In CHU de Québec-Université Laval v. Tree of Knowledge International Corp., the Court dismissed the appeal of a director and officer of the corporate defendant who was found personally liable for civil fraud arising from the sale of millions of dollars’ worth of masks to a Quebec hospital network during the COVID-19 pandemic. The defendants required prepayment for three million N95 masks for $11 million and delivered zero N95 masks. The Court appeared to simplify the test for finding an officer or director personally liable for fraud. Where there is fraud, the individual officer and director is automatically personally liable. The court need not characterize the fraud as “tortious in itself” or as exhibiting a “separate identity or interest” before finding personal liability

In MCAN Home Mortgage Corporation v. Broad, the Court allowed a mortgagee’s appeal and confirmed that courts have the power to discharge a certificate of pending litigation at the request of a mortgagee seeking to complete a power of sale. The court below had refused to remove the CPL. The Court affirmed that s. 103(6)(c) of the Courts of Justice Act confers a broad discretion to discharge a CPL “on any other ground that is considered just,” which may be invoked by a mortgagee who is not a party to the underlying litigation but whose prior-ranking interest is affected by the CPL’s presence on title. The Court remitted the matter to the Superior Court to determine whether discharge should be granted in new circumstances that had arisen since the order appealed form was made.  By the time of the appeal, the prospective sale by the mortgagee had fallen through and the respondent who had registered the CPL had been recognised as the beneficial owner of the property.

In Intercity Realty Inc., Brokerage v. Salerno Realty Inc., the Court dismissed an appeal finding that the Court lacked jurisdiction over a real estate commission dispute that fell within TRREB’s exclusive arbitration process and that Intercity’s action against one of the defendants also constituted an abuse of process. The Court also held that Intercity had irrevocably attorned to TRREB’s jurisdiction and was attempting to relitigate the same issue already determined in the TRREB proceeding.

In Phillips v. Kheil, the court confirmed that an undischarged bankrupt lacks capacity to commence proceedings relating to property vested in the trustee absent express authorization, which cannot be inferred from mere permission to manage the property. It also held that claims framed as “loss of enjoyment and use” will be treated as proprietary, not personal, where they are rooted in damage to the property itself, and therefore such claims vest in the trustee.

In Peoples Trust Company v PSP Services Inc., the Court upheld penalty orders imposed on a company found in contempt for repeatedly obstructing a court-ordered audit. The appeal was dismissed on all grounds, with the court finding the penalties proportionate given the company’s prolonged and intentional non-compliance. The cross-appeal was allowed in part, as the motion judge had misapplied rule 60.11(6) in declining to consider imposing personal liability on the company’s principal for the contempt. That issue was remitted to the motion judge for rehearing.

In Bank of Montreal v. Makhija, the court confirmed that civil fraud requires proof of knowing or reckless misrepresentation and reliance and will not be made out where the defendant reasonably believed the transaction was legitimate and did not make the misrepresentation relied upon.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2026 ONCA 209

Keywords: Intentional Torts, Fraud, Fraudulent Misrepresentation, Corporations, Piercing Corporate Veil, Officers and Directors, Personal Liability, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 178(1)(e), Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Housen v. Nikolaisen, 2002 SCC 33, Derry v. Peek (1889), 14 App. Cas. 337 (H.L.), Parna v. G. & S. Properties Ltd., [1971] S.C.R. 306, Hearn v. McLeod Estate, 2019 ONCA 682, Precision Drilling Canada Limited Partnership v. Yangarra Resources Ltd, 2017 ABCA 378, Noble v. Fuller, 1985 CarswellBC 4167 (S.C.), ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 26 O.R. (3d) 481 (C.A.),  Normart Management Ltd. v. West Hill Redevelopment Co. (1998), 37 O.R. (3d) 97 (C.A.), ADGA Systems International Ltd. v. Valcom Ltd. (1999), 43 O.R. (3d) 101 (C.A.), leave to appeal refused, [1999] S.C.C.A. No. 124, Ontario Store Fixtures Inc. v. Mmmuffins Inc. (1989), 70 O.R. (2d) 42 (H.C.J.), XY, LLC v. Zhu, 2013 BCCA 352, riving Force Inc v. I Spy-Eagle Eyes Safety Inc, 2022 ABCA 25, Contex Drouzhba Ltd. v. Wiseman, [2007] EWCA Civ 1201, Axiom Foreign Exchange International v. Rudiger Marketing Ltd., 2024 ABKB 224, Hall v. Stewart, 2019 ABCA 98, Merrifield v. Canada (Attorney General), 2019 ONCA 205, Merrifield v. Canada (Attorney General), 2019 ONCA 205, Paulus v. Fleury, 2018 ONCA 1072, Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320

MCAN Home Mortgage Corporation v. Broad, 2026 ONCA 217

Keywords: Contracts, Real Property, Mortgages, Enforcement, Power of Sale, Civil Procedure, Certificates of Pending Litigation, Statutory Interpretation, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 103(1), 103(2), 103(6)(c), 103(6)(d), 103(7), Mortgages Act, R.S.O. 1990, c. M.40, ss. 2, 31(1), 32, 33, 34, 35, Land Titles Act, R.S.O. 1990, c. L.5, ss. 99, 99(1), 99(1.1), 99(2), Royal Canadian Mortgage Investment Corp. v. Mendes, 2019 ONSC 6039, Royal Canadian Mortgage Investment Corporation v. Myles Mendes et al. (December 11, 2019), Toronto, CV-19-00675619-0000 (Ont. Sup. Ct.), G.P.I. Greenfield Pioneer Inc. v. Moore (2002), 58 O.R. (3d) 87 (C.A.), Brock v. Crawford (1908), 11 O.W.R. 143, (H.C.), Lawrence v. Wright, 2007 ONCA 74, Ministry of Government and Consumer Services, Electronic Registration Procedures Guide, Version 12 (Toronto: Queen’s Printer for Ontario, 2017)

