Good afternoon.

I hope everyone enjoyed the Father’s Day weekend. Summer is now officially here.

Please find below our summaries of last week’s civil decisions of the Court of Appeal for Ontario.

Topics covered last week included:

a. contractual interpretation of agreements of purchase and sale of land;

b. a priority dispute between an Ontario and Nunavut insurer with respect to SABs paid by an Ontario insurer in respect of an MVA in Nunavut involving a driver also insured in Ontario;

c. a decision in French relating to jurisdiction/real and substantial connection;

d. raising new issues on appeal in the context of the enforcement of a mortgage and new allegations of a criminal interest rate being charged;

e. the duty to defend under a CGL policy for failure to supervise an employee in a sexual abuse claim;

f. security for costs;

g. the presumption of resulting trust in respect of the family residence (and whether the home constituted a matrimonial home);

h. the enforceability of a lawyer’s contingency fee agreement with a client under disability without court approval;

i. limitation periods on demand debts; and

j. the determination of the date of separation for the purpose of arriving at a valuation date and calculating the equalization of net family property.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email


Ju v. Tahmasebi , 2020 ONCA 383

[Doherty, Hourigan and Fairburn JJ.A.]


Julian Binavince, for the appellants
Pathik Baxi, for the respondent

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase of Sale of Land, Duty of Good Faith, Bhasin v. Hrynew 2014 SCC 71


The appellants and individual respondent (“respondent”) entered into two agreements of purchase and sale (“agreements”) for a property that the appellants were responsible for having severed into two lots. The respondent provided a $100,000 deposit at the time that the agreements were entered into. The respondent agreed to pay a second total deposit of another $100,000 ($50,000 per lot) “after the seller provides City or OMB severance approval to the buyer’s lawyer.” Over two years after the agreements had been entered into, the appellants informed the respondent that the lots had been severed. Shortly after having told the respondent about the severance, the appellants insisted on payment of the second deposit “ASAP”. When the respondent did not comply with the appellants’ unilaterally imposed deadline for payment, the appellants terminated the agreements and relisted the properties for sale. When the specified closing date finally arrived, neither party tendered to close.

The appellants brought an application a declaration that the respondent had repudiated the agreements by failing to pay the second deposit and that the $100,000 deposit that had been paid be forfeited to the appellants. They also asked for a trial with respect to the damages caused by the respondent’s purported repudiation of the agreements. The application was dismissed.


Did the application judge err in any of the following respects?

  1. Misapprehending the date on which the approval for severance had been obtained.
  2. Misapprehending the date on which the second deposit should have been paid.
  3. Misapplying the doctrine of good faith performance.

Appeal dismissed.


1. No. The application judge determined that the City had approved the severance on the date of the TLAB decision granting the severance. In any event, even if the date of the City’s approval was later (when a Certificate of Offical was obtained), the decision did not turn on this point. Once the respondent was finally informed of the severance, she asked for an indulgence because she was out of the country. When faced with a request for an indulgence, the appellants behaved unreasonably. That finding is not fixed in the date of the city approval, but in the appellants’ behaviour in the over six months preceding their sudden insistence upon payment of the second deposit.

2. No. Where there is no express reference in an agreement to the time of performance, the law requires performance within a reasonable time. What is reasonable will be determined upon the facts of the individual case. The application judge was under no obligation to set out what date would have been reasonable. The key is that, in light of all of the operative facts, she concluded that August 7, 2018 was not reasonable.

3. No. It was a violation of the principle of good faith and unreasonable to proceed as the appellants did: ignore the respondent’s repeated requests for an update for many months, withhold critical information about the city approval, and then demand immediate payment by an arbitrarily set date when the respondent said she was not in a position to pay because she was out of the country and needed an indulgence.

Travelers Insurance Company of Canada v. CAA Insurance Company, 2020 ONCA 382

[Lauwers, Paciocco and Fairburn JJ.A.]


Daniel Strigberger and Julianne Brimfield, for the appellant
Jamie R. Pollack and Stacey A. Morrow, for the respondent

Keywords: Insurance Law, Automobile, Statutory Accident Benefits, Priority Dispute, Statutory Interpretation, Standard of Review, Insurance Act, RSO 1990, c I8, s. 224, 226, 226.1, 268, Disputes Between Insurers Regulation, O. Reg. 283/95, Statutory Accidents Benefits Schedule, O. Reg. 34/10, s. 3(7)(f), Unifund Assurance Company of Canada v. Insurance Corporation of British Columbia, 2003 SCC 40, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Intact Insurance Company v. Allstate Insurance Company of Canada, 2016 ONCA 609, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. , 2016 SCC 37, MacDonald v. Chicago Title Insurance Co. of Canada, 2015 ONCA 842, leave to appeal refused, [2016] S.C.C.A. No. 39, Benson v. Belair Insurance Company Inc., 2019 ONCA 840, Ontario (Finance) v. Echelon General Insurance Company, 2019 ONCA 629, Allstate Insurance Company of Canada v. Motor Vehicle Accident Claims Fund, 2007 ONCA 61, Young v. Ontario (Minister of Finance) (2003), 68 O.R. (3d) 321 (C.A.), Potts v. Gluckstein (1992), 8 O.R. (3d) 556 (C.A.), leave to appeal refused, [1992] S.C.C.A. No. 42, Corbett v. Co-operative Fire & Casualty Co. (1984), 34 Alta. L.R. (2d) 158 (Q.B.), MacDonald v. Proctor (1977), 19 O.R. (2d) 745 (C.A.), aff’d [1979] 2 S.C.R. 153, Primmum Insurance Co. v. Allstate Insurance Co. , 2010 ONSC 986, aff’d 2010 ONCA 756, leave to appeal refused, [2011] S.C.C.A. No. 13,


The claimant was catastrophically injured in an accident in Nunavut, where she was temporarily employed as a nurse supervisor. She was driving a Nunavut-plated vehicle owned by the Government of Nunavut (GN) and covered by a Nunavut motor vehicle insurance policy issued by Travelers Insurance Company of Canada to the GN. Under that policy the claimant was entitled to Nunavut statutory accident benefits (SABs).

