Canada: Court Of Appeal Summaries (November 3 – 7, 2014)

Last Updated: November 18 2014
Article by John Polyzogopoulos

Hello again for another week of Ontario Court of Appeal Summaries.  If you find these summaries useful, please feel free to go to our blog website at http://blaneyscourtsummaries.com/ where you can sign up to follow the blog and receive our weekly Friday afternoon email updates containing our latest posting for that week.

This week's topics covered by our Court of Appeal include Product Liability (appeals from jury awards of aggravated damages), Summary Judgment (genuine issue of credibility in MVA context, limitation periods and Crown Liability), Contract law (subject-matter jurisdiction in a tendering case and interpretation of use clause in a lease), Enforcement of Settlements (in the context of allegations of lack of capacity to settle) and Crown liability and the importance of complying with the strict notice requirements of the Proceedings Against the Crown Act (congratulations to Blaneys' very own Thomasina Dumonceau for her success on that matter).

Wishing everyone a nice weekend.

Zesta Engineering Ltd. v. Cloutier, 2014 ONCA 762

[Laskin, Gillese and Pardu JJ.A.]

Counsel:

Sarit Batner and Moya Graham, for the appellant

Morris Cooper, for the respondent Douglas Christie and 798068 Ontario Limited

Keywords: Costs, Leave to Appeal, Pre-Judgment Interest

Issues:

(1) Should leave to appeal from the costs order of the trial judge be granted on either of the following two bases?

(a)  Did the trial judge err in failing to award costs of the first trial against Christie on the basis that as counsel he knowingly led false evidence at the first trial?

(b) Did the trial judge err in failing to award substantial indemnity costs of the second trial?

(2)        Should an appeal from the order declining to award pre-judgment interest be granted?

Decision: Leave to appeal costs is refused.

Reasoning:

(1)(a) No.  Zesta did not plead (in the second trial) that Christie committed fraud on the court; therefore, it was not the subject of any finding.

(1)(b) No.  The trial judge was aware of the competing considerations and applied the correct test in declining to award substantial indemnity costs.

(2)  Yes.  There was no consideration that would warrant refusing to award pre-judgment interest, and it may not have been dealt with through inadvertence.

Tags: Costs, Leave to Appeal, Pre-Judgment Interest

Stilwell v. World Kitchen Inc., 2014 ONCA 770

[Gillese, Pepall and Hourigan JJ.A.]

Counsel:
P.J. Pape and S. Goudarzi, for the appellant, World Kitchen Inc.

  1. Park, for the appellant, Corning Incorporated
  2. Morrison and P.J. Cahill, for the respondents

Keywords: Negligence, Product Liability, Limitation Period, Jury Trial, Standard of Review, Aggravated Damages, Error in Charge to Jury

Facts: This case involves an appeal of the judgment of Leach J., sitting with a jury, awarding the respondents total damages of $1,157,850 for negligence related to product liability. The specific product liability claim at issue related to a pot manufactured by the appellants, World Kitchen Inc. and Corning Inc., which shattered in one of the respondent's hands and caused him significant personal injury.

Issues:

(1) Did the trial judge err in finding that the respondents' claim was not statute-barred by the six- year limitation period?

(2) Should the jury's liability finding be set aside?

(3) Should the jury's award of $25,000 in aggravated damages be set aside or added to the award for general damages?

Holding: The appeal was allowed in part and the $25,000 aggravated damages award was set aside. The appellants were found to be jointly and severally liable for the respondents' costs in the amount of $30,000.

Reasoning:

(1) No. The trial judge applied the correct legal test in his limitation period analysis- "where the identity of a potential defendant is in question, the limitation period commences when the plaintiff has, or is deemed to have, prima facie grounds to infer that the relevant acts or omissions were caused by a particular party." Indeed, the appellants even admitted that the trial judge articulated the correct legal issue when applying this test to the facts. Furthermore, there was available evidence that supported his finding that the respondents' claim was not barred by the six-year limitation period. In sum, the appellants admitted that the trial judge did not make any palpable or overriding error in his limitation period analysis, and therefore there is no basis to overturn his finding that the appellants were not barred by the limitations period.

