Hello everybody. Today's edition of Blaney's OCA Summaries includes decisions in the following areas: family law, child welfare, abuse of process in a solicitor's negligence case, an interesting decision where bankruptcy law, the Execution Act, the Mortgages Act and property law all intersect to determine the priority of distribution, and a quirky decision in constitutional law regarding whether the long-standing prohibition of Catholics ascending to the throne of England is constitutional or even justiciable.

Harris v. Levine, 2014 ONCA 608
 [Blair, Pepall, Hourigan JJ.A.]
Counsel:
Joseph Markin, for the appellants
Louis C. Sokolov, for the respondent

Keywords:   Abuse of Process, Negligent Representation by Lawyer, Issue Estoppel, Collateral Attack

Facts:
 The appellant unsuccessfully appealed two convictions arising out of previous criminal proceedings. In the appeal from the convictions, he initially alleged incompetence against his former defence counsel, the respondent in this appeal, but abandoned that allegation prior to the hearing of the criminal appeal.

The appellant then sued the respondent for negligently representing him in the criminal matter. The respondent successfully moved to have the appellant's claim struck on the basis that it was an abuse of process.

Issue:
 Did the motion judge err in striking the appellant's claim for abuse of process?

Holding:
 Appeal Dismissed.

Reasoning:
 In order for the appellant's negligence claim to succeed, he would need to prove that he would have been acquitted but for the negligence of the respondent. Permitting the claim to proceed would constitute a collateral attack on his criminal convictions. This should not be permitted, particularly given that the issue of counsel's competence was not pursued on the criminal appeal. The proper course before bringing a negligence claim is to appeal or otherwise seek to set aside the convictions.

Katz v Katz, 2014 ONCA 606
 [Doherty, Simmons & Tulloch JJ.A.]
Counsel:
R. David & J. Krob, for the appellant
S. Harris, for the respondent

Keywords: Family Law, s 7 Federal Child Support Guidelines, Divorce, Divorce Order, Costs, Life Insurance, s 14(19) Family Law Act, Evidence, Family Law Rules, O. Reg. 114/99, Civil Contempt, Feinstat v Feinstat, s 34 Family Law Act, s 15 Divorce Act

Facts:
This was an appeal from a dismissal of two motions brought by the appellant for enforcement of the respondent's obligations under a divorce order. The divorce order specified that the respondent contribute to expenses for the parties' two younger children under s 7 of the Federal Child Support Guidelines, and obtain a $500,000 life insurance policy with the children designated as beneficiaries. With respect to the first motion, the respondent sought a finding of civil contempt against the respondent; with respect to the second motion, she sought an order that the appellant be entitled to obtain the required insurance and collect the premiums in the same manner as if it were child support. The motions judge dismissed both motions and made no order as to costs.

Issues: 
(1) Did the motion judge err in dismissing the appellant's enforcement motion as it related to s 7 expenses?
(2) Did the motion judge err in failing to award the appellant substantial indemnity costs of the enforcement motion?
(3) Did the motion judge err in failing to find the respondent in contempt for failing to obtain the life insurance specified in the divorce order?
(4) Did the motion judge err in dismissing the enforcement motion as it related to the appellant's obligation to obtain life insurance?
(5) Do s 34(1)(k) of the Family Law Act and s 15 of the Divorce Act permit a court to order a spouse to obtain an insurance policy to secure payment of an order following the payor spouse's death?

Holding:
 Appeal Dismissed

Reasoning:
 (1) No. In response to the motion, the respondent analyzed the appellant's s 7 claims, paid expenses that were properly documented and supported, and concluded that he complied with his obligations under s 7. The respondent did not pay claims that were not properly documented or supported. The motion judge found the respondent's analysis reasonable and the Court found no error in that reasoning.

(2) No. The appellant argued that s 51 of the divorce order provided that if the appellant was required to bring a motion to enforce s 7 expenses, she would be entitled to her costs on a full indemnity basis. The motion judge made no ruling with respect to costs. The Court did not disturb this finding, holding that the issue of costs remained within the discretion of the motion judge, despite the terms of the divorce order.

(3) No. The appellant argued that the motion judge erred in failing to find the respondent in contempt based on the respondent's failure to obtain the life insurance specified in the divorce order. At the motions court, the respondent adduced evidence of efforts he made to obtain life insurance and evidence to support the fact that he had been denied coverage because he suffered from prostate cancer. The motion judge found that the respondent made reasonable efforts to obtain coverage, but was unable to do so. The appellant sought to adduce new evidence to support the respondent's ability to obtain coverage. The Court refused to accept this new evidence because it did not comply with the technical requirements of ss 14(19) and 31(3) of the Family Law Rules, O. Reg. 114/99. It held that it was for the motion judge to determine the credibility of the respondent's evidence, and there was no basis for the Court to interfere with the motion judge's decision.

