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Good afternoon.

Following are this week’s summaries of the civil decisions of the Ontario Court of Appeal for the week of January 10, 2022.

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In Capital Sewer Servicing Inc. v. Crosslinx Transit Solutions Constructors, a contract interpretation case, the Court held that a promise to insure against a certain risk does not, as a matter of law, lead to the conclusion that the party that undertook to insure against said risk agreed to be responsible for any damages should the risk ensue. The allocation of risk is to be determined upon a review of all relevant contractual language and the factual matrix to determine the intent of the parties in allocating risk.

In Idea Notion Development Inc. v. CTO Boost Inc., 2022 ONCA 14, the Court dismissed an appeal from a summary judgment enforcing a settlement.

I would like to remind our readers to continue to consult Civil Procedure & Practice in Ontario (CPPO). Now into its second year since initial publication and having been recently updated, the CPPO is a free online resource jointly published by the University of Windsor and CanLII. The CPPO was written by a team of 135 leading litigators and experts in Ontario civil procedure, led by Professor Noel Semple of Windsor Law School. I had the privileged of co-writing two chapters to CPPO dealing with Rules 54 and 55 (Directing a Reference and Procedure on a Reference).

CPPO will serve as a guide to Ontario’s Rules of Civil Procedure, Courts of Justice Act, and Limitations Act, and will be accessible not only to practitioners, but to members of the public. It contains not only the text of all these rules and statutory provisions, but also commentary and annotations to all the relevant case law applying and interpreting each rule and section. To access Civil Procedure & Practice in Ontario, please click here, and make sure to bookmark the site for easy access.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Capital Sewer Servicing Inc. v. Crosslinx Transit Solutions Constructors, 2022 ONCA 10

Keywords: Contracts, Insurance, Interpretation, Agnew-Surpass v. Cummer-Yonge, [1976] 2 S.C.R. 221, T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749, Ross Southward Tire v. Pyrotech Products, [1976] 2 S.C.R. 35, Madison Developments Ltd. v. Plan Electric Co. (1997), 36 O.R. (3d) 80 (C.A.), Royal Host G.P. Inc. v. 1842259 Ontario Ltd., 2018 ONCA 467, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, G.R. Hall, Canadian Contractual Interpretation Law, 4th ed. (Markham, Ont.: LexisNexis, 2020)

Idea Notion Development Inc. v. CTO Boost Inc., 2022 ONCA 14

Keywords: Breach of Contract, Debtor-Creditor, Civil Procedure, Summary Judgment, Settlements, Enforcement , Evidence on Motions, Affidavits, Without Prejudice Settlement Discussions, Rules of Civil Procedure, Rule 39.02, Union Carbide v. Bombardier Inc., 2014 SCC 35

Short Civil Decisions

Davidoff v. Paderewski Society Home (Niagara), 2022 ONCA 18

Keywords: Civil Procedure, Costs

Kam v. Canadian Broadcasting Corporation, 2022 ONCA 13

Keywords: Torts, Defamation, Defences, Responsible Communication, Civil Procedure, Anti-SLAPP, Costs, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Grant v. Torstar, 2009 SCC 61

Meridian C C Intl Inc. v. 2745206 Ontario Inc., 2022 ONCA 12

Keywords: Contracts, Real Property, Commercial Leases, Interpretation, Termination, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Fuller v. Aphria Inc., 2020 ONCA 403, Resolute FP Canada Inc. v. Ontario (Attorney General), 2019 SCC 60, Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, Kinglip Holdings Inc. v. Novak Graphics Inc., [2000] O.J. No. 3723 (S.C.)

Ho v. Ontario, 2022 ONCA 11

Keywords: Labour and Employment, Workplace Harassment, Vicarious Liability, Charter Breaches

Amatuzio v. 650 Atwater Avenue Ltd., 2022 ONCA 9

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Condominiums, Tarion Warranty, Occupancy Permit, Damages, Building Code Act, Building Code, s. 1.3.3.4 of Part C

UL Lawyers Professional Corporation v. Notay, 2022 ONCA 8

Keywords: Torts, MVA, Negligence, Breach of Fiduciary Duty, Contracts, Solicitor and Client, Solicitor’s Lien, Solicitor’s Charging Order, Civil Procedure, Costs, Bilek v. Salter Estate, 2009 CanLII 58582 (ONSC)

Camsal Inc. v. Penner International Inc., 2022 ONCA 20

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Rights of First Refusal, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Gallant v. 556614 Ontario Inc., 2022 ONCA 27

