Source: https://www.blaneysappeals.com/
Timestamp: 2019-04-22 00:23:40+00:00

Document:
Please find below our summaries of the civil decisions of the Court of Appeal for Ontario.
In Hughes v. Liquor Control Board of Ontario, the Court affirmed a motion judge’s dismissal of a proposed class action against the LCBO stemming from an agreement between the LCBO and Brewer’s Retail which provided terms for the sale of beer in Ontario. The appellants alleged that the agreement violated the Competition Act and that a surcharge levied on restaurants violated the Liquor Control Act. The Court found that amendments to the Liquor Control Act had retroactive effect, such that the regulated conduct defence applied. The Court then found that there was no need to perform statutory interpretation on the Liquor Control Act to determine if the surcharge was a violation, because the Government of Ontario changed the Liquor Control Act retroactively to authorize the price differential.
In Clark v. Ontario (Attorney General), two police officers sued the Attorney General for negligence and misfeasance in public office flowing from the Crown’s dismissal of charges against accused on the basis of allegations that the officers had committed assaults against them. The officers alleged that the Crown had failed to adequately investigate the assault allegations and to call relevant evidence before consenting to the dismissal of the charges. The Court affirmed the existing case law, holding that an action against the Crown does not lie in negligence, but it does for misfeasance in public office. The Court upheld the motion judge’s order that had struck the negligence claim as disclosing no cause of action, but permitted the misfeasance in public office claim to proceed. The Court also agreed with the motion judge that the limitation period should not be relied on to strike the claim at the pleadings stage absent a full evidentiary record, on which discoverability issues could arise.
In Kawartha-Haliburton Children’s Aid Society v. M.W., the Court addressed the requirements placed on judges in child protection proceedings under the Child, Youth and Family Services Act, and reviewed the approach to summary judgment motions in such matters. The Court confirmed that matters commenced, but not concluded, under the old legislation were governed by the new CYFSA, thereby imposing different statutory requirements upon judges addressing the question of children’s – especially Indigenous children’s – access to their parents. Further, the Court reaffirmed that the approach to summary judgment in child protection proceedings is and always has been one of caution, with a focus on the Charter implications at stake for vulnerable litigants.
Other matters covered this week included motions to change spousal support orders, and a residential tenancy dispute involving a missing cat.
On another note, my partner, Lea Nebel, and I invite you to our third annual Top Appeals CLE, which has been rescheduled and will now be taking place at the OBA, 20 Toronto Street, Toronto, on Thursday, May 9, 2019. It is a three-hour dinner program beginning at 5 PM, which will also be available by live webcast for those who cannot attend in person.
Tim Danson, Mark Wiffen and Peter Downard will discuss Platnick v Bent, Pointes Protection Association and the “Anti-SLAPP Sextet”.
Wishing everyone celebrating a Happy Easter long weekend and Happy Pesach.
The individual respondent and purported borrower-corporation received a transfer of $100,000 from the appellant on the security of a promissory note guaranteed by the individual respondent. There was a clear conflict on the evidence of the appellant, the individual respondent who guaranteed the promissory note, A, and the purported principal of the borrower-corporation, K. In his affidavit, the appellant stated that A advised that the corporation was a private Ontario company which he controlled. A denied saying this. K stated that he was the sole incorporator of the corporation and that the promissory notes signed on behalf of the corporation by A were signed without authorization. The motion judge dismissed the appellant’s motion for summary judgment on the promissory note and guarantee, and then granted summary judgment in favour of the respondents by dismissing the action.
(1) Did the motion judge err in dismissing the action given the factual dispute?
(1) Yes. The motion judge did not advert to the plain conflict in the evidence, a conflict that should have been resolved at a minimum by way of a mini-trial under the summary judgment rules. The motion judge did not explain the basis on which he accepted the evidence of A. The motion judge’s endorsement contained boiler-plate language that is characteristic of many summary judgment decisions, which include a statement that “neither party suggests that any additional steps are necessary”.
The assessment of whether other steps are required must be undertaken by the motion judge. Accepting the assurance of the parties is not the end of the inquiry. It is not open to a motion judge to simply prefer one affidavit over another in the absence of explanatory reasons for the preference that permit appellant review. While the Court agreed that the appellant’s motion for summary judgment should have been dismissed, it disagreed with the reasons provided. It was not appropriate on this record to dismiss the action, given the factual dispute.
In 1994, the parties separated after 15 years of marriage, and divorced two years later. At trial in 1996, the respondent was ordered to pay spousal support in the amount of $4,750 per month on an indefinite basis. The order was based on the appellant’s quick return to work. The appellant did not return to work and the respondent continued to pay support for 22 years. In 2016, in anticipation of retirement, the respondent moved to change the order and sought the termination of support. The appellant moved to increase support to $15,000 per month. The motion judge allowed the respondent’s motion and ordered that support be terminated.
When the parties married, they each held degrees in commerce and were employed in that field. The appellant stopped working when their first child was born and removed herself from the workforce for 10 years to care for the children. In 1996, there were two children, aged 13 and 6. The respondent was awarded custody of both children and thereafter the appellant had effectively no involvement with the older child and limited access to the younger child. In 2000, the appellant’s involvement in the children’s lives more or less ceased.
In 1996, the respondent was a bank analyst and earned $390,000 the previous year. Later, he would earn in excess of $1 million per year. At this time, the appellant was not employed but had obtained a CMA accounting designation and a real estate agent’s licence. She testified at trial that she planned to become self-sufficient. The appellant never re-entered the workforce and her income was almost exclusively from spousal support. She purchased rental properties, some of which operated at a loss, and an organic farming business that also operated at a loss. In 1996, the appellant’s net worth was $200,000 while his net worth at trial was $780,000.
The motion judge found that the appellant never obtained employment, despite having marketable skills, because she never made any serious attempt to do so. Despite arguing that she was unable to work because of depression and disability, she provided no evidence of those conditions, and the motion judge found her not to be credible. The motion judge concluded that the only order that could be made to promote her self-sufficiency would be to terminate support.
(1) By giving the objective of self-sufficiency pre-eminence over other objectives of spousal support in the Divorce Act?
(2) In finding that the appellant was not entitled to support on a compensatory basis?
(3) In finding that the appellant was not entitled to share in the post-separation increase in income?
(4) By terminating support rather than reducing it or imputing income?
(1) No. The motion judge specifically assessed each of the objectives under s. 17 of the Divorce Act, finding that none of them spoke in favour of continued support. The motion judge found that the appellant’s failure to return to work constituted a material change in circumstances.
With respect to the recognition of economic advantage or disadvantage arising out of the marriage, the motion judge found that any disadvantage to the appellant had been compensated for by the length of support. With respect to apportioning financial consequences for child care, the motion judge noted that all responsibility for child care, post-trial, was borne by the respondent. With respect to economic hardship, the motion judge determined that any economic hardship arising from the breakdown of the marriage had long been addressed through the provision of support. The motion judge noted that any current economic hardship was not a result of the marriage or its breakdown, but of the appellant’s choices.
(2) No. The trial judge and the motion judge both considered the principles of compensation addressed under the Divorce Act, s 15(7)(a-c) and 17(7)(a-c). The motion judge was alive to the fact that the appellant withdrew from the workforce, that the appellant had significant child care responsibilities and that the appellant’s child care obligations were sharply reduced at the time of separation and eliminated entirely by 2000.
Assuming, without deciding, that the motion judge’s characterization of the basis for spousal support ordered by the trial judge was an error, it was neither palpable nor overriding. The trial judge did not expressly state the basis of the support order but anticipated that it would be varied “relatively quickly” as the appellant moved to self-sufficiency. Even if the order was made in part on a compensatory basis, that would not entitle the appellant to support in perpetuity. While the Spousal Support Advisory Guidelines did not exist during the trial in 1996, they did provide a measure of what is a reasonable quantum and duration of support. In these circumstances, the high end for length of support would be 15 years. The respondent paid support for 22 years.
(3) No. The support order made no provision for support to be indexed to any increases in income. This was consistent with the trial judge’s anticipation that the support order would soon be varied to account for the appellant’s return to work. Further, given the motion judge’s finding that the appellant made no attempt to become self-sufficient, it was entirely appropriate that she not be entitled to participate in the respondent’s increase in income.
(4) No. The appellant conceded that where there is a lack of effort to achieve self-sufficiency, it can be appropriate to reduce support to incentivize a recipient to make appropriate efforts toward self-sufficiency. The motion judge considered that the appellant was not without significant resources, notwithstanding that the respondent has amassed considerably more. But the motion judge found that the mere fact that there was a disparity between the parties’ respective resources did not supply a juristic reason to continue support. While the result was harsh, the motion judge was entitled to make the order that he did and there was no basis to interfere.
M. Eizenga, R. Agarwal and I. Ishai, for the respondent Brewers Retail Inc.
The appellants were an individual beer consumer and the licensed restaurant he operated. The appellants took issue firstly with a “Framework Agreement” between the respondents, the Liquor Control Board of Ontario (“LCBO”) and Brewers Retail Inc. signed in 2000, which they alleged violated s. 45(1) of the Competition Act. The Framework Agreement provided terms concerning where and how beer could be sold. Secondly, the appellants took issue with a surcharge that Brewers Retail Inc. levied on licensees (essentially, persons such as restaurants and pubs licensed under the Liquor Licence Act, to sell beer), which they alleged violated the Liquor Control Act.
The respondents moved for summary judgment. The motion judge granted the motion for summary judgment and dismissed the appellants’ proposed class action.
(1) Did the motion judge err in dismissing their action based on the Framework Agreement?
(2) Did the motion judge err in finding that Brewers Retail Inc. was entitled to impose a surcharge on beer?
(3) Did the motion judge err in finding that even if a novel tort of misconduct by a civil authority existed in Ontario, that the appellants would not have been entitled to damages?
(4) Did the motion judge err in finding that the retroactive legislative sanctioning of the conduct complained of in the action was a lawful exercise of the province’s undoubted ability to regulate the sale of alcoholic beverages?
(5) Should leave to appeal costs be granted?
(1) The appellants argued that the regulated conduct defence required identifying legislative authority that specifically permitted the impugned conduct and that the Liquor Control Act in effect in June 2000 did not specifically authorize the alleged market conspiracy. They also argued that, even if intra vires of Ontario, retroactive legislation could not be considered in determining the application of the regulated conduct defence. The Court found that the motion judge was correct in finding that the Liquor Control Act authorized the impugned conduct and that the regulated conduct defence insulated the respondents from liability under the Competition Act arising out of the Framework Agreement.
Firstly, the Court applied the regulated conduct defence to s. 45.1 of the Competition Act. In the context of provincial regulated conduct, for the regulated conduct defence to be available, the law providing for criminal liability must leave room for the regulated activity to operate without being criminalized. The motion judge held that the version of s. 45(1) in effect until March 2010, signaled, through the use of the word “unduly”, that the regulated conduct defence was available. He explained that conduct authorized by valid provincial or federal legislation is deemed to be in the public interest and cannot constitute an “undue” limit on competition under Jabour. The motion judge held that s. 45(7) of the Competition Act that came into effect in March 2010 preserved the regulated conduct defence. The Court agreed that as a matter of statutory interpretation, the regulated conduct defence was available to defend civil claims under s. 36 of the Competition Act arising out of conduct allegedly contrary to s. 45(1).
The Court applied Jabour to find that the Liquor Control Act in effect in 2000 authorized the alleged market conspiracy. The appellants argued that express provision or necessary implication in the regulatory regime authorizing or directing the respondents to engage in the impugned conduct was necessary to rely on the regulated conduct defence. The Court rejected this approach, finding that Jabour did not require this level of specificity. The Court agreed that the direction or authorization may be by necessary implication, and there was no differentiation between an express grant or a necessary implication for the purpose of the regulated conduct defence.
The Court rejected the appellants’ argument that the word “authorization” in s. 45(7) imported a requirement that the conduct prohibited by the Competition Act be specifically authorized by the legislation. There was nothing in the language of s. 45(7) that suggested a legislative intention to change the common law interpretation of “authority” as decided in Jabour. The Court then found that the Liquor Control Act at the time of the Framework Agreement authorized the respondents to engage in the impugned conduct. The provisions of the Liquor Control Act authorized the LCBO to allocate sales of beer as between LCBO stores and Brewers Retail Inc. outlets.
