Canada: Top 5 Civil Appeals from the Court of Appeal (June 2017)

Last Updated: July 3 2017
Article by Earl A. Cherniak, Q.C.

In preparation for summer, the Court of Appeal's May decisions addressed a number of interesting points including the application of limitation and notice periods to minors and litigation guardians, the objective component of the informed consent analysis in medical cases, "sending orders" in the context of Canadian assistance to foreign jurisdictions in criminal matters, the required wording for releases to capture unanticipated future claims, and when a commercial property owner becomes an "occupier" of the municipal sidewalk abutting the business.



1. Belgium v. Suthanthiran, 2017 ONCA 343 (Laskin, Gillese and Watt JJ.A.), May 1, 2017

2. MacKay v. Starbucks Corporation, 2017 ONCA 350 (Laskin, Feldman and Hourigan JJ.A.), May 2, 2017

3. Azzeh v. Legendre, 2017 ONCA 385 (Weiler, Benotto and Roberts JJ.A.), May 12, 2017

4. Biancaniello v. DMCT LLP, 2017 ONCA 386 (Feldman, Epstein and Miller JJ.A.), May 15, 2017

5. Bollman v. Soenen, 2017 ONCA 391 (Simmons, Pepall and Huscroft JJ.A.), May 17, 2017


 

1. Belgium v. Suthanthiran, 2017 ONCA 343 (Laskin, Gillese and Watt JJ.A.), May 1, 2017
 
The Court of Appeal granted leave to hear this appeal on a single issue of law: whether the application judge erred by refusing to impose terms and conditions on a sending order obtained under the Mutual Legal Assistance in Criminal Matters Act that would minimize the risk that the applicants' confidential information would be unnecessarily and inappropriately disclosed to third parties. 
 
Best Theratronics is in the business of cancer diagnosis and treatment. It manufactures cyclotrons, machines that produce radioactive isotopes for use in radiation therapy. The individual appellant, Krishnan Suthanthiran, the founder and owner of Best, heads an international group of companies all in the business of providing medical equipment and supplies. The corporate appellants, Best Theratronics Ltd. and Best Medical Belgium Inc., are part of this international group. 
 
Belgian authorities believe that three Best transactions involving a loan and the purchase and sale of two cyclotrons are criminal offences in the Kingdom of Belgium. Belgium sought assistance from Canada under the mutual legal assistance treaty between the two countries and, on Belgium's behalf, counsel for the Attorney General of Canada obtained a search warrant under s. 12 of the Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp.) (MLACMA), which authorized the search of Best's offices in Canada for records relating to what Belgium regarded as the criminal transactions. The premises were searched and records seized.
 
Suthanthiran claimed that the records seized under the search warrant included documents containing a variety of commercially sensitive information, such as material about the design and manufacture of cyclotrons. This information, while of significant value to Best's competitors, was of little value in the potential criminal prosecution. 
 
Belgium brought an application for a sending order under s. 15(1) of the MLACMA. Best wanted the order tailored to ensure that a state-owned competitor could not access the commercially sensitive information included in the seized documents. The application judge granted the sending order but declined to attach any terms or conditions restricting access to the documents to those involved in the criminal prosecution. 
 
The Court of Appeal held that the application judge did not err. 
 
Writing for the court, Watt J.A. noted that parties can craft appropriate terms and conditions to attach to a sending order. The Treaty between the Government of Canada and the Government of the Kingdom of Belgium on Mutual Legal Assistance in Criminal Matters contemplates the imposition of such conditions. Article 10, for example, requires that the Requesting State observe any conditions imposed by the Requested State with respect to seized documents. The MLACMA, which gives effect to the treaty, also contemplates discretion to impose terms and conditions. Section 15(1)(b) of the MLACMA authorizes a sending hearing judge to impose any terms or conditions on the sending order that he or she deems desirable, including those necessary give effect to the request, to preserve and return to Canada any record seized, and to protect the interests of third parties. 
 