(2) No. The appellants argued that the jury's finding of liability should be overturned because the jury's findings are inconsistent with the evidence presented at trial. This argument was ultimately rejected, as they failed to meet the very high standard of review of civil jury verdicts. Specifically, a civil jury's verdict should be set aside "only where it is so plainly unreasonable and unjust that no jury reviewing the evidence as a whole and acting judicially could have arrived at the verdict." In applying this test, the jury's verdict is entitled to a fair and liberal interpretation in light of the evidence and the circumstances. Reviewing the evidence, it was found on appeal that there was an evidentiary basis for the conclusion reached by the jury. Specifically, there was an available inference that could be drawn from the evidence that the plaintiff's wife would not have purchased the cookware which ultimately injured her husband if the appellants had placed a sufficiently clear warning label on their product. Given this evidence, the panel was not satisfied that the jury's verdict of liability was plainly unreasonable or unjust, or that it was not acting judicially.

(3) Yes. All parties conceded that the trial judge erred in his charge to the jury on the issue of aggravated damages. Specifically, he failed to advise the jury that in order to award aggravated damages, they had to be satisfied that any increased injury to the respondent had to be a result of reprehensible misconduct by the appellants. Therefore, the $25,000 award of aggravated damages should be set aside, as one can only speculate as to whether the jury would have found reprehensible conduct on the part of the appellants.

Tags: Negligence, Product Liability, Limitation Period,Jury Trial, Standard of Review, Aggravated Damages, Error in Charge to Jury

Myers-Gordon v Martin, 2014 ONCA 767

[MacFarland, LaForme and Lauwers JJ.A.]

Counsel:

Chris G. Paliare and Andrew K. Lokan for the appellant, State Farm

  1. Kirk Boggs for the respondent, Karen Martin

Keywords:

Summary Judgment; Implied Consent; Impaired Driving; Hryniak v Mauldin et al; Combined Air Mechanical Services Inc v Flesch

Facts:

In the early morning of September 26, 2009, Randy Martin drove a motor vehicle while impaired. The vehicle was owned by his mother Karen Martin. Randy struck and killed two young persons and seriously injured two others. He pleaded guilty to two counts of impaired driving causing death, two counts of impaired driving causing bodily harm and one count of leaving the scene of an accident causing bodily harm. During the plea process Randy admitted that he did not have his mother's consent to operate the motor vehicle at the time of the accident. Karen Martin also denied providing consent. An action was brought against Karen Martin on the issue of implied consent. Karen Martin moved for summary judgment dismissing the action against her. There was no evidence before the motions judge to contradict this evidence regarding consent and the motions judge dismissed the action.

Issues:

(1) Did the motions judge apply the wrong test when dismissing the action against the respondent?

(2) Did the motions judge err by not ordering a trial of the issue?

Holding:

Appeal Dismissed.

Reasoning:

(1) No. The appellant argued that by describing the test to determine whether there was implied consent as a purely subjective one, the motions judge erred, as there is an objective element to that test. The court did not accept this submission. The panel held the motions judge's reasons demonstrated that he gave careful consideration to all evidence before him. In the particular circumstances of the case where both Randy, the driver, and his mother, the owner, stated Randy did not have her consent to use the vehicle, Randy's credibility was at issue. There was no evidence before the motions judge that challenged the credibility of either witness on this point. The court held it was open to the motions judge to find that Karen Martin had met the onus and satisfied the court that Randy did not have her consent to use the automobile the night of the accident.

(2) No. When the motion was heard the Supreme Court of Canada had not yet released its judgment in Hryniak v Mauldin et al. and the motions judge relied on the Court of Appeal's judgement in Combined Air Mechanical Services Inc v Flesch, which set out a more restrictive test. In the circumstances, the motions judge was satisfied that he could decide the issue of implied consent on the motion for summary judgment. He did not err in doing so.

