Canada: Top 5 Civil Appeals From The Court Of Appeal (January 2015)

Last Updated: January 26 2015
Article by Stuart Zacharias

The Court of Appeal, as always, finished 2014 with a flourish, releasing several important decisions. This month's netletter summarizes decisions dealing with the justiciability of a Charter claim regarding homelessness, how broadly contractual indemnities for personal injury should be interpreted, whether the non-consensual disclosure of a mortgage discharge statement breeches PIPEDA, the standard of a municipality's duty to repair roads and, in particular, whether there is a distinct standard for "rural drivers" and the extent to which absolute privilege applies to a defamation action against a Law Society investigator.

1. Tanudjaja v. Canada (Attorney General), 2014 ONCA 852 (Feldman, Strathy and Pardu JJ.A.), December 1, 2014

2. Neely v. MacDonald, 2014 ONCA 874 (Blair, Pepall and Lauwers JJ.A.), December 8, 2014

3. Royal Bank of Canada v. Trang, 2014 ONCA 883 (Hoy A.C.J.O., Laskin, Sharpe, Cronk and Blair JJ.A.), December 9, 2014

4. Fordham v. Dutton-Dunwich (Municipality), 2014 ONCA 891 (Laskin, Rouleau and Lauwers JJ.A.), December 11, 2014

5. D'Mello v. The Law Society of Upper Canada, 2014 ONCA 912 (Weiler, Feldman and Benotto JJ.A.), December 22, 2014

1. Tanudjaja v. Canada (Attorney General), 2014 ONCA 852 (Feldman, Strathy and Pardu JJ.A.), December 1, 2014

In this case, the Court of Appeal considered the justiciability of a novel claim under the Canadian Charter of Rights and Freedoms.

The appellants, four individuals suffering from homelessness and inadequate housing, and The Centre for Equality Rights in Accommodation, a non-profit organization dedicated to human rights in housing, brought an application for relief under the Charter. They alleged that actions and inaction on the part of the governments of Canada and Ontario had "created and sustained conditions which lead to, support and sustain homelessness and inadequate housing", in violation of s. 7 and s. 15. 

The appellants did not challenge any particular legislation or policy, but rather submitted that the federal and provincial governments' approach to housing – ranging from cancelling funding for the construction of new social housing to failing to implement a rent supplement program – have created social conditions which violate their rights to adequate housing. They claimed a wide range of remedies, including a declaration that Canada and Ontario have obligations pursuant to s. 7 and s. 15 of the Charter to implement effective strategies to reduce and ultimately eliminate homelessness and inadequate housing, and an order that the federal and provincial governments meet these obligations. 

The motion judge struck the application, without leave to amend, finding that it was plain and obvious that the application did not disclose a viable cause of action and that it had no reasonable prospect of success. He also found that the issues raised by the application were not justiciable and that the implementation of the relief sought would "cross institutional boundaries", encroaching on legislative territory.  

Writing for the Court of Appeal, Pardu J.A. agreed with the motion judge that the appellants' claim was not justiciable. The Supreme Court emphasized in Canada (Auditor-General) v. Canada (Minister of Energy, Mines & Resources), [1989] 2 S.C.R. 49, that "[a]n inquiry into justiciability is, first and foremost, a normative inquiry into the appropriateness as a matter of constitutional judicial policy of the courts deciding a given issue, or instead deferring to other decision making institutions of the polity." This application, which Pardu J.A. characterized as essentially an assertion that the governments of Canada and Ontario have failed to give sufficient priority to issues of affordable housing and homelessness, was not an appropriate matter for the courts. 

Pardu J.A. noted that an "archetypal feature" of Charter challenges under s. 7 and s. 15 is the challenge to a particular law or particular application of a law. As the Supreme Court held in Re Canada Assistance Plan, [1991] 2 S.C.R. 525, "the Court must determine whether the question is purely political in nature, and should therefore be determined in another forum or whether it has a sufficient legal component to warrant the intervention of the judicial branch." In this case, unlike in Canada (Attorney General) v. PHS Community Services Society, 2011 SCC 44, where a specific state action was challenged, and in Chaoulli v. Quebec (Attorney General), 2005 SCC 35, where a specific law was challenged, the appellants challenged no particular legislation or policy, and there was therefore no sufficient legal component to engage the courts. 

Pardu J.A. acknowledged that constitutional violations caused by a network of government programs can be addressed, particularly when the issue may otherwise be evasive of review. She found, however, that several factors rendered this application unsuitable for Charter scrutiny. Notably, the assertion that s. 7 confers a general freestanding right to adequate housing is "a doubtful proposition". Moreover, the "diffuse and broad nature" of the claims does not permit a s. 1 analysis. A court simply cannot apply the Oakes test where no particular law is at issue. 

