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

Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of February 26, 2024.

Continue Reading

Congratulations to our very own Anthony Gatensby and our recently retired partner, Dominic Clarke, for the result achieved for our client in Loblaw Companies Limited v. Royal & Sun Alliance Insurance Company of Canada. This is a seminal insurance coverage decision in which the Court discussed the appellants’ duty to defend the respondents in several billion-dollar class action lawsuits related to the sale and distribution of opioid drugs in Canada. The Court addressed numerous important issues that commonly arise in insurance coverage matters, including the apportionment of defence costs amongst the various insurers, the treatment of self-insured retentions, relief from forfeiture for pre-tender defence costs, conflicts of interest, and separate representation by independent counsel. The Court of Appeal allowed the appeals in part. For an in-depth review of this decision by Anthony and our partner, Jason Mangano, please see their article discussing the decision here.

Fletcher v Ontario is an aboriginal law decision involving the Missanabie Cree First Nation’s treaty rights claim under Treaty No. 9. The treaty was found to provide reserve lands to the First Nation on the basis of the population at the time the treaty was entered into in 1906 (no more than one square mile per family of five).

Penate v. Martoglio was a MedMal case in which the trial judge discharged the jury and dismissed the action, finding the plaintiff had not proved that the doctor’s negligence had caused the baby’s brain damage. The Court allowed the appeal solely on the basis that the trial judge failed to provide adequate reasons for discharging the jury. Litigants have a right to a jury trial, and it should not be taken away except as a last resort and when it is, there must be adequate reasons explaining why. A new trial was ordered.

Castillo v. Xela Enterprises Ltd. is a civil contempt decision involving the enforcement of an equitable receivership order to enforce a judgment. The defendant was sentenced to 30 days in jail. The appeal was dismissed.

In Markham (City) v Ross, the Court dismissed an appeal against the enforcement of a Heritage Easement Agreement by the City of Markham for unauthorized alterations to the appellant’s property. There was no error by the application judge in finding that the appellant had breached the Agreement by constructing a hockey rink and cabana without approval.

Ihnatowych Estate v. Ihnatowych was a will rectification case. A biological son made a claim under his late father’s will. His siblings, who were children of their father’s marriage to their mother, were successful in obtaining an order for rectification to exclude their brother as a beneficiary under their father’s estate. The Court dismissed the appeal.

In Steinberg v Adderley, the Court allowed the appeal and enforced a litigation funding agreement. There was no finding of unconscionability, accordingly the motion judge erred in reducing the amount of interest payable.

In Vyazemskaya v. Safin, the appellant was found to have sought a divorce in Russia to avoid Ontario’s spousal support obligations. The respondent contested the Russian divorce. The trial judge refused to recognize the Russian divorce in Ontario, citing “unfair forum-shopping” by the appellant as a violation of public policy, given the intent to avoid spousal support, which is contrary to Ontario’s legal principles. The Court dismissed the appeal.

In another foreign divorce case, Sonia v. Ratan, this one involving a Bangladesh divorce, the Court dismissed the appeal. On the basis of fraud, the motion judge was justified in setting aside the consent orders that did not recognize the Bangladesh divorce after it was discovered that the wife had remarried following the Bangladesh divorce (and before the consent orders were made).Moreover, the Bangladesh divorce was not a “bare” talaq, and accordingly, it was properly recognized in Ontario.

In Falsetto v. Falsetto, the Court allowed an appeal in favour of a former father-in-law against his former daughter-in-law in a purchase money resulting trust claim in respect of a property. Justice MacPherson dissented.

In Abaxx Technologies Inc. v. Pasig and Hudson Private Limited, the motion judge dismissed the action for want of jurisdiction and a lack of a real and substantial connection. The Court dismissed the appeal.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Storoszko & Associates v. 1489767 Ontario Limited, 2024 ONCA 147

Keywords: Bankruptcy and Insolvency, Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Orders, Variation, Abuse of Process, Courts of Justice Act, R.S.O. 1990, c. C.43, s 19, Rules of Civil Procedure, r. 59.06, Gallen v. Sutherland, 2023 ONCA 170, Elguindy v. Elguindy, 2021 ONCA 768, Mountain View v. McQueen, 2014 ONCA 194, R. v. Cunningham, 2010 SCC 10, Marché D’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, R. v. Church of Scientology (1986), 1986 CanLII 4633 (C.A.), R. v. 974649 Ontario Inc., 2001 SCC 81

Loblaw Companies Limited v. Royal & Sun Alliance Insurance Company of Canada, 2024 ONCA 145

Keywords: Contracts, Interpretation, Insurance, Coverage, Duty to Defend, Defence Costs, Apportionment, Deductibles, Self-insured Retentions, Representation by Solicitor, Conflicts of Interest, Remedies, Relief from Forfeiture, Civil Procedure, Class Proceedings, Competition Act, R.S.C. 1985, c. C-34, Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2, Civil Code of Québec, S.Q. 1991, c. 64, Quebec Charter of Human Rights and Freedoms, R.S.Q., c. C-12, Hanis v. Teevan, 2008 ONCA 678, Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, Markham (City) v. AIG Insurance Company of Canada, 2020 ONCA 239, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Goodyear Canada Inc. v. American International Companies, 2013 ONCA 395, Lombard General Insurance Company of Canada v. 328354 B.C. Ltd., 2012 BCSC 431, St. Paul Fire & Marine Insurance Co. v. Durabla Canada Ltd. (1996), 29 O.R. (3d) 737 (C.A.), Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, AIG Insurance Company of Canada v. Lloyd’s Underwriters, 2022 ONCA 699, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, International Radiography and Inspection Services (1976) Ltd. v. General Accident Assurance Company of Canada (1996), 47 Alta. L.R. (3d) 137 (C.A.), Hanis v. University of Western Ontario (2005), 32 C.C.L.I. (4th) 255 (O.N.S.C.), Derksen v. 539938 Ontario Limited, 2001 SCC 72, Surrey (District) v. General Accident Assurance Co. of Canada (1996), 19 B.C.L.R (3d) 186 (C.A.), Stonewall Insurance Co. v. Asbestos Claims Management Corp., 73 F. (3d) 1178 (2d Cir. 1995), General Electric Canada Co. v. Aviva Canada Inc., 2010 ONSC 6806, David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Co. (2005), 76 O.R. (3d) 161 (C.A.), Ontario v. St. Paul Fire and Marine Insurance Co., 2023 ONCA 173, Monk v. Farmers’ Mutual Insurance Company (Lindsay), 2019 ONCA 616, Kozel v. Personal Insurance Co., 2014 ONCA 130, Lloyd’s Underwriters v. Blue Mountain Log Sales Ltd., 2016 BCCA 352, GFL Infrastructure Group v. Temple Insurance Company, 2022 ONCA 390, Sovereign General Insurance Co. v. Walker, 2011 ONCA 597, Brockton (Municipality) v. Frank Cowan Co. (2002), 57 O.R. (3d) 447 (C.A), Zurich of Canada v. Renaud & Jacob, [1996] R.J.Q. 2160 (C.A.), Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363, Canadian Indemnity v. Canadian Johns-Manville Co., [1990] 2 S.C.R. 549, Canadian Newspapers Co. v. Kansa General Insurance Co. (1996), 30 O.R. (3d) 257 (C.A.), Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47, Parlee v. Pembridge Insurance Co., 2005 NBCA 49, San Diego Federal Credit Union v. Cumis Ins. Society Inc.,162 Cal. App. 3d 358 (1984), Foremost Ins. Co. v. Wilks, 206 Cal. App. 3d 252 (1988), Glassford v. TD Home and Auto Insurance Company (2009), 94 O.R. (3d) 630 (S.C.), Trenton Cold Storage Ltd. v. St. Paul Fire and Marine Insurance Co. (2001), 146 O.A.C. 348, Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53, Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52, General Accident Assurance Company et al. v. Chrusz et al. (1999), 45 O.R. (3d) 321 (C.A.), Fellowes, McNeil v. Kansa General International Insurance Co. (2000), 138 O.A.C. 28

Fletcher v. Ontario, 2024 ONCA 148

Keywords: Aboriginal Law, Honour of Crown, Treaty Rights, Treaty No. 9, Interpretation, Standard of Review, Civil Procedure, Sealing Orders, Settlements, Enforcement, Appeals, Abuse of Process, Indian Act, R.S.C. 1985, c I-5, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R. v. Marshall, [1999] 3 S.C.R. 456, Lac La Ronge Indian Band v. Canada, 2001 SKCA 109, Restoule v. Canada (Attorney General), 2021 ONCA 779, R. v. Marshall, [1999] 3 S.C.R. 456, Ross River Dena Council Band v. Canada, 2002 SCC 54, Ermineskin Indian Band and Nation v. Canada, 2009 SCC 9, Halfway River First Nation v. British Columbia, 1999 BCCA 470, West Moberly First Nations v. British Columbia, 2020 BCCA 138, Caron v. Alberta, 2015 SCC 56, R. v. Sioui, [1990] 1 S.C.R 1025, Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, R. v. Bernard, 2005 SCC 43, R. v. Badger, [1996] 1 S.C.R. 771, R. v. Taylor and Williams (1982), 34 O.R. (2d) 360 (C.A.), Whiteduck v. Ontario, 2023 ONCA 543, Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, Mikisew Cree First Nation v. Canada (Governor General in Council), 2018 SCC 40, Palmer v. The Queen, [1980] 1 S.C.R. 759, Catholic Children’s Aid Society of Metropolitan Toronto v. M. (C.), [1994] 2 S.C.R. 165, Sherman Estate v. Donovan, 2021 SCC 25, R. v. Ottawa Citizen Group Inc., (2005) 75 O.R. (3d) 590 (C.A.), Toronto (City) v. C.U.P.E. Local 79, 2003 SCC 63, 402 Mulock Investments Inc. v. Wheelhouse Coatings Inc., 2022 ONCA 718, Currie v. Halton Regional Police Service Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.), Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141

Falsetto v. Falsetto, 2024 ONCA 149

Keywords: Property, Trusts, Presumption of Resulting Trust, Purchase Money Resulting Trusts, Gifts, Planning Act, R.S.O. 1990, c. P.13, Pecore v. Pecore, 2007 SCC 17, Nishi v. Rascal Trucking Ltd., 2013 SCC 33, Lattimer v. Lattimer, (1978), 18 O.R. (2d) 375, Schwartz v. Schwartz, 2012 ONCA 239, Andrade v. Andrade, 2016 ONCA 368, Holtby v. Draper, 2017 ONCA 932

Vyazemskaya v. Safin, 2024 ONCA 156

Keywords: Family Law, Divorce, Spousal Support, Foreign Divorces, Recognition, Jurisdiction, Domicile, Real and Substantial Connection, Forum Shopping, Public Policy, Divorce Act, R.S.C., 1985, c. 3, (2nd Supp.), Family Law Act, R.S.O. 1990, c. F.3, D.B.S. v. S.R.G., 2006 SCC 37, Rothgiesser v. Rothgiesser, 46 O.R. (3d) 577 (C.A.), Virani v. Virani, 2006 BCCA 341, L.G.V. v. L.A.P., 2016 NBCA 23, Leonard v. Booker, 2007 NBCA 71, Armoyan v. Armoyan, 2013 NSCA 99, Okmyansky v. Okmyansky, 2007 ONCA 427, Cheng v. Liu, 2017 ONCA 104, Wilson v. Kovalev, 2016 ONSC 163, Beals v. Saldanha, 2003 SCC 72, Indyka v. Indyka, [1969] 1 A.C. 33 (U.K.H.L.), Powell v. Cockburn, [1977] 2 S.C.R. 218, Holub v. Holub (1976), 71 D.L.R. (3d) 698 (Man. C.A.), Orabi v. Qaoud, 2005 NSCA 28, R.S. v. P.R., 2019 SCC 49, Abraham v. Gallo, 2022 ONCA 874, R.N.S. v. K.S., 2013 BCCA 406, Yan v. Xu, 2023 ONSC 1288, Zhang v. Lin, 2010 ABQB 420, Marzara v. Marzara, 2011 BCSC 408

Sonia v. Ratan , 2024 ONCA 152

Keywords:  Family Law, Divorce, Spousal Support, Property, Equalization of Net Family Property, Jurisdiction, Foreign Divorces, Enforcement, Civil Procedure, Orders, Setting Aside, Fraud, Costs, Bad Faith, Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.), s.22, Family Law Act, R.S.O. 1990, c. F.3., s.7(3), 22(3), Family Law Rules, O. Reg. 114/99, r.25(1), Rules of Civil Procedure, r.59.06(2)(a), Abraham v. Gallo, 2022 ONCA 874, Rothgiesser v. Rothgiesser (2000), 46 O.R. (3d) 577 (Ont. C.A.), Okmyansky v. Okmyansky, 2007 ONCA 427, Cheng v. Liu, 2017 ONCA 104, Syed Ali Nawaz Gardezi v. Lt. Col. Muhamad Yusuf (1963), 15 D.L.R. 9 (Supreme Court of Pakistan), Novikova v. Lyzo, 2019 ONCA 821, Qaoud v. Orabi, 2005 NSCA 28, Beals v. Saldanha, 2003 SCC 72, Saleh v. Tawoosi, 2016 ONSC 540, Wilson v. Kovalev, 2016 ONSC 163, Kadri v. Kadri, 2015 ONSC 321, Danylkiw v. Danylkiw (2003), 37 R.F.L. (5th) 43 (Ont. S.C.), Virc v. Blair, 2014 ONCA 392, Amin v. Canada (Minister of Citizenship and Immigration), 2008 FC 168, Chaudhary v. Chaudhary, [1984] 2 All. E.R. 1017 (C.A.), Quazi v. Quazi, [1980] A.C. 744 (H.L.), Saleem v. Canada (Citizenship and Immigration), 2010 CanLII 87618 (IRB App. Div.), Butt v. Canada (Citizenship and Immigration), 2010 CanLII 78765 (IRB App. Div.), Tiraei v. Canada (Citizenship and Immigration), 2009 CanLII 78323 (IRB App. Div.), Nanji v. Canada (Citizenship and Immigration), 2022 FC 1306, Khaleque v. Canada (Citizenship and Immigration), 2012 CanLII 101473 (IRB App. Div.)

Ihnatowych Estate v. Ihnatowych, 2024 ONCA 142

Keywords: Wills and Estates, Wills, Interpretation, Equitable Remedies, Rectification, Re Estate of Blanca Esther Robinson, 2010 ONSC 3484, The Bank of Nova Scotia Trust Company v. Haugrud, 2016 ONSC 8150, Daradick v. McKeand Estate, 2012 ONSC 5622, Hofman v. Lougheed et al., 2023 ONSC 3437, Canada (A.G.) v. Fairmont Hotels Inc, 2016 SCC 56, Johnson v. Johnson, 2022 ONCA 682, Gironda v. Gironda, 2013 ONSC 4133, Spence v. BMO Trust Co., 2016 ONCA 196, Lipson v. Lipson (2009), 52 E.T.R. (3d) 44 (Ont. S.C.)

Castillo v. Xela Enterprises Ltd., 2024 ONCA 141

Keywords: Civil Procedure, Orders, Enforcement, Equitable Receivers, Contempt, Costs, Rules of Civil Procedure, r. 60.11, Libman v. The Queen, [1985] 2 S.C.R. 178, Canada (Human Rights Commission) v. Canada Liberty Net, [1998] 1 S.C.R. 626, R. v. Greco (2001), 159 C.C.C. (3d) 146 (Ont. C.A.), leave to appeal refused, [2001] S.C.C.A. No. 656., R. v. Barra, 2021 ONCA 568, R. v. Zingre, [1981] 2 S.C.R. 392, Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, Tolofson v. Jensen, [1994] 3 S.C.R. 1022, Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663, Boily v. Carleton Condominium Corporation 145, 2014 ONCA 574, Echostar Communications Corp v. Rodgers, 2010 ONSC 2164, Sussex v. 3933938, 2003 CanLII 49336 (Ont. Sup. Ct.), Manis v. Manis (2001), 55 O.R. (3d) 758 (Ont. C.A.)

Steinberg v. Adderley, 2024 ONCA 167

Keywords: Contracts, Debtor-Creditor, Litigation Funding Agreements, Defences, Unconscionability, Unconscionable Transactions Relief Act, R.S.O. 1990, c. U.2, Uber Technologies Inc. v. Heller, 2020 SCC 16, Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75

Markham (City) v. Ross, 2024 ONCA 161

Keywords: Contracts, Easement Agreements, Municipal Law, By-Law Enforcement, Heritage Buildings, Ontario Heritage Act, R.S.O. 1990, c. O.18, Provincial Offences Act, R.S.O. 1990, c. P.33, Building Code Act, 1992, S.O. 1992, c. 23, Fire Code and Fire Protection and Prevention Act, 1997, S.O. 1997, c. 4, Marshall v. Bernard Place Corp. (2002), 58 O.R. (3d) 97 (C.A.)

Abaxx Technologies Inc. v. Pasig and Hudson Private Limited, 2024 ONCA 164

Keywords: Breach of Contract, Breach of Duty of Good Faith and Fair Dealing, Breach of Fiduciary Duty, Conspiracy, Breach of Confidence, Fraud, Jurisdiction, Real and Substantial Connection, Club Resorts Ltd. v. Van Breda, 2012 SCC 17, Ontario (Attorney General) v. Rothmans Inc., 2013 ONCA 353, British American Tobacco P.L.C. v. Ontario, [2013] S.C.C.A. No. 327, Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, Truscott v. Co-Operators, 2023 ONCA 267

Penate v. Martoglio , 2024 ONCA 166

Keywords: Torts, Negligence, MedMal, Civil Procedure, Jury Trials, Discharge of Jury, Procedural and Natural Justice, Sufficiency of Reasons for Decision, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 108, OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2019 ONSC 3882, King v. Colonial Homes Ltd., [1956] S.C.R. 528, Kempf v. Nguyen, 2015 ONCA 114, R. v. Chouhan, 2021 SCC 26, Hunt (Guardian of) v. Sutton Group Incentive Realty Inc. (2002), 60 O.R. (3d) 665 (C.A.), St. Marthe v. O’Connor, 2021 ONCA 790, Vanderbeke v O’Connor, 2013 ONCA 665, Hamstra (Guardian ad litem of) v. British Columbia Rugby Union, [1997] 1 S.C.R. 1092, Landolfi v. Fargione (2006), 79 O.R. (3d) 767 (C.A.), Brochu v. Pond (2002), 62 O.R. (3d) 722 (C.A.), Groen v. Harris, 2010 ONCA 621, Placzek v. Green, 2012 ONCA 45, Lawson v. Lawson (2006), 81 O.R. (3d) 321 (C.A.), R. v. Sheppard, 2002 SCC 26, R. v. G.F., 2021 SCC 20, Bruno v. Dacosta, 2020 ONCA 602, Canadian Broadcasting Corporation Pension Plan v. BF Realty Holdings (2002), 214 D.L.R. (4th) 121 (Ont. C.A.), R. v. R.E.M., 2008 SCC 51, R. v. Sahdev, 2017 ONCA 900, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, R. v. Dinardo, 2008 SCC 24, Ghiassi v. Singh, 2017 ONSC 6541

Short Civil Decisions

Yan v. Hutchinson ,2024 ONCA 158

Keywords: Costs

One Clarendon Inc. v. Finlay , , 2024 ONCA 153

Keywords: Real Property, Residential Tenancies, Rent, Arrears, Civil Procedure, Costs

Bouragba v. Conseil des écoles publiques de l’Est de l’Ontario, 2024 ONCA 140

Keywords: Civil Procedure, Amending Pleadings, Appeals, Perfection, Vexatious Litigation, Rules of Civil Procedure, R 2.1.01, 61.06, 61.13

Molani Estate v. Iran , 2024 ONCA 163

Keywords: Costs

Geng v. Cao, 2024 ONCA 169

Keywords: Family Law, Civil Procedure, Summary Judgment, Fresh Evidence, Palmer v The Queen, [1980] 1 SCR 759


CIVIL DECISIONS

Storoszko & Associates v. 1489767 Ontario Limited, 2024 ONCA 147

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

Counsel:

R.B. Macdonald, for the respondent/moving party

B. Salsberg, for the appellant/responding party

Keywords: Bankruptcy and Insolvency, Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory, Orders, Variation, Abuse of Process, Courts of Justice Act, R.S.O. 1990, c. C.43, s 19, Rules of Civil Procedure, r. 59.06, Gallen v. Sutherland, 2023 ONCA 170, Elguindy v. Elguindy, 2021 ONCA 768, Mountain View v. McQueen, 2014 ONCA 194, R. v. Cunningham, 2010 SCC 10, Marché D’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, R. v. Church of Scientology (1986), 1986 CanLII 4633 (C.A.), R. v. 974649 Ontario Inc., 2001 SCC 81

facts:

On June 24, 2018, Trimble J. granted default judgment in this mortgage action in favour of Storoszko & Associates (“Storoszko”), which then sought to petition DH into bankruptcy. DH moved to vary the judgment on April 26, 2021. Trimble J. made an order dismissing the motion to vary, which DH appealed.

Sitting as a bankruptcy court judge on a 9:30 a.m. appointment on May 3, 2021, Patillo J. had given this direction: “Adjourned to a date to be set by counsel for scheduling following completion of a motion that is set to be heard in Brampton on June 22/21.” The motion Patillo J. was referring to was brought almost three years after DH was initially noted in default and led to the order under appeal. The motion judge found that DH provided no explanation for this lengthy delay and dismissed the motion in part on that basis.

issues:
  1. Should the appeal be quashed on jurisdictional grounds?
  2. Should the appeal be summarily dismissed as an abuse of process?
holding:

Motion and appeal dismissed.

reasoning:
  1. No.

The moving party argued that the Court lacked jurisdiction to hear DH’s appeal because the order under appeal was interlocutory: Gallen at para 5. If the order was interlocutory, then any appeal was to the Divisional Court with leave of that court under s. 19 of the Courts of Justice Act.

While the motion judge mistakenly referred to r. 19.02 in his reasons, his analysis in substance reflected the proper approach under r. 19.08. The factors the motion judge listed and applied were the factors that the Court has set out for the determination of whether a default judgment should be set aside or varied under r. 19.08.

The dismissal of a motion to vary a final judgment is axiomatically itself a final judgment. Therefore, the appeal lies to the Court of Appeal. The motion to quash was dismissed.

  1. Yes.

The Court noted that it will not permit its process to be used and abused as an instrument for prolonging a procedural morass. Although a statutory court, the Court has implicit powers that derive from its power to control its own process: R. v. Cunningham at para 19. The court’s powers extend to “all powers that are reasonably necessary to accomplish its mandate” or, stated differently, “the powers necessary to perform its intended functions”: R. v. 974649 Ontario Inc at para 70.

The Court rejected the argument that because the bankruptcy court sanctioned this process, it cannot be an abuse of process. DH sought to delay further by appealing Patillo J’s order instead of addressing the matter in bankruptcy court. The delay resulting from these machinations were considerable and did no credit to the civil justice system. Therefore, the Court dismissed the appeal summarily as an abuse of process.


Loblaw Companies Limited v. Royal & Sun Alliance Insurance Company of Canada, 2024 ONCA 145

[Pepall, Trotter and Nordheimer JJ.A.]

Counsel:

M. M. O’Donnell and C. L. Foster, for the appellant Royal & Sun Alliance Insurance Company of Canada

N. Bombier, S. Lewis and M. Galloway, for the appellant AIG Insurance Company Canada

A. L. W. D’Silva and G. Zacher, for the appellant Aviva Insurance Company of Canada

J. P. Thomson, for the appellant Liberty Mutual Insurance Company

J. Macdonald, for the appellant Zurich Insurance Company Ltd.

J. Nicholl, H. Gray and J. Vizzaccaro, for the appellant Chubb Insurance Company of Canada

M. B. Snowden and A. D. Brijpaul, for the appellant Certain Underwriters at Lloyd’s as represented by their coverholder Markel Canada Limited

Dominic T. Clarke and Anthony H. Gatensby, for the appellant QBE Syndicate 1886 at Lloyd’s of London

L. G. Theall, J. A. Brown and D. J. Cox, for the respondents Loblaw Companies Limited, Shoppers Drug Mart Inc. and Sanis Health Inc.

Keywords: Contracts, Interpretation, Insurance, Coverage, Duty to Defend, Defence Costs, Apportionment, Deductibles, Self-insured Retentions, Representation by Solicitor, Conflicts of Interest, Remedies, Relief from Forfeiture, Civil Procedure, Class Proceedings, Competition Act, R.S.C. 1985, c. C-34, Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2, Civil Code of Québec, S.Q. 1991, c. 64, Quebec Charter of Human Rights and Freedoms, R.S.Q., c. C-12, Hanis v. Teevan, 2008 ONCA 678, Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, Markham (City) v. AIG Insurance Company of Canada, 2020 ONCA 239, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Goodyear Canada Inc. v. American International Companies, 2013 ONCA 395, Lombard General Insurance Company of Canada v. 328354 B.C. Ltd., 2012 BCSC 431, St. Paul Fire & Marine Insurance Co. v. Durabla Canada Ltd. (1996), 29 O.R. (3d) 737 (C.A.), Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, AIG Insurance Company of Canada v. Lloyd’s Underwriters, 2022 ONCA 699, Housen v. Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, International Radiography and Inspection Services (1976) Ltd. v. General Accident Assurance Company of Canada (1996), 47 Alta. L.R. (3d) 137 (C.A.), Hanis v. University of Western Ontario (2005), 32 C.C.L.I. (4th) 255 (O.N.S.C.), Derksen v. 539938 Ontario Limited, 2001 SCC 72, Surrey (District) v. General Accident Assurance Co. of Canada (1996), 19 B.C.L.R (3d) 186 (C.A.), Stonewall Insurance Co. v. Asbestos Claims Management Corp., 73 F. (3d) 1178 (2d Cir. 1995), General Electric Canada Co. v. Aviva Canada Inc., 2010 ONSC 6806, David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Co. (2005), 76 O.R. (3d) 161 (C.A.), Ontario v. St. Paul Fire and Marine Insurance Co., 2023 ONCA 173, Monk v. Farmers’ Mutual Insurance Company (Lindsay), 2019 ONCA 616, Kozel v. Personal Insurance Co., 2014 ONCA 130, Lloyd’s Underwriters v. Blue Mountain Log Sales Ltd., 2016 BCCA 352, GFL Infrastructure Group v. Temple Insurance Company, 2022 ONCA 390, Sovereign General Insurance Co. v. Walker, 2011 ONCA 597, Brockton (Municipality) v. Frank Cowan Co. (2002), 57 O.R. (3d) 447 (C.A), Zurich of Canada v. Renaud & Jacob, [1996] R.J.Q. 2160 (C.A.), Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363, Canadian Indemnity v. Canadian Johns-Manville Co., [1990] 2 S.C.R. 549, Canadian Newspapers Co. v. Kansa General Insurance Co. (1996), 30 O.R. (3d) 257 (C.A.), Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47, Parlee v. Pembridge Insurance Co., 2005 NBCA 49, San Diego Federal Credit Union v. Cumis Ins. Society Inc.,162 Cal. App. 3d 358 (1984), Foremost Ins. Co. v. Wilks, 206 Cal. App. 3d 252 (1988), Glassford v. TD Home and Auto Insurance Company (2009), 94 O.R. (3d) 630 (S.C.), Trenton Cold Storage Ltd. v. St. Paul Fire and Marine Insurance Co. (2001), 146 O.A.C. 348, Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53, Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52, General Accident Assurance Company et al. v. Chrusz et al. (1999), 45 O.R. (3d) 321 (C.A.), Fellowes, McNeil v. Kansa General International Insurance Co. (2000), 138 O.A.C. 28

facts:

The respondent, Loblaw Companies Limited (“Loblaw”), is a Canadian grocery retailer that operated pharmacies across Canada. The respondent, Shoppers Drug Mart Inc. (“SDM”), was primarily a Canadian franchisor for retail pharmacies. SDM was acquired by Loblaw in 2014. The respondent, Sanis Health Inc. (“Sanis”), manufactured generic drugs including two drugs classified as opioids. Sanis was a wholly-owned subsidiary of SDM since 2009. The three respondents were variously facing five class actions in various provinces that related to the manufacture, distribution, and sale of opioid drugs in Canada beginning in 1996 (the “Class Actions”).

The appellants, Royal & Sun Alliance Insurance Company of Canada (“RSA”), AIG Insurance Company of Canada (“AIG”), Aviva Insurance Company of Canada (“Aviva”), Liberty Mutual Insurance Company (“Liberty”), and Zurich Insurance Company Ltd. (“Zurich”) (collectively, the “Primary Insurers”), issued primary Commercial/Comprehensive General Liability (“CGL”) policies to the respondents during the class periods. Each of the Primary Insurers also issued excess liability policies to one or more of the respondents from time to time. The appellants, Chubb Insurance Company of Canada (“Chubb”), Certain Underwriters at Lloyd’s as represented by their coverholder Markel Canada Limited (“Markel”), and QBE Syndicate 1886 at Lloyd’s of London (“QBE”), are excess insurers of the respondents (collectively, the “Excess Insurers”).

The respondents brought applications seeking declarations that each of the Primary Insurers had a duty to defend the Class Actions under their insurance policies. The respondents also sought a declaration that each respondent was entitled to select any single policy under which there was a duty to defend and require the selected insurer to defend all the claims against it.

The Class Actions claim billions of dollars in damages from all or some of the respondents. The class periods span over 20 years, beginning in 1996 when Purdue Pharma began selling the opioid “OxyContin”. The five Primary Insurers issued primary CGL policies that covered one or more of the respondents for varying time periods. The primary policies generally provided coverage for the respondents’ legal liability to pay damages arising from “bodily injury” sustained as a result of an “occurrence” happening “during the policy period”, or words to that effect. Except for the two policies issued by Zurich for the 1998-2001 and 2001- 2003 periods, each primary policy contains an express duty to defend any claim for bodily injury against the insured.

AIG issued a primary CGL policy to Loblaw for the period July 1, 1995 to May 1, 1997, and RSA issued a primary CGL policy to Loblaw for the period May 1, 1997 to January 1, 1998. AIG’s primary policy provided that Loblaw was to give notice of an accident, occurrence, claim, or suit to the insurers “as soon as practicable.” RSA’s policy required notice of an accident or occurrence “as soon as practicable” and notice of a claim or suit “immediately”. AIG also issued excess umbrella liability policies to SDM for the years 1998 to 2000 and RSA issued excess liability policies to Loblaw for the years 1997 and 1998.

