COURT OF APPEAL FOR ONTARIO

CITATION: Furlan (Re), 2014 ONCA 740

DATE: 20141027

DOCKET: C57275

Cronk, LaForme and Lauwers JJ.A.

BETWEEN

Person
    in Charge of

Centre
    for Addiction and Mental Health

Appellant

and

Her Majesty the Queen

Respondent

and

Daniel Furlan

Respondent

Janice E. Blackburn, for the appellant

Joseph Di Luca and Erin Dann,
Amicus Curiae

Andreea Baiasu, for the respondent Her Majesty the Queen

Daniel Furlan, respondent in person

Heard: October 21, 2014

On appeal from the disposition of the Ontario Review
    Board, dated April 23, 2013, with reasons reported at [2013] O.R.B.D. No. 1656.

By the Court:

I.        Introduction

[1]

In July 2008, the respondent, Daniel Furlan, assaulted three persons.
    The victims included a 13-year-old boy whose arm was fractured when Mr. Furlan tried
    to throw him into the path of a moving vehicle, and a police officer whom Mr.
    Furlan assaulted in the course of resisting arrest.  On August 6, 2009, he was
    found not criminally responsible (NCR) on account of mental disorder on
    charges of aggravated assault, assault with intent to resist arrest, assault
    causing bodily harm, and assault.

[2]

Mr. Furlan was subsequently diagnosed with schizophrenia, possible
    antisocial personality disorder, and polysubstance dependence involving
    cocaine, crack cocaine, heroin, alcohol and marijuana.

[3]

Following the NCR finding, Mr. Furlan was detained at the Centre for
    Addiction and Mental Health (the Hospital) until November 2010, when he began
    to live in the community with his parents, subject to a detention order.  In
    April 2010, a majority of the Ontario Review Board (the Board) imposed a
    conditional discharge after finding that Mr. Furlan had been compliant with his
    medication, had pursued recommended rehabilitation programs, and his urine drug
    screens were negative.

[4]

At Mr. Furlans annual review hearing held on April 23, 2013, in the
    face of evidence of his continued reported progress, the Board accepted the then
    unanimous opinion of Mr. Furlans treatment team, supported by the Crown on the
    available evidence, that Mr. Furlan no longer met the threshold of significant
    risk to the safety of the public and, consequently, that he should be
    absolutely discharged.

[5]

The Hospital appeals from the April 2013 disposition of the Board
    ordering that Mr. Furlan be absolutely discharged.  It seeks an order setting
    aside the absolute discharge and substituting a conditional discharge in its
    place.

II.       Fresh Evidence

[6]

The Hospital does not challenge the reasonableness of the Boards
    absolute discharge disposition at the time made and based on the evidentiary
    record then before the Board.  Rather, the Hospital, supported by the Crown,
    relies exclusively on fresh evidence concerning Mr. Furlans post-discharge
    conduct and condition that it says undermines the Boards reasons for granting
    an absolute discharge and, in critical respects, the factual foundation for the
    Boards disposition.

[7]

The Hospitals fresh evidence consists
    of: 1) an affidavit of Dr. Padraig Darby (a practising psychiatrist and the
    Person in Charge of the Hospital for the purpose of Part XX.1 of the
Criminal
    Code
), sworn September 10, 2013; and 2) a
    further affidavit of Dr. Darby, sworn July 14, 2014.  The September 10, 2013
    affidavit was filed with this court as evidence in support of a motion to
    suspend the absolute discharge pending appeal, as heard and determined by Watt
    J.A. of this court on September 13, 2013.

[8]

The parties agree that this fresh
    evidence meets the test for admission on appeal established by s. 672.73(1) of
    the
Criminal Code
,
as discussed in
R.
    v. Owen
, 2003 SCC 33
,
at pp. 803-07.

We agree.

[9]

Amicus
seeks to counter the Hospitals fresh evidence by
    tendering additional fresh evidence on
behalf of Mr.
    Furlan, which
Amicus
submits
    contradicts or belies many of the assertions in the Hospitals fresh evidence.
Amicus
 fresh evidence consists of
    affidavits sworn by Mr. Furlan and his mother.

[10]

We are satisfied that the fresh evidence
    proffered by
Amicus
also satisfies
    the test for admission of fresh evidence on appeal.  In our view, it is in the
    interests of justice that the fresh evidence tendered by
Amicus
and the Hospital be admitted as part of the record on this
    appeal.

III.      Issue

[11]

As
    we see it, the sole issue on appeal is whether the foundation for the absolute
    discharge ordered by the Board has been shattered by the Hospitals fresh
    evidence.  The central question is whether the fresh evidence could reasonably
    have affected the outcome of the Board hearing.  For the reasons that follow, we
    conclude that the answer to this question is yes.  Consequently, a new Board
    hearing is required.

IV.     Discussion

[12]

The
    Boards decision to absolutely discharge Mr. Furlan flowed from its conclusion
    that, at the time of the Board hearing, Mr. Furlan did not pose a significant
    threat to the safety of the public.  This dispositive conclusion was based on
    the Boards acceptance of evidence before it that Mr. Furlan had good insight
    into his mental illness, [and] the importance of medication compliance and of
    abstaining from substances.  The Boards ruling also rested on undisputed evidence
    that Mr. Furlan had been fully compliant, for more than one year prior to the
    hearing, with all the terms of his conditional discharge, and had not presented
    with any symptoms of his mental illness.  Further, he had sought help when
    required and it was anticipated that he would do so in the future.

[13]

Based
    on this evidence, all parties before the Board accepted that Mr. Furlan no
    longer represented a significant risk to the safety of the public and that he
    was therefore entitled to an absolute discharge.  The Board agreed, and so
    ordered.  Indeed, once the Board concluded that Mr. Furlan did not represent a
    significant threat to the safety of the public, the only available disposition
    was an absolute discharge, as a matter of law.

[14]

The
    Hospital argues that the fresh evidence proffered by it materially undermines
    the foundation for the Boards disposition and, as a result, the fresh evidence
    could reasonably have affected the result at the Board hearing.

[15]

The
    Hospitals fresh evidence indicates that after Mr. Furlans absolute discharge
    from the Hospital:

1)

almost
    immediately, he resumed the use of drugs and alcohol, his mental condition
    significantly deteriorated, and he became psychotic, hostile, verbally
    aggressive and threatening;

2)

his
    urine samples tested positive for cannabinoids and cocaine;

3)

concerns
    about his compliance with his psychiatric medication resurfaced;

4)

he
    missed two out-patient appointments with his treating psychiatrist;

5)

he
    was admitted on two separate occasions to area hospitals in June 2013 under s.
    16 of the
Mental Health Act
, R.S.O. 1990, c. M.7 due to allegedly
    hostile and aggressive behaviour.  A urine sample taken then tested positive
    for both THC and cocaine;

6)

on
    June 26, 2013, he was transferred from a local hospital to the Hospital when
    mental health authorities invoked provincial mental health legislation to have
    him confined involuntarily.  At the hospital, he exhibited signs of mania;

7)

from
    July 2, 2013, he was civilly committed at the Hospital as likely posing a risk
    of causing serious bodily harm to others; and

8)

during
    the period July 6, 2013 to September 13, 2013, he presented on at least one
    occasion in a full manic state, requiring chemical restraint.  He also
    threatened a nurse with physical violence, refused his medication, and was
    placed in seclusion because of aggressive episodes.

