Canada: Top 5 Civil Appeals From The Court of Appeal (September 2015)

Last Updated: September 24 2015
Article by Kirk F. Stevens

1. Sarnia (City) v. River City Vineyard Christian Fellowship of Sarnia, 2015 ONCA 494 (Doherty, Epstein and Tulloch JJ.A.), July 3, 2015

2. Frank v. Canada (Attorney General), 2015 ONCA 536 (Strathy C.J.O., Laskin and Brown JJ.A.), July 20, 2015

3. Kassian Estate v. Canada (Attorney General), 2015 ONCA 544 (Hoy A.C.J.O, Sharpe and Benotto JJ.A.), July 22, 2015

4. Abuzour v. Heydary, 2015 ONCA 565 (Laskin, Pardu and Brown JJ.A.), July 30, 2015

5. Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572 (Strathy C.J.O., LaForme and Tulloch JJ.A.), August 12, 2015


 

1.  Sarnia (City) v. River City Vineyard Christian Fellowship of Sarnia, 2015 ONCA 494 (Doherty, Epstein and Tulloch JJ.A.), July 3, 2015

This appeal arose from a dispute between a church and a municipality over the church's operation of a homeless shelter on its premises.

The River City Vineyard Christian Fellowship of Sarnia, located in Urban Residential Zone 1-27 in the City of Sarnia, has been operating a homeless shelter in its basement since 2006, despite the municipality's claim that it was doing so in breach of a zoning by-law. By-law No. 85 of 2002 lists the permitted uses in UR1-27 as "Church, school and parking only", with "Church" defined as:

a building used by a religious organization for public worship and church-sponsored community activities and projects, and may include as accessory uses a rectory or manse, church hall, day nursery or religious school, offices, but shall not include a soup kitchen or food bank, unless otherwise permitted by this By-law.

When the City of Sarnia applied to the Superior Court for an injunction to prohibit River City's operation of the shelter based on its alleged violation of the by-law, River City brought a counter-application seeking a declaration that it was not contravening the by-law. River City further submitted that to the extent the shelter was prohibited by the by-law, the by-law unjustifiably infringed its freedom of religion as protected by the Canadian Charter of Rights and Freedoms.

The application judge issued an injunction against River City, prohibiting it from operating the shelter. River City appealed, submitting that the by-law, properly interpreted, permitted the shelter both under "church-sponsored community activities and projects" and as an "accessory use" to the church, and, in the alternative, that if the by-law did prohibit the shelter, its application or enforcement infringed section 2(a) of the Charter and was not justified under section 1.

Writing for the Court of Appeal, Tulloch J.A. found that the shelter fell within the meaning of "church-sponsored community activities and projects" and was therefore permitted as a "church" under UR1-27.

Justice Tulloch observed that the application judge made three errors in his interpretation of the by-law. The first was the conclusion that the express prohibition on soup kitchens and food banks indicated an intention to prohibit other activities of a similar nature. Tulloch J.A. found that the application judge further erred by concluding that the renovations to the church basement took the shelter outside of the meaning of "use", defined in the by-law as "the purpose for which a lot, building or structure, or any combination thereof is designed, arranged, occupied or maintained". In fact, there was no indication in the by-law that the definition of "use" was limited to purposes that existed when the building was first constructed. The by-law neither expressly provided nor implied that "church-sponsored community activities and projects" are restricted to activities or projects that can be accommodated without renovations. Finally, the application judge erred by attaching significance to the fact that the shelter fell within the by-law's definition of "emergency shelter". Nowhere in the impugned by-law was it suggested that "church-sponsored community activities and projects" may not include uses that are defined elsewhere. Justice Tulloch concluded that the application judge's finding that River City's shelter did not fall within the meaning of "church-sponsored community activities and projects" was based on flawed reasoning and accordingly not entitled to deference.

Tulloch J.A. found that River City's homeless shelter fell within the scope of the words "church-sponsored community activities and projects", properly interpreted. While he cautioned that the language of the by-law must be interpreted in a manner consistent with its objective, which is to circumscribe the use of land in the City of Sarnia, Tulloch J.A. observed that the drafters chose fairly broad and permissive language to describe the uses churches were entitled to make of their premises. The inclusion of the words "community activities and projects", and "community" in particular, revealed their intention to allow churches to engage in socially beneficial conduct and respond to the needs of the public. In operating the shelter, River City did just that.

Tulloch J.A. concluded that the words "church-sponsored community activities and projects" are broad enough to permit River City to operate a homeless shelter on its premises without contravening the impugned by-law.

