Canada: Ontario Court Of Appeal Summaries (December 25 – December 29, 2017)

Last Updated: January 4 2018
Article by John Polyzogopoulos

As expected, it was a quiet week at the Court of Appeal, with only two substantive civil decisions released.

In Mazgaj v. Profitable Plots (Canada) Ltd, the Court upheld the motion judge's decision refusing to set aside a default judgment, finding that the appellant had failed to establish that personal and financial difficulties prevented him from defending the action. In the other decision, 790668 Ontario Inc. v. D'Andrea Management Inc., the Court upheld the trial judge's decision in a case involving alleged oppression and the clean hands doctrine.

Wishing everyone a happy, healthy and prosperous New Year!

Civil Decisions
Mazgaj v. Profitable Plots (Canada) Ltd., 2017 ONCA 1020

[Pepall, van Rensburg and Trotter JJ.A.]

Counsel:

E Babayev, for the appellant

H Albrecht, for the respondent

Keywords: Civil Procedure, Default Judgments, Setting Aside, Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194

Facts:

The appellant was personally served with the Statement of Claim on March 5, 2014. He took no steps to defend the action and was noted in default on August 1, 2014. After an undefended trial, the respondent was successful in his claim for fraudulent misrepresentation jointly against the appellant and his co-defendant, Douglas William Chaddock. The appellant was first made aware of this judgment on September 15, 2016, when he received the Notice of Examination compelling his attendance for an examination in aid of execution. A motion to set aside the default judgment was booked for November 10, 2016, but heard on January 12, 2017, after the respondent requested an adjournment. After applying the principles in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, the motion judge refused to set aside the default judgment. The appellant, Daniel Strumos, appeals from the order dismissing his motion to set aside a default judgment that was granted to the respondent, Tadeusz Mazgaj.

Issues:

(1) Did the motion judge err in finding that the appellant consciously decided not to participate in the action?

Holding: Appeal dismissed.

Reasoning:

(1) No. The appellant took the position that he was in difficult personal and financial circumstances that affected his ability to defend the claim at the time it was issued. However, as the motion judge observed, the appellant was not forthcoming in providing information to support his position. The appellant was unresponsive on a number of important issues on his cross-examination. The motion judge found that the appellant failed to establish that stress prevented him from defending the action. She noted that the appellant appeared on a Small Claims court action in 2015.

The motion judge also rejected the appellant's claim that he relied on Chaddock to defend the action. Moreover, as Justice LeMay observed, the appellant and Chaddock were subject to proceedings before the Ontario Securities Commission in relation to the same fraudulent scheme underlying this action. The appellant defended those proceedings.

790668 Ontario Inc. v. D'Andrea Management Inc., 2017 ONCA 1019

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:

William V. Sasso and Nicholas J. Cartel, for the appellants

Jonathan F. Lancaster, for the respondents 1476335 Ontario Inc. and Aldo Rotondi

Harry van Bavel, for the respondent Libro Financial Group

Richard B. Swan and Hartlee Zucker, for the respondents D'Andrea Management Inc. and Rick D'Andrea

Keywords: Corporations, Oppression, Equitable Remedies, Clean Hands Doctrine, Conspiracy, Costs, Rules of Civil Procedure, Rule 49

Facts:

The appellants, 790668 Ontario Inc., are minority shareholders in a family-owned company, D'Andrea Management Inc. ("DMI"). DMI was used as an investment vehicle by the D'Andrea/Frezza family to acquire a commercial property. The respondent, Daney D'Andrea was the director of DMI and oversaw the purchase, development, and management of the property. The appellants alleged that through a series of transactions, Daney diverted interests in the property to his benefit and that these transactions were oppressive to their interests. The appellants also alleged a conspiracy between several of the respondents to allow DMI to default on a mortgage so that a company that Daney controlled could take assignment of the power of sale under the mortgage and sell the property.

The appellants appeal the dismissal of their claims and seek leave to appeal costs. The respondents, 1476335 Ontario Inc. and Aldo Rotondi, cross-appeal a portion of the cost award.

