Court Of Appeal Summaries (February 6, 2023 – February 10, 2023) - Civil Law

Good afternoon.

Following are this week's summaries of the Court of Appeal for Ontario for the week of February 6, 2023.

In Thatcher-Craig v. Clearview (Township), an Anti-SLAAP motion arose from the posting of letters from members of the community to the Township's website. The respondents owned a hops farm and wanted to expand their operations with an on-site micro-brewery and a small retail space. The respondents submitted a site plan application. The Township processed the application and placed a report from the planning department to the council on its website. An article about the proposed brewery was published in local newspapers, in response to which the Township received letters from the public commenting on the proposal, as well as the Township's failure to provide the public with adequate notice of the site plan application. The letters were posted to the Township's website, as per planning department policy. The respondents pleaded that the public comments were defamatory, inaccurate and damaging to their business, and that the Township was liable for them in negligence, for breach of fiduciary duty and defamation. The Township moved for an order dismissing the action under the Anti-SLAPP provisions in s. 137.1 of the Courts of Justice Act. The motion judge dismissed the claim in negligence but declined to dismiss the claims for defamation and breach of fiduciary duty. The Township's appeal was allowed in part, and the claim for defamation was also dismissed. The Court also commented on the latitude owed to self-represented litigants in pleadings, and the scope of qualified privilege with respect to online publication.

In Black & McDonald Limited v. Eiffage Innovative Canada Inc., the Court found that the motion judge had erred in granting a stay of proceedings in two actions arising out of a construction project, one action relating to the prime contract between the general contractor, Eiffage, and the Ministry, and the second action relating to the appellant, who was subcontracted by Eiffage in respect of the same project. The motion judge had held that British Columbia was the more convenient forum over Ontario for the consideration of the actions. The Court found that the motion judge had erred in the forum non conveniens analysis regarding the first action. In so doing, the Court found that the action should not have been stayed. The Court, having concluded Ontario was the appropriate court for the first action, held that the second action necessarily needed to be in Ontario so that they could be tried together.

In FNF Enterprises Inc. v. Wag and Train Inc., the motion judge had struck an action against LR, finding that the statement of claim did not disclose a reasonable cause of action. The appellants submitted that on the facts alleged, the motion judge erred in finding that there was no reasonable cause of action against LR based on piercing the corporate veil or under the oppression remedy, and consequently erred in not giving the appellants an opportunity to amend their claim. The Court allowed the appeal, in part, and found that with respect to the claim that value was stripped from W&T by LR (who was the sole director and shareholder of W&T), with knowledge that the corporation had incurred liabilities by breaching its lease, was actionable under the oppression remedy rather than the doctrine of piercing the corporate veil. The Court permitted the appellants to amend their statement for the sole purpose of asserting their claim for a personal remedy against LR under the oppression remedy.

In Yan v. Hutchinson, the Court dismissed a group appeal of three orders that struck the appellant's claims on the basis that they disclosed no cause of action. The College Disciplinary proceedings had found the appellant guilty of professional misconduct. The appellant believed that the investigators, lawyers and independent counsel in the disciplinary proceedings all owed her certain duties and alleged that the proceeding was unjust, defamatory, and harmful to her public reputation. The Court held that the motion judge correctly granted the motions to strike. The claims were barred either under statute, which provided the respondents general immunity from being sued as a result of disciplinary proceedings, or under the doctrine of absolute privilege. The Court concluded that the statement of claim contained radical defects incapable of being cured by amendment and dismissed the appeal in its entirety.

Other topics covered this week included a commercial lease dispute where the Court held that the order appealed from was interlocutory and was to be properly before the Divisional Court, an appeal of a dismissal order of an Anti-SLAPP action which the Court upheld, and an appeal in which the Court allowed from the Divisional Court's decision overturning an order of the License Appeal Tribunal.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78

Keywords: Insurance, Automobile Coverage, Statutory Accident Benefits, Administrative Law, Statutory Interpretation, Civil Procedure, Limitation Periods, Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10, s. 37(4), s. 37(2), s. 37(2)(g), Licence Appeal Tribunal Act, 1999, S.O. 1999, c.12, Sched. G., s. 11(6), Insurance Act, R.S.O. 1990, c. I.8, Smith v. Co-operators General Insurance Co., 2002 SCC 30, Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Beaudin v. Travelers Insurance Company of Canada, 2022 ONCA 806, R. v. Yadegari, 2011 ONCA 287, 286 C.C.C. (3d) 320, Turner v. State Farm Mutual Automobile Insurance Co., (2005) 195 O.A.C. 61 (Ont. C.A.), Ruth Sullivan, Sullivan on the Construction of Statutes, 7th ed. (Markham: LexisNexis Canada, 2022)

2602203 Ontario Inc. v. Bijan Design Inc., 2023 ONCA 81

Keywords: Contracts, Real Property, Commercial Leases, Civil Procedure, Orders, Enforcement, Writs of Possession, Appeals, Jurisdiction, Final or Interlocutory, Commercial Tenancies Act, R.S.O. 1990, c. L.7, ss. 74(1), 76(2), 78(1), Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 19(1)(b), 110(1), Hendrickson v. Kallio, [1932] O.R. 675, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375

Safavi-Naini v. Rubin Thomlinson LLP, 2023 ONCA 86

Keywords: Labour and Employment, Workplace Harassment, Sexual Harassment, Civil Procedure, Anti-SLAPP, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, s. 32.0.7, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Grant v. Torstar Corp., 2009 SCC 61, Bent v. Platnick, 2020 SCC 23

Black & McDonald Limited v. Eiffage Innovative Canada Inc., 2023 ONCA 91

Keywords: Contract, Construction, Prime Contract, Subcontract, Privity of Contract, Jurisdiction Simpliciter, Forum Selection Clauses, Forum Non Conveniens, Contra Proferentem, Multiple Proceedings, Public Policy, Article 2365, Civil Code of Québec, C.Q.L.R. c. CCQ-1991, Uniform Court Jurisdiction and Proceedings Transfer Act, Club Resorts Ltd. v. Van Breda, 2012 SCC 17, Young v. Tyco International of Canada Ltd. 2008 ONCA 709, Bank of Montreal v. Korico Enterprises Ltd. (2000), 50 O.R. (3d) 520, 190 D.L.R. (4th) 706 (C.A.), Expedition Helicopters Inc. v. Honeywell Inc., 2010 ONCA 351.

FNF Enterprises Inc. v. Wag and Train Inc., 2023 ONCA 92

Keywords: Commercial Leases, Breach of Contract, Piercing the Corporate Veil, Oppression Remedy, Improper Conduct, Business Corporations Act, R.S.O. 1990, c. B.16, s. 15, s. 92, s. 248, s. 255, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 21.01(1)(b), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(2), Buccilli v. Pillitteri, 2016 ONCA 775, Darmar Farms Inc. v. Syngenta Canada Inc., 2019 ONCA 789, Mortazavi v. University of Toronto, 2013 ONCA 655, R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441, Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Gen. Div.), aff'd [1997] O.J. No. 3754 (C.A.), Yaiguaje v. Chevron Corporation, 2018 ONCA 472, 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), Shoppers Drug Mart Inc. v. 6470360 Canada Inc. (Energyshop Consulting Inc./Powerhouse Energy Management Inc.), 2014 ONCA 85, Said v. Butt, [1920] 3 K.B. 497, J.S.M. Corporation (Ontario) Ltd. v. The Brick Furniture Warehouse Ltd. (2006), 16 B.L.R. (4th) 227 (Ont. S.C.), aff'd 2008 ONCA 183, Beckett v. Ridgeway Estates Ltd., 2019 ONSC 112, 6071376 Canada Inc. v. 3966305 Canada Inc., 2020 ONCA 428, Wilson v. Alharayeri, 2017 SCC 39, [2017] 1 S.C.R. 1037, J.S.M. Corporation (Ontario) Ltd. v. The Brick Furniture Warehouse Ltd., 2008 ONCA 183, BCE Inc. v. 1976 Debentureholders, 2008 SCC 69.

Shaulov v. Law Society of Ontario, 2023 ONCA 95

Keywords: Administrative Law, Judicial Review, Jurisdiction, Constitutional Law, Charter Rights, Discrimination, Human Rights Law, Discrimination, Motion to Strike, No Reasonable Cause of Action, Canadian Charter of Rights and Freedoms, s.7, s.15, Human Rights Code, R.S.O. 1990, c. H.19, s. 46.1(2), , Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 21.01(1)(b), Judicial Review Procedures Act, R.S.O. 1990, c. J.1, s. 8(1), Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, Tran v. University of Western Ontario, 2015 ONCA 295, Eliopoulos Estate v. Ontario (Minister of Health and Long-Term Care) (2006), 82 O.R. (3d) 321 (C.A.), Mussani v. College of Physicians and Surgeons of Ontario (2004), 74 O.R. (3d) 1 (C.A.), R. v. Schmidt, 2014 ONCA 188, 119 O.R. (3d) 145, Tanase v. College of Dental Hygienists of Ontario, 2021 ONCA 482, Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, Carroll v. Toronto-Dominion Bank, 2021 ONCA 38, Gratton-Masuy Environmental Technologies Inc. v. Ontario, 2010 ONCA 501, Carroll (Litigation Guardian of) v. McEwen, 2018 ONCA 902.