Tags: Summary Judgement; Implied Consent; Impaired Driving; Hryniak v Mauldin et al; Combined Air Mechanical Services Inc v Flesch

Martenfeld v. Collins Barrow Toronto LLP, 2014 ONCA 774 (Cost Endorsement)

[Doherty, Cronk and Hourigan JJ.A.]

Counsel:

Lou Brzezinski and Catherine MacInnis, for the appellants

Michael Tamblyn and Ryan Hauk, for the respondents

Keywords: Costs endorsement

Facts: By judgment of this court dated September 10, 2014, the respondents (the Martenfeld Group) were awarded their costs of this appeal, on the partial indemnity scale. The parties were invited to submit brief written submissions to the court regarding the quantum of those costs.

Held: The respondents are awarded costs of the appeal fixed in the amount of $45,000, inclusive of disbursements and all applicable taxes.

Tags: Costs endorsement

Ridel v. Cassin, 2014 ONCA 763

[Strathy C.J.O., Feldman and Lauwers JJ.A.

Counsel:

Paul Le Vay and Naomi Greckol-Herlich, for the appellants

Philip Anisman, for the respondents

Keywords: Civil Procedure, Limitation Periods, Discoverability, Securities, Trading, Tax, Capital Gains

Facts: This was an appeal of a damages award arising out of unauthorized investment trading by the appellants. The appellants argued that the action was barred by the expiration of the limitation period under s 5(1) of the Limitations Act. The respondents cross-appealed to recover their payment of capital gains tax.

Issues:

  • In analyzing discoverability, did the trial judge advert to the objective element of the test under s 5(1)(b) of the Limitations Act?
  • Did the trial judge consider whether one of the respondents had an understanding of his investments?
  • Can the respondents recover amounts they were obliged to pay in capital gains on initially profitable investment transactions pursued by the appellants?

Decision: Appeal dismissed; cross-appeal granted.

Reasoning:

  • The trial judge used the language of s 5(1)(b) in her reasons, which showed that she applied the correct test.
  • The appellant argued that in a conversation the respondent showed that he had an understanding of his investments and the ability to make inquiries with due diligence. The Court rejected that argument, finding that the trial judge took that conversation into consideration in reaching her decision.
  • The trial judge found that the claim for taxes was barred by the 2-year limitation period because it was not asserted until well after the plaintiffs had obtained professional advice on the handling of their accounts and financial losses. The plaintiff's statement of claim noted that the defendant adopted high risk strategies involving short-term trading to generate substantial capital gains. Because of this, the Court held that the claim for capital gains was not an assertion of a new cause of action, which would have been barred by the Limitations Act, but was simply a claim for additional damages arising out of an existing cause of action.

Tags: Civil Procedure, Limitation Periods, Discoverability, Securities, Trading, Tax, Capital Gains

Economopoulos (Re), 2014 ONCA 773

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

Counsel:

  1. Shillington, for the appellants Constantine (Gus) Economopoulos and 1551666 Ontario Inc.
  2. Flaherty, for the respondent Vida Prijic

Keywords:
Costs

Facts:
This was a costs order following the successful appeal with reasons dated October 7, 2014.

Holding:
Costs endorsed.

Reasoning:

Costs of the motion below ordered in favour of the appellants, fixed in the amount of $4,500, and payable out of the proceeds of the sale of the Property. Much of the time claimed by the appellants related to necessary housekeeping matters regarding the ultimate sale of the Property. Further, making the costs payable from the proceeds of the sale of the Property was fair and should encourage the sale of the Property and resolution of the underlying proceeding.

Tags:
Costs

Seanco Investments Inc v. Betovan Construction Limited, 2014 ONCA 778

[ Doherty, Blair and Tulloch, JJ.A.]

Counsel:

Barry L. Evans, for the appellant

Thomas McRae, for the respondent 1133373 Ontario Inc.

