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Good evening.

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

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

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

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

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

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

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

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

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Walpole v. Crisol, 2024 ONCA 400

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

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

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

One Clarendon Inc. v. Finlay, 2024 ONCA 414

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

Zaidi v. Syed Estate, 2024 ONCA 406

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

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

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

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

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

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

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

Short Civil Decisions

Yan v. Persaud, 2024 ONCA 416

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

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

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

2137073 Ontario Inc. v. Furney, 2024 ONCA 421

Keywords: Civil Procedure, Costs

2137073 Ontario Inc. v. Furney, 2024 ONCA 428

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


CIVIL DECISIONS

Walpole v. Crisol, 2024 ONCA 400

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

Counsel:

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

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

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

facts:

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

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

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

issue:

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

holding:

Appeal dismissed.

reasoning:

No.

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

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

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


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

[Zarnett J.A. (Motions Judge)]

Counsel:

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

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

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

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

facts:

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

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

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

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

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

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

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

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

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

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

issue:

Is granting the stay in the interests of justice?

holding:

Motion dismissed.

reasoning:

No.

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

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

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

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

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


One Clarendon Inc. v. Finlay, 2024 ONCA 414

[Zarnett J.A. (Motions Judge)]

Counsel:

S. Sood, for the moving party

No one appearing for the responding parties

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

facts:

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

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

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

issues:

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

holding:

Motion granted.

reasoning:

Yes.

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

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

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

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

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


Zaidi v. Syed Estate, 2024 ONCA 406

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

Counsel:

K. Randhawa, for the appellant

R. S. Mann, for the respondents

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

facts:

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

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

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

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

Appeal dismissed.

reasoning:
  1. No.

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

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

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

  1. No.

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

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

  1. No.

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

  1. No.

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

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

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


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

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

Counsel:

J. Margie and J. Nathwani, for the appellant

K. Chaytor and C. Pasqualino, for the respondent

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

facts:

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

issue:

Did the Court have jurisdiction to hear the appeal?

holding:

Appeal dismissed.

reasoning:

No.

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


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

[Nordheimer, Copeland and Dawe JJ.A.]

Counsel:

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

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

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

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

facts:

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

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

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

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

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

Appeal dismissed.

reasoning:
  1. No.

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

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

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

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

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

  1. No.

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

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

(1) Pressing and substantial object

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

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

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

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

(2) Proportionality

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

(i) Rational connection

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

(ii) Minimal impairment

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

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

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

(iii) Proportionality between salutary and deleterious effects

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

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

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

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

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

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

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

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

Nordheimer J., dissenting:

  1. No.

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

  1. Yes.

(1)  Sufficient importance

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

(2) Reasonably and demonstrably justified

(i) Rational connection

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

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

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

(ii) Minimal impairment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(iii) Proportionality

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

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

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

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

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


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

[Pepall, George and Dawe JJ.A.]

Counsel:

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

K. Lunau, for the respondent Municipal Property Assessment Corporation

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

facts:

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

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

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

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

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

Appeal dismissed.

reasoning:

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

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

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

  1. No.

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

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

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

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

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

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

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

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

  1. No.

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

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

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

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

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


SHORT CIVIL DECISIONS

Yan v. Persaud, 2024 ONCA 416

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

A. Windsor, for the moving party

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

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

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

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

W. Colin Empke and Kathleen Lefebvre, for the appellant

D.N. Bleiwas, for the respondents

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

2137073 Ontario Inc. v. Furney, 2024 ONCA 421

[Huscroft, Miller and Favreau JJ.A.]

Counsel:

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

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

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

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

Keywords: Civil Procedure, Costs

2137073 Ontario Inc. v. Furney, 2024 ONCA 428

[Lauwers J.A. (Motions Judge)]

Counsel:

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

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

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

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

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


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.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of May 13, 2024.

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In Wiener v Strickland, the Ontario Court of Appeal upheld the trial judge’s decision dismissing an action against a lawyer for professional negligence in an estate litigation matter.

In Dr. C. Sims Dentistry Professional Corporation v. Cooke, the Court dismissed the appeal, affirming the reasonableness of the duration and geographic scope of the non-competition covenant agreed to as part of the purchase and sale of a dental practice.

Ash v. Ontario was an application to halt mandatory COVID-19 vaccinations for children under 12. The Court dismissed the appeal. The appellant was late seeking leave to appeal and an extension of time was denied because the Court was of the view that the grounds for appeal were weak.

Neighbour’s Drug Mart Ltd v Ontario (Ministry of Health and Long Term-Care) is an administrative law decision arising from the revocation of billing privileges under the Ontario Drug Benefit Act.

In Sternberg v. Cresford Capital Corporation, the appeal from the dismissal of a claim on a guarantee of a mortgage was dismissed. There was no guarantee agreement. The box in the registered charging listing a guarantor was filled out in error.

In Ding v. Chen, the Court heard this family law appeal in writing after the appellant failed to attend the oral hearing of the appeal and failed to provide evidence as to why he could not attend.

Wishing everyone a wonderful Victoria Day long weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Neighbour’s Drug Mart Ltd v. Ontario (Ministry of Health and Long Term-Care), 2024 ONCA 378

Keywords: Administrative Law, Judicial Review, Health Law, Drug Benefits, Ontario Drug Benefit Act, R.S.O. 1990, c. O.10

Wiener v. Strickland, 2024 ONCA 394

Keywords: Torts, Professional Negligence, Solicitors, Wills and Estates, Civil Procedure, Settlements, Releases, Terranata Winston Churchill Inc. v. Teti Transport Ltd. et al., 2020 ONSC 7577, Haider v. Rizvi, 2023 ONCA 354

Sternberg v. Cresford Capital Corporation, 2024 ONCA 377

Keywords: Contracts, Interpretation, Guarantees, Real Property, Agreements of Purchase and Sale of Land, Mortgages, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592

Ash v. Ontario (Chief Medical Officer), 2024 ONCA 398

Keywords: Civil, Judicial Review, Mandamus Order, Motion to Quash, Conflict of Interest, Fraud, Courts of Justice Act, RSO 1990, c. C.43, s. 6(1), 110, Judicial Review Procedure Act, RSO 1990, c. J.1, s. 4, Health Promotion and Protection Act, RSO 1990, c. H.7, s. 77.9(1), Rules of Civil Procedure, rr. 2.1, 37.14(1)(c), 59.06(2)(a), 61.03.1(3)(a), 61.03.1(15) Hemchand v Toronto (City), 2016 ONSC 7134, Tran v Office of the Independent Police Review Director, 2023 ONSC 3207, Frey v MacDonald (1989), 33 CPC (2d) 13 (ONCA), Enbridge Gas Distribution Inc v Froese, 2013 ONCA 131, 2363523 Ontario Inc v Nowack, 2018 ONCA 286, Leighton v Best, 2014 ONCA 667, Sutherland Lofts Inc v Peck, 2017 ONCA 803, Currie v Halton Regional Police Services Board (2003), 233 DLR (4th) 657, Foy v Foy (No 2) (1979), 26 OR (2d) 220 (CA), Collins v Ontario, 2017 ONCA 317, Hill v Cambridge (City), 2023 ONCA 164

Dr. C. Sims Dentistry Professional Corporation v. Cooke, 2024 ONCA 388

Keywords: Contracts, Restrictive Covenants, Enforceability, Civil Code of Québec, S.Q. 1991, c. 64, Payette v. Guay inc., 2013 SCC 45, Elsley v. J.G. Collins Ins. Agencies Ltd. [1978] 2 S.C.R. 916, Tank Lining Corp. v. Dunlop Industrial Ltd. (1982), 40 O.R. (2d) 219, MEDIchair LP v. DME Medequip Inc., 2016 ONCA 168, Kerzner v. American Iron & Metal Company Inc., 2018 ONCA 989, Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, Doerner v. Bliss & Laughlin Industries Inc., [1980] 2 S.C.R. 865

Ding v. Chen, 2024 ONCA 395

Keywords: Family Law, Child Support, Contempt, Civil Procedure

Short Civil Decisions

Naeem v. Bowmanville Lakebreeze West Village Ltd., 2024 ONCA 383

Keywords: Contracts, Repudiation, Real Property, Agreements of Purchase and Sale of Land, Deposits, Forfeiture, Defences, Unconscionability, Equitable Remedies, Relief from Forfeiture, Shah v. Southdown Towns Ltd., 2017 ONSC 5391, Wang v. 2426483 Ontario Limited, 2020 ONSC 3368,  Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, Ching v. Pier 27 Toronto Inc., 2021 ONCA 551,  Azzarello v. Shawqi, 2019 ONCA 820, leave to appeal refused [2019] S.C.C.A. No. 521, Rahbar v. Parvizi, 2023 ONCA 522

ID Inc. v. Toronto Wholesale Produce Association, 2024 ONCA 381

Keywords: Breach of Contract, Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 128

2137073 Ontario Inc. v. Furney, 2024 ONCA 392

Keywords: Civil Procedure, Appeals, Reconsideration, Orders, Variation, Setting Aside, Rules of Civil Procedure, rr. 2.1, 59.06

Byrd v. Stockey, 2024 ONCA 396

Keywords: Civil Procedure, Appeals, Orders, Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 7(5), Rules of Civil Procedure, rr. 37.14


CIVIL DECISIONS

Neighbour’s Drug Mart Ltd v Ontario (Ministry of Health and Long Term-Care), 2024 ONCA 378

[Brown, Paciocco and Nordheimer JJ.A]

Counsel:

N. M. Abramson and A. Lewis, for the appellant

M. J. Sims and K. Yeretsian, for the respondent

Keywords: Administrative Law, Judicial Review, Health Law, Drug Benefits, Ontario Drug Benefit Act, R.S.O. 1990, c. O.10

facts:

The appellant, Neighbour’s Drug Mart Ltd. (“Neighbour’s”), appealed, with leave, from the Divisional Court’s order dismissing its application for judicial review of the decision of the Executive Officer of the Ontario Public Drug Programs for Ontario (the “Decision”). The Decision terminated Neighbour’s Health Network System Agreement (“Operator’s Agreement”), revoked its billing privileges under s. 4.1 of the Ontario Drug Benefit Act (“ODBA”), and suspended its entitlement to receive payment under the ODBA.

issues:
  1. Did the Executive Officer and Divisional Court fundamentally misapprehended the record, which disclosed that the majority of the billing issues were attributable to the pharmacy’s prior owner?
  2. Did the Executive Officer and Divisional Court impose revocation in circumstances not supported or permitted by the regulatory regime or the Operator’s Agreement?
  3. Did the Executive Officer and Divisional Court improperly create a form of absolute liability for pharmacy owners?
holding:

Appeal dismissed.

reasoning:
  1. No.

The application of the regulatory regime to the facts of the case by the Executive Officer and Divisional Court understandably was informed by two factors. First, the regulatory scheme operated on the basis of an honour system that relied on operators not to submit any claims that the operator knew or reasonably ought to have known were false, inaccurate or misleading. Second, Neighbour’s was a corporate operator. As such, its owner and directors were obliged to ensure that the corporation’s managers and other employees complied with regulatory requirements. The Court found that there was no misapprehension on the part of the Divisional Court or Executive Officer, as the conclusions were based on an accurate understanding of the facts.

2 & 3. No.

