Canada: Ontario Court Of Appeal Summaries (November 27 – December, 1 2017)

Last Updated: December 5 2017
Article by John Polyzogopoulos

Below are this week's summaries of the civil decisions of the Court of Appeal.

Topics this week included personal injury, family law, employment law, property law, mortgages, bankruptcy and insolvency and extensions of time to appeal.

Krates Keswick Inc. v. Crate, 2017 ONCA 915

[Sharpe, van Rensburg and Brown JJ.A.]


Gregory Sidlofsky, for the appellant

Mark Dunn and Kirby Cohen, for the respondent

Keywords: Contracts, Debtor-Creditor, Guarantees, Mortgages, Civil Procedure, Judgments, Enforcement, Stay Pending Appeal, Bankruptcy and Insolvency, Receiverships, Resulting Trusts

Facts: The respondent, Krates Keswick Inc., purchased and took assignments of three loans made to the appellants and some Crate family companies, which went into receivership. Loan 1 was guaranteed by the appellants. Loan 2 was made to the appellants as borrowers; it was not secured. Loan 3 was guaranteed by the appellant, Marko. The guarantors provided collateral security for their guarantees, which included mortgages on 210 Wynhurst and the Marko Lands. The Respondent sought and obtained judgment against the appellants on the loans. The motion judge also granted the respondent possession of the Marko Lands. The motion judge dismissed the appellants' counterclaim and refused to stay the enforcement of the Judgment. The appellants appeal.


(1) Did the motion judge err in granting judgment in the amounts specified for Loans 1, 2 and 3?

(2) Did the motion judge err in granting possession of the Marko Lands to KKI and dismissing the counterclaim?

(3) Should the enforcement of Loans 1, 2 and 3 be stayed?

Holding: Appeal allowed in part.


(1) No. The motion judge made no error in granting judgment in the amounts specified for Loans 1, 2 and 3.

(2) No. There was no error in the Judgment granting possession of the Marko Lands to KKI and dismissing the counterclaim.

(3) Yes. Important facts concerning the lands that stand as security for Loans 1 and 3 emerged in two recent decisions of Myers J. This information was not before the motion judge.

By reasons dated November 17, 2017, Myers J. vested in the respondent title to 210 Wynhurst, one of the properties that stands as security for Loan 1. The resulting net value of 210 Wynhurst reduced the amount outstanding under Loan 1. By reasons dated October 17, 2017, Myers J. held that beneficial title to the Marko Lands was held by the appellants on resulting trust for one of their family companies and, as a result of the receivership proceedings, is now held in resulting trust for the respondent. A further proceeding is required to determine whether the appellants will be able to establish any credit against the amount of the judgment in respect of Loans 1 and 3 for the value of the Marko Lands. Given this new information, it is just and reasonable to stay the enforcement relating to the secured Loans 1 and 3 until it is determined what, if any, reduction in the amounts payable under the judgment the appellants may be entitled to by reason of the value of the Marko Lands. Consequently, the enforcement is stayed until such determination has been made. Since Loan 2 was unsecured, the court did not interfere with the motion judge's refusal to grant a stay of enforcement of the amount of that loan. There were no costs of the appeal.

Winters v. Hunking, 2017 ONCA 909

[Sharpe, Blair and Epstein JJ.A.]


John A. Tamming, for the appellant, Ray Harvey Hunking

Tim Gleason and Rebecca Glass, for the respondents, John David Winters and Margaret Louise Winters

Keywords: Contracts, Debtor-Creditor, Real Property Law, Mortgages, Enforcement, Judgments for Foreclosure, Setting Aside, Judicial Sale, Rules of Civil Procedure, Rule 64.03(22)


Ray Hunking, the appellant, defaulted on the mortgage payments for his family homestead farm near Dundalk, Ontario. The mortgagees subsequently obtained a default judgment for foreclosure. The appellant appeals his unsuccessful motion to set aside the judgment.

Mr. Hunking is a low-income, illiterate, and physically disabled 61 year-old man, clinging unrealistically to his heritage and life as a farmer. According to medical information on the record, he is also severely mentally challenged and on daily doses of morphine for the chronic pain he endures, something that affects his reaction time and ability to respond to circumstances. He has lived on the mortgaged family homestead his entire life, acquiring it from his parents who, in turn, acquired it from his grandparents. His doctor strongly suggested that he move into assisted living.

After borrowing $350,000 from the Winters on the security of the farm, Mr. Hunking failed to make payments on the mortgage and did not pay all the taxes as he had agreed. When the Winters commenced the foreclosure action, he did not defend or file a request to redeem or a request for sale. When the Winters afforded him time to sell or find re-financing, he took no steps to pursue the latter and, on his own admission, "stubbornly" resisted a sale. Although Mr. Hunking received an oral offer to purchase the farm, he declined to pursue the offer because he felt it was too low. When served with a final order of foreclosure, obtained after he was noted in default, he did not move immediately for relief. Instead, he waited another 12 months before bringing a motion to set aside the default judgment, requesting, at that time, the right to redeem or to convert the foreclosure process to a judicial sale. His motion was dismissed.

The evidence shows that a sale of the farm would generate a net equity (after payment of the mortgage in full, including interest and all costs) of approximately $250,000 to $337,000.


(1) Should the mortgagees or Mr. Hunking receive the benefit of the net equity on sale of the farm?

Holding: Appeal allowed.


(1) Mr. Hunking should receive the benefit of the net equity on sale of the farm. The main factor regarding whether to set aside a default judgment for foreclosure is whether the decision to set aside the order leads to a just result in all the circumstances. The court held that the motion judge's decision does not lead to a just result.

The court has a broad jurisdiction to set aside a default judgment and grant relief against foreclosure wherever the equities in the mortgagor's favour outweigh all that are against him or her.

Citing Royal Bank of Canada v. Swan, 1979 CarswellOnt 3420 (Master), aff'd 1980

CarswellOnt 3624 (Div. Ct.), and several other decisions, the court set out the well-established factors that are to be considered in the exercise of the court's discretion, which include:

(i) whether the motion to set aside was made with reasonable promptness;

(ii) whether there is a reasonable prospect of payment at once or within a short period of time;

(iii) whether the applicant has been active in endeavouring to raise the money necessary;

(iv) whether the applicant has a substantial interest in the property or the property has some special intrinsic value to him or her; and

(v) where the property has been sold after foreclosure (not the case here), whether the rights of the purchaser will be unduly prejudiced.

The court found that the motion judge made four errors that, taken together, tainted his reasoning and warranted the granting of the appeal.

First, the motion judge mischaracterized the nature of the appellant's mental frailties in his analysis, treating them as simply a matter of his mental competence to participate in the proceeding. As a result, he gave little, if any, consideration to whether those mental frailties, together with the appellant's obvious physical limitations and the effect of his medications, could have provided some explanation for the appellant's relative inaction and failure to respond to the foreclosure process. Instead, the motion judge fastened on Mr. Hunking's admitted "stubbornness".

Secondly, the motion judge erred in his consideration of the "substantial interest" factor. Although he accepted that the appellant had a substantial interest in the farm, the motion judge appeared to have viewed that substantial interest solely as a matter of the appellant's "sentimental attachment" to the property, rather than focussing on the appellant's interest in the form of the substantial equity that remained in the property after all mortgage payments and costs are paid.

Third, the motion judge erred in confining his analysis of the "reasonable prospect of repayment" factor to Mr. Hunking's inability, or unwillingness, to refinance the mortgage, when the record shows that, on a sale of the farm, the mortgagees would be fully repaid.

