Canada: Court Of Appeal Summaries (December 19 – December 23, 2016)

Last Updated: January 5 2017
Article by John Polyzogopoulos


I hope everyone who celebrated had a Merry Christmas and Happy Hanukkah. Below are the summaries for last week's civil decisions of the Court of Appeal.

Topics covered included defamation, municipal liability, MVA, breach of contract, family law, wills and estates, tax, crown wardship and several procedural decisions covering jurisdiction/forum non conveniens, civil contempt, extensions of time to perfect appeals and striking pleadings.

As always, we welcome your comments and feedback. Please feel free to share this blog with others.

Civil Decisions:

Kiskadee Ventures Limited v. 2164017 Ontario Ltd., 2016 ONCA 955

[Doherty, MacPherson and Lauwers JJ.A.]

J. A. L. Kriwetz and D. Fenig, for the appellant
M.T. Wong, for the respondent

Keywords: Torts, Negligence, Damages, Lost Profits, Standard of Review, Credibility, Deference, Reasonable Apprehension of Bias, Fresh Evidence


The appellant, Kiskadee Ventures Limited ("Kiskadee"), sold produce and poultry to grocery stores. Kiskadee purchased the produce from suppliers in the Caribbean and the poultry from local Ontario suppliers.

Kiskadee operated out of several units in a condominium. The respondent, 2164017 Ontario Limited ("216"), operated its business out of a unit in the same condominium.

216 had work done in the basement of its unit in 2009. In December 2010, 216 filled in the hole in the basement floor with cement. Kiskadee claimed that the work done in December 2010 damaged the telephone cable running under the floor of 216's unit. Kiskadee maintained that the damage to the telephone cable caused it to lose telephone service in its units for several days.

Kiskadee sued 216, claiming that the damage to the telephone cable was caused by 216's negligence. Kiskadee further claimed that its inability to communicate by telephone in a timely fashion with its Caribbean produce suppliers and its Ontario poultry suppliers resulted in substantial business losses. The losses in respect of the Ontario poultry dealers consisted of the profits lost by Kiskadee when it could not complete certain purchases. The losses in respect of the Caribbean suppliers occurred because the suppliers could not communicate with Kiskadee as prearranged at Kiskadee's place of business. Absent that timely communication, the suppliers had purchased produce on behalf of Kiskadee which eventually could not be shipped to Canada and sold by Kiskadee. Kiskadee alleged that it was required to cover the suppliers' losses to maintain a good working relationship with them.

Kiskadee's claim depended almost entirely on the evidence of Latchman Narine, the owner of Kiskadee. Specifically, unless Mr. Narine's evidence was accepted, there was no evidence that Kiskadee had suffered any business losses as a result of an interruption of its telephone service in December 2010.

216 challenged virtually every aspect of Kiskadee's case, although 216 did acknowledge that it filled the hole in the basement of its unit with cement in December 2010.

The trial judge rejected Mr. Narine's evidence in its entirety. She concluded that although Kiskadee had lost phone service on the same day that the cement was poured in the basement of 216, Kiskadee had failed to prove causation.


  1. Did the trial judge err in her assessment of Mr. Narine's credibility?
  2. Were the trial judge's repeated interventions, considered in the context of the entirety of the proceedings, sufficiently egregious to lead the reasonable observer to conclude that the appearance of impartiality had been sufficiently compromised so as to undermine the appearance of the fairness of the trial?
  3. Did the trial judge make a serious factual error when she found that Kiskadee had failed to show that the telephone cable servicing its units ran under the basement floor of 216 and hence could not prove causation?


Appeal Dismissed.


1. A consideration of this ground of appeal begins by recognizing the deference owed to the trial judge's fact-finding, particularly when the fact-finding is based on a credibility assessment. In support of the submission that the trial judge erred in her assessment of Mr. Narine's credibility, counsel offers fresh evidence on appeal. That evidence challenges one of the principal grounds upon which the trial judge rejected Mr. Narine's evidence and relates to an explanation of discrepancies between certain dates of faxes and letters.

When a party proposes to put fresh evidence before the Court of Appeal, it is incumbent on that party to explain why the evidence was not put forward at trial. As indicated above, Mr. Narine was specifically asked about certain dates and had no explanation for them.

The practice of filing document briefs at the outset of trial, containing the documents to be relied on by the parties, is a well-established one. The practice is encouraged as it can significantly enhance trial efficiency. However, trial efficiency is served only if counsel have a mutual and clear understanding of the evidentiary basis upon which the documents are tendered and communicate that understanding to the trial judge. The confusion over the basis upon which the document briefs were filed resulted in counsel for Kiskadee not turning his mind to the difference between the fax dates and the dates in the suppliers' letters and the impact that difference might have on a consideration of the authenticity of the documents. Had he done so, the explanation offered on appeal would have been put forward at trial. In these circumstances, the failure to offer the explanation at trial should not preclude the Court of Appeal's consideration of the evidence on appeal.

The admissibility of the fresh evidence turns on whether that evidence, considered with the rest of the evidence adduced at trial, could be expected to have affected the result or, more specifically, could be expected to have affected the trial judge's assessment of Mr. Narine's credibility: see Ontario Federation of Anglers and Hunters v. Ontario (Ministry of Natural Resources), [2002] O.J. No. 1445, at para. 63. If the answer is yes, the fresh evidence is admissible and a new trial must be ordered. If the answer is no, the evidence is not admissible on appeal.

The fresh evidence eliminates one of the significant reasons the trial judge advanced to support her finding that Mr. Narine was not a credible witness. However, her reasons contain some nine additional reasons for rejecting his evidence. Considering the reasons as a whole, the Court of Appeal was satisfied that there remained strong grounds upon which to reject Mr. Narine's evidence even in the face of the evidence offered on appeal. That evidence could not reasonably be expected to have affected the negative assessment of Mr. Narine's credibility.

There was no error in the material factual findings underlying the trial judge's credibility assessment. As to her reasons for finding Mr. Narine not to be a credible witness, the Court of Appeal accepted that some of the negative inferences drawn by the trial judge may not have been drawn by other trial judges. None of those inferences, however, fall outside of the broad spectrum of inferences reasonably available to the trial judge. The Court of Appeal must defer to those inferences in matters of credibility. The Court of Appeal would not interfere with the trial judge's assessment of Mr. Narine's credibility. Based on that assessment, Kiskadee's claim could not succeed.

2. The trial judge's questions did not reach the point at which they compromised the appearance of the fairness of the trial. Some of the interventions were appropriate. Most that were unnecessary were harmless. The isolated instances in which the trial judge's questioning took on the tone of aggressive cross-examination did not, standing alone, compromise what was, in all other respects, a fair trial.

3. The evidence of the Bell Canada employee who testified for Kiskadee was unclear.

Punzo v. Punzo, 2016 ONCA 957

[Feldman, Epstein and Miller JJ.A.]


R. Shulman, for the appellant
A. Pascuzzi, for the respondent

Keywords: Family Law, Child Support, Spousal Support, Imputing Income, Federal Child Support Guidelines, ss 16-20, Variation, Material Change in Circumstances, Retroactive Reduction, Willick v Willick, [1994] 3 SCR 670, D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, [2006] 2 S.C.R. 231, 2006 SCC 37, Kerr v Baranow, 2011 SCC 10


Viviana Punzo appealed from an order retroactively reducing Emanuele Punzo's child and spousal support obligations. The parties disagreed about the interpretation of the minutes of settlement that was the basis of the consent order varied below. Mr. Punzo took the position that he did not manage to earn the level of income that he said he made at the time of the consent order, and said that his actual income turned out to have been much lower. Ms. Punzo alleged that he was and is hiding income, and the consent order was to compensate for this dishonesty by imputing income to him. She argued that it was unjust to retroactively vary the consent order to entirely undo the financial protection she achieved through lengthy and expensive negotiations.

To succeed on a motion to change, an applicant must establish a material change in circumstances since the making of the original order. Here, the motion judge found that the termination of Mr. Punzo's employment, followed by a lengthy period of unemployment and subsequent re-employment at a substantially lower salary constituted a material change that warranted a reduction in child and spousal support. She accordingly found that had Mr. Punzo been earning that level of remuneration at the time of the Support Order, the parties would have agreed to different terms. She changed the Support order to reduce the level of spousal support and child support payable to Ms. Punzo.