Intercity Realty Inc., Brokerage v. Salerno Realty Inc., Brokerage, 2026 ONCA 212

Keywords: Contracts, Real Property, Brokers, Commissions, Civil Procedure, Arbitration, Jurisdiction, Striking Pleadings, Abuse of Process, Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Schedule C, rr. 21.01(3)(a), 25.11, Rules of Civil Procedure, r. 21.01(3)(a), 25.11, TeleZone Inc. v. Canada (Attorney General), 2008 ONCA 892, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Metropolitan Toronto Condominium Corporation No. 1352 v. Newport Beach Development Inc., 2012 ONCA 850, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63

Phillips v. Kheil, 2026 ONCA 215

Keywords: Bankruptcy and Insolvency, Property of the Bankrupt, Choses in Action, Civil Procedure, Striking Pleadings, Capacity, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 71, s. 2, s. 30, Rules of Civil Procedure, r. 21.01, Little (Nautilus North Strength and Fitness Centre) v. Bramcan Investments Limited, 2025 ONCA 86, Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013 SCC 13, GMAC Commercial Credit Corporation — Canada v. T.C.T. Logistics Inc., 2006 SCC 35, Aquino v. Bondfield Construction Co., 2024 SCC 31, Kirschner v. Moore, 2023 BCSC 450, Spiroulias c. Chriscon Investments Ltd., 2006 QCCS 2019, Stec v. Blair, 2021 ONSC 6212, Re Holley (1986), 54 O.R. (2d) 225 (C.A.), Meisels v. Lawyers Professional Indemnity Company, 2015 ONCA 406, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, Housen v. Nikolaisen, 2002 SCC 33

Peoples Trust Company v. PSP Services Inc., 2026 ONCA 22

Keywords: Contracts, Remedies, Audit Rights, Civil Procedure, Orders, Enforcement, Contempt, Investigative Receiverships, Corporations, Piercing Corporate Veil, Officers and Directors, Personal Liability, Rules of Civil Procedure, r. 60.11(6)

Bank of Montreal v. Makhija, 2026 ONCA 221

Keywords: Intentional Torts, Fraud, Fraudulent Misrepresentation, Motkoski Holdings Ltd. v. Yellowhead (County), 2010 ABCA 72, Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922, Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Turbo Logistics Canada Inc. v. HSBC Bank Canada, 2013 ONSC 7128, Buccilli et al. v. Pillitteri et al., 2012 ONSC 6624, Panapers Inc. v. 1260539 Ontario Limited, 2007 ONCA 27, National Steel Car Limited v. Independent Electricity System Operator, 2024 ONCA 265

Short Civil Decisions

Bryan v. Miguna, 2026 ONCA 226

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Limitation Periods, Fraudulent Concealment, Summary Judgement

Lalli v. Lalli, 2026 ONCA 224

Keywords: Property Law, Remedies, Resulting Trust, Civil Procedure, Costs

Hartin v. Hynes, 2026 ONCA 227

Keywords: Torts, Negligence, Vicarious Liability, Civil Procedure, Third Party Claims, Dog Owners’ Liability Act, R.S.O. 1990, c. D.16, Hav-A-Kar Leasing Ltd. v. Vekselshtein, 2012 ONCA 826

Lakehead District School Board v. Mauro, 2026 ONCA 230

Keywords: Intellectual Property, Copyright, Civil Procedure, Summary Judgment, Copyright Act, R.S.C. 1985, c. C-42, s. 35(2)

Murray v. Toronto-Dominion Bank,  2026 ONCA 210

Keywords: Contracts, Torts, Conversion, Detinue, Civil Procedure, Summary Judgment

Foch v. Sharon Gun Club, 2026 ONCA 218

Keywords: Contracts, Releases, Civil Procedure, Settlements, Enforcement, Striking Pleadings, Abuse of Process, Standing, Limitation Periods

Leduc v. Dufour, 2026 ONCA 219

Keywords: Contracts, Solicitor and Client, Contingency Fee Agreements, Civil Procedure, Costs

CIVIL DECISIONS

CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2026 ONCA 209

[Gillese, Favreau and Rahman JJ.A.]

Counsel:

