Jump To: Table of Contents | Civil Decisions | Short Civil Decisions

Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of October 3, 2022.

Continue Reading

In Johnson v. Johnson, 2022 ONCA 682, a daughter of a testator was left out of the will, and as a result, sought to challenge the will’s validity. The Court confirmed that there is a minimum evidentiary burden to require proof of a will in solemn form as set out in the framework in Neuberger v. York, 2016 ONCA 191. As set out in Neuberger “proving a will in solemn form requires the propounder of a will to prove, in open court upon notice to all parties having a financial interest in the estate, that the will was duly executed, the testator had testamentary capacity and that the testator had knowledge and approval of the contents of the will… The court will also address allegations of undue influence and suspicious circumstances” in the course of such a hearing. A court on a will challenge maintains discretion in the weighing the parties’ evidence. Ultimately, the Court saw no error in the application judge’s analysis or findings that the threshold for requiring the will to be proved in solemn form had not been met in this case.

1027410 Ontario Inc. v. 2384589 Ontario Limited involved an appeal over a compensatory award of the market value for converted chattels under a chattel mortgage, and the awarding of punitive damages. The appellant landlord’s argument that the respondent had abandoned ownership of the chattels subject to the mortgage was denied, as the argument had not been raised at trial, and the facts did not support the argument. The appellant’s argument regarding punitive damages was dismissed, as the trial judge’s award of punitive damages was entitled to deference.

Other topics included whether there was a cause of action against a property appraiser for the tort of negligent misrepresentation and vexatious litigants.

Wishing everyone a Happy Thanksgiving long weekend! Go Jays Go!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email
Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Mahendran v. 9660143 Canada Inc., 2022 ONCA 676

Keywords: Torts, Negligent Misrepresentation, Duty of Care, Proximity, Special Relationship, Civil Procedure, Third Party Claims, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, r. 21.01(1)(b), 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, McCreight v. Canada (Attorney General), 2013 ONCA 483, Queen v Cognos Inc., [1993] 1 S.C.R. 87, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, Barkley v. Tier 1 Capital Management Inc., 2018 ONSC 1956, aff’d 2019 ONCA 54

Johnson v. Johnson, 2022 ONCA 682

Keywords: Wills and Estates, Validity, Capacity, Suspicious Circumstances, Undue Influence, Civil Procedure, Proving Will, Evidence, Rebuttable Presumptions, Costs, Whether Payable out of Estate, Rules of Civil Procedure, Rules 57, 75, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131, Neuberger v. York, 2016 ONCA 191, Seepa v. Seepa, 2017 ONSC 5368, Lewis v. Lewis, 2019 ONCA 690, Vout v. Hay, [1995] 2 S.C.R. 876, Hryniak v. Mauldin, 2014 SCC 7, Salter v. Salter Estate (2009), 50 E.T.R. (3d) 227, McDougald Estate v. Gooderham (2005), 199 O.A.C. 203 (C.A.)

Bell v. Fishka, 2022 ONCA 683

Keywords: Family Law, Civil Procedure, Quashing Appeals, Failure to Comply with Costs Orders, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, r. 2.1, Family Law Rules, O. Reg. 114/ 99, r. 1(8), Simpson v. The Chartered Professional Accountants of Ontario, 2016 ONCA 806

LeBlanc v. Alghamdi, 2022 ONCA 687

Keywords: Torts, Assault and Battery, Civil Procedure, Stay of Proceedings, Vexatious Litigants, Courts of Justice Act, R.S.O. 1990, c. C.43 s. 140, Rules of Civil Procedure, r. 2.1, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, Lina Ahmed v. Ministry of the Attorney General, 2020 ONSC 7892, aff’d 2021 ONCA

