Good afternoon everyone.

Following are this week’s summaries of civil decisions released by the Court of Appeal.  Topics covered included insurance, settlements, construction, debtor-creditor, contracts, real property, MVA and medical malpractice.

Wishing everyone a nice weekend and a Happy Easter to those of the Eastern Orthodox faith.

John Polyzogopoulos

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

 

Table of Contents:

Civil Decisions

Business Development Bank of Canada v. Aventura II Properties Inc., 2016 ONCA 300

Keywords: Debtor-Creditor, Bankruptcy and Insolvency, Receivership, Mareva Injunctions, Leave to Appeal, Bankruptcy and Insolvency Act, s.193(e), Security for Costs of Appeal, Rules of Civil Procedure, 61.06(1)(a), 40.04(1)

Seidel v. Markham (Town), 2016 ONCA 306

Keywords: Insurance, Duty to Defend, Duty to Indemnify, Settlement, Motion to Enforce, Rules of Civil Procedure, Rule 49

Spar Roofing & Metal Supplies Limited v. Glynn, 2016 ONCA 296

Keywords: Wills and Estates, Real Property, Agreement to Convey Land, Whether Enforceable, Gifts, Part Performance, Consideration, Statute of Frauds, Civil Procedure, Motion to Strike, No Reasonable Cause of Action, Leave to Amend, Rules of Civil Procedure, Rule 26.01, Power of Attorney, Estate Trustees, Passing of Accounts, Standing, Beneficiaries, Powers of Attorney Act, Substitute Decisions Act, s. 42

Hervieux v. Huronia Optical, 2016 ONCA 294

Keywords: Torts, Professional Negligence, Medical Malpractice, Expert Reports, Standard of Care, Causation, Small Claims Court, Summary Dismissal, Summary Judgment, Small Claims Court Rules, Rule 12.02, Denial of Natural Justice

Doe v. MacDonald, 2016 ONCA 319

Keywords: Solicitor and Client, Dispute Retainer Agreement, Pro Bono, Assessment of Accounts, Reasonable Apprehension of Bias

Neuberger v. York, 2016 ONCA 303

Keywords:  Civil Procedure, Costs, Reasonable Expectations

Scamurra v. Sandy Scamurra & Sons Limited, 2016 ONCA 311

Keywords:  Contracts, Breach, Share Purchase and Sale Agreements, Share Pledge Agreements, , Enforcement, Acceleration Clauses

Yorkwest Plumbing Supply Inc. v. Nortown Plumbing (1998) Ltd., 2016 ONCA 305

Keywords: Construction Law, Construction Liens, Quantum Meruit, Unjust Enrichment, Construction Lien Act, s.6, s.20(1), s.20(2), s.35, s.55, Leo P. Abrams & Sons Ltd. v. MacDonald Homes Inc. (Trustee of), Gillies Lumber v. Kubassek Holdings Ltd.

Carpenter v. Carpenter, 2016 ONCA 313

Keywords: Family Law, Extension of Time to Appeal, Rizzi v. Marvos, Self-Represented Litigants, Family Law Rules, O. Reg. 114/99

Wasinski v. Norampac Inc., 2016 ONCA 309

Keywords: Employment Law, Wrongful Dismissal, Termination for Cause, Findings of Fact, Standard of Review, Palpable and Overriding Error

Fonseca v. Hansen, 2016 ONCA 299

Keywords: Torts, Negligence, Motor Vehicle Accidents, Damages, Jury Instructions, Experts, Assignment of Collateral Benefits, Offers to Settle, Costs Consequences, Rules of Civil Procedure, Rule 49.10, Pre- and Post-Judgment Interest, Courts of Justice Act, ss. 127 and 128

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

Business Development Bank of Canada v. Aventura II Properties Inc., 2016 ONCA 300

[van Rensburg J.A. (In Chambers)]

Counsel:

Sean N. Zeitz, for Revital Druckmann and Jean-Jacques Myara

Kelli Preston, for the receiver Pollard & Associates Inc.

Catherine Francis, for DUCA Financial Services Credit Union Ltd.

Keywords: Debtor-Creditor, Bankruptcy and Insolvency, Receiverships, Mareva Injunctions, Leave to Appeal, Bankruptcy and Insolvency Act, s.193(e), Security for Costs of Appeal, Rules of Civil Procedure, 61.06(1)(a), 40.04(1)

Facts:

Pollard was the court-appointed receiver of the debtor companies. The Order at issue had extended a Mareva injunction against Revital, who was the spouse of the principal of the Debtors. The Order also directed that Pollard was entitled to immediate possession (“repatriation”) of certain monies, being the proceeds of an HST refund paid to one of the Debtors and diverted in contravention of a prior Receivership Order. The Order also dismissed a claim by Myara seeking an interest in the monies.

Revital sought leave to appeal the Order under s. 193(e) of the Bankruptcy and Insolvency Act. Revital made no claim of her own to the impugned monies and did not oppose the repatriation of the funds. Instead, she challenged the procedure followed by Pollard in obtaining, ex parte, the original interim Mareva injunction against her. Myara appealed as of right, claiming that the monies were his and thus objected to any repatriation of the funds. Pollard and the secured creditor, DUCA, each moved for security for costs of Myara’s appeal.

Issues:

(1) Should Revital be granted leave to appeal the Order pursuant to s.193(e) of the Bankruptcy and Insolvency Act?

(2) Should the Receiver and Debtor’s motions for security for costs be granted?

Holding: (1) No. (2) Yes. Motion for leave to appeal dismissed and motions for security for costs granted.

Reasoning:

(1) Leave under s.193(e) of the BIA is discretionary and the court must consider whether the proposed appeal (a) raises an issue that is of general importance to the practice in bankruptcy and insolvency matters or to the administration of justice as a whole; (b) is prima facie meritorious; and (c) would unduly hinder the progress of the bankruptcy or insolvency proceedings. The Court found that there was no arguable merit to Revital’s proposed appeal as Revital did not claim any interest in the HST Refund and did not challenge the substantive grounds on which the Mareva Order was made and extended; her concerns were strictly procedural.

Revital argued that the motions judge erred in granting the Order because (a) Pollard had not made full and frank disclosure on the original ex parte motion; (b) the court did not require an undertaking for damages from the moving party or grant an order dispensing with that requirement; and (c) the Order could not be made against her as a “third party” where there was no pending or intended proceeding against her.

The Court rejected these arguments. While Pollard was required to make full and frank disclosure of material facts, Pollard was not required to file a factum pursuant to Rule 40.04(1). The obligation on a moving party to file a factum in an injunction motion applies in contested, but not ex parte, motions. Second, the motion judge’s granting of the Mareva Order was based on the application of settled principles and entirely justified by the evidence placed before him.

Moreover, Pollard was not required to provide an undertaking as to damages as the order was made in a court-appointed receivership; Pollard had a duty to recover the property of the Debtors and the order sought was in aid of powers granted to the Receiver by court order. The motion judge was thus entitled to grant the Mareva Order without requiring an undertaking as to damages. Revital’s argument that the Mareva Order should not have been issued against her because there was no existing or proposed action in which she was a defendant was also rejected as the Order was granted on the basis of overwhelming evidence.

(2) Pollard and DUCA moved for security for costs of Myara’s appeal under r. 61.06(1)(a) and, in doing so, were required to establish that there was “good reason to believe that the appeal [was] frivolous and vexatious and that the appellant ha[d] insufficient assets in Ontario to pay the costs of the appeal.” The first part of the test involved a consideration of “[t]he apparent merits of the appeal, the presence or absence of an oblique motive for the launching of the appeal, and the appellant’s conduct in the prosecution of the appeal” as well as other factors that may be specific to the case. The latter aspect was not in dispute. The Court was satisfied that both parties were entitled to security for costs given that the appeal appeared to have little chance of success.

Seidel v. Markham (Town), 2016 ONCA 306

[Sharpe, LaForme and van Rensburg JJ.A.]

Counsel:

David G. Boghosian and Shaneka M. Taylor, for the appellant

Sean R. Chambers, for the respondent

Keywords: Insurance, Duty to Defend, Duty to Indemnify, Settlement, Motion to Enforce, Rules of Civil Procedure, Rule 49

Facts:

The appellant Town of Markham (“Markham”) and the respondent Intact Insurance Company of Canada (“Intact”), were in dispute with respect to the interpretation of what both parties referred to as an “agreement”. The plaintiff had sued for damages after alleging a slip and fall on Markham’s property that occurred on March 6, 2011. Markham had a winter maintenance contract with V.T.A. Construction Ltd (“V.T.A.”) and was named as an additional insured on VTA’s policy with Intact, as required by the contract. Markham retained counsel, Mr. Persaud, and served a statement of defence and issued a third party claim against V.T.A. and Intact. The third party claim claimed contribution and indemnity from V.T.A. and a declaration that Intact owed a duty to defend and indemnify Markham in respect of the plaintiff’s claims.

In May 2012, the plaintiff added V.T.A. as a defendant to the action and amended the statement of claim to plead that the accident occurred on March 5, 2011. In the fall of 2012 and early 2013, there were a series of communications between Mr. Persaud, Intact and Mr. Lipetz at Benson Percival Brown LLP (“BPB”), the law firm appointed to defend V.T.A. in the action, about the defence of the action and the third party claim. Mr. Persaud prepared an Assumption of Defence Agreement that specifically provided for Intact to assume Markham’s defence and to indemnify Markham in respect of any damages in the action. Mr. Lipetz advised that Intact would not be executing the agreement but that his office would serve a Notice of Change of Lawyers. Mr. Persaud replied that he did not have to sign the agreement so long as it was understood that Markham would be covered for any amounts arising from a finding of liability against it. The next day, Mr. Lipetz delivered the Notice of Change of Lawyers, with the effect that BPB represented both V.T.A. and Markham in the defence of the action. BPB was the only firm representing Markham in the proceedings for 16.5 months, including attendance at examinations for discovery.

In December 2013, BPB notified Mr. Persaud that it was bringing a motion to remove itself from the record. Six months later new counsel was appointed for V.T.A. but not Markham. Markham brought a motion under Rule 49 to enforce the “settlement agreement”. The motion judge dismissed Markham’s motion that sought to enforce Intact’s obligation to both defend and indemnify Markham in the action. He concluded that there had not been a “meeting of the minds” between the parties on the question of indemnification and that the agreement was not in clear enough terms to require Intact to indemnify Markham for any loss suffered as a result of V.T.A.’s negligence.

Issues:

(1) Did the motion judge err in concluding there was no agreement?

(2) Did the motion judge err in concluding that Intact could not have agreed to indemnify Markham for liability in the action, except as resulted from V.T.A.’s negligence?

Holding: Appeal allowed. Intact was ordered to appoint counsel to defend Markham at its expense and to indemnify Markham for any damages and costs awarded against Markham in the main action.

Reasoning:

(1) Yes. The parties both agreed that they entered into an agreement resulting in the appointment of the same counsel to represent V.T.A. and Markham in the defence of the action. The issue was not whether an agreement existed, but its interpretation.

(2) Yes. The court stated that in its third party claim, Markham claimed both a defence and indemnification from Intact. Intact could have: 1) denied both obligations, in which case Markham would have been on its own in the action; 2) resisted the claim for indemnification but accepted the obligation to defend, assuming the cost of Markham’s defence by different counsel; or 3) accepted the obligation to defend and indemnify. The first two options would recognize that Markham and V.T.A. continued to be adverse in interest in the main and third party action. The third would mean that their interests were aligned or the same.

By appointing one firm to represent both parties, and the fact that BPB represented Markham and V.T.A. in litigation until discoveries had been completed, Intact had agreed to both defend and indemnify Markham. The court found the agreement to indemnify sufficiently clear, because without such an agreement, counsel appointed by Intact to act for both V.T.A. and Markham would have been in a conflict of interest.

