Good afternoon.

This week’s Court of Appeal decisions covered a range of subjects including contracts, torts, civil procedure, and wills and estates. A quick note of congratulations to our partners, Lou Brzezinski and Chad Kopach who successfully represented the respondents in Roopchand v Chau.

The two most notable substantive decisions this week were two wills and estates matters.  In Spence v BMO Trust Co., the question was whether a bequest could be voided on public policy grounds because the disappointed heir (the daughter) alleged that the true motivation for being cut out of the will by her father was racism (she had fathered a child with a person of a different skin colour).  The Court decided that it would be dangerous to go behind the stated reason of the testator in the will, which was that father and daughter had grown apart.  Accordingly, the father’s decision should be respected.  However, the Court went on to clearly state, albeit in obiter, that even if the father had explicitly said in his will that he was not providing for his daughter on racist grounds, that decision would still have been respected because of the common law principle of testamentary freedom.  In Neuberger v York, a dispute over a $100 million dollar estate, the Court determined that the doctrine of estoppel should not apply to bar an heir (who was also a trustee and had taken steps under the will) from challenging the validity of the will.

Have a nice weekend and March break next week.

John Polyzogopoulos
Blaney McMurtry LLP
JPolyzogopoulos@blaney.com
Tel: 416.593.2953
http://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

Civil Decisions

Tender Choice Foods Inc. v. Planet Energy (Ontario) Corp., 2016 ONCA 192

Keywords: Contracts, Standard of Review, Findings of Fact, Palpable and Overriding Error

Donis v. Georgopoulos, 2016 ONCA 194

Keywords: Contracts, Estates, Real Property, Undue Influence, Non Est Factum, Consideration, Independent Legal Advice

McDowell v. Cavan-Millbrook – North Monaghan (Municipality), 2016 ONCA 193

Keywords: Civil Procedure, Tax, Income Tax, Administration and Enforcement, Creditors and Debtors, Receivers, Court Appointed Receivers, Motion to Dismiss, Leave Nunc Pro Tunc

Neuberger v. York, 2016 ONCA 191

Keywords: Wills and Estates, Validity of Wills, Estoppel by Representation and Convention, Rules of Civil Procedure, Rule 75.01 & 75.06, Evidence, Proof of Wills

Labelle v. Canada (Border Services Agency), 2016 ONCA 187

Keywords: Torts, Negligence, Occupier’s Liability, Slip and Fall, Rules of Civil Procedure, Rule 48.14, Administrative Dismissal for Delay, Prejudice, Reid v Dow Corning Corp.

Spence v. BMO Trust Company, 2016 ONCA 196

Keywords: Wills and Estates, Validity of Will, Testamentary Freedom, Testator’s Discriminatory Motive, Public Policy, Rules of Civil Procedure, Rule 75.06, Succession Law Reform Act, ss. 58 and 60, Extrinsic Evidence, Admissibility

International Property Group Inc. v. 2262814 Ontario Ltd., 2016 ONCA 203

Keywords: Contracts, Interpretation, Factual Matrix, Standard of Review, Question of Mixed Fact and Law, Sattva Capital v. Creston Moly Corp.

For a list of Civil Endorsements, click here.

For a list of Criminal Decisions, click here.

For a list of Ontario Review Board Decisions, click here.

Civil Decisions

Tender Choice Foods Inc. v. Planet Energy (Ontario) Corp., 2016 ONCA 192 

[Laskin, MacFarland and Roberts JJ.A.]

Counsel:

Louis A. Frapporti, for the appellant

Dan Murdoch and James Wilson, for the respondent

Keywords:   Contracts, Standard of Review, Findings of Fact, Palpable and Overriding Error

Facts:

In April 2008, the respondent electricity provider entered into a fixed price electricity supply contract with the appellant. The appellant subsequently sued the respondent for a declaration that the contract was rescinded and damages for negligence and negligent misrepresentation. At trial, the judge accepted the evidence of the respondent that the appellant wanted to contain its costs and have predictable costs going forward that the appellant could accurately budget for and that would avoid the need to worry about the fluctuations in those costs. In accepting the evidence, the trial judge rejected the evidence of the appellant that the respondent had misrepresented to it that electricity costs would continue to escalate and that the appellant would save money over the five-year term of the proposed fixed price contract. He rejected the evidence of the appellant that it was totally ignorant of the fixed price contract given its experience and sophistication.

Issue:

Did the trial judge err in his factual determination?

Holding: Appeal dismissed.

Reasoning:

No. The findings of a trial judge are entitled to deference, and absent palpable and overriding error the Court of Appeal will not intervene. Even if the respondent owed the appellant any duty of care, it was met in this case on the factual findings of the trial judge, which was supported by the evidence.

Donis v. Georgopoulos, 2016 ONCA 194 

[Gillese, Huscroft and Miller JJ.A]

Counsel:

Constantine Alexiou, for the appellant

Maurice W. Pilon, for the respondent

Keywords: Contracts, Estates, Real Property, Undue Influence, Non Est Factum, Consideration, Independent Legal Advice

Facts:

The issue in this appeal is the validity of a memorandum of agreement (MOA) that transfers ownership of a house from Sofia Denis (mother) to her daughter, Dimitra Georgopoulos, in exchange for $100,000.00 and a promise that the mother could remain living in the house for the rest of her life.

Soon after, the mother passed away unexpectedly.  The transfer of the house reduced the inheritance of the mothers son, Christos Donis and other daughter Eleni.

The son challenged the validity of the transfer primarily on the basis that: (1) their mother’s rudimentary understanding of English prevented her from having the requisite capacity and understanding to execute the MOA; and (2) Dimitra exercised undue influence over her mother, who did not receive proper independent legal advice. The trial judge dismissed his challenge and Christos appeals.

Issues:

The appellant argues that the trial judge erred in finding that:

  1.   The mother understood the MOA and the MOA was not invalidated by the doctrine of non est factum;
  2.   Dimitra rebutted the presumption of undue influence;
  3. The mother’s interests were protected by independent legal advice; and
  4. The MOA was valid despite a failure of consideration.

Holding: Appeal Dismissed

Reasoning:

  1. The court held that the factual findings of the trial judge were sufficient and there is no need to interfere with his findings. He found that: (1) the mother had sufficient ability in English to read and understand the MOA; (2) the mother had sufficient ability in English to understand the lawyer’s explanation of the content of the MOA; and (3) Dimitra provided her mother with an explanation of the content of the MOA in her native language.
  2. The appellant argues that, in the alternative, if the mother understood the MOA, she only signed it as a result of Dimitra’s undue influence over her. The trial judge stated that there was sufficient evidence to raise the presumption of undue influence because Sofia was dependant on Dimitra for basic needs, she was in a relationship of trust and confidence.  He went on, however, to find that Dimitra had rebutted the presumption of undue influence, as the mother received independent legal advice from a lawyer.
  3. The appellant argued that the trial judge erred, stating that the MOA was invalid because there was a failure of consideration, as the mother died shortly after the MOA was signed and therefore never received the future care that she was contemplated by the MOA. The court rejected this argument, looking to the MOA which stated, “[t]he agreement did not provide that Dimitra could have the house for such a time as she continued to provide care to Sofia”. There was sufficient consideration for the MOA.

McDowell v. Cavan-Millbrook – North Monaghan (Municipality), 2016 ONCA 193 

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

Counsel:
Roderick McDowell, in person

Raffaele Sparano, for the appellant

Christopher Afonso, for the respondent

Keywords: Civil Procedure, Dismissal For Delay, Prejudice, Self-Represented Litigant, Inordinate and Inexcusable Delay, Rules of Civil Procedure, Rule 24.01, Armstrong v. McCall

Facts:

Appellant McDowell, commenced an action against the respondent Municipality and others asserting various causes of action, including negligence, intentional torts and breach of contract. McDowell claimed that the Municipality prevented him from obtaining approval of a plan of subdivision and limited his ability to sell his property. This action was eventually dismissed for delay under rule 24.01 of the Rules of Civil Procedure. The appellant appeals from that dismissal.

Issues:

(1) Did the motion judge err in finding that the appellant’s delay was inordinate and inexcusable?

(2) Did the motion judge err in finding a failure to rebut the presumption of prejudice and that actual prejudice existed?

(3) Did the motion judge fail to comply with responsibilities owed to self-represented parties?

(4) Did the motion judge err in failing to address the appellant’s cross-motion for the production of documents?

Holding: Appeal Dismissed

Reasoning:

(1) No.  The motion judge found no evidence that the Municipality was the cause of any delay and that there was no substance to the appellant’s suggestion that the Municipality “laid in wait to pounce on the appellant.” The appellant was given numerous warnings. Thus the delay was inordinate and inexcusable, for which the appellant was responsible.

(2) No.  Once inordinate and inexcusable delay is found, there is a presumption of prejudice:  Armstrong v. McCall. The appellant failed to produce any convincing evidence to rebut the presumption and thus there was no need for a finding of actual prejudice, even if the motion judge concluded that actual prejudice existed.

(3) No.  While the court system presents considerable challenges to self-represented parties, these parties have a responsibility to familiarize themselves with any procedures relevant to the case. This matter had an inordinate and prejudicial delay and the appellant’s conduct cannot be excused simply because he was self-represented.

(4) No.  The appellant’s motion was served four days before the hearing and would be rendered moot if the dismissal for delay motion was granted. The motion judge’s adjournment was a discretionary decision and uninfected by any error.

Neuberger v. York, 2016 ONCA 191 

[Gillese, van Rensburg and Miller JJ.A.]

Counsel:
Chris G. Paliare, Megan E. Shortreed and Jean-Claude Killey, for the appellant Edie Neuberger
Kimberly Whaley, Benjamin Arkin and Arieh Bloom, for the appellant Adam Jesin-Neuberger
Guy Pratte, Aaron Blumenfeld and Ewa Krajewska, for the respondent Myra York in all capacities
Clare E. Burns and Bianca La Neve, for the respondents Sonny York, Laura York and Spencer York

Keywords: Wills and Estates, Validity of Wills, Estoppel by Representation and Convention, Rules of Civil Procedure, Rule 75.01 & 75.06, Evidence, Proof of Wills

Facts:
Chaim Neuberger’s (“Mr. Neuberger”) long-standing intention was to leave his estate, worth over $100 million, equally to his two daughters Edie and Myra. The appellant, Edie, has five adult children, one of whom is the appellant, Adam Jesin-Neuberger (“Adam”).  The respondent, Myra, has three adult children (the “York Parties”).

Mr. Neuberger executed primary and secondary wills in 2004 (the “2004 Wills”) and again in 2010 (the “2010 Wills”) with Edie and Myra named as co-estate trustees.  Both sets of wills left his estate to Edie and Myra and their children. However, the two wills allegedly differ in a manner that results in Myra’s share exceeding Edie’s by approximately $13 million.

Edie took a number of steps in her capacity as co-estate trustee under the 2010 Wills and ultimately commenced legal proceedings to challenge the validity of the 2010 Wills on the basis that her father did not have the testamentary capacity when he executed them.  Adam, through separate legal representation, seeks to challenge the validity of the 2010 Wills. Together, Edie and Adam’s proceedings are referred to as the “Wills Challenges”.  In response, the York Parties moved to dismiss the Wills Challenges on the basis that they are barred by the equitable doctrines of estoppel by representation and estoppel by convention.

The motion judge granted the motion to dismiss the Wills Challenges. She found that Adam was a “straw man” who had no knowledge of the 2010 Wills or the estate and came forward only to support his mother’s position in the litigation. The motion judge found that Edie was estopped from challenging the validity of the 2010 Wills on the following basis: she had delayed bringing her challenge without explanation despite having doubts of Mr. Neuberger’s capacity prior to 2011; Edie undertook  actions as an estate trustee in which she held herself out as such to various professionals; and the prejudice that would ensue from having to unwind the estate freeze that would cause the respondents to suffer as a result of having taken steps based on the 2010 Wills.  Edie and Adam appealed from the dismissal of their Wills Challenges.

