COURT OF APPEAL FOR ONTARIO

CITATION: Mancinelli v. Royal Bank of Canada, 2018 ONCA 544

DATE: 20180613

DOCKET: C64775

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

BETWEEN

JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS
    SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as
    THE TRUSTEES OF THE LABOURERS PENSION FUND OF CENTRAL AND EASTERN CANADA, and
    CHRISTOPHER STAINES

Plaintiffs (Appellants)

and

ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF
    AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF
    AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF
    TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC.,
    BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA
    INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A.,
    CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG,
    CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES
    (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS
    & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC
    NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN
    CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK
    NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK
    OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL
    BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ
    GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC
and
UBS BANK (CANADA)

Defendants (Appellants)

Kirk M. Baert, Celeste Poltak and Louis Sokolov, for the
    appellants

Lara Jackson, Wendy Berman and Christopher Horkins, for
    the respondents, the Bank of Montreal, BMO Financial Corp., BMO Harris Bank
    N.A., BMO Capital Markets Limited

Paul Le Vay, Brendan van Niejenhuis and Benjamin Kates,
    for the respondents, Toronto Dominion Bank, TD Bank, N.A., TD Group Holdings,
    LLC, TD Bank USA, N.A. and TD Securities Limited

Heard: May 14, 2018

On appeal from the order of Justice Paul Perell of the Superior
    Court of Justice, dated December 11, 2017.

Hoy A.C.J.O.:

[1]

The appellants appeal the motion judges order,
    dismissing their motion to add the respondents, Toronto Dominion Bank, TD
    Securities, TD Bank USA, N.A., T.D. Group Holdings, and TD Bank N.A.
    (collectively TD) and Bank of Montreal, BMO Financial Corp. BMO Harris Bank
    N.A. and BMO Capital Markets Limited (collectively BMO), as defendants in an
    existing class action alleging a secret conspiracy to manipulate the foreign
    exchange market.

[2]

For the following reasons, I agree with the appellants
    that the motion judge erred in dismissing their motion on the basis that their
    claim against the respondents was statute-barred.

Background

[3]

The appellant
[1]
,
    Christopher Staines, commenced a class action against sixteen groups of
    financial institutions on September 11, 2015, alleging a price-fixing
    conspiracy in the foreign exchange or foreign currency market between January
    1, 2003 and December 31, 2013. The statement of claim includes allegations that
    the defendants (including the proposed defendants) took active steps to conceal
    their participation in the conspiracy by, among other things, engaging in
    secret communications.

[4]

The first group of defendants to settle
    consisted of UBS AG, UBS Securities LLC and UBS Bank (Canada) (collectively
    UBS). The settlement required UBS to cooperate with the appellants. In
    fulfilling that obligation, UBS gave an evidentiary proffer on May 24, 2016.

[5]

On July 20, 2016, Mr. Staines brought a motion
    under r. 5.04(2) and r. 26.01 of the
Rules of Civil
    Procedure
to add the respondents to the action.
    The respondents opposed the motion on the basis that the claim against them was
    barred by the
Limitations Act, 2002
, S.O. 2002, c. 24, Sched B. (the Act) and the
Competition Act
, RSC 1985, c. C-34. No
    defendant had filed a statement of
defence
and no
    discovery had taken place at the time that the motion was heard.

[6]

Class counsels evidence on the motion was that
    they learned of BMO and TDs involvement in the alleged conspiracy for the
    first time at the UBS proffer. UBS advised class counsel that it reviewed
    approximately 2000 collusive chats dating as far back as 2008 and that FX
    traders at TD and BMO were among the persons participating in such chats.

[7]

Class counsels further evidence was that from
    the time prior to commencement of the action to the date of UBSs evidentiary
    proffer on May 24, 2016, they conducted their own investigations into the
    alleged conspiracy. Their investigations included a review of public documents
    and none of the public documents referred to or mentioned BMO or TD as being
    involved in the alleged conspiracy.

[8]

In his reasons, the motion judge acknowledged
    that there was no evidence that any public documents identified BMO or TD as
    being involved in the alleged conspiracy. He accepted that the appellants did
    not know they had a conspiracy claim against the respondents until they
    obtained the UBS evidentiary proffer.

[9]

However, at para. 61 of his reasons, the motion
    judge found as a fact that the appellants evidence on the motion was
    insufficient to establish that they behaved as reasonable person[s] in the
    same or similar circumstances to identify [the respondents] as conspirators and
    the evidence rather establishes that their identity could have been established
    with reasonable diligence before the expiry of the limitation period.

[10]

As to what other steps the appellants should have taken, the motion
    judge wrote, at para. 49:

The Plaintiffs, through their counsel,
    testified that the Plaintiffs were investigating, but there is scant evidence
    about how they were investigating, and there is no evidence about any efforts
    to hire a private investor [sic], efforts to contact potential witnesses or
    whistleblowers, efforts to obtain information from Plaintiffs counsel in the
    U.S. litigation, or efforts to contact regulatory or law enforcement agencies.
    It also appears that the Plaintiffs before or after commencing their action did
    not bring a motion for an
Anton Pillar
Order,
    a civil search warrant, or a
Norwich
Order,
    under which a plaintiff may obtain discovery from a person including a person
    against whom there is no cause of action in order to identify a wrongdoer and
    to obtain information about wrongdoing so that the plaintiff may bring
    proceedings or at least consider whether to bring proceedings against the
    wrongdoer.

[11]

At para. 51, the motion judge reasoned that the
    fact that UBS was able to identify BMO and TD as participants in the chat room
    shenanigans by reviewing the collusive chats demonstrated that it was
    possible to identify other alleged co-conspirators.

[12]

He wrote, at para. 57, that if the plaintiffs
    were to take on the mantle of representative plaintiff to achieve access to
    justice and behaviour modification, they should have acted more like the
    investigation arm of a regulator and [conducted] a meaningful investigation.

[13]

The motion judge dismissed the appellants
    motion.

The Framework

[14]

The framework in the Act informs the necessary
    analysis.

[15]

In most Ontario cases, including this one, an
    action must be started on or before the second anniversary of the day on which
    the claim was discovered. If it is not, the claim is barred by s. 4 of the
    Act.

[16]

Here, the appellants sought to amend their claim
    to include the respondents on July 20, 2016. Working backwards, the appellants
    claim against the respondents is statute-barred if they discovered it before
    July 20, 2014.

[17]

Section 5 of the Act sets out the scheme for
    determining when a claim is discovered. It provides in relevant part as
    follows:

5 (1) A claim is discovered on the earlier of,

(a)  the day on which the person with the
    claim first knew,

(i)      that the injury, loss or
    damage had occurred,

(ii)      that the injury, loss or
    damage was caused by or contributed to by an act or omission,

(iii)     that the act or omission
    was that of the person against whom the claim is made, and

(iv)     that, having regard to the
    nature of the injury, loss or damage, a proceeding would be an appropriate
    means to seek to remedy it; and

(b) the day on which a reasonable person with
    the abilities and in the circumstances of the person with the claim first ought
    to have known of the matters referred to in clause (a).  2002, c. 24, Sched. B,
    s. 5 (1).

