CITATION:
Davis v. Crawford, 2011 ONCA
          294

DATE:
20110414

DOCKET: C50603

COURT OF APPEAL FOR ONTARIO

Goudge, Simmons, Cronk, Armstrong and Lang JJ.A.

BETWEEN

Elizabeth Mary Davis

Respondent (Applicant)

and

Lawrence
          William Crawford

Appellant (Respondent)

Erin L. Reid, for the appellant

William R. Clayton, for the respondent

Heard: February 9, 2011

On appeal from the judgment of Justice Mary E.
Marshman
of the Superior Court of Justice dated May 13,
          2009.

Simmons and Lang JJ.A.:

I.         INTRODUCTION

[1]

The issue on this appeal is whether the trial judge
    erred in awarding lump sum spousal support to the respondent in the amount of
    $135,000. To decide this issue, it is necessary that we consider the principles
    that govern such awards.

[2]

For the reasons that follow, we would dismiss the
    appeal.

II.        BACKGROUND

[3]

The appellant and the respondent were common law
    spouses. They began living together in London, Ontario in December 1982, when
    they were 41 and 42 years of age respectively. Both parties had been married previously
    and both had children from their former marriages.

[4]

After 23 years together, the parties separated in June
    2005. At the time of trial in February 2009, the appellant was 64 years of age
    and the respondent was 66.

(1)       The Parties Work Histories

(a)
The Appellant

[5]

When the parties began living together in 1982, the
    appellant had just started a collection business, Imperial Collection Agencies,
    with a business partner. The appellant owned 50% of Imperial through a numbered
    company, 1145441 Ontario Limited (114), and his business partner, David
    Gordon, owned the other 50%.

[6]

In about 1996, Mr. Gordon indicated he planned to
    retire. The appellant bought him out in 1997 and incorporated a new business,
Torlon
Credit Recovery Inc.
Torlon
purchased Imperials client list and subsequently paid a percentage of its
    revenue to Imperial.

[7]

Mr. Gordon died in late 2003. As a result of insurance
    payouts, the appellants company, 114, received a capital dividend of $220,000
    and a regular dividend of $112,707. The company, in turn, declared dividends to
    the appellant, which were paid out to him and his daughter Kathy between
    October 2004 and July 2006. According to the appellants evidence at trial, he
    gave his daughter Kathy $125,476 and loaned her another $50,000, which he
    subsequently forgave.

[8]

The appellant also testified that he sold the
Torlon
business to a Stephen Shaw in August 2003. He said
    that he retired from
Torlon
in 2003 and that he subsequently
    received only small payments to reimburse him for expenses incurred assisting Mr.
    Shaw and entertaining clients. He claimed that he retained half the
    shareholdings only to ensure that a corporate loan was repaid.

[9]

According to the appellant, as of January 2009 (the
    month before the trial began), the retained earnings in 114, from which he had
    previously been drawing dividend income, were exhausted. From this point on, he
    testified, his only sources of income would be his R.R.S.P. and C.P.P., plus
    Old Age Security when he turned 65. The appellant valued his R.R.S.P. at
    $435,871 as of March 2008. He testified that he had been told by his financial
    advisor to withdraw $1,700 monthly from his R.R.S.P. to make it last as long as
    possible.

(b)
The Respondent

[10]

Between 1982 and 1996, the respondent worked full-time
    at
University
Hospital
    in

London in
    the human resources department. She was promoted during this period and by 1996
    was earning an annual salary of $53,000. She retired in 1996 and received a
    $30,000 severance package.  The
    respondent worked intermittently between 1996 and 1999 and did some work for
Torlon
during this period.

[11]

In 1999, the respondent was diagnosed with a
    non-malignant brain tumour. She had successful surgery in January 2000, but
    suffered a stroke and was hospitalized for three months. Following her surgery,
    the respondent retired from the workforce.

[12]

At the time of trial, the respondents income was $2,250
    per month, consisting of about $1,210 per month from a workplace pension and
    about $1,040 per month in Old Age Security and C.P.P. payments. Her financial
    statement, sworn January 12, 2009, shows a monthly deficit of income versus
    expenses of $1,470.76.

(2)       The Parties Living Arrangements during
    Cohabitation

[13]

Until 1997, the parties lived in houses owned by the
    appellant in

London.
    They moved to Toronto in 1997, but soon after moved to an apartment in London
    and then to a cottage they had purchased on
Kosh
Lake
    in 1990. In 2002, they purchased a property on White Lake; in 2003, they sold
    the
Kosh
Lake property.

[14]

During the course of their relationship, the parties
    both contributed to their household expenses from their respective incomes. On
    the trial judges undisputed findings, they enjoyed a comfortable lifestyle
    throughout their relationship and lived in upscale housing, at least while
    in

London. They
    enjoyed
cottaging
from early on  and enjoyed
    searching for properties with older tear down cottages.

[15]

The respondent raised issues at trial concerning
    whether the appellant improperly diverted to himself portions of the proceeds
    of sale of the

Kosh

Lake property or portions of the
    proceeds of various mortgages on both the

Kosh

Lake
    and

White
Lake properties.

(3)       Post-Separation Arrangements

[16]

Following the parties separation, the respondent
    continued to live in the White Lake property until it was sold in 2006 for
    $625,000.

[17]

The appellant maintained the mortgage on the White Lake
    property while the respondent occupied it. He also continued to pay the loan
    payments on a car in his name that the respondent drove. Although, at some
    point, the appellant cancelled the respondents medical coverage, he reinstated
    it after she confronted him and thereafter maintained it, at least until the
    White Lake property was sold. Based on our review of the record, it appears
    that, prior to the sale of the White Lake property, the appellant was making
    payments benefitting the respondent amounting to more than $1,500 per month.

[18]

Subject to a consent payout of $25,000 to each party,
    the net proceeds of sale of the

White
Lake property were held
    in trust pending trial. As of December 4, 2008, the appellants share of the
    net proceeds was $172,041.50.

(4)       The Respondents Application and the
    Positions of the Parties at Trial

[19]

The respondent issued her application against the
    appellant on December 6, 2007.  She made
    no direct claim regarding property. In addition to lump sum spousal support,
    the respondent claimed periodic spousal support commencing June 8, 2005. She
    did not bring a motion for interim support prior to trial.

[20]

At trial, the respondents sole request was for lump
    sum spousal support in an amount equal to the appellants share of the net
    proceeds of sale of the

White
Lake property. The appellant
    countered that, on the facts of this case, the respondent was not entitled to any
    spousal support.

III.      THE TRIAL
    JUDGES REASONS

[21]

In the course of reviewing the background facts of this
    matter, the trial judge rejected the appellants evidence that he did not
    divert to his own use monies from the sale of the

Kosh

Lake
    property or from the mortgaging of the

Kosh

Lake
    and

White
Lake properties. She also noted, [t]he
    [respondent] had every reason to believe that the

White
Lake
    cottage would be free and clear of any mortgages when it was ultimately sold.

[22]

The trial judge began her analysis by considering the
    financial positions of the parties. She found that, [w]
ith
some minor exceptions, the [respondents] assets consist of her interest in the

White
Lake property and her [workplace]
    pension which generates approximately $1,200 per month.

[23]

Turning to the appellant, the trial judge observed,
    [t]he [appellants] assets are more difficult to quantify. She noted the
    details of his R.R.S.P. and then stated, [h]
owever
,
    I find that the [appellant] also has other assets, some of which are not
    capable of quantification. The trial judge itemized three other financial
    resources to which she concluded the appellant was entitled.

[24]

First, she found that the appellant was the beneficial
    owner of $175,476 paid by 114 to his daughter Kathy in late 2005 and 2006.
    Second, she concluded that
Torlon
continued to do
    business and that the appellant continued to be a one-half owner of that business.
    She said, [t]his is an asset which I cannot ignore but cannot quantify.
    Third, she concluded that it was highly likely that the appellant and his new
    significant other were engaging in the same venture which the parties did
    during their cohabitation, i.e., purchasing a tear-down cottage and building a
    new one.

[25]

The trial judge found that the respondents existing
    assets and means were   considerably
    less than the appellants. She noted as well that the appellant was likely to
    receive a significant inheritance from an uncle in the near future.

[26]

Importantly, the trial judge recognized the
    significance of the parties cohabitation, observing, [w]
hile
they may not have commingled their financial resources as many partners do,
    they lived together and relied on each other for financial and non-financial
    support over a lengthy period. She also concluded, [t]he [respondent] will
    never be able to maintain a reasonable lifestyle in any way comparable to that
    enjoyed by the parties during cohabitation without support from the [appellant].

[27]

The trial judge rejected the appellants argument that,
    as an unmarried spouse, he could not be required to pay lump sum spousal
    support from assets not subject to the provincial property regime. She
    concluded that this was an appropriate case for lump sum spousal support, and
    that the respondent was entitled to an award of $135,000:

The [appellant] argues that any order I make for
    lump sum support is in effect a redistribution of assets which is not permitted
    by the Act because the parties were not married  I disagree.
Section 34(1)(b) of the
Family Law Act
specifically permits the payment of a lump
    sum
for support.
I can think of no
    more appropriate case for lump sum support than the present one. The [respondent]
    is deprived of any claim for property because the parties were not married.
    That does not mean that the [appellants] assets should not be available for a
    support order, if the [respondent] is otherwise entitled to support, and I find
    that she is
.

I find that in the circumstances of this case the
    [respondent] is entitled to lump sum support. However, I do not agree with her
    contention that I should simply order a lump sum equal to the [appellants]
    share of the net proceeds of sale of the White Lake property.

I have come to the conclusion that
an appropriate lump sum payment for spousal
    support is $135,000. That puts the [respondent] in a slightly better position than
    she would have been had the White Lake property been mortgage-free. At a 4 per
    cent rate of interest, it will generate approximately $1,000 monthly income for
    15 years.