Keywords: Contracts, Interpretation, Real Property, Mortgages, Guarantees

Drungas v. Hamilton (City), 2022 ONCA 16

Keywords: Civil Procedure, Procedural and Natural Justice, Reasonable Apprehension of Bias, Costs, Accessibility for Ontarians with Disabilities Act, 2005, S.O. 2005, c.11


CIVIL DECISIONS

Capital Sewer Servicing Inc. v. Crosslinx Transit Solutions Constructors, 2022 ONCA 10

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:

I. M. Mair and R. V. Andal, for the appellant

D. A. Schwartz, A. Visheau, and A. Soutter, for the respondent

Keywords: Contracts, Construction, Liability Insurance, Interpretation, Allocation of Risk, Agnew-Surpass v. Cummer-Yonge, [1976] 2 S.C.R. 221, T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749, Ross Southward Tire v. Pyrotech Products, [1976] 2 S.C.R. 35, Madison Developments Ltd. v. Plan Electric Co. (1997), 36 O.R. (3d) 80 (C.A.), Royal Host G.P. Inc. v. 1842259 Ontario Ltd., 2018 ONCA 467, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, G.R. Hall, Canadian Contractual Interpretation Law, 4th ed. (Markham, Ont.: LexisNexis, 2020)

facts:

Crosslinx Transit Solutions General Partnership (“Project Co.”) had an agreement (the “Project Agreement”) with Metrolinx and other government agencies to complete work on the Eglinton Crosstown Light Rail Transit Project. Project Co. also contracted with its subsidiary, Crosslinx, to carryout various projects relating to the construction of the Crosstown rail line (the “Construction Contract”). Two years later, Crosslinx entered into an agreement with the appellant (“Capital”) to do work relating to the sewer system near the Avenue Road Station (the “Subcontract”).

Under the Construction Contract, Project Co. undertook to obtain and maintain Primary Wrap-Up Insurance Coverage which included Crosslinx and Capital as named insureds. The Primary Wrap-Up Insurance provided coverage for property damage arising from the project and payable by any named insured.

Under the Subcontract, the parties agreed it was their mutual intent that Crosslinx not incur for its own account without recourse to Capital for any obligation or liability under or in relation to the Subcontract work. The Subcontract also incorporated the terms and conditions of the Construction Contract, subject to changes necessary to give full effect to the intent of the parties. In the case of a dispute between terms, the Subcontract was to prevail. Further, Capital was required to indemnify and hold Crosslinx harmless from all claims and related costs arising out of the performance, non-performance or breach of the Subcontract.

The appellant (Capital) and the respondent (Crosslinx) were both sued by property owners who alleged they had suffered property damage as a result of their negligence.

Crosslinx claimed that under the terms of the Subcontract with Capital, Capital had a duty to indemnify and save Crosslinx harmless from the damages, legal fees and other costs associated with the claims made by the property owners. Capital denied any such obligation and maintained that Crosslinx had assumed the risk of the harm claimed by the property owners when Crosslinx undertook to insure the appellant against such claims.

Both parties brought applications seeking a judicial interpretation of the relevant provisions of their contract, and Crosslinx prevailed. Capital appealed from the application judge’s decision.

issues:

(1) Does an assumption of the risk follow, as a matter of law, from a covenant to insure against that risk?

(2) Did the application judge fail to consider the terms of the Primary Wrap-Up insurance incorporated into the Subcontract?

(3) Did the application judge err in concluding that Capital’s obligation to “hold harmless” Crosslinx included a duty to defend Crosslinx against the claims made by the property owners?

holding:

Appeal dismissed.

reasoning:

(1) No.

Capital, relying on a line of authority from the Supreme Court of Canada and the Ontario Court of Appeal, argued that a covenant to insure against a certain peril constitutes an assumption of the risk of harm or damage caused by that peril. Accordingly, since Project Co. and Crosslinx were obliged to provide Wrap-Up Liability Insurance under the Construction Contract, and that insurance was intended to protect Subcontractors against the risk of property damage claims like those made in this case, Capital submitted Crosslinx had assumed responsibility for any damage caused by that peril.

The Court noted that in many, if not most circumstances, a promise to insure against a certain risk will lead to the logical conclusion that the party that undertook to insure against the risk had agreed to be responsible for any damages should the risk ensue. However, that conclusion did not reflect a free-standing legal principal.

