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Following are this week’s summaries of the Court of Appeal for Ontario for the week of March 13, 2023.

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In Poorkid Investments Inc. v. Ontario (Solicitor General), the Court considered the constitutional validity of s. 17 of the Crown Liability and Proceedings Act, 2019 (“CLPA”), which states that proceedings brought against the Crown that include a claim for misfeasance in public office or bad faith in the exercise of public duties or functions are deemed to be stayed, and leave must be obtained before proceeding with such claims. The Court found that the application judge erred in holding that s. 17 of the CLPA was unconstitutional because it created a barrier to accessing the superior courts. The Court concluded that s. 17 of the CLPA was a valid exercise of provincial lawmaking authority under s. 92(14) of the Constitution Act, 1867, and does not violate s. 96. Although s. 17 of the CLPA made it more difficult to bring proceedings against the Crown, the leave requirement and associated rules established by s. 17 did not affect the core jurisdiction of superior courts, much less infringe it.

In Ontario v. St. Paul Fire and Marine Insurance Company, the appellant, Ontario, appealed an application judge’s decision pertaining to the respondent’s refusal to defend claims against Ontario arising out of a proposed class action concerning persons who were arrested and detained for more than 24 hours prior to receiving a bail hearing. Ontario incurred costs of approximately $300,000 in its defence of the proposed class action before certification was denied. Ontario had two insurance policies with the respondent insurer over two relevant periods of time. The Court upheld the application judge’s finding that the damages claimed were not covered under the first policy, as they were not unexpected and arose out of intentional conduct by the insured. The Court found that the application judge erred in finding that the damages were not covered by the second policy, but in any event dismissed the appeal because the second policy only insured damages above $5,000,000.

In 778938 Ontario Limited v. EllisDon Corporation, the Court considered whether Ontario was the proper forum for the resolution of a claim that had been first brought in Nova Scotia. The Court ultimately found, under the doctrine of forum non conveniens, that Nova Scotia was the clearly more appropriate forum due to the risk of possible inconsistent findings on the same issues. The Court stayed the Ontario action until a determination was made in the Nova Scotia action.

Other topics covered this week included a family law dispute regarding equalization of net family property, the unlawful taking of possession of a mortgaged property by a mortgagee, and a child abduction case where the child was ordered to return to New York.

Wishing everyone a nice weekend.

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

Table of Contents

Civil Decisions

Poorkid Investments Inc. v. Ontario (Solicitor General), 2023 ONCA 172

Keywords: Torts, Crown Liability, Misfeasance in Public Office, Nonfeasance, Negligence, Nuisance, Constitutional Law, Judiciary, Rule of Law, Civil Procedure, Leave to Commence Proceeding Against Crown, Constitution Act, 1867 ss. 17, 92.(14) and 96,  Crown Liability and Proceedings Act, 2019, S.O. 2019 c. 7, Sch. 17, s.17(2), Comprehensive Ontario Police Services Act, 2019, S.O. 2019, c. 1, Proceedings Against the Crown Act, R.S.O. 1990, c. P.27., ss.17(2)-(7), Courts of Justice Act, R.S.O. 1990, c. C.43, s.140, Rules of Civil Procedure, rr. 2.1.01 and 2.1.02, Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3 S.C.R. 31, Reference re Residential Tenancies Act, [1981] 1 S.C.R. 714, at p. 728, Reference re Code of Civil Procedure (Que.), art. 35, 2021 SCC 27, MacMillan Bloedel Ltd. v. Simpson, [1995] 4 S.C.R. 725, Reference re Amendments to the Residential Tenancies Act (N.S.), [1996] 1 S.C.R. 186, R. v. J.M., 2021 ONCA 150, Re Manitoba Language Rights, [1985] 1 S.C.R. 721, Reference re Secession of Quebec, [1998] 2 S.C.R. 217, Toronto (City) v. Ontario (Attorney General), 2021 SCC 34, British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214, Quebec (Attorney General) v. 9147-0732 Québec Inc., 2020 SCC 32, The Inherent Jurisdiction of the Court (1970), 23 Curr. Legal Probs. 23, Kristen Rundle, Revisiting the Rule of Law (New York: Cambridge University Press, 2022), Frederick Schauer, Lon Fuller and the Rule of Law, (2020) University of Virginia School of Law Public Law and Legal Theory Paper Series 2020-46, John Tasioulas, The Rule of Law in Tasioulas, ed., The Cambridge Companion to the Philosophy of Law (Cambridge: Cambridge University Press, 2019), Brian Z. Tamanaha, The History and Elements of the Rule of Law (2012) Sing. J.L.S. 232, The Morality of Law, rev’d edn. (New Haven: Yale University Press, 1969), Natural Law and Natural Rights, 2nd ed. (Oxford: Oxford University Press, 2011), Jeremy Waldron, The Rule of Law as an Essentially Contested Concept (2021) NYU School of Law Public Law and Legal Theory Research Paper Series, Working Paper No. 21-15

Ontario v. St. Paul Fire and Marine Insurance Company, 2023 ONCA 173

Keywords: Torts, Crown Liability, Charter Breaches, Bail, Contracts, Insurance, Interpretation, Coverage, Commercial General Liability Insurance, Duty to Defend, Pleadings Rule, Extrinsic Evidence, Nullification Doctrine, Fortuity Principle, Civil Procedure, Class Proceedings, Canadian Charter of Rights and Freedoms, ss. 11(e), Criminal Code, R.S.C. 1985, c. C-46, s. 503(1), Monenco Ltd. v Commonwealth Insurance Co., 2001 SCC 49, Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Nichols v. American Home Assurance Co., [1990] 1 S.C.R. 801, Panasonic Eco Solutions Canada Inc. v. XL Speciality Insurance Company, 2021 ONCA 612, IT Haven Inc. v. Certain Underwriters at Lloyd’s, London, 2022 ONCA 71, Cabell v. The Personal Insurance Company, 2011 ONCA 105, (2011), Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, Liberty Mutual Insurance Co. v. Hollinger Inc., 236 D.L.R. (4th) 635 (Ont. C.A.), Ontario Society for the Prevention of Cruelty to Animals v. Sovereign General Insurance Company, 2015 ONCA 702, Craig Brown et al., Insurance Law in Canada, loose-leaf (Toronto: Thomson Reuters Canada Ltd., 2002), Gordon G. Hilliker, Liability Insurance Law in Canada, 7th ed. (Toronto: Butterworths, 2020)

Dieffenbacher v. Dieffenbacher IV, 2023 ONCA 189

Keywords: Family Law, Parenting, Relocation, Child Abduction, Best Interests of the Child, Civil Procedure, Appeals, Stay Pending Appeal,  Rules of Civil Procedure, r. 63.02, Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983 No. 35, Ellis v. Wentzell-Ellis, 2010 ONCA 347, Zafar v. Saiyid, 2017 ONCA 919, Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), Warren Woods Land Corp. v. 1636891 Ontario Inc., 2012 ONCA 12, International Corona Resources Ltd. v. LAC Minerals Ltd. (1986), 21 C.P.C. (2d) 252 (Ont. C.A.), Longley v. Canada (AG), 2007 ONCA 149, J.P.B. v. C.B., 2016 ONCA 996, Chafin v. Chafin (2012), 133 S.Ct. 1017, Office of the Children’s Lawyer v. Balev, 2018 SCC 16, RJR-MacDonald Inc. v. Canada (AG), [1994] 1 SCR 311

