COURT OF APPEAL SUMMARIES (May 20 – May 24)

By John Polyzogopoulos on May 25, 2024

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Good evening.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of May 20, 2024.

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In Amalgamated Transit Union, Local 113 v. Ontario, the Court dismissed the appeal, agreeing with the application judge’s conclusion that the Toronto Transit Commission Labour Disputes Resolution Act, 2011, which takes away TTC workers’ right to strike, violates their 2(d) Charter right to freedom of assembly, which violation was not justified under s. 1 of the Charter. Justice Nordheimer dissented.

In Walpole v. Crisol, a child was seriously injured by a dog bite to the face. The parents sued their hosts who owned the dog, and the landlord who owned the home (the hosts were tenants). By way of summary judgment, the claim of negligence and occupiers’ liability against the landlord was dismissed. The Court upheld that decision.

MGW-Homes Design Inc. v. Pasqualino deals with the proper appeal route from an adjudicator’s determination under the Construction Act. It is to the Divisional Court under s. 71 of the Construction Act.

In Zaidi v. Syed Estate, the Court dismissed an appeal from the application judge’s refusal to enforce a settlement agreement on the basis of undue influence, unconscionability and misrepresentation.

Fung Loy Kok Institute of Taosim v. Municipal Property Assessment Corporation is a property tax case. The issue was whether the sites where tai chi classes were being held were “places of worship”, exempting the landowner from property tax payable. The Court dismissed the appeal, agreeing with the courts below that there was no tax exemption available.

In World Medpharm Inc. v. York Region Standard Condominium Corporation No. 1279, the Court dismissed a motion to stay, pending appeal, an order that enforces the terms of a condo declaration and prevents the appellants from operating a pharmacy at the condominium complex.

In One Clarendon Inc. v. Finlay, an appeal was dismissed for failure to comply with an order to post security for the costs of the appeal.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Walpole v. Crisol, 2024 ONCA 400

Keywords: Torts, Negligence, Occupiers’ Liability, Civil Procedure, Partial Summary Judgment, Dog Owners’ Liability Act, R.S.O. 1990 c. D.16, s.3(1), Occupiers’ Liability Act, R.S.O. 1990, c. O.2, s.3(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s.134(1)(a), Hudyma v. Martin, [1991] O.J. No. 1184, Elbaum v. York Condominium Corporation No. 67, 2014 ONSC 1182, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27

World Medpharm Inc. v. York Region Standard Condominium Corporation No. 1279, 2024 ONCA 417

Keywords: Real Property, Condominiums, Permitted Uses, Declarations, Compliance, Civil Procedure, Stay Pending Appeal, Condominium Act 1998, S.O. 1998, c. 19, s. 134, Rules of Civil Procedure, r. 63.02(b), RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Toronto Standard Condominium Corporation No. 1908 v. Stefco Plumbing & Mechanical Contracting Inc., 2014 ONCA 696

One Clarendon Inc. v. Finlay, 2024 ONCA 414

Keywords: Civil Procedure, Appeals, Orders, Security for Costs, Enforcement, Striking Appeal, Rules of Civil Procedure, r 61.06(2), One Clarendon Inc. v. Finlay, 2024 ONCA 323, 9383859 Canada Ltd. v. Navaratnam, 2021 ONCA 210, 9383859 Canada Ltd v. Saeed, 2023 ONCA 627

Zaidi v. Syed Estate, 2024 ONCA 406

Keywords: Wills and Estates, Contracts, Real Property, Unjust Enrichment, Defences, Undue Influence, Unconscionability, Misrepresentation, Remedies, Rescission, Civil Procedure, Settlements, Enforcement, Procedural Fairness, Applications, Trial of Issues, Singh v. Trump, 2016 ONCA 747, Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 86, Leslie v. Mississauga (City) (2006), 81 O.R. (3d) 415, Cashbloom Canada, ULC v. Ridgeway Design Centre Inc., 2017 ONSC 2994, Voreon Inc. v. Matas Management Services Inc., 2023 ONCA 745, Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422

Keywords: Contracts, Construction, Civil Procedure, Interim Adjudication, Appeals, Jurisdiction, Construction Act, R.S.O. 1990, c. C.30, Construction Lien Act, R.S.O. 1990, c. C.43, Construction Lien Act, 1983, S.O. 1983, c. 6, Mechanics’ Lien Act, R.S.O. 1970, c. 267), Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. (2001), 54 O.R. (3d) 76 (C.A.), TRS Components Ltd. v. Devlan Construction Ltd., 2015 ONCA 294, Pasqualino v. MGW-Homes Design Inc., 2022 ONSC 5632, Courts of Justice Act, R.S.O. 1990, c. C.43, Teepee Excavation & Grading Ltd. v. Niran Construction Ltd. (2000), 49 O.R. (3d) 612 (C.A.), Bird Construction Co. v. C.S. Yachts Ltd. (1990), 38 O.A.C. 147 (C.A.), Durall Construction Ltd. v. W.A. McDougall Ltd. (1979), 25 O.R. (2d) 371

Amalgamated Transit Union, Local 113 v. Ontario, 2024 ONCA 407

Keywords: Labour and Employment, Collective Bargaining Rights, Public Service Employees, Constitutional Law, Freedom of Association, Oakes Test, Toronto Transit Commission Labour Disputes Resolution Act, 2011, S.O. 2011, c.2, Canadian Charter of Rights and Freedoms, ss.1, 2(d), Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, R. v. Oakes, [1986] 1 S.C.R. 103, Ontario English Catholic Teachers Association v. Ontario (Attorney General), 2024 ONCA 101, Société des casinos du Québec inc. v. Association des cadres de la Société des casinos du Québec, 2024 SCC 13, Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, PSAC v. Canada, [1987] 1 S.C.R. 424, RWDSU v. Saskatchewan, [1987] 1 S.C.R. 460, Dunmore v. Ontario (Attorney General), 2001 SCC 94, Alliance des professionnels et des professionnelles de la Ville de Québec c. Procureur général du Québec, 2023 QCCA 626, R. v. Ndhlovu, 2022 SCC 38, U.F.C.W., Local 1518, v. KMart Canada Ltd., [1999] 2 SCR 1083, R. v. K.R.J., 2016 SCC 31, R. v. Michaud, 2015 ONCA 585, Gordon v. Canada (Attorney General), 2016 ONCA 625, leave to appeal refused, [2016] S.C.C.A. No. 444, [2016] S.C.C.A. No. 445, RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, Carter v. Canada (Attorney General), 2015 SCC 5, R. v. Sharma, 2022 SCC 39, Canadian Western Bank v. Alberta, 2007 SCC 22, R. v. Advance Cutting & Coring Ltd., 2001 SCC 70, Libman v. Quebec (Attorney General), [1997] 3 S.C.R. 569, Canada (Attorney General) v. JTI-Macdonald Corp., 2007 SCC 30, Retail, Wholesale and Department Store Union v. Saskatchewan, [1987] 1 S.C.R. 460

