Canada: Top 5 Civil Appeals From The Court Of Appeal (November 2012)

1. Georgian Bluffs (Township) v. Moyer, 2012 ONCA 700 (Sharpe, Gillese and Watt J.J.A.), October 17, 2012

When a municipality, cleaning up garbage left on a road allowance, commits a technical trespass in also picking up garbage on the property owner's land, what are the damages and who pays legal costs of the action?

This case concerns a dispute between the Township of Georgian Bluffs and the appellant, who owns a one hundred acre property in the Township.

The appellant used his property as something of a junkyard, storing discarded vehicles, construction materials and equipment on his land, some of which was dispersed over a municipal road allowance adjacent to the property. Representatives of the Township entered onto the road allowance and part of the appellant's property to remove some of these objects. The Township then added the cost of removal and cleanup to the appellant's property tax bill and commenced an action claiming an order requiring him to remove objects and debris from his property. The appellant counterclaimed for damages for trespass and conversion, punitive damages and an order removing the costs from his tax bill.

The trial judge ruled in favour of the appellant in all matters but the claim in conversion and the claim for punitive damages, and ordered what he called an "equitable resolution" whereby the appellant was entitled to retrieve three vehicles without charge and was not required to compensate the Township for its clean-up costs. The trial judge further ordered that each party bear its own costs of the action.

The appellant appealed to the Court of Appeal, seeking damages for conversion and trespass, punitive damages and leave to appeal costs award, seeking his costs of the action.

The court held that the trial judge's remedy was an appropriate one. While the Township's trespass was "not minimal", it was "not grossly intrusive" and the damage it caused to the appellant's property "negligible". Meanwhile, though the objects removed from the appellant's property were worthless, they did belong to the appellant and he was entitled to an award of nominal damages for the Township's act of conversion. By allowing the appellant to retrieve vehicles without towing or storage charges, the judgment effectively set off the clean-up, towing and storage charges against the damages for trespass. The award in conversion was subsumed in the remedy.

The court further held that there was no basis for an award of punitive damages. The Township may have been incompetent, but its conduct was not "malicious, high-handed, arbitrary, oppressive, deliberate or callous."

On the issue of costs, the court found that despite the futility of the action, it was brought by the Township and successfully defended by the appellant on the substantive issues. On that basis, the appellant was entitled to his costs. The court cited its own decision in Northwood Mortgage Ltd. v. Gensol Solutions Inc. (2005), 3 B.L.R. (4th) 322 (Ont. C.A.) in which it stated that "an order depriving a successful party of costs is exceptional".

The court granted leave to appeal the costs and awarded the appellant his costs of the trial, but otherwise dismissed his appeal.

When a client promises to pay and doesn't, and when the Solicitors Act does not apply, can the client nevertheless demand an assessment of the lawyer's bill?

McCarthy Tétrault, which acted for the appellant in his divorce proceedings, sued the appellant for unpaid legal bills. The appellant defended and counterclaimed for an order that the bills be referred for assessment. The appellant argued that failures on the part of his lawyer resulted in financial losses.

Both parties moved for summary judgment, which the motion judge granted in favour of the respondent. The appellant appealed, asking that the judgment be set aside and the accounts referred for assessment.

The court held that while the motion judge was correct in his statement of the law, he erred in his application of the facts. 

The motion judge correctly determined that due to the timing of the appellant's motion in relation to the firm's last account, the Solicitor's Act did not apply and the issue of referral of the accounts was a matter for the courts. Moreover, in accordance with Fellowes, McNeil v. Kansa Canadian Management Inc. (1997), 34 O.R. (3d) 301 (C.A.), the appellant did not have to establish special circumstances in order for the court to exercise its jurisdiction to refer the accounts for assessment.

Where the motion judge erred was in dismissing the appellant's motion on the basis that he had repeatedly promised to make payments on the account. In the view of the court, the motion judge's conclusion that the appellant's request for assessment was "disingenuous and tactical" was unsupported by the evidence.

