Please find below our summaries of the civil decisions of the Court of Appeal for the week of October 26, 2020.

The headline decision is 7636156 Canada Inc. (Re). In a 54-page decision, the Court of Appeal canvassed in detail the law relating to letters of credit and the "autonomy" principle, and whether obligations by banks under LC's are affected by a bankruptcy of the underlying debtor. In this case, the underlying debtor that went bankrupt was a commercial tenant. The application judge held that the landlord was only entitled to draw on the LC for its preferred claim of three months' rent after the tenant's trustee in bankruptcy disclaimed the lease. The Court of Appeal disagreed, confirming that under the autonomy principle, the obligation under the LC was independent of the tenant (and trustee's) obligations under the lease, and as between only the landlord and the bank. In coming to its conclusion, the Court had to choose between conflicting lines of decisions. The result of this decisions is that landlords who were successful in obtaining LC's to secure their tenant's obligations under their leases should not be affected by their tenant's bankruptcies up to the amount of the LC (depending, of course, on the terms of the lease and LC). Given the current economic environment, the decision is quite timely.

Other topics covered this week included the right to notice of municipal tax sales, claims made by judgment creditors against insurers of judgment debtors under section 132 of the Insurance Act to the proceeds of insurance, access in the crown wardship context and the lack of standing of parties under disability who are represented by a litigation guardian.

Table of Contents

Civil Decisions

Wilton v. Northern Bruce Peninsula (Municipality) , 2020 ONCA 0674

Keywords: Municipal Law, Taxation, Tax Sales, Notice, Duty of Good Faith, Registry Act, R.S.O. 1990, c. R.20, Municipal Act, 2001, S.O. 2001, c. 25, s. 374, s. 379(1) and s. 381(1), Municipal Tax Sales Act, R.S.O. 1990, c. M-60, Elliott v. Toronto (City) (1999), 171 D.L.R. (4th) 64 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 244, Zeitel v. Ellscheid, [1994] 2 S.C.R. 142

7636156 Canada Inc. (Re) , 2020 ONCA 0681

Keywords: Contracts, Real Property, Commercial Leases, Banking Law, Security, Letters of Credit, Autonomy Principle, Bankruptcy and Insolvency, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss. 136(1)(f), 146, Personal Property Security Act, RSO 1990, c. P10, Commercial Tenancies Act, RSO 1990, c. L.7, s. 38(1), Crystalline Investments Ltd. v. Domgroup Ltd., 2004 SCC 3, Bank of Nova Scotia v. Angelica-Whitewear Ltd., [1987] 1 SCR 59, 430872 B.C. Ltd. v. KPMG Inc., 2004 BCCA 186, Royal Bank v. Gentra Canada Investments Inc. (2001), 147 O.A.C. 96 (C.A.), Cineplex Odeon Corp. v. 100 Bloor West General Partner Inc., [1993] O.J. No. 112 (Gen. Div.), Re Mussens Ltd., [1933] O.W.N. 459 (S.C.), Curriculum Services Canada/Service Des Programmes D'Études Canada (Re), 2020 ONCA 267, Cummer-Yonge Investments Limited v. Fagot, [1965] 2 O.R. 152 (S.C.), Lava Systems Inc. (Receiver & Manager of) v. Clarica Life Insurance Co. (2001), 31 C.B.R. (4th) 284 (Ont. S.C.), rev'd (2002), 161 O.A.C. 53 (C.A.), Titan Warehouse Club Inc. (Trustee of) v. Glenview Corp. (1988), 67 C.B.R. (N.S.) 204 (Ont. S.C.), aff'd (1989), 75 C.B.R. (N.S.) 206 (Ont. C.A.), West Shore Ventures Ltd. v. K.P.N. Holding Ltd., 2001 BCCA 279, 885676 Ontario Ltd. (Trustee of) v. Frasmet Holdings Ltd. (1993), 17 C.B.R. (3d) 64 (Ont. Gen. Div.), Peat Marwick Thorne Inc. v. Natco Trading Corp. (1995), 22 O.R. (3d) 727 (Gen. Div.), Westpac Banking Corp. v. Duke Group Ltd. (1994), 20 O.R. (3d) 515 (Gen. Div.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Windsor-Essex Children's Aid Society v. E.W. (Publication Ban) , 2020 ONCA 0682

