COURT OF APPEAL FOR ONTARIO

CITATION: Farwell v. Citair, Inc. (General Coach
    Canada), 2014 ONCA 177

DATE: 20140307

DOCKET: C56298

Doherty, Lauwers and Strathy JJ.A.

BETWEEN

Kenneth Farwell

Plaintiff (Respondent)

and

Citair, Inc. c.o.b. as General Coach Canada

Defendant (Appellant)

Robert J. Atkinson, for the appellant

Lianne Armstrong, for the respondent

Heard:  February 5, 2014

On appeal from the judgment of Justice Johanne N.
    Morissette of the Superior Court of Justice, dated October 23, 2012, with
    reasons reported at 2012 ONSC 6013.

Lauwers J.A.:

[1]

The trial judge found that the
    appellant, Citair, Inc., carrying on business as General Coach Canada, had
    wrongfully dismissed the respondent, Kenneth Farwell. She fixed the damages in
    lieu of notice at 24 months, and dismissed the appellants argument that Mr.
    Farwell had not mitigated his damages because he did not stay in the position
    offered to him of Purchasing Manager for the notice period. For the reasons set
    out below, I would dismiss the appeal.

Constructive
    Dismissal

[2]

The appellant argues that the
    trial judge made an error of mixed fact and law, and misapplied the principles
    of the law of constructive dismissal, when she found that the appellants
    transfer of the respondent from Operations Manager/Vice President of Operations
    to the position of Purchasing Manager was a fundamental change to the
    employment contract.

[3]

The trial judge applied the
    decision of the Supreme Court of Canada in
Farber v. Royal Trust Co.
,
    [1997] 1 S.C.R. 846. Gonthier J. approved, at para. 34, the following statement
    of the law taken from an article by
Justice
    N. W. Sherstobitoff of the Saskatchewan Court of Appeal
:

A constructive dismissal occurs when an employer makes a
    unilateral and fundamental change to a term or condition of an employment
    contract without providing reasonable notice of that change to the employee.
    Such action amounts to a repudiation of the contract of employment by the
    employer whether or not he intended to continue the employment relationship.
    Therefore, the employee can treat the contract as wrongfully terminated and
    resign which, in turn, gives rise to an obligation on the employers part to
    provide damages in lieu of reasonable notice.

[4]

The trial judges key findings on
    the evidence were the following:

In reorganizing, Kens role as VP Operations to Purchasing
    Manager involved a significant change in responsibilities and duties. It
    entailed a change in title to reflect his diminished role in the company
    resulting in a significant loss of status and prestige.  In that regard, the
    evidence of all witnesses, including that of Roger, acknowledged that Kens
    proposed new role would be of lesser status, even though Roger attempted to
    convince this Court that all his managers are of importance, it remains a fact
    that from an objective point of view, the Purchasing Manager does not have the
    same status or prestige as the Operations Manager to whom the Purchasing
    Manager reports to.

[5]

I would find that the trial judge
    did not err in concluding that Mr. Farwell was constructively dismissed. The
    decision is amply supported by the evidence and fits comfortably within the law
    as stated by the Supreme Court of Canada in
Farber
.

The Notice Period

[6]

The trial judge set the period of
    notice at 24 months. The appellant submits that a notice period two to four
    months shorter would have been more appropriate.

[7]

The trial judge applied the well-known
    principles for assessing the reasonableness of notice set out in
Bardal v.
    Globe & Mail Ltd
. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.J.), at p. 145.
    She stated:

As indicated in
Bardal v. The Globe & Mail Ltd
.,
    the reasonableness of the notice must be decided with reference to each
    particular case, having regard to the character of the employment, the length
    of service of the employee, the age of the employee and the availability of
    similar employment, having regard to the experience, training and
    qualifications of the employee.

[8]

The trial judge found the
    following facts:

Ken was 58 years of age in May 2009 and had been employed for
    38 years. He had a high level managerial employment and had been very dedicated
    to the company.

[9]

I would find that the trial judge
    did not err in her determination of the length of notice in these
    circumstances.

Mitigation

[10]

Mr. Farwell made efforts in a poor
    economy to find other employment but was not successful for many months.

[11]

The appellant argues that Mr.
    Farwell had a legal duty to mitigate his damages, and that he was obliged to
    accept the job of Purchasing Manager during the period of working notice; the
    salary and working conditions would have been almost the same as for his
    previous position, the only difference being a likely reduction in bonus. Giving
    effect to this argument would eliminate Mr. Farwells damages.

[12]

Bastarache J. set out the relevant
    law in
Evans

v. Teamsters Local Union No. 31
, 2008 SCC 20, [2008]
    1 S.C.R. 661, at para. 30:

This Court has held that the employer bears the onus of
    demonstrating both that an employee has failed to make reasonable efforts to
    find work and that work could have been found (
Red Deer College v. Michaels
,
    [1976] 2 S.C.R. 324).
Where the employer offers the employee a chance to
    mitigate damages by returning to work for him or her, the central issue is
    whether a reasonable person would accept such an opportunity.
In 1989, the
    Ontario Court of Appeal held that a reasonable person should be expected to do
    so "[w]here the salary offered is the same, where the working conditions
    are not substantially different or the work demeaning, and where the personal
    relationships involved are not acrimonious" (
Mifsud v. MacMillan
    Bathurst Inc.
(1989), 70 O.R. (2d) 701, at p. 710). [Emphasis added.]

[13]

The trial judge correctly noted
    that an employee cannot be obliged to mitigate by working in an atmosphere of
    hostility, embarrassment or humiliation.  She noted, again correctly, that she
    was obliged to assess, objectively, the work atmosphere, stigma and loss of
    dignity to be faced by Mr. Farwell in considering whether to continue his
    employment in an effort to mitigate his damages.

[14]

The trial judge found that obliging
    Mr. Farwell to accept the new position, which he had held years earlier, would
    be humiliating and embarrassing for him:

Further in this case, the fact that an employee previously
    subordinate to Ken, would be elevated to his position, and in Kens mind,
    having to now report to Wayne, even though Roger testified otherwise, would be
    humiliating and embarrassing given the prior roles and responsibilities within
    the company. For these reasons, I find that requiring Ken to return to the
    company in order to mitigate his losses would be unreasonable.

[15]

The appellant argues that the trial
    judges use of the words, in Kens mind, shows that, despite her correct
    self-instruction on the test, she actually took a subjective approach in her
    assessment. The appellant submits that the trial judge did not properly assess
    the circumstances under which Mr. Farwells employment would have continued. In
    assessing work atmosphere, stigma and loss of dignity for the purposes of
    mitigation, the trial judge made no mention of the positive elements in his
    relationship with his employer.

[16]

The appellant points to the
    consensus view of the witnesses that Mr. Farwell was an exemplary
    employee, and to the evidence that Mr. Farwell had previously excelled as
    Purchasing Manager. The employers view was that he was simply mismatched as
    Operations Manager. The appellant also relies on the evidence that Mr.
    Farwells superior repeatedly pressed him to remain with the company, and that
    Mr. Farwell enjoyed a good working relationship with his colleagues and
    commanded respect in the Purchasing Manager role.

[17]

The appellant adds that the
    evidence showed that the dismissal was motivated by economic considerations and
    not by any animus against Mr. Farwell. The appellant had recently adopted a new
    product focus in which Mr. Farwells immediate subordinate was the expert, and
    he was not; the restructuring of its management personnel was a consequence of
    its evolving business model in tough economic times and was not meant to
    stigmatize him.

[18]

The appellant argues that in
    circumstances such as these, where the employers restructuring serves a
    legitimate business interest and is not merely a pretext for terminating an
    employee, an employee like Mr. Farwell should be obliged, as part of his duty
    to mitigate, to return to work for the same employer, at least for the notice
    period, despite the constructive dismissal:
Evans
, at para. 31; and
Davies
    v. Fraser Collection Services Ltd.
, 2008 BCSC 942, 67 C.C.E.L. (3d) 191,
    at para. 43.

[19]

In my view, an employees
    obligation to mitigate by remaining with his or her employer for the period of
    working notice is an aspect of what the law recognizes as efficient breach. Courts
    ought not to discourage efficient breach: see e.g.
Bank of America Canada
    v. Mutual Trust Co.
, 2002 SCC 43, [2002] 2 S.C.R. 601, at para. 31. In
    proper circumstances, the principle of efficient breach can apply to employment
    contracts:
IBM Canada Limited v. Waterman
, 2013 SCC 70, [2013] S.C.J.
    No. 70, at para. 153, Rothstein J., dissenting.

[20]

There may well be merit in the
    appellants argument that the trial judge took a subjective approach in
    assessing work atmosphere, stigma and loss of dignity for the purposes of
    mitigation, rather than the required objective approach. There may also be
    merit in the argument that the circumstances here would support the imposition
    of an obligation on Mr. Farwell to mitigate by working through the notice
    period. But the appellant faces another obstacle, which, in my view, is
    insurmountable. To paraphrase
Evans
, the appellants mitigation argument
    presupposes that the employer has offered the employee a chance to mitigate
    damages by returning to work. To trigger this form of mitigation duty, the
    appellant was therefore obliged to offer Mr. Farwell the clear opportunity to
    work out the notice period
after
he refused to accept the position of Purchasing Manager and told the Appellant
    that he was treating the reorganization as constructive and wrongful dismissal.

[21]

There is no evidence that the appellant
    extended such an offer to Mr. Farwell. Accordingly, Mr. Farwell did not breach
    his mitigation obligation by not returning to work.

[22]

I would dismiss the appeal with costs
    fixed by agreement on a partial indemnity basis at $15,000.00 all inclusive.

Released:  March 7, 2014
    D.D.                            P. Lauwers J.A.

I
    agree Doherty J.A.

I
    agree G. Strathy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Fowlow v. Southlake Regional Health
Centre, 2014 ONCA 193

DATE: 20140314

DOCKET: C56387

Juriansz, Pepall and Strathy JJ.A.

BETWEEN

Anita
Brebant Fowlow, in her Personal Capacity

and as
Estate Trustee for the Estate of

Frederick
Chesley Fowlow, a Deceased; Jonathan

Frederick
Fowlow, and Jennifer Anne-Marie Fowlow

Appellants (Plaintiffs)

and

Southlake
Regional Health Centre and
Dr. Deepak Gupta

Respondent in appeal
(Defendants)

Bernie Romano, for the appellants

Erica J. Baron and Byron Shaw, for the respondent

Heard: March 4, 2014

On appeal from the judgment of Justice David G. Stinson
of the Superior Court of Justice, dated November 19, 2012.

