Good afternoon.
Following are our summaries of the civil decisions of the Court of
Appeal for Ontario for the week of June 21, 2021.
In Manastersky v. Royal Bank of Canada, the Court dealt with a wrongful dismissal appeal on damages that was remanded by the Supreme Court of Canada with the directive of applying the recent decision of Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26. The Court affirmed its original decision.
In Moore v. 7595611 Canada Corp., the Court refused to set aside the damage awards the jury made at trial. Of note, the Court refused to reduce an award for loss of care, guidance and companionship, despite it exceeding the "upper limit" prescribed in To v. Toronto Board of Education (2001), 204 D.L.R. (4th) 704 (Ont. C.A.). The Court held that since the award did not "shock the conscience of the court" it should not be reduced.
In Krebs v. Cote, the Court refused to extend to cohabitation agreements the rule that provides that a separation agreement becomes void upon reconciliation of the parties.
In Bayford v Boese, the Court found that the trial judge erred in finding that the respondent had discharged her burden to prove the formal validity of the will due to a misapprehension of the content and significance of expert evidence.
Other topics covered this week included subrogation rights of an insurer to SABs, the admission of fresh expert evidence in a medmal matter resulting in the setting aside of summary judgment dismissing the claim, breach of contract in respect of consulting services, the refusal of leave to appeal in the Laurentian University CCAA proceeding, contempt in the custody and access context, the negligence of a landlord in respect of the death of a tenant in a house fire, mitigation in respect of a claim for breach of an APS of land and extension of time to perfect an appeal in the family law context.
John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email
Table of Contents
Civil Decisions
Keywords: Family Law, Civil Procedure, Appeals, Perfection of Appeal, Extension of Time, Rules of Civil Procedure, Rule 61.05(5), Issasi v. Rosenzweig, 2011 ONCA 112
El-Khodr v. Northbridge Commercial Insurance Company , 2021 ONCA 440
Keywords: Torts, Negligence, MVA, Statutory Accident Benefits, Subrogation, Assignment, Contracts, Interpretation, Minutes of Settlement, Insurance Act, R.S.O. 1990, c. I.8, s. 267.8, Statutory Accident Benefits Schedule, O. Reg. 34/10, El-Khodr v. Lacki 2017 ONCA 716, 139 O.R. (3d) 659, leave to appeal refused, [2017] S.C.C.A. No. 461, El-Khodr v. Lackie, 2015 ONSC 5244, 79 C.P.C. (7th) 356, Carroll v. McEwen, 2018 ONCA 902, Cadieux v. Cloutier, 2018 ONCA 903, leave to appeal to refused, [2019] S.C.C.A. No. 63, Gilbert v. South, 2014 ONSC 3485, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Environs Wholesale Nursery LTD. v. Environs Landscape Contracting LTD., 2019 ONCA 547, 3113736 Canada Ltd. v. Cozy Corner Bedding Inc., 2020 ONCA 235, Angus v. Port Hope (Municipality), 2017 ONCA 566, leave to appeal refused, [2017] S.C.C.A. No. 382
Bayford v. Boese , 2021 ONCA 442
Keywords: Wills and Estates, Wills, Formal Validity, Civil Procedure, Expert Evidence, Fresh EvidenceSuccession Law Reform Act, R.S.O. 1990, c. S.26, s. 4(1), Housen v. Nikolaisen, 2002 SCC 33, R. v. Morrissey (1995), 97 C.C.C. (3d) 193 (Ont. C.A.), Waxman v. Waxman, 2004 CanLII 39040, leave to appeal refused, [2004] S.C.C.A. No. 291; Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, leave to appeal refused, [2020] S.C.C.A. No. 409, Vout v. Hay, [1995] 2 S.C.R. 876, Palmer v. The Queen, [1980] 1 S.C.R. 759, Sengmueller v. Sengmueller (1994), 111 D.L.R. (4th) 19 (Ont. C.A.)
Pichelli v. Kegalj , 2021 ONCA 445
Keywords: Torts, Fraud, Deceit, Misrepresentation, Breach of Trust, Unjust Enrichment, Civil Procedure, Summary Judgment, Fresh Evidence, Rules of Civil Procedure, Rules 20.04(2.1), 20.04(2.2), 21, 25, 25.06(8), Hryniak v. Mauldin, 2014 SCC 7, Trotter Estate, 2014 ONCA 841, Royal Bank of Canada v 164397 Ontario Inc, 2021 ONCA 98, Sengmueller v. Sengmueller, 1994 111 D.L.R. (4th) 19 (Ont. C.A.)
Johnson v. Rajanna, 2021 ONCA 453
Keywords: Torts, Negligence, Medmal, Dentists, Civil Procedure, Summary Judgment, Expert Evidence, Standard of Care, Adjournments, Fresh Evidence, Experts, Expert Report, Rules of Civil Procedure, Rule 53.03(2.1), R. v. Palmer, [1980] 1 S.C.R. 759
Laurentian University of Sudbury (Re), 2021 ONCA 448
Keywords: Bankruptcy and Insolvency, Restructuring, Notice of Disclaimer, Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-3, Laurentian University of Sudbury v. University of Sudbury, 2021 ONSC 3392, Laurentian University of Sudbury (Re), 2021 ONCA 199, 9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, Edgewater Casino Inc. (Re), 2009 BCCA 40, Nortel Networks Corp. (Re), 2016 ONCA 332
Manastersky v. Royal Bank of Canada, 2021 ONCA 458
Keywords: Contracts, Employment, Wrongful Dismissal, Reasonable Notice, Damages, Supreme Court Act, R.S.C. 1985, c. S-26, s. 43(1.1), Manastersky v. Royal Bank of Canada, 2019 ONCA 609, Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, Paquette v. TeraGo Networks Inc., 2016 ONCA 618, Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619, Taggart v. Canada Life Assurance Co. (2006), 50 C.C.P.B. 163 (Ont. C.A.)
Keywords: Family law, Contracts, Interpretation, Cohabitation Agreements, Separation, Reconciliation, Civil Procedure, Summary Judgment, Determination of Question of Law, Family Law Act, RSO 1990, c. F3, ss 52 to54, Family Law Rules, Rule 16(12)(a), Montague Lush and Walter Hussey Griffith, Law of Husband and Wife within the Jurisdiction of the King's Bench & Chancery Divisions, 3rd ed. (London: Stevens and Sons, Limited, 1910), Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, Ernikos v. Ernikos, 2017 ONCA 347, Sydor v. Sydor (2003), 178 O.A.C. 155 (C.A.), Bailey v. Bailey (1982), 37 O.R. (2d) 117 (C.A), Bebenek v. Bebenek (1979), 24 O.R. (2d) 385 (C.A.), Nicol v. Nicol (1885), 30 Ch. D. 143, Langdon v. Langdon, 2015 MBQB 153, Sandrelli v. Sandrelli, 2015 ONSC 7913, Hartshorne v. Hartshorne, 2004 SCC 22
Leslie v. Encanto Potash Trading Corporation, 2021 ONCA 464
Keywords: Contracts, Breach of Contract, Summary Judgment, Evidence, Cross-appeal, Costs, Interlocutory Appeal, Courts of Justice Act, R.S.O. 1990, c.43, Section 6(2), Rules of Civil Procedure, Rule 39.03
Moncur v. Plante, 2021 ONCA 462
Keywords: Family Law, Custody and Access, Civil Procedure, Orders, Enforcement, Civil Contempt, Carey v. Laiken, 2015 SCC 17, Greenberg v. Nowack, 2016 ONCA 949, Chong v. Donnelly, 2019 ONCA 799, Valoris pour enfants et adultes de Prescott-Russell c.K.R., 2021 ONCA 366, Ruffolo v. David, 2019 ONCA 385
Moore v. 7595611 Canada Corp., 2021 ONCA 459
Keywords: Torts, Negligence, Occupier's Liability, Standard of Care, Damages, Mental Distress, Loss of Care, Guidance, and Companionship, Cost of Future Care, Civil Procedure, Jury Selection, Fresh Evidence, Juries Act, R.S.O. 1990, c. J.3, s. 44(1), Fire Protection and Prevention Act, 1997, S.O. 1997, c. 4, s. 76, Fire Code, O. Reg. 213/07, Fatal Accidents Act, R.S.A. 2000, c. F-8, s. 8(2), To v. Toronto Board of Education (2001), 204 D.L.R. (4th) 704 (Ont. C.A.), Young v. Bella, 2006 SCC 3, Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, Fiddler v. Chiavetti, 2010 ONCA 210, Vokes Estate v. Palmer, 2012 ONCA 510, Rodrigues v. Purtill, 2019 ONCA 740, Gervais v. Richard (1984), 48 O.R. (2d) 191 (H.C.), Mason v. Peters (1982), 139 D.L.R. (3d) 104 (Ont. C.A.), Rodrigues v. Purtill, 2019 ONCA 740, Palmer v. The Queen, [1980] 1 S.C.R. 759
Tribute (Springwater) Limited v. Atif, 2021 ONCA 463
Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Damages, Mitigation, Prejudgment Interest, Postjudgment Interest, Rules of Civil Procedure, Rule 25.06(9)(b), Courts of Justice Act, RSO 1990, c C43, ss 127, 128, 129, 130(1) and 130(2), Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, 100, Main Street East Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R. (2d) 401 (C.A.), 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), Tribute (Springwater) Limited v. Sumera Anas, 2020 ONSC 5277, McKnight v. Ontario (Transportation), 2018 ONSC 52, Gyimah v. Bank of Nova Scotia, 2013 ONCA 252, Bank of America Canada v. Mutual Trust Co., 2002 SCC 43, Tilden Rent-A-Car Co. v. Clendenning (1978), 18 O.R. (2d) 601 (C.A.), MacQuarie Equipment Finance Ltd. v. 2326695 Ontario Ltd. (Durham Drug Store), 2020 ONCA 139, Forest Hill Homes v. Ou, 2019 ONSC 4332
CIVIL DECISIONS
[Brown J.A. (Motions Judge)]
COUNSEL:
J.A.B., acting in person
C. Doris, for the responding party
Keywords: Family Law, Civil Procedure,
Appeals, Perfection of Appeal, Extension of Time, Rules of Civil
Procedure, Rule 61.05(5), Issasi v. Rosenzweig, 2011 ONCA 112
FACTS:
The appellant brought a motion seeking an order to extend the
time for the perfection of his appeal. The parties agreed to a
settlement conference in March 2020. However, that conference was
delayed due to the pandemic. Court timelines were reinstated on
July 16, 2020, but the appellant did not contact the court to renew
his request for a settlement conference until November 2020.
