CITATION: Elgner v. Elgner, 2011 ONCA 483

DATE: 20110629

DOCKET: C53108

COURT OF APPEAL FOR ONTARIO

Cronk, Gillese and MacFarland JJ.A.

BETWEEN

Carol Ann Elgner

Applicant (Respondent)

and

Claude Frederick Elgner

Respondent (Appellant)

IN THE MATTER OF an Application under the
Divorce Act
,
          R.S.C. 1985, c. 3 (2nd Supp.)

Charles E. Beall and Karon C. Bales, for the appellant

Julie K. Hannaford, Golnaz S. Simaei, Harold Niman and Vanessa
          Amyot, for the respondent

Daniel Guttman, for the intervener, the Attorney General of
          Ontario

Heard:  April 13, 2011

On appeal from the order of the Divisional Court (Casimir N.
          Herold, John R. R. Jennings and Sidney N. Lederman J.J.), dated September 9,
          2010.

Gillese J.A.:

[1]

An interim spousal support order is made.  Can the order be appealed as
    of right or only with leave?
[2]

This question lies at the heart of this appeal.  Its resolution involves
    a significant constitutional challenge based on the doctrine of federal
    paramountcy.  Conflicting caselaw from across Canada tells us that there is no
    easy answer to it.
OVERVIEW
[3]

Claude Frederick Elgner, the appellant, and Carol Ann Elgner, the
    respondent, separated in June 2007 after thirty-three years of marriage.  Mr.
    Elgner is now 63 years old; Ms. Elgner is 62.  They have three adult children,
    none of whom is a child of the marriage for support purposes.
[4]

On December 2, 2009, pursuant to s. 15.2 of the
Divorce Act
,
    R.S.C. 1985, c. 3 (2nd Supp.), Greer J. ordered Mr. Elgner to pay
interim spousal support of $110,000 per month, and retroactive
    spousal support of $3,360,000 for the period from January 2008 to December 2009
    (the interim order).
[5]

Mr. Elgner wishes to appeal the interim order.  He moved to file a
    notice of appeal as of right or, if leave to appeal is required, that leave be
    granted.  Justice Sachs, sitting as a single judge of the Divisional Court,
    dismissed the motion by order dated March 17, 2010 (the first Divisional Court
    order).
[6]

Mr. Elgner then moved for a review of the first Divisional Court order by
    a full panel of the Divisional Court.  He sought only a review of that part of
    the order dismissing his motion for an order permitting him to file his appeal
    as of right.  He did not seek a review of Sachs J.s refusal to grant leave to
    appeal.
[7]

By order dated September 9, 2010, a panel of the Divisional Court
    dismissed the motion (the order under appeal), holding that leave to appeal the
    interim order was required.  The Divisional Court gave two sets of reasons for
    dismissing the appeal.  Justice Herold wrote reasons with which Lederman J.
    concurred (the majority or the majority decision).  Justice Jennings wrote
    concurring reasons (the minority or the minority decision).
[8]

With leave of this court, Mr. Elgner brings this appeal.  He argues
    that he is entitled to appeal the interim order as of right  that leave to
    appeal is not required.  He bases his appeal on s. 21(1) of the
Divorce Act
,
    which provides that, with two exceptions that do not apply in the present case,
     an appeal lies to the appellate court from any judgment or order, whether
    final or interim, rendered or made by a court under this Act.
[9]

Mr. Elgner contends that s. 21(1) of the
Divorce Act
gives the
    right of appeal for all orders, interim and final, made under the
Divorce
    Act
.  As the
Divorce Act
is federal legislation, he says that right is
    paramount over s. 19(1)(b) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C. 43 (the
CJA
), which requires leave to appeal from interlocutory orders
    of judges of the Superior Court of Justice.
[10]

Because the appeal raises a constitutional question and the principle of
    paramountcy, notice was given to both the Attorneys General of Ontario and
    Canada.  Only the Attorney General of Ontario intervened.  It took the position
    that s. 19(1)(b) of the
CJA
is not rendered constitutionally inoperative
    by virtue of s. 21 of the
Divorce Act
and the doctrine of paramountcy.
    Thus, like Ms. Elgner, the Attorney General of Ontario submitted that leave to
    appeal is required and the appeal should be dismissed.
[11]

As I explain below, I agree with the majority
    decision of the Divisional Court.  Accordingly, I would dismiss the appeal.
THE DECISIONS BELOW

The First Divisional
    Court Order
[12]

Based on the decision in
Kral v. Kral
(1994), 68 O.A.C. 188 (Div. Ct.), Sachs J., sitting as a single judge of the
    Divisional Court, held that Mr. Elgner required leave to appeal the interim
    order
.
[13]

In
Kral
, the Divisional Court observed that
    s. 21(6) of the
Divorce Act
provides that appeals are to be asserted in
    accordance with the ordinary procedure governing appeals.  Section 21(6) of the
Divorce Act
reads as follows:
Except as otherwise provided by
    this Act or the rules or regulations, an appeal under this section shall be
    asserted, heard and decided according to the ordinary procedure governing
    appeals to the appellate court from the court rendering the judgment or making
    the order being appealed.
[14]

Thus, the Divisional Court reasoned in
Kral
,
    s. 21(6) of the
Divorce Act
authorizes the requirement for leave set out
    in s. 19(1)(b) of the
CJA
.  Consequently, there is no conflict between
    the two provisions.
[15]

Justice Sachs considered
Kral
to be
    binding upon her.  She noted that in deciding
Kral
, the Divisional Court
    relied on the statement of Finlayson J.A. in
Colletta v. Colletta
(1992),
    10 O.R. (3d) 464 (C.A.), at para. 5, that leave to appeal is required in
    respect of interim orders under the
Divorce Act
.  She further noted that
    in
Kral
, the Divisional Court adopted the reasoning of Carruthers J.,
    sitting as a single judge, in
Potts v. Potts
(1993), 13 O.R. (3d) 284
    (Div. Ct.), to the same effect.  Justice Sachs concluded by observing that the
    ruling in
Kral
furthers the legitimate policy objective of discouraging
    appeals from interim orders in family law matters, which cause additional
    expense, emotional anguish and delay to the parties.
[16]

Justice Sachs refused to grant leave to appeal
    the interim order because the proposed appeal raises no issues that transcend
    the private interests of the parties or questions of law requiring resolution
    by a higher judicial authority.  Any issues that are raised require resolution
    by the trial judge, who will have a full opportunity to assess the parties
    credibility and the evidence.

The Order under Appeal
[17]

The Divisional Court gave two sets of reasons for dismissing the appeal.
    It is instructive to consider both.

The Majority Decision
[18]

The majority endorsed the reasons of Sachs J.  They stated that ss.
    21(1) and (6) of the
Divorce Act
must be read together.  In light of the
    conflicting interpretations that these provisions have been given, they viewed them
    to be ambiguous.  Consequently, they stated that policy considerations  as
    well as context  could inform their interpretation.  The majority quoted with
    approval the policy considerations that Sach J. identified and which are set
    out at para. 15 above.
[19]

The majority went on to note the anomalous situation that would result
    if a judge dealt with a motion for interim support under the
Divorce Act
and
    for interim exclusive possession under the
Family Law Act
, R.S.O. 1990,
    c. F.3.  If Mr. Elgners position is correct, leave would not be required to
    appeal the interim support part of any order that was made but it would be
    required for the interim order in respect of possession of the matrimonial
    home.
[20]

The majority opined that s. 21 must be interpreted within the context of
    the gatekeeper function played by the courts, which is becoming more
    necessary and acceptable in our judicial system, in order to prevent the
    situation where the person with the deepest pockets or the inclination and
    ability to argue motions and appeals can wear down his or her opponent.
[21]

When read in context, the majority concluded that s. 19(1) of the
CJA
is not inconsistent with s. 21 of the
Divorce Act
.  Section 19(1) does
    not take away a substantive right to appeal  it merely sets out the procedure
    for asserting and enforcing that right.
[22]

The majority acknowledged the Supreme Court of Canadas decision in
Kelvin
    Energy v. Lee
, [1992] 3 S.C.R. 235 (
Kelvin Energy
), which held that wording
    similar to that in s. 21(1) of the
Divorce Act
gave an absolute right of
    appeal from an order made under the
Canada Business Corporations Act
,
    R.S.C. 1985, c. C-44 (
CBCA)
.  However, it did not find
Kelvin Energy
to be significant because there is no comparable section in the
CBCA
to
    s. 21(6) of the
Divorce Act
.

The Minority Decision
[23]

The minority would have dismissed the appeal solely on the ground that
    the panel was bound by
Kral
.  However, he expressed serious reservations
    about the correctness of
Kral
.  He analysed Ontario lower court
    decisions and decisions of the Saskatchewan, British Columbia, and Quebec
    courts of appeal, all of which have held that leave is not required to appeal
    interim orders made under the
Divorce Act
.  He concluded that the weight
    of judicial authority on the interpretation of s. 21 is contrary to the
    conclusion reached in
Potts
.  In his view, these contrary authorities
    are consistent with the plain language of s. 21(1).
[24]

The minority also differed from the majority in finding it incompatible
    for legislation to grant an absolute right of appeal but require that leave be
    granted.  He observed, at para. 40 of the reasons, that a right to apply for a
    right to appeal is not a right of appeal as provided in s. 21.
[25]

Finally, the minority expressed reservations about whether admittedly sound
    policy considerations should affect the courts interpretation of s. 21, saying
    that if Parliament has granted an absolute right of appeal, courts cannot do
    other than permit that right to be exercised.
THE ISSUE AND STANDARD OF REVIEW
[26]

There is a single issue to be decided on this
    appeal:  can an interim order made under the
Divorce Act
be appealed as
    of right or only with leave?
[27]

The parties agree that because the court is
    reviewing a decision on a question of law, the applicable standard of review is
    correctness.
THE RELEVANT STATUTORY PROVISIONS
[28]

The relevant parts of s. 21 of the
Divorce Act
read
    as follows:
21. (1) Subject to subsections (2) and (3), an
    appeal lies to the appellate court from any judgment or order, whether final or
    interim, rendered or made by a court under this Act.
(2) No appeal lies from a judgment granting a
    divorce on or after the day on which the divorce takes effect.
(3) No appeal lies from an order made under this
    Act more than thirty days after the day on which the order was made.
...
(6) Except as otherwise provided by this Act or the
    rules or regulations, an appeal under this section shall be asserted, heard and
    decided according to the ordinary procedure governing appeals to the appellate
    court from the court rendering the judgment or making the order being appealed.
[29]

