COURT OF APPEAL FOR ONTARIO

CITATION: Kilitzoglou v. Curé, 2018 ONCA 891

DATE: 20181108

DOCKET: C63816

Juriansz, Brown and Huscroft JJ.A.

BETWEEN

Helen Kilitzoglou

Plaintiff/Defendant

by way of counterclaim

(Respondent)

and

Shannon Curé and Tanya Curé, personally and as
    Estate Trustees of the Estate of Albert Curé, deceased

Defendants/Plaintiffs

by way of counterclaim

(Appellants)

Margaret Rintoul and Aly Virani, for the appellants

Leo Klug, for the respondent

Heard: September 20, 2018

On appeal from the judgment of Justice Hugh K. OConnell
    of the Superior Court of Justice, dated April 26, 2017.

Juriansz J.A.:

A.

INTRODUCTION AND BACKGROUND

[1]

The appellants, Shannon Curé and Tanya Curé, are estate trustees. They
    appeal personally and in their capacity as trustees of the estate of their late
    father Albert Curé.

[2]

Albert was a businessman who controlled a number of companies. The
    respondent, Helen Kilitzoglou, was an employee of one of the companies, Alca
    Design Ltd.
At the time of Alberts
    death, Helen was responsible for operating one of Alcas manufacturing
    facilities.
Helen also had a business, Life Line Manufacturing Inc.,
    which leased space and equipment from Alca.

[3]

Albert and Helen became a couple in February 1995. Both had children
    from previous marriages. In December 1996, Albert made a down payment of
    $140,000 on a residence on Westridge Drive in Vaughan. The residence was
    registered only in Alberts name. The balance of the purchase price of $540,000
    was financed by a mortgage, also in Alberts name. Helen paid for the extras.

[4]

In September 1997 Albert and Helen moved into the residence. Albert paid
    the mortgage and other expenses related to the residence. A few years later the
    parties negotiated a cohabitation agreement dated April 26, 2004, but the
    agreement was not signed until September and October 2005. The cohabitation
    agreement required Albert to transfer title of the residence to himself and
    Helen as tenants in common, and Albert made the transfer in August 2005.

[5]

Albert died suddenly in April 2007. His will, dated April 18, 2002,
    appointed his two daughters, the appellants, as estate trustees together with Alberts
    lawyer. The appellants were also the beneficiaries under the will. Helen was
    not a beneficiary, but the cohabitation agreement made available to her the option
    of remaining in the residence.

[6]

This appeal concerns the interpretation and application of articles 7(e)
    and (f) of the cohabitation agreement. These articles deal with Helens option
    to stay in the residence after Alberts death and the costs of maintaining the residence
    if she exercises that option. Articles 7(e) and (f) provide:

7(e) If at the time of CURÉs death KILITZOGLOU and CURÉ are
    cohabiting, KILITZOGLOU shall be entitled to continue to reside in the
    residence for up to three (3) years. CURÉ agrees to include in his will a
    provision to authorize and direct his Trustees to pay the ordinary and reasonable
    costs of maintaining the said residence including mortgage payments if any,
    realty taxes and insurance for the said three (3) years and until the home is
    sold. KILITZOGLOU, may choose to purchase the residence at any time prior to
    the expiry of the three (3) years.

(f) (i) In the event that KILITZOGLOU chooses not to purchase
    the said residence, upon the expiry of the three (3) years, KILITZOGLOU may
    remain in the said residence provided that she pays the sum of ONE HUNDRED AND
    FORTY THOUSAND ($140,000.00) to the residue of CURÉs estate
and thereafter
    pays the ordinary and reasonable costs of maintaining the said residence from
    her own resources
.

Should KILITZOGLOU choose not to reside in the said residence
    or upon vacating the said residence, it shall be sold and the proceeds shall be
    divided as follows:

(a) The sum of (140,000.00) ONE
    HUNDRED AND FORTY THOUSAND DOLLARS shall be paid to the residue of CURÉs
    estate if not already paid;

(b) The balance of said proceeds
    of sale shall be divided equally between KILITZOGLOU and the residue of CURÉs
    estate. [Emphasis added.]

[7]

The main issue on this appeal is what costs are included in the phrase
    ordinary and reasonable costs of maintaining the said residence in article 7(f).
    A review of the parties previous litigation is necessary to understand the
    judgment from which this appeal is taken.

B.

THE FIRST TRIAL

[8]

Article 7 was considered and commented upon by McKelvey J., who presided
    over the first trial between the parties. A review of the reasons of McKelvey J.
    is necessary as the appellants submit that the trial judge erred by purporting
    to decide matters already decided by McKelvey J. As well, Helen characterizes
    certain passages of McKelvey J.s reasons as findings, whereas the appellants
    characterize them as
obiter dicta
.

[9]

The first trial involved several proceedings that were tried together. Helen
    took the position that the cohabitation agreement was invalid and claimed
    support under the
Succession Law Reform Act
, R.S.O. 1990, c. S.26. Helen
    sought an order removing Shannon and Tanya as estate trustees and the transfer
    of Alberts interest in the residence to her. She also sought an order that the
    designation of beneficiaries on Alberts life insurance policy was invalid and
    that the proceeds of the insurance policy should be paid to her. Tanya brought
    an application seeking a declaration that the designation was valid and that she
    and the CIBC were the beneficiaries under the life insurance policy.

[10]

Helen
    also brought claims against the Estate, Alberts accountant, and Alberts
    lawyer for fraud, conspiracy and creating an artificial dividend from one of
    Alberts companies. Additionally, she brought a claim against Shannon and Tanya
    personally, Alberts accountant, and the trustee in bankruptcy, alleging fraud
    and conspiracy arising out of the improper appointment of the receiver manager
    in June of 2007 and consequential improper realization of assets arising out of
    that appointment. Helen claimed damages of $7,500,000, alleging a conspiracy to
    destroy her Life Line business by closing the Alca facility.

[11]

Prior
    to the trial before McKelvey J., Helen abandoned her claim that the
    cohabitation agreement was not legally binding and also abandoned her claim for
    dependents support.

[12]

At
    the first trial there were 33 days of evidence commencing May 21, 2012 and
    ending on July 26, 2013. McKelvey J. rendered judgment on February 14, 2014. He
    rejected all of Helens claims of fraud and conspiracy. He found Helen and Life
    Line were entitled to $72,520 from the Estate for certain business and rent losses
    suffered as a tenant of Alca. As between these parties, he found the
    beneficiary designation of Alberts life insurance policy was valid. He found
    that Helens payment into court of the sum of $140,000 pursuant to an order
    dated February 16, 2010 satisfied the condition in article 7(f)(i) of the
    cohabitation agreement, which required that she pay that amount to the Estate
    should she wish to remain living in the residence after three years. McKelvey
    J. found the Estate was not entitled to an order for partition and sale. He
    also found that Helens option to purchase the residence had expired as she had
    not exercised it within three years of Alberts death.

[13]

Before
    McKelvey J., the Estate acknowledged it was responsible for all the maintenance
    costs of the residence for the first three years following Alberts death as
    stipulated in article 7(e). McKelvey J. dealt with Helens claim for expenses
    she had incurred in maintaining the residence, as well as her claim for certain
    work that needed to be done but had not been done during the first three years.
    At the time of trial, the only work identified in Helens claim that had not
    been completed was the replacement of the roof and windows.

[14]

McKelvey
    J. decided that the aggregate amount of these claims was $84,106.25 and awarded
    Helen judgment against the estate in that amount. He indicated that the funds Helen
    had paid into court should be paid out to the Estate, subject to a set-off of the
    amount he found owing to Helen. McKelvey J. expressed some concern about
    awarding Helen compensation for the cost of replacing the roof and the windows
    when she had not yet incurred the cost of carrying out these repairs. He stated
    at para. 273 that [i]f [Helen] is to receive an award to cover the cost of
    these repairs, there may be an issue as to whether the Estate is entitled to
    any assurance that the repairs are actually carried out in light of the fact
    that the Estate is entitled to share in the proceeds of the home once it is
    sold. He left it to the parties to arrange a further attendance should it prove
    necessary.

[15]

McKelvey
    J., though he considered the issue was not before him, went on to provide his
    views on the application of article 7(f)(i)
in the hope that it may be of some assistance to the parties at a
    later time. H
e stated that had he been required to, he would have found
    that upon the expiry of three years from Alberts death the Estate would remain
    responsible for the capital repairs relating to the residence and Helen would
    become responsible for the ordinary and reasonable costs of maintaining the
    residence. He would also have concluded that the mortgage payments would remain
    the responsibility of the Estate as Albert had failed to arrange for the
    mortgage insurance required by the cohabitation agreement.

[16]

McKelvey
    J. awarded Shannon and Tanya $83,526.98 in costs payable by Helen and Life Line.

C.

HELENS MOTION AFTER THE FIRST TRIAL

[17]

Helen,
    relying on McKelvey J.s comment that he left it to the parties to arrange a
    further attendance should it prove necessary, brought a motion to reopen the
    trial to permit her to adduce further evidence about the cost of repairing the
    windows and roof. She also sought to vary the reasons for judgment to allow for
    the cost of additional repairs not included in the judgment.

[18]

McKelvey
    J. dismissed Helens motion. He explained that he had included the opportunity
    for a further attendance for the benefit of the Estate, which was subject to a
    judgment for the amount of the repairs, even though they had not been made and
    there might be an issue as to whether [Helen] would perform the repairs once she
    received the funds from the judgment."