Issues:
(1) Is there an automatic right to proof in solemn form pre-probate?
(2) Did the motion judge err in her analysis of Edie’s right to challenge the 2010 wills?
(3)Did the motion judge err in barring the Wills Challenges based on estoppel?
(4) Did the motion judge err by failing to take into account the relevant policy considerations?
(5) Did the motion judge err in barring Adam from pursuing his wills challenge because he is a “straw man”?
(6) Did the motion judge err in her factual findings in respect of Adam?

Holding: Appeal allowed.

Reasoning:
(1) No. Edie and Adam are Interested Persons under Rule 75.06(1) of the Rules of Civil Procedure. As a general principle, before probate issues, an Interested Person has the right under rules 75.01 and 75.06 to request formal proof of the testamentary instrument, however they do not have, as of right, the ability to require that the testamentary instrument be proved in solemn form.

Flowing from the wording of rule 75.01, an Interested Person does not have the right to compel proof in solemn form. Rather, they can make an application for it to be “proved in such manner as the court directs” and it must be considered in conjunction with rule 75.06 because the application must be brought under that rule. When read together, rules 75.01 and 75.06 give the court discretion over whether a testamentary instrument is to be proved and the manner in which the instrument is proved.

In addition, an Interested Party must meet a minimal evidentiary threshold before a court should grant a request that a testamentary instrument be proved. In small estates, needless litigation could deplete the estate.  An applicant or moving party under 75.06 must adduce some evidence which, if accepted, would call into question the testamentary instrument that is being propounded.

(2) No. Rules 75.04 and 75.05 apply to wills challenges where probate has already issued and the court must decide whether to revoke or return the certificate. In the current case, probate has never been granted.  Edie argued that the motion judge conflated the legal tests in relation to Rules 75.04 and 75.05 with the test to be applied under Rule 75.01 where probate had never been granted. The court agreed with the argument of the York Parties  that this issue was a “red herring” because the sole task was to decide whether the doctrine of estoppel applied to preclude the Wills Challenges from proceeding.

(3) Yes. The motion judge erred in finding that estoppel by representation and convention can bar a challenge to the validity of a will. The motion judge erred in relying on a jurisprudential basis for her finding. The motion judge relied on the following three cases as the basis to invoke estoppel to bar the Wills Challenges: Canadian Superior Oil Ltd. v. Paddon Hughes Development Co., [1970] S.C.R. 932; Ryan v. Moore, 2005 SCC 38; and, Leibel v. Leibel, 2014 ONSC 4516.

The court held that neither Canadian Superior Oil nor Ryan were relevant to the issue at hand and that the judge in Liebel erred in relying on the aforementioned cases.  In Leibel, the motion judge found that there were discoverability issues and that the party seeking to challenge to the validity of the wills was statute-barred. In this case, the motion judge erred in finding the application was statute-barred and she mistakenly relied on Canadian Superior Oil and Ryan as authority for the proposition that estoppel applies to the question of whether an interested person should be permitted to proceed with a challenge to the validity of a will.

(4) Yes. The court has a responsibility to ensure that only wills that meet the hallmarks of validity are probated. The court also has a duty to the testator whose death precludes them from protecting their own interests, and to those with a legitimate interest in the estate and to the public at large. The court’s ability to discharge these duties would be jeopardized if the doctrine of estoppel was available to prohibit a party from having the validity of a will determined.

The court agreed with Edie’s submission that the motion judge’s reliance on Edie’s undue delay as a basis for her decision created a bad precedent that could adversely affect the administration of estates and had to be set aside for policy reasons. The motion judge’s decision in this case  could result in parties bringing premature and potentially poorly informed challenges or force trustees to take no steps in the administration of estates for fear of being deemed unduly dilatory or as having affirmed the validity of the will.  The court found no basis to import the doctrine of estoppel into Rule 75. Rule 75 gives the court enough discretion to screen out baseless claims for formal proof of testamentary instruments and, for those with merit, control the manner in which the instrument is proved.

(5) Yes. It is not clear the basis for the motion judge finding that Adam was a “straw man”. Adam provided evidence that he made an independent decision to challenge the 2010 Wills and Edie’s evidence was that she did not want her children to be involved. Neither of their evidence was disturbed on cross-examination. The motion judge was required to provide an explanation as to why she rejected Adam’s evidence.

(6) Yes. The motion judge made findings of fact in relation to Adam’s claim in a conclusory fashion and did not explain how she weighed conflicting evidence and credibility disputes. First, there was no basis for the motion judge’s finding that Adam did not have a close relationship with his grandfather.  Second, the motion judge must have misapprehended the evidence in finding that Adam had not explained why he brought his will challenge. Adam’s evidence was that he was content to have his mother pursue the validity of the 2010 Wills without his involvement until January 2014, when he learned the York Parties were intending to bring a motion to strike his mother’s wills challenge. As a result of the motion to strike, Adam felt his interests might not be protected.  It is not clear based on Adam’s evidence how the motion judge came to the conclusion that he gave no explanation for why he challenged the will.

In the result, the dismissal of the Wills Challenges was set aside and the Wills Challenges are permitted to proceed on the merits.

Labelle v. Canada (Border Services Agency), 2016 ONCA 187 

[Laskin, Pardu and Roberts JJ.A.]

Counsel:

William G. Scott, for the appellants
Helene Robertson, for the respondents

Keywords: Torts, Negligence, Occupier’s Liability, Slip and Fall, Rules of Civil Procedure, Rule 48.14, Administrative Dismissal for Delay, Prejudice, Reid v Dow Corning Corp.

Facts:

Suzan Labelle (the “Appellant”) allegedly slipped and fell at a border crossing in Ontario. She commenced a claim against the Canada Border Services Agency (“CBSA”), Abitibi Consolidated Inc. (“Abitibi”) and International Bridge Company (“International Bridge”) (collectively the “Respondents”). Abitibi and International Bridge were subject to an order under the Companies’ Creditors Arrangement Act, so the claims against them were automatically stayed.

The claim moved very slowly until March 2012, when the court issued a status notice. Although the Appellant’s counsel instructed staff to do so, they failed to request a status hearing from the court. The registrar dismissed the Appellants’ action in June 2012. Appellant’s counsel promptly obtained the Respondents’ position that they would not oppose the motion to set aside the dismissal order. More than two years passed before the Appellant’s counsel brought the motion. The motion judge refused to set aside the dismissal order because the Respondents were prejudiced by the delay.  The Appellant appeals.

Issue: Did the motion judge err in her assessment of prejudice to the Respondents?

Holding: Appeal allowed.

Reasoning:

Yes. The motion judge erred in her assessment, which was at the heart of her decision to dismiss the Appellants’ motion.

The motion judge applied the circumstances of the case as outlined in Reid v Dow Corning Corp: explanation of the litigation delay; inadvertence in missing the deadline set out in the status notice; promptly moving to set aside the registrar’s dismissal order; and no substantial prejudice to the respondents because of the delay. The motion judge correctly observed that it was not mandatory that the Appellant satisfy all four factors. The motion judge listed the Appellant’s reasons for the litigation delay and failure to promptly move to set aside the dismissal order.

The motion judge concluded the motion ought to be dismissed because the Appellant’s delay caused significant prejudice to the Respondents. The Respondents were prejudiced because the crossclaim against Abitibi disappeared and the Respondents lost the ability to defend themselves because evidence regarding maintenance was no longer available.

Prejudice to the defence that exists regardless of the Appellant’s delay is not relevant. Prejudice arising from the defendants’ own failure to do something that they reasonably could have or ought to have done such as interviewing witnesses and conducting surveillance cannot be the basis for refusing to revive a claim that was administratively dismissed for delay.  The Respondents failed to take any steps to preserve or pursue any claims that they may have had against Abitibi or International Bridge in the CCAA proceedings. The unavailability of evidence regarding maintenance was not a product of the Appellant’s delay.

The motion judge’s conclusion regarding prejudice was central to her decision to dismiss the Appellants’ motion. Without the finding of prejudice to the Respondents, a contextual analysis would result in concluding that the order ought to be set aside.  The factor of delay by itself is not sufficient to deny the Appellant’s request to reinstate the action. Also, there is no evidence that the Appellant’s delay was the product of a deliberate decision not to take any steps in the proceedings.

Spence v. BMO Trust Company, 2016 ONCA 196 

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

Counsel:

Justin W. de Vries and Angela Casey, for the appellant

Earl A. Cherniak, Q.C., Jasmine T. Akbarali and Michael S. Deverett, for the respondents

Keywords: Wills and Estates, Validity of Will, Testamentary Freedom, Testator’s Discriminatory Motive, Public Policy, Rules of Civil Procedure, Rule 75.06, Succession Law Reform Act, ss. 58 and 60, Extrinsic Evidence, Admissibility

Facts: The deceased, Eric Spence (“Eric”), was survived by his daughter, the respondent Verolin Spence (“Verolin”). According to Verolin, she and her father enjoyed a positive relationship for many years.  However, their relationship changed in 2002 when she told Eric that she was pregnant. Verolin says that Eric, a black man, began to restrict his communications and any other contact with her when he learned that the father of her child was white. Verolin gave birth to her son A.S. in 2003. Eric made a will in 2010 in which he expressly excluded Verolin from sharing in any part of his estate.

Eric passed away and the appellant, BMO Trust Company (“BMO Trust”), was issued a Certificate of Appointment of Estate Trustee with a Will in 2013 and began to administer the estate. Verolin and A.S. did not challenge the Will or BMO Trust’s appointment as estate trustee in the probate proceeding.  Instead, in 2014, they applied in the Superior Court under rule 75.06 of the Rules of Civil Procedure, and ss. 58 and 60 of the Succession Law Reform Act (the “SLRA”) for: i) a declaration that the Will was void, in whole or in part, because it was contrary to public policy; ii) leave to proceed with a dependant’s relief application under the SLRA; and iii) directions from the court.

In support of the application, Verolin filed her own affidavit, together with an affidavit sworn by Imogene Parchment (“Imogene”), who had acted as Eric’s occasional caregiver.  In both affidavits (the “Extrinsic Evidence”), the affiants alleged that Eric’s decision to exclude Verolin and A.S. from his Will was racially-motivated. Verolin asserted that, because her disinheritance was motivated by racial discrimination on Eric’s part, the Will was void by reason of public policy. The application judge set aside the Will on the basis that it violated public policy against discrimination on racial grounds. BMO Trust appeals the application judge’s decision.

Issues:

(1)     Was the Extrinsic Evidence admissible before the application judge?

(2)     Did the application judge err by improperly interfering with Eric’s testamentary freedom?

Holding: Appeal allowed.

Reasoning:

(1) No. As a general rule, extrinsic evidence of a testator’s intentions is not admissible when the testator’s will is clear and unambiguous on its face. In Rondel v. Robinson Estate, this court recognized two exceptions to this rule.  First, direct extrinsic evidence of intention may be admissible where a will is equivocal, that is, where the words used in the will may be read as applying equally to two or more persons or things.  Second, evidence of the testator’s circumstances or the circumstances surrounding the formation of a will may also be admissible in cases where the will is or may be ambiguous. This is not a wills interpretation case and the application judge was not sitting as a court of construction.  Here, it is accepted that the terms of the Will are unambiguous and unequivocal.  Consequently, the established exceptions to the general exclusionary rule regarding evidence of a testator’s intentions are not engaged.

It need hardly be said that public policy in Canada precludes discrimination on the basis of race and other discriminatory characteristics.  The public policy against discrimination is reflected in the Charter and the human rights legislation of every province in Canada, including Ontario’s Human Rights Code. However, the desirability of affirming the public policy against discrimination does not lead to the conclusion that third-party extrinsic evidence of a testator’s alleged discriminatory motive is admissible to challenge the validity of a will where, as here, the testator’s residual bequest to a private beneficiary is absolute, unequivocal and unambiguous. If, as Rondel holds, extrinsic evidence is not admissible to establish what a testator intended, still less should it be admissible to question why the testator made a particular bequest. In this case, the Will expressly discloses Eric’s motive, at clause 5(h).  That clause provides an explanation, from the testator himself, for his decision to exclude Verolin from the Will, namely, that “she has had no communication with me for several years and has shown no interest in me as her father”. Viewed in this fashion, the purpose of the Extrinsic Evidence was not to establish Eric’s motive for the residual bequest in his Will but, rather, to contradict the lawful motive for the bequest disclosed by the plain language of the Will and to substitute, in its stead, a different and allegedly unlawful motive. There is no basis at law for the admission of wholly contradictory, extrinsic evidence of motive for this purpose.  The courts should be loath to sanction such an indirect attack, which the deceased cannot challenge, on a testator’s expressed motive and testamentary choices.