1027410 Ontario Inc. v. 2384589 Ontario Limited, 2022 ONCA 688

Keywords: Torts, Conversion, Personal Property, Chattels, Chattel Mortgages, Damages, Punitive Damages, Civil Procedure, Appeals, New Issue on Appeal, Personal Property Security Act, R.S.O. 1990, c. P.10, s. 65(2), Kaiman v. Graham, 2009 ONCA 77, Sorbam Investments Ltd. v. Litwack, 2022 ONCA 551, Whiten v. Pilot Insurance Co., 2002 SCC 18, Armstrong v. Moore, 2020 ONCA 49, Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175, Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669, Pita Royale Inc. (Aroma Taste of the Middle East) v. Buckingham Properties Inc., 2019 ONCA 439

Short Civil Decisions

Hume v. 11534599 Canada Corp., 2022 ONCA 680

Keywords: Civil Procedure, Costs, Scale of Costs, Contractual Costs, Rules of Civil Procedure, r. 57.01(1), Bossé v. Mastercraft Group Inc., 123 D.L.R. (4th) 161, Chong & Dadd v. Kaur, 2013 ONSC 6252


CIVIL DECISIONS

Mahendran v. 9660143 Canada Inc., 2022 ONCA 676

[Zarnett, Coroza and Favreau JJ.A.]

Counsel:

S. Singh, acting in person and for the appellant 9660143 Canada Inc.

H. Book and W. McLennan, for the respondent

Keywords: Torts, Negligent Misrepresentation, Duty of Care, Proximity, Special Relationship, Civil Procedure, Third Party Claims, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, r. 21.01(1)(b), 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, McCreight v. Canada (Attorney General), 2013 ONCA 483, Queen v Cognos Inc., [1993] 1 S.C.R. 87, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, Barkley v. Tier 1 Capital Management Inc., 2018 ONSC 1956, aff’d 2019 ONCA 54

facts:

In the main action, the plaintiff, Mr. M, sued a number of defendants, including the appellants SS and 9660143 Canada Inc. (“966”), under the Construction Act, in relation to services and materials provided for a property owned by 966 (the “Property”). The appellants defended the main action, and brought a counterclaim against Mr. M, alleging that he was responsible for a real estate deal that failed to close between the appellants and Mr. M’s sister-in-law, Ms. S.

The appellants also brought a third-party claim against The Nationwide Groups Ltd. (“Nationwide”). Nationwide had obtained an appraisal for the Property for Ms. S’ lender, the Royal Bank of Canada (“RBC”). In the third-party claim, the appellants alleged that Nationwide’s appraisal undervalued the Property, which led to Ms. S’s refusal to close the transaction.

Nationwide brought a motion to strike the third-party claim on the basis that it did not disclose a cause of action. The motion judge granted the motion and dismissed the third-party claim on the grounds that the respondent did not owe the appellants a duty of care and the appellants did not plead that they relied on the respondent’s appraisal.

issues:

Did the motion judge err in finding that the respondent did not owe the appellant a duty of care?

holding:

Appeal dismissed.

reasoning:

No.

The Court found no error in the motion judge’s decision. The issue of whether a duty of care was owed is a question of law that can, in appropriate circumstances, be resolved on a pleadings motion. The Court agreed that, on the facts pleaded, it was plain and obvious that Nationwide did not owe the appellants a duty of care.

The Court noted that the motion judge correctly stated that on a motion to strike a claim under r. 21.01(1)(b) of the Rules, the court should only strike the claim if it is plain and obvious that there is no reasonable chance of success. The court is to read the claim generously and assume that the allegations in the claim are true, unless they are patently ridiculous or incapable of proof.

The Court also found that the motion judge had identified the correct legal test for negligent misrepresentation, which requires a plaintiff to show that (1) there is a “special relationship” between the person making the statement and the person hearing it; (2) it is reasonable for the person hearing the statement to rely on it; (3) the statement is untrue; (4) the person was careless in making the statement; and (5) the person who reasonably relied on the statement suffered damages.

