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Following are our summaries of the civil decisions of the Ontario Court of Appeal for the week of April 17, 2023.

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In Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, the Superior Court stayed the action in favour of an arbitration clause contained in a draft, unsigned contract. The plaintiff sued, claiming a contract had been agreed to. It was arguable as to whether the contract contained an arbitration clause. That was enough for the Superior Court to stay the action in favour of arbitration. The Court of Appeal dismissed the appeal.

In Mahjoub v. Canada (Public Safety and Emergency Preparedness), an immigration/deportation case, the Court held that the Superior Court properly declined the applicant’s habeas corpus application. This was because the applicant had an alternative route to pursue his remedies in the Federal Court under the Immigration and Refugee Protection Act that were at least as broad and advantageous as an application for habeas corpus to the Ontario Superior Court. The applicant has been found to be a threat to national security, and has been living in Canada in custody or under strict conditions and surveillance for 23 years. The Court stated that in national security cases, applications for habeas corpus in the Superior Court was generally unavailable. The evidentiary restrictions in such cases meant that certain evidence of a sensitive nature could only be heard by certain Federal Court judges, and could not be heard by a Superior Court judge. However, the Court did not foreclose the possibility of a party being entitled to bring a habeas corpus application in the national security context.

In Wong v Lui, the Court determined that the ultimate limitation period to sue a City for negligent inspection of a building was not tolled during the period of time when the plaintiff was a minor. The cause of action against the City accrued well before the plaintiff had purchased the property. At the time the cause of action accrued, the plaintiff had no claim, as she did not own the property. The fact that she was a minor during the course of the running of the 15-year limitation period from when the cause of action accrued therefore did not toll the 15-year limitation period for that length of time.

Other topics covered included bankruptcy and insolvency, breach of contract in the employment context involving the purchase of a book of business by a departing employee, the availability of long-term disability benefits for an employee who was on temporary medical leave at the time he suffered a serious car accident, a claim against an insurer and its employees for negligence in respect of the adjusting of a fire insurance claim.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email
Ines Ferreira
Blaney McMurtry LLP
416.597.4895 Email

Table of Contents

Civil Decisions

Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260

Keywords: Contracts, Arbitration Agreements, Civil Procedure, Orders, Stay of Proceedings, Appeals, Jurisdiction, Final Order Interlocutory, International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5, s. 9, Arbitration Act, 1991, S.O. 1991, c. 17, ss. 7, 17(1), Smith Estate v. National Money Mart Company, 2008 ONCA 746, Griffin v. Dell Canada, 2010 ONCA 29, Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.), Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, Rogers Wireless Inc. v. Muroff, 2007 SCC 35, Uber Technologies Inc. v. Heller, 2020 SCC 16, Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, Seidel v. TELUS Communications Inc., 2011 SCC 15, Haas v. Gunasekaram, 2016 ONCA 744, Sum Trade Corp. v. Agricom International Inc., 2018 BCCA 379, Gulf Canada Resources Ltd. v. Arochem International Ltd. (1992), 66 B.C.L.R. (2d) 113 (C.A.), Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12, Dancap Productions Inc., v. Key Brand Entertainment, Inc., 2009 ONCA 135, Dalimpex Ltd. v. Janicki (2003), 64 O.R. (3d) 737 (C.A.)

Jewish Foundation of Greater Toronto (Re), 2023 ONCA 268

Keywords: Bankruptcy and Insolvency, Charities, Donations, Acts of Bankruptcy, Failing to Meet Liabilities as they Become Due, Civil Procedure, Striking Pleadings, Determination of Issue Before Trial, Abuse of Process, No Reasonable Cause of Action, Costs, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Rules of Civil Procedure, r. 21, Frazer v. Haukioja, 2010 ONCA 249, Dallas/North Group Inc. (Re) (2001), 148 O.A.C. 288

Mahjoub v. Canada (Public Safety and Emergency Preparedness), 2023 ONCA 259

Keywords: Immigration Law, Refugees, Deportation, Human Rights, Constitutional Law, Habeas Corpus, Civil Procedure, Jurisdiction, Peiroo Exception, Canadian Charter of Rights and Freedoms, ss. 7, 9 and 12, Immigration and Refugee Protection Act, S.C. 2001, c. 27, s. 76, s. 78, s. 79, s. 81, s. 82(1), s. 82.1(1), s. 82(2), s. 82(4), s. 82(5), s. 82.3, s. 83(1)(b), s. 83(1)(c), s. 85.1(1), s. 85.1(2), s. 115(1), s. 115(2)(b), Federal Courts Act, R.S.C. 1985, c. F-7, s. 17(1), Charkaoui v. Canada, 2007 SCC 9, Canada (Citizenship and Immigration) v. Harkat, 2014 SCC 37, Mahjoub (Re), 2013 FC 1092, Mahjoub v. Canada (Citizenship and Immigration), 2017 FCA 157, Peiroo v. Canada (Minister of Employment and Immigration) (1989), 69 O.R.(2d) 253 (C.A.), Canada (Public Safety and Emergency Preparedness) v. Chhina, 2019 SCC 29, May v. Ferndale Institution, 2005 SCC 82, Mission Institution v. Khela, 2014 SCC 24, R. v. Graham, 2011 ONCA 138, R. v. Sarson, [1996] 2 S.C.R. 223, R. v. Gamble, [1988] 2 S.C.R. 595, R. v. Bird, 2019 SCC 7, Chaudhary v. Canada (Minister of Public Safety & Emergency Preparedness), 2015 ONCA 700, R. v. Zundel, 2003 CanLII 23552 (Ont. S.C.), Mahjoub (Re), 2014 FC 720, Harkat v. Canada (Minister of Citizenship and Immigration), 2013 FC 795, Mahjoub (Re), 2011 FC 506, Canada (MCI) v. Mahjoub, 2012 FC 125, Mahjoub (Re), 2013 FC 10, Mahjoub (Re), 2013 FC 1257, Mahjoub (Re), 2014 FC 720, Mahjoub (Re), 2015 FC 1232, Mahjoub (Re), 2016 FC 808, Mahjoub (Re), 2017 FC 603, Mahjoub (Re), 2017 FC 334, Mahjoub (Re), 2013 FC 10

Lindsay v. Verge Insurance Brokers Ltd., 2023 ONCA 263

Keywords: Breach of Contract, Employment, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29, Cronos Group Inc. v. Assicurazioni Generali S.p.A, 2022 ONCA 525

Soave v. Stahle Construction Inc., 2023 ONCA 265

Keywords: Contracts, Interpretation, Standard of Review, Employment, Insurance, Coverage, Long-Term Disability, Civil Procedure, Documentary Discovery, Affidavits of Documents, Trial, Evidence, Admissibility, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134, Rules of Civil Procedure, rr. 30.08(1)(a), 53.08(1), 1162740 Ontario Limited v. Pingue, 2017 ONCA 583, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37

Truscott v. Co-Operators General Insurance Company, 2023 ONCA 267

Keywords: Contracts, Insurance, Fire, Coverage, Torts, Negligence, Defamation, Inducing Breach of contract, Intentional Interference with Economic Relations, Breach of Duty of Good Faith and Fair Dealings, Liability of Employees, Vicarious Liability, Civil Procedure, Partial Summary Judgment, Striking Pleadings, No Reasonable Cause of Action, Insurance Act, R.S.O. 1990, c. I.8, s. 128, s. 148, Statutory Condition 6, Statutory Condition 11, Rules of Civil Procedure, rr. 5.03(1), 21.01(1)(b), Hryniak v. Mauldin, 2014 SCC 7, Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Addison Chevrolet Buick GMC Ltd. v. General Motors of Canada Ltd., 2016 ONCA 324, Kang v. Sun Life Assurance Company of Canada, 2013 ONCA 118, Correia v. Canac Kitchens, 2008 ONCA 506, ADGA Systems International Ltd. v. Valcom Ltd. (1999), 43 O.R. (3d) 101 (C.A.), Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017, Northbridge General Insurance Corp. v. Ashcroft Homes-Capital Hill Inc., 2021 ONSC 1684, Aviva Insurance v. Cunningham et al., 2022 ONSC 6331, Desjardins General Insurance Group v. Campbell, 2022 ONCA 128, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Smith v. Co-operators General Insurance Co., 2002 SCC 30, Campbell v. Desjardins, 2020 ONSC 6630, aff’d in part, 2022 ONCA 128, Senator Real Estate v. Intact Insurance, 2021 ONSC 200, Blackwater v. Plint, 2005 SCC 58, Trillium Power Wind Corp. v. Ontario (Ministry of Natural Resources), 2013 ONCA 683

