Canada: Ontario Court Of Appeal Summaries (July 22 – 26, 2019)

Blaney's Appeals
Last Updated: August 1 2019
Article by John Polyzogopoulos

Following are this week's summaries of the civil decisions of the Court of Appeal for Ontario.

Topics covered this week included several family law decisions, international sale of goods and striking pleadings.

The summer is now almost half over already, so I hope everyone finds some time to enjoy it before it is too late.

CIVIL DECISIONS

Farah v. Mohamed, 2019 ONCA 0620

[Hoy A.C.J.O., Trotter and Jamal JJ.A.]

Counsel:

J. Omward, for the appellant

E. M. Young, for the respondent

FACTS:

The father appeals from the dismissal of his appeal from four family law orders relating to the custody and access of the three children of the marriage.

In the proceedings before Jones J., the father consented to an order awarding custody of the children to the mother, with unsupervised access by the father. However, after the mother brought a motion, the order was amended by Murray J. that access by the father be supervised. The father brought a motion to change two and half years later. On that motion, Finlayson J. essentially maintained the Murray J. order. Both Murray J. and Finlayson J. were concerned with the father's conduct in bad-mouthing the mother in the presence of the children, and with the sporadic nature of the father's visits with the children.

When the appeal from these orders was scheduled, the father sought and was granted an adjournment. The father was told to order the transcripts from all four proceedings. However, when the re-scheduled appeal was to be argued, the father had failed to obtain all the required transcripts. Counsel for the father told the appeal judge that circumstances beyond the father's control prevented had him from acquiring the missing transcripts. Counsel for the father requested a second adjournment, however the father insisted on proceeding in the absence of the missing transcripts. The appeal judge ruled that the father was not seeking an adjournment and that the father had not provided the full transcripts as was requested. As a result, a complete record for the appeal had not been advanced or completed. Therefore, based on the material before the appeal judge, she held that the appeal had no merit and should be dismissed.

The father appealed on the basis that he was denied procedural fairness and that the appeal should have been adjourned so that transcripts could be obtained. Further, he stated that the reasons of the appeal judge do not explain why she considered the appeal to have no merit.

ISSUES:

Whether any of the following four orders should be set aside:

(1) Interim order of Scully J. (December 22, 2010);

(2) Interim and final consent order of Jones J. (December 20, 2011);

(3) Final order of Murray J. (July 17, 2015); and

(4) Order of Finlayson J. denying the father's motion to change the order of Murray J. (January 15, 2018).

HOLDING: Appeal dismissed.

REASONING:

The Court held that the father's appeal to dismiss the four orders should be dismissed. It was open to the appeal judge to adjourn the appeal once again, and it appeared that she was prepared to do so. However, the father wished to proceed without complying with the appeal judge's previous direction to obtain transcripts. Therefore, it was not now open to the father to argue that the appeal judge should have granted a further adjournment to give him another opportunity to obtain these materials.

The father also asserted that the appeal judge failed to give sufficient reasons for her decision to dismiss the appeal. However, as the appeal judge explained, based on the materials before her, the appeal had no merit. The Court held that there was no basis to disturb the custodial/access arrangements reflected in the order of Murray J. and confirmed by Finlayson J.


Global Fund Holdings, Corp. v. Hines, 2019 ONCA 0621

[Hoy A.C.J.O., Trotter and Jamal JJ.A.]

Counsel:

E. Moore, for the appellant

L. Corne, for the respondent

FACTS:

This appeal arises from an order enforcing a Settlement Agreement in the amount of US$200,000. In the underlying action, Global Fund Holdings, Corp. ("Global") sued Kenneth Hines ("Hines"), alleging that, on the basis of Hines' fraud and false pretences, Global advanced US$500,000 to him in order to purchase shares in a Panamanian company. It was an alleged sham. After the parties commenced settlement negotiations, Hines learned that Global had caused criminal charges to be brought against him in Panama. The prosecutor in Panama sent a detention order (equivalent to an arrest warrant in Canada) to the National Police of Panama and the National Migration Service of Panama. As a result of these charges, the following condition was included in the Settlement Agreement:

Upon receipt of a written confirmation from the prosecutor in Panama, which confirms that the desist of the pretension of the punitive claim has been duly filed at the Panama Penalty Court of Law and that all charges against Hines [...] are dismissed or withdrawn, Hines hereby irrevocably instructs PDC [LLP] to pay the sum of US$200,000 to Global.

Counsel for Global provided documentation to Hines' counsel from the Panama Court to prove that the criminal action against Hines was "declared as extinguished." Hines insisted on "written confirmation from the prosecutor in Panama". On July 30, 2018, they were provided with written confirmation from the Prosecutor of Panama that no criminal charges were being proceeded with against Hines. Global demanded payment of the US$200,000. Hines resisted, however, this time because of the existence of the outstanding detention order/arrest warrant. According to evidence filed on the motion, the declaration of the Panama Court had not been sent to the National Police of Panama or the National Migration Service of Panama. Consequently, Hines was at risk of arrest if he entered Panama. On this basis, he claimed that the condition in the Settlement Agreement had not been satisfied.

The motion judge concluded that the condition was satisfied when the prosecutor in Panama provided written confirmation that the charges against Hines were at an end. The motion judge made an order enforcing the Settlement Agreement. He declined to exercise any residual discretion not to enforce the Settlement Agreement because of the outstanding detention order/arrest warrant.

ISSUES:

(1) Did the motion judge misapprehend the evidence, thereby giving rise to a palpable and overriding error in his interpretation of the Settlement Agreement?

(2) Is the appellant permitted to bring a motion to adduce fresh evidence?

HOLDING:

Appeal dismissed. Application to adduce fresh evidence dismissed.

