COURT OF APPEAL FOR ONTARIO

CITATION: Sant v. Sekhon, 2014 ONCA 623

DATE: 20140908

DOCKET: C57233

Weiler, Laskin and van Rensburg JJ.A.

BETWEEN

Evan
    Matthew Sant, a Person Under Disability, by his Litigation Guardian,

Elisabeth
    Sant, Elisabeth Sant, personally,

Christopher Sant and
    Andrew Sant

Plaintiffs (Respondents)

and

Jharmal Singh Sekhon, Capital Transport Corporation,

Canada
    Drayage Inc.
, Joel Sant and
Oakwood Services Ltd
.

Defendants (Appellants)

Hillel David, Jim Tomlinson and Adrian Nicolini, for the
    appellants

Earl A. Cherniak, Q.C. and Jasmine Akbarali, for the
    respondent

Heard and released orally: September 2, 2014

On appeal from the judgment of Justice Leonard Ricchetti
    of the Superior Court of Justice, dated May 23, 2013.

ENDORSEMENT

[1]

The respondent, Evan Sant, was a passenger in a pickup truck driven by
    Joel Sant that entered an intersection on a red light and was hit by a
    freightliner driven by Mr. Sekhon going through the intersection on the green
    light. In a negligence action brought by Evan Sant for the injuries he
    sustained, the jury found Joel Sant 95% liable for the accident and Mr. Sekhon
    5% liable.

[2]

Mr. Sekhon and the owners of the transport truck he was driving, Capital
    Transport Corporation and Canada Drayage Inc., appeal.

[3]

The grounds of appeal and our disposition of them are as follows.

(1)

Was the jurys verdict regarding Sekhon so plainly unreasonable and
    unjust as to satisfy the court that no jury reviewing the evidence as a whole
    and acting judicially could have reached it?

[4]

The jurisprudence on the standard of care of a driver with a green light
    is not in dispute. A driver with a green light is free to go through the
    intersection assuming that drivers approaching the intersection from other
    directions and who necessarily are being shown a red light will stop. However,
    a statutory right of way does not absolve a driver from exercising proper care.
    A driver should not exercise his or her right of way 1) if the driver becomes
    aware or should become aware that the driver without the right of way is going
    to go through the intersection and 2) if the circumstances are such that the
    driver with the right of way had the opportunity to avoid the collision:
Behmanesh
    v. Yokhana,
2011 ONSC 4950, at para. 15;
Goodwin v. Wrycraft
,
    [1966] 1 O.R. 26 (C.A.), at para. 16,
Vertulia v. Kratz
,

[1956]
    O.R. 884, at para.18.

[5]

The appellant submits that nothing in the circumstances alerted or
    should have alerted him to the fact that the driver of the pickup was going to
    go through the red light. We disagree. There was evidence, such as the evidence
    of the independent witness Mr. Miller and from the respondents expert Mr. Raftery,
    from which the jury could infer that a reasonably prudent driver should have
    been aware of the hazard posed by the pickup. Similarly, it was open to the
    jury to accept Mr. Rafterys evidence with respect to causation. This ground of
    appeal is dismissed.

(2)

Did the trial judge misdirect the jury on the element of causation and
    did the jury fail to make a cogent finding on the critical issue of causation?

[6]

The appellant submits that the following portion of the trial judges
    charge to the jury was in error in that he effectively instructed the jury to
    ignore the element of causation:

It is not necessary for you to find that the driver with the
    green light could have or should have become aware the driver of the other
    vehicle was going to go through the red light any earlier than he actually
    became aware of it.

[7]

In this portion of his charge the trial judge was instructing the jury
    with respect to question #5, the question dealing with standard of care.
    Counsel for the appellants did not object to this portion of the charge at
    trial. When the charge is read in context and as a whole, the trial judge did
    not misdirect the jury on the issue of causation.

[8]

There is also no merit to the appellants argument that the jury of
    necessity would have been misled by this passage because of the form of their
    answer to question # 5. The fact that the jury provided more extensive detail
    regarding Joel Sants negligence as opposed Mr. Sekhons does not necessarily
    mean that an inference can be drawn that the jury was confused. In the context
    of the question put to the jury and the trial judges charge, the jurys answer
    was entirely appropriate.

(3)

Was there improper and inflammatory cross-examination of Sekhon which
    may have influenced the jury to decide as it did?

[9]

During cross-examination of Mr. Sekhon, counsel for Joel Sant repeatedly
    asked Mr. Sekhon whether his lawyers had instructed him to provide particular
    answers during his testimony. This line of questioning was improper since its
    only purpose was to suggest to the jury that Mr. Sekhons evidence had been
    fabricated. There was no basis for that suggestion.

[10]

In
    order for appellate intervention to be justified, however, the improper conduct
    must be sufficiently serious to undermine the fairness of the trial or put the
    validity of the verdicts into real doubt:
Abdallah v. Snopek
(2008),
    89 O.R. (3d) 771 (C.A.), at para. 39 quoting
Rogacki v. Belz
(2004),
    243 D.L.R. (4
th
) 585 (Ont. C.A.), at para 22 leave to appeal denied
    (2005), 339 N.R. 197 (S.C.C.). The cross-examination questions the appellants
    object to do not meet this standard.

[11]

Accordingly,
    the appeal is dismissed.

Costs

[12]

The
    costs of the appeal are to the respondents and are fixed in the amount of
    $30,000 inclusive of disbursements and all applicable taxes.

K.M.
    Weiler J.A.

John
    Laskin J.A.

K.
    van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Solloway v. Klondex Mines Ltd., 2014 ONCA 672

DATE: 20140929

DOCKET: C58348

Epstein, van Rensburg and Benotto JJ.A.

BETWEEN

William J. Solloway

Applicant (Appellant)

and

Klondex Mines Ltd.

Respondent (Respondent)

Colin Pendrith, for the appellant

Young Park and David Levangie, for the respondent

Heard: September 26, 2014

On appeal from the judgment of Justice Paul M. Perell of
    the Superior Court of Justice, dated January 17, 2014.

APPEAL BOOK ENDORSEMENT

[1]

In this proceeding, the appellant seeks a determination of his rights
    under various agreements entered into between the parties.

[2]

The respondent brought a motion to stay this proceeding, relying heavily
    on actions that have been brought in other jurisdictions, primarily Nevada, in
    which the parties complex legal disputes have been put in issue.

[3]

The motion judge held that Ontario has jurisdiction
simpliciteur
over this proceeding.  However, the claims and disputes in the other actions were
    relevant to the determination of whether Ontario was the
forum conveniens
.

[4]

In the light of the potential impact of the other actions, the motion
    judge ordered that:

·

the action be temporarily stayed for a period of 60 days;

·

the temporary stay be lifted if the respondent and its subsidiary
    did not commence an action against the appellant in British Columbia or Nevada
    within 60 days; and

·

the temporary stay be permanent if the respondent and its subsidiary
    commenced an action against the appellant in British Columbia or Nevada within
    the 60 days.

[5]

The motion judges disposition of this matter is entitled to deference.
    We see no reason to interfere. He considered the relevant factors established
    in the jurisprudence, including
Village Resorts Ltd. v. Van Breda,
2012
    SCC 17
.
The record supports his inference that the other proceedings
    would inevitably involve the appellant and were inextricably connected to this
    application. (In fact fresh evidence shows that the appellant has been added to
    the Nevada action).

[6]

In our view the motion judges disposition of the issue of jurisdiction
    was reasonable and was fair.

[7]

We also see no reason to interfere with the motion judges cost award.
    It was reasonable that costs follow the event. And, while the award is high, so
    too are the stakes in this matter.

[8]

The appeal concerning jurisdiction is dismissed as is the appeal as to costs.

[9]

The respondent is entitled to its costs fixed at $10,000 including
    disbursements and HST.


COURT OF APPEAL FOR ONTARIO

CITATION: Wallace v. Crate's Marine Sales Ltd., 2014 ONCA 671

DATE: 20140930

DOCKET: C58159

Juriansz, LaForme and Lauwers JJ.A.

BETWEEN

Kim Robert Wallace and Karen Lynn Wallace

Plaintiffs (Appellants)

and

Crates Marine Sales Ltd. and Carver Boat Corporation

Defendants (Respondents)

William E. Pepall and Jasmine T. Akbarali, for the
    appellants

Morris Manning, Q.C., for the respondents

Heard:  September 18, 2014

On appeal from the order of Justice Drew S. Gunsolus of
    the Superior Court of Justice, dated December 10, 2013, with reasons reported
    at 2013 ONSC 7384.

Lauwers J.A.:

[1]

This is a relatively simple case. The appellants claim that the yacht
    they purchased in 2000 for more than $1 million from the respondent, Crates
    Marine Sales Ltd., was so defective that there was a fundamental breach of the
    purchase contract. They returned the yacht to Crates in 2003 where it has
    languished ever since. They seek rescission of the purchase contract and return
    of the purchase money, or damages in the alternative.

[2]

The action was started in 2003. The motion judge estimated that if the
    action was now permitted to proceed, it would not be ready for trial until 2015
    at the earliest.

[3]

The motion judge dismissed the action for want of prosecution based on
    both his discretion under Rule 24 of the
Rules of Civil Procedure
R.R.O.
    1990, Reg. 194, and as an exercise of the courts inherent jurisdiction.

[4]

For the reasons set out below, we dismiss the appeal.

(1)

The Test for Dismissing an Action for Delay

[5]

The appellants concede that the motion judge properly instructed himself
    at paras. 17-27 of his reasons on the test for dismissing an action under Rule
    24. The motion judge cited
Woodheath Developments Ltd. v. Goldman
(2001), 56 O.R. (3d) 658 (S.C.);
Scaini v. Prochnicki
, 2007 ONCA 63, 85
    O.R. (3d) 179 and
Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger
    Stores Ltd
., 2007 ONCA 695, 87 O.R. (3d) 660. However, the appellants
    challenge the motion judges application of the law to the facts.

[6]

The motion judge did not find that the delay was intentional or contumelious.
    He instructed himself that, under Rule 24, he had to be satisfied that the
    delay gave rise to a substantial risk that a fair trial of the issues would
    not be possible at the earliest date a trial could be held in this matter
    (para. 81). The motion judge also noted the expiry of the applicable limitation
    period and the presumption of prejudice that arises in circumstances of
    inordinate delay.

(2)

Background and Decision in the Court Below

[7]

Until the close of pleadings in 2004, the action proceeded at an
    ordinary pace. It then took about one and one-half years to arrange for
    discoveries. The motion judge noted that he had not received a satisfactory
    explanation for this delay (para. 75).

