Canada: Court Of Appeal Summaries (October 19, 2015 – October 23, 2015)

Last Updated: November 2 2015
Article by John Polyzogopoulos

A number civil decisions were released by the Court of Appeal this week. Topics covered included insurance coverage for malicious prosecution claims, the Statute of Frauds, costs in a bankruptcy matter, the revival of a claim that was dismissed for delay because the counterclaim was still proceeding and related to the same facts and evidence, and the interpretation of the Ontario Fault Determination Rules with regard to a chain reaction pile-up accident. Additionally, there were numerous child protection, immigration and criminal decisions.

Here's to hoping that the Jays can pull off two more wins and continue this great ride! For everyone who will be watching tonight, enjoy the game, and Go Jays!

Civil Cases

Ontario Society for the Prevention of Cruelty to Animals v. Sovereign General Insurance Company, 2015 ONCA 702

[Epstein, Pepall and Benotto JJ.A]


R. V. Andal, for the appellant
B. Shiller and A. Chaisson, for the respondent

Keywords: Insurance Law, Commercial General Liability Policy, Coverage, Duty to Defend, Malicious Prosecution, Standard of Review, Policy Interpretation, Exclusion Clause, Sattva Capital Corp. v. Creston Moly Corp., Fortuity Principle, Appeal Dismissed


This appeal concerned an insurer's duty to defend under commercial general liability ("CGL") insurance policies.

The respondent, Ontario Society for the Prevention of Cruelty to Animals ("OSPCA") was insured by Sovereign General Insurance Company ("Sovereign"). In three separate actions, Paul St. Amand ("St. Amand"), Dr. Stephen Sheridan ("Sheridan"), and Trevor Smith ("Smith") sued OSPCA. OSPCA then sought coverage from Sovereign, who refused to defend the actions. OSPCA had contracts of insurance with both Sovereign and Travelers Insurance. Travelers initially defended the three actions, but later took the position that Sovereign should contribute half of the defence costs. OSPCA commenced an application seeking a declaration that Sovereign was required to defend each action. Sovereign conceded that the claims for malicious prosecution, false arrest, false imprisonment, and slander were encompassed by the insurance policies, but defended and relied on exclusion clauses and on the application of the fortuity principle.

With one exception, the application judge disagreed with Sovereign's position and ordered it to defend the actions. Sovereign then appealed that order.


(1) Did the application judge err in concluding that the exclusion clauses contained in the insurance policies were inapplicable?

(2) Did the application judge err in concluding that the fortuity principle was inapplicable?

Holding: The answer to both questions was "No". Appeal Dismissed.


The application judge correctly concluded that neither the exclusion provisions at issue nor the fortuity principle was applicable. Moreover, her findings of mixed fact and law were entitled to deference. When interpreting insurance policies, the language of the policy is the most important factor in determining whether coverage is granted or excluded. In addition to the language of the policy, courts should also take into account general principles of insurance law. The Court thus did not interfere with the application judge's conclusion that Sovereign had a duty to defend all three actions.

(i) St. Amand Claim

With respect to the fortuity principle, the application judge was correct in concluding that it did not operate to preclude coverage. The fortuity principle serves as an interpretive aid. It is a "general principle of insurance law that arises from the very nature and purpose of insurance, namely, that ordinarily only fortuitous or contingent losses are covered by a liability policy". The principle is based on the notion that insurance makes economic sense where losses are unforeseen or accidental and that it would be undesirable to encourage people to injure others intentionally by indemnifying them for the civil consequences. The policy at issue expressly covered offences such as malicious prosecution. Moreover, the application judge's interpretation of the contract in light of the fortuity principle and its application to the pleadings amounted to mixed findings of fact and law and, in the absence of any palpable and overriding error, deference was owed.

(ii) Sheridan Claim

The application judge did not err in her conclusion that Sovereign had a duty to defend the Sheridan claim. In addressing the claims of false arrest and malicious prosecution, the application judge correctly concluded that exceeding the scope of a search warrant is not an offence or violation of the Criminal Code. As such, the exclusion provision was not triggered. As for Sheridan's slander claim, the application judge correctly construed Sheridan's statement of claim, which was clearly based on words spoken about him and not on published materials.

(iii) Smith Claim

The application judge correctly held that the allegations in the statement of claim amounted to a claim of malicious prosecution and that there was express coverage for malicious prosecution in the policy. It was not evident from the pleadings that there was any allegation of a violation of rights respecting any of the claims at issue. Moreover, the fortuity principle and the language of the policy at issue did not operate to exclude coverage for Smith's claim. This result was supported by the general principle that coverage provisions are to be construed broadly and exclusion clauses narrowly.

