COURT OF APPEAL FOR ONTARIO

CITATION: Chernet v. RBC General Insurance Company, 2017 ONCA
    337

DATE: 20170426

DOCKET: C62414

Strathy C.J.O., Gillese and Pardu JJ.A.

BETWEEN

John Chernet

Plaintiff (Appellant)

and

RBC General Insurance Company, State Farm Insurance
    Company, Gregorio V. Galaites and Galites Gounell Zamora

Defendants (Respondents)

Martin Zatovkanuk, for the appellant

Cassandra Kleinman, for the respondents Gregorio V.
    Galaites and Galites Gounell Zamora

Ross Donald Rollo, for the respondent RBC General
    Insurance Company

Heard: April 21, 2017

On appeal from the order of Justice Thomas R. Lederer of
    the Superior Court of Justice, dated June 22, 2016, with reasons reported at 2016
    ONSC 4023.

By the Court:

[1]

We dismissed this appeal, with reasons to follow. These
    are our reasons.

[2]

The appellant appeals an order granting summary
    judgment dismissing his claim for damages arising from a motor vehicle
    accident.

[3]

He asserts that the motion judge erred: (a) by
    improperly taking judicial notice of scientific and technical matters in
    determining how the accident occurred and by failing to give the parties an
    opportunity to respond to his conclusions; (b) by misapprehending the evidence;
    and (c) by concluding that there was no genuine issue requiring a trial.

Standard of Review

[4]

The standard of review
    applicable to an appeal of summary judgment is
set out
in
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 81: "[w]hen the motion
    judge exercises her new fact-finding powers under Rule 20.04(2.1) and
    determines whether there is a genuine issue requiring a trial, this is a
    question of mixed fact and law." When there is no extricable error in
    principle, findings of mixed fact and law should not be overturned, absent
    palpable and overriding error:
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at
    para. 36. We reject the appellants submission, for which he cited no
    authority, that less deference is owed to the motion judges findings of fact
    because they were based on a paper record.

Judicial Notice

[5]

The appellant impugns the motion judges
    conclusion that the physical evidence established that the accident was a
    straight-forward rear-end collision. The judge pointed to the absence of
    physical evidence that the respondents vehicle swerved or turned suddenly into
    the path of the appellants car, which would require the appellant to stop so
    quickly that a collision could not reasonably be avoided. There were no skid
    marks on the road and the collision damage was at the
centre
rear of the respondents car and not at the side.

[6]

The trial judge rejected the appellants
    argument that the respondents vehicle suddenly swerved in front of him and
    came to a sudden stop, making it impossible to avoid a collision. He said, at
    para. 7:

Geometry alone makes this plain. For the
    damage to occur, as it did, it would be necessary for the [respondents]
    vehicle to have swerved cleanly into the path of the car being driven by the
    plaintiff in time for it to straighten out the path it was travelling such that
    it was in place to be struck cleanly in the rear without any skid-marks or
    other sign of this kind of precipitous
manoeuvre
.

[7]

These conclusions must be considered in the
    context of the respondents evidence that they were stopped at the intersection
    waiting for the light to change when they were hit without warning in the rear
    by the appellants vehicle. They must also be considered in the context of the
    appellants conflicting evidence on discovery and in his affidavit on the
    motion. On discovery, the appellant said that he never saw any vehicle in front
    of him and he thought the collision was an explosion. In his affidavit on the
    motion, in contrast, he said that the respondents vehicle suddenly appeared in
    front of him and came to an abrupt stop.

[8]

We disagree that the motion judge improperly
    took judicial notice of matters that should have been the subject of expert
    evidence. He was simply drawing reasonable inferences from the uncontested
    facts. The damages to the respondents car were in the middle of the back and
    there was no damage to either car to suggest that the appellants car was
    sideswiped or cut off. Nor was there evidence of tire marks to suggest that one
    vehicle suddenly swerved in front of the other or that either vehicle came to a
    sudden stop. The inferences he drew were reasonable and refuted the appellants
    theory of how the accident occurred.

[9]

The motion judge was not required to advise the
    parties of the inferences he drew from these unchallenged facts. He was
    entitled to conclude that this evidence supported the evidence of the
    respondents and was inconsistent with the evidence of the appellant.

Misapprehension of the Evidence

[10]

The appellant acknowledges that as the
    rear-ending party in a rear-end collision, he bears the onus of satisfying the
    court that the collision did not arise due to his negligence:
Beaumont
    v. Ruddy
, [1932] O.R. 441 (C.A.), at p. 442.

[11]

The appellant asks us to review the evidence and
    to come to different conclusions than the motion judge. He asks us to draw the
    following conclusions: the accident occurred 150 meters from the intersection
    (and not a few car lengths from the intersection as the respondents deposed);
    the accident occurred because the respondents vehicle suddenly changed lanes
    and came to a sudden stop; there were discrepancies in the respondents
    evidence; the appellants evidence was credible; and the accident must have happened
    because the respondent driver was distracted and tired.

[12]

It is trite law that both parties on a summary
    judgment motion are required to put their best foot forward. Summary judgment
    motions are decided by evidence of the facts and by inferences drawn from those
    facts. Not by speculation about the facts.

[13]

This motion was decided based in part on the
    failure of the appellant to give any coherent explanation of how the accident
    actually happened. No affidavit was filed by the passenger in the appellants
    car, who admitted on discovery that he never saw how the accident happened. The
    appellant, who did not adduce evidence from the police officer who investigated
    the accident, asks us to interpret the unproven and hearsay accident report in
    a manner that is speculative at best.

