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Good evening.

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

In Canada Life Insurance Company of Canada v Canada (Attorney General), Canada Life and some of its affiliates carried out a series of purely tax-driven transactions. The purpose of the Transactions was to realize a $168 million tax loss (without having suffered an economic loss in that amount) to offset unrealized foreign exchange gains accrued in the same taxation year. This would avoid paying millions of dollars in tax to CRA. The CRA disallowed the claimed loss in a reassessment. Asserting that it had proceeded on the basis of erroneous advice from its tax advisor, Canada Life applied to the Superior Court for an order setting aside the Transactions and replacing them with other steps that would permit it to enjoy the intended tax benefit, retroactive to the date of the original Transaction. The application was opposed by the CRA, represented by the Attorney General. The application judge, Pattillo J., granted the order requested by Canada Life. The Court of Appeal allowed CRA’s appeal and dismissed Canada Life’s cross-appeal for alternative relief. The Court followed the Supreme Court’s decision in Fairmont Hotels, which restated the test for rectification, and this situation did not meet that test, as there was no “agreement” to be rectified. The Court dismissed the alternative relief sought by Canada Life, stating that it will not exercise inherent or equitable jurisdiction to undo tax-driven transactions just because they do not yield the desired tax consequences. It was noted that Canada Life had alternative remedies available, including a tax appeal and possible E&O claim against its tax advisers.

In Ontario (Children’s Lawyer) v. Ontario (Information and Privacy Commissioner), a father sought access to the files of the Children’s Lawyer in relation to its representation of his children in a custody and access case. He sought such files from the Attorney General under Freedom of Information and Protection and Privacy Act. The Privacy Commissioner ordered the files, which were subject to solicitor-client and litigation privilege, disclosed to the father. The Divisional Court had upheld the Privacy Commissioner’s decision, having applied a reasonableness standard of review. The Court of Appeal, applying a correctness standard of review, set aside the Privacy Commissioner’s decision, primarily on the basis that the records were not within the custody of the Attorney General and were therefore not compellable. While the Children’s Lawyer is a branch of the office of the Attorney General, it operates independently of the AG, does not take instructions from, or report to, the AG, and does not provide access to its records to the AG. To provide access to the records would seriously undermine the role of the Children’s Lawyer as advocate for the rights of children.

In Ontario (Finance) v Traders General Insurance (Aviva Traders), the Motor Vehicle Accident Claims Fund paid out a claim to MVA victims and then pursued the insurer of the owner of the vehicle for reimbursement. The insurer had denied coverage, claiming it had validly cancelled the policy for non-payment of premium. The Court of Appeal upheld the trial judge’s decision that had found that the policy had not been cancelled in accordance with the applicable Statutory Condition. It also upheld the trial judge’s decision declining to find that the Fund’s claim was out of time, permitting the Fund to sue by way of unjust enrichment rather than pursuant to the Insurance Act, which provided for a one-year limitation period.

Other topics covered this week included the breach of an agreement of purchase and sale of land,  whether a termination clause in an employment contract violated the Employment Standards Act, and the appeal route when seeking to review an order of a single judge of the Divisional Court (to a panel of that court, not to the Court of Appeal).

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2053  Email

TABLE OF CONTENTS

Kennelly v Hashemi, 2018 ONCA 558

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Breach, Deposits, Civil Procedure, Adjournments, Self-Represented Litigants

Ontario (Children’s Lawyer) v Ontario (Information and Privacy Commissioner), 2018 ONCA 559

Keywords: Administrative Law, Privacy Law, Freedom of Information, Solicitor-Client Privilege, Litigation Privilege, Standard of Review, Issue of Central Importance to Legal System, Correctness, Freedom of Information and Protection of Privacy Act, RSO 1990, c F 31, Family Law, Custody and Access, Children’s Lawyer, Courts of Justice Act, RSO 1990, c C 43, United Nations Convention on the Rights of the Child, Can. T.S. 1992 No. 3, Dunsmuir v. New Brunswick, 2008 SCC 9

Canada Life Insurance Company of Canada v Canada (Attorney General), 2018 ONCA 562

Keywords: Corporations, Taxation, Tax Planning, Equitable Remedies, Rectification, Rescission, Nunc Pro Tunc, Inherent Jurisdiction, Fairmont Hotels Inc. v Canada (Attorney General), 2016 SCC 56, Canada (Attorney General) v Juliar (2000), 136 OAC 301 (CA), leave to appeal ref’d, [2000] S.C.C.A. No. 621, Jean Coutu Group (PJC) Inc. v Canada (Attorney General), 2016 SCC 55

Ontario (Finance) v Traders General Insurance (Aviva Traders), 2018 ONCA 565

Keywords: Contracts, Automobile Insurance, Termination, Notice, Restitution, Unjust Enrichment, Civil Procedure, Limitation Periods, Statutory Interpretation, Crown Immunity, Evidence, Similar Fact Evidence, Insurance Act, RSO 1990, c I8, ss. 1, 233(3), 258(1), 258(2), Statutory Condition 11(1), Motor Vehicle Accident Claims Act, RSO 1990, c M41, Motor Vehicle Accident Claims Fund, O. Reg. 777/93, Interpretation Act, RSO 1990, c I11, Legislation Act, 2006, SO 2006, c21

