WARNING

The President of the panel hearing this
    appeal directs that the following should be attached to the file:

An order restricting publication in this
    proceeding under ss. 486.4(1), (2), (2.1), (2.2), (3) or (4) or 486.6(1) or (2)
    of the
Criminal Code
shall continue.  These sections of
the Criminal
    Code
provide:

486.4(1)       Subject to subsection (2),
    the presiding judge or justice may make an order directing that any information
    that could identify the victim or a witness shall not be published in any
    document or broadcast or transmitted in any way, in proceedings in respect of

(a)     any of the following offences;

(i)      an offence under section 151,
    152, 153, 153.1, 155, 159, 160, 162, 163.1, 170, 171, 171.1, 172, 172.1, 172.2,
    173, 210, 211, 213, 271, 272, 273, 279.01, 279.011, 279.02, 279.03, 280, 281,
    286.1, 286.2, 286.3, 346 or 347, or

(ii)      any offence under this Act, as
    it read at any time before the day on which this subparagraph comes into force,
    if the conduct alleged involves a violation of the complainants sexual
    integrity and that conduct would be an offence referred to in subparagraph (i)
    if it occurred on or after that day; or

(iii)     REPEALED: S.C. 2014, c. 25, s.
    22(2), effective December 6, 2014 (Act, s. 49).

(b)     two or more offences being dealt
    with in the same proceeding, at least one of which is an offence referred to in
    paragraph (a).

(2)     In proceedings in respect of the
    offences referred to in paragraph (1)(a) or (b), the presiding judge or justice
    shall

(a)     at the first reasonable
    opportunity, inform any witness under the age of eighteen years and the victim
    of the right to make an application for the order; and

(b)     on application made by the
    victim, the prosecutor or any such witness, make the order.

(2.1) Subject to subsection (2.2), in
    proceedings in respect of an offence other than an offence referred to in
    subsection (1), if the victim is under the age of 18 years, the presiding judge
    or justice may make an order directing that any information that could identify
    the victim shall not be published in any document or broadcast or transmitted
    in any way.

(2.2) In proceedings in respect of an
    offence other than an offence referred to in subsection (1), if the victim is
    under the age of 18 years, the presiding judge or justice shall

(a) as soon as feasible, inform the
    victim of their right to make an application for the order; and

(b) on application of the victim or the
    prosecutor, make the order.

(3)     In proceedings in respect of an
    offence under section 163.1, a judge or justice shall make an order directing
    that any information that could identify a witness who is under the age of
    eighteen years, or any person who is the subject of a representation, written
    material or a recording that constitutes child pornography within the meaning
    of that section, shall not be published in any document or broadcast or
    transmitted in any way.

(4)     An order made under this section
    does not apply in respect of the disclosure of information in the course of the
    administration of justice when it is not the purpose of the disclosure to make
    the information known in the community. 2005, c. 32, s. 15; 2005, c. 43, s.
    8(3)(b); 2010, c. 3, s. 5; 2012, c. 1, s. 29; 2014, c. 25, ss. 22,48; 2015, c.
    13, s. 18..

486.6(1)       Every person who fails to
    comply with an order made under subsection 486.4(1), (2) or (3) or 486.5(1) or
    (2) is guilty of an offence punishable on summary conviction.

(2)     For greater certainty, an order
    referred to in subsection (1) applies to prohibit, in relation to proceedings
    taken against any person who fails to comply with the order, the publication in
    any document or the broadcasting or transmission in any way of information that
    could identify a victim, witness or justice system participant whose identity
    is protected by the order. 2005, c. 32, s. 15.

COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Rafiq, 2015 ONCA 768

DATE: 20151112

DOCKET: C58792

Strathy C.J.O., Lauwers J.A. and Speyer J. (
ad
    hoc
)

BETWEEN

Her Majesty the Queen

Appellant

and

Yasir Rafiq

Respondent

Lisa Henderson, for the appellant

Nathan Gorham and B. Vandebeek, for the respondent

Heard: October 1, 2015

On appeal from the sentence imposed on April 17, 2014 by
    Justice N.L. Backhouse of the Superior Court of Justice.

Strathy C.J.O.:

A.

introduction

[1]

The respondent pleaded guilty to one count of child luring contrary to
    s. 172.1 of the
Criminal Code
. He received a conditional sentence
    of two years less a day.

[2]

The Crown seeks leave to appeal the conditional sentence. If leave is
    granted, it asks that the appeal be allowed and a custodial term imposed.

[3]

For the reasons that follow, I would grant leave, allow the appeal, and
    order the appellant incarcerated for the time remaining on his conditional
    sentence.

B.

The Facts

[4]

Between April and December 2009, the respondent engaged in sexually
    explicit Internet chats with a 12-year-old girl, E.F., who lived in the south
    western United States. He instructed her on sexual activities, sent her
    photographs of his penis, induced her to send him nude photographs of herself,
    and had lengthy chats with her, requesting that she masturbate at the same time
    as he did.

[5]

The respondent met E.F. through an Internet tennis game. He used a false
    name and told her he was 22 years old. In fact, he was 24. She initially told
    him she was 18. In fact, she was 12.

[6]

They began communicating by email and instant messenger. The respondent asked
    E.F. about her sexual experiences. From her relative ignorance of sexual
    matters, he suspected that she was younger than 18.  He pressed her for
    details. She admitted she was only 12. This was in June, a month or two after
    they began communicating.

[7]

With knowledge that E.F. was 12, the respondent continued his sexually
    explicit communications for another five months. He escalated from chatting, to
    sending photos of his erect penis, to suggesting sexual acts for her to engage
    in, to asking for and receiving nude photographs of her body, including
    close-ups of her vagina. He engaged in lengthy sexual chats with her while he
    masturbated, requesting that she do so at the same time. He instructed her on
    how to perform oral sex on a banana and she sent him photographs of herself
    doing so. He instructed her on inserting objects into her vagina.

[8]

E.F. sent the respondent at least 38 nude photographs of herself. Some
    contained close-ups of her vagina, posed according to his directions. When she
    expressed reluctance about sending more, he told her that another girl was
    willing to send him photographs if she did not.

[9]

The respondent clearly realized that what he was doing was wrong. At one
    point, he suggested E.F. could say she was 18 in their chats. She declined to
    do so, protesting that she was 12 years old, not 18.

[10]

Eventually,
    E.F. stopped communicating. Her parents discovered what had been taking place.
    In December, they reported the offence to police, who interviewed E.F. The
    communications were traced to a computer in the respondents home in
    Scarborough, Ontario. Police arrested him. They found his emails and chats with
    E.F. on his computer. They also found a number of pornographic photographs of E.F.,
    hidden on his computer in a folder named E.. They also found five child
    pornography videos on his computer, none of which involved E.F.

[11]

For
    the purposes of sentencing, the respondent admitted the possession of the
    photographs of the victim, although he did not plead to the count of possession
    of child pornography. He testified that he was not aware of the child
    pornography videos on his computer, which he thought might have been
    inadvertently downloaded with other pornographic videos. The sentencing judge
    accepted this explanation.

C.

The sentencing Judges Reasons

[12]

The
    sentencing judge identified the sentencing principles set out in ss. 718, 718.1
    and 718.2 of the
Code
and noted the specific principles applicable to
    cases such as this, set out by this court in
R. v. Woodward
, 2011 ONCA
    610, 107 O.R. (3d) 81. There, this court stated, at para. 76, that the focus of
    the hearing should be on the harm caused to the child by the offenders
    conduct and the life-altering consequences that can and often do flow from it.
    This court went on to say that while the effects of the sentence on the
    offender, and the prospects for rehabilitation warrant consideration, the
    objectives of denunciation and deterrence, and the need to separate sexual
    predators from society for societys well-being and the well-being of our children
    must take precedence.

[13]

The
    sentencing judge also accepted that, in the absence of exceptional
    circumstances, a conviction for Internet luring will normally require a period
    of significant incarceration, and that this principle should be departed from
    only in the rarest of cases.

[14]

She
    considered the following factors aggravating: (a) the presence of an actual
    victim (as opposed to a police officer) and the suffering of the victim and her
    family; (b) the victim was 12-years old, bringing the case within the most
    serious luring charge; (c) the prolonged nature of the conduct, 6 to 7 months;
    and (d) the accused was a healthy 24-year-old manipulating a 12-year-old girl.

[15]

The
    following factors were mitigating: (a) a guilty plea, saving the victim from
    testifying; (b) the absence of a criminal record; (c) a supportive family; (d)
    a lengthy period on bail; (e) submitting to a psychiatric assessment and
    counselling; (f) a low risk of re-offending; and (g) genuine remorse.

[16]

E.F.s
    mother filed a victim impact statement. E.F. herself did not wish to do so. The
    sentencing judge had no doubt about the sincerity of the mothers belief about
    the effect of the crime on her daughter, and no doubt that the accuseds
    conduct had impacted E.F. However, without a professional assessment, she
    viewed the mothers opinion with caution. Although E.F. was in counselling,
    there was no report from her counsellor. There was no evidence that her
    academic progress had been affected and no evidence that her social life had
    changed. Although her mother believed that E.F. was depressed, the sentencing
    judge was unable to determine if this was clinical and related to the abuse or
    typical teenage angst.

[17]

The
    sentencing judge concluded that there was some negative impact on the victim,
    but not of such a degree as to be life-altering, as described in
Woodward
.

[18]

The
    respondent had very strong rehabilitative prospects. He pleaded guilty, showed
    sincere remorse, and spared the victim from testifying. He had no criminal
    record. He had a strong employment history. He had strong family support. He received
    counselling. An expert psychiatric report established that he was not a
    paedophile and was at negligible risk of committing future offences. The
    respondent had never attempted to meet the victim. The expert testified that
    someone who has already arranged a meeting is a higher risk than someone who has
    not. The expert testified that the respondent was a very good candidate for
    counselling. The respondent spent about four months under restrictive bail
    prior to sentencing, and four additional months on bail with a curfew.

[19]

The
    sentencing judge accepted the expert evidence that the respondent was not a paedophile
    and found that while he was emotionally immature, there were good prospects for
    counselling. He was a naïve man who exercised poor judgment. He had shown
    insight into his crimes, remorse, empathy and motivation not to let it happen
    again.

[20]

The
    sentencing judge considered that the most important thing was for the appellant
    to receive regular counselling. She found there would be less risk to the
    public if he could continue his counselling and his employment.

[21]

The
    sentencing judge concluded that this was one of the rarest of cases in which
    a conditional sentence was appropriate. She therefore sentenced the respondent to
    a sentence of two years less a day, with 12 months of house arrest (except
    while travelling to or from or at his place of employment), followed by a
    12-month curfew and 100 hours of community service.

