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Good evening.

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

The headline decision this week is clearly S.H. v D.H., 2019 ONCA 454, which deals with the very modern, relevant and controversial area of assisted human reproduction. The couple in that case had contracted for frozen embryos that were biologically not related to either of them. They had one child together using some of those embryos. They subsequently separated and divorced. The ex-wife then wanted to have a second child using the remaining embryos, which were biologically related to the parties’ only child. She undertook not to request any support of any kind from the ex-husband for the new child to be born. After having initially consented, the ex-husband changed his mind and refused to allow his ex-wife to have another child using the remaining embryos. At first instance, the ex-wife was successful in obtaining permission to use the embryos. The lower court’s decision was based on contract and property law.

The Court of Appeal allowed the appeal. Its decision hinges on the interpretation of the Consent Regulations under the Assisted Human Reproduction Act, rather than the application of contract and property law. That Act and Regulation allow for the parties to revoke their consent to the use of the embryos at any time, and those protections cannot be contracted out of.

It is interesting to note that the outcome would have been different in this case if the ex-wife had been biologically related to the embryo and the ex-husband had not been. In that situation, the ex-husband would have lost his donor status and the ex-wife would have been free to proceed as she wished.

In Drummond v. Cadillac Fairview Corp Ltd., 2019 ONCA 413, we saw the Court address concerns of fairness in the context of reverse or “boomerang” summary judgment motions and the use of hearsay evidence on such motions. Congratulations to our very own Larry Reimer and Stuart Woody for the great result for our client. In this occupier’s liability case, our client brought a motion for summary judgment to dismiss the slip and fall claim against our client. The motion judge not only dismissed the motion, but granted summary judgment in favour of the plaintiff, even though he had not brought a cross-motion for summary judgment, and had, in fact, argued on the motion that the case was not conducive to summary judgment. The Court allowed the appeal, and granted summary judgment to our client. The Court found that the motion judge had granted boomerang summary judgment without fair warning to our client, and also erred by relying on unsworn hearsay evidence on critical issues.

In another win for our firm in Dussault v. Imperial Oil Limited, 2019 ONCA 448, the Court held that the appellant employer failed to prove that our clients, the respondent employees, did not mitigate their damages when they were dismissed from the company. The Court agreed with the motion judge that the employment that was offered was not “comparable employment”, therefore, the employees acted reasonably in refusing it. However, the Court parted ways with the motion judge on the issue of damages, and increased the amount payable to our clients. Congratulations to our own David Greenwood and Simon Reis for the excellent result.

Other topics covered this week included liability to shareholders for valuation opinions, relief from forfeiture in the option to renew a lease context, the renegotiation of employment terms mid-employment and the duty to mitigate in wrongful dismissal cases, municipal law (legal non-conforming uses), illegal distraint by a landlord following termination of a tenancy resulting in punitive damages, the limitation period for suing on personal guarantees of mortgage covenants (10 years, not 2 years), solicitor-client assessments, agreements of purchase and sale of land and extending the time to appeal.

Wishing everyone a nice weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email


Table of Contents

Civil Decisions

S.H. v. D.H. & Engineers, 2019 ONCA 454

Keywords: Contracts, Interpretation, Property Law, Health Law, Reproductive Rights, Assisted Human Reproduction, In Vitro Fertilization, Consent, Withdrawal, Statutory Interpretation, Assisted Human Reproduction Act, S.C. 2004, c. 2, ss. 7 & 8, Assisted Human Reproduction (Section 8 Consent) Regulations, S.O.R./2007-137, ss. 1, 10, 12, 13 & 14, Reference re Assisted Human Reproduction Act, 2010 SCC 61, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27, Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, Hickman Motors Ltd. v. Canada, [1997] 2 SCR 336, State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699, Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, Transport North American Express Inc. v. New Solutions Financial Corp., 2004 SCC 7, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Hilson v. 1336365 Alberta Ltd., 2019 ONCA 434

Keywords: Contracts, Real Property, Mortgages, Guarantees, Torts, Solicitors’ Negligence, Civil Procedure, Limitation Periods, Damages, Double Recovery, Real Property Limitations Act, R.S.O. 1990, c. L. 15, ss. 43(1), Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 4, ss. 2(1)(a), Registry Act, R.S.O. 1990, c. R.20, Land Registration Reform Act, R.S.O. 1990, c. L.4, s. 21, Equitable Trust Company v. Marsig, 2012 ONCA 235, Martin v. Youngson, (1924), 55 O.L.R. 658 (C.A.), Zabanah v. Capital Direct Lending Corp., 2014 ONCA 872

Pita Royale Inc. (Aroma Taste of the Middle East) v. Buckingham Properties Inc., 2019 ONCA 439

Keywords: Contracts, Real Property, Commercial Leases, Remedies, Termination, Distraint, Damages, Punitive Damages, Torts, Conversion, Corporate Veil, Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58, Whiten v. Pilot Insurance Co., 2002 SCC 18, Beaver Steel Inc. v. Skylark Ventures Ltd., [1983] BCJ No 54 (S.C), McDowell v. Fortress Real Capital Inc., 2019 ONCA 71, ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 26 OR (2d) 481 (CA), 642947 Ontario Ltd. v. Fleischer (2001), 56 OR (3d) 417 (CA)

TRG-KFH (Lakeside) Inc. v. Muskoka Lakes (Township), 2019 ONCA 443

Keywords: Municipal Law, Zoning By-Laws, Interim Control By-Laws, Legal Non-Confirming Use, Planning Act, R.S.O 1990, c. R.6, s. 34(9), Building Code Act, 1992, S.O. 1992, c. 23, s. 8(1), Kim v Mississauga (City), (1996), 33 MPLR (2d) 135 (Ont. Gen. Div.)

Extreme Venture Partners Fund LLP v. Varma, 2019 ONCA 446

Keywords: Contracts, Breach, Torts, Negligence, Duty of Care, Civil Procedure, Summary Judgement

40 Park Lane Circle v. Aiello, 2019 ONCA 451

Keywords: Civil Procedure, Appeals, Extension of Time to Appeal, Rules of CivilProcedure, Rule 3.02, Denomme v. McArthur, 2013 ONCA 694, Duca Community Credit Union Ltd. v. Giovannoli (2001), 142 O.A.C. 146 (C.A.)

Dussault v. Imperial Oil Limited, 2019 ONCA 448

Keywords: Employment Law, Wrongful Dismissal, Damages, Calculation, Mitigation, Red Deer College v. Michaels, [1976] 2 SCR 324, Carter v. 1657593 Ontario Inc., 2015 ONCA 823, Employment Standards Act, 2000, S.O. 2000, C.41, Paquette v. TeraGo Networks Inc., 2016 ONCA 618, Waterman v. IBM Canada Ltd., 2013 SCC 70

Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447

Keywords: Torts, Negligence, Standard Of Care, Contributory Negligence,  Occupiers’ Liability, Civil Procedure, Reverse Summary Judgment, Procedural Fairness, Evidence, Affidavits, Admissibility, Hearsay, , Occupiers’ Liability Act, R.S.O. 1990, c. O.2, s. 3(1), Hryniak v. Mauldin, 2014 SCC 7, Rules of Civil Procedure, Rule 20.02(1)

Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449

Keywords: Employment Law, Waiver of Service/Termination Pay, Damages, Mitigation, Employment Standards Act, 2000, S.O. 2000, c. 41

Downey v. Arey & Engineers, 2019 ONCA 450

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Summary Judgment, Fact-Finding Powers, Rules of Civil Procedure, Rule 20.04(2.1)

McRae Cold Storage Inc. v. Nova Cold Logistics ULC & Engineers, 2019 ONCA 452

Keywords: Contracts, Real Property, Commercial Leases, Interpretation, Option to Renew, Equitable Remedies, Relief from Forfeiture, 120 Adelaide Leaseholds Inc. v. Oxford Properties Canada Ltd., [1993] O.J. No 2801 (C.A), Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Company, [1994] 2 S.C.R. 490, 1383421 Ontario Inc. v. Ole Miss Place (2003), 67 O.R. (3d) 161 (C.A), Mapleview-Veterans Drive Investments Inc. v. Papa Kerrollous IV Inc., 2016 ONCA 93

Newell v. Sax & Engineers, 2019 ONCA 455

Keywords: Solicitor and Client, Assessment of Accounts, Quantum Meruit,  Reasonable Apprehension Of Bias,  Solicitors Act, R.S.O. 1990, c. S. 15, s. 3, Committee for Justice and Liberty et al. v. National Energy Board et al. (1976), [1978] 1 S.C.R. 369, Cohen v. Kealey (1985), 10 O.A.C. 344 (C.A.)

