COURT OF APPEAL FOR ONTARIO

CITATION: 1588444 Ontario Ltd. v. State Farm Fire and
    Casualty Company, 2017 ONCA 42

DATE: 20170118

DOCKET: C61277

Laskin, Feldman and Hourigan JJ.A.

BETWEEN

1588444 Ontario Ltd. dba Alfredos and Vincenzo Spartaco

Plaintiffs (Respondents)

and

State Farm Fire and Casualty Company

Defendant (Appellant)

Thomas J. Donnelly, for the appellant

Gordon A. Marsden and Adam D. Romain, for the
    respondents

Heard: September 9, 2016

On appeal from the order of Justice H.K. OConnell of the
    Superior Court of Justice, dated October 16, 2015.

Hourigan J.A.:

Introduction

[1]

During the late evening hours of June 4, 2006 a restaurant and banquet
    facility operated by the corporate respondent was destroyed by fire. The cause
    of the fire was arson. The premises were insured under a policy issued by the
    appellant.

[2]

Approximately one year later, the respondents sued the appellant,
    seeking indemnification pursuant to the insurance policy it had issued to the
    corporate respondent. The appellant defended the action on the basis that the
    respondents had failed to cooperate with the investigation of the fire and
    failed to produce relevant documentation.

[3]

In January 2015 the appellant brought a motion to amend its statement of
    defence. The effect of the proposed amendments was to abandon the defence of
    non-cooperation and assert a defence that the fire was set by or at the
    direction of the respondents.

[4]

The motion judge dismissed the motion and ordered substantial indemnity
    costs against the appellant. Both parts of that order are appealed.

[5]

For the reasons that follow, I would dismiss the appeal of the order
    refusing leave to amend the statement of defence and would allow the appeal of
    the costs award.

Background

[6]

On June 9, 2006 approximately four days after the fire, a representative
    of the appellant wrote to the corporate respondent stating as follows:

There is a question as to whether the cause and origin of the
    loss was accidental in nature from the standpoint of the insured.

Section I Losses Insured And Losses
    Not Insured

Losses
    Not Insured

21.  dishonest or criminal act occurring at any
    time by you, any of your partners, employees, directors, trustees, authorized
    representatives or anyone to whom, you entrust the property for any purpose
    whether acting alone or in collusion with others.
[Emphasis in original.]

For this reason and for other reasons which may become
    known, you are hereby notified that any action taken by State Farm Fire &
    Casualty Company or its authorized representative to investigate
the cause of the loss, determine the amount of loss
    or damage, or attempt to adjust any claim arising out of the alleged loss shall
    not waive any of the terms or conditions of the policy of insurance described
    above, nor shall such action waive any of your rights under the policy
.

[7]

The same day the individual respondent, Vincenzo Spartaco, the directing
    mind of the corporate respondent, executed a Request for Claim Service and
    Non-Waiver of Rights form, wherein he acknowledged that the appellant might not
    have an obligation to indemnify its insured for claims arising out of the fire.
    Mr. Spartaco also authorized the appellant to, among other things,
    investigate the cause of the fire.

[8]

As part of the appellants investigation of the fire, Mr. Spartaco
    attended at both an interview and an examination under oath. He also signed an
    authorization agreeing to the release of relevant documents to the appellant.

[9]

The appellant retained an engineer to investigate the cause of the fire,
    who concluded that the fire was deliberately set. This was the same conclusion
    reached by the Barrie Police Force and the Office of the Fire Marshall.

[10]

In their statement of claim issued on June 4, 2007 the respondents
    alleged that the appellant wrongfully and unreasonably denied payment under the
    insurance policy.

[11]

The appellant served a statement of defence dated September 14, 2007
    wherein it admitted that the policy provides for coverage for damage caused by
    fire and pleaded that the fire was intentionally set and incendiary in
    nature. The appellant did not take the position in its pleading that the
    respondents, or anyone on their behalf, set the fire. The appellant did plead
    that the respondents had failed to provide sufficient, or any, supporting
    damage documentation and have failed to cooperate in the defendants
    investigation as to the cause of the loss and the quantum of the damages.

[12]

After the close of pleadings, there was delay in conducting the
    examinations for discovery. The source of this delay was twofold. First, Mr. Spartaco
    was out of the country and unable to attend for several months. Second, the
    action was administratively dismissed in December 2009 and the parties took almost
    a year to agree to a consent to set aside the dismissal.

[13]

Discoveries of all parties took place in May 2011. The appellant conceded
    during the discoveries that its only basis for not paying under the policy was
    the respondents non-cooperation and that it was not taking the position that
    the respondents were responsible for setting the fire. Despite this concession,
    during the appellants examination of Mr. Spartaco, it attempted to ask
    questions of him in support of an allegation that he had intentionally set the
    fire. Those questions were refused.

[14]

The appellant brought a motion before Mullins J. to compel Mr. Spartaco
    to answer questions regarding his alleged involvement in the fire. Mullins J.
    denied that portion of the motion on the grounds that the appellant had not
    pleaded that Mr. Spartaco was responsible for setting the fire.

[15]

In a letter dated September 13, 2013 counsel for the appellant provided
    answers to outstanding undertakings. In that letter, counsel confirmed that the
    appellant was in receipt of all necessary documentation and was not waiting to
    receive any further information from the respondents. Further, counsel advised
    that the appellant was not aware of any failure on the part of the respondents to
    comply with the terms of the insurance policy.

[16]

Given these concessions, counsel for the respondents concluded that
    there was no genuine issue requiring a trial regarding the appellant
    indemnifying under the insurance policy, and that the only remaining issue was
    the quantification of damages. On March 20, 2014 counsel for the respondents
    wrote to counsel for the appellant advising him of the respondents position and
    sought dates for a motion for summary judgment. On December 9, 2014 the
    respondents served their motion for summary judgment returnable December 19,
    2014.

[17]

During a court appearance on December 19, 2014 to schedule the summary
    judgment motion, the appellants counsel advised for the first time that his
    client would be bringing a motion seeking leave to amend the statement of defence.
    Counsel for the appellant eventually served motion materials, which included a
    proposed amended statement of defence. In that new pleading the appellant
    withdrew the allegations of non-cooperation and pleaded instead that coverage
    was being denied on the basis that the respondents had committed arson.

Motion Judges Reasons

[18]

The motion for leave to amend the statement of defence was heard on May
    21, 2015. On October 16, 2015 the motion judge released an endorsement, which
    provided:

Having reviewed the record, the submissions of counsel, and the
    law underpinning Rule 26 motions, this endorsement, to be followed by complete reasons,
    is to alert counsel that the motion is denied.

[19]

In response to this endorsement, the appellant commenced its appeal to
    this court, asserting as its primary ground of appeal that the motion judge had
    failed to provide sufficient reasons.

[20]

On February 12, 2016 after this appeal was perfected, the motion judge
    released his reasons in support of his order dismissing the motion. He found
    that the respondents would suffer actual and presumed non-compensable prejudice
    if leave to amend were granted.

[21]

With respect to actual prejudice, the motion judge found that the
    proposed amendments would have the effect of restarting the litigation process.
    He concluded that the respondents had lost the ability to marshal evidence to
    counter a claim of arson.

[22]

With respect to presumed prejudice, the motion judge found, at para.
    135, that prejudice is presumed given the failure of the Defendant to
    demonstrate that there is no prejudice occasioned by the delay. He also
    concluded that the appellant had failed to provide a reasonable excuse to
    explain its delay.

[23]

The motion judge released a costs endorsement dated April 15, 2016 in
    which he awarded costs to the respondents in the total amount of $40,000. In so
    ruling, the motion judge concluded that that there was unreasonableness
    exhibited by the appellant in the manner in which it conducted the litigation.
    As a consequence of this finding and the motion judges view that this motion
    was more complicated than the average motion to amend, the motion judge found
    that costs higher than partial indemnity are required.

Analysis

1.       Motion to Amend

(a) Legal Principles

[24]

Motions for leave to amend a pleading are governed by r. 26.01, which
    provides:

On motion at any stage of an action the court shall
    grant leave to amend a pleading on such terms as are just, unless prejudice
    would result that could not be compensated for by costs or an
    adjournment.

[25]

The law regarding leave to amend motions is well developed and the
    general principles may be summarized as follows:

·

The rule
requires
the court to grant leave to amend
    unless the responding party would suffer non-compensable prejudice; the amended
    pleadings are scandalous, frivolous, vexatious or an abuse of the courts
    process; or the pleading discloses no reasonable cause of action:
Iroquois
    Falls Power Corp. v. Jacob Canada Inc.
,
    2009 ONCA 517,
75 C.C.L.I. (4th) 1, at paras. 15-16, leave to
    appeal to SCC refused, 2010 CarswellOnt 425, and
Andersen Consulting  v.
    Canada (Attorney Genera
l)
(2001), 150 O.A.C. 177 (C.A.), at para.
    37.

·

The amendment may be permitted at any stage of the action:
Whiten
    v. Pilot Insurance Co.
(1996), 27 O.R. (3d) 479 (Gen. Div.), revd on
    other grounds (1999), 42 O.R. (3d) 641 (C.A.), affd 2002 SCC 18, [2002] 1
    S.C.R. 595.

·

There must be a causal connection between the non-compensable
    prejudice and the amendment. In other words, the prejudice must flow from the
    amendments and not from some other source:
Iroquois
,
at paras. 20-21, and
Mazzuca
v.
Silvercreek Pharmacy Ltd
. (2001), 56 O.R. (3d) 768 (C.A.), at para.
    65.

·

The non-compensable prejudice may be actual prejudice, i.e.
    evidence that the responding party has lost an opportunity in the litigation
    that cannot be compensated as a consequence of the amendment. Where such
    prejudice is alleged, specific details must be provided:
Kings Gate
    Developments Inc. v. Drake
(1994), 17 O.R. (3d) 841 (C.A.), at paras. 5-7,
    and
Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co.
(1995),
    25 O.R. (3d) 106 (Gen. Div.), at para. 9.

·

Non-compensable prejudice does not include prejudice resulting
    from the potential success of the plea or the fact that the amended plea may
    increase the length or complexity of the trial:
Hanlan v. Sernesky
(1996), 95 O.A.C. 297 (C.A.), at para. 2, and
Andersen Consulting
, at
    paras. 36-37.

