Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of January 15, 2024.

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In Di Filippo v. Bank of Nova Scotia, the plaintiffs sought to amend their pleadings to add new defendants and amend existing claims in the context of class actions against some of the biggest financial institutions in the world for alleged conspiracies to fix the price of gold and silver. The motion judge had dismissed the motion on the basis that the claims were statute-barred. The Court allowed the appeal, applying the test for discoverability set out in the Supreme Court’s decision in Grant Thornton LLP.. Justice Huscroft dissented in respect of three of the banks that were added as defendants. He was of the view that the discoverability analysis was a question of mixed fact and law and was entitled to deference on appeal.

In Kikites v. York Condominium Corporation No. 382, the case involved a noise-related dispute between the appellant and the condominium corporation. The application judge found there had been no oppression by the condo corp. It had investigated reasonably and the results of the noise testing did not reveal any required action. The unit owner who had been the source of the noise was not a party to the application. On appeal, the appellant made a new argument for a compliance order against the non-party unit owner who was making the noise. The Court dismissed the appeal. The appellant could not introduce a new argument on appeal. Furthermore, the condominium corporation had limited authority over the interior of privately owned units and the unit holder who was making the noise would have to be a party before any significant renovation remedies could be ordered to eliminate the noise issues.

In the case of 9806881 Canada Corp. v. Swan, the appellants successfully appealed the application judge’s decision, which had declared they did not have a possessory lien over the respondent’s aircraft under the Repair and Storage Liens Act. The appellants were permitted to hold onto the aircraft pursuant to their lien rightsand the dispute was remitted to trial to determine whether the work that was the subject of the unpaid invoices was authorized.

In Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., the Court dismissed an appeal regarding a priority dispute between first and second mortgagees. The Court agreed with the motion judge who found that the pre-payment fees and default fees charged by the first mortgagees pursuant to a forbearance agreement were unenforceable as they breached the Interest Act and, in any event, did not have priority over the second mortgage, as the second mortgagee was not a party to the forbearance agreement.

In Urbancorp Inc., the appellant sought to appeal the dismissal of its summary judgment motion in a case involving the termination of a co-tenancy agreement for a condominium project. The court dismissed the motion, affirming the motion judge’s findings that the parties operated at arm’s length and there was no attempt to evade creditors.

In Jarvis v. Jarvis, the Court refused to stay the order for exclusive possession of the matrimonial home for the purpose of selling it pending appeal.

Wishing everyone a nice weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Urbancorp Inc. v. 994697 Ontario Inc., 2024 ONCA 26

Keywords: Bankruptcy and Insolvency, Reviewable Transactions, Fraudulent Conveyances, Preferences, Civil Procedure, Summary Judgment, Appeals, Leave to Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, S 95-96, Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, Assignments and Preferences Act, R.S.O. 1990, c. A.33, Companies’ Creditors Arrangement Act, R.S.C., 1985, c. C-36, Re Panfab Corp. Ltd., Duro Lam Limited v. Last et al., [1971] 2 O.R. 202 (H.C.J), Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Urbancorp Inc. v. 994697 Ontario Inc., 2023 ONCA 126, Stelco Inc. (Re) (2005), 75 O.R. (3d) 5 (C.A.), Timminco Limited (Re), 2012 ONCA 552, Nortel Networks Corporation (Re), 2016 ONCA 332, Urbancorp Toronto Management (Re), 2022 ONCA 181

Jarvis v. Jarvis, 2024 ONCA 32

Keywords: Family Law, Matrimonial Home, Exclusive Possession, Sale, Civil Procedure, Appeals, Stay Pending Appeal, Family Law Act, R.S.O. 1990, c F.3, s. 23(b)(iii), Rules of Civil Procedure, r. 63.02, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Zafar v. Saiyid, 2017 ONCA 919

Di Filippo v. Bank of Nova Scotia, 2024 ONCA 33

Keywords: Torts, Conspiracy, Unfair Competition, Price-Fixing, Civil Procedure, Class Proceedings, Amending Pleadings, Limitation Periods, Discoverability, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s 5(1), Competition Act, R.S.C. 1985, c C-34, Part VI, Rules of Civil Procedure, rr. 5.02(2), 5.04(2), 26.01,  Polla v. Croatian Credit (Toronto) Union Limited, 2020 ONCA 818, Blueberry River First Nation v. Laird, 2020 BCCA 76, Strathan Corporation v. Khan, 2019 ONCA 418, Crombie Property Holdings Ltd. v. McColl-Frontenac Inc., 2017 ONCA 16, Fercan Developments Inc. v. Canada (Attorney General), 2021 ONCA 251, Kaynes v. BP p.l.c., 2021 ONCA 36, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Mancinelli v. Royal Bank of Canada, 2018 ONCA 544

Kikites v. York Condominium Corporation No. 382, 2024 ONCA 34

Keywords: Real Property, Condominiums, Remedies, Oppression, Compliance Orders, Condominium Act, 1998, S.O. 1998, c. 19, s. 134, 135, York Condominium Corporation No. 221 v. Mazur, 2024 ONCA 5, Mohamoud v. Carleton Condominium Corporation No. 25, 2021 ONCA 191, 716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, R. v. G.F., 2021 SCC 20, 1346134 Ontario Ltd. v. Wright, 2023 ONCA 307, Farej v. Fellows, 2022 ONCA 254, leave to appeal refused, [2022] S.C.C.A. No. 180, Hague v. Hague, 2022 BCCA 325, Zaman v. Toronto Standard Condominium Corporation No. 1643, 2020 ONSC 1262, Dyke v. Metropolitan Toronto Condo Corp. No. 972, 2013 ONSC 463

9806881 Canada Corp. v. Swan, 2024 ONCA 35

Keywords: Contracts, Repair and Storage Liens, Possessory Liens, Repair and Storage Liens Act, R.S.O. 1990, c. R.25

Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., 2024 ONCA 42

Keywords: Contracts, Debtor-Creditor, Real Property, Mortgages, Priority, Interest, Legality, Pre-payment Fees, Default Fees, Interest Act, R.S.C. 1985, c. I-15, s.8, Mortgages Act, R.S.O. 1990, c. M.40, s.17, P.A.R.C.E.L. Inc. v. Acquaviva, 2015 ONCA 331, Reliant Capital Ltd. v. Silverdale Development Corp., 2006 BCCA 226, Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18, We Care Funding Limited Partnership v. LDI Lakeside Developments Inc. et al, 2021 ONSC 7466

Short Civil Decisions

Rahman v. Ramnarine, 2024 ONCA 30

Keywords: Family Law, Divorce

2137073 Ontario Inc. v. Furney, 2024 ONCA 37

Keywords: Civil Procedure, Summary Judgment

The Governing Council of the Salvation Army in Canada v. Patient Ombudsman, 2024 ONCA 40

Keywords: Administrative Law, Health Law, Standard of Review, Reasonableness, Excellent Care for All Act, 2010, SO 2010, c 14, s 13.3(5), Nowegijick v The Queen, [1983] 1 SCR 29

Sanson v. Paterson, 2024 ONCA 44

Keywords: Costs.

CIVIL DECISIONS

Urbancorp Inc. v. 994697 Ontario Inc, 2024 ONCA 26

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

J. Sacks, for the moving party

C. E. Reed, for the responding parties

Keywords: Bankruptcy and Insolvency, Reviewable Transactions, Fraudulent Conveyances, Preferences, Civil Procedure, Summary Judgment, Appeals, Leave to Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, S 95-96, Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, Assignments and Preferences Act, R.S.O. 1990, c. A.33, Companies’ Creditors Arrangement Act, R.S.C., 1985, c. C-36, Re Panfab Corp. Ltd., Duro Lam Limited v. Last et al., [1971] 2 O.R. 202 (H.C.J), Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Urbancorp Inc. v. 994697 Ontario Inc., 2023 ONCA 126, Stelco Inc. (Re) (2005), 75 O.R. (3d) 5 (C.A.), Timminco Limited (Re), 2012 ONCA 552, Nortel Networks Corporation (Re), 2016 ONCA 332, Urbancorp Toronto Management (Re), 2022 ONCA 181

facts:

Downing Street Financial Inc. (“Downing Street”) sought leave to appeal from an order dismissing its motion for summary judgment and granting the summary judgment motion of the responding parties to dismiss an action by Downing Street and other creditors. Downing Street was an assignee of a claim from Fuller Landau Group Inc., the Monitor appointed under the Companies’ Creditors Arrangement Act (“CCAA”) of the estates of Edge on Triangle Park Inc. (“Edge”), Bosvest Inc. (“Bosvest”), and Urbancorp Cumberland 2 LP. This motion arose out of the long-running CCAA proceedings of the Urbancorp group of companies.

Downing Street’s claim related to a co-tenancy agreement involving a 19-story condominium project owned by Edge in trust for Bosvest and 994697 Ontario Inc. (“InvestorCo”). Bosvest was controlled by Urbancorp and held a two-thirds beneficial interest in the project. InvestorCo, a corporation owned by members of the Jacobs/Kaufman families, owned the remaining one-third beneficial interest. InvestorCo and Bosvest were equal shareholders of Edge.

The parties agreed to terminate the co-tenancy agreement and entered into an agreement which required InvestorCo to release its one-third interest in the project and its mortgage securing that interest. In exchange, InvestorCo received a 100% interest in 44 of the condominium units valued at the time at approximately $7 million. Two significant factors motivated Urbancorp to end the co-tenancy with InvestorCo: avoiding possible litigation with the Jacobs/Kaufman family; and a pending $65 million bond issue in Israel to refinance Urbancorp’s operations. A short time after the bond issue closed, substantially all of the Urbancorp companies commenced insolvency proceedings. An order was granted in the CCAA proceedings in April 2018, which permitted the Monitor to commence claims and assign them to creditors.

As an assignee of the claims, Downing Street alleged that the co-tenancy termination transaction was: 1. void under s. 95(1)(b) of the Bankruptcy and Insolvency Act (“BIA”); 2. void under s. 96(1)(b)(i) of the BIA; and 3. a fraudulent preference under s. 96(1)(a) of the BIA and/or the Fraudulent Conveyances Act, and the Assignments and Preferences Act.

issues:
  1. Was the test for granting leave to appeal met?
  2. Did the motion judge commit an error in principle when finding that Edge was operating at arm’s length with respect to the impugned transaction?
  3. Did the motion judge commit an error in principle when finding that Edge was solvent at the time of the transfer?
  4. Did the motion judge commit an error in principle when finding that the Jacobs/Kaufman family, as owners of Edge, were not attempting to evade creditors?
holding:

Motion dismissed.

reasoning:
  1. No.

The Court noted that the commencement of and assignment of the claims in this case were authorized by a CCAA judge and that order was “made under” the CCAA such that leave to appeal is required under the CCAA. Accordingly, the usual test for granting leave under the CCAA applied.

In determining whether leave should be granted, the Court considers whether: a. the proposed appeal is prima facie meritorious or frivolous; b. the points on the proposed appeal are of significance to the practice; c. the points on the proposed appeal are of significance to the action; and d. the proposed appeal will not unduly hinder the progress of the action: Stelco Inc. (Re) (2005) at para. 24.  Leave to appeal is generally only granted sparingly and only where there are “serious and arguable grounds that are of real and significant interest to the parties”: Stelco, at para. 24

The Court concluded that leave was not warranted in this case. The Court was not satisfied that the proposed appeal was prima facie meritorious, nor that it raised issues of significance to the insolvency practice. While the appeal may have been of significance to this action, standing alone, this factor was insufficient to warrant granting leave to appeal in this case: Nortel Networks Corporation (Re), at para. 95.

  1. No.

Section 4(5) of the BIA provides that persons who are “related” to each other are deemed not to deal with each other at arm’s length. Section 4(2) also provides a definition of “related parties” which depends upon establishing the element of control. Given that the relevant definitions remain unchanged, the Court found no compelling reason to depart from the long-accepted view that deadlocked shareholders do not have de jure control of a corporation. As found by the motion judge, InvestorCo did not have de jure control of Edge.

Further, s. 4(4) of the BIA provides that “[i]t is a question of fact whether persons not related to one another were at a particular time dealing with each other at arm’s length.” Absent palpable and overriding error, the motion judge’s finding is entitled to deference: Montor Business Corporation v. Goldfinger, at para. 66. Here, the motion judge was satisfied on his review of the record that Edge was operating at arm’s length from InvestorCo. The Court saw no palpable and overriding error in his assessment.

Additionally, that factual underpinning meant that establishing “control” for the purposes of s. 95(1)(b) or s. 96(1)(b) of the BIA was dependent on the particular facts of each case. Accordingly, the legal issue as to whether Edge operated at arm’s length was not one that necessarily transcended the interests of these particular parties to be of significance to the practice at large.

  1. No.

On the basis of the motion judge’s factual finding that the parties operated at arm’s length, the claims under ss. 95(1)(b) and 96(1)(b) of the BIA were properly dismissed, and it was not necessary for the motion judge to consider the insolvency aspect of the test under s. 95(1)(b).

  1. No.

It was reasonably open to the motion judge to conclude that Edge had not transferred the units with the intent to defraud, defeat, or delay creditors. He reviewed the relevant badges of fraud and found the evidence of fraud wanting. The Court concluded that there was no palpable and overriding error in his conclusions, and his finding on this point was also entitled to deference.


Jarvis v. Jarvis, 2024 ONCA 32

[Miller J.A. (Motions Judge)]

Counsel:

D.J, acting in person

S. C. Quinn and E. Kostandoff, for the respondent/responding party/moving party by way of cross-motion

Keywords: Family Law, Matrimonial Home, Exclusive Possession, Sale, Civil Procedure, Appeals, Stay Pending Appeal, Family Law Act, R.S.O. 1990, c F.3, s. 23(b)(iii), Rules of Civil Procedure, r. 63.02, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Zafar v. Saiyid, 2017 ONCA 919

facts:

The parties are spouses who have been separated since 2017. Post-separation, the moving party wife lived with the two children of the marriage in the matrimonial home. The responding party husband is the owner of the matrimonial home and has been renting accommodation nearby. The responding party claims that he has accumulated a crushing debt load, is in arrears on property taxes, and rent, and has maxed out his credit. The moving party does not accept that the responding party has any of the debt that he claims. She argues that if he is in debt, it is because he maintains a profligate lifestyle.