Ontario Securities Commission v. Camerlengo Holdings Inc., 2023 ONCA 93

Keywords: Debtor-Creditor, Real Property, Fraudulent Conveyance, Badges of Fraud, Creditors, Motion to Strike, Fraudulent Conveyance Act, R.S.O. 1990, c. F.29, s. 2, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 21.01(1), Wilfert v. McCallum, 2017 ONCA 895, IAMGOLD Ltd. v. Rosenfeld, [1998] O.J. No. 4690, McGuire v. Ottawa Wine Vaults Co. (1913), 48 S.C.R. 44, Cambone v. Okoakih, 2016 ONSC 79, Lad v. Marcos, 2020 ONSC 6215, Paul M. Perell, “A Pragmatic Approach to Fraudulent Conveyances”, (2005) 30:3 Advoc. Q. 373.

Thatcher-Craig v. Clearview (Township), 2023 ONCA 96

Keywords: Municipal Law, Planning By-Laws, Permitted Use, Publication, Defamation, Anti-SLAPP, Summary Judgment, Public Interest, Qualified Privilege Defence, Indemnity Defence, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, Planning Act, R.S.O. 1990, c. P. 13, ss. 22, ss. 34 and ss. 51, O. Reg. 545/06, s. 5 Municipal Act, 2001, S.O. 2001, c. 25, ss. 8, ss. 10, and ss. 11, Rules of Civil Procedure, r. 21, 1704604 Ontario Ltd.v. Pointes Protection Association, 2020 SCC 22, Bent v. Platnick, 2020 SCC 23, Pintea v. Johns, 2017 SCC 23, Gutowski v. Clayton, 2014 ONCA 921, Prud'homme v. Prud'homme, 2002 SCC 85, Ward v. McBride (1911), 24 O.L.R. 555, Baumann v. Turner (1993), 105 D.L.R. (4th) 37, Wells v. Sears, 2007 NLCA 2, Leger v. Edmonton (City) (1989), 63 D.L.R. (4th) 279, Horrocks v. Lowe, [1975] A.C. 135, Lemire v. Burley, 2021 ONSC 5036, Niagara Peninsula Conservation Authority v. Smith, 2017 ONSC 6973, RTC Engineering Consultants Ltd. v. Ontario (2002), 58 O.R. (3d) 726, Clement v. McGuinty (2001), 143 O.A.C. 328, Grant v. Torstar, 2009 SCC 61.

Yan v. Hutchinson , 2023 ONCA 97

Keywords: Civil Procedure, Motion to Strike, Reasonable Cause of Action, Professional Negligence, Disciplinary Proceedings, Defamation, Collateral Attack, Leave to Amend, Costs, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 2.1.01, r. 21.01(1)(b), Regulated Health Professions Act, 1991, S.O. 1991, c. 18, s.38, The Constitution Act, 1982, Sched. B to the Canada Act 1982 (UK), 1982, c 11, Ontario (College of Traditional Chinese Medicine Practitioners & Acupuncturists of Ontario) v. Yan, 2018 ONCTCMPAO 28, Yan v. College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario, 2022 ONSC 5464, Cottage Advisors of Canada v. Prince Edward Vacant Land, 2020 ONSC 6445, Aristocrat Restaurants Ltd. v. Ontario, 2003 CarswellOnt 5574, Conroy v. College of Physicians & Surgeons (Ontario), 2011 ONSC 324, F. (M.) v. S. (N.) (2000), 188 D.L.R. (4th) 296 (Ont. C.A.), Task Specific Rehabilitation Inc. v. Steinecke (2004), 244 D.L.R. (4th) 414 (Ont. C.A.), Deep v. College of Physicians and Surgeons, 2010 ONSC 5248, R. v. Irwin, 2020 ONCA 776, Garland v. Consumers' Gas Co., 2004 SCC 25, Cluthe Manufacturing Co. v. ZTW Properties Inc., [1995] O.J. No. 4897 (Div. Ct.), Al-Kandari v. J.R. Brown & Co., [1988] 1 All E.R. 833, Ntakos Estate v. Ntakos, 2021 ONSC 2492, Salasel v. Cuthbertson, 2015 ONCA 115, Whitby (Town) v. G & G 878996 LM Ltd., 2020 ONCA 654, Kaiman v. Graham, 2009 ONCA 77, Lysons v. Alberta Land Surveyors' Association, 2017 ABCA 7, DeMaria v. Law Society of Saskatchewan, 2015 SKCA 106, Indal Metals v. Jordan Construction Management Inc., [1994] O.J. No. 1616 (Gen. Div.), Taylor v. Tamboril Cigar Co., 2005 CarswellOnt 4775, Roche v. MacLeod Law Firm, 2018 ONSC 2760, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9.

Short Civil Decisions

Arbuckle v. Arbuckle, 2023 ONCA 80

Keywords: Family Law, Contracts, Settlement Agreements, Civil Procedure, Mediation, Partial Summary Judgment, Family Law Rules, O. Reg. 114/99

Everest Finance Corporation v. Jonker, 2023 ONCA 87

Keywords: Contracts, Real Property, Mortgages, Enforcement, Power of Sale, Civil Procedure, Costs, Full Indemnity

Lakhtakia v. Mehra, 2023 ONCA 88

Keywords: Family Law, Parenting, Best Interests of the Child, Support, Property, Restraining Orders, Civil Procedure, Jurisdiction, Costs, Full Indemnity, Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983 No. 35, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

Sutton v. Sutton, 2023 ONCA 94

Keywords: Costs

CIVIL DECISIONS

Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78

[Simmons, Huscroft and Coroza JJ.A.]

COUNSEL:

S. Chaudri and B. Tinslay, for the appellant

R. Naimark and N. Sinjari, for the respondent

FACTS:

The respondent, NV, was injured in a motor vehicle accident on September 30, 2015. He applied for income replacement benefits (“IRBs”) pursuant to the Statutory Accident Benefits Schedule (the “SABS”) and the appellant insurer paid the respondent IRBs from October 7, 2015 to December 2, 2015. On December 30, 2015, the appellant notified the respondent that his IRBs would stop as he had returned to full-time work (the “Benefits Letter”).

On September 28, 2018, the respondent filed an application before the License Appeal Tribunal (the “LAT”) disputing the appellant's decision to terminate his benefits. The appellant took the position that the respondent's application was time-barred as over two years had passed since the appellant sent the Benefits Letter. The respondent's position was that the Benefits Letter did not constitute valid notice because it did not provide a medical reason for ending the respondent's IRBs. A valid notice under s. 37(4) commences the applicant's two-year limitation period to bring an application before the LAT disputing the decision. The LAT adjudicator agreed with the appellant, finding that the respondent's claim was time-barred because the Benefits Letter met the legislative requirements under s.37(4) of the SABS, it constituted a valid notice, and the limitation period began on December 30, 2015.

The Divisional Court held that the Benefits Letter did not meet s.37(4) of the SABS, and therefore was not a valid notice and did not trigger the limitation period. The Divisional Court overturned the LAT's decision, holding that s. 37(4) required the appellant to provide medical reasons in the Benefits Letter for the stoppage of benefits.

ISSUE:

Did the Divisional Court err in its interpretation of s. 37(4) of the SABS?

HOLDING:

Appeal allowed.

REASONING:

Yes.

The Court held that the Divisional Court's interpretation of s.37(4) of the SABS was incorrect, finding that the appellant's Benefits Letter complied with the legislative requirements under s. 37(4) as it provided the respondent with clear and unequivocal notice that it was terminating the IRBs and its reasons for doing so. The Court found two distinct errors in the Divisional Court's approach to interpreting s. 37(4) of the SABS: firstly, it improperly applied the modern principle of statutory interpretation, and secondly, it wrongly concluded that s. 37(4) was an insurance coverage provision that had to be interpreted broadly.

In the Court's view, the Divisional Court failed to properly apply the modern principle of statutory interpretation when it gave a conjunctive meaning to the word “and” in the phrase “medical and any other reasons” in s. 37(4) of the SABS. The Court held that “and” in a grammatical sense can be used in the joint and several sense or only in the joint sense. To determine what “and” means in the SABS, the Court turned to a contextual analysis and found that the requirement to provide reasons in s. 37(4) is inextricably tied to the grounds for discontinuance of benefits stipulated in s. 37(2). The Court added that when the two provisions are read properly together, it is clear that the word “and” in the phrase “medical and any other reason” was intended in the joint and several sense. The Court further held that interpreting “and” in the joint sense conflicts with the joint and several nature of the grounds for termination, as set out in s. 37(4) which states that the insurer may rely on “any one or more grounds set out in s. 37(2)” in terminating benefits. Finally, with respect to the Divisional Court's interpretation, the Court noted that s. 37(4) requires notice of the insurer's actual reasons for determination; if the insurer is relying on a non-medical ground under s. 37(2), as the appellant did in this case, the provision requires only that the insurer provide notice of the cancellation of the benefits and to provide the insured with the non-medical reason for that determination.

