Good afternoon.

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

Topics covered included the following:

  1. Condo law – Responsibility for repairing exclusive use common elements in a condominium under the condominium’s declaration and the Condominium Act, 1998 (unit owners were found responsible for repairing their exclusive use chimneys).
  2. Rights of Way – The scope of a right of way to access a cottage beach (did not include the right to drive a boat to the beach to launch and retrieve it).
  3. Family Law – The limitation period for setting aside a marriage contract (there is no limitation period, since the Court determined that this involves merely seeking a declaration with no consequential relief – in a concurring opinion Brown J.A. agreed on the result but disagreed that there was no applicable limitation period).
  4. Administrative Law – A labour arbitrator had exclusive jurisdiction over disciplinary proceedings against graduate students who were also unionized teaching assistants in respect of the York University strike of 2018. The University had no jurisdiction to discipline the students as a result of specific legislation that ended the strike.
  5. Commercial Leases – A notice of breach and termination need not include a demand for compensation for the breach under ss. 19(1) of the Commercial Tenancies Act. Mere demand for remedying of the breach is sufficient to constitute a valid notice permitting termination and re-entry.
John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email


CIVIL DECISIONS

Metropolitan Toronto Condominium Corporation No. 590 v. The Registered Owners and Mortgagees of Metropolitan Toronto Condominium Corporation No. 590, 2020 ONCA 471

[Juriansz, Fairburn and Nordheimer JJ.A.]

Counsel:

Eli S. Lederman and Kelly Hayden, for the appellant

Mark H. Arnold, for the respondents

Keywords: Real Property, Condominiums, Exclusive Use Common Elements, Civil Procedure, Appeals, Standard of Review, Questions of Law, Condominium Act, 1998, S.O. 1998, c. 19, ss. 7(5), 109(3), Condominium Act, R.S.O. 1980, c. 84, s. 41(5)(d), Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp. , 2014 SCC 53

facts:

The appellant condominium corporation is responsible for operating the common elements of a high-rise condominium in Toronto built in the early 1980’s. Of the 120 residential units in the building, 23 contain wood-burning fireplaces. The fireplaces were built at the time the building was constructed. Each of the units that have fireplaces are located on the top four floors of the building. Each fireplace is serviced by an individual flue and chimney which is dedicated to that fireplace. The chimney flues begin at the fireplace and extend through the building to the roof.

In 2013, the appellant’s Board of Directors hired specialists to investigate the state of the fireplaces. The specialists determined that the chimney flues had deteriorated to the point that they were no longer serviceable, and needed to be replaced or removed from service. In 2016, it was determined that it would cost approximately $1.5 million to remove and replace the chimney flues. It was also estimated that it would cost approximately $13,000 to cap and decommission all of the chimney flues.

The unit owners that have fireplaces want the appellant condo corporation to bear the cost of removing and replacing the chimney flues. The appellant argues that the individual owners of units with fireplaces should bear the cost of removing and replacing the chimney flues or, alternatively, the costs of capping and decommissioning the chimney flues.

The appellant brought an application in which it sought, under s. 109(3) of the Condominium Act, 1998, to amend the condo Declaration in two main respects. First, it sought to amend the Declaration to add Schedule F that would specify that the chimney flue servicing each individual unit fireplace was an exclusive use common element. Second, it sought to amend ss. 22 and 23 of the Declaration to make it clear that the owners of units with fireplaces, and not the appellant, were responsible for the maintenance and repair of all exclusive use common elements. In response, the respondents brought a separate application in which they sought, among other things, an order requiring the appellant to repair or replace, at its cost, the chimney flues. The hearing of the respondents’ application was ordered to await the determination of the appellant’s application. It remains outstanding.

The application judge granted the appellant’s application to amend its Declaration to specify that the dedicated chimney flues are exclusive use common elements. He dismissed the balance of the appellant’s application. This appeal was from the application judge’s refusal to grant the order sought to amend ss. 22 and 23 of the Declaration to make it clear that the owners of units with fireplaces, and not the appellant, were responsible for the maintenance and repair of all exclusive use common elements.

issues:

Did the application judge err in dismissing the appellant’s application to amend the Declaration to provide that the owners of units with fireplaces, and not the appellant, were responsible for the maintenance and repair of all exclusive use common elements?

holding:

Appeal allowed.

reasoning:

Yes.

The Court first discussed the standard of review. It determined that, in this case, the standard of review was correctness. While mindful of the deferential standard of review urged by Sattva Capital Corp. v. Creston Moly Corp. , 2014 SCC 53 on questions of contractual interpretation involving questions of mixed fact and law, in this case, the Declaration was not an ordinary type of private contract negotiated between two parties, which was the type of contract to which the comments in Sattva were directed. A declaration is a special form of contract, the structure of which is prescribed by statute. It must adhere to certain statutory requirements. Indeed, the Condominium Act, 1998 provides, in s. 7(5), that, if there is any conflict between the statute and the declaration, the statute prevails.