The responding party, by way of order, was granted exclusive possession to the matrimonial home in order to prepare for its sale, and was authorized to sell the matrimonial home without the consent of the moving party pursuant to s. 23(b)(iii) of the Family Law Act. The moving party sought a stay of that order pending appeal of that order. The responding party brought a cross-motion to dismiss the moving party’s motion.

issues:

Should a Stay of the order granting the responding party exclusive possession of the house be granted?

holding:

Motion dismissed.

reasoning:

No.

The Court applied the test governing motions for a stay under r. 63.02 of the Rules of Civil Procedure from RJR-MacDonald Inc. v. Canada (Attorney General). The test requires a reviewing court to make three inquiries:

  1. A preliminary assessment of the merits of the appeal, to determine whether the appeal raises a serious question;
  2. A determination of whether the appellant would suffer irreparable harm if the order were refused;
  3. A determination of which of the parties would suffer greater harm from granting or refusing the stay pending a decision on the merits of the appeal.

In considering the three inquiries above, the Court held that the moving party raised many grounds of appeal. Although the grounds were weak, they were not frivolous or vexatious, and the motion could not be disposed of on this ground alone.

The Court held that the harm faced in this case was not irreparable. Irreparable harm in this case involves the impact on both the moving party and the children of the marriage. The harm identified by the moving party is that in the immediate term she will be unable to secure rental accommodation in the immediate neighbourhood suitable for her and the two children. The Court held that there are rental properties available in the neighbourhood that would satisfy the needs of the children both to adequate housing and to enable them to maintain the benefit of friendships, schools, and extracurricular activities.

In conducting a balance of convenience, the Court noted that the stay undeniably casts a burden on the moving party. In all likelihood, the matrimonial home will be sold prior to either the appeal or the trial and she will have to find an alternative accommodation. The situation is ultimately not as burdensome as the moving party made it out to be. The order provided that the children can remain in the house with the responding party while the responding party readies it for sale. The order further provided that the date the responding party receives exclusion possession of the matrimonial home could be delayed, at the responding party’s discretion, if the moving party agrees to temporarily vacate the property to allow the moving party access to the property to ready it for sale, including painting, repairs, and staging.

If the responding party does not sell the matrimonial home, he will not only lose his housing, but risks a sale of the matrimonial home by the mortgagee. This would be detrimental to the financial interests of both parties. Therefore, the Court held that the RJR-MacDonald Inc. v. Canada (Attorney General) test was not met, and a stay of the order was not warranted.


Di Filippo v. Bank of Nova Scotia, 2024 ONCA 33

[Feldman, Huscroft and Paciocco JJ.A.]

Counsel:

L. Sokolov and R. Mogerman, for the appellants

M. Eizenga, E. Davis, and S. Babwani, for the respondents JP Morgan Chase & Co., J.P. Morgan Bank Canada, J.P. Morgan Canada, and JP Morgan Chase Bank National Association

J. Fabello, J. Gotowiec, and C. Koopman, for the respondents Bank of America Corporation and Merrill Lynch Commodities Inc.

M. Milne-Smith and M. O’Sullivan, for the respondent Morgan Stanley Capital Group Inc.

K. Kay and Z. Smith, for the respondents UBS AG, UBS Bank (Canada), and UBS Securities LLP

M. Evans, A. Goodman, and T. Cesareo, for the respondents HSBC Bank Canada, HSBC Bank PLC, HSBC Holdings PLC, HSBC Securities (Canada) Inc., HSBC USA Inc., and HSBC Securities (USA) Inc.

I. Alame, for the respondents The Bank of Nova Scotia and Scotia Capital (USA) Inc.
E. Dillon and C. Naudie, for the respondents Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc., Barclays Capital Inc., and Barclays Capital PLC

L. Jackson, for the respondent London Gold Market Fixing Ltd.

L. Thacker and J. Kras, for the respondents Société Générale, Société Générale (Canada), Société Générale SA, and SG Americas Securities, LLC

Keywords: Torts, Conspiracy, Unfair Competition, Price-Fixing, Civil Procedure, Class Proceedings, Amending Pleadings, Limitation Periods, Discoverability, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s 5(1), Competition Act, R.S.C. 1985, c C-34, Part VI, Rules of Civil Procedure, rr. 5.02(2), 5.04(2), 26.01,  Polla v. Croatian Credit (Toronto) Union Limited, 2020 ONCA 818, Blueberry River First Nation v. Laird, 2020 BCCA 76, Strathan Corporation v. Khan, 2019 ONCA 418, Crombie Property Holdings Ltd. v. McColl-Frontenac Inc., 2017 ONCA 16, Fercan Developments Inc. v. Canada (Attorney General), 2021 ONCA 251, Kaynes v. BP p.l.c., 2021 ONCA 36, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Mancinelli v. Royal Bank of Canada, 2018 ONCA 544

facts:

The plaintiffs/appellants moved to amend their pleadings in this class action brought against a number of financial institutions for conspiracy to fix the market and the trading prices of gold and silver over a period of years. The action claimed that the defendants used various illegal methods and practices to fix the prices, depriving the class of the actual value of their trades.

The amendments sought to add a number of financial institutions as defendants and to amend the claims against the existing defendants. The motion judge dismissed the motion in its entirety. He found that the proposed amendments constituted time-barred new claims, and in the case of one bank, while the claim was not time-barred, it could not be joined in the action because it did not arise out of the same transaction or occurrence.

The representative plaintiffs had commenced two class actions against a number of financial institutions that were involved in the international gold and silver trading markets as “market makers”, for conspiracy to fix the prices of gold and silver respectively, and implementing the fixes in a number of ways, all to the detriment of the class. The action in respect of gold (“Gold action”) was commenced on December 18, 2015, and the action in respect of silver (“Silver action”) was commenced on April 15, 2016.

Prior to the motion to amend, the statements of claim had already been amended numerous times. The motions for certification were scheduled for October 2020, but then adjourned to allow the representative plaintiffs to seek further amendments, following the release of decisions in 2019 and 2020 by the U.S. regulatory body, the Commodity Futures Trading Commission (“CFTC”), which made findings and orders against two of the existing defendant institutions, UBS and HSBC, and against four other financial institutions, Bank of America, Merrill Lynch, JP Morgan, and Morgan Stanley.

issues:
  1. Regarding UBS and HSBC, did the motion judge err in law by finding that the proposed claim for non-collusive spoofing constituted a new cause of action and was therefore time-barred?
  2. Regarding Bank of America, Merrill Lynch and Morgan Stanley, did the motion judge err in law by finding that class counsel had “actual knowledge” of a claim for conspiracy to fix precious metals prices based on knowledge of pleadings in a U.S. action or of an investigation in another country?
  3. Regarding JP Morgan, did the motion judge err in law by finding that it was not a proper party to the class proceedings and did not meet the joinder test under Rule 5 of the Rules of Civil Procedure because the CFTC Order of September 2020 found the bank guilty of intra-bank spoofing and not collusive spoofing?
holding:

Appeal allowed.

reasoning:
  1. Yes.

The Court began by stating that the CFTC order dated January 29, 2018, against Deutsche Bank, UBS and HSBC was made more than two years before the motion to amend on October 30, 2020. Therefore, the proposed amendment was out of time if it sought to add a new claim, as defined in the Limitations Act, 2002.

The motion judge found that “…the proposed amendments (re non-collusive spoofing) are indisputably time-barred…they allege new facts re non-collusive, intra-bank spoofing and propose a new cause of action.” Although the motion judge’s reasons were very briefly stated, it was clear that he viewed non-collusive spoofing and collusive spoofing as giving rise to two different causes of action: spoofing and conspiracy to spoof. He also stated that new facts are alleged to support the non-collusive spoofing claim.

The Supreme Court clarified when a plaintiff discovers that they have a claim. It is when they have knowledge, either actual or constructive, “of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn”: Grant Thornton LLP at para. 42. The plausible inference standard means that the plaintiff does not have to be certain that the known facts will give rise to legal liability, but the plaintiff must have knowledge of the material facts that form the basis for the plausible inference of legal liability

The Court noted that it is the pleading of the facts that is key. If a statement of claim pleaded all the necessary facts to ground a claim on more than one legal basis, and the original statement of claim only asserted one of the legal bases – that is, one cause of action based on those facts – the statement of claim could be amended more than two years after the claim was discovered to assert another legal basis for a remedy arising out of the same facts – that is, another cause of action. The Court explained that this is because it is only the discovery of the claim, as defined in the Limitations Act, 2002 and the case law, that is time-barred under s. 4, not the discovery of any particular legal basis for the proceeding.

Where a limitation period has run its course, allowing or disallowing the amendment depends upon whether the allegations of the proposed amendment arise out of the already pleaded facts, in which case the amendment will be allowed, but if they do not the amendment will be refused. An amendment of a statement of claim to assert an alternative theory of liability or an additional remedy based on facts that have already been pleaded in the statement of claim does not assert a new claim for the purposes of s. 4 of the Limitations Act, 2002. While the legal basis or cause of action for the original remedy that was sought against the defendants was conspiracy, particularized as both civil conspiracy and conspiracy pursuant to Part VI of the Competition Act, the pleadings alleged as facts that the conspiracy was carried out by the defendants. They fixed the prices of gold and silver on the trading markets over a lengthy period of time using a number of illegal techniques, including what the wrongdoers have called spoofing and painting the screen.

The motion judge erred in law by finding that the proposed amendments were statute-barred because they allege new facts and a new cause of action. The additional facts in the proposed amendments constituted evidence of the facts already pleaded or further details of those facts. Further, the proposed amendments, which included claims for damages for non-conspiratorial spoofing, constituted “an alternative theory of liability or an additional remedy based on facts that have already been pleaded”. They had not pleaded a new claim under the Limitations Act, 2002.

  1. Yes,

The motion judge had found that the proposed amendments seeking to add Bank of America, Merrill Lynch and Morgan Stanley as new parties to the action were statute-barred.

The broad test for discoverability is: “the material facts upon which a plausible inference of liability on the defendant’s part can be drawn.” To meet this standard, the plaintiff must have “actual or constructive knowledge that: (a) the injury loss or damage occurred; (b) the injury loss or damage was caused by or contributed to by an act or omission; and (c) the act or omission was that of the defendant.”: at para. 43.

In assessing the plaintiff’s state of knowledge, both direct and circumstantial evidence can be used. Moreover, a plaintiff will have constructive knowledge when the evidence shows that the plaintiff ought to have discovered the material facts by exercising reasonable diligence. Suspicion may trigger that exercise: Crombie at para 42. Suspicion may trigger the diligence obligation, but suspicion does not constitute actual knowledge. In Kaynes v. BP p.l.c., the Court held that knowledge of allegations in pleadings does not, without more, constitute actual knowledge of one’s claim.

The motion judge erred by treating facts which might trigger a duty to investigate as material facts sufficient to trigger the limitation period – in his words, “the who and the what”. The class plaintiffs in this case had actual knowledge that there was a conspiracy among a number of financial institutions to fix and manipulate the price of gold and silver on the trading markets. That was the “what.” However, based on the allegations in the U.S. pleadings and in the press release of the Swiss Competition Commission (“WEKO”) regarding its investigation, they only had suspicion of the “who”. Both a statement of claim and a government investigation, by their very nature, express allegations, not facts.

Actual knowledge does not materialize when a party can make a “plausible inference of liability.” Rather, actual knowledge materializes when a party has “the material facts upon which a plausible inference of liability on the defendant’s part can be drawn”. While class counsel may have had reason to suspect that Bank of America, Merrill Lynch and Morgan Stanley were part of the conspiracy, that suspicion was not actual knowledge. Because the U.S. pleadings and WEKO press release had not disclosed the necessary material facts, it was an error of law to find that the proposed amendments were statute-barred on the basis that class counsel had actual knowledge of the claims against Bank of America, Merrill Lynch and Morgan Stanley more than two years before the motion to amend was brought.

Section 5(1)(b) of the Limitations Act, 2002 sets out an alternative, objective basis for finding that a limitation period has commenced, based on when the plaintiff ought to have known the facts that form the basis for the claim and therefore had constructive knowledge of it. The motion judge in this case did not decide when the plaintiffs had constructive knowledge that they had a claim under s. 5(1)(b) because he agreed with the submissions of the defendants that the plaintiffs had actual knowledge of it.

The effect of s. 5(1)(b) is to impose an obligation of due diligence on those who have reason to suspect that they may have a claim, but who do not yet have actual knowledge of the material facts giving rise to that claim: Crombie, at para. 42. Where potential plaintiffs sit idle or fail to exercise due diligence, the limitation period will commence on the date that the claim would have been discoverable had reasonable investigatory steps been taken. In other words, it is the date when the potential plaintiffs have constructive, as opposed to actual knowledge of their claim: Grant Thornton, at para. 44. A court determining this issue will require evidence of how the material facts could reasonably have been obtained more than two years before the motion to add was brought: Mancinelli, at paras. 28, 31.

  1. Yes.

The motion judge found that JP Morgan was not a proper party to the conspiracy actions because the evidence relied on by the class plaintiffs for amending the statements of claim to add JP Morgan as a party came only from the CFTC order that found extensive spoofing by JP Morgan traders over many years, but did not find that they did it as part of an inter-bank conspiracy.

The motion judge made a palpable and overriding error of fact by finding that the CFTC order found that none of the spoofing by JP Morgan was conspiratorial spoofing. In his review of the CFTC order dated September 29, 2020 against JP Morgan, the motion judge failed to consider a number of the findings that were made. From the size, extent and number of years that the spoofing scheme took place at JP Morgan, overlapping with the period when the other banks were allegedly conducting their conspiracy, and the fact that two JP Morgan traders pled guilty to spoofing and conspiracy to spoof, it cannot be said from the CFTC order and the other information about JP Morgan’s involvement in the market manipulation through spoofing, that only intra-bank and not conspiratorial spoofing took place.