With respect to the Divisional Court's second error, the Court held that the Divisional Court erred in its interpretation of the purpose of the notice provision. The provision was not required to be interpreted broadly, but rather, the Court held that the policy goal of the SABS requires reasons to be sufficiently explanatory to permit the insured to decide whether to challenge the denial of benefits. The addition of a line stating that there were no medical reasons for the denial of benefits would not further assist an insured in deciding whether to challenge the denial of benefits. The Court further concluded that the provision in question is not a coverage provision as it does not determine whether a person is entitled to coverage. As such, the Court held that the Divisional Court's application of the general principle to interpret insurance coverage provisions broadly was an error in law.

2602203 Ontario Inc. v. Bijan Design Inc., 2023 ONCA 81

[Paciocco, Sossin and Favreau JJ.A.]

COUNSEL:

I.N. Roher and D. Baker, for the appellant

J. Stanleigh, for the respondents

FACTS:

The appellant and the respondents were in a commercial tenancy. The appellant landlord, brought a motion to terminate the tenancy and for a writ of possession on the basis that the respondents failed to comply with a previous court order which required the payment of outstanding rent pending the trial of the action. The motion judge granted an order giving the respondents a final chance to pay the outstanding rent, which the respondents did one day beyond the deadline set by the motion judge. At a subsequent hearing, the motion judge decided not to terminate the lease, despite the late payment.

ISSUE:

Does this Court have jurisdiction over the appeal?

HOLDING:

Appeal transferred to the Divisional Court.

REASONING:

No.

The Court stated that Part III of the Commercial Tenancies Act (the “Act”) sets out the procedure a landlord is to follow to obtain a writ of possession against a tenant who is no longer entitled to occupy a rental property. Pursuant to s. 74(1) of the Act, landlords seeking this relief are to bring an application for a writ of possession to the Superior Court. In accordance with s. 76(2) of the Act, a judge hearing the application has the power to grant a writ of possession “if it appears to the judge that the tenant wrongfully holds against the right of the landlord”. As set out in s. 78(1) of the Act, an appeal lies to the Divisional Court “from the order of the judge granting or refusing a writ of possession.”

The appellant argued that the order made by the motion judge did not follow from an application brought pursuant to s. 74(1) of the Act. Specifically, the motion judge's order was not an order refusing a writ of possession arising from an application brought under Part III of the Act. Rather, the appellant argued it was based on a previous order where it was ordered that the appellant was permitted to bring a motion to terminate the tenancy if the respondents did not pay rent owing pending the trial. On this basis, the Court agreed with the appellant that s. 78(1) of the Act did not appear to apply to the appeal. However, the Court noted that this did not assist the appellant because the motion judge's order was not a final order, but rather an interlocutory order.

The Court applied the test from Hendrickson v. Kallio in deciding whether an order is final or interlocutory if it “finally disposes of the rights of the parties”. The Court noted that in this case, an order was made directing that the issues between the parties go to trial. The motion judge heard the motion that arose from this order. She decided to give the appellants one more chance to pay the outstanding rent, failing which the lease would be terminated and the appellant would be entitled to a writ of possession. She then made a subsequent endorsement finding that the respondents' payment of the rental arrears one day late due to counsel's mistake did not justify terminating the lease.

The Court held that in this context, the motion judge's order was not a final order. It did not determine the rights of the parties in the underlying action. The core dispute revolved around the issue of whether the appellant was entitled to terminate the lease and to a writ of possession based on the failure to pay rent remains to be decided and the appellant has not lost its right or ability to pursue that issue. The order made requiring the ongoing payment of rent and the motion judge's order arising from that direction were meant to preserve the respondents' right to remain in possession of the property while protecting the appellant against further unpaid rent pending trial. The motion judge's order, which was based on the previous order, did not determine any substantive rights or defences between the parties.

Safavi-Naini v. Rubin Thomlinson LLP, 2023 ONCA 86

[MacPherson, Hoy and Coroza JJ.A.]

COUNSEL:

T. Kronis, Y. Hameed, and N. Pope, for the appellant

M.L. Waddell and T.Q. Yang, for the respondents

FACTS:

The appellant was a medical resident in the internal medicine training program at the Northern Ontario School of Medicine (“NOSM”) at the time of the events in issue. The respondent KM was a senior investigator with expertise in sexual violence and sexual harassment investigations with the law firm Rubin Thomlinson LLP, the other respondent.

The respondents were retained by NOSM in 2018 to investigate the appellant's complaints of workplace harassment and sexual harassment. The complaints primarily concerned Dr. SG, the North Bay site director of NOSM's internal medicine program at the time of the complaints, but also raised concerns about Dr. SS, a NOSM faculty member (the “Doctors”).

The inquiry was required under the Occupational Health and Safety Act (“OHSA”). KM acted as the inquiry officer for the investigation and was responsible for preparing a report for NOSM. KM submitted her report, as well as two Executive Summaries, concerning the conduct of the Doctors. The Executive Summaries were provided to two staff members at NOSM and NOSM's lawyer. Dr. SG and the appellant received the summary pertaining to Dr. SG, but only Dr. SS received the summary pertaining to themselves. The summaries were not publicly disseminated. However, they were ultimately filed with the Human Rights Tribunal of Ontario as part of Dr. SG's defence to the appellant's application to that tribunal.

Before the inquiry was commenced, the appellant hired a publicist and issued a press release, which ultimately resulted in her allegations being seen by the public. In March 2021, the appellant commenced an action against the respondents. The appellant alleged that the two Executive Summaries were defamatory. In response, the respondents brought a motion to dismiss the action pursuant to the Anti-SLAPP provisions in s. 137.1 of the Courts of Justice Act (“CJA”). The motion judge granted the motion and dismissed the appellant's action.

ISSUES:

Did the motion judge err in finding that the Executive Summaries related to a matter of public interest?
Did the motion judge err in finding that the respondents' Executive Summaries were protected by the defence of qualified privilege?
Did the motion judge err in finding there was no evidence to support a finding of malice against KM?
Did the motion judge err in finding a balancing exercise favoured protection of the expression?

HOLDING:

Appeal dismissed.

REASONING:

In 1704604 Ontario Ltd. v. Pointes Protection Association (“Pointes Protection”), the Supreme Court of Canada set out the framework for applying a s. 137.1 CJA test. Pointes Protection holds that the public interest criterion is to be given “broad interpretation”. The Court noted that the expression at issue should be assessed “as a whole”, and it must be asked whether “some segment of the community would have a genuine interest in receiving information on the subject”: Grant v. Torstar Corp.

The Court found the Executive Summaries prepared by KS, and subsequently submitted to NOSM, related to a matter of public interest. The public had significant concern over sexual harassment and workplace harassment and, generally, an interest in investigations into these issues. The Court stated that the Executive Summaries engaged the public interest, because of the nature of NOSM as an educational institution, the media attention garnered, and the public safety concerns that arose from the allegations. The Court also found the act of the appellant retaining a publicist to assist to “shame” a public education institution in a relatively small community was the antithesis of trying to keep the matter private.

The respondents were retained to investigate allegations of workplace harassment and to prepare investigation reports for NOSM, as required under s. 32.0.7 of OHSA. The Court noted that pursuant to s. 32.0.7(1)(b) of OHSA, NOSM had a legal duty to provide, in writing, the results of the investigation, and any corrective action taken, to the complainant and her alleged harassers. In Bent v. Platnick, the Supreme Court of Canada found that qualified privilege exists “if a person making a communication has an interest or duty, legal, social, moral or personal, to publish the information in issue to the person to whom it is published” and the recipient has “a corresponding interest or duty to receive it”. The Court found that the respondents had a duty to NOSM to complete the investigation and to provide their report to NOSM, and NOSM had a corresponding interest or duty to receive it. The Court concluded that the respondents' provision of the Executive Summaries to NOSM fell squarely within this privilege.

The Court found the appellant's ground of appeal, anchored in malice, was groundless. The Court held that the motion judge found that there was no evidence of malice, and there was no basis to interfere in the motion judge's finding.

The Court concluded that the Court's holdings of the first three issues necessarily meant that the balancing exercise could not succeed.