The court also noted that although Intact and its counsel may have failed to appreciate the significance of the change in the plaintiff’s pleading of the accident date until later, this did not permit Intact to resile from the agreement the parties had reached, after discoveries had been conducted and after BPB had acted as Markham’s counsel for more than 16 months.

Spar Roofing & Metal Supplies Limited v. Glynn, 2016 ONCA 296

[Weiler, Hourigan and Huscroft JJ.A.]

 Counsel:

Lorne S. Silver, for the appellants

David Freedman and Suzana Popovic-Montag, for the respondent

 Keywords: Wills and Estates, Real Property, Agreement to Convey Land, Whether Enforceable, Gifts, Part Performance, Consideration, Statute of Frauds, Civil Procedure, Motion to Strike, No Reasonable Cause of Action, Leave to Amend, Rules of Civil Procedure, Rule 26.01, Power of Attorney, Estate Trustees, Passing of Accounts, Standing, Beneficiaries, Powers of Attorney Act, Substitute Decisions Act, s. 42

Facts:

The appellants, Craig and Wendy Glynn allege that their parents, Edward and Wanda, promised them a piece of property (the “Property”) upon Edward’s death which occurred in February 2014. The Property serves as the main roadway access to their business, Spar Roofing & Metal Supplies Limited (“Spar Roofing”), a company founded by Edward and now operated by Craig and Wendy in which they own all of the common shares. Craig and Wendy allege that the Property would form part of the corporate assets of Spar Roofing and they seek to set aside the transfer of the Property to their brother, the respondent Grant Glynn, who now owns the property as joint tenants with his parents. Grant claims it was a gift from his parents based on wills made in 2009. He arranged for the transfer of the Property as their power of attorney for personal and property care in 2012.

The motion judge described the appellants’ pleadings as an attempt to enforce a promise made by Edward to gift the Property to Craig and Wendy in the future. He struck the appellants’ claim as disclosing no reasonable cause of action and held that the appellants lacked standing to “bring a claim to divest the defendant of his interests in the property.”

 Issues:

(1) Are the motion judge’s reasons sufficient to permit appellate review?

(2)Did the motion judge err in characterizing the claim as a being about a promise to gift the Property?

(3) Did the motion judge err in not granting leave to amend?

(4) Do the plaintiffs have standing to question the transfer of the Property to Grant on the basis of alleged undue influence and breach of fiduciary duty?

 Holding: Appeal allowed.

Reasoning:

(1) Yes. An appellate court cannot simply intervene on the basis that it feels the judge did a poor job of expressing himself. The failure to give adequate reasons is not a free-standing basis for appeal. The court agreed that the judge’s reasons were difficult to understand. However, by reading them as whole and giving them a purposeful interpretation, they show the basis for the motion judge’s decision to strike the pleading, why he refused to grant an adjournment to file a reply and how he arrived at his conclusion.

(2) No. The appellants’ argued that they plead that there was an agreement to convey property and that the judge erred in characterizing Edward’s promise as a gift. They submitted that as part performance of the agreement, this was a long-term lease with no provision for a rent increase. They argued that the omission of specifically pleading part performance of the agreement or to plead consideration could have been corrected by an amendment to the pleading. The appellant’s also argued that under the agreement to convey the Property, they had an equitable interest in the Property and standing to challenge the transfer to Grant. They allege that Grant attempted to frustrate through the exercise of undue influence or in breach of his fiduciary duty when he controlled his parents’ affairs, and that the court should give effect to the pleading that Wanda lacks capacity.

The appellants’ argument ignored the fact that a paragraph in the pleadings explicitly stated “it was always Edward’s intention to gift the Company Assets (including the Property) to Craig and Wendy”. The characterization of the arrangement as a promised gift is consistent with the pleadings when they are read as a whole. Interpreting the pleading of the lease agreement as actually pleading part performance of a contract is equally consistent as interpreting it as pleading with the favorable terms of the lease agreement being a gift. The pleadings do not allege that Edward and Wanda breached any agreement or that Grant induced the breach of this agreement.

(3) Yes. Rule 26.01 of the Rules of Civil Procedure provides that a court shall grant leave to amend a pleading “unless prejudice would result that could not be compensated for by costs or an adjournment”. The motion judge found that an adjournment to file a reply respecting the Statute of Frauds was unnecessary. However, the appellants request for an adjournment of the motion to file a reply was in effect a request to amend. Rule 26.01 required that the motion judge consider whether leave to amend should be granted and provide reasons if it should not be.

The appellants’ proposed amendment would allege that there was an agreement between Edward and Wanda to convey the Property to the appellants in exchange for performance of services and money expended on the Property. The transfer would occur upon Edward’s death or at the latest when Wanda died.

The respondent argued that an oral promise to gift land is unenforceable as a matter of established law and that the judge did not err in holding that the appellants’ lacked standing to bring their action. The court acknowledged the strength of these submissions but stated that they do not address the issue of whether leave to amend should now be granted. Among other arguments, the respondent submitted that the appellants’ proposed amendment is unenforceable because it does not bring them within the exception to the Statute of Frauds.

The respondent’s submission was in effect an argument that the court should consider the merits of the factual and legal basis of the proposed amendment at the pleading stage, which is not the law under r. 26.01. The amendment is to be granted, unless if originally pleaded, it would have been struck under r. 21.01(1)(b).  The proposed amendment to the pleading discloses a cause of action and the respondent does not allege prejudice that cannot be compensated for in costs.

(4) As a result of the leave to amend the pleadings being granted, it was unnecessary to decide if the appellants have standing to question the transfer of the property on the basis of alleged undue influence and a breach of fiduciary duty. The court did however make a number of observations on the issue.

The Powers of Attorney Act and the Substitute Decisions Act (“SDA”) have supplanted the common law relating to powers of attorney. The SDA governs all aspects of continuing powers of attorney for property and powers of attorney for personal care. Section 42(1) of the SDA provides that any person with leave of the court can bring an application for a passing of accounts. There is case law interpreting the SDA that has found that if the attorney and estate trustee are the same person, there can be no true accounting as between the attorney and estate trustee. This has resulted in the courts giving leave to beneficiaries as “any other person” under s. 42(4) to apply to the court for a passing of the attorney’s accounts for the period the attorney acted prior to the grantor’s death. The SDA provides a mechanism for a third party to compel an attorney to account.

Hervieux v. Huronia Optical, 2016 ONCA 294

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

Counsel:

Jason Arcuri , for the appellant Ben Pezik

Keegan Boyd and Jessica Laham, for the appellant Huronia Eye Clinic

Asha James and Marc Gibson, for the respondent

Keywords: Torts, Professional Negligence, Medical Malpractice, Expert Reports, Standard of Care, Causation, Small Claims Court, Summary Dismissal, Summary Judgment, Small Claims Court Rules, Rule 12.02, Denial of Natural Justice

Facts:

The appellants appeal from the order of the Divisional Court that allowed the respondent’s appeal from the dismissal of his action, and remitted his claim back to the Small Claims Court for a hearing.

The respondent failed to produce expert reports in accordance with orders made during settlement conferences. The appellants brought a motion under r. 12.02 of the Rules of the Small Claims Court to dismiss the respondent’s claim.

The deputy judge allowed the appellants motion and dismissed the respondents claim because of the respondent’s failure to file expert evidence supporting his claim on the issues of the standard of care and causation.

Later, the appeal judge allowed the respondent’s appeal on the basis that the deputy judge had made an error of law and exceeded his jurisdiction in treating the appellants’ motion as a motion for summary judgment and dismissing the respondent’s claim under rule 12.02(1) because the claim was not inflammatory, a waste of time, a nuisance or an abuse of the court’s process.

Issue:

Did the appeal judge err in setting aside the deputy judge’s decision to summarily dismissed the claim?

Holding: Appeal Dismissed.

Reasoning:

No.  The court held that the deputy judge had the jurisdiction to alter the time deadlines otherwise provided under the Small Claims Rules and even to dismiss an action.  The court agreed with the appeal judge that the deputy judge erred by concluding that the respondent’s claim was a waste of time under r. 12.02 based on his finding that there was no prospect of the respondent providing independent expert evidence.  The court held that there was ample evidence before the deputy judge that the respondent could provide expert evidence of his treating physicians in support of his claim and the court agreed with the appeal judge’s determination that the deputy judge’s dismissal of the respondent’s claim was an error and a breach of natural justice.

Doe v. MacDonald, 2016 ONCA 319

[Doherty, MacPherson and Miller JJ.A.]

Counsel:

Andrew J. MacDonald, for the appellants

Greg Frenette and Jessica Lam, for the respondent

Keywords: Solicitor and Client, Dispute Retainer Agreement, Pro Bono, Assessment of Accounts, Reasonable Apprehension of Bias

Facts: The appellants represented the respondent in an action against the respondent’s veterinarian, arising out of the death of the respondent’s service dog while under the veterinarian’s care. The appeal is from a judgment finding that the appellants’ services were rendered on a pro bono basis, and ordering the appellants to repay funds from the respondent that were improperly applied to legal fees instead of disbursements. This appeal turns mainly on the terms of the respondent’s retainer with the appellants.

After the settlement of the respondent’s action, the appellants rendered their account to the respondent, who had understood that the appellants were acting pro bono. The respondent objected to the account and brought it for assessment before an Assessment Officer. The Assessment Officer adjourned the proceeding sine die, on the basis that the retainer itself was disputed, and not simply the reasonableness of the account. The respondent then brought an application in the Superior Court seeking a declaration that the appellants had agreed to act pro bono, without charging legal fees.

Issues:

(1) Is the order for assessment initiated by the respondent an impediment to the application?

(2) Did the application judge err in allowing the proceeding to be brought by way of application or in not ordering a trial of an issue?

(3) Did the application judge err in law in defining the scope of a pro bono retainer?

(4) Did the application judge’s conduct raised a reasonable apprehension of bias?

Holding: Appeal Dismissed.

Reasoning:

(1) No. It was not necessary for the respondent to move to set aside the assessment order before proceeding in the Superior Court. The assessment was adjourned by the Assessment Officer precisely to enable the respondent to bring the matter for adjudication in the Superior Court, which is the appropriate venue where the nature of a retainer is in dispute.

(2) No. It was appropriate to proceed by way of application in this matter. There were no factual issues essential to evaluating the claim that could not be determined through the evidence provided.

(3) No. The application judge made no error of law with respect to the issue of whether the appellants agreed to act for the respondent on a pro bono basis. The issue was not, as the appellants would have it, that the application judge erred by holding that pro bono counsel may never receive fees. The application judge made no such error. The issue, rather, is a factual one: did the appellants make fee arrangements with the respondent that required the respondent to pay legal fees? The application judge found that they did not. This finding was amply supported by the record, is entitled to deference, and should not be interfered with.

(4) No. A review of the transcript does not provide support to the appellants’ argument that the conduct of the application judge raised a reasonable apprehension of bias against the appellants.

Neuberger v. York, 2016 ONCA 303

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

Counsel:

Chris G. Paliare, Megan E. Shortreed and Jean-Claude Killey, for the appellant Edie Neuberger

Kimberley A. Whaley, Benjamin Arkin and Arieh A. 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:  Civil Procedure, Costs, Reasonable Expectations

Facts:

The Appellant Edie Neuberger asked for costs of the motion below in the amount of $209,066.65, which included almost $24,000 of disbursements and HST.  The Appellant Adam Jesin-Neuberger asked for costs of the motion in the amount of $110,424.55, all inclusive. Fees were calculated on a partial indemnity basis. The Respondents, The York Parties, submitted that the Appellants should be awarded costs of the motion in the amount of $300,000, all inclusive. They claimed they did not have the benefit of scrutinizing the Appellants’ dockets and asked that the court infer that some of the time spent on the motion was unreasonable. The Appellants also sought costs of the appeal on a partial indemnity basis in the amounts of $148,903.78 and $197,297.23 respectively.