REASONING:

(1) No. The Court held that the motion judge committed no error in interpreting the Settlement Agreement in the manner that he did. His decision was entitled to deference on appeal.

When Hines entered into the Settlement Agreement, he was represented by counsel, both in Canada and Panama. The existence of the detention order/arrest warrant was known at the time. It was open to Hines to insist that the Settlement Agreement specifically addressed the detention order/arrest warrant. He did not.

(2) No. Some of the purported fresh evidence was available at the time that the motion judge made his decision. It could have been obtained with due diligence. For this reason, it did not meet the test for admitting fresh evidence.

The rest of the purported fresh evidence consisted of letters from the Panama Court to the National Police of Panama or the National Migration Service of Panama informing those agencies of the termination of the proceedings against Hines that were sent after the motion judge made his decision. In this sense, the evidence might be considered "fresh" because it did not exist at the time of the motion. However, this aspect of the fresh evidence application failed because the evidence did not bear upon a "decisive or potentially decisive issue" on the motion.


Potis Holdings Ltd. v. The Law Society of Upper Canada, 2019 ONCA 0618

[Hoy A.C.J.O., Trotter and Jamal JJ.A.]

Counsel:

M. A. Munro, for the appellants

A. T. Antoniou and F. C. Caruso, for the respondent

FACTS:

The appellants' action is premised on the Law Society's alleged practice of requiring or permitting lawyers facing potential negligence claims to provide a copy of the relevant client file to the Lawyers' Professional Indemnity Company ("LPIC") to allow it to address the anticipated professional indemnity claim. The appellants say that this practice gives rise to a variety of civil causes of action against the Law Society.

Neither the statement of claim nor the amended statement of claim pleaded that the respondent engaged in any bad faith conduct. After filing its statement of defence, the respondent moved to strike the appellants' statement of claim as disclosing no reasonable cause of action. The appellants argued that the respondent was required to obtain leave before bringing its motion because it had filed its statement of defence.

The motion judge found that s. 9 of the Law Society Act conferred upon the Law Society a statutory immunity from claims for damages for actions taken in good faith pursuant to its statutory mandate to regulate the legal profession or the provision of legal services. The motion judge also held that the appellants' "slim allegations" in their pleadings did not include any claim of bad faith against the Law Society, and therefore struck out the pleadings as disclosing no reasonable cause of action, without leave to amend.

The appellants appealed the order of the motion judge striking out their statement of claim and amended statement of claim as against the respondent as disclosing no reasonable cause of action.

ISSUES:

1. Did the motion judge err in hearing the Law Society's motion to strike after the Law Society had delivered its statement of defence?

2. Did the motion judge err in striking out the statement of claim and amended statement of claim as against the Law Society?

3. Did the motion judge err in refusing to grant leave to amend?

HOLDING:

Appeal dismissed.

REASONING:

(1) No. The Court held that the motion judge did not err in hearing the motion to strike. While generally a defendant should move to strike a claim as disclosing no reasonable cause of action before filing a statement of defence, in some instances a defendant may bring such a motion without leave even after delivering a defence. One such instance is where it is obvious from the defendant's pleading that the defendant takes issue with the sufficiency of the plaintiff's claim. The Court held that was the case here.

The respondent's statement of defence pleaded the very deficiencies that were relied on in the motion to strike. Additionally, the motion judge's determination to proceed was consistent with Rule 1.04 of the Rules of Civil Procedure that the rules "be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits."

(2) No. The Court held that the motion judge did not err in striking out the appellants' pleadings as disclosing no reasonable cause of action. The appellants contended that they were not required to plead bad faith to pre-emptively defeat the application of s.9 of the Law Society Act, as good faith is a statutory defence to be pleaded by the respondent. The Court did not agree with this submission. While a claim against the respondent alleging that it engaged in bad faith conduct may not be subject to the immunity provided by s. 9 of the Law Society Act, such a claim must still be pleaded with precision and with full particulars, as required by the Rules of Civil Procedure. The Court held that in this case, neither the statement of claim nor the amended statement of claim alleged that the respondent engaged in any bad faith conduct. None of the causes of action pleaded by the appellants – namely, breach of confidence, confidentiality, trust, privacy and solicitor-client privilege, as well as conversion and trespass to chattels – involved bad faith as an essential element. Accordingly, there was no viable claim pleaded against the respondent.

Additionally, the appellants contended that the defence of good faith should not be determined on a motion to strike, as good faith is a question of fact requiring an evidentiary record. The Court did not accept this submission. Since the appellants' pleadings did not allege any bad faith conduct by the respondent, there was no basis for conducting an evidentiary hearing to determine that issue.

(3) No. The Court held that the motion judge was entitled to refuse leave to amend. Here, the motion judge exercised his discretion to refuse leave to amend as the appellants had already twice pleaded no allegations of bad faith against the respondent. His decision to refuse to afford a third opportunity to fashion a tenable plea was reasonable in the circumstances. The motion judge also did not err in law, given the Court's finding that, absent allegations of bad faith, the respondent was protected by the statutory immunity in s. 9 of the Law Society Act. Accordingly, there were no amendments that the appellants could have made that might have saved their claim.


Petersoo v. Petersoo, 2019 ONCA 0624

[Tulloch, Benotto and Huscroft JJ.A.]

Counsel:

K. Normandin and J. Hunt-Jones, for the appellant

M. Stangarone and S. Kirby, for the respondent

FACTS:

The parties retained an arbitrator to conduct a parenting plan review provided for in their separation agreement. Prior to the arbitration, the appellant served an offer to settle including a term that she be entitled to move to Guelph so the children could attend a school adapted to their special needs. When Opening Statements were exchanged, the appellant's statement also indicated that she would be seeking an order allowing her to move to Guelph so the children could attend this school.

