COURT OF APPEAL FOR ONTARIO

CITATION:
    Senos v. Karcz, 2014 ONCA 459

DATE: 20140612

DOCKET: C57331

Juriansz, Pepall and Strathy JJ.A

BETWEEN

Natalie Senos

Applicant (Respondent)

and

Peter Karcz

Respondent (Appellant)

Aaron Franks, Michael Zalev and Melanie Sager, for the
    appellant

Martha McCarthy and Eric Sadvari, for the respondent

Heard: January 30, 2014

On appeal from the order of the Divisional Court (Justices
    Gladys I. Pardu and A. Duncan Grace, Justice Frances P. Kiteley dissenting),
    dated January 25, 2013, with reasons reported at 359 D.L.R. (4th) 342,
    affirming the order of Justice Douglas K. Gray of the Superior Court of
    Justice, dated March 14, 2012, with reasons reported at 2012 ONSC 1547.

Strathy J.A.:

[1]

Parents of a disabled adult child face unique financial, emotional and
    social challenges. When they are divorced or separated, the immediate burden
usually falls on the parent with whom the child resides. This appeal concerns
    the appropriate allocation of financial responsibility for the child between
    divorced parents and between those parents and the state.

[2]

On a technical level, this appeal raises the issue of whether the
    receipt of income support under the
Ontario Disability Support Plan Act
,
    1997,
S.O. 1997, c. 25, Sched. B

(
ODSPA
) by an adult
    child makes the presumptive Table approach to child support  inappropriate, so
    that support must be determined based on an individualized assessment of the condition,
    means, needs and other circumstances of the child.  For the reasons that follow,
    I find that the receipt of income support can make the Table approach
    inappropriate, and in this case it does. I would therefore allow the appeal and
    remit the matter for trial on a more complete factual record.

A.

facts

[3]

The appellant father
[1]
brought a motion to change the amount of support he had been paying for his
    adult son, Antoni. The trial judge dismissed the motion, and the Divisional
    Court dismissed the fathers appeal. The father now appeals to this court,
    arguing that the child support should be reduced by the amount of Antonis ODSP
    income support.

[4]

The parties were married in 1984. Antoni was born in 1989. They
    separated in 1991 and divorced in 1993, at which time the father was ordered to
    pay child support of $900 per month. The
Federal Child Support Guidelines,
S.O.R./97-175
    had not yet been enacted.

[5]

The amount has been adjusted for cost of living and stood at $1,153 per
    month in 2009.

[6]

Antoni was diagnosed with schizophrenia and bipolar disorder in 2007. He
    lives with his mother, her second husband, and their 10 or 11 year-old daughter
    in Acton, Ontario. Antoni occasionally visits his father, who lives near
    Sudbury with his second wife and their 11 year-old son. As Antoni has a
    disability, the parties agree that, for support purposes, he remains a child
    of the marriage as defined by the
Divorce Act
, R.S.C. 1985, c. 3 (2nd
    Supp.), s. 2(1).

[7]

There was conflicting evidence at trial concerning Antonis degree of
    independence. He is now 24 years old and does not work. The father claimed that
    Antoni makes his own meals, uses public transportation and does not require
    supervision.  He has been able to travel on his own to Sudbury by bus to visit his
    father and his family.  According to the father, Antoni spends time fishing,
    skateboarding, snowboarding, watching movies and collecting hockey cards. He
    enjoys eating, smoking cigarettes and drinking beer. The mother, on the other
    hand, says that Antonis condition makes him susceptible to addiction and
    compulsive behaviour, necessitating additional supervision. He is subject to a
    Community Treatment Order under the
Mental Health Act
, R.S.O. 1990, c.
    M.7, which permits him to live in the community.

[8]

In September 2009, Antoni was approved for ODSP and began receiving income
    support payments of $796 per month, subsequently increased to $814. These
    payments are net of taxes. He also received a drug and dental card and other
    medical benefits. His ODSP application was approved retroactive to February
    2008, with the result that he received a lump sum payment of about $12,000. The
    payments are made directly to the mother as Antonis ODSP trustee and are
    deposited into a bank account in their joint names.

[9]

The father earned an average of about $110,000 per year between 2006 and
    2009. The mother has not worked for several years. Her husbands income is a
    matter of dispute  the father alleges he earns $200,000 per year. The mother
    asserts that he only earned that amount in 2009 because he lost his job and
    received severance payments.

[10]

The
    father stopped making child support payments in July 2009 when he learned that
    Antoni had applied for ODSP. He brought a motion to change his support payments
    to reflect Antonis receipt of ODSP and obtained an order directing the Family
    Responsibility Office to hold any funds garnished from his employer in trust,
    pending the outcome of the litigation. As of the date of trial, the FRO held
    $11,007.57 in trust. The Ministry of Community and Social Services has asked
    the mother to advise it on the completion of this litigation of any support
    payments she has received and how they have been used since November 1, 2010.
    Pursuant to the ODSP Income Support Directives, the mother is required to file
    a form setting out whether child support payments are being given directly to
    Antoni or are used for his direct benefit.

B.

the child support guidelines

[11]

Section
    15.1 of the
Divorce Act
provides that a court may make an order
    requiring a spouse to pay for the support of a child of the marriage. Such an
    order must be made in accordance with the
Guidelines
.

[12]

Section
    3 of the
Guidelines

provides as follows:

3.
(1) Unless
    otherwise provided under these Guidelines, the amount of a child support order
    for children under the age of majority is

(
a
) the
    amount set out in the applicable table, according to the number of children
    under the age of majority to whom the order relates and the income of the
    spouse against whom the order is sought; and

(
b
) the
    amount, if any, determined under section 7.

(2) Unless otherwise provided under these Guidelines,
    where a child to whom a child support order relates is the age of majority or
    over, the amount of the child support order is

(
a
) the
    amount determined by applying these Guidelines as if the child were under the
    age of majority; or

(
b
) if
    the court considers that approach to be inappropriate, the amount that it
    considers appropriate, having regard to the condition, means, needs and other
    circumstances of the child and the financial ability of each spouse to
    contribute to the support of the child.

[13]

Section
    3(2)(a) prescribes the Table approach, unless the court considers it
    inappropriate, in which case the court is to apply the approach under s.
    3(2)(b).

C.

Positions of the parties

[14]

The
    fathers position is that the Table approach under s. 3(2)(a) of the
Guidelines
is inappropriate in the circumstances and the amount of child support should be
    determined based on a consideration of Antonis condition, means, needs and
    other circumstances under s. 3(2)(b). He says his support payments should be
    reduced dollar-for-dollar by Antonis ODSP benefits.

[15]

The
    mothers position is that the father should continue paying full Table support.
    Relying on this courts decision in
Ontario (Director of Disability Support
    Program) v. Ansell
, 2011 ONCA 309, 281 O.A.C. 224, she argues that the
    ODSP payments belong to Antoni, whereas the child support belongs to her.

D.

proceedings below

(1)

Trial Judge

[16]

The
    trial judge held that because Antoni was of the age of majority, s. 3(2) of the
Guidelines

applied. In determining that the Table approach
    under s. 3(2)(a) was not inappropriate, the trial judge took guidance from this
    courts observation in
Lewi v. Lewi

(2006), 80 O.R. (3d) 321 (C.A.),
    discussed below, that the amount generated by the Table is the presumptive
    amount and that the s. 3(2)(b) approach is the exception.

[17]

The
    trial judge observed that if s. 3(2)(b) were applied, it would be too
    simplistic an approach to simply deduct the ODSP payments from the amount
    otherwise payable as child support. He noted that in
Ansell
, Laskin
    J.A. listed certain features of child support that distinguish it from ODSP.
    Justice Laskin concluded at para. 29 that in the recipient mothers hands,
    child support payments were not the childs income and the child had no control
    over how they were spent. The recipient was entitled to use those payments to
    repair the roof, pay a hydro bill or buy a new television set.

[18]

Drawing
    on this distinction in
Ansell
, the trial judge stated at para. 21 that
    the ODSP payments clearly belong to Antoni, not to the mother:

Similar reasoning reflects the status of ODSP payments. They
    belong to Antoni. They do not belong to Ms. Senos. Ms. Senos has no legal
    entitlement to them, and no control over how they are spent. Antoni could use
    them to take a trip, buy a car, or buy liquor. In the meantime, Ms. Senos must
    maintain a home for Antoni and support him.

[19]

The
    trial judge concluded that the approach under s. 3(2)(a) was not inappropriate
    in this case. He noted the significant disparity between the parties
    respective incomes and said that there was no evidence that the mothers spouse
    used his income to support Antoni and the spouse was under no obligation to do
    so. He added that the fact that Antoni had his own spending money did not
    make the approach under s. 3(2)(a) inappropriate.