ENDORSEMENT

[1]

This is an appeal from the trial judges dismissal of the appellants
medical malpractice action against the respondent doctor. The appellants are
the estate and family members of the respondents patient who died four days
after undergoing an axillary-femoral bypass operation performed by the
respondent.

[2]

An axillary-femoral bypass involves the insertion of an artificial blood
vessel from the axillary artery to the femoral artery in order to by-pass a
blockage. The respondent used an IMPRA Flex Thinwall graft for the procedure.
The respondent admitted that he did not read the manufacturers Information For
Use (IFU) for the graft, and that he was unaware that the IFU indicated that
the graft was not recommended for an axillary-femoral bypass. The operation
itself was uneventful. Shortly after being discharged from hospital, the
patient died from massive blood loss resulting from the detachment of the graft
from the axillary artery.

[3]

The trial judge found that the respondent failed to meet the standard of
care in several respects: by failing to inform the patient he intended to
install a graft that was expressly not recommended for the procedure and
failing to obtain the patients consent to do so, by failing to be aware of the
manufacturers IFU indicating the graft was not recommended, and by carrying
out the procedure using a graft that was not recommended. However, the trial
judge went on to find that the appellants had failed to meet their burden of
proof to establish a causal connection between the respondents failures and
the death of the patient.

[4]

In his detailed and clearly written reasons, the trial judge said the
appellants, to establish causation, had relied only on the caution in the
manufacturers IFU and the fact that the graft had become detached from the
axillary artery. He pointed out that they led no evidence as to whether the
sutures pulled through the graft, whether the sutures pulled through the
artery, whether the graft itself tore, or whether there was some combination of
these events. The trial judge observed that it was entirely possible that the
detachment of the graft had nothing to do with the quality of the graft itself,
but rather was due to the inability of the patients axillary artery to
maintain the connection. He noted, for example, that patients with advanced
arterial disease may have arteries that are particularly fragile, in which case
the artery walls are weaker and less able to withstand the disruption
associated with the bypass procedure. He added that the patient in this case
had advanced arterial disease.

[5]

In the absence of evidence connecting the detachment to the quality of
the graft, the trial judge concluded that he was unable to draw a causal link
between the respondents failures to meet the standard of care and the death of
the patient.

[6]

On appeal, the appellants submit the trial judge erred by unduly
focusing on the specific mechanism that led to the detachment. In doing so,
they say he required them to establish causation with scientific precision. They
submit he failed to apply the robust and pragmatic approach to causation set
out in
Snell v. Farrell
, [1990] 2 S.C.R. 311, and that he failed to apply
the modified objective test for causation in
Reibl v. Hughes,
[1980]
2 S.C.R. 880 in relation to the issue of informed consent. The appellants
submit it is impossible for them to prove the specific mechanism of the
detachment, and that these cases indicate that it is sufficient that they
established that the respondents use of a thin wall graft materially
contributed to the risk of detachment and that there was a relationship between
the increase in risk and the death of the patient. They also submit that the
trial judge failed to consider whether a reasonable person in the patients
position would have declined treatment, had he been informed of the use of a
not recommended graft.

[7]

We do not agree.

[8]

First, as a factual matter, the trial judge did not accept that the
appellants had established that the use of the IMPRA Flex Thinwall graft
increased the risk of detachment. He said:

Apart from the manufacturer's warning, the plaintiffs were
unable to point to any particular evidence to support the conclusion that the
disruption was due to the quality of the graft employed. They tendered no
evidence from the manufacturer to explain why the warning was included in the
IFU or to indicate any history of problems with that particular manufacturer's
graft in this type of application. It may be that other problems led to the
inclusion of the warning, such as reports of blockages or clotting or kinking
in the tube, to name a few.

[9]

Second, this is not a case for the application of the material
contribution approach. As the Supreme Court of Canada recently pointed out in
Clements
v. Clements
, 2012 SCC 32, [2012] 2 S.C.R. 181, the material contribution
approach may be employed where it is truly impossible to establish but for
causation, and is particularly apt for cases involving multiple tortfeasors.
Not only was there only a single tortfeasor in this case, but the appellants
had not established it was truly impossible for them to satisfy the but for
test. We agree that without evidence from the manufacturer or from a
pathologist who performed or witnessed the post-mortem examination, or at least
evidence of why these witnesses would not be helpful, the impossibility
criterion was not satisfied.

[10]

Third,
the robust and pragmatic approach does not dispense with the requirement that
plaintiffs lead some evidence of causal connection, whether the claim is based
on negligence or on breach of the duty of disclosure. Moreover, the approach is
most robustly applied in cases in which the facts lie particularly within the knowledge
of the defendant. Counsel for the appellant recognizes that the appellants in
this case were equally able to tender evidence from the manufacturer or from a
pathologist who performed or witnessed the post-mortem examination.

[11]

We
do not doubt that the trial judge engaged in a robust and pragmatic analysis of
the evidence. After his careful review, he declined to infer that the
respondents use of a graft contrary to the manufacturers recommendation and
failure to disclose were sufficient, in itself, to establish a causal link to the
patients death. We are not persuaded that he committed a reversible error.

[12]

The
appeal is dismissed. The respondents costs are fixed in the amount of $14,000
all-inclusive as agreed by counsel.

R.G.
Juriansz J.A.

S.E.
Pepall J.A.

G.
R. Strathy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Foster v. Metro Hall, 2014 ONCA 191

DATE: 20140311

DOCKET: C57438

MacFarland, Lauwers and Strathy JJ.A.

BETWEEN

Lori Lee Foster

Appellant

and

Metro
Hall

(Shelter,
Support and Housing Administration properly named City of Toronto)

Respondent

Lori Lee Foster, acting in person

Michele Brady, for the respondent

Heard:  March 5, 2014

On appeal from the order of Justice Spence of the Superior
Court of Justice, dated November 16, 2012.

APPEAL BOOK ENDORSEMENT

[1]

The appeal is dismissed. The final order as signed and entered does
provide that the Application is dismissed without prejudice to Mrs. Fosters
right to bring an action should she be so advised.

[2]

We see no error.  No costs.


COURT OF APPEAL FOR ONTARIO

CITATION: Gray (Re), 2014 ONCA 236

DATE: 20140328

DOCKET: C57109

Laskin, van Rensburg and Hourigan JJ.A.

In
    the Matter of the
Bankruptcy and Insolvency
Act,

R.S.C. 1985, c. B-3, as amended

In
    the Matter of the Bankruptcy of Evan Peter Gray of the

City of Toronto in the
    Province of Ontario

BETWEEN

Canada Mortgage and Housing Corporation

Creditor (Appellant)

and

Evan Gray

Debtor (Respondent)

Kenneth Kraft and Matthew Diskin, for the appellant

Trung Nguyen, for the respondent

Heard: January 29, 2014.

On appeal from the judgment of Justice Herman J. Wilton-Siegel
    of the Ontario Superior Court of Justice, dated April 30, 2013, with reasons
    reported at 2013 ONSC 1986.

van Rensburg J.A.:

Introduction

[1]

This is an appeal from the decision of Wilton-Siegel J. that determined
    that the respondents debt to Royal Bank of Canada (RBC), which had been
    assigned to the appellant Canada Mortgage and Housing Corporation (CMHC),
    would not survive his discharge from bankruptcy.

[2]

This case engages the proper interpretation and application of s.
    178(1)(e) of the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B-3
    (the BIA)

which provides as follows:

178. (1) An order of discharge does not release the
    bankrupt from

(e) any debt or liability resulting from obtaining
    property or services by false pretences or fraudulent misrepresentation, other
    than a debt or liability that arises from an equity claim.

[3]

For the reasons that follow, I would dismiss the appeal.  There was no
    error in the trial judges conclusion that the respondents debt to CMHC would
    not survive his bankruptcy discharge.

Facts

[4]

In 2006, the respondent Evan Gray, an RBC employee, was asked by an
    acquaintance, John Roberts, if he would be willing to co-sign on a mortgage
    application, purportedly to assist a new immigrant who lacked sufficient credit
    history in Canada and was unable to obtain a mortgage.  Roberts told Gray that
    this person would occupy the mortgaged property, would sign a written agreement
    promising to make the payments due under the mortgage, and after a year would
    assume the mortgage and take title to the property.  Roberts told Gray that
    there was no risk because the property could be sold in the event of default,
    and that he would not have agreed to co-sign the mortgage himself if he thought
    there was any risk.

[5]

After Gray agreed to co-sign the mortgage application, Roberts took him
    to meet someone called Mike, who held himself out as a mortgage broker, and
    the two assured him that the type of arrangement they were proposing was common
    and ordinary business practice.  The mortgage application was signed by Gray at
    an RBC branch, where he attended with Mike and met with an RBC mortgage representative.
    Gray did not receive a copy of anything he signed, nor was he given the
    standard charge terms referred to in the mortgage document (and upon which CMHC
    relied in these proceedings).

[6]

Gray and Roberts signed separate mortgage applications, at different
    times and in different places.  Gray provided accurate information about his
    income and employer, while Roberts misrepresented his income and employment on
    his application.  Roberts also submitted an inflated property valuation with
    his mortgage application.  Gray was unaware of Roberts misrepresentations.

[7]

Gray and Roberts purchased the property as tenants in common and RBC
    extended a mortgage loan of $516,370.13.  The mortgage was insured by CMHC.
    The transaction closed in April 2006.

[8]

Gray was paid $2,500 for his participation in the transaction.

[9]

Two months later, Gray was contacted by RBC and told a mortgage payment
    was late. He notified Roberts and Mike, and they picked him up and gave him
    funds to make the payment.  The mortgage payments in the next few months were
    made in a similar fashion.

[10]

In
    July 2006, and before any default had occurred, RBC investigated what it
    believed to be a fraud. Gray co-operated in the investigation.  Grays
    employment was not affected and he remains employed by RBC.

[11]

In
    or about June 2007 Mike stopped making mortgage payments and both Roberts and
    Mike stopped returning Grays telephone calls.  The mortgage subsequently went
    into default.

[12]

In
    November 2007 RBC sued on the mortgage debt and obtained a default judgment
    against Gray and Roberts in the sum of $524,577.34 plus interest.  RBCs
    statement of claim did not allege fraud.  The judgment debt was reduced by the
    net proceeds of sale of the mortgaged property ($331,875.03).  The judgment was
    assigned to CMHC in August 2008.

