COURT OF APPEAL FOR ONTARIO

CITATION: Sabourin and Sun Group of
    Companies v. Laiken, 2013 ONCA 530

DATE: 20130827

DOCKET: C56104

Rosenberg, Sharpe and Gillese JJ.A.

BETWEEN

Sabourin and Sun Group of Companies

Plaintiff/Defendant by Counterclaim

and

Judith Laiken

Defendant/Plaintiff by Counterclaim

AND BETWEEN

Judith Laiken

Appellant

and

Sabourin and Sun Group
    of Companies, Peter Sabourin, Sabourin and Sun Canada Inc., Sabourin and Sun
    Inc., a Bahamas Corporation, Sabourin and Sun BVI Trust, and Intervest Direct
    Inc., 1077472 Ontario Limited, Greg Irwin, Sabourin and Sun Inc. and 1061971
    Ontario Limited

and

Peter W.G. Carey

Respondent

Kevin D. Toyne, for the appellant Judith Laiken

Patrick F. Schindler, for the respondent Peter W.G.
    Carey

Heard: June 17, 2013

On appeal from the order of Justice
    Lois B. Roberts of the Superior Court of Justice, dated September 10, 2012, with
    reasons reported at 2012 ONSC 7252, setting aside her earlier order of October
    12, 2011  (2011 ONSC 5892).

Sharpe
    J.A
.:

[1]

This appeal raises procedural and substantive issues in relation to
    contempt and the duties of a solicitor representing a party who is subject to a
Mareva
injunction.  The respondent, Peter Carey, a solicitor, was
    acting for Peter Sabourin, a financial advisor who was subject to a
Mareva
injunction obtained by the appellant, Judith Laiken.  Sabourin sent Carey a
    cheque for $500,000 without instructions. Carey deposited the cheque in his
    trust account. Sabourin later instructed Carey to use the funds to settle with an
    unrelated group of creditors represented by Bill Brown. Carey refused to follow
    those instructions as to do so would violate the
Mareva
injunction.
    Sabourin then instructed Carey to attempt to settle with Laiken. Carey was
    unable to reach an agreement with Laikens solicitor.  When Carey advised him that
    settlement of the Laiken claim was not possible, Sabourin instructed Carey to
    return the funds to him. Carey deducted $60,000 for his legal fees and returned
    the remaining funds to his client.

[2]

Laiken brought this contempt motion against Carey alleging that by
    returning the money to his client, Carey had violated the
Mareva
injunction which, by its terms, applied to monies held in trust. After
    considering the affidavit evidence, the motion judge found Carey in contempt
    and adjourned the matter pursuant to rule 60.11 (5) and (8) of the
Rules of
    Civil Procedure
, R.R.O. 1990, Reg. 194. When the matter resumed before the
    motion judge, Carey testified that he honestly believed that he was acting
    properly in returning the money to Sabourin and that he did not intend to
    breach the
Mareva
order. He submitted that the contempt finding should
    be set aside. The motion judge found, on the basis of Careys oral evidence,
    that she was not satisfied beyond a reasonable doubt that Carey had
    deliberately violated the
Mareva
order or that his interpretation of
    it was wilfully blind. It followed, in her view, that her previous finding of
    contempt should be set aside.

[3]

Laiken appeals on the grounds that the motion judge erred in the
    procedure she followed and in the legal test she applied to the allegations of
    contempt. Laiken submits that the motion judge should not have permitted Carey
    to offer fresh evidence and to re-open the initial contempt finding and that,
    in any event, on the evidence, Careys conduct did constitute contempt of the
Mareva
order.

[4]

For the following reasons, I would allow the appeal and restore the
    finding of contempt. However, as Careys actions were prompted by an error of
    judgment and did not amount to a deliberate violation of the
Mareva
order, I would limit the sanction to the payment of costs

FACTS

[5]

Sabourin and his companies were involved in off-shore securities. Laiken
    was Sabourins client and had invested substantial sums in off-shore securities
    on his advice. In 2000, Sabourin and Laiken became involved in protracted
    litigation. Sabourin sued Laiken for $364,000 alleging a deficit in her margin
    account, and Laiken counterclaimed in 2001 for over $800,000 alleging fraud.
    The matter proceeded to discovery. In the course of the litigation, Laiken made
    several
ex parte
requests for orders freezing Sabourins assets but
    these orders were either refused or set aside for non-disclosure.

[6]

The
ex parte Mareva
order at issue on this appeal was obtained
    by Laiken on May 4, 2006. The order was very broad in its terms. It enjoined
    Sabourin and the other named defendants from disposing of, or otherwise
    dealing with, any of their assets and it contained no exceptions to deal with
    payment of legal fees or living expenses. The order also enjoined any person
    with knowledge of this Order to prevent the sale, disposition, withdrawal,
    dissipation, sale, assignment, dealing with, transfer, conveyance, conversion,
    encumbrance or diminishment of the assets and specifically included money held
    in trust accounts. The order did not contain the usual term requiring the
    named parties to disclose their assets.

[7]

The
ex parte
order was continued a week later. It was agreed by
    the parties and accepted by the judge hearing the motion that the order
    required variation to allow for payment of legal fees, living and other routine
    expenses.  The judge left it to the parties to work out appropriate terms but
    no steps were taken to amend the formal order.  The parties agreed to certain
    terms but failed to agree on the payment of ordinary third party creditors.
    That issue was the subject of a further continuation motion argued on September
    14, 2006, when a decision was reserved.

[8]

On September 21, 2006, Sabourin delivered to Carey a cheque for $500,000
    with no instructions. Carey later testified that the cheque was a surprise.
    He attempted to reach Sabourin but was unable to do so. Following Law Society
    regulations, Carey deposited the cheque in his trust account. On September 25,
    2006, the decision to continue the
Mareva
order and refuse a provision
    allowing Sabourin to pay third party creditors was released. Sabourin
    subsequently called Carey and instructed him to use the funds to settle with
    the Bill Brown group of creditors. Carey informed Sabourin that he could not do
    so as that would violate the terms of the
Mareva
order. Sabourin then
    instructed Carey to attempt to settle with Laiken in the range of $175,000 to
    $250,000. Within a few days of that conversation, there was a conference call
    involving Sabourin, Brown and Carey. Sabourin informed Brown that Carey held
    $500,000 in trust. Sabourin said that  the money was intended for Brown, but
    that the
Mareva
order prevented Carey from releasing the funds.

[9]

Carey attempted to settle with Laikens solicitors but was unable to do
    so. He did not reveal that he had $500,000 in his trust account. In late
    October, 2006, Carey reported to Sabourin that he was unable to reach a
    settlement with Laiken. Sabourin instructed Carey to return the funds and Carey
    did so after deducting $60,000 for past and future legal fees.

[10]

In
    early 2007, Sabourin called Carey to inform him that because of proceedings
    before the Ontario Securities Commission, he wished to terminate Careys
    retainer and to retain new counsel. However, Sabourin did not follow through
    and Carey remained the counsel of record on the Laiken matter.

[11]

Sabourin
    then went out of business and disappeared.

[12]

In
    October 2007, Brown obtained judgment against Sabourin and his companies and
    obtained a receiving order by way of equitable execution. The receiver demanded
    payment from Carey of the $500,000 trust money. Carey responded that he had
    paid that money back to Sabourin.

[13]

On
    October 27, 2009, Laiken commenced an action against Carey alleging,
inter
    alia
, negligence in relation to his return of the $440,000 to Sabourin in
    breach of the
Mareva
order.

[14]

In
    November 2007, the Sabourin - Laiken action came on for trial. Carey appeared
    and indicated he had no instructions and was permitted to withdraw. The matter
    proceeded as an uncontested trial. Sabourins claim against Laiken was
    dismissed and Laiken was awarded judgment against Sabourin for $820,000 plus
    interest and costs of almost $300,000. The trial judge accepted Laikens
    evidence that she had lost her entire net worth as a result of Sabourins
    fraudulent conduct.

CONTEMPT PROCEEDINGS

[15]

Laiken
    launched her motion for contempt against Carey on December 15, 2010. She was
    initially joined by counsel for Brown but he appears not to have participated
    in the proceedings. Carey responded with a motion for summary judgment to
    dismiss Laikens 2009 civil action. The primary evidence filed in support of
    the contempt motion was the affidavit of Paul McGrath, an officer of the
    receiver in the Brown action. Carey filed a responding affidavit setting out in
    some detail his defence to the contempt motion. McGrath failed to attend to be
    cross-examined and his affidavit was struck. Laiken did not cross-examine Carey
    on his affidavit. The parties agreed that the exhibits to the McGrath affidavit
    be admitted.

[16]

The
    matter was heard in mid-September 2011 on the basis of the exhibits to the
    McGrath affidavit and Careys affidavit evidence. Carey did not attend but was
    represented by counsel. The motion judge released her reasons on October 12,
    2011, finding Carey in contempt. She dismissed Careys summary judgment motion
    on the basis that there was a genuine issue for trial as to whether Laiken had
    suffered any damages as a result of Carey returning the $440,000 to Sabourin.

[17]

The
    motion judge rejected Careys claim that the
Mareva
order was unclear,
    stating, at para. 27:

With respect, the
Mareva
Order could not be clearer:  it plainly prohibited any and all
    dealings whatsoever with any monies belonging to the Sabourin defendants,
    expressly including any held in trust for them.

[18]

The motion judge pointed out that Careys evidence made it clear that
    he realized that the money in his trust account was subject to the
Mareva
order. He knew that it had to be varied to allow for payment of
    routine expenses and that he could not pay third party creditors as requested
    by Sabourin. She found that it was also clear that he transferred funds from
    his trust account, an act prohibited by the terms of the
Mareva
order.

[19]

Carey also
asserted
that to retain the funds would
    be to shelter them improperly from creditors, because he was bound by
    solicitor-client privilege not to reveal the trust funds.. The motion judge
    considered and rejected this defence. In her view, this did not explain why he
    could not have simply left the trust funds where they were secure (para. 38).

[20]

The motion judge concluded, at para. 42:

I am satisfied beyond a reasonable doubt that Mr.
    Carey knowingly and deliberately breached and is therefore in contempt of the
Mareva
Order.

The motion judge then directed the
    parties to appear before her pursuant to rule 60.11
,
the relevant portions of which provide as follows:

Motion
    for Contempt Order

60.11  (1)  A
    contempt order to enforce an order requiring a person to do an act, other than
    the payment of money, or to abstain from doing an act, may be obtained only on
    motion to a judge in the proceeding in which the order to be enforced was made.