The Court found that the revocation of the Operator’s Agreement was not an unreasonable sanction in the circumstances, nor did it amount to a form of absolute liability. The decision was part of a regulatory system that operated based on trust, and was primarily due to Mr. S’s failure, in his capacity as owner and director of Neighbour, to ensure that false, inaccurate, or misleading claims were not submitted by the company’s manager and employees over a significant period.

Neighbour argued against this revocation, citing section 11.2 of their Operator’s Agreement, which involved notification and consent protocols for changes in control or sale of assets. However, the Court found that their argument was not supported by the agreement’s language nor by subsequent consents for change in control, which implicated that new owners would assume all rights and liabilities, including those from past misconduct. Ultimately, the Court found no error in the decision to revoke the agreement.


Wiener v. Strickland, 2024 ONCA 394

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

Counsel:

J. Vale and D. Fogel, for the appellant

D.B. Williams, for the respondents

Keywords: Torts, Professional Negligence, Solicitors, Wills and Estates, Civil Procedure, Settlements, Releases, Terranata Winston Churchill Inc. v. Teti Transport Ltd. et al., 2020 ONSC 7577, Haider v. Rizvi, 2023 ONCA 354

facts:

This appeal arose out of a solicitor’s negligence claim. The respondents acted as counsel for the appellant in an estates dispute. That dispute resulted in a settlement. The appellant subsequently took the view that he had not authorized the respondent to agree to the terms of the settlement. His specific concern was over whether the settlement preserved his ability to sue the lawyer who had represented the estate, Mr. G. The appellant then commenced litigation against the respondents. He also sought to resile from the settlement in the original estates dispute, but further litigation to enforce the settlement was ultimately resolved through a consent order. The trial judge found that the respondent did not bind the appellant to any of the points in the settlement document without his instructions, thus bringing the solicitor’s negligence action to an end. The appellant appealed.

issues:
  1. Did the trial judge err in concluding that nothing in the settlement document precluded the appellant from suing Mr. G?
  2. Did the trial judge err in concluding that she could not determine the limitation period and that, in any event, it would not have barred the appellant from suing Mr. G?
holding:

Appeal dismissed.

reasoning:
  1. No.

The trial judge committed no error in concluding that the settlement document at issue in no way precluded such subsequent litigation against Mr. G. The terms of the document made no reference to Mr. G. Similarly, the fact that the settlement document envisioned releases being signed also had no bearing on this question. The document referred only to releases as against the estate and the estate trustees, and both Ms. F (solicitor for the appellant’s brother) and the respondent confirmed in their evidence that the issue of Mr. G’s inclusion in any release was never discussed, negotiated, or intended.

The appellant argued that, irrespective of whether Mr. G was referred to, the reference to a “standard form release” would have included a “no claims over” clause unless specifically carved out, relying on Terranata Winston Churchill Inc. v. Teti Transport Ltd. et al. In that case, Vella J. observed, “[i]n my view, claims over/contribution and indemnity clauses are usual elements of a standard general release. The Court will therefore imply these types of provisions as terms of standard general releases, unless expressly carved out or narrowed by the parties prior to reaching a settlement.” In Haider v. Rizvi, however, this Court clarified that the intention of Vella J. in that analysis “was not to default to a standard form of release, but rather to determine the objective intentions of the parties based on the settlement they had concluded.”

The Court noted that in this case, the objective intention of the parties was to require the beneficiaries to sign releases releasing the estate and the estate trustees. Not only was the specific form of the release (and whether it would include a no claims over clause) not discussed at the time of settlement, Ms. F was clear in her evidence that she never intended a release of Mr. G. If she had insisted on a release that had the effect of precluding a claim against Mr. G, the respondent’s evidence was clear that the release of Mr. G was never part of the settlement and the motion to enforce the settlement would have failed. Against this backdrop, the appellant abandoned his opposition to the motion to enforce because no such release was being insisted upon.

  1. No.

The Court held that the fact that Mr. G may have had defences to such subsequent litigation, if brought, including a potential limitations argument, had no bearing on whether such litigation was left open by the settlement document. The trial judge did not err in declining to determine the limitations issue that may arise in litigation against Mr. G if such litigation were pursued by the appellant. The trial judge also did not err in concluding that a potential limitations defence would in no way preclude the appellant from pursuing litigation against Mr. G if he wished.


Sternberg v. Cresford Capital Corporation, 2024 ONCA 377

[Roberts, Trotter and George JJ.A.]

Counsel:

S. Block and J. Silver, for the appellant

G. J. Tighe and A. Farley, for the respondent

Keywords: Contracts, Interpretation, Guarantees, Real Property, Agreements of Purchase and Sale of Land, Mortgages, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592

facts:

This appeal arose out of the appellant’s sale of a parcel of land to the respondent as part of the respondent’s development project. The stated consideration for the sale in the agreement of purchase and sale was $5 million: $1 million to be paid on closing and a vendor take back mortgage in the amount of $4 million.

It was common ground that the respondent paid a premium on the property. The respondent assigned the agreement of purchase and sale and vendor take back mortgage to a single purpose corporation, 66 Charles Street Limited. 66 Charles Street Limited defaulted on the mortgage before the entire $4 million was paid to the appellant. The respondent was named as guarantor of the vendor take back mortgage in the electronic registration of the mortgage.

The appellant retook possession of the property and sold it for about $3.3 million, leaving a deficit of about $1 million owing under the vendor take back mortgage, which continued to accrue interest. He commenced an action against the respondent as guarantor for payment of the monies owing under the vendor take back mortgage, including interest and costs. The respondent defended the action on the basis that it never agreed to guarantee the vendor take back mortgage and that its name appears in error on the electronic registration. In its counterclaim, it requested rectification of the electronic registration to remove its name as guarantor.

The parties brought competing motions for summary judgment. The motion judge determined that no guarantee agreement between the appellant and the respondent ever existed and that the inclusion of the respondent as guarantor on the registered vendor take back charge was an error. She therefore granted the respondent’s motion for summary judgment, dismissed the appellant’s cross-motion, and dismissed the appellant’s action with costs. The appellant appealed the dismissal of his action.

issues:
  1. Did the motion judge fail to consider the relevant agreements cohesively as part of a larger transaction, misinterpret the relevant agreements, come to unreasonable and incorrect conclusions about them, rely on irrelevant and subjective evidence, and ignore the factual matrix?
  2. Did the motion judge err by failing to hold the respondent liable for the guarantee on the electronic registration?
holding:

Appeal dismissed.

reasoning:
  1. No.

The motion judge’s interpretation of the parties’ non-standard agreements was entitled to significant deference on appeal, absent an extricable error of law or palpable or overriding error of fact. Cases where a question of law can be extricated from the interpretation process are rare. The appellant did not meet this high bar for appellate intervention.

The motion judge reviewed all the agreements in the context of the relevant factual matrix and applied the correct legal principles of contractual interpretation. In the Court’s view, she determined that there was no guarantee agreement between the appellant and the respondent. She disagreed with the appellant’s interpretation of s. 5 of Schedule A to the agreement of purchase and sale, repeated on appeal, that the respondent agreed to remain liable until the vendor take back mortgage had been repaid. The Court agreed with the motion judge’s interpretation, borne out by the plain language of the agreement of purchase and sale, that the definition of the completion of the transaction was the closing date, and not when the full amounts owing under the mortgage had been repaid, that the respondent agreed to remain liable under the agreement of purchase and sale only until the closing date of the transaction, and that the respondent’s liability under the agreement of purchase and sale consisted of the payment of $1 million and the granting of the vendor take back mortgage.

The Court also agreed with her conclusion that the assignment agreement between the respondent and 66 Charles Street Limited (to which the appellant was not a party) contained no provision that the respondent remained liable on the vendor take back mortgage after closing. Given the motion judge’s finding, upheld on appeal, that the respondent was not a guarantor in this case, the standard charge terms, which outlined the obligations of a guarantor and were incorporated by reference in s. 1(i) to Schedule A of the agreement of purchase and sale, did not apply.

  1. No.

The appellant did not argue that this finding was not open to the motion judge on the record. He submitted that she erred by: 1) accepting the respondent’s evidence that its inclusion as guarantor was an error; and 2) failing to give effect to the alleged representation made by the respondent’s legal representative to the appellant’s legal representative that the respondent would be a guarantor of the vendor take back mortgage, on which the appellant submitted he relied to close the transaction.

The Court did not accept these submissions, which ignored the motion judge’s correct conclusion that there was no guarantee agreement. Given that there was no guarantee agreement, it logically followed that the inclusion of the respondent’s guarantee in the electronically registered vendor take back agreement was an error, as it was inconsistent with the parties’ agreement as reflected in their agreement of purchase and sale. To hold otherwise would rewrite the bargain between the parties and bestow a windfall on the appellant. There was no question that, other than the brief email exchange between the appellant’s lawyer and the law clerk of the respondent’s lawyers, there was no evidence of discussions or communications between the appellant and the respondent that a guarantee agreement was required as part of the consideration for the purchase.

As the motion judge found, the appellant was not left vulnerable and received security over the property and a premium for the property. The appellant was obligated to close the transaction on the closing date upon the purchaser’s payment of $1 million in cash and the granting of the vendor take back mortgage in accordance with the agreement of purchase and sale.


Ash v. Ontario (Chief Medical Officer), 2024 ONCA 398

[Gomery J.A. (Motions Judge)]

Counsel:

JA, acting in person

V. Glasser and M. Saad, for the respondent

Keywords: Civil, Judicial Review, Mandamus Order, Motion to Quash, Conflict of Interest, Fraud, Courts of Justice Act, RSO 1990, c. C.43, s. 6(1), 110, Judicial Review Procedure Act, RSO 1990, c. J.1, s. 4, Health Promotion and Protection Act, RSO 1990, c. H.7, s. 77.9(1), Rules of Civil Procedure, rr. 2.1, 37.14(1)(c), 59.06(2)(a), 61.03.1(3)(a), 61.03.1(15) Hemchand v Toronto (City), 2016 ONSC 7134, Tran v Office of the Independent Police Review Director, 2023 ONSC 3207, Frey v MacDonald (1989), 33 CPC (2d) 13 (ONCA), Enbridge Gas Distribution Inc v Froese, 2013 ONCA 131, 2363523 Ontario Inc v Nowack, 2018 ONCA 286, Leighton v Best, 2014 ONCA 667, Sutherland Lofts Inc v Peck, 2017 ONCA 803, Currie v Halton Regional Police Services Board (2003), 233 DLR (4th) 657, Foy v Foy (No 2) (1979), 26 OR (2d) 220 (CA), Collins v Ontario, 2017 ONCA 317, Hill v Cambridge (City), 2023 ONCA 164

facts:

In 2022, the appellant applied for judicial review, seeking a mandamus order for the Chief Medical Officer of Health of Ontario (CMOH) to halt COVID-19 vaccinations for children under twelve years of age. On July 22, 2022, the respondent’s motion to quash was granted, as the Motion Judge found the application could not succeed due to the lack of conditions precedent and the Court’s lack of authority to direct the CMOH’s discretionary powers. The appellant’s subsequent review motion was dismissed on August 24, 2023. Allegations of conflict of interest involving the CMOH and Pfizer funding led to a motion to set aside the Review Panel’s decision, which was dismissed on October 20, 2023, under Rule 2.1. Further motions by the appellant were dismissed, culminating in the notice of motion filed on May 1, 2024, seeking leave to appeal.

issue:

Should the appellant be granted an extension of time to seek leave to appeal?

holding:

Appeal dismissed.

reasoning:

No.