Amberber v IBM Canada Ltd, 2018 ONCA 571

Keywords: Employment Law, Contracts of Employment, Interpretation, Termination Without Cause, Statutory Notice Period, Reasonable Notice, Employment Standards Act

Alliance to Protect Prince Edward County v Ontario (Environment and Climate Change), 2018 ONCA 576

Keywords: Administrative Law, Judicial Review, Motions, Orders, Setting Aside, Appeals, Jurisdiction, Courts of Justice Act, ss. 21(3), 21(5), Judicial Review Procedure Act, ss. 6(1)(a), 6(2)

For criminal and regulatory/review board decisions click here


CIVIL DECISIONS

Kennelly v Hashemi, 2018 ONCA 558

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

Counsel:

HH, self-represented

Scott W Beattie, for the respondents

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Breach, Deposits, Civil Procedure, Adjournments, Self-Represented Litigants

Facts:

This is an appeal from the judgment of the application judge declaring that the appellant, HH, was in breach of an agreement of purchase and sale of land dated January 26, 2017 (the “Agreement”) and that the respondent, JE, was entitled to the return of the deposit paid under the Agreement.

The Agreement provided that the closing date was February 14, 2017 (the “Original Closing Date”) but that the seller had the option to delay the closing up to two weeks. The seller exercised this option, as she was not in a position to close on the Original Closing Date. The closing date was thus revised to February 23, 2017. However, the parties agreed to further extend the closing time to 2:30 p.m. on February 24, 2017 (the “Closing Time”) after the appellant was assigned the seller’s rights under the Agreement. Nevertheless, the transaction did not close at the Closing Time.

On the day before the appeal was heard, the appellant advised that he would seek a 60-day adjournment of the appeal to obtain transcripts and hire counsel. He renewed this request at the opening of the hearing. However, the respondents opposed his request for an adjournment.

Issues:

(1) Was the appellant entitled to an adjournment?

(2) Did the application judge err in finding that the appellant breached the Agreement?

Holding: Appeal dismissed.

Reasoning:

(1) No. After hearing the parties’ submissions, the court declined to grant the adjournment sought. The court found that the appellant was aware since at least March 14, 2018, that his counsel would seek to be removed from the record if he were not paid forthwith. Moreover, the appeal was originally scheduled to be heard on April 25, 2018. However, before removing himself from the record, the appellant’s counsel secured an adjournment to provide the appellant with time to retain new counsel or prepare to be self-represented. Nevertheless, there was no evidence provided that he took any steps to retain counsel.

(2) No. The court found that while the Agreement gave the seller the option to delay the closing for up to two weeks beyond the Original Closing Date, it did not give the seller the right to extend the closing a number of times within that period at the seller’s discretion. Accordingly, the Agreement provided that time was of the essence and it was clear that the appellant was not ready, willing or able to close at the Closing Time. Moreover, the appellant did not attempt to further extend the closing date before the Closing Time. The court therefore held that the appellant was not entitled to unilaterally extend the closing date under the Agreement after he failed to complete the transaction at the Closing Time. Consequently, the respondents were entitled to the return of their deposit as the respondents ceased to be obligated to complete the transaction.


Ontario (Children’s Lawyer) v Ontario (Information and Privacy Commissioner), 2018 ONCA 559

[Rouleau, Benotto and Roberts JJ A]

Counsel:
  • I Ross and S Scott, for the appellant, Children’s Lawyer for Ontario
  • S Blake and S Kromkamp, for the respondent, Attorney General for Ontario
  • L Rothstein and J Martin, for the respondent, Information and Privacy Commissioner of Ontario
  • J Mark and M Birdsell, for the intervener, Justice for Children and Youth

Keywords: Administrative Law, Privacy Law, Freedom of Information, Solicitor-Client Privilege, Litigation Privilege, Standard of Review, Issue of Central Importance to Legal System, Correctness, Freedom of Information and Protection of Privacy Act, RSO 1990, c F 31, Family Law, Custody and Access, Children’s Lawyer, Courts of Justice Act, RSO 1990, c C 43, United Nations Convention on the Rights of the Child, Can. T.S. 1992 No. 3, Dunsmuir v. New Brunswick, 2008 SCC 9

Facts:

Two children were the subject of a custody and access dispute between their parents. In 2008, when the children were nine and eleven years old, McCartney J appointed the Children’s Lawyer. The Children’s Lawyer determined that she would provide legal representation to the children pursuant to s. 89(3.1) of the Courts of Justice Act, RSO 1990, c C 43 (the “CJA”).

In May, 2010 Warkentin J made a final order terminating the father’s access to the children as well as all forms of verbal communication. On January 23, 2014, the father requested access to information from the Ministry of Attorney General (“MAG”) pursuant to the Freedom of Information and Protection of Privacy Act, RSO 1990, c F 31 (“FIPPA “). He sought records in the Children’s Lawyer’s litigation files, including both privileged and non-privileged reports, notes, and information. MAG advised the father that it does not have custody or control of the records and FIPPA  does not apply because the office of the Children’s Lawyer represents the independent legal interests of children and does not act on behalf of MAG or the Crown.

The father appealed MAG’s decision to the Information and Privacy Commissioner of Ontario (the “IPC”). The Adjudicator concluded that the records at issue are in MAG’s custody or control. She identified two “overriding considerations” leading to this conclusion: “the undisputed fact that the [Children’s Lawyer] is a branch of [MAG]”; and that “the records at issue were generated in the course of the [Children’s Lawyer] fulfilling its core mandate.” The Adjudicator ordered MAG to issue an access decision to the father, which could be made by the Children’s Lawyer.