Cronier v. Cusack, 2023 ONCA 178

Keywords: Family Law, Equalization of Net Family Property, Civil Procedure, Financial Disclosure, Evidence, Admissibility, Privilege, Adverse Inferences, Family Law Rules, O.Reg., 114/99, rr. 2(2)-(4), Lesko v. Lesko, 2021 ONCA 369, Hickey v. Hickey, [1999] 2 S.C.R. 518, Sagl v. Sagl, 31 R.F.L. (4th) 405 (Ont. S.C.), Qaraan v. Qaraan, 2012 ONSC 6017, Cong v. Cong, 2007 CanLII 7994 (Ont. S.C.), Colucci v. Colucci, 2021 SCC 24

778938 Ontario Limited v. EllisDon Corporation, 2023 ONCA 182

Keywords: Contracts, Construction, Civil Procedure, Conflict of Laws, Jurisdiction Simplicitor, Real and Substantial Connection, Forum Non Conveniens, Appeals, Standard of Review, Lack of Reasons for Decision, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(1)(a), Earl v. McAllister, 2021 ONSC 4050 (Div. Ct.), Club Resorts Ltd. v. Van Breda, 2012 SCC 17, Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada, 2022 ONCA 862

Zapfe Holdings Inc. v. 1923159 Ontario Inc., 2023 ONCA 190

Keywords: Contracts, Real Property, Mortgages, Enforcement, Possession, Power of Sale, Hume v. 11534599 Canada Corp., 2022 ONCA 575

Short Civil Decisions

East Elgin Concrete Forming Limited v. 9001522 Canada Limited, 2023 ONCA 175

Keywords: Civil Procedure, Appeals, Jurisdiction, Construction Act, R.S.O. 1990, c. C.30, s. 71(1)

Gallen v. Sutherland, 2023 ONCA 170

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Rules of Civil Procedure, rr. 37.14, 59.06, Elguindy v. Elguindy, 2021 ONCA 708

Forest Hill Fine Homes Inc. v. Heartland Farm Mutual Insurance Co., 2023 ONCA 171

Keywords: Torts, Negligence, Contracts, Insurance, Interpretation, Coverage, Duty to Defend, Property Damage, Civil Procedure, Full Indemnity Costs, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Godonoaga v. Khatambakhsh (2000), 50 O.R. (3d) 417 (C.A.)

Palmer v. Ioannidis, 2023 ONCA 179

Keywords: Real Property, Gifts, Possessory Title, Adverse Possession, Torts, Trespass

Re/Max Realty Specialists Inc. v. 2452303 Ontario Inc., 2023 ONCA 186

Keywords: [KEYWORDS]

Chahal v. Caledon (Town), 2023 ONCA 188

Keywords: Real Property, Municipal Law, Land Use Planning, Legal Non-conforming Use, Evidence, Admissibility, Hearsay, Planning Act, R.S.O. 1990, c. P.13, s. 34(9)

Bowen v. JC Clark Ltd., 2023 ONCA 181

Keywords: Civil Procedure, Costs, Rules of Civil Procedure, rr. 37.14, 59.06, 61.16(6.1), Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 840, Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 512, Mullings v. Robertson, 2020 ONCA 369, Liu v. Qiu, 2022 ONCA 544

Sutton v. Sutton, 2023 ONCA 192

Keywords: Family Law, Spousal Support, Civil Procedure, Leave to Appeal to Supreme Court of Canada, Stay Pending Appeal, National or Public Importance, Supreme Court Act, R.S.C. 1985, c. S-26, s. 65.1, BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Livent Inc. v. Deloitte & Touche, 2016 ONCA 395, Iroquois Falls Power Corporation v. Ontario Electricity Financial Corporation, 2016 ONCA 616, Alectra Utilities Corp. v. Solar Power Network Inc., 2019 ONCA 332, Boston v. Boston, 2001 SCC 43, RJR-MacDonald Inc. v. Canada (AG), [1994] 1 S.C.R. 311

KLN Holdings Inc. v. Grant, 2023 ONCA 193

Keywords: Civil Procedure, Orders, Enforcement, Writs of Possession, Stay of Proceedings, Rules of Civil Procedure, r. 63.01, National Bank of Canada v. Guibord, 2021 ONCA 864, RJR-MacDonald Inc. v. Canada (AG), [1994] 1 S.C.R. 311, Pearl Hospitality Inc. v. Ceballos, 2020 ONCA 672, Berlianco Inc. v. Wee Rent It Ltd., [1999] O.J. No. 408]


CIVIL DECISIONS

Poorkid Investments Inc. v. Ontario (Solicitor General), 2023 ONCA 172

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

Counsel:

S.Z. Green and R. Cookson, for the appellants

W.P. Murray, for the respondents

Keywords: Torts, Crown Liability, Misfeasance in Public Office, Nonfeasance, Negligence, Nuisance, Constitutional Law, Judiciary, Rule of Law, Civil Procedure, Leave to Commence Proceeding Against Crown, Constitution Act, 1867 ss. 17, 92.(14) and 96,  Crown Liability and Proceedings Act, 2019, S.O. 2019 c. 7, Sch. 17, s.17(2), Comprehensive Ontario Police Services Act, 2019, S.O. 2019, c. 1, Proceedings Against the Crown Act, R.S.O. 1990, c. P.27., ss.17(2)-(7), Courts of Justice Act, R.S.O. 1990, c. C.43, s.140, Rules of Civil Procedure, rr. 2.1.01 and 2.1.02, Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3 S.C.R. 31, Reference re Residential Tenancies Act, [1981] 1 S.C.R. 714, at p. 728, Reference re Code of Civil Procedure (Que.), art. 35, 2021 SCC 27, MacMillan Bloedel Ltd. v. Simpson, [1995] 4 S.C.R. 725, Reference re Amendments to the Residential Tenancies Act (N.S.), [1996] 1 S.C.R. 186, R. v. J.M., 2021 ONCA 150, Re Manitoba Language Rights, [1985] 1 S.C.R. 721, Reference re Secession of Quebec, [1998] 2 S.C.R. 217, Toronto (City) v. Ontario (Attorney General), 2021 SCC 34, British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214, Quebec (Attorney General) v. 9147-0732 Québec Inc., 2020 SCC 32, The Inherent Jurisdiction of the Court (1970), 23 Curr. Legal Probs. 23, Kristen Rundle, Revisiting the Rule of Law (New York: Cambridge University Press, 2022), Frederick Schauer, Lon Fuller and the Rule of Law, (2020) University of Virginia School of Law Public Law and Legal Theory Paper Series 2020-46, John Tasioulas, The Rule of Law in Tasioulas, ed., The Cambridge Companion to the Philosophy of Law (Cambridge: Cambridge University Press, 2019), Brian Z. Tamanaha, The History and Elements of the Rule of Law (2012) Sing. J.L.S. 232, The Morality of Law, rev’d edn. (New Haven: Yale University Press, 1969), Natural Law and Natural Rights, 2nd ed. (Oxford: Oxford University Press, 2011), Jeremy Waldron, The Rule of Law as an Essentially Contested Concept (2021) NYU School of Law Public Law and Legal Theory Research Paper Series, Working Paper No. 21-15

facts:

The respondents, Poorkid Investments Inc., The Coach Pyramids Inc., and BH, were the named representative plaintiffs in a class action brought against the appellants, which included the Crown, the Solicitor General of Ontario, the Ontario Provincial Police (“OPP”) Commissioner, the OPP Chief Superintendent, and an Inspector of the OPP (collectively the “Crown”). They sought damages arising out of the OPP’s response to protests by Indigenous activists in Caledonia, Ontario and pleaded four grounds of liability: misfeasance in public office, nonfeasance, negligence, and nuisance. In essence, the respondents alleged that the appellants failed to carry out their legal duties.