D.

The Standard of Review

[22]

It
    is well-settled that absent an error in principle, failure to consider a
    relevant factor, or an overemphasis of appropriate factors, this court should
    interfere only if the sentence is demonstrably unfit:
R. v. M.(C.A.)
,
    [1996] 1 S.C.R. 500, at para. 90;
R. v. Ramage
, 2010 ONCA 488, 257
    C.C.C. (3d) 261, at para. 69.

[23]

This
    standard of review is deferential. It recognizes the unique position and
    experience of the sentencing judge when balancing the competing interests at
    play in the sentencing process, particularly those of the victim, offender and
    community. This court observed in
Ramage
, at paras. 72-73, that the
    sentencing judge is in the best position to gauge the interests of the
    community when assessing if a conditional sentence could meet the needs of
    general deterrence and denunciation.

E.

Discussion

[24]

A
    conditional sentence was not appropriate in this case.

[25]

Section
    172.1(1) of the
Code
provides:

Luring
    a child

172.1

(1) Every
    person commits an offence who, by a means of telecommunication, communicates
    with

(
a
) a person who is, or who the accused believes
    is, under the age of 18 years, for the purpose of facilitating the commission
    of an offence with respect to that person under subsection 153(1), section 155,
    163.1, 170, 171 or 279.011 or subsection 279.02(2), 279.03(2), 286.1(2),
    286.2(2) or 286.3(2);

(
b
) a person who is, or who the accused believes
    is, under the age of 16 years, for the purpose of facilitating the commission
    of an offence under section 151 or 152, subsection 160(3) or 173(2) or section
    271, 272, 273 or 280 with respect to that person; or

(
c
) a person who is, or who the accused believes
    is, under the age of 14 years, for the purpose of facilitating the commission
    of an offence under section 281 with respect to that person.

[26]

This
    offence now features a mandatory minimum sentence of one year, when the Crown
    proceeds by indictment, or six months, when prosecuted summarily: s. 172.1(2).
    No minimum sentence was in place during the time of the offence at issue. Had
    one been, the respondent would not have been entitled to a conditional
    sentence: s. 742.1(b).

[27]

In
R. v. Folino
(2005), 77 O.R. (3d) 641, this
    court stated that the offence of child luring must be dealt with seriously to
    protect vulnerable children from predators who use the Internet to lure them
    into situations in which they can be exploited and abused. The sentencing
    objectives of denunciation and deterrence require a sentence of incarceration
    in most cases. A conditional sentence will only be appropriate in the rarest
    of cases.

[28]

While
    I acknowledge the sentencing judges appropriate concern for the rehabilitation
    of a naïve and immature offender, it is my respectful view that a conditional
    sentence was unfit in the circumstances of this case. That sentence did not
    give adequate expression to denunciation and deterrence. Nor did it give
    adequate consideration to the impact of the offence on the victim. It  also
    ignored aggravating factors.

[29]

I
    will begin by identifying the aggravating factors that should have been
    considered. I will then address the impact of the offence on the victim,
    distinguish this case from others in which a conditional sentence was imposed for
    child luring, and, finally, explain why denunciation and deterrence call for a
    sentence of incarceration.

Failure to consider aggravating factors

[30]

In
    her analysis of the appropriate sentence, the sentencing judge failed to take
    into account that, in the course of committing the offence of child luring, the
    respondent repeatedly and successfully urged the victim to make and distribute
    child pornography by sending naked images of herself to him, an offence under
    s. 163.1 of the
Code
.

[31]

Although
    the respondent did not plead guilty to distribution or possession of child
    pornography, it was agreed that the court could consider the child pornography
    as part of the circumstances of the offence. The child pornography offence featured
    a mandatory minimum sentence. A conviction for that offence would have
    precluded the respondents conditional sentence.

[32]

The
    trial judge made no reference to the production of child pornography in her
    analysis of aggravating factors. The exploitation of the victim to produce
    made-to-order child pornography, for his own sexual gratification, was a
    significant aggravating factor: see
R. v. Jarvis
(2006), 211 C.C.C.
    (3d) 20 (C.A.), at para. 31;
R. v. R.B
., 2014 ONCA 840, 327 O.A.C. 20,
    at para. 10.

[33]

Once
    the victim supplied nude photographs of herself to the respondent, he was able
    to manipulate her to continue to supply more. I agree with the observation in
R.
    v. Hajar
, 2014 ABQB 550 at para. 18, that [t]he potential for such images
    to be shared with others may, even in the absence of any extortion by the
    offender, make the young victim more sexually compliant in an attempt to
    maintain some indirect control over the images, thus encouraging what appears
    to be
de facto
consent.

[34]

It
    was also aggravating that the
respondent groomed
    his child victim by cultivating her trust, steering the conversations towards
    sexual topics, and schooling her about sexual matters.
It may have been
    a fortunate circumstance of geography that the appellant did not attempt to
    meet with the victim, precluding his interference from escalating to direct
    physical contact.

Inadequate consideration for impact on
    victim

[35]

The
    offence has had, and likely will have, a significant impact on the victim.

[36]

Early
    in her analysis, the sentencing judge identified the principle applicable to
    cases such as this, set out by this court in
Woodward
, to the effect
    that the focus of the hearing should be on the harm caused to the child.

[37]

The
    mothers victim impact statement stated that E.F. refused to complete the
    child/youth victim impact statement. Victim impact statements may be completed
    by family members where the victim is dead, ill or incapable of making a
    statement: s. 722(2)(d). In this case, the defence did not object to the
    introduction of the mothers victim impact statement. Nor did the defence
    dispute that the harm identified in the mothers statement was referable to the
    abuse by the respondent.

[38]

E.F.s
    mother described her daughter as having become a very guarded, quiet, reserved
    stand-offish, distant and depressed young lady of 16 years and said this had
    changed the entire family dynamic. E.F. no longer had a relationship with her
    sister. Her sister had shut her out of her life, refused to acknowledge E.F. as
    her sister, and found her gross, stupid and disgusting.

[39]

The
    mother wrote that E.F. refused to talk to her family about anything in her
    life. This made it difficult to explain her conduct to relatives, without
    telling them the truth about why E.F. acts like she does.

[40]

The
    mothers statement continued:

Although she has told us she was relieved when we discovered
    what was going [on] because it immediately put a stop to the control he had
    over her and the manipulation he had over her, she states she feels she cant
    trust us or talk to us any longer since this all took place. She has been going
    to counselling for the past 4 years because of this and we still feel she is
    not over it, it is still present in her life and seems to dictate who she has
    become, which is so very sad for a beautiful young lady who has so much
    potential. We wonder if she will ever heal, find closure, be able to accept
    what happened, put it behind her and move on with her life in a healthy, happy,
    positive way.

We believe her innocence, her childhood and her ability to love
    and be loved have been stripped away because of the horrific relationship she
    had with Rafiq.

[41]

The
    mothers statement makes it clear that, in her view, the victims
    self-exclusion from her family was directly attributable to the actions of the
    respondent, and not the result of teenage angst.

[42]

The
    mothers evidence aside, in
R. v. D.D.
(2002), 58 O.R. (3d) 788
    (C.A.), at paras. 37-38, this court noted that the tragic consequences of the
    exploitation of young children by adult sexual predators include the following:
    immediate physical and psychological harm, the inability to form a loving
    caring relationship as an adult, and a proclivity to themselves becoming
    abusers as adults.

[43]

In
D.D.,
this court referred to the decision of the Court of Appeal of
    Alberta in
R. v. S. (W.B.)
and
R. v. P. (M.)
(1992), 73
    C.C.C. (3d) 530, at p. 535, in which that court observed:

One consequence of being abused sexually may be that the child
    will never be able, as an adult, to form a loving caring relationship with
    another [adult] being always fearful, even unconsciously, that such a partner
    will use sexual acts to hurt him or her rather than as an intimate expression
    of caring and affection. There is no empirical way of proving that a particular
    child victims emotional trauma will or will not make it more difficult or
    impossible for him or her to love another, without fear of abuse. We have only
    the recorded experiences of men and women who attribute their difficulties as
    adults in forming mature and fulfilling relationships to their having been
    abused sexually when they were children.

[44]

While
    these observations were made in the context of direct physical sexual abuse,
    the Internet has made it possible for abusers to get into the victims head and
    abuse remotely. The abuser can tell the victim what to do and how to do it, and
    record it  in text, video, or photograph  all for the abusers gratification.
    Thus, through manipulation and control over time by an adult abuser, the child
    victim becomes a participant in her own sexual abuse.

[45]

I
    see no reason to believe that the psychological consequences of such abuse are
    likely to be significantly less serious than the consequences of direct
    physical sexual abuse. The extent to which they will occur in any particular
    victim is impossible to predict. In this case, however, the mother had the
    advantage of observing her daughter over a four-year period. She spoke
    poignantly about her isolation from her sister and her family, and the impact
    of the events on her ability to love and be loved.

[46]

In
    my view, it was an error to discount the impact of the offence on the victim.

Conditional sentences for child luring

[47]

The
    prolonged abuse of an actual, very young girl distinguishes this case from
    others in which this court has imposed conditional sentences: see e.g.
R.
    v. Folino
;
R. v. El-Jamel
, 2010 ONCA 575, 261 C.C.C. (3d) 293.

[48]

In
Folino
, the victim was an undercover police officer posing as a
    13-year-old girl. The offence took place over a 19-day period, and involved six
    Internet chats and eight emails. In
El-Jamel
, the appellant had
    sexually explicit chats with a police officer, believing she was 12 years old.
    The offence took place over a three-day period.

[49]

In
    contrast, this case involved a real victim  someone the respondent knew to be
    a naïve 12 year-old girl. He induced her to make and transmit pornographic
    pictures, insert items in her vagina, masturbate and participate in sexually
    explicit chats  all for his sexual gratification. He did this repeatedly, over
    a span of six months. In my view, his conduct was far more harmful than
    arranging a sexual encounter with an adult police officer believing she was a
    child.

Denunciation and deterrence

[50]

I
    agree with the Crowns submission that the objectives of denunciation and
    deterrence require a custodial sentence.

[51]

I
    appreciate that following a guilty plea, and in the absence of the victim, the
    sentencing hearing understandably focussed on the offender.

[52]

But
    a conditional sentence was not an appropriate outcome. I say this despite the
    respondents youth, remorse, prospects for rehabilitation and absence of threat
    to society. A custodial sentence is required to denounce his conduct and to
    make it clear to those who would use the Internet to abuse young children that
    such conduct has serious punitive consequences.

