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Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of May 31, 2021.

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Topics covered this week included medmal, constructive trust in the family law context, the interpretation of a commercial lease, the dismissal of a motion for leave to appeal from a sale process proposed by a receiver, partial summary judgment on the eve of trial involving a claim of negligence against a parent corporation in relation to negligence of its subsidiary, claiming interest under construction liens and trusts, and a child protection decision in French.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Marchant Realty Partners Inc. v. 2407553 Ontario Inc., 2021 ONCA 375

Keywords: Bankruptcy and Insolvency, Receiverships, Commercial Mortgages, Enforcement, Civil Procedure, Appeals, Leave to Appeal, Commercial List, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 193, Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.), Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1 (C.A.), Ravelston Corp. Ltd. (Re), 2007 ONCA 135

Fram Elgin Mills 90 Inc. v. Romandale Farms Limited , 2021 ONCA 381

Keywords: Contracts, Real Property, Estoppel by Convention, Civil Procedure, Costs, Offers to Settle, Rules of Civil Procedure, Rule 49, Wesbell Networks Inc. v. Bell Canada, 2015 ONCA 33

Great Northern Insulation Services Ltd. v. King Road Paving and Landscaping Inc., 2021 ONCA 367

Keywords: Contracts, Construction Liens, Trusts, Solicitors, Charging Orders, Priority, Interest, Construction Lien Act, R.S.O. 1990, c. C.30 ss. 1(1), 8, 11, 14(2), 71, Solicitors Act, R.S.O. 1990, c. S.15, s. 34(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b), Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, s. 64(1), Sunview Doors Ltd. v. Academy Doors & Windows Ltd., 2010 ONCA 198, Fundy Ventilation Limited v. Brunswick Construction Ltd., Fraser Companies Limited and Minister of National Revenue, (1982), 40 N.B.R. (2d) 484 (C.A.), Kaiman v. Graham, 2009 ONCA 77, Markevich v. Canada, 2003 SCC 9, The Guarantee Company of North America v. Royal Bank of Canada, 2019 ONCA 9

Avedian v. Enbridge Gas Distribution Inc. (Enbridge Gas Distribution), 2021 ONCA 361

Keywords: Torts, Negligence, Duty of Care, Proximity, Corporations, Subsidiaries, Piercing Corporate Veil, Civil Procedure, Partial Summary Judgment, Consolidated Practice Direction for Civil Actions, Applications, Motions and Procedural Matters in the Toronto Region, s. 69, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, Vedanta Resources PLC v. Lungowe, [2019] UKSC 20, AAA v. Unilever PLC, [2018] EWCA Civ. 1532

Uribe v. Tsandelis , 2021 ONCA 377

Keywords: Torts, Negligence, Medical Malpractice, Standard of Care, Causation, Apportionment of Fault, Civil Procedure, Juries, Evidence, Witnesses, Questioning by Judge, Rules of Civil Procedure, Rule 52.08(1), Donleavy v. Ultramar Ltd., 2019 ONCA 687, Stilwell v. World Kitchens, 2014 ONCA 770, Salter v. Hirst, 2011 ONCA 609, Chippewas of Mnjikaning First Nation v. Ontario, 2010 ONCA 47, R. v. Danial, 2016 ONCA 822

Lesko v. Lesko , 2021 ONCA 369

Keywords: Family Law, Property, Unjust Enrichment, Constructive Trust, Joint Family Venture, Equalization of Net Family Property, Spousal Support, Income for Support Purposes, Family Law Act, R.S.O. 1990, c. F.3, Federal Child Support Guidelines, S.O.R./97-175, Family Law Rules, O. Reg. 114/99, Hickey v. Hickey, [1999] 2 S.C.R. 518, Kerr v. Baranow, 2011 SCC 10, Martin v. Sansome, 2014 ONCA 14, McNamee v. McNamee, 2011 ONCA 533, Punzo v. Punzo, 2016 ONCA 957, Mason v. Mason, 2016 ONCA 725, Decaen v. Decaen, 2013 ONCA 218, Gray v. ICBC, 2010 BCCA 459

Paletta International Corporation v. Liberty Freezers London Ltd., 2021 ONCA 383

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Canada Square Corp. v. Versafood Services Ltd. (1982), 130 D.L.R. (3d) 205 (Ont. C.A.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Building Code Act, S.O. 1992, c. 23, Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165, Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 220 D.L.R. (4th) 611 (Ont. C.A.), Martin v. Goldfarb (1998), 41 O.R. (3d) 161 (C.A.)

Valoris for children and adults of Prescott-Russell v KR , 2021 ONCA 366

Keywords: Family Law, Custody and Access, Supervised Visitation, Civil Procedure, Orders, Enforcement, Contempt, Child, Youth and Family Services Act, 2017, ss. 87(8), (9), and 142(3), Carey v. Laiken, 2015 SCC 17, Services for children and adults of Prescott-Russell c. NG (2006), 271 DLR (4th) 750, TG Industries v. Williams, 2001 NSCA 105, Hefkey v. Hefkey, 2013 ONCA 44, Ruffolo v. David, 2019 ONCA 385, Culligan Canada Ltd. v. Fettes, 2010 SKCA 151, Telus Communications Inc. v. Cherubin, [2005] OJ No. 5534 (CS), 884772 Ontario Ltd. (cob Team Consultants) v. SHL Systemhouse Inc. (1993), Jaskhs Enterprises Inc. v. Indus Corp., [2004] OJ No. 4062, Bell ExpressVu Limited Partnership v. Torroni, 2009 ONCA 85, Chong v. Donnelly, 2019 ONCA 799

