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Good afternoon,
Following are summaries of this week’s civil decisions of the Court of Appeal of Ontario.

The most significant decision of the week was easily Mega International Commercial Bank (Canada). In that case, the Court confirmed that the limitation period to bring claims for contribution and indemnity are not hard-capped at two years from the date a defendant was served with the plaintiff’s claim. Rather, section 18 of the Limitations Act, 2002 only creates a rebuttable presumption. The discoverability test set out in section 5 still applies, and if met, can extend the limitation period for bringing claims for contribution and indemnity.

Other topics covered this week included another decision in the residential schools class action, damages for breach of a fixed term personal services contract, breach of a non-solicitation covenant, an unpleasant dispute between neighbours, medical negligence, coverage for a mortgagor under a property insurance policy taken out by a mortgagee, a claim for damage to cargo under a marine insurance policy, leave to appeal and extension of time to appeal.

Wishing all the mothers a Happy Mother’s Day!

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

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

Table of Contents

Fontaine v. Canada (Attorney General), 2018 ONCA 421

Keywords: Civil Procedure, Class Actions, Jurisdiction, Mootness, Standing, Deemed Undertaking, Evidence, Privilege, Rules of Civil Procedure, Rules 30.1.01 and 31.11(8)

Mohamed v. Information Systems Architects Inc., 2018 ONCA 428

Keywords: Contracts, Personal Services, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Termination, Duty of Good Faith Performance, Damages, Mitigation, Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256

Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429

Keywords: Torts, Solicitors’ Negligence, Contracts, Guarantees, Civil Procedure, Limitation Periods, Contribution and Indemnity, Discoverability, “Appropriate Means”, Fraudulent Concealment, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 18

Kalair v. Central 1 Credit Union, 2018 ONCA 434

Keywords: Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Standard of Review, Deference, R. v. Gatfield, 2016 ONCA 23

MD Physician Services Inc. v. Wisniewski, 2018 ONCA 440

Keywords: Contracts, Employment, Restrictive Covenants, Non-Solicitation, Enforceability, Ambiguity, Elsley Estate v. J.G. Collins Agencies Ltd.,  [1978] 2 S.C.R 916

Robert v. Assis, 2018 ONCA 442

Keywords: Torts, Trespass, Intrusion Upon Seclusion, Nuisance, Abuse of Process, Reasonable Apprehension of Bias, Fresh Evidence

Crump v. Fiture, 2018 ONCA 439

Keywords: Torts, Medical Negligence, Standard of Care, Causation, Reasons for Decision

Rill v. Adams, 2018 ONCA 443

Keywords: Civil Procedure, Leave to Appeal, Torts, Medical Negligence, Standard of Care

Hanson v. Totten Insurance Group Inc., 2018 ONCA 446

Keywords: Real Property, Contracts, Mortgages, Property Insurance, Coverage, Named Insureds, Insurable Interest, Subrogation

Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438

Keywords: Contracts, Insurance, Shipping, Summary Judgment, Evidence, Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423

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Civil Decisions

Fontaine v. Canada (Attorney General), 2018 ONCA 421

[Hoy A.C.J.O., Juriansz and Miller JJ.A.]

Counsel:

Margaret L. Waddell and Fay K. Brunning, for the appellants Claimant H15019, Claimant K-10106 and M.

Catherine A. Coughlan and Brent Thompson, for the respondent Attorney General of Canada

Peter C. Wardle, for the intervenor

Diane Soroka, David Schulze and Maryse Décarie-Daigneault, for the Independent Counsel

Keywords: Civil Procedure, Class Actions, Jurisdiction, Mootness, Standing, Deemed Undertaking, Evidence, Privilege, Rules of Civil Procedure, Rules 30.1.01 and 31.11(8)

Facts:

These appeals arise out of the implementation of the Indian Residential Schools Settlement Agreement (2006) (the “IRSSA”). The IRSSA is a settlement agreement that resolved class actions and pending individual actions across Canada against the Attorney General of Canada and other parties implicated in the tragic history of abuse perpetrated on indigenous children at residential schools. Among other things, the IRSSA provides for financial compensation to these victims. All eligible class members who had resided in a residential school are entitled to payment of a minimum amount, called a “Common Experience Payment”. The IRSSA also provides that class members who allege they suffered serious physical, sexual or psychological harm at a residential school may apply for additional compensation through the Independent Assessment Process (“IAP”).

This appeal involves St. Anne’s Indian Residential School in Fort Albany, Ontario. The appellants sought a declaration that Canada had breached its disclosure obligations under the IRSSA by refusing to produce transcripts of examinations for discovery from a related action (the Cochrane action). The administrative judge dismissed H-15019’s Request for Directions (“RFD”). He concluded that Canada had not breached its disclosure obligations under the IRSSA by refusing to produce the Cochrane Transcripts.

K-10106 and M sought extensive, far-reaching relief in their RFD. The administrative judge considered two preliminary issues: did they satisfy the test to obtain legal standing to bring their RFD and, if so, did the court have jurisdiction to provide the broad relief requested? The administrative judge concluded that K-10106 and M did not satisfy the test to obtain standing, the court did not have jurisdiction to grant most of the relief they sought, and, of the remaining items, there was no good reason for the court to exercise its jurisdiction. The appellants appeal the orders dismissing their RFDs.

Issues:

(1) Is H-15019’s appeal moot, and, if so, should the court exercise its discretion to hear his appeal?