Although the appellant did not receive a response until May 14,
2021, on January 4, 2021, the court sent the parties a Notice of
Intention to Dismiss Appeal for Delay if the appeal was not
perfected by April 27, 2021. The appellant deposed that he did not
receive this notice.
The respondent no longer consented to a settlement conference.
Therefore, Benotto J.A. advised the appellant that he must perfect
his appeal by May 25, 2021. The appellant could not do so because
he unilaterally suspended preparation of the trial transcript. The
appellant reinstated the request for the transcripts and
anticipated delivery by the end of June 2021.
ISSUES:
(1) Would it be just under the circumstances to grant the appellant's request for an extension of time to perfect his appeal?
HOLDING:
Motion dismissed.
REASONING:
(1) No.
The appellant did not provide an adequate explanation for the
delay. The court stated in January 2020 that to hold a settlement
conference, the Joint Request for Pre-hearing Settlement Conference
form had to be submitted, which it was not. Further, the appellant
had breached Rule 61.05(5) of the Rules of Civil Procedure because
the respondent did not consent to the suspension of the request for
transcripts. This unilateral act materially contributed to the
delay. In addition, the appellant did not act prudently when court
timelines were reinstated in July 2020. He waited months to follow
up with the court and then waited until May 2021 for a response.
There was also evidence that the appellant used several delay
tactics at trial that amounted to litigating in bad faith.
The court also considered the merits of the appeal in determining
if an extension ought to be granted. There was no evidence that the
trial judge made a palpable and overriding error. The trial judge
dealt with both the amount of child support and parenting time at
length. The appellant's notice of appeal did not identify any
legal or factual errors made by the trial judge. Therefore, the
merits to the appeal were weak and the prejudice to the appellant
did not outweigh the lack of reasonable explanation for the
delay.
El-Khodr v. Northbridge Commercial Insurance Company, 2021 ONCA 440
[Doherty, Pepall and Thorburn JJ.A.]
COUNSEL:
J. Y. Obagi and E. A. Quigley for the appellant
H. Klein, for the respondent
Keywords: Torts, Negligence, MVA, Statutory
Accident Benefits, Subrogation, Assignment, Contracts,
Interpretation, Minutes of Settlement, Insurance Act, R.S.O. 1990,
c. I.8, s. 267.8, Statutory Accident Benefits Schedule, O. Reg.
34/10, El-Khodr v. Lacki 2017 ONCA 716, 139 O.R. (3d) 659, leave to
appeal refused, [2017] S.C.C.A. No. 461, El-Khodr v. Lackie, 2015
ONSC 5244, 79 C.P.C. (7th) 356, Carroll v. McEwen, 2018 ONCA 902,
Cadieux v. Cloutier, 2018 ONCA 903, leave to appeal to refused,
[2019] S.C.C.A. No. 63, Gilbert v. South, 2014 ONSC 3485, Sattva
Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Environs
Wholesale Nursery LTD. v. Environs Landscape Contracting LTD., 2019
ONCA 547, 3113736 Canada Ltd. v. Cozy Corner Bedding Inc., 2020
ONCA 235, Angus v. Port Hope (Municipality), 2017 ONCA 566, leave
to appeal refused, [2017] S.C.C.A. No. 382
FACTS:
In Ontario, parties injured in an automobile accident can
receive "no fault" first-party benefits through receipt
of statutory accident benefits ("SABs"). SABs provide a
person injured in an accident, (whether or not) they are at fault,
access to medical, rehabilitation, and other benefits to assist
with their recovery. An injured person may also bring a legal
action against the "at fault" driver in tort ("the
tort defendant").
The appellant suffered catastrophic injuries in a motor vehicle
accident. The appellant's insurer was Royal & Sun Alliance
Insurance Company of Canada ("Royal"). The respondent,
Northbridge Commercial Insurance Company ("Northbridge"),
was the insurer for the tort defendant and conducted the defence on
the tortfeasor's behalf.
The jury awarded the appellant substantial damages payable by the
tortfeasor. The respondent, as insurer for the tortfeasor, sought
an assignment of certain accident benefits payable by Royal to the
appellant. While the trial judge assigned some benefits, the
assignment of benefits for future medication and assistive devices
and future professional services was denied.
The respondent appealed the decision ("the Assignment
Appeal"). After the Assignment Appeal was heard, Royal, the
respondent, and the appellant entered into Minutes of Settlement.
Under the Minutes of Settlement, Royal settled $385,000 into a
trust for the benefit of the appellant and the respondent in
"full and final satisfaction of any and all entitlement to
medical and rehabilitations benefits." The Minutes of
Settlement provided that the sum would be held by Hughes Amys LLP,
counsel to the respondent, and released either to the appellant or
the respondent depending on the outcome of the Assignment Appeal.
Specifically, the respondent would receive the funds "in the
event that the said appeal is allowed and an assignment of Kossay
El-Khodr's entitlement to medical and rehabilitation benefits
is granted to Northbridge."
In September 2017, the Assignment Appeal was granted, and the court
ordered that the amounts payable be assigned to the respondent. The
appellant argued that in the Assignment Appeal, the court did not
order "assignment of Mr. El-Khodr's entitlement of medical
and rehabilitation benefits" as it assigned only part of those
benefits and, as such, the second precondition to the transfer of
funds was not satisfied. The application judge rejected this
argument and held that the conditions set out in the Minutes of
Settlement were met.
ISSUES:
(1) Did the application judge make a palpable and overriding error of fact or an extricable error of law in failing to properly construe the preconditions for payment to Northbridge in the Minutes of Settlement?
HOLDING:
Appeal dismissed.
REASONING:
(1) No
To assess whether the application judge erred in her interpretation
of the Minutes of Settlement, it was necessary to understand (a)
the available approaches to the assignment of the SABs benefits,
(b) the background facts and terms of the Minutes of Settlement,
(c) the decision of the Court on the Assignment Appeal, and (d) the
reasons of the application judge.
A. The Available Approaches to the Assignment of SABs
One of the methods to address the overlap between damages awarded
and SABs received is the "silo" approach. Which only
includes three broad categories of SABs under the Insurance Act:
income replacement benefits, health care benefits, and other
pecuniary losses. Under the "silo" approach, tort damages
are only required to match generally with a corresponding SABs
category.
In Carroll and Cadieux, the court adopted the "silo"
approach to the treatment and matching of SABs to tort damages
under section 267.8 of the Insurance Act. Carroll and Cadieux were
rendered after the Assignment Appeal was decided in September
2017.
B. Background Facts
In January 2007, the appellant was awarded damages for an action
against the tortfeasor. After the verdict, no SABs relating to
future professional services and medications and assistive devices
were assigned. In denying the assignment of these benefits, the
trial judge reasoned those benefits should be assigned only if the
plaintiff's entitlement to such benefits is certain and that
the plaintiff received compensation for the same benefits in the
tort judgment. The trial judge found that "the Defendants are
now unable to meet their onus to demonstrate that the jury award
compensated the Plaintiff for the same loss in respect of which the
Defendants now claim an assignment of benefits."