[13]

CMHC
    enforced the judgment, and Grays wages were garnished to the extent of
    $17,169.39 before he made an assignment in bankruptcy in February 2012.

[14]

In
    April 2012 CMHC moved for a declaration that the outstanding amount of Grays
    debt would not be released by his discharge from bankruptcy under  sections
    178(1)(d) and (e) of the BIA.  (There is no issue on this appeal with respect
    to s. 178(1)(d), and the finding that Gray was not acting in a fiduciary
    capacity when the mortgage funds were obtained.)

[15]

The
    matter came before Wilton-Siegel J. as the trial of an issue.  The evidence
    consisted of the affidavits and oral evidence of the bankrupt Evan Gray and a
    CMHC representative.

Decision in the Court Below

[16]

The
    trial judge concluded that there was no evidence of any misrepresentation by
    Gray that had been relied upon by RBC in advancing the mortgage funds, and
    there was no basis on the evidence for finding that Gray reasonably ought to
    have known of Roberts misrepresentations.  As such, on a strict reading of s. 178(1)(e)
    of the BIA,
[1]
the mortgage was obtained by Roberts fraudulent misrepresentations, in which
    Gray did not participate and about which he neither knew nor reasonably ought
    to have known.

[17]

After
    concluding that this would be sufficient to dispose of the matter, the trial
    judge considered the alternative argument that Gray ought to have known of the
    scheme and ought not to have remained silent on certain matters.  CMHC alleged
    that Gray had fraudulently failed to reveal to RBC that he was not the
    beneficial owner of the property, that he was receiving payment for his
    involvement in the transaction, and that he had no intention to live at the
    property or to personally pay the mortgage.  CMHC argued that if these facts
    had been revealed, RBC would not have advanced the funds and CMHC would not
    have insured the mortgage.

[18]

The
    trial judge rejected these arguments.  Gray and Roberts were the owners of the
    property and were ultimately liable on the mortgage.  Silence about the payment
    Gray received was not a misrepresentation unless it rendered an express or
    implied representation untrue or misleading.  CMHC could not demonstrate any
    such express or implied representation.  With respect to the implied
    representations that Gray intended to occupy the property and personally pay
    the mortgage, the trial judge noted that there was no evidence of any such
    representation either in Grays mortgage application (which was not produced),
    or by reference to RBCs standard charge terms, as there was no evidence that
    Gray had ever received a copy.

[19]

The
    trial judge observed that a fraudulent misrepresentation requires evidence that
    the representor knows that the representation is false or is recklessly
    indifferent to its truth.  There was no evidence that Gray was aware of any
    misrepresentation made before the mortgage was granted.  As for recklessness,
    after considering what Gray knew of the circumstances, the trial judge
    concluded that it was at least as probable that Gray had foolishly trusted
    Roberts and Mike.  Accordingly, CMHC had not established that he was wilfully
    blind or reckless.

ISSUES on Appeal

[20]

The
    principal argument on appeal is that the trial judge did not correctly apply
    the law respecting false pretences, in considering whether the judgment debt
    would survive Grays discharge from bankruptcy under s. 178(1)(e) of the BIA.
    Instead, he limited his analysis to whether Gray had made a fraudulent
    misrepresentation. The appellant asserts that the false pretences in this case were
    that Gray did not inform RBC that he had been paid to participate in the
    transaction, that he had no intention of living in the property, and that he
    did not intend to make the mortgage payments.  It is acknowledged that the
    trial judge reviewed these circumstances in his analysis of fraudulent
    misrepresentation; the appellant argues that the judge failed to consider the
    separate question of whether Gray had used false pretences in connection with
    the borrowing.  The appellant relies on the Manitoba Court of Appeals decision
    in
Ste. Rose & District Cattle Feeders Co-op v. Geisel
, 2010 MBCA
    52, with respect to the proper interpretation of false pretences in the context
    of s. 178(1)(e) of the BIA.

[21]

The
    appellant also asserts that the trial judge ignored the straw borrower scheme
    in his analysis.  As a straw borrower, Gray was not entitled to be treated as
    an honest but unfortunate debtor, such that the debt incurred as a result of
    the fraudulent mortgage would be released upon his discharge from bankruptcy.

[22]

There
    are other arguments on appeal  that the trial judge erred in his articulation
    and application of the tests for wilful blindness and recklessness in
    considering whether Gray was party to Roberts fraudulent misrepresentations,
    and that the trial judge erred in failing to conclude that certain provisions
    of the standard charge terms were false representations made by Gray.

[23]

The
    respondent asserts that there was no error in the trial judges analysis, which
    was based on findings of fact that were supported by the evidence and not
    challenged on appeal.  The evidence supported the conclusion that the mortgage
    was granted in reliance on Roberts misrepresentations, and not as a result of
    anything Gray represented in his mortgage application.  There was no evidence
    of any reliance on any representation by Gray that led to the mortgage
    advance.  The crux of the matter was Grays knowledge or ignorance of the
    fraudulent scheme.  Gray was unaware that he was being used by Roberts as an
    unwitting straw buyer in a mortgage fraud, and the trial judge on the
    evidence concluded that he was not wilfully blind or reckless.  As such, CMHC did
    not establish that the judgment debt was a debt or liability resulting from
    obtaining property by false pretences or fraudulent misrepresentation, as
    required by s. 178(1)(e) of the BIA.

Analysis

[24]

Section
    178(1) of the BIA preserves certain types of claims from a bankrupts order of discharge.
    They are exceptions to the general rule of discharge and should be addressed
    accordingly:
Simone v. Daley
, [1999] O.J. No. 571 (C.A.), at para. 28.
    The onus is on the creditor who seeks to have the debt or liability survive the
    discharge of the bankrupt to bring it within one of the provisions of s. 178(1).

[25]

It
    is instructive to examine more closely subsections 178(1)(d) and (e), the two
    provisions dealing with a bankrupts fraud.  They provide as follows:

178.
(1) An order of discharge does not
    release the bankrupt from

(d) any debt or liability arising
    out of fraud, embezzlement, misappropriation or defalcation while acting in a
    fiduciary capacity or, in the Province of Quebec, as a trustee or administrator
    of the property of others;

(e) any debt or liability resulting
    from obtaining property or services by false pretences or fraudulent
    misrepresentation, other than a debt or liability that arises from an equity
    claim;

[26]

Section
    178(1)(d) preserves from discharge a debt or liability
arising
    out of fraud, embezzlement, misappropriation or defalcation of the bankrupt
    while acting in a fiduciary capacity.  Its application is restricted to
    bankrupts acting in a fiduciary capacity.  As such, a debt or liability
    arising out of the fraud of a debtor who was not acting in a fiduciary
    capacity would fall outside the scope of this section and would need to be
    considered under s. 178(1)(e).

[27]

Section 178(1)(e) preserves from discharge a debt or liability resulting
    from obtaining property or services by false pretences or fraudulent
    misrepresentation.

[28]

The reasons of the trial judge demonstrate that he was alive to the
    specific wording of this section when he concluded at para. 44 of his decision:

On a strict reading of [section 178(1)(e)], this
    conclusion is sufficient to determine the issue on this application.  The
    Mortgage was obtained by Roberts fraudulent misrepresentations that constitute
    the Misrepresentations.  Gray did not participate in the making of the
    Misrepresentations and neither knew, nor reasonably ought to have known, of
    them.

[29]

The appellant acknowledges that in order for there to be a fraudulent
    misrepresentation there must be reliance by the party to whom the
    representation is made, and that in the present case the trial judge noted that
    it was not disputed that the mortgage was obtained in reliance on Roberts
    misrepresentations.  The trial judge concluded that Gray did not know, nor ought
    he reasonably to have known, of the misrepresentations made by Roberts, that led
    to the mortgage funds being advanced.

[30]

The appellant contends however that the trial judge failed to consider
    the false pretences branch of s. 178(1)(e).  It is asserted that the false
    pretences consisted of Grays participation in the straw borrower scheme,
    knowing that he was not going to live in the house, and failing to reveal this
    fact, as well as the payment he was receiving for his involvement when the
    mortgage was advanced.

[31]

There is a fatal flaw in the appellants argument.  Irrespective of
    whether one considers fraudulent misrepresentation or false pretences, s.
    178(1)(e) requires a finding that the bankrupt obtained property by such
    conduct.  A causal connection between the bankrupts wrongdoing and the
    creation of the debt or liability is required.  It is not sufficient that the bankrupt
    engaged in fraud, or that the debt or liability arose out of a fraudulent
    scheme.  The trial judge in this case concluded that the mortgage funding was
    obtained by Roberts fraudulent misrepresentations, and not as a result of what
    Gray represented or failed to disclose to RBC.

[32]

Since
    the appellant relies heavily on the decision of the Manitoba Court of Appeal in
Ste. Rose & District Cattle Feeders Co-op v. Geisel
,

an
    examination of that case is warranted.

[33]

In
Geisel
there were two debtors, a father and a son, against whom the
    plaintiff Co-op had obtained a default judgment before both went bankrupt.  The
    father had borrowed money from the Co-op, and agreed to use the funds to
    purchase cattle, and to brand the cattle with the Co-ops brand.  The father
    was to notify the Co-op when the cattle were taken to auction, and to repay the
    borrowing from the proceeds of sale.  Ultimately, the cattle, which had not
    been branded with the Co-ops name, were transported and sold at auction in the
    name of the son.  The proceeds were deposited into the sons bank account,
    where they were seized by one of his creditors.  There was no intention to
    defraud the Co-op; rather the scheme was put in place by the two men for tax
    reasons, and with the expectation that the proceeds would be used to repay the
    fathers borrowing.

[34]

There
    was no fraud on the part of the father and no involvement by the son  in
    connection with the original borrowing, factors that led the trial judge to
    refuse relief under s. 178(1)(e) on the basis that the debt was not property
    obtained by fraudulent misrepresentation or false pretences.

[35]

This
    decision was overturned on appeal, with the Manitoba Court of Appeal holding
    that the judgment debt survived the bankruptcy discharges of both father and
    son.

[36]

The
    appeal court noted that, while there was no apparent fraud in the original
    borrowing, at the later stage where both debtors knowingly diverted the
    proceeds of sale of the cattle to the wrong bank account, there was fraud on
    the part of the father and false pretences on the part of the son.  The father
    knowingly withheld relevant information from the Co-op when he advised that the
    cattle would be sold, but not that they would be sold in his sons name with
    the proceeds deposited into the sons account.  This was a fraudulent
    misrepresentation relied on by the Co-op to its detriment.  The false pretences
    were on the part of the son when he falsely held out to the transport driver
    and auctioneer that the cattle were his to sell.  He obtained the property of
    the Co-op (the proceeds of sale of the cattle) by pretences which he knew to be
    false.

