1. PP v. DD, 2017 ONCA 180 (Rouleau, Hourigan and Huscroft JJ.A.), March 2, 2017
PP and DD were set up by a mutual friend in the spring of 2014. They dated for several weeks, during which time PP understood that DD was using birth control and did not intend to conceive a child. After they broke up, PP was surprised – and unhappy – to learn that DD was pregnant. DD gave birth to a healthy baby. PP brought an action against DD for fraud, deceit and fraudulent misrepresentation, claiming that her deception and pregnancy deprived him of the choice of when and with whom he would have a child. In this appeal from a decision granting DD's motion to strike PP's Statement of Claim without leave to amend, the Court of Appeal weighed in on the matter of "involuntary parenthood".
When DD informed PP that she was pregnant with his child shortly after their brief relationship had ended, PP was shocked and angry. He felt that he had been robbed of the future he had envisioned: he wanted to become a father with the woman of his choosing, when they decided as a married couple that it was the "right" time, not, in his words, with "some random girl" he had dated. He suggested that DD have an abortion.
DD gave birth to a healthy child in March 2015.
A few months later, PP commenced an action for damages against DD. His Statement of Claim asserted that he engaged in a sexual relationship with DD on the basis of her knowingly false representations with respect to her use of birth control and her implied intention not to conceive or deliver a child. He alleged that his consent was vitiated, having been induced by DD's misrepresentations that led him to believe that she was taking effective birth control. PP claimed he had suffered damages, having been deprived of the choice of when, and with whom he would raise a family. He also sought punitive damages.
In September 2015, DD brought a motion to have PP's claim struck without leave to amend. Her motion was granted.
The Court of Appeal affirmed the decision of the motion judge, holding that PP failed to make out a viable claim.
Writing for the court, Rouleau J.A. emphasized that such a claim cannot succeed in the absence of recoverable damages. It is not sufficient to simply allege that damages were suffered; there must be a basis for the claim that a loss has been suffered for which the law allows recovery of damages.
Rouleau J.A. distinguished the damages allegedly suffered by PP from those suffered by parents who bring lawsuits against health care providers whose negligence resulted in the unwanted birth of a child. In those cases, recovery has generally been allowed for the damages suffered as a result of the pregnancy and birth of the child, not for the cost associated with the mere fact of having become a parent. PP's damages did not relate to a physical or recognized mental illness, but rather to his "broken dreams", the possible disruption to his lifestyle and career, and a potential reduction in future earnings. These damages are not and, as a matter of legal policy, ought not to be recoverable by way of a fraudulent misrepresentation action.
In Rouleau J.A.'s view, damages for the emotional and economic costs associated with raising a healthy but unplanned child are "fundamentally incalculable" and not revocable in tort. He turned to the decision of the House of Lords in Rees v. Darlington Memorial Hospital NHS Trust,  UKHL 52, in which Lord Millett stated that while the birth of a healthy baby might be a mixed blessing, and individuals are entitled to regard it as unfavourable, society itself must view the balance as beneficial. To do otherwise would be "repugnant to its own sense of values". Justice Rouleau further held that to award damages to PP for the birth of his healthy child would be contrary to the spirit and purpose of Ontario's statutory family law regime, which provides remedies to ensure support for the child flowing from the simple fact of being a parent, without accounting for blame in the manner in which the child was conceived.
Rouleau J.A. also rejected the submission that fraudulent misrepresentation as to the use of contraceptives vitiated the appellant's consent for the purpose of advancing a claim of sexual battery. As the Supreme Court explained in R. v. Hutchinson, 2014 SCC 19, for consent to be vitiated by fraud there must be dishonesty – which can include the non-disclosure of important facts – and a deprivation or risk of deprivation in the form of serious bodily harm that results from the dishonesty. The Supreme Court cautioned, however, that "deprivation" does not apply to financial deprivation, sadness or stress. Rouleau J.A. noted that the appellant's alleged damage was the emotional harm caused by his hurt feelings and lost aspirations, and distinguished that harm from the "profound physical and psychological effects on a mother undergoing a pregnancy". PP was not exposed to any serious transmissible disease or other significant risk of serious bodily harm. There was therefore no violation of his right to physical or sexual autonomy that would give rise to a claim in battery.