The quantification of lump
    sum support is not an exact science
but I find the sum of $135,000 is fair.
    [Emphasis added.]

IV.      THE
    APPELLANTS POSITION ON APPEAL

[28]

The appellant submits that the trial judge erred in
    awarding spousal support on the facts of this case, as the parties assets and
    means are approximately equivalent. He contends that the trial judge made
    palpable and overriding errors and engaged in speculation in holding that he
    (the appellant) has assets in addition to his R.R.S.P. and his share of the
    proceeds of sale of the

White
Lake property. In support
    of this submission, the appellant delivered a motion to admit fresh evidence in
    an effort to demonstrate that the trial judges findings concerning the monies he
    gave his daughter and his ongoing interest in
Torlon
are wrong.

[29]

In any event, the appellant submits that the trial
    judges decision to award lump sum spousal support is contrary to the principles
    enunciated in
Mannarino
v.
Mannarino
(1992), 43 R.F.L. (3d) 309 (Ont. C.A.). In
Mannarino
, this court said that
    lump sum spousal support is only to be awarded in very unusual circumstances,
    where there is a real risk that periodic support will not be paid, and that lump
    sum spousal support should not be awarded to effect a redistribution of
    property in the guise of support or where it would be unfair to deprive the
payor
of the ability to apply for a variation:

The law is clear that lump sum maintenance should
    be awarded only in very unusual circumstances, where there is a real risk that
    periodic payments would not be made. Such awards should not constitute a
    redistribution of family assets in the guise of support. See
Jazenko
v.
Jazenko
(1985), 46 R.F.L. (2d) 351 (

Ont.
    Dist. Ct.), and
Zabiegalowski
v.
Zabiegalowski
(1992), 40 R.F.L. (3d)
    321 (Ont. U.F.C.).

Execution of the judgment at trial would result not
    only in a substantial redistribution of family property but would make it
    impossible for the husband to apply to the court for a reduction of support
    should there be a substantial change in his personal circumstances in the
    future.

In our view, the judgment for lump sum support in
    this case was contrary to the law and was unfair.

[30]

The appellant submits that his interpretation of
Mannarino
has
    been applied in a number of decisions of this court (for example, see
Elliot v. Elliot
(1993), 15 O.R. (3d) 265;
Willemze
-Davidson v. Davidson
(1997), 98
    O.A.C. 335;
Eccles v. Eccles
(2003),
    43 R.F.L. (5th) 321
)  and that recent decisions departing from the
Mannarino
principles were incorrectly decided (for example, see
Greenberg
    v. Daniels
(2005),
20 R.F.L. (6th) 287;
Vynnyk
v.
Baisa

(2008),
55 R.F.L. (6th) 239
).

[31]

The appellant acknowledges that lump sum spousal
    support may properly be awarded in other limited circumstances: situations involving
    very short-term marriages; in some circumstances, to effect a clean break
    between the parties, particularly in situations involving domestic violence;
    and perhaps even in very exceptional cases as an award of compensatory support.

[32]

However, the appellant submits that these situations
    fit generally within the
Mannarino
principles. They are made only in very unusual circumstances involving at least
    some of the
Mannarino
factors together with other limited special circumstances, such as those described
    above.

[33]

The appellant contends that an award of lump sum
    spousal support is always inappropriate where it is used to effect a
    redistribution of capital or where there is a possibility that one party may
    need to vary the order.

[34]

According to the appellant, none of the factors that
    would justify an award of lump sum spousal support is present in this case and
    the factors that are present militate against such an award. In particular, the
    appellant points out that he voluntarily paid the respondents living expenses
    until the

White
Lake property was sold. Thereafter, he
    continued to pay her car loan and provide medical benefits. Further, on the
    facts of this case, the appellant takes the position that the lump sum award amounts
    to a redistribution of capital. Finally, the appellant argues that, depending
    on his health, he may well require his share of the proceeds of sale of the
    matrimonial home as he ages to provide for himself.

[35]

In the alternative, the appellant submits that the
    amount of the lump sum award is excessive.

V.        ANALYSIS

(1)       The Trial Judges Findings Concerning
    the Appellants Assets

[36]

We are not satisfied that the appellant has
    demonstrated that the trial judge made palpable and overriding errors or that
    she engaged in speculation in holding that the appellant has assets in addition
    to his R.R.S.P. and his share of the proceeds of sale of the White Lake
    property.

[37]

The trial judges findings concerning the appellants
    assets are findings of credibility, which are entitled to considerable
    deference. She found it impossible to believe that the appellant, an
    experienced businessman, favoured one of his daughters over his other children
    by providing her with a gift of $175,476 on the eve of his retirement,
    particularly where his evidence was not supported by any testimony from the
    daughter.

[38]

Similarly, the trial judge found it simply not
    believable that the appellant had no ongoing interest in
Torlon
where the appellant retained a 50% interest in the company, where no post-2005
    financial statements were produced and where his evidence was not supported by
    any testimony from Mr. Shaw.

[39]

Further, the trial judge found the appellants
    testimony that he had no knowledge about a mortgage his significant other
    placed on her property simply incredible having regard to the appellant and
    respondents history of purchasing tear-down cottages and the fact that his
    evidence was not supported by any testimony from his new partner.

[40]

The trial judges findings of credibility were rooted
    in her assessment of the evidence. Having rejected the appellants evidence, it
    was open to the trial judge to draw the inferences that she did based on the
    record that was before her.  There is no basis
    upon which to interfere with her findings regarding the appellants assets.

(2)       The Appellants Fresh Evidence Application

[41]

The appellants fresh evidence application is
    dismissed. The application consists largely of affidavits and exhibits that
    could have been produced at trial. The material contains no explanation as to why
    the affiants of the affidavits were not called at trial and no explanation
    concerning why the exhibits that existed at the time of trial were not produced
    prior to trial.

[42]

We also note that the 2006 and 2007 financial
    statements for
Torlon
that Mr. Shaw claims were
    prepared following the trial are undated. Moreover, Mr. Shaws explanation that
Torlon
has only recently been able to afford to have
    these Statements prepared is bald and unpersuasive.

[43]

As a whole, the fresh evidence application fails
    entirely to meet the requirement of demonstrating that such evidence could not
    have been obtained, by the exercise of reasonable diligence, prior to trial:
R. v. Palmer
, [1980] 1 S.C.R. 759
;
Sengmueller
v.
Sengmueller
(1994), 17 O.R. (3d) 208 (C.A.).

[44]

The proposed fresh evidence that is central to the
    issues on appeal is the affidavits of the appellants daughter and Mr. Shaw.

[45]

The appellants daughters affidavit supports the
    appellants claim that he, in fact, advanced to her a significant sum of money.
[1]
However, the fact that the money was advanced to the appellants daughter was
    not the issue at trial. The issue was whether the money was being sheltered for
    the appellant.

[46]

The daughter explains that the appellant gave her the
    money so she and her husband could purchase a house where the appellant could
    live with them. However, the fact remains that the appellants name does not
    appear on a deed to property to which he apparently contributed about $150,000.
    Although this omission is not addressed directly by the appellants daughter,
    the explanation appears to be that it was intended that the appellant could
    live in the home rent and utility free in the future. The same plan apparently remains
    in effect as a contingency plan for the future, even though the appellant is
    not living with his daughter now.

[47]

Significantly, the affidavit of the appellants
    daughter does not provide any disclosure of her familys income and assets that
    would reveal whether she and her husband have funds equivalent to the monies
    advanced by the appellant available in relatively liquid form elsewhere.

[48]

Having regard to the appellants failure to call his
    daughter as a witness at trial, the relationship between the parties, the
    timing of the alleged gift (post-separation and allegedly on the eve of, or
    post, retirement) and the daughters failure to provide financial disclosure,
    her affidavit, filed on the fresh evidence application, lacks sufficient weight
    to meet the fourth branch of the
Palmer
test for the admission of fresh evidence (credible

evidence
,
    which if
believed, could
    reasonably, when taken with the other evidence adduced at trial, be expected to
    have affected the result).
[2]

[49]

Mr. Shaws affidavit confirms, by relatively bald
    statements, the appellants evidence that
Torlon
pays
    the appellant only for expenses. Appended to the affidavit are unaudited and
    undated financial statements for
Torlon
for 2006 and
    2007. Mr. Shaw gives no explanation concerning why the appellant continues to
    retain an interest in
Torlon
. This material, too,
    lacks sufficient weight to meet the fourth branch of the
Palmer
test.

[50]

The remaining affidavit from Dwayne Scott deals with
    issues collateral to the central issues on appeal.

(3)       The
    Principles for Awarding Lump Sum Spousal Support

[51]

We reject the appellants submission that
Mannarino

should be treated as restricting a
    courts ability to award lump sum spousal support to situations where there is
    a real risk that periodic payments would not be made or to other limited and
    very unusual circumstances. To the extent that
Mannarino
has been interpreted in
    that way, in our view, that interpretation is incorrect.

[52]

Both the
Family
    Law Act
, R.S.O. 1990, c.F.3 and the
Divorce
    Act
(1985, c. 3 (2nd Supp.)) contain provisions conferring a broad
    discretion on judges to make an award of periodic or lump sum spousal support,
    or to make an award comprising both forms of support.

[53]

Sections 34(1)(a) and (b) of the
Family Law Act
provide
as follows:

34.
(1)
In an application under section 33, the court
may

make

an
interim or final
order
,

(a)
requiring
that an
    amount be paid periodically
, whether annually or otherwise and whether for
    an indefinite or limited period, or until the happening of a specified event; [
and
]

(b)
requiring
that a lump
    sum be paid
or held in trust. [Emphasis added.]

[54]

Section 15.2(1) of the
Divorce Act
reads as follows:

15.2

(1) A court of competent jurisdiction
may
, on application by either or both spouses,
make an order requiring a spouse

to
secure or
pay
, or to
    secure and pay,
such lump sum or periodic
    sums, or such lump sum and periodic sums,

as the court thinks reasonable for the support of the other spouse.
[Emphasis added.]

