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Good afternoon.
Following are this week’s summaries of the Court of Appeal for Ontario for the week of July 11, 2022. There were many interesting cases this week.

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In Humphrey v. Mene Inc., the Court allowed an appeal in part and reduced damages for wrongful dismissal from twelve months to seven as a result of the plaintiff’s failure to reasonably mitigate by accepting another comparable position seven months after she had been dismissed. The awards of aggravated and punitive damages were upheld.

In Sirius Concrete Inc (Re), the Court allowed an appeal from the order of a bankruptcy judge that found that certain funds were part of the bankrupt’s estate and could be distributed to creditors. There was a triable issue as to whether the claimant had a constructive trust claim over the funds, which, if successful, would take the funds out of the bankrupt estate.

In Flight (Re), another bankruptcy decision, the Court allowed an appeal from a judge’s decision that permitted a claim against a trustee in bankruptcy to proceed. The matter was remitted to the court below for a determination of whether leave to bring the claim should be granted under section 215 of the Bankruptcy and Insolvency Act.

Maple Leaf Foods Inc v Ryanview Farms is a case about damages for breach of the sale of breeding pigs. The appeal was allowed in part, but not on the basis of reasonable apprehension of bias.

In Cronos Group Inc. v. Assicurazioni Generali S.p.A., the Court upheld the application judge’s decision permitting an insured to extend coverage under an excess policy that mirrored the terms of a primary policy.

In 2544176 Ontario Inc. v. 2394762 Ontario Inc., the Court allowed an appeal from a judgment setting aside the sale of a property under power of sale. The fact that a mortgagee had defaulted in its obligation to provide a default statement to the mortgagor upon request did not entitle the mortgagor to set aside the sale of the property to an innocent third-party purchaser. The mortgagor’s remedy was against the mortgagee for damages for breach of its obligations.

In 1734934 Ontario Inc. v. Tortoise Restaurant Group Inc., the Court dismissed an appeal from a refusal to allow the plaintiff to add a party defendant in a ten year old franchise dispute.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Sirius Concrete Inc (Re) , 2022 ONCA 524

Keywords: Bankruptcy and Insolvency, Property of the Bankrupt, Property Held in Trust, Torts, Deceit, Unjust Enrichment, Remedies, Constructive Trust, Bankruptcy and Insolvency Act, RSC 1985, c. B-3, s. 67(1)(a), Ontario Securities Commission v Money Gate Mortgage Investment Corporation, 2020 ONCA 812, Credifinance Securities Limited v DSLC Capital Corp, 2011 ONCA 160, 306440 Ontario Ltd v 782127 Ontario Ltd(Alrange Container Services), 2014 ONCA 548, Moore v Sweet, 2018 SCC 52

Flight (Re) , 2022 ONCA 526

Keywords: Bankruptcy and Insolvency, Claims against Trustees, Undischarged Bankrupts, Civil Procedure, Appeals, Leave to Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 215, s. 66.11, s. 193, s. 71, s.2, Family Law Act, R.S.O. 1990, c. F.3, Lloyd W. Houlden, Geoffrey B. Morawetz and Janis P. Sarra, Bankruptcy and Insolvency Law of Canada, loose-leaf (2022-Rel. 6), 4th ed. (Toronto: Thomson Reuters, 2009), Canadian Glacier Beverage Corp. v. Barnes & Kissack Inc., 1999 CanLII 6577 (BCSC), Re 298157 Alberta Ltd., 2005 ABQB 941, Environmental Metal Works Ltd. v. Murray, Faber & Associates, 2013 ABQB 479, Mercure v. Marquette & Fils, [1977] 1 S.C.R. 547, 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225, Romspen Investment Corporation v. Courtice Auto Wreckers Limited, 2017 ONCA 301, Business Development Bank of Canada v. Pine Tree Resorts Inc., 2013 ONCA 282, GMAC Commercial Credit Corporation – Canada v. T.C.T. Logistics Inc., 2006 SCC 35, Braich (Re), 2007 BCSC 1604, R. v. Nowegijick, [1983] 1 S.C.R. 29, R. v. Penunsi, 2019 SCC 39, Grimanis v. Harris & Partners Inc., 2009 CanLII 10673 (Ont. S.C.), The Bank of Nova Scotia v. David Allin, 2013 ONSC 7937, Society of Composers, Authors and Music Publishers of Canada v. Armitage (2000), 50 O.R. (3d) 688 (C.A.), Mpampas v. Schwartz Levitsky Feldman Inc., 2008 ONCA 581, World Class Bakers Corporation, Re, 2005 CanLII 47752 (Ont. S.C.), Re New Alger Mines Limited (1986), 54 O.R. (2d) 562 (C.A.)

Cronos Group Inc. v. Assicurazioni Generali S.p.A. , 2022 ONCA 525

Keywords: Contracts, Interpretation, Insurance, Coverage, Commercial General Liability, Directors’ and Officers’ Liability, Optional Extension Period, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, Northwest Pipe Co. v. RLI Insurance Co., 2013 WL 3712418, Re Canada 3000 Inc. (2002), 35 C.B.R. (4th) 37 (Ont. S.C.). S.A. v. Metro Vancouver Housing Corp., 2019 SCC 4

1734934 Ontario Inc. v. Tortoise Restaurant Group Inc. , 2022 ONCA 528

Keywords: Contracts, Franchise Agreements, Civil Procedure, Amending Pleadings, Adding Parties, Delay, Abuse of process, Costs, Rules of Civil Procedure, Rule 5.03(4), Plante v. Industrial Alliance Life Insurance Co. (2003), 66 O.R. (3d) 74 (S.C.), Downtown Eatery (1993) Ltd. v. Ontario (2001), 54 O.R. (3d) 161 (C.A.), 1734966 Ontario Inc. v. Tortoise Restaurant Group Inc., 2020 ONSC 888, Klassen v. Beausoleil, 2019 ONCA 407, Belsat Video Marketing Inc. v. Astral Communications Inc. et al. (1999), 118 O.A.C. 105 (C.A.), Hamilton v. Open Window Bakery, 2004 SCC 9, St. Jean v. Cheung, 2009 ONCA 9

Humphrey v. Mene Inc. , 2022 ONCA 531

Keywords: Employment Law, Wrongful Dismissal, Termination Without Cause, Reasonable Notice, Duty of Good Faith, Damages, Mitigation, Aggravated Damages, Punitive Damages, Bardal Factors, Employment Standards Act, 2000, Bardal v. The Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, Honda Canada Inc. v. Keays, 2008 SCC 39, Love v. Acuity Investment Management Inc., 2011 ONCA 130, Lin v. Ontario Teachers’ Pension Plan Board, 2016 ONCA 619, Red Deer College v. Michaels, [1976] 2 S.C.R. 324, Beatty v. Best Theratronics Ltd., 2015 ONCA 247, Link v. Venture Steel Inc., 2010 ONCA 144, Dussault v. Imperial Oil Limited, 2019 ONCA 448, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, Colistro v. Tbaytel, 2019 ONCA 197,  leave to appeal refused, [2019] S.C.C.A. No. 173, Doyle v. Zochem Inc., 2017 ONCA 130, Ruston v. Keddco MFG. (2011) Ltd., 2019 ONCA 125,  Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, Bank of Montreal v. Marcotte, 2014 SCC 55, Whiten v. Pilot Insurance Co., 2002 SCC 18, Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669

Maple Leaf Foods Inc v Ryanview Farms , 2022 ONCA 532

Keywords: Contracts, Sale of Goods, Damages, Date of Assessment, Civil Procedure, Reasonable Apprehension of Bias, Sale of Goods Act, RSO 1990, c. S.1, s. 15 & s. 51(2), Maple Leaf Foods Inc v Ryanview Farms, 2015 ONCA 566, Rougemount Capital Inc v Computer Associates International Inc, 2016 ONCA 847, Kinbauri Gold Corp v Iamgold International African Mining Gold Corp (2004), 246 DLR (4th) 595 (Ont CA), Filice v Complex Services Inc, 2018 ONCA 625

2544176 Ontario Inc. v. 2394762 Ontario Inc. , 2022 ONCA 529

Keywords: Real Property, Doctrine of Indefeasibility of Title, Statutory Interpretation, Contracts, Mortgages, Enforcement, Power of Sale, Mortgages Act, R.S.O. 1990, c. M.40, s 22, s 35, s 36, Land Titles Act, R.S.O. 1990, c. L.5, s 99, Cranberry Cove Tower Inc. v. Monarch Trust Co., 2003 CanLII 14548 (Ont. S.C.), 1173928 Ontario Inc. v. 1463096 Ontario Inc., 2018 ONCA 669, Stanbarr Services Limited v. Metropolis Properties Inc., 2018 ONCA 244, Durrani v. Augier (2000), 50 O.R. (3d) 353, Belende v. Patel, 2009 CanLII 74 (Ont. S.C.)

Short Civil Decisions

Sparr v. Downing , 2022 ONCA 537

Keywords: Family Law, Child Support, Sparr v. Downing , 2020 ONCA 793


CIVIL DECISIONS

Sirius Concrete Inc (Re), 2022 ONCA 524

[Benotto, Zarnett and Sossin JJ.A.]

Counsel:

S. Turton, for the appellant Ayerswood Development Corporation

M. Vine and J. DiFruscia, for the respondent BDO Canada Limited, as Trustee for the Estate of Sirius Concrete Inc.

Keywords: Bankruptcy and Insolvency, Property of the Bankrupt, Property Held in Trust, Torts, Deceit, Unjust Enrichment, Remedies, Constructive Trust, Bankruptcy and Insolvency Act, RSC 1985, c. B-3, s. 67(1)(a), Ontario Securities Commission v Money Gate Mortgage Investment Corporation, 2020 ONCA 812, Credifinance Securities Limited v DSLC Capital Corp, 2011 ONCA 160, 306440 Ontario Ltd v 782127 Ontario Ltd(Alrange Container Services), 2014 ONCA 548, Moore v Sweet, 2018 SCC 52

facts:

The appellant, Ayerswood Development Corporation (“Ayerswood”), appealed the order of the bankruptcy judge, made on a motion for directions brought by the respondent, BDO Canada Limited, as trustee in bankruptcy of Sirius Concrete Inc. (“Sirius”). In particular, Ayerswood appealed from those parts of the order by which the bankruptcy judge directed that the amount of $381,578.40 (the “funds”) that Ayerswood paid to Sirius on March 1, 2019, one business day before Sirius made an assignment into bankruptcy on March 4, 2019, formed part of the bankrupt estate of Sirius and was to be distributed to its creditors.

The bankruptcy judge rejected Ayerswood’s position that it had a claim to a remedial or constructive trust over the funds, such that the funds were not property of Sirius that became available for distribution to creditors upon its bankruptcy, and that adjudicating this claim required a fuller evidentiary record. Ayerswood contended that payment of the funds had been induced by Sirius’s deceit and constituted an unjust enrichment, and Ayerswood provided evidence about the circumstances of the payment that the bankruptcy judge described as raising a “live question as to whether Ayerswood was manipulated and duped” into paying the funds. However, the bankruptcy judge held that even accepting that evidence as true, “none of … [it] could possibly lead to the imposition of a trust.”

issues:

Did the bankruptcy judge err in establishing that the funds formed part of the bankrupt estate of Sirius and were to be distributed to its creditors?

holding:

Appeal allowed.

reasoning:

Yes.

The bankruptcy judge did not cite any authority for his conclusion that Ayerswood’s evidence, taken as true, could not possibly establish a trust. Property of the bankrupt divisible among creditors did not include property that the bankrupt held in trust for any other person.

Unjust enrichment, arising from certain types of debtor misconduct prior to bankruptcy, may impress funds with a constructive trust in favour of a third party and the successful assertion of a constructive trust means that the property subject to it does not form part of the property of the bankrupt that vests in the trustee under s. 71 of the BIA.

To establish unjust enrichment, a claimant must show an enrichment, a corresponding deprivation, and the absence of a juristic reason: Moore v Sweet. The payment to Sirius by Ayerswood on March 1, 2019 met the requirements of a benefit and a corresponding deprivation. It was not clear that the existence of a contract would have constituted a juristic reason, given that on Ayerswood’s evidence, the payment was procured by deceit and a breach of the duty of honest performance, and the amount paid was not owing.

Where an unjust enrichment is established, a court may award a proprietary remedy in the form of a constructive trust where a personal remedy is inadequate and the plaintiff’s contribution is linked to the property over which the trust is claimed. A personal remedy was inadequate given the bankruptcy, and the funds paid by Ayerswood on the eve of bankruptcy may have been traceable into the funds in the trustee’s hands.

The Court did not accept the argument that policy reasons necessarily precluded the finding of a constructive trust since giving effect to one would allow money paid to the bankrupt to be clawed back by the payor instead of being shared rateably among all creditors. Parliament has answered this policy question by exempting property that the bankrupt holds in trust from property of the bankrupt that is divisible among creditors.

Nor did the Court accept the argument that nothing in the evidence distinguished the March 1, 2019 payment made by Ayerswood from any of the prior payments it made to Sirius. On Ayerswood’s uncontradicted evidence, it decided to treat that payment differently and would not have turned the funds over but for being lied to.

Since, accepting the evidence of Ayerswood as true, a trust was a legally viable potential remedy, the decision of the bankruptcy judge, rendered on the basis that it was not a viable potential remedy, could not stand.


Flight (Re), 2022 ONCA 526

[Lauwers, Nordheimer and Zarnett JJ.A.]

Counsel:

H.M., for the appellants

T.V., for the respondents

J.P and J.L.C, for the intervener the Superintendent of Bankruptcy

Keywords: Bankruptcy and Insolvency, Claims against Trustees, Undischarged Bankrupts, Civil Procedure, Appeals, Leave to Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 215, s. 66.11, s. 193, s. 71, s.2, Family Law Act, R.S.O. 1990, c. F.3, Lloyd W. Houlden, Geoffrey B. Morawetz and Janis P. Sarra, Bankruptcy and Insolvency Law of Canada, loose-leaf (2022-Rel. 6), 4th ed. (Toronto: Thomson Reuters, 2009), Canadian Glacier Beverage Corp. v. Barnes & Kissack Inc., 1999 CanLII 6577 (BCSC), Re 298157 Alberta Ltd., 2005 ABQB 941, Environmental Metal Works Ltd. v. Murray, Faber & Associates, 2013 ABQB 479, Mercure v. Marquette & Fils, [1977] 1 S.C.R. 547, 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225, Romspen Investment Corporation v. Courtice Auto Wreckers Limited, 2017 ONCA 301, Business Development Bank of Canada v. Pine Tree Resorts Inc., 2013 ONCA 282, GMAC Commercial Credit Corporation – Canada v. T.C.T. Logistics Inc., 2006 SCC 35, Braich (Re), 2007 BCSC 1604, R. v. Nowegijick, [1983] 1 S.C.R. 29, R. v. Penunsi, 2019 SCC 39, Grimanis v. Harris & Partners Inc., 2009 CanLII 10673 (Ont. S.C.), The Bank of Nova Scotia v. David Allin, 2013 ONSC 7937, Society of Composers, Authors and Music Publishers of Canada v. Armitage (2000), 50 O.R. (3d) 688 (C.A.), Mpampas v. Schwartz Levitsky Feldman Inc., 2008 ONCA 581, World Class Bakers Corporation, Re, 2005 CanLII 47752 (Ont. S.C.), Re New Alger Mines Limited (1986), 54 O.R. (2d) 562 (C.A.)

facts:

The respondent made assignments into bankruptcy on four occasions. The appellant was the trustee in respect of each of these bankruptcies. During his fourth bankruptcy, the respondent discovered that between 2003 and 2018, his former spouse, bookkeeper and power of attorney, had misappropriated substantial sums from the appellant’s business, approximately $206,000.

The respondent recovered about $30,300 from his former spouse, which he did not turn over to the appellant trustee. In 2018, he complained to the Office of the Superintendent of Bankruptcy about the trustee’s failure to detect what his wife had done. As a consequence of the complaint, the appellant learned of the respondent’s former spouses’ activities and the payments the respondent recovered. Disputes arose between the trustee and the respondent concerning whether and on what terms he would be discharged from bankruptcy and how the payments from his former spouse should be treated.

In 2019, the respondent and his current spouse commenced an action against the appellant seeking declaratory and monetary relief (the “Action”). The central allegation in the Action is that the appellant, as the Licensed Insolvency Trustee for each of the bankruptcies, ought to have detected the respondent’s former spouses’ misappropriations. The appellant objected to the Action on the basis that at the time of its commencement, (i) the respondent had not been discharged from bankruptcy, and (ii) no permission was obtained under s. 215 of the Bankruptcy and Insolvency Act (the “BIA”) to bring the Action.

Section 215 of the Bankruptcy and Insolvency Act (the “BIA”) requires that permission of the court be obtained to bring an action against, among others, a trustee in bankruptcy “with respect to a report made under, or any action taken pursuant to, this Act”.

The motion judge decided that the respondents did not require permission of the court, under s. 215 of the BIA, to bring an action against the appellant, related to the administration of four bankruptcies of the respondent. The motion judge held that the section did not apply because the action was against the trustee in a personal capacity and because it alleged omissions.

issues:

(1) Is the appeal as of right, and if not, should leave to appeal be granted?

(2) Does s. 215 apply to the Action?

(3) Should the matter be returned to the Bankruptcy Court to determine whether permission to sue should be granted?

holding:

Appeal allowed.

reasoning:

(1) No, the appeal is not as of right. Yes, leave to appeal should be granted.

The appellants argued that the appeal may be brought as of right because either s. 193(b) or s. 193 (c) applies to the decision concerning whether permission under s. 215 of the BIA was required. The Court found that neither section is applicable.