Proceedings brought against the Crown or an officer or employee of the Crown that include a claim for misfeasance in public office or bad faith in the exercise of public duties or functions are deemed to be stayed by operation of s. 17 of the Crown Liability and Proceedings Act, 2019, S.O. 2019 c. 7, Sch. 17 (“CLPA”), and can proceed only with leave of the court. To obtain leave, a plaintiff had to establish that the proceeding was brought in good faith and that there was a reasonable possibility the claim will succeed.

The respondents brought an application seeking a declaration that s. 17 of the CLPA violated s. 96 of the Constitution Act, 1867 and was of no force or effect. The constitutionality of the screening process which included a detailed leave procedure was the question at the heart of this appeal.

The application judge found that the rule of law, which informed a proper interpretation of s. 96, required not simply access to the superior courts but meaningful access, which he described as “ensuring that a litigant’s claim is determined on its merits, including the right to present material evidence”.

Thus, the application judge concluded that s. 17 was unconstitutional because it established a barrier to “meaningful” access to the superior courts, while denying a realistic and effective means of overcoming that barrier by relieving the Crown from being subject to documentary and oral discovery.

The application judge went on to find that the remedies of reading in, reading down, or severance were not appropriate because it could not be assumed that the Legislature would have passed the tailored provision, and there was no basis to determine the specifics of a discovery mechanism. He concluded that the appropriate remedy was to issue a declaration that s. 17 is of no force or effect, leaving it to the Legislature to enact a new, constitutionally compliant provision should it wish to do so.

issue:

Did the application judge err in finding that s.17 violates s.96 of the Constitution Act, 1867?

holding:

Appeal allowed.

reasoning:

Yes.

The Court first held that the application judge erred at the outset of his analysis by characterizing s. 17 of the CLPA as establishing a “barrier” to accessing the superior courts. Nothing in s. 17 bars, denies, or otherwise prevents access to the superior courts and their core function of adjudicating disputes. The Court noted that s. 17 establishes a screening process – a procedure that allows the superior courts to screen out unmeritorious claims. The operation of the screening process was determined by the superior courts themselves: they determined whether or not a claim may proceed based on their interpretation and application of the criteria set out in s. 17. In other words, the superior courts continued to exercise their core jurisdiction – hearing and resolving disputes.

The Court then reasoned that there was no evidentiary basis to support the conclusion that prohibiting documentary and oral discovery in the screening process deprived individuals of access to the superior courts. The Court noted that while there was nothing inappropriate about citing academic legal scholarship and much to be gained when it comes to better understanding legal concepts that may be relevant to judicial reasoning, whether academic commentary or scholarship purports simply to describe the law or to explain it, it is not properly the subject of judicial notice – that is, it cannot be accepted as fact without proof.

The Court then held that the leave requirements did not infringe the core jurisdiction of the superior courts. Section 17 of the CLPA did not interfere with the constitutional role of the superior courts. That some – perhaps even many – claimants will be denied leave to bring proceedings as a result of the screening mechanism did not mean that the constitutional role of the superior courts had been impermissibly infringed. Claimants will be denied leave to bring proceedings only after they have had access to the superior courts and failed to satisfy the courts as to the strength of their case. Whether it is considered good or bad policy to screen particular tort claims against the Crown is irrelevant; so long as the legislation does not prevent the superior courts from exercising their core jurisdiction, it does not impermissibly infringe s. 96 of the Constitution Act, 1867.

In short, s. 96 immunized neither the substantive content of the law nor the procedure governing litigation against legislative reform: the Legislature may establish, amend, or repeal causes of action, and may establish various procedural requirements. Section 96 protects the core jurisdiction of the superior courts, but procedural requirements that must be met before particular claims may be brought cannot be equated with depriving the superior courts of the ability to hear disputes and so preventing them from fulfilling their constitutional role – especially given that the superior courts will determine whether those procedural requirements have been met.

Lastly, the Court held that Meaningful access to the court as described by the application judge was not an element of the rule of law. To the Court, it seemed reasonable that there should be “meaningful access to the court in the sense of ensuring that a litigant’s claim is determined on its merits, including the right to present material evidence”, but the application judge’s “meaningful access” concept was not required by the rule of law on that account, nor did it engage the aspect of the rule of law dealing with physical access to courts as set out in B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214.

The Court stated it was noteworthy that in British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49  (“Imperial Tobacco”), the Supreme Court rejected several “fair civil trial” features asserted as protected by the rule of law in upholding the constitutionality of British Columbia legislation that went much further than s. 17 of the CLPA: it authorized actions by the provincial government against tobacco product manufacturers for the recovery of health care expenses incurred by the government, changed evidentiary requirements, permitted the government to establish aggregate claims, reversed the burden of proof in several respects, and operated retrospectively. The legislation changed the general rules of civil litigation considerably, but, as the Supreme Court stated, there was no constitutional right to have one’s civil trial governed by customary rules of civil procedure and evidence: Imperial Tobacco, at para. 76. The Court held that this conclusion applied with equal force in this case.

The overarching result was that the rule of law does not support a decision that renders unconstitutional procedural rules properly made pursuant to s. 92(14) of the Constitution Act, 1867. On the contrary, both the Constitution and the rule of law required that s. 17 of the CLPA be given effect.


Ontario v. St. Paul Fire and Marine Insurance Company, 2023 ONCA 173

[Paciocco, George and Favreau JJ.A.]

Counsel:

C. Lui and N. Brankley, for the appellant

A.A. Evangelista, D. Elshourfa and A. Cole, for the respondent

Keywords: Torts, Crown Liability, Charter Breaches, Bail, Contracts, Insurance, Interpretation, Coverage, Commercial General Liability Insurance, Duty to Defend, Pleadings Rule, Extrinsic Evidence, Nullification Doctrine, Fortuity Principle, Civil Procedure, Class Proceedings, Canadian Charter of Rights and Freedoms, ss. 11(e), Criminal Code, R.S.C. 1985, c. C-46, s. 503(1), Monenco Ltd. v Commonwealth Insurance Co., 2001 SCC 49, Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Nichols v. American Home Assurance Co., [1990] 1 S.C.R. 801, Panasonic Eco Solutions Canada Inc. v. XL Speciality Insurance Company, 2021 ONCA 612, IT Haven Inc. v. Certain Underwriters at Lloyd’s, London, 2022 ONCA 71, Cabell v. The Personal Insurance Company, 2011 ONCA 105, (2011), Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, Liberty Mutual Insurance Co. v. Hollinger Inc., 236 D.L.R. (4th) 635 (Ont. C.A.), Ontario Society for the Prevention of Cruelty to Animals v. Sovereign General Insurance Company, 2015 ONCA 702, Craig Brown et al., Insurance Law in Canada, loose-leaf (Toronto: Thomson Reuters Canada Ltd., 2002), Gordon G. Hilliker, Liability Insurance Law in Canada, 7th ed. (Toronto: Butterworths, 2020)

facts:

This appeal arose out of an underlying action relating to a class action commenced against Ontario on behalf of persons who were arrested and then detained for more than 24 hours prior to receiving a bail hearing between January 1, 2000 and “the present” (June 29, 2017). Anticipating that it would have insurance coverage for the claims made in the underlying action, Ontario provided notice of the claim to St. Paul, which had issued two successive general liability commercial policies to Ontario during the period contemplated by the underlying action. The first policy ran from March 31, 1998 to March 31, 2003 and included coverage of $20,000,000 for each occurrence under the policy (the “First Policy”). The second policy ran from March 31, 2003 to March 31, 2005, under which Ontario was self-insured for the first $5,000,000 described in the Second Policy as the “Ultimate Net Loss”, while St. Paul provided insurance of $15,000,000 for each “occurrence” in “excess of the Ultimate Net Loss” (the “Second Policy”).

On May 23, 2019, a motion judge denied certification of the underlying class action. Ontario had expended roughly $300,000 worth of legal services defending the claim and, on September 27, 2019, Ontario instituted an application for a declaration that St. Paul, the respondent, had a duty to defend it in the underlying class action. On November 25, 2021, the application judge dismissed Ontario’s application, finding that St. Paul did not have a duty to defend under either the First Policy or the Second Policy.

The application judge found that Ontario engaged in intentional acts that caused harm, had knowledge of the harms that would flow from its intentional acts, and took no steps to address those harms. The application judge concluded that the claim in negligence was derivative in nature from the intentional acts Ontario was alleged to have engaged in. The application judge found that the First Policy included coverage for damages resulting from bodily injury and personal injury where damage was caused by “an accident or occurrence” that was neither expected nor intended by the insured. The claims fell under bodily or personal injury, but the application judge found that there was no duty to defend arising out of the First Policy because the harms were expected. With respect to the Second Policy, the application judge found no duty to defend, again because the harms were expected. In addition, even if a duty to defend was found, the Second Policy covered claims in excess of the ultimate net loss of $5,000,000 and Ontario had only incurred defence costs of approximately $300,000. Ontario appealed the application judge’s decision.

issues:
  1. Did the application judge fail to apply the possibility of coverage test?
  2. Did the application judge err in considering extrinsic evidence?
  3. Did the application judge err in identifying the true nature of the claim?
  4. Did the application judge err in finding the negligence claims to be derivative?
  5. Did the application judge err in failing to apply the nullification doctrine?
  6. Did the application judge err in interpreting the coverage for an Occurrence under the Second Policy?
  7. Did the application judge err in failing to apply the fortuity principle?
  8. Did the application judge err in concluding that the application was premature?
holding:

Appeal Dismissed.

reasoning:
  1. No.

The Court held that the application judge did not fail to apply the possibility of coverage test. The application judge expressly recognized that the duty to defend extends only to claims that could potentially trigger indemnity under the policy, in doing so the application judge was satisfied that there was no possibility of coverage.

  1. No.

The Court found that the application judge did not err in considering extrinsic evidence contrary to the pleadings rule as the extrinsic evidence considered fell under an exception to the pleadings rule. The pleadings rule holds that a court may look only to the provisions of the policy and to the pleadings in the underling action when determining whether an insurer has a duty to defend. The rule is intended to encourage expedition and to discourage factual findings that could prejudice the underlying action. However, there is an exception which permits courts to consider extrinsic evidence that is explicitly referred to in the pleadings in the underlying action. The Court found that the application judge’s consideration of reports critical of Ontario’s bail release system fell within the exception because they were referred to in the underlying action. Additionally, the Court found that the application judge referred to the reports without making factual findings and used this extrinsic evidence without violating the pleadings rule, and without creating any of the mischief the pleadings rule is intended to prevent.

  1. No.

The Court found that the application judge did not err in identifying the true nature of the claim by failing to give Ontario the benefit of the ambiguity in the policy. The Court held that the application judge engaged in a careful and coherent analysis of the pleadings as a whole to arrive at an unambiguous outcome.

  1. No.

The Court held that the application judge did not err in finding the negligence claims to be derivative and saw no error in the application judge’s conclusion that when the claim is read as a whole, the true nature of the negligence claims was that they rested upon allegations of intentional conduct causing expected injuries.

  1. No.

The Court held that the application judge did not err in failing to apply the nullification doctrine. Citing its decision in Cabell v. The Personal Insurance Company, the Court stated that the “nullification doctrine” prevents insurance contracts from being construed so as to defeat the coverage the policy provides, thereby defeating the very objective of the insurance contract and rendering it nugatory. Ontario argued that the application judge’s finding that the term “neither expected nor intended from the standpoint of the Insured” prevented coverage for damages that Ontario knew the class would suffer, thereby nullifying the Personal Injury coverage for intentional torts which was expressly provided for in both the First Policy and the Second Policy. The Court held that this submission failed to recognize the important distinction between “the intention to cause injury itself … and the intention to commit the act that causes the injury.” The Court held that the nullification doctrine did not apply because the policies could be construed as providing coverage for the unintended or unexpected consequences of covered intentional acts.

  1. Yes.

The Court held that the application judge erred in interpreting the coverage for an Occurrence under the Second Policy because the only reasonable view was that there was a reasonable possibility of coverage for Personal Injury “caused by an Occurrence during the Policy Period”, such as the wrongs alleged in the underlying action. The Court further held that the application judge “improperly limited…that which the parties agreed was covered.”

The application judge focused her analysis on the First Policy and applied the same reasoning to the Second Policy without considering the Personal Injury coverage under the Second Policy. Further, the application judge focused solely on Bodily Injury coverage under the Second Policy even though she found, when considering the First Policy, that the underlying action fell within the definition of both Bodily Injury and Personal Injury. The application judge concluded that the Second Policy did not respond to the claim without considering whether there was coverage under the Second Policy for Personal Injury. The Court held that language in the coverage provisions of an insurance policy should be given its plain and ordinary meaning, in keeping with the purpose of the policy, and it should be interpreted broadly to give effect to intended coverage. Under the Second Policy, Personal Injury coverage for an Occurrence did not include the limiting phrase “neither expected nor intended.” As a result, the Court held that,  given that the underlying claim alleged wrongful detention, a form of wrong included in the definition of Personal Injury in the Second Policy, and given that the coverage for Personal Injury caused by an Occurrence is not limited to damage that is “neither expected nor intended from the standpoint of the Insured”, there was a reasonable possibility of coverage under the Second Policy for damages claimed in the underlying action.

The Court found that the application judge erred not only in failing to recognize a reasonable possibility of coverage under the Second Policy, but also that the application judge erred in failing to recognize that the claims made in the underlying action were all Personal Injury claims within the meaning of the policies, and not Bodily Injury claims. The Court stated that since the definitions of Personal Injury in the policies in this case did not include the words “other than bodily injury”, or any similar limitation, and since claims related to covered intentional acts were defined as Personal Injury claims under the policies, a claim alleging physical and psychological injury resulting from the commission of a covered intentional act fell within Personal Injury coverage. As a result, the Court found that there was doubtlessly a reasonable possibility under the Second Policy that such claims would be covered.