Short Civil Decisions

Grist v. TruGrp Inc., 2021 ONCA 374

Keywords: Torts, Defamation, Anti-SLAPP, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1(8), Veneruzzo v. Storey, 2018 ONCA 688

8573123 Canada Inc. (Elias Restaurant) v. Keele Sheppard Plaza Inc., 2021 ONCA 371

Keywords: Contracts, Real Property, Commercial Leases, Options to Renew, Duty of Good Faith, Remedies, Relief from Forfeiture, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98

AA v BB, 2021 ONCA 384

Keywords: Torts, Intentional Infliction of Emotional Distress, Conspiracy, Defamation, Libel, Slander, Family Law, Crown Wardship, Costs

Nagpal v. IBM Canada Ltd., 2021 ONCA 391

Keywords: Costs


CIVIL DECISIONS

Marchant Realty Partners Inc. v. 2407553 Ontario Inc., 2021 ONCA 375

[Jamal J.A. (Motions Judge)]

Counsel:

S.L. Graff, M. Spence and S. Nadler, for the moving parties/appellants

S. Wilson and K. Kraft, for the responding party Zeifman Partners Inc.

Keywords: Bankruptcy and Insolvency, Receiverships, Commercial Mortgages, Enforcement, Civil Procedure, Appeals, Leave to Appeal, Commercial List, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 193, Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.), Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1 (C.A.), Ravelston Corp. Ltd. (Re), 2007 ONCA 135

facts:

The moving parties are debtors (“Debtors”). Marchant Realty Partners Inc., as agent for a group of lenders, commenced three related receivership proceedings before the Commercial List concerning loans the Lenders made to the Debtors. As of October 2020, the Debtors owed more than $16 million under the loans.

Zeifman Partners Inc., (“Receiver”) is the court-appointed receiver and manager over the assets, undertakings, and real property of the Debtors. The Debtors sought leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”), from the orders of the motion judge approving the Receiver’s proposed sale process and list prices for five commercial properties in downtown Niagara Falls, Ontario.

issues:

(1) Does the proposed appeal raise an issue of general importance to bankruptcy/insolvency practice or the administration of justice?

(2) Is the proposed appeal prima facie meritorious?

(3) Would the proposed appeal unduly hinder the progress of the receivership proceedings?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Debtors asserted that the proposed appeal raises an issue of general importance to bankruptcy/insolvency practice regarding the extent of deference that the Court owes to a receiver’s business judgement when approving a sale process.

The Court found that while the court should consider and apply the principles of deference applicable to a receiver’s business judgment, those principles are not in dispute. They were correctly stated by the motion judge: Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.) Applying settled principles of deference to the Receiver’s business decisions would not raise an issue of general importance.

(2) No.

The Debtors argued that the motion judge erred in law by failing to state or apply the Soundair test for evaluating whether a receiver has acted properly: Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1 (C.A.). The Court stated that considerable deference must be given to commercial court judges in such proceedings: Ravelston Corp. Ltd. (Re), 2007 ONCA 135. Further, commercial court judges give considerable deference to receivers: Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.). In his decision, the commercial list judge did apply the Soudair test in his reasons. Thus, there was no error and the appeal lacked prima facie merit.

(3) Yes.

All the loans in issue matured three to four years ago. Considerable time had been given to the Debtors in order to allow them to refinance, which was not done. The property tax is a carrying cost to the Receiver, which ranks ahead of the Lenders’ mortgages, eroding potential recovery. Therefore, the proposed appeal would hinder the receivership process.


Fram Elgin Mills 90 Inc. v. Romandale Farms Limited , 2021 ONCA 381

[Gillese, Lauwers and Benotto JJ.A.]

Counsel:

C.G. Paliare and T.H. Lie, for the appellants Jeffrey Kerbel, 2001251 Ontario Inc., and First Elgin Developments Inc.

S.R. Block, J. Opolsky, S.J. Erskine, and B Lerer for the appellants Fram Elgin Mills 90 Inc.

S.E. Batner, K. Kalogiros, and A. Bourassa, for the respondent

Keywords: Contracts, Real Property, Estoppel by Convention, Civil Procedure, Costs, Offers to Settle, Rules of Civil Procedure, Rule 49, Wesbell Networks Inc. v. Bell Canada, 2015 ONCA 33

facts:

Four actions were tried together in the fall of 2018 (the “Actions”). The Respondent was awarded costs of the Actions, on a substantial indemnity basis, in the amount of $2,708,651.57. Those costs were made payable on a joint and several basis by the Appellants.

The Appellants were successful on appeal. Costs for the appeal were agreed upon by the parties but the costs for the Actions were not resolved. The Appellant Fram sought partial indemnity costs of $1,147,595.63 for the Actions. The Appellant Kerbel sought partial indemnity costs of $956,002.50.

issues:

(1) Are the Appellants entitled to partial indemnity costs for the Actions in the amounts sought?

holding:

Partial indemnity costs of the Actions granted.

reasoning:

(1) Yes.

Costs are to be determined based on the overall success of the parties: Wesbell Networks Inc. v. Bell Canada, 2015 ONCA 33. The Actions were tried together to ensure that the rights and interests of the parties in the Lands were properly determined. The Appeals determined those respective rights and interests with the result that the Appellants achieved overall success. Further, the Appellants achieved greater success on the Appeals than their Settlement Offer, which the Respondent rejected. Finally, as the Appellants’ costs were reasonable, they were entitled to partial indemnity costs in the amounts claimed.