Presumption

(2)  A person with a claim shall be presumed
    to have known of the matters referred to in clause (1) (a) on the day the act
    or omission on which the claim is based took place, unless the contrary is
    proved.  2002, c. 24, Sched. B, s. 5 (2).

[18]

For the purposes of the motion, the presumption
    in s. 5(2) of the Act was displaced: the motion judge accepted that the
    appellants subjectively did not know they had a conspiracy claim against BMO
    and TD until the UBS proffer. Thus, the date for the purposes of s. 5(1)(a) of
    the Act was May 24, 2016.

[19]

The respondents effectively asserted that the
    appellants first ought to have known that they had a claim against the
    respondents before July 20, 2014. In other words, the respondents assert that
    the s. 5(1)(b) date was both before May 24, 2016 and before July 20, 2014. If
    the s. 5(1)(b) date were not before July 20, 2014, the appellants claim would
    not be statute barred.

[20]

Having accepted that the appellants did not
    subjectively know they had a conspiracy claim against BMO and TD until May 24,
    2016, the issue to be determined by the motion judge under s. 5(1)(b) was
    whether the appellants had a reasonable explanation on proper evidence as to
    why they could not have discovered their claim against the respondents before
    July 20, 2014 through the exercise of reasonable diligence.

[21]

While the common law discoverability principle
    is expressly enshrined in ss. 4 and 5 of the Act, the statutory limitation
    period in s. 36(4)(a)(i) of the
Competition Act
is also subject to the
    discoverability principle:
Fanshawe College of Applied Arts and Technology
    v. AU Optronics Corporation
, 2016 ONCA 621, 132 O.R. (3d) 81, at para. 18.

Analysis

[22]

As I will explain, the motion judge erred in
    principle by establishing too high an evidentiary threshold on the motion
    before him. He further erred by finding that the appellants could have
    identified the respondents with due diligence in the absence of any evidentiary
    foundation and failing to determine with sufficient precision when they ought
    to have discovered their claim.

1. Too high an evidentiary threshold

[23]

When a person opposes a plaintiffs motion to
    add it as a defendant on the basis of the apparent expiry of a limitation
    period, the motion judge is entitled to assess the record to determine whether,
    as a question of fact, there is a reasonable explanation on proper evidence as
    to why the plaintiff could not have discovered its claim through the exercise
    of reasonable diligence. If the plaintiff does not raise any credibility issue
    or issue of fact about when its claim was discovered that would merit
    consideration on a summary judgment motion or a trial and there is no
    reasonable explanation on the evidence as to why the plaintiff could not have
    discovered the claim by exercising reasonable diligence, the motion judge may
    deny the plaintiffs motion:
Arcari v. Dawson
, 2016 ONCA 715, 134 O.R.
    (3d) 36, at para. 10.

[24]

However, the evidentiary threshold that must be
    met by a plaintiff on such a motion is low:
Pepper v. Zellers Inc.
(2006), 83 O.R. (3d) 648 (C.A.), at para. 14;
Burtch v. Barnes
    Estate

(2006), 80 O.R. (3d) 365, at paras. 26-27.
    The plaintiffs explanation should be given a generous reading:
Wakelin
    v. Gourley
(2005),

76 O.R.
    (3d) 272, at para.15, affd 2006 CarswellOnt 286 (Div. Ct.). Whether the
    plaintiff and its counsel acted with reasonable diligence must be considered in
    context:
Fanshawe College of Applied Arts and Technology v. Sony Optiarc
    Inc.
, 2014 ONSC 2856, at para. 45 (the Fanshawe Pleadings Motion.)

[25]

While
Arcari
,
Pepper
and
Wakelin
dealt with motions to add defendants that were opposed based on the apparent
    expiry of the limitation period under the Act, the same approach, and the same
    low threshold, is warranted where the motion is opposed or also opposed based
    on the apparent expiry of any statutory limitation period subject to the
    discoverability principle: see, for example, Fanshawe Pleadings Motion.

[26]

In the context of a motion to add defendants in
    a class action alleging a secret conspiracy brought before any statements of
    defence had been filed or any discoveries had taken place, the motion judge
    required the appellants to meet too high an evidentiary threshold.

[27]

Giving the requisite generous, contextual
    reading to the appellants explanation, the appellants provided a reasonable
    explanation why they could not have identified the respondents as
    co-conspirators before July 20, 2014. I note that in the Fanshawe Pleadings
    Motion, the motion judge permitted plaintiffs alleging a price-fixing
    conspiracy to amend their statement of claim to add defendants on evidence as
    to due diligence that essentially consisted of reviewing publically available
    documents, albeit a more detailed list of those documents was provided.

[28]

In the face of the appellants evidence of their
    search for other potential defendants, the respondents led no evidence of
    further reasonable steps that the appellants could have taken to ascertain
    their identities before July 20, 2014. Rather, the motion judge suggested that
    the appellants should have taken further steps to investigate whether the
    respondents were co-conspirators. At least some of the steps he suggested go
    beyond those a reasonable plaintiff would have taken in the circumstances,
    indicating that he held the appellants to too high an evidentiary standard. By
    way of example, it is not apparent how a plaintiff alleging a conspiracy that
    the defendants took active steps to conceal and that was conducted through
    secret chats could have possibly obtained the suggested
Anton Pillar
and
Norwich
orders. The evidentiary foundation required to obtain such
    orders is high.

[29]

Further, a representative plaintiff is not akin
    to the investigative arm of a regulator. Regulators often have investigative
    powers that civil plaintiffs do not. There was no evidence that any of the
    sophisticated regulators investigating the alleged conspiracy had identified
    any of the respondents as co-conspirators before the UBS proffer.

2. Lack of evidentiary foundation

[30]

A plaintiffs failure to take reasonable steps
    to investigate a claim is not a stand-alone or independent ground to find a
    claim out of time. Instead, the reasonable steps a plaintiff ought to take is a
    relevant consideration in deciding when a claim is discoverable under s.
    5(1)(b):
Galota v. Festival Hall Developments Ltd.
, 2016 ONCA 585, 133
    O.R. (3d) (C.A.), at para. 23;
Fennel v. Deol
, 2016 ONCA 249, 265
    A.C.W.S. (3d) 1029, at paras. 18, 24.

[31]

Where the issue on a motion to add a defendant
    is due diligence, the motion judge will not be in a position to dismiss the plaintiffs
    motion in the absence of evidence that the plaintiff could have obtained the
    requisite information with due diligence, and by when the plaintiff could have
    obtained such information, such that there is no issue of credibility or fact
    warranting a trial or summary judgment motion:
Wong v. Adler
(2004), 70
    O.R. (3d) 460 (Ont Master), at para. 45;
Pepper
, at para. 18.

