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Good afternoon.

Please find below our summaries of the civil decisions of the Ontario Court of Appeal for the week of August 23, 2021.

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There were three substantive civil decisions this week. Vu v. Canada (Attorney General) deals with discoverability and limitation periods related to the torts of false arrest and imprisonment. In dismissing the appeal, the Court confirmed the date of an arrest is merely a presumptive date for the commencement of the limitation period – a date that can be rebutted.

Herold Estate v. Canada (Attorney General), which deals with the ownership of islands near Peterborough, confirms that the normal principles of contractual interpretation set out in Sattva apply equally to the interpretation of title instruments, including ones almost two hundred years old.

Finally, Cosa Nova Fashions Ltd. v. The Midas Investment Corporation involved the denial of a right to appeal from approval and vesting orders under ss.193(c) and 193(e) of the BIA, in order to permit the completion of the sale of two properties by the Receiver pursuant to mortgages that have been in default since 2013.

Have a great weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Vu v. Canada (Attorney General), 2021 ONCA 574

Keywords: Torts, Crown Liability, False Arrest, False Imprisonment, Charter Claims, Civil Procedure, Limitation Periods, Discoverability, Appropriate Means, Summary Judgment, Costs, , Limitations Act, 2002, c. 24, Sched. B, ss. 4, 5, Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, s.32, Canadian Charter of Rights and Freedoms, Rules of Civil Procedure, Rule 20, Fournier-McGarry (Litigation guardian of) v. Ontario, 2013 ONSC 2581, Nicely v. Waterloo Regional Police Force, [1991] O.J. No. 460 (Ont. Div. Ct.), Mackenzie v. Martin, [1952] O.R. 849 (C.A.), at paras. 6-8, aff’d [1954] S.C.R. 361, Winmill v. Woodstock (Police Services Board), 2017 ONCA 962, 138 O.R. (3d) 641, Kolosov v. Lowe’s Companies Inc., 2016 ONCA 973, McHale v. Lewis, 2018 ONCA 1048, 144 O.R. (3d) 279, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47, 144 O.R. (3d) 385, Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (C.A.), Lawless v. Anderson, 2011 ONCA 102, Sosnowski v. MacEwen Petroleum Inc., 2019 ONCA 1005, Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada, 2012 ONCA 218

Herold Estate v. Canada (Attorney General) , 2021 ONCA 579

Keywords: Real Property, Legal Ownership, Contracts, Title Instruments, Interpretation, Ambiguity, Evidence, Admissibility, Extrinsic Evidence, Aboriginal Law, Treaty of Newcastle of 1818 (“Treaty 20”), Islands of the Trent Treaty of 1856 (“Treaty 78”), Beds of Navigable Waters Act, R.S.O. 1990, C. B-4, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29, McLean v. McLean, 2013 ONCA 788, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Robb v. Walker, 2015 BCCA 117, Gibbs v. Grand Bend (Village) (1995), 129 D.L.R. (4th) 449 (Ont. C.A.), Middlesex Centre (Municipality) v. MacMillan, 2016 ONCA 475, Neilson v. British Columbia (Attorney General), [1956] S.C.R. 819, McLeay et al v. City of Kelowna et al., 2004 BCSC 325, Clarke v. Canada (Attorney-General), [1930] S.C.R. 137, Becker v. Walgate, 2020 ONCA 491, R. v. Badger, [1996] 1 S.C.R. 771, Guerin v. The Queen, [1984] 2 S.C.R. 335, Grassy Narrows First Nation v. Ontario (Natural Resources), 2014 SCC 48

Cosa Nova Fashions Ltd. v. The Midas Investment Corporation , 2021 ONCA 581

Keywords: Bankruptcy and Insolvency, Administration of Estate, Sale of Assets, Civil Procedure, Contracts, Estates and Trusts, Property, First National Financial GP Corporation v. Golden Dragon HO 10 Inc., 2019 ONCA 873, Enroute Imports Inc., Re., 2016 ONCA 247, 35 C.B.R, 2403177 Ontario Inc. V. Bending Lake Iron Group Limited, 2016 ONCA 225, Downing Street Financial Inc. V. Harmony Village-Sheppard Inc., 2017 ONCA 611