Short Civil Decisions

Distributions Katrina Inc. v. Enroute Imports Inc., 2019 ONCA 441

Keywords: Civil Procedure, Partial Summary Judgment, Equitable Set-Off

Rallis v. Myers, 2019 ONCA 437

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Judicial Immunity, Rules of Civil Procedure, Rule 2.1.01,  Proceedings Against the Crown Act, R.S.O. 1990, c. P.27, s. 5(6), Gao v. Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6497

Alharayeri v. Wilson, 2019 ONCA 438

Keywords: Appeal Book Endorsement

Greenwoods GRM LLP v. Datawind Inc., 2019 ONCA 440

Keywords: Appeal Book Endorsement

Talbot v. Nourse, 2019 ONCA 436

Keywords: Appeal Book Endorsement, Limitations Act, 2002

Sidhu v. Aviva Canada Inc., 2019 ONCA 444

Keywords: Appeal Book Endorsement, Standard of Review, Igbokwe v. HB Group Insurance Management Ltd., 2001 CanLII 3804 (ONCA), Walker v. Allstate Insurance Co., 2002 CanLII 44970 (ONCA)

The Bank of Nova Scotia v. 1860384 Ontario Inc., 2019 ONCA 445

Keywords: Appeal Book Endorsement, Corporations, Joint and Several Liability

Criminal Decisions

R. v. D.C., 2019 ONCA 442

Keywords: Criminal Law, Assault, Aggravated Assault, Assault With a Weapon, Jury Instructions, Limiting Instruction, Evidence, Admissibility, Prior Consistent Statements, Prior Inconsistent Statements, Hearsay, Recent Fabrication, Impeachment, Credibility, R. v. Stirling, 2008 SCC 10, R. v. Ellard, 2009 SCC 27, R. v. Khan, 2017 ONCA 114, R. v. M.P., 2018 ONCA 608, R. v. Demetrius (2003), 179 C.C.C. (3d) 26 (Ont. C.A.), R. v. O.(L.), 2015 ONCA 394

R. v. J.F. , 2019 ONCA 432

Keywords: Criminal Law, NCR, Uttering a Threat, Arson, Failing to Comply with a Recognizance, Possession of a Weapon for a Dangerous Purpose, Youth Criminal Justice Act, S.C. 2002, c.1, s.34, Criminal Code, R.S.C. 1985, c.C-46, s.672.11, Mental Health Act, R.S.O. 1990, c. M.7, R. v. Cubillan (2018) 143 O.R. (3d) 376 (CA), R. v. Joanisse (1995), 102 C.C.C. (3d) 35 (Ont. C.A.), R. v. Archer (2005), 202 C.C.C. (3d) 60 (Ont. C.A.)

R. v. Srun , 2019 ONCA 453

Keywords: Criminal Law, Second Degree Murder, Attempted Murder, Manslaughter, Aggravated Assault, Aiding and Abetting, Defences, Intoxication, Provocation, Self-Defence, Jury Trial, Jury Charge, Evidence, Admissibility, Hearsay, Procedural Reliability, Substantive Reliability, Criminal Code, ss. 21(1)(a), 21(2), 229(a), 229(a)(ii), 232(2), R. v. Jacquard, [1997] 1 S.C.R. 314, R. v. Calnen, 2019 SCC 6, R. v. Bailey, 2016 ONCA 516, R. v. Daley, 2007 SCC 53, R. v. Salah, 2015 ONCA 23, R. v. Nygaard, [1989] 2 S.C.R. 1074, R. v. Cooper, [1993] 1 S.C.R. 146, R. v. Simon, 2010 ONCA 754, R. v. Simpson, [1988] 1 S.C.R. 3, R. v. Laliberty (1997), 117 C.C.C. (3d) 97 (Ont. C.A.), R. v. Ferrari, 2012 ONCA 399, R. v. Flores, 2011 ONCA 155, R. v. Jaw, 2009 SCC 42, R. v. Nealy (1986), 30 C.C.C (3d) 460 (Ont. C.A.), R. v. Cudjoe, 2009 ONCA 543, R. v. Demeter (1975), 25 C.C.C. (2d), R. v. W.(D.), [1991] 1 S.C.R. 742, R. v. Waite, 2014 SCC 17, R. v. Suzack (2000), 141 C.C.C. (3d) 449 (Ont. C.A.), R. v. Parberry (2005), 202 C.C.C (3d) 337 (Ont. C.A.), R. V. Hawkins, [1996] 3 S.C.R. 1043, R. v. B. (K.G.), [1993] 1 S.C.R. 740, R. v. Devine, 2008 SCC 36, R. v. Khelawon, 2006 SCC 57, R. v. Bradshaw, 2017 SCC 35, R. v. Couture, 2007 SCC 28, Fredericks v. R., 2018 NBCA 56, R. v. Seaboyer, R. v. Gayme, [1991] 2 S.C.R. 577, R. v. Kimberley (2001), 157 C.C.C. (3d) 129 (Ont. C.A.), Azoulay v. The Queen, [1952] 2 S.C.R. 495, R. v. Bucik, 2011 ONA 546


CIVIL DECISIONS

S.H. v. D.H., 2019 ONCA 454

[Pepall, Hourigan and Fairburn JJ.A.]

Counsel:

S. Chaudhury and B. Noga, for the appellant

J. Adair, for the respondent

FACTS:

While they were married, the parties used in vitro fertilization (“IVF”) in their efforts to have a child. In 2011, the parties contracted with a lab in Georgia, USA to create the in vitro embryos. Reproductive material from two anonymous individuals was combined. Two out of the four resulting in vitro embryos were viable. Neither party contributed their own reproductive material to the embryos. The viable embryos were then frozen in a process known as cryopreservation.

The parties entered into contracts with reproductive companies in both Georgia and Ontario. Two contracts were signed with Reproductive Biology Associates (“RBA”), the Georgia company that actually created the embryos. The first RBA contract dealt with the procedure to be followed in creating and transferring the embryos. The second RBA contract related to the cryopreservation of the embryos and reflected the parties’ agreement that the frozen embryos would be donated if the parties were unable to agree as to their disposition in the future. In the event of divorce, the parties acknowledged that they understood that “the legal ownership of any stored embryo(s)” would be “determined in a property settlement” and released as directed “by order of a court [of] competent jurisdiction.”

The parties also contracted with ISIS Regional Fertility Centre (now known as the Reproductive Care Centre, “RCC”) in Mississauga, ON. The Ontario contract allows for the cryopreserved embryos to be thawed and used for the couple’s “own reproductive use.” The contract names the respondent as the “patient” and the appellant as the “partner”. The parties contracted that, in the event of “divorce or legal separation between the patient and her partner”, the RCC would “respect the patient’s wishes”. The Ontario contract also provides for a withdrawal of consent as follows:

Prior to providing this consent, we received and reviewed written information from ISIS [now RCC] confirming that our cryopreserved in vitro embryo(s) would be used only for the purposes which we authorized in this Consent and that we could withdraw our consent to the use of our in vitro … embryo(s) at any time provided that we did so in the manner explained.

The respondent (ex-wife) wishes to have that embryo implanted into her. Any child resulting from that process would be a full biological sibling to the parties’ child. The respondent says that if the IVF is successful, and a child is born, she will not seek any form of child support from the appellant. Although the appellant (ex-husband) consented to the respondent’s use of the embryo when it was created, he has changed his mind and now wishes to withdraw his consent. At this stage, the appellant is only prepared to have the embryo donated to a third party.

7(2)(b) of the Assisted Human Reproduction Act (“AHRA”) prohibits the purchase and sale of embryos. The motion judge’s reasoning was founded in contract and property law. The parties at first instance did not even raise or argue before the motion judge the Assisted Human Reproduction (Section 8 Consent) Regulations (the “Consent Regulations”). The motion judge, observing that an embryo cannot be split, resolved that the embryo should be released to the respondent for her use and the appellant should be reimbursed for half the cost of creating the embryo.

ISSUES:

(1) Despite their separation and divorce, do the parties remain a donor couple today?

(2) Do the Consent Regulations permit the appellant to withdraw the consent that he provided when the parties were still married, a consent that specifically granted the respondent the unilateral right to use the embryo as she wished in the event of the couple’s divorce?

(3) Does s. 1(2) of the Consent Regulations deprive the appellant of the ability to withdraw his consent under s. 14(3) of the Consent Regulations because he is no longer a “spouse” within the meaning of that term?

(4) Could the parties contract out of the s. 14(3) right to withdraw consent prior to use?

HOLDING:

Appeal allowed.