The Children’s Lawyer, supported by MAG, applied to the Divisional Court for a judicial review of the Adjudicator’s order. The Divisional Court identified reasonableness as the appropriate standard of review. The Divisional Court concluded that the Adjudicator’s decision was reasonable and consistent with the text and scheme of FIPPA.

Issues:

(1) Did the Divisional Court identify the appropriate standard of review?

(2) Did the Divisional Court err in upholding the Adjudicator’s determination that the Children’s Lawyer’s records are in MAG’s custody or control?

Holding: Appeal allowed.

Reasoning:

(1) No. The appropriate standard of review is correctness. First, the cases of City of Ottawa v Ontario, 2010 ONSC 6835 (“City of Ottawa”) and Ontario (Ministry of the Attorney General) v Ontario (Information and Privacy Commissioner), 2011 ONSC 172, cited by the Children’s Lawyer and MAG applied correctness to judicial reviews of the IPC’s interpretation of “in the custody or under the control”.

Second, even if these decisions have not satisfactorily determined the standard of review, the nature of the question at issue attracts correctness under the second stage of the standard of review analysis. The unique role of the Children’s Lawyer is fundamental to the proper functioning of the legal system. It is thus reviewable on the standard of correctness as per Dunsmuir, at para 60:

[C]ourts must also continue to substitute their own view of the correct answer where the question at issue is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise”. Because of their impact on the administration of justice as a whole, such questions require uniform and consistent answers. [Citation omitted.]

Matters fundamental to the functioning of our legal system remain subject to a correctness standard of review post-Dunsmuir. In Alberta (Information and Privacy Commissioner) v University of Calgary, 2016 SCC 53, Cote J emphasized that that the “importance of solicitor-client privilege to our justice system cannot be overstated. It is a legal privilege concerned with the protection of a relationship that has a central importance to the legal system as a whole”.

(2) Yes. The Children’s Lawyer is not a branch of MAG. Accordingly, the records are not under MAG’s custody or control and are therefore not compellable under FIPPA.

The Children’s Lawyer is an independent statutory office holder appointed by Cabinet through the Lieutenant Governor. She derives her independent powers, duties and responsibilities through statute, common law and orders of the court. While the Children’s Lawyer is administratively structured under and has a funding relationship with MAG, when representing children, the Children’s Lawyer operates separate and apart from MAG, does not take direction or obtain input from MAG, does not provide MAG with access to records relating to children and MAG does not have authority to request them.

Since the Children’s Lawyer is not part of MAG, an analysis is required to determine whether the records are under MAG’s custody or control. In Canada (Information Commissioner) v Canada (Minister of National Defence), 2011 SCC 25(“Minister of National Defence”), the Supreme Court articulated a two-part test for whether records held by bodies that are not part of an institution are under the institution’s control and thus subject to freedom of information requests. Once the relevant test is applied to the child’s records with the Children’s Lawyer, it is clear that MAG does not have control of the records:

1) Do the contents of the requested records relate to a departmental matter?

The answer must be no. MAG plays no part in the records of the Children’s Lawyer. The records do not relate to a departmental matter; MAG has nothing to do with the Children’s Lawyer’s work.

2) Could MAG reasonably expect to obtain a copy of the records upon request?

Again the answer is no. Neither MAG officials nor the Attorney General could reasonably expect to obtain a copy of the requested records.

The Divisional Court in City of Ottawa cited, with approval, ten questions former Commissioner Sidney Linden outlined in IPC Order 120 to be asked when determining whether an institution has custody or control of records. Although the Adjudicator referred to some of these questions, she failed to situate her analysis within the context of the work of the Children’s Lawyer. The Court addressed these ten questions and provided answers based on the context of this particular case:

1) Was the record created by an officer or employee of the institution? 

The records were not created for or on behalf of MAG. The role of the Children’s Lawyer precludes it from acting in the interest of MAG or the Crown in these matters.

2) What use did the creator intend to make of the record?

The records were intended solely for use in litigation on behalf of child clients in custody and access proceedings as ordered by the court. The records were not created for MAG’s use or on behalf of the Crown.

3) Does the institution have possession of the record?

MAG does not have possession of the records. They are exclusively held by the Children’s Lawyer in her legal file.

4) If the institution does not have possession of the record, is it being held by an officer or employee of the institution for the purposes of his or her duties as an officer or employee?

The records are being held by the Children’s Lawyer for the purposes of her independent statutory, legal and fiduciary duties to children, and not as an agent of MAG.

5) Does the institution have a right to possession of the record?  

MAG has no statutory or other right to possess the records. Allowing MAG to have access to, or possession of, the records would violate the duty of the Children’s Lawyer to maintain the confidentiality of her child clients’ records.

6) Does the content of the record relate to the institution’s mandate and functions?

The contents do not relate to MAG’s mandate or functions. The records relate to litigation where the Children’s Lawyer is acting, at the request of the court, independently from MAG in representing child clients who are subjects of custody and access proceedings. These functions are statutorily conferred exclusively on the Children’s Lawyer, and not on MAG or the Attorney General.

7) Does the institution have the authority to regulate the record’s use?

The regulation of the use of these records is within the exclusive authority of the Children’s Lawyer in accordance with her professional obligations to her child clients.