1.Whether the motion judge erred by finding that a material change in circumstances had occurred.

a. Whether the motion judge erred by not accepting facts pleaded in a civil court proceeding as evidence in the current proceeding.

b. Whether the motion judge erred in not finding that the Support Order imputed income to Mr. Punzo.

c . Whether the motion judge erred by shifting the onus to Ms. Punzo to prove that Mr. Punzo is hiding income.

2. Whether the motion judge erred by reducing child and spousal support retroactively.


Appeal allowed, in part.


1. No.

a. No. Although the motion judge erred in stating categorically that pleadings are not evidence, nothing turned on that error. As the Court of Appeal has held, pleadings from a separate proceeding can be admitted as evidence for some purposes, but their admission is within the motion judge's discretion: Vanderbeeke v O'Connor, 2013 ONCA 665. Had the motion judge admitted the pleadings, she was not prepared to give them much weight. The statements they contained about Mr. Punzo's income were contradicted by both Mr. Punzo and his former employer in evidence that the motion judge accepted.

b. No. Ms. Punzo argued that imputation for the Support Order was necessary because of Mr. Punzo's dishonesty in underreporting his income. She further argued that the structure of the Federal Child Support Guidelines compels interpreting the Support Order as imputing income. Ms. Punzo contended that on a proper reading of s 16 and its exceptions, income must have been imputed to Mr. Punzo under s 19. Section 16 sets out a presumption that a spouse's annual income for child support purposes shall be determined from the sources of income set out in Revenue Canada's T1 General tax return form ("Line 150" income). Sections 17-20 provide exceptions to the general rule. Ms Punzo argued, through a process of elimination, that the departure from Line 150 income in this case must have been driven by an imputation of income, which is authorized by s 19. Ms. Punzo came to that conclusion because Line 150 income, which is presumptive, was not used and none of the other exceptions applied. Section 17 allows a court to "have regard" to the last three years of income and determine an amount that is fair and reasonable in light of any pattern of income or fluctuations in income where it would be unjust to base a support order on Line 150 income. Ms. Punzo argued that because $105,000 is not an average of the preceding three years of income, s 17 cannot have been the basis for the Support Order. Section 18 and s 20 were inapplicable. Ms. Punzo argued that that leaves s 19, which provides that the court may impute such income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include the diversion of income.

The motion judge did not err in rejecting Ms. Punzo's argument that the Support Order imputes income to Mr. Punzo. The argument suffered from two flaws. First, the Support Order is a consent order. Its terms are the product of the parties' negotiations, and not the result of judicial reasoning. Second, s 19 is not the only provision that would have been available to authorize a departure from the Line 150 income presumption from s 16. Ms. Punzo misread s 17, as an average is one pattern of income, but not the only one. The fact that $105,000 is not an average of the three proceeding years of income would not have ruled out the application of s 17 in any event.

c. No. Ms. Punzo's argument presupposed a finding that income was imputed to Mr. Punzo. The motion judge did not err in concluding the Support Order did not impute income. Ms. Punzo argued that Mr. Punzo was hiding income, and therefore the motion judge ought not to conclude that there had been a material change, no matter what the change in Mr. Punzo's salary might be. The motion judge found that there was no evidence before her that Mr. Punzo was hiding income. Ms. Punzo had an opportunity to adduce evidence and arguments to cast doubt on Mr. Punzo's evidence. Ms. Punzo's evidence did not persuade the motion judge that she should not accept Mr. Punzo's submissions as to his current income. This did not amount to an impermissible shift of onus onto her.

2. Yes. The motion judge did not conduct the proper analysis regarding retroactive support relief. The analysis requires a court to consider, after finding a material change, what type of change in support is appropriate given that finding. The motion judge moved from finding a material change to immediately granting Mr. Punzo's requested orders, retroactively reducing support as of January 1, 2013, without engaging in either step of the requisite retroactivity analysis.

The Court of Appeal remitted the matter back to the motion judge to determine whether a retroactive change in support is warranted, the start date for any retroactive change in support, and the quantum of support.

a. Whether retroactive change in support is appropriate

In Willick v Willick, [1994] 3 SCR 670, the Supreme Court described the proper analysis as requiring that a court "determine first, whether the conditions for variation exist and if they do exist what variation of the existing order ought to be made in light of the change in circumstances. This framework applies to child support as well as spousal support.

In DBS, the Supreme Court outlined a framework for addressing retroactive increases in child support, and later held that similar considerations to those set out in DBS are relevant to a retroactive award of spousal support: Kerr v Baranow, 2011 SCC 10. For retroactive change, a court must first determine whether retroactive support should be ordered, having regard to a number of factors. Once it is determined that retroactive support should be ordered, the court must decide the date of retroactivity and the amount of support. The framework from DBS for retroactive increases in support also applies to retroactive reductions.

The motion judge erred by failing to engage in either step of the DBS analysis, as she did not consider (i) whether retroactive relief was appropriate in this case and if so (ii) the appropriate retroactivity date and quantum of support. With respect to the first step, there is a difference between (i) relief from payment of arrears based on current inability to pay, and (ii) relief from arrears accumulated due to a change in the payor's circumstances that affected the payor's ability to make the support payments as they come due. The difference is that in the first category, the payor had the ability to pay at the time the arrears first accrued. Relief under the former category is unlikely unless the payor establishes, on a balance of probabilities, that he cannot and will not ever be able to pay the arrears. However, a court has more discretion to grant relief from arrears under the latter category. The respondent effectively sought relief under both categories.

In Corcios v Burgos, 2011 ONSC 3326 at paras 45-47, Chappel J outlined a number of factors to guide a court in determining whether to grant relief under the second category in the context of child support: the nature of the support obligation; the ongoing needs of the support recipient and the child; whether there is a reasonable excuse for the payor's delay in applying for relief; the ongoing financial capacity of the payor; the conduct of the payor; delay on the part of the recipient in enforcing the child support obligation does not in itself constitute a waiver of the right to claim arrears; and any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears. The motion judge erred by reducing the respondent's support effective January 1, 2013 without finding that the respondent had established, on a balance of probabilities, that he could not and would not ever be able to pay the arrears that accrued before the material change in circumstances. The motion judge did not consider any of the factors noted above.

With respect to the second step of the analysis, the Supreme Court in DBS held that where a retroactive award is appropriate, the general rule is that the date of effective notice should serve as the date to which the award should be retroactive. Effective notice serves as the presumptive start date for a retroactive support award. The motion judge failed to consider the presumptive start date of effective notice and failed to consider any factor that might suggest a different start date for child or spousal support.

Even having determined there has been a material change in circumstances warranting variation and the date of variation, it is still necessary to conduct an analysis to determine the appropriate quantum of support. The motion judge erred in law by failing to conduct such an analysis.

Talbot c. Bergeron, 2016 ONCA 956

[Weiler, Rouleau and Roberts JJ.A.]

R.H. Gouin, for the appellant
M.H. Levesque, for the respondent

Keywords: Wills and Estates, Estate Trustees, Conflict of Interest, Substitution, Wills, Validity, Capacity


The sister, Talbot, appealed a decision in which the Court denied her application to have her brother, Bergeron, removed as trustee from the two wills of their father. The father, who died on September 14, 2015 at the age of 73, had two children, the appellant and the respondent. He founded and operated a family business under the name "Bergeron's Greenhouse" and "Bergeron's Fruit and Vegetable". The business owned several greenhouses, a store, and 150 acres of land.

In 1999, the testator suffered an aneurysm that impacted his ability to manage the family business. As a result of the father's loss of certain cognitive functions, the brother and sister became more involved. The sister ran the greenhouses and the brother maintained finances and sales.

The appellant maintained that she worked in the family business from 1979 to 2005 for a very low salary because her father promised her that the business would be hers.

The respondent admitted that the appellant was a central employee to the family's business, but denied that there was ever a pledge with respect to the company's assets. He maintained that the father was unhappy with the pressure that the appellant exerted on him to bequeath to her 50% of his lands. According to the respondent, the appellant had known for a long time that she would receive only the house and some land in Florida.

The respondent also explained that he started his own business, Landtech, in 1986, and since 1994 had been managing both the family business and Landtech together. According to him, he had rescued the family business at various times from debts that he had paid off with Landtech's money.

In January 2015, after his diagnosis with lung cancer, the father executed two new wills, in which the respondent would receive the majority of the father's land valued at several million dollars. The appellant would receive a property in Florida of unknown value, and the personal residence of the father valued at $225,000 but encumbered with a 1.4 million dollar mortgage.

When the appellant learned about the wills, she contested their validity and demanded that the respondent be removed as trustee.