JA was not granted an extension of time to seek leave to appeal the Divisional Court’s Rule 2.1 dismissal. JA did not act promptly after being advised on November 20, 2023, that his motion was not accepted for filing and that he needed to seek leave to appeal. He delayed more than five months before filing the motion for leave to appeal on May 1, 2024, without providing a compelling explanation for this delay, which weighed against granting the extension.

The Court did not have the authority to simply transfer the motion, as doing so would bypass the established procedure for obtaining leave to appeal. The appellant was required to file a motion for leave to appeal within 15 days of the order being challenged or seek an extension of time. The administrative judge had already informed JA that he could bring a motion for leave to appeal and seek an extension of time in the Court of Appeal. The Court denied the transfer request.

The Court did not directly address the request for an oral hearing and interim order, as the primary issue was whether to grant an extension of time to file a motion for leave to appeal. The Court focused on the merits of the proposed appeal, finding that JA’s grounds for appeal were without merit. The first ground contended that Justice Corbett improperly dismissed the motion under Rule 2.1 based solely on its lack of merit. The Court agreed with Justice Corbett’s determination that the motion was frivolous and vexatious, thus justifying the Rule 2.1 dismissal. The second ground equated an allegation of conflict of interest with fraud, but the Court found that this did not address the fundamental legal deficiencies in JA’s original application for judicial review, such as lack of standing and the absence of a legal basis for the mandamus order. The Court found that, given the lack of merit in the proposed appeal, the request for an oral hearing and interim order was moot.


Dr. C. Sims Dentistry Professional Corporation v. Cooke, 2024 ONCA 388

[van Rensburg, Zarnett and George JJ.A.]

Counsel:

S. F. Gleave and C. Koblinksy, for the appellants

B. L. Yellin and B. Powell, for the respondent

Keywords: Contracts, Restrictive Covenants, Enforceability, Civil Code of Québec, S.Q. 1991, c. 64, Payette v. Guay inc., 2013 SCC 45, Elsley v. J.G. Collins Ins. Agencies Ltd. [1978] 2 S.C.R. 916, Tank Lining Corp. v. Dunlop Industrial Ltd. (1982), 40 O.R. (2d) 219, MEDIchair LP v. DME Medequip Inc., 2016 ONCA 168, Kerzner v. American Iron & Metal Company Inc., 2018 ONCA 989, Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, Doerner v. Bliss & Laughlin Industries Inc., [1980] 2 S.C.R. 865

facts:

Pursuant to an agreement of purchase and sale (the “Share Purchase Agreement”), Dr. S, through his corporation Dr. S Professional Dentistry Corporation, purchased all of the shares of the dentistry practice of the appellant Dr. C (the “Practice”) for $1.1 million in July 2017. Dr. C had operated the Practice in Hamilton, Ontario since 1987. He had relocated the Practice in 2005 to its current address in Hamilton (the “Premises”).

As part of the sale, Dr. C agreed to work in the Practice as an associate for a minimum period of two years, subject to termination of the association by either party on 90 days’ notice. Dr. C also agreed to a non-solicitation/non-competition provision (both as part of the Share Purchase Agreement and in the form of a stand-alone agreement on identical terms) that contained a clause prohibiting him from directly or indirectly engaging in the practice of dentistry, or permitting his name to be used in such a practice, for a period of five years following his association with the Practice within a radius of 15 km of the Premises (the “Non-competition Covenant”). Finally, the parties agreed that Dr. S would rent the Premises from Dr. C’s corporation, 6326471 Canada Inc., pursuant to a lease (the “Lease”), which contained an option to purchase and a right of first refusal in favour of Dr. S.

On December 19, 2019, Dr. S gave 90 days’ notice of termination of the parties’ association, and Dr. C stopped working in the Practice at that time. A few months later, through his counsel, Dr. C communicated his intention to work at a dental practice 3.3 km away from the Premises (the “Stonehill Practice”), taking the position that the Non-competition Covenant was unenforceable. He began working at that practice in November 2020. Dr. S objected and commenced an action in the Superior Court against Dr. C and the Stonehill Practice. After an interlocutory injunction was issued, Dr. C stopped working at the Stonehill Practice in April 2021. From August 2021 until April 2022, Dr. C worked in a dentistry practice in Simcoe.

The issues at trial concerned the enforceability of the Non-competition Covenant, the 90-day termination clause (and whether Dr. C’s association with the Practice was as an employee or dependent or independent contractor and had been effectively terminated), and the option to purchase and right of first refusal in the Lease. All of the issues were decided in Dr. S’s favour. Dr. C appealed.

issues:
  1. Did the trial judge err in reversing the burden of proof?
  2. Did the trial judge err in holding that the duration of the Non-competition Covenant was reasonable?
  3. Did the trial judge err in finding that the geographic scope of the Non-competition Covenant was reasonable?
holding:

Appeal dismissed.

reasoning:
  1. No.

The trial judge did not err in citing Payette as a relevant and binding authority. Payette has been followed by the Court in MEDIchair LP, where Feldman J.A., citing Payette, stated at para. 33 that, “courts will give more scrutiny to the reasonableness of a restrictive covenant in the employment context, while applying a presumption of validity to such clauses where they have been negotiated as part of the sale of a business”. The Court further iterated that the trial judge engaged in a comprehensive review of the reasonableness of the Non-competition Covenant, that did not depend for its determination on the burden of proof.

Parties to a commercial agreement for the purchase and sale of a business are best placed to determine what is reasonably required to protect the purchaser’s interest in the goodwill. This is consistent with statements that restrictive covenants in commercial transactions which are intended to protect a purchaser’s interest in the goodwill of the acquired business attract less scrutiny than restrictive covenants in employment contracts: see Shafron, at para. 23; Elsley, at p. 924.

Accordingly, the Court noted that the trial judge was correct to recognize the central importance of the commercial context for the Non-competition Covenant. Dr. C provided Dr. S with a valuation, which had been prepared for the benefit of prospective purchasers, that among other things, valued the goodwill of the Practice and anticipated a five-year restrictive covenant covering a reasonable radius. The parties’ letter of intent specified that there would be a restrictive covenant of five-years for a 15 km radius, and the specifics of the non-solicitation/non-competition obligations of Dr. C were set out in the Share Purchase Agreement and the standalone document he signed.

The trial judge also properly considered as part of the commercial context the fact that the parties were represented by legal counsel and had equal bargaining power when they negotiated the terms of the transaction, and the evidence of Dr. C’s solicitor that he had seen nothing wrong with the scope and duration of the Non-competition Covenant at the time the parties entered the transaction. In these circumstances, where the parties’ agreement is the best and most reliable expression of their joint intention, the Court stated that it made sense to treat the Non-competition Covenant as presumptively legal.

  1. No.

Although courts “regularly find” restrictive convents with a duration of five years to be reasonable, “[e]verything depends on the nature of the business, and each case must be assessed in light of its own circumstances”: Payette, at para. 64. The trial judge accepted Dr. S’ evidence that the five-year period reflected the reality that it takes several visits for a patient to build a trusting relationship with their dentist, and that for those who see their dentist annually, it will take a long time for the relationship to build.

Whether or not Dr. C expected to work in the Practice and to retire within three to five years, and whether or not Dr. S understood that this was his expectation, the deal that they concluded had not provided for any guaranteed period of association (as even the planned two-year period was subject to termination on notice) or for Dr. S to retire within a certain period of time. In any event, irrespective of Dr. C’s retirement or other plans, he had sold the Practice, including its goodwill, to Dr. S. The issue was the reasonableness of the Non-competition Covenant in protecting the business that had been sold from competition by Dr. C, both in his continuing to work as a dentist, and otherwise in engaging in activities that would trade on the goodwill of the business. The purpose of a restrictive covenant is to protect the goodwill of a business that is sold from being devalued by the vendor’s own actions – in essence to ensure that the vendor does not derogate from his grant. Goodwill encompasses not only the existing customer base but also the ability to attract new patients from within the area served by the business or its “marketplace”: see Tank Lining, at p. 226.

  1. No.

As a general rule, the territory to which a reasonable restrictive covenant applies is limited to that in which the business being sold carries on its trade or activities as of the date of the transaction: Payette, at para. 65.

The trial judge was required to determine whether the geographic scope of the Non-competition Covenant was reasonable, not whether it mapped exactly to the trading area that was described in the valuation. The valuation itself contemplated a five-year restrictive covenant over a “reasonable radius”. The Non-competition Covenant restricted where Dr. C could locate to practice dentistry. The Court noted that it is not uncommon for the territorial scope of such a restrictive covenant to be defined in terms of a radius, which reflected how far a customer might be willing to travel to access services. The trial judge noted that a 15 km radius had been considered appropriate in other cases involving dental practices, and that Dr. C had signed a restrictive covenant with a 15 km radius when he worked in the Simcoe practice. In finding the scope of the Non-competition Covenant to be reasonable, the trial judge observed that it was necessary to include Stoney Creek (which is part of Hamilton) and Ancaster, which were areas served by the Practice.

The Court also disagreed that the trial judge erred in finding that the 15 km radius was reasonable when it “swept in” the protection of Dr. S’ other businesses, including those he acquired after purchasing the Practice. In determining whether the geographic scope of the Non-competition Covenant was reasonable, the trial judge focused on the marketplace of the Practice that was sold, not on Dr. S’ other business interests.


Ding v. Chen, 2024 ONCA 395

[Zarnett, Coroza and Favreau JJ.A.]

Counsel:

No one appearing for the appellant

V. Pilnitz, for the respondent Y.X.D.

J. Hyndman, for the respondent assignees Toronto Employment & Social Services and the Ministry of Children, Community and Social Services

Keywords: Family Law, Child Support, Contempt, Civil Procedure

facts:

The appellant had two appeals scheduled before the panel on April 26, 2024. The first appeal was from an order dismissing his motion to change child support. The second appeal was from an order imposing penalties for contempt.

The appellant requested an adjournment the day before the hearing and did not appear on the appeals, advising that he was hospitalized and unable to attend by video.

At the hearing, the panel made an order requiring the appellant to serve and file, within seven days, evidence demonstrating that he was unable to attend the hearing because he was hospitalized. If he did not do so, the panel would decide the appeal based on the written materials.

The appellant did not comply with the Court’s order. The Court did not receive any evidence from the appellant that he was unable to attend the hearing due to hospitalization.

Both appeals were decided based on the written materials filed by the parties, including the materials filed by the appellant. After reviewing and considering the materials, the two appeals were dismissed.

issue:

Did the motion judge err in dismissing the motion to change and finding the appellant in contempt?

holding:

Appeals dismissed.

reasoning:

No.

The motion judge dismissed the motion to change because the appellant failed to provide the financial disclosure previously ordered by the court and had substantial outstanding unpaid support and costs obligations.

It was not an error for the motion judge to hear the motion in the appellant’s absence as the motion judge was satisfied that the appellant was properly served.