[19]

McKelvey
    J. ruled that it was not appropriate to reopen the trial to receive further
    evidence from [Helen] to update the costs estimates given at trial or to claim
    new expenses which were not raised at trial because the evidence could have
    been obtained for use at trial through the exercise of reasonable diligence. These
    claims related to issues which were dealt with in the trial before [him] [and]
    would have to be re-litigated almost in their entirety.

[20]

In
    particular, McKelvey J. noted that Helen had proceeded to trial with estimates,
    which were several years old, for the cost of the roof and window replacements.
    He pointed out that she could have obtained updated estimates and introduced
    them at trial, had she wished to do so. McKelvey J. went on to find that there
    was no acceptable explanation for why the other matters raised in her motion
    could not have been identified and addressed in the evidence at trial. He
    specifically identified Helens claim that the Estate should be responsible for
    remediating mould in the residence as a matter that she could have raised at trial.
    He concluded by adding, The interests of justice requiring finality in this
    litigation outweigh any potential benefit in re-litigating the home expenses.

[21]

As
    for the expenses following the three years after Alberts death, Helen argued on
    her motion that McKelvey J. had incorrectly characterized his comments about
    the allocation of these expenses as
obiter
. She argued that the
    interlocutory order that had consolidated the proceedings for trial left the question
    of who is responsible for capital improvements to the residence for McKelvey
    J. to determine. McKelvey J. found the interlocutory order was overtaken by
    amendments to the relief Helen sought and by the parties formal agreement on
    the issues to be determined at trial. He concluded, I was, therefore, correct
    in concluding that my comments with respect to responsibility for payment of
    capital expenses were, in fact,
obiter
, as indicated in my judgment.

D.

The TRIAL DECISION UNDER APPEAL

[22]

I
    now turn to the trial judgment under appeal. In her amended statement of claim filed
    March 18, 2015 Helen sought a declaration that Shannon and Tanya personally and
    as estate trustees were responsible for all mortgage payments and all capital
    expenses and capital improvements for the residence after the expiry of three
    years from Alberts death, and that her sole responsibility was limited to the
    ordinary and reasonable costs of maintaining the residence. She claimed that
    the capital expenses and capital improvements included mortgage payments, property
    taxes, insurance and all other related operational costs.

[23]

She
    also sought damages in the amount of $750,000 for the breach of the
    cohabitation agreement, and exemplary and punitive damages in the amount of
    $25,000. In their statement of defence, the appellants relied on the doctrine
    of
res judicata
and pleaded that most of Helens claims were
    incapable of being tried in the context of this action as they have been fully
    decided in the judgment of McKelvey J. The appellants took the position that
    Helen was responsible for all costs of the upkeep of the residence commencing
    on the third anniversary of Alberts death, and counterclaimed for payments
    made by the Estate relating to utilities, property taxes, insurance, and
    maintenance after those three years.

(i)

The factual matrix

[24]

Referencing
    the Supreme Courts decision in
Sattva Capital Corp. v. Creston Moly Corp.
,
    2014 SCC 53, [2014] 2 S.C.R. 633, the trial judge considered that the
    surrounding contextual circumstances of the cohabitation agreement included the
    fact that Albert and Helen were common-law partners for some nine years before
    the cohabitation agreement was executed, a relationship he described as entrenched
    and lasting. While the cohabitation agreement included a very wide, sweeping
    release in relation to support, maintenance and property transfer issues,
    Albert knew or should have known that Helens financial circumstances in 2004
    were tenuous, while his were sound. It was Albert who was in a position to keep
    the home maintained up to a reasonable standard. Additionally, on Alberts
    death in 2007 Helen was essentially without funds. The trial judge also considered
    it highly significant that Helen and Albert became one-half owners of the residence
    as tenants in common, which, he said, speaks volumes about the nature of the
    relationship between Helen and Albert and the desire of Albert to take care of
    Helen for the rest of her life via providing her with a home to occupy. He
    added that, in his view, article 7(f)(i) also supported the logical inference
    that Albert wanted to care for Helen for the rest of her life, provided she
    paid the Estate $140,000.

[25]

The
    trial judges finding that it was Alberts intention to take care of Helen in
    this way governed his interpretation of the cohabitation agreement.

(ii)

Capital expenses

[26]

While
    the trial judge characterized McKelvey J.s discussion that the Estate should
    be responsible for the capital costs of the residence after the expiry of three
    years as
obiter
, he set out independent reasons for concluding that the Estate
    was responsible for all capital costs and capital repairs commencing April 10,
    2010, the third anniversary of Alberts death. This conclusion would give
    effect to Alberts intention to take care of Helen for the rest of her life.

[27]

The
    trial judge granted Helen judgment to cover the cost of a list of specified
    capital repairs. These included replacement of the exterior windows and doors
    at an estimated cost of $58,000 plus HST, replacement of the garage doors at an
    estimated cost of $16,274 plus HST, replacement of the HVAC system at the cost
    of $19,246 plus HST, and replacement of the eavestroughs and downpipes in the
    amount of $5,797. He also ordered compensation for the remediation of mould
    damage, resultant painting, and repairs to toilets that could not be fixed by simply
    inserting new plumbing gear but did not quantify the amount of compensation for
    these items. He also declared that repairs to the porch and various walkways were
    capital repairs.

[28]

The
    trial judge found that certain matters, such as the replacement of carpeting, the
    sanding, the painting of wooden floor areas, and the replacement of the oven
    were not recoverable capital expenses, but were part of the ordinary
    maintenance for which Helen was responsible. He also refused Helens claims for
    the installation of new leaf guards on the eavestroughs and for upgraded
    toilets.

[29]

The
    trial judge refused Helens request for a declaration that the Estate was bound
    to pay future capital expenses. He declined to do so because he had no doubt
    that the estate trustees and Helen would not be able to agree on whether an
    expense was capital or non-capital. Therefore he ordered that if the parties
    could not agree in the future, they should bring a succinct application to
    court to determine the issue.

(iii)

The mortgage

[30]

The
    trial judge found that Albert had failed to insure the mortgage and his failure
    rested with the Estate to rectify. He ordered that the Estate pay the
    outstanding balance of the mortgage.

(iv)

Realty taxes and insurance

[31]

The
    trial judge did not think that it would be fair or reasonable to hold the Estate
    100% liable [for the realty taxes], given that Helen and the Estate are tenants
    in common in equal shares and because Helen is the occupier enjoying exclusive
    use of the premises and land. He apportioned the insurance premiums on the
    home on a 50/50 basis to reflect the equity apportionment in the home. He
    said that he saw no reason why this division of payment is unfair, nor why it
    should be borne exclusively by Helen.

[32]

He
    made clear that the apportionment of these expenses on a 50/50 basis applied
    starting on the third anniversary of Alberts death.

(v)

Counterclaim

[33]

The
    trial judge found the Estate was entitled to recoup one half of the realty
    taxes and any maintenance costs it had paid after the third anniversary of the
    death of Albert. He dismissed the remainder of the counterclaim.

(vi)

Bad faith and personal liability of the trustees

[34]

The
    trial judge found bad faith on behalf of Shannon and Tanya on the basis that
    they adopted hardball tactics by trying to force Helen to sell the home. He
    characterized their conduct in denying Helen access to funds to pay the
    mortgage and to make the capital repairs so desperately needed to be high handed
    and reprehensible. He found the use of funds from the sale of Alberts cottage
    to pay legal counsel and to make a distribution to the beneficiaries improper.
    He further found that the disbursements from Alberts holding company, 778910
    Ontario Ltd., breached the interlocutory order dated October 22, 2009
    restricting disbursements without a court order. He ordered Shannon and Tanya
    to reimburse the Estate for money distributed to the beneficiaries and for the
    payments the Estate had made to legal counsel.

[35]

Having
    found bad faith by Shannon and Tanya, he awarded punitive damages against them
    in the amount of $20,000 on a joint and several basis to sanction their conduct.
    He indicated he would consider staying the punitive damages if they paid off
    the mortgage within 90 days. He also held Shannon and Tanya to be jointly and
    severally liable for the funds that they are required to pay pursuant to this
    judgment.

[36]

Finally,
    the trial judge awarded costs to Helen in the amount of $85,000 on a
    substantial indemnity scale to be paid by Shannon and Tanya personally, not by
    the Estate.

E.

ANALYSIS

(i)

Standard of review

[37]

The
    cohabitation agreement in this case is an individually negotiated contract. The
    Supreme Court in
Sattva
set out the standard of review to be applied to
    contract interpretation at para. 50: Contractual interpretation involves
    issues of mixed fact and law as it is an exercise in which the principles of
    contractual interpretation are applied to the words of the written contract,
    considered in light of the factual matrix. Determining the factual matrix or
    surrounding circumstances is a question of fact. Interpreting the contract in
    the context of the factual matrix is a question of mixed fact and law. The
    findings of the trial judge in these areas are accorded deference and an appeal
    court can intervene only where there is palpable and overriding error.

[38]

An
    appeal court can also intervene where there is a question of law. Questions of
    law include the application of an incorrect principle, the failure to consider
    a required element of the legal test, or the failure to consider a relevant
    factor.

(ii)

The trial judge erred in his determination and use of the factual matrix

[39]

The
    trial judge erred in his determination of the factual matrix and in the use that
    he made of it to interpret the cohabitation agreement.

(a)

The factual matrix consists of the surrounding circumstances at the time
    of contracting

[40]

The
    factual matrix consists only of objective evidence of the facts of which the
    parties were aware or ought to have been aware at the time of contracting. The
    trial judge cited but failed to apply this legal principle. He erred in law in
    considering Helens financial circumstances at the time of Alberts death in
    2007 to construe the agreement, which was negotiated in 2004 and executed in
    2005.