D.L.G. & Associates Ltd. v. Minto Properties Inc., 2015 ONCA 705

[Doherty, Lauwers and HuscroftJJ.A.]


S. Laubman and C. Muir, for the appellant
A. Grant and A. Caverson, for the respondent

Keywords: Contracts, Commercial Leases, Covenant to Insure, Torts, Fraudulent Misrepresentation, Negligent Misrepresentation, Acquiescence, Waiver, Equitable and Promissory Estoppel, Exclusion Clauses, Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), 2010 SCC 4., Rules of Civil Procedure, Rule 21, No Reasonable Cause of Action


The motion judge properly took the facts as pleaded by the appellant as true for the purposes of the motion. The respondent, Minto Properties Inc. ("Minto") owned a property of which the appellants, D.L.G. & Associates Ltd. ("D.L.G.") agreed to lease a part, for a restaurant business. Within a few months of opening the restaurant, a sewer back-up caused the restaurant to be closed for extensive repairs.

D.L.G. recovered under its insurance policy; however, D.L.G.'s insurer removed the sewer back-up coverage from D.L.G.'s insurance policy going forward. D.L.G. notified Minto of the cancellation and at no time did Minto require D.L.G. to obtain new coverage. Minto undertook to D.L.G. to repair and maintain the plumbing system, which unknown to D.L.G. at the time, it never actually did.

D.L.G, and Minto entered into a "Lease Amending Agreement" ("Amended Agreement") that reduced the rent while necessary repairs were being made. It also provided that D.L.G. would release Minto from any "claim actions, causes of action, claims and demands, for damages, restitution, compensation, proprietary interests, loss of injury, howsoever arising" by D.L.G. prior to the date of the Amending Agreement. A second sewer back-up occurred and the restaurant closed permanently.

D.L.G. informed Minto that it was in breach of the lease and purported to terminate the lease for failing to takes steps to fix the plumbing after the first backup. Minto in turn declared that D.L.G. was in breach of the lease for non-payment of rent and purported to terminate the lease. D.L.G. began an action claiming damages for fraudulent and negligent misrepresentation, breach of the terms of the lease and negligence. Minto denied liability and counterclaimed for back rent.

Minto brought a Rule 21 motion to strike all of the claims as disclosing no reasonable cause of action. The motion judge held that the fraudulent misrepresentation claim and effect of the Leasing Amending Agreement on that claim should be determined at trial, butstruck out the other claims.

The motion judge held that it was plain and obvious that the covenant to insure, in the lease, prohibited D.L.G.'s claims for breach of contract, negligence and negligent misrepresentation and that Minto did not waive the covenant by acknowledging that D.L.G.'s insurer had terminated the insurance after the first incident. The motion judge also determined that it was plain and obvious that the enforceability of the covenant to insure was not negated by the principles established in Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), 2010 SCC 4.


(1) Is a trial necessary to properly interpret the covenant to insure in the context of the entire agreement?

(2) Is the covenant to insure an exclusion clause and thus unenforceable under the principles set out in Tercon?

(3) Did the motion judge err in striking the negligent misrepresentation claim?

(4) Did the motion judge err in determining that neither waiver nor estoppel could assist D.L.G.?


Appeal allowed in part.


(1) No. A covenant to insure is a provision within a lease that allocates risk between the parties. It would not serve its purpose if it was interpreted as allocating the risk to the tenant if the landlord was negligent, but to the landlord if the same act amounted to a breach of a provision in the lease. This would effectively put the risk on Minto even though D.L.G. was obligated to obtain "all risks" insurance.

(2) No. The covenant to insure cannot be read as an exclusion clause. The court stated that in the context of a negotiated lease between commercial entities, there is very little basis for the argument that a covenant to insure could be viewed as unconscionable.

The pleadings failed to disclose an allegation of inherent unfairness by requiring D.L.G. to obtain "all risks" insurance. The fact that Minto had knowledge about the plumbing that D.L.G. did not have during negotiation did not create a situation of unequal bargaining power. Even though D.L.G.'s claim that it relied on fraudulent/negligent misrepresentation gives rise to a tort claim, it does not support the assertion that D.L.G. was in a position of unequal bargaining power.