Finally, the motion judge failed to analyse the true nature and significance of the magnitude of the windfall to the respondents in the context of the appellant's circumstances and the prejudice to him of not setting aside the default judgment for foreclosure, and to weigh it against the virtual lack of prejudice to the respondents, who would be completely reimbursed and paid in full had a sale of the property been ordered.

For the aforementioned reasons, the court allowed the appeal and ordered that the foreclosure proceedings be converted to an immediate judicial sale pursuant to rule 64.03(22) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

6443923 Canada Inc. (Zesty Market) v. Kablou, 2017 ONCA 916

[Sharpe, Epstein and van Rensburg JJ.A.]


E Lay, for the appellant

I B McBride, for the respondents

Keywords: Civil Procedure, Stay of Proceedings, Abuse of Process, Collateral Attack, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63


These civil proceedings follow a 2011 criminal trial in which a jury found Mr. Karimi, a principal of the numbered company appellant in each action, guilty of extortion and criminal harassment. The respondents and a third individual, Mr. Alireza Khodabandeh, were the victims of Mr. Karimi's crimes. Mr. Karimi defended the criminal charges primarily on the basis that the respondents and Mr. Khodabandeh had committed theft against his company. In the sentencing judge's view, the guilty verdict made clear that the jury found no theft had occurred. She imposed a sentence that included significant restitution orders in favour of the respondents. On April 28, 2014, the Court of Appeal dismissed Mr. Karimi's appeal from his conviction and sentence.

Following his criminal prosecution, Mr. Karimi commenced these civil actions against the respondents, and an action against Mr. Khodabandeh. In each action, Mr. Karimi claimed damages for theft. Beaudoin J. granted summary judgment dismissing the action against Mr. Khodabandeh. On July 11, 2016, the Court of Appeal dismissed Mr. Karimi's appeal from that decision. Mr. Karimi sought leave to appeal to the Supreme Court of Canada.

The respondents moved for a stay of these proceedings, primarily on the basis that the actions were an abuse of process. The motion judge accepted the appellant's submissions on abuse of process and ordered that both actions be temporarily stayed, reasoning that they amounted to an impermissible collateral attack on the verdict in the criminal prosecution. The motion judge ordered that if the Supreme Court refused Mr. Karimi leave to appeal the Court of Appeal's July 11, 2016 decision (or granted leave and dismissed the appeal), the temporary stay would become permanent. The motion judge further provided that Mr. Karimi had to comply with the restitution orders from the criminal proceedings as a condition of bringing any motion to lift the stay. The Supreme Court denied leave to appeal the Court of Appeal's July 11, 2016 decision. As a result, the stay ordered by the motion judge is now permanent. The appellant appeals the motion judge's imposition of the stay.


(1) Did the motion judge err in finding that the actions against the respondents amounted to a collateral attack on the criminal prosecution?

(2) Did the motion judge lack the authority to order Mr. Karimi to satisfy the restitution orders from the criminal proceedings before seeking to lift the temporary stay?

Holding: Appeal dismissed.


(1) No. It was open to the motion judge to conclude that the jury in the criminal prosecution found that the alleged thefts did not occur. The jury heard ample evidence to lead them to the conclusion that there had been no theft committed by any of the victims or by anyone else. In this case, the motion judge stayed the proceedings on the basis of the abuse of process doctrine, which is "unencumbered by the specific requirements of concepts such as issue estoppel" Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 37. The doctrine of abuse of process engages the court's inherent jurisdiction to prevent the misuse of its procedure in a way that would be manifestly unfair to a party before it or would otherwise bring the administration of justice into disrepute: C.U.P.E., at para. 37. Moreover, the motion judge explained why these actions amounted to an abuse of process.

(2) No. As the Supreme Court's denial of leave rendered the stay permanent, the Court of Appeal did not need to address this issue.

Zafar v. Saiyid, 2017 ONCA 919

[Hourigan J.A.]


A Farooq, for the respondent

R McQueen, for the applicant

Keywords: Family Law, Child Abduction, Custody, International Law, Convention on the Civil Aspects of International Child Abduction, 25 October 1980, C.T.S. 1983/35; 19 I.L.M 1501, Children's Law Reform Act, RSO 1990, c. C.12, s. 46(2), Civil Procedure, Orders, Appeals, Time to Appeal, Stay Pending Appeal, Rules of Civil Procedure, Rule 63.02


The parties were married and have two children who were born in London, England. In May 2016, the Appellant (respondent in initial application) took a trip with the children to Canada with the consent of the Respondent (applicant). The trip was to last from May 8, 2016, to August 1, 2016. She communicated with the Respondent while in Canada about extending the trip to September 11, 2016. The Respondent was agreeable to an extension. On August 23, 2016, the Appellant telephoned the Respondent and told him that their marriage was over and that she was not returning the children to England. The Respondent brought an application pursuant to the Convention on the Civil Aspects of International Child Abduction, 25 October 1980, C.T.S. 1983/35; 19 I.L.M 1501 ("the Hague Convention"), as incorporated in s. 46(2) of the Children's Law Reform Act, RSO 1990, c. C.12, for the children to be immediately returned to London, England. The application judge rejected the Appellant's argument that the Respondent had acquiesced to the removal of the children. The application judge granted the application and determined that the correct jurisdiction to hear custody and access issues was England and, accordingly, the children must be returned (the "September Order")

A notice of appeal from the September Order was not filed in time. The parties were unable to agree to arrangements for the return of the children and made further submissions to the application judge. On November 7, 2017, the application judge made a further order regarding the undertakings and arrangements for the return of the children. He ordered that, until a further order by the British Court, the Respondent was to provide exclusive possession of the matrimonial home and pay the monthly rent and taxes on same and the Respondent was to pay £225 per week in child support. The application judge also made an order for the return of the children to England, the application judge ordered that if the Appellant failed to return the children to England by December 1, 2017 (i) the Respondent would have sole custody and will be permitted to return to England with the children; (ii) local, federal, and international law enforcement shall assist in locating and delivering the children to the Respondent; (iii) the order shall remain in force until June 1, 2018, unless extended; (iv) a sheriff or police officer may enter and search any place where there is reasonable and probable grounds for believing the children may be; and (v) the Appellant shall deliver forthwith to the Respondent or his lawyers the children's passports, Social Security cards and birth certificates. Once the children were returned to England, the application judge ordered that they not be removed from that country (the "November 7 Order").

The Appellant sought a stay of the November 7 Order, the Respondent brought a cross-motion seeking to have the appeal dismissed on the grounds that the September Order was final and it was not appealed in time.


  • Should the cross-motion be granted?
  • Should a stay be granted with respect to:
  • The order for the return of the children;
  • The order for the return of the Appellant; and
  • The order for a change in custody.


Motion granted in part, cross-motion dismissed.


  • The two sets of reasons amount to one order. The September reasons ordered that the children be returned to England. The application judge stated that he could add to those reasons and provide for a process to send the children home. He chose not to, instead directing the parties to work out the details and, failing agreement, to make further submissions. The two sets of reasons amounted to one final order and the Appellant appealed within the timeframe provided for in the Rules of Civil Procedure. The cross-motion was, therefore, dismissed.
  • The Appellant argues that the application judge erred when he ordered her and the children to return to England and when he ordered that custody might be granted to the Respondent in the event of non-compliance. The Appellant argues that the application judge had no authority to make these orders.

The test for staying an order pending appeal under Rule 63.02 of the Rules of Civil Procedure requires the court to consider the following factors: (1) a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried; (2) it must be determined whether the applicant would suffer irreparable harm if the application were refused; and (3) an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. These three factors are not watertight compartments; the strength of one may compensate for the weakness of another. The overarching consideration is whether the interests of justice call for a stay.