Section 193(b) applies only where the order sought to be appealed is likely to affect other cases in the same bankruptcy proceeding. There are no other cases in the respondent’s bankruptcy that would be affected by the decision about the applicability of s. 215. Section 193(c) does not apply to orders that refuse permission to proceed with an action. This provision does not apply to an order determining that no permission to sue is required.

The Court held that leave to appeal should be granted under s. 193 because the proposed appeal, which related to the proper scope of s. 215 of the BIA, met the test for leave to appeal. It (a) raised an issue that is of general importance to the practice in bankruptcy/insolvency matters; (b) was prima facie meritorious; and (c) did not unduly hinder the progress of the bankruptcy proceedings.

(2) Yes.

The Court held that the motion judge erred in finding that s. 215 did not apply.

Nature of the Action

The Action named the appellant as the only defendant. The amended statement of claim sought a number of declarations based on common law causes of action. The claim was rooted in an alleged relationship between the respondent, and the appellant in his role as trustee in the respondent’s bankruptcies.

After describing the respondent’s former spouses’ alleged defalcations and their discovery, the claim alleged that the appellant’s wrongdoing consisted of the failure to: (i) correct records and reports; (ii) investigate the respondent’s former spouses’ fraud; (iii) have the respondent promptly discharged from bankruptcy; and (iv) sue the respondent’s former spouse.

In summary, the Action sued the appellant as trustee. The claims against him, although common law causes of action, were grounded in, and were alleged to flow from, his role and responsibilities as trustee.

Section 215 of the BIA
The duty of the trustee is to protect both the creditors and the public interest in the proper administration of the bankrupt estate. However, the BIA does not, except for specific matters, confer immunity from suit on a trustee. Section 215 serves a gatekeeping function. It allows the bankruptcy court to screen out or prevent actions that are frivolous or vexatious or that do not disclose a cause of action, or for which there is no factual support, so that the trustee need not respond to them.

Is the Action against the appellant in a personal capacity and therefore outside the scope of s. 215 of the BIA?

The appellants submitted that when an individual who is a director, officer, or employee of a corporate trustee is sued in relation to the performance of the trustee’s duties, s. 215 is applicable. The Court found that it was unclear that the motion judge was relying on the distinction between the appellant and the appellant’s company, when she referred to the Action as being brought against the trustee in its personal capacity.

Section 215 requires a relationship between the substance of the action and the role of the defendant as trustee. The Court held that neither the descriptive tags applied to the cause of action, such as negligence or breach of fiduciary duty, not the assertion in the statement of claim that those causes of action are advanced against the appellant in a personal capacity are determinative.

Where a person sued was involved in the acts complained of as a trustee in a bankruptcy, is alleged to have been performing duties incidental to the administration of the estate, and is alleged to have owed the plaintiff duties as a trustee, the claim falls within s. 215.

The Court held that the motion judge erred in finding that because the Action alleged that the appellant was sued in his “personal capacity”, the Action was outside the scope of s. 215.

Does an action complaining of omissions fall outside of s. 215?

The Court concluded that s. 215 applied to the Action, and the motion judge erred in concluding otherwise. The Court determined that an action is outside of s. 215 only where the gist of the Action is the omission to do something expressly and specifically required by the BIA.

The Court held that while a trustee who fails to do something expressly required by the BIA is not acting pursuant to the BIA within the meaning of s. 215, nothing in the language of s. 215 requires giving similar effect to other kinds of alleged omissions. An action can be in relation to anything done pursuant to the BIA, even if it involves an alleged omission in the course of acting pursuant to the BIA that is said to make the trustee’s performance of its role under the BIA wrongful and therefore actionable.

The central omission asserted by the respondents – that the appellant failed to detect or prevent the misappropriation or take the right steps as a consequence of learning about them – are not omissions to do things specifically and expressly required by the BIA akin to the duty to insure the debtor’s property in Mercure v. Marquette & Fils Inc. The omissions were asserted as breaches of common law duties arising from the role of trustee, making aspects of the performance of the trustee role wrongful and actionable. The Court held that s. 215 therefore applies.

(3) Yes.

The motion judge explicitly declined to express her opinion as to whether, if she had decided s. 215 was applicable, she would have granted permission to bring the Action.

The appellants submitted that the conclusion must be that the respondent could not commence the Action while an undischarged bankrupt, and that this was an incurable defect despite the subsequent annulment of his bankruptcy. None of the authorities cited by the appellants expressly dealt with the ability of an undischarged bankrupt to sue the trustee.

The Court, despite the motion judge not expressing a view on this issue, held that the appropriate disposition would be to return the matter to the bankruptcy court to determine whether leave under s. 215 should be granted.


Cronos Group Inc. v. Assicurazioni Generali S.p.A., 2022 ONCA 525

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

Counsel:

G. Karayannides and M. Mandelker, for the appellant

A. Laing, D. McLeod and G. Sheppard, for the respondent

Keywords: Contracts, Interpretation, Insurance, Coverage, Commercial General Liability, Directors’ and Officers’ Liability, Optional Extension Period, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, Northwest Pipe Co. v. RLI Insurance Co., 2013 WL 3712418, Re Canada 3000 Inc. (2002), 35 C.B.R. (4th) 37 (Ont. S.C.). S.A. v. Metro Vancouver Housing Corp., 2019 SCC 4

facts:

Cronos Group Inc. (“Cronos”) is a global cannabinoid company that manufactures and markets cannabis and cannabis-derived products.

Cronos held a primary Executive and Corporate Securities Insurance Policy issued by AXA XL (the “Primary Policy”) and a secondary Excess Directors’ and Officers’ Liability Policy by the appellant, Assicurazioni Generali S.P.A. (“Generali”) (the “Excess Policy”). Cronos was the named insured under the Primary Policy and the Excess policy for the period February 27, 2019 to February 27, 2020.

The Primary Policy included an Optional Extension Period (“OEP”) option that allowed the insured to extend the period of coverage beyond the expiration date of the Primary Policy within 30 days of its expiry. The Excess Policy provides that it is subject to the same terms, conditions, limitations and exceptions as are contained in the Primary Policy, with certain exceptions. The OEP option is not identified as an exception.

Cronos sought to exercise the OEP option under the Excess Policy. Generali took the position that the Excess Policy did not contain an OEP option.

The application judge held that: (i) the Excess Policy provided Cronos with a contractual right to exercise an OEP option in respect of the Excess Policy; (ii) Cronos had successfully exercised that right by complying with each of the option requirements; and (iii) the cost payable for the OEP was US$486,000 (or CDN$704,700), twice the original premium of the Excess Policy.

Generali appealed, seeking to set aside the order below and dismiss the application.

issues:

(1) Did the application judge err in finding that Generali did not act in good faith towards Cronos when the latter sought to exercise an OEP option?

(2) Did the application judge err in finding Cronos was entitled to purchase an OEP under the Excess Policy?

(3) Did the application judge err in finding that the premium for the Excess Policy’s OEP was twice the amount of the policy’s original premium?

holding:

Appeal dismissed.

reasoning:

(1) No

A review of the application judge’s reasons disclosed that she did not make any finding to the effect that Generali failed to act in good faith in respect of the efforts of Cronos to exercise an OEP option. Her reference to some of the case law regarding the contractual principle of good faith was obiter.

(2) No

Generali submitted that the application judge’s conclusion that the Excess Policy entitled Cronos to exercise the OEP option was flawed because several terms of the Excess Policy, and one aspect of the factual matrix, implicitly indicated that such a right would be inconsistent with the agreement of the parties reflected in the Excess Policy. Specifically, Generali pointed to five matters to support its submission that the application judge erred in her interpretation:

(1) The Excess Policy does not contain an explicit reference to an OEP option;

(2) Condition 2 of the Excess Policy expressly excludes “renewal agreements” as a follow-form term;

(3) Condition 8 of the Excess Policy prevents Cronos from electing to make unilateral extensions of coverage;

(4) The Excess Policy lacks an express mechanism, or formula, for calculating a premium for the OEP option; and

(5) Generali’s interpretation that the Excess Policy did not contain an OEP option was consistent with the view expressed by an employee of Aon (Cronos’ insurance broker), not at the time of execution of the Policies, but at the time Cronos sought to exercise the OEP option.

The Court dealt with each of these arguments as follows.

(1):

The OEP is included in the Excess Policy. The OEP in the Primary Policy clearly states that if the Policy is not renewed, the insured shall be entitled to the extension upon payment of the additional premium. The Excess Policy follows form with the Primary Policy “(except as regards the premium, the amount and limits of liability, any deductible or self-insurance provision, the obligation to investigate and defend and the renewal agreement (if any)).” Notably, Condition 2 of the Excess Policy does not exclude the OEP option.

(2):

The application judge concluded that the exercise of the OEP option did not give rise to a policy renewal, which Condition 2 would exclude from the follow-form terms. The OEP merely extends the discovery period and only arose in the event the insurer did not renew the policy. In this case, the applicant was specifically denied the chance to renew both the Primary Policy and the Excess Policy. It was the non-renewal event that triggered the right to exercise the OEP.

(3):

The 13-month extension of the Primary Policy did not offend either Conditions 2 or 8 of the Excess Policy.

Condition 2 stipulated, in part, that “[t]he Primary and Underlying Policy will be maintained in full effect during the currency of this Policy”; Condition 8 provided, in part, that no amendment to the Primary Policy would “be effective in extending the scope of cover of [the Excess Policy] unless and until agreed in writing by [Generali]”.

The amendment to the Primary Policy which extended the policy period for a further 13 months did not abrogate or reduce that policy’s coverage limits. The maximum aggregate limit of liability under the Primary Policy remained that set out in Item 3 of the Primary Policy’s Declaration, namely US$5 million.

It was undisputed that the respondent did not provide its written consent to the amendment to the Primary Policy. Therefore, it did not agree to any change to the scope of the cover, and it would not be bound by any such change. The coverage under the OEP to be provided by the respondent would continue to be limited to wrongful conduct that occurred prior to the expiry of the Primary Policy; but the discovery period for those claims would be extended by an additional twelve months.

The respondent raised no objection to the extension at that time. At no time during the discussions between the parties did it assert this extension somehow invalidated the OEP option.

(4):

The application judge assessed this submission in light of the principle that contracts of insurance are to be interpreted to give effect to their terms and in a commercially reasonable manner. The application judge found support from Re Canada 3000 Inc. (2002), recognizing that while in Canada 3000 the insurer took a different position than Generali, appearing to agree that an OEP option was available under the excess policy, the application judge adopted the analysis in Canada 3000 that the excess policy was “subject to the same insuring clauses, definitions, terms, conditions, exclusions and other provisions as those set forth in the Primary Policy,” except as regards the premium, and the amounts and limits of liability. Since the Excess Policy did not list the OEP as an exclusion in Condition 2, it was one of the follow-form terms.

(5):

The application judge did not refer to a March 9, 2020 internal email amongst employees of Aon, the brokers for Cronos at the time, in which the author wrote in respect of Conditions 2 and 8 of the Excess Policy.

However, there was no error in the application judge failing to advert in her reasons to this email. The email was not one in which the broker volunteered an opinion on whether the Excess Policy contained an OEP option as a follow-form term. The email simply stated the common-sense proposition that Generali was not bound by what AXA XL, the primary insurer, may do but by the obligations that bind Generali under the Excess Policy.

(3) No

The Excess Policy did not specify the premium payable in the event Cronos exercised its option for an OEP. While the Primary Policy stipulated the premium payable in the event Cronos purchased the OEP option under the Primary Policy – twice the basic premium – it made no mention of the premium payable in respect of the OEP under the Excess Policy.

The application judge rejected Generali’s submission that the amount of the premium for the Excess Policy’s OEP should not follow the form of the premium structure in the Primary Policy where the OEP premium was twice the amount of the basic premium for the initial term. Instead, the premium for the Excess Policy OEP should be exactly the same as that specified for the Primary Policy OEP, namely US$1.5 million.

The application judge reasoned that the relationship between the Excess Policy’s basic premium and OEP premium should follow the 1:2 ratio set out in the Primary Policy for two reasons. First, the application judge was persuaded by the reasoning in the Canada 3000 decision about the appropriateness of such an approach. Second, the application judge did not regard Condition 2’s exclusion of “premium” from the follow-form terms as applying to the premium for the OEP.

Lastly, the application judge was not persuaded that the Excess Policy impliedly gave Generali the right to fix the amount of the OEP premium stating that the premium is determined at the time the policy is written, not when the loss arises.


1734934 Ontario Inc. v. Tortoise Restaurant Group Inc., 2022 ONCA 528

[Lauwers, Roberts and Nordheimer JJ.A.]

Counsel:

D. J. MacKeigan and C. Vegso, for the appellants

A. Boudreau and L. Baker, for the respondents, Tortoise Restaurant Group Inc., Turtle Jack’s Marketing Fund Inc., and Tortoise Restaurant Group (2019) Inc.

E. Mayzel and J. Shepherd, for the respondent, 11554891 Canada Inc.

Keywords: Contracts, Franchise Agreements, Civil Procedure, Amending Pleadings, Adding Parties, Delay, Abuse of process, Costs, Rules of Civil Procedure, Rule 5.03(4), Plante v. Industrial Alliance Life Insurance Co. (2003), 66 O.R. (3d) 74 (S.C.), Downtown Eatery (1993) Ltd. v. Ontario (2001), 54 O.R. (3d) 161 (C.A.), 1734966 Ontario Inc. v. Tortoise Restaurant Group Inc., 2020 ONSC 888, Klassen v. Beausoleil, 2019 ONCA 407, Belsat Video Marketing Inc. v. Astral Communications Inc. et al. (1999), 118 O.A.C. 105 (C.A.), Hamilton v. Open Window Bakery, 2004 SCC 9, St. Jean v. Cheung, 2009 ONCA 9

facts:

The appellants are several Turtle Jack’s restaurant franchisees. They had commenced this action in December 2012. They sought an accounting of the advertising fund as required under their franchise agreements and damages for the misuse of those funds. The appellants claimed that the respondents, Tortoise Restaurant Group Inc., Turtle Jack’s Marketing Fund Inc., and Tortoise Restaurant Group (2019) Inc., had exclusive control over the advertising fund, its accounting, and the accounting for each of the franchisees’ locations. The appellants further alleged that advertising for Turtle Jack’s consisted primarily of in-store promotions to benefit suppliers, which were created, developed, implemented, and paid for by the advertising fund and/or the franchisees.

1734934 Ontario Inc., 2187195 Ontario Inc., 2137362 Ontario Inc., 1901164 Ontario Inc., and KE Restaurants Inc. appealed from the order of the motion judge, who allowed an appeal from the decision of Associate Judge (formerly Master) Donald Short and set aside his order (i) adding 11554891 Canada Inc. as a defendant and (ii) allowing amendments to the statement of claim relating to supplier contributions to an advertising fund and for production of certain documents relating thereto.

The motion judge had concluded that the Associate Judge had erred in law by incorrectly describing the test to add a party. In that regard, the Associate Judge had said that r. 5.03(4) of the Rules of Civil Procedure provided “that any person whose presence as a party is necessary to enable the court to adjudicate effectively and completely on the issues in the proceeding shall be added as a party”. The motion judge had stated that the use of the word “shall” had not appeared in the operative portion of r. 5.03(4). Rather, the subrule used the permissive language of “may” in relation to the court’s jurisdiction to add a party.

Regarding the addition of parties, the motion judge found that adding 115 as a party would constitute an abuse of process. In particular, he found that it would add unnecessary costs, require further discoveries, and likely result in further motions for production. Ultimately, it was the motion judge’s view that all of this “would add to the already lengthy procedural history of this case and would be disproportionate to the nature of the dispute and the interests involved, given 115’s potential limited liability, if any.”

In terms of the order to permit amendments to the statement of claim, the motion judge had found that the Associate Judge had both failed to provide sufficient reasons for his conclusion and misapprehended the evidence in relation to whether to allow the amendments. The motion judge had found that permitting the amendments would also constitute an abuse of process, even if they were not statute-barred.

The motion judge had allowed the appeal and set aside the Associate Judge’s order that added 115 as a party and permitted the amendments, along with the production of related documents. The motion judge had ordered the appellants to pay costs of the appeal and the underlying motion to Tortoise Restaurant Group Inc., Tortoise Restaurant Group (2019) Inc., and Turtle Jack’s Marketing Fund Inc. collectively, as well as to 115.

issues:

(1) Did the motion judge err in finding 115 was not a necessary party and that adding it to the proceedings would be an abuse of process?

(2) Did the motion judge err in concluding that the supplier contribution amendments were not tenable, statute-barred, and an abuse of process, and that the related productions were therefore not relevant?

(3) Did the motion judge err in awarding costs of the motion to Tortoise Restaurant Group Inc., Tortoise Restaurant Group (2019) Inc., and Turtle Jack’s Marketing Fund Inc.?

holding:

Appeal dismissed.

reasoning:

(1) No.

In terms of the order adding 115 as a party, the Court agreed with the motion judge that it amounted to an abuse of process. The potential liability of 115 to the appellants was dubious, at best. Adding 115 as a party would have further delayed and complicated a proceeding that had already been significantly delayed in getting to trial. The Court noted that the manner in which this case had wound its way through the justice system over the prior seven (now almost ten) years was “nothing short of disgraceful.”

The Court rejected the appellants’ complaint that the motion judge failed to assess which parties delayed the case or to what extent. The motion judge was not required to embark on the civil equivalent of the detailed analysis undertaken in criminal proceedings when considering whether delay breaches an accused person’s right to trial within a reasonable time under s. 11(b) of the Canadian Charter of Rights and Freedoms. The Court noted that it was unnecessary to allocate delay between the parties since all parties in a civil proceeding bear responsibility for moving the action forward in a timely fashion.