The judge rejected the appellant's application. In his reasons, he correctly noted that at that stage in the proceedings, he was not being asked to settle the ultimate question of the father's capacity, but rather only the question of whether the brother should be removed as trustee.

Nevertheless, the judge conducted a full analysis of the ultimate question of capacity. At paragraph 10 of his reasons, he enumerated five reasons for why he concluded that the father "did not suffer any incapacity to manage his affairs according to his own will".

Concluding that there was no reason to question the validity of the wills, the judge turned to the question of removing the brother as trustee. He determined, without explanation, that there was no concrete proof that the trustee would act negligently or maliciously in the execution of his duties, not that had acted contrary to the interest of the estate and beneficiaries.

Finally, the application judge found that the simple fact that the brother and sister were in personal conflict was not a sufficient reason for replacing the brother as trustee.


  1. Did the application judge err in requiring proof that the respondent acted as trustee counter to the interests of the beneficiaries and the estate?
  2. Did the application judge err in requiring proof that the respondent acted negligently or maliciously in the execution of his responsibilities as trustee?
  3. Did the application judge err in ignoring the facts alleged by the appellant?
  4. Did the application judge err in ignoring the respondent's conflicts of interest?


Appeal allowed.


The application judge should not have arrived at a conclusion regarding the validity of the wills, as this was not a question that he was asked to answer. Furthermore, the judge continually referenced the arguments and proof submitted by the respondent, but made no reference whatsoever to the numerous facts submitted by the appellant. In particular, the judge should have explained why he rejected the appellant's submissions that her father did not have capacity at the time the January 2015 wills were created. The application judge also ignored important conflicts of interest that could have led to the conclusion that the wills were invalid.

When the validity of a will is questioned and the principal beneficiary is the trustee, a Court that is asked to decide on whether to remove the trustee must evaluate whether it will be difficult for the trustee to act impartially in the execution of his duties. It is not necessary to have proof of misbehaviour or malice, as the question is whether it will be difficult for the fiduciary to maintain objectivity as opposed to whether it is probable that he or she will misbehave or act with malice.

The evidence demonstrated numerous potential conflicts of interests, and the judge did not consider these whatsoever in his reasons.

According to Re Groner Estate, a judge that must decide on the removal of a trustee or the validity of a will must consider the value of the estate, the presence of conflicts of interest, the potential advantage of appointing a neutral trustee, and the need for expertise in administrating the estate.

The evidence submitted by the appellant raised serious questions as to the validity of the wills. Furthermore, the fact that the respondent had been mixing the operations of Landtech and the family business for several years meant that he may not be able to prepare an inventory of assets in an unbiased manner, and there are good reasons instead to hire an independent expert.

Finally, there was a significant amount of money at stake. The lands of the father are worth many millions of dollars.

The decision of the application judge was overturned, and the respondent was removed from his position as trustee for the duration of the proceedings concerning the validity of the wills. An independent trustee was appointed.

Cahill v. Cahill, 2016 ONCA 962

[Simmons, Pepall and Huscroft JJ.A.]


W. R. Hunter, for the appellant Sheila Kehoe
M. V. Peters, for the respondent

Keywords: Wills and Estates, Trusts, Estate Trustees, Breach of Trust, Trustee Act, RSO 1990, c T23


Thomas Cahill died in March 2010. In his will, he appointed his daughter, the appellant, Sheila Kehoe, and his son, Kevin Cahill, as executors and trustees of his estate. They were directed to set aside $100,000 in a trust fund for the benefit of their brother, Patrick Cahill, with the remainder to the testator's grandchildren. They failed to do so.

The will directed that Patrick was to receive a payment of $500 each month from the trust fund. Kevin was to be the trustee of the trust fund with "sole discretion as to the investment of the monies" in the fund. However, Kevin used most of the $100,000 for his own benefit. Patrick then sued the two executors and trustees and claimed breach of trust.

The application judge found in Patrick's favour. Sheila appeals from that judgment. Sheila submits that the application judge erred in concluding that she did not establish a trust fund, in holding her liable for losses caused by Kevin, and in failing to relieve her from liability pursuant to s. 35(1) of the Trustee Act.


  1. Did the application judge err in finding that a trust was not established?
  2. Did the application judge err in finding that the appellant was liable for any loss occasioned by Kevin?
  3. Did the application judge err in denying the appellant relief under s. 35(1) of the Trustee Act?


Appeal dismissed.


1. No. The appellant submits that the application judge erred in finding that a trust was not established. The three certainties required to establish a trust were met by the language of the will, and the trust was constituted when the funds were placed with London Life. The appellant argues that the payments to Patrick established that the trust was declared, constituted and therefore created, and the absence of Patrick's name on the documents did not deprive him of his beneficial interest. As such, the application judge ought not to have concluded that the appellant failed in her duties to Patrick and the grandchildren.

The Court of Appeal found that liability exists even if the loss would have occurred without the breach. In general, liability is imposed not to punish trustees but to restore the beneficiaries to the position they would have been in had the breach not occurred.

In this case, the will was clear: Sheila and Kevin were to set aside $100,000 in a trust fund for the benefit of Patrick. Kevin then was directed to invest those funds and make monthly payments to Patrick of $500. In the event that Patrick pre-deceased any of the testator's grandchildren, the trustees were to distribute the remaining trust funds to those beneficiaries. Based on the record before her, it was open to the application judge to make the finding that a trust fund had never been established. There is no reason to interfere with that finding.

2. No. The appellant submits that once the trust was established, she had no further obligation with respect to its management. The will was clear in giving Kevin sole discretion over the investment of the trust funds, and any liability for the loss rested with him. Similarly, Sheila argues that it was Kevin's duty to distribute any remainder in the trust to the testator's grandchildren who had been designated beneficiaries, and Kevin's personal representative would assume his duties if something happened to him.

The application judge found that Sheila failed to discharge her obligations as an executor and trustee of the estate, because the trust fund for Patrick was never established. The application judge found that "by her own admission, Sheila had virtually no involvement in the administration of the estate." Sheila had abdicated her duties. Again, the record supports that key finding. The fact that Sheila thought that she was acting responsibly does not excuse her inaction. Doing nothing was not a luxury available to her as a co-trustee.

Although the will did provide Kevin with the responsibility for investing the monies in the trust fund, this did not absolve Sheila, as co-trustee, of her responsibility to ensure that the trust fund was properly set up. Further, the testator directed that Patrick's trust fund be divided amongst his grandchildren who are living at the time of Patrick's death. This obligation to divide any remainder of the trust fund among the grandchildren was a continuing one; it bound Sheila and was not confined to Kevin (or his personal representative, should he die).

3. No. The appellant submits that she should be afforded relief under s. 35(1) of the Trustee Act, because any breach by her was neither dishonest nor unreasonable, but rather reflected an honest mistake. Section 35(1) of the Trustee Act provides an opportunity for court-sanctioned relief where the trustee "has acted honestly and reasonably, and ought fairly to be excused for the breach of trust." That said, s. 35(1) is discretionary. Absent any palpable and overriding error, deference is owed to the application judge's exercise of discretion. The trustee has the burden of proof with respect to the three elements in s. 35(1): (1) that he or she acted honestly; (2) that he or she acted reasonably; and (3) that he or she ought fairly to be excused.

Whether a trustee has acted honestly and reasonably will depend on the facts of the particular case. Generally, the courts have interpreted 'honestly' as an active involvement in the affairs and decisions of the trust administration. Whether a trustee's conduct is "reasonable" is generally determined on the basis of what an ordinary prudent business person would have done in the circumstances. Courts are to consider a trustee's breach of trust in the light of all of the circumstances. The relevant factors will include whether the breach was technical in nature or a minor error in judgment; whether the trustee was paid; and whether the trustee is a professional.

The application judge in this case found that Sheila did not act reasonably. Sheila made no inquiries and took no steps to fulfill her duties owed to the beneficiaries. The application judge gave extensive and thoughtful reasons and was alert to the factual context. There is no basis on which to interfere with the application judge's decision.

Toronto Distillery Co. v. Ontario (Alcohol and Gaming Commission), 2016 ONCA 960

[Cronk, Juriansz and Brown JJ.A.]


C.Benoit, agent for the appellant
S. C. Hutchinson, for the Alcohol and Gaming Commission of Ontario
M. Dunn and P. Ryan, for the Attorney General of Ontario
M. J. Dougherty and L. Kinkartz, for the Liquor Control Board of Ontario


The LCBO's contract was non-negotiable and required the appellant to first sell its spirits to the LCBO before putting the spirits up for sale in the distillery store. The distillery would then sell the spirits to the public as the LCBO's agent. The contract also granted the LCBO the power to set mark-up and commission rates on the spirits sold. The contract provided the appellant would receive a 13% commission for acting as the LCBO's agent in selling the spirits.

