The Court of Appeal has released a variety of cases this week dealing with such topics as wrongful dismissal, bankruptcy and insolvency, pensions, real estate, and residential landlord and tenant. The most notable decision by far this week is the Groia v. The Law Society of Upper Canada decision in which the court dismissed the member's appeal from his conviction for professional misconduct. Apparently, according to the Toronto Star, Mr. Groia will be seeking leave to appeal to the Supreme Court of Canada, so this long-running saga is not over yet.
[Sharpe, Juriansz and Roberts JJ.A.]
Michael J. Kennedy, for the appellant
James A. Renaud and Matthew R. Todd, for the respondent
Keywords: Labour and Employment Law, Collective Agreements, Employment Insurance Act, Insurance Premium Reductions, Labour Relations Act, Jurisdiction, Weber v. Ontario Hydro, Parry Sound (District) Social Services Adinistratio Board v. OPSEU Local 324
The respondent is president of his union and claims that his employer, the appellant, failed to provide him and other affected employees with employment insurance premium reductions that the appellant had received under the Employment Insurance Act ("EIA"). The appellant moved under r. 21.01(3)(a) of the Rules of Civil Procedure for an order dismissing the respondent's action on the basis that the court lacked jurisdiction to entertain the matter. The motion judge rejected the appellant's argument that exclusive jurisdiction lay with a labour arbitrator.
- Does s. 48(1) of the Labour Relations Act (the "LRA") require an arbitrator first to determine whether the dispute between the parties is arbitrable?
- Did the motion judge err by relying on the Hershey/Rathwell line of cases?
- Did the motion judge err by not applying the Supreme Court's decision in Parry Sound?
- Firstly, this argument was not raised before the motion judge. Secondly, in an earlier case identical to the present, an arbitrator decided he did not have jurisdiction over the dispute. Thirdly, this action is old and it is therefore in the interest of both parties that the question of jurisdiction be resolved without additional delay.
- While the Hershey/Rathwell cases involved claims by unionized employees where the employer had failed to rebate to employees the statutorily required portion of the premium reduction under the Employment Insurance Premium Reduction Program, the previous courts did not determine the Weber issue that is raised in the present case. The Weber analysis requires that a dispute be decided by an arbitrator and not the courts if the "essential character" of the dispute arises either explicitly or implicitly from the interpretation, application, administration or violation of the collective agreement.
The motion judge relied too heavily on the Hershey/Rathwell line of cases in conducting the Weber analysis and erred in his legal characterization of the dispute. Instead, the motion judge needed to decide whether the facts of the dispute fell within the ambit of the collective agreement.
- The Court adopted the reasons in British Columbia Teacher's Federation v. British Columbia Public School Employers' Association as giving proper effect to the statute's provisions as interpreted by the Supreme Court in Parry Sound. Namely, the question is whether there is a real contextual connection between the statute and the collective agreement such that a violation of the statute gives rise to a violation of the provisions of the collection agreement. In applying this test, one must remember Weber's caution that the nature of the dispute is based upon the factual context in which it arises, regardless of how it may be legally characterized.
The provisions at play in this case can be characterized as "employment-related" under s. 48(12)(j) of the LRA. Under the scheme of the EIA, the employer is obligated to remit to employees a specified share of the premium reduction. In turn, the employees are entitled to receive their specified share of the premium reduction in the form of cash or enhanced employee benefits. Their entitlement is a substantive right and informs the interpretation and application of the collective agreement. It is therefore a violation of the collective agreement to fail to provide employees with the pay or benefits to which they are entitled under the collective agreement. This is the "essential character"` of the dispute and, consequently, the employer's alleged violation of the statute would give rise to a violation of the provisions of the collective agreement.
[Hoy A.C.J.O., Blair and Roberts JJ.A]
D. March, for the appellants
D. J. Dacquisto and J. B. Tausenfreund, for the respondent
Keywords: Civil Procedure, Dismissal of Third Party Claim, Dissolved Corporation, Rules of Civil Procedure, RRO 1990, Reg 194, Business Corporations Act, R.S.O. 1990, c. B-16, s. 242(1)
The appellant is a defendant in the main action that was commenced on August 14, 2000. The appellant brought a third party claim against the respondent on January 31, 2001. The respondent delivered a statement of defence to the third party claim on April 29, 2004.
The respondent brought a motion to dismiss the third party claim for delay even though it had been dissolved since December 27, 2016. The motions judge granted the motion.
(1) Did the motions judge err in giving the respondent standing to bring the motion, given that it was dissolved?
(2) Can a third party claim be dismissed for delay when the main action has not been dismissed for delay?
(3) Did the motion judge err in finding prejudice resulting from the death of the respondent's former principal?
Holding: Appeal dismissed.
(1) No. Under s. 242 of the Ontario Business Corporations Act ("OBCA"), a dissolved corporation remains capable of taking certain actions after it is dissolved, without first being revived, and does not cease to exist for all purposes upon dissolution. Nothing under this section requires that a corporation be revived before an action can be continued. It will not always be necessary to revive a dissolved corporation in order to effectively continue a claim brought by it before dissolution or defend a claim made against it. Ss. 242(1)(a),(c) and 243 provide avenues where this situation arises.
(2) Yes. Rule 29.08(2) allows the court to order that the trial of the third party claim take place before the trial of the main action. Where the third party claim involves discrete issues unrelated to the main action such that the determination of those issues is not dependent on the outcome of the main action, it may be possible to have the third party trial before the main action. In such a case, delay in the main action does not justify delay in a third party claim.
(3) No. The delay in delivering the statement of defence in 2004 was not unreasonable. Further, the appellant had been put on notice that the respondent was alleging prejudice because of delay. Therefore the appellant should have taken steps to ready the third party claim for trial. At the time of the former principal's death, the appellant had yet to deliver an affidavit of documents, as required under the Rules, nor taken any steps to get the matter ready for trial. Inordinate delay in this case gave rise to a presumption of prejudice which the appellant failed to rebut.
[MacPherson, Cronk and Brown JJ.A.]
