Good afternoon.
Following are this week's summaries of the civil decisions of the Court of Appeal for Ontario for the week of October 9, 2023.
Topics covered this week included Anti-SLAPP, an estates case involving an unsuccessful challenge to an estate freeze and extension of time to appeal.
Wishing everyone an enjoyable weekend.
John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email
Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email
Table of Contents
Civil Decisions
Javid Estate v. Watson, 2023 ONCA 665
Keywords: Civil Procedure, Appeals, Extension of Time, Rules of Civil Procedure, Rule 3.02, Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, 40 Park Lane Circle v. Aiello, 2019 ONCA 451
Cormpilas v. 1490565 Ontario Limited, 2023 ONCA 663
Keywords: Wills and Estates, Wills, Validity, Corporations, Oppression, Business Judgment Rule, Business Corporations Act, R.S.O. 1990, c. B.16, ss. 139, Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.)., s. 85(1), Housen v Nikolaisen, 2002 SCC 33, Hryniak v. Mauldin, 2014 SCC 7, Tran v. Bloorston Farms Ltd., 2020 ONCA 440, Hersey v. Hersey, 2016 ONCA 494, BCE Inc. v. 1976 Debetureholders, 2008 SCC 69, 3716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, Brant Investments Ltd. v. KeepRite Inc. (1991), 3 O.R. (3d) 289 (C.A.)
Keywords: Civil Procedure, Anti-SLAPP, Torts, Defamation, Misfeasance in Public Office, Interference with Economic Relations, Champerty, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, 1704604 Ontario Ltd v Pointes Protection Association, 2020 SCC 22, Hansman v Neufeld, 2023 SCC 14, Cusson v Quan, 2007 ONCA 771, Hobbs v Warner, 2021 BCCA 290
Short Civil Decisions
Keywords:Civil Procedure, Summary Judgment, Rules of Civil Procedure¸ r 61.06(1)(a)
Tri-Star Disaster Recovery Inc. v. Mascia,, 2023 ONCA 667
Keywords:Civil Procedure, Appeals, Jurisdiction
Business Development Bank of Canada v. 2598009 Ontario Inc., 2023 ONCA 666
Keywords:Civil Procedure, Abandoned Appeals
CIVIL DECISIONS
Javid Estate v. Watson, 2023 ONCA 665
[van Rensburg (Motions Judge)]
COUNSEL:
R. W Watson, moving party, appearing in person
P. Robson, appearing for the moving party
R. K. Watson Professional Corporation ("RKWPC"), but making no submissions
J. J, appearing in person on motion to be added as a party
M. Swadron, appearing for the responding party, moving party on motion for security for costs
Keywords: Civil Procedure, Appeals, Extension of Time, Rules of Civil Procedure, Rule 3.02, Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, 40 Park Lane Circle v. Aiello, 2019 ONCA 451
FACTS:
On December 30, 2022, W sent an email to S that stated that he would provide his comments on the draft judgment early the following week, that he was preparing a notice of appeal as well as a motion for a stay, and that he anticipated that JJ would move for leave to be a party to the appeal. On January 27, 2023, after the expiry of the appeal period, W sent another email to S apologizing for the delay, stating that he expected to provide a motion record the following week, asking whether there was consent to an order adding JJ as a party, and indicating that he would review the draft order and "advise soonest".
W had not taken any of the steps set out in his emails. On May 24, 2023, the responding party, in a contested motion, obtained an order finding the moving parties in contempt of the judgment. The contempt order required them to take immediate steps to comply with prior orders, including to provide various information and documents, and amended the judgment to provide that, if a certain condominium unit (the "King St. condominium") was sold, the net proceeds of sale would be paid to the responding party and not paid into court.
It was not until June 9, 2023, that the moving parties brought the motion. It was supported by two affidavits, one sworn by JJ and the other by a law clerk at W's law office. Neither affidavit addressed the intention to appeal or the delay. W had not delivered an affidavit. The motion materials included a notice of appeal setting out 46 grounds of appeal.
