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Good afternoon.

Please find below our summaries of the civil decisions of the Court of Appeal for the week of November 2, 2020. There were quite a few substantive decisions released this week.

In Kreiser v Garber, the appeal arose in the context of a wrongly constructed dock that prevented a neighbour from using their boat. The Court of Appeal engaged in a lengthy discussion on the law of nuisance, the considerations for when to allow fresh evidence on appeal, the special considerations to be taken into account when a court issues a mandatory injunction, as well as a discussion on punitive damages.

Other topics covered this week included another round litigation in the Indian Residential School Settlement, vexatious litigants, the setting aside of an order granting summary judgement in the context of a shareholder’s agreement involving a right of first refusal, limitation periods, family law.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Visic v. Elia Associates Professional Corporation, 2020 ONCA 690

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Res Judicata, Issue Estoppel, Rules of Civil Procedure, Rule 2.1.01, Ontario Human Rights Code, R.S.O. 1990, c. H.19, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Khan v. Law Society of Ontario, 2020 ONCA 320, Khan v. Krylov & Company LLP, 2017 ONCA 625, P.Y. v. Catholic Children’s Aid Society of Toronto, 2020 ONCA 98, Penner v. Niagara Regional Police Services Board, 2013 SCC 19, Jones v. Tsige, 2012 ONCA 32, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Activa Trading Co. Ltd. v. Birchland Plywood-Veneer Limited, 2020 ONCA 93

Fontaine v. Canada (Attorney General), 2020 ONCA 688

Keywords: Civil Procedure, Class Proceedings, Indian Residential School System Settlement Agreement, Standard of Review, Baxter v. Canada (Attorney General) (2206) 83 OR (3d) 481 (SC), Onion Lake Cree Nation v Stick, 2020 SKCA 101, J.W. v Canada (attorney General), 2019 SCC 20, BG Checo Internation Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 SCR 12

Way v. Schembri, 2020 ONCA 691

Keywords: Contracts, Interpretation, Real Property, Joint Venture Agreements, Rights of First Refusal, Restrictive Covenants, Civil Procedure, Summary Judgment, Partial Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

B. v. Mississauga, 2020 ONCA 697

Keywords: Torts, Negligence, Civil Procedure, Limitation Periods, Discoverability, Capacity, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., ss. 4, 7, Rules of Civil Procedure, Rule 15.01(1), Canadian Charter of Rights and Freedoms, Ontario Human Rights Code, R.S.O. 1990, c. H.19, s. 15, Liu v. Wong, 2016 ONCA 366, Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447

Fettes v. Clark, 2020 ONCA 705

Keywords: Family Law, Spousal Support, Property, Unjust Enrichment, , Kerr v Baranow, 2011 SCC 10, Berta v Berta, 2015 ONCA 918, Djekic v Zai, 2015 ONCA 25

Mughal v. Bama Inc., 2020 ONCA 704

Keywords: Tort, Conspiracy to Commit Injury, Request to Adjourn, Ineffective Counsel, Canada Cement Lafarge v. British Columbia Lightweight Aggregate Ltd., [1983] 1 SCR 452, Agribands Purina Canada Inc. v. Kasameka, 2011 ONCA 0460

Krieser v. Garber, 2020 ONCA 699

Keywords: Torts, Nuisance, Remedies, Mandatory Injunctions, Punitive Damages, Civil Procedure, Offers to Settle, Costs, Appeals, Evidence, Fresh Evidence, Character Evidence, Courts of Justice Act, ss. 134(4), St. Lawrence Cement Inc v Barrette, [2008] 3 SCR 392, Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation), 2013 SCC 13, Tock v. St. John’s Metropolitan Area Board, [1987] 2 SCR 1181, Aventis Pharma S.A. v. Novopharm Ltd., 2005 FCA 390,  Sengmueller v. Sengmueller (1994), 111 DLR (4th) 19 (Ont. CA), Shelfer v. City of London Electric Lighting Co., [1895] 1 Ch. 287 (C.A.), Whiten v. Pilot Insurance Co., [2002] 1 SCR 595, Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, Alguire v. The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 0202, TWI Foods Inc. v. Just Energy Corp., 2012 ONCA 0150, Whitfield v. Whitfield, 2016 ONCA 0720, Young v. Young, [1993] 4 SCR 3

Short Civil Decisions

Mudronja v. Mudronja (Costs), 2020 ONCA 702

Keywords: Family Law, Costs, Reasonableness, Proportionality, Family Law Rules, O. Reg. 114/99, Rules 24(1) and 24(12), Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, s.1(1)


CIVIL DECISIONS

Visic v. Elia Associates Professional Corporation, 2020 ONCA 690

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

C. Du Vernet and C. McGoogan, for the appellant

M. A. Willis, for the respondent University of Windsor

Keywords: Civil Procedure, Striking Pleadings, Vexatious Litigants, Frivolous, Vexatious, Abuse of Process, Res Judicata, Issue Estoppel, Rules of Civil Procedure, Rule 2.1.01, Ontario Human Rights Code, R.S.O. 1990, c. H.19, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Khan v. Law Society of Ontario, 2020 ONCA 320, Khan v. Krylov & Company LLP, 2017 ONCA 625, P.Y. v. Catholic Children’s Aid Society of Toronto, 2020 ONCA 98, Penner v. Niagara Regional Police Services Board, 2013 SCC 19, Jones v. Tsige, 2012 ONCA 32, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Activa Trading Co. Ltd. v. Birchland Plywood-Veneer Limited, 2020 ONCA 93

facts:

The appellant sought an order requiring the University of Windsor to permanently delete all references to her “first” first year law school results and damages against the respondents of $500,000 for invasion of privacy, breach of fiduciary duty, breach of confidence, breach of contract, negligence, defamation, and infringement of the Ontario Human Rights Code. The respondents, Patricia Elia and Elia Associates Professional Corporation (the “Elia Respondents”), were the appellant’s articling principal and former employer, respectively.

The motion judge held that the appellant’s action against the University sought to re-litigate the same issues raised in an earlier action and in proceedings before the Human Rights Tribunal of Ontario (“HRTO”), both of which were dismissed. She noted that the HRTO declared the appellant to be a vexatious litigant and the Divisional Court dismissed appeals from these orders.

The motion judge dismissed the appellant’s action as against the University under Rule 2.1.01, but allowed the action to continue as against the Elia respondents because the appellant had never sued them in the Superior Court. The appellant appealed the motion judge’s order.

issues:
  1. Did the motion judge err in dismissing the appellant’s action as against the University under Rule 2.1.01?
holding:

Appeal dismissed.

reasoning:

No. The Court first looked at principles governing the application of Rule 2.1.01. The Rule allows a court to stay or dismiss a proceeding if it appears on its face to be frivolous, vexatious or otherwise an abuse of process. The Court stated that the rule may only be used in the clearest of cases where the abusive nature of the proceeding is apparent on the face of the pleading and there is a basis in the pleadings to support the resort to the attenuated process. The Court also emphasized that a motion under Rule 2.1.01 focuses on the pleadings and any submissions of the parties made under the rule. Additionally, the rule does not replace other rules to strike out actions or to deal with other procedural irregularities summarily. The Court also noted that a motion judge’s ruling under Rule 2.1.01 is a discretionary decision entitled to deference. Such a decision may be set aside only if the motion judge misdirected themselves or their decision was so clearly wrong as to amount to an injustice.

The Court held that the motion judge correctly identified the relevant legal principles under Rule 2.1.01 and that her discretionary decision to dismiss the action was entitled to appellate deference. The Court found that the appellant’s four grounds of appeal lacked merit.

First, the appellant asserted the statement of claim pled proper causes of action. The Court found that the motion judge, based on her review of the claim, was entitled to conclude that the action involved abusive re-litigation.

Second, the appellant asserted her claim did not seek to re-litigate the same factual circumstances that were dismissed in her court action in 2005 or in her application to the HRTO in 2008. The Court disagreed, finding that her action challenged the same conduct of the University that she had unsuccessfully challenged before.

Third, the appellant asserted that her claim for invasion of privacy rested on a new tort that the court first recognized in Jones v Tsige, after her previous proceedings were dismissed. In rejecting this argument, the motion judge noted that the Court in Jones did not recognize a new tort of invasion of privacy, rather it confirmed a cause of action that already existed at common law. She concluded that the appellant’s claim here was barred by the doctrine of cause of action estoppel. That doctrine prevents parties from re-litigating matters by advancing a point in subsequent proceedings which properly belonged to the subject of the previous litigation. The Court agreed with the motion judge’s reasoning and conclusion.

Fourth, the appellant asserted the motion judge erred in relying on abuse of process and cause of action estoppel under r. 2.1.01 because she said such a finding required evidence. The Court disagreed with this submission. The Court held that re-litigation of issues determined in a prior judicial proceeding is “a classic example of abuse of process” under Rule 2.1.01. In applying the rule, the motion judge was entitled to review reasons from other proceedings describing the appellant’s long history of litigation against the University involving the same issues. The Court saw no error in her approach or conclusion.


Fontaine v. Canada (Attorney General), 2020 ONCA 688

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

Counsel:

F.K. Brunning and M. Swinwood, for the appellants E.M., St. Anne’s IAP Claimant T-00185, St. Anne’s IAP Claimant S20774, and St. Anne’s IAP Claimant S-16753

C. Coughlan and B. Thompson, for the respondent Attorney General of Canada

S. Wuttke, for the respondent Assembly of First Nations

D. Schulze, for the respondent Independent Counsel

E. Merchant, for the respondent Merchant Law Group

E. Garfin, for the intervener Attorney General of Ontario

Keywords: Civil Procedure, Class Proceedings, Indian Residential School System Settlement Agreement, Standard of Review, Baxter v. Canada (Attorney General) (2206) 83 OR (3d) 481 (SC), Onion Lake Cree Nation v Stick, 2020 SKCA 101, J.W. v Canada (attorney General), 2019 SCC 20, BG Checo Internation Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 SCR 12

facts:

The appellants are class members of the Indian Residential School Settlement Agreement (“IRSSA”), a national class action settlement agreed to settle the myriad of claims that arose from the residential school system. The IRSSA broke the national class down into various sub-classes, based on the province in which any given complainant lived at the time of the settlement, so as to divide jurisdiction between the provinces and territories party to the settlement. The IRSSA created two different mechanisms by which a complainant can be compensated, one of which, the Independent Assessment Process (“IAP”), is under consideration in this appeal. As part of the administration of the IRSSA, nine different superior courts across Canada approved the IRSSA, and in doing so, also approved a Court Administration Protocol (“CAP”) that was to govern the process for any Request for Directions (“RFD”) by a party.

The CAP provides that in each jurisdiction, a judge of the superior court will serve as the Supervising Judge for that jurisdiction, and of the nine Supervising Judges, two will become Administrative Judges (one for the Eastern parties and one for the Western Parties). The CAP is used to determine which Supervising Judge has jurisdiction to hear an RFD matter. Paragraph 5 of the CAP provides:

  1. Should a hearing be required, the Administrative Judges will make such direction and determine the jurisdiction in which the hearing should be held. In making this determination the Administrative Judges will be guided by the following principles:

(a) Where the issue(s) involve relief for a particular class member or particular class, the hearing will be directed to the supervising court with jurisdiction over the class member or class pursuant to the terms of the Agreement and the Approval Orders.

(b) Where the issue(s) affect more than one jurisdiction, but not all, the hearing will be directed to a supervising court in one of the affected jurisdictions.

(c) Where the issue(s) affect all jurisdictions, the hearing may be directed to any court supervising the Agreement. …

(f) In applying these principles, the Administrative Judges may also be guided by any other consideration that he or she deems to be appropriate in the circumstances.

Since the IRSSA was signed, the appellants have filed two RFDs to require the respondent to produce various documents. The appellants were successful on both RFDs, but the respondent had still not produced the necessary documents. On the previous RFDs, the Eastern and Administrative judge (from Ontario) determined that the Supervising Judge of Ontario (himself) would have jurisdiction.

The appellants filed a third RFD to seek compliance with the first two. In this case, the Supervising Judge (still the same person who was also the Eastern Administrative Judge) recused himself from hearing the RFD. The Eastern Administrative Judge assigned the RFD to the Supervising Judge of British Columbia, who is also the Western Administrative Judge. The Eastern Administrative Judge relied on paragraph 5(f) of the CAP to support his assignment of the case and cited judicial economy and the benefit of having an expert (the Western Administrative Judge) hear the RFD as the residual considerations that necessitated the assignment.

The appellants appeal the judge’s order to assign the case to the British Columbia Supervising Judge, asserting that the judge should have referred it to the Ontario Superior Court of Justice, where, because of his recusal as the Supervising Judge, the RFD would have been heard by a different judge of the court.

issues:
  1. What is the standard of review?
  2. Did the Eastern Administrative Judge err in referring the RFD to the British Columbia Supervising Judge?
holding:

Appeal allowed.

reasoning:
  1. What is the Standard of Review?

Correctness. Before addressing the issue, the Court of Appeal first discussed the standard of review to be applied on the appeal. The Court of Appeal held that the correct standard of review correctness and gave several reasons to support this holding. First, the CAP is an appendix to a court order. When interpreting a court order, courts treat this much the same as interpreting a statute. Interpreting the CAP therefore involves a question of law and so correctness is the standard of review. Secondly, the judge’s interpretation of the CAP and decision to refer the RFD is a question of jurisdiction, which is also reviewable on a correctness standard.

  1. Did the Eastern Administrative Judge err in referring the RFD?

Yes.

The appeal turned on the interpretation of paragraph 5 of the CAP. In his decision, the Eastern Administrative Judge relied almost exclusively on paragraph 5(f). While the Court of Appeal found that the considerations he cited under 5(f) were important, 5(f) was not applicable to this appeal and thus the Eastern Administrative Judge erred.

The Court of Appeal then went on to interpret paragraph 5 in the way it should have been. The Court looked at paragraph 5 as a whole and found that paragraph 5(a) was mandatory, while the others were permissive. Particularly, 5(a) says “relief for a particular class member or particular class, the hearing will be directed to the supervising court with jurisdiction over the class member or class pursuant to the terms of the Agreement and the Approval Orders” (emphasis added). In contrast, the other parts of paragraph 5 use the word “may”, which is permissive and discretionary. The other paragraphs also refer to “a supervising court” rather than “the supervising court”, which again highlights the mandatory nature of 5(a).

