The Court of Appeal had a busy week and released a number of civil decisions, many of which were procedural in nature – extension of time, leave to appeal, limitation periods, Rule 21. One of these procedural decisions was in the Nortel case, in which the court denied leave to appeal Justice Newbould's trial decision, apparently bringing the matter substantially closer to a conclusion.
Have a nice weekend.
[Weiler, LaForme and Huscroft JJ.A.]
Cynthia B. Kuehl and Stuart Zacharias, for the appellant
Osborne G. Barnwell and Maxine Palomino, for the respondent
Keywords: Torts, Professional Negligence, Medical Malpractice, Informed Consent, Limitation Period, Discoverability, Summary Judgment
The respondent, Diana Brown suffered severe complications following her breast reduction surgery, which was performed by the appellant, Dr. Joseph Baum, on March 25, 2009. Ms. Brown brought an action against Dr. Baum alleging lack of informed consent on June 4, 2012, over three years after the initial surgery, but within two years when Dr. Baum last treated her to correct the original problems. In her statement of claim, Ms. Brown alleged that Dr. Baum did not inform her of the risks or possible outcomes of undergoing breast surgery, and, in particular, of the risks that her obesity and smoking could pose.
Over a 13-month period from May 6, 2009 to June 16, 2010, Dr. Baum performed a series of surgeries to improve the outcome of the initial surgery that was performed in March, 2009. Dr. Baum was unsuccessful on his summary judgment motion to dismiss the action as statute-barred under the Limitations Act, 2002. The motion judge found that as of July 2009, Ms. Brown knew she had suffered an injury that was caused or contributed to by an act or omission of Dr. Baum and therefore she met the first three branches of the discoverability test, as set out in s. 5(1)(a)(i-iii) of the at that date. However, because Dr. Baum continued to treat Ms. Brown to ameliorate her complications, the motion judge found that the fourth branch, s. 5(1)(a)(iv), was not met because Ms. Brown did not know that "a proceeding would be an appropriate means to seek to remedy" the injury, loss or damage she had suffered. The limitation period did not commence until June 16, 2010, the date of Ms. Brown's last ameliorative surgery by Dr. Baum. As a result, Ms. Brown's statement of claim issued on June 4, 2012, was issued within the limitation period.
Issue: Did the motion judge err in law in his application of s. 5(1)(a)(iv) of the Limitations Act, 2002 to the facts of this case?
Holding: Appeal dismissed.
No. The court agreed with the motion judge that the fourth condition of discoverability under the Act is met at the point when the claimant not only knows the factual circumstances of the loss she has suffered, but also knows that "having regard to the nature of the injury, loss or damage", an action is an appropriate remedy. Once she knows that, she has two years to initiate that action. Further, the court was satisfied that the test in s. 5(1)(b) was met. A reasonable person in Ms. Brown's circumstances would not consider it legally appropriate to sue her doctor while he was in the process of correcting his error and hopefully correcting or at least reducing her damage. Where the damages are minimized, the need for an action may be obviated.
The court found that the motion judge made no error in his approach to this issue. He considered the relevant case law and applied it to the facts. He was entitled to find that Ms. Brown did not know that it was appropriate to sue Dr. Baum until after the last surgery he performed to try to correct the complications and improve the outcome of the original surgery. The court agreed with the motion judge's observations, that it is not simply an ongoing treatment relationship that will prevent the discovery of the claim under s. 5. However, in this case, it was the fact that the doctor was engaging in good faith efforts to remediate the damage and improve the outcome of the initial surgery.
[Feldman, Lauwers and Benotto JJ.A.]
Elliot Birnboim, for the appellant
Colin Still, for the respondent
Keywords: Family Law, Equalization of Net Family Property, Unequal Division of Property, Family Law Act, s. 5(6)
The appeal arose from motions for summary judgment brought by both parties. The appellant wife sought a judgment for equalization of net family property ($268,000) or, alternatively, for four-fifths of that amount ($214,000). The respondent husband sought judgment dismissing the plaintiff's clam for an equal or unequal division of net family property.
The parties began dating in July 2007. The appellant moved into the respondent's home, which is the sole property in issue on the claim for division of family property, in September 2009. The parties married in June 2013. They separated in February 2014. The appellant contended that the entire 2007-2014 period needed to be considered as the period of cohabitation. However, counsel for the appellant invited the court to ignore the 2007-2009 period and rely on the dates of cohabitation not in dispute, 2009-2014.
As the parties cohabited for less than five years, s. 5(6) of the Family Law Act ("FLA") was considered, whereby the court may award a spouse an amount that is more or less than half the difference between the net family properties if equalizing the net family properties would be unconscionable having regard to the fact that the amount a spouse would otherwise receive under the FLA would be disproportionately large in relation to a period of cohabitation that is less than five years. The motion judge granted the appellant an equalization payment of $60,000.
(1) Did the motion judge fail to consider the parameters of the motions before him as defined by the parties' Notices of Motion, thereby offending the audi alterem partem rule?
(2) Did the motion judge err by granting judgment on a final basis rather than a partial basis to enable the issues to be heard fully on the merits?
(3) Did the motion judge grant an unequal division of family property on an arbitrary basis?
Holding: Appeal dismissed.
(1) No. The motion judge was entitled to consider all the evidence and then apply the relevant statutory provision, s. 5(6) of the FLA, and determine both whether an unequal division was appropriate and, if so, the quantum of the unequal division. He was not limited to choosing one of the two amounts proposed by the appellant and, if he was inclined to reject both those amounts, obligated to refer the question of quantum on to a trial.
(2) No. The court found this submission was merely a reformulation of the first issue. The response was, again, that the appellant brought a motion for summary judgment. The motion judge heard and determined it. He was not limited to choosing one of the appellant's alternative positions.
(3) No. The court did not accept the appellant's submission that the motion judge erred by not following a mathematical formula for calculating the unequal division of net family property. He looked carefully at the backgrounds of both parties, determined that an equal division would be "unconscionable", and fixed what he regarded as a reasonable figure. The court saw no error in the motion judge's approach.