Because the proposed amendments to the statements of claim that alleged intra-bank spoofing conduct by each of the defendant banks was allowed, the Court noted that there was no legal basis to deny the amendment adding the defendant JP Morgan to the actions.

Huscroft J.A. (dissenting in part):

The motion judge’s decision that the claims against Bank of America, Merrill Lynch, and Morgan Stanley are time barred was entitled to deference.

The motion judge was managing these proceedings for an extended period of time and was well familiar with the facts. His reasons were short but they did not preclude appellate review. The motion judge’s finding that plaintiffs’ counsel had actual knowledge of ongoing investigations and parallel U.S. legal proceedings commenced earlier was amply supported in the record.

Justice Huscroft did not accept that there was an extricable error that was subject to review for correctness. Whether a limitation period has expired prior to the commencement of an action is a question of mixed fact and law subject to review on a palpable and overriding error standard: Crombie at para 31. Determining when a claimant has obtained actual knowledge of a claim is case-specific: Albert Bloom Limited at para 31. Absent a palpable and overriding error or an extricable error of principle, the determination is entitled to deference: Fercan Developments Inc. at para 11.

The motion judge did not err in concluding that the record and inferences he drew from it were sufficient to satisfy the actual knowledge of material facts standard. In this case, the pleadings in the U.S. proceedings asserted facts and it was open to the motion judge to find that a plausible inference of liability for the Bank of America and Merrill Lynch could be drawn from them. Although the WEKO press release concerning Morgan Stanley was less detailed than the pleadings involving the Bank of America and Merrill Lynch, the appellants relied on that investigation in their statement of claim. Further, although the motion judge pointed to some documents as sufficient to show actual knowledge, there was general knowledge of the investigations and foreign proceedings that were underway – the motion judge referred to “widespread media reports and the publicly available information (easily accessible on Google or PACER) that would have been known to class counsel as far back as December 2016.”

The Court concluded that it was open to the motion judge to find the appellants had actual knowledge of their claims against Bank of America, Merrill Lynch, and Morgan Stanley more than two years before they brought their motion to amend.


Kikites v. York Condominium Corporation No. 382, 2024 ONCA 34

[Gillese, Trotter and Coroza JJ.A.]

Counsel:

S. G. Lemke, E. Chapple, and A. Cheung, for the appellant

A. Sharabi and L. Clark, for the respondent

Keywords: Real Property, Condominiums, Remedies, Oppression, Compliance Orders, Condominium Act, 1998, S.O. 1998, c. 19, s. 134, 135, York Condominium Corporation No. 221 v. Mazur, 2024 ONCA 5, Mohamoud v. Carleton Condominium Corporation No. 25, 2021 ONCA 191, 716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, R. v. G.F., 2021 SCC 20, 1346134 Ontario Ltd. v. Wright, 2023 ONCA 307, Farej v. Fellows, 2022 ONCA 254, leave to appeal refused, [2022] S.C.C.A. No. 180, Hague v. Hague, 2022 BCCA 325, Zaman v. Toronto Standard Condominium Corporation No. 1643, 2020 ONSC 1262, Dyke v. Metropolitan Toronto Condo Corp. No. 972, 2013 ONSC 463

facts:

The appeal arose from a noise-related dispute between the appellant and York Condominium Corporation No. 382 (the “Corporation”). The appellant is a unit holder in a building of a unit directly below the unit occupied by Ms. C. and her twin children, a son and a daughter. According to the appellant, the noise emanating from Ms. C’s unit was bothersome. The Corporation investigated over 200 noise complaints from the appellant and even offered to conduct a noise study, which the appellant declined initially. After four years, the complaints resumed in 2020. At the end of March 2021, the appellant retained counsel and noise testing commenced.  The Corporation’s testing found no significant sound events. The appellant commissioned a noise test between November 5 and 15, 2021 that reported significant intrusions.

The appellant brought an application in the Superior Court seeking various forms of relief under the Condominium Act, S.O. 1998, c. 19 (the “Act”), including $300,000 in damages. Importantly, Ms. C was not made a party to this application, even though she was examined as a non-party. The application was dismissed without a costs award.

issues:
  1. Did the application judge fail to apply the relevant two-part test for the oppression remedy?
  2. Did the application judge fail to consider the broad range of remedies available in s. 135(3) of the Act?
  3. Did the application judge fail to consider other relevant provisions of the Act?
  4. Did the application judge err in finding that he could not grant the remedy requested because Ms. C. was not a party to the proceedings?
holding:

Appeal dismissed.

reasoning:
  1. No

The Court stated that the test for oppression is set out in Mohamoud v. Carleton Condominium Corporation, another case involving a condominium corporation’s response to a noise complaint: “Under s. 135(2) of the Act, the court must determine whether the impugned conduct is, or threatens to be, oppressive or unfairly prejudicial to the applicant or unfairly disregards their interests. The test under s. 135(2) has two prongs. First, the court must assess whether there has been a breach to the claimant’s reasonable expectations. If the answer is yes, the court must then go on to consider whether the conduct complained of amounts to oppression, unfair prejudice, or unfair disregard of the relevant interest.”

In terms of the appellant’s argument that the application judge failed to explicitly state and then apply the two-part test for oppression, the Court followed the direction of the Supreme Court of Canada in R. v. G.F: “A trial judge is under no obligation to expound on features of criminal law that are not controversial in the case before them.” The approach is not restricted to the criminal law; it enjoys application in other realms of appellate review.

Although the application judge did not specifically refer to s. 135, when read as a whole, his reasons revealed an appreciation of the principles engaged by that provision.  In reviewing the application judge’s reasons where it is alleged that a condominium corporation has acted oppressively, the two steps of the oppression test may tend to merge. Although the noise complaint was the underlying factual premise of the application, the legal issue was what the appellant could reasonably have expected the Corporation to do about it.

The reasons of the application judge reflected that he considered these issues to be interrelated. The analysis of steps one and two of the test merged – the application judge found neither a breach of reasonable expectations nor conduct that was unfairly prejudicial or that unfairly disregarded the interests of the appellant. There was no basis for the application judge to intervene. The actions of the Corporation were well within the range of reasonable choices. It could not be said that the Corporation unfairly disregarded the appellant’s interests in addressing this difficult situation.

  1. No

Given that the application judge did not find that the test for oppression had been met, it was not strictly necessary to consider other remedies available to him under s. 135(3) of the Act. Nevertheless, this submission was without merit. The application judge was not required to consider alternative remedies that the applicant did not request.

  1. No

Different counsel appearing at the appeal hearing attempted to take the case in a different direction. His focus was on the failure of the application judge to make a compliance order under s. 134 of the Act. The new submission essentially ignored all previously made oppression submissions and was focused on an alleged nuisance originating in Ms. C’s unit.

The appellant could not be permitted to re-cast his application at such a late stage in the appellate process. The application was all about the steps, or lack of steps, taken by the Corporation in responding to the noise situation. The appellant made a litigation choice to focus these proceedings on the Corporation instead of on Ms. C. Although the appellant made some references to s. 134 in his Amended Notice of Application, and in his written submissions to the application judge, the application judge was not asked to undertake the analysis that the Court was asked to “review” on appeal. To allow the appellant to change direction would require the Court to engage in a fact-finding exercise, which is not the role of an appellate court. Moreover, permitting a new issue to be raised at this juncture ran counter to the interests of finality in litigation.

  1. No

The appellant sought redress against the Corporation through the oppression remedy. Although Ms. C was examined as a non-party, she did not participate in the application. The trial judge thoroughly addressed the issue in his reasons: “The condominium corporation – the one and only Respondent before me – has done what it could and has not been oppressive in its conduct. It is not in a position, and cannot be expected, to either do internal renovations to another unit owner’s unit. And given the conflicting sound engineering evidence and the fact that the noise is non-bothersome all day long, the Respondent is not in a position to compel another unit owner to renovate her unit. In any case, the Court certainly would not be in a position to order such a remedy without fulsome participation and legal submissions from that unit owner.” There was no error in the application judge’s approach.


9806881 Canada Corp. v. Swan, 2024 ONCA 35

[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: Contracts, Repair and Storage Liens, Possessory Liens, Repair and Storage Liens Act, R.S.O. 1990, c. R.25

facts:

The appellants appealed the application judge’s order declaring that they did not have a possessory lien over the respondent’s aircraft under the Repair and Storage Liens Act. The appellants asserted a possessory lien over the respondent’s aircraft arising out of unpaid repairs. The respondent paid the appellants $1,066,097.16 for repairs to the respondent’s aircraft. The dispute between the parties focused on the unpaid work outlined in the appellants’ April 19, 2023 invoice, which was delivered following the commencement of the respondent’s application.

issues:

Did the application judge err in vacating the lien given her direction that the parties could litigate whether there were any amounts owing to the appellants for repairs carried out on the respondent’s aircraft?

holding:

Appeal allowed.

reasoning:

Yes.

The appellants claimed a possessory lien for unpaid repairs on the aircraft. Despite payments made by the respondent, a contention arose over the April 19, 2023, invoice for additional work. The appellants argued this work was authorized, while the respondent viewed it as outside the agreed scope or unauthorized. The application judge acknowledged additional work on the aircraft but found it unauthorized due to lack of written consent. The Court found that the application judge did not fully address the evidence suggesting the respondent’s authorization of the additional work. Consequently, the Court concluded that the appellants had a possessory lien under the RSLA until further determination. The case was remitted to trial to address whether the work described in the April 19, 2023, invoice fell under the original agreements, whether it was authorized by the respondent, and the amounts, if any, owed to the appellants.


Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., 2024 ONCA 42

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

Counsel:

K. Sherkin, for the appellants

B. Rumble and J. Bonniere, for the respondent Greenpath Capital Partners Inc.

W. Jaskiewicz, for the respondents East Sovereign GP Inc. and Blake Andrew Wyatt

Keywords: Contracts, Debtor-Creditor, Real Property, Mortgages, Priority, Interest, Legality, Pre-payment Fees, Default Fees, Interest Act, R.S.C. 1985, c. I-15, s.8, Mortgages Act, R.S.O. 1990, c. M.40, s.17, P.A.R.C.E.L. Inc. v. Acquaviva, 2015 ONCA 331, Reliant Capital Ltd. v. Silverdale Development Corp., 2006 BCCA 226, Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18, We Care Funding Limited Partnership v. LDI Lakeside Developments Inc. et al, 2021 ONSC 7466

facts:

This case concerned the proceeds of sale of certain properties in Oakville sold under power of sale. The appellants held a first mortgage over the properties, which was owned by the respondent East Sovereign GP Inc. (“East Sovereign”). This first mortgage secured a principal sum of $7,182,000 for a one-year term commencing March 1, 2020.

The respondent Greenpath Capital Partners Inc. (“Greenpath”) registered a second mortgage against the properties, securing a principal sum of $700,000 for the same term as the first mortgage.

East Sovereign fell into arrears on payments under the first mortgage well before the maturity date. East Sovereign, W (the principal of East Sovereign and guarantor of the first mortgage), the First Mortgagees, and Trilend (the mortgage broker) entered into a forbearance agreement (the “Forbearance Agreement”) dated January 1, 2021. Greenpath was not a party to the Forbearance Agreement.

East Sovereign failed to satisfy the entire amount that it was required to pay under the Forbearance Agreement. The First Mortgagees commenced power of sale proceedings by Notice of Sale dated March 25, 2021, and the sale of the properties ultimately closed on August 24, 2021, for $9,000,000. Under the Notice of Sale, the First Mortgagees claimed a total of $7,588,191.38.

Following the sale of the properties, the First Mortgagees issued and served a discharge statement dated August 17, 2021 (the “Discharge Statement”). While the Notice of Sale set out the total amount due to the First Mortgagees as $7,588,191.38, the Discharge Statement claimed $7,983,687.04, which is $395,495.66 more than the amount set out in the Notice of Sale. This difference was largely made up of a pre-payment fee of $103,958.64 and a default fee in the amount of $179,550.00 that the First Mortgagees claimed under the Forbearance Agreement (the “Disputed Amounts”).

The First Mortgagees paid out $522,278.81 to Greenpath to partially pay out the second mortgage around November 4, 2021. Before the application judge, Greenpath claimed that the First Mortgagees were not entitled to the Disputed Amounts and sought payment of the whole amount of $762,436.42 set out in Greenpath’s discharge statement.

The First Mortgagees appealed from the application judge’s order holding that they did not have priority over the Greenpath mortgage to collect certain disputed amounts ($283,508.64) from the proceeds of sale. They also appealed against the dismissal of their application to recover the disputed amounts from East Sovereign.

issues:
  1. Did the application judge err in finding that the appellants had no priority over Greenpath with respect to the Disputed Amounts?
  2. Did the application judge err in finding that the Disputed Amounts constituted a prohibited penalty pursuant to s. 8 of the Interest Act?
holding:

Appeal dismissed.

reasoning:
  1. No.

First, there was no error in the application judge’s conclusion that the First Mortgagees could not claim priority with respect to the Disputed Amounts because Greenpath was not a party to the Forbearance Agreement and the Disputed Amounts did not properly arise from the first mortgage. The wording of the Standard Charge Terms of the first mortgage, and the relevant provision, clause 19, did not allow for increases in the principal balance or any other parts of the first mortgage, other than the rate of interest. On this basis, the applicant judge found that the Forbearance Agreement was not “subsumed” into the first mortgage and that it was a separate agreement that was not enforceable against Greenpath.

Second, the application judge properly rejected the argument that the $103,958.64 prepayment fee was a 3% lender fee to the broker, Trilend, which was already included in the first mortgage commitment. There was no evidence that the Forbearance Agreement was a renewal of the first mortgage, nor that the alleged renewal fee was an actual cost incurred by the First Mortgagees.