Wong v. Lui , 2023 ONCA 272

Keywords:

Torts, Negligence, Public Authorities, Negligent Inspection, Statutory Interpretation, Plain Meaning, Legislative Purpose, Civil Procedure, Limitation Periods, Ultimate Limitation Period, Capacity, Minors, Determination of Issue Before Trial, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, ss. 6, 7, 15(2), 15(4)(b), Limitations Act, R.S.O. 1980, c. 240, s. 47, Building Code, O. Reg. 332/12, Statute of Merton, 1235, 20 Hen. 3, c.1, c.8, Statute of Limitations, 1540, 32 Hen. 8, c.2, Statute of Limitations, 1623, 21 Jac. 1, c. 16, Rules of Civil Procedure, rr. 1.03, 7.01(1), 21.01(1)(a), York Condominium Corporation No. 382 v. Jay-M Holdings Limited, 2007 ONCA 49, Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Deaville v. Boegeman (1984), 14 D.L.R. (4th) 81 (Ont. C.A.), Sable Offshore Energy Inc. v. Canada (Customs and Revenue Agency), 2003 FCA 220, Canaccord Capital Corporation v. Roscoe, 2013 ONCA 378, Levesque v. Crampton Estate, 2017 ONCA 455, McLean v. British Columbia (Securities Commission), 2013 SCC 67, Papamonolopoulos v. Board of Education for the City of Toronto (1986), 56 O.R. (2d) 1 (C.A.), Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, Mumford v. Health Sciences Centre (1987), 92 D.L.R. (3d) 64 (Man. C.A.), Stoddard v. Watson, [1993] 2 SCR 1069, Novak v. Bond, [1999] 1 S.C.R. 808, Bisoukis v. Brampton (City) (1999), 46 O.R. (3d) 417 (C.A.), R. v. D.L.W., 2016 SCC 22, Azzeh (Litigation Guardian of) v. Legendre, 2017 ONCA 385, Baig v. Mississauga, 2020 ONCA 697, Ruth Sullivan, The Construction of Statutes, 7th ed (Toronto: LexisNexis Canada, 2022), at §2.03, Williams, Limitation of Actions in Canada, 2nd ed (Toronto: Butterworths, 1980), at p. 24, William Ballentine, A Treatise on the Statute of Limitations (New York: C. Wiley, 1812), at p. 9, Henricus de Bractona, De legibus et Consuetudinibus Angliae, Volume 2 (c. 1210-1268), Graeme Mew, The Law of Limitations, 3rd ed (Toronto: LexisNexis Canada, 2016), at p. 4, Limitations Act Consultation Group, Recommendations for a New Limitations Act: Report of the Limitations Act Consultation Group (Toronto: Ministry of the Attorney General, 1991) at 1, Peter St. John Langan, Maxwell on the Interpretation of Statutes, 12th ed (London: Sweet & Maxwell, 1969) at p. 116

Short Civil Decisions

KVM Investments Limited v. Isabella, 2023 ONCA 278

Keywords: Civil Procedure, Summary Judgment, Costs, KVM Investments Limited v. Isabella, 2022 ONSC 4125

Molani Estate v. Iran, 2023 ONCA 279

Keywords: Civil Procedure, Class Proceedings, Opting-Out, Litigation Guardians, Interlocutory Orders, Divitaris v. Gerstel, 2022 ONCA 60, Huang v. Braga, 2017 ONCA 268, 30 E.T.R. (4th) 19, Must v. Shkuryna, 2015 ONCA 665, Willmot v. Benton, 2011 ONCA 104

Siebold v. Lawand, 2023 ONCA 276

Keywords: Civil Procedure, Conflict of Laws, Foreign Judgments, Recognition, Enforcement, Adjournment, Prejudice, Judicial Discretion

Children’s Aid Society of London and Middlesex v. T.E., 2023 ONCA 270

Keywords:Family Law, Child Protection, Civil Procedure, Appeals, Costs, Family Law Rules, O.Reg.114/99, Children’s Aid Society of the Region of Peel v. L.M., 2022 ONCA 379, Selznick v. Selznick, 2013 ONCA 35


CIVIL DECISIONS

Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited , 2023 ONCA 260

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

Counsel:

L.L. Dizgun and A. Fischer, for the appellant
L. Tomasich and A. Korajlija, for the respondent

Keywords: Contracts, Arbitration Agreements, Civil Procedure, Orders, Stay of Proceedings, Appeals, Jurisdiction, Final Order Interlocutory, International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5, s. 9, Arbitration Act, 1991, S.O. 1991, c. 17, ss. 7, 17(1), Smith Estate v. National Money Mart Company, 2008 ONCA 746, Griffin v. Dell Canada, 2010 ONCA 29, Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.), Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, Rogers Wireless Inc. v. Muroff, 2007 SCC 35, Uber Technologies Inc. v. Heller, 2020 SCC 16, Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, Seidel v. TELUS Communications Inc., 2011 SCC 15, Haas v. Gunasekaram, 2016 ONCA 744, Sum Trade Corp. v. Agricom International Inc., 2018 BCCA 379, Gulf Canada Resources Ltd. v. Arochem International Ltd. (1992), 66 B.C.L.R. (2d) 113 (C.A.), Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12, Dancap Productions Inc., v. Key Brand Entertainment, Inc., 2009 ONCA 135, Dalimpex Ltd. v. Janicki (2003), 64 O.R. (3d) 737 (C.A.)

facts:

In late 2014, the parties entered into an initial distribution arrangement under which the appellant would import, distribute, and market the respondent’s products in Canada. The terms of the arrangement were part oral and part written. Between 2016 and 2020, the parties sought to negotiate a formal, long-term, exclusive distribution agreement (the “Agreement”). After the first exchange of drafts in early 2020, the respondent sent a red-lined version on April 19, 2020, which added an arbitration clause in favour of the New Zealand International Arbitration Centre. The arbitration clause was located in Schedule G of the draft Agreement.

On May 15, 2020, the appellant responded with a “slightly” revised version, and stated that this version had been signed off on. One of the additions made by the appellant in this draft was a term stating that the main body of the Agreement was paramount to any schedule thereto. Each of the two latest drafts that were circulated contained a clause in the main body of the Agreement which stated that the parties attorned to the courts of Wellington, New Zealand to determine all disputes arising from the Agreement. A dispute arose in the summer of 2020 prior to the parties signing the Agreement. The appellant brought an Action in Ontario, and pleaded that the parties “reached an agreement on all material terms”.
The respondent moved to stay the action under s. 9 of the International Commercial Arbitration Act (“ICAA”), which states that, pursuant to article II(3) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or article 8 of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), the proceedings of the court are stayed with respect to the matters to which the arbitration relates. The respondent opposed the stay motion, submitting that the parties never agreed to arbitrate disputes arising from the Agreement. The motion judge granted the motion and stayed the action in favour of arbitration.

issues:

(1) Did the Court have jurisdiction to hear the appeal?
(2) Did the motion judge err in applying the “arguable” standard with respect to whether an arbitration agreement existed?
(3) Did the motion judge err in determining that it was arguable that an arbitration agreement existed?

holding:

Appeal dismissed.

reasoning:

(1) Yes.

The respondent argued that the order staying the action was interlocutory in nature and, therefore, an appeal did not lie to the Court. The Court disagreed, noting that an order granting a stay under s. 9 of the ICAA effectively ends the action before the court. Furthermore, several recent decisions reaffirmed the principle that challenges to an arbitrator’s jurisdiction are generally determined by the arbitrator. Therefore, the proper characterization of the stay order was that it was final in nature for the purpose of determining the appeal route.

(2) No.