Keywords: Custody and Access, Children's Aid Society, Extended Society Care, Fresh Evidence, Domestic Violence, Kawartha-Haliburton Children's Aid Society v. M.W., 2019 ONCA 316, 432 D.L.R. (4th) 497; Children's Aid Society of Toronto v. J.G., 2020 ONCA 415, 151 O.R. (3d) 320; L.M. v. Peel Children's Aid Society, 2019 ONCA 841, 149 O.R. (3d) 18; Children's Aid Society of Toronto v. V.L., 2012 ONCA 890, 299 O.A.C. 388; Children's Aid Society of Ottawa v. S.N.-D., 2012 ONCA 590, 26 R.F.L. (7th) 46; Catholic Children's Aid Society of Metropolitan Toronto v. M. (C.), [1994] 2 S.C.R. 165; Children's Aid Society of Oxford County v. W.T.C., 2014 ONCA 540, 46 R.F.L. (7th) 290; Children's Aid Society of Toronto v. C.J.W., 2017 ONCJ 212; Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130; R. v. Ibrahim, 2019 ONCA 631, 147 O.R. (3d) 272; A.M. v. Valoris Pour Enfants et Adultes de Prescott-Russell, 2017 ONCA 818; Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched. 1, Child and Family Services Act, R.S.O. 1990, c. C.11

Hodgson v. Cheng , 2020 ONCA 0689

Keywords:Family law, Custody and Access, Civil Procedure, Appeals, Jurisdiction, Orders, Costs, Final or Interlocutory, Wachsberg v. Wachsberg, 2018 ONCA 508, Deltro Group Ltd. v. Potentia Renewables Inc., 2017 ONCA 784

Svia Homes Limited v. Northbridge General Insurance Corporation , 2020 ONCA 0684

Keywords: Contracts, Interpretation, Insurance, General Liability, Coverage, Unsatisfied Judgments, Enforcement, Notice, Delay, Prejudice, Insurance Act, RSO 1990, c. l.8 ss. 129, 132. 132(1), Liability Condition 5, Statutory Condition 8, Consolidated-Bathurst v. Mutual Boiler, [1980] 1 SCR 888, Monk v Farmers' Mutual Insurance Company (Lindsay), 2019 ONCA 616, Becker v Toronto (City), 2020 ONCA 60, Kaiman v Graham, 2009 ONCA 77, The Sovereign General Insurance Company v Walker, 2011 ONCA 597

Huang v. Braga , 2020 ONCA 0645

Keywords: Torts, Negligence, MVA, Civil Procedure, Parties Under Disability, Litigation Guardians, Settlements, Court Approval, Appeals, Standing, Vexatious Litigants, Rules of Civil Procedure, Rules 7.01(1), 7.08, 7.04(1)(b), 37.16, Courts of Justice Act, ss. 140(1) and (3), Ki Ho Kim v. 260 Wellesley Residences Inc., 2017 ONSC 2985, Kavuru (Litigation Guardian of) v. Heselden, 2014 ONSC 6718

Short Civil Decisions

Cooper v. Book, 2020 ONCA 0683

Keywords: Civil Procedure, Orders, Disclosure, Costs, "Last-Chance" Orders, Enforcements, Appeals, Starland Contracting Inc. v. 1581518 Ontario Ltd., 2009 CanLII 30449 (ON SCDC)

National Bank of Canada v. Guibord, 2020 ONCA 0674

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Vexatious Litigants, Rules of Civil Procedure, Rule 2.1.01, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, R. v. Mehedi, 2019 ONCA 387, Currie v. Halton Regional Police Services Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.)

Franmed Consultants (1993) v. Medcan Health Management Inc./em>, 2020 ONCA 0687

Keywords: Breach of Contract, Civil Procedure, Summary Judgment, Costs

CIVIL DECISIONS

Wilton v. Northern Bruce Peninsula (Municipality), 2020 ONCA 0674

[Doherty, Paciocco and Coroza JJ.A.]

