COURT OF APPEAL FOR ONTARIO

CITATION:  Canada (Attorney General) v. Lalonde, 2016 ONCA
    923

DATE: 20161208

DOCKET: C61456

Doherty, Blair and Epstein JJ.A.

BETWEEN

Attorney General of Canada

Appellant

and

Rodney Lalonde

Respondent

Elizabeth Kikuchi, for the appellant

Brian A. Callender, for the respondent

Heard:  November 3, 2016

On appeal from the order of Justice Robert F. Scott of
    the Superior Court of Justice, dated November 26, 2015, with reasons reported
    at 2015 ONSC 6937.

Doherty J.A.:

I

overview

[1]

The respondent, Rodney Lalonde, pled guilty to and was convicted of one
    count of conspiracy to traffic in cocaine and one count of conspiracy to
    traffic in marihuana.  Both offences were alleged to have occurred between
    March 20, 2011 and July 7, 2011.  On November 5, 2013, Mr. Lalonde received
    five-year concurrent sentences on each charge.

[2]

Mr. Lalonde met the statutory eligibility criteria for accelerated
    parole under the
Corrections and Conditional Release Act
, S.C. 1992,
    c. 20 (
CCRA
). Under the
CCRAs
accelerated parole provisions,
    Mr. Lalonde would have been eligible for day parole in September 2014, 10
    months after he was sentenced.  Under the normal parole provisions, Mr. Lalonde
    was not eligible for day parole until January 2015 after serving 14 months of
    his sentence.

[3]

The Corrections authorities took the position that the
Abolition of
    Early Parole Act
, S.C. 2011, c. 11 (
AEPA
), enacted on March 28,
    2011, had repealed the provisions providing for accelerated parole.  Section 10
    of the
AEPA
made the repeal of the accelerated parole provisions retrospective
    and eliminated eligibility for accelerated parole for all offenders serving penitentiary
    sentences on or after March 28, 2011.  Mr. Lalonde began his five-year sentence
    in November 2013.

[4]

Section 10 clearly rendered Mr. Lalonde ineligible for accelerated
    parole.  However, in March 2014, in
Canada (Attorney General) v. Whaling
,
    2014 SCC 20, [2014] 1 S.C.R. 392, the Supreme Court struck down s. 10 as
    contrary to s. 11(h) of the
Charter
insofar as it purported to apply
    to persons who had been sentenced before the repeal of the accelerated parole
    provisions.

[5]

Whaling
did not have direct application to Mr. Lalonde as he
    had been sentenced after the repeal.  However, in 2015, this court held that the
    abolition of eligibility for accelerated parole amounted to an increase in
    punishment, making the application of the
AEPA

to persons who committed offences before
    the repeal of accelerated parole on March 28, 2011 contrary to s. 11(i) of the
Charter
:
Canada (Attorney General) v. Lewis
, 2015 ONCA 379, 126 O.R. (3d) 289,
    leave to appeal refused, [2015] S.C.C.A. No. 325; see also
Liang v. Canada
    (Attorney General)
, 2014 BCCA 190, 311 C.C.C. (3d) 159, leave to appeal refused,
    [2014] S.C.C.A. No. 298.

[6]

The holdings in
Liang
and
Lewis
created administrative
    difficulties for the Correctional authorities. Under the
CCRA
, parole
    eligibility is determined by reference to the date of sentence and not the date
    of the offence.  After
Lewis
and
Liang
, the Correctional
    authorities had to decide early parole eligibility based on the date of the
    offence for which the person was sentenced, rather than the date of sentence.
    Unlike the date of sentence, which can be easily determined by reference to the
    warrant of committal, there can be uncertainty as to the date on which an
    offence was committed.  Some indictments allege offences that occur between
    dates that span weeks, months or even years.  A transcript of the trial
    proceedings may not assist in fixing the date of the offence, as often the date
    of the offence is irrelevant for trial purposes as long as the offence occurred
    within the timeframe of the indictment.

[7]

This case provides a good example of a situation in which the date on
    which an offence was committed may be unclear.  The indictment alleging the two
    conspiracy offences against Mr. Lalonde referred to a time period that
    straddled March 28, 2011, the date on which the accelerated parole provisions
    were repealed.  According to the affidavit material filed by the Attorney
    General of Canada, sentence managers had been instructed to treat persons whose
    offences were committed prior to March 28, 2011 and continued after that date as
    ineligible for accelerated parole.  Based on that policy, Mr. Lalonde was not
    eligible for early parole.

[8]

Mr. Lalonde moved for a declaration that he was eligible for accelerated
    parole.  He also brought an application for habeas corpus with certiorari in
    aid.  The application judge dealt only with the request for declaratory
    relief.  He held that he had jurisdiction to grant that relief (paras. 4-6),
    and that as the conspiracies were committed before the repeal of the
    accelerated parole provisions on March 28, 2011, Mr. Lalonde was eligible for
    accelerated parole.  The application judge made a declaration to that effect.

[9]

The Attorney General of Canada appeals from that order.
On the appeal, the Attorney General accepts that the application
    judge had the jurisdiction to grant the declaratory relief that he ordered.
    The parties also agree that the appeal is moot in that Mr. Lalonde has been
    released on day parole.  The parties accept, however, that this is an
    appropriate case for the court to exercise its discretion in favour of hearing
    the moot appeal.  As pointed out in the material filed by the Attorney General,
    the determination of the applicability of the accelerated parole provisions,
    despite their repeal, continues to have relevance for about 200 offenders
    serving sentences in penitentiaries across Canada.  The parties agree that by
    addressing the merits of the appeal, the court can provide guidance to the
    Correctional authorities charged with the responsibility of determining parole
    eligibility dates.

II

when is a crime committed for the
    purposes of section 11(i) of the
charter
?

[10]

Section
    11(i) of the
Charter
provides:

11. Any person charged with an offence has the right

(i) if found guilty of the offence and if the punishment for
    the offence has been varied between the time of commission and the time of
    sentencing, to the benefit of the lesser punishment.

[11]

Section
    11(i) of the
Charter
, like s. 11(g) and s. 11(h), reflects a
    constitutional aversion to retrospective criminal legislation.  Retrospective
    criminal laws are viewed as unfair and undermining the rule of law because they
    effectively change the rules in the middle of the game to the detriment of
    the individual affected by those rules.  Fairness and respect for the rule of
    law require that a persons maximum exposure to punishment for a criminal act
    be fixed as of the time of commission of the criminal act for which he or she
    is to be punished:  see
R. v. K.R.J.
, 2016 SCC 31, 337 C.C.C. (3d)
    285, at paras. 20-27.

[12]

The
    abolition of eligibility for accelerated parole increased the punishment
    imposed on Mr. Lalonde:
Lewis
, at paras. 20-24.  Consequently, if Mr.
    Lalonde committed his crimes before the punishment for those crimes was varied
    on March 28, 2011 by the elimination of eligibility for accelerated parole, Mr.
    Lalonde was constitutionally entitled to the benefit of the lesser
    punishment, that is the parole scheme that included eligibility to be
    considered for early parole.

[13]

Counsel
    for the Attorney General submits that while the crime of conspiracy is committed
    when two or more persons enter into an agreement to commit a crime, intending
    to carry out that agreement, the crime continues until the criminal object is
    achieved or the agreement is frustrated, usually by the arrest of the
    co-conspirators:  see
R. v. J.F.
, 2013 SCC 12, [2013] 1 S.C.R. 565, at
    paras. 21, 44, 58; and
R. v. Bell
, [1983] 2 S.C.R. 471, at p. 488.  Counsel
    submits that as long as a conspiracy continues, it is not completed and should
    not be treated as committed for the purposes of s. 11(i).  On that approach,
    Mr. Lalonde continued to commit the offence of conspiracy beyond March 28, 2011
    to July 2011 when he and his fellow conspirators were arrested.  If the
    Attorney Generals interpretation is correct, there is no variation in the
    penalty for the offence between the time of commission and the time of
    sentencing.  Section 11(i) would have no application.

[14]

Counsel
    for Mr. Lalonde does not take issue with counsel for the Attorney Generals description
    of the crime of conspiracy as a continuing offence.  He submits, however, that
    conspiracy, like all crimes, is committed when the requisite
actus reus
and
mens rea
coexist.  Counsel submits that the Attorney Generals submissions
    fail to distinguish between the commission of a continuing offence and the completion
    or termination of that offence.  Counsel argues that on a plain reading, s.
    11(i) of the
Charter
is concerned with the commission and not the termination
    or completion of an offence.  Counsel argues that on the facts of this case,
    Mr. Lalonde entered into conspiracies to traffic in cocaine and marihuana
    before March 28, 2011.  He had therefore committed his crimes before that date even
    though he and his co-conspirators carried on efforts to achieve the objects of
    the conspiracies after March 28, 2011.

[15]

The
    distinction drawn by counsel for Mr. Lalonde between the point in time at which
    a crime is committed and the point at which that crime is completed or terminated
    is a valid one when the offence is a continuing offence.  The commission of a
    crime connotes culpability for that crime.  An offender is culpable in the
    sense that he or she is liable to be convicted for the offence when he or she
    has performed the required
actus reus
with the required
mens rea
.
    Criminal culpability exists from that point forward whether the offence is a
    continuing one or not:  see
Bell
, at p. 488; and
Brodie v. The King
,
    [1936] S.C.R. 188, at p. 198.  Events subsequent to the point in time at which
    the
actus reus
and
mens rea
coexist cannot remove or negative
    culpability, although they may mitigate or aggravate punishment:  see
R. v.
    Kosh
, [1965] 1 C.C.C. 230, 44 C.R. 185, at p. 235 (Sask. C.A.); and
R.
    v. Roberts
, [1981] B.C.J. No. 1185, at para. 7 (C.A.).  For example, a
    person who enters into a criminal conspiracy, intending to carry it out, but
    abandons the conspiracy before the object is achieved or the agreement is
    terminated, remains criminally liable for the crime of conspiracy.  As
    explained by Taschereau J., in
R. v. OBrien
, [1954] S.C.R. 666, at p.
    669:

If a person, with one or several others, agrees to commit an
    unlawful act, and later, after having had the intention to carry it through,
    refuses to put the plan into effect, that person is nevertheless guilty,
    because all the ingredients of conspiracy can be found in the accuseds
    conduct.