·

At some point the delay in seeking an amendment will be so lengthy
    and the justification so inadequate, that prejudice to the responding party
    will be presumed:
Family Delicatessen Ltd. v. London (City)
,

2006 CanLII 5135 (Ont. C.A.), at para.
    6.

·

The onus to prove actual prejudice lies with the responding party
:
    Haikola v. Arasenau
(1996), 27 O.R. (3d) 576 (C.A.), at paras. 3-4, and
Plante
    v. Industrial Alliance Life Insurance Co.
(2003), 66 O.R. (3d) 74 (Master),
    at para. 21.

·

The onus to rebut presumed prejudice lies with the moving party:
Family
    Delicatessen
,

at para. 6.

[26]

Bearing in mind these principles, I turn to a consideration of the actual
    and presumed prejudice in the present case.

(b) Actual Prejudice

[27]

On the motion, the respondents filed an affidavit sworn by Adam Romain,
    a lawyer acting for them in this litigation. In that affidavit, Mr. Romain
    testified to the prejudice that his clients would suffer as a consequence of
    the amendments to the statement of defence.

[28]

Mr. Romain swears that the delay in making the allegation of arson
    against the respondents has deprived them of the opportunity to fully
    investigate the fire and attempt to ascertain the identity of the potential
    suspects. In furtherance of that position, he testified that among other
    things, the respondents have lost the opportunity to interview potential
    suspects and review their personal records, canvass the neighbourhood for video
    evidence, and conduct forensic analysis of a broken window at the premises and
    of Mr. Spartacos clothing.

[29]

Mr. Romain does not state that any specific witnesses are no longer
    available. Rather, he says that interviews of available witnesses will be
    hindered by the inevitably faded memories.

[30]

In my view, the respondents have not met their onus of proving actual
    prejudice, and the motion judge made a palpable and overriding error of mixed
    fact and law in concluding otherwise.

[31]

To meet their onus, the respondents were obliged to adduce specific
    evidence of actual prejudice. For example, such evidence could include details
    of witnesses who were available previously but are no longer available. Noting
    that witnesses memories may have faded is really just a generalized
    description of presumed prejudice. Such evidence lacks the required degree of specificity
    to qualify as evidence of actual prejudice.

[32]

I agree with the observation of William J. Poulos in his article
Prejudice:
    Taking a Hard Look at the Merits
(1999),
    22 C.P.C. (4th) 366, at p. 379,
that when it comes to alleging
    actual prejudice in response to a motion to amend:

The specific allegation of prejudice should be detailed in
    sufficient particularity in evidence to allow the opposing party to respond to
    the allegation and to allow the court to take a hard look at the merits of the
    allegation.

[33]

To the extent that there is evidence of specific prejudice in Mr.
    Romains affidavit, e.g. the loss of opportunity to conduct a forensic analysis
    of the scene, I agree with the submission of the appellant that the motion
    judge made a palpable and overriding error of mixed fact and law in failing to
    find that the prejudice does not flow from the proposed amendments.

[34]

It is clear that the respondents were put on notice within days of the
    fire that there was a possibility that the appellant would deny coverage on the
    basis that Mr. Spartaco set the fire. That potential was certainly alive during
    the course of the approximately fifteen months between the date of the fire and
    the service of the statement of defence. Given the warning they received, had
    the respondents wished to protect themselves from an allegation that they were
    responsible for the fire, they could have taken steps to conduct forensic
    investigations. To the extent that they chose not to do so, that was a
    deliberate choice on their part, wholly unconnected to the appellants delay in
    moving to amend the statement of defence. Thus the necessary nexus between the
    delay and the prejudice has not been established.

[35]

To be clear, in reaching this conclusion I am not suggesting that an
    insured in a fire claim is obliged to conduct its own investigation of the
    cause of the fire. However, where an insured is put on notice that a claim may
    be denied on the basis that the arson was caused by the insured and chooses not
    to investigate, the insured cannot later rely on its failure to investigate as
    an example of actual prejudice. This is because the decision not to investigate
    is wholly unrelated to the delay by the insurer.

(c) Presumed Prejudice

[36]

The seminal case in Ontario considering the concept of presumed
    prejudice in the context of a r. 26.01 motion is the
Family Delicatessen
decision. In that case, this court observed that at a certain point after an exceptional
    delay, non-compensable prejudice will be presumed absent evidence to the
    contrary. In other words, after inordinate delay, the presumption in favour of
    granting leave shifts to a presumption that non-compensable prejudice will
    result if leave is granted. This makes sense as a matter of fairness. It would
    be very difficult for a responding party to prove, for example, the generalized
    prejudice that
witnesses memories will be
    diminished after a lengthy passage of time.

[37]

The presumption of prejudice is rebuttable. Where the moving party
    provides an adequate explanation for the delay or tenders evidence that there
    is no non-compensable prejudice, the presumption will be rebutted.

[38]

The court in
Family Delicatessen
did not elaborate on when the
    shift in onus takes place, i.e. the point at which the delay will be so lengthy
    that prejudice will be presumed. It also did not explain what evidence would
    need to be led by the moving party to rebut the onus.

[39]

The Divisional Court elaborated on the concept of presumed prejudice in
Ontario
    (Securities Commission) v. McLaughlin,
2009 CarswellOnt 2694 (Div. Ct.).
    There the court stated, at para. 6, that to rebut the presumption of prejudice,
    a moving party needs to provide some explanation of  the delay in seeking the
    amendments and the presence or absence of prejudice to the opposite party and
    the need to show a nexus between the proposed amendments and the facts or
    evidence said to be recently discovered.

[40]

The respondents submit that the
OSC
case provides a framework
    to determine whether the presumption has been rebutted. They urge the court to
    adopt a three part test that the moving party must satisfy as follows: (i) an
    explanation for the delay; (ii) the absence of non-compensable prejudice to the
    responding party; and (iii) a nexus between newly discovered information and
    the proposed pleading. The respondents submit that unless a moving party can
    adduce compelling evidence on all three parts of the test, then they have not
    rebutted the presumption.

[41]

I would not adopt the rigid test urged upon us by the respondents. In my
    view, the Divisional Court in
OSC
did not purport to establish a
    stringent test for rebutting the presumption. Rather, they were simply
    referencing the types of evidence that might be adduced by a moving party to
    rebut the operation of the presumption.

[42]

In any event, such a rigid test is contrary to the fairness
    considerations that underlie the courts recognition of the concept of presumed
    prejudice in
Family Delicatessen
. It would be inequitable to require a
    moving party to satisfy all three parts of the proposed test in all cases. For
    example, if a moving party were able to establish that the responding party
    would suffer no non-compensable prejudice by reason of the amendment, then it
    would be an odd result if the presumption was not rebutted simply because an
    adequate explanation for the delay had not been established.

[43]

Turning to the facts of this case, I am not satisfied that the motion
    judge erred in finding that there was presumed non-compensable prejudice that
    has not been rebutted.

[44]

The motion to amend the claim was brought approximately nine years after
    the fire and eight years after the commencement of the litigation. While there
    is no hard and fast rule as to what qualifies as inordinate delay, I can see no
    error in the motion judges finding that there was sufficient delay in this
    case to trigger presumptive prejudice.

[45]

In my view, for the reasons that follow, the appellant did not meet its
    onus of rebutting the presumption of presumed prejudice.

[46]

The appellant did not adduce any evidence to establish that the
    respondents would not suffer prejudice by reason of the amendment. For example,
    the appellant did not show that through its own investigation it had retained
    key pieces of evidence or taken witness statements at a time closer to the
    fire, before the passage of time is presumed to have caused evidence to
    disappear and memories to fade. Nor did it explain how information discovered
    through the litigation process resulted in the proposed amendments.

[47]

What the appellant attempted to do was to explain its delay in moving to
    amend the statement of defence. It makes two arguments. First, it says that the
    respondents are responsible for much of the delay in the litigation by reason
    of the unavailability of Mr. Spartaco and the administrative dismissal of the
    action. It also submits that as a result of the decision in
Whiten
, it
    was put in an untenable position because if it alleged arson at the outset of
    the litigation it faced the potential of a punitive damages claim, and if it
    waited to assert the arson defence then it would face a prejudice argument.

[48]

While there was delay attributable to the respondents during the course
    of the litigation, much of the delay was the result of the appellant's
    insistence on examining Mr. Spartaco as if it had pleaded that the respondents
    were responsible for the fire. This led to the appellants unsuccessful
    refusals motion. Moreover, there is no explanation as to why, after that
    refusals motion, a motion was not brought to amend the statement of defence.

[49]

The
Whiten
argument is based upon a misapprehension of that
    case. The facts in that case are very different from the circumstances of the
    present case. In
Whiten
, the insurer persisted with an arson defence
even though the local fire chief, the respondents own expert
    investigator, and its initial expert all said there was no evidence of arson.

[50]

In the present case, all parties knew from the beginning that arson was
    the cause of the fire. The appellant pleaded that the respondents were not
    cooperating with its investigation of the fire. Given this plea and the fact
    that it was common ground that the fire was caused by arson, there was nothing
    stopping the appellant from pleading at the outset, or very early on in the
    litigation, that the respondents were responsible for the fire. It is perfectly
    appropriate to allege arson where there is positive evidence of the arson and
    the insured is not cooperating with the investigation of the fire.

[51]

Further, this is not a case where the appellant was cautious about
    pleading arson but later discovered information that supported the plea. The
    appellant has not pointed to any specific information obtained during the
    course of the litigation that it relies upon in support of its new defence.

2.       Costs Award Below

[52]

The motion judge awarded costs on a substantial indemnity basis on the
    ground that the appellant acted unreasonably in bringing its motion to amend.

[53]

In my view, there were not sufficient grounds to award costs on a
    substantial indemnity basis and the motion judge erred in making the award. The
    court must find that a party has engaged in egregious misconduct in a proceeding
    before a substantial indemnity costs award is justified:
Iannarella v.
    Corbett
, 2015 ONCA 110, 124 O.R. (3d) 523, at para. 139.

[54]

While the appellants conduct in delaying bringing its motion is not
    ideal, it must also be remembered that the respondents were responsible for
    part of the delay in this proceeding.