[37]

The
Geisel
case does not stand for the general proposition urged upon us
    by the appellant  that a debtors false pretences are sufficient to exempt a
    debt from discharge, even where there is no causal link between the debt or
    liability sought to be preserved and the false pretences of the bankrupt.  In
Geisel
there could be no misrepresentation by the son to the Co-op, because the
    son had no dealings or relationship with the Co-op.  What was key was that the
    son had obtained from the auctioneer the Co-ops property (the proceeds of the
    sale of the cattle at auction) by pretences he knew to be false.  He had
    represented that he was the owner of the cattle.

[38]

In the present case, the trial judge referred to the
Geisel
decision
    and he cited that courts approval of the observation in
Buland
    Empire Development Inc. v. Quinto Shoes Imports Ltd.
, [1999]
    O.J. No. 2807 (C.A.), at para. 14, that the core content of both false
    pretences and fraudulent misrepresentation is deceitful statements.  He
recognized that both false pretences and fraudulent misrepresentation involved
    the question of whether Gray had made a deceitful statement that led RBC to
    advance the mortgage funds.  The trial judge considered the very circumstances that
    the appellant contends were false pretences and he concluded that they did not
    amount to a fraudulent misrepresentation on the part of Gray.

[39]

The
    wording of section 178(1)(e) makes it clear that the debt or liability must
    result from obtaining property or services by false pretences or fraudulent
    misrepresentation.  The trial judge concluded that the money was advanced by
    RBC as a result of Roberts misrepresentations, and not as a result of anything
    Gray said or failed to say or do.  This was a finding of fact that is
    determinative of both the false pretences and fraudulent misrepresentation
    aspects of s. 178(1)(e) as applied to this case.

[40]

Finally,
    while it is correct to say that the bankruptcy scheme is intended to benefit
    honest, but unfortunate, debtors (see
Re Giannotti
(2000), 138 O.A.C.
    316, at para. 11, cited with approval in
Geisel
), it is not sufficient
    to show that there was a false pretence or fraudulent misrepresentation unless
    it is also shown that the property (in this case the mortgage funding) was
    obtained thereby. While the
Geisel
case referred to this interpretive
    principle, in concluding that the debtors motives and intentions to repay the
    Co-op were not relevant, the court nevertheless found in that case that
    property had been obtained by each of the debtors by their fraudulent
    misrepresentation or false pretences.

[41]

Having
    dealt with the principal arguments on appeal, I will address briefly the
    appellants other submissions.

[42]

The
    appellant argues that the trial judge erred in his articulation and application
    of the tests for wilful blindness and recklessness, and that he had ignored
    obvious red flags that should have alerted Gray to the deception perpetrated
    by Roberts.  I disagree.  The trial judge correctly set out the test and he
    made findings of fact at paras. 65 to 69 of his reasons.  He concluded that
    Gray did not know about Roberts misrepresentations or the mortgage fraud in
    which he was engaged.  He considered and determined the weight to be given to
    the bankrupts reasons for not making further inquiries when confronted by red
    flags.  The question was whether Gray was wilfully blind to (and therefore
    participated in) the fraud that led to the advance of the mortgage funds.  There
    was no error in the trial judges analysis and conclusion that, with respect to
    whether the bankrupt was wilfully blind, it was at least as probable that Gray
    foolishly trusted Roberts and Mike beyond a point that was reasonable, based on
    his lack of experience and vulnerability to manipulation.

[43]

The
    appellant also submits that the trial judge erred in failing to find that the
    standard charge terms incorporated by reference into the mortgage agreement
    constituted representations by Gray that he knew to be false (that the
    borrowers would be living in the house and that no one else had an interest in
    the property).  While I would not necessarily agree with the trial judges
    characterization of such terms as covenants and not representations, I would
    not interfere with his conclusion that, in the absence of evidence that the
    standard charge terms were provided to Gray, he could not be said to have made
    the representations fraudulently.  This is not to say that the standard charge
    terms did not apply to the borrowing, if they were incorporated by reference
    into the mortgage documents signed by Gray, even if he did not receive them;
    only that the necessary intentional requirement for fraudulent
    misrepresentation could not be established in the absence of showing that Gray
    had knowingly made the representation.  Accordingly, this argument on appeal
    cannot succeed.

[44]

Finally,
    I disagree with the appellants submission that the trial judges decision
    condones the straw man debtor scenario.  It was necessary for the trial judge
    to examine all of the circumstances to determine whether in this case, the
    debtor who was a straw man in the borrowing, had obtained funds from RBC by
    false pretences or fraudulent misrepresentation.  The trial judge correctly
    identified the relevant legal principles and he applied them to the facts as he
    found them.  For the purposes of s. 178(1)(e), it was not sufficient to find
    that the debtor made some type of misrepresentation or engaged in some type of
    false pretence without also finding that the conduct in question led to the
    judgment debt.

Conclusion

[45]

For
    these reasons, the appeal is dismissed.  Costs of the respondent are payable by
    the appellant and fixed at $10,000, inclusive of disbursements and applicable
    taxes.

Released: March 28, 2014

(JL)
    K. van Rensburg J.A.

I agree John Laskin J.A.

I agree C.W. Hourigan J.A.

[1]
Although the formal reasons refer (at para. 44) to s. 178(1)(d), it is apparent
    from the context that the trial judge intended to refer to s. 178(1)(e).


COURT OF APPEAL FOR ONTARIO

CITATION: Gupta v. Garg, 2014 ONCA 217

DATE: 20140321

DOCKET: C57894

MacFarland, Rouleau and Lauwers JJ.A.

BETWEEN

Nidhi Gupta

Plaintiff (Appellant)

and

Naveen Garg, Devinder Garg, and Sudesh Garg

Defendants (Respondent)

Jaret N. Moldaver, for the appellant

Christine Vanderschoot, for the respondent Naveen Garg

Heard: Friday, March 7, 2014

On appeal from the order of Justice David Price of the Superior
    Court of Justice, dated October 15, 2013.

APPEAL BOOK ENDORSEMENT

[1]

There is no conflict in the evidence that this marriage was never
    consummated. The parties are agreed on that fact. Each blames the other. The
    application Judge erred in concluding there had to be independent evidence of
    incurability.

[2]

It is a reasonable inference from the evidence that the respondent is
    psychologically unable to consummate this marriage to this woman and that is
    sufficient for an annulment to be granted.

[3]

The order of the application judge is set aside and in its place an
    order will issue granting an annulment of the marriage between the appellant
    and the respondent, Naveen Garg which marriage took place on July 3, 2010.


COURT OF APPEAL FOR ONTARIO

CITATION: Heard v. Heard, 2014 ONCA 196

DATE: 20140317

DOCKET: C56716

MacPherson, Cronk and Gillese JJ.A.

BETWEEN

Catherine Heard

Applicant

(Appellant in appeal)

and

Garry Heard

Respondent

(Respondent in appeal)

James D. Singer, for the appellant

T.G. Reczulski, for the respondent

Heard: February 28, 2014

On appeal and cross-appeal from the order of Justice Peter
    Z. Magda of the Superior Court of Justice, dated February 7, 2013.

By the Court:

[1]

The parties were married on September 18, 1982, and separated on
    November 1, 2009.  There are two children of the marriage: Kaitlyn Heard, born
    on March 4, 1996, and Natalie Heard, born on March 17, 1998.  The children
    reside primarily with the wife, Catherine Heard.

[2]

In the fall of 2011, both parties brought motions in the Superior Court
    to resolve child and spousal support issues, as well as payment of the
    childrens extraordinary expenses under s. 7 of the
Federal
Child
    Support Guidelines
, S.O.R./97-175
.
    The motions judge ordered the trial of an issue regarding all disputed
    financial issues.  On October 5, 2011, the parties agreed on five issues for
    trial: (1) imputation of income to the husband; (2) child support and apportionment
    of s. 7 expenses; (3) spousal support payable by the wife; (4) property issues,
    including the sale of the matrimonial home and equalization; and (5) financial
    adjustments between the parties.

[3]

The wife appeals from the trial judges ruling regarding equalization of
    net family property and his order that each party bear their own costs of the trial.
    The husband cross-appeals from the trial judges imputation of income to him
    for the purpose of support and s. 7 expense obligations, and from the trial
    judges dismissal of his spousal support claim against the wife.

A.      Appeal

(1)

Alleged Equalization Errors

(a)

The Limited Partnership Issue

[4]

The wife argues that the trial judge erred in his ruling on equalization
    of net family property by attributing the total post-separation losses
    sustained in a limited partnership investment in First Leaside Securities (the
    LP Investment) to her.

[5]

The wife contends that the LP Investment was treated by the parties as a
    joint asset throughout their marriage and after separation.  In the
    alternative, she submits that she held the LP Investment in trust, before and
    after separation, for the joint benefit of the parties.
[1]
On either basis, she contends that she alone should not bear the post-separation
    losses in the LP Investment (approximately $164,071 (U.S.)), as the trial judge
    held, but rather, such losses should be shared equally by the parties.  Citing
    this courts decision in
Serra v. Serra
, 2009 ONCA 105, 93 O.R. (3d)
    161, the wife maintains that the trial judges treatment of these losses
    produced an unconscionable equalization of net family property.

[6]

We reject these arguments.

[7]

In our view, in the face of the trial judges factual findings, the
    wifes attack on the trial judges treatment of post-separation losses in the
    LP Investment is unsustainable.

[8]

The trial judge considered, in detail, the wifes claim that the parties
    treated the LP Investment as a joint asset throughout their cohabitation and
    following separation.  He also addressed the wifes contention that the LP
    Investment was impressed with a trust in favour of both parties.  In rejecting
    these claims, the trial judge made the following key findings:

1)

at
    all material times, the wife was the sole registered owner of the LP Investment;

2)

the
    wife was not constrained by the husband from dealing with the LP Investment,
    either before or after separation.  The wife controlled the LP Investment and
    was free to deal with it as she saw fit, without interference by the husband;

3)

the
    wife benefited from her ownership of the LP Investment by receiving various
    income tax refunds in respect of claimed losses in the LP Investment both
    before and after separation;

4)

the
    wife acknowledged that she intended to utilize the full value of the LP
    Investment, post-separation, to finance her acquisition of the husbands
    interest in the former matrimonial home; and

5)

when
    the parties were unable to agree on the husbands

support obligations following  separation, the wife unilaterally
    elected to refrain from selling or otherwise dealing with the LP Investment
    until the support dispute was resolved.

