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Please find our summaries for the civil decisions of the Court of Appeal for Ontario for the week of October 31, 2022.

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In a continuation of an ever-lengthening string of recent cases on the failure to make immediate disclosure of partial settlements, the Court in Crestwood Preparatory College Inc. v. Smith dismissed an appeal from the decision of the motion judge that had stayed an action for failure to immediately disclose the settlement to the non-settling parties.

In Lake v. La Presse, a claim by a wrongfully dismissed employee, the Court overturned a motion judge’s decision to reduce an employee’s wrongful dismissal damages by two-months because of a failure to mitigate. The Court determined that the motion judge erred in her application of the two-part test for what constitutes reasonable mitigation. The Court confirmed that a wrongfully dismissed employee does not have to accept lesser paying jobs and the Court must be satisfied, if reasonable steps had been taken, that the employee would have found a comparable position. It is not enough to ground a finding of failure to reasonably mitigate that an employee would have increased their chances of finding new employment if they had taken more steps. Further, the Court clarified that the onus is on the employer, as the at-fault party, to prove that the employee failed to reasonably mitigate.

In Stelmach Project Management Ltd. v. Kingston (City), the Court confirmed that municipalities have the discretion to choose between the Municipal Act, 2001 and the Development Charges Act, 1997 to pass by-laws aimed at levying charges on land developers for the costs of additional infrastructure to support new properties. An overview of the legislative history made it clear that it was the intention of the legislature to maintain a dual regime to recover capital costs for development infrastructure.

In 10443204 Canada Inc. v. 2701835 Ontario Inc., the Court allowed an appeal from summary judgment. The motion judge erred in law because he treated an “entire agreement” clause in a purchase agreement as precluding a fraudulent misrepresentation defence. This was contrary to settled law. Further, the Court held that it was an error to determine the preclusive effect of the clause based on the fact that the appellants had opportunities to perform due diligence. Further, in reading the motion judge’s reasons as a whole, the Court did not agree that he determined, independently of his approach to the entire agreement clause, that there was no genuine issue requiring a trial as to whether a fraudulent misrepresentation was made.

In Don Mills Residents Inc. v. Toronto (City), the Court found that the City of Toronto was entitled to change its mind about whether to require developers to build two community centres in Don Mills (one at Don Mills and Eglinton and one at Don Mills and Lawrence) as initially envisioned, or whether to build one larger community centre at Don Mills and Eglinton. The decision turned on whether minutes of settlement entered into between the City and the Developer at an OMB proceeding to which the Don Mills residents had been given intervener status was a binding and enforceable agreement requiring the City to build both community centres. The Court upheld the application judge’s decision that it was not binding and enforceable on the City.

Finally, the second edition of Civil Procedure and practice Ontario, 2022 ONCA 720 (CPPO) is now live on CanLII’s website. For those who may not know, CPPO offers to the public, the profession and the judiciary, a free online set of annotated Rules of Civil Procedure, as well as the Courts of Justice Act and the Limitations Act, 2002, complete with commentary and case law. The project was coordinated by Professor Noel Semple of Windsor Law School, and the chapters were written by a host of prominent and knowledgeable practitioners and judges. John Polyzogopoulos had the privilege of co-authoring the chapters on references (Rules 54 and 55).

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email
Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Stelmach Project Management Ltd. v. Kingston (City), 2022 ONCA 741

Keywords: Municipal Law, Statutory Interpretation, Land Use Planning, By-laws, Development Charges, Municipal Act, 2001, S.O. 2001, c. 25, ss. 10(2), 15(1), 391, 394(1)(e), Development Charges Act, 1997, S.O. 1997, c. 27, ss. 2, 5, 10(1), 10(2)(7), 12(1), Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 71(c), Fees and Charges, O. Reg. 584/06, s. 2(1), Mississauga (City) v. Erin Mills Corp. (2004), 71 O.R. (3d) 397 (C.A.), Ontario Cancer Treatment and Research Foundation v. Ottawa (City) (1998), 38 O.R. (3d) 224 (C.A.), Croplife Canada v. Toronto (City) (2005), 75 O.R. (3d) 357 (C.A.), R. v. Greenbaum, [1993] 1 S.C.R. 674, Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641 (C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Canada v. Cheema, 2018 FCA 45, Whiteley v. Guelph (City) (1999), 14 M.P.L.R. (3d) 146 (Ont. OMB), Nylene Canada Inc. v. Corporation of the Town of Arnprior, 2017 ONSC 795, John Mascarin and Paul De Francesca, Annotated Land Development Agreements, loose-leaf (2022 Release 3), Robert Macaulay and Robert Doumani, Ontario Land Development: Legislation and Practice, loose-leaf (1999 Release 3), John Mascarin and Christopher J. Williams, Ontario Municipal Act & Commentary, 2023 ed. (Markham: LexisNexis Canada Inc., 2022), Ruth Sullivan, The Construction of Statutes, 7th ed. (Markham: LexisNexis Canada Inc., 2022)

Lake v. LaPresse, 2022 ONCA 742

Keywords: Employment Law, Wrongful Dismissal, Termination without Cause, Damages, Mitigation, Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), Paquette v. TeraGo Networks Inc., 2016 ONCA 618, Red Deer College v. Michaels, [1976] 2 S.C.R. 324, Gryba v. Moneta Porcupine Mines Ltd. (2000), 5 C.C.E.L. (3d) 43 (Ont. C.A.), Link v. Venture Steel Inc., 2010 ONCA 144, Humphrey v. Mene Inc., 2022 ONCA 531, McNevan v. AmeriCredit Corp., 2008 ONCA 846, Neilipovitz v. ICI Paints (Canada) Inc. (2002), 27 C.C.E.L. (3d) 256 (Ont. S.C.), Carter v. 1657593 Ontario Inc., 2015 ONCA 823, Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 (C.A.), Rowe v. General Electric Canada Inc. (1994), 8 C.C.E.L. (2d) 95 (Ont. Gen. Div.), Parks v. Vancouver International Airport Authority, 2005 BCSC 1883

Crestwood Preparatory College Inc. v. Smith, 2022 ONCA 743

Keywords: Civil Procedure, Partial Settlement Agreements, Disclosure Obligations, Abuse of Process, Remedies, Stay of Proceedings, Poirier v. Logan, 2022 ONCA 350, Aecon Buildings v. Stephenson Engineering Limited, 2010 ONCA 898, Handley Estate v. DTE Industries Limited, 2018 ONCA 324, Tribecca Finance Corp. v. Harrison, 2019 ONSC 1926, Magnotta Winery Corporation v. Ontario (Alcohol and Gaming Commission), 2021 ONSC 178, Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2021 ONSC 984, Waxman v. Waxman, 2021 ONSC 2180, Mann Engineering Ltd. v. Desai, 2021 ONSC 2245, Caroti v. Vuletic, 2021 ONSC 2778, Skymark Finance Corporation v. Her Majesty the Queen in Right of Ontario et al. (27 July 2021), Oshawa, 17/131909 (Ont. S.C.), Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2022 ONCA 66, Waxman v. Waxman, 2022 ONCA 311, Hamilton-Wentworth District School Board v. Zizek, 2022 ONCA 638, CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467, Pettey v. Avis Car Inc. (1993), 13 O.R. (3d) 725 (Gen. Div.), Laudon v. Roberts, 2009 ONCA 383, Aviaco International Leasing Inc. v. Boeing Canada Inc. (2000), 9 B.L.R. (3d) 99 (Ont. S.C.)

10443204 Canada Inc. v. 2701835 Ontario Inc., 2022 ONCA 745

Keywords: Contracts, Interpretation, Entire Agreement Clauses, Defences, Rescission, Fraudulent Misrepresentation, Civil Procedure, Summary Judgment, Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, 1018429 Ontario Inc. v. Fea Investments Ltd. (1999), 179 D.L.R. (4th) 268 (Ont. C.A.), Hasham v. Kingston (1991), 4 O.R. (3d) 514 (Div. Ct.), Soboczynski v. Beauchamp, 2015 ONCA 282, Free Ukrainian Society (Toronto) Credit Union Ltd. v. Hnatkiw et al., [1964] 2 O.R. 169 (C.A.), Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19

Don Mills Residents Inc. v. Toronto (City), 2022 ONCA 752

Keywords: Municipal Law, Site Plan Control, Contracts, Interpretation, Intention to Create Binding Legal Relations, Essential Terms, Agreements to Agree, Minutes of Settlement, Enforceability, Privity, Remedies, Specific Performance, Damages, Planning Act, R.S.O. 1990, c. P.13, s. 7 and 37, Hi-Rise Structures Inc. v. Scarborough (City) (1992), 10 O.R. (3d) 299 (C.A.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

 

Short Civil Decisions

Art for Everyday Inc. v. Canarctic J.F.K. Inc., 2022 ONCA 747

Keywords: Contracts, Real Property, Commercial Leases, Default, Termination, Notice

Chippewas of Nawash Unceded First Nation v. Canada (Attorney General), 2022 ONCA 755

Keywords: Aboriginal Law, Real Property, Aboriginal Title to Submerged Land, Public Right of Navigation, Civil Procedure, Intervenors, Fresh Evidence, Rules of Civil Procedure, r. 13.03(2), Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1990), 74 O.R. (2d) 164 (C.A.), Foster v. West, 2021 ONCA 263, Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 29, Keewatin v. Ontario (Natural Resources), 2012 ONCA 472, McIntyre Estate v. Ontario (Attorney General) (2001), 26 C.P.C. (5th) 312 (Ont. C.A.)

Ryan v. Herbert, 2022 ONCA 750

Keywords: Family Law, Civil Procedure, Approval of Settlements, Rules of Civil Procedure, rr. 7.08, 21.01(3), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 87(2), Azzeh v. Legendre, 2017 ONCA 385


CIVIL DECISIONS

Stelmach Project Management Ltd. v. Kingston (City), 2022 ONCA 741

[Feldman, Tulloch and Miller JJ.A.]

Counsel:

M.S. Polowin and J.A. Polowin, for the appellant
T. Fleming, for the respondent

Keywords: Municipal Law, Statutory Interpretation, Land Use Planning, By-laws, Development Charges, Municipal Act, 2001, S.O. 2001, c. 25, ss. 10(2), 15(1), 391, 394(1)(e), Development Charges Act, 1997, S.O. 1997, c. 27, ss. 2, 5, 10(1), 10(2)(7), 12(1), Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 71(c), Fees and Charges, O. Reg. 584/06, s. 2(1), Mississauga (City) v. Erin Mills Corp. (2004), 71 O.R. (3d) 397 (C.A.), Ontario Cancer Treatment and Research Foundation v. Ottawa (City) (1998), 38 O.R. (3d) 224 (C.A.), Croplife Canada v. Toronto (City) (2005), 75 O.R. (3d) 357 (C.A.), R. v. Greenbaum, [1993] 1 S.C.R. 674, Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641 (C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Canada v. Cheema, 2018 FCA 45, Whiteley v. Guelph (City) (1999), 14 M.P.L.R. (3d) 146 (Ont. OMB), Nylene Canada Inc. v. Corporation of the Town of Arnprior, 2017 ONSC 795, John Mascarin and Paul De Francesca, Annotated Land Development Agreements, loose-leaf (2022 Release 3), Robert Macaulay and Robert Doumani, Ontario Land Development: Legislation and Practice, loose-leaf (1999 Release 3), John Mascarin and Christopher J. Williams, Ontario Municipal Act & Commentary, 2023 ed. (Markham: LexisNexis Canada Inc., 2022), Ruth Sullivan, The Construction of Statutes, 7th ed. (Markham: LexisNexis Canada Inc., 2022)

facts:

The appellant land developer built two multi-unit residential properties in the City of Kingston (the “City”). The appellant either paid or would be required to pay the City $410,000 in impost fees to cover capital costs associated with the installation of water and sewer infrastructure needed to service the two properties. The City imposed the fees under By-law 2014-136 (the “By-law”), which was passed pursuant to s. 391 of the Municipal Act, 2001 (the “MA”).

Historically, it was common practice for municipalities to fund wastewater and sewer infrastructure through charges under the Development Charges Act, 1997 (the “DCA”). Prior to statutory reform in the 1980s, municipalities raised revenue for development through lot levies, which were contracts with landowners and were a condition to obtaining development approval. The DCA replaced the lot levy system. The DCA set out procedures that municipalities must follow in developing a by-law that imposes development charges. Specifically, the municipality is required to assess and calculate the increase in need for services attributable to the anticipated development, complete a public development charge background study, hold a public meeting, and provide a right of appeal to what was then the Ontario Municipal Board (the “OMB”).

The DCA did not affect the other tools municipalities used for raising revenue, such as the MA. Part II of the MA granted the City the broad power to pass by-laws for 11 enumerated purposes, which included by-laws in respect of services a municipality is authorized to provide. Part III of the MA granted the City with the specific power to make by-laws that addressed matters such as highways, transportation, waste management, public utilities, and health and safety. Subsection 394(1)(e) of the MA restricted the power of municipalities to impose fees or charges with respect to the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources.

At the application hearing, the appellant argued that the City was obligated to pass the By-law under the DCA, rather than the MA, because specific by-law making power ought to be preferred over general power. In the alternative, it was argued fresh on appeal that the By-law was illegal for failure to import all requisite procedural protections. Lastly, the appellant argued that the charges under the By-law were prohibited by ss. 394(1)(e) of the MA.

The application judge held that the City was permitted to pass the By-law pursuant to the general powers conferred under the MA. In addition, she held that the charges imposed by the By-law were not restricted by virtue of ss. 394(1)(e) of the MA.

issue:
  1. Did the application judge err in determining that the City was permitted to rely on the general by-law making powers of the MA, rather than the specific by-law making powers of the DCA?
  2. Did the City fail to import the procedural protections required to render the By-law legal?
  3. Did the application judge err in determining that ss. 394(1)(e) of the MA did not act as a restriction to the charges levied through the By-law?
holding:

Appeal dismissed.

reasoning:

1. No.

The Court held that the application judge made no error in her interpretation and application of the MA. The application judge’s conclusion that the City has multiple sources of power to impose fees to recover capital costs, and that it was not compelled to rely on the DCA, was correct.  The Court agreed with the application judge that the City relied on the general power in s. 10 of the MA, but it also satisfied the specific requirements set out in ss. 391(2) and 394. The Court noted that this case was fundamentally different from R v. Greenbaum, which was relied on by the appellant, because in that case the municipality relied on a general power but failed to satisfy the requirements of a specific provision.

In addition, the Court noted that the legislative history of the MA and the DCA made it clear that the intention of the legislators was to create a dual regime, whereby the City could pass By-laws under its choice of statute. For example, when the powers of municipalities were broadened under the MA, the supremacy clause in the DCA was removed. Furthermore, s. 2(1) of the Regulations: Fees and Charges under the MA expressly prohibited municipalities from “double dipping” by imposing fees or charges for a development that have already been imposed under the DCA. Lastly, the Court noted that the nature of the powers granted under the two statutes are different. The MA does not empower municipalities to impose land taxes, whereas development charges under the DCA have been judicially recognized as a form of land tax: Greater Toronto Airports Authority v. Mississauga (City).

2. No

The Court held that the By-law was legally passed. Subsection 15(1) of the MA states that if the power exists to pass a by-law under section 9, 10, or 11 and also under a specific provision of this or any other Act, the power conferred is subject to the procedural requirements, including appeals, that apply to the power contained in the specific provision. The appellant argued that the phrase “any other Act” referred to the DCA because it provided the same power to pass the By-law but under a more specific provision. Therefore, the appellant argued that there must be a right of appeal akin to that in the DCA in order for the By-law to be legal.