Counsel:A. Cherniak, Q.C. and J. T. Akbarali, for the appellant
T. Curry, J. E. Lilles and A. Porter, for the respondent
Reid and J. Cornish, for the Intervener, Attorney General for Ontario
J.J. Cavalluzzo and N. Lambek, for the Intervener, Ontario Crown Attorneys' Association
J. O'Sullivan, M. R. Law and D. Templer, for the Intervener, The Advocates' Society
F. Zwibel, for the Intervener, Canadian Civil Liberties Association
A. Olah and E. Meehan, Q.C., for the Intervener, Canadian Defence Lawyers Association
Rouben, D. Nicholson and D. Romaine, for the Intervener, Ontario Trial Lawyers Association
Parker and A. Chaisson, for the Intervener, Criminal Lawyers' Association
Keywords: Administrative Law, Regulation of Professions, Lawyers, Discipline, Professional Misconduct, Law Society Act, Rules of Professional Conduct, Rule 4.01, Civility, Judicial Review, Standard of Review, Reasonableness, Dunsmuir v. New Brunswick, 2008 SCC 9,  1 S.C.R. 190
On appeal to this court, Joseph Groia challenges the Law Society Appeal Panel's findings of professional misconduct against him in relation to his in-court conduct towards opposing counsel. He also appeals the associated penalty and adverse costs award imposed by the Appeal Panel in light of those findings. The Divisional Court upheld the Appeal Panel's decisions and costs award.
As an experienced securities litigator, Mr. Groia defended John Bernard Felderhof, a senior officer and director of Bre-X Minerals Ltd., on eight charges of violating the Securities Act. In November 2009, after the trial had concluded and Mr. Felderhof was acquitted of all charges, the Law Society initiated disciplinary proceedings against Mr. Groia alleging that he had engaged in professional misconduct while defending Mr. Felderhof.
Disputes arose between counsel in the Felderhof case almost immediately, and Mr. Groia made allegations of serious prosecutorial misconduct by the Ontario Securities Commission ("OSC") prosecutors. The allegations resulted in several motions and submissions before the trial judge which consumed much of the court's time. By day 70 of trial, the toxic relationship between Mr. Groia and the OSC prosecutors was sufficiently pervasive as to overtake the orderly and normal progress of the trial.
The OSC prosecutors subsequently brought an application for judicial review, arguing that Mr. Groia had repeatedly engaged in uncivil conduct in violation of the Law Society of Upper Canada's ("LSUC") Rules of Professional Conduct, and that, by failing to control this unacceptable conduct, the trial judge had lost jurisdiction and a new trial should be ordered.
While the application judge (and later, the Court of Appeal in a prior decision) both found Mr. Groia's conduct to be improper, inappropriate and misconceived in law in many instances, they dismissed the judicial review application seeking a mistrial and held that Mr. Groia's impugned conduct had not impaired trial fairness or prevented the OSC from presenting its case. By the end, the Felderhof trial had consumed 160 days of court time, spanning almost seven years, including the time devoted to the judicial review application and the related appeal.
On November 18, 2009, the Law Society commenced a discipline proceeding against Mr. Groia under the Law Society Act. The Hearing Panel found that Mr. Groia's attacks on the OSC prosecutors were unjustified and constituted conduct falling below the standards of civility, courtesy, and good faith required under the Rules of Professional Conduct. It imposed a penalty of two months' suspension of his licence to practise law and a reprimand. It also awarded costs of the discipline hearing to the Law Society in the amount of $246,960.53, plus interest.
The Appeal Panel affirmed the Hearing Panel's findings of professional misconduct relating to Mr. Groia's dealings with the OSC prosecutors but it reduced the length of his licence suspension from two months to one month. On appeal, Mr. Groia attacks the Appeal Panel's ruling on the Law Society's authority to discipline an advocate for uncivil conduct in court and its formulation and application of its test for incivility.
(1) What standard of review apply in this case?
(2) Did the Divisional Court err by upholding the Appeal Panel's Conduct Decision?
(3) Did the Divisional Court err in its treatment of the Reviewing Court's Reasons?
(4) Did the Divisional Court err by upholding the Appeal Panel's Penalty Decision and its costs award in favour of the Law Society?
(5) Did the Divisional Court err by awarding costs of the appeal in that court to the Law Society?
Holding: Appeal dismissed.
(1) The deferential standard of reasonableness applies to the entirety of the Appeal Panel's decisions. As stated by the Supreme Court in Dunsmuir, "a court conducting a review for reasonableness inquiries into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law" (Dunsmuir v. New Brunswick).
(2) No. Groia makes 3 submissions:
- The trial judge, and not the Law Society, is in the best position to judge his alleged in-court civility.
- The Appeal Panel erred in fashioning its test for incivility.
- The Appeal Panel misapplied the test for incivility to the facts of the case.
The Court of Appeal addresses these submissions accordingly:
- Oversight of In-Court Civility
This submission ignores the plain language of the Law Society Act and the Law Society's undisputed statutory obligation to govern the legal profession in the public interest. The Act prohibits licensees from engaging in professional misconduct (s.33) and empowers the Law Society to conduct an investigation into potential misconduct (s.49.3). Ryan, at para 42, confirms that self-regulating disciplinary bodies have primary responsibility to oversee professional discipline and, where necessary, select appropriate sanctions. Groia argued that the recent SCC decision in Federation of Law Societies supports the principle that the state cannot impose duties that interfere with a lawyer's commitment to advancing their client's cause. The Court disagrees. The case affirms that the lawyer's duty of commitment to a client is a principle of fundamental justice under s.7 of the Charter, but nothing in the case tolerates a lawyer's breach of his or her professional obligations of courtesy, civility and good faith.
The role of trial judges is to decide the contested issues and to safeguard the fairness of the trial, including the dignity and decorum of the proceeding. In contrast, the primary role of the Law Society is to ensure the professionalism of its licensees, measured against the standards of practice that apply to the entire profession. The Law Society's mandate to ensure that lawyers conduct themselves professionally in and out of the courtroom, does not in any way conflict with or erode a trial judge's trial management power or the independent authority of the courts. It is not required, nor should it be, that a judge must complain to the Law Society about a lawyer's in-court conduct in order for an inquiry to be commenced. This would lead to uncertainty in enforcement. Professional obligations "do not bend" with the level or intensity of a particular presiding trial judge's response to incivility. Accordingly this ground of appeal is rejected.
