- Ramdath v. George Brown College of Applied Arts and Technology, 2013 ONCA 468 (MacPherson, Cronk and Rouleau JJ.A.), July 9, 2013
- Henry v. Gore Mutual Insurance Company, 2013 ONCA 480 (Simmons, Hoy and Strathy JJ.A.), July 16, 2013
- Sferruzzi v. Allan, 2013 ONCA 496 (Laskin, Gillese and Strathy JJ.A.), July 23, 2013
- Barclays Bank PLC v. Devonshire Trust, 2013 ONCA 494 (Goudge, Sharpe and Simmons JJ.A.), July 26, 2013
- Sabourin and Sun Group of Companies v. Laiken, 2013 ONCA 530 (Rosenberg, Sharpe and Gillese JJ.A.), August 27, 2013
This case sends a message to post-secondary educational institutions that, like other businesses, they have to deliver on their promises.
George Brown College's ("GBC") unsuccessful appeal arose from a common issues trial in class proceeding against GBC with respect to its representations about its graduate international business management program.
The trial judge, Belobaba J., found that GBC's program description in its course calendar negligently misrepresented the program's benefits, breaching the unfair practices provisions of the Consumer Protection Act, 2002 S.O. 2002, c. 30, Sched. A ("CPA"). The description claimed that the program would provide students "with the opportunity to complete three industry designations/certifications in addition to the George Brown College Graduate Certificate".
In reality, however, students who completed the program did not automatically receive these designations, nor were they automatically eligible to write the examinations necessary to obtain them. Graduates would, in fact, have to apply to each industry association and, in addition to writing the required exam and paying a fee, would have to take additional courses. The trial judge found that graduates would expect that, in order to obtain the industry designations, they would have to write industry exams and pay certain fees, but they also reasonably believed the GBC program contained all the necessary courses.
GBC submitted that the trial judge erred in finding that it owed a duty of care to the students. It argued that a special relationship giving rise to a duty of care would only be created if the students acted reasonably in relying on the program description, but that their understanding of the description was unreasonable.
Citing Olar v. Laurentian University (2007), 49 C.C.L.T. (3d) 257 (Ont. S.C.), aff'd 2008 ONCA 699, the Court of Appeal held that it was reasonable for students to rely on statements contained in course calendars, which are published precisely so that prospective students will rely on them. It affirmed the existence of a special relationship.
GBC also submitted that the trial judge erred in concluding that the students had made out a claim under the CPA, claiming that the students are not "consumers" as defined in s. 1 of the statute as persons "acting for personal, family or household purposes", not including those "acting for business purposes." The Court of Appeal rejected GBC's contention that students seeking academic certification in the field of business are acting for a "business purpose". It found that Belobaba J. conducted a thorough review of the legislation's underlying principles and intent, its statutory history and judicial interpretation in concluding that the students were "consumers". Like most students, they had enrolled in the program hoping that it would lead to employment.
GBC also unsuccessfully argued that, even if the program description could be considered an unfair practice, each class member was required to prove reasonable reliance on the misrepresentation before being entitled to damages for unfair practice pursuant to s. 18 of the CPA. The Court endorsed the trial judge's view that although prospective students could have found complete information about the industry designations elsewhere, it was unreasonable to expect them to independently verify the accuracy of claims made in the course calendar. Moreover, the CPA does not require proof of reliance in order to establish that there has been an unfair practice. Section 18(1) stipulates simply that a consumer who enters into an agreement "after or while a person has engaged in an unfair practice" is entitled to a remedy. Proof of reliance is not required.
This decision in favour of the respondent, Henry, turned on the interpretation of provisions of the Statutory Accident Benefits Schedule – Effective September 1, 2010, Ont. Reg. 34/10 ("SABS-2010") concerning no-fault attendant care benefits.
When Henry was left a paraplegic due to a car accident in 2010, his mother took an unpaid leave of absence from work to give him full-time care. Under SABS-2010, insurers are required to pay for "reasonable and necessary" expenses incurred by or on behalf of an insured for attendant care, subject to certain limitations. A dispute arose as to the amount payable by the appellant insurer, Gore Mutual Insurance Company, for attendant care services provided by Henry's mother.