(2) Does the deemed undertaking rule apply to the Cochrane transcripts?

(3) Was the administrative judge’s interpretation of the Order and the IRSSA unreasonable?

(4) Did the administrative judge err by failing to lift the deemed undertaking?

(5) Are the Cochrane Transcripts protected by settlement privilege?

(6) Did the administrative judge err in finding K-10106 and M did not have standing?

Held: Appeal dismissed.

Reasoning:

(1) Yes, the appeal is moot, but should still be heard by the court. Further disclosure could not impact him, because he has already been awarded the highest amount available, but the circumstances warrant the court hearing H15019’s appeal. Unquestionably, an adversarial relationship continues to prevail between the appellants and Canada. All appear, represented by counsel. Further, judicial economy favours determining these issues.

(2) No. The discovery evidence at issue was obtained in 62 distinct civil actions instituted in Cochrane by 154 survivors of St. Anne’s. H-15019 was not a plaintiff in any of the Cochrane Actions. He argues that the evidence of a survivor obtained in a civil proceeding commenced by that survivor can be used for the purpose of an IAP of a different survivor because they are the same proceeding. They are clearly not the same proceeding, and they involve different claimants. Rule 31.11(8) is inapplicable. Most of the Cochrane Actions settled before the advent of the IRSSA. No other actions could be or were subsequently brought in relation to the subject-matter of those settled actions.

(3) No. The interpretation of the IRSSA is a question of mixed fact and law reviewable for palpable and overriding error. There is no basis to interfere with the administrative judge’s conclusions that Canada did not breach its disclosure obligations in refusing to produce the Cochrane Transcripts. The deemed undertaking rule was not displaced by the IRSSA or the Applications Judge’s Order.

(4) No. While the administrative judge did not specifically address this argument in the reasons that are the subject of this appeal, he rejected it in an earlier decision regarding the disposition of documents created within the IAP. The administrative judge was entitled to consider the fact that considerable information was already available to Claimant H-15019 in determining whether the interests of justice outweighed the prejudice to the examinees of setting aside the deemed undertaking and providing further disclosure to him. His assessment of the interests of justice was not infected by a palpable and overriding error.

(5) No. The administrative judge agreed with Canada that the Cochrane Transcripts were covered by settlement privilege and disagreed with Claimant H-15019 that Canada had not met the evidentiary burden of showing that the discoveries were communications made with a view to settlement. Given the findings above, it was not necessary to determine whether there was an adequate basis for the administrative judge’s finding.

(6) Yes. Given the broad scope of their RFD, the administrative judge’s standing analysis was tainted by his focus on their complaints regarding the lawyers. The Court would have granted K-10106 and possibly M standing. However, this point is irrelevant, as there is no basis to interfere with the administrative judge’s conclusion that the court does not have, or should not exercise, its jurisdiction to order the broad entitlement to re-hearings that K-10106 and M seek, or to order a re-hearing of K-10106’s claim. There is also no basis to interfere with the administrative judge’s conclusion that the court should not exercise its case-by-case jurisdiction in the case of K-10106.

Mohamed v. Information Systems Architects Inc., 2018 ONCA 428

[Feldman, Watt, Paciocco JJ.A.]

Counsel:

J A LeNoury and R MacKinnon, for the appellant

L Sabsay, for the respondent

Keywords: Contracts, Personal Services, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Termination, Duty of Good Faith Performance, Damages, Mitigation, Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256

Facts:

The appellant engaged the respondent to provide technological consulting services under an Independent Consulting Agreement (“ICA”) for a six-month project that had an anticipated start date of November 2, 2015, and an anticipated end date of May 31, 2016. In the ICA, the parties agreed that the respondent would be an independent contractor. The project was with Canadian Tire, whose agreement with the appellant included a term that the appellant would not send any consultant who had a criminal record, except with Canadian Tire’s consent. After agreeing to work full-time under the ICA, the respondent resigned from his permanent, full-time employment.

Around November 2, 2015, the respondent told the appellant – before he signed the ICA and before he was assigned to the Canadian Tire project – that he had a dated criminal record from high school. He also agreed to a background security check. On November 4, he again disclosed his criminal record to the appellant in a declaration of criminal record form. On November 5, he began work at Canadian Tire, but when the security check report came back one month later disclosing the criminal record, Canadian Tire received a copy and, as a result, asked the appellant to replace the respondent. Although the respondent asked the appellant to consider him for other roles, the appellant terminated the respondent’s engagement on December 10, 2015, relying on para. 11.III of the ICA.

The respondent sued the appellant for breach of the ICA, claiming six months’ remuneration, that is, the full amount that would have been paid had the contract been completed, on the basis that the ICA was a fixed term contract where the respondent had no duty to mitigate his damages. Both parties moved for summary judgment, where the respondent asked the court to award damages for breach of contract, and the appellant asked the court to dismiss the action. Neither side took the position that a trial of any issue was required. The motion judge awarded judgment to the respondent in the full amount.

Issues:

(1) Did the motion judge make extricable errors of law in his approach to the interpretation of the termination clause of the ICA?

(2) Did the motion judge err in finding that the appellant was entitled to terminate the ICA under para. 11.III but that it did not do so in good faith?

(3) Did the motion judge err in law in finding that the ICA was a fixed term contract, and by applying the principle from the court’s decision in Howard v. Benson that the measure of the respondent’s damages is the amount owing for the unexpired term of the contract with no duty to mitigate?