The appellant brought an application for a declaration that the LCBO's mark-up was an unconstitutional tax. It argued it was an unconstitutional tax because under ss. 53 and 90 of the Constitution Act, 1867, taxes must be imposed by Parliament or the provincial legislature. Regulatory bodies cannot be empowered to impose taxes.

The application judge dismissed the application. The appellant seeks to avoid this result by urging a particular interpretation of the distinction between proprietary charges and taxes that Rothstein J. made in 620 Connaught Ltd.


Did the application judge err in his analysis and conclusion that the mark-up is a proprietary charge and not a tax?


Appeal dismissed.


No. The court was not persuaded that Rothstein J. intended that "commercial context" be given such a restricted meaning. The application judge found the LCBO was the owner and commercial supplier of the spirits in question. The court agreed with the application judge's analysis and his conclusion that the mark-up is a proprietary charge and not a tax. Furthermore, the panel agreed with the application judge's alternate conclusion that the mark-up is not a tax because the appellant agreed to it in its contract.

As owner of the goods, the LCBO must have the right to determine the prices for which they are sold, including the mark-up. It follows that the mark-up is not an exercise of the government's public authority but of its private law rights.

The appellant submitted that the application judge erred in finding it is not under a "practical compulsion" to obtain authorization to operate a retail store. The court acknowledged that, within the regulatory framework, this is the only way it can sell its products directly to the public, albeit through a third party. However, that requirement falls short of the restrictions discussed in Canadian Industrial Gas & Oil Ltd. v. Government of Saskatchewan et al., [1978] 2 S.C.R. 545 ("CIGOL"), where a petroleum royalty surcharge was held to be a tax.

The court agreed with the application judge's observation that the applicant entered into a contract with the LCBO for a commercial advantage and it was clear that the applicant was not compelled to sell its products through its own store.

Children's Aid Society of Toronto v. V.D. (Publication Ban), 2016 ONCA 959

[Cronk, Juriansz and Roberts JJ.A.]


V.D., acting in person
P.V., acting in person

Keywords: Publication Ban, Family Law, Crown Wardship, Child and Family Services Act, s 45, Childrens Aid Society, Standard of Review, Deference, Palpable and Overriding Error


The appellant V.D. is the biological mother of P.A.V., a young boy born on January 4, 2008. The appellant P.V. is P.A.V.'s biological father. On December 11, 2014, Weagant J. of the Ontario Court of Justice (the "trial judge") found P.A.V. to be in need of protection due to neglect under s. 37(2)(b) of the Child And Family Services Act, R.S.O. 1990 c. C.11 (the "Act"). P.A.V. has been in the temporary care of the respondent, the Children's Aid Society of Toronto (the "CAS"), ever since. Although the appellants now dispute the trial judge's finding of severe neglect of P.A.V., no party appealed the trial judge's protection ruling.

By order dated July 29, 2015, Weagant J. made P.A.V. a Crown ward with no access to the appellants, pursuant to s. 57(1)(3) of the Act. The appellants appealed to the Superior Court of Justice, asserting that the trial judge had misdirected himself and erred in law in numerous respects. On May 10, 2016, Backhouse J. of the Superior Court (the "appeal judge") dismissed their appeal.

The appellants now appeal to the Court of Appeal from the appeal judge's decision.


Was there procedural unfairness or any reversible error by either the trial or the appeal judge?


Appeal dismissed.


No. There is nothing in the record to support an allegation of procedural unfairness or any reversible error by either the trial or the appeal judge.

The appeal judge considered each of the appellants' grounds of appeal in detail. She provided cogent and comprehensive reasons (20 pages) for her rejection of them. In particular, after alluding to the pertinent evidence before the trial judge, including the expert evidence, regarding P.A.V.'s needs, V.D.'s parenting capacity and her proposed plan of care, and the trial judge's conduct of this lengthy trial (35 days), the appeal judge held:

1) there was no merit to the appellants' multiple allegations of bias and procedural unfairness against the trial judge;

2) contrary to the appellants' contention, Dr. Jean Wittenberg (a staff psychiatrist at the Hospital for Sick Children and head of that institution's Infant Psychiatry Program who conducted a third parenting capacity assessment in respect of V.D.) did not usurp the trial judge's role or function. Rather, the trial judge's decision to make P.A.V. a Crown ward and to terminate parental access was his alone, based on the totality of the evidence at trial;

3) it was open to the trial judge on the evidence to conclude, as he did, that continued parental access was not in P.A.V.'s best interests, that the appellants had not satisfied their onus of demonstrating that access would benefit P.A.V. once he became a Crown ward, that V.D.'s inability to control her conduct, including her harassing behaviours, demonstrated a present and continuing impediment to permanency planning for P.A.V., and that V.D. routinely ignores directions and rules regarding P.A.V. with which she disagrees; and

4) there was no basis on the record to conclude that the trial judge failed to consider whether P.A.V. could be returned to V.D.'s care or whether it was in P.A.V.'s best interests to have a continuing relationship with the appellants. To the contrary, the trial judge's reasons confirm that he carefully considered these central issues and that his findings were supported by the evidence he accepted.

The Court of Appeal did not find any errors in the appeal judge's findings or in her reasoning. Her findings, and those of the trial judge, attract considerable deference from the Court of Appeal: see C. (G.C.) v. New Brunswick (Minister of Health and Community Services), [1988] 1 SCR 1073. Furthermore, the appellants have been unable to point to any palpable and overriding error or any reversible error of law in the appeal judge's decision.

Further, while the appellants maintain that there was no valid final order by the trial judge before the appeal judge, that the order contained in the appeal hearing materials is "illegal" and "false" or a forgery, and that Dr. Wittenberg's report was "altered" or "fabricated", they adduced no evidence in support of these serious allegations. There is no evidentiary foundation on the record before this court to support these bald assertions.

Finally, to the extent that the appellants renew their challenge to the trial judge's decision based on the arguments advanced by them before the appeal judge, those arguments were fully considered by the appeal judge, and rejected, for cogent and clear reasons.

Gardiner v. MacDonald, 2016 ONCA 968

[Cronk, Juriansz and Roberts JJ.A.]


J. de Vries and P. Brennan, for the appellants, the City of Ottawa and Raymond Richer
P. Cronyn, for the respondents
P. Muirhead, for Intact Insurance Company
No one appearing for State Farm Mutual Automobile Insurance Company and Andrew MacDonald, as Litigation Administrator for the Estate of Mark MacDonald, although duly served.

Keywords: Torts, Negligence, Motor Vehicle Accident, Standard of Care, Causation


The appellants, the City of Ottawa and Raymond Richer, appealed from the trial judgment assigning 20% liability to them for a serious motor vehicle accident. The accident resulted in three fatalities and catastrophic injuries for a fourth individual, the respondent Ben Gardiner. The late Mark Macdonald was driving himself and four passengers, including Mr. Gardiner, home after having spent the evening at various pubs. Mr. MacDonald's car entered the intersection on a red light and collided with an OC Transpo bus driven by the appellant, Raymond Richer, an employee of the City of Ottawa. Mr. Richer was driving through the intersection on a green light.

Mr. MacDonald's estate admitted liability for the accident and the parties eventually agreed on the respondents' damages. The issues at trial were whether Mr. Richer was negligent in his operation of the City bus.

The trial judge concluded that Mr. Richer was negligent in his operation of the City bus. Among other things, she found that he was travelling at an excessive rate of speed and that he was looking from left to right, rather than in front of him, when he approached and then entered the intersection. She concluded that, but for his negligent acts, Mr. Richer could have avoided the collision with Mr. MacDonald's car. She assessed Mr. Richer and the City of Ottawa as 20% liable for the respondents' damages.


(1) Did the trial judge err regarding the standard of care applied to Mr. Richer?

(2) Did the trial judge err in her causation analysis?


Appeal dismissed.


(1) No. The trial judge correctly held that Mr. Richer was obliged to observe the standard of care of a reasonably prudent driver in like circumstances. Regarding the duty of care of a dominant driver entering an intersection, the trial judge stated: "Despite having the statutory right-of-way, a driver in the shoes of Mr. Richer is required to yield the right-of-way where, exercising proper care, circumstances dictate he ought not to exercise the statutory right-of-way."

