COURT OF APPEAL FOR ONTARIO

CITATION: Lee v. 1435375 Ontario Ltd., 2013
    ONCA 516

DATE: 20130815

DOCKET: C56363

Goudge, Simmons and Strathy JJ.A.

BETWEEN

Chang Yong Lee

Plaintiff (Respondent)

and

1435375 Ontario Ltd.

Defendant (Appellant)

Jordan Goldblatt, for the appellant

Julian Heller and Zabihullah Yaqeen, for the respondent

Heard: May 15, 2013

On appeal from the judgment of Justice Carole J. Brown of
    the Superior Court of Justice, dated November 26, 2012.

Strathy J.A.:

[1]

The purchaser of a dry cleaning business claimed rescission of the
    purchase agreement based on a mistake about the zoning of the property on which
    the business was situated. The motion judge agreed.

[2]

The vendor of the business asserts that the motion judge made a palpable
    and overriding error in finding common mistake.

[3]

For the reasons that follow, I agree, and would allow the appeal.

The Facts

(1)

The Agreement

[4]

On November 9, 2011, the appellant, 1435375 (the Vendor), and the
    respondent, Chang Yong Lee (the Purchaser), entered into an agreement of
    purchase and sale for the Vendors dry cleaning business, located in leased
    premises at 1548 Avenue Road, Toronto. The agreement was prepared by the real
    estate broker who acted for both parties and neither party was represented by
    counsel during the negotiations.

[5]

The agreement was for all the assets of the business, including the
    lease, goodwill and trade name, Gentle Lees Cleaners, at a price of $340,000.
    It was conditional on the Vendor obtaining the landlords consent for the
    assignment of the lease and the Purchaser being able to obtain a new five-year
    lease with a renewal option. It was also conditional on approval of the Purchasers
    solicitor after review of the lease. These conditions were subsequently
    satisfied or removed. The agreement was to close on January 16, 2012, but
    closing was extended, first to February 13, 2012 and then to February 21,
    2012.

[6]

The agreement was on the standard form of the Ontario Real Estate
    Association for the purchase and sale of a business in leased premises. It
    contained an entire agreement clause, stating in part that:

There is no representation, warranty, collateral agreement
    or condition affecting this Agreement other than as expressed herein.

[7]

The agreement also contained the following  acknowledgement:

The parties acknowledge that information provided by any
    real estate salesperson or real estate broker or real estate brokerage shall
    not be construed as expert legal advice, tax advice, advice on zoning changes,
    engineering advice or environmental advice, and the parties acknowledge that
    the salesperson, broker or brokerage has advised that the parties seek
    independent professional advice on any of the above matters and concerns.

[8]

Apart from this clause, there were no other provisions about zoning in
    the Agreement.

(2)

Zoning

[9]

Prior to January 27, 2010, the premises had been zoned C1, General
    Commercial, which permitted the operation of an on-site dry cleaning facility.
    By an amendment to the zoning by-law, effective January 27, 2010, the zoning
    was changed to C4, Mixed Use Commercial, which did not list such a facility as
    a permitted use. While the appropriate statutory notices of the by-law change
    had been given, the motion judge accepted the Vendors evidence that it was unaware
    of the change.

[10]

The
    Vendor had continuously operated its dry cleaning facility in the premises
    since it acquired the business in 2005. It continued to operate the business
    after the Purchaser refused to close. It adduced evidence that in each year it
    had obtained a business licence from the City to operate the business. It also
    adduced evidence that a dry cleaning business had operated in the premises
    since 1995.

(3)

Discussions Prior
    to the Agreement

[11]

There
    was no evidence of any communications between the parties, either during the
    negotiation of the agreement, or prior to closing, concerning the zoning of the
    premises. The parties admitted that they never turned their minds to the
    possibility that there was a zoning issue. Because of this, the motion judge
    found that it would be difficult to conclude that they came to any agreement,
    either expressly or impliedly, regarding what would happen if there was a
    zoning issue.

[12]

The
    motion judge found that at the time the Purchaser had considered purchasing the
    business he had advised the Vendor and the landlord that it was his intention
    to expand the business and, if he purchased it, he would undertake significant
    renovations and additions.

(4)

Events Leading Up
    To the Scheduled Closing

[13]

By
    January 19, 2012, the landlord had agreed to the extension of the lease and the
    Purchasers lawyer, Ms. Won, proceeded with the necessary searches. On January
    27, 2013, she filed a Permitted Use Request with the City. It described the
    existing use of the premises as Dry Cleaning Plant (on-site dry cleaning and
    laundering) and sought the Citys confirmation that the proposed use for that
    purpose was permitted.

[14]

On
    February 13, 2012, about a week before closing, Ms. Won wrote to the Vendors
    lawyer, setting out the Purchasers requisitions. She made no reference to
    zoning. Nor did Ms. Won request any information or documentation from the Vendor
    or its lawyer with respect to zoning.

[15]

By
    February 17, 2012, all the Purchasers investigations and searches, other than
    the Permitted Use Request, had been satisfactorily resolved. Ms. Won followed
    up with the City. She contacted the licensing office and confirmed that the
    business had been licensed by the City to operate as a dry cleaning plant. She
    also confirmed that before a licence is issued the licensing department conducts
    a zoning search, to confirm that the licensed use is compatible with the
    zoning.

[16]

On
    the date set for closing, February 21, 2012, Ms. Won continued to follow up
    with the City, by email and by telephone, to obtain an answer to her Permitted Use
    Request.

[17]

By
    email sent at 3:49 p.m. on February 21, 2012, the City responded. It stated
    that the dry cleaning and laundry business was not a permitted use under the
    2010 by-law. The email added that the response only addressed the current
    zoning designation and did not account for any legal non-conforming status of
    the building or legal non-conforming status of the use.

[18]

The
    Citys response indicated that Ms. Won could submit a request for a Preliminary
    Project Review or a Zoning Certificate, which would require the submission of
    documentation supporting the existing uninterrupted use to establish a legal
    non-conforming use.

[19]

Ms.
    Won, however, did not see the email until later that afternoon.  Thinking she
    had received no answer by 4:00 p.m., she sent the Vendors solicitor the
    purchase documents and the balance of the purchase money, which she asked him
    to hold in escrow until she notified him of her satisfaction with the Vendors
    deliveries. Once again, there was no reference to zoning in Ms. Wons letter
    and no indication that the Purchaser had any expectations of the Vendor with
    respect to zoning.

[20]

After
    reading the Citys email later that day, Ms. Won wrote to the Vendors lawyer,
    instructing him that the funds and documentation were not to be released to his
    client until the matter was resolved. The Vendors lawyer responded that the
    use as a dry cleaning plant was a legal non-conforming use, but Ms. Won took
    the position that this was not sufficient, that the transaction had not closed,
    and that it would not close unless the issue was resolved.

[21]

The
    Vendors solicitor continued to hold the funds in escrow and the Vendor
    remained in possession of the business and continued to operate it.

[22]

On
    March 30, 2012, the Purchaser commenced an action for, among other things,
    rescission, damages and a mandatory injunction for the return of the purchase
    price. The Vendor counterclaimed for damages for breach of contract.

[23]

On
    January 21, 2013, a single judge of this court dismissed the Vendors motion
    for an order staying the judgment pending the hearing of the appeal, with the
    result that the Purchasers funds were returned to him.

THE JUDGMENT BELOW

[24]

The
    Purchasers action was initially for rescission, based on innocent
    misrepresentation, or alternatively, a declaration that the contract was null
    and void due to negligent misrepresentation. After hearing the summary judgment
    motion, the motion judge asked the parties for submissions on mistake and a
    second hearing was held. At the commencement of that hearing, the Purchaser was
    granted leave to amend the statement of claim to plead mistake.

[25]

The
    motion judge found there was no misrepresentation, either innocent or
    negligent, on the part of the Vendor, that would permit the Purchaser to avoid
    the agreement. She dismissed the claims for rescission based on
    misrepresentation. She found that the parties had not turned their minds to the
    possibility that the zoning of the property was not in order.

[26]

The
    motion judge found that there were no representations, warranties or other
    express conditions regarding zoning in the agreement. She also found that the acknowledgement
    that the real estate broker had not given zoning advice, quoted in paragraph 7

above, could not be regarded as a condition, representation or warranty regarding
    zoning, but was simply a disclaimer by the parties to protect the real estate
    agent concerning zoning changes and places responsibility therefore on the
    parties.