[16]

As
    a result of these events, by mid-September 2013, both the Hospital and Mr.
    Furlans then treating psychiatrist  Dr. Ian Swayze  formed the opinion that
    Mr. Furlan again met the significant threat threshold and required structural
    conditions of detention in the interests of public safety.

[17]

Accordingly,
    on September 13, 2013, the Hospital moved before this court for an order
    suspending Mr. Furlans absolute discharge pending appeal, pursuant to s.
    672.76 of the
Criminal Code
.  Justice Watt, sitting in chambers, determined
    that Mr. Furlan had suffered a significant decompensation in his mental health,
    including psychosis and mania due to his resumption of alcohol and illicit
    drugs and non-compliance with his medication regime, and that he met the
    significant threat threshold.  Accordingly, he granted the Hospitals motion,
    suspended the Boards April 2013 disposition, and directed a conditional
    discharge disposition on specific terms pending the determination of this
    appeal:
Furlan (Re)
, 2013 ONCA 618; see also
R. v. Kobzar
,
    2012 ONCA 326, 110 O.R. (3d) 670.

[18]

In
    the 13 months since Watt J.A.s order, Mr. Furlan has remained under the
    jurisdiction of the Board and subject to the conditional discharge ordered by
    Watt J.A.  He was detained at the Hospital as an inpatient until February 3,
    2014, when he was discharged to outpatient status by his then Hospital
    inpatient psychiatrist, Dr. Peter Prendergast.

[19]

On
    his discharge to outpatient status, Mr. Furlan: 1) was being treated with
    antipsychotic medication (ziprasidone) and lithium, on substitute consent; 2)
    had only somewhat limited insight, according to his treatment team; and 3)
    was reluctant to consider any increases in his antipsychotic medication.

[20]

Further,
    at the time of his discharge to outpatient status, it remained the opinion of Drs.
    Prendergast and Darby that Mr. Furlan posed a significant threat to the safety
    of the public and that, absent the external obligations imposed by a Board
    disposition, Mr. Furlan would likely return to substance use and/or medication
    non-compliance and, in such a condition, would likely become volatile and
    aggressive and engage in violent behaviour.

[21]

As
    an outpatient, Mr. Furlan has been living with his family at the family home.
    There is no dispute that he has made considerable progress.  He is employed on
    a full-time basis and is seen by his outpatient psychiatrist  Dr. Virginia
    Duff  approximately every two weeks.  He is viewed by his treatment team as
    doing well.  He denies experiencing problems or cravings for substances,
    describes his mood as steady, is on a reduced antipsychotic medication regime
    and, recently, has been regarded by Dr. Duff as capable respecting his
    psychiatric medications.  He continues to take his current antipsychotic and
    mood-stabilizer medications and has been assessed as not being an imminent
    risk of violence.

[22]

Nonetheless,
    given all the events of the last 18 months and Mr. Furlans condition and
    conduct throughout, both Drs. Duff and Darby are of the clinical opinion that
    Mr. Furlan continues to meet the significant threat threshold.  In his July 14,
    2014 affidavit, Dr. Darby explained:

In my clinical opinion, absent conditions similar to those Mr.
    Furlan is currently required to abide by, he is likely to again return to
    substance abuse and/or be noncompliant with antipsychotic medication.  It
    remains my opinion that if Mr. Furlan returns to substance use or is
    noncompliant, his mental status will likely deteriorate and he is likely to
    become increasingly volatile, aggressive and engage in behaviour similar to the
    index offences.

[23]

Mr.
    Furlan, in his affidavit, disputes this opinion, maintaining that he is
    committed to abstinence from substance abuse and compliance with his
    medications.  In addition, in her affidavit filed as part of the fresh evidence
    tendered by
Amicus
, Mr. Furlans mother now claims that she
    exaggerated Mr. Furlans aggressive and threatening behaviour following his
    April 2013 absolute discharge.

[24]

That
    said, no fresh evidence from a qualified expert has been tendered to refute the
    Hospitals current assessment of the risk posed by Mr. Furlan.  Nor does Mr. Furlan
    deny his rapid decompensation, return to drug and alcohol use, and medication non-compliance
    after his absolute discharge.

[25]

In
    all these circumstances, we agree with the Hospital and the Crown that the
    Hospitals fresh evidence undermines the Boards reasons for granting an
    absolute discharge, especially the then accepted factual foundation for that disposition.

[26]

In
    particular, the new evidence of Mr. Furlans rapid decompensation and volatile
    and aggressive behaviour after his absolute discharge collides with the Boards
    findings that he had excellent insight into his mental illness and the need to
    take his prescribed medication and abstain from drug use.  If this evidence had
    been before the Board, it is beyond doubt that it reasonably could have affected
    the Boards decision.  As a result, we conclude that the appeal must be allowed
    and the matter remitted back to the Board for a rehearing.

[27]

We
    note that on the application before him in September 2013, Watt J.A. concluded
    that the then available evidence of Mr. Furlans conduct and condition after he
    was discharged absolutely from the Hospital could, if believed and
    unchallenged, reasonably have affected the result at the hearing.

[28]

Amicus
,
    in his customary thoughtful submissions, contends that this court is without
    jurisdiction to allow this appeal and remit the matter to the Board for a
    rehearing unless this court first makes a positive finding that Mr. Furlan
    poses a significant threat to public safety at present.

[29]

We
    do not agree.
Amicus
has been unable to point to any authority in
    support of this contention.  Moreover, this court has intervened and remitted
    similar cases back to the Board for rehearing in analogous circumstances: see
    for example,
Ontario Shores Centre for Mental Health Sciences v. Darch
,
    2010 ONCA 36;
Providence Continuing Care Centre v. Edgar
(2006), 216
    C.C.C. (3d) 563.  As
Darch
and
Edgar
confirm, the key
    question for this court at this time is whether the admissible fresh evidence
    tendered by the parties, had it been before the Board, could reasonably have
    affected the result of the Board hearing.  In our opinion, the Hospitals fresh
    evidence regarding Mr. Furlans post-April 2013 conduct and mental state easily
    meets this test.

[30]

We
    make two further observations.  First, approximately 13 months have passed
    since the September 2013 order of Watt J.A. imposing a conditional discharge on
    Mr. Furlan.  In that time, the Board has not held any review hearing regarding
    Mr. Furlan.  In our view, a new Board hearing concerning Mr. Furlan should be
    held as soon as practicable and no later than 60 days from the date of these
    reasons.  It will be for the Board at that hearing to determine the degree of
    risk now posed by Mr. Furlan to public safety and an appropriate disposition
    based on the evidence adduced before the Board.