[20]

At
    para. 26, the trial judge contrasted the facts of the present case with cases
    such as
Lewi
, where a child is at university and living away from home
    for a good part of the year and is expected to contribute to the costs of his
    or her education:

In a case such as this, however, the child suffers from what
    is likely a permanent disability that will render him unemployable. He has
    access to some spending money of his own. Should that mean that Mr. Karcz
    should be relieved of all or part of the normal obligation he would otherwise
    have to support his child? Does that make the formula prescribed by s. 3(2)(a)
    inappropriate? In my view, the answer is no.

[21]

Finally,
    the trial judge reiterated that even if the s. 3(2)(b) approach were applied,
    it did not mean that the court would simply deduct the ODSP payments from the
    child support. In view of the disparity between the parties incomes, the
    support payments might be very close to or even equal to the Table amount.

[22]

In
    the result, the trial judge dismissed the fathers motion.

(2)

Divisional Court

[23]

In
    the Divisional Court, the majority and the dissenting judge differed about the
    impact of Antonis receipt of ODSP on the fathers child support payments and
    vice versa.

(a)

Majority (Pardu and Grace JJ.)

[24]

The
    majority dismissed the fathers appeal. Referring to
Lewi
, they noted
    that the Table amount is the presumptive rule for a child over the age of
    majority, unless the court considers that approach inappropriate. The onus of
    proof was on the father to establish that the
Guidelines
approach was
    inappropriate and the trial judges determination that the burden had not been
    discharged was a discretionary decision and was entitled to deference:
Hickey
    v. Hickey
, [1999] 2 S.C.R. 518.

[25]

The
    majority did not agree that the
ODSPA
creates a primary obligation on
    the state to attend to the basic needs of an adult child of the marriage when
    there is a parent financially capable of doing so. There was no basis to
    conclude that Antonis needs were less than the total of the support payments
    received by the mother and the portion of the ODSP payments that Antoni would
    receive after the Director of ODSP had considered the effect of the support
    payments on Antonis budget. Nor was there any basis for thinking the aggregate
    amount in this case was excessive or disproportionate. It would be an error to
    treat ODSP payments as equivalent to employment or investment income earned by an
    adult child. In this case, there had been no analysis of Antonis expenses and
    no evidence of the mothers earning capacity. Therefore, there was no basis on
    which to find the
Guidelines
approach inappropriate.

[26]

Moreover,
    the majority noted that, even if the father had established that the
    presumptive
Guidelines
approach was inappropriate, it was not likely
    that an assessment of Antonis condition, means, needs and other circumstances
    under s. 3(2)(b) would have resulted in a support payment markedly different
    from the table amount.

[27]

Referring
    to
Ansell
, the majority observed that if child support payments are
    used for the benefit of the adult child, for purposes that are not exempt for
    the purposes of calculating the childs income under the ODSP Regulation, they
    become relevant to the assessment of the childs budgetary requirements for the
    purpose of calculating the amount of the benefit to which the child is
    entitled. The majority noted that in this case, there is no evidence of exempt
    expenditures for disability to which support payments are dedicated (para.
    14).

[28]

Pardu
    J. concluded at paras. 20 and 24 that Antonis income support could be reduced
    to take into account the mothers application of child support payments for the
    benefit of the child. Consequently, it would not make sense to reduce child
    support to take into account Antonis receipt of income support:

Here, where the adult child resides with the support
    recipient, it would be reasonable in the absence of evidence to the contrary,
    to conclude that a significant portion of the child support is applied to the
    child's basic needs. These are the same expenses intended to be covered in part
    by ODSP payments, and on the authority of
Director (ODSP Program) v. Ansell
,
the Director would be entitled to take the amount of child support applied
    towards these needs into consideration in assessing the adult child's budgetary
    requirements.

It would be circular to reduce support payments because of
    ODSP payments received by the adult child when those ODSP payments would
    properly be reduced by the extent to which support payments are applied by the
    recipient parent for the benefit of non-exempt living expenses of the child.

(b)

Dissent (Kiteley J.)

[29]

Kiteley
    J. observed that ODSP is meant to reflect a commitment that the legal
    obligation on parents is not unlimited, and that as a disabled child reaches
    the age of majority, the government or the community becomes a stakeholder.

[30]

The
    payments for Antonis support made by the father to Antonis mother would not
    necessarily result in a reduction in Antonis ODSP payments.  He is entitled to
    ODSP in his own right, regardless of his fathers legal obligation to pay child
    support to his mother and regardless of whether his father meets that
    obligation.

[31]

The
Guidelines
were intended to represent a calculation of average
    expenditures for children that include items like board and lodging. Thus,
    there was overlap between the ODSP payments Antoni received for board and
    lodging and the support payments made to the mother. This overlap must be
    recognized in the analysis of whether the approach in s. 3(2)(a) is
    inappropriate. Inappropriate means unsuitable, not inadequate:
Francis v.
    Baker
, [1999] 3 S.C.R. 250, at para. 40. That leaves a wide discretion,
    but one that must be exercised on a principled basis. Receipt of ODSP means
    that the basis upon which the
Guidelines
were established no longer
    applies, and the approach under s. 3(2)(a) is unsuitable.

[32]

Concluding
    that the trial judge should have analyzed the evidence on the basis of the
    factors in s. 3(2)(b), Kiteley J. undertook her own analysis. She concluded
    that the appropriate amount of support pursuant to s. 3(2)(b) would be $186 per
    month, on the assumption that the table amount would be $1,000, less the ODSP income
    support of $814.

E.

The issueS

[33]

The
    first issue is whether the Divisional Court erred in deferring to the trial
    judges determination that the presumptive Table approach under s. 3(1)(a) of
    the
Guidelines
was not inappropriate in the circumstances of this
    case, which include Antonis receipt of ODSP.

[34]

If
    the Divisional Court erred in that regard, the second question is whether,
    having regard to Antonis condition, means, needs and other circumstances, and
    his parents respective capacities to contribute to his support, the fathers
    child support should have been reduced, and if so, by how much.

[35]

The
    mother raises a third issue concerning the trial judges calculation of the fathers
    income and the need for updated financial information.

F.

analysis

[36]

I
    approach these issues keeping in mind the discretionary nature of the trial
    judges determination of support. An appellate court should not interfere with a
    support order unless there has been an error in principle, a significant
    misapprehension of the evidence, or the award is clearly wrong:
Hickey
.
This approach reflects the fact-based and discretionary nature of the
    underlying inquiry and the importance of finality in family disputes. As
    expressed in
Hickey
, at para. 12:

There are strong reasons for the significant deference that
    must be given to trial judges in relation to support orders. This standard of
    appellate review recognizes that the discretion involved in making a support
    order is best exercised by the judge who has heard the parties directly. It
    avoids giving parties an incentive to appeal judgments and incur added expenses
    in the hope that the appeal court will have a different appreciation of the
    relevant factors and evidence. This approach promotes finality in family law
    litigation and recognizes the importance of the appreciation of the facts by
    the trial judge. Though an appeal court must intervene when there is a material
    error, a serious misapprehension of the evidence, or an error in law, it is not
    entitled to overturn a support order simply because it would have made a
    different decision or balanced the factors differently.

(1)

Child Support

[37]

In
Francis v. Baker
, at paras. 42-49, the Supreme Court discussed the
    circumstances in which the presumptive Table amount in the
Guidelines
can be displaced.  Section 3 of the
Guidelines

establishes a
    presumption in favour of the Table amount and the party seeking to deviate from
    that amount bears the onus of rebutting the presumption. That party is not
    obliged to call evidence and may simply choose to question the opposing partys
    evidence. However, the evidence must, in its entirety, be sufficient to raise a
    concern that the Table amount is inappropriate. There must be clear and
    compelling evidence for departing from the
Guidelines

amount. The
    factors to be considered in determining both whether the
Guidelines
approach is inappropriate and the appropriate level of support, are the
    conditions, means, needs and other circumstances of the child and the financial
    ability of both parents to contribute. Only after examining all the
    circumstances of the case should a court find the table amount to be
    inappropriate and craft a more suitable support award. To determine appropriateness,
    the Court must have sufficient evidence. Trial judges have the discretion to
    determine on a case-by-case basis whether a child expense budget is required
    and they have the power to order it. When the presumption in s. 3(2)(a) is
    rebutted, child support can then be set above or below the Table amount.

[38]

In
Lewi
, the majority observed that s. 3(2)(b) of the
Guidelines

only applies in the case of an adult child when the court determines that
    the Table
approach
is inappropriate. At paras. 127-129, Juriansz J.A.
    explained that the focus of the inquiry at this stage is on the
approach
rather than the amount:

Section 3(2) provides two ways of determining the amount of
    child support for a child of majority age. Under s. 3(2)(a), the amount of
    support for a child over the age of majority is calculated in exactly the same
    way as that for a minor child. The opening words of s. 3(2)(b) indicate that
    the amount determined by applying s. 3(2)(a) is the presumptive amount. Section
    3(2)(a), by adopting the same approach for children of majority age that
    applies to minor children, fosters predictability, consistency and efficiency
    in the resolution of disputes concerning the amount of support for children of
    majority age.

