Canada: Court Of Appeal Summaries (January 12-16, 2015)

Last Updated: January 29 2015
Article by John Polyzogopoulos

Hello again to everyone. It was a light week for the Court of Appeal. Below are summaries of this week's Ontario Court of Appeal civil decisions (non-criminal). There was one estates decision, two brief family law decisions and a costs endorsement in a bankruptcy matter.

Wishing everyone a nice weekend.

Heston-Cook v. Schneider, 2015 ONCA 10

[Weiler, Sharpe and Blair JJ.A.]

Counsel:

Gregory Sidlofsky, for the appellant
Lisbeth Hollaman, for the respondent

Keywords: Estates, Removal of Estate Trustee, Breach of Fiduciary Duty, Attorney for Personal Care and Property, Standing to Sue, Costs, Blended Awards, Sawdon Estate v. Watch Tower Bible and Tract Society of Canada

Facts: The appellant appealed the decision of Wilton-Siegel J., who dismissed her cross-motion to be appointed estate trustee of her mother's estate, and to remove her respondent sister as estate trustee. The appellant initially brought an action against the respondent, alleging that the respondent breached her fiduciary duty to her mother during the time the respondent was her attorney for personal care and property. During the first motion brought by the respondent for summary judgment to dismiss the appellant's claim, the motion judge granted the appellant leave to bring a cross-motion to be appointed estate trustee. Since the appellant had no standing to sue the respondent, and therefore only the estate had standing, the appellant was granted leave accordingly. At the hearing of the cross-motion, Wilton-Siegel J dismissed the appellant's motion, and the respondent remained estate trustee of their mother's estate.

Issues:

(1) Did Wilton-Siegel J. err in dismissing appellant's cross-motion?

(2) Did Wilton-Siegel J. err in ordering the appellant to pay the respondent, as estate trustee, full indemnity costs for the hearing of the cross-motion?

Holding:

The appeal was dismissed on the matter of the appointment of the appellant as estate trustee. The appeal was allowed on the issue of the scale of costs awarded to the respondent. Costs fixed in the amount of $10,000 for the appeal were awarded to the respondent, as estate trustee.

Reasoning:

(1) No. Wilton-Siegel J. did not err in principle in dismissing the appellant's cross-motion to be appointed as estate trustee. Since it is only the estate which has standing to bring a claim for breach of fiduciary duty against the respondent, the estate trustee who has carriage of the claim needs to be able to make an objective assessment of the overall interests of the estate and whether it is in the best interests of the estate to pursue the claim. In sum, replacing the respondent for the appellant as estate trustee would not accomplish this goal. Furthermore, as the appellant is also appealing the passing of accounts, she would be in a conflict of interest position if she was also appointed estate trustee. Therefore, the appellant would not be able to act objectively in that situation.

(2) Yes. Wilton-Siegel J. erred in principle in ordering the appellant to fully indemnify the respondent in the amount of $12,000. While the respondent, as the successful party in the cross-motion, is entitled to be fully indemnified, this does not mean that the appellant must pay the respondent more costs than on a partial indemnity scale. Citing the case of Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, it was held that a blended award was most appropriate. Specifically, the appellant was ordered to pay partial indemnity costs of $7,500 to the respondent, and the remainder of the respondent's costs would be paid by the estate.

Segat v. Segat, 2015 ONCA 16

[Weiler, Sharpe and Blair JJ.A.]

John J. Cardill, for the appellant
No one appearing for the respondent

ENDORSEMENT

Keywords: Family Law, Financial Disclosure, Child Support, Equalization Payment

Facts: The respondent refused to disclose his net worth and did not pay any child support. His pleadings were struck. The respondent has outstanding criminal charges against him and he disappeared prior to trial. The trial judge declined to make an order for lump sum child support for the three children of the marriage and awarded ongoing monthly child support.

The basis for the lump sum support claim was an actuarial report that calculated payments for each child to age 23 and made other assumptions that the trial judge declined to accept.

The trial judge also ordered the appellant to pay the respondent an equalization payment of approximately $4000.

Issue(s):

(1) Did the trial judge err in awarding the respondent an equalization payment?

(2) Did the trial judge err in declining to make an order for lump sum child support?

Held: Appeal allowed.

Reasoning:

(1) Yes. The court concluded that no equalization payment should have been ordered given in the respondent's favour given his refusal to disclose his net worth.

(2) Yes. The court concluded that having regard to the non-payment of child support, the respondent's refusal to disclose his net worth, the restraining order against him respecting the appellant and the children and the fact that he had disappeared, this was an appropriate case in which to make a lump sum award of support.

In addition, the court ordered a vesting order transferring the respondent's equity in the house to the appellant. It was determined that this would be the only way to satisfy the respondent's obligations to the appellant for child support as well as other obligations, including his non-payment of his share of the mortgage and related costs respecting the house.