In any event, even if the Disputed Amounts properly fell under the first mortgage, they were an unlawful penalty contrary to s. 8 of the Interest Act and were thereby unenforceable against Greenpath as the second mortgagee, East Sovereign as the owner and mortgagor of the properties, and Wyatt as the guarantor of the first mortgage.

  1. No.

There was no error on the part of the application judge in the analysis and conclusion that the disputed fees effectively constituted prohibited interest charges under s. 8 of the Interest Act. Section 8 of in the Interest Act serves a protective purpose, as Parliament intended for mortgages on real estate to be treated differently than other loans.

The application judge found that the Disputed Amounts could not be recovered by the First Mortgagees from the proceeds of sale for two reasons.

First, in considering the default fee, the application judge dismissed the First Mortgagees’ arguments that the parties contracted out of s. 8(1) and that s. 8(1) was consumer protection legislation that did not apply to the facts of the case. The wording of s. 8(1) was not narrow enough to exclude property holders like East Sovereign, and it was not open to the parties to contract out of this statutory public policy protection. East Sovereign was entitled to the protection of s. 8(1).

Second, as in P.A.R.C.E.L., the First Mortgagees did not discharge their onus of establishing the basis for the calculation of the $7,544,405 amount that was contained in both the Forbearance Agreement and the Discharge Statement. The application judge also noted that the Notice of Sale made specific reference to the Disputed Amounts. Moreover, though the evidence established that the Notice of Sale “wrongly broke out the amounts,” the First Mortgagees did not provide a breakdown of how they should have been, or in fact were, broken out.

In P.A.R.C.E.L., at para. 96, the Court made it clear that the onus is on the mortgagee claiming the amounts following default to prove that they “reflect real costs legitimately incurred by the [mortgagee] for the recovery of the debt, in the form of actual administrative costs or otherwise”.

In the absence of evidence that the charges in question reflect real costs legitimately incurred by the respondents for the recovery of the debt, in the form of actual administrative costs or otherwise, the only reason for the charges was to impose an additional penalty or fine, apart from the interest otherwise payable under the Mortgage, thereby increasing the burden on the appellants beyond the rate of interest agreed upon in the Mortgage. The courts have not hesitated to disallow similar charges on the basis that they offend s. 8 of the Interest Act.

On the issue of the prepayment fee, there was an absence of any evidence that the prepayment fee was an actual expenditure on the part of the First Mortgagees, or any requirement that the First Mortgagees pay the fee to Trilend. The prepayment fee represented an increase in the interest rate pertaining to monies in default, in excess of the interest rate payable upon monies not in default, contrary to s. 8 of the Interest Act.

The First Mortgagees’ arguments with respect to the default fee were neither borne out by the evidence nor supported in law. Though the First Mortgagees argued that the fee corresponded to three months’ interest in accordance with s. 17 of the Mortgages Act, the application judge found there was no evidence that the fee was calculated in accordance with s. 17, nor that the amount in the Forbearance Agreement included an amount arising from s. 17. The application judge also referred to the finding in We Care that, once a mortgagee undertakes enforcement proceedings, it can no longer collect a three-month interest bonus as doing so would constitute a penalty and therefore offend the Interest Act: at para. 71.


SHORT CIVIL DECISIONS

Rahman v. Ramnarine, 2024 ONCA 30

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

M.R., acting in person

No one appearing for the respondent

Keywords: Family Law, Divorce

2137073 Ontario Inc. v. Furney, 2024 ONCA 37

[Roberts, Coroza and Gomery JJ.A.]

Counsel:

D. Laframboise, for the appellants

D. Campoli, J. D. Sobel and A. Freedland, for the respondents

Keywords: Civil Procedure, Summary Judgment

The Governing Council of the Salvation Army in Canada v. Patient Ombudsman , 2024 ONCA 40

[Nordheimer, Copeland and Dawe JJ.A.]

Counsel:

E. Sunshine and E. Gardiner, for the appellant

M. Sampson and M. Bacal, for the respondents

Keywords: Administrative Law, Health Law, Standard of Review, Reasonableness, Excellent Care for All Act, 2010, SO 2010, c 14, s 13.3(5), Nowegijick v The Queen, [1983] 1 SCR 29

Sanson v. Paterson, 2024 ONCA 44

[Doherty, Pepall and Zarnett JJ.A.]

Counsel:

D. Zarek and M. C. Owen, for the appellant John B. Paterson

N. Koutsoubos-Giovanoglou and K. Temple, for the appellant Security National Insurance Company

N. G. Wilson and M. Coker, for the respondent

Keywords: Costs


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

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

Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of January 8, 2024.

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In Zafar v Azeem, the mother’s appeal against a decision that ordered her three-year-old child to return to Pakistan, where the father claimed the child was habitually resident, was allowed. She successfully argued procedural unfairness due to the motion judge’s failure to allow for cross-examinations or a viva voce hearing of contested evidence and failure to properly consider the child’s best interests, habitual residence, and risk of serious harm. The mother was also successful in setting aside the recognition of the divorce the husband obtained in Pakistan, which had been obtained unilaterally and without sufficient notice.

In Lyng v. Ontario Place Corporation, Ontario Place unsuccessfully appealed the trial judge’s decision to find it 75% responsible for the respondent’s slip and fall on its premises. In order to cross Lakeshore Boulevard following a concert during which it had rained, the respondent and other concertgoers decided to go down a wet hill abutting the boulevard after an Ontario Place security guard had closed the bridge passing over the Boulevard.

In Espartel Investments Limited v. Metropolitan Toronto Condominium Corporation No. 993, the Court dismissed the appellant condominium corporation’s appeal on a discoverability issue regarding the overpayment of hydro bills by the respondent hotel. The hotel sued for unjust enrichment after it discovered that a cost-sharing agreement between the hotel and the condo corp inequitably allocated hydro usage to the hotel.

In Cuthbert v. Nolis, the Court dismissed an appeal from a review of a Final Order regarding parenting, indicating that while the granting of a right to a review under a final order is rare, it can be appropriate in certain circumstances. When there is a review provided for in a final order, there is no need to show a material change in circumstances.

In Elbassiouni v. Brenn, the Court dismissed an appeal from a summary judgment dismissing a claim regarding deficiencies in a home following closing of the purchase. This was a Simplified Procedure matter and the motion judge excluded transcript evidence from cross-examinations because Rule 76.04 does not permit cross-examinations on affidavits in Simplified Procedure. The Court agreed that the motion judge was correct to exclude the evidence.

In Duraisami v. Yaworski, the Court dismissed an appeal from a summary judgment on a guarantee.

Finally, in Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., the Court upheld the dismissal by the motion judge of an anti-SLAPP motion against Canadian Tire. The claim by Canadian Tire was for fraud and other intentional torts against third-party vendors who were alleged to have falsely asserted entitlement to payment for work under Canadian Tire’s customer return program. The defendants claimed that Canadian Tire was selling defective and dangerous tools not approved by the Canadian Standards Association, and that they were sued by Canadian Tire for the purpose of stopping them from bringing this to the public light. The motion judge and the Court found that Canadian Tire’s claim did not target the defendants’ expression on a matter of public interest.

Wishing everyone a nice weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Cuthbert v. Nolis, 2024 ONCA 21

Keywords: Family Law, Parenting Time, Review, Civil Procedure, Evidence, Documents, Admissibility, Hearsay, Amending Pleadings, Children’s Law Reform Act, R.S.O. 1990, c. C. 12, s 29, Family Law Rules, O. Reg. 114/99, r 11(3), M. (K.A.A.) v. M. (J.M.), 2005 NLCA 64, Sappier v. Francis, 2004 NBCA 70, Fournier v. Fournier, 2020 ONSC 606, Y.M.S. v. R.O.S., 2021 ONSC 6684, Leskun v. Leskun, 2006 SCC 25, Fisher v. Fisher, 2008 ONCA 11, Children and Family Services v. G.S., 2011 ONSC 1732, Studley v. Studley, 2022 ONCA 810, Davidson v. Davidson, 2021 ONSC 7459, Alajajian v. Alajajian, 2021 ONCA 602, Johanson v. Hinde, 2016 ONCA 430, Palmer v. The Queen, [1980] 1 S.C.R. 759, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

Zafar v. Azeem, 2024 ONCA 15

Keywords: Family Law, Parenting, Relocation, International Child Abduction, Foreign Divorces, Civil Procedure, Procedural Fairness, Divorce Act, RSC 1985, c. 3 (2nd Supp), Children’s Law Reform Act, RSO 1990, c. C 12, s. 22, Family Law Rules, O. Reg. 114/99, r. 37.2(3), Hague Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983 No. 35, Geliedan v Rawdah, 2020 ONCA 254, Ojeikere v Ojeikere, 2018 ONCA 372, Office of the Children’s Lawyer v Balev, 2018 SCC 16, F v N, 2022 SCC 51, Pollastro v Pollastro (1999), 43 OR (3d) 485 (CA)

Espartel Investments Limited v. Metropolitan Toronto Condominium Corporation No. 993, 2024 ONCA 18

Keywords: Contracts, Real Property, Condominiums, Cost-Sharing Agreements, Restitution, Unjust Enrichment, Defences, Equitable Set-Off, Civil Procedure, Limitations Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., Van Allen v. Vos, 2014 ONCA 552, 121 O.R. (3d) 72, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, 461 D.L.R. (4th) 613, Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47, 144 O.R. (3d) 385, Crombie Property Holdings Limited v. McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16, 406 D.L.R. (4th) 252

Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25

Keywords: Torts, Defamation, Anti-SLAPP, Civil Procedure, Costs, Courts of Justice Act, RSO 1990, c C 43, s 137.1, Schwartz et al. v Collette, 2021 ONSC 2138, Brad-Jay Investments Limited v Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Algra v Comrie Estate, 2023 ONCA 811, Veneruzzo v. Storey, 2018 ONCA 688

Lyng v. Ontario Place Corporation, 2024 ONCA 23

Keywords: Torts, Negligence, Occupier’s Liability, Slip and Fall, Duty of Care, Standard of Care, Causation, “But For” Test, Damages, Occupier’s Liability Act, R.S.O. 1990, c. O.2, s. 3, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Moore v. Sweet, 2017 ONCA 182, Housen v. Nikolaisen, 2002 SCC 33, Waldick v. Malcolm, [1991] 2 S.C.R. 456, Malcolm v. B.C. Transit (1988), 32 B.C.L.R. (2d) 317 (C.A.), Winters v. Haldimand (County), 2015 ONCA 98, Athey v. Leonati, [1996] 3 S.C.R. 458, Clements v. Clements, 2012 SCC 32, Ault v. Canada (Attorney General), 2011 ONCA 147, Lazare v. Harvey, 2008 ONCA 171, Woelk  v. Halvorson, [1980] 2 S.C.R. 430, S.M. c. Sternthal Katznelson Montigny, 2021 QCCA 673, Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58

Elbassiouni v. Brenn, 2024 ONCA 28

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Simplified Procedure, Summary Judgement, Evidence, Admissibility, Rules of Civil Procedure, rr. 39.02, 76.04

Duraisami v. Yaworski, 2024 ONCA 27

Keywords: Breach of Contract, Civil Procedure, Simplified Procedure, Summary Judgment, Rules of Civil Procedure, r. 76, Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, Manthandi v. ASCO Manufacturing, 2020 ONCA 485, Hryniak v. Mauldin, 2014 SCC 7, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Short Civil Decisions

Jakubov v. Sun Life Assurance Company of Canada, 2024 ONCA 16

Keywords: Civil Procedure, Summary Judgment, Limitation Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Winmill v. Woodstock (Police Services Board), 2017 ONCA 962


CIVIL DECISIONS

Cuthbert v. Nolis, 2024 ONCA 21

[Brown, George and Monahan JJ.A.]

Counsel:

G. Joseph and J. McArthur, for the appellant

D. E. (T.) Cuthbert, acting in person

Keywords: Family Law, Parenting Time, Review, Civil Procedure, Evidence, Documents, Admissibility, Hearsay, Amending Pleadings, Children’s Law Reform Act, R.S.O. 1990, c. C. 12, s 29, Family Law Rules, O. Reg. 114/99, r 11(3), M. (K.A.A.) v. M. (J.M.), 2005 NLCA 64, Sappier v. Francis, 2004 NBCA 70, Fournier v. Fournier, 2020 ONSC 606, Y.M.S. v. R.O.S., 2021 ONSC 6684, Leskun v. Leskun, 2006 SCC 25, Fisher v. Fisher, 2008 ONCA 11, Children and Family Services v. G.S., 2011 ONSC 1732, Studley v. Studley, 2022 ONCA 810, Davidson v. Davidson, 2021 ONSC 7459, Alajajian v. Alajajian, 2021 ONCA 602, Johanson v. Hinde, 2016 ONCA 430, Palmer v. The Queen, [1980] 1 S.C.R. 759, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

facts:

The appellant mother and respondent father began cohabiting in 2010 and separated in 2014. They never married but had two children: a 12-year-old son, G, and a 10-year-old daughter, K. Following separation, the appellant acted as the custodial parent. The respondent had parenting time with the children on Wednesday evenings and every other weekend. He never accepted this parenting arrangement as fair and commenced an application. He also brought three motions seeking increased parenting time, all three of which were unsuccessful.

On August 1, 2018, after a ten-day trial, Goldstein J. awarded joint custody and ordered that the respondent continue to have parenting time on Wednesday evenings and every other weekend (the “2018 order”). However, Goldstein J. also held that the respondent “should, gradually, have the opportunity to increase access with a view to eventually reaching 50/50”.

On August 6, 2019, the respondent brought a motion to increase his parenting time on a step-up basis to an equal “2/2/5/5” schedule. On May 3, 2022, the trial judge found in favour of the respondent and awarded him gradually increasing parenting time, with the children ultimately residing with each parent on a “2/2/5/5” schedule.

issues:
  1. Did the trial judge err by changing a final order when there was no material change in circumstances?
  2. Did the trial judge err by admitting and relying on hearsay evidence?
  3. Did the trial judge err by permitting the respondent to amend his pleadings at trial?
  4. Did the trial judge err by failing to consider the best interests of the children?
  5. Should the Court grant the appellant leave to admit fresh evidence relating to what has occurred during the respondents parenting time with the children?
  6. Did the trial judge err in awarding costs?
holding:

Appeal dismissed.

reasoning:
  1. No.