The arbitration began in July 2017, and lasted for eight days. At no point during the hearing did the respondent seek an adjournment in response to the mother having raised the issue of the move to Guelph. The arbitrator correctly set out the law on mobility and concluded that the children should move to Guelph with the appellant to attend the aforementioned school.

Following the award, the appellant and children made the move to Guelph.

No motion to stay the award was brought by the respondent.

The respondent later appealed the award. The appeal judge overturned the arbitral award on the basis that there was a fundamental procedural unfairness to the process causing a denial of natural justice. This unfairness arose, she found, because the respondent did not receive adequate notice of the appellant's intent to move. Specifically, the appeal judge found that the arbitrator did not comply with s. 19(2) of the Arbitration Act, 1991, S.O. 1991, c. 17, which provides that both sides shall be treated equally and fairly and be provided with an opportunity to present their case. The appeal judge set aside the arbitrator's award and directed the parties to attend another arbitration before a different arbitrator.

ISSUES:

Did the appeal judge err in law by finding that the arbitrator violated principles of procedural fairness?

HOLDING:

Appeal allowed.

REASONING:

Yes. The Court began its analysis by stating the principle articulated in Patton-Casse v. Casse, 2012 ONCA 709, that the decision of an arbitrator, particularly in child related matters, is entitled to significant deference by the courts. Although the family law of Ontario must be applied, the procedures on an arbitration are not meant to mirror those of the court.

Ultimately, the Court found that the appeal judge erred in law by finding a violation of s. 19 of the Arbitration Act for four reasons. First, the Court found that the proceedings were, in fact, fair. During the eight day hearing, the respondent was never impeded from presenting his case. At no point did the respondent request a further assessment to challenge the evidence that the school in question would benefit the children. Having received the evidence of both parties, the arbitrator ultimately found in the appellant's favour. The proceedings were not rendered unfair simply because the arbitrator found in favour of the appellant on this issue.

Second, the Court found that the respondent acquiesced in the late notice. Instead of raising the issue and seeking an adjournment, he proceeded with the hearing, and only raised an objection when the result was not to his liking. The Court emphasized that as a general rule, an appellate court will not permit an issue to be raised for the first time on appeal. This rule is grounded in society's interests in finality, according to the principle articulated in R. v. Reid, 2016 ONCA 524, leave to appeal refused [2016] S.C.C.A. No. 432. Further, this principle is particularly important when the lives of children are impacted by the proceedings.

Third, the Court found that the record left no doubt that the children were in crisis. By relying exclusively on the short notice given to the father to set aside the award, the appeal judge had no regard for the children's best interests. The procedural rights of a parent cannot be invoked long after a hearing has been completed in order to override the welfare of children in crisis.

Finally, the appeal judge's interpretation of s. 19 of the Arbitration Act would place a new and unreasonable burden on an arbitrator in family law proceedings. The appeal judge placed an obligation on the arbitrator to depart from his role as independent adjudicator and move to the role of advocate. This would compromise an arbitrator's independence and potentially breach his duty of impartiality. Section 19 does not require the arbitrator to descend into the arena and become an advocate or advance a party's case.


Khan v. Ramsingh, 2019 ONCA 0623

[Hoy A.C.J.O., Trotter and Jamal JJ.A.]

Counsel:

I. van Weert, for the appellant

No one appearing for the respondent

FACTS:

The father and mother separated in December 2014. They are the parents of two children, an 18 year old daughter and a 14 year old autistic son. The father continued living with the mother and children after separation until he was arrested and incarcerated in 2013 for narcotic offences and possession of a firearm. In September 2016, the mother commenced an application for sole custody of the children, retroactive child support and s.7 expenses since the father was arrested, and an order requiring any access by the father to the children to be supervised, and restraining the father from coming within 500 meters of her and the children. The father had difficulty in obtaining a Legal Aid certificate, and, as a result, difficulty in retaining a lawyer to respond to the mother's Application.

In March 2017, the case management judge made a temporary order on consent that the mother would have sole custody of the children; restricting the father's access to the children to telephone access and to commence only after the father provided stipulated disclosure about his criminal convictions; and that the father serve and file stipulated documents, including a current sworn financial statement, at least seven days before the next court date. Without the parties' consent, she also ordered that the father pay child support based on an imputed minimum wage, serve and file his Answer by April 18, 2017, on a peremptory basis, and pay the mother costs in the amount of $2,500.

At a case conference held on July 12, 2017, the case management judge noted that the father had not yet paid the costs that she had ordered and that the father was in default, because he had not filed his Answer as required by her order of March 16, 2017. In her endorsement, she noted that the mother might ask for final orders at the next court date and ordered the father to pay the mother a further $800 in costs.

On the next court date, on September 20, 2017, the case management judge noted that both costs orders remained outstanding and the father had still not filed his Answer. She also noted that the father had been represented by a lawyer since at least March 16, 2017. She denied the father's request for a further extension. She also ordered that the father "shall not bring a Motion to Change without leave obtained in advance on a Form 14B motion, maximum 2 pages in support not to be served on the other side unless the court orders."

The father paid the outstanding costs orders and sought leave to bring a Motion to Change supported by a two-page affidavit, dated April 23, 2018. In the affidavit the father explained how he had to borrow money to pay the costs ordered. He provided that he would like there to be a hearing on the merits with respect to the son's care. The son was severely autistic and his skills had been regressing. The father was unemployed and available to give the son more attention and care than the mother. The father also wanted a hearing regarding whether income should be imputed to him as he could not pay the support ordered.

On April 27, 2018, the case management judge dismissed the father's motion for leave to which the father appealed the denial of leave to bring a Motion to Change. The Superior Court of Justice appeal court judge dismissed the appeal.

ISSUES:

(1) Did the appeal court judge err in deferring to the case management judge's decision?

HOLDING:

Appeal allowed.

