COURT OF APPEAL FOR ONTARIO

CITATION: Magee (Re), 2020 ONCA 418

DATE: 20200626

DOCKET:
C67531

Fairburn, Nordheimer and
    Harvison Young JJ.A.

IN THE MATTER OF: Christian Magee

AN APPEAL UNDER PART XX.1 OF THE
CODE

Sarah Weinberger, as
amicus curiae
, for the appellant

Maura Jetté, for the respondent,
    Attorney General of Ontario

Janice E. Blackburn, for the
    respondent, Person in Charge of Waypoint Centre for Mental Health Care

Heard: In writing

On appeal against the disposition of the
    Ontario Review Board dated August 8, 2019, with reasons dated September 5,
    2019.

Harvison Young J.A.:

[1]

Christian Magee appeals from a disposition of the Ontario Review Board
    (the Board), which ordered his continued detention at the Waypoint Centre for
    Mental Health Care (Waypoint). At the appellants annual review in 2019, there
    was a joint submission that the detention order include a condition that the
    appellant be transferred for a period of up to 90 days to the Forensic Unit at
    St. Josephs Healthcare Hamilton (St. Josephs) for the purpose of an independent
    psychiatric assessment
with a view to a possible transfer to a
    less secure facility.

The appellant would return
    to Waypoint after being assessed at St. Josephs.

[2]

The appellant and Waypoint have made a joint submission for an external
    assessment for three years in a row, from 2017 to 2019. At the 2019 annual review,
    the Attorney General of Ontario supported, for the first time, the appellant
    and Waypoints joint submission. The appellant has achieved maximum privileges
    at Waypoint and the evidence was that he can progress no further in that
    environment.

[3]

The Board rejected the joint submission. The sole issue on this appeal
    is whether the Boards decision to reject this joint submission was
    unreasonable. For the following reasons, I conclude that it was.

A.

Background Facts

[4]

In 1977, the appellant was found not guilty of murder by reason of
    insanity. In 1980, the appellant was found not guilty on two further charges of
    murder, one charge of rape, and one charge of indecent assault, by reason of
    insanity. He has been detained at Waypoint (and its predecessor) for
    approximately 42 years and is now 72 years old. The appellant is diagnosed as
    suffering from sexual sadism, transvestitic fetishism, and antisocial
    personality disorder. There is no dispute that he remains a significant threat
    to the public and must remain the subject of a detention order.

[5]

While a patient at Waypoint, the appellant has had several external
    assessments over the years, as follows:

·

In 1985 at the Clarke Institute of Psychiatry for 90 days;

·

In 1991 at the Royal Ottawa Hospital for 60 days;

·

In 2003 at the Centre for Addiction and Mental Health for 90
    days; and

·

In 2008 at the Brockville Mental Health Centre for 60 days.

[6]

The last assessment in 2008 occurred under Dr. Bradford, a leading
    psychiatrist on the use of medication for treating sex offenders. Since then, the
    appellant has taken Lupron, which has reduced his hormones to castrate levels.

[7]

The appellants attending psychiatrist, Dr. Danyluk, testified that the
    appellant is a model institutional citizen. She also noted that the appellant
    has several medical conditions  such as diabetes, heart issues, and obesity  that
    can affect his ability to reoffend. Dr. Marshall, PhD, is a registered psychotherapist
    at Waypoint. The Board commented that he is a highly recognized sexual
    offender specialist. He conducted weekly therapy with the appellant from
    approximately June to December 2018. In his report on the therapy, Dr. Marshall
    stated that the appellant was a good participant who had made significant
    improvements to his functioning since coming to Waypoint.

[8]

The appellants clinical team opined that he should continue to be
    detained at the all-male High Security Provincial Forensic Programs at
    Waypoint. It was also their unanimous opinion, however, that an assessment at St.
    Josephs would be appropriate for two reasons: first, to obtain a further risk
    assessment, as the last one was completed in 2008; and second, to obtain an independent
    second opinion as to whether or not the risk could be managed in a less secure facility.
    They were also of the view that, in order to conduct that assessment, [i]t
    would be necessary to recreate a maximum security umbrella in a medium secure
    setting such as restricting him to his room during the night and 1:1 [staff to
    patient supervision] during the night hours to reduce the risk to female co-patients.
    As the Waypoint clinical team noted, the appellants risk of reoffending in a
    less secure environment remains high with potential catastrophic consequences.

[9]

At the appellants annual hearing, Waypoint and the appellant submitted
    that the appellant should be assessed at St. Josephs. The Attorney General
    also supported this submission, stating that:

I join and support the suggestion
    of an assessmentto take place at [St. Josephs]the support is overwhelming,
    not only for the Disposition, but for the suggestion of assessment. And I dont
    feel that the Attorney General should take any other, or that there is any
    other responsible position, given the fact that this is the evidence.

[10]

St.
    Josephs was not consulted as to its willingness to take the appellant. It
    advised Waypoint by letter that transferring the appellant to St. Josephs was
    not appropriate for several reasons. First, the appellant had numerous external
    assessments over the years, so a further assessment at St. Josephs was
    unnecessary. Second, there was a concern about limited resources available to
    create the necessary maximum security umbrella in the medium secure setting.
    Third, the appellant posed a high risk to female co-patients and the public,
    particularly given the nature of his offences. Fourth, St. Josephs saw the
    request for an assessment to constitute an effort to obtain a springboard for
    a permanent transfer to a less secure facility. St. Josephs did not apply for
    party status and was not present at the annual review. The letter was admitted as
    evidence on consent.

B.

The Boards Reasons

[11]

The
    Board listed several reasons for rejecting the joint submission.

[12]

First,
    the Board was of the view that the need for the maximum secure umbrella in the
    less secure unit would defeat the likelihood of the assessment offering
    information about his ongoing security needs. The Board noted that a maximum secure
    umbrella at St. Josephs would be more restrictive than the appellants continued
    detention at Waypoint.

[13]

Second,
    the Board appeared to adopt St. Josephs conclusion that another assessment
    would be of little utility. This is because numerous external assessments had
    been done in the past and many of the risk factors involved in the
    standardized assessment of sexual offenders areunchanging in nature.

[14]

Third,
    the Board was of the view that the four diagnoses mean that Mr. Magee continues
    to be a significant threat to the safety of the public. Although he has been
    taking Lupron now for over 10 years, the Board stated that most of the index
    offences involve sadistic murder prior to the sexual rapes. In the Boards
    view, the assessment would mainly address the sexual deviancy part of the
    appellants diagnosis, and thus have limited value regarding the other
    diagnoses.

[15]

The Board concluded that given St. Josephs refusal to take on
    the proposed assessment, their concerns about safety, and its view that an
    assessment is unlikely to produce any valuable information, it would reject
    the joint submission for an assessment at St. Josephs. It ended by commending the
    appellant on his past year, noting that he had done everything asked of him
    and all reports had been very positive.

[16]

The appellant and Waypoint argue that the
    Boards decision was unreasonable, and that in reaching its decision, the Board
    failed to exercise its inquisitorial duty, failed to consider the appellants interests,
    and misapprehended the evidence with the result that it did not order the least
    onerous disposition.

[17]

The respondent Attorney General submits the
    Board carefully considered the assessment request and reasonably determined
    that it was not necessary or appropriate. It maintains that the Board applied
    the law correctly and discharged its inquisitorial duty. Given the appellant poses
    a high risk to public safety, and the fact that St. Josephs opposed the
    proposal for an assessment there, it was open to the Board to reject the joint
    submission.

C.

APPLICABLE LAW

(1)

Standard of Review

[18]

Section
    672.78 of the
Criminal Code
,

R.S.C., 1985, c. C-46,
provides
    that,

(1) The court of appeal may allow an appeal against a
    disposition or placement decision and set aside an order made by the court or
    Review Board, where the court of appeal is of the opinion that

(a) it is unreasonable or cannot be
    supported by the evidence;

(b) it is based on a wrong decision
    on a question of law; or

(c) there was a miscarriage of justice.

[19]

A
    reasonable decision is one that, having regard to the reasoning process and the
    outcome of the decision, properly reflects an internally coherent and rational
    chain of analysis:
Canada (Minister of Citizenship and
    Immigration) v. Vavilov,
2019 SCC 65, 441 D.L.R. (4th) 1, at paras.
    102-104. In addition, a reasonable decision must be justified in relation to
    the constellation of law and facts that are relevant to the decision. For
    instance, the governing statutory scheme and the evidentiary matrix can
    constrain how and what an administrative decision-maker can lawfully decide. Further,
    [w]here the impact of the decision on an individuals rights and interests is
    severe, the reasons provided to that individual must reflect the stakes:
Vavilov
, at para. 133. The principle of responsive
    justification means that especially in such high-stakes cases, the decision
    maker must meaningfully explain why its decision best reflects the
    legislatures intention.

[20]

A Boards disposition will be unreasonable if
    the underlying reasons cannot bear even a somewhat probing examination:
R.
    v. Owen,
2003 SCC 33, [2003] 1 S.C.R. 779, at para. 33.

(2)

The Statutory Framework

[21]

Section
    672.54 of the
Criminal Code

lists
    the factors that the Board shall consider in making its disposition:

·

the safety of the public, which is the paramount
    consideration;

·

the mental condition of the accused;

·

the reintegration of the accused into society;
    and

·

the other needs of the accused.

[22]

Under s. 672.54, the Board must make a
    disposition that is necessary and appropriate. This has been interpreted to
    mean the disposition that is the least onerous and least restrictive:
McAnuff
    (Re)
, 2016 ONCA 280, 130 O.R. (3d) 440, at para. 22.

Moreover, it
    is not simply the choice among three potential dispositions  absolute
    discharge, conditional discharge, or continued detention  that must be the
    least onerous and least restrictive. Conditions attached to a disposition must
    also be the least onerous and least restrictive option:
Penetanguishene
    Mental Health Centre
, at paras. 24, 67-71
.
    Put another way, a finding that a person poses a significant threat to the
    public and must therefore remain detained does not mean that the Board is
    excused from seriously considering the least onerous and restrictive options
    available.

D.

analysis

[23]

In this case, it was common ground that the appellant remained a
    significant threat to public safety and a detention order was required. At the
    same time, all the parties at the annual hearing supported the recommendation
    for an external assessment at St. Josephs as the least onerous and least
    restrictive disposition available.