The Court noted that the issue of whether Nationwide owed the appellants a duty of care turned on whether they were in a special relationship of proximity. Relying on Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, the Court held that in cases of pure economic loss arising from negligent misrepresentation or performance of a service, the two determinative factors for establishing a special relationship are the defendant’s undertaking and the plaintiff’s reliance. The Court concluded that the appellants and Nationwide were not in the type of special relationship described in Livent. The respondent was retained by RBC, which was Ms. S’ lender. The appraisal documents specified that they were only prepared for the benefit of RBC. Nationwide did not undertake to appraise the property for the appellants’ benefit nor did it invite the appellants to rely on the appraisal. In addition, the Court found that the appellants did not allege that they relied on the respondent’s appraisal.

The Court rejected the appellant’s arguments that Nationwide owed a duty of care to anyone to whom the appraisal may be shown and who may be expected to rely on it. The Court noted that this argument was contrary to the requirement that a special relationship be present. The Court also rejected the appellants’ argument that the claim disclosed a cause of action because Nationwide used improper comparator properties. The Court reiterated that because there was no duty of care owed to the appellants, the standard of care was irrelevant.


Johnson v. Johnson, 2022 ONCA 682

[Lauwers, Roberts and Miller JJ.A.]

Counsel:

J.E.S. Poyser and B. Gilmartin, for the appellant

J-P. Quintal and K. Quintal, for the respondent

H.J., in person

Keywords: Wills and Estates, Validity, Capacity, Suspicious Circumstances, Undue Influence, Civil Procedure, Proving Will, Evidence, Rebuttable Presumptions, Costs, Whether Payable out of Estate, Rules of Civil Procedure, Rules 57, 75, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131, Neuberger v. York, 2016 ONCA 191, Seepa v. Seepa, 2017 ONSC 5368, Lewis v. Lewis, 2019 ONCA 690, Vout v. Hay, [1995] 2 S.C.R. 876, Hryniak v. Mauldin, 2014 SCC 7, Salter v. Salter Estate (2009), 50 E.T.R. (3d) 227, McDougald Estate v. Gooderham (2005), 199 O.A.C. 203 (C.A.)

facts:

This appeal arose out of an estate dispute among N, J, and H, who are the three children of the late M. M died on August 23, 2020, at the age of 99, leaving a will that she executed on August 12, 2015 (“the 2015 Will”). In the 2015 Will, M’s estate of about $457,000 was divided between J and H. Nothing was left to N.
On March 4, 2021, a certificate of appointment of estate trustee with a will was issued to J, with respect to the 2015 Will.

On June 8, 2021, N commenced the underlying application under r. 75 of the Rules of Civil Procedure to have the 2015 Will proven in solemn form. She alleged that there was evidence to suggest that the 2015 Will was invalid because the circumstances surrounding its execution were highly suspicious and there were reasonable grounds to believe that her mother lacked capacity. Specifically, she highlighted her disinheritance under the 2015 Will as an inexplicable and marked change from the previous will executed by her mother in 2007, in which she treated her children equally. N sought an interim preservation order to prevent the distribution of her mother’s estate pending the disposition of her application, and the production of medical, financial, and legal documents relating to her mother.

The application judge, in applying the analytical framework in Neuberger v. York, determined that N had failed to meet the minimal evidentiary threshold necessary before the court would exercise its discretion to require proof of the 2015 Will in solemn form and expose the estate to expense and litigation. The application judge dismissed the application and ordered N to pay J’s all-inclusive costs. N appealed the dismissal of her application and sought leave to appeal the costs award.

issues:

(1) Did the application judge err in law by misapplying the Court’s directions in Neuberger and by dismissing the application in the absence of the medical, financial, and legal documentary production that she should have ordered and other evidence that should have been called?

(2) In applying the directions in Neuberger, did the application judge err in law by misevaluating the evidence in determining M’s capacity?