[31]

Second,
    the court recognizes the significant progress Mr. Furlan appears to have made
    as an outpatient since February 2014.  He is to be commended for all that he
    has achieved in the management and control of his mental illness.  We
    anticipate that evidence of his progress will be an important consideration for
    the Board when fashioning an appropriate disposition at the new hearing.

V.      Disposition

[32]

For
    the reasons given, the appeal is allowed, the Boards April 23, 2014 disposition
    is set aside, and the matter is remitted to the Board for a new hearing in
    accordance with these reasons.  Since the effect of this decision is to subject
    Mr. Furlan to the conditional discharge in place immediately before the Boards
    April 23, 2014 disposition, we decline to grant the further relief sought by
    the Hospital.

Released:

OCT 27 2014                                   E.A. Cronk
    J.A.

EAC                                                H.S.
    LaForme J.A.

P.
    Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Gay Company Limited v. General Sprinklers Inc.,
    2014 ONCA 707

DATE: 20141016

DOCKET: C58516

Hoy A.C.J.O., Feldman and Blair JJ.A.

BETWEEN

Gay Company Limited

Plaintiff (Appellant)

and

General Sprinklers Inc.

Defendant (Respondent)

Richard J. Mazar, for the appellant

Christopher Valente, for the respondent

Heard and released orally:  September 8, 2014

On appeal from the order of Justice Stephen T. Bale of
    the Superior Court of Justice, dated February 25, 2014.

ENDORSEMENT

[1]

The appellant appeals the order of the motion judge allowing the
    respondents motion for summary judgment and dismissing the appellants action
    against the respondent.

[2]

Briefly, the background is as follows.

[3]

The appellant, a general contractor, hired the respondent to install a
    sprinkler system in a commercial building.  The sub-contract between them
    required the respondent to save harmless the appellant from any fines, cost,
    expenses, claims and charges.  The appellant alleged that defects in the
    sprinkler system installed by the respondent caused water damage to the
    building and, nearly three and one-half years after the water damage occurred,
    sued the respondent for breach of contract, claiming that the respondent had
    breached an implied term of the sub-contract that it would perform its work in
    a good workmanlike manner.

[4]

The respondent moved for summary judgment dismissing the appellants
    action on the basis that the appellants action against the respondent was
    barred by s. 4 of the
Limitations Act, 2002
.  The motion judge agreed
    that the appellants action was statute-barred, allowed the summary judgment
    motion, and dismissed the appellants action.

[5]

On appeal, the appellant argues that the motion judge erred in
    concluding that its cause of action arose when the building suffered water
    damage and not when, more than three years later, the appellant sent the
    respondent an invoice for the out-of-pocket expenses it had occurred in
    repairing the building. The appellant says that it only knew that it had
    suffered damage when it sought reimbursement for the expenses it had occurred
    under the save harmless clause and the respondent refused to pay.

[6]

We disagree.  In our view, the motion judge correctly concluded that the
    appellants cause of action arose when the water damage occurred.  From that
    date, the appellant asserted that the respondent was responsible for the
    damage.  Indeed, shortly thereafter the appellant sent the respondent letters
    putting the respondent on notice that the appellant held it responsible for the
    damage and estimating the appellants costs to repair.  For the purposes of the
Limitations Act, 2002
, the discovery date of the appellants claim
    against the respondent was accordingly when the loss occurred.

[7]

In the result, this appeal is dismissed.  The respondent shall be
    entitled to its costs in the amount of $4,500, inclusive of disbursements and HST.

Alexandra Hoy A.C.J.O.

K.
    Feldman J.A.

R.A. Blair
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Hanisch v. McKean, 2014 ONCA 698

DATE: 20141014

DOCKET: C57191

MacPherson, Simmons and Gillese JJ.A.

BETWEEN

Carla Hanisch

Plaintiff (Respondent)

and

Thomas William McKean
and Jane Marie Rita Lesaux

Defendants (
Appellant
)

F. Scott Turton, for the appellant

Gabrielle K. Kramer, for the respondent

Heard: June 10, 2014

On appeal from the judgment of Justice Guy P. Di Tomaso of
    the Superior Court of Justice, dated August 1, 2013, with reasons reported at
    2013 ONSC 2727.

Simmons J.A.:

[1]

The issues on appeal arise out of the respondents 1998 purchase of a
    97-acre hobby farm from the appellant.

[2]

Following the respondents purchase, the appellant and his wife retained
    a three-acre property adjacent to the farm. They built a retirement home on the
    adjacent property and have lived there full-time since 2008.

[3]

At the time of the respondents purchase, the appellant did not disclose
    to the respondent that an underground waterline originating from a spring on
    the farm supplied water to the farm as well as to the properties of some other
    neighbours. Further, the appellant did not disclose to the respondent that he
    believed that both he and the other neighbours supplied by the underground
    waterline were entitled to continue to receive water from the underground
    waterline.

[4]

Instead of disclosing the underground waterline and his expectations to
    the respondent, on the closing date of the sale of the farm property the
    appellant delivered a statutory declaration to the respondent in which the
    appellant made statements indicating, among other things, that he was not
    aware of any person or persons  having any claim or interest in the said lands
    or any part thereof adverse to or inconsistent with [his] title and that [he
    was] positive that none such exists.

[5]

The respondent learned about the underground waterline in June 2007 when
    one of the neighbours supplied by the underground waterline (the neighbour)
    reported receiving contaminated water. On receiving this information, the
    respondent immediately cancelled an order for 1000 turkey poults scheduled to
    be delivered to the farm within a couple of days. She subsequently interrupted
    her farming operation in other ways.

[6]

Soon after the neighbours report to the respondent, the respondents
    lawyer wrote to the neighbouring users of the underground waterline and
    requested that they stop using the water supplied by the underground waterline.
    In response to that request, the appellant immediately asserted a right to use
    the water.

[7]

In a proceeding involving the appellant, the respondent and the
    neighbour, the trial judge declared that the appellant and the neighbour do not
    have a prescriptive easement for the use of the water supply from the
    respondents land
[1]
and that the neighbour is not
    entitled to an injunction preventing the respondent from taking steps to
    interfere with the quality or quantity of the water supply.

[8]

However, the trial judge also concluded that the shared waterline from
    [the appellants property] to the [neighbours property] is a latent defect.
    Further, after finding that the appellant was not liable for fraudulent
    misrepresentation, the trial judge held that the appellant was liable for negligent
    misrepresentation. He awarded damages to the respondent in the amount of
    $25,500 together with costs against the appellant of $114,918.75. The parties
    included the findings concerning latent defect and fraudulent misrepresentation
    in the formal judgment.

[9]

Given that the damages award was premised on the finding of negligent
    misrepresentation, the main issues on appeal concern whether the trial judge
    made errors in that finding and in his damages award.

[10]

Before
    turning to those issues, I will deal with a preliminary issue raised by the
    respondent concerning this courts jurisdiction to entertain this appeal.

A.

The Jurisdiction Issue

(1)

The respondents argument

[11]

The
    respondent contends that this court lacks jurisdiction to entertain this appeal
    because the appeal relates solely to the damages awarded to her in the judgment
    in the amount of $25,500; the appeal does not relate to the non-monetary relief
    awarded in the judgment, namely, the declarations concerning
the use of the water supply
.