Black & McDonald Limited v. Eiffage Innovative Canada Inc., 2023 ONCA 91

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

C. Afonso and L. King, for the appellants

J. Rosenthal and J. Snelgrove, for the respondents Eiffage Innovative Canada Inc., F.S., A.P., and S.A.

L. Delemere and B. Taylor-Conboy, for the respondent Liberty Mutual Insurance Company

FACTS:

Two proceedings arose out of a construction project involving a bridge over the Fraser River in British Columbia. The first respondent (“Eiffage”) was the general contractor for a project involving the expansion of the Alex Fraser Bridge located near Vancouver, British Columbia (the “Project”). The appellant and Eiffage entered into a stipulated price contract on October 31, 2018, wherein the appellant became a subcontractor for Eiffage on the Project (the “Subcontract”). Eiffage was to pay about $4.7 million for the scope of the work. The subcontract provided that the appellant was to complete its work on a timeline that would enable Eiffage to achieve a main contract “completion date” of June 28, 2019.

Ultimately, the appellant claimed that it completed all of the work under the Subcontract, but Eiffage failed to pay. Eiffage contended that the appellant did not complete its work in a timely fashion and consequently Eiffage did not meet the completion date, and as a result, the Ministry deducted late payment penalties.

The appellant commenced a proceeding in Ontario for unpaid invoice/breach of contract claims against Eiffage and tort claims arising from breach of trust against the individual defendants.

The second respondent (“Liberty Mutual”), issued a Labour & Materials Payment Bond (the “Bond”) to Eiffage on the Project. The appellant commenced a separate action against Liberty Mutual for payment under the Payment Bond.

Before the motion judge, Eiffage conceded that the Ontario court had jurisdiction simpliciter. As a result, the motion judge dealt only with the argument that Ontario was not the convenient forum for the resolution of the dispute. Eiffage, among other arguments, contended that British Columbia was the more convenient forum. Liberty Mutual contended that the Payment Bond requires that any action under it has to be commenced in British Columbia due to what it says is a choice of forum clause in the Payment Bond.

The motion judge concluded that British Columbia was the more convenient forum for the resolution of the Eiffage action, and stayed the Ontario action. The Motion judge also stayed the Liberty Mutual action but did not give reasons for that conclusion other than to say that “similarly” that action was stayed.

The appellant appealed in both proceedings from the decision of the motion judge who granted a stay of these proceedings on the basis that British Columbia was the more convenient forum for their determination.

ISSUES:

In the Eiffage Action, did the motion judge err in finding that British Columbia was the more convenient forum for the resolution of the action?
In the Liberty Mutual Action, did the motion judge err in staying the action based on its similarity to the Eiffage Action, as opposed to considering the relevant forum selection clause in the Bond?

HOLDING:

Appeals allowed.

REASONING:

Yes.

Eiffage argued that, notwithstanding it conceded that Ontario had jurisdiction simpliciter over the claim, the courts of British Columbia have exclusive jurisdiction over actions under the subcontract. Eiffage based this submission on clause 80.02 of the Prime Contract which Eiffage contended was applicable to the subcontract by virtue of Article 2.1.

The Court found that clause 80.02 was not applicable to the subcontract finding that there was nothing in the subcontract that purported to make exclusive jurisdiction clause applicable.

In his consideration of the Young factors, the motion judge found that the exclusive jurisdiction clause applied to the subcontract. The Court held that the motion judge appeared to have relied heavily on that finding for his conclusion that a stay of the Ontario action should be granted. For the reasons the Court set out above, the motion judge erred in reaching that conclusion. Given that error, the Court held that his forum non conveniens analysis was flawed and was not entitled to any deference from the Court.

In the Court's view, the location where the contract in dispute was signed favoured Ontario. The law of the contract favoured British Columbia. However, the Court held that that factor carried little weight as there was no appreciable difference in the laws of British Columbia from the laws of Ontario as they applied to the dispute.

Finally, the Court held that as the residence of the parties was Ontario, and that there was no juridical advantage to having the action proceed in Ontario over British Columbia, the analysis favoured neither province. The Court accordingly held that the Eiffage action in Ontario should not have been stayed as “on a forum non conveniens motion, the standard to displace the plaintiff's chosen jurisdiction is high”, and that standard had not been met here.

2. Yes

The Court held that Liberty Mutual' s submission rested entirely on its position that section 3(c) of the Bond required that any action be commenced in British Columbia. The Court made three findings relevant to the Bond: (1) the Bond was required by the Ministry; (2) the Bond was a standard form contract; (3) the Bond was a contract between Liberty Mutual and Eiffage, the appellant was not a party to the Bond, although it was entitled to advance a claim under it.

The Court held that the motion judge did not undertake any analysis of the proper interpretation of the words “in which the subject matter of the Contract, or any part thereof, is situated” found in section 3(c) and how those words should be applied. The Court held that the as the subcontract was negotiated and entered into in Ontario the subject matter was situated in Ontario.

The Court also found that section 3(c) of the Bond was ambiguous, and accordingly, that ambiguity should be resolved against Liberty Mutual. The Court held that, as it is fair to resolve ambiguities against the party who prepares a document, it is equally fair to resolve ambiguities against the party who imposes a standard form contract on others.

The Court held that the two actions were to be tried together. Accordingly, the Liberty Mutual action had to be heard in Ontario as that was the jurisdiction of the Eiffage action. The Court made this finding in light of its consideration that a court can relieve against the application of a forum selection clause, if the enforcement of that clause “would frustrate some clear public policy”. Having the actions proceed in multiple jurisdictions, according to the Court, may lead to the risk of inconsistent findings in the proceeds, a clear frustration of public policy.

FNF Enterprises Inc. v. Wag and Train Inc., 2023 ONCA 92

[Zarnett, Thorburn and Copeland JJ.A.]

COUNSEL:

M. Gallagher, for the appellants

P. Kraemer, for the respondents

FACTS:

The appellants owned a commercial premise in Kitchener, Ontario and leased their premises to the corporate respondent, W&T, in 2015. The premises were intended to be used for a canine grooming, training, and day care business. In September 2020, the appellants commenced an action against W&T and the individual respondent, LR, W&T's sole director, officer, and shareholder.

The statement of claim alleged that the respondents abandoned the leased premises approximately one year before their lease term ended, stopped paying rent, and did not leave the premises in the condition required by the lease. The appellants further alleged that the business continued operating in a different location in Kitchener under a different name. The identified causes of action were that: LR interfered with contractual relations and conducted herself in a manner that justifies piercing the corporate veil and imposing W&T's liabilities on LR, and that she acted in a manner that entitles the appellants to relief against her under the oppression remedy.

The motion judge struck the action against LR, finding that the statement of claim did not disclose a reasonable cause of action. The appellants submitted that on the facts alleged the motion judge erred in finding that there was no reasonable cause of action against LR based on piercing the corporate veil or under the oppression remedy, and further, that the motion judge erred in not giving the appellants an opportunity to amend their claim.

ISSUES:

Was the Appeal proper in the Court?
Did the motion Judge err in striking the appellants claim that the corporate veil be pierced?
Did the Motion Judge err in striking the oppression remedy claim against LR?

HOLDING:

Appeal allowed, in part.

REASONING:

Yes.

Section 255 of the Business Corporations Act (“OBCA”) provides that an appeal from any order made under the OBCA lies to the Divisional Court. The order of the motion judge struck the entire claim against LR which was asserted on bases that went beyond the oppression remedy. In such a case, the appeal route depends on the source of authority for each aspect of the order. If part of the relief is grounded in the OBCA, but other aspects of the order have a common law or equitable source, the entire order is appealable to the Court: Buccilli; Courts of Justice Act, s. 6(2). The Court found that although the striking of the oppression remedy claim may be an order under the OBCA, the striking of the claim to lift the corporate veil engaged a common law or equitable doctrine and therefore had a source other than the OBCA, thus the Court had jurisdiction to hear the appeal.

2. No.

The Court noted that piercing the corporate veil is an equitable exception to statutory rules. Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. sets out a two-part test for piercing the corporate veil. The first element of the test requires not just ownership or control of a corporation, but complete domination or abuse of the corporate form. The second element requires fraudulent or improper conduct and contemplated that it was that conduct that had given rise to the liabilities the plaintiff sought to enforce.

The Court stated that the object of the piercing the corporate veil claim was to hold LR liable for the obligation incurred by W&T for breaching its lease. To meet the Transamerica test, the wrongful conduct alleged against LR must have given rise to the lease liabilities, such that it is appropriate to lift the corporate veil and consider those liabilities to be hers. The appellants alleged two categories of conduct by LR: (1) she controlled W&T and thus made the decisions that it breach the lease and (2) by LR treating W&T's assets and business as her own, she stripped value from W&T knowing of its lease liabilities.

The Court found the appellants could not rely on the first category of conduct to satisfy the improper conduct element. The fact that a director or officer decided, in that capacity, that a corporation should breach a contract did not amount to the type of improper conduct that justified piercing the corporate veil.