[24]

The
    central problem with the Boards decision is that it fails to engage with the
    requirement that it make the least onerous disposition, with regard to the
    factors in s. 672.54. This is evident in the reasons it gives for rejecting the
    joint recommendation of all the parties that the appellant be transferred to
    St. Josephs for an assessment.

[25]

While it is open to the Board to reject a joint submission, it
    must explain why it does so in light of the supporting evidence. As noted in
Vavilov
, at para. 127, the principles of justification
    and transparency require that an administrative decision makers reasons
meaningfully account

for the central issues and concerns raised by the parties
    (emphasis added).

(1)

The Need for a Maximum Security Umbrella

[26]

The
    Boards first reason for rejecting the joint submission focused on the need for
    a maximum security umbrella while in the less secure unit. The Boards view was
    that this would defeat the likelihood of the assessment providing information
    about the appellants ongoing security needs and create greater restrictions on
    his liberty than those which he was subject to at the time.

[27]

I
    agree with the appellant and Waypoint that the Boards conclusion was not
    supported by the evidence.

[28]

The
    proposed assessment was to explore whether the appellant could ultimately move
    to a less secure environment, despite the fact that the assessment would occur
    in a more restrictive environment for the appellant in the short term. Dr.
    Danyluk gave evidence that the appellant was already doing everything he can
    to advance himself at Waypoint. The appellant had proactively sought therapy
    with Dr. Marshall and made notable progress. The appellant has also maintained
    the highest level of privileges at Waypoint for many years. The appellant has
    essentially exhausted all treatment options at Waypoint.

[29]

The
    evidence was that the only way to explore the possibility of a less onerous
    disposition was through the proposed external assessment. Dr. Danyluk testified
    that without such an assessment, she could not foresee other ways to assess the
    change in the appellants dynamic risk variables, which were factors relevant
    to whether the appellant could transition to a less secure environment. The
    assessment would provide a good test run of the appellants ability to interact
    with a different group of co-patients and to handle the frustration arising
    from a more restrictive environment during the assessment. Dr. Marshall testified
    that the opportunity to observe the appellant over a longer period, under new circumstances,
    would be very valuable.

[30]

The
    Board does not give any reason for reaching a conclusion contrary to this
    evidence. There was no evidence of any other alternative before the Board.

[31]

In addition, the reasons do not address the fact that

it had previously ordered an independent assessment of the
    appellant under very similar security arrangements (that is, under a high
    security umbrella within a less secure, co-ed environment). The specific
    conditions at Brockville in 2008 required that the appellant be locked in his
    room for eight hours overnight and subject to direct staff observation should a
    female co-patient enter the unit. The independent assessment
proceeded
    without incident, as did all the other assessments that have taken place over
    the last 42 years.

[32]

The Board did not explain why leaving the appellant detained in a
    high security unit is less onerous and restrictive than placing him in a more
    restrictive setting briefly, given the evidence that the period of restriction
    could result in an assessment supporting his long-term reintegration and
    liberty interests, at least through a move to a less secure environment.
It is not clear that the Board appreciated that the temporary
    increase in security during the proposed assessment was necessary to explore a
    less onerous disposition in the long run.

(2)

The Utility of a Further Assessment

[33]

The Board found that there would be little
    utility in another assessment because the appellant had already undergone a
    number of assessments in the past. The Board states at para. 25 of its reasons:

St. Joseph's
    letter refers to the number of external assessments that have been done while
    Mr. Magee has been at Waypoint and suggests that little would be gained from a
    further assessment given that many of the risk factors involved in the standardized
    assessment of sexual offenders are static and therefore unchanging in nature.

[34]

It is unclear why the Board chose to treat the
    letter as authoritative on the utility of an additional assessment, particularly
    given that the reasons do not address the fact that the hospital report, as
    well as Dr. Danyluks and Dr. Marshalls evidence, thoroughly explain why
    another assessment should take place at St. Josephs. As already indicated, the
    Board heard that observing the appellant over an extended period in a new
    environment would allow an assessment of dynamic risk variables, which would
    otherwise be unavailable.

[35]

Further, another assessment would provide more
    current information, as the last assessment was completed in 2008, some 12
    years ago. Notably, Dr. Bradfords main concern after the 2008 assessment was
    that the appellant had a distinct lack of insight into his offences. This led
    Dr. Bradford to recommend continued detention in a maximum security setting.

[36]

There was evidence at the annual review before
    the Board that the appellant has made significant progress on his insight. In
    the hospital report, Dr. Marshall noted that:

[The appellant]
    worked hard prior to and during the current therapy sessions to improve his
    sense of self-worth and was able to describe how this deficit had impacted him
    at the time of his offending. He demonstrated appropriate empathy for both the
    victims of his offending and their families. He was also able to describe the
    impact his offending had on his own family and how much he regretted the harm
    he had caused to many people through his offending. At no point in the therapy
    did Mr. Magee ever try to blame anyone else for his offending. Although he
    worked hard to understand the precipitating factors, he did not use them as
    excuses for his offending.

[37]

Dr. Marshall also testified that the appellant
    gained a much more realistic view of relationships. In particular, the
    appellant understood the importance of staying alone if a relationship was not
    conducive to his rehabilitation.

[38]

Dr. Danyluk called the appellants insight
    limited in that he struggle[s] to understand sexual sadism as a construct.
    However, she did state that the appellant was aware of the risk factors for
    offending, such as frustration or his mood. Moreover, a number of dynamic risk
    variables seem to have changed, such as the appellants view on relationships.
    As such, another assessment would be useful in providing further, independent
    input on how these variables may affect the appellants placement in a less
    secure environment. More generally, Dr. Marshall indicated that a second
    opinion would be useful to combat any bias or gaps in assessment that may have
    arisen from the appellants extremely long institutionalization at Waypoint.

[39]

Finally, there was evidence that the assessment
    would be especially useful if Dr. Bradford conducted it. He has niche expertise
    in medication to treat sex offenders. Waypoint does not have a resident
    psychiatrist expert on sex offenders. At the annual review, counsel for
    Waypoint also submitted that since Dr. Bradford had assessed the appellant
    before, he would be able to provide a particularly useful opinion on the
    appellants progress.

[40]

Given the evidence in support of the joint
    submissions, the requirement in s. 672.54 that the Board take account of the
    appellants interests, and the requirement of responsive justification as
    recently articulated in
Vavilov
,

at para.

133, the
    reasons should have addressed the significant evidence in support of an
    external assessment at this time. Instead, the Board favoured St. Josephs
    conclusion on a narrow point, as articulated in a letter, without explaining
    why.

[41]

In addition, the Board appears to have misconstrued the purpose
    of the proposed assessment, which was to explore the possibility of a less
    onerous disposition.
The assessment would achieve this goal by
    temporarily placing the appellant under a maximum secure umbrella, to allow for
    an updated, independent opinion on the appellants dynamic risk variables.
The
    security umbrella may have increased restrictions on the appellant in the
    short-term. However, if the assessment provided information to support the
    appellants transfer to a less secure environment, then the long-term result
    would have been a less restrictive and less onerous disposition.

[42]

I am not satisfied that the Boards reasons
    reflect adequate appreciation of these aspects, or the assessments long-term
    goal.

(3)

The Boards Responsibilities as an Inquisitorial
    Body

[43]

There
    is a final general difficulty with the Boards reasons. In closing, it stated:

If in the future the Clinical Team
    at Waypoint is able to recommend an assessment that would address a combination
    of the sexual and sadistic features of Mr. Magees diagnoses and the safety
    issues, another panel of the Board may consider a future request for such an
    assessment.

[44]

The
    appellant and Waypoint say
that even if it was reasonable to
    reject the joint submission, it was incumbent on the Board to consider what
    else could be done for the appellant. I agree. This duty arises partly from the
    Boards mandate to consider the appellants interests under s. 672.54 of the
Criminal
    Code
and partly from its inquisitorial role.
Notably, in
Winko v. British Columbia (Forensic Psychiatric Institute),
[1999]
    2 S.C.R. 625, the Supreme Court of Canada made it clear that the Board has a
    duty to search out evidence that favours the accuseds liberty interest. It
    stated at paras. 54-55:

TheReview Board has a duty not only to search out and consider
    evidence favouring restricting NCR accused, but also to search out and consider
    evidence favouring his or her absolute discharge or release subject to the
    minimal necessary restraints, regardless of whether the NCR accused is even
    present.

As a practical matter, it is up to
    the court or Review Board to gather and review all available evidence
    pertaining to the four factors set out in s. 672.54The court and the Review
    Board have the ability to do this. They can cause records and witnesses to be
    subpoenaed, including experts to study the case and provide the information
    they require.

[45]

Here,
    there is no indication that the Board considered any dispositions other than
    accepting or rejecting the joint submission. The Boards concluding comment
    implies that an assessment addressing both the sexual and sadistic features of
    the appellants diagnosis could be of value. Given
this
    conclusion, and the fact that the appellant had reached his maximum privileges
    at Waypoint, the Board should have, at a minimum, explored other potential
    options with counsel, including inquiring whether Waypoint had considered other
    hospitals that might be more prepared to have the appellant
.

[46]

The
    Boards inquisitorial duties required it to do more than maintain the status
    quo. This is especially given that for three years in a row, the appellant and
    Waypoint have made a joint proposal for a temporary external assessment. The appellant
    has been at a standstill for a number of years. He has progressed as much as he
    can at Waypoint.

[47]

As
    an inquisitorial body, the Board is not to wait until it receives a
    recommendation that is framed in a fashion that is acceptable to the Board. The
    Board erred by failing to proactively consider how the appellant could progress
    further, such as, for example exploring with counsel whether another hospital
    or ways of addressing St. Josephs concerns. Again, the fact that very similar
    arrangements had been put in place for the Brockville assessment in 2008 suggest
    that the proposed assessment is possible.

E.

Disposition

[48]

For these reasons, I would allow the appeal and return the matter
    to the Board for a new hearing.

Released: June 26, 2020

JMF

A.
    Harvison Young J.A.

I
    agree Fairburn J.A.

I
    agree I.V.B. Nordheimer J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Martin v. Watts, 2020 ONCA 406

DATE: 20200624

DOCKET: C67749

Rouleau, van Rensburg and Roberts
    JJ.A.