[53]

Unlike
    many of the child luring cases that come before the court, the respondents
    conduct was not simply preparatory to a crime, but amounted to distinct serious
    offences repeatedly committed on a 12 year-old child over a prolonged period of
    time.

[54]

Arguably,
    the most recent amendment to this offence imposing a mandatory minimum sentence
    for luring should require the appropriate range of sentences to be revised
    upward even further: see e.g.
Woodward
, at para. 58.

F.

Disposition

[55]

For
    these reasons, I would grant leave to appeal sentence, allow the appeal, and
    impose a sentence of two years less a day.  The appellant shall forthwith
    surrender into custody and the sentence begins when the respondent is taken
    into custody. The respondent is entitled to the general one-to-one credit for
    time served on his conditional sentence to the date of release of these
    reasons:
R. v. G.C.F.
(2004), 71 O.R. (3d) 771 (C.A.).  If necessary,
    a warrant may be issued for the respondents arrest.

G.R. Strathy C.J.O.

I agree P. Lauwers
    J.A.

I agree Speyer J. (
ad
    hoc
)

Released:
November 12, 2015


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Thompson, 2015 ONCA 800

DATE: 20151123

DOCKET: C58681

Hoy A.C.J.O., Weiler and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Barrington Thompson

Appellant

Mark Halfyard, for the appellant

Vanita Goela, for the respondent

Heard: October 8, 2015

On appeal from the conviction entered on January 29, 2014
    by Justice Tamarin M. Dunnet of the Superior Court of Justice, sitting without a
    jury.

Weiler J.A.:

A.

OVERVIEW

[1]

The appellant was charged with possession of cocaine and marihuana for
    the purpose of trafficking and possession of the proceeds of crime.

[2]

The appellant brought two applications pursuant to the
Canadian
    Charter of Rights and Freedoms
. The first was for an order for a stay of
    proceedings pursuant to s. 24(1) on the basis that the proceedings
    amounted to an abuse of process. In the alternative, the appellant sought an
    order excluding the admission into evidence of the drugs seized pursuant to s.
    24(2) because he alleged his right to be secure from unreasonable search and
    seizure under s. 8 had been violated.

[3]

The grounds for the applications were that the police obtained a search
    warrant for the appellants restaurant based on allegedly false information
    that Mr. Simpson was in possession of cocaine after leaving the restaurant. The
    police used this information to corroborate the tip from the confidential
    informant that the appellant was selling drugs from his restaurant.

[4]

The parties agreed that resolution of the
Charter
applications
    turned on two factual questions:

1.

Did the police fabricate seeing Mr. Simpson coming out of the
    restaurant?

2.

Did the police fabricate the claim that Mr. Simpson was in possession of
    crack cocaine?

[5]

The trial judge answered no to both questions and convicted the
    appellant of possession of cocaine for the purpose of trafficking. The other
    two counts were stayed on consent.

[6]

The appellant submits that the trial judge erred in misapprehending the
    evidence, in weighing the evidence, and in considering certain oath-helping
    evidence while assessing the credibility of the Crown witnesses.

[7]

I would dismiss the appeal for the reasons that follow.

B.

Factual Background

[8]

Det. Sgt. Correia testified that he received a tip from a confidential
    informant that the appellant was trafficking drugs from his restaurant packaged
    in takeout food containers. The police needed corroboration of the tip to
    obtain a search warrant for the restaurant, located near Queen and Lansdowne in
    Toronto.

[9]

On March 28, 2011, Det. Sgt. Correia and Det. Cst. Cameron held a
    briefing with their crew at 1:15 p.m. that Cst. Armstrong attended. The purpose
    of the briefing was to set up observations and to build grounds for a search
    warrant. The briefing concluded at 1:20 p.m. and Det. Sgt. Correia was in the
    area to begin surveillance of the restaurant at 1:25 p.m.

[10]

Det.
    Cst. Cameron was the road boss and central notetaker. As the road boss, he
    deployed officers to conduct observations at the restaurant and decided whom to
    arrest.

[11]

At
    1:39 p.m., Det. Sgt. Correia observed a man walk into the restaurant and leave a
    few minutes later with his hand in his left pants pocket. He relayed this
    information to Det. Cst. Cameron.

[12]

Csts.
    Armstrong and Fairclough observed the man described by Det. Sgt. Correia, who
    turned out to be Mr. Simpson, a cousin of the appellant. Det. Cst. Cameron
    directed the officers to arrest him.

[13]

Cst.
    Faircloughs evidence was that he identified himself as a police officer and
    tried to arrest the man as he walked northbound on Lansdowne. A struggle
    ensued. When the officers gained control of the man, Cst. Fairclough arrested
    him for possession of cocaine. Cst. Fairclough was standing beside Cst. Armstrong,
    who advised him he had located crack. Cst. Fairclough did not see the drug and
    did not hear Mr. Simpson state that he had purchased it from the appellant.

[14]

Cst.
    Armstrong testified that during the struggle he saw Mr. Simpson drop something
    and then attempt to push or jam it into the muddy ground. He testified that he
    found a plastic baggie twice knotted containing crack cocaine, which he put in
    the pocket of his jacket. He told his partner that he had found crack.

[15]

Cst.
    Armstrong arrested Mr. Simpson but released him on a promise to appear. He
    recorded the time as 1:15 p.m. on the Appearance Notice. This time conflicted
    with his and Cst. Faircloughs evidence that they received information that Mr. Simpson
    had entered the restaurant at 1:39 p.m.

[16]

At
    1:48 p.m., Det. Cst. Cameron learned that the police had recovered crack
    cocaine and that Mr. Simpson was in custody. He directed his team to enter the restaurant
    to arrest the appellant.

[17]

When
    Det. Cst. Cameron entered the restaurant, Det. Sgt. Correia had already taken
    the appellant into custody. Det. Cst. Cameron observed plastic baggies of
    marihuana and what appeared to be crack cocaine. He ordered the scene to be
    frozen by preventing people from coming in and out of the restaurant while
    they waited for a search warrant.

[18]

The
    police obtained a search warrant for the appellants restaurant and executed the
    warrant at 6:33 p.m. They seized 44.95 grams of cocaine, 198.67 grams of
    marihuana and cash consisting of $665, US$1015, £40 and 50.

[19]

The
    Supplementary Record of Arrest prepared by Det. Sgt. Correia stated that Mr.
    Simpson advised he had purchased crack cocaine from the appellant.

[20]

Mr.
    Simpson acknowledged that he sometimes traffics in cocaine but he denied being
    in possession of cocaine on the date in question. His evidence was that he went
    to the restaurant to buy salt fish and was told none was available at that
    time. He returned to his home, which was nearby. He was on his way back to the
    restaurant to see if the salt fish was ready when he was arrested.

[21]

Mr.
    Simpson testified that after he attended court three or four times, he still
    had not received disclosure of the Crowns case against him. The Crown withdrew
    the charges.

[22]

The
    appellant testified that he does not sell drugs to Mr. Simpson because he is
    known to the police. The appellant admitted that he is also known to the
    police. He testified that Det. Sgt. Correia had arrested him one year earlier.
    On that occasion, the appellant had turned his back on Det. Sgt. Correia, when he
    cried out for his help during a struggle with a woman he was arresting inside
    the appellants restaurant.

[23]

The
    appellant submits that the police fabricated evidence of finding drugs on Mr.
    Simpson to obtain the warrant to search his restaurant, and that they had a
    motive to fabricate, because Det. Sgt. Correia held a grudge against the
    appellant for not assisting him in his struggle with the woman. She bit Det.
    Sgt. Correias finger during his struggle and instead of helping him, the
    appellant shepherded his 10-year-old son into the kitchen area.

[24]

Following
    the womans arrest, the police searched the restaurant and found a small
    quantity of drugs. The appellant was arrested, charged and later given a fine.

C.

reasons of the trial judge

[25]

The
    trial judge began her reasons by observing that the appellant and Mr. Simpson
    both had criminal records for trafficking in cocaine and that she could use
    this fact to assist her in deciding how much to rely on their testimony.

[26]

She
    considered inconsistencies in the evidence of the police officers.
    Specifically, at the time of his arrest, Mr. Simpson was not carrying drugs in
    a takeaway food container as specified by the confidential informant. Moreover,
    the officers evidence regarding the time of Mr. Simpsons arrest and the
    subsequent seizure was inconsistent with the Appearance Notice and the property
    report.

[27]

The
    trial judge rejected the appellants submission that the property report
    prepared by Cst. Armstrong, which recorded the time of the seizure as 1:00
    p.m., called into question the entire sequence of events surrounding the
    investigation. She observed that Cst. Armstrongs own notes indicated that he
    was attending a briefing at 1:15 p.m. The notes of other officers stated that Cst.
    Armstrong advised the other officers over the radio that he had found crack
    cocaine and that he had Mr. Simpson in custody at 1:48 p.m.

[28]

Cst.
    Armstrong testified that the Appearance Notice should have recorded the time
    releasing Mr. Simpson as 2:15 p.m. The trial judge accepted his explanation
    that the discrepancy was due to him looking at the clock in his police car and
    that the time may not been changed to Daylight Saving Time in the absence of
    any other explanation.

[29]

The
    individual notes of Det. Cst. Cameron, whose responsibility it was to record
    the timing of events, were missing, but the central notes were available. The
    trial judge did not place much weight on the loss of the original notes.

[30]

The
    trial judge also reviewed the evidence of Det. Sgt. Correia, who filled out a
    Supplementary Record of Arrest in relation to the appellant. He typed the
    following synopsis in part: [A male] was arrested a short distance away.
    Located on the male was a quantity of cocaine. The male advised that he had
    just purchased the crack cocaine from the accused, Barrington THOMPSON.

[31]

Det.
    Sgt. Correia could not recall whether someone had told him about the admission.
    It was possible he assumed Mr. Simpson made the admission because drug addicts
    often tell the police where they buy their drugs. Det. Sgt. Correia
    acknowledged that he cuts and pastes from other synopses when preparing
    Records of Arrests. He admitted that despite becoming aware before trial that
    the statement attributed to Mr. Simpson was false, he did not inquire into the
    source of the admission.

[32]

The
    trial judge found that Det. Sgt. Correias statement was not substantiated
    and that he was negligent in assuming that Mr. Simpson said he obtained the
    drugs from the appellant.

[33]

The
    fact that Cst. Armstrong did not show Cst. Fairclough the crack found on
    Mr. Simpson was unfortunate but did not affect her ultimate conclusion.