Furthermore, the appellant raised issues of procedural fairness, arguing that he did not have an opportunity to make submissions at the contempt and penalty hearings. However, the motion judge was satisfied that the appellant was properly served, and, in the circumstances, it was appropriate for to hear and consider the motions in the appellant’s absence.

The appellant had a history of failing to comply with court orders, failing to make support and cost payments, and failing to attend court proceedings that he initiated.


SHORT CIVIL DECISIONS

Naeem v. Bowmanville Lakebreeze West Village Ltd., 2024 ONCA 383

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

Counsel:

A. Lifshitz, for the appellant

J. D. McConville and R. Khemraj, for the respondent

Keywords: Contracts, Repudiation, Real Property, Agreements of Purchase and Sale of Land, Deposits, Forfeiture, Defences, Unconscionability, Equitable Remedies, Relief from Forfeiture, Shah v. Southdown Towns Ltd., 2017 ONSC 5391, Wang v. 2426483 Ontario Limited, 2020 ONSC 3368,  Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, Ching v. Pier 27 Toronto Inc., 2021 ONCA 551,  Azzarello v. Shawqi, 2019 ONCA 820, leave to appeal refused [2019] S.C.C.A. No. 521, Rahbar v. Parvizi, 2023 ONCA 522

ID Inc. v. Toronto Wholesale Produce Association, 2024 ONCA 381

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

Counsel:

J. Zibarras, R. MacGregor, and A. Cutinha, for the moving party (M54934)/responding party (M54984)

David E. Greenwood and Christopher McClelland, for the responding party (M54934)/moving party (M54984)

Keywords: Breach of Contract, Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 128

2137073 Ontario Inc. v. Furney, 2024 ONCA 392

[Roberts, Coroza and Gomery JJ.A.]

Counsel:

A.F. and M.F., acting in person

R. Atkinson, E. Bisceglia and J.D. Sobel, for the responding parties

Keywords: Civil Procedure, Appeals, Reconsideration, Orders, Variation, Setting Aside, Rules of Civil Procedure, rr. 2.1, 59.06

Byrd v. Stockey, 2024 ONCA 396

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

Counsel:

D.B., acting in person

S. Reddington, for the responding party/respondent

Keywords: Civil Procedure, Appeals, Orders, Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 7(5), Rules of Civil Procedure, rr. 37.14


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 morning.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of May 6, 2024.

Continue Reading

In Croke v. VuPoint System Ltd., the Court upheld the dismissal of a wrongful dismissal case on the basis that the employment contract had been frustrated. The defendant employer’s only customer was Bell Canada, and during COVID-19, the employer required internet and telephone line technicians to be vaccinated. The plaintiff refused to vaccinate and was terminated. The employer successfully argued that the vaccination policy was a “supervening event” that radically altered the contract, unforeseen at the time of contracting, and outside the employer’s control. On that basis, the contract was frustrated and the employer was excused from performing (and therefore excused from being liable for termination pay).

In Kolapully v. Myles, the plaintiff was injured by a TTC bus, leading to a lengthy legal battle. The TTC fought the case vigorously, arguing the plaintiff was a malingerer. The decision discusses the admissibility of expert evidence and the calculation of damages in light of collateral benefits.

In US Steel Canada Inc (Re), the Ontario Court of Appeal dismissed Stelco Inc.’s motion for leave to appeal an order enforcing a reconveyance agreement, affirming the lower court’s authority to impose specific performance and contractual terms under the CCAA without party consent.

7868073 Canada Ltd. v. 1841978 Ontario Inc. dealt with restrictive covenants and misappropriation of corporate opportunities. The clauses in question were not found void as being an unreasonable restraint of trade.

Other topics included summary judgment and the striking of pleadings for failure to comply with a production order and for being frivolous and vexatious.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Kolapully v. Myles, 2024 ONCA 350

Keywords: Contracts, Insurance, Motor Vehicle Accidents, Damages, Collateral Benefits, Statutory Accident Benefits, Deductibility, Double Recovery, Civil Procedure, Evidence, Admissibility, Expert Evidence, Damages, Costs, Insurance Act, R.S.O. 1990, c. I.8, s. 267.8, Ontario Evidence Act, S.O. 1990, c. E.23, s. 35, 52, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1), Statutory Accident Benefits Schedule, s. 35, 12(4)(c), Rules of Civil Procedure, r. 57.01, R. v. Mohan, [1994] 2 S.C.R. 9, White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, Bruff-Murphy v. Gunawardena, 2017 ONCA 502, R. v. J.(J.-L.), 2000 SCC 51, Frye v. United States, 293 F. 1013 (U.S. D.C. Ct. App., 1923),  Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (U.S. Cal., 1993), R. v. St. Amand, 2014 ONCJ 800, R. v. Munoz Hernandez, 2013 ONSC 4257, Mole and Mole v. Manwell, 2017 ONSC 3357,  Meade v. Hussein, 2021 ONSC 7850, Legree v. Origlieri, 2021 ONSC 7650,  Marcoccia v. Gill, 2007 CanLII 11322 (Ont. S.C.), Hornick v. Kochinsky, 2005 CanLII 13784 (Ont. S.C.), Gutfriend v. Case, 2022 BCSC 2055, Bolduc v. Stratton, 2022 BCSC 1168, R. v. Krause (1986), 54 C.R. (3d) 294 (S.C.C.), R. v. F.(C). 2017 ONCA 480, Walker v. Ritchie (2005), 197 O.A.C. 81 (C.A.), Cadieux v. Cloutier, 2018 ONCA 903, Meyer v. Bright (1993), 15 O.R. (3d) 129 (C.A.), Brown v. Bouwkamp (1976), 12 O.R., (2d) 33, Bannon v. McNeely, [1998] 38 O.R. (3d) 659 (C.A.), Gilbert v. South (2015), 2015 ONCA 712, Basandra v. Sforza (2016), 130 O.R. (3d) 466 (C.A.), and El-Khodr v. Lackie (2017), 139 O.R. (3d) 659, Gurniak v. Nordquist, 2003 SCC 59,  Brad-Jay Investments Ltd. v. Szijjarto, [2006] O.J. No. 5078 (C.A), leave to appeal refused, [2007] S.C.C.A. No. 92, Young v. Young, [1993] 4 S.C.R. 3, Akagi v. Synergy Group (2000) Inc., 2015 ONCA 771

2275518 Ontario Inc. v. The Toronto-Dominion Bank , 2024 ONCA 343

Keywords: Civil Procedure, Summary Judgment, Viva Voce Evidence, Third-Party Claims, Rules of Civil Procedure, r. 20.04(2.2), Hryniak v Mauldin, 2014 SCC 7, Ayr Farmers Mutual Insurance Company v Wright, 2016 ONCA 789, Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 SCR 27

Flight (Heritage Painters & Services) v. Bank of Nova Scotia , 2024 ONCA 370

Keywords: Bankruptcy and Insolvency, Civil Procedure, Striking Pleadings, Security for Costs, Frivolous and Vexatious Proceeding, Conversion, Breach of Contract, Negligence, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Rules of Civil Procedure, rr. 21.01(b), 21.01(3)(b), and 25.11, 61.06(1)(a) or (b), Yaiguaje v Chevron Corporation, 2017 ONCA 827, Heidari v Naghshbandi, 2020 ONCA 757, Schmidt v Toronto-Dominion Bank (1995), 24 OR (3d) 1 (CA)

Croke v. VuPoint System Ltd., 2024 ONCA 354

Keywords: Contracts, Employment, Wrongful Dismissal, Defences, Frustration, Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58, Fraser Health Authority v. Hospital Employees’ Union (Tracy London Termination), 2022 CanLII 91089 (B.C.L.A.), Cowie v. Great Blue Heron Charity Casino, 2011 ONSC 6357 (Div. Ct.), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2021 ONCA 201, Flieger v. New Brunswick, [1993] 2 S.C.R. 651, Munoz v. Sierra Systems Group Inc., 2016 BCCA 140, Cowie v. Great Blue Heron Charity Casino, 2011 ONSC 6357 (Div. Ct.)

U.S. Steel Canada Inc. (Re), 2024 ONCA 363

Keywords: Bankruptcy and Insolvency, Contracts, Real Property, Remedies, Specific Performance, Civil Procedure, Leave to Appeal, Companies’ Creditors Arrangement Act, RSC, 1985, c. C-36, Stelco Inc (Re) (2005), 75 OR (3d) 5 (CA), US Steel Canada Inc et al v The United Steel Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union et al, 2022 ONSC 6993, US Steel Canada Inc (Re), 2023 ONCA 569, Nortel Networks Corporation (Re), 2016 ONCA 332

7868073 Canada Ltd. v. 1841978 Ontario Inc., 2024 ONCA 371

Keywords: Contracts, Interpretation, Licenses, Restrictive Covenants, Non-Competition Agreements, Enforceability, Restraint of Trade, Indefinite Contracts, Termination, Corporations, Directors, Fiduciary Duties, Corporate Opportunities, Misappropriation, Civil Procedure, Costs, Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, Tank Lining Corp. v. Dunlop Industrial Ltd. (1982), 40 O.R. (2d) 219 (C.A.), Warner Brothers Pictures Inc. v. Nelson, [1936] 3 All E.R. 160 (K.B.), MEDIchair LP v. DME Medequip Inc., 2016 ONCA 168, Martin v. ConCreate USL Limited Partnership, 2013 ONCA 72, Elsley v. J.G. Collins Ins. Agencies Ltd., [1978] 2 S.C.R. 916, Payette v. Guay inc., 2013 SCC 45, M & P Drug Mart Inc. v. Norton, 2022 ONCA 398,  Mroz v. Mroz, 2015 ONCA 171, Conseil Scolaire Catholique Franco-Nord v. Nipissing Ouest (Municipalité), 2021 ONCA 544, Veolia ES Industrial Services Inc. v. Brulé, 2012 ONCA 173, leave to appeal refused, [2012] S.C.C.A. No. 229, GasTOPS Ltd. v. Forsyth, 2009 CanLII 66153 (Ont. S.C.), aff’d 2012 ONCA 134, Galambos v. Perez, 2009 SCC 48, Pizza Pizza Ltd. v. Gillespie (1990), 75 O.R. (2d) 225 (Gen. Div.), Can. Aero v. O’Malley, [1974] S.C.R. 592, John D. McCamus, The Law of Contracts, 3rd ed. (Toronto: Irwin Law, 2020)

Short Civil Decisions

Roe v. Roe, 2024 ONCA 349

Keywords: Wills and Estates, Costs, Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Algra v. Comrie Estate, 2023 ONCA 811

Mouralian v. Groleau, 2024 ONCA 342

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Equitable Remedies, Relief from Forfeiture, Civil Procedure, Appeals, Fresh Evidence, Stockloser v. Johnson, [1954] 1 Q.B. 476 (C.A.)

Kanata Utilities Ltd. v. 1414610 Ontario Inc. (MAG Eastwood Construction), 2024 ONCA 367

Keywords: Civil Procedure, Documentary Discovery, Orders, Enforcement, Striking Pleadings, Costs, Rules of Civil Procedure, r 30.08(2), Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310

Gray v. Gray, 2024 ONCA 375

Keywords: Wills and Estates, Estate Trustees, Removal, Trustee Act, R.S.O. 1990, c. T.23, s 38, Evidence Act, R.S.O. 1990, c. E.23, s 13, Westover Estate v. Jolicouer, 2024 ONCA 81

Bank of Nova Scotia v. Curtis, 2024 ONCA 374

Keywords: Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, RSO 1990, c C 43, s 7(5), Hililmount Capital Inc. v. Pizale, 2021 ONCA 36

Pyper v. Goble, 2024 ONCA 372

Keywords: Civil Procedure, Vexatious litigants, Courts of Justice Act, RSO 1990, c C 43, s 140


CIVIL DECISIONS

Kolapully v. Myles, 2024 ONCA 350

[Lauwers, van Rensburg and Thorburn JJ.A.]