(3) Yes. D.L.G. alleged that during negotiations for the lease, Minto represented that the plumbing was in good repair and that there had been no prior flooring in the unit. D.L.G. alleged that both these representations were false. D.L.G. also alleged that Minto misrepresented that it had performed the required repairs after the first sewer back-up causing the second sewer back-up.

The motion judge held that it was not plain and obvious that the covenant to insure, nor the release as part of the Amended Lease, foreclosed the fraudulent misrepresentation claim. In his analysis, the motion judge did not treat the negligent misrepresentation claim differently than the breach of contract and negligence claims made by D.L.G. The motion judge also did not differentiate between the misrepresentations made before and after the first back-up.

D.L.G. argued that the analysis of the fraudulent misrepresentation claim applied to the negligent misrepresentation claim because both are based on tortious conduct outside of the lease. D.L.G. stated that the covenant to insure distributes the risk in the contract and does not impact claims based on tortious conduct outside of the lease. The court held that it was not plain and obvious that the terms of the contract showed that the parties intended to exclude Minto's potential liability for any negligent misrepresentations that induced D.L.G. to enter into, or continue the lease.

Minto argued that the "entire agreement clause" requires a separate consideration of the misrepresentations made by Minto before and after the first sewer back-up. The court found that it is not plain and obvious that the "entire agreement clause" should protect Minto from liability for post-contract misrepresentations. Also, the language in the "entire agreement clause" requiring modifications to the lease be in writing, does not make it plain and obvious that claims based on negligent misrepresentation made after the lease was entered into must fail. Finally, no terms of the Amending Agreement clearly make the "entire agreement clause" in the lease applicable to negligent misrepresentation claims based on representations made after the first sewer back-up.

The court considered Minto's argument that the "entire agreement clause" precluded liability based on negligent misrepresentations made before the lease was entered into more viable than the others. However, the evidentiary detail required in order to determine this issue was not available on a motion to strike based on the pleadings.

(4) Yes. D.L.G. pleaded that due to Minto's conduct after the first sewer back-up, it could not rely on the covenant to insure in the lease in respect of damages from the second sewer back-up, pleading "acquiescence, waiver and equitable or promissory estoppel". The motion judge erred in ruling that neither waiver nor estoppel could assist D.L.G.

The court held that the facts as pleaded establish the basis for factual determinations necessary to support a waiver or estoppel claims. The court disagreed with Minto's position that the waiver and estoppel argument were one and the same. Waiver under a lease cannot necessarily be equated with the broader doctrine of promissory estoppel.

Conforti (Re), 2015 ONCA 708

[Laskin, Blair and Pepall JJ.A.]


R. A. Klotz, for the appellant V. F. Conforti

H. F. Manis and D. Miller-Lichtenstein, for the respondent Trustee in Bankruptcy, Pat Robinson Inc.

Keywords: Bankruptcy and Insolvency, Discharge from Bankruptcy, Non-Disclosure of Income and Property, Motion for Directions, Costs, Partial Indemnity, Substantial Indemnity, Offer to Settle, Rule 49

Facts: The appellant sought an order of costs on a full or substantial indemnity scale for the costs of his appeal, the costs of the motion in the court below, and the costs of a related motion.

This proceeding arises out of an application for discharge from bankruptcy, which was opposed by both the Trustee and the appellant's principal creditor. It was opposed on the basis that the appellant filed for an assignment in bankruptcy in September 2009. However, he did not disclose that he had commenced a personal injury action in 2007, nor that he had made a claim in 2008 for additional statutory accident benefits. The appellant subsequently settled the action and the claim for $275,000 and $21,000. The Trustee brought a motion seeking directions from the court on the issues of property and income inclusions in order to ascertain the amounts payable to the bankrupt's estate. The motion proceeded in two stages. At the first hearing, it was determined that the settlement payment allocation of $100,000 for future loss of competitive advantage was income and not property under the Bankruptcy and Insolvency Act. The parties were given 30 days to provide written submissions on costs but neither did so, and a costs order was never made.

At the second hearing, the motions judge made numerous determinations on proposed inclusions in the appellant's income and whether conditions should be imposed on the appellant's proposed bankruptcy discharge. He also established a schedule for costs submissions, and granted leave to make further submissions in writing on the calculations reflected in the order he had granted. He subsequently concluded that counsel's submissions did not show any mathematical errors and there was no reason to change the order. On the issue of costs, he observed that this was a case of mixed success. Unless a Rule 49 offer had been made, there was no reason for submissions on costs. Based on the record before the Court of Appeal, it appeared that the second motions judge was not advised of any Rule 49 offer and no costs order was made.