Next, the Court considered that the Ontario Legislature in August 2015 enacted s. 10(3) of the Liquor Control Act, which expressly directed the LCBO to enter into the Framework Agreement. This expressly gave retroactive effect back to when the Framework Agreement was signed, “with the effect that the legislation in question is deemed to have always included this provision”: Régie des rentes du Québec v. Canada Bread Company Ltd. The Court rejected the appellant’s argument that the respondents should not be able to take advantage of the regulated conduct defence where the conduct in issue was retroactively sanctioned. The purpose of extending that defence in the context of the Competition Act was to avoid criminalizing conduct that a province deems to be in the public interest. That same interest should be recognized whether it is expressed in legislation in force at the time of the impugned acts, or expressed in retroactive legislation.
(2) No. The appellants argued that the motion judge erred in his interpretation of the Liquor Control Act and that, correctly interpreted, the surcharge violated that Act. Further, they argued that, even if constitutional, retroactive legislation cannot be considered when determining whether there was a juristic reason for a defendant’s enrichment. The Court found that it was not necessary to consider statutory interpretation because the government of Ontario enacted s. 3(1.1) of the Liquor Control Act which retroactively authorized the price differential in issue and declared what the law was. The Court rejected the appellants’ argument that juristic reason cannot be provided by retroactive legislation because the deeming provision in s. 3(1.1) supplied a juristic reason for the enrichment. There was no doubt that retroactive legislation can defeat financial expectations based on the law in place before the retroactive amendment.
(3) No. The Court found that even if that basis for liability were adopted in Ontario, the appellants could not succeed. The appellants relied on Paradis Honey Ltd., in which Stratas J.A. proposed that in claims for damages for misconduct by a civil authority, courts could grant relief where the civil authority acted unacceptably or indefensibly according to public law principles, and where the court decides in its discretion that damages are appropriate. The Court found that relief was not available because the Framework Agreement allocating the beer market was authorized by both the current and retroactive versions of the statute. The price differential was also authorized, at least by retroactive legislation. The conduct of the LCBO was reasonable in the public law sense.
(4) The appellants argued that s. 10(3) of the Liquor Control Act was outside the legislative competence of the government of Ontario, and that it amounted to an impermissible intrusion into the federal government’s trade and commerce and criminal law powers. The Court found that, in considering the “pith and substance” of this provision, the essence of both the overall regulatory regime embodied in the Liquor Control Act and s. 10(3) itself was the regulation and control of the sale of liquor in the province which was unquestionably within a province’s jurisdiction under the Constitution Act, 1867. Furthermore, provinces may also deal with competition in the exercise of their legislative power as was observed in General Motors of Canada Ltd. v. City National Leasing. Here, there was no conflict between valid provincial legislation and the federal Competition Act, as the federal legislation accorded leeway to provinces to implement legislation to advance their public interest, without running afoul of s. 45 of the Competition Act.
(5) No. The Court declined to grant leave to appeal costs. Leave to appeal costs awards should be granted sparingly and only in “obvious cases where the party seeking leave convinces the court there are ‘strong grounds upon which the appellate court could find that the judge erred in exercising his discretion’”: Brad-Jay Investments Ltd. v. Szijiarto. The motion judge largely considered all the arguments made by the appellants, and did not fail to consider a relevant factor.
The respondent Society became involved with the appellant after her oldest child was born. The children, all of whom were First Nations, were apprehended based on protection concerns. The appellant did not contest that all of the children were in need of protection. The respondent moved for summary judgment under the then-in-force Child and Family Services Act (“CFSA”). The appellant consented to Crown wardship but argued in favour of access. The motion judge made the children Crown wards, but denied access. On that issue, he reviewed the then-in-force CFSA to conclude that no order for access should be made because the children’s access to the mother was neither meaningful nor beneficial. However, he failed to determine whether the children were Indigenous, which analysis was required under s. 47(2) of that same legislation.
At the time of the motion, the definitions of “Indian”, “Native person” and “Native child” in the CFSA had been declared invalid on the basis that they infringed section 15(1) of the Charter. That declaration of invalidity was suspended to allow the Legislature to take corrective steps. After the motion judge’s decision was released, the Legislature announced the new Child, Youth and Family Services Act, 2017 (“CYFSA”) was to take effect on April 30, 2018. Transitional provisions stated that all cases not concluded would be covered by the new legislation.
The mother appealed the decision, seeking access. The Divisional Court’s decision was released seven days after the CYFSA was proclaimed in force. The Divisional Court concluded that the motion judge erred first by applying the wrong legal test for summary judgment, and then by failing to provide reasons for his conclusion on access. The Divisional Court found that the motion judge had set out the wrong legal test by failing to ask the key question of whether it was in the interests of justice for him to resolve the case summarily. The Divisional Court also determined that he did not set out the basis for his conclusion on access, but that it was nevertheless apparent from the facts that the mother had not met her burden to establish that access was meaningful and beneficial to the children. The Divisional Court declined to address the matter of the children’s Indigenous heritage, finding that the proclamation of the CYFSA had no bearing on the issue.
(1) Did the Divisional Court err by failing to apply the transitional provisions of the CYFSA?
(2) Did the Divisional Court err by changing the test for summary judgment in child protection matters?
(1) Yes. The Court noted that the CYFSA was enacted to replace the CFSA. Importantly, the CYFSA changed the criteria for access to children in extended care by removing the presumption against access, making the child’s “best interests” predominant and emphasizing the importance of preserving Indigenous children’s cultural identity. A regulation was enacted to provide guidance on transitional matters. It provided that a proceeding commenced under the CYSA but not concluded before the CYFSA came into force continued as a proceeding under the CYFSA. The Court rejected the respondent’s claim that the transitional regulation did not apply, and that “but not concluded” meant that the evidence was not concluded. Had the Legislature intended to capture only proceedings in which the hearing had not concluded, it would have said so. Further, the Court noted that the CYFSA’s remedial scheme, as well as the wording of specific sections, supported this interpretation. The proclamation date was the same date that the previous definition of “Indian” and “native person/child” under the CFSA were deemed to be invalid, thereby avoiding a legislative void. Thus, the transitional provisions applied to this case.
The Court next observed that the record in this case was insufficient to apply the test under the CYFSA. Under the CFSA, the onus was on the person seeking access to establish that the relationship was meaningful and beneficial. This changed under the CYFSA, which states that a court shall not make an access order unless it is satisfied that it is in the child’s best interests. Looking at the relevant provisions, the Court concluded that the burden of proof was no longer on the person requesting access. Instead, the court undertakes a best interests analysis, assesses whether the relationship is beneficial and meaningful, and considers impairment to adoption opportunities as part of this assessment. This mean that it is no longer the case that a parent who proffers no evidence will not gain access. Accordingly, the test for access to children in extended care was expanded in such a way that the record here was insufficient to satisfy its requirements.
Thus, the Court found that the Divisional Court improperly addressed the sufficiency of the record, because it applied the CFSA and erroneously concluded that the record was complete. There was no mention in the Divisional Court’s reasons of the children’s best interests. Further, the Divisional Court applied a “presumption against access” which no longer existed under the CYFSA. Finally, by not applying the new legislation, the Divisional Court failed to account for the children’s views.
Lastly, the Court observed that the record was most insufficient under the CYFSA in relation to the children’s Indigenous heritage. After the judicial finding of unconstitutionality of the definitions of “Indian”, “Native person” and “Native child” in the CFSA, the CYFSA broadened the definition of who is recognized as an Indigenous child. Any child who identifies as Indigenous, has a family member who so identifies, or if there is a connection between the child and a band, is now recognized as Indigenous. Given that the children were Indigenous, the CYFSA required the court to consider how to preserve their connection to their specific Indigenous community and culture. The Divisional Court failed to make a finding as to the children’s First Nations status, consequently failing to consider whether access would assist the children in preserving their cultural identity.
(2) Yes. The Court observed that the Divisional Court misstated the principles of summary judgment in child protection matters, since the Family Law Rules address such motions. Further, the Divisional Court ignored Hryniak’s direction that no genuine issue requiring a trial will exist only “when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment”. Decades of jurisprudence emphasized that fairness in a child protection summary judgment motion necessitates caution and accounting for special considerations. Further, the Court undertook a thorough analysis of why Hryniak’s fairness principle requires that caution is needed for child protection summary judgment motions. In particular, the Court reviewed several factors: the Charter implications of child protection matters; the reality of the litigation for the participants; and the wisdom of the jurisprudence that the Divisional Court overturned.
With respect to Charter implications, the Court observed that child protection litigation engages the Charter rights of both parents and children – in particular, the s. 7 right to security of the person. Indeed, not only are Charter rights engaged, but the participants themselves are unlikely to be able to advance them. With respect to the reality of the child protection litigant, the Court noted that courts should be especially mindful of the reality and material circumstances of those subject to child protection proceedings. Poverty and other forms of marginalization form part of the experience of many parents involved in child protection proceedings. Parents, even when represented by counsel, may simply be overpowered by Children’s Aid societies.
Hryniak’s fairness principles for summary judgment must be applied recognizing the distinctive features of a child protection proceeding. In determining whether there is a genuine issue requiring a trial, the court must exercise caution and apply the objectives of the CYFSA.
The burden of proof is on the party moving for summary judgment.
The court must conduct a careful screening of the evidence to eliminate inadmissible evidence. The court should not give weight to evidence on a summary judgment motion that would be inadmissible at trial.
Judicial assistance must be provided for self-represented litigants.
The special considerations that apply to Indigenous children must be part of every decision involving Indigenous children.
Following a dispute regarding the appellant’s eviction from the respondents’ property, the appellant attended the premises to retrieve his belongings. When the respondents saw him remove a firearm, they asked him to leave and called the police. The appellant alleged he was assaulted, and that his cat was gone when he later returned. The appellant commenced an action against the respondents, seeking damages for assault and for breach of s. 41 of the Residential Tenancies Act (“RTA”). At trial, the appellant abandoned his assault claim and moved to amend his statement of claim in order to assert a claim in negligence relating to the lost cat. The trial judge refused to allow the amendment, finding that the negligence claim was statute-barred under s. 4 of the Limitations Act, 2002. The trial judge also dismissed the claim for breach of s. 41 of the RTA.
(1) Did the trial judge err in dismissing the appellant’s motion to amend the statement of claim?
(2) Did the trial judge err in concluding that the respondents had not breached the RTA?
(3) Did the trial judge err in refusing to admit the affidavit of the appellant’s ex-wife into evidence?
(1) No. There was no dispute that the facts relied on in support of the negligence claim were known to the appellant as of 2010, meaning that the new cause of action was clearly statute-barred based on the expiration of the two-year limitation period. Nevertheless, the Court considered the distinction between pleading a new cause of action versus pleading new relief based on the originally-pleaded facts. The Court found that the trial judge correctly articulated the test for whether a new cause of action was pleaded when he framed the relevant question as being whether there were sufficient material facts originally pleaded which, liberally construed, could nevertheless support a cause of action in negligence. The Court agreed with the trial judge that the appellant had failed to plead the requisite material facts to support a claim in negligence. Furthermore, the court held that while the word “negligence” appeared in the appellant’s reply, it was impermissible to assert a new claim by way of reply.
(2) No. The trial judge found that the respondents had complied with their obligations under s. 41 of the RTA because the appellant’s belongings were retained on site and available for him to pick up for a 72-hour period. Indeed, the appellant had returned later to retrieve his belongings and the evidence indicated that the appellant’s property had been removed from storage.
(3) No. At trial, the appellant sought to introduce into evidence an affidavit sworn by his ex-wife, in order to establish that the appellant owned a third cat and certain other property. The trial judge refused to admit the affidavit, as the ex-wife was not available to be cross-examined on it. According to the appellant, his ex-wife was too ill to attend trial and testify in person. The appellant did not make the necessary arrangements to have his ex-wife cross-examined by video-conference. The appellant had ample notice of the respondents’ intention to examine the appellant’s ex-wife, and could have made those arrangements. Further, there was no prejudice to the appellant, as the trial judge accepted that he had a third cat. The rest of the ex-wife’s evidence as to other property was moot, as the trial judge simply rejected that the respondents had breached s. 41 of the RTA.
Following the appellant officers’ arrest of two men in 2009, both men alleged that the officers assaulted them in the course of arrest. As a result, one man’s charges were stayed, and the other’s conviction was set aside.