[8]

The discoveries began in December 2005, but were shortly adjourned to
    permit the appellants to amend their statement of claim. The appellants were to
    narrow their allegations to a claim that either the portside Volvo engine or
    the electronics related to the engine were defective. Counsel never took steps
    to amend the statement of claim. No other steps were taken by either side to
    advance the litigation for a number of years, apart from a desultory exchange
    of correspondence. In August 2011 counsel for the appellants served a notice of
    examination for discovery; the respondents did not attend, advising that they
    would be bringing a motion for summary judgment, which led to the motion that
    is the subject of this appeal.

[9]

The motion judge stated:

In fact, the court received no satisfactory explanation from
    the plaintiffs as to the cause for a delay of in excess of ten years. The
    plaintiff's explanation is basically that he and his counsel were tied up in
    other, unrelated litigation for over two years of that time. Counsel for the
    plaintiff explained that they were busy with other cases and the realities of
    their litigation practice. The defendant sent ongoing correspondence trying to
    "needle" the matter forward on their own terms, but neither side
    availed themselves of motions, which is surprising, as neither counsel could be
    considered "wilting flowers" on the civil litigation stage. (Para.
    76)

[10]

At
    para. 80, the motion judge found:

I find that the delay in this matter of in excess of ten years
    is inordinate and inexcusable as it has never really moved beyond the pleadings
    stage. This delay includes an unexplained ten year litigation delay after the
    issuance of the Statement of Claim, and an eight year delay following the
    expiry of a critical limitation period. It was over thirteen years ago when the
    original contract was entered into.

[11]

The
    motion judge concluded:

The inordinate delay described above, has created a presumption
    that the defendant has been prejudiced by this delay. The onus was on the
    plaintiff to displace the prejudice and persuade the court with convincing
    evidence that no prejudice will be suffered as a result of its delay, and that
    there is not a substantial risk that a fair trial will not be possible. The
    plaintiff has failed to discharge that onus. Beyond that, the defendant has
    demonstrated actual prejudice in any event. (Para. 89)

(3)

Analysis

[12]

The
    confluence between discretion and dismissal for delay is traced out in this
    courts decision in
Langenecker v. Sauvé
, 2011 ONCA 803,
[2011] O.J. No. 5777. Doherty J.A.
    observed:

An order dismissing an action for delay is obviously a severe
    remedy. The plaintiff is denied an adjudication on the merits of his or her
    claim. Equally obviously, however, an order dismissing an action for delay is
    sometimes the only order that can adequately protect the integrity of the civil
    justice process and prevent an adjudication on the merits that is unfair to a
    defendant. (Para. 3)

[13]

In
    this case, the motion judges finding that the delay was inordinate and inexcusable
    is unassailable.

[14]

The
    appellants argue that they have successfully rebutted the presumption of
    prejudice. They argue that the evidence is in decent enough form to permit a
    fair trial, and that any memory lapses can be repaired by recourse to the
    documentary record.

[15]

Counsel
    for the appellants takes direct aim at three factors cited, at para. 90, by the
    trial judge as examples of prejudice: mitigation of damages relating to re-sale
    and depreciation of the yacht; passage of the limitation period in relation to
    the manufacturers warranty on the portside engine; and the bankruptcy of the
    co-defendant Carver Boat Corporation. The appellants submit that these factors
    are not examples of prejudice, but are instead litigation risks that they, not
    the respondents, must absorb. There is some merit in this argument.

[16]

However,
    the motion judge did not rely on the listed examples of prejudice alone. He also
    noted that, while documentary evidence may well be available, this is not
    litigation driven solely by documentation (para. 86). He added: Both parties
    have their own views as to what occurred and what should have occurred, in
    relation to the use and repair of the vessel and they are now relying upon
    memories of events that occurred over a decade ago.

[17]

Based
    on these findings, the motion judge concluded that the appellants attempted
    rebuttal of the presumption of prejudice failed in the face of the respondents
    evidence as to the potential significance of testimony dependent upon the
    witnesses ability to recall statements and observations. These findings cannot
    be characterized as unreasonable.

[18]

The
    appellants argue that at least some of the delay falls at the feet of the
    respondents. It is fair to say that neither side is free of fault in the
    conduct of this action, but, as LaForme J. observed in
DeMarco v. Mascitelli
,
    [2001] O.J. No. 3582, 14 C.P.C. (5th) 384 (S.C.), at para. 22, the plaintiff is
    responsible for moving the action along. In this case the appellants manifestly
    failed to fulfill this responsibility.

[19]

The
    appellants also challenge the motion judges statement that his decision
    dismissing the action for delay was an exercise of the courts inherent
    jurisdiction. They argue that Rule 24 effectively exhausts the courts
    jurisdiction to deal with dismissal for delay.

[20]

Regarding
    this exercise of inherent jurisdiction, the motion judge stated:

A lengthy, unexplained delay in a case of this nature could
    well be defined as an abuse of the court's process. There is, indeed, a strong
    public interest in promoting the timely resolution of disputes in our civil
    justice system, which is already overburdened. Litigants and the public
    regularly complain about inordinate delays in obtaining civil motions and trial
    dates. The delay in this matter, of over a decade, strains the empathy of the
    court to excuse a delay of this "magnitude and gravity" and further
    undermines public confidence in the administration of our civil justice system.
    (Para. 95)

I agree. This is a simple case in which there was no
    reason to delay the trial to permit the situation to unfold, as there often is
    in personal injury cases, for example.

[21]

The
    motion judges invocation of inherent jurisdiction is consistent with this
    courts decision in
Marché D'Alimentation Denis Thériault
. Sharpe J.A.
    noted at para. 24:

Dismissal for delay is not, of course, an invention of case
    management. Rule 24.01 allows a party to move to dismiss an action for delay
    where the plaintiff has failed to prosecute the action in a timely fashion in
    accordance with the rules. Moreover, courts may dismiss actions for delay even
    when the relevant rules do not mandate it. A court has inherent jurisdiction to
    control its own process, which "includes the discretionary power to
    dismiss an action for delay."
Housser v. Savin Canada Inc.
(2005),
    77 O.R. (3d) 251 at para. 9 (S.C.J.). As the Manitoba Court of Appeal wrote,
    "The power of a superior court to strike a matter for want of prosecution
    does not hinge on the niceties of the wording of the rules, but rather flows
    from the inherent power of the court to prevent an abuse of its own
    process."
Kuhr v. Pearlman
(1991), 76 Man. R. (2d) 67 at para. 16.
    In at least two cases, this court has characterized lengthy, unexplained delays
    as "an abuse of the court's process." In
Susin v. Baker &
    Baker
, [2004] O.J. No. 723 at para. 7 (C.A), the court wrote that
    "even if the action could not be dismissed under r. 24.01(1), given all of
    the circumstances, it could properly be dismissed as an abuse of the court's
    process." See also
Convay v. Marsulex Inc.
, [2002] O.J. No. 4655
    (C.A.).

[22]

There
    comes a time, in short, when enough is enough, and the civil justice system
    will no longer tolerate inordinate and inexplicable delay. A court may then
    eject the action as an exercise of its inherent jurisdiction, whether or not
    the relevant rules expressly mandate it. This is such an action. The motion
    judge properly exercised his jurisdiction to dismiss the claim and the
    counterclaim.

[23]

The
    appeal is dismissed with costs fixed in the amount of $9,000, all inclusive.

Released:  September 30, 2014 PL                      P.
    Lauwers J.A.

I
    agree R.G. Juriansz J.A.

I
    agree H.S. LaForme J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: York Trafalgar Corporation v. Symphony Golf Inc.,
    2014

ONCA 619

DATE: 20140902

DOCKET: C58327

Doherty, Laskin and Epstein JJ.A.

BETWEEN

York Trafalgar Corporation, Pipers Heath Golf
    Club Ltd. and Comarin Corp.

Plaintiffs (Appellants)

and

Symphony Golf Inc. and
Philips
    Engineering Ltd.

Defendants (
Respondent
)

Paul H. Starkman, for the appellants

James A. LeBer, for the respondent Philips Engineering
    Ltd.

Heard and released orally: August 15, 2014

On appeal from the order of Justice Edward M. Morgan of
    the Superior Court of Justice, dated January 14, 2014.

ENDORSEMENT

[1]

This is an appeal from a decision of Morgan J. in which he granted summary
    judgment dismissing the action against one of the defendants, the respondent,
    Philips Engineering Ltd.

[2]

The background facts established a complicated relationship that was
    created when two families, the Gruehls and the Comarins, put two parcels of
    land together to develop a golf course. The Gruehls put in 200 acres, the
    Comarins, 100. For the purpose of developing the golf course, a limited
    partnership, Pipers Heath Golf Links Limited Partnership, (Pipers LP) was
    formed in which the appellant, Pipers Heath Golf Club Ltd., is the general partner,
    (Pipers GP).

[3]

The limited partners of Pipers LP are Lina Comarin and Flavio Comarin
    and the two appellants Comarin and York Trafalgar Corporation. The Gruehl
    family controls York Trafalgar.

[4]

Philips performed planning and re-zoning services in connection with the
    golf course. The appellants allege that Philips negligently designed the golf
    course and breached its contract with Pipers GP by failing to acquire
    necessary permits. As a result of this substandard performance, the appellants
    had to include in the golf course ten acres of the Comarin 100 acres that had
    been reserved for the Comarins future use.

[5]

Philips brought a motion for summary judgment seeking a dismissal of the
    action against it on the basis that even if Philips were found negligent and/or
    in breach of contract, any resultant decrease in the value of the Comarin 100
    acres caused no loss to the appellants.

[6]

By the time the motion for summary judgment was heard, the appellants
    claim for loss allegedly caused by Philips was limited to the value of the ten
    acres - being five acres of land that Comarin lost for immediate use outside of
    the golf course operation and five acres of land Comarin lost to regulated fish
    habitat previously available for future development.

[7]

The motion judge held that it was obvious that a claim limited to
    recovering the diminished value of land can only be claimed by the owner of
    that land and went on to find that the 100 within which the ten acres was
    situate,  were owned not by Pipers LP but by Comarin. However, Comarin had no
    claim against Philips as it purchased the land from the previous owners, Lina
    and Flavio Comarin, after the alleged diminution of value took place.

[8]

Two findings of fact were critical to this conclusion.

[9]

First the motion judge found that the golf course lands are not owned by
    Pipers LP. York Trafalgar owns the 200 acres formerly owned by the Gruehls,
    Comarin owns the 100 acres formerly owned by Lina and Flavio Comarin.

[10]

All
    of the evidence supports this finding. The lands were registered in Comarins name
    on September 1, 2006, when Comarin purchased it from Lina and Flavio. On the
    appellants evidence, once the limited partnership was formed, sometime after
    October 2, 2006, it entered into a lease as tenant with York Trafalgar and
    Comarin, as landlords.

[11]

Second,
    the motion judge found that Comarin acquired the 100 acres for fair market
    value after any alleged diminution of value had taken place.