[55]

Both Acts include sections addressing the
    purposes of an order for spousal support and the factors to be taken into
    account in making such an award: see Appendix A.

[56]

Specifically, s. 33(8) the
Family Law Act
provides that the purposes of spousal support are to:

(a)
recognize
the spouses contribution to the relationship and
    the economic consequences of the relationship for the spouse;

(b)
share
the economic burden of child support equitably;

(c)
make
fair provision to assist the spouse to become able to
    contribute to his or her own support; and

(d)
relieve
financial hardship, if this has not been done by
    orders under Parts I (Family Property) and II (Matrimonial Home).

[57]

None of these sections contains restrictions of the
    type set out in
Mannarino
.

[58]

Had Parliament or the Legislature intended that the discretion
    to make an award of lump sum spousal support to a married or an unmarried
    spouse be as highly constrained as the appellant argues is prescribed in
Mannarino
, those
    bodies surely would have said so.  Moreover,
    we can find nothing in the legislative history relating to either Act, or to
    predecessor Acts, suggesting such an intention.

[59]

However, the spousal support provisions in both Acts
    and the jurisprudence interpreting those provisions (including
Mannarino
and its
    progeny) do provide considerable guidance concerning the factors that should be
    considered in determining whether an award of lump sum spousal support is
    appropriate in any particular case.

[60]

It is well accepted  and undisputed  that a lump sum
    award should not be made in the guise of support for the purpose of
    redistributing assets:
Mannarino
;
Willemze
-Davidson v. Davidson
(1997), 98
    O.A.C. 335 (C.A.),
at
para
. 32. Moreover, the
    governing legislation does not recognize redistribution of assets as one of the
    purposes of a spousal support award.

[61]

That said, a lump sum order can be made to

relieve [against] financial hardship, if this has not been done by
    orders under Parts I (Family Property) and II (Matrimonial Home):
Family Law Act
, s. 33(8
)(
d).

[62]

In any event, the purpose of an award must always be
    distinguished from its effect. Any lump sum award that is made will have the
    effect of transferring assets from one spouse to the other. The real question
    in any particular case is the underlying purpose of the order:
Willemze
-Davidson
at
para
.
    32.

[63]

Similarly, it is well accepted that an important
    consideration in determining whether to make a lump sum spousal support award
    is whether the
payor
has the ability to make a lump
    sum payment without undermining the
payors
future
    self-sufficiency.

[64]

Under s. 33(9) of the
Family Law Act
,
[
i
]
n determining the amount and duration, if any, of support for a spouse
    in relation to need, the court shall consider

among other things:

(a)
the
dependants and
respondents current assets and means
;

(b)
the
assets and means
    that the
dependant
and respondent are
    likely to have in the future
;

...

(d)
the
respondents
    capacity to provide support
. [Emphasis added.]

[65]

These statutory provisions make it clear that ability
    to pay is an important consideration in making an award of spousal support, including
    lump sum spousal support.

[66]

Most importantly, a court considering an award of lump
    sum spousal support must weigh the perceived advantages of making a lump sum
    award in the particular case against any presenting disadvantages of making
    such an order.

[67]

The advantages of making such an award will be highly
    variable and case-specific. They can include but are not limited to:
    terminating ongoing contact or ties between the spouses for any number of
    reasons (for example: short-term marriage; domestic violence; second marriage
    with no children, etc.); providing capital to meet an immediate need on the
    part of a dependant spouse; ensuring adequate support will be paid in
    circumstances where there is a real risk of non-payment of periodic support, a lack
    of proper financial disclosure or where the
payor
has
    the ability to pay lump sum but not periodic support; and satisfying immediately
    an award of retroactive spousal support.

[68]

Similarly, the disadvantages of such an award can
    include: the real possibility that the means and needs of the parties will
    change over time, leading to the need for a variation; the fact that the parties
    will be effectively deprived of the right to apply for a variation of the lump
    sum award; and the difficulties inherent in calculating an appropriate award of
    lump sum spousal support where lump sum support is awarded in place of ongoing indefinite
    periodic support.

[69]

In the end, it is for the presiding judge to consider
    the factors relevant to making a spousal support award on the facts of the
    particular case and to exercise his or her discretion in determining whether a
    lump sum award is appropriate and the appropriate quantum of such an award.

[70]

As we have said, we do not endorse the submission that
    lump sum spousal support awards must be limited to very unusual circumstances
    as a matter of principle. Nonetheless, we agree that most spousal support
    orders will be in the form of periodic payments. To a large extent, this is for
    four very practical reasons.

[71]

First, in many instances, monies will simply not be
    available to fund a lump sum support award either to take the place of, or to supplement,
    an award of periodic support.  Instead,
    support will be paid from one spouses income, the only available source for
    support payments, and it will be paid to finance the ongoing needs of the other
    spouse, which will generally be of a periodic rather than lump sum character.

[72]

Second, for married couples, the court will have
    determined already the amount to be paid to equalize the value of the spouses net
    family properties: see s. 5,
Family Law
    Act
. In many circumstances, this payment will obviate any requirements a
    dependent spouse may have for transitional capital.

[73]

Third, in many cases, there will be no considerations
    favouring a lump sum award from the perspective of either spouse.

[74]

Fourth, in at least some cases where there are
    considerations favouring a lump sum award, the general exigencies of life,
    including the possibility that the parties means and
needs
    will
change, will outweigh the considerations favouring a lump sum
    award.

[75]

Irrespective of whether the proposed support is
    periodic or lump sum, it is incumbent upon counsel to provide the judge deciding
    the matter with submissions concerning the basis for awarding and the method of
    calculating the proposed support, together with a range of possible outcomes. Further,
    it is highly desirable that a judge making a lump sum award provide a clear
    explanation of both the basis for exercising the discretion to award lump sum
    support and the rationale for arriving at a particular figure. Clear presentations
    by counsel and explanations by trial judges will make such an award more transparent
    and enhance the appearance of justice. Over time, this approach will
    undoubtedly foster greater consistency and predictability in the result.

[76]

As part of this approach, where an award of lump sum
    spousal support is made as a substitute for an award of periodic support, it is
    preferable that, with the benefit of submissions from counsel, the judge consider
    whether the amount awarded is in keeping with the
Spousal Support Advisory Guidelines

(Ottawa, Department of Justice, 2008) (the
Guidelines
)
.  If it is not, some reasons should be provided
    for why the
Guidelines
do not provide
    an appropriate result:
Fisher v. Fisher
(2008)
,
88 O.R. (3d) 241 (C.A.), at
para
.
    103
.

(4)       Application
    of the Principles for Awarding Lump Sum Spousal Support
    to the Facts of this Case

(a)       Standard of Review

[77]

Appeal courts should not overturn support orders unless the
    reasons disclose an error in principle, a significant misapprehension of the
    evidence, or unless the award is clearly wrong:
Hickey v. Hickey
,

[1999] 2 S.C.R. 518, at
para
. 11.

(b)       Discussion

[78]

Although the trial judge did not offer a detailed
    explanation for her award, read fairly, her reasons make it clear that she
    awarded lump sum spousal support based on a real concern that the appellant
    would not pay periodic support and to
effect
a clean
    break between these parties. Again, while the trial judge did not say so
    explicitly, it is apparent that these factors outweighed considerations
    militating against lump sum spousal support.

[79]

A main theme of the trial judges reasons was her credibility-based
    findings that the appellant had greater assets and means than he was prepared
    to acknowledge and that he was attempting to shelter assets from the
    respondents reach. Having regard to these findings, it is readily apparent
    that the trial judge concluded there was a real risk the appellant would not
    pay periodic support and that this factor alone mandated an award of lump sum
    support, even though the appellant would be deprived of the ability to seek a
    variation. Further, the appellants failure to make proper disclosure made a
    clean break highly desirable  in the absence of a clean break, the respondent
    likely faced unending litigation to maintain her entitlement to spousal
    support.

[80]

In all the circumstances, we see no basis on which to
    interfere with the trial judges decision to award lump sum spousal support.

[81]

Turning to quantum, as we read her reasons, the trial
    judge awarded an amount of support that she concluded would generate an income
    stream of $1,000 per month for 15 years using a 4% interest rate.

[82]

It is unfortunate that the trial judge did not provide
    additional details concerning how she arrived at either the $1,000 per month
    quantum or the 15-year duration as the basis for her calculations.  However, the respondents financial statement
    discloses that the respondent has a monthly deficit well in excess of $1,000
    per month based on claimed expenses that are in a relatively modest range. Further,
    it is apparent from her reasons that the trial judge was satisfied that the
    appellant had the means to maintain a much higher standard of living than the
    respondent and that, without a significant payment, the respondent would be
    relegated to a significantly lower standard of living than that which the
    parties enjoyed together for 23 years. Although the trial judge did not refer
    specifically to the income tax consequences of a lump sum support award, she is
    an experienced family law judge and we are not prepared to conclude that she
    did not take the income tax consequences into account. On our review of the
    record and the trial judges reasons, it is reasonable to conclude that the
    trial judge decided that her calculations should be premised on the respondent
    receiving $1,000 per month net of tax. Finally, given that the respondent had
    attained the age of 66 and that there was no evidence indicating she was not in
    good health, we cannot say that using a 15-year income stream projection was
    unreasonable. In making that award, the trial judge undoubtedly took account of
    the contingency that the respondents need for support could be longer or
    shorter than 15 years. Although a more detailed explanation of the figures the
    trial judge used in making her calculations would have been desirable, in the
    end, we cannot say the award was clearly wrong.

[83]

We note that the appellant does not challenge the trial
    judges arithmetic. Indeed, neither counsel provided us with any calculations
    to establish that the award of $135,000 is clearly wrong in any way, including as
    being outside the ranges that would be generated by the
Guidelines
.