Despite having the discretion to impose such terms and conditions, however, Watt J.A. held that the sending hearing judge did not err in declining to impose any in this case.
 
In Watt J.A.'s view, the nature of the mutual legal assistance scheme did not favour the inclusion of the particular terms and conditions sought by the appellants, namely (i) that the items or copies of the items not be disseminated to any private person, party or litigant who was not involved in an official capacity in the criminal proceedings and (ii) that if the Belgian authorities wished to make different use of the seized material, they could re-apply to the Superior Court of Justice for such permission. Watt J.A. emphasized that the treaty clearly states that use and disclosure of the assistance provided, such as information seized under a warrant, is confined to the purpose stated in the request. No other use or disclosure is permissible without the prior consent of the central authority of the Requested State, in this case the Minister of Justice. Moreover, the role of the sending hearing judge under s. 15(1) of the MLACMA is to ensure that the statutory conditions precedent to the making of a sending order have been met. This requires the judge to examine whether the warrant was executed according to its terms and conditions and whether there is any other reason why what has been seized should not be sent. Watt J.A. also noted that the discretion to impose terms and conditions under s. 15(1)(b) of the MLACMA did not extend to imposing terms and conditions that would interfere with the conduct of an investigation or proceedings in the Requesting State.
 
The appeal was dismissed. 
 
2. MacKay v. Starbucks Corporation, 2017 ONCA 350 (Laskin, Feldman and Hourigan JJ.A.), May 2, 2017
 
Carole MacKay fell outside of a Toronto area Starbucks. At trial, the jury determined that the fall occurred on an ice-covered municipal sidewalk at the entrance to a patio at the café's entrance. In a ruling before the case went to the jury to decide, the trial judge held that Starbucks was an "occupier" of that part of the sidewalk and therefore owed MacKay a duty of care. The jury went on to find that Starbucks breached that duty.
 
Starbucks appealed.
 
Feldman J.A., writing for the court, noted that there can be more than one occupier of the same premises for purposes of the Occupiers' Liability Act, R.S.O. 1990, c. O.2. The court previously emphasized in Bongiardina v. York (Regional Municipality) (2000), 49 O.R. (3d) 641 (C.A.) that this includes municipal sidewalks. However, while owners of commercial properties are often subject to municipal by-laws obligating them to clear ice and snow on sidewalks surrounding their properties, that obligation does not, on its own, make them occupiers of the sidewalk within the meaning of the Act. The owner must have taken steps to share sufficient possession or control with the municipality. 
 
Feldman J.A. held that it was open to the trial judge to conclude that Starbucks had the requisite responsibility and exerted the requisite degree of control over the sidewalk entrance to its patio, and over its customers who used that area to access its business premises, to be an occupier within the meaning of the Act. 
 
The court rejected the respondent's submission that, even if the appellant were not found to be an occupier within the meaning of the Act, it should nevertheless be found negligent based on a breach of a common law duty of care. Section 2 of the Act states that it replaces the previous common law rules that determined the nature of the duty owed by an occupier of premises with a statutory duty to take reasonable steps so that the premises will be reasonably safe. Feldman J.A. concluded that it is clear, based on s. 2 of the Act, that there is no general common law duty of care, based on proximity principles, owed by an adjacent property owner in respect of sidewalks that abut that person's property. The only duty is the statutory duty owed by a person who meets the definition of "occupier" under the Act.
 
The appeal was dismissed.
 
3. Azzeh v. Legendre, 2017 ONCA 385 (Weiler, Benotto and Roberts JJ.A.), May 12, 2017
 
On September 7, 2007, Bayden Azzeh and his mother Julia Neville were involved in a car accident in Sudbury. Bayden suffered brain injuries. He was just 17 days old. 
 
After the accident, Neville retained the firm of Wallbridge, Wallbridge to act on her and Bayden's behalf. Their contingency fee agreement was for both mother and son with respect to the same accident. Wallbridge issued a Statement of Claim on Neville's behalf in April 2008. The claim was settled in August 2011. Shortly thereafter, Neville made an application for statutory accident benefits for Bayden, signing the application as his "guardian". 
 