On the return date of the motion, June 30, the moving parties had sought an adjournment, which was not opposed by the responding party, provided that terms were attached to the adjournment. Coroza J.A. adjourned the motion to September 19, 2023, on terms that required the moving parties to (1) provide responses to outstanding requests in S's letter dated June 20, 2023, by July 17, 2023; (2) pay outstanding costs awards by August 30, 2023; and (3) deliver any reply materials by August 18, 2023 and their factum by August 30, 2023. On July 19, 2023, Pardu J.A. dismissed a motion by the moving parties for an order that the net proceeds of sale of the King St. condominium be paid into court pending the hearing of the extension of time motion. She ordered costs against the moving parties payable by August 20, 2023, and that failing payment the responding party could move without notice for a dismissal of the motion to extend time.
The moving parties had not complied with the terms of Coroza J.A.'s order or pay the costs ordered by Pardu J.A. as required.
ISSUES:
- Should the motion for an extension of time to appeal be granted?
HOLDING:
Motion dismissed.
REASONING:
- No
On a motion to extend time under r. 3.02 of the Rules, the onus is on the moving party to establish the grounds for an extension. The Court noted that while each case depends on its own circumstances, the following factors are relevant: (1) whether the moving party had an intention to appeal within the relevant period (i.e. 30 days from the date of the order under appeal); (2) the length of, and explanation for, the delay in appealing; (3) prejudice to the responding party; and (4) the merits of the proposed appeal. The overarching principle is whether the justice of the case requires the extension of time: Froese at para 15.
The Court stated that although a motion for an extension of time is not an occasion to do a "deep dive" into the merits, compelling merits may tip the balance in favour of an extension of time in cases where other factors may militate against extending time: 40 Park Lane Circle at para 9.
In this case, the Court noted that rather than pointing towards alleged errors of law or palpable and overriding errors of fact or mixed fact and law, and explaining how an appeal of the judgment might be successful, W had made lengthy submissions that essentially sought to reargue the case that was before the application judge. He had not addressed the serious findings that were made against him with respect to his conduct in relation to the creation of the trust, the estate and JJ. Instead, he had made broad and unsupported assertions.
The Court also stated that an extension of time would be prejudicial to the responding party and would be contrary to the interests of justice, given the significant pattern of delay and obfuscation on the part of the moving parties. The responding party had been frustrated and delayed in the administration of the estate and has had to take steps and incur costs to address problems created by the moving parties, both leading up to and in the course of the litigation. The moving parties' conduct showed a pattern of obstruction and delay that was inconsistent with any good faith attempt to proceed with an appeal.
Cormpilas v. 1490565 Ontario Limited, 2023 ONCA 663
[Gillese, Benotto and Copeland JJ.A.]
COUNSEL:
C. Haworth, for the appellants
C. Tonks, for the respondents
Keywords: Wills and Estates, Wills, Validity, Corporations, Oppression, Business Judgment Rule, Business Corporations Act, R.S.O. 1990, c. B.16, ss. 139, Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.)., s. 85(1), Housen v Nikolaisen, 2002 SCC 33, Hryniak v. Mauldin, 2014 SCC 7, Tran v. Bloorston Farms Ltd., 2020 ONCA 440, Hersey v. Hersey, 2016 ONCA 494, BCE Inc. v. 1976 Debetureholders, 2008 SCC 69, 3716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, Brant Investments Ltd. v. KeepRite Inc. (1991), 3 O.R. (3d) 289 (C.A.)
FACTS:
This case arises out of a family dispute involving several closely held family corporations. Ms. C., the appellant, was the daughter of the respondents B.I. and G.I. and the sister of respondent's B.I., J.I., and P.I. When their mother, B.I. died, the children learned that their parents had completed two estate freezes in 2001 and 2002, one for their investment businesses (the Truckers Haven businesses) and one for the Master Steaks business. The Truckers Haven estate freeze was for the benefit of all four children and was not challenged. The Master Steaks estate freeze was for the benefit of the sons and excluded Ms. C.