[55]

Further, and in any event, even an award of costs on a substantial
    indemnity basis must be consistent with the reasonable expectations of the
    parties:
Toronto District School Board v. Molson Breweries Property Ltd.
,
    2009 CarswellOnt 3661 (S.C.), at para. 16. This was a motion to amend a
    statement of defence. While there was a significant litigation history that had
    to be canvassed, the matter was not complex.

[56]

I would set aside the costs award and substitute an award of costs in
    favour of the respondents in the total amount of $20,000.

Disposition

[57]

For the foregoing reasons, I would dismiss the appeal of the order
    dismissing the motion for leave to amend the statement of defence. I would set
    aside the costs award below and substitute an award in favour of the
    respondents in the amount of $20,000, inclusive of fees, disbursements, and
    taxes.

[58]

With respect to the costs of the appeal, the parties agreed that if the
    respondents were successful on the appeal they would be entitled to partial
    indemnity costs of $13,759. Given the divided success on the appeal, I would
    reduce this amount and award the respondents costs of the appeal in the amount
    of $11,000, inclusive of fees, disbursements, and taxes.

C.W. Hourigan J.A.

I agree John Laskin
    J.A.

I agree K. Feldman
    J.A.

Released: January 18, 2017

F.K.


COURT OF APPEAL FOR ONTARIO

CITATION: Abernethy (Re), 2017 ONCA 35

DATE: 20170116

DOCKET: C62177

Feldman, Rouleau and van Rensburg JJ.A.

IN THE MATTER OF:  Robert Abernethy

AN APPEAL UNDER PART XX.1 OF THE
CODE

Ian B. Kasper and Anita Szigeti, for the appellant

Scott Latimer, for the Attorney General of Ontario

Heard: January 13, 2017

On appeal against the disposition of the Ontario Review
    Board dated April 27, 2016.

APPEAL BOOK ENDORSEMENT

[1]

The appellant raises two grounds of appeal.  The first is that the Board
    should have made further inquiries of Dr. Coleman or another doctor regarding
    the cause of his psychosis, whether from liver disease or from bipolar
    disorder.

[2]

We do not agree.  Dr. Colemans evidence clearly was that the appellant
    maintained his psychotic symptoms that made him a danger to the public
    regardless of the cause.  The Board made no error in accepting the joint
    position that the appellant remained a significant risk to the safety of the
    public.

[3]

The second ground was that the Board erred by rejecting the hospitals
    and the appellants position on two conditions regarding access to the
    community and an approved person.  We see no error in either the conclusion of
    the Board to give more limited community access at this time and to reject an
    approved person at this time, or in the reasons the Board gave in paragraph 44,
    that the appellant was not yet ready for those conditions.

[4]

The appeal is therefore dismissed.


COURT OF APPEAL FOR ONTARIO

CITATION: Brown v. Dalessandro, 2017 ONCA 80

DATE: 20170127

DOCKET: C61965

Doherty, Brown and Roberts JJ.A.

BETWEEN

Michelle Brown

Plaintiff (Appellant)

and

Antonio Dalessandro
, Chris Hall, Meter Mix
    Concrete Ltd., Robert Vansteeg (also known as "Bob Vansteeg"), John
    Doe and Trillium Mutual Insurance Company

Defendants (
Respondent
)

Chris Nicolis, for the appellant

Michelle Packer and Erika Webb, for the respondent

Bryan M. Hicks, for the defendant, Trillium Mutual Insurance
    Company

Heard and released orally: January 26, 2017

On appeal from the order of Justice Alissa K. Mitchell of
    the Superior Court of Justice, dated March 9, 2016, with reasons reported at 2016
    ONSC 1724.

ENDORSEMENT

[1]

The appellant, Michelle Brown, appeals the
    summary judgment dismissing her motor vehicle action against the respondent,
    Antonio Dalessandro. The motion judge dismissed the summary judgment motion
    brought by the other defendants, Meter Mix Concrete Ltd. and Chris Hall, the
    alleged owner and driver of the cement truck.

[2]

The appellant drove her car into the
    respondents pickup truck at the intersection of Eleanor and Florence Streets
    in London, Ontario. At that location, Florence is a four-lane through-street;
    stop signs on two-lane Eleanor control traffic proceeding onto or across
    Florence.

[3]

At the time of the collision, the respondent
    was driving westbound along Florence. As he approached the intersection with
    Eleanor, he was driving in the curb lane. At the intersection, a cement truck
    was stopped on Florence, in the inside, westbound lane, awaiting an opportunity
    to turn left onto Eleanor. The appellant was stopped at the stop sign in the
    northbound Eleanor lane. She proceeded to drive straight across Florence, in
    front of the cement truck. The appellant struck the respondents pickup truck,
    pushing it off the road. There is a dispute as to whether the cement truck
    driver gestured to the appellant to proceed across his path.

[4]

The motion judge held the respondent was not
    speeding at the time and was unable to see the appellants vehicle because the
    cement truck was blocking his view. The appellant does not challenge those
    findings. Indeed, the appellant submits the material facts in this case are not
    in dispute.

[5]

However, the appellant submits the motion
    judge erred in failing to address whether the respondent should have been
    mindful of the stopped vehicles to his left and the necessity of proceeding
    with caution. She argues the motion judge failed to address and follow the
    decision of this court in
Nash v. Sullivan
(1974), 1 O.R. (2d) 133 (C.A.), a case she contends is almost identical to the
    present one.

[6]

We do not accept this submission. Although
    the motion judge did not refer to the
Nash
decision in her analysis of the respondents liability, she expressly
    considered the principle discussed in it  i.e. depending upon the particular
    circumstances, a driver with the right-of-way may have an obligation to slow
    down and take extra care to look out for other drivers.  The motion judge found,
    at paras. 24 and 25:

By virtue of the state of the traffic and what he was able to
    observe while travelling westbound on Florence Street at the posted speed
    limit, Dalessandro would not have been alerted to a situation of impending
    danger imposing on him a duty to reduce his speed and take other steps to avoid
    an accident with the plaintiffs vehicle.

There is no evidence to support a finding by a jury that the
    plaintiff should have reduced his speed to avoid a collision with the
    plaintiffs vehicle  a collision he could not have anticipated or predicted in
    these circumstances.

[7]

The appellant has not demonstrated the motion
    judge made any palpable and overriding error in so finding. The appeal is
    dismissed.

[8]

The appellant seeks leave to appeal the
    motion judges cost decision. We grant leave, but dismiss her costs appeal. The
    appellant has not persuaded us the motion judge made any error in principle in
    exercising her discretion to award costs.

[9]

The respondent is entitled to his costs of
    the appeal fixed in the amount of $8,000, inclusive of HST and disbursements.

"Doherty J.A."

"David Brown J.A."

"L.B. Roberts J.A."


COURT OF APPEAL FOR ONTARIO

CITATION: Cozzi v. Smith, 2017 ONCA 50

DATE: 20170118

DOCKET: C62542

Simmons, Brown and Roberts JJ.A.

BETWEEN

Peter Brian Cozzi

Appellant

and

Miranda Leigh Smith

Respondent

Jordan D. Sobel, for the appellant

James H. Herbert, for the respondent

Heard: January 18, 2017

On appeal from the orders of Justice Heather A. McGee of
    the Superior Court of Justice (Family Court Branch), dated February 23, 2016
    and April 18, 2016.

APPEAL BOOK ENDORSEMENT

[1]

The appeal is dismissed.  The appellant could only succeed in obtaining
    the relief he sought in the family court proceeding if he was successful in
    setting aside an outstanding mortgage, which was the subject of a separate
    fraudulent conveyances action, which he had commenced.   The family law motion
    judge made no error in declining jurisdiction in these circumstances.  The
    motion should have been brought in the fraudulent conveyances action.

[2]

We decline to entertain the costs appeal.  The appellant did not seek
    leave.

[3]

Costs of the appeal are to the respondent on a partial indemnity scale
    fixed in the amount of $5,000 inclusive of applicable taxes and disbursements.


COURT OF APPEAL FOR ONTARIO

CITATION: Crombie Property Holdings Limited v.
    McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16

DATE: 20170111

DOCKET: C61311

Rouleau, van Rensburg and Miller JJ.A.

BETWEEN

Crombie Property Holdings Limited

Plaintiff (Appellant)

and

McColl-Frontenac Inc. (formerly known as Texaco
    Canada
Limited), Imperial Oil Limited, 172965 Canada Limited, Avondale
Stores Limited, Dimtsis Dentistry Professional Corporation,
and John Doe

Defendants (Respondents)

Peter C. Wardle and James Gibson, for the appellant

Lana J. Finney and Alexi N. Wood, for the respondents
    McColl-Frontenac Inc. (formerly known as Texaco Canada Limited), Imperial Oil Limited
    and 172965 Canada Limited

Linda C. Phillips-Smith, for the respondent Avondale
    Stores Limited

Barry Weintraub and Conner Harris, for the respondent
    Dimtsis Dentistry Professional Corporation

Heard: October 25, 2016

On appeal from the judgment of Justice Kelly P. Wright of
    the Superior Court of Justice, dated October 22, 2015, with reasons reported at
    2015 ONSC 6560.

van Rensburg J.A.:

A.

Overview

[1]

The appellant Crombie Property Holdings Limited (Crombie) brought an
    action for damages resulting from the contamination by hydrocarbons of a property
    located at 150 Main Street East, Grimsby (the Crombie Property). The
    appellant became the owner of the Crombie Property on April 10, 2012. The
    contamination was alleged to have migrated from an adjacent property located at
    146 Main Street East (the Dimtsis Property), which had been used as a gas
    station until 2004.

[2]

The defendants to the action  the respondents in the appeal  are the
    owner (Dimtsis Dentistry Professional Corporation), former owners
    (McColl-Frontenac Inc., Imperial Oil Limited and 172965 Canada Limited) and
    former lessee (Avondale Stores Limited) of the Dimtsis Property.

[3]

The action was commenced by notice of action issued on April 28, 2014.
    The parties exchanged pleadings. In its statement of claim the appellant
    asserted that it was not aware of soil and groundwater contamination at its
    property that had migrated from the Dimtsis Property until September 17, 2012.
    In their statements of defence the respondents pleaded that the claims asserted
    by the appellant had been discovered more than two years before the action was
    commenced and were therefore barred by the
Limitations Act, 2002
, S.O.
    2002, c. 24, Sched. B
.
The respondents moved for summary dismissal of
    the action based on the limitations defence.