Section 3(2)(b) only comes into play "if the court
    considers that approach to be inappropriate". It is apparent that the word
    "approach" was chosen with care, as the word "amount" is
    used six times in the section...The words "that approach" refer to
    the technique dictated by s. 3(2)(a)namely applying the Guidelines "as if
    the child were under the age of majority". I will refer to that technique
    as the "standard Guidelines approach". Before resorting to its
    discretion under s. 3(2)(b), the court must conclude that it is inappropriate to
    apply the Guidelines as if the child who is actually of majority age were a
    minor.

The word "approach" makes it clear that the court
    cannot depart from the application of the Guidelines simply because it
    considers the "amount" determined under s. 3(2)(a),
i.e.
, the table amount or additional expenses under
    s. 7, to be inappropriate. It must be satisfied that the standard Guidelines
    approach is inappropriate; clearly an exceptional situation rather than the
    rule. This further promotes predictability, consistency and efficiency in
    family law litigation.

[39]

In
    considering whether the Table
approach
is appropriate, a number of
    courts
[2]
have made reference to the commentary of
James C. MacDonald,
    Q.C. and Ann C. Wilton,
Child Support Guidelines: Law and Practice
, 2nd ed., looseleaf (Toronto: Carswell, 2004) vol. 1, at p. 3-10:

The usual Guidelines approach is based on
    factors that normally apply to a child under the age of majority; that is the
    child resides with one or both parents, is not earning an income and is dependent
    on his or her parents. It is also based on the understanding that, though only
    the income of the person paying is used to calculate the amount payable, the
    other parent makes a significant contribution to the costs of that child's care
    because the child is residing with him or her.
The closer the circumstances
    of the child are to those upon which the usual Guidelines approach is based,
    the less likely it is that the usual Guidelines calculation will be
    inappropriate. The opposite is also true.
Children over the age of majority
    may reside away from home and earn a significant income. If a child is not
    residing at home, the nature of the contribution towards the child's expenses
    may be quite different. [Emphasis added].

[40]

Here,
    in determining whether Antonis circumstances, including his receipt of ODSP
    income support and his disability, make the
Guidelines

approach
    inappropriate, it is necessary to examine the nature and purpose of ODSP
    support and the impact of child support on ODSP payments.

(2)

ODSP

[41]

The
ODSPA

recognizes that government, communities, families and
    individuals share responsibility for providing support to persons with
    disabilities: s. 1(b). The intent of the program, as expressed in its
    Directives, is to provide supports necessary to enable individuals and families
    to live as independently as possible in the community and to lead more
    productive, dignified lives.

[42]

To
    these ends, the program provides income support, health benefits and employment
    supports to people with disabilities in financial need. The policy of the
ODSPA
,
    insofar as it applies to adult children with disabilities, reflects the
    principle expressed by the Supreme Court of Canada in
Krangle (Guardian ad
    litem of) v. Brisco
,
2002 SCC 9, [2002] 1 S.C.R. 205, at para. 40,

that society shares the responsibility of caring for adults with
    disabilities:

It is the policy of the Province of
    British Columbia to provide care for disabled adults. This policy is expressly
    stated in the
BC Benefits (Income Assistance) Act
, which confirms in the preamble that "British
    Columbians are committed to preserving a social safety net that is responsive
    to changing social and economic circumstances". When a disabled person
    becomes an adult, the burden of his or her care shifts from the parents to
    society as a whole, and it is accepted as fair and just that the continued
    burden of care of disabled adults should be spread over society generally. At
    one time, it may well have been the moral responsibility of parents to care for
    a disabled child for as long as they lived. But for some decades now, that
    moral responsibility has shifted to British Columbia society as a whole, as
    expressed by legislation enacted and preserved by successive governments. No
    evidence was presented for the proposition that it is shameful or wrong for
    parents to accept the benefits provided by the government which allow adult
    disabled children to be cared for under the social security network of the
    state. Great as social and medical progress may be, disability will inevitably
    strike some members of society, randomly and irrationally. It is not immoral
    for a society to say that when this happens, the burden will not be confined to
    the individual and his family, but will be shared by society as a whole.

[43]

I
    agree with the observation in
Briard v. Briard
, 2010 BCCA 431, at
    para. 18

that this statement does not mean that the entire burden of
    caring for disabled adult children has shifted to society. Chief Justice McLachlin
    acknowledged at para. 35 that, under the British Columbia
Family Relations
    Act
, R.S.B.C. 1996, c. 128, both parents must contribute equally when a
    child cannot leave home and remains a charge or burden on his or her
    parents.

[44]

The
    determination of the amount of
ODSPA
income support requires the
    calculation of a basic needs amount to assist with the costs of food,
    clothing, transportation and other needs, as well as a shelter allowance. Qualified
    recipients such as Antoni, whose parents provide them with housing and food,
    are considered to be in board and lodging and receive a benefit under that
    heading. Antonis present benefit is $814 per month.

[45]

In
    order to determine the amount of the benefit, a determination is made under O.
    Reg. 222/98 of the total budgetary requirements of the benefit unit. In this
    case, Antoni himself is regarded as a benefit unit. As described in the
    Regulation, the amount of income support is generally calculated by reducing
    the budgetary requirements in accordance with ss. 33.2 to 36.2 of the
    Regulation, where applicable,
[3]
and subtracting from that amount all income received by the unit, determined in
    accordance with ss. 37-43 of the Regulation. Income includes all payments of
    any nature paid to or on behalf of or for the benefit of every member of the
    benefit unit: s. 37(1).

[46]

According
    to the ODSP Directives, child support paid by a parent of an adult disabled
    child is not automatically considered income to the child so as to reduce the
    amount of his or her ODSP benefits. A determination must first be made whether
    the parent gives the support payments directly to the child, or uses the
    payments for the benefit of the child. An Income Support Directive issued in November
    2011 indicates that where the child support payments are not given directly to
    the child, or used for his or her benefit, the payments will be considered the
    recipient parents income and not the childs, and will not impact the childs ODSP
    entitlement. If the payments are given directly to the child, or used for his
    or her benefit, the payments are treated as income unless an income exemption
    applies.

[47]

Some
    forms of income may be wholly or partially exempt. For example, gifts or
    voluntary payments for disability-related items and services or for education
    and training incurred because of the disability will be exempt from inclusion in
    income. As well, the ODSP recipient may receive up to $6,000 in any 12 month
    period in the form of gifts or voluntary payments for any purpose from any
    source. The ODSP Directive concerning spousal and child support recognizes that
    child support that is given directly to the child or used for the childs
    benefit will be considered income and deducted dollar-for-dollar against the
    childs ODSP support, unless one of the exemptions applies.

[48]

Child
    support payments are exempt if they are paid pursuant to a court order and are
    applied to expenses for disability-related items, services, education or
    training and have been approved by the Director and not otherwise reimbursed.

[49]

As
    Antonis ODSP trustee, the mother is required to file an annual report stating
    how the ODSP income support has been spent on behalf of Antoni. She is also
    required to verify any amounts received for disability-related expenses pursuant
    to a court order.

(3)

The interaction between ODSP and child support:
Ansell

[50]

In
Ansell
, this court considered the obverse of the question now before
    us.

[51]

There,
    the Director had treated support payments made to the separated mother of an
    adult child with autism as income paid for or on behalf of or for the benefit
    of the child, with the result that her income exceeded her budget, making her
    ineligible for ODSP. This court upheld the decision of the Divisional Court,
    which had in turn upheld the Social Benefits Tribunal in reversing the
    Directors decision and finding that the child support paid to the mother was
    not to be treated as income of the child.

[52]

In
    that case there was evidence of how the mother used the child support payments.
    They were used primarily for special horse therapy for the child  therapy that
    specifically addressed her disability. Had the payments for those purposes been
    made directly by the father, or had he obtained a child support order that
    specifically stated his payments were to be used for the childs disability-related
    expenses, they would have been excluded in calculating the childs income for
    ODSP purposes.

[53]

As
    in this case, the adult child in
Ansell
was entitled to be assessed
    independently for ODSP, notwithstanding that she was living with a parent, and
    was entitled to receive a board and lodging allowance.

[54]

This
    court described the right of disabled adults to apply for income support in
    their own right as a fundamentally important element of ODSP, notwithstanding
    that they might live with a parent who receives child support: para 27.
    Treating the child support as income in the hands of the child would be
    inconsistent with the
ODSPA
s purpose of serving persons with
    disabilities who are in need of assistance.