The application judge erred in his conclusion that there was no inconsistency between the sections 22 and 23 of the Declaration. Section 22 requires unit owners to maintain and repair their units including the air conditioning and heating units within their units, but only to maintain any part of the common elements which they have exclusive use of, at their own expense. Section 22 says nothing about repair with respect to those exclusive use common elements.

Section 23 requires the appellant to maintain and repair the common elements “after damage”. It then goes on to provide that “this duty” extends to all exclusive use portions of the common elements. This provision would, at first blush, appear to overlap with the requirements of s. 22. However, the use of the words “after damage” suggest that the duty under s. 23 is only triggered by the occurrence of an event that then leads to the need to repair. It does not appear to contemplate repairing common elements that have simply worn out or are otherwise inoperative simply through the passage of time. If that is so, and one looks only at the two sections, a gap then appears, because neither section addresses the duty to repair (as opposed to maintain) the exclusive use common elements in the normal course.

However, Section 89(1) of the Condominium Act, 1998 requires the corporation to repair the units and common elements after damage. Section 89(2) reads, in part: “The obligation to repair after damage includes the obligation to repair and replace after damage or failure …” Section 90(1) says that the corporation shall maintain the common elements and each owner shall maintain the owner’s unit. It does not specifically address exclusive use common elements. Section 90(2) then goes on to read: “The obligation to maintain includes the obligation to repair after normal wear and tear but does not include the obligation to repair after damage.” [emphasis added] Section 91 of the Condominium Act, 1998, then provides that a declaration may alter the obligations to maintain and repair after damage by requiring a unit owner to maintain and repair after damage those parts of the common elements of which the owner has the exclusive use.

The application judge’s conclusion that the sections create a mutual obligation to maintain and repair exclusive use common elements is not consistent with the language of the two sections and leads to an unsatisfactory result. Finding that there is a mutual obligation immediately raises the question as to which of the two parties has the positive duty to fulfill the obligation. Each side can point to the other as being the one that needs to take the first step. It also does not allow for either party to know what their respective financial responsibilities are, and to plan accordingly. There is also the practical reality that it may not be possible for the necessary work to be divided between the parties, or to permit different contractors to undertake different parts of it. The bottom line is that it is an unworkable result. The purpose of the Declaration is to clearly delineate the responsibilities of the condominium corporation, on the one hand, and the unit owners, on the other. Here that purpose is not achieved. Sections 22 and 23 are inconsistent, or at the very least unclear, in the obligations that they impose.

In the end result, the Court found that the intention was clearly to place on the unit owners the duty to maintain and repair their unit, and to maintain and repair any part of the common elements over which they have exclusive use, after normal wear and tear or the effluxion of time, and to do so at their own expense. In reaching that conclusion, the Court stressed the use of the words “any part” of the exclusive use common elements that are used in s. 22. Those words would clearly embrace the entirety of the chimney flues. It was unnecessary to decide whether the Condominium Act, 1998 applied or the Act in force at the time the Declaration was registered, the Condominium Act, R.S.O. 1980, c. 84, as the result was the same. The Court therefore allowed the appeal, and substituted an order granting an amendment to the Declaration, although not in the form proposed by the appellant.


Markowski v. Verhey , 2020 ONCA 472

[Lauwers, Huscroft and Thorburn JJ.A.]

Counsel:

Cara Valiquette, for the appellant BM

Amber Small, for the respondents DV and KV

Keywords: Real Property, Easements, Rights of Way, Interpretation, Civil Procedure, Appeals, Notice of Appeal, Rules of Civil Procedure, Rules 61.08(2) and (3), Canadian Pacific Ltd. v. Paul, [1988] 2 S.C.R. 654, Eton Construction Co. v. R. (1996), 28 O.R. (3d) 321 (C.A.), Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417 (C.A.), Smith v. Morris, [1935] 2 D.L.R. 780 (Ont. C.A.), Boone v. Brindley (2003), 179 O.A.C. 50 (C.A.), Square-Boy Limited v. The City of Toronto, 2017 ONSC 7178, Laurie v. Winch, [1953] 1 S.C.R. 49, Housen v. Nikolaisen, 2002 SCC 33

facts:

The appellant, BM, owns a cottage near Lake Waseosa. Her property is not directly on the waterfront but she has a right-of-way over a beach that leads to Lake Waseosa for “all the usual purposes”.

The respondents, DV and KV, own two adjoining lots, including the beach over which the appellant has a right-of-way. The key issue on this appeal is whether the “usual purposes” entitles the appellant to bring boats across the right-of-way using a motor vehicle. The appellant claims it does. The respondents accept that the right-of-way allows the appellant to access Lake Waseosa “for various activities such as swimming and boating” but deny that she is allowed to bring boats to and from the shore using a motor vehicle. They take the position that the right to bring boats across is limited to small boats that can be portaged across the right-of-way. The appellant brought an application seeking a declaration about the extent of her rights pursuant to the right-of-way. The appellant claimed she has a right to cross the beach as well as to use the beach for recreational purposes. She claimed this includes the right to launch and retrieve watercraft using mechanical power as may be necessary. The application judge disagreed, and she appealed.

issues:

Did the application judge err in determining that the appellant was not entitled under the right of way to launch and retrieve watercraft using mechanical power?

holding:

Appeal dismissed.

reasoning:

No.