2.  Frank v. Canada (Attorney General), 2015 ONCA 536 (Strathy C.J.O., Laskin and Brown JJ.A.), July 20, 2015

The right of every Canadian citizen to vote is enshrined in the Canadian Charter of Rights and Freedoms. This case challenged the constitutionality of legislation that denies more than one million Canadian citizens that right.

The respondents, Gillian Frank and Jamie Duong, are Canadian citizens who live and work in New York State. After being denied the right to vote in the 2011 federal election, they brought an application in the Superior Court of Justice to declare unconstitutional provisions of the Canada Elections Act, S.C. 2000, chapter 9, denying the vote to most Canadian citizens who have resided outside of Canada for more than five years.

The application judge held that Parliament cannot take away the voting rights of non-resident Canadian citizens, including long-term non-residents. He concluded that the impugned provisions of the Canada Elections Act are a violation of section 3 of the Charter, which states that every Canadian citizen has the right to vote. He further found that the provisions were not saved by section 1, and were therefore of no force and effect.

While the Attorney General of Canada conceded that the impugned legislation infringes the voting rights guaranteed by section 3 of the Charter, he argued that the legislation is justified under section 1 because it fulfills the pressing and substantial objective of preserving the "social contract" at the heart of Canada's constitutional democracy: the principle that the citizenry submits to the laws of the government that they participate in electing. In a controversial opinion, a majority of the Court of Appeal agreed.

Writing for the majority, Chief Justice Strathy held that preserving the connection between citizens' obligation to obey the law and their right to elect the lawmakers is a pressing and substantial objective that justifies the section 3 Charter infringement. In Strathy C.J.O.'s view, it is this "social contract" that gives the laws their legitimacy: the electorate submits to the laws because it has a voice in making them.

Strathy C.J.O. noted that only residents of Canada are required to obey domestic Canadian laws and that, with limited exceptions, the laws enacted by Parliament do not extend beyond Canada's borders. Permitting all non-resident citizens to vote would allow them to participate in making laws that affect Canadian residents on a daily basis, but have little to no practical consequence for their own lives.

In Strathy C.J.O.'s view, denying the right to vote to non-resident citizens whose absence exceeds five years is a reasonable limit on the Charter right to vote. The breach is justified because, not being subject to all of the responsibilities and burdens of citizenship, non-resident Canadians have withdrawn from the "social contract", which would be undermined by allowing them to exercise the right to vote.

In a forceful dissent, Laskin J.A. asserted that the disenfranchisement of long-term non-resident Canadians is unjustified. On a procedural note, he observed that the Court of Appeal ought not to have entertained the Attorney General's submissions regarding the social contract, which were not made at first instance and for which there was no evidentiary basis. In any event, he held that Parliament's decision to impose a five-year limit on expatriate Canadians' voting rights was not aimed at preserving the social contract at all, observing that "not a single parliamentarian, not a single study, recommended a five-year non-residency limitation in order to preserve or strengthen our social contract". Laskin J.A. noted that accepting a restriction of Charter rights on this basis is a violation of the principle that a statute's purpose cannot shift between its enactment and the consideration of its constitutionality by a court. He surmised that the relationship between residence, the duty to obey the law and the right to vote is merely "an artifice, conjured up by the Attorney General to avoid running up against the shifting purpose doctrine", going so far as to suggest that the alleged legislative purpose of preserving the social contract was "invented by the government long after 1993" and, in fact, "appears to have been invented after this case was decided".

Justice Laskin went on to hold that, even if the objective of preserving the social contract could justify a restriction on non-resident Canadians' right to vote, it fails to do so. He noted that four Parliamentary reports recommended allowing all Canadians abroad to vote, suggesting that the objective is not pressing and substantial at all. Laskin J.A. further observed that residence in Canada is not necessary for participating in the Canadian social contract: the world in which residence was the key to participating in a political community no longer exists. In fact, the Charter's single criterion for membership in the "community of eligible voters" - citizenship - is far more suited to the world we live in now. Laskin J.A. pointed out that although many more laws affect residents than non-residents, even among residents of Canada legislation does not affect all citizens equally. Moreover, the decisions of the Canadian government do, in fact, affect non-residents, and will do so in the future, including after their return home.