[55]

Laskin
    J.A. observed at para. 29 that, in the recipient mothers hands, the child
    support payments were not the childs income. It was in this context that he
    made the observation referred to earlier, that the mother could use the child
    support as she pleased:

These features show that, in her
    mother's hands, the child support payments are not Jocelyn's income. Jocelyn
    has no legal entitlement to them, no ability to access them, and no control
    over how they are spent. Her mother could use the child support to repair the
    roof, pay a hydro bill or buy a new television set. Although these expenditures
    might be said to benefit Jocelyn indirectly, they are not the kind of
    expenditures that would be characterized as income attributable to Jocelyn
    under s. 37(1) of the Regulation. They are not payments to her or on her behalf
    or, at a practical level, even for her benefit.

[56]

He
    added that the Director should have focussed not on the fact that the mother
    was receiving child support, but
on what she did with the payments
.
    Because the payments were used for disability-related purposes, they fell
    within a statutory exemption and were not to be included in the childs income.

[57]

Laskin
    J.A. also noted that to treat the payments as income would undermine the
    objective of shared responsibility for the support of disabled adults and would
    unfairly discriminate against the children of separated parents. In an intact
    family, parental income that benefits a disabled child would not be considered
    in calculating that childs income for the purpose of ODSP entitlement. On the
    other hand, support payments in the hands of a single parent would qualify as
    income, resulting in discriminatory treatment.

(4)

Was the 3(2)(a) approach inappropriate?

[58]

In
    my respectful view, it was an error in principle to apply the Table approach.
    Antonis annual receipt of almost $10,000 in the form of ODSP income support
    was, in itself, sufficient to displace the one-size-fits-most approach in s.
    3(2)(a) of the
Guidelines
in favour of the tailor made approach in
    s. 3(2)(b). That approach would have regard to Antonis condition, means,
    needs and other circumstances. That approach is particularly appropriate in
    light of Antonis disability and societys commitment to share in his care.

[59]

Antonis
    eligibility for ODSP is based on a determination that his budgetary
    requirements exceed his income. Since he receives a payment in respect of board
    and lodging, it is reasonable to conclude that he established a budgetary
    requirement for this expense. As his mother and her spouse provide that board
    and lodging, it is also reasonable to conclude that some portion of the ODSP he
    receives is to enable him to make a contribution to the cost of his board and
    lodging.

[60]

I
    agree with Kiteley J. that the trial judge erred in finding the ODSP payments
    were Antonis to use as he wished  that he could use them to take a trip, buy
    a car or buy liquor and in describing the payments as Antonis spending money
    of his own: paras. 21 and 26. To treat the ODSP as discretionary spending
    money does not reflect the purpose of ODSP income support. The money is paid
    to the mother as Antonis trustee and she is required to report annually on how
    the money has been spent.

[61]

I
    also agree with Kiteley J.A. that there is at least the potential for overlap
    between the amounts paid by the father for child support and the amount
    received by Antoni as income support for board and lodging. As Kiteley J.
    observed, at para. 106:

As indicated in
Ansell

#1
,
the
Child Support Guidelines
were
    intended to represent a calculation of average expenditures for children that
    includes items otherwise categorized as "board and lodging". The
    overlap between the reason for ODSP income support and child support must be
    recognized in the analysis as to whether the approach in s. 3(2)(a) is
    inappropriate. It was an error of law to have concluded otherwise.

[62]

As
    the majority in the Divisional Court noted, it would be reasonable to conclude
    that a significant portion of child support would be intended to contribute to
    the childs needs for shelter, food and clothing and the multitude of other
    expenses associated with raising a child (para. 19).

[63]

I
    acknowledge the majoritys concern about circularity  that reducing child
    support to reflect the childs receipt of ODSP could be unfair because ODSP
    payments may themselves be reduced due to the recipient parents application of
    child support to the non-exempt living expenses of the child. However, a
    reduction of ODSP would only be triggered by an increase in the amount of child
    support which the mother gives directly to Antoni or uses for his benefit. Calculating
    support under s. 3(2)(b), which may or may not result in an amount different
    from the Table amount, will not necessarily affect the mothers use of the
    support payments or reduce the amount of the ODSP payments that Antoni receives.
    The impact, if any, of the change in support on ODSP is a matter that can be
    taken into account under the s. 3(2)(b) approach.

[64]

ODSP
    reflects societys commitment to sharing financial responsibility for adults
    with disabilities. It makes little sense to calculate child support on the
    basis that this responsibility falls only on the parents. In my view, the
    assumption of some responsibility by the state and Antonis receipt of income
    support for his board and lodging make the Table approach inappropriate. These
    circumstances change the equation and call for a bespoke calculation based on Antonis
    unique condition, means, needs and other circumstances, including his receipt
    of ODSP, and the ability of his parents to contribute to his support.

[65]

It
    is useful to analogize to the cases involving adult children attending
    university, living away from home and earning an income, thereby contributing
    to their own education and support. There are numerous cases in which courts
    have concluded that these circumstances make the usual
Guidelines

approach
    inappropriate because the assumptions underlying the approach are not
    present.

The Saskatchewan Court of Appeal noted
    in
Geran v. Geran
, 2011 SKCA 55, 371 Sask. R. 233 that the fact that
    the child is earning a substantial income serves to displace one of the basic
    assumptions on which the Table amounts are based: namely, that children under
    the age of majority have no incomes of their own.
This
    operates in turn to throw the appropriateness of the table amount into doubt,
    which suggests in general that the amount is more appropriately determined
    pursuant to subsection 3(2)(b)
:
Geran v. Geran
, at para. 65.
    See also
Rebenchuk v. Rebenchuk
, 2007 MBCA 22, at paras. 29-32;
W.P.N.
    v. B.J.N.
, 2005 BCCA 7, at para. 42.

[66]

There
    have as well been a number of cases at the trial level in which ODSP and other
    forms of social assistance received by the child have been taken into account
    in determining the appropriate support:
Magne v. Magne

(1990),
    26 R.F.L. (3d) 364 (Man Q.B.);
Cossette v. Cossette
,
[2003]
    O.J. No. 4928 (S.C.);
Liscio v. Abram
, [2009] O.J. No. 3406 (S.C.)
;
Welsh v. Welsh

(1998), 79 O.T.C. 81 (Gen. Div.);
Blonski v.
    Blonski
,
2010 ONSC 2552. In
Henry v. Henry
, 2010 ONSC
    6990, the court found that the receipt of ODSP income by one of the children
    made the
Guidelines
approach not appropriate. See also
Vivian v.
    Courtney
, 2012 ONSC 6585.

[67]

The
    Table amount is predicated on the parents alone sharing responsibility for the financial
    support of their child. In the case of adult children with disabilities, the
ODSPA

commits society to sharing some responsibility for support. In my view,
    this makes the s. 3(2)(a) approach inappropriate, and s. 3(2)(b) should be
    applied to achieve an equitable balancing of responsibility between Antoni, his
    parents and society.

(5)

The s. 3(2)(b) analysis

[68]

As
    I have concluded that the father discharged the onus of showing the Table
    approach was inappropriate, it is necessary to determine an appropriate amount
    of child support under s. 3(2)(b).

[69]

The
    trial judge did not address this issue because he found the Table approach was
    not inappropriate. Having regard to the disparity in the parties incomes, it was
    unlikely that calculating the fathers support payments under s. 3(2)(b) would result
    in a reduction. The Divisional Court majority agreed at para. 42:

Even if the adult child's expenses were capable of
    determination and shared by the parents after deduction of the full amount of
    the ODSP benefits now being paid, there is no basis to conclude that this would
    result in a support payment markedly different from the Table amount. The onus
    lay upon the father to justify a departure from the Table approach and the
    evidence he assembled did not do so.

[70]

Justice
    Kiteley, on the other hand, would have drawn an adverse inference against the mother
    for failing to provide evidence of Antonis expenses and would have deducted
    the full amount of the ODSP payments from the Table amount, which she
    calculated at $1,000. She would have required the father to pay $186 per month,
    or about $2,200 per year, for Antonis support.

[71]

The
    difficulty in this case is that there is insufficient evidence of Antonis
    condition, means, needs and other circumstances to enable this court to make a
    fully-informed, tailor-made decision. The parties have failed to focus on these
    issues and have instead taken an all-or-nothing position, the fathers position
    being that he is entitled to the benefit of all the ODSP payments and the mothers
    position being that all of the child support belongs to her and not to Antoni.

[72]

There
    was no evidence to show how the mother uses the ODSP payments she receives as
    Antonis trustee  no evidence as to how much, if any, was paid to him or for
    his benefit or how much, if any, was used to reimburse her for the room and
    board she provided. Nor was there evidence of how she used the child support
    payments. There was no evidence of Antonis expenses or how he used any portion
    of the ODSP payments. Nor was there evidence to support the trial judges
    conclusion that Antoni was likely to be permanently unemployable. There was no
    evidence about his potential employability or his ability to supplement his
    income within the boundaries permitted by ODSP without affecting his support. Finally,
    and perhaps most significantly, there was no evidence of his disability-related
    needs, nor of the expenses incurred by the mother that were attributable to
    Antoni.