REASONING:

Yes. The Court held that the appeal judge erred in deferring to the case management judge's decision in the face of an almost complete absence of evidence about the child's bests interests. The case management judge erred in denying the father leave to bring a Motion to Change after he had cured his default and based only on an affidavit that she had limited to two pages. Appellate courts should give considerable deference to first instance decisions relating to custody and access. The problem here, however, is that as matters evolved, custody and access orders were made for this child in the face of almost a complete absence of written evidence upon which to ensure that the orders were, and continued to be, in the child's best interests. In this case, only the mother's Application and presumably her Form 35.1 Affidavit in Support of Claim for Custody or Access had ever been considered by the court in making what would amount to a final order about custody and access. Additionally, given the two-page limit placed on the father's request for leave to bring a motion to change, the Court held it was almost impossible to make even a prima facie case that a different order was needed in the child's best interests.


Rados v. Rados, 2019 ONCA 0627

[Hoy A.C.J.O., Trotter and Jamal JJ.A.]

Counsel:

N. J. Cartel and G. Brandys, for the appellant

A. Franks and A. Prewer, for the respondent

FACTS:

The appellant appeals from orders relating to the division of net family property and spousal support. The parties were married in 1995 and separated in 2012.

In addition to working as a pilot, the appellant was involved in a substantial condominium development project. Between 1994 and 1996, the appellant bought the land for the project. In 2000, he incorporated a company, of which he was the sole officer and shareholder. The corporation became the owner of the land and built two buildings as part of the project.

The appellant testified that the project cost over $8,000,000 to complete. He was initially unable to obtain outside financing, so his father stepped in to provide a large portion of the funding. The project was completed in 2007. In 2008, the appellant signed a promissory note, on behalf of the numbered company, in favour of his parents in the amount of $5,000,000 as a demand loan.

The appellant testified that the funding was always intended to be a loan, not a gift. The respondent acknowledged that the appellant's father had funded the project, but she was certain that they were not expected to repay him.

The trial judge accepted that the appellant's father had funded the project and that a $5,000,000 corporate debt existed on the date of separation. The trial judge also reviewed the case law permitting the court, when calculating net family property, to discount a debt owing by a spouse to reflect the likelihood that the spouse would ever be called to repay the debt (Salamon v. Salamon, [1997] O.J. No. 852 (Gen. Div.); Poole v. Poole (2001), 16 R.F.L. (5th) 397 (Ont. S.C.); and Cade v. Rothstein, 2002 CanLII 2811 (Ont. S.C.), aff'd (2004), 181 O.A.C. 226 (C.A.).

The trial judge considered 33 specific factors, and found that the prospect of a call for repayment was "extremely unlikely". Accordingly, the trial judge found that the debt was a contingent liability that had to be "significantly discounted". The trial judge proceeded to exercise her discretion to discount the promissory note by 90% as a "true reflection of the practical reality".

In addition to this, the trial judge also ordered indefinite spousal support based on the circumstances of the case, including the age of the parties, the duration of the marriage, and the respondent's long standing health issues that have impacted her ability to maintain employment.

ISSUES:

(1) Did the trial judge err in discounting the promissory note by 90%?

(2) Did the trial judge err in ordering indefinite spousal support without imposing periodic reviews or an end date?

HOLDING:

Appeal dismissed.

REASONING:

(1) Did the trial judge err in discounting the promissory note by 90%?

No. The Court began its analysis by noting that substantial deference is owed to the trial judge's determination of fact and mixed fact and law, especially in family law cases. The Court will interfere "only where the fact-related aspects of the judge's decision in a family law case exceeds a generous ambit within which reasonable disagreement is possible and is plainly wrong" (Johanson v. Hinde, 2016 ONCA 430).

The Court continued that the case law relied on by the trial judge was consistent with the Court's guidance in Zavarella v. Zavarella, 2013 ONCA 720, that the debt is to be valued based on the reasonable likelihood that it will ever be repaid. The trial judge's application of that law to the facts is therefore owed substantial deference.

The appellant submitted that the trial judge erred in piercing the corporate veil in respect of the appellant's numbered company. However, the Court rejected this submission, noting that the trial judge analyzed the role of the appellant and his corporation separately. This evidenced the fact that the trial judge respected the corporation's separate legal personality from the appellant.

(2) Did the trial judge err in ordering indefinite spousal support without imposing periodic reviews or an end date?

No. At trial, the appellant did not make any submissions on the claim for indefinite spousal support. However, even if it were open to the appellant to take this position for the first time on appeal, the Court saw no basis to interfere. The Court noted that the trial judge exercised her discretion having regard to the age of the parties, the duration of the marriage, the respondent's health issues that have impacted her employment, and the compensatory nature of spousal support. The Court saw this exercise of discretion to be reasonable in the circumstances.


1944949 Ontario Inc. (OMG ON THE PARK) v. 2513000 Ontario Ltd., 2019 ONCA 0628

[Feldman, Roberts and Fairburn JJ.A.]

Counsel:

S. Siddiqui, for the appellant

P. Ingrassia, for the respondent

FACTS:

The respondent tenant operated a bakery and café out of premises leased from the appellant landlord. When the premises' HVAC system broke down in December 2017, a dispute arose between the parties as to the appellant landlord's obligations under the lease to repair the system.

The issuance of the respondent's application on March 26, 2018 was the culmination of several fractious months of increasingly heated dealings between the parties. In the almost three months leading up to the hearing of the application, the appellant never objected to this matter proceeding by way of application. Rather, the parties agreed on a timetable for the delivery of materials, including affidavits and facta, as well as the conduct of cross-examinations. Particularly relevant were the deadlines for the service and filing of the application record, including affidavit materials, and the conduct of cross-examinations, including the delivery of any answers to undertakings arising out of the latter, as well as the delivery of facta. There was no provision allowing for the delivery of any further affidavit materials following the completion of the cross-examinations.