Section 25 of the
Divorce Act
reads as follows:
25.  (1)  In this section, competent authority,
    in respect of a court, or appellate court, in a province means the body, person
    or group of persons ordinarily competent under the laws of that province to
    make rules regulating the practice and procedure of that court.
(2)  Subject to subsection (3), the competent
    authority may make rules applicable to any proceedings under this Act in a
    court, or appellate court, in a province, including, without limiting the
    generality of the foregoing, rules
(a) regulating the practice and
    procedure in the court,  including the addition of persons as parties to the proceedings;
(b) respecting the conduct and
    disposition of any proceedings under this Act without an oral hearing;
(b.1) respecting the application of
    section 17.1 in respect of proceedings for a variation order;
(c) regulating the sittings of the
    court;
(d) respecting the fixing and awarding
    of costs;
(e) prescribing and regulating the
    duties of officers of this court;
(f) respecting the transfer of
    proceedings under this  Act to or from the court; and
(g) prescribing and regulating any
    other matter considered expedient to attain the ends of justice and carry
    into effect the purposes and provisions of this Act.
(3)  The power to make rules for a court or
    appellate court conferred by subsection (2) on a competent authority shall be
    exercised in the like manner and subject to the like terms and conditions, if
    any, as the power to make rules for that court conferred on that authority by
    the laws of the province.
(4)  Rules made pursuant to this section by a
    competent authority that is not a judicial or quasi-judicial body shall be
    deemed not to be statutory instruments within the meaning and for the purposes
    of the
Statutory Instruments Act
.
[30]

Section 19(1) of the
Courts of Justice Act
reads as follows:
19.  (1) An appeal lies to the Divisional Court
    from,
(a) a final order of a judge of the
    Superior Court of Justice, as described in subsections (1.1) and (1.2);
(b) an interlocutory order of a judge
    of the Superior Court of Justice, with leave as provided in the rules of court;
(c) a final order of a master or case
    management master.
ANALYSIS
[31]

Mr. Elgner contends that s. 21(1) of the
Divorce
    Act
provides a direct right of appeal of all orders, interim and final,
    made under the
Divorce Act
.  Consequently, he argues, s. 19(1)(b) of the
CJA
conflicts with s. 21(1) because it stipulates that an appeal from an
    interlocutory order of a Superior Court judge lies to the Divisional Court only
    with leave.  Mr. Elgner argues that a provincial law cannot derogate from the
    right of appeal specifically created by a federal statute.  Therefore, because
    the
Divorce Act
is federal legislation, he says that the doctrine of
    paramountcy applies to render s. 19(1)(b) of the
CJA
inoperative to the
    extent of the conflict.  He also argues that the Divisional Court erred in
    relying on policy considerations to interpret appeal rights created by s. 21(1)
    of the
Divorce Act
, given that the language of s. 21(1) is clear and
    unambiguous.
[32]

Mr. Elgner founds his submission on: (1) the
    wording of s. 21(1) of the
Divorce Act
; (2) the reasoning in
Kelvin
    Energy
; and, (3) decisions of the courts of appeal for British Columbia,
    Saskatchewan and Quebec rendered since
Kelvin Energy
, all of which have
    held that pursuant to the
Divorce Act
, leave is not required to appeal
    interim orders made under that Act, notwithstanding any leave requirement under
    the provincial rules of court.  The decisions he relies on are
G.M. v. F.L.
[2009] QCCA 649;
Farden v. Farden
(1996), 141 Sask. R. 178 (C.A.);
Rimmer
    v. Adshead
(2003), 224 D.L.R. (4th) 372 (Sask. C.A.);
Huculak v. Huculak
,
    1999 BCCA 715;
De Fehr v. De Fehr
, (2002) BCCA 577.
[33]

I do not accept this submission.  In my view,
    the Divisional Court correctly held that by virtue of s. 21(6) of the
Divorce
    Act
, an appeal from an interlocutory order made under the
Divorce Act
is
    subject to the leave requirement in s. 19(1) of the
CJA
.  To conclude
    that s. 21(1) creates a direct right of appeal, without leave, is to ignore ss.
    21(6) and 25 of the
Divorce Act
, and the constitutional analysis that
    must be undertaken before applying the doctrine of paramountcy.

Sections 21 and 25 of
    the Divorce Act
[34]

Each province has enacted procedures for how
    appeals are ordinarily asserted.  In Ontario, s. 19(1)(b) of the
CJA
stipulates
    that an appeal lies to the Divisional Court from an interlocutory order of the
    Superior Court in Ontario with leave.  This was the ordinary procedure for
    asserting an appeal from an interlocutory order when, in 1985, Parliament
    enacted s. 21(6) of the
Divorce Act
.
[35]

Section 21(1) of the
Divorce Act
does not
    stand in isolation.  It must be read in context.  That context includes s. 21(6),
    which provides that:
Except as otherwise provided by
    this Act or the rules and regulations,
an appeal shall be asserted
,
    heard and decided
according to the ordinary procedure governing appeals
to
    the appellate court from the court rendering the judgment or making the order
    being appealed. [emphasis added]
[36]

In my view, on a plain reading of s. 21(6), it stipulates
    that the appeal right given in s. 21(1) must be asserted in accordance with the
    ordinary procedure governing appeals in Ontario.  That ordinary procedure is
    provided by s. 19(1) of the
CJA
, with its leave requirement.
[37]

This is the conclusion that Finlayson J., for a
    unanimous panel of this court, reached in
Colletta
and which I would
    re-affirm.  Counsel in
Colletta
were agreed that an appeal respecting
    interim relief in divorce matters would be to the Divisional Court, with leave.
    However, Finlayson J.A. did not simply accept this concession.  At para. 5 of
Colletta
,
    he discusses ss. 21(1) and (6), albeit briefly, to explain why he is satisfied
    that counsel were correct on the point.
[38]

Mr. Elgner makes two arguments against this
    interpretation of s. 21(6).  First, he says that it reads out the words except
    as otherwise provided by this Act in s. 21(6).  He submits that the
Divorce
    Act
otherwise provides for an unrestricted right of appeal under s.
    21(1).  Therefore, the incorporation of provincial procedure by s. 21(6) is
    subject to the appeal right granted by s. 21(1).  Second, relying on
792266
    Ontario Ltd. v. Monarch Trust Co. (Liquidator of)
(1996), 94 O.A.C. 384 (C.A.),
    he argues that a right of appeal is a substantive right, not a matter of procedure.
    Therefore, the word procedure in s. 21(6) does not refer to, or have the
    effect of, incorporating into the
Divorce Act
the provincial rules
    governing leave to appeal.
[39]

In my view, the first argument is circular.
    Section 21(1) does not otherwise provide for the way in which an appeal shall
    be asserted.  Section 21(1) sets out the appeal right and s. 21(6) sets out
    how, among other things, that right is to be asserted.
[40]

As for the second argument, while I agree that a
    right of appeal is a substantive right and not a mere procedural right, nothing
    turns on this point.  A leave to appeal requirement for interim orders in
    divorce matters does not finally determine the rights of the parties. Interim
    orders are designed to be made quickly to meet the immediate needs of the
    claimant and allow the matter to proceed to trial.  Any adjustments that must
    be made to interim orders can be done at the trial.
[41]

Moreover, by spelling out in s. 21(6) that an
    appeal under s. 21(1) is to be asserted, heard and decided according to the
    ordinary procedure governing appeals, Parliament dictated that the provincial rules
    are to be followed when exercising the appeal right given by s. 21(1).  As has
    been noted, s. 19(1) of the
CJA
was operative when s. 21(6) of the
Divorce
    Act
was enacted.  It was the ordinary procedure in Ontario for asserting
    an appeal from an interlocutory order.  It can be assumed that Parliament, when
    enacting s. 21(6), was aware of the ordinary procedure in place in Ontario.  It
    follows that Parliament could have inserted a provision that excluded the leave
    requirement.  It did not.  Instead, it chose to cede to the provinces the right
    to govern the procedure on appeal.
[42]

Section 25 of the
Divorce Act
reinforces
    this point.  It provides that the provinces may make rules applicable to any
    proceedings under this Act in a court, or appellate court.  The power given to
    the provinces in s. 25 expressly includes regulating practice and procedure
    (s. 25(2)(a)) as well as regulating any other matter considered expedient to
    attain the ends of justice and carry into effect the purposes and provisions of
    this Act (s. 25(2)(g)).
[43]

It is trite law that the modern approach to
    statutory interpretation requires the court to read the words of a provision in
    their entire context and in their grammatical and ordinary sense, harmoniously
    with the scheme of the Act, the object of the Act, and the intention of
    Parliament: see
Bell ExpressVu Ltd. Partnership v. Rex
, [2002] 2 S.C.R.
    559, at para. 26.  Thus, having considered the words of s. 21(1), in context,
    it is necessary to consider also the object of the
Divorce Act
and the
    intention of Parliament.

[44]

The amendments that led to the 1985
Divorce
    Act
were based on the Law Reform Commission of Canadas Report on Family
    Law,
[1]
which recommended a
    fundamental rethinking of the divorce process through the introduction of a
    no-fault divorce regime.  At p. 33, the Report recommended that the
Divorce
    Act
create an expeditious process that would avoid delay and enforce limits
    to prevent unreasonable delay.  It is evident that the object of the reforms underlying
    the 1985 amendments was to simplify divorce proceedings, thereby rendering the
    divorce process less expensive and more timely.  Interpreting ss. 21(1) and (6)
    as the Divisional Court did is consonant with Parliaments intention and the
    object of the amendments to the
Divorce Act
, which were designed to
    shorten and simplify the divorce process.
[45]

Recognition of the object of the amendments also
    does away with Mr. Elgners submission that the Divisional Court erred by
    relying on policy considerations.  It will be recalled that those policy
    considerations, voiced by Sachs J. and endorsed by the majority, were to
    discourage appeals from interim orders in family law matters because they would
    cause the parties additional expense, emotional anguish and delay.  Although
    referred to as a matter of policy, the Divisional Court was simply taking into
    consideration the object of the amendments to the 1985
Divorce Act
.  In
    light of the modern approach to statutory interpretation, set out above, it was
    entirely appropriate for the courts below to take into account this consideration.

The Constitutional
    Issue
[46]

The doctrine of federal legislative paramountcy
    provides that where there is an incompatibility between validly enacted but
    overlapping provincial and federal legislation, the provincial legislation is
    inoperative to the extent of the inconsistency:  see
Canadian Western Bank
    v. Alberta
, [2007] 2 S.C.R. 3, at para. 69.
[47]

Jurisdiction over marriage and divorce is
    federal but, pursuant to the double aspect doctrine, provincial legislatures
    can adopt valid legislation on the same subject, depending on the aspect from
    which the legislation is considered.  No one disputes that s. 19 of the
CJA
is
    validly enacted legislation.
[48]

In applying the doctrine of paramountcy, a
    conflict will not be found merely because of overlap in the subject matter of
    federal and provincial laws.  The question is whether it is impossible to
    comply simultaneously with both laws or whether the operation of the provincial
    law will frustrate the purpose of the federal law:
Canadian Western Bank
,
    at para. 73.
[49]

As I have explained above, compliance with both
    s. 21 of the
Divorce Act
and s. 19(1) of the
CJA
is possible.  A
    party may comply with both by applying for leave to appeal pursuant to s.
    19(1)(b) of the
CJA
.  Furthermore, again for the reasons given above, s.
    19(1) does not frustrate the federal purpose behind s. 21 of the
Divorce Act
.
    As the two provisions operate harmoniously, the doctrine of paramountcy is not
    engaged.