[73]

Antonis
    disability was not diagnosed until he was 18, many years after the original
    support order. The support, care and treatment of a 24 year-old with a serious
    psychiatric disability may require a greater financial contribution from his
    parents than the support of a young child or a teenager without a disability. As
    Pazaratz J. observed in
Blonski
, at para. 14, we should not lose
    sight of the fact that, by definition, ODSP payments are intended to assist
    people with special needs. Recipients of ODSP may have special or
    extraordinary expenses which go beyond what either the Table amount or income
    support may cover. It is possible, therefore, that the support calculation
    under s. 3(2)(b) will not be less than the Table amount, even after taking into
    account the receipt of ODSP.

[74]

While
    I am conscious that the parties have already invested a considerable amount in
    this dispute, the thrust of their evidence has been misdirected. It would not
    be fair to them, or more importantly to Antoni, for this court to attempt a
    back-of-the-envelope calculation of the amount of support under s. 3(2)(b). In
    such circumstances, it is appropriate for an appellate court to refer the
    matter to trial so the issue can be addressed on a complete record: see, for
    example,
Vivian v. Courtney
.

G.

Conclusion

[75]

For
    these reasons, I would allow the appeal and remit the matter for trial in order
    to determine the appropriate amount of support under s. 3(2)(b) of the
Guidelines
on a more complete record. The record will include updated financial
    information from both parties, a child support budget, and a personal budget
    for Antoni. These budgets will include a description of the mothers use of the
    ODSP payments on Antonis behalf, her use of the support payments she received
    from the father, and her proposed use of any additional payments she seeks.

[76]

At
    the parties request, costs may be addressed by written submissions, not
    exceeding five pages in length, together with a costs outline. The appellant
    shall file his submissions with the Registrar within 15 days and the respondent
    shall have 15 days within which to reply.

Released: June 12, 2014 (S.E.P.)

G.R.
    Strathy J.A.

I
    agree R.G. Juriansz J.A.

I
    agree S.E. Pepall J.A.

[1]
For the sake of convenience, I will generally refer to the appellant as the
    father and the respondent as the mother.

[2]
See, for example,
Canada v. Canada-Somers
, 2008 MBCA 59.

[3]
To address situations such as a child of a member of a benefit unit who is in
    shared custody, a member who is incarcerated or a member who is in hospital.


COURT OF APPEAL FOR ONTARIO

CITATION: Simpson Wigle Law LLP v. Lawyers Professional
    Indemnity Company, 2014 ONCA 492

DATE: 20140625

DOCKET: C58202

Gillese, van Rensburg and Hourigan JJ.A.

BETWEEN

Simpson Wigle Law LLP, Mary Catherine Wigle, as
    Estate Trustee of the Estate of Francis Wigle, deceased, and Paul Milne

Applicants (Appellants)

and

Lawyers Professional Indemnity Company

Respondent (Respondent)

Alan J. Lenczner and Elizabeth Bowker, for the appellants

J. Stephen Cavanagh, for the respondent

Heard: May 5, 2014

On appeal from the judgment of Justice David L. Edwards
    of the Superior Court of Justice, dated December 20, 2013.

Gillese J.A.:

OVERVIEW

[1]

Simpson Wigle Law LLP (Simpson
    Wigle) is a law firm that is insured under a policy of insurance issued by the
    Lawyers Professional Indemnity Company (LawPro or the respondent).  The
    LawPro insurance policy (Policy No. 2004-001) has a limit of liability of $1
    million per claim, with an aggregate limit of $2 million (the Policy).

[2]

The appellants brought an
    application for a declaration that the allegations in an underlying action
    against them constituted two separate claims under the Policy, rather than a
    single claim (the Application).  A statement of claim and an amended
    statement of claim (together the Statement of Claim) have been filed in the
    underlying action.

[3]

The application judge found
    that the allegations made in the Statement of Claim were related and that, as
    a result, they constituted one claim for the purposes of the Policy.  By
    judgment dated December 20, 2013 (the Judgment), he declared that the Statement
    of Claim contains a single claim.

[4]

The appellants ask this court
    to set aside the Judgment and declare that the Statement of Claim discloses more
    than one claim, within the meaning of the Policy.

[5]

For the reasons that follow,
    I would allow the appeal and make the requested declaration.

BACKGROUND

[6]

The following alleged facts
    are drawn from the Statement of Claim and do not constitute findings of fact.

[7]

Angelo Agro (Angelo) and
    his brother, Frank Agro (Frank), jointly owned and operated a number of
    agricultural and related businesses and properties in Waterdown, Ontario.  They
    were both clients of Francis Wigle and Simpson Wigle, the law firm in which he
    was a partner.

The Committeeship Application

[8]

Angelo suffered from
    Parkinsons Disease and other physical ailments.  In view of this, Mr. Wigle prepared
    a power of attorney for Angelo in 1990 and a second one in 1991.  In both
    powers of attorney, Frank was named as Angelos attorney, and Angelos nephew,
    Richard Agro, was named as the alternate attorney.

[9]

In 1993, Mr. Wigle and CIBC
    Trust Corporation (CIBC) brought an application in which they asked the court
    to declare Angelo mentally incompetent and appoint them as committees of Angelos
    person and estate (the Committee Application).

[10]

Simpson
    Wigle acted as the counsel of record for the Committee Application.  Mr. Wigle
    prepared all of the Committee Application materials.

[11]

In
    the Committee Application, the existence of Angelos two powers of attorney was
    disclosed.  As well, there was an affidavit from Frank, in which Frank indicated
    that he was unable and unwilling to act as Angelos committee.  However, the
    materials filed on the Committee Application did not include the two powers of
    attorney.  And, significantly, they did not disclose that in the powers of
    attorney, Richard Agro was named as Angelos alternate attorney.

[12]

By
    order dated August 19, 1993, Mr. Wigle and the CIBC were appointed as the committees
    of Angelos person and estate.  They acted in that capacity until Angelos
    death on June 22, 2000.

[13]

Simpson
    Wigle acted as solicitor to Angelos committees.

[14]

During
    the time in which Mr. Wigle and the CIBC acted as Angelos committees, Angelos
    estate was charged with committeeship fees, legal fees, administration fees,
    and bank overdraft fees.  Angelos care costs were also paid out of his estate.

The Sale of Properties Jointly Owned by Angelo and Frank

[15]

Frank
    died in 1996.  Under his will, which Mr. Wigle had drafted, Mr. Wigle and Paul
    Milne, another lawyer and partner at Simpson Wigle, were named his executors.

[16]

Mr.
    Wigle declined to act as executor, leaving Mr. Milne as the sole executor.
    However, Mr. Wigle acted as solicitor to Franks estate and played an active
    role in its administration.

[17]

Messrs.
    Wigle and Milne arranged for the disposition of six real estate properties
    jointly owned by Frank and Angelo.  Considered from Angelos perspective, there
    was no need for the sales, which were allegedly improvident or below market
    value.  Two of the properties had the potential to be included in a designated
    Waterdown urban expansion area but no steps were taken in that regard.  In the
    Statement of Claim, it is alleged that selling the two properties without
    having had them included in the Waterdown area resulted in significant loss to
    Angelos estate because their value would have been much greater had they been
    within the urban boundary.

[18]

Mr.
    Wigle was the solicitor who negotiated and effected these sale transactions.

[19]

Mr.
    Milne, on behalf of Franks estate, brought an application in respect of a farm
    property  referred to as the Highway No. 5 Property  which Angelo and Frank
    also jointly owned (the Highway No. 5 Property Application).  In the Highway
    No. 5 Property Application, the court was asked to declare that Frank and
    Angelo owned the Highway No. 5 Property by way of a partnership, rather than as
    joint tenants.  Accordingly, instead of Franks interest in the Highway No. 5 Property
    passing to Angelo on Franks death, Franks estate would retain a 50% interest in
    it.

[20]

Mr.
    Wigle drafted the materials for the Highway No. 5 Property Application,
    including the affidavits for both the applicants and the respondents.  The
    materials filed on behalf of Angelo failed to include relevant material that
    would have affirmed that Frank and Angelo always intended to jointly own the Highway
    No. 5 Property.

[21]

The
    Highway No. 5 Property Application was successful and Franks estate was declared
    to have a 50% ownership interest in that property.

[22]

Angelos
    estate appealed.  The appeal was resolved by means of a settlement negotiated
    between Messrs. Wigle and Milne, in which Angelos estate obtained an
    additional 12.5% interest in the Highway No. 5 Property.

[23]

Thereafter,
    Mr. Wigle acted as solicitor for Franks estate in respect of the sale of
    Franks portion of the Highway No. 5 Property.

The Statement of Claim

[24]

Following
    Angelos death in 2000, his estate trustees (who included Richard Agro) started
    the underlying action against the defendants Simpson Wigle, Messrs. Wigle and
    Milne, and the CIBC.  The appellants are those defendants that are insured by
    the Policy, namely all of the defendants except the CIBC.