Both the ICAA and the Model Law provided the mechanism by which a party can seek to stay a court proceeding in favour of referring the dispute to arbitration. The framework for determining if the arbitration agreement engaged the mandatory stay provisions was recently reaffirmed by the Supreme Court of Canada in Peace River Hydro Partners v. Petrowest Corp. (“Peace River”). There must be the (1) technical prerequisites for a mandatory stay, and (2) lack of statutory exceptions. As stated in Peace River, the technical prerequisites for the moving party to prove are that: (a) an arbitration agreement existed, (b) the court proceedings have been commenced by a party to the arbitration agreement, (c) the court proceedings were in respect of a matter that the parties agreed to submit to arbitration, and (d) the party applying for a stay in favour of arbitration did so before taking any “step” in the court proceedings.

The appellant argued that the party moving for a stay must demonstrate, on a balance of probabilities, that an arbitration agreement existed. As a result, the motion judge erred by applying a lower standard of whether it was “arguable” that an arbitration agreement existed. The Court disagreed, noting that Peace River expressly approved of the “arguable case” standard with respect to the technical prerequisites. Therefore, the Court held that the motion judge did not err in applying the arguable case standard to whether there was an arbitration agreement.

(3) No.

The appellant argued that the motion judge made a palpable and overriding error in holding that it was arguable on the record that an agreement to arbitrate existed between the parties. In support of its argument, the appellant submitted that: (a) it removed an arbitration clause from pre-2020 drafts of the Agreement, and (b) it inserted language into the May 15, 2020 draft that resolved any inconsistency between a term in the Schedules and a term in the main body of the Agreement in favour of the latter.

The Court held that the motion judge did not err in determining that it was arguable that an arbitration agreement existed. The record before the motion judge contained evidence that was contrary to the appellant’s submissions. First, the Ontario action commenced by the appellant was predicated on the basis that there was in fact a negotiated Agreement. Second, the affiants for the appellant deposed that the changes made by the respondent in the April 19, 2020 draft were accepted. Third, the appellant made revisions in the May 15, 2020 draft and clearly removed other track changes. It opted to keep the arbitration clause.


Jewish Foundation of Greater Toronto (Re), 2023 ONCA 268

[Lauwers, Paciocco and Thorburn JJ.A.]

Counsel:

W. Jaskiewicz and M. Ly, for the appellant The Joseph Lebovic Charitable Foundation

M. P. Gottlieb, P. Fruitman and X. Li, for the respondent Jewish Foundation of Greater Toronto

Keywords: Bankruptcy and Insolvency, Charities, Donations, Acts of Bankruptcy, Failing to Meet Liabilities as they Become Due, Civil Procedure, Striking Pleadings, Determination of Issue Before Trial, Abuse of Process, No Reasonable Cause of Action, Costs, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Rules of Civil Procedure, r. 21, Frazer v. Haukioja, 2010 ONCA 249, Dallas/North Group Inc. (Re) (2001), 148 O.A.C. 288

facts:

The appellant was a non-share capital corporation designated by the Canada Revenue Agency as a private foundation. The appellant donated to the respondent through a donor advised fund (“DAF”). Once donated, the DAF became part of the respondent’s assets, which it then invested and distributed to charities. Between 2011 and 2016, the appellant donated over $19 million to the DAF. The appellant received an acknowledgement confirming each donation as an irrevocable gift.

A DAF can designate an advisor to recommend distributions, but the recipient is not required to follow or consider those recommendations. Shortly after the death of the appellant’s principal, JL, his brother, WL, instructed the respondent to distribute the remaining funds in the DAF to specific named charities. When the respondent did not follow his instructions, the appellant commenced an action against the respondent, seeking an order compelling the respondent to make the distributions. That proceeding was ongoing at the time this application was heard.

The appellant brought the application underlying this appeal under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”). The basis for the application was that the respondent had ceased to meet its liabilities generally as they came due, and that it had failed to meet its obligations to the appellant in the six months preceding the filing of the application. The respondent brought a motion to dismiss the application as frivolous and raising no reasonable cause of action.

The motion judge granted the motion and dismissed the application as raising no reasonable cause of action under the BIA, because there was no evidence of a debt, nor any act of bankruptcy, nor special circumstances that would justify granting a single-creditor application. The motion judge ordered the appellant to pay elevated costs to the respondent of $100,000.

issues:
  1. Did the motion judge err in finding that the application had no merit?
  2. Did the motion judge err in her costs award?
holding:

Appeal dismissed.

reasoning:
  1. No

The appellant submitted that the respondent’s entire operation should have been subject to effectively a full-scale audit to determine whether any of the appellant’s allegations were true. The Court rejected the appellant’s argument and stated that this was not the purpose of the BIA.

The Court agreed with the motion judge that the appellant’s claim had no merit, and that the appellant had failed to identify any palpable or overriding error of fact or law in the motion judge’s decision.

  1. No

The Court found no reason to interfere with the costs award. The Court held that the motion judge had awarded costs based on her finding that the claim was an abuse of process, and that this finding was entitled to deference. Further, the Court held that the motion judge was alive to the reputational concerns of the respondent, and had appropriately considered them in fixing costs.


Mahjoub v. Canada (Public Safety and Emergency Preparedness) , 2023 ONCA 259

[Feldman, Hoy and Favreau JJ.A.]

Counsel:

P. Slansky, Y. Hameed, and N. Pope, for the appellant
M. Zorić, J. Provart and M. Keramati, for the respondent

Keywords: Immigration Law, Refugees, Deportation, Human Rights, Constitutional Law, Habeas Corpus, Civil Procedure, Jurisdiction, Peiroo Exception, Canadian Charter of Rights and Freedoms, ss. 7, 9 and 12, Immigration and Refugee Protection Act, S.C. 2001, c. 27, s. 76, s. 78, s. 79, s. 81, s. 82(1), s. 82.1(1), s. 82(2), s. 82(4), s. 82(5), s. 82.3, s. 83(1)(b), s. 83(1)(c), s. 85.1(1), s. 85.1(2), s. 115(1), s. 115(2)(b), Federal Courts Act, R.S.C. 1985, c. F-7, s. 17(1), Charkaoui v. Canada, 2007 SCC 9, Canada (Citizenship and Immigration) v. Harkat, 2014 SCC 37, Mahjoub (Re), 2013 FC 1092, Mahjoub v. Canada (Citizenship and Immigration), 2017 FCA 157, Peiroo v. Canada (Minister of Employment and Immigration) (1989), 69 O.R.(2d) 253 (C.A.), Canada (Public Safety and Emergency Preparedness) v. Chhina, 2019 SCC 29, May v. Ferndale Institution, 2005 SCC 82, Mission Institution v. Khela, 2014 SCC 24, R. v. Graham, 2011 ONCA 138, R. v. Sarson, [1996] 2 S.C.R. 223, R. v. Gamble, [1988] 2 S.C.R. 595, R. v. Bird, 2019 SCC 7, Chaudhary v. Canada (Minister of Public Safety & Emergency Preparedness), 2015 ONCA 700, R. v. Zundel, 2003 CanLII 23552 (Ont. S.C.), Mahjoub (Re), 2014 FC 720, Harkat v. Canada (Minister of Citizenship and Immigration), 2013 FC 795, Mahjoub (Re), 2011 FC 506, Canada (MCI) v. Mahjoub, 2012 FC 125, Mahjoub (Re), 2013 FC 10, Mahjoub (Re), 2013 FC 1257, Mahjoub (Re), 2014 FC 720, Mahjoub (Re), 2015 FC 1232, Mahjoub (Re), 2016 FC 808, Mahjoub (Re), 2017 FC 603, Mahjoub (Re), 2017 FC 334, Mahjoub (Re), 2013 FC 10

facts:

The appellant, MM, came to Canada from Egypt and was granted refugee status. MM has since been found to pose a threat to Canada’s national security and has been subject to a deportation order.

Before the deportation order could be implemented, the respondent, the Minister of Public Safety and Emergency Preparedness (the “Minister”), had to complete a Danger Opinion to determine the extent of the risk MM posed and whether he should be deported. In the meantime, MM was not in detention, but he was subject to various conditions of release. The latest version of his conditions of release was based on a consent order made by the Federal Court in 2021.

After the consent order was made, MM brought an application for habeas corpus in the Ontario Superior Court of Justice seeking to be relieved from his conditions of release. On the application for habeas corpus, MM sought to argue that the length and indefinite period of time he had been subject to the conditions imposed on his liberty breached his rights under ss. 7, 9 and 12 of the Canadian Charter of Rights and Freedoms (the “Charter”).