VI.      DISPOSITION

[84]

Based on the foregoing reasons, the appeal is
    dismissed. The respondent may file brief written submissions concerning costs
    of the appeal within seven days of the release of these reasons and the
    appellant may respond within seven days of receiving the respondents
    submissions.

Signature:      Janet Simmons
    J.A.

 S
. E. Lang J.A.

I agree S.
    T. Goudge J.A
.

I agree E.
    A. Cronk J.A.

I agree
    Robert P. Armstrong J.A.

RELEASED: STG APRIL 14, 2011

APPENDIX A

FAMILY LAW ACT

PART III
SUPPORT OBLIGATIONS

...

Order for support

33.
(1) A
    court may, on application, order a person to provide support for his or her
    dependants and determine the amount of support.

Applicants

(2)  An
    application for an order for the support of a dependant may be made by the
    dependant or the dependants parent.

...

Purposes of order for support of spouse

(8)  An order for the support of a spouse
    should,

(a) recognize the spouses contribution to the relationship
    and the economic consequences of the relationship for the spouse;

(b) share the economic burden of child support equitably;

(c) make fair provision to assist the spouse to become able
    to contribute to his or her own support; and

(d) relieve financial hardship, if this has not been done by
    orders under Parts I (Family Property) and II (Matrimonial Home).

Determination of amount for support of spouses, parents

(9)  In
    determining the amount and duration, if any, of support for a spouse or parent
    in relation to need, the court shall consider all the circumstances of the
    parties, including,

(a)
the
dependants and respondents
    current assets and means;

(b) the assets and means that the dependant and respondent
    are likely to have in the future;

(c) the dependants capacity to contribute to his or her own
    support;

(d) the respondents capacity to provide support;

(e) the dependants and respondents age and physical and
    mental health;

(f) the dependants needs, in determining which the court
    shall have regard to the accustomed standard of living while the parties
    resided together;

(g) the measures available for the dependant to become able
    to provide for his or her own support and the length of time and cost involved
    to enable the dependant to take those measures;

(h) any legal obligation of the respondent or dependant to
    provide support for another person;

(
i
) the desirability of the
    dependant or respondent remaining at home to care for a child;

(j) a contribution by the dependant to the realization of the
    respondents career potential;

(k) Repealed.

(l) if the dependant is a spouse,

(
i
) the length of time the
    dependant and respondent cohabited,

(ii) the effect on the spouses earning capacity of the
    responsibilities assumed during cohabitation,

(iii) whether the spouse has undertaken the care of a
    child who is of the age of eighteen years or over and unable by reason of
    illness, disability or other cause to withdraw from the charge of his or her
    parents,

(iv) whether the spouse has undertaken to assist in the
    continuation of a program of education for a child eighteen years of age or
    over who is unable for that reason to withdraw from the charge of his or her
    parents,

(v) any housekeeping, child care or other domestic service
    performed by the spouse for the family, as if the spouse were devoting the time
    spent in performing that service in remunerative employment and were
    contributing the earnings to the familys support,

(v.1) Repealed.

(vi) the effect on the spouses earnings and career
    development of the responsibility of caring for a child; and

(m) any other legal right of the dependant to support, other
    than out of public money.

Conduct

(10)  The
    obligation to provide support for a spouse exists without regard to the conduct
    of either spouse, but the court may in determining the amount of support have
    regard to a course of conduct that is so unconscionable as to constitute an
    obvious and gross repudiation of the relationship.

Application of child support guidelines

(11)  A
    court making an order for the support of a child shall do so in accordance with
    the child support guidelines.

Exception: special provisions

(12)  Despite
    subsection (11), a court may award an amount that is different from the amount
    that would be determined in accordance with the child support guidelines if the
    court is satisfied,

(a) that special provisions in an order or a written
    agreement respecting the financial obligations of the parents, or the division
    or transfer of their property, directly or indirectly benefit a child, or that
    special provisions have otherwise been made for the benefit of a child; and

(b) that the application of the child support guidelines
    would result in an amount of child support that is inequitable given those
    special provisions.

Reasons

(13)  Where
    the court awards, under subsection (12), an amount that is different from the
    amount that would be determined in accordance with the child support
    guidelines, the court shall record its reasons for doing so.

Exception: consent orders

(14)  Despite
    subsection (11), a court may award an amount that is different from the amount
    that would be determined in accordance with the child support guidelines on the
    consent of both parents if the court is satisfied that,

(a) reasonable arrangements have been made for the support of
    the child to whom the order relates; and

(b) where support for the child is payable out of public
    money, the arrangements do not provide for an amount less than the amount that
    would be determined in accordance with the child support guidelines.

DIVORCE ACT

Spousal Support Orders

Spousal support order

15.2

(1) A court of
    competent jurisdiction may, on application by either or both spouses, make an
    order requiring a spouse to secure or pay, or to secure and pay, such lump sum
    or periodic sums, or such lump sum and periodic sums, as the court thinks
    reasonable for the support of the other spouse.

Interim order

(2) Where an
    application is made under subsection (1), the court may, on application by
    either or both spouses, make an interim order requiring a spouse to secure or
    pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and
    periodic sums, as the court thinks reasonable for the support of the other
    spouse, pending the determination of the application under subsection (1).

Terms and conditions

(3) The court may
    make an order under subsection (1) or an interim order under subsection (2) for
    a definite or indefinite period or until a specified event occurs, and may
    impose terms, conditions or restrictions in connection with the order as it
    thinks fit and just.

Factors

(4) In making an
    order under subsection (1) or an interim order under subsection (2), the court
    shall take into consideration the condition, means, needs and other
    circumstances of each spouse, including

(
a
) the
    length of time the spouses cohabited;

(
b
) the
    functions performed by each spouse during cohabitation; and

(
c
) any
    order, agreement or arrangement relating to support of either spouse.

Spousal misconduct

(5) In making an
    order under subsection (1) or an interim order under subsection (2), the court
    shall not take into consideration any misconduct of a spouse in relation to the
    marriage.

Objectives of spousal support order

(6) An order made
    under subsection (1) or an interim order under subsection (2) that provides for
    the support of a spouse should

(
a
)
    recognize any economic advantages or disadvantages to the spouses arising from
    the marriage or its breakdown;

(
b
)
    apportion between the spouses any financial consequences arising from the care
    of any child of the marriage over and above any obligation for the support of
    any child of the marriage;

(
c
) relieve
    any economic hardship of the spouses arising from the breakdown of the
    marriage; and

(
d
) in so
    far as practicable, promote the economic self-sufficiency of each spouse within
    a reasonable period of time.

[1]
The
    appellant claims that he gave his daughter about $175,000. In her affidavit she
    confirms that the appellant advanced about $150,000 for the purchase of a
    house.

[2]
This court has observed on other occasions
    that there may be a difference between the final branch of the
Palmer
test and the final branch of the
Sengmueller
test,
    in that the final branch of the
Sengmueller
test may set out a more stringent test. For
    example, see
Chiang (Trustee of) v.
    Chiang
(2009), 93 O.R. (3d) 483 (C.A.), at
paras
.
    72-77.
The
parties did not address this issue. It is
    unnecessary that we resolve it. We have reached our conclusion applying the
    less stringent test.


CITATION:
Degennaro
v. Oakville Trafalgar Memorial
          Hospital, 2011 ONCA 319

DATE: 20110426

DOCKET: C50853

COURT OF APPEAL FOR ONTARIO

LaForme, Rouleau and Watt JJ.A.

BETWEEN

Diane
          Degennaro and Paul Degennaro, Justin
          Degennaro and Ryan Degennaro, minors by their Litigation Guardian,
          Diane Degennaro

Plaintiffs (Responding
          Parties/Respondents)

and

Oakville
          Trafalgar Memorial Hospital and Halton Healthcare Services

Defendants (Moving Parties/Appellants)

Deborah Berlach and Emily McKernan, for the appellants

Paul J. Pape and Shantona
          Chaudhury, for the respondents

Heard: January 18, 2011

On appeal from the judgment of
          Justice Douglas K. Gray of the Superior Court of Justice, dated July 2, 2009,
          with reasons reported at (2009),
67 C.C.L.T. (3d) 294
.

Rouleau J.A.:

OVERVIEW

[1]

This
    appeal concerns an accident that occurred at the appellant hospital in which
    the respondent Diane Degennaro fell and cracked her sacrum. She experienced
    chronic pain from the injury which was diagnosed as fibromyalgia several years
    later. The main issue at trial was causation because Ms. Degennaro had been
    involved in a car accident between the initial injury and the fibromyalgia
    diagnosis. The trial judge found that the sacrum injury was the cause for the
    fibromyalgia and he awarded substantial damages for current and future costs of
    care as well as lost income and non-pecuniary damages totaling over $3 million.
    The appellants appeal both liability and the award of $1.7 million for the
    costs of future care.

FACTS

[2]

On
    May 19, 1999, Ms. Degennaros son became ill. He was admitted to the appellant
    Oakville Trafalgar Memorial Hospital on May 20. That night, Ms. Degennaro
    stayed with her son in his room. A nurse showed her a bed on which she could
    sleep. The bed was in fact a chair that could fold out entirely flat. She sat
    on the end of the bed to make a telephone call and the bed buckled. Ms.
    Degennaro fell heavily onto the floor, landing on her buttocks and lower back.
    She felt excruciating pain and later testified that she might have blacked out.
    The nurse who had shown her the bed attended to her and said, Youre not
    supposed to sit on that end of the bed  it collapses.

[3]

Following
    the fall, Ms. Degennaro took Extra Strength Tylenol to help ease the pain. When
    the pain continued, she had an X-ray performed on May 31, 1999, and was told
    that she had a cracked sacrum. Over the period that followed, she was treated
    by her family physician, Dr. Trudy Chernin. Ms. Degennaros pain persisted, although
    she continued to work. She consulted two specialists, both of whom told her
    that surgery was not an option. Dr. Chernin also referred Ms. Degennaro to an
    acupuncturist/chiropractor and a massage therapist.