Two Final Arguments
[50]

It remains to deal with two other arguments
    advanced by Mr. Elgner, the first based on
Kelvin Energy
and the second
    based on appellate decisions from outside Ontario.
[51]

Mr. Elgner put much emphasis on the Supreme
    Courts decision in
Kelvin Energy
.  However, like the majority in the
    Divisional Court, I find that decision to be of little assistance.
[52]

In
Kelvin Energy
, the Supreme Court of
    Canada interpreted s. 249 of the
CBCA
, which at that time provided that
    [a]n appeal lies to the court of appeal from any order made by a court under
    this Act.  It held that under that section, any judgment  whether
    interlocutory or final  was appealable as of right, provided it was made
    pursuant to a power expressly conferred by the
CBCA
.
[53]

However, there is an extremely significant
    distinction between the appeal right under consideration in
Kelvin Energy
and
    that under consideration in the current appeal.  There was no comparable
    provision in the
CBCA
to s. 21(6) in the
Divorce Act
.  As I have
    explained, it is the interplay between ss. 21(1) and (6) of the
Divorce Act
,
    considered within the context of the purpose of the provision and the underlying
    philosophy of the Act, that leads to the conclusion that in Ontario, the appeal
    of interlocutory orders under the
Divorce Act
requires leave to appeal
    from the Divisional Court.
[54]

In relation to the appellate decisions from
    elsewhere in Canada that Mr. Elgner relies on, again I find them to be of
    limited value.  Their analysis does not appear to have taken into consideration
    the relationship among ss. 21(1), (6) and 25 of the
Divorce Act
.
    Furthermore, I do not read them as having undertaken a constitutional analysis,
    including a consideration of the jurisprudence on paramountcy, which is
    foundational to a determination of conflict.

Conclusion
[55]

In conclusion, when ss. 21(1) and (6) of the
Divorce
    Act
are given their ordinary meaning and read in their entire context,
    harmoniously with the scheme of the Act, the object of the Act and the
    intention of Parliament, it is clear that the right of appeal given by s. 21(1)
    is to be exercised in accordance with the ordinary procedures governing appeals
    of that nature.  In Ontario, the ordinary procedure requires leave, if the
    matter to be appealed is an interlocutory order of a judge of the Superior
    Court of Justice.
DISPOSITION
[56]

Accordingly, I would dismiss the appeal with
    costs to the respondent in the agreed on sum of $30,000, all inclusive.
RELEASED:  JUN 29 2011 (E.E.G.)
E.E. Gillese
    J.A.
I agree. E.A. Cronk J.A.
I agree. MacFarland J.A.

[1]
Law Reform Commission of Canada,
Report on Family Law
, (Ottawa:
    Information Canada, 1976).


CITATION:
Galka v. Stankiewicz, 2011 ONCA 428

DATE: 20110602

DOCKET: C52239

COURT OF APPEAL FOR ONTARIO

Laskin, Goudge and Gillese JJ.A.

BETWEEN

Wieslaw Galka

Appellant

and

Patryk Stankiewicz and The City of Toronto

Respondents

J. Gardners Hodder, and Howard Blitstein, for the appellant

E. Ayers and R. Squires, for the respondents

Heard: June 2, 2011

On appeal from the judgment of Justice D.F. Baltman of the
          Superior Court of Justice dated May 14, 2010.

APPEAL BOOK ENDORSEMENT

[1]

We agree with the trial judges finding that this was not a
    reasonably foreseeable risk of harm.  There was evidence to support this
    finding.  Accordingly, the appeal is dismissed.  Costs to the City of $21,649,
  if requested.  The court hopes that the costs will not be requested.


CITATION: Glover v. Perron, 2011
      ONCA 472

DATE: 20110621

DOCKET: C52821

COURT OF APPEAL FOR ONTARIO

OConnor A.C.J.O., Armstrong and Rouleau JJ.A.

BETWEEN

Richard Glover

Plaintiff (Appellant)

and

Michel Perron

Defendant (Respondent)

Eric R. Williams, for the plaintiff (appellant)

Stephen J. Maddex, for the defendant (respondent)

Heard:  June 20, 2011

On appeal from the judgment of Justice Annis of the Superior
          Court of Justice dated September 27, 2010.

APPEAL BOOK ENDORSEMENT

[1]

Even accepting that the letter of April 1, 2008 constituted a valid
    offer, we do not agree that the appellant accepted that offer.

[2]

The April 4
th
letter indicated an intention to negotiate the
    terms of an agreement.  The draft agreement prepared by the appellants counsel
    and forwarded on April 30
th
underlines the fact that there had not
    been a meeting of minds sufficient to constitute a binding contract.  The draft
    agreement included only a one way release from the respondent to the appellant.

[3]

The response of the respondent made it clear that this was unacceptable.

[4]

As a result, the appeal is dismissed.

[5]

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


CITATION:
Gray v. Rizzi, 2011
          ONCA 436

DATE: 20110607

DOCKET: C52222

COURT OF APPEAL FOR ONTARIO

Doherty, MacFarland JJ.A. and Hoy J. (
Ad hoc
)

BETWEEN

Nadine Ellen Gray

Applicant (Respondent in Appeal)

and

Mario Rizzi

Respondent (Appellant)

Peter Cozzi, for the appellant

Hugh MacKenzie, for the respondent

Heard and released orally:
May 13, 2011

On appeal from the order of Justice R. Cary Boswell of the
          Superior Court of Justice dated May 18, 2010.

ENDORSEMENT

[1]

The facts are not in dispute and are set out in the
    reasons of the motion judge.

[2]

The appellant moved before Boswell J. for an order
    changing and setting aside the orders of Loukidelis J. of November 1, 2005, and
    Nelson J. of March 15, 2006, pursuant to Rule 25(19
)(
b)
    of the
Family Law Rules
.  While the appellant did not frame his motion
    as it relates to the order of Loukidelis J. as a request to set aside a default
    judgment, Boswell J. considered whether, had he done so, the judgment
    would be set aside. Boswell J. focussed on the fact that the appellant
    delayed four years before challenging the order of Loukidelis J.

[3]

The appellant argues that Boswell J. failed to take the
    contextual approach required by
Scaini

v.

Prochnicki

on
a  motion
to set aside a default judgment.
    This argument can only apply to the order of Loukidelis J.
as
the order, of
    Nelson J., which is in fact the operative order was made on notice.  Moreover, applying a contextual approach on
    the record before him Boswell J. was correct on this issue.

[4]

The appellant further argued before the motion judge
    that the mistake in the order of Loukidelis J. was that the issues of spousal
    and child support had already been decided by the early order of Salmers
    J.  He says, because the Salmers order
    had not been issued and entered, Salmers J. remained seized of those matters
    and accordingly Loukidelis J. was without jurisdiction when he made the order
    he did on November 1, 2005.

[5]

Without passing on the merits of those arguments, they
    go to the correctness of the order  arguments which can only be made on
    appellate review.  They are not the type
    of mistakes contemplated by Rule 25(19
)(
b).  We agree with Boswell J. when he said:

The Rule was not, in my view, intended to apply to
    cases of alleged legal errors, such as the suggestion that the court exceeded
    its jurisdiction in making the order. Mistakes, or errors, in law are appealable
    errors and are not subject to correction under Rule 25(19).

[6]

He dismissed the appellants motion and properly so in
    our view.  The appeal is dismissed.

[7]

The costs of the appeal are to the respondent fixed in
    the sum of $6,000.00 inclusive of disbursements and applicable taxes.

Doherty
    J.A.

J.
    MacFarland J.A.

Alexandra
    Hoy J.
ad hoc


CITATION: Hennigar v. Target Corporation, 2011 ONCA 449

DATE: 20110610

DOCKET: C53576

COURT OF APPEAL FOR ONTARIO

Laskin, Moldaver and Gillese JJ.A.

BETWEEN

David J. Hennigar and Stephen Mernick

Appellants

and

The Target
          Corporation, Hudsons Bay Company, National Realty

Development
          Corporation, Sears Holding Corporation,

Sears Canada Inc. and Lasalle
          Bank ABN Amro

Respondents

Eliezer Karp, for the appellants

Laura K. Fric and Geoffrey E.J.
          Grove, for Target Corporation

Eliot N. Kolers and Ellen M. Snow,
          for the Hudsons Bay Company and National Realty Development Corporation

Shawn T. Irving, for Sears
          Holdings Corporation and Sears Canada Inc.

Heard: June 10, 2011

On appeal from the order of Justice G.B. Morawetz of the
          Superior Court of Justice dated April 12, 2011.

APPEAL BOOK ENDORSEMENT

[1]

We agree with the reasons of Morawetz J.  This appeal has no merit.

[2]

The appeal is dismissed with costs as follows:

Target                         - $10,000
    all inclusive

HBC et al                   - $2,600 all
    inclusive

Sears                           - $2,600
    all inclusive


CITATION: Hussain v. Ehrentreu, 2011
      ONCA 453

DATE: 20110614

DOCKET: C52840

COURT OF APPEAL FOR ONTARIO

Feldman, Blair and LaForme JJ.A.

BETWEEN

Alamgir Hussain
and Jesmin Ara

Appellant

and

Moshe Ehrentreu

Respondent

Alamgir Hussain in person

Moses Muyal, for the respondent

Heard and endorsed: June 10, 2011

On appeal from the order of Justice Penny of the Superior
          Court of Justice dated October 21, 2010.

APPEAL BOOK ENDORSEMENT

[1]

Following the endorsement of Penny J. of October 21, 2010, the formal
    judgment was amended in accordance with his reasons to reflect the corrected interest
    calculation on $136,200, but the principal shown of $140,000 was not corrected.

[2]

We order that the correction be made in the formal order.

[3]

There is no basis to interfere with the order made by Penny J. of no
    costs.

[4]

Although the motion judge did not in his reasons deal with the
    appellants request for a stay of enforcement of the mortgage, the issue has
    been dealt with by two subsequent orders, one by a judge of this court, and one
    by a judge of the Superior Court.

[5]

In the result, the appeal is allowed in part to correct the formal
    judgment.  Otherwise it is dismissed.

[6]

As success was divided, there will be no costs of the appeal


CITATION:
L-3 Communication Spar
          Aerospace Limited v. CAE Inc., 2011 ONCA 435

DATE:
          20110606

DOCKET: C53222

COURT OF APPEAL FOR ONTARIO

Laskin, Goudge and Gillese JJ.A.

BETWEEN

L-3 Communication Spar Aerospace Limited

Applicant (Appellant)

and

CAE Inc.

Respondent

Brian C. Elkin, for the appellant

Adrian C. Lang and
Paloma

Ellard
, for the respondent

Heard:
June 3, 2011

On appeal from the judgment of Justice Stanley J. Kershman of
          the Superior Court of Justice, dated December 23, 2010.