With regard to the appellant's submission that there was an error in the motion judge's statement about her submission about an unequal division, the court found the submission was speculative. There was no language in the motion judge's reasons between his statement about the appellant's position and his ultimate conclusion about quantum to suggest that he linked these numbers in a formulaic way. The court found the factors cited by the motion judge supported the final amount of equalization at $60,000.
[Doherty, MacPherson and Miller J.A.]
Alamgir Hussain, acting in person
Amanda Gibson, for the respondents
Keywords: Civil Procedure, Offers to Settle, Acceptance, Withdrawal
The appellant wrote to counsel for the settlement respondents making an offer to withdraw his claim against them. The appellant later emailed counsel for the settlement respondents stating "Please schedule dates for the Discovery and Mediation." Afterwards, counsel for the settlement respondents wrote to the appellant advising that her clients accepted the offer to settle and stated that she would send a draft "full and final release".
Having received the draft release, the appellant advised that he required a letter of apology from the respondents. Counsel for the settlement respondents replied that this was not a term of the settlement and, thereafter, the appellant took the position that he had rescinded the offer to settle.
The motion judge found that the settlement offer was an offer to consent to the dismissal of the action as against the settlement respondents, and not simply an offer to withdraw. Moreover, there was no additional requirement for an apology. The appellant's email did not constitute a withdrawal of the offer, and withdrawals must be clear and unequivocal. The motion judge enforced the settlement.
Issues: Did the motion judge err in finding that the settlement offer was an offer to consent to the dismissal of the action as against the settlement respondents?
Holding: Appeal Dismissed.
No. The appellant challenged the motion judge's findings that: (1) the settlement offer was for the dismissal of the action as against the settlement respondents, and not just to withdraw the claim; (2) the offer was not withdrawn prior to its acceptance; and (3) the settlement is binding on the appellant. Instead, the Court held that these findings were supported by the evidentiary record, were entitled to deference, and that there was no basis upon which it could interfere with them.
The appellant supplemented his argument on the first issue by arguing that the settlement was not accepted according to its terms as it was only accepted by the settlement respondents and because the action remained active against Mr. Hossain. The Court refused to give effect to these submissions as the settlement offer did not specify that it was conditional on acceptance by all parties.
[Laskin, Pepall and Brown JJ.A.]
Scott Martin and Kayla Kwinter, for the appellants
Robert G. Tanner, for the respondent
Keywords: Civil Procedure, Summary Judgment, Breach of Natural Justice, Failure to Give Reasons, Barbieri v. Matronardi
The appellants appeal from an order for summary judgment date July 22, 2015. The dispute between the parties involves the liability for basic structural consulting services provided by the appellants.
The appellants' primary ground of appeal is that the reasons of the motion judge were so deficient as to not permit meaningful appellate review and failed to explain why the appellants were unsuccessful in their defence and counterclaim.
Holding: Appeal Allowed.
The court agreed with the appellant's submission. The court held that the motion judge gave no meaningful reason for his decision. The court criticized the motion judge's endorsement stating that it was not specific enough, and did not give its reasons.
The court held that since the Supreme Court of Canada decision in Hyrniak v. Mauldin, there has been an increase in summary judgment motions under Rule 20. The court held that judges must still provide meaningful reasons explaining their disposition of summary judgement motions.
The court held that the endorsement of the motion judge in the present case failed to meet the minim standards as set out in Barbieri v. Matronardi.
[Doherty, MacPherson and Miller JJ.A.]
James Slade, in person
Syed Abid Hussain, for the respondent
Keywords: Civil Procedure, Summary Judgment, Res Judicata, Inconsistent Verdicts
The appellants appeal from an order for summary judgment dismissing the appellants' counterclaim against the respondent, Tanfi Limited. As a result of the dismissal of the counterclaim, the motion judge granted judgment to the respondent on two mortgages for $979,713.02. The principal ground of appeal was that the summary judgment on the appellant's counterclaim was inconsistent with a previous judgment dismissing the respondent's motion for summary judgment in the original action (before the appellants made their counterclaim). The first motion for summary judgment was dismissed on the basis that there were a number of interconnected issues that required a detailed examination of the factual matrix which could only take place at trial.
Was the order for summary judgment on the appellant's counterclaim inconsistent with the previous order of the court in which summary judgment was refused?
Holding: Appeal dismissed.
No. By the time the respondent brought its motion for summary judgment on the counterclaim, the action had fallen into a procedural quagmire. As well, the intervening decision of the Supreme Court of Canada in Hryniak v. Mauldin had changed the law relating to summary judgments so that the emphasis is now on providing the most efficient and affordable outcome available to the parties in the interests of justice. The motion judge was entitled to hear the evidence and resolve the issue on the record before him. The Court of Appeal did not think that the motion judge violated the principle of res judicata. It recognized that although it is probably unusual to have two motions for summary judgment in the same case, there is no reason in logic or in policy to preclude such a possibility in an appropriate case. Here, the pleadings changed between the two motions and so did the law relating to summary judgment.
[LaForme, Pardu and Roberts JJ.A..]
Marco Drudi and Lisa Lutwak, for the appellant
Wade Sarasin, for the respondent
Keywords: Construction Law, Breach of Contract, Unpaid Invoices, Construction Lien Act, s. 12, Legal Set-Off, Equitable Set-Off, Trust Funds, Pleadings
The respondent, Architectural Millwork & Door Installations Inc. ("Architectural Millwork") sued the appellant, Provincial Store Fixtures Ltd. ("Provincial Store") for breach of contract, unjust enrichment and in quantum meruit alleging that Provincial Store failed to pay Architectural Millwork's invoices for millwork they did at Provincial Store's OLG casino construction project.