The Court noted that, while it is true that the City provided for no right of appeal, the appellant failed to properly interpret the statute. It was clear that the intention of the legislature was that s. 15 of the MA was only limited by procedural requirements contained with the more specific provision of the MA. The Court noted that this interpretation was correct for two reasons.

First, “any other Act” was understood in the context of the legislative history to refer to statutes that removed specific powers from the MA to a new statute in the 2001 reform (such as the Fluoridation Act). The Court stated that, in the 2001 reform, the words “any other Act” were added to s. 15. This interpretation did not apply to the DCA because it pre-dated the MA and did not have its genesis in one of its predecessors.

Second, the presumption of legislative coherence supported the view that the specific provisions of the DCA were not intended to be referenced in s. 15 of the MA because it did not confer the same power to pass a by-law. Subsection 391(2) permitted a charge on a person, while ss. 2(1) of the DCA authorized charges against land. If the two regimes confer different by-law making power, then the specific provisions applicable to each regime should not be interpreted as interchangeable for s. 15 purposes. In addition, at the time that the By-law was passed, s. 399 of the MA provided a review mechanism for charges levied under s. 391. Moreover, ss. 71(c) of the Ontario Municipal Board Act prevented such reviews. Therefore, it would be inconsistent to hold that charges levied under the MA must contain the same appeal mechanism as provided through the DCA.

3. No.

The Court held that the application judge did not err in her interpretation of ss. 394(1)(e) of the MA. Subsection 394(1)(e) provided that: “No fee or charge by-law shall impose a fee or charge that is based on, in respect of or is computed by reference to … the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources.”

The Court noted that the overall purpose of ss. 394(1) was to prevent municipalities from imposing fees or charges that are unrelated to municipal governance. The appellant argued that the purpose of ss. 394(1)(e) ought to have been interpreted differently because it was structured differently from the rest of the section: 1) it did not expressly exclude services provided by municipalities; and 2) it mentioned the generation, exploitation, etc. of natural resources at large, rather than specifying generation, exploitation, etc. “by a person”. Therefore, the appellant contended that the restriction contained in ss. 394(1)(e) ought to apply to the transportation of natural resources by the municipality as well as third parties.

The Court disagreed with the appellant’s interpretation. It held that ss. 394(1)(e) did not prevent the City from imposing a charge on land developers for the cost of providing infrastructure that transports water and wastewater for the benefit of its ratepayers. Otherwise, the City would be enjoined from imposing water and wastewater user fees on ratepayers, which would be an absurd result.


Lake v. LaPresse, 2022 ONCA 742

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

Counsel:

D. Persaud and M. Rowe, for the appellant
S. Lorquet and V. Champoux, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Termination without Cause, Damages, Mitigation, Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), Paquette v. TeraGo Networks Inc., 2016 ONCA 618, Red Deer College v. Michaels, [1976] 2 S.C.R. 324, Gryba v. Moneta Porcupine Mines Ltd. (2000), 5 C.C.E.L. (3d) 43 (Ont. C.A.), Link v. Venture Steel Inc., 2010 ONCA 144, Humphrey v. Mene Inc., 2022 ONCA 531, McNevan v. AmeriCredit Corp., 2008 ONCA 846, Neilipovitz v. ICI Paints (Canada) Inc. (2002), 27 C.C.E.L. (3d) 256 (Ont. S.C.), Carter v. 1657593 Ontario Inc., 2015 ONCA 823, Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 (C.A.), Rowe v. General Electric Canada Inc. (1994), 8 C.C.E.L. (2d) 95 (Ont. Gen. Div.), Parks v. Vancouver International Airport Authority, 2005 BCSC 1883

facts:

The respondent is a daily online French language newspaper based in Montréal, Québec. The appellant was hired in August 2013 and worked for the respondent for five and a half years as General Manager. The appellant was the most senior employee in the Toronto division, and managed the sales team to generate advertising revenue in Toronto and English Canada. At one time, the appellant had thirteen direct reports, and at the date of dismissal had eight. The appellant’s compensation consisted of an annual base salary of $185,000, with a car allowance, annual bonus, pension, and other benefits. The appellant was 52 years old at the date of her dismissal.

The appellant’s employment was terminated after the respondent decided to close its Toronto office. The appellant was notified on March 25, 2019, that her employment would end effective May 30. The appellant stopped working on April 30, 2019. After the termination of her employment, the appellant conducted a job search, but remained unemployed at the date of the summary judgment motion, two years after her dismissal.

There was no dispute that the appellant’s employment was terminated without cause and that she was entitled to reasonable notice at common law. The main issues on the summary judgment motion was the period of reasonable notice, whether the appellant was entitled to compensation for loss of bonus over the reasonable notice period, and whether the appellant’s notice should have been reduced for failure to mitigate.

In determining the reasonable notice period, the motion judge applied the factors outlined in Bardal v. Globe & Mail Ltd. The motion judge fixed the reasonable notice period at eight months after considering the appellant’s level of seniority, the duration of her employment, her age at the date of dismissal, and her work experience in management in sales, especially in the media industry. In applying the test from Paquette v. TeraGo Networks Inc, the motion judge interpreted the respondent’s bonus plan and concluded that the appellant would have been entitled to an annual bonus of $39,065.

On the question of mitigation, the motion judge recognized that the onus was on the respondent to establish that the appellant failed to mitigate. There were two parts to the analysis: first, whether the appellant took reasonable steps, and second, if such steps had been taken that she would have likely obtained comparable employment. The motion judge concluded that the appellant did not reasonably mitigate her damages because: (a) she waited too long before beginning her job search; (b) she “aimed too high” in applying for vice-president roles and she should have applied for less senior roles if she continued to remain unemployed; and (c) the appellant waited too long before applying for any jobs, and she applied to very few jobs. The motion judge found that if the appellant had expanded the parameters of her job search, searched earlier, and applied for more positions, the appellant’s chances of obtaining a position would have improved. The motion judge found that the appellant chose unreasonably to limit her job search, which had a corresponding impact on her ability to find work.

Thus, the motion judge reduced the notice period of eight months by two months to account for the appellant’s failure to take reasonable steps to mitigate her damages.

The motion judge granted judgment in favour of the appellant in the total sum of $97,491.87. This amount accounted for damages for lost bonus for the period that the appellant was still employed by the respondent, and damages for wrongful dismissal, based on six months of her compensation package, less $40,026.22, the amount already received from the respondent. The respondent was awarded partial indemnity costs on the basis that it had made an offer to settle the litigation early in the proceedings that exceeded the amount of the judgment.

issues:
  1. Did the motion judge err in concluding that the appellant failed to take reasonable steps to mitigate her damages?
  2. Did the motion judge err in her assessment of whether the appellant would have found comparable employment if she had taken reasonable steps to mitigate?
holding:

Appeal allowed.

reasoning:
  1. Yes.

The appellant argued that there were three errors in the first stage of the motion judge’s mitigation analysis: (1) the motion judge erred in concluding that the appellant waited too long before beginning her job search; (2) the motion judge erred in principle by faulting her for not applying for positions that paid less than the position from which she was dismissed; and, (3) the motion made a palpable and overriding error in concluding that the appellant “aimed too high” and focused her job search on roles that represented a promotion over her prior role.

The Court disagreed with the appellant’s first argument but agreed with the appellant’s second and third arguments.

The Court found that the motion judge erred in principle when she accepted that, in mitigation, after a reasonable period of attempting to find similar employment, a dismissed employee must begin searching for a lesser paying job, and, further, when she concluded that the appellant should have applied for a sales representative role as she continued to remain unemployed. The Court clarified that the obligation of a terminated employee in mitigation is to seek “comparable employment”, which typically is employment that is comparable in status, hours and renumeration to the position held at the time of dismissal. The Court held that there was no obligation for the appellant to seek less remunerative work, such as a sales representative role.

The Court also found that the motion judge made a palpable and overriding error when she concluded that the appellant aimed too high when she applied for vice-president positions and had focused her job search on roles that represented a promotion over her prior role. The Court found that the appellant’s evidence of her steps to mitigate were substantial. The appellant detailed her efforts at searching for jobs, where she utilized: (1) LinkedIn and other online job boards almost daily; (2) keywords relevant to the range of job titles that were comparable and were not limited to vice-president positions; (3) networking, including attending meetings and conferences; (4) career transition services provided by the respondent; and, (5) additional coaching (privately paid).

The Court noted that the appellant’s affidavit provided that she had applied for 20 suitable positions and that this evidence made clear that she applied to positions that matched her work experience and qualifications, rather than focussing on job titles.

The Court’s view was that the motion judge placed too much emphasis on the titles of positions the appellant applied for, without considering the appellant’s evidence that the positions were similar to her prior work experience. Without evidence contradicting the appellant’s assertion that the vice-president roles had similar job responsibilities to her previous employment, the motion judge speculated, based on the title of the positions alone, that they were not comparable. The Court determined that this error influenced the motion judge’s determination that the appellant failed to take reasonable steps to mitigate her damages.

The Court clarified that the onus was on the respondent to prove the appellant’s failure to mitigate. Typically, when asserting a terminated employee failed to mitigate, the employer will lead evidence on this point. In this case, the Court found that the respondent offered no evidence to counter the appellant’s evidence that the vice-president positions had similar job responsibilities to her previous employment, and that opportunities in the industry at the time were limited.

  1. Yes.

The appellant asserted that, at the second stage of the test for mitigation, the motion judge made an inference that was not supported by the evidence. The motion judge engaged in speculation when, after concluding that the appellant had not taken reasonable steps to mitigate her damages, she stated that had the appellant expanded the parameters of her job search, searched earlier, and applied for more positions, her chances of obtaining a position would have improved significantly.

The Court clarified that the second part of the test on mitigation requires the court to be satisfied that, if reasonable steps had been taken, the terminated employee would likely have found a comparable position within the reasonable notice period. The Court referred to Rowe v. General Electric Canada Inc, where Ferguson J. observed that “the breach of the plaintiff’s duty to mitigate will only be relevant if the breach is proved to be causative [of the plaintiff’s loss].” The Court found that, in this case, there was no evidence to support the conclusion that the terminated employee would likely have found comparable employment if reasonable and appropriate steps in mitigation had been taken.

The Court found that the motion judge’s inference did not go so far as to meet the second stage of the mitigation test. Rather, the motion judge inferred that the appellant’s chances of obtaining a position would have improved significantly, and she concluded that, if vice-president roles were available, more junior roles were also available. The Court found that if her reference to “more junior roles” is understood to mean comparable employment, the inference made by the motion judge extended only to the conclusion that such positions were available. The Court noted that the motion judge did not ask or answer the proper question at the second stage: whether the respondent had proven that, if reasonable steps in mitigation had been taken by the appellant, she would have found a comparable position during the reasonable notice period.


Crestwood Preparatory College Inc. v. Smith, 2022 ONCA 743

[Feldman, Hoy and Favreau JJ.A.]

Counsel:

S. Dewart and B. Hughes, for the appellants
S. Aylward, for the respondent

Keywords: Civil Procedure, Partial Settlement Agreements, Disclosure Obligations, Abuse of Process, Remedies, Stay of Proceedings, Poirier v. Logan, 2022 ONCA 350, Aecon Buildings v. Stephenson Engineering Limited, 2010 ONCA 898, Handley Estate v. DTE Industries Limited, 2018 ONCA 324, Tribecca Finance Corp. v. Harrison, 2019 ONSC 1926, Magnotta Winery Corporation v. Ontario (Alcohol and Gaming Commission), 2021 ONSC 178, Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2021 ONSC 984, Waxman v. Waxman, 2021 ONSC 2180, Mann Engineering Ltd. v. Desai, 2021 ONSC 2245, Caroti v. Vuletic, 2021 ONSC 2778, Skymark Finance Corporation v. Her Majesty the Queen in Right of Ontario et al. (27 July 2021), Oshawa, 17/131909 (Ont. S.C.), Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2022 ONCA 66, Waxman v. Waxman, 2022 ONCA 311, Hamilton-Wentworth District School Board v. Zizek, 2022 ONCA 638, CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467, Pettey v. Avis Car Inc. (1993), 13 O.R. (3d) 725 (Gen. Div.), Laudon v. Roberts, 2009 ONCA 383, Aviaco International Leasing Inc. v. Boeing Canada Inc. (2000), 9 B.L.R. (3d) 99 (Ont. S.C.)

facts:

Mr. P is the chairman of the appellant corporations, Mandrake Consultants Corporation (“Mandrake”), NexCareer Inc. (“NexCareer”) and Radar Headhunters Inc. (“Radar”), and a corporate principal of the appellants, Crestwood Preparatory College Inc. and Crestwood School. Mr. P became involved in a personal dispute with another resident in his Florida home community, Mr. PM. Subsequently, Mr. P was the target of a vicious hate mail campaign against himself and the appellant corporations, which he attributed to Mr. PM. Mr. P later learned that the respondent, Mr. S, a former employee, was directly involved in the hate mail campaign along with his business partner, Mr. T.  Mr. S’s employment with Mandrake, an executive search firm, had previously been terminated in 2011, resulting in a settlement agreement and Minutes of Settlement between Mr. S and Mandrake, NexCareer, and Radar in January 2012 (the “Mandrake Settlement Agreement”). This led to litigation in Florida and in Ontario. Mr. P sued Mr. PM in Florida in relation to the hate mail campaign. When he learned that Mr. S and Mr. T were also involved, he sued them in a separate Florida action.

In August 2017, the first Ontario action against Mr. S alleged breaches of the non-competition and confidentiality clauses of the Mandrake Settlement Agreement. That claim was amended in August 2018, without naming Mr. T as a defendant, to plead that Mr. T knowingly assisted in the breaches and that Mr. S and Mr. T were involved in the hate mail campaign.

In August 2018, the second Ontario action was commenced by the appellants against Mr. S, Mr. K and Fish Recruit Inc. (the “K defendants”), alleging that Mr. S breached the Mandrake Settlement Agreement by conspiring with the K defendants to place job candidates with Fish Recruit Inc. using confidential information from Mandrake.

In September 2018, the appellants commenced the third Ontario action against Mr. S and Mr. T in respect of their involvement in the hate mail campaign, with both parties as named defendants. Mr. P and the appellants entered into a number of settlement agreements with the defendants in the Ontario actions other than Mr. S, which contemplated the co-operation of the settling defendants with the plaintiffs in the Florida and Ontario actions.

In March 2019, in respect of the second Ontario action, the appellants entered into a Tolling and Cooperation Agreement with the K defendants which required them to provide evidence in their possession concerning Mr. S’s misappropriation of Mandrake’s confidential information and to cease doing business with Mr. S, in exchange for a release (the “K Agreement”). This agreement was not disclosed to the respondent.

In April 2018, in respect of the Florida action and prior to the commencement of the third Ontario action, Mr. P and Mr. T entered into a Tolling and Cooperation Agreement and Release of Liability Agreement (the “First T Agreement”). As part of this settlement, Mr. T agreed to provide co-operation in the Florida action and in “any related proceedings” which were defined in such a way as to include proceedings related to the hate mail campaign. The First T Agreement was not disclosed to the respondent following the commencement of the third Ontario action.