Initially, Ms. C sought to challenge the Master Steaks estate freeze. However, in 2013, Ms. C. accepted the estate freezes implemented by her parents, signing documents to retroactively regularize any corporate documentary shortcomings in both estate freezes.
One of the properties that was a part of the Truckers Haven businesses, a gas station, was sold in 2007 for approximately $4 million, with a vender take back mortgage ("VTB") of approximately $3.4 million, maturing in 10 years. In 2017, the VTB mortgage matured and was fully repaid. Once the VTB was repaid, a dispute arose regarding the distribution of the VTB proceedings. Ms. C. again challenged the validity of the Master Steaks estate freeze and the consequences of the decisions her parents made in early 2001/2002 and in her father's will.
The appellants appealed the partial summary judgment granted in favour of the respondents.
ISSUES:
1. Did the motion judge err in law and/or commit palpable and overriding errors in finding that the Master Steaks estate freeze was implemented in February 2002?
2. Did the motion judge err in making palpable and overriding errors in finding that the distribution of the VTB proceeds was not oppressive?
3. Did the motion judge err by limiting the time period to year end 2019 onwards when ordering an audit of financial statements of the Truckers Haven businesses?
HOLDING:
Appeal dismissed.
REASONING:
1. No.
The motion judge concluded that all the contemporaneous evidence, documentary and testimonial evidence, established that the parents intended the Master Steaks estate freeze to occur in 2002; their accountants proceeded to implement that estate freeze; the documents to implement the estate freeze were signed and filed with CRA; and everyone relied on the fact that the estate freeze had been implemented.
Further, the motion judge accepted both accountant's evidence that the parents decided to leave the Master Steaks business only to their sons because they worked for Master Steaks full-time, whereas Ms. C. had a successful real-estate business and did not work at Master Steaks.
The motion judge acknowledged that although the documentary record was not without flaws, he found that the testimonial and documentary evidence supported the conclusion that the Master Steaks estate freeze was implemented in February 2002, and in the alternative, that if there were any shortcomings with the documentation, they were regularized in 2013.
The motion judge rejected Ms. C.'s allegations that she was induced to sign the regularizing documentation in 2013 by fraudulent misrepresentation. He described that allegation as "a misconceived attempt to circumvent her exclusion in the Master Steaks business." He found that after the issue had been investigated in 2012 and 2013, "everyone, including Ms. C, accepted that the Master Steaks estate freeze had occurred in 2002 and proceeded to complete the missing and needed documentation to regularize the 2002 Master Steaks estate freeze".
Ultimately, the motion judge understood the legal requirements for an estate freeze under s. 85 of the ITA. He rejected the appellants' claim that the estate freeze was not implemented in 2002 based on the evidentiary record before him. His assessment of the evidence is entitled to deference.
2. No.
The motion judge rejected Ms. C.'s evidence that she made a construction loan to the Truckers Haven business. He found that there was evidence that she loaned her parents money between 2002 and 2006 for the construction of the gas station. However, he rejected her evidence that she loaned money to the Truckers Haven business.
With respect to the payment of various loans and liabilities by the corporation from the VTB proceeds prior to distribution to shareholders, the motion judge found that the decision to pay these outstanding liabilities of the Truckers Haven business was a reasonable corporate decision made by the directors at a directors meeting. The motion judge held that a court will not, and ought not, interfere with business decisions made by directors, unless it is established that the decision was not done honestly, in good faith, and in the best interests of the corporation. The judge referred to the "business judgment rule", which accords deference to business decisions, so long as they lie within a range of reasonable alternatives. The motion judge also held that the directors' approval of the VTB distributions were not oppressive nor unfairly prejudicial of Ms.C.'s shareholdings and claims to loans for unpaid commissions or construction loans.
3. No.
Given the narrowness of the issues left undecided in the litigation after the partial summary judgment that was granted by the motion judge, the Court did not interfere with the motion's judge's decision to limit the audit to year-end 2019 and thereafter.
[van Rensburg, Nordheimer and George JJ.A.]