In its Supplementary Notice of Appeal, the respondent argued that
the approach taken by the trial judge effectively allowed double
recovery and took the position that the "silo" approach
to the assignment of accident benefits should be taken. The
appellant took the position that the match approach should be
followed.
C. Disposition of the Assignment Appeal
The Court rendered its judgment in the Assignment Appeal on
September 19, 2017. The Court allowed the appeal and amended the
trial judge's order so that Royal's future payments to the
appellant for medication and assistive devices up to a total of
$82,429.00 (i.e., the amount the jury had awarded for medication
and assistive devices) and future payments for specified
professional services up to a total of $424,550.00 (i.e., the
amount the jury had awarded for professional services) be assigned
to the respondent.
D. The Application Judge's Order
The issue in this appeal turned upon the interpretation of a
contract. The appellant had to establish a palpable and overriding
error of fact or an extricable error of law. Such errors include
the application of an incorrect principle, the failure to consider
a required element of a legal test, or the failure to consider a
relevant factor: Sattva Capital Corp. v. Creston Moly Corp., 2014
SCC 53, [2014] 2 S.C.R. 633, at paras. 52-53.
The application judge was correct to hold the terms of the Minutes
of Settlement were satisfied and the contract was not frustrated
because the only issue on the Assignment Appeal was the assignment
of the appellant's entitlement to future benefits for
medications and assistive devices, and for professional services.
The parties understood, when the Minutes of Settlement were signed,
that because of the Assignment Appeal, these benefits would either
be assigned to Northbridge or the trial judge's decision not to
assign these benefits would be upheld.
The appellant was aware that the amount in the Minutes of
Settlement was a full and final settlement subject only to the
outcome of the Assignment Appeal and the Assignment Appeal was only
in respect of future medication and assistive device and
professional services. The application judge did not order the
assignment of all settlement amounts for these benefits. The
application judge only assigned medical and rehabilitation benefits
in the amount of $385,000 as per the Minutes of Settlement. The
appellant was awarded and paid $82,429 for future medication and
assistive devices and $424,550 for professional services before the
settlement was reached. Those sums exceeded the $385,000 settlement
amount for medical and rehabilitation benefits set out in the
Minutes of Settlement by $121,979.
For these reasons, the court did not agree with the appellant's
argument that the outcome of the Assignment Appeal was not
contemplated by the parties at the time they entered the Minutes of
Settlement and, thus, the settlement agreement was frustrated. The
application judge's interpretation was consistent with the
reasoning of the Court on the Assignment Appeal.
Bayford v. Boese, 2021 ONCA 442
[Doherty, Nordheimer and Harvison Young JJ.A.]
COUNSEL:
E.A. Cherniak, Q.C., I.M. Hull and D. Lok Yin So, for the
appellant
T. Simmonds, for the respondent
Keywords: Wills and Estates, Wills, Formal
Validity, Civil Procedure, Expert Evidence, Fresh
EvidenceSuccession Law Reform Act, R.S.O. 1990, c. S.26, s. 4(1),
Housen v. Nikolaisen, 2002 SCC 33, R. v. Morrissey (1995), 97
C.C.C. (3d) 193 (Ont. C.A.), Waxman v. Waxman, 2004 CanLII 39040,
leave to appeal refused, [2004] S.C.C.A. No. 291; Carmichael v.
GlaxoSmithKline Inc., 2020 ONCA 447, leave to appeal refused,
[2020] S.C.C.A. No. 409, Vout v. Hay, [1995] 2 S.C.R. 876, Palmer
v. The Queen, [1980] 1 S.C.R. 759, Sengmueller v. Sengmueller
(1994), 111 D.L.R. (4th) 19 (Ont. C.A.)
FACTS:
The deceased owned a farm, was never married, and had no
children. The respondent was a long-time friend of the deceased and
assisted him with the operation of his farm for two decades prior
to his death. The deceased executed a will in 1992 which passed his
estate on to his parents; however, as his parents had both passed
away before the deceased, in the absence of a subsequent valid
will, his estate would pass on an intestacy to his brother, the
appellant, and the two daughters of his deceased sister.
In 2009, the deceased gave the respondent a power of attorney over
his property and personal care. In 2013, the deceased worked with
his lawyer to draft a new will naming the respondent as the sole
beneficiary of his estate, but did not execute this will before
passing away. This draft will is dated August 15, 2013, and has the
word DRAFT on every page. Two versions of the 2013 will were marked
as exhibits at trial, Version 1 with only the deceased's
signature and Version 2, which includes the deceased's
signature and the signature of two witnesses. The central factual
issue was whether Version 2 had been signed by the witnesses prior
to the deceased's death, or afterwards, when the respondent
realized it needed witness signatures to be valid.
The respondent's evidence, accepted by the trial judge, was
that she ran into one of the witnesses who testified that they
witnessed the deceased sign the will on August 15, 2013, then
searched through the house again before finding Version 2 of the
will on top of a kitchen cupboard.
The appellant's position was that the respondent, with the
cooperation of the two witnesses, created Version 2 after learning
that Version 1 was invalid. This was supported by the fact that the
original Version 1 was never produced at trial and that the
respondent's evidence at trial was inconsistent and lacked
credibility. The appellant maintained that the reason Version 1 was
never produced at trial is because it is the same document that
became Version 2 when "witnessed" in the weeks following
the deceased's death. His central argument was that the trial
judge misapprehended the expert evidence, which was that the
deceased's signatures on Version 1 and Version 2 were copies of
one another, and this misapprehension tainted the rest of the trial
judge's findings. At trial, the original copies of both Version
1 and Version 2 were unavailable so the judge and expert had to
rely on photocopies.
Version 2 has since been found, and the respondent filed a motion
to introduce it as fresh evidence.
ISSUES:
(1) Did the trial judge err in finding that the respondent had
discharged her burden to prove the formal validity of the will,
which she claimed to have found a number of weeks after his death
in June 2015?
(2) Can the respondent introduce Version 2 of the will as fresh
evidence on this appeal?
HOLDING:
Appeal allowed.
REASONING:
(1) Yes.
The trial judge erred in finding that the respondent had discharged
her burden to prove the formal validity of the will due to a
misapprehension of the content and significance of expert evidence.
The trial judge made a number of palpable and overriding errors
throughout the trial, with the main error being misapprehending the
expert's evidence.
The trial judge was not alive to the essence of the
respondent's claim that Version 1 and Version 2 of the will
were the same document, or that the witnesses had signed Version 1,
making it Version 2, after the deceased's death. The expert
concluded that the signatures on the photocopies of Version 1 and
Version 2 were copies of one another, and testified, as a
handwriting expert, that no two signatures are exactly alike
because of natural variations in writing. The trial judge did not
appreciate the significance of the expert's evidence that the
signatures were copies and failed to infer that this meant the
deceased could not have signed both copies. The trial judge
specifically observed that it was difficult to understand how the
expert evidence supported the appellant's theory.
The misapprehension of the expert evidence in this case was a
significant error. Had the trial judge understood the implications
of the expert evidence, she would likely have approached the rest
of the evidence differently. For example, she may have given more
weight to the fact that Version 1 was missing.
Twice, the trial judge stated that the fact that Version 1 was
missing was irrelevant to the validity of Version 2, but the
significance and relevance stems from the possibility that Version
1 had become Version 2. If the respondent's theory was correct,
and the appellant had arranged to have "witnesses" sign
the will after the deceased's death, then it would make sense
that there would be no Version 1. However, the trial judge stated
that it was up to the respondent to produce the original Version 1
of the will and call evidence as to why the expert was working with
photocopies. The trial judge further erred with this expectation,
as the onus of proving the validity of a will lies on the
propounder of the will, in this case the respondent. The very fact
that the respondent could not produce the original Version 1 is
what gave rise to the issue of the validity of Version 2.
The respondent did not meet her onus of establishing the formal
validity of the will.
(2) No.
The respondent did not meet the test for the admission of fresh
evidence because the admission of the original Version 2 is not
conclusive as to whether Version 2 of the will is valid or as to
what happened to the original Version 1. Admitting Version 2 was
not necessary to deal fairly with the issues on appeal and
declining to admit it would not result in substantial
injustice.
Pichelli v. Kegalj, 2021 ONCA 445
[Roberts, Zarnett and Sossin JJ.A.]
COUNSEL:
D. M. Cunningham, for the appellants
N. Paris, for the respondent
Keywords: Torts, Fraud, Deceit,
Misrepresentation, Breach of Trust, Unjust Enrichment, Civil
Procedure, Summary Judgment, Fresh Evidence, Rules of Civil
Procedure, Rules 20.04(2.1), 20.04(2.2), 21, 25, 25.06(8), Hryniak
v. Mauldin, 2014 SCC 7, Trotter Estate, 2014 ONCA 841, Royal Bank
of Canada v 164397 Ontario Inc, 2021 ONCA 98, Sengmueller v.
