COURT OF APPEAL FOR ONTARIO

CITATION: Whitfield v. Whitfield, 2016 ONCA 581

DATE: 20160720

DOCKET: C58883

Weiler, van Rensburg and Roberts JJ.A.

BETWEEN

Dr. Agnes Jane Whitfield

Plaintiff/Defendant by Counterclaim
(Respondent)

and

Bryan Whitfield

Defendant/Plaintiff by Counterclaim
(Appellant)

Marie Henein, Matthew R. Gourlay and Christine Mainville,
    for the appellant

Dr. Agnes Whitfield, acting in person

Heard: January 6, 2016

On appeal from the judgment of Justice J.R. McIsaac of
    the Superior Court of Justice, dated May 1, 2014, with reasons reported at 2014
    ONSC 2745, and the order for costs, dated May 28, 2015, with reasons reported
    at 2015 ONSC 3422.

Roberts J.A.:

Overview

[1]

At the heart of this appeal are the permissible uses that can be made of
    an experts opinion concerning the credibility and reliability of a witness and
    the application of the defence of qualified privilege in the circumstances of
    this case.

[2]

The appellant and the respondent are brother and sister. The respondent
    is now 65 years old. The appellant is in his seventies. The appellant appeals
    from the May 1, 2014 judgment that found him civilly liable to his sister for historic
    sexual and physical assaults that the respondent says started about 60 years ago
    and were repeated until over 40 years ago. The appellant also appeals the
    dismissal of his counterclaim against his sister for defamation. The
    appellants counterclaim is founded on the publication and content of a series
    of the respondents emails, letters and postcard communications sent to family
    members, lawyers, and a friend, which contained allegations of sexual and
    physical abuse, and formed the basis for her successful claim.

[3]

The respondent testified that about 15 years ago when she turned 50
    years of age, she recovered memories of horrific and repeated sexual and
    physical abuse at the hands of her brother that the respondent says occurred
    when she was 4 or 5 and continued until she was 20 years old.

[4]

The main support for the respondents evidence came from her expert
    witness, Dr. Sarah Maddocks. Dr. Maddocks is a psychologist who was retained by
    the respondents prior lawyer to provide an opinion concerning an assessment of
    the respondents alleged recovered traumatic memory, her mental status,
    diagnoses and prognosis, along with the impact of the alleged sexual assaults
    on the respondent, and her recommended treatment plan. She was qualified at
    trial to give expert evidence generally in the area of psychology, and in
    particular in relation to sexual victimization. She opined that, while she
    could not know for sure if all of the memories were depictions of actual
    events, there was a strong indication that the respondent had been sexually and
    physically abused by the appellant on a regular basis over a long period of
    time.

[5]

The appellant denied that he had ever sexually or physically abused his
    sister. His denials of mistreatment were supported by his two older sisters and
    a woman who had worked for their family as a mothers helper.

[6]

The trial turned on the credibility and reliability of the respective
    accounts of the appellant and the respondent. The trial judge found that the
    appellant and the respondent were equally credible as witnesses and that their
    respective versions of events were also equally compelling.

[7]

As a result of this assessment, the trial judge determined that he
    needed to turn to the expert evidence of Dr. Maddocks to resolve the
    litigation with respect to the conflict between the different accounts given
    by the appellant and the respondent.

[8]

The trial judge erred by relying on Dr. Maddocks evidence for the
    impermissible use of corroborating the truth of the respondents allegations of
    sexual and physical assault for the purpose of finding the appellant liable. In
    doing this, the trial judge abdicated to the expert his role of trier of fact.

[9]

With respect to the counterclaim, the trial judge erred in determining
    that even if the respondents allegations were not accepted as true, the
    defence of qualified privilege would apply to all of her communications to
    third parties alleging sexual and physical abuse by the appellant. This
    conclusion was marred by the trial judges erroneous assessment that the
    allegations were in fact true.  Further, he erred in law in finding that all of
    the recipients of the communications, including the respondents former high
    school friend, had a duty or interest to receive the respondents
    communications.

[10]

As a result of the trial judges errors, the judgment, including the
    dismissal of the counterclaim, must be set aside.

[11]

For the reasons that follow, I would allow both the appeal and the
    appellants counterclaim. As I will also explain, I would hold that a new trial
    is unnecessary and dismiss the respondents action, allow the appellants
    counterclaim, and order costs in favour of the appellant.

Issues

[12]

The appellant raises the following grounds of appeal with respect to the
    respondents action:

i.

The trial judge erred in law in his reliance on and use of Dr. Maddocks
    opinion evidence.

ii.

The trial judge misapprehended the recovered memory theory in finding
    that repression by adults is a recognized phenomenon when there was no
    evidence to support this conclusion.

iii.

The trial judges handling of the respondents refusal to participate in
    a defence psychological assessment rendered the trial unfair.

iv.

The trial judge erred in law in his approach to corroboration of the
    respondents alleged recovered memories.

v.

The trial judge erred in the manner in which he handled the respondents
    alleged consistency in her allegations.

vi.

The trial judges approach to the evidence was marred by palpable and
    overriding errors, including his flawed analysis of the credibility and
    reliability of the respondents allegations.

vii.

The reasons for judgment are legally insufficient.

[13]

With respect to the counterclaim, the appellant submits that the trial
    judge erred in holding that, had the respondents action not been successful,
    the defence of qualified privilege would have applied to bar the defamation
    counterclaim.

Background Facts

[14]

The facts relevant to the disposition of this appeal are as follows.

[15]

The appellant and respondent were raised with their two older sisters
    and lived for many years with their parents on the family farm. The respondent
    is the youngest of the four siblings and seven years younger than the
    appellant. Their sisters are in their mid-seventies. All of the siblings are
    accomplished in their professional lives: the two eldest sisters are,
    respectively, a pediatrician and a psychiatrist; the appellant is a retired College
    teacher; and the respondent is a university professor.

[16]

Both parents have passed away. It was not until after the death of their
    mother in 1997 and the increasingly fractious administration of her estate that
    the respondent made any allegations of improper conduct against the appellant. As
    is evident from their affectionate exchange of correspondence up until that
    time, the respondent and the appellant had appeared to enjoy a very close
    relationship. Indeed, the appellant referred to the respondent as his favourite
    sister. According to their correspondence, the appellant and his family
    provided support to the respondent during her acrimonious divorce from her
    first husband and her estrangement from her daughters following the divorce.

[17]

The respondent first disclosed her allegations against the appellant
    immediately following the conclusion of her mothers estate administration.

[18]

The administration of the mothers estate was delayed for several years when
    the respondent refused to agree to sell the family cottage. The respondent wanted
    to purchase the cottage from her siblings at just over a third of its appraised
    value. Her siblings declined to sell at that price. They instead obtained three
    appraisals and offered to sell at a price based on market value. They stated
    that, if the respondent did not want to purchase the cottage on those terms and
    did not agree to place it for sale on the market, they would institute legal
    proceedings. The respondent subsequently signed off on the sale of the family
    cottage.

[19]

On July 26, 2001, following her execution of documentation to complete
    the sale of the cottage property, the respondent sent an email to the
    appellant, his wife and his daughters; her sisters and their families; her
    daughters; and a woman with whom she had been friends in high school. In this
    email, the respondent accused the appellant of physical cruelty while they were
    growing up, including twisting her arms and wrists, and trying to murder her
    by locking her up in the cold room in the dairy. She ended the transmission by
    directing him to have no further contact with her daughters and to remove
    himself as trustee of the grandchildrens trust.

[20]

The respondents family members did not support her allegations. The respondent
    sent requests to her sisters for confirmation of her allegations. They did not
    respond. However, the email sent to the appellant on July 30, 2001 by one of the
    respondents daughters reflected the familys denial of the respondents
    allegations:

I am very sorry about the letter mom sent to you and rest
    assured I do not take it seriously. Mom is not well, and unfortunately this is
    not the first of this kind of accusation that she has made  accusing has
    become a
modus vivendi
for her  although this has been among the most
    cruel. I hope this will give you some perspective. Also rest assured that I do
    not support her desire to remove you from the trust.

Please do not take this letter to heart[.]

[21]

The respondent persisted in her allegations against the appellant and over
    the next several months sent a series of emails to her siblings and their
    spouses, her daughters and her nieces and nephews. She sent some of the communications
    to the same former friend, and others to two lawyers (one was her own lawyer and
    the other was involved in the administration of her mothers estate). In these
    emails, details of the respondents allegations of sexual abuse by the
    appellant began to appear.

Evidence at trial

[22]

On December 17, 2002, the respondent commenced an action against the
    appellant, based on her allegations of sexual and physical abuse.

[23]

At the trial, which commenced almost 10 years later in November 2012,
    the respondent testified that in July 2001, she started having flashbacks of
    various incidents of sexual and physical abuse by the appellant. These
    flashbacks continued for several years and were recorded in diaries that the
    respondent produced to Dr. Maddocks and at trial. The respondent claimed that,
    excepting what the trial judge called one vague and ambiguous incident of the
    appellants lying down on top of her for 10 minutes in 1969 when their parents
    were away, her memories of all of the sexual and physical abuse were repressed
    for 30 years.

[24]

According to her flashbacks, starting when she was 4 or 5 years old, which
    would have been around 1955 or 1956, her then 11 or 12-year-old brother would
    regularly come into her bedroom in the morning before he left for hockey
    practice. He would sodomize her or force her to fellate him. These acts of
    abuse also took place in various other locations in or around the family farm
    and at two other properties near the farm.

[25]

According to the respondent, the appellant compelled her compliance by various
    acts of violence, including threatening to kill and actually killing one or two
    of the respondents pet rabbits by throwing them against the barn wall, putting
    a rope around her neck in the barn, forcing her head into the toilet and
    restraining her by the neck, and forcing her hand towards a hot pasteurizer. The
    respondent testified that the appellant threatened to shoot her with his BB gun
    and later his .22 rifle, and that the appellant shot in close proximity to her.
    She stated that their second eldest sister was complicit in the appellants use
    of the gun to threaten her.