8) To what extent has the record been relied upon by the institution?

MAG has never relied on, or had possession of, these records. The records have only been relied on by the Children’s Lawyer in order to represent the interests of its child clients in litigation.

9) How closely has the record been integrated with the other records held by the institution?

These records have never been integrated with MAG records. The files of the Children’s Lawyer related to legal services provided to children are kept separately from any MAG records. No official or employee outside of the Children’s Lawyer has access to these records.

10) Does the institution have the authority to dispose of the record?

The records are maintained and disposed of in accordance with a records policy established by the Children’s Lawyer in 2006. The Children’s Lawyer does not obtain MAG approval or direction related to its child client records or on its internal policies related to these files.

The Adjudicator’s decision to provide a third party with access to a child’s records would seriously undermine the Children’s Lawyer in her role as advocate for the child. It would also sabotage the child’s heightened privacy rights, eviscerate the work of the Children’s Lawyer and seriously limit the court’s ability to fully address the child’s best interests.


Canada Life Insurance Company of Canada v Canada (Attorney General), 2018 ONCA 562

[Sharpe, Epstein and van Rensburg JJ.A.]

Counsel:

Alexandra Humphrey, Alisa Apostle and Stephanie Hodge, for the appellant/respondent by cross-appeal

Kent Thomson, Stephen Ruby and Sarah Weingarten, for the respondent in appeal/appellant by cross-appeal

Keywords: Corporations, Taxation, Tax Planning, Equitable Remedies, Rectification, Rescission, Nunc Pro Tunc, Inherent Jurisdiction, Fairmont Hotels Inc. v Canada (Attorney General), 2016 SCC 56, Canada (Attorney General) v Juliar (2000), 136 OAC 301 (CA), leave to appeal ref’d, [2000] S.C.C.A. No. 621, Jean Coutu Group (PJC) Inc. v Canada (Attorney General), 2016 SCC 55

Facts:

The Canada Life Insurance Company of Canada (“CLICC”) and certain of its affiliates carried out a series of transactions and events (the “Transaction”) in December 2007. The purpose of the Transaction was to realize a tax loss to offset unrealized foreign exchange gains accrued in the same taxation year. In 2012, the Canada Revenue Agency (“CRA”) disallowed the claimed loss in a reassessment of CLICC’s taxes for 2007. Asserting that it had proceeded on the basis of erroneous advice from its tax advisor, CLICC applied to the Superior Court for an order setting aside the Transaction and replacing it with other steps, retroactive to the date of the original Transaction.

The application was opposed by the CRA, represented by the Attorney General of Canada.

The application judge, Pattillo J., made the order requested by CLICC. Relying on the court’s decisions in Canada (Attorney General) v Juliar (2000), 136 OAC 301 (CA) and Fairmont Hotels Inc. v. Canada (Attorney General), 2016 SCC 56 (“Fairmont Hotels”), the application judge ordered “rectification” of the Transaction, nunc pro tunc.

The Attorney General appealed the decision of Pattillo J. The parties agreed to hold the appeal in abeyance until the Supreme Court released its decision in Fairmont Hotels. The parties now agree that the application judge erred in granting rectification as the recent decision in Fairmont Hotels changed the law on which Pattillo J. relied and restricted the scope of this equitable remedy to the correction of written agreements.

In its cross-appeal, CLICC sought to substitute for the order, made in the court below, a new order that would permit it to achieve the intended tax purpose of the Transaction. CLICC relied on the court’s inherent jurisdiction in equity and equitable rescission, as alternative bases for the relief sought. The cross-appeal was opposed by the Attorney General.

At the heart of the cross-appeal was whether the remedy sought by CLICC is available in the exercise of the court’s jurisdiction in equity to relieve against mistakes in the light of the Supreme Court’s decision in Fairmont Hotels.

Issues:

(1) Is the relief CLICC seeks available under the “inherent jurisdiction of the court” to relieve a party from the effects of a mistake?

(2) Can the order be made through the equitable remedy of rescission?

(3) Should equitable jurisdiction be invoked?

Holding:

Appeal allowed. Cross- appeal dismissed.

Reasons:

(1) No. The relief CLICC sought is not available under the “inherent jurisdiction of the court” to relieve a party from the effects of a mistake.

CLICC asked the court to retroactively alter a corporate transaction that was entered into to achieve a certain tax result and where the result has not been achieved because of a mistake in how the transaction was structured.

The court concluded that CLICC is not entitled to the remedy it is seeking on its cross-appeal, through the exercise of any inherent jurisdiction the court may have to relieve against mistakes. What CLICC is seeking is the same type of intervention, by a different name, that the Supreme Court considered in Fairmont Hotels and Jean Coutu Group (PJC) Inc. v Canada (Attorney General), 2016 SCC 55 (“Jean Coutu”), a companion appeal released on the same day as Fairmont Hotels. The Supreme Court concluded that it is not possible to “rectify” a corporate transaction to retroactively avoid adverse tax consequences. In the court’s view, the remedy CLICC sought, whether characterized as rectification or some other equitable remedy, is precluded by the reasoning in Fairmont Hotels and Jean Coutu.