[12]

On
    this point the evidence was also clear. By the time Lina and Flavio Comarin sold
    their 100 acres to Comarin on August 30, 2006, the problems with conservation
    and fish habitat had been known for many months. The necessary re-design of the
    golf course that involved the ten acres had already been discussed, submitted
    and approved.

[13]

It
    follows that Comarin purchased its 100 acres from Lina and Flavio for fair
    market value after the alleged diminution in value took place. Any loss
    suffered due to Philips services was incurred by Lina and Flavio.  Pipers LP does
    not own the lands said to have suffered a diminution of value. Comarin bought
    the lands in issue for its already diminished value. The contractual
    relationship between Philips and Pipers TP does not change this.

[14]

The
    motion judge correctly concluded that the appellants have no claim against
    Philips. The appeal is therefore dismissed.

[15]

Costs
    to Phillips on a partial indemnity basis in the amount of $9,000, inclusive of
    relevant taxes and disbursements.

Doherty
    J.A.

John
    Laskin J.A.

Gloria
    Epstein J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Akagi v. Synergy Group (2000) Inc., 2014 ONCA 731

DATE: 20141022

DOCKET: M43932 and M43945 (C57582)

Laskin, Gillese and Pardu JJ.A.

BETWEEN

Trent Akagi

Applicant (Respondent)

and

Synergy Group (2000) Inc. (aka Synergy Group
Inc., Synergy Group 2000 Inc., The Synergy Group 2000 Inc., The Synergy Group,
Inc. (2000), The Synergy Group Incorporated, The Synergy Group 2000
Incorporated) and Integrated Business Concepts Inc.

Respondents (Appellants)

William C. McDowell and Jamie J.W. Spotswood for the
moving parties/appellants Vincent Villanti and Integrated Business Concepts
Inc.

Jonathan C. Lisus and James Renihan, for the moving
parties/appellants RV Inc. and Student Housing Canada Inc.

Shannon M. Puddister, for the responding party Ravendra
Chaudhary

Terry Corsianos, for the responding party Trent Akagi

Jim Patterson and Ruth Promislow, for the
Court-Appointed Receiver J.P. Graci & Associates Ltd.

Heard and released orally: October 16, 2014

On motion to review the order of Justice Michael H.
Tulloch of this court dated June 10, 2014, on the appeal from the order of
Justice Colin L. Campbell of the Superior Court of Justice, dated August 2,
2013.

ENDORSEMENT

[1]

On April 4, 2014, the appeal in this matter was dismissed for delay (the
Registrars Order).  The appellants moved to set aside the Registrars Order
and extend the time to perfect.

[2]

By order dated June 10, 2014, Tulloch J.A. dismissed the motion (the
Motion Decision), primarily because the reason for delay had not been
satisfactorily explained.

[3]

The appellants now move to have the Motion Decision reviewed.  Both sets
of appellants are represented by new counsel.

[4]

The record before the court is considerably enhanced from that which was
before Tulloch J.A.  The two most notable differences relate to the explanation
offered for the delay and the merits of the appeal.

[5]

The fresh evidence indicates that it was the conduct of counsel who
appeared on the motion that led to its dismissal.  Counsel on the motion did
not put forward evidence of their clients intentions to pursue the appeal and
their instructions to do so as quickly as possible.  Nor did they give Tulloch
J.A. the full explanation for the delay, which included unsuccessful efforts to
consolidate various orders into a single record and to co-ordinate the
preparation of appeal materials with lawyers for other parties.   Instead,
counsel on the motion proffered a double hearsay affidavit, lacking specificity
on key points, from a lawyer with no involvement in the case.

[6]

As this court has noted on many occasions, counsels inadvertence should
not prejudice a clients cause.  See, for example,
Marché DAlimentation
Denis Theriault Ltée. v. Giant Tiger Stores Limited
, 2007 ONCA 695, 286
D.L.R. (4
th
) 487, at para. 28.

[7]

In respect of the merits of the appeal, Tulloch J.A. was not directed
to, among other things, a jurisdictional issue relating to the scope of the
Receivers authority and, in the circumstances of this case, his ability to
obtain a certificate of pending litigation.

[8]

The overriding consideration on a motion to set aside a dismissal order
is the justice of the case, which entails a consideration of the merits of the
appeal.  In our view, the appeal raises serious issues.  That consideration,
after having due regard to the other relevant factors including the now
adequately explained delay, warrants setting aside the Registrars Order.

DISPOSITION

[9]

Accordingly, an order shall go:

1.

Setting aside the Registrars Order, the Motion Decision and its
associated costs order dated September 12, 2014;

2.

Extending the time to file notices of appeal to October 23, 2014, in
respect of the orders of Campbell J. dated June 14, 24 and 28, 2013, and September
16, 2013, (together with the order dated August 2, 2014, the Receivership
Orders); and

3.

Directing an expedited and consolidated appeal of the Receivership
Orders.

[10]

On
consent, an order shall also go requiring the appellants to perfect their
appeals by October 31, 2014, and the respondents to file their materials by
November 21, 2014.

[11]

Each
of the two groups of appellants is entitled to costs fixed in the amount of
$15,000, all inclusive, payable by the Receiver.  There shall be no order as to
costs of the motion below.

John Laskin J.A.

E.E. Gillese J.A.

G. Pardu J.A.


COURT OF APPEAL FOR
    ONTARIO

CITATION: Boily v. Carleton Condominium Corporation 145, 2014
    ONCA 735

DATE: 20141023

DOCKET: C56885

Epstein, Lauwers and Pardu JJ.A.

BETWEEN

Danielle Boily,
Juan Escudero
, Lisa Backa-Demers, Kanta Marwah,

Doug Cummings and
    Richard Maurel

Applicant (
Respondent
)

and

Carleton Condominium
    Corporation 145, Dan Litchinsky, Avis Miller,

Jean-Guy Bourgeois
    and Carol Smale

Respondents (Appellants)

Janice B. Payne, for the appellants Dan Litchinsky, Avis
    Miller, Jean-Guy Bourgeois and Carol Smale

Antoni Casalinuovo and Patricia Elia, for the appellant,
    Carleton Condominium Corporation 145

Rodrigue Escayola and Jocelyn Duquette, for the respondent, Juan
    Escudero

Heard: December 9, 2013

On appeal from the judgment of Justice Robert N. Beaudoin of
    the Superior Court of Justice, dated March 8, 2013, with reasons at 2013 ONSC
    1467 and 2013 ONSC 2352.

COSTS
    ENDORSEMENT

[1]

The respondents are owners of condominium units in the appellant
    condominium complex.
[1]
The Individual Appellants were, at the material time, its board of directors. The
    respondents challenged the appellants decision, following extensive repairs to
    the garage beneath the complex, to install landscaping that differed from the
    previous landscaping.    In his endorsement of June 29, 2011, Beaudoin J.
    ordered the appellants to restore the landscaping to its previous design.

[2]

In defiance of the order, the Individual Appellants authorized the
    installation of landscaping containing some elements of the previous design and
    some elements of their preferred design.  As a result, Beaudoin J. in his March
    8, 2013, judgment, found the appellants in contempt of court.  In sanctioning
    the contempt, the motion judge again ordered that the exterior of the complex be
    restored to the previous design.  He also ordered the Individual Appellants to
    personally bear the expense of restoration - estimated to be approximately
    $400,000.

[3]

In separate reasons, the motion judge ordered the Individual Appellants
    to pay the respondents costs of the motion, which he assessed on a substantial
    indemnity basis, that, together with disbursements, amounted to $109,598.

[4]

In reasons released August 6, 2014, this court allowed the appeal, in
    part. The appeal of the finding of contempt was dismissed.  The sanction,
    however, was varied.  While Beaudoin J.s order that the appellants restore the
    landscaping to the original design remained in place, this court set aside the
    order that the restoration be paid for by the Individual Appellants.  Instead,
    the Individual Appellants were each ordered to pay a $7500 fine to Carleton
    Condominium Corporation 145 (CCC 145).

[5]

In the light of the divided success, no costs were ordered on appeal.
    The parties were invited to make submissions as to the costs of the underlying
    contempt motion.

[6]

In their written submissions, the parties take the following positions.

[7]

CCC 145 submits that the motion judges costs award should not be
    disturbed.  Alternatively, CCC 145 contends that responsibility for the award
    should be shared equally amongst the appellants, such that CCC 145 would pay
    one fifth of the amount, roughly $20,000.

[8]

The Individual Appellants argue that the amount of costs the motion
    judge awarded should be reduced.  Specifically, they submit that an award on a
    substantial indemnity basis is not warranted.  They agree that the
    responsibility to pay the costs award should be shared equally with CCC 145.

[9]

The respondents contend that the motion judges costs award should not be
    disturbed.  If any change is made to the motion judges costs award, it should only
    be to reallocate the responsibility for payment among the five appellants.

[10]

The
    sole issue before the court is the motion judges costs award.  No party has
    formally asked this court to reconsider its decision not to award costs of the
    appeal.

[11]

I
    agree with the Individual Appellants that there is reason to reconsider the
    motion judges decision to award costs on a substantial indemnity basis.  I
    appreciate that these were costs flowing from a successful motion for contempt
    of court - a finding, upheld on appeal, grounded on conduct that, at the very
    least, shows disrespect for the court.  However, as LaForme J. explained in
Einstoss
    v. Starkman
, 2003 CarswellOnt 100 (C.A.), at paras. 10-14, affd 2003
    CarswellOnt 3234 (C.A.), at para. 3,  a finding of contempt does not, on its
    own, justify an award of costs on an elevated scale.  The nature of the contemptuous
    conduct is a relevant consideration:
SNC-Lavalin Profac Inc. v. Sankar
, 2009
    ONCA 97, 94 O.R. (3d) 236, at para. 19.

[12]

Elevated
    costs are warranted in only two circumstances:
Davies v. Clarington
    (Municipality)
, 2009 ONCA 722, 100 O.R. (3d) 66. The first involves the
    operation of an offer to settle under rule 49.10 of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, where substantial indemnity costs are
    explicitly authorized. The second is where the losing party has engaged in
    behaviour worthy of sanction.

[13]

In
    deciding upon a punitive award of costs, the motion judge relied on the conduct
    of the Individual Appellants.  He referred to the following findings in the
    contempt motion, at para. 34 of his costs reasons:

I will not reiterate the findings ... other than to note that I
    found that
[T]he [appellants] breached the order wilfully and
    deliberately;
 and that
[T]he [appellants] acted neither honestly and
    in good faith, nor as a reasonably prudent person [] The [appellants] adopted
    a narrow and self-serving interpretation of my order and chose to reinstate
    elements that they preferred, despite the decision of this court
.
    [Emphasis in original.]