The appeal was dismissed.
2. Moore v. Sweet, 2017 ONCA 182 (Strathy C.J.O., Blair and Lauwers JJ.A.), March 2, 2017
This appeal arose from a battle over the proceeds of the life insurance policy of Lawrence Moore, between his wife of 20 years and his subsequent common law partner.
The respondent, Michelle Moore, married Lawrence Moore in 1979. In October 1985, Lawrence applied for and obtained a policy of insurance on his life in the principal amount of $250,000 from a predecessor of RBC Life Insurance Company. He was named as the owner of the policy and the respondent a beneficiary, but not an irrevocable beneficiary. Annual premiums of $507.50 were paid from the Moores' joint account. After the couple separated in December 1999, the premiums were paid by the respondent alone. The policy remained in effect until Lawrence's death on June 20, 2013.
Following the Moores' separation, Lawrence began a relationship with the appellant, Risa Sweet, with whom he lived until his death. Shortly after Lawrence and the appellant began living together – and contrary to an oral agreement he had with the respondent – Lawrence revoked the designation of the respondent as beneficiary and executed a change in beneficiary form designating the appellant as the irrevocable beneficiary under the policy. The change of beneficiary was properly recorded with the insurer.
After Lawrence died, a dispute arose as to which woman was entitled to the proceeds of the policy.
The application judge ruled in the respondent's favour, holding that the policy proceeds of $250,000 plus interest were held in trust and that the respondent was entitled to recover them on the basis of unjust enrichment.
The Court of Appeal disagreed.
Writing for a majority of the court, R.A. Blair J.A. held that the application judge erred in relying on the doctrine of equitable assignment which was not pleaded or argued before him, and in finding that the oral agreement constituted an equitable assignment of Lawrence's interest in the policy proceeds. He noted that an assignment involves a transfer of a proprietary right, including a right of action. While there is no particular form required for an equitable assignment, it is essential that there be sufficiently clear evidence to establish the intention of the assignor to make such an assignment. In Justice Blair's view, the application judge failed to direct his mind to the question of Lawrence's intention, leaping directly from the fact that there was an oral agreement that if the respondent continued the payments she would continue as a beneficiary to the conclusion that Lawrence intended to make an absolute assignment of the property in the policy or its proceeds. In his view, there was little, if any, other evidence to support this conclusion.
R.A. Blair J.A. held that the application judge also erred in failing to hold that there was a valid juristic reason for the appellant's receipt of the policy proceeds and in holding that the proceeds were impressed with a trust in the respondent's favour based on unjust enrichment. Absent equitable assignment or another exceptional circumstance, the provisions of the Insurance Act, R.S.O. 1990, c. I.8., pursuant to which the appellant was designated the irrevocable beneficiary, provided a valid juristic reason for her receipt of the insurance proceeds. Therefore, a finding of unjust enrichment was not available.
Justice Blair further held that there was no other "good conscience" basis for the creation of a remedial constructive trust in the respondent's favour, declining to resolve the debate about whether Soulos v. Korkontzilas,  2 S.C.R. 217 has restricted the categories for imposing a remedial constructive trust to unjust enrichment and wrongful acts or whether there remains some additional "good conscience" basis. R.A. Blair J.A. emphasized that a "good conscience" basis does not exist on the facts simply because a wrongful act is not asserted and unjust enrichment is not successful.
In a lengthy dissent Lauwers J.A. rejected the appellant's argument that Soulos limits the remedy to the two defined situations of unjust enrichment and wrongful acts and otherwise abolished the doctrine of good conscience constructive trusts as a general source of equitable jurisdiction. In his view, the Supreme Court left open four routes by which a court could impose a constructive trust: (i) unjust enrichment, (ii) wrongful acts or wrongful gain, (iii) circumstances where constructive trusts have been recognized in the past or other situations where courts have found a constructive trust, and (iv) where good conscience requires it. Justice Lauwers held that the application judge did not err in finding that the respondent had made out her claim in unjust enrichment. Specifically, he did not err in finding that the respondent's deprivation consisted of the loss of the life insurance proceeds or in finding that Lawrence's irrevocable designation in the appellant's favour, given his prior oral agreement with the respondent, did not provide a juristic reason to oust the availability of a constructive trust over the life insurance proceeds.