[25]

The
    Statement of Claim sought, among other things:

·

a declaration that the appellants acted in breach of their fiduciary
    obligations and of the duties of care and competence owed to Angelo and his
    estate;

·

a declaration that the appellants acted in a conflict of interest
    in respect of the administration of the person and estate of Angelo;

·

damages for breach of fiduciary duty, breach of contract and
    negligence; and

·

an order disgorging all committeeship, guardianship,
    administration and legal fees received by the appellants in respect of the
    administration of the person and affairs of Angelo after the Committee Application
    was granted.

[26]

At
    para. 19 of the Statement of Claim, it is alleged that had the appellants
    properly disclosed Angelos 1990 and 1991 powers of attorney, Richard Agro
    would have assumed the role of attorney for Angelos person and estate, and Mr.
    Wigle and the CIBC would never have been appointed as Angelos committees.

[27]

Specifically,
    at paras. 19(a)-(g) of the Statement of Claim, Angelos estate is said to have suffered
    the following losses as a result of the allegedly wrongful appointment of Mr.
    Wigle and the CIBC as Angelos committees:

a)

fees in excess of
    $620,000 paid by Angelos estate to Mr. Wigle and the CIBC as committees, which
    would not have been incurred had Richard Agro served as Angelos attorney;

b)

legal fees of
    approximately $125,000 charged by Simpson Wigle and Mr. Wigle to Angelos
    person and estate, which would not have been incurred had Richard Agro served
    as Angelos attorney;

c)

administration fees
    and expenses charged by the CIBC for maintaining and managing the bank account
    of Angelos committees;

d)

the improvident or
    below market value sales of the six properties that Angelo owned jointly with
    Frank;

e)

the failure to take
    steps to have two of these properties included in a designated Waterdown urban
    expansion area, an action that would have increased these properties values;

f)

care costs
    in excess of $490,000 that were charged to Angelos estate, despite Franks
    direction (contained in documents drafted by Mr. Wigle) that such costs were to
    be paid from Franks estate; and

g)

overdraft charges
    unnecessarily incurred on Angelos bank account due to the actions of Angelos
    committees.

[28]

At
    paras. 21-23 of the Statement of Claim, Messrs. Wigle and Milne are alleged to
    have placed themselves in an untenable conflict of interest by taking on
    various roles in respect of Angelos and Franks estates, particularly because
    the interests of the two estates were adverse to one another in a number of
    respects.

[29]

At
    para. 23 of the Statement of Claim, Messrs. Wigle and Milne are alleged to have
    preferred the interests of Franks estate to those of Angelos estate by:

a)

failing to pay
    Angelos care costs out of Franks estate;

b)

carrying out the
    improvident or below market real property sales;

c)

acting for the estates
    of both Angelo and Frank with respect to the Highway No. 5 Property and failing
    to disclose on the Highway No. 5 Property Application evidence showing that Frank
    and Angelo owned the property as joint tenants; and

d)

Mr. Wigle acting as
    solicitor for Franks estate on the sale of the Highway No. 5 Property without
    regard to Angelos estate, to whom he owed continuing fiduciary duties.

[30]

The
    application judge found that prior to the Application being heard, the estate
    trustees were no longer pursuing the allegations in respect of the Highway No.
    5 Property.

[31]

The
    appellants have confirmed that of the claims asserted in para. 23 of the
    Statement of Claim, only the claim at para. 23(b) is still being pursued.  The
    claim at para. 23(b) is the same as the claim advanced at paras. 19(d) and (e)
    of the Statement of Claim.

THE RELEVANT POLICY PROVISIONS

[32]

As
    noted earlier, the Policy has a limit of liability of $1 million per claim,
    with an aggregate limit of $2 million.

[33]

The
    obligation to pay damages is set out in Part I of the Policy:

A.

DAMAGES

To pay on behalf of the INSURED all sums which the INSURED
    shall become legally obligated to pay as DAMAGES arising out of a CLAIM,
    provided the liability of the INSURED is the result of an error, omission or
    negligent act in the performance of or the failure to perform PROFESSIONAL
    SERVICES for others.

[34]

Claim
    is defined in Part V(b) of the Policy as:

(i) a written or oral demand for money or services; or

(ii) a written or oral allegation of breach in the rendering
    or failure to render PROFESSIONAL SERVICES;

received by the INSURED and
resulting from

a single

or related error(s), omission(s) or negligent act(s) in the performance of
    or failure to perform PROFESSIONAL SERVICES.
[
[1]
]

All CLAIMS
, or circumstances of an error, omission or
    negligent act which any reasonable person or LAW FIRM would expect to
    subsequently give rise to a CLAIM,
which arise from a single or related
    error(s)
,
omission(s), or negligent act(s),

shall be considered a
    single CLAIM
regardless of the number of INSUREDS or the number of persons
    or organizations making the CLAIM or the time or times the error(s),
    omission(s), or negligent act(s) took place.

[Emphasis added; capitals
    in the original.]

[35]

Part
    III of the Policy sets out exclusions to coverage.  Para. (h) of Part III stipulates
    that the Policy does not apply:

(h) to any CLAIM in any way relating to or arising out of legal
    fees, accounts or any fee arrangement involving the INSURED

THE DECISION BELOW

[36]

Before
    the application judge, the appellants argued that the allegations in the
    Statement of Claim gave rise to at least two separate claims: one claim arising
    from the allegedly improper appointment of Mr. Wigle and CIBC as committees of Angelos
    person and estate (the POA Allegation), and a second claim arising from the
    alleged conflict of interest due to the various roles that Messrs. Wigle and
    Milne played in respect of Angelos and Franks estates (the Conflict Allegation)
    (paras. 11-13).

[37]

The
    application judge accepted the parties position that the nub of the issue to
    be decided was whether the acts or omissions alleged in the Statement of Claim
    were related, within the meaning of the Policy (para. 17).  In deciding this
    issue, the application judge began by excluding from consideration those losses
    which, in his view, are not covered by the Policy.  He concluded that because the
    Policy does not insure against disgorgement of fees or provide coverage to the CIBC,
    in para. 19, only paras. 19(d) and (e) were relevant to determining whether there
    is more than one claim (para. 25).

[38]

At
    para. 35, the application judge stated that:

If one loss is alleged to be a consequence of different
    error(s), omission(s), or negligent act(s) it is logical that the error(s),
    omission(s), or negligent act(s) are related.

[39]

With
    that in mind, the application judge gave three reasons for finding that the POA
    Allegation and the Conflict Allegation are related, within the meaning of the
    Policy.

[40]

First,
    in his view, the losses said to have been sustained in the two allegations are
    the same, with the exception of the losses alleged in respect of the Highway
    No. 5 Property (para. 37).

[41]

Second,
    he saw the fiduciary duty that Mr. Wigle owed to Angelo to be the same for both
    allegations and as arising from the same fact:  the failure to disclose the
    powers of attorney (para. 42).

[42]

Third,
    the fiduciary duty that Mr. Milne owed to Angelo was the same for both allegations
    and for the same reason:  Mr. Milne was a partner at Simpson Wigle with Mr.
    Wigle, who owed a fiduciary duty to Angelo.  Mr. Milnes actions as Franks
    executor breached that same fiduciary duty (paras. 46-47).

[43]

The
    application judge stated that even if he had determined that the Statement of
    Claim contained two claims, as a result of the fact that the estate trustees
    were no longer pursuing the Highway No. 5 Property claim, he would have found
    that the loss claim is identical for both the Committee Allegation and the
    Conflict Allegation (paras. 49-51).

THE ISSUE

[44]

This
    appeal raises a single issue:  did the application judge err in finding that
    the facts alleged in the Statement of Claim disclose a single claim under the Policy?

ANALYSIS

A Preliminary Point

[45]

As
    explained above, in deciding whether the Statement of Claim disclosed one or
    more than one claim, the application judge excluded from consideration all of
    para. 19 of the Statement of Claim, with the exception of paras. 19(d) and (e).
    He did so because the Policy does not insure against disgorgement of fees or provide
    coverage to the CIBC.

[46]

The
    appellants submit that the application judge erred in approaching the issue on
    the basis that in para. 19, only clauses (d) and (e) were relevant.  I agree.

[47]

The
    application judge was correct when he stated that the Policy does not apply to
    any claim relating to, or arising out of, legal fees:  see Part III(h), set out
    above.  He was also correct when he noted that the Policy does not provide
    coverage to the CIBC.

