Canada: Ontario Court Of Appeal Summaries (September 4 – 7, 2018)

Last Updated: September 12 2018
Article by John Polyzogopoulos

Good afternoon.

With this edition of our summaries of the civil decisions of the Court of Appeal for Ontario, I am pleased to be launching our firm's newly redesigned blog, now known as "Blaneys Appeals".

As you will see, our blog features a brand new look, more information and a fully responsive layout for all platforms (desktop, laptop, tablet or smartphone). All of our content dating back to the blog's inception in June 2014 has been imported into our new site. We hope you will find the new blog easier to navigate and that you will be able to search and find previously summarized decisions more quickly.

Turning then to our summaries for the week, I would first like to congratulate our partner, Colin Empke, on his successful appeal on behalf of our client in Nasr Hospitality Services Inc. v Intact Insurance. In yet another decision as to the meaning of "appropriate means" under subsection 5(a)(iv) of the Limitations Act, 2002, the Court reiterated that settlement negotiations between parties do not toll the limitation period within the meaning of that subsection. The Court set aside the motion judge's decision and dismissed the action against our client as being out of time.

This week there was a tale of two class actions with opposite outcomes.

In Fehr v Sun Life, a class action, the plaintiffs sued Sun Life for misrepresentation and breach of contract in relation to universal life insurance policies issued by its predecessor, Met Life. The gist of the action is that the premiums of these policies were supposed to be self-funded from investments earned on the investment portion of the amounts paid for the policies. The policies were sold in the old days of high interest rates. When interest rates declined in the late 1990s and into the 2000s, the investment returns were not sufficient to fund the premiums and the insurer attempted to charge further premiums and administrative fees. This led to complaints by policyholders, who said they had been misled by salespeople as to how premiums would be funded. They also argued that the policy wording did not allow the insurers to impose the extra charges. Justice Perrell not only refused to certify the claim as a class proceeding, but he also dismissed the claims outright by way of summary judgment as being statute-barred. On appeal, however, the Court set aside the dismissal of the action and certified the breach of contract claim as a class proceeding. In an interesting twist, while the misrepresentation claims were not certified because the facts relating to those claims were determined to be unique to each member of the class and therefore not conducive to being determined as a common issue, that was not the end of the story regarding misrepresentation. The Court did certify as a common issue whether there were any misrepresentations made by Sun Life generally as to its rights under the policies that might support the plaintiffs' plea of fraudulent concealment in order to negate Sun Life's reliance on a limitation period defence. After almost a decade of litigation, this decision appears to pave the way for the matter to finally proceed on the merits.

Conversely, in Lavender v Miller Bernstein LLP, a claim by shareholders in a public company against its auditors, the court below granted summary judgment in favour of the class plaintiffs. However, the Court of Appeal not only set aside the summary judgment, but granted summary judgment to the auditors and dismissed the action against them. Notwithstanding that auditors have been found liable to shareholders in other cases (most recently in Supreme Court decision in Livent), the Court indicated that the finding of a duty of care of auditors to shareholders is not automatic. Courts must still conduct an Anns/Cooper analysis to determine whether there is proximity and a duty of care in light of the specific nature of the auditor's undertaking and the reliance by the plaintiff. In this case, the Court found that the auditors owed no duty of care to the shareholders in respect of the failure to properly audit OSC filings made by the corporation.

In Solar Power Network Inc. v. ClearFlow Energy Finance Corp., the Court of Appeal considered whether certain fees chargeable under loan agreements constituted interest and, if so, whether those fees could not be collected because they ran afoul of section 4 of the Interest Act. The Court found that the Interest Act had not been breached and set aside the motion judge's decision to the contrary. This is mandatory reading for all lending lawyers who handle sophisticated loan transactions.

Finally, while we very rarely summarize criminal decisions, we have summarized and turn your attention to the Court's decision in R. v. Vassel. The Court in this case provides a very useful refresher on basic principles of the law of evidence applicable in all matters before the courts. The decision canvasses the tests of relevance, materiality and admissibility generally, as well as the admissibility of expert opinion evidence and the Rule in Browne v Dunn.

Other topics covered this week included a guardianship application and appellate jurisdiction.

I want to thank all of our readers for their ongoing support of this blog, and look forward to receiving any feedback anyone may have on our new format.

Wishing everyone an enjoyable weekend.

Ontario Court Of Appeal Summaries (September 4 – 7, 2018)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.

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John Polyzogopoulos
Events from this Firm
29 Sep 2018, Speaking Engagement, Toronto, Canada

Blaneys Partner Diane Brooks will present her paper, 'Dealing with the Issues that Can Arise During the Ongoing Operation of a Private Company' at The Law Society of Ontario's Practice Gems: Essentials of the Privately Held Company forum on September 29.

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