C. Rempel and C. Harrell, for the appellant

J. Pirie, A. Shafey and B. Hsu, for the respondent

Keywords: Intentional Torts, Fraud, Fraudulent Misrepresentation, Corporations, Piercing Corporate Veil, Officers and Directors, Personal Liability, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 178(1)(e), Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Housen v. Nikolaisen, 2002 SCC 33, Derry v. Peek (1889), 14 App. Cas. 337 (H.L.), Parna v. G. & S. Properties Ltd., [1971] S.C.R. 306, Hearn v. McLeod Estate, 2019 ONCA 682, Precision Drilling Canada Limited Partnership v. Yangarra Resources Ltd, 2017 ABCA 378, Noble v. Fuller, 1985 CarswellBC 4167 (S.C.), ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 26 O.R. (3d) 481 (C.A.),  Normart Management Ltd. v. West Hill Redevelopment Co. (1998), 37 O.R. (3d) 97 (C.A.), ADGA Systems International Ltd. v. Valcom Ltd. (1999), 43 O.R. (3d) 101 (C.A.), leave to appeal refused, [1999] S.C.C.A. No. 124, Ontario Store Fixtures Inc. v. Mmmuffins Inc. (1989), 70 O.R. (2d) 42 (H.C.J.), XY, LLC v. Zhu, 2013 BCCA 352, riving Force Inc v. I Spy-Eagle Eyes Safety Inc, 2022 ABCA 25, Contex Drouzhba Ltd. v. Wiseman, [2007] EWCA Civ 1201, Axiom Foreign Exchange International v. Rudiger Marketing Ltd., 2024 ABKB 224, Hall v. Stewart, 2019 ABCA 98, Merrifield v. Canada (Attorney General), 2019 ONCA 205, Merrifield v. Canada (Attorney General), 2019 ONCA 205, Paulus v. Fleury, 2018 ONCA 1072, Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320

facts:

In March 2020, near the beginning of the COVID-19 pandemic, CHU de Québec-Université Laval (“CHU”), the largest hospital network in Quebec, was running low on N95 masks and needed to source them urgently. CHU required masks certified by the National Institute for Occupational Safety and Health (“NIOSH”).

In late March 2020, CHU entered into an agreement with Tree of Knowledge Inc. (“TOKI”), which agreed to supply 3 million NIOSH-certified N95 masks for over US$11 million by the end of the day on March 28, 2020. As a condition of the sale, CHU paid TOKI in full on March 27, 2020, before receiving any masks. At the time, the appellant, Mr. MC, was an officer and the sole director of TOKI. He negotiated the agreement with CHU on behalf of TOKI. TOKI never delivered any NIOSH-certified N95 masks.

In April, TOKI delivered a small quantity of KN95 masks, which were not fit for medical use. On April 14, 2020, the Assistant Deputy Minister of Health for Quebec instructed Mr. MC to cease deliveries, as CHU had ordered N95 masks and received KN95 masks. The masks were tested and found to be worthless.

On April 29, 2020, TOKI and CHU reached a resolution agreement under which TOKI was to transfer funds to CHU. Ultimately, TOKI returned only a small portion of the money which amounted to a total of only US$2 million and made no further payments to CHU. When it became evident that TOKI would not deliver NIOSH certified N95 masks or return the money CHU had paid, CHU commenced an action against several defendants, including TOK Corp., TOKI and Mr. MC.

After CHU started its action, it successfully applied to the Superior Court to appoint an investigative receiver and for a Mareva injunction against TOK Corp., TOKI and Mr. MC. A court-appointed receiver traced the monies CHU had paid and determined that, by November 30, 2020, only $5,000 remained in TOKI’s bank account. Of the $11.2 million in net receipts, $1,105,072 was paid to Mr. MC personally, approximately $2.9 million was disbursed for purposes unrelated to the transaction, and US$6,818,020 was used to purchase approximately 2.5 million masks that ultimately had no value.

By the time of the trial, CHU had settled with all defendants, except for Mr. MC. The trial judge found Mr. MC personally liable for civil fraud, concluding that he acted recklessly and that his conduct was “tortious in itself.” The trial judge ordered Mr. MC to pay CHU US$11,193,522.50, less amounts recovered from other parties. Mr. MC appealed against the trial judge’s decision.

issues:

1. Did the trial judge err in applying too low a threshold for recklessness?
2. Did the trial judge err in finding Mr. MC personally liable for civil fraud?

holding:

Appeal dismissed.

reasoning:

1. No. The Court held that the trial judge did not apply an improperly low threshold in determining that Mr. MC’s conduct was reckless. Mr. MC’s argument focused on an isolated passage in the trial judge’s reasons. He submitted that the trial judge improperly relied on “carelessness” as the threshold for “recklessness.” The Court found no error in the trial judge’s articulation of the test as set out in Bruno Appliance, at para. 21. The trial judge had dealt at length with cases addressing the meaning of recklessness in the context of civil fraud. Recklessness can be found when a person who made the false statement lacked an honest belief that the statement was true, meaning they were indifferent or did not care whether it was true.

 The trial judge further accepted that recklessness can be made out where a person makes a false statement and either closes their eyes to the facts or purposefully abstains from inquiring into them. The Court also noted that the trial judge carefully distinguished between the type of carelessness that constitutes recklessness in a fraud context and the type of carelessness that supports a negligence claim, explaining that carelessness does not amount to recklessness where a person has an honest but mistaken belief that the statement is true.

The Court further held that, regardless of whether one used the term “recklessness” or “carelessness” as used in civil fraud cases, the trial judge’s evidentiary findings fully supported his conclusion that Mr. MC’s conduct was reckless. On March 26, 2020, when the agreement between CHU and TOKI was made, Mr. MC represented that he could obtain 3 million NIOSH-certified N95 masks. Mr. MC had no subjective belief in these representations, nor any factual basis for them. The trial judge found that Mr. MC did not intend to take CHU’s money and vanish, but did intend to induce CHU to pay TOKI, regardless of whether TOKI could deliver the masks or not.

The Court also observed that the trial judge’s finding that Mr. MC may have been “sincere” was generous. It noted that the requirement for an upfront payment, in circumstances where Mr. MC had not sourced any masks and had no reliable information that he could source them, resulted in almost all of CHU’s money being disbursed without any of the masks ordered being delivered. The Court stated that this “could easily have led to harsher conclusions regarding Mr. MC’s conduct than those reached by the trial judge.”