Provincial Store claimed no deficiencies with the work performed by Architectural Millwork and admitted they owed the money claimed. Provincial Store stated that no payment was required became of the application of a credit memo issued by Architectural Millwork and Provincial Store's claim of the right to set-off monies related to alleged deficiencies in the Architectural Millwork's work on other unrelated construction projects.
The motion judge rejected Provincial Store's claim for set-off and partially allowed Architectural Millwork's motion for summary judgment in the amount of $61,696.31. The issue as to whether the credit memo continues to be operative was left for trial.
Did the motion judge err in rejecting Provincial Store's claim for set-off under s. 12 of the Construction Lien Act ("CLA"), or by way of equitable set-off?
Holding: Appeal dismissed.
Reasoning: No. Provincial Store argued that the motion judge erred in stating that s. 12 of the CLA did not apply because Architectural Millwork framed its pleading in breach of contract, and did not rely on provisions of the CLA, and that s. 12 of the CLA would only apply in cases where a plaintiff explicitly refers to or relies upon the CLA in its pleading. The court read the motion judge's comments as effectively finding that a breach of contract claim cannot be responded to with a claim for a set-off of trust funds under s. 12 of the CLA where the plaintiff has not made a claim to trust funds in the first place. The court was not required to rule on whether the motion judge was correct on this point because it found that s. 12 had no application to the case.
If the requirements of s. 12 are met, a trustee may, without breaching the trust, retain but not spend any of the monies set-off against the trust funds on account of outstanding debts, claims or damages. This section does not allow a trustee to put some of the trust funds retained to general use. The set-off right under s. 12 requires the party seeking it to prove the existence of trust funds against which the set-off can be applied.
In this case, neither side pleaded the existence of breach of a trust fund. Provincial Store pleaded that it had not been paid by the owner for work performed by Architectural Millwork and so was not obligated to pay Architectural Millwork's invoices, negating the existence of a trust fund. There was no evidence that the monies received by Provincial Store from the owner were held in trust or retained and they admitted they did not maintain a separate bank account for the OLG project.
The judge did not err in determining that equitable set-off is not available to Provincial Store. The evidence showed that the other projects on which Architectural Millwork performed work were unrelated because funds were segregated, they were undertaken at different times, and in different places for different owners, among other factors.
[Feldman, Lauwers and Benotto JJ.A.]
Bryan D. Rumble and Alissa P. Goldberg, for the appellant
Robin Moodie and Bronwyn M. Martin, for the respondents
Keywords: Torts, Professional Negligence, Lawyers, Limitation Periods, Discoverability, Limitations Act, 2002, s. 5
The appellant was injured in a car accident and subsequently consulted respondent Silverman, who commenced an action against the other driver. At mediation, the appellant relied on the advice of the respondent to accept $26,169.36 in full settlement of the tort claim.
The appellant continued to suffer from her injuries and asked the respondent to continue to assist her in obtaining statutory accident benefits. In 2009, the solicitor-client relationship between the parties ended when the respondent asked the appellant for a further monetary retainer to pursue this claim. The appellant consulted another lawyer in 2010 about pursuing that claim. This lawyer later obtained an opinion that the appellant's injuries met the "catastrophic" threshold under SABS and commenced an action against the respondents for breach of contract, negligence, and breach of fiduciary duty for advising her to accept an improvidently low settlement amount and for failing to explain that the settlement was final.
The action against the respondents was commenced almost six years after the impugned settlement. On a motion for summary judgment, the motion judge, regarding discoverability, accepted the respondents' argument that the appellant had the necessary knowledge to bring her claim against them when she entered into the settlement. The motion judge therefore granted summary judgment dismissing the action.
Issues: Did the motion judge err in her interpretation of s.5(1) of the Limitations Act, 2002 by finding that the appellant's claim was discoverable prior to August 26, 2009?
Holding: Appeal Allowed
Yes. Under s. 5(1)(b), the question is when a reasonable person with the appellant's abilities and in her circumstances ought to have first known that she had a claim against the respondent for breach of contract, negligence, or breach of fiduciary duty for recommending an improvident settlement.
The Court found that the motion judge erred in her interpretation and application of s.5(1) of the Limitations Act, 2002, because the appellant did not have knowledge that she had a claim against Silverman until she learned about it from her current counsel. No issue was ever raised about the propriety of the settlement, and the respondent never advised or suggested to the appellant that she had made an error and continued to act for the appellant in pursuing her further rights arising out of the car accident.
Moreover, her current counsel was not aware of any potential action until receipt of the expert medical-legal opinion. The motion judge misapprehended the significance of that expert opinion, which was the first indication to the appellant, as well as her new lawyer, that her injuries from the accident were very significant and warranted greater compensation than she had received from the settlement.
Moreover, because the appellant had no reason to believe there was anything to investigate with respect to a potential claim against the respondent, it was not unreasonable for her to take just over a year before seeking further legal assistance to pursue her statutory accident benefits claim, and she exercised due diligence in discovering her claim.
[Hoy A.C.J.O, and Blair and Pepall JJ.A]
Sheila Block, Scott A. Bomhof, Andrew Gray, Adam M. Slavens and Jeremy Opolsky, for the moving parties, the U.S. Debtors
Richard B. Swan, S. Richard Orzy and Gavin H. Finlayson, for the moving party, the Ad Hoc Group of Bondholders
David R. Byers and Daniel S. Murdoch, for the moving party, the Conflicts Administrator of Nortel Networks S.A.
Shayne Kukulowicz, Michael Wunder, Ryan Jacobs, Geoffrey Shaw and Jane Dietrich, for the moving party, the Official Committee of Unsecured Creditors of Nortel Networks Inc. et al.
Andrew Kent, Brett Harrison and Laura Brazil, for the moving
party, The Bank of New York Mellon as Indenture Trustee
Steven L. Graff, Ian Aversa and Miranda Spence, for the moving party, the Nortel Trade Claims Consortium
Michael E. Barrack, D.J. Miller, John L. Finnigan, Michael S. Shakra and Andrea McEwan, for the responding parties, the Board of the Pension Protection Fund and Nortel Networks U.K. Pension Trust Ltd.