[27]

The
    motion judge accepted the Vendors submission that a provision concerning zoning
    could not be imported into or implied in the agreement, because of the entire
    agreement clause and because the Purchasers lawyer agreed on cross-examination
    that it was common to negotiate such a provision. Because no such term had been
    negotiated in this case, she found that it would not make commercial sense to
    imply one.

[28]

While
    the Purchaser put his amended claim in both mutual mistake and common mistake,
    the motion judge held that it was a case of common mistake, rather than mutual
    mistake. She noted that mutual mistake exists when the parties misunderstand
    each other and are at cross purposes  where both parties are mistaken, but
    about different things and are therefore not on the same page: referring to
    M.P. Furnston,
Cheshire and Fifoots Law of Contract
,
9
th
ed. (London: Butterworths, 1976) at pp. 206-20 and
Ron Ghitter Property
    Consultants Inc. v. Beaver Lumber Co. Ltd
.
, 2003 ABCA 221, 330 A.R.
    353, at para. 10. Common mistake, she observed, is one in which both parties
    make the same mistake. Each party knows what the other party wants, but the
    parties are mistaken about some underlying and fundamental fact: referring
    to
Cheshire and Fifoots
, at p. 206.

[29]

The
    motion judge found that the parties made a false and fundamental assumption
    going to the root of the contract: referring to
Eastern Canadian Coal Gas
    Venture Ltd. v. Cape Breton Development Corp.
, 200 N.S.R. (2d) 201, at
    para. 31.

[30]

The
    motion judge found that the parties contracted on the basis of a shared
    erroneous assumption, which amounted to a common mistake fundamental to their
    agreement, that the property was properly zoned, such that the dry-cleaning
    business was a permitted use. She also found that the Purchaser had not
    expressly or impliedly accepted the risk that this assumption might be untrue.

[31]

The
    motion judge would also have granted relief on equitable grounds, citing Lord
    Denning in
Solle v. Butcher
, [1950] 1 K.B. 671 (C.A.), at p. 693, under
    this principle:

A contract is also liable in equity to be set aside if the
    parties were under a common misapprehension either as to facts or as to their
    relative and respective rights, provided that the misapprehension was
    fundamental and that the party seeking to set it aside was not himself at fault.

[32]

She
    found that, balancing the values of contractual stability on the one hand and
    preventing unjust enrichment due to mistake on the other, it would not be just
    to force the Purchaser to proceed with the purchase of the business, because the
    Vendor would be enriched by obtaining a price that was based on the assumption
    that it was properly zoned. She found it would not be equitable to force the Purchaser
    to proceed with the purchase when there was uncertainty about the permitted
    use. Returning the parties to their original position would not adversely
    affect either party.

[33]

Having
    found that the transaction did not close, and in any case that the agreement should
    be rescinded on the basis of common mistake or equitable mistake, the motion
    judge ordered the purchase funds to be returned to the Purchaser.

THE POSITIONS OF THE PARTIES

[34]

The
    positions of the parties can be briefly stated. The Vendor submits that the
    motion judge made a central and overriding error in concluding that the Purchaser
    received something less than what he bargained for. The parties assumptions
    were consistent with the existence of a legal non-conforming use that would
    permit the Purchaser to operate the business as it had been operated by the Vendor
    in the past. The Purchaser wrongly believed that the business was subject to
    being shut down at any time by the municipal authorities. He did not establish
    that this was likely to happen. The motion judge also erred, the Vendor says,
    in applying the doctrine of
caveat emptor
.

[35]

The
    Purchasers position is that the motion judge correctly found that the weight
    of evidence did not support a finding that the business could operate as a dry
    cleaning plant. He submitted, alternatively, that if it could operate as a
    legal non-conforming use, this was different from a permitted use as that
    term was employed in the zoning by-law and both parties acted under the
    assumption that a dry cleaning business was a permitted use. Thus, there was a
    common mistake. Even if the agreement did close, the Purchaser was entitled to
    rescission.

Applicable legal principles

[36]

It
    will be helpful at this stage to provide a brief overview of the law with
    respect to common mistake, equitable mistake and non-conforming uses.

(1)

Common Mistake

[37]

The
    formation of a legally binding contract requires a meeting of the minds
consensus
    ad idem
. When the meeting of the minds is based on a common error as to
    some fundamental fact, the parties agreement, viewed objectively, is robbed
    of all efficacy:
Ron Ghitter Property Consultants
, at para. 13,
    referring to M.P. Furnston,
Cheshire, Fifoot and Furnstons Law of Contract,
14th ed. (London: Butterworths, 2001).

[38]

The
    motion judge accepted the test set out by Lord Atkin in the famous decision of
    the House of Lords in
Bell v. Lever Bros. Ltd
.
, [1932] A.C. 161,
    at p. 225
:

The proposition does not amount to more than this that, if
    the contract expressly or impliedly contains a term that a particular assumption
    is a condition of the contract, the contract is avoided if the assumption is
    not true.

[39]

In
R. v. Ontario Flue-cured Tobacco Growers Marketing Board
, [1965] 2
    O.R. 411, (C.A.), at para. 24, this court accepted the following definition
    taken from William R. Anson,
Principles of the English Law of Contract and
    of Agency in Relation to Contract
, 21st ed. by A.G. Guest (Oxford:
    Clarendon Press, 1959):

Where the parties contract under a false and fundamental
    assumption, going to the root of the contract, and which both of them must be
    taken to have had in mind at the time they entered into it as the basis of
    their agreement, the contract is void.

[40]

The
    Vendor does not take issue with the motion judges statement of the law of
    common mistake, but asserts that she erred in her application of the law by
    using common mistake to re-allocate the risk contractually assumed by the
    Purchaser.

(2)

Equitable
    Mistake

[41]

The
    motion judge also relied on the jurisdiction of the court to relieve against
    common mistake where it would be inequitable to enforce the contract. She
    referred to the observation of Lord Denning in
Solle
, at p. 693, quoted
    above, which was accepted by this court in
Miller Paving Ltd. v. B.
    Gottardo Construction Ltd
.
, 2007 ONCA 422, 86 O.R. (3d) 161.

[42]

In
Miller Paving
, this court observed that while the doctrine of
    equitable mistake may have been abandoned in England as a result of the
    decision of the Court of Appeal in
Great Peace Shipping v. Tsavliris
    Salvage
,
[2003] Q.B. 679, that decision had not yet been adopted in
    Canada. This court observed, however, at para. 27:

. In considering whether to apply the doctrine of common
    mistake either at common law or in equity, the court should look to the
    contract itself to see if the parties have provided for who bears the risk of
    the relevant mistake, because if they have, that will govern.

[43]

I
    will return to that observation later in these reasons.

(3)

Legal
    Non-Conforming Use

[44]

The
    doctrine of legal non-conforming use has been described as a shield against
    interference with acquired rights:
Ottawa (City) v. Capital Parking Inc.
(2002), 59 O.R. (3d) 327 (C.A.), at para. 36.

[45]

It
    is codified in s. 34(9)(a) of the
Planning Act
¸ R.S.O. 1990, c. P.13:

(9)
No
    by-law passed under this section applies,

(a) to prevent the use of any land, building or structure
    for any purpose prohibited by the by-law if such land, building or structure
    was lawfully used for such purpose on the day of the passing of the by-law, so
    long as it continues to be used for that purpose

[46]

In
    order to prove a legal non-conforming use, a party must establish that:

(a) the use of the
    land, building or structure was lawful at the time of the enactment of the
    relevant zoning restriction; and

(b) the previously
    lawful use has continued thereafter.

See
Feather v. Bradford West Gwillimbury
, 2010
    ONCA 440, 268 O.A.C. 239, at para. 27;
Saint-Romuald (Ville) v. Olivier
,
    2001 SCC 57, [2001] 2 S.C.R. 898;
Rotstein v. Oro-Medonte (Township)
, 34
    M.P.L.R. (3d) 266 (Ont. S.C.).