Issue:

What is the appropriate quantum of costs?

Holding: The Appellants were entitled to their costs of the motion below in the amounts sought. Costs of the appeals were fixed at $100,000 and $75,000 all inclusive, in favour of the Appellants.

Reasoning:

In deciding the quantum of costs, the award must be fair and reasonable in all the circumstances, with due consideration for the parties’ reasonable expectations.  Comparing the parties’ respective costs of appeal is useful when considering the parties’ reasonable expectations.  The York Parties’ combined partial indemnity costs of the appeal was approximately $353,000, which was similar to the Appellants’ combined partial indemnity costs of approximately $346,000.  Reasonable expectations are also informed by past costs orders of this court.  The York Parties’ submission that the amounts claimed by the Appellants were larger than many of the costs awards made by this court in typical appeals was accepted by the Court of Appeal. However, costs in any appeal must also be decided based on the particular circumstances of the case before the court.  This appeal was not typical and raised legally complex issues arising from a factually complex record.

Scamurra v. Sandy Scamurra & Sons Limited, 2016 ONCA 311

[Strathy C.J.O., Lauwers and Benotto JJ.A.]

Counsel:

 Michael N. Freeman, for the appellants/respondents by cross-appeal

Albert Campea, for the respondent/appellant by cross-appeal

Keywords:  Contracts, Breach, Share Purchase and Sale Agreements, Share Pledge Agreements, , Enforcement, Acceleration Clauses

Facts: The parties were brothers who operated several businesses together. They encountered difficulties that they resolved by entering into a Share Purchase and Sale Agreement. The agreement provided for the payment of monthly sums by the appellants, Albert and Felix Scamurra, to the respondent, Sandy Scamurra, in exchange for his shares in the companies. The agreement was secured by a Share Pledge Agreement. The appellants defaulted on the required payments. The parties tried to resolve the matter. Their lawyers exchanged offers in November 2014. When the appellants remained in default, the respondent brought a motion for summary judgment requesting either: enforcement of the Share Purchase and Sale Agreement, including the Share Pledge Agreement; or, in the alternative, enforcement of the settlement he claimed was reached by letter dated November 28, 2014. The motion judge found that there was no binding settlement in November 2014. However, he awarded judgment to the respondent for both past and future amounts owing under the Share Purchase and Sale Agreement.

Issue:

In the absence of an acceleration clause, did the motion judge err in ordering the Appellants to pay the full amount – past and future – owing on the Share Purchase and Sale Agreement?

Holding: Appeal allowed. Cross-appeal dismissed.

Reasoning:

Yes. The terms of the agreements were clear. The motion judge erred by collapsing the outstanding payments into the amount owing in the absence of an acceleration clause and in the face of terms agreed to by the parties setting out their responsibilities in case of default. Paragraph 6 of the Share Purchase and Sale Agreement provided that, in the event of a late payment, interest accrued at the rate of 10% per year. Paragraph 14 explained that the reasonable expenses incurred by the respondent in recovering payment in case of a default were to be paid by the appellants. Further, the Share Pledge Agreement provided security for the payments. It contemplated that the respondent’s shares would be held in escrow until the whole of the purchase price was paid to him by the appellants.

Yorkwest Plumbing Supply Inc. v. Nortown Plumbing (1998) Ltd., 2016 ONCA 305

[Feldman, Juriansz and Brown JJ.A.]

Counsel:

John Lo Faso and W.A. McLauchlin, for the appellant

Theodore B. Rotenberg, for the respondent, Intracorp Projects (Milton on the Escarpment) Ltd.

Karey Dhirani, for the respondents, Burl 9 Developments Limited and Sundial Homes (Burl 7) Limited

Keywords: Construction Law, Construction Liens, Quantum Meruit, Unjust Enrichment, Construction Lien Act, s.6, s.20(1), s.20(2), s.35, s.55, Leo P. Abrams & Sons Ltd. v. MacDonald Homes Inc. (Trustee of), Gillies Lumber v. Kubassek Holdings Ltd.

Facts:

Appellant Yorkwest was a plumbing supply subcontractor of Nortown on two projects, one owned by respondent Intracorp and one by respondent Burl 9. As Nortown’s owners had failed in the past to pay suppliers and tradespeople, Yorkwest refused to extend credit to Nortown. However, Nortown went bankrupt and Yorkwest was owed over $490,000 on various projects, including these two. For both, Nortown’s contract with each development owner provided that any liens would both arise and expire on a lot-by-lot basis.

After its final supply to the projects, Yorkwest filed a general lien against each project for the total amount owed for what it had supplied to the various lots in each subdivision. These liens were discharged on summary judgment motions and the decision to discharge them was upheld by the Divisional Court on the basis that, pursuant to s. 20(2) of the Construction Lien Act (“CLA”), a subcontractor is not able to claim a general lien on a project where the contractor and owner agreed that liens would arise and expire on a lot-by-lot basis, as was the present case. Yorkwest appealed that result.

As Yorktwest’s liens were invalidated, it did not receive any payment for the plumbing materials it supplied. Yorkwest also sought a remedy because of an unfair result: based on a settlement reached between Intracorp and Nortown’s trustee and receiver, Nortown’s secured creditors would receive proceeds of the security paid to vacate Yorkwest’s general lien against the lots of the Intracorp subdivision.

Issues:

(1) Did the Divisional Court err in interpreting s. 20(2) of the CLA to apply to “subcontracts”, when that term is not used in the subsection?

(2) If the appellant was not precluded under s. 20(2) from filing a general lien, was it entitled to do so in this case?

(3) If the appellant was precluded from filing a general lien, is it entitled to any other relief?

Holding: Appeal Dismissed.

Reasoning:

(1) No. The Court reasoned that s. 20(2) of the CLA was a contracting out provision under which, where a contract has provided that liens will arise and expire on a lot-by-lot basis, “no general lien arises under or in respect of” that contract. Yorkwest argued that because s. 20(2) did not refer to any “subcontract”, regardless of whether an owner and contractor agreed that liens would arise and expire lot-by-lot, a subcontractor could still register a general lien pursuant to s. 20(1). The Court did not agree with this argument and instead agreed with the decisions of the motion judge and Divisional Court.

The intent of adding s. 20(2) to the CLA was to allow an owner and a contractor to contract out of their right to file a general lien to prevent problems that had been arising with respect to mortgage financing. As observed by the Divisional Court, giving effect to Yorkwest’s interpretation would simply re-create the trouble that s. 20(2) addressed.

Yorkwest’s argument that the omission of “subcontract” from s. 20(2) meant that the section was not applicable to subcontracts was similarly rejected. The Court reasoned that, because all subcontracts are derived from a main contract, the general lien of a subcontractor can only arise “in respect of” that main contract. Thus, because the right to a general lien can only arise pursuant to s. 20(1) in the contract between the contractor and owner, a subcontract cannot then create that right.  Moreover, the Court stated that Yorkwest’s interpretation would undermine the ability of contractors and owners to create provisions in their contracts that allow the owner to release a holdback on a lot-by-lot basis, which would considerably undermine the benefit of contracting out pursuant to s. 20(2).

(2) No. Because Yorkwest was not entitled to register a general lien, this issue was moot.

(3) No. Yorkwest sought three alternative remedies, all of which were denied:

(i)

Initially, Yorkwest asked the Court to cure its defective general liens by applying s. 6 of the CLA. The Court found no basis to do so given the decision in Leo P. Abrams & Sons Ltd. v. MacDonald Homes Inc. (Trustee of), which provided that to allow a claimant to preserve its general lien in this regard “would be to ignore the scheme of s. 20 and would encourage the improper registration of liens”. Moreover, Gillies Lumber v. Kubassek Holdings Ltd. also provided that s. 6 could not be used to cure the impugned improper liens.

(ii)

Yorkwest sought, in the alternative, for the Court to treat the claims for general liens as excessive liens pursuant to s. 35 of the CLA. The Court rejected this and held instead that to treat the impugned liens as proper specific liens that were registered for excessive amounts would be to fail to give effect to s. 20(2) of the Act. Instead, it would undermine the fair and efficient operation of the CLA.

(iii)

The final requested alternative remedy was to allow Yorkwest’s claims for quantum meruit and unjust enrichment against the respondent owners to proceed. The Court noted that Yorkwest did not plead breach of contract against the respondents, and that to allow claims not referred to in s. 55 of the CLA to be joined in the action, such as those for quantum meruit or unjust enrichment, would be tantamount to a refusal to apply s. 55, as found by the Divisional Court.

Carpenter v. Carpenter, 2016 ONCA 313

[van Rensburg J.A.]

Counsel:

Gordon S. Campbell, for the moving party

Jamie Lee Carpenter, acting in person

Kenneth Younie, duty counsel for the respondent

Keywords: Family Law, Extension of Time to Appeal, Rizzi v. Marvos, Self-Represented Litigants, Family Law Rules, O. Reg. 114/99

Facts: The parties were involved in high-conflict matrimonial proceedings. This was a motion for an extension of time to appeal two orders made in a matrimonial proceeding. The first was dated November 13, 2013, and provided for the striking of the moving party’s pleadings in the event that he did not pay $2,000 in costs within ten days. The second was dated April 17, 2014, and was a final order in an uncontested trial.

Issues:

(1) Should the motion for extension of time be granted for the moving party to appeal the subject orders?

Holding: Motion dismissed.

Reasoning:

(1). No. Whether to extend time to appeal is in the discretion of the court. According to Rizzi v. Marvos, 2007 ONCA 350, the relevant factors are (a) whether the appellant formed an intention to appeal within the relevant period; (b) the length of the delay and the explanation for the delay; (c) any prejudice to the respondent; (d) the merits of the appeal; and (e) whether the “justice of the case” requires the extension.

Mr. Carpenter contends that he always intended to appeal the orders and that he has a reasonable explanation for his delay. To a significant extent he relies on the fact that he has been self-represented. The fact that Mr. Carpenter was self-represented does not excuse his failure to comply with the necessary time limit or to move promptly for an extension of time to appeal the two orders in question. Any participant in litigation, including a self-represented party, has a responsibility to familiarize himself or herself with the procedures relevant to the case.

In regards to the justice of the case, the Family Law Rules, O. Reg. 114/99 allow pleadings to be struck where there has been a repeated failure to comply with court orders, especially for disclosure. It was impossible to tell from the record before this court whether in all the circumstances it would have been appropriate for the motion judge to strike Mr. Carpenter’s pleadings for failure to comply. However, permitting an appeal at this stage would prejudice the respondent. She took the necessary steps to bring the litigation to a close, and she has no financial resources to retain counsel to respond to an appeal. More importantly, the court was not satisfied that the Final Order has unfairly benefited Ms. Carpenter or resulted in any real injustice to Mr. Carpenter. A review of the transcript discloses that the trial judge carefully considered all relevant evidence, including evidence favourable to Mr. Carpenter.

Wasinski v. Norampac Inc., 2016 ONCA 309

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

Counsel:

Jared Brown and Lauren Findlay, for the appellant

Jordan D. Winch and Julia Bassett, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Termination for Cause, Findings of Fact, Standard of Review, Palpable and Overriding Error

Facts:

Wasinski worked as an electrician for Norampac for 21 years before being dismissed. Norampac used a “Smart Cart” machine to transport material, which could operate in manual or automatic mode. On November 3, 2010, the Smart Cart malfunctioned and Wasinski contacted the appropriate maintenance company. Konczyk, a representative of that company, attended at Norampac’s premises. Konczyk told Wasinski that the safety encoders on the Smart Cart were faulty and agreed to Wasinski’s suggestion to re-install software to permit the Smart Cart to operate in automatic mode without the encoders.