The appellants are all residents of Ontario, and their claims related only to one Residential School which was in Ontario. Thus, the appellants RFD fell squarely within the terms of paragraph 5(a), which mandated that the Ontario Superior Court of Justice should hear the RFD. By referring to 5(f), the Eastern Administrative Judge incorrectly interpreted 5(a) and used permissive language to override mandatory language. This was an error of law and so the Court of Appeal allowed the appeal.

Before disposing of the appeal, the Court of Appeal went on to consider and dismiss some of the respondent’s submissions in obiter. The respondent argued that: i) paragraph 5 of the CAP contains guiding principles, not mandatory rules; ii) that the French translation of the CAP makes 5(f) more than permissive or discretionary; iii) that paragraph 7 of the CAP is entirely determinative of the appeal; and iv) that the appellants attorned to the jurisdiction of the British Columbia Supervising Judge by appearing before it on a different RFD. The Court of Appeal dismissed all of these arguments, and having already decided that the Eastern Administrative Judge committed an error of law, allowed the appeal.


Way v. Schembri, 2020 ONCA 691

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

Counsel:

J. C. Lisus, A.J. Winton and N. Holmberg, for the appellants

J.M. Wortzman and S. Malthouse, for the respondents

Keywords:Contracts, Interpretation, Real Property, Joint Venture Agreements, Rights of First Refusal, Restrictive Covenants, Civil Procedure, Summary Judgment, Partial Summary Judgment, Hryniak v. Mauldin, 2014 SCC 7, Butera v. Chown, Cairns LLP, 2017 ONCA 783, Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

The parties to this action are both real estate developers. In 2007, they entered into a joint venture agreement. Shortly after, they decided to form a corporation to pursue other development opportunities. In 2008, they executed a shareholders’ agreement for the newly formed corporation, with each of their own numbered companies as shareholders.

The shareholders’ agreement contained a clause, which was under the heading “Non-Competition”, but in substance was essentially a right of first refusal. The clause stipulated that the respondent shareholder was obligated to present any development opportunities to the newly formed corporation and the appellant shareholder first. If the corporation and the appellant shareholder did not decide to pursue the opportunity, then the respondent shareholder would be free to pursue it individually.

The appellant commenced an action in 2012 based on a claim for damages arising out of an alleged breach of this clause. It is also worth noting that the appellants’ action was a companion action to a broader action, and that the parties have been engaged in ongoing litigation since 2010.

Nevertheless, in 2017, the respondents brought a motion for summary judgment to dismiss the appellants’ action on the ground that the clause was an unenforceable restrictive covenant. The motion judge agreed with this submission, and granted summary judgment dismissing the action. The appellants appealed this judgment.

issues:
  1. Did the motion judge err in granting summary judgment?
holding:

Appeal allowed.

reasoning:
  1. Did the motion judge err in granting summary judgment?

Yes. The Court began its analysis by noting that it seemed unusual that a motion judge would consider summary judgment in one action that has already been ordered to be tried together with another action, along with an order for common examinations for discovery. The reality that the facts underlying the two actions were inextricably intertwined made the decision even more unusual. In that sense, the Court was puzzled why this issue was dealt with separately from the other action in the first place, as it could have easily been addressed within the broader action.

The Court agreed with the appellants’ submission that the motion judge effectively granted partial summary judgment. While the judgment technically disposed of the appellants’ action in its entirety, the close relationship with the companion action remained to blur the lines between the two. The Court emphasized that partial summary judgement should only be used sparingly, due to the risk that it might actually further complicate matters instead of simplifying them, contrary to both its intended purpose and the Hryniak objective (Butera v. Chown, Cairns LLP, 2017 ONCA 783; Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369).

In short, this case carried the risk that the conclusions ultimately reached by the trial judge could conflict with the result reached by the motion judge.

Aside from the issue of partial summary judgment, the Court also noted that the motion judge’s findings demonstrated that summary judgment was never appropriate in the circumstances. Based on the motion judge’s findings, a detailed collection of facts producing a solid foundation for analysis was necessary. The motion judge neglected to collect such evidence in an effort to undertake such an analysis. The motion judge should have interpreted the contract in a manner consistent with the surrounding circumstances known to the parties at the time of the contract’s formation (Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53).

Further, the motion judge erred in rejecting the legitimacy of the clause as a mere “agreement to agree”. The Court noted that rights of first refusal always contemplate the need for further agreement, and that acknowledging this need does not invalidate the clause. This would suggest that the motion judge misunderstood the proper application of the “agreement to agree” principle.

Due to the Court’s conclusion that the order granting summary judgment should be set aside and the action reinstated, the Court declined to make any findings or observations as to the actual enforceability of the clause in question.


B. v. Mississauga, 2020 ONCA 697

[Roberts, Trotter and Thornburn JJ.A.]

Counsel:

M. H. B., acting in person

R. Ryan, for the respondent

Keywords: Torts, Negligence, Civil Procedure, Limitation Periods, Discoverability, Capacity, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., ss. 4, 7, Rules of Civil Procedure, Rule 15.01(1), Canadian Charter of Rights and Freedoms, Ontario Human Rights Code, R.S.O. 1990, c. H.19, s. 15, Liu v. Wong, 2016 ONCA 366, Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447

facts:

In May 2013, the appellant fell off his bicycle and had a broken finger and superficial facial abrasions as a result. He submitted a Claim Report to the respondent seeking compensation and recommended remediation of the hazard that led to his fall. On the form that he completed, he was warned about the limitation period. The appellant later refused to cooperate with the adjuster assigned to investigate the claim. The appellant was then warned in a letter on May 5, 2014, that his file would be closed if he did not respond and was advised of the limitation period. There was no further communication and the file was closed in June of 2014.

In September 2017, he issued a claim against the respondent, seeking damages. The respondent moved for summary judgement, alleging that the two-year limitation period had expired. The appellant advanced two arguments on the summary judgement motion: (1) he did not discover the extent of his injuries until years after the accident; and (2) he lacked the capacity to commence litigation within the limitation period due to a disability. The motion judge rejected the appellant’s arguments and determined that there was no genuine issue for trial. The motion was granted to dismiss the appellant’s action, and the appellant appealed.

issues:
  1. Did the motion judge err in finding that the subsequent discovery of the severity of the injuries did not extend the limitation period?
  2. Did the motion judge err in finding that the appellant had capacity?
  3. Was the motion judge biased?
  4. Was there a breach of Rule 15.01(1)?
  5. Were the appellant’s rights breached under s. 15 of the Charter and the Ontario Human Rights Code?
  6. Should the appellant’s request to anonymize the proceedings be granted?
holding:

Appeal dismissed.

reasoning:
  1. Did the motion judge err in finding that the subsequent discovery of the severity of the appellant’s injuries did not extend the limitation period?

No. The Court found that the motion judge made no error. The Court emphasized that knowledge of the extent of the damages is not necessary to trigger the commencement of the litigation period. That the appellant’s injuries appeared to have worsened did not extend the limitation period. The Court dismissed this ground of appeal.

  1. Did the motion judge err in finding that the appellant had capacity?

No. The appellant claimed that he lacked the capacity to commence an action because he was “under a disability.” The motion judge accepted that, while the appellant had proffered evidence of a mental illness, there was no evidence that it rose to the level of incapacity for the purposes of s. 7 of the Limitations Act. The Court found that the motion judge correctly applied s. 7, as she stated that a plaintiff is presumed to have been capable of commencing a proceeding, unless the contrary is proved on a balance of probabilities. The motion judge found that it was not proved in this case and the Court dismissed this ground of appeal.

  1. Was the motion judge biased?

No. The appellant submitted that the motion judge was not interested in hearing him and addressed him in a rude manner. According to the appellant, after reading the report from one of his doctors, the motion judge looked at him and, in a harsh tone, said, “you’re fine.” The Court found that there was no merit to the submission that the motion judge was biased. The Court stated that he should have ordered the transcript and not simply relied on his own assessment of what happened. The Court also held that even if the appellant’s description of what happened could be taken at face value, it did not establish bias. The Court dismissed this ground of appeal.

  1. Was there a breach of Rule 15.01(1)?

No. The appellant contended that, being a person under disability, he was entitled to be represented by counsel. The Court noted that the motion judge found that the appellant was able to represent himself in court. Moreover, the issue was not raised with the motion judge, or any of the other judges before whom the motion was spoken to in the eight-month period between the service of the summary judgment motion and the day of the hearing. The Court rejected this ground of appeal.

  1. Were the appellant’s rights breached under s. 15 of the Charter and the Ontario Human Rights Code?

No. The Court found that the appellant had failed to establish any factual basis for his submission that his rights were infringed as a result of discrimination based on disability. The Court refused to give effect to this ground of appeal.

  1. Should the appellant’s request to anonymize the proceedings be granted?

No. The Court found that there was no legal basis to amend the title of the proceedings in the manner that the appellant requested.


Fettes v. Clark, 2020 ONCA 705

[Roberts, Trotter and Thorburn JJ.A.]

Counsel:

A. J. Lyons, for the appellant

T. Peters, for the respondent

Keywords: Family Law, Spousal Support, Property, Unjust Enrichment, , Kerr v Baranow, 2011 SCC 10, Berta v Berta, 2015 ONCA 918, Djekic v Zai, 2015 ONCA 25

facts:

This dispute arose following the breakdown of the parties’ seventeen year common-law relationship. The trial judge ordered that the appellant pay the respondent, his former common-law spouse, $75,000 plus indefinite monthly spousal support of $561. The appellant appealed.

issues:

(1) Did the trial judge err by granting the respondent’s unjust enrichment claim?
(2) Did the trial judge err by awarding the respondent indefinite spousal support?

holding:

Appeal dismissed.

reasoning:

(1) No. The trial judge’s determination of these issues was highly fact-specific and therefore attracted considerable appellate deference absent error. The Court of Appeal saw no error that would have warranted appellate intervention, and the Court’s role was not to retry the case.

The trial judge thoroughly analyzed the details of the parties’ 17-year relationship and lifestyle and, in particular, their respective contributions to the acquisition, construction and day-to-day maintenance of their home. She also referenced and correctly applied the test for unjust enrichment as set out by the Supreme Court in Kerr v Baranow, and after careful consideration of each element found the respondent’s claim was made out. In her conclusion, the trial judge set out the benefits conferred by the respondent’s efforts.

The trial judge further clarified that the respondent was not entitled to compensation for the usual daily household chores she may have had more time than the appellant to do. As a result, she awarded the respondent “her value received money damages for her contribution toward the acquisition, improvements and renovations of the five-acre neglected property that was purchased by [the appellant].” The trial judge was also at liberty to not accept the respondent’s expert evidence regarding the value his gardening work added to the property.

The trial judge was not required to undertake a minute appraisal of the value of the respondent’s interest but did the best she could on the record before her. As her result was fair and reasonable, there was no basis for the Court of Appeal to intervene.

(2) No. The Court found that the trial judge did not misapprehend the respondent’s evidence regarding her earning capacity or her need for an indefinite period of spousal support. In the alternative, the appellant argued the respondent should have received transitional spousal support for two years in the monthly amount of $335. This was also rejected.

The trial judge clearly determined that indefinite spousal support, rather than transitional support, was appropriate in the circumstances given the respondent’s age, income potential, and duration of the relationship. She also included in her order a provision for annual financial disclosure, and the order for indefinite support was subject to variation based on a material change in either party’s circumstances. Therefore, the trial judge’s decision was reasonable.


Mughal v. Bama Inc., 2020 ONCA 704

[Roberts, Trotter and Thorburn JJ.A.]

Counsel:

J. Shulman, for the appellant, M. A. K.

J. S. Contini, for the respondent, N. A. M.

Keywords: Tort, Conspiracy to Commit Injury, Request to Adjourn, Ineffective Counsel, Canada Cement Lafarge v. British Columbia Lightweight Aggregate Ltd., [1983] 1 SCR 452, Agribands Purina Canada Inc. v. Kasameka, 2011 ONCA 0460

facts:

The appellant was a business partner with Mr. Q, a friend of the respondent. The respondent and Mr. Q renewed their acquaintance and Mr. Q convinced the respondent to invest the whole of his life savings into Bama Inc. Mr. Q said that Bama Inc. was a very successful electrical supply company, but in reality, it was nothing more than a shell company.  Mr. Q and the appellant were directors of Bama Inc.

Over the next year or so, the respondent invested over $200,000 of his savings and some borrowed money as well into Bama Inc. on the basis of Mr. Q’s fraudulent representations, as well as fraudulent claims on Bama Inc.’s website. The appellant was heavily involved in setting up and running the website.

The vast majority of the respondent’s funds that were invested in Bama Inc. were in fact transferred into ET Zone Supply Inc., a struggling business in which Mr. Q was heavily involved.

Mr. Q, Bama Inc. and the appellant were all found liable at trial for conspiracy to cause economic injury to the respondent. The appellant appeals this decision.

issues:
  1. Did the trial judge err in finding the appellant committed the tort of conspiracy to injure by applying the wrong test and misapprehending the evidence?
  2. Did the trial judge err in awarding substantial indemnity costs against the appellant?
holding:

Appeal dismissed.

reasoning:

Before addressing the issues on appeal, the Court of Appeal considered the appellant’s request to adjourn the appeal. Mr. Q was also appealing the judgment against him and the appellant submitted that a matter in that appeal could be relevant to his appeal. He also submitted that he was considered raising an ineffective counsel argument on appeal. The Court of Appeal was given no particulars of what this matter in Mr. Q’s appeal was, and was not given a reason for why it was never raised earlier. There was no mention of the ineffective counsel argument in any appeal notices nor any evidentiary background to support it. Further, the Court found the respondent would suffer non-compensable prejudice if the adjournment was granted and so it refused the adjournment.

  1. No.

The trial judge cited the appropriate test for conspiracy to injure from Canada Cement. The tort of conspiracy to injure is made out where:

(1) Whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants’ conduct is to cause injury to the plaintiff; or

(2) Where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result in loss to the plaintiff.

For the second factor, a judge need not establish predominant purpose, but rather, constructive intent can be derived from what the defendants should have known would ensue and that damage would be suffered.