On a preliminary note, the appellant sought in her notice of appeal only to set aside a portion of the application judge’s order, so her request in her factum to appeal other portions would not be considered. Rules 61.08(2) and (3) of the Rules of Civil Procedure prohibit raising new grounds of appeal or seeking relief other than as set out in a notice of appeal, except with leave of the court.

A right-of-way created by express grant is an easement that allows the grantee and their successors in title to cross the grantor’s land for a purpose related to the better enjoyment of the grantee’s land. The nature and extent of a right-of-way depends on the proper construction of the language of the instrument creating it. The first step in determining the rights that form part of a right-of-way is to interpret the grant according to the intention of the parties based on the words themselves. The grant of an express easement may also include ancillary rights provided they are reasonably necessary to use or enjoy the right-of-way. However, to imply a right ancillary to a right-of-way, the right must be necessary for the use or enjoyment of the easement, not just convenient or even reasonable.

Where the words in the grant of the right-of-way are unclear, the historic use and circumstances surrounding the use of the property subject to the easement are particularly important to understand the nature and extent of the rights conveyed.

The standard of review of the application judge’s findings of mixed fact and law was one of palpable and overriding error. The Court found no such error, and his reasons for decision were not deficient so as to preclude meaningful appellate review.

An easement “for all the usual purposes” is not an ownership right. It is a right to use the property in the way agreed to by the grantor. Any included ancillary rights must be reasonably necessary to use the right-of-way.

There was uncontradicted historical evidence of the prior owners upon which the application judge was entitled to rely, that there were restrictions on the right to bring motor vehicles across the right-of-way by the owner of the right-of-way at the time of the grant in 1970 but no such restriction preventing pedestrian traffic. Thus, while some family members might have been involved in launching and retrieving large boats, the uncontradicted evidence suggested this would have been done with the permission of the owner of the beach lot not as a right flowing from the grant of the right-of-way.


Kyle v. Atwill , 2020 ONCA 476

[Feldman, Brown and Zarnett JJ.A.]

Counsel:

Aaron Franks and Rhea Kamin, for the appellant

Carolyn Shelley and Silvia Cioci, for the respondent

Keywords: Family Law, Marriage Contracts, Setting Aside, Rescission, Equalization of Net Family Property, Spousal Support, Civil Procedure, Limitation Periods, Relief Sought, Declarations, Discoverability, Statutory Interpretation, Family Law Act, R.S.O. 1990, c. F.3, ss. 2(8), 2(10), 7(3)(b), 33(1), 33(4), 52, 56(4), Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., s. 4, 5, 16(1)(a), 16(1)(c), 19(1)(a), Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, Starz (Re), 2015 ONCA 318, 125 O.R. (3d) 663, Fehr v. Sun Life Assurance Company of Canada, 2018 ONCA 718, Peikut v. Romoli, 2020 ONCA 26, Alguire v. The Manufacturers Life Insurance Company (Manulife Financial) , 2018 ONCA 202

facts:

The parties entered into a prenuptial agreement (the “marriage contract”) immediately before their marriage. The contract waived any entitlement to spousal support and provided that the parties would be separate as to property. After seven years of marriage, the parties separated. Eventually, the husband brought family law proceedings claiming equalization of net family property and spousal support. The wife defended by relying on the marriage contract as a complete answer. He replied by asking the court to set aside or rescind the marriage contract on the basis that he had signed it without financial disclosure, without legal advice, under duress, and under a clear power imbalance. Although the husband commenced the proceeding within the six-year limitation period for equalization claims under the Family Law Act, s. 7(3)(b), more than two years had elapsed since the parties separated. The wife’s position was that the request to rescind the marriage contract was out of time.

On summary judgment, the motion judge found that rescission of a marriage contract constitutes a “claim” under the Limitations Act, 2002, that claim is subject to the two-year limitation period in s. 4 of that Act, and the husband discovered his claim roughly two months after separation. The motion judge therefore found the claim to be time-barred.

issues:

Did the application judge err in determining that the husband’s application to set aside the marriage contract was statute-barred?

holding:

Appeal allowed.

reasoning:

Yes. The husband’s plea for rescission of the marriage contract under ss. 56(4) of the Family Law Act is a proceeding for a declaration where no consequential relief is sought and therefore, under s. 16(1)(a) of the Limitations Act, 2002, no limitation period applies to that pleading. The husband’s claim for equalization is subject to the six-year period set out in s. 7(3)(b) of the Family Law Act, and his claim for spousal support is not subject to a limitation period, pursuant to s. 16(1)(c) of the Limitations Act, 2002. Neither is time-barred and the action was therefore permitted to proceed.