Bell (Re), 2015 ONCA 19

[Laskin, MacFarland and Lauwers JJ.A.]

Counsel:

Arlindo Aragao, for the appellant, Your Legal Business Partner Inc.
Sean N. Zeitz, for the respondent, msi Spergel Inc.

Keywords: Costs

Facts:

This was a costs endorsement following a successful appeal from the decision of D.M. Brown of the Superior Court of Justice dated January 31, 2013, which itself was an appeal from a decision of the Registrar in Bankruptcy.

Holding:

Costs of $20,000 ordered, payable to the appellant.

Reasoning:

The costs of the appeal to the Superior Court from the order of the Registrar in Bankruptcy were fixed by the court at the time judgment was rendered. Submissions on costs were not requested in relation to that order. Although unsuccessful on the appeal to the Superior Court, the appellant was ultimately successful on appeal to the Court of Appeal and accordingly should be entitled to its costs throughout and there was nothing extraordinary to justify a "no costs" order. Further, there was no reason to fix a different amount from the figure to which the parties agreed prior to the hearing of the appeal.

Denomme v. McArthur, 2015 ONCA 15

[Sharpe, van Rensburg and Pardu JJ.A.]

Counsel:

Anna Towlson, for the appellant
Clarke L. Melville and J. Day, for the respondent Paul Denomme
Pamela L. Hebner and R. Bickle, for the respondent Kelly Jane Denomme

Keywords:   Family Law, Child Support, Spousal Support, Net Family Property, Debts of Marriage

Facts:

The appellant and the respondent, Kelly Jane Denomme ("K.J.D.") were married for approximately 6.5 years. At the relevant times, the appellant was employed as a police officer and K.J.D. was a part-time, self-employed CPR instructor. At the time of separation, their eldest child was four years old and their twins were one-and-a-half years old. They are currently nine years and seven years old, respectively.

This appeal pertains to two actions: (1) a debt action against the appellant by the respondent, Paul Denomme ("P.D."), K.J.D's father; and (2) the matrimonial litigation between the appellant and K.J.D.

Debt Litigation:

The trial judge granted judgment to P.D. for three loans: (i) a promissory note for $70,000, signed by both K.J.D. and the appellant prior to their marriage; (ii) a loan of $19,413 to the appellant for a new car; and (iii) a loan for the installation of a home theatre system in their home. The appellant's position at trial and on appeal was that these transactions were all a sham manufactured by K.J.D. and P.D. before marriage and after separation. The appellant testified that he thought the bulk of the money came from a joint line of credit he had with K.J.D., but there was no evidence of any such advance.

The appellant appeals these judgments on the basis that the trial judge erred in his findings of fact.

Matrimonial Litigation:

The trial judge ordered that the appellant pay $500 per month in spousal support for 25 months. The trial judge declined to impute income to K.J.D, finding that her income was largely as reported for tax purposes: $19,519 gross and $8,686 net in 2010, and $9,626 gross and $4,149 net in 2011. The trial judge rejected the appellant's arguments that K.J.D. had significant unreported income, exaggerated her business expenses to reduce her net income, and/or that she was deliberately underemployed.

The trial judge further ordered that the appellant pay the guideline amount in child support, with an additional $150 per month for extraordinary expenses. K.J.D. was to consult with the appellant, and get his consent with respect to any further extraordinary expenses, the consent to which was not to be unreasonably withheld.

The appellant appeals the spousal and child support orders.

He further argues that, for the purposes of calculating K.J.D.'s net family property, the trial judge ought to have discounted her debts to P.D. to about 5 – 10% of their face value, on the basis that P.D. was unlikely to pursue her for these debts. The trial judge refused. He accepted K.J.D.'s evidence that she intended to pay P.D. back. Further, P.D. had obtained judgment against K.J.D. for the debt.

Issues:

Did the trial judge commit a palpable and overriding error with respect to any aspect of his judgment?

Holding: Appeal dismissed.

Reasoning:

The issues on appeal were entirely fact-driven. The trial judge gave adequate reasons to explain the basis for his findings. There was evidence, both documentary and oral, to support those findings. The appellant has not established that the trial judge made any palpable and overriding error in coming to the factual conclusions he did, based on his assessment of the credibility of the parties, and the evidence led at trial. There is no basis for an appellate court to intervene.

The panel was unable on the record before it to assess what, if any, difference the application of a discount to the face value of the debts or deduction from the wife's net family property of a contingent liability for the husband's right of contribution and indemnity would have had on the wife's net family property. The appellant and K.J.D. are jointly and severally liable to pay the debts to P.D. The appellant will have a claim over against K.J.D. if he is called upon to pay more than his share of the debt. Although some discount could have been applied to reflect the likely delay before any payment would be made by K.J.D. to P.D., the appellant has not demonstrated any palpable and overriding error in the trial judge's failure to apply any discount.

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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