(4) No. The appellant argued that the motions judge erred in law in holding that there is no legal basis on which the appellant can insure the respondent's life and in dismissing the appellant's enforcement motion for that reason. She sought an order that would allow her to obtain the required life insurance, or alternate insurance, and to collect the premiums from the respondent as if they were child-support. The respondent argued that the material filed by the appellant was inadmissible and inadequate to support making any specific order for enforcement. The court agreed with this reasoning.

(5) Yes. Relying on Feinstat v Feinstat 2012 ONSC 5339 (Div Ct), the respondent argued that it would be unjust and unfair to enforce an obligation with which he could not reasonably comply through no fault of his own. He argued that in Feinstat the court found that while s 34 of the Family Law Act permits a court to order a spouse who already has insurance to designate a dependent as a beneficiary, s 34 does not permit a court to require a spouse to obtain or reinstate life insurance. The respondent argued that a similar reading should apply to s 15 of the Divorce Act, RSC 1985, c 3 (2nd Supp). The Court rejected the respondent's argument. Both ss 34(1)(k) of the Family Law Act and s 15 of the Divorce Act permit a court to order a spouse to obtain an insurance policy to secure payment of an order following the payor spouse's death. The Court, however, articulated several criteria that a court should consider before making such an order. These are:

  1. evidence of the payor's insurability;
  2. evidence of the amount and cost of the available insurance;
  3. the insurance amount should not exceed the total amount of support likely to be payable over the duration of the support award;
  4. the insurance should be less than the total support anticipated where the court determines that the recipient will be able to invest the proceeds of an insurance payout;
  5. the amount of insurance to be maintained should decline over time as the total amount of support payable over the duration of the award diminishes;
  6. the obligation to maintain insurance should end when the support obligation ceases;
  7. when proceeding under the Divorce Act, the court should first order that the support obligation is binding on the payor's estate.

Catholic Children's Aid Society of Toronto v. J.B., 2014 ONCA 609
 [Blair, Pepall and Hourigan JJ.A.]
Counsel:
Nancy Charbonneau, for the appellant
Rachel Buhler, for the respondent

Keywords: Family law, Custody, Best Interests of the Child, Child and Family Services Act, Crown Ward

Facts:
This appeal arises from an order of a Superior Court judge dismissing J.B.'s appeal from an order making her child a Crown ward without any access given to J.B. The child, who is four years old, had only been in J.B.'s custody for a total of six months. J.B. consented to a protection finding under s. 37(2)(b)(i) of the Child and Family Services Act, and the only issue at trial was the disposition. J.B. argued the trial judge ignored material evidence that supported her position.

Issues:
Did the trial judge make palpable and overriding errors?

Decision:
 Appeal Dismissed.

Reasoning:
 The trial judge may have overstated some of the evidence and misidentified the source; however, the errors were not palpable and overriding. Also, material evidence was not ignored. A deferential standard of review is applicable in family law cases in the context of child welfare proceedings.

Teskey v. Canada (Attorney General), 2014 ONCA 612
 [Blair, Pepall and Hourigan JJ.A.]
Counsel:
Bryan Teskey, in person
J. Sanderson Graham and David Aaron for the respondent

Keywords: Constitutional Law, Commonwealth, Royal Succession Rules, the Perth Agreement, Canadian Charter of Rights and Freedoms, s.15, Discrimination, Public Interest Standing, Justiciable Issue

Facts:
 In 2011 the Perth Agreement was entered into at a meeting of 16 Commonwealth First Ministers in Perth, Australia. It proposed changes to the royal succession rules of the British Monarchy. The Government of the United Kingdom introduced a bill to effect the changes and Canada formally provided its assent through legislation that has been passed but not yet proclaimed into force. The changes to the succession rules abolished the male preference primogeniture and removed the provision that anyone who marries a Roman Catholic is ineligible to succeed to the monarchy. However, the succession rules continue to preclude any Roman Catholic from succeeding to the throne. Mr. Teskey is a Roman Catholic who argued that this prohibition is discriminatory and contravened his rights and the rights of other Canadian Roman Catholics under s.15 of the Canadian Charter of Rights and Freedoms. Teskey brought an application seeking various forms of declaratory relief. The application was dismissed on the basis that the application did not raise a justiciable issue and the applicant did not have standing. Mr. Teskey appealed that decision.

Issues:
 1) Does the application raise justiciable issues?
2) Does Mr. Teskey have standing to bring the application?

Holding:
 Appeal Dismissed.

Reasoning:
 No to both questions. The court agreed with the reasoning of the trial judge. It noted that the rules of succession are a fabric of the constitution of Canada and cannot be trumped or amended by the Charter. The application therefore did not raise a justiciable issue. Additionally, Mr. Teskey did not have any personal interest in the issue raised, and did not meet the test for public interest standing. The application judge properly relied on the previously affirmed decision of O'Donohue v Canada which dealt with a challenge to the same succession rule.