[34]

There
    was no evidence to support the appellants assertion that Cst. Armstrong took
    the crack attributed to Mr. Simpson from the restaurant because there was no
    evidence that he went inside the restaurant. After Mr. Simpsons arrest
    and before the search warrant was obtained, Cst. Armstrong returned to the
    police station after being told that he was not needed at the restaurant.

[35]

The
    trial judge rejected Mr. Simpsons evidence as it required her to believe one
    of two implausible theories: either the officers followed him to his home
    without arresting him, waited outside in the hope that he would come out again
    soon, and then arrested him on his way back to the restaurant, or they did not
    know that he had been to the restaurant earlier, but encountered him after he
    left his house and arrested him anyway. The police evidence that he was
    arrested on his way home from the restaurant was more logical and persuasive.

[36]

The
    trial judge was not satisfied that the police fabricated either seeing
    Mr. Simpson leaving the appellants restaurant or that Mr. Simpson had
    crack in his possession at the time of his arrest.

[37]

She
    answered no to both questions.

D.

The appellants submissions

[38]

The
    appellant makes three submissions on appeal:

1. The trial judge materially misapprehended the evidence in
    explaining away problems in the timing of Mr. Simpsons arrest and the impact
    of the false statement in the Supplementary Record of Arrest;

2. The trial judge erred in placing no weight on the fact that
    the original central notes went missing and erroneously held that the
    consistency of the officers individual notes, prepared off of the central
    notes, alleviated any concerns about timing and inconsistencies; and

3. The trial judge erred in finding that the risk to the
    officers careers cut against the theory that they fabricated their grounds of
    arrest.

E.

analysis

(1)

Misapprehension of the evidence

[39]

A
    misapprehension of the evidence may relate to a failure to consider evidence
    relevant to a material issue, a mistake as to the substance of the evidence, or
    a failure to give proper effect to evidence:
R. v. Cloutier,
2011 ONCA
    484, 272 C.C.C. (3d) 291, at para. 60. This court described a stringent
    standard for setting aside a conviction on the basis of a misapprehension of
    evidence in
Cloutier
, at para. 60:

The misapprehensions must be of substance rather than detail,
    they must be material rather than peripheral to the judge's reasoning and the
    alleged errors must play an essential part in the reasoning process, not just
    of the narrative. A mere misstatement or inaccuracy in the trial judge's
    treatment of the evidence does not constitute a reversible error. [Citations
    omitted.]

[40]

As
    stated by Doherty J.A. in
R. v. Morrissey
(1995), 22 O.R. (3d) 514
    (C.A.), at p. 541, if an appellant can demonstrate that the conviction rests on
    such a misapprehension, the appellant has not received a fair trial: This is
    so even if the evidence, as actually adduced at trial, was capable of
    supporting a conviction.

[41]

With
    this definition in mind, I will now address the misapprehensions of evidence
    alleged by the appellant.

(a)

Problems with respect to the time of Mr. Simpsons arrest

[42]

As
    previously mentioned, the officers received information that Mr. Simpson
    entered the restaurant at 1:39 p.m. Cst. Armstrong recorded the time of Mr.
    Simpsons release as 1:15 p.m. in the Appearance Notice but it was also his
    evidence that he received information that Mr. Simpson entered the restaurant
    at 1:39 p.m. and that the arrest would have been made around 1:46 p.m. He
    prepared a property report that indicated the time of seizure as 1:00 p.m.

[43]

The
    appellant submits that the trial judges failure to address timing discrepancies
    amounted to a failure to give effect to the substance of the evidence. Further,
    it was unsurprising that the officers evidence was consistent on important
    times, since they made notes after the debriefing and after Det. Cst. Cameron
    typed the central notes for their collective use.

[44]

The
    trial judge considered the timing contradictions and was entitled to accept the
    police evidence, including Cst. Armstrongs explanation that he relied on the
    clock in the police car when recording the time in the Appearance Notice.

[45]

In
    any event, these timing discrepancies do not assist the appellant because the exact
    time of Mr. Simpsons arrest and seizure of cocaine was a matter of detail
    rather than substance. The appellant submits that the officers fabricated their
    evidence in relation to whether Mr. Simpson was arrested on his way home from
    the restaurant or going from his home to the restaurant. As the trial judge
    pointed out, quite apart from the police evidence, it was unlikely that the
    officers would follow Mr. Simpson home from the restaurant and wait around
    for an indefinite period hoping to arrest him if, and when, he came out.

[46]

Similarly,
    the time of the seizure, erroneously recorded in the property report, is only
    relevant because of the appellants submission that the police planted drugs
    obtained from the restaurant on Mr. Simpson after his arrest. The trial judge
    found that there was no evidence that Cst. Armstrong went inside the restaurant
    after Mr. Simpsons arrest. The evidence is that he returned to the police
    station.

[47]

The
    timing of Mr. Simpsons arrest and the seizure was therefore peripheral to the
    trial judges reasoning. She did not misapprehend the evidence or its
    significance.

(b)

The false statement in the appellants Supplementary Record of Arrest

[48]

The
    appellant essentially submits that because Det. Sgt. Correias statement in the
    Supplementary Record of Arrest was false, the trial judge should not have
    characterized it as unsubstantiated. She should have inferred that Cst. Armstrongs
    evidence that he found cocaine on Mr. Simpson was also false and part of a
    plot to frame the appellant. The appellant does not suggest that the statement
    was used in the Information to Obtain the search warrant. The appellant points
    out that Cst. Armstrong did not say anything to Cst. Fairclough about Mr. Simpson
    dropping something on the ground or trying to hide anything in the mud and he
    did not make a notation to that effect.

[49]

The
    appellant invites this court to infer that the Crowns withdrawal of the
    charges against Mr. Simpson without reasons means that the police fabricated
    evidence that Mr. Simpson had crack cocaine in his possession.

[50]

Drawing
    a negative inference from the withdrawal of charges against Mr. Simpson
    would require this court to engage in speculation, because the Crown is not
    obliged to give reasons for the exercise of its prosecutorial discretion: see
R.
    v. Beare
, [1988] 2 S.C.R. 387, at pp. 410-11. Such speculation cannot
    establish arbitrary or improper motives for which a s. 24
Charter
remedy
    would lie: see
R. v. Anderson
, 2014 SCC 41, [2014] 2 S.C.R. 167, at
    para. 36.

[51]

The
    trial judges characterization of Det. Sgt. Correias evidence does not mean
    that she erred in rejecting the inference that Cst. Armstrong planted cocaine
    on Mr. Simpson. Her finding that Mr. Simpson had crack cocaine on him when he
    was arrested is supported not only by the evidence of Cst. Armstrong, but also
    by evidence that he was ordered to return to the police station after the
    arrest and the absence of evidence that Cst. Armstrong entered the restaurant.
    The trial judge was alive to the appellants position and commented that it was
    unfortunate that Cst. Armstrong did not show the crack cocaine he had located to
    Cst. Fairclough.

[52]

Portions
    of Mr. Simpsons evidence support the trial judges conclusion. Mr. Simpson
    acknowledged that he sometimes traffics in cocaine when he is out of work or
    when he wants a bit of extra money for the horse races. On the day in question,
    he was planning to go to the races.

[53]

In
    summary, although the trial judge characterized Det. Sgt. Correias statement as
    being not substantiated rather than false, in the circumstances, her characterization
    does not constitute a reversible error.

(2)

The missing notes

[54]

As
    the central notetaker, it was Det. Cst. Camerons responsibility to prepare
    rough central notes. He testified that he attended a briefing the day after the
    appellants arrest during which he would have made any corrections to his rough
    notes. The officers involved could have suggested changes and corrections to
    his notes based on their observations. He would have made these in the rough
    notes. After the debriefing, he believed he typed the central notes. Det. Cst. Cameron
    testified that the units practice is to type the central notes and then for
    the officers to write their own notes from the central notes.

[55]

The
    appellant submits that the trial judge erred in placing little weight on the
    loss of the entire spare Crown brief including Det. Cst. Camerons original
    notes from the day of the investigation. Without his original notes, Det. Cst. Cameron
    could not say what information was added, altered or deleted at the debriefing,
    prior to typing the central notes. The appellant further submits that the loss
    of this evidence undermines the trial judges conclusion that discrepancies in
    the individual officers versions of events is of no import because their
    notes, produced from the central notes, were consistent on important times.

[56]

In
    support of this submission, he relies on
Wood v. Schaeffer
, 2011 ONCA
    716,

107 O.R. (3d) 721, revd on other grounds 2013 SCC 71, [2013] 3
    S.C.R. 1053, for the proposition that when notes are used to refresh an
    officers memory at trial, it is vital that the notes used record the officers
    own independent recollection of the events in question.

[57]

The
    issue here is that the appellant could not compare the rough handwritten
    central notes with the typed version, not that each officer failed to prepare
    individual notes or that the notes were made in a group, as in
R. v. Jinje,
2015 ONSC 2081, [2015] O.J. No. 1590.

[58]

I
    appreciate that the quality of the record-keeping and the adequacy of an
    officers notes are important, as noted in
R. v. Odgers,
2009 ONCJ
    287,

[2009] O.J. No. 2592. In the post-
Stinchcombe
era, a
    police officers notes are more than an aide memoire and a potential source of
    fruitful cross-examination; they are a source against which to check the
    Crowns disclosure.

[59]

The
    purpose of central notes was discussed by Pattillo J. in
R. v. Thompson
,

2014 ONSC 250, 111 W.C.B. (2d) 181, at para. 18:

The evidence establishes that the purpose of central notes is
    to enable the officers engaged in a real time police exercise to be able to
    concentrate on the task at hand without having to worry about noting down
    times, observations and actions during their involvementAt the end of the
    surveillance, the information in [the central notetakers] handwritten notes [are]
    canvassed with each officer and the observations [are] confirmed to reflect
    each officers recollection. [The central notetaker] then type[s] up his notes

[60]

Pattillo
    J. held, at para. 19, that when central notes are relied upon it is important
    that every officer involved in the investigation review them as soon as
    possible after the event to ensure that the observations or actions attributed
    to them have been accurately recorded.

[61]

This
    appears to have occurred in this case. The appellant received disclosure of
    the typed report concerning the surveillance of his restaurant. The typed notes
    were a copy of the handwritten notes. The fact that the additions or deletions
    on the handwritten notes are not shown on the typed copy does not mean that the
    quality and adequacy of the central notes is lacking.

[62]

After
    reviewing the central notes, the officers made separate notes of their own
    participation. The officers involved that day testified and each testified that
    he had an independent recollection of the events in question. Each officer was
    subject to cross-examination.