Konczyk suggested that Wasinski speak to a supervisor regarding this change, although it is not clear whether he did. On November 5, 2010, Wasinski’s supervisor Chopin learned that the Smart Cart was running in “semi-safe” condition and immediately inspected the Smart Cart and disabled it from operating in automatic mode. Norampac’s safety rules specifically prohibited any tampering with any safety devices.

Norampac dismissed Wasinski and asserted that his disciplinary record and decision to knowingly by-pass a safety device gave it cause to dismiss the appellant. The trial judge found that Wasinski had received extensive and ongoing health and safety training and that he was aware of these rules. The trial judge agreed with the respondent and accepted Norampac’s evidence evincing Wasinski’s progressive disciplinary record and found that his cumulative misconduct gave Norampac cause to dismiss him.

Issues:

(1) Did the trial judge err in relying on a ground for dismissal not pleaded by the respondent in its Statement of Defence or argued at trial?

(2) Did the trial judge make a palpable and overriding error of fact?

(3) Did the trial judge err in law by failing to resolve contradictions in the evidence.

Holding: Appeal dismissed.

Reasoning:

(1) No. Wasinski argued that, in finding that Norampac had cause to terminate his employment, the trial judge relied on grounds that Norampac had not pleaded, including that (1) he failed to clearly report his actions to a person in charge of the Norampac plant and (2) he did not have the authority to change Norampac’s safety standards without its consent.

The Court rejected these arguments, finding that the trial judge’s reasons referred to grounds that were pleaded by Norampac and that the transcripts of the closing arguments revealed that the trial judge was “clearly alive to the need for the respondent to rely only on grounds for dismissal pleaded in its Statement of Defence.”  The Court also found that it was clearly implicit in the respondent’s Statement of Defence that it was taking the position that Wasinski did not have the authority to make changes to its safety standards without its consent.

(2) No. Wasinski argued that the trial judge’s finding that the Smart Cart was only run in manual mode until December 2009 was a palpable and overriding error. The Court also rejected this argument and held that because of Konczyk’s evidence and Wasinski’s concessions, the trial judge’s finding was not a palpable factual error. The Court further held that, in any event, it would not have been an overriding error.

(3) No. Finally, Wasinski argued that the trial judge committed an error by failing to resolve the conflicting evidence between him and Konczyk regarding what mode the Smart Cart was left in when Konczyk left the plant on the evening of November 3, 2010. The Court held that the trial judge was not required to resolve every conflict in the evidence. This particular conflict was not material to her final determination and even if Konczyk had left the plant aware that the Smart Cart had been left in automatic mode, this finding would not have exonerated Wasinski.

Fonseca v. Hansen, 2016 ONCA 299

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

Counsel:

Scott C. Hutchison and Matthew R. Gourlay, for the appellant/respondent by way of cross-appeal

Ian D. Kirby, for the respondents/appellants by way of cross-appeal

Keywords: Torts, Negligence, Motor Vehicle Accidents, Damages, Jury Instructions, Experts, Assignment of Collateral Benefits, Offers to Settle, Costs Consequences, Rules of Civil Procedure, Rule 49.10, Pre- and Post-Judgment Interest, Courts of Justice Act, ss. 127 and 128

Facts:

The appellant was involved in a motor vehicle collision on March 20, 2008 in Mississauga, Ontario. She was stopped at a red light at an intersection when her vehicle was hit from behind by a transport truck. At the time, the appellant was enrolled in a dentistry general practice residency in Vancouver, B.C. She was visiting her family for the Easter long weekend when she was involved in the collision. She suffered injuries as the result of the accident which she claimed prevented her from maintaining a full time clinical dentistry practice.

The respondents admitted liability shortly before the commencement of the trial and accordingly the contest was confined to the assessment of damages.

The respondents took the position that the appellant had recovered from her injuries sufficiently by August 2011 to resume a full time clinical practice. The appellant’s position was that she was only able to work 15 to 20 hours per week in a clinical setting and that her condition was likely to be permanent. Her economic expert, Dr. House, opined that her future income loss would be between approximately $6,000,000 and $18,000,000 depending on the career path she would have followed in the absence of the accident.

The jury awarded damages to the appellant as follows:

1)        General Damages                     $104,000

2)        Past Income Loss                     $584,187

3)        Future Income Loss                  $112,496

4)        Other Special Damages            $  44,412

5)        Future Health Care Costs          $  27,450

She appealed the damage award. The respondents cross-appealed on the issue of costs, the assignment of collateral benefits and interest awarded.

Issues:

The Appeal

(1) Is the jury’s award of $112,496 for future income loss fundamentally inconsistent with the other damages awarded or so low as to amount to an injustice?

(2) Did the trial judge err by failing to instruct the jury that pre-trial communication between [the appellant’s] counsel and an expert witness was not a proper basis upon which to reject the expert’s testimony?

The Cross-Appeal

(1) Did the trial judge err by failing to award the appellant her costs only to the date of the respondents’ offer to settle and the respondents their costs after that date in accordance with rule 49.10 of the Rules of Civil Procedure?

(2) Did the trial judge err in determining that the respondents’ entitlement to an assignment of collateral and statutory accident benefits should be limited in the manner specified in her judgment?

(3) Did the trial judge err in awarding interest on the awards for past income loss and special damages at a blended rate rather than at the rate prescribed by ss. 127 and 128 of the Courts of Justice Act?

Holding: Appeal and cross-appeal dismissed.

Reasoning:

Appeal

(1) No. The court found there was conflicting evidence. It reasoned that deference will be accorded in cases where there is some evidence to support the jury’s verdict, and a verdict will not be set aside even if another conclusion is available on the evidence.

The court found on the whole of the evidence that there was a divide in the medical opinions. Some of the medical professionals were of the view that the appellant’s condition was unlikely to improve in the future and it was unlikely that she would be able to resume a full time clinical practice. Others were of the view that soft tissue injuries improve over time and that there was nothing preventing the appellant from resuming a full time clinical practice provided that she maximized her “ergonomic IQ” and worked in an “optimized clinical setting”. It was open to the jury to accept the evidence on that point.

In addition, the court was not persuaded that there was any inconsistency in the amount the jury in the present case awarded for future income loss when compared with the amounts it awarded under the other heads of damage.

(2) No. The court was sympathetic to the appellant’s position, and acknowledged that the respondent’s line of questioning regarding this issue was improper. However, it was clear from the record that counsel for both parties ultimately agreed to the contents of the trial judge’s charge on this issue.

The court recognized that a request from counsel to speak to the expert witness either before the expert sees the client or writes a report does not alone meet the threshold for an allegation of improper influence – which was exactly the impression counsel for the respondents attempted to make with the jury. However, it was not dispositive of this ground of appeal because the trial judge did exactly what counsel agreed she should do in her charge to the jury. The court found it inappropriate for counsel to take a position below, make an agreement with the court and then to resile from that position on appeal.

Cross-Appeal

(1) No. the trial judge committed no error when she concluded that rule 49.10(2) was of no application in the circumstances. The respondents’ offer had expired before the second trial began. The court found the respondents failed to demonstrate that there were strong grounds upon which it could find that the trial judge erred in exercising her discretion with regard to costs.

(2) No. A defendant’s right to an assignment of future collateral benefits received by a plaintiff is available only if they cover the same expenses for which the defendant has been ordered to pay damages to the plaintiff. The court relied on Gilbert v South, 2014 ONSC 3485 for the proposition that uncertainty about the extent of overlap between the plaintiff’s entitlement to accident benefits and the jury’s global award for future care costs meant that the defendant had not met its onus to establish entitlement to an assignment. It found this was the same reason that the trial judge declined to extend the assignment and trust to future health care costs not enumerated in her charge to the jury. To do otherwise would be to engage in speculation.

(3) No. The court saw no error in the trial judge’s discretionary order as she set out in her reasons why she departed from s. 127 of the Courts of Justice Act. It accepted the trial judge’s reasoning that because the appellant’s past income losses and special damages were incurred over several years and not at a single point in 2009 (when her statement of claim was issued), it would work an unfairness to apply the record-low interest rate from the third quarter of 2009 to the entire damage award.

Civil Endorsements 

Foessl v. Ontario (Attorney General), 2016 ONCA 304

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

Counsel:

Trent Falldien, for the appellant

Sara Weinrib and Josh Hunter, for the respondent

Keywords: Canadian Charter of Rights and Freedoms, Appeal Without Merit

Lavoie c. Bank of Nova Scotia, 2016 ONCA 301

[Sharpe, van Rensburg and Benotto JJ.A.]

Counsel:

Mireille Lavoie, in person

Meghan E.W. O’Halloran, for the respondent

Keywords: Debtor-Creditor, Student Loan

Gray v. Rizzi, 2016 ONCA 290

[Sharpe, Brown and Miller JJ.A.]

Counsel:

Cheryl Goldhart and Maneesha Mehra, for the appellant/ respondent by way of cross-appeal

Peter B. Cozzi, for the respondent/appellant by way of cross-appeal

Keywords: Family Law, Child Support, Spousal Support, Arrears, Variation

Cushnaghan v. Kwan, 2016 ONCA 312

[Doherty, MacPherson and Miller JJ.A.]

Counsel:

Andrea M. Habas, for the appellant

Craig Losell, for the respondent

Keywords: Minutes of Settlement, Failure to Pay, Damage to Property

DLE Consulting Inc. v. Graham, 2016 ONCA 315

[Laskin, Pepall and Brown JJ.A.]

Counsel:

Alexander Nicholas Zivkov, for the appellants

Jordan D. Sobel, for the respondent

Keywords: Civil Procedure, Affidavits of Documents, Failure to Deliver, Rule 76, Striking Statement of Defence

Olumide v. Conservative Party of Canada, 2016 ONCA 314

[Doherty, MacPherson and Benotto JJ.A.]

Counsel:

Ade Olumide, acting in person (via teleconference)

Mark Wiffen, appearing as duty counsel

Paul D’Angelo, for the respondents (via teleconference)

Keywords: Civil Procedure, Extension of Time to Appeal, Interlocutory Order

Ontario Review Board Decision

Kusi (Re), 2016 ONCA 317

[Weiler, Simmons and Epstein JJ.A.]

Counsel:

Mercedes Perez, for the appellant

Carmen Elmasry, for the Attorney General of Ontario

Kathryn Hunt, for the Centre for Addiction and Mental Health

Keywords: Capacity Review Board, Mental Capacity, Schizophrenia, Not Criminally Responsible, Harassment, CAMH, Absolute Discharge, Appeal Allowed

Criminal Decisions

R. v. Mohammad, 2016 ONCA 297

[Feldman, Simmons and Pepall JJ.A.]

Counsel:

Khaleel Mohammad, in person

Leslie Paine, for the respondent

Keywords: Criminal Law, Sentencing, Appeal Allowed

R. v. Woolridge, 2016 ONCA 302

[Doherty, Watt and Miller JJ.A.]

Counsel:

Joseph Di Luca and Michael Wendl, for the appellant

Davin M. Garg, for the respondent

Keywords: Criminal Law, Robbery, Sentencing, R. v. Lacasse, Aggravating and Mitigating Factors, Appeal Dismissed

R. v. O’Neill, 2016 ONCA 307

[Strathy C.J.O., Pardu and Benotto JJ.A.]

Counsel:

Frank Miller, for the applicant

Matthew Asma, for the respondent

Keywords: Criminal Law, Criminal Code s. 253(1)(a) & (b), R. v. Boudreault, Motion for Leave to Appeal Dismissed

R. v. Chapman, 2016 ONCA 310 note: publication ban

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

Counsel:

Christine Bartlett-Hughes and Hannah Freeman, for the appellant

Brian H. Greenspan and Naomi M. Lutes, for the respondent

Keywords: Criminal Law, Sexual Offences, Appeal Dismissed

R. v. Dhillon, 2016 ONCA 308

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

Counsel:

Rick Visca, for the appellant

Alan D. Gold and Melanie J. Webb, for the respondent

Keywords: Criminal Law, Possession of Drugs for the Purposes of Trafficking, Sufficiency of Grounds for Arrest, Appeal Allowed

 

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 again,

The Court of Appeal released a number of interesting decisions this week.  In Meridian Credit Union Limited v. Baig, the Court confirmed that silence and half-truths can amount to misrepresentation, and found a purchaser had engaged in fraudulent misrepresentation by silence in the context of a court-approved sale of assets by a receiver.   Other topics addressed by the Court include entitlement to commissions, and the high threshold that must be met to permit an action against a monitor and/or receiver.