  1. No.

The Court held that the application judge did not err in failing to apply the fortuity principle because the principle did not apply in this case. Citing Liberty Mutual Insurance Co. v. Hollinger Inc., the Court noted that the fortuity principle provides that “ordinarily only fortuitous or contingent losses are covered by a liability policy.” The Court disagreed with the respondent’s argument that the Personal Injury coverage in the Second Policy is to be interpreted in light of the fortuity principle, and therefore must result in a finding that coverage extended only to unintentional or unexpected loss. The Court found that the fortuity principle is an interpretive aid that should not be applied to as to preclude coverage that the insurer agreed to provide. As the respondent agreed to provide coverage for wrongful detention, it could not rely on the “fortuity principle” to avoid that coverage.

  1. No.

Although the Court concluded that the application judge erred in interpreting the provisions of the Second Policy, it agreed that, in any event, the duty to defend was not triggered in the particular circumstances of this case. When the applicable provisions of the Second Policy were read as a whole, the court found it apparent that Ontario must bear the costs of what it was obligated to pay as the result of the underlying action, including defence costs, up to $5,000,000, before the duty to defend arose. Because Ontario expended only $300,000 in costs at the time of the application, St. Paul’s obligation to indemnify Ontario for its defence costs was not triggered.


Dieffenbacher v. Dieffenbacher IV, 2023 ONCA 189

[Lauwers J.A. (Motion Judge)]

Counsel:

[COUNSEL]

J. Montes and G. Ichim, for the applicant

K. Svozilkova and J. Cooper, for the respondent

Keywords: Family Law, Parenting, Relocation, Child Abduction, Best Interests of the Child, Civil Procedure, Appeals, Stay Pending Appeal,  Rules of Civil Procedure, r. 63.02, Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983 No. 35, Ellis v. Wentzell-Ellis, 2010 ONCA 347, Zafar v. Saiyid, 2017 ONCA 919, Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), Warren Woods Land Corp. v. 1636891 Ontario Inc., 2012 ONCA 12, International Corona Resources Ltd. v. LAC Minerals Ltd. (1986), 21 C.P.C. (2d) 252 (Ont. C.A.), Longley v. Canada (AG), 2007 ONCA 149, J.P.B. v. C.B., 2016 ONCA 996, Chafin v. Chafin (2012), 133 S.Ct. 1017, Office of the Children’s Lawyer v. Balev, 2018 SCC 16, RJR-MacDonald Inc. v. Canada (AG), [1994] 1 SCR 311

facts:

The parties were parents of a son born in March 2022 in New York State. The parties cohabited in New York from December 2020 until January 2023. The mother stated that she moved to New York on a trial basis with the understanding that the father would recover from drug and alcohol abuse. She argued this did not happen and that the father was abusive towards her and their child. The mother claimed that in October 2022, the father consented to her moving back to Ontario with the child. The mother left New York and returned to Ontario with the child on January 6, 2023.

The father commenced divorce and custody proceedings in New York on or about January 13, 2023. On January 20, 2023, the New York court gave the father sole custody and primary physical residence of the child. On or about January 23, 2023, the father commenced an application in Ontario under the Hague Convention for the return of the then ten-month old child. At the Hague Convention hearing on February 6, 2023, the application judge found that the child’s habitual residence was in New York and dismissed the mother’s assertion that her residence in New York was temporary. The application judge found that the father was exercising custody rights at the time of removal; the father did not consent to the child’s removal since the mother left for Ontario in the middle of the night without notice; there was no evidence of abuse; and despite the father admitting to drinking and occasional drug use, there was no evidence of addiction or that the child was at risk.

The application judge’s order set out undertakings for the father, including vacating the parties’ family home in New York, and abstaining from drugs and alcohol while in a caregiving role. The mother appealed and moved on an urgent basis for a stay of the order pending the disposition of the appeal.

issue:

Should the Court grant the mother’s motion to stay the application judge’s order pending appeal?

holding:

Motion dismissed.

reasoning:

No.

The Court confirmed that the factors to consider for a stay pending appeal are: (1) whether there is a serious issue to be tried, (2) whether there would be irreparable harm for the applicant if the stay were refused, and (3) an assessment of who would suffer greater harm based on the court’s decision. No single factor is determinative. The overarching consideration was whether the interests of justice call for a stay. The Court noted that the motion must be considered through the lens of the Hague Convention. More specifically, applications pursuant to the Hague Convention are to be dealt with expeditiously because delays favour the non-complying parent and can have a detrimental impact on the child.

For the first element of the test to grant a stay, the Court noted that it is not a high threshold. Even though the mother pointed to no legal errors by the application judge, the Court stated that the appeal met the low threshold, as it was not frivolous. However, for the second element, the Court held that the mother did not meet her onus of demonstrating irreparable harm. In the context of a Hague Convention application, there is no irreparable harm if the child is returned and there is greater harm done when custody determinations are delayed. The Court found that the mother absconded with the child and provided no reason for why this conduct should not be sanctioned.

Lastly, the Court held that the balance of convenience did not favour the mother. She had not participated in the New York proceedings and her continued avoidance of lawful determinations was not in the best interest of the child. Ultimately, the concerns raised by the mother were addressed though the father’s undertakings.


Cronier v. Cusack, 2023 ONCA 178

[Paciocco, Harvison Young and Thorburn JJ.A.]

Counsel:

P. L. W. C., acting in person

C. C., acting in person

Keywords: Family Law, Equalization of Net Family Property, Civil Procedure, Financial Disclosure, Evidence, Admissibility, Privilege, Adverse Inferences, Family Law Rules, O.Reg., 114/99, rr. 2(2)-(4), Lesko v. Lesko, 2021 ONCA 369, Hickey v. Hickey, [1999] 2 S.C.R. 518, Sagl v. Sagl, 31 R.F.L. (4th) 405 (Ont. S.C.), Qaraan v. Qaraan, 2012 ONSC 6017, Cong v. Cong, 2007 CanLII 7994 (Ont. S.C.), Colucci v. Colucci, 2021 SCC 24

facts:

The appellant and respondent were married on December 6, 2008, and separated by January 31, 2015. In September 2015, the respondent wife commenced an application seeking the equalization of the parties’ net family property (“NFP”). Five years later, the trial of the application took place and both parties were self-represented. The trial judge observed that it was a very contested, high-conflict case for a couple with no children of the marriage. The parties had been unable to agree on anything.

In his first order dated March 8, 2021, the trial judge resolved several issues arising from the NFP statements filed by the parties. He requested that the parties submit fresh NFP statements reflecting his determinations with a view to narrowing the issues and finalizing the equalization payment calculation. Against the trial judge’s directions, the parties submitted revised NFP statements that did not incorporate the findings contained in the March 8, 2021 order. Instead, the new NFP statements widened the gap between the parties’ positions. Moreover, the appellant’s revised NFP, in which he sought an equalization payment of $42,159.01 from the respondent, introduced the new issue of whether the respondent wife owed him an equalization payment, a claim not previously made. In the result, the trial judge ordered the appellant to make an equalization payment of $59,929.86 to the respondent.

