Canada: Top 5 Civil Appeals from the Court of Appeal (May 2013)

Last Updated: May 23 2013
Article by Carolyn Brandow
  1. Stevens v. Stevens, 2013 ONCA 267 (Weiler, Sharpe and Rouleau JJ.A.), April 29, 2013
  2. Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2013 ONCA 254 (Winkler C.J.O., Weiler and Laskin JJ.A.), April 25, 2013
  3. Amato v. Welsh, 2013 ONCA 258 (heard by O'Connor A.C.J.O., Simmons, and Cronk JJ.A.; judgment by Cronk and Simmons JJ.A.), April 24, 2013
  4. Orfus Estate v. The Samuel and Bessie Orfus Family Foundation, 2013 ONCA 225 (Laskin, Sharpe and Epstein JJ.A.), April 10, 2013
  5. Goodwin v. Olupona, 2013 ONCA 259 (Laskin, Blair and Epstein JJ.A.), April 25, 2013

1.  Stevens v. Stevens, 2013 ONCA 267 (Weiler, Sharpe and Rouleau JJ.A.), April 29, 2013

At issue in this decision was the validity of a marriage contract.

During reconciliation efforts, the respondent wife's lawyer prepared a marriage contract to provide for what would happen in the event the reconciliation failed.  The respondent had invested a significant amount of inherited money into the matrimonial home.  In her covering letter, the respondent's lawyer stated that the agreement was that the appellant husband would receive one-half of the value of the home.  However, the written agreement, which was later executed by the parties, actually stated that the appellant would receive one hundred percent of the value of the home.  When the reconciliation attempt failed, the appellant commenced proceedings to enforce the contract. At trial, the respondent sought rectification, which the husband resisted. 

The trial judge concluded that there was no enforceable agreement in part because there was no meeting of the minds as to its essential terms including the issue of the split of the value of the home.  There was no agreement that the appellant would receive the entire value of the home.  Rather, the written contract contained a drafting error.

Before the Court of Appeal, the appellant now asked for rectification.  The Court held that the remedy of rectification could not be open to the appellant on appeal as it was completely inconsistent with his position and the evidence he led at trial.  The appellant was not permitted to ask the court "to rectify an agreement to reflect terms he swore he did not agree to." To allow the appellant to seek rectification on appeal would be "fundamentally unfair" to the respondent.

The Court also rejected the appellant's claim that the trial judge placed undue reliance on his matrimonial misconduct.  Any discussion of the context in which the agreement was written would inevitably include reference to the parties' conduct as the case revolved around the fact that the marriage was falling apart.  The trial judge stated in his judgment that he found the appellant's conduct could not be connected to the issue of whether the marriage contract should be set aside.  The Court of Appeal was satisfied that the trial judge's finding on the issue of the lack of a meeting of the minds did not rest upon any misuse of the evidence of matrimonial misconduct.

The Court also briefly addressed the costs awarded by the trial judge, noting that while the award "pushes reasonableness and proportionality to their limits", the appellant failed to demonstrate grounds for intervention. The trial judge was permitted to consider the appellant's conduct during the litigation in exercising his discretion to award costs. 

The appeal was dismissed.

2.  Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2013 ONCA 254 (Winkler C.J.O., Weiler and Laskin JJ.A.), April 25, 2013

In this decision, the Court of Appeal considered whether it was an error by the Divisional Court to refuse to award costs of an appeal in two class action proceedings when the appellants had succeeded on the substantive issue they had appealed.

The appellants, three charitable organizations that held lotteries and other fundraising activities, claimed that the respondent municipalities charged licensing and administration fees which greatly exceeded the associated costs of regulation.  The appellants sought restitution for a class of persons who paid fees to the municipalities submitting that the fees were, in effect, a tax imposed by the municipalities in the absence of legislative authority and, as such, ultra vires the municipalities.

At the certification motion, the motion judge certified the proceedings as class actions, but limited the scope of the class to those persons whose claims were not prima facie barred by the Limitations Act, 2002, S.O. 2002, c.24, Sched. B.  

On appeal, the Divisional Court found that the motion judge erred in law in limiting the size of the respective classes as the limitations issue should not have been decided on the certification motion. The Divisional Court also held that a number of other arguments raised by the respondents - which had not been addressed by the motion judge due to his finding on the scope of the class - should be referred back to the motion judge for reconsideration.  On the matter of costs, the Divisional Court appears to have believed that success was divided.  The Divisional Court ordered that the costs of the appeals and of the motions for leave to appeal be determined by the motion judge as part of the overall costs of the certification motions.  

The appellants received leave to appeal costs to the Court of Appeal.  

