COURT OF APPEAL FOR ONTARIO

CITATION:
Vancurenko
    (Re), 2012 ONCA 505

DATE: 20120720

DOCKET: C54732

Laskin, Cronk and Hoy JJ.A.

IN THE MATTER OF:  George Vancurenko

George Vancurenko, acting in person

Anita Szigeti and Lucy Saunders, as
amicus curiae

Michael Medeiros, for the Attorney General

Heard: July 4, 2012

On appeal against the disposition of the Ontario Review
    Board, dated July 29, 2011.

By the Court:

[1]

The appellant, George Vancurenko, appeals from the July 29, 2011
    disposition of the Ontario Review Board, ordering that he remain subject to a
    conditional discharge.  He seeks an absolute discharge.

[2]

On October 16, 1985, the appellant was found not guilty by reason of
    insanity of one count of second degree murder.  At the time of the offence he
    was in a transient psychotic state secondary to alcohol.  More than 26 years
    have since elapsed.  The appellant spent some 15 years in various psychiatric
    facilities. The balance of the time has been spent in the community on
    conditional release.

[3]

He is now 58 years of age and has not used drugs or alcohol since 2001.
    In 2010, Dr. Hill, the appellants designated outpatient forensic psychiatrist,
    supported the appellants request for an absolute discharge, as did the
    treating hospital. The Board, however, declined to grant the request.

[4]

The appellants current diagnoses are alcohol and substance abuse, in
    full and sustained remission, and personality disorder with narcissistic and
    antisocial traits.

The Boards Reasons

[5]

The Board concluded, at para. 47 of its reasons for disposition, that
    absent the supervision of the Board there is a real likelihood that Mr.
    Vancurenkos behaviour in the community will escalate to the level where he
    poses a significant risk of physical and/or psychological harm to others.
    This conclusion was founded in the Boards concerns with the appellants
    criminal behaviour, his lifestyle and his past problems with drugs and alcohol.

[6]

The Board was particularly concerned with an assault that took place in
    2008. It explained, at para. 43:

It is concerning to the Board that as recently as 2008 Mr.
    Vancurenko engaged in a criminal act, namely assault, which caused physical
    and/or psychological harm to another.  The Board does not accept the submission
    of Counsel on behalf of Mr. Vancurenko that because there were no physical
    injuries noted that the assault charge does not rise to the level contemplated
    by the Supreme Court of Canada in
Winko
.  On this occasion Mr.
    Vancurenko physically assaulted an elderly and vulnerable man who had one leg.
    It is concerning to the Board that this assault occurred during a time when Mr.
    Vancurenko has been abstinent from alcohol or drugs for almost six years and
    speaks directly to the risk posed by Mr. Vancurenko even when his addictions
    are well controlled.

[7]

It rejected Dr. Hills opinion that the appellant would never relapse
    with drugs or alcohol, writing at para. 44: The Board does not share the
    confidence level expressed by Dr. Hill that Mr. Vancurenkos addiction issues
    are behind him and of a historical nature.

[8]

The Board also expressed concern, at para. 45, that the appellant
    continues to live a lifestyle that exposes him to greater risk of conflict
    with the law. The lifestyle concern was founded in the appellants choices:
    to continue a relationship with his spouse, who has drug addiction issues; to
    live in a trailer park  a less than desirable setting; and to continue to
    engage in gambling.

[9]

Finally, the Board inferred, at para. 46, that the appellant had only avoided
    further criminal charges over the past year because he had been subject to the
    terms of a recognizance. The recognizance imposed a curfew and required the
    appellant to live with his father (who did not live at the trailer park).

Analysis and Conclusion

[10]

In
    our view, the Boards disposition is unreasonable and cannot be supported by
    the evidence. Accordingly, we allow the appeal and discharge the appellant
    absolutely.

[11]

The
    evidence does not support the Boards conclusion that the appellant poses a
    risk that rises to the level contemplated in
Winko v. British Columbia
    (Forensic Psychiatric Institute)
, [1992] 2 S.C.R. 625.  The Boards
    decision placed undue emphasis on relatively trivial conduct, ignored the
    opinion of the treating psychiatrist and entered into the realm of speculation.

[12]

At
    best, the evidence before the Board revealed, in the words of
amicus
,
    a high risk of trivial harm or a miniscule risk of future grave harm. In
    either case, the legal threshold of a significant threat to the safety of the
    public was not satisfied and the decision cannot stand.

[13]

First,
    the 2008 assault that so troubled the Board was, relatively speaking, minor in
    nature. The appellant went to question his neighbour after his niece told him
    the neighbour had taken her cat.  An altercation ensued.  The appellant knocked
    the neighbours arm and boxed his ear.  While the neighbour was vulnerable,
    because he was missing a leg, there was no indication of any physical or
    psychological harm.

[14]

With
    the exception of a conviction for assaulting a police officer in 1999, which
    occurred when the appellant was not yet drug and alcohol free, there have been
    no other convictions for assaultive behaviour since the index offence.

[15]

As
    to the Boards other concerns with the appellants lifestyle, we note the
    information before the Board that the appellant would like to leave the trailer
    park, but that it is not economically feasible.  His accommodation reflects a
    lack of financial resources, not a choice to live in a setting that exposes him
    to greater risk of conflict with the law.  Moreover, the evidence of Dr. Hill
    was that the appellant is showing good judgment and good self-control in
    handling his living environment.  As an example, the appellant called the
    police to deal with a drunken individual in the trailer park rather than
    attempting to resolve the problem himself.

[16]

With
    respect to the appellants gambling, as
amicus
argued before us,
    gambling is legal.  The treating hospital reports that the appellants gambling
    is recreational  now once per month or less.  Dr. Hill says the appellant does
    not have a gambling addiction.

[17]

On
    the issue of the effect of the recognizance, we note the opinion of Dr. Hill
    that the appellants good behaviour is a result of conducting himself
    appropriately, and not his fathers supervision.

[18]

Moreover,
    the Board provided no basis for its rejection of Dr. Hills unequivocal opinion
    that the appellant would not revert to drug or alcohol use. Nor does the record
    suggest any basis for doing so at this time. In 2006-2007, the appellants
    addictions counsellor reported that the appellant had made such progress that
    she felt he did not need further counselling.  The appellant nonetheless
    continued counselling.  He attends Alcoholics Anonymous regularly. All drug
    screens have been negative.  Although his spouse still has addiction problems
    and continues to use drugs, the appellant has not been using drugs or alcohol.

[19]

As
    noted above, in 2010, the treating hospital recommended an absolute discharge.
    The Board declined to follow the hospitals recommendation, noting that there
    had been a number of incidents of concern this past year. None of those
    incidents entailed any physical or psychological harm  serious or otherwise
    to the public.

[20]

Of
    the two sets of criminal charges outstanding at the time, the appellant has
    since been acquitted of the charges arising when he intervened after a security
    guard at Price Choppers retrieved some chocolate bars taken by his spouse.  The
    other criminal matter involved taking $220 out of a wallet found on the floor
    in a casino and discarded in a washroom.  While the matter remains outstanding,
    the appellant has offered to make restitution.

[21]

Importantly,
    there have been no concerning incidents since the appellants 2010 hearing.
    The substance of the treating hospitals current report is even more positive
    than in 2010.  In addition to noting that the appellant has not shown any
    impulsive or illegal behaviour, it reports that his presentation is better.  There
    have been no behavioural concerns.  It notes that the appellant is less
    disposed to antisocial behaviour.  Indeed, the hospital reports that the
    appellant exhibits pro-social behaviour, assisting his aging parents, and
    attempting to direct his spouse away from her drug addictions. This evidence
    shows that many of the concerns adverted to by the Board in 2010 are no longer
    present.

[22]

In
    our view, there is no evidence that the appellant poses a real risk of serious
    physical or psychological harm to individuals in the community. The Boards
    conclusion to the contrary was unreasonable. Accordingly, we order that the
    appellant be discharged absolutely.  We are grateful for the assistance of
amicus
in this matter.

Released: Jul 20, 2012

JL                                                                             John
    Laskin J.A.

E.A.
    Cronk J.A.

Alexandra
    Hoy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Wilkinson v. Wilkinson, 2012
    ONCA 518

DATE: 20120726

DOCKET: C54936

Simmons, Juriansz and Epstein JJ.A.

BETWEEN

Doreen Wilkinson

Applicant

(Respondent in Appeal)

and

Ian Wilkinson

Respondent

(Appellant)

Martha A. Cook, for the appellant

Kenneth J. Peacocke, for the respondent

Heard: July 20, 2012

On appeal from the order of Justice Kelly A. Gorman of
    the Superior Court of Justice, dated January 10, 2012.