The claimant was ordinarily resident in Ontario. She owned a car plated in Ontario and insured by CAA Insurance Company under the terms of the Ontario Standard Automobile Policy (“OAP”), which included coverage for prescribed SABs. Ontario SABs are more generous than those of Nunavut.

Under the terms of her Ontario insurance policy, the claimant was contractually entitled to claim Ontario SABs from CAA. The OAP covers an insured wherever he or she drives in North America. The CAA coverage therefore followed the claimant to Nunavut. This was the basis on which the claimant was entitled to seek SABs under the CAA policy, even though the accident that led to her injuries occurred in Nunavut and did not involve her Ontario-insured car. CAA has been paying those benefits.

CAA pursued Travelers for reimbursement for some or all of the benefits CAA paid to the claimant under Ontario’s legislated motor vehicle insurance regime as a form of a “statutory cause of action”: Unifund Assurance Company of Canada v. Insurance Corporation of British Columbia, 2003 SCC 40.

CAA succeeded in its claim against Travelers in an arbitration under s. 268 of the Insurance Act. The arbitrator required Travelers to reimburse CAA for the benefits CAA had paid to the claimant and to assume responsibility for paying the benefits to her in the future. The appeal judge upheld the arbitrator’s decision, accepting the arbitrator’s analysis. Travelers appealed. Nothing in this decision affects the claimant’s entitlement to Ontario SABs. The only question is which insurer must pay them.


Is CAA entitled to recover from Travelers some or all of the SABs paid to the claimant?


Appeal allowed.


No. In a lengthy decision analyzing the Unifund decision and other caselaw, and the relevant provisions of the Insurance Act and applicable regulations, the Court determined that the arbitrator erred in law in finding that Travelers was an Ontario insurer required to arbitrate priorities with CAA under s. 268 of the Insurance Act. Further, if the arbitrator had been correct in that finding, he misapplied the section by failing to give effect to Nunavut law regarding the claimant’s status and the limits on her entitlement to Nunavut benefits under Nunavut legislation. The arbitrator should have found that s. 268(5.1) applied so that the claimant’s decision to seek statutory accident benefits from CAA was final and binding on CAA.

Wilson c Fernand Campeau & Fils Inc, 2020 ONCA 384

[Rouleau, van Rensburg et Roberts JJ.A.]


Robert W. Scriven, for the appellants IRW and SCW
Pierre Champagne and Ginger Warner, for the respondents FC & Fils Inc. and Machinerie C. & H. Inc.

Keywords: Civil Procedure, Jurisdiction, Real and Substantial Connection, Originating Process, Service Outside Ontario, Rules of Civil Procedure , Rules 17.02(f), (g) and (p), Labatt Brewing Company Limited v NHL Enterprises Canada, LP, 2011 ONCA 511, Van Breda v Village Resorts Ltd, 2012 SCC 17, Chevron Corp v Yaiguaje, 2015 SCC 42


The issue on appeal is whether the motion judge erred in finding that the respondents do not carry business in Ontario, and overall failed to establish a geographic connection to Ontario, resulting in the litigation being improperly before the Superior Court of Justice on jurisdictional grounds.

The appellants operate a farm in Ontario near the Quebec border. They bought farming equipment from the respondent FC & Fils Inc. (“FC”), a distributor of farming equipment situated in Quebec, near the Ontario border. Following the sale to the appellants, FC was bought by the respondent Machinerie C. & H. Inc.

The appellants issued a claim against the respondents following problems with the farming equipment bought from FC. They served their claim without leave of the court, citing subrules 17.02(f) and (g) of the Rules of Civil Procedure. The respondents brought a motion seeking to set aside service and an adjournment. At the hearing, the appellants relied on 17.02 (f) and (g), but also submitted service was valid pursuant to 17.02(p), since the respondents carry on business in Ontario.

The motion judge found that the contract was entered into in Quebec, and that the respondents do not carry business in Ontario. Consequently, the motion judge concluded there was no jurisdictional link in Ontario. He set aside service and granted an adjournment.

The appellants submit the respondents carry on business in Ontario and consequently service is valid pursuant to 17.02(p). In the alternative, they submit the motion judge erred in finding the contract was concluded in Quebec. The respondents submit the appellants cannot rely on 17.02(p) because it was not pleaded.


1. Can the appellants rely on Rule 17.02(p) for service despite the subrule not being pleaded?

2. Did the motion judge err in finding the respondents do not carry on business in Ontario?

3. Did the motion judge err in finding the contract entered into in Quebec?


Appeal allowed.


1. Yes. The Court concluded this objection placed form over substance. The evidence and submissions put forward in first instance and on appeal squarely addressed the appellants’ argument that service outside of Ontario was valid based on the respondents carrying on business in Ontario. The Court found the respondents suffered no prejudice from subrule (p) not being specifically pleaded in the Statement of Claim.