Counsel:

S. Wilton, self-represented for the appellant

N. Lovell, for the respondent Municipality of Northern Bruce Peninsula

Keywords: Municipal Law, Taxation, Tax Sales, Notice, Duty of Good Faith, Registry Act, R.S.O. 1990, c. R.20, Municipal Act, 2001, S.O. 2001, c. 25, s. 374, s. 379(1) and s. 381(1), Municipal Tax Sales Act, R.S.O. 1990, c. M-60, Elliott v. Toronto (City) (1999), 171 D.L.R. (4th) 64 (Ont. C.A.), leave to appeal refused, [1999] S.C.C.A. No. 244, Zeitel v. Ellscheid, [1994] 2 S.C.R. 142

facts:

This case involved an appeal to set aside a 2016 municipal tax sale of the home of the appellant's deceased parent in Lions Head, Ontario ("the Property").

The appellant brought her application as the estate trustee for her deceased mother's estate. The appellant did not have a registered interest in the Property when the tax sale was underway, nor was she ever shown as an owner of the Property on the municipal tax assessment rolls. The appellant also did not file a notice of change of address of the Property with the municipality to link to her personal address. Further, no documents relating to the estate were lodged on title.

The appellant presented evidence in her application that she was entitled to notice of the tax sale because municipal employees were aware that:

  • The appellant had arranged for the payment of the tax arrears on the Property that were outstanding at that time;
  • In related email correspondence with municipal employees, the appellant referred to the estate and sought receipts in the name of the estate;
  • The appellant arranged for the Municipality to send prepayment authorizations to her personal address and she and her husband gave prepayment authorization for taxes owing on property they owned, including for the Property, where she signed as trustee for the estate; and
  • The appellant arranged for the variation of the pre-authorized payment amounts in correspondence that included her contact information.

The Municipality decided to pursue a tax sale of the Property after the necessary searches were conducted and tax arrears were confirmed in the amount of $11,363.27. In January 2015, a tax arrears certificate was registered on title and a copy of the certificate and a Notice of Registration of Tax Arrears Certificates were sent by registered mail to the two addresses of the appellant's deceased parents - the Property which was shown on the Municipal Assessment Roll and another address that was shown in the registered title document. The registered letters returned unopened. In November 2015, the property search was updated and final notices were sent to the same addresses. Notices of the pending tax sale were also published in regional newspapers and the Ontario Gazette. The Property was then transferred to the successful tenderer in March 2016.

The appellant claimed that the municipal tax sale was null and void because the respondent, the Municipality of Northern Bruce Peninsula ("the Municipality"), had failed to give her notice of the tax sale. The application judge dismissed the application, holding that the Municipality was not required by law to notify the appellant. The appellant appealed from that decision.

issues:

  1. Did the Municipality fail to comply with the statutory notice obligations?
  2. Did the Municipality breach its duty of good faith to the appellant?

holding:

Appeal dismissed.

reasoning:

(1) No. The court found that the Municipality had complied with the relevant notice obligations relating to a tax sale as set out in s. 374, s. 379(1) and s. 381(1) of the Municipal Act, 2001, S.O. 2001, c. 25. The appellant argued that despite this, the notice requirements had not been satisfied based on s. 381(2) and s. 374(5) of the statute relating to evidence to the contrary. The appellant claimed that the return of the registered mail was "evidence to the contrary", which then rebutted the deemed receipt provision in s. 381(2). The Court, following prior case law, found that the return of the registered letters had no bearing on the sufficiency of the notice provided. The Court held that since ss. 374(1) and 379(1) do not require receipt before a notice that has been sent is effective, s. 381(2) has nothing to do with whether proper notice has been provided. Instead, it was enacted so that if a municipality found value in arguing receipt, it could rely on the evidentiary shortcut that s. 381(2) provides.

In regards to s. 374(5), the appellant argued that the section imposes a duty on the Municipality to undertake a reasonable search of the records mentioned in s. 381(1) and to give notice at the addresses identified. The Court held that this was a misreading of s. 374(5), and that the section does not impose an additional statutory notice obligation of general application.

(2) No. This issue was only first raised on appeal. In any event, the Court held that the municipality did not breach any duty of good faith to the appellant. According to the terms of the statute, the Municipality was not obliged to give the appellant notice of the tax sale and it would not be appropriate in this case to add additional notice obligations on the Municipality not already provided for in the legislative scheme. The Municipality owed no duty to the appellant to give her notice, and in the absence of such a duty, there was no basis for her claim that the Municipality acted in bad faith.

Further, even if the Court were to recognize an additional, non-legislated notice obligation, this would not be an appropriate case in which to do so, as there were multiple other actions the appellant could have taken to ensure that she would have a legal right to receive notice.

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