Short Civil Decisions

R.F. v. J.W., 2021 ONCA 586

Keywords: Civil Procedure, Appeals, Costs

Politis v. Politis , 2021 ONCA 587

Keywords: Civil Procedure, Cross-Appeals, Costs

Bors v. Bors, 2021 ONCA 585

Keywords: Civil Procedure, Appeals, Costs

Zwaan v. Laframboise, 2021 ONCA 583

Keywords: Civil Procedure, Appeals, Interlocutory Orders, Costs


CIVIL DECISIONS

Vu v. Canada (Attorney General), 2021 ONCA 574

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

Counsel:

K. Dragaitis, A. Lipska, for the Appellant
S. Bharati, C. for the Respondent

Keywords: Torts, Crown Liability, False Arrest, False Imprisonment, Charter Claims, Civil Procedure, Limitation Periods, Discoverability, Appropriate Means, Summary Judgment, Costs, , Limitations Act, 2002, c. 24, Sched. B, ss. 4, 5, Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, s.32, Canadian Charter of Rights and Freedoms, Rules of Civil Procedure, Rule 20, Fournier-McGarry (Litigation guardian of) v. Ontario, 2013 ONSC 2581, Nicely v. Waterloo Regional Police Force, [1991] O.J. No. 460 (Ont. Div. Ct.), Mackenzie v. Martin, [1952] O.R. 849 (C.A.), at paras. 6-8, aff’d [1954] S.C.R. 361, Winmill v. Woodstock (Police Services Board), 2017 ONCA 962, 138 O.R. (3d) 641, Kolosov v. Lowe’s Companies Inc., 2016 ONCA 973, McHale v. Lewis, 2018 ONCA 1048, 144 O.R. (3d) 279, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47, 144 O.R. (3d) 385, Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (C.A.), Lawless v. Anderson, 2011 ONCA 102, Sosnowski v. MacEwen Petroleum Inc., 2019 ONCA 1005, Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada, 2012 ONCA 218

facts:

The respondent initiated a tort claim for false arrest, false imprisonment, and breaches of his rights under the Canadian Charter of Rights and Freedoms. The appellant (the Crown) brought a motion for summary judgment pursuant to Rule 20 of Rules of Civil Procedure on the basis that the respondent’s action was statute-barred pursuant to ss. 4 and 5 of the Limitations Act, 2002. The motion was dismissed and the Crown appealed.

The respondent’s legal status in Canada expired in 2001, and in 2007 Citizenship and Immigration Canada ordered his removal from the country, but he remained. In 2009, he was placed into immigration detention, and then subsequently released subject to conditions. In 2013, Canada Border Services Agency (CBSA) officers conducted a compliance check at the residence of his bondsperson. The respondent was not there. Initially, it was unclear whether the officers interacted with an English-speaking individual who claimed he did not live there or if they interacted with an individual, not fluent in English, who claimed she did not know if he lived there. Following this event, the respondent was detained for over 467 days. He was eventually released in Vietnam.

The respondent contested the forfeiture of his bonds in Federal Court. In the context of this litigation, a document titled “Notes to File” (“Notes”) was ultimately disclosed to the respondent. The “Notes” affirmed that on the day of the compliance check the officers had spoken to the individual who did not speak English.

issues:

(1) Did the motion judge err by failing to appreciate that the torts of false arrest and false imprisonment are automatically discoverable upon arrest?

(2) Did the motion judge err in law by failing to articulate and apply the correct test for discoverability?

(3) Did the motion judge err by making palpable and overriding errors of fact in arriving at the conclusion that the respondent had no claim to bring until the Notes were disclosed in June 2015?

(4) Did the motion judge err in failing to appreciate that the respondent did not act with due diligence?

(5) Did the motion judge err in concluding that it was appropriate within the meaning of s. 5(1)(a)(iv) and the circumstances of this case to delay bringing this action until after the Notes were disclosed?

holding:

Appeal dismissed.

reasoning:

(1) No.

The date of the arrest merely acts as the presumptive date for the commencement of the limitation period, but the respondent had effectively displaced this presumption under s. 5(2) of the Limitations Act, 2002.

(2) No.

The motion judge correctly articulated and applied the test for discoverability. As articulated by the motion judge, the question for the judge to consider is whether the plaintiff knows enough facts with which to bring forward the claim. Knowing enough facts translates into knowledge of the material facts that are necessary to make the claim. If this is established, the claim is discovered, and the limitation period begins to run.