Great Northern Insulation Services Ltd. v. King Road Paving and Landscaping Inc., 2021 ONCA 367

[Doherty, Nordheimer and Harvison Young JJ.A]

Counsel:

J. Frustaglio, for the appellant

M. Odumodu, for the respondent

Keywords: Contracts, Construction Liens, Trusts, Solicitors, Charging Orders, Priority, Interest, Construction Lien Act, R.S.O. 1990, c. C.30 ss. 1(1), 8, 11, 14(2), 71, Solicitors Act, R.S.O. 1990, c. S.15, s. 34(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b), Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, s. 64(1), Sunview Doors Ltd. v. Academy Doors & Windows Ltd., 2010 ONCA 198, Fundy Ventilation Limited v. Brunswick Construction Ltd., Fraser Companies Limited and Minister of National Revenue, (1982), 40 N.B.R. (2d) 484 (C.A.), Kaiman v. Graham, 2009 ONCA 77, Markevich v. Canada, 2003 SCC 9, The Guarantee Company of North America v. Royal Bank of Canada, 2019 ONCA 9

facts:

The appellant law firm appealed an order, with leave, from the Divisional Court allowing the appeal of Great Northern Insulation Services Ltd. (“Great Northern”) regarding its claim for priority arising out of a charging order that the appellant obtained in the proceeding.

The respondent was hired as a contractor to renovate an old barn. A dispute arose between the two subcontractors that supplied goods and services to the project and remained unpaid. One subcontractor, Great Northern, registered a construction lien against the property which was tried with the respondent’s claim. The second contractor, Webdensco, assigned its interest in its lien to the respondents, pursuant to s. 73 of the Construction Lien Act, R.S.O. 1990, c. C.30 (“CLA”).

The respondent sought payment on behalf of Webdensco. The trial judge ruled in favour of the respondents against the property owners and in favour of Great Northern against the respondents. The trial judge held that both subcontractors were entitled to liens under the CLA. Several months later, the appellant’s motion on an urgent basis for a charging order under s. 34(1) of the Solicitors Act, R.S.O. 1990, c. S.15, was granted. The charging order was given priority over any amount owed to Great Northern by the respondent pursuant to the trial judgment and costs order. Great Northern appealed the priority provided by the charging order. The Divisional Court allowed the appeal and provided Great Northern with priority over the appellant’s charging order with accruing interest. The Divisional Court found that the interest owing to Great Northern was included in its claim against the trust funds created by s. 8 of the CLA, as it was expressly provided for in the contract.

issues:

(1) Did the Divisional Court err in finding that it had jurisdiction to hear an appeal from the charging order?

(2) Did the Divisional Court err in finding that interest payable on the contract price was to be included within the trust funds?

(3) Did the Divisional Court err in finding that the appellant’s priority over the trust funds was not affected by the assignment of Webdensco’s lien to the respondents?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Divisional Court had jurisdiction to hear the appeal. Section 34(1) of the Solicitors Act requires a lawyer who wants to obtain a charging order to bring a motion in the proceeding where the “property recovered or preserved through the instrumentality of the solicitor” originated. As the proceeding was a construction lien, the necessary appeal route is governed by the CLA where s. 71 provides a right of first appeal to the Divisional Court. The ONCA does not have original jurisdiction when a statute provides a right of first appeal to the Divisional Court: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b).

(2) No.

The interest payable on the contract price fell within the scope of s. 8(2) of the CLA. The interest was considered an amount owing to a subcontractor because the interest rate of outstanding amounts was expressly provided for in the contract. The Court liberally interpreted s. 8(2) due to the statute’s remedial nature and emphasized the need for the CLA to protect lower-level claimants in the construction pyramid: Sunview Doors Ltd. v. Academy Doors & Windows Ltd., 2010 ONCA 198. Consequently, the Court held that the words “all amounts related to the improvement owed to them by the contractor” in s. 8(2) should be interpreted liberally. Therefore, the Court held the interest owing under the contract is part of the trust fund created by s. 8(1) and falls within the restrictions on the permissible use of those trust funds contemplated by s. 8(2).

The Court distinguished between lien rights and trust funds. The Court identified that the interest owed constituted a trust, which serves to protect the interests of subcontractors and suppliers by protecting funds that are owed to, or have been received by, the contractor. CLA s. 14(2) expressly states that interest is not part of a lien claim but this exclusion is absent in s. 8. Thus, the appellants can include interest from the trust fund provisions but not within its lien claim. It should be noted that s. 8(1) only provides for a single trust fund for the subcontractors.

(3) No.

The above analysis is not affected by Webdensco’s lien assigned to the respondents during the proceeding. If the respondent used monies impressed with a trust in favour of the subcontractors, Webdensco’s claim to the trust funds would be gone, leaving the appellants with the right to claim against the trust funds. The respondents did not acquire any right to claim against those trust funds. The appellant raised two challenges to the Court and both were rejected.

First, the appellant’s argument that the application of s.11 was a new issue was rejected: Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130. The Divisional Court was asked a specific question that involved the interpretation of the CLA where the court was obliged to consider any relevant section of the statute.

Second, the appellant argued that the contractor was afforded all its rights as a lien claimant, including the right to receive payment of Webdensco’s pro-rata share from the trust funds. At the Divisional Court, the appellant’s argument that the respondent had separate trust funds for each subcontractor was rejected with an interpretation of s. 11 of the CLA. The appellant did not ask, at any time, for leave to file evidence of the source of the funds. Thus, the appellant cannot complain about a denial of the right to file evidence that it did not request. The appellant bore the evidentiary burden as it argued the respondent fell within s. 11 of the CLA. Given the lack of submitted evidence on this issue, the Divisional Court was entitled to assume that the respondents had used trust funds to pay Webdensco.