While the appellant did not personally make any specific fraudulent representations to the appellant, nor was he present for any of the misrepresentations, the trial judge found that he was nevertheless a party to the conspiracy. By creating the website and bank accounts for Bama Inc., the appellant created the necessary corporate presence to further the fraud and to create the false impression that Bama was a real, successful company.

The Court of Appeal found that the evidentiary record amply supported the trial judge’s conclusions on the appellant’s involvement in the conspiracy and dismissed the appeal.

2. No.

The appellant submitted that the trial judge erred in awarding substantial indemnity costs against him based on civil fraud, when the trial judge found that he had not committed fraud. While the appellant was not found liable for civil fraud, deceit or conversion, he was found liable for his fraudulent behaviour in committing the conspiracy to cause the respondent economic injury, and this is what the trial judge was referring to.

Costs decisions are to be accorded deference, and in light of the egregious conduct of the appellant and Mr. Q, there was no basis on which to overturn the costs award.


Krieser v. Garber, 2020 ONCA 699

[Doherty, Hoy and Jamal JJ.A.]

Counsel:

P.W. Kryworuk and J.R.W. Damstra, for the appellants M.N and Nealon Wood Products Ltd.

A.I Schein and W.E. Abrams, for the appellants A.G., M.G and S.G.

K. Prehogan and L. Boritz, for the respondent

Keywords: Torts, Nuisance, Remedies, Mandatory Injunctions, Punitive Damages, Civil Procedure, Offers to Settle, Costs, Appeals, Evidence, Fresh Evidence, Character Evidence, Courts of Justice Act, ss. 134(4), St. Lawrence Cement Inc v Barrette, [2008] 3 SCR 392, Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation), 2013 SCC 13, Tock v. St. John’s Metropolitan Area Board, [1987] 2 SCR 1181, Aventis Pharma S.A. v. Novopharm Ltd., 2005 FCA 390,  Sengmueller v. Sengmueller (1994), 111 DLR (4th) 19 (Ont. CA), Shelfer v. City of London Electric Lighting Co., [1895] 1 Ch. 287 (C.A.), Whiten v. Pilot Insurance Co., [2002] 1 SCR 595, Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, Alguire v. The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 0202, TWI Foods Inc. v. Just Energy Corp., 2012 ONCA 0150, Whitfield v. Whitfield, 2016 ONCA 0720, Young v. Young, [1993] 4 SCR 3

facts:

This appeal arose in the context of an improperly built dock on a waterfront property. There are two appellants, the owner of the property who contracted for the dock to be built (the “Owner Appellant”) and the contractor who built the dock (the “Contractor Appellant”). In the spring of 2012, the Contractor Appellant constructed a dock for the Owner Appellant, but the dock was not built pursuant to the building permit. The dock significantly curtailed the respondents’ (who were neighbours of the Owner Appellant) use of their property and stopped them from being able to dock their boat on their waterfront.

In 2014, the respondents commenced an action against the appellants. Several offers to settle exchanged hands between the parties, but were never accepted. The most significant offer came in 2015, when the respondent offered to pay all the costs of removal, so long as the appellants actually removed the dock. This offer was made to the Owner Appellant, who refused the offer.

In 2018, the trial judge ruled the improperly constructed dock was a nuisance and ordered the appellants jointly and severally, at their expense, remove the dock. The trial judge also ordered punitive damages against the appellants as well as costs on a substantial indemnity scale.

issues:
  1. Did the trial judge err in finding that the dock, as constructed, constituted a nuisance?
  2. Should leave be granted to adduce fresh evidence on appeal?
  3. Did the trial judge err in granting a mandatory injunction for the removal of the dock?
  4. Did the trial judge err in awarding punitive damages?
  5. Should leave to appeal the costs award be granted?
holding:

Appeal allowed in part.

reasoning:

1. Did the trial judge err in finding that the dock, as constructed, constituted a nuisance?

No. Nuisance is the interference with the use or enjoyment of land and the focus is on the harm suffered rather than fault or the nature of the conduct causing harm. To establish a nuisance, the interference with the owner’s use or enjoyment of the land must be both substantial and unreasonable, and the nuisance can be either physical injury to land or an interference with the amenities of the land. The determination of whether an interference is unreasonable is made by balancing the gravity of the harm against the utility of the defendant’s conduct in all of the circumstances.

The appellants submitted that the motion judge erred in applying the test for nuisance in several ways: i) the trial judge focused on the unreasonable conduct of the appellants rather than the harm itself; ii) he failed to consider relevant factors when determining reasonableness; iii) he failed to consider that if the appellants had built the dock properly, it would have been unusable; and iv) he erroneously found this to be a case of physical invasion, as they dock was built on Crown land, not the respondent’s land, and in doing so, the trial judge ‘short-circuited’ the reasonableness analysis.

The Court of Appeal addressed each of these submissions individually:

  • While the focus in a nuisance claim, as opposed to a negligence claim, is on the harm suffered, not the conduct giving rise to that harm, the conduct is not an irrelevant factor and is still properly considered. The trial judge did not solely consider the nature of the conduct, but primarily considered the loss of use of the respondent’s boat. The consideration of the nature of the conduct merely helped frame the finding.
  • The trial judge did consider all of the factors the appellants submitted were not considered. This ground of appeal was simply an attempt to recast previously unsuccessful arguments at trial.
  • The decision of whether an interference is unreasonable must be made in light of all the circumstances. In this case, the appellants’ position was that the dock was incorrectly built through inadvertence. If this was the case, it can hardly be argued that any utility can be attributed their mistake. Further, the nuisance was entirely to the benefit of the appellants and entirely at the cost of the respondent, and so the court upheld the trial judge’s finding that the interference was unreasonable, as there was no reason why the respondent should bear the cost of the appellant’s benefit.
  • The Court of Appeal confirmed that as it relates to assessing reasonableness, it is of no importance whether the nuisance was interference with land or amenities of the land. In either case, the reasonableness analysis must be performed. The Court found that the trial judge did not misclassify the nature of the nuisance.

2. Should leave be granted to adduce fresh evidence on appeal?

No. The Contractor Appellant sought to introduce fresh evidence as to the steps he had taken since the trial judge’s decision to comply with the order, and to bring into question whether the injunction was even possible to comply with. The evidence was to be used to show that assumptions the trial judge made based on future events had turned out to be false, and that since these underpinned several aspects of the decision, the evidence was needed to fairly evaluate the appeal. The respondent sought to introduce fresh evidence in response to the appellant’s evidence.

The Court of Appeal has the discretion to admit further evidence on appeal, and will usually exercise that discretion when: i) the tendered evidence is credible; ii) it could not have been obtained by the exercise of reasonable diligence prior to trial; and iii) the evidence, if admitted, will likely be conclusive of an issue in the appeal.

The Court of Appeal cited Sengmueller, where it was held that evidence that did not exist at trial, could not have possibly impacted the decision at trial. Accordingly, the evidence the appellant sought to adduce, since it relates to events happening after the trial decision, could not possibly have impacted the trial judge’s decision.

The appellant further submitted that by failing to allow the evidence, a substantial injustice would be done in that they would be forced to comply with an unworkable or impossible injunction. The Court of Appeal rejected this argument, because when events that occur post-judgment bring into question the enforcement of the order, it is the trial court, not an appellate court, that is the appropriate venue to dispute the judgment. This is often done through contempt proceedings, which the respondent had already commenced in this case to try and force compliance.

Accordingly, this was not an appropriate case for fresh evidence to be admitted on appeal. Since the appellant was not permitted to adduce fresh evidence, there was no need for the respondent to adduce fresh evidence in response.

3. Did the trial judge err in granting a mandatory injunction for the      removal of the dock?

No. The granting of injunctions is a discretionary matter and as such, will be afforded significant deference on appeal. Appellate intervention is only justified where the exercise of discretion was based on an error of law (determined on a correctness standard), a palpable and overriding error of fact, the consideration of irrelevant factors or the omission of factors that ought to have been considered, or if the decision was unreasonable in the sense that it is not compatible with the judicial exercise of discretion.

The appellants submitted that the trial judge failed to consider several relevant factors and that the injunction should be quashed. First, the trial judge failed to consider whether the order was enforceable by the court, because a permit was needed to remove the dock. Second, the trial judge did not consider principles of proportionality and fairness, and whether the nuisance could be remedied in a less onerous manner. Finally, the trial judge failed to consider public policy implications as the removal of the dock could impact the local fish habitats.

The Court first considered the role of injunctions in nuisance cases, and reaffirmed that injunctive relief is the ordinary relief in these cases. However, where mandatory injunctions, injunctions that require the defendant to take a positive action rather than simply ceasing to do something, are involved, special considerations arise. The trial judge considered several factors present in the case and decided that a mandatory injunction was appropriate in this case.

The Court found that the trial judge did not consider the impact of the required permit when granting the injunction because of the conduct of the appellants. The Contractor Appellant testified to the fact that he had a connection with the relevant Ministry, such that obtaining the permit was just a matter of money and nothing more than a formality. The fact that this turned out to be incorrect did not amount to an error that entitled the appellants to have the injunction invalidated.

On the second submission, the appellants argued that they offered to remove the parts of the dock that interfered with the respondent’s use of their boat, but the respondent did not think that actually alleviated the nuisance. The trial judge agreed, and on appeal, the Court found this conclusion to be well based in the evidence. Further, the appellants submitted that the injunction was unduly burdensome, because if the appellants removed the dock and built it according to the permit, the Owner Appellant would not be able to use his dock for his boat, as the water would be too shallow. However, both appellants knew this to be the case before they applied for the permit, but applied for the permit anyways. To force them to comply with that permit was not overly burdensome according to the trial judge, and the Court of Appeal so no reason to overturn that finding.

For the argument about the fish habitats, there was no evidence at trial about the fish habitats, other than that of the Contractor Appellant. No expert evidence was led on the fish habitats and potential impact of the removal, and so it was not an error for the trial judge to not consider an issue which was not properly put before him.

4. Did the trial judge err in awarding punitive damages?

Yes, in part. The trial judge erred in awarding punitive damages against the Contractor Appellant. The trial judge did not err in awarding punitive damages against the Owner Appellant.

The trial judge focused on several key facts in awarding punitive damages. First, the respondent brought it to the attention of the appellants that the dock was being improperly built, but neither did anything about it and continued to build the dock. Further, the trial judge found that the Contractor Appellant was far too experienced and had no history of mistakes such as the one in this case, and so it was unlikely that it was actually a mistake. The trial judge found there must have been some sort of tacit understanding between the two appellants to incorrectly build the dock in this manner. Most importantly, the trial judge found that the appellants took no action to remedy the mistake, even when the respondent offered to pay for the remedy.

The court noted that appellate courts have greater scope when reviewing punitive damages than other damages. Punitive damages are reserved for exceptional cases, to punish, deter, and denounce “malicious, oppressive and high-handed” misconduct that “offends the court’s sense of decency.” The questions for a court are whether the misconduct of the defendant was so outrageous that punitive damages were rationally required to further one or other of the underlying purposes of punitive damages, and was the quantum ordered, and no less, rationally required to do so?

The Contractor Appellant

The Contractor Appellant submitted that trial judge erred in treating the two appellants as one, and that punitive damages were only properly awarded against the Owner Appellant. In the alternative, the Contractor Appellant submitted that the punitive damages awarded were arrived at based on improper considerations, in that the trial judge did not consider the lowest possible award to achieve the purpose of punitive damages.

Where there are multiple defendants, the award of punitive damages must be justified with respect to each of them. By treating the two appellants as one, the trial judge committed an error of law. The Court of Appeal went on to consider whether the Contractor Appellant’s conduct was so outrageous that it needed to be denounced and deterred. The fundamental findings of the trial judge relating to punitive damages were that the appellants took such a long time to remedy the nuisance, and rejected generous settlement offers. However, the Court of Appeal noted that the appellants were in significantly different circumstances in relation to these facts. The Contractor Appellant did not own the dock. He could not have accepted the settlement offer, nor could he have unilaterally removed the dock. He was at the mercy of the owner contracting him to do so. Therefore, his failure to remove the dock cannot be said to be a failure at all.

While the Contractor Appellant was far from blameless in this case, he was not at fault for the protracted failure to remedy the situation. Further, he had already paid a fine for pleading guilty to a criminal offence in relation to the construction, which is a factor that weighs heavily when deciding whether punitive damages are appropriate. Ultimately, the court held that while the Contractor Appellant was at fault for the faulty construction, his conduct was not so outrageous that it needed to be deterred. The Contractor Appellant could not be held liable for punitive damages for the failure to remedy the mistake because he did not have control over the decision.

The Owner Appellant

The Owner Appellant submitted that the trial judge’s finding of a tacit agreement was not supported by the evidentiary record. Secondly, the Owner Appellant submitted that the trial judge erred in refusing to permit him to adduce character evidence about the respondents that showed the real reason he did not accept their generous settlement offer. Finally, the Owner Appellant adopted the Contractor Appellant’s argument in the alternative.

In regards to the finding of a tacit agreement, the Court of Appeal found that even if there had been a reviewable error in this finding, the finding of a tacit agreement was not fundamental to the award of punitive damages, and so this submission did not help the appellant.

The Court of Appeal also refused to interfere with the trial judge’s decision to not allow character evidence, as it was irrelevant. While the trial judge accepted that character evidence is relevant for punitive damages if it can be shown that the plaintiff provoked the defendant’s reprehensible conduct, the trial judge held that the Owner Appellant had failed to establish any causal connection between the respondent’s conduct and their own conduct. The appellant further submitted on appeal that the evidence ought to be allowed to show the respondent had unclean hands and thus was not to an equitable remedy. However, the appellant did not plead unclean hands at trial and so the trial judge made no reviewable error in not considering the doctrine.

In regards to the proportionality submission, the Court found that the trial judge sufficiently engaged in a careful consideration of proportionality to determine the lowest award to rationally achieve the objectives of punitive damages, and saw no reason to intervene.

5. Should leave to appeal the cost award be granted?

Yes, for the Contractor Appellant. No, for the Owner Appellant.