In November 2019, over one year after the commencement of the third Ontario action, which named both Mr. S and Mr. T as defendants, the First T Agreement was supplemented and amended to include the third Ontario action (the “Second T Agreement”, collectively the “T Agreements”). That agreement was signed by Mr. P on his own behalf and on behalf of the appellant corporations with intent to bind them. The terms of co-operation required Mr. T to waive certain defences and to provide Mr. P with extensive evidence, including information in his possession relevant to his relationship with Mr. S. The Second T Agreement was not disclosed to the respondent.

In April 2019, counsel delivered a proposed draft order which did not disclose the forthcoming dismissal of the action against the K defendants, which actually occurred in May 22, 2019. On May 15, 2019, counsel for the K defendants left a voicemail for the respondent’s former counsel, advising that the K defendants had settled with the plaintiffs without disclosing the co-operation terms of the K Agreement.

In July 2019, after appointing new counsel, the respondent consented to the consolidation of the Ontario actions which was sought by the appellants in the Ontario actions in January 2019. The consolidation order was obtained in July 2019 based on an affidavit of plaintiffs’ counsel which was not served on the respondent’s counsel. This affidavit referred to the dismissal of the second Ontario action against the K defendants but maintained that no “litigation agreement” was reached between the plaintiffs and the K defendants.

In August 2019, the consolidated statement of claim served and inadvertently continued to include the claims against the K defendants. After serving the consolidated statement of claim, appellants’ counsel then sought an order to preserve and inspect the respondent’s electronic devices and to implement a schedule for discoveries, without disclosure of the K Agreement or the First T Agreement.

In December 2019, the issue of disclosure of the K Agreement arose when the respondent’s new counsel requested all information regarding the K Agreement, which was initially refused. In response to a stay motion, the terms of the K Agreement were disclosed in part.

In November 2020, the T Agreements were produced in the Florida litigation. Appellants’ counsel initially took the position that they were not relevant or applicable to the Ontario action. The T Agreements were eventually produced by Mr. T’s counsel. After the T Agreements were terminated by Mr. P on February 15, 2021, they were then disclosed to the respondent on February 19, 2021. The respondent had not delivered a statement of defence.

The issue before the motion judge was whether the appellants were obliged to immediately disclose the K Agreement and the T Agreements. The motion judge found that both the K and the T Agreements fundamentally changed the litigation landscape in the circumstances of this case, as the settlement agreements changed the expected relationship between the Plaintiffs and certain Defendants from an adversarial one to a co-operative one. The settling defendants did not play a peripheral role in the action, but were central to the allegations against Mr. S in respect of the breaches of the Mandrake Settlement Agreement and in respect of the hate mail campaign and there was a natural expectation that such conspirators would have a common interest in defeating the plaintiffs’ claims.

The motion judge also found that even though the settling defendant had not yet pleaded in the action, the defendants should know before doing so whether, despite the claims in the statement of claim, another defendant is, in fact on the plaintiff’s side and providing assistance to the plaintiff. It would be contrary to the rationale for the disclosure obligation to hold that it is not triggered before production and discovery are scheduled.

The motion judge concluded that the appellants’ failure to disclose the settlement agreements that “fundamentally changed the landscape of the litigation” required a permanent stay of the proceedings against the respondent.

issues:
  1. Did the motion judge err by failing to identify any pleaded position or other representation from which the settling defendants switched?
  2. Did the motion judge err in finding that co-defendants are presumed to be aligned with each other in an action?
  3. Did the motion judge err in finding that the immediate disclosure obligation applies to settlements with defendants against whom the action is dismissed?
holding:

Appeal dismissed.

reasoning:
  1. No.

The Court held that the position of the parties reflected in the pleadings is not an essential part of the disclosure test and is not a condition precedent or a legal requirement to the determination that the obligation to disclose has arisen. The court was not limited to an examination of the pleadings in order to discern whether the settlement agreement significantly altered the adversarial relationship among the parties. In Handley Estate v. DTE Industries Limited the court approved the test from Aviaco International Leasing Inc. v. Boeing Canada Inc. that referred to a change in the “apparent relationships” between any parties “that would otherwise be assumed from the pleadings or expected in the conduct of the litigation”.

Additionally, the Court noted that to hold otherwise could defeat the intent of the disclosure obligation which is to ensure that when parties take steps in the litigation, and when the court makes rulings, the parties and the court are not being actively misled as to the consequences of those steps or rulings.

  1. No.

The appellant submitted that the motion judge erred by failing to conduct the necessary inquiry, in the absence of pleadings, to determine whether there was other evidence to establish that the settling defendants would be expected to be aligned in their positions with the respondent.  The appellants further submitted that the motion judge erred by relying instead on the expectation that where two defendants are alleged to have conspired together or been involved in joint wrongdoing, they “would have a common interest in defeating a plaintiff’s claim”. The appellants postulate that Mr. S may well have expected that Mr. T would seek to put all the blame on him for the hate mail campaign, or that the K defendants would deny that they knew that the information they were receiving from him was confidential.

The Court did not give effect to this argument, as it amounted to an attack on the inferences drawn by the motion judge from the record and the application of the legal test to those facts. The motion judge made no palpable or overriding error in drawing the inference from the statement of claim that one would expect the defendants to be adverse to the plaintiffs’ interest based on the allegations of conspiracy and common action.

The Court found that motion judge was not required to find any specific misrepresentation. The motion judge correctly reviewed the specific co-operation terms in the K Agreement and the Second T Agreement to support her finding that there was a change in the relationship between the plaintiffs and the settling defendants from an adversarial one to a co-operative one. Finally, the Court noted that the motion judge was entitled to determine that the conduct required of the settling defendants under the terms of these settlement agreements would not be expected by the non-settling defendant in the normal course of the litigation.

  1. No.

The appellants argued that the obligation of immediate disclosure does not apply where the action is promptly dismissed against a settling defendant. The Court disagreed and held that the obligation of immediate disclosure applies to agreements where, by definition, the claim against the settling defendant is discontinued in exchange for the settling defendant’s co-operation in the plaintiff’s action against the non-settling defendant. The Court stated that, in any event, Mr. T remained a defendant in the action due to the termination of the Second T Agreement and the K defendants had ongoing disclosure obligations under the K Agreement.


10443204 Canada Inc. v. 2701835 Ontario Inc., 2022 ONCA 742

[Miller, Zarnett and Coroza JJ.A.]

Counsel:

S. Bieber and R. Trenker, for the appellants
M. I. Rotman and Y. Jaimangal, for the respondent

Keywords: Contracts, Interpretation, Entire Agreement Clauses, Defences, Rescission, Fraudulent Misrepresentation, Civil Procedure, Summary Judgment, Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, 1018429 Ontario Inc. v. Fea Investments Ltd. (1999), 179 D.L.R. (4th) 268 (Ont. C.A.), Hasham v. Kingston (1991), 4 O.R. (3d) 514 (Div. Ct.), Soboczynski v. Beauchamp, 2015 ONCA 282, Free Ukrainian Society (Toronto) Credit Union Ltd. v. Hnatkiw et al., [1964] 2 O.R. 169 (C.A.), Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19

facts:

In May 2019, C. P. and 2701835 Ontario Inc. (collectively the “appellants”) entered into a purchase agreement (the “APS”) with the respondent. Under the APS, the appellants agreed to purchase a coin laundry business located in Brampton, Ontario from the respondent. A deposit was paid on the signing of the APS. The APS contemplated the balance being paid on closing, which was originally scheduled for June 27, 2019. The APS contained an entire agreement clause which provided, in part, as follows: “There is no representation, warranty, collateral agreement or condition, affecting this Agreement other than as expressed herein.”

The APS was conditional on the right of the appellants to attend the business for at least 15 days to “verify the income”, which gave the appellants the right to terminate the APS within a specific time window if not satisfied. The appellants did not exercise any right to terminate.

In June 2019, the parties agreed to amend the terms concerning how the purchase price would be paid, and they proceeded to close the purchase in July 2019. In November 2019, the respondent commenced an action against the appellants alleging that there was default in payment of an instalment, such that the entire balance of the purchase price was now due. The appellants defended and counterclaimed. They alleged that the APS and the obligations they undertook in favour of the respondent on its completion had been the result of fraudulent or negligent misrepresentations made to them by the respondent and its principal concerning the gross revenues of the coin laundry business.

The appellants swore that in the negotiations leading up to the APS, the respondent’s principal assured him that the business was profitable, telling him that it generated $12,000 per month in revenue. The appellants stated that they entered into the APS “[b]ased on these representations”. The appellants described how the APS was conditional on verifying income of the business by attending at it for 15 days, and that C.P. had attended 14 times and was provided, by the respondent’s principal’s son, with certain daily totals which were consistent with the $12,000 per month figure. C.P. deposed that in light of the revenue generated from the time the sale closed, he believed that the respondent’s principal “misrepresented the gross income of the business in order to get me to purchase it” and that the daily totals provided when he attended had been falsified “in order to induce me to purchase the business, a representation which I relied upon in doing so”.

The motion judge observed evidence that $12,000 was provided on a one-page summary financial statement given by the respondent’s real estate agent to the appellants after the APS was signed, and that the respondent’s principal had admitted the figure was his own calculation. The motion judge also noted the appellants’ email expressing the agreement to proceed with a vendor take-back mortgage “included calculations in which he states he relied on the $12,000 monthly income … in his assessment of his ability to repay the mortgage.”

The motion judge identified the issue to be whether the appellants’ claim of fraudulent misrepresentation raised a genuine issue for trial. He concluded that the entire agreement clause should be enforced, and accordingly, he found that there was no genuine issue that required a trial and dismissed the action by way of summary judgment.

issues:
  1. Did the motion judge err in giving the entire agreement clause preclusive effect?
  2. Did the motion judge find that there was no evidence of any fraudulent misrepresentations by the respondent independent of the effect of the entire agreement clause?
holding:

Appeal allowed.

reasoning:
  1. No.

The Court noted that a fraudulent misrepresentation affords a defence to a claim on a contract, because a contract that results from a fraudulent misrepresentation may be avoided or rescinded by the victim of the fraud (Fea Investments Ltd.). A clause in a contract that purports to limit remedies arising from a misrepresentation does not immunize the maker of a fraudulent misrepresentation from the remedies available to the innocent party (Fea Investments).

In Hasham v. Kingston, the clause in issue excluded liability for all representations outside the terms of the contract. The Divisional Court found that the clause could not apply to a misrepresentation that was found to be fraudulent. The reasoning in Hasham was applied by the Court in Fea Investments to conclude that a clause in a contract that limited remedies for misrepresentation did not apply to fraudulent misrepresentations.

In the Court’s view, this was exactly the conclusion reached in Royal Bank of Canada v. 1643937 Ontario Inc, (“RBC”) at paragraph 43: “the defence of misrepresentation is not precluded or diminished by reason only of the existence of an entire agreement clause”.

The Court held that in this case, the motion judge’s conclusion that the entire agreement clause should be “enforced” to preclude the defence of fraudulent misrepresentation departed from the true holding of RBC for two erroneous reasons.

First, the Court held that the motion judge considered RBC to be distinguishable because it was a case of unequal bargaining power. Rather, the Court observed that the court in RBC did not premise its finding about the effect of an entire agreement clause on a fraudulent misrepresentation defence on unequal bargaining power between the parties in that case – it described the effect as something that was already “well-established”. Further, the Court held that a conclusion that an entire agreement clause will be effective to preclude a defence based on fraudulent misrepresentation where the parties have equal bargaining power cannot be drawn from Fea Investments or Hasham. The Court concluded that the policy of the law to discourage fraud is applicable to cases of equal and unequal bargaining power.

Second, the Court held that the motion judge took the word “only” in the passage from RBC – “the defence of misrepresentation is not precluded or diminished by reason only of the existence of an entire agreement clause” – to allow consideration of other factors, the presence of which made the entire agreement clause enforceable to preclude the fraudulent misrepresentation defence. This included the opportunity to ask for better contractual protections, such as a guarantee of income, to terminate the transaction under certain conditions, to hire professional advisors, and to do due diligence. As the motion judge said, even if a misrepresentation was made, “there were several opportunities for the [appellants] to conduct their own due diligence, to obtain independent legal, accounting or real estate advice, and to walk away from the deal before it closed.” The Court observed that the motion judge did not find that the appellants, at any relevant time before closing, learned the true facts and therefore knew the representations made to them were false.

On this second point, the Court reiterated that it is settled law that such opportunities do not deprive the appellants of their right to avoid the contract on the basis of fraudulent misrepresentation.  Ultimately, the Court held that one cannot take an entire agreement clause, which cannot on its own preclude a defence of fraudulent misrepresentation, combine it with a failure of a defendant to take opportunities or exercise due diligence to discover the truth, which on its own cannot preclude such a defence, and treat them together as having that preclusive effect.

  1. No.

The respondent relied on a single sentence in the motion judge’s reasons as follows:

Without recounting the elements [of the tort of fraudulent misrepresentation], I note that there is no evidence from the affidavit or cross-examination which would suggest that [the respondent’s principal] made a false misrepresentation that would invoke this tort given the circumstances of this case.

The respondent argued that the sentence meant that there was no evidence of a statement by the respondent that was false, or that was false to the knowledge of the respondent.

The Court rejected this argument for the following reasons: 1) the motion judge had engaged in an analysis of the effect of the entire agreement clause, an analysis which would have been completely unnecessary if he was satisfied there was no genuine issue requiring a trial that a knowingly false statement had actually been made; 2) before and after the sentence the respondent pointed to noted a factual dispute about whether the representation of monthly revenues had been made before the APS was signed; 3) there was no finding about what the monthly revenues of the business were compared to what C.P. said had been represented by the respondent about them; and 4) the motion judge stated there was no risk of inconsistent results given the continuing action against the real estate agent and broker, because he was not deciding if the $12,000 per month revenue representation was made before the APS was signed.

The Court held that taken together, there was no finding of a lack of a genuine issue for trial independent of noted considerations. The Court remitted the matter to trial.


Don Mills Residents Inc. v. Toronto (City), 2022 ONCA 752

[Gillese, Miller and Coroza JJ.A.]

Counsel:

C. Harris and S. Spitz, for the appellant
R. Zuech and M Lowson, for the respondent

Keywords: Municipal Law, Site Plan Control, Contracts, Interpretation, Intention to Create Binding Legal Relations, Essential Terms, Agreements to Agree, Minutes of Settlement, Enforceability, Privity, Remedies, Specific Performance, Damages, Planning Act, R.S.O. 1990, c. P.13, s. 7 and 37, Hi-Rise Structures Inc. v. Scarborough (City) (1992), 10 O.R. (3d) 299 (C.A.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

The respondents City of Toronto (the “City”) and C/F Realty Holding Ltd. (“CF”) and the appellant entered into minutes of settlement (the “minutes”) respecting a planning appeal launched by CF. The appellant argued that the minutes required the City to construct a community centre at 966 Don Mills Road, a site a little south of Lawrence Avenue known as the Don Mills Centre (“DMC”).

In 2001, CF applied to amend the portion of the North York Official Plan that applied to the site, as well as the relevant zoning by-law. In 2007, CF appealed to the Ontario Municipal Board (“OMB”), now the Ontario Land Tribunal, for approval of Phase 2 of its proposed redevelopment. The appellant was granted party status in CF’s appeal. In March 2010, the parties reached an agreement and provided the OMB with minutes in resolution of the appeal. The minutes provided community benefits from the redevelopment including creation of the Don Mills Community Centre (“DMCC”). The minutes considered terms respecting the DMCC would be implemented through an agreement under s. 37 of the Planning Act.