[16]

If,
    as is clear on the authorities, culpability for criminal conspiracy attaches when
    a person enters into an agreement with one or more other persons to commit a
    criminal offence, intending to achieve that criminal object, it is illogical to
    say that the conspiracy is not committed until the unlawful object is achieved
    or the conspiracy terminated.  The continuing nature of the offence of
    conspiracy has significance for various issues.  However, the continuing nature
    of the crime has no impact on the determination of the point in time at which liability
    for the commission of the offence attaches.  If a person engages in the
    required
actus reus
with the specified
mens rea
,
that person commits the offence whether
    or not the offence is a continuing one.

[17]

Section
    11(i) fixes the time of commission of the offence as one of the two relevant
    points in time to be considered when applying the section.  I see nothing in
    the language of s. 11(i), or the purpose underlying the section, justifying a
    departure from the plain meaning of the phrase, the time of commission of the
    crime.  A crime is committed when culpability attaches.

[18]

Counsels
    research produced several decisions, most of them trial decisions, in which an
    indictment alleged an offence that straddled the date on which legislation came
    into force increasing or decreasing the relevant penalties.  None of the cases
    involved the
AEPA

or the
    crime of conspiracy.  In each case, the offender argued that s. 11(i) of the
    Charter entitled him or her to the lesser penalty.

[19]

Most
    of the trial decisions referred to by counsel support Mr. Lalondes position,
    although none contain any analysis of s. 11(i):  see

R. v. A.B.
, 2008 QCCQ 3538, at para. 56 (Crim.
    & Pen. Div.);
R. v. Handy
, 2012 CarswellOnt 13427, at paras.
    224-29 (Sup. Ct.);

R. v.
    Lewis
, 2014 ONSC 4188, at para. 14; and
R. v. Morier
, 2014 QCCQ
    1959, at paras. 15-17 (Crim. & Pen. Div.).

[20]

Counsel
    referred to two appellate decisions.  Both support the Attorney Generals position:
R. v. Pouliot
, 2006 QCCA 643, at para. 4; and
R. v. V.I.C.
, 2005
    SKCA 95, 269 Sask. R. 131, at para. 11.

[21]

In
Pouliot
, the accused was charged with keeping a
    common bawdy house over a lengthy period of time.  During that timeframe, the
    penalty for the offence was amended to increase the offenders exposure to
    forfeiture of property used in the offence.  The accused argued that he should
    be sentenced under the regime that existed at the commencement of the timeframe
    alleged in the indictment.  The Quebec Court of Appeal rejected that argument.  The
    court reasoned, at para. 4, that keeping a common bawdy house is a continuing
    offence, and that the accused continued to commit the offence well after the
    penalty increased.  The accused was thus not entitled to the benefit of the old
    property forfeiture regime.

[22]

In
V.I.C
.
, the accused was charged with a single
    count of sexual assault covering a 14-month timeframe.  The Crown alleged that
    he had assaulted his young cousin repeatedly during that timeframe.  During the
    timeframe covered by the indictment, the statutory scheme was changed to make
    the accused liable for a more serious penalty.  The accused argued that he should
    be sentenced under the law as it existed at the start of the timeframe set out
    in the indictment.  The Saskatchewan Court of Appeal disagreed, pointing out
    that acts that amounted to sexual assaults occurred before and after the
    enactment of the provision increasing the potential penalty.  The court held,
    at para. 11:

This was not a case of application of the law to an offence
    which occurred before the legislation came into effect, but of application of
    the law to an offence which was not complete, and therefore did not occur,
    until a date on which the legislation was in effect.

[23]

With
    respect, I cannot agree with
Pouliot
and
V.I.C.
While I
    accept that the offences in both cases continued beyond the enactment of the
    relevant legislation, I do not agree that the continuation of the offences
    meant that they were not committed before the enactment of the relevant
    legislation.  The accused in
Pouliot
was liable for the offence of
    keeping a common bawdy house as of the date on which the increased exposure to
    forfeiture came into effect.  Had he been charged on that date, he would have
    been convicted.

[24]

Similarly,
    the accused in
V.I.C.
committed acts of sexual assault before the
    enactment of the increased penalty.  He was culpable on the single count indictment
    preferred by the Crown from the moment he committed the earliest of the sexual
    assaults capable of supporting the charge as framed in the indictment.  Had the
    Crown proved only that one assault, the accused would have been convicted on
    the indictment as charged.  I do not agree that because the Crown chose to lay
    a single charge encompassing several discrete acts of sexual assault that
    occurred over several months, the offence for which the accused was convicted
    should be viewed as not complete, or as if it did not occur until the last
    of the sexual acts occurred.  The number of discrete acts capable of supporting
    liability for the offence as charged does not alter the fact that the
actus
    reus
and
mens rea
required to support a conviction coexisted as
    of the first act of sexual assault.

[25]

Having
    reviewed the cases, I remain satisfied that the words of s. 11(i) should be
    given their plain meaning.  Mr. Lalonde committed his crimes at the point in
    time when he agreed with one or more persons to traffic in cocaine or
    marihuana, intending to do so.

III

when did mr. lalonde commit his crimes?

[26]

As indicated above, the language in the indictment brought against Mr.
    Lalonde alleges dates that straddle March 28, 2011.  To determine whether Mr.
    Lalonde was eligible for early parole, the Correctional authorities had to
    determine whether he committed the conspiracies before that date.  The language
    of the indictment, standing alone, does not answer that question.

[27]

Whether
    Mr. Lalonde entered into the alleged conspiracies before March 28, 2011 was not
    in issue at the trial proceedings and, not surprisingly, was not addressed by
    trial counsel or the trial judge.  The facts relied on by the Crown to support
    Mr. Lalondes guilty pleas were offered to establish his guilt and not to
    establish the point in time at which he became culpable for the conspiracies.  Those
    facts do, however, assist in determining whether Mr. Lalonde entered into the
    conspiracies before March 28, 2011.

[28]

The
    facts relied on by the Crown to support the charge of conspiracy to traffic in
    cocaine included references to many acts allegedly done in furtherance of the conspiracy
    by Mr. Lalonde and others before March 28, 2011.  An act can only be done in furtherance
    of a conspiracy if the conspiracy exists when the act is performed.  On the
    facts put forward by the Crown, Mr. Lalonde had entered into a conspiracy to
    traffic in cocaine, intending to traffic in cocaine, well before March 28,
    2011.  On those facts, Mr. Lalonde committed the offence of conspiracy to
    traffic in cocaine before the
AEPA
repealed eligibility for early
    parole.  He was entitled to be considered for early parole.

[29]

The
    facts the Crown relied on in support of the plea on the charge of conspiracy to
    traffic in marihuana are less detailed than the facts relating to the cocaine
    conspiracy.  None of the acts said to be in furtherance of the conspiracy to
    traffic in marihuana occurred before March 28, 2011.  Nothing said by the Crown,
    however, suggests that the agreement to traffic in marihuana only came into
    existence after that date.  Having regard to the terms of the indictment, and
    the entirety of the facts relied on by the Crown as they relate to both
    conspiracies, it is a fair inference that Mr. Lalonde was a member of both
    conspiracies as of March 28, 2011 and was therefore entitled to be considered
    for early parole in respect of both offences.

[30]

In
    any event, it does not ultimately matter, for the purposes of determining Mr.
    Lalondes eligibility to be considered for early parole, whether the offence of
    conspiracy to traffic in marihuana was committed before or after March 28,
    2011.  Mr. Lalonde received two concurrent five-year sentences.  Pursuant to s.
    139(1) and s. 120.1(1)(b) of the
CCRA
, Mr. Lalonde was deemed to be serving
    a single five-year sentence with a single parole eligibility date.  If, as I
    would hold, Mr. Lalonde was eligible to be considered for early parole in
    relation to the conspiracy to traffic in cocaine conviction because the crime
    was committed before the repeal of the early parole provisions, his conviction
    at the same time for an offence committed after that date cannot, in my view,
    take away his constitutional right to be considered for early parole in respect
    of conspiracy to traffic in cocaine conviction.  A change in the rules
    governing Mr. Lalondes parole status as those rules relate to the conviction
    for conspiracy to traffic in cocaine after the date on which he committed that
    offence remains a violation of s. 11(i), even if a concurrent sentence imposed for
    an offence committed after the repeal of the early parole provisions would not
    attract the protection of s. 11(i).

IV

two additional comments

[31]

The
    reasons set out above are enough to dispose of the appeal in favour of Mr.
    Lalonde.  I will, however, in the hope of providing the Correctional
    authorities with some additional guidance, address two matters referred to in
    the affidavit of the senior Correctional Services manager filed on the
    application by the Attorney General of Canada.

[32]

In
    the affidavit, the affiant states:

[W]here offenders who receive one sentence for numerous
    offences which were committed both before and after the repeal of [accelerated
    parole], [those offenders] were not considered to be entitled to [accelerated
    parole].