Fung Loy Kok Institute of Taosim v. Municipal Property Assessment Corporation, 2024 ONCA 415

Keywords: Municipal Law, Taxation, Real Property, Exemptions, Places of Worship, Loi sur la fiscalité municipale, RLRQ, c. F-2.1, s. 204, Assessment Act, R.S.O. 1990, c. A.31, s. 3(1), Ontario (Environment and Climate Change), 2019 ONCA 70, Sarnia (City) v. River City Vineyard Christian Fellowship of Sarnia, 2015 ONCA 494, Re Singh and City of Sudbury (1975), 8. O.R. (2d) 377, Buenavista on the Rideau v. Regional Assessment Commissioner, Region No. 2 (1996), 28 O.R. (3d) 272, Diocese of Toronto Camps (Anglican Church of Canada) v. Municipal Property Assessment Corp. (2004), 246 D.L.R. (4th) 170, Holy Theotokos Convent v. Whitchurch-Stouffville (Town), 2007 CanLII 4780, Les Sœurs de La Visitation D’Ottawa v. The City of Ottawa, [1952] O.R. 61, Keewaydin Camps Corporation Canada v. Temagami (Municipality), 2007 CanLII 15800, Institut de taoïsme Fung Loy Kok c. Ville de Montréal, 2021 QCCS 3873, Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon‑Secours, [1994] 3 S.C.R. 3, Ottawa Salus Corp. v. Municipal Property Assessment Corp. (2004), 69 O.R. (3d) 417, Hodkin & Anor, R. (on the application of) v. Registrar-General of Births, Deaths and Marriages, [2013] UKSC 77

Short Civil Decisions

Yan v. Persaud, 2024 ONCA 416

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Courts of Justice Act, R.S.O. 1990, c C.43, s. 19(1)(b)

Construction Distribution & Supply Company Inc. v. Continental Casualty Company (CNA Insurance), 2024 ONCA 405

Keywords: Contracts, Interpretation, Insurance, Commercial General Liability, Coverage, Duty to Defend, Zurich Insurance Co. v. 686234 Ontario Ltd., 62 O.R. (3d) 447, (C.A.), Hemlow Estate v. Co-operators General Insurance Company, 2021 ONSC 664, aff’d 2021 ONCA 908, ING Insurance Company of Canada v. Miracle, 2011 ONCA 321

2137073 Ontario Inc. v. Furney, 2024 ONCA 421

Keywords: Civil Procedure, Costs

2137073 Ontario Inc. v. Furney, 2024 ONCA 428

Keywords: Civil Procedure, Orders, Enforcement, Writs of Possession, Stay of Proceedings, Costs, Rules of Civil Procedure, rr. 63.01, 63.02(b), Toronto (City) v Ontario (Attorney General), 142 O.R. (3d) 481, 2018 ONCA 761

CIVIL DECISIONS

Walpole v. Crisol, 2024 ONCA 400

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

Counsel:

A. Clausi, I. Mair and M. Giugaru, for the appellants

S. Walsh, for the respondents J.C. and M.C.

facts:

While visiting the home of the defendants, the appellants’ six-year-old daughter was sitting on the floor petting the defendants’ dog, Chestnut, when the dog bit her on the face, badly injuring her.

The defendants rented their home from the owners of the property, the respondents, neither of whom were present when the appellants’ daughter was bitten.

The appellants commenced an action against the owners of the dog and the respondents. The respondents brought a motion for partial summary judgment, seeking to have the action against them dismissed. The motion judge agreed and dismissed the action as against the respondents.

issue:

Did the motion judge err in concluding that the appellants had not demonstrated that their claim against the respondents presented any genuine issues requiring a trial?

holding:

Appeal dismissed.

reasoning:

No.

Although the motion judge erred in law by concluding that the Dog Owners’ Liability Act (“DOLA”) barred the respondents from being found liable under the Occupiers’ Liability Act (“OLA”), the motion judge also held that even if she was wrong in her interpretation of the DOLA, she would still have granted summary judgment in favour of the respondents.

The Court was satisfied that the record as a whole clarified and explained why the motion judge concluded that the appellants’ claim against the respondents did not present any genuine issues that required a trial.

The evidence established that the respondents were absentee landlords of the property where the dog owners resided. The dog’s owners only acquired Chestnut sometime after they became the respondents’ tenants. Under s. 14 of the Residential Tenancies Act, the respondents could not have prevented their tenants from keeping a dog on the rented property. There was no evidence that the respondents ever assumed any responsibility for Chestnut, or that they asserted any control over who their tenants could choose to invite onto the rented property.

World Medpharm Inc. v. York Region Standard Condominium Corporation No. 1279, 2024 ONCA 417

[Zarnett J.A. (Motions Judge)]

Counsel:

B. Rutherford, for the moving parties 2352711 Ontario Inc., cob as Enhanced Care Pharmacy Thornhill and 2819826 Ontario Inc.

D. Golden and M. Hochberg, for the responding parties World Medpharm Inc. and World Medpharm (2014) Inc., cob as World Pharmacy

C. Dunn, for York Region Standard Condominium Corporation No. 1247

facts:

The appellants 2352711 Ontario Inc., cob as Enhanced Care Pharmacy Thornhill and 2819826 Ontario Inc. sought the stay of an order under the Condominium Act that prevents them from operating a pharmacy at York Region Standard Condominium Corporation No. 1247 (“YRSCC 1247”), located on Yonge Street in Markham.

York Region Standard Condominium Corporation No. 1279 (“YRSCC 1279”) is located nearby, at 7181 Yonge Street. They were developed in common, as “World on Yonge” by the same developer, who was the Declarant for both. The Declarations for both condominiums provide that a commercial unit may not be used to operate a pharmacy without the consent of the Declarant.

The Declarant entered into an Exclusive Use Agreement dated June 27, 2018, with the responding parties (“Medpharm”) which allowed them to be the exclusive operator of a pharmacy within World on Yonge.

From about 2013, 2337636 Ontario Inc. (“233”) operated a medical clinic on Yonge Street close to, but not in, either of the condominium buildings. A dispensary pharmacy service was operated on the site by the appellant 2352711 Ontario Inc., operating as Enhanced Care Pharmacy Thornhill (“Enhanced Care”).

In March 2022, the appellant 2819826 Ontario Inc. (“281”) purchased units in YRSCC 1247 and subsequently leased them to 233 so that it could move the medical clinic into YRSCC 1247. 233 then sublet approximately 10 percent of the area of the units to Enhanced Care so that it could continue the pharmacy and dispensary service from the medical clinic’s new location.

In July 2023, Enhanced Care began operating a pharmacy from the area it had sublet within the medical clinic in YRSCC 1247.

The lease from 281 to 233 permits the premises to be used as a medical clinic but prohibits a pharmacy or pharmaceutical dispensary. The sublease from 233 to Enhanced Care provides that 233 will indemnify Enhanced Care if the latter cannot use the premises for their intended use.