  • There is a serious issue to be tried. The Appellant, however, has not met the onus of irreparable harm. The primary arguments asserted by the Appellant on this issue are that without a stay the status quo would be altered, that her relationship with the children would be ruptured, and the children would be subjected to harm. The purported status quo of the children remaining in Canada, which is not their habitual residence, was a situation that the Appellant engineered and should not be continued absent good reason. Her safety concerns can be dealt with expeditiously in England. With regard to the balance of convenience, the Appellant submits again that the status quo should not be disturbed, the father has no plan of care, and that the appeal would be rendered moot if a stay is not granted. The Court of Appeal rejected this further status quo argument for the same reason. The balance of convenience thus favours the Respondent. There is a serious issue to be tried, but the Appellant will not suffer irreparable harm if the stay is not granted, and the balance of convenience also does not favour a stay. This is a situation where the court must follow its mandate of ensuring that Hague Convention cases are dealt with expeditiously by ensuring prompt return of children to their habitual residence.
  • The court was without jurisdiction to make such an order and it raises serious constitutional concerns. The Appellant would suffer irreparable harm if she were effectively ordered out of Canada to a country where she does not hold citizenship. The balance of convenience would also clearly favour the Appellant, as she could suffer real prejudice if she is ordered out of Canada against her wishes. The balancing of factors thus favours granting a stay on this part of the application judge's reasons.
  • This is a matter to be determined in England. Such an order would also violate article 16 of the Hague Convention. The Appellant may suffer irreparable harm if an order is made in Canada changing custody of the children, as it could adversely impact her position before the English courts. The balance of convenience also favours the Appellant. Such an order significantly changes the status quo in terms of the parties' having custody issues determined by the English courts.

Emmerson v. Emmerson, 2017 ONCA 917

[Epstein, Hourigan and Paciocco JJ.A.]


  1. Emmerson, acting in person
    A. McInnis, for the respondent

Keywords: Family Law, Child Support, Child Support Guidelines, O. Reg. 391/97, s. 17(1), Spousal Support, Standard of Review, Hickey v. Hickey, [1999] 2 S.C.R. 518, Equalization of Net Family Property


The parties began cohabiting on February 1, 1992, and were married on October 1, 1999. They have one child, born March 5, 2001. The parties separated on September 1, 2009, but, for a time, continued to reside together in the former matrimonial home. The parties entered into a separation agreement on January 12, 2010.

When negotiations over the separation agreement began in September 2009, the respondent was employed by Money Concepts as a financial planner. By early November 2009, he decided to leave Money Concepts and move to Investment Planning Council. About a year later, the respondent moved from IPC to World Source Financial Management. He worked in financial planning at these various companies and was paid commissions through numbered companies.

The separation agreement was negotiated on the assumption that the respondent did not have a book of business. The trial judge found that the respondent did, in fact, have a book of business at the relevant time and had failed to disclose that fact. Based on a review of the parties' financial information and the respondent's conduct during negotiations, the trial judge concluded that the nondisclosure of the book of business constituted nondisclosure of a significant asset, sufficiently serious to justify setting aside the separation agreement. The trial judge made further orders relating to equalization payments and child and spousal support obligations which are the subject of this appeal.


(1) Did the trial judge err in determining the equalization payments owing to her based on a flawed assessment of the book of business?

(2) Did the trial judge err in quantifying the respondent's income for child support purposes?

(3) Did the trial judge err in dismissing the appellant's claim for spousal support?


Appeal allowed in part.


On points of law, the trial judge's decision is reviewable on a standard of correctness. Any factual determinations must be reviewed on a reasonableness standard.

Spousal support decisions attract significant deference. This is informed by both the discretion involved in making support orders and the importance of finality in family law litigation. An appeal court should only intervene where there is a material error, a serious misapprehension of the evidence, or an error in law. It is not entitled to overturn a support order simply because it would have made a different decision or balanced the factors differently: Hickey v. Hickey, [1999] 2 S.C.R. 518, at para. 12.

(1) No. The trial judge gave fair consideration to the appellant's proposed alternative valuation approach. He acknowledged that a share purchase agreement to which the appellant was a party employed the "commission earnings" approach outlined in the appellant's internet research. Based on that evidence, the trial judge acknowledged that it would have been open to the court to find that the value of the book of business at the date of separation was far higher than the $120,000 transition allowance that the respondent received. However, the trial judge chose to rely on the transition allowance as the fairest available assessment of value. This was a reasonable choice. The trial judge did not receive any independent evidence as to the reliability of the appellant's internet research or the assumptions on which it was based.

(2) Yes. The trial judge erred in deducting business expenses given the lack of evidence from the respondent on this point, coupled with the trial judge's finding that the "lion's share of the respondent's business expenses were paid through 179." The burden of proof for the deductions rested with the respondent. Any further deduction needed to be supported by evidence, which was lacking.

As well, the trial judge provided no explanation for why he averaged out the respondent's income for the three previous years in relation to the year in which support was owing. He simply stated that it was reasonable to do so. However s. 17(1) of the Child Support Guidelines, O. Reg. 391/97 permits the court to look at the spouse's income over the last three years in the following circumstances:

17(1) If the court is of the opinion that the determination of a parent's or spouse's annual income under section 16 would not be the fairest determination of that income, the court may have regard to the parent's or spouse's income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

The Court of Appeal cited its prior decision in Mason v. Mason, 2016 ONCA 725, 132 O.R. (3d) 641, at para. 138, which held that "the Guidelines rely on the more recent past to predict the near future and do not adopt average as a default methodology."

It was an error for the trial judge to use a three-year average of income without providing a satisfactory explanation of how the use of each year's income would be unfair to either party. The Court of Appeal therefore based the amount of child support owing for each year based on the income findings for those years but without applying a 15% deduction for business expenses.

(3) Yes. While the trial judge did not err in dismissing the appellant's claim for compensatory spousal support, the judge erred in failing to consider any basis for non-compensatory support. It was an error to not consider in his analysis of spousal support the respondent's misrepresentations concerning his income and the impact they had on the appellant during the marriage and after it came to an end. The Court of Appeal cited the Spousal Support Advisory Guidelines, The Revised User's Guide (Ottawa: Department of Justice, 2016) ["SSAGs"], at ch. 4, where it states that "[c]ommon markers of non-compensatory claims include the length of the relationship, the drop in standard of living for the claimant after separation, and economic hardship experienced by the claimant".

The trial judge made no findings of fact concerning the respondent's misrepresentations to the parties' economic interdependence, the marital and post-marital standards of living and, most significantly, the financial impact on the appellant of the respondent's chronic misrepresentations as to his income.

The appellant gave up the pursuit of higher education during their relationship, as she believed her continued employment income was essential to the family, allowing the respondent to focus on building his network of contacts.

The trial judge found that the possibility of lost employment opportunities did not, by itself, create an entitlement to spousal support. However, the trial judge was bound to consider this evidence in combination with the other impacts of the respondent's misrepresentations to the appellant. Namely, had the respondent not misrepresented his income and assets but rather had provided the support and equalization ultimately found owing, the appellant would have had the funds to purchase and remain in the matrimonial or provide a down payment on another suitable home. The respondent's behavior has significantly impacted the appellant's financial position. The court therefore awarded the appellant retroactive and ongoing time-limited spousal support on a non-compensatory basis at the low-end of the SSAGs for 10 years from the date of separation.

Parent v. Janandee Management Inc., 2017 ONCA 922

[Trotter, Paciocco and Nordheimer JJ.A.]