(3) Did the application judge err in not awarding N her costs of the application payable from the estate?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court reiterated that the correct approach that a court should follow is set out at para. 89 of Neuberger:

[A]n applicant or moving party under rule 75.06 must adduce, or point to, some evidence which, if accepted, would call into question the validity of the testamentary instrument that is being propounded. If the applicant or moving party fails in that regard or if the propounder of the testamentary instrument successfully answers the challenge, then the application or motion should be dismissed. If, on the other hand, the applicant or moving party adduces or points to evidence that calls into question the validity of the testamentary instrument which the propounder does not successfully answer, the court would generally order that the testamentary instrument be proved.

The Court determined that the application judge carefully reviewed and engaged in the limited weighing of the parties’ evidence that she was required to undertake and was entitled to her conclusions. She concluded that N’s argument that the will change was inexplicable and therefore suspicious did not hold. She accepted the respondents’ evidence that N’s own actions led to a serious and irreparable breach with her mother in 2014, well before the execution of the 2015 Will. She ultimately concluded that the totality of this evidence disclosed a rational and entirely understandable reason for M to have prepared a new will in August 2015 to remove N as a beneficiary.

(2) No.

The Court disagreed with N’s submission that the application judge fell into legal error in her consideration of capacity. In the Court’s view, N’s submission conflated the consideration of evidence respecting the issue of capacity, as required in the preliminary vetting of Neuberger approach, with a final determination of the issue of capacity for the purposes of determining testamentary validity were the application for proof in solemn form permitted to proceed. As Neuberger instructs, the application judge correctly analyzed the evidence to determine if N had provided some evidence that, if accepted, would call into question the validity of the 2015 Will, and if the respondents’ evidence successfully answered any challenge that arose as a result of N’s evidence.

To that end, the application judge focused on the key evidence respecting M’s capacity. She considered the evidence of the three siblings and the brief letter written by M’s doctor providing a dementia diagnosis for M’s financial advisor in respect to her financial accounts only. The doctor did not indicate she lacked capacity. Moreover, a mere diagnosis of dementia, without more, does not determine the question of capacity: Lewis v. Lewis. The application judge was entitled to reject N’s description of her mother’s abilities and instead to rely on the affidavit evidence of J and H that M remained capable and competent to manage her own affairs.

Significantly, the Court held that the application judge was entitled to look beyond the evidence of the siblings and prefer the evidence proffered by M’s solicitors regarding capacity. Without evidence to the contrary, it was reasonable in the circumstances to infer that M’s lawyer would have properly carried out his duties as a solicitor and would not have permitted M to execute the 2015 Will if he had any concern about her capacity or suspected undue influence.

The Court agreed with the guidance as to the sufficiency of evidence from Hryniak v. Mauldin, and held that the courts will be guided in making directions, as always, by the primary dictate to fashion a process that provides a fair and just resolution of the civil dispute. A fair and just resolution process is one that is developed to meet the goals of efficiency, affordability, and proportionality that underpin all civil cases as directed by Hryniak.

Finally, the application judge found there was no evidence of undue influence. Indeed, neither J nor H were in the city when their mother executed the 2015 Will. The onus was on N to meet the minimum evidentiary threshold with evidence to rebut the presumption that M had the requisite capacity and to show undue influence: Vout v. Hay. N failed to do so. The Court saw no error in the application judge’s analysis or her findings which were deeply rooted in the record and entitled to deference.

(3) No.

The Court found no error in the application judge’s discretionary decision not to award N her costs of the application payable from the estate. The Court cited Brown J.’s remarks in Salter v. Salter Estate: “Parties cannot treat the assets of an estate as a kind of ATM bank machine from which withdrawals automatically flow to fund their litigation.” The Court held that it is well established that estate litigation, like all civil litigation, is subject to the general civil litigation costs regime in accordance with s. 131 of the Courts of Justice Act, and r. 57 of the Rules of Civil Procedure. Exceptionally, costs are ordered to be paid out of the estate where public policy considerations permit it: McDougald Estate v. Gooderham.

The Court agreed that N’s application did not fall within a policy concern that justified payment of costs from an estate. Specifically, she did not accept that N had reasonable grounds to question M’s capacity or the administration of her estate.