The Minister brought a motion to stay the application on the basis that the Superior Court did not have jurisdiction or, alternatively, that the Superior Court should have declined to hear the application. The motion judge granted the motion and stayed MM’s application for habeas corpus. While the motion judge found that the Superior Court has jurisdiction to grant habeas corpus in connection with an order made by the Federal Court, he held that it was appropriate to stay the application in this case because the application fell within both recognized circumstances where a Superior Court should refuse to entertain an application for habeas corpus. First, the motion judge found that MM had an appropriate appeal route under the Immigration and Refugee Protection Act (the “IRPA”) to challenge the Federal Court order imposing his conditions of release. Second, the motion judge held that the review procedure under the IRPA constituted a complete, comprehensive and expert statutory scheme which provided for a review at least as broad as that available by way of habeas corpus, and no less advantageous (referred to as the “Peiroo exception”).

MM appealed the stay of his application for habeas corpus on the grounds that the motion judge erred in finding that the Superior Court should decline to hear the application based on both of these exceptions.

issues:
  1. Does the Superior Court have jurisdiction over the application for habeas corpus?
  2. Did the motion judge err in finding that MM had a right of appeal from his conditions of release and that such a right of appeal should preclude him from bringing the application?
  3. Did the motion judge err in finding that the security scheme under the IRPA is as advantageous as habeas corpus and that the Peiroo exception should therefore preclude him from bringing the application?
holding:

Appeal dismissed.

reasoning:

Reasoning:

  1. Yes.

On a preliminary note, the Superior Court’s decision whether to decline habeas corpus on the basis of a recognized exception is discretionary. Accordingly, the Court will only interfere with the motion judge’s decision if he made an error of law or principle, or if he made a palpable and overriding error of fact or mixed fact and law.

The Court held that there is no blanket principle that the Superior Court cannot grant habeas corpus in relation to an order made by the Federal Court. The Court clarified that, while habeas corpus is generally not available in one superior court to alter or attack an order made by another superior court, a recognized exception is where the applicant seeks to establish, as here, that a detention is unlawful because it breaches the applicant’s Charter rights. In the Court’s view, given the grounds on which MM sought habeas corpus, the fact that he sought to challenge restrictions on his liberty imposed by the Federal Court on its own did not preclude the Ontario Superior Court from considering his application.

2. Yes.

In the Court’s view, the motion judge erred when he found that s. 82.3 of the IRPA gave MM a right of appeal that would allow the Federal Court of Appeal to correct any errors made by the Federal Court. The weight of authorities suggests that the first exception to the availability of habeas corpus (whether an appeal route exists) only applies in the criminal context. The Court found that s. 82.3 only gives MM a right of appeal from a decision reviewing the conditions of his release “if the judge certifies that a serious question of general importance is involved and states the question”. Therefore, as a precondition to an appeal, a Federal Court judge acts as a gate keeper and only serious questions of general importance will be referred to the Federal Court of Appeal. Accordingly, the Court held, even if MM had valid grounds of appeal arising from the specific circumstances of his case, the Federal Court of Appeal would only hear the appeal if a Federal Court judge was satisfied that his appeal raised a serious question of general importance. This case was not the same type of appeal available under the Criminal Code, to correct errors specific to an individual person’s conviction.

3. No.

The Court agreed with the motion judge’s finding that the proper lens through which the Court should look at the matter was only through the Peiroo exception, which was specifically developed to address the availability of habeas corpus in the immigration context. The Court explained that the Federal Court is to consider the overall length of the detention or the length of time of the conditions of release imposed when conducting a review. For example, the Federal Court is to look at the passage of time and the uncertainty of the future. Therefore, the Court found, while s. 82.1(1) of the IRPA specifies that a judge has the power to vary an order on review where they are satisfied that there has been a “material change in the circumstances that led to the order”, the test developed under this provision is retrospective as well as prospective, and allows the court to look at the overall length of the conditions of detention.

The Court looked at the Federal Court’s review decisions it and was not satisfied with MM’s argument that the Federal Court refused to review the overall length or uncertain future of his restrictions. which a court is mandated to consider.

If the application for habeas corpus were allowed to proceed in the Superior Court, the judge of that court would not have the authority to consider the full evidence that may be relevant to determining whether the length of time MM has been subject to conditions and the nature of those conditions was justified. For example, there may be a reasonable explanation for the delay in conducting the Danger Opinion, but the explanation may be based on information that cannot be released to the public because of issues of national security or because it poses a risk to others. In addition, the special advocate system is only available in the Federal Court system.

The Court recognized that its reasoning was akin to saying that the Superior Court does not have jurisdiction over an application for habeas corpus in cases involving security certificates. Given the Federal Court’s exclusive jurisdiction over the information and evidence relevant to issues of national security, applications for habeas corpus in the security context will likely indeed be generally unavailable. Recognizing the fundamental importance of habeas corpus in protecting liberty interests, the Court made clear that this decision did not foreclose the possibility that such a case could proceed by way of an application for habeas corpus in the Superior Court. However, in the circumstances of this case, the Court was satisfied that the specialized procedure under the IRPA for reviewing MM’s conditions of release was at least as broad and advantageous as an application for habeas corpus in the Superior Court.


Lindsay v. Verge Insurance Brokers Ltd., 2023 ONCA 263

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

Counsel:

S.F. Gleave and K. Ellins, for the appellants
E.C. Nanayakkara and N. Aresta, for the respondent

Keywords: Breach of Contract, Employment, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29, Cronos Group Inc. v. Assicurazioni Generali S.p.A, 2022 ONCA 525

facts:

In 2004, the respondent began working as an insurance producer for the corporate appellant in St. Catharines (the “Corporation”). The individual appellant was the President of the Corporation. The Corporation sold personal and commercial insurance products.

The employment contract that governed the relationship between the Corporation and the respondent included terms relating to the potential purchase by the respondent of his book of business if he left the Corporation.

On April 15, 2013, the respondent gave his required 60 days’ written notice to the Corporation of his intention to resign from his employment on June 14, 2013. He also signalled that he wanted to purchase his book of business at the contractual price of twice his annual commissions in the preceding policy term. The Corporation accepted that the respondent had the right to purchase his book of business except for accounts that, pursuant to the contract, the Corporation could retain if they were of “particular importance”.

The negotiations did not go well. The Corporation was slow in providing a client list, finally doing so on May 14, but without names or policy numbers, thus making it difficult for the respondent to determine if the list was accurate. On the same day the Corporation stated a purchase price of $481,167 and demanded closing on May 29.

On May 17, the respondent advised the Corporation through his lawyer that he could not vet the list and stated that the 14-day period could not run until he had accurate account information. The Corporation made corrections to the list and lowered the purchase price of the respondent’s book of business from the initial $481,167 to $389,136 to $362,977. In its final letter on June 5, the Corporation insisted on closing at 5 p.m. that day.

The respondent did not close the transaction on the terms demanded, and commenced an action alleging that the Corporation had breached the terms of the parties’ agreement. The Corporation counterclaimed that the respondent had improperly refused to buy his book of business.  At trial, the respondent was successful and was awarded damages of $185,000.

issues:
  1. Did the trial judge err by misinterpreting the contract, and finding the Corporation liable for breach of contract?
  2. Did the trial judge err in his damages assessment by imposing a 10-year term for lost profits?
holding:

Appeal dismissed.

reasoning:
  1. No

The Court found no error in the trial judge’s careful and comprehensive contractual analysis. The Court agreed with the trial judge that it was a reasonable interpretation of the contract to find that the list of accounts and purchase price had to be accurate and that the respondent was entitled to a 14-day period once the accurate list and price were fixed to make his decision. The Court held that the Corporation’s conduct over a three-week period in May and June 2013 was inconsistent with both of these essential components of the contract.

The Court found that the Corporation changed the list and the initial price two times in those three weeks and gave the respondent no time to consider the transaction after setting the final price. As found by the trial judge, the Court agreed that the Corporation’s conduct was unfair and not in keeping with the terms of the employment contract. Thus, the Court held that the respondent’s refusal to close the purchase was not a breach of the employment contract.

  1. No

The Corporation argued that the trial judge erred by choosing a ten-year term for the respondent’s loss of profits. The Corporation contended that the maximum term should have been 6.6 years because that was the average length of the respondent’s policies with his clients during his nine years with the Corporation.