Pardu J.A. finally noted that questions of whether housing policy is adequate and whether sufficient priority has been given to the needs of the homeless cannot be resolved by application of law. Issues of broad economic policy and priorities engage the accountability of legislatures and are unsuited to judicial review. Pardu J.A. concluded that the application is "demonstrably unsuitable for adjudication", effectively asking the court to abandon its decision-making function and instead "embark on a course more resembling a public inquiry into the adequacy of housing policy", well beyond its institutional capacity. 

Feldman J.A. dissented, arguing that it was an error to strike the application at the pleadings stage as it raised significant issues of public importance. The appellants' approach was a novel one; however, as the Supreme Court held in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, that a claim cannot be struck for novelty alone. In order to be struck, a claim must be "certain to fail". In Feldman J.A.'s view, given the Charter's "jurisprudential journey", it was neither plain nor obvious that the claims were doomed to fail. She noted that in Gosselin v. Quebec, 2002 SCC 84, the Supreme Court left open the issue of both the existence and the extent of positive obligations under the Charter to give effect to social and economic rights. Therefore, in Feldman J.A.'s view, it would be premature to decide at the pleadings stage that the issues were not justiciable.

 2.  Neely v. MacDonald, 2014 ONCA 874 (Blair, Pepall and Lauwers JJ.A.), December 8, 2014

Sandi Neely was injured in a golf cart accident while attending a golf tournament hosted by Canadian Litigation Counsel ("CLC"). The tournament was located at Bond Head Golf Resort, which is owned by ClubLink Corporation, with whom CLC had entered into a "Special Function Contract" for the event. In addition to suing the guest who was driving the golf cart, Neely brought a claim against Bond Head and ClubLink, alleging that ClubLink was negligent in failing to remedy the grade of the steep hill on which the accident occurred, despite past complaints about carts going too fast. Bond Head and ClubLink brought a third party action against CLC for indemnity under the Special Function Contract. The motion judge granted them summary judgment against CLC, obliging CLC to indemnify ClubLink for all of the plaintiff's personal injury claims. 

The Court of Appeal heard CLC's appeal from that ruling. 

Citing its decision in Fenn v. Peterborough (City) (1979), 25 O.R. (2d) 399 (C.A.), aff'd [1981] 2 S.C.R. 613, the Court of Appeal noted that in order for ClubLink to shift the risk of its own negligence onto CLC, the agreement governing their relationship must so provide "in the clearest terms". This principle, which was adopted by the Supreme Court, is a "general principle of law that remains valid and applicable". 

The relevant provision in the Special Function Contract provided:

The Customer and/or their guest(s) agree to hold ClubLink Corporation and its officers and employees free and harmless from any damage or claims of any nature whatsoever that may arise from or through the use of a golf cart. 

While the motion judge differentiated between the title of the provision, which appeared to limit liability to damage caused by guests, and its accompanying content, which more broadly pertains to claims against ClubLink with respect to the use of a golf cart, the Court noted that headings are part of the language of a contract and must be considered in interpreting its provisions. 

Reading the indemnity provision together with its heading, the Court agreed with the motion judge that "claims of any nature whatsoever that may arise from or through the use of a golf cart" was sufficiently broad to oblige CLC to indemnify ClubLink for damages arising from the operation of a cart by a guest, including personal injury. The Court emphasized, however, that there is a significant distinction between the negligence of a guest in the operation of a golf cart and the negligence of ClubLink itself in relation to the design and operation of the golf course. While the provision may apply to the former, it does not extend to the latter. 

According to the principle articulated by the Court in Fenn, if ClubLink was to be protected against and indemnified for its own negligence, the Special Function Contract would have to contain an indemnity clause outlining this obligation in the clearest terms. The impugned provision failed to do so. Moreover, where a provision is ambiguous, the principles of contractual interpretation instruct that it be construed against the drafter, in this case ClubLink.  

The Court held that the motion judge's interpretation of the indemnity provision in the Special Function Contract, and particularly his failure to give due effect to the Fenn principle, were legal errors which met the standard for appellate review recently outlined by the Supreme Court in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, and justified its intervention.  The appeal was allowed. 

3. Royal Bank of Canada v. Trang, 2014 ONCA 883 (Hoy A.C.J.O., Laskin, Sharpe, Cronk and Blair JJ.A.), December 9, 2014

In this case, which arose from a bank's attempt to procure a mortgage discharge statement in the face of the Personal Information Protection and Electronic Documents Act ("PIPEDA"), the Court of Appeal was asked to overturn its decision in Citi Cards Canada Inc. v. Pleasance. 