According to the court, the facts underlying the appellant's allegations occurred during the course of the solicitor-client relationship and were known to the solicitor before the claim was initiated. In addition, the request for assessment was made prior to the commencement of the proceeding.

The court cited its own decision in Price v. Sonsini (2002), 215 D.L.R. (4^th) 376, in which it stated that public confidence in the administration of justice requires the court to intervene when necessary to protect the client's right to have a lawyer's account assessed.

The court allowed the appeal, granting the appellant's motion to have the accounts referred for assessment.  

What constitutes status as an "interested party" in a receivership and for what purposes can a party claiming that status demand third party production of documents?

In the course of proceedings brought by SA Capital Corp., a court-appointed receiver conducted an investigation of the appellant in relation to an alleged Ponzi scheme. The appellant obtained a third-party production order requiring the receiver, RSM Richter Inc., to produce materials which the appellant claimed he required in order to defend against unrelated proceedings before the Ontario Securities Commission.

The appellant appealed the order to the Court of Appeal, arguing that the Superior Court judge erred in failing to order further production. The appellant argued that he was an "interested person" in the receivership and was therefore entitled to production, and that the Superior Court has the authority to order third-party production to protect his right to make full answer and defence before the OSC. RSM Richter cross-appealed, arguing that no production should have been ordered.

The court rejected the appellant's submission that the production order was justified. The appellant was not an "interested person" in the receivership in accordance with the decision in Re Battery Plus (2002), 31 C.B.R. (4^th) 196 (Ont. S.C.J.). In that case, Greer J. defined "interested person" to include parties who have a direct interest in the subject matter of the receivership itself but expressly excluded those seeking production of documents that do not "relate to a specific purpose" concerning the receivership.

The court found that the appellant did not seek production for the purpose of any claim or interest in the receivership but instead for the purpose of his defence in separate and distinct proceedings before the OSC. Because his request was made for a purpose collateral to the receivership, the appellant was not an "interested person".

The court also noted the potential harm in compelling a court-appointed receiver to produce documents obtained in the exercise of its role in the receivership for use in a separate proceeding. Permitting "open-ended access to the fruits of their investigation" could have a chilling effect on officers of the court.

The court further rejected the appellant's submission that the Superior Court has the authority to order third-party production to protect his right to make full answer and defence before the OSC. In the view of the court, pre-hearing orders should be dealt with by the tribunal that will decide the case. A request for third-party production will lead to questions of relevance, cost and delay, and the judge or tribunal charged with deciding the case is in the best position to resolve these issues. In this case, it was up to the OSC to determine what procedural rights should be accorded the appellant.  

The court also held that what was essentially an interlocutory order by the Superior Court was a disruption to the tribunal process. The production order was inconsistent with the principle that neither appeals nor judicial review of a tribunal proceeding should occur until the proceedings have reached a conclusion.

The court dismissed the appeal and allowed the cross-appeal, ordering that the order for production be set aside.

Does s. 8 of the Charter, prohibiting unreasonable search and seizure, apply when a regulator exercises its statutory power to require production of documents in aid of an investigation that may result in loss of a professional's license?  What is the "reasonable expectation of privacy" in such circumstances?

The College of Physicians and Surgeons of Ontario has the authority to investigate and prosecute allegations of professional misconduct against its members. Pursuant to provisions of the Health Professions Procedural Code, being Schedule 2 to the Regulated Health Professions Act, 1991, S.O. 1991, c. 18, investigators appointed by the College have the power to issue summonses. This appeal addressed the constitutionality of this summons power as well as the validity of the College's investigations procedure.

The appellant Sazant practiced family and sports medicine in Toronto for nearly fifty years. In 2009, the College's Discipline Committee revoked Sazant's licence to practise medicine after finding that he had engaged in "disgraceful, dishonorable or unprofessional conduct of a sexual nature" with three boys, one of whom was a patient.

