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Good afternoon.

Please find below our summaries of the civil decisions of the Court of Appeal for the week of November 2, 2020. There were quite a few substantive decisions released this week.

In Kreiser v Garber, the appeal arose in the context of a wrongly constructed dock that prevented a neighbour from using their boat. The Court of Appeal engaged in a lengthy discussion on the law of nuisance, the considerations for when to allow fresh evidence on appeal, the special considerations to be taken into account when a court issues a mandatory injunction, as well as a discussion on punitive damages.

Other topics covered this week included another round litigation in the Indian Residential School Settlement, vexatious litigants, the setting aside of an order granting summary judgement in the context of a shareholder’s agreement involving a right of first refusal, limitation periods, family law.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Visic v. Elia Associates Professional Corporation, 2020 ONCA 690

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Res Judicata, Issue Estoppel, Rules of Civil Procedure, Rule 2.1.01, Ontario Human Rights Code, R.S.O. 1990, c. H.19, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Khan v. Law Society of Ontario, 2020 ONCA 320, Khan v. Krylov & Company LLP, 2017 ONCA 625, P.Y. v. Catholic Children’s Aid Society of Toronto, 2020 ONCA 98, Penner v. Niagara Regional Police Services Board, 2013 SCC 19, Jones v. Tsige, 2012 ONCA 32, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Activa Trading Co. Ltd. v. Birchland Plywood-Veneer Limited, 2020 ONCA 93

Fontaine v. Canada (Attorney General), 2020 ONCA 688

Keywords: Civil Procedure, Class Proceedings, Indian Residential School System Settlement Agreement, Standard of Review, Baxter v. Canada (Attorney General) (2206) 83 OR (3d) 481 (SC), Onion Lake Cree Nation v Stick, 2020 SKCA 101, J.W. v Canada (attorney General), 2019 SCC 20, BG Checo Internation Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 SCR 12

Way v. Schembri, 2020 ONCA 691

Keywords: Contracts, Interpretation, Real Property, Joint Venture Agreements, Rights of First Refusal, Restrictive Covenants, Civil Procedure, Summary Judgment, Partial Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

B. v. Mississauga, 2020 ONCA 697

Keywords: Torts, Negligence, Civil Procedure, Limitation Periods, Discoverability, Capacity, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., ss. 4, 7, Rules of Civil Procedure, Rule 15.01(1), Canadian Charter of Rights and Freedoms, Ontario Human Rights Code, R.S.O. 1990, c. H.19, s. 15, Liu v. Wong, 2016 ONCA 366, Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447

Fettes v. Clark, 2020 ONCA 705

Keywords: Family Law, Spousal Support, Property, Unjust Enrichment, , Kerr v Baranow, 2011 SCC 10, Berta v Berta, 2015 ONCA 918, Djekic v Zai, 2015 ONCA 25

Mughal v. Bama Inc., 2020 ONCA 704

Keywords: Tort, Conspiracy to Commit Injury, Request to Adjourn, Ineffective Counsel, Canada Cement Lafarge v. British Columbia Lightweight Aggregate Ltd., [1983] 1 SCR 452, Agribands Purina Canada Inc. v. Kasameka, 2011 ONCA 0460

Krieser v. Garber, 2020 ONCA 699

Keywords: Torts, Nuisance, Remedies, Mandatory Injunctions, Punitive Damages, Civil Procedure, Offers to Settle, Costs, Appeals, Evidence, Fresh Evidence, Character Evidence, Courts of Justice Act, ss. 134(4), St. Lawrence Cement Inc v Barrette, [2008] 3 SCR 392, Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation), 2013 SCC 13, Tock v. St. John’s Metropolitan Area Board, [1987] 2 SCR 1181, Aventis Pharma S.A. v. Novopharm Ltd., 2005 FCA 390,  Sengmueller v. Sengmueller (1994), 111 DLR (4th) 19 (Ont. CA), Shelfer v. City of London Electric Lighting Co., [1895] 1 Ch. 287 (C.A.), Whiten v. Pilot Insurance Co., [2002] 1 SCR 595, Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, Alguire v. The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 0202, TWI Foods Inc. v. Just Energy Corp., 2012 ONCA 0150, Whitfield v. Whitfield, 2016 ONCA 0720, Young v. Young, [1993] 4 SCR 3

Short Civil Decisions

Mudronja v. Mudronja (Costs), 2020 ONCA 702

Keywords: Family Law, Costs, Reasonableness, Proportionality, Family Law Rules, O. Reg. 114/99, Rules 24(1) and 24(12), Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, s.1(1)


CIVIL DECISIONS

Visic v. Elia Associates Professional Corporation, 2020 ONCA 690

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

C. Du Vernet and C. McGoogan, for the appellant

M. A. Willis, for the respondent University of Windsor

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Res Judicata, Issue Estoppel, Rules of Civil Procedure, Rule 2.1.01, Ontario Human Rights Code, R.S.O. 1990, c. H.19, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Khan v. Law Society of Ontario, 2020 ONCA 320, Khan v. Krylov & Company LLP, 2017 ONCA 625, P.Y. v. Catholic Children’s Aid Society of Toronto, 2020 ONCA 98, Penner v. Niagara Regional Police Services Board, 2013 SCC 19, Jones v. Tsige, 2012 ONCA 32, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Activa Trading Co. Ltd. v. Birchland Plywood-Veneer Limited, 2020 ONCA 93

facts:

The appellant sought an order requiring the University of Windsor to permanently delete all references to her “first” first year law school results and damages against the respondents of $500,000 for invasion of privacy, breach of fiduciary duty, breach of confidence, breach of contract, negligence, defamation, and infringement of the Ontario Human Rights Code. The respondents, Patricia Elia and Elia Associates Professional Corporation (the “Elia Respondents”), were the appellant’s articling principal and former employer, respectively.