2. Yes. The Court stated Ontario courts have jurisdiction over a dispute where there is a real and substantial connection with the province (Van Breda v. Village Resorts Ltd.). The Court noted that deference is owed to the factual finding of a company not carrying on business within the jurisdiction of a court.

To establish whether a corporation is carrying business within the jurisdiction, the Court assesses the actual presence of the corporation in the jurisdiction. The Court stated what is required is a substantial presence, accompanied by a degree of business activity which is sustained for a period of time.

After reviewing the evidentiary errors made by the motion judge, the Court concluded that where, as here, a corporation solicits business in Ontario, visits Ontario to sell farming equipment, derives about 40% of its revenues from sales in Ontario, operates a mobile repair service that repairs farming equipment in Ontario, and operates a GPS system that supports the farming equipment sold in Ontario, it can be said to carry on business in Ontario. The Court found that nothing in the evidence rebutted the presumption of jurisdiction created by this conclusion. Consequently, the respondents had a real and substantial connection with Ontario and Ontario courts had jurisdiction.

3. In view of this conclusion, the Court declined to assess whether the motion judge had erred on the contract issue.

7550111 Canada Inc. v. Charles, 2020 ONCA 386

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


Kevin Sherkin, for the appellant
Doug Bourassa, for the respondent

Keywords: Contracts, Real Property, Mortgages, Interest, Criminal Rate of Interest, Civil Procedure, Summary Judgment, Appeals, Fresh Argument on Appeal, s. Criminal Code, RSC 1985, c C-46, s 347, Interest Act, RSC 1985, c I-15, s 8, Rules of Civil Procedure, Rule 20.4(2), Kaiman v. Graham, 2009 ONCA 77, R. v. Reid, 2016 ONCA 524, leave to appeal refused, [2016] S.C.C.A. No. 432, Krayzel Corp. v. Equitable Trust Co. , 2016 SCC 18, Hryniak v. Mauldin, 2014 SCC 7


The appellant appealed the summary judgment granted to the respondent totalling almost $165,000 in respect of amounts owing under a mortgage.

  1. Did the motion judge err by denying the appellant’s request for an adjournment of the respondent’s motion and for leave to file additional materials?
  2. Did the motion judge err by failing to find that the interest, fees and charges sought by the respondent were in violation of s. 347 of the Criminal Code and s. 8 of the Interest Act?
  3. Did the motion judge err by granting summary judgment in favour of the respondent?

Appeal allowed in part.


1. No. It was within the reasonable exercise of the motion judge’s discretion to decline an adjournment and additional materials that did not appear to be necessary. The appellant was well aware that the motion date was peremptory to her whether or not she had counsel. The issues were relatively straightforward. The motion judge accommodated newly retained counsel by granting further preparation time. There is no indication that the appellant was prejudiced in any way.

2. The appellant submitted that the motion judge erred by failing to consider whether the mortgage’s one-month term, ten percent interest rate, and $12,000 lender fee, as well as the other fees and charges, amounted to a 131% rate of interest and therefore a criminal rate of interest contrary to s. 347 of the Criminal Code, R.S.C. 1985, c. C-46, and whether they contravened s. 8 of the Interest Act, R.S.C. 1985, c. I-15, by “increasing the charge on the arrears beyond the rate of interest payable on principal money not in arrears.”

The Court refused to entertain these arguments, since they were not pleaded or raised before the motion judge and were only raised for the first time on appeal. The general rule that an appellate court will not entertain new arguments for the first time on appeal exists because, typically, the evidentiary record is inadequate to permit an appellate court to properly determine the new issue. Moreover, the introduction of a new issue on appeal is usually prejudicial to the respondent and runs counter to the societal interest in finality and the expectation that cases will be disposed of fairly, fully and expediently at first instance. The burden falls squarely on the appellant to satisfy the court that it should exercise its discretion to permit a new argument to be advanced for the first time on appeal. The appellant failed to meet that onus in this case.

The Court then discussed the analysis that must be undertaken to determine whether a criminal rate of interest is being charged. On its face, the mortgage in question provides for a ten percent interest rate. Under s. 347(2) of the Criminal Code, “interest” is broadly defined to include “the aggregate of all charges and expenses, whether in the form of a fee, fine, penalty, commission or other similar charge or expense or in any other form, paid or payable for the advancing of credit… but does not include any repayment of credit advanced or any insurance charge, official fee, overdraft charge, required deposit balance or, in the case of a mortgage transaction, any amount required to be paid on account of property taxes”. A “criminal rate” of interest means “an effective annual rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds sixty per cent on the credit advanced under an agreement or arrangement”.

Where, as here, a mortgage does not contain on its face a criminal rate of interest, the party alleging that a mortgage contravenes s. 347 must identify the fees or other charges that it alleges are “interest”, and then provide evidence that the effective annual rate of interest calculated in accordance with “generally accepted actuarial practices and principles” exceeds sixty percent. Because the appellant did not challenge the various fees charged by the respondent in response to the motion for summary judgment, there was no evidence that would permit the court to determine whether they are properly considered “interest”. Moreover, the impact of such fees and charges on the interest rate is not a simple calculation that the court can make on the submissions of counsel. The appellant did not tender fresh evidence of a calculation of the rate of interest in accordance with generally accepted actuarial practices and principles.

3. No. The granting of summary judgment in the face of a counterclaim and third party claim alleging fraud against the respondent and others will not result in inconsistent findings. It was not clear a counterclaim had actually been filed or that it was before the motion judge. The motion judge determined that the respondent did not participate in any fraud and that the mortgage was valid. The appellant is bound by that determination.