[12]

Under
    s. 19(1.2) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43 (CJA),
    the Divisional Court has jurisdiction to entertain an appeal from a final order
    of a Superior Court judge for a single payment of not more than $50,000,
    exclusive of costs. Thus, the damages award forming the subject matter of this
    appeal falls squarely within the monetary jurisdiction of the Divisional Court.

[13]

The
    respondent does not dispute that the Divisional Court would have no
    jurisdiction over an appeal from the non-monetary aspects of the judgment
.
However, neither the appellant
    nor the neighbour appealed those aspects of the judgment. Accordingly, the
    respondent submits that this court has no jurisdiction over this appeal. I
    disagree.

(2)

Relevant provisions of the CJA

[14]

As
    the jurisdiction issue raises a question of statutory interpretation, I will
    begin this portion of my reasons by setting out the relevant provisions of the
    CJA, which define the jurisdiction of both the Court of Appeal and the
    Divisional Court.

[15]

Section
    6(1)(b) of the CJA gives the Court of Appeal jurisdiction over all appeals from
    a final order of a judge of the Superior Court of Justice, except an order
    referred to in s. 19(1)(a) of the CJA or an order from which an appeal lies to
    the Divisional Court under another Act:

6. (1) An appeal lies to the Court of Appeal from,

(b) a final order of a judge of the
    Superior Court of Justice, except an order referred to in clause 19(1)(a) or an
    order from which an appeal lies to the Divisional Court under another Act.

[16]

Sections
    19(1)(a) and 19(1.2) of the CJA describe the classes of Superior Court final
    orders from which an appeal lies to the Divisional Court under the CJA, where
    the notice of appeal was filed on or after October 1, 2007:
[2]

19. (1) an appeal lies to the Divisional Court from,

(a) a final order of a judge of the
    Superior Court of Justice, as described in the subsections (1.1) and (1.2).

(1.2) If the notice of appeal is filed on or after October 1,
    2007, clause (1)(a) applies in respect of a final order,

(a) for a single payment of not
    more than $50,000, exclusive of costs;

(b) for periodic payments that
    amount to not more than $50,000, exclusive of costs, in the 12 months
    commencing on the date the first payment is due under the order;

(c) dismissing a claim for an
    amount that is not more than the amount set out in clause (a) or (b); or

(d) dismissing a claim for an
    amount that is more than the amount set out in clause (a) or (b) and in respect
    of which the judge or jury indicates that if the claim had been allowed the
    amount awarded would have been not more than the amount set out in clause (a)
    or (b).

[17]

Other
    relevant provisions of the CJA include s. 6(2), which provides that the Court
    of Appeal has jurisdiction to hear appeals that lie to other courts when an
    appeal in the same proceeding lies and is taken to the Court of Appeal:

6. (2) The Court of Appeal has jurisdiction to hear and
    determine an appeal that lies to the Divisional Court or the Superior Court of
    Justice if an appeal in the same proceeding lies to and is taken to the Court
    of Appeal.

[18]

Rule
    61.07(1) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, may
    also be relevant to the overall statutory scheme in that it provides that a
    cross-appeal may be commenced to set aside or vary the order appealed from, or,
    if the appeal is allowed in whole or in part, to seek other relief or a
    different disposition than the order appealed from. I will say more later about
    the relevance of this provision.

(3)

Discussion

[19]

The
    specific question raised by the respondent concerns the meaning of final order
    as it appears in ss. 6 and 19 of the CJA. If final order can properly be read
    as referring to the particular term(s) of a final order that is/are under
    appeal, then the respondent is correct and this appeal lies to the Divisional
    Court.

[20]

However,
    if final order must be read as meaning the entire final order, irrespective
    of what portions of the final order are under appeal, then the respondent is
    incorrect and this court has jurisdiction to entertain this appeal.

[21]

I
    note at the outset that, when determining this courts jurisdiction over orders
    having both final and interlocutory aspects, this court has generally
    distinguished between the final and interlocutory aspects of the order: see,
    for example,
Albert v. Spiegel
(1993), 17 C.P.C. (3d) 90;
Cole v.
    Hamilton (City)
(2002), 60 O.R. (3d) 284. However, this distinction is
    required by s. 6(1)(b) of the CJA, which limits the appellate jurisdiction of
    the Court of Appeal to final orders.

[22]

In
    my view, two factors point strongly to the conclusion that final order, as it
    appears in ss. 6 and 19 of the CJA, must be read as meaning the entire final
    order, irrespective of what portions of the final order are under appeal.

[23]

First,
    in
Sepe v. Monteleone
(2006), 78 O.R. (3d) 676, at para. 6, this court
    described the purpose of section 19(1)(a) of the CJA as being to define an
    easily applied cut-off line for litigants to determine the proper appeal route
    in any particular case. Examining the overall scheme of ss. 6 and 19 of the
    CJA in the light of this purpose of s. 19, interpreting final order as
    meaning anything other the whole of the final order would not make sense.

[24]

When
    ss. 6(1), 6(2) and 19 are read in combination, it is apparent that the scheme
    of these sections is to give the Court of Appeal default jurisdiction over
    appeals from final orders of the Superior Court of Justice  subject only to
    the exceptions created by s. 19 of the CJA and other specific statutory
    provisions. Section 6(2) underlines the intention to give the Court of Appeal
    default jurisdiction by providing that, where more than one court has jurisdiction
    over appeals in the same proceeding, the Court of Appeal may assume
    jurisdiction over all appeals.

[25]

Considered
    in the context of this statutory scheme, it would not make sense to interpret final
    order as meaning anything other than the whole of the final order.

[26]

For
    example, in the context of an order made in matrimonial proceedings, if final
    order were interpreted as including the particular term(s) of an order that
    is/are under appeal, one spouse could be required to appeal the support award to
    the Divisional Court, whereas the other spouse could be required to appeal the
    equalization payment made under the same order to the Court of Appeal. While it
    is true that under s. 6(2) of the CJA, the Court of Appeal would have
    jurisdiction to entertain both appeals once the appeal of the equalization
    payment was filed, it is unlikely that the legislature intended that appeals
    would have to be transferred or truncated depending on which party was the
    first to deliver its notice of appeal.

[27]

When
    read in light of the purpose of s. 19, which is to provide an easily applied
    cut-off line for litigants to determine the proper appeal route in any
    particular case, it is my view that final order as it appears in ss. 6 and 19
    can only sensibly be interpreted as meaning the whole of the final order.
    Otherwise, the proper appeal route from an order could change, depending on the
    terms of the order and the grounds of the appeal or cross-appeal.