[47]

The
    principle applies even to the extent of permitting the intensification of a
    use, provided that the intensified use does not result in a difference in the
    kind of use. The point was made in
Saint-Romuald
,
at paras.
    25-26:

In general, merely continuing the precise pre-existing
    activity, even at an intensified level, is clearly protected, but the
    intensification may be of such a degree as to create a difference in kind. A
    family farm which has a few pigs on the fringe of a town may continue as a
    legal non-conforming use, but the result may be otherwise if it is sought to
    expand its pork operation into "factory in the country" type
    intensive pig farming. While in one sense the "use" has continued, in
    another sense its character has been so altered as to become, in terms of its
    impact on the community, an altogether different use.

In the more usual type of situation, a non-conforming
    commercial use in a residential neighbourhood that enjoys increasing business
    should not ordinarily be penalized for its success by losing its "acquired
    right" to operate, even if a by-product of that success is some increased
    traffic and noise.

[48]

Against
    this background of the facts and law, I return to the reasons of the motion
    judge.

analysis

[49]

In
    my view, the motion judge made three interconnected errors that warrant the
    intervention of this court.

[50]

First,
    she made a palpable and overriding error in her assessment of the evidence in
    finding that the parties had a common assumption that a dry cleaning business
    was a permitted use under the zoning by-law.

[51]

Second,
    she erred in law by putting an onus on the Vendor to demonstrate that the
    business was able to continue to operate as a dry cleaning business  the onus should
    have been on the Purchaser to show that it could not continue to operate.

[52]

Third,
    in so doing, she erred in law by reversing the rule of
caveat emptor

and

put the risk of mistake on the Vendor, rather than on the Purchaser,
    where it belonged.

[53]

These
    errors affected her conclusions on both common mistake and equitable mistake. I
    will deal with each below.

[54]

I
    would not, however, disturb the motion judges conclusion that the transaction
    did not close, an issue that was not strenuously argued before the motion judge
    or on appeal. The motion judges conclusion was based on her assessment of all
    the evidence and the Vendor has identified no palpable and overriding error in
    that regard.

(1)

No Basis for Finding
    Common Mistake on Permitted Use

[55]

There
    is no evidence to support the motion judges central finding that:

the parties shared the underlying assumption that the
    property was properly zoned such that the dry-cleaning business was a permitted
    use.

[56]

It
    is clear that in referring to permitted use, the motion judge was using the
    term in its technical sense  that is, a use described as a permitted use
    under the zoning by-law  and not in the lay sense of a lawful use.

[57]

The
    Purchaser stated in his affidavit:

I was never advised by the vendor that the premises were not
    properly zoned to operate a dry cleaning plant. I would have never even
    considered viewing the business, let alone spending my savings and those of my
    wife in purchasing the business had I been advised that the premises were not
    appropriately zoned to operate a dry cleaning plant.

[58]

And
    further:

I simply wanted to purchase a dry cleaning plant and I
    obviously wanted the dry cleaning plant to be in compliance with zoning by-laws
    so that I could operate it without any problems.

[59]

He
    added:

I am not a sophisticated business person, I am [a] small
    business owner looking to run a lawful, uncomplicated business.

[60]

He
    said that dry cleaning being a non-conforming use, rather than a permitted use,
    would give rise to additional risks, costs and uncertainties and would lower
    the value of the business.

[61]

The
    motion judge stated:

I accept the plaintiffs evidence that he would not have
    contemplated the purchase of the dry cleaning business had he known that it was
    not a permitted use.

[62]

She
    later said:

I have taken into consideration the strong evidence
    contained in the plaintiffs sworn Affidavit that he would not have entered
    into the contract but for the mistaken assumption (i.e., if he had known about
    the zoning issue).

[63]

The
    uncontroverted evidence of the Vendors principal was that he made no
    representations to, and had no discussions with, the Purchaser concerning the
    zoning of the premises. He swore that he had operated the business since 2005
    and had no knowledge of any zoning issues and had never received any complaints
    or inquiries from the City with respect to the operation of the business. He
    swore that he was not aware of the change in zoning in 2010 and had not seen
    any public notices of the change.

[64]

The
    motion judge focussed on the cross-examination of the principal of the Vendor,
    in which he had stated, in her words:

[H]e was not aware that the zoning by-law had been changed
    and that his dry-cleaning business was no longer a permitted use pursuant to
    the by-law. He testified on cross-examination on his Affidavit that such
    knowledge would have been important to him and that he would not have wanted to
    buy the previous dry-cleaning business if it was not permitted to run a
    dry-cleaners by the City of Toronto. He further admitted that the legal
    entitlement to carry on the business of the dry-cleaning plant is very
    important to anyone buying the business.

[65]

Later
    in her reasons, she stated:

The evidence of the defendant/vendor was that he was unaware
    of any zoning issues with respect to the business and was shocked and
    stunned that a dry-cleaning business was not a permitted use pursuant to the
    relevant zoning by-laws. Based on the evidence, the purchaser believed he was
    purchasing and the vendor believed he was selling a business zoned to operate a
    dry-cleaning plant.

[66]

The
    motion judge rejected the Vendors submission that the use of the premises as a
    dry cleaning plant, while not permitted under the 2010 zoning by-law, was a
    legal non-conforming use and that the Purchaser was entitled to continue that
    use. She found that there was uncertainty about the use to which the premises
    could be put and the City had not determined that it was a non-conforming
    use. In her findings on common mistake, she stated, Based on the evidence
    before me, I am not able to find that the premises can lawfully operate as a
    dry cleaning business.

[67]

In
    my view, the motion judge attributed to the Vendor, and to some extent to the Purchaser,
    an assumption about the use of the premises that is not borne out by the
    evidence. She concluded that the Vendor assumed that the operation of a dry
    cleaning plant was a permitted use in the technical sense, under the existing
    by-law, when the evidence, fairly understood, was that the Vendors principal simply
    assumed that the business could be lawfully operated, as it had been by the
    Vendor for the previous seven years and by its predecessors for some years
    before that.

[68]

The
    evidence supports the conclusion that both parties had a lay persons
    understanding that the Purchaser would be able to continue to operate the
    business as it had been operated by the Vendor in the past. The evidence does
    not support the conclusion that both parties understood the distinction between
    a permitted use as a term of art in the 2010 by-law and a legal
    non-conforming use.

[69]

Nor
    does the evidence support the conclusion that both parties assumed that the
    operation of a dry cleaning business was a permitted use as that term was
    used in the by-law.

[70]

For
    these reasons, I conclude that if there was a common assumption, it was not
    about the permitted use in the technical sense used in the zoning by-law. On
    the face of it, the Vendors use of the premises as a dry cleaning business was
    a legal non-conforming use and he believed that the premises could continue to
    be used for that purpose.

[71]

If
    the Purchaser had a more technical understanding of the permitted use, it was
    a case of unilateral mistake, not common mistake. If he was operating under the
    same assumption as the Vendor, the question is whether this was in fact a
    mistake, and who bore the onus of proof.

(2)

Onus

[72]

The
    motion judges conclusion about the nature of the mistake caused her to put
    the onus on the Vendor to demonstrate that the business could operate as a dry
    cleaning plant. For example, she stated:

While the defendant argues that there was no mistake as to
    the underlying assumption that the business was properly zoned to operate a
    dry-cleaning plant, given that the plant was currently operating and was
    clearly a non-conforming use, I do not accept this argument. Based on the
    evidence before me, I am not able to find that the premises can lawfully
    operate as a dry cleaning business; nor do I find, as urged by the defendant,
    that the current zoning of the premises is immaterial to the objective of the
    Agreement. In my view, the objective was not simply the transfer of assets of a
    dry-cleaning business, but rather the plaintiff intended to purchase a
    dry-cleaning business that was legally zoned to operate as such.

[73]

When
    dealing with equitable mistake, she found that it would not be just to force
    the Purchaser to proceed with the purchase when the operation of a dry cleaning
    business was not a permitted use under the by-law:

In the circumstances of this case, and based on all of the
    evidence, I find that it would not be just to force the plaintiff to proceed
    with the purchase of a dry-cleaning business which has been found not to be a
    permitted use pursuant to the applicable bylaw. While the City may find it to
    be a non-conforming use, it has not done so to date and neither party has made
    application to determine whether the business can continue to run as a legal
    non-conforming use. There is no evidence to suggest that, in the eyes of the City,
    it is a legal non-conforming use.