2. No. The Court held that the trial judge did not err in finding Mr. MC personally liable, although it reached this conclusion for different reasons than the trial judge.

 The trial judge had found Mr. MC personally liable on two bases: first, that his conduct was “tortious in itself,” and second, that his conduct exhibited a “separate identity or interest” from that of TOKI because of the 50/50 profit-sharing arrangement. The Court agreed with Mr. MC that the trial judge’s reasoning on the issue of personal liability was “sparse.” It failed to explain what “tortious in itself” meant in the context of Mr. MC’s conduct, or how a profit-sharing agreement formed the basis for personal liability. More importantly, the trial judge failed to identify “the obvious and straightforward path” to Mr. MC’s personal liability: the fraudulent nature of his conduct.

The Court reviewed the leading authorities on personal liability of officers and directors. It affirmed that ScotiaMcLeod, Normart and ADGA Systems agree that an officer or director’s actions within their scope of responsibility are generally attributed to the corporation, making the corporation liable for the consequences. However, an officer or director may face personal liability in certain situations, including: (i) when the director’s conduct is independently tortious or “tortious in itself”; or (ii) when the director acts according to a “separate identity or interest”.

The Court was of the view that there is no benefit to require that, in any given case, judges be forced to put the fraudulent conduct into one of these two categories. Instead, fraud by an officer or director who purports to act on behalf of a corporation should lead to personal liability regardless of whether the conduct is characterized as “tortious in itself” or as exhibiting a “separate identity or interest.” In other words, direct participation in fraud is a standalone basis for directors’ and officers’ personal liability.

Courts in Canada have consistently recognized directors’ liability for intentional torts, including civil fraud. In this case, Mr. MC was not facing liability merely because of his status as a director. Rather, while he was a director, he personally made fraudulent misrepresentations to CHU and was himself reckless as to their truth. In these circumstances, the trial judge made no error in concluding that Mr. MC should be held personally liable.

The Court also declined Mr. MC’s invitation to clarify the scope of personal liability for officers and directors more generally, holding that this case did not require the Court to resolve any unsettled issues because there was no ambiguity or uncertainty in the law applicable to the circumstances.

MCAN Home Mortgage Corporation v. Broad, 2026 ONCA 217

Huscroft, Zarnett and Pomerance JJ.A.

Counsel:

A. H. Boghossian, for the appellant

M.L.B., acting in person

Keywords: Contracts, Real Property, Mortgages, Enforcement, Power of Sale, Civil Procedure, Certificates of Pending Litigation, Statutory Interpretation, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 103(1), 103(2), 103(6)(c), 103(6)(d), 103(7), Mortgages Act, R.S.O. 1990, c. M.40, ss. 2, 31(1), 32, 33, 34, 35, Land Titles Act, R.S.O. 1990, c. L.5, ss. 99, 99(1), 99(1.1), 99(2), Royal Canadian Mortgage Investment Corp. v. Mendes, 2019 ONSC 6039, Royal Canadian Mortgage Investment Corporation v. Myles Mendes et al. (December 11, 2019), Toronto, CV-19-00675619-0000 (Ont. Sup. Ct.), G.P.I. Greenfield Pioneer Inc. v. Moore (2002), 58 O.R. (3d) 87 (C.A.), Brock v. Crawford (1908), 11 O.W.R. 143, (H.C.), Lawrence v. Wright, 2007 ONCA 74, Ministry of Government and Consumer Services, Electronic Registration Procedures Guide, Version 12 (Toronto: Queen’s Printer for Ontario, 2017)

facts:

The appellant corporation was the mortgagee under a May 15, 2022, first mortgage for $410,000, granted by SN (a non-party) on residential property in London, Ontario (the “Property”) registered in his name under the Land Titles Act (the “LTA”). Repayment of the balance was due on June 1, 2023. MLB, the respondent in this litigation, was SN’s common law spouse at the time the Property was purchased and when the mortgage was registered.

In May 2023 MLB and SN separated and SN ceased making mortgage payments. Although legal title to the Property was registered in SN’s name only, MLB subsequently commenced litigation against SN claiming an equitable interest in the home based on her significant financial contributions to the Property. No claims were made against the mortgagee in that litigation, and MLB obtained leave in August 2023 to issue and register a certificate of pending litigation (“CPL”) against title to the Property.

In October 2023, the mortgagee sought to exercise its private power of sale due to SN’s default on the mortgage, serving a Notice of Sale on both SN and MLB. MLB’s attempts to negotiate to bring the mortgage back into good standing failed. The mortgagee then obtained default judgment against SN for payment of the outstanding mortgage amount and possession and entered into an agreement of purchase and sale with a third party, promising to deliver clear title. Hence, the mortgagee brought an application to discharge the CPL so that it could transfer good title to the third party purchaser.

The application judge held that the court had no power to discharge a CPL at the instance of a mortgagee in the process of completing a power of sale. She relied on Royal Canadian Mortgage Investment Corp. for the principle that expunging a CPL at the behest of a mortgagee is unnecessary, since s.35 of the Mortgages Act enables a mortgagee to prove proper exercise of their power of sale via statutory declarations that are sufficient to give a purchaser good title.