The motion judge held that the appellant’s action against the University sought to re-litigate the same issues raised in an earlier action and in proceedings before the Human Rights Tribunal of Ontario (“HRTO”), both of which were dismissed. She noted that the HRTO declared the appellant to be a vexatious litigant and the Divisional Court dismissed appeals from these orders.

The motion judge dismissed the appellant’s action as against the University under Rule 2.1.01, but allowed the action to continue as against the Elia respondents because the appellant had never sued them in the Superior Court. The appellant appealed the motion judge’s order.

issues:
  1. Did the motion judge err in dismissing the appellant’s action as against the University under Rule 2.1.01?
holding:

Appeal dismissed.

reasoning:

No. The Court first looked at principles governing the application of Rule 2.1.01. The Rule allows a court to stay or dismiss a proceeding if it appears on its face to be frivolous, vexatious or otherwise an abuse of process. The Court stated that the rule may only be used in the clearest of cases where the abusive nature of the proceeding is apparent on the face of the pleading and there is a basis in the pleadings to support the resort to the attenuated process. The Court also emphasized that a motion under Rule 2.1.01 focuses on the pleadings and any submissions of the parties made under the rule. Additionally, the rule does not replace other rules to strike out actions or to deal with other procedural irregularities summarily. The Court also noted that a motion judge’s ruling under Rule 2.1.01 is a discretionary decision entitled to deference. Such a decision may be set aside only if the motion judge misdirected themselves or their decision was so clearly wrong as to amount to an injustice.

The Court held that the motion judge correctly identified the relevant legal principles under Rule 2.1.01 and that her discretionary decision to dismiss the action was entitled to appellate deference. The Court found that the appellant’s four grounds of appeal lacked merit.

First, the appellant asserted the statement of claim pled proper causes of action. The Court found that the motion judge, based on her review of the claim, was entitled to conclude that the action involved abusive re-litigation.

Second, the appellant asserted her claim did not seek to re-litigate the same factual circumstances that were dismissed in her court action in 2005 or in her application to the HRTO in 2008. The Court disagreed, finding that her action challenged the same conduct of the University that she had unsuccessfully challenged before.

Third, the appellant asserted that her claim for invasion of privacy rested on a new tort that the court first recognized in Jones v Tsige, after her previous proceedings were dismissed. In rejecting this argument, the motion judge noted that the Court in Jones did not recognize a new tort of invasion of privacy, rather it confirmed a cause of action that already existed at common law. She concluded that the appellant’s claim here was barred by the doctrine of cause of action estoppel. That doctrine prevents parties from re-litigating matters by advancing a point in subsequent proceedings which properly belonged to the subject of the previous litigation. The Court agreed with the motion judge’s reasoning and conclusion.

Fourth, the appellant asserted the motion judge erred in relying on abuse of process and cause of action estoppel under r. 2.1.01 because she said such a finding required evidence. The Court disagreed with this submission. The Court held that re-litigation of issues determined in a prior judicial proceeding is “a classic example of abuse of process” under Rule 2.1.01. In applying the rule, the motion judge was entitled to review reasons from other proceedings describing the appellant’s long history of litigation against the University involving the same issues. The Court saw no error in her approach or conclusion.


Fontaine v. Canada (Attorney General), 2020 ONCA 688

[Fairburn A.C.J.O., Rouleau and Miller JJ.A.]

Counsel:

F.K. Brunning and M. Swinwood, for the appellants E.M., St. Anne’s IAP Claimant T-00185, St. Anne’s IAP Claimant S20774, and St. Anne’s IAP Claimant S-16753

C. Coughlan and B. Thompson, for the respondent Attorney General of Canada

S. Wuttke, for the respondent Assembly of First Nations

D. Schulze, for the respondent Independent Counsel

E. Merchant, for the respondent Merchant Law Group

E. Garfin, for the intervener Attorney General of Ontario

Keywords: Civil Procedure, Class Proceedings, Indian Residential School System Settlement Agreement, Standard of Review, Baxter v. Canada (Attorney General) (2206) 83 OR (3d) 481 (SC), Onion Lake Cree Nation v Stick, 2020 SKCA 101, J.W. v Canada (attorney General), 2019 SCC 20, BG Checo Internation Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 SCR 12

facts:

The appellants are class members of the Indian Residential School Settlement Agreement (“IRSSA”), a national class action settlement agreed to settle the myriad of claims that arose from the residential school system. The IRSSA broke the national class down into various sub-classes, based on the province in which any given complainant lived at the time of the settlement, so as to divide jurisdiction between the provinces and territories party to the settlement. The IRSSA created two different mechanisms by which a complainant can be compensated, one of which, the Independent Assessment Process (“IAP”), is under consideration in this appeal. As part of the administration of the IRSSA, nine different superior courts across Canada approved the IRSSA, and in doing so, also approved a Court Administration Protocol (“CAP”) that was to govern the process for any Request for Directions (“RFD”) by a party.

The CAP provides that in each jurisdiction, a judge of the superior court will serve as the Supervising Judge for that jurisdiction, and of the nine Supervising Judges, two will become Administrative Judges (one for the Eastern parties and one for the Western Parties). The CAP is used to determine which Supervising Judge has jurisdiction to hear an RFD matter. Paragraph 5 of the CAP provides:

  1. Should a hearing be required, the Administrative Judges will make such direction and determine the jurisdiction in which the hearing should be held. In making this determination the Administrative Judges will be guided by the following principles:

(a) Where the issue(s) involve relief for a particular class member or particular class, the hearing will be directed to the supervising court with jurisdiction over the class member or class pursuant to the terms of the Agreement and the Approval Orders.