Benjamin Zarnett, Jessica Kimmel, Peter Ruby and Peter Kolla, for the responding party, the Monitor, Ernst & Young Inc.
Kenneth Kraft and John Salmas, for the responding party, Wilmington Trust, National Association
Derrick Tay and Jennifer Stam, for the responding parties, the Canadian Debtors
Kenneth Rosenberg, Lily Harmer and Massimo Starnino, for the responding party, the Superintendent of Financial Services as Administrator of the Pension Benefits Guarantee Fund
Mark Zigler and Ari Kaplan, for the responding parties, the Former Employees of Nortel and LTD Beneficiaries
Arthur O. Jacques, Paul Steep and Byron Shaw, for the responding party, the Canadian Creditors' Committee
Barry E. Wadsworth, for the responding party, CAW-Canada
Matthew P. Gottlieb and Matthew Milne-Smith, for the responding parties, the Joint Administrators of the EMEA Debtors other than Nortel Networks S.A.
Keywords: Bankruptcy and Insolvency, Companies' Creditors Arrangement Act, Section 13, Leave to Appeal, Sattva Capital v Creston Moly
In 2009, Nortel Networks Corp and the other Nortel Canadian Debtors filed for insolvency protection under the Companies' Creditors Arrangement Act (CCAA). Additionally, Nortel Networks Corp filed bankruptcy claims in the US as well as overseas in Europe. More than seven years later, these insolvency proceedings continue.
The leave motions now before this court arise from the joint trial dealing with the allocation of Lockbox Funds. These proceedings moved forward as a joint trial, and were heard by one judge at the Ontario Superior Court, Newbould J., and Judge Gross of the US Bankruptcy Court for the District of Delaware. Each judge rendered separate decisions on May 12, 2015, and each concluded that the LockBox Funds should be allocated on a pro rata basis among the various Nortel debtor estates.
Appeal proceedings were initiated in Canada and the US. The moving parties seek leave to appeal the trial judge's judgment pursuant to s. 13 of the CCAA. The debtors submit that the trial judge made fundamental errors and that the proposed appeal is of significance to the practice of insolvency and to the parties, and will not delay the completion of CCAA proceedings.
The responding parties submit that the record supports that the trial judge's factual findings, which were integral to his analysis, including his findings that Nortel's assets were jointly created, that the Nortel group of companies operated on a fully-integrated global basis and that Nortel did not operate separate businesses in separate countries. In their submission, the proposed appeal is not prima facie meritorious. In addition, the remaining elements of the test for leave to appeal under the CCAA have not all been met.
Issue: Was the test for leave to appeal met?
Holding: Motions for Leave to Appeal Dismissed
The court dismissed the moving parties' motions for leave to appeal. The court cited section 13 of the CCAA, which provides that any person dissatisfied with a decision made under the Act, may appeal from the decision with leave. Leave to appeal is granted sparingly in CCAA proceedings and only where there are serious and arguable grounds that are of real and significant interest.
In addressing whether leave should be granted the court considered four key factors: (a) the proposed appeal is prima facie meritorious or frivolous; (b) the points on the proposed appeal are of significance to the practice; (c) the points on the proposed appeal are of significance to the action; and (d) whether the proposed appeal will unduly hinder the progress of the action.
(A) Whether Appeal is Prima Facie Meritorious
The moving parties argued that leave should be granted because the appeal is prima facie meritorious. They raised three main issues, substantive consolidation, the interpretation of the Master Research and Development Agreement (MDRA) and the question of fairness.
The court held that the moving parties' arguments on substantive consolidation are not prima facie meritorious. The court noted that the trial judge concluded that pro rata allocation was appropriate, that it did not amount to substantive consolidation, and that even if it could be said that a pro rata allocation involved substantive consolidation, it was not precluded by law in the unique circumstances of the case.
The court held that there was no prima facie merit to the argument that they should interfere with the trial judge's conclusion that the allocation decision did not amount to substantive consolidation. His conclusion was based on the nature and effect of his allocation decision and his factual findings. The court also rejected the moving parties' submissions of the interpretation of the MRDA. The moving parties suggested that the trial judge erred in his interpretation of the MRDA and failed to pay attention to the Supreme Court's decision in Sattva. The court was not persuaded that there was any reason to interfere with the trial judge's interpretation of the agreement on the basis of a palpable and overriding error.
Further, the court was not persuaded that there was a prima facie merit to the argument that the allocation was arbitrary. The court held that the trial judge was alive to the fairness concerns and gave reasons for adopting the approach he did after careful consideration of the evidence and argument at trial. Finally, the court was not persuaded that there was any merit to the argument that the allocation violates the rule that equity holders get paid after creditors.
(B) Significance of Issues to the Practice
The moving parties' submitted that the trial judge's decision presents important issues of first impression in the cross-border insolvency context. The moving parties submitted that without their intervention, there is a risk substantive consolidation will become far more widely available. The court held that the facts in this case were unique and exceptional. The court already mentioned that substantive consolidation is not engaged so this case would not provide an opportunity for the court to provide guidance on that question. Further, the court held that this case does not engage any issues that require any clarification on the application of Sattva. In short, the court held that granting leave would not provide an opportunity for the court to provide guidance on legal issues of significance to the practice.
(C) Significance of Issues to the Action
The moving parties state that the allocation of the LockBox Funds is the overriding issue in the CCAA proceedings.
The court accepted that the allocation of the Lockbox Funds was a significant issue in this proceeding. With that being said, the court was of the view that, standing alone, this factor is insufficient to warrant granting leave to appeal.
(D) Progress of the Proceedings
The moving parties submitted that the proposed appeal will not unduly hinder the process of Nortel's CCAA proceeding. The moving parties also argued that there are no operating businesses that are in the process of restructuring because the Nortel businesses and assets have been liquidated and the joint trial was a "stand-alone component" of the CCAA proceeding. Thus, the traditional concerns leading courts to "sparingly" grant leave to appeal in CCAA proceedings are not applicable here.