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

 

Table of Contents

Civil Decisions

Meridian Credit Union Limited v. Baig, 2016 ONCA 150

Keywords: Real Property, Creditor and Debtor, Court Appointed Receiver, Sale of Land, Fraudulent Misrepresentation, Misrepresentation by Silence, Corporate Veil, Hryniak v Mauldin, Intervener, Fresh Evidence, audi alteram partem

Crate Marine Sales Limited (Re), 2016 ONCA 140

Keywords: Bankruptcy, Receivership, Occupancy, Leave to Appeal, Bankruptcy and Insolvency Act, s. 193(c) & (e)

Holmes v. Schonfeld Inc., 2016 ONCA 148

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

Kloos v. Tangas, 2016 ONCA 149

Keywords: Commercial Law, Mortgage, Fraudulent Conveyance, Fraudulent Preference, Litigation Guardian, Doctrine of Laches, Estoppel, Perry, Farley & Onyschuk v. Outerbridge Management Ltd.

Dysart, Dudley, Harcourt, Guilford, Harburn, Bruton, Havelock, Eyre and Clyde (United Townships) v. Mohammed, 2016 ONCA 153

Keywords: Vexatious Litigant, s. 140(1) Courts of Justice Act, Motion for Extension of Time to File Appeal, Res Judicata, Abuse of Process

First Contact Realty Ltd. (Royal LePage First Contact Realty) v. Prime Real Estate Holdings Corporation, 2016 ONCA 156

Keywords: Real Estate law, Motion for Summary Judgment, Hyrniak Principles, Finding of Fact, Real Estate Commission, Restraint Order, Marijuana Grow-op, Controlled Drugs and Substances Act

Gray v. Rizzi, 2016 ONCA 152

Keywords: Family Law, Retroactive Variation Order, Divorce Act s.17, Material Change in Circumstances, Elimination of Child and Spousal Support Arrears, Overpayment of Support, Repayment Financial Hardship, D.B.S. v. S.R.G., L.M.P. v. L.S.

2274659 Ontario Inc. v. Canada Chrome Corporation, 2016 ONCA 145

Keywords: Standard of Review, Correctness, Remedy, Palpable and Overriding Error, Mining Act, S. 50(2), S. 51(1), Statutory Interpretation

Spylo v. Spylo, 2016 ONCA 151

Keywords: Estate Law, Trusts, Secret Trust, Lack of Evidence, Judicial Impartiality, Apprehension of Bias

Children’s Aid Society of Toronto v. L.T. (Publication Ban), 2016 ONCA 146

Keywords: Child Protection, Motion to Dismiss for Delay, Adjournment, Best Interest of the Child

Murphy v. Wheeler, 2016 ONCA 166

Keywords: Civil Litigation, Mortgage, Equitable Mortgage, Unregistered Amending Agreements, Proceeds of Sale,  Interest, Costs

Warburg-Stuart Management Corporation v. DBG Holdings Inc., 2016 ONCA 157

Keywords: Contracts, Contract Interpretation, Advisory Services, Lending, Joint and Several Liability, Costs, Partial Indemnity, Summary Judgement

 

For a list of Civil Endorsements, click here.

For a list of Criminal Decisions, click here.

 

Civil Decisions

Meridian Credit Union Limited v. Baig, 2016 ONCA 150

[Strathy C.J.O., LaForme and Huscroft JJ.A.]

Counsel:

Milton A. Davis and John Adair, for the appellant

J. Anthony Caldwell, for the respondent

Clifford Lax, Q.C., James Renihan and Linda Galessiere, for the interveners Miller Thomson LLP and Peter Kiborn

Keywords: Real Property, Creditor and Debtor, Court Appointed Receiver, Sale of Land, Fraudulent Misrepresentation, Misrepresentation by Silence, Corporate Veil, Hryniak v Mauldin, Intervener, Fresh Evidence, audi alteram partem

Facts:

Ahmed Baig, the appellant, agreed to purchase a building located at 984 Bay Street, Toronto (the “Property”), from the court appointed receiver and manager of the Property (the “Receiver”) for $6.2 million (the “Agreement”). Unknown to the Receiver and prior to closing, the appellant agreed to re-sell the Property to Yellowstone Property Consultants Corp. (“Yellowstone”) for $9 million. The appellant retained Miller Thomson LLP (“Miller Thomson”) where Peter Kiborn acted for him in structuring the transaction.

To avoid land transfer tax, Kiborn recommended that title to the Property be transferred directly to Yellowstone. The Receiver erroneously believed Yellowstone was the appellant’s corporation incorporated for the purposes of the Agreement. Neither Kiborn nor the appellant corrected this misunderstanding. Had it known, the Receiver claims it would not have recommended approval of the sale to the court in the receivership proceeding. However, it obtained court approval for the Agreement and the transaction closed.

Meridian Credit Union Limited (“Meridian”), the respondent, discovered the re-sale and informed the Receiver. As Meridian had not recovered the full amount owing to it in the receivership proceeding, the Receiver assigned its cause of action against the appellant to Meridian. Meridian then commenced the within action against the appellant.

In the decision under appeal, the motion judge dismissed the summary judgment motion brought by the appellant and instead found him liable for fraudulent misrepresentation.

Issues:

(1) Did the motion judge err by finding the appellant personally liable for fraudulent misrepresentations?

(2) Did the motion judge err by concluding that the interveners had made misrepresentations in their absence?

(3) The interveners also seek to introduce fresh evidence on appeal.

Holding: Appeal dismissed.

Reasoning:

(1) No. The court cited the test for civil fraud from Hryniak v Mauldin, 2014 SCC 7 and found there was sufficient evidence to prove all four elements and to find the appellant personally liable. Further, the motion judge’s findings were reasonable and amply supported by the evidence before him. First, the record disclosed that the appellant engaged in actions that amounted to misrepresentations. Second, the appellant had some level of knowledge about the misrepresentations. Third, the representations caused the Receiver to seek court approval and to transfer title directly to Yellowstone. Lastly, as a result of the misrepresentations, the Receiver lost an opportunity to negotiate a higher price with the appellant or another party. The lost opportunity is a sufficient loss to ground a claim for civil fraud.

As it relates to the appellant’s submission that he was protected by the corporate veil, the court found it inappropriate that the appellant tried to withdraw the concession made before the motion judge that he would be liable for any tortious misrepresentation made by his lawyers. In addition, the court stated it was consistent law in Canada that officers, directors and employees of corporations are responsible for their tortious conduct even if done in the best interests of the company.

(2) No. The interveners relied on the principle of audi alteram partem, composed of two elements: a right to be heard by a decision-maker, and a right to notice of a hearing sufficient in time and substance to enable a party to present their case. The court did not find the interveners had a right to be heard or to receive notice in this case.

The court stated audi alteram partem applies whenever a person’s rights, interests, or privileges are affected by a decision. As non-parties to the action, the interveners were not directly impacted by the order. They were not bound by the motion judge’s finding that they made fraudulent misrepresentations. The only tangible manner in which the court found they were impacted was indirect: now with the appellant liable for damages, the interveners were exposed to a greater risk that they may be found liable for a portion of the appellant’s liability.

The court reiterated the principle that the common law does not provide non-parties with the right to notice, to adduce evidence, or to make submissions whenever an adverse credibility finding may be made in judicial proceedings that involve them. Non-parties are limited to whatever procedural rights they have under the rules.

(3) Lastly, the fresh evidence application failed because the evidence was irrelevant to the validity of the process followed by the motion judge and the criteria in R v Poulos does not apply. Further, the criteria in R v Palmer also does not apply for similar reasons, because the interveners’ belief is irrelevant to the issues raised. Therefore, the fresh evidence could not have affected the results of the motion below.

Crate Marine Sales Limited (Re), 2016 ONCA 140

[Hourigan J.A. (In Chambers)]

Counsel:

Harvey G. Chaiton and Doug Bourassa, for Crawmet Corp., the moving party

James P.  McReynolds, for the appellant 2124915 Ontario Inc.

R. Brendan Bissell, for the A Farber & Partners Inc., the Receiver

Keywords: Bankruptcy, Receivership, Occupancy, Leave to Appeal, Bankruptcy and Insolvency Act, s. 193(c) & (e)

Facts: The appellant, 2124915 Ontario Inc., brought a motion seeking a declaration that that the receiver occupied Lagoon City Marina for a specified period and an order that the receiver pay occupation rent. The motion judge held that the receiver did not occupy the marina and that if rent was owed; it should be reduced by whatever the receiver paid for utilities. The motion was dismissed.

At issue was whether the appellant requires leave to appeal.

Issues:  Does the appellant require leave to appeal the order pursuant to s. 193(e) of the Bankruptcy and Insolvency Act or is there an automatic right of appeal pursuant to s. 193(c)?  Under s. 193(c), if the property involved in the appeal “exceeds in value ten thousand dollars”, then leave is not required.

Holding: Motion dismissed. No leave required.

Reasoning:  The appellant argued that it has an automatic right of appeal pursuant to Section 193(c) of the Bankruptcy and Insolvency Act (“BIA”) and the moving party argued that leave was required under s. 196(e).

The court identified two principles that have emerged from case law that establish the parameters for the interpretation of s. 193(c).  First, the broad nature of the stay imposed by s. 195 of the BIA requires the right of appeal under s. 193(c) to be clearly applicable and narrowly construed. Second, the appeal must directly involve property exceeding $10,000 in value.

The moving party cited cases in which the property was secondary to the appeal.  Fundamental to the within appeal was the issue of property with a value of far more than $10,000 that is directly involved with this appeal.  Accordingly, leave was not required, and the appeal was directed to proceed without the requirement of leave of the court of appeal.

Holmes v. Schonfeld Inc., 2016 ONCA 148

[Weiler, LaForme and Huscroft JJ.A.]

Counsel:

Marc Munro, for the appellants Scott Holmes and Jennifer Flynn

Frank Bowman and Deepshikha Dutt, for the appellant Bossy Nagy Geoffrey (BNG), previously known as the Michael Bossy Group

Aubrey Kauffman and Dylan Chochla for the respondent Schonfeld Inc.

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

Facts:

This action relates to the litigation involving Holmes, Flynn, their companies and others, against the Canadian National Railway Company (“CN”). In August 2008, CN obtained a Mareva Order and an Anton Pillar order against Holmes and Flynn and their companies (the “Monitored Parties”).

Shortly thereafter, Schonfeld was appointed Monitor and Receiver over the assets, undertaking and properties of the Monitored Parties. After Schonfeld was discharged, Holmes and Flynn were told by the Canada Revenue Agency (“CRA”) that, following a reassessment, they owed over one million dollars in unpaid taxes. The liability arose because Holmes and Flynn failed to repay loans made to them by their corporations; when not repaid within one year, the loans were considered income and taxed as such resulting in the assessment for unpaid taxes.

Holmes and Flynn brought an action against Schonfeld, claiming that Schonfeld did not exercise reasonable care in managing Holmes and Flynn’s assets, and that Schonfeld was obliged to engage in reasonable tax planning.  Holmes and Flynn also sued Bossy Nagy Geoffrey (“BNG”), their accountants and tax advisers before and during the receivership. BNG also sought leave to bring a Crossclaim (or, alternatively, a Third Party Claim) against Schonfeld.