In a civil proceeding, the Court emphasized that the plaintiff bears the principal responsibility for advancing the case since it is the plaintiff who commenced the action and it was the plaintiff’s claim that was to be adjudicated. In that regard, this was not an overly complicated action, nor will it involve a lengthy trial. The fact that the case was approaching the tenth anniversary of the commencement of the action was, by itself, a sufficient reason to find inordinate delay.

The Court rejected that the appellants would have suffered the degree of prejudice that they claimed they would if 115 was not added as a party. The nature of the claim advanced had not directly related to 115. Rather, it appears that 115 was only sought to be added as a possible additional source for payment of any judgment that the appellants might obtain.

The Court also rejected the appellants’ claim that failing to add 115 will result in “unnecessary legal costs, duplicative proceedings, risks of inconsistent findings, estoppel, prejudice, and delays”. Given the limited involvement of 115 in these matters, the legal costs of a separate proceeding against it would have not been sufficiently different from the legal costs associated with pursuing the claim in this proceeding.

(2) No.

On the issue of the amendments to the statement of claim, the Court stated that the appellants’ contention that they were merely particularizing their existing claims did not withstand scrutiny. A comparison of the existing statement of claim with the proposed amended statement of claim revealed that, in fact, the appellants were attempting to add entirely new claims. For example, the Court noted that in the existing statement of claim, with respect to the advertising fund, the appellants had claimed “damages in the amount of $5,000,000 for loss of profits as a result of the improper and/or misuse of Advertising Fund contributions”. In the proposed amended statement of claim, the appellants’ claim regarding the advertising fund was, in addition to adding claims for an accounting and various declarations, for “damages in the amount of $20,000,000 for breach of contract, breach of duty to act in good faith, breach of the duty of fair dealing, misuse of Advertising Contributions for supplier promotions and co-branding and loss of profits, payable to the Plaintiffs”.

The Court concluded that the appellants were seeking to add new claims to the existing statement of claim. The motion judge was correct in holding that the Associate Judge had failed to consider this issue and, further, had failed, as a consequence, to determine if these new claims were statute-barred. Further still, the Associate Judge had failed to consider whether allowing new claims to be added, at this late juncture, constituted an abuse of process.

Regarding whether the claim was statute-barred, the Court stated that the appellants were aware of the facts underlying these claims more than two years prior to bringing the motion to amend. The expiry of a limitation period was one form of non-compensable prejudice: Klassen v. Beausoleil at para 26. Further, it was a basic principle that a party cannot circumvent the operation of a limitation period by amending their pleadings to add additional claims after the expiry of the relevant limitation period: Klassen, at para. 26. To permit such amendments in these circumstances would amount to an abuse of process, for the reasons expressed by the motion judge. A court retains the discretion not to permit amendments that constitute an abuse of process: Belsat Video Marketing Inc. v. Astral Communications Inc. et al. at paras 3-4. The Court concluded that the amendments ought not to be allowed, and that the order requiring production of documents relating to those proposed claims had to be set aside.

(3) No.

The appellants had not shown that the motion judge made an error in principle or that the costs award was plainly wrong: Hamilton v. Open Window Bakery at para. 27. As the motion judge noted, the appellants were “entirely successful in the result” on appeal. The were therefore entitled to their costs of the motion below: St. Jean v. Cheung at paras. 4-5.


Humphrey v. Mene Inc. , 2022 ONCA 531

[van Rensburg, Nordheimer and Harvison Young JJ.A.]

Counsel:

J. M. McHenry, K. McMillan and J. Donen, for the appellant/respondent by way of cross-appeal

J. Goldblatt and J. Howell, for the respondent/appellant by way of cross-appeal

Keywords: Employment Law, Wrongful Dismissal, Termination Without Cause, Reasonable Notice, Duty of Good Faith, Damages, Mitigation, Aggravated Damages, Punitive Damages, Bardal Factors, Employment Standards Act, 2000, Bardal v. The Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, Honda Canada Inc. v. Keays, 2008 SCC 39, Love v. Acuity Investment Management Inc., 2011 ONCA 130, Lin v. Ontario Teachers’ Pension Plan Board, 2016 ONCA 619, Red Deer College v. Michaels, [1976] 2 S.C.R. 324, Beatty v. Best Theratronics Ltd., 2015 ONCA 247, Link v. Venture Steel Inc., 2010 ONCA 144, Dussault v. Imperial Oil Limited, 2019 ONCA 448, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, Colistro v. Tbaytel, 2019 ONCA 197,  leave to appeal refused, [2019] S.C.C.A. No. 173, Doyle v. Zochem Inc., 2017 ONCA 130, Ruston v. Keddco MFG. (2011) Ltd., 2019 ONCA 125,  Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, Bank of Montreal v. Marcotte, 2014 SCC 55, Whiten v. Pilot Insurance Co., 2002 SCC 18, Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669

facts:

This was an appeal and a cross-appeal of a summary judgment in a wrongful dismissal action. The respondent, J.H., was employed by the appellant, Mene Inc. (“Mene”), and its parent company, for approximately three years. At the time of her dismissal, she was Mene’s Chief Operating Officer (“COO”), earning an annual salary of $90,000, with participation in Mene’s bonus/stock option plan. Ms. H was terminated, allegedly for cause, shortly after she asked for a raise. She remained unemployed at the date of the motion for summary judgment.

Although Mene asserted in its defence that it terminated Ms. H’s employment for cause, it withdrew the allegation of cause in the course of the litigation, and instead relied on a contractual provision limiting Ms. H’s compensation to the minimum provided under the Employment Standards Act, 2000 (the “ESA”). Ms. H alleged bad faith in the manner of her termination, and other misconduct by Mene during her employment and the litigation. The motion judge awarded Ms. H damages of $81,275.45 (in lieu of 12 months’ notice less one month’s compensation for unreasonable mitigation and the ESA amount she had already received), as well as aggravated damages of $50,000 and punitive damages of $25,000.

issues:

(1) Does the 12-month notice period fall outside an acceptable range and, if so, what is the appropriate notice period?

(2) Did the motion judge err in reducing the damages by only one month’s compensation to account for the respondent’s failure to mitigate?

(3) Did the motion judge err in her award of aggravated damages?

(4) Did the motion judge err in her award of punitive damages?

holding:

Appeal allowed in part. Cross-appeal dismissed.

reasoning:

(1) No.

The Court recognized the “fact-specific and contextual approach to the period of reasonable notice, limited by a range of reasonableness”: Strudwick v. Applied Consumer & Clinical Evaluations Inc. The Court was not persuaded that the motion judge’s characterization of Ms. H’s employment reflected a palpable and overriding error. Her conclusion that Ms. H was operating at a COO level within Mene was fully supported by the evidence. The motion judge reasonably rejected Mene’s argument, based on Mr. S’s description of Ms. H’s role, that although she held the title of COO, the court should find that her role was something less.

A fair reading of the motion judge’s reasons made it clear that she considered all of the Bardal factors. As noted earlier, the question of the weight to be given to each factor was within her discretion, having regard to the particular circumstances of the case. The motion judge reviewed and applied the Bardal factors of age, length of service, character of employment, and availability of similar employment, having regard to the experience, training and qualifications of the employee: Bardal. She considered the authorities put forward by both parties and, after weighing all of the Bardal factors, she fixed the reasonable notice period at 12 months.

Because no single Bardal factor should be given disproportionate weight or be treated as determinative, a short period of service will not always lead to a short period of notice: Honda Canada Inc. v. Keays. It would have been an error for the motion judge to overemphasize the short duration of Ms. H’s employment as a factor. It is important to keep in mind the object of fixing a reasonable notice period, which is to determine, in the particular circumstances of the case, how long it would reasonably take the terminated employee to find comparable employment: Lin v. Ontario Teachers’ Pension Plan Board. The determination of reasonable notice depends on the context and particular circumstances of the case. Mene failed to demonstrate any legal error or error in principle in the motion judge’s approach, or any palpable and overriding error of fact that would justify interfering with her determination that 12 months was a suitable notice period.

(2) Yes.

The Court rejected Mene’s first two arguments: (1) that the notice period ought to have been reduced further by virtue of Ms. H’s six-month delay in sending out applications, and (2) that Ms. H applied for too narrow a range of positions, and failed to apply for comparable positions that were reasonably available.

There is no precise formula for determining the reasonableness of an employee’s mitigation efforts or the effect of any delay in mitigation on the employee’s damages. The motion judge’s assessment of the reasonableness of Ms. H’s efforts, and the effect of Ms. H’s delay in applying for jobs on the damages to which she is entitled, revealed no error in principle or palpable and overriding error of fact. The Court found no reason to interfere with the motion judge’s findings of fact. She concluded that Ms. H was qualified for the positions for which she applied, and that, although Mene had conducted various searches to show that there were many jobs for which Ms. H did not apply, it failed to demonstrate that those positions were comparable to Ms. H’s position at Mene.

The Court accepted Mene’s third argument that Ms. H unreasonably rejected a suitable comparable position seven months post-termination. Comparable employment does not mean identical employment. It means “a comparable position reasonably adapted to [the plaintiff’s] abilities”: Link v. Venture Steel Inc. It was sufficient for Mene to rely on evidence that Ms. H had been offered a senior management position with compensation that was comparable to or greater than what she earned at Mene. The availability of this comparable role seven months post‑termination meant that Ms. H turned down a position that could reasonably have mitigated her damages. While the onus on a defendant in this context was a heavy one, on the evidence before the motion judge, Mene met its obligation of demonstrating that Ms. H’s damages for the balance of the notice period could reasonably have been avoided. Together with the reduction in damages arising from Ms. H’s delay in applying for jobs (a reduction of one month’s compensation), the Court limited Ms. H’s damages in lieu of notice to the equivalent of six months’ compensation, and reduced her damages accordingly.

(3) No.

An award of aggravated damages can be made in wrongful dismissal cases where an employer engages in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive”: Wallace v. United Grain Growers Ltd. However, the “normal distress and hurt feelings resulting from dismissal are not compensable”: Honda. Assessing aggravated damages is “an imprecise, fact-specific exercise”, entitled to deference on appeal: Colistro v. Tbaytel.

Contrary to Mene’s assertions on appeal, there was no error in the motion judge’s conclusion that there was bad faith in the manner of Ms. H’s termination. The motion judge concluded that the termination for cause was in bad faith – that the various performance issues and misconduct allegations that Mene had raised at the time of Ms. H’s suspension and removal from the position of COO (which amounted to constructive dismissal, a finding not challenged on appeal) and formal termination were a pretext for terminating her for cause. There was no basis to interfere with the motion judge’s conclusion that there was bad faith in the circumstances of Ms. H’s dismissal that would warrant an award of aggravated damages.

The time frame relevant to an award of aggravated damages is not limited to the moment of dismissal. Pre- and post-termination conduct may be considered so long as it is “a component of the manner of dismissal”: Doyle. The motion judge carefully considered all of the evidence respecting the circumstances and timing of Ms. H’s dismissal, as well as the manner in which Mene handled the termination and then conducted itself in the litigation that followed. The finding of bad faith was not, as Mene suggests, premised on the unprofessional and bullying manner in which Ms. H was treated by Mene’s CEO during the course of her employment. As the Court noted in Doyle, “while some conduct [in relation to a dismissal] viewed in isolation would not constitute bad faith, the same conduct when part of a course of conduct on the part of an employer that inflicts mental distress on an employee may legitimately inform the result”.

The motion judge did not err when she concluded, that the abuse Ms. H suffered was ongoing throughout her employment and that it was “directly related to the manner of her dismissal”
The motion judge was satisfied that Ms. H suffered compensable and reasonably foreseeable damages for mental distress. All of these findings were amply supported by the evidence, and constituted harm of the nature and extent that would justify an award of aggravated damages: see, e.g., Ruston v. Keddco MFG. (2011) Ltd. The motion judge considered the positions and authorities provided by the parties. The Court saw no basis to interfere with the conclusion.

(4) No.

An appellate court may interfere with a trial court’s assessment of punitive damages where (1) there is an error of law; or (2) the amount is not rationally connected to the purposes for which the damages are awarded, namely prevention, deterrence (both specific and general), and denunciation: Bank of Montreal v. Marcotte. When the amount of punitive damages awarded is challenged, the question on appeal is “whether a reasonable jury, properly instructed, could have concluded that an award in that amount, and no less, was rationally required to punish the defendant’s misconduct”: Whiten v. Pilot Insurance Co.

First, Mene demonstrated no palpable and overriding error in the motion judge’s factual conclusions and analysis. She concluded that Mene’s conduct, particularly in connection with the litigation, was “reprehensible” and “consistent with a litigant who sees itself as above the rules.” All of her findings were supported by the evidence and were entirely reasonable. Second, with respect to the amount of punitive damages, the motion judge considered the range of punitive damages awarded in other cases and settled on an amount that she considered necessary in the circumstances of this case. She specifically adverted to the requirement to avoid double recovery as between compensatory and punitive damages, and she “calculated the damages with this in mind”. There was no reason for the Court to interfere with her assessment of the amount of punitive damages.

As for the cross-appeal, the Court rejected Ms. H’s first argument: that the motion judge failed to consider the objective of denunciation. Although she did not identify “denunciation” as a specific objective of punitive damages, she referred to the relevant case authorities, and there was nothing to suggest that she failed to consider all of the purposes of punitive damages. Reading her reasons as a whole, it was apparent that she determined that the compensatory damages were insufficient in this case in light of all of the objectives of a punitive damages award, including denunciation. The Court rejected Ms. H’s second argument on the cross‑appeal: that the motion judge ought to have considered the manner of termination and Mene’s pre-termination conduct in fixing the amount of punitive damages. While Ms. H was correct that the same conduct can justify an award of both aggravated and punitive damages, no double-compensation or double-punishment can be awarded: Honda. The Court found that the motion judge’s observation that “there should be no double recovery as between aggravated and punitive damages” was an acknowledgment that a higher amount for punitive damages was not warranted where the same conduct had been punished by the award of aggravated damages. There was no basis for increasing the award of punitive damages to offset the reduced compensatory damages to which she was entitled by virtue of her failure to mitigate.


Maple Leaf Foods Inc v Ryanview Farms , 2022 ONCA 532

[Doherty, Tulloch and Thorburn JJ.A.]

Counsel:

M.A. Cook, for the appellants

B. Waterman, for the respondent

Keywords: Contracts, Sale of Goods, Damages, Date of Assessment, Civil Procedure, Reasonable Apprehension of Bias, Sale of Goods Act, RSO 1990, c. S.1, s. 15 & s. 51(2), Maple Leaf Foods Inc v Ryanview Farms, 2015 ONCA 566, Rougemount Capital Inc v Computer Associates International Inc, 2016 ONCA 847, Kinbauri Gold Corp v Iamgold International African Mining Gold Corp (2004), 246 DLR (4th) 595 (Ont CA), Filice v Complex Services Inc, 2018 ONCA 625

facts:

This was a second appeal on the issue of damages. The appellants were pig farmers. In 2004 and 2005, they decided to repopulate their herds and purchased breeding pigs (gilts) and boars from the respondent. The respondent represented to the appellants that the gilts would produce healthy segregated early weaners (“SEWs”). In February 2006, the respondent delivered gilts that were in poor health which eventually infected the entire herd at the isolation barn where they were housed.

In anticipation of the SEWs that would be produced from the new gilts and boars, the appellants had entered into a contract with a third party in July 2006 for the sale of approximately 550 SEWs per week (the “Werden Contract”). The spread of disease among the animals at one of the appellants’ isolation barns, however, rendered the appellants incapable of fulfilling the Werden Contract.

The parties negotiated a replacement delivery of the gilts in November 2006 that were infected upon arrival which spread across the rest of the farm. The parties negotiated again in 2007. The parties disputed the terms of this agreement at trial: the appellants claimed the respondent agreed to provide additional replacement gilts and purebred animals for free; the respondent, however, later issued invoices for the delivery.

The appellants ultimately lost their farm through foreclosure and appealed Desotti J.’s assessment of damages.

issues:

1. Did Desotti J.’s remarks, taken together with his reasons for judgment, give rise to a reasonable apprehension of bias?

2. Did Desotti J. err in his assessment of damages in that:
a) He failed to assess damages as of the date of the breach;
b) He erroneously considered the hindsight evidence of the PRRSV outbreaks in November 2006 and 2007; and
c) His assessment of loss for the period between January 1, 2007 and November 30, 2007 is plainly wrong and not grounded in the evidence.

holding:

Appeal allowed in part.

reasoning:

1. No.

The appellants argued that the decision by Desotti J. gave rise to a reasonable apprehension of bias because the trial judge’s comments in the course of the trial, taken together with the reasons for judgment, indicated that he was biased toward affirming findings and methodologies made in prior proceedings rather than hearing the trial on its own merits.

Both parties relied on evidence filed in the first trial. Having regard to both the filed and live evidence, Desotti J. outlined the facts which were not in dispute. He also recognized that some of the findings in the first trial were tainted by error and could not be relied upon. The trial judge considered this evidence in conjunction with the contested arguments and conclusions in the expert reports and engaged in a thorough analysis to determine which portions of the contested evidence he accepted or did not.

2. a) & b) No.

The appellants argued that the trial judge erred by assessing damages as of the date of trial rather than as of the date of the breach, and that it was an error to consider hindsight evidence of the PRRSV outbreaks in November 2006 and November 2007 in assessing damages.