APPEAL BOOK ENDORSEMENT

[1]

The appellant appeals from an order granting
    leave to issue a writ of possession requiring that he vacate a home owned by
    his mother. In affidavits filed on the application the appellant alleged that
    he had done extensive work on the home and cared for both his parents in
    reliance on oral promises that he could eventually purchase the home. In
    addition, the appellant claimed an interest in the home by way of resulting or
    constructive trust. In the alternative, he claimed a right of occupation as a
    tenant.

[2]

The application judge declined the appellant's
    requests to convert the application to an action or to adjourn the application
    to permit cross-examinations. Applying the test in
RJR-MacDonald v.
    Canada
, [1994] 1 S.C.R. 311, she found:

1.
There was no serious issue to be tried concerning the
    appellant's right to possession as the mother is the titled owner of the home.

2.
Because the mother is 88 years old, on a fixed income and
    carrying the costs of two homes, she would suffer irreparable harm if the
    application were not granted  whereas the appellant would not suffer
    irreparable harm if the application were granted.

3.
The balance of convenience favoured the mother as the
    appellant was paying nothing towards the carrying costs of the home.

[3]

In the result, the application judge ordered
    that a writ of possession should issue.

[4]

In our view, the application was properly
    granted. The only issue before the court was whether the title holder was
    entitled to possession. Although the appellant introduced evidence relating to
    a claim for a constructive trust, he had not commenced a counter-application or
    action. In other words, he had not applied to the court for relief as
    contemplated by Rule 60.10 (2).  In these circumstances, the evidence adduced
    by the appellant was not relevant to the single issue before the court and
    there was no reason to convert the application to an action or to grant an
    adjournment for cross-examinations.

[5]

As for the appellants alternative claim that he was a tenant, he had applied
    to the Landlord and Tenant Board for relief, but had asked that his application
    to the Board be stayed.

[6]

In these circumstances, we see no impediment to the granting of a writ
    of possession. The appeal is therefore dismissed.

[7]

The costs of the appeal are to the respondent on a partial indemnity
    scale fixed in the amount of $9,917.99 inclusive of
    disbursements and applicable taxes.


COURT OF APPEAL FOR ONTARIO

CITATION:
1196158
    Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544

DATE20120821

DOCKET: C54452

Laskin, Sharpe and Epstein JJ.A.

BETWEEN

1196158 Ontario Inc.

Plaintiff (Appellant)

and

6274013 Canada Limited, Rob Kumer, CB Richard Ellis
    Limited, John LaFontaine, Karen Pickernell, Carl Lavoie, William Neilson
    Limited, Toronto Hydro Corporation, Toronto Hydro-Electric System Ltd. and
    Toronto Hydro Energy Services Inc.

Defendants (Respondents)

William Pepall and Louise Moher, for the appellant

J. Schatz and D. Holden, for the respondents 6274013
    Canada Limited and Rob Kumer

Sonja Williams, for the respondents Toronto Hydro
    Corporation, Toronto Hydro-Electric System Ltd. and Toronto Hydro Energy
    Services Inc.

S. Pettipiere, for the respondent CB Richard Ellis
    Limited

Christiaan Jordaan, for the respondent William Neilson
    Limited

Heard: June 7, 2012

On appeal from the order of Justice Leonard Ricchetti of
    the Superior Court of Justice dated September 15, 2011, with reasons reported at
    2011 ONSC 5410.

Sharpe
    J.A.:

[1]

The plaintiffs action, commenced in September 2006, had not proceeded
    beyond the close of pleadings five years later in September 2011 and was
    dismissed on a rule 48.14 status hearing.

[2]

The court issued a status notice pursuant to rule 48.14 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194, in October 2008 as the matter
    had not been set down for trial within two years of the filing of a defence.
    After several adjournments, a status hearing was finally held in January 2010 and
    a timetable was agreed-upon requiring discoveries be completed and the action be
    set down for trial by June 2011. The plaintiff failed to take the steps within
    the time limits required by the timetable and, at a status hearing held in
    September 2011, the presiding judge dismissed the action for delay.

[3]

The plaintiff appeals that order. For the following reasons, I would
    dismiss the appeal.

THE PLAINTIFFS CLAIM

[4]

The plaintiff purchased a commercial property from 6274013 Canada
    Limited (627) in June 2005. The plaintiff commenced this action in September
    2006 alleging that 627 breached its contractual obligation to provide a 600
    ampere electrical service and that the defendants 627, its officer Rob Kumer,
    and the agents CB Richard Ellis Ltd., John Lafontaine, Karen Pickernell and
    Carl Lavoie misrepresented that the property had a 600 ampere service. The
    plaintiff also alleged that the defendant William Neilson Ltd. (Neilson), the
    lessee of the property from 1994 to 2005, had breached its lease agreement with
    the prior owner before its lease terminated in September 2005. The plaintiff
    subsequently moved successfully to join the defendants Toronto Hydro-Electric
    System Ltd. and Toronto Hydro Energy Services Inc. (Toronto Hydro), alleging
    that they negligently damaged the electrical service at the property.

RULE 48.14

[5]

Where an action has not been placed on the trial list within two years
    of the defence being filed, the registrar issues a status notice indicating that
    the action will be dismissed for delay unless the matter is set down for trial
    within 90 days of the notice: rule 48.14(1). A party may request a status
    hearing, held before a judge or case management master (rule 48.14(8)), which
    will be held in writing where the party files an agreed timetable for the
    necessary steps to be completed to ensure that the matter is set down for trial
    within 12 months (rule 48.14(10)). If no such timetable is filed a status
    hearing is held pursuant to rule 48.14(12).

[6]

Rule 48.14(13) provides:

48.14(13)  At the status hearing, the
    plaintiff shall show cause why the action should not be dismissed for delay
    and,

(a) if the presiding judge or case management
    master is satisfied that the action should proceed, the judge or case
    management master may,

(i) set time periods for
    the completion of the remaining steps necessary to have the action placed on or
    restored to a trial list and order that it be placed on or restored to a trial
    list within a specified time,

(ii) adjourn the status
    hearing to a specified date on such terms as are just, or

(iii) if the action is
    an action to which Rule 77 may apply under rule 77.02, assign the action for
    case management under that Rule, subject to the direction of the regional
    senior judge,

(iv) make such other
    order as is just; or

(b) if the presiding judge or case management
    master is not satisfied that the action should proceed, the judge or case
    management master may dismiss the action for delay.

THE CHRONOLOGY OF THIS ACTION

[7]

The statement of claim was issued on September 6, 2006. 627 and Neilson delivered
    their statements of defence on October 19, 2006 and November 15, 2006
    respectively. The plaintiff amended its statement of claim on January 25, 2007,
    and 627 and Neilson served amended statements of defence in February and March
    2007. The plaintiff took no steps to move the action beyond the pleading stage.
    A status notice was issued on October 31, 2008, two years after the
    commencement of the action. At the plaintiffs request, a Notice of Status
    Hearing for December 9, 2008 was issued. At that point, the plaintiff had still
    taken no steps to move the action beyond the pleading stage. The December 9,
    2008 status hearing was adjourned on consent at the plaintiffs request to
    allow the plaintiff to move to add the Toronto Hydro defendants. That motion
    was heard and decided in May 2009. Status hearings set for January 27, 2009,
    August 25, 2009 and October 27, 2009 were adjourned and a status hearing was
    finally held on January 19, 2010. By that point, three years and four months
    after commencing the action, the plaintiff still had not moved the action
    beyond the pleading stage.

[8]

At this status hearing, the presiding judge approved an agreed timetable
    requiring the completion of pleadings by February 26, 2010 and delivery of
    affidavits of documents by March 19, 2010. The timetable also required the
    parties to agree to a discovery plan by March 19, 2010, or alternatively to
    bring a motion to fix a plan by April 2, 2010. Examinations for discovery were
    to be completed by September 30, 2010, undertakings given at examination for
    discovery completed by November 30, 2010, related discovery motions completed
    by January 2011 and the action set down for trial by June 30, 2011.  If the
    action was not set down by that date, a further status hearing was to be
    conducted on September 13, 2011.

[9]

The plaintiff delivered an amended statement of claim on January 19,
    2010, adding the Toronto Hydro defendants. The defendants filed amended
    statements of defence and related pleadings in February and March 2010. On March
    16, 2010, plaintiffs counsel, without presenting his own discovery plan, asked
    the defendants for their proposed discovery plans. Counsel for 627 responded
    that it would make more sense for the plaintiff to circulate a proposed
    discovery plan. Plaintiffs counsel did not respond to that suggestion and took
    no further steps in the action for the next year and five months.

[10]

Before
    the September 13, 2011 status hearing, counsel for defendants 627 and Kumer
    indicated that they would ask to have the action dismissed for delay. On
    September 1, 2011, plaintiffs counsel served an affidavit of documents and
    proposed a new timetable and discovery plan. The plaintiff also filed affidavit
    evidence in an attempt to meet the defendants request to have the action dismissed
    for delay.