Avedian v. Enbridge Gas Distribution Inc. (Enbridge Gas Distribution), 2021 ONCA 361

[Lauwers, Miller and Nordheimer JJ.A.]

Counsel:

C. Carter, for the appellants

C. Sefton, for the respondent, Enbridge Inc.

Keywords: Torts, Negligence, Duty of Care, Proximity, Corporations, Subsidiaries, Piercing Corporate Veil, Civil Procedure, Partial Summary Judgment, Consolidated Practice Direction for Civil Actions, Applications, Motions and Procedural Matters in the Toronto Region, s. 69, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, Vedanta Resources PLC v. Lungowe, [2019] UKSC 20, AAA v. Unilever PLC, [2018] EWCA Civ. 1532

facts:

The appellant owned a 251-unit apartment building in Toronto. On September 14, 2010, a fire and explosion caused extensive damage to the building. Earlier that day, three men changed gas regulators outside the building and an investigation determined that the explosion and fire were caused by improper installation of the regulators. The meters outside the building were property of Enbridge Gas Inc., a subsidiary of Enbridge Inc. Enbridge Gas Inc. had contracted with Lakeside Gas Services to service the regulators. Lakeside had subcontracted to Alpha Delta Heating Contractor Inc. and Dey. Dey and Alpha Delta had, in turn, retained Bishop and TQB Heating and Air Conditioning.

In 2012, the appellants commenced an action against the four defendants, including the respondent. Among other claims, the appellants pleaded that Enbridge Inc. owed the appellants a duty of care and was negligent for failing to provide proper supervision and training to its subsidiary, contractors, and subcontractors, causing the fire and explosion.

In March 2018, the action was set down for a ten-week trial to commence in February 2020. In August 2019 – roughly seven years after the action was commenced and less than six months before the trial was to begin – the respondent, Enbridge Inc., brought a motion for partial summary judgment seeking the dismissal of the action against them. The respondent argued that it exercised no control over its subsidiary Enbridge Gas Inc. and owed no duty of care to the plaintiffs.

In September 2019, the motion judge vacated the February 2020 trial date. In April 2020, after hearing the summary judgment motion in writing, the motion judge dismissed the action as against Enbridge Inc. on the grounds that the respondent was a separate corporate entity and there was no basis to lift the corporate veil between Enbridge Inc. and the other corporate entities. In a separate endorsement, the motion judge ordered $175,000 in costs against the appellants.

issues:

(1) Did the motion judge err by hearing the motion for summary judgement “on the eve of trial”?

(2) Did the motion judge err in not finding a genuine issue requiring trial with respect to the duty of care that Enbridge. Inc. allegedly owed the appellants?

(3) Did the motion judge err in awarding costs on a substantial indemnity basis?

holding:

Appeal allowed.

reasoning:

(1) Yes.

The “Consolidated Practice Direction for Civil Actions, Applications, Motions and Procedural Matters in the Toronto Region”, (July 1, 2015), s. 69, in force at the time, provided that “[o]nce trial dates are set, there will be no adjournments of the trial except in extenuating and exceptional circumstances.” There were no extenuating or exceptional circumstances present in this case. When the motion was brought, Enbridge Inc. was in the same circumstance and possessed the same knowledge as at the time of the March 2018 pre-trial conference, which is when it had an opportunity to advise the court or the appellants that it intended to seek partial summary judgment. In the result, the motion for partial summary judgment added unnecessary delay, expense, and the squandering of available court time, serving as a sufficient basis to allow this appeal.

(2) Yes.

The motion judge briefly analyzed whether there was sufficient evidence to raise a triable issue as to whether Enbridge Inc.’s degree of control over Enbridge Gas Inc. could create a duty of care. The motion judge erred in not analyzing whether there was sufficient evidence to raise a triable issue that Enbridge Inc. sufficiently intervened in the management of Enbridge Gas Inc. to have incurred a common law duty of care to the appellants. The appellants presented sufficient evidence on the motion, including Enbridge Inc.’s seven public statements and policies, to raise a triable issue as to whether Enbridge Inc. had undertaken an obligation to the customers of its subsidiaries to set standards for its subsidiaries and enforce them. Whether the policies are evidence of Enbridge Inc.’s control over Enbridge Gas Inc., and whether the policies can generate legal obligations to the appellants, is a novel question of proximity and is a genuine issue requiring trial.

(3) Yes.

The order for partial summary judgment and the award of costs were set aside.


Uribe v. Tsandelis , 2021 ONCA 377

[Benotto, Miller and Trotter JJ.A]

Counsel:

D. Cruz and C. Wadsworth, for the appellant

D. Fife and M.A. Cameron, for the respondent

Keywords: Torts, Negligence, Medical Malpractice, Standard of Care, Causation, Apportionment of Fault, Civil Procedure, Juries, Evidence, Witnesses, Questioning by Judge, Rules of Civil Procedure, Rule 52.08(1), Donleavy v. Ultramar Ltd., 2019 ONCA 687, Stilwell v. World Kitchens, 2014 ONCA 770, Salter v. Hirst, 2011 ONCA 609, Chippewas of Mnjikaning First Nation v. Ontario, 2010 ONCA 47, R. v. Danial, 2016 ONCA 822

facts:

The appellant doctor treated the respondent during her pregnancy and delivered her baby. The respondent’s pregnancy was considered low risk. During delivery, complications arose regarding the baby’s heart rate decelerating. A nurse phoned the appellant about the complications, who was in his office five minutes away. The nurse applied standard procedures and the baby’s condition stabilized. The appellant did not immediately return to the hospital and asked to be notified if the condition worsened. Ten minutes after the first call, a nurse informed the appellant that the baby’s heart right decelerated again. Five minutes later, the baby was deprived of oxygen. It was clear an emergency caesarean section was required. The appellant arrived thirteen minutes later and by the time the baby was delivered, he had been without oxygen for too long. Consequently, the baby suffers from severe cerebral palsy and other serious medical conditions. Based on expert evidence, brain injury was certain to have occurred after the second deceleration and the restriction of oxygen. The experts agreed that if the baby had been delivered during the appropriate window following the deceleration, or before the obstruction of the airway, the severe damage would not have occurred. The timing of the delivery was critical.