(b)

The factual matrix cannot overwhelm the contract

[41]

The
    trial judge committed a more fundamental error. While the factual matrix plays
    a significant role by deepening the courts understanding of the words of a
    contract, the Supreme Court cautioned in
Sattva

that it must
    never be allowed to overwhelm the words of the contract. Contract
    interpretation must always be rooted in the words of the contract itself. The
    trial judge committed an extricable error of law by ignoring this principle. He
    allowed his view of the factual matrix to overwhelm and even contradict the
    words of the contract.

[42]

In
    this case, the trial judge noted that the cohabitation agreement included a
    very wide, sweeping release in relation to support, maintenance and property
    transfer issues. However, he did not review or make any reference to the
    provisions that contained the release. I do so now as article 7(f)(i) must be
    read in light of the whole agreement.

[43]

The
    preamble to the agreement states that the parties intended that their rights
    and obligations with respect to support or maintenance from or for the other be
    determined by the agreement. Article 18 stipulates that the agreement is the
    entire and only agreement between them relating to the matters referred to in this
    Agreement and that there are no written or oral collateral agreements between
    them.

[44]

The
    parties covenanted in article 5.2 that at all times during their relationship
    or upon the death of the first of them to die  each shall be and continue to
    be completely separate and independent from the other as regards the ownership,
    use, enjoyment and disposal of all property of every nature and kind.

[45]

In
    article 6.1 the parties covenanted that they shall each remain financially
    independent of the other and that neither shall have any obligation to support
    the other under any present or future circumstance, statute or rule of law or
    equity in any jurisdiction.

[46]

In
    article 6.2 they acknowledged that each of them may suffer or enjoy drastic
    changes in their respective income, assets and debts, in the cost of living or
    in their health, or changes of fortune by reason of unforeseen factors. In
    light of this acknowledgement they agreed that under no circumstance will any
    change, direct or indirect, foreseen or unforeseen, in their circumstances give
    either of them the right to claim any alteration or variation of any of the
    terms of this Agreement or the terms in any other agreement between them.

[47]

Article
    6.2 also provides the parties acknowledgement that each may be called upon
    during the rest of his or her life to use, either wholly or in part, his or
    her capital for his or her own support and each agrees to do so without any
    recourse to the other at any time.

[48]

In
    article 6.3 the parties each released any rights they had or may acquire to
    maintenance, support, alimony, corollary relief, or any other payment of money
    or transfer of property.

[49]

Article
    7, a portion of which is set out above, dealt with the residence. It provided
    that Albert and Helen intended to live in the residence and that title to the
    property would be held in both their names as tenants in common. Article 7(a)
    provided that their individual household goods and chattels would remain their
    individual property, but that each would include in their will a provision
    granting a life interest over the others household goods and chattels prior to
    distribution to their respective children. Article 7(d) specified that Albert
    had made the $140,000 down payment and that the balance of the purchase price had
    been financed by a first mortgage, which Albert undertook to continue to be
    life insured until the year 2012. It also stipulated that if the property were
    sold as a result of the parties separation or for any other reason, Albert
    would receive $140,000 from the net proceeds notwithstanding title to the
    property, before the remaining net equity would be divided equally between the
    parties.

[50]

The
    next articles, 7(e) and (f), which are the provisions at issue in this case,
    are set out above.

[51]

The
    last provision of article 7, article 7(g), allowed Albert to require Helen to
    vacate the residence forthwith but on doing so he would have to pay her
    entitlement under article 7(d) within 60 days.

[52]

The
    parties in article 8 released all rights each had or may acquire in the estate
    of the other, including any allowance or payment as a dependent from the estate
    of the other under the
Succession Law Reform Act or Family Law Act
,
    R.S.O. 1990, c. F.3.

[53]

Article
    9 provided that if the parties were married at the death of the first spouse,
    the surviving spouse would accept the terms of the will of the deceased spouse
    and would advance no claims against the estate of the deceased spouse.

[54]

Article
    10.1 provided that the present or future debts of Helen would be her
    responsibility alone and that she would repay them in the ordinary course.

[55]

Article
    12 contains a broad and sweeping release by which the parties each released,
    disclaimed and waived all claims and rights he or she may have or may acquire with
    respect to the property of the other.

[56]

Consideration
    of these provisions leaves no doubt that a dominant theme of the agreement is
    that each party would remain financially independent of the other and that
    neither shall have any obligation to support the other under any present or
    future circumstance. Given this dominant theme, emphasized explicitly and
    repeatedly throughout the agreement, it was not open to the trial judge to make
    the inference that Albert wanted to care for Helen for the rest of her life,
    and use that inference to drive his interpretation of the agreement. The
    inference he made stands in stark contrast to the agreement read as a whole.

(iii)

Realty taxes and insurance

[57]

The
    trial judge made a further legal error by interpreting some provisions of the
    contract according to what he considered fair, rather than seeking to give
    the words of the contract their ordinary and grammatical meaning in the context
    of the contract as a whole. Specifically, he apportioned realty taxes in
    accordance with what he thought fair or reasonable and apportioned insurance
    premiums to reflect the equity apportionment in the home. He said he saw no
    reason why this division of payment was unfair. However, it was an error of law
    to fail to apportion these expenses according to the ordinary grammatical
    meaning of the words of the contract.

[58]

Article
    7(f)(i) requires Helen to pay the ordinary and reasonable costs of maintaining
    the said residence from her own resources upon the expiry of three years. In article
    7(e) realty taxes and insurance are included in the ordinary and reasonable
    costs of maintaining the said residence". The phrase ordinary and
    reasonable costs of maintaining the said residence must be given the same meaning
    in articles 7(e) and (f) of the agreement.

[59]

The
    realty taxes and cost of insurance had to be borne by Helen after the expiry of
    three years because the words of the contract, in their ordinary and
    grammatical sense, say so. The trial judge erred by deviating from the clear
    text of the agreement and finding otherwise on the basis of what he considered
    fair.

(iv)

Capital expenses

[60]

The
    trial judge, construing the cohabitation agreement on the basis that Albert
    wanted to look after Helen for the rest of her life, found the Estate was
    responsible for all repair costs he characterized as capital repairs. This led
    to his distinguishing between the various claimed repair costs by classifying
    them as either capital or non-capital in nature. It also led to his inability
    to finally dispose of one of Helens main claims  that the Estate had a
    continuing obligation to pay for capital improvements and capital expenses
    related to the residence as long as she lived there.

[61]

The
    trial judges analysis of Helens claim for capital repairs is flawed. First, the
    trial judge erred by entertaining Helen's claims for repairs that arose in the
    first three years after Alberts death. McKelvey J. had finally adjudicated
    these claims. He had already granted Helen judgment for expenses arising during
    the first three years that she had already paid, as well as for the anticipated
    cost of replacing the windows and roof based on estimates Helen had introduced
    in the trial before him. Moreover, when Helen sought to introduce further
    evidence to update the costs estimates given at trial and to claim new expenses
    that were not raised at trial, McKelvey J. dismissed her motion because she did
    not satisfy him that these matters could not have been raised at trial.
    Accordingly, the trial judge erred by failing to find Helen was foreclosed by
res
    judicata
from renewing in her new action claims for expenses and repairs
    that arose during the three years following Alberts death.

[62]

Second,
    in regard to repairs that arose after three years, the trial judge erred by excluding
    from ordinary and reasonable maintenance what he termed capital repairs. Article
    7(f)(i) makes no mention of capital repairs. Moreover, it is difficult to
    discern the basis upon which he identified repairs as capital or non-capital in
    nature. He explained that the replacement of the garage doors and the repair of
    the walkways and porch were capital items because they were not day to day
    maintenance. Replacement of the carpet and the sanding and painting of floors
    were ordinary maintenance rather than capital expenses because [n]ormal wear
    and tear of occupants degrades carpet, and the wooden floor area was
    notorious for wear and tear. Replacing the oven was also ordinary maintenance,
    but for a different reason: the oven was used exclusively by Helen.

[63]

Having
    provided the parties with no basis for determining who would be responsible for
    future repairs, the trial judge left the main dispute between the parties unresolved,
    requiring them to re-attend on a succinct application every time they
    disagreed about the nature of a repair.

[64]

The
    trial judge arrived at this unsatisfactory result because he commenced his analysis
    on the basis that Albert intended to look after Helen for the rest of her life.
    The agreement, as reviewed above, repeatedly emphasizes that the parties
    intended to remain financially independent of the other and that neither shall
    have any obligation to support the other under any present or future
    circumstance.

[65]

The
    trial judge lost sight of the legal principle emphasized by Rothstein J. at
    para. 57 of
Sattva
:

The interpretation of a written contractual provision must
    always be grounded in the text and read in light of the entire contract. While
    the surrounding circumstances are relied upon in the interpretive process,
    courts cannot use them to deviate from the text such that the court effectively
    creates a new agreement. [Citations omitted.]

[66]

The
    trial judge erred by allowing a faulty factual matrix to overwhelm the words of
    the agreement. He relied on the faulty factual matrix to interpret article
    7(f)(i), ignoring the context of the whole of the agreement, and the whole of
    article 7 in particular. In doing so, he in effect created a new agreement.

[67]

The
    context of the whole agreement and the other parts of article 7 indicate that Alberts
    objective intention was to make only a limited provision for Helen. Albert, in
    the cohabitation agreement, did not give Helen a survivor interest in the
    residence. Albert and Helen were tenants in common. The agreement ensures that
    Albert or his estate would recoup the down payment he had made. The agreement also
    gave Albert the right to require Helen to vacate the residence forthwith, reserving
    to Albert the option to remain in the residence by buying Helen out. Even Alberts
    individual household goods and chattels would ultimately be distributed to his
    children. The agreement, when read as a whole, repeatedly emphasizes the
    parties intentions to remain financially independent with no claims of any
    nature on each others estates. It is in this light that the phrase ordinary
    and reasonable costs of maintaining the said residence must be construed.