[32]

As the respondents appropriately conceded, there
    was no evidentiary foundation for the motion judges finding that the
    respondents identities as co-conspirators could have been established with
    reasonable diligence. The fact that UBS  one of the co-conspirators and a
    participant in the collusive chats  was able to identify other participants
    in the secret chats is no indication that the appellants, who were not
    co-conspirators, could have done so.

[33]

Nor did the motion judge determine with
    sufficient precision by when the appellants ought to have discovered that they
    had a claim. As noted above, the appellants claim would be statute barred only
    if the s. 5(1)(b) date were before July 20, 2014. The motion judge found the
    identity of BMO and TD could have been established before the expiry of the
    limitation period. It is not clear what the motion judge meant by the expiry
    of the limitation period. The respondents submitted that the limitation period
    expired on December 31, 2015 (two years after the end of the alleged conspiracy
    period). If the motion judges intended finding were that the appellants could
    have established the identities of BMO and TD by December 31, 2015, then the
    appellants claim against them would not have been statute-barred.

[34]

The issue of whether the appellants could have
    discovered the identities of the respondents with due diligence and, if so,
    when the appellants could have done so, are issues that require consideration
    on a summary judgment motion or at trial. The motion judge should have
    permitted the appellants to add the respondents as defendants, and reserved the
    respondents right to plead a limitation defence.

Disposition

[35]

I would allow the appeal. I would set aside the
    motion judges order and order that the appellants be permitted to amend their
    statement of claim to add the respondents as defendants to the action and that
    the respondents be at liberty to plead their limitation defence when they
    deliver their statements of defence.

[36]

As agreed by the parties, I would: order that
    the appellants be entitled to their costs of the appeal, fixed in the all-inclusive
    amount of $50,000, payable as to $25,000 by TD, and as to $25,000 by BMO; set
    aside the costs award below; and order that BMO pay the appellants $99,724.96
    and TD pay the appellants $95, 908.69 as costs of the motion below.

Released: AH JUN 13 2018

Alexandra Hoy A.C.J.O.

I agree D.M. Brown J.A.

I agree Gary Trotter J.A.

[1]

On October 6, 2016, the Statement of Claim was amended to add
    the Trustees of the Labourers Pension Fund of Central and Eastern Canada as
    plaintiffs.


COURT OF APPEAL FOR ONTARIO

CITATION: McKinnon v. McKinnon, 2018 ONCA 596

DATE: 20180628

DOCKET: C63328

Rouleau, van
    Rensburg and Pardu JJ.A.

BETWEEN

Sheila Elizabeth McKinnon

Appellant/Applicant

and

Randall Lawrence McKinnon

Respondent/Respondent

Sheila McKinnon, self-represented

Randall McKinnon, self-represented

Heard: April 23, 2018

On appeal from the judgment of Justice R.T. Bennett of
    the Superior Court of Justice, dated January 3, 2017.

van Rensburg J.A.:

Introduction

[1]

This is an appeal of a final order made after a four day trial on
    a motion to change. The appeal concerns the trial judges determination of the
    respondents income for support purposes, his approach to spousal support, and
    his dismissal of the appellants motion for contempt, which
was heard together with the motion to change. For the reasons that follow I would
    allow the appeal.

Facts

[2]

The appellant Sheila McKinnon and the respondent
    Randall McKinnon were married for 28 years before they separated in 2007. Their
    separation agreement, dated April 1, 2008, provided for spousal support for Ms.
    McKinnon and child support for the youngest of their three children, who was
    born in 1994, and was 13 years old at the time. Support was based on the
    respondents annual income of $91,300 (based on a three-year average). The
    parties agreed that the appellant, who did not work outside the home, would
    take reasonable steps to achieve self-sufficiency. Both entitlement to and
    quantum of spousal support were subject to review every three years
    post-separation.

[3]

Over the years there were a number of motions,
    including three motions by the respondent to change final orders for support.

[4]

The respondent brought his first motion to
    change in 2010 seeking a reduction in child and spousal support based on a
    material change in circumstances. He had lost his job following a restructuring
    of General Motors, had then taken on other employment, and had been terminated
    from his most recent position.

[5]

By order dated September 17, 2010, after trial,
    McGee J. ordered monthly spousal support of $800 and child support of $807,
    after imputing annual income to the respondent of $91,225, and $10,000 to the
    appellant. She also ordered the respondent to maintain, until further court
    order or agreement of the parties, a life insurance policy in the face amount
    of $175,000 with the appellant as beneficiary for $100,000 and the child as
    beneficiary for $75,000. The order provided for the review of the face amount
    of the policy upon a material change in circumstances which shall include but
    not be limited to a significant change in the premiums, a change in the quantum
    of spousal support or the termination of child support.

[6]

The respondents second motion to change
    resulted in a temporary order of Hughes J. dated June 8, 2012, on consent. The
    consent order was for monthly child support of $373 and spousal support of
    $345. By final order dated October 4, 2013 Hughes J. varied her earlier order
    as of June 1, 2013 to provide for monthly child support of $479 and spousal
    support of $800, based on the respondents 2012 income of $53,008 and the
    appellants income of $10,052.16. The respondent did not seek to vary his life
    insurance obligation.

[7]

The respondent initiated a third motion to
    change in January 2015 seeking to terminate spousal and child support for the
    couples youngest son, who had been in receipt of an ODSP pension since August
    2014 (although he was still in school). Again, the respondent did not request
    an order terminating his life insurance obligation, however in March 2016 the
    appellant learned that the life insurance had been cancelled in 2015, and she brought
    a motion for contempt which was heard together with the respondents motion to
    change.

[8]

The appellant suffers from a number of serious
    health problems and receives a CPP disability pension in the amount of $10,770
    per year. Two of the parties children, aged 34 and 22 at the date of the trial,
    continued to live with the appellant. Both are disabled and in receipt of ODSP.
    The appellants only source of income, other than spousal support, is her CPP
    pension.

[9]

Three months before the trial, the respondent
    left his employment. Two months before trial he made an assignment in
    bankruptcy, and his drivers license was suspended by FRO for default on his
    support obligations.

DECISION OF THE TRIAL JUDGE

[10]

The trial judge made a final order that varied Hughes
    J.s order of October 4, 2013 to terminate child support for the youngest child
    effective July 1, 2014, and to remove the requirement to provide life insurance
    for that child. This aspect of his decision is not appealed.

[11]

As for spousal support, the trial judge found
    that the appellant was still entitled to support. As a result of her health
    issues, he concluded that it was unreasonable to impute an income greater than
    the amount she was receiving in CPP disability payments. The trial judge noted
    that the respondent apparently had no income at the date of trial, and that
    he was unable to work as a mechanic while his drivers license was suspended.
    The trial judge concluded that the respondent should have an opportunity to
    get himself on his feet so that he could gain employment and pay spousal
    support. He granted the respondents request to terminate spousal support
    starting February 1, 2015, and provided for the reinstatement of support at a
    time approximately two years later (as discussed below).