The Court disagreed, finding that the combination of the Corporation’s retention rate of 11 years for its commercial clients and the respondent’s 92 percent retention rate for his clients while at the Corporation justified the trial judge’s award.

The Court found that the trial judge did not err by not reducing the award by the commissions the respondent was able to earn in his new position. The Court found that there was no evidence before the trial judge to support the conclusion that the respondent would have been unable to service both groups of clients. The Court also found that the trial judge did not err in assigning a terminal value to the book of business. The retention rate accepted by the trial judge did not presuppose that the book of business would have no value at the end of 10 years.


Soave v. Stahle Construction Inc., 2023 ONCA 265

[Miller, Trotter and Favreau JJ.A.]

Counsel:

J. Heimpel, for the appellant
L. K. Parsons and D. Thomas, for the respondent

Keywords: Contracts, Interpretation, Standard of Review, Employment, Insurance, Coverage, Long-Term Disability, Civil Procedure, Documentary Discovery, Affidavits of Documents, Trial, Evidence, Admissibility, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134, Rules of Civil Procedure, rr. 30.08(1)(a), 53.08(1), 1162740 Ontario Limited v. Pingue, 2017 ONCA 583, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37

facts:

The appellant, Stahle Construction Inc. (“Stahle”), appealed a judgment requiring that it pay damages to the respondent, R.S., for having improperly terminated his long-term disability benefits coverage. R.S. started working for Stahle on October 7, 2013, as a construction site supervisor. R.S. was required to participate in Stahle’s group benefits plan. Great West Life Insurance was the provider of long-term disability benefits. R.S.’ entitlement to benefits, including long-term disability benefits provided by Great West Life, were described in a booklet prepared by Mercon Benefits Services (the “Mercon Booklet”).

R.S. completed his work supervising one construction site around January 27, 2014. At that time, Stahle offered R.S. work on another site. However, R.S. turned down the work because he said he required surgery to address a hernia condition. R.S. then stopped working and Stahle completed a Record of Employment that indicated that he was on a temporary leave due to medical illness.

On March 13, 2014, before the hernia surgery was scheduled, R.S. was involved in a serious motor vehicle accident (the “Accident”). Following the Accident, R.S. tried to pay for medication purchased at a pharmacy through Stahle’s benefits plan. The insurer contacted Stahle to inquire about R.S.’ status, at which point Stahle took the position that R.S. was no longer employed by the company and that he was therefore not entitled to any benefits. R.S. subsequently applied for long-term disability benefits from Great West Life but was turned down on the basis that he was no longer actively working on the date of the Accident. R.S. brought an action against Stahle claiming that he continued to be employed by the company at the time he stopped working on January 27, 2014, and that the company had improperly terminated his benefits.

The trial judge found that R.S. had taken a “temporary medical leave” on January 27, 2014, and that he was still employed by Stahle at the time of the Accident. She also found that R.S. would have been entitled to long-term disability benefits. Stahle appealed the trial judge’s finding that R.S. was entitled to receive long‑term disability benefits.

issues:
  1. Did the trial judge err in refusing to allow Stahle to introduce the Great West Life insurance policy into evidence?
  2. Did the trial judge err in giving no weight to the Great West Life letter?
  3. Did the trial judge err in finding that R.S. was eligible for long term disability benefits?
holding:

Appeal allowed in part.

reasoning:
  1. No.

At trial, Stahle sought to introduce the Great West Life insurance policy (the “Policy”), which Stahle had not disclosed in its affidavit of documents. R.S. objected to the admission of the Policy on the basis that, up to that point, the parties had relied on the Mercon Booklet as an accurate description of R.S.’ long‑term disability benefits coverage. The trial judge ruled against admitting the policy based on “trial fairness”. Stahle submitted that the trial judge erred in making this ruling because she failed to apply the proper test for the admission at trial of documents not disclosed in an affidavit of documents. The Court found there was no basis for interfering with the trial judge’s ruling on this issue.

Rule 30.08(1)(a) of the Rules of Civil Procedure (the “Rules”) provides that, where a party fails to disclose a document in its affidavit of documents and the document is favourable to that party, the document can only be introduced at trial with leave of the court. Rule 53.08(1) sets out the test for granting leave in such circumstances, and it requires that the Court be satisfied that (a) there is a reasonable explanation for the delay and (b) the admission of the document (i) will not cause prejudice that cannot be compensated by costs or an adjournment and that (ii) it will not cause undue delay of the trial.

While the trial judge did not explicitly refer to the test under r. 53.08(1) of the Rules, it is evident that she considered the relevant factors and that her ruling was supported by the record before her. Specifically, she considered the issue of prejudice when she referred to trial fairness and Stahle’s failure to disclose that it intended to rely on the Policy.

In his statement of claim, R.S. referred to the description of the long-term disability benefits as set out in the Mercon Booklet. In its statement of defence, Stahle accepted that this was an accurate description of the applicable provisions for his entitlement to long-term disability benefits. By not including the Policy in its affidavit of documents, there was no opportunity for R.S. to examine Stahle’s representative on the Policy or its applicability to R.S. In addition, Stahle only sought to introduce the Policy on cross-examination which meant that R.S.’ examination in chief had already proceeded on the assumption that the Mercon Booklet set out the accurate provisions addressing R.S.’ entitlement to long-term disability benefits. R.S.’ trial strategy was built around the provisions in the Mercon Booklet.

Stahle argued that the introduction of the Policy at this stage of the trial was unlikely to have caused delay in the proceedings because its terms were not significantly different from the terms set out in the Mercon Booklet. However, Stahle did not make the Policy available to the panel on appeal. There was no motion for fresh evidence before the Court. Accordingly, it was not possible for the panel to assess whether there were any differences between the Policy and its description in the Mercon Booklet.

  1.  No.

In May 2016, Great West Life turned down R.S.’ application for long-term disability benefits. In a letter it explained that R.S. was not entitled to long-term disability benefits for the Accident because he “was no longer actively at work for his employer as of this date”. At trial, Stahle relied on this letter for the purpose of showing that R.S. did not meet the eligibility criteria for long-term disability benefits under the Policy. The trial judge gave little weight to the letter, explaining that it was not possible to know whether Great West Life was influenced by an earlier letter from Stahle advising the insurer that R.S. had resigned from his position on January 27, 2014, or whether Great West Life had assessed the claim as though R.S. remained employed by Stahle. The Court rejected Stahle’s argument that the trial judge erred in giving no weight to the letter. It was not the role of the Court to reweigh the evidence at trial, unless the trial judge made a palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33. The Court found it was entirely appropriate for the trial judge to give no weight to the letter and found no error in the trial judge’s treatment of the letter.

  1.  Yes.

The Court agreed with Stahle that the trial judge failed to properly assess whether R.S. met the eligibility requirements for receiving long-term disability benefits. The Mercon Booklet addressed the circumstances under which an employee whose employment was temporarily interrupted could continue to be eligible for benefits. In addition, the Mercon Booklet set out the specific eligibility requirements for long-term disability benefits. The Court found the trial judge made palpable and overriding errors in her interpretation and application of these provisions.

Under the terms of the Mercon Booklet, R.S.’ benefit coverage only started after the end of any waiting period imposed by Stahle and required that he be “actively at work” on the date his coverage started. The Mercon Booklet then addressed the circumstances under which coverage for an employee whose employment is temporarily interrupted is eligible for continued coverage. The Mercon Booklet also set out the eligibility requirements that applied specifically to long-term disability benefits. An employee is only eligible for long-term disability benefits following a qualifying period of 120 days of disability. At the end of this qualifying period, the employee had 180 days to provide notice of all long-term disability claims to Great West Life.

The standard of review that applies to the interpretation of a contract is normally that of a palpable and overriding error, unless there are extricable errors of law, or the contract at issue is a standard form contract: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. The Court found there was no information before the Court as to whether the terms of the Mercon Booklet constituted a standard form contract. R.S. stopped working on January 27, 2014. At that point, he was no longer entitled to benefits coverage unless he met one of the exceptions for continued coverage described in the Mercon Booklet. He also had to meet the eligibility requirements for long-term disability benefits to trigger that coverage. The trial judge treated R.S.’ work interruption on January 27, 2014, as “a temporary medical leave”, she accepted that R.S. was entitled to long-term disability benefits as a result of the injuries he suffered in the motor vehicle accident.