The respondents gave notice of the claims to the appellants, asked each of the Primary Insurers to defend the litigation, and retained a law firm to defend them in the Class Actions. Certain of the Primary Insurers’ policies contain varying self-insured retentions (“SIRs”) or deductibles that must be satisfied before the insurer will assume responsibility for defence costs. Loblaw sought payment of its pre-tender defence costs from AIG and RSA but they refused to pay.

Each of the Primary Insurers issued excess liability policies to one or more of the respondents from time to time. Most of the Excess Insurers, including QBE, specifically reserved the right to deny coverage based on policy exclusions including intentional conduct. On July 14, 2020, counsel for the respondents wrote to the appellants, noting that several of the insurers had reserved their rights to later deny coverage based on certain exclusions, including intentional act exclusions. The respondents proposed a Defence Reporting Agreement (“DRA”) for each of their insurers, both primary and excess. The DRA was stated to allow the parties to work openly and cooperatively on the defence of the claims, which included the sharing of Privileged Defence Information relating to the defence of the claims.

issues:
  1. Did the application judge err in their decision regarding payment of defence costs?
  2. Did the application judge err in their treatment of the self-insured retentions and deductibles?
  3. Did the application judge err in concluding that Loblaw was entitled to relief from forfeiture for pre-tender defence costs from AIG and RSA?
  4. Did the Application Judge err in finding a reasonable apprehension of a conflict of interest that required the insurers to enter into the DRA in order to associate and to obtain Privileged Defence Information and in holding that the Non-DRA Insurers’ internal ethical screens were insufficient?
  5. Did the application judge err in refusing RSA’s request for a declaration that Loblaw be separately represented by independent counsel?
holding:

Appeals allowed in part.

reasoning:
  1. Yes.

The Court noted that the challenge presented by these appeals was what to do with the cost of defending claims that involve allegations of continuous or progressive injury that span many years (long-tail claims) where there are insurance policies with different risks.

The policies provided for a time-limited bargain

First, the judgment of the application judge failed to give effect to the express language of the parties’ bargain. The proposed pro rata time-on-risk allocation accorded with the contractual time-limited duty to defend which the respondents and the Primary Insurers had agreed to. The relationship between an insurer and its insured is contractual in nature. An inquiry into the nature and scope of the duties an insurer owes to its insured starts with the insurance policy that governs them: Hanis, at para. 22. When interpreting contracts of insurance, the court should give effect to clear language, reading the contract as a whole and applying general rules of contractual construction to resolve any ambiguities: Progressive Homes Ltd at paras 21-24. The application judge ignored the language found in the policies of each of the Primary Insurers that qualified the duty to defend and linked it to the insurance provided by the policy. The indemnity coverage provided by the Primary Insurers was for the policy period that is in each case described in the declarations that form part of the policies. The policies were all limited to coverage “during the policy period” and the duty to defend in each case was qualified by the words “with respect to such insurance as is afforded by the policy” (or equivalent language). This language clearly linked the duty to defend to the coverage for which the parties bargained. Consistent with the bargain made, the respondents managed their insurance coverage on the basis of successive coverage.

The Primary Insurers were not “concurrent” insurers

Where an insured holds more than one policy of insurance that covers the same risk, the insured is entitled to select the policy under which to claim indemnity, subject to any conditions to the contrary: Family Insurance at para 14. The selected insurer is then entitled to contribution from all other insurers who have covered the same risk. The application judge erred in concluding that the insurers were concurrent insurers. The Primary Insurers insured discreet risks in successive time periods. They had not agreed to indemnify for risks falling outside those time periods and therefore had no duty to defend claims arising entirely from them. To require the Primary Insurers to defend claims outside of their policy periods was inconsistent with the parties’ bargains. Accordingly, in the absence of concurrent obligations, the application judge further erred in concluding that the selected insurer could then seek equitable contribution from the other insurers.

Hanis was not applicable to situations involving multiple policy periods

Third, it was an error to apply the principles from Hanis, which focussed on mixed claims giving rise to multiple theories of liability, to a situation involving multiple policy periods. The application judge permitted the selected insurer to seek apportionment of the defence costs at the end of the proceeding and also to seek contribution from the insurers whom she said had a concurrent obligation to defend. Seeking apportionment at the end of the proceeding required the selected insurer to fund both lengthy and costly proceedings. The application judge’s disposition placed a disproportionate and unreasonable burden on the selected insurers. The application judge’s reliance on equitable contribution placed the burden of collecting contributions from other insurers on risk on the selected insurer.

The application judge did not meaningfully analyze the pleadings

To determine if a duty to defend has been triggered, the insurance policy and the claims in the pleadings are to be examined to ascertain whether there is a possibility of the claims falling within the insurance coverage: Progressive Homes, at paras. 6, 19-20. Where it is clear that a claim does not fall within the original grant of coverage or is excluded, there is no duty to defend: Nichols at p. 810.

The Class Action claims were outside the time parameters of at least some of the policies targeted. There was no single policy that could possibly be called upon to indemnify the respondents in full for the claims given the evolving nature of the claims and the time-limited nature of the coverage provided. The consecutive nature of the insurance policies rendered a time-on-risk allocation a simple exercise at a preliminary stage in these proceedings. The time periods in the policies were readily identifiable. A time-on-risk allocation fit with the temporal nature of the allegations asserted against the respondents.

An “all sums” approach was erroneously applied

Under the “all-sums approach” to liability allocation, a single insurer could be required to pay the entire amount of an asbestos injury claim, notwithstanding that multiple policy periods are triggered by the applicable claim. Canadian courts have tended to prefer the pro rata approach to allocating liability as opposed to the “all-sums approach”: Goodyear at paras. 17-18 and 21. The Court noted that “all sums” does not apply to both indemnification and defence costs in Canada.

Defence costs were not a peril in the nature of an insured risk

The concept of “risk” involves two variables: the object of the insurance and the insured peril. The insured object is the person or thing covered by the insurance while the insured peril is the unanticipated occurrence that causes the loss, or the danger that has materialized. The Court established that defence costs are not a danger or peril in the nature of an insured risk. The relevant peril for which the respondents sought insurance under most of the primary policies was their unintentional infliction of “bodily injury”. That was the harm that was causing the respondents to incur losses. Defence costs were a consequence of that peril, not the peril itself.

The courts should limit conflicts of interest

The Court stated that it made no sense for an insurer with minimal exposure to be tasked with controlling the defence and the defence costs. The participation of all insurers at an early stage was conducive to the conduct of the best defence possible and also serves to promote settlement.

  1. Yes.

Exhausting the SIRs

The Court noted that SIR provisions were often drafted to give a sophisticated, commercial insured a degree of control typically absent in deductible clauses. The respondents were clearly experienced and sophisticated users of commercial insurance products and in many instances opted to negotiate policies with significant SIRs with attendant reductions in premium payments. This was the degree of exposure they chose to adopt, and they adopted it multiple times with respect to several discreet time periods under policies with many different insurers. In short, they had agreed to pay new and additional SIRs/deductibles for each period. Given that the respondents looked to each policy for coverage for separate policy periods, it follows that the SIR obligation in each policy must have been satisfied before that insurer had a duty to defend. The duty to bear the costs of the defence was only engaged when the SIR has been exhausted: Ontario at para 54. Until then, the payment obligation remained with the insured.

Application Judge’s Order on Exhausting SIRs Through Payment by Other Insurers is Inapplicable

The significance of this issue flowed from the application judge’s determination that the respondents could each select one policy to defend and payments made by the selected insurer could be used to reduce the SIRs on other policies. An SIR depends on the legal obligations to pay, among other things, defence costs. The language of the policies in issue on SIR obligations differed.

Unquestionably an SIR must be paid before an insurer has an obligation to defend. However, as a pro rata time-on-risk formula was applicable, the issue of payment by another insurer disappeared. This was because the pro rata time-on-risk formula applied to the exhaustion of the SIRs.

Adjusting Equitable Allocation Among Insurers

The Court noted that each Primary Insurer agreed to cover a portion of the defence costs of the Class Actions. Within each policy period, the insured was responsible for defence costs up to the exhaustion of the SIR, but that had not affected the proportion of time for which other insurers were responsible. Until the judge on the trial of an issue determined whether the SIRs relating to the Liberty, AIG, and RSA policies have been satisfied, or until a further court order, it was incumbent on the respective respondents to pay the percentages of legal fees allocated to those policies based on the time-on-risk formula. After that point, the insurers were responsible for the proportion of defence costs equivalent to their time-on-risk.

  1. Yes.

Pre-tender defence costs are defence costs incurred by an insured prior to providing notice of a claim to its insurer, in this case AIG and RSA. An insurer also has the right to control the defence of an insured claim and this includes the right to appoint defence counsel: Brockton at para 31. The right to control the defence and to appoint defence counsel flows from the insurer’s obligation to indemnify: Zurich of Canada at p.2168. Given that the insurer controls the defence and appoints counsel, it follows that the insurer is also required to pay for all reasonable costs that have been incurred at the insurer’s request: Brockton, at para. 54. Although independent from the notice provision, the voluntary payments provision complemented the notice provision.

Relief from forfeiture refers to the power of a court to protect a person against the loss of an interest or a right because of a failure to perform a covenant or condition in an agreement or contract: Kozel, at para. 28. It is an equitable and discretionary remedy. Relief from forfeiture is granted sparingly and the party seeking the relief bears the onus of proof: Ontario (Attorney General) at para 87. In Ontario, relief from forfeiture is governed by s. 98 of the Courts of Justice Act and in the insurance context also by s. 129 of the Insurance Act. The Court noted that for the purposes of this appeal, any distinction between s. 98 of the CJA and s. 129 of the Insurance Act was immaterial.

The purpose of allowing relief from forfeiture in insurance cases is to prevent hardship to beneficiaries where there has been a failure to comply with a condition for receipt of insurance proceeds, and where leniency in respect of strict compliance with the condition will not result in prejudice to the insurer: Falk Bros. Industries Ltd at p. 783.

The Court noted that the duty to defend arises on demand or notice. Otherwise, the insurer may have no knowledge of the claim it is obligated to defend or opportunity to exercise its contractual rights respecting this defence or other policy conditions and exclusions.

On receipt of notice, AIG had not rejected the contract. Rather, it reserved its rights and stated that liability did not attach until the SIR had been exhausted as provided for in the policy. It also sought copies of pleadings on an ongoing basis and an update on settlement discussions. These steps amounted to an acceptance of the contract. Here, AIG was actively seeking to enforce its contract, including the independent voluntary payment, SIR, and exclusion provisions. This situation was different from those where an insurer on receiving late notice rejected the contract and refused to defend and to pay pre-tender costs.

Where the insurer has acknowledged its duty to defend and indemnify going forward subject to exhaustion of its SIR, there is nothing left to relieve against. Moreover, the voluntary payments clause, which operated as an independent commitment, simply reflected the parties’ contract. There was no forfeiture and relief from forfeiture was therefore not engaged.

  1. No.

The respondents sought a declaration that only those insurers who signed the DRA be entitled to associate in the defence of the Class Actions and receive defence-side reporting.

Reasonable apprehension of conflict

Defence counsel’s primary responsibility is to represent the insured and act in its best interest in any liability action: Parlee at para 17. The right to control the defence is not absolute and the insurer may be required to surrender that control: Brockton at para 43.

The mere fact that an insurer has reserved its rights on coverage does not cause the insurer to lose its right to control the defence and appoint counsel. The question is whether the circumstances of the case create a reasonable apprehension of conflict of interest if that counsel were to act for both the insurer and the insured in defending the action: Brockton, at paras. 39-40, 43. Ontario courts have found that where an insurer denied a duty to defend or reserved rights on coverage exceptions at issue in the litigation (e.g., intentional act exclusions), the insured was entitled to appoint independent counsel: see e.g., Glassford at paras 26-31.

The right to associate allows an insurer to manage its exposure by giving the insurer the opportunity to exercise a voice in the defence of the legal action. The right to associate is not the right to direct the defence of the action. It is the right to be heard in the course of the defence and to obtain information reasonably necessary to be heard.

As to the issue of a reasonable apprehension of a coverage conflict, all Non-DRA Insurers reserved their rights with respect to intentional conduct with the exception of Chubb, which provided a “full” reservation of rights. It will be rare that an early general reservation of rights that is almost standard form gives rise to a reasonable apprehension of conflict. However, here, the reservations were specific to intentional conduct and the pleading of intentional conduct in the Class Actions was pervasive in the opinion of the Court.

Without an effective ethical screen that silos Privileged Defence Information from the Non-DRA Insurers’ coverage teams, the insurers’ input and advice could be tailored to align with the coverage position that the insureds engaged in intentional conduct thereby eliminating the Excess Insurers’ indemnity obligation. In the face of a reservation of rights on intentional conduct in the context of a right to associate, defence counsel was put in the position of having conflicting mandates if they had to disclose Privileged Defence Information contrary to the interests of the insured. Put differently, the Non-DRA appellants had not established that the application judge erred in her findings that a reasonable apprehension of conflict existed in the circumstances. None of the non-DRA insurers were entitled to privileged coverage information (privileged information as between the respondents and their separate coverage counsel).

When the interests of the insured and the insurer are aligned, common interest privilege protects against production of privileged information to third parties. Neither QBE nor Chubb were required to enter into the DRA, as they did not seek to associate. This conclusion was premised on the basis of no future exercise by Chubb of its right to associate.

The necessary measures that courts may impose when a reasonable apprehension of conflict exists should be viewed on a continuum, ranging from the insured’s right to independent counsel paid by the insurer to some form of split-file protocol. As the application judge correctly observed, the adequacy of the measures must be tailored to the circumstances of the case.

In this case, should the Class Actions be successful, there was a clear risk that the excess layers of insurance could have been pierced. While an ethical screen limited to handlers at the lower level may have been appropriate with respect to smaller claims, in cases such as these billion-dollar Class Actions, handlers at the lower level may not have sufficient decision-making authority and may be required to consult individuals higher in the corporate decision-making pyramid. Accordingly, in the context of their appeals, a split-file protocol that reached farther up that pyramid was justified. In the view of the Court, the DRA proposed by the respondents was a reasonable response to address the unique challenges presented by these Class Actions.

  1. No.

RSA was not directing the Loblaw defence and it is not for it to impose its position on the insurers who are. Second, there is currently no evidence of any conflict between Loblaw, Sanis, and SDM. That said, this determination does not preclude a conflict arising in the future. If it should arise, the issue could be addressed on a proper evidentiary record.


Fletcher v. Ontario, 2024 ONCA 148

[Pepall, Lauwers and Harvison Young JJ.A.]

Counsel:

R. S. Maurice, R. M. Lake, L. Schaan, and W. B. Henderson, for the appellants

M. Fancy, Richard Ogden, and Catherine Ma, for the respondent His Majesty the King in Right of Ontario

J. Brooks, C. Fiske, M. Torrie, and M. Khan, for the respondent Attorney General of Canada

Keywords: Aboriginal Law, Honour of Crown, Treaty Rights, Treaty No. 9, Interpretation, Standard of Review, Civil Procedure, Sealing Orders, Settlements, Enforcement, Appeals, Abuse of Process, Indian Act, R.S.C. 1985, c I-5, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R. v. Marshall, [1999] 3 S.C.R. 456, Lac La Ronge Indian Band v. Canada, 2001 SKCA 109, Restoule v. Canada (Attorney General), 2021 ONCA 779, R. v. Marshall, [1999] 3 S.C.R. 456, Ross River Dena Council Band v. Canada, 2002 SCC 54, Ermineskin Indian Band and Nation v. Canada, 2009 SCC 9, Halfway River First Nation v. British Columbia, 1999 BCCA 470, West Moberly First Nations v. British Columbia, 2020 BCCA 138, Caron v. Alberta, 2015 SCC 56, R. v. Sioui, [1990] 1 S.C.R 1025, Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, R. v. Bernard, 2005 SCC 43, R. v. Badger, [1996] 1 S.C.R. 771, R. v. Taylor and Williams (1982), 34 O.R. (2d) 360 (C.A.), Whiteduck v. Ontario, 2023 ONCA 543, Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, Mikisew Cree First Nation v. Canada (Governor General in Council), 2018 SCC 40, Palmer v. The Queen, [1980] 1 S.C.R. 759, Catholic Children’s Aid Society of Metropolitan Toronto v. M. (C.), [1994] 2 S.C.R. 165, Sherman Estate v. Donovan, 2021 SCC 25, R. v. Ottawa Citizen Group Inc., (2005) 75 O.R. (3d) 590 (C.A.), Toronto (City) v. C.U.P.E. Local 79, 2003 SCC 63, 402 Mulock Investments Inc. v. Wheelhouse Coatings Inc., 2022 ONCA 718, Currie v. Halton Regional Police Service Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.), Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141

facts:

The issue on appeal relates to Treaty No. 9 (the “Treaty”). According to the Treaty, which the appellants, the Missanabie Cree First Nation (the “Missanabie Cree” or “MCFN”), entered into in 1906, the MCFN became entitled to reserve lands the size of which was to be calculated based on a formula not exceeding one square mile for each family of five. Although MCFN members at Missanabie received Treaty annuities and adhered to the Treaty as of 1906, no reserve was allocated at that point for reasons that are not clear from the historical record.

The trial judge relied on a two-step inquiry. At step one, the trial judge found that the reserve clause of Treaty No. 9 showed a common intention that the size of the reserve would be determined as at the time of Treaty, not subsequently. At step two, the trial judge considered the question, does the historical and cultural backdrop suggest any latent ambiguity or alternative interpretation? The trial judge began this second phase of his analysis by noting that it continues the search for an understanding of the parties’ common intention. Noting that the principal concern expressed by the First Nations representatives was the assurance that they would be able to hunt and fish as they had in the past, the trial judge found this assurance was given.

issues:

Issues on appeal

  1. Did the trial judge misdirect himself by asking the wrong question in relation to the crystallization date?
  2. Did the trial judge err in finding that there was a common intention that the population be enumerated in 1906?
  3. Did the trial judge err in failing to find that the actions of the Treaty Commissioners and the subsequent conduct of Crown officials breached the honour of the Crown?

Ancillary issues

  1. Should the Agreement be admitted as fresh evidence?
  2. If admitted, should the Agreement be sealed?
  3. Is continuing the appeal as against Canada an abuse of process in light of the Agreement?
holding:

Appeal dismissed.

reasoning:

Issues on appeal

  1. No.

The appellants submitted that the trial judge misdirected himself by asking “when did, or will, the right to a reserve crystallize?” rather than answering the question in the Sproat Order: “As of what point in time (the “Crystallization Date”) should the population of the Missanabie Cree be determined for the purposes of applying the reserve entitlement formula stipulated by Treaty 9?” This mistake in law, the appellants argued, led the trial judge to assume that the right to a treaty reserve (in this case, arising in 1906) was the same date as the crystallization date for the purpose of enumerating the population.

The respondents submitted that the trial judge neither conflated the crystallization date with the date that the right to a reserve arose, nor wrongly instructed himself as to the question in Master Sproat’s order. The entirety of the trial judge’s decision was focused on the question of determining the date to calculate the size of the reserve land entitlement based on the population of the MCFN.

The Court noted that the trial judge correctly asked the threshold question. The trial judge understood that all parties recognized that the MCFN was entitled to a reserve as of 1906, but that the question of when to count the population for purposes of applying the reserve entitlement formula was outstanding. The trial judge was correct not to apply the formulas used in Ross River or Lac La Ronge to the reserve clause in Treaty No. 9, and instead to interpret Treaty No. 9 to answer the question of when the population of the MCFN should be determined for the purposes of applying the reserve entitlement formula.

The Court held that Ross River was not applicable in this case. In that case, the Supreme Court looked to other indicia to see if there was a common intention to create a reserve and the majority found there was none. The Court was also of the view that the trial judge correctly distinguished Lac La Ronge from this case. The trial judge distinguished Lac La Ronge on the basis of the difference between the reserve clause in Treaty No. 6, which was at issue in that case, and Treaty No. 9.

The Court was of the opinion that the trial judge read and interpreted the language of the reserve clause in Treaty No. 9 correctly: the location was to be arranged by the Commissioners, Chiefs and Headmen, and the boundaries thereof to be “hereafter surveyed and defined the said reserves when confirmed shall be held and administered by His Majesty for the benefit of the Indians…”. This implied a twostep process. The first step occurred when the right itself crystallized, i.e., when the Commissioners, Chiefs and Headmen met in 1905 and 1906. The second step occurred simply when the right was “confirmed” by survey, unlike in Lac La Ronge, where these two steps were combined into one.

  1. No.

The appellants argued that it was an error to find there was a common intention that the population be enumerated in 1906 given Treaty No. 9’s silence on the crystallization date. Moreover, they argued that there was little or no evidence to support the trial judge’s finding of common intention. The MCFN submitted that the absence of a common intention at the time of Treaty was supported by the fact that no reserve was provided at that time, and from the absence of any information or discussion about the provision of reserve land. The appellants argued that the only negotiation for Treaty No. 9 took place between Canada and Ontario. The MCFN further argued that the promise of a reserve was never even communicated or held out by the Treaty Commissioners. The appellants argued that it is an error of law to impute the same common intention to the Crown and the MCFN as that of other First Nations in 1906, given that other First Nations had reserve lands and areas identified for them at the time of Treaty, whereas the MCFN did not.

The Court held that treaty interpretation is a matter of law, reviewable on a correctness standard, while the factual findings underlying the conclusions about the content of a treaty are reviewable on a palpable and overriding error standard. The factual findings here were largely based on the parties’ joint evidence delivered through the joint expert report and as set out in the Agreed Statement of Facts. They remained largely uncontested on appeal. The trial judge’s interpretation was well-supported by the record before him and by the wording of the reserve clause. The Court saw no error, either of fact or of law.

The MCFN took the position that the crystallization date for the MCFN was 2011, when Canada set aside the reserve land. In effect, the appellants argued that there was no common intention to create a reserve for the MCFN in 1906, so 1906 cannot possibly be the crystallization date. The trial judge’s interpretation relied on a “myth” of common intention. The Court disagreed with this argument. Even though Treaty No. 9 did not contain wording to account for the situation at hand, the goal remained choosing among various possible interpretations of common intention at the time the Treaty was signed.

Turning to the facial meaning of the reserve clause, the trial judge found the date of signing or adhesion was the crystallization date; he thoroughly considered the record before him in reaching that conclusion and cited a number of undisputed factors, which, seen together, provide strong support for his conclusion. In examining the reserve clause, he noted that (unlike Lac La Ronge), it expressly provides the “Commissioners and the Chiefs and Headmen” were to determine the location of the reserves “…the same not to exceed in all one square mile for each family of five”. The trial judge noted the historians’ agreement that the clear intention was to have the locations of the reserves arranged by agreement at the time that the Commissioners met with the First Nations and that the only time that the Commissioners, the Chiefs and Headmen were to meet was at the point the Treaty was made. Since pay-lists had to be generated to pay the annuities to First Nations, these could also be used to calculate the square mileage of reserve size for agreement between the parties. The very purpose of the lists was to pay gratuities and size the reserves.

The trial judge found no evidence of any First Nations being treated or asking to be treated in a manner inconsistent with an understanding that their reserves were to be identified and calculated as of the date the Treaty was made.

The effect of the appellants’ argument was that the interpretation of the Treaty based on the common intention including the consideration of the intentions of other signatories to the Treaty is of no value in the absence of any clear intention expressed by the Crown or the Missanabie Cree to setting aside a reserve for the MCFN. The Court did not agree.

First, aside from the historical evidence reviewed above showing Crown intention to make treaty, a treaty will presumptively provide the necessary Crown intent. Second, the Court agreed with Chief Justice Bauman’s majority judgment in West Moberly, that in some cases, “the absence of Indigenous intention cannot prevent the dispute over it from being settled.” In that case, “[t]he trial judge did not fail to consider the intention of Indigenous parties to the Treaty.” In this case, the issue of whether there was an absence of intention from the Missanabie Cree in 1906 did not arise because the parties have agreed, as set out in the Sproat Order, that the MCFN has been a party to Treaty No. 9 since 1906 and, pursuant to the reserve clause of that Treaty, that a reserve should have been set aside for the benefit of the Missanabie Cree shortly after the making of the Treaty. The trial judge did not rely on a “myth” of common intention, but reasonably inferred common intention from the agreed facts that placed the Missanabie Cree in the same position as the other signatories to Treaty No. 9 in 1906. Third, the trial judge’s interpretation was consistent with the common intentions of the Crown and all the signatories to Treaty No. 9 in 1906. Courts have assumed the inquiry is into the intention of the signatories generally (not the claimants specifically), at the time the treaty was signed, even when considering how the treaty applies to later adherents. Only the clearest evidence of a specific claimant’s intention would find that the same treaty language has different meanings in respect of different signatories. In this case, there was no clear evidence of the MCFN’s intentions. Finally, the Crown’s failure to set aside a reserve in accordance with its obligations under the Treaty might result in a claim for damages or other remedies, but it did not change the date for the calculation of treaty entitlement. The breach of a treaty obligation does not change the nature or content of the treaty obligation.

  1. No.

The appellants submitted that the trial judge erred by not finding that the actions of the Treaty Commissioners and the subsequent conduct of Crown officials breached the honour of the Crown. The Court disagreed. The trial judge was alive to and considered the honour of the Crown correctly throughout his reasons in relation to the narrow question before him.

The appellants argued that there was “compelling evidence that the actions of the Crown in refusing to “make treaty” at Missanabie was intentional, at the very least willfully blind and at worst dishonest.” The respondents made a number of submissions in response. First, both Ontario and Canada submitted that the allegation of sharp dealing is a new issue on appeal and should not be permitted for that reason. Canada further submitted that the appellants’ broad arguments about the Crown and sharp dealing constitute an abuse of process because the legitimacy of adhesion and allegations made against federal agents post-treaty for failure to provide the MCFN a reserve are covered by Canada’s Settlement Agreement with the MCFN. Ontario’s central submission is that the trial judge did not err by failing to give due consideration to the Crown’s lack of diligence in fulfilling the reserve promise, or to evidence of alleged “sharp dealing” by the Treaty Commissioners, and makes three related points.

The principle that the honour of the Crown is always at stake in the Crown’s dealings is well-founded in case law. The honour of the Crown is to be presumed, and it “infuses” the process of treaty interpretation. n the case of treaty obligations, the honour of the Crown arises both with respect to the interpretation of treaty obligations, and to their implementation, that is, whether the obligations have been breached.

The Court agreed that the honour of the Crown applies to the interpretation stage, which is the stage before the court in this appeal. This stage, however, is further defined by the parties’ agreement, expressed in the Sproat Order, which provides that the sole issue before the trial judge was that of interpreting the Treaty to determine the crystallization date. The appellants are thus precluded from asserting sharp dealing in the course of the treaty negotiation process just as the respondents are precluded from asserting the Missanabie Cree were not entitled to a reserve. Moreover, as set out above, the Court saw no error in the trial judge’s purposive interpretation of the reserve clause.

The trial judge was alive to the foundational principle of the honour of the Crown, but also noted: “[I]t is not the role of treaty interpretation to distort the meaning of the treaty in an attempt to redress an historical wrong”. In this respect, he was in line with the jurisprudence that “‘generous’ rules of interpretation should not be confused with a vague sense of after-the-fact largesse” and that the honour of the Crown “cannot alter the terms of the treaty by exceeding what ‘is possible on the language’ or realistic”. In short, the trial judge applied the correct law within the context of the Marshall framework and gave full consideration to the honour of the Crown to the extent it was appropriate to do so given the scope of the issue before him.

Ancillary issues

  1. Yes.

Canada brought a motion to introduce fresh evidence on the appeal as to the achievement of the Settlement Agreement. The Court admitted the fresh evidence, as the test for its admission was met.

The Settlement Agreement, reached after judgment was rendered in the trial of this matter, was highly relevant to issues regarding the liability of the Crown. There were no concerns about its credibility in that a settlement was clearly reached, ratified and reflected in an Order-in-Council dated February 29, 2020 (the “OIC”). It was material to the issues on appeal, such as Canada’s motion to have the appeal against it dismissed.

  1. No.

The Court dismissed Canada’s motion to continue the sealing order. Canada did not demonstrate that the public objectives of “administration of justice, the promotion of settlements and settlement privilege” were at “serious risk” on the facts of this case, namely because the most salient elements of the Settlement Agreement were already publicly available through the OIC.

Canada’s principal submission was that disclosure of the documents could have a negative impact upon and jeopardize future Crown-First Nation negotiations. In effect, Canada argued that in order to be able to negotiate effectively with other First Nations in the future, confidentiality must be guaranteed. In oral argument, Canada expressed a concern that negotiators would not be frank, open and honest in their dealings for fear that their positions, as well as the negotiation process, might be exposed and ridiculed.

To limit the open court principle, a party must establish: (1) court openness poses a serious risk to an important public interest; (2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and (3) as a matter of proportionality, the benefits of the order outweigh its negative effects.

Canada did not satisfy this first requirement of the test. While invoking the public interest exception of (in this case) settlement privilege, it did so at a highly general level. It is necessary to identify both the public interest at issue and the seriousness of the risk to it within the specific facts viewed in context. Here, Canada only generally raised the broad concern that removing the seal would have a “chilling effect” on future Crown-First Nations negotiations.

  1. No.

Canada sought to dismiss the appeal against it and enforce the Settlement Agreement. It submitted that continuing the appeal was an abuse of process. The MCFN consented to a dismissal as against Canada but did not consent to a dismissal on the basis of abuse of process. Ontario agreed with the MCFN that the appeal against Canada was not an abuse of process.

The primary focus of the doctrine of abuse of process places more emphasis upon the integrity of the adjudicative functions of courts than the interests of parties. The Court was of the view that the motion to dismiss the appeal and enforce the Settlement Agreement should not be granted. The order sought was discretionary in nature and should only be granted in “the clearest of cases”, which this was not.


Falsetto v. Falsetto, 2024 ONCA 149

[MacPherson, Miller and Paciocco JJ.A.]

Counsel:

G. Cullwick, for the appellant

D. Cutler, for the respondent

Keywords: Property, Trusts, Presumption of Resulting Trust, Purchase Money Resulting Trusts, Gifts, Planning Act, R.S.O. 1990, c. P.13, Pecore v. Pecore, 2007 SCC 17, Nishi v. Rascal Trucking Ltd., 2013 SCC 33, Lattimer v. Lattimer, (1978), 18 O.R. (2d) 375, Schwartz v. Schwartz, 2012 ONCA 239, Andrade v. Andrade, 2016 ONCA 368, Holtby v. Draper, 2017 ONCA 932

facts:

The appellant, L.F., is the former father-in-law of the respondent, P.F. The appellant and his son A.F. were engaged in the business of buying and redeveloping real estate in the Ottawa area since around 1990.