(3) No.

The motion judge based his factual finding upon the respondent’s affidavit evidence explaining that, prior to receiving the Notes and learning that an interpreter had been used during the interaction at the bondspersons home, he thought that the CBSA had only made a mistake and misunderstood what had been communicated by the woman at the door. The motion judge fairly concluded that the respondent did not have sufficient facts on which to allege wrongdoing until he had received the Notes. It was only after receiving the Notes that the respondent could make the determination that the CBSA had actively misled the Immigration Division.

(4) No.

A plaintiff is required to act with due diligence when determining if they have a claim, but what is required depends on the specific circumstances of each case. In this case, not only was the respondent put in harsh circumstances with limited resources to investigate such matters, but he was also led to believe that his detention would be brief and his removal imminent. The latter would mean a lengthy judicial review would likely be trivial. Further, it is unclear how a review would have led to the disclosure of the important content of the Notes. The Court gave deference to these factual determinations.

(5) No.

In light of the answers above, it was not necessary to consider this issue.


Herold Estate v. Canada (Attorney General), 2021 ONCA 579

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

Counsel:

R. Janes, C. S. Mettalic, and A. Charette, for the appellants (C68393)/respondents (C68467) Curve Lake First Nation, Hiawatha First Nation and Mississaugas of Scugog Island First Nation
D. E. Luxat, for the appellant (C68467)/respondent (C68393) Attorney General of Canada
D. J. Brown, for the respondent (C68393/C68467) Estate of W. A. H.

Keywords: Real Property, Legal Ownership, Contracts, Title Instruments, Interpretation, Ambiguity, Evidence, Admissibility, Extrinsic Evidence, Aboriginal Law, Treaty of Newcastle of 1818 (“Treaty 20”), Islands of the Trent Treaty of 1856 (“Treaty 78”), Beds of Navigable Waters Act, R.S.O. 1990, C. B-4, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29, McLean v. McLean, 2013 ONCA 788, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Robb v. Walker, 2015 BCCA 117, Gibbs v. Grand Bend (Village) (1995), 129 D.L.R. (4th) 449 (Ont. C.A.), Middlesex Centre (Municipality) v. MacMillan, 2016 ONCA 475, Neilson v. British Columbia (Attorney General), [1956] S.C.R. 819, McLeay et al v. City of Kelowna et al., 2004 BCSC 325, Clarke v. Canada (Attorney-General), [1930] S.C.R. 137, Becker v. Walgate, 2020 ONCA 491, R. v. Badger, [1996] 1 S.C.R. 771, Guerin v. The Queen, [1984] 2 S.C.R. 335, Grassy Narrows First Nation v. Ontario (Natural Resources), 2014 SCC 48

facts:

In the decision under appeal, the application judge held that the respondent, the estate of W. A. H., owned island 27 by virtue of its ownership of Lot 35.

The application judge found that when Lot 35 was first surveyed in 1818, the land that became the Islands was a headland or peninsula connected to Lot 35’s mainland. In 1868, the Province of Ontario, by Letters Patent, granted Lot 35 to Alexander Rose, the Estate’s predecessor in title. Although he was not satisfied that in 1868 the Islands were still physically part of the mainland of Lot 35, and the Letters Patent made no reference to any islands, the application judge declined to determine the intention of the parties to the Letters Patent. Instead, he concluded that since Island 27 had, by 1855, separated from the mainland as a result of changes in water levels brought about by dams erected in the 1830s, it was included as a matter of law in the Letters Patent’s conveyance of Lot 35.

He further held that ownership of the Islands was not affected by treaties between the appellant First Nations (the “First Nations”) and the Crown made in 1818 and 1856. He interpreted the treaties, by which the First Nations had surrendered their title to a vast tract of land in what is now Central Ontario, to include a surrender of the property in issue in this litigation, giving the Crown the right to sell. Accordingly, as the Islands had been sold as part of Lot 35, when the Estate became the owner of Lot 35, it also became the owner of the Islands.

The First Nations and the Attorney General of Canada both appealed.

issues:

(1) Did the application judge err in finding that the Letters Patent included a conveyance of the Islands by the Province of Ontario to Mr. Rose (the Estate’s predecessor in title)?