The Court found this reasoning constituted a fundamental misreading of the eligibility requirements for long-term disability benefits in the Mercon Booklet. Specifically, while the trial judge found that R.S. was on “a temporary medical leave”, she did not consider whether his work was interrupted because he was on a leave of absence or because of disability and, more significantly, whether he met the eligibility requirements for long-term disability coverage. If she had properly interpreted the Mercon Booklet, she would have concluded that R.S. could only be entitled to long-term disability benefits if he (a) were disabled within the meaning of the Mercon Booklet on the date he stopped working, or (b) became totally disabled during his leave of absence, and his employer was required by legislation, regulation or case law to pay benefits during that period.

The Court found the trial judge erred in focusing on the continuation of coverage provisions in the Mercon Booklet. While these provisions refer to “benefits” and “benefit coverage”, it was clear from the context that the provisions did not address a disability that commenced after an employee stopped working, nor did they speak to disability coverage itself.

Specifically, under the Leave of Absence provision, employees could continue their “benefits” except for disability benefits for a period of up to six months. Even if R.S. had made his share of the contributions after he stopped working, he would not have been eligible under this provision because it addressed continuation of benefits and not eligibility. “Disability benefits” were explicitly excluded from the benefits available to employees who were on a leave of absence.

The disability provision in the continuation of coverage section of the Mercon Booklet contemplated that an employee unable to work due to disability may continue their “benefits” for up to 24 months. Eligibility for continued coverage depended upon the employee already being in receipt of Worker’s Compensation or Long-Term Disability Benefits. Like the Leave of Absence provision, the Disability provision addressed continuation of an existing benefit. Because the provision presumed the employee to already be in receipt of long-term disability benefits, it was evident that the intent of the provision was to address coverage for other benefits, such as dental benefits or life insurance – not coverage for long-term disability benefits.

To determine whether R.S. was entitled to long-term disability benefits after he stopped working, the trial judge should have considered the provisions of the Mercon Booklet that specifically addressed entitlement to long-term disability benefits rather than continuation of coverage. It was evident that R.S. would qualify for long-term disability benefits if he were disabled within the meaning of the Mercon Booklet on the date he stopped working; in other words if he stopped working due to his disability.

An employee was only entitled to long-term disability benefits after a period of 120 days of “disability”, after which they could apply for those benefits within the next 180 days. In this case, the trial judge treated the beginning of R.S.’ waiting period as the date he stopped working but she considered whether he met the definition of disability in relation to his condition following the Accident. To assess whether R.S. was disabled within the 120-day qualifying period between the date when he stopped working and the date of the accident, she would have had to assess whether he was disabled within the meaning of the policy at the time when he stopped working. This was evident from the definition of “disability”, which requires that a person be unable to perform the essential duties during the qualifying period.

In addition, the trial judge failed to consider the provision in the Mercon Booklet that explicitly stated that an employee on a leave of absence was not entitled to long-term disability benefits if they became totally disabled during this period unless the employer was required to pay benefits by legislation, regulation, or case law.

It was clear from the terms of the Mercon Booklet that R.S. was only eligible for long-term disability benefits if he met the definition of disability on the date he stopped working and throughout the 120-day qualifying period. Alternatively, if R.S. was not disabled within the meaning of the Mercon Booklet on the date he stopped working, he may be entitled to long-term disability benefits if he became totally disabled during his leave of absence and his employer was required to pay benefits during that period “as required by legislation, regulation or case law”. However, on this last point, the Court noted that no submissions were made on the issue, and it was not evident whether any legislation, regulation or case law would apply in the circumstances of this case.

The Court was satisfied that the trial judge erred in finding that R.S. was entitled to long-term disability benefits, without considering if he was disabled on the date he stopped working or whether there was a requirement in legislation, regulation, or case law for making such a finding. The matter was remitted back to the trial judge or another judge of the Superior Court to make the determination about whether R.S. was disabled within the meaning of the Mercon Booklet on that date, and whether he would have qualified for long-term disability benefits based on his hernia condition at that time and throughout the subsequent 120-day qualifying period.


Truscott v. Co-Operators General Insurance Company, 2023 ONCA 267

[Gillese, Tulloch and Roberts JJ.A.]

Counsel:

J. A. Scarfone and J. Sazio, for the appellants
R. Dowhan and M. McMahon, for the respondents

Keywords:

Contracts, Insurance, Fire, Coverage, Torts, Negligence, Defamation, Inducing Breach of contract, Intentional Interference with Economic Relations, Breach of Duty of Good Faith and Fair Dealings, Liability of Employees, Vicarious Liability, Civil Procedure, Partial Summary Judgment, Striking Pleadings, No Reasonable Cause of Action, Insurance Act, R.S.O. 1990, c. I.8, s. 128, s. 148, Statutory Condition 6, Statutory Condition 11, Rules of Civil Procedure, rr. 5.03(1), 21.01(1)(b), Hryniak v. Mauldin, 2014 SCC 7, Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Addison Chevrolet Buick GMC Ltd. v. General Motors of Canada Ltd., 2016 ONCA 324, Kang v. Sun Life Assurance Company of Canada, 2013 ONCA 118, Correia v. Canac Kitchens, 2008 ONCA 506, ADGA Systems International Ltd. v. Valcom Ltd. (1999), 43 O.R. (3d) 101 (C.A.), Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017, Northbridge General Insurance Corp. v. Ashcroft Homes-Capital Hill Inc., 2021 ONSC 1684, Aviva Insurance v. Cunningham et al., 2022 ONSC 6331, Desjardins General Insurance Group v. Campbell, 2022 ONCA 128, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Smith v. Co-operators General Insurance Co., 2002 SCC 30, Campbell v. Desjardins, 2020 ONSC 6630, aff’d in part, 2022 ONCA 128, Senator Real Estate v. Intact Insurance, 2021 ONSC 200, Blackwater v. Plint, 2005 SCC 58, Trillium Power Wind Corp. v. Ontario (Ministry of Natural Resources), 2013 ONCA 683

facts:

JT is a chartered professional accountant who runs a small practice in Hamilton, Ontario through his professional corporation, JTPC and a numbered company who, together, are the appellants. The appellants operated out of a Victorian house in Hamilton that was severely damaged by a fire on January 20, 2017. The fire substantially destroyed the building and valuable accounting papers and records located in it. The appellants submitted building and valuable papers loss claims to its insurer, the respondent (“C”). Some of those claims were the subject matter of umpire appraisal awards under the Insurance Act (the “Act”).

On September 5, 2017, the umpire of the appraisal process issued an award appraising the building loss at a replacement cost value of $507,130.09 and an actual cash value of $431,060.58 (“Award #1”). On June 4 and November 7, 2018, the appellants submitted two new proofs of loss for building costs relating to by-law compliance. C refused to consider these proofs of loss on the basis that the appraisal had taken place, and Award #1 had been granted and paid. These two building loss claims have never been appraised or paid. With respect to the appellants’ valuable paper loss claims, they submitted three proofs of loss dated April 17, September 28, and October 31, 2017. Despite the fact that all three proofs of loss were submitted prior to the conclusion of the appraisal process on March 9, 2018, the appraisal process proceeded only on the April 17 proof of loss. On March 22, 2018, the umpire awarded the full amount claims by the appellants in their April 17 claim of $157,639 (“Award #2”).

After the awards were made, C sought judicial review of Award #2, stating that the umpire had exceeded jurisdiction and breached the indemnity principle. The Divisional Court dismissed the judicial review application and held that: (a) the umpire had jurisdiction under the appraisal agreement; (b) C had an opportunity to contest the appellants’ appraisal methodology for calculating the valuable papers loss claim but chose not to do so; and (c) Award #2 was limited to the quantification of loss and did not address the appellants’ entitlement under the Policy. C refused to pay out on other building and valuable papers loss claims, including those that had been filed before the appraisals were held and which were expressly not covered by the appraisal process.

The appellants were not content with the handling of the insurance claim or the amounts paid out under the Policy and commenced an action against C and the employee assigned as the adjuster with responsibility for handling the insured’s claims (“C’s adjuster”). In their statement of claim (the “Claim”), the appellants alleged that, among other things, C and its adjuster manipulated the appraisal process, delayed payment of claims, and engaged in other conduct amounting to bad faith.