Contractor Appellant

The Contractor Appellant submitted that there was no basis on which to award substantial indemnity costs against him. The test for leave to appeal costs is stringent and there must be strong grounds upon which the appellate court could find that the judge erred in exercising his discretion. However, where there is no basis for an award of substantial indemnity costs of the trial, the Court of Appeal will grant leave to appeal costs and reduce the amount awarded to reflect partial indemnity costs.

In awarding substantial indemnity costs against the Contractor Appellant, the trial judge relied on the appellant’s inability to accurately explain how he made his mistake, and the fact that the Contractor Appellant spent years arguing his actions were legal when it was obvious that he built a dock contrary to the permit and that he had plead guilty to a criminal offence for the same actions.

Absent applicable settlement offers, substantial indemnity costs should be rare and should only be ordered for reprehensible, scandalous, or outrageous conduct. The fact that a defence has little merit or is ultimately unsuccessful is no basis for awarding substantial indemnity costs. Just because the Contractor Appellant built the dock contrary to the permit and pleaded guilty to doing so did not mean that it was a nuisance, and he was entitled to defend himself against that claim. Further, the Contractor Appellant was not at liberty to accept the settlement offers or remedy the situation as was discussed above. The Court of Appeal found there was no conduct on the part of the Contractor Appellant that justified substantial indemnity costs, and so leave to appeal was granted. The Court of Appeal then awarded costs against the Contractor Appellant on a partial indemnity basis.

Owner Appellant

The Owner Appellant’s costs argument was based on the fact that the freshly adduced evidence he sought to admit would make his decision to reject the generous settlement offer reasonable, thus negating the substantial indemnity costs award. However, since he was refused leave to adduce said evidence, there was no basis on which to overturn the costs award against him.


SHORT CIVIL DECISIONS

Mudronja v. Mudronja, 2020 ONCA 702

[van Rensburg, Pardu and Huscroft JJ.A.]

Counsel:

E. Rayson, for E. M

A. Virk, for M. M.

Keywords: Family Law, Costs, Reasonableness, Proportionality, Family Law Rules, O. Reg. 114/99, Rules 24(1) and 24(12), Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, s.1(1)


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.

Please find below our summaries of the civil decisions of the Court of Appeal for the week of October 26, 2020.

The headline decision is 7636156 Canada Inc. (Re). In a 54-page decision, the Court of Appeal canvassed in detail the law relating to letters of credit and the “autonomy” principle, and whether obligations by banks under LC’s are affected by a bankruptcy of the underlying debtor. In this case, the underlying debtor that went bankrupt was a commercial tenant. The application judge held that the landlord was only entitled to draw on the LC for its preferred claim of three months’ rent after the tenant’s trustee in bankruptcy disclaimed the lease. The Court of Appeal disagreed, confirming that under the autonomy principle, the obligation under the LC was independent of the tenant (and trustee’s) obligations under the lease, and as between only the landlord and the bank. In coming to its conclusion, the Court had to choose between conflicting lines of decisions. The result of this decisions is that landlords who were successful in obtaining LC’s to secure their tenant’s obligations under their leases should not be affected by their tenant’s bankruptcies up to the amount of the LC (depending, of course, on the terms of the lease and LC). Given the current economic environment, the decision is quite timely.

Other topics covered this week included the right to notice of municipal tax sales, claims made by judgment creditors against insurers of judgment debtors under section 132 of the Insurance Act to the proceeds of insurance, access in the crown wardship context and the lack of standing of parties under disability who are represented by a litigation guardian.

Happy Halloween!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Wilton v. Northern Bruce Peninsula (Municipality) , 2020 ONCA 0674

Keywords: Municipal Law, Taxation, Tax Sales, Notice, Duty of Good Faith, Registry Act, R.S.O. 1990, c. R.20, Municipal Act, 2001, S.O. 2001, c. 25, s. 374, s. 379(1) and s. 381(1), Municipal Tax Sales Act, R.S.O. 1990, c. M-60, Elliott v. Toronto (City) (1999), 171 D.L.R. (4th) 64 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 244, Zeitel v. Ellscheid, [1994] 2 S.C.R. 142

7636156 Canada Inc. (Re) , 2020 ONCA 0681

Keywords: Contracts, Real Property, Commercial Leases, Banking Law, Security, Letters of Credit, Autonomy Principle, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss. 136(1)(f), 146, Personal Property Security Act, RSO 1990, c. P10, Commercial Tenancies Act, RSO 1990, c. L.7, s. 38(1), Crystalline Investments Ltd. v. Domgroup Ltd., 2004 SCC 3, Bank of Nova Scotia v. Angelica-Whitewear Ltd., [1987] 1 SCR 59, 430872 B.C. Ltd. v. KPMG Inc., 2004 BCCA 186, Royal Bank v. Gentra Canada Investments Inc. (2001), 147 O.A.C. 96 (C.A.), Cineplex Odeon Corp. v. 100 Bloor West General Partner Inc., [1993] O.J. No. 112 (Gen. Div.), Re Mussens Ltd., [1933] O.W.N. 459 (S.C.), Curriculum Services Canada/Service Des Programmes D’Études Canada (Re), 2020 ONCA 267, Cummer-Yonge Investments Limited v. Fagot, [1965] 2 O.R. 152 (S.C.), Lava Systems Inc. (Receiver & Manager of) v. Clarica Life Insurance Co. (2001), 31 C.B.R. (4th) 284 (Ont. S.C.), rev’d (2002), 161 O.A.C. 53 (C.A.), Titan Warehouse Club Inc. (Trustee of) v. Glenview Corp. (1988), 67 C.B.R. (N.S.) 204 (Ont. S.C.), aff’d (1989), 75 C.B.R. (N.S.) 206 (Ont. C.A.), West Shore Ventures Ltd. v. K.P.N. Holding Ltd., 2001 BCCA 279, 885676 Ontario Ltd. (Trustee of) v. Frasmet Holdings Ltd. (1993), 17 C.B.R. (3d) 64 (Ont. Gen. Div.), Peat Marwick Thorne Inc. v. Natco Trading Corp. (1995), 22 O.R. (3d) 727 (Gen. Div.), Westpac Banking Corp. v. Duke Group Ltd. (1994), 20 O.R. (3d) 515 (Gen. Div.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Windsor-Essex Children’s Aid Society v. E.W. (Publication Ban) , 2020 ONCA 0682

Keywords: Custody and Access, Children’s Aid Society, Extended Society Care, Fresh Evidence, Domestic Violence, Kawartha-Haliburton Children’s Aid Society v. M.W., 2019 ONCA 316, 432 D.L.R. (4th) 497; Children’s Aid Society of Toronto v. J.G., 2020 ONCA 415, 151 O.R. (3d) 320; L.M. v. Peel Children’s Aid Society, 2019 ONCA 841, 149 O.R. (3d) 18; Children’s Aid Society of Toronto v. V.L., 2012 ONCA 890, 299 O.A.C. 388; Children’s Aid Society of Ottawa v. S.N.-D., 2012 ONCA 590, 26 R.F.L. (7th) 46; Catholic Children’s Aid Society of Metropolitan Toronto v. M. (C.), [1994] 2 S.C.R. 165; Children’s Aid Society of Oxford County v. W.T.C., 2014 ONCA 540, 46 R.F.L. (7th) 290; Children’s Aid Society of Toronto v. C.J.W., 2017 ONCJ 212; Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130; R. v. Ibrahim, 2019 ONCA 631, 147 O.R. (3d) 272; A.M. v. Valoris Pour Enfants et Adultes de Prescott-Russell, 2017 ONCA 818; Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched. 1, Child and Family Services Act, R.S.O. 1990, c. C.11

Hodgson v. Cheng , 2020 ONCA 0689

Keywords: Family law, Custody and Access, Civil Procedure, Appeals, Jurisdiction,  Orders, Costs, Final or Interlocutory, Wachsberg v. Wachsberg, 2018 ONCA 508, Deltro Group Ltd. v. Potentia Renewables Inc., 2017 ONCA 784

Svia Homes Limited v. Northbridge General Insurance Corporation , 2020 ONCA 0684

Keywords: Contracts, Interpretation, Insurance, General Liability, Coverage, Unsatisfied Judgments, Enforcement, Notice, Delay, Prejudice,  Insurance Act, RSO 1990, c. l.8 ss. 129, 132. 132(1), Liability Condition 5, Statutory Condition 8, Consolidated-Bathurst v. Mutual Boiler, [1980] 1 SCR 888, Monk v Farmers’ Mutual Insurance Company (Lindsay), 2019 ONCA 616, Becker v Toronto (City), 2020 ONCA 60, Kaiman v Graham, 2009 ONCA 77, The Sovereign General Insurance Company v Walker, 2011 ONCA 597

Huang v. Braga , 2020 ONCA 0645

Keywords: Torts, Negligence, MVA, Civil Procedure, Parties Under Disability, Litigation Guardians, Settlements, Court Approval, Appeals, Standing, Vexatious Litigants, Rules of Civil Procedure, Rules 7.01(1), 7.08, 7.04(1)(b), 37.16, Courts of Justice Act, ss. 140(1) and (3), Ki Ho Kim v. 260 Wellesley Residences Inc., 2017 ONSC 2985, Kavuru (Litigation Guardian of) v. Heselden, 2014 ONSC 6718

Short Civil Decisions

Cooper v. Book, 2020 ONCA 0683

Keywords: Civil Procedure, Orders, Disclosure, Costs, “Last-Chance” Orders, Enforcements, Appeals, Starland Contracting Inc. v. 1581518 Ontario Ltd., 2009 CanLII 30449 (ON SCDC)

National Bank of Canada v. Guibord, 2020 ONCA 0674

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Vexatious Litigants, Rules of Civil Procedure, Rule 2.1.01, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, R. v. Mehedi, 2019 ONCA 387, Currie v. Halton Regional Police Services Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.)

Franmed Consultants (1993) v. Medcan Health Management Inc./em>, 2020 ONCA 0687

Keywords: Breach of Contract, Civil Procedure, Summary Judgment, Costs


CIVIL DECISIONS

Wilton v. Northern Bruce Peninsula (Municipality), 2020 ONCA 0674

[Doherty, Paciocco and Coroza JJ.A.]

Counsel:

S. Wilton, self-represented for the appellant

N. Lovell, for the respondent Municipality of Northern Bruce Peninsula

Keywords: Municipal Law, Taxation, Tax Sales, Notice, Duty of Good Faith, Registry Act, R.S.O. 1990, c. R.20, Municipal Act, 2001, S.O. 2001, c. 25, s. 374, s. 379(1) and s. 381(1), Municipal Tax Sales Act, R.S.O. 1990, c. M-60, Elliott v. Toronto (City) (1999), 171 D.L.R. (4th) 64 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 244, Zeitel v. Ellscheid, [1994] 2 S.C.R. 142

facts:

This case involved an appeal to set aside a 2016 municipal tax sale of the home of the appellant’s deceased parent in Lions Head, Ontario (“the Property”).

The appellant brought her application as the estate trustee for her deceased mother’s estate. The appellant did not have a registered interest in the Property when the tax sale was underway, nor was she ever shown as an owner of the Property on the municipal tax assessment rolls. The appellant also did not file a notice of change of address of the Property with the municipality to link to her personal address. Further, no documents relating to the estate were lodged on title.

The appellant presented evidence in her application that she was entitled to notice of the tax sale because municipal employees were aware that:

  • The appellant had arranged for the payment of the tax arrears on the Property that were outstanding at that time;
  • In related email correspondence with municipal employees, the appellant referred to the estate and sought receipts in the name of the estate;
  • The appellant arranged for the Municipality to send prepayment authorizations to her personal address and she and her husband gave prepayment authorization for taxes owing on property they owned, including for the Property, where she signed as trustee for the estate; and
  • The appellant arranged for the variation of the pre-authorized payment amounts in correspondence that included her contact information.

The Municipality decided to pursue a tax sale of the Property after the necessary searches were conducted and tax arrears were confirmed in the amount of $11,363.27. In January 2015, a tax arrears certificate was registered on title and a copy of the certificate and a Notice of Registration of Tax Arrears Certificates were sent by registered mail to the two addresses of the appellant’s deceased parents – the Property which was shown on the Municipal Assessment Roll and another address that was shown in the registered title document. The registered letters returned unopened. In November 2015, the property search was updated and final notices were sent to the same addresses. Notices of the pending tax sale were also published in regional newspapers and the Ontario Gazette. The Property was then transferred to the successful tenderer in March 2016.

The appellant claimed that the municipal tax sale was null and void because the respondent, the Municipality of Northern Bruce Peninsula (“the Municipality”), had failed to give her notice of the tax sale. The application judge dismissed the application, holding that the Municipality was not required by law to notify the appellant. The appellant appealed from that decision.

issues:
  1. Did the Municipality fail to comply with the statutory notice obligations?
  2. Did the Municipality breach its duty of good faith to the appellant?
holding:

Appeal dismissed.

reasoning:

(1) No. The court found that the Municipality had complied with the relevant notice obligations relating to a tax sale as set out in s. 374, s. 379(1) and s. 381(1) of the Municipal Act, 2001, S.O. 2001, c. 25. The appellant argued that despite this, the notice requirements had not been satisfied based on s. 381(2) and s. 374(5) of the statute relating to evidence to the contrary. The appellant claimed that the return of the registered mail was “evidence to the contrary”, which then rebutted the deemed receipt provision in s. 381(2). The Court, following prior case law, found that the return of the registered letters had no bearing on the sufficiency of the notice provided. The Court held that since ss. 374(1) and 379(1) do not require receipt before a notice that has been sent is effective, s. 381(2) has nothing to do with whether proper notice has been provided. Instead, it was enacted so that if a municipality found value in arguing receipt, it could rely on the evidentiary shortcut that s. 381(2) provides.

In regards to s. 374(5), the appellant argued that the section imposes a duty on the Municipality to undertake a reasonable search of the records mentioned in s. 381(1) and to give notice at the addresses identified. The Court held that this was a misreading of s. 374(5), and that the section does not impose an additional statutory notice obligation of general application.

(2) No. This issue was only first raised on appeal. In any event, the Court held that the municipality did not breach any duty of good faith to the appellant. According to the terms of the statute, the Municipality was not obliged to give the appellant notice of the tax sale and it would not be appropriate in this case to add additional notice obligations on the Municipality not already provided for in the legislative scheme. The Municipality owed no duty to the appellant to give her notice, and in the absence of such a duty, there was no basis for her claim that the Municipality acted in bad faith.