[4]

None
    of the treatment she received could relieve the pain and, on May 28, 2001, on
    the advice of Dr. Chernin, Ms. Degennaro stopped working. She began taking
    anti-depressants and meeting with a psychiatrist.

[5]

In
    February 2002, Ms. Degennaro was involved in a motor vehicle accident. Her left
    arm and the left side of her neck were injured. There was no injury to her
    lower back or sacrum and the trial judge found that there was no aggravation of
    her earlier injury. The trial judge accepted that the injuries suffered in the
    motor vehicle accident had healed by the fall of 2002.

[6]

On
    the prompting of her disability insurer, Ms. Degennaro attempted a gradual
    return to work starting in June 2003. As her hours of work increased, the pain
    worsened and spread to other parts of her body. She then returned to see Dr.
    Chernin who diagnosed her as having fibromyalgia.

[7]

Ms.
    Degennaro stopped working on July 25, 2003, and has not returned to work since.
    She has seen several specialists since that date and manages her pain with
    medication and various treatments.

[8]

At
    trial both the appellants and the respondents relied on the testimony of
    several medical witnesses. The respondents called: Dr. Chernin; Erin Finnegan,
    Ms. Degennaros massage therapist; Dr. David Saul, a general practitioner with
    expertise in chronic pain; Dr. Steve Blitzer, a board certified pain management
    physician; Dr. Gregory Ko, a board certified physiatrist, with a sub-specialty
    in chronic pain; and Dr.
Gordon Lawson, a
    chiropractor who assisted Dr. Ko with doing an assessment of Ms. Degennaro
. Each of the medical witnesses
    called by the respondents had treated Ms. Degennaro at some point in time.
    However, with the exception of Dr. Chernin and Ms. Finnegan, none had treated
    her prior to the car accident. The evidence of these experts supported Ms.
    Degennaros claim that the fibromyalgia was caused by the hospital fall and not
    by the 2002 motor vehicle accident.

[9]

The
    appellants called two medical experts: Dr. Benjamin Clark and Dr. Michael
    Devlin, both physiatrists who treat chronic pain. Prior to the trial, Dr.
    Devlin examined Ms. Degennaro and reviewed the documentary evidence while Dr.
    Clark only reviewed the documentary evidence prior to providing his report.
    These two experts opined that the fibromyalgia was caused by the 2002 motor
    vehicle accident.

[10]

Both
    Ms. Degennaro and her husband Paul testified at the trial regarding the degree
    to which their home life had changed following the injury. They stated that
    Paul was forced to assume many of the daily household tasks and
    responsibilities related to the care of their children. Paul Degennaro
    testified that he was forced to change his shifts at work and switch to
    part-time hours in order to accommodate his additional household duties.

[11]

In
    support of their claim for future damages, the respondents filed a set of
    documents that included two reports authored by rehabilitation counselor Anne
    Wiega, the first dated April 25, 2006, and the second dated October 28, 2008.
    There was also a report prepared by forensic accountant Elaine G. Vegotsky
    dated November 6, 2008. The appellants trial counsel admitted that the reports
    were authentic but did not admit the truth of their contents. As a result, the
    trial judge entered the reports as exhibits, on consent, subject to proof. The
    respondents did not call Ms. Wiega or Ms. Vegotsky as witnesses and the
    appellants did not ask to have them produced for cross-examination.

[12]

During
    final submissions, the respondents counsel directed the judge to the Vegotsky
    report for quantification of the claim for damages of costs of future care. He
    stated that the expenses claimed in that report stood unchallenged,
    uncontradicted, and ought not to be disturbed.

[13]

The
    appellants trial counsel had led no expert evidence on the issue of costs of
    future care and his submissions on the issue were very limited. Those
    submissions are contained in the following exchange with the trial judge:

MR. BIRLEY: I say in respect of the
    future cost of care, that this couple has been functioning. The evidence is
    that Mr. Degennaro has been shouldering some of the burden, but that the amount
    of future cost of care is really minimal rather than that which is reflected in
    the reports.

THE COURT: Well you didnt cross
    examine on them.

MR. BIRLEY: No, but those are my
    submissions.

THE COURT: Okay. But I mean, what do
    I base that on apart from
your

MR. BIRLEY: The evidence that.

THE COURT: exhortation that I
    should ignore this?

MR. BIRLEY: Well the evidence Your
    Honour is that this is a functioning couple without spending the amount of
    money that is sought, theyve been functioning for ten years.

THE COURT: Okay, but shes taking
    all kinds of drugs and so she says it will cost, assuming she gets Botox, which
    everybody seems to have recommended but she cant afford right now. So by
    allowing her that, plus all the other drugs that shes taking, thats over
    almost $600,000 right here.

MR. BIRLEY: Yes.

THE COURT: What do I do to ignore
    that apart from saying, you know, you say  what else do you say I should
    ignore from here?

MR. BIRLEY: The help around the
    house; help around the garden.

THE COURT: Well she says she wants a
    manual wheelchair. I mean, why shouldnt I  how do I just ignore that and say
    well, I dont really think shell need that even though she did have a scooter
    and found that helpful. Isnt that a reasonable expenditure?

MR. BIRLEY: Well, Your Honour, you
    know, what we have here, what we know.

THE COURT: Because age 65, assuming
    that shes in the condition shes in now, she says shell need a personal
    support worker. Well I mean, intuitively I would say, well that seems
    reasonable.

MR.
    BIRLEY: Okay. You have my submission.

[14]

In
    his reasons for judgment, the trial judge found that the appellants owed a
    clear duty of care and that they had fallen below the standard of care. He
    found that the symptoms resulting from the motor vehicle accident had resolved
    themselves within a year of the accident and, as a result, he rejected the
    appellants argument that the precipitating event for the fibromyalgia was the
    2002 car accident. The trial judge concluded that the fibromyalgia was caused
    by the injury suffered by Ms. Degennaro when she fell at the hospital in 1999.
    He went on to find that the specific injury suffered by Ms. Degennaro, chronic
    pain, was a foreseeable result in a person of ordinary fortitude. The eventual
    fibromyalgia diagnosis was a classic thin-skulled plaintiff situation. As a
    result, all of the resulting damages in this case were foreseeable.

[15]

In
    determining the amount of damages, the trial judge adopted the figures for the
    costs of future care set out in the Vegotsky report. He stated that these
totalled

$1,767,800.
[1]
He then applied a five percent
    reduction to this figure for contingencies, resulting in an award of $1,679,410
    for the costs of future care.

[16]

Regarding
    his reliance on the Vegotsky report, the trial judge commented at para. 94 of
    his reasons:

Assumptions
    are based on facts that are not within the knowledge of the analyst. Most of
    these facts were not proved by independent evidence. Notwithstanding this,
    counsel for the defendants did not object to the introduction of the report,
    nor did he take the position that I could not take its conclusions at face
    value, notwithstanding that most of the underlying facts and assumptions had
    not been proved by independent evidence. In argument, counsel for the
    defendants did not submit that the underlying facts and assumptions had not
    been proven, and did not argue that I could not rely on the report. He simply
    argued that the amounts claimed for the projected future loss of income and the
    future costs of care should be reduced for contingencies.

[17]

The
    trial judge returned to this issue again at para. 165, stating:

Furthermore,
    the damages consisting of loss of income to date, in the amount of $308,100,
    the future loss of income, in the amount of $934,800, and the present value of
    future costs, grossed up by 15%, in the amount of $1,767,800, are not in
    dispute. The only issue is whether the claims for  future costs should be
    reduced for contingencies.

[18]

As
    a result, the trial judge fixed the amount of damages at $3,073,210.45, which
    included the $1,679,410 in costs of future care (that is, $1,767,800 less 5%
    for contingencies).

ISSUES

[19]

On
    appeal, the appellants argue that the trial judge erred in three respects:

(1)

in
    rejecting the evidence of the appellants medical experts on the basis that
    they were not treating physicians;

(2)

in
    concluding that it was foreseeable that Ms. Degennaro would develop
    fibromyalgia four years after her fall and after her intervening car accident;
    and

(3)

in
awarding $1,679,410 in costs of future care in
    the absence of evidence supporting any need.

[20]

For
    the reasons that follow, I would allow the appeal in part to vary the amount
    awarded for the costs of future care.

ANALYSIS

1. The rejection of the
    evidence of the appellants medical experts

[21]

As
    noted earlier, the appellants called two physicians, Dr. Clark and Dr. Devlin,
    to give expert evidence on the issue of causation. Both of these physicians
    were experienced and qualified to give expert evidence on the subject of
    chronic pain and fibromyalgia. Their opinion was that the fibromyalgia was caused
    by the 2002 motor vehicle accident.

[22]

The
    appellants submit that the trial judge rejected their evidence and preferred
    the evidence of the respondents experts on the basis that the respondents
    experts were Ms. Degennaros treating physicians. This, in the appellants
    view, was an error of law. The appellants argue that the fact that an expert is
    a treating physician is not a proper basis to prefer that evidence and, in
    fact, should lead a court to assign less weight to that experts evidence and
    not more. Cases such as
Williams
    (Litigation Guardian of) v. Bowler
,
[2005] O.T.C.
    680
(S.C.), and
Greer v. Horton
(1996),
38 C.C.L.I. (2d) 251 (Ont. Gen. Div.)
, stand for the proposition that a treating
    physician who has a relationship with the plaintiff may not have the same
    objectivity as an independent expert. The appellants maintain that rejecting
    the evidence of independent experts because they are not treating physicians,
    as the trial judge did in this case, creates unacceptable unfairness for
    defendants. Defendants are not permitted to speak with, let alone retain, a
    plaintiffs treating physicians. This places defendants in the position where
    they will always be at a disadvantage as they can never tender treating
    physicians as experts.

