Court Of Appeal Summaries (July 22 – July 26, 2024)

Good evening.
Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of July 22, 2024.

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Lalani Properties International Inc. v. Intact Insurance Company was a property policy coverage dispute involving a building that suffered a wall collapse and was subsequently burned down due to arson. The owner lost at trial on the issue of coverage for the wall collapse and on its claim against its insurance broker, but won on the issue of coverage for the fire, although it didn't get the amount of damages it sought. There were a series of appeals and cross-appeals contingent on the outcome of the appeals. All appeals were dismissed.

Clayton v. Clayton was an appeal from a tribunal award under Chapter 11 of NAFTA. The dispute arose from the denial of a quarry project in Nova Scotia, which was rejected following a questionable federal environmental assessment. The tribunal found that the appellants failed to prove that the NAFTA breach caused their alleged injury. They had not established that they would have obtained project approval and operated profitably for 50 years if the environmental assessment had been fair. The Court dismissed the appeal, agreeing that the international law standard for causation was applied and there was no issue of the decision being contrary to public policy.

In Furtado v. Underwriters, the appellant was denied defence coverage and relief from forfeiture under a Directors and Officers policy with Lloyd's Underwriters. OF, a director of GT, a real estate company, held this policy for a year during which he was subject to OSC investigations and proceedings. The OSC ordered OF to produce documents and prohibited him from disclosing this order to anyone but legal counsel. A suspension clause in the policy allowed OF to delay notification of the claim to the insurer, but after a subsequent law change, OF was permitted to notify the insurer, but did not do so for about a year despite being aware of the change in the law. The insurer denied coverage on the basis of the late notice of the claim. The application judge upheld the denial of coverage and the Court dismissed the appeal from that decision. OF's delay in reporting the claim breached the claims-made and reported policy. Reporting the claim was a precondition to an entitlement to coverage, accordingly, such a breach could not qualify for statutory or common law relief from forfeiture, as no entitlement to coverage ever arose.

RBC v Everest Group dealt with statutory compensation for rescission of a franchise agreement under the Arthur Wishart Act (Franchise Disclosure). The Court dismissed both the appeals, finding no reversible errors on the issues of the burden of proof, sufficiency of disclosure, the right to rescind despite termination, the materiality of the omitted financial statements, and the liability of certain defendants as "franchisor's associates".

Hasan v. Trillium Health Centre was a medical malpractice case involving a stroke victim who was advised by his physician to visit the emergency department due to symptoms. Trillium Health noted no abnormalities on a CT scan and did not order an angiogram. The plaintiff was discharged but ended up in hospital again the next day, having suffered a stroke. The attending physician was found liable. The appeal was solely on the issue of causation. The Court dismissed the appeal.

RHRA v. Moore was an appeal from an administrative law decision against the operator of a retirement home who was operating it without a licence. The appeal was dismissed.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Furtado v. Underwriters, 2024 ONCA 579

Keywords: Contracts, Insurance, Directors & Officers, Claims Made and Reported Policy, Coverage, Defence Costs, Conditions Precedents, Notice, Remedies, Relief from Forfeiture, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98, Securities Act, R.S.O. 1990, c. S. 5, s. 11, s. 12, s. 16(1), s. 16(1.1), s. 17, Insurance Act, R.S.O. 1990, c. I.8, s. 129, Plan to Build Ontario Together Act, 2019, S.O. 2019, c. 15, Sched. 34, s. 1(2), Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252, Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, Gulf Insurance Co. v. Dolan, Fertig and Curtis, 433 So. (2d) 512, Stuart v. Hutchins, 40 O.R. (3d) 321 (C.A.), Kozel v. The Personal Insurance Company, 2014 ONCA 130, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Williams v. York Fire & Casualty Insurance Co., 2007 ONCA 479, Dams v. TD Home and Auto Insurance Co., 2016 ONCA 4, Falk Bros. Industries Ltd. v. Elance Steel Fabricating Co., [1989] 2 S.C.R. 778, McNish v. American Home Assurance Co. (1989), 68 O.R. (2d) 365 (H.C.), aff'd (1991), 5 C.C.L.I. (2d) 222 (Ont. C.A.)

Royal Bank of Canada v. Everest Group Inc., 2024 ONCA 577

Keywords: Contracts, Franchising, Disclosure, "Franchisor's Associates", Remedies, Rescission, Statutory Compensation, Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3, ss. 5(7), 6, Raibex Canada Ltd. v. ASWR Franchising Corp., 2018 ONCA 62, Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179

Hasan v. Trillium Health Centre (Mississauga), 2024 ONCA 586

Keywords: Torts, Medical Malpractice, Duty of Care, Causation, Negligence, But For Test, Willick v. Willard, 2023 ONCA 792, Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Clements v. Clements, 2012 SCC 32, Sacks v. Ross, 2017 ONCA 773, Cottrelle v. Gerrard (2003), 67 O.R. (3d) 737 (C.A.), Ghiassi v. Singh, 2018 ONCA 764, Goodwin v. Olupona, 2013 ONCA 259

Retirement Homes Regulatory Authority v. Moore, 2024 ONCA 585

Keywords: Administrative Law, Health Law, Retirement Residences, Statutory Interpretation, Retirement Homes Act, 2010, S.O. 2010, c. 11, ss. 2(1), 33, 96.1, 97, Evidence Act, R.S.O. 1990. C. E-23, Retirement Home Regulatory Authority v. In Touch Retirement Living for Vegetarian/Vegans Inc., 2019 ONSC 3401