[11]

At
    the September 13, 2011 status hearing, the defendants asked that the action be
    dismissed. The plaintiff relied on the fact that none of the parties had
    complied with the timetable set at the January 19, 2010 status hearing and that
    the attention of the principal and counsel for the plaintiff, who are brothers,
    had been diverted from the action by financial concerns and personal problems including
    the death of their father and brother and elder care for their mother.

THE REASONS OF THE STATUS
    HEARING JUDGE

[12]

The
    status hearing judge reviewed the chronology of the action and the positions of
    the parties. He identified and applied the legal test requiring the plaintiff
    to satisfy the status hearing judge that there is
both
an explanation
    for the delay that justifies the continuation of the action and that there
    would be no prejudice to the defendant in allowing the action to proceed. The
    status hearing judge found that the plaintiff had failed to satisfy that test.
    He observed that although the plaintiff had failed to move the action beyond
    the pleadings, it had been give a lifeline at the January 19, 2010 status
    hearing but had failed to comply with the timetable it agreed to follow at that
    time. The status hearing judge stated [d]espite being given this opportunity,
    the Plaintiff did nothing to move this action along for a further year and a
    half! Other than serving the Hydro Defendants, the Plaintiff simply ignored
    January 19, 2010 Order.

[13]

The
    status hearing judge noted that the defendants had done nothing to move the
    action along but that they reasonably believed, in light of the history of the
    action and the plaintiff's failure to comply with the January 19, 2010 order,
    that the plaintiff was not pursuing the action. The status hearing judge found
    that while the financial and personal issues faced by counsel and the principal
    of the plaintiff evoked sympathy, those personal factors were not enough to
    justify a five year delay in prosecuting the action. In any event, if those
    problems were the reason for not proceeding, the plaintiff should have asked
    for an adjustment to the timetable set in January 2010. The status hearing
    judge concluded that there had been a lack of any real progress in 5 years
    beyond pleadings and a complete disregard of the timetable imposed on January
    19, 2010.

[14]

The
    status hearing judge observed that there was no alleged or demonstrated actual
    prejudice to the defendants. However, he noted that the limitation period for
    the claims had long expired and that adjudication of the claims, especially those
    against Neilson, would involve documents and events potentially going back more
    than 15 years. He found that although no actual prejudice had been
    demonstrated, he had concerns as to whether a fair trial can be held on the
    issues raised in the action. The status hearing judge concluded that the
    action should be dismissed:

There must be finality to claims. The Plaintiff has been given
    numerous chances to proceed with the action. At some point, the court has to
    say the Plaintiff has had enough opportunities to move this action along. The Defendants
    have had to deal with these claims for over 5 years and shouldn't be forced to
    have this claim remain a contingent claim against them.

ISSUES

[15]

The
    overarching issue in this case is whether the order dismissing the action be
    set aside on the ground that the status hearing judge failed to apply the
    correct legal test or committed palpable and overriding errors by
    misapprehending evidence. The appeal raises several specific issues:

1.  Did the status hearing judge commit palpable
    and overriding errors by misapprehending the evidence in relation to the number
    of previous status hearings and the history of the action?

2.  Did the status hearing judge commit
    palpable and overriding errors by finding, without affidavit evidence, that the
    defendants believed that the plaintiff was not pursuing the action?

3.  Did the status hearing judge err in
    dismissing the action for delay without evidence of actual prejudice?

ANALYSIS

(a)

Standard of Review

[16]

It
    is common ground that a decision to dismiss an action for delay at a status
    hearing is discretionary and entitled to deference on appeal. The decision may,
    however, be set aside if made on an erroneous legal principle or if infected by
    a palpable and overriding error of fact.

(b)

Delay and Fairness in Civil Litigation

[17]

The
    civil justice system aims to resolve disputes fairly, on the merits and in a timely
    and efficient manner. The
Rules of Civil Procedure
provide that the
    rules are to be liberally construed to secure the just, most expeditious and
    least expensive determination of every civil proceeding on its merits: rule
    1.04(1).

[18]

Achieving
    that goal in cases involving dismissal for delay requires a careful balance of
    two fundamental principles. The first is that civil actions should, if
    possible, be decided on their merits and procedural rules should be interpreted
    accordingly. The second is that the procedural rules that aim to resolve
    disputes in a timely and efficient manner can only achieve their goal if they
    are respected and enforced.

[19]

Time
    lines prescribed by the
Rules of Civil Procedure
or imposed by
    judicial orders should be complied with. Failure to enforce rules and orders
    undermines public confidence in the capacity of the justice system to process
    disputes fairly and efficiently. On the other hand, procedural rules are the
    servants of justice not its master. We must allow some latitude for unexpected
    and unusual contingencies that make it difficult or impossible for a party to
    comply. We should strive to avoid a purely formalistic and mechanical
    application of time lines that would penalize parties for technical
    non-compliance and frustrate the fundamental goal of resolving disputes on
    their merits. As Laskin J.A. stated in
Finlay v. Paassen
, 2010 ONCA
    204, 101 O.R. (3d) 390, at para. 14: the Rules and procedural orders are
    construed in a way that advances the interests of justice, and ordinarily
    permits the parties to get to the real merits of their dispute.

[20]

The
    challenge posed in cases involving dismissal for delay is to find the right
    balance between, on the one hand, the need to ensure that the rules are
    enforced to ensure timely and efficient justice and, on the other, the need to
    ensure sufficient flexibility to allow parties able to provide a reasonable explanation
    for failing to comply with the rules to have their disputes decided on the
    merits.

[21]

With
    these general principles as background, I will now consider the specific
    grounds of appeal advanced by the plaintiff.

Issue 1. Number of Status
    Hearings and History of the Action

[22]

The
    plaintiff submits that the status hearing judge committed palpable and
    overriding errors by misapprehending the evidence in relation to the number of
    previous status hearings and the history of the action.

[23]

The
    status hearing judge stated that the matter had been before this court a
    number of times prior to this date  one Status Notice and
5 Status Hearings
 and that he was entertaining the
6
th
Status Hearing
 (emphasis in original).
    In fact, there had only been one prior status hearing and the other four scheduled
    hearings had all been adjourned. The plaintiff argues that it was an error to
    take into account the adjournments of the first status hearing and related
    delay as no timetable had yet been set and that period had been dealt with by
    the judge who conducted the January 2010 status hearing.

[24]

I
    am unable to accept this submission. Although the status hearing judge
    described the hearing he was conducting as the 6
th
Status Hearing,
    it is clear from his review of the chronology of the action that he was under
    no misapprehension as to the number of status hearings that had actually been
    held.

[25]

I
    completely disagree with the contention that the plaintiff was somehow absolved
    for all prior delay by the order made at the January 2010 status hearing. That
    order, made despite over three years of delay, was properly described by the
    September 2011 status hearing judge as a lifeline that allowed the plaintiff
    to proceed on the basis of the timetable ordered. The plaintiff ignored the
    lifeline it had been given and failed to respect the timetable that had been
    set. Without repentance there can be no absolution. The plaintiff did not
    emerge from the January 2010 status hearing with a clean slate and it was open
    to the status hearing judge to consider the entire history of delay.

[26]

It
    is also submitted that the status hearing judge misapprehended the impact of
    the motion to add Toronto Hydro. I disagree. That motion was heard and decided
    in May 2009 and the amended endorsement issued in November 2009 was a minor
    correction that did not affect the substance of the matter. The plaintiffs
    failure to prosecute this action with the required degree of diligence cannot
    be explained by the motion to add Toronto Hydro.

Issue 2.
    Conduct of the Defendants

[27]

The
    plaintiff submits that the status hearing judge erred by finding that the
    defendants believed that the plaintiff was not pursuing the action as there was
    no affidavit evidence to that effect, only the oral submission of counsel at
    the hearing. It certainly would have been preferable to have had affidavit
    evidence on the point. However, in my view, in the circumstances of this case,
    it was open to the status hearing judge to infer from the dilatory action of
    the plaintiff that there was a factual foundation for counsels submission.
    After five years of inaction on the part of the plaintiff, it was virtually
    inevitable that the defendants would assume that the claim was not being
    pursued. At the very least, without some action on the part of the plaintiff,
    the defendants would be disinclined to spend any time or money in preparing
    affidavits of documents or taking any other steps in anticipation of a trial
    that as time went by, became increasingly unlikely to happen.

[28]

The
    focus of the inquiry on a rule 48.14 status hearing is the conduct of the
    plaintiff and, as this court held in
Wellwood v. Ontario Provincial Police
,
    2010 ONCA 386, 102 O.R. (3d) 555, at para. 48, the party who commences the
    proceeding bears primary responsibility for its progress and therefore the
    initiating litigant generally suffers the consequences of a dilatory regard for
    the pace of litigation. See also
Hamilton (City) v. Svedas Koyanagi
    Architects Inc.
, 2010 ONCA 887, 104 O.R. (3d) 689, at paras. 27-28.