The Claim sought entitlements under the Policy, damages for breach of contract, negligence, defamation, procurement of breach of contract, interference with economic relations, and bad faith, as well as aggravated and punitive damages. After allowing for the payments made by C to the appellants, there remained considerable sums available under the Policy limits for building and valuable papers loss claims.

C and C’s adjuster moved for partial summary judgment, seeking to have the appellants’ loss claims relating to the building and valuable records dismissed and to have the Claim struck as against C’s adjuster. The motion judge granted partial summary judgment declaring that C had paid out all amounts owing for the replacement and repair of the building and replacement of the valuable papers, dismissing the appellants’ Claim in respect of those matters, striking the Claim as against C’s adjuster, and ordering the appellants to pay costs. The appellant appealed all aspects of the judgment.

issues:
  1. Did the motion judge err by determining that this was an appropriate case for partial summary judgment?
  2. Did the motion judge err by determining that the Awards finally settled the full amount of the appellants’ entitlements under the Policy?
  3. Did the motion judge err by sticking the Claim as against C’s adjuster personally?
holding:

Appeal allowed.

reasoning:

1. No

The Court found that the motion judge made an extricable error in principle in granting partial summary judgment because he failed to consider whether partial summary judgment was appropriate in the context of the litigation as a whole. The Court further held that because the issues were inextricably intertwined, deciding them on the motion led to the possibility of inconsistent findings and substantive injustice. Lastly, the Court held that the motion judge erred when he stated that credibility was not a critical issue in the matters before him but his factual findings were dependent on making credibility determinations.

The Court, citing Butera v. Chown, Cairns LLP, reiterated that partial summary judgment is a rare procedure, reserved for an issue or issues that may be readily bifurcated from those in the main action, and that may be dealt with expeditiously and in a cost-effective manner. The Court held that partial summary judgment should be granted only in the clearest of cases and only if doing so does not give rise to any of the associated risks of delay, expense, inefficiency, and inconsistent findings. The Court held that it was readily apparent that this was not one of those “clearest” of cases in which partial summary judgment was appropriate.

2. No

As a preliminary point, the Court found that the motion judge made a palpable and overriding error when he found that the appellants had submitted their claims to the umpire for a determination, were “not content” with the Awards, and impermissibly sought to challenge the Awards through the courts, rather than by way of judicial review. This was an error by the motion judge because the appellants were content with the Awards; did not seek to challenge them; and the courts were the appropriate venue for the adjudication of the appellants’ claims. It was, in fact, C that challenged the validity of Award #2 through a judicial review application and the appellants who successfully argued that Award #2 should be upheld. The Court held that because the appellants were not challenging the Awards, judicial review was not the appropriate route for them to follow and it was for the courts to determine the validity of their Claim.

The Court held that the motion judge erred when he interpreted the relevant provisions of the Insurance Act as barring the appellants from submitting, after the appraisals, further proofs of loss regarding different expenses, under the building loss and valuable papers loss heads of coverage. On a plain reading of the relevant legislative provisions, the appraisal process contemplated by the Insurance Act is not a “one-shot” valuation. Rather, it permits an umpire to specifically confine an appraisal award to identified loss claims known at the time of the appraisal. In this case, the Awards were expressly confined.

The Court found that the umpire did not purport to adjudicate an entire head of coverage in either Award #1 or #2: both awards were restricted to specified claims of the appellants and that it was for the trial judge to make the necessary factual findings to determine whether the parties agreed that the appraisals finally determined the appellants’ rights to make claims under the building loss and valuable papers loss heads of coverage.

3. No

The Court found that the motion judge erred in striking the Claim against C’s adjuster by applying an incorrect legal principle and by failing to accept as true the material facts pleaded against C’s adjuster personally. The Court noted that the motion judge erred in law when he stated: “If an employer is vicariously liable for the conduct of its employees (who are acting in the course of their duties) there is no independent action against the employees”. Conversely, the Court set out the law that confirms that an employee acting in the context or course of employment can be sued and held personally responsible in law for their tortious conduct.

The appellants’ Claim and Amended Statement of Claim alleged facts that would have given rise to an independent actionable wrong for which the appellants might be entitled to recovery, separate and apart from the underlying claims against C. The Claim included allegations of negligence on the part of C’s adjuster that were distinct from the negligence claims against C, including that C’s adjuster personally acted negligently when he did not secure experts to address the appellants’ position on building loss and that C’s adjuster defamed the appellants.

The motion judge also erred by failing to accept as true the material facts pleaded against C’s adjuster. When assessing whether to strike out a pleading under r. 21.01 on the basis that it discloses no reasonable cause of action, the court must accept as true the material facts as pleaded. The Court noted that the motion judge further erred by only considering the Claim and by not considering the additional particulars in the draft amended statement of claim. The Court held that in reading the Claim generously, and accepting the allegations in it to be true, it could not be said that the appellants’ claims against C’s adjuster personally had no reasonable prospect of success.


Wong v. Lui, 2023 ONCA 272

[Gillese, Tulloch and Roberts JJ.A.]

Counsel:

N. Brown and A. Hussain, for the appellant City of Toronto
J. Binavince, for the respondents

Keywords: Torts, Negligence, Public Authorities, Negligent Inspection, Statutory Interpretation, Plain Meaning, Legislative Purpose, Civil Procedure, Limitation Periods, Ultimate Limitation Period, Capacity, Minors, Determination of Issue Before Trial, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, ss. 6, 7, 15(2), 15(4)(b), Limitations Act, R.S.O. 1980, c. 240, s. 47, Building Code, O. Reg. 332/12, Statute of Merton, 1235, 20 Hen. 3, c.1, c.8, Statute of Limitations, 1540, 32 Hen. 8, c.2, Statute of Limitations, 1623, 21 Jac. 1, c. 16, Rules of Civil Procedure, rr. 1.03, 7.01(1), 21.01(1)(a), York Condominium Corporation No. 382 v. Jay-M Holdings Limited, 2007 ONCA 49, Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Deaville v. Boegeman (1984), 14 D.L.R. (4th) 81 (Ont. C.A.), Sable Offshore Energy Inc. v. Canada (Customs and Revenue Agency), 2003 FCA 220, Canaccord Capital Corporation v. Roscoe, 2013 ONCA 378, Levesque v. Crampton Estate, 2017 ONCA 455, McLean v. British Columbia (Securities Commission), 2013 SCC 67, Papamonolopoulos v. Board of Education for the City of Toronto (1986), 56 O.R. (2d) 1 (C.A.), Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, Mumford v. Health Sciences Centre (1987), 92 D.L.R. (3d) 64 (Man. C.A.), Stoddard v. Watson, [1993] 2 SCR 1069, Novak v. Bond, [1999] 1 S.C.R. 808, Bisoukis v. Brampton (City) (1999), 46 O.R. (3d) 417 (C.A.), R. v. D.L.W., 2016 SCC 22, Azzeh (Litigation Guardian of) v. Legendre, 2017 ONCA 385, Baig v. Mississauga, 2020 ONCA 697, Ruth Sullivan, The Construction of Statutes, 7th ed (Toronto: LexisNexis Canada, 2022), at §2.03, Williams, Limitation of Actions in Canada, 2nd ed (Toronto: Butterworths, 1980), at p. 24, William Ballentine, A Treatise on the Statute of Limitations (New York: C. Wiley, 1812), at p. 9, Henricus de Bractona, De legibus et Consuetudinibus Angliae, Volume 2 (c. 1210-1268), Graeme Mew, The Law of Limitations, 3rd ed (Toronto: LexisNexis Canada, 2016), at p. 4, Limitations Act Consultation Group, Recommendations for a New Limitations Act: Report of the Limitations Act Consultation Group (Toronto: Ministry of the Attorney General, 1991) at 1, Peter St. John Langan, Maxwell on the Interpretation of Statutes, 12th ed (London: Sweet & Maxwell, 1969) at p. 116

facts:

The appellant appealed from the dismissal of its motion to dismiss the respondents’ negligence claims involving building permits from 1987 opened by the appellant. The 1987 building permits were issued in relation to defective construction carried out on their home prior to the respondents’ purchase. The appellant argued that those claims were statute-barred because the respondents commenced their action well after the expiry of the 15-year ultimate limitation period under s. 15(2) of the Limitation Act, 2002 (the “Act”). The parties agreed that, but for the application of the tolling provisions of s. 15(4) of the Act, the ultimate 15- year limitation period under s. 15(2) in relation to the claim regarding the 1987 building permits would have expired on January 1, 2019.