[68]

As
    noted above, the phrase the ordinary and reasonable costs of maintaining the
    said residence appears in both articles 7(e) and (f) of the agreement. Article
    7(d), which deals with Alberts obligation to pay the expenses while both were
    living in the house, requires Albert to pay the everyday ordinary and
    reasonable costs of maintaining the residence. The modifier everyday that appears
    in article 7(d) does not appear in articles 7(e) and (f). The logical inference
    is that the ordinary and reasonable costs in articles 7(e) and (f) are not
    limited to everyday costs as they are in article 7(d). Further, the parties
    agreed before McKelvey J. that under article 7(e) the Estate was responsible
    for all repairs to maintain the residence in the first three years without any
    distinction for repairs of a capital nature. The same phrase ordinary and
    reasonable costs of maintenance in article 7(f) has the same meaning.

[69]

The
    language of the agreement states that Helen, if she elects to remain in the residence,
    is responsible for paying from her own resources all the ordinary and
    reasonable costs of maintaining the residence. The words ordinary and
    reasonable protect Helen from demands of the estate trustees that she carry
    out repairs beyond those ordinarily and reasonably required. Although article
    7(f) does not include the costs of any additions or renovations that improve the
    residence, major repairs are required in the ordinary course of maintaining a
    residence. In the ordinary course, furnaces, ovens, and garage doors wear out
    and have to be replaced. These may not be everyday costs, but they are
    readily differentiated from the costs of building an addition to the house or
    performing renovations that improve the residence and go beyond simply maintaining
    it. The trial judge quite correctly decided the Estate did not have to pay for
    the installation of leaf guards on the eavestroughs and for new upgraded
    toilets. These would have been improvements. The agreement does not address who
    would be responsible for capital improvements. In the unlikely event the
    parties agree to effect capital improvements to the residence, they, as tenants
    in common, would share the cost equally.

[70]

Article
    7(f)(i) provides for two conditions precedent to Helens entitlement to remain
    in the residence. To remain in the residence, Helen must pay the Estate
    $140,000 and she must pay the ordinary and reasonable costs of maintaining the
    residence. Should Helen not wish to incur the cost of a major repair reasonably
    required to maintain the residence, she may choose not to do so. But in that
    event, according to the terms of the agreement, she would no longer have the
    right to remain in the residence. Should Helen vacate the residence, all costs
    would be borne equally by the tenants in common until the house is sold
    pursuant to article 7(f).

(v)

Bad faith

[71]

McKelvey
    J. rejected the submission that Shannon and Tanya had acted in bad faith in
    their administration of the Estate. He explained that the circumstances facing
    the Estate provided a compelling explanation why events unfolded as they did.
    Initially, there were limited funds available to the Estate following Alberts
    death. This was complicated by the fact that the business operated by Albert
    failed and went into bankruptcy. There were further problems when Helen
    objected to Shannon and Tanya being appointed as executors of the Estate. The
    court appointed an independent estate trustee and, up to the time of McKelvey
    J.s judgment, the disbursement of funds by the estate trustee was controlled
    by the court. McKelvey J. concluded:

In these circumstances it would be unfair to characterize any
    breach by the Estate of its responsibilities under the cohabitation agreement
    as being egregious or motivated by ill will towards Ms. Kilitzoglou.

[72]

McKelvey
    J.s finding applies to conduct up to the time of the trial before him. After
    the trial before McKelvey J., Shannon and Tanya still had no control over the Estate
    until the removal of the court-appointed estate trustee. The trial judge could
    base his finding of bad faith only on the actions of Shannon and Tanya after the
    removal of the court-ordered estate trustee.

[73]

Part
    of the basis for the trial judges finding of bad faith was the failure of
    Shannon and Tanya to make the capital repairs he had identified and which were so
    desperately needed. As explained above, all the costs of maintenance that
    arose in the first three years had already been adjudicated by McKelvey J., and
    Helen had received funds to repair the roof and windows. Helen is responsible
    for ordinary and reasonable costs of maintenance that arose or do arise after the
    third anniversary of Alberts death. Shannon and Tanyas failure to pay such
    costs could not form part of the basis for finding them to have acted in bad
    faith.

[74]

The
    trial judge also supported his finding of bad faith by relying on the fact that
    Shannon and Tanya disbursed funds from Alberts holding company contrary to Lauwers
    J.s order dated October 22, 2009 and paid out money from the Estate to the
    beneficiaries. Lauwers J.s order was an interlocutory order preventing
    dissipation of the companys funds pending the trial of Helens claim for damages
    from
the Estate and others arising
    out of their alleged fraud, conspiracy and creating an artificial dividend.
    That interlocutory non-dissipation order ceased to have effect when McKelvey J.
    dismissed Helens claims. T
he disbursement of funds from Alberts
    holding company following the judgment of McKelvey J. cannot support the trial
    judges finding of bad faith.

[75]

The
    main basis for the trial judges finding of bad faith was his view that Shannon
    and Tanya tried to force Helen to sell the residence. He reasoned that Helen
    was not obliged to sell the residence given her payment of the $140,000.00 to
    secure her right to stay as per the agreement. However, article 7(f)(i) provided
    two conditions precedent for Helens right to stay in the residence. Not only
    did Helen have to pay $140,000 to the Estate, she also had to pay the ordinary
    and reasonable costs of maintaining the residence. Given that Helen was not
    paying all of the costs of maintaining the residence, Shannon and Tanya could reasonably
    take the position that she had not fully complied with article 7(f)(i) and that
    the residence should be sold. Their position that the residence should be sold
    could not support a finding of bad faith.

[76]

The
    trial judges finding of bad faith is set aside. Consequently, the trial
    judges orders based on that finding, including the award of punitive damages
    against Shannon and Tanya and the orders making Shannon and Tanya personally
    liable for various matters, fall away.

(vi)

Insurance on the mortgage

[77]

Article
    7(d) required Albert to maintain insurance on the mortgage, stated to have a
    balance of $325,000 at the time the agreement was drafted, until 2012. Albert
    maintained a life insurance policy for $600,000 on which he designated the CIBC,
    as there (sic) interest may appear, and Tanya as the beneficiaries. Helen
    challenged the beneficiary designation of the insurance policy in the first
    action and, prior to the matter being heard, the court ordered the disputed
    life insurance proceeds to be held in trust by a firm of solicitors, after
    which it was entirely paid out by the court-appointed estate trustee pursuant
    to court orders. At the time of the trustees discharge, there remained a
    balance on the mortgage.

[78]

While
    Albert designated the CIBC as a beneficiary on his life insurance policy, he did
    not specifically have a policy of mortgage insurance. If he had arranged mortgage
    insurance, the mortgage would have been discharged. The trial judge quite
    properly found Albert was in violation of the cohabitation agreement and that
    the Estate was duty-bound to pay the mortgage together with any arrears. His
    declaration to that effect is upheld. Further, while the insurance monies were
    exhausted, other monies in the Estate were paid out to the beneficiaries while
    the mortgage remained outstanding. The trial judges order that Shannon and Tanya
    reimburse the Estate for the funds to pay off the mortgage is also upheld.

(vii)

Counterclaim

[79]

It
    follows from the foregoing analysis that the appellants counterclaim must be
    allowed. Helen is liable to compensate the Estate for all ordinary and
    reasonable costs the Estate has paid to maintain the residence after the third
    anniversary of Alberts death, other than payment of the outstanding mortgage.

(viii)

Costs appeal

[80]

Given
    the success of the appellants appeal, their appeal of the trial judges costs
    order against them is moot.

F.

Conclusion

[81]

The
    appeal is allowed. The trial judgment is set aside and replaced with an order
    that:

(i) the appellants, Tanya Curé
    and Shannon Curé, personally and as estate trustees for the estate of Albert
    Curé, are responsible for the payment and discharge of the outstanding mortgage
    on the residence;

(ii) from the third anniversary
    of Albert Curés death for as long as Helen Kilitzoglou remains in the residence
    or until her death, Helen Kilitzoglou is responsible for all ordinary and
    reasonable costs of maintaining the residence, including all costs of realty
    taxes and property insurance, with no exclusion for any ordinary and reasonable
    costs of maintenance on the basis that they are purportedly capital in
    nature;

(iii) Helen Kilitzoglou is liable
    to the appellants, Tanya Curé and Shannon Curé, as estate trustees for the
    estate of Albert Curé, for all ordinary and reasonable costs of maintaining the
    residence paid by the estate of Albert Curé after the third anniversary of the
    death of Albert Curé, other than payment of the outstanding mortgage.

[82]

The
    appellants are entitled to their costs of the appeal fixed in the amount of
    $25,000 inclusive of disbursements and taxes. The appellants are entitled to
    their costs at trial in the amount of $25,478.16, as reflected in the Bill of
    Costs submitted at trial.

Released: DMB NOV 08 2018

R.G. Juriansz J.A.

I agree. Grant Huscroft J.A.

I agree. David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kinbridge (Bronte) Inc. v. 1401114 Ontario Inc.,  2018 ONCA 957

DATE: 20181128

DOCKET: C64977

Strathy C.J.O., Benotto and Roberts JJ.A.

BETWEEN

Kingridge (Bronte) Inc.

