence, Jury Charge

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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Photo of John Polyzogopoulos John Polyzogopoulos

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with matters ranging from appeals, to injunctions, to corporate, breach of contract and other business litigation, to estates and matrimonial litigation, and to debtor-creditor and insolvency litigation. John also represents amateur sports organizations in contentious matters and advises them in matters of internal governance. John can be reached at 416-593-2953 or jpolyzogopoulos@blaney.com.