Sengmueller, 1994 111 D.L.R. (4th) 19 (Ont. C.A.)
FACTS:
The appellants invested money in a land development that never
came to fruition. The appellants argued that the respondent,
together with the defendants, carried out a fraudulent scheme for
their own personal enrichment. The appellants claimed judgment
against the respondent and other defendants jointly and severally
for general and punitive damages for breach of contract,
misrepresentation, deceit, fraud, conversion, detinue, breach of
fiduciary duty, breach of trust, and unjust enrichment.
The appellants' action was case managed with an action brought
by other investors who had also lost money in the land development.
These plaintiffs advanced similar claims against the respondent and
defendants. However, the respondent only pursued summary judgment
in this action. In response, the appellants moved to adjourn the
motion until the documentary and oral discoveries in both actions
were completed due to the risk of adverse factual and legal
consequences for the absent plaintiffs. The appellants argued the
respondent sought an impermissible form of partial summary
judgment. The motion judge dismissed this argument and granted
summary judgment. The motion judge's analysis turned on the
appellants' admissions that they had no knowledge of the
respondent's alleged role in the fraudulent scheme during the
relevant period. The motion judge concluded that the
appellants' recourse was against the other defendants and there
was no genuine issue requiring a trial.
The appellants appealed the dismissal of their action and argued
the motion judge erred in his application of the analytical
framework set out in Hryniak v. Mauldin, 2014 SCC 7 (Hryniak), and
in concluding that there were no genuine issues requiring a trial.
Additionally, the appellants move to admit fresh evidence on
appeal.
ISSUES:
(1) Can the appellant submit fresh evidence on appeal?
(2) Did the motion judge err in his analytical approach to summary
judgment?
(3) Did the motion judge err in concluding that there were no
genuine issues requiring a trial?
HOLDING:
Appeal allowed.
REASONING:
(1) Yes.
The Court held that the appellants could submit fresh evidence on
the appeal, as it was highly relevant to ascertaining the
respondent's role in the fraudulent scheme. The Court further
held that the admission of fresh evidence was necessary to deal
fairly with the issues on appeal and declining to admit the
evidence could lead to a substantial injustice: Sengmueller v.
Sengmueller, 1994 111 D.L.R. (4th) 19 (Ont. C.A.).
(2) Yes.
The motion judge erred in his analytical approach to summary
judgment, and therefore was not afforded deference on appeal:
Hryniak; Trotter Estate, 2014 ONCA 841. The motion judge did not
fully follow the framework set out in Hryniak and subsequent case
law, and failed to engage in a broad assessment of the entire
record to determine whether summary judgment was appropriate.
Instead, he focused on the adequacy of the pleadings and the
appellant's admissions that they had no contact with or
knowledge of the respondent.
The motion judge's approach caused him to reject the
appellants' contention that a trial was required and conclude
that there was no need to resort to the fact-finding powers
available under rules 20.04(2.1) and (2.2) of the Rules of Civil
Procedure. Additionally, the motion judge's approach caused the
nature of the appellants' fraud allegations and the relevant
evidentiary support to be misapprehended. The motion judge erred
when finding that the appellant's claim was limited to
fraudulent misrepresentation, and that there was no evidence that
the respondent was unjustly enriched or had received any funds the
defendant's received from the appellants. The Court ruled that
the fact that the appellants did not frame their fraud allegations
in perfectly pleaded causes of action should not have been the
focus of the motion judge's analysis. The Court held there was
no suggestion the appellants failed to plead fraud with sufficient
particularity as per Rule 25.06(8) of the Rules. The Court held
that the motion judge was required to determine whether it was
appropriate to grant summary judgment by engaging with the Hryniak
framework and taking a comprehensive look at the entire
record.
The Court held that the motion judge relied too heavily on the fact
that that the appellants did not know or have dealings with the
respondent at the relevant time, causing him to ignore evidence
that supported the respondent's participation in the alleged
fraudulent scheme and his unjust enrichment at the appellants'
expense. The motion judge was incorrect when he accepted that there
was no factual basis to support any of the causes of action pleaded
based only on the appellant's admissions. The Court held that
it was likely the appellants would not know who the respondent was
at the relevant time due to the nature of a fraudulent scheme and
that the appellants were not required to prove they knew who the
respondent was or the role he assumed in the scheme to make out
their claims.
When the relevant evidence was brought before the motion judge, he
failed to explain why he rejected it or why he preferred the
respondent's evidence when conflict arose. The motion judge was
required to determine if he could resolve this conflict by recourse
under Rules 22.04(2.1) and (2.2) of the Rules or whether they
raised genuine issues of credibility that required a trial.
(3) Yes.
The motion judge erred when concluding that there were no genuine
issues requiring a trial. The Court held that the trial judge did
not seriously engage with the Hryniak analytical framework and the
record and did not properly analyze the evidence: Royal Bank of
Canada v 164397 Ontario Inc, 2021 ONCA 98. The Court held that
after the correct application of the Hryniak framework, there are
genuine issues requiring a trial concerning the respondent's
alleged role in the fraudulent scheme.
Johnson v. Rajanna, 2021 ONCA 453
[Rouleau, Hoy and van Rensburg JJ.A.]
COUNSEL:
D. Ambrosini, for the appellant
M. Tessier, for the respondents
Keywords: Torts, Negligence, Medmal,
Dentists, Civil Procedure, Summary Judgment, Expert Evidence,
Standard of Care, Adjournments, Fresh Evidence, Experts, Expert
Report, Rules of Civil Procedure, Rule 53.03(2.1), R. v. Palmer,
[1980] 1 S.C.R. 759
FACTS:
The appellant commenced an action against the respondents for
dental malpractice arising out of the extraction of a molar in
April 2013. In February 2016, the respondents gave the notice of
their intention to seek a summary dismissal of the action because
the appellant had failed to obtain an expert report.
The appellant asked for an adjournment to provide time to retain an
expert, this was granted on a peremptory basis, and a timetable was
imposed that required the appellant to have the necessary
information by September 2019. When the motion was heard in March
of 2020, no expert report had been obtained. Instead, the appellant
produced an unsigned, undated, two-page document from an unnamed
retired dentist which stated that discrepancies suggesting
negligence and malpractice were present. The motion judge concluded
the appellant was unable to obtain an expert report to support her
claim. Given the complexity of determining liability in such cases
and the respondent's favourable expert report, the summary
dismissal was granted.
After the hearing, the appellant produced the expert report,
prepared by Dr. Kellen, who had produced the previous documents.
The opinions expressed in the report suggested that the conduct of
the respondent's indicated negligence. The appellant appealed
the motion judge's summary dismissal.
ISSUES:
(1) Should the admission of fresh evidence, the expert report, be allowed?
HOLDING:
Appeal allowed.
REASONING:
(1) Yes
The Court found that each of the four steps for the admissibility
of fresh evidence in R. v. Palmer, [1980] 1 S.C.R. 759, had been
met.
First, the appellant had attempted to obtain an expert report. She
spoke of her difficulty in finding someone to opine that a fellow
dentist was negligent. She only succeeded in finding Dr. Kellen
days before the scheduled summary judgment motion. Therefore, even
with the appellant's due diligence, the evidence was incapable
of being adduced at trial.
The second factor, that the evidence be relevant, was not in
dispute.
Third, despite the lack of a Form 53, the evidence of Dr. Kellen
was believable. However, certain deficiencies in the report, such
as "assumptions" made by the doctor, could prove fatal if
not rectified before trial.
Finally, the Court found that if the motion judge had had the
benefit of Dr. Kellen's affidavit, the judge would not have
found in the respondents' favour. The respondents had the onus
of establishing there was no genuine issue requiring a trial. The
affidavit would have shown that the appellant suffered real injury.
The motion judge, with the benefit of the report, would have found
it in the interest of justice to adjourn to allow the appellant to
fix the deficiencies in the expert report.
Laurentian University of Sudbury (Re), 2021 ONCA 448
[Hoy, Pepall and Zarnett JJ.A.]
COUNSEL:
A. Hatnay, D. Yiokaris, and S. Edmonds, for the moving party,
Thorneloe University
D. Miller, S. McGrath and D. Harland, for the responding party,
Laurentian University of Sudbury
V. DaRe, for the responding party, Firm Capital Mortgage Fund
Keywords: Bankruptcy and Insolvency,
Restructuring, Notice of Disclaimer, Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-3, Laurentian University of
Sudbury v. University of Sudbury, 2021 ONSC 3392, Laurentian
University of Sudbury (Re), 2021 ONCA 199, 9354-9186 Québec
inc. v. Callidus Capital Corp., 2020 SCC 10, Edgewater Casino Inc.