In its appeal of the application judge’s order, the mortgagee requested that the Court set aside the application order and confirm the existence of judicial discretion to discharge the CPL. However, it did not ask the Court to order discharge of the CPL, due to major changes in circumstance since the application hearing. The prospective sale had fallen through, and MLB had won her lawsuit against SN, such that MLB was now the beneficial owner of the Property. A Superior Court application concerning MLB’s ability to redeem the mortgage was pending.

issues:

Did the application judge err in holding that the court had no power to discharge a certificate of pending litigation at the request of a mortgagee to facilitate a power of sale?

holding:

Appeal allowed.

reasoning:

Yes. After reviewing the complex statutory landscape established by the Courts of Justice Act (the “CJA”), the Mortgages Act and the LTA, the Court affirmed that a CPL may only be issued and registered with court permission where an interest in land is in question in litigation. Courts retain jurisdiction to ensure that the CPL’s continued presence on title does not work an injustice, with s. 103(6) of the CJA setting out grounds upon which a CPL may be discharged, including where the party who obtained the CPL does not have a reasonable claim to its alleged interest in the land, and where that party’s interests could be protected by a different form of security. Moreover, pursuant to the CJA at s.103(6)(c), the court may discharge a CPL “on any other ground that is considered just.”

The Court held that nothing in the text of s. 103(6)(c), read in light of its context and purpose, precludes this section from being invoked by a mortgagee who is not a party to the lawsuit in which the CPL was obtained but is affected by the CPL regardless. A mortgagee whose mortgage ranks prior to the impugned interest in land in question in the action is affected by a CPL if it prevents the mortgagee from exercising its power of sale. Where no reasonable claim about the mortgagee’s interest in land is being made, the impact of the CPL exceeds its purpose, and the mortgagee may ask a court to exercise its discretion to discharge the CPL. Discretion to discharge a CPL at the request of a mortgagee, where it is just to do so, is consistent with s. 35 of the Mortgages Act (dealing with the exercise of a power of sale) and s. 99 of the LTA, which contemplates registration of a CPL on title by the land registrar and the process to remove the entry.

Notwithstanding that in law the purchaser receives “good title” even before the CPL is discharged, the Court confirmed that the state of the register is critical, as it is meant to be a perfect mirror of title. The land registrar’s practice is to not exercise its power to delete a CPL from the register without the consent of the person who obtained it or a court order. Hence, it is appropriate for courts to grant discharge of a CPL that ranks subsequent to the interest of a mortgagee selling under a power of sale where the mortgagee provides evidence of compliance with the Mortgages Act, as stipulated in s. 99 of the LTA, that is, where in law good title is being conveyed to the purchaser and a discharge is needed to make the register reflect that title. Courts may consider appropriate terms for the discharge, depending on the facts of the case.

Thus, the Court allowed the appeal, set aside the application judge’s order, and remitted the matter to the Superior Court, where the issue of whether to discharge the CPL in the changed circumstances could be considered at the appropriate time.

Intercity Realty Inc., Brokerage v. Salerno Realty Inc., 2026 ONCA 212

Sossin, Gomery and Osborne JJ.A.

Counsel:

E. Bisceglia, for the appellant

J. Piccin, for the respondent

Keywords: Contracts, Real Property, Brokers, Commissions, Civil Procedure, Arbitration, Jurisdiction, Striking Pleadings, Abuse of Process, Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Schedule C, rr. 21.01(3)(a), 25.11, Rules of Civil Procedure, r. 21.01(3)(a), 25.11, TeleZone Inc. v. Canada (Attorney General), 2008 ONCA 892, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Metropolitan Toronto Condominium Corporation No. 1352 v. Newport Beach Development Inc., 2012 ONCA 850, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63

facts:

S.C., a salesperson employed by Intercity Realty Inc. (“Intercity”), purchased a home in Vaughan, Ontario with his wife in February 2021. The sellers were represented by RE/MAX. S.C. and his wife were represented by Salerno Realty Inc. (“Salerno”). When Intercity learned of the purchase, it believed it was entitled to share in the 2.5 percent buyer’s commission and that S.C.’s employment relationship made it the co-operating brokerage. S.C. signed a Form 160 confirming he would not receive a portion of any commission, but Intercity had not signed it. RE/MAX declined to pay Intercity, holding the commission for Salerno. Intercity subsequently brought an action against Salerno, S.C., and RE/MAX, and filed a formal complaint with Toronto Regional Real Estate Board (“TRREB”). The TRREB arbitration panel dismissed the complaint, finding that S.C. purchased the property in his individual capacity and that Salerno was the proper co-operating brokerage entitled to the disputed commission. The arbitration appeal panel dismissed Intercity’s appeal, determining that the conclusions reached were reasonable. Salerno and RE/MAX brought companion motions seeking dismissal of the claim.  When the motion was heard, Intercity had settled with RE/MAX such that only Salerno’s motion proceeded.

The motion judge granted the motion and dismissed Intercity’s action against Salerno, noting that the decision did not impact Intercity’s claim against S.C. The motion judge also concluded that the allegations advanced by Intercity in the TRREB proceeding were the same as those advanced in the statement of claim in the action against Salerno, except that S.C. and Salerno were not parties to the TRREB complaint. The motion judge found that the court had no jurisdiction over the dispute, since such jurisdiction was ousted by virtue of the TRREB Arbitration Guidelines.