On February 25, 2011, CF and the City registered on title the s. 37 agreement contemplated by the minutes. As the appellant was not the owner of the lands in question, it was not a party to the s. 37 agreement. The agreement allowed the parties to amend it on consent of both CF and the City. The s. 37 agreement did not require the appellant’s consent to any changes.

Since the minutes were executed in 2010, the area surrounding the DMC had experienced dramatic population growth. In response to this, the City re-evaluated its plans for community services in the area. In 2018, the City approved redevelopment plans for a 60-acre plot of land at Don Mills Road and Eglinton Avenue East (the “Celestica site”). As part of the redevelopment, the City secured 5.58 acres of parkland and a site for a large recreation facility.

In light of the changing needs of the community, the City recommended the creation of a 125,000 square foot facility known as the Celestica Recreation Centre (“CRC”). The CRC would be located at the Celestica site and serve the entire Don Mills community, replacing the proposal to have two smaller community centres, one at the Celestica site at Don Mills and Eglinton, and one at the DMC at Don Mills and Lawrence. In July 2019, City Council voted in favour of the CRC proposal and effected the amendments to the s. 37 agreement with CF. This effectively ended the plans for the DMCC at Don Mills and Lawrence.

The appellant brought an application before the Superior Court seeking: (1) a declaration that the respondent and/or CF were required to build a community centre at the DMC; (2) an injunction requiring the respondent and/or CF to build the DMCC, pursuant to the terms of the minutes; and (3) an order to proceed to trial to determine consequential damages from the alleged breach of the minutes. The application judge dismissed the application. She found that the minutes did not constitute a binding contract capable of enforcement and, in any event, specific performance would not be appropriate. The application judge also found that the appellant had not suffered any compensable damages.

The application judge found that the minutes should be read in the context of the Planning Act, which permits reconsideration of planning decisions when considering broader community interest. She concluded that (1) the minutes did not obligate the respondent to construct the community centre; and (2) the minutes did not constitute a binding contract between the City and the appellant. The application judge found that although the City had binding obligations with respect to certain matters in the minutes, the obligations came from the s. 37 agreement between the City and CF, to which the appellant was not a party.

The appellant appealed on the basis that the application judge erred in law and in fact in determining that the minutes did not constitute a binding contract. The appellant also argued that the application judge erred by assessing the merits of the respondent’s decision to not construct the DMCC, and erred in her assessment of the available remedies. The appeal related only to the application brought against the City and not against CF.

issues:
  1. Did the application judge err in characterizing the minutes as an instrument under the Planning Act rather than as a binding settlement agreement?
  2. Did the application judge err by considering the merits of the agreement?
  3. Did the application judge err in characterizing the minutes as an agreement to agree?
holding:

Appeal dismissed.

reasoning:
  1. No

The appellant’s position was that both the language of the minutes and the surrounding circumstances that led to them demonstrated that the parties intended to be bound by the minutes. The appellant argued that, any change in circumstances that occurred after the minutes were signed could not have any relevance to the interpretation of the minutes, and the application judge erred in taking them into account. The appellant argued that the minutes should be interpreted according to the ordinary rules of contractual interpretation in the same way as any other minutes of settlement.

The Court confirmed that the application judge approached the minutes on the basis that the agreement was analogous to other agreements made under the Planning Act, such as the site plan agreement that was at issue in Hi-Rise Structures Inc. v. Scarborough (City). The application judge relied on the Court’s holding in Hi-Rise that even “though provisions of the Planning Act state that ‘every decision or order of the [OMB] is final,’ this did not mean that all decisions were ‘everlasting’ … such a reading may ‘prevent a fresh consideration of the planning of the community’ and do a ‘disservice to the broader community interest’.” With these principles in mind, the Court noted that the application judge concluded that the express consent of the appellant was not required before amendments could be made to the applicable zoning by-law, official plan, or the minutes of settlement.

The Court found that the application judge did not make any reviewable error in finding that the minutes were not, in substance, a contract and do not generate the contractual obligations claimed by the appellant. The Court repeated that the minutes must be understood within the context of the Planning Act.

The appellant argued that the application judge erred in analogizing the minutes to a site plan agreement made under the Planning Act and treating Hi-Rise as governing. The minutes differed fundamentally from a site plan, the appellant argued, because a site plan agreement can be the subject of an appeal to the Ontario Land Tribunal (OLT). The minutes, as an ordinary contract that exists outside the Planning Act regime, cannot.  The appellant also argued that the minutes, on their face, evidenced a mutual intention to create a binding contract that ought to be respected. The agreement was a means to settle the matters at issue between the City and CF, paving the way for the OMB to approve the CF redevelopment.

The Court was not persuaded by the appellant’s argument that the site plan agreements were planning instruments that are creatures of statute, and that minutes are not. The Court noted that what constitutes a planning instrument is not defined exhaustively in the Planning Act. The Court further commented that land use planning is a complex process, and Hi-Rise does not purport to limit the instruments by which a municipality effects site plan control to site plan agreements. The minutes were the means of settling appeals before the OMB. Those appeals were part of the land use planning process and had a public dimension. The minutes were a single step in a process that was to be implemented through various other agreements to which the appellant would not be a party. Thus, the Court concluded that the context was far removed from a paradigmatic bilateral commercial contract.

The Court stated that the hurdle faced by the appellant was that the application judge interpreted the minutes differently and that  this interpretation was entitled to deference: Sattva Capital Corp. v. Creston Moly Corp. Accordingly, the Court held that the appellant would have to identify either a palpable and overriding error or an extricable error of law. The Court found that the appellant failed to do so.

The Court further stated that a key finding by the application judge was that the minutes did not create a legal obligation on the respondent to build the recreation centre. That obligation was solely carried by CF. The application judge’s conclusion was that “[t]he minutes set out the framework for the Phase 2 redevelopment of the DMC site as requiring further agreements, such as the section 37 agreement, to implement the intent of the minutes. At most, the minutes outlined a planning framework to be implemented via the execution of various planning instruments, such as the zoning by-law amendment and official plan amendment approved by the OMB, the section 37 agreement executed by the City and CF, and several other agreements yet to be executed … The minutes did not govern a contractual relationship between the City and the [appellant].” The Court concluded that this finding was dispositive not only of this issue, but of the appeal as a whole.

  1. No

The Court stated that the application judge addressed the merits of whether the CRC would better serve the Don Mills community and be a better use of the City’s resources than a community centre at the DMC and concluded that the CRC would better serve the community and be a better use of public resources.

The Court questioned why the City raised this issue before the application judge and why the application judge answered it. As the appellant argued, the merits of the two proposals had no bearing whatsoever on the task before the application judge, which was to interpret the minutes and determine what legal obligations it established, if any. The Court found although the error was a palpable one, it is not overriding. The analysis played no part in the line of reasoning by which the application judge determined that the minutes did not compel the City to build the community centre. Accordingly, the error had no impact on the disposition of the appeal.

  1. No

The appellant argued, in the alternative, that the application judge erred in characterizing the minutes as an agreement to agree. The Court noted that the application judge stated that had she not held that the minutes were part of a land use planning process, she still would not have found the minutes to be an enforceable agreement because the minutes on their face failed to satisfy the requirements of a valid and enforceable agreement.

The appellant argued that in finding the minutes to be an “agreement to agree” and lacking the requisite terms to be a binding contract, the application judge demanded too much of the minutes and ignored crucial context. The fact that the agreement contemplated and required further agreements to implement it, and that the appellant would not be a party to some of those agreements, did not mean that the minutes were therefore lacking in the particulars needed to form a contract. The essential terms, according to the appellant, are the parties, the period, and the price, and the minutes identified each of these: the minutes set out the triggering events for the start of construction and the substantial completion date, they set a value of $17 million for the construction of the community centre, and they identified the parties to the settlement as the appellant, the City, and CF.

The Court disagreed, stating that the application judge’s interpretation of the minutes was reasonable and was entitled to deference by the Court. The Court reasoned that the application judge properly interpreted the terms of the minutes as a whole, and with due appreciation for the planning context in which the minutes were reached. The Court concluded that there was no basis to intervene in the application judge’s decision.


SHORT CIVIL DECISIONS

Art for Everyday Inc. v. Canarctic J.F.K. Inc., 2022 ONCA 747

[Simmons, Benotto and Favreau JJ.A.]

Counsel:

P. Griffin and M. Wine, for the appellant
I. Cantor, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Default, Termination, Notice

Chippewas of Nawash Unceded First Nation v. Canada (Attorney General), 2022 ONCA 755

[Pardu J.A. (Motion Judge)]

Counsel:

R. Townshend and B. Brookwell, for the appellants Chippewas of Nawash Unceded First Nation and Saugeen First Nation
M. Beggs, C. Tsang, B. Ennis, M. McCulloch and S. Voteti, for the respondent The Attorney General of Canada
D.J. Feliciant, R. Ogden and J. Mc Randall, for the respondent His Majesty the King in Right of Ontario
T. Williams-Davidson, M. Jackson, and N. Baker-Grenier, for the proposed intervener the Council of the Haida Nation (M53717)
T. Slade, for the proposed intervener Walpole Island First Nation (M53719)
L.C. Fong, Rachel Ariss and Ruben Tillman, for the proposed intervener Heiltsuk Nation (M53726)
M. Price, for the proposed interveners Songhees Nation and Esquimalt Nation (M53820)

Keywords: Aboriginal Law, Real Property, Aboriginal Title to Submerged Land, Public Right of Navigation, Civil Procedure, Intervenors, Fresh Evidence, Rules of Civil Procedure, r. 13.03(2), Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1990), 74 O.R. (2d) 164 (C.A.), Foster v. West, 2021 ONCA 263, Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 29, Keewatin v. Ontario (Natural Resources), 2012 ONCA 472, McIntyre Estate v. Ontario (Attorney General) (2001), 26 C.P.C. (5th) 312 (Ont. C.A.)

Ryan v. Herbert, 2022 ONCA 750

[Simmons, Benotto and Favreau JJ.A.]

Counsel:

K. Dunham, for the appellant
I. Iwasykiw, for the respondent

Keywords: Family Law, Civil Procedure, Approval of Settlements, Rules of Civil Procedure, rr. 7.08, 21.01(3), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 87(2), Azzeh v. Legendre, 2017 ONCA 385


The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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Following are this week’s summaries of the Court of Appeal for Ontario for the week of October 24, 2022.

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In Johnson v Ontario, the Court allowed the appeal and found that in refusing the appellant’s request for an extension of time to opt out of a class action, the motion judge did not articulate or apply the correct test. The test for an extension to opt out of a class proceeding requires the class member to show that their neglect in complying with the court-imposed deadline is excusable and that an extension will not result in prejudice to the class, the defendant, or the administration of justice. The Court found that a proper application of the test and consideration of the relevant factors in this case indicated that the extension of the deadline to opt out should have been granted.

In Hummel Properties Inc. v. Niagara-on-the-Lake (Town), the Court considered an appeal regarding the legality of an interim control by-law restricting the division of land. The Court found that the interim control by-law was illegal as it sought to control the division of land, as opposed to the use of land subject to it. Further, the Court held that the application judge, who had dismissed the application, made overriding errors throughout his analysis, resulting in his findings being set aside and the Court remitting the matter to be tried again.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email
Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Johnson v. Ontario , 2022 ONCA 725

Keywords: Torts, Crown Liability, Negligence, Charter Breaches, Civil Procedure, Class Proceedings, Opting-out, Extension of Time, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 27.1(4), ss. 8, 9, 12, 13, 17, 27(2)(a), 27(3), Limitations Act, 2002, S.O. 2002, c. 24 s. 5(1)(b), Young v. London Life Insurance Co., [2002] O.J. No. 5971 (S.C.), 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2013 ONCA 279, Cannon v. Funds for Canada Foundation, 2014 ONSC 2259, Re PaineWebber Limited Partnerships Litigation, 147 F. (3d) 132 (2d Cir. 1998), Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380 (1993), Gregg v. Freightliner Ltd., 2012 BCSC 415, Johnson v. Ontario, 2021 ONCA 650, 1176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada Ltd. (2002), 62 O.R. (3d) 535 (S.C.J.), Canada Post Corp. v. Lépine, 2009 SCC 16, 3113736 Canada Ltd. v. Cozy Corner Bedding Inc., 2020 ONCA 235, Airia Brands Inc. v. Air Canada, 2017 ONCA 792

Hummel Properties Inc. v. Niagara-on-the-Lake (Town), 2022 ONCA 737

Keywords: Municipal Law, Land Use Planning, Interim Control By-Laws, Validity, Bad Faith, Illegality, Real Property, Subdivision Control, Torts, Misfeasance in Public Office, Fraudulent Misrepresentation, Negligent Misrepresentation, Planning Act, R.S.O. 1990 c. P.13, s. 34, s. 38, Municipal Act, 2001, S.O. 2001 c. 25, s. 273, Equity Waste Management of Canada Corp. v. Halton Hills (Town) (1997), 35 O.R. (3d) 321 (C.A.), TRG-KFH (Lakeside) Inc. v Muskoka Lakes (Township), 2019 ONCA 443, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Luxor Entertainment Corp. v. North York (City) (1996), 27 O.R. (3d) 259 (Gen. Div.), Pedwell v. Pelham (Town) (2003), 174 O.A.C. 147, Grosvenor v. East Luther Grand Valley (Township), 2007 ONCA 55, Sumac Ridge Wind Inc. v. Kawartha Lakes (City), 2016 ONCA 496, Quay West v. Toronto (City), [1989] O.J. No. 3072, Shell Canada Ltd. v. Barrie (City) Chief Building Official, 1992 CarswellOnt 514, Manchester v. North York (City) Chief Building Official (1994), 18 O.R. (3d) 540 (Div. Ct.), London (City) v. RSJ Holdings Inc., 2007 SCC 29, Re Burlington (City) Interim Control Re By-law 4000-589 (1988), 22 O.M.B.R. 233, Re Niagara-on-the-Lake (Town) Interim Control By-law 2049-89, [1990] O.M.B.D. No. 320, Woolford v. Etobicoke (City) (1991), 25 O.M.B.R. 289

Short Civil Decisions

1854329 Ontario Inc. v. Cairo , 2022 ONCA 744

Keywords: Breach of Contract, Real Property, Agreements of Purchase and Sale, Deposits, Remedies, Damages, Relief from Forfeiture, Towne Meadow Development Corporation v. William Choo Chong (1993), 30 R.P.R. (2d) 228 (Gen. Div.), Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490, Stockloser v. Johnson, [1954] 1 Q.B. 476 (C.A. (Eng))

Performance Analytics v. McNeely , 2022 ONCA 731

Keywords: Civil Procedure, Settlements, Disclosure Obligations, Remedies, Stays, Handley Estate v. DTE Industries Limited, 2018 ONCA 324, Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2022 ONCA 66, Waxman v. Waxman, 2022 ONCA 311, Poirier v. Logan, 2022 ONCA 350, Chu de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467


CIVIL DECISIONS

Johnson v. Ontario , 2022 ONCA 725

[Roberts, Miller and Zarnett JJ.A]

Counsel:

M. R. Sharp, N. S. Barkhordari, and N. S. Gosa, for the appellant D.P.
R. Bambers and L. Brost, for the respondent, His Majesty the King in Right of Ontario
J. Bradford, for the respondents, G.J., M.S., T.H.
A. Eckart and J. Kalajdzic, for the intervener The Class Action Clinic at the University of Windsor, Faculty of Law

Keywords: Torts, Crown Liability, Negligence, Charter Breaches, Civil Procedure, Class Proceedings, Opting-out, Extension of Time, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 27.1(4), ss. 8, 9, 12, 13, 17, 27(2)(a), 27(3), Limitations Act, 2002, S.O. 2002, c. 24 s. 5(1)(b), Young v. London Life Insurance Co., [2002] O.J. No. 5971 (S.C.), 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2013 ONCA 279, Cannon v. Funds for Canada Foundation, 2014 ONSC 2259, Re PaineWebber Limited Partnerships Litigation, 147 F. (3d) 132 (2d Cir. 1998), Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380 (1993), Gregg v. Freightliner Ltd., 2012 BCSC 415, Johnson v. Ontario, 2021 ONCA 650, 1176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada Ltd. (2002), 62 O.R. (3d) 535 (S.C.J.), Canada Post Corp. v. Lépine, 2009 SCC 16, 3113736 Canada Ltd. v. Cozy Corner Bedding Inc., 2020 ONCA 235, Airia Brands Inc. v. Air Canada, 2017 ONCA 792

facts:

In 2013 and 2016, the respondents G. J. and M.S., and T.H., each commenced a proposed class proceeding against the respondent Her Majesty the Queen in Right of Ontario (“Ontario”). Each was certified as a class proceeding – and the actions were consolidated.