The appellant officers sued the respondent Attorney General, alleging that the prosecuting Crown attorneys were negligent and misfeasant because they failed to adequately investigate and call evidence to refute the allegations.
On October 20, 2015, the appellants served notice on the respondent under the Proceedings Against the Crown Act of their intention to commence an action. They commenced their action on June 22, 2016, asserting claims in negligence and misfeasance in public office. The respondent moved under Rule 21.01(1)(a) of the Rules of Civil Procedure to strike the action on the grounds that it was barred by the two-year limitation period in the Limitations Act, 2002, and under Rule 21.01(1)(b) because it disclosed no reasonable cause of action. The respondent also moved under Rules 21.01(3)(d) and 25.11 to strike the claims as scandalous and/or vexatious. The motion judge dismissed the motion to strike based on the limitations issue, struck the negligence claim as disclosing no reasonable cause of action, and allowed the misfeasance claim to proceed. He made no order under Rules 21.01(3)(d) or 25.11.
(1) Was the action time-barred?
(2) Did the action lie against the Crown for negligence?
(3) Did the action lie against the Crown for misfeasance in public office?
(1) No. Although the Court rejected the motion judge’s conclusion that this case constituted a novel claim and was therefore an “arguable exception” to the limitation period, the Court nevertheless found that it would be incorrect to find that the action was time barred in the context of a Rule 21.01(1)(a) motion. An argument that a claim is time barred is a defence to a claim, and as such, it must be pleaded. The respondent was required to specifically plead the limitations defence, but it had not done so because it had not delivered a defence. Second, the Court noted that relevant Ontario authority affirmed that a limitations issue is not normally a question of law that can be determined on a pleadings motion. There may be an issue of discoverability, which is fact-based. Although there may be certain very limited circumstances in which a Rule 21.01(1)(a) motion would be appropriate – for example, after the close of pleadings and in the absence of any factual dispute – a limitation issue in the vast majority of cases should not be determined absent a full record.
(2) No. The Court noted that it is settled law that no claim lies against the Crown in negligence. Notwithstanding recent Supreme Court jurisprudence permitting a claim against the Crown to proceed on the basis of wrongful non-disclosure and awarding Charter damages, the Supreme Court has nevertheless been consistent in its position that the Crown is immune from negligence claims. However, the Court took issue with the motion judge’s analysis in reaching this conclusion – particularly his finding that the existing Supreme Court case law was not dispositive on the issue. The motion judge treated the matter as an open question, and conducted his own duty of care analysis. He concluded that there was a prima facie duty of care, limited to allegations of serious misconduct by police officers in the context of Charter motions. However, he concluded at the second stage of the analysis that public policy considerations defeated the duty of care.
The Court took a different approach in reaching the same conclusion, noting that this aspect of Crown immunity had been determined by the Supreme Court. This line of authority could not be avoided simply by substituting one class of claimants (former accused persons) for another (police officers). Therefore, the motion judge erred in finding that existing case law was not dispositive of the officers’ negligence claim. The Court noted that the motion judge’s approach was too narrow. Notwithstanding that courts have not considered potential Crown Attorney civil liability to police officers, prior Court of Appeal authority already confirmed that it is not determinative, on a motion to strike, that the law has not yet recognized a particular claim. Rather, the court must ask whether it is plain and obvious that the claim has no reasonable prospect of success.
The Court rejected the argument that the negligence claim should not have been struck stage because of the lack of a proper evidentiary record, and because it was speculative that policy considerations accepted in the Supreme Court jurisprudence were applicable here. Relying on Court of Appeal authority, the Court observed that a policy analysis can be conducted on a pleadings motion where there is no indication that a factual record could be of assistance. Further, such an analysis is appropriate where there exists a significant body of jurisprudence to assist in answering the question. Both sets of circumstances were applicable here, as there was no indication that a factual record would have been of assistance, and the relevant case law was extensive.
The Court next addressed the applicability of the Supreme Court’s decision in Henry v. British Columbia (Attorney General). There, Moldaver J found that the “good governance” concerns of the Supreme Court’s malicious prosecution jurisprudence informed the proper scope of Crown liability for Charter damages. Here, the Court noted that Moldaver J’s two “good governance” concerns were also of assistance. The first policy concern – the diversion of Crown attorneys from their primary duties – was equally valid in the case of police claimants. Allowing claims based in negligence would expose Crown attorneys to innumerable claims of police officers who feel aggrieved by decisions with which they do not agree. The second policy concern – encouraging defensive lawyering by Crown attorneys – would mean exposure to negligence claims by the police and would encourage Crown attorneys to focus on extraneous factors during the course of a prosecution. Thus, the Court concluded that the policy concerns in Henry were relevant here.
Lastly, the Court declined to address the respondent’s request to “correct” the motion judge’s conclusion that there was a relationship of proximity between the police and Crown attorneys. In the Court’s view, there was a clear correspondence between the factors animating the scope of Crown immunity and the factors at the second stage of the Anns/Cooper analysis, such that all analytical paths led to the same conclusion. The Court therefore found it unnecessary to engage in a hypothetical inquiry that should properly be saved for a scenario in which it is required.
(3) Yes. The Court concluded first, that the appellants properly pleaded misfeasance in public office, and second, that the motion judge correctly found that Crown attorneys are not immune from liability for misfeasance in public office. Noting that a court was only required at the pleadings stage to assume the plaintiffs can prove their allegations, the Court concluded that the pleading of misfeasance in public office was adequate, properly particularized, and carefully tracked the elements of the tort as set out in Odhavji Estate v. Woodhouse. On the second issue, the Court rejected the same arguments advanced by the respondent in respect of the negligence claim, because misfeasance in public office provided a very high threshold for liability and therefore did not engage the same policy concerns. Looking again to the existing Supreme Court jurisprudence, the Court concluded that the tort already established a high threshold by requiring claimants to advance cogent evidence to substantiate the presence of bad faith or improper motives.
Below are summaries of the civil decisions released by the Court of Appeal for Ontario this week.
In Gendron v. Doug C. Thompson Ltd. (Thompson Fuels), the Court considered a number of issues, including negligence, the apportionment of liability, the sufficiency of reasons, contractual exclusion clauses, and Pierringer Agreements in the context of an unfortunate and widely covered oil spill into Sturgeon Lake in 2008.
The Court grappled with appeals routes in the context of the Bankruptcy and Insolvency Act (“BIA”) in two decisions this week. In the lengthier decision, Business Development Bank of Canada v. Astoria Organic Matters Ltd., the Court held that the chambers judge did not err in finding that the appropriate appeal route in that case was governed by the BIA rather than the Courts of Justice Act. In a short unreported decision, our very own Eric Golden successfully argued that the opposing party did not have an automatic right of appeal pursuant to s. 193(c) of the BIA, and was required to seek leave.
Other topics covered this week included mortgage enforcement, privacy and freedom of information, and civil contempt.
On another note, my partner, Lea Nebel, and I invite you to our third annual Top Appeals CLE, which has been rescheduled and will now be taking place at the OBA, 20 Toronto Street, Toronto, on Thursday, May 9, 2019. It is a three hour dinner program beginning at 5 PM, which will also be available by live webcast for those who cannot attend in person.
Upon the responding party’s insolvency, one of its secured creditors applied for an order under s. 243(1) of the Bankruptcy and Insolvency Act (the “BIA”) and s. 101 of the Courts of Justice Act (the “CJA”) appointing BDO Canada Ltd. as receiver of the responding party (the “Receiver”). The receivership order stated no proceeding or enforcement process could be commenced against the Receiver except with written consent of the Receiver or with leave of the Court.
The Receiver sold assets of the responding party to the moving party under an Asset Purchase Agreement. Shortly thereafter, the moving party complained about the amount of organic waste accumulated inside one of the facilities it had purchased, and the expenses of about $750,000 consequently incurred to clean it up. The moving party claimed the Receiver had breached obligations owed to it and was responsible to compensate the moving party for its expenses. The moving party brought an application for permission to sue the Receiver under the “leave to sue” provision of the receivership order. On May 17, 2018, a Superior Court judge (the “application judge”) dismissed the application, finding that the moving party’s allegations were not supported by evidence disclosing a prima facie case. On November 8, 2018, the application judge refused the moving party’s request to reopen the application to allow the filing of fresh evidence.
The moving party appealed from both decisions. Those appeals were timely if the CJA, under which there is a 30-day limit for commencing an appeal, governed the appeal route. They were late if the BIA, which imposes a 10-day limit, governed. On a motion before a single judge of the Ontario Court of Appeal (the “chambers judge”), the moving party moved for orders a) that its notice of appeal had been properly served and filed under s. 6 of the CJA; b) in the alternative, granting it an extension of time of 19 days in order to appeal under s. 193(c) of the BIA; or c) in the further alternative, granting it an extension of time of 19 days to seek leave to appeal and granting leave to appeal pursuant to s. 193(e) of the BIA. In a separate motion, the moving party moved before the chambers judge for orders a) declaring that the appeal from the application judge’s decision denying leave to introduce fresh evidence was governed by s. 193(c) of the BIA, or in the alternative s. 6 of the CJA, such that leave to appeal was not required; or b) in the alternative, granting leave to appeal pursuant to s. 193(e) of the BIA.
The chambers judge found the BIA governed the moving party’s appeal and dismissed the motions. The reference in the receivership order to the CJA did not have the effect of ousting the BIA as the source of the appellate authority, nor could it as a matter of federal paramountcy. The provisions of the BIA providing for appeals as of right were not applicable to the appeal, and no grounds for granting leave to appeal existed. The chambers judge also held there was no reviewable error in the application judge’s discretionary decision not to admit the moving party’s proposed fresh evidence.
On appeal, the moving party argued that those conclusions were derivative of the chambers judge’s conclusion about which statute governed the appeal route, and argued that the CJA did, meaning the moving party did not require leave to appeal or an extension of time. The moving party submitted that in view of the Supreme Court’s decision in Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd, as long as there was no operational conflict between the provincial and federal law and the provincial law did not frustrate the federal law’s purpose, the provincial law would continue to apply alongside the federal law.
The Receiver argued that the proceedings giving rise to and arising out of the receivership order were BIA proceedings. Parliament had constitutional authority over the procedure in all matters relating to bankruptcy, and since the appeal provisions of the BIA and CJA were in operational conflict, the BIA provisions prevailed. Alternatively, the only way to comply with both schemes was to follow the more restrictive provisions in the BIA appeal route.
(1) Did the chambers judge err in determining that the proper appeal route was governed by the BIA?
(1) No. The Court held that where the order sought to be appealed was made in reliance on jurisdiction under the BIA, the proper appeal route is governed by the BIA. The Superior Court had dismissed the moving party’s request to sue the Receiver in reliance on the “leave to sue” provision in the receivership order. The Court’s authority to include that provision in the receivership order flowed by necessary implication from the statutory power to appoint a receiver under s. 243(1) of the BIA. Although the CJA also provided such authority under s. 101, the Receiver had been appointed under both statutes and the appeal was governed by the BIA as a matter of paramountcy.
The Court stated that determination of the applicable appeal route turned on whether the “leave to sue” provision under which the application judge had exercised authority to dismiss the moving party’s application had been included in the receivership order pursuant to jurisdiction flowing from the BIA. The Court stated that the essential and customary nature of a “leave to sue” provision in court-ordered receiverships informed the analysis of the source of the court’s authority to include it.
Before Parliament amended the BIA in 2009 to include s. 243(1), appointments of receivers under provincial legislation included “leave to sue” provisions. According to the Ontario General Division Court in Hamilton Wentworth Credit Union Ltd. v. Courtcliffe Parks Ltd., the authority to include such a provision stemmed from the court’s inherent jurisdiction and the statutory authority in the CJA to appoint a receiver. The Ontario Court of Appeal found that s. 243(1) of the BIA had been enacted against the backdrop of existing provincial legislation authorizing the appointment of receivers. However, the Supreme Court of Canada had clarified in Century Services Inc. v. Canada (Attorney General) that in the insolvency context, statutory authority is to be considered before inherent jurisdiction, and a finding of statutory authority would make any reference to inherent jurisdiction unnecessary.
In considering s. 243(1) of the BIA, the Court stated that under the modern approach to statutory interpretation the proper understanding of the section’s words in their context and in light of the purpose of the legislation led to the conclusion that Parliament must be taken to have clothed the court with the power to require leave to sue a receiver. Parliament’s purpose in enacting the provision was to eliminate the need for a patchwork of receivers appointed under provincial legislation. It follows that the court’s power to appoint a national receiver under s. 243(1) of the BIA comprehended the power to include essential receivership terms, and the power to include a “leave to sue” provision in a receivership order was necessarily implied.