The question to be decided on this appeal was whether the application to set aside the marriage contract is subject to no limitation period because it is a proceeding under s. 16(1)(a) of the Limitations Act, 2002 for a declaration where no consequential relief is sought, or whether it is subject to the general two-year limitation period and if so, when the loss or damage occurred and when the claim was discovered. The standard of review is correctness, as the question to be determined was a question of law.

In the family law context, the operation of the Limitations Act, 2002 together with the Family Law Act prescribes limitation periods that are, in most cases, considerably more generous than the two-year period set out in s. 4 of the Limitations Act, 2002, in recognition of the unique situation of spouses and families on the breakup of a marriage. Section 19(1)(a) of the Limitations Act, 2002 provides for the application of limitation periods contained in other acts. One such limitation period is s. 7(3) of the Family Law Act, which sets out three limitation periods for applications for equalization of net family property that may be brought under s. 5 of the Family Law Act: (a) two years after the day the marriage is terminated by divorce or judgment of nullity; (b) six years after the day the spouses separate and there is no reasonable prospect that they will resume cohabitation; (c) six months after the first spouse’s death.

Unlike with limitation periods contained in the Limitations Act, 2002, the court may extend limitation periods specifically provided in the Family Law Act under s. 2(8) of that Act, in certain enumerated circumstances. With respect to spousal support, the Family Law Act does not provide a limitation period for seeking an order for spousal support under s. 33(1) of that Act. The limitation issue is dealt with in s. 16(1)(c) of the Limitations Act, 2002, which provides that there is no limitation period for bringing a proceeding to obtain support or to enforce a contract providing for support under the Family Law Act.

These special limitation periods account for the need to allow spouses more time to try to resolve their property issues without having to go to court, and the fact that a spouse or former spouse’s support needs can change over time and may be addressed whenever they do.

Persons who are married or intend to marry may agree regarding their rights and obligations during and after the marriage in a marriage contract, which is one form of domestic contract: Family Law Act, s. 52. A domestic contract prevails over the Act unless the Act provides otherwise: s. 2(10). A number of provisions of the Family Law Act permit a court to set aside all or part of a marriage contract, two of which were relevant to this appeal. First, in the context of an application for spousal support, s. 33(4) gives the court the power to set aside a provision in a marriage contract that waives or reduces the right to support in three enumerated situations, including where the provision results in unconscionable circumstances. Second, s. 56(4) allows a court to set aside an entire marriage contract or any provision in it, on application.

There is no limitation period provided in the Family Law Act for setting aside all or part of a domestic contract under s. 56(4), although that section specifically contemplates a court application for such relief. There is also no limitation provided for setting aside a spousal support provision of a marriage contract under s. 33(4), but that determination is made as part of a spousal support application for which there is no limitation period, as provided in s. 16(1)(c) of the Limitations Act, 2002. Because the Family Law Act is silent as to the limitation period that applies to an application to set aside a marriage contract or a provision in it, one must look to the Limitations Act, 2002 to determine which provisions of that Act, if any, apply.

The majority of the Court (Feldman J.A. and Zarnett J.A.) did not share the Brown J.A.’s view that the provision establishing the limitation period for seeking equalization should be read to also apply to an application to set aside a marriage contract under s. 56(4) of the Family Law Act. The fact that the Family Law Act does not provide a limitation period for an application to set aside a marriage contract under s. 56(4) was a clear legislative signal that the Limitations Act, 2002 is to apply.

The Court agreed with the motion judge that the application to set aside the marriage contract is an application for a declaration. However, the Court did not agree that that application seeks consequential relief. A declaratory judgment is a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs – it is restricted to a declaration of the parties’ rights and does not order any party to do anything.

Different limitation periods may govern different claims in the same action. The key, therefore, is not whether consequential relief in the form of a claim for a remedy against another party is sought procedurally in the same proceeding or in a subsequent proceeding. The key is whether the request for a declaration coupled with a claim for enforceable relief is, in substance, a claim for a remedy against the other party and not merely a request for a declaratory order. This is because, if it is a claim for a substantive remedy against another party, then the limitation period applicable to that substantive remedy will apply to that claim. Similarly, if a declaration is necessary as a prelude to a claim for a remedy against another person, no limitation period applies to the proceeding for a declaration, but the applicable limitation period for seeking the remedial order may still bar that claim. Accordingly, if a party seeks both consequential and declaratory relief against another party, the consequential relief is subject to the limitation periods set forth in the Limitations Act, 2002, or in this case, the Family Law Act, while the declaratory relief alone benefits from the absence of a limitation period. The bar is not against joining a claim for consequential relief; the bar is against applying no limitation period to the consequential relief.

Applying the principle to this case, where the husband seeks a declaration that would remove a significant obstacle to his claims for equalization and for spousal support, that declaration is subject to no limitation period, pursuant to s. 16(1)(a) of the Limitations Act, 2002. The limitation periods governing the consequential relief he seeks, namely equalization and support, are the periods applicable to those forms of relief: six years from the date of separation for equalization, and no limitation period for support. Conversely, had the husband brought his equalization claim seven years after the date of separation with no reasonable possibility of reconciliation, and therefore out of time, the fact that he would be able to obtain a declaration setting aside the marriage contract would not mean that his equalization claim could proceed. That claim would remain time-barred, subject to the power of the court to extend the time under s. 2(8).