Leo Klug, for the respondent Betovan Construction Limited

Keywords:   Release of Claims, Subsequent Actions, Parties to Settlement, Meaning of Affiliate

Facts:

The appellant is entirely controlled by Mr. Yakubovicz. Another company entirely controlled by Mr. Yakubovicz was the party to a release as part of a settlement of an action in 1996. The entities bound by the release included Normart Management, its affiliates, associates and assigns.

The motion judge found that the appellant's current action was encompassed in the release.

Issues:

Did the motion judge err in finding that the appellant was an affiliate or associate of Normart?

Holding: Appeal dismissed.

Reasoning:

Having regard to the factual matrix surrounding the creation of the broadly worded 1996 releases, the control by Mr. Yakubowicz establishes the necessary connection between Normart Management and the appellant, such as to render the appellant an affiliate or associate of Normart.

Tags:   Release of Claims, Subsequent Actions, Parties to Settlement, Meaning of Affiliate

Meridian Credit Union Limited v. Vrankovic,2014 ONCA 779

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

Counsel:

No one for the appellant

Clark Peddle, for the respondent

Keywords: Withdrawal of Appeal

Facts: This was an appeal from the judgment of Justice C. Ann Tucker of the Superior Court of Justice dated December 6, 2013.

Reasoning: The respondent notified the appellant on October 31, 2014, that it was withdrawing its appeal. The appellant did not appear in court on the date schedule for the appeal.

Tags: Withdrawal of Appeal

David S. LaFlamme Construction Inc. v Canada (Attorney General), 2014 ONCA 775

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

Counsel:

Ronald W. Price and Chris Merrick, for the appellant

Andrew Gibbs and Leah Garvin, for the respondent

Keywords: Tort Law, Negligent Misrepresentation, Crown Liability and Proceedings Act, Subject-Matter Jurisdiction

Facts:

The appellant was the successful bidder on a federal contract for a dam to be built in northern Quebec. The appellant sought damages from the respondent for negligent misstatement and breach of contract on the basis that there were material misrepresentations in the tender documents. Lawsuits were started in both Ontario and Quebec. The Attorney General of Canada moved for an order striking this action because General Conditions 6 and 35 of the contract extinguished the appellant's right to claim in tort against the respondent. It also argued that the Ontario Court did not have subject-matter jurisdiction over the Crown under s.21(1) of the Crown Liability and Proceedings Act because the claim "arose" in Quebec. The motions judge struck the action for lack of subject-matter jurisdiction. He held that the appellant had also contracted out of any right to claim in tort in Ontario.

Issues:

(1) Did the motions judge err in law by determining that Quebec had subject-matter jurisdiction over the appellant's claim?

(2) Did the motions judge err in law by finding that the General Conditions of the contract extinguished the appellant's right to assert a tort claim?

Holding:

Appeal dismissed

Reasoning:

(1) No. Whether a court has jurisdiction over a matter under the Crown Liability and Proceedings Act is a question of law on which the judge must be correct. The court is required to examine the facts surrounding the claim in light of the elements of the alleged cause of action in order to decide where the substance of the claim arose. In this case the contractual claim arose in Quebec. The appellant project manager was on site in Quebec directing the work over the course of the project. Although the appellant's offices were located in Ontario, the contract was administered out of its offices in Gatineau, Quebec. The motions judge applied the correct test and did not err in his conclusion.

(2) No. The effect of General Condition 35 merged the Crown's concurrent tort liability into the contract by providing an exclusive contractual mechanism for resolving the appellant's claims, including a claim for negligent misrepresentation.

Tags: Tort Law, Negligent Misrepresentation, Crown Liability and Proceedings Act, Subject-Matter Jurisdiction

Predie v. Sprenger, 2014 ONCA 783

[Doherty, Epstein and Tulloch JJ.A.]

Counsel:

Daniel Predie, acting in person

Deborah Sprenger, acting in person

Key Words: Court Order, Wilful Violation

Facts: On appeal from the order of Justice John R. McCarthy of the Superior Court of Justice dated March 27, 2014.