Applicant
(Appellant)

and

1401114 Ontario Inc. and QEW-Bronte Developments
    Inc.

Respondents
(Respondents in Appeal)

Christopher I.R. Morrison and Joel Cormier, for the
    Appellant

Michael R. Kestenberg and Aaron Hershtal, for the
    Respondents

Heard: November 23, 2018

On appeal from the order of Justice Jennifer Woollcombe of
    the Superior Court of Justice dated January 17, 2018.

REASONS FOR
    DECISION

[1]

The appellant appeals from the dismissal of its application to obtain
    payment out of court of the sum of $600,000.

[2]

The appellant purchased two parcels of land (the lands) from the
    respondents with a vendor take-back mortgage held by the respondents. The parties
    amended agreement of purchase and sale and the vendor take-back mortgage terms
    provided that if the official plan was not amended to change the zoning designation
    of a portion of the lands to Business Commercial prior to the mortgages
    maturity date, which the parties agreed, as stated in the mortgage, would be June
    17, 2018, the principal amount owing under the mortgage would be reduced by
    $600,000. The standard charge terms of the mortgage also stipulated that if the
    lands were sold without the consent of the respondents, the principal owing
    under the mortgage, with accrued interest, plus a bonus equal to three months
    interest, would immediately become due and payable at the sole discretion of
    the respondents.

[3]

On February 3, 2017, the appellant sold the property without the
    respondents consent. When the appellant sought a discharge of the mortgage, the
    respondents demanded payment of all amounts owing under the mortgage, including
    the three months interest bonus. The appellant refused to pay the interest
    bonus, arguing that the $600,000 reduction applied because the zoning had not
    yet been amended. The appellant paid the amount of $600,000 into court.  The
    appellant and the respondents sought payment of these monies.

[4]

The application judge rejected the appellants principal argument that
    its sale of the lands accelerated the date by which the property designation
    under the official plan had to change. Had the appellant wanted such a term, he
    could have negotiated its inclusion into the parties agreements. The appellant
    was represented on the purchase and the mortgage by experienced counsel. The
    plain language of the mortgage did not provide for that interpretation and
    clearly stipulated that the date by which the amendment had to take place was
    June 17, 2018. The appellant sold the lands without the respondents consent
    prior to June 17, 2018. This triggered the clear obligation to pay all monies
    owing under the mortgage and the three-month interest bonus.

[5]

In the court below, the parties agreed on the applicability of the
    principles of contractual interpretation set out in
Sattva

Capital
    Corp. v. Creston Moly Corp.
, 2014 SCC 53.

[6]

On appeal, the appellant essentially repeats the same submissions that
    were rejected by the application judge. The appellant also advances on appeal
    the newly framed argument that the application judges order erroneously serves
    to nullify the express term of the parties agreement of purchase and sale and
    mortgage that the purchase price would be reduced by $600,000 if the rezoning
    did not occur before June 17, 2018. It is common ground that there was no
    rezoning by that date, therefore, the appellant is entitled to the price reduction,
    notwithstanding that it sold the lands in February 2017.

[7]

We are not persuaded by these submissions.

[8]

Aside from the fact that this argument was never made in this form to
    the application judge, the appellants application itself precludes such a position.
    There is no mention of a separate, free-standing right to a reduction of the
    purchase price nor is there a request that the court find that such a right
    exists.  Rather, in the grounds for the application, it is clearly stated that
    the parties reached a compromise of the appellants request for a $600,000
    reduction in the purchase price by agreeing that a $600,000 reduction in the
    principal of the VTB would be applied if the portion of the lands in question
    currently designated Office Employment is not amended to designate such lands
    as Business Commercial, prior to June 17, 2018.

[9]

We are also of the view that the appellants newly framed
    interpretation of the parties agreements makes no commercial sense. Without an
    express term providing that the price reduction would survive the appellants
    sale of the lands prior to June 17, 2018, it is not reasonable to infer that
    the parties would intend to have any outstanding obligations under their
    agreements following the appellants sale of the lands.

[10]

The
    appellant has identified neither a palpable and overriding error in the
    application judges meticulous assessment of the factual matrix of the
    agreement nor an extricable legal of law in her interpretation of the
    agreement. Her interpretation of the parties purchase and mortgage agreements
    is reasonable and subject to deference by this court.

[11]

Accordingly,
    the appeal is dismissed. As agreed, the respondents are entitled to their costs
    in the amount of $20,000, inclusive of disbursements and taxes.

G.R. Strathy
    C.J.O.

M.L. Benotto
    J.A.

L.B. Roberts
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lavender v. Miller Bernstein LLP, 2018 ONCA 955

DATE: 20181128

DOCKET: C64207

Epstein, van Rensburg and Brown JJ.A.

BETWEEN

Barry Lavender

Plaintiff (Respondent)

and

Miller Bernstein LLP

Defendant (Appellant)

Robert Staley and Nathan Shaheen, for the appellant

Daniel Bach, Serge Kalloghlian and Paul Bates, for the
    respondent

Shantona Chaudhury and Cristina Senese, for the Law
    Foundation of Ontario

Appeal heard: March 5, 2018

On appeal from the judgment of Justice Edward P.
    Belobaba of the Superior Court of Justice, dated July 12, 2017, with reasons
    reported at 2017 ONSC 3958, and reasons on costs reported at 2017 ONSC 4739.

COSTS ENDORSEMENT

[1]

The appellant was successful in its appeal of a
    summary judgment in a class proceeding. This court reversed the decision of the
    motion judge. Although the appellant had been negligent in its audit of the
    Form 9 reports that Buckingham Securities was required to file with the Ontario
    Securities Commission (the OSC), confirming its segregation of assets and
    minimum capital, there was no duty of care owed by the auditor to Buckinghams investor
    clients. This court concluded that the motion judge erred, in particular, in
    his proximity analysis.

[2]

The appellant seeks partial indemnity costs of
    the summary judgment motion in the sum of $1,009,063.32 and of the appeal in
    the sum of $159,463.29.

[3]

The respondent and the Law Foundation of Ontario
    (LFO) submit that the appellant should be awarded costs of the summary
    judgment motion in the sum of $400,000 and costs of the appeal in the sum of
    $50,000. They do not take issue with the appellants entitlement to costs of
    both the summary judgment motion and appeal. Nor do they dispute that the
    amount of costs sought reflects the actual time and expense incurred by the
    appellant in defending the proceedings and pursuing the appeal.

[4]

Indeed, the respondent and LFO acknowledge that
    the amounts they ask this court to award the appellant for the summary judgment
    motion and appeal are considerably less than what the respondent was awarded following
    its success in the summary judgment motion at first instance, and what the
    respondent proposed as its own costs, if successful on the appeal, at the close
    of argument in this court:

·

At first instance the respondent class was
    awarded $775,000, which reflected a 25% reduction from partial indemnity costs assessed
    at $1,067, 900 because the respondent had been successful on liability, but had
    failed to prove damages, and was given the opportunity to file further evidence
    on this issue; and

·

The respondents costs outline submitted to this
    court indicated that, if successful, it would be seeking partial indemnity costs
    of the appeal in the sum of $176,691.49.

[5]

We invited written submissions on costs, after
    the respondent advised that the class had received funding from the Class
    Proceedings Fund. LFO had a right to be heard on costs, according to r. 12.04
    of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.

[6]

The respondent and LFO make three arguments in
    support of their position on costs. First, they contend that this is an
    appropriate case for the court to exercise its discretion to impose a reduced
    level of costs under s. 31(1) of the
Class Proceedings Act, 1992
, S.O. 1992, c. 6
.
They submit
    that the case raised a novel point of law and involved matters of public
    interest. Second, the respondent and LFO argue that the appellants costs of
    the summary judgment motion should be reduced under r. 57.01(1)(g) of the
Rules
    of Civil Procedure
because of its conduct in refusing to admit facts that
    were either uncontroversial or had been admitted in the prior OSC proceedings.
    Third, they submit that the costs claimed by the appellant are
    disproportionate.

[7]

We do not give effect to these arguments.

[8]

This was not a case that engages the courts
    discretion under s. 31(1) of the
Class Proceedings Act.
The claims
    made by the respondent in this action do not raise any novel question of law or
    matter of public interest.

[9]

The respondents claim falls within a relatively
    common category of claims asserting auditors negligence and involved the
    application of settled law. While the Supreme Courts decision in
Deloitte
    & Touche v. Livent Inc. (Receiver of)
, 2017 SCC 63, [2017] 2 S.C.R.
    855, added clarity to the application of the
Anns/Cooper
test

for
    assessing whether a duty of care is owed, the issue in this case was the
    application of that test to a particular set of facts. Nor did the case have some
    specific, special significance for, or interest to, the community at large
    beyond the members of the proposed class:
Pearson v. Inco Ltd.
(2006), 79 O.R. (3d) 427 (C.A.), at para. 9;
Williams v. Mutual Life
    Assurance Co. of Canada
(2001),
27 C.C.L.I. (3d) 256
, at para. 24. The respondents claim depended on an evaluation of
    whether a duty of care was owed by the auditor to a group of client investors
    in the context of a particular statutory scheme, which no longer exists. Even
    if, as the respondent argues, auditors perform an important role in ensuring
    proper disclosure by companies within the capital markets, this does not
    transform every case involving auditors negligence into one that engages the
    public interest.

[10]

We turn to the contention that the appellants
    costs should be reduced by reason of its delay in admitting certain facts. The
    respondent and LFO say that the appellant refused, in response to a 2013
    request to admit, to admit facts that had previously been admitted in its settlements
    with regulatory agencies, that many such facts were later admitted in Mr.
    Kornblums cross-examination in 2017, and that in the interim, the respondent
    was put to the unnecessary expense of retaining experts to review Buckinghams
    records and to opine on the appellants compliance with auditing standards.