In June 2014, Wallbridge issued a claim on behalf of Bayden, "represented by his Litigation Guardian Julia Neville", against Roger Legendre and Susan Legendre, the driver and owner of the other car involved in the accident. Neville did not swear the affidavit required by r. 7.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that no person other than the Children's Lawyer or the Public Guardian and Trustee shall act as litigation guardian for a plaintiff or applicant under a disability until the prescribed affidavit has been filed. 
 
On May 25, 2015, Bayden changed lawyers, retaining Mazin and Associates. Ingrid Dion, Bayden's grandmother, swore an affidavit as his new litigation guardian. A few days later, Dion gave notice to the City of a potential claim against it. In October of that year, a court order substituted her as Bayden's litigation guardian. 
 
Bayden moved to amend his Statement of Claim to increase the amount of damages sought and to add multiple defendants, including his previous counsel, Neville, and the City of Sudbury, which had jurisdiction over the intersection where the accident occurred. 
 
The City opposed the motion on two grounds: first, that the claim against it was statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24; second, that the claim was barred because Bayden failed to provide it with notice within ten days of the accident, as required under s. 44(10) of the Municipal Act, 2001, S.O. 2001, c. 25. 
 
Unsuccessful on both counts, the City appealed. 
 
The City submitted that the motion judge erred in holding that the claim against it was not statute-barred. It took the position that under the Limitations Act, 2002, a minor is represented in relation to a claim as soon as someone takes steps on his behalf in relation to the claim, not when a Statement of Claim is issued. Accordingly, it argued that Bayden was represented by Neville when she signed the contingency agreement with Wallbridge or alternatively when she signed the application for statutory accident benefits on his behalf in October 2011, and that the limitation period had long expired by the time of Bayden's motion.
 
The City submitted that the motion judge also erred in finding that notice had been provided to it within the 10 day period set out in Municipal Act, 2001. It argued that the 10 day period began to run, at the latest, in June 2014 when Wallbridge issued a Statement of Claim in which Neville held herself out as Bayden's litigation guardian. 
 
The Court of Appeal rejected the City's first submission but gave effect to the second. 
 
Writing for the majority, Weiler J.A. upheld the motion judge's finding that Bayden was not represented by a litigation guardian until June 11, 2014, when the Statement of Claim was issued on Bayden's behalf against the Legendre defendants. She noted that where the person with a claim is a minor, the Limitations Act, 2002 requires that the minor be "represented by a litigation guardian in relation to the claim", meaning that the litigation guardian may do anything in a proceeding that the party under disability would ordinarily be required or authorized to do. Neville's contingency fee agreement with Wallbridge did not result in Bayden being represented by a litigation guardian in relation to the claim because there was not yet any proceeding. Moreover, in the statutory accident benefits application, Neville identified herself as Bayden's "guardian", not as his litigation guardian. Weiler J.A held that Neville could have been signing as her son's substitute decision maker or simply using the word colloquially. 
 
Weiler J.A. also rejected Bayden's and Wallbridge's submission that Bayden was still "not represented by a litigation guardian in relation to the claim" in June 2014, observing that Neville clearly held herself out her son's litigation guardian to the Legendre defendants. Her failure to file the required affidavit made the proceeding "an irregularity and not a nullity". Weiler J.A. pointed out that to delay the running of the limitation period on the basis that the litigation guardian had not filed the required affidavit would render the limitation period unlimited because the litigation guardian could delay filing the affidavit indefinitely.
 
Weiler J.A. concluded that Bayden was represented by a litigation guardian on June 11, 2014, and that is when the two-year limitation period began to run. He filed his motion to amend his claim on September 15, 2015, well within two years. Weiler J.A. therefore concluded that the motion judge was correct in finding that the Limitations Act, 2002 did not bar the claim against the City. 
 