Is the appellant entitled to full or substantial indemnity costs for all three proceedings?

Holding: No, the appellant is not entitled to full or substantial indemnity costs for any of the proceedings. The Court of Appeal awarded $5,000 for the costs of the motion under appeal, and $10,000 for the costs of the appeal, both on a partial indemnity scale.


Neither Rule 49.10 nor the conduct of the Trustee justifies an award of costs on a full or substantial indemnity scale. The appellant's offer was stated to expire at the commencement of the first hearing and ambiguously stated that if the offer was accepted after commencement of the hearing, the settlement amount was to be reduced by the appellant's partial indemnity costs. It also did not address all of the issues at the second hearing. Furthermore, it was fair and reasonable for the Trustee to request directions from the court. In a request for directions, the appellant stood in the shoes of a defendant under Rule 49.10. According to St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, a defendant is not entitled to a substantial indemnity award under Rule 49.10 where it makes an offer to settle that is greater than the amount awarded. According to Young v. Young, [1993] 4 SCR 3, an award of substantial or full indemnity costs may be based on conduct including circumstances where there has been "reprehensible, scandalous, or outrageous conduct on the part of one of the parties". As stated in Mortimer v. Cameron (1994), 17 O.R. (3rd) 1 (CA), such an award "is ordered only in rare and exceptional cases to mark the court's disapproval of the conduct of the party in the litigation." In this case, the conduct does not rise to that level. The Trustee was only responding to the appellant misrepresenting his assets, and the Trustee was justifiably wary of acting in the absence of court direction, particularly given the uncertain state of the law relating to personal injury settlements.

In regards to costs for the first hearing, the costs of the motion were not properly before the Court of Appeal since no order for costs was made during the proceeding and the order was not appealed. Thus, the Court declined to impose a costs award for that proceeding.

In awarding costs for the second hearing and the appeal, the Court noted that the appellant was successful on most of what he appealed; the motion judge was not asked to make a costs disposition although he mentioned costs and the parties' mixed success; and the hearing addressed in part the discharge of the appellant from bankruptcy. Costs are also generally not awarded on discharge hearings. Furthermore, with the appellant's admitted deceit, the Trustee and his primary creditor cannot be faulted for opposing his discharge. Given the appellant's significant success on appeal, he should be entitled to some costs of the second motion.

Although the appellant requested partial indemnity costs for the second hearing of $12,915, the Court of Appeal granted $5,000 as a fair and reasonable award of costs. The appellant also sought partial indemnity costs of $14,085 for the appeal. However, the Court granted costs of $10,000 inclusive of disbursements and HST.

Entry Point Investments v. Invis Inc., 2015 ONCA 701

[Gillese, van Rensburg and Miller JJ.A.]


A. Gyimah, acting in person

I. Ishai and G. M. McKeown, for the respondents

Keywords: Contract Law, Guarantees, Evidence in Writing, Statute of Frauds, s.4, Appeal Dismissed


Anthony Gyimah brought a motion for summary judgment against the respondents Ricky Singh, Domenic Reda, and Invis Inc. on an alleged guarantee of a $30,000 real estate loan that he made to Ranjit Dullay and Naomi Edwards, who were also named as defendants to the action. Ultimately, the real estate transaction did not close. The motions judge found that there was no agreement that the respondents would guarantee the loan. The appellant's motion for judgment was dismissed and the cross-motion of the respondents for summary judgment dismissing the action against them was granted, with costs fixed at $25,000.

Gyimah appealed the dismissal and also sought leave to appeal the costs order.

Issues: Did the motions judge err in dismissing the motion?

Holding: No. Appeal dismissed.

Reasoning: The motions judge preferred the respondents' evidence and weighed the evidence of the parties and drew appropriate inferences. Those findings were entitled to deference, and the appellant has not identified any palpable and overriding errors in them. Moreover, the motions judge made no error in dismissing the claim on the basis that, even if an oral guarantee had been provided, section 4 of the Statute of Frauds requires a guarantee to be in writing to be enforceable.

State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699

[Simmons, Gillese and Rouleau JJ.A.]