(Re), 2009 BCCA 40, Nortel Networks Corp. (Re), 2016 ONCA 332
FACTS:
On February 1, 2021, Laurentian University of Sudbury
("Laurentian") obtained protection under the
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36
("CCAA"), to permit it to restructure to emerge as a
sustainable university for the benefit of all stakeholders.
Laurentian, with assistance of the Monitor, decided to downsize its
programs and realign its arrangements with three Federated
Universities, Thorneloe University ("Thorneloe") being
one of them.
The relationship between Laurentian and the Federated Universities
consisted of the Federated Universities offering courses to
students through Laurentian and Laurentian distributing a portion
of its revenue to the Federated Universities. The Federated
Universities do not admit or register their own students, nor do
they grant their own degrees, and all students apply to
Laurentian.
Laurentian was not successful in reaching the required
readjustments with the Federated Universities by way of
court-ordered mediation. Laurentian and the DIP Lender, Firm
Capital Mortgage Fund Inc., entered into a DIP Loan Amendment
Agreement, under the condition that the disclaimers would be issued
on April 1, 2021, and become effective, binding and final on May 1,
2021. With approval of the Monitor, Laurentian sent notices of
disclaimer of the Federation Agreements and Financial Distribution
Notices to the Federated Universities.
In its report, the Monitor stated that the notices of disclaimer
would enhance the prospects of a viable compromise and that,
without them, Laurentian was unlikely to be able to complete a
viable plan.
Thorneloe brought a motion pursuant to s. 32(2) of the CCAA
challenging its disclaimer notice. The CCAA judge dismissed
Thorneloe's motion. Thorneloe sought leave of appeal on the
ground that allowing the disclaimer will result in Thorneloe's
insolvency and provide only de minimis financial benefit to
Laurentian. Additionally, Thorneloe submitted that the motive for
the disclaimer is the elimination of competition, which is
inconsistent with the duty to act in good faith.
ISSUES:
(1) Should leave to appeal be granted?
HOLDING:
Motion dismissed.
REASONING:
(1) No
The Court found no error in the CCAA judge's conclusion that
upholding the notice of disclaimer is the "least undesirable
choice" that would enhance the prospects of a viable
restructuring. The Court recognized the serious financial
implications of the disclaimer for Thorneloe, but was not persuaded
that there was any basis for interfering with the CCAA judge's
factual findings or legal conclusions.
The Court pointed to the high deference that is owed to
discretionary decisions made by judges supervising CCAA proceedings
and recognized that appellate intervention is justified only where
the judge erred in principle or exercised its discretion
unreasonably, see 9354-9186 Québec inc. v. Callidus Capital
Corp., 2020 SCC 10.
The court refused to grant leave based on four factors set out in
Nortel Networks Corp. (Re), 2016 ONCA 332. First, the proposed
appeal was not prima facie meritorious and Thorneloe's grounds
of appeal included factual assertations that ran contrary to the
CCAA judge's factual findings. Second, the Court was not
convinced that the appeal was of significance to the practice of
insolvency law, as the issues raised turned on the application of
existing law to the particular facts of the case. Third, in the
Court's view, granting leave would unduly hinder the progress
of the action and would be a distraction from the real-time
restructuring efforts. Finally, the Court agreed that the proposed
appeal was of significance to the action, but this factor alone was
no found to be sufficient basis on which to grant leave.
Manastersky v. Royal Bank of Canada, 2021 ONCA 452
[Feldman, Brown and Miller JJ.A.]
COUNSEL:
J. Devereux and G. Mens, for the appellant
N. Shapiro, for the respondent
Keywords: Contracts, Employment, Wrongful
Dismissal, Reasonable Notice, Damages, Supreme Court Act, R.S.C.
1985, c. S-26, s. 43(1.1), Manastersky v. Royal Bank of Canada,
2019 ONCA 609, Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC
26, Paquette v. TeraGo Networks Inc., 2016 ONCA 618, Lin v. Ontario
Teachers' Pension Plan, 2016 ONCA 619, Taggart v. Canada Life
Assurance Co. (2006), 50 C.C.P.B. 163 (Ont. C.A.)
FACTS:
The respondent brought a wrongful dismissal claim against the
appellant. At trial, the appellant conceded that it had terminated
the respondent's employment without cause. During his
employment, the respondent participated in a profit-sharing plan
called the Mezzanine Carried Interest Plan ("MCIP"). At
the date of termination, the MCIP had two funds. Each had a
designated Investment Period. The respondent carried his interest
in the funds from 2008-2014. Months after termination of the
respondent, the appellant wound up the two funds in the MCIP and
approved termination of future Investment Periods. The respondent
was compensated for his interest.
The trial judge awarded the respondent 1) $953,392.50 in respect of
"the lost opportunity to earn entitlements under" the
MCIP during the 18-month reasonable notice period, and 2) $190,789
in respect of the respondent's share of investment proceeds
under the MCIP for the period 2005 to 2013, as calculated using his
foreign exchange methodology.
The Court allowed the appellant's appeal regarding the damages
under the reasonable notice period and dismissed the appeal
regarding the investment proceeds using the foreign exchange
methodology: Manastersky v. Royal Bank of Canada, 2019 ONCA 609
(the "Original Decision"). Pursuant to s. 43(1.1) of the
Supreme Court Act, the case was remanded to the Court with the
direction to dispose of it in accordance with the Supreme
Court's recent decision in Matthews v. Ocean Nutrition Canada
Ltd., 2020 SCC 26.
ISSUES:
(1) Should the Original Decision of thr Court be altered on remand in light of the Supreme Court's decision in Matthews?
HOLDING:
Original Decision affirmed.
REASONING:
(1) No.
Matthews stands for two key principles: 1) When employees sue for
wrongful dismissal, they are claiming for damages as compensation
for the income, benefits, and bonuses they would have received had
the employer not breached the implied term to provide reasonable
notice; and 2) an employment contract "remains alive" for
the purposes of assessing the employee's damages. The employee
is entitled to damages for bonuses or incentives if they would have
been entitled to the same as part of their compensation during the
reasonable notice period and if the terms of the contract or bonus
plan does not take away this common law right: Matthews, para.
55.
In the Original Decision, the majority concluded that the
respondent was entitled to benefits during the reasonable notice
period with respect to the two funds because the terms of the MCIP
created a link to specific Investment Periods. The terms further
stated that the fact that the respondent has rights to money from
the two funds in the relevant Investment Periods does not give him
rights under any future Investment Period. Therefore, the MCIP
terms unambiguously restrict the respondent's common law right
to compensation beyond what was provided with respect to his
interest in the funds in the two Investment Periods.
The respondent argued that he deserved his payout from the two
funds as well as $953,392.50 in damages for the reasonable notice
period, historically annualized to the previous payout on a pro
rata basis. The Court disagreed. This recharacterized the common
law right provided by the MCIP terms to some form of annual bonus.
In fact, it is a "carried interest" plan that makes it
clear that annual payments were not made. The MCIP's formula
for calculating a bonus remains relevant to the inquiry into what
benefit the employee would have been entitled to as part of his or
her compensation during the reasonable period of notice: Paquette
v. TeraGo Networks Inc., 2016 ONCA 618, at para. 18. The Matthews
decision did not change this.
[Tulloch, Pardu and Roberts JJ.A.]
COUNSEL:
D. Goodman, for the appellant
A. Gibson and A. Reitboeck, for the respondent
Keywords: Family law, Contracts,
Interpretation, Cohabitation Agreements, Separation,
Reconciliation, Civil Procedure, Summary Judgment, Determination of
Question of Law, Family Law Act, RSO 1990, c. F3, ss 52 to54,
Family Law Rules, Rule 16(12)(a), Montague Lush and Walter Hussey
Griffith, Law of Husband and Wife within the Jurisdiction of the
King's Bench & Chancery Divisions, 3rd ed. (London: Stevens
and Sons, Limited, 1910), Creston Moly Corp. v. Sattva Capital
Corp., 2014 SCC 53, Ernikos v. Ernikos, 2017 ONCA 347, Sydor v.
Sydor (2003), 178 O.A.C. 155 (C.A.), Bailey v. Bailey (1982), 37
O.R. (2d) 117 (C.A), Bebenek v. Bebenek (1979), 24 O.R. (2d) 385
(C.A.), Nicol v. Nicol (1885), 30 Ch. D. 143, Langdon v. Langdon,
2015 MBQB 153, Sandrelli v. Sandrelli, 2015 ONSC 7913, Hartshorne
v. Hartshorne, 2004 SCC 22
FACTS:
The parties began an "off-and-on-again" relationship
in 2006, with numerous separations. This continued in 2012-2013
when the parties separated on a few occasions. In December 2012 or
January 2013, the parties decided to resume cohabitation and,
during this period, entered into the cohabitation agreement
("the Agreement") that was the subject of this appeal.