Holding: Appeal dismissed.

Reasoning:

(1) Yes. Because the issue before the court was the interpretation and enforcement of a non-standard form contract between the parties, on appeal, the principles articulated by the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633 apply. As a result, significant deference is owed to the trier of fact on the findings regarding the interpretation of the particular contract.

At para. 39 of his reasons, the motion judge specifically identified the principle of good faith as “an operative principle in the performance of contracts” – not a principle applicable to the interpretation of contracts. Applying the principle of good faith to the performance of the termination provision, he concluded at paras. 39-40 that the principle “qualifies ISA’s rights to terminate without cause”, such that the appellant could not “simply, and in an unfettered way, determine that it is in their best interest to replace Mr. Mohamed and then terminate the contract”. He added at para. 42 that the appellant was “mistaken in thinking that it had an unfettered right to terminate Mr. Mohamed’s contract” because the case law supported the respondent’s understanding that “there was some element of good faith or trust in the exercise of the provision”. The motion judge then went on to find that the appellant breached the ICA by not acting in good faith when it exercised its rights under the termination provision.

Having made the finding of breach, the motion judge nevertheless went on to find, essentially in the alternative, that the termination clause was void for vagueness. The motion judge made two extricable errors of law in the application of the principles of contractual interpretation in reaching this conclusion.  First, having found that the meaning of the termination provision was clear when read literally, there was no basis to apply the contra proferentem rule. That rule may be used only to resolve an ambiguity (see: Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, at pp. 899-900), not to create one.  Second, having found the meaning of the termination clause to be clear, the subsequent conclusion that the clause is vague and uncertain because of the differing notice requirements is inconsistent, and does not bear logical scrutiny. The motion judge identified no basis on the record for concluding that it was not the intention of the parties to require notice of termination only where the respondent’s engagement was being terminated for breach of the ICA, or that the clause could not be implemented as it reads. The result of finding two extricable errors of law in the motion judge’s finding that the termination clause is unenforceable is that the finding cannot stand and must be set aside. However, nothing ultimately turns on this conclusion, because of the motion judge’s other finding that the appellant was obliged to exercise its rights under para. 11.III of the ICA in good faith and that it breached the agreement by failing to do so.

(2) No. Although the appellant had a prima facie unfettered right to terminate the contract, it had an obligation to perform the contract in good faith and therefore to exercise its right to terminate the contract only in good faith. Although the motion judge did not state explicitly the basis for concluding that the appellant breached its good faith obligation, he had reviewed the facts and circumstances earlier in his reasons. Because the respondent disclosed his criminal record to the appellant right at the beginning, before signing the ICA and before commencing the project with Canadian Tire, and complied with all the requirements of the security check, the appellant’s reliance on the criminal record to terminate the contract one month later was not a good faith exercise of its rights under the termination clause of the ICA.

(3) No. Although he was willing to accept that his engagement could be terminated with no payment when the appellant deemed it to be in its best interests to do so, the respondent expected, as he was entitled to do, that the appellant would only exercise its rights under the termination clause in good faith. When that did not occur, the respondent was entitled to damages. Although the contract does not provide for what damages would flow from a failure to terminate in good faith, based on the specific terms and circumstances of this contract, it is reasonable to infer that the parties intended that if the power to terminate was not exercised in good faith, then damages for breach would be based on the wages owed for the remaining term of the agreement, without a duty to mitigate.

Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429

[Doherty, Paciocco and Nordheimer JJ.A.]

Counsel:

Eliot N. Kolers and Zev Smith, for the appellant

M Scott Martin and Marco P. Falco, for the respondents

Keywords: Torts, Solicitors’ Negligence, Contracts, Guarantees, Civil Procedure, Limitation Periods, Contribution and Indemnity, Discoverability, “Appropriate Means”, Fraudulent Concealment, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 18

Facts:

This is an appeal from summary judgment dismissing the appellants’ third party claims for contribution and indemnity against the respondent lawyer and law firm as statute-barred.

Mr. Y and Ms. L, the appellants, commenced the underlying third party claims against their former lawyer, Mr. S and his law firm, Sun & Partners, after Mega International Commercial Bank (Canada) (“Mega International”) sued Mr. Y and Ms. L on personal guarantees they provided to Mega International’s predecessor, International Commercial Bank of Cathay (Canada) (“International Commercial”). Those personal guarantees were given to secure financing for a Toronto development property that Mr. Y and Ms. L were involved in. Mr. Y and Ms. L claim that their lawyer, Mr. S, was instructed to obtain releases from those personal guarantees, but failed to do so – hence their claims for contribution and indemnity.

Mr. Y and Ms. L did not sue Mr. S and his law firm until more than two years after Mega International served Ms. L with a claim against her on her personal guarantee. The motion judge held that s. 18 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B establishes an absolute two-year limitation period for contribution and indemnity claims, which commenced when Ms. L was served with Mega International’s claim. Hence, he found that Mr. Y’s and Ms. L’s third party claims were statute-barred.

Issues:

(1) Does s. 18 of the Limitations Act, 2002 incorporate discoverability principles?