This result also works seamlessly within the limitation structure of the Family Law Act, because it does not add a new, shorter limitation period of two years, which would disrupt the longer time spouses have been given to resolve their affairs. It does not interfere with the philosophy of the Act, which is to give more generous time periods for separating spouses to resolve their claims for equalization and spousal support. Moreover, while spouses may seek to set aside a marriage contract in the circumstances set out in s. 56(4) at any time, a spouse is unlikely to bring such an application during the marriage, even if the spouse learns that the other spouse failed to disclose some material assets when they were negotiating their agreement. If they remain happily married, there will be no need. An application to set aside a marriage contract would likely be brought in the context of marriage break-up and its financial consequences for the parties. Those financial consequences are governed by the limitation periods specified in the Family Law Act and in the Limitations Act, 2002. An application to set aside a marriage contract will not extend or reduce those periods.

Because of the Court’s conclusion that the request to set aside a marriage contract under s. 56(4) of the Family Law Act is a proceeding for a declaration where no consequential relief is sought under 16(1)(a) of the Limitations Act, 2002, it was unnecessary to consider whether that request falls within the definition of claim, and in that context when the loss or damage occurred and when the husband discovered the claim.

Brown J.A. (concurring in the result):

In separate reasons concurring in the result, Brown J.A. disagreed with the broad statement of the majority opinion that “a proceeding under s. 56(4) of the Family Law Act comes within s. 16(1)(a) of the Limitations Act, 2002.” In Brown J.A.’s view, it may or it may not.

Brown J.A. agreed that a proceeding that seeks only to set aside a domestic contract under s. 56(4) of the Family Law Act and does not seek consequential relief may well fall within the language of s. 16(1)(a) of the Limitations Act, 2002. However, such a proceeding would be a rare bird. The reality of family law litigation is that a proceeding in which an applicant seeks to set aside a domestic contract invariably also contains, as part of the prayer for relief, requests by the applicant for consequential relief relating to support or property equalization. Seeking such relief in the same proceeding in which the applicant attempts to set aside a domestic contract would take the “proceeding” outside of the language of Limitations Act, s. 16(1)(a). On the face of his pleadings, the husband sought relief consequential to setting aside the marriage contract.

The question then was what limitation periods applied to the husband’s proceeding?

The respondent wife supported the motion judge’s conclusions that (i) the husband’s request to set aside the marriage contract constitutes a discrete “claim” within the meaning of s. 1 of the Limitations Act, 2002 (ii) to which the two-year basic limitation period contained in s. 4 of that Act applies (iii) with the result that since the husband discovered that claim no later than October 17, 2012 (iv) his August 24, 2017 application was commenced out-of-time (v) notwithstanding that his requests for an equalization payment and spousal support were brought within the applicable limitation periods. However, the respondent further submitted that the Court should add a gloss to ss. 4 and 5 of the Limitations Act, 2002 so that a “claim” to set aside a marriage contract is presumptively “discovered” on the date the parties separate. This submission appeared to recognize that requiring a party to apply to set aside a marriage contract within two years of the discovery of some “injury, loss or damage” while the marriage remains on-going would result in a harsh, if not absurd, application of the Limitations Act, 2002.

On his part, the husband disagreed that his request to set aside the provisions of the marriage contract regarding his claims for an equalization payment and spousal support was a stand-alone “claim” for limitation period purposes. Instead, he characterized his request to set aside those provisions as a “gateway” to claiming his statutory rights to equalization and spousal support. As such, the timeliness of his “set aside request” falls to be determined by the limitation periods applicable to his monetary claims for an equalization payment and spousal support, a six-year limitation period and no limitation period, respectively.

Brown J.A. was persuaded by the husband’s submission. It more closely accorded with the statutory language regarding the interplay between Ontario’s family law and limitation periods regimes.

The answer really boiled down to the perspective one takes of the proceeding. Is the “set aside request” a discrete, “stand-alone claim”? Or, should the “set aside request” be treated as one subsumed within the “proceeding” claiming an equalization payment and spousal support under the Family Law Act? In answering those questions, courts should be reluctant to discover or add yet another limitation period to family law litigation given the remedial nature of family law legislation. As well, in seeking to answer the questions courts must recognize the reality of contemporary family litigation: a very large number of family law litigants are now self-represented. Accordingly, in this area of the law, necessity dictated that simplicity and understandability of the “rules of the game” must be a major consideration in the interpretative exercise. In Brown J.A.’s view, the statutory language governing claims for equalization payments and spousal support indicates that any related “set aside request” in a proceeding be treated as one falling under the limitation periods that apply to the requests for an equalization payment and spousal support asserted in the proceeding.