The respondent moved out of the home shortly after.
In 2014, the two reconciled and in June of 2014 married, moving
back into the appellant's home. The parties discussed adding
the respondent to the title to the matrimonial home in 2016, but
that was ultimately not pursued. The relationship broke down in
2019.
The respondent brought a motion for summary judgment, specifically,
for an Order declaring the Cohabitation Agreement invalid,
non-binding, and of no force or effect. The motion judge was meant
to decide the question of law of whether separation followed by
reconciliation terminated the Agreement. Although the notice of
motion was confined to a question of law, the motion judge went on
to make findings about the subjective intentions of the
parties.
The motion judge found the Agreement to be of no force or effect
for three reasons. First, that the common law principle holding
that reconciliation terminated a separation agreement applied to
cohabitation agreements. Second, the discussion about transferring
title to the matrimonial home showed that the parties did not
subjectively intend that the Agreement would continue to apply in
the event of a separation and reconciliation. Finally, the motion
judge held that the consideration for the $5,000 payment was the
respondent's relocation from the matrimonial home and that,
since that triggering event had occurred and payment made, the
terms of the Agreement were exhausted.
ISSUES:
(1) Did the motion judge err in concluding that a reconciliation
terminates a cohabitation agreement?
(2) Did the motion judge err in failing to interpret the whole of
the plain language of the contract in the factual context existing
when it was signed?
(3) Did the motion judge err in concluding that a payment made
pursuant to the agreement exhausted the terms of the rest of the
agreement.
HOLDING:
Appeal allowed.
REASONING:
(1) Yes
It is well-established that, at common law, a separation agreement
becomes void upon reconciliation of the parties, subject to any
clause in the separation agreement overriding the common law rule:
Ernikos v. Ernikos, 2017 ONCA 347. However, the Court refused to
extend this rule to cohabitation agreements.
The Court found that where the raison d'être of a
separation agreement is separation, and the parties then reconcile,
the foundation for the separation agreement dissolves. There was no
basis to extend this logic so as to void a cohabitation agreement
following reconciliation of the parties. Under such circumstances,
the reconciled parties have returned to the very state contemplated
by the cohabitation agreement.
The Court, citing Langdon v. Langdon, 2015 MBQB 153, held that
reconciliation leading to renewed cohabitation is more reflective
of an intention to return to a relationship where one's rights
were formerly delineated by the agreement. Therefore, the
reconciliation did not terminate the Agreement.
(2) Yes
The Court found that the motion judge had made extricable errors of
law in his interpretation of the Agreement. He approached the
interpretive process with the idea that the Agreement had to
gainsay application of the common law test. He did not analyse the
intentions of the parties at the time they entered into the
agreement nor the contractual language itself. He made a finding
about their subjective intentions not feasible on the record before
him.
The Agreement envisaged cohabitation, marriage, divorce,
separation, and death of a party. It provided that "the
parties intend by this Agreement to outline their respective rights
and obligations while cohabiting, before or during marriage, upon
death and in the event of separation". Further, the Agreement
specifically contemplated that the one party could transfer
property to the other. To this extent, the 2016 discussion of
transfer of some part of title to the matrimonial home was entirely
consistent with the cohabitation agreement.
Reading the contract as a whole, the Court concluded that the
Agreement was intended to apply despite a separation and subsequent
reconciliation preceding the final separation.
(3) Yes
The motion judge relied on Sandrelli v. Sandrelli, 2015 ONSC 7913,
in holding that "if the parties intend the agreement to
continue after they reconcile the agreement needs to state
that". Sandrelli was a case about a cohabitation agreement
that explicitly contained a clause providing for disposition of
property upon the happening of certain "triggering
events", including separation. The respondent, relying on
Sandrelli, argued that the payment by the appellant to the
respondent of $5,000 was a similar triggering event which brought
the agreement to an end.
The Court disagreed and found that the broad language of the
agreement evinced an objective intention to have the agreement
apply in general to cohabitation, including that which follows a
separation and reconciliation. One could reasonably conclude that
the $5,000 payment was intended to assist the respondent with a
move to her own accommodation. There was no presumption that
reconciliation brings an end to cohabitation agreements.
Leslie v. Encanto Potash Trading Corporation, 2021 ONCA 432
[Doherty, Benotto and Thorburn JJ.A.]
COUNSEL:
S. Hutt and M. Desforges, for the appellants
J. E. MacDonnell, for the respondent
Keywords: Contracts, Breach of Contract,
Summary Judgment, Evidence, Cross-appeal, Costs, Interlocutory
Appeal, Courts of Justice Act, R.S.O. 1990, c.43, Section 6(2),
Rules of Civil Procedure, Rule 39.03
FACTS:
The appellants, Ms. L and her company, Grip Fast Strategies
Corp. ("Grip Fast"), provided consulting services to the
respondent. The respondent stopped paying her invoices and the
appellants alleged that the respondents reneged on a stock option
promised to the appellants. The appellants sued the respondent,
Encanto, its affiliated company, Encanto Potash Trading Corp.
("EPTC") and its CEO, Mr. D. All of the defendants,
including the respondents, moved for summary judgment. The motion
judge allowed the motion brought by the respondents' affiliate
company and CEO and dismissed the action against them. The motion
judge dismissed the motion brought by the respondents and ordered
the claim against them to proceed to trial. The respondents moved
successfully for security costs against the appellant, Grip
Fast.
The appellants appealed the order dismissing the action against Mr.
D and the order for security for costs. Encanto cross appealed the
refusal of the motion judge to grant summary judgment dismissing
the claim against Encanto. All parties submitted that the appeals
from interlocutory orders were so interrelated with the issues
arising on appeal from the dismissal of the action against Mr. D
that the Court of Appeal should exercise its jurisdiction under s.
6(2) of the Courts of Justice Act, R.S.O. 1990, c.43 and hear the
interlocutory appeals.
ISSUES:
(1) Should the Court hear an appeal from the interlocutory
orders granting security for costs and dismissing Encanto's
motion for summary judgment?
(2) Did the motion judge err in dismissing the claim against Mr.
D?
HOLDING:
Appeal from interlocutory orders quashed. Appeal dismissed.
REASONING:
(1) No.
The order requiring Grip Fast to post security for costs was
interlocutory, as was the order dismissing Encanto's motion for
summary judgment. Interlocutory orders are not appealable in the
normal course to the Court of Appeal. The Court held that the
dismissal of the appeal as it related to the action against Mr. D
did not require the determination of any issues that were integral
to the other appeals. Therefore, there was no basis to invoke the
Court's jurisdiction under s. 6(2) of the Courts of Justice Act
to hear Grip Fast's appeal or Encanto's cross appeal.
Therefore, the appeal by Grip Fast and the cross appeal by Encanto
were quashed as interlocutory.
(2) No.
The order dismissing the action against Mr. D was a final order and
the appellants did have a right of appeal from that order. The
evidence before the motion judge indicated that Ms. L dealt with
Mr. D in his capacity as CEO of Encanto and the evidence spoke of
an agreement between the two parties with detailed corresponding
documentation supporting this contractual relationship. Based on
the evidence, the Court upheld the motion judge's decision that
there was no genuine issue of the identity of the contracting
parties.
The Court had an issue with the allegation that Mr. D had provided
a personal guarantee in respect to any consulting fees owed to Ms.
L. The Court held there were no details provided in the pleadings,
Ms. L's affidavit, or the evidence that would support this
claim. The Court found that many of the appellant's personal
claims against Mr. D were unsupported by evidence. There was no
evidence that Mr. D misrepresented his background to Ms. L, or if
he did, that Ms. L could reasonably rely on any representation as
to the enforceability of the agreement with Encanto. Furthermore,
the Court held there was no basis to hold that anything done by him
in respect of non-payment of the invoices was done in any capacity
other than as CEO of Encanto. For these reasons, the Court
dismissed the appeal from the dismissal of the claim against Mr.
D.
Moncur v. Plante, 2021 ONCA 432
[Fairburn A.C.J.O., Harvison Young and Jamal JJ.A.]
COUNSEL:
M. H. Twyman, for the appellant
M. Marrello, for the respondent
Keywords: Family Law, Custody and Access,
Civil Procedure, Orders, Enforcement, Civil Contempt, Carey v.
Laiken, 2015 SCC 17, Greenberg v. Nowack, 2016 ONCA 949, Chong v.
Donnelly, 2019 ONCA 799, Valoris pour enfants et adultes de
Prescott-Russell c.K.R., 2021 ONCA 366, Ruffolo v. David, 2019 ONCA
385
FACTS:
The appellant appeals (1) the motion judge's order finding
her in contempt of court for four breaches of the final parenting
order made on consent in November 2018 ("parenting
order"); and (2) the order of the motion judge ordering the
appellant to comply strictly with the parenting order and to pay
the respondent $2,500 as sanctions for contempt and $10,000 in
costs.