On the notice issue, s. 44(10) of the Municipal Act, 2001 provides that no action shall be brought against a municipality for failure to keep a highway in a reasonable state of repair unless notice is given to the municipality within 10 days of the occurrence of the injury. Although the notice requirement is similar in character to a limitation period, the action will not be barred if the plaintiff can provide a reasonable excuse for not giving notice and if the municipality is not prejudiced in its defence. The words "reasonable excuse" are to be given a liberal interpretation. However, there was nothing in the record to suggest that by the time Neville acted as Bayden's litigation guardian on June 11, 2014, the extent of his injuries was unknown. Neville was capable of forming the intention to sue the municipality within the notice period and had retained counsel to pursue claims on her son's behalf. 
 
Dissenting in part, Roberts J.A. held that the motion judge erred in making a final determination with respect to the limitation and notice period issues. She noted that this was a pleadings a motion, not a motion to determine an issue of law prior to trial or even a summary judgment motion. No declaratory relief was sought. She felt that there were credibility and factual issues that ought to have been left for final determination on a summary judgment motion or at trial. Roberts J.A. would have allowed the appeal to the extent of granting leave to the appellant to plead limitation and notice period defences. 
 
The appeal was allowed, setting aside the motion judge's order, and ordering that the claim against the City be dismissed. 
 
4. Biancaniello v. DMCT LLP, 2017 ONCA 386 (Feldman, Epstein and Miller JJ.A.), May 15, 2017
 
In this decision, the Court of Appeal considered whether a mutual release signed in settlement of an action applies to a future claim which was not anticipated at the time of settlement.
 
The appellant, DMCT LLP, acted as accountant to the respondent, Prinova Technologies. Incorporated as a consulting business offering advice on document automation, Prinova also developed a software business. DMCT billed Prinova more than $60,000 for services rendered in 2006 and 2007 on three separate matters, including the structuring of a "butterfly transaction" in which Prinova's software and consulting businesses were divided into separate companies. Prinova objected to paying the fees, alleging that it obtained little value for the services rendered and incurred damages as a result of some of the advice provided by DMCT. 
 
DMCT sued for its fees. Before a Statement of Defence was delivered, the parties agreed to settle the litigation for a total payment by Prinova of $35,000. As part of the settlement, the parties executed a mutual release dated March 31, 2008. Broadly-worded, the release provided that the parties:
 
... do hereby remise, release, and forever discharge each other of and from all manner of actions, causes of actions, suits, debts, duties, accounts, bonds, covenants, claims and demands which against each other they had, now have or hereafter may, can or shall have for or by reason of any cause, manner or thing whatsoever existing to the present time with respect to any and all claims arising from any and all services provided by DMCT to Prinova through to and including December 31, 2007 ... [Emphasis added.]
 
Subsequently, in late 2011, Prinova learned that the butterfly transaction DMCT had structured could be subject to an income tax liability of approximately $1.24 million.
 
Prinova obtained a court order dated January 23, 2013, rescinding the steps taken to implement the butterfly transaction. As part of its rescission application, Prinova included an affidavit from Enzo Testa, the DMCT partner who had advised Prinova on the butterfly transaction, in which Testa acknowledged that the transactions designed by DMCT did not comply with the relevant provisions of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) and therefore were contrary to Prinova's intentions. 
 
Prinova incurred over $250,000 in legal and accounting fees in the process of obtaining the rescission order. 
 
In May 2012, Prinova filed a Notice of Action against DMCT seeking an order setting aside the 2008 release and claiming $3 million in damages for negligence, breach of contract, misrepresentation and breach of fiduciary duty. 
 
DMCT moved for summary judgment to dismiss the action on the basis that Prinova's claim was barred by the 2008 release.
 
The motion judge dismissed DMCT's motion, finding that the release did not bar Prinova's claim. The Divisional Court dismissed DMCT's appeal, agreeing with the motion judge that, at the time it signed the release, Prinova did not know that DMCT's advice on the butterfly transaction had been negligently given, and therefore it did not know that it had a claim for negligence against it. 
 