REASONING:

(1) Yes. Following separation or divorce, the Consent Regulations only remove donor status in one scenario that is not analogous to this case: the individual in the former couple who is genetically connected to the embryo will move from donor couple status under s. 10(1)(b) to single donor status under s. 10(1)(a) of the Consent Regulations. The non-genetically contributing individual in the former couple will completely lose his or her donor status. In this case, the parties have the same genetic status in relation to the disputed embryo – neither is genetically connected to that embryo. Consequently, their donor couple status remains intact, meaning that they together remain the disputed embryo’s donor under s. 10(1)(b).

(2) Yes. The provisions, read as a whole, make it clear that the appellant may withdraw his prior written consent. Additionally, the appellant did not contract out of his right to do so.

At the motion hearing, both parties took the position that the embryo should be treated as property governed by contract law. On appeal, the Court decided the case on the basis of the interpretation of the Consent Regulations, undertaking a textual, contextual and purposive analysis of the wording of the regulations, which must be read concurrently with, and in the context of, the enabling legislation.

The appellant’s continued status as a donor under s. 10(1)(b) of the Consent Regulations goes a significant distance to assisting in answering whether s. 14(3) permits him to withdraw his consent to the respondent’s use of the embryo. An interpretation of s. 14(3) that could preclude a person who remains part of the donor couple from having an ongoing say about how the donor couple’s embryo may be used would run counter to the legislation’s emphasis on consent.

The ability of a former spouse who is still part of the donor couple to withdraw consent under s. 14(3) is also apparent from the legal requirements for obtaining a legally compliant consent in the first place. Those requirements include that the donor be informed of his or her right to withdraw consent prior to the use originally consented to. Read together, ss. 12 and 13 of the Consent Regulations make clear that at the time that donors initially give their consent, they must be informed in writing about how to withdraw that consent. Further, the donors must acknowledge in writing that they have been informed of this fact. And, even further, anyone making use of an in vitro embryo must have that written donor acknowledgement in hand before using the embryo.

These provisions demonstrate the inextricable link between donor consent and withdrawal of consent. They eschew any notion that donor consent becomes crystalized at the moment it is initially given. Instead, the provisions clearly place donor consent on a continuum from the time an embryo is created to the time it is used. In order to extract a fully informed consent, the donor must be informed that at any point along that continuum, the donor can change her or his mind by withdrawing consent in writing. These provisions are entirely consistent with the central importance of consent in the area of reproductive technology.

(3) No. s. 14(3) of the Consent Regulations applies to donor couples and allows the “consent of the donor [to be] withdrawn by either spouse”. Section 1(2) does not define “spouse”, but rather excludes from the term “a person who, at the relevant time, lives separate and apart from the person to whom they are married because of the breakdown of their marriage.” In this case, the parties are no longer married and have not been married for years. Accordingly, on their plain meaning, the words of s. 1(2) do not extend to this case.

The Court agreed with the appellant’s argument that the temporal restriction placed upon s. 1(2)—“at the relevant time”—drives the purpose for which the provision exists. The purpose of s. 1(2) is not to deprive donors of in vitro embryos of the ability to withdraw their consent because of marital breakdown or divorce. The provision is designed to protect those people whose marriages have broken down from not becoming donor couples simply by virtue of the fact that they have not obtained divorces. Only in this way do both spouses receive clear protection from unintended donor couple status.

(4) No. Consent in the legislative context involving reproductive technology is fundamentally at odds with contract law. The very essence of s. 8(3) of the AHRA and the Consent Regulations is to allow for an individual’s right to consent, a right that is inherently linked to respect for the consenter’s state of mind. It would undermine the notion of consent embodied in the AHRA and the Consent Regulations to freeze it at a specific moment in time and preclude changes of mind.

Section 8(3) makes it a criminal offence to use an in vitro embryo without consent and, therefore, the absence of consent is an essential element of that criminal offence. Accordingly, were the respondent to go ahead and use the embryo in the face of the appellant’s lack of consent, she and those who assisted her in that endeavour would be, at a minimum, committing the actus reus of a criminal offence. Despite having contracted in Ontario to permit the respondent to unilaterally deal with the embryo according to her wishes in the event of divorce, the appellant did not, nor could he have, contracted out of the protections afforded to him under s. 8(3) of the AHRA and the Consent Regulations. To the extent that the Ontario contract purports to do that, it is void. In any event, this particular contract did not purport to contract out of those protections.

In the result, therefore, the respondent is not permitted to use the embryo absent her ex-husband’s consent.


Hilson v. 1336365 Alberta Ltd., 2019 ONCA 434

[Hoy A.C.J.O., Feldman and Paciocco JJ.A.]

Counsel:

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

H.W. Reininger, for the respondent/appellant by way of cross-appeal

FACTS:

The appellants are principals of the corporate defendants. In 2007, they personally guaranteed second mortgages entered into by the corporations as part of an investment in a real estate complex. The respondent, an individual investor, provided the financing secured by way of a second mortgage. Each of the mortgages included a standard form guarantee covenant, and there were also five stand-alone guarantee agreements. When the second mortgages went into default, the respondent commenced an enforcement action.

In a separate action, the respondent sued her lawyer, who acted for her in a number of investments, including the one at the centre of this matter. This action was later settled for $1.3 million.

ISSUES:

(1) Is the limitation period applicable to the stand-alone guarantees ten years under s. 43(1) of the Real Property Limitations Act (the “RPLA”) or two years under the Limitations Act, 2002?

(2) Were the guarantees contained in the mortgages authorized by and binding upon the appellants in their personal capacities?

(3) Did the trial judge err in reducing the amount of the judgment on the guarantees to account for any double recovery resulting from the settlement of the negligence action against the respondent’s lawyer?

HOLDING:

Appeal dismissed. Cross-appeal allowed in part.

REASONING:

(1)

The appropriate limitation period is ten years under s. 43(1) of the RPLA. Section 4(1) of the Limitations Act, 2002 prescribes a basic two-year limitation period. However, Section 2(1)(a) of the Limitations Act, 2002 provides that the Act does not apply to proceedings to which the RPLA applies. Section 43(1) of the RPLA states that “no action upon a covenant contained in an indenture of mortgage or any other instrument…to repay the whole or part of any money secured by a mortgage shall be commenced after the later of…10 years.”

The appellants submit that the stand-alone guarantees are not “instruments” within the meaning of Section 43(1). The trial judge did not agree with this submission, and the Court of Appeal concluded that the trial judge was correct.

The Court of Appeal noted that prior to 1939, the predecessor to s. 43(1) of the RPLA referred only to “a covenant contained in an indenture of mortgage.” In the 1924 case of Martin v. Youngson, the Ontario Court of Appeal considered the meaning of that phrase in the context of a guarantee contained in an indenture of mortgage under seal. However, the Court left open the question of whether a guarantee contained in a separate collateral document could also be included. It was the view of the Court in this present case that it is likely the 1939 addition of the words “or any other instrument” were made to address this very question.

The appellants also draw attention to the definition of “instrument” in the Registry Act, due to the fact that there is no definition of “instrument” in the RPLA. The definition in the Registry Act states that it “includes every instrument whereby title to land in Ontario may be transferred, disposed of, charged, encumbered or affected in any other way…” The trial judge found that the stand-alone guarantees met this definition, and cited the 2012 Ontario Court of Appeal decision of Equitable Trust Company v. Marsig as his authority to do so. The Court agreed, and held that where the guarantee relates to the payment of a mortgage debt, the guarantor maintains the potential for an interest in land as soon as payment is made on the guarantee. In other words, the guarantee meets the definition of an instrument, because title to land may be affected.

The appellants also submitted that the trial judge erred in applying a policy approach in his analysis. On this point, the Court reiterated the statement made by Perell J. in Equitable Trust that it was the intention of the legislature that all limitation periods affecting land be governed by the RPLA. It would cause confusion and uncertainty if the limitation period for enforcing the mortgage debt were different from the limitation period for enforcing a guarantee of that same debt.

The appellants’ final submission on this issue was that the decision in Equitable Trust was qualified by the Court of Appeal in Zabanah v. Capital Direct Lending Corp. The Court rejected this argument by clarifying that Equitable Trust was distinguished in Zabanah. In the former, as in this case, the action concerned a covenant in an instrument that affected the land to repay any money secured by the mortgage. The latter concerned an action for negligence and breach of contract in respect of misrepresentations in the assignment of a mortgage.