The Court of Appeal held that success on the appeal before the Divisional Court was not divided, but rather the appellants were entirely successful on the issue they appealed.  The appellants' success on the limitations issue created the need to address the other issues raised by the respondents.  The Divisional Court failed to consider the "general rule" and the rationale underlying it, namely that where an appeal is allowed and results in a re-hearing, the costs of the appeal should be awarded to the successful appellant and should not be dependent on the outcome of the re-hearing. The appeal was a discrete procedural step and its cost should be treated in a manner that reflects the independent and stand-alone costs of a group of litigants who want their day in court.  Further, delayed recovery would not promote access to justice, which is a goal of the Class Proceedings Act, 1992, S.O. 1992 c. 6.

The Court of Appeal held that the Divisional Court also erred in failing to provide the parties with an opportunity to make submissions on the departure from the reasonably expected procedure of the Divisional Court in making an order as to costs.  By the use of the definite article "the" before the word "court," section 131(1) of the Courts of Justice Act suggests that the court hearing the appeal should decide the costs of the appeal.  The Class Proceedings Act does not suggest anything to the contrary.  Even if the Divisional Court had the authority to make the order it did, it should not have done so as it was in the best position to make an award as to costs.  The Divisional Court had "a full appreciation of the factors to be considered" in making an award of costs in the case. 

The appeal was allowed.  Costs of the appeals and of the motions for leave to appeal to the Divisional Court were awarded to the appellants on a partial indemnity basis.

3.  Amato v. Welsh, 2013 ONCA 258 (heard by O'Connor A.C.J.O., Simmons, and Cronk JJ.A.; judgment by Cronk and Simmons JJ.A.), April 24, 2013

In this case, the Court of Appeal considered the relationship between the common law doctrine of absolute privilege and a lawyer's duty of loyalty.

The doctrine of absolute privilege is believed to protect lawyers from any action "for words spoken in the ordinary course of any proceedings before any court or judicial tribunal recognised by law" so long as the words were "uttered for the purposes of judicial proceedings by someone who has a duty to make statements in the course of the proceedings." 

In this case, the doctrine was invoked by lawyers seeking to strike out paragraphs from a statement of claim issued against them by former clients.  The impugned paragraphs detailed alleged statements and omissions by the former lawyer in the course of representing different clients in Ontario Securities Commission (OSC) proceedings.

The plaintiffs/respondents on appeal alleged that two individuals and the corporations those individuals controlled (the Mander group) orchestrated a Ponzi scheme involving unsecured loans from investors.  The appellant lawyer was retained by the Mander group, and separately by the respondents.  The appellant lawyer represented the Mander group in examinations in aid of an OSC investigation.  The respondents alleged that the appellant lawyer had an obligation to properly disclose the respondents' participation as investors in the Ponzi scheme.  According to the respondents, this would have caused the OSC to recognize the size of the Ponzi scheme and to act on it, thereby  increasing the respondents' chances of recovering their investment.  In support of their position, the respondents pleaded statements allegedly made or omitted to be made by the appellant at the OSC examinations. 

The motion judge dismissed the motion to strike the paragraphs, holding that it was preferable that a trial judge deal with the question of admissibility of certain evidence as there were other independent facts to support the claims.  The leave to appeal judge held that the issues were novel and it was a matter of importance to determine whether the duties owed to the respondents should or should not supersede the duty to other clients so as to lose the absolute privilege usually afforded.  The majority of the Divisional Court upheld the motions court judge's decision, but the dissenting judge disagreed, holding that the doctrine of absolute privilege was settled law, which allowed lawyers to give undivided attention to the client of the day to provide effective representation in quasi-judicial proceedings.

The Court of Appeal framed the issue on appeal as being whether it was plain and obvious that the absolute privilege doctrine precludes a client from asserting a cause of action against his or her lawyer for alleged breaches of fiduciary duty and the duty of loyalty based on statements made or omitted while representing different clients in a quasi-judicial proceeding.

The threshold on a motion to strike is very high.  To succeed, the Court of Appeal held that the appellants had to prove that the doctrine of absolute privilege applies to "indisputably immunize them from potential liability" for the matters alleged in the paragraphs.  The Court of Appeal commented that it was "beyond dispute" that the doctrine of absolute privilege was well-established.  The core of the public policy rationales for the doctrine is the protection of the integrity of the justice system.  The Court of Appeal noted that while the doctrine originated in protecting those in court proceedings from defamation claims for comments made in the proceedings, it was expanded in some Commonwealth jurisdictions to support immunity from negligence claims.  However, that expansion was not adopted in Ontario.