[74]

Instead,
    the motion judge should have required the Purchaser, as the party seeking to
    rescind the agreement, to show that the business could not operate as a dry
    cleaning plant. In light of the Vendors evidence concerning the longstanding
    lawful use of the premises, which pre-dated the change in zoning in 2010 and
    was continuous thereafter, the onus was on the Purchaser, seeking rescission,
    to prove that the parties common assumption was wrong and that the premises could
    not lawfully be used for that purpose.

[75]

The
    Vendor established, at least
prima facie
, that the use of the premises
    for the purpose of a dry cleaning business was a legal non-conforming use. The
    fact that the City had not formally determined it to be a non-conforming use,
    or that neither party had made application for confirmation that it was legal
    non-conforming, did not mean that it was not so.

[76]

There
    was no evidence adduced at trial that the non-conforming use could not be
    continued or that the Purchasers plans to expand the business would be impacted.
    While the Purchaser testified that he had concerns that the costs would be
    greater, and that the business could be less marketable and therefore less
    valuable, this evidence was speculative and did not reach the level of
    establishing that the ongoing use of the business would be prevented.

(3)

Caveat Emptor

[77]

Related
    to the issue of onus is the question of risk. The motion judge found that the Purchaser
    did not expressly or impliedly assume the risk that the commonly assumed facts
    [that the dry cleaning operation was a permitted use] were untrue.

[78]

This
    had the effect of putting the risk of the Purchasers erroneous assumption on
    the Vendor. Instead of
caveat emptor
, it became
caveat venditor
.

[79]

The
    law of mistake cannot be used to place a risk on a party where the contract has
    allocated that risk to another party. It will be recalled that, in
Miller
    Paving
,
this court observed, at para. 27:

Before turning to the application of any of these tests to
    the facts of this case, it must be noted that
Great Peace
does provide
    one useful reminder that is of significance here, whether or not its approach
    to common mistake is adopted in Canada. It is that in considering whether to
    apply the doctrine of common mistake either at common law or in equity, the
    court should look to the contract itself to see if the parties have provided
    for who bears the risk of the relevant mistake, because if they have, that will
    govern. [Citations omitted.]

See also
Wm. Sindall PLC v. Cambridgeshire C.C.
,
    [1994] 1 W.L.R. 1016 (C.A.);
0707448 B.C. Ltd. v. Cascades Recovery Inc.
,
    2011 BCSC 1065, at paras. 118-122.

[80]

In
    this case, the Purchaser did not make the agreement conditional on zoning,
    notwithstanding the evidence of his solicitor that it was sometimes done. In
    fact, the only clause in the agreement of purchase and sale that spoke to the
    issue was an acknowledgement that the real estate broker had advised the
    parties to seek independent professional advice with respect to zoning changes.
    In apparently ignoring this advice, and signing the agreement without any
    condition as to zoning, the Purchaser implicitly assumed the risk that the zoning
    would not permit his contemplated use. Having found that there were no
    representations, warranties or implied terms concerning zoning, the trial judge
    should have found that the agreement precluded any understanding other than
    what the parties had expressed in their agreement and that the risk of any
    misunderstanding had been allocated to the Purchaser, not to the Vendor.

(4)

Equitable
    Mistake

[81]

In
    my view, there is no scope for the application of the doctrine of equitable
    mistake. First, for the reasons I have outlined, there was no common
    misapprehension of the facts. Second, to rely on equitable mistake, the party
    seeking to set aside the contract must show that he or she was not at fault.
    The trial judge concluded that the Purchaser did not assume the risk of a
    mistaken assumption about zoning and, inferentially, that he was not at fault.

[82]

He
    was at fault, however. He failed to take reasonable measures to protect himself,
    either by investigating the zoning before he signed the agreement or by making
    the agreement conditional on zoning. He, not the Vendor, should be visited with
    the consequences. There is nothing inequitable in holding him to the contract, particularly
    in the absence of any evidence that the use of the premises for their intended
    purpose is impossible.

CONCLUSION

[83]

In
Miller Paving
, this court referred at para. 20 to an article by
    Professor John D. McCamus, Mistaken Assumptions in Equity: Sound Doctrine or
    Chimera? (2004) 40 Can Bus. L.J. 46, at 47:

In determining whether an agreement should be considered
    unenforceable by reason of the mistaken assumption that infects its creation,
    courts must engage in a delicate exercise of balancing the competing values of
    contractual stability and the provision of relief in cases of severe injustice.

[84]

If
    there were any mistake in this case, it was a unilateral mistake on the part of
    the Purchaser and it is not at all unjust that he should bear the consequences.

[85]

For
    the foregoing reasons, I would allow the appeal, and dismiss the motion for
    summary judgment, with costs in this court and before the motion judge. The
    costs in this court are fixed at $11,873.91, all inclusive. The costs before
    the motion judge, if not agreed upon, shall be referred to her for determination.

Released:

AUG 15 2013                                   G.R.
    Strathy J.A.

STG                                                          I
    agree S. Goudge J.A.

I
    agree Janet Simmons J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
    R. v. Adjei, 2013 ONCA 512

DATE: 20130812

DOCKET: C54638

Rosenberg, Watt and Pepall JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Richwood Adjei

Appellant

James Stribopoulos for the appellant

Marcella Henschel, for the respondent

Heard: April 22, 2013

On appeal from convictions entered by Justice Edward P.
    Belobaba of the Superior Court of Justice, sitting without a jury, on August
    31, 2011, with reasons reported at 2011 ONSC 3372.

Watt J.A.:

[1]

When Stacey Adjei died in hospital of complications from sickle cell
    disease, her brothers, Charles and Richwood, were with her. Her half-brother,
    Clifford, was not there.

[2]

Charles and Richwood were angry at Clifford for not being at the
    hospital when their sister died. Charles phoned Clifford to tell him not to
    join the other family members at their mothers house at 38 Driftwood Avenue to
    mourn their loss.

[3]

Clifford ignored the warning, and, with his girlfriend, Dora, drove to
    his mothers townhouse to join his brothers and other family members and
    friends. As he approached his mothers house, Clifford called 911 and reported
    that Richwood had a gun.

[4]

When the police arrived at Driftwood Avenue, they saw the Adjei brothers
    arguing in the courtyard outside the townhouse. The officers also saw Stephen Amofah,
    a friend of Charles Adjei, leave the townhouse carrying a black duffle bag with
    a Hockey Canada logo on it. The bag seemed to have something long and heavy in
    it. When Amofah saw the police, he took the bag back into the townhouse.

[5]

The officers were invited into the townhouse. They found the black bag
    with the Hockey Canada logo on top of the washing machine. Inside the bag
    police found a sawed-off Winchester shotgun, an M-1 Carbine rifle, and a high
    capacity magazine suitable for use in the rifle.

[6]

The trial judge found Richwood Adjei (the appellant) guilty of several
    offences arising out of the possession of the guns and ammunition, including
    breaches of prior probation and weapons prohibition orders. The appellant says
    his convictions should be set aside because the trial judge wrongly admitted a
    hearsay statement of a Crown witness, wrongly rejected his (the appellants)
    testimony because he exercised his right to silence prior to trial, and, in any
    event, entered some convictions in violation of the prohibition against
    multiple convictions.

[7]

As these reasons explain, I would dismiss the appeal except for the entry
    of conditional stays on some counts in the indictment.

THE BACKGROUND FACTS

[8]

The grounds of appeal advanced do not require an elaborate recitation of
    the evidence adduced at trial. A brief overview will suffice, with greater
    detail added where necessary in connection with the specific complaints of
    error.

[9]

The contested ground at trial had to do with whether the Crown had
    proven that the appellant had knowledge of and control over, thus was in
    possession of, the guns and ammunition found in the duffle bag. No fingerprints
    were found on the firearms, the high capacity magazine, ammunition, or the duffle
    bag in which they were found.

The Hospital Visits

[10]

Early
    in the morning of February 10, 2010, Clifford Adjei and his girlfriend, Dora,
    visited Cliffords gravely ill sister, Stacey, at the hospital. The doctor told
    Clifford that he should have his mother return from Ghana as soon as possible.
    Clifford and Dora left the hospital to make arrangements to send money to
    Cliffords mother so that she could return home. Clifford was required to
    report to a drug and alcohol rehab program later that morning. While he was
    complying with his reporting obligations, Stacey died.