The class on behalf of whom the consolidated class action was brought consists of all persons who were incarcerated at the Elgin-Middlesex Detention Centre (“EMDC”) between January 1, 2010 and May 18, 2017. The consolidated class action sought declaratory relief and damages for alleged negligence and violations of the Canadian Charter of Rights and Freedoms arising from conditions at, and the operation and management of, EMDC during that class period.

On March 22, 2018, the court approved the notice and a plan to disseminate it (the “Notice Plan”). The Notice Plan contemplated a short form of notice that was to be published in two London, Ontario newspapers, and a long form of notice that was to be (i) posted on class counsel’s website; and (ii) sent, using regular mail, to the “last known address of each class member”.

The long form of notice advised that class members who wanted to participate in the class action are automatically included and did not have to do anything at that time. The long form of notice provided that a class member who “opts out will not be entitled to participate in the class action”, and that to pursue or continue an individual action against Ontario with respect to the issues raised in the class action, a class member was required to opt out. It advised that in order to opt out, the class member had to complete and return an opt-out form, available from class counsel, by June 20, 2018 (the “Deadline”).

The appellant resided with his father at the Parkside Drive address before he was incarcerated at EMDC. He gave that address to EMDC staff upon his admission, and it was entered on Ontario’s Offender Tracking Information System (“OTIS”) as his primary residence. Although Ontario was aware that the appellant transferred to the Joyceville Assessment Unit (“JAU”) in Kingston, Ontario in August 2017, it does not keep track of subsequent inmate movement while in federal custody. The appellant denied actually receiving or seeing either of the Notices, or knowing about the class proceeding, at any time before the opt-out Deadline.

On April 27, 2020, before he was aware of the consolidated class action, the appellant commenced an individual action against Ontario and employees of EMDC, as well as against the Attorney General of Canada and employees of JAU. By letter dated June 5, 2020, counsel for Ontario wrote to the appellant’s counsel, stating that the individual action overlapped with the consolidated class action and the appellant had not opted out of the consolidated class action by the Deadline.

Asserting that he first became aware of the consolidated class action as a result of the June 5, 2020 letter, the appellant moved for an extension of time to opt out. The motion judge dismissed the appellant’s request. The motion judge rejected the argument that the notice sent to the appellant had not been sent in accordance with the Notice Plan because it was sent to Parkside Drive when Ontario was aware he was in custody and had been transferred to JAU. He held that Parkside Drive was the last known address as that term was used in the Notice Plan.

The motion judge also found the appellant would not have opted out by the Deadline even if he had received the notice advising of his right to do so. He referred to the fact that the appellant had not addressed that issue in his affidavit, and had said on cross-examination that if the notice of certification was brought to his attention, he would not have filed his own lawsuit. The motion judge also found that the appellant’s implicit assertion that he could not reasonably have known of his cause of action until the fall of 2018 to be unsupported by any evidence.

issue:

(1) Did the motion judge commit a reversible error in denying an extension of time to the appellant to opt out of an ongoing class proceeding so that he could continue an individual action he commenced before he knew that there was a class proceeding?

holding:

Appeal allowed.

reasoning:

Yes.
The test for an extension to opt out of a class proceeding requires the class member to show that their neglect in complying with the court-imposed deadline is excusable and that an extension will not result in prejudice to the class, the defendant, or the administration of justice. This test, previously recognized at the Superior Court level in Ontario in Young v. London Life Insurance Co., [2002] O.J. No. 5971 (S.C.), balances the important role the right to opt out plays in the class proceedings scheme with the importance properly attributed to court-imposed deadlines.

The Court found that in refusing the appellant’s request for an extension of time to opt out, the motion judge did not articulate or apply this test; he did not consider the issues of excusable neglect or prejudice referenced in Young. His approach to the discretion to extend was accordingly too narrow. The Court found that a proper application of the test and consideration of the relevant factors indicated that the extension should have been granted.
The excusable neglect/no prejudice test adopted in Young was derived from PaineWebber, a case decided under the United States Federal Rules of Civil Procedure, which govern federal civil proceedings including class proceedings. The court in PaineWebber explained that a party seeking an extension of time to opt out must show that the entire period of delay, from the missed deadline to opt out through the making of the request for an extension, was the result of excusable neglect. It described excusable neglect as an elastic concept that may be found even in circumstances of carelessness and omissions within the class member’s control, as long as good faith and a reasonable basis for non-compliance are present. The PaineWebber court further explained that the court would also consider the degree of prejudice to the opposing party that would flow from granting the extension.

The Court noted the importance of the opt-out right and of the deadline for opting out are both properly respected when a court grants extensions only where (i) the delay in opting out is due to excusable neglect – in good faith and with a reasonable basis – and (ii) the court has considered whether any prejudice will accrue to participating class members, the defendant, or the integrity of the process, from permitting the late opt-out. This approach ensures that in a justifiable case a class member who does not want to be part of the class proceeding may have their litigation autonomy restored. But it also respects the need to ensure the court’s processes – its orders – are taken seriously, and that those who have planned and taken their courses of action on the strength of them do not suffer any prejudice.
The Court found that since the appellant did not actually receive the Notices, and provided a reasonable basis for the delay in actually requesting an opportunity to opt out, the evidence about what he would have done had he received the Notices was of little value, and ought not to have been used as it was by the motion judge. The appellant was not required to prove he would have opted out based on what he knew at the Deadline. The question was whether the fact that he did not opt out then, but was requesting an exercise of discretion to do so late, was the result of excusable neglect. The motion judge’s reference to the test under s. 5(1)(b) of the Limitations Act, 2002 was not germane to that question.

The Court found no indication that granting the appellant an extension would cause prejudice to the integrity of the process or the administration of justice. Class counsel did not oppose the appeal, a strong indicator that an extension of the time for the appellant to opt out would occasion no prejudice to the class and Ontario did not point to any prejudice it would suffer.


Hummel Properties Inc. v. Niagara-on-the-Lake (Town) , 2022 ONCA 737

[Lauwers, Nordheimer and Zarnett JJ.A.]

Counsel:

B. Gover and J. Safayeni, for the appellant

T. H. Hill, for the respondent

A. Sherrard and A. Parley, for the interveners Niagara Home Builders’ Association and Ontario Home Builders’ Association

Keywords: Municipal Law, Land Use Planning, Interim Control By-Laws, Validity, Bad Faith, Illegality, Real Property, Subdivision Control, Torts, Misfeasance in Public Office, Fraudulent Misrepresentation, Negligent Misrepresentation, Planning Act, R.S.O. 1990 c. P.13, s. 34, s. 38, Municipal Act, 2001, S.O. 2001 c. 25, s. 273, Equity Waste Management of Canada Corp. v. Halton Hills (Town) (1997), 35 O.R. (3d) 321 (C.A.), TRG-KFH (Lakeside) Inc. v Muskoka Lakes (Township), 2019 ONCA 443, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Luxor Entertainment Corp. v. North York (City) (1996), 27 O.R. (3d) 259 (Gen. Div.), Pedwell v. Pelham (Town) (2003), 174 O.A.C. 147, Grosvenor v. East Luther Grand Valley (Township), 2007 ONCA 55, Sumac Ridge Wind Inc. v. Kawartha Lakes (City), 2016 ONCA 496, Quay West v. Toronto (City), [1989] O.J. No. 3072, Shell Canada Ltd. v. Barrie (City) Chief Building Official, 1992 CarswellOnt 514, Manchester v. North York (City) Chief Building Official (1994), 18 O.R. (3d) 540 (Div. Ct.), London (City) v. RSJ Holdings Inc., 2007 SCC 29, Re Burlington (City) Interim Control Re By-law 4000-589 (1988), 22 O.M.B.R. 233, Re Niagara-on-the-Lake (Town) Interim Control By-law 2049-89, [1990] O.M.B.D. No. 320, Woolford v. Etobicoke (City) (1991), 25 O.M.B.R. 289

facts:

In November 2018, the then Lord Mayor-Elect of Niagara-on-the-Lake directed Town staff to draft an interim control by-law under s. 38 of the Planning Act (the “Act”). The interim control by-law was enacted by the town’s council on December 5, 2018, with an additional by-law coming into force in November 2020. The alleged purpose of the by-law, from the point of view of the council, was to prevent the uncontrolled development of the Old Town that might adversely affected the Town’s historical character. The appellant had submitted a development application for six townhouse condominium dwelling units at a vacant site outside of the built-up areas of the Old Town but within the area to which the by-law applied. The Town had been undertaking a number of studies in support of the development, but work was halted when the by-law came into force.

The appellant made several informal attempts to get the by-law repealed, as he believed the true target of the by-law was not his development, but the proposed “Randwood Lands” development located elsewhere in the Town. After informal efforts to get the by-law repealed failed, the appellant brought an application under s. 273 of the Municipal Act, 2001, to quash the by-law for illegality and bad faith. The application also claimed damages for misfeasance in public office and fraudulent and negligent misrepresentation, and asked for a trial to be ordered to determine the amount of damages. The application judge dismissed the application.
Both by-laws were repealed on June 22, 2020, after the commencement of the application, but prior to its dismissal by the application judge.

issues:

(1) Did the application judge err in finding that the interim control by-laws were a moot issue because the challenged by-laws had been repealed?
(2) Were the by-laws illegal because they did not relate to “land use”, as required by s.38 of the Planning Act?
(3) Were the by-laws illegal because they infringed s.38(7) of the Planning Act, which prohibits a municipality from applying a second interim control by-law to land to which another such by-law applies?
(4) Was the initial by-law adopted by an illegal process?
(5) Was the initial by-law passed in bad faith?
(6) If the answer to any of these issues is in affirmative, what remedy, if any, flows to the appellant?

holding:

Appeal allowed.

reasoning:

(1) Yes
The Court found that the application judge erred in ruling that the issue of legality was moot. The application judge took the position that the legality issues were moot because the challenged by-laws had been repealed. The Court held that this was an error, as the application continued to have relevance to the appellant’s outstanding civil claim for damages.

(2) Yes
The appellant argued that the Town acted illegally by enacting an interim control by-law that prohibited the subdivision of land, because s. 38(1) of the Act only gives municipalities authority to pass interim control by-laws “prohibiting the use of land”. The appellant argued that the subdivision of land is not properly interpreted to be a “use of land”.

The Court found that the application judge erred when he asserted that “Condominium approval is a land use”. No legal basis was given for this assertion, and the Court found it was not consistent with the Act and associated caselaw. The Court determined that the Town had no authority to control the subdivision of land by means of an interim control by-law. In coming to this conclusion, the Court first applied the principles of statutory interpretation to the Act. The Court found that land use under Part V of the Act was treated differently than the division of land, which is dealt with under Part VI of the Act. Section 38 of the Act authorizes a municipality to pass an interim control by-law regarding land use. The Court stated that the context within which s. 38 operates is set by s. 34, which is the first section in Part V and is the linchpin of land use controls. The balance of s.34(1) did not address the division of land.

Further, the Court, citing Equity Waste Management of Canada Corp. v. Halton Hills (Town), found that the purpose of interim control by-laws was to allow a municipality breathing space to rethink its land use policies by suspending development that may conflict with any new policy. However, if a by-law is enacted by a municipality for an improper purpose, that is, not for the statutory purpose for which the power was granted, the by-law is illegal and may be set aside by the court.

Applying this interpretation to the by-law at issue, the Court determined that the by-law’s provisions were designed to prohibit the subdivision of land, which would include the creation of condominiums. This finding was reinforced by the fact that the by-law cited s.50 and s.53 of the Planning Act. The Court stated that as these sections are found in Part VI of the Act governing land division, not Part V, in which s. 38 authorizes interim control by-laws only for land use purposes, the by-law was enacted for the improper purpose of controlling the division of land.

(3) Yes
The Court found that the application judge erred in asserting that two interim control by-laws could have effect over the same lands so long as the by-laws were for different purposes. Section 38(7) of the Act contains the following prohibition: “Where an interim control by-law ceases to be in effect, the council of the municipality may not for a period of three years pass a further interim control by-law that applies to any lands to which the original interim control by-law applied.” The Court held that the application of more than one interim control by-law to a piece of land was not consistent with the terms of s. 38(7).

The Court found that even if the subject matters of the two interim control by-laws were radically dissimilar, the municipality may not enact the second unless it complies with s. 38(7) of the Planning Act. As the by-laws failed to comply with s.38(7) of the Act, the Court quashed the interim control by-law on the basis of illegality.

(4) Yes
The appellant argued that the procedure leading to the interim control by-law’s first enactment breached the Town’s procedural by-law. The meeting in question was first announced publicly on December 4, 2018. Under the Town’s procedural by-law, a special meeting had to be “announced no later than the Thursday prior to the Meeting except in the case of an emergency.” The application judge rejected this argument, finding that the Lord Mayor was entitled to call an emergency meeting on December 5th as interim control is by its nature urgent. The application judge did not address the appellant’s argument that the notice of the meeting was inconsistent with the principles reviewed by the Supreme Court in RSJ Holdings, because it was deficient and lacked transparency.

The Court held that the application judge gave little consideration to the appellant’s arguments, and set aside his findings that the process leading to the adoption of the by-law was not illegal.

(5) Yes
The Court found that it was common ground that a by-law passed in bad faith is void for illegality. The Court set aside the application judge’s finding that there was no bad faith, as that rested on the three overriding errors discussed in issues 1-3 above, and on his inadequate analysis of the process leading to the by-law’s enactment.

(6) Remitted to Superior Court
The Court dealt with the issue of the appellant’s available remedies in its disposition. The Court directed a trial of the issues of the appellant’s claims of negligent misrepresentation and misfeasance in public office, to be initiated by fresh pleadings in the form of statements of claim and defence, to be completed in the ordinary course of a civil action. The Court permitted the issues of whether the process leading to the adoption of the initial interim control by-law was illegal, and whether there was bad faith in its enactment, to be litigated afresh.


SHORT CIVIL DECISIONS

1854329 Ontario Inc. v. Cairo , 2022 ONCA 744

[Simmons, Benotto and Favreau, JJ.A.]