(2)

No. The appellants argued that they did not sign the documents personally, but only on behalf of the corporate mortgagors. The respondent argued that because the stand-alone guarantees contained language that refers to the guarantees in the charges and schedules to the charges, the appellants personally authorized the registration of the charges which included their personal guarantees. The respondent also relied on s. 21 of the Land Registration Reform Act (the “LRRA”) in arguing that an electronic document is not required to be signed by the party to be effective.

The trial judge found as a fact that the appellants did not sign the guarantees contained in the mortgages, and that they had not agreed to be bound by the guarantee contained in the mortgage documents merely by signing other documents including the stand-alone guarantees. The standard of review on appeal for findings of fact or mixed fact and law is palpable and overriding error or extricable error of law.

The Court of Appeal saw no reason to interfere with the trial judge’s findings on this issue. While the stand-alone guarantees contained acknowledgements that the appellants had read the charges, the stand-alone guarantees did not state that the appellants agreed to be personally bound by the terms of the charge.

The Court was also in agreement with the trial judge’s finding that although s. 21 of the LRRA permits electronic documents to be registered without a signature, this does not remove the necessity for anyone who is to be bound by the documents to have provided their authorization in writing to the electronic registration of those documents.

(3) Yes. The Court of Appeal reached this conclusion by first drawing attention to the lack of any evidentiary basis on which the trial judge could draw his inferences. The Court found the trial judge’s allocation to be an arbitrary one, a view which the trial judge himself acknowledged, before adding that he did not see it as such. However, the Court of Appeal determined that the trial judge had no evidence that any part of the settlement could be said to be referable to this specific investment project, and thus there was no basis to reduce the amount of the judgment. The action against the lawyer was for negligence in the steps he took in respect of the loans on a number of projects. The action against the appellants was to recover the amount of the mortgage loans on this specific project from the guarantors of the mortgages.


Pita Royale Inc. (Aroma Taste of the Middle East) v. Buckingham Properties Inc., 2019 ONCA 439

[Hourigan, Benotto and Huscroft JJ.A.]

Counsel:

D. A. Weisman, for the appellants

H. S. Consky and R. Nosratpanah Gashti, for the respondent

FACTS:

The appeal arises from an action by the respondent, a corporation, against Buckingham Properties Inc. (“Buckingham”) and its principal, WM, for improper termination of a commercial lease of a restaurant and illegal distraint or conversion of the restaurant chattels. Buckingham counterclaimed for arrears of rent. The trial judge found that the lease termination was proper, but that Buckingham had illegally distrained the respondent’s chattels. The trial judge awarded the respondent $58,190.74 in damages for conversion and $10,000 in punitive damages. These amounts were offset by damages of $1,294 for unpaid rent awarded on the counterclaim. In addition, the trial judge found that WM was jointly and severally liable for these damages with Buckingham.

ISSUES:

(1) Did the trial judge err in finding that the respondent’s chattels were illegally distrained?

(2) Did the trial judge err that the chattels had a value of $58,190.74?

(3) Did the trial judge err in awarding punitive damages in the amount of $10,000?

(4) Did the trial judge err in finding WM jointly and severally liable with Buckingham?

(5) Did the trial judge err in her assessment of damages on the counterclaim?

HOLDING:

Appeal allowed in part.

REASONING:

(1) No. The trial judge did not err in finding illegal distraint. Buckingham had to choose between the mutually exclusive remedies of termination and distress. Instead of making a choice, it attempted to do both. Thus, the distraint was illegal.

(2) Yes. The main issue regarding the distraint was the trial judge’s calculation of damages. Trial judges’ assessments of damages were owed considerable deference by an appellate court. However, the trial judge in this case offered no guidance on how she calculated damages. The Court reviewed the evidence and calculated the damages that should have been awarded. Specifically, the Court made an evaluation based on the amended list of capital and renovation costs, the list of inventory being claimed, the list of items paid by cheque, debit or credit card payment, and a list of items paid for by cash or debit. After weighing the evidence in these lists, the Court reduced the damages for conversion to $18,539.71.

(3) Yes. The main issue regarding the distraint was the trial judge’s calculation of damages. Trial judges’ assessments of damages were owed considerable deference by an appellate court. However, the trial judge in this case offered no guidance on how she calculated damages. The Court reviewed the evidence and calculated the damages that should have been awarded. Specifically, the Court made an evaluation based on the amended list of capital and renovation costs, the list of inventory being claimed, the list of items paid by cheque, debit or credit card payment, and a list of items paid for by cash or debit. After weighing the evidence in these lists, the Court reduced the damages for conversion to $18,539.71.No. The actions of the appellants in distraining the chattels on the premises and converting them for use by a new tenant without providing the respondent with an opportunity to remove those items from the restaurant warranted an award of punitive damages.

(4) Yes. The trial judge erred in her analysis of the parties to the lease. The lease was between the respondent and Buckingham, two corporate parties. The fact that corporations act through officers and directors does not change the nature of the contractual relationships they enter into, such as the commercial lease in this case. Additionally, there was no evidence that Buckingham was incorporated as a sham or was being used as a shield for fraudulent or improper conduct so as to hold its officers and directors personally liable. This is not one of those exceptional cases where the corporate veil should be pierced to impose liability on an officer or director.

(5) No. The key issue in the claim for rental arrears was the date when the respondent was locked out. The trial judge preferred the evidence of the respondent on this point and calculated rental arrears accordingly. Deference should be given to the trial judge on this issue, as this was a finding open to her on the evidence.


TRG-KFH (Lakeside) Inc. v. Muskoka Lakes (Township), 2019 ONCA 443

[Sharpe, Roberts and Nordheimer JJ.A.]

Counsel:

S. Hutchison and M. Strychar-Bodnar, for the appellant

H. Elston and W. Thomson, for the respondent

FACTS:

In September 2017, the appellant acquired title to development land in Minett, Ontario. As part of the transfer of land, the appellant became a party to a Site Plan Agreement (“site plan”) for that property. The site plan, approved in March 2017, was for the construction of 43 condominium units, a management building and several amenities.

The appellant applied for, and obtained demolition permits to remove existing buildings on the land and permits to perform “servicing work”, work required to make the land usable for its intended purpose. After this work was completed, the appellant obtained 11 building permits from the respondent and began construction of those 11 units.

In early 2018, after realizing previously approved amendment plans had not been incorporated into comprehensive amendments that would bring the new policies into effect, the Minett Council initiated an in-depth review of their zoning and land use policies. In May 2018, a council member proposed an Interim Control By-Law (“ICBL”) that would “restrict the permitted use of land to the use lawfully existing at the date of enactment”. The ICBL was passed on May 18, 2018, without any notice to the appellant or any other residents of the Township who might be impacted by it.

Prior to the passing of the ICBL, the appellant had filed for 15 additional building permits for the next phase of the development. When the appellant went to pick up the permits, after the ICBL had been approved, the Chief Building Official refused to issue them because of the ICBL.

The appellant commenced an application to quash the ICBL and to appeal the decision of the Chief Building Officer to not issue any further permits. The appellant argued that its development was protected as a “legal non-conforming use” under s. 34(9) of the Planning ActThat section provides that “no By-Law passed under this section applies,

(a) to prevent the use of any land, building or structure for any purpose prohibited by the by-law if such land, building or structure was lawfully used for such purpose on the day of the passing of the by-law, so long as it continues to be used for that purpose; or

(b) to prevent the erection or use for a purpose prohibited by the by-law of any building or structure for which a permit has been issued under subsection 8(1) of the Building Code Act, 1992, prior to the day of the passing of the by-law, so long as the building or structure when erected is used and continues to be used for the purpose for which it was erected and provided the permit has not been revoked under subsection 8(10) of that Act.

The application judge dismissed the application, stating that as of May 18, 2018, the use of the land in dispute was essentially vacant land and so the proposed use was too remote to be considered under ss. 34(9)(a). The application judge did not consider ss. 34(9)(b).

ISSUES:

(1) Did the application judge err in finding that ss. 34(9)(a) of the Planning Act did not apply?

(2) Did the application judge err in finding that the appellant’s property was not exempt under ss. 34(9)(b) of the Planning Act?

(3) Did the application judge fail to apply his equitable jurisdiction under the Building Code Act?

holding:

Appeal allowed.

REASONING:

(1) The Court did not consider this issue. Instead, the appeal was decided solely on the basis of Issue (2).

(2) Yes. The application judge erred by not considering ss. 34(9)(b) of the Planning Act, and whether the appellant’s property was exempt under that subsection.

The Court held that the issuance of the initial 11 building permits amounted to issuing building permits for the development as a whole, bringing the development within the purview of ss. 34(9)(b). The Court indicated that the development project must be looked at as a whole. The site plan was for 43 condominium units, a management building and amenities. The respondent would not have issued a building permit for 11 stand-alone buildings. In fact, the site plan was the result of three years of negotiations and planning and therefore it was clearly intended that the entire development be completed.