Medpharm applied to stop the appellants from operating or permitting the operation of a pharmacy. Asserting a right to enforce the Declaration of YRSCC 1247 on behalf of the Declarant, relying on s. 134 of the Condominium Act, which permits, among others, a declarant to bring an application in the Superior Court for an order for compliance with any provision of the Act or declaration. Section 119 of the Act also requires any owner or occupier of a unit to comply with the condominium’s Declaration.

The application judge granted the application under s. 134. On February 27, 2024, the appellants were ordered to immediately cease operating a pharmacy in YRSCC 1247 and/or the building at 7163 Yonge Street, where YRSCC 1247 is located. They were also ordered to immediately come into compliance with the Declaration for YRSCC 1247 including its provisions preventing pharmacy uses without the Declarant’s consent.

The moving parties filed a notice of appeal from that order dated March 19, 2024. They moved to stay the order under r. 63.02(b), pending the hearing of the appeal.

issue:

Is granting the stay in the interests of justice?

holding:

Motion dismissed.

reasoning:

No.

The test for staying an order pending appeal requires the court to consider the following three factors: (1) the merits of the appeal to ensure, on a preliminary assessment, that there is a serious question to be tried; (2) whether the moving party would suffer irreparable harm if the stay were refused; and (3) the balance of inconvenience, that is, which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the appeal.

Although the grounds of appeal met the relatively low bar of raising a serious issue for appeal, they were not sufficiently strong to overcome the weakness of the appellants’ request relating to the other factors relevant to a stay.

There was no evidence of irreparable harm suffered by the moving parties. The appellant 281 owned the units but did not operate the pharmacy or the clinic. There was no evidence of harm, beyond remediable financial harm (such as loss of dispensing fees), suffered by Enhanced Care, which operated the pharmacy until the application judge’s order. Enhanced Care’s sublease from 233 entitled it to indemnity from 233, should Enhanced Care not be able to use the premises as a pharmacy.

While the appellants pointed to the absence of evidence that Medpharm suffered financial harm due to the operation of the Enhanced Care pharmacy, the Court was not satisfied that the balance of convenience favoured a stay.

In addition, the application judge’s order was made on February 27, 2024. Nearly two months passed before the appellants brought a motion for a stay. The status quo ante was not a controlling consideration.

One Clarendon Inc. v. Finlay, 2024 ONCA 414

[Zarnett J.A. (Motions Judge)]

Counsel:

S. Sood, for the moving party

No one appearing for the responding parties

facts:

The responding parties on this motion for security for costs had an appeal pending in the Court from two orders of Black J. of the Superior Court. The orders struck their defence and counterclaim, ordered them to pay rental arrears and costs, terminated their tenancy, and granted their landlord (“Clarendon”) leave to obtain a writ of possession for the rented premises.

Clarendon obtained an order from Lauwers J.A. on April 26, 2024 (the “April 26 Order”), requiring the respondents to post security for costs of the appeal and the proceedings below by May 3, 2024, and lifting the automatic stay that applied to the writ of possession: One Clarendon Inc. v. Finlay, 2024 ONCA 323. The Court noted that once the stay was lifted, Clarendon proceeded to regain possession of the premises by evicting the respondents. The respondents had not applied for a panel review of the April 26 Order.

Clarendon sought an order dismissing the respondents’ appeal under r. 61.06(2) of the Rules of Civil Procedure, which provides that an appeal may be dismissed where an appellant has not complied with an order for security for costs.

issues:

Should the appeal be dismissed as a result of the respondents’ failure to post security for costs?

holding:

Motion granted.

reasoning:

Yes.

Rule 61.06(2) permits a judge to dismiss an appeal if an appellant fails to comply with an order for security for costs.

Once a failure to comply has been established, the onus is on the defaulting appellant to provide compelling reasons why dismissal of the appeal is not in the interests of justice: 9383859 Canada Ltd. at para. 11. In making such a determination, deference is owed to the decision to award security, and the ground on which security was ordered is important. Impecuniosity and the reasons for it may be considered, as may the merits of the appeal: 9383859 Canada Ltd at para. 8.

The respondents complained that the order for security should not have been made, and that the request for it should have been adjourned. However, that submission flied directly in the face of the requirement that, on this motion, deference was to be shown to the decision to award security. As the court stated in Saeed, at para. 8, an “appellant who simply re-argues that security is unwarranted will likely be unsuccessful” in avoiding dismissal. The ground on which security was ordered, especially as it related to the merits of the appeal, reinforced the conclusion that a compelling reason to avoid dismissal was absent. The order for security for costs was premised on a finding that the appeal appeared frivolous and vexatious.

In addition to the deference owed to the finding that the appeal appeared to be frivolous and vexatious, the Court noted the following. The writ of possession had been enforced and the respondents had been evicted; the spectre of mootness therefore hovered over those parts of their appeal that related to termination of the tenancy and possession of the premises. In so far as the notice of appeal complained of the striking of their defence and counterclaim on March 12, 2024, that was based on the respondents’ failure to pay the rent required by the March 2023 Order – an order that they had not successfully appealed. Once their pleadings were struck, as Black J. noted, Clarendon was entitled to the relief granted on March 27, 2024, and the letter that the respondents had sent to explain their non-attendance on that date did “not contest the substance of Clarendon’s request.” Finally, although the notice of appeal made allegations of bias against Black J., nothing in the record for this motion supported those allegations.

Finally, the Court noted that under r. 56.05, made applicable to appeals by r. 61.06(1.1), the respondents were prevented from proceeding with their appeal without leave until the security ordered has been posted.

Zaidi v. Syed Estate, 2024 ONCA 406

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

Counsel:

K. Randhawa, for the appellant

R. S. Mann, for the respondents

facts:

The appellant, Mr. Z, commenced an application in the Superior Court against the estate of Mr. S (his uncle) and the estate trustee, Ms. N, who is the late Mr. S’s widow (and Mr. Z’s aunt). Mr. Z was seeking to enforce a settlement agreement dated April 7, 2021. He claimed that he was entitled to payment by the estate of $94,283 and accrued interest under the agreement. Ms. N opposed enforcement of the settlement. The underlying dispute was in relation to a condominium unit purchased by Mr. S in 2017 (the “Unit”). The Unit was leased to Mr. Z for himself and for a sister of Mr. S and her two children.

Mr. Z claimed that sometime between April and June of 2019, Mr. S agreed to sell the Unit to him for $420,000 after Mr. Z became a permanent resident. He deposed that after they reached this oral agreement, he stopped paying rent on the Unit, and all of the monthly payments he made thereafter (which increased from $1,600 per month to $2,450 and then to $2,495) were used to service the mortgage and were on account of the purchase price.

