Court Of Appeal Summaries (September 18 – September 22) - Civil Law

Good afternoon.

Following are this week's summaries of the Court of Appeal for Ontario for the week of September 18, 2023. It was a rather light week.

Topics covered this week included lawyers' professional discipline, reopening an appeal dismissed through the fault of counsel who failed to show up while still on the record, fresh evidence in a contract case stayed on jurisdictional grounds, and the enforcement of a default judgment made by a Russian court.

Wishing everyone a nice weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Deokaran v. Law Society of Ontario, 2023 ONCA 602

Keywords: Administrative Law, Regulated Professions, Lawyers, Civil Procedure, Appeals, Extension of Time, Reasonable Apprehension of Bias, Courts of Justice Act, R.S.O. 1990, c. C.43 s.6, Paulsson v. University of Illinois, 2010 ONCA 21, Kefeli v. Centennial College of Applied Arts and Technology (2002), 23 C.P.C. (5th) 35, 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2015 ONCA 5, Overtveld v. Overtveld, 2021 ONCA 930, R. v. S. (R.D.), [1997] 3 S.C.R. 484

Justein v. DeFi Technologies Inc., 2023 ONCA 615

Keywords: Contracts, Stock Options, Corporations, Oppression, Remedies, Damages, Business Corporations Act, R.S.O. 1990, c. B. 16, s. 248

Agrest v. Pekker, 2023 ONCA 616

Keywords: Civil Procedure, Judgments, Enforcement, Insufficient Notice, Expert Report, Civil Procedure Code of the Russian Federation, Beals v Saldanha, [2003] 3 SCR 416

Pomata Investment Corp. (Treasure Hill Homes) v. Yang, 2023 ONCA 618

Keywords: Civil Procedure, Appeals, Dismissal as Abandoned, Setting Aside, Re-hearing, Representation by Lawyer, Rules of Civil Procedure, Rule 15.05, Pomata Investment Corp. (Treasure Hill Homes) v. Yang, 2022 ONCA 468, Meridian Credit Union Limited v. Baig, 2016 ONCA 942

Tewari v. McIntyre, 2023 ONCA 628

Keywords: Civil Procedure, Costs, Lack of Jurisdiction, Fresh Evidence Motion, Non-Disclosure Agreement, Palmer v The Queen, [1980] 1 SCR 759, Barendregt v Grebliunas, 2022 SCC 22, 469 D.L.R. (4th) 1, Hamilton v Open Window Bakery Ltd, 2004 SCC 9

Fernandez Leon v. Bayer Inc., 2023 ONCA 629

Keywords: Torts, Negligence, Product Liability, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Amending Pleadings, Rules of Civil Procedure, Rule 21,01(1)(b), McHale v Lewis, 2018 ONCA 1048, Klassen v Beausoleil, 2019 ONCA 407, Burns v RBC Life Insurance Company, 2020 ONCA 347, Tran v University of Western Ontario, 2015 ONCA 295, Miguna v Ontario (Attorney General) (2005), 205 OAC 257, Dawson v Rexcraft Storage & Warehouse Inc. (1998), 164 D.L.R. (4th) 257 (Ont CA), Rausch v. Pickering (City), 2013 ONCA 740, Kuiper v Cook (Canada) Inc., 2018 ONSC 6487, Martin v Astrazeneca PharmaceuticalsPlc, 2012 ONSC 2744, Vester v Boston Scientific Ltd., 2015 ONSC 7950

9383859 Canada Ltd. v. Saeed, 2023 ONCA 627

Keywords: Civil Procedure, Appeals, Orders, Security for Costs, Enforcement, Rules of Civil Procedure, r. 61.06(2), Virc v. Blair (2016), 134 O.R. (3d) 795 (C.A.), Dataville Farms Ltd. v. Colchester (Municipality), 2014 NSCA 95, 9383859 Canada Ltd. v. Navaratnam, 2021 ONCA 210, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184

