Please find below our summaries of last week’s civil decisions of the Court of Appeal for Ontario.
Topics covered included family law, an appeal from a medmal jury verdict, summary judgment on malicious prosecution and related claims, the presumption of undue influence in the context of a wife’s guarantee of corporate debts of a public company that was also in many respects a family business, and the recoverability of disbursements for expert fees where the expert’s evidence was of very little value.
Blaney McMurtry LLP
[Gillese, Brown and Thorburn JJ.A.]
VAY, acting in person
Luigi De Lisio, for the respondent
Keywords: Family Law, Custody, Access, Best Interests of the Child, Maximum Contact Principle, Spousal Support, Civil Procedure, Appeals, Jurisdiction, Costs, Family Law Rules, O. Reg. 114/99, Rule 24(1), Hickey v. Hickey,  2 S.C.R. 518, Young v. Young,  4 S.C.R. 3, Mattina v. Mattina, 2018 ONCA 867, Marchildon v. Beitz, 2012 ONCA 668, Priest v. Reilly, 2018 ONCA 389, Christodoulou v. Christodoulou, 2010 ONCA 93
The trial judge granted custody of the parties’ child to the respondent wife, made an access order, and granted her spousal support. The husband appealed.
1. Whether a date of separation should be determined and, if so, what it should be.
2. Whether spousal support should be awarded to the wife and, if so, what was the appropriate quantum and duration.
3. Whether there should be parallel custody.
4. Whether there should be maximum contact with the child.
5. Whether there should be an equal sharing of holidays.
6. Whether the wife should continue treatment for her emotional issues and in particular her bipolar illness.
7. Whether the costs award to the wife should be vacated.
8. Whether the appellant was experiencing undue hardship.
9. Whether the wife should share in the marital debt and s. 7 expenses.
1. No. There was no need for the trial judge to determine a precise date of separation, since no order for the equalization of net family property was made.
2. Yes. The trial judge did not err in the amount of spousal support her ordered, or its five year duration, given this was an approximately five year marriage. An appellate court will not to interfere absent a demonstrated error in principle, a significant misapprehension of the evidence, or where the award is clearly wrong.
3. The trial judge applied the best interests framework in making his custody and access orders. He heard evidence from both parties and had the benefit of a report from the office of the children’s lawyer. While he found that both parties were capable and loving parents, he also found a history of confrontation between them, a pattern of intimate partner violence, a lack of trust, and an inability to communicate. In ordering sole custody in favour of the wife, the trial judge accepted the conclusion in the OCL Report that joint custody and shared parenting were not viable options and its recommendation that the wife be given sole custody. A trial court’s decision on custody and access matters is owed considerable deference on appeal, and there was no error on the part of the trial judge with respect to custody and access.
4. See #3 above.
5. See #3 above.
6. No. Assuming that the court even had jurisdiction to require the wife to continue to receive treatment for her disorder, the court determined that the trial judge did not err in refusing to make such an order, or in finding the wife to be a responsible and capable parent, and that the one occasion on which she appeared to have forgotten to take her mediation was an isolated incident.
7. No. There was no divided success. The wife was successful and was presumptively entitled to costs under Rule 24(1) of the Family Law Rules. There was no basis to set aside the costs order.
8. No. The trial judge took into consideration the husband’s debt situation (much of it student debt the preceded the marriage) when he established the quantum of spousal support. He did this despite having found that the husband was the author of his own financial misfortune, the debt was not incurred to support the wife or their child, and it would be inappropriate to hold the wife responsible for the debt. There was no basis to interfere in this case. If the husband’s financial circumstances change such that he becomes unable to meet his support obligations, he can bring a motion to change on that basis.
9. No. The trial judge found that both parties had a negative net worth. He declined to make an order making the wife responsible for half of the debts that the husband had accrued during the marriage, citing a lack of jurisdiction. The Court agreed with the trial judge.
[Juriansz, Pardu and Huscroft JJ.A.]
Thomas J. Curry, Mitchell C. Brown, Mark Veneziano, Dena Varah and Robert Trenker, for the appellant
Christopher Morrison and Paul Cahill, for the respondents
Keywords: Torts, Negligence, MedMal, Causation, “But For” Test, Civil Procedure, Jury Charge, Evidence, Witnesses, Parent v. Janandee Management Inc. , 2017 ONCA 922, Lambert v. Quinn, 1994 CanLii 978 (ONCA), Stilwell v. World Kitchen Inc., 2014 ONCA 770
The respondent, Ms. B was pregnant with twins. She saw the appellant for an unscheduled appointment on July 5, 1991, as she was experiencing severe abdominal pain and excessive weight gain. The appellant sent her home to rest. When the symptoms became worse, she went to Niagara Hospital on July 7 which arranged for her immediate transfer by ambulance to McMaster Hospital. By then, her cervix was two or three centimetres dilated. Doctors there delivered the babies by emergency C-section at 27 weeks into the pregnancy. As a result of the premature birth, one of the twins, KW, sustained brain damage.