Further, even if the Court were to recognize an additional, non-legislated notice obligation, this would not be an appropriate case in which to do so, as there were multiple other actions the appellant could have taken to ensure that she would have a legal right to receive notice.


7636156 Canada Inc. (Re), 2020 ONCA 0681

[Brown, Paciocco and Nordheimer JJ.A]

Counsel:

J. Finnigan, D.J. Miller, and S. McGrath, for the appellant

H. Chaiton and S. Rappos, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Banking Law, Security, Letters of Credit, Autonomy Principle, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss. 136(1)(f), 146, Personal Property Security Act, RSO 1990, c. P10, Commercial Tenancies Act, RSO 1990, c. L.7, s. 38(1), Crystalline Investments Ltd. v. Domgroup Ltd., 2004 SCC 3, Bank of Nova Scotia v. Angelica-Whitewear Ltd., [1987] 1 SCR 59, 430872 B.C. Ltd. v. KPMG Inc., 2004 BCCA 186, Royal Bank v. Gentra Canada Investments Inc. (2001), 147 O.A.C. 96 (C.A.), Cineplex Odeon Corp. v. 100 Bloor West General Partner Inc., [1993] O.J. No. 112 (Gen. Div.), Re Mussens Ltd., [1933] O.W.N. 459 (S.C.), Curriculum Services Canada/Service Des Programmes D’Études Canada (Re), 2020 ONCA 267, Cummer-Yonge Investments Limited v. Fagot, [1965] 2 O.R. 152 (S.C.), Lava Systems Inc. (Receiver & Manager of) v. Clarica Life Insurance Co. (2001), 31 C.B.R. (4th) 284 (Ont. S.C.), rev’d (2002), 161 O.A.C. 53 (C.A.), Titan Warehouse Club Inc. (Trustee of) v. Glenview Corp. (1988), 67 C.B.R. (N.S.) 204 (Ont. S.C.), aff’d (1989), 75 C.B.R. (N.S.) 206 (Ont. C.A.), West Shore Ventures Ltd. v. K.P.N. Holding Ltd., 2001 BCCA 279, 885676 Ontario Ltd. (Trustee of) v. Frasmet Holdings Ltd. (1993), 17 C.B.R. (3d) 64 (Ont. Gen. Div.), Peat Marwick Thorne Inc. v. Natco Trading Corp. (1995), 22 O.R. (3d) 727 (Gen. Div.), Westpac Banking Corp. v. Duke Group Ltd. (1994), 20 O.R. (3d) 515 (Gen. Div.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

7636156 Canada Inc., (the “Tenant”), leased a building from the appellant Landlord. Pursuant to the terms of the Lease, the Tenant had put in place a $2.5 million letter of credit (“LC”) from the Bank of Nova Scotia (“BNS”) in favour of the appellant. The LOC was to continue to stand as security should the Tenant become bankrupt.

In May 2018, the Tenant made an assignment in bankruptcy and the respondent was appointed Trustee of the bankrupt Tenant’s estate. In July 2018, the respondent disclaimed the Lease. As of the date of bankruptcy, there were no arrears of rent owing under the Lease.

The appellant made draws on the LC after the Tenant’s bankruptcy, both before and after the respondent’s disclaimer of the lease. The draws were for the full amount of the credit.

On a motion brought by the respondent, the motion judge determined that the appellant was only entitled to draw on the LC to recover the amount of its preferred claim for three months’ accelerated rent under s.136(1)(f) of the Bankruptcy and Insolvency Act (“BIA”). In the alternative, the motion judge concluded that, in accordance with the terms of the lease, the LC should have been reduced to approximately $1.35 million on May 1, 2017 (just under a year prior to the date of bankruptcy), with the appellant’s draws limited to the reduced amount.

The Landlord appealed, submitting that the independent obligations created by the LC between the issuer bank, BNA, and itself as beneficiary were not affected by the respondent’s disclaimer of the lease. Nor, on a proper interpretation of the lease, did the amount of the LC reduce in May 2017.

issues:
  1. Did the motion judge err in holding that, upon the disclaimer of the Lease by the Trustee, the appellant was not entitled to draw on the LC for amounts in excess of the appellant’s preferred claim under s. 136(1)(f) of the BIA?
  2. Did the motion judge err in holding that on May 1, 2017, the amount of the LC was reduced to $1,357,135.53?
holding:

Appeal allowed.

reasoning:
  1. Did the motion judge err in holding that, upon the disclaimer of the Lease by the Trustee, the appellant was not entitled to draw on the LC for amounts in excess of the appellant’s preferred claim under s. 136(1)(f) of the BIA? Yes.

Based on the legal principles governing letters of credit, the Court found that the motion judge erred in limiting the appellant’s entitlement to draw on the LC to its preferred claim under BIA s.136 (f) for three months’ accelerated rent.

Principles Governing Letters of Credit

The LC is a standby letter of credit, which consists of an undertaking by the issuing bank to honour a draft or other demands for payment by the beneficiary appellant upon compliance with the conditions specified in the credit. A standby letter of credit is a performance-securing mechanism in that it constitutes an obligation of the issuer to the beneficiary to make payment on account of any default by the applicant customer in the performance of an obligation upon certification by the beneficiary that the applicant has failed to fulfil its obligations to the beneficiary. A fundamental characteristic of standby letters of credit is their autonomy from the underlying transaction between the applicant and the beneficiary. This conclusion was not altered by the principles of insolvency law, in particular those concerning the effect of a trustee’s disclaimer of a commercial property lease.

Fraud Exception

An exception exists to the general rule that an issuing bank is obliged to honour a draft under a documentary credit when the tendered documents appear on their face to be regular and in conformity with the terms and conditions of the credit. The exception arises in the case of fraud by the beneficiary which has been (a) sufficiently brought to the knowledge of the bank before payment of the draft, or (b) demonstrated to a court called on by the customer of the bank to issue an interlocutory injunction to restrain the bank from honouring the draft. However, given the principle of the autonomy of letters of credit, the fraud exception is carefully constrained to protect the commercial utility of the letter of credit.

The Court was not persuaded by the respondent’s argument that the appellant engaged in a fraud related to the transaction between it and the Tenant. The statements by the appellant in the certificates it presented to BNS were not “clearly untrue or false” when assessed in the context of the underlying contract (the Lease) between the beneficiary (the Landlord) and the applicant (the Tenant). The Court found that the agreement between the appellant and Tenant was that the rights of the appellant under the Lease in respect of the LC would continue in full force and effect in the event of the Tenant’s bankruptcy, and any disclaimer therein, as if the Lease had not been disclaimed.

The Effect of the Trustee’s Disclaimer of the Lease

The respondent also argued that when it disclaimed the Lease, the appellant was thereupon precluded by the operation of insolvency law from drawing on the LOC for any amount in excess of the appellant’s preferred claim for three months’ accelerated rent. The respondent contended that such a principle of insolvency law overrides the autonomy principle and imposes a legal limit on the amount the appellant could draw. The Court held that the principle of the autonomy of documentary letters of credit was not altered by the principles of insolvency law, in particular those concerning the effect of a trustee’s disclaimer of a commercial property lease.

The Jurisprudence on the Effect of a Trustee’s Disclaimer of Lease

Based on his review of the case law, the motion judge held it is settled law that a disclaimer of a lease by a trustee in bankruptcy “operates as a voluntary surrender of the lease by the tenant with the consent of the landlord, which extinguishes all obligations of the tenant under the lease”. The Court held that the motion judge overstated the effect of a trustee’s disclaimer of a lease, in part because he did not have the benefit of the Court’s decision in Curriculum Services Canada/Service Des Programmes D’Études Canada (Re).

The Court stated that Curriculum Services clarified that a trustee’s disclaimer does not operate as a voluntary surrender of a lease with the consent of the landlord for all purposes. The decision contains an extensive review of the case law concerning the effect of the disclaimer of a lease by a trustee in bankruptcy on a landlord’s ability to claim for amounts owing under the lease. The review starts with Re Mussens and proceeds through Cummer-Yonge Investments Limited v. Fagot, and Crystalline Investments, decisions which the motion judge also considered in this case. The Court’s review of the jurisprudence led the Court in Curriculum Services to make three main points. First, the key principle that emerged from the Supreme Court’s decision in Crystalline Investments is that the disclaimer of a lease by the tenant’s trustee benefits only the insolvent party. Second, while Crystalline Investments is consistent with the principle stated in Re Mussens that a disclaimer operates to end the bankrupt tenant’s obligations under the lease, the decision does not support an interpretation of Re Mussens that would characterize a disclaimer as a consensual surrender for all purposes. Third, a trustee’s disclaimer of a bankrupt tenant’s lease ends the rights and remedies of the landlord against the bankrupt tenant’s estate with respect to the unexpired term of the lease, apart from the three months’ accelerated rent provided for under the Commercial Tenancies Act (“CTA”) and BIA.

In the Court’s view, the motion judge’s conclusion was in error for two reasons. First, his decision ran counter to first principles. As the Court already stated, the conduct of the Landlord did not fall within the fraud exception so as to constrain the application of the autonomy principle to the Landlord’s ability to draw on the LOC. Second, the motion judge’s decision ran counter to case law regarding the interplay between a trustee’s disclaimer and a landlord’s ability to draw on a letter of credit. The Court drew attention to the decision in Lava Systems Inc. (Receiver & Manager of) v. Clarica Life Insurance Co, which the Court found was the guiding authority.

The Court reviewed the following cases: Titan Warehouse Club Inc. (Trustee of) v Glendview Corp, Lava Systems, West Shore Ventures Ltd. v. K.P.N. Holding Ltd., 885676 Ontario Ltd. (Trustee of) v. Frasmet Holdings Ltd. Peat Marwick Thorne Inc. v. Natco Trading Corp. All the cases pre-dated the decision of the Supreme Court of Canada in Crystalline Investments.

The Court found that Titan Warehouse and West Shore limited the scope of a landlord’s ability to draw on a letter of credit to its statutory preferred claim. Natco did not involve a letter of credit, but in obiter comments supported that approach. By contrast, Frasmet and Lava Systems recognized the landlord’s right under the letter of credit to draw amounts beyond the statutory preferred claim.

Both Titan Warehouse and Lava Systems were decisions of the Court of Appeal. The Court found that the reasoning in Lava Systems was more persuasive for two reasons. First, the decision in Lava Systems addressed the principle of the autonomy of documentary letters of credit, whereas that in Titan Warehouse did not. Second, the brief decision in Titan Warehouse regarded the language in the letter of credit that stated it was “intended to guarantee to the landlord payment of the rent by the tenant” as subject to Cummer-Yonge’s treatment of guarantors of leases in bankruptcies. However, that aspect of Cummer-Yonge was overturned by the Supreme Court in Crystalline Investments and was no longer good law.

The Application of Lava Systems

Lava Systems applied the principle of the autonomy of letters of credit, although it recognized two exceptions to that principle. The Court held that neither applies in the present case. The first exception would arise if BNS had assigned to the respondent any claim it had against the appellant. The respondent, as assignee, would have to prove that the appellant acted fraudulently. The Court stated that BNS made no such assignment and, as stated already, concluded that the appellant’s conduct did not fall within the fraud exception to the autonomy principle. According to Lava Systems, the second situation in which the respondent might have be entitled to redress from the appellant would be if the Tenant had reimbursed BNS for the amount of any “improper” draw by the appellant on the LOC.

In Lava Systems, the Court stated that if the tenant in that case had reimbursed the bank for the amount drawn by the landlord, the tenant or its receiver might have a claim against the landlord for breach of clause 26.01(b) of the lease for the amount of the improper draw. Clause 26.01(b) of the lease provided that if the landlord drew down on the letter of credit, it would hold the proceeds as security for the performance by the tenant of its obligations under the lease. The respondent relied on this portion of the decision to submit that where a bank reimburses itself from the tenant’s property as a result of an improper draw by a landlord on a letter of credit, a trustee may have recourse against the landlord if the draws were improper. As the respondent noted, in the present case the appellant’s draws on the LOC diminished the amount of the GIC held by BNS as security, which otherwise would have been available for distribution to the Tenant’s creditors. The Court did not accept this submission for three reasons.

First, the comments in Lava Systems about the effect of a right of reimbursement from the bankrupt tenant’s estate were anchored in the specific language of the lease in that case. The Court noted, under the law concerning standby letters of credit, the funds an issuing bank pays to a beneficiary are the property of the bank, not the applicant customer. The Court stated that the contract an issuing bank has with the customer applicant may include a right to reimbursement. Where such a contractual right of reimbursement exists, a bank may seek reimbursement for any amounts it is required to pay out under a letter of credit. In this respect, a contractual claim for reimbursement brought by an issuing bank would have the same economic effect on a bankrupt tenant’s estate as a claim for indemnification brought by an original tenant assignor or guarantor. The Court stated that the existence of such a contractual right to reimbursement by an issuing bank would not frustrate the objectives of the BIA or justify treating a trustee’s disclaimer of a lease as its termination for all purposes.

The second reason was that BNS held cash collateral security in the form of a GIC from the Tenant in support of the LC. The bank’s realization on its security following its payments of draws reduced the amount available for distribution to the Tenant’s unsecured creditors. However, the scheme of distribution set out in BIA s. 136 recognizes that the amount available for distribution to unsecured creditors is “subject to the rights of secured creditors”. In the present case, the respondent had not disputed the validity of the BNS security.

Finally, the Court found that to accept the respondent’s position would be tantamount to accepting the proposition that the BIA does not permit a landlord to take security from its tenant, through a letter of credit, that would exceed the amount of a claim for accelerated rent. The Court held that the BIA does not contain any such language of limitation or prohibition.

Conclusion on Issue 1

BNS accepted the appellant’s draws on the LC as complying presentations. The respondent had not established that the appellant’s conduct in drawing on the LC, when assessed in light of the language of the Lease and of the LC, fell within the fraud exception to the principle of the autonomy of letters of credit. Finally, the Court found no provision in the BIA or principle of Canadian bankruptcy law that overrode the autonomy principle and precluded the appellant from drawing on the LC for amounts in excess of its preferred claim against the bankrupt’s estate for three months’ accelerated rent. Consequently, the Court concluded that the appellant was entitled to draw up to the full amount available under the LC.