Both parties appealed from the orders, arguing that the trial judge fell into reversible error. The appellant argued that the trial judge erred in valuing the parties’ assets, and in failing to indicate which NFP statement he was relying on in his final determination of the equalization payment. He submitted that these errors resulted in the order that he pay an equalization payment to the respondent when no equalization payment was owed by either party.

In her cross-appeal, the respondent argued that the trial judge’s errors favoured the appellant and that the trial judge should have ordered an equalization payment to her in the amount of $127,953.91. In the last NFP statement she filed before the trial judge made his final endorsement, the respondent sought an equalization payment of $122,353. However, she submitted two subsequent NFP statements, which she prepared for the appeal with the help of a lawyer. In the first NFP statement, which did not incorporate the findings of the trial judge, the respondent calculated her equalization payment entitlement at $127,953.91. In the second NFP statement, which was the first and only to incorporate the findings made by the trial judge, the respondent calculated her equalization payment entitlement at $61,016.26, which was a de minimis difference from the $59,929.86 figure reached by the trial judge.

issues:
  1. Did the trial judge err in failing to indicate which NFP statement he was relying upon?
  2. Did the trial judge err in assigning a value of $10,000 to the appellant’s car at the date of marriage?
  3. Did the trial judge err in disallowing the valuation date deduction the appellant sought for his debt to a judgment creditor?
  4. Did the trial judge err in finding that the appellant owned the funds found in his legal trust account?
  5. Did the trial judge err in his calculation of the amount owing to the appellant from his former employer at the date of marriage?
  6. Did the trial judge err in his treatment of the Parc property?
holding:

Appeal dismissed.

reasoning:
  1. No.

The Court found the problem with the appellant’s submission was that it was clear from the trial judge’s final endorsement that he could not rely on any of the NFP statements filed by the parties because neither had followed his direction for the purpose of preparing revised NFP statements. The Court found that, in the circumstances, the trial judge’s failure to indicate which NFP statement he was relying on was not an error. Instead, the trial judge properly considered all the evidence before him to arrive at his own conclusions, which he was entitled to do on the record before him.

  1. No.

The appellant submitted that the trial judge erred in assigning a value of $10,000 to his car at the date of marriage. The appellant claimed that there was no evidence to support this amount because he claimed that it was worth $16,000 and the respondent wife claimed it was worth $12,000 as of the date of marriage. The trial judge noted that while the parties had agreed that some value should be attributed to the car, neither party had produced “blue book” or “black book” values as evidence, and their respective values appeared to be arbitrary. The Court found the trial judge dealt with the case in a fair manner, in accordance with rules 2(2)-(4) of the Family Law Rules.

  1. No.

The trial judge considered the issue raised by the appellant seeking to include his debt to a judgment creditor as at the valuation date  and found that while the litigation pre‑dated the parties’ marriage, the costs order was made against the appellant after the date of marriage, in November 2011. While the trial judge did not address the question of whether this amount remained owing as of the valuation date as the appellant claimed, there was no clear evidence on the issue and the Court found the appellant had not identified any palpable and overriding error that could justify interfering with the trial judge’s finding.

  1. No.

The Court found no palpable and overriding error with the trial judge’s finding that the $18,547.06 that was in his legal trust account was an asset owned by the appellant as of the valuation date. The backdrop to this conclusion was, in part, the respondent wife’s insistence that the appellant had accounts that he had failed to disclose. She obtained a court order that the appellant provide a Work-In-Progress (“WIP”), but none was ever provided. At trial, he admitted that he had never provided a statement, but stated that this was because his legal business had “zero value” as of the date of separation. As the trial judge noted, however, that “unilateral assessment of the value of the WIP [was] not his to make”. Rather, “it is a finding to be made by the Court, and the [appellant] simply did not live up to his court-ordered obligations.” There was evidence at trial “that there were eight client files opened as of the date of separation, although with no value described [sic] to those files by the [appellant].” The respondent wife alleged that there were additional files that the appellant had not disclosed and asked the court to impute a value of $69,443.43 as of the date of separation. The trial judge considered photographs that the respondent wife had taken of documents that were scattered around the house. The appellant objected to the admission of this evidence on the basis that the documents had been illegally obtained, and that they were protected by solicitor-client privilege. The trial judge rejected the first argument, finding that the admission of the documents would not prejudice the administration of justice. He went on to say that while there may have been an argument that the documents were privileged, the appellant husband was given many chances to produce a WIP statement, which he could have redacted to protect the identities of his clients but failed to do so. The Court found it was the respondent’s onus to prove that no WIP was indeed owing – a fact of which he was aware since an interim disclosure order was made seeking that information. Since he had not met that onus, it was appropriate to draw an adverse inference against him on this point and impute $50,000 as WIP owing.

  1. No.

The husband sold his Ottawa practice to his firm before the date of marriage. He took issue with the amount that the trial judge attributed to the portion still owing to him at the date of marriage. He claimed that the problem arose because he forgot to include $44,000 of this amount and accordingly, his July 12, 2018, NFP statement contained an amount that was erroneously $75,000 rather than $119,000, which he corrected in his March 29, 2019 NFP statement, and testified to in his oral evidence. The respondent wife, in her cross-appeal, submitted that the trial judge erred in finding that there was any pre-marriage debt owing to the appellant based on the evidence led by the appellant.

The Court disagreed with both parties. The trial judge addressed this issue expressly and was not prepared to accept the appellant’s evidence as to the higher amount. In the end, he accepted the evidence that his employer owed the appellant the lower amount of $75,000 at the date of marriage. Neither party had pointed to any error on the part of the trial judge. His finding was grounded in the record.

  1. No.

The appellant had owned the Parc property when the parties’ relationship began. However, the respondent purchased it from the appellant before they were married, largely because the appellant was in substantial debt at the time. At trial, the appellant argued that he was entitled to claim $28,000 in pre-marriage property for the Parc property. However, by the date of marriage, the respondent had purchased the property from the appellant. The trial judge reviewed the history of the parties’ arrangements for this property and ultimately rejected the appellant’s claim. The Court found there were clear findings of fact and the appellant’s submissions had pointed to no palpable and overriding error.

The Court found the trial judge’s approach was consistent with the Family Law Act. Parc was not a matrimonial home. It was owned by the respondent at the date of marriage, and she was clearly entitled to the pre-marriage deduction. The appellant, who was asserting a qualification or limitation to the deduction, had the onus of showing that the $28,000 he was claiming was warranted and he failed to do so. Both parties claimed that binding agreements governed their financial and in-kind contributions. Each claimed different terms to these agreements. In the face of these claims, the Court said the trial judge reasonably found that while there were discussions and various iterations of draft agreements prepared, there was no binding agreement.

The Cross-Appeal

The respondent wife submitted by way of cross-appeal that the trial judge committed three main errors by (a) attributing the full amount (instead of half) of a $14,907.55 joint line of credit to her as a debt owing on the date of marriage (“Scotiabank LC”) (b) declining to treat the appellant’s CRA debts as pre-marriage debts and (c) allowing the $75,000 amount owed by the husband’s former law firm as a pre-marriage asset deduction.