BETWEEN

Karen Enid Elaine Martin

Applicant

(Respondent)

and

David Blair Watts

Respondent

(Appellant)

Michael Rappaport, for the appellant

Gordon S. Campbell, for the respondent

Heard: in writing

On
    appeal from the order of Justice Mary A. Fraser of the Superior Court of
    Justice dated October 23, 2019 and from the costs order dated December 3, 2019.

REASONS
    FOR DECISION

A.

Overview

[1]

This appeal turns on whether the motion judge
    erred in striking out the appellants pleadings and foreclosing his
    participation in the trial of this family law proceeding because of his failure
    to comply with various court orders.

[2]

The motion judge struck the appellants answer
    and amended answer about a month before the scheduled trial date because of the
    appellants ongoing failure to comply with several court orders to pay costs, as
    well as his share of household expenses for the matrimonial home, and to provide
    material financial disclosure. Her order provided the appellant the opportunity
    to bring a motion to determine whether he should be permitted to participate in
    some manner at trial, including the possibility of having his pleadings reinstated,
    if, within eight days of her order, he paid the outstanding amounts owing under
    the orders and provided the requisite disclosure. She also removed appellants counsel
    as his solicitor of record because of the possibility that he may have to
    appear as a witness at trial if the appellant reinstated his pleadings and was allowed
    to participate. The motion judge ordered that the appellant pay the respondent costs
    of the motion in the amount of $6,000.

[3]

The appellant did not comply with the court orders
    and request reinstatement of his answer and amended answer. In this appeal, he continues
    his challenge to his obligations under the court orders requiring payment of
    costs and household expenses and maintains that he has materially complied with
    the court-ordered financial disclosure. He alleges the motion judges order
    striking his pleadings was judicial retaliation. He also submits that the
    motion judge erred in removing his counsel as solicitor of record and that
    MacLeod J. made errors of law in deciding an earlier motion.

[4]

As we shall explain, we agree with the motion
    judges determination that the appellant failed to comply with the various
    court orders that formed the basis for her order striking the appellants answer
    and amended answer and that the appellants failure was wilful and egregious. We
    reject any suggestion of judicial retaliation. Since the appellants other grounds
    are contingent on the reinstatement of his pleadings or involve MacLeod J.s April
    19, 2018 order which is not under appeal, it is not necessary to deal with them.
    We dismiss the appeal.

B.

Issues and Analysis

(1)

The Motion Judge Did Not Err in Striking the Appellants
    Answer and Amended Answer

[5]

The appellant submits that the motion judge erred
    in striking his answer and amended answer because, contrary to her findings, he
    had satisfied the outstanding court orders to pay costs and household expenses,
    and to make further financial disclosure. According to the appellant, the motion
    judge failed to apply the correct test for striking pleadings and to consider all
    relevant factors, including materiality and proportionality. This situation was
    not, the appellant argues, one of the exceptional and egregious cases which
    fits within the test for striking pleadings.

[6]

We are not persuaded by these submissions.

[7]

The motion judge correctly referenced and applied
    the relevant legislative provisions and legal principles. As the motion judge noted,
    r. 1(8)(c) of the
Family Law Rules
, O. Reg. 114/99, permits the court
    to strike out documents filed by a party for failure to comply with a court
    order. She further acknowledged that the exercise of the courts discretion to
    strike pleadings and exclude trial participation is one that should be
    exercised sparingly, in exceptional cases, and only where no other remedy would
    suffice:
Roberts v. Roberts
, 2015 ONCA 450, 65 R.F.L. (7th) 6, at
    para. 15;
Kovachis v. Kovachis
, 2013 ONCA 663, 367 D.L.R. (4th) 189,
    at para. 24. Such an order is driven by the particular facts of each case, which
    the motion judge carefully reviewed in her decision.

[8]

We see no error that would allow us to intervene.
    It was reasonable and appropriate for the motion judge to exercise her
    discretion to strike the appellants answer and amended answer in the
    circumstances of this case.

(a)

The Court Orders Were Wilfully Breached

[9]

We agree with the motion judges conclusion that
    the appellants failure to comply with these court orders was inexcusable, wilful
    and egregious.

[10]

By October 2019, when the respondents motion to
    strike the appellants pleadings for failure to comply with court orders came before
    the motion judge, more than two years had elapsed from the commencement of the
    proceedings on September 8, 2017. The only real substantive issue in dispute in
    these proceedings was the equalization of the parties net family properties. This
    included the appellants challenge to a marriage contract that limits his share
    of the value of the matrimonial home. There had been at least nine court appearances,
    including four case management conferences. Most of them were instigated by the
    appellants unmeritorious motions and his failure to comply with court orders.

[11]

The motion judge found that the appellant had failed
    to fully comply with the following orders and that his failure to do so was unjustified,
    wilful and egregious:

1.

On May 18, 2018, MacLeod J. ordered the appellant
    to pay the costs of his unsuccessful motion in the amount of $5,500. On March
    22, 2019, Aston J. ordered these costs payable within 30 days.

2.

On December 12, 2018, Mackinnon J. ordered the
    appellant to pay forthwith the costs of his unsuccessful motion in the amount of
    $3,470.

3.

On May 21, 2019, the case management judge,
    MacEachern J., ordered the appellant to pay, starting June 1, 2019, the monthly
    sum of $900 into the parties joint account for household expenses given he was
    continuing to reside in the matrimonial home. Since the appellant moved out of
    the matrimonial home in July 2019, his obligation to pay expenses was capped at
    $900.

4.

On July 5, 2019, MacEachern J. ordered the appellant,
    among other things, to provide a complete and accurate financial statement within
    14 days and to provide statements with respect to his BMO chequing or savings accounts
    within 30 days. While the appellant had filed another financial statement on
    June 26, 2019, MacEachern J. noted that it was materially deficient and did not
    address all the issues previously identified. She had ordered, on November 19,
    2018, each party to serve and file an updated sworn financial statement,
    updated certificates of financial disclosure (Form 13A), and a comparison of net
    family properties statement. On February 22, 2019, MacEachern J. ordered the
    appellant to serve and file a sworn financial statement to update his 2017 financial
    statement within 15 days, noting that he was in breach of the November order. On
    May 21, 2019, she ordered the appellant to serve and file a complete and
    accurate financial statement by May 28, 2019.

[12]

The appellant has not complied with these orders.

[13]

First, there is no question that the appellant
    has not to-date satisfied the orders to pay costs by any payment.

[14]

The appellant maintains that he has effectively
    paid the cost orders because he is entitled to set them off against the amounts
    under the mortgage and letter of credit that he says the respondent wrongly registered
    against title to the matrimonial home without his knowledge or consent.

[15]

We agree with the motion judges conclusion that
    the appellants argument has no merit. As she explained:

While any issue of the responsibility for the
    use of and repayment of the parties joint line of credit may be an issue in
    the determination of the claim for an equalization of the net family properties
     this [does not absolve the appellant] from making the payment of costs as expressly
    ordered.

[16]

We note that the appellant did not raise this
    argument or otherwise request a set off at the time these orders were made. It
    appears that this or a similar argument was raised before the case management
    judge when the respondent signalled her intention to bring a motion to strike the
    appellants pleadings. On May 21, 2019, MacEachern J. clearly reinforced the
    appellants obligations to comply with the court orders notwithstanding his
    other claims:

The [appellants] obligation to comply with the
    existing court orders, and specifically the outstanding cost orders, was again specifically
    discussed at the case management conference on May 21, 2019.
I repeat the
    wording included in my endorsement of February 22, 2019 - the cost orders are
    binding on the [appellant]. He is required to comply with those orders.
The
    orders require him to pay $8,970 in costs to the [respondent]. Those orders are
    not discretionary. They are not a suggestion.
They are not contingent on the
    [appellants] other claims in this matter, which will be determined at trial.
The [appellant] is required to comply with the orders, and pay the costs
    forthwith. [Emphasis added.]

[17]

Second, with respect to the outstanding
    household expenses, the appellant offered no explanation for his failure to pay
    them to the motion judge or on appeal. The order was not appealed or set aside.
    As the motion judge noted, the appellants failure to comply with the order is
    wilful and egregious.

[18]

Finally, the appellant has not complied with the
    order for financial disclosure.

[19]

The most basic obligation in family law proceedings
    is the duty to disclose financial information and this obligation is immediate
    and ongoing:
Roberts
, at para. 11;
Manchanda v. Thethi
, 2016
    ONCA 909, 84 R.F.L. (7th) 374, at para. 13, leave to appeal refused,
    [2017] S.C.C.A. No. 29. As this court in
Manchanda

stated, at para. 13, after continual
    admonitions by the courts and the legislature that parties to a matrimonial
    proceeding must produce financial documentation, wilful non-compliance must be
    considered egregious and exceptional, with the result that [t]hose who choose
    not to disclose financial information or to ignore court orders will be at risk
    of losing their standing in the proceedings as their claims or answers to
    claims may be struck.

[20]

The motion judge correctly determined that this is
    the case here. Notwithstanding several admonitions and opportunities to produce
    basic financial information, the appellant has failed to meet his fundamental disclosure
    obligations as a party to family law proceedings. We reject the appellants submission
    that he has substantially complied with his statutory and court-ordered obligations.
    While he purported to file an updated financial statement on June 26, 2019,
    this was materially deficient. No updated sworn financial statement addressing
    the identified deficiencies was filed following the July 5, 2019 order. Nor did
    the appellant provide his BMO account statements as ordered.

[21]

The significance of the appellants continuing
    and willful failure to produce material financial information was brought home
    to him on more than one occasion. As the case management judge noted in her July
    5, 2019 endorsement:

[The appellants] failure
    to provide a complete and
accurate financial statement
    almost 22 months after [the respondent] initiated this Application  prevents
    the parties, and this court, from focusing on the key issues in dispute . This
    focus is not possible without [the appellant] first providing a complete and
    accurate sworn financial statement.

In other words, the appellants
    failure to comply materially interfered with the adjudication of the dispute
    and the administration of justice.

[22]

In consequence, we find no error in the motion
    judges determination that the appellant failed to comply with the court orders
    and that his failure was wilful and egregious.