The 2018 order – despite being styled a final order – expressly permitted the respondent to apply for a change to the parenting schedule. It in no way required him to demonstrate a material change in circumstances.

While a review term in a final parenting time order is relatively rare, it is well established that courts have jurisdiction to impose them: M. (K.A.A.) at paras 25-36. A review term under a parenting time provision in a Final Order creates a rare and narrow exception to the usual requirement that a material change in circumstances be shown to vary a parenting order: Y.M.S. at para 70.

Courts have recognized that it is generally in the best interests of children to provide them “with stability in their lives following family breakdown” by incorporating “some sense of finality into child-care arrangements” M. (K.A.A.), at para. 26. For this reason, review terms are seldom ordered and must be 1) justified by genuine and material uncertainty at the time the original order is made, and 2) tightly delimited with respect to the issue or issues that will be subject to review: Leskun, at paras. 37-39. A court-ordered review “removes the need for an aggrieved parent to ‘guesstimate’ when things have reached the point that he or she must return the matter to court”: M. (K.A.A.), at para. 26. The Court therefore established that in some circumstances, such as this case, a review term may be appropriate but should be limited to situations where the parties’, or children’s, circumstances were uncertain at the time the original order was made. At the time of the 2018 order it was unclear what was causing G’s anxiety, nor was the extent of it well understood. The Court noted that while the fact a child is aging will never, on its own, amount to a material change in circumstances, when the 2018 order was made Goldstein J. found that “[G’s] anxiety seems to have improved with age” which, in the Court’s view, made a review term reasonable.

The trial judge’s finding was rooted in and amply supported by the fact that G’s anxiety had “improved sufficiently” from 2018 until the order under appeal, and that it was “no worse when he is with [the respondent] than with [the appellant]”. The trial judge carefully reviewed evidence relating to G’s anxiety from multiple sources, including G’s counsellor, G’s schoolteachers, and the s. 112 report from the Office of the Children’s Lawyer (“OCL”). The Court concluded that his factual findings were reasonable and entitled to deference.

  1. No.

The appellant’s hearsay complaint was in relation to the trial judge’s decision to admit a letter from Dr. Noble, a psychologist who had met with G, which expressed her view that G had not required long-term counselling or more serious treatment for his anxiety. Apart from the fact that the appellant cross-examined the respondent on the content of this letter, the Court observed that the appellant had not objected to its admission, and that it was referenced by the OCL clinician in her report. The Court noted that there was a basis upon which the trial judge could have assessed the level of G’s anxiety, including the respondent’s evidence, the absence of a formal diagnosis, and the indication that G was doing well in school.

  1. No.

As it had not given rise to any prejudice, or otherwise disadvantage the appellant, the trial judge had not erred by permitting the respondent to amend his pleadings at trial. The appellant had ample opportunity to present her case and respond to the respondent’s position. Moreover, it is well-established that the test for leave to amend under r. 11(3) of the Family Law Rule strongly favours permitting amendments except in the clearest of cases: Studley, at para. 15; Davidson at para. 22. The trial judge reasonably concluded that this was not such a case, and his decision was entitled to deference: Studley, at para. 15.

  1. No.

The best interest of the children is the only relevant consideration when assessing a child’s residence, decision-making authority, and parenting time. The trial judge cited the applicable provisions of the Children’s Law Reform Act and carefully considered the relevant factors. A trial judge’s factual findings are entitled to substantial deference, especially in family law cases, where the court can interfere “only where the fact related aspects of the [trial] judge’s decision … [exceed] a generous ambit within which reasonable disagreement is possible and is plainly wrong”: Alajajian at para. 4.

The fresh evidence consisted primarily of correspondence relating to incidents during the respondent’s parenting time and the resulting impact on the children’s mental and physical health. According to the appellant, the fresh evidence directly dealt with the trial judge’s decision to ignore the voice of the children and the views of the OCL and failed to consider the results of G’s mental health assessment.

The appellant’s fresh evidence motion was dismissed. None of the evidence she sought to admit met the criteria in Palmer v. The Queen at p. 775. Rather, the evidence was essentially an extension of the evidence placed by the appellant before both Goldstein J. and the trial judge.

  1. No.

An award of costs by a trial judge is an exercise in discretion and will only be set aside when the trial judge has made an error in principle or if the costs award is plainly wrong: Hamilton at para. 27. While the appellant was granted leave to appeal the trial judge’s costs award, it was reasonable and owed deference.


Zafar v. Azeem, 2024 ONCA 15

[Fairburn A.C.J.O., van Rensburg and Zarnett JJ.A.]

Counsel:

M. J. Stangarone and T. Guo, for the appellant

B. Olsen, N. Besner and V. Floca-Maxim, for the respondent

Keywords: Family Law, Parenting, Relocation, International Child Abduction, Foreign Divorces, Civil Procedure, Procedural Fairness, Divorce Act, RSC 1985, c. 3 (2nd Supp), Children’s Law Reform Act, RSO 1990, c. C 12, s. 22, Family Law Rules, O. Reg. 114/99, r. 37.2(3), Hague Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983 No. 35, Geliedan v Rawdah, 2020 ONCA 254, Ojeikere v Ojeikere, 2018 ONCA 372, Office of the Children’s Lawyer v Balev, 2018 SCC 16, F v N, 2022 SCC 51, Pollastro v Pollastro (1999), 43 OR (3d) 485 (CA)

facts:

The appellant (the “mother”) had applied for a declaration that the parties’ three-year-old child, “A”, was habitually resident in Ontario, seeking sole decision-making responsibility and primary residency for A. The respondent (the “father”) had brought an urgent motion, as he had already commenced an action for related relief set to be heard in Pakistan in six weeks. He requested the Superior Court to dismiss the mother’s application, arguing that the child was habitually resident in Lahore, Pakistan, and also sought an order to dispense with the mother’s consent for the child’s travel to Pakistan.

In response, the mother asked the Ontario court to retain jurisdiction and consider the father’s divorce in Pakistan as invalid. However, the father succeeded in all respects. The child was ordered to return to Pakistan within 14 days of the decision, with or without the mother’s consent, based on affidavit evidence. The motion judge concluded that the divorce obtained in Pakistan was valid, dismissed the mother’s application, and found that A was habitually resident in Pakistan, ordering her return to that jurisdiction. If the child was not returned, the mother’s consent to the child’s travel would be dispensed with.

issues:
  1. Was the summary process relying only on affidavit evidence where there was significant conflict between the parties’ versions of events procedurally unfair?
  2. Was s. 22 of the Children’s Law Reform Act improperly applied to determine the child’s habitual residence?
  3. Was s. 23 of the CLRA improperly applied when the motion judge determined that no serious harm would come to the child if she was returned to Pakistan?
  4. Did the motion judge err in recognizing the divorce in Pakistan based on the evidence provided?
holding:

Appeal allowed.

reasoning:
  1. Yes.

The Court agreed with the appellant mother’s arguement that she was denied procedural fairness in the case’s handling, claiming the motion judge erred in addressing whether the child, A, was habitually resident in Ontario or Pakistan and whether returning to Pakistan would pose a serious harm risk. The judge also neglected to consider whether ordering A’s return to Pakistan was in her best interests. The mother contended that due to conflicting affidavit evidence, these issues should not have been decided without proper time for preparation, including cross-examination or viva voce testimony. The scheduling judge had accepted the father’s urgency claims, leading to an expedited hearing without cross-examinations. This approach led to unresolved conflicts in key evidence concerning habitual residence and serious harm. As a result, the mother was denied procedural fairness and natural justice in determining A’s habitual residence, the risk of serious harm, and the decision to order A’s return to Pakistan without considering her best interests, especially as Canada does not recognize Pakistan under the Hague Convention.

  1. Yes.

The judge identified “habitual residence” as crucial for deciding the child’s jurisdiction under the CLRA. The parents disagreed on the child’s habitual residence: the father claimed A lived with her mother in Pakistan with his consent after they agreed to separate, while the mother insisted the trip to Pakistan was temporary. The motion judge, without making credibility findings, concluded A was habitually resident in Pakistan, based on conflicting affidavit evidence. The mother’s evidence suggested that A’s stay in Pakistan was prolonged due to the father not facilitating her return, casting the return to Canada in a different light, not as “self help” but as part of the original plan. This situation called for a deeper examination of parental intent in determining habitual residence, as a child’s world at A’s age revolves around their primary caregiver, in this case, the mother. Without testing the mother’s evidence, the motion judge was not in a position to accurately determine habitual residence, leaving open the possibility that A’s habitual residence could in fact be Ontario and not Pakistan.

  1. Yes.

The Court stated that, even if the motion judge was right in determining Pakistan as A’s habitual residence, the allegations of serious harm to the mother required a more thorough evidentiary hearing before concluding that there was no serious risk of harm to A if returned. The mother alleged serious harm if A was returned to Pakistan, citing instances of physical and emotional violence from the father. These allegations included physical assaults during and after pregnancy, death threats, and financial neglect. The motion judge, however, dismissed these as irrelevant to A’s risk of serious harm, which was an error as such violence towards a parent can create serious harm to a child. Under the Divorce Act and CLRA, family violence must be considered when assessing a child’s best interests. The father’s argument that the court need not concern itself with domestic violence allegations was contrary to this requirement. A proper evidentiary hearing was needed to evaluate these allegations and consider their impact on A’s best interests. Even if A was deemed habitually resident in Pakistan, the court still needed to consider what order was in her best interests, such as possibly remaining in Ontario while parenting proceedings continued in Pakistan. This failure to consider A’s best interests based on a fully developed evidentiary record was a significant oversight.

  1. Yes.

The mother argued that she was not habitually resident in Pakistan for a year before the divorce proceedings but was temporarily in Pakistan, making her a habitual resident of Ontario. Therefore, the Pakistan divorce could only be recognized under s. 22(3) of the Divorce Act, based on conflicts of laws and common law principles. She claimed the divorce was given without sufficient notice and was a unilateral “bare talaq” by the father, which should not be recognized for public policy reasons. The motion judge, despite requiring evidence about the legal process in Pakistan, accepted problematic evidence and should not have decided without giving the mother a chance to develop the record. The judge’s conclusion that the mother was habitually resident in Pakistan for a year preceding the divorce conflicted with the mother’s claim that her extended stay was due to the father preventing her return. Given the contradictory evidence, the motion judge needed to justify rejecting the mother’s version.


Espartel Investments Limited v. Metropolitan Toronto Condominium Corporation No. 993, 2024 ONCA 18

[Gillese, Trotter and Coroza JJ.A.]

Counsel:

J.H. Nasseri and G. Vance, for the appellant

J. Kulathungam and N. Panamaldeniya, for the respondent

Keywords: Contracts, Real Property, Condominiums, Cost-Sharing Agreements, Restitution, Unjust Enrichment, Defences, Equitable Set-Off, Civil Procedure, Limitations Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., Van Allen v. Vos, 2014 ONCA 552, 121 O.R. (3d) 72, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, 461 D.L.R. (4th) 613, Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47, 144 O.R. (3d) 385, Crombie Property Holdings Limited v. McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16, 406 D.L.R. (4th) 252.

facts:

Since 1991, the parties co-occupying a mixed commercial and residential complex in Toronto have operated under a “Reciprocal Agreement,” under which they shared financial responsibility for utilities in the complex. The appellant, a condominium corporation, paid the hydro bill for the entire complex and then sent the respondent, a hotel, an annual invoice for its share of the utility costs.

Unfortunately, the formula was flawed with respect to its calculation of the respondent’s share of the electricity bill, leading to the respondent significantly overpaying for electricity. Between 2006 and 2015, the respondent overpaid by at least $730,000.

In 2015, the respondent became concerned over the amount of money it was paying for electricity. The appellant retained an engineering consultant to review the invoices and provide advice on electricity costs. On February 14, 2017, the consultant issued a report. The report identified the errors in the formulas used in the invoice. This report gave the parties actual knowledge of the errors for the first time.

On November 21, 2018, the respondent sued the appellant for unjust enrichment to recover its overpayments. The appellant defended primarily on the basis that the limitation period had passed, arguing that the respondent should have discovered the errors in the invoices more than two years prior to the commencement of the action. The appellant argued that, at the very latest, the errors became reasonably discoverable in 2015, when the then-new general manager felt that the invoices were charging for “outrageously high” electricity bills.

The trial judge found that the respondent did not have actual knowledge of the errors until 2017 and held that it would not have discovered the errors earlier through the exercise of reasonable due diligence.

issues:
  1. Did the trial judge err in her discoverability analysis, by erroneously finding that the errors were not evident on the face of the invoices?
  2. Did the trial judge err in law in her analysis of the respondent’s due diligence?
  3. Did the trial judge impermissibly conflate actual and constructive knowledge?
  4. Did the trial judge err in her determination of equitable set-off?
holding:

Appeal dismissed.

reasoning:
  1. No.

The fact that errors are capable of being discovered does not necessarily start the running of the limitations clock. The trial judge was required to determine when a reasonable person with the respondent’s abilities and in its circumstances ought to have discovered the flaws in the invoices. It is reasonable discoverability − rather than the mere possibility of discovery − that triggers the limitation period under s. 5(1)(b) of the Limitations Act, 2002.

The appellant argued that the trial judge appeared to have misstated the nature of the errors on the spreadsheets in parts of her judgment. This submission appeared to rest on the premise that if the trial judge erred in one statement of fact, then her conclusion that the errors were not apparent on the face of the invoice was inherently suspect. There is no known authority for such a proposition, and the appellant provided none. In any event, it was clear from her reasons that the trial judge was relying on the description of the errors from the consultant’s report, which was the basis of an agreed statement of fact. The fact that the trial judge may have slightly misstated the errors in her judgment was of no moment.