The second category of the alleged conduct was value stripping. The appellants argued that the gist of the allegation was that LR stripped value from W&T knowing of its lease liabilities, and the amounts it owed by reason of its breach of the lease. The Court noted that the appellants did not allege that removing value from W&T knowing of the lease liabilities was what gave rise to those liabilities in the first place – they arose because of W&T's breach of the lease. The Court found this was an important distinction because it was the lease liabilities that the piercing the corporate veil claim sought to impose on LR. It was not alleged that W&T's entering the lease was an abuse of the corporate form or a shield for fraudulent or improper conduct. On the appellants' own allegations, W&T performed the lease from the time it was made in 2015 until March 2020.

The Court noted that the appellants did not allege that stripping value from W&T, knowing it had incurred liabilities because of the lease and its breach, constituted misappropriation of the appellants' funds. The piercing the corporate veil claim was not aimed at value that was “stripped” with knowledge of the lease liabilities, it was aimed at the lease liabilities themselves. But the lease liabilities had a source other than, and independent of, any alleged value stripping. The Court found the piercing the corporate veil claim had no reasonable chance of success, even accepting the facts pleaded as true and giving them the generous characterization urged by the appellants' counsel.

3. Yes.

There are two requirements for an oppression remedy claim under s. 248 of the OBCA to succeed. First, the complainant must identify the expectations it claims had been violated by the conduct at issue and show that those expectations were reasonably held. Second, the complainant must show that the reasonable expectations were violated by corporate conduct that was oppressive or unfairly prejudicial to or that unfairly disregarded the interests of any security holder, creditor, director, or officer.

In Wilson v. Alharayeri, the Supreme Court held that personal liability may be imposed on a director for oppressive conduct if two criteria are met: (1) the director had the requisite degree of involvement in the oppressive conduct so that it was attributable to them; and (2) personal liability was fit in the circumstances. An order against a director personally would be fit where it was a fair way of dealing with the situation, the order goes no further than necessary to rectify the oppression, the order serves only to vindicate the reasonable expectations of the complainant, and other forms of statutory and common law relief are not more fitting in the circumstances. In Wilson, the court identified that the obtaining of a personal benefit by the director, or the director misusing a corporate power, are situations in which it would typically be fair to impose personal liability on the director.

In the oppression remedy claim against LR, the statement of claim alleged that the appellants were creditors whose interests were subject to protection under s. 248 of the OBCA, and that conduct of LR was unfairly prejudicial to and unfairly disregarded the interests of the appellants. In deciding that the oppression remedy claim did not disclose a reasonable cause of action, the motion judge acknowledged that s. 248 of the OBCA gave the court “a broad discretion to fashion a remedy for creditors who were treated unfairly by corporations and their directors”. He also noted that the oppression remedy was not to be used to refashion a contract with a corporation to, in effect, make the directing mind of the corporation a personal guarantor of its obligations because it might seem just and equitable to do so after the fact. Where the complaint concerned a breach of contract, a contract action against the corporation was the remedy.

The court found the motion judge erred in principle in some of these conclusions. In J.S.M. Corporation (Ontario) Ltd. v. The Brick Furniture Warehouse Ltd., the Court distinguished between the situation of a creditor who could, but did not, protect itself from a risk it assumed when it entered into an agreement with a corporation, and “a creditor who finds his interest as a creditor compromised by unlawful and internal corporate maneuvers against which the creditor cannot effectively protect itself. In the latter case, there is much more room for relief under the oppression provisions than in the former case”. The motion judge viewed the claim as falling within the first situation described in J.S.M. The Court found the claim fell within the second. The allegation that L.R. stripped value from W&T knowing of its liabilities was an allegation of unlawful and internal corporate maneuvers against which the appellants, as creditors, could not effectively protect themselves.

The Court found LR, as sole shareholder was not entitled to use W&T's money as her own or to appropriate its business. Nor could she, as sole director, confer either upon herself. The power of a director to declare a dividend to shareholders is subject to the corporation being able to pay its creditors: OBCA, s. 38(3). A shareholder of a corporation does not have a right to the corporation's assets while it is ongoing: BCE Inc. v. 1976 Debentureholders. That right only arises if and when the corporation is wound up.

Accordingly, the Court held that the appellants' allegations that LR stripped value from W&T to avoid payment of amounts known to be owing to the appellants presents an arguable case for a personal remedy against her under the oppression remedy relating to stripped value. Although the appellants had not specifically alleged that they had a reasonable expectation that such conduct would not occur, reasonable expectations are objectively derived. The prohibition on a director who was also a shareholder taking assets in priority to, and to the prejudice of, unpaid creditors is a statutory one.

The Court concluded that the appellants were permitted to amend their statement of claim within 30 days of the release of the reasons to assert their claim for a personal remedy against LR under the oppression remedy.

Shaulov v. Law Society of Ontario, 2023 ONCA 95

[Feldman, Lauwers and Roberts JJ.A.]

COUNSEL:

A. Shaulov, in person, for the plaintiff

N. Hasan and K. Bernofsky, for the respondents

FACTS:

The appellant was a naturalized Canadian of West Asian origin. He came to Canada in 2001 as a permanent resident from Israel. He sought a licence to practice law in Ontario and pursued the requirements of the respondent, Law Society of Ontario (“LSO”), for the issuance of a licence to practise law.

The appellant successfully completed the articling requirement through the LSO's Law Practice Program (“LPP”) and was hired as an articling student by a Toronto law firm. His articling principal and the LPP lawyers found him to be competent. The appellant also passed the Solicitor Licensing Examination on his third attempt. However, in accordance with the LSO's Licensing Process Policies, the appellant was removed from the licensing process due to his unsuccessful fourth attempt at passing the Barrister Licensing Examination.

The appellant commenced an action against the respondents seeking various remedies, including declaratory relief that the LSO's structure, process, and method of evaluation are discriminatory and violate the appellant's rights under the Canadian Charter of Rights and Freedoms (“the Charter”) and the Human Rights Code (“the Code”); that the appellant has fulfilled all licensing requirements; and an order requiring the LSO to issue to the appellant a licence to practise law.

The respondents brought a motion under r. 21.01(1)(b) of the Rules of Civil Procedure to strike the appellant's statement of claim as disclosing no reasonable cause of action. The motion judge dismissed the appellant's claims without leave to amend against the respondents. She also dismissed his claims against the LSO under ss. 7 and 15 of the Charter and the Code with respect to alleged discrimination based on mental/cognitive disability or perceived mental/cognitive disability, without leave to amend. Finally, she dismissed the appellant's claims against the LSO under ss. 7 and 15 of the Charter and the Code with respect to alleged discrimination based on racial, ethnic and cultural

The motion judge determined that the Superior Court of Justice does not have jurisdiction over the appellant's claims that the licensing examinations' structure, process and method of evaluation are unreasonable and ultra vires the Law Society Act.

ISSUES:

Did the motion judge err in dismissing the appellant's s.7 Charter claim?
Did the motion judge err in dismissing the appellant's s.15 Charter claim?
Did the motion judge err in dismissing the appellant's Code claims against the non-LSO respondents?
Did the motion judge err in holding that the Superior Court had no jurisdiction over the appellant's administrative law claims?
Should the appellant be granted leave to appeal the cost order?

HOLDING:

Appeal allowed, in part.

REASONING:

The Court held that the motion judge correctly referenced the guiding principles on a motion to strike under r.21.01(1)(b). The Court held that the motion judge correctly understood that the appellant's statement of claim should not be struck out unless it was plain and obvious that it disclosed no reasonable cause of action and had no reasonable prospect of success.

Regarding the dismissal of the appellant's s.7 Charter claim, the Court held that the motion judge correctly determined that the appellant's claims against the LSO under s. 7 of the Charter were doomed to failure because the appellant's pursuit of a profession through the completion of the LSO's licensing requirements is not a protected interest under s. 7 of the Charter. The Court also held that the licensing requirements did not qualify as state interference with an individual interest of fundamental importance that results in a serious psychological incursion.

Yes, in part

The Court found no error in the motion judge's conclusion that the appellant's pleading of discrimination on the basis of racial, ethnic and cultural background is bald and does not contain sufficient material facts to support all the elements of a cause of action under s. 15 of the Charter or under the Code. The Court held that the motion judge made no error in dismissing the claim with leave to amend.

The Court also found that there were no grounds to interfere with the motion judge's findings that on the basis of the pleading, the appellant has no private interest standing to advance his claim for discrimination based on cognitive disability because of his admission that he does not live with a cognitive disability, and that, as a result, he has no personal legal interest in the outcome.

The Court, however, did disagree with the motion judge's narrow characterization of the appellant's claims against the LSO as based merely on two categories of discrimination. The Court held that given the factual matrix pleaded, which the motion judge had to accept as true at the pleadings stage, and the requirement to read the pleadings generously, she should have considered the tenability of the appellant's discrimination claims from the larger perspective of claims based on discrimination in general, rather than on particular categories of discrimination.

The Court found that the appellant ably clarified in his submissions, that the heart of his s. 15 Charter and Code claims against the LSO was that he was discriminated against by the LSO because of the structure and contents of its licensing examinations, which are alleged to penalize him culturally, ideologically and linguistically.