The Telephone Argument

[11]

The
    appellant and his brother, Charles, were with Stacey when she died. Charles was
    very annoyed that Clifford, as the eldest brother, had been absent for her
    passing. Charles telephoned Clifford and warned him not to return to their
    mothers house if he (Clifford) knew what was good for him. Charles made it
    clear that he and the appellant did not want to see Clifford at their mothers
    home.

The 911 Call

[12]

As
    he and Dora approached his mothers townhouse at 38 Driftwood Avenue, Clifford
    called 911 to report that the appellant had a big, big, big, big gun in the
    pocket of his pants. The call, which includes the sounds of an ongoing
    confrontation, was admitted as evidence at trial as part of the
res gestae
.
    Its admission is not challenged here.

The Police Response

[13]

The
    police officers who responded to the 911 call saw Stephen Amofah hurry out of
    the townhouse carrying the black bag with the Hockey Canada logo. When Amofah
    made eye contact with the officers, he walked back inside the townhouse. The
    appellant remained outside.

The Finding of the Guns and the Ammunition

[14]

In
    the duffle bag on top of the washing machine on the main floor of the townhouse,
    police found a sawed-off 12 gauge Winchester pump shotgun loaded with one round
    of ammunition, along with a cut-down M-1 semi-automatic rifle and a high
    capacity magazine suitable for use in the rifle. The rifle was not loaded. The
    magazine was empty.

The Arrests

[15]

Police
    arrested the appellant and Stephen Amofah. Each was charged with firearms and
    related offences. Each was taken to 31 Division police station. Amofah,
    Clifford, and his girlfriend, Dora, gave videotaped statements.

The Case for the Crown at Trial

[16]

To
    establish the contested issues of fact at trial, the Crown called Clifford, his
    girlfriend Dora, and Stephen Amofah. Each gave evidence that contradicted what
    they had told police in their video statements. The trial Crown sought to have
    their video statements admitted under the principled exception to the hearsay
    rule. Recantation of the statements established necessity. The trial judge held
    that the statements were reliable and admitted them as evidence. The
    statements, especially that of Stephen Amofah, became the centrepiece of the
    case for the Crown.

The Defence Case at Trial

[17]

The
    appellant gave evidence at trial. He explained that, at his mothers request,
    he moved out of her townhouse at the end of November, 2009 before his mother
    left for Ghana. He denied having any guns or any knowledge about the guns found
    by police.

[18]

The
    appellant acknowledged that he anticipated trouble with Cliffords arrival at
    their mothers townhouse. He removed a sledgehammer, about 18 inches or two feet
    long and weighing between 20 and 35 pounds, from a storage closet and put it
    down in the front of his pants. When he heard somebody mention that Clifford
    had called the police, he threw the sledgehammer away onto the roof of an
    adjacent townhouse.

[19]

The
    appellants mother confirmed the presence in the house of a long, thin hammer,
    about 18-22 inches in length. She described it as not very heavy. She had
    never seen a duffle bag.

THE GROUNDS OF APPEAL

[20]

The
    appellant advances three grounds of appeal against conviction. As I would
    paraphrase those grounds, they are that the trial judge erred:

I.

in admitting the videotaped statement of Stephen Amofah under the principled
    exception to the hearsay rule;

II.

in rejecting the testimony of the appellant, in part at least, because
    the appellant had exercised his pre-trial right to silence and had not provided
    police with the exculpatory version of events he advanced at trial; and

III.

in failing to enter conditional stays on several counts as a result of
    the application of the rule against multiple convictions for the same delict or
    matter.

Ground #1: The Admissibility of Amofahs Out-of-Court Statement

[21]

The
    first and principal ground of appeal requires a brief review of the context in
    which Amofahs videotaped statement came to be proffered at trial as well as
    some details about the statement itself.

The Procedural Context

[22]

Stephen
    Amofah testified as a witness for the Crown. The answers he gave in
    examination-in-chief, in particular his failure to adhere to the substance of
    what he had said in his post-arrest videotaped statement, prompted Crown
    counsel to apply for leave under s. 9(2) of the
Canada Evidence Act
to
    cross-examine him on the statement. The trial judge granted leave. Thereafter,
    the Crown applied to have the video statement admitted under the principled
    exception to the hearsay rule.

The Videotaped Statement

[23]

Stephen
    Amofah, whom police had seen carrying the bag in which the guns, ammunition,
    and high capacity magazine were later found, was arrested at the same time as
    the appellant and charged with unlawful possession of firearms. He was advised of
    the reasons for his arrest and read his s. 10(b)
Charter
rights by the
    uniformed officers who had arrested him. He did not want to call a lawyer.

[24]

Stephen
    Amofah was taken to 31 Division for further investigation. During a brief 12
    minute conversation with investigating officers, about which the officers made
    notes, Amofah was again told the reasons for his arrest and re-advised of his
    right to counsel. He declined to call a lawyer. He said he did not need a
    lawyer because he had done nothing wrong. The officers read Amofah the primary
    and secondary police caution and he confirmed his understanding of both. An
    officer asked whether he consented to speak with them on video. Amofah
    responded: Well, you said for me to clear my name, thats what I had to do
    right?

[25]

As
    the videotaped interview began, investigators reminded Amofah of the reasons
    for his arrest and of his right to retain and instruct counsel without delay.
    Once again, Amofah declined to contact a lawyer. The investigators reiterated
    both the primary and secondary caution and confirmed Amofahs understanding of
    them. He understood that he was not required to speak to the officers, but that
    if he did so, whatever he said would be recorded and could be given in
    evidence.

[26]

Stephen
    Amofahs statement was not under oath, nor was he warned about the consequences
    of providing a false statement. The statement was videotaped in its entirety. There
    was some brief interaction between Amofah and the police before beginning the
    recording, but this was introductory and not substantive in nature.

The Ruling of the Trial Judge

[27]

The
    trial judge admitted Amofahs videotaped statement under the principled
    exception to the hearsay rule. Necessity was not an issue: Amofah had recanted
    when giving evidence. The trial judge was also satisfied, despite the absence
    of an oath and warning about the consequences of making a false statement, that
    the statement satisfied the reliability requirement. The statement was
    videotaped in its entirety. Counsel for the appellant at trial acknowledged
    that the absence of an oath or affirmation did not undermine the admissibility
    of the statement. Stephen Amofah testified at trial. Defence counsel had a
    full opportunity to cross-examine him on the statement and at large.

The Arguments on Appeal

[28]

For
    the appellant, Mr. Stribopoulos submits that the trial judge erred in his
    approach to the admissibility of the videotaped statement under the principled
    exception to the hearsay rule. In accordance with the majority judgment in
R.
    v. Trieu
(2005) 74 O.R. (3d) 481 (C.A.), the trial judge considered that the
    absence of an oath and warning was of only marginal significance in the
    assessment of the statements threshold reliability because the statement was
    videotaped in its entirety and Amofah could be fully cross-examined.

[29]

Mr.
    Stribopoulos says that the majority holding in
Trieu
has been
    overtaken by the subsequent judgment of the Supreme Court of Canada in
R.
    v. Khelawon
, 2006 SCC 57, [2006] 2 S.C.R. 787. He submits that
Khelawon
re-affirmed the earlier decision in
R. v. B.(K.G.)
, [1993] 1 S.C.R.
    740 including all three requirements that
B.(K.G.)
endorsed as
    essential before a prior statement of a witness may be admitted for substantive
    use under the principled exception to the hearsay rule. Absent satisfaction of
    the requirements in
B.(K.G.)
, the trial judge was required to look
    beyond the circumstances surrounding the making of the statement and conduct a
    more global reliability assessment directed at the specific frailties in this
    case. Not only did the trial judge fail to conduct such an assessment, but he considered
    Amofahs motive to fabricate as relevant to the ultimate reliability of the
    statement. Under
Khelawon
, this was wrong.

[30]

For
    the respondent, Ms. Henschel begins with a reminder that under the principled
    exception to the hearsay rule, a party may satisfy the reliability requirement
    in either of two ways, neither of which excludes consideration of the other.
    Sometimes, the circumstances in which the statement was made alleviate any real
    concern about the truth of the statement. On other occasions, the hearsay
    nature of the statement causes no real concern because its truth and accuracy
    can nonetheless be sufficiently tested before the trier of fact.