- Test for Incivility
The Appeal Panel's formulation of the test for incivility in this case was reasonable. It appropriately balanced the importance of zealous advocacy with the requirement of courtesy and civility. The Appeal Panel properly considered Charter-protected expressive freedoms. The test provides meaningful guidance to the profession and reflects the need to maintain public confidence in the administration of justice:
The Court endorses comments made in Felderhof about the importance of civility both inside and outside the courtroom and the obligation of advocates to conduct themselves professionally as part of their duty to the court, to the administration of justice and to their clients. Civility is not merely aspirational, it is a codified duty of professional conduct and an essential pillar of the effective functioning of the administration of justice. The Court endorses the Appeal Panel's comments on the definition of uncivil conduct, namely that the determination of when conduct crosses the line is "fundamentally contextual and fact-specific" and what constitutes incivility will vary by circumstance.
Groia had argued, and the Divisional Court accepted, that when the advocate's duty of zealous advocacy conflicts with his or her duty of courtesy and civility, the public interest demands that the former must prevail. The Court rejects this premise on the grounds that it misconceives the advocate's duty of professionalism. The duty of zealous advocacy must be protected and broadly construed, but it is not absolute and must not be abused. The duty of professionalism encompasses both the duty of zealous advocacy and civility, and the Rules of Professional Conduct have not placed one over the other.
As per Rondel, an advocate's duties are owed not only to the client, but also to the public and, hence, to the justice system itself and all its participants. Professionalism is not inconsistent with vigorous and forceful advocacy on behalf of a client (quoting from Felderhof). Occasionally the fearless and forceful representation of a client may "push up against the bounds of civility", but an isolated lapse of judgement or occasional disparaging comment in litigation should not be viewed as triggering disciplinary action.
In the case at bar, there were patterns of unfounded and personalized attacks on the integrity of opposing counsel. Federation of Law Societies does not hold that the duty of commitment to a client's cause is absolute or open-ended. It is perfectly consistent with the lawyer taking appropriate steps to ensure that his or her services are not used for improper ends. This applies with equal force to the duty of courtesy and civility.
Freedom of Expression
Groia argued that the Appeal Panel was required to address whether his allegations of misconduct constituted constitutionally-protected speech and factor this consideration into its determination of the proper test for incivility. The Court rejects this argument stating that the Appeal Panel addressed s.2(b) values under the rubric of its consideration of zealous advocacy. Balancing freedom of expression and the need to ensure civility is a fact-dependant exercise; the question is whether the administrative decision maker has disproportionately and, therefore, unreasonably limited the s.2(b) right.
The Appeal Panel did consider the right to expression and the need to strike a balance between those rights and the lawyer's professional obligations. They directly quoted Doré on this matter. The Appeal Panel held that zealous advocacy did not require Groia to make unfounded allegations of procedural conduct and impugn the integrity of his opponent. The Court concludes that the Appeal Panel's test reflects a reasonable and proportionate limit on both the advocate's freedom of expression and those of the client.
Groia had argued that the test as re-stated by the Divisional Court is vague and ill-defined and creates unreviewable prosecutorial discretion for the Law Society. Groia challenged the court's finding that the Law Society's discipline process may be triggered if the conduct at issue "would have the tendency" to bring the administration of justice into disrepute.
The test articulated by the Appeal Panel is a reasonable and functional one that accounts for the contextual and fact-driven nature of a professional misconduct inquiry. The test was owed deference by the Divisional Court. The test is not vague or ill-defined, it satisfies the Supreme Court's definition of incivility as set out in Doré.
However, the Court rejects the restrictive approach and re-statement by the Divisional Court as it falsely conflates harm to the administration of justice with trial unfairness. The bar for finding trial unfairness is too high for a professional misconduct inquiry. Damage to the administration of justice includes, but is not limited to, compromised trial fairness.
- Reasonableness of Application of Test for Incivility:
The court rejects Groia's submission that the Appeal Panel erred by misapplying its test for incivility to the facts of this case. There are two branches to the Appeal Panel's test for incivility, and the court holds that both branches were satisfied in this case. The Appeal Panel's findings of professional misconduct against Mr. Groia are reasonable, and therefore, there is no basis for intervention.
The court details numerous examples of Groia's incivility during trial. Groia's conduct during his cross-examination of Mr. Francisco was notable. In response to his inappropriate actions on cross-examination, the court held that Groia fundamentally misunderstood the role of the OSC prosecutors and advanced positions on the admissibility of documents that were wrong in law and contrary to the rules of evidence. It was concluded that Groia's remarks exceeded the boundaries of zealous advocacy and met the test for incivility.
(3) No. It is unnecessary for the disposition of this appeal to resolve the issue of permissible use of the Reviewing Court's Reasons. The Appeal Panel expressly held that they were to be afforded little weight and that they were not determinative of the professional misconduct allegations made against Groia.
(4) No. The Appeal Panel engaged in a balanced and fair assessment of Groia's circumstances and conduct when fashioning an appropriate penalty. Its penalty is entitled to considerable deference on the reasonableness standard. No error in principle in the challenged costs award has been demonstrated, nor has any reason to depart from the general rule that the reasonable costs of investigating and conducting a discipline proceeding should not be borne by the profession as a whole where a determination adverse to the defending lawyer has been made. Appellate intervention is precluded in these circumstances.
(5) No. The discretionary costs ruling cannot be set aside unless it is tainted by an error in principle or was plainly wrong. Neither was the case here.
Dissent- Brown J.A.
Holding: The appeal should allowed.
(1) Did the Divisional Court apply the correct standard of review?
(2) How should the Law Society Act's by-laws be interpreted to ascertain when uncivil in-court conduct amounts to professional misconduct? How should this interpretation be applied to the case at hand to determine whether Groia had breached the by-laws and engaged in professional misconduct?
(3) Did the Divisional court err in upholding the Appeal Panel's finding that Groia was guilty of professional misconduct for incivility?
(4) Did the Divisional Court err in finding that the Appeal Panel accounted for the effect of barrister's conduct on trial fairness?
(5) Should the appeal be granted on a reasonableness standard?
(1) Yes. The standard of review is correctness. Existing jurisprudence has not determined the degree of deference afforded to legal disciplinary panels reviewing lawyer conduct in-court. The absence of a privative clause in the Law Society Act suggests a lower standard of deference to the decisions of the Law Society, but this is not determinative. There are limits on the choices legislatures can make concerning the courts, and the responsibility for monitoring courtroom conduct should remain with the judiciary. This responsibility reinforces that the proper standard of review in this instance is correctness. The judiciary is also better situated to determine what conduct is acceptable, and has greater institutional skill in this area than Law Society regulators.