Counsel:

C. Townsend and Max Luburic, for the appellants

M. Dahab and A. Kaur, for the respondent

J. Obagi and E. Quigley, for the intervener Ontario Trial Lawyers Association

J. Tausendfreund and D. Zuber, for the intervener Canadian Defence Lawyers

Keywords: Contracts, Insurance, Motor Vehicle Accidents, Damages, Collateral Benefits, Statutory Accident Benefits, Deductibility, Double Recovery, Civil Procedure, Evidence, Admissibility, Expert Evidence, Damages, Costs, Insurance Act, R.S.O. 1990, c. I.8, s. 267.8, Ontario Evidence Act, S.O. 1990, c. E.23, s. 35, 52, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1), Statutory Accident Benefits Schedule, s. 35, 12(4)(c), Rules of Civil Procedure, r. 57.01, R. v. Mohan, [1994] 2 S.C.R. 9, White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, Bruff-Murphy v. Gunawardena, 2017 ONCA 502, R. v. J.(J.-L.), 2000 SCC 51, Frye v. United States, 293 F. 1013 (U.S. D.C. Ct. App., 1923),  Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (U.S. Cal., 1993), R. v. St. Amand, 2014 ONCJ 800, R. v. Munoz Hernandez, 2013 ONSC 4257, Mole and Mole v. Manwell, 2017 ONSC 3357,  Meade v. Hussein, 2021 ONSC 7850, Legree v. Origlieri, 2021 ONSC 7650,  Marcoccia v. Gill, 2007 CanLII 11322 (Ont. S.C.), Hornick v. Kochinsky, 2005 CanLII 13784 (Ont. S.C.), Gutfriend v. Case, 2022 BCSC 2055, Bolduc v. Stratton, 2022 BCSC 1168, R. v. Krause (1986), 54 C.R. (3d) 294 (S.C.C.), R. v. F.(C). 2017 ONCA 480, Walker v. Ritchie (2005), 197 O.A.C. 81 (C.A.), Cadieux v. Cloutier, 2018 ONCA 903, Meyer v. Bright (1993), 15 O.R. (3d) 129 (C.A.), Brown v. Bouwkamp (1976), 12 O.R., (2d) 33, Bannon v. McNeely, [1998] 38 O.R. (3d) 659 (C.A.), Gilbert v. South (2015), 2015 ONCA 712, Basandra v. Sforza (2016), 130 O.R. (3d) 466 (C.A.), and El-Khodr v. Lackie (2017), 139 O.R. (3d) 659, Gurniak v. Nordquist, 2003 SCC 59,  Brad-Jay Investments Ltd. v. Szijjarto, [2006] O.J. No. 5078 (C.A), leave to appeal refused, [2007] S.C.C.A. No. 92, Young v. Young, [1993] 4 S.C.R. 3, Akagi v. Synergy Group (2000) Inc., 2015 ONCA 771

facts:

The respondent, S.K., was struck by a TTC bus while crossing the street at Ellesmere Road and Nielson Road in Toronto on March 6, 2012. The appellant, L.M., was driving the bus and is a TTC employee. K has sought relief in a number of forums over a lengthy period of time. All of her claims have been vigorously resisted by the TTC on its own behalf and for M. It appeared that the TTC considered K to be a malingerer and considered all the decisions to the contrary in the long litigation litany to be mistaken in whole or in part, including the jury verdict, the trial motions, and the costs decisions under appeal.

On December 3, 2013, K started an action for general and specific damages claiming that she suffered serious and permanent physical and psychological impairment. K also initiated a proceeding before the Licence Appeal Tribunal (“LAT”). In January 2018, the LAT found she was catastrophically impaired according to the Statutory Accident Benefits Schedule (the “SABS”). The TTC applied for reconsideration, which was denied. K applied for arbitration at the Financial Services Commission of Ontario. On March 9, 2018, Arbitrator Barrington found she was entitled to non-earner benefits under the SABS.

After a six-week trial in 2022, the jury awarded K $175,000 in non-pecuniary damages and $200,000 in damages for past loss of income. The jury apportioned the degree of negligence at 25% to K and 75% to the appellants. The trial judge determined that the amount K had received for non-earner benefits under the SABS – about $95,000 – was not to be deducted from the damages award for past income loss under s. 267.8 of the Insurance Act. The TTC appealed.

issues:
  1. Did the trial judge err in admitting the results of the Single Photon Emission Computed Tomography (“SPECT”) Scan?
  2. Did the trial judge err in refusing to allow the respondents to introduce the attendant care claims forms into evidence?
  3. Did the trial judge err in her jury instructions on causation and the calculation of damages?
  4. Are non-earner benefits deductible from an award for loss of income under s. 267.8 of the Insurance Act?
  5. Did the trial judge make errors in her costs award?
holding:

Appeal allowed, in part.

reasoning:
  1. No.

There are two steps in the test to admit expert evidence. The first is the threshold requirement, and the second engages the judge’s discretionary, gatekeeper function. The threshold requirement has four elements for admissibility: the evidence must be relevant; it must be necessary in assisting the trier of fact; no other evidentiary rule should apply to exclude it; and the expert must be properly qualified. At the second, gatekeeping step, the trial judge must weigh the potential risks and benefits of admitting the evidence in order to decide whether the potential benefits justify the potential harm to the trial process that might flow from the admission of the expert evidence. Daubert holds that the reliability of expert opinion premised on novel or contested science depends on the reliability of the underlying scientific methodology.  The Court adopted the Goudge factors as a useful framework for trial judges to use in assessing the reliability of expert opinions based on novel or contested science. However, scientific techniques that are commonly used and reliable enough for clinical purposes might nonetheless be treated as novel when used for forensic or evidentiary purposes.

The TTC’s expert, Dr. RY, admitted his lack of expertise and knowledge during cross-examination, leading the trial judge to find that his evidence should be given little weight. This would have affected both the threshold decision on admissibility and the weight the jury would have given to the SPECT scan evidence. The trial judge was clearly alive to her gatekeeping role and the applicable legal principles. She ultimately admitted Dr. S’s report into evidence and permitted Dr. M to speak to it but ordered the summary portion to be fully redacted. The trial judge distinguished Meade on several bases, most particularly on the academic support Dr. M provided for the use of SPECT scans as a diagnostic tool to confirm or to add information to a provisional diagnosis.

This was a discretionary decision by the trial judge that was adequately explained. It was plain from her reasons that the trial judge kept in mind the governing principles for the admission of contested science and the need to balance the prejudicial effect and probative value of the evidence. However, it was not to be interpreted as finding that SPECT scans are reliable in detecting traumatic brain injury; the admissibility and use of the evidence was determined by the trial judge applying the proper principles.

  1. No.

The attendant care forms were not relevant to a fact in issue. What was important was whether the attendant care claim was ultimately put to the jury. The claim was not pursued and the way the blank forms were completed and processed were not relevant. There was also no error in the trial judge’s conclusion that the forms were not relevant generally to K’s disability claim.

A matter is collateral where it is “not determinative of an issue arising in the pleadings or indictment or not relevant to the matters which must be proved for the determination of the case.” The trial judge’s decision not to allow the attendant care forms to be put to K and explored further in her evidence was a reasonable exercise of her discretion under the collateral facts rule. First, the evidence about how the forms were signed and used by someone in a fraud would have diverted the jury down an exercise far from the task before it. Second, the trial judge was well placed to assess the balance of probative value and prejudicial effect in view of her awareness of the other evidence that was to be adduced. Third, this evaluation was fair and accurate, since the TTC’s case included an attack on K’s credibility on the substantive evidence before the jury. Fourth, the exclusion of the attendant care forms did not deprive the TTC of its line of attack on K’s credibility or leave the jury with a distorted perception.

The jury was well equipped to make the credibility findings and knew its task. The trial judge did not err in the exercise of her discretion in refusing to admit the blank attendant care forms into evidence.

  1. No.

There was no error in trial judge’s instruction correcting the error of K’s counsel in referring to “material contribution” as the applicable test for causation. The charge directly addressed and corrected the erroneous statements that were put to the jury and clearly set out the proper law on causation. The fact that the TTC’s counsel accepted the proposed correction and did not request a re-charge reinforced its adequacy. The trial judge’s correction of the closing statement of K’s counsel that the calculation of non-pecuniary damages should be done on a per diem basis clearly identified the offending comments, explained why they were incorrect, and instructed the jury not to follow them.

  1. Yes.

The result in Walker was overruled by the court in Cadieux and was therefore not binding on the trial judge. The trial judge did not consider the important changes to s. 267(8) of the Insurance Act and the legislature’s introduction of silos into the text of s. 267(8), and the trial judge’s failure to consider this context led her into error. The Walker court found that non-earner benefits were not only unrelated to income loss but were in fact most akin to general damages, but this reasoning was in error, was rejected by the Cadieux court, and should not be followed. The trial judge erred in characterizing as mere obiter the court’s inclusion of non-earner benefits in the silo of income replacement benefits which are to be deducted from a tort award for loss of income. She noted correctly that Cadieux made no reference to Walker. However, the court accepted the inclusion of non-earner benefits in that silo as proposed in the appellant’s factum in Cadieux. The trial judge was required to deduct the amount that K had received for non-earner benefits under the SABS.

  1. No.

The governing test is that leave to appeal costs awards is exceptional and will not be granted “save in obvious cases where the party seeking leave convinces the court there are ‘strong grounds upon which the appellate court could find that the judge erred in exercising his discretion’.” The trial judge expressly considered the relevant r. 57.01 factors but held that they did not call for a reduction in the costs award. She was entitled to exercise her discretion not to reduce the award, in part because of the impact of the “fraud lens” on the length and complexity of the trial. There was ample basis to find that the TTC took the “fraud lens” view. The prerequisite for awarding costs of the LAT hearing is a reduction of damages flowing from the LAT disposition, not a deduction. It was open to the trial judge under s. 131(1) of the Courts of Justice Act to award “costs of and incidental to a proceeding”.

The trial judge made no error in concluding that K’s successful pursuit of the catastrophic impairment designation, which gave her access to funds for medical, rehabilitation, attendant care, and housekeeping costs, narrowed the scope of her tort action and reduced the amount of damages recoverable against the TTC. The deductibility of the non-earner benefits added to the force of this argument. It was open to the trial judge to order that the TTC pay K’s costs of the LAT hearing.