(2) If the discoverability principles under ss. 4 and 5 of the Limitations Act, 2002 apply, should the motion judge’s findings relating to Mr. Y’s and Ms. L’s knowledge of their claims against Mr. S, made in the context of the fraudulent concealment determination, be relied upon to resolve the discoverability issue?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The court held that the motion judge erred in law in holding that the Limitations Act, 2002, s. 18 creates an absolute limitation period of two years for the commencement of contribution and indemnity claims. Properly interpreted, s. 18 works with other provisions of the Limitations Act, 2002 to create a presumed start date for the running of the limitation period. That presumed limitation period start date will result in a claim for contribution or indemnity being statute-barred two years after the party seeking contribution or indemnity is served with a claim in the proceeding in which contribution or indemnity is sought, unless that party proves that the claim for contribution or indemnity was not discovered and was not capable of being discovered through the exercise of due diligence until some later date.

Section 18 of the Limitations Act, 2002, the section directly in issue in this appeal, provides:

Contribution and indemnity

18(1) For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.

The court stated that s. 18 takes on meaning when it is linked to the Limitations Act, 2002, s. 5(2). Subject to the absolute 15-year limitation period in s. 15(2), ss. 5(2) and 18 together establish the presumptive limitation period for contribution and indemnity claims – a presumptive limitation period that incorporates the discoverability principles outlined in ss. 4 and 5(1). The court emphasized the interaction between ss. 5(2) and 18 for two reasons.

First, s. 18 is linked expressly to s. 5(2) in its opening phrase, “For the purposes of subsection 5(2) and section 15”. This opening phrase cannot be read as a direction to exclude contribution and indemnity claims from the operation of ss. 5(2) and 15.

Second, the thing or fact that s.18 deems to have occurred is the same thing or fact that is used in s. 5(2) as the trigger for the presumptive limitation period in ss. 4 and 5. Section 18 deems “the day on which the first alleged wrongdoer was served with the claim in respect of which contribution or indemnity is sought [to be] the day the act or omission on which the alleged wrongdoer’s claim is based took place.” Meanwhile, s. 5(2) treats “the day the act or omission on which the claim is based took place” to be the day on which a person with a claim is presumed to know that they have a claim within the meaning of s. 5(1). Section 5(2) is the only other provision in the Limitations Act, 2002 apart from s. 18 that uses the operative phrase underlined in the preceding sentences. The two sections are clearly meant to intersect and work together. In effect, s. 18 provides the variable used in s. 5(2) as the trigger for the presumed limitation period for contribution and indemnity claims.

The court therefore held that the motion judge erred in his interpretation of s. 18. The two-year limitation period prescribed by ss. 4, 5(2), and 18 for contribution and indemnity claims presumptively begins on the date of service of a claim in respect of which contribution and indemnity is sought. That presumptive limitation period start date, however, can be rebutted by the discoverability principles prescribed in s. 5 of the Limitations Act, 2002.

(2) No.  In law, fraudulent concealment differs from discoverability in its focus and its requirements. The court stated that the motion judge nonetheless made a finding while addressing the fraudulent concealment claim that Mr. S relies on as resolving the discoverability issue in his favour. Specifically, the motion judge found, at para. 57 of his reasons, that there was no fraudulent concealment because Mr. Y and Ms. L were “aware of the essential facts giving rise to a claim against the alleged wrongdoer”, Mr. S.

The court held that the finding that Mr. Y and Ms. L were aware of the essential facts giving rise to a claim against Mr. S is not a finding of discoverability within the meaning of the Limitations Act, 2002, s. 5(1). The court cannot, therefore, utilize this holding to dismiss this appeal on the basis that the motion judge resolved the discoverability issue indirectly.

The reason the motion judge’s “knowledge” finding is not the same as a discoverability finding is because the knowledge finding does not resolve the discoverability consideration in s. 5(1)(a)(iv) of the Limitations Act, 2002 with respect to whether the party with the claim knew that bringing the claim was legally appropriate (the “appropriate means” branch of the discoverability test).

It would not be appropriate in these circumstances to treat a finding that the defendants had knowledge of the main action as a finding that a third party claim against their lawyer was discoverable. The motion judge did not overtly address whether Mr. Y or Ms. L knew it to be legally appropriate to bring their third party claims against Mr. S. In the court’s view, this was enough to dispose of the appeal.

The court stated that the decision of the motion judge to grant summary judgment was undermined by his misinterpretation of the Limitations Act, 2002, s. 18. Simply put, that error clouded the motion judge’s understanding of the nature and complexity of the case he was being asked to resolve on summary judgment. Had he appreciated the nature of the dispute before him, i.e., when Mr. Y and Ms. L discovered that it was legally appropriate to commence a third party claim against their own lawyer, he may have found a genuine issue requiring a trial.    

Kalair v. Central 1 Credit Union, 2018 ONCA 434

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

KEW, for the moving party

DS and AF, for the responding party

Keywords: Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Standard of Review, Deference, R. v. Gatfield, 2016 ONCA 23

Facts:

Mr. K’s motion for an extension of time to file a notice of appeal – which he had missed by 2 weeks – was dismissed by Roberts J.A. on October 11, 2017. Justice Roberts was satisfied that Mr. K had formed the requisite intention to appeal, provided an adequate explanation for the short delay, and there was no prejudice occasioned to the respondent from the delay. However, she concluded that Mr. K had failed to meet “the admittedly low threshold of demonstrating that there was some merit to the proposed appeal such that the court should not reasonably deny the important right of appeal”.

Pursuant to s. 7(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43, Mr. K moved before a panel to review the decision of Roberts J.A. and to set aside her order or vary it. As additional support for this review, and by way of an affidavit dated April 26, 2018 contained in a supplementary motion record filed April 27, 2018, Mr. K outlines proposed merits of the appeal that were not before Roberts J.A.