CIVIL DECISIONS

Deokaran v. Law Society of Ontario, 2023 ONCA 602

[Tulloch C.J.O., Lauwers and Miller JJ.A]

COUNSEL:

G.D., acting in person

S. Wishart, for the responding party

Keywords: Administrative Law, Regulated Professions, Lawyers, Civil Procedure, Appeals, Extension of Time, Reasonable Apprehension of Bias, Courts of Justice Act, R.S.O. 1990, c. C.43 s.6,Paulsson v. University of Illinois, 2010 ONCA 21, Kefeli v. Centennial College of Applied Arts and Technology (2002), 23 C.P.C. (5th) 35, 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2015 ONCA 5, Overtveld v. Overtveld, 2021 ONCA 930, R. v. S. (R.D.), [1997] 3 S.C.R. 484

FACTS:

On June 12, 2023, three days before a motion for an extension of time was set to be heard, the appellant amended her notice of motion. She added a request for an order setting aside the Divisional Court's decision on the basis of a reasonable apprehension of bias. The motion judge adjourned the amended motion to a three-judge panel.

The addition of the bias allegation did not alter whether the appellant's proposed appeal met the test for an extension of time. The appellant met the timeline for filing the notice of motion for leave to appeal. However, she did not meet the deadline for the motion record and factum. A week beyond the deadline, the appellant moved for an extension of time to file her factum and motion record.

Leading up to the Divisional Court hearing, the appellant was represented by a lawyer who was on the record for her and who filed the documentation necessary for the hearing. However, the appellant made submissions on her own behalf. The practice of the Divisional Court is to record hearings in which self-represented litigants are involved. However, in this case the hearing was not recorded. There was no inference of malfeasance related to the lack of a recording.

ISSUES:

Did the appellant meet the four factors relating to a motion for an extension of time to perfect the motion?
Was there a reasonable apprehension of bias against the appellant?

HOLDING:

Appeal dismissed.

REASONING:

The factors relating to the appellant's motion for an extension of time to perfect the motion are (1) whether she had an intention to appeal within the time for bringing an appeal; (2) the length of the delay, and any explanation for the delay; (3) any prejudice to the respondent caused by the delay; and (4) the justice of the case.

i. The appellant's court filings show that she intended to appeal from the Divisional Court's decision within the time for bringing an appeal, even though the amendment to add the bias allegation was late-breaking.

ii. The appellant's factum was only filed over a month late and it did not address the grounds raised in the original motion. The appellant provided the court with a motion record concerning the issues raised in the original motion for leave four months after the filing deadline had passed in relation to the original motion for leave to appeal. The appellant explained that the Divisional Court had no transcripts or recordings of her hearing, which were "necessary, required and imperative" to her appeal in order to establish a reasonable apprehension of bias.

iii. The Law Society of Ontario's argument that it was prejudiced by the delay because it considered the appellant to be a vexatious litigant was not the sort of prejudice contemplated by the test.

iv. The merits of the proposed appeal, as laid out in the original notice of motion for leave to appeal, were limited. The notice stating that the Court's reasons deprived the appellant of her right to procedural fairness, lacked evidence and argument. There was nothing to show that the appeal on those grounds had merit.

The appellant did not meet the high threshold for bias allegations against members of the Divisional Court. The appellant contended that the lack of transcripts from the Divisional Court made the decision unreviewable because it eliminated the evidence for bias. The appellant made two claims to support a reasonable apprehension of bias. First, was confusion around whether the appellant was self-represented before the Divisional Court, and speculation that one of the panel judges must have said she was not self-represented. Second, that the panel members demonstrated that they had closed their minds and determined her to be guilty. There was a lack of evidence to support these claims.

Justein v. DeFi Technologies Inc, 2023 ONCA 615

[Fairburn A.C.J.O., Feldman and Sossin JJ.A.]