The Court rejected the moving party’s argument that the fact s. 251 of the BIA specified when a receiver is to be protected from suit contradicted the notion that the BIA authorized a “leave to sue” provision. The Court stated that s. 251 deals with circumstances under which a receiver cannot be sued at all, and does not displace the right of the court to include an essential term in a receivership order requiring court permission for matters falling outside of s. 251. Nor did failure to specifically include receivers in s. 215 support a finding that s. 243(1) did not authorize a “leave to sue” provision. Section 215 of the BIA provides that certain officials cannot be sued without court permission. Contrary to those officials, s. 243(1) receivers are court-appointed and take their powers from the court appointment orders, not the BIA. When appointed under other statutes, they were historically clothed with customary and common terms essential to their appointment, such as the “leave to sue” provision. The BIA power of appointment carried with it the power to impose that type of term.
The Court concluded the moving party had failed to show an error in the underlying premise of the chambers judge’s decisions, namely that the BIA governed the proposed appeals. Although authority grounding the application judge’s refusal to grant leave to sue the Receiver was found in both the BIA and the CJA, federal paramountcy dictated that the BIA appeal provisions governed.
E. Golden and D.P. Preger, for the Receiver Rosen Goldberg Inc.
The Receiver brought a motion for directions following Pillar Capital’s filing of a notice of appeal from a priority order of Justice Dunphy of the Superior Court of Justice. The Receiver’s motion sought, in part, an order declaring that Pillar Capital did not have an automatic right to appeal to the Court of Appeal without first seeking leave. Pillar Capital argued that its appeal did not require leave pursuant to s. 193(c) of the Bankruptcy and Insolvency Act (the “BIA”).
(1) Did Pillar Capital have an automatic right of appeal under s. 193(c) of the BIA?
(1) No, Pillar Capital did not have an automatic right of appeal under s. 193(c) of the BIA, and was required to seek leave to appeal. In the event that Pillar Capital sought leave to appeal, leave would not be granted because the unnecessary bifurcation of the proceedings was not in the interests of justice.
The respondents granted a second mortgage on their home to secure a loan from the appellant. The day before the mortgage matured, the respondents received a discharge statement by email which included an amount of $128,604.30 to be paid. The discharge statement was dated a week before the date the email was received and provided that legal enforcement would be commenced after 15 calendar days. It did not state when the 15 days would begin to run. Two days later, the respondents received a registered letter from the appellant’s counsel indicating that the mortgage was in default by reason of failure to pay the amount due on the redemption date. The letter enclosed a Notice of Sale under Mortgage which specified a discharge amount of $153,285.10 and referred to a payment date that was more than a month later. Despite this, the letter demanded payment by the day the letter was dated.
The respondents challenged the amounts claimed by the appellant and the premature notice of sale, and brought an application to the Superior Court seeking an order under s. 12 of the Mortgages Act for a discharge of the mortgage upon payment into court of an amount to be determined by the court, and a declaration that the Notice of Sale was of no force and effect. The application judge considered the affidavit evidence and determined that the amount owing was $144,886.05. He allowed certain expenses claimed by the appellant and disallowed others. He ordered that if the amount due and owing was not paid within 30 days, an interlocutory injunction that had previously been imposed prohibiting enforcement of the mortgage would be lifted. The appellant appealed this seeking an order setting aside the order of the application judge so that a new proceeding could be commenced before an assessment officer under s. 43 of the Mortgages Act.
(1) Should the application judge have determined the application?
(2) Should the application judge have directed a trial of the issue because there were disputed facts?
(3) Did the application judge err in his treatment of various contested amounts claimed by the appellant?
(1) Yes. The application judge had jurisdiction in this case to address all of the issues that were before him. The appellant contended that the procedure under s. 43 of the Mortgages Act before an assessment officer was the only recourse available to the respondents, and that therefore the application judge lacked jurisdiction to determine the issues in dispute The Court rejected this argument, finding that the respondents brought their application in order to challenge the conduct of the appellant and to determine the proper discharge amount.
Because the Notice of Sale followed only two days after the discharge statement and yet demanded payment of an additional sum of nearly $25,000, there was a real question about the legality of a number of the charges. A mortgagee must be able to ascertain, assert, and finally, defend its right to the legal fees in connection with the mortgage debt. The standard charge terms of mortgage agreements are not a “carte blanche” for a mortgagee to incur and charge fees: Chong & Dadd v. Kaur, 2013 ONSC 6252, at paras. 40 and 43.
In the particular circumstances of this case, the respondents’ court application was a justifiable response to the appellant’s unreasonable conduct in refusing to explain the additional charges and its issuance of a premature Notice of Sale. Even if some of what the application judge determined in relation to the dispute about the amount owing for a discharge of the mortgage could have been addressed before an assessment officer, the matter had been determined. The matter was before a justice of the Superior Court who had jurisdiction to deal with it.
(2) No. The Court found no merit in the appellant’s argument that the application judge ought to have directed a trial of the issue because there were disputed facts. The application judge noted that the material filed on the application was not subject to cross-examination, and even though the evidence of each side was diametrically opposed on key issues, the parties maintained that the application could and should be decided on the record before him. In these circumstances, it was appropriate for the application judge to proceed and to make findings on the evidence that was available.
(3) No. The Court rejected the appellant’s argument that the application judge erred in his treatment of the various contested amounts that were claimed by the appellant. Specifically, in disallowing the mortgagee’s claim for a three-month interest penalty, the application judge indicated that he was not satisfied that there was any prepayment penalty payable under this mortgage, either on default or the failure to pay on the maturity date. Contrary to the appellant’s submission, s. 17 of the Mortgages Act does not provide to a mortgagee any unconditional right to claim such a payment based on maturity alone. With respect to the other items in dispute, the application judge allowed for certain amounts claimed by the appellant, including late payment charges, where there was substantiation for such claims and where they did not offend the Mortgages Act or the Interest Act.
The respondent commenced an action claiming that: (1) monies it had advanced to the appellants had not been properly disbursed; and (2) the appellants failed to have a proper accounting system to account for funds flowing in and out.
On April 27, 2017, an interim order was made (the “Interim Order”) that required the appellants to: (1) account for certain amounts they had received from the respondent by delivering a comprehensive spreadsheet within 15 days, and corroborating documents within 3 days of any request; (2) disclose related documents to an accounting firm to be appointed by the respondent; and (3) pay any unpaid accounts within 15 days.
In June 2017, the respondent brought a successful motion to have the appellants found in contempt of paragraphs (1) and (2) of the Interim Order. Prior to sentencing, the appellants had sought to introduce fresh evidence in order to show that they had purged their contempt. Their fresh evidence motion was dismissed.
The appellants were sentenced on March 6, 2018. They appealed on the basis that the sentence was imposed based on the mistaken conclusion that they had not purged their contempt.
(1)	Did the motion judge err in dismissing the fresh evidence motion?
(2)	Did the motion judge err in finding that the appellants had not purged their contempt?
(3)	In any event, was the sentence disproportionate and therefore unfit?
(1) Yes. The question of whether the appellants had purged their contempt was relevant to, and was likely to impact the issue of sentencing. The fresh evidence dealt with that issue by addressing the appellant’s actions since their previous attendance before the motion judge. Specifically, the appellants deposed that they had fully complied with the Interim Order by December 2017, having supplied all requested documents to PriceWaterhouseCoopers (“PWC”), the firm appointed by the respondent under the Interim Order. These asserted facts would have been before the motion judge had he not erred by striking portions of the appellants’ affidavits that addressed these facts and by dismissing the fresh evidence motion.
(2) Yes. In concluding that the appellants had not purged their contempt, the motion judge cited the appellants’ failure to account for all money in and out, apparently supported by the affidavit of the respondent’s accounting expert, Ms. Patel of PWC. The motion judge mistakenly found her affidavit to be an indication that “PWC was not given all information as ordered”. Ms. Patel deposed that she had not been able to fully reconcile all monies received by the appellants from the respondent with all third-party accounts the appellants were required to pay with those funds.
The court found that Ms. Patel’s affidavit did not contradict the claim in the appellants’ fresh evidence that they had fully complied with the Interim Order. PWC’s inability to reconcile all monies did not in itself demonstrate that the appellants had not produced all documents as required. The declaration that the appellants had not purged their contempt was set aside.
(3) Yes. The order to strike the appellants’ pleadings was disproportionate and therefore set aside. The court reasoned that the Interim Order had required extensive disclosure, and that the appellants had made considerable efforts to comply with it. The fact that the appellants’ former counsel had conceded that their pleading could be struck if they failed to purge their contempt by July 15, 2017 did not alter the court’s finding.
The court also set aside the order that required the appellants to pay PWC’s costs. The Interim Order had required the respondent to pay such costs. The court concluded that the issue of PWC’s fees was a matter for the fixing of costs after trial.
Media reported that the corporate respondent’s former CFO had a criminal record, leading the corporate respondent to retain KPMG to investigate how he was hired and whether he caused any losses. A journalist requested disclosure of KPMG’s resulting Report (“the Report”) pursuant to the Municipal Freedom of Information and Protection of Privacy Act (“MFIPPA”). The personal respondent opposed disclosure, arguing that her personal information contained in the Report was exempt under s. 14 of MFIPPA. The corporate respondent determined that the entire Report should be disclosed; pursuant to s. 16, a compelling public interest in disclosure predominated, as it would shed light on the corporate respondent’s operations and would accord with MFIPPA’s purpose.
The personal respondent appealed to the Information and Privacy Commissioner of Ontario (“the Commissioner”), who upheld the release. He explained that much of the Report contained the personal respondent’s information, which was supplied with the expectation that it would be treated confidentially. He therefore concluded that disclosure would be an invasion of privacy. However, he determined that there was a compelling public interest in disclosure. The public had an interest in knowing whether there had been a conflict of interest and whether funds had been misappropriated. As her personal information was inextricably linked the conflict of interest issue, he concluded that her privacy must yield to the public interest in disclosure. The Commissioner also considered whether any portions ought to be redacted, but concluded there was a compelling public interest in total disclosure. He determined it was unnecessary to identify which portions of the Report were personal information, noting that the personal respondent did not make any submissions on s. 14. Following the decision, she requested that the Commissioner reconsider.
The personal respondent argued that the Commissioner ought to have identified each portion of the Report that constituted personal information. In her submission, without such explicit identification, he was unable to analyze whether s. 14 was overridden by the interest in disclosure. This, in her view, constituted a fundamental defect in adjudication and a failure to exercise jurisdiction. The Commissioner declined to reconsider, stating that he had specifically considered the purpose of the privacy exemption and whether the public interest in disclosure outweighed it. The Commissioner cautioned that he had specifically considered whether any portions ought to be withheld but found a compelling interest in disclosure of the entire Report. Accordingly, the failure to specify which portions of the record included personal information did not constitute a fundamental defect warranting reconsideration. He stated that the inclusion of such information in the reasons “would have been redundant in light of the application of the public interest override”.
The personal respondent sought judicial review, alleging reviewable errors including the Commissioner’s failure to identify the information that qualified for the s. 14 exemption. The Divisional Court allowed the application, quashed the decisions, and remitted the matter to the Commissioner. In the court’s view, the Commissioner’s reasons did not permit the conclusion that the decisions were reasonable. He was required to identify each piece of information that was exempted from disclosure under s. 14, and then balance each piece of information under s. 16. As his reasons did not contain this detailed analysis, his decisions were therefore unreasonable.
(1) Did the Commissioner err in failing to identify and weigh each piece of the personal respondent’s protected information?
(2) Did the Commissioner err in failing to give sufficient weight to the purpose of s. 14 in his s. 16 balancing analysis?
(1) No. The Court began by noting MFIPPA’s purposes and relevant provisions, including its competing interests: the right to access information, and the protection of personal information. Section 14’s prohibition of disclosure was subject to exceptions, one of which dictates that s.14 will not apply “if the disclosure does not constitute an unjustified invasion of personal privacy”. In this case, the parties agreed that the information was exempt from disclosure. However, s. 16 provides an overriding authority to disclose information. The parties agreed that the standard of review was reasonableness, with the Court noting that assessing a decision on a reasonableness standard includes the nature of the statutory task, the evidence, the parties’ submissions, and the process.