The jury found that the appellant was negligent for, among other things, failing to arrange for her to be seen immediately by a perinatologist – a fetal medicine specialist – on July 5. The theory of the respondents’ case was that if she had been seen on July 5, 1991 by specialists at a tertiary center with expertise in high-risk pregnancies, like McMaster Hospital, then the Twin-to-Twin Transfusion Syndrome (“TTTS”) imperilling the babies would have been detected and treated, and the premature delivery and the brain damage to KW would have been avoided.
TTTS is a rare complication of twin pregnancies. One twin gets too much fluid, while the other gets too little. The twin getting excess fluid continues to urinate, creating a large volume of amniotic fluid around it. This large volume of fluid compresses the other twin who gets less and less fluid. Untreated, this condition is usually fatal for both.
The respondents’ experts testified that there was effectively only one treatment in 1991: amnioreduction, a procedure where a needle is inserted into the amniotic cavity to remove some of the excess fluid. If this was not possible, the only other option was an emergency C-section, which at this gestational age could have catastrophic consequences.
The matter went to trial in 2019. It was a two-issue case: 1. Did the appellant breach the standard of care? 2. If yes, did his breach of the standard of care cause the brain damage that KW sustained because of her premature birth? The jury answered, “yes”, to both questions. The appellant did not challenge the jury’s conclusion that he breached the standard of care, limited his appeal to issues related to causation.
1. Was the jury’s verdict unreasonable because there was no evidentiary basis to support the jury’s verdict on causation?
2. Did the trial judge’s charge to the jury contain legal errors on the issue of causation that resulted in a substantial miscarriage of justice?
a. Did the trial judge err by refusing to instruct the jury that they were permitted to draw an adverse inference from the respondents’ failure to call any witness from McMaster Hospital to give evidence on the availability of amnioreduction in 1991?
b. Did the charge give disproportionate weight to the respondents’ experts or mischaracterize the expert evidence?
c. Did the trial judge err by refusing to instruct the jury that a mere loss of chance is not compensable at law?
1. No. The test for appellate interference with a jury verdict is high. Here it was open to the jury to infer that had Ms. B been referred to McMaster Hospital on July 5, 1991, amnioreduction would have been performed to effectively treat the TTTS. McMaster Hospital was a tertiary centre specializing in high-risk or problem pregnancies. The jury could infer that the easy-to-perform treatment would have been administered, given that there was no other treatment available other than a potentially catastrophic early C-section. The respondents’ experts provided a basis from which the jury could infer that the TTTS would have been successfully treated at McMaster Hospital in 1991. The jury rejected the appellant’s expert’s “feeling” that amnioreduction was not offered at that time at McMaster Hospital. There may have been any number of reasons why the jury preferred the evidence of the respondents’ experts. It was open to them to do so and conclude that the treatment would have been administered and would have avoided the brain damage on the balance of probabilities.
a. No. The trial judge did not err in deciding not to instruct the jury that they could draw an adverse inference from the failure of the respondents to call a witness from McMaster Hospital to testify about whether amnioreduction was used to treat TTTS at the time. Either party could have called that evidence if they thought it was important.
b. No. The Court was satisfied that the statements challenged by the appellant, when read in their full context, would not have misled the jury. It would have been clear to the jury that Dr. B and Dr. F were not at McMaster Hospital in 1991, and that their views were not based on direct knowledge. It would have been clear that their views arose from the opinion that, in 1991, use of a needle to remove amniotic fluid was a relatively simple and well-known procedure, and it was the only option for TTTS.
c. No. No one had suggested that a mere loss of a chance to avoid injury was sufficient to establish causation. The appellant did not claim that a “lost chance” standard was put to the jury, or that the correct standard was not conveyed. He pointed only to the complexity of the case and the centrality of causation as reasons why this further direction was necessary. The Court saw no error in the trial judge’s decision to refrain from embarking on a discussion of loss of chance, which would have risked adding unnecessary complexity and confusing the jury.
[Rouleau, van Rensburg and Roberts JJ.A.]