The Court of Appeal held that there was no error in the trial judge's consideration of Mr. Richer's status as an experienced bus driver in respect of an elevated standard of care. Mr. Richer himself conceded the relevance of his status as a professional bus driver. As the trial judge stated: "Mr. Richer admitted that the duties he was bound to observe as a professional driver applied on the night of the collision. He admitted these duties applied even though he was driving a 'work bus', out-of-service to the regular public, transporting other bus drivers."

The appellants argued unsuccessfully that the trial judge erred by holding that Mr. Richer's momentary inattention to the intersection, when he looked right and left and into the mirrors of the bus, constituted negligence. They asserted that this finding was unfair as the relevant bus driver's manual directed him to take these actions and they reflected common practice among bus drivers on approach to an intersection. The Court of Appeal held that the manual's direction, like any other best practice, is not a mandatory or absolute requirement. More importantly, the trial judge did not look at this factor in isolation but as only one of the constellation of relevant factors that she was obliged to consider. Those other factors included, for example, his speed of travel and his failure to adjust his manner of driving for the prevailing winter road and weather conditions.

(2) No. The appellants submitted that the trial judge erred by failing to determine the actual rate of speed at which the bus was travelling when it entered the intersection, which was essential to the evidence of the expert witnesses with respect to accident avoidance. However, the Court of Appeal rejected this argument.

As the trial judge noted, it was not necessary for her to determine, with scientific precision, the exact speed at which the City bus was travelling at the time of impact. Based on the evidence given by Mr. Richer and that of his passenger Mr. Moran, the GPS evidence, and the expert accident reconstruction evidence that she accepted, the trial judge found that: i) Mr. Richer was operating the bus at a rate of speed in excess of the posted speed limit ii) critically, Mr. Richer did not decelerate on his approach to the intersection; iii) the pre-impact speed of the bus exceeded 65.6 kilometres per hour after it entered the intersection; and iv) Mr. Richer was momentarily inattentive to the road ahead when he glanced left and then right, into the side mirrors of the City bus.

These findings were open to the trial judge on the evidentiary record. They amply supported her conclusion that Mr. Richer was travelling at an excessive rate of speed at the time of the accident and her acceptance of the expert evidence that, had he not been doing so, the accident could have been avoided.

Awan v. Levant, 2016 ONCA 970

[Feldman, Simmons and Rouleau JJ.A.]

I. MacKinnon, for the appellant
B. Shiller and A. Chaisson, for the respondent

Keywords: Torts, Defamation, Libel, Defences, Justification, Fair Comment, Qualified Privilege, Malice, Damages, Aggravated Damages, Standard of Review


The appellant published nine posts to his online blog, which the trial judge found were libellous of the respondent. Any defences that might have been available were negated by the trial judge's finding that the appellant was motivated by malice. She awarded $50,000 in general damages and $30,000 in aggravated damages. The appellant appeals both the finding that the blog posts were libellous and the quantum of the damages award.

On October 23, 2006, Maclean's magazine published a cover story entitled "The future belongs to Islam". The article was an excerpt from a book by journalist Mark Steyn entitled America Alone. The respondent became aware of the article shortly thereafter from a press release by the Canadian Council on American Islamic Relations, which expressed concern about the content of the article. Following discussions with some friends and colleagues, a group of four law students (including the respondent) decided to approach Maclean's with their concerns.

Believing their concerns had not been addressed by Maclean's, the students launched a series of human rights complaints. The British Columbia Human Rights Commission held a hearing, but it dismissed the complaint. It was at this stage that the appellant entered the picture. The appellant attended the hearing for the first two days and live-blogged its events. These blog posts form the subject matter of the respondent's libel claims. It was during Mr. Porter's cross-examination of the respondent that the appellant posted the majority of the blog posts that form the subject matter of this action. Although the content varied, they generally stated that the respondent was lying about whether the students asked Maclean's at the meeting to publish a response from a mutually acceptable author.

The respondent served a libel notice, dated July 14, 2009. Following that, he commenced the present action. The trial judge began by rejecting the appellant's argument that because of his reputation as someone who is provocative and controversial, none of the words complained of were defamatory. She held that an ordinary, right-thinking member of society would readily regard several of the statements as defamatory. Having established that the blog posts were defamatory, the burden shifted to the appellant to establish a defence. At trial, the appellant relied to varying degrees on the defences of justification, fair comment, and qualified privilege. His main defence was fair comment on a matter of public interest.

With respect to the repeated statements calling the respondent a liar, the trial judge held that these were statements of fact, rather than comments. The trial judge held that even if these statements were comments, the defence of fair comment would fail because the appellant failed to prove that the respondent lied deliberately, which was necessary to prove that he was in fact a liar. Any defence of fair comment is defeated by malice on the part of the person making the comment. The trial judge found that there was ample evidence demonstrating malice by the appellant.


  1. Is less deference owed to a trial judge's findings of fact when a Canadian Charter of Rights and Freedoms right such as freedom of expression is at stake?
  2. Did the trial judge err in holding that when the appellant called the respondent a liar, that was a statement of fact and not opinion and that the appellant had to prove that the impugned lie was made deliberately by the respondent?
  3. Similarly, did the trial judge err in holding that the allegation that the respondent is one of a group of anti-Semites is a statement of fact and not comment or opinion?
  4. Did the trial judge err in finding that the respondent did not act as co-counsel at the BCHRT hearing?
  5. Did the trial judge err in law by finding that the appellant was actuated by malice against Dr. Elmasry and that that malice vitiated the fair comment defence?
  6. Did the trial judge err in the calculation of general damages and in also awarding aggravated damages?


Appeal dismissed.


  1. The court referred to the Supreme Court decision of Grant v. Torstar Corp., 2009 SCC 61, [2009] 3 S.C.R. 640 which explains that the protection of free speech is not intended to be at the expense of a wrongfully defamed person's ability to obtain a civil remedy for the tort of libel. The two rights live together under Canadian law and are to be interpreted and applied by judges at both the trial and appeal levels. The court could not see any basis for applying a less deferential standard of review to the findings of fact of a trial judge in this context than in any other.
  2. In the court's view, based on these principles, calling someone a liar when discussing a matter of public interest or discourse would more likely be found to be a comment rather than a fact. However, in this case it was open to the trial judge to conclude that the appellant's characterization of the respondent as a liar was stated as a matter of fact, not comment. She properly instructed herself that the distinction between what is fact and what is comment must be determined from the perspective of a "reasonable reader". She concluded that the appellant's description of the respondent as a liar was stated as a fact in the context of a report of a hearing, and that it was not recognizable as comment. Nor did the appellant add words such as "in my view" to suggest that the words were intended as comment. The court saw no basis for this court to interfere with the trial judge's conclusion.Although the trial judge erred in her characterization of the appellant's blog statement that the respondent was an anti-Semite as a statement of fact rather than opinion, the defence of fair comment could not apply if the statement was made, as the trial judge found, with malice.
  3. This ground of appeal relates to the allegation in the eighth post that the respondent was in a conflict of interest by acting as an articling student and co-counsel at the BCHRT hearing, while also being called as a witness. The standard of review accorded by an appellate court to a trial judge on findings of fact is a deferential one. However, the trial judge found that the underlying fact of the comment was that the respondent was acting as co-counsel, and that fact was not true. The trial judge found that the respondent was not co-counsel.The appellant is effectively asking the court to find that the trial judge made a palpable and overriding error in her finding on this issue or misperceived the evidence. In the court's view, the trial judge was entitled to come to the conclusions she did based on the record. There is no basis to interfere.
  4. The trial judge's finding of malice was critical to her conclusion that the appellant libelled the respondent, and to her assessment of damages. The trial judge found that the appellant was motivated by express malice against Dr. Elmasry, and that he viewed the respondent and Dr. Elmasry "for all intents and purposes, as one and the same."The appellant challenges the trial judge's conclusion that he was motivated by malice against the respondent. The force of the appellant's submission is that the trial judge was mistaken when she concluded that he was motivated by malice. However, this was a finding of fact. The respondent pled malice. Based on the record, the trial judge concluded that the appellant transferred his animosity toward Dr. Elmasry to the respondent. The trial judge was entitled to make that finding. Although the appellant may believe that the trial judge misunderstood his motives, her findings were based on her view of the record. There is no basis to interfere.
  5. As the respondent brought this action under the simplified rules, the trial judge was cognizant that the maximum possible damage award was $100,000. She also noted that awards of general damages in libel cases should be relatively modest.On the appeal, the appellant argues that the damage award was too high, challenging some of the findings by the trial judge. In particular, he argue that the respondent in fact enjoys an excellent reputation in the community, having won a Saskatchewan Future 40 award in 2013 recognizing "up and comers" in various fields.The court would not give effect to this ground of appeal. A trial judge's assessment of damages is accorded significant deference on appeal. She is not required to mention every factor that may have affected the calculation. She was well-aware of the respondent's circumstances and cautioned herself to make a relatively modest award. The appellant submits that the trial judge erred by awarding aggravated damages, which duplicated the general damages award and resulted in double counting. This potential for overlap and therefore double counting is controversial and has led some to call for the abolition of separate awards of aggravated damages in defamation actions. The trial judge made no error by awarding $80,000 to fully compensate the respondent for the damages she found that he suffered from the malicious conduct of the appellant, whether the amount included for aggravated damages is viewed separately or as part of the general damages award.