Laskin J.A. held that even if the objective of preserving the social contract was indeed pressing and substantial, the five-year restriction would not be proportional to it. He noted that the limit, and more importantly, its exemptions for civil servants and members of the military, is directly related to the "worthiness" of the different types of Canadians who reside abroad. As many non-residents have not renounced membership in the Canadian community, this is not a rational way to preserve the social contract. Justice Laskin also noted that because the exemptions are not tailored to the law's objective in any meaningful, evidence-based way, the five-year limit is not minimally impairing of the right to vote. Further, the limit's positive effects, if any, are outweighed by the harm of the deprivation of the right to vote. Laskin J.A. pointed out that laws made today affect how Canada will be governed tomorrow; Canadians who reside abroad will have no voice in the direction their country takes, even though they may have family here or intend to return.

3.  Kassian Estate v. Canada (Attorney General), 2015 ONCA 544 (Hoy A.C.J.O, Sharpe and Benotto JJ.A.), July 22, 2015

Edward and Eileen Kassian were both killed after their car was struck by a driver who was being pursued at high speed by the Akwesasne Mohawk Police Service ("AMPS"). The respondents, the Kassians' estate and family members, sued the AMPS and others including the Attorneys General of Ontario, Quebec and Canada.

Ontario and Quebec moved for summary judgment seeking dismissal of the action against them, which was based on vicarious liability for the negligent actions of the officers involved in the high speed chase. The respondents meanwhile brought a motion to amend their pleadings by adding a claim for direct negligence against the provinces and Canada on the basis that they had failed to implement the recommendations of an Audit Report prepared in 1991 in connection with the AMPS.

The motion judge dismissed the summary judgment motion of Ontario and Quebec and allowed the amendments to the claim in part. These decisions were upheld by the majority of the Divisional Court. Ontario, Quebec and Canada appealed.

The respondents' claim against Ontario and Quebec was based on a quadripartite agreement between those provinces, Canada and the Mohawk Council of Akwesasne. The agreement, which provides for the funding of a police service in Akwesasne, stipulates in its preamble that the Mohawks of Akwesasne shall have an "autonomous and independent" police service and that such service shall be provided by the AMPS in accordance with the safety needs of the community. The respondents claimed that the terms of the agreement created a partnership or enterprise between the provinces and the Council, and that Ontario and Quebec were accordingly vicariously liable for the actions of the officers who conducted the high speed chase which resulted in the Kassians' deaths.

The motion judge held that a trial was required to determine the nature of the relationship created by the agreement. A majority of the Divisional Court agreed. The Court of Appeal held that the majority of the Divisional Court erred in its application of the law of vicarious liability and on a correct application of the law there was no genuine issue for trial.

Citing the decision of the Supreme Court in K.L.B. v. British Columbia, 2003 SCC 51, the Court of Appeal noted that in order to succeed in a claim for vicarious liability, a plaintiff must establish that the relationship between the tortfeasor and the person against whom liability is sought is sufficiently close to make a claim for vicarious liability appropriate, and that the tort is sufficiently connected to the tortfeasor's assigned tasks that the tort can be regarded as a materialization of the risks created by the enterprise. Vicarious liability is imposed on the theory that the party may be held responsible where "the risks inherent in his or her enterprise materialize and cause harm, provided that the liability is both fair and useful."

The Court observed that an important factual consideration is the degree of control exercised by the person or organization sought to be held liable and the tortfeasor, and agreed with the approach taken by the Divisional Court's dissenting judge to determine the nature of the relationship between the AMPS and the provinces. That judge examined the terms of the agreement - including the stipulation that the AMPS is "autonomous and independent" as well as provisions that the Akwesasne Mohawk Police Officers and their Chief are employed by the Council and that the Chief is responsible for the operation and administration of the AMPS, free of any interference - and concluded that it did not create a relationship that is sufficiently proximate between Ontario, Quebec and the police officers to justify the imposition of vicarious liability. Ontario and Quebec were simply too remote from the tortfeasors to be acting on their behalf. Nor could the tort be regarded as a materialization of risks inherent in the "enterprises" of the provinces.

The Court concurred with the dissenting judge's conclusion that the terms of the agreement did not create a relationship that was sufficiently close or controlling to justify the imposition of vicarious liability. Therefore, there was no genuine issue requiring a trial.

The Court of Appeal also disagreed with the motion judge and the majority of the Divisional Court that a trial was necessary to resolve the issue of whether the governments' failure to intervene to ensure that certain police standards were met constituted direct negligence which caused or contributed to the Kassians' deaths. The Court concurred with the dissenting judge of the Divisional Court that while the governments have a general duty to the public to ensure adequate police services in Akwesasne, they are too far removed from the daily conduct of the officers of the AMPS to owe a private law duty of care to certain individuals. The harm to the respondents was not reasonably foreseeable and the relationship between the governments and the AMPS was not sufficiently close to impose a private duty of care. The Court also agreed with the dissenting judge that claims alleging negligence against public authorities should be examined at the pleadings stage to determine whether there is any possibility that a duty of care can be found to exist. No duty of care was owed in this case; therefore, the claim could not succeed.