Toronto-Dominion Bank v. Phillips, 2014 ONCA 613
 [MacFarland, Pepall and Strathy JJ.A.]
Counsel:
G.F. Camelino, for the appellant, C.L. Phillips
M. Odumodu, for the respondent, R.J. Phillips

Keywords: Bankruptcy, Division II Consumer Proposal, Bankruptcy and Insolvency Act, BIA s 66.13, BIA s 69.2(1), BIA s 66.4(1), BIA s 70(1), BIA s 69.2(4), Severance of Joint Tenancy, Execution Creditor, Unsecured Creditor, Mortgages Act s 27, Joint Debtors.  

Facts:
The appellant, Cindy Phillips, is a consumer debtor who filed a Division II consumer proposal ("proposal") under section 66.13 of the Bankruptcy and Insolvency Act ("BIA"). At the time the proposal was filed, the appellant and her respondent husband owned a residential property in Ontario as joint tenants. This property was mortgaged, and the mortgage was held by the Toronto- Dominion Bank ("TD"). Prior to the filing of the proposal, the Bank of Montreal ("BMO") obtained default judgment against both the appellant and respondent for a joint debt. It filed a writ of seizure and sale with the Sheriff, but did not execute it. Months later, the appellant and respondent defaulted on their mortgage and TD commenced power of sale proceedings. After power of sale proceedings were commenced, the appellant filed the consumer proposal.

The proposal was approved by both the court and participating creditors, including BMO. After approval TD sold the property, and a surplus of $52,295.14 remained. TD applied to pay the surplus into court less the costs of the application, leaving a final surplus of $51,545.14. The appellant and respondent agreed that a sum of $19,327.50 would be paid out of the final surplus to BMO to satisfy their joint debt, and the application judge ordered this accordingly. The application judge also ordered that after TD and BMO had been paid, the remaining balance of $32, 217.64 should be split equally between the appellant and respondent. In that proceeding, the appellant unsuccessfully argued that due to the operation of the stay of proceedings imposed by s. 69.2(1) of the BIA, 50% of the remaining balance should be paid to her, and BMO's writ should be paid out of the respondent's 50% share. Effectively, the appellant argued that the respondent should pay the entire amount of the debt owing to BMO.

On appeal, the appellant submitted that the application judge erred in finding that an execution creditor is a subsequent encumbrancer within the meaning of s. 27 of the Mortgages Act and erred in respect of BMO's right to enforce its writ against the appellant.  The appellant argued that BMO's claim against her was stayed as a result of s. 69.2(1) of the BIA.  Accordingly, BMO could only realize against the respondent's share of the residue remaining after payment to TD.

Issues:
(1) Does the filing of a consumer proposal under section 66.13 BIA stay the proceedings against the execution creditor BMO, such that it cannot execute its writ of seizure and sale against the appellant?
(2) Does court approval of a consumer proposal take precedence over the proceedings of an execution creditor to recover a claim from a debtor?
(3) Was the joint tenancy of the residential property severed by the filing of the consumer proposal, such that BMO can execute its writ only against the respondent?

Holding:
Appeal Allowed.

Reasoning:
(1) Yes. Section 69.2(1) of the BIA provides that once a consumer proposal has been filed, unsecured execution creditors are prohibited from commencing or continuing proceedings against debtors to recover claims.

(2) Yes. The BIA does not expressly state that consumer proposals take precedence over the actions of execution creditors to recover claims from debtors. However, the court interpreted section 66.4(1) of the BIA in a purposive manner and held that section 70 (1), which applies to bankruptcy proceedings, applies equally to consumer proposals. Therefore, once a consumer proposal has been filed and approved by the court, it will take precedence over the claims of execution creditors that they may have against debtors. The court here held that the policy rationale underlying section 70 (1) of the BIA supports its application to consumer proposals, which is to treat all unsecured creditors equally, after the claims of secured creditors have first been satisfied. This policy rationale is supported by the case of Forest v. Hancor Inc. As a result, BMO's claim against the appellant was stayed at the time she filed her consumer proposal, such that it could not execute its writ against any of her property.

(3) Yes. BMO could not execute its writ against the appellant, because it was stayed by operating of the filing of her consumer proposal. However, since the debt owed to BMO was joint, BMO was at liberty to recover its debt only from the respondent. Once the application judge ordered payment be made to BMO, the execution was completed and acted upon. Relying on a combination of authorities, including Halsbury's Laws of Canada, and the case of Royal & SunAlliance Insurance Company v. Muir, BMO took sufficient steps to execute its writ. At this particular point in time, the joint tenancy was severed and payment to BMO could only be made from the respondent's 50% share of the surplus.

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