[29]

I
    agree that the conduct of a defendant may be relevant, especially where a plaintiff
    who tries to move an action along is faced with some resistance from the
    defendant, or tactics that are not consistent with a willingness to see a
    relatively straightforward case proceed expeditiously: see
Bolohan v. Hull
,
    2012 ONCA 121, [2012] O.J. No. 749, at para. 17.

[30]

In
    this case, however, the defendants did nothing to resist any attempt by the
    plaintiff to advance the action. They cannot be accused of lying in the weeds
    and hoping to gain a tactical advantage. Failing any initiative on the part of
    the plaintiff, to require the defendants to spend time and money to prepare for
    a case that, from all appearances, was dead on the vine would, in my view, be
    to impose an unnecessary and unreasonable burden.

Issue 3. Prejudice

[31]

The
    defendants did not allege that if the action were allowed to proceed, they
    would face actual prejudice of the kind caused by, for example, the death of
    an important witness, the inability to locate a witness, the inability of a
    witness to recall [important] facts or the loss of important evidence,
    including documents: Paul M. Perell & John W. Morden,
The Law of Civil
    Procedure in Ontario
(Markham: LexisNexis, 2010), at p. 423.

[32]

Actual
    prejudice or the lack thereof is an important factor to consider in cases of
    dismissal for delay:
Hamilton
, at para. 33. However, it is certainly
    not the law that an action cannot be dismissed for delay at a rule 48.14 status
    hearing without proof of actual prejudice. The status hearing judge applied the
    test as stated by this court in
Khan v. Sun Life Assurance
, 2011 ONCA
    650, [2011] O.J. No. 4590, at para. 1: the appellant [plaintiff] bore the
    burden of demonstrating that there was an acceptable explanation for the involved
    litigation delay and that, if the action was allowed to proceed, the respondent
    [defendant] would suffer no non-compensable prejudice. The test is conjunctive,
    not disjunctive. Even if the plaintiff can provide a satisfactory explanation
    for the delay, the action will be dismissed if there would be prejudice to the
    defendant.  And if the plaintiff is not able to provide a satisfactory
    explanation for the delay, it is still open to the judge to dismiss the action,
    even if there is no proof of actual prejudice to the defendant.

[33]

As
    I have noted, the goal of the civil justice system is ensure the just, most
    expeditious and least expensive determination of every civil proceeding on its
    merits. Consideration of actual prejudice focuses on the just determination of
    the dispute on its merits. The absence of actual prejudice does not
    automatically or inevitably trump the values of timeliness and efficiency. At
    some point, a party who has failed to respect the rules designed to ensure
    timely and efficient justice loses the right to have its dispute decided on the
    merits. If that were not the case, the rules and the time lines they impose
    would cease to have any meaning and any hope of ensuring timely and efficient
    justice would be seriously jeopardized.

[34]

Modern
    civil procedure recognizes the need to deal with unexplained delay and, through
    rules such as rule 48.14, provides for an active judicial role to promote the
    timely resolution of disputes, to discourage delay in civil litigation and to
    give the courts a significant role in reducing delays: Todd Archibald, Gordon Killeen
    & James C. Morton,
Ontario Superior Court Practice
(Markham:
    LexisNexis Canada, 2011), at p. 1205. As judgments of this court and the
    Superior Court recognize, if an action could not be dismissed for delay unless
    there was proof of actual prejudice, time lines would become meaningless. Where
    a party fails to prosecute an action in a timely fashion, the court is entitled
    to exercise the powers conferred by the rules to dismiss actions absent an
    adequate explanation for the delay:
Riggitano v. Standard Life Assurance
    Co.
, [2009] O.J. No. 1997 (S.C.), at para. 45, affd 2010 ONCA 70, [2010]
    O.J. No. 292.

[35]

It
    is surely not too much to expect a party to either set a matter down for trial
    within two years of the close of pleadings or be able to offer a reasonable
    explanation for why that is not possible to do so. In this case, the plaintiff
    had no explanation for an initial lengthy period of inaction. Despite that
    unexplained delay, the plaintiff was permitted to proceed with the action, but
    again failed to take any meaningful step towards trial for another period of almost
    eighteen months. In these circumstances, the status hearing judge did not err
    by concluding that the time for any further indulgence had passed.

[36]

The
    balance to be struck in the circumstance of a case such as this was very well
    put by Glithero J. in
Riggitano
, at para. 45, a decision affirmed by
    this court:

It is never pleasant to dismiss a plaintiff's action for delay.
    Nevertheless, Rule 48.14 clearly contemplates that two years following the
    filing of a statement of defence is viewed as being ample time to complete
    remaining steps and have a matter set down for trial, absent some satisfactory
    explanation. Where a contest arises, sub-rule (8) squarely puts the onus on [the]
    plaintiff to show cause why the action should not be dismissed for delay. Here
    more than five years, and hence more than twice the normal time period
    contemplated by the rule, has gone by and in my assessment the plaintiff has
    done very little to move the matter along. In my opinion, the materials do not
    disclose any satisfactory explanation for the delay.
If the common
    submission, as made here, to the effect that a dismissal would be unfair to the
    plaintiff is permitted to always trump the provision in the rules contemplating
    a reasonably timely procedure for the disposition of actions, then the rule
    would be effectively gutted.
[Emphasis added]

[37]

I
    also agree with and adopt the statement of D.K. Gray J. in
Broniek-Harren
    v. Osborne
, [2008] O.J. No. 1690 (S.C.), at paras. 28-29:

The policy underlying the
Rules of Civil Procedure
is
    twofold: to ensure that cases that are not settled are tried on their merits;
    and to ensure that cases are processed, and heard, in an orderly way. A
    civilized society must ensure that a credible system of justice is in place,
    and the
Rules of Civil Procedure
, made pursuant to the
Courts of
    Justice Act
, reflect the scheme created by the Province for the orderly
    handling of civil cases.

The
Rules
reflect a balance. The litigant does not
    have an untrammelled right to have his or her case heard. In order to be heard,
    a case must be processed in accordance with the
Rules.
By the same
    token, adherence to the
Rules
must not be slavish in all circumstances.
    They are, after all, designed to ensure that cases are heard. Throughout the
Rules
,
    the principle is reflected that strict compliance may be dispensed with where
    the interests of justice require it: see, for example, Rules 1.04(1), 2.01,
    2.03, 3.02, and 26.01. The difficult issue, in any particular case, is to
    determine when non-compliance reaches the point that it can no longer be
    excused.
The Court, and society as a whole, have an interest in ensuring
    that the system remains viable. If the Rules can be ignored with impunity, they
    might as well not exist
. [Emphasis added.]

[38]

See
    also
Sepehr Industrial Mineral Exports Co. v. Alternative Marketing Bridge
    Enterprises Inc.
(2007), 86 O.R. (3d) 550 (S.C.), at para 21, Quinn J:

Legal proceedings are not to be undertaken lightly. Plaintiffs
    have a responsibility to prosecute their actions diligently and in accordance
    with the Rules of Civil Procedure. Our legal system, sagging, as it is, under
    the weight of a heavy caseload, should not lightly tolerate anything short of
    that diligence.

[39]

These
    cases quite properly reflect and reinforce the strong public interest in
    promoting the timely resolution of disputes. The notion that justice delayed
    is justice denied reaches back to the mists of time.... For centuries, those
    working with our legal system have recognized that unnecessary delay strikes
    against its core values and have done everything within their powers to combat
    it:
Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd.
,
    2007 ONCA 695,
87 O.R. (3d)
    660
, at para. 25, quoting
Blencoe v. British Columbia (Human
    Rights Commission),
2000 SCC 44,
[2000] 2
    S.C.R. 307
, at para. 146. Excusing significant delay risks
    undermining public confidence in the administration of justice:
Marché
,

at

para. 32. The time lines the rules impose are relatively
    generous and there is a heavy price to be paid when they are not respected.

[40]

As
    Professor Stephen G.A. Pitel observed in Revival After Dismissal for Delay:
Marche
    DAlimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd
. (2008) 34
    Adv. Q. 240: our system of civil justice is under almost constant scrutiny.
    One of the most fundamental concerns is that the process is far too complex,
    too expensive and takes too long. In his review of the civil justice system the
    Honourable Coulter Osborne, Q.C. observed that the related issues of cost and
    delay continue to be cited nationally and provincially as formidable barriers
    that prevent average Canadians from accessing the civil justice system: Civil
    Justice Reform Project,
Summary of Findings & Recommendations
(Toronto: Ontario Ministry of the Attorney General, 2007), at p. 1. A system
    that tolerates unexplained delay will not attract public confidence.

[41]

The
    civil justice regime should deliver timely justice to both plaintiffs and defendants.
    Failure to enforce time lines frustrates the legitimate expectations of both
    those who claim and those who defend. Unless the basic ground rules of
    litigation  including time requirements  are enforced in a principled way,
    counsel cannot provide reliable advice and clients cannot plan their affairs in
    an orderly manner.