  1. Did the motion judge err in holding that on May 1, 2017, the amount of the LC was reduced to $1,357,135.53? Yes.

The Court concluded that the motion judge erred in interpreting the Lease to require a reduction of the amount of the LC on May 1, 2017. As an alternative submission on the motion, the respondent argued that the language of the LC mandated a reduction in its value on May 1, 2017 to $1,357,135.53. The motion judge accepted this argument. The Court found that the motion judge erred in his interpretation of the Lease, specifically the LC reduction clause.

The Lease contained a provision concerning reductions in the value of the LC during the term of the Lease. For the value to be reduced, the Tenant must never have been in default and must have “promptly” paid all rent. The Court held that the motion judge erred in his interpretation of the word “promptly”. Any decline in value of the LC during the term of the Lease required that the Tenant had “at all times promptly paid all Rent through the Term”. The motion judge interpreted the word “promptly” to mean “within a reasonable time and not on the actual date that the rent is due.” The Court found that the motion judge made a legal error by not taking into account several provisions of the Lease that were relevant to the interpretation of the word “promptly”. The Court held that, when considered in light of the whole Lease, “promptly” means payment of rent when due – namely, on the first day of each calendar month. There was no dispute that prior to May 1, 2017, the Tenant had twice failed to pay rent when due on the first day of each calendar month. Consequently, there were two occasions prior to May 1, 2017, when the Tenant had failed to pay rent “promptly”. Due to those failures, the Court found that the Tenant had not satisfied the pre-conditions for a reduction in the value of the LC on May 1, 2017. The motion judge erred in finding otherwise.


Windsor-Essex Children’s Aid Society v. E.W.(Publication Ban), 2020 ONCA 0682

[Huscroft, Zarnett and Coroza JJ. A.]

Counsel:

G. S. Campbell for the appellant, E.W.

R. Burnett for the respondent, Windsor-Essex Children’s Aid Society

Keywords: Custody and Access, Children’s Aid Society, Extended Society Care, Fresh Evidence, Domestic Violence, Kawartha-Haliburton Children’s Aid Society v. M.W., 2019 ONCA 316, 432 D.L.R. (4th) 497; Children’s Aid Society of Toronto v. J.G., 2020 ONCA 415, 151 O.R. (3d) 320; L.M. v. Peel Children’s Aid Society, 2019 ONCA 841, 149 O.R. (3d) 18; Children’s Aid Society of Toronto v. V.L., 2012 ONCA 890, 299 O.A.C. 388; Children’s Aid Society of Ottawa v. S.N.-D., 2012 ONCA 590, 26 R.F.L. (7th) 46; Catholic Children’s Aid Society of Metropolitan Toronto v. M. (C.), [1994] 2 S.C.R. 165; Children’s Aid Society of Oxford County v. W.T.C., 2014 ONCA 540, 46 R.F.L. (7th) 290; Children’s Aid Society of Toronto v. C.J.W., 2017 ONCJ 212; Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130; R. v. Ibrahim, 2019 ONCA 631, 147 O.R. (3d) 272; A.M. v. Valoris Pour Enfants et Adultes de Prescott-Russell, 2017 ONCA 818; Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched. 1, Child and Family Services Act, R.S.O. 1990, c. C.11

facts:

The appellant in this case appealed the decision of the Superior Court of Justice (the Appeal Decision), which dismissed an appeal from an order made by the Ontario Court of Justice (the Trial Decision). At trial, the appellant’s two children were found in need of protection and placed in the extended care of the Windsor-Essex Children’s Aid Society (the Society) with no order for the appellant or the children’s respective fathers to have access to the children. The appellant also moved to adduce fresh evidence on appeal.

The appellant is a member of the Eastern Woodland Métis Nation Nova Scotia (“EWMNNS”) and has two children. At the time of appeal, the children had been in the care of the Society for over four years, since July 2016. The children were first apprehended by the Society in 2016 after being exposed to domestic violence between the appellant and her then partner, the father of one of her children. The children were returned to the appellant’s care a few weeks later, but were apprehended again in July 2016 when she breached the conditions of an interim supervision order and of her bail. In 2017, the appellant was also convicted of possessing child pornography and sexual interference involving one of her children. In February 2017, the Ontario Court of Justice granted summary judgment, with the appellant’s consent, awarding the Society wardship of the children for four months and approving a plan of care requiring the appellant to participate in counselling and mental health programs, which the appellant did not complete. In April 2017, the Society began a status review application seeking permanent Crown wardship to secure an adoption placement for the children.

At trial, the trial judge found the children were in need of protection and ordered that they be placed in the Society’s extended care, without ordering access for the appellant or for their respective fathers. The trial judge held that although the appellant is a Métis person and a member of the EWMNNS, the children were not members of the Métis community. However, he accepted the children’s Indigenous heritage would “continue to be important” under the Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched. 1 (“CYFSA”).

On appeal, the appeal judge allowed the parties to adduce fresh evidence, dismissed the appeal, affirmed the order for extended society care without granting the mother any access order, and refused the appellant’s request for a new trial. As well, between the appellant’s first appeal and the appeal to the Court of Appeal, the Superior Court of Justice overturned the appellant’s criminal conviction.

issues:

On a further appeal to the Court, the appellant raised seven issues:
(1) Did the courts below err in interpreting the time limits for interim care orders under s. 122 of the CYFSA?
(2) Did the courts below misapprehend and undervalue the appellant’s evidence?
(3) Did the trial judge’s conduct of the trial give rise to a reasonable apprehension of bias?
(4) Given that the appellant’s criminal conviction has now been overturned, did the courts below err in relying on it as a basis for a child protection finding?
(5) Did the courts below err in placing the burden of proof on the appellant to demonstrate that an access order would be in the children’s best interests?
(6) Should the appellant’s fresh evidence be admitted on appeal?
(7) Is the appellant entitled to full indemnity costs for this appeal?

holding:

Motion granted to adduce fresh evidence. Appeal allowed in part.

reasoning:

(1) No. The Court did not accept the appellant’s assertion that the courts below erred in finding that s. 122(1)(a) of the CYFSA imposes a strict 12-month time limit for interim society care orders where a child is younger than six. The Court stated that the time limits imposed by the statute must be presumed to reflect its objectives, including, the promotion of the best interests of the children. The judge found that both the trial judge and appeal judge’s decisions were rooted in the children’s best interests and saw no reason to intervene.

(2) No. The court did not accept the appellant’s assertion that they misapprehended and undervalued her evidence. The appellant’s claims were based on the Court’s decision in Kawartha-Haliburton Children’s Aid Society v. M.W., 2019 ONCA 316, 432 D.L.R. (4th) 497, which states that the “special considerations that apply to Indigenous children must be part of every decision involving Indigenous children”. The Court here found that there was no error in the approach or conclusions of the courts below and both the reasons and the record confirm their sensitivity to the children’s Indigenous heritage and highlight the significant efforts to ensure all relevant information was presented.

(3) No. The Court did not accept the appellant’s assertion that the trial judge showed a reasonable apprehension of bias by assuming the role of advocate for the Society. This argument was also not raised in the courts below and as a general rule, the Court will not entertain entirely new issues on appeal. However, based on the evidence presented, the Court still did not find that the trial judge’s handling of the trial supported a claim of reasonable apprehension of bias.

(4) No. The Court did not accept the appellant’s assertion that her criminal conviction played a very significant role in the trial results, and now that the conviction has been overturned, a new trial should be required. Rather, the Court held that it was unnecessary to determine whether the conduct at issue amounted to sexual abuse or sexual exploitation under s. 74(2)(c) of the CYFSA, because the children’s recurring exposure to domestic violence provided a sufficient basis to affirm the conclusion of the courts below that the children were, and continue to be, in need of protection and the appropriateness of an order for extended society care.

(5) Yes. Regarding the assertion that the trial judge’s no-access order failed to recognize that the burden is no longer on the person requesting access to demonstrate that the relationship is beneficial and meaningful to the child (Kawartha), the Court found that the appellant was correct that there has been a significant shift in the approach to access for children in extended care under the CYFSA.
The Court concluded that this is not an appropriate case to order a rehearing on access, however it did find that the ruling that there should be no access was tainted by legal error. Since the trial, the children’s foster mother has communicated through evidence that she wished to adopt both children should they be placed in extended society care with “no access or access by photographs”. Access by photographs would thus not undermine the children’s prospects of being adopted by the foster mother and this very limited access could be significant to the appellant because it would entitle her to notice of the adoption proceedings and would keep the door open to some form of openness in the adoption that might be agreeable to the potential adoptive parent. The Court held that the no-access order would be replaced with an order granting the appellant the right to monthly photograph access to the children.

(6) Yes. The appellant sought to adduce further and fresh evidence which included the appellant’s mental health treatment, her attendance at parenting courses, skills training and employment programs. The Society consented to the admission of at least some of this evidence, but noted some of it was similar to evidence that was not admitted on the first appeal. The Court accepted all the new evidence, it was not given much weight and did not change the result.

(7) No. The Court did not accept the appellants claim for full indemnity costs. The Court found that the appeal presented no “exceptional circumstances” for an award of costs against the Society, and thus made no order as to costs.


Hodgson v. Cheng, 2020 ONCA 0689

[Roberts, Trotter and Thorburn JJ.A]

Counsel:

M. Melito, for the appellant
A. Franks, for the respondent

Keywords: Family law, Custody and Access, Civil Procedure, Appeals, Jurisdiction,  Orders, Costs, Final or Interlocutory, Wachsberg v. Wachsberg, 2018 ONCA 508, Deltro Group Ltd. v. Potentia Renewables Inc., 2017 ONCA 784

facts:

The moving party, C, seeks to quash the appeal brought by the responding party, H, from the dismissal of his motion in which he requested that the motion judge entertain further submissions and reconsider or set aside her costs order dated September 20, 2019. Alternatively, she seeks security for costs.

These proceedings arose out of the parties’ acrimonious custody dispute concerning their young daughter. C moved with their daughter to Ontario from Hong Kong where the parties had been residing. H commenced proceedings in Hong Kong and in Ontario to seek their daughter’s return to Hong Kong.

In the Hong Kong proceedings, an order was granted requiring the daughter’s return. Prior to the release of the order, H adjourned his motion for the same relief in Ontario. The motion judge granted C her costs in relation to the adjourned motion and the application commenced by H.

H appealed from this costs order to the Divisional Court, which was dismissed as abandoned with costs to C. H then brought a motion before the motion judge to request that she reconsider or set aside her costs order and that she entertain further costs submissions. The motion judge dismissed H’s motion. H paid the Divisional Court costs order with interest. C sought to quash the appeal brought by H from the dismissal of his motion in which he requested that the motion judge entertain further submissions and reconsider or set aside her costs order.

issues:
  1. Should H’s appeal be quashed on the basis that it was interlocutory in nature?
holding:

Motion granted.

reasoning:

(1) Yes. H’s appeal should be quashed on the basis that it was interlocutory in nature. The motion judge’s order refusing H’s request that she reconsider her costs order and entertain further submissions was clearly interlocutory. It did not finally dispose of any substantive right of the parties or issue in the application but related to the motion judge’s previous final costs order, the appeal from which H had abandoned. Accordingly, the Court did not have jurisdiction to entertain the appeal.


Svia Homes Limited v. Northbridge General Insurance Corporation, 2020 ONCA 0684

[Rouleau, Miller and Zarnett JJ.A.]

Counsel:

T.J. Donnelly and J. Tam, for the appellant

J.G. Norton and J. Tausendfreund, for the respondent

Keywords: Contracts, Interpretation, Insurance, General Liability, Coverage, Unsatisfied Judgments, Enforcement, Notice, Delay, Prejudice,  Insurance Act, RSO 1990, c. l.8 ss. 129, 132. 132(1), Liability Condition 5, Statutory Condition 8, Consolidated-Bathurst v. Mutual Boiler, [1980] 1 SCR 888, Monk v Farmers’ Mutual Insurance Company (Lindsay), 2019 ONCA 616, Becker v Toronto (City), 2020 ONCA 60, Kaiman v Graham, 2009 ONCA 77, The Sovereign General Insurance Company v Walker, 2011 ONCA 597

facts:

Between 2004 and 2008, Svia developed a townhouse project in Oakville. Svia hired 139 Limited to install the project’s sewer system. Problems arose with the sewers. In 2008, Svia commenced an action (the “2008 Action”) against 139 Limited and others, claiming damages relating to the defective installation of the sewers. 139 Limited held an insurance policy issued by Northbridge Insurance’s predecessor. 139 Limited had liability coverage in force at the time the loss occurred.

139 Limited defended the 2008 Action until 2011, when its lawyer was removed from the record and its pleading was struck. Examinations for discovery of other parties took place, but 139 Limited did not participate. In 2013, 139 Limited was noted in default.

Northbridge was not provided with notice of the 2008 Action until 2017, nine years after it was commenced. Upon receipt of notice, Northbridge obtained a Non-Waiver Agreement from 129 Limited to allow it to investigate and consider whether coverage applied. Northbridge ultimately denied coverage for the 2008 Action. Northbridge stated that, among other reasons, the delayed notice constituted a breach of policy conditions and precluded an action for coverage under the Policy and, to the extent the 2008 Action made a claim for resultant damage, an action for coverage was barred by the expiry of the applicable limitation period.

In 2018, Svia amended its statement of claim to include broader claims for resultant damage but did not provide the amended claim to Northbridge. Without notice to Northbridge, Svia obtained default judgment against 139 Limited. Subsequently, counsel for Svia provided a copy of the default judgment to Northbridge. After unsuccessful attempts, including by execution, to collect the judgment from 139 Limited, Svia commenced an application under s. 132(1) of the Insurance Act against Northbridge for the amount of the judgment.

The application judge referred to the principle that persons, such as Svia, who seek recovery in a proceeding under s. 132, can stand in no better position than the insured would if it were claiming payment from the insurer. Thus, if Northbridge had a defence to a claim by 139 Limited, it would also be a defence to Svia’s claim.

He then considered whether the judgment fell within the Policy’s terms of coverage. The Policy excluded from coverage the cost to repair the insured’s own defective work. However, consequential damage resulting from the insured’s defective work was within the scope of coverage. This gave Northbridge a partial defence to the claim.