Lalani Properties International Inc. v. Intact Insurance Company, 2024 ONCA 583

Keywords: Contracts, Interpretation, Insurance, Property, Fire, Coverage, Insurance Act, R.S.O. 1990, c. I.8, s. 124(1) and (2), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(4)(a), Ontario Heritage Act, R.S.O. 1990, c. O.18, C.C.R. Fishing Ltd. v. British Reserve Insurance Co., [1990] 1 S.C.R. 814, Calin v. Calin, 2021 ONCA 558, Hacopian-Armen Estate v. Mahmoud, 2021 ONCA 545, Ottawa-Carleton Standard Condominium Corporation 687 v. ING Novex Insurance Company of Canada, 2009 ONCA 904, R. v. Laverty (No. 2) (1979), 47 C.C.C. (2d) 60 (Ont. C.A.), Housen v. Nikolaisen, 2002 SCC 33, Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47, Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50

Clayton v. Clayton (Attorney General), 2024 ONCA 581

Keywords: Arbitration, Public Policy, Environmental Assessment, NAFTA, Tribunals, Jurisdiction, Arbitration Act, s. 46(1), Commercial Arbitration Act, s. 34, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Beals v. Saldhana, 2003 SCC 72, Mexico v. Cargill, Incorporated, 2011 ONCA 622, Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254, Consolidated Contractors Group S.A.L. v. Ambatovy Minerals S.A., 2017 ONCA 939, Corporacion Transnacional de Inversiones S.A. de C.V. v. STET International S.p.A (2000), 49 O.R. 414 (C.A.), United Mexican States v. Karpa (2005), 74 O.R. (3d) 180 (C.A.), Schreter v. Gasmac Inc. (1992) 7 O.R. (3d) 608 (Gen Div.), Canada (Attorney General) v. Clayton, 2018 F.C. 436, Chorzów (Germany v. Poland), 1928 P.C.I.J. (ser.A.) No. 17, Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), (ICJ Reports 2007), Judgment, 26 February 2007

Short Civil Decisions

Binscarth Holdings LP. v. Anthony, 2024 ONCA 582

Keywords: Costs.

Hiawatha First Nation v. Cowie, 2024 ONCA 590

Keywords: Aboriginal Law, Civil Procedure, Injunctions, Appeals, Costs, Indian Act, R.S.C. 1985, c. I-5, Framework Agreement on First Nation Land Management Act, S.C. 2022, c. 19, s. 121, s. 2, Rules of Civil Procedure, r. 57, Hiawatha First Nation v. Cowie, 2023 ONCA 524

Yovcheva v. Hristov, 2024 ONCA 594

Keywords: Family Law, Parenting, Child Support, Spousal Support, Variation, Material Change in Circumstances, Civil Procedure, Appeals, Fresh Evidence, Federal Child Support Guidelines, S.O.R./97-175, ss. 16 and 17, Hickey v. Hickey, [1999] 2 S.C.R. 518, Housen v. Nikolaisen, 2002 SCC 3, Hemmings v. Peng, 2024 ONCA 318

CIVIL DECISIONS

Furtado v. Underwriters, 2024 ONCA 579

[Lauwers, van Rensburg and Thorburn JJ.A.]

Counsel:

McGuire and K. Glowach, for the appellant

Dolden and P. C. Dawson, for the respondent

Keywords: Contracts, Insurance, Directors & Officers, Claims Made and Reported Policy, Coverage, Defence Costs, Conditions Precedents, Notice, Remedies, Relief from Forfeiture, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98, Securities Act, R.S.O. 1990, c. S. 5, s. 11, s. 12, s. 16(1), s. 16(1.1), s. 17, Insurance Act, R.S.O. 1990, c. I.8, s. 129, Plan to Build Ontario Together Act, 2019, S.O. 2019, c. 15, Sched. 34, s. 1(2), Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252, Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, Gulf Insurance Co. v. Dolan, Fertig and Curtis, 433 So. (2d) 512, Stuart v. Hutchins, 40 O.R. (3d) 321 (C.A.), Kozel v. The Personal Insurance Company, 2014 ONCA 130, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Williams v. York Fire & Casualty Insurance Co., 2007 ONCA 479, Dams v. TD Home and Auto Insurance Co., 2016 ONCA 4, Falk Bros. Industries Ltd. v. Elance Steel Fabricating Co., [1989] 2 S.C.R. 778, McNish v. American Home Assurance Co. (1989), 68 O.R. (2d) 365 (H.C.), aff'd (1991), 5 C.C.L.I. (2d) 222 (Ont. C.A.)

Facts:

In this proceeding, OF, the insured, appealed from an application judge's decision denying him coverage or relief from forfeiture under the Directors and Officers (D&O) policy he held with the respondent insurance firm, Lloyd's Underwriters ("the Insurer"). OF obtained this D&O policy in his capacity as director of Go-To, a real estate development company. The policy was valid from October 6, 2018, to October 25, 2019. In March 2019, during the policy term, the Ontario Securities Commission ("OSC") inquired about Go-To's business activities, and in May 2019 the OSC ordered OF to produce certain documents. The OSC informed OF that s. 16(1) of the Securities Act prohibited him from disclosing the order's nature/content to anyone except his counsel.

The D&O policy contained a Suspension Clause which provided that OF need not inform the Insurer of an ongoing investigation while he was legally prevented from doing so, and accordingly OF did not tell the Insurer about the OSC's involvement. However, in December 2019 the law changed such that OF was permitted to advise the Insurer of the investigation, but he did not do so at that time. Two years later, the OSC filed an application against Go-To, OF, and various affiliated entities alleging breaches of the Securities Act. In March 2022, the OSC commenced further receivership and enforcement proceedings against OF and Go-To. At this point, OF reported these claims to the Insurer, which denied coverage in September 2022. OF subsequently sued the Insurer seeking relief from forfeiture with respect to his allegedly imperfect compliance with the policy and indemnification for defence costs for the OSC proceedings.