Issues:

(1) Did the motion judge err in dismissing the appellant’s motion for an extension of time to file a notice of appeal?

Holding: Appeal dismissed.

Reasoning:

(1) No. In Mr. K’s April 26th affidavit he provides particulars of “merits of the appeal that were not before Roberts J.A.”. In the affidavit he claims that “much of the legal merits of [his] appeal were not known to [him] and [his] new counsel until more recently when [his] previous counsel provided information and parts of the file”.

A full panel of the court owes considerable deference to a chambers judge’s decision regarding whether to grant an extension of time: R. v. Gatfield, 2016 ONCA 23, at para. 11.

The conclusory statements in the affidavit before Roberts J.A. do not support the argument that she may have made an error in dismissing Mr. K’s motion. To the contrary, Roberts J.A. addressed all the relevant factors and properly applied those factors to the evidentiary record before her. In particular, she concluded there was no merit to the appeal. The panel agreed with that conclusion. Mr. K failed to provide any reason (even in his new material) for why the panel should interfere with the exercise of discretion by Roberts J.A.

MD Physician Services Inc. v. Wisniewski, 2018 ONCA 440

[MacPherson, Hourigan and Benotto JJ.A.]

Counsel:

Nigel Campbell and Doug McLeod, for RBC Dominion Securities Inc.

Kenneth Dekker and Annie Tayyab, for the respondents

Keywords: Contracts, Employment, Restrictive Covenants, Non-Solicitation, Enforceability, Ambiguity, Elsley Estate v. J.G. Collins Agencies Ltd.,  [1978] 2 S.C.R 916

Facts:

The appellants are two former employees of the respondent companies (“MD”). They, together with their current employer, the respondent RBC Dominion Securities Inc. (“RBC”), appeal from the trial judge’s finding that they breached the non-solicitation terms of their employment contract with MD.

The appellants were hired by MD in 2003 and 2005 respectively. They each signed identical non-solicitation agreements which provided as follows:

Non-Solicitation. The Employee agrees that the Employee shall not solicit during the Employee’s employment with the Employer and for the period ending two (2) years after the termination of his/her employment, regardless of how that termination should occur, within the geographic area within which s/he provided services to the Employer.

“Solicit” means: to solicit, or attempt to solicit, the business of any client, or prospective client, of the Employer who was serviced or solicited by the Employee during his/her employment with the Employee.

The appellants Wisniewski left MD in 2013 to join RBC, a competitor. On their first day of work with RBC, the appellants wrote out from memory a list of MD’s clients that they had serviced and began phoning them.  The trial judge found they had breached their non-solicitation covenants.

On appeal, they allege that the agreement was ambiguous in regard to the term “solicit”, the geographic scope, the applicability to prospective clients, and the temporal length of the restriction. They also allege errors relating to the formation of the contracts generally.

Issue: Was the agreement so ambiguous with respect to the meaning of “solicit” as to render it unenforceable?

Holding:  Appeal dismissed.

Reasoning:

No. The meaning of the word “solicit” is obvious. The calls made by the appellants to former clients were not – as the appellants suggest – courtesy calls. They were clearly made with a view to bringing the clients to RBC. The calls were made immediately after being hired by RBC, they were made personally, by telephone and followed a predetermined structure. The evidence supports the trial judge’s conclusion that the calls were to solicit business.

The trial judge properly directed himself with respect to the legal principles that address the enforceability of a non-solicitation clause. He referred to and applied the test in Elsley Estate v. J.G. Collins Agencies Ltd. He concluded that MD is a specialized company dealing with physicians and has a proprietary interest in ensuring that its business is not used by financial planners to take customers away from it.

He found that the clause was reasonable in terms of the public interest. It protects MD without unduly compromising its employees. There was no ambiguity with respect to the two year term.

The scope of the proscribed activities was clearly defined by the agreement. With respect to the formation of the contracts, the trial judge found that the individual appellants were provided with a copy of the non-solicitation provisions before starting their employment. This was a factual finding open to him on the evidence as were other factual findings made in his judgment. There is no reason for appellate intervention.

Robert v. Assis, 2018 ONCA 442

[Hourigan and Benotto and Fairburn JJ.A.]

Counsel:

J Sebastian Winny, for the appellants

Sharon Ilavsky, for the respondents

Keywords: Torts, Trespass, Intrusion Upon Seclusion, Nuisance, Abuse of Process, Reasonable Apprehension of Bias, Fresh Evidence

Facts:

The appellants brought an action against their next door neighbour seeking injunctive relief and damages for: (i) invasion of privacy arising from video and audio cameras which they say were trained on their property; (ii) nuisance arising from outside speakers, floodlights and the occasional errant hockey puck; (iii) trespass arising primarily from the construction of two fences; and (iv) abuse of process arising from an application for a peace bond made by the respondents before a justice of the peace. The trial judge dismissed the action. The appellants allege that the trial judge failed to decide the case on the merits, provided inadequate reasons and demonstrated a reasonable apprehension of bias.

Issues:

(1) Did the trial judge err in dismissing the action?

Held: Appeal dismissed.