The presumptive date for assessment of damages in contract law is the date of breach. There was sufficient evidence before the trial judge on which to justify deviation from the presumptive assessment date, particularly in light of s. 51(2) of the Sale of Goods Act. The presence of significant intervening events, which the trial judge found made the loss suffered more uncertain, must be considered in determining what measure of damages fairly reflected the appellants’ loss as a direct and natural consequence of the breach. To do otherwise would not be just in all the circumstances and risked burdening the respondent with more than its fair share of liability. Setting the date of the trial as the date of assessment of damages permitted the trial judge to properly consider the direct and naturally resulting loss in the circumstances of this case, particularly in light of ancillary factors such as the PRRSV outbreak and the crashing market for SEWs.

2. c) Yes.

The appellants argued that Desotti J. erred in deducting $139,859 from the lost profits between January 1, 2007 and November 30, 2007, which totalled $283,678. They argued the trial judge misapprehended $139,859 as being actual revenue earned by the appellants when in fact it represented lost profits suffered from selling SEWs at lower than market price.

The trial judge’s characterization of the $139,859 figure as reduced revenue received by the appellants misapprehended the expert report prepared for the respondent (“the expert report”). Had the appellants been able to sell 7,311 pigs at the OMAFRA (Ontario Ministry of Agriculture and Rural Affairs) average price of $38.75 per SEW, they would have had a revenue of $283,301. However, they actually sold 7,311 pigs for $19.62 per SEW on average, which is a revenue of $143,442. The difference in revenue between the OMAFRA selling price average and the appellants’ selling price average totaled $139,859. This figure, as indicated in the expert report, consisted of the portion of the lost profit attributable to selling at a below market price.

The $139,859 figure was not the reduced revenue the appellants earned, and it was an error for the trial judge to reduce the lost profits of $283,678 by $139,859.


2544176 Ontario Inc. v. 2394762 Ontario Inc. , 2022 ONCA 529

[Gillese, Miller and Coroza JJ.A.]

Counsel:

Jonathan Rosenstein, for the appellant

Mark A. Klaiman, for the respondent

A. Paul Gribilas, for 2394762 Ontario Inc., Steven Gallen and Debra Gallen

Keywords: Real Property, Doctrine of Indefeasibility of Title, Statutory Interpretation, Contracts, Mortgages, Enforcement, Power of Sale, Mortgages Act, R.S.O. 1990, c. M.40, s 22, s 35, s 36, Land Titles Act, R.S.O. 1990, c. L.5, s 99, Cranberry Cove Tower Inc. v. Monarch Trust Co., 2003 CanLII 14548 (Ont. S.C.), 1173928 Ontario Inc. v. 1463096 Ontario Inc., 2018 ONCA 669, Stanbarr Services Limited v. Metropolis Properties Inc., 2018 ONCA 244, Durrani v. Augier (2000), 50 O.R. (3d) 353, Belende v. Patel, 2009 CanLII 74 (Ont. S.C.)

facts:

2544176 Ontario Inc. (the “Mortgagor”) owned a parcel of commercial property located at 197 Bellamy Road North in Toronto (the “Property”). The Property was encumbered by a mortgage in favour of 2394762 Ontario Inc., S.G. and D.G. (the “Mortgagees”).

2815608 Ontario Inc. (the “Purchaser”) bought the Property from the Mortgagees through the exercise of their power of sale. The application judge found that the Purchaser was a bona fide third party without notice of any defects in the power of sale process (i.e. an innocent purchaser).

On March 2, 2021, the Mortgagees’ APS closed and title to the Property was transferred to the Purchaser (the “Transfer”). After the Transfer took place, the Mortgagor applied to have it set aside. The application judge agreed and ordered that the Transfer be set aside with costs to the Mortgagor fixed at $19,000 by judgment dated April 16, 2021 (the “Judgment”). The application judge declared that the Mortgagees had violated s. 22 of the Mortgages Act by failing to provide a default statement requested by the Mortgagor. The application judge set aside the Transfer, and declared that the Transfer was null and void as against the Mortgagor. The innocent Purchaser appealed.

issues:

Did the application judge err in setting aside the Transfer?

holding:

Appeal allowed.

reasoning:

Yes. The Court first stated that it is well established that questions of statutory interpretation are questions of law and reviewed on a correctness standard: Harvey v. Talon International Inc. at para 32.

The Purchaser submitted that its rights take precedence over those of the Mortgagor who, at the time of the Transfer, had a claim against the Mortgagees for the improper exercise of the power of sale. Further, the Purchaser said that the Safe Harbour Protections, on their face and as a matter of policy, must “trump”, otherwise no purchaser under power of sale – for value and without notice – could ever be assured of good title. The Mortgagor submitted that the application judge correctly decided that its rights, pursuant to the provisions in s. 22 of the Mortgages Act, prevented the Mortgagees from selling the Property. Because the Mortgagees were in breach of s. 22 and their enforcement rights were suspended at the time they completed the Transfer, the Transfer was not valid as against the Mortgagor.

The Court accepted the Purchaser’s submissions. The Court noted that although the Mortgagees’ enforcement rights were suspended at the time of the Transfer, pursuant to s. 22(3) of the Mortgages Act, the Safe Harbour Protections operated to protect the Purchaser, an innocent purchaser, who registered title to the Property under the Land Titles Act system after receiving both the Compliance Declaration and the Compliance Statements from the Mortgagees.

The Court had first stated three underlying principles of the Land Titles Act: namely, the mirror principle, where the register was a perfect mirror of the state of title; the curtain principle, which holds that a purchaser need not investigate the history of past dealings with the land, or search behind the title as depicted on the register; and the insurance principle, where the state guaranteed the accuracy of the register and compensated any person who suffers loss as the result of an inaccuracy. These principles formed the doctrine of indefeasibility of title and [are] the essence of the land titles system: Stanbarr Services Limited v. Metropolis Properties Inc., at para. 13.

The Court disagreed with the application judge’s ruling that found another exception to the mirror principle other than fraud: namely, when a mortgagee was subject to a suspension of its enforcement rights under s. 22(3) of the Mortgages Act.

The Court interpreted that the application judge had understood the effect of ss. 35 and 36 of the Mortgages Act and s. 99(1.1) of the Land Titles Act was to provide “conclusive evidence of compliance” with the legislation. The Court noted that while it was correct that those provisions do afford the Purchaser that protection, they go further: they stipulate that, on registration under the Land Titles Act system, the transfer gave the (innocent) Purchaser “good title” to the Property.

In this case, it was not the Mortgagees who sought to enforce their rights; it was the Purchaser. The Mortgagor cannot rely on s. 22(3) to invalidate the Purchaser’s title: its recourse was against the Mortgagees for the improper exercise of the power of sale.

The Court noted that “once the sale of the property under the power of sale is closed, s. 22 is no longer applicable and the mortgagor is left to its remedy in damages against the mortgagee.”: Cranberry Cove Tower Inc. v. Monarch Trust Co at para 180. Further, the Superior Court stated that the court’s decision in Cranberry Cove “held that the s. 36 underlying principle of protecting bona fide purchasers for value should be extended to purchases under s. 22.”: Belende v Patel at para 14.

The Court allowed the appeal, set aside paras. 2, 3, and 4 of the Judgment, and ordered that the Application be dismissed with costs payable by the Mortgagor, below and on appeal, fixed at the agreed all-inclusive sums of $19,000 and $10,000, respectively.



SHORT CIVIL DECISIONS

Sparr v. Downing , 2022 ONCA 537

[Pardu (motion judge]

Counsel:

Marc J. Coderre for the appellant

Ryan Garret for the respondent

Keywords: Family Law, Child Support, Sparr v. Downing , 2020 ONCA 793

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Please find our summaries of the civil decision of the Court of Appeal for Ontario for the week of July 4, 2022.

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Golden Oaks Enterprises Inc. v. Scott is a bankruptcy case in which the trustee successfully sued to set aside payments made to certain investors in a Ponzi scheme. The appeal was dismissed. The Court made it clear that claims initiated by trustees to set aside transfers under value under the Bankruptcy and Insolvency Act arise, for limitation period purposes, when the trustee is appointed, and not before. The knowledge and acts of the fraudster operating the bankrupt corporation are not to attributed to the bankrupt corporation for the purpose of having the limitation period running earlier than the date of bankruptcy. To do otherwise would be to defeat the purpose of the transfer under value sections in the BIA and would permit fraudsters to get away with their actions.

In Karkhanechi v Connor, Clark & Lunn Financial Group Ltd, another limitation period case, the Court found that the motion judge did not err in finding that the appellant’s request for declaratory relief was statute-barred, as it was tied to consequential relief. The Court also agreed with the motion judge that  there was no “rolling” limitation period in this case just because the disputed payments to the retired partner were being made over time.

Other topics included two insurance coverage decisions and stay pending appeal in the residential tenancies context.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Golden Oaks Enterprises Inc. v. Scott , 2022 ONCA 509

Keywords:Bankruptcy and Insolvency, Transactions Under Value, Ponzi Schemes, Corporation Attribution Doctrine, Piercing of Corporate Veil, Unjust Enrichment, Set-off, Civil Procedure, Limitation Periods, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s 95(1), s 96, s 97, s 178 (1) Criminal Code, R.S.C. 1985, c. C-46, s 347, Limitations Act, 2002, s 5, s 12, Securities Act, R.S.O. 1990, c. S.5, Doyle Salewski Inc. v. Scott, 2019 ONSC 5108, Housen v. Nikolaisen, 2002 SCC 33, Canada v. McLarty, 2008 SCC 26, Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662, ChristineDeJong Medicine Professional Corp. v. DBDC Spadina Ltd., 2019 SCC 30, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, R. v. McNamara, [1985] 1 S.C.R. 662 (S.C.C.), Singularis Holdings Ltd. v. Daiwa Capital Markets Europe Ltd., [2019] UKSC 50, Holt v. Telford, [1987] 2 S.C.R. 193, Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2020 BCCA 130, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Gen. Div.)

Pannone v. Peacock, 2022 ONCA 520

Keywords:Real Property, Residential Tenancies, Eviction, Sale of Property, Administrative Law, Landlord and Tenant Board, Civil Procedure, Appeals, Stay Pending Appeal, Residential Tenancies Act, 2006, SO 2006 c. 17,Courts of Justice Act, RSO 1990, c. C.43, Belton v. Spencer, 2020 ONCA 623; Bernard Property Maintenance v. Taylor, 2019 ONCA 830; and Bernard v. Fuhgeh, 2020 ONCA 529, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Overseas Missionary Fellowship v. 578369 Ontario Ltd. (1990), 73 O.R. (2d) 73 (C.A.),Coote v. Ontario (Human Rights Commission), 2010 ONCA 580, Alliance to Protect Prince Edward County v. wpd White Pines Inc., 2018 ONCA 576, Fontaine v. Canada (Attorney General), 2018 ONCA 749, Bernard v. Fuhgeh, 2020 ONCA 529, Gill v. Laframboise, Board file CEL-00894-21

EPCOR Electricity Distribution Ontario Inc. v. Municipal Electric Association Reciprocal Insurance Exchange, 2022 ONCA 514

Keywords: Contracts, Insurance, Commercial General Liability, Coverage, Interpretation, Contra Proferentem, Municipal Act, 2001, S.O. 2001, c. 25, s 274(1), Business Corporations Act, R.S.O. 1990, c. B.16, s 136(5), Insurance Act, R.S.O. 1990, c. I.8, Rules of Civil Procedure, Rules 14.05(3)(d),(h), Le Treport Wedding & Convention Centre Ltd. v. Co-operators General Insurance Company, 2020 ONCA 487, Markevich v. Canada, 2003 SCC 9, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Douglas v. Stan Fergusson Fuels Ltd., 2018 ONCA 192, Godonoaga (Litigation guardian of) v. Khatambakhsh (2000), 50 O.R. (3d) 417 (C.A.), M.(E.) v. Reed (2003), 49 C.C.L.I. (3d) 57 (Ont. C.A.), Insurance Law in Canada, 2nd ed. (Scarborough: Carswell, 1991), John Birds, Ben Lynch and Simon Milnes, MacGillivray on Insurance Law, 13th ed. (London: Thomson Reuters (Professional) UK Ltd., 2015)

Northbridge General Insurance Company v. Aviva Insurance, 2022 ONCA 519

Keywords: Contracts, Insurance, Interpretation, Professional Liability Insurance, Commercial General Liability Policy, Primary Coverage, Excess Coverage, Equitable Contribution, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, McKenzie v. Dominion of Canada General Insurance Company, 2007 ONCA 480, Lawyers’ Professional Indemnity Company (LPIC) v. Lloyd’s Underwriters, 2016 ONSC 6196

Karkhanechi v. Connor, Clark & Lunn Financial Group Ltd., 2022 ONCA 518

Keywords: Contracts, Partnership Agreements, Civil Procedure, Limitation Periods, Rolling Limitation Periods, Declarations, Limitations Act, 2002, S.O. 2002, c. 24, s. 16(1)(a), Marvelous Mario’s Inc v St Paul Fire and Marine Insurance Co, 2019 ONCA 635, Pedersen v Soyka, 2014 ABCA 179, Pickering Square Inc v Trillium College Inc, 2016 ONCA 179, Richards v Sun Life Assurance Company of Canada, 2016 ONSC 5492, York Condominium Corp No 382 v Jay-M Holdings Ltd et al, 2007 ONCA 49, Fram Elgin Mills 90 Inc v Romandale Farms Limited, 2021 ONCA 201, Hamilton (City) v Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, Bonilla v Preszler, 2016 ONCA 759, Beccarea v Canadian National Railway Company, 2018 ONSC 630, Kyle v Atwill, 2020 ONCA 476, Alguire v The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 202

Short Civil Decisions

Salehi v. Association of Professional Engineers of Ontario, 2022 ONCA 511

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, s. 59.06(2)(a), R. v. Moura, 172 C.C.C. (3d) 340 (Ont. C.A.), Aristocrat v. Aristocrat (2004), 73 O.R. (3d) 275 (C.A.), leave to appeal to S.C.C. refused (2005), 207 O.A.C. 399, Mehedi v. 2057161 Ontario Inc.(Job Success), 2014 ONCA 604

Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 512

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, s. 59.06, Employment Standards Act, 2000, S.O. 2000, c. 41, s. 8(2), McDowell v. Barker, [2014] O.J. No. 2363 (C.A.), Hoang v. Mann Engineering Ltd., 2015 ONCA 838

Capone v. Fotak, 2022 ONCA 521

Keywords: Family Law, Appeals, Costs, Family Law Rules, Rule 24(12), Selznick v. Selznick, 2013 ONCA 35, Beaver v. Hill, 2018 ONCA 840


CIVIL DECISIONS

Golden Oaks Enterprises Inc. v. Scott, 2022 ONCA 509

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

Counsel:

A. Tomkins, for the appellants/respondents by way of cross-appeal

H. Chaiton and D. Bourassa, for the respondent/appellant by way of cross-appeal

Keywords: Bankruptcy and Insolvency, Transactions Under Value, Ponzi Schemes, Corporation Attribution Doctrine, Piercing of Corporate Veil, Unjust Enrichment, Set-off, Civil Procedure, Limitation Periods, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s 95(1), s 96, s 97, s 178 (1) Criminal Code, R.S.C. 1985, c. C-46, s 347, Limitations Act, 2002, s 5, s 12, Securities Act, R.S.O. 1990, c. S.5, Doyle Salewski Inc. v. Scott, 2019 ONSC 5108, Housen v. Nikolaisen, 2002 SCC 33, Canada v. McLarty, 2008 SCC 26, Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662, Christine DeJong Medicine Professional Corp. v. DBDC Spadina Ltd., 2019 SCC 30, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, R. v. McNamara, [1985] 1 S.C.R. 662 (S.C.C.), Singularis Holdings Ltd. v. Daiwa Capital Markets Europe Ltd., [2019] UKSC 50, Holt v. Telford, [1987] 2 S.C.R. 193, Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2020 BCCA 130, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Gen. Div.)

facts:

This appeal arose out of a failed financial company and the attempt of a trustee in bankruptcy to recover the funds lost to a Ponzi scheme called Golden Oaks Enterprises Inc. (“Golden Oaks”), founded by JL. The scheme operated in Ottawa from 2009 and 2013, during which Golden Oaks issued 504 promissory notes to 153 investors. The company charged interest rates in excess of 60%, which is considered usurious and criminal: s. 347 of the Criminal Code. Both Golden Oaks and JL, Golden Oaks’ principal and directing mind, went into receivership and had made assignments in bankruptcy.

Doyle Salewski Inc. was appointed as trustee in bankruptcy (the “Trustee”). It began over 80 separate legal actions against creditors in 2015. Seventeen of these actions were brought against individuals and companies who received payments from Golden Oaks in 2012 and 2013, which included commission payments and interest on promissory notes. The 17 actions were heard together in a summary trial. The trial judge granted a claim under s. 95(1)(b) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”) against the appellant LS for repayment of $72,575 in preferences (“LS Action”).

With respect to the other investor appellants, the trial judge had granted claims for repayment of interest in varying amounts between $4,000 and $67,500 (“Usurious Interest Action”). The trial judge had found that the appellant investors in this action knew or ought to have known that the returns promised on their investment were too good to be true.

While the investments and interest payments that gave rise to the Ponzi scheme took place well outside of the two-year limitation period under the Limitations Act, 2002, the trial judge had found that the Trustee’s claims against the appellants were not statute‑barred, as the claims were only discoverable once the Trustee was installed, and it received legal authority to bring the actions.

issues:

(1) Did the trial judge make a palpable and overriding error in finding that LS and Golden Oaks were not dealing at arm’s length for the purpose of s. 95(1)(b) of the BIA?