Held: Appeal dismissed.

Reasoning: The motion judge correctly identified the controlling authority. He found as a fact that while compliance was "imperfect" there was no "deliberate or wilful" violation of the order.

Tags: Court Order, Wilful Violation

Of special note is the decision of Daoust-Crochetiere v. Ontario (Natural Resources), where our very own Blaneys' lawyer, Thomasina Dumonceau successfully represented the respondent.

Daoust-Crochetiere v. Ontario (Natural Resources), 2014 ONCA 776

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

Counsel:

Andrew Kerr, for the appellant

Thomasina Dumonceau, for the respondent

Keywords: Tort, Occupier's Liability, Breach of Duties, Proceedings Against the Crown Act, ss 5(1)(c) and 7, Limitations Act, 2002, Special Circumstances

Facts: The appellant's claim was in tort regarding a breach of duties attaching to ownership, occupation, possession or control of property at the respondent's boat launch at Wasaga Beach Provincial Park. As pleaded, the claim fell within the scope of ss. 5(1)(c) of the Proceedings Against the Crown Act ("PACA").  The motion judge granted summary judgment dismissing the action in tort because of the plaintiff's failure to give the ten day notice required by ss 7(3) or the sixty day notice required by ss. 7(1) of PACA.

Issues:

(1) Did the motion judge err in granting summary judgment dismissing the action?

(2) Did the motion judge err in not granting leave to amend the claim to plead breach of contract?

Decision:   Appeal dismissed.

Reasoning:

(1) No.  There was no error in dismissing the appellant's action in tort because he failed to give the ten day notice required by ss. 7(3), or the sixty day notice required by ss. 7(1) of PACA. The accident transpired on June 13, 2010, and notice was given on October 27, 2010, which was well past the ten day period.

The motion judge was also correct in rejecting the submission that the appellant could assert an over-arching tort that fell within ss. 5(1)(a) of PACA when the claim was "in respect of" a breach of the duties attaching to the "ownership, occupation, possession or control of the property". The Court referred to Latta v. Ontario (2002), 62 O.R. (3d) 7, and stated that the purpose of ss. 5(1)(c) and 7(3) of PACA was to "target occupiers' liability with a special and strict notice requirement". If the legislature intended to have a flexible approach to be taken to the notice period under PACA, the legislature would have included a similar relieving provision.

(2) No.  The motion judge found that the statement of claim was framed in tort and did not plead the facts to disclose a cause of action in contract and that it did not relate to or flow naturally from the tort cause of action that was pleaded. The statement of claim was issued on June 13, 2012, on the second anniversary of the accident, and there was no reference to a contract or a contractual claim.

The requested amendment was raised at the respondent's summary judgment motion on February 28, 2014, more than three and a half years after the cause of action arose. Therefore, the motion judge correctly refused the amendment as the claim was time barred as per the Limitations Act, 2002. The appellant argued that there would be no prejudice to the respondent. The Court rejected the argument because it presupposed that the basic limitation period in the Limitations Act, 2002 could be excused in "special circumstances" where there is no prejudice.  The court had already decided in Joseph v Paramount Caanda's Wonderland, 2008 ONCA 469, 90 OR (3d) 401 that the special circumstances doctrine did not apply to the Limitations Act, 2002.

Tags: Tort, Occupier's Liability, Breach of Duties, Proceedings Against the Crown Act, ss 5(1)(c) and 7, Limitations Act, 2002, Special Circumstances

Joseph v. Linton, 2014 ONCA 782 

[Doherty, Epstein and Tulloch JJ.A.]

Counsel:
J. D'Souza and P. D'Gama, acting in person

  1. Zasada, for the respondents K. Gill and B.M. Gill
  2. Silver, for the respondents R.J Linton and R. Jagielski
  3. Tufman, for the respondents K. Woldanska and A. Woldanska

Keywords: Rights of Appeal, Appeal Book Endorsement, Substantial Indemnity Costs

Facts: This case is an appeal of the judgment of Corbett J. dismissing the plaintiffs' earlier appeal.