The court stated that prior litigation served as warning to the risk of additional delays and potential for conflicting decisions if the parties failed to reach a negotiated settlement. Numerous mediations have been ordered but have failed. Furthermore, the fact that this case is a liquidation and not a restructuring does not render delay immaterial, where so many individuals and businesses continue to await a resolution of this proceeding. The potential of an interim distribution, remote or otherwise, does not alter this reality. In addition, the parties acceded to a liquidation under the CCAA. They cannot now reject the parameters of that statute, which requires leave to appeal, and where the jurisprudence on the applicable test is settled and long-standing. Lastly, the court held that it was unnecessary to discuss the issue on standing, as it would have dismissed the other leave motions for the same reasons.
[Hoy A.C.J.O., Blair and Roberts JJ.A.]
Cheryl Obermuller, in person
Adam Pantel, for the respondents, Iler Campbell and Celia Chandler
Farzin Yousefian, for the respondent, Joseph Van Tassel
Luke Saites, for the respondents, Kenfinch Co-operative Housing Inc. and Josephina Boto
Margaret Leighton, for the respondent, Sylvia Watson
Keywords: Civil Procedure, Vexatious Litigants, Frivolous and Vexatious Proceedings, Abuse of Process, Res Judicata, Rules of Civil Procedure, Rule 2.1.01
The appellant claimed damages related to her eviction from her co-operative housing unit at the Kenfinch Co-Operative ("Kenfinch"), based on her persistent and substantial rent arrears, and Kenfinch's refusal to grant her subsidized rent request. The appellant's action was commenced following numerous proceedings, starting with an eviction order by the Landlord and Tenant Board. In response to requisitions received from some of the respondents, the motion judge directed the registrar to send a notice to the appellant that the court was considering dismissing her action under Rule 2.1.01 of the Rules of Civil Procedure, for being frivolous, vexatious, or an abuse of process. The registrar sent a notice to the appellant in Form 2.1A. The appellant did not provide submissions. The motion judge dismissed the appellant's action under Rule 2.1.01. The appellant appealed the dismissal.
(1) Did the motion judge err in dismissing the action when there was no motion for summary judgment and no hearing was held?
(2) Did the trial judge err in dismissing the action against all respondents because no requisitions were filed by the respondents, Kenfinch and Josephine Boto?
(3) Did the appellant fail to receive the required notice under Rule 2.1.01 and was therefore deprived of the opportunity to make submissions?
(4) Did the appellant's statement of claim set out claims for damages that were not the subject of the eviction or her subsidized rent proceedings?
Holding: Appeal dismissed
(1) No. Rule 2.1.01 permits the summary disposition of an action without a public hearing, on the court's own initiative and without requisitions being submitted by the parties, although the plaintiff must be given the opportunity to provide written submissions, as was done in the present case. It was apparent on the face of the statement of claim that the appellant's action was clearly an abuse of process, frivolous and vexatious, because it was an attempt by the appellant to re-litigate the outcome of the other proceedings related to the eviction and rent subsidy proceedings in which she was unsuccessful and which were finally determined against her.
(2) No. The appellant had no reasonable cause of action against Josephina Boto for providing an affidavit of service, or against Kenfinch's lawyers who owed no duty of care to the appellant in the circumstances of this case.
(3) No. The record established that the appropriate notice to the appellant under Rule 2.1.01 was sent to all parties by mail as required under Rule 2.1.01(4). The respondents acknowledged receipt of the notice. It was sent to the appellant at the address set out by the appellant on her statement of claim. The appellant did not provide any evidence that she did not receive it. The appellant failed to deliver submissions within the time provided by Rule 2.1.01 and did not seek an extension of time to provide submissions or offer evidence of any reasonable excuse as to why she should be relieved of compliance with the fifteen-day deadline under that rule.
(4) No. The appellant's claim for damages for the same complaints that were or could have been raised in previous proceedings did not change the fact that the same issues were already or could have been determined in those proceedings and cannot be re-litigated in her action.
[Laskin, Pepall and Brown JJ.A.]
Geoffrey Wells and Ryan Kniznik, for the appellant
Giannandrea, for the respondent
Richard Startek, for Pawan Sharma
Keywords: Family Law, Equalization of Net Family Property, Existence of Debt, Non-Arm's Length Creditor, Spousal Support, Imputed Income, Vesting Orders, Courts of Justice Act, s. 100, Family Law Act, s. 9(1), Security for Payment, Matrimonial Home
This is an appeal of a trial judge's decision on debt, spousal support and vesting orders in a family law matter. At the outset of the appeal, the appellant's brother ("Pawan") was added as a party on the basis that he had an interest in the claim and that he was adversely affected by the judgment at trial. The court declined the appellant's ("Tarun") request for a new trial stating that the parties had agreed to the value of the properties and that the court was in position to correct any errors made by the trial judge.
(1) Did the trial judge err by failing to find that Tarun had a debt to his brother of $265,000 arising from their joint real estate investments?
(2) Did the trial judge err in determining Tarun's income?
(3) Did the trial judge err in making vesting orders in favour of Mrs. Sharma for two of the three properties in issue in these proceedings?
Holding: Appeal dismissed.
(1) No. The trial judge's finding that Tarun's claim that he owed his brother a $265,000 debt arising out of their real estate investments as "not plausible" was supported by the evidentiary record. Tarun alleged that the debt was connected to a $20,000 advance by Pawan to help him and his wife purchase their first home. The brothers claimed that the $20,000 was for a half interest in the home that was never repaid and that Pawan's interest in the home had increased in value because of the parties' subsequent real estate purchases.
The trial judge reasonably inferred that Pawan had been repaid based on the $23,000 Pawan had placed as a down payment on his own home. Also, the trust agreement and the later transfer signed by Pawan showed he had no beneficial interest in the property. Pawan could not provide any documentation that showed that he had made ongoing cash contributions to the upkeep of the property as he claimed.