However, the Court agreed that there was a small calculation error in the judgment relating to interest and other charges, and the appeal was therefore allowed for the narrow purpose of addressing that small calculation error only.

Southside Muay Thai Academy Corp. v. Aviva Insurance Company of Canada, 2020 ONCA 385

[Benotto, Zarnett, and Thorburn JJ.A.]


Elizabeth Bowker and Avi Sharabi, for the appellant, Aviva Insurance Company of Canada
Daniel S. Freudman, for the respondent, Southside Muay Thai Academy Corp.

Keywords: Contracts, Interpretation, Standard of Review, Insurance, Commercial General Liability, Coverage, Duty to Defend, Exclusions, Civil Procedure, Pleadings, Rules of Civil Procedure, Rule 25.06, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. , 2016 SCC 37


The appellant, Aviva Insurance Company of Canada claims it has no duty to defend the action commenced by P.F. against the respondent Southside Muay Thai Academy Corp. P.F. was a minor athlete and student of the Southside kickboxing team. Southside was responsible for supervising her while she was in their care. R.F. was the co-owner and employee of Southside. P.F. claims she was sexually assaulted by R.F. on May 1, 2017, while she and R.F. were on a return flight from Thailand after a kickboxing competition. She started an action against Southside and R.F. for damages. On September 7, 2018, R.F. was found guilty of sexual assault and sexual interference with a minor with whom he was in a position of trust and authority in respect of the same incident.

Aviva denied coverage or a duty to defend. Southside brought an application for coverage, which was granted. Aviva appealed.


Did the application judge err in finding that Aviva had a duty to defend?


Appeal allowed.


Yes. Aviva had no duty to defend. The subject matter of the action was the sexual abuse, and the policy specifically excluded coverage for “claims or actions arising directly or indirectly from abuse… or the supervision or retention of any person alleged to have committed abuse”. The policy was not ambiguous as to whether it covered a negligent failure to supervise in this context.

Foodinvest Limited v. Royal Bank of Canada, 2020 ONCA 387

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


Glenroy K. Bastien, for the moving party
Catherine Francis, for the responding party

Keywords: Civil Procedure, Appeals, Security for Costs, Orders, Varying or Setting Aside, Courts of Justice Act, R.S.O. 1990, c. C.43, , s. 7(5), Rules of Civil Procedure, Rules and 56.01(1)(d), 61.06(1)(a), 61.06(1)(b), Yaiguaje v. Chevron Corporation, 2017 ONCA 827, Health Genetic Center Corp. v. New Scientist Magazine, 2019 ONCA 968, Ravenda Homes Ltd. v. 1372708 Ontario Inc., 2017 ONCA 556, Hilson v. 1336365 Alberta Ltd., 2019 ONCA 727, Printing Circles Inc. v. Compass Group Canada Ltd. (2007), 88 O.R. (3d) 685 (S.C.), 1056470 Ontario Inc. v. Goh, [2007] O.J. No. 2545


This is a motion by Foodinvest Limited under s. 7(5) of the Courts of Justice Act, seeking to set aside an order of a single judge of this court for security for costs of its appeal. The appeal is of the summary judgment dismissing Foodinvest’s action against the responding party, RBC. In the action, Foodinvest alleged that it was a victim of fraud and claimed damages against its banker, RBC, for negligence, breach of contract, breach of trust, and breach of fiduciary duty. Foodinvest alleged that RBC had received notice that an account to which Foodinvest was forwarding funds was suspected to be fraudulent, and had failed to investigate and to notify its customer of the notice of possible fraudulent activity.

RBC obtained an order for security for costs of the appeal before it was perfected. Without disturbing the finding that Foodinvest had no assets in Ontario, and relying on Yaiguaje v. Chevron Corporation, 2017 ONCA 827, a panel of the Court set aside that order on the basis that it would not be just in the circumstances to order security for costs before the appeal was perfected. RBC brought another motion for security for costs after the appeal was perfected, and was again successful, however, this time, the order directed Foodinvest’s sole officer, director and shareholder to post the security for costs by way of a personal undertaking to be responsible for the costs. Foodinvest moved to set aside the new order.


Should the order for security for costs be set aside?


Motion granted.


Yes. On its motion, RBC only relied on a combination of Rules 61.06(1)(b) and 56.01(1)(d), that Foodinvest lacked sufficient assets in Ontario to satisfy a costs award. It did not rely on the “reason to believe the appeal is frivolous and vexatious” branch of the test (Rule 61.06(1)(a). Even where it is shown that there are insufficient assets in Ontario, the overriding consideration is whether an order for security for costs would be just, which must be considered holistically, taking into consideration the circumstances of the particular case: Health Genetic Center Corp. v. New Scientist Magazine, 2019 ONCA 968.

The Court agreed that Foodinvest did not have sufficient assets in Ontario. Moreover, it agreed that impecuniosity had not been established (since Foodinvest’s officer, director and sole shareholder had assets from which Foodinvest could raise funds). However, that does not end the inquiry. The Court must then apply the overarching principle of the “justness of the order sought”. Some relevant factors to determine the justness of the order are the merits of the claim (in this case the appeal), any delay in bringing the motion for security for costs, the impact of actionable conduct by the defendants (or respondents) on the available assets of the plaintiffs (or appellants), access to justice concerns, and the public importance of the litigation. The Court added a court should give careful consideration to the amount and form of security sought by the moving party. “Courts must be vigilant to ensure that an order that is designed to be protective in nature is not used as a litigation tactic to prevent a case from being heard on its merits, even in circumstances where the other provisions of rr. 56 or 61 have been met”. Each case must be considered on its own facts. “The correct approach is for the court to consider the justness of the order holistically, examining all the circumstances of the case and guided by the overriding interests of justice to determine whether it is just that the order be made.”