[33]

The position taken by the Correctional authorities is
    premised on the provisions of the
CCRA
which treat prisoners as serving a single
sentence with a
    single parole eligibility date even though the prisoners were convicted of
    various offences at different times and received discrete sentences for each of
    those offences.  The sentences are effectively amalgamated into a single
    sentence with a single parole eligibility date:  see
CCRA
s. 120.1(2)(3), s. 120.2, s. 139(1)
.
    For example, if an offender is convicted and sentenced to a two-year sentence
    in the penitentiary and six months later receives an additional two years
    consecutive for a different offence, the Correctional authorities treat the
    person as serving a single four-year sentence, running from the date of the
    first sentence.  They also fix a single parole eligibility date using the
    somewhat complicated provisions in s. 120.1 of the
CCRA
.

[34]

Essentially, for the
    reasons set out above in para. 30, I do not think that the Correctional
    authorities can ignore the date on which the offences occurred in determining
    eligibility for early parole.  If the offender was entitled to apply for early
    parole as of the date of the offence, s. 11(i) constitutionally guarantees that
    eligibility, regardless of whether the offender is subsequently convicted of
    other offences which post-date the repeal of the early parole provisions.  If,
    in the example set out above, the first offence for which the offender received
    a two-year sentence was committed before March 28, 2011, the offender was
    eligible to be considered for early parole.  His subsequent conviction and
    two-year sentence for an offence committed after March 28, 2011 would not
    eliminate his eligibility for early parole on the first conviction, even though
    the Correctional authorities treat the sentences as one for the purposes of
    calculating the total sentence being served and the parole eligibility date.

[35]

In
    holding that the offender would be entitled to the benefit of the early parole
    provisions despite the commission of offences after the repeal of those
    provisions, I do not mean to suggest that the commission of subsequent offences
    would not have relevance to the application of the early parole provisions.  In
    fact, depending on the nature and timing of the subsequent offences, the
    offender may no longer meet the criteria in the early parole provisions to even
    be considered for early parole.
[1]
The offender nonetheless would remain eligible for early parole in the sense
    that those provisions would apply to the offender because he was serving a
    sentence imposed, at least in part, in respect of an offence committed before
    the repeal of the early parole provisions.

[36]

My
    second observation arises from the same affidavit.  The affiant indicates that
    sentence managers are instructed that all offenders whose offence dates
    straddle March 28, 2011 are not considered eligible for accelerated parole.
    While I can appreciate the value of a bright-line rule for administrative
    purposes, the offenders constitutional rights under s. 11(i) cannot be negated
    by a default rule that has no connection to the facts of the individual case.

[37]

The
    Correctional authorities charged with determining eligibility for early parole
    must do their best on the materials available to them to determine if an
    offence was committed before March 28, 2011.  As I understand it, sentence managers
    usually have the indictment, reasons for conviction (assuming it was not a jury
    trial), reasons for sentence, and the warrant of committal.  If a sentence manager
    is satisfied, based on that material, that the offence was committed, as
    defined in these reasons, before March 28, 2011, the sentence manager will treat
    the offender as eligible to be considered for accelerated parole, even if the
    offence continued after that date.

[38]

If
    a sentence manager is unable, on the material available to him or her, to
    decide whether the offence was committed before March 28, 2011, it is incumbent
    on the Correctional authorities to put the offender on notice that he or she
    may be eligible to be considered for early parole, depending on when the
    offence was committed, and that the Correctional authorities are unable to make
    that determination on the material available to them.  The offender should be
    given an opportunity, if he or she wishes to do so, to provide further
    information that may assist in determining the date of the offence.

V

conclusion

[39]

I would dismiss the appeal.

Released: DD  DEC 08 2016

Doherty J.A.

I sgree R.A. Blair
    J.A.

I agree Gloria
    Epstein J.A.

[1]

For example, under the early parole provisions, an offender
    who is serving an offence for which he was eligible for early parole and who
    while serving that sentence committed a further offence ceases to be eligible
    for early parole:
CCRA
s. 125(1.1).


COURT OF APPEAL FOR ONTARIO

CITATION: Carter v. Intact Insurance Company, 2016 ONCA 917

DATE: 20161206

DOCKET: C60843

Laskin, Pepall and Brown JJ.A.

BETWEEN

Helene Carter, Edmond Blais and Donald Givogue

Plaintiffs (Appellants)

and

Intact Insurance Company

Defendant (Respondent)

Kevin P. Nearing and Natalia Rodriguez, for the
    appellants

Anthony J. Bedard and Jasmine T. Akbarali, for the respondent

Heard: April 28, 2016

On appeal from the order of Justice Kevin B. Phillips of
    the Superior Court of Justice, dated July 7, 2015, with reasons reported at
    2015 ONSC 4400, 52 C.C.L.I. (5th) 263.

Laskin J.A.
:

A.

Overview

[1]

For 24 years, the appellants owned an income property at the corner of
    MacKay Street and Beechwood Avenue in Ottawa. The property consisted of a mix
    of one, two and three storey buildings, containing 15 residential units and 13
    commercial units. The property was insured by the respondent Intact, from whom
    the appellants purchased replacement cost and building by-law coverage. Their
    insurance policy provided that replacement includes repair, construction or
    reconstruction with new property of like kind and quality.

[2]

In March 2011, a fire caused substantial damage to the appellants
    buildings. The appellants decided to demolish the entire site in order to build
    an eight and a half storey condominium. They sought compensation under the replacement
    cost and building by-law coverages in their insurance policy.

[3]

Intact refused to pay replacement cost on the ground that the proposed
    condominium was not a replacement, because it was not a new property of like
    kind and quality. For a similar reason, Intact also refused to pay for
    building code upgrades. Instead, Intact paid the appellants only the actual
    cash value of the damaged property.

[4]

The appellants began to build their condominium and sued Intact for
    replacement cost and an amount for building code upgrades under their building
    by-law coverage. They then brought a motion under r. 21 of the
Rules of
    Civil Procedure
[1]

to determine the coverage issues. Before the motion judge, they argued that
    they were entitled to replacement cost no matter what they built, because replacement,
    as defined in the policy, did not require that their new property be of like
    kind and quality. Alternatively, they argued that their proposed condominium
    was of like kind and quality.

[5]

The motion judge rejected both arguments. He interpreted the policy to
    mean that replacement cost is only available if the insureds property is of
    like kind and quality. He found as a fact that the proposed condominium was not
    of like kind and quality. Thus, the appellants were entitled only to the actual
    cash value of their damaged property (which Intact has paid). Although the
    by-law coverage issue was before him, the motion judge did not address it in
    his reasons.

[6]

The appellants do not appeal the motion judges factual finding that
    their proposed condominium is not of like kind and quality. They only raise two
    issues on appeal. First, did the motion judge err by holding that the proposed
    condominium was not a replacement entitling the appellants to replacement
    cost? Second, did the motion judge err by failing to hold that the appellants were
    entitled to an amount for building code upgrades?

[7]

I would dismiss the appeal. I agree with the motion judges conclusion
    on the first issue, and though he did not expressly address the second issue,
    his factual findings reasonably supported Intacts position on that issue.

B.

Brief Background

(1)

The amounts in issue

[8]

The parties resolved the amounts in issue by using the appraisal and
    arbitration process under s. 128 of the
Insurance Act
.
[2]
The arbitrator determined the following amounts:

·

actual cash value: $3,900,000;

·

replacement cost: $5,732,136.32; and

·

building code upgrades: $511,379.17

[9]

Intact has paid the appellants the actual cash value. Therefore, the
    appellants total claim in this litigation is $2,343,515.49 ($5,732,136.32
    minus $3,900,000 plus $511,379.17).

[10]

The appellants claim is under the policy limit, which was $7,614,750.

(2)

The insured property and the proposed condominium

[11]

The motion judge found that the appellants proposed condominium was not
    of like kind and quality to the insured property. As the following chart shows,
    that finding was well supported in the record. And, as I have said, it has not
    been appealed.

Quality

Insured Property

Proposed Condominium

Size

51,930 square feet

193,694 square feet

Height

Mix of one, two and three
          storey buildings

Eight and a half stories

Basement area

15,200 square feet

32,000 square feet

Number of residential
          units

15

129

Parking Spaces

42 (above ground)

165 (underground)

Elevators

None

Two

C.

The Issues

(1)

Did
    the motion judge err by holding that the proposed condominium was not a replacement"
    entitling the appellants to replacement cost?

(a)

Positions of the parties

[12]

In support of their overall position that they are entitled to
    replacement cost, the appellants make, in essence, three arguments. First, the
    motion judge erred by holding that his interpretation of the policy was necessary
    to address moral hazard. Second, the motion judge erred by failing to give
    effect to the word includes in the definition of replacement. Third, the
    motion judge wrongly distinguished the decision of the British Columbia Supreme
    Court in
Chemainus Properties Ltd. v. Continental Insurance Co
. (1990)
,
43 C.C.L.I. 146, which
    the appellants say is consistent with their position.

[13]

In response, Intact argues first, that to be entitled to replacement cost,
    the replacement must be of like kind and quality; second, that the motion
    judges interpretation is consistent with other provisions in the policy; and
    third, that the decision in
Chemainus
is distinguishable, or was
    wrongly decided and should not be followed.

(b)

The policy

[14]

The appellants insurance policy with Intact provided, as a starting
    point, for indemnity based on the actual cash value of the lost or damaged
    property. Clause 15 of the policy prescribed the basis of valuation for
    various categories of insured property. At the end of the list, sub-clause (f)
    set out the following basis of valuation for all other insured property under
    this form and for which no more specific conditions have been set out:

the actual cash value at the time and place of loss or damage,
    but not exceeding what it would then cost to repair or replace with material of
    like kind and quality.