(2) No. The trial judge increased Tarun's annual income from what Tarun had listed on a bank application. The increase was based on Tarun's comfortable lifestyle which included ownership of three cars and rather expensive vacations. Regardless of whether this increase was justified, the spousal support order was low.
(3) No. As security for payment owed by Tarun, the trial judge vested two condominiums to Mrs. Sharma which he was entitled to do under s. 100 of the Courts of Justice Act, and s. 9(1) of the Family Law Act. The trial judge was right to vacate his earlier vesting order for the matrimonial home to Mrs. Sharma as security for the money owing to her.
Tarum's request not to vacate the matrimonial home within 90 days was granted. After 90 days, the home was ordered to be sold with Mrs. Sharma having control of the sale. Mrs. Sharma advised that she was planning to sell the condominiums and if after calculating the net proceeds of sale of all three properties, the total amount is less than the amount owing to Mrs. Sharma, Tarun remains liable for the deficiency and conversely, any excess shall be paid to him.
[Doherty, Pardu and Benotto JJ.A.]
Jonathan C. Lisus and James Renihan, for the appellants
Larry P. Lowenstein, Gillian S.G. Scott, and Geoffrey J. Hunnisett, for the respondents
Keywords: Franchise Law, Franchise Agreements, Duty of Good Faith and Fair Dealing, Arthur Wishart Act (Franchise Disclosure), 2000, Reasonable Cause of Action, Rules of Civil Procedure, Rule 21
Facts: The appellants are long-standing dealers of General Motors vehicles in the Greater Toronto Area (GTA). Their dealer agreements are with General Motors Canada Limited (GMCL). GMCL was a subsidiary of General Motors Corporation (GM) in the United States. In 2009, GM commenced bankruptcy proceedings in the United States. GM's assets were transferred to a new company, General Motors Company, or its subsidiary, General Motors LLC (collectively GM US). As part of the reorganization process, GM US acquired the shares of GMCL. The governments of Ontario and Canada invested substantial funds in GM US and became shareholders. GM US then emerged from bankruptcy. As a result of the financial difficulties, GMCL restructured its dealer network. GMCL informed the appellants that their dealerships would be among those retained in its new dealer network, should they agree to certain conditions. Some of the appellants were offered Transition Assistance Agreements. Some of the appellants were also offered Participation Agreements with GMCL. In 2010, the appellants signed Dealer Sales and Service Agreements (DSSAs) with GMCL. There was an issue on the motion below that the DSSA was not a franchise agreement since the dealers paid no franchise fee. The motion judge proceeded on the assumption that it was a franchise agreement under the Arthur Wishart Act (Franchise Disclosure), 2000 (AWA). The appeal was argued on this basis. The appellants' claim centers on allegations that GM US and GMCL owed and breached their duty to act fairly and in good faith under the AWA and at common law. They allege that GM US and GMCL preferred their own profit to the dealers' interests and that this is reflected through changes in vehicle offerings, pricing, and the lack of financial help. Also, the appellants say that GM US financially assisted US dealers, yet ignored its duty to the GTA dealers. The motion judge dismissed the claims.
Issues: The issues that arise are whether it is plain and obvious that GM US:
- Could not owe a duty of good faith or fair dealing to the appellants under the AWA; and
- Could not owe a duty of good faith or fair dealing to the appellants at common law.
Holding: Appeal allowed.
Section 1 of the AWA sets out a two-part test in the definition of a "franchisor's associate." It is a person: (a) who, directly or indirectly, (i) controls or is controlled by the franchisor, or (ii) is controlled by another person who also controls, directly or indirectly, the franchisor, and (b) who, (i) is directly involved in the grant of the franchise, (A) by being involved in reviewing or approving the grant of the franchise, or (B) by making representations to the prospective franchisee on behalf of the franchisor for the purpose of granting the franchise, marketing the franchise or otherwise offering to grant the franchise, or (ii) exercises significant operational control over the franchisee and to whom the franchisee has a continuing financial obligation in respect of the franchise.
Here, under the first branch, the motion judge erred in concluding that the grant of the franchise occurred well before GM US was in existence, and therefore GM US could not be "directly involved in the grant of the franchise". Letters evidenced that GM US was making decisions about the grant of the franchise and setting terms. Under the second branch of the definition, the motion judge erred in finding that the appellants failed to plead the material facts necessary to sustain an argument that GM US exercised significant operational control and that the franchisees owed GM US a continuing financial obligation. The pleadings allege that GM US exercises significant operational control and direction over GMCL and the appellants through the terms of the DSSA and the Participation Agreements. If the facts are viewed in the most generous light possible to the appellants, it cannot be said that it is plain and obvious that GM US was not a franchisor's associate. The test is not whether it is likely or unlikely that the claim will succeed, it is whether it is plain and obvious that it cannot.
Section 3 of the AWA provides that every franchise agreement imposes on each party a duty of fair dealing and good faith in its performance and enforcement. The motion judge erred in finding that, even if GM US was found to be a franchisor's associate, it did not owe a duty of fair dealing to the appellants under s.3 because it was not a party to the franchise agreement. The motion judge's approach to this issue demonstrates a misapplication of the rule 21 test. Instead of asking himself whether the s. 3(2) duty of good faith could not apply to a franchisor's associate, he asked if a franchisor's associate is deemed to be a party to the franchise agreement. The issue before the motion judge was not to determine whether a franchisor's associate is "deemed" to be a party to every franchise agreement. The issue was whether, on the facts pleaded, it was plain and obvious that GM US could never owe a duty to the appellants under s. 3(2) of the AWA. By framing the issue in the way he did, the motion judge embarked on a flawed approach.