The parties married in 2007, had a child together in 2010, and
separated in 2015. Parenting issues were resolved through the
parenting order in 2018, which governs the parties' joint
decision-making responsibilities and parenting time, parenting
schedule, communication between the parties, residence, travel,
documents and registrations. It also provides for resolving
parenting disputes by negotiation, then mediation, and finally
arbitration.
In November 2019, the respondent sought an order that the appellant
be found in contempt of court for breaching the parenting order ten
times between December 2018 and July 2019. The respondent alleged
that the appellant overheld the child twice, attended the
child's activities and school several times during the
respondent's parenting time, unilaterally changed the date of
the child's First Communion without advising the respondent,
and failed to provide him with a copy of the child's Social
Insurance Number ("SIN") card. The motion judge held the
matter in abeyance until the parties completed arbitration in the
best interests of the child and the parties' relationship.
However, the parties did not proceed to arbitration and appeared
before the motion judge again. The respondent argued that by the
motion judge delaying his ruling, the court was causing more
conflict while the appellant argued that the contempt motion was
being "weaponized" against her and used to avoid the
arbitration.
The motion judge found the appellant in contempt for four of the
ten alleged breaches of the parenting order and ruled that the
appellant violated the parenting order by: unilaterally modifying
the child's schedule twice, unilaterally changing the
child's First Communion date without effective notice or
consultation with the respondent and failing to provide the
respondent with a copy of the child's SIN card as required. The
motion judge stated the monetary sanctions were appropriate
"given the extent of the contempt" and to impress upon
the appellant her obligation to abide by the parenting order.
ISSUES:
(1) Did the motion judge err in ruling that the appellant
intentionally breached the parenting order?
(2) Did the motion judge err in failing to consider discretionary
factors before making findings of contempt?
HOLDING:
Appeal allowed.
REASONING:
(1) No.
The Court reviewed general principles that govern the use of the
court's power to find a party in contempt for breach of a court
order. For a party to be found in contempt, three elements must be
proved beyond a reasonable doubt: (1) the order alleged to have
been breached must state clearly and unequivocally what should and
should not be done; (2) the party alleged to have breached the
order must have actual knowledge of it; and (3) the party who
allegedly breached must have intentionally done the act that the
order prohibits or intentionally failed to do the act that the
order compels: Carey v. Laiken, 2015 SCC 17; Greenberg v. Nowack,
2016 ONCA 949.
Furthermore, the Court outlined that the exercise of contempt power
is discretionary, and it should be used as a last resort. Before
making a contempt finding, a judge should consider other options:
Carey; Chong v. Donnelly, 2019 ONCA 799 ("Chong");
Valoris pour enfants et adultes de Prescott-Russell c.K.R., 2021
ONCA 366 ("Valoris"); Ruffolo v. David, 2019 ONCA 385
("Ruffolo"). Last, the Court stated that when the issue
raised on the contempt motion concerns access to children, the
paramount consideration is the best interests of the children:
Ruffolo, Chong.
The Court upheld the motion judge's finding that the appellant
intentionally breached the parenting order in four respects.
The Court rejected the appellant's arguments to the first and
second breaches regarding the child being overheld. The appellant
argued that she was justified in overholding the child in June
2019, as the respondent had not informed her which camp the child
would attend in June. Further, the appellant argued that she was
justified in overholding the child in July 2019, when she booked
the camp after having received no response from the respondent. The
Court upheld the motion judge's conclusion that the respondent
was not required to comply with the appellant's pre-conditions
for the exchange to take place and that overholding in June was
unnecessary, unjustified and in deliberate defiance of the
parenting order. Furthermore, the Court held that in July, the
respondent did object and the appellant was in violation and
deliberate defiance of the parenting order.
Third, the Court held that the motion judge was correct in finding
that the appellant breached the parenting order by unilaterally
changing the date of the child's First Communion. The Court did
not accept the appellant's argument that the breach was
unintentional because she moved the date to avoid traffic and had
attempted to contact the respondent but had the wrong email
address.
Last, the Court found that the motion judge was correct in finding
a breach of the parenting order when the appellant refused to
provide a copy of the child's SIN card to the respondent. The
Court held that the parenting order specifically stated that
"all of the child's government issued identification
documents" must be shared with the respondent and did not
accept the appellant's argument that the card was not
government issued and that the respondent already knew the number;
thus, she was not required to provide him with a copy. The Court
upheld the motion judge's reasoning that the copy of SIN card
was required by the parenting order to be provided in a timely
exchange and this obligation was not met, resulting in an
intentional breach.
(2) Yes.
The Court held that the motion judge considered the best interests
of the child but failed to consider whether a declaration of
contempt was a remedy of last resort or whether there were
alternative enforcement options. The Court held that the motion
judge did not consider any alternatives and proceeded directly from
conclusions that the appellant intentionally breached the parenting
order to declarations of contempt. The motion judge was required to
consider not only when he should issue his decision on the contempt
motion, but also whether he should exercise his discretion to
resort to a less severe enforcement option. The Court concluded
that this resulted in an error of law and it was especially
important for courts to consider alternatives in high-conflict
family disputes such as this one: Chong, at para 12; Valoris, at
para 41.
The Court set aside the findings of contempt of court and the
related sanctions and replaced them with declarations that the
appellant intentionally breached the parenting order in four
respects.
Moore v. 7595611 Canada Corp., 2021 ONCA 432
[Fairburn A.C.J.O., Harvison Young and Jamal JJ.A.]
COUNSEL:
K. L., acting in person for the appellants
C.I.R. Morrison, M. Smitiuch and L. Hamer, for the
respondents
Keywords: Torts, Negligence, Occupier's
Liability, Standard of Care, Damages, Mental Distress, Loss of
Care, Guidance, and Companionship, Cost of Future Care, Civil
Procedure, Jury Selection, Fresh Evidence, Juries Act, R.S.O. 1990,
c. J.3, s. 44(1), Fire Protection and Prevention Act, 1997, S.O.
1997, c. 4, s. 76, Fire Code, O. Reg. 213/07, Fatal Accidents Act,
R.S.A. 2000, c. F-8, s. 8(2), To v. Toronto Board of Education
(2001), 204 D.L.R. (4th) 704 (Ont. C.A.), Young v. Bella, 2006 SCC
3, Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130,
Fiddler v. Chiavetti, 2010 ONCA 210, Vokes Estate v. Palmer, 2012
ONCA 510, Rodrigues v. Purtill, 2019 ONCA 740, Gervais v. Richard
(1984), 48 O.R. (2d) 191 (H.C.), Mason v. Peters (1982), 139 D.L.R.
(3d) 104 (Ont. C.A.), Rodrigues v. Purtill, 2019 ONCA 740, Palmer
v. The Queen, [1980] 1 S.C.R. 759
FACTS:
The Respondents' daughter, A, died from severe injuries
suffered in a fire. The fire broke out while the Respondent's
daughter was asleep in the bedroom of her basement apartment
located in a rooming house. That apartment was owned by the
landlord Appellants, KL and his numbered corporation.
The secondary exit of the apartment and the apartment's windows
were blocked off, leaving the apartment's main entrance, which
was blocked by fire, the only exit. The Respondents' daughter
suffered severe burns and after several days the Respondents were
forced to remove her from life support.
The Respondents commenced an action against the Appellants in
negligence. The jury found the Appellants fell below the standard
of care of a reasonable landlord and found them responsible for the
death. The jury awarded the following heads of damage:
1. Loss of care, guidance, and companionship: $250,000 to each
Respondent;
2. Mental distress: $250,000 to each Respondent;
3. Future costs of care for the Respondent father: $174,800;
and
4. Future costs of care for the Respondent mother: $151,200.
ISSUES:
(1) Was the jury improperly selected due to an irregularity that
occurred before trial?
(2) Does s. 76 of the Fire Protection and Prevention Act preclude
the Respondents' action in this case?
(3) Was the jury's verdict unreasonable?
(4) Were the various damage awards too high?
(5) Should the Appellants be allowed to admit fresh evidence?
HOLDING:
Appeal dismissed.
REASONING:
(1) No
The Appellant argued that there was an irregularity in jury
selection. There were 41 prospective jurors who had been
inadvertently released from the jury pool. Technically, those 41
prospective jurors should have been in the jury pool used to select
the jury in this case. The trial judge learned of this and asked
the parties for their input. The Respondents made no objection. The
Appellants objected, noting they would want a new jury selection or
to proceed with a judge alone.
The Court stated that section 44(1) of the Juries Act makes it
clear that any omission to observe a provision of the Juries Act
respecting the selection of jurors is "not a ground for
impeaching or quashing a verdict or judgment in any action."