Counsel:

N. C. Murkar, for the respondent
B. S. Greenberg, for the appellants

Keywords: Breach of Contract, Real Property, Agreements of Purchase and Sale, Deposits, Remedies, Damages, Relief from Forfeiture, Towne Meadow Development Corporation v. William Choo Chong (1993), 30 R.P.R. (2d) 228 (Gen. Div.), Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490, Stockloser v. Johnson, [1954] 1 Q.B. 476 (C.A. (Eng))

Performance Analytics v. McNeely , 2022 ONCA 731

[Lauwers, Roberts and Trotter JJ.A.]

Counsel:

A. J. MacDonald, for the appellants
S. Dewart and B. Hughes, for the respondents

Keywords: Civil Procedure, Settlements, Disclosure Obligations, Remedies, Stays, Handley Estate v. DTE Industries Limited, 2018 ONCA 324, Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2022 ONCA 66, Waxman v. Waxman, 2022 ONCA 311, Poirier v. Logan, 2022 ONCA 350, Chu de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467


The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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

Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of October 17, 2022.

Continue Reading

In Caja Paraguyaya De Jubilaciones Y Pensiones Del Personal De Itaipu Binacional v. Obregon, the Court clarified the issue of whether the civil standard for stay pending appeal, or the criminal standard for bail pending appeal, applies to a party being held in civil contempt. The Court held that the proper procedure is to apply the civil standard for stay pending appeal, but the factors in the RJR-MacDonald test can be influenced by the principles underlying applications for bail pending appeal as outlined in R. v. Oland.

In 402 Mulock Investments Inc. v. Wheelhouse Coatings Inc., the Court was asked by a Landlord to determine whether a deposit held by the Landlord had been wrongfully ordered to be returned to the Tenant pursuant to the default provision of the Lease. The Court determined that, as the Tenant was in default under the Lease, the Landlord should not have been ordered to return the deposit. The Court also considered the Tenant’s cross-appeal, where the Tenant sought relief from paying for roof repairs, amortized over the course of two years. The Court held that the repairs to the roof were properly a capital repair pursuant to the Lease, and therefore should be amortized over its useful life.

In Fair v. BMO Nesbitt Burns Inc., a claim by a disappointed beneficiary of certain investment accounts of her late husband, the Court upheld the motion judge’s determination that a bank or financial adviser do not owe a duty to their customer to disclose the fact that their partner had changed the beneficiary designation on their registered investment accounts, even though the bank/financial adviser had both of them as clients and had shared information about both of them to the other in the past. To recognize such a duty would be contrary to the concurrent obligations of confidentiality that a bank/financial adviser has to its clients.

Other topics this week included the Court’s review of a motion judge’s decision to deny an extension of time for perfecting an appeal, an appeal that was dismissed as being vexatious (congratulations to our very own Sheldon Inkol on that one), a Will challenge and an appeal of a power of sale as being fraudulent and improvident.

Finally, the second edition of Civil Procedure and practice Ontario, 2022 ONCA 720(CPPO) is now live on CanLII’s website. For those who may not know, CPPO offers to the public, the profession and the judiciary, a free online set of annotated Rules of Civil Procedure, as well as the Courts of Justice Act and the Limitations Act, 2002, complete with commentary and case law. The project was coordinated by Professor Noel Semple of Windsor Law School, and the chapters were written by a host of prominent and knowledgeable practitioners and judges. I had the privilege of co-authoring the chapters on references (Rules 54 and 55).
Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferriera
Blaney McMurtry LLP
416.597.4895 Email


Table of Contents

Civil Decisions

Sheth v. Randhawa, 2022 ONCA 707

Keywords: Contracts, Real Property, Mortgagee, Settlements, Enforcement, Power of Sale, Setting Aside, Improvident Sale

M.E. v. Ontario, 2022 ONCA 714

Keywords: Family Law, Crown Wardship, Civil Procedure, Vexatious Litigants, Rules of Civil Procedure, r. 2.1.01, M.E. et al. v. Her Majesty the Queen in Right of Ontario et al., 2019 ONSC 7325, M.E. v. R., 2020 ONCA 429, M.E. et al. v. HMTQ et al., 2021 ONSC 2862, Lochner v. Ontario Civil Police Commission, 2020 ONCA 720, Mukwa v. Farm Credit of Canada, 2022 ONCA 320

Fair v. BMO Nesbitt Burns Inc. , 2022 ONCA 711

Keywords: Wills and Estates, Constructive Trusts, Contracts, Financial Advisors, Duty to Disclose, Family Law Act, R.S.O. 1990, c. F.3, s. 13, Evidence Act, R.S.O. 1990, c. E.23, s. 13, Davidson v. Noram Capital Management Inc. (2005), 13 B.L.R. (4th) 35 (Ont. S.C.)., Moore v. Sweet, 2018 SCC 52, Edell v. Sitzer (2001), 55 O.R. (3d) 198 (S.C.), Hryniak v. Mauldin, 2014 SCC 7

Caja Paraguyaya De Jubilaciones Y Pensiones Del Personal De Itaipu Binacional v. Obregon, 2022 ONCA 724

Keywords: Civil Procedure, Civil Contempt, Stay Pending Appeal, Bail Pending Appeal, Courts of Justice Act, R.S.O 1990, c. 43, s. 106, Criminal Code, R.S.C. 1985, c. C-46, ss. 673, 679, Rules of Civil Procedure, r. 60.11, 63.02(1), Criminal Appeal Rules, r. 22, Directv, Inc. v. Boudreau (2005), 42 C.P.R. (4th) 388 (Ont. C.A.), T.(M.) v. A.(H.), [1995] 1 S.C.R. 445, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Chiang (Trustee of) v. Chiang, 2007 ONCA 529, R. v. Oland, 2017 SCC 17, Kopaniak v. MacLellan (2002), 159 O.A.C. 37 (C.A.), DM v. WS, 2019 ABCA 422, R. v. Hassan, 2017 ONCA 1008, R. v. Bissonnette, 2022 SCC 23, Master Linda S. Abrams et al., Halsbury’s Laws of Canada, “Civil Procedure”, (Toronto: LexisNexis Canada, 2021 Reissue)

402 Mulock Investments Inc. v. Wheelhouse Coatings Inc., 2022 ONCA 718

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Default, Security Deposits, Additional Rent, Capital Replacement, Amortization, Civil Procedure, Orders, Enforcement, Writs of Possession, Res Judicata, Issue Estoppel, Abuse of Process, Commercial Tenancies Act, R.S.O. 1990, c. L.7, ss. 80, 82, Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020, S.O. 2020, c. 36, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Behn v. Moulton Contracting Ltd., 2013 SCC 26, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29

Correct Building Corporation v. Lehman, 2022 ONCA 723

Keywords: Civil Procedure, Appeals, Perfection, Extensions for Time, Courts of Justice Act, RSO 1990, c C43, s. 7(5), Municipal Act, 2001, SO 2001, c 25, s. 448, Rules of Civil Procedure, r. 61.16(6), Machado v. Ontario Hockey Association, 2019 ONCA 210, Hillmount Capital Inc. v. Pizale, 2021 ONCA 364, Iqbal v. Mansoor, 2022 ONCA 198, 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2015 ONCA 5, Sheth v. Randhawa, 2022 ONCA 89, Howard v. Martin, 2014 ONCA 309, Derakhshan v. Narula, 2018 ONCA 658, 40 Park Lane Circle v. Aiello, 2019 ONCA 451, Duca Community Credit Union Ltd. v. Giovannoli (2001), 142 O.A.C. 146 (C.A.), Auciello v. Mahadeo, 2016 ONCA 414

Short Civil Decisions

Van Decker Estate v. Van Decker, 2022 ONCA 712

Keywords: Real Property, Landlord and Tenant, Occupation Rent, Wills and Estates, Civil Procedure, Adjournments, Corroborating Evidence, Evidence Act, R.S.O. 1990, c. E. 23, s. 13, Toronto Dominion Bank v. Kylton, 2010 ONCA 752, Khimji v. Dhanani (2004), 69 O.R. (3d) 790

Hategan v. Frederiksen, 2022 ONCA 715

Keywords: Civil Procedure, Security for Costs

Rebello v. Del Property Management , 2022 ONCA 720

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Security for Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(2)

CIVIL DECISIONS

Sheth v. Randhawa, ONCA 707

[Doherty, Benotto and Copeland JJ.A.]

Counsel:

D. LaFramboise, for the appellant

M. R. Kestenberg and A. Hershtal, for the respondent, K.R

S. Chhina, for the respondents, 11035738 Canada Inc., S.M. and G.S.

D. Yiokaris and A. Shamim, for the respondents, TSD Law Professional Corporation and A.S.D

M. Harris, for the respondents, Bindaas Capital, A. K, S.P, and Dr. Mangesh Inamdar Medicine Professional Corporation

Keywords: Contracts, Real Property, Mortgagee, Settlements, Enforcement, Power of Sale, Setting Aside, Improvident Sale

facts:

The appellant had three mortgages on a property purchased in November 2017. The Respondents Bindaas Capital (“Bindaas”) held the first and second mortgage. Park Lane held the third mortgage. The respondents A.K. and S.M were the principals of Bindaas.

By July 2018, the appellant defaulted on the first and second mortgages and Bindaas issued a Notice of Sale with demand for payment. No payment was made. The third mortgagee was served with the Notice of Sale under the first mortgage. The first mortgage was then transferred to Bindaas and B.N. (“Bindaas Group”) in July 2019. This led to lawsuits by the appellant against Bindaas and the Bindaas Group relating to the appellant’s defaults.

On December 4, 2019, the parties entered into a settlement agreement to resolve the two enforcement actions. The appellant did not pay on time and the Bindaas Group proceeded with an ex parte motion for enforcement. On February 13, 2020, the motion for enforcement of the settlement was heard and the motion judge ordered the appellant to pay the Bindaas Group.

Meanwhile, both the appellant and the respondents were trying to sell the property. Neither kept the other informed. The Bindaas group accepted an offer of $970,000 from 11035738 Canada Inc. (“1103 Corp.”) on an “as is” basis. The appellant accepted an offer from B.A. for $1,000,000, which included a collateral agreement allowing her to remain on the property.

On March 9, 2020, the deal between Bindaas and 1103 Corp. closed, and the property was transferred to 1103 Corp. The sale occurred by Power of Sale under the first mortgage. The second mortgage was discharged. The third and fourth mortgages were extinguished by the Power of Sale.

The appellant was not immediately advised the property was sold. On March 16, 2020, the appellant brought an emergency motion and obtained an order setting the amount required to discharge the two mortgages at $929,498. The appellant did not attempt to register the March 16, 2020 order discharging the mortgages until May 7, 2020. The appellant continued to occupy the property and paid no rent to 1103 Corp.

On May 12, 2020, 1103 Corp. issued a notice requiring the appellant to vacate on or before May 17, 2020. On May 13, 2020, the appellant issued a statement of claim suing all the respondent’s conveyance to 1103 Corp., seeking an order setting aside the sale and requiring the transfer of the property to B.A alleging that the conveyance was the product of fraud and conspiracy.

The motion judge dismissed all the appellant’s claims except for the accounting by Bindaas. She held that there was no direct evidence of fraud. The traditional “badges of fraud” were absent. The only two “badges of fraud” potentially present were secrecy in the manner of conveyance, because the appellant was not told of the sale, and the rushed closing of the deal between Bindaas and 1103 Corp. She found that the secrecy and the short closing were explained by the appellant’s history of default and delay.

issues:

(1) Did the motion judge err by considering the traditional “badges of fraud” generally, without consideration of the appellant’s circumstances?

(2) Was the sale to 1103 Corp. improvident and did the motion judge err in concluding otherwise?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court found the motion judge was alive to the badges of fraud relied on by the appellant. The motion judge concluded that, given the appellant’s history of default, it was understandable that the appellant was not advised of the sale to 1103 Corp. It was reasonable for the respondents to be concerned that the appellant would seek to frustrate the sale. The short closing was not unusual or suspicious, given that Bindaas had given the appellant ample time to pay out the money owed on the two mortgages.

(2) No.

The property was sold under Power of Sale. The purported sale to B.A., upon which the appellant relied as a comparator, was for $1 million with a collateral agreement that she be allowed to remain in possession. The sale to 1103 Corp. was for $970,000 “as is”. Thus, 1103 Corp. would assume the arrears in property taxes and no real estate fees were payable. The sale to 1103 Corp., therefore, was more beneficial than the purported arrangement with B.A. 1103 Corp. was an arm’s length purchaser. It was open to the motion judge to determine that the sale was not improvident.


M.E. v. Ontario, 2022 ONCA 714

[Fairburn A.C.J.O., Huscroft and George JJ.A.]

Counsel:

M.E., acting in person

Sheldon Inkol, for the respondent, Children’s Aid Society of Toronto

S.C. Hutchison, for the respondents, G.A. and A.I.

Keywords: Family Law, Crown Wardship, Civil Procedure, Vexatious Litigants, Rules of Civil Procedure, r. 2.1.01, M.E. et al. v. Her Majesty the Queen in Right of Ontario et al., 2019 ONSC 7325, M.E. v. R., 2020 ONCA 429, M.E. et al. v. HMTQ et al., 2021 ONSC 2862, Lochner v. Ontario Civil Police Commission, 2020 ONCA 720, Mukwa v. Farm Credit of Canada, 2022 ONCA 320.

facts:

The appellant commenced an action in April 2016 (the “underlying action”) against the Children’s Aid Society of Toronto (“CAST”) and Her Majesty the Queen in Right of Ontario (“Ontario”), among others. Within this action, the appellant brought a motion for contempt against multiple respondents, including the CAST. The CAST opposed the motion and moved for summary judgment as did Ontario. The contempt motion and the motions for summary judgment were heard in August 2019. The motions for summary judgment were granted and the action was dismissed. The motion for contempt was also dismissed. Costs were awarded against the appellant. In June 2020, the Court of Appeal upheld the dismissal of the contempt motion as well as the finding on costs. Costs were again awarded against the appellant on the appeal from the dismissal of the contempt motion. The Court of Appeal allowed the appellant to appeal from the summary judgment decisions as it related to the action against CAST on the narrow issue involving damages for alleged wrongful disclosure of the appellant’s pre-disposition report to third parties in 2013. Costs were again awarded against the appellant. In total, the costs orders from both levels of court totalled $22,500 and have never been paid.

Following the release of the Court of Appeal’s decision, the appellant attempted to relitigate the issues disposed of by the Court before the Superior Court of Justice. The appellant also attempted to add new parties, specifically some of the respondent’s counsel, to the action. In her capacity as a case management judge, and having received written submissions from the parties, Vella J. dismissed the appellant’s motion under r. 2.1.02(1) as frivolous, vexatious and an abuse of process. The order required that before the appellant could file any further motions within the proceeding she would have to pay the outstanding costs, seek leave to file materials, and provide an affidavit setting out why the motion was meritorious. Further motions were nevertheless heard by the Court of Appeal. The appellant filed a Notice of Appeal from the order of Vella J. on November 1, 2021, but failed to perfect the appeal or request an extension of time to perfect.

The appellant sought various forms of relief in her outstanding appeal, including: (1) a sealing order; (2) leave to amend her pleadings to add six lawyers as defendants; and (3) relief from compliance with the Rules of Civil Procedure. On January 20, 2022, Tulloch J.A. dismissed the appellant’s motions, including finding that there is no jurisdiction to amend the pleadings.