The appeal was allowed.
3. Hunks v. Hunks, 2017 ONCA 247 (Gillese, MacFarland and Pepall JJ.A.), March 27, 2017
In this decision, the Court of Appeal considered whether the proceeds of a personal injury settlement used to create a structured settlement for the injured party ought to be treated as property or income under the Family Law Act, R.S.O. 1990, c. F.3.
Donna and Gary Hunks were married on December 22, 1995. Less than a year later, Donna was shopping in a supermarket when she was hit by a palette or loaded grocery cart. She suffered significant injuries and, as a result, lost her job as an office assistant.
Donna sued the supermarket. The action included a claim by Gary under the Family Law Act for damages for loss of care, guidance and companionship. The action was settled for over $500,000.
The Minutes of Settlement provided that the Hunks were at liberty to use some or all of the settlement monies to purchase a structured settlement, in which event the defendant supermarket would pay the assignment fee.
More than $300,000 of the settlement monies were used to create a structured settlement (the "SS Annuity") for Donna.
The non-commutable, non-assignable and non-transferrable annuity provided for monthly payments of $1287.15, increasing by 2% per annum, for the duration of Donna's life or a minimum guarantee period of 25 years, with her estate as secondary beneficiary. It also guaranteed four equal lump sum payments of $15,000, to be paid to Donna once every five years from 2009 to 2024.
Donna began receiving the irrevocable SS Annuity payments on December 15, 1999.
On October 1, 2011, the parties separated. At the separation date, there were about 13 years of guaranteed monthly payments and three lump sum payments yet to be made from the annuity.
Family law proceedings following the parties' separation raised the issue of whether the SS Annuity payments were to be treated as income or property under the Family Law Act. If the former, the payments were to be taken into consideration when determining spousal support; if the latter, their treatment for net family property purposes depended on whether they were excluded property under s. 4(2)3 of the statute.
The trial judge found that the annuity was property and not excluded under s. 4(2)3) of the Family Law Act. Accordingly, it was not to be treated as income for the purposes of spousal support.
The Court of Appeal disagreed.
Writing for the court, Gillese J.A. emphasized that the SS Annuity arose from a structured settlement, which is created when some or all of a personal injury settlement is deposited with a life insurance company in exchange for guaranteed tax-free payments for a specific number of years. Donna never received the part of the settlement monies that was used to buy the annuity. Rather, the insurer purchased the SS Annuity and made an irrevocable direction to the issuer to make payments directly to Donna. While Donna received payments from the annuity, she did not own it, nor did she have constructive receipt of the funds used to create it. In light of the fact that the SS Annuity arose from the structured settlement, and the process by which a structured settlement is created, it was clear that Donna did not receive the entirety of the settlement during the parties' marriage. She did receive a lump sum payment from the settlement of almost $200,000, and she used those funds for the benefit of the family, including Gary. She did not receive the balance of the funds, however. Those monies were used to create the structured settlement which entitled her to receive SS Annuity payments.
Gillese J.A. disagreed with the trial judge that the annuity was analogous to a pension. In Gillese J.A.'s view, payments received from the SS Annuity were more analogous to disability benefits, replacing – in whole or in part – employment income that the injured party would have earned had she been able to work. The annuity payments provided Donna with financial support because she was unable to work. Accordingly, they were of the same nature as income that she would have earned had she not been injured. Like disability benefits, the annuity payments were more akin to a future income source than to a retirement pension. Justice Gillese again emphasized that a structured settlement annuity cannot be purchased with savings; it can only arise from a settlement of a damages claim based on personal injury or death. The SS Annuity was not a form of savings, but was designed to provide income in lieu of that which the injured party would have earned if not for her injury.
Accordingly, the court held that the SS Annuity payments post-separation were to be treated as income and not property under the Family Law Act.
The appeal was allowed.