The application judge then examined whether Northbridge had a defence based on the lack of timely notice of the claim. Liability Condition 5 of the Policy required that “If a claim is made or ‘action’ is brought against any Insured, you [139 Limited] must see to it that we [Northbridge] receive prompt written notice of the claim or ‘action’”. He also noted that the Policy permitted Svia to give notice, as Statutory Condition 8 provided that if the insured was absent, unable to provide notice, or refused to do so, notice could be given “by a person to whom any part of the insurance money is payable”. He found that 139 Limited breached Liability Condition 5 by its failure to provide timely notice.

Next, he assessed whether relief from forfeiture could be granted under s. 129 of the Insurance Act. He found that Svia had standing to advance a s. 132 application, but held that the test for relief from forfeiture set out in Monk v. Farmers’ Mutual Insurance Company (Lindsay) had not been met. First, the conduct of 139 Limited in failing to give timely notice was unreasonable. Second, the breach of the condition to give timely notice was substantial and had prejudiced Northbridge’s ability to respond to the 2008 Action on behalf of 139 Limited. Third, although the forfeiture of insurance coverage was significant, the loss of Northbridge’s ability to defend the action was also significant such that there was no disparity between the insured’s loss of coverage and the damage caused to the insurer by the breach of condition. Accordingly, Svia’s application was dismissed.

issues:

(1) Did Svia breach the insurance policy’s relevant notice requirement?

(2) Did the application judge err in finding that there had been prejudice to Northbridge arising from the late notice?

(3) Was the application judge wrong to focus on 139 Limited’s conduct, rather than Svia’s conduct, in deciding whether to grant relief?

holding:

Appeal dismissed.

reasoning:

(1) Statutory Condition 8 Argument

Yes. Svia submitted that Statutory Condition 8, under which Svia had provided notice of the 2008 Action to Northbridge, did not have a timeliness requirement. Therefore, there was no late notice and the Policy’s relevant notice requirement was not breached. Northbridge asserted that Svia’s argument should not be considered, as it had not been advanced before the application judge, nor was it referred to in Svia’s appeal factum.

Following the rationale outlined in Becker v Toronto, the Court stated that a trial judge does not err when he or she considers only the issues and theories actually articulated and advanced by the parties, and a party is generally foreclosed from raising entirely new issues on appeal. The general rule is that it is unfair to spring a new argument upon a party at the hearing of an appeal in circumstances in which evidence might have been led at trial if it has been known that the matter would be an issue on appeal.

The argument raised by Svia was “entirely new”. It was not raised before the application judge. It was not referred to in, and was inconsistent with, Svia’s factum on appeal, in which Svia both conceded that there had been late notice and characterized the issue on appeal as whether the application judge erred in refusing to grant relief from forfeiture. Additionally, this argument does not raise an issue of law alone but rather turns on interpretation of the Policy, which is a question of mixed fact and law. Nevertheless, the Court assessed the merits of Svia’s argument.

Svia maintained that Northbridge conceded all the ingredients necessary to find that it was liable to Svia. Northbridge’s concession was that although Statutory Condition 8 gave Svia a right to provide notice, it imposed no obligations on Svia. Thus, Svia argued it did not breach any obligation to give notice by a particular time and therefore did not forfeit its right to coverage. The Court disagreed. Justice Zarnett read Northbridge’s concession as limited to pointing out that although Statutory Condition 8 gave Svia a right to give notice, it imposed no obligation to do so, and therefore no breach occurred that needed to be relieved against.

The language of s. 132 (1) of the Insurance Act demonstrated that it is those non-conceded items that matter, as the central question is whether the insured (here 139 Limited) would have had a valid claim to coverage if it had satisfied the judgment. Answering this question required interpretation of the Policy, including both Liability Condition 5 and Statutory Condition 8.

Liability Condition 5 required the insured, 139 Limited, to give Northbridge timely notice of an action against it. The purpose of a notice provision such as this one is to make the insurer aware of a claim against its insured so that it has the timely opportunity to deal with it. Statutory Condition 8 does not completely override or displace Liability Condition 5, but rather expands the category of persons who may give notice to the insurer. Reading the Policy this way confers a right on third parties, such as Svia, to give notice and deprives the insurer of the ability to ignore a notice on the basis that its insured did not provide it.

The application judge held that Svia was a person able to provide notice pursuant to Statutory Condition 8. Therefore, Northbridge had to treat such notice as though the insured, 139 Limited, had provided it. Nevertheless, Statutory Condition 8 did not detract from the right of Northbridge to require that notice be timely, as contemplated by Liability Condition 5. Since Svia’s notice was not timely within the meaning of Liability Condition 5, the fact that Svia provided notice under Statutory Condition 8 does not alter that conclusion.

In a case where a Statutory Condition 8 notice is timely, it would fully deprive the insurer of a right to complain of a failure of its insured to provide timely notice. Where a Statutory Condition 8 notice was late, but no prejudice to the insurer arose, the notice and other relevant factors may be sufficient for the court to provide relief from any forfeiture arising from the insured’s breach of the Policy. The fact that the Statutory Condition 8 notice did not have either effect on the facts of this case does not render the provision meaningless. It was not necessary, in order to give Statutory Condition 8 meaning, to read it as requiring the insurer to treat a notice as proper no matter when it was received, even one coming so late that it deprived the insurer of all opportunities that timely notice of a claim was intended to provide.

The question on a section 132 application is whether the insurer would have had a defence to a claim by its insured if the insured had satisfied the judgment. If 139 Limited had satisfied Svia’s judgment, Northbridge would have had a defence to 139 Limited’s claim for indemnity under the Policy because the first notice it received of the 2008 Action (the notice from Svia) came nine years after the action was commenced. Therefore, notice was not timely and was in breach of 139 Limited’s obligations under the Policy.

(2) The Lack of Prejudice Argument

No. Svia argued that had Northbridge received timely notice, it would have denied coverage for the resultant damages and would have declined to participate in the defence of the action. This argument failed on the application judge’s findings of fact.

The notice Northbridge received came well after 139 Limited’s defence had been struck out, discoveries had been conducted, and 139 Limited had been noted in default. The application judge found that, as a result, Northbridge was denied the opportunity to carry out a timely investigation for resultant damages or participate in discovery. Also, by the time Northbridge received notice, the limitation period for bringing an action for contribution and indemnity against other potentially liable parties would have expired. For these reasons, Northbridge suffered significant prejudice.

(3) The Wrong Perspective Argument

No. Svia argued that the application judge should have considered relief from forfeiture solely from the perspective of Svia and based on its conduct, rather than from the perspective of the insured, 139 Limited, and based on its conduct. The Court rejected this argument.

In a section 132 application, the court is to apply the same equities as would apply if the insured had satisfied the judgment and was itself claiming the insurance money from the insurer. Thus, the court would have had to consider the conduct of 139 Limited, including its failure to provide timely notice, why that occurred and the effect of late notice on Northbridge, as equities in deciding whether to grant relief from forfeiture. That was precisely the analysis carried out by the application judge.


Huang v. Braga, 2020 ONCA 0645

[Pepall J.A. (Motion Judge)]

Counsel:

S.H.H., acting in person

O. Holzapfel, for the responding party, the Public Guardian Trustee

A.L. Rachlin, for the responding party, A.M.B.

R.H. Rogers, for the responding party, Aviva Insurance Company of Canada

T. Antoniou, for the responding party, L.F.J.L.

Keywords: Torts, Negligence, MVA, Civil Procedure, Parties Under Disability, Litigation Guardians, Settlements, Court Approval, Appeals, Standing, Vexatious Litigants, Rules of Civil Procedure, Rules 7.01(1), 7.08, 7.04(1)(b), 37.16, Courts of Justice Act, ss. 140(1) and (3), Ki Ho Kim v. 260 Wellesley Residences Inc., 2017 ONSC 2985, Kavuru (Litigation Guardian of) v. Heselden, 2014 ONSC 6718

facts:

The moving party was involved in a motor vehicle accident over 20 years ago. The ensuing litigation spanned several years, and prior to trial, a Certified Capacity Assessor concluded that the moving party lacked capacity to act for herself in litigation. Accordingly, the Public Guardian Trustee (“PGT”) was appointed as her litigation guardian pursuant to Rule 7.04(1)(b) of the Rules of Civil Procedure (the “Rules”).

The moving party brought six proceedings seeking to overturn the appointment of the PGT, all unsuccessful. One of the respondents subsequently brought a motion under Rule 37.16 for an order that the moving party be prohibited from bringing further motions or appeals without leave of the court. The motion was granted, with the observation that the motions and appeals were frivolous and excessive.

Once appointed, the PGT retained external counsel to act on its behalf. Based on the external counsel’s advice, the PGT settled the actions, and the settlement was approved pursuant to Rule 7.08. All were in agreement that the settlement was in the best interests of the moving party. The moving party brought this motion to appeal the approval of the judgment, against the advice and notwithstanding the protest of her litigation guardian.

issues:

(1) Should the moving party be granted leave to appeal the judgment approving the settlement?
(2) Does the moving party, being a party under disability, have authority to appeal the judgment approving the settlement independent of the PGT?

holding:

Motion dismissed.

reasoning:

(1) Should the moving party be granted leave to appeal the judgment approving the settlement?

No. Although orders may be granted under Rule 37.16 for a variety of reasons, once an order is granted, it is not clear what test a party must meet when seeking leave. On this issue, the Court looked for guidance from analogous provisions in the Courts of Justice Act (“CJA”). Section 140(1) of the CJA similarly provides a judge with the authority to limit a person’s ability to bring proceedings without leave if the person is found to be acting vexatiously. Section 140(3) expands on this authority and states that leave may be provided if the court is satisfied that the proceeding in question is not an abuse of process, and that reasonable grounds exist.

The Court built on this foundation and posed three questions to consider when leave is sought pursuant to an order under Rule 37.16. First, consideration should be given to the strength of the grounds advanced by the moving party. Second, the court should consider whether the substance of the leave request is simply a continuation of the frivolous, abusive, or vexatious process that generated the order in the first place. The final and overriding consideration is whether granting leave would be in the interests of justice.

The Court concluded that the moving party did not have any reasonable grounds that merited granting leave, and therefore dismissed the motion.

(2) Does the moving party, being a party under disability, have authority to appeal the judgment approving the settlement independent of the PGT?

No. Under Rule 7.01(1), unless the court or a statute provides otherwise, a proceeding shall be commenced, continued, or defended on behalf of a party under disability by a litigation guardian. In Ki Ho Kim v. 260 Wellesley Residences Inc., 2017 ONSC 2985, the Court held that a party under disability had no standing independent of his litigation guardian. Similarly, in Kavuru (Litigation Guardian of) v. Heselden, 2014 ONSC 6718, the court wrote that while it is within the discretion of a motion judge to consider the position of the party under disability, such party no longer had the right to dictate the course of the litigation.

The Court considered that the PGT did not wish to appeal or challenge the approval judgments, and concluded that this alone was sufficient to dismiss the motion.


SHORT CIVIL DECISIONS

Cooper v. Book, 2020 ONCA 0683

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

Counsel:

W.G. Punnett, for the appellant

M. Zalev and R. Kamin, for the respondent

Keywords: Civil Procedure, Orders, Disclosure, Costs, “Last-Chance” Orders, Enforcements, Appeals, Starland Contracting Inc. v. 1581518 Ontario Ltd., 2009 CanLII 30449 (ON SCDC)

National Bank of Canada v. Guibord, 2020 ONCA 0677

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

M. Myers, for the moving party

M. G., acting in person

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Vexatious Litigants, Rules of Civil Procedure, Rule 2.1.01, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, R. v. Mehedi, 2019 ONCA 387, Currie v. Halton Regional Police Services Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.)

Franmed Consultants (1993) Inc. v. Medcan Health Management
Inc.
, 2020 ONCA 0687

[Doherty, Paciocco and Coroza JJ.A.]

Counsel:

R. B. Moldaver, for the appellant
F. R. Schumann, for the respondent

Keywords: Breach of Contract, Civil Procedure, Summary Judgment, Costs

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.

There were only three substantive decisions released by the Court of Appeal this week. In Paulpillai Estate v. Yusuf, the Court reviewed in detail the factors to be considered in an analysis of whether an order is final or interlocutory for the purposes of determining the proper appeal route.

Other topics covered this week included bank negligence, and building code violations.

Wishing everyone a pleasant weekend.

John Polyzogopoulos

Blaney McMurtry LLP

416.593.2953 Email


Table of Contents

Civil Decisions

Paulpillai Estate v. Yusuf, 2020 ONCA 655

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Corporations, Remedies, Oppression, Receiverships, Interim Release of Funds, Injunctions, Adding Parties, Sealing Orders, Arbitration, Applications, Actions, Courts of Justice Act, ss. 6(1)(b), ss. (19(1)(b), ss. 101(1), Arbitration Act, ss. 7(1) and ss. 7(6), Grand River Enterprises v. Burnham (2005), 197 OAC 168 (CA), Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc., 2018 ONCA 495, Laurentian Plaza Corp. v. Martin (1992), 7 OR (3d) 111 (CA), Ontario Medical Assn. v. Miller (1976), 14 OR (2d) 468 (CA), Illidge (Trustee of) v. St. James Securities Inc. (2002), 60 OR (3d) 155 (CA), Amphenol Canada Corp. v. Sundaram, 2019 ONCA 932, Susan J. Model & Talent Management Inc. v. IMG Models Inc., 2006 CanLII 2882 (Ont. CA), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404

Whitby (Town) v. G & G 878996 LM Ltd., 2020 ONCA 654

Keywords: Municipal Law, Building Code, Civil Procedure, Appeals, New Issue on Appeal, Remedies, Set-off, Building Code Act, 1992, S.O. 1992, c. 23, s 15.10, Kaiman v. Graham, 2009 ONCA 77

Foodinvest Limited v. Royal Bank of Canada, 2020 ONCA 665

Keywords: Torts, Negligence, Duty of Care, Standard of Care, Banking, Fraud, Civil Procedure, Summary Judgment, Deloitte & Touche v. Livent Inc. (Receiver of), [2017] 2 SCR 855

Short Civil Decisions

Ballanger v. Ballanger, 2020 ONCA 663

Keywords: Costs

Samad v. Rasool, 2020 ONCA 656

Keywords: Civil Procedure, Appeals, Extension of Time, Orders, Setting Aside

Pearl Hospitality Inc. v. Ceballos, 2020 ONCA 672

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Torts, Fraudulent Misrepresentation

Levin v. Levin, 2020 ONCA 675

Keywords: Family Law, Costs

Old Navy (Canada) Inc. v. The Eglinton Town Centre Inc., 2020 ONCA 679

Keywords: Consent Dismissal


CIVIL DECISIONS

Paulpillai Estate v. Yusuf, 2020 ONCA 655

[Doherty, Hoy and Jamal JJ.A.]