The appellant had brought a motion under r. 21.01(1)(a) of the Rules of Civil Procedure for the determination of a question of law involving the interpretation of s. 15(4)(b) of the Act. It sought a declaration that s. 15(4)(b) of the Act does not toll the ultimate 15-year limitation period where a plaintiff does not have a claim until he or she is an adult and, for s. 15(4)(b) to apply, a plaintiff must have a claim while the plaintiff is a minor. The appellant further argued on the motion that the ultimate 15-year limitation period in which to bring an action relating to the 1987 building permits had expired on January 1, 2019, more than two years before the respondents commenced their action on July 7, 2021.

The motion judge determined that the ultimate limitation period under s. 15(2) did not run from 2004, when the Act was passed and the ultimate limitation period was imposed, to 2006, when the respondent turned 18. As a result, the motion judge concluded that the ultimate limitation period did not begin to run until Ms. Wong reached the age of majority on July 11, 2006. In interpreting s. 15(4)(b) of the Act, the motion judge rejected the appellant’s submissions that s. 15(4)(b) was conditional on a plaintiff accruing a cause of action at the time she or he was a minor. She reasoned that, if that were the intended legislative purpose, the legislature “would have used express language to that effect – as it did in s. 47 of the Former Act.” She found that any jurisprudence considering s. 47 of the former Limitations Act, R.S.O. 1980, c. 240 (the “Former Act”), had no application because it was “markedly different” from s. 15(4)(b) of the current Act. Therefore, the motion judge held that the action was not statute-barred.

issue:

Did the motion judge err in determining that for s. 15(4)(b) of the Act to apply, the claim must arise while the plaintiff was a minor?

holding:

Appeal allowed.

reasoning:

Yes.

The Court stated that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. The court must adopt an interpretation of the statute that best fulfills the objects of the legislation and that avoids any inconsistency between its different provisions and avoids absurd consequences. The overall purpose of limitation statutes were to bar a claimant’s right to commence legal proceedings after a certain period of time. Finality in litigation was not the only object of limitations statutes. The Court noted that the Act and its predecessors strive to balance the plaintiff’s right to sue with the defendant’s right to certainty and finality.

This balance also underlies the purpose of the ultimate 15-year limitation period in s. 15(2) of the Act, as its purpose is to balance the concern for plaintiffs with undiscovered causes of action with the need to prevent the indefinite postponement of a limitation period and the associated costs relating to record-keeping and insurance resulting from continuous exposure to liability. Moreover, balanced against the right to finality is the acknowledgement that it would be unfair to bar a person’s right to make a claim while in a condition that renders them unable to take steps to pursue their rights. As a result, limitation periods are suspended by reason of incapacity and age as a mechanism for ensuring fairness to plaintiffs.

The Court stated that the motion judge did not consider the specific purposes of the exceptions for minors and those under disability when coming to her interpretation of s. 15(4)(b). By failing to interpret s. 15(4)(b) in light of the specific purposes of these exceptions, the motion judge deviated from the legislative purpose that had remained constant for several hundreds of years in the section’s predecessors, such as in s. 47 of the Former Act. In particular, the motion judge’s approach caused her to distinguish s. 47 of the Former Act from s. 15(4) of the current Act, finding that “[t]he language of s. 47 of the Former Act is markedly different from that of s. 15(4)(b) of the Act. Section 47 of the Former Act explicitly required a cause of action to accrue to a minor as a condition of suspending the limitation period. Such an express condition is absent from the text of s. 15(4)(b) of the current Act.” This was an error of law, as the different language did not derogate from the underlying purpose of the relevant section in each Act.

The Court stated that limitation periods for minors are tolled because they are presumed to be incapable of adequately looking after his own affairs, including the bringing of actions. This purpose informs and continues into the present Act. Nothing in the text of s. 15(4)(b) ousts the historical public purpose reflected in s. 47 of the Former Act and its predecessors. Without express language or legislative intention to the contrary, it is presumed that the legislature did not intend to make significant changes to the law, as it is “improbable that Parliament would depart from the general system of law without expressing its intention with irresistible clearness”.

Furthermore, the motion judge failed to apply a contextual and purposive approach to s. 15(4)(b). Importantly, she failed to give effect to all the words in s. 15(4)(b), as well as to its meaning and purpose in relation to s. 15(2) and the entirety of the Act. As a result, the analysis must be undertaken afresh. The phrase in s. 15(4)(b), that “the person with the claim is a minor”, links the person with the claim to the present state of being a minor. If it were meant to include persons who were minors at any time during the running of the ultimate limitation period, the text would have included the past tense, namely, “the person with the claim who was or is a minor”. It did not do so. Moreover, the phrase, “is not represented by a litigation guardian in relation to the claim”, is conjunctive with the words, “the person with the claim”. Again, the use of the present tense indicates the present time when the person who has the claim is a minor.

Applying the requisite contextual and purposive approach, the only interpretation on a plain reading of s. 15(4)(b) that is consonant with the other provisions of the Act, the fundamental purpose behind limitations statutes, and the centuries-old policy objectives of the legislation with respect to minors is that it only postpones the running of the ultimate limitation period for minors who have claims that arose when they were minors.

It was common ground that the respondent had no claim while she was a minor. Further, she did not have standing to bring a claim until she purchased the property on August 9, 2019. The Court held that the ultimate limitation period expired on January 1, 2019, being 15 years from the date of the Act, and the respondent had not met her onus of proving that she was incapable of bringing a claim on account of s. 15(4). Therefore, the claim was statute-barred.


SHORT CIVIL DECISIONS

KVM Investments Limited v. Isabella, 2023 ONCA 278

[Doherty, Zarnett and Sossin JJ.A.]

Counsel:

D. Baker, for the appellant
Z. Pringle, for the respondent

Keywords: Civil Procedure, Summary Judgment, Costs, KVM Investments Limited v. Isabella, 2022 ONSC 4125

Molani Estate v. Iran, 2023 ONCA 279

[Doherty, Zarnett and Sossin JJ.A.]

Counsel:

V. Genova and A. Ottaviano, for the respondents/moving parties The Estate of YYY and XXX
T. Arndt, for the appellants/responding parties O.A. et al.
No one appearing for the respondent/responding party Ukraine International Airlines PJSC/ Ukraine International Airlines

Keywords: Civil Procedure, Class Proceedings, Opting-Out, Litigation Guardians, Interlocutory Orders, Divitaris v. Gerstel, 2022 ONCA 60, Huang v. Braga, 2017 ONCA 268, 30 E.T.R. (4th) 19, Must v. Shkuryna, 2015 ONCA 665, Willmot v. Benton, 2011 ONCA 104

Siebold v. Lawand , 2023 ONCA 276

[Feldman, Gillese and Huscroft JJ.A.]

Counsel:

A. Moslehi, for the appellant
B. S., acting in person (by Zoom)

Keywords: Civil Procedure, Conflict of Laws, Foreign Judgments, Recognition, Enforcement, Adjournment, Prejudice, Judicial Discretion

Children’s Aid Society of London and Middlesex v. T.E., 2023 ONCA 270

[Pepall, van Rensburg and Benotto JJ.A.]

Counsel:

J. Gagne, for the appellant, T.M.
R. C. Hammond, for the respondent Children’s Aid Society of London and Middlesex
A. J. P. Tremain, for the respondent T.E.
K. Hensel, D. Snider and K. Tsang, for the respondent J.G.
N. Hill-Dolson, for the respondent L.D. (on behalf of Oneida Nation of the Thames)
T. Law, for the respondent O.T.
S. Clarke, for the intervenor Association of Native Child and Family Services Agencies of Ontario

Keywords: Family Law, Child Protection, Civil Procedure, Appeals, Costs, Family Law Rules, O.Reg.114/99, Children’s Aid Society of the Region of Peel v. L.M., 2022 ONCA 379, Selznick v. Selznick, 2013 ONCA 35


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.