[26]

The respondent testified that this abuse continued without abatement
    until the appellant left for a make-up high school year in 1962-63, when the
    respondent would have been 11 or 12 years old, and then when he attended
    university; however, the appellant would resume the abuse when he returned home
    for holidays or co-op placements.

[27]

The respondent recounted that on another occasion, during a visit to a
    cottage that the appellant had built on Eels Lake, the appellant and one of
    his friends forced her to fellate them and to eat her own feces. On that same
    occasion, the appellant threatened her with his gun and tied her up and left
    her at a mine entrance near the cottage.

[28]

The respondent further recalled that, when she was 16 years old and after
    the appellant had finished university and was teaching in Ottawa, their mother forced
    her to visit him. They shared his bedroom where the appellant forced her to
    fellate him.

[29]

The respondent testified that in the summer of 1971, when she was 20
    years old and after she had completed her third year of university in Europe,
    she accompanied the appellant on a trip to British Columbia at the behest of
    their mother. She said that she was forced to fellate the appellant on the
    train ride to obtain money because she had no other funds. She claimed that she
    was repeatedly raped in the course of this trip by the appellant and others: the
    appellant prostituted her to a number of the males in attendance at a party on
    Vancouver Island to whom the appellant had sold drugs; the appellant
    prostituted her to a gang of construction workers while he went on a long hike;
    and, while hitchhiking with the appellant, she was raped by him and the driver
    of the car that picked them up. On cross-examination, the respondent recanted
    her complaint about the gang rape on Vancouver Island and conceded that she
    only had an impression that those rapes had taken place.

[30]

Among others, the respondent called the following three witnesses: her
    physiotherapist, Nathalie Provençal; Dr. Maddocks; and the woman who had worked
    as a mothers helper for her family. None of these individuals had witnessed the
    abuse about which she testified. Rather, Ms. Provençal and Dr. Maddocks had observed
    dissociative episodes in which the respondent would assume the voices and
    characters of a little girl and boy and re-enact instances of abusive behaviour
    by the boy towards the girl. The former mothers helper testified that she
    witnessed nothing during her employment but also that she was absent during
    certain periods of time when the respondent was a child.

[31]

Ms. Provençal testified that during her treatment of the respondent,
    which began in October 2005, she witnessed four episodes of the respondents
    lapsing into some form of altered state where she took on the characters and
    voices of a little girl and a boy. During these episodes, in the voice of a
    little girl, the respondent would complain about a boy hurting and threatening
    her.

[32]

Dr. Maddocks testified that towards the end of an interview with the
    respondent in December 2003, she witnessed the respondent enter into a
    dissociative episode of about three minutes. In particular, she said that the
    respondent rocked back and forth, hyperventilated and shouted Im really
    angry and then Im really angry, you did nothing.

[33]

In her report dated July 15, 2004, which was filed at trial, Dr.
    Maddocks stated her opinion concerning the credibility and reliability of the
    respondents recalled memories. She acknowledged that the area of memory
    recovery is a very controversial field of inquiry. She also sounded a note of
    caution with respect to the accuracy of the respondents recalled memories,
    stating that we cannot know for certain if all of the memories represent
    actual events, also observing that the memories remained fragmented. Dr.
    Maddocks summarized her conclusions as follows:

In my opinion the recalled memories were not implanted and were
    consistent with the literature on types of recalled memory that have been found
    to refer to actual events. Whereas we cannot know for certain if all the
    memories are depictions of actual events, in considering all of the data, in my
    opinion, there is a strong indication that her brother severely sexually and
    physically abused her on a regular basis over a long period of time, starting
    when Dr. Whitfield was very young.

[34]

At trial, Dr. Maddocks confirmed the contents of her report. During cross-examination,
    Dr. Maddocks agreed with various statements from the Canadian Psychological
    Association and the American Psychological Association, of which she is a
    member. In particular, she agreed that recovered memories of early childhood
    abuse are a rare occurrence and may not be reliable. She also agreed that it is
    impossible, without other corroborative evidence, to distinguish a true
    recovered memory from a false one.

[35]

The former mothers helper lived and worked on the farm between 1950 and
    1957. During this period, she left her employ temporarily, once for six months
    and then on another occasion for two weeks. She left the farm for the last time
    when the respondent was six years old. She testified that she normally shared
    the respondents bedroom with her and never saw the appellant abuse his sister.
    As far as she was concerned, he was nothing other than a normal boy.

[36]

The appellant testified at trial. He categorically denied all
    allegations of abuse. In support of his defence, he called his sisters, who both
    testified that they never witnessed any abuse of the respondent by the
    appellant.

[37]

The eldest sister is a pediatrician. She is three years older than the
    appellant and ten years older than the respondent. She lived at the farm on a
    full-time basis until she left home to attend university in September 1959,
    when the respondent would have been eight years old. The abuse of the
    respondent would have been ongoing for three or four years by this point. She
    testified that she never witnessed the appellant abusing the respondent.

[38]

The second eldest sister is a psychiatrist. She is one year older than
    the appellant and eight years older than the respondent. She lived on the
    family farm until she left for university in the fall of 1960 when the
    respondent would have been nine years old. The abuse of the respondent would
    have been going on for four or five years by this point. This sister testified
    that she never witnessed any inappropriate behaviour on the part of the
    appellant towards the respondent nor did she ever hear the appellant threaten
    the respondent. In particular, she denied that she and the appellant ever
    threatened the respondent with guns or shot at her, or that the respondent ever
    complained to her about the alleged abuse.

The trial judgment

[39]

The trial lasted 24 days and spanned the course of about one year. Judgment
    was granted on May 1, 2014 in favour of the respondent. The trial judge awarded
    the respondent $250,000 for aggravated general damages, $50,000 for punitive
    damages, and $54,200 as special damages for future therapeutic care. On May 28,
    2014, the trial judge awarded the respondent costs in the amount of $97,000,
    inclusive of disbursements.

Assessment of the evidence by the trial judge

[40]

The trial judge reviewed the evidence of all of the lay witnesses and came
    to the following conclusion concerning the litigation:

Up to this point of my analysis, the scales between the case
    for the plaintiff and that of the defendant are relatively evenly balanced. Dr.
    Whitfields complaints against her brother are, in my view, extremely
    compelling and I am satisfied that they are neither a product of a wilful
    decision to slander her brother nor are they a construction of false memories
    either intentionally or inadvertently implanted into the mind of the plaintiff
    by her own efforts or those of third parties. The denials of Bryan Whitfield
    being effectively unchallenged by his younger sister during cross-examination
    and being substantively buttressed to varying degrees by his two older sisters,
    are equally compelling.

[41]

As a result of the even balance between the case for the appellant and
    the respondent, the trial judge turned to the evidence of Dr. Maddocks, stating:
    That is why I find the evidence of Dr. Maddocks, including her report, to be
    of critical importance in resolving this litigation.

[42]

The trial judge concluded that he could use Dr. Maddocks evidence not
    simply in furtherance of the quantification of the respondents claim for
    damages, but also to support the respondents case on liability. The trial
    judge reasoned as follows:

My review of the pertinent jurisprudence does support the use
    of such evidence for this purpose: see
S.R.S. v. H.P.S.
(1999) 122
    O.A.C. 351 (C.A.) at paras. 4-8. I am satisfied that the probative value of the
    evidence is significant in that it appears to be directly related to the abuse
    alleged and because it tends to corroborate the complaint of Dr. Whitfield
    whose claim may be suspect as it is based on recovered memories. Turning to the
    potential prejudicial effect of this evidence, as trial judge, I can be
    presumed not to allow it to disproportionately influence my analysis. In the
    result, I am satisfied that this part of Dr. Maddocks opinion is available to
    support the plaintiffs case on liability.

[43]

The trial judge also concluded that the episodes of disassociation that
    were witnessed by Ms. Provençal and Dr. Maddocks formed part of the recovery
    process of the respondents repressed memories of the abuse that she suffered
    at the hands of the appellant over the period of some 15 years.

Analysis

i.

The
    respondents action

[44]

As noted earlier, the appellant raises seven grounds of appeal in
    relation to the trial judgment allowing the respondents action. As I would
    allow the appeal on the first ground, that the trial judge erred in law by
    relying on Dr. Maddocks evidence for the purpose of determining liability, it
    is not necessary to deal with the other grounds of appeal relating to the
    respondents action.

General principles

[45]

The role of an expert witness in the trial process has been the subject
    of much judicial and other consideration. It is well established that the
    purpose of expert testimony is to assist the trier of fact by providing
    information about a specialized field of inquiry which is likely to be outside
    the experience of a judge or jury:
R. v. J.-L.J.
, [2000] 2 S.C.R. 600,
    2000 S.C.C. 51, at para. 56.

[46]

There is no question that expert evidence is essential to the litigation
    process and that many cases involving highly technical areas could not be tried
    without it:
R. v. Abbey
, 2009 ONCA 624, 97 O.R. (3d) 330, at para. 73.

[47]

However, the nature of expert evidence and its allure of scientific
    infallibility give rise to the very real potential that it will swallow whole
    the fact-finding function of the court:
Abbey
, at para. 71. As a
    result, courts must remain vigilant to draw a firm line between the role of the
    expert and the role of the court to ensure that experts not be permitted to
    usurp the functions of the trier of fact:
J.-L.J.
, at paras. 25-26.
    Indeed, the closer the experts evidence approaches an opinion on an ultimate
    issue, the stricter must be the application of this principle:
J.-L.J.
,
    at para. 37.

[48]

Nowhere is this distinction more important than in relation to the
    issues of credibility and reliability that a trier of fact is called upon to
    determine in every trial. Expert evidence on human conduct and the
    psychological and physical factors which may lead to certain behaviour relevant
    to credibility is permitted, provided the testimony goes beyond the ordinary experience
    of the trier of fact:
R. v. Marquard
, [1993] 4 S.C.R. 223, at pp.
    248-49. Ultimate issues of credibility and reliability, however, are issues
    well within the experience of judges and juries and ones in respect of which no
    expert evidence is required:
R. v. Béland
, [1987] 2 S.C.R. 398, at pp.
    415-16.