[23]

I
    would not give effect to this submission. The trial judge did not, as the
    appellants suggest, simply reject the appellants experts solely on the basis
    that they were not the treating physicians. In reaching his decision to prefer
    the respondents experts, the trial judge considered a number of factors.
    First, as the trial judge explained, the appellants own expert, Dr. Clark,
    agreed on cross-examination that treating physicians were in a better position
    to make a diagnosis of fibromyalgia than a doctor conducting a paper review.
    Further, the trial judge found the qualifications of one of the respondents
    expert on chronic pain, Dr.
Ko
, to be superior to
    those of the appellants experts. Also, there were problems with the evidence
    of both of the appellants experts. Dr. Clark acknowledged in his testimony
    that the hospital fall was a material cause of Ms. Degennaros fibromyalgia and
    Dr. Devlin conceded on cross-examination that, when he prepared his opinion, he
    had not been aware that some of Ms. Degennaros upper body symptoms had been
    observed before the car accident occurred. There was, therefore, ample basis
    for the trial judges decision to prefer the opinion of the respondents
    experts.

[24]

Finally,
    I do not view the cases cited by the appellants as providing support for their
    position. These cases simply provide that where a treating physician has a
    personal interest in the outcome of the case or lacks the objectivity and
    independence essential to a medical expert, this may adversely impact the
    weight to be given to the experts testimony. There was no suggestion that the
    experts who testified on behalf of the respondents lacked objectivity or
    independence.

2.
Was
the fibromyalgia foreseeable?

[25]

The
    appellants argue that damages flowing from the fibromyalgia were not
    foreseeable because the fibromyalgia developed four years after the fall and
    required an intervening traumatic event, the car accident. In the appellants
    submission, the trial judge ought to have applied the Supreme Court of Canadas
    decision in
Mustapha v. Culligan of
    Canada Ltd.
, [2008] 2 S.C.R. 114, and found that the damages were too
    remote to warrant recovery.

[26]

I
    would reject this submission. The trial judge found as a fact that the
    debilitating pain suffered by Ms. Degennaro commenced immediately after the
    hospital incident in May 1999 and that, but for this incident, Ms. Degennaro
    would not be suffering from the chronic pain with which she is now afflicted.
    The trial judge accepted the evidence of the respondents experts that the
    motor vehicle accident played no role in the development of the chronic pain
    and fibromyalgia. The trial judge concluded that it is foreseeable that
    chronic pain may result from a physical injury and that this is a classic
    thin-skulled plaintiff situation and the defendants must take the plaintiff
    as they find her. These findings are well supported in the evidence and are
    entitled to deference on appeal.

[27]

In
    my view, the trial judge did not misapply
Mustapha
,
    which does not stand for the proposition that a defendant needs to foresee all
    of the damage suffered by the plaintiff. Rather, the defendant needs to
    reasonably foresee damages suffered by a person of reasonable fortitude. Where,
    as here, the damages suffered are more extensive because the plaintiff was
    thin-skulled, the defendant is nonetheless liable.

3. The costs of future
    care

[28]

The
    appellants submit that the trial judge erred in awarding the respondents close
    to $1.7 million in damages for costs of future care without proof of their
    entitlement to these damages. The trial judge stated that the amounts being
    claimed were not disputed and he simply adopted the costs of future care listed
    in the Vegotsky report without any analysis. That report, however, was entered
    into evidence subject to proof and no one ever testified as to the truth of the
    assumptions that underlay that report. The appellants maintain that they never
    accepted the figures and argue that the only evidence presented at trial as to
    the need for these expenditures was the evidence of Mr. and Ms. Degennaro. That
    evidence lacked detail and only spoke generally of Ms. Degennaros reduced
    abilities and Mr. Degennaros increased responsibility for carrying out
    household duties.

[29]

Evidence
    specifically addressing Ms. Degennaros pre-accident responsibilities and Ms.
    Degennaros present abilities was, in the appellants view, necessary because
    the record indicated that she and Mr. Degennaro were able to cope quite well
    when she was off work. Given that the trial judge had also awarded Ms.
    Degennaro a substantial sum for future loss of income, it was incumbent on him
    to consider whether all of the costs of future care being sought were in fact
    justified and required.

[30]

The
    appellants submit that the figures used in the Vegotsky report were drawn
    almost exclusively from the Wiega reports, which were also filed subject to
    proof. The Wiega reports, in turn, relied on various notes, records and other
    information. Some of these, such as clinical notes and records of various
    physicians and experts, were filed at trial. Other material relied on, however,
    was not filed. For example, the second Wiega report, which is dated October 28,
    2008, refers to a future care needs and costs analysis carried out by Barbara
    Nagy, a physiotherapist. Ms. Nagys report was not filed. The second Wiega
    report also relies, in part, on various discussions the author and Ms. Nagy had
    with Ms. Degennaro. The appellants argue that the Vegotsky report could not be
    relied on because the two Wiega reports were not put to Ms. Degennaro and there
    was no testimony directly addressing the need for many of the cost items listed
    in the Vegotsky report.

[31]

The
    respondents submit that the appellants did not argue at trial that the reports
    had not been proven and could not be relied on. In the respondents view, the
    appellants only argued that the report should be ignored because the Degennaros
    had been living for years without access to the care costs set out in the
    reports. The trial judge properly rejected that submission because the
    appellants had led no evidence that the Degennaros did not need the care
    provided for in the reports. The respondents argue that it is disingenuous for
    the appellants to now question the figures set out in the report.

[32]

There
    is merit to the appellants submission. It is not unusual for counsel, at the
    outset of a civil trial, to mark one or more volumes of bound documents as
    exhibits. These are normally marked as exhibits subject to proof. This will
    often allow for a better and more orderly management of the exhibits filed at
    trial. This case highlights the importance of ensuring that, at the conclusion
    of the trial, the status of the many documents contained in those volumes is
    clear (i.e. whether they have been proven and can be relied on by the trial
    judge in reaching a decision). This is particularly so where, as in this case,
    they are referred to and relied on in final submissions and they are critical
    to the quantification of the claim for costs of future care. It is the failure
    to clearly agree on the status of the Wiega and Vegotsky reports that has, in
    the present case, given rise to confusion as to their evidentiary value and the
    use to which they could be put in assessing damages.

[33]

In
    my view, the trial judge erred in the use he made of the Wiega and Vegotsky
    reports to determine the damages for costs of future care. At para. 165 of his
    reasons the trial judge stated that the amount of $1,767,800 being sought for costs
    of future care was not in dispute and that the only issue was whether there
    should be a reduction for contingencies. Although the appellants submissions
    at trial on the issue of costs of future care were, to say the least, minimal,
    the exchange I have reproduced earlier in these reasons shows that the
    appellants did in fact dispute the amount being claimed. The appellants
    position was that the items included in the costs of future care calculation in
    the Vegotsky report were not supported by the evidence at trial and were not reasonable.
    As put by their trial counsel, the appellants position was that the amount of
    future cost of care is really minimal rather than that which is reflected in
    the reports. In the exchange that followed, the court expressed the view that
    there was evidence of a need and commented on certain items listed in the Wiega
    reports such as the need for a wheelchair, the need for various drugs and the
    need for a personal support worker when Ms. Degennaro reached the age of 65. At
    the end of that exchange, the appellants counsel did not resile from the
    stated position; he simply responded, You have my submission.

[34]

In
    my view, therefore, the trial judges premise for the assessment of the costs
    of future care was in error. The need for the various items listed in the
    Vegotsky and Wiega reports was in dispute and the appellants position was that
    the amount for costs of future care was not made out on the record.

[35]

In
    submissions before us, the appellants conceded that there was some evidence in
    support of many aspects of the costs of future care being claimed. By way of
    example, the claim for the drugs listed in the costs of future care report was
    largely based on medical records and evidence led at trial. Similarly, the need
    and benefit of different types of therapy such as
pilates
and yoga were addressed in the evidence of Ms. Degennaro and others. In
    addition, it is apparent from the trial judges comments in his exchange with
    the appellants trial counsel concerning the costs of future care that he was
    prepared to make a number of assumptions based on Ms. Degennaros testimony and
    appearance at trial. Specifically, he saw the need for her to have a manual
    wheelchair and believed that she would likely need the assistance of a personal
    support worker when she attained the age of 65.

[36]

There
    was, therefore, a basis for awarding damages for the costs of future care. The
    issue, however, is whether the need for all of the amounts sought by the
    respondents was made out. In my view, they were not. In several instances there
    was simply no evidence to support the claim set out. For example, the second Wiega
    report claims the need to recover an annual cost of $255.00 until age 75 for
    house painting. The assumption here is that, but for the injury, Ms. Degennaro
    would have painted 1000 square feet of the house every five years until she
    reached the age of 75. There was no evidence by Ms. Degennaro that she had
    painted the house in the past or that there was a need for her to carry out this
    type of regular house painting until age 75. The second Wiega report states
    that the amount claimed is [s]upported by Ms. Barbara Nagy, physiotherapist in
    her report dated August 15, 2007. That report was not entered into evidence
    and Ms. Nagy did not testify. There are several other unsubstantiated claims
    listed in the Wiega reports and these are all included in the amount claimed in
    the Vegotsky report and awarded by the trial judge.

[37]

Had
    the trial judge not erred in finding that the amounts set out in the report
    were undisputed, he would have subjected each of the items claimed in the Wiega
    reports to a critical analysis to determine whether the claim had been
    established on the record and whether the assumptions made were reasonable.

[38]

Given
    the trial judges error in assessing damages, this court must decide whether to
    send the matter back to trial. Pursuant to s. 119 of the
Courts of Justice Act
, this court has the power to substitute its
    own assessment of damages if it considers it just. In my view, ordering a new
    trial on one aspect of damages is neither desirable nor warranted. I say so for
    several reasons.

[39]

This
    case involves a fall that occurred almost 12 years ago. It was a 10-day trial
    and involved the testimony of several expert witnesses. There were no real
    credibility issues and the fairness of the trial has not been put into
    question. The trial judges error does not affect liability and goes only to
    the quantification of one aspect of damages, albeit an important one, the costs
    of future care.