(b) Where the issue(s) affect more than one jurisdiction, but not all, the hearing will be directed to a supervising court in one of the affected jurisdictions.

(c) Where the issue(s) affect all jurisdictions, the hearing may be directed to any court supervising the Agreement. …

(f) In applying these principles, the Administrative Judges may also be guided by any other consideration that he or she deems to be appropriate in the circumstances.

Since the IRSSA was signed, the appellants have filed two RFDs to require the respondent to produce various documents. The appellants were successful on both RFDs, but the respondent had still not produced the necessary documents. On the previous RFDs, the Eastern and Administrative judge (from Ontario) determined that the Supervising Judge of Ontario (himself) would have jurisdiction.

The appellants filed a third RFD to seek compliance with the first two. In this case, the Supervising Judge (still the same person who was also the Eastern Administrative Judge) recused himself from hearing the RFD. The Eastern Administrative Judge assigned the RFD to the Supervising Judge of British Columbia, who is also the Western Administrative Judge. The Eastern Administrative Judge relied on paragraph 5(f) of the CAP to support his assignment of the case and cited judicial economy and the benefit of having an expert (the Western Administrative Judge) hear the RFD as the residual considerations that necessitated the assignment.

The appellants appeal the judge’s order to assign the case to the British Columbia Supervising Judge, asserting that the judge should have referred it to the Ontario Superior Court of Justice, where, because of his recusal as the Supervising Judge, the RFD would have been heard by a different judge of the court.

issues:
  1. What is the standard of review?
  2. Did the Eastern Administrative Judge err in referring the RFD to the British Columbia Supervising Judge?
holding:

Appeal allowed.

reasoning:
  1. What is the Standard of Review?

Correctness. Before addressing the issue, the Court of Appeal first discussed the standard of review to be applied on the appeal. The Court of Appeal held that the correct standard of review correctness and gave several reasons to support this holding. First, the CAP is an appendix to a court order. When interpreting a court order, courts treat this much the same as interpreting a statute. Interpreting the CAP therefore involves a question of law and so correctness is the standard of review. Secondly, the judge’s interpretation of the CAP and decision to refer the RFD is a question of jurisdiction, which is also reviewable on a correctness standard.

  1. Did the Eastern Administrative Judge err in referring the RFD?

Yes.

The appeal turned on the interpretation of paragraph 5 of the CAP. In his decision, the Eastern Administrative Judge relied almost exclusively on paragraph 5(f). While the Court of Appeal found that the considerations he cited under 5(f) were important, 5(f) was not applicable to this appeal and thus the Eastern Administrative Judge erred.

The Court of Appeal then went on to interpret paragraph 5 in the way it should have been. The Court looked at paragraph 5 as a whole and found that paragraph 5(a) was mandatory, while the others were permissive. Particularly, 5(a) says “relief for a particular class member or particular class, the hearing will be directed to the supervising court with jurisdiction over the class member or class pursuant to the terms of the Agreement and the Approval Orders” (emphasis added). In contrast, the other parts of paragraph 5 use the word “may”, which is permissive and discretionary. The other paragraphs also refer to “a supervising court” rather than “the supervising court”, which again highlights the mandatory nature of 5(a).

The appellants are all residents of Ontario, and their claims related only to one Residential School which was in Ontario. Thus, the appellants RFD fell squarely within the terms of paragraph 5(a), which mandated that the Ontario Superior Court of Justice should hear the RFD. By referring to 5(f), the Eastern Administrative Judge incorrectly interpreted 5(a) and used permissive language to override mandatory language. This was an error of law and so the Court of Appeal allowed the appeal.

Before disposing of the appeal, the Court of Appeal went on to consider and dismiss some of the respondent’s submissions in obiter. The respondent argued that: i) paragraph 5 of the CAP contains guiding principles, not mandatory rules; ii) that the French translation of the CAP makes 5(f) more than permissive or discretionary; iii) that paragraph 7 of the CAP is entirely determinative of the appeal; and iv) that the appellants attorned to the jurisdiction of the British Columbia Supervising Judge by appearing before it on a different RFD. The Court of Appeal dismissed all of these arguments, and having already decided that the Eastern Administrative Judge committed an error of law, allowed the appeal.


Way v. Schembri, 2020 ONCA 691

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

Counsel:

J. C. Lisus, A.J. Winton and N. Holmberg, for the appellants

J.M. Wortzman and S. Malthouse, for the respondents

Keywords:Contracts, Interpretation, Real Property, Joint Venture Agreements, Rights of First Refusal, Restrictive Covenants, Civil Procedure, Summary Judgment, Partial Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

The parties to this action are both real estate developers. In 2007, they entered into a joint venture agreement. Shortly after, they decided to form a corporation to pursue other development opportunities. In 2008, they executed a shareholders’ agreement for the newly formed corporation, with each of their own numbered companies as shareholders.

The shareholders’ agreement contained a clause, which was under the heading “Non-Competition”, but in substance was essentially a right of first refusal. The clause stipulated that the respondent shareholder was obligated to present any development opportunities to the newly formed corporation and the appellant shareholder first. If the corporation and the appellant shareholder did not decide to pursue the opportunity, then the respondent shareholder would be free to pursue it individually.

The appellant commenced an action in 2012 based on a claim for damages arising out of an alleged breach of this clause. It is also worth noting that the appellants’ action was a companion action to a broader action, and that the parties have been engaged in ongoing litigation since 2010.