[12]

The trial judge imputed income of $35,000 per
    year to the respondent starting January 1, 2016. He noted that under the
    Spousal Support Advisory Guidelines (the SSAGs or the Guidelines) this
    amount of income together with the appellants income of $11,000 would generate
    a mid-point support amount of $805, an amount within $5 of the current spousal
    support order from 2013 (at para. 129).

[13]

After so noting, the trial judge went on to
    refer to a settlement that the parties had reached after the trial was
    concluded, but were unable to implement. The trial judge ordered monthly
    spousal support in an amount that in his view would approximate what the
    appellant would have received if the parties settlement could have been
    effected. He made an order that:

(1)

terminated spousal support effective February 1,
    2015;

(2)

required the respondent to recommence paying
    spousal support at the rate of $500 per month commencing the later of 90 days
    after his drivers license was reinstated or May 1, 2017 until April 1, 2022;
    and

(3)

fixed spousal support at $250 per month from May
    1, 2022 until April 1, 2032.

[14]

The trial judge suspended the collection of
    arrears of support accumulated pursuant to earlier court orders as of December
    31, 2015, and instead ordered that any such arrears be paid from monies the
    respondent receives from his two LIF (life income fund) accounts at the rate of
    50% of the amounts received by the respondent from those accounts until the
    arrears are paid. The respondent was required to name the appellant as
    irrevocable beneficiary of his LIF accounts, and he was prohibited from
    transferring, encumbering or otherwise dealing with the LIF accounts without
    the appellants written consent. The trial judge directed in his reasons that there
    was no requirement for ongoing financial disclosure, he stated that there was
    no intention that the respondent having an income of more or less than $35,000
    would result in a material change, and he terminated the obligation to provide
    life insurance.

[15]

The trial judge dismissed the appellants
    contempt motion. He referred to the requirement that the appellant prove that
    the respondent deliberately breached an order which was clear and unambiguous.
    Without further explanation, he stated while the court finds that the
    respondent is very close to having met those criteria, by the thinnest of
    margins, the court finds that the respondent is not in contempt of the Order
    relating to the issue of life insurance.

SPOUSAL SUPPORT

[16]

The appellant says that the trial judge erred in
    his spousal support award:

(1)

in refusing to impute to the respondent an annual income of $60,000
    from January 1, 2016 onward;

(2)

in terminating spousal support on February 1, 2015, and not
    requiring spousal support to be paid for approximately two years; and

(3)

in departing from the SSAGs in fixing spousal support.

[17]

The respondent, who did not file a factum, or
    specifically respond at the hearing to the appellants argument, simply took
    the position that the trial judge did not err in making the order he did.

[18]

Typically, support orders attract significant
    deference. This is informed by both the discretion involved in making support
    orders and the importance of finality in family law litigation. An appeal court
    should only intervene where there is a material error, a serious
    misapprehension of the evidence or an error of law, and not because the court
    would have made a different decision or balanced the relevant factors
    differently:
Hickey v. Hickey
, [1999] 2 S.C.R.
    518, at para. 12.

[19]

I would give effect to some, but not all, of the
    appellants arguments about spousal support. As I will explain, I would not
    interfere with the essentially fact-based determination of the income to be
    imputed to the respondent.

[20]

In my view, however, the trial judges decision
    to terminate support for a period of two years from February 1, 2015, and his
    departure from the Guidelines in determining the level and duration of support,
    were based on errors of law and principle, and therefore must be corrected in
    this appeal.

(1)

Imputing Income Commencing January 1, 2016

[21]

The trial judge imputed to the respondent
    $35,000 in annual income commencing January 1, 2016. The appellant asserts that
    the trial judge erred in failing to impute income of $60,000 per year, which
    she says was supported by the evidence at trial.

[22]

While the respondents qualifications as a
    licensed mechanic and his employment history may have justified imputing a
    higher annual income to the respondent, I see no basis on which to interfere
    with the trial judges factual and discretionary decision. In arriving at the
    figure of $35,000, the trial judge considered the relevant factors of the
    respondents qualifications, his age (60), his employment history (including
    his periods of unemployment and unemployment at the date of trial), and his relatively
    good health, that his best earning opportunity was as an auto mechanic, and
    the income actually generated by his most recent period of employment as an
    auto mechanic. Furthermore, as explained below, an income of $35,000 is close
    to the amount the respondent was able to earn from employment in 2015. As such,
    I would not interfere with the motion judges imputation of annual income to
    the respondent, commencing January 1, 2016, of $35,000.

(2)

Spousal Support from February 2015 Onward:
    Unjustified Departure from the SSAGs

[23]

The appellant argues that the trial judge erred
    when he (1) terminated the respondents support obligation for two years
    commencing February 1, 2015; and (2) awarded spousal support going forward at a
    level significantly less than what is recommended under the SSAGs.

[24]

I agree. In my view, both decisions  to give
    the respondent a two year support holiday, and to award future support below
    the level recommended by the SSAGs  constitute unjustified departures from the
    SSAGs and therefore errors. The SSAGs are the presumptive starting point for
    awarding support.  Any departure from them requires adequate explanation:
Slongo
    v. Slongo
, 2017 ONCA 272 at paras. 105 and 106.

[25]

The trial judge terminated the respondents obligation
    to pay support effective February 1, 2015, and only restarted the obligation on
    the earlier of 90 days after the respondents drivers license was reinstated
    or May 1, 2017. Because the trial judges reasons were released on January 3,
    2017, this effectively gave the respondent a support holiday of between 23 and
    27 months.

[26]

The trial judge did not explain why he made an
    order terminating spousal support for a two-year period. He adverted to the
    need for the respondent to get himself on his feet. And he referred on a
    number of occasions to FROs suspension of the respondents drivers license,
    as a reason the respondent could not work as a mechanic, and as a consequence
    of the appellants refusal to consent to the termination of child support. Specifically,
    he referred to the appellants relentless pursuit of support as causing the respondent
    to lose his drivers license and consequently the ability to work in his trade.
    Even if the trial judges criticism of the appellant for refusing to voluntarily
    terminate child support was warranted (and I do not necessarily agree, given
    the evidence that the appellant in 2015 sought leave to bring a motion which
    was denied, to terminate child support and to increase spousal support), this
    could not reasonably justify the complete elimination of the respondents
spousal
support obligation for a period of two years.

[27]

It was, accordingly, in my view an error to
    interrupt the spousal support obligation.