Davin Charney, for the appellant
Robin A.F. Squires and Natalie T. Salafia, for the respondents
Keywords: Torts, False Arrest, Reasonable and Probably Grounds for Arrest, False Imprisonment, Negligent Investigation, Malicious Breach of Public Duty, Malicious Prosecution, Misfeasance in Public Office, Charter Violations, Civil Procedure, Partial Summary Judgment, Evidence, Witnesses to Pending Motion, Adverse Inferences, Canadian Charter of Rights and Freedoms, ss. 7, 9 and 10(b), Rules of Civil Procedure, Rule 20.02(1), 39.03, R. v. Storrey,  1 S.C.R. 241, Hryniak v. Mauldin, 2014 SCC 7, R. v. Shepherd, 2009 SCC 35, Tremblay v. Ottawa (Police Services Board) , 2018 ONCA 497, R. v. Golub (1997) , 117 C.C.C. (3d) 193 (Ont. C.A.), leave to appeal refused,  S.C.C.A. No. 571, 495793 Ontario Ltd. (Central Auto Parts) v. Barclay, 2016 ONCA 656, Payne v. Mak, 2018 ONCA 622, Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, Butera v. Chown, Cairns LLP, 2017 ONCA 783
The action arises out of two interactions between the appellant, M.W., and the respondents, Halton Regional Police Service (the “HRPS”) and Detective Constable A. The first interaction took place on February 18, 2015, when M.W. was questioned at the police station about an alleged assault against one of his sons “Co.” (no charges were laid). The second interaction took place on March 23, 2016, when M.W. was arrested and charged with assaulting his daughter “Ca.” (the charge was subsequently withdrawn by the Crown).
The respondents moved for summary judgment dismissing the action on the basis that there was no genuine issue requiring a trial as: (1) D.C. A. had reasonable and probable grounds to arrest and charge M.W. with assault; and (2) M.W. was not detained on February 18, 2015.
After considering the evidence on the motion and the arguments of counsel, the motion judge dismissed all of M.W.’s claims, except for the claim that his Charter rights had been violated in the context of what happened at the police station on February 18, 2015.
1. Did the motion judge make a reversible error in concluding that there were reasonable and probable grounds for M.W.’s arrest on March 23, 2016?
2. Did the motion judge err in dismissing all of the tort claims?
3. Did the motion judge err in granting partial summary judgment?
Appeal allowed in part.
1. No. Objectively reasonable grounds to make an arrest exist when “a reasonable person, standing in the shoes of the police officer, would have believed that reasonable and probable grounds existed to make the arrest”. The evidentiary record on the summary judgment motion, which included the video recording of Ca.’s interview, the history of the prior interactions between the HRPS and M.W. in connection with complaints from Co.’s school, and the confirmed fact that Ca. had disclosed the assault to an HCAS worker, fully supported the motion judge’s conclusion that D.C. A had objective grounds for M.W.’s arrest.
The motion judge did not err in failing to draw an adverse inference from the respondents’ failure to produce affidavit evidence from the HCAS worker to whom Ca. disclosed the assault and the Crown counsel who negotiated the resolution of the charge against him. While Rule 20.02(1) permits a judge on a motion for summary judgment to draw an adverse inference for the failure to tender the evidence of a witness, in this case, the respondents placed before the court all the evidence they considered necessary on the motion for summary judgment. While the respondents bore the evidentiary burden of demonstrating that there was no genuine issue for trial, they were not obliged to put the evidence of every possible witness before the court. If M.W. had considered the evidence of these witnesses, who were not witnesses over whom the respondents had exclusive control, to be important in his response to the summary judgment motion, he could have required their attendance for examination under Rule 39.03.
2. Yes. The motion judge erred in dismissing the non-Charter claims in relation to the February 2015 incident without making findings with respect to those claims. M.W. did not concede in argument on the motion that only the Charter claims would survive in relation to the February 2015 incident if there were reasonable and probable grounds for the March 23, 2016 arrest, and the judge erred in stating otherwise. The tort claims for this incident could not be dismissed on the basis that D.C. A. had reasonable and probable grounds for M.W.’s arrest on March 23, 2016, therefore the motion judge’s order in this respect was set aside, and those claims were permitted to proceed.