[9]

These critical findings were open to the trial judge on this evidentiary
    record.  They are dispositive of the wifes claims that the LP Investment was a
    joint asset of the parties or that it was impressed with a trust in favour of
    both parties.  They establish that the wife had legal title to the LP
    Investment and that she controlled and used it for her own benefit after
    separation.  These facts are inconsistent with the characterization of the LP
    Investment as a joint or trust asset.

[10]

The
    parties spent some time in their submissions on appeal addressing the
    significance of the wifes failure to expressly plead her trust claims
    concerning the LP Investment.  In our view, at this stage, this factor is
    irrelevant.  The trial judge allowed the wife to lead evidence in support of
    her trust claims and the parties had full opportunity to argue the trust issues
    at trial.  In these circumstances, no procedural unfairness arose from the
    pleadings issue.  Further, the trial judge considered the evidence and the
    parties submissions on the trust issues and concluded, on the merits, that the
    evidence failed to establish the trust arrangements alleged by the wife.  This
    was his call to make.

[11]

It
    is true, as the wife emphasizes, that the parties shared equally in the monthly
    funds generated by the LP Investment during their marriage and that the husband
    continued to receive one-half of these monthly funds after separation.

[12]

However,
    this aspect of the parties conduct concerning the LP Investment is not
    determinative of its essential nature.  As the trial judge held, the wifes legal
    ownership of the LP Investment entitled her to deal with it as she saw fit.
    The evidence at trial, accepted by the trial judge, established that she in
    fact did so by deriving income tax benefits associated with losses in the LP
    Investment both before and after separation, and by unilaterally determining,
    post-separation, when and if the LP Investment would be sold.  Moreover, on her
    own admission, the wife intended to derive exclusive benefit from the LP
    Investment post-separation, by using it to facilitate her purchase of the husbands
    interest in the former matrimonial home.

[13]

Simply
    put, the wifes own conduct in relation to the LP Investment belies her efforts
    to now characterize the LP Investment as a joint or trust asset.

[14]

Nor
    does the wifes invocation of
Serra
assist her.  As the trial judge
    pointed out, at para. 75(b) of his reasons:

In
Serra
, the husband was bound by an order
    prohibiting him from disposing of the business asset.  In the case before me,
    the applicant was never subject to any order restraining her from disposing of
    the FL Partnership investment.  As late as August of 2011, the applicant could
    have sold the investment and received full market value.  From the evidence, it
    was she who, in January 2010, refused to have any further dealings with
    property until support was settled to her satisfaction.  I agree that the
    applicant chose to retain this asset and must suffer the consequences of so
    doing.

We agree.

[15]

This
    ground of appeal fails.

(b)

The Notional Tax Rates Issue

[16]

The
    wife also submits that the trial judge erred in his equalization of net family
    property analysis by applying a notional tax rate of 20.7% to the taxable
    assets of both parties (principally, to the husbands registered retirement
    savings plan and the wifes pension).

[17]

We
    do not accept this submission.

[18]

At
    trial, the wife relied on tax tables prepared by a pension valuator  DSW
    Actuarial  to argue that divergent tax rates (28.4% for the wife and 18% for
    the husband) should be applied to determine the net value of their respective
    taxable assets.

[19]

The
    trial judge disagreed.  He held, among other matters, that there was no
    admissible evidence before him establishing that divergent notional tax rates
    should apply.  We see no error in his ruling on this issue.

[20]

The
    wife led no expert evidence regarding the issue of applicable notional tax
    rates, or the parties respective projected incomes on retirement.  And, as the
    trial judge observed, the wife herself was not qualified to offer evidence on
    income-tax related projections or tax rates.

[21]

Even
    if it was open to the wife to rely on the income tax rates included in the DSW
    Actuarial report, the wife herself applied a notional tax rate of 20.7% to the
    parties respective registered retirement savings plans in various of her financial
    statements.

[22]

It
    was open to the trial judge to determine, as he did, whether the whole of the
    evidence satisfied him of the appropriateness of the notional tax rates urged
    by the wife.  He concluded that it did not.  In the circumstances described above,
    the trial judge cannot be faulted for declining to apply divergent tax rates to
    the parties taxable assets.

(2)

Trial Judges Costs Award

[23]

The
    wife argues that in ordering each party to bear their own costs of the trial,
    the trial judge erred by failing to take into account the offers to settle
    exchanged by the parties prior to trial.  Her main contention is that the
    results she achieved at trial were better than the resolutions she proposed on
    key issues in her offer to settle.  As a result, she says, she was entitled to
    her costs of the trial.

[24]

The
    trial judge dealt with the issue of costs at para. 104 of his reasons:

Success in this case was divided and I am not inclined to
    consider making an award for costs either way.  The parties both sustained considerable
    financial loss with the post-separation collapse of First Leaside.  Adding now
    a further financial burden would not be fair to either party.  Consequently,
    the court uses its discretion and orders that each party shall bear their own
    costs.  [Citations omitted.]

[25]

The
    reasons do not expressly indicate whether the trial judge considered the
    parties offers to settle when assessing costs.  To the extent that the trial
    judge failed to take account of these offers to settle, we agree that he erred.

[26]

That
    said, on the results achieved at trial and in light of our disposition of the other
    issues on appeal, set out above, success at trial was divided.  The results
    achieved by the wife at trial on spousal and child support issues were more
    favourable to her than had been proposed by her in her offer to settle.
    However, the wife was unsuccessful at trial in respect of the contested
    equalization payment issues, and the results achieved by the husband on these
    issues were materially better than had been proposed in the wifes offer to
    settle.  In addition, we have already concluded that the wifes challenge to
    the trial judges equalization payment ruling must be dismissed.

[27]

In
    these circumstances, the trial judge did not err in principle in his costs
    award.  Nor, in our view, is his costs award plainly wrong.  Accordingly, there
    is no basis for appellate interference with his discretionary costs award.

[28]

For
    these reasons, the appeal is dismissed.

B.      The Cross-Appeal

(1)     The Imputation of
    Income and Section 7 Expense Issues

[29]

The
    husband contends on his cross-appeal that the trial judge erred by imputing the
    following income to him: 2010 - $60,000; 2011 - $70,000; and 2012 - $80,000.
    He does not take issue with the imputation of income of $50,000 for 2009.

[30]

At
    trial, the wife advanced several methodologies for imputing income to the
    husband.  The trial judge rejected them all, but still imputed income.  He
    reasoned, at para. 32:

Although I find the applicants methodology flawed, in that
    each approach, on its own, was insufficient to impute income to the respondent
     it is the cumulative effect of all of her approaches that provides a
    sufficient evidentiary base for me to consider the imputation of income, in a
    greater amount than the respondent admits to in his testimony and his financial
    statements.

[31]

We
    agree with the husband that this is not a proper basis for imputing income.  A
    series of rejected methodologies cannot, by rolling them together, become a
    valid methodology.  Four nos (by our count) do not make a yes.

[32]

However,
    there are other factors, discussed and relied on by the trial judge, that
    support his decision to impute income to the husband in the amounts he chose.

[33]

An
    important factor is the trial judges rejection of the husbands credibility on
    the income issue.  He said, at paras. 33 and 34 of his reasons:

The respondent admitted at trial, as he has throughout the
    proceedings, that he has filed false income tax returns with the Canada Revenue
    Agency.  He admitted that he collected employment insurance for about one year
    when he had income which he did not disclose, which would have disentitled him,
    and that he did not remit GST on a number of inspection payments made to him.

I find that the respondents actions are deceitful, fraudulent,
    and unlawful.  His unlawful conduct does negatively impinge on his credibility
    and if he is prepared to hide income from the authorities, he may well be
    hiding income from the court .

[34]

A
    second factor that supports the trial judges conclusion on this issue is the reliance
    he placed on the husbands lifestyle.  We cite but one example, at para. 49 of
    the trial judges reasons:

Since separation, he has taken some exotic vacations including
    a trip to Fiji and Australia.  He drives a BMW X5 which he paid for in cash and
    leases a Porsche Boxter for $575.00 per month.

[35]

In
    our view, these factors  credibility and lifestyle  taken together amply
    support the trial judges decision to impute income to the husband, and in the
    amounts he chose.

[36]

Based
    on the income imputed to the husband, we also see no error in the trial judges
    ruling that the husband shall pay 40% of the childrens s. 7 extraordinary
    expenses on a going forward basis.

(2)     The Spousal
    Support Issue

[37]

The
    husband argues that the trial judge erred by not awarding him spousal support.

[38]

The
    trial judge stated his conclusion on this issue in this fashion, at para. 50 of
    his reasons:

I find that the respondent has not suffered any economic
    disadvantage arising from the marriage or its breakdown.  If there is any disadvantage
    in this regard, it would be to the applicant who now only has her own income
    and a modest amount of child support to look after herself and two teenage
    daughters who live with her.  The respondent has not suffered any economic
    hardship arising from the breakdown of the marriage.  The respondent is
    self-sufficient and in my view is doing quite well in the home inspection
    business.

[39]

A
    trial judges decisions as to whether to award spousal support, and as to the
    quantum of spousal support, are discretionary decisions.  An appellate court
    should not interfere with these determinations absent an error in principle, a
    significant misapprehension of the evidence, or unless the order is clearly
    wrong: see
Hickey v. Hickey
, [1999] 2 S.C.R. 518, at para. 11.

[40]

In
    our view, the husband cannot bring the trial judges decision on spousal
    support within any of these categories.  There is no basis for appellate
    intervention.

[41]

Accordingly,
    the cross-appeal is dismissed.

C.      Costs of the Appeal and Cross-Appeal

[42]

Success
    on the appeal and cross-appeal is divided.  In these circumstances, we make no
    award of the costs of these proceedings.

Released:  MAR 17 2014                            J.C.
    MacPherson J.A.

EAC                                                          E.A.
    Cronk J.A.

E.E. Gillese J.A.

[1]
Before this court, the wife does not argue, as she did at trial, that she held
    the LP Investment in trust for the husband alone.


COURT OF APPEAL FOR ONTARIO

CITATION: Ince (Re), 2014 ONCA 211

DATE: 20140319

DOCKET: C57507

Doherty, Laskin and Feldman JJ.A.