First, the Court reviewed the statutory task. Where s. 14 is engaged but there is no s. 16 issue, the Commissioner will apply s. 14 and identify the information that is protected from disclosure. The Commissioner will have to identify each piece of information protected from disclosure, because each will have to be redacted. Therefore, the reasons will set out the Commissioner’s analysis as it relates to the pieces of information to be redacted. Here, the key issue was s. 16’s application. The Court noted that when s. 16 is engaged, additional analysis is required. First, there must be a compelling public interest in disclosure, and second, that interest must clearly outweigh the purpose of the exemption. Here, the two purposes of MFIPPA conflicted. A s.16 analysis involves balancing these competing purposes, with regard to the particular circumstances of the case.
Here, there was no formula for the Commissioner to follow. The level of specificity required will depend on the circumstances, including the nature of the information and the provisions of MFIPPA that are at play. The reasons should be responsive to the issues raised and the parties’ positions. The Court cautioned, however, that this was not meant to suggest that if a party fails to raise an issue, such failure will absolve the Commissioner of his duty to properly apply the statute.
Next, the Court noted that the personal respondent’s submissions provided necessary background to understanding the Commissioner’s reasons. Given that the corporate respondent had acknowledged the exemption under s.14 applied, her submissions made no reference to what parts of the Report contained personal information or which provisions in s. 14 protected that information from disclosure. She focused on KPMG’s assurance of confidentiality prior to her giving an interview and sharing personal information, indicating that she otherwise would not have participated. She also argued that a significant amount of information was already public, and that adequately addressed public interest considerations. Lastly, she made extensive submissions concerning the application of s. 8(2)(c), raising concerns about exposure to civil liability.
The Court reviewed the reasonableness of the Commissioner’s reasons, finding that he considered the different privacy interests at play and the s. 14 factors that supported his findings, while his s. 16 analysis was alive to the potential impact of disclosure on the personal respondent. Accordingly, his approach was reasonable. As a general proposition, the interpretation of s. 16 is “at the heart of the Commissioner’s specialized expertise”. His failure to identify and balance each piece of information did not undermine the reasonableness of his decision. Although a piece-by-piece analysis might sometimes be required, this was not such a case.
(2) No. Notwithstanding the Commissioner’s failure to specify subsections within s. 14(2), the Court denied that this suggested a failure to undertake proper analysis or give proper weight to s. 14. It was apparent that he was alive to legitimate concerns raised by s. 14(2), the possibility of pecuniary harm, and the possibility of unfair reputational damage. With respect to pecuniary harm, she made her submissions based solely on s. 8(2). The Commissioner responded to this concern, explaining that s. 8(2) did not apply. He then incorporated this into his s. 14 analysis. As for potential damage to the personal respondent’s reputation, this concern was addressed by the Commissioner’s acknowledgement that the information was highly sensitive. Further, one of the personal respondent’s submissions on appeal was not raised with the Commissioner, so there was no reason for him to refer to the provisions dealing with these submissions. Lastly, it was open to the personal respondent to address alleged inaccuracies in the Report, but she failed to do so.
Regarding the weight assigned to public interest in disclosure, the Court found that the Commissioner adequately addressed the personal respondent’s concerns. The Court declined to interfere with his reliance on the corporate respondent’s disclosure assessment, with his finding that the Report contained new information that was not publicly available, and with his decision not to redact any information. Given that he indicated that he had considered whether any portion should be redacted, that finding was entitled to deference. Although not determinative, the Commissioner should also have been alive to the possible benefit of disclosure to the record holder. Lastly, the Court found that no error in the Commissioner’s reconsideration decision, since the finding that the Commissioner’s reasons were adequate meant that there was no basis to grant a reconsideration. As the Commissioner noted, the concerns raised by the personal respondent did not demonstrate a “fundamental defect in the adjudication process, or some jurisdictional defect in the decision, in relation to [the] analysis of the mandatory exemption at section 14”.
The appellant, Mr. Tozer, and the respondent, Ms. Tassone, signed a separation agreement (the “Agreement”) in October 2012. Mr. Tozer later brought an application to set aside the Agreement. In June 2018, the motion judge granted summary judgment to Ms. Tassone, enforcing the Agreement.
The motion judge found that the following facts were not in dispute: (i) the Agreement was a full and final settlement of all outstanding claims between the parties; (ii) under the Agreement, Mr. Tozer undertook to pay Ms. Tassone $3,400,000 by December 31, 2015 (this amount was secured by a mortgage (the “Mortgage”) against an asset; (iii) Mr. Tozer had only paid Ms. Tassone $378,491; (iv) Mr. Tozer owed Ms. Tassone $3,121,509 plus interest.
Notably, the summary judgment did not enforce the Mortgage, which was the subject of another proceeding.
(1)	Did the motion judge make palpable and overriding errors in his findings of fact?
(2)	Did the motion judge have jurisdiction to grant summary judgment?
(3)	Did the motion judge deny the appellant procedural fairness and natural justice?
(c)	otherwise in accordance with the law of contract.
The appellant argued that the motion judge erred by failing to find that (i) Ms. Tassone had not disclosed all of her assets prior to signing the Agreement, and (ii) there was a genuine issue as to the significance of the assets. The court found that the motion judge correctly considered the appellant’s claim regarding non-disclosure “with great skepticism”. Mr. Tozer himself had failed to disclose the full value of his assets. Therefore, it was “disingenuous” for him to seek to justify setting aside the Agreement because of Ms. Tassone’s non-disclosure.
Courts are reluctant to interfere when parties have purported to conclusively settle their financial issues (see Quinn v Epstein Cole LLP, 2009 ONCA 662, 92 O.R. (3d) 1 at paras. 3-4). The Agreement at issue specifically stated that it was “in full and final satisfaction” of all outstanding claims between the parties and confirmed that the parties “had sufficiently disclosed their income, assets and liabilities existing at separation and the date of this Agreement.” The court concluded that in such circumstances, even if there was non-disclosure, it was not material.
The motion judge also correctly found that there was no evidence to support a finding that Mr. Tozer did not understand the nature or consequences of the Agreement. There was no allegation of duress or other misconduct, and both parties involved were sophisticated and had received independent legal advice.
In all of the circumstances, the motion judge correctly found no basis to exercise his discretion to set aside the Agreement.
(2) Yes. The motion judge correctly articulated the test for summary judgment, and it was open to him to properly conclude that there was no genuine issue requiring a trial.
Thompson Fuels delivered 700 litres of fuel oil to two oil tanks located in the basement of a home owned by G. Almost immediately, oil began to leak from one of the tanks. G discovered the leak approximately one hour after the oil was delivered and spent the night collecting it in Tupperware containers. He thought he had collected all of the leaking oil. He was incorrect.
Hundreds of litres of oil leaked and drained through a crack between the basement wall and the floor. From there, it drained under G’s house, where some of it remained and soaked into the soil. The rest of the oil made its way through a drainage system under the house and into the city’s culvert, which carried it into nearby Sturgeon Lake. Over the next several months, a massive remediation project was undertaken as a consequence of the leak to both the contaminated land in the surrounding area and the damage to Sturgeon Lake. G’s house was demolished as part of the effort to remove contaminated soil.
G sued in negligence against Thompson Fuels, his fuel supplier and service technician, the Technical Standards and Safety Authority (the “TSSA”), which is the administrative authority responsible for regulation and enforcement of fuels in Ontario, and Les Reservoirs D’Acier de Granby Inc. (“Granby”), the manufacturer of the oil tanks.
Granby settled with G shortly after the trial began, entering into a Pierringer agreement which, in return for Granby’s settlement, released Granby from the action and removed the risk that co-defendants might have to pay Granby’s share of damages if Granby could not do so. At the conclusion of a 27-day trial, the trial judge found that Thompson Fuels was negligent for failing to perform inspections and to test the tanks, but that the TSSA was not because the inspection performed after the spill did not breach the duty of care owed to G. He also found that G had been contributorily negligent for failing to maintain his tanks by having them inspected annually, improper introduction of water into the tanks, and failure to promptly report the leak. He apportioned liability as follows: G 60% at fault and Thompson Fuels 40% at fault. Thompson Fuels was ordered to pay G $864,628 in damages and $465,000 in costs. Costs of the trial were also awarded to the TSSA. In a post-trial ruling on several motions, the trial judge held that Thompson Fuels did not have a right of set-off against the amount paid by Granby to G under the Pierringer agreement.
Thompson Fuels and G initiated separate appeals. Thompson Fuels appealed the trial decision, the post-trial ruling, and the costs awards. G appealed the trial decision only. The two appeals were heard together.
(1) Did the trial judge err in assessing Thompson Fuels’ liability?
(2) Did the trail judge err in assessing the TSSA’s liability?
(3) Did the trial judge err in finding G contributorily negligent, or in assessing the extent of such negligence?
(4) Did the trial judge err in his apportionment of liability?
(5) Did the trial judge err in his assessment of damages?
(6) Did the trial judge fail to provide adequate reasons?
(7) Did the trial judge err in failing to reduce the amount awarded against Thompson Fuels by the amount of the Granby settlement?
(8) Did the trial judge err in dismissing the claim under s. 100.1 of the Environmental Protection Act (“EPA”) for contribution and indemnity against Thompson Fuels?
(9) Did the trial judge err in his costs award?
(1) No. The trial judge did not err in assessing Thompson Fuels’ liability. Thompson Fuels argued that the trial judge made errors of fact or of mixed fact or law pertaining to whether G moved the tanks, whether a comprehensive inspection of the tanks occurred pursuant to Fuel Oil, O Reg 213/01 (the “Regulation”), and other factual issues. The Court found that the trial judge made a series of factual findings and findings of mixed fact and law that were open to him on the evidence.
Next, Thompson Fuels argued that the trial judge made legal errors by failing to (i) properly apply the “elements of negligence” and conduct a proper causation analysis, (ii) exercise his gatekeeper function with respect to opinion evidence given by G’s expert, and (iii) apply a contractual exclusion clause in the customer service agreement signed by G. The Court rejected these submissions, finding that the trial judge’s reasons on the issue of Thompson Fuels’ liability evinced a proper understanding of the principles of negligence, including causation, and were amply supported by the evidence. He also properly exercised his gatekeeper function in admitting expert evidence.
Finally, the trial judge correctly concluded that Thompson Fuels could not avoid liability on the basis of its standard form contract. The trial judge correctly applied Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 for the correct analytical approach to determining the enforceability of exclusion clauses. The trial judge correctly found that the exclusion clause does not expressly exclude liability for noncompliance under the Regulation. The trial judge correctly found that Thompson Fuels had failed to meet its obligation under the Regulation to carry out a comprehensive inspection. Exclusion clauses are to be strictly construed, and the burden is on the party relying on such a clause to prove that it is applicable in a particular case: Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd.,  3 S.C.R. 1210. The Court found that the trial judge had correctly concluded that it would be contrary to public policy to permit a fuel distributor to escape its legal obligation to conduct a comprehensive inspection as a precondition to supplying fuel to a customer.
(2) No. The trial judge did not err in assessing the TSSA’s liability. On appeal, Thompson Fuels and G made essentially the same arguments that they had unsuccessfully asserted at trial. They argued that the trial judge erred by not finding that the TSSA breached its duty of care to G and the public to reasonably inspect the property, monitor for any contamination escaping off site, to issue an order for remediation as required, and to ensure that G took reasonable steps to protect the environment. The Court found that the trial judge was correct in applying Ingels v Tutkaluk Construction, 2000 SCC 12 (“Ingles”) and then concluding that the TSSA owed G no private law duty of care, other than conducting an inspection with reasonable care. As the trial judge noted, neither G nor Thompson Fuels tendered any expert evidence regarding the standard of care of a prudent TSSA inspector. In these circumstances, G and Thompson Fuels failed to meet their onus to establish liability on the part of the TSSA.
(3) No. The trial judge did not err in finding G contributorily negligent or in assessing the extent of such negligence. Both G and Thompson Fuels argued that the trial judge erred in his analysis of contributory negligence. G argued that Thompson Fuels had not raised any issue when servicing the tanks. G also asserted that the trial judge erred in finding that the use of jerry cans to fill the tanks was negligent. The Court found that the trial judge properly found that G failed to take the steps of a reasonably prudent homeowner in the circumstances. Thompson Fuels argued that the trial judge erred in rejecting its argument that G was negligent in failing to disconnect a drainage pipe that connected his house to the city culvert. The Court found that the evidence did not support Thompson Fuels’ argument. The Court also rejected both G’s and Thompson Fuels’ arguments with respect to G’s mitigation efforts. The Court found that the trial judge had properly considered G’s efforts to mitigate, and did not err in finding that G was contributorily negligent for failing to report the leak.