2. The motion judge erred in dismissing the appellants' claims that GM US breached the duty to act fairly and in good faith under the DSSA and the common law. Despite the lack of a direct contractual relationship between the appellants and GM US, it is not plain and obvious that GM US could not owe a duty of good faith to the Canadian dealerships. That the cause of action may or may not be a weak one is not determined on a motion under rule 21. The relationship between a franchisor and franchisee is one of vulnerability for the franchisee. In addition to the statutory protections, a duty of good faith exists at common law in the context of this relationship. Further, the obligations of a party in a franchise relationship differ from those in a regular commercial relationship. Whether the level of control alleged and the special obligations owed in the context of a franchise relationship could open the door for the imposition of a common law duty is a novel argument that should be explored at trial. While it may be that the common law claim is untenable as a matter of law, and it may be that in light of s.3 of the AWA it is redundant, however it is not plain and obvious that it cannot succeed.
[Gillese J.A. (In Chambers)]
Peter Jervis, for the moving party
Andrea L. Di Battista, for the responding party
Keywords: Wills and Estates, Joint Ownership, Right of Survivorship, Bank Accounts, Summary Judgment, Extension of Time to Appeal
The appellant and respondent were brother ("Mr. Laski") and sister ("Ms. Laski"). Mr. Laski, commenced legal proceedings in respect of their father's estate in June 2012 where he challenged his sister's right to certain joint accounts in the names of her and their father prior to their father's death (the "joint accounts"). Their father (the "Testator") specified in his will that any assets owned jointly with Ms. Laski were owned with right of survivorship, and should pass to her if he predeceased her.
Both parties brought a summary judgment motion raising the issue of ownership of the joint accounts. Mr. Laski submitted that Ms. Laski had exerted undue influence over the Testator during the period of time that he transferred assets to a joint account with Ms. Laski. The motion judge rejected Mr. Laski's allegations and found no evidence that the Testator was vulnerable to any undue influence at the time. In addition, all parties conceded that there were no issues with respect to the Testator's mental capacity.
By order dated January 28, 2016 (the "Order"), Ms. Laski's motion was granted and Mr. Laski's motion was dismissed. The result of the Order was that the joint accounts were declared to have passed by right of survivorship to Ms. Laski and did not form part of their father's estate. Mr. Laski brought a motion before the court of appeal to extend the time to file a notice of appeal from the Order.
Issues: Should Mr. Laski be granted an extension of time to file a notice of appeal from the Order?
Holding: Motion dismissed.
No. The court stated the test to meet for a motion to extend time to file a notice of appeal was whether the "justice of the case" required that an extension be given. The court found the justice of the case did not warrant an extension of time to file a notice of appeal.
It discussed Mr. Laski's motion based on the four considerations of the test: 1. the moving party's intention to appeal, 2. the reason for delay in filing, 3. any prejudice to the responding parties caused by the delay and 4. the merits of the proposed appeal.
Although the court found the length of delay in filing the notice of appeal was short (less than three weeks), it took issue with the explanation for the delay. Mr. Laski had submitted that he practiced in the field of criminal law and was not experienced with respect to civil appeals, and did not realize that he had missed the deadline. However, it was presented to the court that less than two years ago, he served as counsel both on a summary judgment motion and on an appeal against the resultant decision to the court of appeal.
The court found no prejudice to the responding parties caused by the delay, but found that Mr. Laski failed to show any merit in his proposed appeal. It found no merit on grounds relating to how the motion judge handled credibility, or on grounds going to the merits of the Order.
With regard to credibility, there was nothing to the submission that the motions judge failed to properly consider the credibility issues that Mr. Laski raised in respect of Ms. Laski. The motions judge dealt with those matters, pursuant to her powers under rule 20.04(2.1) which empowers her to weigh the evidence and evaluate credibility. With regard to the Order, the court found Mr. Laski's submissions were bald generalized assertions that essentially said the motions judge erred in everything she decided. The court found that the motion judge's findings were entitled to deference and Mr. Laski had not pointed to any error in those findings.
[Sharpe, LaForme and van Rensburg JJ.A.]
Rui Fernandes and David Huard, for the appellants
Philip Cho, for the respondent
Keywords: Contracts, Carriage of Goods, Bills of Lading, Exclusion Clauses, Unconscionability, Highway Traffic Act, Carriage of Goods Ontario Regulation 643/05, s.9, s.10
National hired Celadon to transport copper tubing shipments from Mexico to Ontario. The shipments were hijacked in Mexico and National submitted a claim for loss and damage. Celadon denied both claims relying on exclusion of liability clauses contained in its Rules and Regulations, which were posted on its website.
National commenced an action to recover damages. The trial judge found that Celadon could not rely on the exclusions as it did not notify National of those terms and in any event the exclusions were unconscionable. She also found that the value of the goods had been declared on the commercial invoice contained in the shipping documents and that those documents formed part of the contract of carriage. Celadon thus could not rely on the statutory limitation of liability pursuant to Carriage of Goods, O. Reg. 643/05 under the Highway Traffic Act.
The trial judge also found that, independent of the carriage agreement, Celadon was liable in negligence because it had specific knowledge of the enhanced risk of hijacking in Mexico, which gave rise to a duty to warn.
(1) Did the exclusion of liability clauses contained in Celadon's Rules and Regulations apply to the shipments in question?
(2) Was liability limited by s. 9 of Schedule 1 of Ontario Regulation 643/05, as the contract was governed by Ontario law?
(3) Was Celadon liable in tort for failing to warn National of the increased risk of shipping goods from Mexico?
Holding: Appeal Allowed in Part.
(1) No. The Court reasoned that the applicability of the exclusionary terms was a question of mixed fact and law that attracted deference on appeal. It rejected Celadon's contention that the trial judge erred by failing to take into account the entire factual matrix concerning the applicability of any limitation of liability. The parties had previously contracted for the shipment of goods and the trial judge took into account an e-mail sent by Celadon to National confirming the contract of carriage. The trial judge's finding was not tainted by legal error and was clearly supported by the record.
Celadon also submitted that National had sufficient notice of the exclusionary clause following the first shipment because of Celadon's response to National's claim for the value of the goods lost. The Court also rejected this submission, finding instead that Celadon's rejection of the claim was equivocal at best and because National was not advised that its claim was rejected prior to a November 2011 shipment.