K. B.J. Schultz and J. R. Frost, for the appellant

D. Strigberger, for the respondent

Keywords: Insurance Law, Automobile Insurance, Statutory Accident Benefits, Statutory Interpretation, Fault Determination Rules, Loss Transfer Provisions, Insurance Act, s. 275, Fault Determination Rules, Rule 9, Heavy Commercial Vehicle


The Ontario Superior Court of Justice had interpreted subsection 9(4) of the Fault Determination Rules (the "FDRs"), as set out in RRO 1990, Reg 668, with respect to a chain reaction collision involving several vehicles, including a heavy commercial vehicle. Subsection 9(4) states that the rear-ending vehicle in a chain reaction collision is responsible for 100% of fault for the resulting collisions ahead, barring unusual circumstances. In this case, a Pepsi truck insured by the respondent, Old Republic Insurance Company of Canada ("Old Republic") struck a Dodge vehicle that, in turn, struck a Nissan. In a separate but related collision, the Nissan then struck a fourth vehicle, a Lexus, insured by the Applicant, State Farm Mutual Automobile Insurance Company ("State Farm").

The driver of the Lexus was paid statutory accident benefits ("SABs") by State Farm, which, in turn, sought indemnification through arbitration from Old Republic pursuant to Loss Transfer rules. The arbitrator held that Old Republic was required to indemnify State Farm despite the fact that there was no direct collision between their respective insured vehicles. Old Republic appealed the arbitrator's decision to the Superior Court, arguing that it would be an unfair result to hold it liable to indemnify State Farm, and that such a determination would adversely affect the underwriting of heavy commercial vehicles in Ontario. The court dismissed the appeal, confirming that a rear-ending vehicle that causes a chain reaction is 100% liable for all of the successive collisions.


(1) Whether the lower court erred in its statutory interpretation of the FDRs and resulting decision that Old Republic be liable to indemnify State Farm.


Appeal allowed. The arbitrator's order was set aside and a substitute order was issued providing that Old Republic was not required to indemnify State Farm for the SAB payments. Reading subsection 9(4) in the context of the Fault Determination Rules and the Loss Transfer provisions as a whole, the court concluded that the Pepsi truck was 100 per cent at fault only for the collision between it and the Dodge.


(1) The court conducted a modern approach to statutory interpretation, stating that the rules of interpretation apply equally to regulations and that the regulations must be read in the context of the enabling statute, having regard to the purpose of the enabling provisions. The court reached its conclusion that the relevant FDRs refer only to the collision identified in the particular sub-clause as opposed to the entire chain reaction for the following six reasons.

First, it read subsections 9(3) and 9(4) of the FDRs as parallel provisions that must be read consistently. Reading these provisions in conjunction leads inevitably to the court's conclusion. Otherwise, subsection 9(3) could lead to over-indemnification of some insurers in certain circumstances.

Second, the court read subsection 9(2) to support the same conclusion, as that section requires that the "degree of fault for each collision between two automobiles involved in the chain reaction [be] determined without reference to any related collisions involving either of the automobiles and another automobile." Considering the provision's wording, it would make no sense that the legislature would also try to address the responsibility of a particular automobile for the entire chain reaction.

Third, section 11 of the FDRs also supports the court's conclusion and uses similar language to section 9, which would produce the result of over-indemnification if an "incident" was interpreted to mean the entire pile-up.

Fourth, interpreting "incident" as referring to the collision identified in each particular sub-clause of subsection 9(4) is not inconsistent with the purpose of SABs Loss Transfer provisions. This is despite the fact that not all insurers required to pay SABs will be entitled to indemnification from a heavy commercial vehicle involved in the accident under section 275 of the Insurance Act. Those provisions are designed to balance the financial costs of SABs payments among insurers of different classes of vehicles, favouring expedition and economy over finite exactitude.

Fifth, interpreting "incident" as the court did sits comfortably with the use of the FDRs to determine direct compensation claims for property damage, because recovery is based on the degree of fault of an insured based on the FDRs.

The final reason for the court's conclusion is that its interpretation of an "incident" will have no impact on the garage or towing loss transfer provisions because those provisions rely on the fault of the garage operator or their employee or the driver of the automobile towing the insured automobile.

Although the court allowed the appeal, it rejected Old Republic's argument that upholding the Superior Court appeal judge's decision would have dire consequences for the insurance of trucking and heavy commercial vehicles . The court found this argument was advanced on an in terrorem basis, without an evidentiary foundation and without any assistance concerning the technical aspects of such a technical area of law.

Allstate Insurance Company of Canada v. Klimitz, 2015 ONCA 698

[Feldman, Juriansz and Brown JJ.A.]