[14]

On
    appeal, the contemptuous conduct was summarized by the majority, at paras.
    100-101:

After having obtained and accepted a recommendation by experts
    as to the optimal landscaping design, the Individual Appellants simply could
    not accept being put in a position in which they had to implement a design they
    believed was not optimal for the condominium owners.  They therefore took
    matters into their own hands and, albeit for reasons they considered valid,
    defied a court order. The Individual Appellants arrogance led them to reckless
    and ultimately unlawful conduct.

Any contempt is serious.  This is no exception.  However, in my
    view, the Individual Appellants contemptuous conduct must be considered in the
    light of the fact that there is no evidence that it was motivated by personal
    gain, vengeance or any reason other than that they felt they knew best.

[15]

In
    my view neither any offer to settle nor the Individual Appellants' conduct, as
    characterized by this court, justifies an award of costs on a substantial
    indemnity basis. I would award partial indemnity costs.

[16]

In
    the often-cited case of
Boucher v. Public Accountants Council (Ontario)
(2004),
    71 O.R. (3d) 291 (C.A.), this court set out the principles to apply in fixing
    costs.  The objective is to fix costs that are fair and reasonable having
    regard to the expectation of the parties.

[17]

Applying
    the principles in
Boucher
,
I am of the view that a costs award of $35,000 fairly and reasonably responds
    to the expectations of the parties.  It is apparent from the history that the
    issues in this matter were serious and, in certain respects, the stakes were
    high.  However, this was a one-day motion for contempt that involved applying
    well-established law to clear facts.

[18]

I
    would therefore set aside the motion judges costs award and award costs in
    favour of the respondents fixed in the amount of $35,000 inclusive of
    disbursements and applicable taxes.

[19]

In
    the circumstances, I see no reason to differentiate among the appellants.
    While the Individual Appellants made the decisions that gave rise to the
    contempt finding, they were elected by the unit owners at CCC 145.  CCC 145 is
    an independent entity that was separately represented in these proceedings.  I
    would order each appellant responsible, on a joint and several basis, for one
    fifth of the award.

Gloria Epstein
    J.A.

P. Lauwers
    J.A.

G. Pardu J.A.

[1]
The respondent Juan Escudero is the sole remaining member of the group of
    owners who opposed the boards decisions.  I will refer to the respondent in
    the plural, (the respondents) in order to be consistent with the history of
    this proceeding.


COURT OF APPEAL FOR ONTARIO

CITATION:
Can-Win Leasing (Toronto) Limited v. Moncayo, 2014
    ONCA 689

DATE: 20141008

DOCKET: C56702

Feldman, Lauwers and Strathy JJ.A.

BETWEEN

Can-Win Leasing (Toronto) Limited

Plaintiff (Appellant)

and

Rafael Moncayo

Defendant (Respondent)

Licio E. Cengarle, for the appellant

Rafael Moncayo, acting in person

Alan S. Cofman, appearing as duty counsel

Heard: March 10, 2014

On appeal from the judgment of Justice Robert F.
    Goldstein of the Superior Court of Justice, dated February 6, 2013, with
    reasons reported at 2013 ONSC 851.

Strathy J.A.:

[1]

Can-Win Truck Sales Inc. (Can-Win Truck) was owned and operated by
    Clifford Irwin and the respondent, Rafael Moncayo. Together, Mr. Moncayo, Mr.
    Irwin and the appellant, Can-Win Leasing (Toronto) Limited (Can-Win Leasing),
guaranteed the debt of Can-Win Truck to the Royal Bank of Canada (RBC). Mr.
    Irwin, who passed away after the trial, was the sole shareholder of Can-Win
    Leasing. He caused Can-Win Leasing to pay down Can-Win Trucks guaranteed debt in
    2008 and 2009, without informing Mr. Moncayo and in the absence of any demand
    by RBC on either Can-Win Truck or any surety.

[2]

The trial judge dismissed Can-Win Leasings action for equitable
    contribution from Mr. Moncayo for the amounts paid to RBC. For the reasons set
    out below, I would dismiss the appeal.

A.

FACTS

[3]

Mr. Irwin and Mr. Moncayo were 50-50 shareholders in Can-Win Truck. Together
    with the appellant Can-Win Leasing, they guaranteed RBCs loan to Can-Win Truck.

[4]

Mr. Irwin became concerned about the state of Can-Win Trucks business.
    His evidence was that by January of 2008, he wanted the company closed. Mr.
    Moncayo wanted to continue the business.

[5]

The trial judge found that in March 2008, Mr. Irwin took over both Can-Win
    Truck and a related venture, R&R Leasing Inc. (R&R), to the exclusion
    of Mr. Moncayo, whom he shut out of the business. On March 26, 2008, Mr. Irwin
    wrote a note to Mr. Moncayo, saying that he had arranged with the bank to have
    sole signing authority, so that he could control the bank until we get this
    company back on its feet. Mr. Irwin and Mr. Moncayo retained a consultant to
    see whether they could resolve the impasse. Their discussions were
    unsuccessful.

[6]

There is no evidence that Can-Win Truck was at any time in default under
    the loan agreement or that RBC was seeking to terminate that agreement. Nor is
    there evidence of any demand by RBC on Can-Win Truck or any of the guarantors.

[7]

The trial judge found that Mr. Irwin then took unilateral action to pay
    down Can-Win Trucks debt. He found that this action had been taken not in the
    interest of Can-Win Truck, but rather in Mr. Irwins own interest. The banking
    records indicate that through Can-Win Leasing, Mr. Irwin paid down $500,000 of
    RBCs loan to Can-Win Truck in August 2008.

[8]

Mr. Irwin explained his actions by saying he was getting a lot of
    pressure from RBC, which was threatening him, and he was worried the bank was
    going to foreclose on the property pledged as security for Can-Win Leasings
    guarantee.

[9]

The trial judge found this was a unilateral and voluntary act on Mr. Irwins
    part. He also found that it was not reasonably necessary for the survival of Can-Win
    Truck and that the business was salvageable.

[10]

It
    is not disputed that when Mr. Irwin excluded Mr. Moncayo from the business,
    closed it down and paid off the loan, he was acting for his own purposes, to
    prevent RBC from exercising its security against Can-Win Leasings property.

[11]

Some
    seven months later, in March 2009, RBC assigned the debt and the security to Can-Win
    Leasing, based on Can-Win Leasings promise to pay the balance owing of
    $178,000 before March 31, 2009.

[12]

The
    payment of the debt by Can-Win Leasing and the assignment of the debt to it
    took place without notice to Mr. Moncayo.

[13]

Can-Win
    Leasing made a demand on Mr. Moncayo for his share of the loan on July 24,
    2009.

B.

THE DECISION BELOW

[14]

It
    is common ground that RBC made no formal demand for payment to Can-Win Truck or
    the guarantors. Nor was there any evidence that Can-Win Truck was in default to
    RBC.

[15]

The
    trial judge found that, in spite of this, Mr. Irwin caused Can-Win Leasing to
    pay down the line of credit by $500,000 in August 2008 without consulting or
    informing Mr. Moncayo. He found this was done in Mr. Irwins own interest and
    not in Can-Win Trucks interest. He was suspicious of Mr. Irwins evidence
    that RBC had been pressuring him with respect to the line of credit and that Mr.
    Irwin was worried the bank was going to foreclose on the property:

The Bank did not force Mr. Irwin to cause Can-Win Leasing to
    make the payment. There was no formal demand issued by the Bank. There is no
    evidence that the Bank stated that it would foreclose on Mr. Irwins Kipling
    property. Mr. Irwin only testified that he was worried about it. In other
    words, there was no compulsion at law, and no common demand from a third party.
    [At para. 22.]

He noted that Mr. Irwin did not produce any documents
    to support his assertion that the bank was putting pressure on him.

[16]

In
    explaining his suspicion of Mr. Irwins evidence, the trial judge noted that
    while the line of credit had been at its limit of $750,000 in January 2008, it
    had been paid down by $40,000 in May 2008 and by a further $50,000 in June 2008.
    The trial judge concluded that since Can-Win Truck had made regular payments on
    the line of credit, there must have been at least some cash flow. Mr. Irwin
    testified that he had been receiving pressure in April and May of that year,
    but it was in August 2008 that Can-Win Leasing made the payment of $500,000.

[17]

The
    trial judge also gave reasons for rejecting the argument that it was
    necessary for Can-Win Leasing to assume Can-Win Trucks obligation to RBC and
    for his preference of the evidence of Mr. Moncayo to that of Mr. Irwin on the
    issue of whether Can-Win Truck could survive. Mr. Irwins evidence that he
    wanted to shut down the business in January 2008 was contradicted by the note
    he wrote to Mr. Moncayo indicating that he had made arrangements with the bank
    that gave him sole signing authority, so that he could control the Bank until
    we get the company back on its feet (at para. 26). The trial judge found this
    indicated an intention not to close down the business, but to get it back on
    its feet.

[18]

He
    also found that although there was evidence that Can-Win Truck was losing
    money, there was no evidence that Mr. Irwins knowledge of the trucking sales
    and leasing business was any better than Mr. Moncayos or that he was in any
    better position than Mr. Moncayo to evaluate the companys viability.

[19]

He
    found that Mr. Irwins refusal to give Mr. Moncayo an accounting for R&R,
    in the face of his admission that there was about $200,000 in equity in the
    company, did not indicate a good-faith effort to deal with Can-Win Trucks
    financial affairs.

[20]

In
    the result, the trial judge found that Can-Win Truck was salvageable.

[21]

He
    also found that the payment by Can-Win Leasing was not reasonably necessary for
    the survival of Can-Win Truck. The following observations, at para. 28 of his
    reasons, summarize his conclusions:

I also find that
    it was not reasonably necessary for the survival of Can-Win Truck for the payment
    to have been made. Mr. Irwins assertions are contradicted by his own actions
    and by the documents that he produced. It may have been reasonably necessary
    for Mr. Irwin to make the payment, but that is not the same thing. Mr. Irwin
    was concerned that the bank might foreclose on his Kipling property, but there
    was no evidence that the Bank ever informed him that it would do so, or that it
    ever took steps to do so. As I have already noted I am suspicious that the Bank
    was putting pressure on him as he testified. There is, for example, no evidence
    that Can-Win Truck missed any payments on the line of credit;
indeed, the
    bank statements indicate that the line of credit was slowly being paid down.

Mr. Irwin also testified that it would be better for his credit going
    forward if he paid rather than having the Bank make a demand and forcing him to
    pay. After locking out Mr. Moncayo in June 2008 he decided to take unilateral
    action to take control of the financial affairs of Can-Win Truck and pay down
    Can-Win Trucks debt.
All of these actions were done primarily to benefit
    Mr. Irwin.
Mr. Irwin was entitled to take those steps he felt necessary to
    preserve his business affairs, but in my view reasonably necessary in the
    circumstances does not include a circumstance where the steps are directed exclusively
    for the benefit of the person taking on the obligation.
It would not be just
    and reasonable to enforce the guarantee against Mr. Moncayo, particularly since
    Mr. Moncayo was never given the opportunity to negotiate with the Bank to
    re-schedule the debt, or seek alternative financing, or simply work off the
    obligations.
[Emphasis added.]