Section 3(7)(e) of SABS-2010 provides that an attendant care expense is not "incurred by an insured person" unless the person who provided the service "sustained an economic loss" as a result of providing the service. Gore agreed that Henry's mother sustained an economic loss as a result of caring for him, but challenged whether Henry had incurred an expense for the attendant care services provided by his mother beyond the hours of paid employment which she gave up to care for him. The application judge found that the insurer's obligation to pay for attendant care benefits was not restricted to care provided during the forty-hour work week.
On appeal, Gore contended that the application judge erred in his interpretation of s. 3(7)(e) of SABS-2010 by failing to link the economic loss of the caregiver to the services provided to the insured person. It argued that Henry's mother only sustained an economic loss to the extent that she provided attendant care services during the hours she ordinarily would have worked outside of the home. Gore also claimed that requiring it to pay insureds for attendant care provided by a family member is counter to SABS-2010's objective of limiting compensation payable to family members.
Citing Monks v. ING Insurance Co. of Canada 2008 ONCA 269, 90 O.R. (3d) 689, Hoy J.A. noted the principle that insurance coverage provisions are to be interpreted broadly, while coverage exclusions or restrictions are to be construed narrowly. If the word "incurred" in s. 3(7)(e) restricts coverage, it must be interpreted narrowly.
Considering the language of s. 37(e), the scheme and logic of the statute and the fact that the legislature elected not to include a provision for calculating the amount payable to a family caregiver who sustained an economic loss, Hoy J.A. concluded that under SABS-2010, economic loss serves not as a measure of, but rather as a threshold for, entitlement to reasonable and necessary attendant care benefits. Once an entitlement is determined, the amount of the benefit is determined based on the insured's needs.
Hoy J.A. agreed with Gore that there has been some movement toward providing a check on payments to family caregivers, including SABS-2010's requirement that the Assessment of Attendant Care Needs document (or Form 1) be prepared by an occupational therapist or registered nurse, as well as the very language at issue, requiring that the caregiver has sustained an economic loss. However, Hoy J.A. rejected the argument that the intent of the statute is to limit compensation. The requirement of economic loss, Form 1 and the maximum benefits outlined in s. 19(3) and other safeguards combine to provide a check on attendant care costs.
Despite Gore's concern that the absence of a definition of "economic loss" in SABS-2010 would lead to expansive claims for attendant care benefits, Hoy J.A. declined the request that the court define "economic loss" for the purposes of the legislation. Hoy J.A. noted that in this case, with the respondent's mother's forfeiture of a full-time job in order to care for her son, the economic loss is obvious.
Gore also submitted that the application judge erred in finding that the insurer must pay all of the expenses described in the Form 1. It argued that payment in accordance with the Form 1 is not automatic and that it is entitled to request additional information in order to satisfy itself that an expense has been incurred.
Hoy J.A. agreed that s. 33(1) of SABS-2010 and the FSCO jurisprudence confirm that an insurer can indeed request information to verify that a family member has suffered an economic loss as a result of caring for the insured. Hoy J.A. noted, however, that Gore did not challenge the Form 1 and in fact agreed that the care described in the Form 1 was reasonable and necessary and provided by the respondent's mother.
The Court concluded that the Assessment of Attendant Care Needs document demonstrated that the insured required twenty-four hour care and outlined the amount payable for that care. If the care was provided by a family member who suffered an economic loss because of it, the amount payable by the insurer is not reduced in accordance with the number of hours of paid work forfeited by the caregiver.
In this case, the Court considered an issue that unfortunately affects many families – the best interests of a special needs child in the context of a proposed relocation by a custodial parent.
Anthony Sferruzzi and Jennifer Allan are divorced parents of Mason. Mason is autistic and requires constant care. Since the couple's separation in 2009, Sferruzzi has maintained sole custody of Mason. Allan has had regular access. As Mason's primary caregiver, Sferruzzi has played a greater role in his son's extensive and specialized treatment, monitoring his therapy and medication. Both parents, however, are devoted to their son, and enjoy a "loving and meaningful relationship" with him.
Caring for a special needs child has taken a financial and emotional toll on Sferruzzi, who has had to juggle Mason's full-time needs with his career as an Assistant Crown Attorney and household responsibilities. Stressed and exhausted, he has taken three leaves of absence from work and recently suffered from depression.
For several years, Sferruzzi has been involved in a relationship with Robin Packer, who lives in Pickering with their young son, Nicholas. Sferruzzi wished to move with Mason to Pickering and live with Packer and their son as a family.