  1. No.

The trial judge misstated the law on reasonable discoverability. The low evidentiary standard referenced by the Court in Morrison related to a motion to add a defendant to an action. Morrison did not purport to set the overall standard to be met at trial. The standard of proof at trial remains the balance of probabilities. The trial judge thus erred to the extent she implied otherwise.

However, any such error was harmless, as it was not material. Immediately after the impugned statement of law, the trial judge found that there was “overwhelming evidence of a reasonable explanation and due diligence by the plaintiff.”

The appellant argued that the suspicion in 2015, of the hotel’s then-new manager becoming concerned by the high electricity bills should have weighed heavily in the assessment of the respondent’s due diligence. However, the fact that the respondent became more concerned about its electricity bill in 2015 does not diminish the appellant’s responsibility for its flawed calculations nor did it detract from the trial judge’s determination that the respondent acted with due diligence in its review of the invoices.

  1. No.

The trial judge clearly separated the concepts of actual knowledge, constructive knowledge, and reasonable discoverability throughout her judgment. In summing-up her limitations analysis, the trial judge listed twenty-one reasons why she concluded that the claim was neither discovered nor reasonably discoverable prior to 2017. The appellant took issue with some of these reasons on the basis that they related only to the parties’ actual knowledge. But this was no error – the list explicitly related to actual knowledge and reasonable discoverability. Several of the twenty-one reasons relate only to the objective standard of reasonable discoverability, and not actual knowledge.

  1. No.

The appellant challenged the trial judge’s finding on the “lack of juristic reason” element of the unjust enrichment test and her conclusion on equitable set-off. However, counsel did not press these submissions in oral argument, and they were found to have no merit. There was no basis to intervene with the trial judge’s determination on equitable set-off.


Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

T. D. Marshall and M. Jarrett, for the appellants

C. Pendrith and J. Kuredjian, for the respondent

Keywords: Torts, Defamation, Anti-SLAPP, Civil Procedure, Costs, Courts of Justice Act, RSO 1990, c C 43, s 137.1, Schwartz et al. v Collette, 2021 ONSC 2138, Brad-Jay Investments Limited v Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Algra v Comrie Estate, 2023 ONCA 811, Veneruzzo v. Storey, 2018 ONCA 688

facts:

This appeal concerned a Anti-SLAPP motion by several defendants to dismiss an action commenced by Canadian Tire Corporation Limited (“Canadian Tire”). Canadian Tire claimed against the Milburn appellants for damages for, among other things, fraud, fraudulent misrepresentation, misappropriation and conversion, knowing receipt, and knowing assistance. It was alleged that the Milburn appellants engaged in a fraudulent scheme by falsely asserting an entitlement to and receiving payment for work under Canadian Tire’s customer return program when that work was not performed. Canadian Tire pleaded that the Milburn appellants made fraudulent transfers of funds that were misappropriated from Canadian Tire to the Robertson appellants.

The appellants submitted that on May 1, 2018, Mr. Milburn met with Canadian Tire and complained of privacy law violations by Canadian Tire and about Canadian Tire allegedly selling defective and dangerous tools that were not approved by the Canadian Standards Association. Canadian Tire denied these allegations. The appellants contended that after this meeting, Canadian Tire ordered the termination of Eaton Equipment Ltd.’s contract under the customer return program.

On the motion, it was the Milburn appellants’ position that Canadian Tire’s action was initiated to further an indirect, collateral, or improper purpose so that they were obstructed from going public or notifying relevant authorities of their knowledge of Canadian Tire’s sale of allegedly defective parts and privacy law violations. The Robertson appellants made similar submissions and argued that Canadian Tire’s action was a SLAPP proceeding against them by extension because they had been included in the lawsuit as leverage to be used against the Milburn appellants.

The motion was restricted to a determination of whether the moving parties had satisfied the threshold requirement of showing on a balance of probabilities that the action arose from an expression made by the moving parties that related to a matter of public interest. The motion judge ruled that the appellants had not discharged the threshold onus under s. 137.1 of the Courts of Justice Act and dismissed the Anti-SLAPP motion. He found that the claim as pleaded by Canadian Tire and the underlying facts are “not premised or grounded on any expressions made by the Milburn Defendants or any other defendant.”

issues:
  1. Did the motion judge err in finding that the appellants had not met their onus of establishing that Canadian Tire’s action arose from an expression made by any of the appellants?
  2. Did the motion judge err in finding that Canadian Tire’s motive in commencing its action was irrelevant on the determination of the threshold issue and that he was prohibited from considering the criteria used to determine whether an action should be dismissed under s. 137.1?
  3. Did the motion judge err in awarding costs against the appellants?
holding:

Appeal dismissed.

reasoning:
  1. No.

The motion judge was correct in finding that Canadian Tire’s fraud claim was neither grounded in nor targeting any expression made by the appellants. The Court agreed that there was nothing in the record that supported the assertion that a year after the appellants made their allegations against Canadian Tire, it decided to commence a fraud claim to silence them.

  1. No.

The plaintiff’s motivation in commencing an action was not a relevant factor at the first stage of the SLAPP analysis, nor were the criteria that were used in determining whether an action should be dismissed. Instead, the inquiry was restricted under the CJA to the determination of whether the moving party had shown on a balance of probabilities that the action arose from an expression made by it that related to a matter of public interest.

SLAPP motions were intended to be a relatively summary procedure, designed to weed out unmeritorious actions that target expressions on matters of public interest. However, they have proven to be an unwieldly, expensive, and time-consuming remedy. The Court declined to contribute further to that problem by expanding the threshold test to include an investigation of a plaintiff’s motive in commencing litigation and consideration of factors that would apply had the motion passed the threshold stage.

  1. Leave to appeal costs was denied.

The appellants required leave to appeal the motion judge’s costs award. Leave to appeal a costs order will not be granted except in obvious cases where the party seeking leave convinces the court there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion”. This test was designed to impose a high threshold because appellate courts recognize that fixing costs is highly discretionary and that trial and motion judges are best positioned to understand the dynamics of a case and to render a costs decision that is just and reflective of what actually happened on the ground.

The motion judge exercised his discretion in accordance with recent authority from the Court on the issue of costs in the context of a SLAPP motion. There was no basis to interfere with that decision. Leave to appeal the costs award was denied.


Lyng v. Ontario Place Corporation, 2024 ONCA 23

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

Counsel:

M. Forget and E. Murtha, for the appellant

J.A. Scarfone and J. M. Sazio, for the respondent

Keywords: Torts, Negligence, Occupier’s Liability, Slip and Fall, Duty of Care, Standard of Care, Causation, “But For” Test, Damages, Occupier’s Liability Act, R.S.O. 1990, c. O.2, s. 3, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Moore v. Sweet, 2017 ONCA 182, Housen v. Nikolaisen, 2002 SCC 33, Waldick v. Malcolm, [1991] 2 S.C.R. 456, Malcolm v. B.C. Transit (1988), 32 B.C.L.R. (2d) 317 (C.A.), Winters v. Haldimand (County), 2015 ONCA 98, Athey v. Leonati, [1996] 3 S.C.R. 458, Clements v. Clements, 2012 SCC 32, Ault v. Canada (Attorney General), 2011 ONCA 147, Lazare v. Harvey, 2008 ONCA 171, Woelk  v. Halvorson, [1980] 2 S.C.R. 430, S.M. c. Sternthal Katznelson Montigny, 2021 QCCA 673, Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58

facts:

The appellant, Ontario Place Corporation (“Ontario Place”), appealed from the trial judge’s decision to award the respondent damages for injuries sustained while on its premises.

On July 14, 2016, the respondent, age 21 at the time, attended a concert at Ontario Place with his friend. It rained heavily that day. Following the concert the respondent, his friend, and other concertgoers exited the main gates and proceeded to a pedestrian bridge that leads over Lake Shore Blvd. to the Exhibition GO station. This bridge was the fastest and most direct route to that location. Upon arrival at the bridge, the respondent found that it was closed. Two security guards were blocking entry. Along with others, the respondent and his friend proceeded down a hill next to the bridge. There were no barricades or warnings limiting access to the hill. The respondent’s friend, who testified at trial, said that he went down the hill first, that the hill was wet and slippery, and that he “skidded down” without falling. The respondent, who followed his friend, fell and sustained a serious knee injury. A surgical repair was required. The respondent had consumed alcohol, was wearing flip-flops, and testified that he had slipped as he neared the bottom of the hill.

The trial judge found that Ontario Place was liable for the respondent’s injuries under s. 3 of the Occupiers’ Liability Act, R.S.O. 1990, c. O.2 (the “Act”). In arriving at that conclusion, he made several findings of fact, including that 1) Ontario Place blocked entry to the bridge, 2) it had rained, the grass was wet, and the hill was therefore a hazard, 3) Ontario Place was aware that the hill was a hazard, 4) Ontario Place could have, but did not, warn people of the risk or place barriers to prevent entry to the hill, and 5) the respondent did not slip on the wet hill, but rather jumped and tore his ACL when his left leg landed on the asphalt road at the bottom of the hill. The trial judge found the respondent to be contributorily negligent and apportioned liability accordingly: 75 per cent to Ontario Place, and 25 per cent to the respondent. Ontario Place appealed.

issues:
  1. Did the trial judge err by considering a theory of liability outside of the pleadings and presentation of the case?
  2. Did the trial judge err in his causation analysis?
  3. Did the trial judge err in finding that Ontario Place breached its duty under s. 3 of the Act on the basis that wet grass is not an unusual danger?
  4. Did the trial judge err in failing to find that the respondent was the author of his own misfortune?
  5. Did the trial judge err by awarding damages for loss of competitive advantage?
holding:

Appeal dismissed.

reasoning:
  1. No.

The respondent’s theory of negligence was clear throughout, which was, in the circumstances (i.e., rain, low visibility, and pedestrian bridge closure), Ontario Place had an obligation to take steps to prevent patrons from traversing a wet, slippery slope. The trial judge rejected the respondent’s evidence that his fall and the resulting knee injury were caused by him slipping as he descended that wet hill. The theory of liability was not, as the appellant alleged, raised for the first time in the trial judge’s reasons for judgment. It was raised in the pleadings, addressed in both the written and oral arguments made by counsel at trial, and canvassed extensively during cross-examination of the respondent. The statement of claim also made the theory of the case clear. The theory was tested extensively by the appellant during the trial.  There was no procedural unfairness.

  1. No.

Ontario Place did not identify any error that would warrant appellate intervention. The trial judge accurately set out and applied the applicable legal principles. The issue of causation is a factual finding which should not be interfered with absent palpable and overriding error. While attributing fault to the respondent and thus finding that he was contributorily negligent, the trial judge found that Ontario Place’s negligent acts set off a “train of events” that placed the respondent at the bottom of a wet, hazardous, slippery hill – a hazard known to Ontario Place and which “could have been easily prevented”. There was no error.

  1. No.

Section 3 of the Act provides that: “An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons are reasonably safe while on the premises.” Ontario Place correctly pointed out that occupiers are not required to take unrealistic or impractical precautions against known risks, nor are they required to protect against every possible danger. The standard is not perfection.

The trial judge, however, cited the leading authority from the Supreme Court – Waldick – noting that “[a]s indicated in Waldick, the duty of reasonable care does not change [but] the factors, which are relevant to an assessment of what constitutes reasonable care, will necessarily be very specific to each fact situation”. The trial judge then proceeded to thoroughly address the factors present here and explained why, in the circumstances of the case, Ontario Place was liable. The trial judge did what s. 3 directed him to do – he carefully considered what would have been reasonable in the circumstances. The trial judge approached the question as required by s. 3 and by Waldick.

  1. No.

The trial judge found that both Ontario Place and the respondent were negligent. There was nothing inconsistent about the two findings. “But for” causation requires only that a defendant’s negligent conduct be a necessary cause of the injury, not the sole cause. There were two negligent causes of the respondent’s injury with the trial judge apportioning liability accordingly. The standard for appellate interference with a trial judge’s apportionment of liability is an exacting one.  As Ontario Place did not identify any demonstrable error in the trial judge’s appreciation of the facts, or in his application of the relevant legal principles, the high threshold was not met.

  1. No.

An award of damages for loss of competitive advantage is meant to compensate a plaintiff for a component of future income loss. A plaintiff is entitled to damages for loss of competitive advantage if they can prove a substantial risk of loss of income in the future. The standard for appellate interference with a damages award is onerous. Ontario Place needed to establish that the trial judge 1) made an error of principle or law; 2) misapprehended the evidence; 3) erred in finding there to be evidence on which to base his conclusion; 4) failed to consider relevant factors, or considered irrelevant factors; or 5) made a palpably incorrect or wholly erroneous assessment of damages.

The question was whether it was open to the trial judge to conclude, from that evidence, that there was a real and substantial risk of a future loss of competitive advantage. The question boiled down to what he could reasonably take from the evidence provided by the respondent’s treating orthopaedic surgeon. The trial judge’s apprehension of the evidence in its totality was reasonable and entitled to deference. The trial judge accurately set out the law, noting that the respondent needed only prove that there was a real chance of a future loss of competitive advantage, and he fairly applied the relevant principles to the facts as he found them.


Elbassiouni v. Brenn, 2024 ONCA 28

[Hourigan, Trotter and Copeland JJ.A]

Counsel:

S. Suleman, for the appellants

M. M. Fahmy, for the respondents

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Simplified Procedure, Summary Judgement, Evidence, Admissibility, Rules of Civil Procedure, rr. 39.02, 76.04

facts:

The appellants appeal from an order granting a motion for summary judgment arising from a dispute over the purchase and sale of a residential property. The appellants (who were the purchasers) alleged that the respondent/vendor breached warranties in the Agreement of Purchase and Sale (“APS”). After the transaction closed, the appellants alleged deficiencies in the amenities that were the subject-matter of the warranties, and also that the hot water heater and propane tank were rented as opposed to owned equipment. The motion judge concluded that there was no genuine issue for trial. The motion judge granted summary judgment in favour of the respondent.

issues:
  1. Did the motion judge err in finding that this was an appropriate case for summary judgment?
  2. Did the motion judge conduct the summary judgment motion unfairly?
holding:

Appeal dismissed.

reasoning:
  1. No.