COUNSEL:
G. Chan and Carlo Di Carlo for the appellant
E. Bisceglia and A. Di Biase for the respondent
Keywords: Civil Procedure, Anti-SLAPP, Torts, Defamation, Misfeasance in Public Office, Interference with Economic Relations, Champerty, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, 1704604 Ontario Ltd v Pointes Protection Association, 2020 SCC 22, Hansman v Neufeld, 2023 SCC 14, Cusson v Quan, 2007 ONCA 771, Hobbs v Warner, 2021 BCCA 290
FACTS:
The respondent, the principal of a development company, City Park, proposed to develop a parcel of land that it owned into a subdivision containing eleven large homes. On December 29, 2017, a group of these residents appealed aspects of City Council's decision to the Local Planning Appeal Tribunal. City Park filed a $10 million action against two of the residents. On October 12, 2018, the Local Planning Appeal Tribunal dismissed the residents' appeal for lack of standing. The respondent then commenced an action against the appellant, a Markham city councillor, seeking $1.1 million. The respondent alleged that the appellant defamed him by reporting to the police an incident between them that occurred at a bar at which the appellant was celebrating her re-election. In August 2020, about two years after the respondent had commenced the action against the appellant, he issued and served a fresh as amended statement of claim. The amended claim added four causes of action: breach of fiduciary duty, interference with economic relations, misfeasance in public office, and champerty.
The appellant brought a motion, pursuant to the anti-SLAPP provisions in s. 137.1 of the Courts of Justice Act, to dismiss the action. The motion judge dismissed her motion. In doing so, the motion judge concluded that the appellant did not satisfy her onus on the motion, under s. 137.1(3), to demonstrate that the respondent's proceeding arose from an expression relating to a matter of public interest.
ISSUES:
- Did the motion judge err in dismissing the motion?
HOLDING:
Appeal allowed.
REASONING:
- Yes.
The motion judge expressed concern about setting "too low" a bar for assessing public interest, notwithstanding her observation that there was a public interest in supporting complaints to the authorities. The motion judge's conclusion regarding expressions on matters of public interest involved a question of law and thus was to be reviewed on a standard of correctness. There was an obvious public interest in members of the public feeling free to report conduct which was of concern to the police. The motion judge also erred in engaging in an evaluation of the expression by saying that "it is questionable who was harassing whom". The motion judge repeated this same error when she addressed the claim for misfeasance in public office. The genesis for the motion judge's concern about stifling challenges to public officials exercising their authority was unclear. The expression at issue, properly considered, was an expression on a matter of public interest. That conclusion was consistent with giving the language of expression relating to a matter of public interest a "generous and expansive" interpretation. The motion judge's conclusion that a finding that complaints to authorities always relate to matters of public interest would set the bar "too low" for the purposes of s. 137.1(3) failed to reflect the importance attached to those expressions.
Having concluded that the expression at issue was on a matter of public interest, the Court found that the appellant had satisfied her onus under s. 137.1(3). Since the Court did not have the benefit of the motion judge's consideration of the factors set out in s. 137.1(4), the motion was remitted to a a new judge to consider those factors and rule on the motion.
SHORT CIVIL DECISIONS
Watson v Herom,, 2023 ONCA 659
[Pepall, van Rensburg and Monahan JJ.A.]
COUNSEL:
L.W, acting in person
R. Faddoul, for the respondent
Keywords:Civil Procedure, Summary Judgment, Rules of Civil Procedure¸ r 61.06(1)(a)
Tri-Star Disaster Recovery Inc. v. Mascia, 2023 ONCA 667
[Miller, Harvison Young and Thorburn JJ.A.]
COUNSEL:
J. Bonniere, for the appellants/moving parties
A. Assuras, for the respondent/responding party
Keywords: Civil Procedure, Appeals, Jurisdiction
Business Development Bank of Canada v. 2598009 Ontario Inc., 2023 ONCA 666
[Miller, Harvison Young and Thorburn JJ.A.]
COUNSEL:
No one appearing for the appellants
B. Frydenberg, for the respondent
Keywords: Civil Procedure, Abandoned Appeals
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