[48]

However,
    in my view, in reaching the conclusion that the Policy did not cover paras.
    19(a), (b), (c), (f) and (g), he misunderstood the nature of the damages being
    sought.  In those paragraphs, the estate trustees are not asking for the
    disgorgement of fees that were paid.  Rather, they seek to recover damages for
    amounts that were needlessly expended on Angelos behalf due to the wrongful
    appointment of Mr. Wigle and the CIBC as the committees of Angelos person and
    estate.  They say that had Richard known that Angelo had named him as the alternate
    attorney in his powers of attorney, Richard would have assumed the role of
    attorney when Frank was unable or unwilling to so act.  If that had occurred, Mr.
    Wigle and the CIBC would never have been appointed committees of Angelos
    person and estate.  Thus, so the claim runs, all the costs, fees and expenses
    that flowed from Mr. Wigle and the CIBCs appointment as Angelos committees
    were needless and the appellants are liable in damages representing those
    costs, fees and expenses.

[49]

Accordingly,
    the claim at paras. 19(a), (b), (c), (f) and (g) is not a claim for legal fees
    in the sense contemplated by Part III(h) of the Policy nor is it an attempt to
    seek coverage for the CIBC.  The exclusion in Part III(h) is intended to
    exclude from coverage legal fees an insured receives
qua
legal fees  in
    other words, as payment for his or her work as a lawyer.  As I have explained,
    it is not the return of legal (and other) fees that the estate trustees seek in
    the relevant clauses of para. 19 of the Statement of Claim.  Rather, they seek damages
    for those fees which they allege were needlessly paid from Angelos estate
    because of the wrongful appointment of Mr. Wigle and the CIBC as his
    committees.

[50]

Thus,
    in my view, the application judge erred in considering only the negligence
    claims in respect of the sales of the real property (i.e. paras. 19(d) and (e)
    and 23(b) of the Statement of Claim) when deciding the issue before him,
    namely, whether the Statement of Claim disclosed one or more claims.

The Central Question

[51]

This
    brings us to the central question raised on appeal:  does the Statement of
    Claim disclose one or more than one claim, within the meaning of the Policy?

[52]

In
    answering this question, the wording of the Policy is the starting point.

[53]

Before
    considering the key Policy provision, however, it is useful to recall the general
    principles that apply to the interpretation of insurance policies.

General Principles of Insurance Policy Interpretation

[54]

As
    the application judge noted at para. 21 of his reasons, the Supreme Court of
    Canada recently reiterated the general principles governing the interpretation
    of insurance policies in
Progressive Homes Ltd. v. Lombard General Insurance
    Co. of Canada,
2010 SCC 33, [2010] S.C.R. 245, at paras. 22-24.   These
    principles can be summarized as follows:

The primary interpretive principle is that when the language of
    the policy is unambiguous, the court should give effect to that language,
    reading the policy as a whole.

Where the language of the policy is ambiguous, general rules of
    contract construction apply.  The courts should prefer interpretations that are
    consistent with the reasonable expectations of the parties, so long as such an
    interpretation can be supported by the text of the policy.  The courts should avoid
    interpretations that would give rise to an unrealistic result or that would not
    have been in the parties contemplation at the time the policy was concluded.
    Courts should strive to ensure that similar insurance policies are construed
    consistently.

When the rules of contract construction fail to resolve the
    ambiguity, courts will construe the policy contra proferentem  against the
    insurer.  This means that coverage provisions are interpreted broadly, and
    exclusion clauses narrowly.

The Key
    Policy Provision

[55]

There
    is no dispute that the claims advanced in the Statement of Claim fall within
    the definition in Part V(b)(ii) of the Policy.  As we have seen, claim is
    defined in that provision to include a written allegation of breach in the
    rendering of a professional service.  There can be no question in this case
    that the claims are for breaches of the professional services rendered by Mr.
    Wigle and Simpson Wigle.

[56]

The
    key words in Part V(b)(ii) of the Policy, for the purposes of this appeal, are
    the following:

All CLAIMS  which arise from a single or related error(s),
    omission(s), or negligent act(s), shall be considered a single CLAIM
regardless of the number of INSUREDS or the number of persons or organizations
    making a CLAIM or the time or times the error(s), omission(s) or negligent
    act(s) took place.  [Emphasis added.]

[57]

On
    a plain reading of this provision, claims which arise from related error(s),
    omission(s) or negligent act(s) shall be considered a single claim, regardless
    of the number of insured, the number of persons making a claim, or the times at
    which the alleged errors, omissions or negligent acts took place.

[58]

In
    this case, the claims in the Statement of Claim arise from a number of alleged
    errors, omissions and negligent acts.  Thus, the question becomes, are the
    alleged errors, omissions or negligent acts related?

Meaning of
    the word Related

[59]

Three
    cases assist in determining the meaning of related.  The first is
Simpson
    (Receiver of) v. Lloyds Underwriters

(2008), 92 O.R. (3d) 551
    (S.C.).  This court expressly affirmed the analysis and conclusions of the
    application judge in
Simpson
: 2009 ONCA 327, at para. 1.  The other
    two cases are
Elfstrom, Smith & Co. v. Kansa Gen. Ins. Co.

(1988),
    29 B.C.L.R. (2d) 41 (S.C.) and
Dunn v. Chubb Insurance Co. of Canada
,
    2009 ONCA 538, 97 O.R. (3d) 701.

[60]

In
Simpson
, a real estate council responsible for overseeing the conduct
    of real estate brokers claimed on its insurance policy for consumer deposits lost
    due to thefts perpetrated by a real estate broker and her corporation.  A total
    of 22 claimants made 25 claims.  The councils insurance policy provided that
    each claim had a limit of $100,000, but the aggregate liability for a series of
    related occurrences was capped at $500,000.  The question for the application
    judge was whether the claims were separate occurrences or a series of related
    occurrences, for the purposes of the policy.

[61]

In
    answering that question, the application judge began by setting out dictionary
    meanings of related.  These included associated or connected with and of
    the same type; in the same group, category, etc.:
Canadian Oxford
    Dictionary
, 2d ed.,
sub verbo
related.  The application judge
    observed that if the court were to take the meaning of related as of the
    same type; in the same group, category, etc., any two acts of theft would be
    related, merely because they were thefts.  There would be no need for any other
    connection in terms of time, place or person.  In his view, this would be an
    unreasonable interpretation  not just any type of relation is necessary but a
    particular kind of relation (paras. 26-27).

[62]

At
    para. 28 of
Simpson
, the application judge found that because of the
    breadth of the meaning of related, its scope must be determined in the
    context of the policy in question.

[63]

After
    reviewing other provisions of the councils policy, he concluded that the
    policy was intended to protect individual consumers who provide deposits to a
    registered real estate agent or broker (para. 32).  The application judge then found
    that the thefts constituted 22 unrelated occurrences, one for each victim.  The
    fact that the thefts were part of a single scheme by the same person did not
    make them part of a series of related occurrences, save for the multiple claims
    by the same claimant.  Multiple frauds against the same victim were found to be
    related occurrences because the thief, the victim and the type of occurrence
    causing the loss were the same (para. 36).

[64]

In
Elfstrom
, a chartered accounting firm that acted as receiver-manager
    of a number of farm companies was sued for failing to: (1) consider and
    investigate the tax benefits that would have accrued to the companies had they
    pursued an amalgamation, and (2) properly manage the companies property.  The
    issue was whether these claims arose from related acts for the purposes of
    the firms insurance policy.

[65]

The
    court stated that it was necessary to consider the similarity or differences
    between the alleged errors, and the kind and character of the alleged losses.
    It found that the claims were not related because the errors underlying the
    claims were different in kind and substance (p. 48).  While the errors were
    alleged against the same party acting in the same capacity, they were the
    result of separate failures of judgment by the firm.  The first claim was based
    on a failure to advise or propose amalgamation, an error arising from a failure
    to properly exercise accounting expertise, whereas the other claim arose from
    failures with respect to preservation of property (hay and equipment).

[66]

In

Dunn
, this court considered, among other things, whether two
    schemes alleged to have been perpetrated by directors and officers of Nortel
    Networks Limited were Interrelated Wrongful Acts, for the purposes of the
    directors and officers liability insurance policy.  Interrelated Wrongful Acts
    was defined to mean all causally connected
Wrongful Acts
 (emphasis in
    original).

[67]

The
    first scheme, allegedly perpetrated in 2001, was a revenue recognition scheme in
    which material amounts of revenues were accelerated into the previous quarter.
    The second scheme, allegedly perpetrated in 2003, was an earnings management
    scheme in which the company improperly established, maintained, and released
    reserves to smooth its quarterly earnings.

[68]

The
    appellants argued that the second scheme arose out of, or was causally
    connected to, the first scheme because they were the result of a culture of
    non-compliance throughout the whole period.

[69]

This
    court disagreed.  At paras. 58-59, it held that the allegations of misconduct
    in the two schemes were different in nature, kind and time.  The allegations
    underlying the first scheme related to different acts of non-compliance than
    those in the second scheme and the acts took place at different time frames and
    in different ways.