COUNSEL:

K. Richard, for the appellant
G. Latner and M. Siek, for the respondents

Keywords: Contracts, Stock Options, Corporations, Oppression, Remedies, Damages, Business Corporations Act, R.S.O. 1990, c. B. 16, s. 248

FACTS:

The appellant's board of directors had approved a resolution recognizing one of the respondents, JW, as an advisor to DeFi and approving the grant of 750,000 share options to him. JW had agreed to split the option with the other respondent, Z.J.

On September 3, 2021, the respondents attempted to exercise 367,500 options, but were advised by counsel to the appellant that the option grant had been cancelled because the respondents had not met the requirements of DeFi's Stock Option Plan, specifically, they were not "consultants" within the meaning of the Plan.

The respondents on appeal brought an application to seek damages for deliberate breach of option agreements under either contract law or as oppression under s. 248 of the Ontario Business Corporations Act.

The application judge determined that the power rested with the board of directors to determine optionee eligibility, and that the board resolution had made the respondents eligible optionees, approved the grant of options, and recognized JW as an advisor. There was no board resolution cancelling the option agreements. The application judge held that the respondents' reasonable expectations were that they would receive the 750,000 options, which was not met.

The application judge concluded that the appropriate remedy for breach of contract and for oppression was to put the respondents into the same position they would have been in if the appellant had allowed them to exercise the options. Accordingly, the application judge awarded 750,000 options.

ISSUES:

Did the application judge err by failing to make a finding of fact as to whether the respondent was an eligible optionee in the appellant's options plan?
Did the application judge err in considering the oppression remedy, specifically, whether there existed a reasonable expectation that the respondents would be able to exercise 750,000 options?
Did the application judge err by failing to make the necessary findings of fact to allow for a calculation of damages?

HOLDING:

Appeal dismissed.

REASONING:

The Court noted that the application judge was not required to resolve this issue, and that paras. 26-27 of her reasons demonstrated her commonsense approach to the matter. The Court concluded that the Board was to decide who was eligible to receive options. The Board had clearly determined that the respondents were eligible in accordance with the resolution.

The Court disagreed with the appellant's argument that the respondents provided no services in exchange for those options and that the application judge failed to take this into account.

The respondents had met their burden of proof that the appellant corporation acted in a manner that defeated their reasonable expectations that they would receive 750,000 options as advisors to the company. There was no evidence to suggest that the respondents walked away from their responsibilities as advisors. Although there was conflicting evidence about how much the respondents did or did not do for the company, the Court noted that the fact that they remained in an advisory role was unchallenged at the application.

The application judge had asked the parties to endeavour to quantify the damages, and subsequently, chose "the exercise value of the options at the average (mean) of the highest and lowest price during the Period." The Court stated that the application judge could not be faulted for choosing an option that was jointly suggested to her by the parties as a means by which to calculate damages.

Furthermore, the Court rejected the appellant's argument that the respondents should not have been entitled to damages beyond the value of the 367,500 options for which they initially provided notice. This is because the respondents were unable to exercise the options in accordance with the plan after the plan had been repudiated.

Agrest v. Pekker, 2023 ONCA 616

[Tulloch C.J.O., Lauwers and Miller JJ.A.]

COUNSEL:

P. Bakos, for the appellant

B. Brooksbank and J. Martschenko, for the respondent

Keywords: Civil Procedure, Judgments, Enforcement, Insufficient Notice, Expert Report, Civil Procedure Code of the Russian Federation, Beals v Saldanha, [2003] 3 SCR 416

FACTS:

A claim was commenced in Russia by the respondent in regards to non-payment of a loan advanced to the appellant by the respondent. The claim was commenced in the Nikulinsky District Court of Moscow pursuant to the Civil Procedure Code of the Russian Federation. The parties were summoned to a court appearance to address the scheduling of the trial. The appellant did not attend this court date or the trial date and the matter was adjourned. An ex parte judgment was rendered in favour of the respondent for the full amount of the claim, plus interest and costs.

While the appellant had a right of further appeal to the Presidium of the Moscow City Court, he did not exercise this right. The deadline for further appeals passed and the Russian judgment could no longer be challenged in Russia. The respondent brought an application in Canada to enforce the Russian judgment in which the Russian judgment was recognized and enforced. The appellant appealed the judgment in which the application judge recognized Ontario's jurisdiction to enforce a judgment made by a Russian court.