(2) With respect to the Usurious Interest Action, did the trial judge err in law in concluding that the claim was not discoverable within the meaning of s. 5(1)(a)(iv) of the Limitations Act, 2002?

(3) With respect to the Usurious Interest Action, did the trial judge err in law in applying the incorrect test for set-off under s. 97(3) of the BIA?

(4) Did the trial judge err in dismissing the Trustee’s claims pursuant to s. 95(1)(b) against all but LS and another individual and in dismissing the Trustee’s claims pursuant to s. 96 on the ground they were not properly pleaded?

(5) Did the trial judge err in dismissing the Trustee’s claims for unjust enrichment by receipt of commission payments for the referral of investors?

(6) Did the trial judge err in dismissing the Trustee’s claim, which had been withdrawn prior to trial, for a declaration that any judgment against LS or H is not released by a discharge in bankruptcy of either party under s. 178 of the BIA?

(7) Did the trial judge err in rejecting the Trustee’s request for an order declaring that LS and H would not be entitled to a dividend from the estate until all claims of other creditors were satisfied?

(8) Did the trial judge err in refusing to pierce the corporate veil with respect to RL for the amounts ordered against his company, 204475 Ontario Inc?

holding:

Appeal dismissed. Cross-appeal allowed in part.

reasoning:

(1) No.

The Court first noted the determination that the parties were not dealing at arm’s length was a finding of mixed fact and law that was reviewable on a deferential standard. The Court identified the indicia of a non-arm’s-length transaction as the following: (1) a common mind directing the bargaining for both parties of a transaction; (2) parties to a transaction acting in concert without separate interests; and (3) de facto control: Canada v. McLarty at para 43; Montor Business Corporation v. Goldfinger at para 68. The appellants argued that the trial judge misinterpreted the test under s. 95(1)(b) of the BIA as one focused on relationships between parties at large rather than relationships with respect to specific transactions. The Court agreed that in applying these criteria, it was important to focus on the transactions at issue, but necessarily within the overall context of the relationship between the parties and the fraudulent Ponzi scheme in which those transactions occurred and were advanced. The Court accepted the trial judge’s conclusion that the relationship between LS and Golden Oaks with respect to the commission payments and loans could not be disentangled from their collaboration in furtherance of the Ponzi scheme, as both parties were acting in concert.

(2) Not decided.

The Court agreed with the trial judge in the result that the action was not statute-barred, but through a completely different path. The appellants argued that the trial judge erred in her application of the discoverability principle and that the two-year limitation period on the claims had expired prior to 2015. The Court noted s 5(1)(a) of the Limitations Act, 2002  provides that a claim is not discoverable until the person with the claim knew or ought to have known that (i) an injury, loss, or damage had occurred; (ii) it was caused by a particular act or omission; (iii) the act or omission was that of the person against whom the claim is made; and (iv) a proceeding would be an appropriate means to seek to remedy the injury, loss, or damage.

The Court listed 3 considerations regarding the corporate attribution doctrine and its application to this case, pursuant to Livent: 1) courts should be sensitive to the context and field of law in which corporate attribution arises; 2) the exercise of this discretion was grounded in public policy and the social implications of holding a corporation accountable; and 3) uses of corporate attribution which encouraged victims of fraud to enlarge their recovery at the expense of other victims, or which permit those who have benefitted from fraud to insulate themselves from accountability against other parties who are victim of the fraud are to be avoided.

In applying these considerations, the Court stated that there were strong public policy grounds to resist permitting those who benefited from the usurious interest scheme perpetrated by JL from avoiding liability in the Trustee’s unjust enrichment action through the application of the corporate attribution doctrine, at the expense of other creditors to Golden Oaks.

The Court stated that the trial judge’s reasons had not considered the implications of Golden Oaks as a one-person corporation in this case, nor did they advert to the discretion recognized in Livent not to apply corporate attribution on public interest grounds. The Court further noted that the trial judge erred by failing to consider the discretion not to apply the corporate attribution doctrine on public interest grounds. Considering those public interest grounds, the Court stated that it was clear that this discretion should have been exercised in this case so as not to attribute the knowledge of JL to Golden Oaks. For these reasons, the attribution of JL’s knowledge to Golden Oaks during the period that the Ponzi scheme was in operation was not appropriate. Without the application of the corporate attribution doctrine, Golden Oaks would have lacked the requisite knowledge to bring the Usurious Interest Action until the appointment of the Trustee.

The Court noted that in light of this conclusion with respect to the corporate attribution doctrine, it was not necessary to consider the trial judge’s analysis of whether the Trustee was properly found to be a “successor” for purposes of s. 12 of the Limitations Act, 2002, or whether the Usurious Interest action was discoverable prior to the appointment of the Trustee on the basis that this action was not “appropriate” within the meaning of s.5(1)(a)(iv) of the Limitations Act, 2002. The Court made it clear that it should not be taken as necessarily agreeing with the trial judge’s reasons.

(3) No.

The appellants argued that the amounts they had been ordered to repay in interest payments should be set off against the principal amounts of their outstanding loans to Golden Oaks. The appellants based their argument on the doctrine of equitable set-off.

The appellants relied on the trial judge’s finding that depriving them of the principal of their loans would be “unduly harsh” as a basis for their claim of equitable set-off. Further, the appellants argued that s. 97(3) of the BIA preserved any set-off rights that the appellants would have had against Golden Oaks notwithstanding the bankruptcy. Therefore, according to the appellants, the trial judge erred in denying their equitable set off claims on the basis that it would give them priority over other creditors in recovering the principal of their loans.

 

The Court disagreed and stated that the party relying on a set‑off must show some equitable ground for being protected against the other party’s demands: Holt v. Telford, at p. 212. The Court agreed with the trial judge’s finding that the appellants lacked the “clean hands” required to take advantage of an equitable remedy. The appellants had not conducted themselves in a manner consistent with above‑board dealings and knew or ought to have known the usurious interest promised on their loans was illegal.

(4) No.

The Trustee argued that the trial judge erred in failing to read the pleadings generously as required, including its reply. The Trustee submitted that the claims were properly pleaded and that the defendants knew the case that they had to meet as they were able to defend the claims and never sought particulars or to strike the claims before trial.

The Court stated that given the defendants had not incurred the expense of a motion to strike and delivered a general denial of baldly pleaded claims, it did not cure these pleading deficiencies. As the trial judge noted, the pleadings, including the reply, remained deficient notwithstanding that the Trustee had amended them. The Trustee did not seek a further amendment at trial.

Moreover, although the trial judge had not found it necessary to address the limitation period issue with respect to the s. 96 claims because of their particular deficiencies, with respect to the preference claims, she determined that, had she accepted that they did meet the requirements of r. 25.06(2), these amendments would be statute-barred as they would have introduced a new cause of action more than two years after the Trustee was appointed. The Trustee had not taken issue on appeal with this finding.

(5) Yes.

The Trustee argued that the trial judge misinterpreted the doctrine of unjust enrichment regarding the receipt of commission payments for the referral of investors. The trial judge had not addressed the Trustee’s argument that the referral agreements were illegal contracts at common law (as opposed to breaching the Securities Act). The Court stated that contracts are considered illegal where they are either criminal on their face or, while facially legitimate, are entered into for the purpose of perpetrating a criminal act: Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., at paras. 47-48. The Trustee alleged the referral agreements were illegal in this latter sense.

The appellants as respondents in the cross-appeal argued that the Trustee’s claims alleged only that the referral agreements breached the Securities Act and not that the referral agreements were unlawful at common law, and it is for this reason that the trial judge canvassed only whether the agreements breached the Securities Act.

The Court stated that while the Trustee’s claims had not expressly pleaded that the agreements were unlawful at common law, they had alleged that the agreements were unlawful and contrary to the Securities Act. The Court concluded that the trial judge erred in considering only one basis on which the referral agreements could be treated as unlawful for the purposes of unjust enrichment and that, based on her other findings regarding the conduct of the defendants, the referral contracts were illegal contracts at common law and could not be the basis of a juristic reason for payments enriching the defendants.

(6) Yes.

The trial judge had dismissed the Trustee’s claim for a declaration that any judgment against LS or H would survive bankruptcy. However, the Trustee had withdrawn this claim prior to trial and reserved the right to make such a claim in the event of the bankruptcy of LS or H. Consequently, the trial judge should not had dealt with the claim and erred in doing so. The appellants, as respondents on the cross-appeal, had not contested this ground of appeal. The Court concluded that the Trustee is not precluded from raising this claim in the future.

(7) Yes.

In rejecting the Trustee’s claim that certain named defendants were not entitled to any dividend until all other claims against Golden Oaks were satisfied, the trial judge stated that the only provision of the BIA addressing this issue was s. 140.1.

As the Trustee argued on appeal, however, s. 137(1) of the BIA also addressed withholding the payment of dividends where parties were not acting at arm’s length. The trial judge found that the relevant parties in this case indeed were not acting at arm’s length, and, therefore, s. 137(1) applied.

LS (an appellant and respondent on the cross-appeal) conceded that if his argument that he was acting at arm’s length from Golden Oaks failed in the main appeal, then s. 137(1) of the BIA would have applied to him. The Court noted that this provision would apply to H because he was found by the trial judge to have been acting at arm’s length in his transactions with Golden Oaks. The Court concluded that s. 137(1) of the BIA applied to both LS and H.

(8) Yes.

The trial judge had concluded with respect to JL that it was a numbered company, and not JL personally, that received the interest payments from Golden Oaks.

On appeal, the Trustee argued that JL had personally received the benefit of the interest payments and that the trial judge misapprehended the evidence in this regard. The Trustee pointed to the fact that JL was named personally, together with the numbered company 204475 Ontario Inc., on the promissory note.

JL as respondent argued the corporate veil should not be pierced. However, the Court stated the Trustee’s action was against both the numbered company and JL personally, and the defendants’ statement of defence dated October 23, 2017, made no attempt to distinguish between the numbered company and JL personally in stating that certain amounts were loaned to Golden Oaks by the numbered company and JL as defendants and certain funds were received by them as interest payments on those loans. Therefore, the Court concluded that there was no need to pierce the corporate veil in order to determine that JL participated in these transactions in his personal capacity.


Pannone v. Peacock, 2022 ONCA 520

[Simmons J.A. (Motions Judge)]

Counsel:

P. A. R., acting in person

M.J. Hodgson (for submissions) and J. Valler (for decision), for the responding party

V. Crystal, for the Landlord and Tenant Board

Keywords: Real Property, Residential Tenancies, Eviction, Sale of Property, Administrative Law, Landlord and Tenant Board, Civil Procedure, Appeals, Stay Pending Appeal, Residential Tenancies Act, 2006, SO 2006 c. 17,Courts of Justice Act, RSO 1990, c. C.43, Belton v. Spencer, 2020 ONCA 623; Bernard Property Maintenance v. Taylor, 2019 ONCA 830; and Bernard v. Fuhgeh, 2020 ONCA 529, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Overseas Missionary Fellowship v. 578369 Ontario Ltd. (1990), 73 O.R. (2d) 73 (C.A.),Coote v. Ontario (Human Rights Commission), 2010 ONCA 580, Alliance to Protect Prince Edward County v. wpd White Pines Inc., 2018 ONCA 576, Fontaine v. Canada (Attorney General), 2018 ONCA 749, Bernard v. Fuhgeh, 2020 ONCA 529, Gill v. Laframboise, Board file CEL-00894-21

facts:

Ms. R and Mr. P (the “tenants”) were tenants of the responding party (the “landlord”). On March 21, 2022, the landlord obtained an order from the Landlord and Tenant Board (the “Board”) terminating the tenancy and evicting the tenants because of a pending sale of the property to purchasers intending to occupy it. The sale was originally scheduled to close on January 5, 2022, but as of the February 3, 2022, hearing date before the Board, the closing had been extended to February 8, 2022. The Board’s order required the tenants to move out as of April 11, 2022, failing which the eviction order could be enforced.

Following unsuccessful Board reviews, the tenants appealed to the Divisional Court. On a motion brought by the landlord, a single judge of the Divisional Court quashed the tenants’ appeal and ordered them to vacate by June 28, 2022, failing which the eviction could proceed. Pursuant to the terms of the single judge’s order, the eviction is currently scheduled for July 6, 2022.

Ms. R brought an urgent motion on short notice requesting a stay of an order of a single judge of the Divisional Court pending determination of her motion for leave to appeal and, if leave be granted, her appeal.

issues:

Should the stay motion be granted and the request to transfer Ms. R’s motions to the Divisional Court be granted?

holding:

Motion dismissed.

reasoning:

The motion judge was of the view that Ms. R’s appeal route was by way of review motion to a panel of the Divisional Court under s. 21(5) of the CJA. Under s. 21(5) of the CJA, a panel of the Divisional Court may, on motion, set aside or vary the decision of a judge who hears and determines a motion to that court.

The test on a motion for a stay pending appeal or leave to appeal is well‑established:

i. Is there a serious question to be determined on appeal;

ii. Will the moving party suffer irreparable harm if the stay is not granted; and

iii. Does the balance of convenience favour granting a stay?

(i) The low threshold of determining a serious issue was not met in this case.

(ii) The landlord opposes the transfer request contending that there is no merit and that he will suffer prejudice due to several factors, including the following:

  • the tenants continuing failure to pay rent (the single judge determined rental arrears amounted to $9,200 as of June 16, 2022);
  • the fact that his original real estate transaction was terminated because of the tenants’ persistent refusal to vacate despite the eviction order; and
  • further delay may jeopardize the new sale scheduled to close on July 20, 2022.

(iii) The balance of convenience does not favour granting a stay. There was merit in the landlord’s argument and the landlord had already suffered considerable prejudice through the actions of the tenants, as he lost the benefit of his original sale agreement through the tenants’ failure to comply with the original eviction order and the tenants have continued to occupy the premises without paying rent.


EPCOR Electricity Distribution Ontario Inc. v. Municipal Electric Association Reciprocal Insurance Exchange, 2022 ONCA 514

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

Counsel:

A. Mark and K. Cohen, for the appellant

W. Scott and G. Schachter, for the respondents

Keywords: Contracts, Insurance, Commercial General Liability, Coverage, Interpretation, Contra Proferentem, Municipal Act, 2001, S.O. 2001, c. 25, s 274(1), Business Corporations Act, R.S.O. 1990, c. B.16, s 136(5), Insurance Act, R.S.O. 1990, c. I.8, Rules of Civil Procedure, Rules 14.05(3)(d),(h), Le Treport Wedding & Convention Centre Ltd. v. Co-operators General Insurance Company, 2020 ONCA 487, Markevich v. Canada, 2003 SCC 9, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Douglas v. Stan Fergusson Fuels Ltd., 2018 ONCA 192, Godonoaga (Litigation guardian of) v. Khatambakhsh (2000), 50 O.R. (3d) 417 (C.A.), M.(E.) v. Reed (2003), 49 C.C.L.I. (3d) 57 (Ont. C.A.), Insurance Law in Canada, 2nd ed. (Scarborough: Carswell, 1991), John Birds, Ben Lynch and Simon Milnes, MacGillivray on Insurance Law, 13th ed. (London: Thomson Reuters (Professional) UK Ltd., 2015)

facts:

The appellant, Municipal Electric Association Reciprocal Insurance Exchange (“MEARIE”), is an insurance reciprocal. In 2018, MEARIE issued the Comprehensive Liability Insurance Policy (the “Policy”) at issue in this appeal. The respondent, EPCOR Electricity Distribution Ontario Inc. (“EPCOR”), is an electricity distributor that provides electrical supply to municipalities. The respondent, EH was the former President and CEO of the utility company acquired by EPCOR.

The Town of Collingwood was the sole shareholder of Collingwood Utility Services Corporation. EH was the President and CEO of the utility. In March 2012, Collingwood sold 50% of its shares to PowerStream Holdings Inc. EPCOR Utilities Inc. indirectly acquired 100% of the shares of CPS, and CPS changed its name to EPCOR. Collingwood passed a resolution requesting a public judicial inquiry. EH participated in two phases of the Inquiry. By the end of his involvement in the process, he had incurred $591,115.31 in legal fees.

MEARIE denied insurance coverage to EH for those fees. EH sought to recoup these fees from EPCOR, citing a corporate Bylaw. responded that the Inquiry did not fall within the scope of the Bylaw. EH successfully sued EPCOR, which was required to indemnify him for his legal costs in respect of the Inquiry pursuant to the Bylaw.

EPCOR sought to recover its legal fees incurred in defending EH’s court application. MEARIE denied coverage to EPCOR on two bases: the application had incorrectly named EPCOR, and that the exclusion found in the Policy excluded coverage where an Insured is subject to a “[c]laim for expenditures, compensation, damages or any other amounts that are payable pursuant to statute or regulation”.

Pursuant to a settlement agreement dated December 6, 2019, EPCOR paid EH $400,000 for his costs for the Inquiry and $75,000 for his costs for the Bylaw application. As part of the settlement agreement between EPCOR and EH, EH agreed to assign to EPCOR all claims which he might have against MEARIE or Liberty Mutual Insurance Company.

“Coverage E”, and “Coverage G”, are at issue. The application judge found that Coverage G covered the legal expenses incurred by EH and accepted EPCOR’s argument that its denial of indemnity to EH under the Bylaw was an “error” and a “Wrongful Act” within the meaning of Coverage E.  MEARIE was therefore found liable to indemnify EPCOR for the legal fees it was required to reimburse to EH under both Coverage G and Coverage E. MEARIE appealed.

issues:

(1) Is correctness the proper standard of review?

(2) What principles of interpretation should be used?

(3) Did the application judge err in his interpretation of coverage G?

(4) Did the application judge err in his interpretation of coverage E?

(5) Should EH’s recovery be limited to his actual loss ($191,115.31)?