(2) Is the application judge’s interpretation still supportable if the proper principles of interpretation are applied to the Letters Patent?

holding:

Appeal allowed.

reasoning:

(1) Yes.

The Court concluded that the application judge made three extricable errors of law, and therefore his conclusion regarding the Letters Patent was not entitled to deference.

Error 1:

First, the application judge failed to follow the fundamental principle of interpretation, which is to determine the meaning of the Letters Patent based on the parties’ intentions, objectively derived from the words they used in light of the factual matrix.

The Court concluded that the general principles of interpretation from Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, and Gibbs v. Grand Bend (Village) (1995), 129 D.L.R. (4th) 449 (Ont. C.A.) applied equally to the interpretation of an instrument in land. The Court determined that the “latent ambiguity” prerequisite to leading extrinsic evidence was made out in this case, and therefore, extrinsic evidence of the factual matrix or surrounding circumstances was admissible under the authority of both Gibbs and Sattva.

Although the application judge accepted extrinsic evidence, by failing to determine the objective intentions derived from the language of the Letters Patent in light of the surrounding circumstances, the application judge failed to consider and apply the correct principle of interpretation.

Error 2:

Second, the application judge erroneously relied on a legal principle about a sudden change in water levels fixing boundaries between different owners; in the circumstances, that principle was neither applicable nor determinative.

The Court concluded that the application judge’s application of the “flooding principle” was an error of law because the facts found by the application judge did not support the application of the flooding principle. Specifically, for the flooding principle to apply, water levels must rise quickly and not gradually. The application judge found that the raising of the water level in this case “was a lengthy and gradual process”. Therefore, the application of the flooding principle was inconsistent with his findings.

Error 3:

Third, the application judge failed to consider how the apparent disconnect between the obligations of the Crown concerning a sale of an island covered by Treaty 78, and the terms of the Letters Patent, bore on the question of whether the Province of Ontario intended to include the Islands in the Letters Patent.

The fact that the Crown had undertaken separate obligations in connection with Islands, and the nature of the obligations, should have shed light on whether a sale of Island 27 was objectively intended by the Province by Letters Patent that referred only to Lot 35. The fact that the Letters Patent neither identified Island 27 separately, although surrendered to the Crown in trust and on conditions, nor allocated any of the sale price to Island 27 (a seemingly necessary first step toward investing those proceeds for the benefit of the First Nations as the terms of Treaty 78 required) were facts that were objectively inconsistent with the inference that the reference to Lot 35 was intended to include Island 27.

(2) No.

By applying the proper principles of interpretation, the Court concluded it was the intention of the parties, objectively ascertained, that the Letters Patent conveyed the land up to the water’s edge in 1868, which did not physically include the Islands. Therefore, the application judge’s interpretation was not supportable.


Cosa Nova Fashions Ltd. v. The Midas Investment Corporation, 2021 ONCA 581

[Fairburn A.C.J.O]

Counsel:

C. Francis, for the moving party, Rosen Goldberg Inc.
K. Sherkin, for the responding party, J. K.
D. P. Prefer, for the applicants
M. G. McQuade, for the respondent
R. A. Klotz and T. Danson, for Auto World Imports

Keywords: Bankruptcy and Insolvency, Administration of Estate, Sale of Assets, Civil Procedure, Contracts, Estates and Trusts, Property, First National Financial GP Corporation v. Golden Dragon HO 10 Inc., 2019 ONCA 873, Enroute Imports Inc., Re., 2016 ONCA 247, 35 C.B.R, 2403177 Ontario Inc. V. Bending Lake Iron Group Limited, 2016 ONCA 225, Downing Street Financial Inc. V. Harmony Village-Sheppard Inc., 2017 ONCA 611

facts:

Rosen Goldberg Inc. (the “Receiver”) brought this urgent motion against the responding party, J. K., a non-party to the proceeding. Midas was the owner of both the Yonge Street and the Eastern Avenue properties (the “Properties”). J. K. worked for Midas as an in-house accountant. J.K. described himself as a “shareholder and guarantor” of Midas and its properties; he was involved in arranging the mortgages on the Properties. The mortgage has been in defaults since October 1, 2013, shortly after it was registered on March 4, 2013. This resulted in the court-appointed Receiver becoming involved in the sale of the Properties. This urgent motion arose from two orders made by the motion judge related to the sale of two of the Properties.