[22]

These
    central findings of fact attract deference in this court.

[23]

The
    trial judge expressed, at paras. 24 and 25, what he considered to be the
    applicable law, relying on
Re Korex Don Valley ULC
(2009), 52 C.B.R.
    (5th) 238, [2009] O.J. No. 1721 (S.C.):

Thus, the law will refuse an indemnity to Can-Win Leasing
    unless it can be shown that in the particular circumstances of this case there
    was some necessity for the obligation to be assumed.

Was it necessary for Mr. Irwin to cause Can-Win Leasing to
    assume the obligation? In my view, the answer to this question turns on two
    questions: first, was Can-Win Truck really unsalvageable? And second, was it
    necessary for Can-Win Truck?

[24]

The
    trial judge disputed, at para. 22, the proposition that a successor could step
    into the shoes of the Bank and make a demand where the Bank had not done so.

[25]

The
    trial judge found, at para. 27, that Can-Win Truck was salvageable, so the payments
    Can-Win Leasing made to RBC were not reasonably necessary for Can-Win Trucks
    survival. He found, at para. 28, that RBC did not force Can-Win Leasing to make
    the payments on Can-Win Trucks indebtedness, noting the absence of a formal
    demand by RBC. He said that he was suspicious about Mr. Irwins testimony that
    RBC was pressing for payment because Can-Win Truck had never missed a payment
    and the line of credit was slowly being paid down.

[26]

The
    trial judge also referred to evidence relating to R&R and stated at para.
    26:

Mr. Irwin admitted in cross-examination that there was about
    $200,000 of equity in R&R. He also stated in cross-examination that he had
    refused, and would continue to refuse, to give Mr. Moncayo an accounting of
    equity in R&R until Mr. Moncayo had settled this action. That comment does
    not indicate a good faith effort to deal with Can-Win Trucks financial
    affairs.

[27]

The
    trial judge found, at para. 29, that Mr. Irwins actions in paying the debt materially
    changed the risk to Mr. Moncayo, prejudicing his interests.

[28]

The
    trial judge dismissed the action, summarizing his overall conclusion, at para.
    7:

Mr. Irwins unilateral decision to cause Can-Win Leasing to pay
    the debt of Can-Win Truck without notice to or consultation with Mr. Moncayo in
    the absence of a demand from the Bank disentitles Can-Win Leasing from
    collecting on the guarantee.

C.

THE POSITIONS OF THE PARTIES

[29]

Can-Win
    Leasing submits that the trial judge made three errors: first, in finding that
    a formal demand by RBC was a prerequisite to Can-Win Leasings recovery;
    second, by requiring Can-Win Leasing to prove that its payments to RBC were
    necessary; and third, by relying on irrelevant considerations, including the
    testimony concerning R&R. Can-Win Leasing argues that a demand from RBC was
    not required and that the trial judge erred in treating its payments as unrecoverable
    payments by an officious volunteer.

[30]

Mr.
    Moncayo, with the helpful assistance of duty counsel, submits that the trial
    judge was right to find that Can-Win Leasing paid RBC as an officious
    volunteer, and that such payments are therefore not recoverable from the co-guarantor.
    Mr. Moncayo argues that the evidence relating to R&R was relevant as to
    whether Can-Win Leasings payment was necessary for Can-Win Truck.

D.

THE issues

[31]

A
demand
by the creditor is not a
    prerequisite to the suretys right to pay the creditor and to seek contribution
    from its co-surety. The issue is in what circumstances a surety is entitled to
    do so in the absence of
default
by the principal debtor, and whether
    those circumstances existed here.

E.

ANALYSIS

The Applicable Principles

[32]

The
    trial judge analyzed the issues in terms of the voluntary payment by one party
    of another partys debts. He referred to
Re Korex Don Valley ULC
,
    above, and
Owen v. Tate
, [1975] 2 All E.R. 129 (C.A.). While the
    principles are similar, in my view the appeal should be addressed on the basis
    of rights between co-sureties.
[1]

[33]

Having
    paid more than its rateable share of Can-Win Trucks debt, Can-Win Leasing had
    an equitable right, independent of contract, to recover contribution from its
    co-sureties. However, [t]o give rise to a right of contribution, payment must
    have been made by the surety in a situation where [the surety] was legally
    obliged to pay: Kevin McGuinness,
The Law of Guarantee
, 3rd ed.
    (Markham: LexisNexis Canada, 2013), at p. 785. The surety is entitled to pay as
    soon as his or her liability arises under the terms of the guarantee:
    McGuinness, at p. 786. However, as McGuinness notes, doing so is risky
    because co-sureties may argue that the payment was imprudent or unnecessary.

[34]

In
    such circumstances, McGuinness suggests at p. 786:

[A] surety will often wish
    to settle a potential claim against him[self], yet at the same time will be unwilling
    to prejudice any right which he may have to recover part of the payment which
    he is to make from his co-sureties. If a surety wishes to make a payment in
    settlement, he should give notice to his co-sureties of his intention to
    negotiate a settlement. Should the co-sureties then refuse to take part in the
    negotiation, a claim for contribution may then be made without fear that the
    co-sureties will successfully defend by challenging the propriety of the
    settlement.

See also: David Marks & Gabriel Moss,
Rowlatt
    on Principal and Surety
, 6th ed. (London: Sweet & Maxwell, 2011), at
    p. 180.

[35]

This
    is because a guarantee is a secondary and contingent obligation. It is
    secondary to a primary obligation and it is contingent on the default of the
    obligor under the primary obligation: McGuinness, at p. 49. By stepping in and
    paying the obligation, the surety exposes the debtor, and any co-surety, to a
    liability they may have been able to avoid. In light of the trial judges
    conclusion that Can-Win Truck was salvageable, this is a crucial point.

[36]

Stewart
    v. Braun
, [1925] 2 D.L.R. 423 (Man. K.B.), is an example of a situation in
    which one group of co-sureties were held to have exercised appropriate
    consideration for another group of co-sureties. There, some sureties settled
    with the creditor and looked to the other sureties for indemnity for their
    proportionate shares. The court found, at p. 431, they had acted reasonably:

I cannot accede to
    defendants contention that the plaintiffs cannot enforce contribution on the
    basis of any amount unless that amount is agreed to by all the guarantors or
    fixed by a judgment. The plaintiffs had a right to protect their credit by
    preventing action; they had a right to call upon their co-guarantorsthe
    defendantsto come forward and assist in arranging some settlement. The
    defendants had no right to sit back under the supposed cover of their financial
    insignificance, or safety, and say to their co-sureties, if you do anything
    with this account before judgment is obtained against you, you do so at your
    peril. I do not think they should be heard to state that. I hold that they have
    by their silence estopped themselves from disputing the amount at which the
    plaintiffs settled this claim: See
Marshall v. Houghton
(1923), 33 Man.
    L.R. 166, at p. 177.

[37]

In
    that case, however, the bank had called on the sureties to make payment and the
    defendants, although invited by the plaintiff co-sureties to discuss the issue,
    refused to co-operate and did nothing.

[38]

The
    purpose of the demand is to inform the surety that there has been default by
    the principal debtor. In the case of a guarantee payable on demand, a demand is
    a condition-precedent to the obligation: see
Bank of Nova Scotia v.
    Williamson
, 2009 ONCA 754, 97 O.R. (3d) 561, at para. 13. In
Stewart
    v. Braun
, it was significant that the bank had made a demand on the
    sureties.

[39]

In
    the case before us, the guarantees were payable on demand, but the bank had
    made no demand. However, that does not end the analysis. The question is
    whether this is one of those cases in which the primary obligors default is so
    imminent that the surety is entitled to take unilateral action.

[40]

Stimpson
    v. Smith
, [1999] 2 All E.R. 833 (C.A.) is a good example of such a case. There,
    although the bank had not made a written demand, it made an oral demand on one
    of the sureties, who proceeded to negotiate and pay a settlement to the bank.
    The circumstances were not entirely dissimilar to this case, but one significant
    difference is that the bank was requiring a substantial reduction in the
    overdraft and was threatening to appoint a receiver. Lord Justice Gibson said,
    at p. 839, that the right to contribution arose, notwithstanding the absence of
    a written demand, given the reality of the commercial position facing the primary
    debtor. Lord Justice Judge concluded, at p. 842, that where there is imminent
    threat of loss, or where the surety is in immediate jeopardy and a demand can

realistically be anticipated
 in the absence of a settlement, the
    surety who reaches an arrangement with the creditor which is not
    disadvantageous to the co-surety is not thereafter deprived of his entitlement to
    contribution (emphasis added).

[41]

Generally,
    however, the absence of a demand on the surety is evidence that the primary
    debtor is not in default. The voluntary payment of the obligation by the surety
    may put the onus on the surety to show that he or she was not acting
    officiously.

[42]

Can-Win
    Leasing relies upon
Manu v. Shasha
(1983), 41 O.R. (2d) 685, [1983]
    O.J. No. 3027 (C.A.). That case is distinguishable. There, the trial judge had
    dismissed the co-suretys claim for contribution on the ground of his unclean
    hands in deliberately and recklessly precipitating the demise of the business.
    This resulted in the bank calling its loan and realizing on the security
    provided by the appellant, who then sought contribution from the respondent,
    his business partner and co-surety.

[43]

This
    court, at pp. 687-88, described the appellants claim as:

[F]ounded on the long established proposition that where a
    co-surety has paid the debt of a principal debtor, or more than his
    proportionate share, and is unable to recover against the principal debtor, the
    co-surety is entitled to contribution from his fellow co-sureties to equalize
    the burden. Contribution does not depend upon agreement, but upon an equity
    arising from the fact of the existence of co-sureties for the same debt owed to
    the same creditor. The underlying principle of equity is that the creditors
    remedies against the co-sureties should be applied so as to apportion the
    burden rateably, and if the remedies have been applied otherwise the court will
    correct the inequity between the co-sureties. [Citations omitted.]

[44]

In
    reversing the trial decision, this court rejected the clean hands argument,
    holding, at p. 688 that:

[T]he mutual
    rights of the sureties in this case are not to be determined simply by resort
    to the maxim that a plaintiff in equity must approach the court with clean
    hands. In our opinion, the surety here who was
compelled
to pay more than his proportionate share of a common liability is
    not to be debarred
on
    that ground alone
from obtaining contribution from
    his co-surety. [Emphasis added.]

[45]

Manu
    v. Shasha
was not a case of a co-surety voluntarily discharging the
    principal obligation without any antecedent demand by the creditor and, in my
    view, it has no application to this case.