4. Lloyd v. Bush, 2017 ONCA 252 (Rouleau, van Rensburg and Miller JJ.A.), March 28, 2017
The County of Lennox and Addington and The Corporation of the Town of Greater Napanee appealed from a judgment finding them liable for damages arising from a motor vehicle accident. The appeal turned on the interpretation and application of the municipalities' duty to clear their roads of ice and snow.
On the morning of January 3, 2003, Leslie Lloyd left her in-laws' rural home on County Road #9, also known as River Road. She intended to drive to Napanee, about four kilometres east along CR9, to pick up her sister-in-law, who had fallen ill. Leslie was an experienced driver and familiar with the road. Less than 30 seconds into her journey, she entered an "S-curve" portion of the road known locally as "Rankins Corners", only 400 metres east of her in-laws' home. Entering Rankins Corners from the other direction was a commercial tank truck loaded with 20,000 pounds of propane driven by David Bush. Leslie's vehicle collided with the truck in the eastern half of the S-curve.
Leslie was severely injured and was left with permanent disabilities affecting her mobility, speech, dexterity, cognition and overall functioning. She had no recollection of the accident. The only eyewitness with any memory of the collision was Bush, who described the conditions as he drove toward Rankins Corners as consisting of "heavy snowfall with the road slippery and snow-covered at a depth of one to two inches". Bush testified that CR9 had not been plowed, sanded or salted. This was consistent with the general consensus among those who attended at the accident scene.
This appeal arose from the second trial of this matter. During the course of the first trial, the Lloyds settled with the motor vehicle defendants and at the end of that trial the claim against the municipal defendants was dismissed. On appeal from that trial, the Court of Appeal ordered a new trial on the basis that the first trial judge demonstrated a reasonable apprehension of bias against the plaintiffs.
At the second trial, the trial judge observed that the appellants' liability, if any, was to be determined in accordance with s. 44 of the Municipal Act, 2001, S.O. 2001, c. 25, and that he was to determine whether a condition of "non-repair" existed. This question is a factual one, to be assessed from the standpoint of "a reasonable and prudent driver in the circumstances". If the plaintiffs demonstrated that a condition of non-repair existed, the trial judge was to determine whether the condition of non-repair caused or contributed to the accident and, if so, the onus then shifted to the municipality to show that it undertook reasonable efforts to maintain CR9 that morning.
The trial judge found that Rankins Corners was in a state of non-repair at the time of the accident and that this condition caused or contributed to Leslie's injuries. The trial judge found that Bush was partially liable for the accident, and concluded that liability should be apportioned at 60 percent for the municipal defendants, 30 percent for Bush and the propane company, and 10 percent for Leslie. He assessed damages inclusive of general damages, damages under the Family Law Act, R.S.O. 1990, c. F.3, loss of income, future care needs and future costs of attendant care in a total amount in excess of four million dollars, which he then reduced in accordance with his apportionment of liability. He awarded the respondents the costs of the trial, as well as costs of the first trial, in the amount of $750,000 inclusive of HST plus disbursements of $167,937.
The municipalities appealed on several grounds. They argued that the trial judge (i) erred in his analysis and application of the test for determining a municipal road authority's liability pursuant to s. 44 of the Municipal Act, 2001, (ii) erred in his determination of contributory negligence, (iii) exhibited bias against them, (iv) erred in his assessment of the attendant care damages, and (v) erred in his assessment of the trial costs.
Section 44 of the Municipal Act, 2001 sets out the duty of a municipality with respect to road maintenance:
The municipality that has jurisdiction over a highway or bridge shall keep it in a state of repair that is reasonable in the circumstances, including the character and location of the highway or bridge.
A municipality that defaults in complying with this provision is liable for all damages any person sustains because of the default. Section 44 goes on to provide that a municipality is not liable for failing to keep a highway or bridge in a reasonable state of repair if it did not know and could not reasonably have been expected to have known about the state of repair of the highway or bridge, if it took reasonable steps to prevent the default from arising, or, if at the time the cause of action arose, certain minimum standards that applied to the highway or bridge and to the alleged default were met.