[28]

It was also, in my view, an error to depart from
    the SSAGs in the amount of support ordered on a go-forward basis. In so doing,
    the trial judges reasons suggest that he was guided by the parties mediated
    settlement. The parties, at the conclusion of the trial, but before a decision
    was released, had reached a settlement at a mediation. The terms of the
    settlement (which are set out in the trial judges reasons) provided for, among
    other things, spousal support to terminate effective February 1, 2015, and for
    the respondent to transfer the balance in his LIF accounts ($67,708.14) to the
    appellant. The settlement could not be implemented when it was determined that there
    was a legal impediment to the transfer. Despite the trial judges explicit
    statement, at para. 13 of his reasons, that the court would render its decision
    based on the evidence heard at trial, he also stated, at para. 132, that it
    was appropriate to craft a decision that incorporates as much as possible the
    spirit of the settlement reached by [the] parties and, at para. 142, described
    as the net effect of his decision that the appellant would receive
    approximately the same as she would have received if the parties settlement
    could have been effected. The settlement however required the immediate
    payment of a lump sum to the appellant in exchange for a release of the
    respondents obligations, and, as the appellant points out, the lump sum
    settlement was a compromise intended to bring finality to the litigation.

[29]

It was an error for the trial judge to use the
    parties negotiated settlement as a reference point for determining spousal
    support.

[30]

Offers to settle are inadmissible in subsequent
    family law proceedings except when dealing with costs issues: see rule 18(8) of
    the
Family Law Rules
, O. Reg. 114/99. The same
    applies to draft minutes of settlement tendered on another party but not
    signed:
Parreira v. Parreira
, 2013 ONSC 6595. This
    rationale extends to a settlement that was agreed upon but could not be
    implemented. The trial judge here ought to have made his decision based on the
    evidence he heard. In any event, the terms of the unimplemented settlement
    agreement could not justify a departure from the SSAGs in the determination of
    the respondents spousal support obligations, and was not a reason for interrupting
    spousal support for two years, and then fixing support at a level below the
    recommended SSAGs range.

(3)

Applying the SSAGs to This Case

[31]

Having concluded that the trial judge erred in principle in his
    determination of spousal support from February 1, 2015 onward, this court may
    make any order that the court below should have made, provided that the record
    permits us to do so.
The termination of the
    respondents obligation to pay child support warrants reconsideration of the
    amount of spousal support payable according to the SSAGs and is expressly
    contemplated by those guidelines.

[32]

The respondent sought to reduce his support
    obligations commencing February 1, 2015. His support obligations until that
    time were governed by Hughes J.s October 4, 2013 order, which required him to
    pay spousal support of $800 per month and child support of $479, based on his
    annual income in 2012 of $53,008. The respondents income in the next two years
    was relatively consistent: the trial judge determined that he earned $51,101.10
    in 2013 and $56,287 in 2014. He did not determine the respondents income for
    support purposes for 2015 although he discussed the respondents financial
    circumstances and observed that a significant portion of the respondents total
    income for that year was comprised of withdrawals from his retirement savings. The
    respondents line 150 income for 2015 was $104,246.45, of which $70,025.51
    consisted of RRSP withdrawals and RRIF or LIF annuity payments.

[33]

For the period starting February 1, 2015, I
    would fix spousal support at the mid-point of the suggested SSAGs amount based
    on the parties respective incomes for 2015, but excluding the respondents
    encroachment on retirement savings in that year. The respondents other income
    (employment income, commissions and employment insurance) for 2015 was $39,371.09.
    Based on that income amount and the appellants income of $11,000 per year, I
    would order a mid-point spousal support amount of $1,034 per month.

[34]

As for spousal support going forward, I have already
    concluded that the trial judge did not err in imputing an income of $35,000 to
    the respondent commencing January 1, 2016. There is no reason to depart from
    the mid-point spousal support amount suggested by the SSAGs. Accordingly, after
    taking into consideration the appellants CPP benefits of $11,000, she is
    entitled to spousal support from January 1, 2016 forward in the sum of $875 per
    month.

CONTEMPT

[35]

The trial judge offered no reason for refusing
    to find the respondent in contempt of the McGee J. order requiring him to
    provide life insurance for his support obligations. He acknowledged that, in
    order to be found in contempt, the respondent must have deliberately breached
    an order that was clear and unambiguous, but then simply stated that while the
    court finds the respondent is very close to having met those criteria, by the
    thinnest of marginsthe respondent is not in contempt of the order relating to
    the issue of life insurance.

[36]

Civil contempt requires that the moving party
    establish beyond a reasonable doubt that (a) the order alleged to have been
    breached states clearly and unequivocally what should or should not be done;
    (b) the alleged contemnor had actual knowledge of the orders terms; (c) the
    alleged contemnor intentionally did the act the order prohibited or
    intentionally failed to do the act the order required. A judge retains an
    overriding discretion to decline to make a contempt finding where the foregoing
    factors are met where it would be unjust to do so, such as where the alleged
    contemnor has acted in good faith to take reasonable steps to comply with the
    relevant court order:
Carey v. Laiken
, [2015]
    2 S.C.R. 79, at paras. 33-35, 37. The trial judges reasons on the contempt
    issue are conclusory. He does not explain why he concluded that contempt had
    not been made out and, on a review of the evidence, there was no valid reason
    to refuse a contempt order in this case.

[37]

First, the McGee J. order was clear and
    unambiguous  the respondent was required to maintain a life insurance policy
    for $175,000 pending agreement by the parties or court order. Second, the
    respondent admitted that he knew about the order, and his ongoing obligation to
    maintain life insurance, pending court order or the appellants agreement, and
    that he had been found in contempt for the same breach in 2010. Third, the
    respondents breach of the order was deliberate. He did not simply allow the
    policy to lapse; there was no inadvertence. He admitted to having written a
    letter to the insurance company in June 2015, to cancel the policy. The
    respondent did not advise the appellant that he was cancelling the policy nor
    did he seek her consent or a court order permitting him to do so. His
    explanation at trial was that he could not afford the premiums. However, at the
    time he cancelled the policy (which he agreed in his evidence at trial had a
    premium of around $135 per month), he had acquired a new truck and was making
    loan payments of $600, and total vehicle payments of $1,100 per month.

[38]

I would therefore allow the appeal of the trial
    judges dismissal of the contempt motion and find that the cancellation of the
    respondents life insurance policy in June 2015 and the continued failure to
    have in place the life insurance required by the order of McGee J. dated September
    17, 2010 until that obligation was lawfully terminated, was in contempt of that
    order.

[39]

The appellant asks this court to impose the
    penalty she requested at trial, namely a $5,000 fine to be paid to her
    directly. Rule 31(5) of the
Family Law Rules
provides for a variety of orders that may be made where a person is found in
    contempt, including (c) that the person in contempt pay an amount to a party as
    a penalty.

[40]

In my view, the appropriate penalty is to
    require the respondent to pay to the appellant the sum of $2,295. This is the total
    amount of the monthly premiums the respondent avoided paying from when he cancelled
    the insurance in June 2015 for the next 17 months, and before the insurance
    obligation was terminated by the trial judge. This amount is payable as spousal
    support, as the intention was for the life insurance policy to provide security
    for the respondents support obligations.