[42]

If
    flexibility is permitted to descend into toleration of laxness, fairness itself
    will be frustrated. As the status hearing judge recognized, even if there is no
    actual prejudice, allowing stale claims to proceed will often be unfair to the
    litigants. Disputes are more likely to be resolved fairly if they are resolved
    in a timely fashion and accordingly, the enforcement of time lines helps
    achieve the ultimate goal of fair resolution of disputes. Stale claims are more
    difficult to defend.  As this court stated in
Wellwood,
at para. 72:
    as the memories of witnesses fade over time, the passage of an inordinate
    length of time after a cause of action arises or after an applicable limitation
    period expires gives rise to trial fairness concerns. In my view, this is so
    even when timely notice of the claim has been provided.

[43]

The
    allegations made in the statement of claim in this case reach back many years,
    to a period earlier than the date of sale in 2005. In my view, it was open to
    the status hearing judge to find that as time went on, it would be more and
    more difficult to defend a claim that related to events that had transpired at
    least six years ago and that would be even more remote by the time a trial
    could be held. The more time that passes, the more difficult it is to defend
    the case. Memories fade and even if documents are not lost, their significance
    becomes shrouded.

[44]

Another
    harm that flows from delay, properly relied on by the status hearing judge, is
    that it leaves the litigant with the claim hanging over its head in a kind of
    perpetual limbo. Fairness requires allowing parties to plan their lives on the
    assumption that, barring exceptional or unusual circumstances, litigation time lines
    will be enforced. Litigants are entitled to have their disputes resolved
    quickly so that they can get on with their lives and delay multiplies costs
    and breeds frustration and unfairness":
Marché
, at para. 25; see
    also
Hamilton
, at para 21. In my view, it was entirely proper for the
    status hearing judge to weigh in the balance the fact that the defendants would
    inevitably suffer some harm if, after more than five years and no significant
    movement by the plaintiff, they were forced to continue to face this contingent
    claim.

CONCLUSION

[45]

In
    my view, the reasons of the status hearing judge reveal no errors of fact or
    law that would justify this courts intervention. The discretionary decision of
    the status hearing judge attracts deference in this court. As his decision is
    consistent with the applicable legal principles I have identified and reveals
    no reversible errors of fact, I would dismiss the appeal with costs to 627 and
    Neilson fixed at $7,500 each, inclusive of disbursements and taxes.

Released:
RJS Aug. 21, 2012                     Robert
    J. Sharpe J.A.

I
    agree John Laskin J.A.

I
    agree G.J. Epstein J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Abou-Diab v. Legault, 2012
    ONCA 546

DATE: 20120822

DOCKET: C54822

Goudge,
    Feldman and Blair JJ.A.

BETWEEN

Wael Abou-Diab

Appellant

and

Dr. S. Legault

Respondent

Wael Abou-Diab, appearing in person

Anita Szigeti,
amicus curiae

Mark Handelman, for the respondent

Heard and released orally: June 27, 2012

On appeal from the judgment of Justice Duncan A. Grace of
    the Superior Court of Justice, dated November 24, 2011.

ENDORSEMENT

[1]

The appellant with the helpful assistance of
amicus
, challenges
    the Consent and Capacity Boards two decisions, particularly that of August 20,
    2011 and the Superior Courts decision upholding them. He says the Board either
    applied the wrong legal test or was unreasonable in concluding the test was
    met.

[2]

At issue is the second step required for a finding of incapacity as set
    out in
Starson v. Swayze
, [2003] 1 S.C.R. 722: does the person lack
    the ability to appreciate the reasonably foreseeable consequences of his
    decision to refuse the proposed treatment? In our view, both the Board and the
    Superior Court understood and articulated this test correctly.

[3]

The Board found, as we read their decision, particularly that of August
    2011, that the appellants mental condition, mainly his delusion that he has
    something wrong with him physically, renders him unable to appreciate the
    consequences of his decision to refuse psychiatric and nourishment treatment.
    There was ample evidence to support this finding.

[4]

The Boards statement that continued failure to appreciate is explained
    only by inability to do so, should not be read in isolation. While such a
    statement on its own might be questionable, here it was clearly made in the
    context of the appellants delusion, which is the root cause of his inability.

[5]

We do not find it necessary or desirable to admit the fresh evidence, since
    the question before us must focus on the capacity or incapacity of the
    appellant at the time of the Boards hearing, not thereafter. See:
Starson
,
    at para. 119.

[6]

In all the circumstances therefore, the appeal must be dismissed.

[7]

No costs.

S.T. Goudge J.A.

K. Feldman J.A.

R.A. Blair J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Baxter v. Ontario
    (Real Estate and Business Brokers Act Registrar), 2012 ONCA 543

DATE: 20120820

DOCKET: C54783

Simmons, Blair and LaForme JJ.A.

BETWEEN

Timothy Baxter and T. Baxter Real Estate Ltd.

Applicants (Respondents)

and

Registrar,
Real Estate and Business Brokers
    Act, 2002

Respondent (Appellant)

Robert A. Maxwell and George P. Drametu, for the
    appellant

Carolyn R. Brandow, for the respondent

Heard: May 28, 2012

On appeal from the order of the Divisional Court (Justices
    Kent and Aston; Justice Matlow, dissenting), dated July 12, 2011, with reasons
    reported at 2011 ONSC 2497, 282 O.A.C. 201, dismissing an appeal from the order
    of Vice-Chair Elizabeth L. Sproule of the Licence Appeal Tribunal, dated
    January 25, 2010.

Simmons
    J.A.:

(1)

Introduction

[1]

The Registrar under the
Real Estate and Business Brokers Act, 2002
,
    S.O. 2002, c. 30, sch. C, is responsible for determining whether real estate
    brokers and brokerages are entitled to registration, or to a renewal of their
    registration, under the Act. Where the Registrar proposes to revoke a
    registration, he or she is required to give notice to the registrant, and the
    registrant is entitled to a hearing before the Licence Appeal Tribunal. On the
    hearing, the Tribunal proceeds
de novo
and does not defer to the
    Registrars opinion.

[2]

In this case, the Registrar proposed to revoke the registrations of a
    brokerage firm and the broker who was the principal of the brokerage firm under
    ss. 10(1)(a)(ii) and 10(1)(d)(iii) of the Act, because of their involvement in
    several transactions that resulted in mortgage fraud.

[3]

Specifically, the broker and his firm acted for an individual who
    purchased several properties and then relisted them within a short period at
    significantly inflated prices. As a result of these transactions, mortgagees
    advanced funds based on the inflated prices, and eventually suffered losses.

[4]

Following a hearing, the Licence Appeal Tribunal approved the proposal
    by the Registrar to revoke the registration of the brokerage firm, but directed
    the Registrar not to carry out his proposal to revoke the registration of the
    broker who was the principal of the brokerage firm.

[5]

The Registrar appealed the decision of the Tribunal concerning the registration
    of the broker to the Divisional Court. A majority of the Divisional Court
    upheld the Tribunals decision.

[6]

The Registrar raises multiple issues on appeal to this court. The main
    issues are: (i) whether the Divisional Court erred in failing to find that the
    Tribunal erred in its statement and application of the test for revocation
    under s. 10; (ii) whether the Divisional Court erred in failing to find that
    the Tribunal applied an incorrect standard of proof; (iii) whether the
    Divisional Court erred in failing to find that the Tribunal erred in its
    findings of fact.

(2)

Background

(i)

The
    Registrars Proposal and the Brokers Response

[7]

Timothy Baxter is a registered broker under the Act. Prior to the
    Licence Appeal Tribunals decision, he was also the principal of the registered
    brokerage firm, T. Baxter Real Estate Ltd. (Baxter Real Estate).

[8]

In 2008, the Registrar proposed to revoke the registrations of Mr.
    Baxter and Baxter Real Estate under the Act.

[9]

The Registrar alleged that Mr. Baxter and Baxter Real Estate acted on
    the purchase of several properties for business associates, and then knowingly
    assisted in re-listing these properties at greatly inflated prices. At least
    two consumers complained that they were harmed and various mortgage lenders
    reported losses.

[10]

Relying
    on these allegations, the Registrar claimed that Mr. Baxter was no longer
    entitled to registration because, under s. 10(1)(b)(ii) of the Act, [t]he past
    conduct of Baxter afford[ed] reasonable grounds for belief that he [would] not
    carry on business in accordance with law and with integrity and honesty.

[11]

In
    relation to Baxter Real Estate, the Registrar claimed that it was no longer
    entitled to registration because, under s. 10(1)(d)(iii) of the Act the past
    conduct of Baxter, its sole officer and director, afford[ed] reasonable grounds
    for the belief that its business [would] not be carried on in accordance with
    the law and with integrity and honesty.