[31]

Ms.
    Henschel says that the procedural requirements of
B.(K.G.)
permit the
    truth and accuracy of the prior statement to be sufficiently tested. The other
    requirements of
B.(K.G.)
, as that decision and others coming after it
    plainly state, are not strict conditions precedent to admissibility or
    intolerant of other indicia of reliability. In this case, Amofah was under
    arrest, apprised of the reasons for his arrest and of his right to retain and
    instruct counsel without delay. He knew that the statement was to be recorded
    and could be introduced in evidence. These factors impressed upon him the
    importance of telling the truth and amounted to the functional equivalent of an
    oath and warning. His interest in exculpating himself related to the ultimate
    reliability of the statement and was not a factor relevant for consideration on
    threshold reliability and admissibility. No further analysis of the likely
    truth of the statement was required under
Khelawon
.

The Governing Principles

[32]

The
    principles that control determination of this ground of appeal are those
    concerned with satisfaction of the reliability requirement of the principled
    exception to the hearsay rule. The companion requirement of necessity, counsel
    agree, has been satisfied by Amofahs recantation of his out-of-court
    statement:
B.(K.G.)
, at pp. 796-797, and 799;
Khelawon
, at
    para. 75.

[33]

The
    reliability requirement of the principled exception may be satisfied in either
    or both of two non-exclusive ways. There may be no real concern about the truth
    of the hearsay statement because of the circumstances in which the statement
    came about:
Khelawon
, at para. 62. A second way of fulfilling the
    reliability requirement is for the proponent to show that no real concern
    arises from the hearsay nature of the statement because, in the circumstances,
    the truth and accuracy of the statement can nonetheless be sufficiently tested:
Khelawon
, at para. 63.

[34]

The
    circumstances in which a prior statement was made can provide sufficient
    guaranties of its trustworthiness if:

i.

the statement was made under oath or solemn affirmation, following a warning
    about the existence of sanctions (for making a false statement) and the
    significance of the oath or affirmation;

ii.

the statement is videotaped in its entirety; and

iii.

the opposing party has a full opportunity to cross-examine the witness
    about the statement.

B.(K.G.)
, at para. 104. But these
    circumstances are not conditions precedent that must be met in order for the
    reliability requirement to be satisfied. Other circumstances may serve, for
    example, as a surrogate or proxy for the oath:
B.(K.G.)
, at para. 96;
Khelawon
,
    at para. 45;
R. v. U. (F.J.)
, [1995] 3 S.C.R. 764, at para. 40; and
R.
    v. Youvarajah
, 2013 SCC 41, at para. 30.

[35]

Some
    authorities have considered whether the reliability requirement has been met in
    the case of recanting witnesses where prior statements have been videotaped,
    but are unsworn, and the witness has been available for full cross-examination
    before the trier of fact.

[36]

In
B.(K.G.)
, the court recognized that the oath was not an absolute requirement
    for a finding of reliability:
B.(K.G.)
, at para. 95. Situations may
    arise where a judge concludes that, despite the absence of an oath, the prior
    statement is reliable:
B.(K.G.)
, at para. 96. The other circumstances
    must be sufficient to impress upon the witness the importance of telling the
    truth:
B.(K.G.)
, at paras. 96 and 104.

[37]

In
U.(F.J.)
, the prior statement was not made under oath and not
    videotaped, yet was held to be reliable because the contents of the statement were
    strikingly similar to those contained in an independent statement of the
    declarants father, the appellant. The only likely explanation was that both
    were telling the truth, thus the reliability requirement had been met:
Khelawon
,
    at para. 86.

[38]

In
Trieu
, a majority of this court considered that in combination, a
    videotape of the recanting witness statement coupled with the opportunity for
    full cross-examination of the witness, went virtually all of the way to
    providing the trier of fact with the tools necessary to adequately assess
    reliability:
Trieu
, at para. 76. In the circumstances, the oath carried
    only a modest burden in the assessment of threshold reliability:
Trieu
,
    at para. 78.

[39]

The
Trieu
majority considered that two types of evidence could constitute
    appropriate substitutes for an oath administered at the outset of the
    out-of-court statement:

i.

evidence from which it can reasonably be inferred that, when the
    statement was made, the declarant appreciated the solemnity of the occasion and
    the importance of telling the truth; and

ii.

external evidence, which is, at once, itself reliable and tends to
    confirm, in a meaningful way, the reliability of the out-of-court statements.

Trieu
, at para. 85. Among the relevant
    factors in
Trieu
were the fact that the witness had been charged with
    an offence, cautioned, and understood his
Charter
rights and that the
    statement, in material respects, was similar to the statement of another.
    Striking similarity was not required:
Trieu
, at paras. 90 and 121.

[40]

In
    the end, for out-of-court statements of non-accused witnesses to be admissible
    as evidence of the truth of their contents, the
B.(K.G.)
indicia are
    not the exclusive means of establishing threshold reliability. The threshold
    reliability of a non-accused witness prior inconsistent statement may be
    established by:

i.

the presence of adequate substitutes for testing truth and accuracy
    (procedural reliability); and

ii.

sufficient circumstantial guaranties of reliability or inherent
    trustworthiness (substantive reliability).

Khelawon
, at paras. 61-63;
R. v. Youvarajah
,
    2013 SCC 41, at para. 30. These two principal ways of establishing threshold
    reliability are
not
mutually exclusive:
R. v. Devine
, 2008
    SCC 36, [2008] 2 S.C.R. 283, at para. 22;
Youvarajah
, at para. 30.

The Principles Applied

[41]

For
    reasons that I will develop, I would not give effect to this ground of appeal.

[42]

First,
    Amofahs out-of-court statement was videotaped in its entirety. Thus, the
    several indicia of credibility and reliability available to the judge as a
    trier of fact where a witness testifies at trial were available equally in
    connection with the out-of-court statement. The reproduction of the statement
    and the video recording eliminated the danger of inaccurate recounting, an
    important factor underlying the rule excluding hearsay evidence.

[43]

Second,
    Stephen Amofah testified at trial. Trial counsel had full opportunity to
    cross-examine Amofah, an opportunity not circumscribed by any claimed memory deficits
    or assertions of privilege. The availability of the declarant for
    cross-examination goes a long way to satisfy the requirement of adequate
    substitutes for establishing threshold reliability:
Khelawon
, at para.
    66. Availability of the non-accused witness for cross-examination is the most
    important factor supporting the admissibility of a prior inconsistent statement
    of that witness for the truth of its contents:
R. v. Couture
, 2007 SCC
    28, [2007] 2 S.C.R. 517, at paras. 92 and 95;
Youvarajah
, at para. 35.

[44]

Third,
    the absence of an oath and warning is
not
fatal to the admissibility
    of the out-of-court statement. The
B.(K.G.)
indicia, which include an
    oath and warning about sanctions for untruthfulness is one, are neither
    conditions precedent to admissibility nor are they exclusive means of
    establishing threshold reliability:
Khelawon
, at paras. 61-63;
Youvarajah
,
    at para. 30. Other circumstantial guaranties may suffice:
B.(K.G.)
, at
    para. 104.

[45]

Fourth,
    although the witness in this case was not under oath and had not been warned
    about the consequences of untruthfulness, some circumstantial guarantees of
    reliability were present when the statement was made. Amofah was under arrest
    for unlawful possession of firearms, a serious offence. He had been told repeatedly
    about the reasons for his arrest and about his right to retain and instruct
    counsel without delay. He knew he did not have to speak to the police. He knew
    that whatever he said would be completely recorded and could be used as
    evidence. The imperative of speaking the truth and the consequences of lying
    could scarcely have been lost on him.

[46]

Fifth,
    in its material features, Amofahs statement was consistent with the contents
    of Clifford Adjeis 911 call of which Amofah could have had no knowledge when
    he gave his statement.

[47]

Finally,
    trial counsel for the appellant acknowledged that the absence of an oath
per
    se
did not undermine the admissibility of Stephen Amofahs out-of-court
    statement as evidence of the truth of its contents. Rather, counsel submits
    that a global reliability assessment was required prior to admitting Amofahs
    statement. For reasons I have given, I disagree and would not accede to this
    ground of appeal.