(2) Yes. Judicial interference with Eric’s testamentary freedom was not warranted. A testator’s freedom to distribute his property as he chooses is a deeply entrenched common law principle. The Supreme Court has also recognized the importance of testamentary autonomy in Tataryn v. Tataryn Estate. However, notwithstanding the robust nature of the principle of testamentary freedom and its salutary social interest dimensions, the courts have recognized that it is not an absolute right.  Apart from limits imposed by legislation, it may also be constrained by public policy considerations in some circumstances. Canada Trust Co. v. Ontario (Human Rights Commission, where the discriminatory terms of a trust were found to be contrary to public policy,  is instructive in this regard. However, in this case, the Will at clause 5(h) that no provision was made for Verolin because “she has had no communication with me for several years and has shown no interest in me as a father” was not the language of racial discrimination. Canada Trust confirms that Canadian courts will not hesitate to intervene on the grounds of public policy where implementation of a testator’s wishes requires a testator’s executors or trustees or a named beneficiary to act in a way that collides with public policy. That is not this case. To apply the public policy doctrine to void an unconditional and unequivocal testamentary bequest in cases where, as here, a disappointed potential heir has been disinherited absolutely in favour of a different, worthy heir, would effect a material and unwarranted expansion of the public policy doctrine in estates law.  Absent valid legislative provision to the contrary, or legally offensive conditional terms in the will itself, the desire to guard against a testator’s unsavoury or distasteful testamentary dispositions cannot be allowed to overtake testamentary freedom. The need for a robust application of the principle of testamentary freedom is especially important in the context of a testator’s central right to choose his or her residual beneficiaries. On the facts of this case, there was no foundation for the public policy-driven review undertaken by the application judge.  She erred by going behind the testator’s expression of his clear intentions regarding the disposition of his property. The application judge’s decision in this case implicitly endorses a general supervisory role for the courts in policing a testator’s unqualified and legitimate choice of his or her heirs on the ground of enforcing the public policy against discrimination.  This proposition, if accepted, would significantly erode and arguably displace meaningful testamentary freedom.

International Property Group Inc. v. 2262814 Ontario Ltd., 2016 ONCA 203 

[Epstein, Pepall and Hourigan JJ.A.]

Counsel:

Douglas Bourassa, for the appellants
Harvin D. Pitch, for the respondent

Keywords: Contracts, Interpretation, Factual Matrix, Standard of Review, Question of Mixed Fact and Law, Sattva Capital v. Creston Moly Corp.

Facts:

The appellants (“Appellants”) agreed to sell certain properties to the respondents (“Respondents”). The parties entered an agreement of purchase and sale in 2014. The purchase price was $36,000,000 and included a $2,000,000 deposit. Part of the purchase price included the Respondent’s assumption of two existing mortgages on the properties. There were two related clauses in the agreement. A  Rider required the respondent to proceed in good faith and with due diligence. If the Respondent fulfilled this obligation, it was entitled to determine whether the terms of the mortgages were acceptable and, if not, to back away from the deal.

The Respondent did not agree to the mortgages’ conditions and backed out of the agreement. The Appellants refused to return the deposit. The parties agreed to have the dispute settled by summary judgment. The Respondent won the motion and the Appellants appealed the decision on the grounds that the motion judge’s interpretation of the agreement was an error of law.

Issue: Was the motion judge’s interpretation of the agreement incorrect?

Holding: Appeal dismissed

Reasoning:

No. Contractual interpretation involves issues of mixed fact and law and courts should be cautious in identifying extricable questions of law in interpretive disputes.

The Appellants argued that the motion judge did not interpret the Rider in the context of the factual matrix, including the Rider’s wording. The court did not accept this argument. The Appellants relied on the parties’ negotiations and subjective intent, which was not relevant to interpreting the agreement.

The Appellants also argued that the motion judge erred by failing to interpret the Rider as a whole by failing to interpret specific language. However, the motion judge did interpret the language which was evident by his referral to the Respondent’s obligation regarding the mortgages.

The motion judge was of the view that the Respondent acted in good faith and the evidence supported it. This finding was open to the motion judge to make and he did so by interpreting a witness’s evidence as a whole.

Civil Endorsements

Damallie v. Shaukat, 2016 ONCA 198

[Laskin, MacFarland and Roberts JJ.A.]

Counsel:

Clifton Damallie, in person

No one appearing for the responding party

Keywords: Motion to Extend Time for Leave to Appeal, Motion to Vary Order

1860035 Ontario Ltd. v. Velika Realty Inc., 2016 ONCA 195

[Laskin, MacFarland and Roberts JJ.A.]

Counsel:

Charles L. Merovitz, for the appellants

Craig O’Brien, for the respondent

Keywords: Striking Statement of Defence, Fresh Evidence

Roopchand v. Chau, 2016 ONCA 202

[Juriansz, Epstein and Pepall JJ.A.]

Counsel:

Richard P. Quance, for the appellants

Lou Brzezinski and Chad Kopach of Blaney McMurtry, for the respondents

Keywords: Refusal of Request for Adjournment, Discretion, Balancing Interests of Parties, Balancing Interests of Justice, Appeal Dismissed

Samuda v. Jarvis George Housing Co-operative Inc., 2016 ONCA 200

[Laskin, MacFarland and Roberts JJ.A.]

Counsel:

Rosalee Samuda, acting in person

Bruce D. Woodrow, for the responding party

Keywords: Extension of Time to Appeal, No Prospect of Success, Motion Dismissed

Criminal Decisions

R. v. Grizzle, 2016 ONCA 190

[Watt, Lauwers and Pardu JJ.A.]

Counsel:

Breana Vandebeek, for the appellant

David Finley, for the respondent

Keywords: Criminal Law, Possession of a Loaded Prohibited Firearm, Fault Element, Improper Crown Conduct, Corbett Ruling

R. v. Shepherd, 2016 ONCA 188

[Watt, Lauwers and Pardu JJ.A.]

Counsel:

James Lockyer and J. Thomas Wiley, for the appellant

Howard Leibovich, for the respondent

Keywords: Criminal Law, Manslaughter, Guilty Plea, Fresh Evidence, Acquittal

R. v. Webster, 2016 ONCA 189

[Watt, Lauwers and Pardu JJ.A.]

Counsel:

Robert Sheppard, for the appellant

Andrew Cappell, for the respondent

Keywords: Criminal Law, Preliminary Inquiry, Certiorari

R. v. Comtois, 2016 ONCA 185

[Watt, Lauwers and Pardu JJ.A.]

Counsel:

Julian Roy and Marc Gibson, for the appellant

Nicholas Devlin, for the respondent

Keywords: Criminal Law, Summary Conviction, Certiorari, Charter Relief

R. v. Balogun-Jubril, 2016 ONCA 199

[Cronk, Juriansz and Roberts JJ.A.]

Counsel:

Michael W. Caroline, for the appellant

Christopher Chorney, for the respondent

Keywords: Criminal Law, Summary Conviction, Criminal Code, ss. 253(1)(a) and (b), Realistic Risk of Danger to the Public

R. v. Clouthier, 2016 ONCA 197

[Gillese, Watt and Tulloch JJ.A.]

Counsel:

Hannah Freeman, for the appellant

Sean J. May, for the respondent

Keywords: Criminal Law, Intermittent Sentences, Criminal Code, s. 732(1), Impaired Operation Causing Bodily Harm, Dangerous Operation Causing Bodily Harm, Failure to Stop at the Scene of an Accident

R v. Emery, 2016 ONCA 204

[Feldman, Gillese and Huscroft JJ.A.]

Counsel:

Christopher Emery, acting in person

Zachary Kerbel, duty counsel

Matthew Asma, for the respondent

Keywords: Criminal Law, Unauthorized Possession of a Prohibited Weapon, Criminal Code, ss. 683(1)(g)

Ontario Review Board Decisions

 Petroniuk (Re), 2016 ONCA 186

[Watt, Lauwers and Pardu JJ.A.]

Counsel:

Daniel Moore, for the appellant Elizabeth Petroniuk

Grace Choi, for the respondent Crown

Keywords: General Forensic Unit Detention, NCRMD, Significant Threat

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.

Hello for another week.

Civil law topics covered by the Court of Appeal this week included the assignment of leases and whether a landlord was reasonable in refusing to consent because the assignee was affiliated with a competitor, family law, real property, municipal law and, as usual, several appeals from summary judgment.

I hope everyone has a safe and fun Family Day long weekend.

John Polyzogopoulos

Blaney McMurtry LLP
JPolyzogopoulos@blaney.com
Tel: 416.593.2953
http://www.blaney.com/lawyers/john-polyzogopoulos

 

Table of Contents

Civil Decisions 

8150184 Canada Corporation v. Rotisseries Mom’s Express (Les Rotisseries Mom’s Express Limitée), 2016 ONCA 115

Keywords: Contracts, Franchise Law, Arthur Wishart Act, Requests to Admit, Rules of Civil Procedure, Rule 51.03, Conflict of Interest, Withdrawal of Counsel, Adjournments, Ineffective Assistance of Counsel

Hudson’s Bay Company v. OMERS Realty Corporation, 2016 ONCA 113

Keywords: Real Property, Commercial Leases, Shopping Malls, Lease Assignments, Consent, Whether Required, Whether Unreasonably Withheld, Commercial Tenancies Act, ss. 23(2)

Shoukralla v. Shoukralla, 2016 ONCA 128

Keywords: Family Law, Fraudulent Conveyance, Summary Judgment, Procedural Fairness, Fresh Evidence, Interlocutory Orders, Leave to Appeal, Courts of Justice Act, s.19(1)(b)

Wainfleet (Township) v. Vrbicek, 2016 ONCA 123

Keywords: Contracts, Real Property, Costs

Georgina (Town) v. Blanchard, 2016 ONCA 122

Keywords: Municipal Law, Site Alteration Permit, Municipal Act, 2001, ss. 223.16, 239(2)(f), 239.1 & 239.2, Municipal Council Meetings, Public, In Camera, Solicitor-Client Privilege, Investigator’s Report

The Guarantee Company of North America v. Ciro Excavating & Grading Ltd., 2016 ONCA 125

Keywords:  Contracts, Indemnities, Non est factum, Summary Judgment, Oral Evidence, Refusals on Cross-Examination

For a list of Civil Endorsements, click here

For a list of Ontario Review Board Decisions, click here

For a list of Criminal Decisions, click here

 

Civil Decisions

8150184 Canada Corporation v. Rotisseries Mom’s Express (Les Rotisseries Mom’s Express Limitée), 2016 ONCA 115

[Feldman, MacPherson and Miller JJ.A.]

Counsel:

Ashraf Ahmad, acting in person

David Fogel, for the respondent

Facts:

The appellant was the manager of a food franchise business, The Rotisseries Mom’s Express Limited. The respondent was a franchisee that entered into a franchise agreement with the franchisor. This contract was governed by the Arthur Wishart Act (“AWA”). The franchisee brought an action against the corporate franchisor and two personal “franchisor’s associates”, the appellant and Pierre McLean. The defendants, through their counsel Mr. Cadieux, stated that they wanted to comply with the AWA and that they would pay any amounts properly owing to the franchisee. Unfortunately, the parties were unable to settle their dispute as they could not agree on the amount, and a trial date was set. The defendants did not respond to a Request to Admit, and, by virtue of rule 51.03 of the Rules of Civil Procedure, they were deemed to admit the truth of the facts set out in the Request to Admit and the authenticity of the documents listed in it.