(2) No. The Court reviewed that s.9 provides that carrier liability is limited unless s.10 is satisfied. Section 10 provides the following:
If the consignor has declared a value of the goods on the face of the contract of carriage, the amount of any loss or damage for which the carrier is liable shall not exceed the declared value.
The trial judge had found that because a copy of the commercial invoice issued by the Mexican consignor to National was provided to the carrier, s.10 was satisfied. The Court found that this was an error in law as the consignee must declare the value of the goods on the face of the contract of carriage. The bill of lading used for these shipments included a space to show the declared value of the shipment, but this space was not completed.
(3) No. The Court agreed with Celadon that the trial judge erred by holding that it could be liable in tort. It reasoned that any failure or neglect on Celadon's part concerning the shipments arose directly out of the duties associated with performance of the contract of carriage and did not give rise to an independent duty in tort.
[MacFarland, Rouleau and Roberts JJ.A.]
Jeffrey E. Streisfield, for the appellant
Izaak de Rijcke and Robert Fenn, for the respondent
Keywords: Costs Endorsement, Reasonableness, Fairness, Proportionality
Facts: The appellant passed away on July 26, 2015. An order to continue the proceedings was granted to the appellant on March 15, 2016. The appellant claims overall success in these proceedings and seeks partial indemnity costs of the first and second trials, the related proceedings, and of this appeal, in the all-inclusive amount of $410,000.00. The appellant is not seeking to overturn this court's cost award of $25,000.00 dated May 16, 2012 that was granted to the respondent on her successful appeal of the first trial judgment. The appellant submits that this cost award in favour of the respondent should be set off against any costs awarded to the appellant. The respondent argues that the appellant is not entitled to any costs and that she should be awarded her costs.
Issue: Should the cost award be varied?
Holding: This endorsement disposes of the costs related to the appeal and related proceedings.
It is well established that the overarching principles to be applied in dealing with the costs of any proceeding are reasonableness, fairness and proportionality. A large cost award as claimed by the parties is not unreasonable, unfair or disproportionate in light of the following factors: the first trial lasted 19 days and the second trial took 13 days; there were numerous pre-trial motions and other proceedings; complicated and technical expert evidence was presented by both sides; and there were a myriad of difficult legal issues fiercely argued by the parties before both judges. Further, there is no issue that the outcome of these proceedings was exceedingly important to the parties, so important, that the issue of ownership over the appellant's property has lasted over twenty years and survived the appellant who sadly passed away only about a month after this appeal was argued. However, the respondent's actions in these proceedings were neither proportionate nor reasonable. While the amount of costs claimed is understandable in the circumstances of this case, it is truly regrettable that the proceedings carried on to this point. The outcome of this appeal for the respondent was not significantly better than the appellant's 1995 offer and that, had the respondent accepted that or a similar offer, all of these proceedings could have been avoided. The costs of the first trial were ordered by this court to be "in the cause". The first judgment was overturned in this court as the result of a reasonable apprehension of bias going to the fairness of that trial and not on the merits. The appellant has been largely successful in the result and is entitled to his costs throughout. That being said, the Court finds that the costs claimed by the appellant for the two trials to be too high. The Court is of the view that the amount of $282,000.00, inclusive of all amounts, as costs for the two trials, is fair, proportionate and reasonable in the circumstances of this case. The appellant is also entitled to his costs of this appeal.
SHORT CIVIL ENDORSEMENT
[Laskin, Pepall and Brown JJ.A.]
James Cooper, for the appellant, Arif Sahinbay
Joanne Blacklock and Nicholas Ajram, for the respondents
Keywords: Civil Law, Self-Representation, Fair Trial
ONTARIO REVIEW BOARD DECISION
[Weiler, Simmons and Epstein JJ.A.]
Thomas Whillier, for the appellant
Barbara Walker-Renshaw, for Ontario Shores Centre for Mental Health Sciences
Davin M. Garg, for the Attorney General of Ontario
Keywords: Ontario Review Board, Criminal Law, Public Safety, Conditional Discharge
[Weiler, Simmons and Epstein JJ.A.]
Suzan E. Fraser, for the appellant
Janice E. Blackburn, for St. Joseph's Healthcare
Chris Chorney, for the respondent Attorney General of Ontario
Keywords: Criminal Law, Criminal Harassment, Not Criminally Responsible, Public Safety
CRIMINAL LAW DECISIONS
[Strathy C.J.O., Pardu and Benotto JJ.A.]
Daniel J. Brodsky, for the appellant
Shawn Porter, for the respondent
Keywords: Criminal Law, Sexual Assault, Error, Adverse Inference
[Feldman, Simmons and Pepall JJ.A.]
Apple Newton-Smith, duty counsel
Michael Medeiros, for the respondent
Keywords: Criminal Law, Inference, Failure to Testify
[Feldman, Simmons and Pepall JJ.A.]
Brian Snell, duty counsel
Howard Leibovich, for the respondent
Keywords: Criminal Law, Driving a Car While Disqualified, Assault, Admission, Evidence, Unreasonable Verdict
[Les juges Rouleau, Pardu et Benotto]
Russell Silverstein, for the Appellant
Davin M. Garg, for the Accused
Keywords: Criminal Law, Eyewitness Testimony, Memory Impairment, Appeal Dismissed
[Blair, Tulloch and Pardu JJ.A.]
James Foord, for the appellant, Jesse Brouillard
Michael Davies, for the appellant, Steven Taing
Scott Latimer, for the respondent
Keywords: Criminal Law, Aggravated Assault, Misapprehension of Evidence
[Weiler, Simmons and Epstein JJ.A.]
Ian McLean, for the appellant Nicholas Lapierre
Michael Smith and Jessica Abou-Eid, for the appellant Joseph Abouchakra
Holly Loubert, for the respondent
Keywords: Criminal Law, Self-Defence, Air of Reality, Sentencing
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