Content
    of Order

(5)  In disposing of a motion
    under subrule (1), the judge may make such order as is just, and where a
    finding of contempt is made, the judge may order that the person in contempt,

(a) be imprisoned for such period
    and on such terms as are just;

(b) be imprisoned if the person
    fails to comply with a term of the order;

(c) pay a fine;

(d) do or refrain from doing an act;

(e) pay such costs as are just; and

(f) comply with any other order that
    the judge considers necessary,

and may grant leave to issue a writ of sequestration
    under
rule 60.09
against the
    persons
property.

Discharging or Setting Aside Contempt
    Order

(8)  On motion, a judge may discharge, set aside, vary or
    give directions in respect of an order under subrule (5) or (6) and may grant
    such other relief and make such other order as is just.

[21]

The motion judge explained what would happen in the following terms, at
    para. 43:

Mr. Careys attendance is required at the hearing
    although he is not obliged to call any evidence or testify.  At that
    hearing, if he wishes, Mr. Carey shall have the opportunity to present any
    further evidence, including
viva voce
evidence,
    and make any submissions that he wishes to make.  The plaintiff shall also
    have the opportunity to file any further material, call evidence, cross-examine
    at the hearing, and make submissions.  I shall take all of this into
    account in making any order under
Rule 60.11 (5)
and
(8)
of the
Rules of Civil Procedure
.

[22]

Carey filed a notice of appeal from the contempt finding and moved for
    a stay of that order and any further proceedings pending the determination of
    his appeal.  I dismissed the stay motion on the ground that the appeal should
    not be used to interrupt and fragment the Superior Court proceedings: 2011 ONCA
    757. I pointed out, at para. 7, that if the appeal from the contempt finding
    succeeded that would end the matter but if it failed, there would still be an
    appeal from the sanction imposed and that it was preferable to await the
    completion of proceedings and determine all issues on a complete record. This
    follows the practice used in criminal appeals where the court cannot entertain
    an application for judicial interim release until the sentence has been
    imposed. As the motion judge relied on para. 9 of my reasons, I quote it here:

To stay the contempt proceedings at this stage
    would also interfere with the design of the commonly followed procedure that is
    permitted, if not prescribed, by
rule 60.11 (5)
and
(8)
, of dividing a contempt proceeding into two phases, the first dealing
    with the issue of whether the party is in contempt and the second dealing with
    the issue of sanction. Until the order has been made under 60.11 (5), the
    contempt proceedings have not come to their final conclusion. Until the sanction
    has been imposed, the judge has not expressed his or her final view of the
    case. It is clear from the passage quoted above from the motion judges reasons
    that she has not yet completed her adjudication of the contempt proceedings.
    Indeed, her specific reference to
rule 60.11 (8)
indicates that she remains open to a wide range of possible outcomes.
    Until she completes her work, this court will not know if the motion judge
    considered the contempt to be serious or trivial or how the judge intended to
    use the sanction of contempt to bring about compliance or to punish the
    contemnor. These are elements integral to the nature and character of the
    contempt proceeding and essential to an appellate courts full appreciation of
    the disposition under appeal.

[23]

When the matter resumed before the motion judge, Carey led further
    evidence. He filed an affidavit sworn by Alan Lenczner Q.C., a highly respected
    member of the litigation bar, and Carey testified to amplify his defence to the
    contempt allegation. The matter proceeded over two days in December 2011 and
    July 2012. Laiken also filed affidavit evidence and testified.

[24]

Lenczners affidavit stated that by returning the money in excess of
    that required to cover legal fees, Carey had acted in a manner  that was
    consistent with the practice of counsel generally.  Lenczner maintained that
    position when cross-examined.

[25]

In his oral evidence, Carey provided a full account of the proceedings
    between Laiken and Sabourin and reiterated and elaborated on the position he
    had advanced earlier. Carey testified that he believed that to retain the money
    in his trust account under the veil of solicitor-client privilege would only
    serve to shelter the money from creditors. He testified that he thought Laiken
    had essentially admitted liability for Sabourins claim on discovery, that her
    claim against Sabourin was weak, that he felt that the May 2006
Mareva
order was an improper tactical maneuver, and that the variations
    effectively gutted the order:

Returning these monies did not constitute a
    violation of the order because the order as varied, the order was changed
    completely in terms of what could or could not have been done. It simply
    doesnt exist anymore.

Carey further testified:

I honestly believed at the time that I was doing
    this that I was acting completely properly. I was abiding by my obligations as
    a solicitor, both in terms of my obligations to the client and my obligations
    as an officer of the court and quite frankly, I still do.

[26]

At the conclusion of the evidence and argument, the motion judge
    announced that, for reasons to follow, her previous finding of contempt was set
    aside. In her written reasons released on December 24, 2012, she noted that rule
    60.11(8) permits a judge to discharge, set aside, vary or give directions
    with respect an order. She cited para. 9 of my reasons on the stay application as
    authority to allow Carey to reopen the contempt finding. She added that in any
    event, she would have granted leave to reopen pursuant to rule 59.06(2) as to
    allow Carey to respond more fully to the serious allegation of contempt was
    necessary to avoid a miscarriage of justice.

[27]

The motion judge concluded, at para. 36, that she had a reasonable
    doubt as to whether the terms of the
Mareva
order
    were completely clear to Mr. Carey, and I am not satisfied beyond a reasonable
    doubt that Mr. Careys interpretation of the [
Mareva
] order was deliberately and willfully blind.  As it must be clear to
    a party exactly what must be done to be in compliance with the terms of an
    order and as [a]ny doubt must be resolved in favour of Mr. Carey, contempt
    had not been shown beyond a reasonable doubt.

[28]

She added, however, at paras. 38 and 39, that she made no finding as to
    the correctness or reasonableness of Careys interpretation of the
Mareva
order. She left open the possibility that Carey might be found, on the
    civil balance of probability standard, to have been inadvertent or negligent,
    but added that did not amount to contempt: Unprofessional or sloppy practice,
    if that is ultimately found to be the case here, is not contempt of court.

ISSUES

[29]

Laiken
    raises four issues on appeal:

1.

Did the motion
    judge err in setting aside her initial finding of contempt?

2.

Was the Lenczner
    affidavit properly admissible?

3.

Did the motion
    judge err in finding that Careys conduct did not amount to contempt?

4.

If Carey was in
    contempt, what is the appropriate sanction?

ANALYSIS

1.

Did the motion judge err in setting aside her initial finding of
    contempt?

[30]

In
    my view, the contempt proceedings in this case took an uneven course and the
    procedure that was followed in this case should not be emulated in the future.
    The problem started when Laikens main deponent, Paul McGrath, the officer of
    the receiver in the Brown action, failed to attend to be cross-examined. Carey
    made an understandable but, as it turned out, unwise tactical decision not to
    attend, testify or to offer other evidence on the contempt hearing. As Carey
    had provided an affidavit that offered a point-by-point response to the McGrath
    affidavit, there was a clear factual foundation for a contempt finding which
    the motion judge made. Carey then used the second stage of the proceedings to
    attack the motion judges findings and reasons for finding him in contempt.

[31]

As
    both the motion judge and Carey relied on my reasons in the stay motion, it is
    appropriate for me to offer the following clarification. I do not read my
    reasons to say - and I certainly did not intend them to say  that rule 60.11
    contemplates a judge revisiting and reversing an initial finding of contempt.
    What I intended to say was that until a judge has decided
both
the
    issue of contempt
and
the issue of sanction, an appellate court does
    not have a complete record of the case. Appeals should only come to this court
    on a complete record and in contempt, as in other areas, we should avoid a
    fragmented or piece-meal approach to hearing appeals before the  first instance
    court has completed its adjudication of all issues.

[32]

In
    my view, neither rule 60.11 nor the case law contemplates the procedure that
    was followed in this case. A party faced with a contempt motion is not entitled
    to present a partial defence and then, if the initial gambit fails, have a
    second bite at the cherry. In contempt matters, as in all other areas of litigation,
    the interests of justice are best served if the principle of finality is
    respected. Parties have one chance to present their case and, absent
    exceptional circumstances, they must live with the consequences of the tactical
    decisions they have made in deciding what evidence and what arguments to
    present to the court.

[33]

The
    finality principle must, however, be applied in a way that takes into account
    the fact that contempt motions typically involve two phases. The first phase
    deals with whether the party is in contempt. When that decision is made, the
    finding is final. If the party is found to be in contempt, the issue of
    sanction is usually dealt with at the second phase. It is not until both phases
    are complete that it is appropriate to proceed with an appeal of the contempt
    finding. These two phases correspond with the practice in criminal proceedings
    of dividing the issues of conviction and sentence.

[34]

I
    would add two qualifications. First, as the ultimate aim of the law of civil
    contempt is to secure respect for and compliance with court orders, there must
    be a certain element of flexibility in the way it is applied. A finding of
    contempt may prompt the contemnor to comply with the order and that may prompt
    the judge to set aside the initial finding of contempt. That is contemplated by
    rule 60.11. See
Chiang (Trustee of) v. Chiang
, 2009 ONCA 3, 93 O.R.
    (3d) 483, at para. 118: These rules give to the court an ongoing supervisory
    role over a civil contemnor together with the discretion to vary or even
    discharge a contempt order if the contemnor purges the contempt. However, in
    such a case, the contempt finding is not set aside because the judge has second
    thoughts about the contempt finding or because the contemnor offers a different
    or more ample defence. Rather, it is set aside because the contempt proceedings
    have had their intended effect of securing compliance with a court order.
    Obviously, that did not occur in the present case.

[35]

The
    second qualification is that contempt proceedings are subject to the standard principles
    that allow parties to re-open findings in exceptional circumstances where there
    is a sound explanation for why the fresh evidence or new facts were not
    presented to the court before the contempt order was made.

[36]

In
    my view,
Belanger v. McGrade Estate
(2003), 65 O.R. (3d) 829 (Sup. Ct.)
    was such a case. A solicitor had been found in contempt and sentenced to jail
    for failing to comply with court orders in an estate matter. He did not appear
    to defend himself on the contempt motion. After being found in contempt he deposed
    that he had been misled throughout the proceedings by the other lawyer, that he
    had been told that it was unnecessary for him to attend the contempt motion,
    and that the orders he failed to obey were obtained without his knowledge or
    consent. The other lawyer did not deny those facts and the contempt order was
    set aside under rule 60.11(8). I would distinguish
Belanger
from the
    present case on the basis that it dealt with facts that only came to light
    after the contempt finding had been made through no fault of the alleged
    contemnor.

[37]

In
    the case before us, the motion judge relied on
rule 59.06(2):

Setting
    Aside or Varying

59.06(2)  A party who seeks to,

(a) have an order set aside or
    varied on the ground of fraud or of facts arising or discovered after it was
    made;

(b) suspend the operation of an
    order;

(c) carry an order into operation;
    or

(d) obtain other relief than that
    originally awarded,

may make a motion in the proceeding for
    the relief claimed.

[38]

While I agree that this rule applies to contempt proceedings, I
    respectfully disagree with the motion judge that the facts of the case before
    her brought it within its reach. In particular, Carey was not seeking to set
    aside or vary the contempt finding on the ground of fraud or of facts
    discovered after it was made but rather on the basis of evidence that was
    clearly available for the initial hearing.

[39]

I
    conclude, accordingly, that the procedure followed in this case was flawed and
    that Carey should not have been permitted to re-open the finding of contempt.

2.

Was the Lenczner affidavit properly admissible?

[40]

It
    follows from what I have already said that, to the extent Carey relied on the
    Lenczner affidavit for the issue of contempt, it should have been tendered on
    the initial phase as it was not evidence of a fact discovered after the initial
    order.

[41]

It
    is also my view that, in any event, the Lenczner affidavit was not admissible
    on the issue of contempt. As I will explain in the next part of these reasons,
    the question of whether or not Careys conduct amounted to contempt essentially
    turns on the interpretation of the
Mareva
order and the legal test for
    contempt. Those, in my view, are legal issues for the court to decide on the
    basis of legal argument, and while Carey is entitled to advance all the legal
    arguments he can muster, he cannot advance what are essentially legal arguments
    under the guise of expert evidence.

[42]

However,
    those aspects of the Lenczner affidavit addressing the standards and common
    understandings of the litigation bar could be properly admitted as evidence favouring
    leniency on the issue of sanction.

3.

Did the motion judge err in finding that Careys conduct did not amount
    to contempt?

[43]

Although
    I have concluded that the motion judge erred procedurally in setting aside her
    initial finding of contempt, we have her findings on the complete record and
    the matter has been fully argued before this court. Therefore, I propose for
    the sake of completeness to consider whether Careys conduct, as found by the
    motion judge, did or did not amount to contempt.

[44]

Carey
    offered a number of explanations that he claims justified returning the trust
    money to his client. Carey testified that:

·

in his opinion, Laiken had little chance of success in the action
    and the
Mareva
order was an improper tactical move on her part to gain a
    tactical advantage;

·

the form of the
Mareva
order was deficient in that it
    failed to provide for payment of legal costs, living expenses and disclosure of
    assets;

·

the variations agreed to by counsel had gutted the order:
It simply doesnt exist anymore; and

·

because the money remained Sabourins property, the transfer from
    the trust account was not prohibited.

[45]

The
    motion judge appears to have accepted the thrust of these submissions in her
    December 24, 2012 reasons in concluding, at para. 36, that she was not
    satisfied beyond a reasonable doubt that the terms of the May 4, 2006
Mareva
order were completely clear to Mr. Carey.

[46]

In
    my respectful view, that conclusion reflects legal error.

[47]

It
    is well-established that court orders must be respected, even if they were
    improperly or improvidently granted. See
Henco Industries Limited v.
    Haudenosaunee Six Nations Confederacy Council (
2006), 82 O.R. (3d) 721
    (C.A.) at para. 90:
The law is clear that an order of the court,
    however wrong, must be obeyed until it is reversed or varied (citation
    omitted).
Whatever opinion Carey had as to the likely outcome of
    the Laiken-Sabourin litigation or as to the propriety or form of the
Mareva
order, he was bound to comply with it. He could and did, as Sabourins counsel,
    move to set aside or vary the order but unless the order was set aside, he was
    bound to comply with it.

[48]

I
    fail to see how the alleged deficiencies in the order could render unclear the
    term of the injunction prohibiting the transfer of trust funds held on
    Sabourins behalf. The failure to allow payment of living expenses or legal
    costs or to provide for disclosure of assets had no impact on this term. The
    order may well have been unduly restrictive, but that does not amount to a lack
    of clarity. The order exhibited none of the characteristics typically found in
    orders lacking clarity: see
Culligan Ltd. v. Fettes
2010 SKCA 151, 326
    D.L.R. (4th) 463, at para. 21. It was missing no essential details about its
    application; it did not use overly general or unclear language; and nothing had
    occurred that could obscure its meaning. I would add on this point that as
    Sabourin had instructed Carey to use the $500,000 to deal with creditors, it is
    very difficult to see how he or Carey could, at the same time, maintain that he
    needed it for his day-to-day living expenses.

[49]

I
    see no merit in the assertion that because of the variations to the order, it
    no longer existed or that it lacked sufficient clarity. As the motion judge
    found in her initial reasons, the order could not be clearer and it plainly
    prohibited any and all dealings in money belonging to Sabourin, including
    money held in trust. She pointed out that Careys own actions indicate that he
    knew the order still had binding effect. Careys unsuccessful effort to secure
    a variation to permit payments to third party creditors and subsequent refusal
    to use the trust money as instructed by his client to settle the Brown claims
    demonstrates that he knew the
Mareva
order, as varied to permit
    payment of legal and ordinary living expenses, remained in force and had
    binding effect.

[50]

Careys
    fourth point, that the money remained Sabourins property and therefore by returning
    it he was not caught by the order, is without merit. The
Mareva
order
    enjoined the withdrawal, dissipation  dealing with, transfer  or
    diminishment of the assets and specifically included money held in trust
    accounts. The whole purpose of this and other
Mareva
orders is to
    prevent the defendant and others having knowledge of the order from dealing
    with the defendants property so as to defeat the courts process. I fail to
    see how the fact that Sabourin retained beneficial ownership could possibly
    defeat the application of these terms to the money Carey held in his trust
    account.

[51]

I
    now turn to the significance of the fact that Carey testified that he honestly
    believed that he was acting in a manner consistent with his duty to his client
    and his duty to the court when he returned the trust money to Sabourin.

[52]

I
    begin by pointing out what appear to me to be fundamental flaws in Careys
    analysis of the interpretation and application of the
Mareva
order.

[53]

The
    basic premise of a
Mareva
order is that the defendant is a rogue bent
    on flouting the process of the court. That is said to justify the exceptional
    and drastic measure of freezing the defendants assets before trial and before
    judgment. A finding that Sabourin was a rogue bent on flouting the courts
    process was implicit in the grant of the
Mareva
order and Carey was
    bound to act accordingly. If that is the starting point, it is difficult to see
    how Carey could reasonably have thought that returning the money to Sabourin
    would render it subject to execution while retaining it in the trust account
    would shelter it from execution. It was much more likely that the money would
    have been available for execution had Carey held the money in his trust account
    rather than returning it to his client who then behaved in precisely the manner
    the
Mareva
order predicted: he disappeared without a trace taking all
    of his assets with him.

[54]

Carey
    asserts that it would have been wrong for him to have left the money in his
    trust account because that would shelter it from creditors under the protection
    of solicitor-client privilege. This ignores the fact that Carey knew that
    Sabourin had revealed to Bill Brown who represented several third party
    creditors the fact that there was $500,000 sitting in his lawyers trust
    account. Not surprisingly, the receiver Brown had appointed used that
    information in an attempt to recover the funds, only to find that they had been
    returned to Sabourin.  As Sabourin had already disclosed to third party
    creditors that Carey held $500,000 in trust to be used to pay or settle
    creditors claims, it was virtually inevitable that at some point, his
    creditors, likely including Laiken, would come after the money had it remained
    in Careys trust account. I have difficulty accepting Careys assertion that
    there was no way that Laiken or her counsel could learn that he had his
    clients money in his trust account in the face of his evidence that his client
    had already disclosed that fact, albeit to another creditor. I note here that
    whether Laiken would have gained from an execution brought by other creditors
    is a contentious issue upon which I express no view. The point remains,
    however, that as was predicable from Sabourins conduct and, as events proved, had
    Carey retained the money in his trust account, he would not have sheltered it from
    execution.

[55]

In
    my view, Carey committed an act that violated both the letter and the spirit of
    the
Mareva
order.

[56]

The
    motion judge was not satisfied beyond a reasonable doubt that Careys belief
    that he was entitled to return the money to his client amounted to a deliberate
    or willfully blind breach of the
Mareva
order. I accept that finding
    and  now turn to consider the legal issue that arises: was the motion judge
    correct in finding that it follows from her finding  that Carey was not in
    contempt?

[57]

It
    is well-established that while the act that contravenes a court order must be
    intentional to constitute civil contempt, it is not necessary to show that the
    act was deliberately contumacious.  This is not a case of criminal contempt
    where public defiance of the courts authority is an essential element and, as
    held in
United Nurses of Alberta v. Alberta (Attorney General),

[1992] 1 S.C.R. 901,
at p. 933, it must be proved beyond a
    reasonable doubt that the accused defied or disobeyed a court order in a public
    way (the
actus reus
), with intent, knowledge or recklessness as to the
    fact that the public disobedience will tend to depreciate the authority of the
    court (the
mens rea
). This is a case of civil contempt where
[a] person who simply breaches a court order ... is viewed as having
    committed civil contempt:
United Nurses
, at p.
    931.

[58]

In
TG Industries Ltd. v. Williams
, 2001 NSCA 105, 196 N.S.R. (2d) 35,
    bolstered by a thorough review of what he described, at para. 19, as the
long line of authority for the view that intention to disobey is not
    an element of civil contempt,
Cromwell J.A. (then a member of the Nova
    Scotia Court of Appeal), explained the governing principle in the following
    way, at para. 17:

[I]
n civil contempt, it is important to
    distinguish between an intentional act and knowledge that the act is
    prohibited.  The core elements of civil contempt are knowledge of the
    order and the intentional commission of an act which is in fact prohibited by
    it.  The required intention relates to the act itself, not to the
    disobedience; in other words, the intention to disobey, in the sense of
    desiring or knowingly choosing to disobey the order, is not an essential
    element of civil contempt.

[59]

As Cromwell J.A. pointed out, at para. 11, to hold that a party could only
    be found in contempt
if it intentionally and wilfully
    acted contrary to the requirements of the order would put the test for civil
    contempt too high as [i]f accepted, this view would mean that mistakes
    of law would be a defence to an allegation of civil contempt but not to a
    murder charge.

[60]

This court applied the same principle in
Sheppard v.
    Sheppard
(1975), 12 O.R. (2d) 4, at p. 8:

[I]n order to constitute a contempt it is not
    necessary to prove that the defendant intended to disobey or flout the order of
    the Court.  The offence consists of the intentional doing of an act which
    is in fact prohibited by the order. The absence of contumacious intent is a
    mitigating but not an exculpatory circumstance.

[61]

Similarly, it has been held that even a party who acts on legal advice
    may be found in contempt if the conduct violates terms of a court order: see
Re
    Tyre Manufacturers' Agreement
, [1966] 2 All E.R. 849, at p. 862;
Canada
    Metal Co. Ltd. v. C.B.C. (No.
2)
(1974), 48 D.L.R. (3d) 641, at p. 661, affd
    65
D.L.R. (3d) 231 (Ont. C.A.). Sabourin could not have
    avoided a finding of contempt by relying on Careys erroneous legal advice and
    neither should Carey because of his erroneous interpretation of the order.

[62]

Carey
    knew of the order and he violated it. He did not desire or knowingly choose to
    disobey the order, but the lack of contumacious intent is a mitigating factor
    and not an essential element of civil contempt.

[63]

In
    his capable submission on behalf of Carey, Mr. Schindler cites English
    authority dealing with contempt allegations against third parties who have
    acted contrary to an order made against a different party. It has been held
    that an intention on the part of the third party to interfere with or impede
    the administration of justice is an essential ingredientto be established to
    the criminal standard of proof:
Attorney General v. Punch Ltd.,
[2003] 1 A.C. 1046, at para. 87. This principle has been applied to banks
    alleged to have violated
Mareva
injunctions as third parties with
    knowledge of the order: see
Z. Ltd. v. A-Z and AA-LL,
[1982] 2 W.L.R.
    288 (C.A.), at p. 305: Carelessness or even recklessness on the part of the
    banks ought not in my opinion to make them liable for contempt unless it can be
    shown that there was indifference to such a degree that was contumacious.

[64]

I
    am not persuaded that as the solicitor acting for Sabourin in relation to the
Mareva
order, Carey falls into the same category as the third parties discussed in
    those cases who were strangers to the litigation bound to respect the court
    order simply because they had knowledge of it.  As the solicitor of record and
    as an officer of the court, Carey must be held to a higher standard.  The
    solicitor-client bond creates a community of interest between Carey and
    Sabourin that is plainly distinguishable from the situation of a stranger to
    the litigation who is apprised of the court order. As an officer of the court,
    a solicitor of record is duty-bound to take scrupulous care to ensure respect
    for court orders. In my view, as the solicitor of record in the case, Carey
    should be held to the same standard of compliance as his client who was a
    party.

[65]

I
    conclude, accordingly, that the motion judge erred in law in finding that
    because Carey did not deliberately breach the
Mareva
order, he could
    not be found in contempt.

4.

If Carey was in contempt, what is the appropriate sanction?

[66]

While
    it is my view that Careys conduct did breach the May 4, 2006
Mareva
order, I accept that Carey actions were prompted by an error in judgment and
    not by any deliberate disrespect for the court or its process.  On this issue,
    the Lenczner affidavit is relevant and admissible.

[67]

Laiken
    does not ask that Carey be imprisoned or fined but submits that the court
    should order Carey to pay her $440,000 by way of compensation. I do not intend
    to review the authorities as to whether or when a compensation order is an
    appropriate sanction for contempt as it is my view that, even if this court
    does have the authority to require compensation as the sanction for contempt, no
    such order should be made in the circumstances of this appeal for the following
    procedural reason.

[68]

It
    is clear from the motion judges reasons refusing to grant summary judgment to
    dismiss the action that Laikens claim for damages raises contentious issues of
    fact and law, including issues as to causation. It would be difficult to come
    to grips with those issues in the context of a contempt motion which is
    designed to be an expeditious and focused proceeding. To the extent that
    violation of the
Mareva
order is an element of Laikens claim against
    Carey, she will have the benefit of our finding in this contempt proceeding,
    but she must pursue her claim in a proceeding that affords a proper procedural
    framework for its adjudication.

[69]

In
    my view, the appropriate sanction is to require Carey to pay Laiken the costs
    of the contempt proceedings. As I accept the finding that Careys breach of the
Mareva
order was not deliberately contumacious, I would order costs on
    a partial indemnity basis.

DISPOSITION

[70]

I
    conclude that the motion judges decision of September 10, 2012 to set aside
    her initial October 17, 2011 finding of contempt should itself be set aside and
    her order of October 17, 2011 should be restored for two reasons. First, the
    motion judge erred in permitting Carey to attack her initial finding of
    contempt, and second, and in any event, she erred in the legal test she applied
    to Careys conduct.

[71]

Laiken
    is entitled to her costs on a partial indemnity scale. Both parties asked for
    approximately $20,000 for costs of the appeal and I fix the costs in that
    amount. If the parties are unable to agree as to the costs of the proceeding in
    the Superior Court, they may file brief written submissions to this panel.

Robert J. Sharpe
    J.A.

I agree M. Rosenberg
    J.A.

I agree E.E. Gillese
    J.A.

Released: August 27, 2013


COURT OF APPEAL FOR ONTARIO

CITATION: Shekhdar v. K & M Engineering and Consulting
    Corporation, 2013 ONCA 521

DATE: 20130822

DOCKET: C49094

Doherty, Rosenberg and Tulloch JJ.A.

Kersasp Shekhdar

Plaintiff
    (Appellant)

and

K & M Engineering and Consulting Corporation,
    Freewills Inc., Freewills.com (U.S.) Inc., William Kappaz, Regina Guerin,
    Freewills.com (Bermuda) Limited also known as Freewills.com (Bermuda) Ltd.,
    Freewills.com (Canada) Inc. and 3693759 Canada Inc.

Defendants
    (Respondents)

Kersasp Shekhdar, appearing via videoconference

Matthew Moloci, for the respondents

Heard and released orally:  August 13, 2013

On appeal from the judgment of Justice J. Thorburn of the
    Superior Court of Justice, dated June 6, 2008.

ENDORSEMENT

[1]

The trial judge identified the applicable legal principles and applied
    those principles to the facts as found by her.  Her findings of fact are
    entitled to deference.  We have not been convinced that we can interfere with
    any of her factual findings.

[2]

On the trial judges finding, the agreement of April 25, 2001 governed
    the working relationship between the appellant and the respondent, K & M
    Engineering throughout the relevant time period.  That agreement provided for
    termination for any reason whatsoever or no reason on 15 days prior written
    notice.

[3]

The trial judge found that the appellant did not breach the terms of his
    agreement with K & M Engineering and Consulting Corporation at least to the
    extent that K & M Engineering and Consulting Corporation was entitled to
    terminate the contract without any prior notice.  The trial judge further
    found, however, in accordance with the language of the agreement that K & M
    Engineering and Consulting Corporation was entitled to terminate the working
    relationship with the appellant for any reason or no reason upon 15 days
    written notice.

[4]

The trial judges interpretation of the clear language of the agreement
    is unassailable regardless of whether the appellant is characterized as an
    employee or an independent contractor.  In accordance with the termination
    provision in the contract, the trial judge awarded damages in the amount of
    $3,789.93.

[5]

The trial judge carefully considered and rejected the various other
    claims advanced by the appellant.  We see no error in her analysis of those
    claims or in the conclusions she reached.

[6]

The appeal is dismissed.

[7]

The respondent will provide written submissions as to costs of no more
    than five pages within 30 days.  The appellant will reply in no more than five
    pages with his submissions on costs within 30 days thereafter.

Doherty J.A.

M. Rosenberg J.A.

M. Tulloch J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Stetler v. Stetler, 2013 ONCA 508

DATE: 20130802

DOCKET: M42695 (C55957)

Lauwers J.A. (In Chambers)

BETWEEN

Dudley Wyatt Herbert Stetler

Appellant (Responding Party)

and

Connie Christine Stetler

Respondent (Moving Party)

Paul D. Amey, for the moving party

Dudley Stetler, acting in person

Eric Morgan, as
amicus curiae

Heard: July 31, 2013

On a motion for security for costs on an appeal from the
    order of Justice Patrick J. Flynn of the Superior Court of Justice, dated August
    3, 2012, which is reported at 2012 ONSC 4466.

ENDORSEMENT

[1]

This is a motion by the respondent/moving party for an order under r. 61.06(1)
    of the
Rules of Civil Procedure
for security for the costs of this
    appeal.

[2]

When this motion was called for submissions,
Amicus
requested
    an adjournment on the basis that Mr. Stetler had had an inadequate amount of
    time to prepare. Counsel for the moving party advised the court that he had
    served virtually the same material on Mr. Stetler in May, 2013 and that he had
    also advised Mr. Stetler on July 24, 2013 that he would not agree to an
    adjournment.  Mr. Stetler filed a significant responding material and factum,
    and was prepared to argue. I refused the adjournment. As it turned out, Mr.
    Stetler knew the material and was both articulate and well-spoken.

[3]

The trial judge maintained the status quo in terms of custody and access.
    He ordered the appellant to pay to the respondent an equalization payment of
    $75,000, child support for two children in the total amount of $555 per month,
    and costs in the amount of $32,000. The appellant is now in arrears of child
    support in an amount close to $10,000.

[4]

The moving party submits that the appeal is frivolous and vexatious. On
    the issue of custody and access, the appellant sought week-about access. The
    trial judge continued the status quo. The appellant complains that the trial
    judge gave no weight to the report of Paul Ricketts, a social worker whose
    report was in the continuing record. Counsel for the moving party points out
    that the report was not filed in evidence at the trial and that Mr. Ricketts
    was not called as a witness. The appellant complains that his trial counsel
    failed to get the report into evidence as he instructed, and also failed to ensure
    that an alternate access schedule that would include shared holiday access was
    not put forward. These are not valid grounds of appeal.

[5]

With respect to child support, the appellant asserts that he is paying
    to the full extent possible given his bleak financial circumstances, which the
    trial judge failed to take into account. The appellant entered into an
    arrangement with the Family Responsibility Office only recently in which he has
    agreed to the required monthly payment and to pay an additional $100 per month
    towards the arrears. This is plainly not a particularly robust effort to deal
    with child support arrears.

[6]

The issue of the appellant’s true income occupied much trial time. An
    understandably frustrated trial judge was driven to impute an income to the
  appellant. At para. 27, the trial judge said:

I have not had the help of any expert witness but it seems to
      me that through two separate divorce proceedings, this man's character is
      defined. He will not tell the court what his income is and defies us to guess.
      He is not cooperating at all, nor is he following his duty at law to provide us
      with updated financial information. Moreover, I must draw an adverse inference
      from his failure to call his sister (the accountant) and his father who could
      have corroborated his evidence or given us the truth with respect to the amount
      of money that his father has paid him and whether or not he intends to collect
      on his mortgage debt. While there is no scientific reason to do this, I prefer
      to impute income of $36,000 per annum to the Applicant. He refused to help
      himself out or prove me wrong and it is his obligation to demonstrate what his
      income is. Moreover, he is about to take over the farm from his 75 year old
      father and there is no evidence of any physical or mental impairment to his
      working full-time and earning a decent living. In fact, he runs a small
      construction concern, receiving income, some of which he didn't declare.

[7]

The trial judge imputed an income of $36,000 per year to the appellant
    on the basis he had been working on his fathers farm full-time and did not
    call his father, Wyatt Stetler, as a corroborating witness concerning his income.

[8]

With respect to the equalization payment, the moving party asserts that
    the only issue with respect to the valuation of the matrimonial home was how to
    account the $38,500 second mortgage in favour of the appellants father that
    was placed on the matrimonial home on June 1, 1999. The trial judge found that
    the appellant had paid nothing on the mortgage in 13 years and that there had
    been no demand for payment to date by his father. While the appellant testified
    that he intended to repay the mortgage, the respondent testified to the
    contrary. Again Wyatt Stetler was not called to give evidence although he was
    present in the court house. The trial judge drew an adverse inference against
    the appellant because of that failure to testify.  In consequence, the trial
    judge discounted the amount of mortgage to nil in fixing the appropriate
    equalization payment.

[9]

The
    appellant also argued that counsel for the moving party had a conflict of
    interest because he acted for Wyatt Stetler in his matrimonial proceedings in
    the 1980s. This issue was not raised at any time before the appearance before
    me. Mr. Stetler claimed that he had tried to get his counsel to raise the issue
    but his counsel refused. This submission does not relate to the merits of the
    appeal.

[10]

The
    moving party submits that there is no evidence that the appellant owns assets capable
    of answering a costs award of this court, given the value of the matrimonial
    home less the various charges now registered against it. There is no equity in
    the home if the interests of Wyatt Stetler in two mortgages plus interest in
    the home are fully factored in.

[11]

Consistent
    with the authority of this court in
Schmidt v. The Toronto Dominion Bank
(1995),
24
    O.R. (3d) 1
, in my view, the moving party has demonstrated my
    satisfaction that there is good reason to believe that the appeal has no merit.
    The appellants litigation posture has been and continues to be recalcitrant. The
    moving party has also demonstrated that there appears to be good reason to
    believe that the appellant has insufficient assets in Ontario to pay the costs
    of the appeal.

[12]

The
    moving party seeks $12,000 in security for costs. I order the appellant to
    deposit $8,500 to the credit of this appeal with the court no later than
    September 15, 2013, failing which the appeal will be dismissed.

P. Lauwers
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: S-Vox Foundation v. Zoomermedia
    Limited, 2013 ONCA 534

DATE: 20130830

DOCKET: C56810

Sharpe, Epstein and Lauwers JJ.A.

BETWEEN

S-Vox Foundation

Applicant (Appellant)

and

Zoomermedia Limited

Respondent (Respondent in Appeal)

Ronald D. Manes and Joshua Ginsberg, for the appellant

Daniel F. Chitiz and E. Young for the respondent

Heard: August 29, 2013

On appeal from the judgment of Justice H.J. Wilton-Siegel
    of the Superior Court of Justice, dated June 15, 2019.

APPEAL BOOK OF ENDORSEMENT

[1]

We are not persuaded that the application judge erred in dismissing the
    application to appoint an arbitrator pursuant to s. 2.8 of the agreement. The application
    judge did so on the ground that the appellant had commenced a s. 8.18
    arbitration on all issues including working capital. Having done so, the
    application judge found that the appellant was bound to proceed with that
    arbitration and not change horses mid course.

[2]

We do not agree that he thereby determined all jurisdictional issues. He
    was most careful to reserve all issues, including jurisdiction, to the arbitration.

[3]

We note that the respondent clearly and firmly took the position before
    the application judge and before this court that a s. 8.18 arbitration has
    jurisdiction to determine all issues, including working capital.

[4]

The appeal is dismissed. Costs to the respondent fixed at $15,749.28
    inclusive of disbursement and taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: Tordjman v. Goodfellow, 2013
    ONCA 523

DATE: 20130821

DOCKET: C56516

Goudge, Watt and Pepall JJ.A.

BETWEEN

Suzanne Tordjman

Applicant (Respondent)

and

Ian Goodfellow

Respondent (Appellant)

Ian Goodfellow, appellant appearing in person

Michael Polisuk, for the respondent

Heard: August 21, 2013

On appeal from the judgment of Justice John R. McCarthy
    of the Superior Court of Justice, dated December 13, 2013.

APPEAL BOOK ENDORSEMENT

[1]

We see no error in McCarthy J.s exercise of discretion in declining to
    reinstate.

[2]

The appeal is dismissed.  Costs to the respondent fixed in total at
    $2500.


COURT OF APPEAL FOR ONTARIO

CITATION: Van Damme v. Gelber, 2013 ONCA 525

DATE: 20130822

DOCKET: C56358

Doherty, Cronk and Lauwers JJ.A.

Alexandre
    Van Damme

Applicant (Respondent in Appeal)

and

Nahum Gelber
and
    Gasiunasen Gallery of Palm Beach, Inc.

Respondents
    (Appellants)

Benjamin Zarnett and Julie Rosenthal, for the respondent
    (appellant) Gelber

Jeff Galway and Max Shapiro, for the applicant (respondent)

Heard:  May 2, 2013

On appeal from the order of Justice Lederer of the Superior
    Court of Justice, dated November 9, 2012, reported at 2012 ONSC 6277.

COSTS ENDORSEMENT

[1]

Costs to the respondent in the amount of $23,000, inclusive of relevant
    disbursements and taxes.

Doherty J.A.

E.A. Cronk J.A.

P. Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: 2195002 Ont. Inc. v. Tribute Resources
    Inc., 2013 ONCA 576

DATE: 20130926

DOCKET: C56232

Doherty, Simmons and Pepall JJ.A.

BETWEEN

2195002 Ontario Inc.

Applicant (Respondent in Appeal)

and

Tribute Resources Inc.

Respondent (Appellant in Appeal)

Christopher A. Lewis, for the appellant

William Mitches, for the respondent

Heard: June 11, 2013

On appeal from the judgment of Justice Helen A. Rady of
    the Superior Court of Justice, dated October 18, 2012, with reasons reported at
    2012 ONSC 5412, 113 O.R. (3d) 67.

By the Court:

[1]

This appeal involves a dispute
    over the interpretation of various oil and gas agreements and whether they
    confer a right to inject and store gas into and under certain lands now owned
    by McKinley Farms Limited (the McKinley Lands). Both the appellant, Tribute
    Resources Inc. (Tribute), and the respondent, 2195002 Ontario Inc. (219
    Ontario), claim the right to inject and store gas into and under the McKinley
    Lands under agreements made with the landowner.

[2]

The application judge held that
    219 Ontario was entitled to the disputed rights by virtue of a Gas Storage
    Lease made in March 2009 (the 219 Ontario Gas Storage Lease).  She rejected
    Tributes claim to those rights under an Oil and Gas Lease dated October 12,
    1977 (the 1977 Oil and Gas Lease) as amended by a Unit Operation Agreement
    dated November 30, 1984 (the 1984 Unit Operation Agreement).

[3]

Although the application judge accepted
    that the 1977 Oil and Gas Lease and the 1984 Unit Operation Agreement conveyed
    certain gas storage rights that were in turn subsequently assigned to Tribute,
    she found that those rights were replaced by the terms of a Gas Storage Lease
    entered into by Tribute and
McKinley
    Farms Limited
on September 24, 1998 (the
    1998
Tribute Gas Storage Lease
).

[4]

Previous litigation that reached this court determined that the 1998
    Tribute Gas Storage Lease terminated in September 2008: see
Tribute Resources Inc. v. McKinley Farms Ltd.
,
2010 ONCA 392, 263 O.A.C. 214.
The
    application judge concluded that the termination of the 1998 Tribute Gas
    Storage Lease left Tribute without any right to store gas on the McKinley
    Lands. Any of Tributes gas storage rights with respect to the land had been
    replaced by the terms of the now terminated 1998 Tribute Gas Storage Lease. The
    219 Ontario Gas Storage Lease was, therefore, the only agreement permitting gas
    storage rights on the McKinley Lands.

[5]

On appeal, Tribute argues that the
    1977 Oil and Gas Lease and the 1984 Unit Operation Agreement do contain gas
    storage rights and that those rights continue to exist despite the termination
    of the 1998
Tribute Gas Storage Lease
.  Tributes argument turns primarily on the
    interaction of the relevant provisions of these three documents and, in
    essence, involves an issue of contractual interpretation.

[6]

219
    Ontario submits that the application judge properly interpreted the relevant
    documents. However, 219 Ontario also raises a preliminary argument that this
    courts jurisdiction to hear this appeal has been ousted because of an order
    made by the Ontario Energy Board (the OEB) after the application judges
    decision.

[7]

For
    the reasons that follow, we reject 219 Ontarios preliminary argument and, in
    addition, we dismiss Tributes appeal.

A.

219 Ontario
s preliminary Argument

[8]

As a preliminary argument, 219 Ontario submits
    that although the application judge had jurisdiction to determine the
    contractual rights of the parties under the various agreements, this court has
    no jurisdiction to entertain an appeal from the application judges decision
    because of an order made by the OEB four months after the application judges
    decision in respect of the McKinley Lands.

[9]

On December 21, 2012, at the request of Tribute,
    the OEB made an order under s. 36.1 of
Ontario Energy Board Act
, 1998, S.O. 1998, c. 15, Sched. B (the Energy Act) designating
    the McKinley Lands as a gas storage area and a further order under s. 38 of the
    Energy Act authorizing Tribute to inject, store and remove gas from those
    lands. In addition, the OEB stayed the pending compensation application in
    relation to those lands pending conclusion of all related court proceedings
    including any appeal of [the application judges decision]. Presumably, 219
    Ontarios contractual rights in the lands, if any, would be relevant to any
    compensation order made by the OEB.

[10]

219 Ontarios preliminary argument is premised
    on various provisions of the
Energy Act
that deal with the OEBs authority to regulate gas storage areas and
    on this courts decision in
Snopko v. Union Gas Ltd.
,
2010 ONCA 248
100
    (O.R.) (3d) 161, interpreting those provisions.

[11]

As
    described in
Snopko
, at para. 22:

[u]nder the [Energy] Act, the [OEB] has broad
    jurisdiction to regulate the storage of natural gas, to designate an area as a
    gas storage area, to authorize the injection of gas into that area, and to
    order the person so authorized to pay just and equitable compensation to the
    owners of the property overlaying the storage area.

[12]

Under s.
    36.1(a) of the Energy Act, the OEB may designate an area as a gas storage area
    for the purposes of the Act.

[13]

Section 37
    prohibits the injection of gas for storage into a geological formation:

unless the geological formation is
    within a designated gas storage area and, in relation to gas storage areas
    designated after January 31, 1962, unless  authorization has been obtained..

[14]

Under s.
    38(1) of the Energy Act, the OEB may authorize the injection, storage and
    removal of gas from a designated gas storage area.

[15]

Subject
    to any agreement, s. 38(2) requires a person authorized to inject, store and
    remove gas from a designated gas storage area to make just and equitable compensation
    to the owners of such rights with respect to those rights and for any damage
    resulting from their exercise.

[16]

Notably, s. 38(3) of
    the Energy Act gives the OEB exclusive jurisdiction to deal with compensation
    issues relating to authorized injection and storage rights and prohibits civil
    proceedings with respect to such issues:

38. (3) No action or other
    proceeding lies in respect of compensation payable under this section and,
    failing agreement, the amount shall be determined by the Board.

[17]

Further, s. 19 of the
    Energy Act gives the OEB the authority to hear and determine all questions of
    fact and law falling within its jurisdiction together with exclusive
    jurisdiction in respect of all matters in which jurisdiction is conferred on it
    by the Energy Act:

19. (1) The Board has in all matters
    within its jurisdiction authority to hear and determine all questions of law
    and fact.

(6) The Board has exclusive
    jurisdiction in all cases and in respect of all matters in which jurisdiction
    is conferred on it by this or any other Act.

[18]

In
Snopko
, this court upheld a decision dismissing for want of
    jurisdiction an action brought by land owners against a company authorized to
    inject and store gas on their lands where the action was commenced after a s.
    38 compensation order had been made.

[19]

In
Snopko
, the landowners action was framed in
    misrepresentation, breach of contract, unjust enrichment, nuisance and
    negligence. This court held that in determining whether an action or proceeding
    falls within the prohibition contained in s. 38(3), it is the substance and not
    the form of the claim that governs. On the facts of that case, this court found
    that despite their legal labels, in substance, the landowners claims fell
    within the scope of just and equitable compensation as described in s. 38(2)
    of the
Energy Act
.

[20]

Relying on
Snopko
and on the various provision of the
Energy Act
to which we have
    referred, 219 Ontario contends that the orders designating the McKinley Lands
    as a gas storage area under the
Energy Act
and authorizing Tribute to inject, store and remove
    gas into and from those lands had the effect of ousting the courts
    jurisdiction to further adjudicate the issues of contractual interpretation in
    dispute on this appeal.

[21]

We do not accept 219 Ontarios
    submissions. The issue of jurisdiction was raised in the Superior Court. It is
    now undisputed that the application judge had jurisdiction to make her
    decision. In our view, nothing in s. 38(3) of the Energy Act ousts the
    jurisdiction of this court to entertain an appeal on the merits from a final
    order of a Superior Court judge made within its jurisdiction.

[22]

Tribute brought a preliminary
    application in the Superior Court objecting to that courts jurisdiction to
    entertain the application because of its pending application to the OEB for
    orders under ss. 36.1 and 38 of the Act. In an endorsement dated January 6,
    2012, Bryant J. dismissed Tributes objection: see
Tribute Resources
    Inc. v. 2195002 Ontario Inc.
,

2012
    ONSC 25.

[23]

In his endorsement, Bryant J.
    concluded that this courts decision in the previous litigation between the
    parties,
Tribute Resources Inc. v. McKinley Farms
,
resolved the jurisdiction issue.

[24]

At the time of the appeal hearing
    in the previous litigation, Tribute had a prior application pending before the
    OEB for an order designating the McKinley Lands as a gas storage area and for
    injection and storage rights.

[25]

At paras. 18 and 19 of this
    courts previous decision, Juriansz J.A. held that s. 38(3) of the Energy Act

did not affect the courts jurisdiction:

The parties are agreed that the recent decision of this court
    in
Snopko v. Union Gas Ltd.
(citations omitted), does not apply to
    this case. In
Snopko
, this court examined the scope of the privative
    clause set out in s. 38(3) of the [Energy Act]

Section 38(1) provides that the OEB may make a designation
    order authorizing a person to inject gas into, store gas in and remove gas
    from a designated gas storage area and, and to enter into and upon the land in
    the area and use the land for that purpose and such an authorized person is
    required under s. 38(2) to make just and equitable compensation for the right
    to store gas or for any damage resulting from the authority to do so.
The
    substances of the claims in this case do not fall within the language of s.
    38(2) as no designation order has been made by the OEB in relation to these
    lands.
The courts jurisdiction to determine the questions on appeal is
    not at issue. [Emphasis added.]

[26]

At paras. 23 and 24 of his endorsement,
    Bryant J. adopted this reasoning. He held that the interpretation of the leases
    was not within the OEBs exclusive jurisdiction because the OEB had not yet
    made an order designating the proposed storage areas under the Energy Act.

The pending application filed by 219 [Ontario], dated September
    1, 2011, requests a judge of the Superior Court to interpret the Tribute Oil
    and Gas Lease and the 219 Ontario Gas Storage Lease. The Board has not
    designated a gas storage area or authorized a person to inject gas into,
    store gas in and remove gas from a designated gas storage area and to enter
    into and upon the land in the area and use the land for that purpose or made a
    compensation order under s. 36.1, s. 38(1), s. 38(2) or s. 38(3) of the [Energy
    Act].

In my view, the substance of the claims made by 219 Ontario in
    its application to the Superior Court for the interpretation of leases does not
    fall within the language of s. 36.1, s. 38(1) or s. 38(2) of the [Energy Act].
    I find that judges of the Superior Court regularly interpret leases and other
    contracts and have the jurisdiction to interpret the contacts at issue and to
    grant the relief sought by 219 Ontario. I further find that the interpretation
    of the leases is not within the exclusive jurisdiction of the Board because the
    Board has not made an order designating the proposed storage areas under s.
    36.1 or 38 of the Act [Energy Act]. [Footnotes omitted.](
Tribute v.
    McKinley, supra
, at paras. 18 and 19).

[27]

Bryant J.s decision was not
    appealed.

[28]

The
    jurisdiction of this court to entertain this appeal derives from s. 6 of the
Courts
    of Justice Act
, R.S.O. 1990, c. C. 43 (the CJA). Under s. 6(1)(b) of the
    CJA, this court has jurisdiction to entertain an appeal from the application
    judges decision because it is a final order of a Superior Court judge.

[29]

The parties agree that the application judge had jurisdiction to
    render her judgment interpreting the relevant contractual documents. Her
    judgment is a final order and nothing in s. 38(3) of the
Energy
    Act
ousts this courts jurisdiction to entertain an appeal under s.
    6(1)(b) of the CJA. Neither the decision of the application judge, nor this
    decision, address compensation under the
Energy Act
.
    The order of the OEB made some four months after the decision of the
    application judge cannot turn what was an order interpreting contractual rights
    into an order for compensation under the Energy Act.

[30]

The questions of what, if any,
    effect this courts decision will have on the OEBs determination of the compensation
    issues now outstanding under the
Energy Act
and whether this appeal may now be moot are different
    issues than the jurisdictional issue raised by 219 Ontario.

[31]

The fact that this court has
    jurisdiction to entertain an appeal from the application judges decision does
    not determine the question of the effect, if any, of this courts decision on
    the compensation issues under the
Energy Act
.

[32]

We make no comment on that
    subject, which will be a matter for the OEB to determine.

[33]

To the extent that 219 Ontario may be arguing that
    this court should not entertain this appeal because the OEB is entitled to make
    its own determination of the issues decided by the application judge thus
    making this appeal moot, we would not give effect to that argument in the circumstances
    of this case.
Although 219 Ontario submits that this court should not
    hear this appeal, it also submits that the OEB is bound by the application
    judges decision. We reject that position. 219 Ontario cannot have it both
    ways. If the OEB decides it is bound by the application judges decision, the
    issues before this court are not moot.

[34]

In
    any event, as we have said, in its December 21, 2012, decision, the OEB stayed
    the compensation application in relation to the McKinley Lands pending the
    conclusion of all related Court proceedings  including any appeal of Superior
    Court File No. 5041/2011. The terms of this order indicate that from the
    perspective of the OEB, the outcome of this appeal has potential relevance to
    the terms of any compensation order to be made by the OEB. Accordingly, even if
    this appeal is now technically moot because the OEB is entitled to make its own
    determination of the issues determined by the application judge, we would
    exercise our discretion to decide it: see
Borowski v. Canada (Attorney
    General)
, [1989] 1 S.C.R. 342, at p. 353.

B.

the interpretation issue

[35]

The application judge gave several reasons for
    holding that the 1998 Tribute Gas Storage Lease replaced the gas storage rights
    conveyed under the 1977 Oil and Gas Lease as amended by the 1984 Unit Operation
    Agreement. Tribute raises multiple grounds of appeal relating to those reasons.
    In our view, it is unnecessary that we address all of Tributes arguments
    because an examination of the agreements at issue demonstrates that the
    application judges conclusion is correct.

(1)

The
Agreements at Issue

[36]

In her reasons, the application
    judge briefly reviewed the agreements at issue. In doing so, she reproduced
    relevant provisions of the 1977 Oil and Gas Lease that refer to storage rights:

That the Land Owner  does hereby grant, demise, and lease to
    Operator for the term of ten years and so long thereafter as oil or gas are
    produced in paying quantities, or storage operations are being conducted, and
    Land Owner also leases to Operator the exclusive right to drill for, produce,
store
,
    treat, transport and remove by any method all oil and gas found in or under the
    said lands,
to store in any gas sands on the premises and withdraw
    their from gas originally produced from other lands

If, at any time prior to the termination of this lease, the
    Operator should decide to utilize
any underlying productive gas sand as
    a storage reservoir for the gas originally produced from other lands
,
Operator agrees to notify Land Owner of such utilization, and thenceforth to
    pay Land Owner double the herein specified acreage rental amount as full
    compensation for the storage rates hearing granted and in lieu of all delay
    rental  [Emphasis added by application judge.]

[37]

The application judge noted that
    gas was discovered on the McKinley Lands by Tributes predecessor in 1982 and
    1983.Following that discovery, the 1977 Oil and Gas Lease was amended by the
    1984 Unit Operation Agreement, which included detailed provisions relating to
    production royalties and which replaced the royalty provisions in the 1977 Oil
    and Gas Lease. Once again, the application judge reproduced relevant portions
    of the 1984 Unit Operation Agreement that refer to storage rights:

AND WHEREAS it is believed that the Salina and Guelph-Lockport
    formation underlying those certain lands listed and described in Schedule B
    hereunto annexed and a part hereof, (and which include all or part of the said
    lands) contain a gas as or gas and oil reservoir or pool known as the Stanley
    4-7-XI Pool as hereinafter defined;

AND WHEREAS for the purpose of protecting the Stanley 4-7-XI
    Pool  and for the protection of their correlative rights  the parties hereto
    desire to amend the said lease and to unite and combine that portion of the
    said lands which is included in Schedule B  with all of the other lands in
    the said schedule, into a single operative unit

12. If, at any time prior to the termination of this Agreement,
    the Lessee should decide to utilize
the underlying productive gas sand
    as a storage reservoir
for gas originally produced from other lands,
    the Lessee agrees to notify the Lessor of such utilization, and thenceforth to
    pay Lessor double the herein specified acreage rental amount as full
    compensation for the storage rights herein granted and in lieu of all delay
    rental in event there is a productive well or wells on these lands at the date
    of said notification
the Lessee shall not commence utilization of the
    lands as a storage reservoir without first entering into an agreement with the
    Lessor to settle the value of the Lessors royalty

16. Excepting as herein hereby expressly modified or amended,
the
    said lease shall continue in all respects in full force and effect for so long
    as therein provided, and the same as so amended or modified is ratified and
    confirmed

[Emphasis added by application judge.]

[38]

As for the 1998 Tribute Gas
    Storage Lease, the application judge noted that it included, among others, the
    following terms:

The Lessor doth hereby demise and lease unto the Lessee  the
    said lands save and except the surface rights thereto  to be held by the
    Lessee subject to the oil and gas lease, as tenant for a term of Ten (10) years
    from the date hereof, subject to renewal as hereinafter provided, for the
    purpose of injecting, storing and withdrawing gas, natural and/or artificial,
    within or from the devised lands

16.
Subject to its rights, if any, under the oil and
    gas
lease, the Lessee shall not inject gas into the demised lands
    under the provisions hereof unless

21. This Agreement expresses and constitutes the entire
    agreement between the Parties, no implied covenant or liability of any kind is
    created or shall arise by reason of these present or anything herein contained.
    [Emphasis added by application judge.]

[39]

In addition, the application judge
    referred to the following terms contained in Schedule B to the 1998 Tribute Gas
    Storage Lease:

·

a termination provision;

·

the 1998 compensation rates for
    crop damage and the mechanism for their calculation in ensuing years; and

·

a term stating, all provisions in
    this schedule shall be additional and shall be paramount with any of the terms
    contained in the original agreement.

(2)

The Application Judges Reasons

[40]

After reviewing the agreements at
    issue and the legal principles relevant to the interpretation of commercial
    contracts, the application judge turned to her analysis. She concluded that the
    1998 Tribute Gas Storage Lease was intended to replace gas storage rights
    contained in the 1977 Oil and Gas Lease and in the 1984 Unit Operation
    Agreement for several reasons.

[41]

First, the 1998 Tribute Gas
    Storage Lease contained an entire agreement clause. The application judge said,
    [t]his must mean that all matters pertaining to storage are contained in that
    lease.

[42]

Second, Schedule B to the 1998
    Tribute Gas Storage Lease stated all provisions in this schedule shall be
    additional and shall be paramount with any of the terms contained in the
    original agreement. The application judge concluded that this was a clear
    expression of the parties intention that the [
1998 Tribute Gas Storage Lease]
was
    to prevail [over the earlier agreements], at least in respect of those matters
    dealt with in the schedule.

[43]

Third, in the application judges
    view, the 1984 Unit Operation Agreement supported her conclusion. The 1984 Unit
    Operation Agreement contemplated that a further agreement would be entered into
    prior to the lessee beginning to use the lands as a gas storage reservoir.
    Further, while the 1984 Unit Operation Agreement specifically provided that
    except as modified by it, the 1977 Oil and Gas Lease remained in full force and
    effect, the
1998 Tribute Gas Storage
    Lease
contained no such language.

[44]

Fourth, the
1998 Tribute Gas Storage Lease
contained broader storage rights and more detailed
    provisions relating to storage rights than the earlier agreements. In the
    application judges view:

[t]he parties subsequent conduct in executing a specific
    storage lease support[ed] the common sense conclusion that they considered that
    the earlier lease dealt primarily with drilling and extraction rights and did
    not adequately provide for storage.

In her view, it was disingenuous for Tribute to
    assert that the 1998 Tribute Gas Storage Lease was created to supplement the
    earlier agreements. The broader rights and privileges included in the 1998
    Tribute Gas Storage Lease were:

strong objective evidence that the parties intended the storage
    lease to provide for all of the contractual rights and obligations governing
    storage and that it was to replace rather than supplement the earlier
    agreement.

(3)

Tribute

s Position on Appeal

[45]

Tribute submits that the
    application judge made multiple errors in her interpretation of the
1998 Tribute Gas Storage Lease
:

·

she failed to consider and give
    meaning to the four references in the
1998
    Tribute Gas Storage Lease
to that
    agreement being subject to the oil and gas lease;

·

she erred in relying on the entire
    agreement clause in the
1998 Tribute Gas
    Storage Lease
as supporting her interpretation
    that the
1998 Tribute Gas Storage Lease
replaces the earlier agreements;

·

she erred in failing to accept the
    uncontradicted evidence of Tributes representative that the
1998 Tribute Gas Storage Lease
was intended to supplement the earlier agreements and
    to provide Tribute with a modern form of gas lease to submit to the OEB;

·

she erred in concluding that the
    words original agreement in Schedule B to the
1998 Tribute Gas Storage Lease
referred to the 1977 Oil and Gas Lease as opposed to the pre-printed section of
    the
1998 Tribute Gas Storage Lease
; and

·

she erred in concluding that the
    language of the 1984 Unit Operation Agreement supported her interpretation.

[46]

In addition, Tribute asserts that
    the application judges findings are procedurally unfair because she referred
    in her reasons to six decisions not relied on by 219 Ontario and because her
    central conclusion that the
1998 Tribute
    Gas Storage Lease
was intended to replace
    gas storage rights contained in earlier documents was not anchored in the pleadings.

(4)

Discussion

[47]

As we have said, in our view, an
    examination of the agreements at issue demonstrates that the
1998 Tribute Gas Storage Lease
was intended to replace the earlier agreements
    insofar as they related to gas storage rights. We note, first of all, that the
    1998 Tribute Gas Storage Lease is, on its face, a detailed document designed
    specifically to address gas storage rights, whereas the 1977 Oil and Gas Lease
    as amended by the 1984 Unit Operation Agreement addresses the issue of gas
    storage rights somewhat peripherally.

[48]

Both the title and terms of the
    1998 Tribute Gas Storage Lease demonstrate that the agreement was designed
    specifically to address gas storage rights. The document is called, and
    registered on title as, a Gas Storage Lease Agreement. The demising clause
    states that the lands (save and except the surface rights) are leased for the
    purpose of injecting, storing and withdrawing gas, natural and/or artificial
    within or from the demised lands. The terms of the 1998 Tribute Gas Storage
    Lease are detailed and make more specific provision for matters addressed in
    less detail in the earlier agreements.

[49]

For example,
Schedule B to the 1998 Tribute Gas Storage Lease makes
    specific provision for
the 1998
    compensation rates for crop damage for individual crops and the mechanism for
    calculation of crop damage rates in ensuing years.

[50]

By way of contrast, the 1977 Oil
    and Gas Lease as amended by the 1984 Unit Operation Agreement deals primarily
    with oil production and royalties issues. Although gas storage rights are
    provided for, they are not the main focus and are not dealt with in the same
    level of detail as in the 1998 Tribute Gas Storage Lease.

[51]

Perhaps more importantly, the
    payment provisions of the 1998 Tribute Gas Storage Lease are different than,
    and inconsistent with, the payment provisions of the 1977 Oil and Gas Lease as
    amended by the 1984 Unit Operation Agreement.

[52]

The latter documents provide a per
    acreage charge for gas storage rates and require that the parties enter into a
    further agreement to address residual royalties. Clause 12 of the 1984 Unit
    Operation Agreement states:

12. If, at any time prior to the termination of this Agreement,
    the Lessee should decide to utilize the underlying productive gas sand as a
    storage reservoir for gas originally produced from other lands, the Lessee
    agrees to notify the Lessor of such utilization, and thenceforth to pay Lessor
    double the herein specified acreage rental amount as full compensation for the
    storage rights herein granted and in lieu of all delay rental in event there is
    a productive well or wells on these lands at the date of said notification the
    Lessee shall not commence utilization of the lands as a storage reservoir
    without first entering into an agreement with the Lessor to settle the value of
    the Lessors royalty.

[53]

In contrast, the 1998 Tribute Gas
    Storage Lease provides that the lessee will serve a notice of what it proposes
    to pay for gas storage rights and that if the parties cannot agree, the issue
    will be determined by arbitration. Clauses 16-18 of the 1998 Tribute Gas
    Storage Lease read as follows:

16. Subject to its rights, if any, under the oil and gas lease,
    the Lessee shall not inject gas into the demised lands under the provisions
    hereof until it has offered to the Lessor the additional acreage rental to be
    paid to the Lessor in respect of its storage operations to be conducted
    hereunder in the manner hereinafter provided and until it has offered to
    purchase from the Lessor, as hereinafter provided, the Lessors interest in
    such of the gas and oil and related hydrocarbons (hereinafter called the
    petroleum substances) contained in the demised lands as are liable on the
    withdrawal of the gas so injected to be co-mingled indistinguishably therewith
    as to their respective volumes, or as are liable to be rendered commercially
    unrecoverable by reason of such injection or the storage operations to be
    conducted by the Lessee hereunder. Nothing herein shall prevent the Lessee from
    and it is hereby given the right at any time and from time to time to purchase
    the Lessors interest in any or all the other petroleum substances contained in
    the demised lands.

17. The purchase price of any of the petroleum substances to be
    purchased by the Lessee under Clause 16 hereof shall be computed as follows:

18. In the event that the Lessee desires to purchase any of the
    petroleum substances as provided in Clauses 16 and 17 hereof, it shall give
    written notice to the Lessor of the quantity thereof to be purchased, the price
    therefor computed as provided in Clause 17(a) and the effective date of such
    purchase. The Lessee shall in addition state the additional acreage rental to
    be paid by the Lessee in respect of its storage operations to be conducted
    hereunder. The Lessor shall within Thirty (30) days from the receipt of the
    aforesaid notice advise the Lessee that it disputes either the purchase price
    or the additional acreage rental or both of them and in default of such notice
    of dispute the Lessor shall be deemed to have agreed thereto and the same shall
    become final and binding upon the Lessor and the Lessee. In the event that the
    Lessor gives such notice of dispute, such purchase price and additional acreage
    rental and any other compensation payable to the Lessor in respect of the
    Lessees storage rights hereunder shall be determined by a board of arbitration
    in the manner provided under the Energy Board Act of Ontario and the
    regulations thereunder or any act or regulations in amendment or substitution
    therefor.

[54]

In our view, this difference in
    the payment provisions makes it clear that the
1998 Tribute Gas Storage Lease
was
    intended to replace the earlier agreements and not merely to supplement them.
    Because of the difference in the payment provisions, the two sets of documents
    could not co-exist.

[55]

Equally compelling evidence that
    the 1998 Tribute Gas Storage Lease was intended to replace the earlier
    agreements is the fact that this agreement provides that it would terminate if
    the issue of designation of the lands as a Gas Storage Area had not been taken
    to the OEB within ten years.

[56]

The
1998 Tribute Gas Storage Lease
had
    a term of ten years. Clause 3 of the main body of the agreement provides for
    automatic renewal of the agreement upon the expiry of the ten year term unless
    the lessee provided written notice of its desire not to renew the agreement.

[57]

However, Schedule B to the
1998 Tribute Gas Storage Lease
states:

This Gas Storage Lease Agreement shall terminate on the tenth
    anniversary date, if and only if, the Lessee or some other person has not
    applied to the Ontario Energy Board to have the said lands or any part thereof
    designated as a Gas Storage area on or before the tenth anniversary date
    hereof.

[58]

In our view, when read in
    conjunction with clause 3 of
the 1998
    Tribute Gas Storage Lease

providing for the automatic renewal of that agreement,
    the termination provision in Schedule B demonstrates that the parties intended
    Tributes gas storage rights to come to an end if the issue of gas storage
    rights had not been taken to the OEB within the ten year term. The automatic
    renewal provision ensured that Tributes gas storage rights were to continue
    indefinitely and that they were to do so on the terms set out in the 1998
    Tribute Gas Storage Lease. However, they would only continue indefinitely if
    the issue of gas storage rights had been taken to the OEB during the initial
    term of the 1998 Tribute Gas Storage Lease. Otherwise, gas storage rights would
    end.

[59]

Based on our review of the
    relevant agreements, we are satisfied that the application judge was correct in
    holding that the
1998 Tribute Gas Storage
    Lease was intended to replace the earlier agreements.

[60]

Further,
    we reject Tributes claim that it has suffered procedural unfairness. The issue
    before the application judge was the proper interpretation of the agreements at
    issue. Tribute has had a full opportunity to present and respond to arguments
    concerning that issue.

C.

Disposition

[61]

Based on the foregoing reasons, we reject 219
    Ontarios preliminary argument that this court lacks jurisdiction to entertain
    this appeal and we dismiss Tributes appeal. Costs of the appeal are to 219
    Ontario fixed in the amount of $26,150 inclusive of disbursements and
    applicable taxes as agreed upon by the parties.

Released: DD September 26, 2013

D.H. Doherty J.A.

J.M.
    Simmons J.A.

S.E. Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Apotex Inc. v. Abbott Laboratories,
    Limited, 2013 ONCA 555

DATE: 20130912

DOCKET: C56603

Goudge, Watt and Pepall JJ.A.

BETWEEN

Apotex Inc.

Plaintiff (Appellant)

and

Abbott Laboratories, Limited, Takeda
    Pharmaceuticals Company Limited, and Takeda Pharmaceuticals America, Inc.

Defendants (Respondents)

AND BETWEEN

Abbott Laboratories, Limited, Takeda
    Pharmaceuticals America, Inc., Takeda Pharmaceuticals North America, Inc., and
    Takeda Pharmaceuticals Company Limited

Plaintiffs
    by Counterclaim

and

Apotex Inc.

Defendant by Counterclaim

David Conklin and Daniel Cohen, for the appellants

Steven Mason and David Tait, for the respondent Abbott
    Laboratories, Limited

Christopher Van Barr, for the respondents Takeda
    Pharmaceutical Company Limited and Takeda Pharmaceuticals America Inc.

Heard: August 24, 2013

On appeal from the judgment of Justice Michael G. Quigley
    of the Superior Court of Justice, dated January 15, 2013.

ENDORSEMENT

[1]

The appellant appeals from the partial summary judgment dismissing its
    unjust enrichment claim for disgorgement of the respondents profits or
    revenues.

[2]

In this court, the appellant argued that it should be entitled to assert
    such a claim because at trial it may be determined that the Settlement Agreement,
    between the parties giving the Federal Court jurisdiction to award damages
    between September 2008 and May 2009 is unenforceable due to s. 8 of the Patented
    Medicines Regulations (Notice of Compliance) (the Patent Regulations).  If
    so, the appellant says that the trial judge should be able to make the
    disgorgement order sought to make up for its unenforceable right to damages.

[3]

In our view that argument must fail.  The appellant concedes that s.
    14(b) of the Settlement Agreement can give it no more than damages calculated
    according to s. 8 of the Patent Regulations up until May 2009.  The appellant
    also concedes that those damages do not include the disgorgement sought.

[4]

If the extension from September 2008 to May 2009 provided in the
    Settlement Agreement is unenforceable, the deprivation that the appellant
    suffered could be no more than their damages for that period calculated
    according to s. 8 of the Patent Regulations.  That deprivation cannot therefore
    extend to disgorgement by the respondents of their profits or revenues.

[5]

In its factum, the appellant argues more broadly that, despite the Patent
    Regulations, it should be entitled to pursue an unjust enrichment claim for
    disgorgement of the respondents profits or revenues.

[6]

In our view, the simple answer to that argument is that the profits or
    revenues earned by the respondents for which the appellant claims disgorgement
    are due to the operation of the regulatory scheme of the Patent Regulations.
    The respondents right to be in the market to the exclusion of the appellant
    and therefore to earn its profits or revenues is that provided for by the Patent
    Regulations.  Those Regulations constitute a valid juristic reason for the
    respondents profits and revenues for the period in question.  This precludes
    the appellants claim for disgorgement.

[7]

In the end, both arguments fail.  The appeal must be dismissed.

[8]

Costs to the Abbott respondent in the amount of $25,000 in total, and to
    the Takeda respondents $15,000 in total.

S.T.
    Goudge J.A.

David
    Watt J.A.

S.E.
    Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Balogun v. Deloitte
    & Touche, LLP, 2013 ONCA 592

DATE: 20130926

DOCKET: C56744

Laskin, Goudge and Feldman JJ.A.

BETWEEN

Rashid A. Balogun

Appellant (Plaintiff)

and

Deloitte & Touche, LLP

Respondent (Defendant)

Rashid A. Balogun, in person

Carlos Martins, for the respondent

Heard: September 17, 2013

On appeal from the judgment of Justice Edward M. Morgan of
    the Superior Court of Justice, dated February 28, 2013.

APPEAL BOOK ENDORSEMENT

[1]

We agree with the motion judge that the statement the appellant quit is
res
    judicata
.  To the extent the words could be seen to go beyond a mere
    statement the appellant quit, these words are protected by qualified privilege.

[2]

We intervene on the costs award for two reasons: first, we are not
    satisfied that Mr. Balogun had a fair opportunity to make submissions on costs to
    the motion judge; and second, the motion  judges costs award included costs of
    the action, yet the respondent did not provide information about those costs.
    In these circumstances, we think that a fair disposition is to award the
    respondent $15,000 for the costs of the summary judgment motion (all in).  To
    the extent the respondent seeks further costs for the balance of the action,
    those costs should be assessed.

[3]

In the light of the divided success, there shall be no costs of the
    appeal.


COURT OF APPEAL FOR ONTARIO

CITATION: Bronfman-Thomas v. Carreno, 2013
    ONCA 566

DATE: 20130916

DOCKET: C56948

MacPherson, MacFarland and Rouleau JJ.A.

BETWEEN

Brenda Bronfman-Thomas aka Brenda Thomas

Applicant (Appellant)

and

Sonia Carreno and Simon Davidson Jennings

Respondents (Respondents in Appeal)

Application Pursuant to
    Rules 14.05(3)(d) and (h) of the
Rules of Civil Procedure
, and Section
    97 of the
Courts of Justice Act
, R.S.O. 1990, c. C. 43.

Peter C. Wardle, for the appellant

Heidi Rubin and Adrienne Lei, for the respondents

Heard and released orally:  September 11, 2013

On appeal from the judgment of Justice Sidney N. Lederman
    of the Superior Court of Justice, dated March 27, 2013.

ENDORSEMENT

[1]

The appellant purchaser sought the return of her $100,000 deposit, paid
    by her in relation to a real estate transaction that did not close in July,
    2011. The purchase price was $1,510,000.

[2]

After entering the Agreement of Purchase and Sale, the appellant
    discovered the existence of an open building permit in relation to some
    construction on the subject property in 2007.

[3]

In his reasons for judgment, the application judge carefully reviewed
    the facts including the exchange of letters between the solicitors on the date
    that had been scheduled for the closing.

[4]

He concluded, in our view correctly, that the requisition in relation to
    the open building permit could be "satisfactorily answered by a commitment
    to provide title insurance as contemplated by the Agreement of Purchase and
    Sale".

[5]

The trial judge was faced with the opinions of two real estate experts
    who did not agree on the issue about whose obligation it was to obtain and
    produce the title policy of insurance. The application judge accepted Mr.
    Radomsky's opinion which was supported by Ms. Kee's evidence in relation to the
    related underwriting of such a policy. This clearly was a matter for the
    application judge. We see no error in his acceptance of the Radomsky opinion
    over that of Mr. Troister.

[6]

The appellant's lawyer was alerted to the fact that title insurance was
    available by fax sent at 3:55 p.m. - the fact that she did not monitor her fax
    machine after 4:00 p.m. and did not therefore see Mr. Zarowsky's fax until
    after 6:00 p.m. is not the fault of Mr. Zarowsky.

[7]

As the application judge found, the vendors were ready to close and in a
    position to do so prior to 6:00 p.m. until which time the Agreement of Purchase
    and Sale was still in full force and effect.

[8]

The Agreement could and ought to have closed before the 6:00 p.m.
    deadline. The purchaser's failure to respond to Mr. Zarowsky's proposal caused
    the transaction to fail as the application judge found.

[9]

We see no error. The application judge's conclusion accords with the
    evidence before him which he accepted.

[10]

The
    appeal is dismissed.

[11]

As
    agreed by counsel, the costs of the appeal are to the respondents on a partial
    indemnity scale fixed in the sum of $8,500.00 inclusive of disbursements and
    HST.

J.C.
    MacPherson J.A.

J.
    MacFarland J.A.

Paul
    Rouleau J.A.