The Court held that this was an appropriate case for summary judgment. The case involved a straightforward real estate transaction. In terms of liability, it involved an interpretation of warranties that were drafted in a manner very favourable to the respondent. The motion judge found there was nothing to contradict the respondent’s assertion of her genuine belief. The Court held that on the admissible evidence before the motion judge, it was open to the motion judge to reach these conclusions.

  1. No.

Leading up to the summary judgment motion, one of the appellants and the respondent were examined by opposing counsel. The appellant’s examination was completed; however, the examination of the respondent was not, and a further date was scheduled. The respondent’s examination however was never resumed. Upon reviewing the transcripts of the examinations, the motion judge concluded that they were inadmissible under r. 76.04 under the Simplified Procedure, which prohibits cross-examinations on affidavits. The motion judge rejected the characterization of the examinations in this case as examinations for discovery. He found that they were cross-examinations of deponents on their affidavits under r. 39.02. The Court found no error in the motion judge’s characterizations of the examinations that were conducted by the parties. The Court further rejected the appellants’ submission that the motion judge acted improperly by reviewing the transcripts.

In considering whether the motion judge erred in considering the respondent’s reply affidavit, which was filed late (i.e., following the dispute that arose over the examinations of the parties, and after a scheduling deadline set by the motion judge), the Court held there was no error. When appellants’ counsel objected to its admission, the motion judge asked if the appellants were seeking an adjournment. The appellants did not seek an adjournment and indicated their readiness to proceed, even if the reply affidavit were to be admitted. The motion judge properly exercised his discretion to proceed in the circumstances. Therefore, there was no unfairness.


Duraisami v. Yaworski, 2024 ONCA 27

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

M.A. Jaeger, for the appellants

T.M. Zheng, for the respondent

Keywords: Breach of Contract, Civil Procedure, Simplified Procedure, Summary Judgment, Rules of Civil Procedure, r.76, Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, Manthandi v. ASCO Manufacturing, 2020 ONCA 485, Hryniak v. Mauldin, 2014 SCC 7, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

Y and the respondent, D, entered into a joint venture agreement for the purpose of purchasing, redeveloping, and selling a property in Cambridge (the “JVA”). The JVA provided that the respondent would receive a return of her original investment of $100,000, plus an additional $20,000. Y signed a personal guarantee on July 23, 2019 (the “Guarantee”), guaranteeing the performance of the JVA.

The respondent signed the JVA on July 24, 2019 (Y had signed on July 22, 2019). On July 29, 2019, she advanced $100,000 to the corporate respondent (“932”), the owner of the property subject to the JVA. Y was an officer and director of 932.

The property subject to the JVA was sold on or about May 19, 2020, for $900,800. Y did not advise the respondent of the sale; rather, on July 9, 2020, he advised her by email that the sale had been delayed due to the pandemic. Y never sent the repayment. In October 2021, the respondent issued the claim for $120,000 in damages for breach of the Guarantee and the JVA.

The motion judge granted summary judgment, finding Y liable to pay the respondent $120,000 pursuant to the terms of the Guarantee. He further found that, interpreting the JVA, the parties intended by its terms that the respondent would be paid the agreed $120,000 from the proceeds of the sale of the subject lands without deduction for any losses the project might sustain. With respect to 932, the motion judge found that it had been unjustly enriched, the respondent had been deprived, and there was no juristic reason for the enrichment. On this basis the motion judge found the appellants jointly and severally liable to the respondent for $120,000 plus prejudgment interest.

issue:

Did the motion judge err in finding that the claims of the respondent were appropriate for summary judgment?

holding:

Appeal dismissed.

reasoning:
  1. No.

The motion judge was alive to the issue of whether it was appropriate to decide this action by summary judgment, given that it was a rule 76 proceeding. His reasons were clear that he considered the appropriate legal analysis, referring to the Court’s decisions in Combined Air and Manthadi. There was no palpable and overriding error in his finding that the action was document-driven and that the relevant facts were undisputed. This summary judgment motion did not turn on findings of credibility. There was no prejudice to the appellants from the matter being determined by summary judgment.

Further, there was no palpable and overriding error in the motion judge’s interpretation of the Guarantee and the JVA, and in particular, no error in his finding that the Guarantee was valid and subsisting and that it did what it was clearly intended to do – impose personal liability on Y.


SHORT CIVIL DECISIONS

Jakubov v. Sun Life Assurance Company of Canada, 2024 ONCA 16

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

G. Roberts, for the appellant

B. Wong and N. Hollard, for the respondent

Keywords: Civil Procedure, Summary Judgment, Limitation Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Winmill v. Woodstock (Police Services Board), 2017 ONCA 962


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 January 1, 2024.

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Martin v. Wright Medical Technology Canada Ltd is a class action decision involving a claim for negligent manufacturing of a prosthetic hip implant. There were two actions brought. The amendments to the Class Proceedings Act, 1998 provided for mandatory dismissal of claims if certain steps were not taken within one year of commencement of the action or coming into force of the amendments on October 1, 2020. The amendments also imposed a more difficult test for certification, but older cases that had not yet been certified were grandfathered and the old certification test continued to apply to them. Counsel in the earlier action took steps to avoid it being administratively dismissed, and to preserve the application of the old certification test. The later claim was exposed to administrative dismissal. The motion judge allowed the claims made in the later action to proceed as part of the older action, but ordered that the new Act, and therefore the new test for certification, applied to all of the claims made in the one consolidated action. The Court disagreed with the motion judge and allowed the appeal. The Court emphasized the legislative intent to maintain a clear distinction between actions started under the old and amended Acts, and concluded that there was no reason the certification judge cannot apply the different tests to the different claims.

In 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6, the appeal involved a dispute over a failed real estate closing where the purchaser was 35 minutes late in tendering funds. The vendor refused an extension, considered the purchaser in breach and terminated the contract. The application judge in favour of the vendor, as the “time is of the essence” clause was to be strictly enforced and had not been waived. The Court dismissed the appeal.

York Condominium is a condo law decision in which the lower court orders requiring the sale of a unit holder’s property who persistently breached the Fire Code were upheld..

El Rassi-Wight v. Arnold is a family law decision that considered whether a settlement of property issues constituted a binding and enforceable domestic contract. The Court dismissed the appeal, agreeing with the motion judge that the agreement should not be enforced because it did not meet the formalities of a valid domestic contract and there was no basis to relax the formalities in this case..

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

York Condominium Corporation No. 221 v. Mazur , 2024 ONCA 5

Keywords: Real Property, Condominiums, Oppression, Civil Procedure, Order, Enforcement, Writs of Possession, Condominium Act, 1998, S.O. 1998, c. 19, Kaiman v Graham, 2009 ONCA 77, Ontario Energy Savings LP v 767269 Ontario Ltd, 2008 ONCA 350

Martin v. Wright Medical Technology Canada Ltd. , 2024 ONCA 1

Keywords: Torts, Negligent Manufacture, Civil Procedure, Class Proceedings, Statutory Interpretation, Class Proceedings Act, 1992, S.O. 1992, c. 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, David v. Loblaw Companies Ltd., 2022 ONCA 833, Bourque v. Insight Productions, 2022 ONSC 174, St. Louis v. Canadian National Railway Company, 2022 ONSC 2556, Lamarche v. Pacific Telescope Corp., 2022 ONSC 2553, LeBlanc et al. v. The Attorney General of Canada et al., 2022 ONSC 3257, Westgate v. WestJet Airlines Ltd., 2022 ONSC 4190, D’Haene v. BMW Canada Inc., 2022 ONSC 5973, A. (B.) v. University of Ottawa, 2023 ONSC 310, Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572, Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, Smith v. Inco Limited, 2011 ONCA 628

El Rassi-Wight v. Arnold , 2024 ONCA 2

Keywords: Family Law, Property, Domestic Contracts, Enforcement, Setting Aside, Family Law Act, R.S.O. 1990, c. F.3, s. 55(1), s. 56(4), Gallacher v. Friesen, 2014 ONCA 399, Virc v. Blair, 2014 ONCA 392, Anderson v. Anderson, 2023 SCC 13

3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes) , 2024 ONCA 6

Keywords: Contracts, Breach, Interpretation, Real Property, Agreements of Purchase and Sale of Land, “Time of the Essence”, Damages, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 29, Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051

Short Civil Decisions

The Rosseau Group Inc. v. 2528061 Ontario Inc. , 2024 ONCA 7

Keywords: Costs


CIVIL DECISIONS

York Condominium Corporation No. 221 v. Mazur , 2024 ONCA 5

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

M. Molloy and J. Wright, for the respondent

S. Mazaheri, for the appellants

Keywords:Real Property, Condominiums, Oppression, Civil Procedure, Order, Enforcement, Writs of Possession, Condominium Act, 1998, S.O. 1998, c. 19, Kaiman v Graham, 2009 ONCA 77, Ontario Energy Savings LP v 767269 Ontario Ltd, 2008 ONCA 350

facts:

The appeal concerned a dispute between a condominium corporation (YCC 221) and the owners of a condominium unit relating to non-compliance with fire safety rules. The dispute culminated in an order granting the condominium corporation, the respondent, a writ of possession over the unit, along with the right to list and sell the unit. The court ordered that upon completion of the sale, the proceeds of the sale, less payment of all encumbrances on title, be paid into the court. Finally, the court ordered that the appellants must not purchase, lease, or reside in any other unit at YCC 221.

The motion judge determined further that the appellants had failed to demonstrate that they were capable of abiding by the safety rules which governed conduct at YCC 221, and that the failure was “serious and persistent and could have a tragic impact on their community.” Given the long and continuous breach of a prior order (the “Koehnen J. Order”), the motion judge concluded that the forced sale of the Unit was justified in the unusual circumstances of the case. The appellants, who are the unit owners, appealed that order.

issues:
  1. Did the motion judge err in law by failing to state and apply the relevant two-part test for oppression under the Condominium Act, 1998?
  2. Did the motion judge err in law by failing to consider the relevant sections of the Act (ss. 17(3), 102, 117, 119, and 134) and case law that places the legal obligation on a condominium corporation, and not individual owners, to enforce its governing documents and take reasonable steps to enforce them?
  3. Was it an error of law for the motion judge to suggest that the appellants had not made any efforts to comply with the Fire Code when the evidence suggested that “concerted effort” was made by the appellants?
  4. Was there sufficient evidence for the Court to apply the required legal test and award the relief sought by the appellants, specifically relating to oppression and its associated remedies?
holding:

Appeal dismissed.

reasoning:

1), 2), & 4) No.

The respondent argued that the grounds of appeal had no merit, amounted to an attempt to relitigate the motion, and introduced new issues on appeal. The general rule was that appellate courts would not entertain entirely new issues on appeal. There was no basis to depart from that rule in this case. The motion judge’s factual findings did not support the appellants’ claim that they would have had grounds for obtaining a remedy under s. 135 of the Act, even if they had made a proper application. Rather, her reasons made it clear that the appellants repeatedly failed to comply with the Fire Inspection Order.

3) No.

The appellants focused on the motion judge’s alleged errors in relation to findings of fact and the weighing of evidence. The motion judge found that the appellants had provided no valid explanation for non-compliance with the Koehnen J. Order. The appellants contended that the motion judge had affidavit evidence before her of “exceptional circumstances” to which she should have referred. The motion judge concluded that the appellants had failed to provide evidence of “exceptional circumstances” that could excuse their non-compliance. The appellants argued that the motion judge’s approach was in error because it was “singularly focused” on serious allegations. The Court was not persuaded that the motion judge made any reversible errors. The only issue was whether the appellants were in breach of the Koehnen J. Order, and if so, what remedy was appropriate. The Court concluded that the motion judge’s conclusions that the appellants failed to comply with clear court orders and that the orders issued were warranted were entitled to deference.


Martin v. Wright Medical Technology Canada Ltd., 2024 ONCA 1

[Lauwers, Hourigan and George JJ.A.]

Counsel:

J. P. Rochon, G. Nayerahmadi, M. B. McPhee, and N. J. Kelly, for the appellants/respondents by way of cross-appeal A. Chamberlain, T. Kinney, P. Marchand, and L. Chamberlain

P. J. Pliszka and R. Hung, for the respondent/appellant by way of cross-appeal Wright Medical Technology, Inc.

L. G. Theall and C. A. Jordaan, for the respondents MicroPort Medical B.V., MicroPort Scientific Corporation and MicroPort Orthopedics Inc.

Keywords:Torts, Negligent Manufacture, Civil Procedure, Class Proceedings, Statutory Interpretation, Class Proceedings Act, 1992, S.O. 1992, c. 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, David v. Loblaw Companies Ltd., 2022 ONCA 833, Bourque v. Insight Productions, 2022 ONSC 174, St. Louis v. Canadian National Railway Company, 2022 ONSC 2556, Lamarche v. Pacific Telescope Corp., 2022 ONSC 2553, LeBlanc et al. v. The Attorney General of Canada et al., 2022 ONSC 3257, Westgate v. WestJet Airlines Ltd., 2022 ONSC 4190, D’Haene v. BMW Canada Inc., 2022 ONSC 5973, A. (B.) v. University of Ottawa, 2023 ONSC 310, Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572, Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, Smith v. Inco Limited, 2011 ONCA 628

facts:

This appeal concerned a motion judge’s order adding a discontinued cause of action and defendants to a class action operating under the old Class Proceedings Act, 1992 (“CPA”), and ordering that the action be governed by the amended Act. The motion judge also denied the appellants leave to add a party as a defendant in the action.

On February 27, 2014, SM (now deceased) and her spouse, JCD, started a class proceeding against the Wright respondents alleging negligent manufacturing of a prosthetic hip implant for resurfacing surgery, with Rochon Genova LLP as proposed class counsel. On September 24, 2014, GR started a class proceeding against the Wright respondents and named MicroPort alleging negligent manufacturing of a prosthetic hip implant for arthroplasty surgery, with Kim, Spencer, McPhee Barristers P.C. as proposed class counsel.