APPEAL BOOK ENDORSEMENT

[1]

In our view the application judge interpreted Article
    25.3.1 correctly. The commercially reasonable interpretation is that a dispute
    over failure by SPAR to deliver information as required together with the cost
    consequences caused thereby is one that the parties were obliged to attempt to
    resolve between
themselves
. Failing agreement either
    party is entitled to take the dispute to arbitration. The application judge
    found that the failure to agree did not occur until at least the fall of 2007.
    We therefore agree that the CAE submission to arbitration is not time barred.

[2]

In light of this conclusion we need not deal with the
    issue of promissory estoppel.

[3]

The appeal must be dismissed with costs fixed at
    $14,431.59 all inclusive.

S. T. Goudge J.A.


CITATION:
Mason v.
Chem
-Trend Limited Partnership, 2011 ONCA 415

DATE: 20110601

DOCKET: C52707 (M39782)

COURT OF APPEAL FOR ONTARIO

Doherty, Moldaver and Feldman JJ.A.

BETWEEN

Tom Mason

Appellant (Applicant)

and

Chem
-Trend Limited Partnership

Respondent (Respondent)

Chris G.
Paliare
and Richard
          Stephenson, for the appellant

Karen Fields and Susan Crawford, for the respondent

Heard: April 13, 2011

Reasons Released: May 3, 2011

ENDORSEMENT

[1]

Further to
para
. 35 of the
    reasons for judgment released May 3, 2011, and following receipt of submissions
    from the parties on the costs of the application, costs of the application
    below to the appellant fixed at $17,000 inclusive of disbursements and H.S.T.

Signed:           Doherty
    J.A.

M.
    J. Moldaver J.A.

K.
    Feldman J.A.


CITATION: Matz v. Copley, 2011 ONCA 485

DATE: 20110630

DOCKET: C52932

COURT OF APPEAL FOR ONTARIO

MacPherson, Juriansz and Karakatsanis JJ.A.

BETWEEN

Harold Matz and Mary Matz

Plaintiffs (Appellants)

and

Normal Copley, Marilyn Copley and Castlerock Home
          Inspections

Defendants (Respondents)

Derek Fazakas, for the appellants

Philip Garbutt, for Castlerock Home Inspections

Marc Munro, for the Copley respondents

Heard and released orally: June 28, 2011

On appeal from the order of Justice Ramsay of the Superior
          Court of Justice, dated October 7, 2010.

ENDORSEMENT

[1]

The appellants, Harold and Mary Matz, appeal from the decision of Ramsay
    J. of the Superior Court of Justice dated October 7, 2010 dismissing their
    action against all defendants. He did so pursuant to two motions for summary
    judgment brought under the new Rule 20 of the
Rules of Civil Procedure
.
    The action related to alleged defects found in a house purchased by the Matzs
    from the Copleys. The Matzs sued the Copleys and the home inspector they had
    retained, Castlerock Home Inspections.
[2]

The appellants contend that the motion judge did not take a hard look at
    the evidence. We disagree. He reviewed the evidence of the Matzs expert, Gary
    Emsley, and that of Mrs. Copley and concluded that Emsleys evidence was
    insufficient to ground a case in fraud against the Copleys, which was the
    Matzs claim.
[3]

Nor did the motion judge err by awarding summary judgment in favour of
    Castlerock. The Castlerock inspection report clearly identified defects which
    Mr. Matz confirmed in his testimony. Moreover, the Castlerock report contained
    the limitation that 80 per cent of the foundation wall was not visible.
[4]

The appellants assert that the motion judges interaction with their
    counsel raises a reasonable apprehension of bias against the appellants and
    their counsel on the part of the motion judge. There is not a sufficient basis
    in this record to support such a serious allegation.
[5]

The appeal is dismissed. The Copleys and Castlerock are entitled to
    their costs of the appeal fixed at $7,500 each, inclusive of disbursements and
    applicable taxes.
J.C.
    MacPherson J.A.
R.G.
    Juriansz J.A.
Karakatsanis
    J.A.


CITATION: McLinden v. Payne, 2011 ONCA 439

DATE: 20110608

DOCKET: C53136

COURT OF APPEAL
          FOR ONTARIO

OConnor A.C.J.O., Feldman and LaForme JJ.A.

BETWEEN:

Samantha McLinden
, Matthew McLinden and Ashely
          McLinden, minors under the age of eighteen years, by their Litigation
          Guardian Samantha McLinden

Plaintiffs (
Appellant
)

and

Melissa Payne

Defendant

James L. Vigmond and Brian M. Cameron, for the appellant

Bruce Keay, for the Co-Operators General Insurance Company

Heard and released orally:
June 3, 2011

On appeal from the order of Justice
          M.P. Eberhard of the Superior Court of Justice, dated December 13, 2010.

ENDORSEMENT

[1]

The
    appellant appeals from the order of Eberhard J., refusing to permit the
    appellant leave to amend her Statement of Claim to add Co-Operators General
    Insurance Company as a defendant in this action.

[2]

The
    appeal raises two issues.  The first is
    whether s. 40(4) of the
Statutory Accident
    Benefits Schedule
precludes a person from making more than one application
    for a determination that he or she has suffered a catastrophic impairment.  Section 40(4) of the
Schedule
at the relevant time read as follows:

The
    determination by the designated assessment centre is binding on the insured
    person and the insurer, subject to the determination of a dispute, in
    accordance with sections 279 to 283 of the
Insurance
    Act
, relating to whether the impairment is a catastrophic impairment.

[3]

The
    language of the section does not specifically preclude multiple
    applications.  Indeed, counsel for Co-Operators
    fairly concedes that a person may bring a further application provided the
    application is not brought under the same sub-paragraph of the definition of a
    catastrophic impairment as a previous application.

[4]

The
    motion judge went further.  She found
    that a person could also bring a subsequent application based on the same sub-paragraph
    as a previous application provided that, there must be evidence of a change in
    circumstances such that the court is not simply being asked to consider the
    same condition already denied and not challenged by the procedures set out in
    the SABS legislation.

[5]

By
    this, we understand the motion judge to be saying that there must be a material
    change in the condition of the applicant.  If there is no such change, a further application is not permitted as it
    would amount to a reconsideration of the earlier decision.

[6]

We
    agree with the motion judges interpretation of s. 40(4), essentially for the
    reasons she gave.

[7]

The
    second issue is whether the motion judge erred in refusing the amendment to
    claim a catastrophic impairment based on the record before her.

[8]

Having
    found that the appellant could bring a second application under s. 40(4), the
    motion judge considered the material filed by the parties and determined that
    the appellant had not shown that her second application was anything other
    than a rehashing of the evidence that was found to be insufficient in her
    earlier application.  The motion judge
    went on to say that the present application appeared to be a dispute of the
    original denial which dispute was out of time.  We agree with the motion judges conclusions.

[9]

The
    appellant argues, however, that the motion judge erred in treating this matter,
    in effect, as a motion for summary judgment rather than as a motion under Rule
    26.  The appellant submits that on a
    motion for summary judgment, a fuller record on the issue of catastrophic
    impairment would have been filed.

[10]

In
    our view, it was open to the motion judge to consider the issue of potential prejudice
    to Co-Operators should she permit the appellant to amend the Statement of Claim
    and add Co-Operators as a party based on the record before her.  Both parties filed material on the motion
    addressing the issue of whether the appellants second application for catastrophic
    impairment was permissible.  We are not
    persuaded that the motion judge made an error in proceeding to address the
    issue before her under Rule 26.  We note
    that on the motion, neither party submitted that she should do otherwise.

[11]

In
    the result, the appeal is dismissed.

[12]

Costs
    to the respondent fixed in the amount of $5,000, inclusive of all applicable
    taxes.

D. OConnor A.C.J.O.

K. Feldman J.A.

H.S. LaForme J.A.


CITATION: Oblates of Mary Immaculate v. 3220605 Canada Inc.
      (Life Lease Associates of Canada), 2011 ONCA 481

DATE: 20110628

DOCKET: C51228

COURT OF APPEAL FOR ONTARIO

Armstrong, MacFarland and Watt JJ.A.

BETWEEN

The Oblates of
          Mary Immaculate, St. Peters Province and

Laurier Court
          Life Lease Non-Profit Residence Inc.

Plaintiffs (Appellants)

and

3220605 Canada
          Inc. carrying on business under the firm name and style of

Life Lease
          Associates of Canada, Gary Zock, Deborah Edwards,

John T. Clark,
          Clarks, Lynn Le Mesurier and Vice & Hunter

Defendants (Respondents)

William J. Sammon and S. T. Hazra, for the appellants
          (plaintiffs)

Eric Williams, for the respondents (defendants) John T. Clark
          and Clarks

Paul Webber for the respondents (defendants) Vice & Hunter

Heard:  June 15, 2011

On appeal from the judgment of Justice Julianne A. Parfett of
          the Superior Court of Justice, dated October 26, 2009.

By the Court:

[1]

The appellants appeal the dismissal of their action against John T.
    Clark, Clarks, Lynn Le Mesurier and Vice & Hunter.
[2]

The claims arise as the result of a failed life lease project on land
    owned by the appellants on Laurier Avenue in Ottawa, Ontario.  The respondents
    are lawyers and their respective law firms. 3220605 Canada Inc., Gary Zock and
    Deborah Edwards did not participate in the appeal.
[3]

The trial judge dismissed the action against the respondents before this
    court and granted judgment in the sum of $509,851.00 plus interest against
    3220605 Canada Inc.
[4]

The appellants submit that when the trial judge found that Clark was in
    a solicitor-and-client relationship with them, it was then not open to her to
    conclude that he was not in a conflict of interest.  Although not pleaded nor
    argued below, the appellants position in this court was the fact that Clark
    acted both for Life Lease Associates of Canada (LLAC) and for the appellants
    placed him in a conflict of interest position via-à-vis the appellants.
[5]

The respondent Clark argues that the trial judge erred in finding he was
    in a solicitor-and-client relationship with the appellants.  It is submitted on
    behalf of Clark, that the appellants were represented by their own counsel of
    choice, that the contract for the provision of legal services was between the
    appellants and LLAC and that Clark never provided services to the appellants
    that are traditionally performed by a lawyer in such circumstances. They say
    the appellants were represented by their own counsel of choice upon whom they
    relied.
[6]

The appellants further argue that the trial judge erred in finding Vice
    & Hunter was on a limited retainer to them and that her finding in this
    regard was contrary to the evidence.
[7]

We do not accept this submission.  The evidence of Mr. Vice, which it
    was open to the trial judge to accept, was that at the outset he clearly and
    unequivocally informed the appellants, with whom he enjoyed a long-standing
    relationship, that he knew nothing about life leases and would not advise them
    in respect to that concept.
[8]

Assuming without deciding that both respondents were in a
    solicitor-client relationship with the appellants  it remained for the
    appellants to prove, on a balance of probabilities, that any breach of duty on their
    part caused the appellants losses which are the subject of these proceedings.
[9]

The central issue in this appeal is whether the failure on the part of
    either or both of Clark and/or Vice Hunter to advise the appellants of the
    legal uncertainties about life leases caused their losses.
[10]