(b)

The Motion Judge Properly Exercised Her Discretion
    to Strike the Answer and Amended Answer

[23]

There is no basis to interfere with the motion judges
    conclusion that this was an exceptional circumstance in which it was appropriate
    to strike pleadings for failure to comply with court orders.

[24]

The appellant must bear the consequences of his
    continued failure to comply with court orders; a consequence of which he had
    been repeatedly warned. The appellants failure to fully satisfy these outstanding
    orders, notwithstanding the many clear reminders, directions, and further generous
    opportunities to do so, can only be interpreted as his wilful disregard and
    flouting of the authority of the court. His failure to pay them and provide full
    and accurate financial disclosure caused further needless expense and delay and
    wasted judicial resources and those of the parties.

[25]

This conduct has no place in family law proceedings,
    which are designed to promote the most expedient and least costly resolution and
    adjudication of disputes in the very difficult context of matrimonial breakdown.
    Pointed and continued disregard for legislative and court-ordered obligations undermines
    the orderly administration of justice and erodes the legitimate expectation of litigants
    and the public that these obligations will be respected. At a certain point, a
    partys non-compliance with his or her most fundamental obligations may result
    in the imposition of limits on that partys rights to participate. That is the
    case here. By his repeated failures to meet his basic responsibilities, the appellant
    has forfeited his right to participate in these proceedings.

(2)

The Process was Fair

[26]

The appellant contends that the motion judges
    order was in retaliation for his complaint to the Canadian Judicial Council about
    the motion judges judicial colleague, who had made one of the cost orders in
    issue against the appellant.

[27]

The appellants suggestion is completely unfounded.
    The appellant bears the burden of rebutting the strong presumption of judicial
    impartiality. This kind of very serious allegation must be supported by cogent
    evidence. There is no basis on the record for this suggestion. The motion judges
    reasons disclose her fair and thorough consideration of the issues before her. As
    we have explained, her conclusions are correct in law and fact. Her order allowing
    the appellant yet another opportunity for compliance and her temperate cost order
    demonstrate the fairness of her disposition of this issue.

[28]

Accordingly, this submission has no merit.

(3)

Other Issues

[29]

Other issues raised on appeal, such as the
    removal of the appellants counsel of record, are contingent on the appellant reinstating
    his pleadings or involved MacLeod J.s April 19, 2018 order. As the appellant
    did not reinstate his pleadings within the time allotted by the motion judge
    and has been unsuccessful on his primary ground of appeal, and as MacLeod J.s
    April 19, 2018 order is not the subject of this appeal, it is unnecessary for
    us to consider the other grounds raised by the appellant.

C.

Disposition

[30]

For these reasons, the appeal is dismissed.

[31]

The respondent is entitled to her costs in the
    amount of $18,500, inclusive of disbursements and applicable taxes.

Paul Rouleau
    J.A.

K.
    van Rensburg J.A.

L.B.
    Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Michel v. Spirit Financial Inc., 2020 ONCA 398

DATE: 20200619

DOCKET: C66925 & C66926

Benotto, Zarnett and
    Thorburn JJ.A.

DOCKET:
    C66925

BETWEEN

Alexander Michel

Plaintiff (Respondent)

and

Spirit Financial
    Inc.
,
Franz Kramer

And Gunther Kramer

Defendants (Appellants)

DOCKET: C66926

AND
    BETWEEN

Franz Kramer,
    Christa Schmidt

and Gunther Kramer

Plaintiffs (Appellants)

and

Alexander Michel

Defendant (Respondent)

Michael A. van Bodegom and Daniel W. Veinot, for the
    appellants Franz Kramer and Spirit Financial Inc, and respondent on
    cross-appeal, Gunther Kramer

Jeffrey Kriwetz and Alexander Hora, for the
    respondent/appellant on cross-appeal, Alexander Michel

Heard: in writing

On appeal from the
    judgment of Justice P.J. Flynn of the Superior Court of Justice, dated April
    10, 2019, with reasons reported at 2019 ONSC 2254.

REASONS FOR DECISION

[1]

Many years ago, the appellant Franz Kramer and the respondent Alexander
    Michel were co-workers and friends. Michel gave Kramer various sums of money
    that Kramer invested in his company Spirit Financial Inc. Whether the advances
    made were loans or an investment by Michel in Spirit became a source of dispute
    between the former friends. It led to an action by Michel against Kramer, the
    company and Kramers son Gunther Kramer, and another action by Kramer, his
    spouse and Gunther against Michel for slander. The trial judge determined that
    the advances were demand loans, that Kramer had engaged in fraudulent
    activities to which Spirit was an accomplice, and he gave judgment against
    Kramer and Spirit for over two million dollars. He dismissed Kramers action
    against Michel.

[2]

For the reasons that follow, we allow the appeal in part, because recovery
    on several advances made by Michel in 2000 and 2001 is statute barred.

BACKGROUND

[3]

In the late 1990s and early 2000s Kramer and Michel trained and worked
    together as airline pilots. Kramer then became involved in mortgage lending
    through Spirit Financial. Kramer was the director, president and sole controlling
    will and mind of the company. Gunther was the Secretary-Treasurer until 2014.

[4]

Over nine years, between 2000 and 2010, Michel advanced significant sums
    to Kramer: 949,504 Euros and 100,119 Swiss francs. Two promissory notes dated
    May 12, 2000 represent the only documentation. The first promissory note was
    from Spirit to Michel for 140,000 Deutschmarks at 7% interest, which Kramer
    replaced with a promissory note from himself at an interest rate of 6%.
According to the trial judge,
Michel didnt
    know Spirit and only wanted to deal with Kramer, whom he obviously trusted. And
    Kramer accepted that. There were no further Promissory Notes. So, the 2nd
    Promissory Note was meant to replace the first and commenced the two pilots
    business relationship.

[5]

In March and April 2009, Michel demanded repayment on the loans. Kramer
    resisted at first but then made a series of four payments of 7,273 Swiss francs
    and 149,770 Euros between April 20, 2009 and October 21, 2009. These payments
    equalled about $232,500 Canadian. No other payments were made.

[6]

When Michel sued for return of his money, Kramer brought an action
    against him alleging that Michel had harassed and threatened him and his
    family. The action was fashioned in slander.

DECISION BELOW

[7]

Kramer argued that the advances were investments in Spirit Financial,
    not demand loans. The trial judge found that the advances were loans to Kramer
    repayable at 6% interest. He held that the action on loans and the promissory
    notes was not statute barred because Kramer made, or caused to be made, partial
    payments in 2009 which extended the limitation periods.

[8]

The trial judge made various findings of improper activities by Kramer
    in the way Michel was induced to make the loans, the way the funds were moved into
    and out of Spirit, and the lack of any proper accounting. He held that Spirit
    Financial was also liable for the same amounts as Kramer because it was
    controlled by Kramer and was an accomplice to [his] fraudulent activities.
    However, Gunther was not liable because he likely did not have much say in his
    father's business while he was director and officer.

[9]

The trial judge ordered that the parties calculate the amounts owing and
    include a chart with their cost submissions. In the result, he ordered that
    Kramer and Spirit Financial pay Michel the Canadian equivalent of 1,572,938.38
    Euros and 149,626.98 Swiss francs, inclusive of pre-judgement interest.

[10]

The
    trial judge dismissed the slander action which he considered to be simply a
    gag and chill device and thus improper.

[11]

The
    trial judge awarded Michel substantial indemnity costs. After adjusting for
    costs owed to Gunther, Michel was awarded $200,000 in costs.

ISSUES

[12]

The
    appellants Kramer and Spirit Financial submit that the trial judge erred by:

1.

failing to apply the limitation period;

2.

holding Spirit liable in addition to Kramer;

3.

improperly calculating damages;

4.

engaging in procedural unfairness;

5.

dismissing the slander action; and

6.

awarding costs on a substantial indemnity basis.

[13]

Michel
    cross appeals alleging that Gunter (an additional respondent on the cross-appeal)
    should also have been held liable.

ANALYSIS

The limitation period

[14]

The trial judge made a finding of fact that all
    the advances made by Michel to Kramer and Spirit were loans. The loans were
    advanced from 2000 to 2009, during which time the
Limitations Act
, R.S.O. 1990, c. L.15 was largely replaced by the
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B
. On January 1, 2004 the basic limitation period for demand loans
    was changed from six years from the date of the loan to two years from the date
    of the demand:
Hare v. Hare
, 83 O.R. (3d) 766
    (C.A.), at para. 11 and
Limitations Act, 2002
,
    at s. 5.

(1)

The Promissory Notes of 2000 and the Loans
between
    May 15, 2000 and September 6, 2001

[15]

The first five loans were made on May 15, 2000, January
    2, 2001, May 2, 2001, June 8, 2001 and September 6, 2001. These loans and the
    promissory note were captured by the old
Limitations Act.
The trial judge said that Kramers Limitation Defence cannot
    succeed. The partial payments made after Michels demand had the effect of
    extending the limitation period.

[16]

The difficulty here is that the limitation period had already
    expired for these loans when the partial payments were made and could not be
    revived. See
Cross Bridges Inc. v. Z-Teca Foods Inc.
, 2016 ONCA 27, at para. 10: for an acknowledgement to reset the
    limitation clock, it must be made before the expiry of the limitation period
    applicable to the claim. The first repayment made to Michel, was more than a
    year too late for even the most recent of the five loans to be saved from the
    statute bar.

[17]

Likewise, the two Promissory Notes dated May 12, 2000 were captured
    by the six-year limitation period from their stated due date on June 1, 2001.

[18]

The trial judge erred in finding otherwise.

(2)

Loans between November 17, 2004 and February 1, 2009

[19]

The
appellants accept that on March 28, 2009, the respondent
    demanded payment in full of all money loaned. The four repayments beginning
    April 20, 2009, were in relation to that same debt. In
St. Hilaire
    v. Kravacek (
1979), 26 O.R.(2d) 499 (C.A.), this court
    held at para. 12 that: a payment by a debtor to his creditor, from which a new
    promise to pay the debt may be inferred, has the effect of starting afresh the
    running of a period of limitation.
The
loans between
    November 17, 2004 and February 1, 2009 are covered by the two-year limitation
    period in the new Act but are saved by acknowledgments of debt.