Bell v. Fishka, 2022 ONCA 683

[Lauwers, Roberts and Miller JJ.A.]

Counsel:

M.B., acting in person

J. Teitel, for the moving party

Keywords: Family Law, Civil Procedure, Quashing Appeals, Failure to Comply with Costs Orders, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, r. 2.1, Family Law Rules, O. Reg. 114/ 99, r. 1(8), Simpson v. The Chartered Professional Accountants of Ontario, 2016 ONCA 806

facts:

The appellant and respondent have a 12-year-old child. The parties were never married or in a relationship. The child lives with the appellant. The parties have been involved for years in lengthy and bitterly contentious family law proceedings that have taken up much time, money and judicial resources in the Ontario Court of Justice, the Superior Court of Justice, the Divisional Court, and the Court of Appeal. The appellant has brought a myriad of unsuccessful proceedings and has been the subject of several costs orders that remain unpaid.

These orders included an order of Horkins J. of the Superior Court on August 5, 2021, requiring the appellant to pay costs no later than October 12, 2021 in the amount of $24,436.63 into trust as security for the respondent’s costs in relation to her appeals from orders made by the court. Horkins J.’s August 5, 2021 order provided that the appellant was barred from bringing any further motions or seeking any further relief until she complied with the orders, unless leave was granted by the court, and the respondent could bring a motion to dismiss the appeals.

On January 6, 2022, the appellant’s appeal from Horkins J.’s orders were dismissed by the Divisional Court. She failed to pay the required security, or the motion costs ordered in favour of the respondent. She brought a motion before Shore J. to obtain leave to continue with her appeals. The respondent brought a motion under r. 1(8) of the Family Law Rules, to dismiss her appeals on the basis of the appellant’s failure to comply with Horkins J.’s orders. By her Final Order of May 2, 2022, Shore J. dismissed the appellant’s appeals. The respondent has brought a motion under r. 2.1 of the Rules of Civil Procedure, and has submitted that the appeals ought to be dismissed as frivolous, vexatious and an abuse of process.

issues:

Should the respondent’s motion be granted, and the appellants appeals dismissed?

holding:

Motion granted.

reasoning:

Yes.

The Court held that the appellant’s appeals were clearly frivolous, vexatious and an abuse of process. The record demonstrated that the appellant had repeatedly litigated issues that had already been decided, engaged in abusive behaviour, and deliberately failed to comply with clear court orders. The appellant’s notices of appeal were identical, and failed to clearly set out any legally tenable error in Shore J.’s decision. The Court also noted that the notices of appeal failed to provide any legal justification for the appellant’s failure to comply with Horkins J.’s clear orders. They simply reiterated the appellant’s previous unsuccessful arguments as to why Horkins J.’s orders should be set aside.

The Court concluded that to allow the appellant to continue with her appeals would allow her to ignore the consequences of her breaches of numerous court orders, endlessly re-litigate issues, and continue to abuse the process of the court. It would also be grossly unfair to the respondent and their child, both of whom were entitled to finality.


LeBlanc v. Alghamdi, 2022 ONCA 687

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

Counsel:

L.A., acting in person

J.F. Lalonde, for the respondents

Keywords: Torts, Assault and Battery, Civil Procedure, Stay of Proceedings, Vexatious Litigants, Courts of Justice Act, R.S.O. 1990, c. C.43 s. 140, Rules of Civil Procedure, r. 2.1, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, Lina Ahmed v. Ministry of the Attorney General, 2020 ONSC 7892, aff’d 2021 ONCA

facts:

The appellant rented a short-term rental property from the respondents, GHL and CO and their son IL, through the Airbnb platform. The rental agreement provided for a 30-day notice period for termination; however, the appellant refused to leave after the respondents gave notice to terminate the agreement. After giving notice to enter, the respondents entered the property to inspect it and a confrontation resulted.