T. J. McCarthy and C. Mak, for the appellant

J. Van Allen, for the respondent E. Klimitz

No one appearing for the respondent the Financial Services Commission of Ontario

Keywords: Insurance Law, Accident Benefits, Limitation Period, Insurance Act, s. 281.1(1), s. 37(1), Appeal Dismissed

Facts: The appellant, Allstate Insurance, appealed a judgment dismissing its application for judicial review of the decision of the Director's Delegate allowing the appeal of the respondent, Edna Klimitz, from an order of an Arbitrator at the Financial Services Commission of Ontario. The Arbitrator had found that the respondent was precluded from proceeding to arbitration because she had filed her application for mediation more than two years after the appellant's refusal to pay her a non-earner benefit, contrary to s. 281.1(1) of the Insurance Act. The appellant had determined that the respondent did not qualify for a Non-Earner Benefit based on a medical evaluation of Ms. Klimitz.

Issues: Was it unreasonable for the Director's Delegate to conclude that the two year limitation period did not start to run until the respondent had received a copy of the medical report in satisfaction of Allstate's obligation to give reasons for its determination under s. 37(1) of the Regulation?

Holding: No. Appeal dismissed.

Reasoning: It was not unreasonable as the Director's Delegate was entitled to deference in the interpretation of the statute. The court was also not persuaded that the decision was inconsistent with the decision in Turner v. State Farm Mutual Automobile Insurance Co.

Om Sai Physiotherapy Clinic Inc. v. Kucher, 2015 ONCA 711

[Feldman, Juriansz and Brown JJ.A.]


P. Baxi and A. Mann, for the appellants

M. Barbagallo, for the respondent

Keywords: Civil Procedure, Motion to Strike Claim, Dismissal for Delay, Rules of Civil Procedure, Rule 24, Counterclaim, Fresh Evidence,


The Appellant, Om Sai Physiotherapy Clinic (the "Clinic"), alleged that between 2003 and 2006, the Respondent, Robert Kutcher, then an employee of the Clinic, misappropriated funds. The Clinic claimed the Respondent altered payment cheques by substituting his name for that of the Clinic, then cashing those cheques. The Clinic claimed $100,000 in damages and $100,000 in exemplary and punitive damages. By way of a counterclaim against the Clinic and the Appellant, V.P. Raju personally, the Respondent claimed improper dismissal following the Respondent's complaints about late commission payments by the Clinic. The Respondent claimed $100,000 in damages.

The Respondent brought a motion to strike and to dismiss the Clinic's main action and Reply and Defence to Counterclaim for delay. The motion judge, by his order of February 4, 2015, dismissed the Clinic's main action against the Respondent for delay and for failure to comply with undertakings obligations. The motion judge struck the Appellants' Reply and Defence to Counterclaim for their failure to comply with the interlocutory order of Van Melle J., dated November 8, 2013, and he dismissed Raju's motion to dismiss the counterclaim against him personally.

The Appellants appealed the motion judge's order and brought a motion for leave to file fresh evidence which was not before the motion judge.


(1) Did the motion judge err in dismissing the main action and striking the Appellants' Reply and Defence to Counterclaim?

(2) Should the Appellants' motion for leave to file fresh evidence be granted?

Holding: Appeal allowed. Statement of Claim in main action and Appellants' Reply and Defence to Counterclaim were restored. The main action was restored to the Brampton trial list.


(1) No, the motion judge did not err in his exercise of discretion, on the record as it existed before him. The motion judge applied the correct legal principles and did not misapprehend the evidence before him about the non-compensable prejudice to the respondent that the absence of certain of the Appellants' records might cause.

(2) With regard to the request for leave to file fresh evidence, the court granted the motion, despite the fact the fresh evidence did not meet the due diligence requirement under Palmer v The Queen. It was obvious to the court that the documents constituting the fresh evidence were available not only at the time of the motion, but at the time the undertakings were given in 2011. However, in this case, the fresh evidence is relevant not only to the Clinic's claim, but also to the Appellants' defence to the Respondent's counterclaim, specifically, to their defence to the Respondent's claim for damages for defamation. The counterclaim raises much the same evidentiary issues as does the claim. The respondent intends to pursue his counterclaim, and the fresh evidence therefore is relevant to an ongoing action. With the fresh evidence now showing that the undertakings are complete, and with the fresh evidence remaining relevant to the Respondent's counterclaim. The Clinic's Statement of Claim and the appellants' Reply and Defence to Counterclaim are therefore revived and restored to the Brampton trial list.

Connolly v. Advantagewon Inc., 2015 ONCA 709

[Feldman, Juriansz and Brown JJ.A.]