The position of OMI, based solely on the evidence of Father Rushton was
    that had they been aware of the legal uncertainties in relation to life
    leases, they would never have gone ahead with the project.
[11]

This evidence given in-chief, in response to a leading question from his
    own counsel, is problematic.  It is clear from his overall evidence that Father
    Rushton suffers from memory problems and also he left the particulars of this
    project to others.  The trial judge quite properly gave careful consideration
    to this retrospective evidence.  She concluded that OMI had been informed of
    the fact that there was no regulatory control of life leases in Ontario and
    that there were legal uncertainties that might arise from other statutes such
    as the
Ontario Human Rights Code
, the
Tenancy Protection Act
, the
Assessment Act
and the
Land Transfer Tax Act
and concluded:
None of these legal uncertainties caused OMI to
    abandon the Laurier Court project.  Therefore, it is also unlikely that the
    information that there were additional legal uncertainties relating to the
    application of the
Planning Act
and the
Residential Complex Sales Representations
    Act
would have caused OMI to abandon the Laurier Court Project.
[12]

In our view, the trial judges conclusion in this regard is supported by
    the record.
[13]

Even assuming a breach of duty on the part of both Vice and Clark for
    failure to inform OMI of the legal uncertainties related to the life lease
    concept resulting from
Planning Act
and
Residential Complex Sales Representations
    Act
,

any such breach did not, on the trial judges findings, cause
    the loss.
[14]

In our view, the record supports her conclusion.
[15]

The appellants also appeal the trial judges damages award and submit
    that they should be entitled to the entire amount of their damages, which they
    calculate to be $1,671,552 without any reduction.
[16]

The evidence disclosed that at the time of sale the property before
    proceeding with this project was appraised at $1.4 million  at that point the
    property had only been excavated and a developer, who subsequently built on the
    property, paid the appellants $1.8 million for the property.  At trial the
    plaintiffs, the appellants in this court, took the position that the defendants
    should get credit for the $400,000 being the difference of the appraised and
    sale value.  In this court they argue there should be no reduction.
[17]

The trial judge concluded that the damages to which the appellants were
    entitled were the losses incurred when the appellants decided to proceed to
    construction despite the fact they had not sold the requisite number of units.
[18]

Other additional costs were incurred as a result of the decision to
    embark on the project in the first place. Those costs arising from that original
    decision were, on the trial judges findings, the responsibility of none of the
    defendants (neither the respondents before this court nor the defendants who
    took no part in the appeal).
[19]

The trial judge concluded that the costs properly attributed to the
    decision to proceed to construction included:

Sponsor
        Development Costs to April 27/03        $ 25,296

Construction
        Costs paid to Warlyn                       $815,360

Fencing                                                                      $
        2,604

Legal Fees
$
        66,591

$909,851

[20]

From this sum she deducted the $400,000 difference between the appraised
    value and the sale price, which represented the increased value of the property,
    by reason of the excavation, to the developer who acquired the property.
[21]

A trial judges damage calculation is entitled to deference in this
    court.  Absent an error in principle, this court will generally not interfere. In
    our view, there is no such error in this case.
[22]

The appeal is dismissed.
[23]

Costs of the appeal to the respondent Clark fixed in the sum of $15,000
    and to the respondents, Le Mesurier and Vice & Hunter, fixed in the sum of
    $10,000, both sums inclusive of disbursements and HST.
Robert
    P. Armstrong J.A.
J.
    MacFarland J.A.
David
    Watt J.A.
RELEASED:  June 28, 2011 RPA


CITATION: Olson v. Dowswell, 2011 ONCA 463

DATE: 20110620

DOCKET: C53098

COURT OF APPEAL FOR ONTARIO

Goudge, MacFarland and Watt JJ.A.

BETWEEN

Tracey Leigh Olson

Plaintiff (Respondent)

and

Timothy Dowswell

Defendant (Appellant)

Timothy Dowswell, acting in person

Greg Botzam, for the respondent

Heard: June 17, 2011

On appeal from the judgment of Justice John A. Desotti of the
          Superior Court of Justice, dated November 10, 2010.

APPEAL BOOK ENDORSEMENT

[1]

Given the material the appellant placed before him, we see no error in
    the order of Desotti J. The appeal is dismissed. Costs to the respondent fixed
    at $200.

S.T. Goudge J.A.


CITATION:
Ontario v. Lipsitz, 2011
          ONCA 466

DATE:  20110622

DOCKET: C51330-C51287

COURT OF APPEAL FOR
          ONTARIO

OConnor
          A.C.J.O., Laskin and MacPherson JJ.A.

BETWEEN

Her Majesty the Queen in Right of the Province of
          Ontario, College of Physicians and Surgeons of Ontario, Dr. John Fleetham,
          Caroline Kemp, Dr. Daniel Klass, Dr. Michael Fitzpatrick, Sandra Halko, Dr.
          Rocco Gerace, Karen Stanley, Marsha Barnes, Dr. Mohamed R. Goolam Hussain,
          Lori Davis, Tracey Marshall, Jeff Morgenstern, and Bruce Kirton

Defendants (Appellants/                                                                                Respondents by way of cross-appeal)

and

Dr. Jeffrey Lipsitz, Sleep Disorders Centre of
          Metropolitan Toronto Inc., Sleep Disorders Centre  Ottawa Inc., and Sleep
          Clinic Network of Ontario Inc.

Plaintiffs (Respondents/Appellants by way of cross-appeal)

Michelle Gibbs, for the appellants College of Physicians
          and Surgeons et al.

Kim Twohig and Lise Favreau, for the appellants Her
          Majesty the Queen in Right of Ontario et al.

Neil M. Abramson and Marco Falco, for the respondents

Heard:  March 28,
          2011

On appeal from the order of Justice E. Belobaba of the
          Superior Court of Justice, dated October 20, 2009.

OConnor A.C.J.O.:

[1]

The
    two main issues on these appeals
[1]
are: (1)
    whether the underlying action should be dismissed because the appellants
    (defendants) are immune from suit under s. 38.1 of the
Independent Health Facilities Act
, R.S.O. c.I.3 (the
IHFA
) and (2) whether the underlying
    action should be stayed as an abuse of process.

Facts

[2]

From
    approximately 1987 to December 2006, Dr. Lipsitz and his associated companies
    (Dr. Lipsitz) operated a network of independent health facilities, which
    specialized in treating sleep disorders.

[3]

In
    1998, the province amended the
IHFA
to include sleep study facilities.  Those
    facilities already operating were grandparented for one year during which time
    the operators could continue to operate and apply for licences under the new
    legislative regime.  In order to obtain a
    licence, an operator was required to show that the facility conformed to
    certain quality standards.

[4]

The
IHFA
contains the regulatory scheme under
    which the Director, appointed under the
Act
,
    is responsible for making decisions in relation to the licensing and operation
    of independent health facilities in Ontario.  The Director has the authority to issue or refuse to issue licences to
    operate and to impose conditions on licences.  The Director also has the authority to suspend, revoke or refuse to
    renew a licence and to amend the conditions of a licence.

[5]

The
    Directors decisions are directed at ensuring that independent health
    facilities are operated in accordance with appropriate standards and in a
    manner not prejudicial to the health, safety and welfare of any person.

[6]

Pursuant
    to the
IHFA
, the Director may request
    that the Registrar of the College of Physicians and Surgeons of Ontario (the CPSO)
    appoint individuals to conduct inspections or assessments of the quality and
    standards of services provided by an independent health facility.

[7]

Facility
    operators who are dissatisfied with the decisions or proposed decisions of the
    Director have a right of appeal to the Health Services Appeal and Review Board
    (HSARB) and from there to the Divisional Court on a question of law.

[8]

In
    June 1999, Dr. Lipsitz applied for licences for the 12 sleep disorder centres
    he was operating at that time.

[9]

The
    Director asked the CPSO to conduct pre-licensing inspections and assessments of
    seven of the centres.  Those inspections
    triggered what turned out to be a series of disputes between Dr. Lipsitz on the
    one hand and the Director and the CPSO on the other.  The essential aspects of these disputes
    followed a pattern and for the purposes of these appeals, need only be briefly
    summarized.

[10]

Over
    the years following Dr. Lipsitzs initial applications for licences, the CPSO,
    at the request of the Director, carried out a number of inspections and
    assessments of Dr. Lipsitzs centres.  On
    several occasions, the CPSO advised the Director that Dr. Lipsitzs centres
    were not being operated in accordance with appropriate standards and in some
    instances that they presented a risk to the health, safety and welfare of
    persons.  On receiving the reports, the
    Directors
[2]
notified
    Dr. Lipsitz that they proposed to suspend or revoke Dr. Lipsitzs licences to
    operate or to take other regulatory action such as requiring certain terms to
    be complied with as a condition of issuing of a licence.

[11]

In
    each instance, Dr. Lipsitz immediately appealed the Directors decision or
    proposed decision to the HSARB.  Pending
    the appeals, the Director permitted Dr. Lipsitz to continue to operate in accordance
    with specified standards.  Before any of
    the appeals were heard by the HSARB, Dr. Lipsitz entered into Minutes of
    Settlement with the Director and the CPSO on terms and conditions that
    permitted him to continue to operate or to transfer operating licences to
    others.  In each case, Dr. Lipsitz
    consented to an order of the HSARB dismissing his appeal.

[12]

In
    2007, Dr. Lipsitz decided to transfer the licences for the remaining centres he
    was then operating.  The Director agreed
    to the transfers.

Dr. Lipsitzs Action

[13]

In
    2008, Dr. Lipsitz commenced the action that underlies these appeals.  In his action, he sued two categories of
    defendants:  1)  the Ontario defendants, i.e. the Ontario
    Crown, two individuals who were Directors under the
IHFA
during the relevant time period, and two others who were
    managers of the Independent Health Facility Program (the Ontario appellants);
    and 2) the College defendants, i.e. the CPSO and nine individuals who were
    College employees or appointees and were involved in the inspections and
    assessments of Dr. Lipsitzs centres (the College appellants).

[14]

Dr.
    Lipsitzs statement of claim is based on the intentional torts of conspiracy,
    intentional interference with economic relations, abuse of public office, and
    abuse of process.  Throughout, he alleges
    bad faith on the part of the appellants.

[15]

In
    his statement of claim, Dr. Lipsitz alleges that from 2001 to 2007, the
    appellants engaged in a closure campaign.  As part of that campaign, they routinely engaged in excessive and unreasonable
    investigations and assessments and took reckless and unjustified steps to close
    his sleep disorder centres.  This
    improper conduct required him to operate the centres under unreasonable and
    expensive restrictions designed to make it impossible for him to continue.

[16]

As
    a result of the appellants actions, Dr. Lipsitz agreed to onerous undertakings
    in order to allow him to continue to operate.  Ultimately, after having been harassed and intimidated, Dr. Lipsitz was
    forced to close or sell all of his sleep disorder centres.  He was forced to sell at fire sale
    prices.

[17]

Dr.
    Lipsitz also alleges that as part of the closure campaign the CPSO improperly
    initiated investigations of his professional conduct under s. 75(a) of the
Health Professions Procedural Code
.