In coming to its decision, the Court relied on Kim v Mississauga (City), (1996), 33 MPLR (2d) 135 (Ont. Gen. Div.). In that case, K wanted to build a car wash. He needed two building permits, one to perform “servicing works” on the land, and one to build the actual car wash. He applied for and was granted the first permit. Prior to his application for the second permit, the City of Mississauga passed an ICBL and would not issue the second building permit. The judge in that case held that because a building permit had been issued for part of the car wash, a building permit had been issued for the whole car wash. At para 79, the application judge said: “[The car wash] was the only building, using the ordinary natural grammatical meaning of a building, in respect of which “a” permit was issued.”

(3) The Court did not consider this issue either.


Extreme Venture Partners Fund LLP v. Varma, 2019 ONCA 446

[Sharpe, Trotter and Harvison Young JJ.A.]

Counsel:

W. J. Kim and G. van Leeuwen, for the appellant

C. H. Murray, for the respondent

FACTS:

The appellants were directors and shareholders of Xtreme Labs. The respondent was engaged to provide a valuation of Xrteme Labs. The appellants alleged that the valuation significantly undervalued Xtreme Labs and that they suffered a loss as a result of the management buyout that followed the valuation. On the motion for summary judgment, the respondent relied on the terms of their engagement letter for the valuation in support of its position that it owed no duty of care to the appellants. The appellants did not put forth any evidence to support the existence of a duty of care. The motion judge ruled that the terms of the letter of engagement were inconsistent with the respondent owing the appellants a duty of care and granted summary judgment on that basis. The appellants appealed.

ISSUE:

(1) Did the motion judge err in finding no duty of care?

(2) Did the motion judge err by failing to apply the proper evidentiary burden?

(3) Did the motion judge err by failing to give adequate weight to the lack of credibility of the respondent’s deponent?

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

HOLDING:

Appeal dismissed.

REASONING:

(1) No. The engagement letter was the only evidence before the motion judge on this issue and it makes clear that the respondent is not providing a fairness opinion in relation to any transaction. The appellants’ claim for damages arose from their interest as shareholders. The motion judge made no error in concluding that, by its terms, the letter of engagement excluded any duty of care owed by the respondent to the appellants in their capacity as shareholders.

(2) No. The appellants failed to advance any evidence in support of their claim that the respondent owed them a duty of care and they failed to bring forward competing evidence in response to the letter of engagement. They cannot now complain that the motion judge misapplied the evidentiary burden on a summary judgment motion.

(3) No. The respondent’s case rested on the letter of engagement and inadequacies in the knowledge of the respondent’s deponent did not have any bearing on the specific issue the motion judge was asked to decide.

(4) No. This was not partial summary judgment, as the claim against the respondent was dismissed in its entirety. The appellants’ claims against the other defendants did proceed to trial but, as the claim against the respondent could be determined on a discrete legal issue pertinent only to the liability of the respondent, the motion judge did not err in dismissing the claim on that basis. The appellants’ claims against the other defendants proceeded to trial and the appellants achieved a complete success, including punitive damages. In these circumstances, it was not appropriate to make an order that would require another trial.


40 Park Lane Circle v. Aiello, 2019 ONCA 451

[Van Rensburg J.A. (Motions Judge)]

Counsel:

S. Dewart and M. Belanger, for the moving party

S. De Caria, for the respondent

FACTS:

In March 2019, the moving party’s motion to set aside a default judgement was dismissed, which order it intended to appeal. Through inadvertence, the deadline to file a notice of appeal was missed by one day. The moving party sought consent of the respondents to serve the notice late, but the respondents refused.

ISSUES:

Should late service of the notice of appeal be permitted by the court?

HOLDING:

Motion granted.

REASONING:

Yes. Rule 3.02 of the Rules of Civil Procedure permits any time limit prescribed therein to be extended on such terms as are just. According to Denomme v. McArthur, 2013 ONCA 694, 26 R.F.L. (7th), there are five factors to be considered: (1) whether the proposed appellant had a bona fide intention to appeal within the prescribed period; (2) the length of, and explanation for, the appellant’s delay; (3) any prejudice to the respondent from the granting of an extension of time; (4) the merits of the proposed appeal; and (5) whether the justice of the case requires an extension of time.

The first two factors were conceded by the respondent. Regarding factor (3), the Court noted that the prejudice to be considered is the prejudice that would result from the moving party’s delay (i.e. one day), not the prejudice they may experience from the appeal itself. Regarding factor (4), the test to be applied is whether the appeal has “… so little merit in the proposed appeal that the appellant should be denied [his] important right of appeal” as laid out in Duca Community Credit Union Ltd. v. Giovannoli (2001), 142 O.A.C. 146 (C.A.), at para. 14. A detailed review of the evidence is not necessary, but merely a cursory review of the merits of the appeal.

The Court was satisfied that the remaining three factors to be considered all weighed in the moving party’s favour and granted the extension of time to file the notice of appeal.


Dussault v. Imperial Oil Limited, 2019 ONCA 448

[Brown, Roberts and Zarnett JJ.A.]

Counsel:

R. J. Nizon and B. Clancy, for the appellant/ respondent by way of cross-appeal

D. E. Greenwood and S. Reis, for the respondents/ appellants by way of cross-appeal

FACTS:

The appellant employer appealed and the respondent employees cross-appealed from the motion judge’s orders awarding wrongful dismissal damages to the respondents. The appellant dismissed the respondents from their employment, without cause, following the sale of part of its retail business to Mac’s Convenience Stores Inc. In regards to the cross-appeal, during their employment, the respondents participated in a Retirement Income Option of their pension plan, which meant that the appellant contributed 3% of their base salaries to their Savings Plan and another 3% to their supplementary pensions. Following termination, amendments were made to the Savings Plan decreasing the appellant’s contribution to 1% for those employees who elected to participate in a Retirement Income Option. Given their dismissal from employment, the respondents did not have an opportunity to leave the Retirement Income Option.

ISSUES:

(1) Did the motion judge err in failing to find that the respondents had not mitigated their damages by accepting comparable employment with Mac’s?

(2) Did the motion judge err in awarding as damages the value of substantially the same benefits that the respondents continued to receive under their pensions?

(3) Did the motion judge err in awarding damages for the appellant’s annual contributions to their Savings Plan based on 3% rather than 6% of their base salaries?

HOLDING:

Appeal dismissed. Cross-appeal allowed.

REASONING:

(1) No. To mitigate any damages arising from dismissal, an employee must make reasonable efforts to seek comparable employment; and it remains the employer’s burden to prove the employee’s failure to do so. “Comparable employment” does not mean “any employment” but comprehends employment comparable to the dismissed employee’s employment with his or her former employer in status, hours and remuneration. The employment offered by Mac’s was not comparable and the respondents acted reasonably in refusing it. The Court agreed with the motion judge, based on her findings rooted in the evidence, that the appellant did not discharge its burden to prove the respondents had failed to mitigate their damages.

(2) No. Wrongfully dismissed employees are entitled to damages for the employment benefits they would have received as part of their employment compensation. The Court agreed with the motion judge that any benefits to which the respondents were entitled as part of their retirement pension plan should not be viewed as employment compensation for lost employment benefits and therefore should not be deducted from the damages awarded for lost employment compensation.

(3) Yes. The motion judge erred in her interpretation of the Savings Plan. Given the motion judge’s finding that the respondents were entitled to the compensation that they would have received had they remained employed, she should have awarded damages for lost Savings Plan benefits in the amount of 6% of their base salaries for the period of reasonable notice, less the amounts already paid by the appellant for the 8 weeks of statutory notice due to the respondents.


Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447

[Doherty, Rouleau and Brown JJ.A.]

Counsel:

Larry P. Reimer, for the appellant

Stuart Katz and D. Warakaulle, for the respondent

FACTS:

The respondent, D, tripped over a skateboard on a visit to a Toronto mall. The respondent started an occupier’s liability action against the appellant for general and special damages in the amount of $1 million. The appellant defended, denying it was negligent, and asserting a defence of contributory negligence.

The appellant moved for summary judgment dismissing the action. The respondent did not bring a cross-motion for judgment in his favour. Nevertheless, the motion judge granted judgment to the respondent, and directed a trial of the assessment of damages in the event the parties could not settle that issue.

ISSUES:

(1) Was the judgment the product of an unfair process?

(2) Did the motion judge impermissibly rely on hearsay evidence?

(3) Was the appellant liable under s. 3(1) of the Occupiers’ Liability Act?