Ms. N retained counsel after Mr. Z demanded payment in early July 2021. In a letter dated July 7, 2021, Ms. N’s lawyer told Mr. Z that his client disputed the alleged agreement on various grounds, “more particularly that the [settlement agreement] was executed involuntarily by [her]”. He advised that the sum of $94,283 would be held back from the proceeds of sale of the Unit and paid into court unless there was a settlement. In response, Mr. Z retained his own counsel who insisted on a holdback of $109,283 from the sale of the Unit ($94,283 plus $15,000 security for costs), which amount was held in trust when the sale of the Unit was closed on July 30, 2021, and eventually paid into court. In November 2021, Mr. Z commenced the underlying application to enforce the settlement agreement.

issues:

Did the application judge err in denying Mr. Z procedural fairness by deciding the application on grounds that had not been pleaded?
Did the application judge err in determining credibility issues, and ought he to have directed a trial?
Did the application judge fail to consider Mr. Z’s alternative claim for unjust enrichment?
Did the application judge fail to respect the principle of the finality of settlements?

holding:

Appeal dismissed.

reasoning:

There was no procedural unfairness to Mr. Z. The application judge provided a remedy that was specifically requested by Ms. N when he refused to enforce the settlement agreement. While only one of the three alternative legal bases relied on by the application judge – undue influence – had been specifically raised by Ms. N, there was no question that she was relying on the circumstances leading to the settlement agreement in resisting its enforcement, and Mr. Z put forward his own evidence and challenged Ms. N on her account of the various circumstances. This was not a case where a judge stepped outside of the issues that were joined by the parties to find liability thereby depriving a party of the right to a fair opportunity to meet the case.

The specific legal label attached by a party to their claim or defence is not determinative of whether an action has been decided outside the scope of the pleadings: see e.g., Tall Ships Development Inc at para. 94. The forms of action must be interpreted with a measure of common sense: Leslie at para. 15. And, as Perell J. noted in Cashbloom Canada, ULC at para. 6, the court will not take an overly technical approach to determining whether a claim or defence has been adequately pleaded.

Even if the Court accepted that that the application judge went too far in relying on innocent misrepresentation and unconscionability, which were not specifically asserted by Ms. N’s counsel, undue influence was expressly raised as a basis for setting aside the settlement agreement. The application judge, at para. 61 of his reasons, explained why the elements of rescission for undue influence had been satisfied in this case. He noted that, although there was no outright abuse of power, there was manipulation, cultural pressure, and coercion that compelled Ms. N to agree to the settlement agreement. The Court concluded that there was no basis to interfere with the application judge’s findings in relation to this ground for rescission of the settlement agreement.

The Court noted that there was no merit to this submission, and the application judge explained that (1) it was not necessary on the major issues to make findings of credibility or to choose between the competing versions of events in order to decide the case; and (2) he agreed with the parties that the case could be fairly resolved summarily. What was key was that Mr. Z had commenced an application seeking to enforce the settlement, and that neither party had sought the trial of an issue. Indeed, both sides urged the application judge to determine the case summarily and they indicated that no more evidence would be called if the matter went to trial.

The Court had agreed with Ms. N that, having chosen to proceed in this manner, Mr. Z could not have complained that it was inappropriate for the application judge to determine the matter as though there were competing motions for summary judgment: Voreon Inc. at para. 37. In any event, there was no reason to interfere with the application judge’s assessment that the matter was suitable for summary determination. This determination was entitled to deference on appeal, in the absence of an extricable error in principle, or a palpable and overriding error: Baywood Homes Partnership at para. 30. No such error had been demonstrated here.

Contrary to Mr. Z’s submissions, the application judge had not overlooked his claim for unjust enrichment. Mr. Z’s initial and reply factums in the application had not addressed the legal test for unjust enrichment or the evidence to assert a claim for unjust enrichment. Neither factum referred to a basis for a claim for compensation other than through the enforcement of the settlement agreement. Accordingly, it was understandable that the application judge did not address the issue of unjust enrichment. The claim was simply not before him. Rather, as already noted, counsel were firm in their mutual request that the application judge finally dispose of the application in a summary fashion and the focus was on the enforceability of the settlement agreement. There was therefore no error on the part of the application judge in failing to address unjust enrichment and no basis for the Court to direct a trial of that issue.

The application judge had not relied on subsequent events to rescind the settlement agreement. There was no information that came to light, or any other evidence, to suggest that Ms. N had a change of heart or otherwise with the benefit of hindsight was not prepared to complete the settlement. Rather, the application judge referred to the subsequent events in order to explain how the litigation came about. Ms. N first obtained legal advice after Mr. Z had sent an email to her nine days before the payment was due, demanding written confirmation that day of how the payment would be made, failing which he would register a caution on the Unit. The following day her lawyer notified Mr. Z that Ms. N disputed the enforcement of the agreement, including on the basis that it was executed “involuntarily”.

The application judge expressly acknowledged that there is a strong presumption in favour of the finality of settlements. However, relying on para. 28 of Deschenes, he went on to correctly state that a settlement agreement is a contract and can be set aside in the same way that a contract may be rescinded, including for innocent misrepresentation, undue influence or unconscionability.

The application judge’s approach was correct at law. He recognized that settlements are generally final, but he went on to review the evidence and to conclude that there was a legal basis for refusing enforcement of the settlement reached in this case. It was open to him to find on the evidence that Ms. N had entered into the settlement as a result of cultural and family pressures, and to rescind the settlement agreement on the alternative grounds that the agreement was procured through undue influence, that the terms of the agreement were unconscionable, and that the settlement was premised on a misrepresentation by omission when Ms. N was led to believe that the oral agreement between Mr. Z and her husband was enforceable.

MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422

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

Counsel:

J. Margie and J. Nathwani, for the appellant

K. Chaytor and C. Pasqualino, for the respondent

Keywords: Contracts, Construction, Civil Procedure, Interim Adjudication, Appeals, Jurisdiction, Construction Act, R.S.O. 1990, c. C.30, Construction Lien Act, R.S.O. 1990, c. C.43, Construction Lien Act, 1983, S.O. 1983, c. 6, Mechanics’ Lien Act, R.S.O. 1970, c. 267), Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. (2001), 54 O.R. (3d) 76 (C.A.), TRS Components Ltd. v. Devlan Construction Ltd., 2015 ONCA 294, Pasqualino v. MGW-Homes Design Inc., 2022 ONSC 5632, Courts of Justice Act, R.S.O. 1990, c. C.43, Teepee Excavation & Grading Ltd. v. Niran Construction Ltd. (2000), 49 O.R. (3d) 612 (C.A.), Bird Construction Co. v. C.S. Yachts Ltd. (1990), 38 O.A.C. 147 (C.A.), Durall Construction Ltd. v. W.A. McDougall Ltd. (1979), 25 O.R. (2d) 371

facts:

MGW-Homes Design Inc. (“MGW”) appealed an order vacating a writ of enforcement related to an adjudicator’s determination under the Construction Act. The appeal hinged on whether the order constituted a “judgment” under s. 71(1) of the Act, which would place the appeal within the jurisdiction of the Divisional Court. MGW, a contractor, had filed a lien and sought interim adjudication after a dispute with homeowner D.P, who paid security into court. The adjudicator ruled in MGW’s favor, but MGW failed to provide the required notice upon filing the determination with the court. Consequently, the motion judge vacated the writ due to this notice failure and barred MGW from further enforcement, awarding costs to D.P. The appeal was dismissed based on case law interpreting “judgment” broadly.

issue:

Did the Court have jurisdiction to hear the appeal?

holding:

Appeal dismissed.

reasoning:

No.