[3]

[18]

Dr.
    Lipsitz pleads that the appellants closure campaign resulted from the
    appellants desire to restrict the growth of his business, to minimize
    government spending and to diminish the relatively large amount of billings
    which his centres realized on an annual basis.

The Motion

[19]

After
    filing their statements of defence, the appellants moved to dismiss Dr.
    Lipsitzs action or to strike his statement of claim under Rules 20, 21.01(3)(d),
    and 25.11 of the
Rules of Civil
    Procedure.

[20]

The
    grounds of the motion included the following:  1) Dr. Lipsitzs claim for compensation is barred by s. 38.1 of the
IHFA
, which grants the appellants
    immunity from paying compensation; 2) the claim is an abuse of process because
    it is a collateral attack on the administrative proceedings for resolving
    licensing issues under the
IHFA
; 3)
    the claim is an abuse of process because Dr. Lipsitz is seeking to re-litigate
    issues that were or should have been disposed of in Dr. Lipsitzs appeals to
    the HSARB; 4) Dr. Lipsitzs allegation about the CPSOs investigations pursuant
    to s. 75(a) of the
Health Professions
    Procedural Code
should be struck pursuant to s. 36(3) of the
Regulated Health Professions Act, 1991
;
    and 5) Dr. Lipsitzs statement of claim does not disclose a reasonable cause of
    action.

[21]

The
    motion judge dismissed the appellants motion with the exception of the fourth
    issue listed in the preceding paragraph.  The motion judge struck those portions of Dr. Lipsitzs claim relating
    to the CPSOs investigations of Dr. Lipsitzs professional conduct.

[22]

I
    will refer to the motion judges reasons in more detail in my discussion of the
    issues.

Issues

[23]

Dr.
    Lipsitz raises a preliminary issue on these appeals.  He argues that these appeals should be
    dismissed because the appellants raised the same arguments on a motion for
    leave to appeal to the Divisional Court and were denied leave.

[24]

The
    appellants grounds of appeal can conveniently be addressed in the following
    manner.  The appellants argue that the
    motion judge erred in failing to find that:

a)

they are entitled to immunity under
    s. 38.1 of the
IHFA
;

b)

Dr. Lipsitzs claim is an abuse of
    process because it seeks to re-litigate issues finally determined in the
    regulatory process; it is a collateral attack on the orders made in the
    regulatory process; and the regulatory process under the
IHFA
has exclusive jurisdiction over the matters raised in Dr.
    Lipsitzs claim.

[25]

Dr.
    Lipsitz cross-appeals the motion judges order striking the portions of his
    statement of claim that relate to the CPSOs investigation under s. 75(a) of
    the
Health Profession Procedural Code
.

Dr. Lipsitzs Preliminary Argument

[26]

Dr.
    Lipsitz argues that the appeals should be dismissed because the appellants were
    denied leave to appeal to the Divisional Court based on the same grounds they
    now seek to advance in this court.  In
    particular, Dr. Lipsitz refers to the appellants arguments with respect to
    immunity under s. 38.1 of the
IHFA
and abuse of process.

[27]

Dr.
    Lipsitz argues that the doctrines of abuse of process, issue estoppel,
res judicata
and collateral attack
    operate to preclude this court from rehearing the same issues that they argued
    on the leave motion to the Divisional Court.  As part of this argument, he submits that the motion judges orders with
    respect to immunity and abuse of process were interlocutory and, therefore,
    appealable to the Divisional Court with leave and not to this court.

[28]

I
    do not accept these arguments.  In my
    view, the motion judges orders with respect to immunity and the abuse of process
    issues were final in nature and as such are properly appealable to this
    court.  Moreover, I am satisfied that the
    appellants took that position on the argument of the motions for leave to
    appeal to the Divisional Court.

[29]

In
    their notices of motion seeking leave to appeal to the Divisional Court, the
    appellants raised the immunity and abuse of process issues.  However, contemporaneously, they also filed
    notices of appeal to this Court raising the same issues.  Apparently, at that point, they were uncertain
    as to the proper route of appeal.

[30]

In
    their facta on the leave motions to the Divisional Court or in oral argument,
    the appellants took the position that the motion judges orders with respect to
    the two issues, immunity and abuse of process, were final orders and,
    therefore, properly appealable to this court.

[31]

In
    para. 38 of their factum on the motion at the Divisional Court, the Ontario
    appellants set out their position as follows:

In
    this case, it is the position of the Ontario defendants that the motion judges
    order in respect of the issues of statutory immunity and abuse of process is
    final as the decision appears to preclude the Ontario Defendants from raising
    these defences at the trial of the action.  A separate appeal to the Court of Appeal for Ontario has therefore been
    launched on these aspects of the motion judges decision.  In the event that the court does not consider
    these issues to have been finally decided, the Ontario defendants wish to argue
    that leave to appeal should also be granted on these aspects of the order.

[32]

The
    Ontario appellants set out the authorities in support of their position that
    the orders were final.

[33]

Before
    the Divisional Court, the College appellants took essentially the same position
    as the Ontario appellants.  After setting
    out some arguments with respect to the applicability of s. 38.1 as a defence to
    the claims against them, they concluded in para. 27 of their factum by saying:

The
    College Defendants submit that some of the findings and conclusions of the
    motions judge in relation to s. 38.1 of the
IHFA
may be final, giving rise to an automatic right of appeal to the Court of
    Appeal.  However, the fact that the motions
    judge also found there to be genuine issues for trial as to which aspects of
    the claim are barred by s. 38.1 of the
IHFA
and which aspects are not, may be found by this honourable court to be interlocutory,
    in which case, the College Defendants respectively seek leave to appeal in
    regards to these issues as well.

[34]

Neither
    set of appellants included abuse of process arguments in their factum.

[35]

In
    their motions for leave to the Divisional Court, the appellants raised one
    issue that all parties accepted was interlocutory; namely, whether the motion
    judge erred in finding that the amended statement of claim disclosed a
    reasonable cause of action.

[36]

The
    leave judge dismissed the appellants motions for leave.  She agreed with the motion judge that the
    statement of claim disclosed a reasonable cause of action.  She also addressed and agreed with the motion
    judges conclusions with respect to s. 38.1 and the abuse of process
    issues.

[37]

On
    the basis of the foregoing, I do not conclude that the appellants, in the end,
    sought leave to appeal the immunity and abuse of process issues to the
    Divisional Court.

[38]

Moreover,
    I am satisfied that the portion of the motion judges order with respect to s.
    38.1 that the appellants challenge and their abuse of process arguments are
    properly appealable to this court.  As to
    s. 38.1, the appellants challenge is directed only at the motion judges
    interpretation of what acts are protected by s. 38.1.  In this respect, the motion judge said the
    following, at para. 14:

Inspections,
    investigations and assessments (carried out, in the main, by College officials
    appointed under the
IHFA
) are not
    listed actions in s. 38.1 and are therefore not accorded statutory immunity.

[39]

This
    part of the motion judges ruling finally determines the scope of the
    protection afforded by s. 38.1 for purposes of this action.  If it stands, it would not be open to the
    appellants to later argue that s. 38.1 protects inspections, investigations and
    assessments in some circumstances.  Thus,
    that part of the motion judges ruling is final in nature.

[40]

Similarly,
    with respect to the appellants abuse of process arguments, the motion judge
    finally determined those issues for purposes of this action.  At para. 20, he said [t]he collateral attack
    doctrine does not apply.  At para. 29,
    he said [t]here is no abuse of process.

[41]

The
    motion judge did not restrict his ruling regarding abuse of process to the
    preliminary stage of the proceedings at which he was hearing the motion.  He did not leave any of the abuse of process
    arguments open for trial.  In my view,
    the motion judges orders with respect to abuse of process were final in nature
    and, therefore, properly appealable to this court.

[42]

In
    summary, I would not dismiss the appeals on the preliminary basis sought by Dr.
    Lipsitz.

Section 38.1

[43]

The
    appellants argue that the motion judge erred in rejecting their submission that
    s. 38.1 of the
IHFA
provided them
    with a complete answer to Dr. Lipsitzs claims.

[44]

Section
    38.1 reads as follows:

No
    Compensation

38.1  No compensation shall be payable by the
    Crown, the Minister, the Director or any other person engaged in the
    administration of this Act
in respect of any loss suffered as a result of
the Minister or Director refusing to issue or renew a licence, revoking or
    suspending a licence, imposing conditions or limitations on a licence, amending
    conditions or limitations on a licence or as a result of enforcing the
    prohibitions under s. 3.  [Emphasis
    added.]

[45]

The
    appellants raised their s. 38.1 argument as part of a motion to summarily
    dismiss Dr. Lipsitzs action pursuant to Rule 20.

[46]

In
    dismissing the motion, the motion judge noted that s. 38.1 is specific about
    what losses will not be compensated:  namely, any loss suffered as a result of the actions of the Minister or
    Director set out in the section.  The
    motion judge stated that if the claim for compensation is for losses sustained
    as the result of something other than one of the five actions listed [in s.
    38.1], then immunity is not available.

[47]

However,
    the motion judge went on to say that [i]nspections, investigations and
    assessments  are not listed actions in s. 38.1 and are therefore, not accorded
    statutory immunity.

[48]

In
    the result, the motion judge held that the need to determine what part of Dr.
    Lipsitzs losses were the result of inspections, investigations and/or
    assessments and what part was the result of one of the five orders referred to
    in s. 38.1 raises a genuine issue for trial.  He, therefore, dismissed the motion.

[49]

The
    appellants argue that the motion judge erred in that part of his reasons where
    he said that inspections, investigations and assessments are not accorded
    statutory immunity.  I agree that the
    impugned statement incorrectly narrows the scope of the protection afforded by
    s. 38.1.  In my view, the section provides
    immunity for those conducting inspections, investigations and assessments to
    the extent that the losses for which compensation is claimed result from one of
    the actions specified in the section.

[50]

The
    issue is one of statutory interpretation.  The well accepted approach to interpreting a statute is that the words
    of an
Act
are to be read in their
    entire context and in their grammatical and ordinary sense harmoniously with
    the scheme of the
Act
, the object of
    the
Act
and the intention of
    Parliament: see, for example,
Canada
    (Citizenship and Immigration) v. Khosa,
[2009] 1 S.C.R. 339, at para. 38.
    This approach typically involves courts considering the language of the
    provision in issue, the context in which the provision is found, and the
    purpose and scheme of the legislation.

[51]

The
    language in s. 38.1 is straightforward.  It can best be analyzed in two parts.  The first relates to the entities or individuals to whom the section
    affords protection.  The language is
    expansive.  It applies to the Crown, the
    Minister, the Director and to anyone who is engaged in the administration of the
Act
.  Significantly, I suggest, the section may include persons carrying out
    the activities mentioned by the motion judge, namely, investigations,
    inspections or assessments.  Thus, if
    investigators, inspectors or assessors are engaged in the administration of the
Act
, the first part of the
    requirement for immunity under s. 38.1 has been met.