At issue in this case was the property located at 415 Lisgar. The registered owners on the title to the property are P.F and A.F.

The background to L.F.’s claim of a purchase money resulting trust involved the circumstances prior to the closing of 415 Lisgar. In 2011, A.F. was initially listed as the sole purchaser of 415 Lisgar. However, prior to closing, his solicitor advised there would be an adverse consequence to A.F being the sole purchaser due to the operation of the Planning Act, since A.F. held legal and beneficial title to a property adjacent to 415 Lisgar. Thus, to avoid the two properties from becoming one parcel of land and merging titles, the solicitor suggested adding L.F. as on owner on the title to 415 Lisgar.

This required adding L.F. to the mortgage. However, six days before the closing, the bank advised that there was insufficient time to approve L.F. under the mortgage. To save the transaction, A.F.’s wife P.F. took L.F.’s intended place on title. P.F. made no financial contribution to the purchase.

In 2020, A.F. and P.F. separated. P.F. asserted a 50 percent interest in 415 Lisgar, pursuant to her being a signatory to the mortgage agreement and being registered on title as a co-owner. L.F. brought an application seeking a declaration that P.F. held legal title to 415 Lisgar in trust for him as a beneficial co-owner with A.F.

issues:

Did the application judge err in finding that the purchase funds were advanced with the intention of making a gift?

holding:

Appeal allowed.

reasoning:

Yes.

The application judge found that L.F. advanced the funds with the intention of making a gift to P.F. because there was no other way to avoid the operation of the Planning Act, and avoiding the operation of the Planning Act was Luigi’s sole purpose.

However, there were several problems with the application judge’s chain of reasoning.

First, the application judge’s characterization of L.F.’s intention was incomplete. What was left out was that L.F.’s purpose in participating in the transaction was to purchase 415 Lisgar as an investment property and  to become its co-owner in a joint business venture with A.F. L.F. always intended to and did earn income from the property.

There was an overwhelming amount of evidence in support of affirming the presumption of resulting trust. This included all of the evidence of his history of similar business transactions with A.F., his advancement of the purchase money and closing costs, his post-purchase management and renting out of the property, and his eventual payment of a share of the property taxes.

The application judge erred in concluding that the evidence did not assist in discerning whether L.F. intended to retain a beneficial interest rather than provide P.F. with a gift. L.F.’s history of dealing with the property, including his on-going payment of expenses would have made a gift that much more extravagant and that much less likely.

Furthermore, L.F. intended to purchase 415 Lisgar in a manner that did not trigger adverse Planning Act consequences. At first, he intended to accomplish this by registering himself on title as co-owner. When that option became impossible due to financing considerations, he and A.F. decided that P.F. would take title to a 50 percent interest, subject to a trust in favour of L.F.

In sum, the application judge erred in making the presumed operation of the Planning Act determinative of the question of whether L.F. intended to make a gift of the purchase money or retain a beneficial interest in the property.

MacPherson J., dissenting:

No

There were four crucial factual points that grounded the application judge’s legal analysis and conclusion.

First, the sole reason for putting the respondent P.F. on title to the property at 415 Lisgar was to avoid a merger of title of it and the adjoining property.

Second, after the respondent was placed on title in 2011, she remained the co-owner with her husband for more than ten years. Neither her husband (now ex-husband) nor her father in-law took any steps to change the formal ownership of the Lisgar property.

Third, for at least eight of those years L.F.’s tax returns reflected no ownership interest in 415 Lisgar.

Fourth, there was never any suggestion that P.F.’s co-ownership of 415 Lisgar would be held by her for L.F. There were no trust documents. There were no discussions between A.F. and P.F., or L.F. and P.F., about a trust.

The simple fact that governed the appeal was that for about ten years A.F. and L.F. initiated, accepted, and did not challenge P.F.’s crystal clear beneficial ownership, together with her husband, of the property at 415 Lisgar St. L.F.’s attempt, after his son’s marriage to P.F. ended, to claim half ownership of a property that was never registered in his name and for which he reported nothing to the tax authorities for almost a decade, was grossly unfair.


Vyazemskaya v. Safin, 2024 ONCA 156

[Doherty, Lauwers and George JJ.A.]

Counsel:

D.S., acting in person

S. Cocieru, for the respondent

Keywords: Family Law, Divorce, Spousal Support, Foreign Divorces, Recognition, Jurisdiction, Domicile, Real and Substantial Connection, Forum Shopping, Public Policy, Divorce Act, R.S.C., 1985, c. 3, (2nd Supp.), Family Law Act, R.S.O. 1990, c. F.3, D.B.S. v. S.R.G., 2006 SCC 37, Rothgiesser v. Rothgiesser, 46 O.R. (3d) 577 (C.A.), Virani v. Virani, 2006 BCCA 341, L.G.V. v. L.A.P., 2016 NBCA 23, Leonard v. Booker, 2007 NBCA 71, Armoyan v. Armoyan, 2013 NSCA 99, Okmyansky v. Okmyansky, 2007 ONCA 427, Cheng v. Liu, 2017 ONCA 104, Wilson v. Kovalev, 2016 ONSC 163, Beals v. Saldanha, 2003 SCC 72, Indyka v. Indyka, [1969] 1 A.C. 33 (U.K.H.L.), Powell v. Cockburn, [1977] 2 S.C.R. 218, Holub v. Holub (1976), 71 D.L.R. (3d) 698 (Man. C.A.), Orabi v. Qaoud, 2005 NSCA 28, R.S. v. P.R., 2019 SCC 49, Abraham v. Gallo, 2022 ONCA 874, R.N.S. v. K.S., 2013 BCCA 406, Yan v. Xu, 2023 ONSC 1288, Zhang v. Lin, 2010 ABQB 420, Marzara v. Marzara, 2011 BCSC 408

facts:

The parties are Russian citizens and immigrated to Canada. They are permanent residents. The appellant is employed in Canada. After unsuccessful efforts to negotiate a separation agreement – the appellant moved out of the matrimonial home. Three days later the appellant applied for a divorce in Russia. Upon learning of the divorce proceedings the respondent filed an objection with the Russian court, taking the position that the divorce, and corollary relief, should be determined in their place of residence, Toronto. A Russian justice of the peace granted the divorce (the “Russian divorce order”).

The wife’s uncontested evidence was that under Russian law, spousal support can only be ordered in certain limited circumstances, such as when the spouse seeking maintenance is disabled, past retirement age, pregnant, or the primary caregiver for a child under the age of three. At the time the divorce was granted the respondent met none of these conditions, and therefore spousal support was not available under Russian law. If the Russian divorce order is recognized in Canada, the respondent would not be able to seek spousal support under the Divorce Act. Nor could she seek spousal support under the Family Law Act.

The respondent brought a motion to set aside the divorce order. The trial judge held that, while the parties had a real and substantial connection to Russia, the Russian divorce order “should not be recognized in Ontario”. She referenced s. 22 of the Divorce Act, highlighting subsection (3) in particular, and determined that a divorce which is granted in a foreign jurisdiction is presumed to be valid. The trial judge then self-instructed that “the onus rests on the [respondent] to convince the court that the divorce ought to be set aside”.

The judge held that the public policy exception applied because the appellant had unfairly “forum shopped”. She found that, while the appellant might have had other reasons for pursuing a divorce in Russia, the “driving factor was avoiding court imposed spousal support obligations under Ontario law” and that “[t]his case involves exactly the sort of ‘moral’ and ‘fundamental’ values that underlie the public policy [defence]”.

issues:

Did the trial judge err by refusing to recognize the foreign divorce under s.22(3) of the Divorce Act?

holding:

Appeal dismissed.

reasoning:

No.

Section 22 of the Divorce Act and the “real and substantial connection” test

At common law, domicile alone was the traditional test for recognition of a foreign divorce. Canadian courts added “real and substantial connection” as a basis for recognition. Section 22 of the Divorce Act has been interpreted consistently such that a foreign divorce will be recognized in Canada where there is a real and substantial connection between one of the parties and the granting jurisdiction, unless an exception applies.

The Court held that the trial judge did not err when she concluded that 1) a real and substantial connection is sufficient to render a foreign divorce presumptively valid, 2) this test was met on account of the parties being Russian citizens, and 3) the onus was on the respondent – as the party alleging that the divorce was invalid – to adduce evidence demonstrating that the divorce was not properly obtained.

Unfair forum-shopping tactics is an exception to the recognition of foreign divorces

The trial judge declined to recognize the Russian divorce based on the public policy exception. The public policy defence turns on whether the foreign law is contrary to our view of basic morality. An argument based on public policy should not succeed “for the sole reason that … [the] foreign jurisdiction would not yield [the same result as Ontario or Canada]”.

Even if the appellant went to Russia for a divorce with the specific intention of avoiding spousal support – which he denied – and even if this decision led to what one might consider a repugnant outcome, the appellant argued that Beals v. Saldanha requires the Court to overlook these circumstances. The appellant asserted that the determinative question, and the one that the trial judge should have answered, per Beals, was whether the Russian law governing divorce and spousal support was repugnant. In the appellant’s view, his conduct and intentions were irrelevant. The appellant argued that the trial judge should have, but did not, conduct a comprehensive comparative analysis of Russian law, including an assessment of the law that governs child support and Russia’s broader social support system. The appellant’s position was that Russian law is fundamentally the same as Canadian law and that, in any event, expert evidence would be required to prove otherwise.

The Court disagreed with the appellant’s position. The appellant’s position overlooked the existence of other “nominate” defences established in Beals to the recognition of foreign divorces, including fraud and natural justice. The Court mentioned that Beals also refers to what the Court considered to be a fourth potential defence – one that, like “fraud” and “natural justice”, depends on the facts of a particular case, though only in passing. The Court in Beals, refers to the absence of “unfair forum-shopping tactics” as a condition for recognizing a judgment from another province.

The Court held that Beals leaves open “unfair forum-shopping tactics” as a possible exception. Therefore, like “fraud” and “natural justice”, “unfair forum-shopping tactics” is a category that is analytically distinct from the public policy defence. While forum-shopping will not always violate the principles of morality, “unfair forum-shopping tactics” most certainly will. And, if such unfair tactics are relevant to warrant consideration in a purely commercial context, like in Beals, then they must be relevant in a family law context where such a defence would be particularly persuasive.

The trial judge did not err in denying recognition of the Russian divorce order

The trial judge wrote that, in her view, the email correspondence between the parties supported the respondent’s position that the appellant sought and obtained the divorce in Russia pre-emptively so that she could not obtain a divorce and spousal support in Ontario. The trial judge reasonably concluded that on balance, the appellant pre-emptively sought and obtained the divorce in Russia to avoid paying spousal support under Ontario law to the respondent.

The Court therefore noted that the appellant did not demonstrate any palpable and overriding error in the trial judge’s findings of fact or with her ultimate conclusion that the Russian divorce should not be recognized. Accordingly, the Court found no basis to interfere.


Sonia v. Ratan , 2024 ONCA 152

[Simmons, Paciocco and Thorburn JJ.A.]

Counsel:

O. Hoque and Z. Moral, for the appellant

S. Kabir and M. Sidana, for the respondent

Keywords:  Family Law, Divorce, Spousal Support, Property, Equalization of Net Family Property, Jurisdiction, Foreign Divorces, Enforcement, Civil Procedure, Orders, Setting Aside, Fraud, Costs, Bad Faith, Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.), s.22, Family Law Act, R.S.O. 1990, c. F.3., s.7(3), 22(3), Family Law Rules, O. Reg. 114/99, r.25(1), Rules of Civil Procedure, r.59.06(2)(a), Abraham v. Gallo, 2022 ONCA 874, Rothgiesser v. Rothgiesser (2000), 46 O.R. (3d) 577 (Ont. C.A.), Okmyansky v. Okmyansky, 2007 ONCA 427, Cheng v. Liu, 2017 ONCA 104, Syed Ali Nawaz Gardezi v. Lt. Col. Muhamad Yusuf (1963), 15 D.L.R. 9 (Supreme Court of Pakistan), Novikova v. Lyzo, 2019 ONCA 821, Qaoud v. Orabi, 2005 NSCA 28, Beals v. Saldanha, 2003 SCC 72, Saleh v. Tawoosi, 2016 ONSC 540, Wilson v. Kovalev, 2016 ONSC 163, Kadri v. Kadri, 2015 ONSC 321, Danylkiw v. Danylkiw (2003), 37 R.F.L. (5th) 43 (Ont. S.C.), Virc v. Blair, 2014 ONCA 392, Amin v. Canada (Minister of Citizenship and Immigration), 2008 FC 168, Chaudhary v. Chaudhary, [1984] 2 All. E.R. 1017 (C.A.), Quazi v. Quazi, [1980] A.C. 744 (H.L.), Saleem v. Canada (Citizenship and Immigration), 2010 CanLII 87618 (IRB App. Div.), Butt v. Canada (Citizenship and Immigration), 2010 CanLII 78765 (IRB App. Div.), Tiraei v. Canada (Citizenship and Immigration), 2009 CanLII 78323 (IRB App. Div.), Nanji v. Canada (Citizenship and Immigration), 2022 FC 1306, Khaleque v. Canada (Citizenship and Immigration), 2012 CanLII 101473 (IRB App. Div.)

facts:

The appellant and respondent were married in Bangladesh in 1998. In 2015, the respondent and the children obtained Canadian landed immigrant status. In January 2016, the respondent applied to sponsor his wife, the appellant, to become a permanent resident. In August 2016, the respondent and the children moved to Canada, but the appellant remained in Bangladesh.

On November 17, 2016, the respondent personally delivered a written notice of divorce to the appellant at the Dhaka airport in Bangladesh. A copy of the notice was couriered to the Mayor of Brahmanbaria (the Chairman for the purposes of s. 7 of a Bangladesh Ordinance).

On February 24, 2017, the appellant came to Canada. On March 17, 2017, the Bangladesh divorce became effective pursuant to the Bangladesh Ordinance. On January 7, 2020, the appellant filed an application in Ontario for a divorce and corollary relief under the Divorce Act and the Family Law Act.

The respondent disputed the application and filed a Divorce Certificate for the Bangladesh divorce issued on June 15, 2017. The respondent took the position that the parties were already divorced effective March 17, 2017, and that, since the appellant’s equalization claim was brought more than two years after the Bangladesh divorce, her property claims were barred by s. 7(3) of the Family Law Act.

The appellant denied that they were divorced in 2017, claiming that respondent’s evidence was fraudulent and, in the alternative, that he had not followed the proper procedure for a divorce in Bangladesh.

On March 30 and 31, 2021, two Consent Orders were issued. Among other things, the Consent Orders provided that (i) the Bangladesh divorce was valid in Bangladesh but should not be recognized for the purpose of Canadian law for public policy reasons; and (ii) the divorce in Canada would be granted, and the Ontario Court would have the jurisdiction to determine spousal support and equalization of property.

However, after the Consent Orders were signed, the respondent obtained evidence from witnesses who attended the wedding between the appellant and T. A. in 2020. The respondent brought a motion to set aside the Consent Orders and obtain an order declaring that the Bangladesh divorce was valid under the laws of Bangladesh and recognized in Canada. He took the position that the appellant’s claim that she had not married T. A. vitiated his consent to the Consent Orders and undermined her claim that the Bangladesh divorce was invalid.

The motion judge directed a hearing on the issue and ultimately found that the appellant married T. A. on May 24, 2020.

On December 2, 2022, the motion judge issued a final order setting aside the Consent Orders, and recognizing the Bangladesh divorce under Canadian law. The motion judge dismissed the appellant’s claim for spousal support and equalization.

The motion judge set aside the Consent Orders after previously unavailable evidence was adduced that the appellant had remarried in Bangladesh in 2020 (the “subsequent marriage”). Based on this new evidence, the motion judge found that the respondent’s consent to the prior Consent Orders was vitiated by fraud and that the Court would not have made those orders if it had knowledge of the subsequent marriage. The motion judge also held that the Bangladesh divorce was valid and recognized in Canada.

issues:

1.Did the motion judge err in law in setting aside the Consent Orders?

2. Did the motion judge err in law by recognizing the Bangladesh Divorce?

3. Did the motion judge make a palpable and overriding error in finding that the appellant acted in bad faith?

4. Did the motion judge err in awarding full indemnity costs?

holding:

Appeal dismissed.

reasoning:
  1. No.

The motion judge did not rely on the validity of the talaq divorce when setting aside the Consent Orders. The talaq divorce was not mentioned in that portion of his reasons, nor was there anything in the reasons to indicate that the validity of the divorce was a factor in setting aside the Consent Orders. Rather, it was the appellant’s misrepresentation that she never married T. A. which vitiated the respondent’s consent.

Second, the motion judge specifically rejected the suggestion that the respondent knew of the subsequent marriage at the time of the Consent Orders. The respondent suspected that a marriage had occurred in 2016. However, his consent was vitiated by the fact that at the time he agreed to the Consent Orders, there was no evidence that the appellant had remarried in 2020. Accordingly, the issue of whether she had remarried was not addressed.

The motion judge found that the appellant’s statement that she had never remarried was a misrepresentation that was intended to be acted upon and was in fact acted upon. There was no onus on the respondent to test the accuracy of her deliberate misrepresentation.

Finally, whether the subsequent marriage was valid was irrelevant. The motion judge specifically found that the second ground for setting aside the Consent Orders, namely that there were facts discovered after the Consent Orders were made, applied regardless of whether the appellant had, in fact, remarried. It was enough that there was credible evidence to this effect. The motion judge would not have approved the Consent Orders had he been aware of such evidence at the time the Consent Orders were made.

  1. No.

There was no dispute that there was a real and substantial connection to Bangladesh. The appellant was married, had her children and was living in Bangladesh until after she received the respondent’s divorce notice. The divorce is therefore presumptively valid under s. 22(3) of the Divorce Act and the onus fell on the appellant to prove that an exception applied: Abraham, at para. 15. In this case, the appellant relied solely on the public policy exception.

However, the Court disagreed that the recognition of the Bangladesh divorce was contrary to public policy. There was no issue that the divorce was obtained by fraud or that there was a denial of natural justice. The only issue was whether recognition of the Bangladesh divorce constituted a breach of public policy.

The appellant described the divorce as a “bare” talaq divorce that was not granted by a competent authority, and over which there was no state oversight. She therefore claimed it was against Canadian public policy. She was correct that “bare” talaq divorces are not recognized as valid in Canada. However, not all talaq divorces are “bare” talaq divorces.

Caselaw establishes that the procedure in s. 7 of the Bangladesh Ordinance removes the “bare” nature of a talaq divorce, satisfies the requirements of s. 22 of the Divorce Act and does not offend Canadian public policy.

Furthermore, the appellant’s own expert advised that the Bangladesh Ordinance removes the unilateral nature of the talaq and provides the wife with an opportunity to participate.

The requirements in the Bangladesh Ordinance that the wife be given notice, and the 90-day waiting period, alleviate the public policy concerns usually associated with “bare” talaq divorces. “Bare” talaq divorces continue to be unenforceable if obtained in Canada, however it would be contrary to the principle of comity to refuse to recognize any talaq divorce simply because it follows a different legal tradition than our own.

The Bangladesh divorce was granted after a 90-day period to enable the parties to consider reconciliation and after delivery of a copy of the Divorce Notice to the Mayor of Brahmanbaria. The divorce was recognized by the Registrar and the expert evidence of all three experts for both parties was that the Bangladesh divorce complied with s. 7 of the Bangladesh Ordinance.

  1. No.

It was an error in law to consider the appellant’s bad faith in deciding whether the divorce was contrary to public policy. As discussed above, the public policy exception is aimed at the foreign law, not the facts of the case: Beals, at paras. 71 and 75.

However, given that the divorce was not contrary to public policy, this error had no effect on the outcome of the case. Once it was established that the foreign divorce met the conditions in s. 22 of the Divorce Act, it was presumptively valid: Abraham, at para. 15. The public policy exception was only available to rebut that presumption. Where, as here, a divorce was presumptively valid, and there were no considerations weighing against this presumption.

Further, it was not strictly necessary to deal with this issue save to the extent it affected the appellant’s request for leave to appeal costs. Regardless, the motion judge’s findings on bad faith related solely to the fact that the appellant knew she had remarried and deliberately misrepresented this fact in the litigation, which was well-supported on the evidence.

  1. No.

Given the respondent’s success on the motion and the motion judge’s findings that the appellant conducted the litigation in bad faith and made numerous unfounded allegations of fraud, the appellant failed to meet the high threshold for obtaining leave to appeal the motion judge’s costs award.


Ihnatowych Estate v. Ihnatowych, 2024 ONCA 142

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

Counsel:

A. McKague and C. Morano, for the appellants, Alexander Erik de Berner, Darwin de Berner and Parker de Berner, minors by their Litigation Guardian, Alexander Erik de Berner

A. Mayeski, K.J. Hagman and K. Watters for the respondent,
Ulana Olha Gorgi in her capacity as Estate Trustee of the Estate of John Ihnatowych

Keywords: Wills and Estates, Wills, Interpretation, Equitable Remedies, Rectification, Re Estate of Blanca Esther Robinson, 2010 ONSC 3484, The Bank of Nova Scotia Trust Company v. Haugrud, 2016 ONSC 8150, Daradick v. McKeand Estate, 2012 ONSC 5622, Hofman v. Lougheed et al., 2023 ONSC 3437, Canada (A.G.) v. Fairmont Hotels Inc, 2016 SCC 56, Johnson v. Johnson, 2022 ONCA 682, Gironda v. Gironda, 2013 ONSC 4133, Spence v. BMO Trust Co., 2016 ONCA 196, Lipson v. Lipson (2009), 52 E.T.R. (3d) 44 (Ont. S.C.)

facts:

J.I. died and the appellant A.E.d.B deposed that he was one of J.I.’s children from a relationship prior to J.I.’s marriage. A.E.d.B claimed a residuary interest in J.I.’s estate as his biological son and therefore J.I.’s “issue” under the “Residue Clause” in J.I.’s will (the “Will”). He also claimed that his sons were J.I.’s biological grandchildren and therefore beneficiaries of his estate under the “Grandchildren Clause” in the Will. U.O.G. and M.I. are the two children of John’s marriage. U.O.G. is the sole Estate Trustee of J.I.’s estate.

It was uncontested that A.E.d.B was J.I.’s biological son. A.E.d.B had not met J.I. at the time the Will was made but first met J.I. in person in 2014, and in the years that followed J.I. would visit from time to time. J.I. executed his final Will in 2009. The Will provided, in clause VI.1, that ten percent of the residue of his estate was to be distributed among his “grandchildren” alive at the time of his death in equal shares (the “Grandchildren Clause”), and in clause VI.4, that the balance of the residue was to be distributed among his “issue” alive at the time of his death in equal shares (the “Residue Clause”).

In a handwritten note regarding the Will, J.I. made numerous specific references to U.O.G. and M.I. but none to A.E.d.B. The lawyer who drafted the Will also stated that J.I. told him that he wished to leave his estate only to U.O.G. and M.I. and their children.

U.O.G.  brought an application to rectify the Will to name her and M.I. as J.I.’s children under the Residue Clause and the Grandchildren Clause, with the result that the appellants, A.E.d.B and his children, would be excluded as beneficiaries.

The application judge granted the rectification holding that the wording in the Will did not accurately carry out J.I.’s instructions.

issues:

Did the application judge make an unprecedented application of the equitable doctrine of rectification?

holding:

Appeal dismissed.

reasoning:

No.

The Court held that the application judge correctly invoked the third factor in Re Estate of Blanca Esther Robinson to enable rectification, that is, where the testator’s instructions have not been carried out. This had been done in other cases and the application judge’s application of the equitable doctrine of rectification was not unprecedented.

On the application, the parties agreed on the legal principles applicable to rectification of a will as set out in Re Estate of Blanca Esther Robinson.

Robinson, at paras. 24-25, provides that rectification is primarily concerned with “preventing the defeat of the testamentary intentions due to errors or omissions by the drafter of the will” and may be employed, “where the testator’s instructions have not been carried out”. The court in that case, at para. 24, listed three circumstances in which a court will rectify a will where there is no ambiguity on the face of the will, and the testator has reviewed and approved the wording:

  1. Where there is an accidental slip or omission because of a typographical error or clerical error;
  2. Where the testator’s instructions have been misunderstood; or
  3. Where the testator’s instructions have not been carried out.

On appeal, the appellants claimed the application judge erred by failing to apply the new test for rectification set out in Canada (A.G.) v. Fairmont Hotels Inc.

The appellants also took issue with the quality of evidence that the application judge accepted. They claimed that on the standard set out in Fairmont Hotels, there should be a presumption of validity and therefore clear evidence that leaves the court with little to no doubt about a mistake in order to rebut that presumption. The Court disagreed that Fairmont Hotels sets out a new and different test for rectification of a will.

In this case, the question was not whether the Will had the intended legal effect – that is that J.I.’s biological offspring would not be included as beneficiaries notwithstanding the wording that was used. Rather, rectification was available only on the basis that the Will did not conform to J.I.’s instructions, that it did not accurately set out the specific bequests that J.I. communicated to his lawyer.

However, given the parties’ agreement that Robinson provided the correct test for rectification of a will and the fact that applying the test in Fairmont Hotels would not require a different analysis or result, the Court did not give effect to this argument on appeal. The Court found that the application judge made no unprecedented application of the equitable doctrine of rectification. Rather, he applied the correct test and considered the evidence required to seek rectification of the Will.

As for the appellants’ argument about the evidence and standard of proof required, there was no question that extrinsic evidence may be admitted to establish an error in a will when the evidence comes from the solicitor who drafted the will, made the error and can testify to the testator’s instructions. The application judge correctly applied this standard and properly assessed the evidence against it.

The Court held that the evidence here met the test articulated in Fairmont Hotels of showing a “high degree of clarity, persuasiveness and cogency” such that rectification was appropriate. First, the application judge found that J.I.’s instructions regarding his Will were clear. Second, the application judge accepted the lawyer’s admission that he did not carry out J.I.’s instructions in the drafting of J.I.’s Will in that neither the Grandchildren Clause nor the Residue Clause reflected J.I.’s intention that his estate go only to U.O.G. and M.I. and their children. Third, while the standard form will contemplated an equal distribution of the residue of his estate into as many equal shares as he had children who survived him and their children, there was evidence that J.I. specifically intended to include U.O.G. and M.I. but no evidence that he specifically intended to include A.E.d.B and his children in his estate plan.

Because the application judge’s conclusions were rooted in the evidence adduced on the application, they were entitled to appellate deference. The Court saw no palpable and overriding error in the motion judge’s application of the evidence to the test for rectification of a will. Moreover, there was no evidence that the application judge confused will rectification with will interpretation. The application judge also correctly applied Lipson v. Lipson when considering the deletion and addition of words to correct an error in a will, by considering whether the Will reflected J.I’s intentions, reading the Will as a whole and in light of the surrounding circumstances.


Castillo v. Xela Enterprises Ltd., 2024 ONCA 141

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

Counsel:

B. Greenspan and M. Biddulph, for the appellant

M. Jilesen and D. Knoke, for the respondent KSV Advisory Inc., the Receiver of Xela Enterprises Ltd.

Keywords: Civil Procedure, Orders, Enforcement, Equitable Receivers, Contempt, Costs, Rules of Civil Procedure, r. 60.11, Libman v. The Queen, [1985] 2 S.C.R. 178, Canada (Human Rights Commission) v. Canada Liberty Net, [1998] 1 S.C.R. 626, R. v. Greco (2001), 159 C.C.C. (3d) 146 (Ont. C.A.), leave to appeal refused, [2001] S.C.C.A. No. 656., R. v. Barra, 2021 ONCA 568, R. v. Zingre, [1981] 2 S.C.R. 392, Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, Tolofson v. Jensen, [1994] 3 S.C.R. 1022, Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663, Boily v. Carleton Condominium Corporation 145, 2014 ONCA 574, Echostar Communications Corp v. Rodgers, 2010 ONSC 2164, Sussex v. 3933938, 2003 CanLII 49336 (Ont. Sup. Ct.), Manis v. Manis (2001), 55 O.R. (3d) 758 (Ont. C.A.)

facts:

M.C., the appellant’s sister, obtained a judgment against the appellant, their father (deceased), and Xela Enterprises Ltd. In connection with enforcing her judgment, M.C. sought the appointment of a receiver over the property and assets of Xela, which order was granted by the Commercial List judge. The appellant was found and declared to be in civil contempt of the order appointing a receiver. He was sentenced to 30 days imprisonment and ordered to pay costs of the contempt proceedings on a full indemnity basis in the amount of $563,485.00. He appealed all three orders.

issues:

The appeal of the contempt finding

  1. Did the motion judge err in law by holding that the court had territorial jurisdiction to find the appellant in contempt based on his Declaration that was not made in Canada but in Guatemala?
  2. Did the motion judge err in law by concluding that the appellant was in contempt by finding that the appellant breached paragraphs 3 and 9 of the Appointment Order?

The Sentence Appeal

  1. Was the sentence of 30 days in prison unfit and outside the range, and did the motion judge err by failing to consider a conditional or intermittent sentence?

The Costs Appeal

  1. Did the motion judge make factual and legal errors that warrantted the intervention of the Court in the award of full indemnity costs?
holding:

Appeal dismissed.

reasoning:

The Contempt Appeal

  1. No.

The real and substantial link test broadened the inquiry from looking only at the location of the actions of the alleged contemnor, to the connections or links between the impugned conduct and Ontario. The test is not whether the contemnor has links to Canada, but whether the breach of the law or the court order has a “real and substantial link” to Canada. This concept was fully explained and applied by the Court in R. v. Greco, and more recently in R. v. Barra. A state cannot enforce its domestic laws in another state without the consent of that state. However, the principle of territoriality does not prevent a state from enacting laws or issuing court orders that are enforceable locally, but that govern conduct outside the state. A court in Canada may issue a probation order, enforceable in Canada, that binds the conduct of probationers both in Canada and outside the country.

Applying Libman, Greco and Barra, the motion judge made no error in focusing on the connections to Canada, rather than the physical location of the appellant when he made the Declaration. She correctly found a real and substantial link based on the significant connections between the swearing of the Declaration and the province of Ontario.

Of particular significance was that no country but Canada was concerned with enforcing the Ontario Appointment Order. In addition, as in Barra, there was clearly a benefit to the appellant in Ontario in undermining and interfering with the Receiver’s ability to obtain the information it needed about LISA and Gabinvest in order to do its job of enforcing the Ontario judgment against Xela.

The Court agreed with the motion judge that, read as a whole, the Order had no territorial limitation and applied to the persons named in the Order whether in Canada or elsewhere. There was no evidence offered that the Receiver needed any order or other legal authority in Panama or Guatemala to hold the corporate meetings it held or to take any other steps under the authority of the Appointment Order.