Given that Groia's alleged misconduct occurred inside a courtroom, the standard of review should be correctness. This ensures that the judiciary has the final say over whether a lawyer's in-court conduct was unacceptable and warranted a finding of professional misconduct. As the complaints dealt with in-court conduct, the standard review is not determined by considering the legislature's intent when delegating powers to the regulatory body. Instead, the constitutional independence of the courts must be considered. If the judiciary is to make the final determination on whether a lawyer's conduct amounted to misconduct, then the standard of review must be correctness. Under the reasonableness standard it is too difficult for the judiciary to review determinations of misconduct made by the reviewing body.
(2) The nature of both questions requires the deferential reasonableness standard of review. However, a contextual analysis may rebut the presumption of reasonableness review for questions involving the interpretation of the home statute (McLean v. British Columbia (Securities Commission)). The context of this case makes it one of the exceptional cases which rebut the general presumption. The standard of review analysis is determined by the contextual reality that the member's impugned conduct took place in a courtroom. Any interpretation and application of the home statute to Groia's conduct has implications about who has the ultimate say in what conduct by counsel before the courts is acceptable. Therefore, the correctness standard applies to the judicial review or appeal of a decision of a legal discipline committee on the question of whether the conduct of a barrister in a courtroom before a presiding judge constitutes professional misconduct. Under the correctness standard, the courts retain the final word on the propriety of what barristers do in courtrooms.
An inquiry into whether a barrister's in-court conduct amounts to professional misconduct takes into account three main factors:
- What the barrister did.
- What the presiding judge did about the barrister's conduct and how the barrister responded to the directions of the presiding judge.
- What effect the conduct complained of had on the fairness of the in-court proceeding, including the ability of the opposing side to present its case.
The first factor requires examination into the following:
- the nature of the conduct complained about;
- where and when the conduct occurred;
- the duration of the conduct;
- the reason for the conduct, including whether the barrister was reacting to provocation from the other side.
The second factor requires asking several questions:
- Did any participant in the hearing complain to the presiding judge about the barrister's conduct?
- Did the presiding judge issue any direction to the barrister to limit or cease the conduct complained of?
- Did the presiding judge impose any sanction on the barrister for the conduct?
- Did the barrister comply with any directions given or sanction imposed by the presiding judge?
This factor rests on the proposition that judges are responsible for managing courtrooms to ensure procedural fairness and justice according to the constitutional principle of judicial independence. To avoid second-guessing the presiding judge's response to the barrister's conduct, when considering whether the barrister's in-court conduct falls to the level of professional misconduct, the Law Society must pay careful attention to and give deference to any rulings the presiding judge made concerning the misconduct alleged, together with the barrister's response to those judicial rulings.
The third factor requires considering whether the barrister's conduct undermined, or threatened to undermine, trial fairness.
Parties may have agreed on one element of the test to determine whether in-court conduct amounts to professional misconduct, but the parties disagreed on other elements. Justice Brown differs with the majority's disagreement with the Divisional Court's "add-on." Assessing when advocacy crosses the line from permissible zealousness to impermissible professional misconduct not only requires inquiring into the nature of the barrister's conduct but also into its permissible degree of excess. This measure requires the regulator's professional misconduct inquiry to include a consideration of the impact of the barrister's conduct on the proceeding. This factor of the inquiry should focus more clearly on the impact of the barrister's conduct on the proceeding in which it occurred. Therefore, when inquiring into whether a barrister's in-court conduct constitutes professional misconduct, a discipline tribunal must assess whether the conduct is not only uncivil, but also whether it undermined, or threatened to undermine, the fairness of the trial or other court proceeding in which it took place.
The Appeal Panel's test for in-court professional misconduct gave effect only to the first factor of the above factors and, consequently, was incomplete. A critical flaw in the test formulated and applied by the Appeal Panel and the Divisional Court was that it ignored, in any meaningful way, how the trial judge dealt with the prosecution's complaints about Groia's conduct.
(3) Yes. The Divisional Court, like the Appeal Panel, failed to give enough consideration to the measures taken by the Felderhof trial judge to address his conduct and to how Groia responded to the trial judge's instructions regarding his conduct.
A review of the records shows that the trial judge did not ignore the prosecution's complaints. He simply took a different approach to addressing the issue. His approach was not the road of strong intervention but it also was not a path of complete non-intervention.
As well, the record shows that Mr. Groia complied with the directions given by the trial judge. Compliance with instructions is the most material fact in the professional misconduct analysis. Further, after the Court of Appeal's decision was released regarding Groia's conduct, the trial resumed in a much more orderly fashion. This indicates further compliance.
A standard of perfection regarding counsel's conduct is unreasonable because of the considerable emotion that trials generate amongst their participants. The trial judge is the person best placed to determine whether a barrister's conduct is approaching or has crossed over the line that separates zealous advocacy from impermissible courtroom conduct. Therefore any regulatory review that fails to consider how the trial judge reacts to a barrister's conduct, and how the barrister responds to judicial direction, ignores a necessary and critical element of the context in which the analysis of the barrister's conduct must take place.
Failing to take into account Groia's responses to judicial directions is an error of law.
(4) Yes. The Divisional Court accepted the Appeal Panel's finding that Groia's conduct interfered with the prosecutors' ability to present their case. The Appeal Panel failed to consider the finding of the appellate court that the conduct did not prevent a fair trial or hearing.
Also, the Appeal Panel's finding that Groia's conduct caused a "serious adverse impact" to the prosecution's first witness was wrong. It is the job of the trial judge to ensure the witness is treated fairly by both counsel. The trial judge was alive to the need to ensure this.
(5) Yes. Although the Appeal Panel's decision-making process was transparent and intelligible, its reasons lacked the justification necessary to meet the reasonableness standard. This is because it failed to make meaningful inquiries into the key factors of what the courts did about the barrister's conduct and how the barrister reacted as well as the effect of the barrister's conduct on trial fairness.
[Gillese, Hourigan and Pardu JJ.A.]