2275518 Ontario Inc. v. The Toronto-Dominion Bank, 2024 ONCA 343

[Fairburn A.C.J.O., Simmons J.A. and Daley J. (ad hoc)]

Counsel:

E. Karp and I. Literovich, for the appellants

M. J. van Zandvoort and J. Suttner, for the respondent

Keywords: Civil Procedure, Summary Judgment, Viva Voce Evidence, Third-Party Claims, Rules of Civil Procedure, r. 20.04(2.2), Hryniak v Mauldin, 2014 SCC 7, Ayr Farmers Mutual Insurance Company v Wright, 2016 ONCA 789, Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 SCR 27

facts:

This appeal was from a motion for summary judgment granted in favour of TD Bank against the appellants and the Guarantors who had defaulted on a loan. The Guarantors claimed their lawyer’s failure to properly register the bank’s security prevented TD from enforcing the guarantees. Despite extensive legal proceedings and a mini-trial featuring testimony from key parties in January 2023, the motion judge determined there was no genuine issue requiring a full trial and dismissed the misrepresentation and other defences. The judge also ruled that the third-party claim did not obstruct the summary judgment, leading to this appeal.

issues:
  1. Did the motion judge err by ordering oral evidence from a non-party, J.S, in violation of r. 20.04(2.2) of the Rules of Civil Procedure?
  2. In the alternative, did the motion judge err by making findings of fact and credibility relating to the appellants’ third-party claim against J.S, thereby creating a risk of inconsistent findings of fact and effectively granting partial summary judgment?
  3. In the further alternative, did the motion judge err by granting summary judgment in the main action prior to the determination of the third-party claim, thereby prejudicing the appellants’ interests?
holding:

Appeal dismissed.

reasoning:
  1. No.

The appellants argued that the motion judge erred by allowing a non-party, J.S, to testify during the mini-trial proceeding in violation of r. 20.04(2.2). The appellants submitted that a motion judge’s jurisdiction to order oral evidence on a mini-trial was limited to ordering evidence from only the parties themselves. They said that a mini-trial was not intended to be a trial that included a parade of witnesses testifying about multiple issues. The Court noted that r. 20.04(2.2) contained no limitation, such as the one advanced by the appellants, restricting the jurisdiction of the court to order evidence on a mini-trial from non-parties. On its face, the rule states that oral evidence can be “presented” by one or more parties. It does not state that evidence can only be given by parties. Furthermore, the modern approach to statutory interpretation supports that r. 20.04(2.2) permits oral evidence from non-parties if it aids in reaching a fair and just decision. Thus, the Court dismissed the first ground of appeal.

2. No.

The second ground of appeal challenged the decision to let J.S testify during the mini-trial, arguing it was inappropriate while a third-party proceeding against him was outstanding. The appellants contended that this could lead to inconsistent fact findings, particularly since the motion judge made conclusions that may have affected the third-party negligence claim against J.S without having all relevant evidence. The Court upheld the use of enhanced fact-finding processes, emphasizing the summary judgment’s role in promptly resolving creditor claims without genuine trial issues. The Court found that the negligence claim against J.S did not intersect materially with TD Bank’s claims, allowing for separate proceedings without conflicting outcomes.

3. No.

The Court affirmed that the motion judge correctly determined that it was just to grant summary judgment after a mini-trial, having fully considered the extensive evidence and complexities of the case. The trial, including all necessary witness testimony and examinations, was deemed efficient and appropriate. Furthermore, the appellants had ample opportunity to integrate their third-party claim into the main action for simultaneous resolution, but chose not to. Thus, their later objections to the process were dismissed, as they had previously declined to seek adjustments that could have addressed any procedural concerns.


Flight (Heritage Painters & Services) v. Bank of Nova Scotia, 2024 ONCA 370

[Gomery J.A. (Motions Judge)]

Counsel:

J. Wahba, for the moving party

T. Vasdani, for the responding party

J. Squire, for the third party

Keywords: Bankruptcy and Insolvency, Civil Procedure, Striking Pleadings, Security for Costs, Frivolous and Vexatious Proceeding, Conversion, Breach of Contract, Negligence, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Rules of Civil Procedure, rr. 21.01(b), 21.01(3)(b), and 25.11, 61.06(1)(a) or (b), Yaiguaje v Chevron Corporation, 2017 ONCA 827, Heidari v Naghshbandi, 2020 ONCA 757, Schmidt v Toronto-Dominion Bank (1995), 24 OR (3d) 1 (CA)

facts:

B.F sought to reinstate his lawsuit against the Bank of Nova Scotia, which was dismissed under rules 21.01(b), 21.01(3)(b), and 25.11 of the Rules of Civil Procedure by Koehnen J. His legal struggles involved several lawsuits related to funds misappropriated by his ex-spouse, J.L. B.F’s initial lawsuit against J.L was dismissed due to his status as an undischarged bankrupt. Subsequent actions included a dismissed claim against his bankruptcy trustee and an unresolved lawsuit where B.F alleged negligence by the trustee. Additionally, a default judgment B.F obtained in a trustee-initiated lawsuit was not enforceable without consent from the Court, and his attempt to enforce this judgment was later denied as the action was found time-barred. Finally, B.F initiated a lawsuit against the Bank of Nova Scotia, claiming damages for conversion, breach of contract, and negligence.

issues:

Should B.F be required to post security for its costs of the appeal?

holding:

Motion granted.

reasoning:

Yes.

Rule 61.06(1)(a) empowers the Court to order security for costs where there was good reason to believe that the appeal was frivolous and vexatious and that the appellant had insufficient assets in Ontario to pay the costs of the appeal.

The Court found that B.F’s appeal appeared to be frivolous and vexatious. B.F’s appeal had no merit. B.F attacked the motion judge’s findings without explaining in any meaningful way why they were wrong. He contended that, in declining to grant J.L any costs, the motion judge recognized that she “may well have engaged in inappropriate transactions”. But the question was not whether or not B.F could prove that J.L misappropriated funds but rather whether his action against the Bank based on that alleged misappropriation was time-barred. B.F argued that his appeal could succeed because the Bank had not abandoned its third-party claim against J.L. The Court found that the third-party claim did not amount to a concession that the action had any merit.

Second, B.F acknowledged that he did not have sufficient assets in Ontario to pay the Bank’s costs. Thus, the Court found that the Bank had met the criteria in r. 61.06(1)(a), and that it was just to order B.F to post security for costs. The Bank also sought an order for security for costs under r. 61.06(1)(b), which allowed the Court to order security for costs where such an order could be made under s. 56.01. However, given the Court’s conclusions under r. 61.06(1)(a), the Court concluded that it need not consider those submissions.


Croke v. VuPoint System Ltd., 2024 ONCA 354

[Pepall, Sossin and Dawe JJ.A.]

Counsel:

D. Share and N. Goldhawk, for the appellant

E. Campbell and C. Phelps, for the respondent

Keywords: Contracts, Employment, Wrongful Dismissal, Defences, Frustration, Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58, Fraser Health Authority v. Hospital Employees’ Union (Tracy London Termination), 2022 CanLII 91089 (B.C.L.A.), Cowie v. Great Blue Heron Charity Casino, 2011 ONSC 6357 (Div. Ct.), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2021 ONCA 201, Flieger v. New Brunswick, [1993] 2 S.C.R. 651, Munoz v. Sierra Systems Group Inc., 2016 BCCA 140, Cowie v. Great Blue Heron Charity Casino, 2011 ONSC 6357 (Div. Ct.)

facts:

The appellant, A.C., was employed by the respondent, VuPoint Systems Ltd. (“VuPoint”), as a technician. VuPoint is in the business of installing residential satellite TV and “smart home” internet services. Its main customers are Bell Canada and Bell ExpressVu (collectively, “Bell”), which provide more than 99% of VuPoint’s income. All of the appellant’s work was for Bell and it was undisputed that there was no other work VuPoint could provide to the appellant.

In 2021, Bell implemented a mandatory vaccination policy, following which VuPoint adopted its own vaccination policy. The appellant refused to comply with the VuPoint Policy by disclosing his vaccination status, which was deemed to mean that he was unvaccinated. Consequently, pursuant to the Bell Policy, he was not eligible to continue working as a technician providing services for Bell customers. VuPoint terminated the appellant’s employment, and he brought a wrongful dismissal action.

The motion judge dismissed the action, finding that the appellant’s employment contract was frustrated by the implementation of the Bell Policy. The appellant appealed that finding, arguing that the motion judge should not have applied the doctrine of frustration and, in the alternative, that the application of frustration in this case was incorrect.

issues:
  1. Did the motion judge err in law in holding that the employment contract was frustrated by the appellant’s voluntary conduct?
  2. Did the motion judge err in fact or in law in holding that the “supervening event” was not contemplated at the time of contracting?
  3. Did the motion judge err in law in finding that the “supervening event” was outside of VuPoint’s control?
  4. Did the motion judge err in finding that the appellant received a “clear and unambiguous” warning that his vaccination status would result in termination?
holding:

Appeal dismissed.

reasoning:
  1. No.

A party alleging frustration must establish that there was a “supervening event” that: (i) radically altered the contractual obligations; (ii) was not foreseeable and for which the contract does not contemplate; and (iii) has not been caused by the parties.

The appellant argued that the frustration in this case stemmed from his voluntary decision not to comply with the Policy, and therefore the third criteria above was not met. He relied on Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, where this court held that “a contract is not frustrated if the supervening event results from a voluntary act of one of the parties.” On this view, according to the appellant, an employee’s voluntary conduct should be dealt with through the law of just cause, whereby termination of employment is considered an extreme measure. The appellant asserted that applying frustration to his voluntary choice not to comply with the Policy would allow parties to tailor their behaviour, in effect, to induce frustration.

The motion judge, in applying Fraser Health Authority, did not specifically address whether the appellant’s voluntary choice to remain unvaccinated prevented the doctrine of frustration from being brought into play. However, in the Court’s view, it did not. This was not a case where the conduct of the appellant in fact frustrated the employment contract. Rather, the Court accepted, as did the motion judge, that the Bell Policy was the supervening event which frustrated the contract.

The letter informing VuPoint of the Bell Policy, dated September 8, 2021, made no reference to the conduct of employees, nor was the conduct of individual employees relevant for the application of the Bell Policy. Under the Bell Policy, it did not matter whether a person conducting field service work for Bell chose not to get vaccinated, could not obtain vaccinations in their region or could not get vaccinated due to medical or religious factors. The effect of the Bell Policy, from VuPoint’s position, was akin to that of a new regulatory requirement: absent vaccination, VuPoint’s employees were ineligible to work on Bell projects, which was nearly all of VuPoint’s work.

Whether an employee affected by such a supervening event can or will seek once again to become qualified (or, in this case, vaccinated), was not relevant to a threshold determination of whether the doctrine of frustration was applicable. This was because it is not the employee’s choice or conduct that renders them unable to work but, rather, the introduction of the new requirement that they do not satisfy. In other words, it is the new requirement that is the supervening event.

The evidence before the motion judge also indicated that the appellant’s termination may have been revoked had he responded that he intended to become vaccinated. VuPoint’s openness to allowing the appellant to rectify his ineligibility to continue to perform services for Bell did not lead to a finding that the frustration of the employment contract in this case was self-induced. However, that was clearly not the case here. The motion judge found that the appellant had not advised VuPoint that he intended to become vaccinated, despite his awareness that termination could result from non-compliance with the Policy. Furthermore, VuPoint had no knowledge of the timeline of the Bell Policy and there was no evidence in the record that the vaccination requirement would be simply a temporary or short-lived measure.