Douglas A. Wallace and Tori C. Wallace, for the appellants

Brian Brock and Joanna Reznick, for the respondents

James Schacter and Neil Searles, for the respondent/appellant by cross-appeal

Keywords: Torts, Negligence, Duty of Care, Foreseeability, Apportionment of Liability, Fault, Negligence Act, R.S.O. 1990, c. N.1, s. 1, Jury Charge, Costs


Janandee is a condominium developer that advertised in Toronto with portable, A-frame signs on city sidewalks. Upright Signs was contracted by Janandee to install signs at designated intersections. On March 23, 2002, the respondents, Dr. Jocelyne Parent and her husband, John Hendrix, were walking westbound on the sidewalk located on the south side of King Street, near Bay Street, in Toronto. The day was windy and Dr. Parent was struck in the face by one of Janandee's A-frame signs. The evidence was that the sign lifted about six inches off the ground and then struck Dr. Parent. As a result of the incident, Dr. Parent was knocked to the ground, hitting her head on the sidewalk. She sustained a broken nose, fractured orbit, and traumatic brain injury.

Following a fifteen-day trial, a jury found all defendants liable, and awarded Dr. Parent $2,900,169.60 in damages, plus interest and costs. The jury found that Janandee and Upright Signs were both negligent and apportioned liability as follows: Janandee 94% and Upright Signs 6%. The trial judge subsequently ordered Janandee and Upright Signs to pay costs to the respondents in the amount of $727,290.00 and ordered Janandee to pay costs to Upright Signs in the amount of $210,000.00.

Legal Issue:

(1) Did the trial judge err in concluding that Janandee owed a duty of care to the plaintiff?

(2) Did the trial judge properly instruct the jury on the principles of apportionment of liability?

(3) Did the trial judge erroneously instruct the jury on the issue of foreseeability?

(4) Did the trial judge err in awarding costs?

Holding: Appeal dismissed.


(1) No, this submission is untenable. A party who places, or arranges to have placed, signs on public sidewalks clearly owes a duty of care to members of the public to ensure that those signs are placed in a manner that will not cause injury to pedestrians or others who might reasonably be affected. There is a sufficiently close relationship between the persons placing signs, and the persons using the sidewalks, such that it would be within the reasonable contemplation of the former that carelessness on their parts might cause damage to the latter. Further, there are no considerations which ought to negative or limit the scope of the duty or the persons to whom it is owed.

However, the Court found that there was an issue with the trial judge's charge to the jury. He spent a significant amount of time explaining why he had found that a duty of care was owed. Providing an explanation as to why a duty of care has been found runs the risk that the explanation may unintentionally influence the jury's consideration of the two issues that they have to decide, that is, whether a defendant was negligent and the apportionment of fault as between two or more negligent defendants. In other words, the jury may take the trial judge's explanation as to why a duty of care has been found as indicating, or telegraphing, his/her view on the defendants' liability. Indeed, in this case several of the comments impugned by Janandee are found in comments the trial judge made about whether a duty of care applied. However, the Court ultimately found that while this ran a risk that ought not to have been taken, these comments did not misled or influence the jury. What the trial judge ought to have done, after setting out the three elements, was simply advise the jury that he had concluded, as a matter of law that a duty of care was owed by the defendants to the plaintiffs and thus the jury did not have to concern itself with that issue.

(2) No. Janandee submitted that the trial judge confused the issue of causation, which is relevant to the breach of the duty of care, with the issue of fault that is relevant to the apportionment exercise. Janandee argued that this error was sufficiently serious that the Court should intervene by setting aside the jury's verdict and reapportioning the liability 75% to Upright Signs and 25% to Janandee.

Janandee correctly pointed out that s. 1 of the Negligence Act provides that where damages are caused or contributed by two or more persons "the court shall determine the degree in which each of such persons is at fault or negligent". Fault is different than causation. The notion of fault involves a consideration of the blameworthiness of the actions of each of the defendants who have contributed to the damages suffered.

The potential difficulty arises when one gets to question #5, the apportionment question. It refers back to the negligence questions (i.e., questions #1 and #3) and then simply asks for the percentage split. Specifically, question #5 was: "Only if the answers to questions 1 and 3 are both "yes", how do you apportion the respective degrees of fault?"

Two blanks were left beside the two defendants for a percentage to be inserted, with the total already marked as having to add to 100%.

In his charge to the jury, the trial judge said the following:

If your answer to Questions 1 and 3 is yes, then you must answer Question 5 which requires you to apportion the respective degree of fault. You will note the question is already filled in in the total of 100. The apportionment must total 100 percent. There can be any two numbers that total 100. For example, the apportionment can be that 75/25 in either party's favour; 68/32; 50/50; 100/0.

The trial judge did not draw the jury's attention (at any point in his charge) to the fact that determining the degrees of fault is a different exercise than determining causation. It would have been better if the trial judge had explained to the jury that, when they came to the apportionment question, they must consider fault, in the sense of blameworthiness, and not causation. It might also have been helpful at that point to draw to the jury's attention the evidence that related to that determination.

While the Court found that the language used by the trial was not the best, it did not invite the jury to apportion based on causation. The jury was directed to consider specific negligence on the part of the defendants. The reference to "it" refers to the subject of the sentence, the specific negligent act.

Any room for confusion caused by including causation references in the apportionment discussion is not of such a magnitude as to warrant intervention in the result. The jury's question shows that the jury knew it was apportioning based on its answers to question 1 and 3, relating to the specifics of negligence, and not on a causation basis.

(3) No. Janandee argued that this error manifested itself in the trial judge referring to the position of the appellant as the incident amounting to an "Act of God". The trial judge provided counsel with his charge in advance. Time was spent reviewing the draft charge with counsel and obtaining their input. Counsel for Janandee did raise an issue with the trial judge's instructions on foreseeability but not on the point that Janandee now raises.

Nevertheless, characterizing Janandee's position as amounting to an "Act of God" defence probably ought not to have been said. However, the particulars of the negligence provided by the jury, fairly read in relation to Janandee, do not support any conclusion that this reference materially impacted on the jury's conclusions.

(4) No. The appellant sought to cross-appeal regarding the trial judge's costs awards. The cross-appeal was denied. While the Court accepted that there may be a measure of inconsistency between the specific individual awards that the trial judge decided on, they were all matters within the discretion of the trial judge. The suggested errors did not rise to the level of seriousness that is required to satisfy the rare instance where leave to appeal a costs award will be granted.

Fleischhaker v. Attwood, 2017 ONCA 927

[Blair, Pardu and Brown JJ.A.]


Michael Davies, for the appellant

Jacquie Dagher, for the respondent

Keywords: Administrative Law, Health Law, Consent and Capacity Board, Procedural Fairness, Health Care Consent Act, ss. 4 and 80

Facts: The Consent and Capacity Board found that the appellant was incapable with respect to treatment within the meaning of s. 4 of the Health Care Consent Act, and incapable with respect to treatment with "psychotropic medication". The evidence supported a finding that due to mental illness the appellant was incapable of appreciating the reasonably foreseeable consequences of a decision or lack of a decision respecting treatment. The issue raised by the appellant at the hearing related to his concern regarding the side-effects of the drug Clozapine. The respondent's evidence was that he considered that Clozapine might improve the appellant's condition but that he did not propose to administer that drug. He sought only to treat the appellant with the drug "Abilify", and not Clozapine.

During the hearing, the Board limited the appellant's proposed cross-examination of the respondent and introduction of material through cross-examination as to the side effects of Clozapine. The Board ruled that the proposed cross-examination and the material were irrelevant given the respondent's proposed treatment of the appellant. The appellant seeks a new hearing on grounds of denial of procedural fairness or, in the alternative, a narrowing of the order to provide for treatment by administration of Abilify. During the hearing of this appeal, counsel for the respondent conceded that, given the position taken by the respondent before the Board, it would be open to the Court to narrow the order to refer to Abilify.