The application judge held in favour of the Insurer, finding that OF breached the D&O policy's notice provisions since the Suspension Clause only suspended these provisions while OF was legally prohibited from reporting the investigation. OF had been specifically informed by the OSC that he could notify the Insurer of the investigation in February 2021, but he failed to do so for another year.

On appeal, OF contended that his obligation to report to the Insurer was suspended pursuant to the Suspension Clause for the entirety of the policy period, regardless of the changed law. OF asserted in the alternative that if a breach occurred the application judge incorrectly failed to allow relief from forfeiture. The Insurer argued that the application judge correctly interpreted the policy and further alleged that this was a case of non-compliance with a condition precedent to coverage, such that OF's claims were not covered by the policy and relief from forfeiture was unavailable.

Issues:

1. Did the application judge err in holding that OF forfeited coverage under the D&O policy because he breached its notice provisions?
2. Did the application judge err in holding that relief from forfeiture was not available as a matter of law?

Holding:

Appeal dismissed.

Reasoning:

1. No. After a thorough review of the policy provisions, the changed law allowing for disclosure and OF's actions, the Court upheld the application judge's determination that OF breached the notice provisions and thus forfeited coverage. As a claims-made and reported policy, the D&O policy provided coverage on the condition that claims be made and reported to the Insurer during the policy period or within 30 days after its expiry. The Court distinguished this from an occurrence policy in which an insurer is required to indemnify covered events which occur during the policy period, regardless of the timing of notice. Section 5.8 of the D&O policy explained how to give notice of a claim, and also required the insured to give notice of any fact/circumstance which might reasonably be expected by them to give rise to a claim. The Suspension Clause obviated this notice obligation in situations where giving notice was legally prohibited, and the application judge correctly held that it applied to giving notice of circumstances that might eventually give rise to a claim. The parties agreed that the May 2019 incident where OF was summonsed to the OSC's office and ordered to produce documents for the ongoing investigation qualified as a circumstance that would be reasonably expected by OF to give rise to a claim. OF acted properly in not disclosing the order then since it was legally prohibited at the time.

The Court affirmed the application judge's holding that OF breached the notice provisions by failing to notify the Insurer of the OSC's activities even after s. 16(1.1) of the Securities Act came into effect, which permits an insured to disclose OSC investigations to their insurer by following a set procedure. OF was made aware of s. 16(1.1) in four OSC summonses sent to OF's counsel, each of which drew OF's attention to the legislative change. Although Go-To's insurance broker eventually began the s. 16(1.1) process to notify the Insurer in January 2022 (completed in February 2022), this effort was too late, since the OSC had informed OF about the new law permitting disclosure via the first summons received almost a year earlier in February 2021. The application judge correctly held that the delay in reporting from February 2021 to February 2022 constituted a substantial breach of OF's claims-made and reported policy, which prejudiced him and forfeited coverage under the policy.

2. No. The Court held that relief from forfeiture under s. 129 of the Insurance Act did not encapsulate OF's policy breach. This section only permits relief from insurance coverage forfeiture after imperfect compliance with policy conditions relating to proof of loss, and thus was not relevant for OF's situation. Similarly, statutory relief from forfeiture under s. 98 of the Courts of Justice Act only applies for imperfect compliance with a policy term and does not apply where the breach amounted to non-compliance with a condition precedent to coverage as occurred here.

Regarding common law relief from forfeiture, OF's circumstances were comparable to Stuart, in which the court declined to relieve from forfeiture an insured who failed to assert a claim during the policy period of a claims-made and reported policy. Despite OF's arguments about the applicability of the more recent Kozel decision in which relief was granted, the Court distinguished Kozel as an example of imperfect compliance. Furthermore, Kozel related to an insured's breach of a statutory condition in a motor vehicle insurance policy, rather than an insured's failure to comply with coverage conditions in a claims-made and reported policy. Ultimately, the Court held that where a claims-made and reported policy makes clear that the making and reporting of a claim are the triggering events for coverage, the failure to comply with a notice provision constitutes non-compliance with a condition precedent to coverage, such that there can be no relief from forfeiture. Accordingly, having failed to provide written notice of circumstances likely to give rise to a claim (i.e. the OSC order) during the policy period or within 30 days after the period's expiration, OF breached an essential coverage condition and could not access relief from forfeiture. OF did not lose the benefit of coverage; instead, he never met the requirements for coverage in the first place.

Royal Bank of Canada v. Everest Group Inc., 2024 ONCA 577

[Roberts, Miller and Gomery JJ.A.]

Counsel:

Boudreau, D. Hamson and M.A. Robles, for the appellants/respondents by way of cross appeal Versatile Holdings Group Inc., Everest Group Inc., and Premium Host Inc.

Nasseri and G. Vance, for the respondents/appellants by way of cross appeal Paramount Franchise Group Inc., Paramount Franchise Inc., Fakih Group Inc., 2302733 Ontario Inc., MF and HG

Keywords: Contracts, Franchising, Disclosure, "Franchisor's Associates", Remedies, Rescission, Statutory Compensation, Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3, ss. 5(7), 6, Raibex Canada Ltd. v. ASWR Franchising Corp., 2018 ONCA 62, Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179

Facts:

This appeal and cross-appeal involved a franchise dispute between Paramount Franchise Group Inc. and three franchisees: Versatile Holdings Inc., Everest Group Inc., and Premium Host Inc.