At trial, a jury found that the appellant was negligent and breached the standard of care resulting in damage. The jury found that the appellant breached the Society of Obstetrician and Gynecologist of Canada (“SOGC”) Guidelines which require health professionals to prepare for delivery when there is a single abnormal intrapartum electronic fetal monitor tracing of more than three but less than ten minutes. Thus, the jury found the appellant was required to prepare for delivery after the first heart rate deceleration. Regarding damages, the jury found the appellant 32% liable for the loss. Following the verdict, the appellant brought a motion under Rule 52.08(1) of the Rules of Civil Procedure, requesting the trial judge not enter the judgment and either dismiss the action or order a new trial. The motion was dismissed.

issues:

(1) Did the jury apply the but for test for causation?

(2) Was the jury’s verdict unreasonable?

(3) Did the trial judge err by dismissing the Rule 52.08(1) motion?

(4) Were the trial judge’s questions to a witness improper?

holding:

Appeal dismissed.

reasoning:

(1) Yes.

The jury’s answer to causation did not mean the instructions for the but for test were not followed or that the wrong causation test was used. The but for test for causation outlined in Clements v Clements, 2012 SCC 32, requires the plaintiff to show on a balance of probabilities that “but for” the defendant’s negligent act, the injury would not have occurred. The defendant’s negligence must be necessary to bring about the injury. The Court held that the jury’s answer involving the words “contributed to” does not mean the material contribution test was applied. The answer provided by the jury was consistent with the but for test. As the jury was instructed to consider contributory negligence due to multiple tortfeasors, it is understandable that the language “contributed to” would arise. The jury’s finding that the appellant should have returned to the hospital after the first call was a logical and available conclusion from the evidence.

(2) No.

The Court rejected the appellant’s argument that there was no evidence that the baby would have been delivered earlier and therefore the jury’s verdict was unreasonable. The jury was allowed to draw reasonable inferences from the accepted evidence, including the statements of expert witnesses: Stilwell v. World Kitchens, 2014 ONCA 770. However, in this case, there was direct evidence from which the jury could conclude that had the appellant not breached the standard of care, the damage would not have occurred. If the appellant prepared for delivery, as per SOGC Guidelines, an operating room would have been secured and the baby delivered before the damage occurred.

(3) No.

The trial judge was correct in determining the motion should be dismissed. For a trial judge to call a new jury or dismiss an action, Rule 52.08 requires the jury to either disagree, fail to answer all questions, or fail to make findings on which judgment can be granted. The Court held that the jury did none of these things and the trial judge thoroughly and correctly addressed the appellant’s submissions.

(4) No.

A trial judge is entitled to question witnesses for clarification by intervening in the testimony of witnesses: Chippewas of Mnjikaning First Nation v. Ontario, 2010 ONCA 47. The trial judge correctly followed the protocol in R. v. Danial, 2016 ONCA 822 by waiting for the conclusion of witness’ testimony, asking questions for clarification on narrow issues, and by allowing further re-examination. The Court rejected the appellant’s argument that the trial judge’s questioning introduced a new theory of liability that the appellant failed to prepare for delivery after the first phone call. This was a clear issue brought up by evidence at trial and there was nothing unfair or improper about the trial judge’s questions.


Lesko v. Lesko , 2021 ONCA 369

[Strathy C.J.O., Brown and Miller JJ.A.]

Counsel:

G. Joseph and S. Kirby, for the appellant

P. Callahan, for the respondent

Keywords: Family Law, Property, Unjust Enrichment, Constructive Trust, Joint Family Venture, Equalization of Net Family Property, Spousal Support, Income for Support Purposes, Family Law Act, R.S.O. 1990, c. F.3, Federal Child Support Guidelines, S.O.R./97-175, Family Law Rules, O. Reg. 114/99, Hickey v. Hickey, [1999] 2 S.C.R. 518, Kerr v. Baranow, 2011 SCC 10, Martin v. Sansome, 2014 ONCA 14, McNamee v. McNamee, 2011 ONCA 533, Punzo v. Punzo, 2016 ONCA 957, Mason v. Mason, 2016 ONCA 725, Decaen v. Decaen, 2013 ONCA 218, Gray v. ICBC, 2010 BCCA 459

facts:

The appellant, Mr. D. L (‘D’). and the respondent, Ms. K. L (‘K’) started living together in September 1998 and were married on August 23, 2003. They have two children. The couple legally separated on December 31, 2014, but continued to live together in the matrimonial home until it was sold in November 2015.

In June 1998, D purchased Taplow – a “fixer upper” property. At the time, K and D were dating for over a year and decided to move in together into Taplow when it became habitable. K did not contribute financially to the purchase of Taplow nor was her name put on title. However, beginning in August 1998, she contributed $500 a month to cover the couple’s expenses, which included a monthly mortgage payment of $831.35. Taplow was gutted and extensive renovations were made to the property between 1998 and the property’s sale in 2007. D completed most of the physical renovations, while K took charge of housekeeping and home maintenance so that D could devote his free time to the renovations. When Taplow was sold in 2007, D and K put the sale proceeds into their new home, another property in need of renovation, and their names were put on title as co-owners.