(3)

Loans on July 11, 2003 and October 27, 2003

[20]

The appellants concede at para. 35 of the their factum that the
    loans made on July 11, 2003 and October 27, 2003 were not statute barred:
    While the advances made on July 11, 2003, and October 27, 2003, were subject
    to the former 6-year limitation period, the limitation period with respect to
    those loans did not expire prior to the commencement of the action (at least,
    as against Spirit Financial) as the partial repayments in 2009 extended the
    applicable limitation period.

[21]

Therefore, only the loans in 2000 and 2001 and the two promissory
    notes are statute barred.

[22]

We reject the argument that the partial payments, having been made
    by Spirit, did not extend the limitation period for a claim against Kramer.
    Based on the trial judges findings Spirit and Kramer must be considered one
    and the same for these purposes.

Liability of Spirit and Kramer

[23]

Spirit argues that the trial judge erred in
    holding it liable because he found that the note and the loans were between
    Michel and Kramer and because Michel only pled that Spirit was liable in the
    alternative, not jointly.

[24]

We conclude that both Kramer and Spirit are liable.

[25]

The jurisprudence with respect to separating
    personal from corporate liability typically considers an attempt to hold
    individuals liable for corporate debts. But the analysis is instructive even
    though the question here is whether the corporation should be held liable in
    addition to the individual. A separate legal entity will be disregarded when
    there is complete control and conduct akin to fraud:
Transamerica
    Life Insurance Co. of Canada v. Canada Life Assurance Co.
(1996), 28 O.R.
    (3d) 423 (Sup. Ct.), at pp. 432-33; affd (1997) 74 A.C.W.S. (3d) 207 (C.A.). It
    may also be disregarded where those in control of a corporation expressly direct
    a wrongful act:
642947 Ontario Ltd. v. Fleischer
(2001), 56 O.R. (3d)
    417 (C.A.) at para. 68.

[26]

The trial judge held that Spirit was completely controlled by Kramer
    and that Spirit was being used as a shield for fraudulent or improper conduct. He
    found that: (i) Kramer was the controlling will and mind of both Spirit; (ii)
    Kramer was simply transferring all of the money in each between his own
    pockets; (iii) Spirit was just a plaything of Kramers; and (iv) Spirit must
    be considered an accomplice to Kramers fraudulent activities.

[27]

These findings of fact would be sufficient to pierce the corporate
    veil and hold Kramer liable for obligations of Spirit  here they have a
    different but equally well-founded consequence. When Kramer directed Spirit to
    participate in  be an accomplice to  wrongful conduct, Spirit was rendered
    liable for that conduct. When the controlling mind of the corporation directs
    it to do a wrongful act it can scarcely be argued that the corporation commits
    the act with impunity.

[28]

It was open to the trial judge to come to this conclusion even
    though Michels pleading alleged alternative theories of liability. The
    alternatives were whether the advances were loans, or whether they were investments.
    But the claims made were against all defendants and we see nothing in the
    pleading precluding a finding of liability against both Spirit and Kramer for
    the wrongdoing that the trial judge found.

Damages

[29]

Kramer
    and Spirit Financial argue that the trial judge erred by (i) finding that the
    advances were made on an interest rate of 6% when there was no agreement as to
    the interest rate on the evidence, or when the agreed-upon interest rate
    varied; and (ii) not deducting non-resident tax withholdings that Spirit
    Financial paid on behalf of Michel.

[30]

An
    appellate court should only intervene in the award of damages where the trial
    judge made an error of principle or law, or misapprehended the evidence, or it
    could be shown there was no evidence on which the trial judge could have
    reached his or her conclusion, or the trial judge failed to consider relevant
    factors in the assessment of damages, or considered irrelevant factors, or
    otherwise, in the result, made a palpably incorrect or wholly erroneous
    assessment of the damages:
2105582 Ontario Ltd. (Performance Plus Golf
    Academy) v. 375445 Ontario Limited (Hydeaway Golf Club)
, 2017 ONCA 980, 138
    O.R. (3d) 561, at para. 64, citing
Naylor Group Inc. v. Ellis-Don
    Construction
Ltd., 2001 SCC 58, [2001] 2 S.C.R. 943, at para. 80.

[31]

It
    was open to the trial judge to conclude that the interest rate was 6% and that
    the non-resident tax allegation was part of Kramers arrogant deceit and did
    not apply.

Allegation of procedural unfairness

[32]

On
    the last day of evidence before the trial judge, Kramer conceded that Michels
    Swiss franc advances were still available and belong to Michel. The trial judge
    found that he agreed to pay those funds to Michel in accordance with a signed
    direction. He then endorsed the Trial Record accordingly.

[33]

Kramer
    and Spirit Financial argue that, by doing so, the trial judge prejudged the
    issues and did not provide adequate reasons.

[34]

We
    do not agree. It was open to the trial judge to endorse the record on the basis
    of this admission. This was clearly explained and the reasons throughout were
    sufficient.

Appeal from dismissal of the slander action

[35]

The
    trial judges decision to dismiss the slander action was based on his findings
    of fact which are entitled to deference on appeal. There is no basis to
    interfere with that decision.

Costs

[36]

Kramer
    and Spirit Financial submit that there was no basis for imposing costs on a
    substantial indemnity basis.

[37]

The
    trial judge made his decision to award substantial indemnity costs to Michel in
    part because of the fraud perpetuated on him, in part because Kramer did not
    admit facts laid out in Michels Request to Admit but primarily because Kramer
    used the slander action to defend Michels claims.

[38]

A
    court should 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, [2004] 1 S.C.R. 303, at para. 27.

[39]

We
    see no reason to interfere here.

The cross-appeal

[40]

Michel
    alleges that the trial judge erred in dismissing his claim against Gunther. The
    trial judge found that Gunther probably didnt have much say in his fathers
    business while he was officer and director. This finding was open to the trial
    judge on the evidence and supports the dismissal of the debt action against
    him. Likewise, we would not interfere with the trial judges finding that the
    loan was partially repaid on April 20, 2009.

CONCLUSION

[41]

The
    appeal is allowed in part to reduce the damage award by the amounts of the
    loans
between May 15, 2000 and September 6, 2001
.
The appeal is otherwise dismissed. The cross-appeal is dismissed. The appeal
    with respect to the slander action is dismissed for the reasons given by the
    trial judge.

[42]

If
    the parties cannot agree on the calculation of damages and the costs of the
    appeal, they may submit written submissions limited to five pages within 14
    days from the release of these reasons.

M.L. Benotto J.A.

B. Zarnett J.A.

Thorburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Mullings v. Robertson, 2020 ONCA
    369

DATE: 20200611

DOCKET: M51181 (C66780)

Lauwers,
    Paciocco and Fairburn JJ.A.

BETWEEN

Owen Cornelius Mullings

Appellant (Moving Party)

and

Jacqueline Alice Dian Robertson

Respondent (Responding Party)

Owen Cornelius Mullings, acting in
    person

Lauri Daitchman, for the respondent

Heard: In writing

REASONS FOR DECISION

[1]

The self-represented applicant, Mr. Owen
    Mullings, appealed a Family Court decision resolving numerous issues between
    the applicant and his former common law spouse, Ms. Jacqueline Robertson. On
    December 13, 2019, the applicants appeal was dismissed: 2019 ONCA 979. He now moves,
    pursuant to rr. 37.14(6) and 59.06(2) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, to have the appeal decision set aside and he seeks leave
    for a new hearing. He also asks for interim relief and he asks this court to
    order the payment of sums in his favour, and relief from costs orders made in
    the appeal and at the Family Court trial.

[2]

Rule 61.16(6.1) refers to the two rules the
    applicant invokes. It provides that a decision of a panel of this court may
    only be varied or set aside pursuant to rr. 37.14 or 59.06.

[3]

For its part, r. 37.14 has no application here.
    This is not a case involving an order obtained on motion without notice, a
    failure to appear on a motion, or an order of the registrar: r. 37.14(1).

[4]

As for the courts authority to reconsider a
    decision under r. 59.06, that authority is limited and will be exercised
    sparingly and only where it is clearly in the interests of justice to do so:
Trillium
    Motor World Ltd. v. Cassels Brock & Blackwell LLP
, 2017 ONCA 840, at
    para. 6., leave to appeal dismissed, [2017] S.C.C.A. No. 366. This court will
    set aside a decision and rehear a case on its merits only in rare circumstances:
    see
First Elgin Mills Development Inc. v. Romandale Farms Limited
,
    2015 ONCA 54, 381 D.L.R. (4th) 114, at para. 7.

[5]

In support of his application, the applicant
    argues that the appeal decision contains numerous errors. In each case he
    submits that this court failed to consider that the trial judge erred in
    making findings by arriving at decisions contrary to the preponderance of
    evidence or based on misapprehensions of the evidence. The misapprehensions of
    the evidence he identifies amount to no more than the failure by the trial
    judge to make the findings and orders the applicant advocates. In substance, the
    grounds the applicant offers in support of his request that this courts
    decision be set aside and a new hearing be held amount to expressions of
    disagreement with the correctness of the appeal decision. Although made in the
    context of a criminal appeal, Charron J.A.s comments in
R. v. H. (E.),
115 C.C.C. (3d) 89 (Ont. C.A.), at pp. 101-102, leave to appeal refused, [1997]
    S.C.C.A. No. 256, are apt:

[T]o the extent that an application to reopen
    an appeal is a challenge to the correctness of a decision  the application to
    reopen is an attempt to vest the Court of Appeal with a jurisdiction which is
    reserved to the Supreme Court of Canada.  The power to further review the
    matter no longer belongs to this court.

[6]

We see no basis upon which it would be in the
    interests of justice to set aside the appeal decision. The proper route in
    contesting the appeal decision was for the applicant to have sought leave to
    appeal from the Supreme Court of Canada.

[7]

The motion is dismissed.

P. Lauwers
    J.A.

David
    M. Paciocco J.A.

Fairburn
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Neufeld v. Neufeld, 2020 ONCA 395

DATE: 20200619

DOCKET: C66749

MacPherson, Pardu and Huscroft JJ.A.

BETWEEN

Janet Lee Neufeld

Applicant (Respondent)

and

Wilmer Jack Neufeld

Respondent (Appellant)

Donna Wowk, for the appellant

Bryan Smith, for the respondent

Heard: In writing

On appeal from the
    judgment of Justice R.A. Lococo of the Superior Court of Justice, dated February
    27, 2019, with reasons reported at 2019 ONSC 1277.