The doctrine of international comity is that “the Courts of one jurisdiction will give effect to the laws and judicial decisions of another jurisdiction, not as a matter of obligation but out of mutual deference and respect.” The appellant was free to engage the Panamanian legal system as long as he abided by the provisions of the Order. The contemptuous conduct was making the Declaration to be used to initiate a criminal complaint against the Receiver without seeking leave of the court in Ontario, as required by the Appointment Order. The evidence the appellant provided was misleading, incomplete, and untruthful regarding his status with Xela and failed to reveal the appointment of the Receiver.

  1. No.

The motion judge accurately articulated the three criteria for a finding of civil contempt: the order that is alleged to have been breached must be clear and unequivocal, the alleged contemnor must have knowledge of the order, and he must have intentionally breached the order.

The Appointment Order was clear and unequivocal. It gave the Receiver the exclusive authority to execute documents in relation to the Property of Xela (para. 3(h)), to exercise shareholder rights of Xela (para. 3(q)), and if exercising that authority, others including the appellant and Xela are excluded from doing so and they are precluded from interfering with the Receiver’s actions. (para. 3’s concluding words). By calling and holding the shareholders’ meeting of Gabinvest, the Receiver exercised its exclusive authority under paras. 3(h) and (q). As the motion judge found, by signing the Declaration as President of Xela, sole shareholder of Gabinvest, the appellant was purporting to exercise Xela’s shareholder’s rights, and did so by signing a document on behalf of Xela, contrary to paras. 3(h) and (q) and the exclusivity prohibition.

The Sentence Appeal

  1. No.

The motion judge gave full, clear and compelling reasons for imposing a 30 day period of incarceration as the only fit sentence in a case where the contemptuous conduct was egregious and constituted an attempt to undermine and thwart the actions of a court-appointed officer. The appellant’s position that he had done everything he could to purge his contempt and to have the Criminal Complaint and investigation withdrawn by the Panamanian authorities was completely rejected by the motion judge as insincere and disingenuous. The appellant’s conduct was “blatant, deliberate, wilful and …unrepentant”, not just accidental or misguided.

The Court had been provided with fresh evidence that the Panamanian Prosecutor’s office had closed the investigation on the basis that “the facts complained are not considered the crime of falsehood accused.” Therefore, there was nothing further that could be done to purge the contempt by withdrawing the complaint.

The motion judge noted that an apology by the contemnor can also be a mitigating factor on sentencing, but the appellant never apologized or expressed remorse.

The Costs Appeal

  1. No.

The appellant argued that the costs were awarded to compensate for a five-year long, hotly contested, complex action, while it was a simple, two-day contempt motion. The motion judge had the best knowledge of how long or complex the proceeding was and how the conduct of each side contributed to the length and complexity. Her findings were entitled to the deference of the Court.

The motion judge justified her decision based on the extremely serious, egregious wrongdoing by the appellant which “demonstrated an astounding lack of respect for this court.”  She determined, as a matter of fairness, that no costs of the contempt proceeding should be born by the only source of funding, the unpaid judgment creditor, M.C. The motion judge observed that the appellant should have expected that the Receiver’s costs would be higher than his counsel’s because of the heavy onus of proof on the Receiver, but did not say that the Receiver was entitled to elevated costs because of that onus.


Steinberg v. Adderley , 2024 ONCA 167

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

Counsel:

R. Egit and H. Ahmed, for the appellant BridgePoint Financial Services Limited Partnership 1

M. Stoiko, for the respondents Rudolf Steinberg, Jakob Steinberg and Amanda Steinberg, minors by their Litigation Guardian, Rudolf Steinberg

R. Skiffington, for the respondent Pamela Adderley

Keywords: Contracts, Debtor-Creditor, Litigation Funding Agreements, Defences, Unconscionability, Unconscionable Transactions Relief Act, R.S.O. 1990, c. U.2, Uber Technologies Inc. v. Heller, 2020 SCC 16, Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75

facts:

The respondent, R.S., was injured while a passenger in a motor vehicle involved in an accident. He pursued claims as a result. On the advice of his then legal counsel, R.S. obtained five loans, totalling $65,500, from the appellant, BridgePoint Financial Services Limited Partnership 1 (“BridgePoint”). The loans were to fund expenses while R.S. litigated claims arising out of the accident. The loans bore compound interest at rates between 20% and 24%. The motion judge found that the loans were not contingent on success in the litigation, but that BridgePoint was given a security interest in any settlement funds. R.S. also signed an Irrevocable Authorization and Direction with each loan that required any new counsel to be bound by the provisions of the loan agreement for the balance owing on the loans together with any accrued interest.

issues:

Did motion judge err in reducing the amount of loans and accrued interest payable by R.S. by $75,000?

holding:

Appeal allowed.

reasoning:

Yes.

The Court held that once the motion judge found that the loan transactions were not unconscionable, there was no basis to vary the interest owing. The Unconscionable Transactions Relief Act (“UTRA”), which was the only basis upon which R.S. relied on the motion, did not give the court the power to vary interest charges without a finding that the transaction was “harsh and unconscionable”.

R.S. argued, on appeal, that the reduction could be justified based on the equitable doctrine of unconscionability. The there were two problems with this argument. First, that was not the basis on which R.S. brought his motion. Second, the doctrine requires a finding of unconscionability, which the motion judge did not make. The motion judge’s finding that the transactions were not unconscionable because R.S. had independent legal representation and signed acknowledgments confirming his understanding of how interest would accrue was supported by the record and was entitled to deference.

Additionally, delay in the litigation due to COVID-19 could not be an independent basis to reduce interest owing under loan agreements that had been found by the motion judge to be “contractually sound”. Allowing delay in the litigation due to COVID-19, even if in one sense “legitimate delay”, to justify a reduction of contractual interest simply rewrites the loan agreements. Courts are not generally empowered to rewrite contracts or relieve parties against the consequences of an improvident bargain.


Markham (City) v. Ross , 2024 ONCA 161

[van Rensburg, Roberts and Gomery JJ.A.]

Counsel:

A. Bouchelev, for the appellant

C. Barnett and A. Rintoul, for the respondent

Keywords:  Contracts, Easement Agreements, Municipal Law, By-Law Enforcement, Heritage Buildings, Ontario Heritage Act, R.S.O. 1990, c. O.18, Provincial Offences Act, R.S.O. 1990, c. P.33, Building Code Act, 1992, S.O. 1992, c. 23, Fire Code and Fire Protection and Prevention Act, 1997, S.O. 1997, c. 4, Marshall v. Bernard Place Corp. (2002), 58 O.R. (3d) 97 (C.A.)

facts:

M.R. appealed a judgment granting the City of Markham’s application to enforce various rights under a Heritage Easement Agreement registered on the title of M.R.’s property in Unionville, Ontario. The Agreement was entered into by the City and previous owners of the property and notice of the easement was registered on title in 2004 under ss. 37(3) of the Ontario Heritage Act. Under the Agreement, the owner is prohibited from making certain types of alterations to the property without the City’s prior written approval.

Beginning in the spring of 2021, the appellant began cutting down trees and regrading his backyard. He then laid a 60 foot by 80-foot concrete pad for a hockey rink and installed a cabana made from one or more repurposed shipping containers. All these steps were taken without the City’s authorization, and before the appellant sought permits required for the work. When the City was alerted to the appellant’s actions, it sent him a series of notices advising him that he was in breach of the Agreement and municipal by-laws. It also gave him verbal warnings. The appellant did not restore the property to its original state, although he did plant some trees. Over this same period, the appellant was charged under the Provincial Offences Act and convicted of violating the City’s tree preservation by-law, the Building Code Act and the Fire Code and Fire Protection and Prevention Act.

issues:

Did the application judge fail to interpret the appellant’s obligations under s. 2.8 in the context of the Agreement’s objectives, or to meaningfully consider evidence that the City’s reaction to the work on the property was based not on a genuine desire to preserve the heritage aspects of his property but was instead motivated by political or other purposes?

holding:

Appeal dismissed.

reasoning:

No.

The Court deferred to the application judge’s assessment of the evidence, as there was no palpable or overriding error.

The appellant contended that the application judge’s decision set a dangerous precedent because she found that the Agreement gave the City the sole discretion to decide if the appellant had breached his obligations and whether any such breach had been sufficiently remedied. The Court was satisfied that this case did not establish a precedent allowing the City to exercise an unfettered discretion to interfere with a property owner’s rights. The outcome was driven by the specific facts of this case. The appellant violated the Easement Agreement on any reasonable reading of s. 2.8. There was no evidence that the City acted capriciously, arbitrarily, or in bad faith. The application judge found that the appellant continued to violate the Agreement despite receiving notices and verbal warnings and being charged and convicted of breaching building code, fire code, and municipal by-law requirements. She found the situation was so exceptional that it warranted the granting of both declaratory relief and a permanent injunction. The Court therefore dismissed the appeal.


Abaxx Technologies Inc. v. Pasig and Hudson Private Limited, 2024 ONCA 164

[Gillese, Thorburn and Gomery JJ.A.]

Counsel:

M. Z. Tufman, for the appellants

B. Brooksbank and N. Tawdy for the respondents, Pasig and Hudson Private Limited, C.W.K. and S.D.

J. Percival and A. Ostermeier for the respondents, Green Tiger Markets Pte. Ltd. and J.H.K.

Keywords: Breach of Contract, Breach of Duty of Good Faith and Fair Dealing, Breach of Fiduciary Duty, Conspiracy, Breach of Confidence, Fraud, Jurisdiction, Real and Substantial Connection, Club Resorts Ltd. v. Van Breda, 2012 SCC 17, Ontario (Attorney General) v. Rothmans Inc., 2013 ONCA 353, British American Tobacco P.L.C. v. Ontario, [2013] S.C.C.A. No. 327, Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, Truscott v. Co-Operators, 2023 ONCA 267

facts:

A dispute arose from work the respondent Pasig and Hudson Private Limited (“P & H”) and the individual respondents did for the appellants or companies controlled by them. The only contract filed was a Master Services Agreement between P & H and Abaxx Exchange Pte. Ltd. dated April 10, 2019 (the “Agreement”). J.K. entered into two agreements with entities related to Abaxx: an advisory consulting agreement signed on October 1, 2018, and an employment agreement to act as the CEO of Abaxx Singapore dated November 19, 2018. In June 2019, J.K. terminated both agreements claiming he had not been paid.

In their Statement of Claim, the appellants alleged that the respondents breached their fiduciary duties, conspired to misappropriate intellectual property, inventions, and corporate opportunities related to energy trading in the Philippines and elsewhere, breached their duty of confidence and good faith, misappropriated corporate information, and submitted fraudulent invoices. The appellants claimed Ontario was the governing law and the jurisdiction for the adjudication of any disputes.

The respondents successfully brought a motion dismissing the action for want of jurisdiction. The appellants appealed.

issues:

Did the motion judge err in dismissing the action on the basis that Ontario had no jurisdiction over the claim?

holding:

Appeal dismissed.

reasoning:

No.

The motion judge correctly identified the test to establish the requisite jurisdictional connection to Ontario as set out in Club Resorts Ltd. v. Van Breda, namely that (i) the defendant is domiciled or resident in the jurisdiction, (ii) the defendant carries on business in the jurisdiction, (iii) the tort was committed in the jurisdiction, or (iv) a contract connected with the dispute was entered into in the jurisdiction. He noted that the moving party must demonstrate a “good arguable case” on the basis of the pleadings and/or the evidence filed on the jurisdiction motion. The presumption of jurisdiction arising from these factors may be rebutted by showing that there is at most, a weak relationship between the subject matter of the litigation and the proposed forum.

The Court saw no error in the motion judge’s articulation of the test, his application of the test to the evidence, or his findings of fact. The appellants had the opportunity to lead evidence to challenge the rebuttal of the presumption of jurisdiction but failed to do so. The Court therefore agreed with the motion judge that the appellants did not demonstrate that there was a “good arguable case” made out on the pleadings and or evidence filed on the motion. Nor did the demands of fairness, efficiency and justice augur in favour of the court in Ontario assuming jurisdiction over this claim, as the appellants did not demonstrate that Ontario should assume jurisdiction over any of the parties or any of the claims.

The Court did not agree that the motion judge improperly embarked on a “disguised, unrequested and premature Rule 20 and/or Rule 21 motion.” The threshold posed by a “good arguable case” is commensurate with a genuine issue to be tried and is a higher threshold than the plain and obvious standard applied on a Rule 21 motion.


Penate v Martoglio , 2024 ONCA 166

[Tulloch C.J.O., Lauwers and Paciocco JJ.A]

Counsel:

G. MacKenzie, B. MacKenzie, H.Y. Elmaleh, and J. Syrtash, for the appellants

C.B. Kuehl, A. Patenaude, and C. Moore, for the respondents A.M., G.L., and M.B. and D.B. as Executors of the Estate of D.M.

K. Byrick and V. Sjolin, for the respondents St. Michael’s Hospital, S.K-F., and M.G.

Keywords: Torts, Negligence, MedMal, Civil Procedure, Jury Trials, Discharge of Jury, Procedural and Natural Justice, Sufficiency of Reasons for Decision, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 108, OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2019 ONSC 3882, King v. Colonial Homes Ltd., [1956] S.C.R. 528, Kempf v. Nguyen, 2015 ONCA 114, R. v. Chouhan, 2021 SCC 26, Hunt (Guardian of) v. Sutton Group Incentive Realty Inc. (2002), 60 O.R. (3d) 665 (C.A.), St. Marthe v. O’Connor, 2021 ONCA 790, Vanderbeke v O’Connor, 2013 ONCA 665, Hamstra (Guardian ad litem of) v. British Columbia Rugby Union, [1997] 1 S.C.R. 1092, Landolfi v. Fargione (2006), 79 O.R. (3d) 767 (C.A.), Brochu v. Pond (2002), 62 O.R. (3d) 722 (C.A.), Groen v. Harris, 2010 ONCA 621, Placzek v. Green, 2012 ONCA 45, Lawson v. Lawson (2006), 81 O.R. (3d) 321 (C.A.), R. v. Sheppard, 2002 SCC 26, R. v. G.F., 2021 SCC 20, Bruno v. Dacosta, 2020 ONCA 602, Canadian Broadcasting Corporation Pension Plan v. BF Realty Holdings (2002), 214 D.L.R. (4th) 121 (Ont. C.A.), R. v. R.E.M., 2008 SCC 51, R. v. Sahdev, 2017 ONCA 900, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, R. v. Dinardo, 2008 SCC 24, Ghiassi v. Singh, 2017 ONSC 6541

facts:

The appellants sued the respondent hospital, physicians, and nurses for medical malpractice after the child appellant suffered a severe brain injury around the time of his birth. The appellants chose a jury trial. At the end of the trial, the trial judge decided to take away the appellants’ right to a jury trial and tried the case herself. She then ruled against the appellants and determined that they had failed to prove medical malpractice.

The trial judge released five-paragraph reasons for her decision to discharge the jury. Most of the decision comprised a block quote of the legal standard concerning counsel’s addresses to the jury from OZ Merchandising Inc. v. Canadian Professional Soccer League Inc. The reasons attached the respondents’ list of objections but did not explain which challenged comments were prejudicial and why. Despite this, in a paragraph that is an unattributed block quote from OZ Merchandising, the trial judge concluded that the appellants’ counsel made many improper comments that were cumulatively impossible to correct and required discharging the jury because any corrective instruction would have been “unwieldy and ineffective.”

The trial judge later dismissed the action. In her reasons for judgment, she found that the respondents neither caused the brain injury nor, aside from the doctor’s failure to document her actions, breached the standard of care. According to a chart provided by the appellants, whose accuracy the respondents did not seriously contest, more than 90% of her reasons were copied verbatim or substantially verbatim from the respondents’ submissions.

issues:

Did the trial judge err in not providing adequate reasons for her decision to take away their right to jury trial?

holding:

Appeal allowed.

reasoning:

Yes.

Subject to certain exceptions that were not at issue here, civil litigants in the Superior Court of Justice have a statutory right to trial by jury. Because of this right’s substantive nature and importance, trial judges should not lightly interfere with it; discharging the jury is a drastic remedy of last resort.

A trial judge’s decision to discharge a civil jury to remedy prejudicial conduct on the part of counsel during a trial is discretionary. The Court has adopted a two-step test to guide trial judges’ exercise of discretion. The trial judge must determine that: (1) counsel’s comments prejudiced the opposing party, and (2) the prejudice was so severe that issuing a corrective instruction to the jury would not cure it. In most cases, discharging the jury is not appropriate because the trial judge can instead issue an instruction correcting the prejudicial statements.

Appellate deference to the trial judge’s decision to discharge the jury requires adequate reasons. Adequate reasons are not merely a precondition for deference but are also a basic entitlement of every litigant. Providing adequate reasons also respects the dignity of losing litigants by demonstrating that the trial judge has considered their arguments and taken the time to explain why they lost, thereby increasing the likelihood that losing litigants will feel that they were treated fairly and appropriately. Reasons must explain why trial judges reached the decisions they did by addressing the parties’ key arguments and the key, live issues in the case and making any necessary findings concerning those issues.

The Court held that the trial judge in this case did not adequately explain her decision to take away the appellants’ right to a jury trial. While the trial judge concluded that the appellants’ counsel made improper comments to the jury that could not be corrected, she neither explained which comments were improper and why, nor why directing the jury to disregard any improper comments would have been insufficient. The trial judge also did not address the appellants’ key arguments concerning prejudice. The trial judge’s bare conclusion that the closing contained many prejudicial comments did not provide responsive reasons demonstrating that she listened to the appellants’ arguments.

The Court did not agree with the respondents that the Court could salvage the trial judge’s decision by reviewing the record because the record did not sufficiently clarify the decision or make it comprehensible.

The trial judge’s inadequate reasons prevented the Court from meaningfully reviewing whether her decision to discharge the jury was proper. Because trial by jury is a fundamental right and the Court was not convinced that the jury would have inevitably rejected the appellants’ medical malpractice claims as the trial judge did, the Court ordered a new trial.



SHORT CIVIL DECISIONS

Yan v. Hutchinson, 2024 ONCA 158

[Feldman, Lauwers and Roberts JJ.A.]

Counsel:

N.X.Y, acting in person

A. LeDrew and C. Breukelman, for the respondents, Greg Hutchinson and Shanna Christine Yee

G. Hnatiw and L. Snowdon, for the respondents, Rebecca Catherine Durcan, Maya Pearlston, Erica Richler and Robin Kenneth McKechney

I. Sinke, for the respondent, Edward Lawrence Marrocco

Keywords: Costs

One Clarendon Inc. v. Finlay , , 2024 ONCA 153

[Feldman, Benotto and Roberts JJ.A.]

Counsel:

K.F. and J.F., appellants acting in person

S. Sood and M. Helfand, for the respondent

Keywords: Real Property, Residential Tenancies, Rent, Arrears, Civil Procedure, Costs

Bouragba v. Conseil des écoles publiques de l’Est de l’Ontario , 2024 ONCA 140

[Lauwers, Paciocco and Thorburn JJ.A.]

Counsel:

A.B., acting in person

G. Therrien, for the moving parties Ottawa-Carleton District School Board and Kevin Gilmore

E. Mogil, for the moving parties Paul Marshall, Richard Lewko and Ontario College of Teachers

J. Claydon, for the moving parties Ontario Ministry of Education and Denis Chartrand

P. Marshall, for the moving parties Conseil scolaire de district catholique de l’Est de l’Ontario, Conseil des écoles publiques de l’Est de l’Ontario, and Ottawa Catholic School Board

Keywords: Civil Procedure, Amending Pleadings, Appeals, Perfection, Vexatious Litigation, Rules of Civil Procedure, R 2.1.01, 61.06, 61.13

Molani Estate, 2024 ONCA 163

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

Counsel:

T. Arndt, for the appellants

P. Mann and A. Ottaviano, for the respondents The Estate of YYY
and XXX

V. Pileggi, for the respondent Ukraine International Airlines PJSC/Ukraine International Airlines

Keywords: Costs

Geng v. Cao, 2024 ONCA 169

[Pepall, George and Dawe JJ.A.]

Counsel:

R. He, for the appellant

J. Li, for the respondent

Keywords: Family Law, Civil Procedure, Summary Judgment, Fresh Evidence, Palmer v The Queen, [1980] 1 SCR 759


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

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

Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of February 19, 2024.

Continue Reading

In Shannon v Hrabovsky, a successful will-challenge case, the Court confirmed that the two-year limitation period to challenge a will starts to run from when the disappointed beneficiary applicant first obtained a copy of the will that disinherited them.

Wu v Suevilia Development Corporation interprets the notice provisions for the unilateral change of closing dates imposed by builders under the Tarion Addendum to agreements of purchase and sale of new-build homes. In this case, the buyer was not able to avoid the forfeiting of their substantial deposit.

In Los v Ross, the Court upheld the motion judge’s determination that the court had jurisdiction over a parenting dispute between a couple that lived in Montreal and whose child was born and raised there for the first six months of the child’s life. After the parties separated, the mother moved to Ontario with the child to live with her parents, with the father’s acquiescence. This acquiescence, over a period of about five months, was sufficient to support a finding that the child was habitually resident in Ontario and therefore the Ontario court had jurisdiction to determine the issues of parenting and child support.

In Gill v. Maciver, the Court a doctor sued various other doctors and other individuals over social media criticism of the doctor’s stance towards the government’s response to the COVID-19 pandemic. The motion judge dismissed the claims under the anti-SLAPP provisions of s. 137.1 of the Courts of Justice Act. The criticisms of the doctor’s stance were commentaries on matters of public interest and protected by the defence of fair comment. The Court dismissed the appeal.

In Rimon v. CBC Dragon Inc., the Court upheld the motion judge’s dismissal of the appellants’ defence and counterclaim for failure to answer undertakings and produce documents.

In 8167800 Canada Inc (Lead Home Renovation) v Denison Limited, the appellant was successful in obtaining relief from forfeiture. However, in granting that relief, the motion judge found that the appellant had been manufacturing kitchen cabinets in breach of the use clause in the lease. The appellant was ordered to cease breaching the use clause and appealed that aspect of the order. The appeal was dismissed.

In 2682283 Ontario Ltd (Volcano Café and Lounge) v. Durham (Regional Municipality), the appellant, a hookah lounge, was unsuccessful in challenging a municipal smoking and vaping by-law enacted by Durham Region. The decision primarily discusses the authority of the Regional Senior Justice of the Ontario Court of Justice under the Provincial Offences Act to set fines for the breach of the by-law.

Other topics this week included a fee dispute between lawyer and client dressed up as a claim in negligence, and the dismissal of another claim against a lawyer as frivolous and vexatious.

Wishing everyone a nice weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Shannon v. Hrabovsky, 2024 ONCA 120

Keywords: Wills and Estates, Capacity, Suspicious Circumstances, Civil Procedure, Limitation Periods, Discoverability, Appeals, Fresh Evidence, Limitations Act, 2002, SO 2002, c 24, Sched B, s 4, 5(1)(a)(iv)(2), Courts of Justice Act, RSO 1990, c C 43, s 134(1), Rules of Civil Procedure, r 4.06(2), St. Amand v Tisi, 2018 ONCA 106, Palmer v The Queen, [1980] 1 SCR 759, Levy v Fitzgerald, 2012 ONSC 2105, 27 C.P.C. (7th) 225, Dean v Mister Transmission (International) Limited, 2010 ONCA 443, Iroquois Falls Power Corporation v Ontario Electricity Financial Corporation, 2016 ONCA 271, Barendregt v Grebliunas, 2022 SCC 22, Benhaim v St-Germain, 2016 SCC 48, South Yukon Forest Corp. v R., 2012 FCA 165, Grant Thornton LLP v New Brunswick, 2021 SCC 31, Leibel v Leibel, 2014 ONSC 4516, Birtzu v McCron, 2017 ONSC 1420, Sengmueller v Sengmueller (1994), 17 OR (3d) 208 (CA), Vout v Hay, [1995] 2 SCR 876, Scott v Cousins (2001), 37 ETR (2d) 113 (Ont SC), Stekar v Wilcox, 2017 ONCA 1010, Waxman v Waxman (2004), 186 OAC 201 (CA)

Wu v. Suevilia Development Corporation, 2024 ONCA 124

Keywords: Contracts, Interpretation, Standard of Review, Real Property, Agreements of Purchase and Sale of Land, New Homes, Tarion Addendum, Ontario New Home Warranties Plan Act, RSO 1990, c O 31, O Reg 165/08, Warranty For Delayed Closing or Delayed Occupancy, s 7, O Reg 273/04, Designation of CorporationReddy v 1945086 Ontario Inc., 2019 ONSC 2554, Canadian Imperial Bank of Commerce v Urbancorp (Leslieville) Developments Inc., 2020 ONCA 449, Housen v Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, Ontario New Home Warranty Program v Lukenda (1991), 2 OR (3d) 675 (CA), Wong v Greyrock (Saddlebrook) Building Corp. (1993), 34 RPR (2d) 215 (Ont Gen Div)

Los v. Ross, 2024 ONCA 122

Keywords: Family Law, Parenting, Child Support, Civil Procedure, Jurisdiction, Children’s Law Reform Act, R.S.O. 1990, c. C.12,s.22(2), Dovigi v. Razi, 2012 ONCA 361, Zafar v. Azeem, 2024 ONCA 15, Office of the Children’s Lawyer v. Balev, 2018 SCC 16

Gu v. Huang, 2024 ONCA 129

Keywords: Contracts, Solicitor and Client, Torts, Professional Negligence, Breach of Fiduciary Duty, Standard of Care, Civil Procedure, Security for Costs, Rules of Professional Conduct

Regan v. Esterbauer, 2024 ONCA 139

Keywords: Contracts, Solicitor and Client, Torts, Professional Negligence, Civil Procedure, Striking Pleadings, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, r. 21.01(3)(d), Lang Michener LLP v King, 2017 ONSC 1917

Gill v. Maciver, 2024 ONCA 126

Keywords: Torts, Defamation, Constitutional Law, Freedom of Speech, Civil Procedure, Anti-SLAPP, Courts of Justice Act, R.S.O. 1990 C. c.43, s.137.1, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Bent v. Platnick, 2020 SCC 23, Hansman v. Neufeld, 2023 SCC 14, Levant v. DeMelle, 2022 ONCA 79, Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129

Rimon v. CBC Dragon Inc., 2024 ONCA 128

Keywords: Civil Procedure, Documentary and Oral Discovery, Orders, Enforcement, Striking Pleadings, Rules of Civil Procedure, Rules 30.08, 60.12, Bottan v. Vroom, 2002 CanLII 41691 (Ont. C.A.), Aslezova v. Khanine, 2023 ONCA 153, Newlove v. Moderco Inc., 2002 CanLII 34748 (Ont. S.C.), Falcon Lumber Limited. v. 24803375 Ontario Inc., 2020 ONCA 310

8167800 Canada Inc (Lead Home Renovation) v Denison Limited, 2024 ONCA 146

Keywords: Contracts, Real Property, Commercial Leases, Permitted Uses, Assignments, Equitable Remedies, Relief from Forfeiture, Civil Procedure, Reasonable Apprehension of Bias, Costs, Hamilton v Open Window Bakery Ltd, 2004 SCC 9

2682283 Ontario Ltd (Volcano Café and Lounge) v. Durham (Regional Municipality) , 2024 ONCA 132

Keywords: Municipal Law, By-laws, Health, Business Regulation, Municipal Act, 2001, S.O. 2001, c. 25, s. 115(1), 115(5), 273, Durham Region Smoking By-Law No. 28-2019, s. 10.1, 11.1, Provincial Offences Act, R.S.O. 1990, P.33, ss. 3, 5, 21, 91.1(2), Health Protection and Promotion Act, R.S.O. 1990, c. H.7, Rules of the Ontario Court (Provincial Division) in Provincial Offences Proceedings, R.R.O. 1990, Reg. 200, Courts of Justice Act, R.S.O. 1990, c. C.43, Foley v. St. Mary’s (Town), 2016 ONCA 528, Sheilagh Stewart and Jane Moffatt, Stewart & Moffatt on Provincial Offences Procedure in Ontario, 4th ed. (Salt Spring Island: Earlscourt Legal Press Inc., 2020)

Short Civil Decisions

Sokil v. Buffone, 2024 ONCA 127

Keywords: Wills and Estates, Civil Procedure, Contempt, Appeals, Stay Pending Appeal, Costs, Succession Law Reform Act, R.S.O. 1990, c. S.26, Part II, Brad-Jay Investments Limited v. Village Developments Limited (2006), 2006 CanLII 42636 (ON CA), leave to appeal refused, [2007] S.C.C.A. No. 92

9806881 Canada Corp. v. Swan, 2024 ONCA 133

Keywords: Civil Procedure, Costs

Lengyel v. Public Guardian and Trustee, 2024 ONCA 130

Keywords: Civil Procedure, Appeals


CIVIL DECISIONS

Shannon v. Hrabovsky, 2024 ONCA 120

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

N. Ronski, for the appellants

V. Msi, for the respondent

Keywords: Wills and Estates, Capacity, Suspicious Circumstances, Civil Procedure, Limitation Periods, Discoverability, Appeals, Fresh Evidence, Limitations Act, 2002, SO 2002, c 24, Sched B, s 4, 5(1)(a)(iv)(2), Courts of Justice Act, RSO 1990, c C 43, s 134(1), Rules of Civil Procedure, r 4.06(2), St. Amand v Tisi, 2018 ONCA 106, Palmer v The Queen, [1980] 1 SCR 759, Levy v Fitzgerald, 2012 ONSC 2105, 27 C.P.C. (7th) 225, Dean v Mister Transmission (International) Limited, 2010 ONCA 443, Iroquois Falls Power Corporation v Ontario Electricity Financial Corporation, 2016 ONCA 271, Barendregt v Grebliunas, 2022 SCC 22, Benhaim v St-Germain, 2016 SCC 48, South Yukon Forest Corp. v R., 2012 FCA 165, Grant Thornton LLP v New Brunswick, 2021 SCC 31, Leibel v Leibel, 2014 ONSC 4516, Birtzu v McCron, 2017 ONSC 1420, Sengmueller v Sengmueller (1994), 17 OR (3d) 208 (CA), Vout v Hay, [1995] 2 SCR 876, Scott v Cousins (2001), 37 ETR (2d) 113 (Ont SC), Stekar v Wilcox, 2017 ONCA 1010, Waxman v Waxman (2004), 186 OAC 201 (CA)

facts:

The testator A.H. (the “testator”), who died in November 2014, had two adopted children: G.S., who is the respondent in this appeal, and G.H., who is one of the two appellants. The second appellant, M.H., is the testator’s brother.