The defendants’ instructions to their counsel was that they intended to settle with the plaintiff and that they did not want to run up legal fees preparing for a trial that would not take place. As the trial date approached, Mr. Cadieux grew concerned that he was unable to contact his clients, and eventually informed the defendants that he could no longer represent them based on a serious conflict of interest that had arisen between them. Mr. Cadieux brought a motion to be removed as counsel of record for the defendants and also sought an adjournment of the trial so that the defendants could seek new counsel. Counsel for the plaintiff opposed the adjournment request and moved for judgment on the basis of the unanswered Request to Admit. The trial judge refused to grant the adjournment. The motion for judgment based on the Request to Admit then proceeded. Mr. Cadieux stayed in the courtroom and represented the defendants, who were not present. The trial judge rendered partial judgment in favour of the plaintiff.

Issues:

(1) Did the trial judge err by not permitting defendants’ counsel to get off the record at the commencement of the trial and by not granting the appellant’s request for an adjournment to enable him to retain and instruct new counsel?

(2) Did the appellant receive ineffective assistance from his counsel in the proceedings that culminated in the partial judgment against him?

Holding: Appeal dismissed.

Reasoning:

(1) No. Based on Khimji v. Dhanani, the decision to adjourn a hearing is a discretionary one. There was no reason to interfere with the trial judge’s exercise of discretion in this case. The trial date was well-known to the appellant. The day before the hearing, his counsel advised him to attend in person and described the various scenarios. The appellant chose not to attend his own trial with his eyes wide open. In addition, the appellant’s counsel remained in court and represented his client on the plaintiff’s motion in reliance on the Request to Admit despite his desire to be removed from the record. Finally, the result of the motion was a fair result. The trial judge ordered recovery for the plaintiff based on the unanswered Request to Admit only on what he called “hard” expenses, namely, those expenses corroborated by appropriate documentation.

(2) No. Under D.W. v. White,  ineffective assistance of counsel claims in civil cases are unusual and only available in the “rarest of cases.” The appellant did not meet this high burden. Mr. Cadieux represented his clients faithfully and in accordance with their instructions. He also stayed and represented them on the motion for judgment before he was removed from the record. The problem in the run-up to the trial date was not created by Mr. Cadieux’s efforts.  Rather, the problem was the appellant’s unwillingness to communicate with his counsel at a crucial time, coupled with an apparent late-breaking falling out between the appellant and Mr. McLean.

Hudson’s Bay Company v. OMERS Realty Corporation, 2016 ONCA 113

[Gillese, MacFarland and van Rensburg JJ.A.]

Counsel:                   

Sheila Block and Molly Reynolds, for the appellants

Jonathan Lisus and James Renihan, for the respondents

Facts:

The respondents leased space in three shopping malls: Yorkdale, Square One and Scarborough Town Centre, where they operated Hudson’s Bay stores as anchor tenants. The malls are owned and operated by the landlord appellants (the “Landlords”), represented by Oxford Properties Group (“Oxford”). The respondents sought to transfer the lease holdings to their joint venture with RioCan Real Estate Investment Trust (“RioCan”), including the leases at Yorkdale, Square One and Scarborough Town Centre (the “Leases”). The respondents sought consent from Oxford to assign and sublease the Leases, however, Oxford refused for fear of the degree of control that one of its competitors, RioCan, would have over Oxford’s properties.

The respondents then proposed a revised joint venture which would consist of two limited partnerships, the second being formed to hold the Leases. The Leases would be assigned to Hudson’s Bay Company (“HBC”) in its capacity as general partner of the second limited partnership, rather than the company jointly controlled by HBC and RioCan. Oxford refused to consent and the respondents brought an application under ss. 23(2) of the Commercial Tenancies Act for a declaration that the Landlords’ consents were not required for assignment and sublease of the Leases, or, alternatively, that the Landlords were unreasonably withholding their consent.

The application judge found in favour of the respondents. She noted that the Leases contained provisions that restrict their transfer or assignment. However, each of the Leases also contained an exception for an assignment to an affiliate of the existing tenant (the “affiliate exception”). As the Leases were to be assigned to HBC as general partner of the second partnership, the assignments fell within the affiliate exception. She found that no consent was necessary.

However, had consent been required, she found that the Landlords were entitled to withhold consent under the Square One lease, but not with the Yorkdale and Scarborough Town Centre leases. The distinction was that the Square One lease had a provision that consent to assignment may be arbitrarily withheld. With the other two leases, the applicants had met the burden of proving that the Landlords were acting unreasonably in withholding consent. Given that HBC would continue to operate the stores and be liable under the Leases, there was no reason to believe HBC’s interests would diverge from Oxford’s interests going forward.

Issues:

Did the application judge err in:

(1) holding that the assignment “to a limited partnership through its general partner” is an assignment to an affiliated company or corporation and therefore exempt from the consent requirement;

(2) finding, in the alternative, that the Yorkdale and Scarborough Town Centre leases require the Landlords to exercise their consent rights reasonably; and

(3) ignoring uncontested evidence and applying the wrong legal test to the evidence regarding the Landlords’ reasons for withholding consent.

Holding: Appeal dismissed.

Reasoning:

(1) No. The application judge correctly found that the affiliate exception applied and consent was not required. HBC did not hold bare title, nor was it a mere nominee for the true beneficial owner as Oxford suggested. Further, the application judge did not hold that an assignment to a limited partnership through its general partner fell within the affiliate exception. Rather, she concluded that the proposed assignments of the Leases would be to the general partner and not to the limited partnership. As such, Oxford’s characterization of the “beneficial” or “effective” ownership of the Leases should not direct the analysis.

The court adopted the application judge’s reasoning and held that she correctly concluded that, based on the unique legal nature of the limited partnership structure and the role played by the general partner, the Leases would be assigned to HBC, as general partner.  This is because a limited partnership is not a legal entity, so title to any real property must be held through its general partner; therefore, a lease can only be assigned to the general partner, not to a limited partnership. Further, the general partner retains control over the property and is solely responsible for the operations of the limited partnership. To take part in the control or management of the business would jeapordize the limited partner’s status as limited partner. Lastly, the general partner is solely liable for all payments under the contract and performance of all obligations. In the present case, the court found there would be no relationship between the Landlords and the limited partner. The legal relationship would continue to be between the Landlords and HBC. HBC would be liable for rents and amounts owing under the Leases, as well as compliance with all obligations and covenants under the Leases.

Based on its conclusion on the first issue, the court found it unnecessary to address the second and third grounds of appeal.

Shoukralla v. Shoukralla, 2016 ONCA 128

[Weiler, LaForme and Huscroft JJ.A.]

Counsel:

Victor Opara, for the appellants, Margelyn Delfin Dumolong, Luzviminda Jardenil Bautista and Gina Tumulak Aung

Michael Shoukralla, in person

G. William McKechnie Q.C., for the respondent, Carmen Shoukralla

Facts:

Carmen Shoukralla (the “Wife”) commenced an application against her husband Michael Shoukralla (the “Husband”) seeking, among other things, an order that a property located in Toronto (the “Property”) be sold and the proceeds be made available to satisfy her equalization entitlement and child support arrears and to secure child support. A January 2011 court order prohibited the Husband from selling, encumbering or registering mortgages on any properties without a further court order.

At a subsequent trial concerning the family law issues, the evidence revealed that the Husband sold the Property. The Wife secured an adjournment of the trial to move to add the appellant purchasers. While the appellants did not attend or file any material for the motion, the judge was satisfied that service requirements were met and granted the motion, among other relief.

At the conclusion of the trial, the Wife brought a motion for summary judgment seeking an order to set aside the Husband’s transfer of the Property. The Wife did not serve the appellants, but counsel for the appellants attended the motion and submitted without evidence that they were never served with any prior documents and were unaware of the action between the Wife and Husband. The motion judge rejected these submissions and found that the appellants had been served with previous documents and orders, but accepted that the appellants had not been served with the summary judgment motion materials.

The motion for summary judgment was adjourned and later heard. The trial judge released separate reasons for the trial judgment and the summary judgment motion. The Wife was successful in both, with a finding that the transfer of the Property was a fraudulent conveyance.

The appellants appealed the order adding them as parties on the application and the order granting summary judgment.

Issue:

Should the appeals of the two orders be allowed?

Holding: Appeal Dismissed

Reasoning:

No.  Initially, the appellants argued that their right to procedural fairness was violated because the order to add them as parties was made without notice and was therefore subject to a de novo review. They also argued that they were never properly served with the notice of motion, and thus the judge should have held a de novo review on whether service was effective.

The Court reasoned that because the order was interlocutory, any appeal would have to be to the Divisional Court with leave pursuant to s. 19(1)(b) of the Courts of Justice Act. Thus, the appeal from the order adding them as parties was not properly before the court.

The appellants’ second argument was that the judge violated their right to procedural fairness by failing to provide them with the opportunity to adequately prepare and respond to the motion. The Court rejected this argument, reasoning that the appellants’ counsel refused to accept service on behalf of his clients on a scheduled return date. They were thus given three weeks to respond to the motion and there was no evidence that they requested additional time or an adjournment. Thus, the appellants failed to demonstrate any error.

The appellants also submitted that the motion judge improperly relied on evidence from the trial in adjudicating on the summary judgment motion. The Court also rejected this submission, and instead found that the motion judge’s findings were well-supported by the motion record. While there was some reference to the trial evidence, it was not essential to the decision and did not constitute a palpable and overriding error.

Finally, the Court rejected the submission that the motion judge erred in finding that there was a fraudulent conveyance. Reviewing the case law and the evidence, the judge found that there were “ten badges of fraud” surrounding the transfer, each of which was supported by the Wife’s evidence. Furthermore, the appellants did not rebut the presumption of fraud. The court also rejected the appellants’ tendering of fresh evidence, as the test to admit such evidence had not been met.

Wainfleet (Township) v. Vrbicek, 2016 ONCA 123

[Doherty, Epstein and Miller JJ.A.]

Counsel:

Ivan Vrbicek, appearing in person

Sarah J. Draper, for the respondent

Facts:

The appellant claimed the respondent agreed to sell the parcel of land that included Parts 7, 10 and 12 of Lot 17 to the appellant. The respondent argued the lots were not included.

The trial judge accepted the respondent’s argument that those parts were excluded in the sale. The trial judge found that the appellant failed to prove any damages flowing from the failure to convey what the appellant believed was “worthless” land.

Issues:

(1) Did the trial judge err in dismissing the claim?

(2) Did the trial judge err in ordering costs?

Holding: Appeal dismissed. Costs on a partial indemnity basis fixed at $8,000 in favour of the respondent.

Reasoning:

(1) No. There is no reason to interfere with the trial judge’s decision. The trial judge thoroughly reviewed the evidence put forth at trial.

(2) No. The trial judge has the discretion to assess costs. She outlined the factors relevant to her assessment and they were properly considered. The appellant did not formally ask for leave to appeal costs, but the issue was nonetheless addressed.

Georgina (Town) v. Blanchard, 2016 ONCA 122

[Hoy A.C.J.O., Pardu and Roberts JJ.A.]

Counsel:

Lawrence Hansen, for the appellants, Marvin Blanchard, 1124123 Ontario Limited and Baldwin 33, Inc.

John R. Hart, for the respondent, The Corporation of the Town of Georgina

Facts:

In the course of considering whether to grant the appellants a site alteration permit for a property in Georgina, the respondent, The Corporation of the Town of Georgina, relied on s. 239(2)(f) of the Municipal Act, 2001 (the “Act”) to hold two in camera meetings. That section permits a municipality to depart from the normal requirement that all meetings be held in public if the subject matter is subject to solicitor-client privilege. An investigator appointed by the municipality under s. 239.2(3) of the Act,  whoconcluded that the subject matter considered at the in camera meetings indeed fell within the exception in s. 239(2)(f). The application judge dismissed the appellants’ application to set aside the investigator’s report.

Issues:

(1) Did the application judge err in concluding that s. 223.16 of the Act applied to the investigator?

(2) Did the application judge err in concluding that the investigator’s reference to a site alteration agreement (as opposed to an application) in her report was a mis-description and likely a typographical error?

(3) Should the investigator’s report be set aside because the municipality did not prove compliance with its duties under the Act in appointing the investigator?

Holding: Appeal dismissed.