The Court held that while the claims are baldly pleaded and require amendment, the appellant articulated a basis for his claims against the LSO. The Court found that it was too early to conclude that the appellant's claims were doomed to failure and that he would be unable to allege further, material particulars to support his allegations. Accordingly, the Court granted the appellant leave to amend the s. 15 Charter and Code claims against the LSO generally with respect to discrimination and was not limited to pleading discrimination based only on race, culture and ethnic background.

The Court held that the motion judge correctly determined that s. 46.1(2) of the Code applies to the appellant's claims against the non-LSO respondents noting that s 46.1(2) prohibits “an action based solely on an infringement of a right” under the Code. As the appellant's claims against the non-LSO respondents are solely based “on an infringement of a right” under the Code, the Court held they were properly dismissed without leave to amend.

The Court held that the motion judge erred in concluding that the Superior Court of Justice had no jurisdiction to determine the appellant's administrative law claims that relate to the exercise of a statutory power because they were started by way of an action rather than an application. The Court noted that, pursuant to s. 8(1) of the Judicial Review Procedures Act, a judge of the Superior Court may retain jurisdiction over these claims.

The Court held that there was no basis to disturb the motion judge's costs order, which reflected an exercise of her discretion and the respondents' material success on their motion. The Court held that the costs awarded were fair, proportionate and reasonably within the contemplation of the appellant.

Ontario Securities Commission v. Camerlengo Holdings Inc., 2023 ONCA 93

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

A. Speigel and D. Konomi, for the appellant

M. Katzman, for the respondents Camerlengo Holdings Inc. and F.C.

Gordon Vance, for the respondent M.C.

FACTS:

The personal respondents are spouses. FC is a retired electrician and is the sole director, officer, and shareholder of the corporate respondent, Camerlengo Holdings Inc. (“Holdco”). The personal respondents purchased their family home in 1988, taking title in joint tenancy. In February 1996, FC and his partner incorporated Gridd Electrical Services Inc. (“Gridd”). Four months later, using the same lawyer and on the same day, FC and his business partner each conveyed their interests in their respective family homes to their spouses for no consideration.

It is undisputed that by 2011, FC was facing financial difficulties after a client failed to pay $1.3 million in construction draws. FC arranged for a loan from a business associate, who advanced $200,000 to Holdco through Bluestream International Investments Inc. (“Bluestream”). That loan remained outstanding. It subsequently came to light that the business associate had defrauded many of his clients – including the personal respondents, who lost over $600,000 through the fraudulent investment scheme. In 2018, the appellant, the Ontario Securities Commission (“OSC”), issued a disgorgement order against Bluestream and its affiliated entities to recover funds on behalf of the defrauded investors. As part of this effort, the OSC obtained a garnishment order against Holdco to recover the $200,000 debt owed to Bluestream.

The OSC brought an action to set aside the February 1996 transfer of interest in the home as a fraudulent conveyance within the meaning of s. 2 of the Fraudulent Conveyance Act (“FCA”). The personal respondents brought a motion to strike the OSC's statement of claim on the basis that the pleadings did not disclose a reasonable cause of action. In allowing the motion to strike with respect to the fraudulent conveyance, the motion judge held that the OSC did not plead sufficient particulars to show that Bluestream fit within the class of persons contemplated by s. 2 of the FCA, as they were not “creditors or others” at the time of the transfer of the family home in 1996.

ISSUES:

Did the motion judge err in striking out the OSC's pleading with respect to the alleged fraudulent conveyance?

HOLDING:

Appeal allowed.

REASONING:

Yes.

The case law interpreting s. 2 of the FCA is clear that a subsequent creditor – that is, a claimant who was not a creditor at the time of the transfer – can attack a transfer if the transfer was made with the intention to defraud creditors generally, whether present or future. An intent to defraud creditors generally can be demonstrated by taking steps to judgment proof oneself in anticipation of starting a new business venture. The Court noted that, to plead a fraudulent conveyance on this basis, it is not necessary that a claimant be able to identify a particular, ascertainable creditor that the debtor sought to defeat at the time of the conveyance. It is sufficient to plead facts that support the allegation that at the time of the conveyance the settlor perceived a risk of claims from a general class of future creditors and conveyed the property with the intention of defeating such creditors should they arise. These types of facts are known as “badges of fraud.”

The Court noted that an example of a badge of fraud is the precariousness of the debtor's financial state at the time of the transfer. Proof of one or more badges of fraud will not compel a finding for the plaintiff but it may raise a prima facie evidentiary case which it would be prudent for the defendant to rebut. The OSC pleaded facts which, if established on the evidence, would together provide some support for the allegation that the conveyance was made with the intention of fraudulently defeating future creditors as follows: (1) the property was transferred for no consideration, (2) the transfer was made 4.5 months after FC and his business partner incorporated Gridd, (3) FC's business partner also transferred their interest in their home on the same day and using the same lawyer, (4) the personal respondents were concerned about exposure to personal liability from FC's rapidly expanding business, and (5) FC continued to treat the property as his own.

The Court held that the pleadings identify, with sufficient particularity, the facts that could support the inference of an intention to defraud future creditors. On a rule 21.01(1) motion a pleading will only be struck if it is plain and obvious that the claim is certain to fail because it contains a radical defect. The pleaded facts recited above, which the court is required to accept as true, were sufficient to defeat the rule 21.01(1) motion, and the motion judge erred in striking the claim with respect to the conveyance of the property.

Thatcher-Craig v. Clearview (Township), 2023 ONCA 96

[Feldman, George and Copeland JJ.A.]

COUNSEL:

Sheldon Inkol and Nadav Amar, for the appellant

G.H. Leitch, for the respondents

FACTS:

The respondents purchased a property within the Township of Clearview (the “Township”) in 2011 where they started a hops farm. In 2018, the respondents wanted to expand their operation with an on-site micro-brewery and a small retail space. In order to do so, the Township required the respondents to seek a zoning by-law amendment to permit a brewery on its property. However, the respondents took the position that a brewery was already a permitted use and therefore only a site plan application was required. The site plan application, submitted in 2018, was signed on the respondents' behalf by their planner, Mr. MW. It included a consent provision that allowed the municipality to make certain information related to the application public, as well as a release and indemnity of the Township for any harm arising from the publication of that information.

Instead of processing the application, the Township began to prepare a Report to Council that a brewery was not a permitted use. Because the application was not processed within 30 days as required by the Planning Act, the respondents launched an appeal of non-decision to the Local Planning and Appeal Tribunal (the “LPAT”).

The Township then processed the application, and placed a report on its website and before the Township Council to be considered at a meeting scheduled for November 19, 2018. The report concluded that a brewery was not a permitted use and recommended that the respondents apply to the Superior Court of Justice for an interpretation of the by-law if they disagreed.

At the Council meeting, the Council went in camera to consider the respondents' site plan application because of the pending LPAT appeal. Council adopted the recommendations in the planning report. Shortly afterwards, articles were published by various newspapers, following which the Township received letters from the public commenting on the proposal as well as on the Township's failure to provide the public with adequate notice of the site plan application.

The Township provided all of the letters to the respondents and to their planner Mr. MW as they were received. Mr. MW responded but did not rebut the specific allegations contained in the letters. The Township then posted the site plan application as part of its online application database on November 26, 2018, along with its report to council. The Township posted the letters to the online database on December 18, 2018, including one from Mr. MW on behalf of the respondents, and one received later as posted on January 16, 2019. The Township posted the letters with no attempt to edit them. All of the comment letters were provided to the respondents, but they were not told that the comments were being posted on the website. On February 4, 2019, the respondents discovered the publication of the comment letters which they believed had caused a drop-off in their customer contract renewals.

On February 11, 2019, the respondents asked the Township to withdraw the site plan application and requested the Township remove their farm from its marketing brochures. On February 19, Mr. MW asked the Township to remove the public comments from its website, stating that they were false and damaging and that the respondents had no ability to respond to them. The Township first took the position that the site plan application could not be withdrawn while the LPAT appeal remained outstanding, but allowed the withdrawal once the appeal was withdrawn by the respondents. The Township removed the letters from its website around early March 2019.

On December 9, 2020, an action was commenced. Aside from comments to the effect that the property was contaminated with arsenic, the statement of claim did not specifically identify the defamatory words but stated that “the overwhelming majority of the public comments were negative. Some comments were defamatory, inaccurate and damaging”. The Township moved under s. 137.1(3) of the Courts of Justice Act (“CJA”) for an order dismissing the action as a SLAPP.

The motion judge described the framework for a motion under s. 137.1 of the CJA. He identified the purpose of the section to be “a judicial screening mechanism to weed out lawsuits that unduly limit expression on matters of public interest” known as SLAPPs: strategic lawsuits against public participation.