The parties complied with the deadlines for the filing of responding and reply affidavits by April 20, 2018 and April 30, 2018, respectively, and the completion of the cross-examinations. The respondent filed the affidavit of its principal sworn March 26, 2018. In response, the appellant filed the affidavit of its property manager sworn April 20, 2018. The respondent filed its April 30, 2018 reply affidavit. It filed its factum, authorities and compendium on schedule but the appellant did not. Following the May 21, 2018 cross-examination deadline, the respondent filed their June 6, 2018 supplementary affidavit.

The Hamilton court's motion administrative protocol notes that where an application is scheduled for a specified week, as was the case here, the trial coordinator will contact parties or their counsel to advise them when the matter will be argued. On June 19, 2018 the trial co-ordinator advised the parties that the hearing of the application would take place the next day. On the day of the hearing, the appellant's trial counsel attended late and did not advise the court that he would be late. He asked the court to accept a motion record to adjourn the application. He also sought to file a supplementary affidavit sworn June 19, 2018, in response to the respondent's supplementary affidavit, as well as a factum, a compendium, and a brief of authorities. The application judge denied both of these requests.

After hearing arguments from both sides, the application judge concluded that the appellant was obligated to repair and maintain the HVAC system and that it had fundamentally breached the lease by failing to do so. He also found that this fundamental breach invariably led to a breach of the respondent's quiet enjoyment of the premises. The application judge ordered the termination of the lease and a trial, by way of an action, as to the damages suffered by the respondent. The appellant landlord appealed, saying that the application judge's order should be set aside and remitted for re-hearing.

ISSUES:

(1) Was the hearing of the application procedurally unfair and did it result in prejudice to the appellant?

(2) Did the application judge err in his interpretation of the lease?

(3) Did the application judge err in awarding substantial indemnity costs against the appellant?

HOLDING:

Appeal allowed in part.

REASONING:

(1) No. The appellant argued that it suffered procedural unfairness because the application judge erroneously refused to hear the appellant's motion to adjourn the application or to accept the affidavit materials prepared in response to the respondent's supplementary affidavit. The respondent maintained that no procedural unfairness occurred: there was no error in the application judge's exercise of his discretion not to adjourn the application or admit the appellant's supplementary materials.

Parties to a proceeding are entitled to a fair hearing which requires that all parties are given a reasonable opportunity to be heard. A reasonable opportunity must be meaningful. It is not, however, unlimited. In exercising its wide discretion to control the process before it, the court must balance the parties' respective interests in a full and fair hearing. This aligns with the court's obligation to ensure the just, most expeditious and least expensive determination of every proceeding.

The Court found no error in the application judge's denial of the requested adjournment. As the application judge correctly observed, the appellant had adequate time to respond or object to the respondent's late service of materials. Despite having these materials for several days and knowing that the application could be called for hearing any day during the week it was scheduled, the appellant did not request an adjournment until the eve of the hearing nor seek to file any responding materials until the day of the hearing. The application judge's refusal of the adjournment was reasonable and in keeping with his duty to fairly manage the proceedings in accordance with the parties' reasonable expectations that the application would proceed in accordance with the agreed upon timetable.

With respect to whether the appellant was prejudiced by the application judge's failure to admit the appellant's supplementary affidavit to respond to the respondent's late-delivered supplementary affidavit, the Court did find that the application judge's approach was flawed. Rather than turning his mind to whether leave should be granted under r. 39.02(2) of the Rules of Civil Procedure (the "Rules") to admit the parties' supplementary affidavits, he rejected the appellant's but admitted the respondent's supplementary affidavit without addressing whether leave should be granted to permit the respondent to file it following cross-examinations in admitted contravention of r. 39.02(2), and in breach of the court-ordered timetable. That being said, this flawed approach did not taint the application judge's interpretation of the lease or finding of the appellant's breach.

Rule 39.02(2) of the Rules of Civil Procedure prohibits the use at a hearing of an affidavit delivered after cross-examinations without leave of the court or the consent of the parties. A court must undertake a flexible, contextual approach when considering the following criteria to determine whether a party should be granted leave to respond to a matter raised on cross-examination:

1) Is the evidence relevant?

2) Does the evidence respond to a matter raised on the cross-examination, not necessarily raised for the first time?

3) Would granting leave to file the evidence result in non-compensable prejudice that could not be addressed by imposing costs, terms, or an adjournment?

4) Did the moving party provide a reasonable or adequate explanation for why the evidence was not included at the outset?

It did not appear the application judge considered these factors or adopted a "flexible, contextual approach". He made no reference to the provisions of r. 39.02 or advert to its leave requirement. He should have done so. Rather, he focussed principally on the late submission of the appellant's materials. Despite this, the Court found that the application judge's exclusion of the appellant's supplementary affidavit and the inclusion of the respondent's supplementary affidavit did not result in an unfair hearing with an incomplete record that caused prejudice to the appellant. There was nothing new in the respondent's supplementary affidavit that made any difference to the result of the substantive lease issues to be determined on the application, nor would the appellant's supplementary affidavit have affected the outcome. Moreover, it does not appear that the application judge relied in any material way upon the contents of the respondent's supplementary affidavit to reach his interpretation of the lease or his finding of the appellant's breach.

(2) No. The appellant submitted that the application judge misconstrued the terms of the lease: it was the respondent's obligation under the lease to find someone to carry out any repairs to the HVAC system; the appellant fulfilled its lease obligations by paying for any repairs. The Court did not give any effect to this argument and found that the application judge's interpretation of the non-standard form provisions of the lease was reasonable. Absent a palpable or overriding error or an extricable error of law, the application judge's interpretation of the lease is subject to deference on appeal.