[40]

In
    the circumstances of this case, I consider it to be in the interest of justice
    that a new trial, even one limited to damages, be avoided. The more appropriate
    remedy is for this court to review the record and substitute its own view of
    the proper amount for costs of future care.

4. The appropriate amount of costs of future
    care

[41]

The
    appellants submit that although the Vegotsky and Wiega reports were marked as
    exhibits, the court could make no use of them because no one testified to their
    accuracy, and the factual underpinnings for the reports were not proven at
    trial. The appellants rely on this courts decision in
Wunsche v. Wunsche

(1994), 18 O.R. (3d) 161 (C.A.), for
    this submission.

[42]

I disagree. The situation in
Wunsche
was quite different.
Wunsche
was a family law case where the
    central issue was the determination of the value of the husbands corporate
    shareholdings for the purpose of the net family property calculation. The wife had
    obtained a valuation report that expressed an opinion about the value of the
    corporate shareholdings. It was listed in a request to admit that was served on
    the husband. As the husband failed to respond to the request to admit, the
    trial judge allowed the report to be marked as an exhibit at trial. The
    husband, who was self-represented, argued that the valuation was wrong, as were
    many of the assumptions underlying the report. He asked to have the evaluator
    testify and be cross-examined. This did not occur, and the trial judge simply
    accepted the valuation contained in the report as being proven. On appeal, this
    court held that, in the circumstances, the request to admit only established
    the authenticity of the document, not the truth of the contents of the
    valuation report or the correctness of the underlying assumptions. The
    valuation could not, therefore, be used by the trial judge as proof of the
    value of the shareholdings. This was particularly so because the husband had
    been given no real opportunity to object to the admissibility of the report, nor
    to cross-examine on the accuracy and reliability of the report and its underlying
    assumptions. Since the entire action concerned the equalization of property
    between the parties and there was no other admissible evidence upon which the
    court could determine the value of the husbands shareholdings, the court sent
    the matter back for a new trial.

[43]

In
    the present case, the situation is quite different. In closing submissions, the
    appellants trial counsel only challenged the
need
for the items listed in the Vegotsky and Wiega reports. For
    example, the appellants counsel questioned several items listed under the
    rubric of home maintenance and argued that the need for these items had not
    been made out on the evidence at trial. The appellants were silent as to the
    accuracy of the calculation of the cost of these items should the need be
    proven.
Indeed, although
the
    respondents explicitly stated in their submissions that they were relying on
    the reports, the appellants
never disputed the calculation in the
    reports nor did they seek to cross-examine Ms. Wiega or Ms. Vegotsky. The
    transcript suggests that the parties had discussed between themselves whether
    to call the authors of these reports, and ultimately concluded that it was not
    necessary.

[44]

It was apparent, therefore, that the parties
    accepted the accuracy of the costing of the goods and services listed in the
    reports. The only issue was whether the respondents had proven that the various
    goods and services listed therein were needed. As a result, I see no basis to
    reject the reports in their entirety. The accuracy of the costing was not an
    issue at trial and there is no reason why this court cannot rely on those costs
    in reassessing the appropriate amount of damages for the costs of future care.

[45]

The
    Vegotsky report assessed the costs of future care from January 1, 2009, to
    September 9, 2051. The calculations were based on the revised table of costs in
    the second Wiega report dated October 28, 2008. The Vegotsky report lists items
    of need related to the treatment of fibromyalgia as well as items related to assisting
    Ms. Degennaro with her day-to-day living.

[46]

Turning
    first to the treatment-related items, the Vegotsky report provides that the total
    present value of Ms. Degennaros medical needs, which includes medicines and
    botox therapy, is $576,787. The total present value of non-medical therapeutic costs,
    such as
pilates
and yoga classes as well as various
    therapeutic aids and devices, is $90,544. Professional services related to
    treatment, such as physiotherapy, massage therapy and travel to medical
    appointments, amount to $180,638.

[47]

The trial record contained substantial evidentiary
    support for Ms. Degennaros need for these present and future medical and
    therapeutic items. Ms. Degennaro testified, for example, that while her chronic
    pain had not gone away, she was taking several prescribed drugs to manage her
fibromyalgia symptoms
, the massage
    therapy was helping her with her sleep, and the
pilates
sessions were helping her regain lost muscle strength in her legs. Dr.
Ko
 whom the trial judge found to be
extraordinarily
    well qualified in the field of chronic pain
 and whose evidence the
    trial judge preferred  testified that anybody in a chronic pain state needs
    every strategy to help reduce the pain. From my review of the trial record, I
    am satisfied that the above costs for medical needs, non-medical therapeutic
    costs, and treatment-related services are reasonably required.
Indeed,
the
    appellants conceded the costs pertaining to medical needs in the course of
    their oral submissions on appeal.
The present value of these items as
listed and valuated in the Vegotsky
    report
totals $847,969 of the
    total $1,542,720 in costs of future care (before application of the 15% gross
    and 5% reduction for contingencies for taxes).
[2]

[48]

The
    costs of future care related to Ms. Degennaros day-to-day living require
    further discussion. The Vegotsky report lists the following items:

Future care

Present value

Mobility

Manual wheelchair                                                           $
    15,471

Annual maintenance (50%)                                       1,320

Personal Care

Toenail care                                                                          15,191

Personal support worker (from age
    65)                            88,013

Home Maintenance (until age 75)

Housekeeping services                                                       97,558

Home support worker                                                       352,583

Heavy house cleaning                                                           9,099

House painting                                                                        7,101

Window cleaning                                                                   7,804

Snow removal                                                                       10,442

Handyperson services                                                         61,887

Lawn care                                                                              28,281

[49]

From
    my review of the trial judges comments made in the course of the submissions
    from the appellants trial counsel on the issue of costs of future care, it is,
    as noted earlier, apparent that the trial judge was satisfied that in light of
    Ms. Degennaros condition she should be provided with a wheelchair and a
    personal support worker who will begin assisting her when she reaches the age
    of 65. As a result, I accept that both these costs of future care are appropriate
    and necessary.

[50]

However,
    the trial judge did not comment, either favourably or unfavourably, on the
    remaining items in the Vegotsky report. These items are the $15,191 in costs
    for toenail care and the costs for home maintenance (until age 75), the latter
    of which include a home support worker in the amount of $352,583 and various
    home maintenance services such as housekeeping, house painting, lawn care and
    the like totaling $222,172.

[51]

From
    my review of the transcripts, there was virtually no evidence about whether Ms.
    Degennaro had previously carried out home maintenance work such as house
    painting and snow removal. The parties never addressed whether, but for the
    accident, these would have continued to be carried out by her until age 75 and
    whether it was reasonable to assume that she would carry them out in the
    frequency and to the extent assumed in the report.

[52]

With
    respect to Ms. Degennaros need for assistance from a home support worker for
    homemaking and housekeeping tasks, Ms. and Mr. Degennaro testified as to Ms.
    Degennaros reduced abilities in this regard, and the various medical evidence
    provided support for such a need, at present and in the future. The trial
    judges reasons and comments suggest that he had accepted that a need in these
    areas had been established. There is, however, no analysis of the extent of the
    present need and the extent of her need in the future once Ms. Degennaro has
    the benefit of the additional medication and therapies provided for in the
    judgment and once the children leave the home. In my view, the extent of the
    need for home support will likely decline significantly as time advances and,
    therefore, the figures proposed in the Wiega and Vegotsky reports should be
    adjusted to reflect these changes.

[53]

I
    would therefore reduce the amount of $352,583 sought for a home support worker
    by 50% and reduce the amount sought with respect to the balance of the home
    maintenance items totaling $222,172 by 75%. The reduction, therefore, would
    total $342,921.50. Applying the 5% reduction for contingencies and the 15%
    gross up for taxes, the net adjustment to the trial judges damage award should
    be $374,640.65.

CONCLUSION

[54]

I
    would allow the appeal in part and reduce the damage award by $374,640.65. With
    respect to costs, the parties had agreed that costs of $35,000 inclusive of
    disbursements and applicable taxes should be awarded to the successful party.
    Given the disposition I propose, neither party has been totally successful. The
    respondents have been totally successful with respect to the liability issues
    and have been largely successful with respect to the damages issue. As a
    result, I would award the respondents costs fixed at $20,000 inclusive of
    disbursements and applicable taxes.

Paul Rouleau J.A.

I agree H.S. LaForme
    J.A.

I agree David Watt
    J.A.

RELEASED: April 26, 2011

[1]
The
    Vegotsky report actually gave a slightly larger figure of
$1,774,100 for the total costs of future care.
    This was based on the application of a 15% gross to the present value of future
    costs, calculated at $1,542,720. See footnote 2.

[2]
The
    $1,542,720 figure in the Vegotsky report is slightly larger than the $1,537,200
    figure used by the trial judge. The record does not disclose the reason for the
    discrepancy. For the purpose of determining the amount of the adjustment to be
    made, I have assumed that the figures used in the Vegotsky report totaling
    $1,542,720 are accurate.


CITATION: Douglass v. Milne, 2011 ONCA 284

DATE: 20110411

DOCKET: C52885

COURT OF APPEAL FOR ONTARIO

Doherty, Feldman and Epstein JJ.A.

BETWEEN

Victoria Douglass

Plaintiff (Appellant)

and

Warren Milne,
          Elizabeth Ennis

(carrying on
          business as Ennis Milne Barristers and Solicitors)

Defendants (Respondents)

Victoria Douglass, in person

Keith Geurts and Josh Hanet, for the respondents

Heard: March 10, 2011

On appeal from the judgment of
          Justice P. Matlow of the Superior Court of Justice dated October 8, 2010.

APPEAL BOOK ENDORSEMENT

[1]

The motion to introduce fresh evidence is dismissed.  The proposed
    evidence would not affect the result of the appeal.