IN THE MATTER OF:  MELVILLE
    INCE

AN APPEAL UNDER PART
    XX.1 OF THE
CODE

Michael Davies,
as amicus curiae

Deborah Calderwood, for the Crown

Melanie de Wit, for Ontario Shores Centre for Mental
    Health Sciences

Michele Warner, for the Centre for Addiction and Mental
    Health

Heard:  March 18, 2014

On appeal against the disposition of the Ontario Review
    Board, dated July 16, 2013 and the reasons for disposition dated July 30, 2013.

APPEAL BOOK ENDORSEMENT

[1]

The appellant is not here having chosen not to attend.  The appeal is
    dismissed as abandoned.


COURT OF APPEAL FOR ONTARIO

CITATION: Indcondo Building
    Corporation v. Sloan, 2014 ONCA 201

DATE: 20140317

DOCKET: C57481

MacFarland, Lauwers and Strathy JJ.A.

BETWEEN

Indcondo Building Corporation

Plaintiff (Respondent)

and

Valerie Frances Sloan, David Robin Sloan and Cave
    Hill Properties Ltd.

Defendants (Appellants)

Philip P. Healey and Vedran Simkic, for the appellants

Trung S. Nguyen, for the respondent

Heard:  March 5, 2014

On appeal from the order of Justice David M. Brown of the
    Superior Court of Justice, dated July 12, 2013.

ENDORSEMENT

[1]

The appellants appeal the motion judges decision on their motion to amend
    their Statement of Defence, issue a Third Party claim and discharge certain
    Certificates of Pending Litigation (CPLs).

[2]

We agree with the motion judges decision and for the reasons he gave on
    the first two issues.

Amendments to Statement of Defence

[3]

As for that part of his order limiting the appellants rights of discovery
    and production in relation to the state of mind amendments he did allow, not
    only do we agree with his reasons, we note, as he did in paragraph 20 of his
    reasons, counsel for the appellant agreed that in relation to those amendments,
    there would be no need for discovery and production.

[4]

We agree that the limitation defence now proposed is the same argument
    made before Morawetz J. which this court rejected in 2010. Paragraph 3 of the
    reasons of Karakatsanis J.A. (as she then was) make it perfectly clear that the
    argument advanced in this court today is the very argument this court rejected
    then.

The Third Party Claim

[5]

The solicitors negligence plea is irrelevant to the issues raised in
    this s. 38 proceeding and in the same vein the Third Party Notice was properly
    declined in relation to the solicitor and to those proposed third parties who
    were co-defendants along with the appellant, David Robin Sloan in the 1992
    action.

The CPLs

[6]

The appellants seek to challenge the validity of the CPLs on the ground
    of non-disclosure.  We do not agree with the motion judge that he lacked
    jurisdiction to consider the motion to discharge the CPLs in view of the order
    of this court restoring the CPLs following the reversal of the order of
    Morawetz J. The CPLs were restored by order of this court simply because they
    had been discharged by that order and this court reversed that decision.
    Neither the decision of Morawetz J. nor the decision of this court
    addressed the validity of the CPLs on the ground of non-disclosure. In our
    view, no court has as yet squarely dealt with the issue.
Res judicata
therefore does not apply.

[7]

This court does not have original jurisdiction and we would not consider
    this issue as a matter of first instance. In our view, it would be open to the
    appellants to bring such a motion before the case management judge to be heard
    in such manner as he may direct, including at trial, in view of the imminent
    trial date of May 26
th
, 2014.

[8]

In all other respects the appeal is dismissed. Costs to the respondent
    fixed in the agreed amount of $5000 inclusive of disbursements and HST.

J. MacFarland J.A.

P. Lauwers J.A.

G.R. Strathy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: J.H. v. B.S., 2014 ONCA 179

DATE: 20140307

DOCKET: C56135

MacFarland, Rouleau and Lauwers JJ.A.

BETWEEN

J. H.

Appellant

and

B. S.

Respondent

J. H., acting in person

B. S., acting in person

Heard and released orally:  March 3, 2014

On appeal from the judgment of Justice Wendy L.
    MacPherson of the Superior Court of Justice, dated September 11, 2012.

ENDORSEMENT

[1]

The appeal is dismissed.

[2]

The main ground of appeal relates to the trial judges treatment of the
    childs statement about inappropriate sexual conduct she has said to have
    observed at her mothers home. Justice MacPherson dealt with this ground of
    appeal at paras. 51 through 59 of her reasons and we see no error. As she
    noted, the appellants concerns were investigated fully by the Childrens Aid
    Society and they had no protection concerns and closed their file.

[3]

As the appeal judge noted, it was apparent that a joint parenting arrangement
    was no longer feasible here. The fresh evidence filed relates to matters that
    have occurred since Justice Sherwoods order of December 16, 2011. Nothing in
    the fresh evidence calls into question the appropriateness of the original
    order. This court has no original jurisdiction and we are concerned only with
    the correctness of the orders already made in the courts  below.  If J.H. is of
    the view that circumstances have changed since the order of Justice Sherwood,
    he is free to bring a motion to deal with that change to the Ontario Court of
    Justice.

[4]

Costs to the respondent fixed in the sum of $500 inclusive of
    disbursements and HST.

J. MacFarland J.A.

Paul Rouleau J.A.

P. Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kalra (Re), 2014 ONCA 233

DATE: 20140327

DOCKET: C57583

Doherty, Laskin and Feldman JJ.A.

IN THE MATTER OF:  GAURAV
    KALRA

AN APPEAL UNDER PART
    XX.1 OF THE
CODE

Gaurav Kalra, appearing in person

Anita Szigeti and Jill R. Presser,
as amicus curiae

Michael Fawcett, for the Crown

Heard:  March 19, 2014

On appeal against the disposition of the Ontario Review
    Board, dated September 6, 2013.

ENDORSEMENT

[1]

The appellant was found NCR in 2010.  He has resided in the Secure
    Treatment Unit at the Brockville Mental Health Centre (Brockville Hospital) since
    2011.  The appellant suffers from schizophrenia.

[2]

The index offences involved the harassment of a former high school
    classmate.  While the offences were serious and no doubt terrifying for the
    victim, the appellants conduct did not involve personal violence.  He has no
    other criminal involvement.  The appellants mental disorder manifests itself
    primarily in non-violent and passive conduct.

[3]

The appellant has progressed well in the Brockville Hospital.  He
    continues, however, to lack insight into the nature of his disorder.  There is
    a risk that he would not comply with his medication requirements if he were living
    outside of the hospital.  The appellants parents, while loving and fully supportive
    of their son, lack a full appreciation of the nature his problems.

[4]

At the hearing, the medical staff took the position that the Board should
    make a detention order with a condition allowing the appellant to reside with
    his parents if the medical staff agreed.  The medical staff favoured a
    detention order primarily because the appellant was undergoing a drug treatment
    program involving a gradual reduction in the levels of the anti-psychotic
    medication the appellant was taking.  The aim of the program was to both
    determine the appropriate level of medication for the appellant and demonstrate
    to the appellant his need for the medication.  The medical staff believed that the
    appellant should remain under a detention order so that the hospital could
    closely monitor him as his medication was being reduced and, if necessary,
    adjust that medication.  The staff further believed that there would be a
    significant risk to the public if the drug reduction program were continued
    while the appellant was living in the community under an order that was less
    restrictive than a detention order.

[5]

The Board found that the appellant constituted a significant threat to
    the safety of the public.  The Board also agreed with the medical staff that in
    light of the drug reduction program, a detention order was necessary.  However,
    the Board declined to include a term allowing the appellant to live with his
    parents if the hospital staff agreed.  The Board said:

Given that the hospital is embarking on what is described in
    the hospital report, page 24, as a medication holiday to prove to Mr. Kalra
    that he either does or does not have a mental illness, the Board finds that it
    is too great a risk to the public to allow the privilege of overnight visits
    with his parents or the privilege to live in the community in approved
    accommodation.

[6]

Amicus
argues that the evidence did not establish that the
    appellant posed a significant threat to the safety of the public and that the
    Board should have ordered an absolute discharge.  Alternatively, she submits
    that a conditional discharge allowing the appellant to live with his parents
    was the least onerous and least restrictive disposition available on the
    evidence.

[7]

We are satisfied that there was
    evidence upon which the Board could conclude that the appellant
posed
    a significant threat to the safety of the public.  The appellants conduct that
    led to the NCR finding, the nature of his mental disorder, his lack of insight
    and the concerns that he would not comply with medication requirements, taken
    together, provide a basis for a determination that the appellant posed a
    significant threat to the safety of the public.

[8]

The Board did not explore in any detail the question whether the
    appellant posed a significant risk to the safety of the public.  This is
    understandable as it was conceded before the Board that the evidence was
    sufficient to clear the significant threat threshold.  The Boards
    determination that the appellant posed a significant threat to the safety of
    the public was reasonable on this record.

[9]

We do, however, agree with the second submission of
amicus
.  The
    Board erred in failing to impose a conditional discharge.  As we read the
    Boards reasons, it imposed a detention order because of the risk posed to the
    community were the appellant to be in the community while undergoing the drug reduction
    program instituted by the hospital.  With respect, restrictions on the
    appellants liberty cannot be justified on the basis of a risk created by a
    course of treatment which, while appropriate within the hospital, is viewed as
    inappropriate in the community.  The Board should have considered the nature of
    the risk posed by the appellant by reference to treatments, if any, that were available
    within the community and appropriate for the appellant.  If such a treatment
    program existed, the Board should have considered the risk factors by reference
    to that program and not the program being followed in the hospital.

[10]

The
    question for the Board in choosing between a conditional discharge and a
    detention order was not whether the hospitals proposed drug treatment plan
    could be carried out safely outside of the hospital, but whether terms and
    conditions could be imposed that would adequately address public safety
    concerns were the appellant to be granted a conditional discharge.  If those
    concerns could be adequately addressed, then a conditional discharge was the
    least onerous and least restrictive disposition available.

[11]

In
    considering whether appropriate conditions could be fashioned, the Board had to
    take into account the willingness of the appellant and his substitute decision-makers
    (his parents) to consent to a term in the conditional agreement requiring the
    appellant to take whatever psychiatric treatment the hospital personnel mandated.
    We were advised during oral argument that the appellant and his parents are
    still prepared to provide that consent.