[63]

In
    the circumstances, the trial judge did not err in placing little weight on the
    lost handwritten central notes.

(3)

The risk to the officers careers

[64]

In
    rebutting the appellants suggestion that the police fabricated evidence and
    were motivated to do so because of a grudge from a year earlier, the Crown
    elicited evidence from Det. Sgt. Correia that if he were caught lying in an
    investigation he would lose his job.

[65]

The
    trial judge stated, at para. 61, that she was not persuaded that there was a
    hidden agenda surrounding the arrest of the [appellant] and Mr. Simpson, or
    that the officers were complicit in [Det. Sgt.] Correias plan which would
    necessarily involve jeopardizing their own reputations and careers.

[66]

The
    appellant submits that the trial judge found Det. Sgt. Correia to be more
    credible because of the professional consequences he faced as a police officer
    if he lied.

[67]

I
    do not read the trial judges reasons as engaging in forbidden oath-helping.

[68]

In
    rejecting the appellants position that the police fabricated evidence that Mr.
    Simpson was in possession of cocaine, the trial judge was entitled to state a
    countervailing fact; namely, that if a police officer engaged in fabrication,
    he and those complicit with him would necessarily be jeopardizing their
    careers. The risk involved was a legitimate consideration to be weighed against
    the alleged satisfaction of getting the appellant for refusing to assist Det.
    Sgt. Correia in his struggle with the woman at the restaurant.

(4)

Overall

[69]

The
    decision whether or not to grant a stay is a discretionary remedy of last
    resort that must meet the clearest of cases standard:
R. v. Sheng,
2010
    ONCA 296, 254 C.C.C. (3d) 153, at para. 44. An appellate court may only
    intervene if the court below misdirected itself or came to a decision that is
    so clearly wrong that it amounts to an injustice:
United States of
    America v. Mathurin
, [2015] O.J. No. 4487, at para. 38. That is not the
    situation here.

[70]

The
    trial judge did not make any material error in her assessment of the
    credibility of the witnesses, in weighing the evidence, or engage in oath
    helping. The trial judges use of logic in finding that the police did not fabricate
    seeing Mr. Simpson come out of the appellants restaurant is sound. In
    addition to the evidence of the officers who were alleged to have engaged in
    fabrication, there is independent support in the record for her finding that
    Mr. Simpson was in possession of crack cocaine. As a result, the search of the
    appellants restaurant did not violate his right to be free from unreasonable
    search and seizure under s. 8 of the
Charter
.

F.

DISPOSITION

[71]

For
    the reasons I have given, I would dismiss the appeal.

Released: (A.H.) November 23, 2015

Karen M. Weiler J.A.

I agree Alexandra Hoy
    A.C.J.O.

I agree Grant Huscroft
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Veseli, 2015 ONCA 795

DATE: 20151120

DOCKET: C60376

MacPherson, Tulloch and Pardu JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Hamit Veseli

Appellant

Mark Wiffen, for the appellant

Chris Bendick, for the respondent

Heard and released orally: November 19, 2015

On appeal from the decision by Justice D. Terry Vyse of
    the Ontario Court of Justice dated November 10, 2014, dismissing the appeal
    from the conviction entered on June 9, 2014 by Justice of the Peace
Dan La Caprara of the Ontario Court of Justice
.

ENDORSEMENT

[1]

This is an appeal, with leave, of the conviction of the appellant, Hamit
    Veseli, for careless driving under s. 130 of the
Highway Traffic Act
.

[2]

The appellant was convicted,
in absentia
, on June 9, 2014 by
    Justice of the Peace La Caprara of the Ontario Court of Justice. He was fined
    $490 and received six demerit points, which is a serious concern since he is a
    taxi driver.

[3]

The appellant appealed to the Ontario Court of Justice. He explained
    that he had missed the trial because he had lost the trial notice. The Crown
    did not challenge this assertion. However, Crown counsel argued that because
    the accident that gave rise to the charge was a rear-end collision, with the
    appellant being the driver of the following car, there was no defence available
    to the appellant. Crown counsel said:

With respect to a possible defence to the charge, there is
    significant number of jurisprudence with respect to a rear end collision and
    careless driving.

[4]

The appeal judge agreed with the Crown. She said:

No. Oh dear, all right. Well, that doesnt leave us anywhere
    positive, Mr. Veseli. I havent heard a defence to the charge to cause me to
    grant your appeal.

I am going to have to dismiss your appeal, Mr. Veseli. Im
    sorry. Appeal is dismissed.

[5]

The appellant applied for leave to appeal to this court. LaForme J.A.
    granted the application in an endorsement dated April 15, 2015. He framed the
    issue, at para. 11: The question of law, therefore, is whether the appeal
    judge, on the record before her, was correct in finding that Mr. Veseli had no
    defence to the charge.

[6]

The legal framework for answering this question was set out succinctly
    and accurately in LaForme J.A.s endorsement, at para. 10:

Careless driving is a strict liability offence where Crown
    counsel at trial was required to prove that Mr. Veseli drove without due care
    and attention. However, if Mr. Veseli could show, on the balance of
    probabilities, that what was done was without negligence or fault on his part
    he would avoid conviction. That is, if he were able to show that a reasonable
    mistake was made, there would be no conviction: see
R. v. Kinch
, 2004
    CanLII 11464 (ONSC), at para. 57, citing
R. v. McIver
, [1965] 2 O.R.
    475 (Ont. C.A.).

[7]

In our view, there was evidence at the appeal hearing that raises the
    possibility of a defence to the charge of careless driving. Mr. Veseli said:

I saw the car in front of me. So  and the car pulled over. It
    gives you not to pull over in the right because the bridge was up. The boat
    going through. It gives you not to pull over. So he pull over, he change his
    mind, he come back in the line and I hit in the back.

[8]

Later, the appeal judge asked Mr. Veseli a question about the long line
    of cars waiting for the bridge and he replied:

Yes, to the bridge because the boat going through and usually
    take long, you think to go a different route to take, different street. He
    changed his mind and comes back fast to the line and I hit him in the back.

[9]

In our view, these statements, if converted into testimony at a trial
    and believed by the trial judge, could provide a defence to the charge. We also
    note that the appellant did not have a trial on the merits of the charge, the
    Crown does not challenge his explanation for missing the original trial date,
    the appellants first language is not English, and six demerit points for a
    taxi driver is a serious concern. In these circumstances, we think that the
    appellant deserves a trial.

[10]

The
    appeal is allowed, the conviction for careless driving is set aside, the money
    paid on the fine should be returned to the appellant, and a new trial is
    ordered.

J.C. MacPherson J.A.

M. Tulloch J.A.

G. Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Reddy v. Freightliner Canada Inc., 2015 ONCA 797

DATE: 20151120

DOCKET: C60355

Hoy A.C.J.O., Gillese and Lauwers JJ.A.

BETWEEN

Darryl Reddy

Plaintiff (Respondent)

and

Freightliner Canada Inc.
and Co-Operators Life Insurance Company

Defendants (
Appellant
)

Keith Geurts and Ellen Snow, for the appellant

Andrew Camman and Susan Toth, for the respondent

Heard: November 16, 2015

On appeal from the order of Justice Johanne N. Morissette
    of the Superior Court of Justice, dated March 19, 2015.

ENDORSEMENT

[1]

Daryl Reddy worked for Freightliner Canada Inc. (Daimler) from January
    1998 to January 8, 2007, when Daimler terminated his employment. In the latter
    part of his employment, Mr. Reddy went on short-term disability because he had
    pericarditis. He returned to work but could not function well.

[2]

On January 19, 2007, Mr. Reddy suffered a stroke as a result of the same
    sickness. He was left unable to speak or move the left-hand side of his body.

[3]

Mr. Reddys attempt to obtain long-term disability benefits from Co-Operators
    Life Insurance Company (Co-Operators)  the company that had given him
    short-term disability benefits  was rejected because he was no longer employed
    by Daimler.

[4]

Mr. Reddy sued Daimler and Co-Operators for, among other things,
    long-term disability benefits (LTD).

[5]

Daimler defended the action and Mr. Reddy replied. In his reply (the
    Reply), Mr. Reddy claimed that Daimler had wrongfully terminated his
    employment.

[6]

Daimler moved for summary judgment on the basis that Mr. Reddy raised
    wrongful dismissal as a new cause of action in his Reply and that cause of
    action was statute barred due to the passage of time.

[7]

The motion judge dismissed the motion. She acknowledged that the
    statement of claim did not specifically plead that Mr. Reddy had been
    wrongfully dismissed but found that the failure to use those specific words was
    not fatal.

[8]

After setting out the governing legal principles for determining whether
    the Reply raised a new cause of action, the motion judge concluded that it did
    not. At paras. 22-25 of her reasons, the motion judge stated:

[22]    One must review the statement of claim and its factual
    matrix to ascertain whether or not failing to specifically label a claim
    wrongful dismissal will be fatal.

[23]    In this case, the statement of defence of Daimler
    demonstrates that it knew full well such was being pleaded as it denied liability
    for the elements of wrongful dismissal. It plead at para. 4 the following:

The plaintiff was employed by Daimler at its St. Thomas,
    Ontario plant from January 1998 to January 2007, when his employment was
    terminated for various misconduct. The St. Thomas plant was later closed in
    2009.

[24]    The Reply simply answers the allegation in the
    statement of defence that he was dismissed for cause.

[25]    In my view, the lack of labelling wrongful dismissal
    in the statement of claim is not fatal because notice of the claim was made
    under the factual matrix that the defendant is allegedly in breach of the
    employment contract for Wrongfully denying the plaintiff his disability
    payments.
The only reason why [Mr. Reddys] disability
    benefits were denied is because the plaintiff was terminated from his
    employment
. [Emphasis added.]

[9]

We agree with the motion judge, both as to the result and her reasons.

[10]

The
    claim of wrongful dismissal came as no surprise to Daimler. Indeed, it defended
    the claim on the basis that Mr. Reddys employment was terminated for cause. At
    the core of Mr. Reddys claim is a set of facts establishing an employment
    relationship and contract, that the employment contract was breached at a
    result of termination without notice, and that damages flowed from the breach,
    including loss of LTD benefits.

[11]

Accordingly,
    the appeal is dismissed with costs to the respondent fixed at $10,000, all
    inclusive.

Alexandra Hoy A.C.J.O.

E.E. Gillese J.A.

P.
    Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Rochon v.
    Rochon, 2015 ONCA 746

DATE: 20151106

DOCKET: C58777

Simmons, Epstein and Pardu JJ.A.