At most, the release was a minor irregularity that resulted in no
prejudice to the Appellants. Therefore, no effect was given to this
ground of appeal.
(2) No
The Appellants argued that s. 76 of the Fire Protection and
Prevention Act, 1997, S.O. 1997, c. 4, precluded the
Respondents' action in this case because it was not proven that
the fire started from anything other than an accidental source.
Section 76 reads as follows:
No action shall be brought against any person in whose house or
building or on whose land any fire accidentally begins, nor shall
any recompense be made by that person for any damage suffered
thereby; but no agreement between a landlord and tenant is defeated
or made void by this Act.
The Court held that at minimum the genesis of a fire does not
immunize a landlord from a failure to take reasonable precautions
to protect the occupants of a building from a fire, even if that
fire breaks out accidentally. The jury found that the Appellants
were responsible for the death for the following reasons: the
failure to ensure that a safety plan for the building was prepared,
approved, and implemented; the failure to maintain smoke alarms in
operating condition; and the failure to provide at least two exits
from each "floor area" of the rooming house. Therefore,
the jury's finding of negligence had nothing to do with the
source of the fire. The ground of appeal was, therefore, given no
effect.
(3) No
The jury's verdict listed three bases upon which they found the
Appellants responsible for A's death: a lack of a properly
implemented safety plan; inoperative smoke alarms; and insufficient
exits. The Court held that there was a clear factual foundation for
those findings. There was therefore no basis to find the jury's
verdict unreasonable.
(4) No
Regarding the mental distress damages award, the Appellants'
argument suggested that the award was directed at the
Respondents' grief, and should not have been awarded. The Court
disagreed, as there was clear psychological damage inflicted due to
the death of the Respondents' daughter. This psychological
damage was supported by expert testimony. The Court found no basis
to interfere with this head of damage.
The Appellants also objected to the future cost of care award,
stating that the Respondents had not shown they would require a
damage award for such care. The Court again disagreed. Expert
evidence had suggested a much higher amount for future care was
warranted, and the jury had awarded significantly less than those
amounts. The awards were therefore based upon the evidence adduced
at trial. Further, the Appellants did not object to the jury
charge. Therefore, the Court found no basis to interfere with the
awards.
The Appellants also challenged the jury's award for loss of
care, guidance, and companionship. This argument was based on the
ruling in To v. Toronto Board of Education (2001), where the court
held that the upper limit for such awards was $100,000.
The Court denied this ground of appeal. It found that caselaw held
that an appellate court should only interfere with a jury's
assessment where it "shocks the conscience of the court":
Young v. Bella, 2006 SCC 3. Further, since there is no legislative
cap on such awards, "each case must be given separate
consideration" by the courts to determine the appropriate
quantum of damages: To v. Toronto Board of Education (2001), 204
D.L.R. (4th) 704 (Ont. C.A.).
The Court held that while there was no question that the jury award
for loss of care, guidance, and companionship in this case was
high, in light of the factual backdrop of the case, it did not
constitute an amount that "shocks the conscience of the
court": Young v. Bella, 2006 SCC 3.
(5) No
Applying the criteria from Palmer v. The Queen, [1980] 1 S.C.R.
759, the Court found that the subject evidence was not sufficiently
cogent to have in any way impacted the result at trial.
Tribute (Springwater) Limited v. Atif, 2021 ONCA 432
[Strathy C.J.O., Feldman and van Rensburg JJ.A.]
COUNSEL:
A. Flesias, for the appellants/respondents by way of
cross-appeal
C. Steven and K. Chaytor, for the respondent/appellant by way of
cross-appeal
Keywords: : Contracts, Real Property,
Agreements of Purchase and Sale of Land, Damages, Mitigation,
Prejudgment Interest, Postjudgment Interest, Rules of Civil
Procedure, Rule 25.06(9)(b), Courts of Justice Act, RSO 1990, c
C43, ss 127, 128, 129, 130(1) and 130(2), Southcott Estates Inc. v.
Toronto Catholic District School Board, 2012 SCC 51, 100, Main
Street East Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R.
(2d) 401 (C.A.), 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R.
(3d) 417 (C.A.), Tribute (Springwater) Limited v. Sumera Anas, 2020
ONSC 5277, McKnight v. Ontario (Transportation), 2018 ONSC 52,
Gyimah v. Bank of Nova Scotia, 2013 ONCA 252, Bank of America
Canada v. Mutual Trust Co., 2002 SCC 43, Tilden Rent-A-Car Co. v.
Clendenning (1978), 18 O.R. (2d) 601 (C.A.), MacQuarie Equipment
Finance Ltd. v. 2326695 Ontario Ltd. (Durham Drug Store), 2020 ONCA
139, Forest Hill Homes v. Ou, 2019 ONSC 4332
FACTS:
This was an appeal from a summary judgment awarding the
respondent damages, interest, and costs for the appellants'
failure to close a residential real estate transaction. The
respondent cross-appealed the motion judge's order respecting
prejudgment and postjudgment interest.
On March 25, 2017, the appellants signed an agreement of purchase
and sale ("APS") for a new home to be built by the
respondent. The purchase price was $1,115,490 with an initial
deposit of $90,000 and a further deposit of $50,312.50. The
appellants failed to close on the extended closing date of December
17, 2018, and the APS was terminated by the respondents in January
2019.
In February 2019, the respondents commenced an action claiming
damages for breach of contract. The appellants denied the
respondent's allegations and pled that they had complied with
their obligations under the APS, that the property was not built to
specifications, and that the respondent's damages were
excessive and exaggerated.
On November 2, 2019, the respondent sold the property for $985,000
then moved for summary judgment. The motion judge granted summary
judgment for $383,636.47, with prejudgment interest fixed at
$90,717.36, costs of $20,000, and a postjudgment interest rate of
4.45%.
On appeal, the appellants no longer disputed their liability for
breaching the APS but rather appealed the amount of the judgment
and claimed that the respondent did not take reasonable steps to
mitigate its damages. They contended that the motion judge did not
address mitigation and erred by awarding damages in excess of the
amount sought in the statement of claim.
ISSUES:
(1) Did the respondents fail to mitigate their damages?
(2) Did the motion judge err in granting judgment for an amount that exceeded the respondent's claim for damages in the statement of claim?
(3) Did the motion judge err in departing from the contractual interest rate of prime plus 5% when fixing an interest rate for pre and postjudgment interest?
HOLDING:
Appeal and cross-appeal dismissed.
REASONING:
(1) No.
The respondents did not fail to mitigate their damages. If they had
placed the property on the market nine months earlier, as the
appellants argued they should have, it may have sold for a lower
selling price, as the average market value of similar homes
increased by $100,000 during those nine months. The
respondent's vice president of marketing and sales deposed that
they marketed the property internally before placing it on the
market to avoid the additional expense of paying a commission on
the sale and to avoid a reduction in the value of other homes they
were selling in the same community.
Where it is alleged that the plaintiff failed to mitigate damages,
the onus is on the defendant to prove that the plaintiff failed to
mitigate its damages. The appellants did not challenge the
respondent's evidence on cross-examination or provide their own
evidence to demonstrate a lack of mitigation.
Damages in respect of a failed real estate transaction are
generally the difference between the agreed sale price under the
APS and the market value of the property on the closing date. In
this case, the property was appraised on the closing date at
$890,000 and was sold 12 months later at $985,000. The appellant
argued that the respondent's delay in listing the property for
sale was a failure to mitigate; however, in this circumstance, it
resulted in an increased selling price and reduced the damages
payable by the appellant.
(2) No.
In the respondent's statement of claim, it claimed
"damages in the amount of $200,000 for breach of contract, or
such further or other amount as may be determined and
particularized at or before trial." Rule 25.06(9)(b) provided
that the amounts and particulars of special damages only needed to
be pleaded to the extent they were known on the date of the
pleading with notice of any further damages being delivered as they
become known, not less than ten days before trial. The statement of
claim was issued before the property had been resold and the
appellants were always apprised of the particulars of the
respondent's claim, in compliance with rule 25.06.
(3) No.
Section 130 of the Courts of Justice Act, which speaks to the
court's discretion to depart from prejudgment and postjudgment
interest under ss. 128 and 129, is not exhaustive of the
court's discretion. Courts have discretion to depart from
contractual interest rates where there are special circumstances.
Here, the special circumstances that justified a departure from the
contractual interest rate were that the respondent did not put the
property on the market for nine months after terminating the APS.
During these nine months, interest accrued on the total purchase
price rather than the difference in the purchase price and selling
price, and the respondent incurred carrying costs. These
circumstances justified the motion judge's decision to award
prejudgment interest at the prime plus 2% rate and postjudgment
interest at 4.45% rather than the contractual interest rate of
prime plus 5% interest.
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