In April 2002 the testator executed a last will and testament (the “2002 Will”) which left equal bequests of ten percent of the residue of his estate to G.S and G.H’s children and divided the remainder equally between G.S. and G.H. In November 2006 the testator executed a new will (the “2006 Will”) which was even more favourable to G.S. In July 2007, the testator executed another will (the “2007 Will”) which disinherited G.S. and removed her as an executor.

After the testator’s death in November 2014, G.S. commenced an application in which she challenged the validity of the 2007 Will, contending that the testator had lacked testamentary capacity when he made it.

The application judge granted the application, set aside the 2007 Will, and restored the 2006 Will as the testator’s true last will and testament. However, he did not give effect to G.S’s alternative argument that the testator had been subject to undue influence from G.H. when he made the 2007 Will.

issues:
  1. Did the application judge err in not finding that G.S’s application was statute-barred by the two year limitation period and should fresh evidence be allowed to establish that ground of appeal?
  2. Did the application judge err by giving insufficient weight to the evidence supporting the appellants’ position that the testator had testamentary capacity when he made the 2007 Will and should fresh evidence be allowed to establish that ground of appeal?
holding:

Appeal and motion to adduce fresh evidence dismissed.

reasoning:
  1. No.

The appellants’ first ground of appeal took issue with the application judge’s conclusion that G.S’s challenge to the validity of the 2007 Will was not statute-barred. They argued that the two-year limitation period began to run on the date of the testator’s death. The application judge disagreed, finding that the principle of discoverability delayed the commencement of the running of the two years to more than two years from the testator’s death, as G.S. had not discovered the 2007 Will until January 2015.

Proposed Fresh Evidence

The appellants sought to adduce fresh evidence in the form of a new affidavit by the lawyer who executed the testator’s 2007 Will, Ms. Woodruff, which appends as an exhibit a letter that the lawyer received from another who was acting for G.S., Mr. Pease (the “Pease letter”).

The appellants argued that the Pease letter contradicted G.S’s 2016 affidavit, because it showed that she learned about the existence of the 2007 Will in a telephone conversation with Ms. Woodruff at some point before December 16, 2014.

The principles governing the admission of fresh evidence in civil appeals were summarized as follows by this court in St. Amand v. Tisi:

The party seeking to introduce the fresh evidence must show that the proposed evidence:

  • Is credible;
  • Could not have been obtained by reasonable diligence before trial or application; and
  • If admitted, would likely be conclusive of an issue in the appeal.

The overriding criterion is that fresh evidence will be admitted only where it is in the interests of justice to do so.

In the Court’s view, the fresh evidence in Ms. Woodruff’s 2019 affidavit bearing on the limitations issue, including the appended Pease letter, failed to meet the last two prongs of the test.

Reasonable Diligence

The appellants did not meet their burden of demonstrating that they could not have put the Pease letter or Ms. Woodruff’s evidence bearing on the limitations issue into evidence on the application if they had exercised reasonable diligence.

Impact on issue in the appeal – Not conclusive of the limitation period issue

The Court was also satisfied that the Pease letter and Ms. Woodruff’s proposed fresh evidence regarding her communications with G.S. and her lawyer after the testator’s death would not be conclusive on the issue of whether G.S’s application was statute-barred. Under ss. 5(1)(a)(iv) and 5(1)(b) of the Limitations Act, 2002, the limitations clock only starts to run once the litigant first knew, or a reasonable person with the abilities and in the circumstances of the litigant ought to have known, “that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it”. It was open to the application judge to conclude that it would have been premature for G.S to have started legal proceedings to challenge the 2007 Will until she received a copy of it and could examine its terms.

The appellants argued that the Court should conclude that Ms. Woodruff gave G.S. specific information about the terms of the 2007 Will during their telephone conversation that preceded the Pease letter. The Court did not give effect to this argument for four main reasons:

  • The appellants’ factual claims about what Ms. Woodruff told G.S during their telephone conversation were unsupported by any evidence to this effect from Ms. Woodruff.
  • If the appellants were to seek to support their factual claims about what Ms. Woodruff told G.S during their telephone conversation by presenting a new affidavit from Ms. Woodruff, they would run into the same problem already discussed: namely, their inability to explain why they did not put this evidence before the application judge.
  • Even if Ms. Woodruff did say things to G.S during their telephone conversation that either informed G.S or implied to her that she was not a beneficiary under the 2007 Will, the Court was not satisfied that this information would have been sufficient to allow G.S to decide whether litigation to challenge the will’s validity was “appropriate”.
  • S’s uncontradicted evidence is that she only decided to challenge the 2007 Will after she obtained a copy of it and saw that the will not only disinherited her, but also would have eliminated her children’s contingent interest in the residue of the estate if G.H. had died before the testator.

The limitation clock in the case at bar only began to run as of the January 2015 deadline that Mr. Pease set in his letter to Ms. Woodruff, and that he later extended.

The Court was satisfied that even if the Pease letter had been put before the application judge, it would not have changed his conclusion that the limitation clock did not start to run until January 2015, and that G.S’s application was accordingly not statute-barred. If the Pease letter were admitted as fresh evidence, it would not “likely be conclusive” on the limitations issue.

The Court refused to admit the Pease letter and Ms. Woodruff’s 2019 affidavit evidence about her communications with G.S and her lawyer as fresh evidence on appeal.

  1. No.

The appellants’ second ground of appeal was that the application judge erred by finding that the testator did not have testamentary capacity when he executed his disputed 2007 Will. They also sought to support this ground of appeal with fresh evidence from Ms. Woodruff.

The appellants maintained that the testator changed his will in 2007 to disinherit G.S. because he was angry with her over an incident when she had allegedly put charges on his credit card without his permission.

The application judge held in accordance with the legal authorities that G.S. bore the initial burden of introducing “evidence of suspicious circumstances”. The application judge concluded that G.S. had met her threshold burden, identifying “a number of suspicious circumstances that collectively suggest that the Testator lacked testamentary capacity when he executed the 2007 Will”. The application judge’s finding that there were “suspicious circumstances” shifted the burden back to the appellants to prove on a balance of probabilities that the testator had had the necessary testamentary capacity when he signed the 2007 Will. The application judge held that the appellants had not met this burden.

Proposed Fresh Evidence

The appellants sought to adduce as fresh evidence a further affidavit from Ms. Woodruff that she swore in April 2019, several months after the application judge’s decision. Her affidavit indirectly challenged the application judge’s conclusion that the testator’s decision to disinherit G.S. was “inexplicable and out of character”.

This proposed fresh evidence from Ms. Woodruff failed the second and third prong of the test for admitting fresh evidence in civil appeals, summarized above.

Reasonable Diligence

The appellants did not provide any explanation as to why the additional evidence in Ms. Woodruff’s April 2019 affidavit was not put before the application judge.

Impact on issue in the appeal – Not conclusive of an issue in the appeal

The Court was not satisfied that the proposed fresh evidence, if admitted, “would likely be conclusive of an issue in the appeal”.

Although there was evidence that the testator had been diagnosed with “mild dementia” in September 2005, nobody was suggesting that it was proved that he had lacked testamentary capacity before 2007.

The proposed fresh evidence in Ms. Woodruff’s 2019 affidavit about the circumstances in which the testator signed the 2007 Will largely covered the same ground as her 2017 affidavit and the transcript of her cross-examination on this affidavit. As the application judge noted in his reasons, Ms. Woodruff’s evidence was that she had “interviewed [the testator] alone” and been “fully satisfied that he was giving me his clear instruction and that he did not exhibit any impairment of testamentary capacity”. All that Ms. Woodruff’s 2019 affidavit did was to expand on her confidence in the correctness of her opinion. To the extent that the fresh evidence might have shown that the application judge made errors of fact, the Court was satisfied that any such errors were not “overriding”.

The Court was not prepared to admit the appellants’ proposed fresh evidence. The interests of finality weighed strongly against its admission, given the appellants’ complete failure to explain why this evidence, all of which was or could easily have been known to them at the time of the application, was not put before the application judge.


Wu v. Suevilia Development Corporation, 2024 ONCA 124

[Simmons, Paciocco and Thorburn JJ.A.]

Counsel:

P. H. Starkman, for the appellant

P. K. Martin, for the respondent

Keywords: Contracts, Interpretation, Standard of Review, Real Property, Agreements of Purchase and Sale of Land, New Homes, Tarion Addendum, Ontario New Home Warranties Plan Act, RSO 1990, c O 31, O Reg 165/08, Warranty For Delayed Closing or Delayed Occupancy, s 7, O Reg 273/04, Designation of CorporationReddy v 1945086 Ontario Inc., 2019 ONSC 2554, Canadian Imperial Bank of Commerce v Urbancorp (Leslieville) Developments Inc., 2020 ONCA 449, Housen v Nikolaisen, 2002 SCC 33, Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, Ontario New Home Warranty Program v Lukenda (1991), 2 OR (3d) 675 (CA), Wong v Greyrock (Saddlebrook) Building Corp. (1993), 34 RPR (2d) 215 (Ont Gen Div)

facts:

The appellant, Z.W., agreed to purchase a pre-construction home from Suevilia Development Corporation under an agreement of purchase and sale (the “APS”). Because the APS related to the sale of a pre-construction home, Suevilia was required by O. Reg. 165/08 to attach the Tarion Addendum to the APS. The Tarion Addendum establishes procedures for setting and changing closing dates under the APS.

Under the terms of the Tarion Addendum, at the time the APS is signed, the Vendor must specify a First Tentative Closing Date in a Statement of Critical Dates. Thereafter, the Vendor has the option of unilaterally delaying Closing on up to two occasions for periods of up to 120 days each by setting a Second Tentative Closing Date and/or a Firm Closing Date. To do so, the Vendor must give written notice to the Purchaser at least 90 days prior to the immediately preceding properly set closing date. As required under the Tarion Addendum, Suevilia identified July 31, 2018, as the First Tentative Closing Date. About two months after the APS was signed, on May 30, 2017, Mr. W asked that the “Closing Date” be amended to May 31, 2018. Suevilia agreed.

The parties signed a new Statement of Critical Dates advancing the First Tentative Closing Date from July 31, 2018, to May 31, 2018, and also advancing the outer limits for the Second Tentative Closing Date, Firm Closing Date and Outside Closing Date established in the original Statement of Critical Dates.

Suevilia took the position that it subsequently sent notices to Mr. W setting a Second Tentative Closing Date, a Firm Closing Date, and two Delayed Closing Dates. Mr. W, took the position that the notices sent by Suevilia were defective, either because they did not specify which Critical Date they were setting, did not provide proper notice, did not include a revised Statement of Critical Dates and/or because they did not refer to entitlement to delayed closing compensation.

Mr. W maintained that because of the deficiencies in the notices, in accordance with the terms of the Tarion Addendum, the First Tentative Closing Date was deemed to be the Firm Closing Date, and that the other closing dates Suevilia purported to set, including the December 18, 2018 closing date, were not properly set. He submitted that Suevilia therefore repudiated the APS by serving its notice of default, and that Suevilia also breached the terms of the APS by failing to pay delayed closing compensation.

In January 2019, Suevilia commenced an action against Mr. W claiming forfeiture of the deposit and damages for its losses in reselling the property. Mr. W sued Suevilia for, among other things, return of his $300,000 deposit. Mr. W moved for summary judgment in both actions, seeking dismissal of Suevilia’s action and the return of his deposit. The motion judge dismissed both of Mr. Wu’s motions and ordered that the deposit be forfeited to Suevilia since Suevilia complied with the necessary timelines for giving notice and it was obvious in each instance which Critical Date was being set. Further, it was apparent from the record that Mr. W had not taken any steps toward closing the transaction.

issues:
  1. Did the motion judge err in concluding that Suevilia’s notices to set Critical Dates complied with the Tarion Addendum?
  2. Did the motion judge err in finding that Suevilia was ready, willing and able to close the transaction on December 18, 2018?
  3. Did the motion judge err in finding that Delayed Closing Compensation was not payable to Mr. Wu?
  4. Did the motion judge err in finding that Mr. W forfeited his deposit?
holding:

Appeal dismissed.

reasoning:
  1. No.

On May 30, 2017, Mr. W sent a letter to Suevilia requesting Suevilia “to amend the Closing Date to May 31, 2018. Suevilia agreed and the parties executed an undated revised Statement of Critical Dates, which, among other things, advanced the First Tentative Closing Date to May 31, 2018, and reduced the outer limits for the other Critical Dates.

The respondent subsequently sent written notices to Mr. W delaying various closing dates and, ultimately, setting the December 18, 2018 closing date. On December 17, 2018, Suevilia sent an email reminder to Mr. W of the impending December 18, 2018 closing date. Suevilia did not receive a response to its December 17, 2018 email within the specified timeframe. Suevilia served a Certificate of Default on Mr. W on January 7, 2019 and subsequently resold the home in April 2019. As noted above, Mr. W took the position that the notices sent by Suevilia were defective.

In Canadian Imperial Bank of Commerce v. Urbancorp (Leslieville) Developments Inc, the Court of Appeal identified the standard of review for interpretation of the Tarion Addendum as correctness. Questions of fact and questions of mixed fact and law are reviewable on a standard of palpable and overriding error. In the Court’s view, the motion judge made no error in holding that Suevilia’s February 26, 2018 notice, setting a “new Tentative Closing Date”, operated to set August 30, 2018 as the “Second Tentative Closing Date”. Section 1 therefore did not operate to deem May 31, 2018 as the Firm Closing Date. Consequently, the Court rejected the argument that the notice periods for Suevilia’s subsequent notices should have been calculated with reference to May 31, 2018. Under both paragraph 1 of the Tarion Addendum and the terms of the revised Statement of Critical Dates signed by the parties after Mr. W’s May 30, 2017 request to change the “Closing Date” to May 31, 2018, the only Tentative Closing Date the Vendor was entitled to set unilaterally by written notice following execution of the APS, was the Second Tentative Closing Date. As the motion judge held, it would have been patently obvious that, in stating it was setting a “new Tentative Closing Date”, Suevilia could only have been referring to setting the “Second Tentative Closing Date” as permitted under the Tarion Addendum.

The Court also agreed with the motion judge that Suevilia was not required to send a revised Statement of Critical Dates to Mr. W when sending its notices postponing Critical Dates. The Tarion Addendum explicitly required that a revised Statement of Critical Dates be prepared where the parties make changes to Critical Dates by mutual agreement under s. 4. There was no similar requirement in ss. 1 or 3, which address setting Tentative Closing Dates and the Firm Closing.

The Court also viewed that the “Note” set out at the bottom of the Statement of Critical Dates signed by the parties following Mr. W’s request to change the “Closing Date”, made it clear that, when a Critical Date is set or changed as permitted in the Addendum, it was the responsibility of both the Vendor and the Purchaser to calculate resulting changes in other Critical Dates. Thus, the Court rejected Mr. W’s argument that all of Suevilia’s notices were invalid because they did not include a revised Statement of Critical Dates.

So long as the written notice complies with the deadlines specified in the Tarion Addendum and the circumstances make it obvious which Critical Date is being set or changed by a notice, a failure to use the precise nomenclature identified in the Tarion Addendum should not in itself invalidate the notice.

Where timely notice is provided and it is obvious from the circumstances which Critical Date a Vendor is purporting to set, invalidating a notice because of an obvious nomenclature flaw would undermine the goals of providing fairness to both builders and purchasers and of recognizing the inevitability of certain delays in new home construction. Purchasers have an obligation to acquaint themselves with the scheme of, and formula for, setting Critical Dates. While Vendors have an obligation under para. 1(e) of the Tarion Addendum, to “set out the stipulated Critical Date, as applicable”, when giving a notice setting a Second Tentative Closing Date or Firm Closing Date, under para. 1(c) or (d), minor failures in nomenclature that do not create uncertainty about the Critical Date being set should not invalidate a timely notice.

  1. No.

Given that the Court rejected the argument that the December 18, 2018 closing date was not properly set, Mr. W’s argument that the motion judge erred in finding that Suevilia was ready, willing and able to close on December 18, 2018 turned on whether the motion judge erred in finding that it was Mr. W’s obligation under the APS to obtain the occupancy permit.

The motion judge relied on s. 9(a) of the APS to hold that it was Mr. W’s obligation to obtain the occupancy permit. Section 9(a) of the APS stipulated that unless otherwise required by the Municipality, it was the Purchaser’s obligation to obtain any occupancy permit from the Municipality.

There was no evidence that the Municipality required the Vendor to obtain the occupancy permit. Section 9 of the Tarion Addendum also addressed who had the obligation to provide an occupancy permit. Although it stipulated that the Vendor shall deliver an occupancy permit to the Purchaser prior to closing, it also allowed for “Purchaser Occupancy Obligations” to be created by mutual agreement.

The motion judge concluded that s. 9(b) of the Tarion Addendum permitted the parties to agree that Mr. W was “responsible for one or more prerequisites to obtaining permission for occupancy under the Building Code” and that, by s. 9(a) of the APS, they had placed the obligation on him to obtain the occupancy permit. She concluded that because s. 9(b) of the Tarion Addendum permitted the parties to make the purchaser responsible for such prerequisites to occupancy, s. 9(a) of the APS requiring the purchaser to obtain the occupancy permit, was not inconsistent with the Tarion Addendum.

In the Court’s view, the motion judge was correct in holding that s. 9(a) of the APS was not inconsistent with s. 9 of the Tarion Addendum. While s. 9(a) of the Tarion Addendum required the Vendor to deliver the occupancy permit, s. 9(b) contemplated the parties agreeing that the Purchaser would be responsible for one or more prerequisites to obtaining permission for occupancy under the Building Code. Based on my review of the APS and the Tarion Addendum it was difficult to understand what that could entail, other than obtaining the occupancy permit.

3 and 4. Not necessary to address

There was no need to address the remaining grounds of appeal. Under the Tarion Addendum, delayed closing compensation was payable only if the transaction closes or if it fails to close for any reason other than breach of contract by the Purchaser. The transaction did not close due to Mr. W’s default. In light of these circumstances, the Court saw no error in the motion judge’s conclusion that Mr. W forfeited his deposit.


Los v. Ross, 2024 ONCA 122

[van Rensburg, Roberts and Favreau JJ.A.]

Counsel:

S. Galarneau and B. Sharpe, for the appellant

I. Marcovitch, for the respondent

Keywords: Family Law, Parenting, Child Support, Civil Procedure, Jurisdiction, Children’s Law Reform Act, R.S.O. 1990, c. C.12,s.22(2), Dovigi v. Razi, 2012 ONCA 361, Zafar v. Azeem, 2024 ONCA 15, Office of the Children’s Lawyer v. Balev, 2018 SCC 16

facts:

Since November 2020, the parties lived together in Montreal, Quebec, where they had one child, who was born in Montreal in August 2021. In February 2022, after a dispute between the parties, the mother left Montreal with the child to go live with her parents in Ottawa.

Toward the end of May 2022, the father went to a work camp for his employment for five weeks. The mother was unable to get a hold of the father, despite it being possible for him to communicate. The child was with the mother in Ontario throughout this time.

On July 27, 2022, the mother commenced an application in the Superior Court in Ontario, seeking primary parenting time and sole decision-making responsibility for the child. She also sought child support.

The father brought an urgent motion challenging the Ontario court’s jurisdiction. However, the Superior Court declined to hear the motion on the basis that it was not urgent. At a subsequent case conference, the court scheduled the motion for jurisdiction to be decided as a preliminary matter. The motion judge dismissed the father’s motion challenging jurisdiction. The motion judge determined that the child was habitually resident in Ontario with the implied consent or acquiescence of the father.

issue:

Did the motion judge err in finding that the father tacitly consented or acquiesced to the child’s move to Ontario?

holding:

Appeal dismissed.

reasoning:

No.

Although the motion judge erred in considering the father’s actions following the commencement of the application, including the interim consent parenting order, it did not affect the overall conclusion that the father tacitly consented or acquiesced to the child’s move to Ontario.

Section 22(1)(a) of the Children’s Law Reform Act explicitly provides that the Ontario court has jurisdiction if “the child is habitually resident in Ontario at the commencement of the application for the order”. Implicitly, this meant that the father’s conduct following the beginning of the application was presumptively not relevant to the determination. Conversely, as in this case, consent to an interim parenting order should not prejudice a parent contesting jurisdiction as this could have significant consequences on that parent’s parenting time pending the determination of a jurisdiction motion.

The consent order was only one of several factors the motion judge relied on in reaching her conclusion that the father tacitly consented or acquiesced to the child’s habitual residence in Ontario.

Many factors supported the motion judge’s finding, including her finding that the child had been living primarily with her mother in Ottawa since at least mid-May 2022, that the father left for five weeks without providing accurate information about his whereabouts or how he could be contacted, and that he did not object to or take the position that the child should remain in Montreal until after the mother commenced her application seeking sole custody and parental decision-making. Regardless of the error regarding the consent order, these circumstances were sufficient to support the motion judge’s finding that the father tacitly consented or acquiesced to the child’s move to Ottawa and that the child was therefore habitually resident in Ontario.


Gu v. Huang, 2024 ONCA 129

[Simmons, Thorburn and Favreau JJ.A.]

Counsel:

R. He, for the appellants

M. Kestenberg, for the respondents

Keywords: Contracts, Solicitor and Client, Torts, Professional Negligence, Breach of Fiduciary Duty, Standard of Care, Civil Procedure, Security for Costs, Rules of Professional Conduct

facts:

The appellants sued Ms. H for negligence, breach of fiduciary duty, and breach of contract for her legal services provided from December 2016 to August 2017, claiming she failed to proceed promptly with necessary motions, incurred unnecessary costs, and terminated her retainer unprofessionally. In July 2016, the appellants discovered a certificate of pending litigation against a property they owned and were sued by two Chinese companies. Ms. H was retained in December 2016 to bring motions, including for security for costs. In January 2017, she attended court to proceed with these motions, but faced adjournments and scheduling changes. By July 2017, some motions were resolved in the appellants’ favor, but the litigation’s financial burden led to a significant legal bill from Ms. H’s firm totaling $240,291.55.

The trial judge rejected the appellants’ claims that Ms. H was negligent in her handling of the CPL, set aside, security for costs and Mareva injunction motions. Their action was dismissed.

issues:
  1. Did the trial judge err in fundamentally misconstruing the nature of the action as merely a fee dispute?
  2. Did the trial judge err in failing to find that Ms. H breached her contract by not proceeding with the motions, particularly the security for costs motion, in a timely manner and that Ms. H was not negligent in handling the appellants’ motions?
  3. Did the trial judge err in determining that expert evidence was necessary to address the standard of care regarding Ms. H’s handling of the offer to settle the security for costs motion and that she had no jurisdiction to decide violations of the Rules of Professional Conduct?
  4. Did the trial judge err in awarding the respondents costs in the amount of $80,000?
holding:

Appeal dismissed.

reasoning:
  1. No.

The Court found that Ms. H was successful in her conduct of the litigation on behalf of the appellants. Although the trial judge commented that the action was a fee dispute cloaked as a negligence action, the court was satisfied that she fully and fairly considered all of the appellants’ arguments. The foregoing chronology and the trial judge’s reasons demonstrated that she carefully and accurately reviewed the events that led to the various motions being adjourned and eventually determined. The Court saw no palpable and overriding error or error in principle in the trial judge’s findings.

  1. No.

The Court saw no basis for interfering with the trial judge’s conclusion that Ms. H was not at fault for the delay that occurred in determining the appellants’ motions that were originally scheduled for January 17, 2017. The presiding judge on that day accepted that cross-examinations were required and took charge of determining the order in which the additional motions would be heard. Further, the Court agreed with the trial judge that Ms. H could not be faulted for the fact that different judges subsequently took different views of who should hear the various motions.

The Court noted that it was not possible for Ms. H to serve the security for costs motion until after the noting in default had been set aside. She moved promptly to do so once that order was obtained. The Court was not persuaded that Ms. H contributed to any delay in that motion being heard.

  1. No.

The Court saw no error in the trial judge’s conclusion that expert evidence was required to determine the standard of care in relation to the appellants’ claims about the Chinese companies’ offer to settle the security for costs motion. The Court was not persuaded that the trial judge made any error in concluding that failing to provide an affidavit in relation to the security for costs motion could be categorized as conduct that was clearly wrong or egregious. The trial judge concluded that the appellants’ remaining complaints related to professional conduct matters, none of which materially affected Ms. H’s delivery of services or caused them any damages in breach of contract or negligence.

  1. No.

The Court found that the appellants did not seek leave to appeal costs and were therefore not entitled to challenge the costs award made at trial.


Regan v. Esterbauer, 2024 ONCA 139

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

Counsel:

P. I. Waldmann, for the appellant

G. Tighe and K. Mooibroek, for the respondents A. J. E and Koskie Minsky LLP

Keywords: Contracts, Solicitor and Client, Torts, Professional Negligence, Civil Procedure, Striking Pleadings, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, r. 21.01(3)(d), Lang Michener LLP v King, 2017 ONSC 1917

facts:

R. R, a formerly licensed lawyer suspended by the Law Society of Ontario, started an action against A.E and his law firm, claiming $15 million in damages for negligent legal advice and ineffective assistance during contempt proceedings, which was dismissed as frivolous, vexatious, or an abuse of process. R.R was counsel in litigation involving the Business Development Bank of Canada, where he was ordered to provide document access but instead proposed withholding documents in exchange for outstanding legal fees, leading to a contempt motion against him. R.R retained the respondents on a limited retainer for the contempt motion defense, where a missing Undertakings and Refusals Chart crucial for demonstrating compliance was not included in the responding materials, resulting in R.R being found in contempt and sentenced to 90 days’ imprisonment, later reduced to 45 days on appeal.

issue:

Did the motion judge err in dismissing the action under r. 21.01(3)(d) of the Rules of Civil Procedure on the basis that it was frivolous, vexatious, or otherwise an abuse of process?

holding:

Appeal dismissed.

reasoning:

No.

The court rejected R.R’s argument that the respondent’s supposed missteps changed the outcome of the contempt finding and appellate decision, identifying the challenge as an impermissible collateral attack on judicial decisions. The motion judge’s findings emphasized that the respondents engagement was specifically limited to appearing at the hearing with materials prepared by R.R, highlighting R.R’s responsibility and experience in preparing the necessary legal documents. Furthermore, the motion judge determined that the omission of additional evidence by the respondents would not have altered the contempt finding, which was primarily based on Gray J.’s finding of collusion between R.R and his former client. The central issue of contemptuous collusion rendered any alleged procedural or evidentiary errors by the respondents irrelevant to the outcome, leading to the Court’s approval of the dismissal of R.R’s action.


Gill v. Maciver, 2024 ONCA 126

[Roberts, Paciocco and Monahan JJ.A.]

Counsel:

J. Saikaley and A. Brunet, for the appellant, Dr. G

H. Winkler and Eryn Pond, for the respondent, Dr. M

A. MacDonald, for the respondents, AP and CW

G. Pakozdi, for the respondent, AP

Keywords: Torts, Defamation, Constitutional Law, Freedom of Speech, Civil Procedure, Anti-SLAPP, Courts of Justice Act, R.S.O. 1990 C. c.43, s.137.1, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Bent v. Platnick, 2020 SCC 23, Hansman v. Neufeld, 2023 SCC 14, Levant v. DeMelle, 2022 ONCA 79, Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129

facts:

Dr. G. commenced proceedings against 23 individual and corporate defendants (the “Original Defendants”) for $12 million for defamation, conspiracy, and negligence. The claim against the Original Defendants was dismissed n the basis of s. 137.1 of the Courts of Justice Act, R.S.O. 1990 C. c.43 (the “CJA”), which permits the early dismissal of proceedings that limit debate on matters of public interest.

The appellant appealed against the dismissal of the claim against Dr. M, AP, CW and AP (collectively, the “Remaining Defendants”).

The appellant’s claim against the Remaining Defendants stemmed from two separate matters. The claim against Dr. M arose from Twitter statements he made in September 2018 in which he criticized the appellant for having previously blocked him on Twitter, thereby preventing him from responding directly to attacks that the appellant had made against the Ontario Medical Association (“OMA”).

The appellant’s claim against AP, CW and AP arose from Twitter statements they made in August and October 2020 in which they criticized the appellant’s position on the government response to the COVID-19 pandemic.

The motion judge dismissed the appellant’s claims against Dr. M on two grounds. First, the motion judge found that the offensive language used by Dr. M in his impugned tweets was not defamatory. Second, the motion judge found that the appellant had offered no evidence of any harm caused to her reputation as a result of the impugned tweets, other than “vague, unparticularized statements.” Therefore, even if the words complained of were defamatory, and some general damage to the appellant’s reputation is therefore to be presumed, any such damage is likely to be assessed as being merely nominal.

The motion judge found that the impugned tweets by AP, CW and AP all related to matters of significant public interest, namely, the development of effective treatments for COVID-19, whether a vaccine is needed, and whether HCQ is an appropriate treatment for COVID-19.

The motion judge dismissed the claim against AP, CW and AP on two separate grounds. First, the appellant failed to discharge her burden of showing that AP, CW and AP had no valid defence to her defamation claim. Accordingly, her claim against them should be dismissed on the basis of s.137.1(4)(a)(ii) of the CJA. Second, pursuant to s. 137.1(4)(b) of the CJA, because the appellant failed to provide evidence showing that she suffered any harm from the impugned tweets by AP, CW and AP.

issues:
  1. Did the motion judge err in finding that the defence of fair comment was prima facie available to AP, CW and AP?
  2. Did the motion judge err in the weighing exercise she engaged in under s. 137.1(4)(b)?
holding:

Appeal dismissed.

reasoning:
  1. No.

Section 137.1(4)(a)(ii) of the CJA requires the plaintiff to satisfy the motion judge that the defendant has no valid defence in the proceeding. The motion judge found that the appellant had failed to satisfy this requirement in respect of AP, CW and AP because the defence of “fair comment” was prima facie available to each of them.

The fair comment defence was premised on the idea that citizens must be able to openly declare their opinions on matters of public interest without fear of reprisal in the form of actions for defamation. For the fair comment defence to be successful, a defendant must prove the following: (i) the comment must be on a matter of public interest; (ii) be based on fact; (iii) be recognizable as a comment; (iv) satisfy an objective test (could any person honestly express that opinion on the approved facts?); and (v) the speaker cannot be actuated by express malice: Hansman, at para. 96. To satisfy a motion judge that a defendant has no valid defence of fair comment, the plaintiff must demonstrate that there is no prima facie basis for finding that one or more of these elements of the fair comment offence to be satisfied: Hansman, at para. 97.