IL’s evidence was that the appellant pushed him against the stairs and cut her thumb to simulate an injury caused by another party. The appellant alleged that her home was broken into, that she was physically and sexually tortured by IL and the Ottawa Police (“OPS”), that those police officers were racist, and that she was left half-naked and bleeding.

The application judge found that the appellant was a vexatious litigant within the meaning of s. 140 of the Courts of Justice Act and discontinued the appellant’s action against the respondents, adding that she was prohibited from initiating or continuing any proceeding against the respondents without leave of a Judge of the Superior Court. The appellant sought to appeal the application judge’s order on the grounds that the application judge erred in granting the order requested by the respondent.

issues:

Did the application judge err by making the order she did under s. 140 of the CJA?

holding:

Appeal dismissed.

reasoning:

No.

The Court held that the application made pursuant to s. 140 was properly before the application judge and she had jurisdiction to rule on the matter. The Court was satisfied that the record from the court below amply supported the conclusion that the appellant conducted the proceedings against the respondents in a vexatious manner and further that the proceedings were the product of malice and pursued for improper or vexatious purposes. The Court stated that there was no apparent merit to any of the appeals that the appellant brought from procedural orders made in the proceedings.

The Court summarized that the appellant was a vexatious litigant as evidenced from the following: (1) the appellant commenced three separate actions arising out of the same issue before the Court; (2) the documents filed by the appellant were characterized by vitriol expressed towards anyone who does not agree with her; (3) the appellant relied on a video taken by IL during the incident arguing that the video did not show the appellant cutting herself which the Court noted was not entirely clear, however, the evidence was unhelpful to the appellant as the video did not show or support the allegations of being physically and sexually tortured; (4) the appellant had alleged broad conspiracies which seem utterly farfetched; (4) the appellant spat on the respondent at the courthouse; and (5) the appellant had not paid any of the orders for costs made against her.

The Court concluded that given the multiplicity of proceedings, the manner in which the appellant had pursued this litigation, the unsupported and farfetched claims, the evidence of malice and the unpaid costs, the order made by the application judge was well supported by the evidence before her.


1027410 Ontario Inc. v. 2384589 Ontario Limited, 2022 ONCA 688

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

Counsel:

P.J. Pape and C. Senese, for the appellant

J. Bozzo, for the respondent

Keywords: Torts, Conversion, Personal Property, Chattels, Chattel Mortgages, Damages, Punitive Damages, Civil Procedure, Appeals, New Issue on Appeal, Personal Property Security Act, R.S.O. 1990, c. P.10, s. 65(2), Kaiman v. Graham, 2009 ONCA 77, Sorbam Investments Ltd. v. Litwack, 2022 ONCA 551, Whiten v. Pilot Insurance Co., 2002 SCC 18, Armstrong v. Moore, 2020 ONCA 49, Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175, Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669, Pita Royale Inc. (Aroma Taste of the Middle East) v. Buckingham Properties Inc., 2019 ONCA 439

facts:

The appellant was the landlord of commercial premises where its tenant operated a sports bar and grill. The chattels used in the restaurant were subject to a chattel mortgage in favor of the respondent. In June 2015, there was a fire at the premises and the tenant abandoned the premises and the chattels. The appellant took possession of the premises and the chattels and then terminated the lease for non-payment of rent. The respondent asserted its rights as chattel mortgagee. Ultimately, the appellant disposed of some of the chattels and incorporated others into a restaurant business it opened in the same premises.

The respondent sued the appellant, claiming damages for conversion. The trial judge found the appellant had illegally converted the chattels and awarded the respondent damages of $215,000 plus pre-judgment interest of $10,033.33 and punitive damages of $25,000. The appellant sought to challenge the trial judge’s damages award for the compensatory damages based on the market value of the converted property, instead of the outstanding balance owed under the mortgage, and the punitive damages award.

issues:

(1) Did the trial judge err in awarding compensatory damages based on the market value of the converted property instead of on the outstanding balance owed under the chattel mortgage?