[11]

At first instance, the respondent relied on this
    argument to seek costs on a level exceeding partial indemnity, which were
    refused by the motion judge who concluded that elevated partial indemnity
    costs were not available and that there was no reprehensible conduct on the
    part of the appellant that would justify an award of substantial indemnity
    costs. We note that the same evidence is relied on here to argue for the
    application of r. 57.01(1)(g).

[12]

There is simply no basis on this record to
    reduce the appellants costs for this reason. While the respondent and LFO
    assert that additional costs were incurred when the respondent had to prove
    facts that ought to have been admitted, the chart provided to the court below,
    and included in the submissions to this court, simply shows that numerous facts
    that were
already
admitted by the appellant in regulatory proceedings were
    ultimately admitted by the appellant on cross-examination. Nothing is provided
    to support the contention that additional expense was incurred in order to
    prove facts that ought to have been admitted. Indeed, the respondent and LFO
    argue only for a general reduction in costs, without pointing to any specific
    amount of costs that they say could have been avoided if the admissions had
    been made at an earlier stage. In any event, the record before us shows that
    the respondent also refused to admit many facts that were set out in the
    appellants request to admit.

[13]

Finally, the quantum of costs is reasonable
    and proportionate. There were two fact witnesses and seven expert witnesses.
    All were cross-examined. As the motion judge noted, the issues were complex and
    important, the record voluminous, and the parties provided lengthy written
    submissions. In this court, the parties, after delivering their factums,
    provided additional submissions to address the Supreme Courts decision in
Livent.
And, as already noted, the costs
    sought by the appellant are significantly less than
the
    respondents own costs at first instance and what the class was seeking if
    successful in the appeal.

[14]

For these reasons, the appellant is entitled to
    its costs on a partial indemnity basis of the summary judgment motion fixed at
    $1,009,063.32, and of the appeal fixed at $159,463.29, both amounts inclusive
    of disbursements and HST.

Gloria
    Epstein J.A.

K.
    van Rensburg J.A.

David
    Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Majewsky v. Veveris, 2018 ONCA 938

DATE: 20181122

DOCKET: C62945

Simmons, Miller and Fairburn JJ.A.

BETWEEN

Peter Majewsky

Plaintiff (Respondent)

and

Juris
    Veveris and Christina Miller-Veveris

and
    Stewart Title Guaranty Company

Defendants (
Appellants
)

Marvin J. Huberman, for the appellants

Ryan Breedon, for the respondent

Heard: September 26, 2018

On appeal from the judgment of Justice M.J. Donohue of
    the Superior Court of Justice, dated October 11, 2016, with reasons reported at
    2016 ONSC 5608.

COSTS ENDORSEMENT

[1]

In a judgment dated October 24, 2018, we allowed the appellants appeal
    in part by setting aside the trial judges finding that the respondent was
    entitled to a prescriptive easement over a cedar trail that encroached on the
    appellants land and dismissing the respondents action in that respect. We
    dismissed the balance of the appellants appeal in which they sought to set
    aside the trial judges findings that the respondent had acquired possessory
    title to the house lands and a prescriptive easement over a portion of a
    laneway. We awarded costs of the appeal to the respondent in the amount of
    $10,000 and invited the parties to make submissions concerning the costs award
    in the court below. This is our decision concerning that award.

[2]

The trial judges order that the respondent is entitled to costs of
    $42,954.63 is varied to provide that the respondent is entitled to costs of $32,000.
    Although we set aside the trial judges finding that the respondent was
    entitled to a prescriptive easement over the cedar trail, overall, the
    respondent still bettered the offer to settle on which the trial judge relied
    in awarding costs. Further, although the respondents claim to a prescriptive
    easement over the cedar trail was a significant aspect of his claim, it paled
    in comparison to his claims to adverse possession of the house lands and a
    prescriptive easement over a portion of the laneway.

Janet
    Simmons J.A.

B.W.
    Miller J.A.

Fairburn
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Michail v. Ontario English Catholic Teachers
    Association, 2018 ONCA 950

DATE: 20181123

DOCKET: M49750 (C65674)

Brown J.A. (In Chambers)

BETWEEN

Myriam Michail

Plaintiff (Moving Party)

and

Ontario English Catholic Teachers Association,
    Marshall Jarvis, Bruno Muzzi, Fern Hogan, Joanne Schleen, Shelley Malone,
    Sheila Brescia, London District Catholic School Board and Ontario Labour
    Relations Board

Defendants (Responding Parties)

Myriam Michail, acting in person

Christopher Perri, for the responding parties, the
    Ontario English Catholic Teachers Association et al.

Audra Ranalli, for the responding party, the Attorney
    General of Ontario

Jacob Pollice, for the responding party, the Department
    of Justice Canada

Heard: In writing

REASONS FOR DECISION

[1]

Myriam Michail brings a motion in writing seeking several orders: (i)
    dispensing with the requirement that she sign a standard undertaking in order
    to obtain the release of audio recordings of the hearings of earlier motions heard
    by this court on August 30, 2018 and October 18, 2018; (ii) permitting her to
    transcribe those proceedings; (iii) directing the publication on the courts
    website of the reasons of Paciocco J.A. released September 4, 2018; and (iv)
    permitting her to challenge the constitutional validity and applicability of
    portions of s. 136 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43,
    specifically ss. 136(1)(a)(i), (b), (c), and 136(4).

[2]

The respondents take no position on her motion. The Attorney General of
    Ontario and Department of Justice Canada take the position that Ms. Michails motion
    is not properly before the court and that her Notice of Constitutional Question
    in respect of s. 136 of the
Courts of Justice Act
is a nullity.

[3]

The procedural history of this appeal is set out in the October 25, 2018
    reasons of the panel reported at 2018 ONCA 857, available on the courts
    website.

[4]

Ms. Michail initiated judicial review proceedings in the Divisional
    Court. Certain interlocutory orders were made by single judges in those
    proceedings in 2017. In July 2018, Ms. Michail filed a notice of appeal from
    those orders in this court.

[5]

She then brought a motion seeking certain procedural directions in
    regard to her appeal: (i) the ability to file a factum of more than 30 pages;
    (ii) the transfer of the files in her Divisional Court judicial review
    proceedings in Hamilton and London to this court to be used as part of the
    record on appeal; and (iii) an extension of the time to perfect her appeal.

[6]

Paciocco J.A heard the motion on August 30, 2018. By reasons released
    September 4, 2018, Paciocco J.A. granted Ms. Michail an extension of time to
    perfect her appeal. However, he dismissed the balance of her motion, giving a
    detailed explanation of why he was doing so at paras. 14 to 19 of his reasons:

In my view, I must dismiss the appellants motion for relief
    from compliance with the page limit as being contrary to the interests of
    justice.

First, the 30 page limit for facta is imposed to keep appeals
    manageable, efficient and cost-effective for the litigants and the court. I
    agree with counsel for the OECTA that it is burdensome and expensive for
    responding parties to have to cope with lengthy pleadings. Permitting the
    appellant to file an overlong factum would work unfairness to the respondents.

Second, I have reviewed the 95 page notice of appeal filed in
    this matter, with care. It is repetitive and includes extensive material not
    contemplated by the Rules. For example, the notice of appeal raises issues that
    have not yet been the subject of adjudication below, including information
    about the treatment of the Divisional Court files, and the constitutionality of
    provisions of the
Courts of Justice Act
.

Third, the appellant bases her request, in part, on her
    personal organizational preferences. She wishes to include, in the body of her
    factum, documents that should be in her appeal book and compendium, exhibit
    book, and book of authorities. She says that doing so helps her organize her
    thoughts, and, in her view, makes for easier argument. I see no basis for
    permitting the appellant to redesign the manner of pleading and argument,
    developed by this court over many years, a process faithfully followed by many
    self-represented litigants. In my view, the appellant must pay heed to and
    comply with the
Rules
.

In short, I am persuaded that if the appellant restricts
    herself to appropriate content for court documents as described in the
Rules
,
    removes immaterial information, and takes a disciplined approach to setting out
    appropriate bases for proper grounds of appeal, she can comply with the page
    limits. The motion for relief from the page limit imposed by the
Rules
is dismissed.

I also dismiss the appellants request to have the Divisional
    Court files transferred, en masse, to this court. Those files cannot be used as
    the court record in this court, and the appellant has not satisfied me of the
    need for all of the documents contained in those files to be before this court.

[7]

Ms. Michail then brought a motion asking a panel of this court to review
    the order of Paciocco J.A.

[8]

The respondents brought a motion to quash Ms. Michails appeal.

[9]

At the direction of the President of the panel, the court advised Ms.
    Michail by letter dated October 15, 2018 that it would first consider the
    motion to quash.

[10]

The
    panel did so at the hearing on October 18, 2018. In its October 25, 2018
    reasons, the panel explained why this court did not have jurisdiction to
    consider Ms. Michails appeal. The panel quashed Ms. Michails appeal.

[11]

Since
    the appeal has been quashed, I do not have the jurisdiction to consider Ms.
    Michails new motion. There no longer is an appeal before this court in which a
    constitutional question can be raised, nor is there an appeal in which I could
    make the procedural orders sought by Ms. Michail. Consequently, I must dismiss
    her motion for lack of jurisdiction.

[12]

It
    remains open to Ms. Michail to obtain the audio recordings of both hearings by
    completing the standard Request Form/Undertaking to the Court for Access to
    Digital Recordings.