Reasoning:

(1) No. Under s. 239.1 of the Act, a person may request that an investigation of whether a municipality was permitted to close all or part of a meeting to the public be undertaken: “(a) by an investigator referred to in subsection 239.2 (1); or (b) by the Ombudsman appointed under the Ombudsman Act, if the municipality has not appointed an investigator referred to in subsection 239.2 (1).” Section 223.16 provides as follows: “No proceeding of the Ombudsman under this part shall be held bad for want of form, and, except on the ground of lack of jurisdiction, no proceeding or decision of the Ombudsman is liable to be challenged, reviewed, quashed or called in question in any court.” The appellants’ submission that the lack of jurisdiction limitation only applied to investigations in respect of closed meetings conducted by the Ombudsman was rejected. Section 239.2(9) of the Act provides that s. 223.16 (among others) applies “with necessary modifications with respect to the exercise of functions described in this section.” “This section” is s. 239.2 and the functions described in s. 239.2 include the functions of an investigator. The investigator was appointed pursuant to s. 239.2 and exercised the function described in that section. Section 223.16 therefore applied. Given the conclusion on this issue, there was no need to address the appellants’ arguments seeking to challenge the exercise by the investigator of her function under s. 239.2 other than on the ground of lack of jurisdiction.

(2) No. It was clear from the investigator’s report as a whole that the investigator understood that the matter before the respondent was a site alteration application, and not a site alteration agreement. The appellants failed to establish lack of jurisdiction.

(3) No. Section 239.2(3) requires that, in appointing an investigator, “the municipality shall have regard to, among other matters, the importance of the matters listed in [s. 239.2(5)]”. Those matters are: “(a) the investigator’s independence and impartiality; (b) confidentiality with respect to the investigator’s activities; and (c) the credibility of the investigator’s investigative process.” The appellants provided no authority for their argument that a municipality is required to prove compliance with s. 239.2(3), and the court saw no basis to impose such an onus on a municipality. Moreover, there was no reason to doubt that the respondent complied with s. 239.2(3). The process in this case was transparent, and the investigation was conducted by a lawyer.

The Guarantee Company of North America v. Ciro Excavating & Grading Ltd., 2016 ONCA 125

[Hoy A.C.J.O., Pardu and Roberts JJ.A]

Counsel:

Daniel Chitiz and Alastair McNish, for the appellant

Richard Yehia, for the respondent

Facts:

The appellant appeals the motion judge’s order granting summary judgment to the respondent in the amount of $1,170,312.47 payable under an indemnity agreement and dismissing the appellant’s cross- motion for summary judgment dismissing the respondent’s action against her. The appeal is founded largely on the refusal of Cosimo Leopizzi, who swore an affidavit attesting to the appellant’s execution of the indemnity agreement, to answer numerous questions when cross-examined. Mr. Leopizzi asserted that the questions exceeded the permissible limits of that examination.

The motion judge concluded that the appellant could not rely on the defence of non est factum, which is available to someone who, as a result of misrepresentation, has signed a document mistaken as to its nature and who has not been careless in doing so. The motion judge found that she had not shown that Mr. Leopizzi had misrepresented the indemnity agreement, nor had she ever taken steps to inform herself about what she was signing. He concluded that she was careless to the point of indifference and could not avoid being bound by the indemnity agreement.

The motion judge granted the respondent summary judgment in the amount of $1,170,312.47 payable under the indemnity agreement (the appellant did not dispute that the respondent had paid this amount) and dismissed the appellant’s cross-motion for summary judgment.

Issues:

The appellant submits that the motion judge erred:

(1) in finding that the appellant did not attempt to bring a refusals motion;

(2) in refusing to draw an adverse inference as to Mr. Leopizzi’s credibility as a result of these refusals;

(3) in failing to direct a hearing with oral evidence if he were not prepared to draw an adverse inference as to Mr. Leopizzi’s credibility as a result of the refusals; and

(4) in concluding that the appellant’s defence of non est factum could not succeed.

Holding: Appeal Dismissed.

Reasoning:

(1) The court was not persuaded that the motion judge’s statement that, if the refusals were so important, the appellant should have brought a refusals motion, but did not do so, amounts to a palpable and overriding error. There was also no evidence to support the appellant’s allegation that she did not sign the indemnity agreement.

(2) The court agreed that in light of all the evidence before him, the motion judge came to a reasonable conclusion. The motion judge analyzed Mr. Leopizzi’s refusals and noted that “there were no refusals when he was asked specific questions about [the appellant] signing the [indemnity] agreement and his presence as a witness.”

(3) The court said that a party to a motion for summary judgment cannot say oral evidence is not necessary if it is successful, but is required if there is a chance that it will not be successful. In the case at bar, there is no indication that the appellant stated unequivocally that oral evidence was required on the hearing of the motion.

(4) The court held that the motion judge accurately recited the test for non est factum set out in Marvco Color Research Ltd. v. Harris: “the defence of non est factum is available to someone who, as a result of misrepresentation, has signed a document mistaken as to its nature and character and who has not been careless in doing so.” There was no evidence of any misrepresentation.

Civil Endorsements 

Baptista v. Safranko, 2016 ONCA 114

[Hoy A.C.J.O., Pardu and Roberts JJ.A.]

Counsel:

Maurizio P. Artale, for the appellant

Amandeep Sidhu, for the respondent

Keywords: Endorsement, Default Judgment, Setting Aside, Air of Reality Test, Appeal Dismissed

Elmgreen v. Evans, 2016 ONCA 124

[Hoy A.C.J.O., Pardu and Roberts JJ.A.]

Counsel:

Jens Peter Elmgreen, appearing via teleconference

Richard W. Greene, for J. William Evans

James R. Webster, for Constance Marie Georgette Larouche Elmgreen

Keywords: Endorsement, Motion, Family Law, Spousal Support, Perfecting Appeal, Adjournment

Building Solutions International Inc. v. Benazzi, 2016 ONCA 112

[Simmons, Pepall and van Rensburg JJ.A.]

Counsel: 

Douglas Christie, for the appellants

Jordan D. Sobel for the respondents William Benazzi and WB Capital Management Inc.

Tim Gleason and Chris Donovan, for the respondents Derek Sorrenti and Sorrenti Law Professional Corporation

Keywords: Appeal Book Endorsement, Interlocutory Order, Jurisdiction, Appeal Dismissed


Ontario Review Board Decisions

Jaeger (Re), 2016 ONCA 111

[Gillese, Watt and Tulloch JJ.A.]

Counsel:

Jill Presser and Jeff Marshman, for the appellant

Michael Fawcett, for the Crown

Janice Blackburn, for the Person in Charge of Waypoint Centre for Mental Health Care

Keywords: Ontario Review Board, Treatment Impasse, Hearsay, Appeal Dismissed

Benjamin (Re), 2016 ONCA 118

[Watt, Lauwers and Hourigan JJ.A.]

Counsel:

R. Michael Rodé, for the appellant Coleby Benjamin

Hannah Freeman, for the respondent, Attorney General

Janice Blackburn, for the respondent, person in charge, Waypoint Centre for Mental Health Care

Keywords: Ontario Review Board, Disposition, Appeal Dismissed

Klem (Re), 2016 ONCA 119

[Watt, Lauwers and Hourigan JJ.A.]

Counsel:

Suzan E. Fraser and Sarah Harland-Logan, for the appellant

Dena Bonnet, for the respondent, Attorney General

Keywords: Ontario Review Board, Disposition, Appeal Dismissed

Criminal Decisions 

R. v. Labelle, 2016 ONCA 110

[Watt, Lauwers and Hourigan JJ.A.]

Counsel:

Michael Davies and Meaghan McMahon, for the appellant

Brian G. Puddington and Zoe Oxaal, for the respondent

Keywords: Criminal Law, Arrest, Reasonable and Probable Grounds, Leave to Appeal Probation Order

R. v. Singh, 2016 ONCA 108

[Gillese, Watt and Pardu JJ.A.]

Counsel:

John McInnes, for the appellant

Jesse Razaqpur, for the respondent Jaswinder Singh

Robert Lepore, for the respondent Asogian Gunalingam

Andrea Danon and J. Stanley Jenkins, for the intervener Legal Aid Ontario

Louis P. Strezos, for the intervener Criminal Lawyers Association

Keywords: Criminal Law, Disclosure, Mistrial, Costs, Appeal Allowed

R. v. Kamermans, 2016 ONCA 117

[Gillese, Watt and Tulloch JJ.A.]

Counsel:

Paul Lewin, for the appellants

John Patton, for the respondent

Keywords: Criminal Law, Forgery, Certiorari, Discharge, Preliminary Inquiry

R. v. DiBenedetto, 2016 ONCA 116

[Gillese, Watt and Tulloch JJ.A.]

Counsel:

Howard Piafsky, for the appellant

Mark Evans and Jeffrey Root, for the respondent

Keywords: Criminal Law, Drug Trafficking, Range of Sentence, Departure, Appeal Allowed

R. v. Edgar, 2016 ONCA 120

[Feldman, Cronk and Roberts JJ.A.]

Counsel:

Constance Baran-Gerez, for the appellant

Andreea Baiasu, for the respondent

Keywords: Criminal Law, Sexual Assault, Sentencing, Appeal Dismissed

R. v. Jackman, 2016 ONCA 121

[Hoy A.C.J.O., Laskin and Roberts JJ.A.]

Counsel:

Charles Granek, for the appellant

Ian Bell, for the respondent

Keywords: Criminal Law, Importing Cocaine, Sentencing, Appeal Dismissed

R. v. Argent, 2016 ONCA 129

[MacPherson, Tulloch and Benotto JJ.A.]

Counsel:

Daryl Argent, in person

Michael Dineen, duty counsel

Joanne Stuart, for the respondent

Keywords: Criminal Law, Luring a Child into Sexual Activity, Entrapment, Appeal Dismissed

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.

Hello All,

Topics covered by the Court of Appeal this week in its civil decisions included franchise law (duty of disclosure), employment law (WSIB and wrongful dismissal of dependent contractors), insolvency (statutory privilege of documents), debtor-creditor (capacity to execute guarantees), MVA (liability of automobile lessors), family law (property claims of unmarried common law spouses), contracts (interpretation and specific performance), and motions to strike for no reasonable cause of action (a claim by a lawyer against the Law Society and a securities class action).

Enjoy your weekend.

John Polyzogopoulos

Blaney McMurtry LLP
JPolyzogopoulos@blaney.com
Tel: 416.593.2953
http://www.blaney.com/lawyers/john-polyzogopoulos

Table of Contents

Civil Decisions

Fleming v. Massey, 2016 ONCA 70

Keywords: Employment Law, Insurance, Workers’ Compensation, Workplace Safety and Insurance Act, Definition of Employee, Waiver of Statutory Rights, Enforceability, Public Policy

U.S. Steel Canada Inc. (Re), 2016 ONCA 68

Keywords: Bankruptcy and Insolvency, Companies’ Creditors Arrangement Act, Investment Canada Act, s.36, s.36(4)(b), s.36(5), Statutory Privilege, Settlement Privilege

2256306 Ontario Inc. v. Dakin News Systems Inc., 2016 ONCA 74

Keywords: Contract Law, Franchise Agreements, Rescission, Arthur Wishart Act, Summary Judgment, Procedural Fairness, Right to be Heard

Conway v. The Law Society of Upper Canada, 2016 ONCA 72

Keywords:   Torts, Misfeasance in Public Office, Regulation of Professions, Lawyers, Civil Procedure, Motion to Strike, No Reasonable Cause of Action, Leave to Amend, Plain and Obvious Test

Keenan v. Canac Kitchens Ltd., 2016 ONCA 79

Keywords: Employment Law, Reasonable Notice of Termination, Dependent vs. Independent Contractors, Exclusivity of Work, Lowndes v. Summit Ford Sales

Royal Bank of Canada v. FTVRB2 Inc., 2016 ONCA 73

Keywords: Debtor-Creditor, Guarantees, Capacity, Non-Est Factum, Summary Judgement, Onus of Proof

Graham v. Lemay, 2016 ONCA 55

Keywords:   Torts, Negligence, Motor Vehicle Accidents, Negligent Entrustment, Duty of Care, Proximity, Highway Traffic Act, s.192(2),  Insurance Law, Ownership of Motor Vehicle, Lessor, Insurance Act, s. 267.12(1), Unnamed Insured, Summary Judgment

Junker v. Hughes, 2016 ONCA 81

Keywords: Family Law, Common Law Spouses, Property, Constructive Trusts, Joint Family Venture, Kerr v. Baranow, Evidence, Financial Disclosure, Retroactive Child Support, Res Judicata

Farkas v. Bedic, 2016 ONCA 82

Keywords: Family Law, Common Law Spouses, Property, Resulting Trusts, Pecore v Pecore, Constructive Trusts, Kerr v Baranow, Joint Family Venture

Flintoff v. Crown William Mining Corporation, 2016 ONCA 86

Keywords: Contract Law, Contract Interpretation, Standard of Review, Palpable and Overriding Error, Sattva

Locking v. McCowan, 2016 ONCA 88

Keywords: Securities Law, Class Actions, Investment Losses, Breach of Trust, Breach of Fiduciary Duty, Knowing Assistance, Civil Procedure, Class Proceedings Act s.5(1)(a), Motion to Strike, No Reasonable Cause of Action

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Civil Decisions

Fleming v. Massey, 2016 ONCA 70

[Feldman, Juriansz and Brown JJ.A.]