BETWEEN

Paulette Rochon and Marcel Rochon

Plaintiffs (Appellants)

and

Francois Rochon

Defendant (Respondent)

Steven Baldwin and Daniel Baldwin, for the appellants

Alan L. Rachlin, for the respondent

Heard: May 26, 2015

On appeal from the judgment of Justice Helen K.
    MacLeod-Beliveau of the Superior Court of Justice, dated April 11, 2014 with
    reasons reported at 2014 ONSC 2337, 119 O.R. (3d) 747.

Epstein J.A.:

OVERVIEW

[1]

On March 28, 2010, a fire broke out in the garage of the home of
    Paulette and Marcel Rochon when their son, Francois Rochon, who was living at
    home with them, was working on his car in the garage.

[2]

At the time of the fire, the house, including the garage, was insured
    under a residential home owners insurance policy (the Policy) issued by
    Grenville Mutual Insurance Company. Paulette and Marcel Rochon were the named insured
    under the Policy and Francois Rochon was an unnamed insured.  Francois Rochons
    car was insured under an Ontario automobile policy of insurance issued by
    Economical Insurance.

[3]

Grenville paid Paulette and Marcel Rochon $148,581.65 for property
    damage caused by the fire. In this subrogated action, Grenville claims it is
    entitled to recover this amount from Economical.  In addition, Paulette and
    Marcel Rochon sought judgment for their uninsured loss of $8,000.

[4]

While this appeal focuses on the interpretation of the Policy, from a
    practical perspective it effectively involves a contest between Grenville and
    Economical over which insurer bears the ultimate responsibility for the fire loss.
    Therefore, for ease of reference, I will refer to Grenville as the appellant
    and Economical as the respondent.

[5]

The trial judge concluded that Francois Rochon was negligent.  And, in
    accordance with the parties agreement, the trial judge analyzed the issues on
    the basis that the negligence took place in the course of Francois Rochons use
    and operation of his motor vehicle. However, she dismissed the action on the
    basis that Grenville was not entitled to subrogate against its own insured;
    namely, Francois Rochon.  The trial judge granted judgment in the amount of
    $8,000 against Francois Rochon to reimburse Paulette and Marcel Rochon for
    their uninsured loss.

[6]

Grenville advances three main arguments in support of its position that
    the trial judge erred in dismissing its subrogation claim:

1.

The trial judge erred in concluding that Francois Rochon was an insured
    under the Policy for the purposes of the claim;

2.

The trial judge erred in finding that Francois Rochon had an insurable
    interest in the loss; and

3.

The trial judge erred in failing to give
effect to the policy argument for allowing subrogation in the circumstances of
    this case.

[7]

In my view, dismissal of Grenvilles subrogation claim is consistent
    with the language of the Policy, the jurisprudence, and the policy against
    allowing an insurer to subrogate against its own insured. I would therefore
    dismiss the appeal.

THE FACTS

The Circumstances Surrounding the Fire

[8]

Francois Rochon, then a 21-year-old technician-mechanic, used the garage
    attached to the home where he lived with his parents to do personal general
    maintenance work, including car maintenance.

[9]

On the evening of March 28, 2010, Francois Rochon was in the garage, installing
    auxiliary lights under the headlights of his car. He needed direct power to the
    headlights to check his wire and electrical connections. He used the car
    battery as the power source, connecting it to a battery charger. After working
    on the car for about five minutes, he checked the connections on the battery charger.
    Everything appeared fine.

[10]

After
    about an hour of work, Francois Rochon checked the battery connections again and
    then went into the house to get his cell phone charger.  He spent approximately
    30 to 45 minutes in the house, before returning to the garage.  When he opened
    the door, he saw flames coming mainly from the trunk of his car where the
    battery was located.  The fire quickly spread to the structure of the garage
    causing extensive damage.

The Policy and Francois Rochons Insurance with Economical

[11]

The
    Policy consists of two parts  the Declaration Page and the Policy itself.  The
    Policy has five sections:

1.

Section 1  Property Coverages;

2.

Section 2  Liability Coverage;

3.

Section 3  Limited Coverages;

4.

Section 4  Miscellaneous Coverages; and

5.

Conditions; Statutory and Additional.

[12]

The
    Policy provides coverage for the garage as well as the house, in two main areas
     multi-peril loss and third party liability.  Named and unnamed insured are
    covered for loss of buildings and contents by fire. Fire loss is not dealt with
    separately: it is included in the general list of insured perils covered under
    Section 1  Property Coverages.

[13]

The
    definition of who is insured under the Policy is found on page 1-1 in the terms
    you and your.  The Policy provides that the definitions of you and your
    apply to Sections 1, 2, 3 and 4. This definition reads as follows:

You

or
your
means the person(s) named as Insured on the Declaration Page and,
while living in the same household
, his or her spouse,
the relatives of either
or any person under the age of
    21 in their care. Spouse includes either of two persons who are not married
    to each other and have lived together continuously for a period of not less
    than three years or, in a relationship of some permanence where there is a
    child born of whom they are the natural or adoptive parents, and have cohabited
    within the preceding year. Only the person named on the Declaration Page may
    take legal action against us. [Emphasis added.]

[14]

The
    Policy also provides liability coverage for negligence claims brought against
    the insured by third parties but specifically excludes coverage for claims resulting
    from the ownership, use or operation of any motorized vehicle, trailer or
    watercraft except those for which coverage is provided by this policy. It was
    agreed that the work Francois Rochon performed on his car constituted the use
    and operation of a motor vehicle.

[15]

As
    previously mentioned, Francois Rochon had third party liability coverage for
    loss caused by his negligence in the use and operation of a motor vehicle under
    his insurance policy with Economical.

THE JUDGMENT BELOW

The Negligence Issue

[16]

The
    trial judge was satisfied that Francois Rochons negligence had caused the
    fire.  She accepted the expert evidence of a professional engineer who
    concluded that the fire was started by electrical arching due to a poor
    connection between the battery charger and the positive battery post, and found
    that Francois Rochon was the only person who could have made the loose connection.
    In doing so, his conduct fell below the standard of care required in the use of
    this type of equipment. He also failed to check the battery connections
    sufficiently.

The Subrogation Issue

[17]

The
    trial judge held that despite Francois Rochons negligence, Grenville was not
    entitled to subrogate its claim against Economical because an insurer cannot
    subrogate against its own insured. At para. 48, the trial judge reasoned that
    Francois Rochon was an insured as follows:

In the [Policy], there is no definition of who is an Insured.
    Rather the [P]olicy defines You and Your. Importantly, this definition
    applies to all four sections of the [P]olicy. As [Francois Rochon] is an
    unnamed insured on the [P]olicy, by the definition of You and Your in the [P]olicy,
    [Francois Rochon]s rights are the equivalent of [Paulette and Marcel Rochon]s
    throughout the [P]olicy.

[18]

The
    trial judge distinguished this courts decision in
Morawietz v. Morawietz
(1986),
    18 C.C.L.I 108.  In
Morawietz,
the insurer brought a successful
    subrogation claim by the parents, as named insured, against their son, whose
    negligence caused the loss.  Significantly, this court held that the son was
    not an insured under the separate fire section of the policy under which the
    loss was paid out and had no insurable interest in the loss.

[19]

The
    trial judge held that those two critical findings rendered the reasoning in
Morawietz
inapplicable to this case.

[20]

In
    addition to concluding that Francois Rochon was an insured under Section 1,
    which paid out the fire loss, the trial judge held that Francois Rochon had an
    insurable interest in the loss, following the Supreme Courts decision in
Scott
    v. Wawanesa Mutual Insurance Co.
, [1989] 1 S.C.R. 1445, which established
    that an insurable interest can exist absent legal ownership. She also found that
    some of his possessions were in the garage and were damaged in the fire.  I
    will return to
Scott
later in these reasons.

[21]

Having
    found the language that established Francois Rochon as an insured under Section
    1 of the Policy clear and unambiguous, the trial judge held that the fact that Francois
    Rochon owned contents that were insurable (presumably referring to his
    automobile policy with Economical) was irrelevant. In reaching this conclusion,
    she relied on
Scott
where, at para. 51, the Supreme Court held that
    absent ambiguity, no further inquiry is required or appropriate; the wording of
    the insurance contract prevails.

[22]

The
    trial judge identified Conditions 5, 6, and 11 of the Policy as reinforcing her
    conclusion that Grenvilles subrogated claim could not succeed, on the basis
    that Francois Rochon was an insured and an insurer cannot sue its own insured.
    These conditions, which required Francois Rochon to assist Grenville in
    investigating the incident and to take reasonable steps to recover lost
    property, were contrary to Francois Rochons interest if Grenville, his own
    insurer, could sue him under the Policy. At para. 61, the trial judge put it as
    follows: The only way these contractual requirements make sense is that [they]
    relate to the conditions required of the insurers own insured on the [P]olicy
    to recover losses from
third persons, not their own
    insured
 (emphasis added).

[23]

On
    the basis of this analysis, the trial judge dismissed Grenvilles subrogated
    claim for $148,581.65.

[24]

The
    trial judge granted judgment in favour of Paulette and Marcel Rochon for $8,000
     the amount of their loss that was not covered by insurance  based on the
    trial judges conclusion that Francois Rochons negligence caused the fire.

ANALYSIS

The Standard of Review

[25]

In
Creston Moly Corp. v. Sattva Capital Corp
., 2014 SCC 53, [2014] 2
    S.C.R. 633, at paras. 50-55, the Supreme Court of Canada held that absent an
    extricable error of law, the standard of review on matters of contractual
    interpretation is reasonableness. Although a correctness standard is
    appropriate when an extricable error of law is identified, such circumstances
    will be rare:
Sattva
, at para. 55.

[26]

The
    Alberta Court of Appeal has held that this general approach does not apply to certain
    standard form contracts. In
Vallieres v. Vozniak
, 2014 ABCA 290, 377
    D.L.R. (4th) 80 and
Ledcor Construction Ltd. v. Northbridge Indemnity
    Insurance Co.
, 2015 ABCA 121, 386 D.L.R. (4th) 482, leave to appeal
    granted, 36452 (September 24, 2015), the Alberta Court of Appeal applied a
    correctness standard to the interpretation of a standard form real estate
    contract and a standard form insurance policy respectively: see also
Precision
    Plating Ltd. v. Axa Pacific Insurance Co.
, 2015 BCCA 277, 387 D.L.R. (4th)
    281.

[27]

I
    do not find it necessary to express a view on this issue as I see no reason to
    interfere with the trial judges interpretation of the Policy whether it is
    reviewed on a correctness or deferential standard.