HOLDING:

Appeal allowed.

REASONING:

(1) Yes. The appellant submitted that by granting a judgment not requested by the plaintiff by way of cross-motion, the motion judge acted unfairly in two ways. First, he did not give the appellant notice of its potential litigation risk. Second, to grant judgment in favour of the plaintiff, the motion judge was required to deal with the appellant’s pleaded contributory negligence defence.

The respondent submitted that cases exist in which the court has granted judgment in favour of the party responding to a summary judgment motion, notwithstanding the absence of a cross-motion.

The Court held that the fundamental principle of summary judgments, which was emphasized by the Supreme Court in Hryniak v Mauldin, is that the result must be a fair and just one. In this case, the motion judge’s judgment was not fair and just, based on the combination of four factors.

First, the respondent did not bring a cross-motion for judgment. In fact, D submitted that this was not an appropriate case to be determined by summary judgment, and that a full trial was required. Second, one of the reasons advanced by D in support of his argument for a full trial was the need for further evidence by additional witnesses. Third, the motion judge granted judgment without considering the defence of contributory negligence raised by the appellant. Fourth, the motion judge failed to put the appellant on notice that he might grant judgment against it, and thereby did not afford the appellant the opportunity to address that risk.

The combination of these factors gave the Court a sufficient basis to find a lack of procedural fairness on the motion.

(2) Yes. In his responding affidavit, D deposed that he himself had not seen the skateboard prior to the incident, but that his daughter had informed him that she had seen the owner of the skateboard playing with the skateboard on the floor with his feet. D also deposed that his fiancé had informed him of conversations she had with two unidentified members of the cleaning staff at the mall. One of these unidentified cleaners had told D’s fiancé that she was struck by the skateboard roughly an hour before the incident with D.

D also tendered an affidavit from a security expert. The security expert attached to his affidavit unsworn, handwritten statements given by D’s daughter and fiancé, almost two years after the incident. These unsworn handwritten statements contained information from the unidentified cleaners who were apparent witnesses of the incident and/or alleged prior events.

The principles that govern the admissibility of evidence on a summary judgment motion are the same as those that apply at trial, with the limited exception of permitting an affidavit made on information and belief, as per Rule 20.02(1) of the Rules of Civil Procedure. Rule 20.02(1) provides, in part, that an affidavit may be made on information and belief, but the affidavit must specify the source of the information and the fact of the belief. The rule goes on to state that the court may draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts.

If the evidence on information and belief goes to a fundamental contested aspect of the motion, the motion judge should first consider whether the evidence would be admissible at a trial. If not, the onus falls on the party proffering the evidence to justify some expansion of the rules governing admissibility in the context of a motion.

In this case, the information that D relayed from his daughter and fiancé went to the heart of the claim. The material information was provided by two unnamed members of the cleaning staff. Furthermore, D offered no explanation about why they could not provide their own affidavits, especially in light of the materiality of the information he attributed to them.

When accepting the evidence, the motion judge concluded that the evidence would have been admissible pursuant to the business records exception and the reliability and necessity exception to the rule against hearsay. The motion judge committed legal error with this conclusion.

The handwritten statements patently were not business records. Nor were the statements from D’s daughter or fiancé in his affidavit admissible under the principled exception, because there was no evidence about the need to admit that evidence or its reliability.

(3) No. The central issue with respect to the negligence claim was whether the company had breached its statutory duty by failing to take reasonable care to see that visitors of the mall were reasonably protected against the hazard of others using skateboards in the mall.

If the inadmissible hearsay evidence is removed from the negligence analysis, the remaining material evidence on whether the standard of care was met did not give rise to liability. The statutory standard of care is one of reasonableness in the circumstances, it does not require perfection or unrealistic or impractical precautions against known risks. The standard of care did not require the appellant to maintain a constant surveillance or lookout for potential danger.

The admissible evidence showed that the appellant had in place reasonable policies to ensure the safety of those entering the mall. It had no reason to foresee that the young skateboard owner’s conduct might pose a risk to D or others in the mall. In these circumstances, there was no genuine issue requiring a trial regarding the appellant’s liability for the injuries suffered. The Court therefore granted summary judgment and dismissed the claim.


Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449

[Juriansz, Brown and Roberts JJ.A.]

Counsel:

A. Miller, for the appellant

A. Formosa & C. Steven, for the respondent

FACTS:

The appellant is an architect. In 1986, he commenced work for an architecture firm, which was later purchased by the respondents, NORR Limited Architects & Engineers (“NORR”) in 2002. The appellant worked continuously for the firm from 1986 until 2002 when he was dismissed as a result of the sale to the respondents, but was re-hired by the respondents the same day.

In 2006, the appellant wanted to increase his weekly hours. A new employment contract was signed to reflect this change and to increase his wages. Attached to this contract, and undoubtedly agreed to by the appellant, was “Pay Code 3”. Pay Code 3 was a document that provided that notice of termination without cause and severance pay would be determined exclusively with reference to the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA), and provided a chart outlining the weeks’ notice and severance pay an employee was entitled to, based on years of service.

In 2013, the appellant wanted to transition to part-time employment. After a series of negotiations, NORR reluctantly agreed to allow him to transition to part-time work. However, their acceptance was contingent upon the appellant first resigning his position, and then being re-hired as a part-time employee. He would also have to waive his right to notice and severance pay for all his previous years of service. After seeking legal advice, the appellant accepted this offer and commenced his part-time employment.

In January of 2016, the appellant’s employment was terminated on 3.5 weeks’ notice with no severance pay. The appellant brought an action for wrongful dismissal based on NORR’s failure to give him common law notice.

On NORR’s summary judgment motion, the judge determined that the resignation and rehiring in 2013 was ineffective, as it would represent “an entirely artificial attempt to create an interruption in employment when in fact there was none”. Instead, she found the events in 2013 to be an amendment to the 2006 agreement. She determined that the appellant had been continuously employed since 1986, and so was entitled to the maximum of 8 weeks’ notice provided in the ESA. The motion judge also found that the appellant had waived his common law right to notice in 2006, as the terms in Pay Code 3 were sufficiently clear and lacking any ambiguity so as to warrant judicial intervention in their application.

The appellant appealed on the ground that 2013 agreement was unenforceable. NORR cross-appealed on the ground that the appellant failed to mitigate his losses.

ISSUES:

(1) Did the motion judge err in finding that “the events in 2013” served to amend his 2006 agreement of employment such that he was still bound by his 2006 waiver of his common law reasonable notice entitlement?

(2) If so, was there consideration for the new terms?

(3) Did the appellant fail to mitigate his damages?

HOLDING:

Appeal and cross-appeal dismissed.

REASONING:

(1) No. The Court deferred to the motion judge’s factual finding that there was no resignation in 2013, and therefore no new agreement. Under ss. 5(1) and 9(1) of the ESA, the agreement in 2013 was an invalid attempt to create a break in an employment relationship when there never was one. Subsection 5(1) invalidates attempts to contract out of minimum protective standards in the ESA, including the 2016 agreement in this case. The 2013 agreement simply served to amend the 2006 agreement to reflect his change from full-time to part-time work, such that the appellant’s waiver of common law reasonable notice was still valid and active.

Machtinger v HOJ Industries Ltd, [1992] 1 S.C.R. 986 laid out that absent a clear rebuttal to the contrary, employees are to be afforded the common law standard of reasonable notice. However, in this case, Pay Code 3 was a very clear and unequivocal waiver of this right. It laid out exactly what notice the appellant could expect based on his years of service. At all times, he was aware that his termination rights were the minimums provided under the ESA.

(2) Yes. The Court dismissed this argument fairly quickly. Both the 2006 and 2013 amendments were made at the request of the appellant. In 2006 he wanted to work more hours, and in 2013 he wanted to scale those hours back. In 2013, his hourly wage was kept the same as when he was a full-time employee. Many benefits accrued to Mr. Ariss under both the 2006 and 2013 agreements and so sufficient consideration is easily established.

(3) No. While it was not in dispute that a terminated employee must make reasonable efforts to find a new job and thus mitigate their losses, consideration of the factual context must guide the finding of ‘reasonable’. In Carter v. 1657593 Ontario Inc., 2015 ONCA 0823, the Court stated that a terminated employee must seek to find ‘comparable employment’, having regard to status, hours and remuneration. The appellant canvassed the area in which he lived and attempted to find a new job. A terminated employee is not required “to uproot himself far from home in order to pursue any possible employment opportunity”. In this case, the appellant made reasonable attempts to find new employment


Downey v. Arey, 2019 ONCA 450

[Doherty, Nordheimer and Harvison Young JJ.A.]