The trial judge dismissed the rescission actions for statutory compensation under the Arthur Wishart Act (Franchise Disclosure), 2000 ("Wishart Act") brought by Versatile and Everest and allowed the action by Premium Host.

The trial judge found that Holly Graham, a franchisor's employee, and Paramount Leasing were the franchisor's associates under the Wishart Act, making them jointly and severally liable with Paramount to pay statutory compensation to Premium Host. Subsequently, the trial judge rejected the claim that Paramount Wholesale and the Fakih Group were the franchisor's associates.

Issues:

Versatile and Everest raised three issues on appeal.

1. Did the trial judge err in law by requiring Versatile and Everest, not the franchisor, to prove the lack of disclosure or insufficient disclosure?
2. Alternatively, did the trial judge err in finding that they failed to prove non-disclosure or insufficient disclosure?
3. Did the trial judge fail to find that Paramount Wholesale and the Fakih Group were not the franchisor's associates?

With respect to the cross-appeal, Paramount, Paramount Franchise Inc., 2302733 Ontario Inc., Fakih Group, MF, and HG submitted that the trial judge made reversible errors on four issues:

4. Did the trial judge err in ruling that the s. 5(7) disclosure exemptions of the Wishart Act do not apply to Premium Host?
5. Did the trial judge err in ruling that termination for the franchisee's breach did not preclude franchisee rescission?
6. Did the trial judge err in ruling that omitting financial statements for the Heartland location constituted a material fact omission?
7. Did the trial judge err in ruling that HG and Paramount Leasing were the franchisor's associates?

Holding:

Appeals and cross-appeal dismissed.

Reasoning:

Appeal. The Court was not persuaded that the trial judge made any reversible error.

(1) No. The burden of proving entitlement to rescission and statutory compensation falls on the franchisee. As stated in Raibex Canada Ltd. v. ASWR Franchising Corp., at para. 40, the franchisee must demonstrate the franchise disclosure document was so deficient that it effectively amounted to no disclosure. The trial judge correctly applied this principle.

(2) No. The trial judge found that Versatile and Everest did not meet their burden to prove non-disclosure or inadequate disclosure. She was entitled to accept the evidence presented and reject the franchisees' claims regarding the documents they received from the franchisor.

(3) No. The trial judge provided thorough reasons for finding that Paramount Wholesale and the Fakih Group were not the franchisor's associates. She correctly applied the statutory definitions and determined that neither was involved in reviewing or approving the franchise or exercising significant operational control.

Cross-Appeal. The Court was not persuaded that the trial judge made any reversible error.

(4) No. The trial judge explained in detail why the s. 5(7) disclosure exemptions of the Wishart Act did not apply to the Premium Host. The Court found her analysis and conclusions appropriate.

(5) No. The trial judge correctly ruled that franchise termination does not preclude the franchisee's statutory right to rescind the agreement. The Wishart Act does not make rescission conditional on non-termination. The lawful termination of a contract for breach absolves the non-breaching party from future obligations but does not void the contract ab initio, as established in Pickering Square Inc. v. Trillium College Inc., at paras. 28-29.

(6) No. The trial judge found that the omission of financial statements was a material fact entitling Premium Host to statutory compensation. The Court held that the evidence, credibility assessments, and written record before the trial judge supported her finding. This finding was entitled to deference, and no basis existed to overturn it.

(7) No. The trial judge found that HG and Paramount Leasing were the franchisor's associates under the Wishart Act. The Court cited HG's significant role in reviewing franchise applications and Paramount Leasing's operational control and financial obligations as supporting evidence. The Court found no issue with the trial judge's analysis.

Hassan v. Trillium Health Centre (Mississauga), 2024 ONCA 586

[Lauwers, Miller and Harvison Young JJ.A.]

Counsel:

Zacharias, J. Hunter and N. Marotta, for the appellant

Embury, D. Pacheco, J. Adair and R. Rai, for the respondents

Keywords: Torts, Medical Malpractice, Duty of Care, Causation, Negligence, But For Test, Willick v. Willard, 2023 ONCA 792, Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Clements v. Clements, 2012 SCC 32, Sacks v. Ross, 2017 ONCA 773, Cottrelle v. Gerrard (2003), 67 O.R. (3d) 737 (C.A.), Ghiassi v. Singh, 2018 ONCA 764, Goodwin v. Olupona, 2013 ONCA 259

Facts:

The respondent, SH, was a stroke victim. After visiting his family physician to treat his symptoms of dizziness, nausea, and vomiting, he was advised to go directly to the emergency department at Trillium Health Partners Mississauga Hospital. After conducting a physical and CT examination, the hospital's attending physician, Dr. C., noted that the CT scan did not show any acute abnormalities and that some of SH's symptoms had improved. Dr. C did not consult a neurologist, nor did he order a CT angiogram. He diagnosed SH with "Dizzy, Bell's Palsy, Peripheral Vertigo" and discharged him with medication. SH's symptoms worsened, and he returned to the hospital the following day. SH's MRI later confirmed that he had suffered a stroke, which caused irreversible brain tissue damage.

The trial judge found the appellant, Dr. C, negligent in treating SH. She found that "but for Dr. C's breach of the standard of care, SH would have been assessed and received treatment in a timely manner, which in turn would have resulted in a successful treatment and recovery." SH suffered permanent and disabling injuries.