By the time of the trial, the parties had settled many issues. The remaining issues were adjudicated by the trial judge, which resulted in his Divorce Order. D appealed three parts of that order.

At trial, K and D both sought reimbursement for family-related expenses, most of which were incurred between the date of their legal separation and the sale of the matrimonial home. K sought reimbursement for her share of expenses charged to the family Visa card after separation relating to home maintenance, medical, family vacation, children’s activities, and interest charges. The trial judge granted this claim. D sought reimbursement for half of the expenses he incurred in respect to the family home from January 1, 2015 until November 2015. The trial judge disposed of this claim on the grounds that it was not advanced in his Answer.

issues:

(1) Did the trial judge err in finding that the respondent established a claim for unjust enrichment?

(2) Did the trial judge err in using the appellant’s most recent year’s income in the amount of $208,000.00 for support calculation purposes?

(3) Did the trial judge err in dismissing D’s claim for post-separation expense reimbursement requests?

holding:

Appeal dismissed.

reasoning:

(1) No.

The respondent successfully established a claim for unjust enrichment and the extent of her interest was proportionate to her contribution.

The Court did not accept D’s argument that the parties were in a landlord and tenant relationship which entitled D to retain the benefits conferred by K. The Court concluded that based on the evidence, K and D moved into a barely livable property and equally contributed to the renovations, which is not analogous to a landlord-tenant relationship.

The Court did not accept D’s second argument that even if there was unjust enrichment, the trial judge should have considered whether the FLA’s equalization scheme remedied the unjust enrichment. While the equalization scheme will likely resolve most unjust enrichment claims resulting from a marriage, a claim that one party was entitled to an interest in a property existing at the date of marriage based on unjust enrichment arising prior to marriage requires analysis under the common law framework outlined in Kerr v. Baranow, 2011 SCC 10. Consequently, the trial judge was not required to consider K’s entitlements that would arise post-marriage under the FLA when considering her unjust enrichment claim based on events occurring before and in respect of an asset existing at the date of marriage.

The court rejected D’s argument that the mutual conferral of benefits that occurred during the pre-marriage stage of the relationship amounted to a juristic reason for his enrichment and K’s deprivation. The evidence showed that the parties arranged their affairs to acquire “fixer-uppers”, renovate them, and then sell them for profit, with both parties expecting to benefit from their mutual efforts.

The trial judge’s finding that K was entitled to deduct 50% of the net value of the Taplow property on the date of marriage for purposes of calculating her net family property was a reasonably fair and equitable remedy. Unlike the FLA, which presumes that couples are entitled to an equal share of net family property accumulated during marriage, there is no presumption that a finding of unjust enrichment entitles a claimant to a half interest in the property. The extent of the claimant’s interest must be proportionate to their contributions: Kerr. It was clear from the evidence that prior to their marriage K and D were engaged in the joint project of renovating the Taplow for their mutual benefit. Furthermore, the trial judge’s finding was supported by the evidence that D applied the full proceeds from the sale of Taplow to acquire the Valleyview Court property and added K as a co-owner on title, without any separate financial contribution. Although the purchase took place four years after the date of marriage, it stands as a powerful recognition by D of K’s equal contribution to the success of the Taplow renovation, which enabled them to upgrade to a higher-end house.

(2) No.

D argued that his income for support purposes should be $132,300, based on the average of his income in 2015, 2016, and 2017 and that his 2017 income was an outlier. The trial judge had the option to average D’s income according to Section 17(1) of the Federal Child Support Guidelines, S.O.R./97-175, but was under no obligation to do so. Further, the evidence suggested that the averaging of D’s annual income would significantly understate his actual income. If the 2017 income level was in fact an outlier and D’s income materially declined in the future, he could bring the appropriate motion to vary support on the basis of a material change in circumstances.

(3) No.

There was no error in principle, or unreasonableness in the result, of the trial judge exercising his discretion to deny D his eleventh hour, three-year old claim for expenses incurred in 2015. D did not plead a reimbursement claim in his November 2016 Answer and only brought it forward a few weeks before the trial in April of 2019. D’s claim for reimbursement of post-separation expenses marked a departure from the parties’ “status quo” approach between the date of legal separation and the sale of the house, an approach adopted in the interests of their two young children. The expenses for which D was seeking reimbursement benefitted all members of the family, including himself, as he continued to live in the family home until it was sold. Further, D’s position that he only decided to claim reimbursement when he realized that K was seeking retroactive child and spousal support is unfounded. K’s September 2016 Application clearly stated she was seeking retroactive support.


Paletta International Corporation v. Liberty Freezers London Ltd , 2021 ONCA 383

[Roberts, Zarnett and Sossin JJ.A]

Counsel:

K.G. Ferreira and A.A. Moten, for the appellant

R.C. Dunford and S. Wouters, for the respondent

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Canada Square Corp. v. Versafood Services Ltd. (1982), 130 D.L.R. (3d) 205 (Ont. C.A.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Building Code Act, S.O. 1992, c. 23, Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165, Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 220 D.L.R. (4th) 611 (Ont. C.A.), Martin v. Goldfarb (1998), 41 O.R. (3d) 161 (C.A.)

facts:

The parties entered into an agreement to lease in October 2010 (“the lease”). The respondent landlord undertook to carry out a retrofit of the premises to accommodate the appellant tenant’s business. The parties agreed the lease would commence when the retrofit was substantially completed in accordance with the Canadian Food Inspection Agency (“CFIA”) requirements. The appellant informed its clients that it would begin offering services April 2011 upon the premises being substantially completed.