(6) Did the application judge err in his decision regarding costs?

holding:

Appeal allowed in part.

reasoning:

(1) Yes.

The parties agreed that the Policy is a contract of adhesion, and a correctness standard of review applies to its interpretation.

(2) Not in dispute.

When the language of the policy is unambiguous, the court should give effect to the clear language, reading the insurance contract as a whole. Where the language of the policy is ambiguous the general rules of contract interpretation come into play.

(3) No.

Coverage G contained an undertaking by MEARIE to pay the Insured’s costs or expenses in defence of a “proceeding” brought “against the Insured … under any statute”. The appellant submitted that the trial judge erred in finding that Coverage G insured EH’s costs of participating in the Inquiry. The Court agreed with the application judge’s analysis in rejected the appellant’s interpretation of Coverage G. The Court also agreed with the application judge’s observations with respect to the role of the reasonable expectations of the parties in the interpretation of the Policy, to the extent there was ambiguity. MEARIE had an obligation to indemnify EH for his Inquiry costs under Coverage G.

(4) Yes.

The Bylaw provided that EPCOR would indemnify a director or officer “against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Corporation”. It contained a proviso that the director or officer must have been acting honestly and in good faith with a view to the best interests of the corporation. Had EPCOR indemnified EH for his Inquiry costs, as it was legally bound to do, it would have had no claim to recover those costs from MEARIE under the Policy, because the Policy did not insure EPCOR for the performance of its legal obligations. There was no coverage under “Coverage E” for EH’s claim under the Bylaw, there was also no coverage for EPCOR’s costs of defending that claim.

(5) No.

$191,115.31 is the difference between what EH received from EPCOR as indemnity for his Inquiry costs ($400,000) and his total legal fees of $591,115.31.

When EH settled the Bylaw application with EPCOR, he assigned his claim against MEARIE to EPCOR. EPCOR was free to advance the full amount of EH’s claim against MEARIE. EPCOR was therefore entitled to recover $591,115.31 from MEARIE. There was no overcompensation because EPCOR had no claim for indemnity under the Policy for the amounts it paid EH pursuant to the Bylaw or for its costs of the Bylaw proceedings. The judgment found that EH was entitled to indemnity for his legal costs. EPCOR, as his assignee, was entitled to enforce and collect the judgment.

(6) No.

In the court below, the respondents had claimed costs of $291,052.22 on a full indemnity basis. The application judge found that this amount was unreasonable to the unsuccessful party. The Court did not understand why the application judge used the words “on a full indemnity basis”. The costs ultimately awarded were less than half the amount claimed on a full indemnity basis. However, the award of costs did not reflect an error in principle. In awarding enhanced costs, the application judge cited authority that provides “where an insurer denies coverage and the insured is successful in its claim for indemnity under the insurance policy, then the insured is entitled to full indemnity costs”. Even if the application judge awarded “full indemnity” costs, there was a firm basis for the award and the amount was reasonable in all the circumstances. Therefore, the costs appeal was also dismissed.


Northbridge General Insurance Company v. Aviva Insurance Company, 2022 ONCA 519

[Benotto, Zarnett and Sossin JJ.A.]

Counsel:

D. Berlach and M. Connolly, for the appellant

D. Dacquisto and J. Tausendfreund, for the respondent

Keywords: Contracts, Insurance, Interpretation, Professional Liability Insurance, Commercial General Liability Policy, Primary Coverage, Excess Coverage, Equitable Contribution, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, McKenzie v. Dominion of Canada General Insurance Company, 2007 ONCA 480, Lawyers’ Professional Indemnity Company (LPIC) v. Lloyd’s Underwriters, 2016 ONSC 6196

facts:

This was an appeal from the judgment of the application judge granting a declaration sought by the respondent, Northbridge General Insurance Company (“Northbridge”) that the appellant, Aviva Insurance Company (“Aviva”), be required to contribute equally to the defence and indemnification of an insured party who is being sued in an underlying action. The Northbridge and Aviva Policies each included “other insurance” clauses that provide that their policies are excess to any other valid and collectible insurance. The application judge found the two policies were irreconcilable and applied the doctrine of equitable contribution, as they covered the same loss and each had an equivalent “other insurance” clause.

issues:

Did the application judge err in his interpretation of the Northbridge and Aviva Policies as irreconcilable?

holding:

Appeal dismissed.

reasoning:

No.

The Court disagreed that the “other insurance” and other relevant provisions of the policies at issue were “standard form contracts” or contracts with significant precedential value. Rather, the wording of these provisions and interplay of the two policies made the application judge’s interpretive decisions distinct. Accordingly, the standard of palpable and overriding error applied.

The applicable legal standard for equitable contribution was set out in Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, and is based on the principle that parties under “coordinate liability,” to make good a loss, must share that burden on a pro rata basis. The policies must cover the same risk for the same insured and must not exclude one another. In short, the policies must both apply to an insured’s loss and be irreconcilable. The Court was satisfied that both policies provided coverage at the same layer of coverage. The Court agreed with the application judge’s conclusion that the “other insurance” clause in both the Northbridge and Aviva Policies was intended to achieve the same goal.

The Court did not accept the appellant’s argument that the reference in the Aviva Policy’s “other insurance” clause to the coverage being in excess of any valid and collectable policy available to “individual pharmacists” transformed the Aviva Policy into a secondary insurance policy. The application judge’s interpretations of the Aviva and Northbridge Policies were open to him, and the appellant showed no error with his analysis or conclusion.


Karkhanechi v. Connor, Clark & Lunn Financial Group Ltd., 2022 ONCA 518

[Brown, Roberts and Paciocco JJ.A.]

Counsel:

P. Bates and S. Kalloghlian, for the appellants

B. Kolenda and V. Mishra, for the respondents

Keywords: Contracts, Partnership Agreements, Civil Procedure, Limitation Periods, Rolling Limitation Periods, Declarations, Limitations Act, 2002, S.O. 2002, c. 24, s. 16(1)(a), Marvelous Mario’s Inc v St Paul Fire and Marine Insurance Co, 2019 ONCA 635, Pedersen v Soyka, 2014 ABCA 179, Pickering Square Inc v Trillium College Inc, 2016 ONCA 179, Richards v Sun Life Assurance Company of Canada, 2016 ONSC 5492, York Condominium Corp No 382 v Jay-M Holdings Ltd et al, 2007 ONCA 49, Fram Elgin Mills 90 Inc v Romandale Farms Limited, 2021 ONCA 201, Hamilton (City) v Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, Bonilla v Preszler, 2016 ONCA 759, Beccarea v Canadian National Railway Company, 2018 ONSC 630, Kyle v Atwill, 2020 ONCA 476, Alguire v The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 202

facts:

In late 2014, the appellant, S.K, was recruited to work in an asset management business operating under the umbrella of the Connor, Clark & Lunn Financial Group. His compensation package was structured in a partnership agreement (the “Partnership Agreement”) that he entered into with the respondent Connor, Clark & Lunn Financial Group Ltd. (“CCL FG Ltd.”). The Partnership Agreement between S.K and CCL FG Ltd. established the Connor, Clark & Lunn Financial Group Investment Partnership (“CCL IP”), which was also named as a respondent in the appeal.

In late 2016, S.K’s employment was terminated and a compulsory retirement provision in the Partnership Agreement was triggered, forcing him into retirement. It soon became evident that the post-retirement payments that S.K was receiving were less than he believed he was entitled to. It also became clear that the respondents disagreed with S.K’s claimed entitlement to receive permanent post-retirement payments based on a 3% interest in CCL IP. In the respondent’s view, the Partnership Agreement provided only for declining payments over a nine-year period based on a 1.2% interest in the partnership as of October 31, 2016, when S.K was removed as a partner.

In December 2019, S.K sued the respondents, alleging that they were in breach of the post-retirement compensation agreement. In September 2021, a motion judge granted summary judgment against S.K after finding that his claims were statute barred under the Limitations Act, 2002. S.K appealed the order arguing that the motion judge erred by failing to apply a rolling limitation period, and by finding his request for a declaration to be statute-barred, contrary to s. 16(1)(a) of the Limitations Act, 2002, which provides that there is no limitation period for the seeking of a declaration.

issues:

(1) Did the motion judge err by failing to apply a rolling limitation period?

(2) Did the motion judge err by finding that the request for declaratory relief was statute-barred, contrary to s. 16(1)(a) of the Limitations Act, 2002?

holding:

Appeal dismissed.

reasoning:

(1) No.

The term “rolling limitation period” is used where a new limitation period arises with each breach of an ongoing or recurring contractual obligation. Not all breaches that lead to the failure to make ongoing or recurring payments provided for in a contract will give rise to rolling limitation periods.

The appellants argued that the motion judge erred by failing to apply a rolling limitation period that would enable them to sue for: (1) the deficient payments made in the two years prior to the launch of their action on December 10, 2019, and (2) the assessed value of Equestrian’s interest in CCL IP. The Court disagreed and found that the motion judge was correct in concluding that a single breach with continuing consequences occurred on March 27, 2017, when the respondents unequivocally rejected the appellants’ claim to a permanent 3% interest in CCL IP, thereby making a rolling limitation period inapplicable. By March 27, 2017, the appellants had all of the material facts required to initiate an action relating to the ongoing damage that would arise from the respondents’ denial that they owed Equestrian the obligation that the appellants were claiming.

(2) No.

In arguing that the motion judge did err in finding that the appellants’ request for a declaration is statute-barred, the appellants relied on s. 16(1)(a) of the Limitations Act, 2002. They argued that in applying s. 16(1)(a), the motion judge mistakenly followed the concurring decision instead of the majority decision in Kyle v Atwill which they interpreted as holding unequivocally that no limitation periods applied to declarations, such that where a party seeks both consequential and declaratory relief, the consequential relief was subject to the Limitations Act, 2002, but the declaratory relief was not.

The Court found that the appellants overread the majority decision in Kyle. Both the majority and concurring decisions in that case agreed that if a pleaded claim for a declaration was, in substance, a request for a remedy against the other party and not really a request for declaratory relief, s. 16(1)(a) would not operate and a limitation period would apply. It was therefore necessary to look at the substance rather than the form of the claim so that plaintiffs cannot circumvent a limitation period by joining a statute-barred remedial claim with a declaration claim that has no legitimate declaratory purpose beyond attempting to circumvent the expiry of a limitation period. In Kyle, the majority and concurring judgments simply disagreed on whether the declaratory relief requested in that case was, in substance, a compensatory claim or not. The motion judge therefore correctly stated the principles that he was to apply.

The motion judge also correctly noted that declaratory relief should be narrowly construed to ensure that s. 16(1)(a) was not used as a means to circumvent limitation periods. Having found that the compensatory claim the appellants were advancing was statute-barred, the motion judge was correct in closely examining whether the related request for declaratory relief was added in an attempt to avoid that limitation period.


SHORT CIVIL DECISIONS

Salehi v. Association of Professional Engineers of Ontario, 2022 ONCA 511

[Feldman, Brown and Huscroft JJ.A.]

Counsel:

B. S., acting in person

B. C. LeBlanc and N. S. Danson, for the responding party

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, s. 59.06(2)(a), R. v. Moura, 172 C.C.C. (3d) 340 (Ont. C.A.), Aristocrat v. Aristocrat (2004), 73 O.R. (3d) 275 (C.A.), leave to appeal to S.C.C. refused (2005), 207 O.A.C. 399, Mehedi v. 2057161 Ontario Inc.(Job Success), 2014 ONCA 604

Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 512

[Feldman, Pepall and Tulloch JJ.A.]

Counsel:

C. Foulon and B. Hassibi, for the moving party

D. G. Cowling and A. J. Sinclair, for the responding party

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, s. 59.06, Employment Standards Act, 2000, S.O. 2000, c. 41, s. 8(2), McDowell v. Barker, [2014] O.J. No. 2363 (C.A.), Hoang v. Mann Engineering Ltd., 2015 ONCA 838

Capone v. Fotak , 2022 ONCA 521

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

Counsel:

Z.F., acting in person

H. Niman and J-Y. Liew, for the respondent (C70124) / responding party (M53395)

Keywords: Family Law, Appeals, Costs, Family Law Rules, Rule 24(12), Selznick v. Selznick, 2013 ONCA 35, Beaver v. Hill, 2018 ONCA 840


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.

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

Good afternoon.

We hope everyone is enjoying this Canada Day long weekend.

Please find below our summaries of the civil decisions of the Court of Appeal for Ontario for the week of June 27, 2022.

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In Sakab Saudi Holding Company v Jabri, the respondents characterized their claim as an action in conspiracy to defraud. The appellants, who had no presence in Ontario, contested the jurisdiction over them and moved to have the action permanently stayed or dismissed against them. The Court upheld the dismissal of that motion by the motion judge, finding that the motion judge did not err in applying the Van Breda test for jurisdiction.

In Deemme v Healthcare Insurance Reciprocal of Canada, the appellant was fired as a nurse upon the Hospital discovering that she had misused an automatic medication dispensing unit to obtain Percocet tablets. The respondent insured the Hospital and their employees, however did not appoint counsel to represent the appellant due to a lack of coverage under the Policy. The appellant argued that the insurer had a duty to defend her, and that she was entitled to liability coverage, however, the motion judge found to the contrary. The appellant’s appeal was dismissed by the Court. The Court agreed with the motion judge and found that the true nature of the claims against the appellant were the intentinal tort of intrusion against seclusion, which was not covered by the policy.

In Leaf Homes Limited v. Khan, the appellants were parties to an agreement of purchase and sale of a new home. When the appellants could not close on the purchase, the respondent obtained a default judgment against the appellants for the difference between the sale price to the appellants and the ultimate sale price. Gillese J.A. held that the motion judge, who had dismissed the appellants’ motion to set aside the default judgment, made palpable and overriding errors in her assessment of the merits of the appellants’ defence, relying on the Mountain View test. The Court set aside the default judgment and the costs order made against the appellants and their lawyer personally.

In 2257573 Ontario Inc. v. Furney, the motion judge granted judgment on certain mortgages, including some interest, even though criminal rates of interest were being charged. The Court dismissed the appeal. The appellants had argued on the motion that interest should be lowered, not eliminated. The motion judge could therefore hardly be faulted for granting some interest.

In Caledon (Town) v. Darzi Holdings Ltd., Justice Brown in chambers granted the appellant’s former lawyer the right to intervene in the upcoming appeal. The appellant appeals a $1 million fine imposed on it as the sentence for contempt in failing to abide by an injunction order made against it in favour of the Town of Caledon. One ground of appeal the appellant will be raising will be ineffective assistance of counsel. There will also be an issue of fresh evidence on appeal regarding that issue. Apparently, former counsel had recorded conversations with their client, which recordings may or may not be admitted into the record. That issue will be determined by the panel on the appeal. Stay tuned.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Sakab Saudi Holding Company v. Jabri, 2022 ONCA 496

Keywords: Torts, Fraud, Conspiracy, Fraudulent Misappropriation, Solloway v Klondex Mines Ltd, 2014 ONSC 391, Club Resorts Ltd v Van Breda, 2012 SCC 17, Knowles v Lindstrom, 2014 ONCA 116, Canada v South Yukon Forest Corporation, 2012 FCA 165, Vahle v Global Work & Travel Co Inc, 2020 ONCA 224, Ontario v Rothmans Inc, 2013 ONCA 353, Boyd v Cook, 2016 BCCA 424, Lapointe Rosenstein Marchand Melançon LLP v Cassels Brock & Blackwell LLP, 2016 SCC 30

Demme v. Healthcare Insurance Reciprocal of Canada, 2022 ONCA 503

Keywords: Contracts, Insurance, Commercial and General Liability Insurance, Coverage, Duty to Defend, Exclusions, Torts, Intrusion Upon Seclusion, Bodily Injury, Personal Health Information Protection Act, 2004, S.O. 2004, c. 3, Sched. A, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5(1)(a), Stewart v. Demme, 2022 ONSC 1790 (Div. Ct.), Stewart v. Demme, 2020 ONSC 83, Jones v. Tsige, 2012 ONCA 32 , Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance Company, 2021 ONCA 612, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Oliveira v. Aviva Canada Inc., 2018 ONCA 321, Keys v. Intact Insurance Company, 2015 ONCA 400, Martin v. American International Assurance Life Co., 2003 SCC 16, Mutual of Omaha v. Stats, [1978] 2 S.C.R. 1153, Sansregret v. The Queen, [1985] 1 S.C.R. 570, Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, Barbara Billingsley, General Principles of Canadian Insurance Law, 3rd ed. (LexisNexis Canada, 2020)

Leaf Homes Limited v. Khan, 2022 ONCA 504

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Default Judgments, Setting Aside, Procedural and Natural Justice, Reasonable Apprehension of Bias, Costs, Personal Liability, Lawyers, Fresh Evidence, Rules of Civil Procedure, Rule 19.09, 57.07(1), (2), Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, Palmer v. The Queen, [1980] 1 S.C.R. 759, HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894, BHL Capital v. 2281165 Ontario Ltd., 2018 ONSC 7289, Zeifman Partners Inc. v. Aiello, 2020 ONCA 33, Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd., 2007 ONCA 333, Techlantic v. Modellista, 2021 ONSC 746, Dentons Canada LLP v. Khan, 2021 ONSC 5261, Ross v. Filip, 2021 ONSC 1496, Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25, Galganov v. Russell (Township), 2012 ONCA 410,  Rutman v. Rabinowitz, 2018 ONCA 279, Niagara Structural Steel (St. Catharines) Ltd. v. W.D. Laflamme Ltd. (1987), 58 O.R. (2d) 773 (C.A.)