(3) Yes. The application judge relied on the unchallenged evidence as set out in the respondent's supplementary affidavit about the appellant's alleged harassment of the respondent through its property manager to support his finding that the appellant engaged in litigation misconduct that warranted an award of substantial indemnity costs. This was an unfair outcome that resulted from the application judge's unreasonable exclusion of the appellant's supplementary affidavit which provided a different version of the events.


Ontario (Finance) v. Echelon General Insurance Company, 2019 ONCA 0629

[Lauwers, Fairburn and Nordheimer JJ.A.]

Counsel:

J.R. Pollack and Erica Lewin, for the appellant

M. Sydney, for the respondent

FACTS:

Ms. Barnes was a passenger on a snowmobile operated by her boyfriend, Mr. Bird, when she was thrown off and suffered injuries. Mr. Bird was a named insured under an automobile insurance policy issued by Echelon General Insurance Company. Ms. Barnes applied to Echelon for statutory accident benefits. Echelon began paying her benefits as required by s. 2 of Disputes Between Insurers, O. Reg. 283/95 (the "Regulation"), enacted under the Insurance Act, R.S.O. 1990, c. I.8. However, Echelon soon decided that it was not liable because the snowmobile was not a described vehicle under Mr. Bird's policy. In reality, the snowmobile was insured under the "other automobiles" section of the policy. In the mistaken belief that Ms. Barnes was not covered by its insurance policy, but was uninsured, Echelon persuaded the Motor Vehicle Accident Claims Fund (also referred to as "HMQ") to accept the payment obligation. Echelon's coverage mistake eventually came to light and the Fund requested Echelon to resume paying Ms. Barnes, and to reimburse it for payments made to her. Echelon refused.

The Fund and Echelon arbitrated their dispute under the provisions of the Regulation. The arbitrator found that Echelon, not the Fund, was obliged to pay the benefits to Ms. Barnes. The appeal judge agreed that Echelon was obliged to pay the benefits. Echelon appeals to the Court with leave.

ISSUES:

(1) The overarching issue is whether responsibility for paying statutory accident benefits to Ms. Barnes lies with Echelon or the Fund:

(a) Was the appeal judge correct in holding that the arbitration was void from the outset?

(b) Does the arbitral jurisprudence bind the Fund in a priority dispute?

(c) Was the arbitrator's interpretation of s. 7(6) of the Regulation reasonable?

HOLDING:

Appeal dismissed.

REASONING:

(1):Responsibility for payment lay with Echelon, not the Fund. The arbitrator's order in this regard was correct:

(a) No, the appeal judge was not correct in concluding that the arbitration was void from the outset.

By basing his reasoning on a finding that the arbitration was void from the outset, the appeal judge nullified the arbitration award. If the arbitration was void, it is unclear on what basis the Fund could obtain the remedy it seeks and to which it is entitled.

The arbitration was properly initiated by the Fund and duly constituted. The arbitrator had the authority given to him by the Regulation and the Arbitration Act, 1991 to resolve the issues confided to him. There is nothing in the text of the amended Regulation or in the Insurance Act that compels or could even justify the result of voiding the arbitration award. Quite to the contrary, s. 7(6) of the Regulation addresses precisely the situation in which an insurer fails to comply with s. 3.1, including the insurer's failure under s. 3.1(2) (a) to "complete a reasonable investigation to determine if any other insurer or insurers are liable to pay benefits in priority to the Fund".

This conclusion requires looking at the reasonableness of the arbitration decision.

(b) Does the arbitral jurisprudence bind the Fund in a priority dispute?

No. The Fund is not an ordinary insurer, as Laskin J.A. noted in Allstate. And the Fund is not an ordinary insurer in a priority dispute under the Regulation, as the 2010 amendments make abundantly clear. The Court agreed with the arbitrator and the appeal judge that even though the Fund is an insurer for some purposes, it stands apart from ordinary insurers in priority disputes under the Regulation. The arbitrator did not err in refusing to apply the arbitral jurisprudence to the Fund in this instance.

(c) Was the arbitrator's interpretation of s. 7(6) of the Regulation reasonable?

No. The arbitrator's interpretation of s. 7(6) of the Regulation as it related to the jurisdiction to make a special award was unreasonable. Contrary to his view, the section permits an arbitrator to resolve the priority dispute by requiring an insurer to fully reimburse the Fund for benefits paid for which the insurer was properly responsible, in addition to the costs of the investigation and legal fees, and ordering any sanctions the arbitrator might find to be warranted. This reading rounds out the regulatory scheme. However, since the arbitrator imposed a reasonable award, the appeal should be dismissed.

The narrow reading of his authority under s. 7(6) compelled the arbitrator to pursue the convoluted common law route to an effective remedy that occupied many pages of his lengthy decision. This extended the arbitration well beyond its normal summary dimensions and was an unnecessary side trip. While the arbitrator has jurisdiction under the Arbitration Act, 1991 to take that road, there was no need to do so in this case. This is the summary perspective within which an arbitration under the Regulation is intended to operate, as Sharpe J.A. noted in West Wawanosh.

Furthermore, s. 282(10) was repealed in 2016. There was no reason to implicitly import the express limitations on a "special award" found in an earlier repealed provision. It is trite law that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of the legislature. Implicitly importing repealed limitations would not be consistent with the accepted approach to statutory interpretation, which is to give effect to the text of the provision resorting only to the implication of additional terms where that is necessary and consistent with the statutory scheme.


Solea International BVBA v. Bassett & Walker International Inc., 2019 ONCA 0617

[Feldman, Hourigan and Brown JJ.A.]