Counsel:

Paul J. Pape and Joanna Nairn, for the appellant

Susan Guzzo and Katarina Germani, for the respondents

Facts:       

The respondents Lombardy Karting and the National Capital Kart Club held a go cart event.  The race required a race director, the appellant Derek Fleming filled the position.  Mr. Massey was driving a go kart and crashed into some hay, leaving Mr. Fleming injured. The respondents argued that Fleming had signed a waiver releasing the respondents from liability for all damages associated with participation in the event.

The appellant main submission is that the waiver was void because it violated public policy, as the appellant was an employee.  The motion judge ruled that the appellant was not an employee, more of a volunteer and that he should have had an idea of what he was signing when he signed the waiver.

Issue:

Did the motion judge err in finding that the appellant was not an employee? Did the motion judge err in finding that the appellant understood the effect of the waiver when he signed it?

Holding: Appeal Allowed.

Reasoning:

The court agreed with the appellant that the motion judge erred in finding that the appellant was not an employee.  On discovery, the representative from National Capital Kart Club admitted that the appellant was an employee on the day of the accident.

The court had to consider whether the waiver signed by the appellant was void by the public policy of the Workplace Safety and Insurance Act because he signed it as an employee.  The court relied on the decision in Ontario (Human Rights Commission) v. Etobicoke that said “an agreement between an employer and employee whereby the latter agrees to waive a statutory duty imposed on the former in the interests of safety is generally not binding on the employee”. The Act provides workers with certain statutory rights of action for damages that abrogate some of the common law doctrines that restricted a worker’s right to recover.  Section16 in the Act did address the subject of waivers.  Section16 states “An agreement between a worker and his or her employer to waive or to forego any benefit to which the worker or his or her survivors are or may become entitled under the insurance plan is void.” After reading the WSIA as a whole, it was apparent its objective is to ensure injured workers have access to compensation.

U.S. Steel Canada Inc. (Re), 2016 ONCA 68

[Hoy A.C.J.O., Blair and Lauwers JJ.A.]

Counsel:

Andrew Hatnay and Adrian Scotchmer, for the appellants Non-USW Active Salaried Employees and Non-USW Salaried Retirees

Kristian Borg-Olivier, for the appellants USW and USW Local 1005

Michael Kovacevic, for the appellant City of Hamilton

Michael E. Barrack and John Mather, for the respondent United States Steel Corporation

Sharon Kour, for the respondent U.S. Steel Canada Inc.

John L. Syme, Joseph Cheng and Jacqueline Dais-Visca, for the respondent Attorney General of Canada

Jonathan G. Bell, for the respondent Ernst & Young Inc. (the Monitor)

Peter D. Ruby, for the Superintendent of Financial Services (Ontario)

Facts:

This appeal concerned the scope of privilege in section 36 of the Investment Canada Act (“ICA”) with respect to information obtained by a Minister or an officer or employee of Her Majesty in the course of the administration and enforcement of the ICA.

U.S. Steel Canada Inc. (“USSC”) was subject to protection under the Companies’ Creditors Arrangement Act (the “CCAA”). Certain CCAA stakeholders brought a motion for disclosure of the contents of a settlement agreement arrived at during litigation to enforce the ICA (the “Settlement Agreement”). The Settlement Agreement was entered into by USSC, its American parent, United States Steel Corporation (“USS”), and the Attorney General of Canada (“AGC”).

The CCAA judge considered whether section 36 of the ICA barred this disclosure and concluded that the Settlement Agreement was privileged in its entirety under that section of the ICA. Thus, he did not consider whether the Settlement Agreement was protected by common law settlement privilege. He dismissed the motion of four key stakeholders seeking production of the Settlement Agreement, who now appeal the dismissal of their motion.

Issues:

(1) Does section 36 of the ICA prohibit USSC/USS from disclosing the Settlement Agreement?

(2) Does the common law protect the Settlement Agreement from disclosure on the grounds of privilege?

Holding:

(1) No – Appeal Allowed

(2) Issue remitted to the CCAA judge.

Reasoning:

(1) No.  Initially, the court considered whether the CCAA judge erred in concluding that “information” in section 36 of the ICA includes “undertakings” given in enforcement proceedings. The court rejected the appellants’ submission that the undertakings in the Settlement Agreement were not privileged under section 36 of the ICA. Instead, the court agreed with the CCAA judge’s conclusion that Parliament intended “information” to include undertakings set out in a document given to the Minister. Similarly, the CCAA judge correctly found that “written undertaking” in section 36(4)(b) defines the location of the privileged information and does not define the scope of “information” for the purposes of section 36. This section thus does not make it clear that undertakings are not information for the purposes of section 36.

Nonetheless, the exception to the privilege regime in section 36(4)(b) applied to USSC and USS such that they were not prohibited from disclosing the Settlement Agreement. “Written undertaking” in s. 36(4)(b) meant the Settlement Agreement. Notably, the court rejected USS’s arguments that case law supported its position that s. 36(5) also excepted the supplier of the information, and that restricting s. 36(5) to the persons specifically named therein rendered the section meaningless.

(2) Not decided.  The Court noted that promoting settlement contributes to the effective administration of justice and that, while settlement privilege creates a presumption of inadmissibility with respect to settlement negotiations, exceptions are found “when the justice of the case requires it”. The party seeking to override the settlement privilege must show that there is a competing public interest that outweighs the public interest in securing settlement.

The appellants argued that they demonstrated a competing public interest in favour of disclosure that outweighed the public interest in encouraging settlement, whereas the respondents submitted that the court should return the issue of whether production of the Settlement Agreement and its contents is barred by common law settlement privilege back to the CCAA judge for determination. The court reasoned that because neither it nor the CCAA judge was provided a copy of the Settlement Agreement, there was no review or evaluation as to whether there was a competing public interest in disclosure that outweighed the public interest in settlement. Thus, the issue of settlement privilege was remitted to the CCAA judge for determination.

2256306 Ontario Inc. v. Dakin News Systems Inc., 2016 ONCA 74

[Weiler, LaForme and Huscroft JJ.A.]

Counsel:

Harjaap Mann, for the appellants

Michael Fleischmann, for the respondents

Facts:

The respondents purchased a news kiosk, International News, from a franchisee of the appellants in February 2011. The appellants advised the parties that there would be a $10,000 transfer fee before consenting to the sale but the parties went ahead with the sale regardless and the respondents paid royalties to the appellants and took over the kiosk. The respondents operated without interruption but did not enter into a franchise agreement with the appellants until October, 2012.

In August, 2013, the respondents tried to rescind the franchise agreement because of the appellants’ alleged failure to provide disclosure as required under the Arthur Wishart Act. The appellants argued they were exempt from disclosure and both parties brought a motion for summary judgment. The motion judge found that the exemption provisions under the Act did not apply because the franchise agreement executed by the respondents was a new agreement between different parties, so the obligation to disclose arose at the time that the new agreement was executed.

Issue:

Were the appellants denied a fair hearing by the motion judge because they were not heard on the respondents’ cross-motion?

Holding: Appeal dismissed.

Reasoning:

No. The court acknowledged that the motion judge’s remarks did create an expectation that there would be further argument on the respondents’ cross-motion if the appellants were unsuccessful on their motion for summary judgment. However, the issues on the motion and cross-motion were intrinsically connected and all of the relevant material was before the court when the appellants’ motion was argued.

The motion judge’s findings of fact were supported by the record and there was no basis for the court to interfere with them. In the circumstances, summary judgment in favour of the respondents was inevitable. As a result, the motion judge’s decision to deal with both the motion and cross-motion without further argument did not result in any prejudice to the appellants.

Conway v. The Law Society of Upper Canada, 2016 ONCA 72

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

Counsel:

David Robert Conway, in person

Brendan van Niejenhuis, for the respondent

Facts:

The appellant appealed from the dismissal of his action against the The Law Society of Upper Canada (“the LSUC”) following a motion to strike the appellant’s statement of claim as disclosing no reasonable cause of action and as being frivolous, vexatious and an abuse of process. The appellant’s dispute with the LSUC has a long history stretching back to his first administrative suspension in June 2000 for his failure to pay transaction levies, and involves a myriad of different civil, disciplinary and bankruptcy proceedings that form the basis for his claims against the LSUC. The appellant settled the civil and trustee proceedings with the LSUC and entered into releases and consent judgments. In the present action, the appellant complains that he has been the subject of relentless and inequitable targeting, abuse of process and denial of due process by the LSUC in numerous proceedings.

Issues:

(1) Did the motion judge err in striking out the appellant’s statement of claim in its entirety?

(2) Did the motion judge err in determining that the appellant should not be granted leave to amend his statement of claim?

Holding: Appeal allowed to grant the appellant leave to serve and file, within 60 days, a fresh as amended statement of claim to plead with proper particulars a tenable cause of action against the LSUC based on the tort of misfeasance in public office arising out of its alleged bad faith conduct in relation to the appellant. Otherwise, the appeal is dismissed.

Reasoning:

(1) No, the motion judge did not err as his reasoning and conclusions that the various individual acts by the LSUC were incapable of giving rise individually to any viable cause of action in the manner as pleaded by the appellant. The motion judge correctly struck out the factual claims as scandalous, frivolous and vexatious.  The claims against the LSUC in relation to the civil and trustee proceedings that the appellant was seeking to re-litigate in the present action were also correctly struck out as an abuse of process.

(2) Yes, the appellant should have been granted leave to properly plead the tort of misfeasance in public office. Taking all of the appellant’s factual allegations as true, and reading the essence of his pleading as a claim for misfeasance in public office, it was not plain and obvious that a proper pleading of a reasonable cause of action founded on the alleged bad faith conduct against the LSUC would fail. However, the appellant’s current pleading was woefully deficient. The appellant did not plead any of the requisite elements of any viable cause of action based on alleged bad faith conduct that may deprive the LSUC of its statutory immunity, nor with any precision the particulars that support these allegations, as required under the Rules of Civil Procedure. The LSUC is entitled to know with particularity the case that it has to meet.

Keenan v. Canac Kitchens Ltd., 2016 ONCA 79

[Gillese, MacFarland and van Rensburg JJ.A.]

Counsel:

Paul Boshyk, for the appellant

Bram A. Lecker and Matthew A. Fisher, for the respondents

Facts:

Lawrence Keenan began working for Canac Kitchens Ltd., a division of Kohler Canada Co., in 1976. Canac was a manufacturer and distributor of kitchen cabinets.  For the first six years of his employment he worked as an installer of kitchen cabinets, and in 1983, he became a foreman for the company.  His wife began to work for the company in 1983 as a foreman as well.

The Keenan’s relationship with Canac ended in 2009.  Canac was closing its operations and no longer needed their services.  Canac gave the Keenans no notice, no payment in lieu of notice and none of the statutory entitlements.

Canac claimed that the Keenans were independent contractors, thus they were not entitled to any of the statutory entitlements upon termination.  Each of them had worked for the company for a few years before being told in 1987 that they would carry on their work as contractors.