As a result of the retrofit not being completed by April 2011, the appellant was forced to cancel contracts with clients. In October 2011, the appellant put the respondent on notice that it required a firm commencement date and a copy of the final form of the lease. In January 2012, the respondent proposed a final form of the lease (the “proposed lease”), which referenced new terms not contained in the lease which required the appellant pay additional rent to reimburse the respondent for new pallets they had installed in the premises. Additionally, the proposed lease introduced substantial new terms and deleted terms that provided for six months of free rent.

In March 2012, the appellant advised the respondent it would not be taking possession of the premises because the respondent failed to meet the April 2011 deadline and had repudiated the lease by attempting to introduce new terms into the proposed lease. The respondent sued the appellant for breach of contract and engaged Colliers Macaulay Nicholls Inc. (“Colliers”) to list the property. In February 2013, as part of corporate restructuring, the respondent transferred the premises to 2362302 Ontario Inc. (“236”) to hold the title in trust for the respondent. In April 2013, 236 leased the premises to Eastern Meat Solution Inc. (“EMSI”) with a commencement date of June 1, 2013. EMSI was not required to pay rent until September 1, 2013.

The trial judge found that the lease was valid and the appellant was in breach for failure to take possession. Relying on evidence of the project’s lead engineer, the trial judge found the lease commenced April 2012 as the substantial completion had been achieved by then. The appeal arose out of the parties’ dispute over the interpretation of the lease and its commencement date.

issues:

(1) Did the trial judge err by concluding that the terms of the lease were certain and that the respondent had not introduced new terms?

(2) Did the trial judge err in finding that “substantial completion” provided an ascertainable commencement date and that the parties did not agree to a definite commencement date?

(3) Did the trial judge err in his interpretation of “substantial completion” under the lease and in his conclusion that the retrofit was substantially complete in April 2012?

(4) Did the trial judge err in his determination of damages?

holding:

Appeal allowed in part.

reasoning:

(1) No.

The Court held that the introduction of new terms in the proposed lease did not render the lease uncertain. The Court agreed with the trial judge that the lease was valid, and the proposed lease was not entered into. Following the signing of the lease, the respondent had installed different racking due to the parties’ discussions and the terms of the proposed lease were related to this interaction. The Court found that the pallet racking provisions in the proposed lease did not alter any other terms in the proposed lease or create uncertainty in the terms of the lease.

(2) No.

The Court agreed with the trial judge that the lease was silent with respect to a definite substantial completion date and that it would be unreasonable to infer one. The Court found that the text of the lease tied the commencement date to the “substantial completion” of the respondent’s retrofit of the premises. There were no express provisions stipulating a “Final Commencement Date” and the lease did not define nor give any additional context to the term “substantial completion.” Furthermore, the Court found that the parties had not agreed otherwise on a specific date for completion of the retrofit or that the respondent made any related representations. The appellant simply assumed the premises would be ready by April 2011.

The Court rejected the appellant’s argument that if there was no fixed or implied commencement date, the trial judge erred concluding that the term “substantial completion” was certain. The Court held that it was reasonable for the trial judge to conclude that “substantial completion” could be tied to the “Landlord’s work” as set out in the lease. This stipulation provided in the lease meant that the terms regarding the substantially completion of the “Landlord’s work” was ascertainable. A term of a lease is not uncertain just because the parties define commencement in relation to a contingent future event: Canada Square Corp. v. Versafood Services Ltd. (1982), 130 D.L.R. (3d) 205 (Ont. C.A.). The trial judge was correct in finding the lease was substantially clear and the appellants never agreed to an April 2011 commencement date. Therefore, the appellant breached the lease by refusing to take possession.

(3) Yes.

The Court found that the trial judge erred when he concluded that the “Landlord’s work” was substantially complete in April 2012. The Court held that the premise renovations were substantially completed in August 2013 and that the trial judge made a palpable and overriding error in his application of the lease to the facts. The trial judge misapprehended the evidence as to when “substantial completion of the Landlord’s work” took place by conflating the “substantial completion” of the premises with “substantial completion” of the work in relation to CFIA requirements as stipulated in the lease. The Court held that even if the premises were ready for occupancy, there was no evidence the premises satisfied CFIA requirements.

The Court held that the lease commenced when the “Landlord’s work” was substantially complete which required the installation of features set out in the lease, and that these features be installed in accordance with CFIA regulations and specifications. There was no evidence the work was done to CFIA standards as of April 2012. The Court held that the parties did not contract for a “lease condition precedent” based on CFIA registration, only that the Landlord’s work be completed “in accordance” with CFIA regulations and specifications. The CFIA compliance was a standard the “Landlord’s work” was required to conform to, not a term or item of the lease. The Court held that CFIA registration went beyond what was necessary to achieve substantial completion. As the premises was CFIA registered in August 2013 and this was the only evidence at trial to indicate compliance with CFIA requirements, the Court held that the lease commenced at the date of registration as the registration indicated the retrofit was “substantially completed.”

(4) Yes.

The Court held that the trial judge’s error regarding the substantial completion date required a new assessment of damages. The “Final Commencement Date” of the lease began in August 2013 when the premises were substantially complete. As the appellants were not required to pay rent for six months following the commencement date and EMSI began paying rent during this time, there was no basis for the respondent’s loss in rental income and the damages were set aside. Additionally, the Court set aside the damages for rent differential between the lease with the appellant and the new lease with EMSI, and realty taxes, utility fees, maintenance fees and the 15% administrative fee for nonpayment from April 2012 to June 2013.