[4]

The motion judge granted the motion. She concluded that the appellant
    had become aware of sufficient material facts to form the basis of the action
    by March 9, 2012. In the alternative, she held that Crombie had more than a
    sufficient basis for an action by March 30, 2012 when soil and groundwater
    sampling laboratory results were made available to Crombie (and showed
    exceedences of regulatory criteria). In the further alternative the motion
    judge stated that, even if Crombie did not know about the drilling results
    until May 2012, when it received a draft Phase II environmental site assessment
    (ESA) report that appended the results, the appellant ought to have known of
    its claim against the respondents, and did not exercise due diligence. Finally,
    the motion judge rejected the appellants contention that there was a
    continuing tort that would suspend the operation of a limitation period, as
    there was no evidence from the appellant of ongoing damage or nuisance. As the
    claims asserted in the action were statute-barred, the motion judge granted the
    motion for summary judgment and dismissed the action.

[5]

For the reasons that follow I would allow the appeal. The
    motion judge made two palpable and overriding errors when she found that Crombie
    knew or ought to have known of its claim in relation to the Crombie Property more
    than two years before it commenced the action. First, the motion judge equated
    Crombies knowledge of potential hydrocarbon contamination, or suspicion of
    such contamination (that was based on the information generated by a Phase I
    ESA) with actual knowledge that the Crombie Property was contaminated by
    hydrocarbons. Second, the motion judge erred in ignoring the relevant
    circumstances of Crombies purchase of the property  its involvement in a
    multi-property transaction and its waiver of all conditions (not just an
    environmental condition for the Crombie Property) on March 8, 2012. These errors
    were material to her conclusion that Crombie had knowledge of its claim by
    March 9, 2012, based on its suspicions of contamination, and her alternative
    conclusion that Crombie knew or ought to have known of its claim when
    laboratory results from the Phase II subsurface investigations were available
    at the end of March 2012.

[6]

As I would allow the appeal on this basis, it is unnecessary
    to consider the alternative argument that the motion judge erred in refusing to
    find evidence of continuing migration of contaminants that would extend the
    limitation period.

B.

Facts

[7]

The Dimtsis Property was historically used as a gasoline service station.
    The site was decommissioned in 2004 and a substantial amount of contaminated
    soil was removed. Testing in 2007 confirmed that soil and groundwater
    conditions at the property met the applicable Ministry of the Environment
    (MOE) standards. The MOE acknowledged a Record of Site Condition in 2008.
    Under applicable law, the acknowledgment confirmed that the property complied
    with environmental regulations.

[8]

The appellant offered to purchase the Crombie Property in 2012, as part
    of a transaction involving the acquisition of 22 commercial properties. The
    purchase was subject to various conditions, including that the purchaser be
    satisfied as to the environmental condition of the properties. Crombie hired Stantec
    Consulting Ltd. (Stantec), an environmental consulting firm, to assist with
    its environmental due diligence. Stantec completed a Phase I ESA for each
    property. A Phase I ESA consists of a review of available records, interviews
    with relevant persons and a site visit, but does not include any subsurface
    drilling or soil or groundwater sampling. Its purpose is to identify evidence
    of potential or actual environmental contamination.
[1]

[9]

The Phase I ESA on the Crombie Property was conducted in February 2012.
    It included a review of five historical environmental reports. The reports (copies
    of which were provided to Crombie by February 29, 2012) described the results
    of Phase II ESAs (soil and groundwater sampling) carried out in 2003 and 2004;
    the results of a soil remediation program undertaken in 2004 (for contamination
    by volatile organic compounds (VOCs)); and a review of the environmental
    status of the property in December 2005 (the Pinchin Report).

[10]

The
    Pinchin Report stated that concentrations of PHC F1-F4 (petroleum hydrocarbon
    fractions) were relatively elevated in groundwater sampled in two monitoring
    wells, but generally showed marked decreases over the earlier sampling. Pinchin
    noted that there were no MOE standards for PHC, that the dissolved PHC
    concentrations were only marginally above the potable water standards and that
    the PHC concentrations appeared to be decreasing. Based on this, Pinchins opinion
    was that the remaining PHC concentrations were not considered a significant
    environmental concern, and that no further environmental assessment was
    warranted.

[11]

Stantecs
    Phase I ESA identified potential contamination of the property by the historic
    gas station at the adjacent property as well as potential contamination from an
    active dry cleaner located nearby. In its report (delivered March 20, 2012),
    Stantec summarized the historical reports. With respect to potential
    hydrocarbon contamination, the Phase I ESA report stated that levels of PHCs
    identified in the Pinchin Report would not have met 2012 site condition
    standards for benzene and PHC F1 and F4 fractions. However, as Stantec later stated
    in its draft Phase II report, due to changes in analytical methods, previously
    analyzed total petroleum hydrocarbon (TPH) concentrations could not be directly
    compared against the applicable site condition standards.

[12]

Stantec
    recommended a Phase II ESA to evaluate soil and groundwater conditions at the
    Crombie Property for VOC and hydrocarbon contamination.

[13]

On
    March 8, 2012 Crombie waived all conditions for the purchase transaction,
    including environmental conditions, such that it was required to complete the
    purchase of all 22 properties. Crombie completed its purchase of the
    properties, including the Crombie Property, on April 10, 2012.

[14]

The
    subsurface work at the Crombie Property began on March 14, 2012. Crombie
    initially authorized analysis for VOCs only however, as Stantec reported in its
    draft Phase II ESA report, during the subsurface sampling, petroleum hydrocarbon
    odours were noted in a monitoring well near the property boundary. Stantec noted
    that following discussions with Crombie, soil and groundwater samples from this
    location were also analyzed for petroleum hydrocarbons.

[15]

A
    draft Phase II ESA report was submitted to Crombie by Stantec on May 9, 2012.
    Attached to the report were laboratory test results dated March 23, 2012 for
    groundwater and March 30, 2012 for soil. The test results showed that petroleum
    hydrocarbons in certain soil and groundwater samples exceeded MOE site
    condition standards.

[16]

The
    final Phase II ESA report was provided to Crombie on September 17, 2012.

[17]

On
    April 28, 2014 Crombie commenced its action for damages for nuisance, strict
    liability, trespass, breach of statute and negligence as a result of the
    contamination by petroleum hydrocarbons of soil and groundwater at the Crombie
    Property.

[18]

The
    respondents moved for summary judgment to dismiss the action on the basis that
    the appellants claims were statute-barred pursuant to the
Limitations Act,
    2002.

[19]

In
    support of the motion the respondents submitted the affidavit of Jeff Carson,
    an environmental engineer employed by Amec Foster Wheeler Environment &
    Infrastructure, and retained by Dimtsis, that attached his report (the Carson
    Report).
[2]
The Carson Report reviewed and explained the various historical environmental
    reports and the Stantec Phase I and Phase II ESA reports, and the information that
    was available to Crombie and its consultant based on such documents. In
    relation to the soil and groundwater laboratory results, Mr. Carson noted
    that they were reported by the laboratory on March 23 and 30, 2012. He stated, [I]t
    is common industry practice to update clients with field and analytical data
    once received, especially when critical deadlines, such as property transaction
    decisions, are imminent.

[20]

In
    response to the motion for summary judgment the appellant relied on the affidavit
    of Brady Landry, Crombies Director of Acquisitions and Dispositions. Mr.
    Landry deposed that his department was responsible for due diligence for the 22
    property transaction. He described how Crombie had a weekly telephone call in
    which environmental issues were discussed, and based on which due diligence summaries
    were prepared and updated. His affidavit attached copies of communications
    within Crombie and with Stantec. As of February 20, 2012, Stantec had informed
    Crombie that a gas station was located at the Dimtsis Property, which had been
    remediated, that a dry cleaner was present on another neighbouring property and
    that groundwater flow was not yet determined. As of February 27, 2012 the
    summary indicated a draft Phase II ESA was to be completed by April 9, 2012,
    with verbal results by March 23, 2012.

[21]

Mr.
    Landry deposed that, in the next status call following the waiver of conditions,
    Stantec was advised that the Phase II ESA was no longer considered urgent. He
    explained that there was no reason to incur additional expense for rush
    laboratory analysis and report preparation. As a result, Crombie ceased to have
    Stantec provide regular updates. Mr. Landry deposed that the Crombie Property
    was not discussed with Stantec between March 13, 2012 and closing or
    afterwards. He also stated that it was only on receipt of the draft Phase II
    ESA report on May 9, 2012, that Crombie learned that there was hydrocarbon
    contamination at the Crombie Property. Mr. Landry was not cross-examined on his
    affidavit.
[3]

C.

Decision of the Motion Judge

[22]

The
    motion judge concluded that the appellants claims were readily available and
    discoverable well before April 28, 2012, two years before its notice of action
    was issued. She found that Crombie was aware of Stantecs concerns outlined in
    its Phase I ESA report and its recommendation to conduct subsurface testing.
    She concluded that groundwater sampling results were available and showed
    exceedences on March 23, 2012, while soil sample results were available and
    showed exceedences on March 30, 2012.

[23]

The
    motion judge concluded (at para. 31 of her reasons) that, by March 9, 2012,
    when Crombie waived the environmental conditions, they had become aware of
    sufficient material facts to form the basis of an action.

[24]

The
    motion judge went on to hold, that if she were wrong in that conclusion,
    Crombie had more than a sufficient basis for an action by March 30, 2012 (at
    para. 32). She stated that, while the draft Phase II report was dated May 9,
    2012, the crucial part of that report was the findings from the groundwater and
    soil samples all of which [were] made available to Crombie [by] March 30, 2012.
    She concluded that [i]t is difficult to believe that Crombie did not know
    about these results given that they were directing and presumably paying
    Stantec to go ahead with the further testing (at para. 32). The motion judge
    rejected the evidence of Mr. Landry, that Crombie did not know of the test
    results until May 2012. She found that the subsurface test results would have
    been made available to Crombie during what she described as a crucial time
    period. The motion judge referred to the fact that Crombie had ongoing
    communication with Stantec and was verbally advised of the results of the Phase
    I ESA report well before its March 20, 2012 release date. From this, at para.
    35, she inferred that:

It only makes sense that they also had ongoing communication
    with Stantec prior to the Phase II report. Given the serious nature of the
    investigation and the results that flowed from it, it is difficult to believe
    they were not given that information by March 30, 2012. Even if they did not
    request it, one would think Stantec would have made it available to them.