The motion judge referred to 1704604 Ontario Ltd. v. Pointes Protection Association and stated that the threshold burden was on the defendant to prove, on a balance of probabilities, that the impugned expression relates to a matter of public interest. The onus then shifts to the plaintiff to establish, on the lesser burden of proof, “grounds to believe” the following three factors: (1) the proceeding has substantial merit; (2) the defendant has no valid defence; and (3) the public interest in permitting the proceeding outweighs the public interest in protecting expression.

The motion judge analyzed each cause of action separately for the purpose of determining whether the claim arises from the impugned expression. The motion judge found that the defamation and the negligence claim both arose from the posted comments. However, the breach of fiduciary duty claim did not. As a result, that claim could not be dismissed on a s. 137.1 motion.

The motion judge then found, on a balance of probabilities, that the impugned expressions were on a matter of public interest. The motion judge rejected the respondent's argument that because the Planning Act did not require a public hearing for a site plan application, that meant it was a private matter. The motion judge noted that Mr. MW, on cross-examination, conceded that, depending on the circumstances, all aspects of the planning process may give rise to issues of public interest. The motion judge also relied on the fact that the Guideline and site plan application form referred to public consultation as integral to the process. He also found that the fact that the letters were not solicited by the Township, and that no guidance was given on what should be included, did not undermine their public interest nature. Lastly, he rejected the argument that the fact that the Council heard the matter in camera because it was before the LPAT, undermined the public interest nature of the comments.

Turning to the issues that the respondents had to establish on the basis of “grounds to believe”, the motion judge found no evidence that the negligence claim had substantial merit and that claim was dismissed. Turning to the defamation claim, the motion judge was satisfied that there were grounds to believe that the claim had substantial merit and that the respondents had suffered damage. The Township raised four defences: justification, fair comment, qualified privilege and the signed release and indemnity. The motion judge found that the respondents had met their onus with respect to each of the four defences and that none of the defences had a real prospect of success. The respondents argued that either qualified privilege did not attach to the comments, or the comments exceeded the scope of any privilege. The motion judge considered six factors in determining the prospect of success of the defence: (1) the Township did not solicit the comments; (2) the site plan application calls for a less formal planning process with no mandatory public meeting; (3) the Guideline does not say that comments from the public would be posted on line; (4) the content of the posted comments was largely irrelevant to the issue of a micro-brewery; (5) the content was available to anyone using the internet; and, (6) the Township published the comments without giving any guidance to ensure that the information was appropriate. Based on those factors, the motion judge concluded that either qualified privilege did not arise, or its scope was exceeded.

Having found that the respondents' defamation claim had substantial merit and that the Township's proposed defences had no reasonable chance of success, the final factor under s. 137.1(4)(b) was to weigh the public interest in allowing the claim to proceed against the public interest in protecting the challenged expression.

The motion judge inferred from the record that the respondents had suffered substantial monetary harm in the form of lost sales due to the publication of the comments on the Township's website and the fact that they were easily accessible through a Google search or online search engine. He also found that the comments would have had a negative impact on the respondents' reputations. He concluded that the proceeding was not aimed at undermining public debate on planning issues and that the public interest in allowing it to proceed outweighed the public interest “in protecting the specific expression in question.”

ISSUES:

Did the motion judge err by treating the statement of claim as sufficiently pleading the specific allegations of defamatory expression because the respondents were self-represented litigants?
Did the motion judge err by finding that the Township's four potential defences had no real prospect of success?
Did the impugned letters remain posted on the Township website after the site plan process was complete and therefore outside the privileged occasion?
Did some or all of the posted comments exceed the limits of the reciprocal duty or interest of the Township and the residents to conduct a transparent and collaborative site plan process?
Did the motion judge err in his interpretation of “indemnification”?
Did the motion judge err by failing to dismiss the claim for breach of fiduciary duty?

HOLDING:

Appeal allowed, in respect of the defamation action.

Appeal dismissed, in respect of the breach of fiduciary duty claim.

REASONING:

Yes.

In the Court's view, the motion judge erred in law in his treatment of the statement of claim. The Court explained that the motion judge stated more than once that he was granting some latitude to the plaintiffs in respect of the statement of claim because they were self-represented when they commenced the claim. The motion judge referred to s. 137.1(6) which prevents a party from amending its pleadings once the motion is brought, in order to avoid the dismissal of the action. Nevertheless, the Court found that the latitude the motion judge granted was to base the analysis of the s. 137.1 motion to dismiss and in particular, the potential defences to the defamation claim, on the basis of the whole record before him rather than just the statement of claim

The Court clarified that while it is within the discretion of a motion or trial judge to control the court process and grant latitude to a self-represented litigant on procedural issues, the Court explained that that discretion does not extend to rectifying substantive legal deficiencies. The Court explained that the prohibition against amending a claim once a motion is commenced arises from the strict pleading requirements of a defamation claim.

Yes.

The Court found that the motion judge erred in law by failing to determine whether the required reciprocal duty or interest by the Township to its constituents existed and by not precisely defining the occasion of qualified privilege, in order to then address whether it was exceeded by the publication of any of the impugned letters.

The Court clarified that privilege has been applied not only to municipal councillors but also to communications to council from a constituent. The issue was whether the occasion of the privilege extends beyond a council meeting to the entire public land use planning process conducted by the Township and mandated by both the Planning Act and the Municipal Act, and if so, whether it extends to the posting of the public information on the Township website.

The motion judge referred to three factors that indicated that the defence of qualified privilege did not arise: (1) the Township did not solicit comments on the site plan application, (2) no public hearing is required for a site plan application, and (3) the Guideline does not say that public comments will be posted on the website. The Court held that the motion judge erred in his approach by improperly narrowing the occasion from one grounded in public participation and municipal transparency in local land use planning to one defined by technicalities of the particular process.

The Court found that the motion judge erred by failing to define the scope of the occasion, or to the extent he considered it, he took a narrow technical approach rather than focusing on the social utility of protecting the communication from civil liability in the context of the municipal planning process and the public's role in that process. The Court concluded that qualified privilege attached not only to council meetings but to the entire public planning process including the material received in response to the respondents' application and posted on the Township's publicly available website.

3. No.

The respondents submitted that since the comments were not solicited by the Township but sent in by members of the public in response to the newspaper article reporting on council's rejection of the site plan application process, they were posted outside the time of the site plan process and thus not protected by qualified privilege.

The Court did not give effect to this submission and stated that courts considering the defence of qualified privilege, must be cautious against attaching too much weight to the matter of timing without regard to the circumstances and nature of the issue under consideration. The Court noted that arguably the site plan process remained ongoing while council held off on addressing the application on appeal to the LPAT. Council made a preliminary procedural decision, but had not addressed the merits of the site plan application. The concerns of the residents over the proposed micro-brewery had not been addressed because the procedural issue had yet to be resolved by the LPAT or the Superior Court of Justice.

4. Yes.

The Court found there was some potential for the defence to be successful and had a real prospect of success. The Court explained that that the motion judge appeared to base his conclusion of success on the following three factors: relevance, the potential audience went beyond the residents of the Township, and the lack of the Township's instructions to the public regarding appropriate content for public comments.

The Court explained that the fact that the letters contained negative comments about the respondents and their operation did not make them irrelevant and did not result in the loss of the protection. The Court found that the letters were relevant to the site plan process. The Court found that the motion judge focused on certain negative words used to describe the respondents, taken out of context of the entire letters.

The Court stated that to address the issue of the potential audience going beyond the residents of the Township, they must look at the purpose of the Township website and who are the people most affected by it. The Court found that the purpose of the website is to keep the residents of the Township informed of and the opportunity to be involved in all matters that may affect their rights, obligations, and daily life as residents. Therefore, the Court reasoned that the residents are the target audience of the website and are the people most likely to access it. The Court concluded that, while the content is accessible to others, this does not undermine the reciprocal duty and interest between the Township and its residents and the fact is that today a website is the most efficient, accessible and cost-effective method of allowing the public access to government information.

The Court explained that the comments were published by the Township as a matter of policy for transparency, full disclosure and participation. As a course of prudence, the Township may wish to give guidance to those who want to comment on planning issues, to best ensure that comments are relevant and do not exceed the scope of the qualified privilege. However, the Court found that the failure to do so did not change the analysis for deciding whether any of the content of the posted letters exceeded the privilege.

Accordingly, the Court held that the potential for the defence to be successful weighs more in the Township's favour and had a real prospect of success. Thus, the conditions for not dismissing under s.137.1(4)(ii) was not satisfied and the proceeding in defamation must be dismissed.

5. Yes.

The Court found the motion judge erred in his interpretation of the indemnity clause. The Court explained that the site plan application contained a release and indemnification clause regarding “any responsibility or consequences rising from publishing or releasing the application and supporting or associated information”. The motion judge found that “commenting letters or reports issued by the municipality and other review agencies” was not to be read disjunctively. The Court reiterated that typically, the interpretation of “or” is disjunctive while “and” is conjunctive unless it should be read vice versa to avoid absurdity.