Counsel:

A. Butcher, for the appellant

D. Saverino, for the respondents

FACTS:

The motion judge granted summary judgment to the respondents enforcing an oral agreement of purchase and sale between the respondents and the appellant. The agreement was for the sale of a property, and was originally scheduled to close on August 31, 2016.

The respondents were not in a position to close on that date, and maintained that there was a specific agreement to extend the closing date to May 31, 2017. The appellant contended that there was no such agreement to extend the date beyond the original closing date. As both the agreement and the alleged extension were said to be oral, there was little by way of documentary evidence in determining this crucial factual question.

ISSUES:

Could the matter of whether the closing date had been extended be properly resolved by way of a summary judgment motion?

HOLDING:

Appeal allowed.

REASONING:

No.

While the motion judge acknowledged that there were factual disagreements which raised genuine issues for trial, he went on to hold that he could grant summary judgment using the enhanced fact-finding powers found in Rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure.

Rule 20.04(2.1) identifies two fact-finding powers that can be used to address factual disputes. A motion judge can both evaluate credibility and draw reasonable inferences from the evidence, unless the interests of justice required that those powers be exercised only at trial. The reference to Rule 20.04(2.2) was in error, since the motion judge did not conduct any mini trial.

In this case, the motion judge’s findings that the agreement was made to extend the closing date is inconsistent with the evidence and pleadings of both parties. This finding also cannot be explained by reliance on any assessment of the credibility of either party.

Furthermore, the evidence before the motion judge did not permit the drawing of reasonable inferences from primary facts. The events referred to by the motion judge as the basis for the inference were essentially neutral. Again, the motion judge did not purport to make credibility assessments with respect to the explanations put forward.

In summary, this case is not one which the motion judge could make the necessary findings to determine the claim. The inferences made were unreasonable, and unsupported in the evidence. Reliance on these inferences in the finding constituted a palpable and overriding error, necessitating intervention.

Although the appellant also moved for summary judgment, this was equally not a case for summary judgment in favour of the appellant. This was a case for trial.


McRae Cold Storage Inc. v. Nova Cold Logistics ULC, 2019 ONCA 452

[Sharpe, Trotter and Harvison Young JJ.A]

Counsel:

R. Birken, for the appellant

E. Sherkey and W. Gee, for the respondent

FACTS:

The appellant leased space in a cold storage facility owned by the respondent pursuant to a lease agreement dated March 2013 (the “Lease”). A clause in the Lease allowed Nova Cold to pass along certain increases in energy costs to McRae. The Lease was for a 5-year term but provided an option to renew if McRae was not in default under any terms of the Lease. In 2016, a dispute arose as to the proper interpretation of the increased energy costs clause. Nova Cold claimed it was entitled to additional payment under the clause, but McRae did not pay any of the increased energy costs claimed by Nova Cold.

In March 2017, Nova Cold advised McRae that it considered McRae’s failure to pay the increased energy costs claimed to be a default under the Lease. The respondent informed the appellant that if it failed to pay it would not be permitted to exercise its option to renew the Lease. At the end of September 2017, McRae wrote to Nova Cold advising that it was exercising the renewal option. Nova Cold responded a few days later and rejected the purported renewal, stating again that since McRae was in default it could not renew the Lease.

In early March 2018, McRae brought an application seeking an interpretation of the energy clause. The application judge found that McRae was in breach of its obligation to pay for increased energy costs. As a result, McRae was in default and not entitled to renew. The application judge also declined to provide McRae relief from forfeiture due to McRae’s failure to act with due diligence.

ISSUES:

Did the application judge err in declining to grant relief from forfeiture?

HOLDING:

Appeal dismissed.

REASONING:

No. Given the application judge’s interpretation of the Lease, which McRae does not challenge, there could be no question that McRae was in default under the Lease. As a result, it had not satisfied one of the conditions precedent to the renewal of the Lease. The application judge correctly noted that where preconditions to the renewal of a lease are in issue, the jurisdiction to grant relief from forfeiture is narrower than the three-pronged test applied in cases such as Saskatchewan River Bungalows. With respect to the renewal of a lease, a precondition for the exercise of any such equitable discretion is that the tenant has made diligent efforts to comply with the terms of the lease which were unavailing through no default of his or her own. The application judge did not apply the wrong legal test. In light of the correspondence between the parties, there was an ample evidentiary basis upon which to conclude that McRae had not acted with diligence to cure its default under the Lease or to obtain a judicial interpretation of the impugned energy clause.


Newell v. Sax, 2019 ONCA 455

[Feldman, Roberts and Fairburn JJ.A.]

Counsel:

J.D. Sloan, for the appellants

R.G. Tanner, for the respondent

FACTS:

The respondent is a long-standing client of the appellant. Over the course of several years, the appellant acted on several matters for the respondent in his capacity as a real estate lawyer.

This appeal concerns the account on the services rendered by the appellant in relation to the $14 million sale of the respondent’s three-story eleven-unit commercial building in Toronto. Without issuing an account or seeking the respondent’s authorization, the appellant paid the amount of the account in full ($187,044.40) out of the trust funds he was holding on the respondent’s behalf. He later provided the respondent with his account that he reconstructed from memory, since he had no written retainer agreement with the respondent, and kept no time dockets.

The respondent sought an assessment of the account pursuant to s. 3 of the Solicitors Act. The respondent did not personally appear at the hearing, but was represented by counsel. The Assessment Officer confirmed with the respondent’s counsel that he and the respondent understood that his client’s absence constituted a waiver of her right to testify to the reasonableness of any evidence submitted. The appellant was the only witness at the hearing, and the Assessment Officer made a ruling that curtailed the respondent’s cross-examination of of the appellant.

The Assessment Officer noted that she would assess the account on a quantum meruit basis. While the billed amount was accepted as fair and reasonable in the circumstances, it was reduced by 20% because of the deficiencies relating to the lack of a written retainer agreement and time dockets.

The respondent moved to oppose confirmation of the assessment. The application judge found that because the respondent did not attend the hearing, the Officer made unwarranted adverse findings against her. The application judge concluded that those findings disclosed a reasonable apprehension of bias. As a result, the application judge gave no deference to the Assessment Officer’s findings, and the account was reduced to $26,375.00.

ISSUES:

(1) Was there a reasonable apprehension of bias on the part of the Assessment Officer?

(2) Did the application judge err in his assessment of the solicitor’s account?

HOLDING:

Appeal allowed.

REASONING:

(1) Was there a reasonable apprehension of bias on the part of the Assessment Officer?

No. The standard for finding a reasonable apprehension of bias is very high. The test, articulated by the Supreme Court in Committee for Justice and Liberty et al. v. National Energy Board et al., is whether “an informed person, viewing the matter realistically and practically” would conclude that the matter was not decided fairly. Importantly, the grounds for this apprehension must be substantial.

The Court afforded significance to the fact that the Assessment Officer asked the respondent’s counsel to confirm that the respondent was waiving her right to put forward evidence by failing to appear at the hearing. As mentioned above, the respondent’s counsel confirmed this was the case.

Further, the Court found that the Assessment Officer’s reasons clearly demonstrated that she was not biased against the respondent. Rather, her reasons merely demonstrated that she would weigh the evidence submitted by the appellant at face value. This was due to the respondent’s absence and consequential inability to testify as to the reasonableness of the evidence presented.

In this respect, the Court found that the application judge misapplied the test for bias, as the evidence clearly did not met the high threshold necessary for such a finding.

(2) Did the application judge err in his assessment of the solicitor’s account?

Yes. The Court found that the application judge erred in both failing to give deference to the Assessment Officer’s findings, and by taking a flawed approach to the assessment.

(a) Failure to give deference to Assessment Officer’s findings

The Court agreed that the Assessment Officer made an error by curtailing the respondent’s cross-examination of the appellant on his time records. However, the Court also pointed out that the Assessment Officer made numerous other findings that were subject to full cross-examination, and therefore not affected by the error. In the cross-examination that did take place, it was clear that the respondent was able to vigorously challenge the nature and extent of the work required by the appellant to complete the complex transaction.

As these findings were open to the Assessment Officer and free of any error, they were owed considerable deference. The application judge therefore erred in rejecting them.

(b) Flawed approach to the assessment

On this sub-issue, the Court found that both the Assessment Officer and application judge made the same error in analyzing the solicitor’s account. Namely, they erred by taking a purely mathematical approach to the assessment, rather than the nuanced and contextual approach required in a quantum meruit analysis.