[25]

The
    motion judge concluded that, even if Crombie did not know about the sample
    results until May 2012, it ought to have known and did not exercise due diligence
    (at para. 40).

[26]

As
    for the appellants argument that there was continuing environmental damage in
    respect of which the limitation period had not run, the motion judge rejected
    the claim as not supported by any evidence. She noted that none of the environmental
    reports that were generated spoke to the issue of ongoing damage. Therefore,
    she was not prepared to attach a separate limitation period to any such claim
    (at paras. 41-47).

[27]

The
    motion judge concluded that [c]ertainly by the time [Crombie] acquired the
    property on April 10, 2012, [it] knew or ought to have known through reasonable
    diligence, all of the material facts needed to discover its alleged cause of
    action (at para. 49). She therefore dismissed the action as statute-barred.

D.

Positions of the Parties

[28]

The
    central issue on appeal is whether the motion judge made a palpable and
    overriding error, or erred in principle, when she concluded that the appellant
    knew or ought to have known it had a cause of action against the respondents more
    than two years before it commenced its action.

[29]

The
    appellant says that the motion judge erred:

1.

in finding that it knew of its claim by March 9, 2012, which was prior
    to its acquisition of the property and before it knew that there was
    contamination exceeding applicable standards;

2.

in concluding in the alternative that it had a sufficient basis for an
    action by March 30, 2012, inferring without evidence, that Crombie had, by
    then, received the results of soil and groundwater testing;

3.

in concluding in the further alternative that Crombie ought reasonably
    to have known that it had a cause of action, a finding that ignored the
    relevant circumstances of Crombies purchase and environmental due diligence; and

4.

in dismissing the claim based on continuing migration of contaminants
    where the moving parties had not provided any evidence to support this basis
    for the motion.

[30]

The
    respondents assert that the motion judges findings are entitled to deference.
    They argue that the finding of whether a claim has been discovered is a question
    of fact, or mixed fact and law, and that the evidence at the summary judgment
    motion supported the motion judges decision in all respects.

E.

Analysis

(1)

Standard of Review

[31]

The
    Supreme Court of Canada in
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1.
    S.C.R. 87, at para. 81, established the standard of review on appeal of a
    summary judgment. The court stated that, [w]hen the motion judge exercises her
    new fact-finding powers under Rule 20.04(2.1) and determines whether there is a
    genuine issue requiring a trial, this is a question of mixed fact and law,
    reviewable only for a palpable and overriding error, unless there is an
    extricable error in principle. Further, the question whether a limitation
    period expired prior to the commencement of an action is typically a question
    of mixed fact and law and therefore subject to review on a palpable and
    overriding error standard:
Longo v. MacLaren Art Centre Inc.
, 2014
    ONCA 526, 323 O.A.C. 246, at para. 38. A palpable and overriding error is an
    obvious error that is sufficiently significant to vitiate the challenged
    finding of fact:
Longo
, at para. 39
.

[32]

In
    my view, and as I will explain, the decision in this case reflects such errors.

(2)

Framing the Limitations Issue

[33]

In
    order to obtain a summary dismissal of the action, the moving parties were
    required to establish that there was no issue requiring a trial about their
    limitation defence. The specific issue was whether Crombies claim in respect
    of the environmental contamination of its property was discovered within the
    meaning of s. 5 of the
Limitations Act, 2002
before April 28, 2012.

[34]

Section
    5(1) of the
Limitations Act, 2002
provides that a claim is discovered
    on the earlier of:

(a) the day on which the person with the claim first
    knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by
    or contributed to by an act or omission,

(iii) that the act or omission was that of the
    person against whom the claim is made, and

(iv) that, having regard to the nature of the
    injury, loss or damage, a proceeding would be an appropriate means to seek to
    remedy it; and

(b) the day on which a reasonable person with the
    abilities and in the circumstances of the person with the claim first ought to
    have known of the matters referred to in clause (a).

[35]

The
    limitation period runs from when the plaintiff is actually aware of the matters
    referred to in s. 5(1)(a)(i) to (iv) or when a reasonable person with the
    abilities and in the circumstances of the plaintiff first ought to have known
    of all of those matters:
Longo
, at para. 41. The knowledge sufficient
    to commence the limitations clock has been described as subjective knowledge
    or objective knowledge. The prospective plaintiff must have known or ought
    reasonably to have known of the material facts necessary for a claim. It is
    reasonable discoverability and not the mere possibility of discovery that
    triggers a limitation period:
Van Allen v. Vos
, 2014 ONCA 552, 121
    O.R. (3d) 72, at paras. 33 and 34.

[36]

The
    central issue in this case, as framed by the parties, is when the appellant knew
    or ought reasonably to have known that the Crombie Property was contaminated by
    hydrocarbons, and in particular whether that occurred before April 28, 2012.
    This is how the injury, loss or damage component of s. 5(a)(i) was
    characterized. The fact that the appellant would have known that the source of
    the contamination was the prior use of the adjacent property as a gas station (the
    cause of the injury, loss or damage under s. 5(a)(ii)) was not seriously
    challenged. Nor did the appellant assert that any delay in commencing the claim
    resulted from the need to determine the identity of the individual respondents
    in relation to the Dimtsis Property (s. 5(a)(iii)) or in not knowing that a
    proceeding would be an appropriate means to seek a remedy (s. 5(a)(iv)).

[37]

As
    indicated, the motion judge decided to allow the motion and dismissed the claim
    as statute-barred after she concluded that the appellants claims were readily
    available and discoverable well before April 28, 2012.

[38]

As
    I will explain, the motion judge, in concluding that Crombie knew about its
    claim by March 9, 2012, and knew or ought to have known about its claim by
    March 30, 2012, made two palpable and overriding errors.

(3)

Equating Suspicion of Contamination with Actual Knowledge of
    Contamination

[39]

The
    motion judge concluded that by March 9, 2012, when Crombie waived the
    environmental clause,
[4]
(and before any subsurface testing had occurred) it knew of sufficient
    material facts to form the basis of an action. As noted earlier, the material
    fact in question in this case was that the Crombie Property was contaminated by
    hydrocarbons.

[40]

The
    motion judge did not point to any evidence that Crombie had actual knowledge of
    the hydrocarbon contamination at the Crombie Property at that time. Rather, she
    referred to material that was available to Crombie from a review of the
    property (presumably the draft Phase I ESA results reported by Stantec) and
    the compilation of material that was presented to them (presumably the historical
    environmental reports Crombie received on February 29, 2012). Indeed, the
    motion judges findings of fact at para. 29 of her reasons indicate only that,
    by early March 2012, Crombie was aware of Stantecs concerns of potential
    contamination by petroleum hydrocarbons related to the former gasoline station
    on the Dimtsis Property.

[41]

Any
    information available to Crombie at that time about actual contamination at the
    Crombie Property, was historical. At its highest, in relation to hydrocarbon
    contamination, the Pinchin Report revealed the presence of hydrocarbons in
    groundwater in 2005 that were marginally above potable water standards and
    appeared to be decreasing, leading Pinchin to recommend no further
    investigation. It was not evidence of contamination of the property over six
    years later, nor was it interpreted as such by Stantec, Crombies environmental
    consultant. Indeed, the purpose of the Phase II drilling and sampling program
    recommended and undertaken by Stantec, was to determine whether or not the soil
    or groundwater at the Crombie Property was contaminated.

[42]

That
    the motion judge equated Crombies knowledge of possible contamination with
    knowledge of actual contamination is apparent from her statement that [a]ll
    the testing that followed simply confirmed [Crombies] suspicions about what
    had already been reported on (at para. 31). It was not sufficient that Crombie
    had suspicions or that there was possible contamination. The issue under s.
    5(1)(a) of the
Limitations Act, 2002
for when a claim is discovered, is
    the plaintiffs actual knowledge. The suspicion of certain facts or knowledge
    of a potential claim may be enough to put a plaintiff on inquiry and trigger a
    due diligence obligation, in which case the issue is whether a reasonable
    person with the abilities and in the circumstances of the plaintiff ought
    reasonably to have discovered the claim, under s. 5(1)(b). Here, while the
    suspicion of contamination was sufficient to give rise to a duty of inquiry, it
    was not sufficient to meet the requirement for actual knowledge. The subsurface
    testing, while confirmatory of the appellants suspicions, was the mechanism by
    which the appellant acquired actual knowledge of the contamination.

[43]

Finally,
    I note that the motion judge stated that the appellants claims were available
    and discoverable well before April 28, 2012. While not determinative, this
    suggests that the motion judge adopted too low a threshold for discoverability
    and did not focus on what was necessary to her analysis: she was required to
    determine when the appellant had actual knowledge of the elements of its claim,
    and in particular that the property was contaminated by hydrocarbons, and when
    a reasonable person with the appellants abilities and in its circumstances,
    ought to have known of the contamination. The fact that contamination was there
    to be discovered was of course not sufficient to start the limitations clock.

[44]

For
    these reasons, I conclude that it was a palpable and overriding error for the
    motion judge to equate knowledge of potential contamination with knowledge of
    actual contamination.

(4)

Failing to Consider Relevant Circumstances: the Transaction Context

[45]

The
    motion judge concluded in the alternative that Crombie had knowledge of the
    material facts sufficient for its claim when the subsurface test results were
    available to Stantec (which she assumed was by the end of March). The groundwater
    and soil sampling results from the laboratory were dated March 23 and 30, 2012.

[46]

If
    the subsurface test results were sufficient to confirm that the Crombie
    Property was contaminated (which is a reasonable conclusion), it was not
    sufficient that the results were available. The question was when Crombie had
    knowledge of the test results.

[47]

First,
    the motion judge stated that, although the draft Phase II report containing the
    findings from the soil and groundwater sampling was not provided to Crombie until
    May 9, 2012, [i]t is difficult to believe that Crombie did not know about these
    results given that they were directing and presumably paying Stantec to go
    ahead with the further testing (at para. 32). The fact that Crombie was
    directing and paying Stantec, however, was not sufficient to ground the
    conclusion that Crombie knew about the test results as soon as they were
    reported by the laboratory to Stantec.