Tim Gleason and Adrienne Lei, for the appellant
Gary Bennett, for the respondent
Keywords: Employment Law, Wrongful Dismissal, Just Cause, Employee Dishonesty, Employee Misconduct, McKinley v B.C. Tel., 2001 SCC 38, Dowling v Ontario (Workplace Safety and Insurance Board) (2004), 246, D.L.R. (4th) 65 , Lepire v National Bank of Canada, 2004 FC 155, Insurance Coverage
The appellant is an accredited private school ("School"), offering classes from pre-kindergarten to grade 12. The respondent, Fernandes, was employed by the School as a teacher until April 2009 when his employment was terminated without notice. The respondent claims he was wrongfully dismissed. Fernandes had been fabricating marks; he had recorded marks before the students had done the work. He was terminated in person on April 17th 2009. He requested to meet on April 20th to discuss the situation further and this meeting was agreed to by the School Principal. On April 20th, Fernandes did not attend the meeting and instead went to his doctor, who gave him a note that read: "Due to work-related stress, Mr. Fernandes will be off work until further notice." This note was faxed to the School. The School sent out the false grades to its students despite knowing of their falsity. Fernandes sued for wrongful dismissal.
The trial judge found misconduct on the part of Fernandes, including the creation of false and inaccurate grades, but nonetheless found in his favour. In his findings, the judge applied the principles found in McKinley v B.C Tel., regarding dishonesty as a basis of termination. He found that because the School sent the grades out anyway, this was not a serious infraction and therefore the punishment of termination was disproportionate. The School appeals this decision.
Fernandes had also suffered major depression and anxiety after his termination. He had not improved since 2009 and was diagnosed with major depressive disorder along with anxiety neurosis, panic attacks, and posttraumatic stress disorder. He was denied disability benefits because he applied after he was already terminated and that there was insufficient medical evidence of functional impairment. The trial judge ruled that he was disabled within the meaning of his policy and therefore entitled to long-term disability benefits.
- Did the trial judge err in his application of the McKinley principles in finding there had been wrongful dismissal?
Holding: Appeal allowed.
Majority:Gillese, JA and Hourigan JA.
Yes. The governing legal principles can be found at paras. 48-49 of McKinley. The test is whether the employee's misconduct gave rise to a breakdown in the employment relationship. This can be expressed in different ways: just cause for dismissal exists where (a) the misconduct violates an essential condition of the employment contract; (b) breaches the faith inherent to the work relationship; or (c) is fundamentally or directly inconsistent with the employee's obligation to the employer. Proportionality underlies this approach. There must be a balance between the severity of the misconduct and the sanction imposed.
In Dowling v Ontario (Workplace Safety and Insurance Board) the court concluded that the core question is whether the employee's misconduct was sufficiently serious that it struck at the heart of the employment relationship. To answer that question the court must:
- Determine the nature and extent of the misconduct;
- Consider the surrounding circumstances; and
- Decide whether dismissal was warranted.
Nature and Extent of Misconduct: in this step the court must assess the seriousness of the misconduct. The trial judge focused heavily on the fact that the School sent the false grades out anyway. This focus failed to address the seriousness of the misconduct and constituted legal error. One of a teacher's most important professional obligations is to fairly and properly evaluate student achievement. By falsifying grades, Fernandes went far beyond mere negligence and his acts constituted serious misconduct.
Surrounding Circumstances: In this step, the court must consider the particular circumstances of both the employee and the employer. In relation to the employee, the court should consider factors such as: age, employment history, seniority, role, and responsibilities. For the employer, the court should consider such factors as: type of business, relevant policies or practices, employees position within the organization, and degree of trust reposed in the employee.
- Employee: The trial judge correctly considered age and employment history, but failed to consider that Fernandes offered no explanation for his misconduct, a significant consideration.
- Employer: The trial judge failed to consider employer circumstances, an error on his part. If the School did not comply with Ontario Secondary School Diploma grading policies, it could lose its right to grant credits towards this diploma. This could have led to serious harm, and the fact that it did not lead to real harm is not the relevant consideration. Rather, the consideration is the potential severity of the harm as per Lepire v National Bank of Canada. In addition, the school reposed a large degree of trust in Fernandes, that he breached.
Was Dismissal Warranted: In this step, the court must consider the nature and extent of the misconduct (Step 1) in the context of the surrounding circumstances (Step 2). Here the misconduct was very serious and puts the School's accreditation in jeopardy. Although the duration of the misconduct was short (2 months), it struck to the heart of the employment relationship, giving rise to breakdown, and resulting in just cause of dismissal.
Insurance Issue: Since Fernandes was dismissed with cause before he became disabled, he was not eligible for long-term disability benefits.
Dissent: Pardu J.A. Justice Pardu would have dismissed the appeal. She was not persuaded that the trial judge failed to consider the seriousness of the misconduct – he had the benefit of hearing the evidence at trial and was in a better position to assess the misconduct.Justice Pardu agrees with the analysis of Turnbull J.A., dissenting in Henry v. Foxco Ltd., 2004 NBCA 223, that the assessment of whether misconduct is sufficiently serious to merit termination without notice is a question of fact, to which the trial judge is owed deference.On the insurance coverage issue, the definition of disability in Fernandes' insurance policy states that one is considered disabled if, because of disease or injury, the individual cannot perform tasks that regularly took at least 60% of their time to complete. Because of the uncontradicted evidence that Fernandes was entirely incapable to work, he fits within the definition of disabled within the policy, as found by the trial judge.
[Weiler, Cronk and Benotto JJ.A.]
MacRae, for the moving party, Bending Lake Iron Group Limited
Kraft, J. Salmas and J. Schultz, for the responding party, A. Farber & Partners Inc., in its capacity as court-appointed receiver of Bending Lake Iron Group Limited
Keywords: Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, s. 193(e), Leave to Appeal
On September 11, 2014, Bending Lake Iron Group Limited ("BLIG") went into receivership (the "Receivership Order"). A. Farber & Partners Inc. was appointed receiver over BLIG's property (the "Receiver"). On November 27, 2014, the court approved a Sales and Investor Solicitation Process for BLIG's property (the "SISP Order"), to which BLIG consented. The Receiver moved for court approval of an asset purchase agreement with Legacy Hill Resources Ltd. ("Legacy Hill") for the sale to Legacy Hill of substantially all BLIG's assets (the "Sale Agreement"). BLIG opposed the motion and brought its own cross-motion seeking various forms of relief, including the postponement of the sale. The motions judge approved the Sale Agreement and granted anorder vesting title to all of BLIG's property with Legacy Hill (the "Approval and Vesting Order"). BLIG filed a notice of appeal dated January 13, 2016, seeking to set aside the Approval and Vesting Order. By order of this court dated March 22, 2016, Brown J.A. ruled that BLIG required leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act (the "BIA").