The Court emphasized that a quantum meruit assessment is not a mere calculation, but is based on an assessment of the reasonable value of services rendered. This, in turn, requires an officer to consider all the relevant circumstances. These circumstances are usually examined in reference to the nine criteria established by the Ontario Court of Appeal in Cohen v. Kealey:

  1. The time expended by the solicitor;
  2. The legal complexity of the matter dealt with;
  3. The degree of responsibility assumed by the solicitor;
  4. The monetary value of the matters in issue;
  5. The importance of the matter to the client;
  6. The degree of skill and competence demonstrated by the solicitor;
  7. The results achieved;
  8. The ability of the client to pay; and
  9. The reasonable expectation of the client as to the amount of fees.

Since time is only one factor to consider, the reasonableness of a bill may nevertheless be allowed despite not all time being docketed. However, by the same token, the failure to keep proper dockets may justify a significant reduction in the assessment.

While the Assessment Officer considered the Cohen factors and made detailed credibility and factual findings on the appellant’s responsibility in effecting the transaction, the Assessment Officer fell into error by failing to analyze and apply these findings to arrive at a fair and reasonable assessment. The application judge similarly failed to engage meaningfully with the Cohen factors.

Nevertheless, the Court found that the Assessment Officer’s findings were not so affected by her error as to require a new assessment.

While the Court found that the appellant’s docketing deficiencies militated against accepting the face value of his account, some of the other Cohen factors should operate to offset the drastic reduction of the application judge. Namely, the considerable difficulties that arose during the transaction, the importance of such a large transaction to the client, and the skill and effort expended by the appellant to bring it to a successful conclusion. The Court determined that a fair and reasonable assessment of the account would be $100,000, inclusive of disbursement and taxes.


SHORT CIVIL DECISIONS

Distributions Katrina Inc. v. Enroute Imports Inc., 2019 ONCA 441

[Feldman, Paciocco and Fairburn JJ.A.]

Counsel:

D. Buntsma and E. Calvi, for the appellants

R. Malen, for the respondents

Keywords: Civil Procedure, Partial Summary Judgment, Equitable Set-Off


Rallis v. Myers, 2019 ONCA 437

[Doherty, Nordheimer and Harvison Young JJ.A.]

Counsel:

W. Rallis on his own behalf, for the appellant

D. Mayer and Her Majesty the Queen in right of Ontario for the respondents/moving parties

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Judicial Immunity, Rules of Civil Procedure, Rule 2.1.01, Proceedings Against the Crown Act, R.S.O. 1990, c. P.27, s. 5(6), Gao v. Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6497


Alharayeri v. Wilson, 2019 ONCA 438

[Tulloch, Benotto and Huscroft JJ.A.]

Counsel:

K. Phung, for the appellant

D. Rosenbluth, for the respondent

Keywords: Appeal Book Endorsement


Greenwoods GRM LLP v. Datawind Inc., 2019 ONCA 440

[Doherty, Nordheimer and Harvison Young JJ.A.]

Counsel:

K. Marciniak, for the appellant

C. West, for the respondent

Keywords: Appeal Book Endorsement


Talbot v. Nourse, 2019 ONCA 436

[Doherty, Nordheimer and Harvison Young JJ.A.]

Counsel:

W.S. Rapoport, for the appellant

K. Alexander and K. Stone, for the respondent

Keywords: Appeal Book Endorsement, Limitations Act, 2002


Sidhu v. Aviva Canada Inc., 2019 ONCA 444

[Tulloch, Benotto and Huscroft JJ.A.]

Counsel:

K. Doan, for the appellant

R. H. Rogers, for the respondent, Aviva Canada Inc.

K. Chan, for the respondent, Financial Services Commission of Ontario

Keywords: Appeal Book Endorsement, Standard of Review, Igbokwe v. HB Group Insurance Management Ltd., 2001 CanLII 3804 (ONCA), Walker v. Allstate Insurance Co., 2002 CanLII 44970 (ONCA)


The Bank of Nova Scotia v. 1860384 Ontario Inc., 2019 ONCA 445

[Tulloch, Benotto and Huscroft JJ.A.]

Counsel:

K. Wilkes, in person

D. K. Reason, for the respondent

Keywords: Appeal Book Endorsement, Corporations, Joint and Several Liability


CRIMINAL DECISIONS

R. v. D.C., 2019 ONCA 442

[Pepall, Lauwers and Paciocco JJ.A.]

Counsel:

A. Kapoor and D. Achtemichuk, for the appellant

C. Weiler, for the respondent

Keywords: Criminal Law, Assault, Aggravated Assault, Assault With a Weapon, Jury Instructions, Limiting Instruction, Evidence, Admissibility, Prior Consistent Statements, Prior Inconsistent Statements, Hearsay, Recent Fabrication, Impeachment, Credibility, R. v. Stirling, 2008 SCC 10, R. v. Ellard, 2009 SCC 27, R. v. Khan, 2017 ONCA 114, R. v. M.P., 2018 ONCA 608, R. v. Demetrius (2003), 179 C.C.C. (3d) 26 (Ont. C.A.), R. v. O.(L.), 2015 ONCA 394


R. v. J.F., 2019 ONCA 432

[Feldman, Lauwers and Nordheimer JJ.A.]

Counsel:

D. Embry, for the appellant

J. Epstein, for the respondent

Keywords: Criminal Law, NCR, Uttering a Threat, Arson, Failing to Comply with a Recognizance, Possession of a Weapon for a Dangerous Purpose, Youth Criminal Justice Act, S.C. 2002, c.1, s.34, Criminal Code, R.S.C. 1985, c.C-46, s.672.11, Mental Health Act, R.S.O. 1990, c. M.7, R. v. Cubillan, (2018) 143 O.R. (3d) 376 (CA), R. v. Joanisse (1995), 102 C.C.C. (3d) 35 (Ont. C.A.), R. v. Archer (2005), 202 C.C.C. (3d) 60 (Ont. C.A.)


R. v. Srun, 2019 ONCA 453

[Hoy A.C.J.O., Watt J.A. and Then J. (ad hoc)]

Counsel:

J. Lockyer and E. Taché-Green, for the appellant

A. Baiasu, for the respondent

Keywords: Criminal Law, Second Degree Murder, Attempted Murder, Manslaughter, Aggravated Assault, Aiding and Abetting, Defences, Intoxication, Provocation, Self-Defence, Jury Trial, Jury Charge, Evidence, Admissibility, Hearsay, Procedural Reliability, Substantive Reliability, Criminal Code, ss. 21(1)(a), 21(2), 229(a), 229(a)(ii), 232(2), R. v. Jacquard, [1997] 1 S.C.R. 314, R. v. Calnen, 2019 SCC 6, R. v. Bailey, 2016 ONCA 516, R. v. Daley, 2007 SCC 53, R. v. Salah, 2015 ONCA 23, R. v. Nygaard, [1989] 2 S.C.R. 1074, R. v. Cooper, [1993] 1 S.C.R. 146, R. v. Simon, 2010 ONCA 754, R. v. Simpson, [1988] 1 S.C.R. 3, R. v. Laliberty (1997), 117 C.C.C. (3d) 97 (Ont. C.A.), R. v. Ferrari, 2012 ONCA 399, R. v. Flores, 2011 ONCA 155, R. v. Jaw, 2009 SCC 42, R. v. Nealy (1986), 30 C.C.C (3d) 460 (Ont. C.A.), R. v. Cudjoe, 2009 ONCA 543, R. v. Demeter (1975), 25 C.C.C. (2d), R. v. W.(D.), [1991] 1 S.C.R. 742, R. v. Waite, 2014 SCC 17, R. v. Suzack (2000), 141 C.C.C. (3d) 449 (Ont. C.A.), R. v. Parberry (2005), 202 C.C.C (3d) 337 (Ont. C.A.), R. V. Hawkins, [1996] 3 S.C.R. 1043, R. v. B. (K.G.), [1993] 1 S.C.R. 740, R. v. Devine, 2008 SCC 36, R. v. Khelawon, 2006 SCC 57, R. v. Bradshaw, 2017 SCC 35, R. v. Couture, 2007 SCC 28, Fredericks v. R., 2018 NBCA 56, R. v. Seaboyer, R. v. Gayme, [1991] 2 S.C.R. 577, R. v. Kimberley (2001), 157 C.C.C. (3d) 129 (Ont. C.A.), Azoulay v. The Queen, [1952] 2 S.C.R. 495, R. v. Bucik, 2011 ONA 546


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…

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, construction, environmental contamination, product liability, debtor-creditor, insolvency and other business litigation. He also handles professional discipline and professional negligence matters, as well as complex estates and matrimonial litigation. In addition, John 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.