[28]

Second,
    in applying the four subparagraphs in each of ss. 19(1.1) and (1.2) of the CJA
    to determine which court has jurisdiction, this court has generally focused on
    the final order as a whole and not simply the aspect of the order under appeal
    or the amount claimed on appeal by individual parties. In doing so, this court
    has made it clear that each of the subparagraphs in ss. 19(1.1) and (1.2) are
    disjunctive and therefore must be considered separately.
[3]
However, although claims and counterclaims are not to be combined,
[4]
when applying each subparagraph, all of the claims (or counterclaims) are to be
    added together, even if claimed by more than one party,
[5]
in order to determine which court has jurisdiction. Such an interpretation puts
    the emphasis on the entire final order and not simply on the aspect of the
    final order under appeal.

[29]

So,
    for example, in
McManus v. Feldman Investments Ltd.
, [2003] O.J. No.
    5762, this court determined that it had jurisdiction over an appeal where the
    appeal related solely to punitive damages quantified at $16,750, but the total
    amount of the judgment was $148,143.

[30]

Similarly,
    in
Mohammed (Personal Representative of) v. Tucci
, 2009 ONCA 554, 97
    O.R. (3d) 145, this court held that for the purpose of applying ss. 19(1)(a)
    and 19(1.1)(c) or (d), the value of all the plaintiffs claims that were
    dismissed must be added together to determine the total amount of the dismissed
    claim. In that case, the plaintiffs sued for damages arising from the death of
    their infant son, alleging medical malpractice. The trial judge dismissed the
    action, but assessed the damages for each parent in an amount that fell within
    the jurisdiction of the Divisional Court. However, when those sums were added
    together, the total exceeded the jurisdiction of the Divisional Court, giving
    this court jurisdiction.

[31]

Based
    on the foregoing reasons, I am satisfied that final order as it appears in
    ss. 6 and 19 of the CJA refers to the whole of the final order and I would not
    give effect to the respondents preliminary objection concerning jurisdiction.

B.

The Negligent Misrepresentation
    Issue

(1)

The trial judges findings

[32]

The
    trial judge rejected the respondents claim for fraudulent misrepresentation
    because he was not satisfied that the appellant fraudulently intended to
    deceive [the respondent]. However, although the trial judge had reservations
    about the respondents claim for fraudulent misrepresentation, he had no
    reservations that [the appellant was] liable to [the respondent] for negligent
    misrepresentation.

[33]

The
    trial judges conclusion that the appellant was liable for negligent
    misrepresentation rests largely on the following findings:

·

on the closing date of the sale of the
    farm, in response to a requisition letter from the respondents solicitor, the
    appellant delivered to the respondent a statutory declaration
in which
    the appellant made statements indicating, among other things, that he was not
    aware of any person or persons  having any claim or interest in the said lands
    or any part thereof adverse to or inconsistent with [his] title and that [he
    was] positive that none such exists.
As the
    appellant was at all times aware that other users claimed a right to use that
    waterline, the appellant was careless and reckless as to whether his
    statutory declaration was true. Furthermore:

o

the statutory declaration was broadly worded  it was
    intended to protect not just against actual easements but also against the risk
    of persons with any claim or interest in the farm;

o

when the appellant delivered the statutory declaration, he
    was aware that both he and other users claimed an interest in ongoing use of
    the water supply from the farm;

o

the appellants knowledge about the waterline was
    inconsistent with his statement in the statutory declaration that he was
    unaware of any persons having any claim inconsistent with his title, and this
    made the statutory declaration false;

o

although the appellant read every clause in the statutory
    declaration with his long-time lawyer, the appellant did not inform his lawyer
    about the shared waterline;

o

all of the evidence supports not some misunderstanding on
    the part of the appellant, but rather the making of a statutory declaration
    when he knew it was untrue.

·

the statutory declaration was delivered
    as part of the closing documents for the farm purchase, was intended to be
    relied upon and was relied upon;

·

the respondents reliance on the
    statutory declaration was reasonable  she was unaware of the existence of the
    waterline and the appellant had delivered the statutory declaration to her with
    the intention that she rely upon it;

·

the respondents reliance on the
    statutory declaration was both intended and reasonable, and this was
    sufficient, in the circumstances of this transaction, to give rise to a duty of
    care;

·

in the face of his knowledge about his
    own claim and the claims of other users to ongoing use of the water supply from
    the farm, the appellant was careless and reckless in making the statutory
    declaration; and

·

the respondents reliance on the
    statutory declaration was detrimental to her and resulted in damage.

[34]

The
    appellant submits that the trial judge made several errors in making these
    findings.

[35]

First,
    the appellant submits that the trial judge erred in relying on a tortious duty
    of care distinct from the contract when the contract contained an entire
    agreement clause specifying that there was no representation, warranty,
    collateral agreement or condition, which [affected the] Agreement other than as
    expressed [therein].
[6]

[36]

Second,
    relying on
Central Trust Co. v. Rafuse
, [1986] 2 S.C.R. 147, the
    appellant argues that it was not open to the trial judge to make a finding of
    negligent misrepresentation when the parties relationship was premised on a
    contract (the agreement of purchase and sale for the farm) and their duties and
    obligations to each other flowed from that contract.

[37]

In
    this regard, the appellant notes that the agreement of purchase and sale for
    the farm contained a specific warranty indicating that the water system for the
    farm had operated satisfactorily during the appellants occupancy. The
    agreement also included as a schedule the most recent water report, which was completed
    in 1993.

[38]

According
    to the appellant, having bargained for specific terms relating to the water
    system in the agreement of purchase and sale, it was not open to the respondent
    to rely on something not provided for by the terms of the contract and seek a
    remedy in tort.

[39]

Moreover,
    the appellants contractual obligation was to deliver good title. As determined
    by the trial judge, he did so  neither the appellant nor the neighbour is
    entitled to a prescriptive easement or other relief entitling them to shared
    use of the waterline from the farm. Further, even assuming that the shared
    underground waterline was a right or interest in land, the respondent was a
bona
    fide
purchaser for value without notice, and such a purchaser takes title
    free of unregistered claims. According to the appellant, even if he had
    disclosed the existence of his claim to the shared waterline  and that of his
    neighbours  the potential claims were the respondents problem, not his. That
    is because the claims were ultimately found to be invalid and, as such, did not
    diminish the appellants title to the farm.

[40]

Third,
    the appellant argues that there was no basis for the trial judges findings
    that the respondent relied on the statutory declaration or that her reliance
    was reasonable.

[41]

I
    would not accept these arguments. In
Mariani v. Lemstra
(2004), 246
    D.L.R. (4
th
) 489, the plaintiff relied on an allegedly false
    representation contained in a listing agreement, a pre-contractual document
    that was not incorporated into the agreement of purchase and sale. Thus, the
    representation was external to the agreement of purchase and sale  and the
    very type of representation for which an entire agreement clause is intended to
    exclude liability.

[42]

In
    this case, the false statement was contained in a statutory declaration
    delivered as part of closing documents and in response to a requisition from
    the respondent. Such requisitions  and responses to them  were clearly
    contemplated by the agreement of purchase and sale.

[43]

In
    these circumstances, I fail to see how a separate
Hedley Byrne
duty
    of care in tort in relation to the false statement would be excluded by the
    entire agreement clause contained in the agreement of purchase and sale. The
    false statement was contained in a solemn declaration executed under oath and
    was delivered as part of a process contemplated by the agreement of purchase
    and sale.