3. No. This was an appropriate case for partial summary judgment. This is not a case where intertwined claims could lead to inconsistent results. There were two distinct issues before the motion judge: the first was whether D.C. A. had reasonable and probable grounds for M.W.’s arrest in March 2016, and the second was whether M.W. was unlawfully detained in February 2015. Although the events of February 2015 provided some background and context for what occurred in March 2016, the tort and Charter claims alleged in relation to the events of February 2015 involved separate issues that did not depend on a finding of reasonable and probable grounds for arrest. It was therefore appropriate that the claims related to the February 2015 incident be allowed to proceed independently. While it is correct to say that the evidence about M.W.’s treatment in February 2015 would have been relevant to M.W.’s claims based on the investigation and arrest that took place in March 2016 had these claims continued, the March 2016 claims were disposed of on the basis that there were reasonable and probable grounds for M.W.’s arrest. This finding meant that his claims in respect of that date could not succeed, and it was accordingly appropriate that this part of the litigation be determined by summary judgment.
[Rouleau, Hoy and Hourigan JJ.A.]
Melanie Ouanounou and Kirby Cohen, for the appellant
Jonathan P.M. Collings, for the respondent DR
Taayo Simmonds, for the respondent JR
Keywords: Contracts, Debtor-Creditor, Guarantees, Defences, Undue Influence, Evidence, Presumption of Undue Influence, Geffen v. Goodman Estate,  2 S.C.R. 353, Bank of Montreal v. Duguid (2000), 185 D.L.R. (4th) 458 (Ont. C.A.), leave to appeal allowed,  S.C.C.A. No 298, CIBC Mortgage Corp. v. Rowatt (2002), 220 D.L.R. (4th) 139 (Ont. C.A.), leave to appeal refused,  S.C.C.A. No. 526, Royal Bank of Scotland v. Etridge (No. 2) ,  4 All E.R. 449 (H.L), Barclays Bank plc v. O’Brien,  4 All E.R. 417 (H.L.)
The respondents, DR and her husband, JR, guaranteed the indebtedness of JRjr33, Inc. (the “Corporation”), a publicly traded Florida corporation, to the appellant, JGB Collateral, LLC. DR granted a mortgage over a property she owns in Lanark, Ontario to the appellant as collateral security for the
Corporation’s indebtedness to the appellant. More than 50% of the Corporation’s outstanding shares were owned by entities controlled by JR, and DR was the Corporation’s Chairman and Chief Executive Officer.
The Corporation defaulted under the loan and filed for bankruptcy relief in the United States Bankruptcy Court. The guarantee was governed by New York law, and the New York Supreme Court found that the respondents’ guarantee was valid and enforceable. The respondents do not appear to have argued before the New York court that DR’s guarantee was the product of undue influence. The appellant, who had commenced an action in Ontario seeking possession and the subsequent sale of the Ontario property, brought a motion for summary judgment.
On a motion for summary judgment, the motion judge concluded that the mortgage on the Ontario property was not enforceable because it was the product of presumed undue influence on DR by JR, the appellant had constructive notice thereof, and it did not adequately ensure that DR received independent legal advice before she agreed to the mortgage. He dismissed the appellant’s action for enforcement of the mortgage.
Did the motion judge err in granting summary judgment dismissing the appellant’s action on the guarantee and collateral mortgage?
Yes. The motion judge erred in his articulation and application of the doctrine of presumption of undue influence. Applying the correct legal test, DR’s allegation of undue influence failed.
The presumption of undue influence is a rebuttable evidential presumption. It arises if the nature of the relationship between the debtor and the surety coupled with the nature of the transaction between them justifies, without any other evidence, an inference that the transaction was the result of the undue influence of one party over the other. When the presumption arises, there are two results. First, a lender is put on notice and inquiry. In order to protect itself from a claim that the guarantee provided to it was obtained by undue influence by the benefitting spouse or party, the lender must take reasonable steps to try to ensure that the proposed guarantor understands the transaction and is entering into it voluntarily by encouraging the guarantor to seek and obtain independent legal advice and a full explanation of the transaction. Second, if the lender has not taken the reasonable steps and the guarantor seeks to avoid liability on the guarantee or security by claiming that it was obtained by undue influence, the evidential onus is on the lender to adduce sufficient evidence to rebut the presumption.
The motion judge’s analysis was tainted by several errors. First, in determining whether the presumption arose, the motion judge considered only the nature of the relationship between DR and her husband. He failed to consider the nature of the transaction between them. While the respondents swore in their affidavits before the motion judge that DR had no financial interest in the Corporation, they acknowledged in their factums on appeal that DR had a financial interest in the Corporation. However, they argued that it was not significant, and, therefore, the motion judge’s failure to explicitly consider it was of no moment. The Court disagreed. DR had a significant interest in the Corporation (7%). Moreover, the Corporation was, in many respects, a family business. This was not a transaction which, from a business point of view, was of no benefit to DR.