The appellant RBC has a judgment against the Trangs, who own a property mortgaged to the respondent Scotiabank. RBC sought to have the Trangs' property sold in order for it to collect on its judgment, but the Sheriff refused to sell the property without a mortgage discharge statement from Scotiabank. RBC twice attempted to obtain the statement by examining the Trangs as judgment debtors but the Trangs failed to appear both times. When RBC asked Scotiabank to produce the statement, it refused on the grounds that it was precluded from doing so under PIPEDA.  

RBC sought recourse in the courts, bringing a motion for an order that Scotiabank produce a mortgage discharge statement. Relying on the Court of Appeal's decision in Citi Cards Canada Inc. v. Pleasance, 2011 ONCA 3, the motion judge dismissed the motion. In that factually similar case, the Court held that PIPEDA prevented the disclosure of the mortgage discharge statements. Blair J.A. found that the information sought by the creditor was "personal information" and emphasized that the purpose of the privacy legislation is to balance the individual's right to privacy in that information against the organization's need to collect or use that information, not "the interests of a third party organization that may by happenstance have commercial dealings with the individual that make the targeted information attractive to it." Blair J.A. held that neither s. 7(3)(c) of PIPEDA, which allows disclosure where it is required in order to comply with a court order, nor s. 7(3)(i), which allows disclosure that is "required by law", applied. 

RBC submitted before the Court of Appeal that Citi Cards was wrongly decided or was distinguishable, and that PIPEDA ought not to be applied to frustrate efforts to enforce a judgment lawfully obtained.  With neither the Trangs nor Scotiabank participating in the appeal, Hoy A.C.J.O. appointed the Privacy Commissioner of Canada as amicus curiae to ensure that their positions were properly represented. 

Presented with an appeal in which it was essentially asked to overrule one of its prior decisions, the Court of Appeal sat as a panel of five. In a three-to-two decision, the Court ultimately upheld its decision in Citi Cards

RBC's submissions included that the mortgage discharge statement does not constitute "personal information" under PIPEDA. Writing for the majority, Laskin J.A. rejected this position. While certain details of the Trangs' mortgage – such as the principal amount, the rate of interest, the payment periods and the due date – were made publicly available when the mortgage was registered, current mortgage balances are not publicly available in the Ontario Land Registry System or under PIPEDA. A current mortgage balance is "personal information" under PIPEDA: it is "information about an identifiable individual". Further, Laskin J.A. held, the Trangs cannot be deemed to have waived any privacy interest in their current mortgage balances simply because the details of their mortgage at the time of registration were on the public record. 

RBC also relied on clause 4.3.6 of Schedule 1 to PIPEDA, which provides that

[t]he way in which an organization seeks consent may vary, depending on the circumstances and the type of information collected. An organization should generally seek express consent when the information is likely to be considered sensitive. Implied consent would generally be appropriate when the information is less sensitive. 

RBC submitted that this provision permitted Scotiabank to produce the mortgage discharge statement because it contained "less sensitive" information, which the Trangs impliedly consented to disclose to a judgment creditor. RBC argued that the Court of Appeal's decision in Citi Cards was per incuriam because it did not consider cl. 4.3.6, and that even if the per incuriam exception to stare decisis does not apply, Citi Cards was wrongly decided because it failed to give effect to this provision.  

Laskin J.A. observed that the reasons in Citi Cards did not refer to cl. 4.3.6 of Schedule 1 to PIPEDA, but noted that this did not mean that the Court failed to consider the clause. In any event, the provision would not have changed the result because, contrary to RBC's submission, it does not permit a mortgagee to disclose a discharge statement to a judgment creditor of the mortgagor. The mortgagee does not have the mortgagor's implied consent to do so. Both the sensitivity of the information and the Trangs' reasonable expectations supported Scotiabank's refusal to disclose the mortgage discharge statement without the Trangs' express consent. 

RBC also argued that, unlike the creditor in Citi Cards, in twice attempting to examine the Trangs as judgment debtors it exhausted all means to obtain the statement. Laskin J.A. noted, however, that RBC had two ways to obtain the mortgage discharge statement from Scotiabank: by a term in its loan agreement with the Trangs or by a court-ordered examination under rule 60.18(6)(a) of the Rules of Civil Procedure. The latter rule states that where any "difficulty" arises concerning the enforcement of an order – which includes a judgment – the court may make an order for the examination of any person who may have knowledge of relevant matters. Laskin J.A. held that RBC could show "difficulty" in enforcing its judgment both because the Trangs twice failed to appear for judgment debtor examinations and because Scotiabank refused to produce the discharge statement. RBC could therefore bring a motion under rule 60.18(6)(a) seeking an order to examine a representative of Scotiabank. 