The Court of Appeal held that the courts in Ontario have "never recognized immunity from client negligence claims in respect of an advocate's conduct of litigation."   The boundaries of the absolute privilege doctrine are not firmly set.  It has deep roots, but its scope and application continue to evolve.  The Court of Appeal commented that the outcome of a conflict between the principles of absolute privilege (an "indispensible attribute of the judicial process") and a lawyer's duty of loyalty (a "defining principle") is "far from certain".  It is not inevitable that absolute privilege will overtake the lawyer's duty of loyalty.

The appeal was dismissed, thereby allowing the claims to proceed to trial.

4.  Orfus Estate v. The Samuel and Bessie Orfus Family Foundation, 2013 ONCA 225 (Laskin, Sharpe and Epstein JJ.A.), April 10, 2013

The principles from Combined Air were applied to a family dispute over the estate of Bessie Orfus, in this appeal from a motion for summary judgment.

Bessie died at the age of ninety-eight leaving an estate of nearly $20 million.  Bessie had two wills and a codicil which treated her surviving daughters differently.  The appellant Sharon Gerstein, from whom Bessie was estranged, was provided for less generously than the respondent and estate trustee Elaine Orfus, who had lived with her mother and acted as her primary caregiver.  Five years before Bessie's death, Sharon brought oppression proceedings in respect of family owned companies which involved suing both her mother and sister. The companies were wound up and Sharon received nine million dollars. Shortly thereafter, Bessie made a codicil to her two wills in which she cut Sharon out of her estate apart from a nominal $1,000 bequest.  

Sharon gave notice of an objection to the wills and the codicil.  Sharon claimed that Bessie lacked testamentary capacity, did not know and approve of the contents of the wills and codicil, and was unduly influenced by Elaine to sign the documents.  The trustees moved for summary judgment which was granted.  The motion judge found that Bessie had testamentary capacity and knew and approved of the contents of her wills and codicil, and that the execution of the documents was not procured by Elaine's undue influence.  The motion judge held that Sharon had reasonable grounds to challenge her mother's testamentary capacity and therefore made no order for costs.  Sharon appealed from the dismissal and the trustees appealed the costs.

Sharon's main submission on appeal was that the motion judge erred in granting summary judgment instead of ordering a trial of the issues.  The motion was decided two months prior to the release of the decision in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1.

The Court of Appeal commented that the decision in Combined Air marked a "fresh approach" in which the motion judge must ask: "can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?"  The question is a legal determination, reviewable on a standard of correctness.   While this motion judge did not have the benefit of the Combined Air decision, the Court of Appeal held that the motion judge's appreciation of the evidence enabled him to decide by summary judgment the issues relating to Bessie's testamentary dispositions.

While the record was "voluminous", the Court of Appeal commented that the size of the record alone is not sufficient to send a case to trial. The many witnesses gave largely consistent evidence such that the motion judge was not required to make contested findings of fact on conflicting evidence.  The motion judge only had to (and did) assess the evidence and decide whether it was sufficient to show whether Bessie had testamentary capacity and knew and approved of the contents of her testamentary documents.

The Court of Appeal held that credibility was not genuinely at issue.  Most of the witnesses to Bessie's testamentary capacity, knowledge and approval of the documents had no recollection of the events.  Sharon had virtually no relationship with Bessie and therefore had no evidence to give about her mother's testamentary capacity.  Elaine was the only witness to the codicil with any memory of its signing.

The lawyers who were the witnesses to the two wills had prepared memoranda and gave evidence that they had some concerns, but believed Bessie had testamentary capacity.  Bessie knew the value of her assets, but not all of the detail of the exact percentage of ownership in the complex ownership structure of the family companies.  The Court of Appeal held that "a competent testator does not have to know the precise make up of her estate.  She only need know in a general way the nature and extent of her property". 

The Court also rejected Sharon's other grounds of appeal concerning the admissibility of two voicemail messages from a capacity assessor who said he had the "impression" that Bessie lacked testamentary capacity, and her own evidence about her relationship with Bessie and her mother's business acumen.  The Court of Appeal  agreed with the motion judge that the two voicemail messages failed to meet either the rest for the admission of hearsay or the test for the admission of expert evidence under R. v. Mohan, [1994] 2 S.C.R. 9, largely because they were unreliable. Sharon's evidence about her relationship with her mother and her mother's lack of sophistication in business matters was inadmissible because it was not corroborated, as required by s. 13 of the Evidence Act, R.S.O. 1990 c. E.23.

While the execution of the codicil raised some suspicions due to Elaine's involvement in the preparation and execution of the document and her ultimate benefit from the contents of the codicil, the motion judge found that the estate trustees proved on a balance of probabilities that Bessie knew and approved of the contents of her codicil, and the Court of Appeal found no reason to interfere with this finding.