CLICC relied on 771225 Ontario Inc. v Bramco Holdings Co. (1995), 21 OR (3d) 739 (CA) 47 (“Bramco”) as authority for the court’s general jurisdiction in equity to relieve against mistakes, as separate and independent and having a different meaning from “rectification”, and said that the reasons for rejecting an equitable remedy in Bramco do not apply to its case. The Attorney General argued that Bramco, consistent with Fairmont Hotels, precludes resort to any such equitable jurisdiction to retroactively achieve a tax objective, and in any event would preclude such a remedy where, as here, the applicant has an adequate alternative legal remedy (CLICC has filed a notice of objection to appeal its tax assessment, under s. 23 of the Financial Administration Act, it can apply to the Minister for a remission of tax, and it has a potential legal action against its professional advisor).

The court stated that Fairmont Hotels and Jean Coutu effectively preclude the use of the court’s equitable jurisdiction to refashion a corporate transaction to achieve a specific tax objective, whether or not that was the original intention of the parties to the transaction. The fact that CLICC entered into the Transaction to achieve a particular tax outcome does not remove it from the scope of impermissible retroactive tax planning, which is precluded by these cases.

Whether the court is asked to “rectify” an agreement or to unwind transactions and replace them with other steps because of an error leading to an unplanned tax liability, the objective is to reverse the factual basis of the tax assessment, in order to defeat the tax liability that resulted from the original transaction. As both Fairmont Hotels and Jean Coutu emphasize, tax consequences flow from the transaction the taxpayer undertook, and not from its motivations or objectives. The court cannot substitute one series of transactions for another to avoid an unintended tax result. The relief CLICC seeks is simply rectification by another name.

(2) No. The order cannot be made through the equitable remedy of rescission.

The purpose of rescission is to eliminate a benefit one party has received due to a mistake made by one or both parties to a contract. This is accomplished by cancelling and unwinding the contract and by issuing whatever ancillary orders are necessary to restore the parties to their original rights. Here, however, CLICC sought to have only part of the Transaction rescinded, in order to generate a particular tax outcome. It did not ask the court to rescind the entire Transaction, and to restore it and its affiliates to their original rights, because to do so would not achieve its objective of triggering a loss to set off against its foreign exchange gains.

Accordingly, the court’s decision in Miller Paving Limited v B. Gottardo Construction Ltd., 2007 ONCA 422, governs. It requires the party seeking equitable rescission of a contract to establish that (a) the parties were under a common misapprehension as to the facts or their respective rights; (b) the misapprehension was fundamental; (c) the party seeking to set the contract aside was not itself at fault; and (d) one party will be unjustly enriched at the expense of the other if equitable relief is not granted (at paras. 23, 24, 26 and 31). None of these requirements apply in the present case, nor does CLICC attempt to bring itself within the requirements for equitable rescission of a contract.

(3) No. Equitable jurisdiction should not be invoked.

First, CLICC had adequate alternative remedies to address the adverse tax consequences resulting from the mistake it relied on. As already noted, CLICC had filed a notice of objection to appeal its tax assessment, under s. 23 of the Financial Administration Act. Hence, it could apply to the Minister for a remission of tax, and it had a resultant potential legal action against its professional advisor.

Second, CLICC argued that the requested remedy is required to avoid its own unintended loss, and unjust enrichment to CRA. The court agreed with the Attorney General that, when examined closely, there is nothing that would warrant the intervention of equity as a result of the Transaction carried out by CLICC and its affiliates. CLICC sought to claim a $168 million tax loss without having to trigger a corresponding economic loss. Instead, the Transaction was structured in such a way as to attract the rollover provisions of the Income Tax Act, so that the intended goal was not achieved. This was an error made by CLICC as to the effect of the law. The court stated that there is nothing inequitable about CLICC being taxed on “what it did” rather than on what it intended to achieve. Further, the unjust enrichment that CLICC relied on, including in its amended notice of cross-appeal and argument, is the alleged “windfall gain” to the CRA, which the Supreme Court in Fairmont Hotels explicitly rejected as the basis for equitable relief in such circumstances.


Ontario (Finance) v Traders General Insurance (Aviva Traders), 2018 ONCA 565

[Feldman, MacPherson, and Huscroft, JJA]

Counsel:
Eric K. Grossman for the appellant

Harold W. Sterling and Todd M. Wasserman for the respondent

Keywords: Contracts, Automobile Insurance, Termination, Notice, Restitution, Unjust Enrichment, Civil Procedure, Limitation Periods, Statutory Interpretation, Crown Immunity, Evidence, Similar Fact Evidence, Insurance Act, RSO 1990, c I8, ss. 1, 233(3), 258(1), 258(2), Statutory Condition 11(1), Motor Vehicle Accident Claims Act, RSO 1990, c M41, Motor Vehicle Accident Claims Fund, O. Reg. 777/93, Interpretation Act, RSO 1990, c I11, Legislation Act, 2006, SO 2006, c21

Facts:

In 1999, AL purchased automobile insurance from GAN Canada Insurance (“GAN”). However, AL’s husband PL was the actual registered owner of the vehicle. In 2001, after being unable to withdraw insurance premiums, GAN sent AL a notice of termination of insurance coverage. GAN later terminated the insurance policy and sent AL a refund cheque which she cashed. AL did not inform PL of the cancellation. A few weeks after the policy was cancelled, the friend of PL’s son was operating the vehicle when an accident occurred, killing the driver and injuring the passenger, DB. DB had no automobile insurance or access to family coverage. DB applied to the Motor Vehicle Accident Claims Fund (the “Fund”) for statutory benefits which he later received. He also sued PL but GAN did not defend the action on behalf of PL because it had cancelled the owner’s policy prior to the accident. PL settled the action with DB and DB assigned the judgment to the Respondent Fund pursuant to the Motor Vehicle Accident Claims Act. The Fund paid the amount of the judgment to DB, also pursuant to the Motor Vehicle Accident Claims Act, and began to obtain reimbursement from PL. The Fund also sued GAN for restitution based on unjust enrichment, claiming the insurance policy had not been effectively terminated. GAN was later acquired by the appellant. At trial, the judge found that the notice of termination was not sent to the insured who was, in law, PL and thus the policy remained in force. The trial judge also found the Fund to be entitled to bring a claim for restitution, eliminating a limitation period issue.

Issues:

(1) Did the trial judge err in law by finding that the notice of termination was ineffective because it was not sent to the actual owner of the insured vehicle, when it was sent to the “named insured”?

(2) Did the trial judge err by refusing to admit the proposed similar fact evidence?

(3) Was the Fund required to bring its action under s. 258(1) of the Insurance Act, and if so, is the action-statute barred because it was brought years after the expiry of the one-year limitation period in s. 258(2)?

(4) Did the trial judge err in law by granting the Fund judgment based on unjust enrichment, rather than requiring it to bring its claim under s. 258(1) of the Insurance Act?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellant’s theory was that AL misrepresented herself as the owner of the insured vehicle and that it was entitled to rely on her misrepresentations. That theory failed because the trial judge found that AL made no such misrepresentation, and that the GAN representative never asked who the owner of the vehicle was. Nor did GAN obtain a written application for insurance, which would have asked AL to identify the registered owner of the vehicle to be insured. Section 233(3) of the Insurance Act prohibits the use of statements by an applicant in defense unless the statement is in a signed, written application. As there was no written application, there was no misrepresentation. Further, O. Reg. 777/93 defines “insured” as “a person insured by this contract, whether named or not.” Section 1 of the Insurance Act mandates the owner of the vehicle to be deemed to be the insured. Statutory condition 11(1) stipulates that cancellation of a policy requires giving notice to the insured. As the notice of termination was sent to AL and not PL, the notice did not effectively terminate the automobile insurance policy. The judge made no error.

(2) No. In support of its allegation of misrepresentation, the appellant attempted to lead evidence that, after the accident, other insurers had issued policies to AL as the named insured for vehicles owned by PL. The appellant sought to use it to ask the court to infer that, because AL had been named as insured in subsequent owner’s policies, she must have misrepresented to those insurers that she was the owner of the vehicles. The trial judge found the proposed evidence to be minimally relevant to, and not probative of, the factual issue at hand. There was no basis for interfering with the trial judge’s exercise of discretion.

(3) No. The appellant argued that because the Fund had obtained an assignment of DB’s judgment against PL, it was obliged to bring its action against the appellant under s. 258(1) of the Insurance Act. At the time of the accident, s. 258(1) was governed by a one-year limitation period and the appellant argued that, due to this, the Fund was statute-barred from bringing its action. Both the Interpretation Act, RSO 1990, c I11, and its successor, the Legislation Act, 2006, SO 2006, c21, codify the common law principle of Crown immunity, barring specific language to the contrary. There was no such express provision in the Insurance Act that bound the Crown in 2003, when DB obtained judgment against PL and assigned that judgment to the Fund, or in 2008, when this action was commenced.  Nor was the Crown bound by necessary implication. The Crown was not precluded from bringing its action under s. 258(1) of the Insurance Act and had it done so, it would have been bound by the limitation period. Instead, the Fund brought its claim as an action for unjust enrichment, as it was entitled to do.

(4) No. The trial judge found that the appellant was unjustly enriched because its policy was in force at the time. The appellant argues that the trial judge was not entitled to exercise discretion to award a restitutionary remedy when a statutory remedy was available. The trial judge, however, was not exercising discretion to award an equitable remedy. Rather, she was granting the ordinary form of relief for a claim in unjust enrichment. The Fund did not plead an independent legal wrong and seek a restitutionary remedy in relation to that legal wrong. Rather, it pleaded substantive restitution as a stand-alone cause of action and the trial judge found that the Fund’s claim in unjust enrichment was made out. In these circumstances, the trial judge did not err in restoring to the Fund the monetary amount that it was deprived of by the appellant’s corresponding unjust enrichment.


Amberber v IBM Canada Ltd, 2018 ONCA 571

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

Counsel:

Jennifer Dolman and Lindsay Rauccio, for the appellant

Paul J. Willetts and Andrew N. Vey, for the respondent

Keywords: Employment Law, Contracts of Employment, Interpretation, Termination Without Cause, Statutory Notice Period, Reasonable Notice, Employment Standards Act

Facts:

The respondent was advised on April 19, 2016, that his employment with the appellant would be terminated, without cause, effective July 8, 2016. The respondent claimed an entitlement to pay in lieu of notice at common law based upon a notice period of 16 months. The appellant brought a motion for summary judgment, contending that the respondent’s claim for damages at common law was precluded by the termination clause in the contract of employment.