The Court reviewed the broad purpose of the Construction Act, which aims for efficiency in dealing with construction disputes. The Court examined previous case law that consistently interpreted the term “judgment” broadly under s. 71(1) of the Construction Act to include various types of orders and decisions. Subsection 71(1) provides that an appeal lies to the Divisional Court. Based on this analysis, the Court concluded that adjudication under the Construction Act was a “proceeding under the Act” and that the motion judge’s order on the enforceability of the adjudicator’s determination was a “judgment under the Act“. Therefore, the Court concluded that the appeal should be heard by the Divisional Court, which it, in fact, was, before this decision was released.

Amalgamated Transit Union, Local 113 v. Ontario, 2024 ONCA 407

[Nordheimer, Copeland and Dawe JJ.A.]

Counsel:

R. Fox, D. Huffaker and P. Atkinson, for the appellant

I.J. Fellows, J. Birenbaum, K. Allen, E. Home and A. Zichy for the respondents Amalgamated Transit Union, Local 113, MA and KM

E. Nurse and D. Paul, for the respondents Canadian Union of Public Employees, CUPE Local 2 and GF

facts:

In 2011, the Ontario legislature passed the Toronto Transit Commission Labour Disputes Resolution Act, 2011 (the “TTC Act”). The TTC Act eliminated TTC workers’ right to engage in any form of strike activity, and also barred the TTC from locking out its employees. If the TTC and its unions were unable to resolve issues through collective bargaining, the TTC Act required them to submit to binding interest arbitration.

In 2015, four years after the TTC Act was enacted, the Supreme Court of Canada released a landmark labour law decision, Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, (“SFL”). In SFL, the Court reversed a series of its previous decisions and found for the first time that the right to strike is an integral aspect of the right of freedom of association enshrined in s. 2(d) of the Canadian Charter of Rights and Freedoms.

In the wake of SFL, the respondents applied to the Ontario Superior Court of Justice for a declaration that the TTC Act violated s. 2(d) of the Charter and could not be justified under s. 1.

In May 2023, the application judge found the TTC Act unconstitutional and struck it down, effective immediately. The TTC Act violated s. 2(d) of the Charter, and the government failed to meet its onus of justifying the breach under any of the branches of the Oakes test.

issues:

Did the application judge err by finding the TTC Act violates s. 2(d) of the Charter?
Did the application judge make errors in his s. 1 analysis such that he ought to have found that any s. 2(d) Charterbreach was justified under s. 1?

holding:

Appeal dismissed.

reasoning:

The Court agreed with the respondent’s position on this legal point. The respondents agreed with the application judge’s conclusion that the TTC Act violated s. 2(d) of the Charter, but submitted that his case-specific and evidence-based analysis was more complicated than it needed to be. They argued that after the majority decision in SFL, legislation that entirely removes the right to strike after the expiry of a collective agreement, as the TTC Act does, will necessarily violate s. 2(d) of the Charter.

It is well-established that in general, the question of whether legislation infringes the s. 2(d) Charter right to collective bargaining must be determined by conducting a two-part inquiry into whether the law interferes with activities that fall within the scope of the s. 2(d) right and, if so, whether the legislation “substantially interferes” with the right.

However, Abella J.’s majority reasons in SFL held that because of the importance of the right to strike to the collective bargaining process, any complete ban on unionized workers’ ability to strike after the expiry of a collective agreement will invariably “substantially interfere” with their s. 2(d)-protected collective bargaining rights. Since the right to strike is now recognized as an integral aspect of the s. 2(d) right to collectively bargain, any law that eliminates the right to strike entirely will “substantially interfere” with the affected workers’ s. 2(d) fundamental freedoms. Since the TTC Act entirely eliminates TTC employees’ ability to strike during the collective bargaining process, it necessarily follows that the legislation “substantially interferes” with their s. 2(d) collective bargaining rights to such an extent that these rights are infringed. Accordingly, no case-specific inquiry into how eliminating the right to strike has affected the collective bargaining process was needed.

Moreover, while the question of whether interest arbitration serves as a constitutionally adequate substitute for the right to strike may be an important factor in the Oakes test analysis, it has no bearing on the threshold question of whether eliminating the right to strike violates s. 2(d).

It follows that it was not necessary at this stage of the Charter analysis for the application judge to make any case-specific inquiry into exactly how the TTC Act’s removal of the right to strike has affected collective bargaining since 2011. Rather, the application judge could have simply found a breach of s. 2(d) based on the TTC Act’s complete elimination of TTC employees’ right to strike, and then gone on to consider whether this breach could be justified under s. 1.

While the application judge made some legal errors in his Oakes test analysis, the Court was not persuaded that any of these errors fatally undermined his conclusion that Ontario had not met its burden of justifying the breach of TTC workers’ s. 2(d) Charter rights.

Once it was determined that the TTC Act violates s. 2(d) of the Charter, the burden shifted to Ontario to justify the infringement under s. 1.

(1) Pressing and substantial object

The Court accepted that it was accurate in a literal and narrow sense to say that the Ontario legislature chose to ban TTC strikes and lockouts in order to “prevent disruptions of TTC services”. However, the goal of “preventing disruptions” was not a pressing and substantial legislative objective in and of itself, if the legislature had not also believed that these disruptions would cause significant public harms. This was reflected in the TTC Act’s preamble, which characterized the legislature’s concern as being that “[w]ork stoppages … and the resulting disruption of transit services give rise to serious public health and safety, environmental, and economic concerns.”

The Court agreed with the respondents that Ontario’s proposed framing of the TTC Act’s purpose was overly broad. However, the Court did not agree with the respondents that the application judge was correct to re-frame the Act’s legislative objective by asking whether Ontario had demonstrated that the TTC was an “essential service”. This further step was analytically unnecessary, and led the application judge to confuse the threshold screening at the first stage of the Oakes test with the balancing that must be conducted at the second stage of the Oakes analysis.

The application judge’s approach led him to embark on the second-stage Oakes proportionality inquiry prematurely. The proper question at the first stage of the s. 1 analysis was simply whether the harms that the government believed would arise if a TTC strike caused a transit system shutdown were so grave that the legislature’s goal of preventing these harms can be seen as “pressing and substantial”. The likelihood of any of these anticipated harms in fact arising from a TTC strike, and whether the probable gravity of these harms outweighed the impact on TTC employees of having their right to strike taken away, were separate questions that fell to be considered at the second stage of the Oakes test.

The Court agreed with Ontario that the application judge erred by finding that the TTC Act was not motivated by a pressing and substantial legislative objective. The application judge erred further by excluding the disproportionate impact of TTC strikes on “equity-seeking groups” as an aspect of the legislative objective. However, neither of these errors were fatal on their own. The critical question was whether the application judge also erred by finding that Ontario had failed to meet its burden of establishing proportionality under the second prong of the Oakes test.