1615540 Ontario Inc. (Healing Hands Massage Therapy) v Simon, 2016 ONCA 966

[Feldman, Lauwers and Miller JJ.A.]

J. Radnoff and C. Haworth, for the appellant
J. N. Simon, acting in person

Keywords: Contracts, Civil Procedure, Summary Judgment, Hryniak v Mauldin


The case concerned a business disengagement between the respondent chiropractor, Dr. Simon, and the appellant, 1615540 Ontario Inc., carrying on business as Healing Hands Massage Therapy Clinic ("Healing Hands"), the clinic at which the respondent practiced as a chiropractor from September 2010 until April 19, 2013. In the judgment under appeal, the motion judge dismissed Healing Hands' action and allowed Dr. Simon's counterclaim in part, granting her summary judgment against Healing Hands.

Dr. Simon removed her chiropractic practice overnight on April 19, 2013. Healing Hands sued her on May 3, 2013, and brought a motion for an interlocutory injunction which was heard by the same motion judge who heard the summary judgment motions, requiring her to return patient files and records, and certain other property she took from the clinic ("injunction decision"). The motion judge made the requested order on May 22, 2013, in accordance with the Personal Health Information Protection Act, 2004.

Dr. Simon issued a statement of defence and counterclaim on September 6, 2013. Dr. Simon was cross-examined, but the principal of the clinic, Mr. Asher Mahmood, was not. Healing Hands moved for summary judgment on its claim and Dr. Simon moved for summary judgment on the counterclaim.

In dismissing Healing Hands' summary judgment motion and allowing Dr. Simon's summary judgment motion in part, the motion judge stated that he was satisfied that the Clinic breached its business arrangement with Dr. Simon and because of the breakdown of their relationship, she left the practice. The motion judge did not identify what he considered to be the actual breach committed by Healing Hands. The motion judge did not identify the legal basis on which he found Healing Hands liable for damages.


Whether the motion judge erred in:

  • Exercising his authority to decide the motions under r 20 of the Rules of Civil Procedure in the face of conflicting evidence with respect to the business arrangement between Healing Hands and Dr. Simon.
  • Awarding damages, and in his calculation of the quantum.
  • Failing to address Healing Hands' motion for summary judgment.
  • His award of costs.

The Court of Appeal only addressed the first and second issues.


Appeal allowed.


(1) Yes. The Court of Appeal inferred that the breach by Healing Hands of its business arrangement with Dr. Simon relates to Mr. Mahmood's decision to increase the clinic's share of Dr. Simon's billings from 20% to 35%, which the motion judge recounted in the injunction decision. However, the evidence on the issue was strongly disputed. Mr. Mahmood stated in his affidavit (on which he was not cross-examined) that the arrangement progressed from the rental of space for $80/day paid by Dr. Simon to an arrangement under which 20% of her billings would be paid to the clinic, with the balance going to her. The arrangement started in the spring of 2012. Mr. Mahmood states that he agreed that she could start by paying 20% to the clinic, however, eventually, this would have to change to 35%. By January of 2013, according to Mr. Mahmood, the chiropractic practice was busier. As such, he advised Dr. Simon that she would now have to pay 35% of her revenues to the clinic. Mr. Mahmood swears that Simon agreed with the relationship. Healing hands implemented the arrangement in January 2013. In mid-April 2013, Dr. Simon questioned the 35% figure. Mr. Mahmood reminded her that she agreed to pay 35%. Dr. Simon decamped shortly after.

Dr. Simon's evidence was different. In her affidavit she took the position that she was to pay 25% of billings to Healing Hands. She admits that in January 2013 Mr. Mahmood told her that the amount would have to increase to 35%. She says that she expressly told him that she did not agree to the increase and no agreement was reached. Dr. Simon made her departure from the clinic with patient records and clinic property.

The evidence in the record established a conflict on the facts that required resolution.

The principles surrounding summary judgment were established by the Supreme Court in Hryniak v Mauldin, 2014 SCC 7 and its companion decision, Bruno Appliance and Furniture Inc v Hryniak. In Bruno Appliance and Furniture, Karakatsanis J described a two-step assessment process. The first step is to ask whether the matter can be resolved in a fair and just manner on a summary judgment motion. Where on the record there appears to be a genuine issue requiring a trial, the second step is to consider whether the need for a trial can be avoided by using the new powers provided under Rules 20.04(2.1) and (2.2). The motion judge's decision to exercise these powers is discretionary and attracts appellate deference provided that their use is not against the interest of justice.

In this case, a genuine factual issue existed between the parties on the evidence.

The motion judge did not state how the clear differences in the evidence of Dr. Simon and of Mr. Mahmood ought to be resolved, the resolution of which would necessarily have depended largely on findings of credibility. The outcome leads to the inference that he simply preferred Dr. Simon's evidence over Mr. Mahmood's, which was untested by cross-examination.

Where the evidence in the record establishes a clear conflict, it is incumbent on a summary judgment motion judge to consider expressly whether the powers provided under r. 20.04 (2.1) and 20.04 (2.2) are to be deployed in resolving the conflict. Anything less risks substantive injustice.

(2) Yes. The motion judge found that Healing Hands was liable for Dr. Simon's loss of income for 2.25 years after she left the clinic, but did not root the legal basis for this finding either in the business arrangement or in Healing Hands' undertaking to pay damages (which it had given on the interlocutory injunction motion). It also appears that the motion judge misapprehended Healing Hands' position on liability, and did not address a factual point regarding Dr. Simon's income after she left the clinic.

Greenberg v. Nowack, 2016 ONCA 949

[Strathy C.J.O., LaForme and van Rensburg JJ.A.]

M. Greenglass, for the appellants
S. J. Nowack, acting in person

Keywords: Civil Procedure, Enforcement of Orders, Contempt, Carey v. Laiken, Rules of Civil Procedure


This is an appeal of an order dated February 1, 2016. The order arises out of a contempt motion brought in the course of the efforts of the appellants, Joseph and Pepi Greenberg, to enforce a judgment against the respondent, Steven Nowack. The Greenbergs (the "appellant") assert that the motion judge erred in law in refusing to find Mr. Nowack (the "respondent") in contempt of various orders, in accepting Mr. Nowack's unsworn submissions at the contempt motion as evidence, in ordering that Mr. Nowack complete a particular form of judgment debtor questionnaire in use in Alberta (the "Judgment Debtor Questionnaire"), and in discharging Mr. Nowack from any obligations under various orders made in the course of these proceedings, namely the orders of Master Glustein (the "Prior Orders").


  1. Did the motion judge err in concluding that no branch of the three-part test for civil contempt was met?
  2. Did the motion judge err in relying on Mr. Nowack's submissions as evidence?
  3. Did the motion judge err in ordering Mr. Nowack to complete the Alberta Judgment Debtor Questionnaire?
  4. Did the motion judge err in discharging Mr. Nowack's obligations under the Prior Orders, with the result that they are deprived of the benefit of such orders, including the ability to enforce costs awards properly made in their favour?


Appeal allowed.


1. Yes. The test for civil contempt was articulated by the Supreme Court in Carey v. Laiken: (i) the order alleged to have been breached must state clearly and unequivocally what should and should not be done; (ii) the party alleged to have breached the order must have had actual knowledge of it; and (iii) the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act the order compels. Each element of civil contempt must be proven beyond a reasonable doubt. A judge has discretion to decline to make a contempt finding where the three-part test has been met where it would be unjust to do so, such as where the alleged contemnor has acted in good faith to take reasonable steps to comply with the relevant court order.

In this case, the Court of Appeal found it difficult to understand the motion judge's conclusion that the contempt motion failed all three prongs of the test for contempt. The motion judge did not explain his conclusion, other than that he was unwilling to find contempt in the context of the enforcement of a civil judgment. The conclusion may also have stemmed from the motion judge's finding that Mr. Nowack's performance was not "contumelious". In any event, a motion judge "must at a minimum turn his or her mind to the test and apply the elements of the test properly." The motion judge failed to do so here.