[46]

In
    light of these authorities, the question is whether this is one of those cases
    in which a surety, Can-Win Leasing, was justified in making a payment absent a
    demand by the creditor because default was imminent. If so, the payment did not
    prejudice its co-surety, Mr. Moncayo. If not, the payment was voluntary and
    discharged the co-sureties obligations.

Discussion

[47]

The
    evidentiary portion of the trial lasted less than a day. Mr. Irwin and Mr.
    Moncayo were the only witnesses. Mr. Moncayo represented himself. Can-Win
    Leasings counsel chose not to cross-examine Mr. Moncayo. The documentary
    record was extremely thin and, as the trial judge noted, Mr. Irwins evidence
    was not corroborated by contemporaneous bank documents. Mr. Irwin adduced no
    expert or accounting evidence concerning the financial state of Can-Win Truck.
    Nor did he call evidence from RBC concerning the status of Can-Win Trucks line
    of credit or to prove his allegation that he was under pressure from the bank.

[48]

The
    trial judges findings of fact were based on his assessment of the evidence and
    were rooted in the evidence. He made adverse credibility findings against Mr.
    Irwin, Can-Win Leasings only witness, and rejected important parts of his
    evidence. He found that Mr. Irwin had not acted in good faith in dealing with
    Can-Win Trucks financial affairs. He refused to give Mr. Irwins business judgment
    more credit than Mr. Moncayos. Given the record, and in the absence of
any
evidence from the most logical independent sources  Can-Win Trucks
    auditors, bankers and the consultant Mr. Irwin and Mr. Moncayo retained to
    assess its financial condition  the trial judge was entitled to come to these
    conclusions.

[49]

Can-Win
    Leasing submits that the financial condition of R&R was irrelevant and
    ought not to have been considered in determining that Can-Win Truck was
    salvageable. I disagree.

[50]

R&R
    had been set up by Mr. Irwin and Mr. Moncayo to lease out the trucks in Can-Win
    Trucks inventory. The trial judge stated, at para. 30:

R&R surely forms part of
    the mix as the Bank demanded financial statements from R&R as part of the
    [line of credit] agreement. R&R and Can-Win Truck had the identical
    officers, directors and shareholders I cannot ignore the evidence related to
    R&R. Surely any perceived unfairness to Mr. Irwin is tempered by the fact
    that there is, by his own testimony, approximately [$]200,000 in equity in
    R&R that he has refused to account for.

[51]

In
    light of these findings, the trial judge was entitled to find the R&R
    evidence both relevant and probative to determine whether Can-Win Leasing had
    established that the business was unsalvageable. In turn, this supported his
    finding that the discharge of the loan by Can-Win Leasing was premature and
    prejudicial to Mr. Moncayo.

[52]

If
    the surety was not acting under legal obligation, it was simply a volunteer and
    no right to contribution arose. That is precisely what happened here. The trial
    judge found Can-Win Leasing had not established that failure of business was
    imminent. Can-Win Leasing has failed to demonstrate he made a palpable and
    overriding error in so doing. I therefore accept the trial judges finding that
    Can-Win Leasing was acting solely as a volunteer and had no right of
    contribution from its co-sureties.

[53]

I
    appreciate the policy rationale for permitting a co-surety to stop the
    bleeding when failure of the business is inevitable or where, as in
Stimpson
,
    there has been a verbal demand on the surety. However, there is great potential
    for abuse when this rationale is extended to circumstances in which it is not
    established that default is imminent.

[54]

That
    abuse occurred here. Mr. Irwin decided that he wanted to get out of the
    business. He did so by taking control of the business, excluding Mr. Moncayo
    from it, and causing Can-Win Leasing to pay off the companys banker. He did
    the latter without notifying Mr. Moncayo or discussing alternatives, including
    the prospect of liquidating the business. This deprived Mr. Moncayo of the
    opportunity to work the debt down in an orderly way or to liquidate the company
    so as to maximize its contribution to the debt. It also deprived Mr. Moncayo of
    the ability to look to Can-Win Truck for the discharge of its primary
    obligation. On the evidence the trial judge accepted, this was clearly
    prejudicial to Mr. Moncayo.

[55]

Requiring
    the surety to give notice of his intentions to the co-sureties, and to give
    them an opportunity to participate in the discharge of the obligation, promotes
    the efficient winding up of the business and the equitable allocation of its
    outstanding liabilities. Absent evidence of an imminent default, courts should
    promote that type of conduct and not the unilateral action that occurred here.

[56]

Finally,
    RBCs assignment of the security to Can-Win Leasing, seven months after the
    $500,000 payment, could not resuscitate Can-Win Leasings lost right of
    contribution. Although in this case Can-Win Leasing and RBC negotiated an
    assignment agreement, s. 2 of the
Mercantile Law Amendment Act
, R.S.O.
    1990, c. M.10,

provides that every co-surety who pays the principals
    debt is entitled to an assignment of any security held by the creditor in
    respect of the debt, and to stand in the place of the creditor to obtain
    indemnification from a co-surety. Effectively, every co-surety who comes before
    the courts seeking contribution is entitled to an assignment of the guarantee
    by operation of law.

[57]

If
    an assignment from the creditor is capable of wiping the slate clean such that
    a co-surety is entitled to contribution regardless of the manner and
    circumstances in which the debt was repaid, then s. 2 would have the effect of
    overturning the common law rule that, to give rise to a right of contribution,
    payment must have been made by the surety in a situation where he was legally
    obliged to pay.

[58]

In
    my view, neither the assignment agreement nor s. 2 should be interpreted in
    this manner. Normally, legislative provisions are not meant to be exhaustive
    and are therefore presumed not to displace the common law: Ruth Sullivan,
Construction
    of Statutes
, 5th ed. (Markham: LexisNexis Canada, 2008), at pp. 261-62,
    431-32.

[59]

Moreover,
    s. 2(3) of the
Mercantile Law Amendment Act
provides that [n]o
    co-surety  is entitled to recover from any other co-surety  more than the
    just proportion to which, as between themselves, the last-mentioned person is
    justly liable. This provision limits the scope of an assignment under s. 2(1)
    to the amount for which the co-surety is justly liable. The assignment does
    not extend the co-suretys liability beyond the just proportion owed pursuant
    to the equitable doctrine of contribution: see
Abakhan v. Halpen
, 2008
    BCCA 29, 250 B.C.A.C. 277.

As the voluntary payment of the debt by
    Can-Win Leasing had the effect of discharging the other sureties, Mr. Moncayo
    was not justly liable to Can-Win Leasing for any amount. The assignment did
    not alter this important fact.

F.

Summary and Disposition

[60]

In
    my view, Can-Win Leasing has not demonstrated a palpable and overriding error
    in the trial judges conclusion that Can-Win Truck was salvageable. Can-Win
    Leasing failed to establish that a default by Can-Win Truck on the RBC line of
    credit was sufficiently imminent that it was justified in unilaterally paying
    the debt without notice to its co-surety, Mr. Moncayo. Because Can-Win Leasing
    did not establish that fact, its voluntary payment discharged Can-Win Trucks
    debt and thereby released Mr, Moncayo.

[61]

For
    these reasons, I would dismiss the appeal.

[62]

Mr.
    Moncayo is entitled to his costs of this appeal, which I would fix at $12,500
    all-inclusive.

G.R. Strathy J.A.

I agree K. Feldman
    J.A.

Lauwers J.A. (dissenting):

[63]

I have read my colleagues
    reasons. In my respectful view, this appeal should be allowed. The appellant
    has demonstrated that the trial judge made both palpable and overriding errors
    in his assessment of the evidence, and legal errors warranting this courts
    intervention.

[64]

The motion judges conclusion is
    based on a basic legal error: he assumes that the appellant was legally obliged
    to continue to finance Can-Win Truck even after its principal, Mr. Irwin,
    concluded that the business was not viable. It was commercially unreasonable
    for the motion judge to find that Mr. Moncayo could hold Mr. Irwins direct and
    indirect assets to ransom. Before attending to this error, I am obliged to set
    out some additional facts.

(1)

Factual Background

[65]

In 2006, Can-Win Truck entered
    into new credit facility arrangements with RBC. Mr. Irwin and Mr. Moncayo
    personally guaranteed the RBC loans to Can-Win Truck: each had signed a
    Guarantee and Postponement of Claim for $900,000. Can-Win Leasing, a company
    owned exclusively by Mr. Irwin, signed a further Guarantee and Postponement of
    Claim for $1.5 million. As additional security, in March 2006 Can-Win Leasing
    provided a collateral mortgage to RBC over the Kipling Avenue real property on
    which its business was located, in the amount of $975,000, as well as an
    investment portfolio valued at approximately $750,000. Mr. Irwin effectively
    provided to RBC, directly and indirectly through Can-Win Leasing, total
    security in excess of $4.1 million.

(2)

Can-Win Trucks Financial
    Deterioration

[66]

Market conditions deteriorated in
    2007 and 2008. The economy slowed, and, in the words of the respondent, who
    represented himself at trial, Can-Win Truck lost a substantial amount of
    money. By June 2007, the company owed RBC nearly $800,000 and had sustained a
    loss of approximately $117,000 over the previous six-month period. It was Mr.
    Irwins evidence that the companys fortunes did not improve after this time.

[67]

In January 2008, Mr. Irwin and the
    respondent met to discuss Can-Win Trucks future. Mr. Irwin wanted to wind-up
    the company. The respondent wanted to carry on. The two decided to retain a
    consultant to determine whether the respondent could take over the company. By
    months end, Can-Win Trucks line of credit remained fully drawn. In March 2008,
    Mr. Irwin insisted that all company cheques be signed by him.

[68]

The consultations, which began in
    April 2008, were unsuccessful.  Although Mr. Moncayo wanted to take over the
    business, he was, according to Mr. Irwin, willing to put up nothing. Mr.
    Irwin, for his part, was not prepared to continue to finance the company.

[69]

Mr. Irwin testified that, in April
    and May 2008, he was getting a lot of pressure from the Royal Bank and was
    worried that RBC would foreclose on Can-Win Leasings Kipling Avenue property.
    According to Mr. Irwin, RBC was threatening. He explained, in
    cross-examination, that RBC had advised him it would be better for him to pay
    down the debt before a formal demand was made on the guarantors.

[70]

In June 2008 Mr. Irwin changed the
    locks on Can-Win Trucks premises, which effectively barred Mr. Moncayo from
    the property and from any continued participation in the business. He explained
    that he took this step because Mr. Moncayo had unilaterally moved inventory
    from the site, and had thereby lost his trust.