[15]

The appellants, however, purchased two extensions of coverage, which are
    at the heart of this appeal. The first extension  the replacement cost
    extension  amended the basis of valuation from actual cash value to replacement
    cost. Under this extension, replacement cost was subject to several conditions,
    of which the most important was condition 1(b): the insured would only be
    entitled to replacement cost when replacement has been effected. In other
    words, the insured must actually replace the insured property to be entitled to
    replacement cost.

1.

The Insurer
    agrees to amend the Basis of Valuation from actual cash value to
    "replacement cost" subject to the following provisions:

(a)

"replacement"
    shall be effected by the Insured with due diligence and dispatch,

(b)

settlement on a
    "replacement cost" basis shall be made only when
    "replacement" has been effected by the Insured and in no event shall
    it exceed the amount actually and necessarily expended for such
    "replacement",

(c)

any other insurance effected
    by or on behalf of the Insured in respect of the insured perils under the Policy
    on the property to which this extension is applicable shall be on the basis of
    "replacement cost",

(d)

failing compliance by the
    Insured with any of the above provisions, settlement shall be made as if this
    extension had not been in effect.

[16]

Clause 4 of the extension defined replacement and replacement cost:

4.

Definitions

(a)

"replacement"
    includes repair, construction or re-construction with new property of like kind
    and quality, and

(b)

"replacement cost"
    means whichever is the least of the cost of replacing, repairing, constructing
    or re-constructing the property on the same site with new property of like kind
    and quality and for like occupancy without deduction for depreciation.

[17]

The interpretation of these definitions, especially the definition of
    replacement gives rise to the main issue on this appeal.

[18]

The second extension provided coverage for building code upgrades. I
    will deal with this extension when I discuss the second issue on the appeal.

(c)

Actual cash value, replacement cost and moral hazard

[19]

The following summary is taken from the decision of the British Columbia
    Court of Appeal in
Brkich & Brkich Enterprises Ltd. v. American Home
    Assurance Co.
(1995)
, 8
    B.C.L.R. (3d) 1, affd [1997] 1 S.C.R. 1149, the decision of Stinson J. in
Willoughby
    v. Pilot Insurance Company
, 2014 ONSC 95, 118 O.R. (3d) 604, and three secondary
    sources cited by the appellants: Leo John Jordan, "What Price Rebuilding?
    A Look at Replacement Cost Policies" (1990) 19 Brief 17; Jerome Trupin
    & Arthur L. Flitner,
Commercial Property Insurance and Risk Management
,
    5th Ed (Pennsylvania: American Institute for the Chartered Property Casualty
    Underwriters, 1998); and Johnny Parker, "Replacement Cost Coverage: A
    Legal Primer" (1999) 34 Wake Forest L. Rev. 295.

[20]

The insurance industry has marketed two types of protection for
    residential and commercial properties: actual cash value coverage and
    replacement cost coverage. Under actual cash value coverage, property is
    insured to the extent of its actual cash value. This coverage recognizes that
    the insurer is entitled to deduct reasonable depreciation from the value of the
    loss. Under replacement cost coverage, the insured is entitled to the full cost
    of repair or replacement without any deduction for depreciation.

[21]

A main objective of property insurance is indemnity, and a policy
    providing for actual cash value coverage is a pure indemnity contract. Actual
    cash value recovery puts insureds in the position they were in before the loss.
    Since most property depreciates over time, actual cash value is equivalent to
    replacement cost less depreciation. So actual cash value recovery prevents
    insureds from profiting or benefiting from their loss.

[22]

But actual cash value recovery poses a problem for insureds who want to
    build a similar structure to replace the insured property that was damaged or
    destroyed. Because of depreciation, these insureds will incur a cash shortfall,
    which they may not be able to afford, and which will thus prevent them from
    reconstructing their damaged structure.

[23]

Replacement cost insurance solves this problem. It goes beyond the
    notion of indemnity. It recognizes that depreciation, or the deterioration of a
    property over time, is an insurable risk. Replacement cost insurance, in
    effect, insures depreciation: the difference between replacement cost and actual
    cash value. So, under replacement cost insurance, if insureds do indeed repair
    or replace their damaged property, they are entitled to recover from their
    insurer the full cost of the repairs or the replacement. They can replace old
    with new. In that sense, even though replacement cost insurance makes
    insureds better off and violates the indemnity principle, it is justifiable,
    because without it, many property owners would be unable to cover the shortfall
    caused by the depreciation of their damaged or destroyed property.

[24]

But, allowing insureds to replace old with new raises a concern for the
    insurance industry. The concern is moral hazard: the possibility that insureds
    will intentionally destroy their property in order to profit from their
    insurance; or the possibility that insureds will be careless about preventing
    insured losses because they will be better off financially after a loss.

[25]

To put a brake on moral hazard, insurers will typically only offer
    replacement cost coverage if insureds actually repair or replace their damaged
    or destroyed property. If they do not, they will receive only the actual cash
    value of their insured property. Insurers also limit replacement cost coverage
    to an amount defined in the insurance policy. These two conditions  insistence
    on actual repair or replacement and limiting replacement cost to a defined
    amount  are found in the appellants policy with Intact.

[26]

With that background, I turn to the interpretation of the definition of
    replacement in the appellants insurance policy.

(d)

The interpretation
    of insurance policies and the standard of
review

[27]

The guiding principles for interpreting insurance policies are well
    established, and were concisely summarized by Rothstein J. in
Progressive
    Homes Ltd. v. Lombard General Insurance Co. of Canada
, 2010 SCC 33, [2010]
    2 S.C.R. 245, at paras. 21-24.

[28]

An insurance policy is a contract, and the primary goal of contract
    interpretation is to give effect to the intention of the parties. If the policy
    provision in question is unambiguous, the court gives effect to the parties
    intention by giving effect to the provisions plain and ordinary meaning. In
    doing so, and as interpretive aids, the court should take into account the
    provisions of the policy as a whole, the surrounding circumstances and the
    commercial atmosphere in which the insurance policy was contracted for, and
    the general purpose of insurance: see
Consolidated Bathurst Export Ltd. v.
    Mutual Boiler & Machinery Insurance Co.
, [1980] 1 S.C.R. 888, at para.
    26.

[29]

If the provision is ambiguous  that is, it is reasonably capable of
    more than one meaning  then the court applies the following rules: it should
    prefer an interpretation that is consistent with the reasonable expectations of
    the parties, as long as that interpretation can be supported by the text of the
    policy; it should avoid an interpretation that would give rise to an
    unrealistic result or that would not have been contemplated by the parties at
    the time the policy was contracted for; and it should strive for an
    interpretation that is consistent with similar provisions in other insurance
    policies.

[30]

If the rules for resolving ambiguity are inadequate, then the court
    should interpret the provision
contra proferentem
, against the
    offeror  that is against the party who drafted the policy, the insurer. In
    applying the rule of
contra proferentem
, courts should construe
    coverage provisions broadly and exclusion provisions narrowly.

[31]

In this case, as I will discuss, I am satisfied that the definition of replacement
    in the appellants policy is unambiguous and that the motion judge gave effect
    to its plain and ordinary meaning.

[32]

In some cases of contract interpretation the standard of appellate
    review is relevant. Because the definition of replacement is likely a
    standard provision in property insurance policies, the standard of review is
    likely correctness, not deferential: see
Ledcor Construction Ltd. v.
    Northbridge Indemnity Insurance Co.
, 2016 SCC 37, 59 C.C.L.I. (5th) 173.
    But as I have concluded that the motion judge correctly interpreted the meaning
    of replacement, the standard of review in this appeal does not matter.

(e)

The interpretation of the definition of replacement

[33]

The appellants three main arguments for overturning the motion judges
    decision are: (i) he erred by saying that his interpretation was needed to
    address moral hazard; (ii) he erred by failing to give meaning to the word
    includes in the policys definition of replacement; and (iii) he erred by
    distinguishing
Chemainus
.

(i)

Moral hazard

[34]

The motion judge wrote, at para. 30 of his reasons, that replacement
    insurance must have restrictions in order to minimize the moral hazard inherent
    in it as much as possible. He held, at paras. 31 and 33, that requiring a
    replacement to be of like kind and quality minimized moral hazard.

I find that the
    insurance contract in question would have been entered into with an
    understanding that the basic tenets of insurance law would govern its
    interpretation. One of those tenets is the minimization of moral hazard when it
    comes to replacement insurance. In my view, the principal method by which moral
    hazard in this context is minimized is the expectation by both parties that
    lost property would be rebuilt with new property of like kind and quality.

Since the underlying principle of insurance is indemnity,
    replacement cost coverage should be construed in a fashion that is consistent
    with that concept. Betterment is to be avoided to the extent possible. I find
    this to be a rationale for a requirement that the replacement building be
    constructed with new property of like kind and quality. This restriction is an
    appropriate brake on the moral hazard risk.

[35]

The appellants submit that the moral hazard inherent in replacement cost
    insurance was fully addressed by the requirement in their policy that the
    replacement actually be carried out and by the policy limit on replacement cost
    recovery. In support of their submission, they rely on an oft-cited article by
    Leo John Jordan, What Price Rebuilding? A Look at Replacement Cost Policies,
    referenced above. At p. 19 of his article, Mr. Jordan reviews standard language
    in a replacement cost insurance policy, which limits the insureds recovery to
    the smallest of the following three measures:

(a) the amount of [the] policy applicable to the damaged or
    destroyed property;

(b) the replacement cost of the property or any part thereof
    identical with such property on the same premises and intended for the same
    occupancy and use; or

(c) the amount actually and necessarily expended in repairing
    or replacing said property or any part thereof.