The Court of Appeal disagreed. 
 
Writing for the court, Feldman J.A. held that the Divisional Court erred in law by failing to properly apply established principles of interpretation. 
 
Review the matter on a standard of correctness, Feldman J.A. emphasized the importance of a contextual approach in the interpretation of a release. As the Supreme Court explained in Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69, in determining what was contemplated by the parties, the words used in a document must not be looked at in a vacuum. The context in which the document was executed may assist in understanding the particular words used.
 
Feldman J.A. concluded that the release was "clear and unequivocal in its intent and effect". Although the release did not specifically reference unknown claims, it included "all" claims arising from the services provided to Prinova by DMCT up to the end of December 2007. By including all claims, there was no need to further specify the types of claims that were included.
 
Feldman J.A. noted that in signing the release, the parties intended to fully and finally settle their fee dispute. The language of the release reflected that intention, "wiping the slate clean" in respect of the work performed by DMCT – including the butterfly transaction – by covering all claims arising from that work. Feldman J.A. pointed out that had the parties wished to exclude claims which might later be discovered arising from that work, they could have done so.
 
The court allowed the appeal, set aside the decision of the Divisional Court and granted summary judgment dismissing the action. 
 
5. Bollman v. Soenen, 2017 ONCA 391 (Simmons, Pepall and Huscroft JJ.A.), May 17, 2017
 
The respondent performed a surgical procedure on the appellant. Although the surgery appeared to go smoothly, in the following days and weeks the appellant experienced significant pain and complications. A CT scan revealed an injury, and corrective surgery followed.

The appellant sued the respondent alleging negligence. She also alleged that he failed to obtain her informed consent to the procedure.
 
The trial judge rejected the appellant's claims that the respondent was not qualified to perform the surgery and that he failed to meet the standard of care in performing it. While the trial judge was not satisfied that the respondent fully informed the appellant about the risks of surgery, he concluded that a reasonable person experiencing the appellant's symptoms would have chosen to proceed with the surgery had full disclosure been made. The informed consent claim was therefore dismissed.
 
The trial judge did not find the respondent negligent in his post-operative care, however, he held that the respondent could have spared the appellant an additional week of pain and complications as well as the second surgery had he ordered the CT scan sooner. He awarded the appellant $35,000 in damages.
 
The appellant appealed the dismissal of her claim based on a lack of informed consent, while the respondent cross-appealed with respect to the finding based on the timing of the CT scan. The Court of Appeal dismissed the former and allowed the latter. 
 
Writing for the court, Simmons J.A. found that the trial judge correctly applied the test for informed consent in medical negligence cases established by the Supreme Court in Reibl v. Hughes, [1980] 2 S.C.R. 880, and modified in Arndt v. Smith, [1997] S.C.R. 539. The trial judge's reasons demonstrated that he believed the appellant when she said that she would have tried other management had full disclosure been made, but found her evidence tainted by hindsight and therefore unreliable. Taking account of the appellant's circumstances at the time, he concluded that she wanted relief and a "solution". The trial judge held that a reasonable person who had experienced the appellant's symptoms over the same time period and with the same attempts at correction that she had tried, would have opted for surgery – even with its small risk of injury – to solve the problem.  
 
Simmons J.A. rejected the appellant's submission that the trial judge ignored or failed to consider the evidence of her expert in reaching this conclusion. She found that the trial judge considered all of the evidence and applied the correct legal test. The trial judge's conclusion was entitled to deference. 
 
Turning to the cross-appeal, Simmons J.A. held that the trial judge did err, however, in finding that the respondent failed to consider and investigate a possible surgical injury a week before the date of the CT scan. Read as a whole, the expert evidence did not support this conclusion. Although two physicians gave opinions relied upon by the trial judge, both acknowledged that declining to order a CT scan would be a reasonable decision – or at least not an unreasonable one – and thus within the standard of care.

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