Ball v. McAulay , 2020 ONCA 481

[Strathy C.J.O., Lauwers and Pardu JJ.A.]

Counsel:

Sarit E. Batner, Brandon Kain, Peter Leigh and Emilie Bruneau, for the appellant

Sean Dewart and Adrienne Lei, for the respondents

Keywords: Administrative Law, Universities, Academic Discipline, Jurisdiction, Labour Law, Arbitration, Jurisdiction, Standard of Review, Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A., s. 80.1, 96, Back to Class Act (York University), 2018, S.O. 2018, c. 10, Sch. 3, s. 17(4), Agraira v. Canada (Public Safety and Emergency Preparedness) , 2013 SCC 36, Groia v. Law Society of Upper Canada, 2018 SCC 27, Ottawa Police Services v. Diafwila, 2016 ONCA 627, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Bell Canada v. Canada (A.G.) , 2019 SCC 66, Weber v. Ontario Hydro, [1995] 2 S.C.R. 929, Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Quebec (Attorney General) , 2004 SCC 39 (“Morin”), Strickland v. Canada (Attorney-General) , 2015 SCC 37, Harelkin v. University of Regina, [1979] 2 S.C.R. 561

facts:

The respondents were graduate students attending York University and were employed there as teaching assistants. During a legal strike by their union against York, they engaged in conduct that the York University Tribunal found warranted discipline under York’s Code of Student Rights and Responsibilities, despite s. 17(4) of the Back to Class Act (York University), 2018, which states: “Any dispute between the parties concerning discharge or discipline in respect of activities that took place [during the strike period] shall be determined through the grievance procedure and arbitration procedure established in the new collective agreement.”

The alleged misconduct included: (i) attending at locations on and off campus, including private law firm offices, and refusing to leave until police arrived; (ii) encircling York staff and administrators, pushing them, and preventing them from leaving; and (iii) engaging in verbal insults and profane language, including through social media.

In taking jurisdiction over the disciplinary proceedings notwithstanding the Back to Class Act (York University), 2018, the Tribunal considered that the respondents’ unionized status did not supersede their independent responsibilities as students under the Student Code.

The Tribunal’s findings and sanctions against the respondents were upheld by the York University Appeal Panel. The respondents did not appeal the Tribunal’s decision on jurisdiction; instead, they brought an application for judicial review of that decision.

The Divisional Court allowed the respondents’ application for judicial review on the basis that a labour arbitrator had exclusive jurisdiction over their discipline. The Divisional Court determined that the essence of this dispute was an employer-employee dispute governed by the Labour Relations Act and must therefore be determined by a labour arbitrator, not by York’s Tribunal.

A panel of the Court granted leave to appeal from that decision.

issues:
  1. What is the applicable standard of review?
  2. Did the Tribunal have jurisdiction to discipline the respondents for misconduct?
  3. Should the Divisional Court have refused judicial review because an appeal to the Appeal Panel was an adequate alternative remedy?
  4. Did the Tribunal breach the duty of procedural fairness?
holding:

Appeal dismissed.

reasoning:

1. No. The Court’s approach to an appeal from the Divisional Court on an administrative law matter is to step into the shoes of the lower court and focus on the decision of the tribunal under review. The Court does not owe deference to a judicial review decision of the Divisional Court; its findings are not binding. Moreover, the standard of review in this case is correctness because the appeal raises questions related to the jurisdictional boundaries between two or more administrative bodies.

2. No. Pursuant to Weber v. Ontario Hydro, the Labour Relations Act confers exclusive jurisdiction on a labour arbitrator. The key question is whether the dispute or difference between the parties arises out of the collective agreement.

Morin did not materially qualify the Weber holding that if the dispute falls under the collective agreement, then the labour arbitrator has exclusive jurisdiction. Morin established a two-step approach for analyzing the jurisdictional issue where a matter could be plausibly found to fall under the jurisdiction of a labour arbitrator and another tribunal. The first step is to look at the relevant legislation and what it says about the arbitrator’s jurisdiction. The second step is to look at the nature of the dispute, and see whether the legislation suggests it falls exclusively to the arbitrator. The question at the second step is whether the legislative mandate applies to the particular dispute at issue.

In applying the first step of the analysis under Morin, the Court reviewed the various relevant legislative provisions in detail, as well as the legislative debates behind the Back to Class Act (York University), 2018. The Court concluded that ss. 17(4) and 17(3) of that Act were the operative provisions to understand the scope of the arbitrator’s jurisdiction. Those sections provide that “any dispute between the parties concerning discharge or discipline in respect of any activities that took place during the period described in subsection (3) shall be determined through the grievance procedure.”

The question in the second Morin/ step is whether the legislative mandate applies to the particular dispute at issue. The focus is on the particular dispute and on which tribunal is better fitted to resolve the dispute under the governing statutory scheme, in this case ad hoc, time-limited, strike-ending legislation. The particular dispute in this case was the discipline imposed on the respondents for their activities during the strike.