Further, an order made under rule 60.18(6)(a) would satisfy the exemption in s. 7(3)(c) of PIPEDA, which authorizes an organization to disclose personal information without the individual's knowledge and consent if disclosure is required to comply with a court order. Laskin J.A. noted that in Citi Cards, the Court identified a rule 60.18(6)(a) motion as a way in which to come within the s. 7(3)(c) exception.

Laskin J.A. concluded by observing that it was still open to RBC to bring a motion for an order to examine a representative of Scotiabank under rule 60.18(6)(a). On the existing record, however, RBC's appeal was dismissed.

Hoy A.C.J.O. wrote a strong dissent, holding that an order requiring a mortgagee to disclose a statement to a creditor need not have been sought under rule 60.18(6)(a) to constitute "an order made by the court" within the meaning of s. 7(3)(c) of PIPEDA. She held that a court order is unnecessary in any event because the Trangs' consent to disclosure of the statement could be implied because it constitutes "less sensitive" information for the purposes of cl. 4.3.6 of Schedule 1 to PIPEDA. In the view of Hoy A.C.J.O., concurred in by Sharpe J.A., Citi Cards was wrongly decided and should be overruled.

4. Fordham v. Dutton-Dunwich (Municipality), 2014 ONCA 891 (Laskin, Rouleau and Lauwers JJ.A.), December 11, 2014

In this case, which arose from a motor vehicle accident, the Court of Appeal comprehensively re-visited the issue of the proper approach to the analysis of a municipality's statutory duty to keep its roads in a reasonable state of repair.

Andrew Fordham was seriously injured after he failed to stop at a stop sign while driving on a rural road in Dutton-Dunwich. The road, which was unfamiliar to Fordham, curves just after the intersection. Driving through the stop sign at about the speed limit of eighty kilometres per hour, he lost control of his car at the curve and crashed into a concrete bridge. 

Fordham sued the municipality of Dutton-Dunwich alleging non-repair of the road under s. 44 of the Municipal Act, 2001, S.O. 2001, c. 25. In particular, he alleged that the municipality had breached its statutory duty of repair in failing to post a checkerboard sign warning of the change in the road's alignment just after the intersection. At trial, Fordham's road experts conceded that their conclusions of inadequate safety of the road were prefaced on the assumption that drivers would not obey the stop sign. Further, the opinions given at trial on behalf of Fordham included that "we need to design for more than just the reasonable driver who's sober, wearing a seatbelt and obeying all the traffic laws."

The trial judge found that the curve in the road required more than a stop sign to provide reasonable notice to "rural" drivers – whom she found do not always obey stop signs – of the "potentially catastrophic hazard ahead". She also found that Fordham was negligent in failing to obey the stop sign.

Concluding that both Fordham's failure to stop and the municipality's failure to post a sign caused the accident, she apportioned liability for Fordham's damages equally among the parties. 

Dutton-Dunwich's appeal turned on the standard of care a municipality must meet in fulfilling its statutory duty of reasonable repair. The municipality submitted that the trial judge misapplied the test for assessing its duty of repair by failing to apply the standard of the reasonable driver. The municipality also argued that the trial judge erroneously created a new standard for "rural" drivers.   

Writing for the Court of Appeal, Laskin J.A. noted that a municipality's statutory duty of repair is measured by the "ordinary reasonable driver": it has a duty to prevent or remedy conditions on its roads that create an unreasonable risk of harm for "ordinary drivers exercising reasonable care". The municipality's duty does not extend, however, to making its roads safe for negligent motorists. As Howden J. held in Deering v. Scugog (Township), 2010 ONSC 5502, 3 M.V.R. (6th) 33, which was affirmed by the Court in a brief endorsement, 2012 ONCA 386, 33 M.V.R. (6th) 1, the standard of care "rests on the notion of the ordinary motorist driving without negligence".

With respect to traffic signs, Laskin J.A. explained that a sign is required only if, without it, an ordinary driver exercising reasonable care would be exposed to an unreasonable risk of harm. As the court held in Greenhalgh v. Douro-Dummer (Township), [2009] O.J. No. 5438 (SCJ), aff'd 2012 ONCA 299, the presence of a hazard does not itself require a municipality to erect a warning sign. The hazard must be one that puts reasonable drivers at risk. 