The Court held that it was not realistic to have expected VuPoint to have “bargained with Bell Canada for more discretion over matters of health and safety”, as the appellant argued. The Bell Policy was plainly motivated by a reasonable concern relating to the COVID-19 pandemic and that its customers may not want unvaccinated installation technicians entering their homes. The Court concluded that frustration was available to the motion judge, irrespective of the appellant’s conduct.

  1. No.

The motion judge found that the Bell Policy was unforeseen and not contemplated by either party when they entered into the appellant’s employment contract in 2014. The appellant argued that the motion judge erred in reaching this conclusion. Frustration cannot arise if the parties contemplated the supervening event at the time of contracting. In the appellant’s view, business exigencies are not normally considered unforeseen events giving rise to frustration, and the Bell Policy constituted such a business exigency brought about by Bell’s rights set out in the Supply Agreement between Bell and VuPoint.

Furthermore, the appellant argued that the Supply Agreement, signed prior to the announcement of the Bell Policy in 2021, contemplated that Bell could implement new “health and safety requirements.” As the supervening event in this case was Bell’s decision to change its health and safety requirements by requiring COVID-19 vaccination on the part of VuPoint employees conducting work for Bell, he argued that this was a foreseeable exercise of contractual power. As a result, according to the appellant, the doctrine of frustration did not apply.

In the Court’s view, the motion judge’s finding that the Bell Policy was an unforeseen circumstance was entitled to deference. The cases relied on by the appellant did not support the broad exception for business exigencies claimed by the appellant. In neither case was frustration raised by the parties, nor did the court in either case perform an analysis of the doctrine of frustration. Neither case has been relied on for this proposition, nor has either case been referred to in other authorities where the doctrine of frustration was raised and analysed.

Furthermore, the 2021 Supply Agreement was not relevant to the analysis of foreseeability. The focal point of the foreseeability analysis is 2014, when the employment contract was signed. The 2021 Supply Agreement was not in place at this time and there is nothing in the record establishing what agreement was in place between Bell and VuPoint in 2014.

The Court rejected the appellant’s argument with respect to the foreseeability of the Bell Policy and whether it was contemplated by the parties.

  1. No.

The appellant argued that the supervening event was not the Bell Policy but rather VuPoint’s choice to respond to the Bell Policy by terminating his employment. The Bell Policy required those performing work for Bell to be vaccinated, but it did not require the appellant to be terminated. Where the employer’s response is a dismissal, it should be subject to a just cause analysis. The appellant emphasized that VuPoint could have taken other non-disciplinary action, such as suspension without pay. It also could have given him notice of termination without cause and offered him an opportunity to mitigate his damages by becoming fully vaccinated, which would have enabled him to continue to work. The appellant’s argument was that, in effect, his termination was framed as frustration of contract after the fact but, in reality, was a termination for just cause. Further, according to the appellant, if the motion judge’s reasoning in this case was affirmed, employers would be able to use frustration as an alternative ground for any termination for cause related to ongoing misconduct, such as absences, tardiness, or negligence.

The Court rejected the appellant’s argument. Frustration of contract is a “no fault” termination of the contract. Where frustration is established, it has the effect of discharging the agreement, thereby releasing the parties from any further obligation to perform. It follows that remedies applicable to misconduct, such as progressive discipline, suspension or warnings, have no application in the context of frustration.

The possibility that an employee might be able to rectify the disruption to an employment contract caused by a supervening event is relevant to the analysis of whether the supervening event results in “a radical change to the fundamental obligations of the contract.” Similarly, determining how information about a disruption should be conveyed to an employee in the context of a particular supervening event, or how an employee should inform an employer of an intent to rectify their ineligibility to continue employment, if possible, also would relate to a determination of whether there has been a radical change. In the case at bar, however, these questions do not arise, as the appellant clearly was aware of the Bell Policy, refused to comply, knew that termination could result and never signaled any intent to become vaccinated.

Accordingly, the motion judge correctly identified the Bell Policy as the supervening event and concluded that the Policy was not foreseeable and radically altered the contractual obligations of the parties. There was no evidence in the motion record that VuPoint had any control over Bell’s decision to implement the Policy. The termination of the appellant’s employment was simply the inevitable result of this finding and of VuPoint’s corresponding entitlement to treat the contract as at an end.

  1. No.

The motion judge found that the appellant was provided with two weeks’ working notice and that he was therefore aware of the consequences of non-compliance with the Policy for at least that two-week period. The motion judge considered a letter from the appellant to his supervisor at VuPoint dated October 9, 2021, stating that the appellant would not disclose his vaccination status due to privacy laws and claiming that VuPoint was discriminating against him by terminating his employment for his decision to not become vaccinated. The motion judge found that this letter was a “clear and unequivocal” statement that the appellant would not comply with the Policy in the future.

The appellant argued that he did not receive an adequate warning that non-compliance with the Policy would result in termination. The appellant argued that the October 9th letter was written from this perspective – he believed his employment to be over, so he stood to lose little by committing to his position of non-compliance with respect to the Policy. According to the appellant, the letter was post-termination evidence that could not be used to determine whether there has been frustration.

In the Court’s view, the motion judge ascribed more significance than needed to the appellant’s October 9th letter in response to the notice of termination. Whether the appellant’s communication with VuPoint was clear or ambiguous, and indeed whether or not he communicated with VuPoint at all on this date, would have no bearing on the frustration analysis, which is to be conducted based on the information known at the point of termination: in this case, when the notice of termination letter was sent on September 28, 2021.

In any event, there was other evidence supporting that the appellant knew termination could result from non-compliance, such as the evidence that he was aware of the Policy and the need to be vaccinated, he knew there was no work he could perform without the vaccination, he began looking for other work after being advised of the Policy, and he specifically looked for a position that did not require a vaccine.

The Court was satisfied that when VuPoint sent its termination letter on September 28, 2021, it was entitled to conclude that there had been a radical alteration of its employment contract with the appellant. VuPoint’s Policy, which it implemented on September 10, 2021, required employees to advise VuPoint of their “vaccination status”. There was no evidence that the appellant ever told VuPoint that he was either fully or partially vaccinated, despite the fact that he was aware of the Policy. In short, this was not a situation where VuPoint knew that the appellant’s inability to work on Bell installation projects because he could not or would not provide proof of vaccination would be only temporary and relatively brief, and that the employment relationship would accordingly not be radically altered.


U.S. Steel Canada Inc. (Re), 2024 ONCA 363

[Roberts, Trotter and George JJ.A.]

Counsel:

G. R. Hall and J. D. Gage, for the appellant, Stelco Inc.

C. G. Smith, D. Ionis, K. B. Johnstone, R. Jaipargas and X. Yan, for the respondent, DGAP Investments Ltd.

Keywords: Bankruptcy and Insolvency, Contracts, Real Property, Remedies, Specific Performance, Civil Procedure, Leave to Appeal, Companies’ Creditors Arrangement Act, RSC, 1985, c. C-36, Stelco Inc (Re) (2005), 75 OR (3d) 5 (CA), US Steel Canada Inc et al v The United Steel Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union et al, 2022 ONSC 6993, US Steel Canada Inc (Re), 2023 ONCA 569, Nortel Networks Corporation (Re), 2016 ONCA 332

facts:

Stelco Inc, the moving party, sought leave to appeal the order issued on December 12, 2023, by the CCAA supervisory judge (“the motion judge”) under the Companies’ Creditors Arrangement Act (CCAA). This was part of a contentious legal battle between Stelco Inc. and DGAP Investments Ltd. concerning a reorganization agreement. Specifically, the conflict revolved around a parcel of land Stelco Inc was obligated to return to LandCo under a reconveyance agreement dated June 5, 2018, but failed to do so. The issue centered on the failure of Stelco Inc and LandCo to finalize an agreement on shared facilities and easements necessary for the property’s operation, as required by the reconveyance agreement. Consequently, DGAP could not complete its land purchase from LandCo. The motion judge partially granted DGAP’s motion, rejecting Stelco Inc’s proposed easements that were not compliant with the agreement and declined to enforce DGAP’s proposed easement form. However, the motion judge held that, absent an agreement by a stipulated date, the court retained the authority to impose terms and conditions to bring about the reconveyance of the DGAP Parcel. Stelco Inc sought leave to appeal.

issues:
  1. Did the motion judge err in concluding that the Superior Court had the power, in the circumstances of the case, to create and impose the shared facilities and/or reciprocal easement agreements required by s. 4.1(m) of the Reconveyance Agreement notwithstanding the absence of the moving party’s consent?
  2. Did the motion judge err in concluding that s. 4.1(m) of the Reconveyance Agreement precluded the moving party from negotiating terms in the shared facilities and/or reciprocal easement agreements required by s. 4.1(m) of the Reconveyance Agreement?
holding:

Motion dismissed.

reasoning:

1 & 2) No.

The Court noted that leave to appeal was granted sparingly in CCAA proceedings and only where there were serious and arguable grounds that were of real and significant interest to the parties. The criteria for granting leave include: (1) whether the proposed appeal was prima facie meritorious or frivolous; (2) whether the points on the proposed appeal were of significance to the practice; (3) whether the points on the proposed appeal were of significance to the action; and (4) whether the proposed appeal would unduly hinder the progress of the action.

The Court found that the proposed appeal was not prima facie meritorious. The Court ruled that the motion judge’s interpretation of the Reconveyance Agreement deserved deference, and the moving party had not demonstrated any plausible errors in the interpretation. On the contentious legal issue of whether a Court can impose an agreement on a non-consenting party under section 11 of the CCAA, the court referred to its prior decision in U.S. Steel Canada Inc. et al. v. The United Steel Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union et al, where it was decided that the Court could enforce specific performance of the Reconveyance Agreement regardless of unresolved issues under Article 4.1(m). It was also noted that during a previous motion, as cited in U.S. Steel Canada Inc. (Re), both parties conceded that a Commercial List judge could determine the necessary agreements if no mutual agreement was reached, indicating inconsistency in the moving party’s position opposing reconveyance.

Regarding the appeal’s relevance to legal practice, the Court found that while the interpretation of the Reconveyance Agreement was not of broad significance, the issue of a Court imposing contracts on non-consenting parties carried potential importance to the CCAA community. In terms of the appeal’s significance to the specific legal action, the Court recognized the relevance of the dispute to both parties involved but did not heavily emphasize this factor, as it was generally expected in appeal situations. The Court highlighted that further delays caused by the appeal were undesirable. The moving party had been in continuous breach of a previous court order from December 2022 to perform specific reconveyance obligations, which had been outstanding since 2018. The Court emphasized the urgency of concluding the transaction, as detailed delays were already affecting the proceedings adversely.