Schonfeld successfully brought a motion to dismiss all claims against it because Holmes and Flynn’s action was commenced without Schonfeld’s consent and without leave of the court (one or the other of which was required when reading together the terms of the Monitor Order, Receiver Order and Discharge Order).

BNG’s motion for leave was dismissed because there was no foundation for a claim that Schonfeld’s conduct constituted a “very marked departure” from the standards by which a reasonable and competent receiver in the same circumstances would have conducted itself, nor was there a foundation for the claim that Schonfeld conducted itself with reckless indifference or in a manner that it knew was wrong.  This onus on BNG in order to obtain leave to claim against Schonfeld arose out of the terms of the orders releasing Schonfeld of liability, excepting gross negligence and wilful misconduct.

Issues:

The appellants Holmes and Flynn raised the following issues:

(1) Did the motions judge err in law in concluding that leave was required?

(2) Did the motions judge misapprehend the evidence and/or fail to consider relevant evidence?

(3) Did the motions judge apply the wrong test for granting leave?

(4) Did the motions judge err in concluding that the appellants Holmes and Flynn had not met the test for leave?

The appellant BNG raised the following issues:

(1) Did the motions judge err in concluding that the “strong prima facie case” standard should be applied to BNG?

(2) Did the motions judge err in failing to take into account the totality of evidence in concluding that BNG’s claim against Schonfeld was without foundation and was frivolous and vexatious?

(3) Did the motions judge exceed its jurisdiction on a leave motion when he concluded that Schonfeld’s conduct did not meet the test for gross negligence?

Holding: Appeal Dismissed.

Reasoning:

Holmes and Flynn’s Appeal

(1) No. Properly interpreted, Schonfeld as Receiver was entitled to the protections of Paragraph 7 of the Monitor Order which stated that no proceeding shall be commenced against the Monitor without the Monitor’s consent or leave of the court. The appellants relied on the Receiver Order to bring the action, but the court found the Receiver Order was supplemental to the Monitor Order and leave was required.

(2) No. First, there was ample evidence to support the motions judge’s finding of fact that the tax liabilities began prior to Schonfeld becoming involved in the matter.

Second, the powers and authorizations given to Schonfeld as Receiver and Monitor were detailed and precise. Had Schonfeld moved funds as the appellants submit it ought to have done, it would not have been in compliance with the orders.

Third, there was evidence to support the trial judge’s finding that Schonfeld’s mandate as Monitor and Receiver did not include providing the type of services to Holmes and Flynn that they complained they did not receive.

Lastly, the motions judge was entitled to consider that Holmes and Flynn had actual knowledge of their shareholder loans, but Schonfeld did not.

(3) No. In such circumstances, the test was whether the Receiver “demonstrated a very marked departure from the standards by which responsible and competent people in such circumstances would have acted or conducted themselves, or in a manner such that it knew what it was doing was wrong or was recklessly indifferent in its conduct” (Alberta Treasury Branches v Elaborate Homes Ltd, 2014 ABQB 350). This was the proper test and the motions judge applied it.

(4) No. The court upheld the motions judge’s findings of fact, and his conclusion that there was no foundation for a claim in gross negligence or wilful misconduct. Accordingly, the motions judge did not err in concluding that Holmes and Flynn should not be granted leave to commence their action against Schonfeld.

BNG’s Appeal

The motions judge observed that the strong prima facie case standard may be appropriate where the issues raised in the action could have been raised in the discharge proceedings, and concluded that the reasonableness of Schonfeld’s conduct from a tax planning perspective and the potential tax liability of Holmes and Flynn were issues that could have been raised in the discharge proceedings.

BNG was a third party to the receivership and was not present at the discharge hearing. However, it was barred from instituting proceedings in negligence by the release clause of the discharge order. The release clause allowed the court to protect the discharged receiver, a former court officer, from claims arising out of the exercise of its role (Ed Mirvish Enterprises Ltd. v. Stinson Hospitality Inc., 2009 CanLII 55113).

While the allegedly negligent conduct BNG raised may be different than the allegations of negligence pleaded by Holmes and Flynn, the court found all of this conduct could have, and should have, been raised by Holmes and Flynn during the course of the discharge proceedings.

The court held that BNG could not do indirectly – hold Schonfeld responsible for Holmes and Flynn’s losses – what Holmes and Flynn could not have done directly. Given the motion judge’s conclusion that Holmes and Flynn had not made out a prima facie case, and so accordingly should not be granted leave nunc pro tunc, this was sufficient to also dispose of BNG’s claim.

Kloos v. Tangas, 2016 ONCA 149

[Gillese, Hourigan and Brown JJ.A.]

Counsel:

Alfred Schorr, for the appellant

Constantine Alexiou and Ann Hatsios, for the respondent

Keywords: Commercial Law, Mortgage, Fraudulent Conveyance, Fraudulent Preference, Litigation Guardian, Doctrine of Laches, Estoppel, Perry, Farley & Onyschuk v. Outerbridge Management Ltd.

Facts:

Between 1999 and 2003, Tangas borrowed significant monies from Kloos and granted her various mortgages on his residence. In April 2001, Tangas executed a promissory note in favour of his mother for $90,000 and one month later granted her a collateral mortgage on his residence for $90,000 (“Dom Mortgage”), allegedly in return for monies she had advanced to him over the years.

Following the discharge of Kloos’ 1999 Mortgage, two of the mortgages Tangas granted her stood in third place on title, subordinate to a first mortgage to a bank and the $90,000 Dom Mortgage. Master McAfee issued a report in 2013 finding that Tangas did not make a single payment to Kloos on her loans to him from 2001 onward and that the Dom Mortgage was a fraudulent conveyance and therefore void.  The report was confirmed by Order of Justice Myers in 2014.  It is this Order that is the subject of the appeal.

Dom appealed on the basis that (1) the motion judge erred in upholding the Master’s finding that Kloos was not estopped from raising the issue of the validity of the Dom Mortgage and (2) that the motion judge erred in failing to find that Kloos’ delay in challenging the validity of the Dom Mortgage gave rise to laches.

Issues:

(1) Did the motion judge err in upholding the finding that Kloos was not estopped from raising the issue of the validity of the Dom Mortgage?

(2) Did the motion judge err in failing to find that Kloos’ delay in challenging the validity of the Dom Mortgage gave rise to laches?

Holding: No to both – Appeal Dismissed.

Reasoning:

(1) Dom contended that when Kloos took mortgages from Tangas, she was aware that they were subordinate to the Dom Mortgage. However, Kloos did not become aware of this until 2010, during discoveries in her own mortgage enforcement action. The Court thus found no merit in Dom’s argument that Kloos’ silence constituted acquiescence.

The Court also refused to accept that Dom had suffered any prejudice from Kloos’ delay in challenging the validity of the Dom Mortgage. There was no evidence regarding advances of money from Dom to Tangas and, as his mother’s litigation guardian, it was open to Tangas to locate banking records if they existed. Finally, Master McAfee did not accept Tangas’ evidence that he had borrowed money from his mother and the Court of Appeal found no basis to interfere with this finding.

(2) At the hearing, appellant’s counsel acknowledged that the timing of events brought them within the analytical framework regarding laches pursuant to Perry, Farley & Onyschuk v. Outerbridge Management Ltd., but argued that delay can amount to laches without prejudice.  However, Perry, Farley & Onyschuk v. Outerbridge Management Ltd. held that “[a] party relying on the defence [of laches] must show a combination of delay and prejudice.” Thus, delay without prejudice could not give rise to laches.

Dysart, Dudley, Harcourt, Guilford, Harburn, Bruton, Havelock, Eyre and Clyde (United Townships) v. Mohammed, 2016 ONCA 153

[Gillese, Hourigan and Pardu JJ.A.]

Counsel:

Jameel Mohammed, acting in person

Nikita Rathwell, for the responding party Her Majesty the Queen in Right of Ontario

No one appearing for the responding party the Corporation of the United Townships of Dysart, Dudley, Harcourt, Guilford, Harburn, Bruton, Havelock, Eyre and Clyde

Keywords: Vexatious Litigant, s. 140(1) Courts of Justice Act, Motion for Extension of Time to File Appeal, Res Judicata, Abuse of Process

Facts: The moving party, Mr. Mohammed, was the subject of two separate applications to have him declared a vexatious litigant. One application was brought by Her Majesty the Queen and the other by the Corporation of the United Townships of Dysart, Dudley, Harcourt, Guilford, Harburn, Bruton, Havelock, Eyre and Clyde. The applications were heard together, and Mr. Mohammed was declared a vexatious litigant pursuant to s. 140(1) of the Courts of Justice Act. Mr. Mohammed brought a motion to extend the time to file an appeal which was dismissed. Mr. Mohammed then brought another motion for the same relief which was also dismissed. A further motion to the same effect was again brought and dismissed.

Issues: Should the moving party be granted an extension of time to file notices of appeal?

Holding: Motion dismissed.

Reasoning: The matter was res judicata and the motion was an abuse of process.

First Contact Realty Ltd. (Royal LePage First Contact Realty) v. Prime Real Estate Holdings Corporation, 2016 ONCA 156

[Gillese, Hourigan and Brown JJ.A.]

Counsel:

Richard Quance, for the appellant

Eric Gionet, for the respondent

Keywords: Real Estate law, Motion for Summary Judgment, Hyrniak Principles, Finding of Fact, Real Estate Commission, Restraint Order, Marijuana Grow-op, Controlled Drugs and Substances Act

Facts:

The plaintiff/respondent (“Royal LePage”) worked with the defendant/appellant (“Prime”) on a number of real estate transactions. Prime was interested in a property in Barrie that was once a Molson Brewery but became a substantial marijuana grow-op. A restraint order was placed against it under the Controlled Drugs and Substances Act requiring the owner to obtain written consent from the Attorney General Canada before dealing with the property. This caused complications and significant delays.

The parties to the action executed three Buyer Representation Agreements covering different time frames. Royal LePage prepared an agreement on behalf of Prime for Prime to purchase the property for $7,350,000. This agreement was eventually terminated by mutual release.

The parties entered into a second agreement of purchase and sale for the Property. The vendor changed and was now First Ontario, who proposed to sell the Property under power of sale provision in its charge against the Property. This agreement closed, and Prime purchased the Property for $7,350,000. Prime refused to pay the real estate commission of approximately $92,000.

Royal LePage sued prime and brought a motion for summary judgment. Royal LePage won the motion, and was awarded approximately $100,000 plus HST, interest and costs.

Issues:

(1) Was the motion judge wrong in her application of the Hyrniak priniples?

(2) Did the motion judge err in her findings of fact?

Holding: Appeal dismissed

Reasoning:

(1) No.  The motion judge was correct in noting that on a motion for summary judgment under rule 20.04 and applying Hyrniak, first the motion judge is to determine if there is a genuine issue requiring trial based only on the evidence before her. The motion judge stated she had no difficulty making the necessary findings of fact and there was no need for a trial to reach a determination on the merits.

(2) No. The motion judge did not err in her findings of fact. The other grounds on appeal rely on the motion judge’s finding of fact, which requires defence. The motion judge gave thorough reasons for rejecting Prime’s argument that the parties terminated the representation agreement.

Gray v. Rizzi, 2016 ONCA 152

[Sharpe, Brown and Miller JJ.A.]

Counsel:

Cheryl Goldhart and Maneesha Mehra, for the appellant/respondent by way of cross appeal

Peter B. Cozzi, for the respondent/appellant by way of cross-appeal

Keywords: Family Law, Retroactive Variation Order, Divorce Act s.17, Material Change in Circumstances, Elimination of Child and Spousal Support Arrears, Overpayment of Support, Repayment Financial Hardship, D.B.S. v. S.R.G., L.M.P. v. L.S.