During the course of a criminal investigation into the appellant's conduct between 1991 and 2004, the College adhered to its practice of not conducting its own investigation of the allegations but of simply monitoring the progress of ongoing criminal proceedings. After the criminal charges were stayed in 2004, the College commenced an investigation.

As part of its investigation into the appellant's conduct, the College appointed investigators pursuant to s. 75(1)(a) of the Code. Section 76(1) of the Code empowers College investigators to issue, without prior judicial authorization, a summons "to any person, requiring that person to give or produce relevant evidence to the investigator." In the course of the College's investigation, one of its investigators issued summonses to the Toronto Police Service and to the Attorney General of Ontario to obtain material related to the criminal charges that were laid against the appellant.

At the Discipline Committee hearing, the appellant challenged the constitutional validity of the summons power contained in s. 76(1) of the Code and requested a stay of proceedings on the basis of abuse of process due to the length of time it took the College to investigate and prosecute the allegations. The Discipline Committee dismissed both requests. The appellant appealed unsuccessfully to the Divisional Court.

At issue before the Court of Appeal were whether s. 76(1) of the Code violates s. 8 of the Charter and whether the discipline proceedings constituted an abuse of process. 

Writing for the court, Simmons J.A. rejected Sazant's submission that the s. 76(1) summons power violates s. 8 of the Charter when used by investigators under s. 75(1)(a) of the Code.  Simmons J.A. explained that, contrary to the appellant's assertion that that summons power is overbroad and unrestricted, a proper interpretation of the relevant provisions demonstrates that the power is reasonable and properly constrained by "the requirement that it be used solely to obtain information that is relevant to a duly authorized investigation into specified professional misconduct..."

Moreover, the summons power was triggered by the appointment of investigators under s. 75(1)(a) of the Code, which requires that the Registrar have reasonable and probable grounds to believe that the member has committed an act of professional misconduct. It is only those alleged acts that are subject to the investigation. Read together, s. 75(1)(a) and s. 76(1) confer a limited power, restricting the scope of the investigation to acts that the Registrar had reasonable and probable grounds to believe were committed by the member.

Simmons J.A. also rejected the appellant's arguments with respect to privacy, noting that for the purposes of s. 8 of the Charter, it is the claimant's reasonable expectation of privacy that defines the scope of protection. Simmons J.A. wrote:

"In the context of a self-governing professional regulatory scheme where the regulator has reasonable and probable grounds to believe that a member has committed an act of professional misconduct, a member has a limited expectation of privacy in relation to an authorized investigation."

Further, given that s. 76(3.1) of the Code stipulates that a member has a professional duty to cooperate with an investigation into professional misconduct, a member's expectation of privacy concerning the investigation is a tenuous one. 

Simmons J.A. concluded that the Divisional Court correctly held that the s. 76(1) summons power, as it arises in the context of investigators appointed under s. 75(1)(a) of the Code, does not contravene s. 8 of the Charter.

On the issue of the delay, Simmons J.A. noted that, as Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, [2000] 2 S.C.R. 307 makes clear, the passage of time does not alone give rise to an abuse of process. The reviewing court must take into account all of the circumstances surrounding the delay.

Simmons J.A. deferred to the finding of the Discipline Committee that it would have been impractical and unfair to the appellant for the College to pursue misconduct charges before the criminal proceedings were resolved. Simmons J.A. further agreed that the appellant failed to demonstrate that the delay had caused him suffering such that the disciplinary proceedings would bring the administration of justice into disrepute.

The court dismissed the appeal.  

5.  Duchesne v. St-Denis, 2012 ONCA 699 (Weiler and Sharpe JJ.A., and Mackinnon J. (ad hoc)), October 17, 2012

Kids, don't try this at home.

This case considers the tangle of principles that ensues when the transition provisions for the application of the two year limitation period under the Limitations Act must be interpreted in light of discoverability issues about the identity of tortfeasors, and where the plaintiff was a minor at the time of the alleged negligence. 