REASONS FOR DECISION

[1]

The appellant Wilmer Neufeld (Wilmer or the appellant) and the
    respondent Janet Neufeld (Janet or the respondent) were married on June 12,
    1993. It was the second marriage for Wilmer and the first for Janet.

[2]

Wilmer had two daughters from his first marriage, Sarah and Ashley. They
    lived with their mother and had regular access visits with Wilmer.

[3]

Janet and Wilmer had two children together: William (Billy), born in
    1995, and Bridgette, born in 1996.

[4]

Throughout their marriage, Janet and Wilmer lived in a dwelling on McNab
    Road in Niagara-on-the-Lake. Wilmer was a substantial and successful farmer.
    Wilmer and Janet together were shareholders of Neufeld Farms. Janet did not
    work outside the home after Billy was born in 1995.

[5]

In November 2014, Janet brought an application for divorce and ancillary
    relief that included the division of property and spousal support. A divorce
    decree was granted, effective in April 2016.

[6]

In order to calculate the amount required for equalization of net family
    property, it is necessary to determine the valuation date, the date on which
    the parties separated with no reasonable prospect of resuming cohabitation.
    There is a huge difference between the parties on this issue. Wilmer says that
    the separation occurred around June 2000 when Janet moved into separate
    quarters (an apartment-style unit attached to the main house) where she has
    lived ever since. Janets position is that the separation occurred on about
    July 2014, four months before she commenced the divorce application.

[7]

In the divorce proceedings, a case conference judge ordered the trial of
    an issue to determine the date of separation on a final basis. During the
    summer of 2018, Lococo J. presided over this trial which lasted 19 days. After
    an extensive review of the evidence and many relevant case authorities, the
    trial judge concluded:

[76] I have also concluded that Janet has established that the
    parties separated in July 2014, as she contended. Janet considered the
    triggering event to be her confrontation with Wilmer on July 20, 2014,
    following his angry reprimand of Brigitte for turning off his alarm clock. In
    my view, the real significance of those events was that Janet resulting
    decision [
sic
] to retain a lawyer to commence divorce proceedings,
    which she did after returning to the McNab residence a few days later. I
    consider the fact that she retained a lawyer for this purpose to be an
    objective indication of her intention to live separate and apart from Wilmer. I
    therefore find that the parties date of separation was July 31, 2014.

I am also satisfied on the evidence that there was no
    reasonable prospect of reconciliation between the parties as of that time.

[8]

The appellant appeals from the trial judges decision on three grounds.

[9]

First, the appellant contends that the trial judge failed to
    sufficiently address the credibility and reliability of the parties and other
    witnesses. In particular, the appellant contends that the trial judge does not
    analyze the credibility of Janets evidence  the word credibility cannot be
    found in the 78-paragraph Trial Reasons  he makes
no comment
on
    Janets credibility or reliability  overall or on a particular matter. There
    is simply no description or analysis of the quality of her evidence or why he might
    prefer her evidence where it conflicts with other evidence, despite Janet
    giving evidence over the course of 7 days. [Appellants factum, at para. 52,
    emphasis in original.]

[10]

We
    do not accept this submission. Throughout his reasons, the trial judge undertook
    a credibility analysis on the evidence of all the witnesses relating to
    contested issues. Although the trial judge did not use the specific words
    credible or credibility, it is obvious who he found credible and reliable
    both on specific issues and overall.

[11]

To
    take but one example on credibility, the trial judge gave clear reasons for
    believing Janet, not Wilmer, on the important issue of when sexual relations
    between the parties ceased:

[75]  (a) While Janet and Wilmer did not share a bedroom in
    the one-story section of the house, I accept Janets evidence that prior to
    2000, she slept apart from Wilmer in one of the other bedrooms in the main
    house, starting at some point after the childrens birth. I also accept her
    testimony that the parties continued to have sexual relations, both before and
    after 2000, even though they occupied separate bedrooms. While Wilmers
    testimony on the latter point was somewhat of a moving target, he conceded that
    the parties continued to have sexual relations (albeit infrequently) after
    Janet began sleeping in the one-story section. He also testified that intimate
    relations ceased a few years later, but he was unable to state when with any
    degree of certainty.

[12]

To
    take but one example on reliability, the trial judge was, in a permissible way,
    cautious about accepting the evidence of the parties children (age 23 and 24
    when they testified:

[21]
Billy and Bridgette
    appeared to me, however, to be honest and generally objective in their
    testimony. That being said, while they were young adults when they testified,
    their evidence to a significant extent related to events that occurred when
    they were young children or related to matters which occurred in private
    between Janet and Wilmer. As a result, I generally found their testimony of
    only limited assistance in determining the ultimate issue of the parties
    separation date.

[13]

Second,
    the appellant submits that the trial judge made palpable and overriding errors
    with respect to findings or inferences of fact, such that his judgment cannot
    stand. The appellant points to only two examples, in a 19-day trial, of this
    category of error.

[14]

The
    appellant says that the trial judge stated correctly that Janet drew a pre-tax
    annual salary of $40,000 from Neufeld Farms but then said, incorrectly, that
    the evidence did not indicate any difference in these arrangements before and
    after 2000: at para. 24. In fact, says the appellant, Wilmer gave
    uncontradicted evidence that he reduced Janets salary by $500 per month after
    she moved into the separate apartment in 2000.

[15]

This
    is hardly a palpable error. The essential point is that Janet received a salary
    from Wilmer throughout their marriage. The trial judge recorded this. The fact
    that he did not state that there was evidence (from Wilmer) that the salary changed
    in a minor way at some point in the marriage is not an error. Even if it were
    an error, it is far removed from being overriding; at best, it would be
    minor, bordering on inconsequential.

[16]

The
    appellant says that the trial judge erred when he stated that there was no
    direct evidence (other than Wilmers testimony) that Janet knew about his other
    relationships.: at para. 75(k). The appellant submits that this is incorrect
    because there was a reference in the notes from Janets doctor about an affair
    and Billy and Bridgette testified that their mother would talk to them about
    their fathers unfaithfulness.

[17]

Again,
    it is difficult to see how this could be an overriding (i.e., it affects the
    result) error in a 19-day trial. This is especially so given Janets testimony
    that she suspected that her husband had extramarital affairs during their
    marriage.

[18]

Third,
    the appellant asserts that the trial judge erred by treating the parties so
    unevenly that it gives rise to a reasonable apprehension of bias.

[19]

We
    emphatically reject this ground of appeal. It is, in a word, outlandish. The
    appellant does not point to a single word the trial judge said during a 19-day
    trial that would suggest that he treated any of the parties or witnesses
    unfairly. Moreover, the matters to which the appellant does point  his
    treatment of the evidence of Janet and Wilmer, his failure to refer to certain
    evidence of the witnesses and in documents, and his reference to a potential
    limitation period  are, at most, potential grounds of appeal anchored in legal
    error, not bias. An allegation of judicial bias should not be made lightly
    because, by definition, it challenges the integrity of the judge in relation to
    the core of the judicial function  to preside impartially over the case before
    the judge: see
R. v. S.(R.D.)
, [1997] 3 S.C.R. 484, at paras. 31-32.

[20]

The
    appeal is dismissed with costs. If the parties cannot agree on costs, the
    respondent must submit her costs submissions within 21 days of the release of
    this judgment and the appellant must submit his costs submissions within 21
    days thereafter. Submissions by each party cannot exceed five pages.

J.C. MacPherson J.A.

G. Pardu J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Peter B. Cozzi Professional
    Corporation v. Cato, 2020 ONCA 423

DATE: 20200626

DOCKET: C67725

Juriansz, Pardu and Huscroft
    JJ.A.

BETWEEN

Peter B. Cozzi Professional
    Corporation

Plaintiff (Appellant)

and

Kingston Cato

Defendant (Respondent)

D. Jared Brown, for the appellant

Kate Barretto, for the respondent

Heard: June 18, 2020 by
    videoconference

On appeal from the order of Justice Sandra
    Nishikawa of the Superior Court of Justice, dated August 29, 2019.

REASONS FOR DECISION

[1]

This appeal was dismissed from the bench for the
    reasons of the motion judge.

[2]

The respondents costs are fixed in the amount
    of $20,000 inclusive of disbursements and applicable taxes.

R.G. Juriansz J.A.

G. Pardu J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Peter B. Cozzi Professional
    Corporation v. Szot, 2020 ONCA 397

DATE: 20200617

DOCKET: C66741 & C67463

Gillese, Brown and
    Jamal JJ.A.

DOCKET: C66741

BETWEEN

Peter B. Cozzi Professional Corporation

Applicant (Appellant)

and

Jerzy Szot

Respondent (Respondent)

DOCKET: C67463

AND BETWEEN

Peter B. Cozzi Professional
    Corporation

Applicant (Appellant)

and

Jerzy Szot

Respondent (Respondent)

D. Jared Brown, for the appellant

Dennis Ong, for the respondent, Jerzy
    Szot

Diane Gillies, for the respondent,
    the Public Guardian and Trustee, Litigation Guardian for Quoc Nguyen

Heard: May 27, 2020 by
    videoconference

On appeal from the order of Justice Sandra
    Nishikawa of the Superior Court of Justice, dated February 22, 2019, with
    reasons reported at 2019 ONSC 1274, 90 C.C.L.I (5th) 282 (C66741), and from the
    order dated August 29, 2019, with reasons reported at 2019 ONSC 5071 (C67463).

By
    the Court:

A.

overview

[1]

The central question in these two appeals is
    whether the appellant, a lawyer practising through a professional corporation, is
    entitled to the proceeds of a $100,000 after-the-event legal protection
    insurance policy (the ATE Policy) of his client, Mr. Quoc Nguyen. After-the-event
    insurance, sometimes known as adverse costs insurance, insures a plaintiff
    against the risk of an adverse costs award in litigation or provides coverage
    for disbursements incurred by a plaintiffs lawyer. The appellant claims the
    proceeds of Mr. Nguyens policy for disbursements for representing him in a
    motor vehicle personal injury action.