[12]

In
    response to the Registrar's allegations, Mr. Baxter denied any knowledge of
    any suspicious business activity or conduct that [he or his brokerage] knew or
    ought to have known was improper, unethical, or illegal.

(ii)

The
    Hearing before the Tribunal

[13]

Evidence
    at the hearing revealed that Mr. Baxter and Baxter Real Estate acted on nine or
    ten transactions between April of 2004 and November of 2007, in which a client
    purchased properties and then flipped them at inflated prices within a short
    period of time.

[14]

The
    transactions all followed a similar pattern. Mr. Baxter received instructions
    by e-mail from a Mr. Alton concerning properties that Mr. Alton was interested
    in buying. Usually, Mr. Baxter did not view these properties with Mr. Alton.
    After a property was acquired, Mr. Alton provided instructions by e-mail or telephone,
    first regarding the relisting price, and then regarding the purchaser and the
    sale price. In all cases, the properties were relisted for amounts
    substantially more than the initial purchase price  more than double in a
    number of cases  within a very short period of time. In most instances, but
    not all, the ultimate purchasers were associates of Mr. Alton.

[15]

Baxter
    Real Estate represented all parties in these transactions but no Baxter Real
    Estate representatives met with the parties, provided any market analysis or
    inspected the properties. Mr. Baxter was instructed not to put signs on the
    properties and not to show them to any buyer found by Mr. Alton  which all the
    buyers appear to have been. Mr. Baxter merely prepared the paperwork and
    provided it to Mr. Alton for the parties to sign.

[16]

In
    his defence, Mr. Baxter claimed that Mr. Alton was a sophisticated investor who
    was inflexible in his demands. He also noted that all re-sales were
    conditional on financing and that he expected the appraisers would do their
    job. Finally, he relied on the fact that, in each case, he disclosed in the
    relevant documentation that he had not physically shown the property to the
    buyer.

(iii)

The Tribunals Decision

[17]

The
    Tribunal found that Mr. Baxter had been cooperative with the investigation by
    the Real Estate Council of Ontario and that the facts were not in issue.
    Rather, the real issue was how to characterize Mr. Baxter's conduct. The
    Tribunal summarized its conclusions as follows:

In summary, the Tribunal finds that Mr. Baxter knew that all
    the properties, (reviewed in these proceedings), that he helped Mr. A. sell
    were sold at inflated prices. He knew that sometimes they were being
    transferred to related parties and should have known that the MLS listings and
    agreements of purchase and sale he was producing did not accurately represent
    the value of the properties involved and that they could be used to
    misrepresent the value of the properties to mortgage lenders. The Tribunal also
    finds that in some instances Mr. Baxter did not know whether the purchasers
    were related. Yet he did not alter his conduct and provide them with any
    services notwithstanding Baxter Realty's representations to do so. He had early
    warnings by his own clients conduct and by other parties that should have
    raised his suspicions but he chose to ignore them all.

Having considered all the evidence the Tribunal finds that Mr.
    Baxter's conduct has fallen well short of the standard expected of a broker.
    Even if he is given every benefit of the doubt and his claim of ignorance is
    accepted, his demonstrated level of understanding of an agent's duties and
    responsibilities to the parties of a trade in real estate has caused the
    Tribunal to have serious doubts as to whether Baxter Realty, under Mr. Baxter's
    direction, would carry on business with honesty and integrity in accordance
    with the law.

[18]

Concerning
    Baxter Real Estate, the Tribunal rejected a suggestion that consumers could be
    adequately protected if the operations of the brokerage were supervised by
    another responsible experienced registrant. The Tribunal stated that because
    the brokerage is responsible for the conduct of its brokers and salespersons,
    [t]here must be clarity as to who consumers can hold accountable and there
    must be certainty that the brokerage is being directed by a knowledgeable,
    competent, diligent, honest individual.

[19]

The
    Tribunal concluded that Mr. Baxter's conduct had demonstrated if not a lack of
    honesty and integrity, then such a lack of understanding, or indifference, as
    to how Baxter Realty  should conduct itself, so as to provide reasonable
    grounds for the belief that Baxter Realty [would] not carry on business with
    honesty and integrity and in accordance with the law. Thus, the Tribunal
    determined that Baxter Realtys licence should be revoked.

[20]

Concerning
    Mr. Baxter the Tribunal stated:

As stated above, the Tribunal finds that Mr. Baxter's failure
    to perform the duties expected of a registrant  demonstrates a serious lack of
    understanding of, and in some instances arguably wilful indifference to, the
    duties and obligations of a registrant. In coming to this conclusion the
    tribunal has given Mr. Baxter the benefit of any doubt. Although his conduct
    raises serious concern, in the Tribunals opinion it is not sufficient grounds
    to conclude that Mr. Baxter will not carry on business with honesty and
    integrity and in accordance with the law.

[21]

The
    Tribunal noted that Mr. Baxter had operated in the industry without incident
    for many years. However it said that given his conduct in the recent events
    it [was] clear that he require[d] further education and guidance regarding the
    roles and responsibilities of a registrant and the changing issues facing the
    real estate industry. In the words of the Tribunal, [r]egistration as a
    broker subject to [various conditions], including supervision and educational
    requirements would therefore be appropriate.

(iv)

The Reasons of the Majority of the
    Divisional Court

[22]

The
    majority of the Divisional Court began by noting that there were conflicting
    decisions of the court concerning whether the Tribunal has jurisdiction to
    impose conditions on a persons licence where it finds that person to  be
    entitled to registration under s. 10(1) of the Act. The majority indicated
    that the issue was canvassed with counsel and that the court proceeded on the
    understanding that they would not need to address the conflicting authorities,
    because neither Mr. Baxter nor Baxter Real Estate were challenging the
    Tribunal's authority to attach conditions to Mr. Baxter's registration.

[23]

The
    majority set out the standard of review as correctness on questions of general
    law that are not aspects of the core function of the Tribunal, and
    reasonableness on questions of mixed fact and law, discretion, policy and the
    interpretation of sections 10, 13, and 14 of the
Real Estate and Business
    Brokers Act
.

[24]

The
    majority rejected the Registrar's argument that, by using the words every
    benefit of the doubt and benefit of any doubt in its reasons, the Tribunal
    held the Registrar to a higher, quasi-criminal standard of proof rather than
    the correct, balance of probabilities, civil standard. In the majoritys
    view, when considered in context, the impugned language was used only in
    reference to a credibility consideration rather than a standard of proof
    consideration.

[25]

Concerning
    the Registrar's contention that, given the Tribunal's findings and observations
    concerning Mr. Baxter's credibility and knowledge, it was unreasonable for the
    Tribunal to fail to find that Mr. Baxter
knowingly
participated in a
    mortgage fraud scheme, the majority first observed that wilful blindness and
    recklessness can constitute imputed knowledge. The majority went on to opine
    that it was unnecessary for the Tribunal to label or categorize [Mr.] Baxters
    state of mind. In the majoritys view [t]he germane issue was how to assess
    and weigh his culpability or misconduct in drawing any conclusions about how he
    would conduct himself in the future.

[26]

The
    majority noted multiple findings by the Tribunal concerning Mr. Baxter's state
    of mind. For example, the Tribunals statements: (i) it is difficult to
    understand how an experienced real estate agent would not be suspicious; (ii)
    [c]learly Mr. Baxter would have known that the listing prices were a gross
    exaggeration; (iii) [h]e had early warnings  that should have raised his
    suspicions but he chose to ignore them all; and, other similar statements.

[27]

The
    majority concluded that the Tribunal went as far as it needed to go in its
    conclusions on Mr. Baxters state of mind. The Registrar's argument was
    effectively a request for the Divisional Court to substitute its own view of
    the evidence for that of the Tribunal.

[28]

The
    majority also rejected the Registrar's arguments that it was improper for the
    Tribunal to have regard to mitigating circumstances in its s. 10 analysis and
    that the Tribunal's reasons were inadequate for meaningful appellate review.

[29]

Finally,
    the majority concluded that the Tribunal understood the test under s. 10 of the
    Act and properly applied that test in its reasons.

(3)

Subsections
    10(1)(a)(ii) and 10(1)(d)(iii) of the Act

[30]

Subsections
    10(1)(a)(ii) and 10(1)(d)(iii) of the Act read as follows:

10 (1) An applicant that meets the
    prescribed requirements is entitled to registration or renewal of registration
    by the registrar unless,

(a) the
    applicant is not a corporation and,

(ii) the
    past conduct of the applicant or of an interested person in respect of the
    applicant affords reasonable grounds for belief that the applicant will not
    carry on business in accordance with law and with integrity and honesty

(d) the applicant
    is a corporation and,

(iii) the
    past conduct of its officers or directors or of an interested person in respect
    of its officers or directors or of an interested person in respect of the
    corporation affords reasonable grounds for belief that its business will not be
    carried on in accordance with the law and with integrity and honesty.