[41]

In addition to terminating the life insurance
    obligation, the trial judge required the respondent to name the appellant as
    irrevocable beneficiary of his LIF accounts, and prohibited him from
    transferring, encumbering or otherwise dealing with the LIF accounts without
    the appellants written consent. It is clear that this obligation was intended
    to replace the life insurance obligation, to provide a source for payment of
    monies to the appellant in the event of the respondents death. There is no
    reason to interfere with these terms of the order, which will remain in place.

DISPOSITION

[42]

The appeal is therefore allowed. Paragraphs 2, 6, 7, 8, 10, 11 and
    14 of the January 3, 2017 order of Bennett J. are set aside.

[43]

Commencing February 1, 2015 until December 1, 2015, the respondents
    spousal support obligation is $1,034 per month. Commencing January 1, 2016 the
    respondents spousal support obligation is $875 per month.

[44]

With
respect to arrears of support, the FRO statement of arrears shows arrears of child and spousal support as of January 1, 2016 in the sum of $8,215.74. With the termination of child support by Bennett J. effective July 1, 2014, and the adjustments under this order, the arrears of support as of January 1, 2016 are $2,977.76. The total arrears therefore owing from January 1, 2016 until July 1, 2018 (based on $875/month in monthly support for 30 months, namely, $26,250, plus the $2,295 contempt penalty, plus the $2,977.76 owing up until January 1, 2016) is $31,522.76, less amounts already paid between January 1, 2016 and July 1, 2018.  The arrears are to be paid by the respondent in accordance with para. 9 of Bennett J.'s order, which specifies that arrears are to be paid from his LIF accounts at the rate of 50% of the amounts received by the respondent from those accounts until the arrears are paid.

[45]

The
    parties are to provide one another with copies of their T1 general returns by
    May 31 each year and their notices of assessment within 30 days of receipt,
    except that the T1 general returns for 2017 and notices of assessment shall be
    exchanged within 30 days of this order. A support deduction order shall issue
    in respect of amounts payable commencing July 1, 2018.

[46]

Costs,
    inclusive of disbursements and applicable taxes, are payable by the respondent
    to the appellant in the sum of $5,000 for the trial and $3,000 for the appeal.

Released: KvR June 28, 2018

K. van Rensburg J.A

I agree Paul Rouleau
    J.A.

I agree G. Pardu
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: McFarlane (Re), 2018 ONCA 583

DATE: 20180626

DOCKET: C63808 and C64293

Sharpe, Roberts and Trotter JJ.A.

BETWEEN

IN
    THE MATTER OF:  Odean McFarlane

AN APPEAL UNDER PART
    XX.1 OF THE CODE

Anita Szigeti, for the appellant

Elena Middelkamp, for the respondent, the Attorney
    General of Ontario

Michele Warner, for the respondent, the Centre for
    Addiction and Mental Health

Heard: June 22, 2018

On appeal from the dispositions of the Ontario Review
    Board, dated May 23 and August 11, 2017, with reasons dated June 14, 2017 and
    September 1, 2017.

REASONS FOR DECISION

[1]

The
    appellant appeals from the May 23 and August 11, 2017 dispositions of the
    Ontario Review Board.

[2]

The
    appellant has been under the supervisory jurisdiction of the Board since
    December 13, 2007 when he was found not criminally responsible on account of
    mental disorder on a charge of assault that occurred in July 2005.  The
    appellant has a long history of mental illness from at least 2002 and his
    diagnoses include schizophrenia, substance use disorder, and antisocial
    personality traits. He has a substantial but dated criminal record starting in
    about 2001 to about 2010, including convictions for robbery and assault.

[3]

Since
    coming under the Boards supervision, the appellants mental state, compliance
    with medication use, insight into his mental health and addiction issues, and
    abstinence from illicit drugs, have greatly fluctuated. However, throughout the
    period from about February 2015 to May 2017, the appellant made enormous
    strides: he was gainfully employed; drug free; became engaged to be married;
    complied with his medication and reporting requirements; joined a church; and
    lived successfully in the community. As a result, following the annual review,
    on May 23, 2017, the Board changed the appellants disposition from a detention
    order in the General Forensic Unit of the Centre for Addiction and Mental
    Health (CAMH) to a conditional discharge with a number of conditions.

[4]

Sadly,
    the appellants father passed away unexpectedly in March 2017 and the appellant
    experienced other life stressors. Tragically, because of the enormous progress
    he had accomplished, within a couple of months, the appellants mental
    stability and conduct dramatically deteriorated: he relapsed into regular
    cocaine use; failed to report and receive his medication; broke up with his
    fiancée; was no longer employed; and put his apartment into jeopardy.  As a
    result, there was an early hearing for the appellant. On August 11, 2017, the
    Board ordered that the appellant again be detained at CAMH.

[5]

The
    appellant submits that both of the Boards dispositions are unreasonable and
    that the August 11, 2017 order should also be set aside because of procedural
    unfairness and reasonable apprehension of bias in relation to one of the Board
    members.

[6]

For
    the reasons that follow, the appellants appeals are dismissed.

[7]

We
    agree with the respondents that the appeal from the Boards May 23, 2017
    disposition is moot because the May 23, 2017 order has been overtaken by the
    August 11, 2017 disposition and there would be no practical utility in
    considering it. Accordingly, we dismiss the appeal from the May 23, 2017
    disposition.

[8]

Turning
    to the appeal from the Boards August 11, 2017 disposition, we are not
    persuaded by the appellants submissions.

[9]

The
    Boards finding that the appellant represented a significant threat to the
    safety of the public under s. 672.54 of the
Criminal Code
was reasonable and based
    on ample evidence. From May 31, 2017, when the appellant relapsed into daily
    cocaine use, until his re-admittance to CAMH on a Form 1 on August 11, 2017,
    the appellant exhibited aggressive and violent  harassing a tenant of his
    apartment building to pay a drug debt while holding a knife; stealing his
    superintendents camera; yelling at and threatening security personnel at CAMH
    and preventing them from leaving their office; and kicking open a mag-lock door
    at CAMH. This recent behavior was consistent with the appellants historical
    pattern of aggressive, threatening and sometimes violent behavior while
    relapsed into drug use and non-compliant with his medication.

[10]

The Boards determination
    that a detention order was the least onerous and restrictive disposition was
    also reasonable. The appellants recent violent, threatening and aggressive
    behavior, his relapse into drug use, his lack of compliance with his reporting
    requirements, drug screening, and medication use, as well as his absconding,
    fully supported the Boards conclusion that the appellants risk to the safety
    of the public could not be adequately managed on a conditional discharge order.

[11]

The appellant submits that
    the Boards refusal of an adjournment of his August 11
th
hearing
    because of his counsels concussion and consequent lack of preparedness for the
    hearing, as well as the appellants incapacity during the hearing, resulted in
    procedural unfairness and a miscarriage of justice. We do not accept this
    submission.