[44]

Further,
    as found by the trial judge, the appellants duty of care arose specifically
    from the respondents foreseeable and reasonable reliance on the appellants
    representations contained in the statutory declaration. Since the appellants
    duty of care was not precluded by any specific term of the contract,
Central
    Trust

does not exclude concurrent liability in tort.

[45]

Concerning
    the appellants arguments about contractual terms and the fact that his
    contractual obligation was to deliver good title, I note that, as found by the
    trial judge, the statutory declaration was broadly worded. As the trial judge
    said, the statutory declaration was intended to protect the respondent against
    not only existing interests inconsistent with her title to the farm but also
    against the risk that there were persons with a claim against her title.

[46]

The
    appellant was just such a person  and he knew it. He knew he relied on the
    shared waterline originating at the farm and he knew he was claiming the right
    to continue to use it. In the face of this knowledge, he knew or ought to have
    known that his claimed right to use water from the farm property was a claim
    in the said lands or any part thereof  inconsistent with [his] title.

[47]

The
    appellant therefore knew, or, at the very least, ought to have known, that his
    representation to the contrary, in a statutory declaration executed under oath,
    was false. In swearing the statutory declaration in the face of the knowledge,
    and in failing to consult with his long-time lawyer about the shared waterline,
    the appellant failed to exercise the reasonable care that the circumstances
    demanded. The trial judge was entitled to so find.

[48]

I
    am also skeptical of the correctness of the appellants submission that the
    respondent would have had no remedy in contract had the appellant disclosed the
    existence of the ultimately unsuccessful claims to a shared water supply in his
    statutory declaration.

[49]

In
    any event, that is not this case. The appellant acted negligently in delivering
    a false statutory declaration on closing. Moreover, he delivered the false
    statutory declaration in response to a requisition from the respondent  a
    requisition that was contemplated by the agreement of purchase and sale. Even
    if the appellant was entitled, under the terms of the agreement of purchase and
    sale, to delete the statement in the statutory declaration on which the
    appellant now relies, that is not what he did. Rather, he executed a solemn
    declaration under oath when he knew or ought to have known it was false and
    delivered it to the purchaser intending that it be relied upon. In these
    circumstances, I fail to understand the basis for the appellants claim that he
    cannot be held liable in tort.

[50]

Moreover,
    the respondents case is not a claim in contract founded on a gratuitous
    promise; rather, as determined by the trial judge, it is a claim in tort founded
    on negligent misrepresentation.

[51]

Finally,
    I reject the appellants submission that there was no basis for the trial judges
    findings of reasonable reliance by the respondent on the statutory declaration.

[52]

As
    the trial judge noted, the statutory declaration was delivered as part of the
    closing documents for the farm purchase. The respondent testified that she
    relied on the statutory declaration in completing the transaction. In my view,
    there was ample evidence in the record to indicate that the appellant had a
    direct financial interest in the transaction, that he had special knowledge of
    the underground shared water supply, that he made the representation in the
    statutory declaration deliberately, and that he provided the statutory
    declaration in response to a specific request from the respondent. As such, I
    would agree with the trial judge  in the circumstances, the respondents
    reliance on the statutory declaration was reasonable.

C.

the damages issue

[53]

At
    trial, the respondent claimed business interruption losses in excess of
    $300,000 as damages caused by the appellants negligent misrepresentation. The
    trial judge rejected the approach to damages adopted by the respondent and her
    expert and instead performed his own calculation of damages. The appellant
    submits that the trial judge erred in law by effectively acting as his own
    damage expert.

[54]

I
    would not accept this submission. Based on his review of the evidence, the
    trial judge calculated the respondents damages arising from the appellants
    misrepresentation by estimating that the respondent lost revenue from the sale
    of five turkey flocks between 2007 and 2009. The trial judge used the appellants
    2006 revenues to calculate the approximate loss of revenue. He arrived at a
    figure for expenses by examining the respondents 2009 to 2011 income
    statements. In addition, after examining the exhibits, the trial judge
    estimated losses of $1000 per year to the respondents processed food
    business.

[55]

In
    my view, the trial judge adopted an entirely reasonable  and perhaps somewhat
    conservative  approach to assessing the respondents damages arising from the
    appellants negligent misrepresentation. So long as there was evidence capable
    of supporting his calculation, which there was, it was open to him to do so:
McLean
    v. Shedden
, 2012 ONCA 860.

D.

DISPOSITION

[56]

Based
    on the foregoing reasons, the appeal is dismissed with costs to the respondent
    fixed at $22,000 inclusive of disbursements and applicable taxes.

Released:

OCT 14 2014                                   Janet
    Simmons J.A.

JS                                                   I
    agree J.C. MacPherson J.A.

I
    agree E.E. Gillese J.A.

[1]
The appellant drilled his own well on the adjacent property in the
    fall of 2007. Shortly before trial, he consented to the declaration that he was
    not entitled to a prescriptive easement.

[2]
Section (19)(1.1) addresses the situation where the notice of
    appeal was filed prior to October 1, 2007. The notice of appeal in this case is
    dated June 7, 2013.

[3]

Sepe v. Monteleone
(2006), 78 O.R. (3d) 676 (C.A.),
    at paras. 7-8.

[4]

Sepe
, at para. 9.

[5]

Mohammed (Personal Representative of) v. Tucci
,
2009
    ONCA 554, 97 O.R. (3d) 145,
at paras. 16 and 23.

[6]

In

Mariani
    v. Lemstra
(2004), 246 D.L.R. (4th) 489, at para. 20,
this court observed:

The relationship
    between the [Vendor] and [Purchaser] was governed by a standard agreement of
    purchase and sale for real estate that explicitly excluded reliance upon any
    representations. Consequently, it is difficult to see why a separate
Hedley Byrne
duty of care in tort would not be excluded as well.


COURT OF APPEAL FOR ONTARIO

CITATION: Hoffman v. Subject (Subject Woodwork & Trim),
    2014 ONCA 750

DATE: 20141028

DOCKET: C58122

Juriansz, Rouleau and van Rensburg JJ.A.

BETWEEN

Cora Patricia Hoffman

Plaintiff/Appellant

and

Ryan
    Subject, carrying on business as

Subject Woodwork &
    Trim

Defendant/Respondent

Jarvis K. Postnikoff, for the appellant

Ryan Subject, acting in person

Heard: October 24, 2014

On appeal from the judgment of Justice Dale Parayeski of
    the Superior Court of Justice, dated December 6, 2013, with reasons reported 2013
    ONSC 7476.

APPEAL BOOK ENDORSEMENT

[1]

This appeal is quashed as s. 19(1.2)(a) applies and this court is
    without jurisdiction.


COURT OF APPEAL FOR ONTARIO

CITATION: Holley v. Northern Trust Company, Canada, 2014 ONCA
    719

DATE: 20141021

DOCKET: C58493

Strathy C.J.O., Rouleau and Hourigan JJ.A.