On October 1, 2020, amendments to the CPA came into force. Section 39 of the amended Act sets out the transition provisions for the move from the old Act to the amended Act. Essentially, the old Act continues to apply to cases started before October 1, 2020, and the amended Act applies to cases started after that date.

There were two provisions in the amended Act of particular importance to the underlying motion and this appeal. Section 29.1 of the amended Act provides for mandatory dismissal of actions for delay “unless, by the first anniversary of the day on which the proceeding was commenced,” one of four steps has been taken. Class counsel in the SM action took an appropriate step before October 1, 2021, to avoid mandatory dismissal of the action under s. 29.1. As a result, the old Act continued to apply to the SM action. Because class counsel in the GR action did not do so, the GR action was exposed to mandatory dismissal for delay under s 29.1 of the amended Act.

The motion judge ordered that the amended SM action with the added GR causes of action and the GR defendants was to be governed by the amended Act. The motion judge dismissed the motion to add MicroPort Orthopedics Inc. as a defendant to the SM action as he would have reconstituted it.

issues:
  1. Did the motion judge err in ordering that the amended SM action would be governed by the amended Act for all purposes, including a more onerous certification test?
  2. Did the motion judge err in declining to add MicroPort Orthopedics Inc. as a defendant, based on the operation of the Limitations Act, 2002?
holding:

Appeal allowed. Cross-appeal allowed in part.

reasoning:
  1. Yes.

The effect of the motion judge’s order was to override s. 39 of the amended Act, which provides expressly that the old Act would continue to apply to class actions commenced before October 1, 2020 – such as the SM action. The motion judge noted, at para. 105, that “the transition provisions of the amended Act … do not directly speak to the situation of what happens when an action to be governed by the older certification test is amended before the certification motion.” He purported to find a gap in the legislation, which enabled him to make his ruling under s. 12 of the Act. He offered no explanation for this assertion and did not engage with the applicable principles of statutory interpretation.

The motion, and the appeal, turned on the interpretation of s. 39 of the amended Act, which distinguishes sharply between actions started under each of the old Act and the amended Act, how s. 39 relates to automatic dismissal for delay under s. 29.1, and whether s. 12 gives a motion judge the overriding authority he asserted.

The Governing Principles of Statutory Interpretation

The task of interpretation requires the court to consider the text of the legislation, the context within which it operates, and the particular purpose for the provisions at issue. The Court noted that this reflects the “modern approach” to interpretation, which “requires that the words of a statute be read ‘in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: Pointes Protection Association at para 6.

The statutory text

Section 39 is a transitional provision that specifies that the old Act continues to apply to cases started before October 1, 2020. The amended Act applies to cases started after that date. An exception to this rule is found in s. 39(2), which provides that actions started under the old Act are subject to mandatory dismissal for delay under s. 29.1 of the amended Act. Section 39(2) applied to both the SM and the GR actions, but only class counsel in the SM action met the s. 29.1 test and avoided mandatory dismissal. The motion judge correctly approved class counsel’s motion for leave to discontinue the GR action as an alternative to dismissal and ordered costs payable to the defendants in that action.

Context and Purpose

Legislative history can inform the court’s appreciation of the legislative intention in enacting the changes brought about by legislative amendments: Valilov, at paras. 167, 180, and 195. The legislative history showed that the amended Act followed upon the Law Commission of Ontario’s Final Report (“the Report”). There were two significant differences between the Report and the amended Act. The first was that the amended Act stiffened the certification criteria even though the Commission had recommended against doing so. The amended section 5(1.1) moved Ontario class actions closer to the American certification rule, as commentators note: “As of October 1, 2020, the preferable procedure portion of Ontario’s certification test has been made more rigorous and now largely reflects US Rule 23.” Had the Legislature followed the Commission’s advice and left the certification criteria as they were, there would have been no need for s. 39 as a transition provision to mitigate stricter certification requirements.

Principles Applied

The text, legislative history, and jurisprudence concerning s. 39 supported the inference that the Legislature intended there to be a bright line between actions started under the old Act and actions started under the amended Act. Under s. 39, the SMartin was to be governed by the certification criteria in the old Act. The plaintiffs in the GR action were entitled to “refile”, following discontinuance of their action, but under the amended Act.

The Court also noted that the motion judge erred in using s. 12 of the amended Act to conjure up a gap needing to be filled. There was no gap in the amended Act. The consequences of the statutory changes for class actions started before and after October 1, 2020, were addressed by the Legislature and must be given full force and effect. Motion judges will be able to manage the application of different criteria in actions that are processed together because of similar causes of action and factually related evidence.

  1. Yes.

There was no doubt that the reconstituted GR action could be brought, and it will be subject to the amended Act in all respects. It was the only vehicle by which MicroPort Orthopedics Inc. could be added as a defendant. Because of the broad basis on which the motion judge refused the joinder motion, it was necessary for the Court to address the limitations issue.

In the context of an appeal of a motion refusing certification, the Court in Fresco established that the issue of limitation periods was not an ingredient of the class members’ claims, but instead may be relied upon by CIBC in its defence in that case. The question of how individual issues are best resolved is a procedural matter that would follow after the common issues trial”: Fresco at para. 108. If the evidence does not establish that all class members were not aware of and ought not to have been aware of the material facts, then the application of the Limitations Act, 2002 to the claims is an individual and not a common issue: Smith at para 164.

The Court noted that reinforcing this approach is the difficult issue of discoverability in the context of a class action involving personal injuries. The Court stated that there were no ultimately dispositive facts before the motion judge on which he could have based such a sweeping ruling, particularly since the products at issue continued to be sold today. Therefore, there was no impediment to a reconstituted GR class action naming MicroPort Orthopedics Inc. as a defendant.


El Rassi-Wight v. Arnold , 2024 ONCA 2

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

D. A. Thomson, for the appellant

D, Williams, for the respondent

Keywords: Family Law, Property, Domestic Contracts, Enforcement, Setting Aside, Family Law Act, R.S.O. 1990, c. F.3, s. 55(1), s. 56(4), Gallacher v. Friesen, 2014 ONCA 399, Virc v. Blair, 2014 ONCA 392, Anderson v. Anderson, 2023 SCC 13

facts:

In March 2019, appellant and the respondent, who were in a long-term relationship, bought a house together, with both holding title as joint tenants. On August 2, 2020, the parties signed a document, stating that the respondent agreed to transfer his interest in the house to the appellant in exchange for $10,000 and a motorcycle that belonged to the appellant’s father (“the August 2 Document”). However, the respondent later refused to follow through with the terms of the agreement.

The appellant brought an application seeking a declaration that the August 2 Document was a valid and binding domestic contract, and an order that the respondent’s share of the property be transferred to the appellant. In response, the respondent then brought his own application, seeking an order that the property be sold pursuant to s. 3(1) of the Partition Act, and other relief. The two applications were converted to an action and heard together. The main disputed issue between the parties was whether the August 2 Document was a binding domestic contract for the purposes of Part IV of the Family Law Act (the “FLA”). The trial judge found that it was not. The decision was appealed.

issues:
  1. Was the failure to have the document signed by a third-party witness fatal to a finding that the document is a binding domestic contract, or was the video recording and acknowledgment by the respondent of having signed the document sufficient?
  2. Did the trial judge fail to identify the proper test to determine whether compliance with the formalities in s. 55(1) could be dispensed with in the circumstances of the case?
  3. Did the trial judge apply a test which had an unreasonably low threshold to preclude the relaxing of the formalities in s. 55(1)?
  4. Did the trial judge err in concluding that the circumstances were oppressive and unfair so as to preclude the relaxing of the formalities in s. 55(1)?
  5. Did the trial judge conclude, or give undue weight to an implicit finding, that the respondent signed the document under duress when the evidence did not justify such a conclusion?
holding:

Appeal dismissed.

reasoning:
  1. No

The video recording made by the appellant confirmed the respondent’s acknowledgement that he had signed the August 2 Document. However, the purpose of the formal requirements in s. 55(1) of the FLA is not just to “provide proof that [a document] was in fact signed by the parties”, but also to “ensure a measure of formality in the execution of a domestic contract”, and to “avoid ‘kitchen table’ agreements”. The Court was not persuaded that the trial judge made any error in concluding that the video recording did not serve as a complete substitute for the document having been properly witnessed.

  1. and 3. No

There was no real inconsistency between the Court’s observation in Gallacher that one of the purposes of s. 55(1) of the FLA is “to ensure that [domestic contracts are] free from undue influence, coercion or duress”, and the Court’s later statement that “[t]he strict requirements of s. 55(1) may be relaxed where the court is satisfied that the contract was in fact executed by the parties, where the terms are reasonable and where there was no oppression or unfairness in the circumstances surrounding the negotiation and execution of the contract.” The trial judge considered and applied the relevant factors in Gallacher to determine whether the formal requirements of s. 55(1) should be relaxed in a particular case.

Applying the same tests under s. 55(1) and s. 56(4) would unduly undermine the legislature’s decision to require domestic contracts to ordinarily have at least some degree of formality, in part to underscore their importance and ensure that the parties who sign them take them seriously.

  1. No

The Court was satisfied that the trial judge properly considered the factors identified in Gallacher. Unlike the situation in Gallacher, the trial judge found as a fact that neither party had received independent legal advice before signing the August 2 Document. She also found that the document was vague, and that the respondent had not understood some key terms. The trial judge also noted that the document left important questions unresolved, leading to the conclusion that the formalities of s. 55(1) of the FLA should not be relaxed in the circumstances. The Court was not persuaded that anything that was said in Anderson v. Anderson undermined the trial judge’s analysis or conclusions.

  1. No

There was no basis to interfere with the trial judge’s alternative conclusion that even if the August 2 Document was a valid domestic contract, despite not having been prepared in accordance with s. 55(1) of the FLA, she would have set it aside pursuant to s. 56(4). In Ontario, s. 56(4) of the FLA permits courts to set aside domestic contracts on multiple bases, including when “a party did not understand the nature or consequences of the domestic contract” (s. 56(4)(b)). While a finding of duress might have entitled the trial judge to invoke s. 56(4)(c), which authorizes the setting aside of domestic contracts “otherwise in accordance with the law of contract”, s. 56(4)(b) does not require a finding of duress.

The trial judge found as fact that the respondent did not understand precisely what he was giving up, noting that “[n]either party reviewed any of their financial records prior to signing the document”, and finding further that the respondent, in particular, did not understand the meaning of the term “equity”. These findings would have given the trial judge a sufficient basis to allow her to set aside the contract under s. 56(4)(b), had it been necessary for her to do so.


3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes) , 2024 ONCA 6

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

D. Camenzuli and J.A. Cecchetto, for the appellant

C. Vegso, for the respondent

Keywords:Contracts, Breach, Interpretation, Real Property, Agreements of Purchase and Sale of Land, “Time of the Essence”, Damages, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 29, Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051

facts:

This appeal concerned a dispute over a real estate transaction where the purchasing party missed the time stipulated for paying the funds to close the transaction by 35 minutes. On the basis of the breach, the vendor treated the contract between the parties as terminated. The application judge found in favour of the respondent vendor, 5009796 Ontario Inc. carrying on business as Kassar Homes (“Kassar Homes”). The unsuccessful purchaser, 3 Gill Homes Inc., appealed.

issues:
  1. Did the application judge err in finding that 3:00 p.m. was the payment deadline under the APS?
  2. Did the application judge err in finding that, in respect of the closing payment, time was of the essence?
  3. Did the application judge err in finding that the payment deadline was not unconscionable?
  4. Are the reasons of the application judge sufficient to permit appellate review?
  5. Did the application judge err in finding that damages could not be fairly and justly determined on a written record?
holding:

Appeal dismissed.

reasoning:
  1. No

While the outcome for the respondent was harsh, it was not unconscionable or unfair. The wording of the contract and the warnings provided by the respondent beforehand were clear. The standard of review was palpable and overriding error. The wording of article 14.02(d) of the APS meant that where electronic registration was mandatory, the funds due on closing had to be received by 3:00 p.m. on the closing date. It would be an unwarranted intervention into the freedom of contract for a court to alter the APS and its closing time.

  1. No

A ‘time is of the essence’ clause is engaged where a time limit is stipulated in a contract. The phrase ‘time is of the essence’ means that a time limit in an agreement is essential such that breach of the time limit will permit the innocent party to terminate the contract.

The application judge found that the amending agreement to the APS dated November 15, 2021, changed the state of affairs and became a starting point from which the closing deadline was to be treated as firm. The exchanges between the parties in the days prior to the closing date all reflected what the application judge found to be a shared understanding that the closing date and time was to be enforced. Further, article 16.02 of the APS made clear that the default by the appellant in failing to deliver the funds owing by the closing time justified the respondent in treating the APS as terminated. The application judge’s reliance on the “time is of the essence” clause in the APS revealed no error.

  1. No

The application judge’s conclusion with respect to the absence of unconscionability, in light of the previous transactions between the parties and their sophistication with respect to real estate transactions and APSs, was entitled to deference.  There was no basis to interfere with the application judge’s conclusions.

  1. No

There was no basis for the assertion that the application judge’s reasons did not permit appellate review. The application judge explained his findings by virtue of the governing case law, the APS, and the surrounding factual circumstances.

  1. No

In light of the conclusion that the application judge did not err in finding in favour of the respondent on the merits of the application, it was not necessary to consider the appellant’s ground of appeal in relation to the application judge’s decision to refer the question of damages to a trial.



SHORT CIVIL DECISIONS

The Rosseau Group Inc. v. 2528061 Ontario Inc., 2024 ONCA 7

[Benotto, Trotter and Zarnett JJ.A.]

Counsel:

J. T. Curry and A. Quinn, for the appellant

S. Schwartz and E. Quail, for the respondent

Keywords: Costs


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