(4) No. The trial judge did not err in his apportionment of liability. Thompson Fuels argued that the portion of liability assigned to G by the trial judge was too low given that G was involved in repeated patterns of negligent conduct. G argued that substantially more fault should be attributed to Thompson Fuels because it failed to comply with its statutory obligations. The Court found that the trial judge had carefully considered the comparative blameworthiness of the parties before correctly concluding that G was responsible for the majority of the loss. The apportionment of damages is a very fact-specific exercise. The trial judge is entitled to significant deference with respect to such findings, per Ingles. There was no basis for appellate interference with the trial judge’s apportionment of liability.
(5) No. The trial judge did not err in his assessment of damages. Thompson Fuels argued that the trial judge erred in his assessment of damages because the evidence at trial indicated that there had been pre-existing contamination on G’s property. The Court found that the trial judge conducted a detailed analysis of the remediation costs both on and off of G’s property. The trial judge had been mindful of the principle that damages should be awarded in a way that best ensures that the environment is returned to its pre-contamination condition, per Midwest Properties Ltd. v. Thordarson, 2015 ONCA 819, at para. 63. The assessment of damages was correct, save for one adjustment. The trial judge erred in awarding damages to pay out a line of credit secured against the property because this was a “betterment”. This figure was included in the estimated cost to replace the home. The Court found that this would put G in a better position than he had been in before the leak. Therefore, damages should be reduced by deducting the line of credit payment.
(6) No. The trial judge did not fail to provide adequate reasons. Thompson Fuels had relied on R v Sheppard, 2002 SCC 26 to argue that the trial judge’s reasons were inadequate. Thomson Fuels stated that trial judges are required to provide reasons that inform the parties, the appellate court, and the public not only of the result of the case, but also shed light on how the judge reached his or her conclusion. The Court commented that inadequacy of reasons has become a boilerplate ground of appeal at the Court of Appeal. This case represented a high-water mark in this trend. The Court found that the trial judge wrote 79 pages of reasons wherein he meticulously considered both the evidence and the legal issues at play. His reasons were logically coherent, thoughtful, and clearly stated. Accordingly, this submission had no merit.
(7) No. The trial judge did not err in failing to reduce the amount awarded against Thompson Fuels by the amount of the Granby settlement. Thompson Fuels argued that the trial judge erred by failing to reduce the amount awarded against it by the amount of the Granby settlement or by failing to reduce the total damages by the settlement amount before applying the allocation of fault. The Court found that the trial judge correctly concluded that there was no double recovery until G had been fully compensated for his loss. This decision was consistent with the policy objectives underlying Pierringer agreements.
To consider the issue of overcompensation in Pierringer agreements, the Court adopted the analytical framework set out by the Alberta Court of Appeal (“ABCA”) in Canadian Natural Resources Ltd. v. Wood Group Mustang (Canada) Inc., 2018 ABCA 305, which was released after the trial judge’s decision. The Court also reviewed American case law that considered set-off in relation to Pierringer Agreements. These American cases indicated that although the liability of a non-settling defendant is limited to its proportionate share of fault, the non-settling defendant generally does not enjoy a further right of set-off against the amount of the settlement. The Court stated that although the rule in Canada is different, Canadian courts have not been indifferent to considerations of encouraging settlements and fairness to the non-settling defendant as seen in cases such as Ratych v. Bloomer,  1 SCR 940. The Court stated that determining whether the plaintiff has been overcompensated by reason of a partial settlement is not always a simple matter. In any event, courts should encourage settlements. Moreover, a responsible plaintiff who reaches a settlement agreement should not be punished for the fact that they appear to have reached a settlement for an amount greater than what the court ultimately awards.
(8) No. The trial judge did not err in dismissing the EPA, s. 100.1 claim for contribution and indemnity against Thompson Fuels. G argued that the trial judge erred in not finding Thompson Fuels liable for its proportionate share of the amount G was ordered to pay, pursuant to s. 100.1(1) of the EPA, to the City of Kawartha Lakes, which had completed the remediation. Section 100.1 of the EPA gives a municipality the right to issue orders against the “the owner of the pollutant or the person having control of the pollutant” within the meaning of the EPA. The Court found that the trial judge had properly rejected G’s argument that Thompson Fuels was the “owner” of the oil immediately before the leak. In the trial judge’s view, pursuant to s. 19, Rule 5 of the Sale of Goods Act, RSO 1990, c S.1, G became the “owner” of the oil upon delivery, rather than when payment for the oil was processed approximately five hours after delivery. Furthermore, Thompson Fuels was not in control of the pollutant immediately before the spill; it had lost control of the oil upon delivery. Thus, a claim for contribution and indemnity under the EPA was unavailable.
(9) No. The Court found that there was no basis for appellate interference with the trial judge’s costs award. Appellate courts will set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9. Having made a woefully inadequate offer to settle, Thompson Fuels could not seriously contend that the trial judge had erred by not reducing costs as a consequence of the offer.
A daycare employee was injured while at work, a daycare classroom operated by the appellant Corporation of the Municipality of Red Lake (“Red Lake”). Red Lake leased the space from Keewatin Patricia District School Board (the “School Board”). The employee brought action against the School Board but not Red Lake for injuries sustained. The School Board added Red Lake to the action by third party claim.
Two summary judgment motions were brought, one by each of the School Board and Red Lake. The School Board argued that pursuant to a lease agreement between the two of them, Red Lake was required to defend and indemnify the School Board for the plaintiff’s injuries. Red Lake argued the opposite: that the lease indemnified Red Lake. Red Lake also moved to strike the School Board’s third party claim.
The motion judge interpreted the lease and found in favour of the School Board, holding that Red Lake had a duty to defend and indemnify the School Board pursuant to the lease, and dismissed Red Lake’s motion to strike the third party claim. In particular, the motion judge found that a particular clause in the lease obliged Red Lake to insure against the risk of bodily injury to persons in the daycare. Furthermore, the lease provided that Red Lake was required to acquire an insurance policy and add the School Board as an “additional insured”.
Red Lake appealed the motion judge’s decision.
(1)	Did the motion judge err by failing to consider material clauses?
(2)	Did the motion judge err in law by permitting insurance policy considerations relating to Red Lake’s obligation to insure to predominate over the insurance covenants?
(3)	Did the motion judge err in law by concluding that Red Lake assumed the risk of the School Board’s own negligence in the absence of specific wording in the lease?
(1) No, the motion judge properly considered material clauses when interpreting the lease.
Red Lake argued that by finding a covenant in the lease obliged Red Lake to insure against the risk of bodily injury (Covenant 1), the motion judge failed to give meaning to the School Board’s covenant in the lease to insure against liability for bodily injuries sustained by third parties (Covenant 2).
The Court of Appeal found that Red Lake’s argument failed because the motion judge gave meaning to both Covenant 1 and Covenant 2. In particular, the motion judge interpreted the lease to provide that Covenant 2 was limited by Covenant 1. The motion judge was correct in finding that the lease obliged the School Board to insure for bodily injury to third parties generally, and obliged Red Lake to insure for particular instances of bodily injury.
(2) No, the motion judge did not permit insurance policy considerations to prevail over the obligations to indemnify under the lease. This is because the obligation for Red Lake to obtain insurance that included the School Board as an additional insured was a term of the lease itself.
(3) No, this argument has no bearing on the outcome of the motion judge’s decision. Red Lake argued that the indemnification wording in the lease was not clear enough to exempt the School Board’s liability from its own negligence. This argument did not apply where the party agreed to insure against the relevant negligence, as Red Lake had done in the lease.
J.W.L. Griffiths, for the appellant 1447735 Ontario Ltd.
Below are the civil decisions released by the Court of Appeal for Ontario this week.
In Alectra Utilities Corporation v. Solar Power Network Inc, the Court confirmed that where a contract contains an arbitration clause that expressly denies the possibility of appeal from the arbitral award, the arbitrator’s jurisdiction is not limited to findings that are reasonable or correct. In other words, the arbitrator has the right to be wrong, and being wrong does not mean that the arbitrator exceeded their jurisdiction.
In College of Optometrists of Ontario v. Essilor Group Inc, the Court addressed the scope of provincial legislative authority in respect of regulating out-of-province eyewear retailers. In interpreting the relevant statutes and regulations governing optometry and opticianry in Ontario, the Court concluded that Ontario’s regulatory scheme could not apply to out-of-province parties such as the appellant (which was based out of Quebec but was selling eyewear to Ontarians out of BC). The Court found that there was not a sufficient connection between the activity of the vendor and Ontario and set aside the application judge’s decision that had prohibited Essilor from selling eyewear into Ontario. The Court noted that applying the Ontario legislation to out-of-province suppliers would effectively sanction the creation of a monopoly over the importation of prescription eyewear into Ontario from other provinces. Perhaps the Supreme Court will take interest in this case, with its blend of issues of public importance – from the interprovincial sale of goods through ecommerce, to the protection of public health through regulated health professions, to the constitutional issue of the scope of provincial legislative jurisdiction.
Other topics covered this week included summary judgment in a breach of contract case, assessments of solicitors’ accounts, and wilful blindness in the context of a fraud claim.
Wishing everyone a safe and enjoyable weekend.
In 2014, the appellant — a company with a Quebec head office and whose online business was conducted in British Columbia — acquired a company that sold contact lenses and eyeglasses online to Ontario customers. Shortly thereafter, the respondents wrote a joint letter to the appellant alleging that it was engaged in unlawful behaviour “by dispensing prescription eyewear through the Internet to Ontario consumers without involving an Ontario-licensed health care provider.” Discussions ensued amongst the parties, but no agreement was reached.
The respondents brought an application alleging the appellant breached s. 27 of the Regulated Health Professions Act, 1991 (“the RHPA”) by accepting orders for prescription eyewear online and shipping eyewear to patients in Ontario. The respondents sought a declaration that the appellant had breached s. 27, and an injunction prohibiting the appellant from engaging in such dispensing “except where the dispensing is performed by a Member [of the respondents] or a Member’s delegate”. The respondents did not file any evidence of specific harm to any of their members, instead relying on the presumption that if a person performs a controlled act in contravention of RHPA s. 27, harm to the public is presumed.
The application judge granted the declaration and injunction, making two key findings. First, he held that “[i]n substance [the appellant is] dispensing eyewear to those who require corrective lenses to assist with less than perfect vision”; and second, with respect to the applicability of provincial legislation to out-of-province defendants (such as the appellant), that a sufficient connection existed between Ontario and the appellant’s conduct to fall within the prohibition contained in s. 27 of the RHPA.
(1) Did the application judge err in finding that the appellant performed the “controlled act” of “dispensing” in Ontario within the meaning of the RHPA?
(2) Did the application judge err in finding that a sufficient connection existed between appellant’s provision of eyewear and Ontario so as to bring it within the ambit of the RHPA?
(1) No. The Court began by detailing the exact nature of the appellant’s business model. Via the Ontario subsidiary that it acquired in 2013, the appellant’s online retail business was based in British Columbia and operated in accordance with British Columbia laws and regulations. Located in British Columbia were the subsidiary’s head office and management team, its lab, its distribution centre, and its warehouse. Where a customer in Ontario bought prescription eyewear online from the subsidiary, only two steps in the transaction touch upon Ontario: (i) the customer entered the order online from a device in Ontario; and (ii) the appellant’s subsidiary arranged for the delivery of the eyewear to the customer at a location in Ontario.
Next, the Court reviewed the regulatory scheme under which the appellant operated in British Columbia. Prior to 2010, the appellant’s subsidiary (hereafter referred to as “the appellant”) operated afoul of the provincial regulatory scheme, and in fact was prohibited by court order from selling or dispensing contact lenses online to individuals in British Columbia. In 2010, however, the British Columbia government amended the relevant legislation to permit persons who were not registered optometrists and opticians to dispense corrective eye glass lenses and contact lenses, as long as two main conditions were met. Importantly, those regulations specifically defined “dispense” as “design, prepare, fit, adjust, verify or supply”.