[48]

Second,
    the motion judge concluded that, because Stantec had verbally reported to
    Crombie the results of the Phase I ESA during the due diligence period it only
    [made] sense that they would have continued to do so when it received the
    laboratory results. In rejecting Mr. Landrys evidence that Crombie received no
    status updates from Stantec between March 13 and April 12, 2012, after the
    waiver of conditions, the motion judge stated that the suggestion that Crombie
    ceased to have communication with Stantec during this crucial time period
    made no sense and that she did not accept it:

Given the serious nature of the investigation and the results
    that flowed from it, it is difficult to believe they were not given that
    information by March 30, 2012. Even if they did not request it, one would think
    Stantec would have made it available to them. (at para. 35)

[49]

The
    problem with this reasoning is that it ignores completely the circumstances of
    the multi-property transaction Crombie was involved in, the due diligence
    process and the waiver of conditions. Nowhere in her reasons did the motion
    judge refer to the fact that Crombie was involved in purchasing 22 properties. This
    was part of the context in which Crombies knowledge ought to have been assessed,
    and the failure to mention such circumstances was an important omission. Further,
    although the motion judge referred to March 9, 2012 as the date when Crombie
    waived conditions and proceeded with the purchase of the property (later she
    referred to this as a waiver of the environmental condition), she did not
    factor Crombies waiver of conditions into her assessment of its conduct.

[50]

That
    the motion judge ignored these circumstances is apparent in her reference to the
    crucial time period (presumably the period for due diligence in the
    transaction) as continuing even after the waiver of conditions. Once the
    conditions were waived, there was no urgency to confirming whether the Crombie
    Property was contaminated, as Crombie was required to close the purchase. It
    was unreasonable for the motion judge to draw an inference about Crombies
    knowledge of the test results without considering such circumstances.

[51]

This
    error also affected the motion judges conclusion that Crombie ought reasonably
    to have known of its claim when the test results were available, and that the
    failure to ask for the results was inconsistent with reasonable diligent conduct.
    Section 5(1)(b) of the
Limitations Act, 2002
asks when a reasonable
    person with the abilities and in the circumstances of the person with the claim
    first ought to have known of the elements of the claim; in this case the fact
    of the hydrocarbon contamination. Determining whether the plaintiff has acted
    reasonably will include an analysis of not only the nature of the potential
    claim, but also the particular circumstances of the plaintiff:
Longo
,
    at para. 43.

[52]

Again,
    in arriving at her conclusion that Crombies claim was reasonably discoverable,
    the motion judge did not consider the relevant and important circumstances of
    the multi-property transaction and its waiver of conditions. What the motion
    judge ought to have considered, was whether, a reasonable person in Crombies
    position, after the waiver of conditions, would have sought out and obtained
    the laboratory results before April 28, 2012.

[53]

Accordingly,
    it was a palpable and overriding error for the motion judge to fail to take
    into consideration the multi-property transaction and Crombies waiver of
    conditions, in her assessment of what Crombie knew or ought to have known about
    hydrocarbon contamination at the property two years before it commenced its
    action.

(5)

The Conclusion that the Limitation Period Is Not Extended Because of a Continuing
    Tort

[54]

In
    addition to asserting that the hydrocarbon contamination was not discovered
    until May 2012, the appellant argued that there was a continuing tort, in
    respect of which the limitation period would continue to run. The appellant contends
    that the motion judge erred in concluding that, because there was no evidence
    of continuing migration of hydrocarbons from the Dimtsis Property, no separate
    limitation period would attach to such claim. The appellant says that it was up
    to the moving party to put forward evidence that there was no continuing
    migration of contaminants, before the appellant was required to respond. This
    was because the statement of claim alleged continuing migration. The appellant
    relies on
Sanzone v. Schechter
, 2016 ONCA 566, 402 D.L.R. (4th) 135, where
    this court noted that a moving party seeking summary judgment has the burden of
    persuading the court that there is no genuine issue for trial and it is only
    after the moving party discharges its evidentiary burden that the burden shifts
    to the responding party to prove that its claim has a real chance of success
    (at para. 30).

[55]

In
    view of my conclusions with respect to the palpable and overriding errors that
    informed the motion judges analysis of the limitations issues, it is
    unnecessary to address this issue, and I decline to do so.

F.

Disposition

[56]

For
    these reasons, I would allow the appeal and set aside the dismissal of the
    appellants action. I would award Crombie its costs of the appeal fixed at $29,194.19,
    inclusive of disbursements and applicable taxes and payable jointly and
    severally by all respondents.

Released: P.R. January 11, 2017

K. van Rensburg J.A.

I agree Paul Rouleau J.A.

I agree B.W. Miller J.A.

[1]
Canadian Standards Association, Standard Z768-01 (R2006) (Phase I Environmental
    Site Assessments).

[2]
Although Mr. Carson offered an opinion as to whether a reasonable person with
    the abilities and in the circumstances of Crombie ought to have known prior to
    April 28, 2012 all the facts alleged in the statement of claim, the motion
    judge during oral argument noted that this was a matter for the court and not
    for expert opinion and that she would disregard it. All counsel on appeal
    agreed this was the correct approach and the respondents did not seek to rely
    on this opinion.

[3]
In their factums the respondents referred to their
efforts to
    cross-examine Mr. Landry, who resides in Nova Scotia, and suggested that there
    had been a lack of co-operation by the appellant in facilitating the
    cross-examination in Ontario or by videoconference. However, there was no
    motion under rule 34.07 to determine the location of the examination or to
    conduct the examination by videoconference. In any event, in argument on the
    appeal counsel for the respondent Dimtsis stated that there had been no need to
    cross-examine Mr. Landry.

[4]
The actual date of waiver of the conditions was March 8, 2012, as noted earlier
    in these reasons.


COURT OF APPEAL FOR ONTARIO

CITATION: Cruz-Lee v. Lee, 2017 ONCA 61

DATE: 20170123

DOCKET: C60402

Simmons, Brown and Roberts JJ.A.

BETWEEN

Angela De Cruz-Lee

Appellant

and

Larry Lee

Respondent

Ravinder Sawhney, for the appellant

No one appearing for the respondent

Heard: January 16, 2017

On appeal from the order and judgment of Justice Antonio
    Skarica of the Superior Court of Justice, dated March 27, 2015 and April 17,
    2015 respectively.

ENDORSEMENT

[1]

Following the appeal hearing, we dismissed the wifes appeal for reasons
    to follow. These are our reasons.

[2]

The issues on appeal relate to the trial judge's
    findings concerning the proper disposition of the proceeds of sale of the
    matrimonial home in the amount of approximately $53,000.

[3]

Following a nine-day trial, the trial judge
    found that the husband was the sole owner of the matrimonial home as the wife
    had gifted her interest in the home to him for the purpose of avoiding
    creditors.

[4]

The trial judge also found that the wife's claim
    for an equalization of the net proceeds of sale of the matrimonial home was
    statute barred (he fixed the date of separation at December 21, 1996; the
    wife's application was issued in August 2010). In the alternative, he found
    that an equal division of the sale proceeds would be unconscionable due to the
    wife's reckless depletion of family property, the fact that the husband paid
    100% of the acquisition costs and expenses related to the home and the wife's
    abusive and controlling behaviour throughout the marriage toward both the
    husband and the child.

[5]

The wife was unrepresented at trial. On
    appeal, she has counsel. The husband was represented at trial but is unrepresented
    on appeal and did not attend the appeal hearing despite receiving notice of
    same.

[6]

The wife's counsel submits that the trial judge
    erred in failing to admit an expert report indicating the wife suffers from
    post-traumatic stress disorder, or, in the alternative, erred in failing to
    appoint an expert under rule 20.1 of the
Family Law Rules
, O. Reg.
    114/99, to inquire into the wife's psychiatric condition.

[7]

On behalf of the wife, counsel also argues that
    the trial judge erred in failing to find that the date of separation was in
    2010, when the parties physically separated, and that her equalization claim
    was therefore within the limitation period.

[8]

Counsel further argues that the trial
    judge made unreasonable factual findings or misapprehended the evidence due to
    his failure to inquire into the existence of battered wife syndrome and the
    wife's psychiatric issues.

[9]

We do not accept these submissions. The
    appellant did not give notice of her intention to rely on a psychiatric report
    in advance of the trial. Counsel acknowledges that the trial judge did not
    misstate the evidence in making the findings of fact that support his key conclusions
    concerning the date of separation and ownership of the matrimonial home.
    Instead, counsel contends that the appellant made misleading statements in her
    evidence due to her condition and required counsel and a psychiatrist to assist
    the court in assessing her evidence. However, the psychiatric report the
    appellant sought to have admitted at trial is premised largely the appellants
    self-reporting of events and does not purport to assess her evidence. Nor is
    there fresh evidence before us, either from a psychiatrist or the appellant and
    a psychiatrist, to support the argument that other psychiatric evidence would somehow
    have assisted in the assessment of the appellants evidence.

[10]

In response to a question from the panel,
    counsel confirmed that he does not assert that the appellant was mentally
    incapable at trial such that she required a litigation guardian. In the face of
    this acknowledgement and in the absence of fresh evidence concerning the
    appellants psychiatric condition and how it impacted her evidence, we do not
    accept that the trial judge was under any obligation to appoint counsel for the
    appellant or an expert to assess her condition under rule 20.1.

[11]

In our view, the appellant has failed to
    demonstrate palpable and overriding error in the trial judges findings
    concerning the date of separation. Counsel acknowledges that the trial judge
    did not misstate the test for determining the date of separation. Instead, he
    points to various factors that he claims should have led the trial judge to a
    different result  for example, the fact that the parties lived together,
    albeit separately, under the same roof for a long period; that they continued
    to conduct a business together and that the wife home-schooled the child.
    However, such an argument does not demonstrate palpable and overriding error. The
    trial judge was aware of these factors but nonetheless concluded, for other
    reasons, that the parties had separated soon after they purchased the
    matrimonial home.

[12]

Nor did the appellant demonstrate palpable
    and overriding error in the trial judges findings concerning ownership of the
    matrimonial home.

[13]

The appeal is therefore dismissed. As the
    respondent did not file material or attend, we make no order as to costs.

Janet Simmons J.A.

David Brown J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: DOnofrio v. Advantage Car & Truck Rentals
    Limited, 2017 ONCA 5

DATE: 20170105

DOCKET: C61676

Gillese, Benotto and Roberts JJ.A.