There was no merit to the plaintiff’s objections that the motion judge made errors in her analysis of whether the “fair comment” defence was available to AP, CW and AP.

As the Supreme Court of Canada made plain in Hansman at paras. 99-100, the requirement that the defendant’s statements be “based on fact” does not mean that the defendant must prove that the statements they made were true. If this were so, it would collapse the distinction between the defences of “fair comment” and justification. All that is necessary to satisfy the “based on fact” element of the fair comment defence is that the defendant identify the factual foundation upon which the impugned statement is based, so that the reader can “make up their own minds as to its merits”: Hansman, at para. 99.

In this case, AP, CW and AP all expressly identified the specific statements of the appellant with which they took issue, and their basis for making those statements. Nothing further was required in order to satisfy the “based on fact” requirement of the fair comment defence.

The appellant did not advance any basis for finding that the motion judge erred in finding that AP, CW and AP were not motivated by malice. The motion judge made clear findings, based on the record, that all three of these defendants were motivated by concerns that the appellant’s public statements had the potential to mislead or misinform the public, thereby creating a potential risk to public health. Not only were these findings open to the motion judge, but the appellant has also failed to adduce any credible evidence to the contrary.

  1. No.

The motion judge did not err in requiring the appellant to provide evidence of a causal link between the impugned statements and any alleged harm she may have suffered. In fact, this requirement is expressly mandated by s. 137.1(4)(b) of the CJA and has been emphasized on numerous occasions by the Supreme Court of Canada. The appellant’s allegations of harm were completely undifferentiated, without any evidence linking the impugned statements to harm she might have suffered.

Further, the motion judge found that, despite the insulting words used by Dr. M, his purpose was to point out that the appellant was preventing him from responding directly to her very serious attacks on the honesty and integrity of the leadership of the OMA. It was open to the motion judge to find that there was some degree of public interest in protecting Dr. M’s right to speak out on this issue, despite the fact that the language he used to communicate his message was insulting. Since the appellant failed to adduce any evidence of “serious harm” resulting from Dr. M’s statements, it necessarily followed that she had failed to meet her burden of showing that she had suffered serious harm that outweighed the public interest in protecting Dr. M’s right to speak on the issue.

Turning to the impugned statements made by AP, CW and AP, the motion judge found that there was an extremely high public interest in protecting their right to speak out on the statements made by the appellant regarding COVID-19. As the motion judge pointed out, questions surrounding the development of effective treatments for COVID-19, including the need for vaccines, were matters of great public interest to the medical profession and the public at large. Nor did the language used by any of them in describing the appellant include the use of insults or vitriol.


Rimon v. CBC Dragon Inc., 2024 ONCA 128

[van Rensburg, Roberts and Gomery JJ.A.]

Counsel:

V. Msi, for the appellants

J. Bal and S. Maadanisani, for the respondents

Keywords: Civil Procedure, Documentary and Oral Discovery, Orders, Enforcement, Striking Pleadings, Rules of Civil Procedure, Rules 30.08, 60.12, Bottan v. Vroom, 2002 CanLII 41691 (Ont. C.A.), Aslezova v. Khanine, 2023 ONCA 153, Newlove v. Moderco Inc., 2002 CanLII 34748 (Ont. S.C.), Falcon Lumber Limited. v. 24803375 Ontario Inc., 2020 ONCA 310

facts:

The respondents initiated legal proceedings in May 2020, alleging they were induced by misrepresentations to advance funds for a property purchase by the appellants. The appellants denied the allegations and filed a defence and counterclaim. Despite undertakings, the appellants failed to provide information related to certain transactions, leading to the respondents bringing a motion to compel. Although some documents were produced, numerous undertakings remained outstanding. The respondents then moved to strike the defence and counterclaim, and the motion was adjourned, giving the appellants additional time. However, the appellants failed to fully comply, leading to a motion returned before the judge in March 2023.

The motion judge found that the appellants had failed to comply meaningfully with the court orders and remained in material default at the time of the hearing before him. The appellants appealed the motion judge’s order striking their statement of defence and counterclaim based on their failure to answer undertakings, produce relevant documents, and abide by successive court orders.

issues:
  1. Were the C undertakings made solely on behalf of Mr. C, CBC Dragon Inc. and KBIJ Inc., and did the motion judge’s order unjustifiably “sweep up” An-Dak Trading Company and its principal AYL (the “L Defendants”)?
  2. Did the motion judge unfairly fail to consider the efforts that the appellants had made to answer the C undertakings?
  3. Did the motion judge fail to consider whether the appellants’ failure to comply with their production obligations meaningfully prejudiced the respondents?
  4. Did the motion judge err by not accepting Mr. C’s evidence that he had not understood what he was undertaking to do at the October 2020 cross-examination, and that he had realized that some of the records sought could not, in fact, be produced, citing Newlove?
  5. Did the striking of the appellant’s defence and counterclaim sanction them disproportionately?
holding:

Appeal dismissed.

reasoning:
  1. No.

The 2020 and 2022 disclosure orders were directed against all the appellants, and the appellants at no point prior to this appeal took the position that the L Defendants were not bound by them. It would be strange if the L Defendants were exempt from the orders compelling production of transaction records, since the statement of claim alleged that some of the funds advanced by the respondents were transferred to them.

  1. No.

There was no error that would justify intervention by the Court.

  1. No.

The motion judge found that the appellants’ failure to respect their obligations to answer undertakings and to comply with court-ordered timetables to produce records had prejudiced the respondents.

  1. No.

Given the history of the litigation, it was open to the motion judge to reject Mr. C’s evidence that he only belatedly realized that he could not answer some of the undertakings given. This explanation for the appellants’ non-compliance was entirely new and stood “in complete contrast to the position [the appellants] [had] maintained throughout over the last period.” The motion judge further observed that the appellants had not “put forward any evidence of good faith efforts and due diligence to obtain [..] documents from third parties.”

 Newlove held that the dismissal of an action should be granted only exceptionally but that “the matter of the scope of the remedy is one within the discretion of the Court.” Rule 30.08(2) specifically contemplates an order to strike a pleading, and both Rules empower the court to make any order “as is just”.

  1. No.

The motion judge was alive to the particular facts of the facts. He found that Brown J.A.’s observation in Falcon Lumber about the fundamental importance of documentary production in any action was “particularly apt” where the documents go to the heart of the issues of the action.

The Rules of Civil Procedure are intended to ensure that parties to civil suits disclose all relevant information in a timely manner at all stages of a proceeding. A party’s failure to comply with their disclosure obligations increases the costs of litigation and frustrates the opposing party’s ability to move the proceeding forward. The Falcon Lumber principles apply even more forcibly when a party fails to disclose records when repeatedly ordered by the court to do so within a specific deadline. In such a case, the defaulting party does not simply delay or prevent an adjudication on the merits but undermines the court’s authority. The motion judge applied the correct principles of law and evaluated the record before determining that the order sought by the respondents was just.


8167800 Canada Inc (Lead Home Renovation) v. Denison Limited, 2024 ONCA 146

[Gillese and Copeland JJ.A. and Wilton-Siegel J. (ad hoc)]

Counsel:

S. Barbier, for the appellant

M. Wine, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Permitted Uses, Assignments, Equitable Remedies, Relief from Forfeiture, Civil Procedure, Reasonable Apprehension of Bias, Costs, Hamilton v Open Window Bakery Ltd, 2004 SCC 9

facts:

The appeal was brought by 8167800 Canada Inc., also known as Lead Home Renovation, from certain provisions of an order dated April 11, 2023, which granted the motion for relief from forfeiture of the termination of a commercial lease by Denison Limited. The appellant had entered into a lease for the premises in 2015, and upon the expiry of the original lease, a new Lease commenced on August 1, 2020, for a five-year term. The respondent purchased the building on June 22, 2022, and the relationship between the parties deteriorated, leading to the termination of the Lease on February 16, 2023. In response, the appellant sought urgent relief from forfeiture, while the respondent sought a declaration that the Lease was properly terminated. The motion judge found that the respondent was not entitled to terminate the Lease and granted the appellant’s motion for relief from forfeiture but imposed conditions in the Order objected to by the appellant. Specifically, the motion judge found the appellant was constructing kitchen cabinets in contravention of the Lease and required the appellant to adhere to the permitted uses of warehousing and distribution, providing a grace period until December 1, 2023, to adapt its business.

issue:

Did the motion judge err in finding that the appellant was engaged in the construction of kitchen cabinets in breach of the terms of the Lease?

holding:

Appeal dismissed.

reasoning:

No.

The appellant argued there was no evidence of manufacturing operations at the premises, contrary to the respondent’s claims. Yet, a 2022 MLS listing described the business for sale as including “cabinet machinery equipment” for a “Kitchen Cabinet and Home Renovation Business.” The motion judge observed table saws and a sanding machine on-site, used by the appellant for kitchen cabinet construction. Shi Xiaobin, the owner, admitted to creating or customizing kitchen cabinets for clients and had a spray booth for painting cabinets upon request. Despite the appellant’s claim that its operations did not equate to manufacturing due to the absence of mass production, the motion judge determined the business violated the Lease’s terms by constructing kitchen cabinets, indicating the premises were used more for construction than just distribution or warehousing, raising potential safety concerns.

The appellant also challenged the respondent’s refusal to consent to a Lease assignment to a prospective business buyer, a decision upheld by the motion judge based on the Lease’s terms against the premises’ use for kitchen cabinet construction. This refusal led to the lapse of a business sale offer.

Furthermore, the appellant was ordered to remove an abandoned truck from the premises, a directive supported by city by-laws and unchallenged by the appellant. Despite allegations of bias due to the motion judge’s remarks on communication styles, these comments were aimed at reducing future conflicts, not indicating bias.

Lastly, the appellant’s appeal of the motion judge’s order that each party bear its own costs was denied. There was no error in the exercise of the motion judge’s discretion on costs.


2682283 Ontario Ltd (Volcano Café and Lounge) v. Durham (Regional Municipality), 2024 ONCA 132

[Gillese and Copeland JJ.A. and Wilton-Siegel J. (ad hoc)]

Counsel:

R. Zigler, for the appellant

S. Rouleau and C. deSereville, for the respondent

Keywords: Municipal Law, By-laws, Health, Business Regulation, Municipal Act, 2001, S.O. 2001, c. 25, s. 115(1), 115(5), 273, Durham Region Smoking By-Law No. 28-2019, s. 10.1, 11.1, Provincial Offences Act, R.S.O. 1990, P.33, ss. 3, 5, 21, 91.1(2), Health Protection and Promotion Act, R.S.O. 1990, c. H.7, Rules of the Ontario Court (Provincial Division) in Provincial Offences Proceedings, R.R.O. 1990, Reg. 200, Courts of Justice Act, R.S.O. 1990, c. C.43, Foley v. St. Mary’s (Town), 2016 ONCA 528, Sheilagh Stewart and Jane Moffatt, Stewart & Moffatt on Provincial Offences Procedure in Ontario, 4th ed. (Salt Spring Island: Earlscourt Legal Press Inc., 2020)

facts:

The appellant appeals the order of the application judge dismissing its application to quash a municipal by-law passed by the respondent, the Regional Municipality of Durham (the “Region”). In 2019, the Health Protection Division of the Region recommended the enactment of a new smoking and vaping by-law. The by-law contains various anti-smoking and anti-vaping prohibitions.

The appellant opened a hookah lounge on February 21, 2020 – after the by-law came into effect. The Region received numerous complaints that the appellant was violating the by-law. Compliance officers attended the appellant’s premises on multiple occasions and saw evidence that the by-law was being breached. On two occasions, summonses for contravention of the by-law were served, pursuant to the Provincial Offences Act (“POA”). In addition, on two occasions, closure and other compliance orders were issued, pursuant to the Health Protection and Promotion Act.

The appellant brought an application seeking to quash the by-law, pursuant to s. 273 of the Municipal Act. In the alternative, the appellant sought a declaration that the prohibition against the use of hookahs was ultra vires on the basis that it was a disguised attempt to regulate business. The appellant also argued that the by-law was illegal because changes were made to Schedule A to the by-law (“Schedule A”) after it was passed. Schedule A addressed set fines for offences under the by-law.

issue:

Did the trial judge err in concluding that the changes made to Schedule A did not invalidate the by-law?

holding:

Appeal dismissed.

reasoning:

No.

The Court agreed with the application judge that the changes to Schedule A to the by-law after it had come into effect did not invalidate the by-law. The changes to Schedule A had been made by the local Regional Senior Justice of the Ontario Court of Justice (“RSJ”) exercising her authority to establish set fines for proceedings under s. 91.1(2) of Part I of the POA. The Schedule A appended to the by-law at the time of its passage was a placeholder until the RSJ exercised her authority under the POA to establish set fines.

The Court noted two difficulties with the appellant’s argument that changes to Schedule A invalidated the by-law. First, although the appellant had conceded that the local RSJ had the authority under s. 91.1(2) of the POA to establish set fines for municipal by-law offences, it characterized that authority too narrowly. Second, the appellant had mischaracterized the nature of the changes to Schedule A effected by the orders of the RSJ. The appellant contended that changes to the wording in Schedule A were invalid because they changed the substance of the by-law after it was enacted. The wording that the appellant referred to in Schedule A was the short form descriptions of the offences for purposes of the set fines. Deciding the wording for the short form descriptions of the offences was within the scope of the local RSJ’s authority to establish the set fines. The short form descriptions of the offences in the list of set fines in Schedule A did not change the prohibitions in the by-law or the offence of contravening them.

The appellant also argued that the reference in s. 10.1 of the by-law to Schedule A incorporated the version of Schedule A attached at the time the by-law was passed into the by-law itself. According to the appellant, the effect of this incorporation was that changes to Schedule A constituted amendments to the by-law and would invalidate the by-law. The Court disagreed. Section 10.1 of the by-law had to be read in the context of s. 91.1(2) of the POA. The reference in section 10.1 of the by-law to “set fines” could only be understood as a reference to set fines under the POA. The authority to establish set fines for municipal by-law offences rested with the local RSJ, not with the Region. Within that authority, the RSJ could change the amount of set fines and the offences for which set fines were established from time to time. In light of this context, the reference in s 10.1 of the by-law to the set fines being set out in Schedule A had to be read not as referring only to the placeholder Schedule A that was attached to the by-law at the time it was passed, but rather to the set fines established by the local RSJ from time to time under the authority in s. 91.1(2) of the POA.

Ultimately, it was clear that the changes to Schedule A had been made by the local RSJ and not by staff of the Region because the local RSJ had issued two orders changing Schedule A. The Court agreed with the application judge that it was these orders that changed Schedule A and that the process was consistent with s. 91.1(2) of the POA. The Court also agreed with the application judge that there was nothing untoward about the changes made to Schedule A after the by-law was passed by the Region and consent was given by a majority of lower-tier municipalities. As had occurred in this case, municipal staff could draft proposed short form wording and could request specific amounts as set fines. But the ultimate authority to establish set fines for by-law offences rested with the local RSJ.

The Court also rejected the appellant’s argument that the reasons of the application judge only addressed changes to the dollar values of the set fines made subsequent to the passage of the by-law and failed to address its argument that there were changes to the wording of Schedule A. Before the application judge, there had been no dispute that Schedule A had been changed as a result of the orders of the local RSJ exercising her authority to establish set fines. There had been no dispute about what the changes were – including to the wording of the short form descriptions of some of the offences for which set fines were established. The application judge was not required to enumerate in his reasons every individual change relied on by the appellant.

The Court did not find it necessary to consider the alternate argument regarding severance of s. 10.1 and Schedule A of the by-law as a remedy.


SHORT CIVIL DECISIONS

Sokil v. Buffone, 2024 ONCA 127

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

Counsel:

B.L.S., acting in person

C. Salazar, for the respondent BMO Trust Company

J. Friedman, for the respondent E.A.B.

W.S., acting in person

Keywords: Wills and Estates, Civil Procedure, Contempt, Appeals, Stay Pending Appeal, Costs, Succession Law Reform Act, R.S.O. 1990, c. S.26, Part II, Brad-Jay Investments Limited v. Village Developments Limited (2006), 2006 CanLII 42636 (ON CA), leave to appeal refused, [2007] S.C.C.A. No. 92

9806881 Canada Corp. v. Swan, 2024 ONCA 133

[van Rensburg, Roberts and Favreau JJ.A.]

Counsel:

J. M. Wortzman and J.C. Wortzman, for the appellants

P. Virc and R. Karrass, for the respondent

Keywords: Civil Procedure, Costs

Lengyel v. Public Guardian and Trustee, 2024 ONCA 130

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

Counsel:

G.L., acting in person

S. Nestico-Semianiw, for the respondent

Keywords: Civil Procedure, Appeals


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 evening.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of February 12, 2024.

Continue Reading

In Ontario English Catholic Teachers Association v. Ontario (Attorney General), the 2019 enactment of Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act by the Ontario legislature, sparked significant controversy. This Act limited compensation increases for public sector employees to 1% per year over a three-year period, applying to both represented and non-represented employees. Various public sector employee organizations successfully challenged the legislation, arguing it violated rights to freedom of expression, association, and equality under the Canadian Charter of Rights and Freedoms. In a split decision, the Court upheld the finding that, as it related to unionized employees, the Act breached the freedom of association protected by section 2(d) of the Charter and could not be justified under section 1. However, the Act was not invalid in relation to unrepresented ones, so it allowed the provincial government’s appeal in part.

In Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675) v. Barrick Gold Corporation, the dismissed an appeal from the motion judge’s order denying leave to commence a secondary market misrepresentation class action against Barrick Gold in relation to a mine in the Andes straddling the border between Chile and Argentina.

In Reddick v. Robinson, the Court dealt with the interpretation of an easement regarding pedestrian access to shores of Lake Ontario. The Court allowed the appeal of the application judge’s decision, highlighting errors in interpreting the terms of the easement, specifically the definition of “shores of Lake Ontario” and the scope of permissible activities. There was a dissenting opinion in this case as well.

In Royal Bank of Canada v. Cutler Forest Products Inc, the Court dismissed the appeal regarding whether a truck leasing company lost its purchase money security interest priority over a bank’s GSA for failure to perfect the PMSI (it did lose priority).

In Cohen v. Cohen, the Court allowed the appeal finding that trial judge erred in ordering an equalization payment in favour of the respondent despite a lack of disclosure by the respondent.

Other topics covered included dissent rights and a unanimous shareholder agreement, the amendment of pleadings in a professional negligence claim against personal injury lawyers, striking claims as an abuse of process and vexatious litigation.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Rebello v. Canada (Attorney General), 2024 ONCA 112

Keywords: Civil Procedure, Vexatious Litigation, Rules of Civil Procedure, r. 2.1, Ahmed v. Ontario (Attorney General), 2021 ONCA 427

Ontario English Catholic Teachers Association v. Ontario (Attorney General), 2024 ONCA 101

Keywords: Labour and Employment, Collective Bargaining Rights, Public Service Employees, Wage Restraint, Constitutional Law, Equality, Freedom of Association, Oakes Test, Canadian Charter of Rights and Freedoms, ss.1, 2(b), 2(d), 15, Protecting a Sustainable Public Sector for Future Generations Act, 2019, S.O. 2019, c. 12, Expenditure Restraint Act, S.C. 2009, c. 2, s. 393, The Public Services Sustainability Act, S.M. 2017, c. 24, Canada (Attorney General) v. Bedford, 2013 SCC 72, Carter v. Canada (Attorney General), 2015 SCC 5, Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, British Columbia Teachers’ Federation v. British Columbia, 2015 BCCA 184,  Manitoba Federation of Labour et al. v. The Government of Manitoba, 2021 MBCA 85, Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, Meredith. v. Canada (Attorney General), 2015 SCC 2, Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, Gordon v. Canada (Attorney General), 2016 ONCA 625,  Association of Justice Counsel v. Canada (Attorney General), 2012 ONCA 530, Canada (Procureur général) c. Syndicat canadien de la function publique section 675, 2016 QCCA 163, Federal Government Dockyard Trades and Labour Council v. Canada (Attorney General), 2016 BCCA 156,  Reference re Bill 148, An Act Respecting the Sustainability of Public Services, 2022 NSCA 39, R v Oakes, [1986] 1 SCR 103, RJR-MacDonald Inc v Canada (Attorney General), [1995] 3 SCR 199, R v Moriarity, 2015 SCC 55, Frank v Canada (Attorney General), 2019 SCC 1, Thomson Newspapers Co v Canada (Attorney General), [1998] 1 SCR 877, R v Big M Drug Mart Ltd, [1985] 1 SCR 295, Harper v Canada (Attorney General), 2004 SCC 33, PSAC v Canada, [1987] 1 SCR 424, Nova Scotia (Workers’ Compensation Board) v Laseur, 2003 SCC 54, Newfoundland (Treasury Board) v NAPE, 2004 SCC 66, Conseil scolaire francophone de la Colombie-Britannique v British Columbia, 2020 SCC 13, Alberta v Hutterian Brethren of Wilson Colony, 2009 SCC 37, Canada v Taylor, [1990] 3 SCR 892, Canada v Taylor, [1990] 3 SCR 892, Little Sisters Book and Art Emporium v Canada (Minister of Justice), 2000 SCC 69, UFCW, Local 1518 v KMart Canada Ltd, [1999] 2 SCR 1083, R v KRJ, 2016 SCC 31, Protecting a Sustainable Public Sector for Future Generations Act, 2019, S.O. 2019, c. 12, Expenditure Restraint Act, S.C. 2009, c. 2, s. 393, Public Services Sustainability Act, S.M. 2017, c. 24, Management Board of Cabinet Act, R.S.O. 1990, C. M.1, Director of Public Prosecutions of Jamaica v. Mollison, [2003] UKPC 6; [2003] 2 A.C. 411, R. (Anderson) v. Secretary of State for the Home Department [2002] 3 WLR 1800, at 1821-1822, Newfoundland (Treasury Board) v. N.A.P.E., 2004 SCC 66, Anderson v. Alberta, 2022 SCC 6, Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43, Nelson (City) v. Marchi, 2021 SCC 41, Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, R. v. Chouhan, 2021 SCC 26, Manitoba Federation of Labour et al. v. The Government of Manitoba, 2021 MBCA 85, Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, Dunmore v. Ontario (Attorney General), 2001 SCC 94, Health Services, and Ontario (Attorney General) v. Fraser, 2011 SCC 20, Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, Meredith v. Canada (Attorney General), 2015 SCC 2, Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, Canada (Procureur général) c. Syndicat canadien de la fonction publique, section locale 675, 2016 QCCA 163, Gordon v. Canada (Attorney General), 2016 ONCA 625, References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, Canada (Attorney General) v. Bedford, 2013 SCC 72, Frank v. Canada (Attorney General), 2019 SCC 1, Little Sisters Book and Art Emporium v. Canada (Minister of Justice), 2000 SCC 69, Carter v. Canada (Attorney General), 2015 SCC 5, RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892, Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, R. v. Lucas, [1998] 1 S.C.R. 439, Libman v. Quebec (Attorney General), [1997] 3 S.C.R. 569, Nova Scotia (Workers’ Compensation Board) v. Laseur, 2003 SCC 54, Canada (Attorney General) v. JTIMacdonald Corp., 2007 SCC 30

Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675) v. Barrick Gold Corporation, 2024 ONCA 105

Keywords: Securities, Secondary Market Liability, Secondary Market Misrepresentations, Public Correction, Civil Procedure, Class Proceedings, Leave to Commence Proceeding, Certification, Securities Act, R.S.O. 1990, c. S.5, Part XXIII.1, Peters v. SNC-Lavalin Group Inc., 2023 ONCA 360, 166 O.R. (3d) 756, Wong v. Pretium Resources Inc., 2022 ONCA 549, Green v. Canadian Imperial Bank of Commerce, 2015 SCC 60, Theratechnologies Inc. v. 121851 Canada Inc., 2015 SCC 18, Badesha v. Cronos Group Inc., 2022 ONCA 663, Rahimi v. SouthGobi Resources Ltd., 2017 ONCA 719, Mask v. Silvercorp Metals, 2016 ONCA 641, Markowich v. Lundin Mining Corp., 2023 ONCA 359, Bayens v. Kinross Gold Corporation, 2014 ONCA 901, Goldsmith v. National Bank of Canada, 2016 ONCA 22, Nseir v. Barrick Gold Corporation, 2022 QCCA 1718, R. v. Sheeller, 2014 ONCA 867, R. v. Curry, 2019 ONCA 754, leave to appeal denied, [2014] S.C.C.A. No. 185,  R. v. K.C., 2015 ONCA 39, Kerr v. Danier Leather Inc., 2007 SCC 44, Baldwin v. Imperial Metals Corporation, 2021 ONCA 838, Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund (Trustees of) v. SNC-Lavalin, 2016 ONSC 5784

Cashin Mortgages Inc. (Verico Cashin Mortgages) v. 2511311 Ontario Ltd. (Mortgages Alliance – Main Street Mortgages), 2024 ONCA 103

Keywords: Abuse of Process, Motion, Capacity, Rules of Civil Procedure, R.R.O. 1990, Reg 194, r 23.01(3)(b), 23.01(3)(c), 23.01(3)(d), Western Delta Inc. v. Zurich Indemnity Company of Canada, 1999 CanLII 2386, Goldentuler v. Simmons Dasilva LLP, 2021 ONCA 219, Housen v. Nikolaisen, 2002 SCC 33, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, Behn Moulton Contracting Ltd., 2013 SCC 26, Birdseye Security Inc. v. Milosevic, 2020 ONCA 355

Lepan Estate v. Lofranco Chagpar Barristers, 2024 ONCA 110

Keywords: Torts, Professional Negligence, Solicitor and Client, Civil Procedure, Amending Pleadings

Husack v. Husack, 2024 ONCA 117

Keywords: Wills and Estates, Contracts, Interpretation, Ontario Business Corporations Act, R.S.O. 1990, c. B.16, ss. 184 and 185, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Reddick v. Robinson, 2024 ONCA 116

Keywords: Real Property, Easements, Interpretation, Yekrangian v. Boys, 2021 ONCA 629, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417 (C.A.), Sattva Capital Corp. v. Creston Moly Corp, 2014 SCC 53, Herold Estate v. Canada (Attorney General), 2021 ONCA 579, 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273, Housen v. Nikolaisen, 2002 SCC 33, Gibbs v. Grand Bend (Village) (1995), 26 O.R. (3d) 644, Ontario (Attorney General) v. Walker (1970), [1971] 1 O.R. 151, Niagara River Coalition v. Niagara-on-the-Lake (Town), 2010 ONCA 173, Freeborne Developments Ltd. v. Corman Park (Rural Municipality), 2021 SKCA 48, Raimondi v. Ontario Heritage Trust, 2018 ONCA 750, Robb v. Walker, 2015 BCCA 117, Wesley v. Iles, 2013 ONCA 8, One West Holdings Ltd. v. Greata Ranch Holdings Corp., 2014 BCCA 67, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417, Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517

Cohen v. Cohen, 2024 ONCA 114

Keywords: Family Law, Property, Equalization of Net Family Property, Matrimonial Home, Family Law Act, R.S.O. 1990, c. F.3, s.4,7,8, Hamilton v. Hamilton (1996), 92 O.A.C. 103 (C.A.), Roberts v. Roberts, 2015 ONCA 450

Tewari v. Sekhorn, 2024 ONCA 123

Keywords: Civil Procedure, Appeals, Vexatious Litigation, Rules of Civil Procedure, r.2.1.01, Salasel v. Cuthbertson, 2015 ONCA 115, 1522491 Ontario Inc. v. Stewart, Esten Professional Corporation, 2010 ONSC 727, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Tewari v. McHenry, 2022 ONCA 335, Tewari v. Sachdeva and Miller Thomson LLP, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720

Royal Bank of Canada v. Cutler Forest Products Inc., 2024 ONCA 118

Keywords: Commercial Law, Contracts, General Security Agreements, Security Interests, Purchase Money Security Interests, True Leases, Bankruptcy and Insolvency, Receiverships, Priorities, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Courts of Justice Act, R.S.O. 1990, c.C.43, Personal Property Security Act, R.S.O. 1990, c. P.10, Ministry of Government Services Consumer Protection and Service Modernization Act, 2006, S.O. 2006, c. 34 (Bill 152), Personal Property Security Act, S.B.C. 1989, c. 36 (BC PPSA), International Harvester Credit Corp of Canada v Bell’s Dairy Ltd (Trustee of), (1986), 30 D.L.R. (4th) 387 (Sask. C.A.), Giffen (Re), [1998] 1 S.C.R. 91, International Harvester Credit Corp. of Canada v Bell’s Dairy Ltd. (Trustee of), (1986), 30 D.L.R. (4th) 387 (Sask. C.A.)


CIVIL DECISIONS

Rebello v. Canada (Attorney General), 2024 ONCA 112

[Benotto, Roberts and Sossin JJ.A.]

Counsel:

T. Rebello, acting in person

J. Stuckey, for the respondent Attorney General of Canada

S. Kissick, for the respondent Attorney General of Ontario

Keywords: Civil Procedure, Vexatious Litigation, Rules of Civil Procedure, r. 2.1, Ahmed v. Ontario (Attorney General), 2021 ONCA 427

facts:

The appellant brought an application against Canada and Ontario seeking: (1) a declaration that the respondents created a justice system that is in disrepute and have breached ss. 7 and 15 of the Canadian Charter of Rights and Freedoms; (2) a declaration that the respondents have obligations to implement a court system that prevents breaches of Charter rights and denials of access to justice; and (3) an order requiring the respondents to implement an effective justice system.

Ontario moved to dismiss the application.  The motion judge found that the application had no merit and was frivolous, vexatious, and an abuse of process. The appellant appealed, with the respondents requesting that the appeal be dismissed pursuant to r. 2.1.01(1) of the Rules of Civil Procedure.

issues:
  1. Did the motion judge err in ruling that the application be dismissed on r. 2.1.01 without a hearing?
  2. Did the motion judge err in dismissing the application against Canada, because it did not request the dismissal or file a notice of appearance?
holding:

Appeal dismissed.

reasoning:
  1. No

Rule 2.1.01 sets out a summary procedure, and the court has the power to proceed without submissions. Subrule 2.1.01(3) specifically states that an order shall be made on written submissions “unless the court orders otherwise.” Given the multiple cases referred to by the motion judge where the same allegations were raised in other proceedings commenced by the appellant, she did not err in exercising her discretion to proceed without submissions.

  1. No

Although a party may request an order, the court has the power “on its own initiative” to stay or dismiss the proceeding.