(1) Should a new hearing of the Consent and Capacity Board be ordered?

(2) Should the order of the Consent and Capacity Board be amended?

Holding: Appeal allowed in part.


(1) No. If the order is narrowed, the issue of the limitation imposed by the Board on the cross-examination and material regarding the side-effects of Clozapine is cured, so a new hearing is not required.

(2) Yes. Pursuant to s. 80 of the Health Care Consent Act, the order of the Consent and Capacity Board is amended by deleting "psychotropic medication" and substituting "Aripiprazole".

Single Source Contracting Services Inc. v. Valiant Machine & Tool Inc., 2017 ONCA 925

[Sharpe, Epstein and van Rensburg JJ.A.]


Gino Morga, Q.C., for the appellant

Thomas McRae, for the respondent

Keywords: Civil Procedure, Settlements, Enforcement, Payment into Court, Rules of Civil Procedure, Rule 72


The appellant Single Source and the respondent Valiant were parties to litigation commenced in April 2007. They believed they had reached a settlement at a pre-trial conference, and the actions were marked "settled" by the pre-trial judge, and removed from the trial list. The parties then disagreed about the terms of the settlement. Single Source sought to restore the action to the trial list and Valiant moved to enforce the settlement. The motion judge found that there was agreement on the material terms. Single Source now appeals that decision.


(1) Did the motion judge err in failing to address and give effect to the evidence of Matthew Todd, Single Source's former lawyer, to support the contention that Single Source's proposal to creditors was not a term of the settlement?

(2) Did the motion judge err in not drawing an adverse inference from Valiant's failure to provide an affidavit from its former lawyer, Bryce Chandler, who had left the practice of law?

(3) Did the motion judge err in including a term requiring Single Source to file a bankruptcy proposal without evidence that it qualified to make a proposal?

(4) Did the motion judge err in not considering an Assignment Agreement dated June 24, 2014, purporting to assign its claims against Valiant to a third party, Sterling Ridge Investments Inc.?

(5) Did the motion judge err in ordering that monies be paid into court, as there is no mechanism for payment out of court?

Holding: Appeal dismissed.


Regarding the standard of review, the court held that the motion judge's interpretation of the parties' agreement, based on his review of the evidence, is entitled to deference.

(1) No. The draft settlement documents exchanged between counsel contemplated that Single Source would file a proposal to creditors.

(2) No. The Court held that there was nothing that an affidavit from Mr. Chandler could have added to the evidence.

(3) No. The court held that there was no merit to this argument. This was a term to which the parties agreed, and was not an additional term imposed by the court.

(4) No. Mr. Mueller, director of Corporate Development and General Counsel, deposed that Valiant had no knowledge of the assignment until the appellant retained its present counsel. Accordingly, the assignment was not referred to in the parties' negotiation of their settlement, and could not have affected its terms.

(5) No. The court held that the parties could resort to rule 72.03 of the Rules of Civil Procedure for both the payment into court and payment out – whether on consent or by order of the court.

Soraya v. Claron Technology Inc., 2017 ONCA 935

[Sharpe, Benotto and Roberts JJ.A.]


R Cohen and C Selby, for the appellant

J Adair, for the respondent

Keywords: Employment Law, Contracts, Employment Agreements, Vesting of Stock Options, Duty of Good Faith, Duty of Honest Performance, Marshall v. Bernard Place Corp., [2002] OJ No 463 (C.A.), Wrongful Dismissal, Mitigation, Oppression


This appeal involves the claim of the respondent employee (Soraya) under his employment contract that included stock options. The application judge found that the Lexmark sale of part of the appellant's business amounted to the sale of "all or substantially all of the assets of the Company" constituting a "triggering event" that caused the respondent's remaining 20,000 unvested options to vest under the appellant's Option Plan.


(1) Did the application judge err in finding that the respondent was entitled to the benefit of the appellant's Option Plan?

(2) Did the application judge err in finding that there was a "triggering event" and in rejecting the appellant's Board's determination that the sale to Lexmark did not constitute a "triggering event"?

(3) Did the application judge err in failing to find that the respondent did not properly exercise his options?

(4) Did the application judge err in finding that the respondent had discharged his duty to mitigate his claim for wrongful dismissal?

(5) Did the application judge err in requiring the appellant to purchase the respondent's options through Claron Holdings Inc., a non-party?

Holding: Appeal dismissed.


(1) No. When he was hired, although he was not given a copy of the Option Plan, the respondent was told that the appellant had a "great stock option plan". That indicated that an Option Plan did in fact exist. The appellant dealt with both the respondent and other employees on the basis that the provisions of the Option Plan governed and it was only after this litigation commenced that it took the position vis-à-vis the respondent that it was a non-binding draft. There was ample evidence to support the application judge's finding that the Option Plan was binding on the company.

(2) No. There was ample evidence to support the application judge's finding that the sale to Lexmark represented 87 to 89% of the value of the appellant's assets and therefore amounted to a triggering event. Moreover, despite the appellant's argument that the application judge erred by failing to apply terms in the Option Plan making the determinations of the Board "final, conclusive and binding" and "not subject to any dispute by any participant", the Court of Appeal found that the application judge properly applied the decision of Marshall v. Bernard Place Corp., [2002] OJ No 463 (C.A.), holding that sole discretion clauses of this nature do not confer absolute discretion but rather must be exercised honestly and in good faith. The only members of the Board were Gatti and Doron (the co-CEOs). The application judge found that they would personally benefit from rejecting the respondent's contention that a triggering event had occurred and that their determination that there had not been a triggering event was not made in good faith. Again, that finding was plainly open to the application judge on this record.

(3) No. The respondent did not fail to exercise his options in the required manner. When the respondent's counsel provided notice that he was exercising his options, the required payment was not made. Payment was eventually made, but the appellant argued that there were "strings attached" as the letter enclosing payment specified that if the appellant cashed the cheque, it would be taken to have accepted the respondent's position that all 40,000 shares had vested. The Court of Appeal found that by taking this position, the respondent did not impose an improper condition on the payment. He was simply making clear the consequences of accepting the payment. The remedy of relief from forfeiture would not apply in these circumstances, as it would be inconsistent with the legal basis for the remedy, namely to relieve a party from strict compliance.

(4) No. Gatti had dismissed the respondent and had questioned his integrity. Gatti became a senior officer in the company in which the respondent would have been employed. In these circumstances, it was open to the application judge to conclude that it was reasonable for the respondent not to seek employment with Lexmark.

(5) No. Doron and Gatti, who beneficially owned and controlled the appellant, chose to use Claron Holdings Inc. as a vehicle to satisfy the appellant's obligations under the Option Plan when dealing with its other employees and there was no reason to treat the respondent differently. There was evidence from which the application judge was entitled to infer that Doron and Gatti were the beneficial owners of and controlled Claron Holdings Inc. The application judge did not err in holding that their conduct amounted to oppression under the Ontario Business Corporations Act, R.S.O. 1990, c. B.16.

Waterloo v. C.T., 2017 ONCA 931

[MacFarland, Watt and Benotto JJ.A.]


Jeffrey Boich, for the Children's Aid Society of the Regional Municipality of Waterloo

Julie Kirkpatrick, for C.T.

Katherine Hensel, for J.B.