The Court concluded that it would not be just in this case to permit the order for security for costs to stand. RBC delayed in bringing its motion. The fact that RBC brought its motion for security for costs after it had incurred all of its costs in connection with the appeal, except for the costs related to the hearing, calls into question the purpose of the motion. Motions for security for costs are meant to provide “a measure of protection” for costs that will be incurred. In addition, the appeal was not plainly devoid of merit.

The fact that Foodinvest’s principal was able to pay the estimated partial indemnity costs of the appeal as well as the costs awarded against Foodinvest in the court below, was not a valid reason to seek security for costs against her personally. It would be unjust in the circumstances to require such an undertaking as the price for Foodinvest to proceed with an appeal that is not devoid of merit and that it has a right to pursue. The motion in this case was for security for costs in Foodinvest’s appeal. Foodinvest’s principal is not a party to the appeal. The motion judge misapprehended the undertaking proposed by Foodinvest’s counsel. Specifically, what was offered was that, if the court concluded that security for costs was warranted, Foodinvest’s principal was prepared to undertake to make available the monies to Foodinvest’s credit that were being held in Poland. It was not a concession that an order for security for costs was warranted, or that such an order could or should be made against Foodinvest’s principal personally without her consent. The Court disagreed that, even without the consent of Foodinvest’s principal, there was a basis for making an order requiring her to pay the costs of the appeal and of the proceedings below as security for the costs of Foodinvest’s appeal. Printing Circles Inc. v. Compass Group Canada Ltd. (2007), 88 O.R. (3d) 685 (S.C.), does not provide authority to order security for costs against a principal of a corporation. the issue in that case was not whether an order for security for costs should be made against the corporate plaintiff’s principal, but whether, once the defendant made out a case for security for costs, the corporate plaintiff could satisfy the order by giving a personal undertaking from its principal to pay costs in the event that the corporate defendant did not pay them.

Finally, while Rule 61.06 authorizes the court to order security for costs of the appeal and of the proceedings below, it does not follow that such an order will be made routinely. While the Court left detailed discussion of this issue for another day, it did indicate that some justification must be offered by the moving party when the amount of security sought under Rule 61.06 includes security for the costs awarded in the court below.

Kent v. Kent, 2020 ONCA 390

[Gillese, Brown and Jamal JJ.A.]


RGK, acting in person
Aleksandr G. Bolotenko, Phillipa C. Goddard and Miriam Vale Peters, for the respondents

Keywords: Family Law, Matrimonial Home, Wills and Estates, Presumption of Resulting Trust, Family Law Act, R.S.O. 1990, c. F.3, ss. 18(1) and 26(1), Pecore v. Pecore, 2007 SCC 17, Spencer v. Riesberry, 2012 ONCA 418


M, the mother, made a 1978 Will naming her daughter, J, the sole beneficiary. If J predeceased

M, J’s children alive on M’s death would be the beneficiaries.

M bought the Property in 1983. In 1996, as the sole owner of the Property, she transferred title to herself and J as joint tenants for nominal consideration. J was an adult at this time. M continued to live alone at the Property until 2008.

In 2008, J, her husband, RGK (the appellant), and their children began living with M at the Property, and did so until J’s death in 2014 on a rent-free basis. After J died, RGK continued to live with his mother in law, M, at the Property until M moved into long-term care in 2015. RGK continued to live at the Property on a rent-free basis. M paid all the expenses for the Property until she died in 2016.

In 2015, M made a new Will naming her two grandchildren (J and RGK’s children) as trustees and giving the Property to RGK and her two grandchildren. After J died, she then registered a survivorship application putting title solely into her name. She then transferred the Property to herself, RGK and her two grandchildren as joint tenants.

After M died in 2016, RGK claimed, as the sole beneficiary under J’s Will, that he owned two thirds of the Property (having inherited his wife, J’s half), and that his children each only owned one sixth. His children disagreed, maintaining that the two of them and their father each owned one third of the Property.

The application judge dismissed RGK’s application for a declaration that he owned two thirds of the Property. RGK appealed.

  1. Was the 1996 Transfer a Gift?
  2. Was the Presumption of Resulting Trust Rebutted by the 1978 Will?
  3. Was the Property a Matrimonial Home?

Appeal dismissed.


1. No. The application judge properly applied Pecore in determining that there was no gift by M to J of the Property, but rather that the presumption of resulting trust applied (discussed further under #3 below).

2. No. M’s 1978 Will was two decades before the 1996 transfer of the Property by M jointly into J’s name. Accordingly, it served as no evidence of M’s intention in 1996, which is the relevant time to determine intention as to whether there was a gift or resulting trust under Pecore. The Court agreed with the application judge that M’s actions in making a new Will in 2015 and transferring the Property back into her name after J died by way of survivorship application was evidence that she believed she was the sole owner and not evidence of a change of intention.

3. No. The Court did not accept RGK’s submission that in allowing him, his wife J, and their children to live on the Property together with her, beginning in 2008, that M made the Property their matrimonial home and thereby removed any consideration of resulting trust. RGK and J did occupy the Property as their family residence beginning in 2008. The issue to determine, therefore, was whether J had an “interest” in the Property within the meaning of ss 18(1) of the FLA in order to qualify the Property as a matrimonial home. J did not have an “interest” within the meaning of that section. J became a joint tenant in 1996, however, that transfer raised the presumption of resulting trust because it was for no consideration. The presumption was not rebutted. Since there was a resulting trust, J held her interest in trust for M. That is not an “interest” within the meaning of the subsection so as to make the Property a matrimonial home.