In addition, the Court found that there was no evidence that the municipality or other review agencies sent commenting letters. However, there was evidence that their comments were made into reports. There was also evidence that the practice of the Township is to make all commenting letters from the public available to the public along with all the other documentation relating to the application. As such, the Court found that it would be anomalous for the Township to seek an indemnity that does not include all of the information that it makes available to the public. Moreover, the Court explained that the full paragraph of the indemnification is clear in its purpose to engage the public and thus the indemnification defence would have had a good prospect of success.

6. No.

The Court held that since the Township did not bring this issue forward other than under s. 137.1, there was no basis to interfere with the disposition made by the motion judge.

Yan v. Hutchinson, 2023 ONCA 97

[Feldman, Lauwers and Roberts JJ.A.]

COUNSEL:

N.X.Y.Y, acting in person

A. LeDrew and C. Breukelman, for the respondents, G.H. and S.C.Y.

G. Hnatiw and L. Snowdon, for the respondents, R.C.D., M.P., E.R. and R.K.M

I. Sinke, for the respondent, E.L.R

FACTS:

The appellant, NY, was a practitioner of traditional Chinese medicine in Hamilton. She had been licensed by the College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario since 2013. The College brought disciplinary proceedings against her. The College's Discipline Committee found the appellant guilty of professional misconduct.

After NY became aware that the Committee's reasons for the decision had been posted and were publicly accessible on CanLII, she started 19 separate claims against multiple defendants who were involved in the College's investigation and in the disciplinary proceedings. She believed that the investigators, lawyers and independent counsel in the disciplinary proceedings all owed her certain duties. She felt aggrieved by the Discipline Committee's decision, which she saw as unjust, defamatory, and harmful to her public reputation.

The defendants brought successful motions under r. 21.01(1)(b) of the Rules of Civil Procedure, to strike NY's statements of claim on the basis that they disclosed no cause of action.

The appeal was a grouped by NY from the three orders striking her claims.

ISSUES:

Did the motion judge err in law on the 21.01(1)(b) motions to strike?
Do the allegations disclose a reasonable cause of action for defamation, professional negligence, misrepresentation and breach of due process?
Should the appellant be granted leave to amend the claim?
Are the costs awards unreasonable?

HOLDING:

Appeal dismissed.

REASONING:

The Court held that the motion judge applied the correct legal test on a r. 21.01(1)(b) motion to strike citing the following established principles from Cottage Advisors of Canada v. Prince Edward Vacant Land. The Court confirmed that a claim will be found legally insufficient if its allegations “do not give rise to a recognized cause of action or it fails to plead the necessary elements of an otherwise recognized cause of action … [A] plaintiff must, at minimum, plead the basic elements of a recognized cause of action pursuant to which an entitlement to damages is claimed. Vague allegations that make it impossible for [the defendant] to reply should be struck”: Aristocrat Restaurants Ltd. v. Ontario.

The Court held that s. 38 of the Regulated Health Professions Act (“RHPA”) provides general immunity to the College and all participants in disciplinary proceedings. Accordingly, the appellant's claims were barred by s. 38 of the RHPA. The Court found that the motion judge correctly found that no allegations of bad faith were particularized in the statements of claim that could defeat this immunity.

Second, the Court confirmed that s. 36(3) of the RHPA provided that any record of a proceeding under the RHPA, including reports, documents or things prepared for, or a statement given at such a proceeding, along with orders or decisions made in such a proceeding are inadmissible in a civil proceeding. The Court noted that these rules are to encourage reporting of complaints and ensure that those complaints are fully investigated and fairly without the fear that a document prepared for the College proceedings can be used in a civil action.

Third, the Court noted that a party who objects to a tribunal's decision could challenge that decision by appeal, if the legislation permits an appeal, or by judicial review. NY appealed the panel's decision to the Divisional Court. But an aggrieved person is not permitted to attack a tribunal's decision in another proceeding as NY did in these actions. The Court held that this was known as a collateral attack and was not permitted.

Fourth, the Court found that a number of the defendants were lawyers whom NY sued for their conduct in their roles as lawyers. The motion judge correctly noted: “In general, a lawyer owes a duty to his or her client and does not owe a duty to non-clients.”

Fifth, NY sued several parties for defamation. However, the Court noted that the law of defamation bars a lawsuit against someone who is protected by “absolute privilege” for utterances in court or tribunal proceedings. The motion judge correctly instructed himself on the law, citing Salasel v. Cuthbertson.

Sixth, the appellant proposed several new causes of action on appeal, namely violations under ss. 7, 12, and 15 of the Canadian Charter of Rights and Freedoms (the “Charter”), the tort of internet harassment, and the tort of intentional infliction of mental suffering. The appellant's statements of claim did not plead these causes of actions, their material elements, or any material facts. Ultimately, the Court held that parties could not bring forward new issues on appeal. Even if the appellant was permitted to raise these new causes of action on appeal, it was plain and obvious that they could not succeed. All of the alleged causes of action were barred by s. 38 of the RHPA. The causes of action relating to the tort of internet harassment and the tort of intentional infliction of mental suffering were also derivative of the defamation claims, because they appeared to attack the publication of the disciplinary decision. The Court also noted that the claims were covered by absolute privilege.

The Court held that the law afford a plaintiff the opportunity to amend their pleadings “unless the statement of claim contains a ‘radical defect' incapable of being cured by an amendment”: Indal Metals v. Jordan Construction Management Inc. The motion judge found that the appellant's claims contained flaws that could not be cured by amendment.

The motion judge also found that the claims constituted a collateral attack on the College's disciplinary proceedings. Th Could held that there was no doubt that the appellant's claims in this case were an attempt to indirectly attack the disciplinary and related proceedings, and in this way, they are an abuse of process as he found. Accordingly, no cure of the pleadings was possible. The appellant's oral submissions attacked the Discipline Committee's decision, further supporting the motion judge's finding that these actions were an abuse of the process of the court. NY could seek appellate review of the Committee's decision, as was done in her appeal to the Divisional Court. However, her claims against the respondents in these appeals are improper collateral attacks on the Committee's decision.

The Court held that strong grounds were required for a court to grant an application for leave to appeal a costs award. A court should only set aside a costs award on appeal where there has been an error in principle or if the costs award is plainly wrong. The appellant did not point to any such error in principle, and the Court discerned none, nor was the costs award plainly wrong.

SHORT CIVIL DECISIONS

Arbuckle v. Arbuckle, 2023 ONCA 80

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

G. Joseph and J. McArthur, for the appellant

G. Karahotzitis and C. Amiri, for the respondent

Keywords: Family Law, Contracts, Settlement Agreements, Civil Procedure, Mediation, Partial Summary Judgment, Family Law Rules, O. Reg. 114/99

Everest Finance Corporation v. Jonker, 2023 ONCA 87

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

D.G. Boghgosian and G.M. Pakozdi, for the appellant

R.J., acting in person

Keywords: Contracts, Real Property, Mortgages, Enforcement, Power of Sale, Civil Procedure, Costs, Full Indemnity

Lakhtakia v. Mehra, 2023 ONCA 88

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

A. Black and S. Boyle, for the appellant

S. Benmor and M. Leslie, for the respondent

Sutton v. Sutton, 2023 ONCA 94

Doherty, Zarnett and Sossin JJ.A.

COUNSEL:

J. Sutton, acting in person

M. Ibghi and T. Garton, for the respondent

Keywords: Costs

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

Canada: Court Of Appeal Summaries (February 6, 2023 – February 10, 2023)
Blaney's Appeals

Table of Contents

Arbuckle v. Arbuckle, 2023 ONCA 80

Everest Finance Corporation v. Jonker, 2023 ONCA 87

Lakhtakia v. Mehra, 2023 ONCA 88

Sutton v. Sutton, 2023 ONCA 94

CIVIL DECISIONS

Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78

2602203 Ontario Inc. v. Bijan Design Inc., 2023 ONCA 81

Safavi-Naini v. Rubin Thomlinson LLP, 2023 ONCA 86

Black & McDonald Limited v. Eiffage Innovative Canada Inc., 2023 ONCA 91

FNF Enterprises Inc. v. Wag and Train Inc., 2023 ONCA 92

Shaulov v. Law Society of Ontario, 2023 ONCA 95

Ontario Securities Commission v. Camerlengo Holdings Inc., 2023 ONCA 93

Thatcher-Craig v. Clearview (Township), 2023 ONCA 96

Yan v. Hutchinson, 2023 ONCA 97

SHORT CIVIL DECISIONS

Arbuckle v. Arbuckle, 2023 ONCA 80

Everest Finance Corporation v. Jonker, 2023 ONCA 87

Lakhtakia v. Mehra, 2023 ONCA 88

Sutton v. Sutton, 2023 ONCA 94

Canada: Court Of Appeal Summaries (February 6, 2023 – February 10, 2023) Blaney's Appeals

Table of Contents

CIVIL DECISIONS

SHORT CIVIL DECISIONS

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Canada: Court Of Appeal Summaries (February 6, 2023 – February 10, 2023)
Blaney's Appeals