This was a limited appeal. The appellant accepted the trial judge's findings that SH's stroke was caused by a blood clot and that treatment would have been initiated had Dr. C met the standard of care. However, the appellant argued that the trial judge erred on the issue of causation: that Dr. C's negligence caused SH's injuries.

Issue:

Did the trial judge err in failing to require SH to establish which of the various treatment options would have prevented the outcome of his injuries?

Holding:

Appeal dismissed.

Reasoning:

No. The Court found that the trial judge's findings reflected the Supreme Court's direction to trial judges to take a robust and pragmatic approach to determining whether the defendant's negligence caused the plaintiff's loss, without requiring scientific proof of causation. The trial judge did not err in finding that Dr. C's negligence caused SH's unfavourable outcome. The Court concluded that the factual findings were deeply rooted in the evidence and well laid out in the trial judge's reasons. The appellant had pointed to no palpable and overriding errors.

The trial judge found that if SH had been properly treated by one of the three available modes, he would have had a successful recanalization and therefore a good outcome. This finding was based on three key considerations, SH's imaging and clinical presentation, his unique anatomical considerations, and the medical literature on recanalization. The trial judge rejected the defendants' argument that the medical expert had not provided a comprehensive opinion on precisely how each of these treatment options might have worked out. The medical expert had laid out how a neurologist would determine the appropriate treatment method on the spot depending on the imaging.

Retirement Homes Regulatory Authority v. Moore, 2024 ONCA 585

[Miller, Paciocco and Dawe JJ.A.]

Counsel:

L. D'Agostino, for the appellant

Glick and J. Stone, for the respondent

Keywords:

Administrative Law, Health Law, Retirement Residences, Statutory Interpretation, Retirement Homes Act, 2010, S.O. 2010, c. 11, ss. 2(1), 33, 96.1, 97, Evidence Act, R.S.O. 1990. C. E-23, Retirement Home Regulatory Authority v. In Touch Retirement Living for Vegetarian/Vegans Inc., 2019 ONSC 3401

Facts:

W.M. and St. Jacobs Carpenter House Inc. appealed an order secured by the Retirement Homes Regulatory Authority (RHRA) requiring it to cease operating St. Jacobs Country Living.

D.M., the ex-wife of W.M., held a licence under the Retirement Homes Act, 2010 to operate a retirement home. After separating in 2017, W.M. became the sole owner and manager but continued using his ex-wife's licence.

The license was revoked on January 17, 2020, due to W.M.'s conduct, which included abuse, confinement of residents, and interference with care providers. Following the revocation of the retirement licence, W.M. claimed to operate the building as a "residential complex" rather than a "retirement home."

An investigation led to a search warrant and the application that led to this appeal, alongside a separate prosecution for regulatory offences.

Issues:

Did the application judge err in finding that the appellants operated an unlicensed retirement home contrary to s. 33 of the Retirement Homes Act, 2010? In its analysis, the Court considered four sub-issues:

1. Did the application judge err in treating R.W. as a resident of the residential complex
2. Did the application judge err in finding that the appellants provided more than one care service to the other residents?
3. Did the application judge err in ordering the appellants to cease operating the unlicensed retirement home and vacate it?
4. Did the application judge err in making, without evidence, the critical factual finding that W.M.'s conduct reflected a culture of avoidance?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The application judge did not err in treating R.W. as a resident of the residential complex. The appellants failed to demonstrate any palpable and overriding error in the judge's decision. The judge concluded that R.W. was a resident, supported by evidence that the same staff serviced R.W. as the other occupants of St. Jacobs Country Living. The Court held that the administrative separation in care delivery was non-existent, and the physical separation within the building was not conclusive.

(2) No. The application judge did not err. The judge determined that the activities admitted by the appellants, such as receiving, storing, and distributing medication, fell within the "administration of a drug" requirement and was deemed a care service. This interpretation aligned with the legislative intent to ensure residents' safety and respected the natural meaning of the phrase. The Court held that the appellants' argument that "administration" excluded "assistance" was not persuasive and was inconsistent with their position.

(3) No. The application judge was empowered to make such orders under s. 96.1 of the Retirement Homes Act, 2010. The section allows the court to make any order it deems fit, and the judge's decision aligned with precedents set in similar cases, such as Retirement Home Regulatory Authority v. In Touch Retirement Living for Vegetarian/Vegans Inc, at paras. 65-69.

(4) No. The application judge did not err. There was ample evidence to support this conclusion, including previous breaches of the Retirement Homes Act, 2010 and a series of registrar's orders. The judge's decision to impose the remedies was discretionary and supported by the evidence.

Lalani Properties International Inc. v. Intact Insurance Company, 2024 ONCA 583

[Rouleau, Sossin and Dawe J.J.A.]

Counsel:

L. Love, E. VanderVeer and R. Stefanelli, for Lalani Properties International Inc. and 2160943 Ontario Limited

J. Bedard and J. R.W. Damstra, for Intact Insurance Company

B. Papazian and M. Krygier-Baum for D.M. Edwards Insurance Group Ltd. and the CG&B Group Inc.

Keywords: Contracts, Interpretation, Insurance, Property, Fire, Coverage, Insurance Act, R.S.O. 1990, c. I.8, s. 124(1) and (2), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(4)(a), Ontario Heritage Act, R.S.O. 1990, c. O.18, C.C.R. Fishing Ltd. v. British Reserve Insurance Co., [1990] 1 S.C.R. 814, Calin v. Calin, 2021 ONCA 558, Hacopian-Armen Estate v. Mahmoud, 2021 ONCA 545, Ottawa-Carleton Standard Condominium Corporation 687 v. ING Novex Insurance Company of Canada, 2009 ONCA 904, R. v. Laverty (No. 2) (1979), 47 C.C.C. (2d) 60 (Ont. C.A.), Housen v. Nikolaisen, 2002 SCC 33, Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47, Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50

Facts:

This matter involved two appeals with respect to a building that was damaged by a wall collapse ("wall collapse appeal") and subsequently burned down by an arsonist (the "fire appeal"). Lalani Properties Inc. and 2160943 Ontario Limited ("Lalani") appealed the wall collapse judgment and Intact Insurance Company ("Intact") appealed the fire judgment.