The appellant sought to have Tulloch J.A.’s decision reviewed by the Court, but like the appeal, she did not perfect the motion. The appellant also sought to file a motion for “criminal contempt” against various parties, including counsel for various respondents on appeal and Crown counsel. On July 7, 2022, the parties were notified that the court had stayed their appeal and was considering making an order under rule 2.1.01 to dismiss the appeal. Concurrently, the Court asked the appellant for submissions as to why the appeal should not be dismissed and why the appellant’s request to amend the title of proceedings should be granted. Both the appellant and the respondents only provided submissions on the first question.

issues:

Did the case management judge err in finding that the appellant was a vexatious litigant under rule 2.1.01?

holding:

Appeal dismissed.

reasoning:

The Court held that the case management judge made no errors of fact or law and this appeal was frivolous, vexatious, and an abuse of process by the appellant. The appellant failed to comply with court orders and Rules, pay costs, and to perfect prior appeals. The Court noted that the purported appeal was from a case management judge’s decision to dismiss a motion on the basis that the motion itself was frivolous, vexatious and an abuse of process. The Court held that the motion was a clear attempt to relitigate what had already been decided by the Court and the proposed new causes of action were devoid of merit.

Further, the Court stated that the Notice of Appeal included no arguable ground of appeal and the appellant made baseless and serious allegations about opposing counsel, including allegations about acting fraudulently, illegally modifying files, and concealing criminal conduct. Many of the characteristics of a vexatious litigant, as set out in Lochner v. Ontario Civil Police Commission, were applicable in this case, such as: attempting to bring multiple proceedings; attempting to relitigate issues decided in past proceedings; failing to pay costs awards; pursuing proceedings where a reasonable person would not expect to receive the relief sought; and inappropriate conduct such as rambling and rhetorical submissions.

The Court repeated that it has implicit powers that derive from its authority to control its own process to make procedural orders to prevent an abuse of process and to ensure the just and efficient administration of justice. Accordingly, the Court held that, in order to prevent further abuses of process, the appellant would not be permitted to file any further materials without leave of a judge of the Court.


Fair v. Nesbitt Burns Inc., 202 ONCA 711

[Simmons, Paciocco and Zarnett JJ.A.]

Counsel:

A.S. Schorr, for the appellant

N. Holovaci, for the respondent BMO Nesbitt Burns Inc.

J. D. Harris-Lowe, for the respondents A. R. F., A. C. A., and A. R. F. and A. C. A., Estate Trustees on Behalf of the Estate of the L. L. F. F.

Keywords: Wills and Estates, Constructive Trusts, Contracts, Financial Advisors, Duty to Disclose, Family Law Act, R.S.O. 1990, c. F.3, s. 13, Evidence Act, R.S.O. 1990, c. E.23, s. 13, Davidson v. Noram Capital Management Inc. (2005), 13 B.L.R. (4th) 35 (Ont. S.C.)., Moore v. Sweet, 2018 SCC 52, Edell v. Sitzer (2001), 55 O.R. (3d) 198 (S.C.), Hryniak v. Mauldin, 2014 SCC 7

facts:

Shortly before his death on November 13, 2016, L.F. F. (“Mr. F.”) changed the beneficiary designations on three investment accounts he held with the respondent BMO Nesbitt Burns Inc. (“BMO Nesbitt”). Before the change, the beneficiary of the accounts was Mr. F’s wife, the appellant A. F. F. (“Ms. F.”). After the change, the beneficiaries were Mr. F’s children from a former marriage, the respondents A. R. F. and A. C. A. (collectively, the “Children”).

Ms. F. learned of the change after Mr. F’s unexpected death and alleged that the change was a breach of an agreement she had with Mr. F. Ms. F. brought an action against BMO Nesbitt, alleging that it violated a duty to advise her of the change when it occurred. Ms. F. also sued Mr. F’s Estate and his Children, alleging a constructive trust over the proceeds of the investment accounts based on the doctrine of unjust enrichment.

On a motion for summary judgment, the action was dismissed. The motion judge dismissed Ms. F’s action against BMO Nesbitt because it was premised on a duty to disclose, and no such duty existed. After referring to the fact that Mr. F’s accounts were not held jointly with Ms. F., and referring to the duty of confidence in a bank-customer relationship, the motion judge found that there was no obligation either in statute or common law to notify third parties about an individual’s beneficiary choices. To impose such an obligation would be an absolute breach of the individual’s privacy and their right to dispose of assets as they choose.

Ms. F. appealed on the basis that the motion judge erred in failing to find that there was a genuine issue requiring a trial with respect to her claim that BMO Nesbitt is liable for failing to disclose the change in beneficiary. She submitted that BMO Nesbitt is not a bank but an investment advisor, so the motion judge’s reference to bank-customer privacy was off point. Ms. F contended that, as an investment advisor, BMO Nesbitt had a duty to ensure that their clients were fully informed as to all material matters relevant to their portfolio and non-disclosure was a breach of this duty.

issues:

(1) Did the motion judge err in referring to Mr. F. and BMO Nesbitt’s relationship as one of bank-customer?

(2) Did the motion err in dismissing Ms. F.’s action against Mr. Fair’s Estate and his Children?

(3) Did the motion judge err in failing to find that there was a genuine issue requiring a trial with respect to the Ms. F.’s claim that BMO Nesbitt violated their duty to advise her of the beneficiary change?

holding:

Appeal dismissed.

reasoning:

(1) Yes.

The Court held that the motion erred in referring to Mr. F’s investment account as one of bank-customer relationship, but the error was inconsequential. The Court concluded that the motion judge’s essential finding, that there was nothing in the record to support the existence of a duty to disclose the change, was free of error.
The Court noted that Mr. and Ms. F both maintained separate investment accounts at BMO Nesbitt. BMO Nesbitt had shared, on consent of both parties, information about the performance of those investment accounts. However, sharing of information on consent of both parties does not create a duty on the financial institution to disclose account changes made by one owner, to the other owner.

The Court further stated that Ms. F’s reliance on Davidson v. Noram Capital Management Inc. was misplaced. The duty referred to in Noram was to disclose matters material to the account holder’s investments. The Court noted that in the present case, Ms. F. claimed that BMO Nesbitt should have disclosed a matter relating to Mr. F’s accounts, not her own.

(2) No.

Ms. F’s claim against Mr. F’s Estate and his Children were asserted on the basis of the Supreme Court’s decision in Moore v. Sweet (“Moore”). The motion judge disagreed that Moore was applicable because: (1) there was no conduct of Ms. F.’s that was analogous to the payment of premiums in Moore; and, (2) apart from Ms. F.’s assertion, there was nothing that would support the existence of an actual “agreement”.

The Court found that it was open to the motion judge to view Ms. F’s evidence as insufficient to form a claim on the basis of Moore. In Moore, the agreement that formed the basis of the claim was clearly established. The Court held that, in this case, Ms. F’s affidavit asserted that Mr. F. and herself had agreed that, except for the monies from Hydro One, all of the other investments that both of the parties had would pass on to the survivor when one had died. Ms. F. did not provide particulars in her affidavit as to when or how this agreement was made.

The Court also noted that Ms. F’s affidavit and examination for discovery contradicted one another. The affidavit described the agreement as Mr. F. leaving Ms. F. his whole estate except the funds from Hydro one, while in the examination for discovery Ms. F. described the agreement as one covering all investment accounts, not just those Mr. F. had designated Ms. F. as beneficiary. The motion judge found that the appellant’s characterization of the agreement was unclear since the subject matter of the purported agreement had changed. The Court held that the motion judge was entitled to make this finding of fact and such a finding was sufficient to distinguish the case from Moore.

(3) No.

The Court held that the motion judge’s finding as to whether there was a genuine issue requiring a trial, and whether it was necessary to resort to the additional fact-finding powers the summary judgment rule provides for in order to make that determination, were entitled to deference.


Caja Paraguyaya De Jubilaciones Y Pensiones Del Personal De Itaipu Binacional v. Obregon , 2022 ONCA 724

[Sossin J.A. (Motion Judge)]

Counsel:

A.D., acting in person

M. Anevich, appearing as duty counsel

J. De Vellis and J. King, for the responding party

E. Whitford, for the Attorney General of Ontario

Keywords: Civil Procedure, Civil Contempt, Stay Pending Appeal, Bail Pending Appeal, Courts of Justice Act, R.S.O 1990, c. 43, s. 106, Criminal Code, R.S.C. 1985, c. C-46, ss. 673, 679, Rules of Civil Procedure, r. 60.11, 63.02(1), Criminal Appeal Rules, r. 22, Directv, Inc. v. Boudreau (2005), 42 C.P.R. (4th) 388 (Ont. C.A.), T.(M.) v. A.(H.), [1995] 1 S.C.R. 445, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Chiang (Trustee of) v. Chiang, 2007 ONCA 529, R. v. Oland, 2017 SCC 17, Kopaniak v. MacLellan (2002), 159 O.A.C. 37 (C.A.), DM v. WS, 2019 ABCA 422, R. v. Hassan, 2017 ONCA 1008, R. v. Bissonnette, 2022 SCC 23, Master Linda S. Abrams et al., Halsbury’s Laws of Canada, “Civil Procedure”, (Toronto: LexisNexis Canada, 2021 Reissue)

facts:

The moving party, AD, sought release from custody pending an appeal of his sentence for civil contempt. This contempt related to the dissipation of funds contrary to court orders after AD was found civilly liable for defrauding the responding party. He was originally sentenced by Dunphy J. on April 5, 2019, for a period of 12 months (with no restrictions on parole). This sentence was upheld on appeal. AD was granted parole after he served seven months of his sentence, and was subsequently found to have engaged in further acts of contempt while on parole.
On February 5, 2021, Koehnen J. found AD in contempt for the second time. This finding was also upheld on appeal. On April 28, 2022, AD was sentenced by Koehnen J. to 16 months in jail without the possibility of parole. However, this sentence was subject to the condition that he may be released at any point if he can demonstrate that he has purged his contempt. AD brought a motion for release from custody pending an appeal of his sentence for civil contempt.

issues:

(1) Is the applicable test for the stay pending appeal of a of a civil order for contempt the normal test of a stay pending appeal of a civil order or the test for bail pending appeal applicable under the criminal law?

(2) Is there a serious issue to be determined?

(3) Would the moving party suffer irreparable harm if the stay is not granted?

(4) Does the balance of convenience favour granting the stay?

holding:

Motion dismissed.

reasoning:

(1) The applicable test for the stay pending appeal of a civil contempt order.

Generally, bail pending an appeal is governed by s. 679 of the Criminal Code, R.S.C. 1985, c. C-46. However, civil contempt is not governed by the Criminal Code. AD was subject to a warrant of committal pursuant to the Courts of Justice Act, R.S.O 1990, c. 43 and r. 60.11 of the Rules of Civil Procedure. The moving party argued that where the purpose of the sentence is to incent compliance with a civil order, a civil stay may be the preferred framework, but where the purpose is punishment for a contemnor who is unable or unwilling to purge the contempt, s. 679 of the Code is appropriate. The observing Attorney General of Ontario submitted that s. 679 is not available to an individual serving a custodial sentence for civil contempt. This is because the definition of “sentence” in s. 673, which applies to criminal appeals, does not include sentencing orders made in relation to the common law offence of civil contempt.

The Court noted that there was conflicting case law on the correct standard to apply. In T.(M.) v. A.(H.), on an application for release pending appeal of a sentence for civil contempt, Sopinka J. stated that s. 679 “arguably” does not apply to civil contempt, and he therefore applied the test for a stay from RJR-MacDonald Inc. v. Canada. In Chiang (Trustee of) v. Chiang, Doherty J.A. did not specifically refer to the uncertainty between the two standards, but stated that he would “bear in mind” the principles underlying a stay motion as well as a motion for bail pending appeal. In this case, however, both parties approached the matter as an application under s. 679 of the Code.

The Court held that the proper procedural route for the release of a person serving a sentence for civil contempt is a stay of that civil order through the RJR-MacDonald test, but the factors of this test may be informed by the principles underlying applications for bail pending appeal as outlined in R. v. Oland. In reaching this conclusion, the Court stated three characteristics that distinguish sentences for civil contempt from sentences for criminal convictions: (1) civil contempt is not purely penal – it is intended to incent compliance with court orders, (2) a sentence for civil contempt will generally end when the contempt is purged, and (3) with civil contempt the court does not generally have the benefit of Crown submissions on the public interest.

(2) Yes.

The moving party argued that the sentence imposed was disproportionate and following the Supreme Court of Canada’s decision in R. v. Bissonnette, any sentence which precludes eligibility for parole violates the Canadian Charter of Rights and Freedoms. The Court held that this ground of appeal easily met the threshold of “sufficient merit” and the question of whether Bissonnette alters the use of contempt sentences without the possibility of parole is an important matter to be settled.

(3) No.

Continued detention would appear to constitute irreparable harm. However, this factor depended on the length of time before AD was able to have his appeal heard. The Court noted that AD’s appeal had not yet been scheduled. Though this consideration was relevant, the Court held that it did not rise to irreparable harm because AD was in the inmate appeals stream and could schedule an appeal without the delay that would accompany a solicitor appeal. Further, the harm was not irreparable because AD could end his detention at any time by purging his contempt.

(4) No.

The Court held that the seriousness of AD’s actions must be considered at this stage of the analysis. AD disregarded court orders and acted contrary to his own sworn affidavit. The Court noted that the contempt was by any measure extreme. As stated by Koehnen J., this was not a single act of contempt but an ongoing pattern of serial breaches of court orders. Even a brief stay pending appeal would frustrate the purposes of the court’s response to AD’s contempt by allowing him the opportunity to continue actively disregarding the court’s orders. The Court agreed with Doherty J.A. in Chang in that the public interest in the enforcement of the committal order must outweigh the moving party’s liberty interest.


402 Mulock Investments Inc. v Wheelhouse Coatings Inc. , 2022 ONCA 718

[Feldman, Hoy and Lauwers JJ.A.]

Counsel:

R. B. Moldaver, for the appellant/respondent by way of cross-appeal

P. V. Hiebert, for the respondent/appellant by way of cross-appeal

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Default, Security Deposits, Additional Rent, Capital Replacement, Amortization, Civil Procedure, Orders, Enforcement, Writs of Possession, Res Judicata, Issue Estoppel, Abuse of Process, Commercial Tenancies Act, R.S.O. 1990, c. L.7, ss. 80, 82, Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020, S.O. 2020, c. 36, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Behn v. Moulton Contracting Ltd., 2013 SCC 26, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Corner Brook (City) v. Bailey, 2021 SCC 29

facts:

On December 9, 2020, a bailiff posted a lockout notice advising Wheelhouse Coatings Inc. (the “Tenant”) that 402 Mulock Investments Inc. (the “Landlord”) had terminated the lease for the unit. On December 24, 2020, the Landlord entered the unit and removed all of the Tenant’s property. The Landlord leased the premises to a third party, which, in turn subleased a portion of the premises. On January 6, 2021, the Tenant issued a Notice of Action, alleging that the Landlord had illegally terminated the Lease and distrained the Tenant’s property. The Tenant also served a Notice of Motion seeking various interlocutory relief, including an injunction and the return of the Second Security Deposit (the “Deposit”) in the amount of $65,000 held by the Landlord under s. 1.9 of the Lease.