She argued the appellant husband owed her a significantly higher equalization payment than the amount ordered by the trial judge. With respect to the Scotiabank LC, the trial judge considered the evidence before him and explained in his reasons why he concluded that the balance as of the date of marriage was hers alone. That finding was open to him on the record before him and there was no basis for interfering with it. Similarly, the trial judge addressed the respondent’s claim that the CRA debt was owing on the date of marriage. He noted that the evidence was ambiguous on this point and concluded that he could not “find sufficient evidence on a balance of probabilities to attribute this CRA debt to the [appellant] as of the date of marriage.” The Court saw no error of law or palpable and overriding error in this assessment. Accordingly, the Court dismissed the cross-appeal.


778938 Ontario Limited v. EllisDon Corporation, 2023 ONCA 182

[Roberts, Nordheimer and Favreau JJ.A.]

Counsel:

J.V. Bakel and S. Gordon, for the appellant

M. P. Falco and A. Jovanovic, for the respondents

Keywords: Contracts, Construction, Civil Procedure, Conflict of Laws, Jurisdiction Simplicitor, Real and Substantial Connection, Forum Non Conveniens, Appeals, Standard of Review, Lack of Reasons for Decision, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(1)(a), Earl v. McAllister, 2021 ONSC 4050 (Div. Ct.), Club Resorts Ltd. v. Van Breda, 2012 SCC 17, Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada, 2022 ONCA 862

facts:

Proceedings were commenced related to the respondents’ condominium construction project in Halifax, Nova Scotia (“the project”). The respondents contracted with the appellant, Ellis Don, to provide pre-construction and construction management services in relation to the project. The appellant is a registered Ontario corporation, with offices in Mississauga and Ottawa. All parties are extra-provincial corporations, duly registered to carry on business in Nova Scotia.

On October 2, 2019, one of the subtrades engaged to provide services on the project, Omega Formwork Inc. (“Omega”), commenced an action in Nova Scotia against the respondents. On January 25, 2020, the respondents also commenced a third party claim against the appellant, seeking contribution and indemnity for any damages awarded to Omega. On June 30, 2020, the appellant responded with a defence and counterclaim against the respondents, claiming damages that were not limited to issues related to Omega, but encompassed the entire project. On July 8, 2020, the respondents delivered a defence to the appellant’s counterclaim.

Prior to the appellants delivery of its defence and counterclaim, on May 29, 2020, the respondents commenced Ontario proceedings against the appellant by issuing a notice of action and on or around June 9, 2020, delivered a statement of claim. They sought damages of around $20 million against the appellant, alleging mismanagement and delay by the appellant in relation to the entire project in Halifax. The appellant has not yet defended the action. Instead, it brought a motion to contest the jurisdiction of the Ontario court, arguing that the court lacks jurisdiction simpliciter because of an absence of a real and substantial connection with the subject-matter of the action, and that Nova Scotia is clearly the more appropriate jurisdiction in which to try the dispute. That motion was dismissed.

The appellant appealed from the motion judge’s dismissal of its motion to stay the Ontario action. The motion judge’s reasons were only partially transcribed, thus preventing meaningful appellate review. As a result, the Court undertook a fresh analysis of the issues, citing s. 134(1)(a) of the Courts of Justice Act.

issues:
  1. Did the motion judge err in concluding that Ontario has jurisdiction simpliciter over the subject-matter of the action?
  2. If not, did the motion judge err in failing to conclude that Nova Scotia is clearly the more appropriate forum for the adjudication of the parties’ dispute given the multiplicity of proceedings and real risk of inconsistent findings?
holding:

Appeal allowed.

reasoning:
  1. No.

The Court was not persuaded that the appellant had demonstrated that there was a weak relationship between the forum and the subject-matter of the litigation that the proposed assumption of jurisdiction would be inappropriate.

The Court held that the assumed jurisdiction is made out by the real and substantial connection between the subject-matter of the action and the forum. In addition to the presence of the parties in Ontario, the Court held that there were other connecting factors, such as the fact the contract was negotiated by the parties in Ontario and signed in Ontario by the respondent, at its headquarters in Ontario.

The Court held that it was a fair inference that the corporate decision to enter into the contract was made by its corporate decision-makers located in the appellant’s head office in Ontario. Accordingly, the Court agreed with the motion judge’s conclusion that Ontario had “clear jurisdiction”.

  1. Yes.

The Court noted that a court retains the residual discretion to displace a plaintiff’s right to choose the forum for the adjudication of its claim and decline jurisdiction if the defendant satisfies its burden of demonstrating that another jurisdiction is clearly the more appropriate forum. The factors to determine forum non conveniens include the following:

i. the relative strengths of the parties’ connections to each forum;

ii. the interests of both parties: the comparative convenience and expense for the parties to the proceeding and for their witnesses in litigating in the court or in any alternative forum, including the domicile of the parties, and the locations of witnesses and of pieces of evidence;

iii. the law to be applied to issues in the proceeding;

iv. the desirability of avoiding a multiplicity of legal proceedings, and of avoiding conflicting decisions in different courts;

v. the enforcement of an eventual judgment;

vi. juridical advantage or disadvantage; and

vii. the interests of justice, including the fair and efficient working of the Canadian legal system as a whole.

The Court noted that many of the factors almost equally favoured both jurisdictions. However, the Court held that when a comparison between the respondents’ third party claim and their Ontario action is made, it was clear that the allegations in the respondents’ statement of claim mirrored those in the respondents’ third party claim against the appellant in the Omega action in Nova Scotia.

The Court did not agree with the motion judge’s conclusion that the Omega action and the appellant’s counterclaim are “the tail…wagging the dog” and that the appellant was importing issues from the Ontario action into the Nova Scotia action. Instead, the Court held that it was the respondents that first expanded the issues in the Omega action beyond the dispute with Omega to encompass the appellant’s management of the entire project. The appellant was entitled, and indeed obliged, to respond to all the respondents’ allegations that went beyond the appellant’s interactions with Omega.

In the Court’s view, all the principal issues between the respondents and the appellant in both actions overlapped, leading to the likelihood of inconsistent findings. The Court held that it was therefore difficult to see how case management could avoid the potential for inconsistent findings unless the parties agreed that the Nova Scotia court would not determine the respondents’ third party claim and the appellant’s counterclaim. As the pleadings currently stood, the Court held that the trial judges in both provinces would be required to make findings on the same issues.

Accordingly, the Court concluded that Nova Scotia was clearly the more appropriate forum for the hearing of the dispute as it was presently pleaded.

The appellant also advanced the alternative position that an interim stay should be granted pending the determination of the status of the Nova Scotia proceedings. As a result of the respondent’s agreement to this, the Court ordered that the Ontario action be stayed on an interim basis and without prejudice to the parties returning before the Ontario Courts to lift the stay.


Zapfe Holdings Inc. v. 1923159 Ontario Inc., 2023 ONCA 190

[Fairburn A.C.J.O., Brown and Sossin JJ.A.]

Counsel:

M. Myers, M. Krygier-Baum and P. Benipal, for the appellants

S.H., acting in person for the respondent

Keywords: Contracts, Real Property, Mortgages, Enforcement, Possession, Power of Sale, Hume v. 11534599 Canada Corp., 2022 ONCA 575

facts:

The appellants, Zapfe Holdings Inc. and MS (the “Mortgagees”), loaned $3 million to the respondent, 1923159 Ontario Inc. (the “Mortgagor”), secured by a charge on its commercial property in Bracebridge. The Mortgagor defaulted on the mortgage, whereupon the Mortgagees issued a notice of sale under the mortgage.