Laskin J.A. noted that the undisputed evidence tendered by the experts at trial was that the change in the road's alignment posed no hazard to a driver who stopped at the stop sign. Even a driver who failed to stop but slowed to a speed of fifty kilometres per hour would have been able to safely navigate the curve. 

Driving through a stop sign at eighty kilometres per hour, the Court recognized, is not reasonable driving. It is negligent. In fact, Fordham conceded at trial that he had been negligent, and that the accident would not have occurred had he obeyed the stop sign. As Laskin J.A. concluded, Dutton-Dunwich's duty of repair is limited to ensuring that its roads can be driven safely by ordinary drivers exercising reasonable care. It has no duty to keep its roads safe for those who drive negligently.

Laskin J.A. also took issue with the trial judge's suggestion of a distinct standard of reasonable driving for "rural" drivers. The supposed distinction, Laskin J.A. held, is legally irrelevant: there is but one standard of reasonable driving and it requires all drivers to obey traffic signs.

With respect to guidelines contained in traffic manuals, the Court reiterated that they are just that, guidelines: "They do not establish a legally enforceable standard of care for civil liability. The overriding question is always: Does the condition of the road pose an unreasonable risk of harm to reasonable drivers?"

If a road is safe for reasonable drivers exercising ordinary care, as the evidence demonstrated it was in this case, the municipality is not obligated to take additional precautions, such as erecting a sign warning of a change in alignment, to prevent accidents that will not occur except in the event of negligent driving.

5. D'Mello v. The Law Society of Upper Canada, 2014 ONCA 912 (Weiler, Feldman and Benotto JJ.A.), December 22, 2014

Are emails sent by a Law Society investigator during the course of an investigation protected by absolute privilege? A lawyer's defamation suit against the Law Society raised this question. 

The Law Society of Upper Canada initiated proceedings against the appellant. During the course of his investigation, the investigator e-mailed third parties.

The appellant brought a defamation suit against the Law Society in connection with these communications. Based on the defence of absolute privilege, the Law Society brought a motion for summary judgment. The motion judge found that absolute privilege applied, and dismissed the action. 

That decision was appealed.

The appellant argued before the Court of Appeal that the defence of absolute privilege is superseded by s. 9 of the Law Society Act, R.S.O. 1990, c. L.8, which limits the right of the Law Society to defend itself against a claim of defamation by requiring that any person performing a duty under that statute be acting in good faith.

Section 9 of the Law Society Act provides that 

[n]o action or other proceedings for damages shall be instituted against the Treasurer or any bencher, official of the Society or person appointed in Convocation for any act done in good faith in the performance or intended performance of any duty or in the exercise or in the intended exercise of any power under this Act, a regulation, a by-law or a rule of practice and procedure, or for any neglect or default in the performance or exercise in good faith of any such duty or power.

Writing for the Court, Weiler J.A. agreed with the Law Society's position that this provision does not oust or otherwise affect the common law defence of absolute privilege. She emphasized that the construction of statutes presumes that legislatures do not intend to interfere with the common law except where the statute "clearly and unambiguously" does so. This principle reinforces the stability of the law "by favouring certainty and fair notice over vague and inadvertent change". 

Weiler J.A. held that s. 9 of the Law Society Act does not oust the common law, but rather supplements it. By referring to any "action or other proceeding for damages", the provision extends immunity from prosecution to those performing duties under the statute, including conducting investigations, in good faith. Section 9 is not a rights-limiting provision, as the appellant contended, but rather a rights-granting one. The provision acts to supplement the common law in actions for defamation. Weiler J.A. noted that if the investigator had made defamatory statements that were unrelated to his investigation, those communications would not be protected by absolute privilege at common law. They could be protected under s. 9 regardless of the context in which they were made, however, provided they were made in good faith. 

Weiler J.A. also noted the goal of the Law Society Act to protect members of the public in their dealings with lawyers. An official of the Law Society who is investigating a complaint about a lawyer is furthering that interest. He must be granted absolute privilege in defamation actions, lest the Law Society be forced into litigation to justify its investigations every time a lawyer under investigation alleges malice. This would thwart the statute's objective of protecting the public through the timely investigation of complaints. 

Weiler J.A. also rejected the appellant's argument that the defence of absolute privilege did not apply because the investigator was giving information to the complainants as opposed to receiving information from them. She found that the motion judge correctly held that the privilege extends to communications made by, as well as to, investigators. Moreover, the investigator's statements were required in connection with a proceeding under the Law Society Act. The circumstances of the communication therefore gave rise to absolute privilege.

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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