2. Yes. The contempt hearing was conducted in a summary manner. The motion judge did not invite oral testimony. Mr. Nowack, who was self-represented, had filed no evidence. He did, however, make submissions as to why he failed to provide an accounting.

While the motion judge may well have been entitled to consider Mr. Nowack's submissions as evidence, relying on the fact that he had previously been sworn as a witness, he ought to have informed the Greenbergs' counsel that this was what he was doing, and afforded him the opportunity to cross examine Mr. Nowack. The Court of Appeal accepts that the Greenbergs were taken by surprise by the motion judge's apparent acceptance of Mr. Nowack's brief explanation in his oral submissions as to why he had failed to comply with the outstanding orders. In these circumstances, to the extent that the motion judge relied on Mr. Nowack's explanation to conclude that the Greenbergs had not met the test for contempt, he erred in doing so.

3. Yes. The Court of Appeal agrees with the Greenbergs' submission that the Judgment Debtor

Questionnaire provides for a narrower range of financial disclosure than would be available to them in an examination in aid of execution. Rule 60.18 allows a creditor to examine a debtor, among other things, about the reason for nonpayment, the disposal of a debtor's property before or after the making of the order, or any other matter pertinent to the enforcement of a judgment. The "transfer of property" section of the Judgment Debtor Questionnaire only requires the disclosure of property transferred within one year of the date of completion of the Questionnaire. Completion of the Judgment Debtor Questionnaire in 2016 therefore does not address what became of the Greenbergs' investment monies for which judgment was granted in 2013, and in respect of which the various orders in the enforcement process were made. The motion judge was firmly focused on the need to get the judgment debtor enforcement process back on track. To this end, it was not wrong for him to order Mr. Nowack to complete the Judgment Debtor Questionnaire.

4. Yes. An order may only be set aside, amended or varied by a successful appeal or by a motion to set aside or vary under r. 37.14 or r. 59.06. It is not open to the court to set aside or vary an order on its own motion where this relief was not requested. Further, while a judge may discharge, set aside or vary an order where a finding of contempt has been made under r. 60.11(8), this rule does not authorize a judge to discharge any order on the court's own motion – in contempt proceedings or otherwise. In the present case, the motion judge did not discharge or set aside the Prior Orders. Rather, he discharged Mr. Nowack's obligations under the orders. Such an order might well be warranted, where a judge concludes that an alleged contemnor has in fact complied with the requirements of an order or otherwise purged his contempt. In this case, however, the contempt motion was dismissed because the motion judge held that the Greenbergs had not met the three-part test. He did not find that Mr. Nowack had complied with the Prior Orders; at best, Mr. Nowack offered an excuse for not complying with certain requirements of the orders. Accordingly, the motion judge erred in discharging Mr. Nowack from compliance with the Prior Orders. There was no basis for granting such relief simply because the motion judge concluded that the Greenbergs had not met the three-part test for contempt, or as part of the dismissal of their contempt motion. The relief, which no one had requested, was prejudicial to the Greenbergs and took away their rights under the existing orders without good reason.

In the result, the order dismissing the contempt motion was set aside and the motion was remitted back to the Superior Court for determination by another judge.

Eureka Farms Inc. v. Luten, 2016 ONCA 969

[Sharpe, Lauwers and Miller JJ.A.]

G. Oldfield, for the appellants
D. Medcalf, for the respondents

Keywords: Endorsement, Contracts, Duty of Good Faith, Bhasin v. Hrynew, Entire Agreement Clauses, Torts, Negligent Misrepresentation


The appeal arose from an agreement of purchase and sale of a swine farm. The appellant purchasers submitted that the trial judge erred by dismissing their claim for damages for the loss they suffered when they were forced to sell the farm at a loss when they could not secure a supply of pigs.


(1) Did the trial judge err regarding the duty of good faith?

(2) Did the trial judge err regarding negligent misrepresentation?

(3) Did the trial judge err regarding the contractual obligation to have pigs on the farm on closing?


Appeal dismissed.


(1) No. At the time the agreement was made, both parties expected that there would be pigs in the barn at the time of closing. However, the appellants knew that they had no assurance of an on-going supply of pigs. The agreement of purchase and sale contained a condition that gave the appellants the right to extract themselves from the agreement if they were unable to satisfy themselves as to the supply of pigs. The appellants waived that condition prior to closing. Thus, the Court held they assumed the risk that market conditions could change and that the supply of pigs could dry up.

Even if the respondent should have told the appellants in a more timely fashion that the barn would have no pigs at the time of closing, it did not amount to a breach of the duty of good faith, per Bhasin v. Hrynew, 2014 SCC 71, sufficient to trigger a remedy for the appellants given the terms of the contract.

(2) No. The appellants submitted that the respondent made a negligent misrepresentation when he failed to disclose that under the arrangement with the third party supplier in place at the time the agreement of purchase and sale was entered into, the respondent was financing the supply of pigs by purchasing them when they came to the barn and reselling them to the third party supplier when they left.

The Court held that any failure on its part to disclose the details of its arrangements with the supplier did not assist the appellants. First, the agreement of purchase and sale contained an entire agreement clause. Second, the appellants met with the supplier and discussed with him the details of the arrangement the supplier was prepared to offer. The appellants decided to proceed with the transaction and the terms of the respondent's arrangements with the supplier were irrelevant.

(3) No. The Court rejected the argument that the agreement of purchase and sale required the respondent to have pigs in the barn at the time of closing. There was no provision to that effect in the agreement. That the trial judge made a finding that the provisions providing for an adjustment on closing and management guidance for a four week period following closing could not be interpreted as creating a contractual obligation to ensure that there were pigs in the barn at the time of closing. Those findings were entirely consistent with the overall effect of the agreement and entitled to deference.

Carson v. Kearney (Town), 2016 ONCA 975

[Doherty, Gillese and Huscroft JJ.A.]

M. J. Ewart, for the appellant
D.A. Morin, for the respondents

Keywords: Endorsement, Torts, Negligence, Negligent Misrepresentation, Municipal Liability, Damages, Duty to Mitigate


In June 2010, the respondents purchased a residence, intending to convert it into an outdoor adventure store with some overnight accommodation and an apartment on the second floor. The respondents needed a building permit to perform the renovations and a permit rezoning the property so that it could be used for commercial purposes. Their interactions with the various officials employed by the appellant began in the summer of 2010. The issues relating to the permits were finally resolved almost five years later.

The respondents sued, alleging negligence and negligent misrepresentation. The respondents alleged that the conduct of the appellant led to delays in obtaining the necessary permits and that those delays resulted in substantial business losses for them.

The trial judge held that the appellant was liable in negligence and he assessed damages as follows: $266,247 for business losses, $6,306 for special damages and $20,000 in general damages. The trial judge awarded costs in the amount of $235,418.99.


  1. Did the trial judge err in concluding that the appellant acted negligently in his dealing with the respondents?
  2. Did the respondents fail to mitigate their damages and as a result should not have been compensated for 2015 business losses?
  3. Was the quantum of damages so excessive as to require the intervention of the Court of Appeal?


Appeal dismissed. Motion for leave to appeal costs dismissed.


  1. The trial judge's findings amply support his ultimate conclusion that the appellant acted negligently in its dealings with the respondents. The trial judge was satisfied that the appellant owed a duty of care to the respondents in respect of the applications for the necessary permits. The appellant does not challenge that holding on appeal. The trial judge recognized that many of the duties imposed on the Chief Building Officer ("CBO"), Henry Hess, involved the exercise of discretion. The question to be answered on the negligence claim was not, did the CBO have the authority to act as he did, but rather, assuming he had the authority, did he exercise that authority reasonably in all of the circumstances? The trial judge found that the appellant acted unreasonably. He based that finding, not on a single isolated act, but on a course of conduct that began on June 1, 2012 and continued until early 2015. The Court of Appeal did not interfere with these findings.
  2. First of all, the respondents could do nothing to mitigate their business losses until early 2015 because the appellant had told Mr. Horsman, who was Henry Hess' successor, that he should not cooperate with the respondents in their efforts to obtain the necessary permits. The duty to mitigate required that the respondents take reasonable steps to mitigate their damages. The duty to mitigate, however, does not require the injured party to spend money that it does not have, especially when it is the conduct of the tortfeasor that has left the injured party without funds. The Court of Appeal did not interfere with the damages award.
  3. The Court of Appeal, for sound policy reasons, grants leave to appeal costs sparingly. Once one accepts, as the Court of Appeal did, that costs on a substantial indemnity basis were properly awarded, there was no reason to interfere with the quantum awarded. The Court refused to grant leave to appeal from the costs order.