ISSUES:

Did the application judge err in recognizing and enforcing the Russian judgment?

HOLDING:

Appeal dismissed.

REASONING:

No.

The application judge reviewed the applicable law and based his decision on Beals v Saldanha. He found that the appellant had not made out the defence that he was denied natural justice during the proceedings in Russia. Accordingly, the Russian proceedings were not contrary to Canadian notions of fundamental justice.

Throughout the Russian proceedings, the appellant was given adequate notice of the claim made against him and was granted the opportunity to defend the claim. Further, he had the opportunity to raise the issue of insufficient notice on appeal to the Moscow City Court. The appellate court made a factual finding that the appellant was given adequate notice, and the appellant did not avail himself of the opportunity to further appeal this finding in Russia. The Court found that the minimum standards of fairness were met in the Russian process.

Further, the Court saw no error by the application judge in excluding the report or statement of Professor S, a purported expert witness on Russian law and governance. The Court agreed with the application judge's reasons for excluding this evidence. The report was not supported by an affidavit sworn by Professor S and was inadmissible. The Court agreed that even if the report was properly before the application judge, it was within the discretion of the application judge to determine the weight to apportion to the purported evidence. In this case, he chose not to assign any weight to the statement as it was not sworn, nor did it affirm that the specific Russian proceedings, which were the subject of the application, were tainted by fraud.

The Cout concluded that no palpable and overriding error in the reasons of the application judge warranted appellate interference.

Pomata Investment Corp. (Treasure Hill Homes) v. Yang, 2023 ONCA 618

[Tulloch C.J.O., Lauwers and Paciocco JJ.A.]

COUNSEL:

FY and XZ, acting in person

S. Brunswick and V. Ford, for the responding party

FACTS:

This appeal was first set for hearing on May 27,2022, and on the day of the hearing, neither party appeared to argue the appeal. The appeal was dismissed as abandoned: Pomata Investment Corp. (Treasure Hill Homes). No order had been taken out in respect to this matter.

At the time of hearing, PL was the moving parties' lawyer of record. Consistent with the Rules and the court's standard practice, court correspondences were sent to PL. The moving parties were not copied on these correspondences. PL perfected the appeal in December 2021. PL and respondent counsel were then sent a notice of hearing. PL ceased communicating with the moving parties in early 2022 and never advised the moving parties that he received this correspondence, nor that he did not intend to appear or that he wished to be removed as the lawyer of record. The moving parties were unaware of the date and time of the hearing, and only learned that a hearing had been scheduled and that their case was dismissed as abandoned after the decision of this court was released in June 2022.

The Court had become aware that PL was suspended by the Law Society of Ontario on October 28, 2022, regarding five investigations, and remained suspended.

ISSUES:

In the interest of justice and fairness, should the Court allow a re-hearing?

HOLDING:

Motion granted.

REASONING:

Yes.

The Court noted that it has jurisdiction to re-open an appeal where it is clearly in the interests of justice to do so: Baig at para 7. Although the bar to re-opening an appeal is high, the Court concluded that it was clearly in the interests of justice to grant the moving parties the relief they sought. The moving parties had no intent to abandon their appeal, and through no fault of their own were not informed of their hearing date.

Further, PL never brought a motion to be removed as counsel of record. Rule 15.05 of the Rules requires a lawyer to act unless the client removes the lawyer or a court order has been obtained to remove the lawyer from the record. Similarly, a lawyer's professional obligations require reasonable notice to a client of a withdrawal of services. The Court noted that public confidence in the administration of justice depends on the public being able to rely on their lawyer of record.

Moreover, because this appeal was not heard and decided on its substantive merits, but dismissed as abandoned, allowing the motion to re-open the appeal would not have resulted in unfairness to the responding party. Counsel for the responding party had also consented to reopening the appeal. The Court concluded that the moving parties should have the opportunity for their appeal to be heard and decided on its merits.