(1) Should leave be granted to BLIG to appeal the Approval and Vesting Order?
Holding: Application dismissed.
(1) No. Granting leave to appeal under s. 193(e) of the BIA is discretionary and must be approached in a flexible and contextual way. The threshold criterion for granting leave is whether the moving party has raised arguable points that create a reasonable prospect of success on appeal. In an attempt to meet this threshold requirement, BLIG proposed three issues for argument on appeal:
- The motions judge erred in law in finding that representatives of BLIG acted in contravention of the Receivership Order.
- The Receiverhsip Order, which left the management of the company in the hands of existing management, deprived the existing management of the right to seek refinancing and/or restructuring of the company.
- The motions judge erred in approving the Sale Agreement by failing to address the rights of "affected Aboriginal Communities."
The court found that the three issues did not meet the threshold requirement for granting leave, and that the proposed appeal would unduly hinder the insolvency proceedings. The first two proposed grounds of appeal identified by BLIG, which concern the motion judge's findings that BLIG contravened the Receivership Order, do not raise questions requiring consideration by the court. The motion judge's interpretation and application of specific terms within the Receivership and the SISP Orders, leading him to conclude that BLIG's conduct contravened those terms, are not of general importance to bankruptcy/insolvency practice or the administration of justice. Both grounds involve highly fact-driven issues. Accordingly, the motion judge's conclusions on this issue were highly fact and case specific. The court reached a similar conclusion regarding BLIG's final proposed ground of appeal, namely, that the Receiver breached its duty to consult with "affected Aboriginal communities". In the court's view, given the history of the proceedings, it is not open to BLIG to now raise this issue on appeal.
[Doherty, Epstein and Huscroft JJ.A.]
James D. Virtue, for the appellant
Analee J.M. Ferreira and E. Cormier, for the respondents David MacMillan and Janice McIntosh
No one appearing for the respondent her Majesty the Queen in Right of Ontario
Keywords: Real Property, Subdivision and Part Lot Control, Planning Act, section 50, Navigable Waterways, Beds of Navigable Waters Act
The respondents own and live on a 10-acre lot near London, Ontario. They constructed a second house on their property and sold it, despite the fact that the applicable zoning laws allowed only one house per lot. Bear Creek runs through the middle of their property. The respondents retained a surveyor who offered the opinion that the Creek was a navigable stream. The respondents subsequently registered a reference plan on title to their property showing the creek bed as Crown land and dividing their property into Part 1 north of the creek and Part 2 south of the creek. In so doing, the respondents essentially circumvented the Planning Act restriction on building and conveying a second house on their property. The applicant, the Municipality of Middlesex, brought an application seeking a declaration that the Creek was not a navigable stream and a further declaration that the purported conveyance of Part 2 to Mr. MacMillan was void contrary to the Planning Act. The application judge dismissed the application, holding that the Creek was a navigable stream and created a natural severance of the respondents' property into two lots. The Municipality appealed.
Whether the creek on the respondents' lot is a "navigable body of water or stream" within the meaning of s. 1 of the Beds and Navigable Waters Act, thus creating a natural severance of their lot?
Holding: Appeal allowed.
No. The Court first notes that the respondents' motive in advancing its claim irrelevant to the determination of whether the Creek was a navigable stream. Navigability is essentially a factual question based upon an assessment of the capabilities of the waterway at the time of the Crown grant.
A stream is navigable if there is a right of navigability along that stream. The right of navigability is a right of reasonable passage for public purposes along a waterway. The right of navigability entitles the public to use the waterway as a means of transportation. This right can only exist if the waterway is physically capable of being traversed by a boat of some sort. However, "navigability in fact" does not, standing alone, establish a right of navigability. In addition to being physically capable of use for transportation by boat, the waterway must also be capable for use as transportation in relation to a public purpose such as commerce, agriculture or recreation.
The meaning of the word "navigable" in s.1 of the Beds and Navigable Waters Act is informed by, and consistent with, the nature of the right of navigability. Although actual public use is not a prerequisite to a finding of navigability, the absence of any evidence that the waterway was used for any practical public purpose can provide circumstantial evidence that the waterway did not have the capacity to serve any public purpose and was, therefore, not navigable. The waterway must also run from one point of public access to another.
Navigability is further determined by reference to a specific location along the waterway. Therefore, the question is not whether Bear Creek as a whole is navigable, but rather whether the creek as it runs over the respondents' property is navigable. The evidence relied on by the application judge was reasonably capable of establishing that the creek was "navigable in fact." However, the evidence of potential practical public use was insufficient. The 1833 and 1835 petitions are strong evidence of the potential public utility of the Creek in the Western District generally, however, it was unreasonable and speculative to infer that the navigability of the Creek as it passed over the respondents' property was the same as or similar to the navigability of the Creek several kilometers downstream. The evidence, consequently, could not reasonably establish the potential practical public utility of the Creek as a means of public transportation through the respondents' property. There was also no evidence of at least two points of public access that would have allowed the public at the time of the Crown grant to access the Creek without committing trespass. The evidence was not capable of establishing that the Creek as it passed over the respondents' property was a navigable stream within the meaning of s. 1 of the Beds and Navigable Waters Act. Title to the bed of the Creek does not lie with the Crown. There is no natural severance of the respondents' property. The application therefore should have been granted, and the judge's order dismissing it is therefore set aside.
[Cronk, Blair and MacFarland JJ.A.]
Robin Boys and Gerald Groskopf, In Person
Alan B. Merskey and John M. Picone, for the respondent
Keywords: Pensions and Benefits Law, Pension Benefits Act, s.74(1), Wind-up, Grow-in, Contractual Interpretation, Sattva Capital Corp. v. Creston Moly Corp.