The dispute over the discipline the Tribunal imposed on the respondents for their strike-related activities arises out of the collective agreement. Five reasons for this determination were given. First, the direct and contextual evidence overwhelmingly establishes that the activities underpinning the complaints were linked to the strike, including the off-campus activities, as the Tribunal acknowledged. None were mere random acts of student misconduct completely unrelated to the strike.

Second, York’s ability to discipline the respondents for their activities during the strike could plausibly be rooted in both the Student Code and in the collective agreement. It was theoretically open to York to proceed under the Student Code, under the collective agreement, or under both. It chose the Student Code as its preferred venue in the face of the Union’s dogged opposition.

Third, York could have responded to each act of misconduct immediately, but nothing was done until after the strike. The Court questioned why? Perhaps York had in mind s. 80.1 of the Labour Relations Act, which prevents the imposition of discipline during a strike. Perhaps York considered that initiating student discipline would be unduly provocative during the strike. Regardless, it seemed obvious that strike considerations played a role in the timing of the complaints.

Fourth, in its earlier January 11, 2019 decision, the Tribunal noted that the complaints were submitted within 30 days following the end of the disruption of University activities, and that the complaints cover several incidents that occurred during the labour disruption of 2018. The Tribunal held that the end of the strike period was the date from which it would assess the timeliness of the complaints.

Fifth, the complaints were launched by a senior administrator. The Court viewed her, in the overall factual context, as a proxy for York, and all of her arguments were aimed at vindicating York’s position.

These facts are all demonstrably linked to the strike, to the Back to Class Act, and to the collective agreement.

The second Morin step also involves a consideration of which tribunal is the better fit for resolving the particular dispute. In the Court’s view, this consideration favoured labour arbitration in this case, for three reasons. First, labour arbitrators routinely consider the appropriateness of discipline for the activities of employees during a strike. They are presumed to have expertise in the assessment of the conduct of union members and whether that conduct fits within the acceptable parameters of primary and secondary picketing. There are examples of several labour cases in which terminations and suspensions have been upheld, others in which reinstatement has occurred, or the period of suspension has been reduced. The nuances are intensely factual and fall squarely within the expertise of a labour arbitrator. The Court noted that the sanctions imposed by the Tribunal – suspensions and no-contact directions – were not different in kind from what labour arbitrators often see.

Second, labour arbitration is governed by the collective agreement, the Labour Relations Act, arbitral and judicial case law, and arbitral practice. An arbitrator must provide procedural fairness to the parties.

Third, of particular importance is the impartiality and the appearance of impartiality of the decision-maker. A labour arbitrator is not connected in interest to the disputants, unlike the Tribunal in this case, and is better fitted to resolve disputes over strike-related discipline.

There was no sense in which the legislation, specific and time-limited, caused York more generally to lose jurisdiction over its students each time they act in an employee context. Nor did the legislation eviscerate York’s ability to meet obligations it has to other community members. It was, and perhaps still is, quite open to York to discipline the respondents under the collective agreement. York could have imposed precisely the sanctions set by the Tribunal on the respondents under the collective agreement. The respondents could have grieved the discipline, and the task of the arbitrator would then have been to determine whether the sanctions were warranted.

3. No. The Divisional Court decided, in its discretion, that it was not appropriate to remit the matter back to the Appeal Panel. The Court should defer to that decision unless a legal error was made, or a palpable and overriding error of fact was. Neither such error was made.

The Divisional Court did not err by failing to cite or explicitly rely on Strickland v. Canada (Attorney-General) in assessing whether an appeal from the Tribunal to the Appeal Panel was an adequate alternative remedy to judicial review. The non-exhaustive Strickland factors are: The convenience of the alternative remedy; the nature of the error alleged; the nature of the other forum which could deal with the issue, including its remedial capacity; the existence of adequate and effective recourse in the forum in which litigation is already taking place; expeditiousness; the relative expertise of the alternative decision-maker; economical use of judicial resources; and cost.

The Divisional Court did cite Harelkin v. University of Regina, the leading case on the adequate alternative doctrine, as per Strickland. The factors the Divisional Court considered adequately mapped onto the Strickland factors. First, the Divisional Court noted that it was not clear the appeal process was an adequate alternative remedy because it was uncertain whether the Appeal Panel would grant a time extension. This concern mapped onto the Strickland factors: convenience of the alternative remedy and whether adequate and effective recourse was available in the forum in which litigation was already taking place. Second, the Tribunal and the Appeal Panel had determined the merits and sanctions appeals, and so there was no risk of fragmenting the proceedings. Because all the evidence was in, it was more expeditious to proceed with judicial review than to send the matter back to the Appeal Panel and risk another round of judicial review. Third, the Divisional Court pointed to the clear legislative wording that required an arbitrator to adjudicate this type of dispute. It seemed obvious that the interpretation of the legislation was a legal question that neither the Tribunal nor the Appeal Panel was better qualified to undertake than the Divisional Court. Fourth, the Divisional Court pointed to hardship, prejudice, costs or delay as being factors that may constitute exceptional circumstances for the judicial review application to proceed. There was evidence of hardship – for example, one of the applicants risked deportation if suspended. These considerations mapped onto the Strickland factors: expeditiousness, economical use of judicial resources, and cost.