In the wall collapse judgment, the trial judge found that Intact was not liable under the policy to pay for losses arising from the wall collapse. The trial judge also found that Intact was liable under the policy to pay for the losses caused by the fire. Because the trial judge found Intact liable in relation to the fire damage losses, she dismissed Lalani's negligence claim against CG&B, the insurance broker. However, she held in the alternative that if Intact had not been found liable in relation to the fire, Lalani's negligence action against CG&B would have succeeded. She also held that if she had found Intact liable for the wall collapse, it would have increased Lalani's entitlement to damages for the business interruption loss arising from the subsequent fire.

These alternative findings gave rise to a series of cross-appeals in the fire appeal, all of which were contingent on one or the other of the main appeals being successful. First, Lalani cross-appealed against Intact in the fire appeal, seeking to have the damages it was awarded for business interruption loss increased. This cross-appeal was contingent on Lalani succeeding in the wall collapse appeal. Second, Lalani cross-appealed against CG&B in the fire appeal, seeking judgment against CG&B for the fire loss damages that were payable by Intact. This cross-appeal was contingent on Intact succeeding in the fire appeal on the issue of its liability, such that the damages award against Intact relating to the fire was set aside in its entirety. Third, CG&B cross-appealed in the fire appeal, seeking to reverse the trial judge's conditional finding that it would have been liable in negligence if Intact had not been found liable for the fire losses under to the insurance policy. This cross-appeal was also contingent on Intact succeeding on the issue of its liability in the fire appeal.

Issues:

1. Did the trial judge err by concluding that the damages Lalani suffered as a result of the wall collapse fell outside the scope of the risks that were covered by its insurance policy with Intact?
2. Did the trial judge err in determining that Intact was liable for Lalani's losses resulting from the January 2011 fire?

Holding:

Appeals dismissed.

Reasoning:

1. No. The Court did not give effect to Lalani's main ground of appeal that the trial judge failed to properly consider the evidence from Intact's engineering expert about the renovations performed in the mid-1970s having a contributory effect on the building collapse. The Court upheld the trial judge's conclusion that the wall collapse was not a fortuitous event that fell within the scope of the insurance policy. This made it unnecessary for the Court to address the trial judge's alternative conclusion that the losses resulting from the wall collapse would in any event have been excluded under the policy. The Court agreed with Intact that the trial judge's conclusions about the cause of the wall collapse were findings of fact to which appellate deference applied. However, some of the specific arguments advanced by both sides could be characterized as raising extricable questions of law.

(1) The trial judge did not err by not treating the 1973/74 renovations as a contributing cause of the wall collapse

The Court acknowledged that the trial judge's reasons did not expressly state that she was rejecting Intact's expert opinion that the 1973/74 renovations were a contributing cause of the wall collapse. However, when those reasons are read in the context of the evidence at trial, it became apparent that the trial judge found it unnecessary to make any findings about this aspect of Intact's expert evidence. The Court agreed that Lalani had not established on a balance of probabilities that a proximate cause of the wall collapse was a fortuitous event.

The trial judge, having correctly instructed herself on the law as established by C.C.R. Fishing, was clearly aware that a finding of fortuity does not necessarily require a finding of negligence. However, the Court believed nothing in the evidence provided a basis for finding that the renovations carried out more than 35 years prior to the wall's collapse constituted "adverse or unusual conditions without which the loss would not have occurred." Although it would have been preferable for the trial judge to have made a specific finding in that regard, the Court did not view her failure to do so as constituting a reversible error in the context of the record as a whole.

The Court held that even if it were to find that the approach the trial judge took to Intact's expert evidence reflected an error of law, the remedy Lalani sought on its appeal was not a new trial, but a declaration that Intact was liable under the policy for Lalani's losses resulting from the wall collapse. Since it was Lalani's burden to establish that the wall collapse was a fortuitous event, in order to make such a declaration the Court would have to affirmatively find that Intact's expert evidence supported this conclusion, which was not a finding of fact made by the trial judge.

In the Court's view, on the evidence presented at trial, the most that could be said about the 1973/74 renovations is that they may have "contributed" to the wall collapse only in the sense that they failed to stop the collapse from happening.

2. No. First, Intact argued that the trial judge erred by finding that Intact's November 2, 2010 amendments to the policy were invalid because of s. 124 of the Insurance Act. Second, and in the alternative, Intact argued that even if the unamended June 2010 renewal policy was still in force when the building burned down, as the trial judge found, she made a further error by finding that Intact was estopped from relying on the vacancy exclusion. The Court found the trial judge's findings of fact were entitled to appellate deference, and could only be interfered with if she made palpable and overriding errors. Her conclusions on questions of law were reviewed on a correctness standard. Her findings on questions of mixed fact and law were reviewed for palpable and overriding error, in the absence of an extricable legal error or a question of more general application.

(1) Did the trial judge err by finding that Intact was estopped from relying on the vacancy exclusion in the June 2010 renewal policy?