[2]

The judge at first instance (the application
    judge) ruled that the appellant was not entitled to the insurance proceeds under
    a written contingency fee agreement with Mr. Nguyen dated April 6, 2016 (the CFA).
    She ruled that because Mr. Nguyen was a person under disability represented by
    a litigation guardian, the CFA required court approval under s. 5 of
Contingency
    Fee Agreements,
O. Reg. 195/04, (the CFA Regulation), passed under the
Solicitors
    Act
, R.S.O. 1990, c. S.15, which was never obtained and which she declined
    to provide.

[3]

The application judge also dismissed the
    appellants later motion for a charging order over the insurance proceeds to
    secure his legal fees and disbursements under s. 34 of the
Solicitors Act
.
    She held that the motion was precluded by the rule against collateral attack,
    issue estoppel, and the doctrine of abuse of process. In any event, she ruled
    that the appellant failed to meet the test for a charging order because his work
    had not been instrumental to the recovery or preservation of the property at
    issue; he had simply served as an insurance intermediary to sell his client the
    ATE Policy.

[4]

The appellant now appeals both orders of the
    application judge.

[5]

At the conclusion of the oral hearing of the
    appeals, we dismissed both appeals, with reasons to follow. These are our
    reasons.

B.

Background

[6]

The detailed procedural history of these
    proceedings is provided in the two decisions of the application judge:
Peter
    B. Cozzi Professional Corporation v. Szot,
2019 ONSC 1274, 90 C.C.L.I.
    (5th) 282, and
Peter B. Cozzi Professional Corporation v. Szot,
2019
    ONSC 5071. The essential background is as follows.

(i)

The motor vehicle action

[7]

On January 14, 2003, Mr. Jerzy Szots car rear-ended
    Mr. Nguyens car. In May 2007, the appellant commenced a motor vehicle personal
    injury action on Mr. Nguyens behalf against Mr. Szot, the respondent. Mr.
    Nguyens spouse at the time, Ms. Hoan Phan, was his litigation guardian. In October
    2006, Ms. Phan had been appointed as Mr. Nguyens guardian of property, and in
    November 2011 was appointed as his guardian of the person.
[1]

(ii)

The CFA and ATE Policy

[8]

On April 6, 2016, Mr. Nguyen, his social worker,
    and a Vietnamese translator met with the appellant at his law office. Ms. Phan was
    not present.

[9]

At the meeting, Mr. Nguyen entered into the CFA
    with the appellant. He also signed a Retainer Agreement Addendum (the Addendum),
    which authorized the appellant to provide information about Mr. Nguyens file
    to DAS Legal Protection Insurance Company Limited (DAS) to obtain
    after-the-event insurance. The same day, the appellant concluded a business
    agreement with DAS that authorized him to serve as its insurance intermediary.

[10]

The CFA provided that Mr. Nguyen agreed to pay
    all disbursements incurred by the appellant on his behalf, without regard to
    the success of his claim for damages, and that Mr. Nguyen assigned all proceeds
    from his litigation protection insurance to the appellant as security for those
    disbursements.

[11]

On Mr. Cozzis advice, Mr. Nguyen bought the ATE
    Policy from DAS. The policy provided: Your policy attaches to your Contingency
    Fee Agreement and operates for the duration of that Agreement. Although it was
    completed in 2016, the start date for the ATE policy was October 14, 2005.

(iii)

The order for costs and disbursements against Mr.
    Nguyen

[12]

In May 2017, Mr. Nguyens motor vehicle action
    proceeded to a jury trial. The jury found Mr. Szot liable for the collision and
    awarded Mr. Nguyen general damages and damages for past loss of income, but at
    an amount below the applicable statutory deductible at the time.

[13]

On June 22, 2017, Archibald J. granted Mr.
    Szots threshold motion for a declaration that Mr. Nguyen was not entitled to
    any non-pecuniary damages. After deducting from the jury award the income
    replacement benefits that Mr. Nguyen had received, Archibald J. found that Mr.
    Nguyens net damages for loss of income were reduced to zero, and that Mr.
    Nguyens total damages were also reduced to zero. He granted judgment for Mr.
    Szot and ordered Mr. Nguyen to pay Mr. Szot costs of the action in the amount agreed
    to between the parties of $90,790, inclusive of HST, and disbursements of
    $71,000, for a total of $161,790: see
Nguyen v. Szot
, 2017 ONSC 3705, 69
    C.C.L.I. (5th) 222.

(iv)

The ATE Policy proceeds are paid to the appellant
    in trust

[14]

Over the next few months, a dispute arose
    between the appellant and Mr. Szots insurer, Aviva Insurance Company of
    Canada (Aviva), as to who was entitled to the proceeds of the ATE Policy.

[15]

On July 19, 2017, the appellant applied to DAS
    for payment of the policy proceeds on behalf of Mr. Nguyen. He included a copy of
    Archibald J.s costs judgment and claimed $37,858.91 for his own disbursements.

[16]

Shortly afterwards, Aviva wrote to DAS seeking
    payment of its costs. DAS responded that amounts under the ATE Policy were
    payable to Mr. Nguyen.

[17]

On August 9, 2017, Mr. Nguyen
signed a direction authorizing the appellant to pay $68,636.73
    from the ATE Policy proceeds towards his disbursements and HST
, with the
    balance to be applied to the costs ordered by Archibald J. When Mr. Nguyen
    signed this direction, neither Ms. Phan nor a Vietnamese interpreter was
    present.

[18]

On August 10, 2017, DAS paid the funds from the
    ATE Policy to the appellant, in trust for Mr. Nguyen.

[19]

On September 25, 2017, each of Mr. Nguyen (attending
    with his Vietnamese interpreter) and Ms. Phan separately obtained independent
    legal advice about, and signed an authorization confirming, the CFA and
    Addendum.

[20]

When Aviva learned that the appellant had moved
    the policy proceeds from his trust account to his general account, it brought
    an urgent motion for a direction that they be returned to and held in the trust
    account pending the determination of entitlement to the funds. On September 12,
    2017, Monahan J. granted Avivas motion.

(v)

The first ruling: 2019 ONSC 1274

[21]

On February 22, 2019, the application judge
    dismissed the appellants application and Avivas cross-application for declarations
    as to their entitlements to the proceeds of the ATE Policy.

[22]

The application judge ruled that the appellant
    was not entitled to the proceeds because the CFA was unenforceable. She ruled: (i)
    the CFA did not have the courts approval as required by s. 5 of the CFA
    Regulation; (ii) the appellant never obtained instructions from Ms. Phan to
    conclude the CFA, and Mr. Nguyen lacked the capacity to do so; and (iii) the
    CFA did not comply with the
Solicitors Act
and the CFA Regulation in
    other respects. She also ruled that Mr. Nguyen could not have made an informed decision
    about the direction he signed on August 9, 2017, because neither Ms. Phan
    nor his Vietnamese interpreter was present. Lastly, she determined that the
    independent legal advice obtained by Mr. Nguyen and Ms. Phan and their
    approval of the CFA and Addendum in September 2017 were after-the-fact and ineffective.

[23]

The application judge also ruled that Aviva was
    not entitled to the proceeds of the ATE Policy. The only beneficiary under the
    ATE Policy was Mr. Nguyen; Aviva was neither a party to the ATE Policy nor a named
    beneficiary; and none of the exceptions to the doctrine of privity of contract
    applied.

[24]

Because neither Mr. Nguyen nor Ms. Phan
    participated in the proceedings before the application judge, the application
    judge was concerned that neither fully understood the potential consequences to
    them. She therefore directed Ms. Phan and the Public Guardian and Trustee (the PGT)
    to attend before her on April 24, 2019, to determine whether Ms. Phan
    would continue to act as Mr. Nguyens guardian of property, or whether it
    was necessary to appoint the PGT as Mr. Nguyens litigation guardian. She also ordered
    the proceeds of the ATE Policy to be held in the appellants trust account pending
    further order of the court.

[25]

In March 2019, the appellant filed a notice of
    appeal from the order of the application judge dismissing his application. Aviva
    did not appeal the order dismissing its cross-application.

(vi)

The application judge appoints the PGT as Mr.
    Nguyens litigation guardian and orders the insurance proceeds paid into court

[26]

Neither Ms. Phan nor the PGT attended before the
    application judge on April 24, 2019.

[27]

On May 28, 2019, the application judge appointed
    the PGT as Mr. Nguyens litigation guardian. She also ordered the amounts being
    held in trust by the appellant to be paid into court.

[28]

On June 7, 2019, the appellant brought a motion
    for leave to appeal to the Divisional Court the order requiring payment of the
    proceeds into court. When the motion was scheduled to be heard, the appellant
    asked the Divisional Court to adjourn the motion pending the determination of
    the two appeals before this court. We were advised that the motion for leave to
    appeal remains pending before the Divisional Court.

(vii)

The second ruling: 2019 ONSC 5071

[29]

On August 29, 2019, the application judge dismissed
    the appellants motion for a charging order over the proceeds of the ATE Policy
    to secure the appellants outstanding disbursement account of $80,689.06 and
    outstanding fee accounts of $19,310.94 and $11,872.22, for a total of $111,872.22.

[30]

She ruled that the motion sought essentially the
    same relief as the appellants earlier application  that the proceeds of the
    ATE Policy be applied to the appellants disbursements  though now through the
    mechanism of a charging order. She held that the motion was an impermissible
    collateral attack on her earlier decision and was also precluded by the
    doctrines of issue estoppel and abuse of process.

[31]

She also held that, in any event, the appellant
    did not meet the test for a charging order under s. 34(1) of the
Solicitors
    Act
. She found that there were no fruits of the litigation over which
    the appellant could claim a charging order, noting that Mr. Nguyen recovered nothing
    in the litigation and is more indebted after the litigation than before it.
    Since no property was recovered or preserved in the proceeding, there can be no
    charging order. She also rejected the suggestion that the appellant was
    instrumental in the recovery or preservation of the asset over which the
    charging order was sought. She found that the appellant simply sold the ATE
    Policy to Mr. Nguyen as an insurance intermediary. Finally, she agreed with the
    PGT that the appellant should not be rewarded for brokering a contract between
    Mr. Nguyen and DAS when he knew that Mr. Nguyen had a litigation guardian and
    was incapable of entering into a contract.

[32]

The application judge rejected the suggestion
    that the appellants claim for a charging order was an access to justice issue.
    She held that the appellant had shown no reason for the court to grant him
quantum
    meruit
as equitable relief, and to the contrary, had provided ample
    grounds for concern about his conduct in relation to Mr. Nguyen.