First, the person must possess either: a) a copy of a customer’s “authorizing document” for corrective eyeglasses, or a “contact lens record” for contact lenses; or (b) the information in an “authorizing document” or “contact lens record” accompanied by a statement from the customer certifying the existence and accuracy of the “authorizing document” or “contact lens record”. Second, the person dispensing the prescription would be allowed to rely on a prescription written by an optometrist or qualified medical practitioner outside of British Columbia.
The Court then observed that the structure of Ontario’s regulatory scheme was similar to that of British Columbia. Two statutes define the scope of optometry and opticianry: The Optometry Act and the Opticianry Act. The former defines optometry as “the assessment of the eye and vision system and the diagnosis, treatment and prevention of (a) disorders of refraction; (b) sensory and oculomotor disorders and dysfunctions of the eye and vision system; and (c) prescribed diseases”. The latter defines opticianry as “the provision, fitting and adjustment of subnormal vision devices, contact lenses or eye glasses”.
With respect to the RHPA, the Court noted that the concept of a “controlled act” in the RHPA operates to restrict the performance of specific health care acts to members of recognized professional health care bodies or their delegates. Specifically, s. 27 established the proscription against persons who are not members of the respondents from performing a “controlled act”. In contrast to British Columbia, the Ontario regulatory scheme did not define the term “dispense”.
Looking at the case law, the Court noted that in Wadden v. College of Opticians of Ontario it had previously interpreted “dispensing” in the Opticianry Act as meaning the preparation (but not fabrication), adaptation, and delivery of eye glasses. However, the Court cautioned that Wadden was decided before the rise of online purchasing, and accordingly, the Court’s discussion of “dispensing” then did not foresee the possibility of online purchases.
Looking next at the optometrists’ and opticians’ respective standards of practice, the Court noted that for the former, the only step requiring a patient’s personal attendance is the “fitting or adjusting the spectacles to the patient”. Similarly, the latter set of standards mandates that the delivery of the prescription eyewear be done in person. As the Court observed, it was this requirement that was the point of conflict between the parties.
Finally, the Court turned to the application judge’s reasons. First, it rejected the finding that placing an order constituted a “controlled act”, because it is performed by the customer and not the appellant. Since the prohibition in s.27 of the RHPA is directed at health care suppliers and not at customers, this action therefore could not be contrary to the RHPA. Relatedly, however, the Court rejected the appellant’s argument that selling eyewear and contact lens could be distinguished from “dispensing”, since as a matter of common experience, the dispensing of prescription eyewear involves the commercial sale of a product.
Second, the Court agreed with the application judge’s finding that delivery constituted a “controlled act”. Put simply, the transaction would remain incomplete until delivery was made, and the customer/patient would not obtain the benefit of the prescription until received. Thus, the Court upheld the finding that the appellant was performing a “controlled act”, but cautioned that this in itself was not sufficient to demonstrate that the appellant had violated the RHPA.
(2) Yes. The Court noted that this appeal raised the constitutional issue of whether the appellant’s connection to Ontario was sufficient to support the application of Ontario’s regulatory scheme to an out-of-province entity such as the appellant. While initial formulations of the principle of territorial legislative restriction focused on physical presence in a territory, later formulations put more focus on the relationships among the enacting territory, the subject matter of the law, and the person sought to be subjected to its regulation. The Court observed that there is no single standard defining what constitutes a sufficient connection; whether a sufficient connection exists depends largely on context. The territorial limits on the scope of the provincial legislative authority relate to the conduct that the provincial regulator can regulate, in this case the “controlled acts” under the RHPA.
The Court rejected both parties’ arguments regarding the degree of connection necessary to demonstrate a sufficient connection, noting that the Supreme Court’s judgment in Unifund Assurance Co. v. Insurance Corp. of British Columbia requires a qualitative analysis that does not simply look at the number of relevant acts. Reiterating that the application judge incorrectly concluded that an Ontario customer placing an online order constitutes part of a “controlled act”, the Court stressed that the RHPA was not simply legislation to regulate the nature and quality of health care services. As noted, it contained a strongly commercial aspect, and it was this aspect that predominated in respect of the appellant’s connection to Ontario. Relatedly, the application judge incorrectly characterized the 2010 amendments to British Columbia’s regulatory scheme as changing its purpose from protecting health care to enhancing competition and consumer choice; in actual fact, the evidentiary record did not disclose any shift in legislative purpose.
Given the above, and given that the appellant operated out of British Columbia in completing all of the relevant steps (except for delivery) necessary for compliance with the British Columbia regulatory regime (itself largely similar to the Ontario regime), the Court concluded that delivery in and of itself could not establish a sufficient connection upon which to apply the RHPA.
The Court then rejected the respondents’ argument that the appellant’s sole bricks-and-mortar store in Ontario was evidence of a sufficient connection insofar as the physical store funnelled customers into the online store to complete purchases via in-store computers. Noting that the physical stores required being referred to a registered optician before completing a purchase, the Court concluded that the appellant’s in-store regulatory-compliant transactions could establish the sufficient connection required to apply the RHPA.
Next, the Court assessed the respondents’ “sufficient connection by omission” argument, in which the respondents argued that because the British Columbia regulatory regime did not require the appellant to conduct any fitting or adjustment of the delivered product, the appellant ran afoul of the Ontario regime’s requirement for a fitting or adjustment of the delivery product and therefore established a sufficient connection to Ontario. The Court noted that this argument was based on the view that beyond simply asking whether there was a connection between Ontario and the steps the appellant actually performed, the sufficient connection analysis should also take into account the broader health protection purposes of the RHPA.
The Court rejected this argument, finding that it would essentially prohibit Ontarians from purchasing prescription eyewear online from another province, where the supplier has complied with that province’s regulatory regime, unless delivery of the product were channelled through an Ontario optometrist or optician. Applying the constitutional principle of territorial limits on the scope of provincial legislative authority in that way would in effect sanction the creation of a monopoly over the importation of prescription eyewear into Ontario from other provinces.
Lastly, the Court rejected other jurisprudence on which the application judge relied in reaching his decision. Reviewing several decisions briefly in turn, the Court distinguished each decision from the present appeal.
In view of all of the foregoing, the Court therefore concluded that although the appellant’s act of delivering orders to customers within Ontario constituted a “controlled act” under the RHPA, the RHPA did not apply because the mere act of delivery did not establish a sufficient connection between the appellant and Ontario. Rather, the mere act of delivery had primarily a commercial aspect, not a health care one.
The appellants were clients of the respondent law firm for a number of years. In early 2017, the appellants sought to assess 33 accounts on the basis that they were dissatisfied with the services provided and that they were overcharged. The appellants asserted that, notwithstanding that their application for assessment was commenced more than 12 months after the accounts were issued, there were special circumstances warranting the assessment because they had only received the accounts in 2016, as a package, together with a letter of demand. They also argued, as additional special circumstances, that they were unsophisticated, that the amount at issue was high, and that they had grown increasingly dissatisfied with the services provided by the respondent.
The application judge rejected the appellants’ arguments and concluded that there were no special circumstances that would justify an assessment of the subject accounts. In particular, she did not accept that they had not received any of accounts until 2016. She also noted that there was no evidence of the appellants having expressed dissatisfaction with the services when they were provided, and that the appellants, who were both lawyers and business people, were sophisticated and would have known to raise issues with the accounts at the time they were rendered.
(1) Did the application judge err in rejecting the appellants’ claim that they had not received the respondents’ accounts at the time they were sent?
(2) Did the application judge err in failing to properly consider all of the special circumstances, and in particular the amount of money that was in dispute?
(1) No. The Court noted that since this was a finding of fact, it therefore could only be reversed based on a palpable and overriding error by the application judge. The Court found no such error.
The application judge explained why she had reached this conclusion. The application judge rejected the appellants’ assertion that because the accounts contained an incomplete New York address, rather than the appellants’ home address, they must not have received them. She accepted that bills sent in 2016 were computer-generated, but that the original bills, which were produced in evidence, were primarily addressed to the appellants’ home address, in some cases to a Toronto business address, and an email address the appellants did not dispute was their own. The application judge concluded that the appellants’ blanket assertion they did not receive any bills sent to their home and email addresses did not have an air of reality.
The Court also disagreed that the application judge based her decision on the sheer volume of accounts. What was relevant was that the appellants denied having received any of the accounts, a position that the application judge found not to be credible in view of the fact that a large number of the original bills were addressed to their home and email addresses.
(2) No. The Court was satisfied that the application judge considered all of the possible special circumstances, and that her reasons were responsive to the appellants’ arguments.
The personal appellant was sued in relation to purchases of Apple computer products from another defendant at trial, in which it was alleged that he knew or was wilfully blind to the fraudulent means by which the other defendant obtained the products. The total value of the Apple products was $6.2 million. The personal appellant purchased them from the other defendant with cash, generally meeting in parking lots. The other defendant was the accounting manager of the respondent. In January 2011, she began purchasing the products through fraudulent use of the respondent’s corporate credit card. She then sold the products for her own personal gain.
The parties agreed on the issues to be determined at trial, and that agreement was reflected in a court order directing the trial of the following issues: (1) Whether the personal appellant knew or was willfully blind to the fact that he was purchasing stolen goods or goods fraudulently obtained; and (2) If the personal appellant in fact knew or was willfully blind, whether this applied to all the transactions or just transactions after a certain date.
The trial judge considered the nature and development of the sales relationship between the personal appellant and the other defendant. He divided the sales scheme into three temporal phases. The trial judge found the personal appellant was not wilfully blind during Stage 1, was wilfully blind during Stage 2, and had actual knowledge during Stage 3 that the products were stolen goods or were fraudulently obtained. He awarded damages to the respondent, plus interest, for the products purchased by the personal appellant during Stages 2 and 3.
(1) Did the trial judge err by applying an objective standard to the appellants’ wilful blindness, rather than a subjective standard?
(2) Did the trial judge err in making credibility findings against the personal appellant?
(1) No. The Court agreed with the appellants that the trial judge engaged in an objective analysis. Indeed, as part of his wilful blindness analysis, he stated that wilful blindness is made up of two components: a) In circumstances that arouse the suspicions of a reasonable and honest person that are strong or sufficient enough to raise a duty to inquire; and b) Whether someone in that person’s position chooses to remain deliberately ignorant to the knowledge that inquiry would reveal.
The respondent submitted that the objective analysis was appropriate because this was a “knowing receipt” case. It is true that knowing receipt can be proven not only by establishing actual knowledge or wilful blindness, but also by establishing “constructive knowledge” using objective criteria. However, in this case, the agreed issues for the trial judge were whether the personal appellant had actual knowledge or was willfully blind to the fact that he was purchasing stolen goods or goods fraudulently obtained by the other defendant. The trial judge was not asked to consider whether the personal appellant as a reasonable person would have been alerted to a potential breach of trust.
The Court found that the trial judge erred in law in his articulation of the concept of wilful blindness. As stated by the Court in R. v. Malfara, “Where wilful blindness is in issue, the question is not whether the accused should have been suspicious, but whether the accused was in fact suspicious.” In short, a finding of wilful blindness, which has the same elements in criminal and civil proceedings, involves a subjective focus on the workings of a defendant’s mind.
Nevertheless, the Court found that the trial judge did not err in concluding that the personal appellant was wilfully blind. It was clear from his reasons that the trial judge made findings of fact that established on a subjective standard that the personal appellant was wilfully blind. Those findings established that the personal appellant knew that the products were probably stolen or obtained by fraud, but that he made a deliberate choice not to investigate. This conduct met the definition of wilful blindness articulated in R. v. Sansregret, which arises when a “person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth.” Therefore, despite the trial judge’s error in defining wilful blindness, the Court rejected this ground of appeal.
(2) No. The Court was not persuaded that the trial judge erred in his credibility analysis. He made adverse credibility findings against the personal appellant during Stages 2 and 3. These findings were well rooted in the evidence, including the fact that the personal appellant asked the other defendant a second time in Stage 2 whether the products were legitimate while they were trading in a much higher volume, and the fact that the personal appellant saw invoices in Stage 3 that showed, among other things, that the respondent was purchasing the products at full retail price.