The Court agreed with Intact that the trial judge's findings were better characterized as leading to the conclusion that Intact was estopped by promissory estoppel. This was an extricable legal issue that was reviewable on a standard of correctness. However, the Court believed the trial judge's error in treating this case as involving estoppel by representation rather than promissory estoppel did not affect the validity of her conclusion that Intact was estopped from relying on the vacancy exclusion, based on her underlying findings of fact, which were entitled to appellate deference.

(2) Did the trial judge err in finding that the November 2, 2010, policy amendments were invalid?

Intact made two arguments challenging the trial judge's conclusion that the amendments it made to Lalani's policy on November 2, 2010, were inoperative.

a) Did the trial judge err in treating s. 124 of the Insurance Act as engaged?

Section 124(1) of the Insurance Act only applies to policy amendments that operate "to the prejudice of the insured." In the Court's view, the question of whether Intact's addition of the Vacancy Permit to the policy operated to Lalani's advantage or disadvantage must have been assessed in the context that was created by Intact's own actions, as found by the trial judge, and the legal consequences that flowed from these findings. The Court did not agree with Intact that adding the Vacancy Permit Endorsement benefited Lalani. Intact also argued that even if the Vacancy Permit endorsement did reduce the scope of Lalani's insurance coverage, this change was nevertheless beneficial and not prejudicial to Lalani, because the alternative would have been for Intact to exercise its contractual right to terminate the policy on only five days' notice, which would have left Lalani with no coverage at all after the five days expired. The Court believed the trial judge's findings on this argument were entitled to appellate deference.

b) Did the trial judge err by finding that Lalani did not consent to the amendment?

The Court agreed with the trial judge' conclusion that the document N.L initialed, expressly stated, inaccurately, that there would be no amendments. This vitiated any consent that N.L. might otherwise be taken to have given to the Vacancy Permit. Intact had not squarely addressed this latter finding by the trial judge.

(3) Did the trial judge err by awarding damages for business interruption loss?

Intact also argued that the trial judge reached an incorrect month figure calculation of "6.5 months times $134,673 for a total [of] $875,374.50." The Court was not persuaded that the trial judge's reliance on the 5.5-month figure agreed to by Intact at trial revealed any palpable and overriding error that would permit it to interfere with her damage's calculation.

Having dismissed Intact's appeal relating to its liability for damages resulting from the fire, it was unnecessary to address Lalani and CG&B's cross-appeals against each other, both of which were contingent on Intact succeeding in the fire appeal. The Court also dismissed Lalani's cross-appeal against Intact in the fire appeal seeking increased business interruption loss damages from Intact, which was contingent on Lalani succeeding on the wall collapse appeal.

Clayton v. Clayton (Attorney General), 2024 ONCA 581

[Huscroft, George and Favreau JJ.A.]

Counsel:

Nash, B. Johnston, J. Terry, and N. Williams, for the appellants

Flaim and A. Bourke, for the respondent

Keywords: Arbitration, Public Policy, Environmental Assessment, NAFTA, Tribunals, Jurisdiction, Arbitration Act, s. 46(1), Commercial Arbitration Act, s. 34, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Beals v. Saldhana, 2003 SCC 72, Mexico v. Cargill, Incorporated, 2011 ONCA 622, Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254, Consolidated Contractors Group S.A.L. v. Ambatovy Minerals S.A., 2017 ONCA 939, Corporacion Transnacional de Inversiones S.A. de C.V. v. STET International S.p.A (2000), 49 O.R. 414 (C.A.), United Mexican States v. Karpa (2005), 74 O.R. (3d) 180 (C.A.), Schreter v. Gasmac Inc. (1992) 7 O.R. (3d) 608 (Gen Div.), Canada (Attorney General) v. Clayton, 2018 F.C. 436, Chorzów (Germany v. Poland), 1928 P.C.I.J. (ser.A.) No. 17, Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), (ICJ Reports 2007), Judgment, 26 February 2007

Facts:

The appeal was from an order of the application judge dismissing an application to set aside an arbitration award made pursuant to Chapter 11 of the NAFTA. The appellants argued that the tribunal exceeded its jurisdiction and that its award violated public policy. The appellants sought to develop a quarry in Nova Scotia. Their proposed project required approval from both the federal and provincial Ministers of the Environment. As part of the approval process, a federal-provincial joint review panel (JRP) conducted an environmental assessment. The JRP concluded that the project would cause significant and irreversible changes that would have adverse effects on the "community's core values" and recommended that approval be denied. The federal and provincial Ministers subsequently denied approval.

The appellants invoked the NAFTA arbitration process. The appellants sought redress for the injury caused by the NAFTA breaches in the second stage of the arbitration. The tribunal found that the causal link between the NAFTA breach and the injury alleged by the appellants was not established. The tribunal concluded that the appellants failed to establish "in all probability" or with a "sufficient degree of certainty"—the standards of proof set out in international law—that they would have obtained the necessary approval for their project and would be operating profitably if the environmental assessment process had operated properly.

The application judge dismissed the appellants' application to set aside the damage award. She noted that the tribunal identified the proper international law standard in determining causation and concluded that the correct application of that standard did not raise a "true question of jurisdiction", as set out in Cargill. In the alternative, the application judge concluded that if she was wrong and the question was jurisdictional in nature, the tribunal applied the correct standard of proof and did not exceed its jurisdiction. The application judge also concluded that the award was not contrary to public policy, in that it was not morally repugnant and was not arrived at in a manner contrary to our notions of morality and justice.