The appeals of Ontario and Quebec were allowed and the action against them dismissed. Canada's appeal was also allowed, and its request to deny the amendments granted.

4.  Abuzour v. Heydary, 2015 ONCA 565 (Laskin, Pardu and Brown JJ.A.), July 30, 2015

In this decision, the Court of Appeal addressed one piece in the disturbing puzzle of a lawyer, Javad Heydary, who appears to have disappeared with his clients' money.

Javad Heydary's firm, Heydary Hamilton Professional Corporation, owed the respondents, Hasan and Samira Abuzour, more than $3.6 million. Heydary and Heydary Hamilton's LawPro liability insurance policy had a $1 million limit and was a diminishing policy, meaning defence costs reduced the available insurance.

The appellants were lawyers formerly employed by Heydary Hamilton. Although they had no control over the trust account and played no part in the disappearance of the funds, the respondents threatened to sue them in their effort to recover the missing funds. The appellants wanted to resort to the liability insurance policy for their defence costs, but if the policy limits were paid out in partial satisfaction of the respondents' claims, they would be left without coverage to defend themselves.

Meanwhile, a dispute arose as to whether the Abuzours were entitled to money deposited in Heydary's trust account in settlement of an oppression action with a third party. The Abuzours did not obtain a judgment against Javad Heydary or Heydary Hamilton for negligence, fraud, error or omission in the provision of professional services, matters covered by the insurance policy. Instead, they brought motions in the oppression proceeding which resulted in two orders in late 2013 that they be paid $3.6 million from the Heydary Hamilton trust account. Heydary and Heydary Hamilton failed to comply with the orders and were found in contempt of court.

Shortly thereafter, counsel for the respondents sent a demand letter to the appellants threatening legal action in the absence of a resolution.

The Abuzours served a notice of garnishment on LawPro and brought a motion to enforce the garnishment. The appellants were not served with a notice of the motion. The motion judge granted the garnishment order.

The appellants brought a motion to set aside or vary the garnishment order. They submitted that the 2013 orders were not covered by the Heydary policy because they did not involve damages arising out of a claim where the liability of the insured was the result of an error, omission or negligent or fraudulent act in the performance of or the failure to perform professional services. They further argued that the demand letter constituted a claim under the policy, and was delivered well before the notice of garnishment was delivered; accordingly, under the "first past the post" principle, their rights as insureds under the policy came before any rights of the Abuzours arising by way of notice of garnishment. Noting that garnishment is an equitable remedy, the appellants also argued that the equities favoured them, not the Abuzours. Finally, the appellants claimed that if not set aside, the garnishment order ought to be varied to provide that, in exchange for payment of the proceeds of the policy, the Abuzours must provide a release of all claims against them.

The motion judge refused to set aside or vary the garnishment order, notably rejecting the appellants' submission that the equities were in their favour. He held that payment of the Abuzours' claim should not be delayed because of the mere possibility that an action might be commenced against them. The appellants appealed from the motion judge's refusal to set aside or vary the garnishment order.

Writing for the Court of Appeal, Pardu J.A. observed that the Abuzours were unable to identify any basis upon which they might advance a claim against the appellants relating to their lost money. She suggested that their refusal to execute a release in favour of the appellants was a tactical one, designed to extract funds from innocent parties who are unable to defend themselves. Noting that the enforcement of a garnishment is a discretionary decision, she held that the respondents ought to provide a release as a condition of their receipt of the garnished insurance policy limits. While the losses suffered by the respondents were devastating, "there is no basis shown to visit Heydary's misconduct on the appellants". In the unique circumstances of this case, where the respondents could not articulate any substance to a claim against the appellants, a release condition "narrowly tailored to the apparent theft of the trust funds" was an appropriate remedy.

The appeal was allowed to the extent of varying the order of the motion judge.

5.  Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572 (Strathy C.J.O., LaForme and Tulloch JJ.A.), August 12, 2015

Three charitable organizations alleged that the City of Windsor and the Town of Tecumseh collected lottery licensing and administration fees which far exceeded the costs of regulating their fundraising activities. They sought restitution on behalf of a class of persons who paid fees to the municipalities, claiming that the fees were effectively a direct tax imposed in the absence of legislative authority and, accordingly, ultra vires the municipalities.