(2) Proportionality

The second stage of the Oakes test requires courts to assess whether “the means chosen [to achieve the legislature’s objectives] are reasonable and demonstrably justified”: Oakes, at p. 139. This involves “a form of proportionality test”, in which courts must consider: (i) whether the means chosen are rationally connected to the objectives; (ii) whether they impair the right at issue as little as possible; and (iii) whether the salutary effects of the legislation outweigh its deleterious effects. The party seeking to uphold legislation – usually the government, and here, Ontario – must succeed on all three branches of the proportionality test.

(i) Rational connection

The application judge erred in law by finding that Ontario had not established a rational connection between the means chosen and the legislature’s objectives. However, the Court agreed with the respondents that this error was more one of classification than of substance, since the considerations that led the application judge to find a lack of rational connection were all ones he was entitled to consider at the minimal impairment stage of his analysis.

(ii) Minimal impairment

The Court found no basis for interfering with the application judge’s factual conclusion that the Ontario legislature adopted a complete strike ban without first studying or seriously considering the alternative “hybrid model”. This finding was well-supported by the evidential record.

Ontario had not established that the application judge made any reversible errors in concluding that it had failed to meet its burden under the minimal impairment branch of the Oakes proportionality analysis.

While this conclusion was sufficient on its own for the Court to conclude that Ontario’s appeal must fail, for completeness, the Court considered arguments concerning the third branch of the Oakes proportionality test.

(iii) Proportionality between salutary and deleterious effects

Ontario did not show that the application judge’s assessment of the expert evidence was tainted by any palpable and overriding errors.

The application judge gave cogent reasons for discounting the economic reports that were tendered by Ontario, noting that they were both dated and lacked analytic rigour.

The application judge’s comment that TTC workers “reflect the ethnic and gender makeup of Toronto”, was not to make any findings about the precise demographic composition of the TTC’s workforce. The TTC has more than 12,000 employees, and the Court did not think that the application judge needed specific evidence to be able to conclude, as he did, that at least some of them are members of “equity-seeking groups”.

However, the Court agreed that it was an error for the application judge to seemingly treat the existence of these employees as a complete answer to Ontario’s contention that a TTC strike would disproportionally have a negative effect on marginalized or equity-seeking groups in the population at large.

That said, the Court was not persuaded that this reasoning error undermined the application judge’s ultimate conclusion that Ontario had not met its burden under the final branch of the Oakes test. The application judge’s reasons as a whole made it clear that he was not satisfied that Ontario had met its burden of demonstrating that any members of the public would be so seriously harmed by a TTC shutdown that their interests outweighed the competing Charter freedoms of TTC workers. This conclusion was based on his assessment of the evidence and his findings of fact, which were entitled to substantial appellate deference.

The Court was not persuaded that the application judge’s failure to address the question of how SFL might affect the duration of future TTC strikes was a reversible error, let alone one that would allow the Court to overturn his fact-based conclusions and find that Ontario met its burden on the final branch of the Oakes test.

The narrow question on the appeal was whether Ontario had demonstrated a constitutionally sound justification for pre-emptively banning all TTC strikes. The separate question of what evidence might be needed to justify back-to-work legislation once a TTC strike is underway was not before the Court.

The Court was not persuaded that the application judge’s assumption that future strikes would be short undermined his overall conclusion that Ontario had not met its s. 1 burden of justifying a full pre-emptive strike ban.

Nordheimer J., dissenting:

The TTC Act constituted a breach of the respondents’ rights under s. 2(d) of the Charter.

Yes.

(1) Sufficient importance

The TTC met the appropriate standard to be considered an essential service as that term was properly understood in the context. The disruption of TTC services would clearly result in serious harm to a portion of the population – a portion that is particularly vulnerable. People who are prevented from getting to work and earning income, people who cannot buy food, and people who cannot get to medical treatments, are not instances of mere inconvenience. The TTC Act satisfied the first part of the two-part test from Oakes.

(2) Reasonably and demonstrably justified

(i) Rational connection

If the objective of the appellant was to prevent disruptions of TTC services and thus avoid the harms caused by them, a prohibition on strikes is logically connected to that objective. The rational connection factor is thus met.

However, the application judge incorporated a “care of design” component into his analysis of this factor. Further, he appeared to have treated this component as a test for overbreadth. Neither consideration found any support in the existing law as enunciated by the Supreme Court of Canada as it relates to the rational connection factor. Both only appear in that court’s consideration of the minimum impairment factor.

There was not a sufficient evidentiary foundation for the application judge’s conclusion that there was a lack of care taken by the appellant when the TTC Act was enacted. His comment that the legislation was “rushed” was not made out by the facts. There were six weeks between the introduction of the legislation and its passing. The application judge also failed to consider, in this regard, that there was a request from Toronto City Council for the TTC to be deemed an essential service, that had been preceded by a request from the TTC Commissioners for such a designation. None of this was taken into account by the application judge before he reached his conclusion that the legislation was “rushed”, nor was it taken into consideration before he made his finding that there was a lack of care taken by the appellant. Neither of those conclusions was warranted on the record.

(ii) Minimal impairment

The majority conceived what it viewed as a better alternative than a complete prohibition on strikes. That was not the role of the Court in assessing minimum impairment.

The majority essentially adopted the approach taken by the application judge of contrasting the prohibition on strikes against the approach taken in other provinces with respect to their transit systems, as well as against the approach taken by the appellant in respect of other transit systems in Ontario. The majority justified its agreement with the application judge’s approach on the basis that “his factual conclusions are entitled to substantial appellate deference.”

However, the usual deferential approach to factual findings is not applicable when dealing with a constitutional question. This point was recently reiterated by the Supreme Court of Canada in Société des casinos du Québec inc. v. Association des cadres de la Société des casinos du Québec, 2024 SCC 13. In her concurring reasons in that case, Côté J. enunciated the appropriate standard of review when dealing with a constitutional question. She said that when a constitutional question is involved, the standard of correctness applies to questions of law and questions of mixed fact and law. She noted, at para. 94: “‘Mixed’ findings are those that determine ‘whether the facts satisfy the applicable legal tests’”.

The factual findings that the application judge made were not pure facts isolated from the constitutional analysis. The application judge’s findings were integral to his minimal impairment analysis. Those factual findings were therefore not entitled to deference.

Further, some of the application judge’s factual findings reflected palpable and overriding error. The analytical approach that compared the TTC Act to other situations was fundamentally flawed for four main reasons.

First, it failed to take into account the unique nature of the TTC. The application judge accepted that the TTC is the largest and most complex transit system in Canada. It is the third largest in North America. The extent and importance of its operations cannot reasonably be compared to transit systems elsewhere in Ontario or elsewhere in Canada.

Second, the appellant was entitled to take different approaches to an issue in different parts of the province. The appellant’s view that it was important to prevent any disruption of TTC services, given their importance, may not raise the same concerns when the appellant was considering the impact of transit disruptions in other municipalities. The appellant’s decision to take different approaches to these situations was a policy decision which was entitled to deference from the courts. Among other reasons, such deference accords the appellant the measure of “leeway” to which McLachlin J. said governments are entitled.