7868073 Canada Ltd. v. 1841978 Ontario Inc., 2024 ONCA 371

[Fairburn A.C.J.O., Simmons J.A. and Daley J. (ad hoc)]

Counsel:

M. Milne-Smith, for the appellant/respondent by way of cross-appeal(COA 22-CV-0384) and respondent/respondent by way of cross-appeal (COA 23 CV-0587), GS

H. Book and W. McLennan, for the respondents/respondents by way of cross-appeal (COA-22-CV-0384) and appellants/respondents by way of crossappeal (COA-23-CV-0587), Vacuum Metallizing Limited, RL, JS and 1841978 Ontario Limited

M. L. Whelton, E. Hiutin and M. Coker, for the respondents/appellants by way of cross-appeal (COA-22-CV-0384 & and COA 23 CV-0587), 7868073 Canada Ltd., 1841979 Ontario Limited, 1636833 Ontario Inc., Architectural Coatings Solutions Inc., Transreflect Inc., Low Risk Logistics Inc., IM and WK

Keywords: Contracts, Interpretation, Licenses, Restrictive Covenants, Non-Competition Agreements, Enforceability, Restraint of Trade, Indefinite Contracts, Termination, Corporations, Directors, Fiduciary Duties, Corporate Opportunities, Misappropriation, Civil Procedure, Costs, Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, Tank Lining Corp. v. Dunlop Industrial Ltd. (1982), 40 O.R. (2d) 219 (C.A.), Warner Brothers Pictures Inc. v. Nelson, [1936] 3 All E.R. 160 (K.B.), MEDIchair LP v. DME Medequip Inc., 2016 ONCA 168, Martin v. ConCreate USL Limited Partnership, 2013 ONCA 72, Elsley v. J.G. Collins Ins. Agencies Ltd., [1978] 2 S.C.R. 916, Payette v. Guay inc., 2013 SCC 45, M & P Drug Mart Inc. v. Norton, 2022 ONCA 398,  Mroz v. Mroz, 2015 ONCA 171, Conseil Scolaire Catholique Franco-Nord v. Nipissing Ouest (Municipalité), 2021 ONCA 544, Veolia ES Industrial Services Inc. v. Brulé, 2012 ONCA 173, leave to appeal refused, [2012] S.C.C.A. No. 229, GasTOPS Ltd. v. Forsyth, 2009 CanLII 66153 (Ont. S.C.), aff’d 2012 ONCA 134, Galambos v. Perez, 2009 SCC 48, Pizza Pizza Ltd. v. Gillespie (1990), 75 O.R. (2d) 225 (Gen. Div.), Can. Aero v. O’Malley, [1974] S.C.R. 592, John D. McCamus, The Law of Contracts, 3rd ed. (Toronto: Irwin Law, 2020)

facts:

This appeal concerned two actions tried together involving RL and his former business associates. Mr. L held himself out as an expert in powder-coating substrates. He started two powder-coating business ventures after being fired from Alliance Surface Finishing Inc and transferred the business of the second venture to a third venture. The first action involved a License Agreement granting certain “Licensed Rights” in perpetuity to L’s powder-coating knowledge to 7868073 Canada Ltd. L, along with investors IM and WK, formed, and through their respective holding companies, held equal shares in, 786, the Licensee under the License Agreement. 786 owned the shares of two other companies, collectively referred to as “ACS”. The venture failed. L then formed a new joint venture, Powder Coating Solutions Inc. (PCS), with JS and GS. ACS and three others commenced an action, alleging L breached the License Agreement and fiduciary duties. In a separate action, GS alleged L and JS misappropriated PCS’ powder-coating business.

In the ACS action, the trial judge rejected the claim that License Agreement was invalid and unenforceable or had been terminated and found that L breached fiduciary duties. She assessed profits to be disgorged of $2,501,986. The trial judge concluded that the GS action was moot and dismissed it.

issues:
  1. Did the trial judge err in holding that the License Agreement was valid and enforceable?
  2. Did the trial judge err in finding that the License Agreement was not terminated?
  3. Did the trial judge err in finding that L owed the ACS plaintiffs fiduciary duties after leaving ACS?
  4. Did the trial judge err in concluding that L breached his contractual and fiduciary obligations by misappropriating corporate opportunities of ACS?
  5. Should the ACS plaintiffs be granted leave to appeal the trial judge’s costs award, and, if leave was granted, should the caps on the costs liability of JS, Vacuum Metallizing and GS be set aside?
holding:

Appeal of the ACS judgment and cross-appeal dismissed. Appeal in the GS action dismissed.

reasoning:
  1. No.

First, the appellants argued that the trial judge erred in failing to consider whether the License Agreement was void ab initio as a restraint of trade. While there is no doubt that restraint of trade principles may apply to a restrictive covenant applicable after the termination of a licensing agreement, the appellants proffered no authority to support their argument that restraint of trade principles applied to the License Agreement prior to termination or cancellation in accordance with its terms.

The principle in Warner Brothers that “[w]here, as in the present contract, the covenants are all concerned with what is to happen whilst the defendant is employed by the plaintiffs and not thereafter, there is no room for the application of the doctrine of restraint of trade” was more appropriate to the question whether restraint of trade principles should apply during the currency of the License Agreement. The restrictions on competing prior to cancellation or termination of the License Agreement were neither unreasonable to him nor contrary to public policy. That such restrictions existed made sense in the context of the business arrangement that was negotiated. L participated in the negotiations, agreed to the terms of the License Agreement, and was not hampered by inequality of bargaining power.

Assuming, without deciding, that restraint of trade principles applied, the License Agreement was reasonable between the parties and with reference to the public interest. Notwithstanding its broad geographic scope and the limits it placed on selling, distributing and putting to use the Licensed Rights, the License Agreement was temporally limited in the sense that it was subject to cancellation and termination by the Licensor, and restricted L from competing with ACS only during its currency. It did not purport to restrain him from using the Licensed Rights after its termination and went no further than necessary to protect the legitimate interests of 786, the party in whose favour it was granted.

GS also argued the trial judge erred in determining that a worldwide license in perpetuity of knowledge or know-how was permissible. An appeal is not the forum for parties to raise issues not raised in the court below. The trial judge held that the License Agreement was not void as against perpetuity. The appellants did not challenge her finding in that respect on appeal nor did they challenge on appeal her finding that the License Agreement was not unconscionable.

  1. No.

The submissions focused on three emails/letters. Addressing an email from K to contacts and potential customers of ACS and ASF, as the trial judge observed, it was not open to ACS under the terms of the License Agreement to terminate it. In any event, the fact that ACS advised its contacts and potential customers that it agreed with L’s statement that he was no longer working with ACS did not demonstrate an intention to release him from his obligations under the License Agreement. This conclusion was also consistent with the fact that L continued to hold shares in 786 after his departure.

Mr. L and GS both purported to exercise the cancellation and termination rights contained in ss. 4 and 5 of the License Agreement in two other letters. The trial judge stated that no evidence was adduced to show that any of the events triggering termination had occurred and clarified that the appellants had not proven ACS was insolvent. There was no error in the trial judge’s conclusions that the License Agreement was not terminated by any of the three e-mails/letters.

  1. No.

The trial judge’s finding that L’s fiduciary duties continued after he left ACS was a finding of mixed fact and law and was entitled to deference on appeal. ACS’ agreement with ASF did not eliminate ACS’ vulnerability vis-à-vis L. ACS remained vulnerable to L and he continued to hold power and discretion in relation to ACS, because he took with him, and continued to exploit following his departure, the knowledge and expertise he licensed to 786.

Contrary to the appellants’ submissions, L’s situation was not similar to that of a departed employee whose relationship with his former employer has terminated. Following his departure from ACS, L continued to be bound by the terms of the License Agreement. His continuing fiduciary obligations flowed, in part, from the continuing existence of that agreement, the continued power and discretion he held vis-à-vis ACS and his former partners because of his knowledge and expertise, and their vulnerability to him as a result of that knowledge and expertise. The February 14, 2012 e-mail was not enough to demonstrate that L was relieved of his fiduciary duties was not enough to demonstrate that L was relieved of his fiduciary duties.

  1. No.

The trial judge found that L breached his contractual and fiduciary obligations by misappropriating corporate opportunities that belonged to ACS (the RM2 contract and sale of three powder-coating machines), for the benefit of PCS/Vacuum Metallizing. The trial judge relied on principles set out in Can. Aero v. O’Malley for her analysis. She also accepted and quoted from a passage of Can. Aero setting out the principle that determining whether there has been a breach of fiduciary duty is a case-specific exercise requiring consideration of a variety of potential factors. “Ripeness” of the opportunity is not determinative but only one potential factor.

The trial judge considered several factors to be important in determining whether there was a sufficient causal nexus between L’s breach of fiduciary duty and profits earned on the RM2 contract. The trial judge found as a fact that the RM2 opportunity (including the RM2 contract and the sale of a powder-coating machine to RM2) was not a fresh initiative for Mr. Langlois. It was L’s relationship with R, the principal of Inline Fiberglass, nurtured over the duration of L’s tenure at ACS, which led to the RM2 opportunity.

There was no error in the trial judge’s application of the law to the facts of this case. While the passage from Can. Aero specifies that a fiduciary is precluded from usurping “a maturing business opportunity”, it indicated as well that a fiduciary is precluded from taking advantage of an opportunity “where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired.” Significantly, in this case, the License Agreement had not been cancelled or terminated when the appellants took advantage of the RM2 opportunities.

  1. No.

The basis for capping the awards of costs was obvious from the judgment that was awarded and the trial judge’s endorsement on costs. The ACS plaintiffs did not meet the high threshold for obtaining leave to appeal a discretionary costs award.



SHORT CIVIL DECISIONS

Roe v. Roe, 2024 ONCA 349

[Tulloch C.J.O, Hourigan and Dawe JJ.A.]

Counsel:

B. Donavan and N. Kochman, for the moving party/responding party by way of cross-motion, RMR

N. Mukherjee and A. Rogerson, for the respondent/moving party by way of cross-motion, RSR

D. N. Delagran, for the responding party/responding party by way of cross motion, RCR

Keywords: Wills and Estates, Costs, Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Algra v. Comrie Estate, 2023 ONCA 811

Mouralian v. Groleau, 2024 ONCA 342

[Roberts, Trotter and George JJ.A.]

Counsel:

K. Coombs, for the appellant

M. Morden, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Equitable Remedies, Relief from Forfeiture, Civil Procedure, Appeals, Fresh Evidence, Stockloser v. Johnson, [1954] 1 Q.B. 476 (C.A.)

Kanata Utilities Ltd. v. 1414610 Ontario Inc. (MAG Eastwood Construction), 2024 ONCA 367

[Roberts, Trotter and George JJ.A.]

Counsel:

M. Diegel, for the appellants

M. Benson, for the respondent

Keywords: Civil Procedure, Documentary Discovery, Orders, Enforcement, Striking Pleadings, Costs, Rules of Civil Procedure, r 30.08(2), Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310

Gray v. Gray, 2024 ONCA 375

[Roberts, Trotter and George JJ.A.]

Counsel:

J. Vickery, for the appellant Rowan A. Gray

G. Dara, for the respondents LEG, LEG, AOG and KAG

Keywords: Wills and Estates, Estate Trustees, Removal, Trustee Act, R.S.O. 1990, c. T.23, s 38, Evidence Act, R.S.O. 1990, c. E.23, s 13, Westover Estate v. Jolicouer, 2024 ONCA 81

Bank of Nova Scotia v. Curtis, 2024 ONCA 374

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

Counsel:

G.C., acting in person

D. Rankin, for the responding party

Keywords: Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, RSO 1990, c C 43, s 7(5), Hililmount Capital Inc. v. Pizale, 2021 ONCA 36

Pyper v. Goble, 2024 ONCA 372

[Roberts, Trotter and George JJ.A.]

Counsel:

T.G., acting in person

K. Shimon and N. Platte, for the respondents

Keywords: Civil Procedure, Vexatious litigants, Courts of Justice Act, RSO 1990, c C 43, s 140


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