Rather, the Court held the correct approach to the interpretation of insurance covenants was articulated by G.R. Hall in Canadian Contractual Interpretation Law. Specifically, the correct approach is to interpret each contract containing a covenant to insure based upon its own wording. If the contractual language indicates that the covenant is to insure, not to act as an allocation of risk precluding liability for the event subject to the covenant, the text will prevail and the covenant will not have that effect.

The application judge correctly held the effect of the insurance covenant depended on the objective intention of the parties to be determined by an examination of the contract as a whole. The Court held the application judge correctly applied the law.

(2) No.

Capital argued the application judge’s interpretation of the Subcontract gave no meaning to the Primary Wrap-Up Insurance provision incorporated into the Subcontract, amounting to an error of law.

The Court held a reading of the application judge’s reasons did not support Capital’s argument. Specifically, the application judge referred to all relevant provisions of the various contracts and appreciated the terms of the Primary Wrap-Up Insurance covenant and its qualified incorporation into the terms of the Subcontract. The application judge’s assessment engaged questions of mixed fact and law, and the Court held his assessment was reasonable and therefore owed deference.

(3) No.

Capital submitted the Wrap-Up insurance provision incorporated into the Subcontract required that both Crosslinx and Capital be defended under the Primary Wrap-Up insurance policy. Further, Capital submitted that the indemnity provision in the Subcontract also extended to claims made by Crosslinx, and that it would not make sense to speak of a duty to defend in respect of claims brought by Crosslinx.

The Court rejected Capital’s first argument, holding it was essentially a recycling of Capital’s submission that the terms of the Primary Wrap-Up Insurance provision should circumscribe the scope of the indemnity clause. The Court noted the application judge correctly rejected that submission.

The Court also rejected Capital’s second argument because it ignored the central fact of the case. Specifically, the claims in issue were made by property owners against Crosslinx, and therefore the meaning of the “hold harmless” provision in the context of a claim bought by Crosslinx was not before the court.


Idea Notion Development Inc. v. CTO Boost Inc., 2022 ONCA 14

[Doherty, Tulloch and Thorburn JJ.A.]

Counsel:

J. R. Smith for the appellant, CTO Boost Inc.

A. Boghossian, for the respondent

Keywords: Breach of Contract, Debtor-Creditor, Civil Procedure, Summary Judgment, Settlements, Enforcement , Evidence on Motions, Affidavits, Without Prejudice Settlement Discussions, Rules of Civil Procedure, Rule 39.02, Union Carbide v. Bombardier Inc., 2014 SCC 35

facts:

The appellant, CTO, hired the respondent, Idea Notion, to provide software development services on various projects. The work began in August 2018 and was completed about 10 months later. Idea Notion submitted 5 invoices to CTO totalling about $219,000. CTO made no complaint about the quality of the work, or the invoice amounts. CTO provided Idea Notion with cheques, however many of the cheques returned NSF. There remained about $200,000 owing to Idea Notion, based on the invoices submitted to it to CTO.

Negotiations ensued over several months and on October 17, 2018, Idea Notion accepted CTO’s offer. Discussions concerning draft minutes of settlement ended with CTO advising Idea Notion that CTO would not proceed with the settlement, claiming that the invoices were fraudulent and inflated.

Idea Notion sued CTO on the original contract, later the claim was amended for the enforcement of the settlement entered into in October. Idea Notion successfully moved for summary judgment on the claim to enforce the settlement. CTO appealed the judgment and renewed many of the arguments it unsuccessfully advanced on the summary judgment motion.

issues:

(1) Did the motion judge err in allowing Idea Notion to tender “without prejudice” documents relating to the two rejected Offers to Settle made by CTO prior to October 19?

(2) Did the motion judge err in her analysis of the evidence presented on the summary judgment motion?

(3) Was there any basis upon which to give effect to CTO’s fraudulent misrepresentation defence?

(4) Should the motion judge have exercised her discretion and declined to enforce the settlement by way of summary judgment?

holding:

Appeal dismissed.

reasoning:

(1) No.

“Without prejudice” communications are admissible if disclosure is necessary to prove “the existence or scope of the settlement”. It was incumbent on Idea Notion to demonstrate the existence of the agreement to settle.

(2) No.

The motion judge was entitled to weigh the evidence offered by the parties and make assessments of the credibility and reliability of various aspects of that evidence. The motion judge’s observations with respect to that evidence were available on the record.

(3) No.