Nevertheless, in 2017, the respondents brought a motion for summary judgment to dismiss the appellants’ action on the ground that the clause was an unenforceable restrictive covenant. The motion judge agreed with this submission, and granted summary judgment dismissing the action. The appellants appealed this judgment.

issues:
  1. Did the motion judge err in granting summary judgment?
holding:

Appeal allowed.

reasoning:
  1. Did the motion judge err in granting summary judgment?

Yes. The Court began its analysis by noting that it seemed unusual that a motion judge would consider summary judgment in one action that has already been ordered to be tried together with another action, along with an order for common examinations for discovery. The reality that the facts underlying the two actions were inextricably intertwined made the decision even more unusual. In that sense, the Court was puzzled why this issue was dealt with separately from the other action in the first place, as it could have easily been addressed within the broader action.

The Court agreed with the appellants’ submission that the motion judge effectively granted partial summary judgment. While the judgment technically disposed of the appellants’ action in its entirety, the close relationship with the companion action remained to blur the lines between the two. The Court emphasized that partial summary judgement should only be used sparingly, due to the risk that it might actually further complicate matters instead of simplifying them, contrary to both its intended purpose and the Hryniak objective (Butera v. Chown, Cairns LLP, 2017 ONCA 783; Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369).

In short, this case carried the risk that the conclusions ultimately reached by the trial judge could conflict with the result reached by the motion judge.

Aside from the issue of partial summary judgment, the Court also noted that the motion judge’s findings demonstrated that summary judgment was never appropriate in the circumstances. Based on the motion judge’s findings, a detailed collection of facts producing a solid foundation for analysis was necessary. The motion judge neglected to collect such evidence in an effort to undertake such an analysis. The motion judge should have interpreted the contract in a manner consistent with the surrounding circumstances known to the parties at the time of the contract’s formation (Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53).

Further, the motion judge erred in rejecting the legitimacy of the clause as a mere “agreement to agree”. The Court noted that rights of first refusal always contemplate the need for further agreement, and that acknowledging this need does not invalidate the clause. This would suggest that the motion judge misunderstood the proper application of the “agreement to agree” principle.

Due to the Court’s conclusion that the order granting summary judgment should be set aside and the action reinstated, the Court declined to make any findings or observations as to the actual enforceability of the clause in question.


B. v. Mississauga, 2020 ONCA 697

[Roberts, Trotter and Thornburn JJ.A.]

Counsel:

M. H. B., acting in person

R. Ryan, for the respondent

Keywords: Torts, Negligence, Civil Procedure, Limitation Periods, Discoverability, Capacity, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., ss. 4, 7, Rules of Civil Procedure, Rule 15.01(1), Canadian Charter of Rights and Freedoms, Ontario Human Rights Code, R.S.O. 1990, c. H.19, s. 15, Liu v. Wong, 2016 ONCA 366, Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447

facts:

In May 2013, the appellant fell off his bicycle and had a broken finger and superficial facial abrasions as a result. He submitted a Claim Report to the respondent seeking compensation and recommended remediation of the hazard that led to his fall. On the form that he completed, he was warned about the limitation period. The appellant later refused to cooperate with the adjuster assigned to investigate the claim. The appellant was then warned in a letter on May 5, 2014, that his file would be closed if he did not respond and was advised of the limitation period. There was no further communication and the file was closed in June of 2014.

In September 2017, he issued a claim against the respondent, seeking damages. The respondent moved for summary judgement, alleging that the two-year limitation period had expired. The appellant advanced two arguments on the summary judgement motion: (1) he did not discover the extent of his injuries until years after the accident; and (2) he lacked the capacity to commence litigation within the limitation period due to a disability. The motion judge rejected the appellant’s arguments and determined that there was no genuine issue for trial. The motion was granted to dismiss the appellant’s action, and the appellant appealed.

issues:
  1. Did the motion judge err in finding that the subsequent discovery of the severity of the injuries did not extend the limitation period?
  2. Did the motion judge err in finding that the appellant had capacity?
  3. Was the motion judge biased?
  4. Was there a breach of Rule 15.01(1)?
  5. Were the appellant’s rights breached under s. 15 of the Charter and the Ontario Human Rights Code?
  6. Should the appellant’s request to anonymize the proceedings be granted?
holding:

Appeal dismissed.

reasoning:
  1. Did the motion judge err in finding that the subsequent discovery of the severity of the appellant’s injuries did not extend the limitation period?

No. The Court found that the motion judge made no error. The Court emphasized that knowledge of the extent of the damages is not necessary to trigger the commencement of the litigation period. That the appellant’s injuries appeared to have worsened did not extend the limitation period. The Court dismissed this ground of appeal.

  1. Did the motion judge err in finding that the appellant had capacity?

No. The appellant claimed that he lacked the capacity to commence an action because he was “under a disability.” The motion judge accepted that, while the appellant had proffered evidence of a mental illness, there was no evidence that it rose to the level of incapacity for the purposes of s. 7 of the Limitations Act. The Court found that the motion judge correctly applied s. 7, as she stated that a plaintiff is presumed to have been capable of commencing a proceeding, unless the contrary is proved on a balance of probabilities. The motion judge found that it was not proved in this case and the Court dismissed this ground of appeal.

  1. Was the motion judge biased?

No. The appellant submitted that the motion judge was not interested in hearing him and addressed him in a rude manner. According to the appellant, after reading the report from one of his doctors, the motion judge looked at him and, in a harsh tone, said, “you’re fine.” The Court found that there was no merit to the submission that the motion judge was biased. The Court stated that he should have ordered the transcript and not simply relied on his own assessment of what happened. The Court also held that even if the appellant’s description of what happened could be taken at face value, it did not establish bias. The Court dismissed this ground of appeal.