Furthermore, the Court held that the respondent had no claim for damages suffered by a separate corporate entity, even a subsidiary: Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 220 D.L.R. (4th) 611 (Ont. C.A.). The respondent did not meet its burden to prove its damages resulting from the settlement with Colliers as there was a lack of cogent evidence so the related damages were set aside by the Court: Martin v. Goldfarb (1998), 41 O.R. (3d) 161 (C.A.).

Regarding the forfeiture of the appellant’s deposit, the parties agreed to deduct the deposit from any damages payable by the defendant, and the Court held that the deposit plus any accumulated interest be deducted from the damages.


Valoris for children and adults of Prescott-Russell v. KR , 2021 ONCA 366

[Rouleau, Benotto and Roberts JJ.A.]

Counsel:

G. Beaulieu, for the appellant KR

S. Langlois, for the respondent Valoris for children and adults of Prescott-Russell

E. Dupuis, for the respondent AC

Keywords: Family Law, Custody and Access, Supervised Visitation, Civil Procedure, Orders, Enforcement, Contempt, Child, Youth and Family Services Act, 2017, ss. 87(8), (9), and 142(3), Carey v. Laiken, 2015 SCC 17, Services for children and adults of Prescott-Russell c. NG (2006), 271 DLR (4th) 750, TG Industries v. Williams, 2001 NSCA 105, Hefkey v. Hefkey, 2013 ONCA 44, Ruffolo v. David, 2019 ONCA 385, Culligan Canada Ltd. v. Fettes, 2010 SKCA 151, Telus Communications Inc. v. Cherubin, [2005] OJ No. 5534 (CS), 884772 Ontario Ltd. (cob Team Consultants) v. SHL Systemhouse Inc. (1993), Jaskhs Enterprises Inc. v. Indus Corp., [2004] OJ No. 4062, Bell ExpressVu Limited Partnership v. Torroni, 2009 ONCA 85, Chong v. Donnelly, 2019 ONCA 799

facts:

The appellant appeals a contempt of court order of October 14, 2020, which was made because of a failure to comply with a court order regarding visitation rights. On June 9, 2020, the appellant mother did not bring her child to a meeting meant to be a visitation with the child’s father, supervised by the respondent, a child health care centre. On June 16, the respondent filed a motion for contempt, but when supervised visits resumed for the following four weeks the contempt motion was dropped.

On July 8, 2020, the respondent explained to the appellant that supervision would be gradually reduced, and visitation would begin to take place at the father’s residence. The appellant disagreed and indicated that unless the visits continued to occur at the respondent’s child health care center, she would not send the child. The visits resumed at the respondent’s location and the respondent re-initiated the proceedings to find the appellant in contempt of court. The initial Court Order gave the respondent the discretion to determine when the supervision of visitation would end and the motion judge at the contempt hearing found that the appellant acted deliberately in maintaining that the child would not have unsupervised visits, refusing to support the respondent’s discretion. The appellant was found in contempt and appealed that Order

issues:

(1) Was the appellant in contempt of court?

holding:

Appeal allowed.

reasoning:

(1) No.

Three criteria must be met to find contempt of court; these criteria were not met here and the motion for contempt of court was dismissed.

The three criteria for contempt of court are: the order must state clearly and unequivocally what should or should not be done, the party alleged to have violated the order must have acknowledge of its existence, and the party who disobeys the order must do so willfully and deliberately. All three elements must be established beyond a reasonable doubt.

In the context of a family dispute, the court must also consider the best interests of the child when exercising its discretion with respect to contempt orders. The Order was not sufficiently clear to support a finding of contempt of court and the evidence did not establish beyond a reasonable doubt that the appellant acted willfully and deliberately in violation of the order. Therefore, two of the three criteria were not met.

For there to be contempt of court, the order should clearly specify the behaviour that must or must not be done, with any ambiguity in the order being resolved in favour of the person charged with contempt. Because the order granted the respondent “discretion to withdraw supervision if it no longer considers it necessary”, the order in this case was unclear. It did not impose an obligation on the appellant to support the plan to gradually move towards unsupervised visits, and the record did not support the conclusion that supervised visitation was no longer necessary. Further, nothing in the motion judge’s decision suggested that the court considered options other than a declaration of contempt of court that may be in the best interests of the child.


SHORT CIVIL DECISIONS

Grist v TruGrp Inc., 2021 ONCA 374

[Lauwers, Miller and Nordheimer JJ.A.]

Counsel:

D. Bell and K. Ellins, for the appellants

D. Buntsma, for the respondents

Keywords: Torts, Defamation, Anti-SLAPP, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1(8), Veneruzzo v. Storey, 2018 ONCA 688

8573123 Canada Inc. (Elias Restaurant) v. Keele Sheppard Plaza Inc., 2021 ONCA 371

[Strathy C.J.O., Feldman and Sossin, JJ.A]

Counsel:

B. Salsberg and B. Bussin, for the appellants

M. Miguna, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Options to Renew, Duty of Good Faith, Remedies, Relief from Forfeiture, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98

AA v. BB, 2021 ONCA 384

[Lauwers, Brown, Roberts JJ.A]

Counsel:

AA, acting in person

BB, acting in person

CC, acting in person

Keywords: Torts, Intentional Infliction of Emotional Distress, Conspiracy, Defamation, Libel, Slander, Family Law, Crown Wardship, Costs

Nagpal v. IBM Canada Ltd., 2021 ONCA 391

[Doherty, Pepall and Thorburn, JJ.A]

Counsel:

J. Dolman and A. Reid, for the appellants

M. N. Freeman, for the respondent

Keywords: Costs


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.