Ontario English Catholic Teachers Association v. Ontario (Attorney General), 2024 ONCA 101

[Doherty, Hourigan and Favreau JJ.A]

Counsel:

P. Griffin, N. Bombier and S. Hale, for the appellants His Majesty the King in Right of Ontario et al.

P. Cavalluzzo and B. Dosanjh, for the respondents Ontario English Catholic Teachers Association et al.

S. Ursel, K. Ensslen and E. Home, for the respondents Ontario Secondary School Teachers’ Federation et al.

H. Goldblatt and B. Piper, for the respondents Elementary Teachers’ Federation of Ontario et al.

J. Borowy and D. Bisnar, for the respondents Ontario Nurses’ Association et al.

D. R. Wright, M. J. Nam and R. Jones, for the respondents Ontario Public Service Employees Union et al.

S. Barrett and M. Anderson, for the respondents Ontario Federation of Labour et al.

A. Dale, D. Simonovic and J. Meguid, for the respondents Unifor et al.

C. Bauman, for the respondents Carleton University Academic Staff Association et al.

M. Wright, A. St. John and N. Parker, for the respondents Society of United Professionals et al.

A. Lokan and S. Talukdar, for the respondents Power Workers’ Union et al.

G. Avraam and A. Anandarajah, for the intervener Canadian Association of Counsel to Employers

T. Gleason and A. Lei, for the intervener Canadian Civil Liberties Association

C. Davies, D. Sandhu and K. Owens, for the intervener Women’s Legal Education and Action Fund Inc.

Keywords: Labour and Employment, Collective Bargaining Rights, Public Service Employees, Wage Restraint, Constitutional Law, Equality, Freedom of Association, Oakes Test, Canadian Charter of Rights and Freedoms, ss.1, 2(b), 2(d), 15, Protecting a Sustainable Public Sector for Future Generations Act, 2019, S.O. 2019, c. 12, Expenditure Restraint Act, S.C. 2009, c. 2, s. 393, The Public Services Sustainability Act, S.M. 2017, c. 24, Canada (Attorney General) v. Bedford, 2013 SCC 72, Carter v. Canada (Attorney General), 2015 SCC 5, Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, British Columbia Teachers’ Federation v. British Columbia, 2015 BCCA 184,  Manitoba Federation of Labour et al. v. The Government of Manitoba, 2021 MBCA 85, Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, Meredith. v. Canada (Attorney General), 2015 SCC 2, Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, Gordon v. Canada (Attorney General), 2016 ONCA 625,  Association of Justice Counsel v. Canada (Attorney General), 2012 ONCA 530, Canada (Procureur général) c. Syndicat canadien de la function publique section 675, 2016 QCCA 163, Federal Government Dockyard Trades and Labour Council v. Canada (Attorney General), 2016 BCCA 156,  Reference re Bill 148, An Act Respecting the Sustainability of Public Services, 2022 NSCA 39, R v Oakes, [1986] 1 SCR 103, RJR-MacDonald Inc v Canada (Attorney General), [1995] 3 SCR 199, R v Moriarity, 2015 SCC 55, Frank v Canada (Attorney General), 2019 SCC 1, Thomson Newspapers Co v Canada (Attorney General), [1998] 1 SCR 877, R v Big M Drug Mart Ltd, [1985] 1 SCR 295, Harper v Canada (Attorney General), 2004 SCC 33, PSAC v Canada, [1987] 1 SCR 424, Nova Scotia (Workers’ Compensation Board) v Laseur, 2003 SCC 54, Newfoundland (Treasury Board) v NAPE, 2004 SCC 66, Conseil scolaire francophone de la Colombie-Britannique v British Columbia, 2020 SCC 13, Alberta v Hutterian Brethren of Wilson Colony, 2009 SCC 37, Canada v Taylor, [1990] 3 SCR 892, Canada v Taylor, [1990] 3 SCR 892, Little Sisters Book and Art Emporium v Canada (Minister of Justice), 2000 SCC 69, UFCW, Local 1518 v KMart Canada Ltd, [1999] 2 SCR 1083, R v KRJ, 2016 SCC 31, Protecting a Sustainable Public Sector for Future Generations Act, 2019, S.O. 2019, c. 12, Expenditure Restraint Act, S.C. 2009, c. 2, s. 393, Public Services Sustainability Act, S.M. 2017, c. 24, Management Board of Cabinet Act, R.S.O. 1990, C. M.1, Director of Public Prosecutions of Jamaica v. Mollison, [2003] UKPC 6; [2003] 2 A.C. 411, R. (Anderson) v. Secretary of State for the Home Department [2002] 3 WLR 1800, at 1821-1822, Newfoundland (Treasury Board) v. N.A.P.E., 2004 SCC 66, Anderson v. Alberta, 2022 SCC 6, Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43, Nelson (City) v. Marchi, 2021 SCC 41, Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, R. v. Chouhan, 2021 SCC 26, Manitoba Federation of Labour et al. v. The Government of Manitoba, 2021 MBCA 85, Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, Dunmore v. Ontario (Attorney General), 2001 SCC 94, Health Services, and Ontario (Attorney General) v. Fraser, 2011 SCC 20, Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, Meredith v. Canada (Attorney General), 2015 SCC 2, Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, Canada (Procureur général) c. Syndicat canadien de la fonction publique, section locale 675, 2016 QCCA 163, Gordon v. Canada (Attorney General), 2016 ONCA 625, References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, Canada (Attorney General) v. Bedford, 2013 SCC 72, Frank v. Canada (Attorney General), 2019 SCC 1, Little Sisters Book and Art Emporium v. Canada (Minister of Justice), 2000 SCC 69, Carter v. Canada (Attorney General), 2015 SCC 5, RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892, Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, R. v. Lucas, [1998] 1 S.C.R. 439, Libman v. Quebec (Attorney General), [1997] 3 S.C.R. 569, Nova Scotia (Workers’ Compensation Board) v. Laseur, 2003 SCC 54, Canada (Attorney General) v. JTIMacdonald Corp., 2007 SCC 30

facts:

In 2019, the Ontario legislature passed Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019, S.O. 2019, c. 12 (“Bill 124” or the “Act”). The Act imposed a three-year “moderation” period on compensation, including salary rates, for all employees in the broader public sector. For those three years, compensation increases were not to exceed 1% per year. The Act applied to represented and non-represented employees.

The respondents, which included organizations that represented employees in the broader public sector, brought applications challenging the Act on the basis that it violated their members’ rights to freedom of expression (s. 2(b)), freedom of association (s. 2(d)) and equality (s. 15) under the Canadian Charter of Rights and Freedoms.

The application judge granted the applications, finding that the Act violated the respondents’ freedom of association under s.2(d) of the Charter, and that this violation was not saved by s. 1 of the Charter. The application judge did not accept the arguments that the Act violated the respondents’ s. 2(b) or s. 15 rights.

Based on the application judge’s conclusion that that the Act violated s. 2(d) and was not saved by s. 1 of the Charter, the application judge declared the entire Act void and of no effect. In doing so, he stated that there was no purpose in going through the Act section by section. In addition, the application judge deferred the issue of any further remedies to a later hearing.

issues:
  1. Does the Act infringe on s. 2(d) of the Charter?
  2. Did the application judge err in his s. 1 Charter analysis?
  3.  Did the application judge err in striking down the statute?
holding:

Appeal allowed, in part.

reasoning:

Majority Decision:

  1. Yes.

General principles regarding protection of collective bargaining under s. 2(d) of the Charter

Section 2(d) of the Charter ensures the freedom of association as a fundamental right. The Supreme Court, starting with Health Services in 2007, recognized this freedom within the labor context to include collective bargaining rights under s. 2(d). However, it clarified that s. 2(d) does not protect all collective bargaining aspects, but only against “substantial interference” with this activity. The “substantial interference” test involves assessing the importance of the affected matter to collective bargaining and the impact of the measure on the collective right to negotiate and consult in good faith.

Previous wage restraint decisions

Canadian courts, including the Supreme Court and Court of Appeal, have evaluated the constitutional validity of various wage restraint laws, generally finding these laws do not significantly interfere with the collective bargaining right under s. 2(d) of the Charter. Ontario cited these precedents to argue the Act in question did not violate s. 2(d). However, the Court highlighted that assessing the Act’s infringement on s. 2(d) rights requires more than comparing it to previous wage restraint laws. Instead, following the Supreme Court’s guidance in Health Services and the 2015 trilogy, it necessitated a contextual analysis of the Act’s enactment and its impact on collective bargaining.

The Court emphasized the need to review previous appellate decisions on wage restraint to identify key factors influencing their findings that the laws did not violate s. 2(d) rights. This included examining decisions related to the federal Expenditure Restraint Act (ERA) and the Manitoba Federation decision on Manitoba’s wage restraint legislation.

(a)         Decisions challenging the Expenditure Restraint Act

The decisions in Meredith, Gordon, Dockyard and Procureur général all dealt with challenges to the ERA.  The legislation was enacted in response to the 2008 worldwide financial crisis. The ERA applied to over 400,000 unionized and non-unionized employees who worked for the federal Crown and approximately 48,000 employees who worked for federal Crown corporations. The ERA limited wage increased by specified percentages over a five-year period.

There were four common threads between the decisions dealing with the constitutional validity of the ERA: 1) the measures were imposed in the context of the 2008 global economic crisis; 2) multiple bargaining units had reached agreements about wage increases similar to those that were legislated before the ERA was enacted; 3) the legislation was imposed after a relatively long period of negotiation; and, 4) in some cases, following the enactment of the ERA, bargaining units were nevertheless able to reopen their collective agreements to negotiate for wage increases (Meredith) or other matters of interest, including matters related to compensation (Procureur général).

(b)         Manitoba wage restraint legislation decision

Manitoba Federation challenged The Public Services Sustainability Act (the “PSSA”), which set wage caps for both represented and non-represented employees in Manitoba’s public sector, affecting nearly 20% of the province’s workforce. The trial judge ruled the PSSA violated the collective bargaining rights under s. 2(d) of the Charter, and this infringement was not justifiable under s. 1 of the Charter.

Ontario referenced this case to contest a similar finding against an Act, arguing the PSSA, with harsher wage caps, was comparable to the Act under scrutiny. Despite the trial judge’s error in the s. 2(d) analysis, a fresh court analysis found the PSSA’s provisions functionally equivalent to those in the constitutional ERA. It highlighted that, despite wage caps, bargaining on other workplace conditions remained possible and noted the PSSA’s unique exemption clause allowing government discretion for exemptions, which unions could influence through striking.

The court acknowledged that removing wages from negotiation met the initial test set by Health Services for substantial interference but concluded the PSSA did not substantially interfere with collective bargaining rights due to preserved processes of consultation and negotiation, deeming such legislative interference temporary and broad-based as non-substantial.

(c)         General principles that arise from prior wage restraint legislation decisions

Ontario argued that the application judge erred in failing to follow previous wage restraint legislation decisions. Ontario pointed to the similarities between the legislation in these other cases and the Act.

However, this argument failed to have regard to the contextual analysis mandated by the Supreme Court in deciding whether legislation substantially interferes with the right to collective bargaining.

There is no formula for assessing whether the degree of interference reaches the level of substantial interference. Rather, the courts look at a set of factors to assess the degree of interference, and whether the measures imposed leave room for a meaningful process of good faith negotiation and consultation.

Application of s. 2(d) Jurisprudence

The Supreme Court outlined a two-step process to assess if a law significantly impacts collective bargaining rights, focusing on the issue’s relevance to collective bargaining and the law’s effect on the right to bargain and consult in good faith. In the current case, it was uncontested by Ontario that wages are crucial to collective bargaining, with evidence showing their significance to the respondents’ bargaining goals. The core question was whether the Act maintained a meaningful consultation and negotiation process. The analysis, which included ten factors, failed to conclusively prove that the Act ensured good faith negotiation and consultation, with some factors considered extraneous or irrelevant.

The Act’s Impact on Collective Bargaining

The government passed the Act without significant collective bargaining or consultation, a departure from previous practices of engaging in meaningful dialogue before introducing wage restraint legislation. Bill 124 was introduced without substantial prior collective bargaining with the affected units, and meaningful consultation with the respondents was absent before the Act’s enactment. The Act’s wide definition of “compensation” significantly limited negotiation opportunities, affecting salaries and other compensable benefits, thus restricting the respondents’ leverage in negotiations. Furthermore, the Act’s exemption process, despite being outlined in s. 27, proved to be ineffective for negotiation, characterized by delays and unaddressed requests, reducing its utility as a bargaining tool.

Conclusion on s. 2(d) Interference

The Act significantly infringed upon the respondents’ rights to collective bargaining by affecting a critical aspect—wages—and undermining the capacity for genuine collective bargaining and consultation. This infringement was due to the absence of substantial collective bargaining or meaningful consultation before the Act’s implementation, a broad definition of compensation that restricted negotiation scope, and an ineffective exemption process. Moreover, the 1% salary and compensation cap diverged from results in other public sector negotiations. Collectively, these elements highlighted the Act’s substantial interference with the ability to conduct negotiations and consultations in good faith.

  1. No.

Section 1 of the Charter allows for the imposition of reasonable limits on rights and freedoms, but such limits must be demonstrably justified in a free and democratic society. The Oakes test applied, requiring the government to demonstrate a pressing and substantial objective for the law and that the means chosen to achieve this objective are proportional. This includes a rational connection to the objective, minimal impairment of rights, and a balance between the law’s salutary and deleterious effects.

Pressing and Substantial Objective

The Act aimed to moderate compensation growth for public sector employees to manage the province’s finances responsibly and ensure the sustainability of public services. The Court found that moderating public-sector wages was more a means to achieve financial management than an objective. The Act’s objective was redefined as the responsible management of Ontario’s finances and the protection of sustainable public services.

Rational Connection

The Act was generally found to be rationally connected to the government’s objectives, except in its application to workers in the electricity and university sectors. For these sectors, there was no rational connection between the Act’s objectives and its application due to the self-funding nature of these sectors and the fixed funding agreements with universities.

Minimal Impairment

The Act did not minimally impair the right to collective bargaining. There was no evidence that the province could not achieve its objectives through collective bargaining or that it attempted to negotiate agreements with wage increases capped at 1% per year.

Proportionality

The deleterious effects of the Act on collective bargaining rights were not proportional to its salutary effects on fiscal management and public service sustainability. The Act’s infringement on Charter rights was not justifiable due to the lack of urgency or evidence that the same goals could not be achieved through collective bargaining.

Conclusion on s. 1 of the Charter

The Court found that the Act was not saved by s. 1 of the Charter. While it pursued a pressing and substantial objective and the means were generally rationally connected to its goals, it failed the minimal impairment test, and its detrimental effects outweighed its salutary effects.

  1. Yes.

The application judge found the Act violated s. 2(d) of the Charter and was not saved by s. 1, leading to the entire statute being struck down, which the Court considered an error. The Act’s application to represented and non-represented employees differed, making it unconstitutional only regarding represented employees. Despite suggestions that non-represented employees might wish to organize in the future, the Act was deemed not unconstitutional as it applied to them.

Dissenting Decision:

  1. Yes.

The Dissent argued that Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019, did not breach s. 2(d) of the Charter, as it did not substantially interfere with associational rights. The Majority’s breach finding, according to the Dissent, was flawed for overemphasizing the absence of pre-legislation consultation and misinterpreting economic conditions, thereby improperly shifting the burden of proof onto the Province and neglecting evidence of ongoing collective bargaining under Bill 124.

Despite wage caps under Bill 124, unions successfully negotiated other significant benefits, maintaining the right to strike and achieving workplace goals. The Dissent highlighted that workers retained the ability to collectively represent their interests and to have those interests considered in good faith, affirming there was no violation of s. 2(d).

  1. Yes.

The Dissent noted that in the alternative to the first issue, if Bill 124 breached s. 2(d), it was a reasonable limit prescribed by law and is demonstrably justified in a free and democratic society.

The Dissent agreed with the Majority’s conclusion that Ontario has advanced a pressing and substantial objective in support of the Act. However, the Dissent disagreed with their findings regarding rational connection, minimal impairment, and proportionality.

It was uncontested that the government of Ontario enacted Bill 124 in response to what it perceived to be a pressing economic issue. The Dissent accepted the Majority’s finding that the legislation’s objective was the responsible management of the Province’s finances and protecting sustainable public services. There is no evidence that the government introduced the legislation in bad faith.

In applying the Oakes test, the Dissent argued that the application judge erred in law at each stage. The Dissent indicated that his reasons display a misunderstanding of the role of courts in reviewing government policy choices on resource distribution and the regulation of labour relations.

Pressing and Substantial

The application judge erred in applying too stringent a standard and went beyond the record to substitute his own opinion for the views of the elected government and financial experts.

Rational Connection

The application judge erred in finding that there was no rational connection regarding the energy and university sectors and only a remote connection to the long-term care sector. The Majority made the same errors regarding the energy and university sectors. Both failed to consider ways that wage control would benefit the responsible fiscal management of the Province and ignored the fact that the government had an interest in reducing wage growth in entities that are provincially funded or owned.

Minimal Impairment

The appellants submitted – and the Dissent agreed – that the application judge failed to adopt this deferential approach and erred in concluding that voluntary wage restraint – or hard bargaining – was the alternative that should have been pursued.

The Dissent argued that it was an error to fail to consider whether the legislature created a law that falls within a range of reasonable alternatives to respond to the policy problem. Instead, their analysis focuses exclusive on his erroneous conclusions that voluntary wage restraint or hard bargaining was a viable and better alternative to further the government’s policy objectives.

Balancing

The Dissent felt that the application judge chose to ignore the expert evidence and recast Ontario’s fiscal situation to fit his s. 1 analysis. The Dissent further noted that the Majority’s analysis of the balance stage was based on a misunderstanding of the operation of Bill 124.

Based on the above, the Dissent would find, in the alternative, that if Bill 124 breached s. 2(d), it was a reasonable limit prescribed by law and is demonstrably justified in a free and democratic society.

  1. Yes.

The Dissent agreed with the Majority in concluding that the application judge erred when he declined to consider the pertinent sections of Bill 124 and simply invalidated the whole Act.


Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675) v. Barrick Gold Corporation, 2024 ONCA 105

[Roberts, Paciocco and Thorburn JJ.A.]

Counsel:

J.P. Rochon, P.R. Jervis, G. Nayerahmadi, and M. W. Taylor for the appellants

K.E. Thomson, S.G. Frankel, and M. O’Sullivan, for the respondents

Keywords: Securities, Secondary Market Liability, Secondary Market Misrepresentations, Public Correction, Civil Procedure, Class Proceedings, Leave to Commence Proceeding, Certification, Securities Act, R.S.O. 1990, c. S.5, Part XXIII.1, Peters v. SNC-Lavalin Group Inc., 2023 ONCA 360, 166 O.R. (3d) 756, Wong v. Pretium Resources Inc., 2022 ONCA 549, Green v. Canadian Imperial Bank of Commerce, 2015 SCC 60, Theratechnologies Inc. v. 121851 Canada Inc., 2015 SCC 18, Badesha v. Cronos Group Inc., 2022 ONCA 663, Rahimi v. SouthGobi Resources Ltd., 2017 ONCA 719, Mask v. Silvercorp Metals, 2016 ONCA 641, Markowich v. Lundin Mining Corp., 2023 ONCA 359, Bayens v. Kinross Gold Corporation, 2014 ONCA 901, Goldsmith v. National Bank of Canada, 2016 ONCA 22, Nseir v. Barrick Gold Corporation, 2022 QCCA 1718, R. v. Sheeller, 2014 ONCA 867, R. v. Curry, 2019 ONCA 754, leave to appeal denied, [2014] S.C.C.A. No. 185,  R. v. K.C., 2015 ONCA 39, Kerr v. Danier Leather Inc., 2007 SCC 44, Baldwin v. Imperial Metals Corporation, 2021 ONCA 838, Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund (Trustees of) v. SNC-Lavalin, 2016 ONSC 5784

facts:

The appellants, the Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund and R.L. (collectively, “Drywall”), were proposed representative plaintiffs in an intended class action proceeding relating to a failed South American gold mining project, the Pascua-Lama project. The proposed class action was based on allegations that the respondents, Barrick Gold Corporation and some of its officers and directors (collectively, “Barrick”), made actionable misrepresentations about the project, contrary to s. 138.3(1) of the Ontario Securities Act, R.S.O. c. S.5 (“OSA”). Section 138.3(1) provides for one of several misrepresentation actions legislated in s.138.3 of the OSA.

Leave is required under s. 138.8 of the OSA to bring a s. 138.3 action, including an action pursuant to s. 138.3(1). Drywall achieved only limited success in its initial leave application. Drywall was successful on appeal in obtaining a second leave hearing on some of its misrepresentation allegations. Drywall appealed the motion judge’s decision in the second leave hearing.

issues:
  1. Did the motion judge commit an extricable error in denying leave to pursue the alleged October 27, 2011 misrepresentations?
  2. Did the motion judge commit an extricable error in concluding that the November 1, 2012, April 10, 2013, and June 28, 2013 disclosures were not relevant possible public corrections of the alleged misrepresentations made on February 16, 2012, and March 28, 2012?
holding:

Appeal dismissed.

reasoning:
  1. No

The statutory causes of action in s. 138.3, including s. 138.3(1), do not require the plaintiff to prove reliance on a misrepresentation. Subsection 138.3(1) presumes that fluctuations in value during this period are attributable to the misrepresentation.  It imposes two statutory prerequisites to obtaining leave: (a) the action being brought in good faith; and (b) a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

In order to satisfy the reasonable or realistic chance of success standard, a plaintiff must “offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the [plaintiff’s] claim.’ These conditions must be satisfied plus the record before the leave judge must demonstrate that there is a realistic or reasonable chance that the action will succeed.  The “plaintiff must adduce ‘sufficient evidence to persuade the court that there is a reasonable possibility that the action will be resolved in the [plaintiff’s] favour.’”

The credibility of the evidence is to be assessed, including an assessment of the reliability of the evidence. If critical evidence offered by a plaintiff is shown by other evidence to be “completely undermined by flawed factual assumptions” a motion judge may choose not to act on that evidence. However, a s. 138.8 inquiry should not be treated as a “mini-trial” simply because their decision turned on considerations of the credibility and reliability or weight of the evidence.

It is the trial judge that is to determine whether the matter in issue has been proved on the balance of probabilities. If a motion judge attempts to resolve realistic and contentious issues arising from conflicting credible evidence they will be lapsing into a mini-trial. During the leave motion, judges must consider the evidence that is not before them and whether a lack of complete record leaves uncertainty about whether a realistic or reasonable chance of success exists.

The motion judge found there to be no realistic or reasonable possibility that a trial court could find that on October 27, 2011, Barrick was making actionable misrepresentations rather than expressing reasonably mistaken conclusions. In contrast, the motion judge found that there was evidence before her that could cause a trial court to conclude that after October 27, 2011, and before February 16, 2012, Barrick had acquired information that exposed its capex budget and production schedules as unreasonable, rendering the repetitions of the reasonableness of that same capex budget and projected production schedule on February 16, 2012 and March 27, 2012 misrepresentations. The motion judge engaged in an appropriate assessment of the whole of the record, and in effect concluded that given the strength of the case to the contrary, there was no such possibility of a reasonable or realistic chance of success at trial.

There was no basis for concluding that the motion judge failed to consider the evidentiary gaps in the record. Her obligation was to consider whether the record “was sufficient, even without the benefit of discoveries and production, to properly assess whether there was a reasonable possibility of the success of the appellants’ statutory action at trial”. The motion judge did this, concluding, as she was entitled to, that the record was adequate. Her reliance on the size of the record before her in making this determination was entirely appropriate.

Drywall placed heavy reliance on a July 25, 2012 presentation prepared by Barrick. The failure to mention evidence capable of supporting one of the parties can indicate a failure by a judge to consider that evidence, but “will depend on a number of factors, including the nature of the evidence itself, the entirety of the evidence, the issues raised and the arguments made.” The presentation was not compelling enough to support an inference that the motion judge must have missed it or missed its significance. In terms of the entirety of the evidence, the record was enormous, and the motion judge issued two lengthy judgments addressing multiple issues and submissions. Given the scope or her task, it was not surprising that the motion judge may not have explicitly mentioned all of the evidence that she considered.

Moreover, if a litigant does not consider a document to be sufficiently important to focus on in their submissions, an appeal court is not likely to infer that the document is of sufficient importance that it should have been referred to in the judge’s ruling. Drywall presented no confirmation that the document was featured, let alone referred to, in its written or oral submissions before the motion judge relating to the alleged October 27, 2011 misrepresentations that were under appeal. The motion judge did not fail to consider this document or the record before her.

The motion judge did not conduct a purely subjective inquiry. First, the motion judge considered whether there was any evidence on the record “to suggest” that “Barrick had any reason to be concerned”. This was an objective inquiry, and on its own, undermined Drywall’s submission. Second, since Drywall put Barrick’s subjective knowledge in issue, it could not fairly be inferred from the motion judge’s reference to Barrick’s subjective knowledge that she misconceived the law relating to misrepresentations.

  1. No

A “public correction” of an alleged misrepresentation will serve as a “necessary time-post for the proposed [s. 138.3(1) action] and any eventual damages calculation.” A motion judge considering whether leave should be granted pursuant to s. 138.8 must therefore determine “whether [an] alleged public correction was reasonably capable of being understood in the secondary market as correcting what was misleading in the impugned statement.”

The motion judge accepted Drywall’s submission that there was a reasonable possibility that Barrick’s disclosure made on July 26, 2012 was a public correction of these alleged misrepresentations, which was solidly grounded in the evidence. In the July 2012 public disclosure, Barrick described challenges it had encountered with the Pascua-Lama project, admitted that its earlier projections had proved incorrect, and disclosed that a detailed review of its schedule and costs estimate was required. Evidence showed that it was greeted with shock by analysts and the market given its magnitude. The motion judge concluded that the disclosure “put the market on notice that the forecasts were not reliable” and “[lead] inescapably to the conclusion that Barrick had accurately corrected any pre-existing misrepresentation about the schedule and capex budget by July 2012.”

In identifying possible public correction dates a motion judge’s ultimate task is to determine if there is a reasonable possibility that a trial court will find that a public disclosure was a public correction, an inquiry that requires a reasoned consideration of the evidence. The inquiry may alternatively be profitably framed by asking “whether the alleged public correction was reasonably capable of being understood in the secondary market as correcting what was misleading in the impugned statement.” Once Barrick disclosed on July 26, 2012, there was no longer a realistic or reasonable possibility that investors could credibly treat Barrick as continuing to represent that its February 16, 2012 and March 28, 2012 representations were reasonable or accurate. It followed that public disclosures made after July 26, 2012 were not reasonably capable of being understood in the secondary market as correcting the already completely corrected impugned statements that had been made on February 16, 2012 and March 28, 2012.

The “overarching question” was namely, “whether the alleged public correction [is] reasonably capable of being understood in the secondary market as correcting what was misleading in the impugned statement. It necessarily followed that a sufficient linkage or connection will exist if the alleged public correction can reasonably be taken as correcting the alleged misrepresentation, but not otherwise. A mere coincidence in subject matter will not suffice. The motion judge cited the linkage or connection inquiry and applied it correctly.

The motion judge did not encroach on the jurisdiction of the common issues judge administering the class action. The motion judge reasonably concluded that she could best achieve judicial economy and access to justice by using leave inquiry determinations to screen possible public corrections, thereby avoiding a duplication of efforts by the parties and the courts. She also did not confuse the misrepresentation and public correction issues.

Section 138.3(1) of the OSA was meant to provide generous access to justice to those whose trading decisions may have been tainted by misrepresentations. It would not be in keeping with the objective or with judicial economy to permit misrepresentation actions to be pursued on behalf of those who trade in securities after alleged misrepresentations have been completely publicly corrected, since a complete public correction will have removed any realistic prospect that those trading decisions may have been tainted.


Cashin Mortgages Inc. (Verico Cashin Mortgages) v. 2511311 Ontario Ltd. (Mortgages Alliance – Main Street Mortgages), 2024 ONCA 103

[Benotto, Roberts and Sossin JJ.A.]

Counsel:

P. N. Lermusieaux, for the appellants

C. C.G. Pye, for the respondent, Cashin Mortgages Inc., operating as Verico Cashin Mortgages

J. Sullivan, for the respondents, 2511311 Ontario Ltd. operating as Mortgage Alliance – Main Street Mortgages, and Roger Grubb

S. Campbell, for the respondent, The Mortgage Alliance Company of Canada Inc.

Keywords: Abuse of Process, Motion, Capacity, Rules of Civil Procedure, R.R.O. 1990, Reg 194, r 23.01(3)(b), 23.01(3)(c), 23.01(3)(d), Western Delta Inc. v. Zurich Indemnity Company of Canada, 1999 CanLII 2386, Goldentuler v. Simmons Dasilva LLP, 2021 ONCA 219, Housen v. Nikolaisen, 2002 SCC 33, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, Behn Moulton Contracting Ltd., 2013 SCC 26, Birdseye Security Inc. v. Milosevic, 2020 ONCA 355

facts:

The individual appellants were mortgage agents who worked under the trade name “Greenbrix”. From about June 2018 to April 2020, they worked as mortgage agents as independent contractors with the respondent, Cashin Mortgages Inc., operating as Verico Cashin Mortgages (“Cashin”), a mortgage brokerage. The appellants alleged that, from about January 1, 2019, they started using the name “Greenbrix” in connection with their services. On February 21, 2019, allegedly unknown to the appellants, Cashin registered “Greenbrix Capital” as a business name in Ontario. On June 21, 2019, the appellant, Krystian Catala, incorporated the appellant, Greenbrix Capital Inc.

The parties’ relationship ended in about April 2020. After this point, the appellants continued to work under the Greenbrix name in association with named defendants, Roger Grubb and 2511311 Ontario Ltd., another mortgage brokerage.

Cashin sent multiple warning letters to some of the defendants, advising them to cease using the “Greenbrix” name in association with their business activities and threatening legal action and disciplinary proceedings. Cashin’s principal also accused them of engaging in fraudulent actions by using the name.

On June 23, 2020, the appellants, Krystian Catala and Greenbrix Capital Inc., commenced an action in Toronto against Cashin and its principal (the “Toronto Action”). Cashin filed a statement of defence and counterclaim. The main dispute centred around the ownership of and right to use name, “Greenbrix”.

Following the completion of the discovery process in the Toronto Action, on March 1, 2022, Cashin commenced an action against some of the individual appellants and other named defendants in Milton (the “Milton Action”). The Milton Action also turned on the determination of the ownership of and right to use the name, “Greenbrix”. The defendants in the Milton Action had brought a motion under r. 21.01(3)(b), (c) and (d) of the Rules of Civil Procedure to have the Milton Action dismissed or stayed.

issues:
  1. Did the motion judge err in concluding that it was not plain and obvious that Cashin did not have legal capacity to bring the Milton Action?
  2. Did the motion judge err in finding that the action was an abuse of process and adjourning that part of the motion sine die?
holding:

Appeal allowed, in part.

reasoning:
  1. No.