Ground #2: Pre-trial Silence as a Credibility Factor

[48]

The
    second ground of appeal alleges that the trial judge improperly used the
    appellants pre-trial silence as a basis upon which to reject the evidence the
    appellant gave at trial. To furnish the context essential for a consideration
    of this ground of appeal, it is helpful to begin with a brief reference to the
    appellants evidence at trial and the reasons of the trial judge before turning
    to the principles that inform the decision on this ground of appeal.

The Appellants Version

[49]

The
    appellant denied knowledge of or control over the guns, ammunition, and high
    capacity magazine found in the duffle bag. He acknowledged that he had put a
    long-handled, heavy-headed object down the front of his pants as Clifford
    arrived. He explained that the object was a sledgehammer, not a gun. He started
    to pull it out to hit Clifford because he was fed up with the ongoing argument
    between Charles and Clifford.

The Reasons of the Trial Judge

[50]

The
    trial judge applied the principles of
R. v. W.(D.)
, [1991] 1 S.C.R.
    742 to the evidence of the appellant. He rejected the appellants testimony
    about the sledgehammer because it (the testimony) was undermined by the
    numerous falsehoods scattered throughout his testimony. After enumerating
    seven specific examples of these falsehoods, the trial judge concluded:

In sum, and for the reasons set out above, I do not accept
    Richwoods evidence that he had a sledgehammer in his pants. The first time
    that this explanation was attempted was before me at trial. In my view, this
    was a complete fabrication, invented by the accused, and supported in part by a
    well-meaning mother, to avoid a firearms conviction.

[51]

The
    trial judge also rejected the appellants evidence because of the strength of
    the evidence introduced in the three police statements admitted under the
    principled exception to the hearsay rule. He considered these statements to be
    accurate and truthful.

The Arguments on Appeal

[52]

For
    the appellant, Mr. Stribopoulos contends that the trial judge erred in law when
    he rejected the appellants evidence on the basis that the appellant had never
    before disclosed the explanation (a sledgehammer, not a gun) advanced at trial.

[53]

Mr.
    Stribopoulos says that the appellant, as a person charged with an offence, had
    a constitutionally-protected right to remain silent during the police
    investigation and at trial. To link rejection of the appellants testimony to
    his failure to speak with or disclose his explanation to the police is to
    attach evidentiary significance to the exercise of a constitutional right, a
    chain of reasoning that is not available to a trier of fact and constitutes an
    error in law.

[54]

For
    the respondent, Ms. Henschel takes the position that the passage the appellant
    impugns as an impermissible use of the exercise of a constitutional right
    formed no part of the trial judges reasons for rejecting the appellants
    testimony. The rejection was based on the several falsehoods identified by the
    trial judge and the overwhelming nature of the case revealed in the prior
    statements of the three recanting witnesses. This observation by the trial
    judge was unfortunate, but did not taint his credibility findings or his
    ultimate determination that the Crown had proven its case beyond a reasonable
    doubt.

The Governing Principles

[55]

The
    governing principles are uncontroversial.

[56]

First,
    a person suspected of or charged with a crime has a right to silence that she
    or he may exercise in the investigative stages of proceedings:
R. v. Chambers
,
    [1990] 2 S.C.R. 1293, at p. 1315. This right to silence is a basic tenet of our
    legal system and thus falls within the sweep of s. 7 of the
Charter
:
Chambers
,
    at p. 1316;
R. v. Hebert
, [1990] 2 S.C.R. 151, at p. 161.

[57]

Second,
    it is not open to a trier of fact to reject an accuseds evidence on the basis
    that she or he remained silent at the investigative stage of proceedings:
R.
    v. Rohde
, 2009 ONCA 463, 246 C.C.C. (3d) 18, at para. 18;
R. v. Palmer
,
    2008 ONCA 797, at para. 9; and
R. v. Rivera
, 2011 ONCA 225, 104 O.R.
    (3d) 561, at paras. 113-114.

The Principles Applied

[58]

I
    would reject this ground of appeal. Reading the reasons of the trial judge as a
    whole, I am simply not persuaded that the trial judge rejected the appellants
    testimony on the basis of the appellants pre-trial silence.

[59]

The
    trial judge rejected the appellants testimony on two grounds:

i.

the myriad inconsistencies and falsehoods in the appellants testimony;
    and

ii.

the cumulative force of the out-of-court statements of the three Crown
    witnesses whose statements were admitted for their truth under the principled
    exception to the hearsay rule.

[60]

Both
    of these grounds for rejecting the appellants testimony were open to the trial
    judge. Neither reflects legal error. The structure of the trial judges reasons
    makes it plain that these grounds constituted the true basis for rejection of
    the appellants testimony. Nowhere in closing submissions was it suggested by
    anybody that the trial judge should draw an adverse inference against the
    appellant because of his pre-trial silence.

Ground #3: The
Kienapple
Principle

[61]

The
    final ground of appeal invokes the decision in
R. v. Kienapple
, [1975]
    1 S.C.R. 729, and the principle that bars multiple convictions for the same
    delict. The respondent acknowledges the application of the rule, but would
    limit the scope of its application in this case.

The Relevant Counts

[62]

The
    indictment on which the appellant was tried included 17 counts. The trial judge
    entered convictions on all counts. No conditional stays were sought or entered.

[63]

Counts
    5 and 6 alleged unlawful possession of the same firearm, a 12 gauge Winchester
    shotgun, without a licence. Count 5 alleged a breach of s.  92(1) of the
Criminal
    Code
, and count 6 a breach of s. 91(1).

[64]

Counts
    7 and 15 alleged a breach of the same probation order. The term breached was a
    prohibition against carriage or possession of weapons as defined by the
Criminal
    Code
. Counts 9 and 16 charged failures to comply with the same probation
    order by the same conduct  failure to keep the peace and be of good behaviour.

[65]

Counts
    8 and 14 alleged identical breaches of a firearms prohibition by possession of
    a firearm. Neither count particularized the firearm of which the appellant was
    alleged to be in possession in breach of the prohibition.

The Arguments on Appeal

[66]

For
    the appellant, Mr. Stribopoulos submits that a conditional stay should be
    entered on one count of each pairing. Where the offences in the pairing differ
    in gravity, as they do in counts 5 and 6, Mr. Stribopoulos says that the stay
    should be entered on the offence of lesser gravity. The necessary factual and
    legal nexus have been established.

[67]

For
    the respondent, Ms. Henschel acknowledges that the rule the appellant invokes
    precludes convictions for multiple offences where both a factual and legal
    nexus connects those offences. To establish a factual nexus, the appellant must
    demonstrate that both charges arise out of the same transaction. To establish a
    legal nexus, Ms. Henschel says, the appellant must show that both offences
    constitute a single wrong or delict.

[68]

Ms.
    Henschel accepts that where the same transaction gives rise to two or more
    offences with the same or substantially the same elements, and an accused is
    found guilty of more than one, a conditional stay should be entered on the less
    serious count and the conviction on the more serious count left undisturbed.
    She concedes that the rule requires entry of a conditional stay on count 6, and
    on one of counts 9 and 16 and counts 11 and 12. The rule, she says, cannot be
    invoked in connection with counts 7 and 15, or 8 and 14, because the counts do
    not relate to the same delict: two weapons were involved and the possession of
    each was a separate and distinct breach of the governing orders.

The Governing Principles

[69]

Under
Kienapple
, the relevant inquiry when an accused invokes the rule
    against multiple convictions is whether the same cause or matter (rather than
    the same offence) is comprehended by two or more offences:
Kienapple
, at
    p. 750. Where two or more offences contain the same or substantially the same
    elements, application of the rule is triggered:
Kienapple
, at p. 751.

[70]

The
    decision in
Kienapple
does
not
prohibit a multiplicity of
    convictions, each in respect of a different factual incident:
R. v. Prince
,
    [1986] 2 S.C.R. 480, at p. 491. The rule does, however, bar multiple
    convictions for offences that arise from the same transaction:
Prince
,
    at p. 491. The factual nexus requirement is satisfied where it is the same act
    of the accused that grounds each of the charges:
Prince
, at p. 492.
    Where one act ends and another begins is often not easy to define and requires evaluation
    on a case-by-case basis:
Prince
, at p. 492.