Issues:

  1. Did the trial judge misapply the clean hands doctrine as it applies to the oppression remedy?
  2. Did the trial judge err in finding that the appellants had suffered no damages with respect to the conspiracy claim arising out of the sale of the property?
  3. Did the trial judge err on the amount of costs awarded?

Holding: Appeal dismissed, cross-appeal allowed in part.

Reasoning:

The Court held that the trial judge made findings of fact that were supported by the evidence and that the appellants showed no misapprehension of fact or error of law.

1. No. With respect to the oppression remedy, the trial judge noted that because the oppression remedy is an equitable remedy, it was necessary to consider the conduct of both the defendants and the appellants in the circumstances. She concluded that Peter and Onorio refused to agree to discharge the second mortgage in an attempt to gain leverage over DMI and Daney, in order to renegotiate the original 1994 shareholders' agreement and reduce or eliminate the debt that Peter owed to DMI. The trial judge was entitled to consider and make findings based on the appellants' conduct since the court will not reward claims in equity by those who come with unclean hands.

2. No. With respect to conspiracy, the trial judge concluded that no unlawful conspiracy was made out on the evidence. The alleged conspiracy was an agreement that Libro assist Daney in making DMI default on the mortgage, enabling Libro to proceed by way of power of sale against the property and for Daney to be assigned that power of sale. The trial judge concluded that there had been no proof of damages and the court saw no error in this regard.

3. Regarding the cross appeal, the cross-appellants submitted that the trial judge did not order solicitor and client costs from the date of the offer under the misunderstanding that the offer was not open at the date of trial. The court found that it was open at the date of trial. Accordingly, as the offer made complied with Rule 49, the court allowed the cross-appeal by making an adjustment to the costs payable to the cross-appellants.

Short Civil Decisions

1162251 Ontario Limited v. 833960 Ontario Limited (M-Plan Consulting), 2017 ONCA 1025

[Strathy, C.J.O., Doherty and Roberts JJ.A.]

Counsel:
Ronald G. Slaght and Patrick Healy, for the appellant

Sean Zeitz, for the respondent

Keywords: Endorsement, Costs, Appeal Dismissed

York Condominium Corporation No. 366 v. Li, 2017 ONCA 1021

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:
Ronald Lachmansingh and Tyler Murray, for the appellant

Antoni Casalinuovo, for the respondent

Keywords: Endorsement, Appeal Dismissed

Criminal and Ontario Review Board Decisions

R. v. Evariste, 2017 ONCA 1023

[Sharpe, Roberts and Fairburn JJ.A.]

Counsel:
Breana Vandebeek, for the appellant

Michael Perlin and Jennifer Epstein, for the respondent

Keywords: Criminal Law, Dangerous Driving, Obstruction of Justice, Evidence, Jury Charges, Appeal Dismissed

R. v. Frickey, 2017 ONCA 1024

[Sharpe, Watt and Roberts JJ.A.]

Counsel:
Erec Rolfe, for the appellant

Jennifer McKee, for the respondent

Keywords: Criminal Law, Dangerous Driving, Sentencing, Driving Prohibition, Appeal Dismissed

Esgin (Re), 2017 ONCA 1022

[Sharpe, Watt and Roberts JJ.A.]

Counsel:
Anita Szigeti, for the appellant, Burhan Esgin

Andrew Cappell, for the respondent, the Attorney General of Ontario

Gavin MacKenzie, for the respondent, the Person in Charge of the Centre for Addiction and Mental Health

Keywords: Ontario Review Board, Conditional Discharges, Detention Orders, Appeal Dismissed

Muthulingam (Re), 2017 ONCA 1026

[Sharpe, Watt and Roberts JJ.A.]

Counsel:
Jonathan Fernandes, for the appellant, Ramanan Muthulingam

Susan Magotiaux, for the respondent, the Attorney General of Ontario

Logan Crowell, for the respondent, Ontario Shores

Keywords: Ontario Review Board, Threat to Public Safety, Evidence, Evidence Act, R.S.O. 1990, c. E.23, ss. 14, R. v. Albright¸ [1987] 2 S.C.R. 383, Appeal Dismissed

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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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Authors
John Polyzogopoulos
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