Then, applying the Danyluk v. Ainsworth Technologies Inc. test, the motion judge found that the issue as between Intercity and RE/MAX and Salerno had been fully adjudicated through the TRREB proceeding. Accordingly, the motion judge concluded that Intercity was attempting to relitigate the same claim before the Court, and that such conduct constituted an abuse of process. She concluded that she would have dismissed the claim on that basis had she not found that the Court was without jurisdiction.

issues:

1. Did the motion judge fail to follow Danyluk?
2. Did the motion judge err in finding that the court lacked jurisdiction?
3. Did the motion judge err in finding that Intercity was estopped from advancing its claim against Salerno?

holding:

Appeal dismissed.

reasoning:

1. No. The Court indicated it could only intervene if the motion judge misdirected herself, came to a decision that was so clearly wrong as to be an injustice, or gave no or insufficient weight to relevant considerations. The motion judge properly articulated the test in Danylukand applied it to the facts before her. She considered whether: (1) the same question had been decided; (2) whether the TRREB decision was final; and (3) whether the parties to the TRREB decision or their privies were the same persons as the parties in this proceeding in which the estoppel is raised.
2. No. TRREB jurisdiction was clear, exclusive and was not waived. Intercity irrevocably attorned to that jurisdiction as a registrant and in fact invoked the jurisdiction to advance its claim to the commission in this particular case, such that TRREB was the appropriate forum in which commission disputes such as this were required to be determined. That, itself, was sufficient. Moreover, in Intercity’s TRREB Arbitration Claim Form, it confirmed that it “hereby agrees to abide by the award of the arbitrators”. As observed by the motion judge, nothing in her decision ousted the jurisdiction of the court with respect to Intercity’s claim, if any, against S.C.
3. No. To the extent that this ground of appeal was substantively different than the first ground, the Court also rejected it. The Court was satisfied that this action against Salerno was inescapably an attempt by Intercity to relitigate the very issue already determined in the TRREB proceeding with the result that it was, as found by the motion judge, an abuse of process.

Phillips v. Kheil, 2026 ONCA 215

[Miller, Thorburn and Monahan JJ.A.]

Counsel:

S. C. Flaherty, for the appellant

D. Wigle, for the respondents

Keywords: Bankruptcy and Insolvency, Property of the Bankrupt, Choses in Action, Civil Procedure, Striking Pleadings, Capacity, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 71, s. 2, s. 30, Rules of Civil Procedure, r. 21.01, Little (Nautilus North Strength and Fitness Centre) v. Bramcan Investments Limited, 2025 ONCA 86, Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013 SCC 13, GMAC Commercial Credit Corporation — Canada v. T.C.T. Logistics Inc., 2006 SCC 35, Aquino v. Bondfield Construction Co., 2024 SCC 31, Kirschner v. Moore, 2023 BCSC 450, Spiroulias c. Chriscon Investments Ltd., 2006 QCCS 2019, Stec v. Blair, 2021 ONSC 6212, Re Holley (1986), 54 O.R. (2d) 225 (C.A.), Meisels v. Lawyers Professional Indemnity Company, 2015 ONCA 406, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, Housen v. Nikolaisen, 2002 SCC 33

facts:

The appellant commenced an action against his tenants alleging they caused fire damage to a mixed-use commercial and residential property he owned. At the time the action commenced, however, the appellant was an undischarged bankrupt. Although the trustee permitted the appellant to remain in possession of and manage the property, the trustee was unaware of both the fire and the litigation.

The respondents moved to dismiss the action on the basis that, under s. 71 of the Bankruptcy and Insolvency Act (“BIA”), the appellant lacked capacity to commence proceedings relating to property vested in the trustee. The appellant argued that the trustee had implicitly authorized him to bring the action, or alternatively that part of his claim—general damages for loss of enjoyment and use—was personal and therefore exempt from the bankruptcy.

issues:

1. Did the motion judge err in finding that the trustee had not assigned the appellant authority to commence the action?
2. Did the motion judge err in characterizing the appellant’s damages claim as proprietary rather than personal?

holding:

Appeal dismissed.

reasoning:

1. No.

Under s. 71 of the Bankruptcy and Insolvency Act, a bankrupt loses capacity to deal with property, including the ability to commence legal proceedings in respect of it. While a trustee may, under s. 30(1)(l), authorize a bankrupt to act on behalf of the estate, such authority must be express, not implied.

The Court rejected the appellant’s submission that the Trustee’s acquiescence in his continued management of the property amounted to an implicit authorization to litigate. Managing property and commencing legal proceedings are legally distinct functions. The latter carries potential financial consequences for the estate, including legal costs and exposure to adverse cost awards, and therefore requires clear authorization.

The motion judge found that the Trustee was unaware of both the fire and the action and had never granted authorization—either in advance or retroactively. That finding was supported by the record and entitled to deference. In the absence of express authorization, the appellant lacked capacity to commence the action.

2. No.

The Court affirmed that while certain causes of action that are inherently personal (such as claims for physical injury, mental distress, or reputational harm) do not vest in the trustee, claims relating to damage to property do. The question is one of substance, determined by reference to the pleadings.

A review of the statement of claim confirmed that all of the appellant’s alleged losses flowed from damage to the property. The damages particularized included repair costs, remediation expenses, lost rental income, and other financial losses tied directly to the property. There was no pleaded claim for personal injury or other inherently personal harm.

The appellant’s attempt to characterize his damages as “loss of enjoyment and use” did not transform the claim into a personal one. In substance, the alleged loss arose from interference with the property itself, not with the appellant’s personal rights.

The action could also not be salvaged by recasting the claim in nuisance. While nuisance may, in some circumstances, ground a personal claim, here it was rooted entirely in proprietary loss to the estate. The motion judge therefore made no error in concluding that the claim vested in the Trustee and could not be pursued by the appellant.