Precluded by court order from moving Mason out of the Waterloo region without Allan's consent, Sferruzzi brought a motion to vary the order. Sferruzzi believed that the move would be in Mason's as well as his own best interests. Living with Packer as a family would allow them to share the financial, emotional and logistical burdens of their household. Sferruzzi felt that this would improve his own well-being, making him a better parent to Mason. He also claimed that Mason would benefit from regular contact with Nicholas, with whom he has developed a bond. Allan opposed the move, concerned that it would result in diminished contact with her son and would disrupt Mason's relationships with her family and his treatment providers. The motion judge found that the proposed relocation was not in Mason's best interests and dismissed the motion.
For the Court of Appeal, Gillese J.A. held that appellate intervention was warranted pursuant to Van de Perre v. Edwards, 2001 SCC 60,  2 S.C.R. 1014. The motion judge erred in law by placing the burden of proof on Sferruzzi. Citing the leading authority on family law mobility, Gordon v. Goertz,  2 S.C.R. 27, Gillese J.A. noted that the parent applying for a change in the custody or access order must first meet the threshold requirement of demonstrating a material change in the child's circumstances. Once this once this threshold has been met, the court must begin a fresh inquiry into the best interests of the child. The motion judge erred in approaching the motion as if the appellant had the task of persuading him that the move was in his son's best interests rather than determining himself what was in Mason's best interests under the circumstances. Gillese J.A. found that the motion judge further erred by misapprehending aspects of Sferruzzi's evidence and failing to accord Sferruzzi's views the "great respect" required by Gordon.
Gillese J.A. then turned to a consideration of the principles governing relocation. As the Supreme Court set out in Gordon, the focus is not on the interests and rights of the parents, but on the best interests of the child "in all the circumstances, old as well as new". In determining the child's best interests, the court should consider:
(a) the existing custody arrangement and relationship between the child and the custodial parent;
(b) the existing access arrangement and the relationship between the child and the access parent;
(c) the desirability of maximizing contact between the child and both parents;
(d) the views of the child;
(e) the custodial parent's reason for moving, where it is relevant to his or her ability to meet the needs of the child;
(f) disruption to the child of a change in custody; and
(g) disruption to the child due to his or her removal from family, school, and the community.
Gillese J.A. noted that the proposed relocation would reduce the frequency of Allan's access but found that the overall time that Mason spends with his mother would be roughly the same. Moreover, Sferruzzi is committed to facilitating Allan's access.
Gillese J.A. found that Sferruzzi's reasons for the move were relevant to his ability to meet Mason's needs in that "Mason will benefit from a happier, healthier and more stable custodial parent." She held that the benefits to the appellant of living with Packer as a family would extend to Mason.
On the matter of disruption to Mason due to his removal from his school, family and community, Gillese J.A. noted that due to Mason's condition, his only real contact is with his family and therapists. Allan's family would continue to see Mason, and Mason would benefit from being part of Sferruzzi and Packer's blended family and from living with his brother. With respect to school and therapy, Gillese J.A. found that Mason's daily schedule would be unchanged and that the school in Pickering would provide a similar environment to that which Mason experienced in Waterloo. Mason's treatment, and specifically his intensive behavioural intervention therapy, would be transitioned smoothly.
This case arose from a complex transaction involving asset-backed commercial paper ("ABCP") based on two credit default swaps ("CDS"). The transaction came undone as a result of the ABCP market failure in 2007.
In 2006, Devonshire, a "conduit" established as a special purpose trust to acquire and hold income-producing assets financed through the issuance of ABCP, entered into two CDSs with Barclays in a single transaction governed by several agreements, including a standard 1992 International Swaps and Association Derivatives ("ISDA") Master Agreement. Barclays was Devonshire's exclusive asset and liquidity provider. The transaction was structured with Barclays as the "credit protection buyer" and Devonshire the seller with respect to the two CDSs. Barclays paid Devonshire monthly premiums in exchange for Devonshire's promise to pay Barclays if credit losses reached certain levels.
Devonshire issued three classes of notes to its ABCP investors, including $209 million liquidity-backed Class A notes. Liquidity protection was important to the rating of the Class A notes as low risk. The Liquidity Facility signed by the parties required Barclays to provide liquidity to Devonshire when the Class A notes matured if a "Market Disruption Event" occurred.
Precipitated by problems in the ABCP market in 2007, the financial arrangements between the parties began to falter. When protracted efforts to save the relationship failed, a dispute arose about which party was entitled to terminate the arrangement and on what terms.