Shortly after 1987, Canac presented the Keenans with a draft agreement, which reflected the new arrangements whereby they became sub-contractors of Canac. Only Mrs. Keenan signed. Upon their termination, the Keenans brought an action against Canac.

At trial, the judge found that the Keenans were in fact economically dependent on Canac due to the fact that they worked exclusively for Canac.  Having found that they were dependent contractors, they were entitled to reasonable notice on termination.  Canac appealed the decision.

Issues:

Did the trial judge err in:

(1) finding that the Keenans were dependent – rather than independent –

contractors; and

(2) awarding the Keenans 26 months of notice.

Holding: Appeal Dismissed.

Reasoning:

(1) The court held that the trial judge’s decision was correct with regards to this submission. A determination of exclusivity must take into account a full history of the relationship. The court ruled that due to the fact that the Keenans worked exclusively with Canac, the trial judge’s finding that the Keenans were dependent was appropriate.

(2) The court made it clear that in reliance on the decision of Lowndes v. Summit Ford Sales, reasonable notice is case specific and only exceptional circumstances will support a notice period in excess of 24 months. The court held that given the Keenans’ age and length of service, and the character of the positions they held, it would not interfere with the award of 26 months.

Royal Bank of Canada v. FTVRB2 Inc., 2016 ONCA 73

[Gillese, MacFarland and van Rensburg JJ.A.]

 Counsel:

Joseph Kary, for the appellant, Janice Oliver Goldman

Rachel Moses, for the respondent RBC

 Facts:

The appellant, Ms. Goldman, appealed the motion judge’s decision to grant summary judgment in favour of the respondent, RBC, on the basis of certain guarantees signed by the Ms. Goldman. There was no issue that Ms. Goldman signed the guarantees nor was there any question that the loans which are the subject of the guarantees are in default.

The issue relates to Ms. Goldman’s capacity to enter into the guarantees, which was first raised in November, 2013 on a receivership motion by RBC in relation to the three companies and the debts that underlie the guarantees that are the subject of the appeal. The motion judge held that no material was filed on the issue of capacity. The issue was raised again in July, 2013 where it was noted in the motion judge’s decision that no steps had been taken to determine the issue of capacity. The motion for summary judgment was heard on May 15, 2015, at which time Ms. Goldman’s lawyer sought an adjournment on the basis his client lacked capacity. The adjournment was not granted and the motion judge proceeded to hear the motion.

Issues:

(1)  Did the motion judge err in proceeding with RBC’s motion for summary judgment in the face of “clear” evidence that Ms. Goldman lacked capacity?

(2) Did using the loan money for a purpose other than the purpose for which it was advanced constitute a material change that released Ms. Goldman from the guarantees?

 Holding: Appeal dismissed.

Reasoning:

(1) No. Ms. Goldman’s lawyer filed two affidavits having to do with his client’s capacity. An affidavit from Ms. Goldman’s son that offered hearsay evidence that his mother has been diagnosed with dementia and early stage Alzheimer’s. He also offered his own observations of his mother’s conduct and attached medical records and a letter from a physician. Nothing in the letter said anything about lack of capacity. The second affidavit was from a former co-worker of Ms. Goldman who spoke to her forgetfulness.  However, she was not qualified to make a diagnosis of lack of capacity.

The onus is on anyone alleging lack of capacity to prove it. There was no evidence before the motion judge to support a finding that Ms. Goldman lacked capacity.

(2) No. The court did not accept Ms. Goldman’s argument that because the corporation used the loan money advanced by RBC for a reason other than for which it was advanced, that this constituted a material change to the loan arrangement that would, absent Ms. Goldman’s consent, release her from the guarantees.

The evidence showed that RBC advanced the loan money as it was directed by the principal of the three companies, Ms. Godman’s son. This was a “continuing all accounts” guarantee for which the purpose is to allow the customer and the lender to change their business arrangements without having to involve the guarantor.

The motion judge correctly found that non est factum did not apply on the basis that Ms. Goldman was an intelligent woman who had previously guaranteed her son’s companies’ loan arrangements and was given the opportunity to solicit independent legal advice. There was no basis on the evidence that Ms. Goldman was unduly influenced. Finally, in response to the argument that because RBC did not fully advance the loan monies, Ms. Goldman was not obligated to RBC, there was no requirement that the monies be fully advanced before she became obligated to RBC. This was an all accounts continuing guarantee.

Graham v. Lemay, 2016 ONCA 55

[Gillese, Pepall and Lauwers JJ.A.]

Counsel:

William J. Sammon, for the appellants/respondents by way of cross-appeal

David A. Zuber, for the respondents Daimler Chrysler Financial Services Canada Inc. and CorePointe Insurance Company

W.S. Chalmers, for the respondent/appellant by way of cross-appeal, Chrysler Canada Inc.

Facts:

The appellant Jodi Graham (“Jodi”) was a passenger in a motor vehicle and suffered serious injuries as a result of a collision with a motor vehicle driven by Mario Pietrantonio (“Pietrantonio”). The Pietrantonio vehicle had been leased. In the lease, Daimler Financial Services Canada Inc. (“Daimler Financial”) was described as the lessor. At the time of the accident, Chrysler Canada Inc. (“Chrysler”) was the beneficial owner of the Pietrantonio vehicle.

Pietrantonio was a co-owner along with his father Luciano (“Luciano”) of West End Tile Limited (“West End”). The lessees of the Pietrantonio vehicle, West End and Luciano, carried $2 million in third-party liability insurance. West End and Luciano leased the Dodge Durango vehicle pursuant to a lease with Daimler Financial, who was the registered owner of the Pietrantonio vehicle. Daimler Financial carried a standard lessors’ contingent automobile policy of insurance and a standard excess insurance policy that provided $10 million of coverage. The policies were issued by the respondent CorePointe Insurance Company. Both policies stated that coverage extended only to the named insured, Daimler Financial, and excluded coverage for any lessee or employee of a lessee. Furthermore, coverage was available only if the lessee’s insurance was not collectible.  According to the appellants, Jodi’s damages will significantly exceed the limits of the third-party liability insurance carried on the two vehicles.

The appellants commenced an action against various parties, including Daimler Financial and Chrysler, both of whom were respondents on the appeal.  Both the respondents and the appellants moved for summary judgment. On the motion for summary judgment, the judge granted two orders. The first order  provided that Chrysler was an owner of the vehicle driven by Mario within the meaning of s.192(2) of the Highway Traffic Act, and that Chrysler and Daimler Financial were lessors within the meaning of s. 267.12(1) of the Insurance Act and as such were entitled to a cap on liability. The appellants’ claims of negligent entrustment against Daimler Financial and another defendant, Capital Dodge, were dismissed. The second order was on consent, and provided that the appellants’ motion for summary judgment and a declaration that Mario was an unnamed insured entitled to coverage under Daimler Financial’s standard excess policy was dismissed. However, the appellants’ consent was without prejudice to the appellants’ right to appeal the consent dismissal on the basis that the decision in Xu v. Mitsui Sumitomo Insurance Company Limited (“Xu”) was wrongly decided or, in the alternative, did not apply to Daimler Financial if it was found not to be a lessor within the meaning of s. 267.12(1) of the Insurance Act.

Issues:

(1) Was Chrysler correctly found to be an owner and vicariously liable for Mario’s alleged negligence pursuant to s. 192(2) of the Highway Traffic Act?

(2) Are Chrysler and Daimler Financial lessors within the meaning of s. 267.12(1) of the Insurance Act and entitled to the benefit of the cap on liability?

(3) Is Mario an unnamed insured under Daimler Financial’s standard excess policy?

(4) Was the claim of negligent entrustment against Daimler Financial properly dismissed?

Holding: Appeal and cross-appeal dismissed.

Reasoning:

(1) Yes. The motions judge did not err in concluding that Chrysler was an owner for the purposes of s. 192(2) of the Highway Traffic Act. Chrysler admitted that it was the non-registered owner of the Pietrantonio vehicle. Moreover, its conduct was consistent with that admission in that it had claimed significant tax deductions in its capacity as owner. The agreements between Daimler Financial and Chrysler explicitly stated that Chrysler was the beneficial owner.

(2) Yes. The language of s. 267.12(1) of the Insurance Act, its legislative purpose, and the agreements between Chrysler and Daimler Financial all supported the motion judge’s conclusion that Chrysler was a lessor within the meaning of that subsection and was therefore entitled to the cap on liability. Daimler Financial retained legal title to the Pietrantonio vehicle. Furthermore, by virtue of the assignment to Daimler Financial from Capital Dodge, the lease itself described Daimler Financial as lessor. The appellants failed to identify any error in the motion judge’s analysis on the application of s. 267.12(1) to Daimler Financial.

(3) No. Xu is dispositive of this issue. In Xu, the motion judge accurately considered the legislative history and purpose of s. 267.12(1). He correctly concluded that permitting a lessee to access a lessor’s insurance, as an unnamed insured, would undermine the animating purpose of that provision. That analysis was upheld by the Court of Appeal. The appellants in this case did not present any cogent reasons for revisiting that conclusion. The Court of Appeal will not overturn one of its prior decisions unless sitting as a five-judge panel. In this case, the appellants’ request for a five-judge panel on the basis that Xu was wrongly decided was refused. The three-judge panel on the current appeal could request that an appeal be assigned to a five-judge panel if convinced that an arguable case can be made for reviewing or overruling the prior decision at issue. However, all of the appellants’ arguments for reviewing Xu were rejected.

(4) Yes, the claim of negligent entrustment was properly dismissed. The vehicle was leased not to Mario but to West End and Luciano. The motions judge concluded that a duty on Daimler Financial to ascertain the competency of the driver of the vehicle was too remote. It was reasonable for the lessors to rely on the insurance that had been obtained by the lessees. On this basis, the motion judge correctly concluded that there was no genuine issue requiring a trial on the issue of negligent entrustment.  As noted by the motions judge, in the present case, Daimler Financial leased the Pietrantonio vehicle to Luciano and West End. Finding a duty of care in the present case would lead to the conclusion that the lessor had an obligation to inquire into who would be driving it. The relationship between the appellants and Daimler Financial does not disclose proximity sufficient to justify imposing a duty.

Junker v. Hughes, 2016 ONCA 81

[Gillese, MacFarland and van Rensburg JJ.A.]

Counsel:

Michelle Kropp (agent for Tony Sferruzzi, lawyer on record) and Kenneth Peacocke, for the appellant

Joseph A. Irvine, for the respondent

Facts:

The appellant, Ms. Hughes and the respondent, Mr. Junker separated in 2007 after a seven year relationship. The parties were never married.  A trial was held in 2015 on two unresolved issues: Mr. Junker’s constructive trust claim against the proceeds of sale of Ms. Hughes’ house that they lived in together during the relationship, and her claim for retroactive child support.

Issues:

(1) Did the trial judge err in her finding Mr. Junker had overpaid his child support?

(2) Did the trial judge err in awarding Mr. Junker damages for a constructive trust claim against Ms. Hughes’ property?

Holding: Appeal dismissed.

Reasoning:

(1) No. Ms. Hughes position was that the trial judge had erred in ruling that Mr. Junker had overpaid his child support and dismissing her claim for retroactive child support.  She argued that entries on bank records produced by Mr. Junker corresponded to payments for his other children’s expenses and that the trial judge should have credited these to her and Mr. Junker’s child.

During oral argument, it emerged that Ms. Hughes’ real issue was that Mr. Junker may have attempted to recover the overpayment from her, or credited amounts against his future child support payments.  This claim was not made at trial and based on comments of the trial judge, the court held that the issue of overpayment and its possible effects are res judicata.

(2) No.  The house in question was purchased by Ms. Hughes in 2000 and the parties lived there until they separated in 2007.  She made the down payment, monthly mortgage payments and the title was taken in her name.  The house was sold in 2010 for substantially above the purchase price.

Mr. Junker is a contractor and argued that he made improvements to the house during the time he lived there.  He also stated that he made financial contributions to household bills and the mortgage payments.  He paid rent from 2005 onward after he had paid back a significant loan that Ms. Hughes had made to him.