In addition, RGK had no interest in the Property within the meaning of ss 18(1) of the FLA. Since J’s interest in the Property was only as trustee of the resulting trust, ss 26(1) of the FLA did not apply to sever the tenancy between M and J on J’s death, such that RGK could claim an interest in J’s interest.

Peter B. Cozzi Professional Corporation v. Szot, 2020 ONCA 397

[Gillese, Brown and Jamal JJ.A.]


D. Jared Brown, for the appellant
Dennis Ong, for the respondent, JS
Diane Gillies, for the respondent, the Public Guardian and Trustee, Litigation Guardian for QN

Keywords: Solicitor and Client, Contingency Fee Agreements, Charging Orders, Civil Procedure, Parties Under Disability, Appeals, Fresh Argument on Appeal, Solicitors Act, R.S.O. 1990, c. S.15, ss. 24, 34, Contingency Fee Agreements Regulation, O. Reg. 195/04, s. 5, Rules of Civil Procedure, Rule 7.08, Kaiman v. Graham, 2009 ONCA 77, Chrusz v. Cheadle LLP, 2010 ONCA 553, Weenan v. Biadi, 2018 ONCA 288


The appellant, a lawyer practicing personal injury law through a professional corporation, represented one of the respondents, QN, a person under disability represented on the appeal by the PGT. The retainer was in respect of personal injuries arising out of a MVA. The appellant and QN entered into a written contingency fee agreement (“CFA”). At the outset of the retainer, the appellant acted as an intermediary to sell to his client “after-the-event” legal protection insurance (otherwise known as adverse costs insurance) in the amount of $100,000 (“ATE Policy”). Under the CFA, QN agreed to pay all disbursements incurred by the appellant on his behalf, without regard to the success of his claim for damages. In addition, QN assigned all proceeds from the ATE Policy to the appellant as security for those disbursements.

QN’s MVA action was tried by jury and over $160,000 in costs were ordered against him in favour of the respondent, JS. A dispute arose between the appellant and JS’s insurer, Aviva, as to entitlement to the proceeds of the ATE Policy.

The appellant brought an application to access the proceeds of the ATE Policy under the CFA. The application was dismissed because the appellant had not sought approval for the CFA from the court, which was a requirement under section 5 of the Contingency Fee Agreements Regulation (“CFA Regulation”) under the Solicitors Act, given that QN was under a disability. The application judge also refused to approve the CFA.

After the application was dismissed, the appellant then brought a motion seeking a charging order over the proceeds of the ATE Policy. That motion was dismissed because it was precluded by the rule against collateral attack, issue estoppel and abuse of process. In addition, the application judge found that, in any event, the appellant had not been instrumental in the recovery or preservation of the property in issue. He had merely served as an insurance intermediary to sell his client the ATE Policy. The lawyer appealed.

  1. Did the application judge err in finding the CFA to be unenforceable?
  2. Did the application judge err in dismissing the motion for a charging order?

Appeals dismissed.


1. No. The appellant’s argument that s. 24 of the Solicitors Act and s. 9 of the CFA Regulation permitted the enforcement of the CFA relating to disbursements even if it contravened s. 5 of the CFA Regulation was not raised before the application judge, and was only first raised on appeal.

In any event, the CFA was not fair and reasonable and was not in QN’s best interest. QN’s soon-to-be appointed litigation guardian was not involved when QN was asked to sign the CFA. A capacity assessment confirmed QN had little understanding of what he was signing or of the litigation.

2. No. To obtain a charging order on the monies in issue, the onus is on the solicitor to demonstrate that a charging order is warranted. The decision is discretionary. In deciding whether to exercise that discretion, the court must “balance the circumstances and equities of each case and client”. To obtain a charging order, the solicitor must demonstrate that:

i. the fund or property is in existence at the time the order is granted;

ii. the property was “recovered or preserved” through the instrumentality of the solicitor; and

iii. there must be some evidence that the client cannot or will not pay the lawyer’s fees.

The application judge correctly determined that the appellant did not satisfy this test. The proceeds of the ATE Policy were not the fruits of the litigation. QN was more indebted after the litigation than before it. Since no property was recovered, there could be no charging order. The Court agreed with the PGT that the facts of this case were “nothing less than shocking”, given that the appellant knew that QN was incapable and had a litigation guardian from whom the appellant was supposed to take instructions.

In light of its conclusion on the merits on the issue of the charging order, the Court declined to comment on the issues of collateral attack, issue estoppel and abuse of process.

Waksdale v. Swegon North America Inc., 2020 ONCA 391

[Pepall, Hourigan and Roberts JJ.A.]


Philip R. White and Jason K. Wong, for the appellant
Landon Young and Amanda Boyce, for the respondent

Keywords: Contracts, Interpretation, Employment, Wrongful Dismissal, Termination Clauses, Enforceability, Illegality, Severability, Civil Procedure, Summary Judgment, Employment Standards Act, 2000, S.O. 2000, c. 41, Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, North v. Metaswitch Networks Corporation, 2017 ONCA 790


This was a wrongful dismissal action. The appellant moved for summary judgment and not only lost the motion, but his action was dismissed as well.

The parties agreed that the termination for cause portion of the termination clause in the employment agreement violated the Employment Standards Act (“ESA”) and was therefore unenforceable. The parties also agreed that the termination with notice portion of the termination clause in the employment agreement complied with the minimum requirements in the ESA.