Reasons:

The trial judge carefully detailed the evidence of all parties and the claims made by the appellants. He concluded that the intrusion upon seclusion claim had not been proved. He found that there was no credible evidence to support the allegation. He also found that the claims by both parties were “hyperbolized”. He found that the nuisance had not been established, as the appellants never approached the respondents about such things as lights and music. The “couple of incidents” in which hockey pucks wound up in the appellants’ yard did not rise to the level of nuisance. Although a great deal of time at trial was spent on trespasses, the trial judge was not satisfied that the trespass with respect to the construction of the fence took place. Also, there was no evidence from a surveyor to establish where the lot line was in connection with the alleged moving of the stakes. There was no evidence of abuse of process as the trial judge found no dishonesty in relation to the application for a peace bond. The reasons read as a whole, indicate that findings of credibility were essential to all of these determinations. Those findings are entitled to deference. Further, the reasons clearly provide the parties with the rationale for the trial judge’s decision.

The bias allegation appears to arise from the trial judge’s question to counsel and subsequent comments about the fact that the parties did not take advantage of various mediation services. There is a strong presumption of judicial impartiality and a heavy burden on a party who seeks to rebut this presumption. The judge’s inquiry into mediation was eminently reasonable.

The fresh evidence is not admissible. It consists of further information about security cameras and a suggestion that the trial judge wrote bullet point comments about his reasons to a legal publisher, reacted with anger at the conclusion of counsel’s submissions, and asked about mediation. The evidence could have been adduced at trial, and it is clear that the proposed evidence is more of the same evidence already rejected by the trial judge.

Crump v. Fiture, 2018 ONCA 439

[Hourigan, Benotto and Fairburn JJ.A.]

Counsel:
S E. Batner and C. Piovesan, for the appellant
A Mladenovic and J. V. Leone, for the respondents

Keywords: Torts, Medical Negligence, Standard of Care, Causation, Reasons for Decision

Facts:

The respondent first complained of abdominal pain on May 20, 2000. By the evening of May 23, she was still suffering from pain and her mother took her to a walk-in clinic. The clinic doctor concluded that she likely had acute appendicitis with perforation. He referred her to the emergency room at the local hospital.

The emergency room concluded that she potentially had appendicitis and referred her for a surgical consult. The appellant, a general surgeon, examined her and concluded that she could be suffering from: (1) mesenteric adenitis secondary to respiratory tract infection and viremia; (2) menstrual pain related to cramps; or (3) early appendicitis.

The appellant did not order an ultrasound or admit her to the hospital. He discharged her and gave instructions to her mother regarding the circumstances upon which the respondent should be returned to the hospital.

By May 31, the respondent had a rising fever and was referred to the hospital where she underwent surgery. Her appendix had ruptured causing significant damage to her bowel.

Issues:

(1) Did the trial judge err in determining the standard of care of a general surgeon?

(2) Did the trial judge err in finding that causation had been established?

(3) Were the reasons of the trial judge neither timely nor sufficient?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellant’s evidence was that he instructed the respondent’s mother to bring her back if her condition did not get better but the evidence of the respondent’s mother  was that she was to bring her daughter back only if her condition worsened. The trial judge preferred the mother’s evidence. In addition, evidence from the medical charts corroborated the mother’s version of the instructions. The trial judge did not err in finding that the appellant should have prioritized appendicitis as a “top drawer consideration”. This was supported by the evidence. The trial judge made no palpable and overriding error in finding that the appellant fell below the requisite standard of care for a general surgeon as at the relevant time.

(2) No. It is not a fair reading of the trial judge’s reasons to say that he solely relied on a different ranking of differential diagnosis in finding causation. The trial judge also relied on the finding that the appellant was negligent in his discharge instructions. The fact that the family doctor advised the respondent to follow the appellant’s advice does not interfere with the chain of causation as the expert witness testified that in the circumstances a family doctor would defer to the advice given by a surgeon.

(3) No. While there are parts of the reasons that would have benefitted from a more detailed analysis, this court was able to understand the trial judge’s conclusions on the issues and how he reached them. Also, while there was an inordinate delay in releasing reasons, in the context of this case, the delay did not impede the trial judge’s ability to fairly decide the case.

Rill v. Adams, 2018 ONCA 443

[Strathy C.J.O., Roberts and Paciocco JJ.A.]

Counsel:

W.R., acting in person
L. Brusven, for the respondents

Keywords: Civil Procedure, Leave to Appeal, Torts, Medical Negligence, Standard of Care

Facts:

In the underlying action, the moving party alleged negligent medical diagnosis and drug treatment against the respondents. However, that action was dismissed because after being granted more than six months to provide satisfactory evidence that the respondents had breached the standard of care, the moving party still had not done so.

The moving party appealed to the Divisional Court. The Divisional Court judge dismissed the appeal giving careful reasons why the moving party’s action could not succeed in the absence of evidence of a breach of the standard of care. The judge considered both the fact that the moving party was self-represented, and the fact that it would be unfair to submit the parties to a proceeding that had no reasonable prospect of success. The moving party seeks leave to appeal to the Court of Appeal.

Issues:

(1) Should leave to appeal be granted?

Holding:

Motion dismissed.

Reasoning:

(1) No. The appellant has not identified any error in the reasons of the Divisional Court judge. There is no question of law or matter of public importance.

Hanson v. Totten Insurance Group Inc., 2018 ONCA 446

[MacFarland, LaForme and Epstein JJ.A.]