(4)

Discussion

[31]

The
    parties do not take issue with the Divisional Courts statement of the standard
    of review applicable in this case.

(i)

Did the Divisional Court err in failing to find that the Tribunal erred
    in its statement and application of the test for entitlement to registration
    under s. 10 of the Act?

[32]

The
    Registrar raises several arguments under this heading. First, the Registrar
    submits that the Tribunal erred in its statement of the test for entitlement to
    registration under s. 10 of the Act.

[33]

I
    recognize that in, at least three places in its reasons, the Tribunal misstated
    the test under s. 10 as being whether Mr. Baxters conduct affords reasonable
    grounds to conclude that he and/or Baxter Real Estate would not carry out on
    business in accordance with law and with integrity and honesty. The proper test
    is whether the conduct affords reasonable grounds to believe that they would
    not do so. However, the Tribunal stated the test under s. 10 correctly when
    setting out the issue in the case and in several other places during the course
    of its reasons.

[34]

As
    the Registrar points out in his factum, because the test under s. 10 involves
    predicting future conduct based on past conduct, it is impossible on a
    practical level to arrive at conclusions about future conduct. Instead, one
    can only form beliefs.

[35]

Reading
    the Tribunals reasons fairly and as a whole, in my view, it is apparent that
    the Tribunal was using the word conclude in a vernacular sense and treating
    it as a synonym for believe. Therefore, I am not persuaded that the
    Tribunals misstatement of the test constitutes reversible error.

[36]

The
    Registrar also argues that, after finding Baxter Real Estate was not entitled
    to registration, it was an error for the Tribunal to determine that Mr. Baxter
    was entitled to registration based on identical facts and the same legal test.

[37]

I
    do not accept this submission because, in my view, the issues presented by the
    legal test are different when applied to a broker and a brokerage.

[38]

Mr.
    Baxter is a broker; Baxter Real Estate is a brokerage. As pointed out by the
    Registrar, a brokerage has additional responsibilities under the Act, such as
    for accounting and supervision of salespersons, beyond those possessed by a
    broker.

[39]

When
    applied to Mr. Baxter, the legal test under s. 10(1)(a)(ii) of the Act is
    whether
his
past conduct affords reasonable grounds to believe that
he
will not carry on business as a broker appropriately. When applied to Baxter
    Real Estate, the legal test under s. 10(1)(d)(iii) of the Act is whether the
    past conduct of
its officers and directors
affords reasonable grounds
    for belief that
its business
as a brokerage will not be carried on
    appropriately. Because a brokerage has greater responsibilities than a broker
    under the Act, the term business as it appears in s. 10 has a broader scope in
    relation to a brokerage than it does in relation to a broker.

[40]

The
    Tribunal demonstrated that it was alive to this distinction when it said the
    following:

The brokerage is the agent and a separate legal entity,
    responsible for the conduct of its brokers and salespersons, supervision does
    not change this. There must be clarity as to who consumers can hold accountable
    and there must be certainty that the brokerage is being directed by a
    knowledgeable, competent, diligent, honest individual. The Tribunal concludes
    that Mr. Baxter's conduct has demonstrated, if not a lack of honesty and
    integrity, then such a lack of understanding, or indifference, as to how Baxter
    Realty, as an agent should conduct itself, so as to provide reasonable grounds
    for the belief that Baxter Realty will not carry on business with honesty and
    integrity and in accordance with the law.

[41]

In
    my view, because a brokerage has greater responsibilities, it was open to the
    Tribunal to find that Mr. Baxters past conduct supported a finding that Baxter
    Realty was not entitled to registration under s. 10, even though it did not
    reach the same conclusion with regard to Mr. Baxter, himself.

[42]

The
    Registrar also argues that the Tribunal erred in law by making its
    determination of Mr. Baxters continuing entitlement to registration contingent
    on conditions without making a threshold determination that Mr. Baxter was not
    entitled to registration under s. 10(1)(a)(ii) of the Act.

[43]

I
    do not accept this argument. In its reasons, the Tribunal stated:

Although his conduct raises serious concern, in the Tribunals
    opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry
    on business with honesty and integrity and in accordance with the law.

[44]

Although
    the Tribunal imposed conditions on Mr. Baxters registration, it did not indicate
    that its finding that Mr. Baxters past conduct had not met the threshold under
    s. 10(1)(a)(ii) for deregistration was contingent on those conditions.

[45]

As
    the majority of the Divisional Court noted, Mr. Baxter did not cross-appeal to
    the Divisional Court. It was, thus, unnecessary for the Divisional Court
    determine whether the Tribunal had jurisdiction to impose conditions in the
    absence of a threshold determination under s. 10(1)(a)(ii) that Mr. Baxter was
    not entitled to registration. Similarly, it is unnecessary that we make such a
    determination.

[46]

Therefore,
    the Registrars request that this court resolve, what the Registrar submits are,
    conflicting authorities from the Divisional Court on this point must await
    another case.

(ii)

Did the
    Divisional Court err in failing to find that the Tribunal erred in its
    application of the standard of proof?

[47]

The
    Registrar argues that two passages in the Tribunals reasons demonstrate that
    the Tribunal held the Registrar to a higher, quasi-criminal, standard of proof
    than the applicable standard of proof namely, on a balance of probabilities.
    The two impugned passages read as follows:

Having considered all the evidence the Tribunal finds that Mr.
    Baxter's conduct has fallen well short of the standard expected of a broker.
Even
    if he is given every benefit of the doubt and his claim of ignorance is
    accepted
, his demonstrated level of understanding of an agent's duties and
    responsibilities to the parties of a trade in real estate has caused the
    Tribunal to have serious doubt as to whether Baxter Realty, under Mr. Baxter's
    direction, would carry on business with honesty and integrity in accordance
    with the law.

As stated above, the Tribunal finds that Mr. Baxter's failure
    to perform the duties expected of a registrar, in the series of transactions
    focused on, demonstrates a serious lack of understanding of, and in some
    instances arguably wilful indifference to, the duties and obligations of a
    registrant.
In coming to this conclusion the Tribunal has given Mr. Baxter
    the benefit of any doubt
. Although his conduct raises serious concern, in
    the Tribunal's opinion it is not sufficient grounds to conclude that Mr. Baxter
    will not carry on business with honesty and integrity and in accordance with
    the law. [Emphasis added.]

[48]

I
    agree with the majority of the Divisional Court that the impugned passages do
    not reflect the Tribunal's application of the standard of proof.

[49]

In
    the first passage, the Tribunal was saying that even if it had accepted Mr.
    Baxters claim of complete ignorance, it would still find that Baxter Realty's
    registration should be revoked. In other words, even if the Tribunal had not
    found Mr. Baxter both wilfully blind and reckless, the Tribunal would still
    have approved the Registrars proposal to revoke Baxter Realtys registration.

[50]

It
    is true that the second passage could have been articulated much more clearly.
    Considered in the context of the Registrars claim that Mr. Baxter was a
    knowing participant in a fraudulent scheme, arguably this passage suggests that
    the Tribunal required the Registrar to prove the relevant claims on, at least,
    a quasi-criminal standard. However, I do not accept that such an interpretation
    of this passage is the correct one.

[51]

Read
    fairly, in my view, the Tribunal was simply saying that, in coming to its
    conclusion that Mr. Baxter had demonstrated a serious lack of understanding of
    his duties and wilful blindness, the Tribunal had given Mr. Baxter every benefit
    of the doubt. Accordingly, I do not read this passage as saying that the
    Tribunal held the Registrar to a quasi-criminal standard of proof in
    establishing the allegations against Mr. Baxter.

(iii)

Did the Divisional Court err
    in failing to find that the Tribunal erred in its findings of fact?

[52]

The
    Registrar advances three interrelated arguments concerning the Tribunal's
    findings of fact. First, the Registrar says the Tribunal erred by making what
    appear to be equivocal findings of fact. Second, the Registrar argues that the
    Tribunal erred by failing to make clear findings about Mr. Baxter's state of
    knowledge in relation to the mortgage fraud. Third, the Registrar argues that the
    Tribunals reasons are inadequate for meaningful appellate review.

[53]

I
    do not agree with the Registrars arguments. In my view, the Tribunals reasons
    are not equivocal and do, in fact, make a finding as to Mr. Baxters state of knowledge
    regarding the fraud. The reasons indicate that the Tribunal was satisfied that
    Mr. Baxter was wilfully blind and reckless  and therefore had imputed
    knowledge of the mortgage fraud; however, the Tribunal was not satisfied that Mr.
    Baxter actually turned his mind to the fraud. Further, the reasons indicate that
    the Tribunal was satisfied that the primary cause of the appellants misconduct
    was his failure to appreciate the full scope of his duties, rather than
    dishonesty
per se
. Finally, while I agree that portions of the Tribunals
    reasons could have been clearer, when read as a whole and in context, I am
    satisfied that the Tribunals reasons are adequate for the purposes of
    appellate review.