BETWEEN

Anthony DOnofrio, James DOnofrio and Anna
    DOnofrio

Plaintiffs (Appellants)

and

Advantage Car & Truck Rentals Limited,
Jane
    Doe
Anita Marques and Unifund Assurance Company

Defendants (Respondents)

Sabrina Singh, for the appellants

Stephen Ross and Murleen McLean, for the respondents
    Advantage Car & Truck Rentals Limited and Anita Marques

Ali Z. Khan, for the respondent Unifund Assurance
    Company

Heard: November 24, 2016

On appeal from the order of Justice Harrison S. Arrell of
    the Superior Court of Justice, dated August 13, 2015, and from the order of
    Justice Robert B. Reid of the Superior Court of Justice, dated December 30,
    2015, with reasons reported at 2015 ONSC 8084, and, if leave be granted, the
    related costs order, dated March 11, 2016.

Gillese
    J.A.:

[1]

These appeals raise an important question:  are determinations made in a
    summary judgment motion binding on all parties to the proceeding in which the
    motion was brought?  In answering that question, the court must consider the
    effect of a party taking no position on the summary judgment motion.

BACKGROUND IN BRIEF

The Accident and the Action

[2]

In early August 2008,
[1]
Anthony DOnofrio was injured when the van he was driving was rear-ended by
    another vehicle (the offending vehicle).  A young female driver spoke briefly
    with Mr. DOnofrio after the accident but drove off without providing ownership
    and insurance information.

[3]

Mr. DOnofrio had recorded the licence plate number of the other car at
    the scene of the accident. A police investigation traced the licence plate to
    Advantage Car & Truck Rentals Limited (Advantage).  The vehicle
    registered to that licence plate matched the vehicle owned by Advantage and
    identified by Mr. DOnofrio.

[4]

Mr. DOnofrio had a standard automobile policy with Unifund Assurance
    Company.  That policy contained an unidentified motorist provision.

[5]

Mr. DOnofrio and his parents (the Plaintiffs) started an action for
    damages in which it named as defendants: Advantage; Jane Doe, the unknown
    driver of the offending vehicle; and Unifund.  The Plaintiffs included Unifund
    in the action because Unifund would be the responsible payor if there were a
    finding that there was no identifiable defendant.

[6]

Unifund defended and cross-claimed against Advantage and Jane Doe.

[7]

Through Unifunds investigations, it came to believe that Anita Marques
    was the probable driver of the offending car.  Ms. Marques was an employee of
    Advantage at the time of the accident.  At his examination for discovery, Mr.
    DOnofrio confirmed that Ms. Marques was the driver of the offending vehicle.

[8]

The Plaintiffs substituted Ms. Marques for the defendant Jane Doe and
    counsel for Advantage assumed representation for Ms. Marques.

[9]

Advantage/Ms. Marques defended the action based on what I will term the
    Identity Defences.  Those defences were that the identities of the driver
    and/or the owner of the offending vehicle were unknown, as was whether the
    driver was operating the offending vehicle with the owners consent.

The Summary Judgment Motion

[10]

After examinations for discovery were completed, Unifund advised the
    parties that it intended to bring a summary judgment motion for an order
    dismissing the action against it because the identities of the owner and driver
    of the offending vehicle were known (the Summary Judgment Motion).

[11]

In a letter to the parties dated July 2, 2015 (the First Unifund
    Letter), counsel for Unifund referred to some of the facts that supported its
    contention that there were no genuine identity issues requiring a trial.  That
    letter reads, in part, as follows:

Unifund should be released from this action on the basis that
    this is not an uninsured motorist claim.

The plaintiff wrote down the license plate of the other vehicle
    at the scene of the accident. The vehicle registered to that license plate
    matches the vehicle owned by Advantage, and identified by the plaintiff. That
    vehicle was returned to the store a few hours before the subject accident, and
    it was not rented again until a week later. During this time, the vehicle was
    available at the Advantage shop. The keys for the vehicle were available during
    the day in an unlocked box. Ms. Marques confirmed that she would attend at the
    store on a frequent basis, whether working or not, in order to bring her
    boyfriend lunch and to hang out. Odometer readings and the vehicle history
    print out indicate a missing 116 kms between the time the vehicle was brought
    in on August 12
th
, 2008, and when it was rented again on August 19
th
,
    2008.

Advantage has not taken the position that Ms. Marques took the
    vehicle without consent. Advantage did not report the vehicle as stolen,
    despite knowing soon after the accident that there was concern about it. It
    also appears that Advantages employees would take company vehicles out. Ms.
    Marques supervisor signed the vehicle out, including before and after the
    accident.

Finally, we note that the plaintiff attended the examination
    for discovery of Ms. Marques and confirmed that she was the other driver.

[12]

The affidavit of Steven Carlstrom, filed by Unifund on the Summary Judgment
    Motion, placed those facts in evidence before the court. The notice of motion
    also made it clear that Unifund sought to be released because the action did not
    involve an uninsured motorist vehicle claim.

[13]

The Plaintiffs indicated that they would respond to the Summary Judgment
    Motion, if necessary, depending on the responding materials filed by
    Advantage/Ms. Marques.

[14]

By letter dated July 31, 2015, counsel for Advantage/Ms. Marques
    responded to Unifund and advised that those parties would take no position on
    the Summary Judgment Motion on the basis that no costs will be sought against
    them, otherwise they would require an adjournment to file responding
    materials.

[15]

By letter dated August 11, 2015 (the Second Unifund Letter), Unifund
    advised all parties that we will agree to a consent motion to dismiss the
    action without costs against our client.

[16]

Counsel for Advantage/Ms. Marques did not respond to the Second Unifund
    Letter.  Nor did they file responding materials on the Summary Judgment Motion
    or attend at its hearing.

[17]

At the hearing of the Summary Judgment Motion, counsel for Unifund
    advised the court that the order it sought was on consent.  No party other
    than Unifund attended at the hearing of the motion.

[18]

By order dated August 13, 2015 (the First Order), the summary judgment
    motion judge made the order which Unifund sought.  The second paragraph in the
    preamble to the First Order stated that the Plaintiffs took no position on the
    Summary Judgment Motion and that Advantage and Ms. Marques consented to it.
    The effect of the First Order was to dismiss the action as against Unifund,
    leaving Advantage and Ms. Marques as the sole defendants.

[19]

The full text of the summary judgment motion judges reasons for the
    First Order reads as follows: On consent draft order shall issue.

The First Order Was Based on a Mistake

[20]

Over a month after the hearing of the Summary Judgment Motion, counsel
    for Advantage/Ms. Marques took the position that the First Order contained an
    error because they had not consented to the Summary Judgment Motion.  Rather,
    they had taken no position on the motion.

[21]

Ultimately, all parties agreed that the summary judgment motion judge
    had decided the motion based on a mistaken premise, namely, that all of the
    parties had consented to it.  The parties also all agreed that, in fact, none
    of the Plaintiffs, Advantage or Ms. Marques had consented to the motion, each
    having expressly taken no position on it.

The Clarification Motion

[22]

Counsel for Advantage/Ms. Marques put the Plaintiffs on notice that they
    considered the First Order to have no effect on the Identity Defences and that
    they intended to continue to rely on those defences at trial.  As a result, the
    Plaintiffs brought a motion (the Clarification Motion) to settle the effect
    of the First Order.

[23]

In the Clarification Motion, the Plaintiffs asked for an order
    precluding Advantage and Ms. Marques from raising the Identity Defences at
    trial.  They argued that Advantage and Ms. Marques were estopped from asserting
    the Identity Defences by virtue of the position they had taken on the Summary
    Judgment Motion or, alternatively, by having failed to put their best foot
    forward on that motion.  Alternatively, the Plaintiffs asked that the First
    Order be set aside so that Unifund would continue as a party to the action.

[24]

By order dated December 30, 2015 (the Second Order), the clarification
    motion judge dismissed the Clarification Motion.  The Second Order also made a
    clerical correction to the First Order by amending the wording of the second
    paragraph in its preamble to state that Advantage and Ms. Marques had taken no
    position on the Summary Judgment Motion.

[25]

By order dated March 11, 2016 (the Costs Order), the Plaintiffs were
    ordered to pay costs of the Clarification Motion to Unifund in the amount of
    $6,312.25 and to Advantage/Ms. Marques in the amount of $9,949.72.

The Appeals

[26]

The Plaintiffs appeal all three orders.

THE ISSUES

[27]

The Plaintiffs raise two issues on appeal:

1.

did the
    clarification motion judge err in failing to find that the First Order bound
    Advantage and Ms. Marques such that they are now estopped from raising the Identity
    Defences at trial?

2.

if the answer to
    the first question is no, did the summary judgment motion judge err in
    failing to provide adequate reasons on the Summary Judgment Motion?

ANALYSIS

Issue #1  Did the First Order bind Advantage
    and Ms. Marques?

[28]

The clarification motion judge accepted that the
    Summary Judgment Motion decided the Identity Defences (at para. 29). Nonetheless,
    he found that Advantage and Ms. Marques were not estopped from litigating those
    issues at trial because they did not actively participate in the Summary
    Judgment Motion and they had no right or interest in keeping Unifund in the
    action (at para. 31).  He said that since Advantage/Ms. Marques were disinterested
    in the outcome of the Summary Judgment Motion and did not participate in it,
    they could not be parties for the purposes of estoppel (at para. 31).

[29]

I do not agree.  The Identity Defences which
    Advantage and Ms. Marques seek to raise at trial were directly affected by the
    Summary Judgment Motion.  Consequently, they were interested in the outcome of
    the Summary Judgment Motion.  Further and in any event, as parties to the
    action, Advantage and Ms. Marques were bound by the First Order.  This is so
    regardless of the position that Advantage and Ms. Marques took on the Summary
    Judgment Motion.

[30]

From the outset, the central question in this
    action was whether the Plaintiffs would look to Advantage/Ms. Marques for a
    remedy or to Unifund.  Unifund was named in the action solely because it would
    be the responsible payor if there were a finding of fact that there was no
    identifiable defendant.

[31]

Unifund brought the Summary Judgment Motion
    pursuant to r. 20 of the
Rules of Civil Procedure
, R.R.O.  1990, Reg. 194.  Unifunds position on the motion was that
    Advantage and Ms. Marques were the properly identified owner and driver of the
    offending vehicle and, therefore, the action did not involve an uninsured
    motorist vehicle claim and Unifund should be let out of the action.