The motion judge relied on the termination with notice portion of the termination clause and found that the clause was complied with, and therefore the action was dismissed.


Did the application judge err in enforcing the termination with notice portion of the termination clause?


Appeal allowed.


Yes. In the present case, there is no question that the respondent would not be permitted to rely on the termination for cause provision. The issue was whether the two clauses should be considered separately or whether the illegality of the termination for cause provision impacts the enforceability of the termination with notice provision. The Court determined that the two termination clauses should be considered together as one clause.

An employment agreement must be interpreted as a whole and not on a piecemeal basis. The correct analytical approach is to determine whether the termination provisions in an employment agreement read as a whole violate the ESA. Recognizing the power imbalance between employees and employers, as well as the remedial protections offered by the ESA, courts should focus on whether the employer has, in restricting an employee’s common law rights on termination, violated the employee’s ESA rights. While courts will permit an employer to enforce a rights-restricting contract, they will not enforce termination provisions that are in whole or in part illegal. In conducting this analysis, it is irrelevant whether the termination provisions are found in one place in the agreement or separated, or whether the provisions are by their terms otherwise linked.

Here the motion judge erred because he failed to read the termination provisions as a whole and instead applied a piecemeal approach without regard to their combined effect. It is of no moment that the respondent ultimately did not rely on the termination for cause provision. The court is obliged to determine the enforceability of the termination provisions as at the time the agreement was executed; non-reliance on the illegal provision is irrelevant.

The mischief associated with an illegal provision is readily identified. Where an employer does not rely on an illegal termination clause, it may nonetheless gain the benefit of the illegal clause. For example, an employee who is not familiar with their rights under the ESA, and who signs a contract that includes unenforceable termination for cause provisions, may incorrectly believe they must behave in accordance with these unenforceable provisions in order to avoid termination for cause. If an employee strives to comply with these overreaching provisions, then his or her employer may benefit from these illegal provisions even if the employee is eventually terminated without cause on terms otherwise compliant with the ESA.

The Court declined to apply the severability clause in the employment agreement. A severability clause cannot have any effect on clauses of a contract that have been made void by statute: North v. Metaswitch Networks Corporation, 2017 ONCA 790. Having found that the termination for cause and termination with notice clauses should be understood together, the severability clause in the agreement could not be used to sever the termination with cause portion of the clause.

Michel v. Spirit Financial Inc., 2020 ONCA 398

[Benotto, Zarnett and Thorburn JJ.A.]


Michael A. van Bodegom and Daniel W. Veinot, for the appellants FK and Spirit Financial Inc, and respondent on cross-appeal, GK
Jeffrey Kriwetz and Alexander Hora, for the respondent/appellant on cross-appeal, AM

Keywords: Contracts, Debtor-Creditor, Demand Loans, Damages, Civil Procedure, Limitation Periods, Costs, Standard of Review, Limitations Act, R.S.O. 1990, c. L.15, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s 5, Hare v. Hare, 83 O.R. (3d) 766 (C.A.), Cross Bridges Inc. v. Z-Teca Foods Inc., 2016 ONCA 27, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Sup. Ct.), aff’d (1997) 74 A.C.W.S. (3d) 207 (C.A.), 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), 2105582 Ontario Ltd. (Performance Plus Golf Academy) v. 375445 Ontario Limited (Hydeaway Golf Club), 2017 ONCA 980, Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9


The respondent, AM sued the appellant FK, his corporation, the appellant Spirit, and FK’s son, GK, for repayment of investments or loans and for fraud. FK counterclaimed against AM for slander. AM was largely successful at trial, with FK being found liable to repay loans and for fraud. The slander claim was dismissed, as was AM’s claim against GK. Substantial indemnity costs were awarded against FK and Spirit. The claim by AM against GK was dismissed. FK and Spirit appealed. AM cross-appealed on the dismissal of the claim against GK.


Did the trial judge err by:

  1. failing to apply the limitation period;
  2. holding Spirit liable in addition to FK;
  3. improperly calculating damages;
  4. engaging in procedural unfairness;
  5. dismissing the slander action;
  6. awarding costs on a substantial indemnity basis; and
  7. dismissing the claim against GK.

Appeal allowed in part. Cross-appeal dismissed.


1. Yes. The trial judge made a finding of fact that all the advances made by AM to FK and Spirit were loans. The loans were advanced from 2000 to 2009, during which time the Limitations Act, R.S.O. 1990, c. L.15 was largely replaced by the Limitations Act, 2002 , S.O. 2002, c. 24, Sched. B. On January 1, 2004, the basic limitation period for demand loans was changed from six years from the date of the loan to two years from the date of the demand: Hare v. Hare, 83 O.R. (3d) 766 (C.A.), and Limitations Act, 2002, s. 5.

The first five loans were made by 2001. These loans and the promissory note were captured by the “old” Limitations Act. The trial judge dismissed the limitation period defence for these loans because he found that the partial payments made after AM’s demand had the effect of extending the limitation period. The difficulty here was that the limitation period had already expired for these loans when the partial payments were made. The partial payments therefore could not reset the limitation period clock on these loans: Cross Bridges Inc. v. Z-Teca Foods Inc. , 2016 ONCA 27. The first repayment made to Michel, was more than a year too late for even the most recent of the five loans to be saved from the statute bar.

The claims on the remaining loans were not barred by the limitation period, as acknowledgments of those loans were provided, or partial payments were made, before the limitation period expired.