[12]

The well-established
    factors that the Board was required to take into account in determining whether
    to grant an adjournment and the standard of appellate review of the Boards
    determination are set out by this court in
Conway (Re)
, 2016 ONCA 918, at para.
    23:

In deciding whether to grant or refuse a request for an
    adjournment, the Board must take into account the interests of the not
    criminally responsible (NCR) accused, the interests of the hospital, and its
    own statutory mandate to hold timely hearings. Because its decision is
    discretionary, it attracts significant deference from an appellate court. But
    an appellate court may justifiably interfere if the Board errs in principle, or
    exercises its discretion unreasonably. So, for example, an appellate court may
    intervene if the Boards denial of an adjournment deprives an NCR accused of a
    fair hearing and thus is contrary to the interests of justice:  see
Khimji
    v. Dhanani
(2004), 69 O.R. (3d) 790 (C.A.), at para. 14.

[13]

We see no error in the
    Boards refusal of the appellants adjournment request that would permit
    appellate intervention.

[14]

Given the appellants
    severe deterioration, there was urgency in proceeding with the review hearing,
    which the appellants Form 1 admission did not ameliorate. A short adjournment
    was not possible because appellants counsel would not be available. His
    counsel did not indicate that she was physically unable to proceed. There is no
    suggestion of ineffective assistance of counsel. Indeed, the Board complimented
    counsel on her skill and ability.

[15]

The Board was faced with a
    difficult balance to strike in determining whether to grant the appellants request
    to adjourn the hearing. The Boards reasons demonstrate to our satisfaction
    that it took into account the competing interests and exercised its discretion
    to deny the adjournment in a reasonable fashion.

[16]

The Hospitals request for
    an early hearing was well supported. The appellants condition had deteriorated
    and dealing with him on the basis of the conditional discharge or under the
Mental Health Act
, R.S.O. 1990, c. M.7, had
    proven problematic. There was evidence of a significant risk to public safety
    and the Board did not err in finding on this record that an early hearing was
    required.

[17]

The Board also took into
    account the appellants right to procedural fairness and to have proper legal
    representation. The Board considered the appellants counsels accident a few
    days earlier and her ability to represent the appellant and to adequately
    prepare for the hearing on short notice.

[18]

There was no perfect
    solution to this procedural dilemma but, in our view, the Boards decision to
    carry on with the hearing was entirely reasonable. The Board did its best to
    accommodate the appellant and his counsel within the short time-frame
    available. It granted a short adjournment to allow counsel to review the case
    with the appellant and to prepare for the hearing. Counsel was very familiar with
    the appellants situation having represented him in the very recent past and
    the only new material to emerge since counsels last representation was a
    relatively brief seven-page report. The appellant has not advanced before this
    court any fresh evidence that might have been produced had an adjournment been
    granted.

[19]

While we sympathize with
    the difficulty faced by the appellant and his counsel in having to proceed on
    relatively short notice, we are not persuaded that there was a denial of his
    right to procedural fairness or any miscarriage of justice.  The conditions of
    the hearing may not have been perfect; however, the challenges encountered by
    the appellant and his counsel did not rise to the level of procedural
    unfairness. There is nothing in the transcript that supports the suggestion
    that the appellant did not obtain a fair hearing. We see no error in the
    exercise of the Boards discretion in these circumstances.

[20]

Finally, the appellant
    submits that the Board erred in allowing Dr. Ben-Aron to remain as a Board
    member because he had previously treated the appellant.  We do not accept that
    the presence of Dr. Ben-Aron gave rise to a reasonable apprehension of bias.

[21]

There is a legal
    presumption that Board members are impartial; as a result, there is a high
    threshold to successfully challenge a decision based on bias or reasonable
    apprehension of bias:
Tolias (Re)
, 2016 ONCA 463, at para. 24.

[22]

Dr. Ben-Aron had seen the
    appellant on seven brief and discrete occasions, once in 2003, four times in
    2004, and once in 2007, over ten years prior to the Board hearing. He had no
    notes of his treatment and opinion concerning the appellant and no recollection
    of his case. Unlike the rules governing Consent and Capacity Board hearings,
    there is no absolute prohibition against a treating physician sitting as a
    Board member during a hearing for a former patient.

[23]

In these circumstances, an
    informed reasonable person viewing the matter realistically and practically
    would not conclude that Dr. Ben-Aron would be consciously or unconsciously
    influenced in an improper manner:  see
Wewaykum Indian Band v. Canada
, [2003] 2 S.C.R. 259, at
    para. 74. We see no error in the exercise of the Boards discretion to proceed
    with the hearing with Dr. Ben-Aron as a Board member.

[24]

As a result, the appeal
    from the August 11, 2017 disposition is also dismissed.

Robert J. Sharpe J.A.

L.B. Roberts J.A.

G.T. Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: McPeake v. Cadesky & Associates, 2018 ONCA 554

DATE: 20180615

DOCKET: C64470

Juriansz, Benotto and Fairburn JJ.A.

BETWEEN

Barry McPeake

Plaintiff (Appellant)

and

Cadesky & Associates and Barry Seltzer

Defendants (Respondents)

and

George Jones

Third Party

Yan David Payne and Karen J. Sanchez, for the appellant

Sandra E. Dawe, for the respondent Cadesky &
    Associates

Alfred J. Esterbauer and Sydney Hodge, for the
    respondent Barry Seltzer

Geoffrey D.E. Adair, for the third party

Heard: May 29, 2018

On appeal from the judgment of Justice Robyn M. Ryan Bell
    of the Superior Court of Justice, dated September 27, 2017 with reasons
    reported at 2017 ONSC 5705.

REASONS FOR DECISION

[1]

The appellant appeals the dismissal of his action against the two
    respondents on summary judgment motion.

[2]

The appellant, together with two associates, owned a company in the
    business of computer software research and development. In 1996, they
    contemplated selling the company to Pretty Good Privacy Inc., but the sale fell
    through. They had sought to structure their affairs to minimize the significant
    taxable capital gains that would be realized, by creating family trusts to
    which they conveyed their shares in the company. Then, in 1999, they sold the
    company to Microsoft Corporation for a vastly greater amount. Of this amount,
    approximately $4,800,000 was received by the appellants family trust. The
    proceeds were paid to the beneficiaries and the capital gain was reported on
    the beneficiaries' respective tax returns.

[3]

The Canada Revenue Agency (CRA), upon auditing the appellant, took the
    position that s. 75(2) of the
Income Tax Act
,

R.S.C. 1985, c.
    1 (5th Supp.)

applied because the appellant was a beneficiary of his
    family trust, and he, as trustee, could unilaterally control distributions from
    the trust. The CRA attributed all the gains in the family trust to the
    appellant personally, and reassessed him for some $2,400,000 in taxes, interest
    and penalties.

[4]

The appellant, who was resident in British Columbia, retained tax
    counsel who obtained orders of the British Columbia Supreme Court rectifying
    the appellants family trust so that he was not a beneficiary and could not
    unilaterally control distributions from the trust. Later, the Federal Court of
    Appeal ruled that the CRAs interpretation of s. 75(2) was incorrect, and
    concluded it did not apply to property acquired by a trust from a beneficiary
    in a
bona fides

sale transaction:
Canada v. Sommerer
, 2012
    FCA 207, 2012 D.T.C. 5126. The appellants tax liability was ultimately reduced
    to approximately $57,000.

[5]

The appellant commenced an action in July 2006, and filed a statement of
    claim in November 2013, claiming damages from the respondents for professional
    negligence. The respondent Seltzer was a lawyer who had acted for the
    appellants company, and the respondent Cadesky & Associates was an
    accounting firm that had provided accounting services to the appellants
    company, his trust and to him. In his action, the appellant claimed the fees
    payable to the tax counsel who obtained the rectification orders, the amount of
    tax he paid, and other damages.

[6]

The motion judge dismissed the appellants claim against Seltzer,
    finding the evidentiary record provided no support for the allegation that
    Seltzer was retained to advise upon or prepare the family trust. On appeal,
    counsel for the appellant advanced no oral submissions as to how the motion
    judge erred. We agree with the motion judge that there is no genuine issue for
    trial regarding Seltzers alleged negligence.

[7]

The motion judge found there was a genuine issue for trial as to whether
    Cadesky & Associates was retained with regard to the formation of the
    family trust or the preparation of the family trust deed. However, she was
    satisfied that she could determine the issue by resorting to the fact-finding
    powers set out in rr. 20.04(2.1) and (2.2) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194. We are not persuaded the motion judge made any error in
    this regard. She had before her an extensive evidentiary record that included
    multiple affidavits and extensive cross-examinations.

[8]

After a careful review of the record, the motion judge found that
    Cadesky & Associates was not retained, and provided no advice or other
    service with regard to the formation of the appellants family trust or the
    preparation of the family trust deed. In fact, she found that Cadesky &
    Associates was not retained until after the family trust was established. The
    documentary evidence, and the appellants own admissions on cross-examination,
    provided the motion judge with ample basis to conclude the appellants
    recollections were poor and to reject his affidavit evidence as to when he
    initially discussed the family trust with the Cadesky firm and the trusts
    formation. We agree with her assessment of that evidence.

[9]

The appellants final argument is that Cadesky & Associates was
    retained on an ongoing basis to provide accounting and tax advice to the
    appellant and to the appellants family trust in the years after its formation,
    and was negligent during this ongoing retainer in failing to advise of the
    alleged deficiencies in the structure of the family trust.

[10]

Cadesky
    & Associates submits there were no deficiencies in the structure of the
    family trust, as the Federal Court of Appeal in
Sommerer

ultimately
    confirmed that s. 75(2) did not apply. In response, the appellant argues that
    Cadesky & Associates was negligent in failing to advise of the CRAs
    position, which was made abundantly clear in its interpretation bulletins, and
    of the likely expenses that would be incurred in disputing the CRAs
    interpretation should the trust be audited. These are the very expenses that
    the appellant did incur and which he claimed in his action.

[11]

The
    motion judge noted that neither the appellant nor the respondent filed expert
    evidence regarding the standard of care of an accountant in the circumstances.
    The motion judge found there was no genuine issue for trial by applying the
    well-established rule that a plaintiff is required to lead expert evidence
    establishing a breach of the standard of care to support a claim of
    professional negligence. She declined to find that the case fell within the
    exception to the general rule requiring expert evidence for professional
    negligence: where it is obvious that the professionals conduct fell short of
    the standard of care.

[12]

On
    appeal, the appellant advances three arguments as to why the motion judge
    erred. First, he submits a plaintiff need not file expert evidence to support a
    professional negligence claim when defending a summary judgment motion,
    particularly when the moving party has filed no such expert evidence. Second,
    he submits that this is a case where it is obvious that the professionals conduct
    fell short of the standard of care. Third, he asserts that he had filed
    adequate expert evidence. We address each argument in turn, below.

[13]

The
    appellant relies on the decision of
Connerty v. Coles
,
2012
    ONSC 5218 to support his position that a plaintiff need not file expert
    evidence to support a professional negligence claim when defending a summary
    judgment motion. In
Connerty
,
in refusing to grant leave to
    appeal the dismissal of a summary judgment motion, C.T. Hackland R.S.J. noted
    there were conflicting decisions and opined that decisions dealing with the
    need for expert opinions in summary judgment motions should be understood to be
    a product of the particular factual circumstances in each case. He noted that
    the case before him was brought at an early stage, before the defendants had
    even filed their statement of defence. He added that sometimes the lack of a
    supporting expert opinion would result in a dismissal of the claim, though this
    would not always be the result.

[14]

The
    summary judgment motion in this case was not brought at an early stage of the
    proceedings. As noted, the motion judge had before her extensive evidence and
    was able to develop a full appreciation of the facts. The motion judge also
    considered
Connerty
. We are not persuaded she erred.

[15]

The
    motion judge recognized there was an exception to the general rule requiring
    expert evidence establishing a breach of the standard of care to support a
    claim of professional negligence. She found, however, that this was not a case
    where it was obvious that the professionals conduct fell short of the standard
    of care, absent expert evidence. The Federal Court of Appeal in
Sommerer
confirmed Cadesky & Associates view that s. 75(2) of the
Income Tax
    Act
did not apply. Subsequent to the decision in
Sommerer
, the CRA
    settled with the appellant. In the factual circumstances of this case, evidence
    of the parameters of the standard of care was required. We are not persuaded
    there is any basis to interfere with the motion judges discretion to decline
    to resort to the exception to the general rule.

[16]

Finally,
    we agree with the motion judge that there was no expert evidence on the
    standard of care before her. Putting aside Mr. Racherts lack of independence,
    the evidence the appellant points to merely shows there was widespread reliance
    by tax advisers on the CRAs erroneous interpretation of s. 75(2) of the
Income
    Tax Act at the relevant time
.

[17]

The appeal is dismissed with costs payable to each respondent fixed in
    the amount of $20,000.00 all inclusive.

R.G. Juriansz
    J.A.

M.L. Benotto J.A.

Fairburn
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Oakes v. Maas, 2018 ONCA 548

DATED: 20180613

DOCKET: C64506

Hoy A.C.J.O., Rouleau and Benotto JJ.A.

BETWEEN

Lawrence Cecil Oakes and Jason Oakes

Appellants

and

Johannes Antonius Gerardus Maas and Sandra Lynn
    Maas

Respondents

W. Gerald Punnett, for the appellants

Richard Campbell, for the respondents

Heard: June 13, 2018

On appeal from the order of Justice Price of the Superior
    Court of Justice, dated September 28, 2017.

APPEAL BOOK ENDORSEMENT

[1]

After some questioning from the panel, the appellants abandoned their
    appeal. The respondents are entitled to costs of the appeal in the
    all-inclusive amount of $5,000.