BETWEEN

Jennifer Holley

Appellant (Plaintiff)

and

The
    Northern Trust Company, Canada

and the Royal Trust
    Company

Respondents (Defendants)

Proceeding under the
Class
    Proceedings Act, 1992

Peter R. Jervis, Joel P. Rochon and Remissa Hirji, for
    the appellant

Jeff Galway and Nicole Henderson, for the respondent Northern
    Trust Company, Canada

Christine Lonsdale and Richard Lizius, for the respondent
    Royal Trust Company

Heard: October 6, 2014

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated February 11, 2014, with reasons reported at
    2014 ONSC 889.

By the Court:

[1]

This is an appeal from a Rule 21 motion that dismissed the appellants
    claim in the context of a proposed class action. The motion judge found that a
    court-approved settlement, granted in the course of Nortels
Companies'
    Creditors Arrangement Act
, R.S.C. 1985, c. C-36 (CCAA) proceedings, had
    released the respondents from all claims based on constructive fraud, and that
    the pleading did not disclose a cause of action for what he characterized as
    common law fraud. The motion judge also concluded that, in any event, any claims
    were statute-barred under the
Limitations Act, 2002
, S.O. 2002, c. 24,
    Sch. B.

[2]

The appellant raises several grounds of appeal. Among these grounds is
    her submission that the motion judge erred in finding that her claims were statute-barred.

[3]

For the reasons that follow, we would dismiss the appeal. On the facts found
    by the motion judge, the limitation period began to run at the latest in March
    of 2010, and the appellant was well beyond the two-year limitation when she
    filed her notice of action on August 27, 2012.
[1]

[4]

On February 18, 2010, the Monitor in Nortels CCAA proceedings issued
    its 39
th
report. This report provided the appellant with all of the
    material facts she required to pursue her proposed cause of action against the
    respondents for their alleged mishandling of trust funds.

[5]

Specifically, the Monitors 39
th
report disclosed that the Health
    and Welfare Trust (HWT) administered by the respondents was seriously underfunded
    and that some of the trust assets consisted of an amount owed to the trust by
    Nortel (the Due).

[6]

In March of 2010, a motion was brought in the Nortel CCAA proceeding to
    approve a settlement and release of claims against the trustees and others related
    to the management of the HWT. The appellant filed materials and appeared on the
    motion to oppose the granting of a release to Nortel, the respondents, and
    others, from potential claims respecting the HWT, including claims related to
    the administration and underfunding of the HWT.

[7]

In the materials filed by the appellant in that proceeding, it is
    apparent that she understood that she had a potential cause of action against
    the respondents for their administration of the HWT. The appellant had received
    a copy of the Monitors 39
th
report and had retained an expert to
    review it. From this review, the appellant considered that the respondents had
    breached their trust obligations and that she had a viable claim against them.
    In her factum opposing the settlement order, she argued that a release of
    potential claims against the HWT trustees should not be granted because the
    proposed release would have barred any breach of trust claim she might advance.

[8]

Specifically, in the factum she filed for the March 2010 motion, the
    appellant asserted that the information disclosed in the Monitors 39
th
report established that:

1.

the HWT had been massively depleted;

2.

the $37.1 million Due shown as a trust asset was an amount owing from
    Nortel;

3.

the Due was likely created by Nortel borrowing money from the HWT to
    fund pay-as-incurred beneficiaries of the trust (the pay-as-incurred
    beneficiaries were paid their medical and dental plan claims by the HWT on an
    ongoing basis, and Nortel would, from time to time, reimburse the HWT for those
    payments);

4.

the Due would be compromised during the Nortel CCAA process;

5.

the HWT was underfunded by more than of $100 million; and

6.

the information disclosed in the Monitors 39
th
report
    evidenced a clear breach of trust during the period that the respondents were
    responsible for the administration of the trust.

[9]

It is apparent, therefore, that as of March 2010, the appellant
    considered litigation to be an appropriate means to seek a remedy for the loss
    suffered as a result of the underfunding of the HWT and the respondents having
    allowed Nortel to fund the claims of pay-as-incurred beneficiaries out of HWT
    funds, causing the Due from Nortel to increase substantially.

[10]

In
    this court, the appellant argues that it was only when the Monitors 51
st
report was released on August 27, 2010, that she acquired the information needed
    to make a claim. This is precisely two years before she issued her notice of
    action on August 27, 2012. The appellant relies on the fact that the Monitors 51
st
report disclosed, for the first time, that the significant increase in the size
    of the Due as compared to the previous years was a result of Nortel deciding to
    take a contribution holiday. It was based on this new information that the
    appellant claims she first became aware that the respondents had allowed
    improper payments to be made out of the HWT.

[11]

We
    would not give effect to this submission. In our view, the appellant was
    clearly aware of the legal basis for her claim against the respondents as a
    result of the Monitors 39
th
report. Based on the materials she
    submitted in reaction to this report, the appellant believed that she had
    suffered a loss, believed that this loss occurred under one or more of the
    trustee(s) watch, and her expert attributed the cause this loss to misconduct
    by the HWT trustees in allowing Nortel to underfund or improperly withdraw
    funds from the HWT. Her factum filed at the March 2010 hearing demonstrated
    that she believed litigation was the appropriate remedy. All of the
    requirements of the
Limitations Act, 2002
, s. 5(1) were satisfied. The
    information contained in the Monitors 51
st
report was not necessary
    to discover the proposed cause of action. It simply provided additional detail
    as to the mechanism of the underfunding.

[12]

Based
    on the information in the Monitors 39
th
report, the appellants
    expert attributed the increase in the Due to the trustees having made a loan to
    Nortel so that Nortel could pay the pay-as-incurred beneficiaries. The Monitors
    51
st
report revealed that the increase in the Due was the result of
    Nortel taking a one-year contribution holiday in 2005-2006, during which
    Nortel did not reimburse the HWT for the amounts paid directly out of the HWT to
    the pay-as-incurred beneficiaries.

[13]

Thus,
    the information in the Monitors 51
st
report did not provide the
    basis for a new or different claim. The claim alleged by the appellant in the
    March 2010 proceedings was a claim for breach of trust against the trustees for
    allowing Nortel to underfund or withdraw assets from the HWT. The appellants
    understanding of the precise mechanism and amount of underfunding may have
    changed as a result of the Monitors 51
st
report, but the nature of
    the claim remained the same.

[14]

As
    a result, we agree with the motion judges conclusion that the appellant knew
    the factual basis for her constructive fraud and fraud claim against the
    [respondents] and it is plain and obvious that both her claim for
    constructive fraud and also her claim for common law fraud, if any, are
    statute-barred.

[15]

In
    view of our conclusion on this point, we not need deal with the merits of the other
    grounds raised by the appellant. The appeal is dismissed.

[16]

If
    the parties are unable to agree on costs, the respondents are to provide
    written submissions, not to exceed five pages (excluding the costs outline),
    within five days of the release of this decision. The appellant is to provide
    her written response, not exceeding five pages (again, excluding the costs
    outline), within five days thereafter.

Released: GS OCT 21, 2014

G.R.
    Strathy C.J.O.