  1. Was there a breach of Rule 15.01(1)?

No. The appellant contended that, being a person under disability, he was entitled to be represented by counsel. The Court noted that the motion judge found that the appellant was able to represent himself in court. Moreover, the issue was not raised with the motion judge, or any of the other judges before whom the motion was spoken to in the eight-month period between the service of the summary judgment motion and the day of the hearing. The Court rejected this ground of appeal.

  1. Were the appellant’s rights breached under s. 15 of the Charter and the Ontario Human Rights Code?

No. The Court found that the appellant had failed to establish any factual basis for his submission that his rights were infringed as a result of discrimination based on disability. The Court refused to give effect to this ground of appeal.

  1. Should the appellant’s request to anonymize the proceedings be granted?

No. The Court found that there was no legal basis to amend the title of the proceedings in the manner that the appellant requested.


Fettes v. Clark, 2020 ONCA 705

[Roberts, Trotter and Thorburn JJ.A.]

Counsel:

A. J. Lyons, for the appellant

T. Peters, for the respondent

Keywords: Family Law, Spousal Support, Property, Unjust Enrichment, , Kerr v Baranow, 2011 SCC 10, Berta v Berta, 2015 ONCA 918, Djekic v Zai, 2015 ONCA 25

facts:

This dispute arose following the breakdown of the parties’ seventeen year common-law relationship. The trial judge ordered that the appellant pay the respondent, his former common-law spouse, $75,000 plus indefinite monthly spousal support of $561. The appellant appealed.

issues:

(1) Did the trial judge err by granting the respondent’s unjust enrichment claim?
(2) Did the trial judge err by awarding the respondent indefinite spousal support?

holding:

Appeal dismissed.

reasoning:

(1) No. The trial judge’s determination of these issues was highly fact-specific and therefore attracted considerable appellate deference absent error. The Court of Appeal saw no error that would have warranted appellate intervention, and the Court’s role was not to retry the case.

The trial judge thoroughly analyzed the details of the parties’ 17-year relationship and lifestyle and, in particular, their respective contributions to the acquisition, construction and day-to-day maintenance of their home. She also referenced and correctly applied the test for unjust enrichment as set out by the Supreme Court in Kerr v Baranow, and after careful consideration of each element found the respondent’s claim was made out. In her conclusion, the trial judge set out the benefits conferred by the respondent’s efforts.

The trial judge further clarified that the respondent was not entitled to compensation for the usual daily household chores she may have had more time than the appellant to do. As a result, she awarded the respondent “her value received money damages for her contribution toward the acquisition, improvements and renovations of the five-acre neglected property that was purchased by [the appellant].” The trial judge was also at liberty to not accept the respondent’s expert evidence regarding the value his gardening work added to the property.

The trial judge was not required to undertake a minute appraisal of the value of the respondent’s interest but did the best she could on the record before her. As her result was fair and reasonable, there was no basis for the Court of Appeal to intervene.

(2) No. The Court found that the trial judge did not misapprehend the respondent’s evidence regarding her earning capacity or her need for an indefinite period of spousal support. In the alternative, the appellant argued the respondent should have received transitional spousal support for two years in the monthly amount of $335. This was also rejected.

The trial judge clearly determined that indefinite spousal support, rather than transitional support, was appropriate in the circumstances given the respondent’s age, income potential, and duration of the relationship. She also included in her order a provision for annual financial disclosure, and the order for indefinite support was subject to variation based on a material change in either party’s circumstances. Therefore, the trial judge’s decision was reasonable.


Mughal v. Bama Inc., 2020 ONCA 704

[Roberts, Trotter and Thorburn JJ.A.]

Counsel:

J. Shulman, for the appellant, M. A. K.

J. S. Contini, for the respondent, N. A. M.

Keywords: Tort, Conspiracy to Commit Injury, Request to Adjourn, Ineffective Counsel, Canada Cement Lafarge v. British Columbia Lightweight Aggregate Ltd., [1983] 1 SCR 452, Agribands Purina Canada Inc. v. Kasameka, 2011 ONCA 0460

facts:

The appellant was a business partner with Mr. Q, a friend of the respondent. The respondent and Mr. Q renewed their acquaintance and Mr. Q convinced the respondent to invest the whole of his life savings into Bama Inc. Mr. Q said that Bama Inc. was a very successful electrical supply company, but in reality, it was nothing more than a shell company.  Mr. Q and the appellant were directors of Bama Inc.

Over the next year or so, the respondent invested over $200,000 of his savings and some borrowed money as well into Bama Inc. on the basis of Mr. Q’s fraudulent representations, as well as fraudulent claims on Bama Inc.’s website. The appellant was heavily involved in setting up and running the website.

The vast majority of the respondent’s funds that were invested in Bama Inc. were in fact transferred into ET Zone Supply Inc., a struggling business in which Mr. Q was heavily involved.

Mr. Q, Bama Inc. and the appellant were all found liable at trial for conspiracy to cause economic injury to the respondent. The appellant appeals this decision.

issues:
  1. Did the trial judge err in finding the appellant committed the tort of conspiracy to injure by applying the wrong test and misapprehending the evidence?
  2. Did the trial judge err in awarding substantial indemnity costs against the appellant?
holding:

Appeal dismissed.

reasoning:

Before addressing the issues on appeal, the Court of Appeal considered the appellant’s request to adjourn the appeal. Mr. Q was also appealing the judgment against him and the appellant submitted that a matter in that appeal could be relevant to his appeal. He also submitted that he was considered raising an ineffective counsel argument on appeal. The Court of Appeal was given no particulars of what this matter in Mr. Q’s appeal was, and was not given a reason for why it was never raised earlier. There was no mention of the ineffective counsel argument in any appeal notices nor any evidentiary background to support it. Further, the Court found the respondent would suffer non-compensable prejudice if the adjournment was granted and so it refused the adjournment.