[70]

From
    these cases, I conclude that in determining whether the two claims in the
    Statement of Claim arise from related errors, omissions or negligent acts, the
    court should be informed by the dictionary meaning of the word related: two
    or more errors, omissions or negligent acts are related when there is a sufficient
    association or connection between them, reading the Policy as a whole and
    bearing in mind its objective.  In determining whether there is a sufficient
    association or connection, the court must consider the similarities and
    differences between the nature and kind of the alleged misconduct which
    underlies each claim, and the kind and character of the losses for which
    recovery is sought in each claim.  It will be noted that I have not included
    differences in timing between the two sets of allegations, as the court did in
Dunn
.
    The reason is the wording of Part V(b)(ii) which, it will be recalled,
    specifically provides regardless of  the time or times the error(s), omission(s)
    or negligent act(s) took place.

The Claims

[71]

In
    considering the claims in the Statement of Claim, the court must look at the
    particular alleged errors, omissions or negligent acts underlying them.  It is
    not sufficient to identify, at a general level, the relationship or obligations
    between the parties or the nature of the losses alleged to have been suffered.
    At a sufficiently general level, there is little doubt that the claims are
    related.  After all, at a general level, the claims can be said to be
    identical.  The players are the same  Angelo and Mr. Wigle and the law firm in
    which he was a partner.  The relationship between them is the same  that of solicitor-client.
    The alleged wrongdoing is the same  breach of fiduciary obligation.  And, the alleged
    losses are the same  damages for breach of fiduciary obligation.

[72]

But
    the case law warns against approaching this matter at that general level: see
Simpson
,
    at para. 27; and
Dunn
, at para. 58.  Moreover, the plain wording of the
    Policy calls for a consideration of the specific allegations underlying each
    claim.  Part V(b)(ii) dictates that the court must determine whether the claims
    arise from related errors, omissions or negligent acts.  Therefore, it is
    necessary to look behind general labels and consider the specific alleged
    errors, omissions or negligent acts that underlie each claim.

[73]

Such
    a consideration begins with a clear understanding of the claims advanced in the
    Statement of Claim.  As I have explained, after taking into consideration the
    claims that have been abandoned, the Statement of Claim fundamentally advances
    two claims.

[74]

The
    first claim arises from the allegedly improper appointment of Mr. Wigle and the
    CIBC as committees of Angelos person and estate (the Committee claim).  The alleged
    error, omission or negligent act underlying this claim is the appellants
    failure to disclose crucial information to the court that heard the Committee
    Application: namely, that in his powers of attorney, Angelo had named Richard
    Agro as his alternate attorney. The losses for which recovery is sought are damages
    representing the fees, charges and expenses that Angelos estate incurred as a
    result of Mr. Wigle and the CIBC being appointed as Angelos committees.

[75]

The
    second claim arises from the allegedly negligent administration of Angelos
    estate (the Real Property claim).  The alleged errors, omissions or negligent
    acts relate to the appellants sale of six properties in which Angelo had an
    interest, including the failure to have two of the properties brought within
    the Waterdown urban expansion area.  The damages claimed are for the diminution
    in the value of Angelos estate resulting from the improvident or unnecessary sales
    of the properties.

Do the Claims
    Arise from Related Errors, Omissions or Negligent Acts?

[76]

In
    my view, the two claims in the Statement of Claim arise from errors, omissions
    or negligent acts that are sufficiently different in nature and kind that they
    are not related within the meaning of the Policy.

[77]

Let
    us begin by comparing the specific allegations of misconduct underlying each of
    the claims.  The Committee claim is based on Simpson Wigles instrumentality,
    in 1993, in the allegedly improper appointment of Mr. Wigle and the CIBC as
    committees of Angelos person and estate.  The specific misconduct is their failure
    to disclose the appropriate information to the court during the Committee Application.
    The Real Property claim, on the other hand, arises from the allegedly
    improvident or unnecessary sales of six parcels of land in 1996 and 1997.  The
    alleged errors, omissions or negligent acts include the failure to take the opportunity
    to increase the value of two of those properties through inclusion in a
    designated Waterdown urban expansion area.  Instead of an error of omission or
    negligence (failure to include the requisite information in the court
    documentation), the Real Property claim is based on allegations of active
    mismanagement (selling at improvident values and unnecessarily) and the failure
    to take steps outside of a court process, namely, to have the designation of
    two properties changed.

[78]

It
    is clear that the allegations underlying the two claims are different in nature
    and kind.

[79]

So,
    too, is the nature of the alleged losses for which recovery is sought in the
    two claims.  The Committee claim seeks recovery for losses representing the
    costs, fees and expenses arising from the allegedly wrongful appointment of Mr.
    Wigle and the CIBC as Angelos committees.  The Real Property claim seeks
    recovery for the diminution of Angelos estate due to the improvident or
    unnecessary sales of properties in which he had an interest.  The two types of
    recovery are different in kind and character.

[80]

Moreover,
    from a legal perspective, there is an insufficient association or connection
    between the two claims because they stand independently of one another.  Regardless
    of the propriety of the appointment of Mr. Wigle and the CIBC as Angelos
    committees in 1993, it may be that one or more of the parcels of land was improvidently
    sold.  The court could find that the committees were wrongfully appointed but that
    the sales of the real property did not amount to negligent administration of
    Angelos estate.  Conversely, the court could find that the committees were
    properly appointed but that one or more of the sales was negligently
    performed.

[81]

Thus,
    as I have said, the two claims arise from allegations of errors, omissions and
    acts, which are sufficiently different in nature and kind that they are not
    related, within the meaning of the Policy.

[82]

I
    conclude on this point by noting that the issue raised in this appeal is
    whether the Statement of Claim raises one or more claims.  That is, the court
    was not asked to determine whether the Statement of Claim raises more than two
    claims.  Specifically, the court was not asked to determine whether the Real
    Property claim could be said to constitute more than one claim.

DISPOSITI ON

[83]

Accordingly,
    I would allow the appeal, set aside the Judgment, grant the Application, and
    issue an order declaring that the Statement of Claim contains more than one claim
    within the meaning of the Policy.

[84]

I
    would order costs of the appeal in favour of the appellants, fixed at $7,500, plus
    applicable taxes but inclusive of disbursements.  In light of the result on
    appeal, the issue of the costs below must be revisited.  If the parties are
    unable to agree on that matter, I would direct them to return to the
    application judge to have those costs decided.

Released: June 25, 2014 (E.E.G.)

E.E. Gillese
    J.A.

I agree. K. van Rensburg J.A.

I agree. C.W. Hourigan J.A.

[1]

Professional Services is defined as: [T]he
    practice of the Law of Canada, its provinces and territories  and shall
    include  those services for which the INSURED is responsible as a lawyer
    arising out of such INSUREDs activity as a trustee, administrator, executor,
    arbitrator, mediator, patent or trademark agent.


COURT OF APPEAL FOR ONTARIO

CITATION: Susin v. Susin, 2014 ONCA 461

DATE: 20140612

DOCKET: C57717 and M43592

Hoy A.C.J.O., Cronk and Pepall JJ.A.

BETWEEN

Dianne Susin, Esther Susin, Theresa Lensborn

Plaintiffs (Appellants)

and

Fermino Susin and Habibur Rahman

Defendants (Respondents)

Jean-Alexandre De Bousquet, for the appellant, Dianne
    Susin, no one appearing for the other appellants

Margaret A. Hoy, for the respondents/moving parties

Heard and released orally: June 9, 2014

On appeal from the order of Justice David Price of the
    Superior Court of Justice, dated August 28, 2013.

ENDORSEMENT

[1]

In our view, this appeal must be quashed.

[2]

The order under appeal stayed the appellants motion for various forms
    of relief, transferred the proceeding to the Superior Court of Justice in
    Welland to be joined with Court File Nos. 3738/05 and 9600/05, and awarded the
    respondents costs in the total amount of $3,500, payable forthwith.  Nothing in
    the order finally determined the matters in issue between the parties.  Accordingly,
    the order in question is interlocutory in nature and this court is without
    jurisdiction to entertain the appeal.  On this ground alone, the appeal is
    quashed.

[3]

We also note that the record before us confirms the existence of several
    outstanding costs orders in other proceedings involving these appellants and
    one or more of the respondents to this appeal.  These appear to include several
    costs orders in the Superior Court of Justice, as well as costs awarded by this
    court against these appellants and in favour of the respondent Fermino Susin by
    orders dated June 3, 2008 (C47484  $3,500) and November 23, 2010 (C51985 and
    C51221  $1,500).  In our view, this appeal should also be quashed on the basis
    of the appellants persistent and unexplained failure to honour these costs
    orders.

[4]

The respondents motion to quash is allowed and the appeal is quashed.
    It follows that the appellants cross-motion to dismiss the motion to quash is
    dismissed.  The respondents are entitled to their costs of the motion, fixed in
    the amount of $3,500, inclusive of disbursements and H.S.T.

Alexandra Hoy
    A.C.J.O.

E.A. Cronk
    J.A.

S.E. Pepall
    J.A.