These actions, which were commenced in 2008, have been twice certified under the Class Proceedings Act, 1992, S.O. 1992, chapter 6, with ensuing appeals.

At the second certification hearing, the judge certified both class actions using the plaintiffs' proposed class of anyone who had paid licensing fees on or after January 1, 1990. The Divisional Court approved the class definition. The municipalities appealed.

The appellants' primary objection remained the temporal scope of the class. They submitted that the class, which includes charities that have paid fees since 1990, reaches too far back in time. In the municipalities' view, the long temporal reach of the class means that some of the common issues cannot be common to all class members and that the representative plaintiffs cannot fairly represent the claims of all class members. They asserted that proceeding by class action is therefore not the preferable procedure for the resolution of the claims.

The Court of Appeal agreed to an extent, but held that the defects identified by the appellants need not be fatal. With some minor modifications, including an adjustment to the class definition and the creation of a subclass, the Court brought the proceedings within the requirements of section 5(1) of the Class Proceedings Act, 1992 and finally got them on their way.

Writing for the Court, Chief Justice Strathy agreed with the appellants that the class should not have been defined using the arbitrary date of January 1, 1990. Arbitrariness in the class definition defeats the purposes of binding all persons who ought to be bound by the decision, providing access to justice and achieving judicial economy. He instead defined the class in "a rational way", by reference to the fifteen year ultimate limitation period in section 15(2) of the Limitations Act, 2002, S.O. 2002, chapter 24, Schedule B. Applying this limitation period would create a class of persons who paid the impugned fees from and after October 24, 1993.

Strathy C.J.O. observed that while issues of liability and damages are common to all class members, the claims of class members with presumptively time-barred claims raise common issues of fact and law not shared by those with timely claims. He addressed this concern by creating a subclass of persons who paid fees between October 24, 1993 and October 23, 2002 and between January 1, 2004 and October 23, 2006, those payments made within the ultimate limitation period in section 15 of the Limitations Act, 2002 but outside of the basic limitation period, and not preserved by the transition rules of the statute. Strathy C.J.O. also noted that while the common issues certified by the certification judge relating to liability, defences and remedies are common to all class members, common issues three through five - which concern limitations issues - are of no interest to class members whose claims are timely. As those issues are only applicable to the subclass members whose claims may be subject to a limitations defence, they ought to be subclass common issues.

Chief Justice Strathy went on to conclude, however, that a subclass representative is not required at this time, rejecting the appellants' submission that those members with time-barred claims would be prejudiced if they were represented by the plaintiffs. Citing Pearson v. Boliden Ltd., 2001 BCSC 1054, Strathy C.J.O. explained that prejudice will occur when the representative plaintiff cannot "fairly and adequately" represent the subclass, such that the need for a separate subclass representative arises. There was no such prejudice in this case, and therefore no subclass representative required. Strathy C.J.O. observed that the representative plaintiffs, like many class members, may have claims that are both timely and presumptively time-barred. They have an interest, at least currently, in advancing both types of claims. They undoubtedly have an interest with all class members in the common issues of liability and damages.

Strathy C.J.O. further rejected the appellants' submission that a class proceeding is not the preferable procedure for the resolution of the common issues. In accordance with the two-part test in Hollick v. Toronto (City), 2001 SCC 68, he considered whether a class proceeding would be a "fair, efficient and manageable" method of advancing the claim and whether it would be preferable to other procedures, with a view to the goals of judicial economy, access to justice and behaviour modification. Strathy C.J.O identified two issues of preferability: the complexity of the need to resolve time-barred claims and the existence of different regulatory and fiscal regimes over the broad class period.

The appellants submitted that combining the presumptively time-barred claims with the timely claims is not the preferable procedure for the resolution of either set of claims. They asserted that the presumptively-time barred claims are amendable to ordinary litigation and that they ought not to be litigated together with the timely claims due to their small likelihood of success. Strathy C.J.O. again disagreed, emphasizing that the unique features of class proceedings, notably the ability to case manage groups of claims raising common issues and the ability to make binding determinations of those issues, make a class proceeding appropriate to resolve these claims: "With active and strategic case management, and a resolve by the parties to focus on the fair and efficient resolution of the issues, both liability and limitation period issues could be resolved relatively expeditiously."

The Court allowed the appeal in part, certifying the action as a class proceeding.

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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.

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