(2) Did the trial judge err in awarding $25,000 in punitive damages?

holding:

Appeal dismissed.

reasoning:

(1) No.

The appellant contended that the trial judge made a palpable and overriding error in failing to deal with the ownership interest it had acquired in the chattels once they were abandoned by the tenant, and that, in turn, the appropriate measure of damages was the amount owed under the chattel mortgage. The Court rejected this ground of appeal for two reasons. First, the argument was not advanced at trial, and the Court found it would be unfair to allow a new theory to be advanced on appeal. Second, the appellant’s argument could not succeed in any event, based on the findings of the trial judge, the evidence at trial, and the respondent’s rights under the chattel mortgage and the PPSA.

The Court held that in order to advance a new theory to support its defense, the appellant must demonstrate that all facts necessary to address the point were before the Court as fully as if the issue had been raised at trial. In the present case, the appellant failed to seek leave to raise a new issue, and upon review, the Court concluded that there was insufficient evidence that the argument put forward on appeal had been raised at first instance.

The Court noted that the central issue at trial, according to the closing submissions of the appellant’s counsel, was whether the chattels had been abandoned by the respondent. There was no argument that the appellant had become the owner of the chattels. In the absence of an ownership interest held by the appellant, the appropriate damage award on the facts established in this case was the fair market value of the chattels at the time of their conversion. Pursuant to both the terms of the chattel mortgage and s. 65(2) of the PPSA, the respondent was entitled to recover and retain the chattels upon the tenant’s default. A damage award equal to the full market value of the chattels therefore compensated the respondent for the goods it was entitled to retain. Thus, the Court held that the trial judge did not err by failing to address an argument that was not advanced before her, and it would be unfair for the Court at this stage to consider a new theory to reduce the damages that were awarded for the appellant’s conversion of the chattels.

(2) No.

The trial judge concluded that the appellant was liable for punitive damages after considering the factors identified by the Supreme Court in Whiten v. Pilot Insurance Co., 2002 SCC 18. She found that the respondent had asserted its rights over the chattels, provided proof of its entitlement to the chattels, and the appellant knew what it was doing was wrong in law. She described the appellant’s conduct as “entirely blameworthy”. The appellant argued in its factum that the trial judge’s finding that punitive damages were appropriate was underpinned by the same error that caused her to award the respondent the full value of the chattels: she did not appreciate that the appellant had an ownership interest in the chattels.

The Court held that, provided that there is no incorrect application of legal principles or misapprehension of relevant facts, a trial judge’s decision to award punitive damages and the quantum of punitive damages awarded will be accorded deference. As the Court rejected the argument that the trial judge erred in failing to recognize its ownership interest in the chattels, there was no basis for the appellant’s argument regarding punitive damages. Further, the Court found that compensatory damages alone would not have addressed the purpose of punitive damages, which was to punish the appellant for its misconduct.


SHORT CIVIL DECISIONS

Hume v. 11534599 Canada Corp., 2022 ONCA 680

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

Counsel:

A.H. Zweig, for the appellant (C69657) / responding party (M53390)

E. Peritz, for the respondents (C69657) / moving parties (M53390)

Keywords: Civil Procedure, Costs, Scale of Costs, Contractual Costs, Rules of Civil Procedure, r. 57.01(1), Bossé v. Mastercraft Group Inc., 123 D.L.R. (4th) 161, Chong & Dadd v. Kaur, 2013 ONSC 6252


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.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
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 over 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 over two decades of experience handling a wide variety of litigation matters. John assists clients with matters ranging from appeals, to injunctions, to corporate, partnership, breach of contract, construction, environmental contamination, product liability, debtor-creditor, insolvency and other business litigation. He also handles complex estates and matrimonial litigation involving disputes over property and businesses, as well as professional discipline and professional negligence matters for various types of professionals. In addition, John represents amateur sports organizations in contentious matters, and also advises them in matters of internal governance. John can be reached at 416-593-2953 or jpolyzogopoulos@blaney.com.