[36]

Mr. Jordan then discusses the second limitation, (b), and makes the point
    that an insured is entitled to replacement cost no matter what replacement the
    insured chooses. The effect of the limitation in (b), according to Mr. Jordan,
    is that the insureds recovery is limited to what it would cost to replace a
    structure identical to the one lost, on the same premises.

This particular limitation does not require repair or
    replacement of an identical building on the same premises, but places that
    rebuilding amount as one of the measures of damage to apply in calculating
    liability under the replacement cost coverage. The effect of this limitation
    comes into play when the insured desires to rebuild either a different
    structure or on different premises. In those instances, the companys liability
    is not to exceed what it would have cost to replace an identical structure to
    the one lost on the same premises. Although liability is limited to rebuilding
    costs on the same site, the insured may then take that amount and build a
    structure on another site, or use the proceeds to buy an existing structure as
    the replacement, but paying an additional amount from his or her own funds.

[37]

In short, the appellants contend that requiring a replacement to be of
    like kind and quality is not necessary to put a brake on moral hazard. That brake
    is provided by the requirement that the insured carry out repair or
    reconstruction and by the policy limit on replacement cost recovery.

[38]

The appellants submission on moral hazard may well have merit. But even
    if it does, the appellants must still show that the provisions of their policy
    entitle them to replacement cost even though they are replacing their insured
    property with a new property that is not of like kind and quality. In other
    words, this appeal turns on the interpretation of the definitions of replacement
    and replacement cost in the policy.

(ii)

The definitions of replacement and replacement cost

[39]

For convenience, I again set out these two key definitions in the
    appellants insurance policy:

(a) "replacement"
    includes repair, construction or re-construction with new property of like kind
    and quality, and

(b) "replacement cost" means whichever is
    the least of the cost of replacing, repairing, constructing or re-constructing
    the property on the same site with new property of like kind and quality and
    for like occupancy without deduction for depreciation.

[40]

The motion judge concluded that to recover replacement cost, the construction
    must be effected with new property of like kind and quality to what was there
    before. The appellants submit that he erred in his interpretation of the
    definition of replacement.

[41]

The appellants say that the replacement definition is the how, and
    the replacement cost definition is the how much. They say that the motion
    judge erred, because he did not give effect to the word includes in the definition
    of replacement. The word includes, they contend, contemplates that the
    appellants can choose to replace their damaged buildings by means other than
    repair, construction or reconstruction. They can replace their insured property
    with a totally different building, a condominium, and still be entitled to
    replacement cost. The appellants submit that the phrase of like kind and
    quality modifies the enumerated methods of replacement: repair, construction
    or reconstruction. It does not modify an unenumerated replacement, such as
    their condominium.

[42]

The appellants add that though they are constructing a different and
    much larger building, that should be of no concern to Intact, because its
    liability is limited by the definition of replacement cost in the policy. The
    appellants are not seeking to recover the actual cost to build their
    condominium, only the replacement cost as defined in the policy.

[43]

I do not accept the appellants submission. A replacement is needed to
    trigger entitlement to replacement cost. And the plain and ordinary meaning
    of the definition of replacement in the policy is that to be entitled to replacement
    cost, the replacement, no matter how it is effected, must be of like kind and
    quality.

[44]

I agree with the appellants that the word includes in the definition
    of replacement means that the replacement can be effected by a method other
    than repair, construction or reconstruction, for example, by purchasing an
    existing building to replace the one that was lost. But whatever the method of
    replacement, whether enumerated or not, the actual replacement must be of like
    kind and quality. That phrase, of like kind and quality, modifies or anchors
    all methods of replacement.

[45]

To give effect to the appellants interpretation would either be
    illogical, or would render the phrase of like kind and quality meaningless.
    It would be illogical to interpret the definition of replacement to mean that
    a replacement by repair, construction or reconstruction must be of like kind
    and quality, but a replacement by any other method need not be. And to
    interpret the definition of replacement as allowing any kind of replacement
    would make the modifying phrase of like kind and quality meaningless. The
    appellants interpretation would make sense only if the phrase new property of
    like kind and quality were eliminated and the definition simply read:
    replacement includes repair, construction or reconstruction.

[46]

The motion judges interpretation is also consistent with another important
    clause in the replacement cost endorsement, and it better reflects the
    indemnity principle, which typically underlies insurance contracts.

[47]

Clause 2 under the replacement cost endorsement stipulates that if new
    property of like kind and quality cannot be obtained, then new property as
    similar as possible to that lost or damaged and which is capable of performing
    the same function shall be deemed to be new property of like kind and quality.
    This clause reinforces my conclusion that the replacement must be of like kind
    and quality.

[48]

Finally, as I said earlier, indemnity is a main objective of insurance
    and, to the extent possible, coverage provisions should be interpreted with
    that objective in mind. Replacement cost coverage does go beyond mere
    indemnification of an insured because it allows for a measure of betterment.
    But allowing replacement cost only where the replacement is of like kind and
    quality to the damaged or destroyed property better reflects the indemnity
    principle. Replacement cost would then give insureds enough money to rebuild
    something equivalent to the property that was damaged or destroyed.

[49]

I conclude that the motion judge was correct in his interpretation of
    the appellants insurance policy with Intact. The appellants were entitled to
    replacement cost only if they replaced their insured property with a new
    property of like kind and quality. As they do not propose to do so, they were
    entitled only to the actual cash value of their insured property. This
    conclusion is sufficient to decide the appeal. For completeness, however, I
    will briefly address the decision in
Chemainus
.

(iii)

Chemainus

[50]

In
Chemainus
, a fire had destroyed the insureds building. The
    insured had purchased replacement cost coverage. The replacement provision in
    the insureds policy was similar, but not identical to the definition of replacement
    in the appeal before us. It read: replacement includes repair, construction or
    reconstruction with
materials
of like kind and
    quality (emphasis added). To replace its destroyed property, the insured
    decided to purchase an existing building on another site. The insured then
    demanded an amount equivalent to replacement cost, as provided for in the
    policy. When the insurer refused to pay, the insured sued.

[51]

The trial judge found for the insured. He held that the replacement
    provision in the policy was not a definition. He resorted to the dictionary
    definition of replace  take the place of, or provide substitution for  and
    held that the existing building the insured had purchased was a replacement
    under the policy. At paras. 47 and 48 of his reasons, the trial judge rejected
    the insurers argument that the replacement building had to be constructed with
    materials of like kind and quality:

There was no requirement that the replacement building be
    constructed with materials of "like kind and quality". Had the insurer
    wished to import that limitation into the definition of replacement, it could
    have done so. It did provide that replacement includes "repair,
    construction or reconstruction with materials of like kind and quality",
    but the plaintiff did not do any of these things when it replaced and it was
    not compelled to.

The "replacement cost" provision in the endorsement
    has nothing to do with the concept of replacement. Clearly, replacement cost is
    not the cost of replacement. The replacement cost provision established
    financial parameters for indemnification. It was a formula that both parties
    could look to: one to see its exposure to indemnify, the other to see what it
    could expect to receive if it replaced. The policy gave the insured the right
    to choose how to effect replacement, but it provided the insurer with a limit to
    its liability, and the "cost replacement" provision defined the
    limit. If an insured wished to be a spendthrift when effecting replacement, the
    insurer was not at risk.

[52]

Although the wording of the replacement provision in
Chemainus
differs from the wording of the definition of replacement in the present
    case, I agree with the appellants that this difference does not distinguish the
    two cases. I accept that the trial judges interpretation of the provision for
    replacement in
Chemainus
differs from mine. Respectfully, for the
    reasons I have already discussed, I do not agree with his interpretation. I
    think it is at odds with the plain and ordinary meaning of the definition in
    the appellants policy. And although interpreting similar insurance provisions consistently
    is desirable, I do not feel bound to follow a trial decision, which was given a
    quarter of a century ago and has never received appellate approval.

[53]

I would not give effect to the appellants position on this first and
    main issue on the appeal.

(2)

Did the motion judge err by failing to hold that the appellants were
    entitled to an amount for building code upgrades?

[54]

The appellants had purchased an extension of coverage for building
    by-laws, in substance, an amount for building code upgrades required by their
    replacement structure. The appellants asked for this amount in their Notice of
    Motion, but the motion judge did not address their claim. Nonetheless, the
    parties agree that we can deal with the issue, as the material facts are not in
    dispute. The relevant portion of the extended coverage for building by-laws is
    as follows:

This insurance is,
    without increasing the amount of insurance, and only as a result of an insured
    peril, extended to indemnify the Insured for:

(c)

any increase in the cost of
    repairing, replacing, constructing or reconstructing the "building"
    on the same site or on an adjacent site, of like height, floor area and style,
    and for like occupancy:

arising from the enforcement of the
    minimum requirements of any by-law, regulation, ordinance or law which

(i)

regulates zoning
    or the demolition, repair or construction of damaged "buildings" and

(ii)

is in force at the
    time of loss or damage.

[55]

As is evident from the wording of clause (c), entitlement to an amount
    for building code upgrades parallels entitlement to replacement cost. And just
    as the appellants are not entitled to the latter, they are not entitled to the
    former. Their proposed condominium does not satisfy the requirements of clause
    (c).

[56]

The appellants condominium is not of like height to their insured
    property: it is eight and a half stories high compared to one, two or three
    stories high. It is not of like floor area: the condominium is almost four
    times as large as the floor area of their insured property. It is not of like
    style, as it has many features, such as elevators and underground parking, which
    were not contained in the appellants insured property. And it is obviously not
    of like occupancy: the condominium will have 129 residential units; the insured
    property had only 15.