The motion judge granted two approval and vesting orders: (i) the August 5, 2021 order for the Eastern Avenue property; and (ii) the August 12, 2021 order for the Yonge Street property. The sale of the Yonge street property was set to close on Monday, August 23, 2021, and the sale of the Eastern avenue property is scheduled to close on Thursday, September 2, 2021.

J. K. filed two notices of appeal, intending to appeal both the approval and vesting orders. The Receiver, concerned that these attempted appeals could derail the closing of the Yonge Street Property and the Eastern Avenue Property brought an urgent motion seeking declaratory relief heard on Friday, August 20, 2021, to permit the sales to close.

issues:

(1) Does J. K. have a right to appeal the approval and vesting orders under s.193(c) of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (“BIA”)?

(2) If not, should J. K. be granted leave to appeal those orders under s.193(e) of the BIA?

holding:

Motion granted.

reasoning:

(1) No

In this case, there is no right of appeal. Given the “broad nature of the stay imposed by s.195 of the BIA”, the right to appeal under s.193(c) must be narrowly construed. The narrow construction is in accord with the needs of modern ‘real-time’ insolvency litigation. Therefore s.193(c) does not provide an appeal as of right to matters involving “(i) orders that are procedural in nature, (ii) orders that do not bring into play the value of the debtor’s property, or (iii) orders that do not result in a loss”. The operation of any one of these principles is fatal to an applicant’s right to appeal pursuant to s.193(c) of the BIA. 

Is the order procedural in nature? 

Section 139(c) of the BIA does not apply to decisions or orders that are procedural in nature, “including orders concerning the methods by which receivers or trustees realize an estate’s assets”. In relation to the appeal from the order relating to the Eastern Avenue property, J. K. is seeking to appeal as of right the method used by the Receiver to arrive at the agreement of purchase and sale of the Eastern Avenue Property.

Does the Order result in a loss?

Section 193(c) grants a right of appeal where “the property involved in the appeal exceeds in value ten thousand dollars”. Determining the “value” of the “property involved” is subject to significant constraints because any other approach would lead to an automatic right of appeal in virtually all BIA matters. There is no evidence in the record to support the suggestion that the value of the property involved in J. K.’s appeal exceeded $10,000.

(2) No

The Court had jurisdiction to determine this issue by way of a single judge of the Court pursuant to s.193(e) granting leave to appeal, which is a discretionary decision. In exercising that discretion, the court must take into account whether the issue: “(1) raises an issue of general importance to bankruptcy/insolvency practice or the administration of justice, and is one this court should address; (2) is prima facie meritorious; and (3) would not unduly hinder the progress of bankruptcy/insolvency proceedings”. There is no issue of importance to bankruptcy and insolvency practice, the case is about arrears of mortgages. Granting the appeal would hinder the progress of the proceeding.


SHORT CIVIL DECISIONS

R.F. v. J.W., 2021 ONCA 586

[Juriansz, van Rensburg and Sossin JJ.A.]

Counsel:

K. Nathens and D. Duong, for the appellant
K. Hughes and D. Willer, for the respondent

Keywords: Civil Procedure, Appeals, Costs

Politis v. Politis, 2021 ONCA 587

[Tulloch, Nordheimer and Jamal* JJ.A.]

Counsel:

H.I. Fogelman and L. Daneman, for the appellant and respondent by way of cross-appeal
J.D. Singer, for the respondent and appellant by way of cross-appeal

Keywords: Civil Procedure, Cross-Appeals, Costs

Bors v. Bors, 2021 ONCA 585

[Feldman, van Rensburg and Sossin JJ.A.]

Counsel:

T.A. Frederick and G.E. Ichim, for the appellant
B. Ludmer, for the respondent
J.R.G. Cook and J. Schissler, for the appellant’s trial counsel

Keywords: Civil Procedure, Appeals, Costs

Zwaan v. Laframboise, 2021 ONCA 583

[Doherty, Huscroft, Roberts JJ.A.]

Counsel:

D. L. in person
R. N. Kostyniuk, Q.C., for the respondent

Keywords: Civil Procedure, Appeals, Interlocutory Orders, 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.