Peoples Trust Company v. PSP Services Inc., 2026 ONCA 229

[Miller, Monahan and Pomerance JJ.A.]

Counsel:

G. Gryguc, for the appellant/respondent by way of cross-appeal

I. C. Matthews, R. B. Brooksbank and L. Thistle, for the respondent/appellant by way of cross-appeal

Keywords: Contracts, Remedies, Audit Rights, Civil Procedure, Orders, Enforcement, Contempt, Investigative Receiverships, Corporations, Piercing Corporate Veil, Officers and Directors, Personal Liability, Rules of Civil Procedure, r. 60.11(6)

facts:

The appellant, PSP Services Inc. (“PSP”), is a payment processing company. The respondent/cross-appellant, Peoples Trust Company (“PTC”) is a trust company that provides payment card services. In 2019, the parties entered into an Acquiring Services and Sponsorship Agreement (the “Agreement”), which included a term entitling PTC to conduct on-site inspections of PSP to verify PSP’s compliance with the Agreement. When PSP began to experience an unexpectedly high level of chargebacks, PTC grew concerned about PSP’s contractual compliance and requested that PSP increase its reserve funds, as it was obligated to under the Agreement. PSP instead terminated the Agreement, which prompted PTC to invoke its contractual right to conduct an audit. PSP objected, contending that the audit right did not survive the contract’s termination. Even after PTC obtained a mandatory injunction to facilitate the audit, PSP repeatedly refused to comply with the auditor’s directions, despite multiple demands and court appearances.

On January 9, 2025, Chalmers J. found PSP in contempt of court due to its intentional frustration of the audit process, but declined to find PSP’s principal, DG, jointly and severally liable for any financial penalties imposed on PSP. PSP was given two months to purge its contempt before penalties would ensue, but it failed to do so.

In subsequent penalty reasons, Chalmers J. commented that PSP had engaged in repeated acts of contempt over a prolonged period and had failed to purge its contempt. Such chronic non-compliance with court orders made deterrence a paramount consideration. Moreover, there was evidence that PSP had financially benefitted from its contempt, and DG had refused to apologize or concede PSP’s wrongdoing. As sanctions, the motion judge 1) appointed the auditor Ernst & Young (“EY”) as Investigative Receiver, to facilitate the audit, 2) ordered that PSP pay into court funds equalling the audit costs to date ($1,998,612.07), and 3) ordered that PSP pay costs of the contempt motion’s liability and penalty stages amounting to $500,000. Chalmers J. refused PTC’s requested r. 60.11(6) order that DG be held personally liable for PSP’s contempt on the basis that DG was not a defendant and no finding of contempt had been made against him personally. PSP appealed the penalty order and PTC cross-appealed the decision not to impose joint and several liability on DG for PSP’s contempt.

issues:

PSP’s Appeal

1. Did the motion judge err by crafting a disproportionate penalty order that exceeded the gravity of PSP’s contempt?
2. Did the motion commit a palpable and overriding error in finding that EY was sufficiently independent to serve as Investigative Receiver?
3. Did the motion judge err with respect to the costs award for the contempt motion?

PTC’s Cross-Appeal

1. Did the motion judge err in refusing to hold DG jointly and severally liable for PSP’s contempt?

holding:

Appeal dismissed. Cross-appeal allowed.

reasoning:

PSP’s Appeal

1. No. PSP submitted that the penalties ordered were disproportionate since the contempt, in PSP’s view, was not true contempt but instead a series of honest mistakes and logistical difficulties in PSP’s good faith efforts to comply. The Court rejected this submission, observing that it required accepting facts distinct from what Chalmers J. found on the contempt motion, namely that PSP had engaged in intentional obstruction of a court order. These findings were not appealed.
2. No. This submission was difficult to understand since PSP did not appeal EY’s appointment, but merely challenged the order that PSP pay money into court to cover the full amount of audit costs incurred thus far, subject to EY’s determination of the portion of the overall costs attributable to PSP’s obstruction. PSP asserted that this arrangement allowed EY to effectively operate as PTC’s tool for the collateral purpose of financially ruining PSP with the audit expense. Since PSP failed to assert that the motion judge erred in finding that PSP’s obstructive acts increased the audit costs, the Court concluded that this submission lacked the necessary factual foundation. Given PSP’s repeated non-compliance, it was not an error to require that PSP pay the full audit costs into court to provide some assurance that this order would be complied with.
3. No. Chalmers J. made no errors in principle, and the costs decision was not plainly wrong. There was thus no basis to grant leave to appeal the costs order.

PTC’s Cross-Appeal

1. Yes. The Court agreed with PTC that the motion judge misunderstood the legal basis for the requested order holding DG jointly and severally liable for financial penalties imposed on PSP. Chalmers J. dismissed the motion because DG had not been found personally liable for contempt. In doing so, the motion judge disregarded the purpose of r. 60.11(6), which is to allow courts to impose liability on directors and officers who have not been found personally liable for their corporation’s contempt. Had DG been found personally liable, PTC would not have needed to proceed under this rule, and the motion judge’s reading of the rule deprived it of utility. Nevertheless, the Court declined to make the order of joint and several liability itself, since at this stage there was insufficient evidence about DG’s involvement in PSP’s acts of contempt. Instead, it remitted the issue to the motion judge for rehearing.

Bank of Montreal v. Makhija, 2026 ONCA 221

[Lauwers, Huscroft and Gomery JJ.A.]