(a)

The Tribunals
    findings are not equivocal

[54]

I
    disagree with the Registrar that the Tribunals reasons are internally
    contradictory.

[55]

Many
    passages in the Tribunal's reasons make it clear that the Tribunal was
    satisfied that Mr. Baxter was both wilfully blind and reckless. The following
    portion of the Tribunals summary is sufficient to illustrate the point:

In summary, the Tribunal finds that Mr. Baxter
knew
that
all the properties
, (reviewed in these proceedings), that he
    helped Mr. A sell
were sold at inflated prices
. He
knew
that
    sometimes
they were being transferred to related parties
and
should
    have known
that
the MLS listings and agreements of purchase and sale
he was producing
did not accurately represent the value
of the
    properties involved
and that they could be used to misrepresent the value
    the properties to mortgage lenders
. The Tribunal also finds that in some
    instances Mr. Baxter did not know whether the purchasers were related. Yet he
    did not alter his conduct and provide them with any services notwithstanding
    Baxter Realty's representations [
sic
] to do so.
He had early warnings
    by his own clients conduct and by other parties that should have raised his
    suspicions but he chose to ignore them all.
[Emphasis added.]

[56]

A
    significant part of the problem which the Registrar points to in its argument arises
    from the sections in which the Tribunal set out its dispositions in relation to
    Baxter Real Estate, and Mr. Baxter, respectively. I have already quoted from
    these sections, in part, above. Read superficially, the portions of these
    passages emphasized below potentially contradict the Tribunal's earlier
    findings of wilful blindness and recklessness:

Having considered all the evidence the Tribunal finds that Mr.
    Baxter's conduct has fallen well short of the standard expected of a broker.
Even
    if he is given every benefit of the doubt and his claim of ignorance is
    accepted, his demonstrated level of understanding of an agent's duties and
    responsibilities
to the parties of a trade in real estate
has caused
    the Tribunal to have serious doubt
as to whether Baxter Realty, under Mr.
    Baxter's direction, would carry on business with honesty and integrity in
    accordance with the law.

The Tribunal concludes that Mr. Baxter's conduct has
    demonstrated,
if not a lack of honesty and integrity, then such a lack of
    understanding, or indifference, as to how Baxter Realty, as an agent should
    conduct itself
, so as to provide reasonable grounds for the belief that
    Baxter Realty will not carry on business with honesty and integrity and in
    accordance with the law.

As stated above, the Tribunal finds that
Mr. Baxter's
    failure to perform the duties
expected of a registrant, in the series of
    transactions focused on,
demonstrates a serious lack of understanding of,
    and in some instances arguably wilful indifference
to, the duties and
    obligations of a registrant. In coming to this conclusion the Tribunal has
    given Mr. Baxter the benefit of any doubt. Although his conduct raises serious
    concern, in the Tribunal's opinion it is not sufficient grounds to conclude
    that Mr. Baxter will not carry on business with honesty and integrity and in
    accordance with the law.

[57]

However, in
    my view, interpreting these passages as contradictory to the Tribunals
    findings of wilful blindness and recklessness is not a fair reading of these
    sections in the context of the reasons as a whole. As I have said already, in
    my opinion, the first quoted paragraph simply reflects a determination by the
    Tribunal that, even if Mr. Baxter's claim of complete ignorance was accepted,
    Baxter Real Estate's registration should be revoked. As for the second and
    third paragraphs, I read them as poorly worded findings that  although Mr.
    Baxter had failed in his duties and, in doing so, had been wilfully blind  a
    primary cause of Mr. Baxters professional failings was his serious lack of
    understanding of his duties.

(b)

The Tribunals
    reasons do include a finding as to Mr. Baxters knowledge or lack of knowledge
    of fraud

[58]

The
    Registrar also argues that the Tribunal erred in failing to find, or to explain
    why it did not find, that Mr. Baxter was a knowing participant in the fraud,
    and, in any event, in failing to conclude that Mr. Baxters past conduct
    afforded reasonable grounds to believe that he would not carry on business in
    accordance with law and with integrity and honesty.

[59]

I
    do not accept these arguments. In my view, it is clear that, although the
    Tribunal found that Mr. Baxter was both wilfully blind and reckless, the
    Tribunal was not satisfied that he actually turned his mind to the presence of
    fraud. I have already reviewed the portions of the Tribunals reasons that
    demonstrate its findings of wilful blindness and recklessness.

[60]

In
    my view, it is implicit in its reasons that the Tribunal was not satisfied that
    Mr. Baxter recognized the presence of fraud given that: (i) the Tribunal did
    not make a finding that Mr. Baxter actually recognized the presence of fraud;
    and, (ii) its finding that a primary cause of Mr. Baxters misconduct was his
    serious lack of understanding of his duties.

[61]

As
    I read the Tribunals reasons, its explanation for concluding that Mr. Baxter
    did not recognize the presence of fraud was grounded in, among other things, the
    facts that Mr. Baxter was completely co-operative with the investigation, that
    he made no effort to mislead the investigators, and that he had 31 years of
    involvement in the industry with no complaints of prior fraudulent conduct. The
    Tribunal relied on the same factors in concluding there were not sufficient
    grounds to find that Mr. Baxter would not carry on business in accordance with
    law and with integrity and honesty. The Tribunal made the following
    observations, juxtaposing the facts of this case to those in
Khetani (Re)
,
    [2006] O.L.A.T.D. No. 473, where the registrants licence was, in fact, revoked:

It has been emphasized and the Tribunal accepts, that Mr. Baxter
    has been completely co-operative with RECO in its investigations. He made full
    disclosure and there was no attempt to falsify documents or mislead RECO in any
    way. Also, that there have been no prior complaints against Mr. Baxter and he
    has never been convicted of a crime. As stated he has been in the industry 31
    years.

...

In [
Khetani (Re)
], the Tribunal found that the
    registrant knew she was involving herself in a series of questionable
    transactions, even if she might not have understood the full extent of the
    fraud, and by not performing the essential services that a realtor provides she
    prlayer a role in the fraudulent transactions. Where the facts differ from the
    present case is that the registrant Khetani bore false witness to signatures
    and her testimony was not found to be credible. The Tribunal found this to be
    evidence of her honesty and integrity. Notwithstanding that Mr. Baxter has
    significantly failed to properly carry out his duties as a registrant over a
    series of transactions, there is no evidence, as in the
Khetani
case,
    of falsified documents or false testimony.

...

Although his conduct raises serious concern, in the Tribunals
    opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry
    on business with honesty and integrity and in accordance with the law. Mr.
    Baxter has operated in the industry without incident for many years. However,
    given his conduct in the recent events it is clear that he requires further
    education and guidance regarding the roles and responsibilities of a registrant
    and the changing issues facing the real estate industry.

[62]

While the factors
    on which the Tribunal relied may not have persuaded other triers of fact, in my
    view, it was open to the Tribunal to rely on these facts in both declining to find
    that Mr. Baxter was a knowing participant in the fraud, and concluding that a
    primary cause of Mr. Baxters misconduct was his serious lack of
    understanding of his duties.

[63]

The
    assessment under s. 10(1)(a)(ii) involves making a prediction about future
    behaviour based on past conduct. It required the Tribunal to consider, not only
    Mr. Baxters revocation-related past misconduct, but also his past conduct, in
    general. In my view, particularly in the light of the Tribunals finding that a
    primary cause of Mr. Baxters misconduct was his lack of understanding of his
    duties, it was open to the Tribunal  even in the face of findings of wilful
    blindness and recklessness to find that Mr. Baxters past conduct did not
    afford reasonable grounds to believe he would not carry on the business of a
    broker in accordance with law and with integrity and honesty in the future.

[64]

I
    also note that the assessment under s. 10 is within the scope of the Tribunals
    core competency.
Like the majority of the Divisional
    Court, the Registrars argument on this point ultimately strikes me as a
    request to substitute our view of the evidence for that of the Tribunal. That
    is not this courts role on appellate review.

(c)

The
    Tribunals reasons are not insufficient

[65]

Finally,
    despite the Registrars arguments on sufficiency, I am satisfied that, on the
    whole, the Tribunals reasons are sufficient.

[66]

As noted
    above, I agree that some sections of the Tribunals reasons could have been
    clearer. However, when read as a whole and in context, I am satisfied that the
    Tribunals reasons are adequate for the purposes of appellate review.

(5)

Disposition

[67]

Based
    on the foregoing reasons, the appeal is dismissed.

[68]

If
    so advised, the parties may make brief written submissions concerning costs. The respondent may make submissions within 14 days
    and the appellant within 21 days, following the release of these reasons.

Janet
    Simmons J.A.

I agree
    R.A. Blair J.A.

I agree
    H.S. LaForme J.A.

Released: R.A.B. August 20, 2012