[12]

We
    are satisfied that a conditional discharge is the appropriate order.  In coming
    to that conclusion, we have considered the following:

·

the nature of the index offences;

·

the absence of any criminal activity or other violence in the
    appellants past apart from the index offences;

·

the appellants progress in the two years he has been in the
    Brockville Hospital;

·

the support of the parents of the appellant and their developing
    appreciation for the nature of their sons mental illness;

·

the absence of any relapse by the appellant during the time
    period in which his medication has been significantly reduced; and

·

the appellants willingness to consent to an order requiring him
    to comply with the treatment prescribed by the hospital, and his parents
    willingness to consent to a similar order in their capacity as his substitute
    decision-maker.

[13]

The
    disposition of the Board should be set aside and a disposition ordering a
    conditional discharge on the following terms should be substituted:

a)

The appellant is to
    reside with his parents at 6 Wolfgang Drive, Nepean, Ottawa;

b)

The appellant is to
    notify the Person in Charge and the Ontario Review Board of any change in
    address within 24 hours of moving;

c)

The appellant is to
    report to the Person in Charge of the Brockville Mental Health Centre or its
    designate at least twice per week at times directed by the hospital;

d)

The appellant will
    consent, to the extent that he can consent, to take the psychiatric treatments
    as prescribed by the relevant medical personnel at the Brockville Mental Health
    Centre.

e)

To the extent that the
    appellants consent is ineffective, his parents as the appellants substitute
    decision-makers will consent to any treatment prescribed by the hospital
    personnel at Brockville Mental Health Centre.

f)

The
    appellant shall refrain from contact or communication direct or indirect with
    Victoria Frank, Sandra Frank or Robert Frank.

g)

The appellant shall not
    attend within 500 metres of 18 Cherrywood Drive, Guelph, Ontario; and

h)

The appellant shall
    not attend within 500 metres of any known place of worship, education,
    employment or residence of Victoria Frank, Sandra Frank or Robert Frank.

[14]

For
    the purposes of this disposition, the Brockville Mental Health Centre or its
    designate is specified as the place to which a police officer may deliver the
    accused in the event of a breach or suspected breach of the order.

Doherty J.A.

John Laskin J.A.

K. Feldman J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kavanagh v. Lajoie, 2014 ONCA 187

DATE: 201403011

DOCKET: C56655

Cronk, Epstein and Benotto JJ.A.

BETWEEN

Laurie Kavanagh

Plaintiff (Respondent)

and

Mark Lajoie

Defendant (Appellant)

Claude-Alain Burdet, for the appellant

J. Alden Christian, for the
    respondent

Heard:  March 4, 2014

On appeal from the decision of Justice Paul B. Kane of
    the Superior Court of Justice, dated January 15, 2013.

By the Court:

[1]

This dispute is over the extent of the appellants ownership interest in
    residential property on Oakdale Avenue in Ottawa (Oakdale). The appellant and
    respondent are brother and sister. Prior to 2005 the parties father, Donald
    Lajoie, owned Oakdale and two other residences.  In that year, Mr. Lajoie gave
    one family-owned residence to the respondent and advised the appellant that he
    intended to give him the Oakdale property.  To this end, Mr. Lajoie arranged,
    through the services of his long-time solicitor Eric Honey, for the title to
    Oakdale to be transferred to him and the appellant as joint tenants.

[2]

Mr. Lajoies health began to deteriorate in 2006. He moved in with the
    respondent and her family, in Ottawa.

[3]

In 2007, the appellant and his wife moved to Saskatchewan.  After the
    move, the appellant attempted to persuade Mr. Lajoie to rent or sell Oakdale so
    that funds would be available to assist him and his wife to purchase a home.

[4]

In July of 2009, the appellant and his family visited Mr. Lajoie.
    During the visit Mr. Lajoie, the appellant and the respondent discussed various
    ways the appellant could access money from Oakdale. No agreement was reached.

[5]

Within hours of the appellants departure from Ottawa to return home, Mr.
    Lajoie met with Mr. Honey at his office to change the ownership of Oakdale.  In
    accordance with Mr. Lajoies instructions, Mr. Honey prepared and registered
    documents to transfer Oakdale to Mr. Lajoie, thereby severing the joint tenancy
    and creating a tenancy-in-common with the appellant. As Mr. Lajoie had
    instructed, Mr. Honey then transferred Mr. Lajoies half-interest in Oakdale to
    the respondent.

[6]

Mr. Lajoie died on June 4, 2010. It was only then that the appellant learned
    of the 2009 transactions that left him sharing ownership of Oakdale with the
    respondent, as a tenant-in-common.

[7]

In July 2011, the respondent brought an application for partition and
    sale of Oakdale.  That application was dismissed. However, on consent, Oakdale
    was sold and the proceeds were paid into court pending the trial judges
    decision regarding the appellants entitlement to an order setting aside the 2009
    transactions.

[8]

At trial, the appellant advanced two arguments in support of his
    position that the 2009 transactions should be set aside. First, he submitted
    that Mr. Lajoie gifted Oakdale to him in 2005 and the gift was not defeated by
    severing the joint tenancy.  Second, even if severing the joint tenancy could
    have defeated the gift, the transaction should be set aside on the basis that
    it was a result of the respondents undue influence on Mr. Lajoie.

[9]

The trial judge rejected both arguments.  He concluded that Mr. Lajoies
    promise to the appellant in 2005 and the creation of the joint tenancy did not,
    in law, create an
inter vivos
gift.  Second, the trial judge held that
    the appellant had not satisfied the onus of establishing that the 2009
    transactions were the result of undue influence.

[10]

The
    appellant renews both arguments on appeal.

[11]

We
    see no error in the trial judges findings. Therefore, the appeal must be
    dismissed.

ANALYSIS

(1)

Did Mr. Lajoies promise to the appellant and the subsequent creation
    and registration of a joint tenancy create an irrevocable
inter vivos
gift of Oakdale to the appellant?

[12]

We
    disagree with the appellants submission that Mr. Lajoies promise to give him
    Oakdale, followed by the creation of the joint tenancy, established an
    irrevocable
inter vivos
gift.

[13]

For
    a gift to be valid and enforceable it must be perfected. In other words, the
    donor must have done everything necessary and in his power to effect the
    transfer of the property.  An incomplete gift is nothing more than an intention
    to gift. The donor is free to change his mind.  See
Bergen v. Bergen
[2013] B.C.J. No. 2552.

[14]

The
    appellant pointed to no legal authority in support of his proposition that
    creation of the joint tenancy completed Mr. Lajoies promise of Oakdale to the
    appellant.  In fact, by putting title of Oakdale into joint tenancy  with the
    attendant right to deprive the appellant of half of the property through
    severance  Mr. Lajoie defeated any finding that an irrevocable
inter vivos
gift was created.

[15]

In
    any event, the appellants argument cannot succeed as it would be contrary to the
Statute of Frauds,
R.S.O. 1990, c. S. 19, as amended S.O. 1994, c. 27
.

(2)

Did the trial
    judge err in refusing to set aside the 2009 transactions on the basis of undue
    influence?

[16]

The
    appellant argues that the trial judge erred by failing to conclude that Mr.
    Lajoies decision to sever the joint tenancy and transfer his half interest in
    Oakdale to the respondent was the result of undue influence by the respondent
    and must therefore be set aside.  He argues that the trial judge misapprehended
    the evidence and placed improper weight on the respondents testimony.

[17]

We
    see no reason to interfere.

[18]

Equity
    will intervene and set aside arrangements such as the impugned transactions if
    it can be demonstrated that they were obtained through undue influence.

[19]

Geffen
    v. Goodman Estate
, [1991] 2 S.C.R. 353, and
Bank of Montreal v. Duguid
(2000), 47 O.R. (3d) 737 (C.A.) are two of the leading cases on the doctrine of
    undue influence and its evidentiary companion, the presumption of undue
    influence. The concept of undue influence focuses on a persons dominance over another
    persons will by exercising a pervasive influence on him or her, whether
    through manipulation, coercion, or outright abuse of power. The onus is on the
    party claiming undue influence to prove affirmatively that such influence was,
    in fact, exerted by the other party expressly for the purpose of securing some
    advantage.

[20]

The
    trial judge rejected the appellants argument that the respondent obtained her
    one-half interest in Oakdale through the use of undue influence over Mr. Lajoie
    and concluded that the 2009 transactions were the result of Mr. Lajoies free
    mind, through the following analysis.

[21]

The
    trial judge recognized that the potential existed for the respondent to
    dominate or unduly influence Mr. Lajoie given the nature of their relationship
    and Mr. Lajoies dependence on the respondent during the last few years of his
    life.

[22]

Having
    found the potential for domination, the trial judge turned his mind to whether
    the respondent had actually abused her relationship with Mr. Lajoie to secure
    part of Oakdale. The trial judge acknowledged that while the respondent was interested
    in gaining half of Oakdale at the appellants expense, this motivation, even
    given the opportunity the respondent had to unduly influence her father, would
    not give rise to a finding of undue influence.  There was an abundance of
    evidence that demonstrated that Mr. Lajoie was an independent man known to
    freely exercise his own will.

[23]

The
    trial judge focused, then, on the actual circumstances surrounding the
    transactions and made the following findings.  While the respondent drove her
    father to Mr. Honeys office, Mr. Lajoie and Mr. Honey met alone to discuss Mr.
    Lajioes decision to sever the joint tenancy and transfer his interest in
    Oakdale to the respondent.  Mr. Honey was sensitive to the family dynamics and
    accepted Mr. Lajoies explanation that he had lost patience with the
    appellants repeated requests to access the equity in Oakdale. Mr. Honey also understood
    that Mr. Lajoie wanted to show his appreciation for the support the respondent
    and her husband had given him since 2006.

[24]

The
    trial judge also accepted Mr. Honeys testimony that he had no concerns about
    Mr. Lajoies ability to instruct him  either with respect to his mental
    competency or his ability to freely make the decisions reflected in the
    instructions.

[25]

On
    these findings, the trial judge concluded that the appellant had not
    demonstrated that the 2009 transactions had come about as a result of the
    respondents undue influence over Mr. Lajoie.

[26]

The
    trial judges findings of fact are amply supported by the evidence.  We see no
    reason to interfere with the trial judges rejection of the appellants
    argument that the 2009 transactions should be set aside based on undue
    influence.

[27]

While
    the appellant takes issue with Mr. Honeys involvement and the legal services
    he provided, we do not see how any of these concerns assist the appellants
    arguments in this matter.