While the motion judge held that the termination clause does not violate the minimum requirements of the Employment Standards Act (ESA), she concluded that the termination clause was ambiguous, that it fails to rebut the common law presumption of reasonable notice, and that it did not clearly set out an intention to deprive the respondent of his entitlement to damages at common law. In her reasons, the motion judge referred to the principle that any intention to rebut common law reasonable notice requirements must be clear in order to be enforceable and any ambiguity is to be resolved in favour of the employee. She held the clause to be unenforceable and dismissed the motion. The employer appealed.

Issues:

(1) Did the motion judge err in concluding that the termination clause does not violate the ESA?

(2) Did the motion judge err in concluding that the termination clause was ambiguous and did not clearly exclude an entitlement to damages at common law?

Holding: Appeal allowed.

Reasoning:

(1) No. The respondent argued that the following portion of the termination clause violated the ESA:

In the event that the applicable provincial employment standard legislation provides you with superior entitlements upon termination of employment (“statutory entitlements”) than provided for in this offer of employment, IBM shall provide you with your statutory entitlements in substitution for your rights under this offer of employment.

The court held that the motion judge was correct in holding that this sentence of the clause is effective to ensure that a terminated employee receives what he or she is entitled to under the ESA. The court found that the sentence was not analogous to a severability clause. It did not purport to sever any part of the termination provision. Rather, the court held that it ensures that any portion of the termination clause that falls short of the ESA must be read up so that it complies with the ESA.

(2) Yes. The fundamental error made by the motion judge was that she subdivided the termination clause into what she regarded as its constituent parts and interpreted them individually. In the court’s view, the individual sentences of the clause cannot be interpreted on their own. Rather, the clause must be interpreted as a whole and when read as a whole, there can be no doubt as to the clause’s meaning.

In the court’s view, the motion judge failed to apply well-established principles of construction. She did not interpret the termination clause as a whole. Rather, she strained to find an ambiguity where none reasonably existed. She deviated significantly from the text of the clause. In so doing, she committed extricable errors of law that are reviewable on a correctness standard.

It is clear that the appellant complied with the termination clause, and in so doing also complied with the ESA. The respondent was entitled to nothing more.


Alliance to Protect Prince Edward County v Ontario (Environment and Climate Change), 2018 ONCA 576

[Lauwers, JJA]

Counsel:

Eric K. Gillepsie for the applicant/appellant

Jon Bradbury for the respondent Ministry of the Environment and Climate Change

Patrick G. Duffy for the respondent WPD White Pines Wind Incorporated

Keywords: Administrative Law, Judicial Review, Motions, Orders, Setting Aside, Appeals, Jurisdiction, Courts of Justice Act, ss. 21(3), 21(5), Judicial Review Procedure Act, ss. 6(1)(a), 6(2)

Facts:

WPD White Pines Wind Incorporated (“WPD”) has an approval from the Ministry of the Environment and Climate Change (the “Ministry”) to construct wind turbines in Prince Edward County, subject to several conditions. In a November 15, 2017 letter, the director of the Environmental Approvals Access and Service Integration Branch of the Ministry stated that the majority of the construction of wind turbines by WPD was going to meet the conditions with one exception which WPD had proven, as required under the Ministry’s conditional approval, to be unavoidable.

The applicant brought a motion under 6(1)(a) of the Judicial Review Procedure Act, pending its application for judicial review, seeking a stay of the operation of the Ministry’s approval on the ground that proceeding with the construction after April 30, 2018 violated the terms of the approval. WPD, supported by the Ministry, brought a cross-motion for an order dismissing the underlying application for judicial review for lack of jurisdiction under the Judicial Review Procedure Act. Justice Conway, who was sitting as a single judge of the Divisional Court hearing the matter as one of urgency, although not under s. 6(2) of the Judicial Review Procedure Act, cited two reasons in dismissing the applicant’s motion for a stay and granting the WPD motion to dismiss the judicial review application. First, the decision in the letter did not reflect a statutory power decision subject to judicial review. Second, the judicial review application was really a disguised attempt to rewrite some of the conditions imposed by the Ministry outside of the appropriate forum to do so.

The applicant moved for an order staying the operation of Renewable Energy Approval No. 2344-9 R6RWR (“REA”), thereby halting construction, pending the court’s decision on whether to grant leave to appeal from the order of Conway J., dated May 23, 2018.

Issues:

(1) Does the Court of Appeal have jurisdiction to hear the appeal from the decision of Conway J?

Holding:

Motion quashed.

Reasoning:

(1) No.

The motion for a stay raises a jurisdictional question arising from the interpretation of s.21 of the Courts of Justice Act, which provides:

(3)     A motion in the Divisional Court shall be heard and determined by one judge, unless otherwise provided by the rules of court…

(5)     A panel of the Divisional Court may, on motion, set aside or vary the decision of a judge who hears and determines a motion.

The jurisdictional issue is whether the decision of Conway J. can only be reviewed under s. 21(5) of the Courts of Justice Act or whether, because she dismissed the application for judicial review, an appeal lies to the Court of Appeal, with leave under s. 6(1)(a) of the Courts of Justice Act.

In Overseas Missionary Fellowship v 578369 Ontario Ltd, (1990) 73 OR (2d) 73 (CA), the court found that what is now s. 21(5) of the Courts of Justice Act took precedence over and excluded the general terms of the appeal right in s. 6(1)(a) if the Courts of Justice Act. The structure of the legislation requires a person to exhaust the remedial jurisdiction of the Divisional Court before coming to the Court of Appeal which in this case, required the applicant to bring a motion to a panel of the Divisional Court under s. 21(5) of the Courts of Justice Act.