The agreements specified events which would entitle a party to terminate the agreement prior to the end of its ten-year term. Notably, section 6(a) of the ISDA Master Agreement provided that if an Event of Default occurred with respect to one party, the other was entitled to designate an Early Termination Date. The Agreements also enumerated a "Settlement Amount" to be determined by the Non-defaulting Party upon Early Termination.
On January 13, 2009, both parties delivered Notices of Early Termination. Devonshire claimed that Barclays breached s. 5(a)(i) of the ISDA Master Agreement by failing to provide liquidity when the market became illiquid. That provision stipulated that a failure to make a required payment is an Event of Default if not cured within three days. Meanwhile, Barclays alleged that Devonshire was in breach of s. 5(a)(vii)(2) of the ISDA Master Agreement by being insolvent. Barclays claimed that its payment of January 13, 2009 cured any default under the Liquidity Facility and allowed it to terminate the relationship on the ground that Devonshire was insolvent. Devonshire claimed that Barclays was in default and that its own Notice of Early Termination was valid.
Barclays sued, seeking declarations that it had correctly designated January 13, 2009 as an Early Termination Date and was entitled to $600 million collateral. Devonshire counterclaimed for declarations that Barclays had committed an Event of Default and that its own designation of Early Termination was valid. It sought judgment in the amount of $725 million.
The trial judge's factual findings generally favoured Devonshire. He found that Barclays made material misrepresentations and breached its obligations of good faith. The payment which Barclays claimed cured its default under the Liquidity Facility was in fact not effected when Barclays delivered its Notice of Early Termination. It therefore was not entitled to terminate. The trial judge further found that Barclays' delivery of its Notice of Early Termination constituted repudiation of the parties' agreements. Because Barclays had elected to waive Devonshire's insolvency, Devonshire must be treated as a Non-defaulting Party and was entitled to deliver its own Notice of Early Termination on the basis that Barclays was in default. Devonshire's Notice of Early Termination was valid and effective.
The Court of Appeal declined to disturb the trail judge's factual findings as Barclays failed to establish palpable and overriding error. Barclays' Notice of Early Termination was invalid. The Court noted that while Barclays was entitled to act in its own self interest, it failed "to act in a way that would not defeat or eviscerate the very purpose of the Agreements." Because Barclays delivered its Notice of Early Termination and commenced litigation against Devonshire immediately after transferring funds to Devonshire's bank in the amount of the liquidity payment, the trial judge reasonably found that the liquidity payment was not made for the purpose of curing Barclays' default "but rather in furtherance of Barclay's strategy to grab the collateral." The purported liquidity payment defeated the very objectives of the agreement. The Court of Appeal held that the evidence supported the trial judge's finding that Barclays' Notice of Early Termination was made in bad faith.
Citing its decision in Southcott Estates Inc. v. Toronto Catholic District School Board, 2010 ONCA 310, 104 O.R. (3d) 784, the Court noted that a party cannot be permitted to benefit from its own wrong. Barclays was not entitled to terminate the agreement on the grounds that Devonshire was insolvent when Barclays caused that insolvency by failing to make the liquidity payments.
The Court also upheld the finding that Devonshire's Notice of Early Termination with respect to Barclay's failure to make the liquidity payments was valid. Although Devonshire was insolvent, the Court found that nothing in the agreements precludes a party in default under another obligation from delivering a valid Notice of Early Termination if it is a Non-defaulting Party with respect to the specified Event of Default. Moreover, the trial judge correctly held that even if Devonshire was not entitled to deliver a valid Notice of Early Termination, the common law principle of repudiation resulted in the termination of the contract. Barclay's conduct constituted a refusal to perform its obligations under the agreement.
The appeal was dismissed.
In this decision, the Court of Appeal considered the duties of a solicitor representing a client who is subject to a Mareva injunction.
The respondent Carey acted for Sabourin, a financial advisor involved in off-shore securities. Sabourin was involved in protracted litigation with Laiken, a former client who alleged fraud after losing a substantial amount of money. After several unsuccessful ex parte requests for orders freezing Sabourin's assets, Laiken obtained the Mareva injunction at issue.
In addition to preventing Sabourin from disposing or otherwise dealing with any of his assets, the Mareva injunction precluded any person with knowledge of the order from preventing "the sale, disposition, withdrawal, dissipation, sale, assignment, dealing with, transfer, conveyance, conversion, encumbrance or diminishment" of the assets, and specifically included money held in "trust accounts".