Issues:

(1) Did Corbett J. err in his dismissal of the plaintiff's appeal?

Holding:

The appeal was dismissed and substantial indemnity costs were awarded to all successful parties.

Reasoning:

(1) No. Corbett J. did not err in the order he made dismissing the plaintiffs' appeal, as it was agreed that the appeal had no merit.

Tags: Rights of Appeal, Appeal Book Endorsement, Substantial Indemnity Costs

Riopelle v Trucash Rewards, 2014 ONCA 786

[Doherty, Epstein and Tulloch JJ.A.]

Counsel:

Tripodi, for the appellant

B.D. Sells, for the respondents

Keywords: Res Judicata, Costs

Facts:
This was an appeal from the order of Justice James M. Spence of the Superior Court of Justice dated March 21, 2014.

Holding:
The respondents' motion was dismissed. The appeal on the merits was dismissed. Leave to appeal on the costs order was allowed, but the appeal from the costs order was dismissed.

Reasoning:

Regarding the respondents' motion, it was difficult to separate factors to be considered on the motion without getting into the appeal itself.

Regarding the merits of the appeal, the motion judge properly held that the claims advanced in the 2012 claim were res judicata and were therefore properly dismissed or stayed as an abuse of process. To the extent that the appellant wished to pursue claims that post-dated the settlement of the 2006 action, he should do so by way of a new statement of claim. The appellant should not be allowed to "amend" his way out of res judicata by adding new claims that post-date the settlement of the 2006 action.

Regarding the costs order, the motion judge gave no meaningful reasons for his order. Litigants deserve an explanation for an order made against them beyond a cryptic reference to the "acceptability" of the opposing party's submissions. Reviewing the questions of costs de novo, costs on a substantial indemnity basis were justified. On the quantum, the appellant gave no help on the quantification of the respondents' costs. The amount claimed by the respondents was accepted.

Costs of the appeal awarded to the respondents in the amount of $20,000 inclusive of disbursements and applicable taxes.


Tags:
Res Judicata, Costs

Massicotte v Williams, 2014 ONCA 792

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

Counsel:

Philip Healey and Brian Chung, for the appellants

Pasquale Santini, for the respondent

Keywords:

Civil Litigation, Rules of Civil Procedure, Rule 26, Amendment of Statement of Claim, Pensions Act, Canadian Charter of Rights and Freedoms, Section 7, Right to Life, Liberty and Security of the Person, Charter Violation

Facts:

The appellants were denied leave to amend their statement of claim. They sought a declaration that s.30 of the Pensions Act violated s.7 of the Canadian Charter of Rights and Freedoms and is of no force and effect. The purpose of the amendments was to permit the appellants to access Mr. Williams' federal pension for the purpose of enforcing any judgment obtained at trial. The motions judge denied leave on the basis that the amendments would complicate and lengthen the proceedings and impede the timely disposition of the issues as framed.

Issues:

(1) Should the appellants be able to amend their statement of claim to include the Charter challenge?

Holding:

Appeal Dismissed.

Reasoning:

(1) No, the declaratory relief should have been sought against the federal government, not Mr. Williams, and should not be permitted. The court held the proposed amendments were premature because the issue of whether Mr. Williams' pension is exigible did not arise until after the final determination of the issues as pleaded.  The court did allow the amendments to the claim the appellants advanced against Her Majesty the Queen in right of Ontario.

Tags:

Civil Litigation, Rules of Civil Procedure, Rule 26, Amendment of Statement of Claim, Pensions Act, Canadian Charter of Rights and Freedoms, Section 7, Right to Life, Liberty and Security of the Person, Charter Violation

2249778 Ontario Inc. v. Smith (Fratburger), 2014 ONCA 788

[Blair, Pepall and Hourigan JJ.A.]