Counsel:

S Pickard, for the appellants

M Pearce and B Stephenson, for the respondents Totten Insurance Group Inc. and Lloyd’s Underwriters

M Stocks, for the respondents JM and LM

Keywords: Real Property, Contracts, Mortgages, Property Insurance, Coverage, Named Insureds, Insurable Interest, Subrogation

Facts:

This is an appeal from an order dismissing the appellants’ motion for summary judgment in a mortgage enforcement action. The respondents, Lloyd’s Underwriters (“Lloyd’s”) and Totten Insurance Group Inc. (“Totten”), had issued a policy of insurance to the respondents, JM and LM, the mortgagees of a property owned by the appellants, the mortgagors. Following a loss to the property, Lloyd’s paid JM and LM their mortgage loss and claimed, through subrogation, against the mortgagors. The mortgagors brought a motion for summary judgment in which they sought a determination as to whether the Lloyd’s policy covered their interest in the property so that the payment on the policy extinguished the mortgage debt.

In the usual situation of a homeowner with a mortgaged property, the homeowner, as required by standard mortgage terms, obtains and pays for a policy of insurance in his or her name. That policy will cover the homeowner’s interest in the property as well as the interest of the mortgagee. It is common practice for such policies to contain what is known as a standard mortgage clause. Such a clause will protect the interest of a mortgagee despite an act of the insured homeowner that would otherwise breach policy conditions. See, generally: Gowling Lafleur Henderson LLP, Marriott and Dunn: Practice in Mortgage Remedies in Ontario, loose-leaf (2018-Rel. 1), 5th ed. (Toronto: Thomson Reuters, 1994), vol. 2 at pp. 50-7 to 50-13; and Walter M. Traub, Falconbridge on Mortgages, loose-leaf (2017-Rel. 25), 5th ed. (Toronto: Thomson Reuters, 2017), at pp. 38-7 to 38-15.

However, in this case the appellants, who had obtained a private mortgage in the sum of $250,000 from JM and LM, were unable to obtain property insurance. JM and LM obtained a policy of insurance for $200,000 in their own names, which was underwritten by Lloyd’s. That policy stated that it protected only the interest of JM and LM as mortgagees.

Issues:

(1) Did the Lloyd’s policy also cover the appellants’ interest in the property?

(2) Is Lloyd’s entitled to exercise its right of subrogation having paid out the mortgagees’ interest?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellants argue that the motion judge erred in reaching the conclusion that the policy was only for the mortgagees’ benefit. They contend that the only reasonable interpretation of Standard Charge Term 16 is that a mortgagee must obtain insurance that will cover the interests of both the mortgagor and mortgagee when a mortgagor does not, for whatever reason, insure the subject property. The appellants argue that the language in Standard Charge Term 16 “…otherwise the Chargee may provide therefor and charge…” (emphasis added) can only mean that the mortgagee/chargee, if it chooses to obtain insurance coverage, must obtain the same coverage that the mortgagor/chargor is required to obtain. They argue the word “therefor” can only refer back to the language in the earlier portion of the provision which outlines the mortgagor’s/chargor’s obligation to insure.

There are a number of difficulties with this argument. First, the obligation to insure lies on the mortgagor/chargor in the first instance and is mandatory – the mortgagor/chargor will “immediately insure”. There is no obligation on the mortgagee/chargee to insure. That portion of the clause dealing with the mortgagee’s/chargee’s right to insure is merely permissive – the mortgagee/chargee “may provide therefor” (emphasis added). The appellants’ argument converts the permissive language of this term into a mortgagee’s/chargee’s mandatory obligation to obtain like insurance. Second, as the mortgagees discovered, mortgagees/chargees can only obtain insurance in their own names to cover their own interest in the subject property. The mortgagees do not have an insurable interest in the equity of redemption – only the appellants do. Finally, this Standard Charge Term 16 is for the benefit of mortgagees/chargees. The property is to be insured by the mortgagor/chargor and the cost of that insurance is to be borne by the mortgagor/chargor. The assumption of risk lies with the mortgagor/chargor, not the mortgagee/chargee.

Moreover, the appellants argument that the mortgagors expected that the insurance policy would cover their interest was rejected by the motion judge. Her finding in this regard is well-supported on the record before her.

(2) Yes. Their motion for summary judgment having been dismissed in its entirety, including their request for injunctive relief, there was no remaining impediment to the insurers proceeding with their power of sale proceedings.

Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438

[Doherty and Pepall JJ.A. and Gray J. (ad hoc)]

Counsel:

Rui Fernandes, James Manson, and Sean Lawler, for the appellant

Marc Isaacs and Hilary Weise, for the respondent

Keywords: Contracts, Insurance, Shipping, Summary Judgment, Evidence, Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423

Facts:

The appellant, Broadgrain Commodities Inc., sold 26 containers of sesame seeds to Beidahuang Grain Group Co. Ltd. (“Beidahuang”).  They were to be shipped CIF (‘cost, insurance, freight’) from Tin Can Island in Nigeria to Xingang in China.

The goods were loaded on board the transport vessel on October 15, 2014.  Beidahuang paid the appellant for the goods on December 12, 2014.  The goods arrived in China on December 17, 2014.  The goods had been damaged during transit, but the timing of the damage could not be determined.  The cargo was unfit for human consumption and was sold for salvage.  Beidahuang kept the salvage proceeds.

The goods were insured by the respondent, Continental Casualty Company carrying on business as CNA Canada, under a policy of marine insurance in favour of the appellant.  The appellant sought compensation from the respondent under the insurance policy, but the respondent denied coverage.  The appellant then sued the respondent, who subsequently brought a motion for summary judgment.