[49]

These principles are illustrated in
Marquard
, which involved an
    allegation of aggravated assault of a child by her grandmother. At issue was
    the trial judges direction to the jury that they could rely on the expert
    evidence called to corroborate the truth of the childs testimony. In ordering
    a new trial, the Supreme Court confirmed that the jury direction was erroneous
    because the ultimate conclusion as to the credibility or truthfulness of a
    particular witness is for the trier of fact, and is not the proper subject of
    expert opinion: p. 248. The court explained why this is so, at p. 248:

A judge or jury who simply accepts an experts opinion on the
    credibility of a witness would be abandoning its duty to itself determine the
    credibility of the witness. Credibility must always be the product of the judge
    or jurys view of the diverse ingredients it has perceived at trial, combined
    with experience, logic and an intuitive sense of the matter. Credibility is a
    matter within the competence of lay people. Ordinary people draw conclusions
    about whether someone is lying or telling the truth on a daily basis. The
    expert who testifies on credibility is not sworn to the heavy duty of a judge
    or juror. Moreover, the experts opinion may be founded on factors which are
    not in the evidence upon which the judge and juror are duty-bound to render a
    true verdict. Finally, credibility is a notoriously difficult problem, and the
    experts opinion may be all too readily accepted by a frustrated jury as a
    convenient basis upon which to resolve its difficulties. All these considerations
    have contributed to the wise policy of the law in rejecting expert evidence on
    the truthfulness of witnesses.

Application of the principles to the present case

[50]

I agree with the appellants submissions that the trial judges reliance
    on Dr. Maddocks evidence went beyond its permissible uses. In particular, the
    trial judge erred in determining that he could use Dr. Maddocks evidence to
    establish the respondents claim and to find the appellant liable.

[51]

The trial judges reliance on the decision of
S.R.S. v. H.P.S.
(1999), 122 O.A.C. 351 (C.A.), at paras. 4-8, to corroborate the respondents
    claim on liability was misplaced. This decision does not stand for the general proposition
    that expert evidence can be admitted as corroboration of a claimants
    allegations of sexual abuse for the purpose of establishing liability.

[52]

Rather, this court simply noted in
S.R.S.
, at para. 6, that
    expert opinion evidence about the
impact
of sexual abuse was widely
    accepted and that the evidence in that case was filed on consent, without any
    limitation as to its use by the trial judge, and without cross-examination. As
    a result, this court found no basis for the complaint by the appellant.

[53]

The limited application of the decision in
S.R.S.
to the
    particular facts of that case is highlighted by the reference to
R. v.
    Olscamp
(1995), 95 C.C.C. (3d) 466 (Ont. C.J. (Gen. Div.)), addressing the
    admissibility of expert evidence concerning the impact of sexual abuse. In
Olscamp
,
    at p. 474, Charron J. stated the following general proposition referenced by
    this court in
S.R.S.
:

Expert opinion evidence about the general behavioural and
    psychological characteristics of child victims of sexual abuse has often been
    admitted in Canadian criminal trials. The admissibility of this kind of
    evidence for certain purposes has been confirmed by a number of Canadian Courts
    of Appeal and by the Supreme Court of Canada. [Citations omitted.]

[54]

Moreover, at p. 475, in rejecting the proffered expert evidence in the
    case before her, Charron J. reiterated the general caution expressed in
Marquard
about using expert evidence to determine issues of credibility:

Although the proposed evidence is certainly logically relevant
    to an issue in the case, its probative value, for the reasons set out earlier,
    is extremely limited. On the other hand, its prejudicial value can be
    overwhelming. This trial will turn on a question of credibility.
Although a distinction can be made between evidence going to
    credibility alone and this kind of evidence admitted in support of the
    complainants testimony, the line is a very fine one. The admission of evidence
    dressed up in scientific language (
Mohan
, at p. 411) in support of the complainants testimony may well
    be given far more weight by the jury than it deserves and may even become
    determinative of the ultimate issue.
The prejudicial effect of this
    evidence so far outweighs its low probative value that the matter cannot simply
    be left to be remedied by cross-examination and special instructions to the
    jury. The evidence should not be admitted. [Emphasis added.]

[55]

Although the trial judge indicated in his reasons that he would not
    allow Dr. Maddocks evidence to disproportionately influence [his] analysis,
    it is clear that this is exactly what occurred in this case.

[56]

The trial judge did not simply use Dr. Maddocks evidence to explain the
    memory process in human beings and delayed recall in victims of historical
    sexual abuse or for the purpose of assessing the respondents damages. There is
    no question that those uses would have been permissible.

[57]

Rather, the trial judge expressly relied on Dr. Maddocks evidence to
    resolve the litigation by tipping his otherwise evenly balanced assessment of
    the credibility and reliability of the appellant and the respondent. The trial
    judge erred by relying on Dr. Maddocks evidence to corroborate the truth of
    the respondents fragmented recovered memories. In doing this, he erroneously
    allowed the expert to usurp his role as trier of fact.

[58]

As a result, the judgment must be set aside. Given the trial judges determination,
    after considering and making findings based on the evidence of the lay
    witnesses, that the scales between the case for the plaintiff and that of the
    defendant [were] relatively evenly balanced, a conclusion which is not tainted
    by the errors identified in these reasons, the respondent has failed to prove
    her claim on a balance of probabilities. The evidence of Dr. Maddocks was
    essential to a finding that the respondent had made out her case. That evidence
    was simply not available to the trial judge to resolve the contradictions
    between the parties accounts. As such, the respondents action must be
    dismissed.

ii.

The
    appellants counterclaim

[59]

There is no dispute that the appellant met the burden of proving that
    the respondents allegations were defamatory and that they were published. The
    onus then shifted to the respondent to prove on a balance of probabilities that
    her allegations were justified because they were true or that the defence of
    qualified privilege applied in the circumstances of this case. Given my conclusion
    above, the statements cannot be justified as having been true. The question is
    therefore whether the trial judge was correct to conclude that the respondents
    statements were protected by qualified privilege.

[60]

I agree with the appellants submission that the trial judges finding
    of qualified privilege was irreparably tainted by his erroneous findings that
    the respondents allegations were true as supported by Dr. Maddocks opinion.
    In my view, even if the defence of qualified privilege can be said to apply to
    the communications to the respondents family and the two lawyers, it cannot
    apply to the communications to the respondents former high school friend. As
    such, I would allow the appellants appeal with respect to the counterclaim.

Brief background

[61]

It is useful to set out a brief summary of the facts underlying the
    appellants counterclaim. The communications at issue comprise emails, letters
    and postcards. Most were sent to the parties family members, including the
    respondents daughters; the appellant, his wife and their two daughters; the
    eldest sister, her husband and their two children; and the second eldest sister
    and her husband. Several of the emails were also sent to the respondents
    friend from high school, with whom she had not been friends for over 30 years since
    high school ended. These letters contained what the trial judge described as
    the respondents efforts to set the record straight on the marathon of
    sexual, emotional and physical abuse that she claimed comprised the
    relationship between her and the appellant.

[62]

The communications also include a letter sent by the respondent to the
    estate solicitor, with her siblings and her own lawyer copied, in which the
    respondent briefly described the abuse and her ongoing process of memory
    recovery. She expressed concern about the appellants ability to exert pressure
    on her daughters due to his role as trustee of their fathers estate. The two
    lawyers were later copied in an email sent by the respondent to her three
    daughters in which she again briefly described the assaults and begged her
    daughters to consider if they had any memories of inappropriate conduct by the
    appellant. Finally, she copied the lawyers on an email sent to her two older
    sisters in which she tried to enlist her sisters help in encouraging the
    appellant to resign from his role as Trustee of the Grandchildrens Trusts.

[63]

The respondent relied on the defence of qualified privilege in the event
    her justification by way of truth failed. Although the trial judge found that
    the respondent had made out her claim, he considered the counterclaim on the
    alternative basis of qualified privilege because of the extensive submissions
    that had been made on this point at trial.

General principles

[64]

The defence of qualified privilege flows from the rationale that the
    interest sought to be protected by the statement is considered important enough
    to justify allowing a person to defame another without attracting liability:
R.T.C.
    Engineering Consultants Ltd. v. Ontario
(2002), 58 O.R. (3d) 726 (C.A.),
    at para. 15.

[65]

Qualified privilege attaches to the occasion when a defamatory statement
    is made, not to the statement itself:
R.T.C. Engineering
, at para. 14.
    A privileged occasion is an occasion where the person who makes a
    communication has an interest or a duty, legal, social, or moral, to make it to
    the person to whom it is made, and the person to whom it is so made has a
    corresponding interest or duty to receive it:
Hill v. Church of
    Scientology of Toronto
, [1995] 2 S.C.R. 1130, at para. 143. Two broad
    categories of privileged occasions relevant to this appeal include
    communications intended to protect or further the legitimate interests of the
    publisher; and communications intended to protect or further the legitimate
    interests of another: Raymond E. Brown,
Defamation Law: A Primer
, 2nd
    ed. (Toronto: Thomson Canada Limited, 2013) at p. 211.

[66]

In assessing whether such an interest or duty exists, the test is
    whether persons of ordinary intelligence and moral principle, or the great
    majority of right-minded persons, would have considered it a duty to
    communicate the information to those to whom it was published:
Halls v.
    Mitchell
, [1928] S.C.R. 125, at pp. 132-33; Raymond E. Brown,
The Law
    of Defamation in Canada
, loose-leaf (2014-Rel. 3), 2nd ed. (Toronto:
    Thomson Reuters Canada Limited, 1999) at pp. 13-5, 13-103.

[67]

In determining whether the defence of qualified privilege is applicable,
    context matters. Relevant factors include the nature of the statement, the
    circumstances under which it was made, and by whom and to whom it was made.
    Reciprocity of interest is essential, and at the very heart of the defence of
    qualified privilege  the defendant must have some interest in making the
    statement and those to whom the statement is made must have some interest in
    receiving it:
R.T.C. Engineering
, at para. 16.

[68]

The privileged occasion must be created by the exigency of the
    circumstances and not by the state of mind of the person who communicates the
    information. That the person communicating the information believes in its
    truth is irrelevant to whether the occasion is privileged, although the lack of
    such a belief may constitute malice, causing the privilege to be lost:
R.T.C.
    Engineering
, at para. 18;
Ahmad v. Ontario Hydro
, 1997
    CarswellOnt 2783 (C.A.), at para. 5.

[69]

Further, the privilege is to be narrowly applied and does not extend to
    comments that go beyond the exigency of the occasion or which are communicated
    to those who have no interest in receiving them:
Hill
, at paras.
    146-147;
R.T.C. Engineering
, at paras. 15, 18. Simply put, to
    maintain privilege a defendant must communicate appropriate information to
    appropriate people:
R.T.C. Engineering
, at para. 18.

Application of the principles to the present case

[70]

The trial judge correctly stated the law on qualified privilege as
    follows:

The occasion of qualified privilege has been described as:

an occasion where the person who makes the
    communication has an interest
or
duty, legal,
    social or moral, to make it to the person to whom it is made, and the person to
    whom it is so made has a corresponding interest or duty to receive it. The
    reciprocity is essential....: see p. 47,
Annual Review
quoting
Adam
    v. Ward
, [1917] A.C. 309 (H.L.) at p. 334. [Emphasis in original.]

[71]

As he acknowledged, the trial judge was required to determine this issue
    after assuming that the respondent had failed to demonstrate that her allegations
    were true. However, the trial judge failed to do this.

[72]

Rather, the trial judges reasons indicate that he found that qualified
    privilege applied because the respondents allegations were true and supported
    by Dr. Maddocks opinion. Indeed, the trial judge chastised the respondents
    family for their apparent insensitivity to the respondent:

Although some or all of them may have found the disclosures
    distasteful and offensive, they had not only an interest but a familial duty to
    consider this dirty family secret and give their sister, sister-in-law and
    aunt at least a tiny benefit of a doubt as to the validity of her claims. Any
    group of right-minded persons would have done so, especially when her complaints
    were supported to a significant degree by the report of Dr. Maddocks. The
    refusal by two professionals such as her two older sisters to do so simply
    boggles my mind. This attitude was not only insensitive to their younger
    sister, it shows, in my view, a profound absence of professional objectivity.

[73]

The trial judge further erred when he determined that because the
    respondent believed in her heart and soul that she had been the victim of
    unrelenting sexual abuse at the hands of her brother she was entitled to make
    defamatory allegations of sexual abuse to other members of their family, her
    former high school friend, her lawyer and the estate solicitor. The
    respondents subjective beliefs may be relevant to the question of whether she
    acted out of malice. But they are irrelevant to the question of whether the
    occasion itself was privileged.

[74]

Unfortunately, the trial judge erred by conflating these criteria: his
    finding that the respondent honestly believed her allegations meant that she
    had an interest or duty to publish the information and that the recipients of
    her emails had a corresponding duty to give her at least a tiny benefit of a
    doubt as to the validity of her claims. By doing so and failing to analyze
    whether, objectively, the occasion was privileged, the trial judge erred.

[75]

As a result, it is necessary to examine the availability of the defence
    of qualified privilege in this case.

[76]

The respondent may have had an interest in sending email communications
    concerning the appellants behaviour, for example to protect her family
    members, prevent future abuse or seek out emotional support. In turn, her
    family members may have had an interest in receiving the respondents email
    communications about the appellant to consider whether they were affected by the
    allegations and should take any protective action: see e.g.
B. (P.) v. E.
    (R.V.)
, 2007 BCSC 1568, where family members were held to have an interest
    in receiving information from their relative who had accused her father of
    sexually assaulting her.

[77]

Similarly, in communicating with her lawyer and the estate solicitor
    about her allegations, specifically in requesting that the appellant be removed
    as the trustee for the grandchildrens trusts, the respondent may have been
    acting to protect the interests of other persons, namely her daughters. The
    solicitors may have had an interest or duty to receive those communications, to
    assess if or how to respond to the request.

[78]

However, there was no duty or interest on the part of the respondents
    former high school friend to receive the respondents communications. The
    respondent admitted that their friendship did not last after high school had
    ended and that they only briefly reconnected after the death of the
    respondents mother.  She did not testify as to her reason for copying the friend
    on the defamatory emails. There was no evidence that she asked her friend for
    assistance or advice, or that the friend ever responded to her communications. In
    these circumstances, there was no legitimate interest to be protected by the
    statements; as a result, they did not merit protection under the auspices of
    qualified privilege:
R.T.C. Engineering
, at para. 15;
Milgaard v.
    Mitchell
(1996), 151 Sask. R. 100 (Q.B.), at para. 36.

[79]

The respondent has failed to demonstrate the defence of justification or
    qualified privilege with respect to the defamatory communications sent to her former
    high school friend. I would allow the counterclaim in the amount of $5,000, as
    requested by the appellant.

Disposition

[80]

For these reasons, I would allow the appeal, dismiss the respondents
    claim and allow the appellants counterclaim in the amount of $5,000.

Costs

[81]

With respect to the costs of the appeal, the appellant claims his
    partial indemnity costs on appeal in the amount of $50,000.

[82]

The appellant was entirely successful on his appeal. As a result, there
    is no reason to depart from the ordinary practice that costs follow the event. Given
    the numerous pre-appeal procedures and attendances, and the voluminous
    materials filed by both parties, the amount claimed is fair, reasonable and
    proportionate, and ought to have been in the respondents contemplation if she
    were unsuccessful. That this matter was conducted as a bilingual proceeding has
    no bearing on the amount of costs awarded.

[83]

Accordingly, I would fix the appellants appeal costs in the amount of
    $50,000, inclusive of all amounts, and order that the respondent pay the
    appellants appeal costs on or before September 22, 2016.

[84]

Given the outcome of this appeal, the trial judges costs award must
    also be set aside.

[85]

The appellant did not make any submissions concerning his trial costs. If
    the parties cannot agree on the scale and quantum of costs to be awarded, they
    may forward written submissions of no more than five pages, including a costs
    outline, as follows: the appellant shall deliver and file his costs submissions
    by August 5, 2016; the respondent shall deliver and file her responding costs
    submissions by August 26, 2016. There shall be no reply submissions.

Released:
July 20, 2016

L.B. Roberts
    J.A.

I agree K.M.
    Weiler J.A.

I agree K. van
    Rensburg J.A.


WARNING

THIS IS AN APPEAL UNDER THE

CHILD AND FAMILY SERVICES ACT

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

45(7)  The court may make an order,

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

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

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

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

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

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

COURT OF APPEAL FOR ONTARIO

CITATION: Windsor-Essex Children's Aid Society v. R.H.C.,
    2016 ONCA 595

DATE:

20160729

DOCKET: C61792

Hoy A.C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Windsor-Essex Childrens Aid Society

Applicant (Respondent)

and

R.H.C.

Respondent (Appellant)

R.H.C., acting in person

Michelle Meighoo, duty counsel on behalf of the
    appellant

Frank Philcox, for the Windsor-Essex Childrens Aid
    Society

Annemarie Carere, for the Office of the Childrens
    Lawyer

David B. Williams, for the intervener Christina Sweet

Heard: July 20, 2016

On appeal from the judgment of Justice
J.
    Paul R. Howard
of the Superior Court of Justice dated January 6, 2016.

ENDORSEMENT

OVERVIEW

[1]

The appellant is the mother of two young girls
    who are nine and twelve years old. Both girls were apprehended by the Windsor-Essex
    Childrens Aid Society (the Society) on May 16, 2012. The appellant has not
    had access to her children since October 22, 2014. The Society brought a
    summary judgment motion seeking a Crown wardship order with no access for the
    mother, which was granted by the motion judge on December 23, 2014. The
    appellant appealed to the Superior Court of Justice and, on the appeal, alleged
    ineffective assistance from counsel on the summary judgment motion. The
    Superior Court appeal judge dismissed the appeal. The appellant appeals from
    that order.

[2]

On this appeal, duty counsel assisted the
    appellant by making submissions on some, but not all, of the issues. The
    appellant made submissions on the remaining issues. The court appreciates the
    assistance given by duty counsel.

STANDARD OF REVIEW

[3]

Two principles must animate the appellate review
    in this matter. First, the best interests of the children are the paramount
    concern in child protection proceedings:
Childrens Aid Society of
    Toronto v. V. L.
, 2012 ONCA 890, 249 O.A.C. 388. at para.
    15.

[4]

Second, the appeal judge performed two tasks: he
    heard the appeal from the judgment of the motion judge, and he considered, in
    the first instance, the appellants submission that she received ineffective
    assistance from counsel on the motion. In respect of the appeal decision, this
    court should only intervene if the appeal judge erred in principle by failing
    to identify a material error in the decision made by the motion judge:
V.
    L.
, at para. 17. In respect of the ineffective assistance
    of counsel issue, the standard of review is that established by
Housen
    v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235.

FIRST ISSUE: INEFFECTIVE ASSISTANCE
    OF COUNSEL

[5]

Before the Superior Court, the appellant alleged
    her counsel on the motion failed to provide effective assistance. The appeal
    judge dealt with the allegation in accordance with the Superior Court of
    Justice Protocol  Allegations of Incompetence. The appeal judge correctly
    identified the test for establishing ineffective assistance of counsel in the
    child protection context as that set out by the Divisional Court in
K.R.
    v. CAS
, 2015 ONSC 3769, [2015] O.J. No. 2850, at paras.
    7-8, which, in turn, draws on the principles articulated by this court in
R.
    v. Archer
(2005)
, 202 C.C.C. (3d) 60, 203 O.A.C. 56 (C.A.), at paras. 119-120.

[6]

In his reasons, the appeal judge extensively
    reviewed and considered the chronology of the litigation and the specific
    allegations of ineffective assistance advanced by the appellant. He made
    several key findings of fact: (i) the appellant instructed motion counsel to
    present the kinship plan involving the appellants uncle and aunt in Michigan;
    (ii) motion counsel complied with those instructions; (iii) the appellant
    adduced no evidence that motion counsel fell below the standard of competence
    required of counsel in similar circumstances; and (iv) there was no reasonable
    or realistic possibility that had counsel done something differently, the
    result might have been different. He found motion counsel performed
    competently in the context of the proceedings before Tobin J. given the scope
    of her retainer: para. 171. He dismissed the ground of appeal based on
    ineffective assistance of counsel.

[7]

The appellant was not able to demonstrate any
    error in the appeal judges understanding of the evidence, findings of fact, or
    analysis that would justify interfering with his conclusion. We do not give
    effect to this ground of appeal.

SECOND ISSUE: CROWN WARDSHIP ORDER

Fresh evidence

[8]

The appellant moves for the admission of fresh
    evidence on the appeal. The fresh evidence consists of documents from the CAS
    files and Family Visitation Program Case Notes.  All the documents were created
    before, and concerned events which occurred prior to, the hearing of the
    summary judgment motion. The appellant obtained the documents as part of
    disclosure made by the Society. The appellant did not file an affidavit indicating
    when she came into possession of the fresh evidence. However, it appears the
    documents were in her possession before the appeal in the Superior Court, but
    the appellant had not reviewed all of them before the appeal hearing. The
    appellants notice of motion states the documents are relevant to the motion
    judges findings concerning the childrens fear of their mother and the emotional
    impact on them of access by the appellant.

[9]

In
Catholic Childrens Aid Society
    of Metropolitan Toronto v. M. (C.)
, [1994] 2 S.C.R. 165, the
    Supreme Court of Canada stated, at pp.185-190, that in child protection cases
    the consideration of a request to file fresh evidence requires a sufficiently
    flexible rule, where an accurate assessment of the present situation of the
    parties, and the child in particular, is of crucial importance: at p. 188. Nevertheless,
    an appeal is not a new hearing on the merits, especially where, as here, the
    appeal is taken from an intermediate appellate decision.

[10]

Most of the fresh evidence the appellant seeks
    leave to file on this appeal was appended to her September 11, 2015 affidavit
    filed before the appeal judge on a motion for leave to file fresh evidence.

[11]

The appeal judge dealt with the appellants
    fresh evidence at considerable length: at paras. 237 to 260. He concluded that
    by filing the fresh evidence, the appellant, in effect, was seeking a fresh
    hearing of the entire history of the care of the children from their date of
    apprehension until the summary judgment motion: at para. 245. In the result,
    the appeal judge admitted the evidence, but declined to give effect to it because:
    it was designed to support the appellants new plan for the children to be
    returned to her; more than three and half years had passed since the children
    were apprehended and placed in foster care; and it could not be assumed that
    placing the children in one of the settings proposed by the appellant  their
    return to the appellant or placement into the care of the appellants friend,
    Ms. Reimer  would be successful.

[12]

Before us, the appellant seeks to re-file
    essentially the same evidence considered by the appeal judge and asks us to
    consider and weigh the evidence afresh. That is not a proper function of this
    court. An appeal to this court does not involve a fresh hearing on the evidence
    but, instead, a review of the decisions made by the judges below to ascertain
    whether they made a material error that affected the outcome of those hearings.
    We see no error in the appeal judges determination of the admissibility and
    use of the fresh evidence filed by the appellant. Accordingly,
we
deny the appellant leave to file her fresh evidence.

The review of the motion judges
    order

[13]

Before the appeal judge, the appellant made
    several arguments: (i) if the motion judge had exercised his fact finding
    powers by sifting through the entire cumulative record, he would not have found
    in favour of the Society; (ii) the motion judge erred by relying on affidavits
    that were replete with hearsay evidence; (iii) the motion judge did not
    consider the least disruptive course of action available; (iv) the motion judge
    erred in failing to grant the appellant access to her children; and (v) the
    motion judge erred by allowing the Society to file evidence after the motion
    hearing to provide the biographical information about the children required by s.
    47(2) of the
Child and Family Services Act
,
    R.S.O. 1990, c. C.11 (
CFSA
).

[14]

The appellant repeats those arguments before
    this court. In addition, duty counsel submits the motion judge erred in (i)
    failing to take into account, as part of his best interests of the child
    analysis, the cultural and religious backgrounds of the children and (ii)
    failing to consider reports of assessments of both children conducted and
    produced by Dr. Hallam-Helbich pursuant to s. 54 of the
CFSA
in October and November, 2012.

[15]

In his thorough reasons, the appeal judge
    identified the correct standard of review: at para. 175. The appeal judge
    considered and addressed each ground of appeal advanced by the appellant before
    him. He concluded that:

(i)       the
    motion judge undertook a considered and thoughtful analysis of the hearsay
    evidence before the court The motion judge made no error in his treatment of
    the evidence or his finding on this point (para. 179);

(ii)      the
    motion judge correctly applied the law, carefully considered the entire
    evidentiary record before him, and correctly found there were no material facts
    or issues in dispute that created a genuine issue for trial. He correctly
    determined that there was no possibility of an outcome other than that sought
    by the Society (para. 193);

(iii)     the
    granting of leave to the Society to file further evidence as to the statutory
    findings caused no prejudice to the appellant. Any claims to the contrary are
    specious (para. 197);

(iv)     there
    was sufficient evidence before the motion judge to ground his ruling that
    access by the appellant to the children had caused the children emotional harm (para.
    203); and

(v)      even
    if he admitted the appellants fresh evidence, it would not alter his decision
    that the motion judge did not err in finding there was no genuine issue for
    trial in respect of either the finding that the children are in need of
    protection or the disposition (para. 239).

[16]

The appellant has not demonstrated the appeal
    judge erred in principle by failing to identify a material error in the motion
    judges decision. The reasons of the appeal judge thoroughly and carefully
    reviewed the decision below and the evidence.

[17]

The motion judge gave extensive reasons for his
    decision. The motion judge specifically took into account the childrens
    cultural background, finding that aspect of the childrens best interests would
    be better met by the appellants plan to place the children with her relatives:
    at para. 63. However, the motion judge concluded that taking into account all the
    other factors identified in s. 37(3) of the
CFSA
, the Societys plan would better meet the needs of the children.

[18]

The motion judge did not ignore the assessments
    conducted by Dr. Hallam-Helbich: at para. 7. However, those assessments were
    conducted two years before the summary judgment motion was heard, and the
    motion judge had before him more current evidence about the interaction between
    the appellant and her two children.

[19]

Consequently, we see no basis upon which to
    interfere with the decisions below.

DISPOSITION

[20]

For the reasons set out above, we dismiss the
    appellants motion for leave to file fresh evidence and we dismiss her appeal.

Alexandra Hoy A.C.J.O.

David Brown J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Zenex Enterprises Limited v. Pioneer Balloon Canada
    Limited, 2016 ONCA 594

DATE: 20160726

DOCKET: C60765

Hoy A.C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Zenex Enterprises Limited

Plaintiff

(Respondent)

and

Pioneer Balloon Canada Limited
, S. Rossy Inc.,

Dollarama
    S.E.C. and Dollarama L.P.

Defendants

(
Appellant
)

Derek Collins, for the appellant

Michael S. Deverett, for the respondent

Heard: July 19, 2016

On appeal from the judgment of Justice Sandra Chapnik of
    the Superior Court of Justice, dated June 19, 2015 and supplementary reasons,
    dated July 14, 2015.

ENDORSEMENT

[1]

The appellant, Pioneer Balloon Canada Ltd. (Pioneer), appeals
    from the trial judges determination that it owes Zenex Enterprises Ltd. (Zenex)
    $266,725.08 for breaching an oral contract to pay a commission on its balloon
    sales to Dollarama. Zenex seeks to cross-appeal the trial judges decision that
    it pay Pioneer $5,000 in costs for an unsuccessful motion it brought in the
    course of the proceedings.

Background

[2]

Pioneer is a balloon manufacturer. Zenex is a wholesaler and
    distributor of consumer goods. Dollarama, a retail chain store, was a customer
    of Zenex for several years, during which it purchased various goods including balloons
    Zenex had purchased from Pioneer.

[3]

In 2005, Pioneer entered into an agreement to sell balloons to
    Dollarama directly. Several million dollars in balloons were sold by Pioneer to
    Dollarama over the next five years. Zenex claimed that it was entitled to a 5%
    commission on Pioneers sales to Dollarama, pursuant to an agreement it made to
    introduce Pioneer to Dollarama and to assist in obtaining Dollaramas business.
    Pioneer contended that it secured the Dollarama business on its own and that it
    owed only $5,000 as a fee for Zenex president Howard Starrs services

Did Zenex introduce Pioneer to Dollarama?

[4]

Pioneer argues that the trial judge committed a palpable and
    overriding error when she found it was not disputed that in December 2005,
    Zenex introduced Marylynn Borondy, salesperson for Pioneer, to the principal
    buyer at Dollarama. Pioneers submissions focused on its first meeting with
    Dollarama in Montreal, in December 2005. It argues that Mr. Starr did not attend
    this meeting and, therefore, Zenex did not introduce Pioneer to Dollarama. It points
    to evidence that its representatives had to introduce themselves to the company
    at the meeting.

[5]

We do not accept this argument.

[6]

The agreement between Zenex and Pioneer contemplated a commercial
    introduction  an opening of doors by Mr. Starr, offering Pioneer the chance to
    do business directly with one of Zenexs longstanding clients. Mr. Starr could
    not attend the meeting because his wife was ill, but sent a sales
    representative familiar with the business in his place. Pioneer does not
    dispute that the sales representative attended the meeting in the place of Mr. Starr.

[7]

It was open to the trial judge to find that Mr. Starrs absence
    from the first meeting with Dollarama, which he helped arrange, did not
    undermine the role Zenex played in helping Pioneer to secure the contract with
    Dollarama. Pioneer had no prior relationship with Dollarama and the trial judge
    found that but for the introduction through Zenex, the meeting and consequent sales
    by Pioneer to Dollarama would likely never have occurred. The introduction in
    itself was, I find, significant.

[8]

Pioneer attempted to downplay not only the significance of the work
    done by Mr. Starr in arranging the introduction with Dollarama, but also the
    work he did in helping it to secure the contract with Dollarama. For example, Pioneer
    noted that Mr. Starr did not participate in its second meeting with Dollarama
    in March 2006.

[9]

However, the trial judge found that Pioneers second meeting with
    Dollarama was set up without checking with Mr. Starr, who was informed of it
    only the night before. The trial judge found, further, that Mr. Starr provided extensive
    advice to Pioneer on how to deal with Dollarama in a series of telephone calls
    and email messages between the parties, and spent many hours strategizing Ms.
    Borondy as to its program details and Dollarama presentation.

[10]

The trial judge preferred the evidence of Mr. Starr whenever it
    diverged from that of Ms. Borondy, whose testimony she considered self-serving
    and inconsistent, and not credible as a result. She found that Mr. Starr took
    responsibility for and helped service the Dollarama account, and at no time
    worked as a mere employee or sales agent for Pioneer.

[11]

In short, both the specific finding impugned and the trial
    judges decision are amply supported by the record. We see no palpable and
    overriding error.

Did judge wrongly rely on discovery evidence?

[12]

Pioneer submits that the trial judge erred in relying on evidence
    from the discovery that was not referred to during the course of the trial. It
    points specifically to paras. 39, 40, and 46, in which the trial judge quotes
    from the examinations for discovery of Ms. Borondy and Mr. Starr.

[13]

We would not give effect to this ground of appeal.

[14]

There is no doubt that discovery evidence was admitted in
    contravention of r. 34.18 of the
Rules of Civil Procedure
. Zenex
    acknowledges as much. However, the admission of this evidence is of no moment. The
    trial judges findings do not depend on it. There was ample evidence, properly
    admitted, to support the trial judges findings of fact. As a result, the breach
    of r. 34.18 did not result in any substantial wrong or miscarriage of justice.

Additional issues

[15]

Pioneer raised additional issues in its factum, but these were
    not pursued at the hearing of the appeal. Nevertheless, we have reviewed these
    issues and find no errors requiring appellate intervention.

The cross-appeal

[16]

Zenex argues that the trial judge erred in failing to give effect
    to the pre-trial costs decision of the motion judge. The motion judge dismissed
    Zenexs disclosure motion but, in accordance with the agreement of the parties,
    ordered that costs on the motion were to be in the cause. That is, regardless
    of the outcome of the motion, the winner of the trial would be awarded costs for
    the motion in addition to costs for the trial.

[17]

The trial judge concluded that a more appropriate order, and the
    probable intent of the motion judge considering his reasons and decision, would
    have been to order costs to Pioneer in any event of the cause. Accordingly, she
    ordered that costs of the motion, which she fixed in the all-inclusive amount
    of $5,000, be paid to Pioneer.

[18]

We agree with Zenex that the trial judge erred in doing so. Given
    the order of the motion judge, the trial judge was required only to set the
    quantum of costs for the motion. She did so, setting them at $5,000, but that
    exhausted her authority. The trial judge had no authority to alter the motion
    judges order that costs were to be awarded to the winner of the trial.

[19]

Leave to cross-appeal is granted. The cross-appeal must succeed.

Disposition

[20]

The appeal is dismissed. Leave to cross-appeal is granted, the
    cross-appeal is allowed, the trial judges costs award in favour of Pioneer is
    over-turned, and the costs of trial payable to Zenex are increased by the sum
    of $5,000.

[21]

Zenex is entitled to costs for the appeal in the agreed amount
    of $20,000 plus HST, inclusive of disbursements.

Alexandra Hoy A.C.J.O.

David
    Brown J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: 3716724 Canada Inc. v. Carleton Condominium
    Corporation No. 375, 2016 ONCA 650

DATE: 20160830

DOCKET: C61559

Hoy A.C.J.O., Brown and Huscroft JJ.A.

BETWEEN

3716724 Canada Inc.

Applicant (Respondent)

and

Carleton Condominium Corporation No. 375

Respondent (Appellant)

Christy Allen, for the appellant

Nadia J. Authier, for the respondent

Heard:  July 22, 2016

On appeal from the order of
    Justice M. Gregory Ellies of the Superior Court of Justice, dated October 15,
    2015, with reasons reported at 2015 ONSC 6626, 63 R.P.R. (5th) 57, and at 2016
    ONSC 1296, 63 R.P.R. (5th) 73.

Hoy A.C.J.O.:

[1]

This appeal considers the oppression remedy in the
Condominium Act,
    1998
, S.O. 1998, c. 19 (the
Act
).

[2]

The respondent, 3716724 Canada Inc., owns a number of commercial parking
    spots in a mixed-use condominium. It rented them out on a monthly basis. It
    wanted to start renting out the spots on an hourly basis instead to increase
    its profits. The respondent asked the appellant, Carleton Condominium
    Corporation No. 375, to approve changes to the common elements required to make
    that shift. The board of directors of the appellant (the Board) was worried
    about the security implications of the changes requested because they would
    make it easier for trespassers to enter the building. Ultimately, it refused to
    approve the changes unless the respondent hired a full-time security guard who
    would monitor its operation.

[3]

The respondent commenced this application, arguing that the Board had
    unfairly disregarded its interests contrary to s. 135 of the
Act
.
The
    application judge agreed with the respondent, ordered that the respondent be
    allowed to make the changes, and dispensed with the need for a vote of the unit
    owners.

[4]

The appellant argues that the application judge erred (i) by considering
    evidence not properly before him; (ii) in finding that the appellant unfairly
    disregarded the interests of the respondent; and (iii) in dispensing with the
    need for a vote of the unit owners.

[5]

I would give effect to the first two arguments and allow the appeal. It
    is not necessary to address the argument that the remedy granted by the
    application judge was not appropriate.

[6]

To explain my conclusion, I will first set out the legal and factual
    background for this appeal. Then I will summarize the reasons of the
    application judge and conclude by providing my reasons for allowing the appeal.

1.

Legal background: Operation and management of
    condominiums

[7]

The
Act

provides the legal framework for the
    establishment and management of condominiums in Ontario.

[8]

A condominium is a form of property ownership which combines individual
    property interests, exclusively owned by individual unit owners, and common
    elements that are jointly owned by all unit owners as tenants in common:
Re
    511666 Ontario Ltd. et al. and Confederation Life Insurance Co.
(1985), 50
    O.R. (2d) 181 (H.C.J.), at pp. 189-190.

[9]

Property becomes a condominium and starts being subject to the
Act
upon registration of a declaration and description: s. 2(3). Registration of
    the declaration will also create a condominium corporation, which is a corporation
    without share capital whose members are the unit owners: ss. 2(3) and
    5(1).

[10]

Section 27(1) of the
Act

provides that a board of
    directors shall manage the affairs of the corporation. Part of a boards
    obligation is to oversee and manage the common elements of the condominium. The
    corporation is deemed to be the occupier of the common elements and may be
    found liable as such. Therefore, the corporation, and by extension the board, has
    a legal obligation to manage the common elements:
MTCC No. 985 v. Vanduzer
,
    2010 ONSC 900, at para. 28.

[11]

An owner wishing to make an addition, alteration or improvement to the
    common elements must, among other things, obtain the approval of the board: s.
    98. In addition, if the board chooses to treat a proposed change as
    substantial then it must also be voted on and approved by unit owners who own
    at least two thirds of the units of the corporation: ss. 97(4) and (6).

2.

Factual Background

[12]

The condominium at issue is a mixed-use condominium building, containing
    both residential and commercial units, located in the ByWard Market area in
    Ottawa, Ontario. This condominium and the appellant were constituted by a declaration
    registered on April 23, 1987.

[13]

The respondent owns a number of commercial parking spots in the
    condominium. It rented out the parking spots on monthly basis since it purchased
    them. However, renting the parking spots on a monthly basis was no longer
    profitable according to the respondent, and it wanted to convert its business
    to a pay and display hourly parking operation. The declaration creating the
    appellant specifically permits the use of the parking spots for a commercial
    hourly parking business:

All Parking Units owned or leased by the Owner of Unit 27,
    Level 1 and located on Level A of the Parking Garage may be used for a
    commercial parking business for the leasing of individual parking spaces for
    such period of time as the Owner, its assigns, tenants or sub-tenants of such
    Parking Units may in its sole discretion determine provided that not less than
    30 such Parking Units are made available at all times for hourly or daily
    parking.

Indeed, years before, the parking spots had been used
    in a commercial hourly parking business, albeit with a parking attendant on
    site.

[14]

To convert its business into an hourly parking operation, the respondent
    requires a number of changes to the condominiums common elements, including (i)
    installing a garage loop detector on the garage ramp that would cause the
    garage door to open as a vehicle approached; and (ii) changing the hardware on
    an exterior door which would provide free access to a stairwell leading to the
    garage.

[15]

The respondent sought the Boards approval to make the changes in May 2012.

[16]

From the very beginning, the Board made clear that it was concerned that
    some of the changes would make the condominium less safe. The condominium is
    located in a high-crime area with a significant transient population. The parties
    recognized that some of the changes requested by the respondent would increase
    the risk of trespassers gaining access to the garage, which has security
    implications for both unit owners and anyone using the parking spots.

[17]

The Board asked the respondent to obtain a security audit at its own
    expense when the respondent made its request.

[18]

At a meeting held on August 15, 2012, the Board refused to approve the
    requested changes, citing security concerns. It also voted to treat the changes
    as substantial under s. 97(6) of the
Act
.

[19]

The respondent hired Paradigm Private Investigation Services
    (Paradigm) to conduct the security audit which the appellant had requested
    several months before. In its report, submitted to the respondent on May 13,
    2013, Paradigm advised that

consideration [should] be given to the use of additional
    security personnel and in our respectful submission we believe that this can be
    accomplished by the addition of one extra security officer whose primary duties
    would be to maintain enforcement, security, and a visible deterrent for anyone
    considering loitering or engaging in illicit activities on the property.

[20]

The Board advised the respondent that Paradigms report confirmed its
    concerns and that it would not approve the requested changes unless the
    respondent agreed to provide either (i) a parking booth at the parking lot
    entrance with a full-time attendant; or (ii) a full-time security officer who
    would patrol the area with the parking spots.

[21]

The respondent was willing to hire a security guard but only if it was
    no longer required to make contributions to the security fees portion of the
    common elements expenses or if the appellant was willing to share the costs of
    the additional guard. The Board refused this proposal and noted that it did not
    have the legal authority to exempt the respondent from its obligation to pay
    common elements expenses.

[22]

Ultimately, the respondent suggested that it was willing to undertake a
    number of measures at its expense to attenuate the increased risk. However, it
    was unwilling to hire a full-time dedicated security guard. In the Boards view,
    the measures proposed by the respondent were insufficient. It continued to
    insist that the respondent hire a security guard before it would approve the
    requested changes.

[23]

In response, the respondent brought this application in May 2014, alleging
    that the appellants refusal to approve the requested changes was unfairly
    prejudicial and unfairly disregarded its interests, contrary to s. 135 of the
Act
.
    An owner, a declarant or a mortgagee of a unit may make an application under s.
    135(2). It provides as follows:

On an application, if the court determines that the conduct of
    an owner, a corporation, a declarant or a mortgagee of a unit is or threatens
    to be oppressive or unfairly prejudicial to the applicant or unfairly
    disregards the interests of the applicant, it may make an order to rectify the
    matter.

[24]

The parties subsequently asked Paradigm to prepare an updated assessment
    report without commenting on the addition of a security guard on the premises.
    In that updated assessment, Paradigm  qualified its original advice:

While physical surveillance such as uniformed Security Officers
can
be one of the best examples of a deterrent
    that can be considered for any property, by
no means is it
    the only option available
to property management. Security
    considerations must be relative to existing budgets and sometimes simple
    physical changes, as mentioned previously in this report can be equally
    effective tools for security and safety. [Emphasis in original.]

[25]

Following receipt of the second Paradigm report, the appellant arranged
    for its own security assessment by David A. Black, a certified protection professional.
    His report (the Black report) opines as follows:

On site security guards, dedicated to any pay and display
    parking areas are critical in reducing the level of risk for both the high
    priority and medium level risks associated with the Pay and Display as
    identified above. The proprietary guards already on site work alone and would
    leave other duties unattended should they have to be responsible for public
    parking.

3.

The
    Application Judges Decision

[26]

As noted, the respondent brought an application for (i) a declaration
    under s. 135 of the
Act
that the appellants refusal to permit the
    respondent to make the desired changes was unfairly prejudicial and unfairly
    disregarded the respondents interests; and (ii) an order prohibiting the
    impugned conduct. The respondent had also brought a last-minute claim seeking
    damages, but that issue was deferred to a later date.

[27]

The application judge dealt with the application in two stages. First,
    he determined whether the appellants conduct had infringed s. 135 of the
Act
:
3716724 Canada Inc. v. Carleton Condominium No. 375
, 2015 ONSC 6626,
    63 R.P.R. (5th) 57.

[28]

The application judge concluded that the changes requested by the
    appellants constituted additions, alterations or improvements to the common
    elements and, therefore, needed the Boards approval under s. 98 of the
Act
.
    The respondent has not cross-appealed that finding.

[29]

Then the application judge turned to s. 135 of the
Act
. He did
    not explicitly refer to the applicable two-part test, namely that the claimant
    must establish (i) a breach of their reasonable expectations; and (ii) that the
    impugned conduct amounts to oppression, unfair prejudice, or unfair
    disregard:
Metropolitan Toronto Condominium Corporation No. 1272 v. Beach
    Development (Phase II) Corporation
, 2011 ONCA 667, 285 O.A.C. 372, at
    para. 6. However, neither party argues that the application judge failed to
    identify the correct test and, when his reasons are read as a whole, it is
    clear that he considered this two-part test.

[30]

The application judge easily found, at para. 32, that the respondents plan
    to operate a short-term parking facility in the condominium [was] a reasonable
    expectation. According to the application judge, the real issue was whether
    the Boards decision not to permit the [respondent] to do so disregards that
    expectation unfairly.

[31]

Citing
Niedermeier v. York Condominium Corp., No. 50
(2006), 45
    R.P.R. (4th) 182 (S.C.), he accepted that to unfairly disregard the interests
    of a complainant means to ignore or treat the interests of the complainant as
    being of no importance. Some prejudice or disregard is acceptable, provided
    that it is not unfair. This statement of the law is not at issue on this
    appeal.

[32]

The application judge had no doubt that the Boards concerns were
    reasonable. However, he concluded, at para. 37, the appellant was not being
    reasonable by insisting on a full-time security guard.

[33]

While acknowledging that a dedicated, full-time security guard would be
    the best option, the application judge found that based upon the evidence it
    was not a viable option. And, he further noted, it was not the only option as the
    respondent had put forward a combination of other proposals that significantly
    [lowered] the safety risks to a point at whichinsisting [on] a full-time
    security guard becomes unreasonable: para. 39. Given the application judges
    conclusion that the measures proposed by the respondent should have been
    sufficient for the Board, he decided that insisting that the respondent hire a
    prohibitively expensive full-time security guard unfairly disregarded its interests.

[34]

The application judge rejected the respondents argument that
    designating the proposed changes as substantial demonstrated bad faith on the
    part of the appellant. The respondent did not cross-appeal that finding.

[35]

The application judge, after receiving further submissions, addressed
    the issue of remedy:
3716724 Canada Inc. v. Carleton Condominium No. 375
,
    2016 ONSC 1296, 63 R.P.R. (5th) 73. As the Board had elected to treat the
    proposed changes as substantial, and given that the application judge had
    decided not to interfere with that decision, ordinarily a vote of the unit
    owners would be required.  However, the application judge ordered that the
    respondent should be permitted to make the changes without having the unit
    owners vote on them, notwithstanding the requirements of ss. 98(1)(c) and 97(4)
    of the
Act
.

4.

issues
    on appeal

[36]

As noted, I do not find it necessary to address all of the issues raised
    by the appellant. I will be addressing the following two issues:

I.

Did
    the application judge rely on evidence not properly before him?

II.

Did the
    application judge err in concluding that the appellant unfairly disregarded the
    respondents interests?

5.

Did the Application Judge Rely on Evidence not
    Properly Before him?

[37]

The appellants first argument is that the application judges decision
    relied on evidence that he should not have considered. It argues that the
    financial information the application judge relied on could only be found in
    the supplementary affidavit of Steve Heafey, sworn October 2, 2015 (the Heafey
    Affidavit). That affidavit was related to the respondents claim for damages,
    which the parties agreed would be adjourned to a later day. The appellant also
    moves to admit fresh evidence in support of its position.

[38]

In my view, the fresh evidence should be admitted and the appeal should
    be allowed on this ground.

5.1.

Fresh Evidence

[39]

The proposed fresh evidence is an affidavit of Melinda Andrews, sworn
    June 29, 2016. This evidence establishes the following:

·

The respondent served the appellant with an amended notice of
    application and the Heafey Affidavit on October 2, 2015. These materials
    incorporated a claim for the respondents lost profits.

·

Counsel for the appellant communicated that she would be asking
    for an adjournment, as she did not have enough time to respond to the Heafey
    Affidavit or conduct examinations. As a result, the parties agreed to bifurcate
    the issues.

·

Counsel for the respondent filled an Application Conformation
    form on October 9, 2015, which did not include the Heafey Affidavit or the
    Amended Notice of Application among the documents that the presiding judge
    would be referred to.

[40]

The respondent concedes that the application judge was advised at the
    hearing that the parties had agreed to defer the issue of damages and that he
    should accordingly not consider the Heafey Affidavit.

[41]

As noted by this court in
1117387 Ontario Inc. v. National Trust
    Company
, 2010 ONCA 340, 262 O.A.C. 118, at para. 41, where the proposed
    fresh evidence raises issues [about] the validity of the process of the
    hearing, the interests of justice require its admission. Therefore, I would
    grant the appellants motion and admit the fresh evidence.

5.2.

Application Judge Relied on Evidence not Properly Before Him

[42]

The application judges findings that a full-time security guard was not
    a viable option and would be prohibitively expensive underpin his ultimate
    conclusion that the appellant unfairly disregarded the interests of the
    respondent.

[43]

The evidence relied upon by the application judge in making these findings
    was contained in the untested Heafey Affidavit, which the parties had advised
    the application judge not to consider. The only evidence regarding the
    economics of the respondents business that was properly before the application
    judge, and that was before the Board when it made its decision, was that (i) renting
    the parking spots on a monthly basis was no longer profitable for the
    respondent; and (ii) a short-term parking operation would be far more
    profitable. Without the Heafey Affidavit, the application judge could not have
    arrived at the conclusions that underpin his decision.

[44]

Therefore, I agree with the appellant that the application judges
    decision turned on evidence not properly before him and, on that basis, cannot
    stand.

6.

Did
    the application judge err in concluding that the appellant unfairly disregarded
    the respondents interests?

[45]

Even if the evidence contained in the Heafey Affidavit was properly
    before the court, the appellant argues that the application judge erred in
    finding in favour of the respondent. It argues that he erred by assessing the Boards
    decision on a subjective basis and substituting his judgment for that of the Board,
    which had been exercised following a fair process and having regard to
    reasonable safety concerns.

[46]

I agree with this submission.

6.1.