In 2000, Shoppers Drug Mart was purchased from Imasco by Shoppers Drug Mart Inc. The appellants were executives employed at Imasco who were terminated and then subsequently hired by Shoppers. Shoppers Drug Mart Inc. administered and funded a supplementary executive retirement plan (SERP), which was not subject to the Pension Benefits Act, as well as a pension plan for executives. One of the appellants was terminated in February 2000, while the other was terminated in October 2004. In 2005, the Financial Services Commission of Ontario ordered that the SERP be wound up with respect to executives who lost their jobs due to the 2000 restructuring. Shoppers declared a partial wind-up of the pension plan for executives whose employment was terminated between January 1, 2000 and October 26, 2004. As a result of the wind-up, the appellants became entitled to the benefit of the "grow-in" provision set out in s.74(1) of the PBA. Under this provision, a member of the plan whose combined age plus years of service at the company was greater than 55 upon winding-up would be entitled to the pension beginning at what would have been their earliest unreduced pension retirement date.
Shoppers gave the appellants notice of their entitlements under the pension plan and the SERP. The lump sum values of the pensions had increased as a result of the grow-in, but the appellants' entitlement under the SERP had decreased to zero. If the wind-up had not occurred, the appellants would have been entitled to supplementary retirement benefits under the SERP, but their unreduced pensions would not have been available until age 65. The appellants disagreed with Shoppers' calculation of their entitlements under the SERP and sought a declaration that they were entitled to receive supplementary retirement benefits. At issue was the proper interpretation of s. 2.24 of the SERP, and the parties provided conflicting expert evidence as to its application.
The most relevant parts of s.2.24 read as follows:
"a) The full amount of the Participant's pension benefit, if any, determined at that time in accordance with the Executive Registered Plan, but without regard to: (i) the 35-year limit on Pensionable Service (as defined in the Executive Registered Plan); and (ii) [ITA] limits on pension benefits payable under the registered pension plans.
Furthermore, for purposes of the Plan and notwithstanding the provisions of the Executive Registered Plan, the Accrued Pension (as defined in the Executive Registered Plan) at the time for a Participant who joined the ICPP on or after January 1, 1990, but before January 1, 1995, shall be calculated as 2% of the Participant's Final Average Remuneration (as defined in the Executive Registered Plan) at that time multiplied by the Participant's Pensionable Service at that time.
(c) LESS the total pension benefit earned by the Participant under the Executive Registered Plan and the ICPP and any other pension plan of the Company or its Affiliates or its subsidiaries that is registered in Canada or qualified elsewhere."
S.2.24 was also subject to a Proviso that read: "Notwithstanding anything to the contrary in the Plan, the amount of pension benefit described in sections 2.24(a) and 2.24(b) above shall not be subject to any grow-in provisions as provided for in applicable provincial legislation."
The application judge dismissed the appellants' application and held that the interpretation of s.2.24 was unrelated to age, and was specifically intended to exclude the benefit received by the appellants from the application of the s. 74(1) PBA grow-in rule. He held that the benefits in the calculation of the deduction made under s. 2.24(c) were intended to be included. The full amount of the registered pension benefit would be calculated excluding the Income Tax Act limit and excluding any grow-in benefits. The total registered plan benefit earned would then be deducted. If the difference is a positive number, the amount remaining would be the supplementary benefit. If the difference is a negative number then there would be no supplementary benefit.
(1) Did the application judge err in interpreting s. 2.24 of the SERP in concluding that the Proviso in s. 2.24 required the exclusion of grow-in benefits from the benefit amount calculated under s. 2.24(a), but their inclusion in the deduction amount calculated under s. 2.24(c)?
(2) Did the application judge err in declining to order that the appellants' costs of the application be paid from the Shoppers SERP?
Holding: Appeal and cross-appeal dismissed.
(1) No, the application judge made no reversible error in his construction of s. 2.24. The interpretation was supported by the stated purpose of the SERP, the words of s. 2.24, and the actuarial evidence.
The SERP was intended to be a "top-up" of the benefits available under the pension plan. The terms of the SERP also gave Shoppers the right to decide any matters arising with respect to administering the plan. The application judge's interpretation of the Proviso was correct, as it explicitly stated that the quantum of the benefits under s. 2.24(a) excluded the grow-in provisions of the PBA, but made no mention of a similar exclusion under s. 2.24(c).
Interpretation of the Proviso demonstrates that s.2.24(c) requires the deduction, from the benefit amounts calculated under ss. 2.24(a) without regard to ITA limits and grow-in provisions, of the total pension benefit earned. The total pension benefit earned by each of the appellants included amounts augmented by the s. 74(1) PBA grow-in provision. The respondent's expert evidence demonstrated that age 55 generated the highest lump sum value for the appellants' benefits under the pension plan because it recognized the benefit of the 10-year income stream between ages 55 and 65 that arose from the application of grow-in.
Actuarial evidence regarding the interpretation of s.2.24 was conflicting, with the opinions differing over whether age 55 would be used for the calculations in ss. 2.24(a). The appellant was entitled to receive the benefits of an unreduced pension at age 55 after applying the grow-in rules. It was open to the application judge to prefer this interpretation, as it was supported by the evidence.
(2) No. The application judge's ruling attracts considerable deference, and absent an error in principle or unless the award is plainly wrong, appellate intervention is precluded.
[Weiler, Cronk and Benotto JJ.A]
L. Bisgould and K. Hale, for the appellants
S.D. Lyman, for the respondent
Keywords: Administrative Law, Landlord and Tenant, Residential Tenancies, Residential Tenancies Act, 2006, s. 20(1), Statutory Interpretation, Principle of Harmonization, Standard of Review, Reasonableness
Tenants in a building brought an application to the Landlord and Tenant Board seeking an abatement of rent because an elevator in their apartment building was out of order for 96 days in one year due to mechanical problems.
The Board dismissed the application for an abatement of rent. It found that the landlord had begun the process of replacing the elevator and took steps to get it back into operation as quickly as possible. The landlord also hired staff to help tenants with their mobility needs.
The tenants appealed.
1) Did the Divisional Court err in its selection and application of the standard of review?
2) Is it an error of law to refuse to order an abatement of rent to tenants who had suffered serious inconvenience and disruption on the basis that the landlord's behaviour was reasonable?