Counsel:

S. Zeitz and J. Bogacki, for the appellant

P.Neufeld, for the respondents

Keywords: Intentional Torts, Fraud, Fraudulent Misrepresentation, Motkoski Holdings Ltd. v. Yellowhead (County), 2010 ABCA 72, Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922, Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Turbo Logistics Canada Inc. v. HSBC Bank Canada, 2013 ONSC 7128, Buccilli et al. v. Pillitteri et al., 2012 ONSC 6624, Panapers Inc. v. 1260539 Ontario Limited, 2007 ONCA 27, National Steel Car Limited v. Independent Electricity System Operator, 2024 ONCA 265

facts:

The respondent applied for and obtained credit facilities from the Bank on behalf of his company, supported by limited personal guarantees. After the company defaulted and the Bank obtained default judgment, the Bank discovered that the respondent had allegedly misrepresented his net worth in a Personal Financial Statement, including ownership of real property, and brought a civil fraud claim seeking to hold him personally liable for the full debt.

The respondent asserted that he had been duped by third parties who orchestrated the scheme, denied preparing or signing the Personal Financial Statement, and maintained that he believed the loan was for a legitimate business venture. The application judge accepted this evidence and dismissed the fraud claim.

issues:

1. Did the application judge misapply the legal test for civil fraud?
2. Did the application judge ignore or misapprehend material evidence?
3. Were the application judge’s reasons inadequate to permit meaningful appellate review?

holding:

Appeal dismissed.

reasoning:

1. No.

The application judge correctly identified the elements of civil fraud and addressed both knowing and reckless misrepresentation. His finding that the respondent reasonably believed the loan transaction was legitimate was fatal to the knowledge/recklessness requirement.

The Court rejected the Bank’s submission that recklessness was not considered. The application judge expressly turned his mind to whether the respondent acted recklessly and concluded that he had a reasonable basis for believing the information provided was true and that the business was bona fide.

Further, the application judge found that the Bank relied solely on the Personal Financial Statement in extending credit. As he also found that the respondent neither prepared nor signed that document, the elements of misrepresentation and causation were not made out. These findings were open to him on the record and disclosed no error.

2. No.

The Bank’s argument was, in substance, an invitation to reweigh the evidence. The application judge accepted the respondent’s evidence that he had been deceived by third parties and that, although careless, he did not act with fraudulent intent or recklessness.

The Court emphasized that these were factual findings entitled to deference and reviewable only for palpable and overriding error. No such error was established. In particular, the Bank’s position was undermined by its own evidence that it relied only on the Personal Financial Statement, which the application judge found the respondent did not prepare or sign.

3. No.

Read functionally and contextually, the application judge’s reasons were sufficient to permit meaningful appellate review and to explain why the Bank’s claim failed.

The application judge reviewed the evidence, summarized the parties’ positions, and made clear findings that the respondent did not prepare or sign the Personal Financial Statement, reasonably believed the transaction was legitimate, and that the Bank relied only on that document. Given these findings, the conclusion that the elements of civil fraud were not established was inevitable.

SHORT CIVIL DECISIONS

Bryan v. Miguna, 2026 ONCA 226

[Zarnett, Monahan and Rahman JJ.A.]

Counsel:

M. Tubie, for the appellant

M.M., acting in person

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Limitation Periods, Fraudulent Concealment, Summary Judgement

Lalli v. Lalli, 2026 ONCA 224

[Roberts, Miller and Monahan JJ.A.]

Counsel:

P. Jeejeebhoy and Z. Romanin, for the appellants

M. Singh, S. Pathmanathan and T. Taraky, for the respondents

Keywords: Property Law, Remedies, Resulting Trust, Civil Procedure, Costs

Hartin v. Hynes, 2026 ONCA 227

[Huscroft, Zarnett and Pomerance JJ.A.]

Counsel:

R. Reynolds, for the appellant

K. Lin, for the respondent, A.B.

Keywords: Torts, Negligence, Vicarious Liability, Civil Procedure, Third Party Claims, Dog Owners’ Liability Act, R.S.O. 1990, c. D.16, Hav-A-Kar Leasing Ltd. v. Vekselshtein, 2012 ONCA 826

Lakehead District School Board v. Mauro, 2026 ONCA 230

[Zarnett, Monahan and Rahman JJ.A]

Counsel:

A. Mauro, acting in person

J. Lester and S. Gunter, for the respondent

Keywords: Intellectual Property, Copyright, Civil Procedure, Summary Judgment, Copyright Act, R.S.C. 1985, c. C-42, s. 35(2)

Murray v. Toronto-Dominion Bank, 2026 ONCA 210

[Tulloch C.J.O., Sossin J.A. and O’Marra J. (ad hoc)]

Counsel:

S.M., acting in person

H. Young and E. Baron, for the respondent.

Keywords: Contracts, Torts, Conversion, Detinue, Civil Procedure, Summary Judgment

Foch v. Sharon Gun Club,  2026 ONCA 218

Rouleau, Thorburn and Favreau JJ.A.

Counsel:

M. Gayed, for the appellants

I. Katchin and R. Davis, for the respondents

Keywords: Contracts, Releases, Civil Procedure, Settlements, Enforcement, Striking Pleadings, Abuse of Process, Standing, Limitation Periods

Leduc v. Dufour, 2026 ONCA 219

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

Counsel:

G. Adair, K.C., for the appellant Wallbridge Wallbridge

J. Lisus and Z. Naqi, for the respondents

Keywords: Contracts, Solicitor and Client, Contingency Fee Agreements, Civil Procedure, Costs

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