Issues:

(1)Did the motion judge err in granting summary judgment based on the finding that the appellant did not sustain any loss since the goods had been paid for in full by Beidahuang?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellant pleaded that the shipments were damaged by contact with water, resulting in a loss of US$550,081.38 to the appellant.  The appellant’s affidavit of documents and examination for discovery were silent on any evidence of loss.  The issue of a loss based on subsequent short-payments by Beidahuang relating to other shipments was first raised in an affidavit filed in response to the respondent’s summary judgment motion.

The court held that as stated by the Supreme Court in Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423, at para. 31: “[A] self-serving affidavit is not sufficient in itself to create a triable issue in the absence of detailed facts and supporting evidence”.

Here, no evidence of any kind was filed to support the allegation of short-payments: no dates, no amounts, no invoices, no credit statements, nothing.  Nor was there any explanation given for the absence of any supporting details or documentation. Accordingly, the court held that there was no palpable and overriding error, and deference is owed to the motion judge’s conclusion that the appellant was paid in full and that there was no credible evidence to the contrary.


Short Civil Decisions

The Catalyst Capital Group Inc. v. Moyse, 2018 ONCA 447

[Doherty, MacFarland and Paciocco JJ.A.]

Counsel:

B H Greenspan, D C Moore and M Biddulph, for the appellant

R A Centa, K Borg-Olivier and D Cooney, for the respondent, Brandon Moyse

K E Thomson, M Milne-Smith and A Carlson, for the respondent, West Face Capital Inc.
Keywords: Costs Endorsement

Cowan v. General Filters Inc., 2018 ONCA 445

[Pepall, Lauwers and Paciocco JJ.A.]

Counsel:

C I R Morrison, for the appellant

C A Chekan, for the respondent Dana Canada Inc. Filter Division

No one appearing for the respondents JC, SC, General Filters Inc., Canadian General Filters Limited, Lippert & Wright Fuels Ltd. also known as Dave Lippert Fuels Ltd., K & S Climate Control, and Oil Tech Plus Ltd.
Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Fusarelli v. Dube, [2005] O.J. No. 4398 (C.A.), Chertow v. Chertow (2001), 146 O.A.C. 141

Criminal Decisions

R v. Gilchrist, 2018 ONCA 430

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

C Gilchrist, in person

L Schwalm, for the respondent
Keywords: Provincial Offences, Driving Without Insurance, Provincial Offences Act, R.S.O. 1990, c. P. 33, Compulsory Automobile Insurance Act, R.S.O. 1990 c. P. 25

R v. Natsis, 2018 ONCA 425

[van Rensburg, Pardu and Miller JJ.A.]

Counsel:

M Henein and M Gourlay, for the appellant

J Klukach and L Schwalm, for the respondent
Keywords: Criminal Law, Impaired Driving Causing Death, Dangerous Driving Causing Death, Expert Evidence, Sentencing

R v. Piccinini, 2018 ONCA 433

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

C Kerr, for the appellant

M Flanagan, for the respondent
Keywords: Criminal Law, Fraud Over $5000, Theft Over $5000, R. v. Kienapple, [1975] 1 S.C.R. 729, Sentencing

R v. Spence, 2018 ONCA 427

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

Counsel:

C Verner and L Beechener, for the appellant

E Nakelsky, for the respondent
Keywords: Criminal Law, Manslaughter, Murder, Accessory After-The-Fact

R v. Hejazi, 2018 ONCA 435

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

M Dineen, for the appellant

C Suter, for the respondent
Keywords: Criminal Law, Breaking and Entering, Sexual Assault with a Weapon, Robbery, Unlawful Confinement, Possession of the Proceeds of Crime, Sentencing

R v Polanco, 2018 ONCA 444

[LaForme, Watt and Nordheimer JJ.A.]

Counsel:

D M Garg, for the appellant

M Gourlay, for the respondent
Keywords: Criminal Law, Summary Conviction, Assault, Assault with a Weapon, Assault Causing Bodily Harm, Theft Under $5,000

Workplace Safety and Insurance Board v. Curtis, 2018 ONCA 441

[Sharpe, Pardu and Fairburn JJ.A.]

Counsel:

David Shulman, for Selvamenan Kathirkamapillai

Andrew Bigioni, for Douglas Koomson

David Curtis and Mark Wiffen, amicus for David Curtis

Keywords: Regulatory Offences, Workplace Health and Safety, Mens Rea, Benefits, Material Change in Circumstances, Duty to Inform, Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16 Sched. A, s. 149(2)

R v. Vu, 2018 ONCA 436

[Simmons, van Rensburg and Nordheimer JJ.A.]

Counsel:

J Norris, for D Vu

C A Chekan, for the respondent Dana Canada Inc. Filter Division

K Schofield and D Stein, for H T P and W W L

N Devlin and J North, for the Public Prosecution Service of Canada
Keywords: Criminal Law, Unauthorized Production of Marijuana, Sentencing, Mandatory Minimum, Canadian Charter of Rights and Freedoms, Section 12, Controlled Drugs and Substances Act, S.C. 1996, c. 19

R v. Williams, 2018 ONCA 437

[Hoy A.C.J.O., MacPherson and Rouleau JJ.A.]

Counsel:

W Cunningham, for the appellant

R Young, for the respondent
Keywords: Criminal Law, Assault Causing Bodily Harm, Dangerous Offenders

 

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.