The motion judge properly identified the elements of the defence. The court was satisfied that the “without prejudice” documentation was admissible on the question of whether any misrepresentation by Idea Notion with respect to the bona fides of the invoices allegedly made during the negotiation had any impact on CTO’s decision to make the offer to settle.

(4) No.

There is a discretion to decline to enforce settlement agreements by way of summary judgment motions. If the enforcement of the agreement would be unreasonable, result in an injustice, or for some other good reason, not be in the interests of justice, the motion judge can decline to grant summary judgment on the agreement, even though on the evidence an agreement was reached. The motion judge’s finding is neither unreasonable, nor based on any legal error.


SHORT CIVIL DECISIONS

Davidoff v. Paderewski Society Home (Niagara), 2022 ONCA 18

[Lauwers, Paciocco and Thorburn JJ.A.]

Counsel:

Ae. D. and Aa. D., acting in person

K. Bailey, for the responding party Paderewski Society Home (Niagara)

M. Kestenberg, for the responding party R. G.

S. Crocco, for the responding party Niagara Regional Housing (NRH)

Keywords: Civil Procedure, Costs

Kam v. Canadian Broadcasting Corporation, 2022 ONCA 13

[Huscroft, Trotter and Coroza JJ.A.]

Counsel:

C. Stienburg, for the appellant

A. Gonsalves and C. Di Carlo, for the respondents

Keywords: Torts, Defamation, Defences, Responsible Communication, Civil Procedure, Anti-SLAPP, Costs, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Grant v. Torstar, 2009 SCC 61

Meridian C C Intl Inc. v. 2745206 Ontario Inc., 2022 ONCA 12

[Rouleau, van Rensburg and Roberts JJ.A.]

Counsel:

R. S. Choi and G. P. Rhodes, for the appellants

M. A. Katzman, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Interpretation, Termination, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Fuller v. Aphria Inc., 2020 ONCA 403, Resolute FP Canada Inc. v. Ontario (Attorney General), 2019 SCC 60, Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, Kinglip Holdings Inc. v. Novak Graphics Inc., [2000] O.J. No. 3723 (S.C.)

Ho v. Ontario, 2022 ONCA 11

[Rouleau, van Rensburg and Roberts JJ.A.]

Counsel:

W. H., acting in person

A. Mortimer, for the respondent

Keywords: Labour and Employment, Workplace Harassment, Vicarious Liability, Charter Breaches

Amatuzio v. 650 Atwater Avenue Ltd., 2022 ONCA 9

[Rouleau, van Rensburg and Roberts JJ.A.]

Counsel:

O. Hoque, Z. Moral and T. Haque, for the appellants

M. Simaan, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Condominiums, Tarion Warranty, Occupancy Permit, Damages, Building Code Act, Building Code, s. 1.3.3.4 of Part C

UL Lawyers Professional Corporation v. Notay, 2022 ONCA 8

[Doherty, Tulloch and Thorburn JJ.A.]

Counsel:

S. R. Uppal and V. Merja, for the appellant

J. Min, for the respondent

Keywords: Torts, MVA, Negligence, Breach of Fiduciary Duty, Contracts, Solicitor and Client, Solicitor’s Lien, Solicitor’s Charging Order, Civil Procedure, Costs, Bilek v. Salter Estate, 2009 CanLII 58582 (ONSC)

Camsal Inc. v. Penner International Inc., 2022 ONCA 20

[Huscroft, Trotter and Coroza JJ.A.]

Counsel:

M. McWilliams and T. Watson, for the appellant

J. Diacur and M. Bordin, for the respondent

M. Beeforth, for the interveners 213748 Ontario Inc. o/a Peace Transportation, 2232665 Ontario Inc. o/a D’Alliance Motors and Roadish Transport Inc.

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Rights of First Refusal, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Gallant v. 556614 Ontario Inc., 2022 ONCA 27

[Huscroft, Trotter and Coroza JJ.A.]

Counsel:

K. Sherkin, for the appellant

B. E. Jefferies, for the respondent Miranda Bailey

Keywords: Contracts, Interpretation, Real Property, Mortgages, Guarantees

Drungas v. Hamilton (City), 2022 ONCA 16

[Doherty, Tulloch and Thorburn JJ.A]

Counsel:

H. D., appearing in person

S. Juzkiw, for the appellant

D. F. Bartley, for the respondent 

Keywords: Civil Procedure, Procedural and Natural Justice, Reasonable Apprehension of Bias, Costs, Accessibility for Ontarians with Disabilities Act, 2005, S.O. 2005, c.11


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.