Balmoral Custom Homes Ltd. v. Biggar, 2016 ONCA 967

[Cronk, Juriansz and Roberts JJ.A.]

M.J. Huberman, for the appellant
N.H. Roth, for the respondent

Keywords: Endorsement, Contracts, Construction, References


The appellant appeals from the motion judge's confirmation of the master's report allowing the respondent's action and dismissing the appellant's counterclaim. The respondent was retained by the appellant to a fixed price contract to carry out renovations and an addition to her home. The relationship broke down and the respondent brought an action claim that the amount of $108,554.34 was owing under their contract. As the project grew, the parties agreed on fixed prices for each of the extra items of work to be performed.

Following a hearing for directions and a trial by way of a reference, the master found that the respondent was entitled to payment of the reduced amount of $94,031.36, for its services and materials rendered to the appellant, and dismissed the appellant's counterclaim.

The appellant submitted that the motion judge erred in confirming the master's report.


  1. Did the motion judge err in finding that the master had cogent reasons for her decision?
  2. Did the motion judge err in finding that the entire agreement clause in the parties' contract disposed of any claim regarding the respondent's alleged post-contractual misrepresentations and breach of its overriding duty of honesty?


Appeal dismissed.


  1. No. The master's careful and thorough reasons disposed of all the parties' allegations of contractual breaches. The master specifically preferred the respondent's evidence over the appellant's evidence, and found that the appellant had agreed to the charges for the extra work to be completed. The appellant's post-contractual misrepresentation claim and allegation of breaches dissolved in the face of the master's findings on the items said to be relevant to those claims.
  1. No. With respect to the contractual interpretation issues, the Court agreed with the appellant that the particular wording of the contract did not exclude a claim based on any post-contractual misrepresentations, nor did it exclude the parties' duty of honesty not to lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract; this duty operates as a general doctrine of contract law. However, the master's findings on these issues disposed of the factual underpinnings of the appellant's claim for set-off and counterclaim.

Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULC, 2016 ONCA 977

[Doherty, MacPherson and Lauwers JJ.A.]

M. J. Latella and S. P. Peterson, for the appellants
A. Seretis, for the respondent

Keywords: Franchise Law, Arthur Wishart Act (Franchise Disclosure) 2000, S.O. 2000, c. 3., Civil Procedure, Jurisdiction Simpliciter, Forum Non Conveniens, Van Breda v. Villages Resort Ltd., 2012 SCC 17


The respondents are eight Saab car dealerships in five provinces. Three of the dealerships carry on business in Ontario. The respondents brought an action in Ontario seeking a declaration that they validly rescinded their Saab Sales and Service Agreements pursuant to Ontario's Arthur Wishart Act (Franchise Disclosure) 2000, S.O. 2000, c. 3. They also sought damages pursuant to s. 7(1) of the Act or for breach of contract. The defendants are companies and individuals associated with the revival of the Saab automobile brand and dealer network in North America. IFS Vehicle Distributors ULC was incorporated in British Columbia and carried on business as the franchisor and supplier of the Saab dealership network. International Fleet Sales Inc. was incorporated in California, and carried on the business of supplying parts and accessories to IFS Vehicle Distributors ULC. IFS Vehicle Distributors ULC and International Fleet Sales Inc. are affiliated companies. Michael Libasci was the President and sole director of IFS Vehicle Distributors ULC and the President and CEO of International Fleet Sales Inc., and resided in California. Peggy King, now retired, was the Secretary and Treasurer of IFS Vehicle Distributors ULC and the Chief Financial Officer of International Fleet Sales Inc., and resided in California.

The appellants brought a motion challenging the Ontario court's jurisdiction to hear the action in respect of the five out of the eight respondent dealerships that are located and do business outside Ontario. They also submit that Ontario should decline to hear the case on the basis of forum non conveniens. The appellants submit that either of California or Michigan would be a more appropriate forum. The motion judge dismissed the motion.


  1. Did the motion judge err in his application of the law germane to jurisdiction simpliciter?
  2. Did the motion judge err in his forum non conveniens analysis?
  3. Did the motion judge err by relying on a case that neither party cited?
  4. Did the motion judge err in his decision relating to costs of an earlier motion before Corbett J?


Appeal dismissed.


1. No. The law on jurisdiction simpliciter of the Ontario Superior Court was set out by the Supreme Court of Canada in Van Breda v. Villages Resort Ltd. At para. 90 of Van Breda, LeBel J. established four presumptive connecting factors ("PCFs"), any one of which would, if present, entitle a provincial superior court to take jurisdiction over a legal dispute in tort law: (1) the defendant is domiciled or resident in the province; (2) the defendant carries on business in the province; (3) the tort was committed in the province; or (4) a contract connected with the dispute was made in the province.

There is no doubt that the action was properly brought by the three Ontario plaintiffs in Ontario. The contracts between the Ontario plaintiffs and IFS Vehicle Distributors ULC were negotiated and signed in Ontario. The appellants argue that the out-of-province plaintiffs cannot be part of this action, and cannot sue an out-of-province defendant in Ontario. They are therefore not properly joined in this action. The appellants advise that if the individual out-of-province plaintiffs were to bring similar actions in their home provinces, the appellants will not contest the jurisdiction of the respective provincial superior courts. This would require four actions in addition to this action in Ontario.

The motion judge focussed his analysis on the second PCF under Van Breda: "the defendant carries on business in the province". He found that IFS Vehicles Distributors ULC carried on business in Ontario. Each case invoking the fourth PCF of carrying on business in Ontario must be considered on its unique facts. While a more substantial presence, along the lines discussed in the cases, would have added weight to the motion judge's determination, the Court of Appeal does not accept the appellants' submission that the factors taken into account by the trial judge in finding jurisdiction simpliciter were insufficient.

Once the action is properly constituted from the perspective of jurisdiction simpliciter, then the issue of efficiency in the litigation becomes relevant with respect to the joinder of other parties. The Court of Appeal states that taking litigation efficiency into account does not convert it into another PCF, contrary to the appellants' submission.

2. No. The motion judge provided detailed reasons for concluding that the appellants failed to discharge the onus of establishing that there is a better and more appropriate forum than Ontario.

The appellants did not devote any time in oral argument to this issue and addressed it only briefly in their factum. They complain that the respondents impeded cross-examination on this issue but brought no motion for relief before the motion was argued. This is a discretionary decision that took into account the relevant factors; accordingly, the Court of Appeal found no basis on which to interfere with it.

3. No. The appellants contend that it was an error in principle for the motion judge to rely on a case that neither party cited. They criticize the motion judge for referring to Cannon v. Funds for Canada Foundation, 2010 ONSC 4517, aff'd 2011 ONCA 185 as the basis for distinguishing Lailey v. International Student Volunteers Inc., 2008 BCSC 1344, a decision on which the appellants relied.

The motion judge distinguished Lailey based on comments by Strathy J. (as he then was) in Cannon Funds, at paras. 80-91. Strathy J. noted, at para. 90, that Tridon had been effectively overruled on the basis that order and fairness are not accomplished "by turning away jurisdiction where a fraction of the relief claimed may fall outside rule 17.02 and where in other respects there is a 'real and substantial connection' between the parties in the subject matter of the action in Ontario"; Strathy J. quoted Hockin J. in Overland Custom Couch Inc. v. Thor Industries Inc. (1999), 46 O.R. (3d) 788, at para. 19.

The Court of Appeal found nothing improper in the motion judge's use of Cannon Funds to consider the application of Lailey. It was not a new case that arose after the argument on which the motion judge might have required further submissions. On the issue in question Cannon Funds is usefully analogous.

4. No. The motion judge ordered the defendants to pay the plaintiffs about $50,000 in costs, inclusive of fees, disbursements and HST. The appellants did not formally seek leave to appeal this costs award but challenge it nonetheless. The appellants have not identified any error in principle in what is clearly a discretionary decision. Accordingly, if leave to appeal costs were sought, it would have been refused.

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John Polyzogopoulos
Events from this Firm
6 Feb 2019, Other, Toronto, Canada

When it comes to class actions, costs regimes vary across Canada. Ontario follows the traditional two-way costs regime while other jurisdictions like British Columbia have adopted a no cost regime.

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