The parties entered into an agreement (the “Agreement”) in which the respondent was to finance solar power projects. The appellant was to develop and finance the projects. The appellant would apply for contracts from the Ontario government and would earn income by receiving revenue from construction and operational/maintenance services, in addition to a share of residual profits. The parties were awarded several contracts. The respondent offered to purchase the appellant’s interest, but no agreement was reached. The respondent issued a notice, purportedly exercising its discretion to end the Agreement. Delivery of the notice terminated the parties’ relationship, depriving the appellant of the contracts’ value. The appellant invoked the Agreement’s arbitration clause, challenging the respondent’s right to deliver notice and seeking damages for lost profit for alleged breach of contract. The respondent counterclaimed for amounts paid to the appellant.
The arbitrator found that although the respondent could deliver a notice “in its sole discretion” under the Agreement, that discretion had to be exercised in good faith. The respondent could not rely on the allegation that certain conditions precedent could not be satisfied, because it had not fulfilled its obligation to use commercially reasonable efforts to finalize the required documents. The arbitrator also found the respondent to be dishonest in its claim that the economic return was insufficient, as no attempt had been made to calculate the rate of return. Further, the respondent’s assertion that it did not wish to develop the projects was untrue in light of its ongoing negotiations to purchase the appellant’s interest.
The arbitrator rejected the respondent’s argument that the appellant was barred from claiming lost profits as damages. The Agreement required each party to indemnify the other with respect to breaches of covenants, but also provided that the indemnifier shall not be liable for damages for lost profit. The arbitrator found that the appellant’s claim was not for breach of a covenant – it was for improper exercise of the right to issue notice. The arbitrator concluded that he could award lost profits because the resolution process for indemnity claims under the Agreement was separate from the arbitration process, which contemplated the award of damages without regard to the more limited concept of damages that applied in the indemnity claims resolution process.
The appellant brought an application to enforce the arbitrator’s award. The respondent brought an application to set aside the award, relying in particular on s. 46(1)3 of the Arbitration Act, 1991. That subsection provides that a court may set aside an arbitration award if the award deals with a dispute that the arbitration agreement does not cover or contains a decision on a matter that is beyond the scope of the agreement.
The application judge noted that the Agreement provided that there was to be no appeal from the arbitrator’s decision. However, he described the issues raised on the application as jurisdictional and stated that interpretation of the Agreement was necessary in order to resolve them. The application judge considered the standard of review under s. 46(1)3. Although he was inclined to the view that the appropriate standard was reasonableness rather than correctness, he found it unnecessary to determine the matter because he would reach the same decision regardless.
The application judge found that the arbitrator did not exceed his jurisdiction in concluding that the Agreement imposed a duty of good faith on the respondent’s exercise of its discretion to issue a notice. The arbitrator was required to interpret the relevant provision in order to determine whether he had jurisdiction to hear the issue, and his interpretation was correct.
However, the application judge concluded that the arbitrator’s finding that he could award damages for loss of profits was unreasonable because it was based on two unreasonable findings. First, the arbitrator unreasonably found that the limitation on damages in s. 5.3(3) of the Agreement did not limit his authority to award damages set out in s.7.1. Second, the arbitrator unreasonably found that the claim for breach of the duty of good faith was not a breach of a covenant.
(1) Did the application judge err by failing to appreciate the distinction between a narrow review on a true question of jurisdiction versus a broader review on the merits?
(1) Yes. The Court began by noting that because the Agreement expressly excluded the possibility of appealing from the arbitrator’s award, the only basis for the respondent to challenge the award was under s. 46(1) of the Arbitration Act, 1991. In particular, the Court noted the applicability of subsection 46(1)3 to this appeal, which stipulates that a court may set aside an arbitral award if “the award deals with a dispute that the arbitration agreement does not cover or contains a decision on a matter that is beyond the scope of the agreement”. In brief, the Court remarked that s. 46(1)3 requires arbitrators to act within the bounds of the authority granted by the agreement pursuant to which they are appointed. Section 46(1)3 is not an alternate appeal route.
Next, the Court remarked upon the difficulty that Canadian courts have faced in identifying jurisdictional questions, due in large part to how elastic the concept of “jurisdiction” is; indeed, this problem manifested in the context of the arbitral award in dispute here. In response to the respondent’s argument that the arbitrator had no jurisdiction to award damages for lost profits because his authority was limited by the terms of Agreement (which precluded liability for such damages), the Court observed that this line of reasoning would mean that any unreasonable or mistaken interpretation of an agreement could be characterized as resulting in an excess or loss of jurisdiction. On this approach, arbitration awards that are not subject to appeal would, nevertheless, be vulnerable to being set aside for jurisdictional error. This, however, is not the law in Ontario.
Turning to the application judge’s decision, the Court found that the application judge ignored the relevant provision of the Agreement that conferred a plenary jurisdiction on the arbitrator. Instead, the application judge took a much narrower view of the arbitrator’s jurisdiction as a result of emphasizing the wrong provisions of the Agreement. This led to the incorrect conclusion that an arbitration award that is not subject to appeal must be set aside because, in essence, the arbitrator had only the jurisdiction to make an award that was reasonable or correct. In fact, as a result of the provision in the Agreement which foreclosed the possibility of an appeal from the arbitral award, it was within the arbitrator’s jurisdiction to make an unreasonable or incorrect award. The arbitrator’s award was therefore enforced.
The parties were involved in a failed real estate transaction that the appellants refused to close because of numerous allegations against the respondent purchasers. The respondents brought an action for specific performance of the sale of the appellants’ farm property, alternatively claiming damages for breach of the agreement. The respondents moved for summary judgment enforcing the agreement of purchase and sale and granting specific performance. Following service of the summary judgment motion, the appellants delivered a statement of defence and counterclaim, and issued a third party claim against the real estate agents – who represented both the appellants and the respondents on the transaction – claiming that the agents exerted undue pressure on the appellants and forced them to enter into the agreement, making it unconscionable.
The motion judge granted summary judgment declaring the agreement of purchase and sale valid, but denied the remedy of specific performance and ordered a trial regarding damages. The motion judge made a number of adverse findings of credibility against the appellants with respect to their interactions with the real estate agents. He also determined that the evidence did not “establish any prospect of a finding of an unconscionable transaction”, and “even if a court could find that the agents misrepresented the effect of signing back the counter-offer, the [appellants’] remedy l[ay] against the agents, not the innocent [respondents]”.
(1) Did the motion judge err by granting partial summary judgment?
(1) Yes. While the Court recognized that the motion judge was endeavouring to give effect to “the shift in culture” directed by the Supreme Court in Hryniak v. Mauldin, he nevertheless failed to fully to do what was fully required of him.
In this appeal, none of these factors were present. First, the issues were not readily bifurcated, as the appellants’ allegations of unconscionability were inextricably intertwined with (and therefore affected the determination of) the validity of the agreement. Moreover, the motion judge made numerous findings of credibility concerning the appellants and their relationship with their real estate agents that were the core of the counterclaim and third party claim. The motion judge’s findings would either constrain the trial judge or lead to the risk of inconsistent findings at trial.
Further, in the light of the appellants’ assertions of a disability that in part grounded their allegations of unconscionability, it was incumbent on the motion judge to consider whether in those circumstances, oral evidence was required to determine the issues of credibility on which the decision turned. Finally, the motion judge’s order did not result in the issues ultimately being dealt with in an expeditious and cost effective manner: the partial summary judgment did not dispose of the respondents’ damages claim, the counterclaim or the third party claim.
The appellant (the “Owner”) owned a hotel and entered into a Hotel Management Agreement (the “Agreement”) with the respondent (the “Manager”) for a term of 10 years. One year later, the Owner terminated the Agreement, alleging that they had cause under the Agreement to do so. The Manager brought an action alleging that the Owner lacked cause to terminate the Agreement and was required to pay the Manager an early termination fee. The motion judge granted summary judgment in favour of the Manager.
(1) Did the motion judge err in principle by weighing evidence without expressly invoking her evidence-assessment powers?
(2) Did the motion judge err in interpreting the phrase “in any material respect” in the Agreement?
(3) Did the motion judge err by accepting an unsubstantiated hearsay allegation in the Manager’s evidence regarding the temporary appointment of an interim manager?
(4) Did the motion judge err in failing to find the Manager breached the Agreement with respect to the appointment of a permanent general manager?
(5) Did the motion judge err in in failing to find that the Manager breached the budget-preparation provisions of the Agreement?
(1) No. The motion judge should have acknowledged that she was utilizing her evidence assessment power but this was not an error in principle that would merit appellate intervention. The Owner argued that the motion judge erred in principle because, having stated that she was not exercising her evidence-assessment powers under r. 20.04(2.1) of the Rules of Civil Procedure, she in fact did so by writing in her reasons that she had weighed the evidence contained in the affidavits. The Court stated that under r. 20.04(2.1), in determining whether there is a genuine issue requiring a trial, a judge may exercise several evidence-assessment powers: weighing the evidence; evaluating the credibility of a deponent; and drawing any reasonable inference from the evidence. These powers are presumptively available to a motion judge; they are not exceptional; and they may be exercised provided their use is not against the interests of justice: Hryniak v Mauldin, 2014 SCC 7 at paras. 66 and 67.
The Court found that that where a judge weighs the evidence filed on a summary judgment motion the judge should acknowledge candidly that she is exercising her r. 20.04(2.1) powers and then go on the explain the basis for any resulting findings of fact. The reasons of the motion judge disclose she used these powers and the better course would have been for her to make such an acknowledgment.
(2) Yes. The motion judge misinterpreted the term “in any material respect” in the Agreement, but the Court found that a reading of the motion judge’s reasons as a whole led to the conclusion that the error did not affect her analysis regarding the breaches alleged by the Owner. Section 12.11(a) of the Agreement defined events of default as including the failure of a party to “perform, keep or fulfill a covenant…in any material respect”, and the continuance of such a failure for more than 30 days after receipt of notice was an event of default. The Owner submitted that the motion judge erred in interpreting “in any material respect” in the Agreement as requiring that a breach rise to the level of one that “goes to the root of the contract” in order for the Owner to assert it as an event of default. The motion judge held that material breach was one that is material, substantial and goes to the root of the contract per Guarantee Company of North America v. Gordon Capital Corp.,  3 S.C.R. 423, at para. 44. As applied to the covenants in the Agreement, it would be a breach that deprived the Owner of the entirety of all benefits of the contract or the very thing the parties contracted for.
The Court found that the motion judge’s contractual interpretation analysis ignored the very language of s. 12.11(a)(i) of the Agreement, which contemplated that a party could assert, as an event of default, the failure to perform a covenant, yet the defaulting party could cure the breach upon receipt of a notice of event of default. Breaches capable of being cured under s. 12.11(a)(i) therefore could include ones far less serious than a breach going to the root of the contract. However, after reviewing each of the alleged breaches, the motion judge concluded that the Owner had failed to prove any of the breaches. Since these findings were anchored firmly in the record and in the language of the Agreement, they were free from reversible error.
(3) No. The Court did not accept this ground of appeal. The Owner submitted that the motion judge erred by accepting an unsubstantiated hearsay allegation in the Manager’s evidence that the interim manager of the hotel appointed by the Manager during the first few months of the Agreement was not working in Canada illegally. The Owner alleged that the interim manager did not have the necessary working visa when she was in this position and relied on this as an event of default to terminate the Agreement.
The Court rejected this ground of appeal for two reasons. First, it found that the Owner’s affidavit did not disclose the source of the information supporting her assertion that she learned the interim manager never secured proper Canadian work documentation. In contrast, the Manager’s affidavit disclosed the source of his information that a representative of the Manager would have written to Canadian immigration authorities regarding the interim manager’s temporary employment. Secondly, when the Owner gave notice of default, there was no event of default left to cure because the interim manager’s tenure had ended four months earlier.
(4) No. The Court found that the motion judge’s findings were supported by the record. The Owner submitted that the motion judge erred in failing to find that the Manager breached the Agreement in appointing a general manager who they alleged was unqualified for the position. The Court rejected this, concluding that the motion judge’s finding that it was the Owner’s final decision to hire the general manager was fully supported by the record and clearly showed the Owner approved of the hiring. Secondly, the Owner contended that the Manager failed to fire the general manager in a timely manner, but the Court found that the evidence did not support that assertion. The Manager accepted the Owner’s insistence that the general manager be fired within the 30-day cure period.
(5) No. The Court found no error in the motion judge’s finding that the Owner approved the 2016 budget. On cross-examination, the Owner’s representative clearly admitted that the 2016 budget was ultimately approved. Furthermore, by the terms of the Agreement the Owner could not rely on its own refusal to approve the Plan as an event of default to terminate the Agreement.

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