The Court stated that the appellants’ argument conflated the question of legal standing with the question of whether or not Cashin’s claim to ownership had any merit. As the motion judge noted, the appellants did not bring a motion to strike Cashin’s statement of claim in the Milton Action as disclosing no reasonable cause of action, nor a motion for summary judgment, whereby the court could have possibly adjudicated the merits of the Milton Action. Whether or not Cashin ultimately prevailed on its assertion that it owned the Greenbrix name remained to be determined. The Court concluded that this was not a determination that could have been made on this motion or record. The Court ultimately dismissed this ground of appeal.

  1. Yes.

The motion judge made a reversible error by appearing to determine the issue of abuse of process but then adjourning the issue sine die such that it may or may not ever be dealt with.

The motion judge erred in not completing the motion. His failure to consider the issue before him resulted in a confusing order: the issued and entered order simply adjourned sine die the appellants’ motion under r. 21.01(3)(c) and (d), without any formal direction about next steps, such as a transfer motion, or clarification as to whether the return of the appellants’ motion was before the Toronto court or the motion judge.

The general principle of r. 1.04 ensured that the Rules were construed in the most expedient and economic way, having regard to the costs and delay to the litigants and the waste of precious judicial resources. Discoveries were complete in the Toronto Action but had not begun in the Milton Action at the time of the motion. The effect of the motion judge’s decision was to create additional delay and expense while the parties engaged in further motions that would have been unnecessary had the motion judge determined the issues before him.

The motion judge failed to recognize that the Milton Action was an abuse of process. His failure to grapple with this issue led him to treat the Milton Action as a mere procedural irregularity that could have been cured by its transfer to and joinder with the Toronto Action. As a result, he failed to give effect to his own findings that the Milton Action replicated the core issue and potentially the injunctive relief sought in the Toronto Action, and, importantly, that there was no “viable explanation” for the commencement of the Milton Action.

Ordinarily the discretionary decision of the motion judge to adjourn part of the appellants’ motion would attract deference from the Court. However, the Court noted that the motion judge’s errors were errors of law. As a result, the Court stated that no deference was owed to the motion judge’s adjournment decision and that it would consider this issue afresh: Housen at para 8.

Both r. 21.01(3)(c) and (d) invoke the doctrine of abuse of process. The doctrine of abuse of process has been applied to prevent a multiplicity of proceedings or the re-litigation of an issue, such as in the commencement of another proceeding that replicates the same or similar issues and is against some or all the same parties. It is a flexible doctrine that “evokes the ‘public interest in a fair and just trial process and the proper administration of justice’”, and, as a result, “engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute”: Behn Moulton Contracting Ltd at paras 39 and 40.

Having regard to the relevant circumstances (including the motion judge’s findings), the Milton Action was clearly vexatious and an abuse of process. These circumstances included that the Milton Action replicated the Toronto Action in subject matter and, effectively, in the persons against whom relief was being sought; there was no “viable explanation” for the unnecessary commencement of the Milton Action following the close of pleadings and completion of the discovery process in the Toronto Action; the acrimonious relationship that existed between the parties; Cashin’s surreptitious registration of the business name; and its aggressive and threatening letters to the appellants.

Without any viable explanation and notwithstanding the state of the Toronto Action, Cashin deliberately commenced the Milton Action where the likelihood of inconsistent findings and of unnecessary delay and expense was inevitable. In the absence of any “viable explanation” and seen in the context already reviewed, the Court concluded that the only reasonable inference to be drawn from Cashin instigating a second action involving the same principal issue and effectively the same parties was to put the appellants to the inconvenience, delay and expense of a second action in order to intimidate them into submission. The appellants’ rights were clearly prejudiced. Allowing Cashin to seek to transfer the Milton Action condoned its vexatious actions and abuse of process. This prejudiced the due administration of justice. The appeal in respect of the Milton Action was therefore allowed and the Milton Action was dismissed.


Lepan Estate v. Lofranco Chagpar Barristers, 2024 ONCA 110

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

Counsel:

K. Arvai, for the appellant

J. Pedro, for the respondents

Keywords: Torts, Professional Negligence, Solicitor and Client, Civil Procedure, Amending Pleadings

facts:

The late IL was injured in a 2008 motor vehicle accident. IL brought an action against the respondents, who had represented him in the ensuing motor vehicle litigation. He claimed that they had improperly pressured him into accepting improvident settlements of his claim for statutory accident benefits under the Insurance Act, and his claim for long-term disability benefits. He also alleged that these improvident settlements adversely affected the settlement of his tort claim, and that the respondents improperly pressured him to accept an improvident settlement of the tort claim. The appellant’s counsel eventually settled the tort action for nearly twice the offer obtained by the respondents that IL rejected. IL died in 2017 and his Estate continued the action.

In 2018, the respondents moved to remove the appellant’s counsel as the Estate’s solicitor of record, on the basis that his involvement in the settlement of the tort action rendered him a necessary witness as to the effect of the other allegedly improvident settlements on the tort settlement. The respondents’ motion was dismissed as premature by McArthur J., with reasons reported at 2018 ONSC 5330. The Divisional Court dismissed their appeal, with reasons reported at 2021 ONSC 1757.

The Estate then moved for leave to further amend the statement of claim to effect appeal counsel’s advice to the Divisional Court, described below. The respondents had not opposed the amendment and made no submissions. Leave to amend was granted on December 16, 2021, and the Amended Amended Statement of Claim was issued on January 4, 2022.

During examinations for discovery on December 15, 2021, counsel for the Estate began asking questions about the statutory accident benefits claim and the tort claim. Respondents’ counsel objected. On January 7, 2022, the respondents delivered an Amended Amended Statement of Defence and pleaded that the Estate was estopped from claiming any damages other than those flowing from the settlement of the long-term disability claim.

The respondents then brought a motion to enforce the Estate’s statement that it would restrict its claim for damages.

issues:

Did the motion judge err in concluding any claim for non-pecuniary damages arising from the respondent’s conduct on and management of the accident benefits and tort claims were waived?

holding:

Appeal Allowed

reasoning:

Yes.

In our system of justice, there are two basic principles worth recalling. First, a plaintiff with a tenable claim is entitled to proceed with an action in the normal course as pleaded. Second, a party is entitled to counsel of the party’s choice. That choice is not one with which a court should lightly interfere.

A plaintiff can give up a claim by amending the Statement of Claim. In light of the plain language of the Amended Amended Statement of Claim, the clarifications of the appellant, and the focus of the motion to remove the appellant’s counsel, discussed below in their contexts, the Court found that the motion judge misapprehended the pleading and the statements of counsel for the Estate, as did counsel for the respondents.

First, and most obviously, it appeared to be common ground that the Estate was entitled under the Amended Amended Statement of Claim to pursue both pecuniary and non-pecuniary claims related to the settlement of the long-term disability claim and had done so in all of the iterations of its pleading. The most recent amendments, which maintained these claims, were made without opposition. The pleading also maintained a broader claim for non-pecuniary damages. It was clear from the three claims for which non-pecuniary damages were sought that the amendments to the Statement of Claim preserved the Estate’s broader claims for non-pecuniary damages.

Second, apart from the plain fact that the Amended Amended Statement of Claim was not amended to delete the non-pecuniary claims in relation to the settlement of the statutory accident benefits claim and to the proposed tort settlement, counsel for the Estate pointed to other exchanges with the respondents before the Statement of Claim was amended that made the Estate’s intentions clear.

Third, the Court observed that there was no common understanding between the parties as to what the Estate was giving up in the Amended Amended Statement of Claim and what was being preserved, nor could that have been clear to the Divisional Court. The uncertainty was in part the responsibility of counsel for the Estate, who did not use the terms “pecuniary” and “non-pecuniary” damages that he more recently used in explaining the Estate’s position. On the pleading, both were claimed. Similarly, it was noted that the respondents’ counsel could have been faulted for not noticing that the Amended Amended Statement of Claim had not deleted these claims. The Estate’s alleged failure to amend the Statement of Claim consistently with the withdrawal of non-pecuniary claims should have triggered an inquiry, but it did not.

Fourth, it was noted that the court must pay close attention to the context. Respondents’ counsel were anxious to remove the appellant’s counsel as solicitor of record for the Estate. They had brought the unsuccessful motion and the unsuccessful Divisional Court appeal for this purpose. To add detail, the basis for the motion was the claim in the old version of para. 23 that the improvident settlement of the long-term disability and accident benefits claims had a negative impact on the settlement of the tort claim, resulting in a further loss to the Estate. To prove that claim, the respondents argued that the appellant’s counsel, as the one who negotiated the ultimate tort settlement, would have been required to give evidence as to why the Estate got less than it was otherwise entitled to for the tort claim. He should, they argued, therefore be removed as counsel for the Estate. This had led to the amendments to the pleading to take the appellant’s counsel out of the line of fire. By these amendments, he avoided being a prospective witness by taking the quantum of the tort settlement out of contention.

The fifth reason was that there was no undertaking or representation concerning the non-pecuniary damages to the Divisional Court and no basis for estoppel by representation. The Estate had not represented that it waived its non-pecuniary claims. There was also no evidence that the respondents relied on the statements of the Estate’s counsel. While the motion judge noted that the respondents did not appeal the Divisional Court order, this fact was insufficient to show that the respondents changed their legal position in response to the statements. There was no indication that the respondents had intended to appeal, and leave to appeal was unlikely given that the Divisional Court’s order did not preclude the respondents from bringing the same motion later.

As a final note, the Court stated that it was striking that this litigation had been essentially stalled since 2018. The Court further iterated that it was time for the parties to attend to the merits of the case with the pleadings as drafted and counsel of the parties’ choice.


Husack v. Husack, 2024 ONCA 117

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

D. Sayer and A. Stikuts, for the appellant

R. MacGregor, for the respondent, E.H.

D. Waldman, for the respondent, D. H.

J. Diacur, for the respondents, D.P. and D.Wills.

Keywords: Wills and Estates, Contracts, Interpretation, Ontario Business Corporations Act, R.S.O. 1990, c. B.16, ss. 184 and 185, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

F.H. died on February 21, 2008. The Holding Company, formed by amalgamation of his two corporations after his death, held the remaining assets of his estate. The sole directors of the Holding Company were his widow, E.H., and her son, D.H. The estate held all of the Class A non-voting and Class B voting shares of the Holding Company. The Class A preferential shares, with priority distribution rights, were held by a spousal trust for E.H.’s benefit. Each of the Husacks’ four children – the appellant and the respondents held approximately 25% of the non-voting common shares of the Holding Company. E.H., her four children, and The Effort Trust Company were appointed estate trustees under F.H.’s last will and testament. Under his will, E.H. was granted a veto as estate trustee, over and above her children, so that she could maintain control over the Holding Company after F.H.’s death.

E.H. wished to complete the winding up and distribution of the Holding Company’s assets, pursuant to F.H.’s will, before she died. All of the estate trustees, except the appellant, voted in favour of the liquidation and winding-up of the Holding Company. The application judge’s dismissal of the appellant’s application principally turned on her interpretation of the USA. The USA was signed by all the shareholders; its validity and enforceability were not impugned.

issues:

Did the application judge err in concluding that the shareholders’ dissent rights were explicitly waived by the provisions of the USA signed by the Holding Company’s shareholders?

holding:

Appeal dismissed.

reasoning:

No

The application judge’s interpretation reflected the clear language of the USA.

The application judge concluded that the shareholders’ rights under s. 184(3) of the OBCA were triggered by the proposed liquidation and winding up. The application judge considered whether the dissent rights were waived by the USA. Having considered the relevant provisions of the OBCA, the factual matrix, including the estate planning purpose of the Holding Company, the articles of amalgamation that created the Holding Company (the “Articles”) and the USA, the application judge determined that s. 9.01 of the USA constituted a clear waiver of any dissent rights triggered by the sale and liquidation of the Holding Company.


Reddick v. Robinson, 2024 ONCA 116

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

Counsel:

J. Plotkin and R. Hassanzadeh, for the appellants

N. Sangrar and M. Khalid, for the respondents

Keywords: Real Property, Easements, Interpretation, Yekrangian v. Boys, 2021 ONCA 629, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417 (C.A.), Sattva Capital Corp. v. Creston Moly Corp, 2014 SCC 53, Herold Estate v. Canada (Attorney General), 2021 ONCA 579, 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273, Housen v. Nikolaisen, 2002 SCC 33, Gibbs v. Grand Bend (Village) (1995), 26 O.R. (3d) 644, Ontario (Attorney General) v. Walker (1970), [1971] 1 O.R. 151, Niagara River Coalition v. Niagara-on-the-Lake (Town), 2010 ONCA 173, Freeborne Developments Ltd. v. Corman Park (Rural Municipality), 2021 SKCA 48, Raimondi v. Ontario Heritage Trust, 2018 ONCA 750, Robb v. Walker, 2015 BCCA 117, Wesley v. Iles, 2013 ONCA 8, One West Holdings Ltd. v. Greata Ranch Holdings Corp., 2014 BCCA 67, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417, Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517

facts:

A single six-acre parcel of land on Lake Ontario in Prince Edward County – formerly owned jointly by CM, MM, and the late PM – was subdivided into three two-acre properties. The parties in this appeal each own one of these properties.

At the time of the subdivision, CM and MM/PM also each owned properties situated between the six-acre parcel and the lake. A private road separated those properties and the six-acre parcel. CM and MM/PM worked with a planner to create a 20 ft. by approximately 300 ft. strip of land between their respective properties to connect what is now the appellants’ property (the “Re property”) to the shores of Lake Ontario. The other two subdivided parcels were owned by the respondents (respectively, the “Ro property” and the “B property”). Title to the strip of land was held by the appellants, subject to an easement in favour of the R and B properties as follows:

[F]or the purposes of pedestrian access only in order to use and enjoy the shores of Lake Ontario, such use and enjoyment shall not include camping or the use or operation of motorized vehicles.

issues:
  1. What is the standard of review?
  2. Did the application judge err in his interpretation of “shores of Lake Ontario”?
  3. Did the application judge err in his interpretation of the scope of the easement?
  4. If the appellants succeed, should the Court remit the application to the Superior Court for reconsideration, or does the record permit the Court to substitute its decision?
holding:

Appeal allowed.

reasoning:
  1. Correctness standard

The Court has directed that where, as here, “an easement is created by express grant, the nature and extent of the easement are to be determined by the wording of the instrument creating the easement, considered in the context of the circumstances that existed when the easement was created”: Fallowfield at para 10. The principles of contractual interpretation as set out by the Supreme Cour in Sattva also apply to the interpretation of an easement: Herold Estate at para 44.

The appellants submitted that the application judge’s interpretation of “shores of Lake Ontario” was reviewable on a correctness standard because “shores” is a legal term of art. The Court disagreed, stating that the easement as a whole – including the term “shores” – must be interpreted with regard to its text and the broader factual matrix. It is a question of mixed fact and law that typically attracts deference.

The application judge had made errors in principle in his interpretation of the easement. He also misapprehended critical evidence. The application judge further erred by relying on inadmissible subjective intent evidence from CM concerning the creation of the easement – an extricable error of law is reviewable on a correctness standard: 2484234 Ontario Inc. at para 54.

  1. Yes.

The meaning of “shores of Lake Ontario” in the easement is the land lying between the high and low water marks. The term “shores”, having regard to the language used in the easement and the surrounding circumstances, means the area between the low and high-water mark. This conclusion was grounded in the text of the easement and in the clear distinction it drew between “shores” and the strip of land which provided access to the shores. The application judge erred in finding that the shore in this case included the raised grassy piece of land abutting the limestone shore; that is, the land just above the high-water line.

Camping and Motor Vehicles

Photographs of the limestone shore were filed as exhibits on the application. These photographs showed that it was possible for one to erect a tent and camp, and operate a smaller motorized vehicle (such as a dirt bike or ATV) when the water level was at its lowest.

The Court agreed with the appellants that for the application judge to have arrived at his conclusion that the prohibitions were “effectively redundant”, he must have either 1) failed to consider the photographs, or 2) inferred that, for the prohibitions to have meaning, it had to be possible to camp or drive a motorized vehicle on the shore regardless of where the water meets land and irrespective of weather or water conditions.

The Court noted that to accept the appellants’ interpretation would not render the prohibitions “effectively redundant”. Based on the photographs and description of the limestone shore, depending of course on the water-level, it was clear that one could camp and also drive a motorized vehicle on the shores. Thus, to prohibit these activities, the easement needed to expressly so provide, as it did.

The Official Plan

The only evidence that spoke to the role the Official Plan played in the creation of the easement came from CM, who testified about his subjective intent at the time. This was an inadmissible consideration when interpreting an agreement such as an easement: Hanley Park at paras 51-54. The application judge erred by relying on this evidence. The application judge also overstated the significance of, and thereby gave undue weight to, the Official Plan, which was merely a “framework of goals, objectives and policies [of a municipality] to shape and discipline specific operative planning decisions”.

The appellants’ interpretation was aligned with the Counties’ planning priorities and the language used in the easement itself, which had made clear that the strip of land was for “pedestrian access only” in order to “use and enjoy the shores of Lake Ontario”. There was no ambiguity. The easement was addressing two separate things: 1) access to the shores via the strip of land, and 2) the use and enjoyment of the shores. The pedestrian access route was separate and distinct from the use of the “shores of Lake Ontario”. The easement gave the respondents the right to “use and enjoy” the latter but not the former.

  1. Yes.

Reading the application judge’s reasons as a whole, the Court noted that the only logical conclusion was that this determination – like the application judge’s definition of “shores” – rested on the subjective intent of CM and MM/PM. As discussed earlier, subjective intent evidence was not admissible when interpreting an easement. Only objective evidence that speaks to the factual matrix can be considered.

The most relevant objective evidence that informed the factual matrix came from the appellants, who filed on the application a copy of the County’s Notice of Decision (the “Notice”) approving the rezoning application, and the municipality’s Planning Staff Report (the “Report”), which tracked the language in the Notice.

The Notice and the Report were instructive in two main respects. First, they showed that the rezoning application was aimed specifically at providing the lot owners with access to Lake Ontario. The permitted uses under the amended zoning were not determinative of the easement’s scope. Zoning does not in and of itself establish interests or rights in land: 2022177 Ontario Inc. at para 35. Rather, the rezoning application must be considered as a whole to glean objective evidence of intent – in this case, unobstructed access to Lake Ontario – which in turn becomes part of the factual matrix: Freeborne Developments Ltd. at paras 42-45.

Second, the Notice and the Report indicated that two types of access to Lake Ontario were contemplated: direct access (for the appellants, who are titleholders) and legal access (for all landowners, including the respondents). Again, this was objective evidence that shed light on the surrounding circumstances at the time the easement was created, including the parties’ intentions. It should have informed the application judge’s consideration of the factual matrix, but it seemed that it did not. Without the subjective intent evidence of CM – and after considering only the language used in the easement and the objective evidence highlighted by the appellants – the inevitable conclusion was that the easement restricted the respondents to “pedestrian access only” for the purpose of ingress to and egress from the “shores of Lake Ontario”.

  1. The Court was of the view that it was in a position to decide the issue and dispose of the application, which it did.

Dissent (van Rensburg JA)

Justice van Rensburg noted that majority decision was an impractical and unsatisfactory result that was inconsistent with the plain and ordinary meaning of the words used in the easement and with the objective intentions of the parties who created the easement, which was, as the application judge reasonably concluded, to provide the owners of the dominant tenements (here, the respondents), with the same rights as the owners of the servient tenement (here, the appellants) in relation to the use and enjoyment of the shores of Lake Ontario.

Van Rensburg JA concluded that there were no reversible errors in the application judge’s decision. He understood and applied the correct legal principles, reasonably concluding that the appellants were not entitled to the declarations they sought: first, that the respondents were limited to using the easement to access Lake Ontario and second that “shores of Lake Ontario” referred to the lands lying between the actual waters of Lake Ontario and the “water’s edge” mark according to the Reference Plan. He rejected the appellants’ interpretation of the easement that would restrict the respondents to using and enjoying the uneven limestone rocks, and not the Grassy Area.


Cohen v. Cohen, 2024 ONCA 114

[Nordheimer, Copeland and Dawe JJ.A.]

Counsel:

A. Franks and A. Weinerman, for the appellant

No one appearing for the respondent

Keywords: Family Law, Property, Equalization of Net Family Property, Matrimonial Home, Family Law Act, R.S.O. 1990, c. F.3, s.4,7,8, Hamilton v. Hamilton (1996), 92 O.A.C. 103 (C.A.), Roberts v. Roberts, 2015 ONCA 450

facts:

The appellant and the respondent were married in 2005 and separated on August 17, 2021. The appellant commenced a proceeding on February 9, 2022.

In August 2022, the appellant brought a motion seeking to proceed with an uncontested trial in writing and an order permitting her to sell the matrimonial home without the respondent’s consent. The respondent filed materials in response to the appellant’s motion and brought a cross-motion for an extension of time to serve an answer to the appellant’s claim.

On August 29, 2022, Faieta J. dismissed the respondent’s cross-motion and granted the appellant’s motion. Faieta J. ordered that the respondent was not entitled to notice of any further steps in the proceeding except for service of an order. He permitted the appellant to proceed with an uncontested trial in writing. Faieta J. also granted the appellant permission to sell the matrimonial home without the respondent’s consent or signature. He ordered that the net proceeds of the sale be held in trust pending further direction from the court.

The appellant sought the release to her of all of the net proceeds from the sale of the matrimonial home.  Notwithstanding the lack of financial disclosure by the respondent, the trial judge held that he was entitled to an equalization payment.

issues:

Did the trial judge err in finding that the respondent was entitled to an equalization payment?

holding:

Appeal allowed. Motion to adduce fresh evidence dismissed.

reasoning:

Yes.

On the record before the trial judge, that finding was a palpable and overriding error. There was a wholly inadequate factual basis to assess the net family property of the respondent. Absent that information, there was no basis on which to order an equalization payment.

None of the information about the respondent’s assets and liabilities that would have been necessary to calculate his net family property was disclosed by the respondent or in the trial record. There was no evidence of the respondent’s assets or debts and liabilities at the date of the marriage or on the valuation date, and no evidence of any of the other financial information required to be disclosed under s. 8 of the FLA.

Further, ordering an equalization payment in favour of the respondent in the face of such non-disclosure created incentives that are contrary to the objectives of both the FLA and the Family Law Rules. It gives the non-disclosing spouse the benefit of a finding in their favour while denying the other spouse and the court any evidence to assess the assets of the non-disclosing spouse.


Tewari v. Sekhorn, 2024 ONCA 123

[van Rensburg, Roberts and Gomery JJ.A.]

Counsel:

G.T., acting in person

P.A. Downard, for the respondents

Keywords: Civil Procedure, Appeals, Vexatious Litigation, Rules of Civil Procedure, r.2.1.01, Salasel v. Cuthbertson, 2015 ONCA 115, 1522491 Ontario Inc. v. Stewart, Esten Professional Corporation, 2010 ONSC 727, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Tewari v. McHenry, 2022 ONCA 335, Tewari v. Sachdeva and Miller Thomson LLP, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720

facts:

Mr. T. was dismissed from his employment on February 1, 2019. He sued his former employer, Marcatus QED, as well as three of its employees or directors (the “Marcatus defendants”). He later began an action against the respondents, the lawyer and law firm who represented the Marcatus defendants in Mr. T.’s lawsuit. Mr. T. claimed that, in representing the Marcatus defendants, the respondents engaged in an illegal conspiracy, defamed him, and breached their fiduciary duties to him.

The motion judge granted the respondents’ motion to strike the statement of claim, without leave to amend.

issues:

Did the motion judge err in striking Mr. T’s statement of claim?

holding:

Appeal dismissed.

reasoning:

No.

Mr. T’s appeal was frivolous, vexatious and an abuse of the court’s process.  As held in Scaduto v. The Law Society of Upper Canada,, there are generally two conditions required for r. 2.1 to apply. First, the frivolous, vexatious, or abusive nature of the proceeding should be apparent on the face of the pleading. Second, there should be a reason for the court to dismiss the action in the absence of a motion. As noted in Scaduto, r. 2.1 is not for close calls.

This was not a close call. The grounds of appeal set out in the notice of appeal had no merit and no possibility of success. Furthermore, Mr. T. was aware of them having no merit, as he advanced the same legal theories unsuccessfully in other lawsuits against lawyers acting for parties he had sued. Mr. T. tried to relitigate claims that have been found untenable in law on five separate occasions by three judges of first instance and two panels of the Court. This was an abuse of the courts’ processes that justified recourse to r. 2.1.


Royal Bank of Canada v. Cutler Forest Products Inc., 2024 ONCA 118

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

Counsel:

C. Colraine and F. Choi, for the appellant Paccar Leasing Company Ltd.

T. C. Hogan and R. Danter, for the respondent Fuller Landau Group Inc., in its capacity as court-appointed receiver in the within proceeding

R. Jaipargas, for the respondent Royal Bank of Canada

Keywords:Commercial Law, Contracts, General Security Agreements, Security Interests, Purchase Money Security Interests, True Leases, Bankruptcy and Insolvency, Receiverships, Priorities, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, Courts of Justice Act, R.S.O. 1990, c.C.43, Personal Property Security Act, R.S.O. 1990, c. P.10, Ministry of Government Services Consumer Protection and Service Modernization Act, 2006, S.O. 2006, c. 34 (Bill 152), Personal Property Security Act, S.B.C. 1989, c. 36 (BC PPSA), International Harvester Credit Corp of Canada v Bell’s Dairy Ltd (Trustee of), (1986), 30 D.L.R. (4th) 387 (Sask. C.A.), Giffen (Re), [1998] 1 S.C.R. 91, International Harvester Credit Corp. of Canada v Bell’s Dairy Ltd. (Trustee of), (1986), 30 D.L.R. (4th) 387 (Sask. C.A.)

facts:

The appellant, Paccar Leasing Company Ltd. (“Paccar”), appealed the motion judge’s order holding that the perfected security interest of Royal Bank of Canada (“RBC”) in the property of the debtor, Cutler Forest Products Inc. (“Cutler”), prevailed over Paccar’s unperfected security interest as the lessor and owner of the three commercial trucks that it had leased to Cutler, thus permitting the Fuller Landau Group Inc. (the “Receiver”) to take possession of and sell the trucks.

The heart of Paccar’s argument on appeal was that because it retained title over the trucks in the debtor’s possession pursuant to a “true” lease, its interest ranked in priority to the interests of either RBC or the Receiver, whose interests were derived from Cutler’s. The Receiver argued that Paccar’s position was incorrect and ignored the fundamental changes that came into effect with the reforms to the Personal Property Security Act, R.S.O. 1990, c. P.10 (“PPSA”), in 2007. RBC had a first in time registered security interest in Cutler’s present and after acquired personal property and undertaking pursuant to the GSA, which it entered into in April 2007. On October 22, 2020, Paccar and Cutler entered into a Canadian Vehicle Lease and Service Agreement (the “VLSA”), and pursuant to the VLSA, Paccar leased the three trucks in issue to Cutler. The VLSA provided that Paccar retained ownership of the trucks and was responsible for maintaining them in good repair.

issues:
  1. Can common law or any provision of federal or provincial law grant RBC or the Receiver greater property rights to the collateral than those possessed by Cutler, given that Paccar retained title under a “true lease” arrangement?
  2. Does subsection 20(1)(b) of the PPSA, which states that a security interest in collateral is not effective against a person representing the creditors of the debtor, serve as a specific legislative override that does not apply to the Receiver in this context?
  3. Did the motion judge err in rejecting Paccar’s submission that Section 57.1 of the PPSA exempts “true leases” from the operation of the priority system in the PPSA?
holding:

Appeal dismissed.

reasoning:

1. Yes.

The motion judge discussed the 2007 changes to the PPSA, noting they fundamentally changed the law around the preservation and priority of a lessor’s interest. The PPSA, as of 2007, provided Paccar with the means of preserving the priority of its interest in the trucks over the interest of RBC under the GSA, but Paccar failed to perfect its interest. Ontario and Manitoba were the last two common law provinces to include leases of more than one year in their secured interest and priority legislation, aiming to modernize and simplify the regime of secured interests and priorities. The Supreme Court in Giffen (Re) found that the trustee could obtain greater rights than the bankrupt had, setting aside traditional concepts of title and ownership to a certain extent. This principle applied in the case, where RBC’s perfected security interest prevailed over Paccar’s unperfected security interest. The legislation provided a mechanism for the lessor to protect its interest by adhering to statutory requirements for registration and perfection. Paccar’s argument that neither RBC nor the Receiver could claim a greater interest in the collateral than that possessed by the debtor was based on a faulty premise, as the legislature made a policy choice to displace the common law principle, recognizing that leases of more than one year are security interests and will be protected as PMSIs provided they are perfected as required by the PPSA.

2. No.

The relevant parts of section 20 of the PPSA stated that until a security interest is perfected, it is subordinate to any person who has a perfected security interest in the same collateral. Paccar relied on subsection 20(1)(b) to argue that the Receiver was subordinate to its unperfected security interest. However, this ignored the fact that an unperfected interest in collateral was subordinate to a perfected interest, meaning Paccar’s security interest was subordinate to RBC’s, which held a General Security Agreement (GSA). Paccar misconstrued the Receiver’s role, suggesting the Receiver fell outside the “person who represents the creditors of the debtor” category and thus was subordinate to Paccar’s interest. The Receiver, appointed at the instance of RBC, stood in the debtor’s shoes, not the creditors’, and properly sought court directions regarding the trucks. The interpretation of section 20 in its entirety provided no basis to support Paccar’s claims about the effect of the section.

3. No.

Paccar argued that true leases are excluded from Part V because they do not secure payment of an obligation. The motion judge found that Part V did not apply to true leases in the way Paccar suggested, as it established a scheme of “self-help” rights and remedies which operate without the need for court intervention. Furthermore, the motion judge concluded that interpreting Section 57.1 to give Paccar priority over a perfected security interest would defeat the purpose of the PPSA amendments made in 2007, which aimed to modernize and simplify the regime of secured interests and priorities. These amendments displaced common law title and ownership in favor of the priority system under the PPSA, intending to reduce litigation over whether a lease fell under the PPSA. The modern PPSA places the dispute as one of priority to the collateral and not ownership in it, indicating that true leases, while excluded from Part V, are still within the scope of the Act for conflicts, perfection, and priority portions, fundamentally altering how leases of more than one year are treated under the law.



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.