[33]

Lastly, the application judge rejected the
    applicants contention that the court should nevertheless determine his fees
    and disbursements under s. 19 of the
Solicitors Act
. She ruled that
    because this issue could and should have been raised on the appellants
    original application, she declined to address it now. She also stated that it
    would be inappropriate to assess the appellants fees and disbursements on a
quantum
    meruit
basis as the appellants entitlement to the proceeds of the ATE
    Policy was under appeal.

C.

analysis

[34]

The appeals raise two main issues:

1.

Did the application judge err in finding the CFA
    to be unenforceable?

2.

Did the application judge err in dismissing the
    motion for a charging order?

[35]

As we will elaborate, our answer to both questions
    is no.

(1)

Did the application judge err in finding the CFA
    to be unenforceable?

[36]

Section 5 of the CFA Regulation provides:

5.
(1) A
    solicitor for a person under disability represented by a litigation guardian
    with whom the solicitor is entering into a contingency fee agreement shall,

(a)
apply to a judge for approval of the agreement before the agreement
    is finalized; or

(b)
include the agreement as part of the motion or application for
    approval of a settlement or consent judgment under rule 7.08 of the Rules of
    Civil Procedure.

[37]

Mr. Nguyen was a person under disability throughout
    the action and was represented by a litigation guardian, Ms. Phan. Still, the appellant
    concluded the CFA and Direction with Mr. Nguyen directly, not with Ms. Phan. As
    the PGT notes in its factum, the appellants instructing client was Ms. Phan,
    as litigation guardian, not Mr. Nguyen.

[38]

Nor did the appellant comply with s. 5(1)(a) of
    the CFA Regulation, which required him to apply to a judge for approval of the
    CFA before it was finalized.

[39]

And the appellant does not contend that s.
    5(1)(b) applies. As the application judge noted, the appellant did not apply
    for approval of a settlement under r. 7.08 of the
Rules of Civil Procedure,
R.R.O. 1990, Reg. 194.

[40]

The appellant now asserts that the application
    judge erred by not enforcing the CFA under s. 24 of the
Solicitors Act
.
    He says that s. 24 permits a court to enforce a contingency fee agreement that breaches
    s. 5(1)(a) of the CFA Regulation, if the court finds that the contingency fee agreement
    is fair and reasonable. Section 24 provides:

24
Upon any
    such application, if it appears to the court that the agreement is in all
    respects fair and reasonable between the parties, it may be enforced by the
    court by order in such manner and subject to such conditions as to the costs of
    the application as the court thinks fit, but, if the terms of the agreement are
    deemed by the court not to be fair and reasonable, the agreement may be
    declared void, and the court may order it to be cancelled and may direct the
    costs, fees, charges and disbursements incurred or chargeable in respect of the
    matters included therein to be assessed in the ordinary manner.

[41]

We reject the appellants argument, for two
    reasons.

[42]

First, as conceded by counsel for the appellant
    during oral argument, this argument was not raised before the application
    judge. It therefore cannot be raised on appeal. As a general rule this court will
    not entertain entirely new issues on appeal: see, e.g.,
Kaiman v. Graham
,
    2009 ONCA 77, 245 O.A.C. 130, at para. 18.

[43]

Second, in any event, even if we assume that s. 24
    could apply to a contingency fee agreement entered into by a person under
    disability without the participation of their litigation guardian, the
    application judge declined to approve the CFA. Based on the findings she made,
    we conclude that the CFA was not fair, reasonable, and in Mr. Nguyens best interest.
    As a result, we would not enforce it under s. 24.

[44]

The fairness requirement of s. 24 concerns the
    making of the fee agreement and whether the client fully understood and
    appreciated the nature of the agreement that he executed:
Chrusz v.
    Cheadle LLP
, 2010 ONCA 553, 272 O.A.C. 1, at para. 31. The application
    judges findings confirm that this standard was not met:

·

The CFA was executed by Mr. Nguyen, not by Ms.
    Phan, who was not present. The appellant was aware of this and ought to have
    ensured that Ms. Phan was present when he asked Mr. Nguyen to enter into the
    CFA. Once Ms. Phan was appointed litigation guardian, the appellant was
    required to obtain instructions from her. It was not open to the appellant to
    disregard Ms. Phans role as litigation guardian. Given the appellants
    relationship with Mr. Nguyen, Mr. Nguyen might have signed anything that
    the appellant requested.

·

A capacity assessment ordered by the Superior
    Court found that Mr. Nguyen had little understanding of his civil action. He
    lacked the capacity to instruct his lawyer and to make decisions concerning
    the financial and legal matters involved in his litigation.

·

The timing of the signing of the CFA suggests
    that it was entered into solely for the purpose of obtaining the ATE Policy.

[45]

The appellant has advanced no basis to impugn any
    of these findings of the application judge, which are entitled to appellate
    deference:
Chrusz
, at paras. 13, 37. Based on these findings, we
    decline to approve the CFA under s. 24 of the
Solicitors Act
.

[46]

The appellant also asserts that Mr. Nguyens
    agreement to pay disbursements under the CFA is severable and should be
    enforced, even if the CFA is invalid. He also relies on s. 9 of the CFA
    Regulation, which he says provides him with a first charge on the proceeds of
    the ATE Policy. Section 9 provides:

9.
(1) If the
    client is responsible for the payment of disbursements or taxes under a
    contingency fee agreement, a solicitor who has paid disbursements or taxes
    during the course of the matter in respect of which services were provided
    shall be reimbursed for the disbursements or taxes on any funds received as a
    result of a judgment or settlement of the matter.

(2) Except as provided under section 47 of
the
    Legal Aid Services Act
,
1998
(legal aid charge against
    recovery), the amount to be reimbursed to the solicitor under subsection (1) is
    a first charge on the funds received as a result of the judgment or settlement.

[47]

Once again, these arguments were not raised
    before the application judge, and therefore cannot be raised on appeal.

[48]

In any event, on these facts, we would not order
    the payment of disbursements under the CFA: the CFA was concluded with a person
    under disability and was found to be unenforceable. As explained above, we
    would not enforce it either.

(2)

Did the application judge err in dismissing the
    motion for a charging order?

[49]

The appellants second appeal seeks to overturn
    the application judges order dismissing his motion for a charging order. The
    application judge held that the motion was a collateral attack on her earlier decision,
    precluded by issue estoppel, and an abuse of the courts process. She also held
    that, if she was wrong in these conclusions, the appellant failed to meet the test
    for a charging order.

[50]

Because we conclude that on these facts it was
    fully open to the application judge to find that the appellant failed to meet
    the test for a charging order, it is unnecessary to address whether the motion was
    precluded by the doctrines of collateral attack, issue estoppel, and abuse of
    process.

[51]

The appellant sought a charging order under s.
    34(1) of the
Solicitors Act
:

34
(1) Where a solicitor has been
    employed to prosecute or defend a proceeding in the Superior Court of Justice,
    the court may, on motion, declare the solicitor to be entitled to a charge on
    the property recovered or preserved through the instrumentality of the
    solicitor for the solicitors fees, costs, charges and disbursements in the
    proceeding.

[52]

The principles governing the granting of a charging
    order under s. 34(1) were summarized by this court in
Weenan v. Biadi
,
    2018 ONCA 288, 141 O.R. (3d) 276, at paras. 14-15:

·

To obtain a charging order on the monies in
    issue, the onus is on the solicitor to demonstrate that a charging order is
    warranted;

·

The decision is discretionary. In deciding
    whether to exercise that discretion, the court must balance the circumstances
    and equities of each case and client; and

·

To obtain a charging order, the solicitor must demonstrate
    that:

i.

the fund or property is in existence at the time
    the order is granted;

ii.

the property was recovered or preserved
    through the instrumentality of the solicitor; and

iii.

there must be some evidence that the client
    cannot or will not pay the lawyers fees.

[53]

The appellant asserts that the motion judge
    erred in concluding that the appellant had not established that his work was
    instrumental to the recovery or preservation of the property. Repeating the argument
    he made before the application judge, he contends that he arranged for the ATE
    Policy and performed the work on Mr. Nguyens civil action that led to payment
    of the policy proceeds.

[54]

The application judge rejected these arguments.
    She found that the appellant simply sold Mr. Nguyen the ATE Policy as an
    insurance intermediary. She agreed with the submission of the PGT that the
    appellant should not be rewarded for brokering a contract between Mr. Nguyen
    and DAS when he knew that Mr. Nguyen had a litigation guardian and was
    incapable of entering into the contract. She also found that the ATE Policy
    proceeds were not the fruits of the litigation because Mr. Nguyen recovered
    nothing in the litigation and is more indebted after the litigation than before
    it. Since no property was recovered or preserved in the proceeding, there can
    be no charging order.

[55]

We see no error in the application judges findings
    or in her exercise of discretion based on the evidence before her.

[56]

We also agree with the submission of the PGT in
    its factum that the facts of this case are nothing less than shocking, and that
    it would offend the principles of fairness and justice to reward the appellant,
    through the payment of fees and disbursements, for entering into the CFA with
    Mr. Nguyen, brokering an insurance contract between him and DAS, and having Mr.
    Nguyen sign a direction to him, when he knew that Mr. Nguyen was incapable of
    making these decisions and had a litigation guardian from whom the appellant was
    supposed to take instructions.

D.

Disposition

[57]

The appeals are dismissed. The appellant is
    ordered to pay costs of $20,000 to the respondent Mr. Szot and $11,000 to the PGT,
    inclusive of disbursements and taxes.

Released: June 17, 2020 (E.E.G.)

E.E.
    Gillese J.A.

David
    Brown J.A.

M.
    Jamal J.A.

[1]
In December 24, 2015, Mr. Nguyens claim for statutory accident
    benefits in an arbitration at the Financial Services Commission of Ontario was
    dismissed:
Nguyen v. TD Home and Auto
    Insurance Co.
,
2015 CarswellOnt 20301. A statutory appeal and an
    application for judicial review of this decision brought by the appellant on
    Mr. Nguyens behalf were also dismissed:
Nguyen v. TD Home and Auto
    Insurance Co.,
2017 CarswellOnt 2650;
Nguyen
    v. TD Home and Auto Insurance Company
,
2018 ONSC 7166 (Div. Ct.).