The trial judge found that Mr. Junker had proven his claim for unjust enrichment.  Ms. Hughes was enriched by the increase in value of the property.  The corresponding deprivation was Mr. Junker’s compensation for his contributions made for the collective benefit of the family and that there was no juristic reason for this.  The trial judge found that the parties were involved in a joint family enterprise and awarded Mr. Junker an amount in damages.

Ms. Hughes’ argued that there was no evidence of deprivation or a joint family venture. These arguments all challenged the trial judge’s findings of fact.  While the record was not ideal, the trial judge was in the best position to determine if the trial should proceed without further financial disclosure.  The trial judge was entitled to assess the claim on the basis of the parties’ testimony and limited records.

Even though the trial judge did not consider the evidence under the various headings in Kerr v. Baranow used to determine the existence of a joint family venture, she did consider all of the appropriate factors.  As well, the trial judge did not err in awarding Mr. Junker the lesser of one half of the net proceeds from the sale of house after repayment to the Ms. Hughes of her down payment, and the amount of Mr. Junker’s claimed contributions.  While it would have preferable for the trial judge to have specifically addressed the proportionate contribution Mr. Junker made to the joint family venture, it was implicit in her decision that the parties had contributed equally to the increase in the value of the house.

Farkas v. Bedic, 2016 ONCA 82

[Laskin, Pardu and Brown JJ.A.]

Counsel:

Paul D. Amey, for the appellant

Julie K. Hannaford and D. Clarke, for the respondent

Facts:

The appellant, Bedic and the respondent, Farkas, began dating in 1994, began living together in 1997 and cohabited for 13 and a half years before separating in 2011. During the course of their relationship, they acquired and maintained several hotel and cottage properties. Each party contributed financially and by physical labour to the properties.

When the relationship ended, Farkas sought a 50 percent interest in the properties or in the proceeds from their sale. At trial, the judge found in her favour, holding that many of the key facts were not disputed, and finding in favour of Farkas where the evidence of each party differed. Bedic appealed, challenging the trial judge’s findings on two of the properties: the Queensway Motel and the Fairview Motel.

Issues:

(1) Did the trial judge err in finding that Farkas had a 50 percent beneficial interest in the Queensway Motel?

(2) Did the trial judge err in finding that Bedic holds title to the Fairview Motel in trust for himself and Farkas equally?

(3) Did the trial judge err in finding that Bedic had failed to account for money he withdrew from the parties’ joint account?

Holding: Appeal dismissed.

Reasoning:

(1) No. The court did not agree that Farkas’ 50 percent interest should revert to Bedic by a resulting trust. Although Bedic referred to an agreement for Farkas’ $125,000 contribution into the Queensway Motel, whereby he would repay the loan and Farkas would repay her half interest in the property to him, at trial this agreement was not relied on. The court agreed that the parties had not relied on this agreement nor did their actions demonstrate a reliance on the agreement when the property was sold in 2006. Bedic did not offer to pay Farkas $125,000 and Farkas did not ask for the money back.   Further, the court found the facts did not support the existence of a resulting trust because here, Farkas provided value in exchange for the equity interest in Queensway transferred to her. Lastly, Bedic’s conduct did not demonstrate an intention to create a resulting trust per Pecore v Pecore. The court found he treated the equity from the sale of the motel as belonging beneficially to both him and Farkas.

In addition, the court found the facts reasonably supported the trial judge’s finding that Bedic and Farkas contributed more or less equal amounts of capital to the Queensway Motel.

(2) No. The court agreed with the trial judge’s finding of a joint family venture in connection with the Fairview Motel. The court found that to remedy what would otherwise be Bedic’s unjust enrichment, the trial judge effectively found that Farkas had a beneficial 50 percent interest in the Fairview Motel by way of a constructive trust, which was reasonably supported by the evidence. As constructive trustee, Bedic was obligated to convey that 50 percent interest to Farkas or pay her one half the value of Fairview. The court reiterated the test from Kerr v Baranow, stating that even though the trial judge did not expressly review the evidence under the factors cited in Kerr v Baranow, the evidence and his findings show a joint family venture between Bedic and Farkas.

Per Kerr v Baranow, the court also found that the evidence supported a link between Farkas’ contribution to her partnership with Bedic and their accumulation of wealth. Further, the evidence supported the trial judge’s finding that each party’s proportionate share in the Fairview Motel should be equal and the court found no reason to interfere with the remedy ordered.

(3) No. The court rejected Bedic’s submissions that the parties’ banking records show the money he took was properly accounted for. The money in question represented part of the net proceeds of sale from the Queensway Motel. The court did not find it within their task to redo the trial judge’s forensic accounting as he had the evidence to support his finding and his order. The trial judge’s finding was not unreasonable and the court found no reason to interfere with his order.

Flintoff v. Crown William Mining Corporation, 2016 ONCA 86

[Pepall, Pardu and Roberts JJ.A.]

Counsel:

Douglas D. Langley, for the appellants

David Milosevic, for the respondents

Facts: The plaintiffs/respondents were victimized by a fraudster, against whom they obtained judgment. Crown William Mining Corporation, a corporation that is controlled by the appellants, purchased the respondents’ judgments in exchange for two promissory notes and 200,000 shares of Crown William.

The purchase agreement contained a “Put-Right option” which provided that after a two-year holding period the respondents could compel the appellants to repurchase the shares from them for $3 per share, exercisable only during a one-year period commencing January 22, 2013. The respondents exercised the option but the appellants did not purchase the shares. The respondents then commenced the present action and obtained summary judgment for specific performance.

The appellants argued that the motion judge erred in granting summary judgment in favour of the respondents because the Put-Right option was a unilateral contract, one of the respondents (Ms. Rinder) had signed a release that barred her claim, and because the motion judge erred in the remedy granted.

Issues:

(1) Was the Put-Right option a unilateral or bilateral contract?

(2)  Were the respondents in substantial compliance with the notice provisions of the purchase agreement?

(3) Did the failure to provide s. 116 certificates mean that the respondents could not compel the appellants to purchase the shares?

(4) Did the release bar Ms. Rinder’s claim?

(5) Did the motion judge err in the remedy granted?

Holding: Appeal dismissed.

Reasoning:

(1) No.  The court reasoned that whether the Put-Right option was part of a unilateral agreement was a question of mixed fact and law, and the appellants did not identify any extricable legal error. Thus, in the absence of a palpable and overriding error (Sattva), the motion judge’s conclusion was owed deference: the conclusion was reasonable and supported by the evidence.

(2) Yes.  The court agreed with the motion judge that the plaintiffs/respondents substantially complied with the notice requirement as contemplated by the purchase agreement, and there was no basis to interfere with that conclusion.

(3) No.  The motion judge correctly held that this was not a precondition for the respondents to exercise the option, and thus this conclusion was also reasonable.

(4) No.  The agreement released the appellants from all claims that Ms. Rinder may have had against them as of the date of the agreement, which was dated April 19, 2011. The motion judge concluded that her claim arose after April 19, 2011 and was thus not barred. The court found that this interpretation of the release agreement was reasonable.

(5) No.  Specifically, the appellants argued that the motion judge erred by granting specific performance, when the respondents’ notice of motion only asked for summary judgment and damages. The court rejected this submission on the basis that the appellants were not prejudiced by a judgment that was within the terms of the relief claimed in the statement of claim.

Locking v. McCowan, 2016 ONCA 88

[Gillese, MacFarland and van Rensburg JJ.A.]

Counsel:

John Archibald and Paul Bates, for the appellant

Thomas Curry and Julia G. Brown, for the respondents

Facts:

The appellant is the representative plaintiff in a proposed class action by unit holders of Partners REIT, an unincorporated real estate investment trust whose units trade on the Toronto Stock Exchange. The appellant claims that the class sustained losses when the REIT’s unit price dropped because an improper property transaction had to be set aside. McCowan was the REIT’s interim CEO at the relevant time and Weinberg was one of the trustees. On April 2, 2014, the respondent Philip and her company Holyrood Holdings Limited sold three properties to the REIT at McCowan’s behest. McCowan failed to disclose that he had a longstanding, close personal and business relationship with Philip. When McCowan’s conflict of interest was exposed, the transaction was set aside and all monies paid were returned to the REIT. However, it is alleged that the fall-out caused the REIT’s unit price to drop by more than 30%. By order dated August 19, 2015, the motions judge permitted the breach of trust claim against Weinberg and the knowing assistance claim against McCowan to proceed. However, he struck the knowing assistance claim against the respondents.

Issue:

Did the motions judge err in striking the knowing assistance claim against the respondents?

Holding: Appeal allowed.

Reasoning:

Yes. The motion judge’s first error was in failing to accurately and generously construe the claim made against the respondents. He read the Amended Statement of Claim as alleging that the respondents’ only assistance or participation in the breach of trust was their suppression of information which they had no duty to disclose. On the pleadings, however, it is alleged that the respondents were active participants – playing the roles of genuinely disinterested arm’s length parties who were the sole owners of the properties – who concealed the improprieties underlying the transaction and sold those properties to the REIT.

The motion judge’s second error relates to his approach to the third element of the test for a knowing assistance claim against the respondents. In order for a knowing assistance claim to succeed, the plaintiff must establish: (i) an act of fraud or dishonesty on the part of the trustee; (ii) that the defendant had knowledge of the trustee’s dishonest conduct; and (iii) that the defendant assisted the trustee in perpetrating the dishonest conduct. The motion judge viewed this third element as requiring that the defendant take a positive step to help or to take part in the trustee’s breach of trust. However, what amounts to “assistance” has not been fully explored by the jurisprudence, and it may be that silence, in certain circumstances, is sufficient to constitute assistance. Thus, it was not plain and obvious that the knowing assistance claim against the respondents could not possibly succeed, as required by s.5(1)(a) of the Class Proceedings Act.

Civil Endorsements

Packall Packaging Inc. v. Ciszewski, 2016 ONCA 78

[Doherty, Brown and Miller JJ.A.]

Counsel:

Peter W.G. Carey, for the appellants Geoffrey D.E. Adair, Q.C., for the respondents

Keywords: Endorsement, Costs, Partial Indemnity

Sabet v. Elhalwagy, 2016 ONCA 84

[Simmons, Pepall and Pardu JJ.A.]

Counsel:

Ioulia Vinogradova, for the appellant

John O’Sullivan, for the respondent

Keywords: Costs Endorsement, Substantial Indemnity Costs, Failure to Pay Costs

Criminal Decisions

Ontario (Attorney General) v. $104,877 in U.S. Currency (In rem), 2016 ONCA 71

[Doherty, Pardu and Benotto JJ.A.]

Counsel:

Glenroy Bastien, for the appellant

Miriam Young and Anastasia Mandziuk, for the respondent

Keywords: Criminal Law, Civil Forfeiture, Civil Remedies Act, s. 3, s. 8, Proceeds from Unlawful Activity

R v. C.K.-D, 2016 ONCA 66

[Sharpe, Hourigan and Benotto JJ.A.]

Counsel:

C. K.-D., in person

Lou Strezos, duty counsel

Michael Bernstein, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Child Witness, Credibility, Sentencing

R v. Johnson, 2016 ONCA 69

[Feldman, Cronk and Roberts JJ.A.]

Counsel:

Anthony Fitzroy Johnson, appearing by video conference

Yoni Rahamim, appearing as duty counsel

Roger A. Pinnock, for the respondent

Keywords: Criminal Law, Aggravated Assault, Sentencing, Credit for Pre-Sentence Custody

R v. Mahomood, 2016 ONCA 75

[MacPherson, MacFarland and Roberts JJ.A.]

Counsel:

Najam Mahmood, acting in person

Erin Carley, for Her Majesty the Queen

Keywords: Criminal Law, Tax Evasion, Income Tax Act, Excise Tax Act, Sentencing

R v. S.C., 2016 ONCA 83

[Laskin, Hourigan and Pardu JJ.A.]

Counsel:

Mark Halfyard, for the appellant

Kevin Rawluk, for the respondent

Keywords: Criminal Law, Sexual Offences, Evidence, Credibility

R v. Hemsworth, 2016 ONCA 85

[Cronk, Epstein and Brown JJ.A.]

Counsel:

Zachary Kerbel, for the appellant

Mary Ellen Hurman, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Interference, Kienapple v R, Evidence, Credibility, Witnesses

 

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