4. In light of the Court’s decision on the first three issues, it was unnecessary to determine whether the Tribunal had denied the respondents procedural fairness.


Martin v. Mailhot , 2020 ONCA 480

[Tulloch, Huscroft and Harvison Young JJ.A.]

Counsel:

Benoit Richer, for the appellant

Patrick R. Simon, for the respondents

Keywords: Real Property, Commercial Leases, Termination, Right of Re-entry, Failure to Provide Proof of Insurance, Relief from Forfeiture, Commercial Tenancies Act/, R.S.O. 1990, c. L.7, s. 19(2), 780046 Ontario Inc. v. Columbus Medical Arts Building Inc. (1994), 20 O.R. (3d) 457 (C.A.), Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc. , 2017 ONCA 798, Chick ‘N Treats Inc. v. Woodside Square Ltd. (1990), 38 O.A.C. 138 (C.A.)

facts:

The appellant served notice on the respondents that they were in breach of their commercial lease for, among other things, failing to pay the required rent for the month of September, and failing to provide the landlord copies of all policies or certificates of insurance required by the Lease. The notice advised that the lease would be terminated in the event that the various breaches were not remedied. The notice did not include a demand for monetary compensation. Eight days later, the respondents paid $3,300 to the appellant for September rent.

The appellant then served the respondents with a notice of termination of the parties’ commercial lease as a result of their failure to provide copies of all policies and certificates of insurance. When the policies were not forthcoming, the appellant re-entered the premises.

The respondents brought an application for a declaration that the appellant had breached the lease through wrongful termination and illegal re-entry. The application judge granted the application, finding that the notice of breach was deficient as it was not in compliance with s. 19(2) of the Commercial Tenancies Act, which requires that a notice of re-entry include a demand for monetary compensation. He found that the failure of the appellant to stipulate a precise monetary remedy to any alleged breach was fatal to the notice. He also found that rent was paid. The appellant’s re-entry had thus been unlawful. The landlord appealed.

issues:
  1. Whether the application judge erred by requiring the appellant to provide a demand for monetary compensation in her notice to the respondents.
  2. Whether the application judge erred by failing to find that the respondents had not paid rent and, consequently, that the appellant was justified in terminating the lease.
holding:

Appeal allowed.

reasoning:

1. Yes.

Section 19(2) of the Commercial Tenancies Act provides that: A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease, other than a proviso in respect of the payment of rent, is not enforceable by action, entry, or otherwise, unless the lessor serves on the lessee a notice specifying the particular breach complained of, and, if the breach is capable of remedy, requiring the lessee to remedy the breach, and, in any case, requiring the lessee to make compensation in money for the breach, and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money to the satisfaction of the lessor for the breach. [Emphasis added.]

The purpose of the notice requirement in s. 19(2) is to warn the tenant that its leasehold interest is at risk and to give the tenant an opportunity to preserve that interest by remedying the breaches complained of and, where necessary, by compensating the landlord. Courts have insisted on strict compliance with this notice requirement.

A demand for monetary compensation is never required for valid notice under s. 19(2). Rather, the requirement may be waived at the discretion of the landlord. A demand for monetary compensation is only necessary where, as a result of the breach, the landlord has suffered damages compensable in money and intends to insist on recovery, failing which, the landlord will exercise its right of re-entry or forfeiture. In other words, where a landlord has suffered damages compensable in money and fails to include a demand for monetary compensation in its notice of breach, the landlord will be barred from relying on a tenant’s failure to compensate the landlord for those damages as a justification for re-entry or forfeiture. In this way, a tenant will only be required to provide monetary compensation to preserve its leasehold interest where it is deemed necessary by the landlord in the notice of breach.

The notice in this case warned the respondents that their leasehold interest was at risk. It specified the breaches complained of and requested that they be remedied. It was within the purview of the appellant to decide to waive the requirement for a demand for monetary compensation. Her decision to refrain from including such a demand did not invalidate the notice. It merely foreclosed the option of insisting on recovery for any damages that flowed from the breach as a necessary condition for the preservation of the respondents’ leasehold interest. The notice was valid and the application judge erred in finding otherwise.

2. In light of the Court’s determination on the first ground of appeal, there was no need to address the second issue.


SHORT CIVIL DECISIONS

Tran v. Bloorston Farms Ltd., 2020 ONCA 477

[Benotto, Zarnett and Thorburn JJ.A.]

Counsel:

Mark A. Ross and Eric Brousseau, for the appellant

Evan L. Tingley, for the respondents

Keywords: Costs Endorsement

Kent v. Kent , 2020 ONCA 483

[Gillese, Brown and Jamal JJ.A.]

Counsel:

RK, acting in person

Aleksandr G. Bolotenko, Phillipa C. Goddard and Miriam Vale Peters, for the respondents

Keywords: Costs Endorsement


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.