Counsel:

O.G. Barnwell, for the appellants

E.G. Upenieks and A.H. Kwok, for the respondents

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Corporations, Remedies, Oppression, Receiverships, Interim Release of Funds, Injunctions, Adding Parties, Sealing Orders, Arbitration, Applications, Actions, Courts of Justice Act, ss. 6(1)(b), ss. (19(1)(b), ss. 101(1), Arbitration Act, ss. 7(1) and ss. 7(6), Grand River Enterprises v. Burnham (2005), 197 OAC 168 (CA), Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc., 2018 ONCA 495, Laurentian Plaza Corp. v. Martin (1992), 7 OR (3d) 111 (CA), Ontario Medical Assn. v. Miller (1976), 14 OR (2d) 468 (CA), Illidge (Trustee of) v. St. James Securities Inc. (2002), 60 OR (3d) 155 (CA), Amphenol Canada Corp. v. Sundaram, 2019 ONCA 932, Susan J. Model & Talent Management Inc. v. IMG Models Inc., 2006 CanLII 2882 (Ont. CA), Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404

facts:

The respondent in this case is the estate of a deceased. The deceased and the appellant operated two universities together in the Caribbean. While several corporate structures and partnerships were interposed, their relationship was ultimately governed by a partnership agreement in Ontario. When the deceased passed away, the appellant suggested to the respondent that they alter the relationship and each take responsibility for one of the schools and no longer run them as affiliated schools. The respondent agreed to this. However, the respondent alleged that the appellant failed to provide proper financial disclosure to allow the respondent to make a proper choice as to which school to assume ownership for. Further, it was alleged the appellant began competing with the school owned by the respondent, poaching its staff and that the appellant also failed to account for partnership funds owed to the deceased’s estate arising after the deceased’s death.

As a result, the respondents commenced an application, seeking a declaration and damages for corporate oppression, a declaration and damages for breach of the partnership agreement and an accounting and tracing of partnership funds since the death of the deceased, among other relief. The appellant agreed to all the injunctive relief sought at the first appearance and so a consent order was granted. Thereafter, the respondent had reason to believe the appellant was breaching the consent order and so brought the application back before the court.

The motion judge issued the order that gives rise to this appeal, which order: i) appointed BDO Canada Limited (“BDO”) as an investigative monitor of the schools; ii) released funds on an interim basis to the appellant for the operation of their school, as an advance of any sum that might be found to be payable to them; iii) enjoined the appellant on an interim basis from competing unfairly with the respondent’s school or recruiting its students or personnel; iv) converted the application to an action; v) added parties to the action; and vi) declined to seal the entire court file.

The respondent brought a motion to quash the appeal as being in the wrong court. The appellant sought a stay of the order pending appeal.

issues: 

(1) Was the order under appeal final or interlocutory, such that an appeal lay to the Divisional Court, with leave?

(2) Should the order be stayed?

holding: 

Motion to quash granted. Motion to stay dismissed.

reasoning: 

(1) Was the order under appeal final or interlocutory, such that an appeal lay to the Divisional Court, with leave?

The order was interlocutory. An appeal from an interlocutory order lies to the Divisional Court. The Court of Appeal reviewed the main principles to be considered when assessing whether an order is interlocutory: i) an appeal lies from the court’s order, not from the reasons given for making the order; ii) an interlocutory order “does not determine the real matter in dispute between the parties — the very subject matter of the litigation — or any substantive right. Even though the order determines the question raised by the motion, it is interlocutory if these substantive matters remain undecided; iii) in determining whether an order is final or interlocutory, one must examine the terms of the order, the motion judge’s reasons for the order, the nature of the proceedings giving rise to the order, and other contextual factors that may inform the nature of the order; and iv) the question of access to appellate review must be decided on the basis of the legal nature of the order and not on a case by case basis depending on the application of the order to the facts of a particular case … in other words, the characterization of the order depends upon its legal nature, not its practical effect.

The Court of Appeal then considered each element of the order under appeal to determine whether the order was interlocutory.

(i) Appointment of BDO
The motion judge’s reasons noted the court had “authority to appoint a receiver and manager by an interlocutory order where it appears to be just or convenient to do so: Courts of Justice Act, s. 101”. BDO was appointed to monitor the schools and ensure the respondents’ ability to recover was not prejudiced. It is well established before the Court of Appeal that a receiver appointed under s. 101(1) is an interlocutory order, and the court held in this case that appointing BDO an investigative monitor was a parallel decision.

(ii) Release of Funds to the respondent
An interim release of funds to one party, on motion, that settles no elements of the lis between the parties is an interlocutory order. In this case, the order itself referred to it as an advance of money that may be owing. If the application is unsuccessful, the money will have to be repaid and as such, it is not determinative of the parties’ rights.

(iii) Interim Injunction
An interim or interlocutory injunction is interlocutory for purposes of the appeal route, because its legal nature does not finally determine the essence of the litigation before the court, even if its practical effect may be to do so. As a result, the court concluded the injunction was interlocutory.

(iv) Conversion of the Application into an Action
The Court held that an order converting an application into an action is interlocutory. Such an order simply converts the application into an action that will proceed to trial. The matter was started in the Superior Court of Justice and remains there.

(v) Addition of Parties
The act of adding parties to an action or an application does not affect or finally determine the substantive rights of any of the parties. The litigation continues and the rights of the parties are decided in a further step in the action/application. Thus, an order adding parties is interlocutory.

(vi) Refusing to Seal the Court File
In refusing to seal the court file, the motion judge noted that the decision could be revisited if either party could present evidence to support it. This illustrates that it was not finally determinative, nor did it relate to the real matter in dispute. It was a collateral consideration as to whether the documents would be public. This was sufficient for the Court to find this aspect of the order as being interlocutory as well.

(vii) Refusal to Refer the Dispute to Arbitration
The partnership agreement stated that all disputes would be referred to arbitration and the parties may apply to a court for injunctive relief. The appellants suggested that by failing to order the matter into arbitration, the motion judge finally determined the forum for dispute resolution and deprived the appellants of their contractual right to arbitrate.

The Court dismissed this submission, largely because there was no motion before the motion judge to refer the dispute to arbitration. Further, the appellants did not make any attempt to stay the court proceedings in favour of arbitration, rather, they took significant steps in the court proceedings and thus waived their right to arbitrate.

Ultimately, the Court found that all aspects of the order were interlocutory, therefore it had no jurisdiction to hear the appeal. The appeal was therefore quashed.

(2) Should the order be stayed?

No. Since the Court of Appeal did not have jurisdiction for the appeal, the motion to stay the order under appeal was dismissed.


Whitby (Town) v. G & G 878996 LM Ltd., 2020 ONCA 654

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

J.A. Annen, for the appellant

R.A. Biggart and N. Sheikh, for the respondent

Keywords: Municipal Law, Building Code, Civil Procedure, Appeals, New Issue on Appeal, Remedies, Set-off, Building Code Act, 1992, S.O. 1992, c. 23, s 15.10, Kaiman v. Graham, 2009 ONCA 77

facts:

The appellant, G&G 878996 LM Ltd. (“G&G”), owned a multi-story, mixed-use commercial/residential building. A fire occurred at an adjacent building which resulted in it being demolished, except for the wall adjoining G&G’s property. This adjoining wall was eventually removed with the approval of the respondent, the Corporation of the Town of Whitby (“Whitby”).

Whitby’s Chief Building Official (“CBO”) later determined that the G&G owned building’s north wall, which had previously abutted the adjacent building that was demolished, constituted an immediate danger to occupants and the public-at-large. Pursuant to her authority under s.15.10 of the Building Code Act, 1992, (the “Act”), the CBO issued two emergency orders to eliminate the immediate danger posed by the exposed wall. Whitby then spent $335,089.86 to protect the public and effect repairs to terminate the danger. Following the issuing of an emergency order under s. 15.10 of the Act, a CBO must apply to a judge of the Superior Court to confirm the order. In the case at bar, the application judge confirmed the emergency orders and ordered that Whitby could recover from G&G its full costs in taking steps to terminate the immediate danger, as well as its costs of the application.

issues: 

(1) Did the application judge err in failing to consider whether the doctrine of equitable set-off applied in determining whether the amounts spent by Whitby were recoverable from G&G?

(2) Did the application judge err by approaching the case on the basis that it was analogous to an environmental damage claim?

holding: 

Appeal dismissed.

reasoning: 

(1) Did the application judge err in failing to consider whether the doctrine of equitable set-off applied in determining whether the amounts spent by Whitby were recoverable from G&G?

No. At the hearing of the application, G&G did not argue that it was entitled to an equitable set-off. Instead of arguing equitable set-off, it submitted that “[Whitby] should be estopped from collecting any of the funds expended on measures determining this perceived danger at that time.” The Court will generally not entertain entirely new issues on appeal because it is unfair to force a party on an appeal to respond when they might have adduced evidence below had they known that the matter would be an issue on appeal.

(2) Did the application judge err by approaching the case on the basis that it was analogous to an environmental damage claim?

No. The Court rejected the argument that the application judge incorrectly analogized the case at bar to an environmental damage claim. The comments of the application judge in that regard were part of a dialogue with counsel and not part of her reasons. Regarding the evidentiary record, no complaint was made by G&G on the return of the application about the state of the record. In any event, the Court was not satisfied that the record was insufficient for the application judge to make her order.

Foodinvest Limited v. Royal Bank of Canada, 2020 ONCA 665

[Doherty, Paciocco and Coroza JJ.A.]

Counsel:

G.K. Bastien, for the appellant

C. Francis, for the respondent

Keywords: Torts, Negligence, Duty of Care, Standard of Care, Banking, Fraud, Civil Procedure, Summary Judgment, Deloitte & Touche v. Livent Inc. (Receiver of), [2017] 2 SCR 855

facts:

The appellant (“Foodinvest”) contracted with the respondent (“RBC”) for the use of a self-service transfer facility (“RBC Express”) provided by RBC. That service allowed customers to personally transfer and receive funds from other financial institutions. Foodinvest used RBC Express to transfer funds to accounts in a Polish bank. Foodinvest subsequently claimed the beneficiary of the transferred funds had misappropriated those funds and defrauded Foodinvest. RBC received an email from the Polish bank to which the funds were being transferred, indicating the Polish bank suspected fraud in relation transactions in which Foodinvest had used RBC Express to transfer funds to the Polish bank. RBC did not pass this information on to Foodinvest. Foodinvest sued, maintaining RBC was under a duty to do so
The motion judge granted summary judgment for RBC and dismissed the claim. In dismissing the claim, the motion judge found RBC’s duty of care did not extend to an obligation to pass on the information provided by the Polish bank. Second, the motion judge found, even if a duty of care existed, there was no expert evidence in respect of the standard of care owed by RBC in the circumstances.

issues: 

(1) Did the motion judge err in making a determination on a summary judgment motion of novel legal issues?

(2) Did the motion judge err in holding that RBC’s duty of care did not extend to the requirement that RBC pass on the information it received from the Polish bank?

holding: 

Appeal dismissed.

reasoning: 

(1) Did the motion judge err in making a determination on a summary judgment motion of novel legal issues?

No. The argument on appeal that the issues were novel and not amenable to a motion for summary judgment was not made before the motion judge. In any event, the claim was not novel. The nature and extent of RBC’s duty of care fell to be determined under the principles articulated in Deloitte & Touche v. Livent Inc. (Receiver of), [2017] 2 SCR 855. In addition, the facts did not rise to a level of novelty or complexity unamenable to the summary judgment process.

(2) Did the motion judge err in holding that RBC’s duty of care did not extend to the requirement that RBC pass on the information it received from the Polish bank?

No. The scope of RBC’s duty of care to Foodinvest depended on the nature of the service it provided and the terms of the contractual relationship governing that service. The relevant agreement set out in exhaustive terms the nature and scope of RBC’s potential liability in respect of the services it offered to Foodinvest. RBC’s duty of care related specifically to the execution of the transfers made using the service provided by RBC. RBC’s duty of care extended to taking reasonable steps to ensure the transfers were properly authorized and properly carried out in accordance with the instructions provided. That duty did not require RBC to concern itself with the specifics or bona fides of the underlying transactions giving rise to the transfers. If Foodinvest was cheated, its loss flows not from any failure of the service provided by RBC, but from the dishonesty of the entities Foodinvest chose to do business with.


SHORT CIVIL DECISIONS

Ballanger v. Ballanger, 2020 ONCA 663

[Juriansz, Hourigan and Thorburn JJ.A.]

Counsel:

S. Beddoe and J. Robinson, for the appellant

G.S. Joseph and A.M. Mastervick, for the respondent, M.B.

J.J. Neal, for the respondent, K.H.

Keywords: Costs

Samad v. Rasool, 2020 ONCA 656

[Hourigan, Trotter and Jamal JJ.A.]

Counsel:

S.S., self-represented

A. Lee, for the respondent

Keywords: Civil Procedure, Appeals, Extension of Time, Orders, Setting Aside

Pearl Hospitality Inc. v. Ceballos, 2020 ONCA 672

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

Counsel:

D.C., acting in person

I.S. Arora and J. Chahal, for the respondent

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Torts, Fraudulent Misrepresentation

Levin v. Levin, 2020 ONCA 675

[Watt, Trotter and Zarnett JJ.A.]

Counsel:

P.I. Waldmann, for the appellant

R. Kniznik, for the respondent

Keywords: Family Law, Costs

Old Navy (Canada) Inc. v. The Eglinton Town Centre Inc., 2020 ONCA 679

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

Counsel:

J.F. Lancaster, for the appellants

C. Francis, for the respondent

Keywords: Consent Dismissal


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.