  1. No.

The trial judge cited the appropriate test for conspiracy to injure from Canada Cement. The tort of conspiracy to injure is made out where:

(1) Whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants’ conduct is to cause injury to the plaintiff; or

(2) Where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result in loss to the plaintiff.

For the second factor, a judge need not establish predominant purpose, but rather, constructive intent can be derived from what the defendants should have known would ensue and that damage would be suffered.

While the appellant did not personally make any specific fraudulent representations to the appellant, nor was he present for any of the misrepresentations, the trial judge found that he was nevertheless a party to the conspiracy. By creating the website and bank accounts for Bama Inc., the appellant created the necessary corporate presence to further the fraud and to create the false impression that Bama was a real, successful company.

The Court of Appeal found that the evidentiary record amply supported the trial judge’s conclusions on the appellant’s involvement in the conspiracy and dismissed the appeal.

2. No.

The appellant submitted that the trial judge erred in awarding substantial indemnity costs against him based on civil fraud, when the trial judge found that he had not committed fraud. While the appellant was not found liable for civil fraud, deceit or conversion, he was found liable for his fraudulent behaviour in committing the conspiracy to cause the respondent economic injury, and this is what the trial judge was referring to.

Costs decisions are to be accorded deference, and in light of the egregious conduct of the appellant and Mr. Q, there was no basis on which to overturn the costs award.


Krieser v. Garber, 2020 ONCA 699

[Doherty, Hoy and Jamal JJ.A.]

Counsel:

P.W. Kryworuk and J.R.W. Damstra, for the appellants M.N and Nealon Wood Products Ltd.

A.I Schein and W.E. Abrams, for the appellants A.G., M.G and S.G.

K. Prehogan and L. Boritz, for the respondent

Keywords: Torts, Nuisance, Remedies, Mandatory Injunctions, Punitive Damages, Civil Procedure, Offers to Settle, Costs, Appeals, Evidence, Fresh Evidence, Character Evidence, Courts of Justice Act, ss. 134(4), St. Lawrence Cement Inc v Barrette, [2008] 3 SCR 392, Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation), 2013 SCC 13, Tock v. St. John’s Metropolitan Area Board, [1987] 2 SCR 1181, Aventis Pharma S.A. v. Novopharm Ltd., 2005 FCA 390,  Sengmueller v. Sengmueller (1994), 111 DLR (4th) 19 (Ont. CA), Shelfer v. City of London Electric Lighting Co., [1895] 1 Ch. 287 (C.A.), Whiten v. Pilot Insurance Co., [2002] 1 SCR 595, Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, Alguire v. The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 0202, TWI Foods Inc. v. Just Energy Corp., 2012 ONCA 0150, Whitfield v. Whitfield, 2016 ONCA 0720, Young v. Young, [1993] 4 SCR 3

facts:

This appeal arose in the context of an improperly built dock on a waterfront property. There are two appellants, the owner of the property who contracted for the dock to be built (the “Owner Appellant”) and the contractor who built the dock (the “Contractor Appellant”). In the spring of 2012, the Contractor Appellant constructed a dock for the Owner Appellant, but the dock was not built pursuant to the building permit. The dock significantly curtailed the respondents’ (who were neighbours of the Owner Appellant) use of their property and stopped them from being able to dock their boat on their waterfront.

In 2014, the respondents commenced an action against the appellants. Several offers to settle exchanged hands between the parties, but were never accepted. The most significant offer came in 2015, when the respondent offered to pay all the costs of removal, so long as the appellants actually removed the dock. This offer was made to the Owner Appellant, who refused the offer.

In 2018, the trial judge ruled the improperly constructed dock was a nuisance and ordered the appellants jointly and severally, at their expense, remove the dock. The trial judge also ordered punitive damages against the appellants as well as costs on a substantial indemnity scale.

issues:
  1. Did the trial judge err in finding that the dock, as constructed, constituted a nuisance?
  2. Should leave be granted to adduce fresh evidence on appeal?
  3. Did the trial judge err in granting a mandatory injunction for the removal of the dock?
  4. Did the trial judge err in awarding punitive damages?
  5. Should leave to appeal the costs award be granted?
holding:

Appeal allowed in part.

reasoning:

1. Did the trial judge err in finding that the dock, as constructed, constituted a nuisance?

No. Nuisance is the interference with the use or enjoyment of land and the focus is on the harm suffered rather than fault or the nature of the conduct causing harm. To establish a nuisance, the interference with the owner’s use or enjoyment of the land must be both substantial and unreasonable, and the nuisance can be either physical injury to land or an interference with the amenities of the land. The determination of whether an interference is unreasonable is made by balancing the gravity of the harm against the utility of the defendant’s conduct in all of the circumstances.

The appellants submitted that the motion judge erred in applying the test for nuisance in several ways: i) the trial judge focused on the unreasonable conduct of the appellants rather than the harm itself; ii) he failed to consider relevant factors when determining reasonableness; iii) he failed to consider that if the appellants had built the dock properly, it would have been unusable; and iv) he erroneously found this to be a case of physical invasion, as they dock was built on Crown land, not the respondent’s land, and in doing so, the trial judge ‘short-circuited’ the reasonableness analysis.