2257573 Ontario Inc. v. Furney, June 30, 2022

Keywords: Contracts, Real Property, Mortgages, Damages, Interest, Usury, Canadian Charter of Rights and Freedoms, ss. 7, 12 and 15, Criminal Code, R.S.C., 1985, c. C-46, s. 347, Mortgages Act, R.S.O. 1990, c. M.40, Housen v. Nikolaisen, [2002] 2 S.C.R. 235, Transport North American Express Inc. v. New Solutions Financial Corp., [2004] 1 S.C.R. 249, Cheung v. Moskowitz Capital Mortgage, 2018 ONSC 1322

Caledon (Town) v. Darzi Holdings Ltd., 2022 ONCA 513

Keywords: Civil Procedure, Orders, Contempt, Sentencing, Fines, Appeals, Interveners, Ineffective Assistance of Counsel, Professional Conduct, Recording Clients, Fresh Evidence, Rules of Civil Procedure, Rule 13.01(2), Rules of Professional Conduct, Rule 4.03(2), Caledon (Town) v. Darzi Holdings Ltd., 2022 ONCA 455, Cowles v. Balac (2006), 83 O.R. (3d) 660 (C.A.), Gagnon v. Pritchard (2002), 58 O.R. (3d) 557 (S.C.), Dumais v. Zarnett (1996), 30 O.R. (3d) 431 (S.C.), John Sopinka, Sidney N. Lederman & Alan W. Bryant, The Law of Evidence in Canada, 6th ed. (Lederman, Fuerst, Stewart) (LexisNexis, 2022)

Short Civil Decisions

Marmer Penner Inc. v. Vacaru, 2022 ONCA 506

Keywords: Civil Procedure, Appeals, Costs

Just Energy Group Inc. (Re), 2022 ONCA 498

Keywords: Bankruptcy and Insolvency, Civil Procedure, Appeals, Leave to Appeal, Costs, Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, Stelco Inc. (Re) (2005), 2005 CanLII 8671 (ON CA), Timminco Ltd. (Re), 2012 ONCA 552 Nortel Networks Corp. (Re), 2016 ONCA 332, 9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, Laurentian University of Sudbury (Re), 2021 ONCA 199


CIVIL DECISIONS

Sakab Saudi Holding Company v. Jabri, 2022 ONCA 496

[Pardu, Roberts and Miller JJ.A.]

Counsel:

H. Underwood, A. Max, E. Young and E. Fraser, for the appellants

M. Mohamed, QC, D. Fenton, A. McLachlan and J. Bell, for the respondents

Keywords: Torts, Fraud, Conspiracy, Fraudulent Misappropriation, Solloway v Klondex Mines Ltd, 2014 ONSC 391, Club Resorts Ltd v Van Breda, 2012 SCC 17, Knowles v Lindstrom, 2014 ONCA 116, Canada v South Yukon Forest Corporation, 2012 FCA 165, Vahle v Global Work & Travel Co Inc, 2020 ONCA 224, Ontario v Rothmans Inc, 2013 ONCA 353, Boyd v Cook, 2016 BCCA 424, Lapointe Rosenstein Marchand Melançon LLP v Cassels Brock & Blackwell LLP, 2016 SCC 30

facts:

The respondents alleged a massive international fraud in which billions of dollars were misappropriated from corporations in Saudi Arabia and dissipated around the world. They sued the S.K.A., Toronto resident, the alleged chief architect of that fraud, along with his son, M.A., and several companies alleged to have conspired with S.K.A. The appellants, who had no presence in Ontario, contested the Superior Court of Justice’s jurisdiction over them. They moved to have the action permanently stayed or dismissed against them. The motion judge dismissed the appellants’ motion. The appellants contended that in coming to her decision, the motion judge made factual errors, as well as multiple errors of mixed fact and law in applying the test for jurisdiction set out in Club Resorts Ltd v Van Breda.

The motion judge dismissed the appellants’ motion. The appellants contended that in coming to her decision, the motion judge made palpable and overriding factual errors, as well as multiple errors of mixed fact and law in applying the test for jurisdiction set out in Club Resorts Ltd v Van Breda.

There were two competing characterizations of the claim. The respondents characterized their claim as an action in conspiracy to defraud, which began with a misappropriation of assets in Saudi Arabia and continued with manipulation of assets from Toronto by S.K.A, with the assistance and cooperation of others, particularly M.A. The appellants argued that the tort alleged is simply fraudulent misappropriation, and the tort would have been completed in Saudi Arabia. The interjurisdictional component was simply the remedy of tracing assets misappropriated elsewhere, and the tort alleged had no connection to Ontario.

issues:

Did the motion judge make errors in fact and law in applying the Van Breda test for jurisdiction?

holding:

Appeal dismissed.

reasoning:

No.

(a) The factual errors

S.K.A stated in a sworn declaration that he gifted substantially all of his assets to his son M.A through a gift deed that he prepared himself in Turkey without legal advice. Later, when pressed to produce a copy of this gift deed, he corrected his evidence to say that the gift deed itself was not created until he chose to memorialize the gift by typing it out in Toronto in December 2018.

As the appellants argued, the finding that S.K.A continued to direct – from Ontario and in furtherance of the alleged conspiracy – the use of the funds gifted to M.A, was central to the motion judge’s conclusions on each ground for jurisdiction. The motion judge found that a prima facie case had been made that the gift was a ruse, and a key step in the conspiracy to keep the assets out of the reach of the respondents. She found that S.K.A continued to direct the management of the gifted assets from Ontario. The appellants argued that the motion judge was led to the erroneous conclusion that the gift was a ruse by misapprehending or simply failing to consider the appellants’ evidence on the motion.

The standard of review for the ground of appeal is palpable and overriding error. The inferences that the motion judge drew – including that M.A had less apparent involvement in the management of the assets than the motion judge would have expected from someone whose full-time job was managing those assets – were available to the motion judge on the evidence before her, and her failure to expressly mention other evidence that the appellants argued supporting a contrary inference did not mean that the motion judge ignored or misapprehended that evidence. Whether the motion judge was incorrect in some respects, and some of the transactions post-dated the alleged making of the oral gift and pre-dated the gift deed would not, by themselves, be enough to displace the inferences drawn by the motion judge on this record. Thus, the motion judge did not make any reviewable error.

(b) The legal errors

The appellants claimed two overarching legal errors: the motion judge was said to have (1) lumped all the appellants together in the Van Breda analysis and failed to give any reasons for finding jurisdiction over the corporate appellants; and (2) relied on connections between other defendants and Ontario, to find jurisdiction over the appellants (the “claim as a whole” argument).

(i) Failure to perform an individualized assessment of each defendant

The appellants argued that the motion judge’s analysis proceeded on the erroneous belief that if she found a single presumptive connecting factor in relation to one defendant, it would be sufficient to ground jurisdiction over all defendants, and for that reason she failed to perform a Van Breda analysis with respect to the claims brought against each defendant.

The motion judge found jurisdiction on the basis of a factual matrix proper to each defendant acting in concert with S.K.A, said to have orchestrated the fraudulent scheme from Ontario, and the alleged role of each in the conspiracy. Implicit in the motion judge’s analysis was that a prima facie case of conspiracy had been made out with respect to each defendant. S.K.A was the prime mover, and the means he used were the gift deed to M.A, and transactions from M.A to and from the corporate defendants. There was no need to mechanically run through the Van Breda factors since each defendant was alleged to have acted in an interconnected way.

(ii) Lumping the appellants in with S.K.A

The appellants argued that the motion judge illegitimately moved from a finding that Ontario had jurisdiction over S.KA, to a finding that it must therefore have jurisdiction over the other defendants, including the appellants. Again, the motion judge did not proceed on the basis that a finding of jurisdiction over one defendant will always be sufficient to ground jurisdiction over any others. The finding of jurisdiction over M.A and the corporate defendants was tightly connected with the allegation of conspiracy and the parties’ respective roles in carrying out the conspiracy from Ontario. Thus, the motion judge did not make the overarching errors alleged.

(iii) Real and substantial connection to Ontario

The motion judge accurately set out the legal principles related to the assumption of jurisdiction against a foreign defendant, citing Ontario v Rothmans Inc, at para. 54, for the proposition that “an Ontario court will assume jurisdiction against a foreign defendant only where the plaintiff establishes ‘a good arguable case’ for assuming jurisdiction through either the allegations in the statement of claim or a combination of the allegations in the statement of claim and evidence filed on a jurisdiction motion.” The ‘good arguable case’ for assuming jurisdiction is assessed according to criteria set out in Van Breda, particularly “on the basis of objective factors that connect the legal situation or the subject matter of the litigation with the forum”.

Van Breda set out a list of objective presumptive connecting factors that would ground jurisdiction over a tort. The non-exhaustive list includes: (1) the defendant is domiciled or resident in the province; (2) the defendant carries on business in the province; (3) the tort was committed in the province; and (4) a contract connected with the dispute was made in the province.

The motion judge concluded that there was a real and substantial connection between the defendants, the subject matter of the litigation, and Ontario. The Court found that the motion judge did not err in any material respect in that analysis.

The appellants argued that the motion judge bootstrapped jurisdiction onto defendants against whom there was no or, at best, a weak connection to Ontario. However, the motion judge ought not to be read as committing to the doubtful proposition that jurisdiction over one defendant entails jurisdiction over them all. Furthermore, given the centrality of the claim of conspiracy within the claim as a whole, the motion judge’s focus of analysis was appropriately not on the actions of individual defendants in isolation, but on their actions – sometimes separate, sometimes together – in working towards a common end.


Demme v. Healthcare Insurance Reciprocal of Canada, 2022 ONCA 503

[Gillese, Pardu, and Brown JJ.A.]

Counsel:

M. Burgar and S. Cox, for the appellant

M. Girard and J. Gutman, for the respondent

Keywords: Contracts, Insurance, Commercial and General Liability Insurance, Coverage, Duty to Defend, Exclusions, Torts, Intrusion Upon Seclusion, Bodily Injury, Personal Health Information Protection Act, 2004, S.O. 2004, c. 3, Sched. A, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5(1)(a), Stewart v. Demme, 2022 ONSC 1790 (Div. Ct.), Stewart v. Demme, 2020 ONSC 83, Jones v. Tsige, 2012 ONCA 32 , Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance Company, 2021 ONCA 612, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Oliveira v. Aviva Canada Inc., 2018 ONCA 321, Keys v. Intact Insurance Company, 2015 ONCA 400, Martin v. American International Assurance Life Co., 2003 SCC 16, Mutual of Omaha v. Stats, [1978] 2 S.C.R. 1153, Sansregret v. The Queen, [1985] 1 S.C.R. 570, Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, Barbara Billingsley, General Principles of Canadian Insurance Law, 3rd ed. (LexisNexis Canada, 2020)

facts:

The appellant was a former registered nurse who worked at the Brampton Civic Hospital until December 2016, when the Hospital ended her employment upon discovering that she had misused an automatic medication dispensing unit (“ADU”) over an extended period to obtain Percocet tablets. The Hospital notified the patients whose medical records were affected, and eight civil actions were subsequently started by patients against the appellant and the Hospital (the “Underlying Action”).

The respondent insured the Hospital and their employees and appointed counsel to represent the Hospital in the Underlying Action. In July 2017, the respondent advised the appellant that there was no coverage under the Policy for the allegations advanced against her.

The appellant then commenced the current action against the respondent seeking a declaration that it owed her a duty to defend the Underlying Action and related relief. In late 2020, the appellant moved for summary judgment for such a declaration, and a further declaration that she was an additional insured under certain policies of insurance and therefore was entitled to liability coverage.

On the motion, the respondent pleaded that the allegations in the Underlying Actions did not amount to an “occurrence” because the bodily injury arising from the appellant’s conduct was expected or intended by her and thus the allegations were excluded by the Policy. It further pleaded that the allegations against the appellant constituted the performance of a criminal act, which was excluded by Policy exclusion 1(e).

The motion judge dismissed the motion and concluded that the true nature of the claims against the appellant was the intentional tort of intrusion upon seclusion and that there can be no liability for such tort unless there was a finding that the defendant intended to intrude upon the seclusion of another.

issues:

(1) Did the motion judge misapply the pleadings rule?

(2) Did the motion judge err in his treatment of the issue of intentionality in respect of coverage for an occurrence and the intention act exclusion?

(3) Did the motion judge err in applying the criminal act exclusion?

(4) Did the motion judge fail to interpret the Policy so as to avoid nullifying its coverage?

holding:

Appeal dismissed.

reasoning:

(1) No.

The motion judge grounded his duty to defend analysis in the statement of claim in the Underlying Actions and admissions contained in the appellant’s defences. The appellant argued that the motion judge failed to give sufficient weight to two sets of facts pleaded in her defences when ascertaining whether there was a mere possibility that a pleaded claim would trigger coverage and therefore a duty to defend.

The Court found that the motion judge’s analysis properly focused on considering the nature of the claims asserted against the appellant within the terms of coverage provided by the Policy, rather than on her pleaded explanations for what she did or why she did it. The Court found no basis for this complaint, and found that what use the appellant may or may not have made of the narcotics she obtained did not play a role in the motion judge’s analysis.

(2) No.

The motion judge found that the claims pleaded against the appellant did not involve an occurrence and fell outside the Policy’s coverage by operation of the intentional act exclusion. The appellant advanced three submissions about why the conclusions by the motion judge were in error:

(i) The decision in Oliveira

The appellant submitted that the motion judge erred by failing to follow the decision of the Court in Oliveira. The Court concluded that the issues about the language of coverage and exclusion at play on this appeal were not considered in Oliveira and consequently did not receive judicial comment or analysis.

(ii) The element of “reckless” in intrusion upon seclusion

The appellant argued that since the tort of intrusion upon seclusion covers conduct that is intentional or reckless, the motion judge erred by failing to find a mere possibility existed that the claims alleged against her could be regarded as claims for damages for bodily injury arising out of reckless conduct.

The Court held that an accident can include a negligent or grossly negligent act. Nevertheless, accident conveys the idea that the consequences of certain actions are unexpected. Reckless conduct stands very close to the intentional end of the conduct spectrum, far away from the unintentional end where the appellant tried to place it. The Court concluded that for the appellant to contend that in the face of such claims there existed a mere possibility that her alleged conduct could be characterized as causing injury that was neither expected nor intended from her standpoint lacked any air of reality.

(iii) The intention to obtain pills as distinguished from the intention to access patient records

The appellant contended that the motion judge erred by failing to accept her argument that a material distinction existed between her intention to obtain the Percocet pills and her intentions regarding the patient’s records. As a result, the appellant argued those unintended consequences constituted a type of bodily injury that fell within the Policy’s coverage of an occurrence.

The motion judge did not accept her argument and focused his analysis on the nature of the claims brought against the appellant in the Underlying Actions. The motion judge held that their true nature was the intentional tort of intrusion upon seclusion. The relevant intention is the defendant’s intention to access private patient records. The motion judge concluded that the pleading of intrusion upon seclusion took the claims against the defendant outside the Policy’s definition of occurrence and, as well, within the ambit of the intentional act exclusion.

The Court found no error in the motion judge’s conclusion, and held that it flowed logically from the elements of the pleaded tort of intrusion against seclusion, which he found to be the true nature of the claims against the appellant.

(3) No determination of this issue.

Given that the motion judge did not err in his conclusions that the claims pleaded against the appellant in the Underlying Actions were not occurrences under the Policy and fell within its intentional act exclusion, the Court found that it was not necessary to comment on the motion judge’s treatment of the criminal act exclusion.

(4) No

The appellant submitted that by determining that the claims against her for intrusion upon seclusion did not give rise to a mere possibility of coverage and therefore did not attract a duty to defend, the motion judge erroneously adopted an interpretation of the Policy that nullified coverage for liability for bodily injury arising out of invasion or violation of the right of privacy.

The Court found no error in the motion judge’s conclusion that since the Policy would cover bodily injury arising from negligence-based invasions of privacy, the lack of coverage for the intentional tort of intrusion upon seclusion would nullify the Policy’s coverage.


Leaf Homes Limited v. Khan, 2022 ONCA 504

[Gillese, Miller and Coroza JJ.A.]

Counsel:

A. Farooq and S. Balcharan, for the appellants

M. Kersten, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Default Judgments, Setting Aside, Procedural and Natural Justice, Reasonable Apprehension of Bias, Costs, Personal Liability, Lawyers, Fresh Evidence, Rules of Civil Procedure, Rule 19.09, 57.07(1), (2), Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, Palmer v. The Queen, [1980] 1 S.C.R. 759, HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894, BHL Capital v. 2281165 Ontario Ltd., 2018 ONSC 7289, Zeifman Partners Inc. v. Aiello, 2020 ONCA 33, Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd., 2007 ONCA 333, Techlantic v. Modellista, 2021 ONSC 746, Dentons Canada LLP v. Khan, 2021 ONSC 5261, Ross v. Filip, 2021 ONSC 1496, Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25, Galganov v. Russell (Township), 2012 ONCA 410,  Rutman v. Rabinowitz, 2018 ONCA 279, Niagara Structural Steel (St. Catharines) Ltd. v. W.D. Laflamme Ltd. (1987), 58 O.R. (2d) 773 (C.A.)

facts:

The appellants entered into an agreement of purchase and sale with the respondent to buy a home to be built in a new residential community in Whitchurch-Stouffville (the “Property”) for $1,518,888 (the “Agreement”). The deal was to close on October 4, 2018.

When the appellants could not get mortgage approval, they told the respondent they would be unable to close on the purchase and sale. The respondent kept the appellants’ $180,000 down payment, sold the Property a few months after the closing date for less than two-thirds of the purchase price that the appellants had agreed to pay, and obtained default judgment against the appellants for over $400,000. The respondent then began to take steps to realize on the judgment.