2. No. Spirit was properly found liable for the loans.

The jurisprudence with respect to separating personal from corporate liability typically considers an attempt to hold individuals liable for corporate debts. But the analysis is instructive even though the question here was whether the corporation should be held liable in addition to the individual.

A separate legal entity will be disregarded when there is “complete control” and “conduct akin to fraud”: Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Sup. Ct.), aff’d (1997) 74 A.C.W.S. (3d) 207 (C.A.). It may also be disregarded where those in control of a corporation expressly direct a wrongful act: 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.).

The trial judge held that Spirit was completely controlled by FK and that Spirit was being used as a shield for fraudulent or improper conduct. He found that: (i) FK was “the controlling will and mind of both Spirit”; (ii) FK was “simply transferring all of the money in each between his own pockets”; (iii) Spirit was “just a plaything of FK’s”; and (iv) Spirit “must be considered an accomplice to FK’s fraudulent activities.”

These findings of fact would be sufficient to pierce the corporate veil and hold FK liable for obligations of Spirit – here they have a different but equally well-founded consequence. When Kramer directed Spirit to participate in – be an accomplice to – wrongful conduct, Spirit was rendered liable for that conduct.

3. No. An appellate court should only intervene in the award of damages where “the trial judge made an error of principle or law, or misapprehended the evidence, or it could be shown there was no evidence on which the trial judge could have reached his or her conclusion, or the trial judge failed to consider relevant factors in the assessment of damages, or considered irrelevant factors, or otherwise, in the result, made ‘a palpably incorrect’ or ‘wholly erroneous’ assessment of the damages”: 2105582 Ontario Ltd. (Performance Plus Golf Academy) v. 375445 Ontario Limited (Hydeaway Golf Club) , 2017 ONCA 980, Naylor Group Inc. v. Ellis-Don Construction Ltd. , 2001 SCC 58.

4. No. On the last day of evidence before the trial judge, FK conceded that AM’s Swiss franc advances were still available and belonged to AM. The trial judge found that he “agreed to pay those funds to AM in accordance with a signed direction”. He then “endorsed the Trial Record accordingly”. This was not procedurally unfair.

5. No. The dismissal of the slander action was fully supported by the findings of fact made by the trial judge.

6. No. The trial judge awarded substantial indemnity costs because of FK’s fraud, because of the failure to admit facts and because FK used the slander action to defend AM’s claims. A court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9. The Court saw no reason to interfere.

7. No. It was open on the evidence for the trial judge to find that GK didn’t have much to say in his father, FK’s business, and therefore the claim against GK was properly dismissed.

Neufeld v. Neufeld, 2020 ONCA 395

[MacPherson, Pardu and Huscroft JJ.A.]


Donna Wowk, for the appellant
Bryan Smith, for the respondent

Keywords: Family Law, Equalization of Net Family Property, Valuation Date, Date of Separation, Civil Procedure, Reasonable Apprehension of Bias, R. v. S.(R.D.), [1997] 3 S.C.R. 484


This was a 19-day trial to determine when the parties separated for the purposes of determining the valuation date for use in the calculation of the equalization of net family property.

The husband maintained that he and his wife were separated when the wife began sleeping in a separate room in the year 2000 (although they maintained some intimate relations thereafter). The wife maintained that the date of separation was in 2014, when she retained a family lawyer and commenced proceedings.

The date of separation, 2000 or 2014, made a big difference in the equalization calculation. The trial judge found that the date of separation, and therefore the valuation date was in 2014. The husband appealed.

  1. Did the trial judge fail to sufficiently address the credibility and reliability of the parties and other witnesses?
  2. Did the trial judge make palpable and overriding errors with respect to findings or inferences of fact?
  3. Was there a reasonable apprehension of bias on the part of the trial judge?

Appeal dismissed.


1. No. The fact that the trial judge did not use the word “credibility” in his lengthy reasons does not mean that he did not clearly assess credibility or make credibility findings.

2. No. The two factual errors cited by the appellant were, at best, minor errors, and were certainly not “overriding” such that the judge’s determination after a 19-day trial should be set aside.

3. No. The allegation of bias was outlandish. The appellant could not point to a single word of the trial judge during the 19 day trial that suggested any party or witness was treated unfairly. Complaints about credibility findings, the failure to refer to certain evidence or a reference to a potential limitation periods were, at most, complaints of legal error, not bias. An allegation of judicial bias should not be made lightly because, by definition, it challenges the integrity of the judge in relation to the core of the judicial function – to preside impartially over the case before the judge: R. v. S.(R.D.), [1997] 3 S.C.R. 484.


Van Delst v. Hronowsky, 2020 ONCA 402

[Rouleau, Hourigan and Roberts JJ.A.]


TJH, acting in person
Katherine Shadbolt and David Migicovsky, for the respondent


Zhang v. Shenglin Financial Group Inc., 2020 ONCA 404

[Brown, Paciocco and Nordheimer JJ.A.]


Rebecca Huang and Zina Rita, for the appellant
Douglas O. Smith and Cindy Zhang, for the respondent


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 over 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 over two decades of experience handling a wide variety of litigation matters. John assists clients with matters ranging from appeals, to injunctions, to corporate, partnership, breach of contract, construction, environmental contamination, product liability, debtor-creditor, insolvency and other business litigation. He also handles complex estates and matrimonial litigation involving disputes over property and businesses, as well as professional discipline and professional negligence matters for various types of professionals. In addition, John represents amateur sports organizations in contentious matters, and also advises them in matters of internal governance. John can be reached at 416-593-2953 or