P. Gemmink, for the appellant

A. Chahbar, for the respondent

Keywords: Civil Law, Commercial Liability, Possessory Lien, Non-Possessory Lien, Repair, Loan, Default on Loan Arrangement, Repair and Storage Liens Act, ss.3(1), 3(4), 3(5), 7(1), Personal Property Security Act, Mechanic's Lien Act s. 52, Royal A. Vaillancourt Co. Ltd. v Trans Canada Credit Corporation Ltd., [1963] 1 OR 411 (CA)


The appellant, Connolly, appeals from the judgment of Douglas J which declared that the respondent, Advantagewon Inc., was entitled to a non-possessory lien under Part II of the Repair and Storage Liens Act, 1990 (RSLA).

In 2013, the appellant purchased automotive parts for his vehicle from Xclusive. To finance the purchase, he entered into an agreement with the respondent for a loan totalling $4,124.21. The appellant defaulted on his monthly payment obligations under the loan agreement. The respondent attempted to seize the vehicle based on a purported non-possessory lien under the RSLA. The appellant commenced an application seeking a declaration that the respondent does not have a lien under the RSLA fov the Vehicle.

The application judge declared that the respondent is entitled to a non-possessory lien on the vehicle.


(1) Did the judge make a palpable and overriding error in finding that the respondent as a non-possession lien based on the finding of fact that Xclusive installed the rims and tires?

(2) Did a non-possessory lien arise under contract?

(3) Did Xclusive have deemed possession of the Vehicle under RSLA s. 3(4)?

Holding: Appeal allowed. The judgment is set aside and an order declaring that no lien on the vehicle arose under the RSLA is granted. The respondent is to pay the appellant $6,000 and $2,000 for the cost of the application.


(1) The application judge made a palpable and overriding error of fact in finding that the third-party, Xclusive, had performed the installation work. The appellant installed the tires and rims on the vehicle after their purchase. In emails between the appellant and Xclusive, Xclusive said that they do not physically install them. The respondent did not file evidence. Therefore, the evidence before the application judge established that neither Xclusive nor the respondent had possessed the vehicle or installed the rims and tires. The application judge erred in finding that Xclusive performed the installation work.

Part I of the RSLA creates "Possessory Liens." This part of the statute codifies the common law right to a lien by providing that a repairer has a lien against an article that the repairer has repaired "and the repairer may retain possession of the article until the amount is paid."

The usual conditions necessary to create a Part I possessory lien against the vehicle did not arise.

(2) No. A non-possessory lien does not arise under the contract. A lien under Parts I and II of the RSLA arises by operation of statute, not by contract. For a valid lien to arise, a lien claimant must satisfy the requirements of the RSLA.

Xclusive did not satisfy the requirements. For a possessory lien to arise against an article, a person must have "repaired" the article. The definition of "repair" in s. 1 of the RSLA includes "an expenditure of money on, or the application of labour, skill or materials to, an article for the purpose of altering, improving or restoring its properties." However, Xclusive did not expend any money on, nor did it apply any "labour, skill or materials" to the Vehicle. Xclusive simply sold tires and rims to the appellant, who later attached them to his Vehicle. Accordingly, Xclusive did not make a "repair" to the Vehicle within the meaning of the Act. As a result, no possessory or non-possessory repairer's lien arose in favour of Xclusive which it could assign to the respondent.

(3) No. Section 3(4) does not need to be interpreted definitively, but it is clear that it has no application to the facts of this case. The lien claimant was a vendor of personal property who never applied any labour, skill or materials to the article against which a lien is claimed.

First, the judge did not accept the evidence on the invoicing to mounting and balancing referred to placing the tires on the rims. The respondent did not file any evidence from Xclusive to explain the invoice's language.

Second, s. 3(4) must be read with s. 3(5). They address a situation where a repairer makes a repair to an article at a location away from the repairer's premises, and the article remains in the actual possession of the person entitled to it. Section 3(4) deems the repairer to have gained possession of the article when the repairer is commenced, and then deems the repairer to have given up possession when the repair is completed or abandoned. By deeming the repairer to have gained possession of an article despite the repairer's lack of actual possession, s. 3(4) enables the repairer to obtain a possessory lien. When the deemed possession ends, the repairer may either remove the article from the premises on which the repair is made under s. 3(5) or register a non-possessory lien under Part II of the RSLA.

This reasoning is supported by the scheme's legislative history, a Ministry discussion paper, and a commentary paper published in the Canadian Business Law Journal.