In addition, while the Ontario property was a farm that had been in DR’s family for generations, JR had purchased the property from DR’s family and gifted it to DR. The property was presumably acquired with the fruits of JR’s business activities.
The relationship between JR and DR in which, DR “unquestioningly complied with any and all requests by her husband to sign documents” – when coupled with the nature of the transaction between them, did not justify an inference that the mortgage was procured by the undue influence.
Even if a presumption of undue influence did arise such that the appellant was put on notice to ensure DR was entering into the transaction freely, the appellant did so. The motion judge incorrectly elevated what Rowatt and Bank of Montreal say a lender must do to protect itself from an assertion of presumed undue influence (namely, take reasonable steps to try to ensure that the proposed guarantor understands the transaction and is entering into it freely by suggesting that the guarantor seek and obtain independent legal advice and a full explanation of the transaction) to a requirement that a lender obtain a written certificate from a lawyer that the lawyer has provided independent legal advice to the guarantor.
The evidence of the appellant was that its representative inquired of both attorneys representing both JR and DR whether everything that was stated in the guarantee had been explained to them, including the statement in the guarantee that it was explained to them by an independent solicitor, and both counsel confirmed that this was the case for both JR and DR. On these facts, this inquiry was sufficient to protect the appellant from DR’s assertion of presumed undue influence.
Having found that the presumption arose, and that the appellant was not protected from DR’s allegation of undue influence by the steps it had taken, the motion judge did not go on to consider whether, on the totality of the evidence, the allegation of undue influence was proved. Essentially, he treated his finding that the appellant had not taken sufficient steps as dispositive of the question of undue influence. But the presumption of undue influence can be rebutted in the absence of independent legal advice. While DR swore in her affidavit that she believed that she did not have any alternative but to sign the loan documents, as the motion judge noted, in her cross-examination she admitted that she signed the loan documents of her own free will and that her husband did not threaten or force her to sign any of the documents. She said in cross-examination “I have a choice, yes, I do”. When pressed on the inconsistency, she said “I had no choice but to sign the document because my choice was to ignore it and just sign the thing”. She also admitted that she swore and signed her affidavit because her husband asked her to. DR’s own evidence rebutted the presumption of undue influence. The motion judge’s comment that “the assertion that [DR] was wilfully blind has merit” was not proof of undue influence.
The motion judge’s judgment was set aside, and judgment on the mortgage and guarantee was granted in favour of the appellant.
[Tulloch, van Rensburg and Zarnett JJ.A.]
Earl A. Cherniak, Q.C., Jason M. Squire and Lindsay A. Woods, for the appellants
Eric S. Block, Jacqueline Cole and Patrick Healy, for the respondents
Keywords: Costs, Disbursements, Experts, Armak Chemicals Ltd. v. Canadian National Railway Co., 1991 CarswellOnt 440 (C.A.), Wesbell Networks Inc. v. Bell Canada, 2015 ONCA 33, R & G Draper Farms (Keswick) Ltd. v. Nature’s Finest Produce Ltd., 2016 ONCA 626, Armak Chemicals Ltd. v. Canadian National Railway Co., 1991 CarswellOnt 440 (C.A.), Wesbell Networks Inc. v. Bell Canada, 2015 ONCA 33
Following a successful appeal, the parties disagreed on the costs payable with respect to the proceedings before the Superior Court. In particular, there was a disagreement as to whether an almost $17,000 disbursement in respect of fees paid to an expert should be recoverable.
The appellants should not be awarded the $17,000 in fees paid to their expert.
In determining whether and to what extent disbursements to an expert should be allowed, the court considers, among other things, whether the expert made a contribution to the case and whether the evidence was of marginal value or crucial to the case. It was difficult to see in this case any value contributed by the evidence of the expert. The evidence essentially consisted of a compilation of publicly available data and a mathematical exercise, not opinion evidence. Expert evidence was not required. To the extent the mathematics produced amounts based on the share prices at which the appellants claimed they would have disposed of the shares, they were premised on an assumption that was not proven to the satisfaction of the application judge and were thus not useful.
Disallowing this disbursement did not amount to a distributive costs order (which practice has been previously disapproved by the Court). A distributive costs order involves an issue by issue review of the result of litigation, with the costs being determined by success on each issue rather than by reference to overall success in the litigation. There was no suggestion here that the appellants should not receive costs because of a lack of success on any issue. The appellants were ultimately successful on the issues of liability and damages (although not in the quantum they sought).
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.