[32]

Rule 20.04(2)(a) reads as follows:

20.04(2)
The court shall grant summary
    judgment if:

(a)
the
    court is satisfied that there is no genuine issue requiring a trial with
    respect to a claim or defence;

[33]

The First Order dismissed the Plaintiffs claim
    against Unifund.  As the order was made pursuant to r. 20.04(2)(a), it could
    only have been made if the summary judgment motion judge was satisfied that
    there was no genuine issue requiring a trial with respect to the Identity Defences.
    If there were such a genuine issue requiring a trial, the motion had to be
    dismissed and Unifund could not have been let out of the action.

[34]

Thus, far from being disinterested in the
    outcome of the Summary Judgment Motion, Advantage and Ms. Marques were directly
    affected by it.  Their ability to maintain the Identity Defences at trial
    depended on the motion being dismissed.

[35]

For the same reason, they had an interest in
    keeping Unifund in the action.   Unifund could only have been let out of the
    action if the summary judgment motion judge was satisfied that the action no
    longer involved an uninsured motorist vehicle claim.  On the record before the
    court (and given that the other parties had not in fact consented to the
    motion), the judge could only have been satisfied of that if he accepted that
    Advantage and Ms. Marques were the owner and driver of the offending vehicle.
    If there were some other unidentified owner or driver of the offending vehicle,
    the summary judgment motion judge would have had to dismiss the motion.
    Therefore, the only way that Advantage and Ms. Marques could continue to assert
    the Identity Defences at trial was for Unifund to remain in the action.

[36]

Further and in any event, the First Order and
    its underlying determination that there were no Identity Defences requiring a
    trial was binding on all parties to the action, including Advantage and Ms.
    Marques.  In my view, it is self-evident that either there were genuine
    Identity Defences requiring a trial or there were not.  If there were, the
    Summary Judgment Motion had to be dismissed and the Identity Defences resolved
    at trial.  If there were not, then the Identity Defences could not be pursued
    at trial.  It cannot be both that the Identity Defences were not a genuine
    issue for trial and at the same time remained a genuine issue for trial.

[37]

Furthermore, all of the parties to the action had
    notice of the Summary Judgment Motion.  All had the chance to fully
    participate.  Had Advantage/Ms. Marques wished to retain the right to defend
    the action on the basis of the Identity Defences, they were obliged to contest
    the Summary Judgment Motion and show that there was a genuine issue requiring a
    trial on those matters.  It goes without saying that in so doing, they were
    required to put their best foot forward.

[38]

I would conclude on this issue by responding to
    Advantage/Ms. Marques submission that it was for the Plaintiffs to contest the
    Summary Judgment Motion if they were concerned about the Identity Defences.  I
    reject that submission.

[39]

It was not the Plaintiffs who wished the Identity
    Defences to be pursued at trial  it was Advantage/Ms. Marques.  If Unifund succeeded
    on the Summary Judgment Motion, the trial would have been simplified.  The Plaintiffs
    could then have looked only to Advantage/Ms. Marques for redress but they would
    not have faced the Identity Defences.  If Unifund did not succeed on the
    motion, the Plaintiffs remained in the same position as before the motion was
    brought.  Unifund remained available to claim against in the event that
    Advantage and Ms. Marques were successful in advancing their Identity Defences.

[40]

Therefore, the Plaintiffs understandably took no
    position on the Summary Judgment Motion, although they did make it clear to
    Unifund that if Advantage/Ms. Marques resisted the motion they would respond
    accordingly.

[41]

For these reasons, the Second Order cannot
    stand.  However, although I would set aside the Second Order, I would not
    accede to the Plaintiffs request that this court find that Advantage and Ms.
    Marques are estopped from raising the Identity Defences at trial.  As I explain
    below, there has been no judicial determination of the Identity Defences so
    neither estoppel nor the doctrine of
res
judicata

applies.

Issue #2  The Summary Judgment Motion

[42]

The Plaintiffs framed the second issue as
    arising only if this court found that the clarification motion judge had not
    erred.  As I have explained, I found that he did err.  Nonetheless, because of
    the relief that the Plaintiffs seek, it is necessary to consider the validity
    of the First Order, which flowed from the Summary Judgment Motion.

[43]

The summary judgment motion judge gave a single
    reason for making the First Order: the consent of the parties.  That reason is
     quite simply  wrong.  I hasten to add that no fault for this mistake can be
    laid at the feet of the summary judgment motion judge because he was told by
    Unifund, the moving party, that all parties consented to the granting of the
    order as sought.

[44]

A consent judgment is not a judicial
    determination on the merits of a case but only an agreement elevated to an
    order on consent.   The basis for the order is the parties agreement, not a
    judges determination of what is fair and reasonable in the circumstances:
Rick
    v. Brandsema
, 2009 SCC 10, [2009] 1 S.C.R. 295, at para.
    64.

[45]

With respect, I must disagree with the
    clarification motion judge who treated the fact that Advantage and Ms. Marques
    took no position on the Summary Judgment Motion as the equivalent of having
    consented to the motion and, accordingly, made a clerical correction to the
    First Order to that effect (at para. 17).  As these appeals demonstrate, there
    is a significant and meaningful difference between consenting to a motion and
    taking no position on it.  Had Advantage and Ms. Marques actually consented to the
    Summary Judgment Motion, they could not have purported to resile from its
    underlying determination that there were no genuine Identity Defences to go to
    trial.  It was only because they had taken no position on the Summary
    Judgment Motion that they could purport to be entitled to raise those defences
    at trial.

[46]

Because there was no agreement by the parties that
    the Summary Judgment Motion should be granted and there was no judicial
    determination of the Summary Judgment Motion on its merits, there is no basis
    for the First Order to have been made and it cannot stand.

[47]

In the event that this court determined that both
    the First and Second Orders should be set aside, the Plaintiffs asked that the
    court either (1) dismiss the Summary Judgment Motion or (2) decide the Summary
    Judgment Motion on the merits, including with the appropriate findings of fact.

[48]

I would dismiss the Summary Judgment Motion,
    without prejudice to Unifunds right to renew it.

[49]

It will be recalled that, under r. 20.04(2)(a),
    the court shall grant summary judgment only if it is satisfied that there is no
    genuine issue requiring a trial with respect to a claim or defence.

[50]

As Advantage and Ms. Marques took no position at
    the Summary Judgment Motion, this court does not have the benefit of its
    submissions and evidence on the Identity Defences.  In the circumstances, this court
    cannot be satisfied that there is no genuine issue requiring a trial with
    respect to the Identity Defences nor does it have the parties evidence so that
    it could consider the exercise of its powers under r. 20.04(2.1).

[51]

I acknowledge the validity of the Plaintiffs
    contention that Advantage and Ms. Marques were required to respond to the Summary
    Judgment Motion if they wished to maintain their Identity Defences.  However,
    this court is aware that Advantage/Ms. Marques wish to advance those defences
    and that they mistakenly understood that by taking no position on the Summary
    Judgment Motion, it remained open to them to continue to assert those
    defences.  In the circumstances, in my view, this court is not able to
    satisfactorily discharge its obligations under r. 20.04 and decide the Summary
    Judgment Motion.  Thus, I would dismiss it.

[52]

As the Summary Judgment Motion was never
    adjudicated on its merits, I would dismiss it but without prejudice to
    Unifunds right to renew it.

COSTS

[53]

In the circumstances, the Plaintiffs are
    entitled to their costs of the Clarification Motion on a substantial indemnity
    basis with the lions share of those costs to be borne by Unifund.

[54]

Unifund is the author of this whole unfortunate
    saga.  It is the one who mistakenly told the judge hearing the Summary Judgment
    Motion that all parties consented to the motion.  As the reasons of the summary
    judgment motion judge demonstrate, the First Order was a direct result of him having
    been given that incorrect information.  In that situation, once Unifund learned
    that the parties had not consented to the Summary Judgment Motion, it should
    have done everything in its power to resolve the problem promptly and without
    cost to the other parties. Instead, Unifund opposed the Plaintiffs attempts to
    resolve the problem and obtained a costs order against the Plaintiffs, their
    insured, for so doing.

[55]

These appeals are the Plaintiffs latest
    attempts to rectify the problems created by Unifund.  It is my view that the Plaintiffs
    should not suffer in costs on these appeals, which they would if the court
    followed its usual practice in ordering costs of the appeals on a partial
    indemnity basis.  The entire saga began with Unifunds mistaken advice to the summary
    judgment motion judge that the parties consented to that motion.  Unifunds failure
    to rectify matters once that mistake became known led to the Clarification Motion
    and, ultimately, to these appeals.  Unifund continued to oppose the Plaintiffs
    on these appeals, going so far as to seek costs of the appeals against the
    Plaintiffs on a substantial indemnity basis.

[56]

In the circumstances, I would set the quantum
    of costs of the appeals on a substantial indemnity basis, again with the lions
    share to be paid by Unifund.

DISPOSITION

[57]

For these reasons, I would allow the appeals,
    set aside all three orders and dismiss the Summary Judgment Motion, without
    prejudice to Unifunds right to renew it.

[58]

I would order costs of the appeals in favour of
    the Plaintiffs in the total sum of $24,400, all-inclusive.  Of that sum, I
    would order Unifund to pay $16,400, all-inclusive, and Advantage and Ms.
    Marques together to pay $8,000, all-inclusive.

[59]

Given the Plaintiffs success on appeal, the
    Costs Order automatically falls and they become entitled to costs of the
    Clarification Motion.  I would order Unifund to pay the Plaintiffs all-inclusive
    costs of the Clarification Motion of $4,500, and Advantage/Ms. Marques to pay
    the Plaintiffs all-inclusive costs of $3,000, of that motion.

[60]

No costs were ordered on the Summary Judgment Motion and no party has sought
    costs of that motion in the appeals before this court.  Accordingly, I would
    make no costs order in respect of the Summary Judgment Motion.

Released: January 5, 2017 (LB)

E.E. Gillese J.A.

I agree M.L. Benotto
    J.A.

I agree L.B. Roberts
    J.A.

[1]

On the record, the exact date of the accident is unclear.  It
    appears that it occurred on either August 12 or 13, 2008.