The Court of Appeal has established a four-step test to be applied when a claim is made against a municipality for non-repair. As Laskin J.A. explained in Fordham v. Dutton Dunwich, (Municipality), 2014 ONCA 891, the plaintiff must prove the existence of a condition of non-repair, meaning a road-based hazard that poses an unreasonable risk of harm to ordinary, non-negligent users of the road, with a view to the circumstances including the "character and location" of the road. Next, the plaintiff must prove that the condition of non-repair caused the loss in question. If the plaintiff has satisfied the first two steps of the test, a prima facie case is made out against the municipality, and it then bears the onus of proving that one of the three independently sufficient defences in s. 44(3) applies. If the municipality fails to establish any of these defences, it will be found liable. It can, however, demonstrate that the plaintiff's driving caused or contributed to his or her injuries.
Writing for the Court of Appeal, Rouleau J.A. found that the trial judge erred in his analysis and application of this test.
Rouleau J.A. noted that courts have taken into account the reality of Canadian winters and the cost of clearing the roads of snow, emphasizing that "a municipality is not to be treated as an insurer of the safety of the users of its roads by imposing overly onerous maintenance obligations". Proof of a state of non-repair is not sufficient to establish liability: a municipality will only be liable for failing to clear the road of snow and salt/sand it where it had actual or constructive knowledge that road conditions created an unreasonable risk of harm to users of the highway, and where the municipality unreasonably neglected that risk.
In Justice Rouleau's view, the trial judge erred both in his finding as to the state of non-repair of CR9 and with respect to the appellants' prevention or correction of those conditions. While he found that there was some support for the trial judge's conclusion as to the existence of a state of non-repair, Rouleau J.A. noted that it was based on a faulty assessment of the nature and character of the particular road at issue and of whether it presented an unreasonable risk of harm to a reasonable driver in the circumstances.
Even assuming that the trial judge did correctly determine that Rankins Corners was in a state of non-repair, however, Rouleau J.A. took issue with his conclusion that the appellants did not take reasonable steps to prevent or correct it; noting that he failed to consider all of the relevant circumstances, such as the condition of the road, financial considerations and the fact that snow was still falling at the time of the accident. Rouleau J.A. found that the trial judge focused on what the appellants ought to have done in order to prevent or correct the state of non-repair before the accident occurred, rather than on the reasonableness of the response to the state of non-repair in the circumstances. The fact that the road was not bare of snow when the collision occurred is not determinative of whether the actions taken were reasonable.
In Rouleau J.A.'s view, these errors necessitated a further new trial on the issue of liability.
Turning to the appellants' other grounds of appeal, Rouleau J.A. rejected their submission that there was a reasonable apprehension of bias. While he observed that the trial judge's interventions were at times "unduly aggressive" and his choice of words "unnecessarily harsh", he concluded that they did not displace the presumption of impartiality.
Justice Rouleau also considered and rejected the appellants' assertion that the trial judge erred in his two million dollar assessment of future attendant care costs, specifically in factoring in contingencies such as the potential breakup of the Lloyds' marriage or Jason's future inability to care for Leslie. In Rouleau J.A.'s view, this decision was not unreasonable and was entitled to deference.
The appeal was allowed in part, with a new trial ordered on the issue of the appellants' liability and corollary issues such as causation and contributory negligence.
5. Harvey v. Talon International Inc., 2017 ONCA 267 (Blair, Epstein and Huscroft JJ.A.), March 31, 2017
The Condominium Act, 1998, S.O. 1998, c. 19 gives a purchaser the right to rescind his or her agreement of purchase and sale. The statute provides that within 10 days of receipt of a revised disclosure statement which contains a material change or notice of a change that is material, a purchaser has the right to rescind the APS. If it takes the position that no material change has occurred, the declarant may bring an application for a declaration on the issue of materiality. If no such application is made, however, the legislation requires that the declarant refund the purchaser's money with interest within 10 days of receipt of the notice of rescission. This appeal – which arose from purchasers' attempted rescission of their agreements to purchase units in Trump Tower – turned on the interpretation of these provisions.
The respondents, Harvey and Yim, both entered into agreements to purchase condominium units in the appellant Talon International Inc.'s development known as Trump Tower. Several years after entering into their respective agreements, the respondents notified Talon of their intention to terminate the transaction. Both Harvey and Yim stated that their reason for doing so was in part what they viewed as material changes to the revised disclosure statement which Talon had provided to them.