Third, different provinces are entitled to adopt different approaches to the same problem. The fact that they do so does not render one approach right and another approach wrong. It simply reflects the fact that, for a variety of reasons, provinces may differ in terms of the approach that they take to the same problem.

Fourth, in considering the situation elsewhere in Ontario and elsewhere in Canada, there was no evidence regarding the labour relations histories in those other places, nor was there any evidence as to the effectiveness of the varying approaches taken. There is no history of strikes in the Montreal transit system. However, there is evidence for the history of strikes in the TTC and it is not a happy one.

In his minimal impairment analysis, the application judge did not consider this history. He also did not consider the lack of evidence as to the labour history and effectiveness of other approaches used elsewhere. He further did not give appropriate emphasis to the unique nature of the TTC in terms of its size, its complexity, and the importance of its functioning to the City of Toronto and the greater Toronto area.

In terms of alternative approaches, the only evidence before the application judge was that the TTC did not favour a hybrid approach. In her affidavit filed on the application, the Executive Director of Human Resources said that a hybrid model was viewed by the TTC as “inappropriate”. Among other reasons, the TTC expressed concerns about the safety implications of such a model, including overcrowding during times when the system would operate.

The application judge did not consider any of this in his minimal impairment analysis. His analysis on this factor was thus fundamentally flawed.

Further, the application judge did not consider the provisions in the TTC Act that provide for compulsory arbitration. This marked a significant distinguishing factor between this case and the case that was before the Supreme Court of Canada in SFL. The application judge failed to recognize that important distinction before concluding that “the TTC Act is similar to the over broad legislation deemed unconstitutional in SFL.”

The appellant met its burden to explain why there were not reasonable alternatives that could achieve the desired objective with less impairment of the right to strike.

One was the unique nature of the TTC, the number of people who rely on its services, the impact that a strike has on those people, as well as on the greater Toronto area as a whole. Another was the salient fact that the TTC did not favour a hybrid model because of safety concerns and the practical implications of attempting to run the TTC in a piecemeal fashion. The evidence showed that the operation of the TTC does not easily permit distinguishing between different categories of employees in terms of their importance to the overall operation of the system.

The legislative goal was to avoid disruptions in TTC services. None of the alternative means suggested by the application judge, or by the respondents, achieved that goal. The appellant was not required to compromise its goal just to achieve less impairment.

(iii) Proportionality

The legislation’s objective was to avoid disruptions in TTC services because of the various impacts those disruptions have. However, the application judge focused almost entirely on the economic effects of a disruption in TTC services.

It was not, however, just the economic interests of third parties that were to be considered under this factor. That was the key factor in RWDSU but, in this case, there were many other interests involved, some more important, especially the impacts on the vulnerable.

The application judge compared equity seeking groups in the public generally with equity seeking groups within the TTC. There was virtually no evidence regarding the latter, and it was not an appropriate comparison.

The application judge also held that the balancing had to take into account that “transit shutdowns are generally short lived.” That observation completely failed to take into account that the reason why TTC strikes are short lived derives from the fact that almost every time those strikes occur, they are ended by back-to-work legislation in favour of compulsory arbitration.

Due to these errors, the application judge’s balancing under this factor was not entitled to deference.

Fung Loy Kok Institute of Taosim v. Municipal Property Assessment Corporation, 2024 ONCA 415

[Pepall, George and Dawe JJ.A.]

Counsel:

D. G. Fleet, L. Lackie and K. Wong, for the appellants

K. Lunau, for the respondent Municipal Property Assessment Corporation

facts:

The appellant Fung Loy Kok Institute of Taoism (“FLK”) was a religious organization that owned a number of properties across Ontario. Under the Assessment Act, s. 3(1), para. 3(i), land owned by a “religious organization” that is “a place of worship and the land used in connection with it” is exempt from property tax. However, the Act does not define what is meant by “place of worship”.

The appellants FLK and the TTCSC were both founded by the late Moy Lin-shin, who developed his own form of tai chi, styled “Taoist Tai Chi”. The central dispute in this appeal was whether the activities that FLK conducts on some of its properties – and, in particular, the tai chi classes that it holds at its various “satellite sites” – renders each of these properties “a place of worship” for the purposes of the Assessment Act.

The application judge found that the disputed properties were not places of worship, and the Divisional Court upheld her conclusion. FLK appealed to the Court with leave. Its argument on appeal focused mainly on the taxable status of the satellite sites. However, there was also a dispute over the status of two areas of FLK’s main property in Mono, Ontario, known as the International Centre.

The second appellant, the Taoist Tai Chi Society of Canada (“the TTCSC”), was a related entity that previously owned some of FLK’s properties. The main respondent, the Municipal Property Assessment Corporation (“MPAC”), is a non‑profit corporation responsible for assessing and classifying all properties in Ontario in compliance with the Assessment Act. The other named respondents were the various municipalities where FLK’s properties are located. They did not participate in the litigation.

issues:

Did the application judge and the Divisional Court adopt an unduly narrow definition of “worship”?
Did the application judge and the Divisional Court err in concluding that the International Centre’s Contemplative Garden and sales are both taxable?

holding:

Appeal dismissed.

reasoning:

No. The parties agreed that once “worship” has been defined, the question of whether a particular location qualifies as a “place of worship” requires a factual determination of whether it is “primarily used” for a purpose that falls within the definition of “worship”. This “primary purpose test” requires an objective determination of the principal purpose for which the land is used and occupied.

It was undisputed that tai chi classes were the main activity that occurred at FLK’s satellite sites, although these sites were also used for other purposes, including Taoist chanting ceremonies, which MPAC acknowledged were a form of worship. Accordingly, the question of whether the satellite sites were “places of worship” for taxation purposes hinged mainly on whether the tai chi classes that FLK held at these locations were “worship” within the meaning of the Assessment Act.

Similarly, the dispute over the taxation status of one of the two contested areas of the International Centre, the Contemplative Garden, turned on whether the primary activities conducted in the garden qualified as “worship”. With respect to the second contested part of the property, the sales area, the issue was whether FLK’s sales activities were sufficiently closely linked to the “worship” that occurred elsewhere on the property to make the sales area “land used in connection” with worship for the purposes of para. 3(i) of s. 3(1) of the Act.

First, relying on the Supreme Court of Canada’s decision in Syndicat Northcrest v. Amselem, FLK argued that the religious nature of a particular practice must be determined subjectively, and that the only question a court can properly ask is whether the claimant’s belief is honestly and sincerely held. FLK extended this logic to the related question of whether a particular religious practice constituted “worship”. The Court stated that in light of Amselem, it is not the proper role of the courts to second-guess the beliefs of FLK’s directing minds, who sincerely consider the practice of Taoist Tai Chi to be a religious or spiritual activity. However, the Court disagreed that this automatically required courts to unquestioningly accept that the tai chi classes FLK conducts at its satellite sites are “worship”. The meaning of the term “worship” in the Assessment Act is a legal question, not a matter of religious doctrine. Moreover, not every activity that is motivated by a religious purpose necessarily qualifies as “worship” for property tax assessment purposes: see e.g., Les Sœurs de La Visitation D’Ottawa v. The City of Ottawa. The Court was prepared to accept that persons who honestly and sincerely believed that their own performance of tai chi was a religious or spiritual act were engaging in an act of “worship” for the purposes of the Assessment Act when they performed tai chi at one of FLK’s properties.