[28]

Given
    the family history and the timing and lack of communication surrounding the
    2009 transactions, we understand the appellants difficulty accepting the
    consequences of Mr. Lajoies change of heart regarding the ownership of
    Oakdale. However, there is no evidence to support a finding that this change
    came about by the respondents undue influence over Mr. Lajoie. And once Mr.
    Lajoie independently decided to give half of Oakdale to the respondent, nothing
    in law prevented him from severing the joint tenancy and transferring his
    interest.

[29]

As
    a result, as the trial judge held, the appellant is only entitled to one half
    of the proceeds of the sale of the property.

[30]

Finally,
    we see no error in the trial judges decision that the issues raised in the
    appellants counterclaim be dealt with in the reference over the division of
    the proceeds of the sale of Oakdale that are currently held in court.

[31]

We
    note that leave to appeal the trial judges costs award was not sought.  In any
    event, we see no error in principle in the trial judges costs award. Nor, in
    our view, is his costs award plainly wrong.

DISPOSITION

[32]

For
    these reasons, the appeal is dismissed. The respondent is entitled to her costs
    of the appeal fixed in the amount of $15,000, including disbursements and
    applicable taxes.

Released: Mar. 11, 2014                                         E.A.
    Cronk J.A.

EAC                                                                 Gloria
    Epstein J.A.

M.L.
    Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: King Lofts Toronto I
    Ltd. v. Emmons, 2014 ONCA 215

DATE: 20140321

DOCKET: C57845

Watt, Strathy and Benotto JJ.A.

BETWEEN

King Lofts Toronto I Ltd. and King Lofts Toronto
    II Ltd.

Plaintiffs (Respondents)

and

P.
    Martin Emmons, Fraser Milner Casgrain LLP
and

First Canadian Title
    Insurance Company Ltd.

Defendants (Appellants)

Anne Posno, for P. Martin Emmons and Fraser Milner
    Casgrain LLP

Melvyn L. Solmon and Matthew Valitutti, for the
    respondents

Heard and released orally: March 17, 2014

On appeal from the judgment of Justice Paul Perell of the
    Superior Court of Justice, dated September 30, 2013.

ENDORSEMENT

[1]

This is an appeal of the summary judgment granted against Martin Emmons
    (the solicitor) and Fraser Milner Casgrain (the law firm) for solicitors
    negligence in connection with a commercial real estate transaction.

[2]

The respondent corporations (the respondent) purchased four commercial
    properties in downtown Toronto. The purchase price was $22.5 million. The
    respondent retained the appellants to act on the purchase. At the time of the
    offer, the city of Toronto owned a strip of land underneath a building on one
    of the properties.

[3]

Before the closing, the appellant solicitor discussed the laneway issue
    with the respondent. The respondent understood from the solicitor that it was a
    minor matter that would be resolved with the conversion of the property to Land
    Titles, that the cost would be few thousand dollars and that title insurance
    would deal with the matter.

[4]

A number of deficiencies were dealt with on closing with the use of
    holdbacks. There was no holdback for the laneway.

[5]

After closing, the solicitor reported that the laneway could not easily
    be converted to Land Titles, that the city would need to transfer it to the
    respondent but in order to provide you with some comfort title insurance was
    arranged to deal with the ownership issues.

[6]

Two years later, the respondent received an offer to purchase and
    retained a different solicitor to act on the sale. In response to requisitions
    from the purchaser, this lawyer attempted to obtain a conveyance from the city.
    The city expected to be paid $106,000 for the laneway. The respondent made a
    claim on the title insurance policy but learned that the insurance did not
    cover the issue. It brought action against the appellants for solicitors negligence.
    This transaction closed for $31.5 million.

[7]

The appellants brought a motion for summary judgment seeking dismissal
    of the action. The respondent did not file a cross-motion. The motion judge
    granted summary judgment in favour of the respondent on the basis of negligence
    and directed a trial on the quantum of damages.

[8]

The appellants submit that the motion judge erred in in his determination
    of the limitation period and the necessity for expert evidence on the standard
    of care.

The limitation period

[9]

The appellants submit that the notice of action was filed late, more
    than two years after the new lawyers discovered the cause of action. It is
    submitted that they learned of the loss in April 2008 when the city indicated
    it expected to be paid for the land. The motion judge held that the period
    started to run in January 2009 when the title insurance claim was denied.

[10]

In
    our view, the respondent was entitled to rely on the solicitors advice regarding
    title insurance. The appellant had been told by the solicitor that title
    insurance would deal with the issue of the laneway. Until coverage was
    denied, and the solicitor was proven wrong, there was no cause of action so the
    limitation period did not start to run.

[11]

We
    agree with the motion judge in this regard.

The Expert evidence on the standard of care

[12]

The appellants submit that the motion judge could not conclude
    that the solicitor breached the duty when expert evidence was not called to
    give testimony about the standard of care. We do not agree. The evidence was
    clear that the respondent was not warned of the risk that the city might expect
    payment. There was a clear duty to warn and the facts are not in dispute that
    there was no warning. On the contrary, there was erroneous advice that the
    matter could be dealt with by title insurance. We do not suggest that there
    is no need for expert opinion in solicitors negligence matters generally.
    Here, there was a clear duty to warn that was not complied with and expert
    evidence was not required.

[13]

Although
    not referred to in oral submissions, the appellants submitted in their factum that
    the motion judge erred on the issue of causation. The appellants submit that
    there are no damages because they would have been able to negotiate a holdback
    for the laneway. The motion judge correctly determined that this was
    speculative.

[14]

In
    oral argument, the appellant added a new ground of appeal: that the motion
    judge erred in granting judgment in favour of a party who had not given advance
    notice of a claim for summary judgment. There are two points in response to
    this:

1)

The appellant did not
    request an adjournment at the time; and

2)

The Supreme Court of
    Canada in
Hryniak v.
Mauldin

2014
    SCC 7,
has approved a culture shift requiring judges to manage
    the process in line with the principle of proportionality in the application of
    Rule 20.

[15]

This
    action involves a claim for $106,000 arising out of a multi-million dollar
    transaction. The principles of proportionality and sensible management of the
    court process support the motion judges ruling.

[16]

The
    appeal is dismissed. Costs to the respondent in the amount of $15,000,
    inclusive of disbursements and all applicable taxes.

David Watt J.A.

G. Strathy J.A.

ML. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kobzar
    (Re), 2014 ONCA 218

DATE: 20140321

DOCKET: M43421 (C53899)

Goudge, MacPherson and Juriansz JJ.A.

IN THE MATTER OF:  YURIY KOBZAR

AN APPEAL UNDER PART XX.1 OF THE
CODE

Roy Lee, for the moving party Attorney General of Canada

Joseph Di Luca and Erin Dann,
amicus curiae

Eric Siebenmorgen, for Her Majesty the Queen

Barbara Walker-Renshaw and Ewa Krajewska, for the
    Ontario Shores Centre for Mental Sciences

Heard: in writing

ENDORSEMENT

[1]

On May 7, 2013 the court heard a motion brought by the Attorney General
    of Canada seeking to extend the suspension of the declaration of invalidity to
    March 31, 2014. The motion was granted on terms agreed to by the parties.  The
    court remained seized of the matter for the purpose of any further motions
    seeking further extensions of the suspension of declaration of invalidity.  The
    Attorney General of Canada has brought a further motion seeking to extend the
    suspension of declaration of invalidity to September 30, 2014.  The evidence
    discloses that legislation to respond to the courts decision in this case has
    been making its way through parliament but due to the normal delays associated
    with the legislative process it is impossible to complete all steps before
    March 31.  The request for this extension is reasonable.  It is consented to by
    all parties and the
amicus curiae
.  Accordingly, the motion is granted
    and an order may issue on terms as set out in the draft order contained at tab
    5 of the motion record.

S.T. Goudge J.A.

J.C. MacPherson J.A.

R.G. Juriansz J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:  Lamb (Re), 2014 ONCA 169

DATE: 20140303

DOCKET: C56891

Laskin, Juriansz and Watt JJ.A.

IN THE MATTER OF:  Phillip Lamb

AN APPEAL UNDER PART XX.1 OF THE
CODE

Phillip Lamb, appearing in person

Joseph DiLuca,
amicus curiae

Mary-Ellen Hurman, for the Attorney General of Ontario

Gavin S. MacKenzie, for the Centre for Addiction and
    Mental Health

Heard and released orally:  February 28, 2014

On appeal against the disposition of the Ontario Review
    Board dated, April 4, 2013.

ENDORSEMENT

[1]

It was common ground before the Board that the appellant was a
    significant threat to the safety of the public.  It follows from the uncontested
    nature of this finding, which remains the case on appeal, that an absolute
    discharge was not available in this case.

[2]

The Board considered whether a conditional discharge was appropriate and
    concluded that it was not.  Their conclusion that a detention order was the
    least onerous and least restrictive disposition was fully supported by the
    evidence adduced at the hearing.  That conclusion was not tainted by legal
    error or by any misapprehension of the evidence and is plainly reasonable.  We observe
    that, in light of the fresh evidence that the appellant is currently incapable
    of consenting to treatment, a conditional discharge is not an option available
    to us today.

[3]

The appellants next annual review is scheduled for March 4, 2014 when
    it will be open to him to advance once again his case for a conditional
    discharge.

[4]

The appeal is dismissed.

John
    Laskin J.A.

R.G.
    Juriansz J.A.

David
    Watt J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
    Liaison Educational Systems Ltd. v. 894740 Ontario Inc., 2014 ONCA 221

DATE: 20140324

DOCKET: C57842

Watt, Lauwers and Benotto JJ.A.

BETWEEN

Liaison Educational Systems Ltd.

Applicant (Respondent)

and

894740 Ontario Inc., 1359849 Ontario Limited,
    Asim Bhatti, Asimco Culinary College Corp., Asimco Education Corp., and Jeffrey
    Wolfe

Respondents (Appellants)

Shane P. Murphy, for the appellants

James Cimba, for the respondent

Heard: March 21, 2014

On appeal from the order of Justice P. B. Hambly of the Superior
    Court of Justice, dated October 3, 2013.

APPEAL BOOK ENDORSEMENT

[1]

In our view, the appellants presented a plausible explanation for the
    failure to file materials in Hamilton. Thus, the second branch of the
Lenskis
test was met.

[2]

The appeal is allowed with the result that the injunction is set aside
    as well as the order of Hambly J.

[3]

Costs to the appellants payable by the respondent in the amount of     $18,000
    inclusive of disbursements and all applicable taxes.