Catherine Bellinger, Office of the Children's Lawyer, for the child

Susan M. Sack and Kelly Eckert, for Brigitte Gratl

Stan Jenkins and Marie Abraham, for the intervener Legal Aid Ontario

Keywords: Family Law, Crown Wardship, Adoption, Access, Indigenous Children, Openness Hearing, Jurisdiction, Child and Family Services Act, R.S.O. 1990, c. C.11, ss. 37(3), 59(2.1) and 145.1.1 (3), Fresh Evidence, Motherisk Drug Tests, Canadian Charter of Rights and Freedoms, s. 7, Declaratory Relief, Costs Against Counsel


This is the second appeal from the trial decision that a 10-year-old girl be made a Crown ward with no access for the purpose of adoption. The first appeal judge ordered access followed by an openness hearing before him. The appeal judge found trial counsel incompetent and ordered her to pay costs personally. The appeal judge also found that there had been a miscarriage of justice.


(1) Did the appeal judge err in ordering access?

(2) Are the parents entitled to a declaration that their s. 7 Charter rights and the rights of the child have been violated?

(3) Did the appeal judge err in finding ineffective assistance of counsel and ordering costs against counsel personally?


Appeal allowed.


(1) Yes. First, the appeal judge found no overriding and palpable error by the trial judge and therefore erred in varying the "no access" order.

The conclusion that the trial judge made no errors should have ended the appellate inquiry. Instead, the appeal judge went on to consider fresh evidence about access which did not support overturning the trial judge's decision. While the rule for admitting fresh evidence is more flexible in a child protection matter so that evidence providing "an accurate assessment of the present situation" can be considered, the proposed fresh evidence did not in fact provide an accurate assessment of the present or future. Further, there was nothing in the fresh evidence about access that was not before the trial judge.

Second, the statutory requirements of section 59(2.1) of the Child and Family Services Act (the "Act"), prohibit the making of an access order in this case. Section 59(2.1) of the Act sets out a conjunctive test to place Crown wards with access for adoption. This section creates a presumption against access for a Crown ward. The appeal judge failed to identify how the parents had discharged their burden to show that access was "meaningful and beneficial" to the child as required under s. 59(2.1). There was no uncontroverted evidence of the adoptive mother that she would not adopt if there was contact with the parents. This would make the access order statutorily impossible. Further, section 37(3) which sets out the "best interests" provisions of the Act, does not supersede the requirements of s. 59(2.1). While the goal of best interests is never abandoned, neither are the specific and mandatory requirements that must be established before an order for access can be made. These mandatory provisions are applied in the context of the child's best interests.

Finally, the appeal judge erred in partially basing his order of access on the indigenous status of the child. Indigenous children are not automatically exempt from the access provisions for Crown wards under the Act. The legislation makes clear that the circumstances of each individual child must be considered in their entire context. The appeal judge made no mention that the parents or the child were in any way involved in an Indigenous community or its culture. There is no evidence that the parents had any connection to their culture; that the child was ever exposed to the Indigenous culture; or that anyone from the Indigenous community had ever been involved with the parents or the child. The Indigenous heritage of the child was not raised until the appeal stage. While Indigenous membership has expanded to include self-identification, there must still be evidence in relation to the child so a determination can be made as to whether access is beneficial or meaningful to her. The appeal judge erred by ordering access based on the parents' self-identification in the absence of any evidence on this issue specific to the child. In doing so, he against ignored the requirements of s. 59(2.1) of the Act.

Openness Hearing:

The Court of Appeal also found, on a related issue, that the appeal judge had no jurisdiction to order an openness hearing or to seize himself of it. By making the access order, to be followed by the openness hearing, the appeal judge ignored the mandatory process set out in s. 145.1.1 (3) of the Act. This process involves notices by the Society to all parties and timelines before the hearing. Openness should not be confused with access. When a Crown wardship order is granted with access, the parental relationship with the child is preserved. When a Crown ward is sought to be placed for adoption, the goal is permanency and the success of the adoption.

The appeal judge had no jurisdiction to seize himself of the hearing because he was sitting in a non-Family Branch site and was acting in his appellate capacity as a Superior Court judge. The court with jurisdiction to conduct an openness hearing in Kitchener-Waterloo is not the Superior Court by the Ontario Court of Justice.

(2) No. The remedy of a declaratory judgment is "a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs". It can only be granted if it will have practical utility, that is, if it will settle a "live controversy" between the parties. There is no utility to the remedy sought by the parents. There is no issue. There are not two parties. There are no relative interests which fall to be determined and nothing will be settled as a result.

Furthermore, the statement that the justice system has adopted a passive acquiescence of the Motherisk test results is of no relevance on appeal because the trial judge explicitly ignored the Motherisk test results and placed no weight on them in coming to her findings. As well, the evidence of the parents' conduct apart from the test results supported the trial judge's findings.

There is a strong presumption of judicial impartiality and a heavy burden on a party who seeks to rebut this presumption. The test for rebutting the presumption of impartiality is two-fold. First the person considering the alleged bias must be reasonable and the apprehension of bias itself must also be reasonable in the circumstances of the case. A mere suspicion is not enough. The analysis contemplates a hypothetical observer who is informed of all the facts and does not depend upon the views or conclusions of the litigant. The appeal judge erred in only referring to the impressions of counsel and the parents and not the objective observer. He also did not articulate exactly what conduct by the trial judge created the apprehension bias.

(3) Yes. Having found no error on the part of the trial judge, the issue of ineffective assistance was moot. As well, it was not open to the appeal judge to consider counsel's failure to apply for an access order after the trial judgment. The issue before him was the "no access" order at trial. The appeal judge's order on the issue of costs owed by the counsel derived from his conclusion as to competence should be reversed.

Cunningham v. Hutchings, 2017 ONCA 938

[Brown J.A. (In Chambers)]


Bryan Fromstein and A. Fabio Longo, for the moving party, Mildred Cunningham

Nawaz Tahir, for the responding party, Deanna Walsh

Keywords: Civil Procedure, Dismissal for Delay, Extension of Time to Appeal, Laski v. Laski, 2016 ONCA 337

Facts: The Appellant Mildred Cunningham moved for an extension of time to appeal the March 8, 2017 order of Gordon J. dismissing her action (the "Dismissal Order"). The respondent, Deanna Walsh, opposed the motion. Ms. Cunningham was involved in two automobile accidents: one on June 16, 2010; the other on April 29, 2011. She commenced this action on March 30, 2012, seeking damages for injuries she alleges she suffered in those accidents.

Ms. Cunningham was not diligent in moving her action along. The pressure of an August 2014 Status Notice prompted her undergoing examinations for discovery, which took place in early 2015. However, on January 6, 2016, Ms. Cunningham's action was dismissed administratively for delay. She had it restored in September 2016. Before a global mediation scheduled for December 2016 took place, Ms. Cunningham's then counsel moved to get off the record, and the mediation did not occur. By order dated November 16, 2016, Reilly J. ordered Ms. Cunningham's then counsel to be removed as solicitor of record and required Ms. Cunningham to either appoint a new lawyer or serve a notice of intention to act in person. She failed to do so. As a result, Ms. Walsh moved to dismiss the action due to Ms. Cunningham's failure to appoint a lawyer or file a notice of intention to act in person. Ms. Cunningham did not attend on the return of the motion. Gordon J. granted the Dismissal Order. He gave no reasons for the order. Ms. Cunningham then retained new counsel.

Instead of appealing the Dismissal Order, Ms. Cunningham moved to set aside the Dismissal Order on the basis it was made without notice to her. By order dated September 14, 2017, Flynn J. dismissed her motion, concluding the materials for the March 8, 2017 motion had been delivered to Ms. Cunningham's residence. He took the view Ms. Cunningham was arguing the Dismissal Order was wrong, and he therefore found that her remedy was to appeal to the Court of Appeal.