Tewari v. McIntyre, 2023 ONCA 628

[Gillese, Trotter and Coroza JJ.A.]

COUNSEL:

GT, acting in person

E. Davis and A. Sahai, for the respondents

A. I. McIntosh and N. Israelian, for the non-party MG

FACTS:

GT is a food engineer who claims to have invented the "Zero-OxTech" process to extend the shelf life of case-ready meat. In April 2020, he alleged that the respondents violated his intellectual property rights, referring to a breach of a 2004 verbal agreement and a 2019 non-disclosure agreement ("NDA") with Desiccare Inc. In November 2020, the respondents sought to dismiss the action on jurisdictional grounds. By order dated October 31, 2022, GT's action was dismissed for lack of jurisdiction. GT appealed against both the dismissal of his claim and the costs orders. He sought to adduce fresh evidence of a 2003 NDA and a written 2006 manufacturing agreement in support of his appeal.

ISSUES:

Can GT adduce fresh evidence in support of his appeal?
Did the motion judge err in dismissing GT's action for want of jurisdiction?

HOLDING:

Motion and appeal dismissed.

REASONING:

Appellate courts should rarely admit fresh evidence: Palmer v The Queen at 775; Barendregt v Grebliunas at para 31. The respondents provided evidence suggesting that the fresh evidence might be fabricated. Regardless of its authenticity, the fresh evidence did not meet the first criterion set by the Supreme Court in Palmer v The Queen, which advised against admitting evidence that could have been presented earlier with due diligence. GT did not establish the exercise of due diligence. Therefore, the did not admit the fresh evidence.

The Court agreed with the motion judge's determination that Ontario had no jurisdiction over the claim, noting that the corporate respondent was not present in Ontario at the relevant time, the respondents had not attorned to Ontario's jurisdiction and there was no real and substantial connection between the respondents and Ontario. The sale of goods outside of Ontario to Ontario residents did not constitute doing business in Ontario.

Further, while the 2019 NDA contained a non-exclusive choice of law clause and jurisdiction clause that included Ontario, GT signed it as a representative of his corporation and not in his personal capacity. Since GT was not a party to the agreement, he could not rely on the 2019 NDA to establish jurisdiction in Ontario. The motion judge found no real and substantial connection between the remaining dispute and Ontario, with most prior dealings taking place entirely within the United States.

Lastly, GT did not seek leave to appeal against a costs order, and even if he had, it would not have been granted leave because the costs orders were not plainly wrong nor did the motion judge err in principle.

Fernandez Leon v. Bayer Inc., 2023 ONCA 629

[van Rensburg, Nordheimer and George JJ.A.]

COUNSEL:

J. Drennan, for the appellants
G. Worden and A. Puchta, for the respondent Bayer Inc.

FACTS:

This appeal concerned a motion in proceedings about an implanted medical device called Essure, a permanent form of female contraception, that is alleged to have caused injury to the appellant. The action was commenced against the physician who implanted the device, and the respondent Bayer Inc. ("Bayer"), the alleged manufacturer of the device. The action was discontinued against the physician.

Bayer's moved under r. 21.01(1)(b) of the Rules of Civil Procedure to strike the statement of claim as disclosing no reasonable cause of action. The motion judge agreed, concluding that there were substantial foundational deficiencies in the appellants' claim that could not be cured by simply amending the pleading.

ISSUES:

Did the motion judge err in refusing to grant leave to amend the statement of claim?

HOLDING:

Appeal allowed.

REASONING:

Yes.

The motion judge erred in refusing to grant leave to amend the statement of claim. She did not advert to nor apply the test for amending pleadings. Instead, she concluded that there was "no benefit in permitting the [appellants] to try and find some tenable basis in fact for a claim against Bayer when none [had] been found by them to date".

Leave to amend a statement of claim should be denied only in the clearest of cases, when it is plain and obvious there is no tenable cause of action, the proposed pleading is scandalous, frivolous or vexatious, or there is non-compensable prejudice to the defendants.