[71]

Where
    a sufficient factual nexus between the charges is established, it becomes
    necessary to determine whether there is an adequate relationship between the
    offences themselves:
Prince
, at p. 493. This requirement of a legal
    nexus will only be satisfied if there is no additional and distinguishing
    element that goes to guilt contained in the offence that the accused seeks to
    preclude under the rule:
Prince
, at pp. 498-499. Where the offences
    are of unequal gravity, however, the rule against multiple convictions may bar
    a conviction for a lesser offence, notwithstanding that there are additional
    elements in the greater offence for which a conviction has been registered,
    provided that there are no additional elements in the lesser offence:
Prince
,
    at p. 499.

[72]

Sometimes,
    an element of an offence sufficiently corresponds to another element such that
    it cannot be regarded as additional or distinct. One element may be a
    particularization of another element, and thus may not be considered as a
    distinguishing feature that renders the
Kienapple
rule inapplicable:
Prince
,
    at p. 500. Elements may correspond to one another if there is more than one
    method, enumerated in more than one offence, to prove a single delict:
Prince
,
    at p. 501. A sufficient correspondence between elements may exist to sustain
    the application of
Kienapple
when Parliament, in effect, deems a
    particular element to be satisfied by proof of a different nature:
Prince
,
    at p. 501.

The Principles Applied

[73]

I
    would give effect to this ground of appeal and enter conditional stays on one
    count of each pairing described above.

[74]

Ms.
    Henschel acknowledges the application of the principle requires entry of a
    conditional stay on counts 6 and 12, and on one of counts 9 and 16. I agree.

[75]

The
    offences charged in counts 5 and 6 and in counts 11 and 12 contain
    substantially the same elements and arise out of the same transaction. It
    follows from
Prince
that a conditional stay should be entered on the
    counts that are less serious: counts 6 and 12.

[76]

Counts
    9 and 16 are exact duplicates. Each alleges a failure to comply with the same
    term of the same probation order, at the same time, and in the same place:
    failure to keep the peace and be of good behaviour. A conditional stay should
    be entered on count 16.

[77]

Counts
    7 and 15 are in identical terms. Each alleges a failure to comply with the same
    condition, in the same probation order, at the same time, and in the same
    place. The condition breached is alleged to be not carry or possess weapons as
    defined by the
Criminal Code
. Neither count particularizes the weapon
    possessed in contravention of the prohibition in the probation order. The same
    may be said of counts 8 and 14, except that the underlying order breached in
    connection with those counts is a firearms prohibition under s. 110 of the
Criminal
    Code
.

[78]

In
    the absence of particularization of the weapon or firearm in the counts
    charging these offences, I can see no basis upon which all four convictions
    should stand. The same conduct grounds each charge. The firearms were found together
    in the same bag. The offences in each pair are identical and the allegations of
    each in identical terms. I would enter conditional stays of the convictions on
    counts 14 and 15 and leave the convictions on counts 7 and 8 undisturbed.

CONCLUSION

[79]

For
    these reasons, I would dismiss the appeal from the convictions recorded at
    trial except to the extent of ordering that conditional stays be entered on the
    convictions on counts 6, 12, 14, 15, and 16.

Released:

AUG 12 2013                                   David
    Watt J.A.

MR                                                  I
    agree M. Rosenberg J.A.

I
    agree S.E. Pepall J.A.


WARNING

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

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

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

(a)       any
    of the following offences;

(i)   an
    offence under section 151, 152, 153, 153.1, 155, 159, 160, 162, 163.1, 170,
    171, 172, 172.1, 173, 210, 211, 212, 213, 271, 272, 273, 279.01, 279.02,
    279.03, 346 or 347,

(ii)  an
    offence under section 144 (rape), 145 (attempt to commit rape), 149 (indecent
    assault on female), 156 (indecent assault on male) or 245 (common assault) or
    subsection 246(1) (assault with intent) of the
Criminal Code
, chapter
    C-34 of the Revised Statutes of Canada, 1970, as it read immediately before
    January 4, 1983, or

(iii) an
    offence under subsection 146(1) (sexual intercourse with a female under 14) or
    (2) (sexual intercourse with a female between 14 and 16) or section 151
    (seduction of a female between 16 and 18), 153 (sexual intercourse with
    step-daughter), 155 (buggery or bestiality), 157 (gross indecency), 166 (parent
    or guardian procuring defilement) or 167 (householder permitting defilement) of
    the
Criminal Code
, chapter C-34 of the Revised Statutes of Canada, 1970,
    as it read immediately before January 1, 1988; or

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

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

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

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

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

(4)
An order made under
    this section does not apply in respect of the disclosure of information in the
    course of the administration of justice when it is not the purpose of the
    disclosure to make the information known in the community. 2005, c. 32, s. 15;
    2005, c. 43, s. 8(3)(b).

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

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

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. B.T., 2013 ONCA 535

DATE: 20130830

DOCKET: C56434

Sharpe, Epstein and Lauwers JJ.A.

BETWEEN

Her Majesty the Queen

Appellant

and

B.T.

Respondent

Benita Wassenaar for the appellant

Paolo Giancaterino, Michael A. Smith and Jessica
    Abou-Eid for the respondent

Heard and released orally: August 26, 2013

On appeal from the order of Justice Colin D.A. McKinnon
    J. of the Superior Court of Justice, December 4, 2012, allowing a summary
    conviction appeal from the sentence imposed on May 28, 2010 by Justice Jack D.
    Nadelle of the Ontario Court of Justice.

ENDORSEMENT

[1]

The respondent was convicted of sexual assault and sexual touching and
    sentenced to a total of 6 months imprisonment. The complainants were 12 and 16
    years old at the time of the offences and were friends of the respondents
    step-daughter. At the sentencing hearing, the trial judge refused to permit the
    respondents counsel to cross-examine the complainants on their victim impact
    statements.

[2]

The summary conviction appeal judge dismissed the appeal from conviction
    but allowed the appeal from sentence on the ground that the trial judge had
    erred by refusing to permit cross-examination on the victim impact statements.
    He remitted the matter to the trial court to hold a fresh sentencing hearing.

[3]

The Crown seeks leave to appeal on the ground that the summary
    conviction appeal judge had no jurisdiction to remit the matter for a fresh
    sentencing hearing and that he also erred in finding that the trial judge
    should have permitted cross-examination on the victim impact statements.

[4]

For the following reasons, we grant leave to appeal and allow the
    appeal.

[5]

It is conceded that the summary conviction appeal judge erred in
    remitting the matter to the trial judge to hold a fresh sentencing hearing. The
    summary conviction appeal judge had no jurisdiction pursuant to the relevant
    provisions of the
Criminal Code
governing summary conviction appeals to
    make such an order. The respondent does not dispute that leave to appeal must
    be granted and the appeal allowed on that issue.

[6]

We also grant leave on the issue with respect to the permission to
    cross-examine on the victim impact statements. In our view, the summary
    conviction appeal judge erred in finding an error on the part of the trial
    judge. The complainants did not read their victim impact statements in open
    court. The respondents counsel stated that he proposed to ask the complainants
    a few questions so Your Honour can get a full flavour of where these
    individuals may be at. I am in the courts hands. The trial judge indicated
    that he was not inclined to allow the cross-examination and counsel did not
    press the matter or provide any facts or further details to explain the basis
    for his proposed cross-examination. In our view, on this record, the respondent
    failed to identify with sufficient clarity a fact or facts contained in the
    victim impact statements that were disputable and that the request to
    cross-examine was not specious or empty as required by
R. v. V.W
.,
    2008 ONCA 55.

[7]

In any event, we note that the trial judge did not appear to have placed
    any significant reliance on the victim impact statements when determining the
    appropriate sentence. He indicated that he had read the statements and explained
    their use in a proper way. The sentence he imposed was well within the range
    for these offences quite apart from any potentially aggravating factors
    revealed in the victim impact statements.

[8]

The fresh evidence as to the respondents state of health, in the
    circumstances of this case, is a matter for the correction officials to
    consider when dealing with the respondent and does not persuade us that the
    otherwise fit sentence should be varied.

[9]

Accordingly, we grant leave to appeal, allow the appeal and pursuant to
    ss. 687 and 839(2), restore the sentence imposed by the trial judge. The
    appellant is ordered to surrender into custody forthwith failing which, a
    warrant for his arrest shall issue.

Robert J. Sharpe J.A.

Gloria Epstein J.A.

P. Lauwers J.A.