1.

Did the trial judge err in concluding that Francois Rochon was an
    insured under the Policy for the purposes of the claim?

[28]

Grenville
    takes the position that Francois Rochon was not an insured under Section 1 of
    the Policy, the section that responded to the claim.

[29]

I
    do not agree. For the following reasons, I am of the view that the language of
    the Policy is clear and that the trial judge properly gave effect to it.

(a)

Francois Rochon is an Unnamed Insured under Section 1

[30]

As
    noted above, the parties agreed that Francois Rochon is an unnamed insured
    under the Policy, which does not define insured. Instead, the definition of
    you and your on page 1-1 expressly applies to Sections 1, 2, 3 and 4.

[31]

In
    Section 2, the terms are again defined:
You or
    your
in this Section have the same meaning as in the Definitions
    applicable to Sections 1, 2, 3 and 4 on page 1.
In
    addition, the following persons are insured
 (emphasis added). On its
    face, this definition means that all persons listed in the definition of you
    and your in Section 2 of the Policy are insured, [i]n addition to the
    parties listed on page 1, who are also insured. In this way, the definition
    in Section 2 supports the trial judges interpretation.

[32]

I
    agree with the trial judges finding that the Policy unambiguously defined Francois
    Rochon as an insured under Section 1. He fell under the definition of you and
    your, which applies to all sections of the Policy.

[33]

My
    conclusion on this issue renders
Morawietz
inapplicable insofar as
    Grenville relies on it to support its argument that it is entitled to subrogate
    against an unnamed insured under the same policy. As previously mentioned, this
    courts conclusion in that case depended on the finding that the son was not an
    insured under the section of the insurance policy that responded to the claim.

(b)

Inconsistent Use of You and Your

[34]

The
    relevant portion of Section 1 reads as follows:

[W]e insure
your
dwelling,
    detached private structures, and
your
personal
    property against direct loss or damage caused by the following perils as
    described and limited:

1.       FIRE or LIGHTING. [Emphasis
    added.]

[35]

Grenville
    submits that the inconsistent use of the words you and your throughout the
    Policy suggests that it cannot be safely assumed that the words you and
    your have their defined, extended meaning, wherever they appear in the
    Policy.

[36]

According
    to Grenville, in Section 1 your means the person making the claim. Francois
    Rochon was not an insured under Section 1 because he made no claim. He suffered
    no loss.

[37]

I
    would not give effect to this argument.

[38]

I
    start by referring to the decision of the British Columbia Court of Appeal in
Riordan
    v. Lombard Insurance Co.
, 2003 BCCA 267, 13 B.C.L.R. (4th) 335. In that
    case, the Court concluded that since the son of the named insured fell within
    the definition of you and your, he was an insured whose intentional and
    criminal acts were unambiguously covered by the exclusion clause.

[39]

I
    note that the Court reached that conclusion notwithstanding you and your
    were sometimes used inconsistently in the policy; the meaning of insured within
    the exclusion clause was clear.

[40]

I
    have similarly concluded that, here, the definition of you and your and its
    applicability to Section 1 is unambiguous. It is also clear that in Section 1,
    your is not confined to persons making the claim, but refers to unnamed
    resident insured.

[41]

However,
    even if I were to hold otherwise, I would not give effect to Grenvilles
    position on this issue. I say this based on the well-established law concerning
    the interpretation of insurance contracts.

[42]

In
Non-Marine
    Underwriters, Lloyd's of London v. Scalera
, 2000 SCC 24,

[2000] 1
    S.C.R. 551, the Supreme Court performed a comprehensive review of the general
    principles of interpreting insurance contracts. At para. 70, Iacobucci J.
    considered the existence of ambiguities in insurance contracts, which are
    essentially adhesionary:

[T]he standard practice is to construe ambiguities against the
    insurer. A corollary of this principle is that "coverage provisions should
    be construed broadly and exclusion clauses narrowly". Therefore one must
    always be alert to the unequal bargaining power at work in insurance contracts,
    and interpret such policies accordingly. [Citations omitted.]

[43]

Following
Scalera
, the definition of you and your must be interpreted broadly
    and any ambiguity must be construed against Grenville.

[44]

If
    Grenville wished, in these circumstances, to preclude coverage of Francois
    Rochon  someone who expressly fell within the definition of you and your
    in its own Policy  it was incumbent on Grenville to clearly so provide in the
    wording of its contract of insurance.

(c)

Privity Argument

[45]

Grenville
    further submits that because the definition of you and your provides that
    only named insured can take legal action against it, Francois Rochon lacks
    privity of contract with Grenville and therefore has no independent rights
    under the Policy. However, Grenville cites no authority for this proposition.

[46]

In
    fact, there is authority to the contrary. I rely again on the decision in
Riordan
.
    In response to the same privity argument advanced in this case, the Court said,
    at para. 16, that not being able to take legal action against the insurer does
    notmake [the son] any less an insured as a person in his situation as defined
    in you and your in the policy.

[47]

I
    agree with this reasoning and thus reject Grenvilles privity argument.

(d)

Conclusion Regarding Issue 1

[48]

I
    see no reason to interfere with the trial judges finding that Francois Rochon was
    an unnamed insured under Section 1 of the Policy  the section that responded
    to the claim in issue.

2.

Did the trial judge err in finding that Francois Rochon had an insurable
    interest in the loss?

[49]

Grenville
    submits that the trial judge erred in stretching the rationale of the Supreme
    Court in
Kosmopoulos v. Constitution Insurance Co. of Canada
, [1987] 1
    S.C.R. 2, and in applying
Scott
, to find that Francois Rochon had an
    insurable interest in the garage.

[50]

According
    to Grenville, his interest was separate from his parents and limited to the
    value of his personal property, because he did not rely on the garage as a
    source of accommodation and support. He cannot derive an insurable interest
    simply through his use and enjoyment of the garage.

(a)

The Insurable Interest Requirement

[51]

Essential
    to the disposition of this appeal is the determination of whether Francois
    Rochon had an insurable interest in the property, a requirement for recovery
    under an insurance policy:
Zurich Insurance Co. v. Ison T.H. Auto Sales
    Inc.
, 2011 ONSC 1870, 106 O.R. (3d) 201, at para. 28, affd 2011 ONCA 663,
    342 D.L.R. (4th) 501.

[52]

Absent
    an insurable interest in the subject-matter of the insurance, an insurance contract
    is not legally enforceable: Barbara Billingsley,
General Principles of
    Canadian Insurance Law
, 2d ed. (Markham: LexisNexis Canada Inc.
,
2014),
    at p. 35.

[53]

There
    are three reasons for mandating an insurable interest in property: (1) the
    policy against wagering; (2) the principle of indemnity (i.e. that the insured
    should not profit upon a loss occurring); and (3) the policy of preventing the
    insured from being tempted to intentionally destroy the insured property:
Kosmopoulos
,

at p. 22; see also

Billingsley, at p. 36.

The Supreme Courts Decision in
Kosmopoulos

[54]

In
Kosmopoulos
,

the Supreme Court defined the concept of
    insurable interest in terms of the factual expectancy test. At p. 30, Wilson
    J. borrowed the words of Lawrence J. in
Lucena v. Craufurd
(1806), 127
    E.R. 630 (H.L.), at p. 643: To have a moral certainty of advantage or
    benefit, but for those risks or dangers, or to be so circumstanced with
    respect to [the subject matter of the insurance] as to have benefit from its
    existence, prejudice from its destruction is to have an insurable interest in
    it.

[55]

Thus,
    an insurable interest exists if, apart from the insurance contract itself, the
    insured would benefit or suffer from the continued existence or destruction of
    the subject-matter of insurance or from the occurrence of the insured-against
    risk: Billingsley, at p. 36.

[56]

This
    takes me to the second basis upon which Grenville relies on
Morawietz
 to support its position that Francois Rochon did not have an insurable
    interest in the loss. In my view, it is clear that, to the extent that this
    court may have held in
Morawietz
that an insurable interest requires
    legal ownership, this position has been overtaken by the factual expectancy
    test articulated in
Kosmopoulos
: see also
Scott
.

[57]

Kosmopoulos
established that courts must determine the existence of an insurable interest on
    a case-by-case basis.  The test is a flexible one based on the the actual
    relationship between a particular individual and the item or risk insured
    rather than on the basis of a predetermined indicator, such as legal title: Billingsley,
    at p. 40.

The Supreme Courts Decision in
Scott

[58]

In
Scott
, the Supreme Court applied the factual expectancy test from
Kosmopoulos
and concluded that an insurable interest in a residence can exist absent
    legal ownership. The Scotts residence sustained damage from a fire
    deliberately set by their 15-year-old son.

[59]

Under
    their policy, insured included named insured and any household resident under
    the age of 21 in the care of the insured, among others. However, an exclusion
    clause excluded loss or damage caused by a criminal or wilful act or omission
    of the insured or of any person whose property was insured under the policy.

[60]

The
    majority of the Supreme Court of Canada upheld the insurers denial of coverage.
      The key passage is found at p. 1467:

[E]ven if we were to accept the more narrow definition it
    would be impossible to say that the insurable interest of the infantwas
    limited to his personal possessions. He had a direct relationship to the family
    home and its contents, since they were his source of accommodation and support.
    To apply the analysis in
Kosmopo[ulos]
, [the son] had occupation, use
    and enjoyment of the family home. He received a benefit from its existence. As
    a dependent living in that home, he suffered a direct prejudice when it was
    destroyed by fire. The interests of parent and child in this case"are
    inseparably connected so that a loss or gain necessarily affects them both, the
    misconduct of one is sufficient to contaminate the whole insurance".
    [Citation omitted.]

(b)

Francois Rochons Insurable Interest

[61]

On
    this record, I see two areas in which Francois Rochon had an insurable interest
    in the loss.

[62]

The
    first is mentioned in Coverage C under Section 1 of the Policy, which states:
    We insure the contents of your dwelling and any other personal property you
    own, wear or use while on your premises which is usual to the ownership or
    maintenance of a dwelling. The trial judge found as a fact that Francois
    Rochon had contents and tools on the premises and therefore that he had an
    insurable interest in the loss.

[63]

Second,
Scott
shows that the rights and interests of parents and their children
    are highly interrelated when they are living together. A loss or gain in relation
    to the property necessarily affects them both.

[64]

Applying
    the analysis in
Kosmopoulos
here, as in
Scott
, Francois
    Rochon had an insurable interest in the garage.  As a dependent living with his
    parents, Francois Rochons interests are inseparably connected to those of
    his parents. Simply put, the garage formed a part of the residence that he
    enjoyed with his parents. Francois Rochon received a benefit from the family
    garage and its contents, and suffered direct prejudice when it was destroyed
    by fire. Francois Rochon had an insurable interest in the loss.