In 2002, when the appellant was fifteen years old, he suffered a severe injury while playing with friends at the home of the defendants, St-Denis. Although he initially declined to pursue legal action and instead focus on his recovery, the appellant eventually brought a claim against the defendants in 2006, eight days before his twentieth birthday and the expiry of a two year limitation period from the age of majority. In 2009, the appellant moved to amend his claim to include his friends Gauvreau and Bedard as defendants.

This case turned on whether the appellant's claim against Gauvreau and Bedard was discovered or discoverable prior to January 1, 2004, when the Limitations Act, 2002, S.O. 2002, c. 24, came into force. If the appellant's claim was discoverable prior to January 1, 2004, then the former Limitation Act applied and the appellant had six years from attaining the age of majority to add Gauvreau and Bedard as parties. But if his claim was only discoverable when he attained the age of majority after January 1, 2004, a two year limitation would apply, rendering him out of time.

A single judge of the Divisional Court upheld Master Beaudoin's dismissal of the appellant's motion. The appellant appealed to the Court of Appeal.

Master Beaudoin had concluded that the appellant had not discovered his claim against Gauvreau or Bedard by January 1, 2004. The appellant knew that he may have claims against "a bunch of people", but he was not aware of any acts or omissions on the part of his friends that may have caused or contributed to his injuries.

Writing for the court, Mackinnon J. noted that key to this finding was the appellant's admission on examination that in 2004 he knew that he had a case but not specifically against whom. Mackinnon J. held that the Divisional Court's reliance on Placzek v. Green, 2009 ONCA 83, 307 D.L.R. (4th) 441, was inconsistent with the decision in Alexis v. Toronto Police Service Board, 2009 ONCA 847, 100 O.R. (3d) 232, in which the Court of Appeal held that "the absence of clear legal advice as to the identity of a particular proposed defendant was not sufficient to delay the running of the limitation period."

Mackinnon J. explained that more analogous to the facts at bar was the recent case of Kowal v. Shyiak, 2012 ONCA 512, in which the Court of Appeal held that:

"Certainty of a defendant's responsibility for the act or omission that caused or contributed to the loss is not a requirement. It is enough to have prima facie grounds to infer that the acts or omissions were caused by the party or parties identified. ..."

In Mackinnon J's view, the lower courts erred in their interpretation of the case law with regard to the requirements for actual knowledge. The jurisprudence supports the notion that actual knowledge of his claim against the third parties does not necessitate the kind of legal advice that would have enabled the appellant to definitively determine their liability. "[K]nowlege of legal consequences that flow from known facts...may assist in the acquisition of actual knowledge of a claim, but it is not a requirement."

Therefore, the finding of the lower courts that the appellant did not have actual knowledge of the claim before January 1, 2004, was based upon an incorrect view of the law.

Mackinnon J. further held that the Divisional Court erred in failing to address whether the claim was discoverable by a reasonable person with the appellant's abilities and in his circumstances. Master Beaudoin found that, as a minor, the appellant could not be deemed to have discovered his claim pursuant to s. 5(1)(b) of the Act.

Mackinnon J. held that the lower court incorrectly interpreted St. Jean and Serban Estate (Re), (2009) 48 E.T.R. (3d) 78 and Murphy v. Welsh, [1993] 2 S.C.R. 1069, neither of which actually concluded that discoverability of a minor's claim can only apply to a litigation guardian.

In Mackinnon J's view, the question of discoverability was mistakenly conflated with the matter of when a limitation period involving a minor starts to run. On a plain wording of ss. 5(1)(a) and (b), it was an error of law for the lower courts not to have addressed whether the claim was discoverable by a reasonable person with the appellant's abilities and in his circumstances.

The court allowed the appeal, granting leave to add the third party defendants, but remitting the limitation issue and the question of discoverability to the trial judge.

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