The Court of Appeal addressed each of these submissions individually:

  • While the focus in a nuisance claim, as opposed to a negligence claim, is on the harm suffered, not the conduct giving rise to that harm, the conduct is not an irrelevant factor and is still properly considered. The trial judge did not solely consider the nature of the conduct, but primarily considered the loss of use of the respondent’s boat. The consideration of the nature of the conduct merely helped frame the finding.
  • The trial judge did consider all of the factors the appellants submitted were not considered. This ground of appeal was simply an attempt to recast previously unsuccessful arguments at trial.
  • The decision of whether an interference is unreasonable must be made in light of all the circumstances. In this case, the appellants’ position was that the dock was incorrectly built through inadvertence. If this was the case, it can hardly be argued that any utility can be attributed their mistake. Further, the nuisance was entirely to the benefit of the appellants and entirely at the cost of the respondent, and so the court upheld the trial judge’s finding that the interference was unreasonable, as there was no reason why the respondent should bear the cost of the appellant’s benefit.
  • The Court of Appeal confirmed that as it relates to assessing reasonableness, it is of no importance whether the nuisance was interference with land or amenities of the land. In either case, the reasonableness analysis must be performed. The Court found that the trial judge did not misclassify the nature of the nuisance.

2. Should leave be granted to adduce fresh evidence on appeal?

No. The Contractor Appellant sought to introduce fresh evidence as to the steps he had taken since the trial judge’s decision to comply with the order, and to bring into question whether the injunction was even possible to comply with. The evidence was to be used to show that assumptions the trial judge made based on future events had turned out to be false, and that since these underpinned several aspects of the decision, the evidence was needed to fairly evaluate the appeal. The respondent sought to introduce fresh evidence in response to the appellant’s evidence.

The Court of Appeal has the discretion to admit further evidence on appeal, and will usually exercise that discretion when: i) the tendered evidence is credible; ii) it could not have been obtained by the exercise of reasonable diligence prior to trial; and iii) the evidence, if admitted, will likely be conclusive of an issue in the appeal.

The Court of Appeal cited Sengmueller, where it was held that evidence that did not exist at trial, could not have possibly impacted the decision at trial. Accordingly, the evidence the appellant sought to adduce, since it relates to events happening after the trial decision, could not possibly have impacted the trial judge’s decision.

The appellant further submitted that by failing to allow the evidence, a substantial injustice would be done in that they would be forced to comply with an unworkable or impossible injunction. The Court of Appeal rejected this argument, because when events that occur post-judgment bring into question the enforcement of the order, it is the trial court, not an appellate court, that is the appropriate venue to dispute the judgment. This is often done through contempt proceedings, which the respondent had already commenced in this case to try and force compliance.

Accordingly, this was not an appropriate case for fresh evidence to be admitted on appeal. Since the appellant was not permitted to adduce fresh evidence, there was no need for the respondent to adduce fresh evidence in response.

3. Did the trial judge err in granting a mandatory injunction for the      removal of the dock?

No. The granting of injunctions is a discretionary matter and as such, will be afforded significant deference on appeal. Appellate intervention is only justified where the exercise of discretion was based on an error of law (determined on a correctness standard), a palpable and overriding error of fact, the consideration of irrelevant factors or the omission of factors that ought to have been considered, or if the decision was unreasonable in the sense that it is not compatible with the judicial exercise of discretion.

The appellants submitted that the trial judge failed to consider several relevant factors and that the injunction should be quashed. First, the trial judge failed to consider whether the order was enforceable by the court, because a permit was needed to remove the dock. Second, the trial judge did not consider principles of proportionality and fairness, and whether the nuisance could be remedied in a less onerous manner. Finally, the trial judge failed to consider public policy implications as the removal of the dock could impact the local fish habitats.

The Court first considered the role of injunctions in nuisance cases, and reaffirmed that injunctive relief is the ordinary relief in these cases. However, where mandatory injunctions, injunctions that require the defendant to take a positive action rather than simply ceasing to do something, are involved, special considerations arise. The trial judge considered several factors present in the case and decided that a mandatory injunction was appropriate in this case.

The Court found that the trial judge did not consider the impact of the required permit when granting the injunction because of the conduct of the appellants. The Contractor Appellant testified to the fact that he had a connection with the relevant Ministry, such that obtaining the permit was just a matter of money and nothing more than a formality. The fact that this turned out to be incorrect did not amount to an error that entitled the appellants to have the injunction invalidated.

On the second submission, the appellants argued that they offered to remove the parts of the dock that interfered with the respondent’s use of their boat, but the respondent did not think that actually alleviated the nuisance. The trial judge agreed, and on appeal, the Court found this conclusion to be well based in the evidence. Further, the appellants submitted that the injunction was unduly burdensome, because if the appellants removed the dock and built it according to the permit, the Owner Appellant would not be able to use his dock for his boat, as the water would be too shallow. However, both appellants knew this to be the case before they applied for the permit, but applied for the permit anyways. To force them to comply with that permit was not overly burdensome according to the trial judge, and the Court of Appeal so no reason to overturn that finding.

For the argument about the fish habitats, there was no evidence at trial about the fish habitats, other than that of the Contractor Appellant. No expert evidence was led on the fish habitats and potential impact of the removal, and so it was not an error for the trial judge to not consider an issue which was not properly put before him.

4. Did the trial judge err in awarding punitive damages?

Yes, in part. The trial judge erred in awarding punitive damages against the Contractor Appellant. The trial judge did not err in awarding punitive damages against the Owner Appellant.

The trial judge focused on several key facts in awarding punitive damages. First, the respondent brought it to the attention of the appellants that the dock was being improperly built, but neither did anything about it and continued to build the dock. Further, the trial judge found that the Contractor Appellant was far too experienced and had no history of mistakes such as the one in this case, and so it was unlikely that it was actually a mistake. The trial judge found there must have been some sort of tacit understanding between the two appellants to incorrectly build the dock in this manner. Most importantly, the trial judge found that the appellants took no action to remedy the mistake, even when the respondent offered to pay for the remedy.