1) No. Where jurisprudence has already determined the standard of review and thus the degree of deference to be accorded to a particular category of question before a given administrative tribunal, this will end the inquiry. Decisions of the Board are subject to review on a standard of reasonableness. The Board administers a specialized adjudicative regime for resolving residential tenancy disputes and it is also interpreting its home statute. The issue before the Board is highly contextual and fact-based, relating to its core function. Therefore deference is owed.
2) No. Interpretation given to a statutory provision must produce harmony within the statute itself and with other legislation dealing with the same subject matter. s. 21(1) requires the landlord to provide reasonable supply of vital services. 'Elevator' is not defined as a "vital service" under the Act. Rather, it is defined as "services and facilities". It would be illogical to conclude that the Act requires the landlord to maintain a non-vital service (elevator service) as soon as any interruption occurs in that service while the landlord is only required to make reasonable efforts to maintain vital services.
Further, the tenants allege that the landlord's breach of s. 20(1) resulted in a substantial interference with their use and enjoyment of the premises. s. 22 requires that a landlord does not interfere with a tenant's reasonable use and enjoyment of the premises. O. Reg. 516/06, s. 8 applies to s. 22 but not s. 20. Under the regulations, the Board cannot order an abatement of rent if the landlord has complied with the 10 listed conditions. In this case, the landlord had complied with the requirements under this regulation. As such, it offends the principle of harmonization and lex non cogit ad impossibilia to interpret s. 20 such that rent abatement is appropriate, while prohibiting rent abatement through s. 22 in conjunction with O. Reg. 516/06, s. 8. Thus, s. 20 (1) cannot be interpreted as suggesting that a landlord is automatically in breach of its obligation to repair and maintain as soon as an interruption in service occurs.
Short Civil Endorsements
[MacPherson, Juriansz and Pardu JJ.A.]
Francis Thatcher, for the appellants
Stephen Burns, respondent acting in person
John J. Adair, amicus curiae
Keywords: Endorsement, Contract Law, Breach of Contract, Malice
[MacPherson, Rouleau and Pardu JJ.A.]
Jillian Van Allen, for the appellant
Andrew M. Porter for the respondents Frank C. Smith and Gamal Kousa
Logan Crowell, for the respondent Hamilton Health Sciences Corporation
Keywords: Endorsement, Medical Malpractice
[MacPherson, Juriansz and Pardu JJ.A.]
Cheryl Ann Ogg, acting in person
John David Ogg, acting in person
Keywords: Endorsement, Family Law, Matrimonial Home, Fair Market Value
[MacFarland, van Rensburg and Huscroft JJ.A.]
Suzan E. Fraser and Cate Martell, for the appellant Timothy Keizer
Barbara Walker-Renshaw, for the appellant the Person-in-Charge, St. Joseph's Healthcare Hamilton
Amy Rose, for the respondent Her Majesty the Queen
Janice Blackburn, for the respondent the Person-in-Charge, Waypoint Centre for Mental Health Care
Keywords: Endorsement, Ontario Review Board, Standard of Review, Reasonableness
[Blair, MacFarland and Lauwers JJ.A.]
Raymond G. Colautti and Anita Landry, for the appellants/respondents by way of cross-appeal
Morris Manning, Q.C., for the respondent/appellant by way of cross-appeal
Keywords: Endorsement, Summary Judgment
[Feldman, Rouleau and Huscroft JJ.A.]
Susanne M. Sviergula, for the appellant
John J. Cardill, for the respondent
Keywords: Endorsement, Summary Judgment, Limitation Periods, Limitations Act, 2002
[Cronk, Blair and MacFarland JJ.A.]
Martin Z. Black, for the appellant Keenan Family Trust
Joseph Robert Keenan, In Person
Craig M. Bater and Emily G. Villeneuve, for the respondent
Keywords: Endorsement, Bankruptcy and Insolvency
Ontario Review Board
[Epstein, Pepall and van Rensburg JJ.A.]
Ken J. Berger, for the appellant
Katherine Beaudoin, for the respondent, the Attorney General for Ontario
Janice Blackburn, for the respondent, the Person in Charge of St. Joseph's
Keywords: Ontario Review Board, Criminal Law, Criminal Harassment, Not Criminally Responsible
Criminal Law Decisions
[Feldman, Benotto and Miller JJ.A.]
David Landriault, in person
Yoni Rahamim, duty counsel
Katie Doherty, for the respondent
Keywords: Endorsement, Criminal Law, Fraud, Forgery
[MacFarland, van Rensburg and Huscroft JJ.A.]
Vincenzo Rondinelli, for the appellant Zhang
Joseph Di Luca, for the appellant Alltheway Trucking Inc.
Demetrius Kappos and Paul Gonsalves, for the respondent
Keywords: Endorsement, Criminal Law, Possession of Invasive Fish Without a Licence, Fisheries Act, Ontario Fishery Regulations
[Weiler, Simmons and Epstein JJ.A.]
Michael W. Lacy, for the appellant
Dayna Arron, for the respondent
Keywords: Criminal Law, Break and Enter, Assault Causing Bodily Harm, Unlawful Confinement, Uttering Threats, Breach of Recognizance, Obstruction of Justice
[Feldman, Benotto and Miller JJ.A.]
Dennis Guthrie, in person
Joseph Di Luca, amicus
Tracy Kozlowski, for the respondent
Keywords: Endorsement, Criminal Law, Aggravated Assault, R. v. Evans,  1 S.C.R. 869
[Sharpe, Watt and Brown JJ.A.]
David Butt, for the appellant
Shawn Porter, for the respondent
Keywords: Criminal Law, Firearms Offences, Trafficking, Voir Dire
[Hoy A.C.J.O., Laskin and Hourigan JJ.A.]
Robin K. McKechney, for the appellant
Amy Rose, for the respondent
Keywords: Endorsement, Criminal Law, Assault, Criminal Negligence Causing Bodily Harm, Mischief, Criminal Harassment
[MacFarland, van Rensburg and Huscroft JJ.A.]
Elizabeth Bingham, for the appellant
Jeremy Streeter, for the respondent
Keywords: Endorsement, Criminal Law, Sentencing
[Feldman, Benotto and Miller JJ.A.]
Paul Calarco, for the appellant
Ian Bell, for the respondent
Keywords: Endorsement, Criminal Law, Trafficking, Sentencing
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