[13]

Finally,
    by way of explanation to Ms. Michail, this court does not require motion judges
    to post on the courts website the reasons for each motion they decide. It is
    left to the individual motion judge to decide whether or not to publish on the
    courts website his or her reasons on a motion.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Northern
    Bruce Peninsula (Municipality) v. Dolson, 2018 ONCA 895

DATE: 20181108

DOCKET: C64802

Watt, van Rensburg and Brown JJ.A.

IN THE MATTER OF an appeal under clause 116(2)(a) of the
Provincial
    Offences Act
, R.S.O. 1009, c. P.33, as amended

BETWEEN

Municipality of the Northern Bruce Peninsula

Appellant

and

Matthew Steven Dolson and Edward Kevin Doyle

Respondents

Nicholas Lovell, for the appellant

Jacob Damstra, for the respondents

Heard and released orally: November 5, 2018

On appeal from the decision of Justice Julia A. Morneau of
    the Ontario Court of Justice sitting on appeal under the
Provincial
    Offences Act
, allowing an appeal from the convictions entered on April 20,
    2016 and the sentences imposed on June 20, 2016 by Justice of the Peace Stewart
    A. Taylor.

REASONS FOR DECISION

[1]

With leave of the chambers judge, the Municipality appeals a decision of
    a judge of the Ontario Court of Justice sitting on appeal from convictions
    entered in Provincial Offences Court for breaches of a municipal by-law and the
Building Code Act, 1992
,
S.O. 1992, c. 23 (
BCA

).

[2]

For the purposes of the appeal to this court, we are concerned only with
    the conviction of the respondents for a breach of the
BCA
. The
    convictions based on a breach of the municipal by-law are not under appeal.

[3]

On appeal to the Ontario Court of Justice, the now respondents raised a
    number of grounds of appeal. All but one were rejected by the appeal judge and
    it is the one that succeeded that is the sole ground of appeal to this court.

[4]

To ensure that no miscarriage of justice occurred, the appeal judge
    considered an argument that had not been advanced at trial. That argument
    related to the limitation period applicable to proceedings under the
BCA
.
    On the basis of this courts decision in
R. v. Pickles
, [2004] O.J. No.
    662, the appeal judge concluded that the one-year limitation period under the
BCA
ran from the date the construction of the building was finished. The failure of
    the Municipality to establish that proceedings were instituted not more than
    one year after completion was fatal to the conviction. It was on this basis
    that the conviction under the
BCA
was quashed on appeal.

[5]

In reaching her conclusion on the limitation issue, the appeal judge
    relied on s. 36(8) of the
BCA
, which at one time required that
    proceedings for breaches of the Act be commenced no more than one year after
    the time when the subject matter of the proceedings arose. It was that
    provision that this court applied in
Pickles
to decide that the
    limitation period ran from the date that construction was completed.

[6]

What does not appear to have been drawn to the attention of the appeal judge
    was that on July 1, 2010, s. 36(8) of the
BCA
was amended to provide
    that the one-year limitation period commenced on the date that the facts on
    which the proceeding is based first came to the knowledge of an officer or the
    chief building official.

[7]

The first complaint about the offending structure came to the attention
    of the Municipality on October 15, 2012. After officials had attended at the
    property and issued compliance orders to no avail, an information was sworn and
    summons issued on June 12, 2013  about eight months following the initial
    complaint.

[8]

The appeal judge erred in law by applying the wrong limitation period to
    the case before her. This prosecution was instituted within one year of the Municipality
    first gaining knowledge of the structure. There was evidence at trial about
    this date and it was not open to the appeal judge to interfere with the trial
    courts finding on this issue. As a result, the decision of the appeal judge
    cannot be supported. It constitutes an error of law.

[9]

The respondent applies for leave to introduce fresh evidence on the
    hearing of the appeal. In our view, this evidence, which describes in
    significant detail the disabilities under which the respondent Doyle labours,
    does not meet the criteria for the admissibility of fresh evidence. We also
    note that the respondent did not seek the accommodations he now suggests should
    have been extended to him at trial. There, he was represented by counsel, and
    by a paralegal. Even if we were to receive the proposed fresh evidence, we are
    not persuaded that it would affect the reliability of the result reached at
    trial or the fairness of trial proceedings. In the result, we decline to admit
    the proposed fresh evidence.

[10]

The
    appeal is allowed, the decision of the appeal judge set aside and the
    convictions and sentences imposed at trial are reinstated. There shall be no
    order as to costs.

David Watt J.A.

K. van Rensburg J.A.

David Brown J.A.


COURT OF APPEAL FOR
    ONTARIO

CITATION:
    OLA Staffing Inc. v. D'Angelo Brands (2156775 Ontario Inc.), 2018 ONCA 922

DATE: 20181119

DOCKET: C64856

Watt, Miller and Nordheimer JJ.A.

BETWEEN

OLA Staffing Inc.

Plaintiff (Respondent)

and

2156775 Ontario Inc. o/a DAngelo Brands

Defendant (Appellant)

Gregory
    Hemsworth, for the appellant

Kathryn Bird and
    Edward ODwyer, for the respondent

Heard and
    released orally:  November 16, 2018

On
    appeal from the judgment of Justice Freya Kristjanson of the Superior Court of
    Justice, dated December 11, 2017 with reasons reported at 2017 ONSC 7318.

REASONS FOR DECISION

[1]

The defendant appeals from the summary judgment awarded by the motion
    judge for payment of outstanding invoices rendered by the plaintiff.

[2]

The appellant contracted with the respondent for the provision of
    temporary employees to staff its manufacturing plant.  There was a master
    contract between the parties governing their relationship and then there were
    individual requests for the provision of temporary employees.  These
    arrangements began in 2008.  The issue between the parties arose in 2013.

[3]

The practice was that, when the appellant needed employees, one of its
    employees would contact the respondent and make that request.  The respondent
    would then provide the employees requested.  The appellant would assign these
    employees to their duties and would advise the respondent of the hours worked.
    The respondent would pay the temporary employees for the work done and would
    then invoice the appellant for the costs of providing the employees.

[4]

Unbeknownst to either of the parties, the appellants representative
    engaged in a fraudulent scheme whereby he would request three specific
    temporary employees to work at the appellants plant.  However, those temporary
    employees did not actually work at the plant.  Instead, the appellants
    representative would certify to the respondent that the employees had worked
    and the employees would receive the payments.  The appellant would then get
    invoiced by the respondent for these employees.

[5]

The appellant eventually discovered this fraudulent scheme and advised
    the police.  The appellant continued to use the services of the respondent.  At
    a later point, the appellant refused to pay certain invoices due to the
    respondent on the basis that it was recouping the monies paid to the respondent
    for the employees involved in the fraudulent scheme who had not actually
    worked.

[6]

The respondent commenced this action to recover payment for the unpaid
    invoices.  The appellant defended on the basis that it was entitled to a
    set-off for the earlier monies paid to the respondent for the employees who had
    not worked together with the costs of investigating the fraud.  The appellant
    did not counterclaim for the amounts so paid.

[7]

In granting summary judgment, the motion judge made three essential
    findings.  The first was that much of the evidence that the appellant filed on
    the summary judgment motion was hearsay (or double hearsay) and was not
    entitled to any weight.  We agree.  The appellants reliance on r. 39.01(2) of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194 for the
    admissibility of this evidence falters on the fact that the deponent did not
    attest to his belief in the information provided.

[8]

The second was that the appellant could not rely on the defence of legal
    set-off because the amount claimed by way of set-off was a claim for
    unliquidated damages and thus was not a debt.  We agree with the motion judges
    analysis on this issue.

[9]

The third was that the defence of equitable set-off was not available
    because the transactions were not sufficiently closely linked for equitable
    set-off to apply (para. 45).  We do not agree with the motion judges
    reasoning in this respect.  In our view, the transactions were closely linked.
    They were all part and parcel of the same contractual relationship.  That
    relationship had been ongoing for many years and was governed by an overriding
    master contract.

[10]

That
    said, we nonetheless agree with the conclusion reached by the motion judge that
    equitable set-off was not available in this case.  Our reason for that
    conclusion rests on the first requirement for the application of equitable
    set-off, that is, that the party relying on a set-off must show some equitable
    ground for being protected against the adversary's demands:
Algoma Steel
    Inc. v. Union Gas Limited
(2003), 63 O.R. (3d) 78 (C.A.) at para. 26.  In
    this case, there is no equitable ground favouring the appellant.  It was the
    appellants representative who orchestrated the fraud, including certifying to
    the respondent that the employees had worked which the respondent relied on for
    its invoices.  In those circumstances, it is the appellant who should bear any
    loss that resulted.  The appellant was also in the best position to discover
    and prevent the fraud since it knew, or ought to have known, whether the
    employees actually worked in its plant.  This factor also argues in favour of
    the appellant bearing the resulting loss.

[11]

Consequently,
    we agree with the motion judge that summary judgment was properly granted in
    favour of the respondent for the amounts due on the unpaid invoices.

DISPOSITION

[12]

The
    appeal is dismissed.  The appellant will pay to the respondent the costs of the
    appeal fixed in the agreed amount of $10,000 inclusive of disbursements and
    HST.

David
    Watt J.A.

B.W.
    Miller J.A.

I.V.B.
    Nordheimer J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Attorney General) v. Lochner, 2018 ONCA
    910

DATE: 20181114

DOCKET: C65386

Feldman, Roberts and Fairburn J.A.

BETWEEN

Ontario (Attorney General)

Respondent

and

Lina Lochner and Silvano Lochner

Appellants

Silvano Lochner, acting in person

Hannah Freeman, for the respondent

Heard: November 5 and 6, 2018

On appeal from the
    order of Justice Anne M. Molloy of the Superior Court of Justice, dated May 14,
    2018, with reasons reported at 2018 ONSC 2994.