The Court of Appeal dismissed the appeal.

With respect to the cross-appeal on costs, the Court held that the motion judge properly considered the issue of whether Sharon had reasonable grounds to challenge Bessie's testamentary capacity.  Though an offer to settle had been made, it contained a costs component that made it less favourable than the outcome and thus was properly not considered.  The Court of Appeal denied the request for leave to appeal the costs order.  

5.  Goodwin v. Olupona, 2013 ONCA 259 (Laskin, Blair and Epstein JJ.A.), April 25, 2013

Deference to jury verdicts underscores the dismissal of this appeal of a medical malpractice action. 

The Goodwins brought a negligence action against various health professionals involved in the delivery of their son Adam.  A few days into trial, the plaintiffs settled with one defendant physician.  The trial continued as a cross-claim by the doctor against the hospital and two nurses.  At the conclusion of a 32 day trial, the jury found one of the nurses seventy-five per cent liable and the hospital twenty-five per cent liable for Adam's injuries. No negligence was found against the defendant physicians.

The nurse and the hospital appealed, arguing that the jury returned an unreasonable verdict as there was insufficient evidence to establish that any negligence on their part caused Adam's injuries.  The appellants also argued that the charge to the jury contained reversible errors.

In dismissing the appeal, the Court of Appeal reiterated the well-established principle that a jury verdict will be set aside only if it is "so plainly unreasonable and unjust as to satisfy the court that no jury reviewing the evidence as a whole and acting judicially could have reached it."

Here, the hospital argued that the jury had no basis to conclude that the hospital was negligent as no expert evidence on the hospital's standard of care had been called.  The jury concluded that the hospital had breached the standard of care in failing to provide and supervise adequately trained nursing staff and in failing to provide adequate equipment and resources in its maternity facility.  The Court of Appeal held that identifying these "fundamental" obligations - that a hospital must provide staff and facilities capable of meeting the basic needs of patients - is "well within the ken of the average juror" and as such, expert evidence was not required.  The findings by the jury were supported by evidence.  The nurse conceded that she fell below the standard of care.  With the appellants' negligence established, the appeal turned to the matter of causation.

The Court of Appeal quoted from the recent decision in Clements v. Clements, 2012 SCC 32, in which the primacy of the "but for" causation test was reaffirmed.  After noting that the "but for" test does not require "scientific evidence of the precise contribution the defendant's negligence made to the injury", and that "common sense inferences from the facts may suffice," the Court reviewed the evidence led at trial to determine whether causation had been established on the balance of probabilities. 

In this case, the Court of Appeal held that there was expert evidence upon which the jury could reasonably infer that an episode or episodes of fetal hypoxia occurred during the time the nurse was in charge of the labour and delivery of Mrs. Goodwin, and that the expert evidence was supported by certain clinical findings to which the expert referred in his evidence.  The Court of Appeal also rejected the hospital and nurse's argument that evidence was required as to the exact timing the episodes of fetal hypoxia to prove causation.  Here, the negligence of the nurse in failing to monitor fetal heart rates impaired the doctor's ability to adduce that evidence.  To adopt the appellants' position would essentially immunize nurses in similar situations, where the reason why that evidence was unavailable was the nurses' failure to adhere to the standard of care; the nurse and hospital should not be allowed to "hide behind a lack of evidence brought about by their own negligence."  The Court of Appeal concluded that there was sufficient evidence, including expert evidence, to support the jury's finding that, on a balance of probabilities, but for the appellants' negligence, it was likely that Adam's injury could have been avoided. This ground of appeal was rejected.

The appellants further claimed that the trial judge's charge to the jury was deficient.  The appellants argued that the trial judge's charge failed to properly explain the legal test for causation and of the standard of care of nurses, and failed to mention certain material facts.  The Court of Appeal reiterated that an appellate court will not hold jury instructions to a standard of perfection, but will instead focus on whether the jury would, having regard to the charge, have properly understood the law. Applying these principles, all three grounds of the appellants' argument regarding the charge to the jury were rejected. 

The trial judge had included a detailed instruction on the standard of care of a physician and the Court held that it need not be repeated again with respect to a hospital or nurse.   The instruction on the "but for" test was proper.  Finally, the Court of Appeal noted that jury instructions do not have to include reference to all of the facts and evidence, and in any event, none of the facts allegedly omitted were so material that their absence resulted in a substantial wrong or miscarriage of justice.   The Court of Appeal therefore rejected the argument that the trial judge committed a reversible error in "any aspect of his thorough instructions to the jury".

The appeal was dismissed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Carolyn Brandow
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