There was a suggestion that one reason the applicant had come before the Court of Appeal was because the Divisional Court was incapable of constituting a panel on an urgent basis. Urgency cannot confer jurisdiction, and the motion was quashed as a result. The Court commented that it was confident that the Divisional Court could respond to the urgency of the matter with alacrity.


CRIMINAL DECISIONS

Jackson Re, 2018 ONCA 560

[Watt, van Rensburg and Fiarburn JJ.A.]

Counsel:

Jill Gamble, for the appellant, JJ

Megan Petrie, for the Attorney General of Ontario

James Thomson, for Waypoint Centre

Julia Zamprogna, for Southwest Centre for Forensic Mental Health Centre

Keywords: Criminal Law, Ontario Review Board, NCRMD, Break and Enter, Assault with a Weapon, Uttering Threats, Escaping Lawful Custody, Robbery, Breach of Probation, Conditional Discharge, Substance Abuse, Criminal Code, ss 672.54 and 672.5401


R v Hewitt, 2018 ONCA 561

[Sharpe, Roberts and Trotter JJ.A.]

Counsel:

Robert J. Reynolds, for the appellant

Avene Derwa, for the respondent

Keywords: Criminal Law, Trafficking in Firearms, Constitutional Law, Sentencing, Mandatory Minimum, Parole Eligibility, Pre-Sentence Custody Credit, Criminal Code, s 99(2)(a), Canadian Charter of Rights and Freedoms, s 12, R v Chambers, 2013 ONCA 680


Collins (Re), 2018 ONCA 563

[Doherty, Epstein and Pepall JJ.A.]

Counsel:

Anita Szigeti, for the appellant Avene Derwa, for the respondent

Gavin S. MacKenzie, for the Centre for Addiction and Mental Health

Keywords: Ontario Review Board, NCRMD, Conditional Discharge, Threat to Public Safety


R v DJB, 2018 ONCA 566

[Watt, van Rensburg and Fairburn JJ.A.]

Counsel:

Delmar Doucette, for the appellant

Andrew Hotke, for the respondent

Keywords: Criminal Law, Sexual Touching, Invitation to Sexual Touching, Sentencing, Evidence, Credibility, Fresh Evidence, Criminal Code, s. 715.1


R v AK, 2018 ONCA 567

[Sharpe, Roberts and Trotter JJ.A.]

Counsel:

Najma Jamaldin and Paul Genua, for the appellant

Nancy Dennison, for the respondent

Keywords: Criminal Law, Sexual Assault with a Weapon, Evidence, Burden of Proof, Reasonable Doubt, The Rule in Browne v Dunn (1893), 6 R 67 (HL), Sentencing


R v FR, 2018 ONCA 568.

[Hoy, Rouleau, Benotto JJ.A.]

Counsel:

Christian Deslauriers, for the appellant

Davin M. Garg, for the respondent

Keywords: Criminal Law


R v Barkhadle, 2018 ONCA 569

[Hourigan, Pardu and Nordheimer JJ.A.]

Counsel:

Howard L. Krongold, for the appellant

Luke Schwalm, for the respondent

Keywords: Criminal Law, Unlawful Possession of a Firearm, Evidence, R v W(D), [1991] 1 SCR 742


R v Tweneboah-Koduah, 2018 ONCA 570

[Watt, van Rensburg and Fairburn JJ.A.]

Counsel:

Catriona Verner, for the appellant

Candice Suter, for the respondent

Keywords: Criminal Law, Sexual Assault, Defences, Consent, Evidence, Cross-Examination, Sentencing, R v JA, 2011 SCC 28, R v Esau (1997), 116 CCC (3d) 289 (SCC)


R v Tingle, 2018 ONCA 572

[Sharpe, Roberts and Trotter JJ.A.]

Counsel:

Marianne Salih, for the appellant

Chris Webb, for the respondent

Keywords: Criminal Law, First-Degree Murder, Participating in the Activity of a Criminal Organization, Evidence, Certiorari


R v Mikasinovic, 2018 ONCA 573

[Watt, van Rensburg and Fairburn JJ.A.]

Counsel:

Michael W. Lacy and Lawrence Gridin, for the appellant

John Patton, for the respondent

Keywords: Criminal Law, Assault, Aggravated Assault, Assault Causing Bodily Harm, Sentencing, Probation, Aggravating Factors, R v Luciano, 2011 ONCA 89, R v Wong, [2006] OJ No 2209 (CA)


R v Donnelly, 2018 ONCA 575

[Hourigan, Pardu and Nordheimer JJ.A.]

Counsel:

Uma Kancharla, for the appellant

John A Neander, for the respondent

Keywords: Criminal Law, Sexual Assault, Defences, Mistaken Belief in Consent


Godfrey (Re), 2018 ONCA 577

[Hourigan, Pardu and Nordheimer JJ.A.]

Counsel:

Ken J. Berger, for the appellant

Catherine Weiler, for the Attorney General in right of Ontario

Gavin S. MacKenzie, for the person in Charge at the Centre for Addiction and Mental Health

Keywords: Ontario Review Board, NCRMD, Hybrid Detention Order, Threat to Public Safety, R v Kelly, 2015 ONCA 95, Mental Health Act, RSO 1990, c M 7


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.