Counsel:

G.R. Hall and A.D. Iarusso, for the appellant

A. Mazzotta and T.J. Law, for the respondent

FACTS:

The respondent, Solea International BVBA ("Solea") is a trader of seafood products who sold two containers of frozen shrimp to the appellant, Bassett & Walker International Inc. ("BWI"). Under the terms of its sales contract with BWI, Solea was to deliver the shrimp CIF (Cost, Insurance, and Freight) to the Mexican port of Manzanillo. The shrimp arrived at the port and was off-loaded in 2014. BWI was not able to pass the goods through Mexican customs. Although first assuring Solea that it would pay the invoice, ultimately BWI refused to pay Solea's invoice for the contract price of the shrimp. The shrimp was returned to Ecuador. Solea commenced this action for payment of the purchase price of US$228,604.50 plus interest at 8%. The motion judge granted judgment to Solea for the full amount of the purchase price, together with pre-judgment interest.

Two rounds of summary judgment motions have taken place in this proceeding. In Round One, summary judgment was granted to Solea for the contract price. This court set aside that judgment on the basis that the parties and the motion judge had failed to consider whether the International Sale of Goods Act (the "ISGA"), now titled the International Sales Conventions Act, and its Schedule 1, the United Nations Convention on Contracts for the International Sale of Goods (the "Convention"), applied to the transaction. On that appeal, the parties agreed that the ISGA and its schedule, the Convention, applied.

In Round Two, the Court again granted Solea summary judgment, ordering BWI to pay the Canadian dollar equivalents of US$228,604.50 and US$79,817.40 for the contract price and prejudgment interest respectively. The motion judge applied a prejudgment interest rate of 8% per annum. The motion judge found that BWI: (i) did not declare the contract avoided pursuant to Art. 49 of the Convention; and (ii) had not established the applicability of either estoppel or unjust enrichment as a defence to paying the purchase price.

ISSUES:

(1) Did the motion judge commit an error of law by concluding that the Convention did not impose on Solea a duty to mitigate?

(2) Did the motion judge err in awarding prejudgment interest at the rate of 8% per annum?

HOLDING:

Appeal dismissed.

REASONING:

(1) Any ultimate characterization of Solea's claim for the purpose of determining whether Art. 77 of the Convention imposes a duty to mitigate would need to take into account the availability of an Art. 62-based specific performance remedy in a common law jurisdiction such as Ontario in view of the limitation placed by Art. 28.

The parties did not address what effect, if any, Art. 28 may have on any duty for Solea to mitigate in its Ontario action for the purchase price. While it would be open to the panel to ask the parties to provide further submissions on this point, the Court found it was not appropriate or necessary in the specific circumstances of this case. It was not appropriate because: Solea claims a modest amount, utilizing the Simplified Procedure; its action is now over four years old; and this is the second trip to the Court of Appeal. Further submissions were not necessary because this appeal can be decided without expressing a definitive view on whether a duty to mitigate under the Convention applies to Solea's action.

Taking BWI's case at its highest by assuming (without deciding) that Solea was subject to a duty to mitigate, Solea satisfied any such duty. When BWI breached the contract by refusing to pay the invoice, it had title to and possession of the goods—circumstances that limited the reasonable measures Solea could take to mitigate its losses caused by BWI's breach.

The record contained other evidence concerning the mitigation issue. BWI refused an offer from Solea to take the goods back but only if BWI covered Solea's related costs, which it estimated to be in the range of US$25,000 – $30,000. Art. 77 reflects the common law principle that while it is up to the plaintiff to establish what it has lost from the defendant's breach of contract, it is up to the defendant to show that the plaintiff could have avoided some, or perhaps all, of these losses. Given that onus on BWI, it was significant that it did not adduce any evidence about what Solea likely would have fetched on a resale of the goods at the material time.

The findings of fact of the motion judge, taken together with the evidence support the conclusion that even if Solea was subject to a duty to mitigate under the Convention, it took such measures as were reasonable in the circumstances to mitigate its loss, including loss of profit, resulting from BWI's breach of contract.

(2) No. While the Solea sales confirmation did not refer to interest payable on the amount billed, there was no dispute that the commercial practice for this type of international food commodity transaction first involved the formation of a sale contract, followed by the approval of other documentation required to perform the transaction. An email exchange between the parties confirmed that one required document was a commercial invoice.

Solea sent to BWI by email a package of documents, which included an invoice of the same date. Term 11 of the "General Terms of Sale" on the back page of the invoice stipulated a minimum rate of interest of 8% on any amount unpaid on the due date, with interest otherwise calculated at a rate of 2% on top of the current Euribor rate.

BWI's affiant, Jose Barajas Andrade, swore two affidavits for the motions. In neither affidavit did he take the position that BWI was not aware of the General Terms of Sale on the reverse of the invoice.

BWI had also confirmed that it had received a copy of the invoice, would proceed on the basis of the copy, and had approved the acceptability of the invoice as a transaction document. The front page of the invoice contained the following language: "General Terms of Sale: see reverse side". Given the clear disclosure that the invoice contained additional terms, BWI's approval of the acceptability of a copy of the invoice bearing that language operated to incorporate those terms into the contract of sale.


SHORT CIVIL DECISIONS

V Hazelton Limited v. Perfect Smile Dental Inc., 2019 ONCA 0632

[Watt, Hourigan and Huscroft JJ.A.]

Counsel:

M. G. McQuade, for the appellant

R. W. Trifts, for the respondent Perfect Smile Dental Inc.

Keywords: Costs Endorsement


CRIMINAL DECISIONS

R. v. Ching, 2019 ONCA 0619

[Strathy C.J.O., Rouleau and Miller JJ.A.]