[52]

The
    second part of s. 38.1 sets out the types of losses which are shielded by the
    section.  The effect of the second part
    is to limit the protection to only losses suffered as a result of the Minister
    or Director doing one of the actions specified in the section.  These actions are regulatory orders and are
    central to the decision-making scheme of the
IHFA
.   Thus, in general terms, s. 38.1 provides
    immunity for losses resulting from certain regulatory orders made under the
Act
.

[53]

Thus, administrative actions such as
    investigations, inspections and assessments that lead to an order referred to
    in s. 38.1 are protected for losses resulting from the order.  For example, if a Director refuses to issue a
    licence based on an inspection report, and damages ensue, not only does the
    Director have immunity for those damages, so does the inspector who prepared
    the report.  There does, however, have to
    be a link between the inspector and the order expressly protected by s. 38.1.

[54]

I
    note that s. 20(1) of the
IHFA
requires the Director to give notice to a licensee when he or she proposes to
    make some of the types of orders referred to in s. 38.1 in other than emergency
    situations.  Under s. 20(1), the Director
    must give a licensee notice if the Director proposes to revoke, suspend or
    refuse to renew a licence.  The section
    requires the Director to give reasons for the proposal.  The
licencee
is
    entitled to appeal the Directors proposed decision to the HSARB.

[55]

The
    proposal process is an integral part of the Directors decision-making process by
    which he or she may revoke, suspend or refuse to renew a licence.  As such, I see no reason why the protection
    afforded by s. 38.1 should not be interpreted to include decisions of Directors
    made under s. 20(1).

[56]

I see nothing in the context in which s. 38.1
    is found or in the purpose of the section or the statutory scheme that suggests
    an interpretation other than the one that emerges from the ordinary meaning of
    the language in the section.

[57]

In
    considering the context and statutory scheme, it is important to examine the
    other section in the
IHFA
that
    provides immunity to individuals and entities.

[58]

Section
    38(1) reads as follows:

Immunity

38(1)  Despite sections 5 and 23 of the
Proceedings Against the Crown Act
, no
    action or other proceeding for damages or otherwise shall be commenced against
    the Crown, the Minister, the Director, an inspector or assessor appointed under
    this Act or an officer, employee or agent of the Crown or of the College, the
    Registrar, the college, the council of the college or a committee established
    by the council or a member of the council or the committee for any act done or
    performed in good faith in the performance or intended performance of any duty
    or function or in the exercise or intended exercise of any power or authority
    under this Act or the regulations, or for any neglect, default or omission in
    the performance or exercise in good faith of any duty, function, power or
    authority under this Act or the regulations.

[59]

In
    my view, s. 38(1) and 38.1 can be read harmoniously.  Read together they create a logical scheme
    for providing immunity to individuals and entities carrying out functions under
    the
IHFA.

[60]

Section
    38(1) is a type of umbrella clause.  Unlike s. 38.1, the losses for which s. 38(1) provides immunity are not
    limited to losses suffered as a result of specific actions of the Minister or
    Director.  Section 38(1) prohibits an
    action being taken against any of the named individuals and entities for
    damages resulting from an act or function carried out under the
Act
.  In that respect, the immunity under s. 38(1) is broader than that
    provided by s. 38.1.

[61]

However,
    the immunity provided by s. 38(1) is limited by a specific good faith
    requirement.  Thus, acts or omissions are
    only protected under s. 38(1) if the person or entity acted in good faith.

[62]

Section
    38.1 provides immunity for a smaller category of losses than s. 38(1).  Losses are included in the protection
    afforded by s. 38.1 only if they result from one of the actions specified in
    the section.  The protection provided by
    s. 38.1, however, is not limited by a good faith requirement.

[63]

Section
    38(1) was part of the original
IHFA
enacted in 1989.  Section 38.1 was added
    in 1996 as part of the
Savings and
    Restructuring Act
.  It seems clear
    that in 1996, the Legislature intended to extend immunity to losses resulting
    from the regulatory decisions specified in s. 38.1 without the requirement of
    showing the actions resulting in those losses were done in good faith.

[64]

While
    the types of actions that are shielded by s. 38.1 are not subject to a good
    faith requirement, they are subject to the checks that govern regulatory
    decisions.  The processes that lead to the
    regulatory orders referred to in s. 38.1 are subject to the administrative law
    requirements of procedural fairness and the orders themselves are subject to a
    statutory right of appeal.

[65]

Thus,
    in my view, s. 38.1 embodies a reasonable policy of providing immunity for
    losses resulting from the regulatory decisions specified in the section without
    a good faith requirement.  The
    Legislature has sought to limit civil lawsuits that would, in effect, be a
    challenge to the regulatory decisions referred to in the section, thereby
    promoting the finality of the regulatory decisions.

[66]

I
    turn now to the application of s. 38.1 to this case.

[67]

The
    appellants fall within the group of people or entities that are afforded
    protection by s. 38.1.  The appellants
    include the Crown, two Directors under the
Act
,
    the CPSO, and others who at the time of the events giving rise to the claim
    were engaged in the administration of the
Act
in the sense that they were performing functions contemplated by the
IHFA
.

[68]

The
    thrust of Dr. Lipsitzs claim is that the appellants engaged in a closure
    campaign to force him out of business.  That campaign culminated in a series of Directors orders or proposed
    orders that ultimately led him to either close or sell his sleep disorder centres
    at a significant loss.  To the extent
    that the losses claimed by Dr. Lipsitz are found to have been losses suffered
    as a result of one or more of the Directors orders or proposed orders then s.
    38.1 would apply to preclude compensation for those losses.

[69]

The
    question then becomes whether Dr. Lipsitz has made any claims which are not the
    result of Directors orders or proposed orders covered by s. 38.1.

[70]

As
    I see it, a significant amount of the losses for which Dr. Lipsitz seeks
    compensation come within the protection afforded by s. 38.1.  However, I am not able to conclude that there
    are no claims for losses that fall outside the immunity provided by the section.

[71]

In
    order to properly address the issue of what claims are protected, it will be
    necessary to make factual findings respecting what losses were the result of
    Directors orders covered by the section and what, if any, losses were not.

[72]

From
    the statement of claim, it appears that a large portion of the losses claimed
    by Dr. Lipsitz result from the regulatory orders covered by s. 38.1.  However, some of the alleged losses may
    result from actions other than those protected by s. 38.1.  For example, in para. 39, Dr. Lipsitz alleges
    that the appellants caused harm to the plaintiffs (Dr. Lipsitz and his associated
    companies) by doing a number of different things.  Two of those are:

·

routinely
    engaging in false and unfairly critical reporting; and

·

undertaking
    a campaign of harassment and intimidation through excessive and unreasonable
    investigations and assessments.

[73]

In
    para. 7 of his affidavit, Dr. Lipsitz says:  the repeated and unnecessary
    inspections imposed by the Defendants caused an unbearable financial strain on
    me and on the Corporate Plaintiffs.

[74]

In
    paras. 46-54 of the statement of the claim, Dr. Lipsitz alleges that the
    Ministry implemented policy changes for the purpose of maliciously slowing the
    growth of his sleep business.

[75]

A
    court will be required to make factual findings and determine if any of the
    claimed losses result from actions other than those protected by s. 38.1.  In my view, those findings can only fairly be
    made at a trial in which the evidence can properly be assessed.  In the result, I agree with the motion judge
    that there needs to be a trial of an issue to determine what claims, if any,
    fall outside s. 38.1.

[76]

Finally,
    and very importantly, I note that even if some of the losses claimed are found
    to fall outside of the protection afforded by s. 38.1, those against whom the
    losses are claimed will almost certainly be immune from action under s. 38(1) if
    their actions are found to have been done in good faith.

Abuse of Process

[77]

Assuming
    some parts of Dr. Lipsitzs claims survive the immunities provided by s. 38.1
    and s. 38(1), it becomes necessary to consider the appellants argument that
    the motion judge erred in not dismissing or striking those claims as an abuse
    of process.

[78]

In
    making the abuse of process argument, the appellants rely upon Rules 21.01(3)(d)
    and 25(11).

[79]

The
    appellants primary argument is that Dr. Lipsitzs action, at its core, is an
    attempt to re-litigate issues that were the subject of the regulatory decisions
    of the Directors and the orders of the HSARB dismissing Dr. Lipsitzs
    appeals.  The HSARBs orders dismissing
    the appeals, which resulted from settlement agreements, finally determined the
    issues raised in the appeals.  Those
    issues cannot be raised again in his subsequent civil action.

[80]

The
    motion judge rejected the appellants abuse of process argument.  His reasoning was twofold:

1)

Dr. Lipsitzs claim that the appellants
    had conducted a closure campaign was not apparent to Dr. Lipsitz until long
    after the appeals had been settled; and

2)

In any event, Dr. Lipsitzs claim
    that the appellants engaged in a closure campaign could not have been
    adjudicated or remedied by the HSARB, essentially because the Board could not award
    damages.

[81]

I
    would not interfere with the motion judges conclusion that the action should
    not be dismissed or struck as an abuse of process.  However, unlike the motion judge, I would not
    preclude the appellants from raising the abuse of process argument at
    trial.

[82]

I
    agree with the motion judge that there needs to be a trial to determine whether
    the settlement agreements should operate to preclude Dr. Lipsitz from making
    the claims raised in his action.  If Dr.
    Lipsitz establishes that there was a closure campaign and that he was unaware
    of it at the time he entered into the settlement agreements, then arguably the
    settlement agreements and the resulting dismissals of his appeals would not be
    a basis for barring his civil case.

[83]

If
    on the other hand, a court were to find that the settlement agreements were not
    tainted as Dr. Lipsitz alleges, then, in my view, it would be open to a court
    to conclude that Dr. Lipsitzs civil claim or large parts of it are barred as
    an attempt to re-litigate issues that were decided or could have been decided
    in the regulatory process.

[84]

There
    is a significant overlap between the issues that Dr. Lipsitz raised in his
    appeals and those in his civil action.  For example, in each of his appeals, Dr. Lipsitz asserted that the
    Director had erred in issuing the orders under appeal because the Director had
    wrongly concluded that Dr. Lipsitz was not operating the sleep disorder centres
    in accordance with appropriate standards and, in some instances, was operating
    the centres in a way that presented risks to the health and safety of
    persons.  Dr. Lipsitzs position was that
    he had operated the centres at all times in accordance with appropriate
    standards and that there were no risks to health or safety.

[85]

Dr.
    Lipsitz negotiated settlements of the appeals and the terms of the settlements
    permitted him to continue operating or to sell the centres involved.  He agreed that the appeals be dismissed and
    the Board acted upon those agreements in dismissing his appeals.

[86]

In
    the civil action, Dr. Lipsitz takes exactly the same position as he had taken
    in the appeals to the HSARB.  He asserts
    that he operated all of the sleep disorder clinics in accordance with
    appropriate standards and did not create risks to health or safety.