Counsel:

Tiffany Soucy, for the appellant

Andrew McCoomb, Timothy Fleming and Dana Carson, for the respondent

Keywords: Real Estate, Lease, Landlord, Tenant, Permitted Use, ATM, Fast-Food Restaurant

Facts: This is an appeal from an application judge's holding that installing an ATM in a fast-food restaurant falls within the permitted use clause in a lease. The appellant landlord leased two units to the respondent owner of a fast-food restaurant. The permitted use clause in the lease did not specifically exclude the installation of an ATM. After the lease was signed the respondent installed an ATM. A year later the appellant brought an application for a declaration that the lease did not permit an ATM on the premises and an order requiring the tenant to remove it. The application judge found that the installation of the ATM did not in any way change the purpose of the premises, which was a fast-food restaurant.

Issues: Whether the permitted use provision in a lease allows for the installation of an ATM.

Decision: Appeal dismissed.

Reasoning:

The Court held that the application judge's findings were findings of mixed fact and law, which were entitled to deference. The lease did not define fast-food restaurant; was silent on other equipment and business tools such as a cash register and a debit terminal that are critical to a fast-food restaurant and implicitly included in the permitted use of the premises; and nothing in the lease prohibited the installation and operation of an ATM. The landlord also alleged that the application judge based his decision on the "Conduct and Operation of Business" provisions of the lease. The court found that this was not the case. It concluded that there was no error of law or fact that justified appellate intervention.

Tags: Real Estate, Lease, Landlord, Tenant, Permitted Use, ATM, Fast-Food Restaurant

Dick v. McKinnon, 2014 ONCA 784

Strathy C.J.O., Feldman and Lauwers JJ.A.

Counsel:

Daniel J. Dochylo, for the appellanT

Jonathan McKinnon, for the respondent

Keywords: Settlement, Rules of Civil Procedure, Rule 49.09, Mental capacity, Rules of Civil Procedure, Rule 7.08, Subsection 2(1) of the Substitute Decisions Act

Facts: The motion judge made an order under rule 49.09 of the Rules of Civil Procedure enforcing a settlement made in 2005 between the appellant and respondents. The settlement consisted of a payment of $700,000 by the respondents in exchange for the appellant's interest in shares of Tubular Steel Inc., the corporate respondent. The appellant argued that at the time of settlement, he lacked mental capacity to consent to the settlement and instruct counsel; therefore he resisted enforcement of the 2005 settlement.

Issue: Did the motion judge err in not applying rule 7.08 of the Rules of Civil Procedure dealing with the approval of a settlement made by a person under a disability?

Decision:   The principal ground of appeal is dismissed. The Court allowed the appeal from the disallowance of interest on the purchase price of the appellant's shares. Because the shares had appreciated in value, the appellant is entitled to interest on the sum of $700,000 at the rate of 2.8% per annum.

Reasoning: No.  The appellant had not been found to be under a disability and no litigation guardian had been appointed. Pursuant to ss. 2(1) of the Substitute Decisions Act, 1992, a person who is eighteen years of age or more is presumed to be capable of entering into a contract. The Court relied on Oliveira v. Tarjay Investments Inc., [2006] O.J. No.1109, where a "solicitor of record has the ostensible authority to bind his or her clients and that opposing counsel are entitled to rely upon that authority in the absence of some indication to the contrary". The motion judge found that the appellant had received both accounting and legal advice. The appellant did not discharge the onus of proving: that he lacked capacity; that his solicitor acted without instructions; that the respondents were aware of any lack of capacity or of any limits on the solicitor's authority; or that the settlement was unfair.

Tags:   Settlement, Rules of Civil Procedure, Rule 49.09, Mental capacity, Rules of Civil Procedure, Rule 7.08, Subsection 2(1) of the Substitute Decisions Act

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Authors
John Polyzogopoulos
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This year’s program is entitled “An Analysis of Fidelity Claims for the Modern World.” The program will address important substantive and practical issues germane to today’s fidelity claims handling.

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Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions