COURT OF APPEAL FOR ONTARIO

CITATION: Condos and Castles Realty Inc. v. Janeve Corp.,
    2015 ONCA 466

DATE: 20150624

DOCKET: C59756

Juriansz, Lauwers and Huscroft JJ.A.

BETWEEN

Condos and Castles Realty Inc.

Applicant (Appellant)

and

Janeve Corp.

Respondent (Respondent)

Alfred S. Schorr, for the appellant

Andrea M. Habas, for the respondent

Heard: June 3, 2015

On appeal from the judgment of Justice Paul Perell of the
    Superior Court of Justice, dated November 17, 2014, reported at 2014 ONSC 6640.

Lauwers J.A.:

Overview

[1]

The application judge dismissed the appellants application for a declaration
    that it had a right-of-way over a private laneway behind some buildings on King
    Street West in Toronto. The application judge concluded that the appellants
    predecessors in title had not acquired a prescriptive easement over the laneway
    on the basis that there was more than 20 years of use of the private
    right-of-way but the use was by licence and not as of right.

[2]

There is no evidence to support the application judges factual finding
    that the respondents predecessor in title permitted his neighbours to cross over
    his property by way of licence and not as of right.  I would therefore allow the
    appeal.

The Factual Context

[3]

The physical layout of the relevant properties is set out in the
    following sketch, found in the application judges reasons at para. 21:

[4]

The appellant owns 842 King Street West, which abuts the right-of-way
    leading to the public lane depicted in the sketch. The respondent owns the four
    properties known municipally as 844-850 King Street West, as well as the
    right-of-way directly behind them. The issue is whether the appellants
    predecessors in title to 842 King Street West acquired from the respondents
    predecessor in title a prescriptive easement over the depicted right-of-way.

The Legal Principles

[5]

The appellant brought its application for a prescriptive easement on the
    basis that its predecessors in title exercised a continuous, uninterrupted,
    open and peaceful use of the private laneway as a right-of-way for vehicular
    and other traffic from the rear of its property westward to the public laneway,
    without the owners express consent, for over 20 years before the first
    registration of the property in the
Land Titles System
in 2003, taking
    into account s. 31 of the
Real Property Limitation Act
, R.S.O. 1990,
    c. L.15.

[6]

The appellants legal burden was to demonstrate a continuous,
    uninterrupted, open, and peaceful use of the land, without objection by the
    owner, as the application judge noted at para. 38, citing
394 Lakeshore
    Oakville Holdings Inc. v. Misek
, 2010 ONSC 6007, 98 R.P.R. (4th) 21. He
    added:

The evidence required to establish title by prescription will
    vary with the nature of the user. Where the use is notorious and the owner of
    the servient tenement makes no objection, then his or her acquiescence to the
    use as a right of the dominant tenement can more readily be inferred.

[7]

The application judge drew particularly on
Henderson v. Volk
, 35
    O.R. (2d) 379, [1982] O.J. No. 3138 (C.A.). He quoted and relied on para. 20 of
    this decision
,
where Cory J.A said
:

It is right and proper for the Courts to proceed with caution
    before finding that title by prescription or by the doctrine of lost modern
    grant is established in a case such as this. It tends to subject a property
    owner to a burden without compensation. Its ready invocation may discourage acts
    of kindness and good neighbourliness; it may punish the kind and thoughtful and
    reward the aggressor. It is reasonable to require those seeking to rely upon
    the
Limitations Act
or the doctrine of lost modern grant to establish
    by clear evidence both a continuous use and acquiescence in such use by the
    owner of the servient tenement.

[8]

With respect, however, these words must be understood in the context.
Henderson
    v. Volk
involved pedestrian use of property between two residences. Cory
    J.A. explained that the distinction between vehicular and pedestrian traffic
    was significant. He said at paras. 18-19:

The evidence required to establish title by prescription will
    vary with the nature of the user. The use of a passageway by noisy delivery
    trucks would be hard to hide. The use of a lane for passage by tractor trailer
    rigs with motors roaring and air brakes hissing would be difficult to disguise.
    In those instances the owner of the servient tenement can readily be taken to
    know of the user of his property. If he makes no objection then his
    acquiescence to the use can readily be inferred.

It is different when a party seeks to establish a right-of- way
    for pedestrians over a sidewalk. In those circumstances the user sought to be
    established may not even be known to the owner of the servient tenement. In
    addition, the neighbourly acquiescence to its use during inclement weather or
    in times of emergency such as a last minute attempt to catch a bus, should not
    too readily be accepted as evidence of submission to the use.

[9]

In my view, the inconspicuous nature of pedestrian traffic distinguishes
Henderson

from this case, which concerns vehicular traffic. In
    a case of straightforward vehicular use of a laneway as a right-of-way, the
    applicable principle is more direct, as Laskin J.A. pointed out in
1043
    Bloor Inc. v. 1714104 Ontario Inc.
, 2013 ONCA 91, 114 O.R. (3d) 241, at
    para. 105: [T]he courts ought reasonably to protect the dominant owners
    reliance interest where the usage has been open and uninterrupted for many
    years and where the evidence clearly shows that the servient owner has
    acquiesced in that usage.

[10]

There is
    no doubt that the burden of proof is and remains on the claimant in such cases,
    but the evidentiary burden may shift as the evidence unfolds. That is what
    occurred in this case.

The Evidence

[11]

All five
    subject properties. 842-850 King Street West, were part of a subdivision
    registered in 1874. On November 8, 1982, David Chan registered four of the
    properties, 844-850 King Street West, under survey Plan 63R-2752. The
    application judge noted, at para. 23 :

It can be inferred from the registration of survey Plan
    63R-2752 that Mr. Chan was positioning himself to sell the four properties
    comprising 844-850 King St. West as four discrete properties. Of these four
    properties, 850 King St. West had access to the public lane, and to afford the
    remaining three properties access to the public laneway, Mr. Chan created
    registered mutual private rights-of-way.

[12]

When
    survey Plan 63R-2752 was registered in 1982, Agostino and Maria Lopes (now
    deceased) were the registered owners of 842 King Street West, the neighbouring
    property to the east. In December 2001, the Lopes sold the property to Patricia
    Pelech, who sold it to Inner City Films, the respondents immediate predecessor
    in title, in September 2005.

[13]

The trial
    judge observed, at para. 24, that 842 King St. West was a family home, and
    there is evidence that family members parked their vehicles at the rear of 842
    King St. West and used the private right-of-way to access the public laneway.

[14]

Morry Katz
    was a tenant in the house at 844 King St. West from 1982 or 1983 until 2010. His
    son, Michael, then occupied the house until 2012. The Lopes family were the
    Katz's neighbours. Mr. Morry Katz testified that he saw various members of the
    Lopes family drive their vehicles across the private-right-of-way. His own
    belief was that the private right-of-way was a public road. The application
    judge noted, at para 27:

There is evidence from Mr. Morry Katz and from the documents
    filed on the Application that indicates that there was a garage for cars on 842
    King St. West but that the garage was removed, probably by Ms. Pelech.

[15]

The
    application judge also noted, at para 41, that the real estate listing
    agreement on the sale of 842 King St. West from Inner City Films to the
    appellant stated there was a right-of-way to parking at the rear of the
    property.

Analysis

[16]

After
    reciting the foregoing evidence, the application judge found there was more
    than 20 years use of the private right-of-way but he went on to add at para.
    40:

but the use was by licence and not as of right. It appears
    that Mr. Chan permitted his neighbours to cross over his property and
    there was no reason for him to think that Ms. Pelech and the Lopes were using
    his private right-of-way as if they had an ownership right to do so.

[17]

Mr. Chan
    did not testify and there was no evidence about his attitude about the
    appellants use of the laneway. The respondent submitted the appellant could
    not establish its case without calling Mr. Chan as a witness. I disagree. Once
    the appellant had proven facts that support the inference of acquiesce in 20
    years of use, the evidentiary burden passed to the appellant to lead evidence
    to rebut the inference by proving the use was by permission.

[18]

The
    following facts are sufficient to shift the evidentiary burden in this case:

·

the longstanding physical layout of the area by which 842 King
    Street West abuts the laneway Mr. Chan turned into a registered right-of-way;

·

the existence of a garage accessible only over the right-of-way
    was located at the rear of 842 King Street West for many years until it was
    torn down by Ms. Pelech;

·

the plain and obvious vehicular use of the right-of-way by the
    occupants of 842 King Street West, as described by witnesses who were present
    at the time;

·

the absence of any evidence of objection or exercise of control
    by Mr. Chan; and

·

the documentary evidence that the owners of 842 King Street West
    considered that they enjoyed the right-of-way as noted in listing agreements
    over the years.

Nor does the application judge explain why this
    evidence did not call for a response from the respondents.

[19]

In my
    view, Mr. Chans acquiescence can be readily inferred from this evidence. A
    fine line may well exist between acquiescence and permission in many cases:
1043
    Bloor Inc
.
, at para. 100. However, in this case, all the evidence
    points to acquiescence. There is no evidence of permission.

[20]

The
    relationship between acquiescence and permission, and the shifting evidentiary
    burden, was well laid out by the Nova Scotia Court of Appeal in
Mason v.
    Partridge
, 2005 NSCA 144, 261 D.L.R. (4th) 315. Justice Oland held that, in
    deciding whether Partridge had granted Mason permission to use an old logging
    road to cross over Partridge's land, the trial judge erred in law by failing to
    differentiate between acquiescence and permission. At para. 30, Oland J.A.
    noted that the trial judge erred by failing to recognize that absence of
    consent can be established by evidence of acquiescence or evidence sufficient
    to raise an inference of acquiescence. At para. 31, citing
Gale on
    Easements
,
17th ed. (London: Sweet & Maxwell, 2002), at p. 215,
    she called acquiescence the "foundation of prescription" and stated
    that "passive toleration is all that is required for acquiescence".

[21]

This
    accords with the principles in this courts statement in
Monaghan v. Moore
(1996), 31 O.R. (3d) 232, [1996] O.J. No. 3900, at para. 8, citing
Dalton
    v. Angus
(1881), 6 App. Cas. 740 at pp. 773-74 (H.L.). Doherty J.A said:

[I]n my opinion, the whole law of prescription and the whole
    law which governs the presumption or inference of a grant or covenant rest upon
    acquiescence. The Courts and the Judges have had recourse to various expedients
    for quieting the possession of persons in the exercise of rights which have not
    been resisted by the persons against whom they are exercised, but in all cases
    it appears to me that
acquiescence and nothing else is the principle upon
    which these expedients rest
. It becomes then of the highest importance to
    consider of what ingredients acquiescence consists. In many cases, as, for
    instance, in the case of that acquiescence which creates a right of way, it
    will be found to involve, 1st, the doing of some act by one man upon the
    land of another; 2ndly, the absence of right to do that act in the person doing
    it; 3rdly, the
knowledge of the person affected by it that the act is done
;
    4thly, the
power of the person affected by the act to prevent such act
either by act on his part or by action in the Courts; and lastly, the
abstinence
    by him from any such interference
for such a length of time as renders it
    reasonable for the Courts to say that he shall not afterwards interfere to stop
    the act being done. [Original emphasis omitted; emphasis added.]

[22]

In
Mason
,
    Oland J.A. added, at para. 45:

[O]nce there is proof of acquiescence in acts of user which are
    of such a character as to support a claim of right, the claimant has
    established that the acts were as of right
unless the owner points to some
    "positive acts" on his or her part which either expressly or
    impliedly grant permission
.
Here, there was no evidence that the
    owner, at any time, took any positive steps to prevent the use in question or
    did anything else from which a grant of permission reasonably could be implied.
    [Emphasis added.]

[23]

In
MacNeil
    v. MacNeil
, 2014 NSSC 171, 344 N.S.R. (2d) 350, Edwards J. considered and
    applied
Mason
. He noted, at para. 26, Acquiescence is not implied
    permission; instead acquiescence is acceptance of actions known to the property
    owner. He added, at para. 27, that the burden of proving acquiescence falls
    to the claimant seeking prescriptive rights. Upon proof the true owner
    acquiesced to the use of his property,
the burden shifts to the owner to
    establish some positive act of permission
 (emphasis added).

[24]

In
    conclusion, the evidentiary record is that the appellants predecessors in title
    had used the laneway in a continuous, uninterrupted, open and peaceful manner
    without objection by Mr. Chan for over 20 years. This evidence gives rise to an
    inference of acquiescence by Mr. Chan. As there was no evidence to rebut the
    inference the application should have been allowed.

Disposition

[25]

I would
    allow the appeal, set aside the judgment of the application judge, and issue a
    declaration that the appellant has an easement (right-of-way) over the
    northerly portions of Janeve Corp.'s properties identified by Parcel
    Registration PIN numbers 21244-0307 (LT) and 21244-0305 (LT) and 21244-0306
    (LT), to a width equal to that of the laneway to the west of the aforesaid
    properties.

[26]

I would order
    appeal costs payable to the appellant in the amount of $10,000, as agreed, and
    reverse the costs award made by the application judge, making it payable to the
    appellant.

P. Lauwers J. A.

Released: June 24, 2015 PL                       I
    agree R.G. Juriansz J.A.

I
    agree Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Economical Mutual Insurance Company v. State Farm
    Mutual Automobile Insurance Company, 2015 ONCA 485

DATE: 20150626

DOCKET: C59972

MacFarland, Lauwers and Huscroft JJ.A.

IN THE MATTER OF the
Insurance
    Act
, R.S.O. 1990, c. I.8, as amended

AND IN THE MATTER OF the
Arbitration Act
, S.O. 1991, c. 17, as amended

AND IN THE MATTER OF an
    Arbitration

BETWEEN

Economical Mutual Insurance Company

Applicant

(Appellant on Appeal)

and

State Farm Mutual Automobile Insurance Company

Respondent

(Respondent on Appeal)

Daniel Strigberger and Monika Bolejszo, for the
    appellant

Mark K. Donaldson and Carlie Flynn, for the respondent

Heard and released orally: June 19, 2015

On appeal from the order of Justice Thomas R. Lederer of
    the Superior Court of Justice, dated October 24, 2014.

ENDORSEMENT

[1]

The parties here agree that if the broker was negligent in cancelling
    the policy effective July 26, Economical is bound.

[2]

The appellant argues that the arbitrator asked the wrong question when
    he asked whether changes made to Economical s policy at the request of Hasan
    were properly effected by the broker.  He argues that the proper question
    should have been: What did she instruct the broker to do?

[3]

In our view, on the facts of this case, it doesnt matter. The
    arbitrator did not accept the brokers evidence when he said: she must have
    given it to me in relation to the July 26 date.

[4]

Her evidence was she wanted full coverage until she left. While much of
    the arbitrators reasoning is seriously flawed, he did say clearly that he
    preferred Mrs. Hasans evidence to Pannettas and concluded that the broker was
    negligent in telling the insurer coverage was to be cancelled effective July
    26.

[5]

The record before the arbitrator supports this finding. While it is true
    that the issue could have gone the other way, this was a matter for the
    arbitrator.

[6]

The appeal is dismissed.

[7]

On the agreement of counsel costs are to the respondent fixed in the sum
    of $8,500 inclusive of disbursements and H.S.T.

J.
    MacFarland J.A.

P.
    Lauwers J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Fairmont Hotels Inc. v. Canada (Attorney General),
    2015 ONCA 441

DATE: 20150617

DOCKET: C59942

Simmons, Cronk and Blair JJ.A.

BETWEEN

Fairmont
    Hotels Inc., FHIW Hotel Investments (Canada) Inc.

and FHIS
    Hotel Investments (Canada) Inc.

Applicants

(Respondents in
    Appeal)

and

Attorney General of Canada

Respondent

(Appellant)

Nancy Arnold and Diana Aird for the appellant

Chia-yi Chua, Geoff R. Hall and Brandon Siegal for the
    respondents

Heard: June 12, 2015

On appeal from the order of Justice Frank J.C. Newbould
    of the Superior Court of Justice, dated December 19, 2014.

ENDORSEMENT

[1]

The sole issue on this appeal is whether the application judge erred by
    granting the equitable remedy of rectification in the circumstances of this
    case.

[2]

At the end of the appellants oral argument, this court dismissed the
    appeal, with reasons to follow.  These are those reasons.

[3]

The appellant argues that the application judge, citing this courts
    decision in
Canada (Attorney General) v. Juliar
(2000), 50 O.R. (3d) 728
    (C.A.), leave to appeal to SCC refused, [2000] S.C.C.A. No. 621, misapplied the
    test for rectification by focusing exclusively on the respondent taxpayers
[1]
tax intentions and ignoring the prerequisite that, to obtain rectification, it
    must be demonstrated that the parties agreed as to the terms of the relevant
    contract, but recorded them incorrectly.  In the tax context, as applies here, the
    appellant says that this rectification prerequisite obliged the respondent to
    establish that it had settled on a concrete plan to meet its tax objectives,
    that is, on the means by which to realize its intended tax outcome, before any
    mistake in its implementation efforts were discovered.  To hold otherwise, the
    appellant submits, would be to sanction impermissible retroactive tax planning.

[4]

We do not accept this argument for the following reasons.

[5]

Based on the evidence before him, the application judge made the
    following key factual findings:

1)

the
    respondent had a continuing intention from 2002 onwards that its loan
    arrangements with Legacy would be carried out on a tax and accounting neutral
    basis through a plan whereby any foreign exchange gains would be offset by
    corresponding foreign exchange losses; and

2)

the
    respondent also had a continuing intention from 2006 onwards  after the change
    in control occurred  that the preferred shares of the two relevant companies
    the respondent, FHIW Hotel Investments (Canada)

Inc.

(FHIW), and
    the respondent, FHIS Hotel Investments (Canada) Inc. (FHIS)  would not be
    redeemed; and

3)

by
    reason of a mistake on the part of one of the members of the respondents
    senior management team, the preferred shares of FHIW and FHIS were redeemed in
    2007, triggering serious adverse, unintended tax consequences.

[6]

The application judge summarized these findings in this fashion, at
    para. 42:

In this case, the intention of Fairmont from 2002 was to carry
    out the reciprocal loan arrangements with Legacy on a tax and accounting
    neutral basis so that any foreign exchange gain would be offset by a
    corresponding foreign exchange loss.  When control of Fairmont changed in 2006
    that intention did not change and when the loan unwind occurred in 2007 that
    intention did not change.  By reason of a mistake on the part of Mr. Zahary,
    the preferred shares of FHIW Canada and FHIS Canada held by FHI were redeemed
    in 2007, which unbeknown to Mr. Zahary by reason of his mistake caused an
    unintended tax assessment.

[7]

In light of these findings, the application judge concluded, at para.
    43, that the respondent did not engage in retroactive tax planning after an
    audit conducted by the Canada Revenue Agency (the CRA).  Rather, the real purpose
    of the pertinent transaction in 2007 was not to redeem the preference shares of
    FHIW and FHIS but, rather, to unwind [the Legacy transactions] on a tax free
    basis.  However, preference share redemptions were mistakenly chosen as the
    means to do so.

[8]

In these circumstances, relying on this courts decision in
Juliar
,
    the application judge held that the respondent was entitled to rectify the
    relevant corporate resolutions to correct the mistaken share redemptions.  This
    result, the application judge noted, would avoid the imposition of an unintended
    tax burden that the respondent had sought to avoid from the outset, as well as
    an unintended tax revenue windfall to the CRA arising from the mistaken share
    redemptions.

[9]

On the factual findings of the application judge, set out above, and the
    binding authority of
Juliar
, we see no basis for intervention with the
    application judges discretionary decision to grant rectification.

[10]

Juliar
is a binding decision of this court.  It does not require that the party
    seeking rectification must have determined the precise mechanics or means by
    which the partys settled intention to achieve a specific tax outcome would be
    realized.
Juliar
holds, in effect, that the critical requirement for
    rectification is proof of a continuing specific intention to undertake a
    transaction or transactions on a particular tax basis.

[11]

In
    this case, on the application judges findings, the respondent had a specific
    and unwavering intention from the outset of its dealings with Legacy to ensure
    that the Legacy-related transactions were tax neutral and, to that end, that no
    redemptions of the relevant preference shares should occur.  Nonetheless, by mistake,
    the redemptions were authorized by corporate resolutions.

[12]

Contrary
    to the appellants argument, in these circumstances, it was unnecessary that
    the respondent prove that it had determined to use a specific transactional device
     loans  to achieve the intended tax result.  That the respondent mistakenly
    failed to employ an appropriate transactional device to achieve the intended
    tax result does not alter the nature of the respondents settled tax plan: tax
    neutrality in its dealings with Legacy and no redemptions of the preference shares
    in question.

[13]

At
    the end of the day, therefore,
Juliar
and the application judges
    factual findings, described above, are dispositive of this appeal.  It is not
    open to a single panel of this court to depart from a binding decision of this
    court.

[14]

The
    appeal is dismissed.  The respondent is entitled to its costs of the appeal
    fixed, as agreed by counsel, in the amount of $20,000, inclusive of
    disbursements and all applicable taxes.

Janet Simmons J.A.

E.A. Cronk J.A.

R.A. Blair J.A.

[1]
We will refer to all the respondents to this appeal, the Fairmont companies,
    collectively, as the respondent.


COURT OF APPEAL FOR ONTARIO

CITATION: Farid v.
    Porteous, 2015 ONCA 413

DATE: 20150608

DOCKET: C59758

Feldman, Hourigan and Benotto JJ.A.

BETWEEN

Muhammad Farid

Plaintiff (Appellant)

and

Lynn Irene Porteous

Defendant (Respondent)

Muhammad Farid, acting in person

Glenn Elliott, for the respondent

Heard: June 5, 2015

On appeal from the judgment of Justice Mark L. Edwards of
    the Superior Court of Justice, dated November 28, 2014.

APPEAL BOOK ENDORSEMENT

[1]

The appellant, Mr. Farid appeals the decision of the motion judge
    granting summary judgment dismissing his claim for specific performance and
    granting the counterclaim for damages resulting from a failed residential real
    estate transaction.

[2]

The appellant submits that the motion judge erred in his review of the
    evidence and that he was able to close the transaction.  His position is that
    the funding from his mortgage lender was not available because the respondents
    solicitor would not permit his mortgage broker to have access to the property on
    the day of closing. The appellant also submits that the motion judge erred in  awarding
    damages to the respondent on the counterclaim.

[3]

We would not give effect to either of these grounds of appeal.

[4]

The appellant did not file any evidence from his solicitor or his
    mortgage broker. The respondent filed an affidavit from her lawyer which
    contradicted the appellants position. On the evidence before the motion judge,
    we see no error in his conclusion that the appellant, through no fault of the
    respondent or her lawyer, was not able to close the transaction because he was
    not in funds.

[5]

We also see no error in the motion judges awarding of damages on the
    counterclaim. The damages are reasonable and flow from the breach of the Agreement
    of Purchase and Sale. In any event, the respondent was entitled to the entirety
    of the $5,000 deposit and only $4,200 was awarded in damages.

[6]

The appeal is dismissed with costs fixed in the amount of $6,000 to the
    respondent, inclusive of disbursements and H.S.T.


COURT OF APPEAL FOR ONTARIO

CITATION: Fritz Marketing Inc. v. Metz, 2015 ONCA 410

DATE: 20150609

DOCKET: C59617

Feldman, Hourigan and Pardu JJ.A.

BETWEEN

Fritz Marketing Inc.

Respondent (Plaintiff)

and

Joseph Henry Metz
, Elmira
    Bag & Burlap Ltd.,
Ontario Bag Company Ltd.
and GX Packaging Canada Ltd.

Appellants (Defendants)

Wade W. Sarasin, for the appellants

James R. Smith, for the respondent

Heard: June 3, 2015

On appeal from the judgment of Justice Price of the Superior
    Court of Justice, dated October 10, 2014, and amended October 24, 2014.

ENDORSEMENT

[1]

The appellant, Joseph Henry Metz, appeals from the order of Price J.
    granting summary judgment against him personally for amounts owing on invoices
    for bags supplied by the respondent to Mr. Metzs two companies, Elmira Bag
    & Burlap Ltd. and GX Packaging Canada Ltd.  He submits that the motion
    judge erred by making findings of fact that determined liability based only on
    the motion record, which included cross-examinations on the affidavits filed,
    and without resorting to the powers under Rule 20 to order the trial of an
    issue or to hold a mini-trial on genuine issues for trial.

[2]

He submits that there were two genuine issues that required a trial: 1)
    whether the appellant had agreed to be personally liable for the debts of the
    companies; and 2) whether he had agreed that the monies that were paid in
    respect of the new purchases made on behalf of two of the companies, Elmira Bag
    & Burlap Ltd. and GX Packaging Canada Ltd, were to be credited first to the
    old debt of another of the companies, Ontario Bag Company Ltd. Although he
    disputed any direct connection with Ontario Bag, he acknowledged his connection
    on cross-examination.

[3]

In our view, the motion judge made no error either in the procedure he
    followed or in his conclusions based on the record.

[4]

His reasons refer to the evidence that amply supports his conclusions
    that the appellant agreed to be personally liable for the past and future debts
    of his companies in order to allow him to order and receive more bag inventory
    from the respondent.  Further, the record, which includes extensive documents
    as well as affidavits and cross-examination on them, is clear that the
    appellant knew and understood that the outstanding Ontario Bag Company Ltd.
    debt was being paid down before the new invoices.

[5]

We agree with the motion judges conclusion that there was no need to
    order the hearing of any further evidence on the issues.

[6]

The appellant submits that the motion judges decision did not dispose
    of the counterclaim for damages for defective bags. Although the motion judge
    did not make final orders dismissing both the appellants counterclaims and the
    respondents claims against Elmira Bag & Burlap Ltd. and GX Packaging
    Canada Ltd on the invoices, it is clear from his reasons that he made those
    findings and that his intention was that the summary judgment order would
    determine and deal with all issues raised by the parties. His conclusion that
    there was no sustainable set-off for defective bags was unassailable.  If an
    amendment to the order is needed, the respondent can obtain it in the Superior
    Court.

[7]

The appeal is therefore dismissed, with costs fixed in the agreed amount
    of $19,000, inclusive of disbursements and HST.

K. Feldman J.A.

C. W. Hourigan J.A.

G. Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Harrison v.
    Arrocha, 2015 ONCA 432

DATE: 20150615

DOCKET: C58658

Simmons, Cronk and Blair JJ.A.

BETWEEN

Paul Harrison

Respondent

(Appellant)

and

Liz Michelle Arrocha

Applicant

(Respondent)

Allison Pyper, for the appellant

Irving I. Frisch, for the respondent

Heard: June 10, 2015

On appeal from the order of Justice C. Horkins of the
    Superior Court of Justice, dated March 19, 2014.

ENDORSEMENT

[1]

The appellant appeals
from an order declaring
    G.A. to be a child of the marriage, and requiring that the appellant pay
    Guideline child support so long as the child remains a child of the marriage,
    retroactive child support fixed at $10,000 and spousal support in the amount of
    $959.00 per month for one year.

[2]

The appellant raises multiple issues on appeal,
    challenging the trial judge's finding that the child is a child of the marriage
    as well as her findings concerning the appellant's income and ability to pay
    and concerning the respondent's ability to obtain child support from the
    child's biological father and contribute to her own support and that of her
    child.

[3]

We would not give effect to any of these
    arguments. The trial judge reviewed the evidence and the relevant authorities
    and made detailed findings supporting her conclusions. In our view, the
    appellant's arguments are nothing more than an effort to have this court retry
    the case. That is not our function. It is well established that, particularly
    in family law cases, an appellate court is not entitled to substitute its views
    for those of the trial judge. Absent an error in principle, a serious
    misapprehension of the evidence or unless an award is clearly wrong, an
    appellate court must not intervene:
Hickey v. Hickey
, [1999] 2 S.C.R. 518;
Van de Perre v. Edwards
, [2001] 2 S.C.R. 1014. No such error has been shown.

[4]

The appellant also seeks leave to file fresh
    evidence on appeal, including a copy of an extract from his 2013 Notice of
    Assessment from Revenue Canada. The extract suggests that the appellant's
    actual taxable income for 2013 was $55,000, rather than $79,319 as referenced
    in his financial statement filed at trial. The trial judge's awards of child
    and spousal support were both based in part on the appellant's income of
    $79,319 as set out in his financial statement.

[5]

We decline to admit the fresh evidence. In our
    view, it lacks the necessary cogency to warrant admission on appeal. In
    particular, concerning the extract from the 2013 Notice of Assessment, Revenue
    Canada's assessment is entirely dependent upon the information provided by the
    appellant in his filed tax return and the documentation relating to it. While
    the appellant says in his affidavit that "[h]e learned that he had made an
    overly excessive estimate of income", he does not say what he claimed as
    income in his tax return and he provides no basis for stating that his income
    was overestimated.

[6]

In any event, the trial judge's order sets out a
    procedure for adjusting the child support payable under the order based on
    annual production of the appellant's income tax return and notice of
    assessment. This is the procedure that should be followed to adjust child
    support.

[7]

Although the appellant raised the issue of the
    trial judge's costs award in his supplementary notice of appeal, he did not
    file the costs order, the trial judge's reasons on costs or any other material
    relating to this issue. Accordingly, we are not in a position to address the
    matter.

[8]

The appeal is therefore dismissed and leave to
    appeal costs is denied. Costs of the appeal are to the respondent on a partial
    indemnity scale fixed in the amount of $7500, inclusive of disbursements and
    applicable taxes.

Janet Simmons J.A.

E.A. Cronk J.A.

R.A. Blair J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Himel v.
    Molson, 2015 ONCA 405

DATE: 20150605

DOCKET: C58944

Juriansz, Lauwers and Huscroft JJ.A.

BETWEEN

Evelyn Himel

Plaintiff (Respondent/

Appellant by way of cross-appeal)

and

David Molson
and Leslie Toth

Defendants (
Appellant/

Respondent by way of cross-appeal
)

and

Lee Edward Fingold

Third Party

Charles Sinclair, for the appellant David Molson

Harvey J. Ash, for the respondent Evelyn Himel

Heard and released orally: June 1, 2015

On appeal from the judgment of Justice David L. Corbett
    of the Superior Court of Justice, dated May 23, 2014.

ENDORSEMENT

[1]

We find the appellants grounds of appeal to be without merit, for the
    following reasons:

[2]

First, the trial judge applied the correct standard of proof, which is
    the balance of probabilities:
F.H. v. McDougall
,
2008 SCC 53, [2008] 3 S.C.R. 41, at
    para. 40.

[3]

Second, it is not for this court to review the trial judges credibility
    findings in the absence of a palpable and overriding error, which the appellant
    has not made out.

[4]

Third, the trial judge had the discretion to draw the adverse inferences
    he did from Mr. Molsons failure to testify in response to the evidence of Dr. Toth
    and Mr. Fingold, and his failure to explain the presence in his file of the allegedly
    forged direction not to seek an appraisal of the investment property:
Lawyers
    Professional Indemnity Co. v. Geto Investments Ltd
. (2007), 51 C.C.L.I.
    (4th) 74, at para. 93. It appears that Mr. Molsons failure to testify was a
    tactical defence decision, and there is no reason to relieve him of the
    consequences of that call.

[5]

Similarly, it was open to the trial judge to refuse to draw an adverse
    inference from the respondents failure to call the vendors of the investment
    property, the Holdens, or their lawyers as witnesses.

[6]

Finally, no submissions were made against the punitive damages award and
    we see no reason to disturb it.

[7]

Both issues raised by the respondent in the cross-appeal were within the
    trial judges discretion. First, although the trial judge had discretion to
    order a higher interest rate than that provided for in the
Courts of
    Justice Act
, R.S.O. 1990, c. C.43, he expressly declined to do so in view
    of his decision to award punitive damages at $30,000. This remedial structure
    was open to the trial judge.

[8]

Second, in deciding to award substantial indemnity costs in the amount
    of the respondents full bill of costs, the trial judge noted that this was a
    straightforward claim, the costs were high relative to the judgment amount, and
    the trial did not require the most senior solicitors. These are relevant
    factors and the trial judge did not err in taking them into account.

[9]

Accordingly, the appeal and the cross-appeal are dismissed.

[10]

Costs
    are fixed at $14,000, all inclusive, to the respondent.

R.G.
    Juriansz J.A.

P.
    Lauwers J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Impact Tool
& Mould Inc. (Re), 2015 ONCA 393

DATE: 20150603

DOCKET: C59719

Feldman, van Rensburg and Huscroft JJ.A.

In the Matter of the Bankruptcy of Impact Tool
& Mould Inc. of the City of Windsor, County of Essex

BETWEEN

Doyle
Salewski Inc., in its capacity as Court Appointed

Interim Receiver of Impact
Tool & Mould Inc.

Applicant

(Appellant)

and

BDO Dunwoody Limited, Trustee of the Estate of
Impact Tool & Mould Inc., a Bankrupt and Kevin OBrien

Respondents

Justin R. Fogarty and Jason Dutrizac, for the appellant

Benjamin G. Blay, for the respondent BDO Dunwoody
Limited

Nicolas M. Rouleau, for the respondent Kevin OBrien

Heard: May 4, 2015

On appeal from the order of Justice Joseph G. Quinn of
the Superior Court of Justice, dated November 25, 2014, reported at 2014 ONSC
6811.

ENDORSEMENT

Introduction

[1]

The appellant is the interim receiver of a subsequently bankrupt
company, who filed a proof of claim with the respondent trustee in bankruptcy claiming
fees and disbursements incurred in the course of its duties. The trustee
disallowed the proof of claim under s. 135(2) of the
Bankruptcy and
Insolvency Act
, R.S.C. 1985, c. B-3 (
BIA
). The interim receiver
appeals the dismissal of its appeal of the trustees disallowance.

[2]

The sole issue on this appeal is whether the interim receivers claim ought
to have been disallowed. For the reasons that follow, the appeal is dismissed.

Facts

[3]

The
appellant
Doyle Salewski
Inc.
(DSI) was appointed interim receiver of Impact Tool & Mould
Inc. (Impact), pursuant to s. 47 of the
BIA
and s. 101 of the
Courts
of Justice Act
, R.S.O. 1990, c. C.43, by the order of Patterson J. dated
March 7, 2003. The appointment was made on the application of the two major
shareholders of Impact who were also secured creditors and officers of Impact. The
appointment order granted DSI a priority charge over Impacts property for its fees
and disbursements properly incurred in its role as interim receiver. The order
stated that the charge was binding on all persons, including any trustee in
bankruptcy of Impact. The order also provided that DSI shall from time to time
pass its accounts. DSI has never been discharged as interim receiver.

[4]

As interim receiver, DSI sold Impacts assets  with court approval  to
Impacts two major shareholders. On May 20, 2003, DSI assigned Impact into
bankruptcy at the request of Unique Tool & Gauge Ltd. (Unique), an
unsecured judgment creditor of Impact. The respondent BDO Dunwoody Limited
(BDO) was appointed trustee in bankruptcy. The respondent OBrien, a
representative of Unique, was appointed as an inspector of the estate. The fees
of the trustee and inspector were paid by Unique.

[5]

There are currently no assets in Impacts estate. However, DSI and the
trustee have been embroiled in litigation since 2006. The details of the
various disputes are not material to the issue before this court, although they
provide context and illustrate why the parties are continuing to litigate over
the disallowance of an interim receivers proof of claim at a stage when there
are no assets left in the bankrupt estate. In 2010, DSI applied under s. 37 of
the
BIA
for an order that the fees of BDO and OBrien, paid by Unique,
be returned to Impacts estate because of alleged contraventions of the
BIA
.
BDO moved to dismiss the application on the basis that DSI was not a creditor
of Impact, and therefore was a stranger to the estate. Section 37 of the
BIA
provides:

Where the bankrupt or any of the creditors or any
other person is aggrieved by any act or decision of the trustee, he may apply
to the court and the court may confirm, reverse or modify the act or decision
complained of and make such order in the premises as it thinks just.

[6]

DSI had previously filed a proof of claim for fees and disbursements with
the trustee in 2003. The context was a demand for the payment of monies in
Impacts lawyers trust account which were paid to BDO post-bankruptcy. That proof
of claim asserted a secured claim for $15,000 and referred to DSIs charge
against all property, assets and undertaking of Impact pursuant to the appointment
order. Attached to the proof of claim was a statement of account showing all
invoices and receipts of the receiver from March 13, 2003 to July 23, 2003. BDO
ultimately paid to DSI the funds it received from the lawyers trust account.

[7]

In 2011, DSI filed an amended proof of claim with BDO for $457,040.29,
which included a secured claim of $96,561.74 and an unsecured claim of $360,744.93.
DSI again referred to its charge against all property, assets and undertaking
of Impact pursuant to the appointment order, and claimed as security, funds due
to be returned by the Trustee and Inspector Kevin OBrien in the total amount
of $96,561.74.

[8]

The trustee disallowed DSIs amended proof of claim on September 17, 2014,
five days before the scheduled hearing of the motion to dismiss the s. 37
application. The reason for the disallowance was communicated to DSI as follows:

The debt claimed is not a debt or liability, present or future,
to which the bankrupt was subject on May 20, 2003 or to which the bankrupt
would become subject before the bankrupts discharge by reason of any
obligation incurred before May 20, 2003 and is therefore not a provable claim
in the bankruptcy.

[9]

DSI brought an application to appeal the disallowance to a Superior
Court judge under s. 135(4) of the
BIA
.

Decision Below

[10]

In
his reasons for dismissing DSIs appeal of the trustees disallowance, the
application judge formulated the question before him as follows: Was DSI a
creditor with a debt provable in Impacts bankruptcy, under s. 121(1) of the
BIA
?

[11]

Section
121(1) provides:

All debts and liabilities, present
or future, to which the bankrupt is subject on the day on which the bankrupt
becomes bankrupt or to which the bankrupt may become subject before the
bankrupts discharge by reason of any obligation incurred before the day on
which the bankrupt becomes bankrupt shall be deemed to be claims provable in
proceedings under this Act.

[12]

The
application judge concluded that DSI was never a creditor of Impact and did not
have a claim provable in Impacts bankruptcy. He observed that DSI was appointed
under the order of Patterson J. as interim receiver, and once appointed became
an officer of the court. DSIs powers and method of remuneration as interim
receiver were provided for in the appointment order. The appointment order
provided security to DSI for its accounts through a priority charge, but did
not create a debt or a creditor-debtor relationship between Impact and DSI.

Analysis

(1)

Improper Procedure

[13]

The
narrow question at both levels of appeal was whether DSI, a court-appointed
receiver, can have a claim for its fees and disbursements provable under s. 121(1)
of the
BIA
that should not have been disallowed by the trustee.

[14]

However,
the subtext of this proceeding is the impending s. 37 application and the issue
of whether DSI is a creditor within the meaning of the
BIA
for the
purpose of that application. What appears to have occurred here is that DSI
filed an amended proof of claim after BDO gave notice of its motion to dismiss
the s. 37 application, which motion was brought on the argument that DSI
was not a creditor of the bankrupt estate. BDO then took the step of
disallowing DSIs proof of claim just five days before the motion to dismiss
the s. 37 application was scheduled to be heard. It appears that the purpose of
DSIs filing of its proof of claim was to establish its status as a creditor of
the bankrupt estate; the purpose of BDOs subsequent disallowance was to refute
that status, resulting in DSIs appeal of the disallowance. The effect was to have
the creditor issue decided in the context of the appeal from the disallowance
of the proof of claim rather than in the context of the s. 37 application.

[15]

This
was the next move in what appears to be a strategic game that was not fully
explained to the court, despite numerous questions posed during oral argument.
There was no need for the appeal of the disallowance of the proof of claim to
be heard and decided before the previously scheduled motion in the s. 37 application,
where the creditor issue was to be argued. However, that is what occurred.

(2)

The Requirement that a Receiver Pass its Accounts

[16]

In
Re Confectionately Yours Inc.
(2002), 164 O.A.C. 84 (C.A.), leave to
appeal to S.C.C. refused, (2003), 41 C.B.R. (4th) 28 (also referred to as
Re
Bakemates International
), this court discussed the purpose of requiring
court-appointed receivers to pass accounts. The court endorsed the statement in
F. Bennett,
Bennett on Receiverships
, 2nd ed. (Toronto: Carswell,
1999), at pp. 459-460, that the purpose of passing accounts is to satisfy the
court that the fees and disbursements incurred were fair and reasonable, and to
afford interested parties the opportunity to question the receivers activities
and conduct. The court reproduced, at para. 36, the following excerpt from
Bennett
on Receiverships
:

The passing of accounts allows for a detailed analysis of the
accounts, the manner and the circumstances in which they were incurred, and the
time that the receiver took to perform its duties. If there are any
triable issues, the court can direct a trial of the issues with directions.

[17]

The
court held, at paras. 37-38, that it is a receivers duty to pass detailed accounts
and provide an accompanying affidavit to substantiate the hours spent and the
disbursements incurred.

[18]

Court
supervision of receivers remuneration is essential to the integrity of the insolvency
regime. An interim receiver is not entitled to bypass the procedural
requirement of passing accounts by submitting its unliquidated and non-approved
fees to a trustee in bankruptcy in the form of a proof of claim. An appeal from
a trustees disallowance is not the proper forum in which to obtain court
approval of such costs.

[19]

The
appointment order of Patterson J. explicitly required DSI to pass its accounts
from time to time. There is nothing in the record that indicates why DSI should
be permitted to omit this procedural step prior to asserting any claim. The
trustee was therefore entitled to disallow DSIs proof of claim.

[20]

That
conclusion is sufficient to address the issue of the propriety of the
disallowance of the proof of claim by the bankruptcy trustee and to dismiss the
appeal.

[21]

There
is no need for the court to decide in this proceeding whether a court-appointed
receiver is a creditor of the bankrupt estate that was the subject of the
receivership. In this case that issue should be decided on the motion to
dismiss the s. 37 application.

Conclusion

[22]

For
these reasons, the appeal is dismissed. Costs are payable by the appellant to
the respondents, in the sum of $10,000 to the respondent BDO and the sum of
$5,000 to the respondent OBrien, both amounts inclusive of applicable
disbursements and taxes.

K. Feldman J.A.

K. van Rensburg J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Keys v.
    Intact Insurance Company, 2015 ONCA 400

DATE: 20150605

DOCKET: C59928

Juriansz, Lauwers and Huscroft JJ.A.

BETWEEN

Spencer Keys

Applicant (Appellant)

and

Intact Insurance Company

Respondent (Respondent)

AND BETWEEN

Sharif Virani

Applicant (Appellant)

and

Intact Insurance Company

Respondent (Respondent)

Owen Bourns, for the appellants

Christopher Reil, for the respondent

Heard: June 2, 2015

On appeal from the order of Justice Timothy D. Ray of the
    Superior Court of Justice, dated December 19, 2014.

ENDORSEMENT

[1]

The appellants appeal from the decision of the application judge that
    the respondent insurance company did not have the duty to defend them in a
    defamation action arising out of a video posted on the internet. The plaintiff
    in the action is the Canadian Federation of Students, a competitor of the
    Canadian Alliance of Student Associations (CASA), the named insured under the
    policy. The insurance policy provides coverage to CASAs "volunteer
    workers" or "employees", while performing duties related to the
    conduct of [CASAs] business".

[2]

The question before the application judge was whether there was a mere
    possibility that the appellants were acting in the course of their employment
    when they made the video and posted it on the internet:
Progressive Homes
    Ltd v. Lombard General Insurance Co of Canada
2010 SCC 33. The application
    judge properly indicated that the pleadings including any cross claims or third
    party claims were relevant in defining the substance of the claim. He found the
    substance of the claim in no way implicated the appellants as employees of CASA
    making the video in the course of their employment.

[3]

However, it is apparent that the application judge did not have a full
    appreciation of the record. He said: There is no cross claim or third party
    claim against either of the applicants. In fact there were cross claims
    against both appellants, and there are third party claims against CASA as well.

[4]

We do not accept the respondents argument that the characterization of
    the claim for the purposes of the duty to defend is limited to the statement of
    claim. That may be the usual case, but our view of the authorities is that all
    the pleadings may be considered, with the most weight placed on pleadings
    against potential insured:
Monenco Ltd. v. Commonwealth Insurance
,
    [2001] 2 S.C.R. 699. The object of the exercise is to ascertain the substance
    and the true nature of the claims:
Monenco
at para. 35, and
Non-Marine
    Underwriters, Lloyd's of London v. Scalera
, [2000] 1 S.C.R. 551, at para.
    79.

[5]

The statement of claim, the cross-claims and third party claims in this
    case are claims against potential insureds within the meaning of the policy.
    The defence to the third party claims is a pleading filed by a party other than
    the appellants.

[6]

When the pleadings in the cross-claims and third party claims are included
    in the consideration with the statement of claim, we have no difficulty
    concluding it may be reasonably inferred that there is at least the mere
    possibility that the appellants were employed by CASA and acting in the course
    of their employment when they made and posted the video on the internet.

[7]

The appeal is allowed.

R.G.
    Juriansz J.A.

P.
    Lauwers J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Khaiter v. Ontario, 2015 ONCA 438

DATE: 20150616

DOCKET: C57427

MacPherson, Epstein and Roberts JJ.A.

BETWEEN

Dr. Peter A. Khaiter

Plaintiff (Appellant)

and

Her Majesty the Queen in right of Ontario,
Ontario Labour Relations
    Board (OLRB)
, Mr. Kevin Whitaker, Ms. Kelly Waddingham, Mr.
    Christopher J. Albertyn,
Ms. Diane L. Gee, Mr. Tim R.
    Parker, Mr. Voy T. Stelmaszynski and Mr. Leonard Marvy

Defendants (Respondents)

Peter Khaiter, acting in person

Darrell Kleze, for the respondents

Heard: June 11, 2015

On appeal from the judgment of Justice David L. Corbett
    of the Superior Court of Justice, dated June 24, 2013.

APPEAL BOOK ENDORSEMENT

[1]

The appellant appeals from the Order of Corbett J. of the Superior Court
    of Justice dated June 24, 2013, dismissing his action against the respondent
    HMQ (Ontario), specifically members of the Ontario Labour Relations Board
    relating to some of their actions and decisions in the exercise of their
    judicial functions. The motion judge granted the respondents motion and
    dismissed Dr. Khaiters action on several bases, both procedural and
    substantive, including judicial immunity, improper notice/limitation period,
    non-compliance with the
Proceedings Against the Crown Act
, and
    improper collateral attack on the decisions of the OLRB.

[2]

On this appeal, the appellant essentially re-argues the same points. We
    do not agree with his submissions. We do agree with the motion judges
    reasoning and conclusions, including his statement that Dr. Khaiters proposed
    action is thorough going abuse of process.

[3]

The appeal is dismissed. The respondent is entitled to its costs of the
    appeal fixed at $2,500, inclusive of disbursements and applicable taxes.