[57]

The appellants are therefore not entitled to any amount for building
    code upgrades for their condominium. I would not give effect to the appellants
    position on this issue.

D.

Conclusion

[58]

I would dismiss the appeal. The appellants are not entitled to
    replacement cost, because their condominium is not a new property of like kind
    and quality. Similarly, they are not entitled to any amount for building code
    upgrades, because their condominium is not of like height, floor area, style or
    occupancy to their insured property. The appellants are entitled to the actual
    cash value of their insured property, which they have received.

[59]

Intact is entitled to the costs of this appeal in the agreed on amount
    of $15,000 inclusive of disbursements and applicable taxes.

Released: December 6, 2016 (J.L.)

John Laskin J.A.

I agree. S.E. Pepall J.A.

I agree. David Brown J.A.

[1]
R.R.O. 1990, Reg. 194.

[2]
R.S.O. 1990, c. I.8.


COURT OF APPEAL FOR ONTARIO

CITATION: Carrick (Re), 2016 ONCA 963

DATE: 20161220

DOCKET: C61905

Feldman, MacPherson and Hourigan JJ.A.

IN THE MATTER OF:  QUENTIN CARRICK

AN APPEAL UNDER PART XX.1 OF THE
CODE

Anita Szigeti, for the appellant, Quentin Carrick

Andrew Cappell, for the respondent, the Attorney General
    of Ontario

Julie Zamprogna Balles, for the respondent, St. Josephs
    Health Care London

Heard: December 15, 2016

On appeal from the disposition of the Ontario Review
    Board dated February 3, 2016.

ENDORSEMENT

[1]

The appellant appeals from the disposition of the Ontario Review Board
    dated February 3, 2016, with supporting reasons dated February 26, 2016. In its
    disposition the Board ordered that the appellant continue to be detained at the
    Southwest Centre for Forensic Mental Health Care, St. Josephs Health Care
    London. The Disposition also provided that the person in charge of the
    hospital, in his or her discretion, could permit the appellant:

(a)

to attend within or outside of
    the hospital for necessary medical, dental, legal or compassionate purposes;

(b)

to enter the community of
    Southern Ontario, indirectly supervised;

(c)

a pass to attend a residential
    drug rehabilitation program within a 200 kilometre radius of the Southwest
    Centre for Forensic Mental Health Care, St. Josephs Health Care London,
    indirectly supervised; and

(d)

to live in Elgin and Middlesex
    Counties in accommodation approved by the person in charge.

[2]

The appellant appeals from this disposition on the basis that he does
    not pose a significant threat to the safety of the public and, therefore, the
    disposition is unreasonable. The proper disposition, asserts the appellant,
    would be an absolute discharge.

[3]

In support of his position, the appellants principal submission is that
    the Board did not take proper account of the reasons of this court in the
    appeal of the Boards previous disposition relating to the appellant. In
R.
    v. Carrick
, 2015 ONCA 866, this court allowed an appeal from the Boards
    disposition dated October 6, 2014 and ordered that the matter be returned to
    the Board for a fresh determination. The appellant submits that the Boards
    fresh determination (the disposition at issue in this appeal) is infected with
    the same errors as the previous disposition.

[4]

We do not accept this submission. We begin by noting that in its
    decision in 2015 this court did not find that the appellant was not a
    significant threat to the safety of the public; rather the court found problems
    with the Boards reasoning process:

[43] Given the history of the appellants detention and the
    state of the expert evidence, the Board needed to do more than simply assert
    that the appellant continues to pose a significant threat to the safety of the
    public. It had to address the conflict in the evidence and explain why it was
    satisfied that the appellant poses a significant threat. In my view, its
    failure to do so renders its decision unreasonable.

[44] It does not follow from the conclusion that the Boards
    decision is unreasonable that the appellant poses no significant risk to the
    safety of the public and should be discharged. It is simply the case that the
    Board has not made a reasonable decision. The risk posed by the appellant is a matter
    for the Board in the exercise of its expert judgment, not this court.

[5]

In its 2016 hearing and disposition, the Board paid heed to this courts
    admonition and instruction. It dealt explicitly with the conflict between some
    of the views of the appellants previous threating physician, Dr. Daly, and his
    current treating physician, Dr. Desjardins. The Board preferred the opinion of
    Dr. Desjardins, as it was entitled to do.

[6]

The Board also identified and relied on a significant new development
    since the previous hearing:

[T]here is no doubt that he brought a dangerous and potentially
    de-stabilizing drug [methamphetamine] into a psychiatric facility. This act in
    itself was risky and irresponsible, and displayed a disregard for the safety of
    others.

[7]

In the end, the Board concluded that the appellant remains a significant
    threat to the safety of the public as defined in
Winko v. British Columbia
,
    [1999] 2 S.C.R. 625. The core of the Boards reasoning on this issue is:

[The appellants counsel] submitted that he does not represent
    a risk to the safety of the public because he has not committed any acts of
    physical violence while under the jurisdiction of the Board. However, his
    antecedents strongly suggest that he is capable of committing them when in need
    of money for drugs. The Board notes the boldness in which Mr. Carrick carried
    out the index offence, the potential psychological harm to the five year old in
    the residence, and his lengthy criminal record containing many entries for
    violence. He also exhibits aggression towards the staff, and, according to the
    hospital report at p. 82 is calm in one moment and then picking fights with
    peers.

[8]

When coupled with the Boards review of the medical evidence and its
    reliance on the appellants clandestine carriage of methamphetamine into the
    hospital, we do not think that the Boards disposition is unreasonable.

[9]

We also observe that there is an important difference between the 2014
    and 2016 dispositions. The latter contains a provision permitting the appellant
    to live in the community if the treatment team thinks that will benefit him. We
    agree with the respondent Attorney General on this point (Factum, para. 40):

As it stands, the appellants disposition affords the appellant
    a great deal of freedom, as it allows him to live in the community. It is an
    appropriate disposition in the circumstances.

[10]

We trust that the hospital will give careful consideration to this new
    provision in the Disposition.

[11]

The appeal is dismissed.

K.
    Feldman J.A.

J.C.
    MacPherson J.A.

C.W.
    Hourigan J.A.


WARNING

THIS IS AN APPEAL UNDER THE

CHILD AND FAMILY SERVICES ACT

AND IS SUBJECT TO S. 45 OF THE ACT WHICH
PROVIDES:

45(7)  The court may make an order,

(a) excluding a particular media representative
from all or part of a hearing;

(b) excluding all media representatives from all
or a part of a hearing; or

(c) prohibiting the publication of a report of the
hearing or a specified part of the hearing,

where the court is of the opinion that the presence
of the media representative or representatives or the publication of the
report, as the case may be, would cause emotional harm to a child who is a
witness at or a participant in the hearing or is the subject of the proceeding.

45(8)  No person shall publish or make public
information that has the effect of identifying a child who is a witness at or a
participant in a hearing or the subject of a proceeding, or the childs parent
or foster parent or a member of the childs family.

45(9)  The court may make an order prohibiting the
publication of information that has the effect of identifying a person charged
with an offence under this Part.

COURT OF APPEAL FOR ONTARIO

CITATION: Children's Aid Society of Toronto v. V.D., 2016
ONCA 959

DATE: 20161220

DOCKET: C62218

Cronk, Juriansz and Roberts JJ.A.

BETWEEN

Childrens Aid Society of Toronto

Applicant (Respondent)

and

V.D. and P.V.

Respondent (Appellant)

V.D., acting in person

P.V., acting in person

Lisa Hayes, for the respondent

Heard: December 12, 2016

On appeal from the judgment of Justice Nancy L. Backhouse
of the Superior Court of Justice, dated May 10, 2016, with reasons reported at
2016 ONSC 3297.

By the Court:

Introduction

[1]

The appellant V.D. is the biological mother of P.A.V., a young boy born
on January 4, 2008.  The appellant P.V. is P.A.V.s biological father.  On
December 11, 2014, Weagant J. of the Ontario Court of Justice (the trial
judge) found P.A.V. to be in need of protection due to neglect under s.
37(2)(b) of the
Child And Family Services Act
, R.S.O. 1990 c. C.11
(the Act).  P.A.V. has been in the temporary care of the respondent, the
Childrens Aid Society of Toronto (the CAS), ever since.  Although the appellants
now dispute the trial judges finding of severe neglect of P.A.V., no party
appealed the trial judges protection ruling.

[2]

By order dated July 29, 2015, Weagant J. made P.A.V. a Crown ward with
no access to the appellants, pursuant to s. 57(1)(3) of the Act.  The
appellants appealed to the Superior Court of Justice, asserting that the trial
judge had misdirected himself and erred in law in numerous respects.  On May
10, 2016, Backhouse J. of the Superior Court (the appeal judge) dismissed
their appeal.

[3]

The appellants now appeal to this court from the appeal judges decision.

Preliminary Matters

[4]

At the outset of oral argument at the appeal hearing, V.D., supported by
P.V., sought various relief, including: i) a further adjournment of the appeal
to afford the appellants time to review the transcripts of the proceeding
before the appeal judge, which they claimed not to have received; ii)
additional time for argument of the appeal, namely, 20 hours for V.D. and 20
hours for P.V.; iii) the appointment of a five-person panel of this court to
hear the appeal; iv) the granting of leave to appeal to the Supreme Court of
Canada from the appeal judges decision; and v) in the case of P.V., an order
removing him as a named appellant on this appeal to permit him to commence his
own appeal.