Ms. Cunningham has appealed the order of Flynn J, and all materials needed to perfect that appeal are ready. Ms. Cunningham then brought this motion for an extension of time to file a notice of appeal from the Dismissal Order. If granted, she requests the appeals of the Dismissal Order and the order of Flynn J. proceed together.


(1) Should the appellant be given an extension of time to file a notice of appeal from the Dismissal Order?

Holding: Motion granted.


(1) Yes, but with terms. The applicable principles are those set out by Gillese J.A. in Laski v. Laski, 2016 ONCA 337. There is no doubt Ms. Cunningham formed the intention to challenge the Dismissal Order, but it is not clear she formed an intention to appeal the order within the relevant time period. She did not file an affidavit on this motion, so there is no direct evidence of her intention. Her conduct indicates that within the prescribed appeal period she elected to move to set aside the Dismissal Order. That is not the same as forming an intention to appeal. A motion to set aside or vary an order under rule 37.14 is not a "free kick at the can" which, if it fails, then permits a party to launch an appeal of the order. Such an application of the Rules of Civil Procedure would be antithetical to their objective in securing timely and cost-effective adjudications of cases on their merits. Ms. Cunningham decided to advance technical arguments on a motion to vary instead of taking the direct route and appealing the Dismissal Order on its merits. Accordingly, this factor weighs against her.

The delay of eight months before seeking this extension of time to appeal is not inordinately long. But, as mentioned, Ms. Cunningham's explanation of first bringing a motion to set aside rather than appealing the Dismissal Order hints more at tactical maneuvering than dealing with the merits of the order head-on. This factor is at best neutral.

The responding party cannot point to any actual prejudice in the sense of lost evidence or diminished memory of witnesses. Yet, the responding party is faced with a plaintiff who seems unwilling to proceed with due dispatch and such delay brings with it its own prejudice. This factor is neutral.

On a motion to extend the time to appeal, the court must consider whether the proposed appeal "has so little merit that the court can reasonably deny the moving party his or her important right of appeal". Gordon J. did not give reasons for granting the Dismissal Order. Accordingly, Brown J.A. assumed that the reason Gordon J. dismissed Ms. Cunningham's action was because she failed to appoint a new lawyer or file a notice of intention to act in person as required by the order of Reilly J. Why the dismissal of her action was a proportionate response to that failure cannot be ascertained in the absence of reasons. A party is not obligated to appoint a lawyer to represent her in a civil action, as parties are entitled to represent themselves. Not appointing a new lawyer may signify that the party intends to represent themselves.

The notice of intention to act in person appears designed to ensure the party's address for service and telephone number is known to the court and to the other parties. Here, the responding party knew where Ms. Cunningham resided; she delivered the motion materials seeking the action's dismissal to Ms. Cunningham's residence. Consequently, it is unclear what would have led Gordon J. to adopt the most draconian remedy in the circumstances of this case. It follows that Ms. Cunningham's proposed appeal of the Dismissal Order raises a very arguable issue. This factor weighs strongly in Ms. Cunningham's favour.

Brown J. was persuaded that the justice of the case favours granting Ms. Cunningham an extension of time to appeal. He was not impressed by her lack of diligence in pursuing her claim, but found that her proposed appeal is arguable, and that there would be no real prejudice to the responding party.

The motion was therefore granted, but with terms. First, Ms. Cunningham must perfect this appeal no later than December 15, 2017. Second, the appeal will be heard with her appeal from the order of Flynn J. Finally, although Ms. Cunningham succeeded on this motion, there was no order as to costs.

Holtby v. Draper, 2017 ONCA 932

[Weiler, van Rensburg and Huscroft JJ.A.]


Aaron M. Franks and Michael Zalev, for the appellant

William R. Clayton, for the respondent

Keywords: Family Law, Property Law, Presumption of Joint Ownership, Presumption of Resulting Trust, Family Law Act, R.S.O. 1990, c. F.3, s. 14, Corporations, Shares


This appeal relates to final orders made after trial in matrimonial proceedings between the appellant Cheryl Draper, and the respondent, her former husband, Ken Holtby. The central issue at trial was ownership of property. The trial judge concluded that Ms. Draper's 50% of the common shares in Knapton Farms Ltd. ("Knapton"), a corporation holding a farm and other property, and her 100% interest in 50 acres of land adjoining the farm property ("Lot 8"), were beneficially owned by Mr. Holtby by way of resulting trust.

Legal Issues:

(1) Did the trial judge err in concluding that Mr. Holtby was the beneficial owner of Knapton?

(2) Did the trial judge err in concluding that Mr. Holtby was the beneficial owner of Lot 8?


Appeal allowed in part.


(1) No. Ms. Draper contends that there was no "transfer" of property by Mr. Holtby to her, as both parties participated in the incorporation of Knapton, so the doctrine of resulting trust does not apply. When a gratuitous transfer is made, the transferee has the onus to demonstrate a gift was intended, to rebut the presumption of resulting trust. The transferor's intention at the time of the transfer is the critical consideration. Evidence of intention that arises subsequent to a transfer must be relevant to the intention of the transferor at the time of the transfer.

The undisputed evidence was that Knapton was incorporated to hold Mr. Holtby's farm property and business, it was precipitated by a desire to shelter the farm assets from claims by Mr. Holtby's creditors and Ms. Draper provided only nominal consideration of $100 for the shares she received. The fact that Ms. Draper paid the same amount as Mr. Holtby for her common shares in Knapton is immaterial in this case. The absence of any consideration flowing from Ms. Draper at the time Mr. Holtby entered into the agreement to transfer his farm to the corporation in which she was a co-owner of the shares, is what makes the transfer gratuitous.

The trial judge correctly rejected the argument that there can be no resulting trust applied to Knapton's assets simply because the shares themselves were not transferred directly from Mr. Holtby to Ms. Draper. Although the common shares themselves were not transferred, the farm assets were transferred gratuitously through Knapton. Knapton acted as a conduit through which ownership of the farm's assets was conferred on Ms. Draper, through common shares.

Ms. Draper also asserts that Mr. Holtby's motive in transferring his assets to Knapton, which was to defeat or delay creditors, is a bar to his resulting trust claim. This argument was rejected at trial. While the Court of Appeal agrees with Ms. Draper's submission that the transfer was designed to defeat specific creditors, it disagrees that the trial judge's reasons failed to recognize this fact and its implications for the issue of intent. While the trial judge may have suggested otherwise at one point in his judgment, the trial judge recognized that the transfer was designed to frustrate specific creditors, and the evidence amply supports this conclusion.

(2) Yes. The 50 acres comprising Lot 8 were originally held by Mr. Holtby and his first wife Bonnie in their joint names. In November 1994, Lot 8 was transferred from Mr. Holtby and Bonnie as joint owners to Mr. Holtby and Ms. Draper as joint owners, for consideration of $26,500. Then in May 1996, Mr. Holtby transferred his interest in Lot 8 to Ms. Draper "for natural love and affection", making her the sole registered owner of the property. Ms. Draper contends that the trial judge made a number of errors in concluding that the transfers in relation to Lot 8 were gratuitous. She relies here too on Mr. Holtby's "illegal purpose" of attempting to defeat his creditors as a bar to his claim in respect of the 1996 transfer.