Facts: This appeal concerned the principles informing a retroactive variation order under s. 17 of the Divorce Act. In this case, the variation granted by the trial judge resulted in the elimination of substantial child and spousal support arrears and imposed substantial repayments from recipient to payor. Nadine Ellen Gray and Mario Rizzi were married in 1989, and had two children. Nadine commenced an application for divorce in 2003. A Final Order was made dealing with custody, access, child support, and spousal support in 2005. The Final Order granted Nadine sole custody of both children and placed Mario’s access to the children in her sole discretion. It imputed annual income to Mario in the amount of $133,000. Finally, it ordered Mario to pay monthly child support of $1,584.00, monthly spousal support of $2,874.00, all retroactive to the date of separation.

In 2009, Mario brought a motion to change the Final Order pursuant to s. 17 of the Divorce Act on the ground that Mario had experienced a material change in circumstances as a result of a significant reduction in his income. In 2014, the motion was disposed of by a Variation Order. The trial judge held that Mario had demonstrated he experienced a material change in circumstances, which justified a reduction in his child and spousal support obligations retroactive to the date of the parties’ separation. Re-calculations eliminated about $320,000 in support arrears owed by Mario. It also imposed on Nadine an obligation to reimburse Mario a significant amount for overpayment of support. On appeal, Nadine asks that the variation order be set aside and Mario’s motion to change be dismissed.  Both parties appeal from the trial judge’s cost award of $15,000 in favour of Mario.

Issues:

(1) Did the trial judge err in relying on events that pre-dated the Final Order to grant a variation?

(2) Did the trial judge err in making retroactive adjustments to Mario’s child support obligations?

(3) Did the trial judge err in making retroactive adjustments to Mario’s spousal support obligations?

(4) Did the trial judge err in awarding Mario costs of $15,000?

Holding: Appeal allowed. Portions of child and spousal support obligations in the Variation Order set aside. In their place, order granted varying the Final Order. Costs granted to Nadine Ellen Gray.

Reasoning:

(1) Yes. The trial judge improperly relied on events that pre-dated the Final Order to conclude that Mario had met the threshold for a variation of support under the Divorce Act s.17. In so doing, the trial judge committed an error in principle. The trial judge also improperly reviewed the correctness of the Final Order by impermissibly substituting her view about what order should have been made at first instance. The trial judge further erred in accepting that a motion to change is available to a payor on the basis of financial information that is new to the court simply because the payor had failed to meet his prior financial disclosure obligations. However, the trial judge properly considered all of the evidence and made no errors in calculating Mario’s income for the period 2006 – 2012. It was clear from her findings that Mario experienced a significant and sustained reduction in his annual income that constituted a material change in Mario’s means and circumstances, meeting the threshold for a variation of the Final Order during that time period.

(2) Yes. In D.B.S. v. S.R.G, the Supreme Court of Canada identified four factors that a court should consider before making a retroactive child support order: (i) the reason why a variation in support was not sought earlier; (ii) the conduct of the payor parent; (iii) the circumstances of the child; and (iv) any hardship occasioned by a retroactive award. Although the factors require some minor alteration to suit circumstances where the payor’s income has gone down, not up, the fundamentals still apply.  Accordingly, the trial judge erred in principle in concluding that she need not consider the factors identified in D.B.S. Although the evidence supported the conclusion that Mario’s change in circumstances contributed, to an extent, to his inability to make all ordered support payments, the evidence did not support a finding that Mario would not be able to pay the arrears in the future. By not considering the D.B.S. factors in the variation analysis, the trial judge erred in failing to advert to the fact that the elimination of support arrears would require Nadine to repay Mario a substantial amount of the support previously paid, causing financial hardship. Mario was not entitled to any retroactive variation of his child support obligations for his daughter. However, Mario was entitled to variation in child support for his son after 2010 when he started receiving ODSP payments.

(3) Yes. In L.M.P. v. L.S. the Supreme Court of Canada enunciated the approach courts should take to motions to vary spousal support under the Divorce Act by stating that any variation should properly reflect the objectives set out in s. 17, take account of the material changes in circumstances, and consider the existence of a separation agreement and its terms as a relevant factor. The trial judge erred in principle by holding that L.M.P. did not apply because there was no separation agreement, and thereby terminating spousal support. Nadine’s income history indicated that by 2011 she had overcome the economic disadvantages she suffered from the break-down of the marriage and had achieved a level of economic self-sufficiency. There was no basis for retroactively varying Mario’s spousal support obligations before 2012. His delay in pursuing the variation application, his failure to make timely financial disclosure, and his failure to co-operate with the support enforcement agencies, all worked against any earlier retroactive variation date.

(4) Yes. Although there was mixed success by the parties on the issues on this appeal, in the result Nadine was relieved of the obligation under the Variation Order to reimburse Mario for support previously paid, and Mario remained under an obligation to pay substantial, but reduced, support arrears. Given that result, Nadine was entitled to some costs of the motion to change and the appeal. Costs were awarded at $10,000 for the motion to change and $7,500 for the appeal.

2274659 Ontario Inc. v. Canada Chrome Corporation, 2016 ONCA 145

[Strathy C.J.O., LaForme and Huscroft JJ.A.]

Counsel:

Neal Smitheman, for the appellant

Paul Schabas, Robin Linley and Iris Antonios, for the respondent

John Kelly and Michael Burke, for the intervener

Keywords:  Standard of Review, Correctness, Remedy, Palpable and Overriding Error, Mining Act, S. 50(2), S. 51(1), Statutory Interpretation

Facts: The respondent wanted to build a publicly-accessible road leading to its proposed mine in northern Ontario. The road would cross 108 of the appellant’s mining claims. To obtain the right to build on those claims, the respondent applied to the Minister of Natural Resources under s. 21 of the Public Lands Act for a disposition of the surface rights over portions of the appellant’s claims. It also sought an easement over Crown lands to permit it to build the road. The respondent asked the appellant to consent to an easement. When the appellant refused, the Minister of Natural Resources referred the application to the Mining and Lands Commissioner (the “MLC”) under s. 51(2) of the Mining Act. The MLC dismissed the application, and the respondent appealed as of right under s. 133 of the Mining Act. The Divisional Court allowed the appeal, finding the MLC’s decision, and its interpretation of the Act, were unreasonable. Rather than remit the matter to the MLC, the Divisional Court made an order dispensing with the appellant’s consent.

Issue:

Did the Divisional Court correctly find that the MLC’s decision was unreasonable?

Holding: Appeal dismissed.

Reasoning: Yes, the Divisional Court correctly found that the MLC’s decision was unreasonable. The interpretation given to ss. 50(2) and 51(1) of the Mining Act by the Divisional Court was the only reasonable interpretation of those sections. The Divisional Court properly considered the legislative history and purpose of those provisions. The Divisional Court was correct to hold that it was unreasonable for the MLC to have considered whether the proposed easement to build a road would interfere with the appellant’s plan to build a railway because the appellant could not claim priority for that project under s. 51(1). The Divisional Court was also correct in holding that the application would have been allowed if the Act had been applied in a reasonable manner, since there was no evidence that the proposed easement would interfere with the appellant’s exploration or mining of its claims. The Divisional Court applied the correct legal principles in deciding to substitute its own decision for that of the tribunal’s and did not commit any palpable and overriding errors.

Spylo v. Spylo, 2016 ONCA 151

[MacPherson, van Rensburg and MilleRensburg JJ.A.]

Counsel:

Brendan Donovan, for the appellants

Jamie Spotswood, for the respondents

Keywords: Estate Law, Trusts, Secret Trust, Lack of Evidence, Judicial Impartiality, Apprehension of Bias

Facts:

The respondent, Gordon Spylo, was named an estate trustee for his parent’s estate following their death.  Gordon and his sister Katherine were named as the beneficiaries.  The appellant, the other son Andrew Spylo, was left nothing in both his parents’ wills.

Andrew argued that a secret trust was created in his favour by the estate trustee Gordon and acquiesced by his sister Katherine.  Andrew also claimed that he had a right to the surplus proceeds from the sale of a property because Gordon held it in trust for Andrew and the appellant, Annemarie Nittel.

The appellants brought a claim against Gordon both in his personal capacity and in his capacity as the estate trustee for the estates of their parents.  The trial judge rejected these claims.

Issues:

(1) Did the trial judge err by finding that there was no secret trust in Andrew’s favour?

(2) Did the trial judge err by concluding that Gordon did not hold the Castlefield property in trust for Andrew after Gordon purchased it from Andrew?

(3) Did the intervention by the trial judge during Andrew’s testimony destroy the image of judicial impartiality?

Holding: Appeal dismissed.

Reasoning:

(1) No.  The appellants relied on evidence relating to the T3 tax forms that showed that money was paid to Andrew from each estate and that these forms which were never provided to Andrew establish the existence of a trust in his favour.  The court rejected this argument on the basis that both parties were self-represented which resulted in a significant evidentiary gap and confusing evidence.  The court found no error in the trial judge’s conclusion that the T3’s had nothing to do with the alleged secret trust.

(2) No.  Andrew provided only one document to support the existence of this trust.  The trial judge drew an adverse inference against him the basis. that he could not produce the original of this document.  The judge made no palpable and overriding error by concluding that he did not believe Andrew’s evidence with respect to the document.

(3) No.  The appellants argued that a single intervention in relation to other judgements against him by the trial judge during Andrew’s testimony “crossed the line” and destroyed the image of judicial impartiality.  This single question about other judgements did not reach the high threshold required for apprehension of bias.

Children’s Aid Society of Toronto v. L.T. (Publication Ban), 2016 ONCA 146

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

Counsel:

Reide Kaiser, for the appellant father

Caroline Handelman, for the respondent, Children’s Aid Society of Toronto

Catherine Bellinger and Herschel Gold, for the respondent, Office of the Children’s Lawyer representing the Child

Keywords: Child Protection, Motion to Dismiss for Delay, Adjournment, Best Interest of the Child

Facts:

The appellants appealed an order dismissing for delay their appeal of an order obtained by the Children’s Aid Society (“C.A.S.”) in which the appellants lost custody of their daughter.  This order was made following a trial in the Ontario Court of Justice.  The appeal was made to the Superior Court of Justice.

At the time of the dismissal for delay, the daughter was 11 years old and had been in the continuous care of a foster family since 2013. She indicated that she wants to be adopted by her foster family.

During case conferences, C.A.S. discussed the possibility that they would bring a motion to dismiss for delay. C.A.S. attempted a motion to dismiss for delay, but it was adjourned twice at the appellants’ request. The appellants’ wanted yet another adjournment, but the motion judge declined, and dismissed the appeal.

The parents appealed the motion judge’s order arguing that motion judge did not consider and apply all the elements of the test for dismissing an appeal for delay.

The motion judge decided that there was no prospect that the appeal which was scheduled to be heard in three weeks because the appellants were missing key documents (eg an appeal record, factum, and copies of transcripts). An adjournment would not have meant the appeal would be heard in three weeks, and it would have only delayed things further.

Issue: Did the motion judge turn her mind to the merits of the appeal?

Holding: Appeal dismissed.

Reasoning:

The appellants argued that the motion judge did not turn her mind to the merits of the appeal because she did not refer to them in her reasons. Unfortunately, the motion judge did not explicitly state her reasons when she dismissed the appeal for delay.

During oral argument on the appeal, the court asked the parties to address the merits of the appeal from the trial decision. The appellants’ challenges were all fact-based and counsel was unable to point to any legal errors in this regard that were “palpable and overriding.”

The motion judge’s refusal to adjourn the motion to dismiss for delay had no effect on the outcome of this appeal. Because the daughter wants to be adopted by the family, it is in the best interest of the child to bring the proceedings to a close.

Murphy v. Wheeler, 2016 ONCA 166

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

Counsel:

Kevin Sherkin and Ryan Wozniak, for the appellant 1269825 Ontario Inc.

Michelle Murphy, acting in person

James McReynolds, for the respondent Victoria Wood (Main Square) Inc.