On learning that their bank account had been garnisheed by the respondent, the appellants retained counsel. Counsel moved to set aside the default judgment and be permitted to enter a defence and counterclaim.

The motion judge ordered that the default judgment be set aside but only to the extent that the appellants could litigate the amount of damages. Despite their partial – but significant – success on the motion, the appellants were ordered to pay costs on a substantial indemnity basis, and a personal costs order was made against counsel for the appellants. On appeal, the appellants challenged the validity of all those orders.

issues:

(1) Did the motion judge err in misapplying r. 19.08?

(2) Did the motion judge err in validating service of the Statement of Claim?

(3) Did the motion judge err in making palpable and overriding errors of fact?

(4) Did the motion judge err in demonstrating a reasonable apprehension of bias?

(5) Did the motion judge err in making the Personal Costs Order?

(6) Did the motion judge err in ordering costs of the Motion against the appellants on a substantial indemnity basis?

holding:

Appeal allowed.

reasoning:

(1), (2), (3) Yes

Because a motion judge’s decision to set aside a default judgment is a discretionary one, it attracts deference on appeal. The decision should not be interfered with absent an error in law or principle, a palpable and overriding error of fact, or unless the decision is so clearly wrong as to amount to an injustice: Mountain View Farms Ltd. v. McQueen; HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation

As the motion judge correctly noted, the test for setting aside a default judgment requires the court to consider the following five factors:

(a) whether the motion to set aside the default judgment was brought promptly after the [appellants] learned of it;

(b) whether there is a plausible excuse or explanation for the [appellants’] default in complying with the Rules;

(c) whether the facts establish that the [appellants] have an arguable defence on the merits;

(d) the potential prejudice to the [appellants] should the motion be dismissed, and the potential prejudice to the [respondent] should the motion be allowed; and

(e) the effect of any order the court might make on the overall integrity of the administration of justice.

In the Court’s view, the motion judge made reversible errors in her assessment of the merits of the appellants’ defence. Consequently, the Court owed no deference to her determination of this factor. An arguable defence on the merits alone may justify the court in exercising its discretion to set aside a default judgment. In this case, on the basis of the appellants’ defence alone, the Court set aside the default judgment.

(c) The motion judge fundamentally misunderstood the appellants’ defence. The appellants’ defence and counterclaim were intertwined so both had to be considered when assessing this factor. The motion judge did not mention or consider the counterclaim in her Reasons. In short, the appellants’ defence alleged pressure tactics and various misrepresentations that induced them to enter into the Agreement and not, as the motion judge stated, simply an offer to help obtain financing. The motion judge also erred in law in her approach to determining whether the arguable defence factor had been satisfied. The appellants did not need to show that their defence would inevitably succeed; they only had to show that it had an air of reality: Mountainview. There was an air of reality to the defence.

(a) In concluding that the appellants had not acted promptly after learning of the default judgment, the motion judge both relied on a factual finding that is the result of a palpable and overriding error and erred in principle. The motion judge found that the appellants received copies of the Statement of Claim in September of 2018 based on the “contemporary notes of [the process server’s] actions taken on the day in question”. The process server made no such contemporary notes.

In addition to this palpable and overriding factual error about the process server’s “contemporary notes”, the motion judge erred in principle on this factor in two ways. First, the relevant period of delay is the delay that occurs after default judgment is granted. The history of the proceeding has nothing to do with this factor: see Zeifman Partners Inc. v. Aiello. Instead of considering the period after default judgment was granted, the motion judge considered the appellants’ actions from the point that the Statement of Claim was allegedly served. Non-attendance at examinations may be considered as part of the fifth Mountain View factor, but it is not a relevant consideration for the purpose of this factor. It was an error in principle to take non‑attendance at examinations into consideration when deciding whether the Motion was brought promptly after learning of the default judgment.

(b) In finding against the appellants on the factor of a plausible excuse or explanation for the appellants having failed to comply with the Rules, the motion judge relied heavily on her finding that the appellants had been personally served with the Statement of Claim in September 2018, a finding infected by palpable and overriding error. Consequently, the motion judge’s determination of this factor warranted no deference.

(d) The motion judge erred in two ways in finding that the respondent would suffer prejudice if the Motion were granted. First, the motion judge accepted that the respondent would suffer because it would incur further costs. That was an error in principle. For the purposes of this factor, prejudice is something that is not compensable in costs: Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd.,; Techlantic v. Modellista. It is self-evident that a claim of incurring further costs is one that is compensable by a costs order.

Second, the motion judge accepted the respondent’s bald assertion that witnesses’ memories would have faded by the passage of time. This, too, was an error in principle. Prejudice must be real and not merely speculative: Dentons Canada LLP v. Khan. There was nothing in the record to support the statement that the passage of time had led to problems with witnesses’ memories.

(e) The factor of the effect on the overall integrity of the administration of justice required the motion judge to consider the global effect of the other factors. Because the motion judge erred in her assessment of the other factors, her decision on this matter warranted no deference.

(4) No

There is a strong presumption of judicial impartiality that is not easily displaced. The presumption will be rebutted only where there is a real likelihood or probability of bias: Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General). The appellants submitted that the cumulative effect of the motion judge’s “problematic decisions” and her comments about them and their counsel overcome this presumption. While the motion judge made a number of errors, an objective and informed observer would not conclude there was a real likelihood or probability of bias.

(5) Yes

The Personal Costs Order could not stand. The motion judge breached the procedural requirements in r. 57.07(2) and, as a result, was without jurisdiction to make the order. Further, she made the order based on palpable and overriding errors of fact.

Rule 57.07(1) empowers the court to order a lawyer to personally pay a party’s costs if the lawyer “caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default”. However, r. 57.07(2) imposes a mandatory requirement on the court: “no such order shall be made unless the lawyer is given a reasonable opportunity to make representations to the court.” Rule 57.07 is not concerned with the discipline or punishment of a lawyer but only with compensation for conduct that caused unreasonable costs to be incurred: Galganov v. Russell (Township).

While the motion judge referred to r. 57.07(1) in making the Personal Costs Order, unfortunately, she failed to refer to r. 57.07(2) or abide by its requirement: she gave the appellants’ lawyer no opportunity to make representations before she made the Personal Costs Order.  Because he had been given no right of reply to the respondent’s costs submissions, he could not respond to these allegations or the respondent’s request for a personal costs order against him. On the basis of the breach of r. 57.07(2) alone, the Personal Costs Order was set aside.

In addition, the fresh evidence demonstrated that the Personal Costs Order was based on two palpable and overriding factual errors. The motion judge stated that: (1) The appellants’ lawyer knew the appellants were not going to attend the cross-examinations “at least a week before they were to occur” and (2) he “agreed” to the appellants’ request to leave the country for an unspecified reason. The fresh evidence showed that both of those reasons for making the Personal Costs Order were the result of palpable and overriding factual errors. It made clear that the appellants’ lawyer did not know until February 24, 2020, the day before the cross-examinations were to take place, that the appellants would not be in attendance at them. It also made clear that he never agreed that the appellants did not need to attend the cross-examinations.

(6) Yes

Since the appellants were fully successful on the Motion, the Costs Order against them necessarily fell and it became unnecessary to address the alleged errors in the making of the Costs Order.


2257573 Ontario Inc. v. Furney, 2022 ONCA 505

[Brown, Roberts and Paciocco JJ.A.]

Counsel:

S. Dyment, for the appellant AF and MF

HH, acting in person

H. Reininger, for the respondent

Keywords: Contracts, Real Property, Mortgages, Damages, Interest, Usury, Canadian Charter of Rights and Freedoms, ss. 7, 12 and 15, Criminal Code, R.S.C., 1985, c. C-46, s. 347, Mortgages Act, R.S.O. 1990, c. M.40, Housen v. Nikolaisen, [2002] 2 S.C.R. 235, Transport North American Express Inc. v. New Solutions Financial Corp., [2004] 1 S.C.R. 249, Cheung v. Moskowitz Capital Mortgage, 2018 ONSC 1322

facts:

These grouped appeals arose out of the appellants’ default under several mortgages and guarantees. The appellants were MF, who is a licensed mortgage agent and an experienced real estate investor, her husband, AF, and their acquaintance, HH, who was interested in investing in one of their properties.

In February and March 2017, MF and AF negotiated several high-interest, short-term loans from the respondent 2257573 Ontario Inc. to assist them in refinancing the mortgages on their properties. These loans were secured by mortgages on MF and AF’s properties in Niagara-on-the-Lake and on a Woodstock property owned by HH.

MF and AF could not refinance their mortgages and from the outset went into default on their mortgage agreements. In late 2017, the respondent sued the appellants for defaulting under the mortgage agreements and on their guarantees and brought a motion for summary judgment. The appellants asserted counterclaims, alleging damages caused by the respondent because of its failure to fulfill an alleged oral agreement relating to the discharge of executions registered against MF as part of the refinancing arrangements, its deficient mortgage discharge statements, and the mortgage interest charged at a criminal rate.

The appellants argued that the motion judge erred by granting interest under the mortgages because of the respondent’s allegedly improper conduct. The appellants also argued that the motion judge erred in calculating the amounts owing under the mortgages.

Additionally, HH argued that his rights to a fair hearing was breached in violation of ss. 7, 12, and 15 of the Canadian Charter of Rights and Freedoms and because of an apprehension of judicial bias.

issues:

(1) Did the motion judge err by granting interest under the mortgages due to the respondent’s alleged improper conduct?

(2) Did the motion judge err in calculating the amounts owed under the mortgages?

(3) Was HH’s right to a fair hearing breached in violation of ss. 7, 12, and 15 of the Charter and because of an apprehension of judicial bias?

holding:

Appeals dismissed.

reasoning:

(1) No

The motion judge was not required to impose a particular remedy. The motion judge’s assessment of the impact of the respondent’s conduct and of the appropriate remedy and interest to be awarded in the circumstances of this case was an exercise of his discretion.

The respondent charged interest under the mortgages at a criminal rate of interest contrary to s. 347 of the Criminal Code, R.S.C., 1985, c. C-46, which the respondent admitted, and failed to provide timely and accurate mortgage discharge statements. The appellants argued that the motion judge erred in effectively rewarding the respondent’s improper conduct by granting interest under the mortgages in these circumstances.

The appellants’ submission before the motion judge was that any interest awarded under the mortgages should be reduced, not eliminated, as they argued on appeal. It was hardly fair to fault the motion judge for failing to give effect to a submission that was not before him. The motion judge correctly recognized that “a spectrum of remedies are available to a judge in civil proceedings when a violation of s. 347 of the Criminal Code is found” and applied the guiding principles concerning the appropriateness of notional severance as a remedy from the leading case, Transport North American Express Inc. v. New Solutions Financial Corp.

The motion judge concluded that notional severance would be appropriate and would not subvert the purpose of s. 347 of the Criminal Code. Accordingly, he ordered the severance of illegal interest in relation to each of the mortgages to allow the respondent judgment “for only the principal sum of the mortgage funds advanced plus interest thereon at the rates agreed to by the parties”.

(2) No

The motion judge made no error in evaluating the evidence that grounded his findings.

The appellants submitted that the motion judge misapprehended the evidence and therefore erred in his calculation of the amounts owing under two of the mortgages.

First, it was not contested that $547,000 was advanced under the one mortgage. Second, the trial judge was entitled on the evidence to conclude that the $73,000 advance under the second mortgage was made up of $67,000 principal, plus $6,000 in brokerage fees paid by the respondent on closing to the mortgage brokers involved as per the signed mortgage commitments.

(3) No

These submissions were rejected, as HH’s bald allegations were unsubstantiated by anything in the record, including the motion judge’s reasons, and were wholly without merit.


Caledon (Town) v. Darzi Holdings Ltd., 2022 ONCA 513

[Brown J.A. (Case Management Judge)]

Counsel:

K. D. Sherkin and K. Sonshine, for the appellants

M. Winch and R. Sniderman, for the respondent

A. Hershtal, for the appellants’ former counsel

Keywords: Civil Procedure, Orders, Contempt, Sentencing, Fines, Appeals, Interveners, Ineffective Assistance of Counsel, Professional Conduct, Recording Clients, Fresh Evidence, Rules of Civil Procedure, Rule 13.01(2), Rules of Professional Conduct, Rule 4.03(2), Caledon (Town) v. Darzi Holdings Ltd., 2022 ONCA 455, Cowles v. Balac (2006), 83 O.R. (3d) 660 (C.A.), Gagnon v. Pritchard (2002), 58 O.R. (3d) 557 (S.C.), Dumais v. Zarnett (1996), 30 O.R. (3d) 431 (S.C.), John Sopinka, Sidney N. Lederman & Alan W. Bryant, The Law of Evidence in Canada, 6th ed. (Lederman, Fuerst, Stewart) (LexisNexis, 2022)

facts:

The endorsement addresses two procedural issues from the preparation of the appellants’ motion to adduce fresh evidence on their appeal from a $1 million fine, imposed by way of sentence in civil contempt proceedings. The motion for fresh evidence related to the appellants’ ground of appeal that alleges ineffective assistance of counsel by one of their former counsel in the proceedings below (“Former Counsel”).

The appellants, Darzi Holdings Ltd., Rafat General Contractors Inc., and LRS, appeal the $1 million fine imposed by Myers J. as the sentence for their contempt of the 2019 Injunction Order obtained by the respondent, The Town of Caledon (the “Town”).

The appellants have only refused to produce two items in Former Counsel’s file: both are recordings he made of conversations with his clients, the appellants, during the course of his retainer. The appellants have waived privilege over the balance of Former Counsel’s file.

issues:

(1) Did the motion judge agree with the appellants’ refusal to produce two items in the Former Counsel’s file?

(2) Can Former Counsel file evidence that responds to the appellants’ allegations of ineffective assistance of counsel and can Former Counsel file a factum and motion record on the motion for fresh evidence?

holding:

Appeals dismissed.

reasoning:

(1) No

In the present case, any issue concerning the admissibility of evidence on the motion to adduce fresh evidence on the appeal will be heard and decided by the appeal panel at the hearing. It will be for the panel to determine whether Former Counsel made the two recordings in violation of the Rules of Professional Conduct and, if he did, what effect, if any, that may have on the use of the recordings on the appellants’ motion for fresh evidence.

The motion judge was not persuaded by the appellants’ submission that the two recordings do not form part of Former Counsel’s file, which the Endorsement ordered produced. The recordings exist and were located in Former Counsel’s file. No party takes the position that the recordings’ contents do not relate to the issue of the allegation of ineffective assistance of counsel.

The motion judge ordered the appellants to make available to the Town’s counsel the two recordings made by Former Counsel. However, to preserve the ability of the appellants to ask the panel to refuse to admit the two recordings into evidence on the appeal, the motion judge directed that the parties confine any reference about the content of the two recordings, and any pre-hearing examination conducted on the recordings, to the materials filed on the motion to adduce fresh evidence. The motion judge further directed that all materials relating to that fresh evidence motion be filed with the Court on a sealed basis, in accordance with the standard practice of the Court on motions for fresh evidence.

(2) Yes

The well-established practice in criminal appeals where ineffective assistance of counsel is advanced as a ground of appeal is that responding Crown counsel adduces the evidence responding to the appellant’s allegations. Typically, Crown counsel will file an affidavit from the former counsel that responds to the allegations of ineffective assistance of counsel. Either party may file the transcript of any cross-examination on that affidavit. This reflects the principle that the preparation of the materials for a motion for fresh evidence is controlled by the parties to the appeal.

The same principle should apply in this civil appeal. Consequently, it will be for the Town’s counsel to file any affidavit from Former Counsel and file any necessary responding motion record regarding the fresh evidence.

However, given the novelty of the appellants’ attempt to advance ineffective assistance of counsel as a ground of appeal and the obvious reputational interest of Former Counsel in the motion for fresh evidence, the motion judge granted Former Counsel leave to intervene as an added party on the appeal pursuant to r. 13.01(2) of the Rules of Civil Procedure, but with his rights limited as follows:

(i) Former Counsel may file a responding factum on the motion to adduce fresh evidence of no more than 10 pages, limited to the issue of whether ineffective assistance of counsel exists as a ground of appeal in civil proceedings in this province;

(ii) That factum shall be delivered following the appellants’ delivery of their formal fresh evidence motion record, with supplementary factum; and

(iii) Whether Former Counsel may make submissions at the hearing of the motion for fresh evidence was a matter to be decided by the panel hearing that motion and the appeal.



SHORT CIVIL DECISIONS

Marmer Penner Inc. v. Vacaru, 2022 ONCA 506

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

Counsel:

F. Vacaru, as self-represented

T. Pagliaroli, for the respondants, Legge & Legge and John Legge

M.E. Girard, for the respondent, Marmer Penner Inc.

Keywords: Civil Procedure, Appeals, Costs

Just Energy Group Inc. (Re), 2022 ONCA 498

[Benotto, Zarnett and Sossin JJ.A.]

Counsel:

K. Rosenberg, J. Larry and D. Glatt, for the moving party

J. MacDonald, M. Wasserman, M.D. Lellis, J. Dacks and K. Sachar, for the responding parties Just Energy Group Inc. et al.

A. Merskey, J.M. Picone and C. Selby, for the DIP Lenders

Keywords: Bankruptcy and Insolvency, Civil Procedure, Appeals, Leave to Appeal, Costs, Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, Stelco Inc. (Re) (2005), 2005 CanLII 8671 (ON CA), Timminco Ltd. (Re), 2012 ONCA 552 Nortel Networks Corp. (Re), 2016 ONCA 332, 9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, Laurentian University of Sudbury (Re), 2021 ONCA 199


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