The Court held that there were three errors in the trial judge's analysis:

(i) The trial judge reversed the presumption under s. 14 of the Family Law Act in dealing with the initial Lot 8 transfer. Section 14 provides that the fact that property is held in the name of spouses as joint tenants is proof, "in the absence of evidence to the contrary, that the spouses are intended to own the property as joint tenants." Joint tenancy creates a rebuttable presumption of joint beneficial ownership, subject to a consideration of evidence to the contrary. The parties became joint registered owners of Lot 8, which, once they married in October 1995, created a rebuttable presumption in favour of joint tenancy. As such, Mr. Holtby was not entitled to rely on a presumption of resulting trust, and he had the onus of establishing, by evidence to the contrary, that his intention was not to transfer a beneficial interest to Ms. Draper.

(ii) The trial judge's characterization of the transfer as gratuitous was not supported by the evidence.

(iii) The trial judge erred in his conclusion about the reason for putting Lot 8 into the parties' joint names. Unlike with Knapton, here the motive was not to defeat creditors. Rather, the trial judge accepted that, just as Bonnie was on title for Planning Act purposes, so was Ms. Draper.


Chechui v. Nieman, 2017 ONCA 911

[Strathy C.J.O., Cronk and Pepall JJ.A.]


Earl A. Cherniak, Q.C., Zohar R. Levy and Valois P. Ambrosino, for the appellant

Harold Niman and Chloe van Wirdum, for the respondent

Keywords: Costs, Divided Success


R v. St. Amand, 2017 ONCA 913

[Cronk, Juriansz and Paciocco JJ.A.]


Michael F.W. Bennett, for the appellant

Michelle Campbell, for the respondent

Keywords: Criminal Law, Child Pornography, Sentencing, Delay, Abuse of Process, COPINE scale, Notice of Constitutional Question, Canadian Charter of Rights and Freedoms, s. 7 and s. 11(b), Criminal Code s. 163.1(3), R. v. Anderson, 2014 SCC 41, R. v. Jordan, 2016 SCC 27, R. v. Morin, [1992] 1 S.C.R. 77

R v. T.D.A., 2017 ONCA 910 (Publication Ban)

[Laskin, Feldman and Blair JJ.A.]


Halfyard and B. Vanderbeek, for the appellant

Michael Fawcett, for the respondent

Keywords: Criminal Law, Sexual Assault, Similar Fact Evidence, R. v. Dorsey, 2012 ONCA 185

R v. Thibert, 2017 ONCA 903

[Feldman, Tulloch and Benotto JJ.A.]


Ian McLean, for the appellant

Andreea Baiasu, for the respondent

Keywords: Criminal Law, Sentencing

Ginn (Re), 2017 ONCA 921

[Rouleau, Pepall and Miller JJ.A.]


Anita Szigeti, for the appellant Kristopher Ginn

John Patton, for the Ministry of the Attorney General

Julie Zamprogna Balles, for Southwest Centre for Forensic Mental Health Care

Keywords: Ontario Review Board, Criminal Law, Mental Health Law, Public Safety

R v. Kelly, 2017 ONCA 920

[Strathy C.J.O., Doherty J.A. and McCombs J. (ad hoc)]


Matthew Asma, for the appellant

Delmar Doucette, for the respondent

Keywords: Criminal Law, Manslaughter, Armed Robbery, Directed Verdict, New Trial, Criminal Code, s. 21, R. v. Arcuri, 2001 SCC 54, R. v. Simon, 2010 ONCA 754, R. v. Pickton, 2010 SCC 32

R v. O.N., 2017 ONCA 923 (Publication Ban)

[Watt, Hourigan and Miller JJ.A.]


Janani Shanmuganathan, for the appellant

Jennifer Mckee, for the respondent

Keywords: Criminal Law, Evidence, Inferences

R v. Marahar, 2017 ONCA 930 (Publication Ban)

[Watt, Hourigan and Miller JJ.A.]


Lawrence Ben-Eliezer, for the appellant

Karen Shai, for the respondent

Keywords: Criminal Law, Evidence, Burden of Proof

R v. Nuttall, 2017 ONCA 914

[Feldman, Tulloch and Benotto JJ.A.]


Kevin Wilson, for the appellant

Anya Shahabi, for the respondent

Keywords: Criminal Law, Drug Offences, Expert Evidence, R. v. Graveline, 2006 SCC 16

R v. O'Brien, 2017 ONCA 929

[Feldman, Tulloch and Benotto JJ.A.]


Sam Goldstein, for the appellant

Rebecca De Filippis, for the respondent

Keywords: Criminal Law, Withdrawing Guilty Plea, Highway Traffic Act, Criminal Code, s. 252(1.3) and s. 252(1.2), R. v. Krzehlik, 2015 ONCA 168

R v. Skeete, 2017 ONCA 926 (Publication Ban)

[Watt, van Rensburg and Pardu JJ.A.]


Timothy E. Breen, for the appellant

John Corelli and Kathleen Farrell, for the respondent

Keywords: Criminal Law, First Degree Murder, Evidence, Alibi, Admissibility, Hearsay, Issue Estoppel, Youth Sentencing, Instructions to the Jury, False Evidence, K.G.B. Statement, R. v. Mahalingan, 2008 SCC 63, Lewis v. The Queen, [1979] 2 S.C.R. 821, R. v. Candir, 2009 ONCA 915, R. v. Pasqualino, 2008 ONCA 554, R. v. Hart, 2014 SCC 52, R. v. Bradshaw, 2017 SCC 35, R. v. Frimpong, 2013 ONCA 243, R. v. Simard, 2000 SCC 61, W.(D.): R. v. Parrington (1985), 20 C.C.C. (3d) 184 (Ont. C.A.), R. v. O'Connor (2002), 170 C.C.C. (3d) 365 (Ont. C.A.), R. v. Davison, DeRosie and MacArthur (1974), 20 C.C.C. (2d) 424 (Ont. C.A.)

R v. Sochnyeva, 2017 ONCA 918

[Rouleau, Benotto and Roberts JJ.A.]


No one appearing for the appellant

Roseanna Ansell-Vaughan and Teresa Yang, for the respondent

Keywords: Criminal Law, Appeal Dismissed as Abandoned

R v. Ubeidi, 2017 ONCA 933

[Feldman, Tulloch and Benotto JJ.A.]


Howard Piafsky, for the appellant

Evan Weber, for the respondent

Keywords: Criminal Law, Error of Law, New Trial

R v. W.W.A., 2017 ONCA 928

[Feldman, Tulloch and Benotto JJ.A.]


Joseph S. Wilkinson, for the appellant

Michelle Campbell, for the respondent

Keywords: Criminal Law, Sexual Assault, Ineffective Assistance of Counsel, R. v. B. (G.D.), 2000 SCC 22

R v. L.C., 2017 ONCA 934

[Epstein, Paciocco, and Nordheimer JJ.A.]


Frank Miller, for the appellant

Andrew Cappell, for the respondent

Keywords: Criminal Law, Sexual Assault, Ineffective Assistance of Counsel, Fresh Evidence, R. v. G.D.B., [2000] 1 SCR 520

R v. V.J., 2017 ONCA 924

[Simmons, van Rensburg and Nordheimer JJ.A.]


Courtney Keystone and Domenic Basile, for the appellant

Andreea Baiasu, for the respondent

Keywords: Criminal Law, Sexual Assault, Assault with a Weapon, Uttering Death Threats, Ineffective Assistance of Counsel, R. v. Joanisse (1995), 85 O.A.C. 186, R. v. G.D.B., 2000 SCC 22, R. v. Stark, 2017 ONCA 148, R. v. R.B., 2009 ONCA 524

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.

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Events from this Firm
7 Nov 2019, Conference, Ontario, Canada

On November 7, David T. Ullmann will be a speaker at the CBA Insolvency Law Conference.

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