On May 6, 2022, the Mortgagees attempted to take possession of the property, as permitted by the mortgage. However, the Mortgagor refused to vacate the premises, which were occupied by it and by some commercial tenants.

Instead of commencing a proceeding to obtain a writ of possession and enforce the mortgage, the Mortgagees made a second self-help effort to take possession of the property in the early morning hours of May 18, 2022, when neither the Mortgagor nor the property’s tenants were present. When the Mortgagor’s principal arrived later that morning, the police were called and advised the Mortgagees that they should restore possession to the Mortgagor. They refused, and the Mortgagor’s principal cut the locks and re-entered.

The Mortgagees immediately applied for an order restraining the Mortgagor from access to and possession of the property, a declaration that they were mortgagees in possession of the property as permitted under the mortgage, and an order restoring the state of affairs to that which prevailed on the morning of May 18, 2022, when the Mortgagees had taken possession of the property. The application judge dismissed the application. The Mortgagees appealed.

issues:

Did the application judge err in dismissing the Mortgagees’ application?

holding:

Appeal dismissed.

reasoning:

No.

After the application judge released her reasons, the Court had issued its decision in Hume v. 11534599 Canada Corp. (“Hume”), which contained an extensive review of the jurisprudence on the requirement that a mortgagee take peaceable possession of a property.

Since the application judge did not have the benefit of the Court of Appeal’s decision in Hume, the Court held that it was not surprising that her reasons made some reference to principles found in the pre-Hume jurisprudence that were clarified or disavowed by Hume. However, in the Court’s view, her decision rested on the core legal principles affirmed in Hume, which were:

  • a mortgagee who is entitled to take possession of a property must do so peaceably;
  • taking peaceable possession refers to the manner in which a mortgagee who has a legitimate entitlement to possession of a property actually takes possession of that property;
  • whether a mortgagee has taken peaceable possession of a property is a fact-driven inquiry that depends on the circumstances;
  • at a minimum, taking peaceable possession means taking possession of a property without violence or threat of violence;
  • factors that will inform a court’s assessment of a mortgagee’s conduct include whether the property was vacant or unoccupied at the time of taking possession; whether there was any physical or verbal resistance to the taking of possession at the time the mortgagee took possession; whether the property was used as a dwelling-place; and whether the mortgagee’s possession would dispossess any person of their home; and
  • whether changing the locks constitutes peaceable conduct will depend upon the circumstances.

The Court held that the application judge correctly applied the core legal principles in Hume in finding that the Mortgagees had not taken peaceable possession, and saw no basis to interfere. The standard of review of that finding was strict and the appellants did not demonstrate that the application judge made a palpable and overriding error in reaching that conclusion.


SHORT CIVIL DECISIONS

East Elgin Concrete Forming Limited v. 9001522 Canada Limited, 2023 ONCA 175

[Pepall, Harvison Young and George JJ.A.]

Counsel:

S. Mackay, for the moving party/responding party by cross-motion

P. Bakos, for the responding party/moving party by cross-motion

Keywords: Civil Procedure, Appeals, Jurisdiction, Construction Act, R.S.O. 1990, c. C.30, s. 71(1)

Gallen v. Sutherland, 2023 ONCA 170

[Pepall, Harvison Young and George JJ.A.]

Counsel:

J. Rosenstein, for the moving parties

SS, acting in person

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Rules of Civil Procedure, rr. 37.14, 59.06, Elguindy v. Elguindy, 2021 ONCA 708

Forest Hill Fine Homes Inc. v. Heartland Farm Mutual Insurance Co., 2023 ONCA 171

[Pepall, Harvison Young and George JJ.A.]

Counsel:

K.N. Hirani, for the appellant

J.T. MacQuarrie, for the respondents

Keywords: Torts, Negligence, Contracts, Insurance, Interpretation, Coverage, Duty to Defend, Property Damage, Civil Procedure, Full Indemnity Costs, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Godonoaga v. Khatambakhsh (2000), 50 O.R. (3d) 417 (C.A.)

Palmer v. Ioannidis, 2023 ONCA 179

[Fairburn A.C.J.O., Brown and Sossin JJ.A.]

Counsel:

I. de Rijcke and R. Fenn, for the appellant

P.G. Morris, for the respondents

Keywords: Real Property, Gifts, Possessory Title, Adverse Possession, Torts, Trespass

Re/Max Realty Specialists Inc. v. 2452303 Ontario Inc., 2023 ONCA 186

[Fairburn A.C.J.O., Brown and Sossin JJ.A.]

Counsel:

D.F. Chitiz, for the appellants

B. Hanuka, for the respondent

Keywords: Civil Procedure, Evidence, Burden of Proof, Balance of Probabilities, Joint and Several Liability, R. v. Ménard, [1998] 2 S.C.R. 109

Chahal v. Caledon (Town), 2023 ONCA 188

[Roberts, Nordheimer and Thorburn JJ.A.]

Counsel:

B. Romano and J. Nussbaum, for the appellants

S. Rouleau and C. deSereville, for the respondent

Keywords: Real Property, Municipal Law, Land Use Planning, Legal Non-conforming Use, Evidence, Admissibility, Hearsay, Planning Act, R.S.O. 1990, c. P.13, s. 34(9)

Bowen v. JC Clark Ltd., 2023 ONCA 181

[Feldman, George and Copeland JJ.A.]

Counsel:

S.J. Erskine and F. Dickson, for the moving parties

J.G. Knight and L.J. Freitag, for the responding party

Keywords: Civil Procedure, Costs, Rules of Civil Procedure, rr. 37.14, 59.06, 61.16(6.1), Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 840, Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 512, Mullings v. Robertson, 2020 ONCA 369, Liu v. Qiu, 2022 ONCA 544

Sutton v. Sutton, 2023 ONCA 192

[Lauwers J.A. (Motion Judge)]

Counsel:

JS, acting in person

T. Garton, for the respondent

Keywords: Family Law, Spousal Support, Civil Procedure, Leave to Appeal to Supreme Court of Canada, Stay Pending Appeal, National or Public Importance, Supreme Court Act, R.S.C. 1985, c. S-26, s. 65.1, BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Livent Inc. v. Deloitte & Touche, 2016 ONCA 395, Iroquois Falls Power Corporation v. Ontario Electricity Financial Corporation, 2016 ONCA 616, Alectra Utilities Corp. v. Solar Power Network Inc., 2019 ONCA 332, Boston v. Boston, 2001 SCC 43, RJR-MacDonald Inc. v. Canada (AG), [1994] 1 S.C.R. 311

KLN Holdings Inc. v. Grant, 2023 ONCA 193

[Lauwers J.A. (Motion Judge)]

Counsel:

GG, acting in person

M. Myers and P. Benipal, for the respondents

Keywords: Civil Procedure, Orders, Enforcement, Writs of Possession, Stay of Proceedings, Rules of Civil Procedure, r. 63.01, National Bank of Canada v. Guibord, 2021 ONCA 864, RJR-MacDonald Inc. v. Canada (AG), [1994] 1 S.C.R. 311, Pearl Hospitality Inc. v. Ceballos, 2020 ONCA 672, Berlianco Inc. v. Wee Rent It Ltd., [1999] O.J. No. 4081


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 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.