Laiken brought a contempt motion against Carey, alleging that he had violated the Mareva injunction. This claim arose from a series of events involving a cheque for $500,000 sent to Carey by Sabourin. Without any instructions from his client and unable to reach him, Carey deposited the cheque in his trust account in accordance with Law Society regulations. After refusing to attempt a settlement with unrelated creditors due to the Mareva injunction, and an unsuccessful attempt to settle with Laiken, Carey deducted a sum of money for his fees and returned the funds to his client.
The Superior Court of Justice found Carey in contempt and adjourned the matter to deal with the penalty pursuant to rule 60.11 (5) and (8) of the Rules of Civil Procedure. On his second appearance before the motion judge, Carey testified that he had honestly believed that he was acting properly in returning the money to Sabourin and that he did not intend to breach the order.
He also filed an affidavit sworn by Alan Lenczner which stated that by returning the money to his client, Carey had acted in a manner consistent with good practice. The judge set aside her earlier finding of contempt, holding that she was not satisfied beyond a reasonable doubt that Carey had deliberately violated the order or that his interpretation of it was wilfully blind. Laiken appealed.
Writing for the Court of Appeal, Sharpe J.A. agreed with Laiken that the motion judge erred in setting aside her initial finding of contempt. Neither rule 60.11 nor the case law contemplates a judge revisiting and reversing a finding of contempt. In accordance with the principle of finality, parties have but one chance to present their case. Although rule 60.11 contemplates a situation where a party found in contempt is prompted to comply with an order, leading the judge to set aside the order, the contempt finding in such a case is set aside because the proceedings have had their intended effect, not because the judge has had second thoughts or because the contemnor offers a new defence.
With respect to the admissibility of the Lenczner affidavit, Sharpe J.A. found that it should have been tendered at the initial phase, but that it was not admissible in any event. The issue of whether Carey's conduct amounted to contempt turns on the interpretation of the Mareva order and the legal test for contempt. The evidence contained in the Lenczner affidavit could be relevant to the issue of sanction, but not to the determination of contempt.
Sharpe J.A. went on to consider whether Carey's conduct amounted to contempt and found that the motion judge erred in the legal test she applied to Carey's conduct. Citing Henco Industries Limited v. Haudenosaunee Six Nations Confederacy Council (2006), 82 O.R. (3d) 721 (C.A.), Sharpe J.A. noted the principle that court orders must be respected, "even if they were improperly or improvidently granted". Whatever his opinion on the outcome of his client's dispute with Laiken or on the injunction itself, Carey was bound to comply with it.
Moreover, despite alleged deficiencies in the order, Sharpe J.A. found that it was clear: it contained all necessary details; its language was not overly general; and nothing had occurred that would obscure its meaning. The motion judge had held in her initial judgment that the order "could not be clearer" and she noted that Carey's own actions in refusing to use the trust money as instructed by his client to settle with unrelated creditors demonstrated that he knew that the order was binding.
Sharpe J.A. found that despite Carey's testimony that he believed that he was acting in a manner consistent with his duty to his client and the court, his understanding of the order was flawed, disregarding the underlying premise of a Mareva order that the subject is likely to flout the process of the court. Sharpe J.A. held that in returning the funds to his client, Carey committed an act that violated both the letter and the spirit of the Mareva order. He nonetheless accepted the motion judge's finding that Carey's conduct did not amount to a deliberate or wilfully blind breach of the order.
Sharpe J.A noted that unlike criminal contempt, breach of an order is sufficient to establish civil contempt. While the act must be intentional, it is not necessary to show that it was "deliberately contumacious". Citing the decision of the Court of Appeal in Sheppard v. Sheppard (1975), 12 O.R. (2d) 4, Sharpe J.A. explained that the absence of contumacious intent may be a mitigating factor. The fact that Carey knew of the order and violated it, however, is sufficient to ground a finding of contempt. The motion judge therefore erred in law in finding that because Carey did not deliberately breach the Mareva order, he could not be found in contempt.
Despite finding that Carey was in contempt, Sharpe J.A. accepted that his actions were due simply to an error in judgment and not to any deliberate disrespect. The Court therefore held that the appropriate sanction was to require that Carey pay Laiken the costs of the contempt proceedings.
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