[2]

The appellant appeals the order of Matlow J. dated October 8, 2010,
    dismissing her motion for summary judgment and granting summary judgment in
    favour of the respondents, the appellants former solicitors.

[3]

The appellant commenced an action in May of 2002 against the same
    defendants.  This action was dismissed on the basis that the claim was without
    merit.  This court dismissed the appeal from that decision.  The appellants
    application for leave to appeal to the Supreme Court was similarly
    unsuccessful.

[4]

Our examination of the claim in this action leads to the same
    conclusion: it is without merit.  Furthermore, it is barred by the principle of
res judicata
.

[5]

Finally, we consider that the motion judge treated the self-represented
    appellant appropriately during the hearing.  No amount of additional time would
    have enabled her to overcome either the lack of evidence in support of the
    claim or that the action is precluded by reason of
res judicata
.

[6]

This is not a case where costs are warranted.


CITATION: Edgecastle Holdings
      Inc. v. Fingold, 2011 ONCA 296

DATE:  20110413

DOCKET: C53030

COURT OF APPEAL FOR ONTARIO

Doherty, Moldaver and Feldman JJ.A.

BETWEEN

Edgecastle Holdings Inc. and Portedge Holdings Inc.

Plaintiffs/Appellants

and

Roslyn Fingold, Brian Rowley, Mimarco Investments Ltd.,
          2005650 Ontario Inc. and 1284953 Ontario Inc.

Defendants/Respondents in Appeal

J. Gardner Hodder, for the plaintiffs/appellants

Fred Tayar and Colby Linthwaite, for the defendants/respondents

Heard:  April 12, 2011

On appeal from the order of Justice Pepall of the Superior
          Court of Justice dated November 2, 2010.

APPEAL BOOK ENDORSEMENT

[1]

We would dismiss the appeal.  It is accepted that Katzs trustee had
    knowledge of the facts underlying this claim in issue as of September 2004 (see
    endorsement of motion judge at para. 5).  It is also accepted that the trustee
    could have taken steps to bring the claim forward but did not do so.

[2]

The motion judge properly held that the limitation period as it applied
    to the claim the appellant corporation now brings had expired in September
    2006, two years after the trustee had the requisite knowledge.

[3]

The fact that Mr. Morra acquired control of the appellant corporation
    sometime later does not affect the running of the limitation period as against
    the appellant corporation.

[4]

Like the motion judge, we do not reach the alternative argument.  We
    should not be taken as accepting that a party to a fraudulent conveyance can
    subsequently move to set that conveyance aside.  Under the authority of
Bank
    of Montreal v. Bray
(1997), 36 O.R. (3d) 99, the transaction is void
    against creditors but is valid as between the parties to the transaction.

[5]

The appeal is dismissed.  Costs to the respondent in the amount of
    $5,000, inclusive of disbursements and HST.


CITATION:
Elle Mortgage
          Corporation v. Roscoe, 2011 ONCA 254

DATE: 20110405

DOCKET: C52777 and C53112

COURT OF APPEAL FOR ONTARIO

Armstrong, Juriansz and Watt JJ.A.

BETWEEN

Elle Mortgage Corporation

Plaintiff (Respondent in Appeal)

and

Peter Karl Roscoe

Defendant (Appellant)

AND BETWEEN

Peter Karl Roscoe

Plaintiff by Counterclaim
          (Appellant)

and

Elle Mortgage Corporation
,
Terry M. Walman
and
Sub-Prime Mortgage Corporation

Defendants by Counterclaim (
Respondents
in Appeal)

Peter Roscoe, in person

Glenn E. Cohen, for the respondent Elle Mortgage Corporation
          and Sub-Prime Mortgage Corporation

Joseph Y. Obagi, for the respondent Terry Walman

Heard: March 23, 2011

On appeal from the judgment of
          Justice A.J. Roy of the Superior Court of Justice, dated September 30, 2010
          (C52777), and the order of Justice V. J. MacKinnon of the Superior Court of
          Justice, dated October 28, 2010 (C53112).

ENDORSEMENT

[1]

Roscoe is the appellant in two appeals.  He contests the summary judgment of Roy J.
    granting possession of real property he owned to the respondent Elle Mortgage
    Corporation and dismissing his counterclaim against Elle and Sub-Prime Mortgage
    Corporation. He also appealed the order of MacKinnon J striking his statement
    of defence and counterclaim against the respondent Walman.

[2]

Roscoe also brought a motion to admit fresh
    evidence, which was initially opposed.  However, as both Roscoe and counsel for the respondents made generous
    reference to the fresh evidence, we admitted it.

[3]

The thrust of Roscoe's position, the foundation
    of all of his arguments in relation to both appeals, is that his arrangement of
    a first mortgage with Elle and a second mortgage with Sub-Prime were a single
    package that was divided into the two mortgages by Walman. He argues that since
    the two mortgages were intrinsically linked, that it was the failure of Sub-Prime
    to advance funds that caused him to default on the Elle mortgage.

[4]

The action for possession was brought by Elle.
    The appellant involved Sub-Prime in the litigation by his counterclaim.

[5]

Having both mortgages disbursed at the same time
    was undoubtedly important to Roscoe's business plan. This may have caused him
    to lose sight of the fact that he arranged two separate mortgages. The
    documents he received from his broker when the financing was first arranged set
    out clearly and in detail that there would be two separate mortgages. Roscoe
    signed an acknowledgment of the arrangements in regard to each of the
    mortgages. He signed two separate mortgages and, contrary to his assertions, he
    received copies of two mortgages. In November, 2009, when Roscoe first
    protested there was a second mortgage, his broker reminded him in an e-mail
    that he had signed a letter arranging the second mortgage, that he had received
    a copy of the terms of the second mortgage when he met with his own lawyer, and
    that a copy of the executed second mortgage had been provided to him.

[6]

The mortgage terms that Roscoe executed
    authorized Sub-Prime to register the mortgage before disbursing the funds. Sub-Prime's
    subsequent refusal to advance funds was due to Roscoe's own failure to remove
    an execution filed by the Family Responsibility Office (FRO) on the property
    and to provide a fresh appraisal. The evidence establishes that he was well
    aware of both these requirements. Contrary to his oral submission that Sub-Prime
    should have disbursed funds to remove the execution, his lawyer's letter dated
    July 24, 2009 shows that he gave instructions that funds were not to be
    remitted with respect to the FRO execution.

[7]

In his oral submissions, the appellant submitted
    strenuously that the Sub-Prime mortgage should have been discharged. However,
    the evidence establishes that prior to the commencement of the litigation,
    Roscoe never asked for its discharge. To the contrary, the evidence indicates
    that he continued to press for funds to be advanced under the Sub-Prime
    mortgage.

[8]

Roscoe did allude to the discharge of the Sub-Prime
    mortgage in his defence and counterclaim. In its defence, Sub-Prime pleaded
    that it was ready and willing to provide a discharge upon payment of its costs
    of defending Roscoe's counterclaim.

[9]

Significantly, Roscoe filed no evidence that the
    registration of the Sub-Prime mortgage interfered with his ability to arrange a
    different second mortgage. He simply submitted that with the Sub-Prime mortgage
    registration, he was maxed out. He gave no indication of having considered
    that a new second mortgage might be arranged on the basis that the Sub-Prime
    mortgage would be removed from title on or before closing. The only documentary
    evidence on this point in the record indicates that the appellant was offered a
    complete refinancing of the property. While he explained why he refused the
    refinancing, the offer of the mortgage broker indicates the Sub-Prime mortgage
    on title was not an impediment. The offer notes only the total of the actual
    charges outstanding against the property.

[10]

The material before Roy J. left no doubt that
    the Elle mortgage was in default and that Sub-Prime's withholding of the
    mortgage funds was due to Roscoe's own failures.

[11]

In the second appeal, Roscoe's claim against
    Walman was properly struck as disclosing no cause of action. Roscoe made a
    litany of complaints against Walman, but could substantiate none of them. For
    example, Roscoe said he did not know who acted for Sub-Prime and that Walman
    refused to tell him. However, Roscoe could not point to any document which
    showed he asked Walman if he acted for Sub-Prime, and documents Roscoe tendered
    as fresh evidence show that his own broker advised him at the outset that
    Walman acted for both Elle and Sub-Prime.

[12]

Roscoe's inability to substantiate his
    complaints is beside the point because, on a pleadings motion, the allegations in
    the claim must be taken to be established. The pleadings point is that Walman
    had no duty of care to Roscoe. Walman acted for Elle and Sub-Prime. Roscoe was
    represented by his own lawyer and had his own mortgage broker. Walman had no
    duty to Roscoe to disburse the Sub-Prime mortgage, but rather had a duty to his
    client Sub-Prime to refuse to disburse the mortgage funds until Roscoe
    fulfilled the requirements of removing the FRO execution and providing a fresh
    appraisal. Roscoe has no cause of action against Walman.

[13]

The court expressed concern about certain
    aspects of the case. It is doubtful that, absent default on the second
    mortgage, Sub-Prime was entitled to treat its mortgage as security for the
    costs of defending the counterclaim. Elle and Walman provided no explanation
    why Roscoe was never provided with a statement accounting for the proceeds of the
    sale of his property. At the courts direction, a statement was obtained and
    provided to him. These concerns, however, do not affect the resolution of the
    issues raised and the outcome of the appeals. Counsel for Walman and Elle each
    gave the court their personal undertaking that they would bring an interpleader
    motion within 30 days in regard to the  proceeds of the sale of the property.

[14]

Both appeals are dismissed.  The respondent, Elle Mortgage Corporation,
    shall have its costs of the appeal and three interlocutory motions fixed in the
    amount of $15,000 inclusive of disbursements and applicable taxes.  The respondent, Terry M. Walman, shall have
    his costs of the appeal fixed in the amount of $5,000 inclusive of disbursements
    and applicable taxes.

Robert
    P. Armstrong J.A.

Russell
    Juriansz J.A.

David
    Watt J.A.