Boards Decision is owed Deference

[47]

The jurisprudence has occasionally recognized that decisions rendered by
    boards of condominium corporations should be shown some deference: see, for
    example,
London Condominium Corporation No. 13 v. Awaraji
, 2007 ONCA
    154, 221 O.A.C. 240, at para. 6. However, the topic has not been addressed in
    great detail.

[48]

The issue has been canvassed extensively in the corporate law context. In
    reviewing decisions rendered by the directors and officers of for-profit
    corporations, Canadian courts have been guided by the business judgment rule.
    This rule recognizes the autonomy and integrity of corporations, and the fact
    that directors and officers are in a far better position to make decisions
    affecting their corporations than a court reviewing a matter after the fact:
UPM-Kymmene
    Corp. v. UPM-Kymmene Miramichi Inc.

(2004), 250 D.L.R. (4th) 526
    (Ont. C.A.), at para. 6; see also
Brant Investments Ltd. v. KeepRite Inc.
(1991), 3 O.R. (3d) 289 (C.A.), at p. 320. Therefore, where the rule applies, a
    court will not second-guess a decision rendered by a board as long as it acted
    fairly and reasonably:
Maple Leaf Foods Inc. v. Schneider Corp.
(1999), 42 O.R. (3d) 177 (C.A.), at p. 191.

[49]

This rule has been reinforced in numerous decisions over the years.
    Significantly, in
BCE Inc. v. 1976 Debentureholders
, 2008 SCC 69,
    [2008] 3 S.C.R. 560, the leading case on the oppression remedy, the Supreme
    Court of Canada explained that a court reviewing a boards decision must show
    some deference, at paras. 40 and 111-112:

The business judgment rule accords deference to a business
    decision, so long as it lies within a range of reasonable alternatives. It
    reflects the reality that directors, who are mandated under s. 102(1) of the
CBCA
to manage the corporations business and affairs, are often better suited to
    determine what is in the best interests of the corporation. This applies to
    decisions on stakeholders interests, as much as other directorial decisions.

[The oppression remedy] claim must be considered from the
    perspective of the duty on the directors to resolve conflicts between the
    interests of corporate stakeholders in a fair manner that reflected the best
    interests of the corporation.

Provided that, as here, the directors decision is found to
    have been within the range of reasonable choices that they could have made in
    weighing conflicting interests, the court will not go on to determine whether
    their decision was the perfect one. [Citations omitted.]

[50]

While the business judgment rule was developed in the context of
    for-profit businesses, it has been applied to not-for-profit corporations as
    well: see, for example,
Hadjor v. Homes First Society
, 2010 ONSC 1589,
    70 B.L.R. (4th) 101, at paras. 47-52. And courts in other jurisdictions have
    applied the rule when reviewing decisions rendered by condominium boards: see,
    for example,
Yusin v. Saddle Lakes Home Owners Assn
, 73 A.D.3d 1168 (N.Y.
    App. Div. 2010); and
Black v. Fox Hills N. Cmty. Assn
, 599 A.2d 1228
    (Md. Ct. Spec. App. 1992).

[51]

Moreover, the rationale underlying the business judgment rule in the corporate
    law context is also applicable to condominium corporations. As representatives elected
    by the unit owners, the directors of these corporations are better placed to
    make judgments about their interests and to balance the competing interests engaged
    than are the courts. For instance, in this case the security concerns arose in
    part as a result of the condominiums location, and the Board members
    knowledge of that area is clearly an advantage that they enjoy over any court
    subsequently reviewing their decision.

[52]

The
Act

provides that the directors are the ones
    responsible for managing the affairs of a condominium corporation: s. 27(1). They
    are also required to act honestly and in good faith, and to exercise the care,
    diligence and skill that a reasonably prudent person would exercise in comparable
    circumstances: s. 37(1). Like their counterparts in corporate statutes, these
    provisions suggest that courts should be careful not to usurp the functions of
    the boards of condominium corporations.

[53]

Therefore, to summarize, the first question for a court reviewing a
    condominium boards decision is whether the directors acted honestly and in
    good faith and exercised the care, diligence and skill that a reasonably prudent
    person would exercise in comparable circumstances. If they did, then the
    boards balancing of the interests of a complainant under s. 135 of the
Act
against competing concerns should be accorded deference. The question in such
    circumstances is not whether a reviewing court would have reached the same
    decision as the board. Rather, it is whether the board reached a decision that
    was within a range of reasonable choices. If it did, then it cannot be said to
    have unfairly disregarded the interests of a complainant.

6.2.

The Boards Decision was Reasonable

[54]

Here, the appellant acted honestly and in good faith. The application
    judge rejected the respondents assertion that the Board demonstrated a lack of
    good faith by deeming the changes substantial. Beyond that rejected challenge,
    the respondent has not impugned either the competence of the Board or the
    process leading up to its decision. The Board was transparent as to the nature
    of its concerns. It requested that the respondent obtain a security audit and considered
    that audit when it was produced. The record reveals that the Board considered the
    respondents request and communications on a number of occasions.

[55]

Therefore, in this case, the real question was whether the Board reached
    a decision that was within a range of reasonable choices. Respectfully, the application
    judge did not focus on that question. In my view, he found in favour of the
    respondent because he disagreed with the balance between competing interests
    struck by the Board.

[56]

The evidence indicated that the condominium is located in a high-crime
    area and the application judge accepted that the Boards concerns were
    reasonable. Both the first Paradigm report and the Black Report suggested that a
    security guard should be hired if the changes the respondent requested were
    made. The application judge agreed that this was the best option.

[57]

While I do not disagree with the application judges finding that the respondent
    had a reasonable expectation that it would be able to operate a short-term
    parking facility in the condominium, it is important to note the impact of the
    Boards decision on that expectation. The Board did not prohibit the appellant
    from engaging in this business or changing its business model. The Board merely
    put in place certain preconditions for approving changes to the condominiums
    common elements in order to address the increased security risk that would be
    caused by the changes that the respondent wanted to make.

[58]

The Board considered the respondents desire to increase its profits,
    and balanced that interest against the competing security interests of other
    unit owners. It also considered the security implications for persons using the
    parking spots. The term balancing in these circumstances is used only as a
    metaphor because the Board was not balancing like against like, but competing
    interests of different natures- the economic interests of the respondent and
    the personal security interests of others. A condominium board sometimes will
    be faced with different interests that cannot be reduced to a common unit of
    measurement, yet still must attempt to balance them.

[59]

In this case, the Boards decision had the effect of rendering the
    respondents proposal less profitable. But that does not mean that the Board
    unfairly disregarded the interests of the respondent. The Board was entitled,
    indeed required, to consider the impact of the changes on the interests of other
    unit owners. And as the deemed occupier of the common elements of the
    condominium, it was also entitled to consider the security implications for
    users of the common elements. It did not ignore or treat the interests of the
    respondent as being of no importance. It simply  in good faith and after a
    fair process  determined that legitimate and reasonable competing interests
    were more important. Its decision not to approve the requested changes to the
    common elements unless the respondent hired a security guard was within a range
    of reasonable choices.

[60]

As I have said, the evidence in the Healey Affidavit was not properly
    before the application judge. Nor was it before the Board when it decided not
    to approve the requested changes to the common elements.  However, even if it
    had been, I am of the view that a decision requiring a security guard as a
    condition of approving the changes to the common elements would have fallen within
    a range of reasonable alternatives. On this record, it was open to the Board to
    conclude that the increased security risk outweighed the respondents
    commercial interests.

7.

Disposition

[61]

I would admit the fresh evidence, allow the appeal, and dismiss the
    application against the appellant. I would set aside the costs below in favour
    of the respondent and instead order that the same amount be payable to the
    appellant. And I would award the appellant its costs of the appeal, fixed at $9,500,
    inclusive of HST and disbursements.

Released:  AH  AUG 30 2016

Alexandra Hoy
    A.C.J.O.

I agree David M. Brown
    J.A.

I agree Grant Huscroft
    J.A.

Appendix A
Extracts from Declaration for CC 375 Registered on April 23, 1987

3.2
Occupation and Use
.
The
    occupation and use of the Units shall be in accordance with the following
    restrictions and stipulations:

(b) Commercial Units with the exception of Unit 27, Level
    1 shall be occupied and used only for those commercial uses permitted
    (including legal nonconforming uses) by the City of Ottawa restricted area
    (zoning) by-laws respecting the Lands as at the date of registration of the
    Declaration and for no other purpose.

(c) Parking Units located on Levels B, C and D shall be
    used and occupied only for private motor vehicle purposes, and without
    restricting any wider definition of the word motor vehicle as may be imposed
    by the Board of directors, the term motor vehicle shall be deemed to include
    a personal motor vehicle, station wagon and motorcycle as customarily
    understood.  The Owner of each Parking Unit shall keep such Unit in a clean and
    slightly condition.  The Owner of a double Parking Unit may park two vehicles
    thereon.  The full use and occupancy of Unit 8, Level A may be restricted to
    provide access to the Corporation through the Unit to the telephone room
    adjacent thereto.
All
    Parking Units owned or leased by the Owner of Unit 27, Level 1 and located on
    Level A of the Parking Garage may be used for a commercial parking business for
    the leasing of individual parking spaces for such period of time as the Owner,
    its assigns, tenants or sub-tenants of such Parking Units may in its sole
    discretion determine provided that not less than 30 such Parking Units are made
    available at all times for hourly or daily parking.
The parking
    rates which may be charged for such hourly or daily parking shall not exceed
    the rate charged from time to time by other similar commercial type parking
    operations in the City of Ottawa.  No Parking Unit located on Levels B, C and D
    shall be used for commercial parking business.

(d)
Unit 27, Level 1 shall be occupied and used for the operation of a
    commercial parking business and any incidental use thereto.

4.2.4
Signs
.

(iv)  The Owner of Unit 27, Level 1 may affix signs to,
    in or over the interior and exterior of such Unit for the purpose of
    advertising parking and parking rates.  The Owner of Unit 27, Level 1 may place
    a portable sandwich board sign advertising parking hours and rates at the
    George Street entrance to the parking garage.