[87]

In
    my view, it would be open for a court in the civil action to determine that Dr.
    Lipsitz is precluded from re-litigating the factual issues of whether he
    operated the clinics in conformity with appropriate standards because those
    issues had already been resolved in the regulatory proceedings.

[88]

Moreover,
    I do not consider the fact that the HSARB does not have jurisdiction to award
    damages to be dispositive of whether the regulatory proceedings can operate as
    a bar to the civil claim or parts of it.  It may be open to a court to bar the re-litigation of factual issues if
    it concludes that those issues were finally determined or could have been
    determined in the regulatory proceedings in which Dr. Lipsitz participated.

[89]

As
    part of the abuse of process argument, the appellants argue that the regulatory
    process under the
IHFA
was the
    exclusive forum for resolving the issues raised in the civil action. They also
    argue that Dr. Lipsitzs civil action is a collateral attack on the decisions
    of the Directors and the orders of the HSARB dismissing his appeal from those
    decisions.

[90]

In
    my view, these arguments are best left for trial and can be addressed after the
    court has determined what parts of Dr. Lipsitzs civil claims are an attempt to
    re-litigate and what parts, if any, are not.  With the benefit of that analysis, the court will be in a better
    position to determine whether there are other bases for applying the doctrine
    of abuse of process to bar Dr. Lipsitzs claim.

[91]

In
    the result, I agree with the motion judge that Dr. Lipsitzs suit should not be
    stayed at this stage on the basis of abuse of process.  However, unlike the motion judge, I would not
    finally determine the appellants abuse of process arguments.  For the reasons set out above, I am of the
    view that the appellants abuse of process arguments should remain open at
    trial.

The Cross-Appeal

[92]

Dr.
    Lipsitz asks this court to set aside that portion of the motion judges order
    striking his allegations pertaining to the Colleges investigation of him under
    s. 75(a) of the
Health Professions
    Procedural Code
.

[93]

Dr.
    Lipsitz pleaded that as part of the closure campaign, the College appellants
    began investigations into Dr. Lipsitzs professional conduct, and those
    investigations were ultimately closed without any action being taken.

[94]

In
    striking the allegations involving the Colleges investigations, the motion
    judge relied upon s. 36(3) of the
Regulated
    Health Professions Act, 1991
(
RHPA
)
,
the relevant part of which provides
    that no report or document prepared for a proceeding under a health profession
    Act is admissible in a civil proceeding.

[95]

Section
    36(3) reads as follows:

No
    record of a proceeding under this Act, a health profession Act or the
Drug and Pharmacies Regulation Act
, no
    report, document or other thing prepared for or statement given at such a
    proceeding and no order or decision made in such a proceeding is admissible in
    a civil proceeding other than a proceeding under this Act, a health profession
    Act or the
Drug and Pharmacies Regulation
    Act
, or a proceeding relating to any order under ss. 11.1 or 11.2 of the
Ontario Drug Benefits Act
.

[96]

The
    investigations into Dr. Lipsitz were conducted pursuant to s. 75(a) of the
Health Professions Procedural Code
,
    which, in accordance with section 4 of the
RHPA,
is deemed to be part of each health profession act. The
Code
is also found in schedule 2 of the
RHPA,
and is thus clearly within the
    ambit of s. 36(3).

[97]

Dr.
    Lipsitz makes three arguments why the motion judge erred.

[98]

First,
    he says that s. 36(3) only applies to a s. 75(a) investigation when the
    investigation is initiated by an external complaint.  It does not apply, he argues, when the
    College initiates the investigation and no hearing results.  Two of the s. 75(a) investigations conducted
    by the College with respect to Dr. Lipsitz were prompted by internal
    administrative decisions, not external complaints.  None of the investigations resulted in a
    hearing.

[99]

I
    do not accept this argument.  In my view,
    it places an unduly narrow interpretation on s. 36(3).

[100]

The
    language of s. 36(3) does not support the interpretation urged by Dr.
    Lipsitz.  The relevant part of the
    section refers to documents prepared for  a proceeding.  That language does not distinguish between
    proceedings initiated by external complaints and those initiated by the College
    internally.

[101]

Moreover,
    the narrow interpretation proposed by Dr. Lipsitz is not consistent with the
    purposes of the section.  In
M.F. v. Sutherland
(2000), 188 D.L.R. (4
th
)
    296 (Ont. C.A.), at paras. 29 and 31, Laskin J.A. explained the purpose of the
    section as follows:

The
    purpose of s. 36(3) is to encourage the reporting of complaints of professional
    misconduct against members of a health profession, and to ensure that those
    complaints are fully investigated and fairly decided without any participant in
    the proceedings  a health professional, a patient, a complainant, a witness or
    College employee  fearing that a document prepared for College proceedings can
    be used in a civil action.

Section
    36(3) is one of a number of legislative provisions whose broad objective is to
    keep College proceedings and civil proceedings separate.  Section 36(1) provides for the
    confidentiality of information that comes to the knowledge of College employees;
    and s. 36(2) provides that College employees cannot be compelled to testify in
    civil proceedings about matters that come to their knowledge in the course of
    their duties.

[102]

While
    Laskin J.A. referred to proceedings initiated by complaints, because that was
    the factual basis he was addressing, he points out that one of the rationales for
    the section is to ensure full and fair investigations without fear that
    documents prepared will be used in a civil action.  The broad objective, as he put it, is to keep
    College proceedings and civil proceedings separate.

[103]

I
    agree with the motion judge that it makes no sense to interpret s. 36(3) so as
    to differentiate investigations prompted by external complaints from those
    triggered by the College itself.  The
    objectives of ensuring full and fair investigations without fear that the
    documents will be used in a civil action and of keeping College proceedings
    and civil proceedings separate are applicable to all investigations whether
    initiated by an external complaint or by an internal decision of the College.

[104]

Dr.
    Lipsitzs second argument is that the term proceeding used in s. 36(3) is
    limited to proceedings where there is a hearing.  The investigations of Dr. Lipsitz did not
    result in hearings.

[105]

Dr.
    Lipsitz argues that because a proceeding is not defined in the
RHPA
, the court should look to the
    definition of proceeding in the
Statutory
    Power Procedures Act,
R.S.O. 1990, c. S.22 (
SPPA
), in order to interpret s. 36(3).  He argues that the definition of proceeding
    in the
SPPA
limits the term proceeding
    to a process where there is a hearing.

[106]

Again,
    I am of the view that the interpretation that Dr. Lipsitz urges results in an
    unduly narrow interpretation of the scope of s. 36(3).

[107]

The
    definition of proceeding in the
SPPA
does
    not assist.  Section 1(1) defines
    proceeding as a proceeding to which the
Act
applies.  Section 3(1) reads as follows:

Application
    of Act

3.(1)  Subject to subsection (2), this Act applies
    to a proceeding by a tribunal in the exercise of a statutory power of decision
    conferred by or under an Act of the Legislature, where the tribunal is required
    by or under such Act or otherwise by law to hold or to afford to the parties to
    the proceeding an opportunity for a hearing before making a decision.

[108]

The
    definition in the
SPPA
is intended to
    set out which matters fall within the scope of the
SPPA
.  Regulatory bodies
    falling within the
SPPA
have the
    powers conferred by it and are subject to its procedural requirements.  The definition sections in the
SPPA
do not purport to define the word
    proceeding for purposes of interpreting other statutes.

[109]

Section
    36(3) of the
RHPA
expressly states
    that it applies to proceedings in specified Acts.  Notably, s. 36(3) does not say that it
    applies only to proceedings to which the
SPPA
applies.  Had the Legislature intended
    that S. 36(3) be so limited, it is reasonable to infer that it would have set
    out that intention expressly.

[110]

Further,
    interpreting s. 36(3) of the
RHPA
as
    only applying to proceedings that result in the hearing could lead to undesirable
    results.  For example, where an expert
    prepares a report in connection with a complaint or an investigation, the
    report would be admissible in a civil action if the College did not pursue the
    matter to a hearing, but not if there was a hearing.  Similarly, a letter of complaint could form
    the basis of a civil suit by a doctor against the complainant if the College
    took no action on the complaint, but the same letter would be inadmissible if
    the complaint resulted in a hearing before the discipline committee.

[111]

Such
    an interpretation could discourage peer assessors and expert witnesses from
    participating in the regulatory process, have a chilling effect on members of
    the public wishing to register complaints with the College.

[112]

Dr.
    Lipsitzs third argument on the cross-appeal is that an action should not be
    struck on the basis of the inadmissibility of documents under s. 36(3) of the
RHPA
because such an order would
    interfere with the trial judges discretion to decide evidentiary issues.

[113]

In
M.F. v. Sutherland
, the court
    rejected a similar argument holding, at para. 40, that if a paragraph in a
    partys pleading pleads facts that cannot be proved at trial or pleads
    documents that cannot be admitted at trial, that paragraph may be struck out on
    a motion.  The court indicated that such
    a motion should be brought under Rule 25.11.  The motion in this case was brought under that rule.

[114]

Thus,
    I see no basis to interfere with the motion judges decision to strike Dr.
    Lipsitzs allegations pertaining to the Colleges investigations of his
    professional conduct.  I agree with the
    motion judges comment at para. 34 of his endorsement where he said:

I
    would simply add, for the plaintiffs benefit, that although the documentation
    is inadmissible, the fact that a complaint was made or that an investigative
    proceeding was commenced may be provable at trial.

[115]

In
    the result, the cross-appeal is dismissed.

Disposition

[116]

I
    would dismiss the appeals and the cross-appeal.  In my view, the immunity issue and the abuse of process issues should remain
    open at trial.

[117]

I
    would set aside the motion judges costs order in favour of Dr. Lipsitz.  I would leave the issue of costs of the
    motion to the trial judge.  On my view of
    the appellants arguments on immunity and abuse of process, Dr. Lipsitzs
    claims in the civil action will be significantly narrowed, if not disposed of
    entirely at trial on the basis of these arguments.  The exercise at trial will be to determine
    what portion, if any, of his civil claim should survive.  In those circumstances, I think it makes
    sense to reserve the costs of the motions below to the trial judge.

[118]

I
    would make no award with respect to costs of the appeal.  There has been mixed success.  On the one hand, the appellants have
    succeeded in reducing their exposure because of the view I take of the immunity
    and abuse of process arguments.  The
    appellants were also successful in having Dr. Lipsitzs cross-appeal
    dismissed.  On the other hand, I would
    not dismiss Dr. Lipsitzs action or strike his statement of claim as the
    appellants asked this court to do.  In
    that respect, Dr. Lipsitz has realized some success.

RELEASED: JUN
    22 2011  DOC

Dennis OConnor A.C.J.O.

I agree John I. Laskin J.A.

I agree J.C. MacPherson J.A.

[1]
These
    reasons address two appeals, C51330 and C51287.  The appeals are from decisions on motions that were heard together.  The motion judge issued one endorsement
    addressing both.

[2]
There
    were two Directors during the relevant period.

[3]
The
Health Professions Procedural Code
is
    found in Schedule 2 of the
Regulated
    Health Professions Act, 1991,
S.O

1991,
    c. 18
.