Counsel:

H. L. Krongold and P. Michaud-Simard, for the appellant

H. Leibovich, for the respondent

Keywords: Criminal Law, First Degree Murder, Second Degree Murder, Assault, Mens Rea, Defences, Not Criminally Responsible by Reason of Mental Disorder, Jury Instructions, Evidence, Admissibility, Post-Offence Conduct, R. v. Droste, [1984] 1 S.C.R. 208, Criminal Code, s. 229, 231, s. 683(3), s. 686(1)(b)(i)


R. v. Trachy, 2019 ONCA 0622

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:

J. Patton, for the appellant

M. R. Gourlay, for the respondent

Keywords: Publication Ban, Criminal Law, Sexual Assault, Indecent Assault, Sexual Interference, Sexual Exploitation, Mens Rea, Expert Evidence, Criminal Code, s. ss. 676(1)(a) & 686(4)(b)(ii), R. v. W.(D.), [1991] 1 S.C.R. 742, R. v. Chase, [1987] 2 S.C.R. 293, R. v. Litchfield [1993] 4 S.C.R. 333, R. v. Ewanchuk, [1999] 1 S.C.R. 330, R. v. Lutoslawski, 2010 SCC 49, R. v. Marshall, 2017 ONCA 801, R. v. Skalbania, [1997] 3 S.C.R. 995, R. v. Cassidy, [1989] 2 S.C.R.


R. v. Claros, 2019 ONCA 0626

[Hoy A.C.J.O., Hourigan and Paciocco JJ.A.]

Counsel:

L. Shin, for the appellant

D. Doucette, for the respondent

Keywords: Criminal Law, Discharging a Firearm With Intent to Wound, Possession of a Weapon for the Purpose of Committing an Offence, Possession of a Firearm Without a Licence, Unauthorized Possession of a Firearm in a Motor Vehicle, Aggravated Assault, Possession of a Firearm While Prohibited, Possession of a Firearm Obtained by Crime, Sentencing, Pre-Sentence Custody, Concurrent Sentences, Disclosure Breaches, Remedies, Canadian Charter of Rights and Freedoms, s 24, Criminal Code, ss. 88(2), 92(3), 94(2), 96(2), 96(3), 117.01(3), 244(2), 268(2) & 718.2(c), R. v. Nasogaluak, 2010 SCC 6


R. v. Locknick, 2019 ONCA 0625

[Watt, Tulloch and Lauwers JJ.A.]

Counsel:

K. Grad and K. Heath, for the appellant

C. Walsh, for the respondent

Keywords: Criminal Law, Conspiracy to Traffic in a Controlled Substance, Delay, Canadian Charter of Rights and Freedoms, ss. 8, 11(b), 24(2), R. v. Jordan, 2016 SCC 27, R. v. Morin, [1992] 1 S.C.R. 771, R. v. Antic, 2019 ONCA 160, R. v. Cody, 2017 SCC 31, R. v. Araujo, 2000 SCC 65


R. v. Grewal, 2019 ONCA 0630

[Tulloch, van Rensburg and Harvison Young JJ.A.]

Counsel:

J. Lockyer and A. Ohler, for the appellant

H. Loubert, for the respondent

Keywords: Criminal Law, Kidnapping, Aiding and Abetting, Actus Reus, Mens Rea, Defences, Duress, Jury Instructions, Evidence, Hearsay, Criminal Code, RSC 1985, c. C-46, ss. 21(1)(b), 24, R. v. W.(D.), [1991] 1 SCR 742, R. v. Calnen, 2019 SCC 6, R. v. Srun, 2019 ONCA 453, R. v. Dooley, 2009 ONCA 910, leave to appeal refused, [2010] SCCA No. 83, R. v. Simon, 2010 ONCA 754, leave to appeal refused, [2010] SCCA No. 459, R. v. Romano, 2017 ONCA 837, R. v. Luciano, 2011 ONCA 89, R. v. Wong (2006), 209 CCC (3d) 520 (Ont. CA), R. v. Cinous, 2002 SCC 29, R. v. Bucik, 2011 ONCA 546, R. v. Barrett, 2016 ONCA 12


R. v. Ibrahim, 2019 ONCA 0631

[Rouleau, Trotter and Zarnett JJ.A.]

Counsel:

C. Murphy, for the appellant

J. Barrett, for the respondent

Keywords: Criminal Law, Second Degree Murder, Unlawful Act Manslaughter, Criminal Negligence, Dangerous Driving, Intent to Cause Bodily Harm, Assault, Defences, Provocation, Jury Instructions, W.(D.) Instruction, Reasonable Apprehension of Bias, Criminal Code, R.S.C. 1985, c. C-46, ss. 150.1(4), 222(5)(a), 222(5)(b), 229(a), s.232, s. 249(1)(a), 265(1)(a), 265(1)(b), Highway Traffic Act, R.S.O. 1990, c. H.8, s. 130, R. v. (W.D.), [1991] 1 S.C.R. 742, R. v. Beatty, 2008 SCC 5, R. v. Roy, 2012 SCC 26, R. v. Ibrahim, 2016 ONSC 1538, R. v. Hundal, [1993] 1 S.C.R. 867, R. v. Willock (2006), 210 C.C.C. (3d) 60 (Ont. C.A.), R. v. Dunchie, 2007 ONCA 887, R. v. Sadiqi, 2013 ONCA 250, R. v. Reynolds, 2013 ONCA 433, R v. Griffith, 2019 BCCA 37, 38 M.V.R. (7th) 1, R. v. Dowholis, 2016 ONCA 801, R. v. Stewart (1991), 62 C.C.C. (3d) 289 (Ont. C.A.)


R. v. Jordan, 2019 ONCA 0607

[Rouleau, Tulloch and Fairburn JJ.A.]

Counsel:

D.J., in-person

M. Halfyard, duty counsel

J. Smith Joy, for the respondent

Keywords: Criminal Law, Human Trafficking, Intimidation Of A Justice System Participant, Sentencing, Mandatory Minimum Sentence, Consecutive Sentences, Concurrent Sentences

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