Second, FLK contended that the question of whether FLK’s tai chi classes were “worship” should be determined by considering how these classes were subjectively perceived by FLK’s directing minds, rather than by considering the subjective perceptions and beliefs of the class participants. The Court rejected this proposition. FLK summarized its position in its factum, “what is in the mind of individual members as they practice FLK Taoist Tai Chi is an irrelevant and inappropriate inquiry when considering the exemption under the Act.” The Court noted that how the participant’s actions may be perceived or understood by others may have been relevant but was not determinative. It was not inconsistent with Amselem for a court to consider whether a person performing an activity is doing so for a religious purpose.

Focusing the analysis on the participants in FLK’s tai chi classes rather than on the purposes and goals of the class organizers accorded with the approach the court took in another Assessment Act case, Keewaydin Camps Corporation Canada. That case involved a wilderness camp that sought a property tax exemption under para. 5 of s. 3(1) of the Assessment Act, which created an exemption for property used as an “educational seminary of learning”. This was a statutory term of art that required the activities conducted on the property to have a predominantly educational purpose. In this case, the camp’s purpose was properly assessed from the perspective of the campers and their parents, rather than that of the camp organizers. Keewaydin Camps involved a different statutory exemption under s. 3(1) of the Assessment Act than the one that was at issue here. However, the ordinary meaning of the word “worship” in para. 3(i) of s. 3(1) already suggested that the inquiry should focus on the purposes of the people who were said to be “worshippers”.

The application judge did not err by focusing her attention largely on the people who actually attend FLK’s tai chi classes, rather than solely on the intentions of the class organizers. The application judge had to draw circumstantial inferences from the objective evidence on the record. She was ultimately not satisfied that FLK had met its burden of establishing that the principal purpose for which the satellite sites were used was worship, because she was not satisfied that the tai chi classes held at the sites were properly viewed as “worship”.

FLK placed great emphasis on the evidence that it required all new class attendees to sign a membership form. The forms had not required class participants to agree to personally adopt FLK’s view of the religious significance of tai chi. At most, even if new members who signed the forms might have been said to “understand that, even as beginners … they will be participating in a religious practice that is important to the religion”, as FLK argued, this had not necessarily made their participation in these classes a form of “worship” in their own minds.

The Court also disagreed that the application judge’s use of the term “evangelism” was wrong. Since the primary dictionary definition of “evangelism” is specific to Christianity, the application judge’s use of this word may not have been entirely accurate. However, the Court was satisfied from her reasons as a whole that she was using this term in a looser sense, and merely meant to convey that FLK was using its tai chi and other classes to promote its religious views and practices, including the practice of tai chi. Even if it was not literally correct to describe FLK as an “evangelistic” organization, there was no real dispute that it existed to promote the spiritual and other beliefs of its founder.

With respect to FLK’s argument regarding strict construction, the Court noted that the application judge’s conclusion rested largely on her being left unsatisfied that the attendees at FLK’s tai chi classes were predominantly participating in these classes for religious purposes, such that they could be found to be engaging in “worship”. This was a factual determination, not a conclusion based on her adopting a “strict construction” of the statutory definition of “worship”.

With respect to FLK’s argument regarding the application judge and the Divisional Court both implicitly adopting an unduly narrow and overly Judeo-Christian understanding of religious worship, neither the application judge nor the Divisional Court suggested or implied that the practice of tai chi at FLK’s satellite sites could not be “worship” because Taoism is not monotheistic. Rather, the application judge concluded that the tai chi classes held at FLK’s satellite sites had not qualified as “worship” in large part because she had found that the evidence “supports MPAC’s position that the persons engaged in the Tai Chi classes at these locations are not worshiping through Tai Chi”.

With respect to the Contemplative Garden, the application judge had not erred by treating the Contemplative Garden as analogous to the convent gardens that were at issue in Holy Theotokos Convent v. Whitchurch-Stouffville (Town), which were found not to be “places of worship” for the purposes of s. 3(1), para. 3(i) of the Assessment Act, even though they contained religious icons and were used by the nuns for private prayer. Contrary to what FLK suggested, the decision in Holy Theotokos Convent did not turn on a finding that the convent gardens were not open to the public. Rather, the application judge in that case concluded at para. 7 of her reasons that:

Even if members of the public frequent the sites where the icons are located on the convent grounds, this is not in my view a place for formal public worship, anymore than the other portions of the property, whether inside or outside the buildings, where no formal public worship is conducted.

It was open to the application judge to draw a similar conclusion about the Contemplative Garden at the International Centre. This was a factual determination that was entitled to deference.

With respect to the International Centre’s sales area, there was no suggestion that it was directly used for worship. As the Divisional Court observed, “the commercial activity of the ‘sales area’ … most readily belies a factual finding that worship occurs at that site”. While FLK pointed out that some of the items sold in the sales area could be used by members and guests during the religious rituals that were conducted in other parts of the Centre, this was not true of many of the other items that were available for purchase (e.g., jars of honey).

FLK argued that “MPAC and the courts” would not support denying a tax exemption to a “gift shop in a cathedral”, and that the Centre’s sales area should be afforded similar treatment. The question of how a gift shop or similar store that was associated with a tax-exempt “place of worship” should have been treated for property tax assessment purposes was noted by the Court to be fact-specific and context-driven.

SHORT CIVIL DECISIONS

Yan v. Persaud, 2024 ONCA 416

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

A. Windsor, for the moving party

N.X.Y.Y., acting in person

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Courts of Justice Act, R.S.O. 1990, c C.43, s. 19(1)(b)

Construction Distribution & Supply Company Inc. v. Continental Casualty Company (CNA Insurance), 2024 ONCA 405

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

W. Colin Empke and Kathleen Lefebvre, for the appellant

D.N. Bleiwas, for the respondents

2137073 Ontario Inc. v. Furney, 2024 ONCA 421

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

A.F. and M.F., acting in person/moving parties

D. Campoli, for the responding party, 2137073 Ontario Inc.

R. Atkinson, for the responding parties, AL, LB, SG, EK

J. D. Sobel, for the responding party, 2380376 Ontario Ltd.

Keywords: Civil Procedure, Costs

2137073 Ontario Inc. v. Furney, 2024 ONCA 428

[Lauwers J.A. (Motions Judge)]

Counsel:

A.F. and M.F., acting in person/moving parties

D. Campoli, for the responding party, 2137073 Ontario Inc.

S. Kovacevic, for the responding parties, AL, LB, SG, EK

J. D. Sobel, for the responding party, 2380376 Ontario Ltd.

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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John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email