The court noted that appellate courts have greater scope when reviewing punitive damages than other damages. Punitive damages are reserved for exceptional cases, to punish, deter, and denounce “malicious, oppressive and high-handed” misconduct that “offends the court’s sense of decency.” The questions for a court are whether the misconduct of the defendant was so outrageous that punitive damages were rationally required to further one or other of the underlying purposes of punitive damages, and was the quantum ordered, and no less, rationally required to do so?

The Contractor Appellant

The Contractor Appellant submitted that trial judge erred in treating the two appellants as one, and that punitive damages were only properly awarded against the Owner Appellant. In the alternative, the Contractor Appellant submitted that the punitive damages awarded were arrived at based on improper considerations, in that the trial judge did not consider the lowest possible award to achieve the purpose of punitive damages.

Where there are multiple defendants, the award of punitive damages must be justified with respect to each of them. By treating the two appellants as one, the trial judge committed an error of law. The Court of Appeal went on to consider whether the Contractor Appellant’s conduct was so outrageous that it needed to be denounced and deterred. The fundamental findings of the trial judge relating to punitive damages were that the appellants took such a long time to remedy the nuisance, and rejected generous settlement offers. However, the Court of Appeal noted that the appellants were in significantly different circumstances in relation to these facts. The Contractor Appellant did not own the dock. He could not have accepted the settlement offer, nor could he have unilaterally removed the dock. He was at the mercy of the owner contracting him to do so. Therefore, his failure to remove the dock cannot be said to be a failure at all.

While the Contractor Appellant was far from blameless in this case, he was not at fault for the protracted failure to remedy the situation. Further, he had already paid a fine for pleading guilty to a criminal offence in relation to the construction, which is a factor that weighs heavily when deciding whether punitive damages are appropriate. Ultimately, the court held that while the Contractor Appellant was at fault for the faulty construction, his conduct was not so outrageous that it needed to be deterred. The Contractor Appellant could not be held liable for punitive damages for the failure to remedy the mistake because he did not have control over the decision.

The Owner Appellant

The Owner Appellant submitted that the trial judge’s finding of a tacit agreement was not supported by the evidentiary record. Secondly, the Owner Appellant submitted that the trial judge erred in refusing to permit him to adduce character evidence about the respondents that showed the real reason he did not accept their generous settlement offer. Finally, the Owner Appellant adopted the Contractor Appellant’s argument in the alternative.

In regards to the finding of a tacit agreement, the Court of Appeal found that even if there had been a reviewable error in this finding, the finding of a tacit agreement was not fundamental to the award of punitive damages, and so this submission did not help the appellant.

The Court of Appeal also refused to interfere with the trial judge’s decision to not allow character evidence, as it was irrelevant. While the trial judge accepted that character evidence is relevant for punitive damages if it can be shown that the plaintiff provoked the defendant’s reprehensible conduct, the trial judge held that the Owner Appellant had failed to establish any causal connection between the respondent’s conduct and their own conduct. The appellant further submitted on appeal that the evidence ought to be allowed to show the respondent had unclean hands and thus was not to an equitable remedy. However, the appellant did not plead unclean hands at trial and so the trial judge made no reviewable error in not considering the doctrine.

In regards to the proportionality submission, the Court found that the trial judge sufficiently engaged in a careful consideration of proportionality to determine the lowest award to rationally achieve the objectives of punitive damages, and saw no reason to intervene.

5. Should leave to appeal the cost award be granted?

Yes, for the Contractor Appellant. No, for the Owner Appellant.

Contractor Appellant

The Contractor Appellant submitted that there was no basis on which to award substantial indemnity costs against him. The test for leave to appeal costs is stringent and there must be strong grounds upon which the appellate court could find that the judge erred in exercising his discretion. However, where there is no basis for an award of substantial indemnity costs of the trial, the Court of Appeal will grant leave to appeal costs and reduce the amount awarded to reflect partial indemnity costs.

In awarding substantial indemnity costs against the Contractor Appellant, the trial judge relied on the appellant’s inability to accurately explain how he made his mistake, and the fact that the Contractor Appellant spent years arguing his actions were legal when it was obvious that he built a dock contrary to the permit and that he had plead guilty to a criminal offence for the same actions.

Absent applicable settlement offers, substantial indemnity costs should be rare and should only be ordered for reprehensible, scandalous, or outrageous conduct. The fact that a defence has little merit or is ultimately unsuccessful is no basis for awarding substantial indemnity costs. Just because the Contractor Appellant built the dock contrary to the permit and pleaded guilty to doing so did not mean that it was a nuisance, and he was entitled to defend himself against that claim. Further, the Contractor Appellant was not at liberty to accept the settlement offers or remedy the situation as was discussed above. The Court of Appeal found there was no conduct on the part of the Contractor Appellant that justified substantial indemnity costs, and so leave to appeal was granted. The Court of Appeal then awarded costs against the Contractor Appellant on a partial indemnity basis.

Owner Appellant

The Owner Appellant’s costs argument was based on the fact that the freshly adduced evidence he sought to admit would make his decision to reject the generous settlement offer reasonable, thus negating the substantial indemnity costs award. However, since he was refused leave to adduce said evidence, there was no basis on which to overturn the costs award against him.


SHORT CIVIL DECISIONS

Mudronja v. Mudronja, 2020 ONCA 702

[van Rensburg, Pardu and Huscroft JJ.A.]

Counsel:

E. Rayson, for E. M

A. Virk, for M. M.

Keywords: Family Law, Costs, Reasonableness, Proportionality, Family Law Rules, O. Reg. 114/99, Rules 24(1) and 24(12), Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, s.1(1)


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.