The test for striking pleadings for not disclosing a reasonable cause of action is stringent, and the moving party must satisfy a very high threshold in order to succeed. This may occur where the allegations do not fall within a cause of action known to law, or because the statement of claim fails to plead all the essential elements of a recognized cause of action.

Bayer was prepared to consider not opposing an order granting the appellants leave to amend their claim, but opposed the proposed amendments produced at the hearing of the appeal because it said they were still deficient. Bayer claimed the proposed amended pleading still did not disclose a cause of action for negligent design and negligent manufacture because the specific design and manufacturing defects were not identified.

The Court disagreed with Bayer. The proposed amendments plead the essential elements of the claims for negligent design and manufacture. The proposed amendments plead the material facts that are required to support the pleaded causes of action. That is, they meet the low threshold for pleading a cause of action.

The appeal was allowed and the appellants were granted leave to amend the statement of claim.

9383859 Canada Ltd. v. Saeed, 2023 ONCA 627

[Hourigan J.A. (Motions Judge)]

COUNSEL:

M A. Russell, for the respondents/moving parties M.S. and M.I.S.
S. Tock, for the respondents/moving parties N.G., V.R., M.S. and R.S.
S. Singh, for the appellant/responding party

FACTS:

The action giving rise to this appeal stemmed from a failed real estate transaction. The R Respondents and S Respondents brought successful motions for summary judgment dismissing the action against them on the basis that the relevant limitation period was missed, and the claim was statute-barred. 938 appealed the dismissal orders and Miller J.A. granted security for costs orders in favour of the respondents. A panel of the court refused to set aside Miller J.A.'s security for costs orders.

The R Respondents brought a motion under rule 61.06(2) of the Rules of Civil Procedure to dismiss the appeal against them on the basis that the appellant 938 had failed to comply with the security for costs order made by Miller J.A. directing it to post security for costs. The S Respondents moved for the same relief.

ISSUES:

Should the appeal be dismissed?
Should costs of the appeal be awarded against S personally?

HOLDING:

Motions granted.

REASONING:

The appellant offered no valid excuse for its non-compliance with the security for costs orders. It submitted that the appeal should not be dismissed because it sought leave to appeal the panel decision refusing to set aside the security for costs orders to the Supreme Court of Canada. In considering whether a dismissal is premature, the court should have regard to outstanding motions or applications. However, the mere existence of such proceedings is not sufficient to deny a dismissal order which should otherwise be made. The motion judge should have taken a hard look at any outstanding motions or applications to determine whether they had any chance of success. There were no plausible grounds to argue that the panel erred in dismissing the appeal of the orders of Miller J.A. The mere filing of the application of leave to appeal in these circumstances did not persuade Hourigan J.A that he should decline to exercise his discretion to dismiss the appeal for failure to post security for costs.

The appellant's argument that the order for security for costs should not have been made was not persuasive. The orders of Miller J.A. were properly made and the Court agreed with his analysis. In particular, the Court agreed with Miller J.A.'s finding that the merits of the appeal were weak. It was evident that the limitation period was missed, and the Court saw no basis to interfere with the order dismissing the action against these respondents.

It was unnecessary to determine whether the Court had the power to make such an order because Hourigan J.A was not satisfied that S's litigation strategy amounted to an abuse of process. It appeared that S had used every appeal process available to 938. While Hourigan J.A. considered the frustration the respondents were feeling with the delays in this litigation, this conduct did not qualify as an abuse of process. In any event, if the Court did have the power to make the order sought, it should be reserved for the clearest of cases.

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 (September 18 – September 22)
Blaney's Appeals

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Civil Decisions

CIVIL DECISIONS

Canada: Court Of Appeal Summaries (September 18 – September 22) Blaney's Appeals

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Civil Decisions

CIVIL DECISIONS

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Canada: Court Of Appeal Summaries (September 18 – September 22)
Blaney's Appeals