REASONS FOR DECISION

[1]

Silvano Lochner and his mother, Lina Lochner, appeal
    from the dismissal of an application for
mandamus
before Molloy J. That application arose from a Justice of the
    Peaces refusal to issue process arising from a private information. Molloy J. found
    that the Justice of the Peace had acted within her jurisdiction and did not
    deny the appellants natural justice.

[2]

On the last occasion this appeal was scheduled
    to be argued, the appeal could not go ahead because Mrs. Lochner was said to be
    in ill health. The appeal was rescheduled for hearing on November 5, 2018.

[3]

On that date, another adjournment was requested
    because Mrs. Lochner, who was present in court with an Italian interpreter, was
    again said to be in ill health.

[4]

The court agreed to adjourn the matter to the
    following morning at 9:30 a.m. The court endorsed the record that, absent a
    medical note explaining Mrs. Lochners condition and why she could not be
    present for her appeal, the matter would go ahead at that time.

[5]

On November 6, 2018, Mr. Lochner attended court in
    his mothers absence. He had a medical note saying that until November 14,
    2018, Mrs. Lochner should avoid court/will be unable to attend due to her
    medical condition as she has been developing severe anxiety and panic attacks.
    Mr. Lochner asked for the appeal to be adjourned to December.

[6]

Crown counsel asked that the matter be converted
    to an in writing appeal.

[7]

Mr. Lochner argued that the matter not be
    converted to an in writing appeal. Although he first said that his mother
    wanted to make submissions, he later proposed that he make submissions on her
    behalf in December.

[8]

We are prepared to give Mr. Lochner one last
    chance to present his case through oral submissions. The appeal is scheduled to
    be heard on December 10, 2018 at 10:00 a.m. The matter will be marked
    peremptory, meaning that it will go ahead on that date. Mr. Lochner will have
    10 minutes to make oral submissions and the Crown will have 5 minutes to
    respond. If Mr. Lochner wishes to reply to the Crowns submissions, he will
    have to reserve some of his 10 minutes for that purpose.

[9]

Mr. Lochner says that he will appear for both
    Mrs. Lochner and himself. It appears that Mrs. Lochner finds court too
    stressful. She is not required to attend, but her appeal is also marked
    peremptory for that date.

K. Feldman J.A.
L.B. Roberts J.A.
Fairburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Osawe (Re), 2018 ONCA 940

DATE: 20181122

DOCKET: C65106

Doherty, Rouleau and van Rensburg JJ.A.

IN THE MATTER OF: Edward Osawe

AN APPEAL UNDER PART XX.1 OF
    THE
CODE

Kelley Bryan, for the
    appellant

Eric H. Siebenmorgen, for the Attorney General of
    Ontario

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

Heard and released orally: November 16, 2018

On appeal from the disposition of
    the Ontario Review Board, dated February 6, 2018.

REASONS FOR
    DECISION

[1]

We are satisfied that the
    appeal of the Boards disposition should be dismissed subject to one variation.

[2]

The appellant asserts that
    the disposition is unreasonable. Essentially, his argument is that the Board failed
    to consider that the terms of the proposed conditional discharge would, in
    effect, provide the same protection for the public as the current detention
    order.

[3]

We disagree. The Board was
    alive to the appellants desire for a conditional discharge and his willingness
    to consent to treatment. The issue, however, was whether the structure he
    required, including supervision, which until that point was 24 hours a day (with
    the exception of four 45 minutes periods per week, when Mr. Osawe was in the
    community unsupervised), could be provided other than through a detention
    order.

[4]

The Board concluded that the
    proposed conditional discharge terms did not provide the structure required for
    Mr. Osawes continued transition from a group home to community living with
    less supervision. There was a need for the Hospital to continue to approve
    housing and to monitor Mr. Osawes mental state and to intervene quickly if
    necessary to return him to the Hospital should there be a decompensation.

[5]

The appellant is correct that
    the Boards summary of the expert evidence incorrectly states that Mr. Osawe
    had historically stopped taking medication in the absence of supports. In fact,
    Dr. Mishras evidence was that Mr. Osawe had historically expressed the wish to
    stop his medication once he was outside the jurisdiction of the Board. Dr.
    Mishras concern was that Mr. Osawe had a long history of supervision
    failures, with a lengthy period of unstable housing before he came under the
    Boards jurisdiction, and a poor understanding of his mental illness, and he
    continued to deny his role in the index offences. In these circumstances,
    although Mr. Osawe was compliant with medication, and abstained from
    substances, he had not internalized the controls that were essential to his continued
    recovery. While the appellant was doing well in his present residence, this was
    because of the structured environment and intensive daily supervision. As the
    Board accepted, the Hospital needed to be able to approve the appellants
    accommodation and to manage his risk to the community during this time of
    transition to less supervision in the community.

[6]

We do not see anything
    unreasonable in the Boards refusal to order a conditional discharge. The
    disposition, apart from the failure to remove the 24 hour supervision
    requirement, is fully supported by the evidence that was before the Board,
    including the Hospital report and Dr. Mishras testimony. The Board engaged
    appropriately with the issues and reasonably concluded that a conditional
    discharge was not appropriate at this time.

[7]

We agree with the parties
    that the Boards failure to remove the 24 hour supervision condition appears to
    have been an oversight. The evidence fully supports that the goal for Mr. Osawe
    is to continue his transition to less supervised accommodation in the
    community, consistent with the considerable progress he has been making.

[8]

The appeal is therefore
    allowed, but only to the extent that the disposition is amended to remove the
    phrase 24 hour a day supervised from para. 2(f).

Doherty J.A.

Paul Rouleau J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Paterson Veterinary Professional Corporation v.
    Stilton Corp. Ltd., 2018 ONCA 967

DATE: 20181129

DOCKET: M49784 (C65863)

Lauwers J.A. (Motions Judge)

BETWEEN

Paterson Veterinary
    Professional Corporation

Respondent (Applicant)

and

Stilton Corp. Ltd.

Appellant (Respondent)

R. Seumas M. Woods, for the appellant

David Fogel, for the respondent

Heard: November 26, 2018

REASONS FOR DECISION

[1]

By a judgment released August 21, 2018, Tzimas J. of the Superior Court
    of Justice, ordered Stilton Corp. Ltd., the appellant, to transfer title to
    certain real property to Paterson Veterinary Professional Corporation, the
    respondent, no later than September 20, 2018. The application judge enforced a
    settlement agreement between the parties, dated December 20, 2013.

[2]

According to the reasons, at para. 17: [a]s of January 1, 2018, the
    basic rent came to $6,460.71 plus HST, for a total sum of $7,300.60, and an additional
    $1,521.69 plus HST, or $1,719.51 per month, on account of realty taxes and
    insurance. According to the affidavit of Marjorie Patterson, the monthly TMI
    is $1,719.51. She deposes that the respondent has deposited both the base rent
    and the TMI into its lawyers trust account since February 2018.

[3]

The appellant moves for an order staying the judgment pending final
    disposition of the appeal and an order requiring the respondent to make
    monthly payments of taxes, maintenance and insurance (TMI), and rent, in
    respect of the Property.

[4]

The parties have agreed to a consent order on the following terms:

a)

The
    Judgment is hereby stayed pending final disposition of the appeal herein;

b)

Pending final disposition of the appeal herein, the applicant
    (respondent in appeal) Paterson Veterinary Professional Corporation
    (Paterson) shall be entitled to remain in possession of the property known
    municipally as 981 Clarkson Road, Mississauga (the Property), and that Stilton
    shall not take any steps to interfere with its quiet possession of the
    Property; and

c)

Pending final
    disposition of the appeal herein Paterson shall pay to Stilton the sum of
    $1,719.51 per month for taxes, maintenance, and insurance (TMI) starting as
    of February 1, 2018, without prejudice to Patersons right to argue that no TMI
    is properly due and payable to Stilton.

[5]

However, the parties have not agreed on the disposition of the rent
    pending appeal. The appellant seeks an order of the court requiring the
    respondent to pay rent of $7,300.60 monthly to it, pending appeal, instead of
    depositing that amount monthly into the trust account of the respondents
    lawyer. The appellant argues that there is no conceivable basis on which the
    respondent could occupy the premises entirely free of costs apart from TMI. Counsel
    recognizes that the old rent figure under the lease might well be the high
    watermark of the occupation costs that a court might order in this case. But he
    notes that if the appeal fails and the respondent is entitled to specific
    performance or to damages in lieu of specific performance, then there is more
    than enough equity left in either the property itself or in any award of
    damages to keep the respondent whole.

[6]

The respondent argues that the appellant is the author of its own
    misfortune and should not be rewarded for breaching the settlement agreement.

[7]

In effect, the appellant is seeking interim relief. The jurisdictional
    basis for a term granting interim relief is that it is incidental to granting a
    stay under rule 63.02 of the
Rules of Civil Procedure
. The consent to
    a stay obviates the need to parse the elements of the test for a stay set out
    in
RJR-Macdonald Inc. v. Canada (Attorney-General)
, [1994] 1 S.C.R.
    311.

[8]

However, it seems to me that where the applicant for a stay is also
    seeking a term that amounts to interim relief, then by analogy to the
RJR-Macdonald
test the court must be satisfied that the applicant will
    suffer irreparable harm if that term of the stay, requiring the respondent to
    pay the rent of $7,300.60 monthly to the appellant, pending appeal, is not
    granted. The facts presented to the court do not show such harm. Accordingly, I
    decline to add that term to the order.

P Lauwers J.A.