Justice Bird found that, in re-entering the leased premises at the time that it did, the Landlord violated s. 82 of the Commercial Tenancies Act (the “CTA”), as amended by the Protect, Support and Recover from COVID-19 Act (Budget Measures). That section provides that no landlord shall exercise a right of re-entry in respect of a tenancy referred to in ss. 80(1) or 80(2) during the applicable non-enforcement period. Justice Bird found that the non-enforcement period was in effect from December 8, 2020 to January 31, 2021. She noted that during the period from October 31, 2020 to December 8, 2021 there was nothing prohibiting landlords from re-entering the premises. She ordered the Landlord to give vacant possession of the portion of the leased premises not subject to subleases to the Tenant no later than April 15, 2021, and to deliver the Tenant’s property in its possession to the Tenant. She made no order in relation to the Deposit.

After Bird J. released her reasons, the Landlord invoiced the Tenant for a share of the cost of replacing the roof membrane, amortized over two years. The Landlord deducted the invoiced amount from the Deposit when the invoice was not paid. The Landlord asserted that s. 1.9 of the Lease required the Tenant to then “top up” the Deposit to $65,000 and relied on the Tenant’s failure to do so as a further default warranting an order granting it a writ of possession. The application judge held that the invoice was in conformity with ss. 2.6 and 1.9 of the Lease and was payable by the Tenant; however, s. 1.9 of the Lease required the Landlord to have returned the Deposit. Accordingly, the Landlord should not have deducted the invoiced amount from the Deposit and no “top up” was required. The application judge ordered the Tenant to pay the invoice, amortized over two years, and declared that the Landlord should have returned the Deposit on August 15, 2020. She offset the amount of the invoice against the Deposit and ordered the net amount to be paid by the Landlord to the Tenant. The application judge declined to issue a writ of possession.

The Landlord appealed the application judge’s order declaring that it should have returned the Deposit and, because the Lease soon expired, the Landlord no longer sought a writ of possession. The Tenant cross-appealed, arguing that the application judge erred in concluding that the invoice was in accordance with ss. 2.6 and 1.6 of the Lease and permitting the Landlord to deduct the amount of the invoice from the Deposit before returning the balance of the Deposit to the Tenant.

issues:

On Appeal

(1) Did the application judge err in failing to conclude that the issue of the return of the Deposit was barred by res judicata or as an abuse of process?

(2) Did the application judge err in declaring that the Landlord should have returned the Deposit in the absence of a motion or counter application for a return of the Deposit?

(3) If the issue of the Deposit was properly before the application judge, did the application judge err in interpreting s.1.9 of the Lease as requiring the return of the Deposit in the absence of evidence that the Tenant was not in default?

On Cross-Appeal

(1) Did the application judge err in finding that the cost of replacing the roof membrane was to be amortized as Additional Rent payable by the Tenant over two years?

holding:

Appeal allowed.

Cross-appeal allowed.

reasoning:

(1) No.

The Court held that the requirements for res judicata and abuse of process had not been made out. Res judicata prevents the re-litigation of previously adjudicated and finally decided matters. The doctrine contains two branches: cause of action estoppel and issue estoppel. Cause of action estoppel precludes the parties from litigating claims that have been determined in a prior action. Issue estoppel precludes the re-litigation of issues that have been previously decided in another proceeding. Abuse of process engages the inherent and residual discretion of the court to prevent the misuse of its procedure.

The Court found that the preconditions to cause of action estoppel and issue estoppel had not been made out. Although the Tenant sought the return of the Deposit in its Notice of Motion, Bird J. indicated she would only deal with the issue of the applicability of Part IV of the CTA and what remedy was appropriate if the re-entry was unlawful. Accordingly, the Court held that the issue of whether the Landlord was entitled to retain the Deposit was not res judicata because Bird J. did not decide whether the Landlord was entitled to retain the Deposit.

The Court rejected the Landlord’s argument that, even if not determined by Bird J., the issue of the Deposit was barred by cause of action estoppel because the Tenant could have argued the issue or appealed the order of Bird J. on the basis that she erred by not addressing all the relief sought by the Tenant in its Notice of Motion. The Court held that the issue was not determined because Bird J. decided not to determine it. The Court noted that the Landlord brought its application for a writ of possession only about six weeks after Bird J. released her reasons. The Court determined that it was the Landlord’s application in seeking relief in the form of a writ for possession that put in issue whether the Landlord was entitled to have retained the Deposit. Therefore, the Court noted that the issue of the Deposit could not have been argued before Bird J. through the exercise of reasonable diligence.

Finally, the Court held that the Tenant raising the issue of the Landlord’s entitlement to the Deposit before the application judge, in response to the application for a writ of possession, was not a misuse of the court’s procedure nor an abuse of process. The Court noted that it was likely the most efficient manner of determining the issue.

(2) No.

The Court held that the application judge appropriately declared in her judgment that the Landlord should have returned the Deposit. The application judge had to consider whether the facts underlying the Landlord’s application for the writ of possession were made out, including whether the Landlord was entitled to deduct the amount of the invoice from the Deposit and require the Tenant to “top up” the Deposit, or whether, as the Tenant argued, the Landlord should have returned the Deposit. The Court held that, having made these determinations in her judgment provided clarity that the issue was judicially determined.

(3) Yes.

The Court found that the application judge’s interpretation of section 1.9 of the Lease gave no effect to the clear provision that the Deposit shall be returned “provided that the tenant is not then in default at that time” (emphasis added) was clearly wrong. Therefore, deference was displaced. The Court held that the only reasonable interpretation of the Lease was that if the Tenant was in default on August 14, 2020, the Landlord was entitled to continue to hold the Deposit for the remainder of the Lease, and was required to return the remainder, if any, to the Tenant upon expiry of the Lease.

The Court found that the application judge had erred by not considering whether the Tenant was in default under the Lease. The Court found that the Tenant was in default as the Tenant had conceded that if amounts paid by the government under the Canada Emergency Commercial Rent Assistance program for August 2020 were not treated as having been paid on August 1, 2020, then the Tenant was in default on August 14, 2020. The Tenant was unable to point to any term in the Lease or legislative provision that would have deemed the rent subsidies to have been paid when the rent was due. Therefore, the Tenant was in default, and the Landlord was not required to return the Deposit.

Cross-Appeal

(1) Yes.

The application judge agreed with the Landlord that, by operation of sections 2.6 and 1.6 of the Lease, the cost of replacing the roof membrane was to be amortized as Additional Rent. The Tenant argued that the application judge’s interpretation of these sections was tainted by four palpable and overriding errors or extricable questions of law. The Court disagreed that the first three were errors, but agreed with the fourth.

First, the Tenant argued that the application judge’s rejection of its interpretation of ss. 2.6 and 1.6 amounted to a palpable and overriding error. The Tenant argued that the words “serving the Leased Premises” in s. 2.6 made it clear that its responsibility for costs was limited to the roof covering its unit serving the Leased Premises. The Court disagreed as section 2.6 described the Landlord’s obligation to the Tenant to maintain, repair, and/or replace the roof membrane. Further, the Court agreed with the application judge that s. 1.6 addressed the extent to which such costs are to be paid by the Tenant as Additional Rent. In any event, the evidence before the application judge was that the roof membrane of the roof for the entire building was being replaced.

Second, the Tenant argued that the application judge erred in their interpretation of s. 1.6 because she failed to consider whether the replacement of the roof was a structural repair or replacement, within the meaning of s. 1.6, or made a clear error in concluding that it was not. The Court disagreed as the application judge had adverted to the Tenant’s argument that the work done to the roof constituted structural repairs and that under the Lease the tenant was not required to pay for structural repairs, and implicitly rejected it. The Court concluded that there was no extricable error of law and was not persuaded that this amounted to a palpable and overriding error.

Third, the Tenant argued that the replacement of the roof membrane did not relate to the “Leased Premises” and therefore could only relate to the premises of a different or other tenant. The Court rejected this argument as the record supported that repairs were not “done specifically for other tenants”.

Finally, the Tenant argued that the application judge had failed to address the its argument, that, if not a structural repair, the replacement of the roof membrane was a capital replacement within the meaning of s. 1.6 and therefore was to be amortized over its useful life, determined in accordance with generally accepted accounting principles. The Court agreed with the Tenant, and struck that portion of the application judge’s judgment, declaring that the Tenant was responsible for the payment of the invoice, without prejudice to either party seeking a determination of the applicable amortization period and, as a consequence, the amount of Additional Rent payable by the Tenant as a result of the replacement of the roof membrane.


Correct Building Corporation v. Lehman, 2022 ONCA 723

[Feldman, Hoy and Lauwers JJ.A.]

Counsel:

C. Stevenson, for the moving party

A. Formosa and C. Steven, for the responding parties

Keywords: Civil Procedure, Appeals, Perfection, Extensions for Time, Courts of Justice Act, RSO 1990, c C43, s. 7(5), Municipal Act, 2001, SO 2001, c 25, s. 448, Rules of Civil Procedure, r. 61.16(6), Machado v. Ontario Hockey Association, 2019 ONCA 210, Hillmount Capital Inc. v. Pizale, 2021 ONCA 364, Iqbal v. Mansoor, 2022 ONCA 198, 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2015 ONCA 5, Sheth v. Randhawa, 2022 ONCA 89, Howard v. Martin, 2014 ONCA 309, Derakhshan v. Narula, 2018 ONCA 658, 40 Park Lane Circle v. Aiello, 2019 ONCA 451, Duca Community Credit Union Ltd. v. Giovannoli (2001), 142 O.A.C. 146 (C.A.), Auciello v. Mahadeo, 2016 ONCA 414

facts:

Correct Group Inc. (“CGI”) was one of the plaintiffs who started an action against individual defendants and the City of Barrie (the City”). The defendants brought a motion for summary judgment. The issue before the summary judgment judge related to the concern of the development of the Allandale Station lands in the City and CGI’s allegation that certain archaeological and environmental reports in the possession of the City should have been disclosed to CGI. The summary judgement judge dismissed CGI’s action against the City and the individual defendants.
CGI sought a 90-day extension of time to perfect its appeal from a single judge of the Court. The motion judge granted the 90-day extension with respect to CGI’s appeal against the City, but denied the extension in respect of its appeal against the individual respondents. The motion judge granted the extension of time on the grounds that: (1) the delay was a short one; (2) the moving party’s explanation for the delay was reasonable; and (3) if there was any prejudice caused by the brief delay, it was not significant.

The motion judge examined the merits of the appeals against the City and the individuals, who were city staff and councillors. He noted that there were a number of grounds of appeal from the dismissal of the action against the City, including both legal and factual matters, and concluded that he could not say that the appellant’s appeal against the City “lacks merit so as to make denying it the right of appeal reasonable.”

The motion judge noted that the summary judgment judge dismissed the action against the individual city councillors and staff members “in a relatively summary fashion”, finding that the allegation of bad faith, which was necessary to overcome the immunity provided in s. 448 of the Municipal Act, 2001, lacked any evidence and was without merit. The motion judge saw “no likelihood of successfully challenging this finding on appeal”. He likened this appeal to the one in 1250264 Ontario Inc. v. Pet Valu Canada Inc., where the motion judge denied the extension because she found no “scintilla suggesting that the appeal ha[s] merit”.

The appellant moved under r. 61.16(6) of the Rules of Civil Procedure and s. 7(5) of the Courts of Justice Act, before a panel to review the motion judge’s decision denying the extension of time in respect of the appeal against the individuals.

issues:

(1) Did the motion judge commit a reviewable error requiring intervention by a panel of the Court pursuant to r. 61.16(6)?

holding:

Motion granted.

reasoning:

(1) Yes.

The Court held that a panel review of a motion judge’s decision under s. 7(5) of the Courts of Justice Act is not a de novo determination. Discretionary decisions of a motion judge are entitled to deference. However, a reviewing panel may intervene if the motion judge erred in principle or reached an unreasonable result, or if the motion judge’s decision reflects legal error or a misapprehension of material evidence.

Accordingly, the Court determined that the motion judge made two reviewable errors: he misapprehended and minimized the potential strength of the merit of the appeal, and he erred in law by failing to apply the principle from 40 Park Lane Circle v. Aiello that even where it is difficult to see the merits of the proposed appeal, a party should not be deprived of their right of appeal when there is no real prejudice to the other side. Accordingly, the Court held that motion judge’s decision to deny an extension of time was subject to review.
The Court reiterated the test for granting an extension of time to appeal, citing Sheth v. Randhawa:

“The test on a motion of this kind is well-established. The ultimate question is whether the justice of the case warrants the order requested. Factors to be considered in making the decision are: (i) whether the appellant formed an intention to appeal within the appeal period; (ii) the length of the delay; (iii) the explanation for the delay; (iv) the merits of the proposed appeal; and (v) prejudice to the responding parties.”

The Court noted that the appellant had appealed on time and only needed a brief extension to perfect because of the volume of material to be assembled and that there was no discernable prejudice to the respondents. The question that remained for the motion judge was (1) whether there was some potential merit to the appeal and (2) whether the justice of the case required that the extension be granted.

The Court stated that the merits factor is to be used to support granting an extension when the other factors do not favour the applicant, but because there may be some potential merit to the case, it is still in the interests of justice that the applicant’s right of appeal not be removed, just because of lateness. The Court endorsed the 40 Park Lane decision where the motion judge in that case stated that the question is only whether there is “so little merit in the proposed appeal that the appellant should be denied [his] important right of appeal.” Even where it is difficult to see the merits of a proposed appeal, a party is entitled to appeal and should not be deprived of that entitlement where there is no real prejudice to the other side.

The Court stated that the decision relied on by the motion judge, Pet Valu, was a case where the absence of any merit was used by the motion judge to deny the extension. There, the notice of appeal was generically framed, and did not address the merits. As a result, there was no basis to find any potential merit in the appeal, therefore the justice of the case did not require an extension. The Court held that the Pet Value decision did not apply in this case, as the record showed significant evidence of failure by staff to disclose relevant reports to the former mayor of Barrie or to the appellant, and evidence that staff had different views on whether development should proceed on the site.

The Court concluded that the delay was short, the moving party’s explanation for the delay was reasonable, and in any event, the appeal from the dismissal of the claim against the City was proceeding in any event. The voluminous record was already being produced and there was no prejudice to the other side or to the Court to hear both matters together. The Court held that it would be more efficient and effective for the Court to consider the merits of both matters together, on a full record. The Court determined that the justice of the case required an extension to be granted to perfect the appeal against the individual respondents.


SHORT CIVIL DECISIONS

Van Decker Estate v. Van Decker, 2022 ONCA 712

[Feldman, Hoy and Favreau JJ.A.]

Counsel:

K. Sanchez, for the appellants

D. Lobl and K. Domratchev, for the respondent

Keywords: Real Property, Landlord and Tenant, Occupation Rent, Wills and Estates, Civil Procedure, Adjournments, Corroborating Evidence, Evidence Act, R.S.O. 1990, c. E. 23, s. 13, Toronto Dominion Bank v. Kylton, 2010 ONCA 752, Khimji v. Dhanani (2004), 69 O.R. (3d) 790

Hategan v. Frederiksen, 2022 ONCA 715

[Lauwers, Roberts and Trotter JJ.A.]

Counsel:

J. Kary, for the moving party

M. J. Freiman, for the responding party, B. F.

L. Cadieux-Shaw, for the respondent, E.M. F.

Keywords: Civil Procedure, Security for Costs

Rebello v. Del Property Management, 2022 ONCA 720

[Feldman, Hoy and Favreau JJ.A.]

Counsel:

E. Turkienicz, for the moving parties/responding parties by way of cross-motion

T. R., acting in person (by Zoom, audio only)

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Security for Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(2)


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