(3)

Can-Win Leasings Payment
    to RBC

[71]

As of August 2008, Can-Win Truck
    owed RBC almost $700,000. Mr. Irwin caused Can-Win Leasing to pay down just
    over $500,000 of Can-Win Trucks debt to RBC. In March 2009, Can-Win Leasing
    made an additional payment to RBC of about $178,000, extinguishing Can-Win
    Trucks debt. In exchange, Can-Win Leasing obtained an assignment of RBCs
    right, title and interest in Can-Win Trucks debt, and the security that RBC
    held, including the guarantees.

[72]

On July 24, 2009, the appellant
    made a formal demand of the respondent on the guarantee.

[73]

It is common ground that RBC did
    not at any time make a formal demand for payment of Can-Win Truck or of the
    guarantors.

Analysis

(1)

Is a Demand by the
    Creditor an Essential Prerequisite to a Suretys         Right to Pay the
    Creditor and Seek Contribution from a Co-surety?

[74]

The right to contribution arises
    when one co-surety has paid more than its fair share of the common obligation:
Fox
    v. Royal Bank of Canada
, [1976] 2 S.C.R 2, at p. 7. A surety is typically
    notified by way of demand that there has been a default on the loan by the
    principal debtor. Where, as here, the guarantee is payable on demand, the
    demand is a condition precedent to the enforcement of the obligation by the
    creditor:
Bank of Nova Scotia v. Williamson
, 2009 ONCA 754, 97 O.R. (3d)
    561, at para. 13. But the absence of a demand by the lender has not been
    treated as displacing a suretys right of indemnity from the principal debtor,
    as Geraldine Andrews and Richard Millett note in
Law of Guarantees
,
    Sixth ed. (London: Sweet & Maxwell, 2011), at p. 455:

[O]nce there is default by the
    principal, or the guaranteed liability crystallises for any other reason, the
    surety can make payment and look to the principal for reimbursement, without
    waiting for a claim to be made against him. Payment at that stage will not
    prejudice his right to an indemnity on the basis that the payment was
    voluntary or premature.
If the guarantee is to pay on demand, the
    suretys right to pay the creditor and seek an immediate indemnity will not be
    prejudiced if he fails to wait for the demand, even though in such a case the
    demand is a condition precedent to his liability.
[Emphasis added.]

[75]

The same principle has been
    applied to the right of contribution as between co-sureties. In
Stimpson v.
    Smith
, [1999] 2 All E.R. 833, the Court of Appeal of England and Wales
    unanimously held that the absence of a formal demand does not displace the
    right of contribution. The case concerned a settlement by one surety in the
    absence of a written demand by the bank. Lord Justice Judge, at p. 841, cited
    the earlier case of
Thomas v. Notts Incorporated Football Club Ltd.
,
    [1972] 1 All E.R. 1176, at p. 1182, for the proposition that the right to
    contribution cannot turn on the existence of a demand:

The principle is that the surety
    is entitled to remove the cloud which is hanging over him. It would be strange
    indeed, as it seems to me, if he can do that when no demand is required,
    notwithstanding there is no present likelihood of any attempts to recover
    against him, and yet when his liability arises as between himself and the
    creditor only on demand, he cannot seek to remove the cloud until it has
    started to rain, especially as the provision in the contract of suretyship that
    the creditor must make a demand on the surety is clearly a provision for the
    benefit of the surety.

[76]

Lord Justice Judge continued, at
    p. 842:

[O]nce the stage has been reached
    where a demand in accordance with the formal terms of the guarantee can
    realistically be anticipated in the absence of a negotiated settlement, the
    surety who reaches an arrangement with the creditor which is not
    disadvantageous to his co-surety is not thereafter deprived of his entitlement
    to contribution.

[77]

The merits of this approach to the
    absence of the creditors demand are particularly apparent in this case. The
    function of a demand is to provide notice to the guarantor that it will be
    called upon to meet its obligations. The demand gives the opportunity to the
    guarantor to marshal the funds necessary to satisfy the obligation:
Williamson
,
    at para. 13. As the court in
Stimpson
acknowledged, notice and
    opportunity benefit the guarantor.

[78]

In this case, the factual
    circumstances obviated the need for a demand. Mr. Moncayo knew that Can-Win
    Trucks finances were in decline. He knew that Mr. Irwin, whose personal assets
    were most significantly at risk, was neither obliged nor prepared to carry on
    with the business. Mr. Moncayo was in no position to take the necessary steps
    to salvage the business himself. The consultations undertaken in an effort to
    save the business were not successful. Mr. Moncayo thus had ample notice that a
    demand was virtually inevitable.

[79]

My colleague acknowledges that
    even in the absence of a demand from the creditor, a co-surety will nonetheless
    be entitled to indemnification by its fellow guarantors if default by the
    primary obligor is imminent or a demand can realistically be anticipated (
Stimpson
,
    at p. 842). However, he defers to the motion judges conclusion that default
    was not imminent in the circumstances.

[80]

In my view, deference is not
    warranted. The motion judge made a palpable and overriding error in making this
    finding. He based it on the mistaken assumption that Mr. Irwin was legally
    required to continue to finance Can-Win Truck. Mr. Irwin had significantly more
    at stake than Mr. Moncayo; he was entitled to make the unilateral decision to
    stop financing the company. When he did so, default was imminent and
    inevitable. Mr. Irwins decision, and Mr. Moncayos inability to assume
    the necessary financing obligations, precluded a finding that Can-Win Leasing
    was salvageable.

(2)

Was Can-Win Leasings Payment to RBC Premature and Prejudicial to
    the Respondent?

(a)

Principles

[81]

There is no basis here, where
    there is a guarantee and the appellant and respondent stand in the relationship
    of co-sureties, for the application of
Korex
or
Owen v Tate
. The
    appellant was in no sense a volunteer, let alone an officious volunteer.

[82]

The principle that is applied to
    co-sureties is, nonetheless, somewhat similar. In the absence of a formal
    demand from the creditor, it remains open to a co-surety to establish that
    there should be no right of contribution on the basis that the payment to the
    creditor was premature and was prejudicial to the co-suretys interests. In
Stimpson
,
    at p. 839, Lord Justice Gibson acknowledged this possibility in the following
    terms:

[P]ayment of the guaranteed debt
    without the prior consent of the co-guarantor or a court order imposing
    liability on the co-guarantor to pay a contribution does not shut out the
    co-guarantor from arguing that the payment was officious or voluntary and that
    no contribution should be required. That paying co-guarantor takes the risk, as
    [counsel] conceded, that it might be established that no contribution is due.

[83]

In my view, it is not enough for
    a surety seeking to avoid contribution to allege, without more, that the
    payment in question was officious. A surety seeking to avoid contribution
    must establish prejudice. If there is no prejudice, then the surety seeking to
    avoid contribution will have been enriched by the impugned payment, and the
    objective of contribution  being the prevention of unjust enrichment in the context
    of a common obligation  will be defeated. This approach is consistent with the
    statement of Lord Justice Judge in
Stimpson
, at p. 842, that the surety
    who reaches an arrangement with the creditor
which is not disadvantageous to
    his co-surety
is not thereafter deprived of his entitlement to
    contribution (emphasis added).

[84]

Focusing the analysis on prejudice
    to the surety also reflects commercial realities. A guarantor may wish to
    satisfy his obligation under the guarantee for any number of reasons. Unless
    doing so is prejudicial to the interests of a co-surety, I see no compelling
    reason to restrict the paying suretys right of contribution. To borrow the
    analogy referred to in
Stimpson
, where the storm is inevitable, there is
    no reason to discourage a surety in such a case from removing the cloud before
    it rains. In this case, the storm was plainly inevitable.

(b)

Application

[85]

In evaluating the appellants
    right to contribution in this case, I am especially mindful of the general
    principle that the court ought not to substitute its judgment for the business
    judgment of the parties. See, for example:
Laxey Partners Ltd. v. Strategic
    Energy Management Corp.
, 2011 ONSC 6348, 108 O.R. (3d) 440, at paras. 74-76
    (business judgment rule requires courts to defer to business decisions of
    directors and officers);
Re Olympia & York Developments Ltd.
(1993),
    12 O.R. (3d) 500 (Gen. Div.) (not the courts function to descend into
    negotiating arena and substitute its judgment for business judgment of CCAA
    plan participants); and
Keeping v. The Queen
, 2001 FCA 182, [2001]
    F.C.J. No. 899, at para. 5 (not the place of the courts to second-guess
    the business acumen of a taxpayer).

[86]

There is no doubt that Mr. Irwin
    was well within his rights to conclude that the business was not viable, and to
    take steps to protect his assets. As I noted earlier, there is an underlying
    sense in the trial judges reasoning that Mr. Irwin was somehow obliged to
    continue to finance the business personally and through Can-Win Leasing. That
    was not his legal obligation.

[87]

In my view, the trial judge
    committed a palpable and overriding error by substituting his business judgment
    for the business judgment of the party whose assets were most at risk. In doing
    so, he overlooked considerable evidence as to Can-Win Trucks overwhelmingly
    poor financial health, referring laconically only to evidence that Can-Win
    Truck was losing money. In fact, Can-Win Trucks losses were substantial. It
    sustained a loss of approximately $117,000 in just the first six months of
    2007, resulting in negative retained earnings of about $170,000. Mr. Irwin
    testified that, by February 2008, there was a net shortfall of $493,000. Mr.
    Irwin and Mr. Moncayo discussed ways to salvage the business in April 2008.
    Although the respondent wanted to take over the business, he was, according to
    Mr. Irwin, willing to put up nothing. Mr. Irwin had lost trust in Mr.
    Moncayo.  Mr. Irwin, for his part, was not prepared to continue to finance the
    company. Meanwhile, the RBC line of credit was fully drawn. In short, the
    record painted a bleak picture of Can-Win Trucks prospects.

[88]

There is no evidence to support
    the trial judges finding that the appellants payments to RBC materially
    changed the respondents risk in this doomed business. It was doomed by Mr.
    Irwins understandable and legitimate decision not to continue to finance the
    venture. That is what changed the risk to Mr. Moncayo. The respondent has not
    established that he suffered prejudice as a result of the payments made by
    Can-Win Leasing to RBC, apart from the obligation to pay his share. There is,
    in my view, no legal basis for the right of contribution between co-sureties to
    be eliminated here, contrary to the trial judges conclusion. Without the right
    of contribution, the respondent would be unjustly enriched at the expense of
    Can-Win Leasing.

[89]

I note here that although the
    trial judge was suspicious of Mr. Irwins testimony on the issue of pressure
    from RBC, he did not expressly reject it. The trial judge was skeptical, in part,
    because Mr. Irwin testified that RBC pressure came in April and May 2008, but
    the first payment by Can-Win Leasing was not made until August 2008, about
    three months later. In my view, little can be inferred from this delay, given
    the sum of money at issue. It is entirely plausible, even probable, that
    Can-Win Leasing did not have a half-million dollars in cash immediately
    available. The trial judge was also skeptical of Mr. Irwins testimony because
    small payments to RBC were made between January and June 2008. I would not view
    these payments as in any way inconsistent with pressure from RBC. If anything,
    they lend further support to Mr. Irwins position that the bank was anxious
    about the debt, and Can-Win Truck obliged by making minor payments.