Issues:

(1) Did the tribunal exceed its jurisdiction by failing to determine causation on the balance of probabilities standard required by international law?

(2) Does the tribunal's decision conflict with the principles of adjudicative fairness and fundamental justice and so conflicts with the public policy of Canada?

Holding:

Appeal dismissed.

Reasoning:

(1) No, the Court found that the tribunal did not exceed its jurisdiction by failing to determine causation on the balance of probabilities standard required by international law. The Court found that there was no room for doubt as to the court's approach to commercial arbitration review under s. 34(2)(a)(iii) of the Code or s. 46(1)(3) of the Arbitration Act. It is not an occasion for courts to review final and binding arbitration awards for either correctness or reasonableness. In order to intervene, the court must identify what Cargill described as a "true jurisdictional question". That term, and in particular the modifier "true", is intended to emphasize the limited scope of judicial oversight. The modifier "true" is necessary because of the problems inherent in the concept of jurisdiction itself, in particular its amenability to manipulation.

Courts must not permit final and binding arbitration awards to be undermined by spurious jurisdictional arguments. The limited review contemplated by s. 34(2)(a)(iii) of the Code could not be permitted to expand beyond its legitimate boundaries, stating that the tribunal's award did not decide matters beyond the scope of the submission to arbitration. The Court also stated that there was no question in this case that the tribunal identified the correct standard of proof.

This case was straightforward. The appellants invoked the arbitration procedure to redress their damages claim. The expert tribunal was tasked with determining the quantum of damages caused by Canada's NAFTA breaches and set about doing so. The tribunal understood the matter before it. The "bone of contention", as the tribunal put it, was whether, but for the NAFTA breaches, the appellants would have obtained the regulatory approval they required to run the quarry.

The tribunal found that the appellants failed to establish a causal link between the NAFTA breaches and the injury they alleged. The appellants failed to prove that their proposed project would have been approved, quite apart from the subsidiary question, whether it would have operated profitably for a 50-year period. As a result, the appellants were not entitled to the damages they claimed and were awarded a lesser amount that reflected the loss of a fair and non-arbitrary environmental assessment. The Court found that a fair reading of the tribunal's award made plain that it did what it was asked to do. Deciding the damages matter remitted to it, and in doing so applying the international law standard. The appellants did not accept the tribunal's analysis, but offered no basis that would permit the court to intervene.

(2) No, the tribunal's award did not conflict with the public policy of Canada. The appellants repackaged their jurisdictional error arguments in arguing that the tribunal's award was in conflict with the public policy of Canada.

The appellants argument invoked broad principles developed in administrative and constitutional law to regulate the exercise of public authority and invited the court to set aside the tribunal's award on the basis that it is so substantively unreasonable that it conflicted with those principles. The Court stated this to be a high standard that had nothing to do with reasonableness review. Final and binding arbitration decisions are not to be reviewed for reasonableness to determine whether they can be said to be so unreasonable as to be unenforceable on public policy grounds. The court's authority to set aside an arbitration award on public policy grounds is narrow and exceptional in nature.

The Court stated that the public policy concept is well understood in the context of the enforcement of foreign judgments, where it also has a limited scope. A very high burden must be met if the court is to set aside an arbitration award on the basis that it is in conflict with Canadian public policy. The Court stated that this was not an appropriate case to set out the parameters of the public policy concept. Nothing in the case came close to offending Canadians' sense of morality.

In summary, the tribunal heard and determined the matter that was remitted to it. The tribunal's award was not subject to appeal nor was it subject to review for reasonableness. The tribunal's award did not conflict with Canadian public policy.

SHORT CIVIL DECISIONS

Binscarth Holdings LP., v. Anthony, 2024 ONCA 582

[Pepall, van Rensburg, and Monahan JJ.A.]

Counsel:

Wainberg for the appellants, GA 1, GA 2, GA 3, AA, JA, GA 4, and for the respondents Binscarth Holdings LP, GA 1, GA 2, GA 3, AA, JA, GA 4

Hutchinson, E. Brousseau, D. Postel, and G. Vance, for the respondents, GA 5, Binscarth Holdings GP Inc., 1862438 Ontario Inc., 975383 Ontario Inc. and LC, and for the appellants GA 5 and Binscarth Holdings GP Inc.

Keywords: Costs

Hiawatha First Nation v. Cowie, 2024 ONCA 590

[Lauwers, Paciocco and Thorburn JJ.A.]

Counsel:

Henderson and B. Chung, for the appellants/respondents by way of cross-appeal

Golden and C. Pike, for the respondent/appellant by way of cross-appeal

Keywords: Aboriginal Law, Civil Procedure, Injunctions, Appeals, Costs, Indian Act, R.S.C. 1985, c. I-5, Framework Agreement on First Nation Land Management Act, S.C. 2022, c. 19, s. 121, s. 2, Rules of Civil Procedure, r. 57, Hiawatha First Nation v. Cowie, 2023 ONCA 524

Yovcheva v. Hristov, 2024 ONCA 594

[Miller, Harvison Young and Gomery JJ.A.]

Counsel:

D.Y., acting in person

Slade and C. Giordano, for the respondent

Keywords: Family Law, Parenting, Child Support, Spousal Support, Variation, Material Change in Circumstances, Civil Procedure, Appeals, Fresh Evidence, Federal Child Support Guidelines, S.O.R./97-175, ss. 16 and 17, Hickey v. Hickey, [1999] 2 S.C.R. 518, Housen v. Nikolaisen, 2002 SCC 3, Hemmings v. Peng, 2024 ONCA 318

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