Civil Law Endorsements

Lochner v Toronto (Police Services), 2015 ONCA 703

[Gillese, Pepall and Lauwers JJ.A.]


S. Lochner, acting in person
R. L. Love and D. Hornich, for the respondent

Keywords: Appeal, Cost Endorsement, Written Submissions, Partial Indemnity

DBDC Spadina Ltd. v Walton, 2015 ONCA 710

[Gillese, Lauwers and Benotto JJ.A]


R. A. Fisher, for the appellants Christine DeJong, Michael DeJong, Christine DeJong Medical Professional Corporation, C2M2S Holding Corp. and DeJong Homes Inc.

P. H. Griffin and D. Glatt, for the respondents DBDC Spadina Ltd. and those corporations listed on Schedule A

M. Dunn, for Shonfeld Inc., Manager and Inspector

Keywords: Appeal, Endorsement, Costs, Written Submissions, Partial Indemnity

Criminal Law Decisions

R v Killeen, 2015 ONCA 706

[Watt, Hourigan and Huscroft JJ.A.]


P. J. Leckey, for the appellant
J. V. Palangio, for the respondent

Keywords: Criminal Law, Leave to Appeal, Summary Conviction, Findings of Fact, Criminal Code s. 839

R v Rompre, 2015 ONCA 707

[Watt, Hourigan and Huscroft JJ.A.]


I.Carter, for the appellant
C. de Sa, for the respondent

Keywords: Criminal Law, Possession for the Purposes of Trafficking, Possession of the Proceeds of Crime, Canadian Charter of Rights and Freedoms, s. 8, Evidence, Testimony

R v MW, 2015 ONCA 644 (Publication Ban)

[Tulloch J.A. (In Chambers)]


P. Copeland and E. Chozik, for the appellants
L. Bolton, for the respondent

Keywords: Criminal Law, First Degree Murder, Young Offender, Adult Sentence, Youth Criminal Justice Act, Rehabilitative Custody and Supervision (IRCS) Order, R v Freeman (1998), 101 BCAC 79

R v Exell, 2015 ONCA 704 (Publication Ban)

[Watt, Hourigan and Huscroftt JJ.A.-


G. MacDonald, for the appellant
P. Rochman, for the respondent

Keywords: Criminal Law, Sexual Interference, Sentencing, Imprisonment, Probation, Breach, Criminal Code s. 161, Denunciation and Deterrence, Custodial Sentence

R v Tippett, 2015 ONCA 697 (Publican Ban)

[Hoy A.C.J.O., Feldman and Rouleau JJ.A.]

A. Craig and G. Gross-Stein, for the appellant
A. Wheeler, for the respondent

Keywords: Criminal Law, Kidnapping, Sexual Assault, Dangerous Offender, Criminal Code, s. 753, Error in Law, Misapprehension of Evidence, Weight, R v Vuradin, 2013 SCC 38

Other Decisions

Chaudhary v Canada (Public Safety and Emergency Preparedness), 2015 ONCA 700

[Juriansz, Rouleau and Hourigan JJ.A.]


J. M. Vecina, for the appellants Michael Mvogo and Amina Chaudhary
B. Jackman, for the appellant Carmelo Bruzzese
S. Sekhar, for the appellant Glory Anawa
M. Anderson, J. Espejo-Clarke, N. Dodokin, and S. Karantonis, for the respondents

Keywords: Immigration Law, Immigration and Refugee Board, Immigration Division, Deportation, Federal Court, Canadian Charter of Rights and Freedom, ss. 7, 9, 10(c), Habeas Corpus, Peiroo Exception, Peiroo v Minister of Employment and Immigration (1989) 69 OR (2) 253 (CA)

Children's Aid Society of Toronto v EO, 2015 ONCA 696 (Publication Ban)

[Hoy A.C.J.O., Weiler and Pardu JJA]


E.O., appearing in person
E. Rose, for the applicant

Keywords: Child Protection, Incarceration, Children's Aid Society, Crown Ward, Motion for Extension of Time

Children's Aid Society of Toronto v PM, 2015 ONCA 695 (Publication Ban)

[Hoy A.C.J.O., Weiler and Pardu JJ.A.]


L. Carey Talbot, for the appellant (respondent)
E. Rose, for the respondent (applicant)

Keywords: Child Protection, Crown Ward, Parental Access, Palpable and Overriding Errors, Motion for Leave to Adduce Fresh Evidence, Child and Family Services Act, S. 69(6)

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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