Keywords:   Civil Litigation, Mortgage, Equitable Mortgage, Unregistered Amending Agreements, Proceeds of Sale,  Interest, Costs

Facts:

The matrimonial home of Michelle Murphy (“Murphy”) and John Wheeler (“Wheeler”) had two mortgages on it.  It was registered in Wheeler’s name.

The home was sold, and the first mortgage was paid out in its entirety. The second mortgage granted by the appellant, 1269825 Ontario Inc. (“126”), had a face value of $397,000 and interest of 0%. It was registered on title in July 2010.  At an unspecified date, though after July 2010, Victoria Wood (Main Square) Inc.’s (“VW”) obtained judgment against Wheeler and registered a writ of execution.

There were a series of amending agreements to 126’s second mortgage, none of which were registered on title. The main one increased the principal to $494,785.74 and set the interest rate at 11.75%.

The matrimonial home was placed on the market. Murphy brought an emergency motion in May 2013. The order arising from the motion provided for payment from the proceeds of sale of the matrimonial home to discharge the first mortgage and to pay other expenses, and for payment of $259,500 to the respondent counsel in trust and the balance of the proceeds into court, pending further order. The order discharged from title 126’s mortgage and VW’s writ of execution, thereby enabling the sale to be completed in June 2013. The order provided that it was without prejudice to the rights of the parties and that the priorities of the parties to the funds paid in trust and into court were preserved.

The order was subsequently amended so that 126 received $397,000 from the proceeds of the sale ($259,500 of which was to come from the trust account of VW’s counsel), being the face value of the registered mortgage. The order stated that a motion could be brought to determine, among other things “126’s claims for interest under its mortgage registered against the matrimonial home” and “any and all claims to the proceeds of the sale held in court”.

On a subsequent motion (which is the subject of this appeal), the motion judge ruled against 126’s claim for the additional funds based on the unregistered amendments (about $200,000). Among other things, the motion judge relied on previous submissions made by former counsel for 126 that 126’s security was only for the registered face value of the mortgage (plus interest and costs), and that any additional amount owed to it was unsecured.

126 appealed.

Issues:

(1) Does the Appellant’s claim for principal and interest based on the unregistered  mortgage amendments trump VW’s claim as an execution creditor of John Wheeler (and whose interest arose after the second mortgage was registered), entitling the Appellant to the full amount of its claim, $599,136.74?

(2) Did the motion judge err by awarding costs to the respondent and to Murphy?

Holding: Appeal dismissed.

Reasoning:

(1) No. This submission is inconsistent with the position taken before the court in a hearing leading up to 126’s motion. In the previous hearing, the appellant’s counsel (not current counsel), expressly submitted that only the $397,000 plus interest and costs was secured by the mortgage, and that the rest was unsecured. The motion judge relied on this admission in her reasons, which the Court of Appeal held that she was entitled to do.  The previous statement, and the sharp increase in interest rate (from 0% to 11.75%) belies any serious foundation for an argument that the appellant is entitled to an equitable mortgage.

(2)  No, the costs awarded by the motion judge are deserved. By August 2014, 126 had received, on consent of the other parties, $397,000, which was precisely the full amount of its registered mortgage. Everything it has done since then in an attempt to obtain more money from these matrimonial proceedings has been unsuccessful.

Warburg-Stuart Management Corporation v. DBG Holdings Inc., 2016 ONCA 157

[Simmons, LaForme and Huscroft JJ.A.]

Counsel:

Douglas D. Langley, for the appellants

Peter I. Waldmann, for the respondent

Keywords: Contracts, Contract Interpretation, Advisory Services, Lending, Joint and Several Liability, Costs, Partial Indemnity, Summary Judgement

Facts:

The appellants retained the respondents, Warburg-Stuart Management Corporation (“Warburg”) to assist them with restructuring their financial affairs.  There were two engagement agreements signed; the building engagement agreement (to obtain mortgage financing) and the operating engagement agreement (to obtain a revolving credit facility).  Schedule A to the operating engagement agreement stated that a $12,500 retainer was required to commence “Advisory Services”.   The engagement agreements would automatically terminate 90 days after the appellants provided certain specified information and documentation to Warburg.

Warburg contacted various financial institutions with financing proposals and in March 2013, approached the appellants’ long-time lender, RBC.  On April 15, 2013, RBC responded with a proposal for refinancing with very similar terms to what Warburg had proposed.

Without informing Warburg, RBC separately delivered a term sheet to the appellants which they eventually signed.

The appellants signed the commitment letter with RBC 91 days after they purported to end their arrangement with Warburg.

Warburg brought a motion for summary judgement for its commission. The motion judge granted the summary judgment on a joint and several basis for commissions owing on the two engagement agreements, but dismissed Warburg’s action against the personal defendants.  The motion judge’s decision was appealed, and the dismissal of the personal action was the subject of a cross-appeal by Warburg.

On the underlying motion, Warburg sought substantial indemnity costs of $73,168.88 based on allegations of reprehensible conduct; or, in the alternative, partial indemnity costs to October 31, 2014 and substantial indemnity costs thereafter, totaling $70,538.79 taking account of offers to settle; or, in the further alternative, partial indemnity costs of $59,376.26.

Taking account of a number of factors, including the fact that Warburg recovered nearly 100% of the amount truly in issue, the motion judge awarded Warburg partial indemnity costs.  However, they were fixed in the amount of $65,000, inclusive of disbursements and applicable taxes.

Issues:

Did the motion judge err in:

(1) Holding that the term “lender disclosed by [Warburg]” in para. 9 of the engagement agreements could include the appellants’ long-time lender, RBC?

(2) Calculating the amount owing to Warburg?

(3) Ordering that the appellants are jointly and severally liable?

(4) Awarding higher costs than Warburg sought on a partial indemnity basis?

(5) Giving the appellants credit for $12,500 on account of the initial retainer for Advisory Services?

(6) Dismissing the action against the personal defendants?

Holding: Appeal and cross-appeal allowed in part.  

Reasoning:

(1) No.  The motion judge’s interpretation of the phrase “lender disclosed by [Warburg]” was neither strained nor inconsistent with the rest of the contract.  The appellants argued that RBC was not disclosed to them by Warburg because RBC had been their long-time lender and was well known to the appellants.  There were many potential lenders well known to the appellants. Warburg’s role was to obtain financing proposals and it was by reporting on the willingness of the lender to make a financing proposal that it “disclosed” the lender to the appellants.  RBC fell within the definition of “lender disclosed by [Warburg]” on the basis that before Warburg’s involvement, the appellants were not aware that RBC was willing to make a financing proposal to them; this occurred as a result of Warburg’s efforts.

(2) Yes.  The appellants argued that the motion judge erred in two ways in calculating the amount owing to Warburg.

The court disagreed that the motion judge erred in finding that commission was owed to Warburg on loans that had been fully advanced by RBC years earlier instead of on only the new facilities obtained under the 2013 agreement.  RBC made a fresh financing decision for all loan facilities it provided, and Warburg was entitled to commission on these.

However, the motion judge did err in determining the amount owed in calculating commissions on what Warburg titled “Free Cash” in its claim.  The “Free Cash” involved the increase of the portion of an operating loan that was not subject to margins.  Since the amount was part of the operating loan on which commission had already been calculated, the additional commission awarded by the motion judge amounted to double-counting.

(3) Yes.  The motion judge provided no reasons in ordering the appellants jointly and severally liable, and the court could see no basis for this decision.  Liability should be restricted to the contracting parties under each agreement.

(4) Yes.  The appellants submitted that the motion judge erred in awarding higher costs than Warburg sought on a partial indemnity basis.  Taking into account the reduction made to the amount Warburg recovered, the court reduced the costs awarded to Warburg to the amount claimed for partial indemnity costs.

(5)  No.  Warburg did not terminate the engagement agreement and therefore cannot rely on the provision that they allege entitled it to terminate the agreement and treat as forfeit all amounts paid under the agreement if the appellants did not disclose all relevant facts.

(6) Yes. The order dismissing the action against the personal defendants should be set aside, as on the basis that the summary judgement motion did not address this issue.

 

Civil Endorsements

M.M. v. de Souza, 2016 ONCA 155

[Simmons, LaForme and Huscroft JJ.A.]

Counsel:

M.M., acting in person

Mercedes Perez, appearing as amicus curiae

Keywords: Incapacity, Standard of Review, Amicus Curiae, Sawdon Estate v. Sawdon

Bryce v. Bryce (Costs), 2016 ONCA 159

[Sharpe, Cronk and Miller JJ.A.]

Counsel:

Karen Bryce, acting in person

Michael J. Polisuk, for the respondent

Keywords: Matrimonial Home, Family Law, Proceeds of Sale, Child Support, Spousal Support

Conway v. The Law Society of Upper Canada (Costs),  2016 ONCA 163

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

Counsel:

David Robert Conway, in person

Brendan van Niejenhuis, for the respondent

Keywords: Order to Strike, Costs

 

Criminal Decisions

R. v. Darteh, 2016 ONCA 141

[Doherty, Cronk and LaForme JJ.A.]

Counsel:

Janani Shanmuganathan, for the appellant

Michael Medeiros, for the respondent

Keywords: Criminal Law, Assault, Arbitrary Detention, Charter of Rights and Freedom, s. 9, s. 24(2), Appeal Dismissed

R. v. Hawley, 2016 ONCA 143

[Doherty, Cronk and LaForme JJ.A.]

Counsel:

Sam Scratch, for the appellant

Karen Papadopoulos, for the respondent

Keywords: Criminal Law, Manslaughter, Neglect, Abuse, Sentencing, Aggravating Factors, Pre-Sentence Custody, Credit for Time Served, Appeal Allowed, Sentence Varied

R. v. Jean, 2016 ONCA 137

[MacPherson, Tulloch and Benotto JJ.A.]

Counsel:

Frantzy Jean, in person

Delmar Doucette, duty counsel

Robert Hubbard, for the respondent

Keywords: Criminal Law, Possession of Restricted Firearm, Pre-Sentence Custody, Credit for Time Served, Appeal Allowed in Part

R. v. Jupiter, 2016 ONCA 144

[Doherty, Cronk and LaForme JJ.A.]

Counsel:

Lisa Mathews, for the appellant

Elizabeth Bingham and Gary Grill, for the respondent

Keywords: Criminal Law, Search and Seizure, Canadian Charter of Rights and Freedoms, s. 24(2), Appeal Dismissed

R. v. McGill, 2016 ONCA 139

[Gillese, Watt and Tulloch JJ.A.]

Counsel:

Benita Wassenaar, for the appellant

Frances Brennan, for the respondent

Keywords: Criminal Law, Fraud, Ponzi Scheme, Sentencing, Conditional Sentence, R. v. Dobis, Leave to Appeal Sentence Granted, Appeal Allowed, Trial Sentence Varied

R. v. Lapps, 2016 ONCA 142

[Doherty, Cronk and LaForme JJ.A.]

Counsel:

Daniel C. Santoro, for the appellant

Roger A. Pinnock, for the respondent

Keywords: Criminal Law, Possession, Evidence, Trafficking, Mistrial, Unsafe Verdict, Jury Charge, R. v. W. (D.), Appeal Allowed

R. v. Oswald, 2016 ONCA 147

[Doherty, Cronk and LaForme JJ.A.]

Counsel:

Kim Schofield and Melina Macchia, for the appellant

Michael Medeiros, for the respondent

Keywords: Criminal Law, Robbery, Evidence, Identification, Curative Proviso, Appeal Dismissed

R. v. McFarlane, 2016 ONCA 158

[Sharpe, Benotto and Huscroft JJ.A.]

Counsel:

Mark Halfyard, for the appellant

Lucas Price, for the respondent

Keywords: Criminal Law, Drug Trafficking, Possession of Ammunition, Possession of Proceeds of Crime, Evidence, Circumstantial Evidence, R. v. Bui, 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 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

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