[90]

The trial judge discounted, at
    paras. 26-28, the evidence that Mr. Irwin wanted to exit the business. He did
    so on the basis of a handwritten note, dated March 26, 2008, in which Mr. Irwin
    explained that he required signing authority on all company cheques to control
    the Bank until we get the company back on its feet. The trial judge found that
    this note, and particularly the reference to getting the company back on its
    feet, contradicted Mr. Irwins evidence that he wanted out of the business as
    of January 2008. The trial judge drew the inference that Mr. Irwin considered
    the business to be viable.

[91]

In doing so the trial judge made a
    chronological error and misapprehended the evidence. The attempted
    restructuring of Can-Win Truck was an ongoing process that failed
after
the date of the March note: the evidence is that the consultant hired to assist
    with their negotiations did not meet with Mr. Irwin and the respondent until
    April 2008. Therefore, on March 26, 2008  the date of the note  there
    remained the possibility that the respondent would take over Can-Win Truck if
    in fact it could get back on its feet. That possibility later evaporated when
    it became clear that any future for the company would require Mr. Irwins
    continued financial participation, which he was entitled to refuse. As noted,
    this is not a case in which the payment to the creditor was premature.

[92]

Nor was it appropriate for the
    trial judge to impugn Mr. Irwins motives, as he did, at para. 28. The law is
    clear that, provided that the suretys payment to the creditor is neither
    premature nor prejudicial: [t]he fact that the surety may have ulterior motives
    or derive some collateral benefit from making the payment without waiting to be
    sued or waiting for a demand will not affect his right to claim an indemnity:
    Andrews and Millett, at p. 456. See also the comments of Robins J.A. in
Manu
    v. Shasha
, at para. 14:

The fact that the appellant, in
    the course of his business relationship with the respondent, engaged in conduct
    which may be described as deliberate or reckless, or as motivated by an
    ulterior purpose, is not in itself a sufficient ground upon which to deny the
    appellant, as surety, his well-recognized right to contribution.

As I have noted, Mr. Irwin was not obliged to leave his assets at risk in
    the business.

[93]

In my view, the trial judge also
    erred in basing his conclusion that Can-Win Truck was salvageable, in part, on
    the state of affairs of R&R, a distinct business entity. The trial judge
    found, at para. 26, that Mr. Irwin had refused to provide the respondent with
    an accounting for R&R, which seemed to have had retained earnings. Even if
    Mr. Irwins conduct with respect to R&R was oppressive, that issue was not
    part of the pleadings or the relief sought by the respondent. In my view, the
    R&R evidence was irrelevant to whether Can-Win Truck was salvageable and to
    the ultimate question of whether the respondent had established that Can-Win
    Leasings payment to RBC was premature and prejudicial to his interests. As
    Robins J.A. observed analogously in
Manu v. Shasha
, at para. 14, if the
    respondent has a cause of action against Mr. Irwin, the result in this case
    does not prevent him from asserting it.

[94]

As for RBCs assignment of the
    debt, in my view, when Can-Win Leasing made its demand on the respondent, it
    stood in the shoes of RBC as its assignee, and was entitled to make the demand
    for payment: see
Westdale Construction Co. v 1189380 Ontario Ltd.
(1998), 43 B.L.R. (2d) 279, [1998] O.J. No. 1719 (S.C.). The trial judge erred
    in law in reaching the opposite conclusion.

[95]

This is not to say the demand by
    Can-Win Leasing resuscitated Can-Win Leasings right of contribution or
    wiped the slate clean. Can-Win Leasing never lost the right to contribution.
    The purpose of a demand is to provide notice, and the respondent did not have
    to be told what he already knew. Further, as noted above, Mr. Irwin was
    entitled to stop financing Can-Win Truck, and to pay the debt to RBC since
    default became imminent, and to get contribution from Mr. Moncayo. The
    appellants demand, as RBCs assignee, was all that was needed to enforce Mr.
    Moncayos obligation to pay.

[96]

Mr. Irwin was entitled under s. 2
    of the
Mercantile Law Amendment Act
to pay out RBC and take an
    assignment of its security, although, as my colleague points out, he could not
    escape the proportional equities simply by taking that assignment
Manu v.
    Shasha
, at para. 9, per Robins J.A.;
Westdale Construction Co.
, at
    paras. 7-10, per Lederman J.

[97]

Mr. Irwin was plainly a hard-nosed
    and successful businessman. While his approach may appear aggressive, in view
    of Mr. Moncayos apparent impecuniosity, that is not a factor that is relevant
    to the appellants rightful remedy.

P. Lauwers J.A.

Released: October 08, 2014

[1]

At the trial, there appears to have been no
    whisper of Can-Win Leasing being a co-surety. The guarantee signed by Can-Win Leasing
    was not put in evidence. It appears from the trial judges reasons that the
    case was put to him on the basis that Can-Win Leasing was simply a third party,
    not a co-surety.


WARNING

THIS IS AN APPEAL UNDER THE

CHILD AND FAMILY SERVICES ACT

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

45(7)  The court may make an order,

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

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

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

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

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

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

COURT OF APPEAL FOR ONTARIO

CITATION: Children's Aid Society of the Region of Halton v.
    E.M., 2014 ONCA 688

DATE: 20141007

DOCKET: C59146

Cronk, MacFarland and LaForme JJ.A.

BETWEEN

The Childrens Aid Society of the Region
    of Halton

Applicant

(Respondent in Appeal)

and

E.M.

Respondent

(Appellant)

and

M.K.

Respondent

(Respondent in Appeal)

E.M., appearing in person

Diane B. Skrow, for the respondent Childrens Aid
    Society of the Region of Halton

Elizabeth McCarty and Kristin Knoepfli, for the
    respondent the Office of the Childrens Lawyer

Heard and released orally: October 6, 2014

On appeal from the order of Justice J. Trimble of the
    Superior Court of Justice, dated July 18, 2014.

ENDORSEMENT

[1]

The appellant appeals from the order of Trimble J. of the Superior Court
    of Justice, dated July 18, 2014, quashing the appellants appeal from the
    openness order granted by Zisman J. of the Ontario Court of Justice, dated
    March 28, 2014, under the
Child and Family Services Act
, R.S.O. 1990,
    c. C.11 (the Act), pertaining to the appellants biological daughter, S.K.
    S.K. is now almost 15 years of age and has been in protection under the Act
    since 2008  a period of approximately 6 years.

[2]

In our view, the appeal must be dismissed.

[3]

The appellant argues that S.K.s placement for adoption and,
    inferentially, her prior Crown wardship, are illegal and should be set aside
    and that S.K. should be placed with members of her extended maternal family.

[4]

We reject this argument.  Placement cannot be determined at an openness
    hearing.  In addition, nothing on the record before us establishes any defect
    in S.K.s adoption proceedings.  Furthermore, the appellants arguments in
    support of her challenge to S.K.s adoption and the openness order have already
    been considered on several occasions by various judges of the Ontario Court of
    Justice and the Superior Court of Justice.  We note that this is the
    appellants third appeal to this court in respect of her daughters placement.
    She has been unsuccessful throughout.  In essence, the appellant now seeks to relitigate
    core issues concerning her daughters placement already determined by the
    courts.

[5]

The appeal judge of first instance carefully considered the background
    to this protracted litigation and the grounds advanced by the appellant for
    reversal of the openness order and S.K.s placement for adoption.  He noted,
    correctly, that there appears to be no statutory authority under the Act for an
    appeal of an openness order.  In any event, on the record before this court,
    S.K. is not prepared to consent to a more expansive openness order.  In
    contrast, she did consent to her adoption by her adoptive parents and to the
    terms of the openness order.  Contrary to her submission, the appellants
    consent to the openness order was not required.  These considerations are fatal
    to this appeal.

[6]

We further note that the appeal judge referred expressly to the test for
    quashing an appeal and undertook an assessment of the merits of the appellants
    appeal.  Although he stated that it was plain and obvious that the appellants
    appeal could not succeed, his reasons, read as a whole, confirm that he
    directed himself to the governing test for quashing an appeal and applied it
    properly to the facts before him.

[7]

In all these circumstances, we see no basis for appellate intervention with
    the appeal judges decision.

[8]

The appellant also challenges the appeal judges award of costs to the
    Childrens Aid Society and the Office of the Childrens Lawyer.  However, both
    parties have confirmed to this court that they are not seeking costs below.

[9]

The appeal is dismissed.  As neither the Childrens Aid Society nor the
    Office of the Childrens Lawyer seek costs of this appeal, we make no costs
    order.

E.A. Cronk J.A.

J. MacFarland
    J.A.

H.S. LaForme
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Coady v. Barrie, 2014 ONCA 751

DATE: 20141028

DOCKET: C58456

Juriansz, Rouleau and van Rensburg JJ.A.

BETWEEN

Martha Coady

Appellant/Plaintiff

and

Nathan
    Barrie and Rachel McKay,

personally
    and in their capacity as Executors

of the Estate of Robert
    Bruce Barrie

Respondents/Defendants

Martha Coady, acting in person

John J. Cardill, for the respondents

Heard: October 24, 2014

On appeal from the judgment of Justice
Brian
    W.

Abrams of the Superior Court of Justice, dated
    February 6, 2014.

APPEAL BOOK ENDORSEMENT

[1]

Both parties agree the appeal should be allowed in part. We would not disturb
    the motion judges finding that there was no bequest to the appellant of any
    interest in the cottage, nor with his dismissal of her claim for damages. His
    error was in leaving the estate in limbo. In our view, upon noting the
    respondents were prepared to renounce being trustees of the estate he should have
    made an order removing them. We modify his order to include a term removing
    them as trustees effective the date of his decision.

[2]

Today, the parties agree that the appellant should be appointed trustee.
    We so order on the term that she not dispose of any real property, excepting
    the farm property, without the approval of the Superior Court. There is no
    issue as to the appellants entitlement to the farm property. However, we
    cannot at this point make a vesting order, as requested, because we do not know
    all the circumstances.

[3]

We also order the respondents to pass accounts for the period from the
    death of the deceased to today within 60 days subject to further order of the
    Superior Court, and to cooperate in transferring responsibility for the estate
    to the appellant. The appellant is to return to the estate a bracelet and ring
    and to dispose of them as residue of the estate as directed by the Will.

[4]

We fix the costs of the motion below in the amount of $12,500
    all-inclusive in favour of the respondents. Considering the appellants success
    on a motion in this court, and the divided success on appeal, there will be no
    costs of the appeal.