Applicability of the Supreme
    Courts Decision in
Scott

[65]

Grenville
    contends that the trial judge erred in her application of
Scott
to the
    facts of this case. The policy reasons at play in
Scott
(i.e. preventing
    collusion between insured with a common interest in collecting under a
    homeowners policy) are not relevant in a contest between two insurers.

[66]

I
    disagree.  In my view, the factual expectancy test applies with equal force
    here.

[67]

In
Scott
, the Supreme Courts application of the factual expectancy test is
    not tied to any specific policy rationale as Grenville suggests. While the
    Court may have allowed subrogation, in part, to avoid the moral hazard of
    children and parents conspiring to collect insurance proceeds, as can be seen
    from the passage in
Scott
set out above, the Courts analysis is expressly
    based on the nature of the relationship between children, their parents, and
    their shared residence.

[68]

I
    find
Scott
to be dispositive of the issue whether Francois Rochon had
    an insurable interest in the loss.

(c)

Conclusion Regarding Issue 2

[69]

I
    would therefore not give effect to Grenvilles argument that the trial judge
    erred in concluding that Francois Rochon had an insurable interest in the
    loss.

3.

Did the trial judge err in not giving effect to the policy argument for
    allowing subrogation in the circumstances of this case?

[70]

Grenville
    contends that the rule against an insurer suing its own insured under the same
    policy, no matter how negligent they were in causing the loss, should not apply
    to a dispute between two insurers. There is nothing improper, unfair, or
    contrary to public policy when a home insurer subrogates against an automobile
    insurer for damages arising from the use or operation of a motor vehicle.

[71]

I
    would not give effect to Grenvilles policy argument.

(a)

Policy Reasons for not Allowing Subrogation

[72]

There
    are powerful policy reasons working against Grenvilles position.

[73]

I
    start with the fundamental notion that insurers should not be permitted to
    subrogate against their own insured:
Commonwealth Construction Co. Ltd. v. Imperial
    Oil Ltd. et al.
, [1978] 1 S.C.R. 317. The fact that an insured may have
    other insurance is, in my view, irrelevant. A suit by an insurer against its
    own insured does not fulfil the aims of subrogation, which is to avoid
    overpayment of the insured:
Statesman
,

at paras. 26-28.

[74]

Further,
    subrogation against an insured should be barred because the insurer has
    contracted to take onto itself the very risk at issue, thereby taking it away
    from the insured:
Statesman
,

at para. 49
.

(b)

Conditions 5, 6, and 11

[75]

Finally,
    in terms of the policy supporting the decision that Grenvilles subrogation
    action must fail, I agree with the trial judge that Conditions 5, 6, and 11 would
    be contrary to Francois Rochons interest if his own insurer could sue him
    under the Policy. At para. 61 of her reasons, the trial judge noted the
    following:

[These] conditionsrequired the insured, [Francois Rochon], to
    take reasonable steps to recover lost property, transfer his right against
    others to the insurer Grenville and to submit to an examination under oath and
    produce all documentation in his possession at Grenville's request. In
    accordance with this contractual requirement, [Francois Rochon] was required to
    speak to Grenville's adjuster and provide a statement, which he did, to assist
    Grenville in recovering the loss.

(c)

Conclusion Regarding Issue 3

[76]

All
    said, there are several cogent policy reasons for dismissing Grenvilles
    subrogation claim against Economical.

CONCLUSION

[77]

In
    my view, the trial judge correctly held that Grenville could not subrogate
    against its own insured, Francois Rochon.

DISPOSITION

[78]

For
    these reasons, I would dismiss the appeal.  In accordance with the parties agreement,
    I would award costs in favour of Economical in the amount of $10,000, including
    disbursements and applicable taxes.

Released: November 6, 2015 (GP)

Gloria
    Epstein J.A.

I
    agree Janet Simmons J.A.

I
    agree G. Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Roffey v. Hunter Corporation, 2015 ONCA 824

DATE: 20151130

DOCKET: C60452

Strathy C.J.O., LaForme and Huscroft JJ.A.

BETWEEN

Lucas
    Roffey, TD Waterhouse Canada Trust Inc.
in trust for RRSP #
    46HM13S, TD Waterhouse Canada Trust Inc.
in
    trust for RRSP # 5557000S, Alan Roffey

Plaintiffs (Respondents)

and

Hunter
    Corporation, Hunter Promenade Corporation,

1355394 Ontario Inc., Richard K. Watson

Defendants (
Appellants
)

Michael Simaan, for the appellants, 1355394 Ontario Inc.
    and Richard K. Watson

D. Gordon Bent, for the respondents

Heard: November 24, 2015

On appeal from the order of Justice Bruce A. Glass of the
    Superior Court of Justice, dated April 21, 2015.

ENDORSEMENT

[1]

The motion judge granted the respondents motion and struck the
    appellants defence. He provided only the following reason: Def. Watson has not
    filed material as directed by order of OConnell J. on Feb 19/15.

[2]

The appellants make three submissions on
    appeal. First, they argue that the motion judge ought to have provided them with
    a chance to cure the default. Second, they contend that the motion judge failed
    to consider the proportionality of the remedy and the merits of the defence.
    And third, that because the response to undertakings was only 35 days late, it
    was unreasonable to strike the defence.

[3]

We reject each of the appellants
    submissions.

[4]

The first observation we make is that the appellants did not file
    responding materials on the motion
to explain or
    excuse their failure to produce the answers and documents ordered to be
    delivered
. Thus, there was no evidence before the motion judge to
    provide any explanation for the failure to satisfy the undertakings and no
    evidence that they had any defence to the action.

[5]

Indeed, on appeal, the appellants still do not explain what their
    argument would have been to the striking of the defence or why they were unable
    to comply with the order that led to the order to strike their defence. Moreover,
    they do not explain why they were and have been unable to satisfy their
    undertakings. In addition, they do not claim to have satisfied any more of
    their long overdue undertakings, nor that they will do so promptly if the
    appeal is allowed.

[6]

The appellants had an opportunity to cure this default. They were served
    with a notice of motion for contempt and failed to appear on the return date.
    The motion was adjourned and they had time in the interim to comply with the
    order or to explain their default. They did neither.

[7]

The motion judge could not have considered the merits of the appellants
    defence because they put no evidence before him. As to proportionality and the
    duration of the delay, the motion judge was in a position to consider the
    relief sought in the context of the entire litigation. That context included
    lengthy delays and conduct of the appellants that could be regarded as both
    dilatory and deliberately obstructionist. It also included the fact that the
    order at issue was made on consent and the appellant Watson was a solicitor.

[8]

The brevity of the motion judges reasons does not cause us any concern.
A failure to specifically refer to the factors
    to be considered in striking a pleading may be excused if the record supports
    the decision
:
Diamond Auto Collision Inc. v. Economical Insurance
    Group
,
2007 ONCA 487. Here, the
    order to strike the defence was an obvious result, given all the circumstances.
    The appellants answers to undertakings were long overdue and breached multiple
    court orders.

[9]

The motion judges order to strike the defence was discretionary. Absent
    clear error, it is entitled to significant deference from this court:
Diami
    Inc. v. Papadakos
, 2012 ONCA 879. The appellants have failed to convince
    us that any such error was committed. The appeal is dismissed.

[10]

The
    respondents are awarded costs of the appeal in the amount of $9,600 inclusive
    of disbursements and HST.

G.R. Strathy C.J.O.

H.S.
    LaForme J.A.

"Grant
    Huscroft J.A."


COURT OF APPEAL FOR ONTARIO

CITATION: Santos v. Sangwan, 2015 ONCA 822

DATE: 20151127

DOCKET: C60541

Laskin, Pardu and Roberts JJ.A.

BETWEEN

John Louis Santos

Applicant (Appellant)

and

Paramjit Sangwan and Print 911 Inc.

Respondents (Respondents)

Evan Moore, for the appellant

Harinder Dhaliwal and Harpreet Makkar, for the
    respondents

Heard and released orally: November 23, 2015

On appeal from the order of Justice David Price of the Superior
    Court of Justice, dated April 29, 2015.

ENDORSEMENT

[1]

The appellant Santos appeals the dismissal of his application. Santos
    sold his print services business to the respondent Sangwan for $250,000. The
    purchase price was payable over time and secured by a promissory note. Sangwan
    made some of the payments but then refused to pay the balance owing of $94,600.
    Santos then brought an application under rule 14.05 for judgment on the promissory
    note. Both parties filed affidavits. Neither was cross-examined.

[2]

The documents filed on the application show that in an email Santos had
    misstated the value of the equipment he owned. The email said the equipment was
    worth $100,000. The $100,000 figure assumed Santos owned a particular Xerox
    machine, said in a separate document to be worth $25,000. The machine was
    actually owned by Xerox.

[3]

During the hearing of the application, the application judge commented
    that whether Santos had fraudulently misrepresented the value of the equipment
    was a live issue. Counsel for Santos then urged the application judge to hear
    evidence on whether there had been a fraudulent misrepresentation. The
    application judge declined to do so. Instead he found:

I find that Mr. Santos made a fraudulent misrepresentation
    regarding the value of the equipment owned by the business and that this
    misrepresentation was material to Mr. Sangwans entering into the share
    purchase agreement.

[4]

On appeal Santos submits that the application judge misapplied the test
    for fraudulent misrepresentation and made palpable and overriding errors of
    fact that tainted his analysis. We generally agree with Santos submissions.
    Accepting that Santos misstated the value of the equipment, the evidence falls
    short of showing that the misstatement was made recklessly or that it induced
    Sangwan to enter into the agreement. Notably, the email containing the alleged
    fraudulent misrepresentation was sent a week after the parties agreed on a
    $250,000 purchase price.

[5]

For these reasons we think that the application judge erred in
    dismissing the application. On the other hand, it would be unfair simply to
    grant Santos judgment on his promissory note. In our view, the fair and just
    remedy is to make an order under rule 38.10 that the application proceed to
    trial. Santos should deliver a statement of claim and Sangwan may deliver a
    statement of defence and counterclaim.

[6]

For these brief reasons the appeal is allowed and a trial is ordered. In
    our view, this is a case for no costs either of the application or of the
    appeal. This was a matter that called out for a trial in the light of the
    numerous factual disputes between the parties.

John
    Laskin J.A.

G.
    Pardu J.A.

L.B.
    Roberts J.A.