[5]

The panel declined to grant any of the requested relief, for several
reasons.  First, none of the requested relief was sought on proper materials
served and filed in accordance with the applicable rules of court; second, and
importantly, no proper justification for any of the requested relief was
advanced by the appellants; third, by order of this court dated October 24,
2016, the argument of this appeal on December 12, 2016 was made peremptory to
the appellants as an essential term of the adjournment of the appeal then
granted at the appellants request; fourth, also by this courts October 24,
2016 order, a procedure was set for the service on the appellants at a
designated location of all materials and transcripts related to this appeal,
counsel for the CAS confirmed proof of service of the transcripts in accordance
with that court order, and the transcripts in question had been filed with this
court; and fifth, some of the relief sought (for example, the appointment of a
five-person panel to hear the appeal) was unavailable in any event.  In all
these circumstances, the granting of the appellants adjournment and other
requests for procedural relief was neither warranted nor appropriate.

Merits of Appeal

[6]

For the following reasons, we also conclude that the appeal must be
dismissed on the merits.

[7]

First, the appeal judge considered each of the appellants grounds of
appeal in detail.  She provided cogent and comprehensive reasons (20 pages) for
her rejection of them.  In particular, after alluding to the pertinent evidence
before the trial judge, including the expert evidence, regarding P.A.V.s
needs, V.D.s parenting capacity and her proposed plan of care, and the trial
judges conduct of this lengthy trial (35 days), the appeal judge held:

1)

there was no merit to the appellants multiple allegations of bias and
procedural unfairness against the trial judge;

2)

contrary to the appellants contention, Dr. Jean Wittenberg (a staff
psychiatrist at the Hospital for Sick Children and head of that institutions
Infant Psychiatry Program who conducted a third parenting capacity assessment
in respect of V.D.) did not usurp the trial judges role or function.  Rather,
the trial judges decision to make P.A.V. a Crown ward and to terminate
parental access was his alone, based on the totality of the evidence at trial;

3)

it was open to the trial judge on the evidence to conclude, as he did, that
continued parental access was not in P.A.V.s best interests, that the
appellants had not satisfied their onus of demonstrating that access would
benefit P.A.V. once he became a Crown ward, that V.D.s inability to control
her conduct, including her harassing behaviours, demonstrated a present and
continuing impediment to permanency planning for P.A.V., and that V.D.
routinely ignores directions and rules regarding P.A.V. with which she
disagrees; and

4)

there was no basis on the record to conclude that the trial judge failed
to consider whether P.A.V. could be returned to V.D.s care or whether it was
in P.A.V.s best interests to have a continuing relationship with the
appellants.  To the contrary, the trial judges reasons confirm that he
carefully considered these central issues and that his findings were supported
by the evidence he accepted.

[8]

We see no error in the appeal judges holdings or in her reasoning.  Her
findings, and those of the trial judge, attract considerable deference from
this court: see
C. (G.C.) v. New Brunswick (Minister of Health and
Community Services)
, [1988] 1 SCR 1073;
Van de Perre v. Edwards
,
2001 SCC 60, [2001] 2 S.C.R. 1014.

[9]

Further, the appellants have been unable to point to any palpable and
overriding error or any reversible error of law in the appeal judges
decision.  For example, their claim that the trial judge, and the appeal judge
in turn, failed to consider the positive aspects of V.D.s relationship with
P.A.V. and her proposed plan of care for him are belied by the trial judges
and the appeal judges reasons.  Those reasons make clear that the evidence of
V.D.s relationship with and her conduct concerning her son, and the best
interests of P.A.V., were at the forefront of the trial judges analysis of the
issues and his evaluation of the evidence.

[10]

Further, while the appellants maintain that there was no valid final
order by the trial judge before the appeal judge, that the order contained in
the appeal hearing materials is illegal and false or a forgery, and that
Dr. Wittenbergs report was altered or fabricated, they adduced no evidence
in support of these serious allegations.  There is simply no evidentiary
foundation on the record before this court to support these bald assertions.

[11]

Finally, to the extent that the appellants renew their challenge to the
trial judges decision based on the arguments advanced by them before the
appeal judge, those arguments, as we have said, were fully considered by the
appeal judge, and rejected, for cogent and clear reasons.

[12]

In the end, we see nothing in this record to support any allegation of
procedural unfairness or any reversible error by either the trial or the appeal
judge.

Disposition

[13]

P.A.V. has been in the care of the Society since May 16, 2011  about
five and one-half years.  He will be nine years of age in about three weeks.  The
trial judges findings about the nature and extent of the neglect that P.A.V.
experienced over a lengthy period while in V.D.s care, his needs and the type
of parenting that he requires to meet those needs were amply supported by the
evidence at trial.  The lengthy litigation in this case has prevented
permanency and long-term stability in P.A.V.s life and precluded adoption
efforts.  We agree with the CAS that closure should be brought to this
unfortunate chapter in P.A.V.s life and that he should be placed for adoption
without further delay.

[14]

The appeal is therefore dismissed.  We make no order as to costs.

E.A. Cronk J.A.

R.G. Juriansz J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Dickey v. Alexander, 2016 ONCA 961

DATE:  20161220

DOCKET: C59549

Simmons, Pepall and Huscroft JJ.A.

In the matter of an application under subsection
    32(1) of the
Health Care Consent Act
,
1996
, S.O. 1996, c. 2,
    Schedule A, as amended.

BETWEEN

Dr. Robert Dickey

Appellant

and

Michael Alexander

Respondent

Janice Blackburn, for the appellant

Marshall Swadron and Nicole Walton, for the respondent

Heard:  November 15, 2016

On appeal from the order of Justice Stephen T. Bale of
    the Superior Court of Justice, dated September 29, 2014.

ENDORSEMENT

[1]

The respondent, Michael Alexander, was found not
    criminally responsible (NCR) on account of mental disorder in connection with
    index offences dating to April 2010, consisting of three counts of criminal
    harassment, two counts of failure to comply, possession of marijuana, causing a
    disturbance, assault causing bodily harm, mischief, and threatening death. He was
    admitted to Waypoint Centre for Mental Health Care (Waypoint) pursuant to a
    disposition order of the Ontario Review Board on April 25, 2013. He has a
    lengthy psychiatric history.

[2]

On May 21, 2013, the appellant, Dr. Robert
    Dickey, found that the respondent was incapable of consenting to treatment with
    anti-psychotic medications, mood stabilizers, and side effects medications. The
    respondent applied to the Consent and Capacity Board (Board) to review this
    finding, and on June 3, 2013, the Board found that the respondent was incapable
    of consenting to the proposed treatment. His appeal to the Superior Court was
    heard on January 28, 2014. On September 29, 2014, the Superior Court judge
    reversed the Boards decision.

[3]

Dr. Dickey appeals from the decision of the
    Superior Court judge.

[4]

Following the commencement of this appeal, the
    respondents appeal from the NCR verdict was allowed and the respondent was
    discharged from Waypoint on November 27, 2014. This court was informed that the
    respondent has since had a new trial that was resolved by plea agreement under
    which he pleaded guilty to some of the offences, and no NCR verdict was
    returned.

[5]

As a result of the various proceedings, the
    treatment proposed by Dr. Dickey in 2013 was never commenced.

[6]

Prior to the hearing of this appeal, the
    respondent served and filed a motion seeking to have the appeal quashed as
    moot, but chose not to proceed with it. However, given the status of the
    respondents NCR verdict, the parties were invited to make submissions at the
    hearing of the appeal on whether the appeal was moot.

[7]

It is common ground that there is no longer a
    live controversy that requires resolution. The Boards decision determined the
    capacity of the respondent for the purposes of consent to treatment as of the
    date of its hearing  that is, as of June 3, 2013, a date long-past. The
    Boards decision and the appeal from that decision were premised on an NCR
    order that no longer exists.

[8]

As noted above, the respondent is no longer at
    Waypoint. In these circumstances, a decision from this court would have no
    practical effect on the rights of the parties. The appeal is moot.

[9]

That being so, the question is whether the court
    should exercise its discretion to hear the appeal despite it being moot:
Borowski v. Canada
    (Attorney General)
, [1989] 1 S.C.R. 342.

[10]

The appellant submits that we should hear the
    appeal because if the Superior Court judge's decision is allowed to stand,
    it may be used in support of an argument that the respondent expressed a
    prior capable wish that binds future substitute decision makers under s. 21
    of the
Health
    Care Consent Act
1996,
S.O. 1996, c. 2, Schedule A, as amended
, and
    so may preclude the administration of the relevant drugs without the
    respondents consent.

[11]

It is enough for present purposes to reiterate
    that the decision under appeal concerns the respondents capacity at the time
    the Boards decision was made. The Superior Court judges decision may be
    evidence relevant to determining the respondents capacity in a future case,
    but it is not clear that it would be determinative. In any event, s. 36 of the
    Act establishes a procedure pursuant to which a substitute decision maker and a
    healthcare practitioner can obtain permission for consent to treatment despite
    a prior capable wish.

[12]

We are not persuaded that this is an appropriate
    case to exercise our discretion to hear the appeal. Not only would a decision
    of this court have no practical effect on the rights of the parties, it would
    have no broader application beyond the parties. Moreover, as noted above, the
    concern relating to a prior capable wish is specifically addressed by s. 36 of
    the Act. In any event, our decision not to hear the appeal is not to be taken
    as a comment on the merits of the order under appeal.

[13]

The appeal is dismissed as moot.

Janet Simmons J.A.

S.E. Pepall J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Diemer (Cornacle Cattle Co.) v. London Farms Ltd.,
    2016 ONCA 946

DATE: 20161215

DOCKET: C62198

Cronk, Juriansz and Roberts JJ.A.