Talon did not respond in either case.
Both Harvey and Yim applied to the court for an order that Talon return their deposits. Their applications were heard together.
Talon took the position that the respondents' purported notices to rescind did not meet the requirements of the Condominium Act, 1998. In the case of the respondent Yim, Talon also argued that she was seeking to amend her notice of application to claim statutory rescission more than two years after the date on which the claim was discovered, and that her amendment was therefore statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24, Schedule B.
The application judge allowed both applications. She held that the notices sufficiently complied with the requirements of the statute and that each notice therefore triggered Talon's obligation to challenge the alleged material change set out within 10 days of receipt, or to accept the claim for rescission. Because Talon did not challenge the respondents' claims for rescission, the application judge ordered that it refund the respondents' deposits, with interest. She further held that the 10 year limitation period in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (RPLA), governs claims for the refund of deposits advanced toward the purchase of condominium units, and accordingly concluded that Yim's claim was not out of time.
Talon's appeal turned on the interpretation of provisions of the Condominium Act, 1998 and the RPLA.
Section 74 of the Condominium Act, 1998 governs the rescission of an APS in the case of a material change. Section 74(7) provides that in order to rescind an agreement of purchase and sale under this section, a purchaser or his or her solicitor shall give "written notice of rescission to the declarant or to the declarant's solicitor". Talon argued before the Court of Appeal that the application judge provided an overbroad interpretation of this provision.
The court rejected this submission.
Epstein J.A. agreed with the application judge that the respondents' communications to Talon constituted notices to rescind for the purposes of the Condominium Act, 1998. She emphasized that the statute is well established as consumer protection legislation, designed to place consumers, who are ordinary citizens engaging in business deals, on par with companies or other citizens who regularly engage in business. The application judge correctly considered the issues through this lens. Consumer protection legislation must be interpreted generously in favour of the consumer; accordingly, it would be contrary to the nature of the legislation to adopt a technical approach in interpreting what a purchaser must do in order to notify the declarant of his or her intention to rescind an APS under s. 74(7).
Justice Epstein agreed with the application judge's interpretation that notice of rescission under this provision does not require the use of the words "rescind" or "rescission", emphasizing that consumers – who might not be familiar with these words and will not necessarily be represented by counsel – must be given "considerable leeway" in their use of language. All that is required is that the purchaser makes clear his or her intent to undo the transaction based on a material change. That is all the declarant needs to understand in order to take advantage of the statutory rights available to it. In Epstein J.A.'s view, there was no reason to interfere with the application judge's conclusion that the notices delivered by the respondents to Talon satisfied this requirement and were sufficient to qualify as "notices of rescission" under the Condominium Act, 1998.
Justice Epstein also agreed with the application judge that the applicable limitation period was 10 ten years. Section 4 of the RPLA requires an action for the recovery of land. An "action" is defined in s. 1 of the RPLA to include "any civil proceeding", while the legal definition of "recovery" is "gaining through a judgment or order". Yim's action was clearly an action to recover. At issue was whether what the respondent sought to recover –her deposit – constituted "land". Epstein J.A. held that the application judge was correct in finding that Yim's application for the return of the deposit was an action for the recovery of "land", specifically the recovery of "money to be laid out in the purchase of land". She found that an action for the return of a deposit "fits comfortably" within the plain meaning of this phrase.
Epstein J.A. distinguished Yim's claim from one seeking damages, noting that if, for example, she had brought a claim for breach of contract, her application would indeed be statute-barred because claims for damages do not fall within the definition of "land" in the RPLA. Yim was not seeking damages, however, but rather advanced a specific claim under a provision in the Condominium Act, 1998 which only allowed for the return of her deposit and interest, not damages. Justice Epstein concluded that Yim's application was not statute-barred. Nor was the amendment of her initial application to specifically claim statutory rescission. Her application was a civil action, seeking the recovery, through a judgment or order, of funds which she deposited with respect to the purchase of land. It therefore fell within s. 4 of the RPLA, and the applicable limitation period was 10 years.
The appeal was dismissed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.