Paul
    Rouleau J.A.

C.W.
    Hourigan J.A.

[1]
The motion judge transposes several dates by two years, such as referring to
    events which took place in 2010 as taking place in 2008. These reasons refer to
    the correct dates.


COURT OF APPEAL FOR ONTARIO

CITATION: HSBC Bank Canada v. Lechcier-Kimel, 2014 ONCA 721

DATE: 20141022

DOCKET: C58531

Strathy C.J.O., Rouleau and Hourigan JJ.A.

BETWEEN

HSBC Bank Canada

Applicant

and

Mahvash Lechcier-Kimel

Respondent

No one appearing for the applicant

No one appearing for the respondent

Jonathan H. Wigley, for the court-appointed receiver, Zeifman
    Partners Inc.

Michael G. McQuade, for the objector, Dr. Morris
    Goldfinger

Heard:  October 10, 2014

On appeal from the order of Justice David M. Brown of the
    Superior Court of Justice, dated March 17, 2014.

By the Court:

[1]

Zeifman Partners Inc., as court-appointed receiver of the respondent, Mahvash
    Lechcier-Kimel, brought a motion for the approval of its fees and those of its
    counsel. Dr. Morris Goldfinger, a creditor of the respondent, contested that motion.

[2]

The motion judge approved most of the receivers fees, but denied
    $30,000 in fees for the receiver and $20,000 in legal costs for its counsel. The
    motion judge held that these amounts were incurred by the receiver as part of an
    ill-considered motion brought by the receiver, and thus were not reasonable
    expenses for which the receiver could claim reimbursement.

[3]

The receiver appeals the disallowance by the motion judge, arguing that
    its fees were fair and reasonable in the circumstances.

FACTS

[4]

Ms. Lechcier-Kimel is an insolvent person whose major asset was a home
    located in Toronto (the Property). HSBC Bank Canada (HSBC) held the first
    mortgage on the Property in the amount of approximately $9 million. Dr.  Goldfinger
    held the second mortgage in the amount of approximately $5 million.

[5]

Between 2010 and 2013, the Property was listed for sale, starting at a
    listing price of over $23 million and eventually dropping to approximately $14
    million.

[6]

On April 18, 2013, HSBC successfully applied to the Ontario Superior
    Court, Commercial List, for the appointment of Zeifman Partners Inc. as
    receiver of the Property, as well as the associated personal property of Ms. Lechcier-Kimel,
    under s. 243 of the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B.3,
    and s. 101 of the
Courts of Justice Act
, R.S.O. 1990, c. C-43.

[7]

The receiver brought a motion for court approval of an auction process to
    sell the Property. The motion judge approved the auction process and the suggested
    reserve price in an order dated October 2, 2013. The auction was scheduled to
    take place on November 26, 2013, with a reserve price of $10 million.

[8]

On November 21, 2013, the receiver brought a motion seeking an order
    cancelling the auction and permitting the sale of the Property for $12 million
    to buyers who wished to avoid the auction. The motion judge declined to grant
    the order, finding that the acceptance of the offer would damage the integrity
    of the sale process. The motion judge ordered that there be no costs of the
    motion.

[9]

The auction was held and the Property was sold for an effective price of
    $13 million to the same buyers who had previously offered $12 million.

DECISION OF THE MOTION JUDGE

[10]

The
    receiver brought a motion seeking approval of its fees and its legal expenses,
    including fees incurred in negotiating the sale that was not approved by the
    court and in bringing the unsuccessful motion to abandon the auction process.

[11]

The
    motion judge acknowledged that receivers are entitled to fair and reasonable
    fees for carrying out their work, but criticized the receiver for seeking to
    abort the auction process almost immediately after seeking court approval on
    the basis that an auction represented the best realization strategy for the Property.
    He noted that the $12 million offer likely precluded recovery for any creditor
    other than HSBC.

[12]

The
    motion judge also stated that had there been an offer 50 to 60 per cent higher
    than the reserve price, this would have justified abandoning the auction, but
    an offer 20 per cent above the reserve price did not justify a change in the
    sale process. He concluded that the motion should not have been brought, and
    thus, the fees incurred by the receiver and its counsel were unreasonable and should
    be denied.

ANALYSIS

[13]

The
    receiver submits that the motion judge made three palpable and overriding
    errors: (a) failing to consider the general principle that a receivers
    business decisions are to be afforded deference by the court; (b) failing to
    consider the factual context in which the receiver was operating; and (c) overemphasizing
    the integrity of the auction process and failing to give sufficient
    consideration to the need for flexibility.

[14]

Dr.
    Goldfinger submits that the receiver must obtain leave to appeal under s.133 of
    the
Courts of Justice Act
because the order appealed from is a costs
    order.

[15]

It
    is unnecessary to consider the leave to appeal submission advanced by Dr.
    Goldfinger, as we would dismiss the appeal on the merits for the following
    reasons.

[16]

First,
    while courts will show deference regarding the business decisions of receivers,
    the procedure for reviewing a receivers conduct of a receivership is not the
    same as that for reviewing the reasonableness of its fees. Notably, while the
    objecting party bears the burden of showing a receivers business decisions are
    unreasonable, the receiver bears the burden of proving that its fees are fair
    and reasonable. Thus the deference to which the receivers business decisions
    are owed does not insulate its accounts from review to determine if they are
    fair and reasonable:
Re Confectionately Yours Inc.
(2001), 219 D.L.R.
    (4th) 72, at paras. 30-31.

[17]

Second,
    nothing in the motion judges reasons indicates he was not cognizant of, and
    did not take into account, the factual context in which the receiver was
    operating. The motion judge had been involved in the receivership from the
    outset and receiver reports had been filed detailing the activities of the
    receiver. We note, as well, that the motion judge is a seasoned Commercial List
    judge who has considerable experience dealing with court appointed receivers.

[18]

Finally,
    we reject the submission that the motion judge overemphasized the integrity of
    the auction process and failed to give sufficient consideration to the need for
    flexibility. A number of circumstances led the motion judge to conclude that
    safeguarding the integrity of the sale process was paramount, including: the
    receivers previous representations that an auction would be the best method to
    sell the Property; the receivers deviation from the approved sale format
    almost immediately after the court order was issued and undertaking significant
    work without seeking court approval; the proposed sale price which was only 20 per
    cent above the reserve price; and the receivers pursuit of a course of action
    that would likely only benefit HSBC.

DISPOSITION

[19]

For
    the foregoing reasons, the appeal is dismissed. Dr. Goldfinger, as the
    successful party, is entitled to his costs of the appeal which we fix, on a
    partial indemnity basis, at $7,000, inclusive of applicable taxes and
    disbursements. Those costs are to be paid by the receiver, Zeifman Partners
    Inc., and not from the estate of Ms. Lechcier-Kimel. The receiver is also not permitted
    to claim any of its costs of the appeal from the estate of Ms. Lechcier-Kimel.

Released: October 22, 2014 GS

G.
    R. Strathy C.J.O.

Paul
    Rouleau J.A.

C.
    William Hourigan J.A.