BETWEEN

Daniel
    A. Diemer

carrying on business as
    Cornacre Cattle Co.

Plaintiff (Appellant)

and

London Dairy Farms Ltd.

Defendant (Respondent)

Steven Pickard, for the appellant

Dan MacKeigan, for the respondent

Heard: December 12, 2016

On appeal from the order of Justice George W. King of the
    Superior Court of Justice, dated April 26, 2016.

ENDORSEMENT

[1]

The appellant appeals from the dismissal of his
    motion for an order to allow for the late filing of his statement of claim. The
    appellants notice of action was issued on July 22, 2015, but the appellant
    failed to file a statement of claim within the requisite 30-day deadline under
    r. 14.03(3) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.

[2]

The appellant alleges that the respondent sold
    him defective dairy cows.  In response to the appellants complaint, on
    September 26, 2013, the respondent provided two new dairy cows. The respondent
    alleges that on that day, the parties concluded a settlement agreement and the
    appellant provided the respondent with a release. The appellant sold his farm
    and cows on October 4, 2013, went into receivership on October 23, 2013, and
    was discharged on May 26, 2015. There is no evidence that the appellant sought
    leave from the receiver or the court to commence a claim. It is not disputed
    that there was no further communication between the appellant and the respondent
    until November 11, 2015 when the appellant served its notice of motion for
    leave to file his statement of claim.

[3]

The appellant concedes that the motion judge
    applied the correct test and considered the relevant factors, as set out in
Nugent
    v. Crook
, 1969 CarswellOnt 951, 40 O.R. (2d) 110 (C.A.), at para. 2. However,
    he submits that the motion judge erred in rejecting the appellants explanation
    for the delay in filing his statement of claim and in finding that there was
    prejudice to the respondent as a result of the delay.

[4]

We do not accept these submissions.

[5]

First, it was open to the motion judge to find
    that the appellants explanation for the failure to file within the requisite
    time was inadequate because it lacked the necessary detail to explain the delay.
    Specifically, the motion judge noted the absence of the following particulars:

The plaintiffs request for an
    extension is made without: (i) any suggestion of inadvertence; (ii) a statement
    as to when the plaintiff requested documents; (iii) information as to when the
    plaintiff received documents; and (iv) and explanation why after the plaintiff
    filed a notice of action to protect against an upcoming limitation period, it
    failed for months to file a statement of claim.

[6]

Further, we see no error in the motion judges
    conclusion that there was prejudice to the respondent because, at the very
    least, the respondent had lost the opportunity to investigate the appellants
    claim, assess the validity of the appellants assertions regarding the health
    and productivity of the cows, and evaluate the reasonableness of the steps
    taken by the appellant in purported mitigation of his damages.

[7]

While it is common ground that the appellants
    action was commenced within the relevant two-year limitation period, his
    failure to file the statement of claim on a timely basis brought his action to
    an end, absent the respondents consent or leave of the court.  The expiry of
    the relevant two-year limitation period, on September 26, 2015 (two years after
    the appellant advanced a complaint and two new cows were provided to him) or on
    October 4, 2015 (two years after his damages crystallized on the sale of his
    farm and cows), gave rise to a rebuttable presumption of prejudice to the
    respondent. The appellant did not file any evidence to rebut this presumption
    nor does the recitation of the relevant events serve to do so. The onus is not
    on the respondent to put forward positive evidence that it was prejudiced:
Nugent
,
    at para. 3.

[8]

As this court also noted in
Nugent
, at
    para. 3: It is the plaintiff who is seeking the indulgence and it is for the
    plaintiff to establish proper grounds for the exercise of the discretion of the
    court. The motion judge determined that the appellant failed to do so in this
    case. We see no basis to interfere with his discretionary decision.

[9]

For these reasons, the appeal is dismissed.

[10]

The respondent is entitled to its partial
    indemnity costs of the appeal, in the amount of $7,000.00, inclusive of disbursements
    and all applicable taxes.

E.A.
    Cronk J.A.

R.G.
    Juriansz J.A.

L.B.
    Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Eureka Farms Inc. v. Luten, 2016 ONCA 969

DATE: 20161221

DOCKET: C60015

Sharpe, Lauwers and Miller JJ.A.

BETWEEN

Eureka Farms Inc.

Plaintiff

(Respondent)

and

Roelof Geuchien Luten also known as Roel Luten
    and Roelofje Femmigje Remmelts-Luten also known as Roelofje Femmigje
    Remmells-Luten

Defendants

(Appellants)

AND BETWEEN

Roelof Geuchien Luten also known as Roel Luten
    and Roelofje Femmigje Remmelts-Luten also known as Roelofje Femmigje
    Remmells-Luten

Plaintiffs by
    Counterclaim

(Appellants)

and

Eureka Farms Inc., Renatus Boerkamp also known as
    Rene Boerkamp and Eva Boerkamp

Defendants to the Counterclaim

(Respondents)

G. Edward Oldfield, for the appellants

David Medcalf, for the respondents

Heard: December 19, 2016

On appeal from the judgment of Justice R.D. Reilly of the
    Superior Court of Justice, dated January 23, 2015.

ENDORSEMENT

[1]

This appeal arises from an agreement of purchase and sale of a swine
    farm. The appellant purchasers submit that the trial judge erred by dismissing
    their claim for damages for the loss they suffered when they were forced to
    sell the farm at a loss when they could not secure a supply of pigs.

[2]

In our view, the trial judge properly dismissed the appellants claim on
    the basis of the terms of the written contract between the parties.

Duty of Good Faith

[3]

The appellants submit that the respondent breached its duty of good
    faith, citing
Bhasin v. Hrynew
, 2014 SCC 71, [2014] 3 S.C.R. 494, by
    failing to advise the appellants well in advance of closing that there would be
    no pigs in the barn when the transaction closed.

[4]

Prior to closing, the principal of the respondent became gravely ill and
    market conditions for pigs took a turn for the worse. As a result, the vendor
    did not enter a new turn by turn arrangement with his supplier and there were
    no pigs in the barn at the time of closing.

[5]

The agreement of purchase and sale contained a condition that gave the
    appellants the right to extract themselves from the agreement if they were
    unable to satisfy themselves as to the supply of pigs. The appellants met with
    the respondents supplier who told them that he was prepared to supply them
    with pigs but only on the basis of an oral turn by turn agreement. He
    declined to enter any written or long-term agreement. Following that meeting,
    the appellants waived the condition.

[6]

After learning that the barn was empty prior to closing, the appellants
    did not ask for an extension of the closing date to verify their source of
    supply, nor did they refuse to close on the basis that the respondent was in
    breach.

[7]

We agree with the appellants that at the time the agreement was
    concluded, both parties expected that there would be pigs in the barn at the
    time of closing. However, the appellants knew that they had no assurance of an
    on-going supply of pigs and by waiving the condition in their favour prior to
    closing, they assumed the risk that market conditions could change and that the
    supply of pigs could dry up. Even if the respondent should have told the
    appellants in a more timely fashion that the barn would have no pigs at the
    time of closing, we do not agree that that amounts to a breach of the duty of
    good faith sufficient to trigger a remedy for the appellants given the terms of
    the contact and the way it allocated the risk of market change.

[8]

We conclude that the allegation of bad faith is insufficient to overcome
    the fact that the appellants knew they had no guaranteed source of supply and
    they assumed that risk by waiving the condition and closing the transaction
    with full knowledge of the fact that the barn was empty.

Negligent Misrepresentation

[9]

The appellants submit that the respondent made a negligent
    misrepresentation when he failed to disclose that under the arrangement with
    the third party supplier in place at the time the agreement of purchase and
    sale was entered, the respondent was financing the supply of pigs by purchasing
    them when they came to the barn and reselling them to the third party supplier
    when they left.

[10]

We agree with the respondent that any failure on its part to disclose
    the details of its arrangements with the supplier does not assist the
    appellants. First, the agreement of purchase and sale contains an entire
    agreement clause. Second, and in any event, the appellants met with the
    supplier and discussed with him the details of the arrangement the supplier was
    prepared to offer them if they purchased the farm. The appellants decided to
    proceed with the transaction on that basis and the terms of the respondents
    arrangements with the supplier are irrelevant.

Contractual obligation to have pigs in the farm on closing

[11]

We do not accept the argument that the agreement of purchase and sale
    required the respondent to have pigs in the barn at the time of closing. There
    is no provision to that effect in the agreement. The trial judge made a finding
    that the provisions providing for an adjustment on closing regarding the
    proceeds of the hog contract and to provide management guidance for a four week
    period following closing could not be interpreted as creating a contractual
    obligation to ensure that there were pigs in the barn at the time of closing.
    That finding, in our view, was entirely consistent with the overall effect of
    the agreement. It was reasonable and is entitled to deference on appeal.

[12]

Finally, we are not persuaded that the loss the appellants suffered was
    caused by the fact that there were no pigs in the barn at the time of closing.
    The supplier could not supply the appellants with pigs because of the adverse
    market conditions, and there is no evidence that the supply problem was
    causally related to the fact that appellants had acquired the farm with an
    empty barn.

[13]

The real cause of the appellants loss was the significant rise in the
    price of pigs, an adverse market condition for which, on a fair reading of the
    agreement of purchase and sale, they had assumed the risk.

Disposition

[14]

Accordingly, the appeal is dismissed with costs to the respondent fixed
    in the amount agreed to by the parties, namely, $15,000 inclusive of
    disbursements and taxes.

Robert J. Sharpe
    J.A.

P. Lauwers J.A.

B.W. Miller J.A.