[14]

The appellant, as we have noted, gave
    conflicting explanations for how the accident occurred. His assertion that the
    respondents suddenly swerved in front of him and stopped was inconsistent with
    the physical evidence and with the respondents evidence, which the trial judge
    accepted. We do not agree that there was inconsistency in the respondents
    evidence or that the respondent driver admitted to having changed lanes prior
    to the accident. Nor do we accept the appellants pure speculation about how
    the accident might have happened.

Conclusion

[15]

As we have explained, the appellant has failed
    to demonstrate either an extricable error in principle or a palpable and
    overriding error in the motion judges assessment of the evidence. The motion
    judges conclusion that there was no genuine issue for trial is entitled to
    deference.

[16]

In the result, the appeal is dismissed. Costs
    to the Galaites respondents in the amount of $10,000 and to RBC General
    Insurance Co. in the amount of $5,000, both amounts inclusive of disbursements
    and all applicable taxes.

Released: G.R.S.  April 26, 2017

G.R. Strathy C.J.O.

E.E.
    Gillese J.A.

G. Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Collins v. Ontario, 2017 ONCA 317

DATE: 20170419

DOCKET: C62801

C62802

LaForme, Pepall and Pardu JJ.A.

C62801

BETWEEN

R. Maxine Collins

Responding Party (Appellant)

and

Her
    Majesty the Queen in Right of Ontario

Moving Party (Respondent)

C62802

AND BETWEEN

R. Maxine Collins

Responding Party (Appellant)

and

The
    Attorney General of Ontario

The
    Attorney General of Canada

Moving Parties (Respondents)

Daniel Mayer, for the moving party, The Attorney General
    of Ontario

Ayesha Laldin, for the moving party, The Attorney
    General of Canada

Maxine Collins, in person

Heard: In Writing

ENDORSEMENT

The Requests

[1]

By two separate letters  the first dated January 5, 2017 regarding
    C62801; the second dated January 25, 2017 regarding C62802  the Queen in Right
    of Ontario (Ontario) asks the Registrar of this court for orders under r. 2.1
    of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194 dismissing Maxine
    Collins appeals in C62801 and C62802. Ontario submits that each appeal, on its
    face, or the grounds of appeal at first glance, have no merit.

[2]

By letter dated November 30, 2016 the Attorney General of Canada
    (Canada) wrote a similar letter of request to the Registrar, the Superior Court
    of Justice  Civil, in connection with C62802. Canada in its letter simply paraphrases
    r. 2.1 and asserts; the application appears on its face to be frivolous,
    vexatious and an abuse of the courts process.

[3]

Both Ontario and Canada rely on this courts direction in
Simpson v.
    The Chartered Professional Accountants of Ontario
, 2016 ONCA 806 as
    authority for engaging this process. Essentially the request for submissions
    pursuant to r. 2.1 is to inquire into whether
this court should stay or
    dismiss Maxine Collins appeals because they each appear on its face to be frivolous
    or vexatious or otherwise an abuse of the process of the court
.

[4]

The requests were considered by Roberts J.A. on January 3, 2017. After a
    review of the court files and the requests for review under r. 2.1, Roberts
    J.A. directed the Registrar of this court to issue notices to the parties
    under rule 2.1.01(3) [in connection with appeals C62801 and C62802] and
    commence the process of collecting submissions from the appellant and
    respondents.

[5]

In regards to both appeals, Ontario and Ms. Collins have each filed
    submissions, only Ontario, however, has also filed a request record pursuant to
    this courts direction in
Simpson
, at paras. 42-47. Canada has not
    filed any submissions or request record for either but specifically relies on
    Ontarios documents filed.

[6]

To explain the appeals that Ontario and Canada seek to have dismissed,
    it will be helpful to provide a brief summary of the proceedings that give rise
    to the requests for dismissal.

Background

(1)

C62801

[7]

On September 26, 2016 Edwards J. of the Superior Court of Justice, for
    oral reasons given allowed Her Majesty the Queen in Right of Ontarios
    (Ontario) motion and struck Ms. Collins statement of claim without leave to
    amend and ordered Ms. Collins to pay costs fixed in the amount of $10,260.

[8]

By Notice of Appeal dated October 20, 2016 Ms. Collins seeks to appeal
    the order to this court.

[9]

The oral reasons are not part of the record on this request by Ontario.
    No order appears to have been signed, issued or entered.

[10]

We would not grant the respondents requests under r.
    2.1. In our view, the record before this court is inadequate and does not meet
    the requirements for a dismissal or stay under r. 2.1. This court is unable to
    properly assess the requests advanced.

(2)

C62802

[11]

On
    November 9, 2015, Turnbull J. of the Superior Court of Justice granted Canadas
    motion to strike Ms. Collins statement of claim in this matter without leave to
    amend. She filed a Notice of Appeal in connection with this order in which she
    asserted that the motion judge was unfair and biased towards her and denied her
    access to justice. She unsuccessfully attempted to have the Registrar of the
    Court of Appeal issue a Notice of Application addressing her alleged right to
    accurate and complete transcripts.

[12]

Ms.
    Collins then challenged the Registrars denial of this request by bringing an
    application to this court seeking an order that before she is required to pay
    for transcripts of court proceedings, she be assured they are accurate and
    complete. She did not want the transcriptionist to follow the Superior Courts
    normal procedure of providing the draft to the affected judge for editing as to
    accuracy prior to release. By order dated January 20, 2016 Lauwers J.A. (in
    chambers) dismissed her motion based on lack of jurisdiction to issue an
    originating process such as a Notice of Application. He also directed the Local
    Registrar to provide Ms. Collins with a compact disc with the live recording of
    the relevant proceeding when she paid for and received the transcript.

[13]

On
    January 25, 2017, the Chief Justice agreed with Lauwers J.A.s decision and
    granted Ms. Collins an extension of time to April 8, 2017 to perfect her
    appeal.

[14]

On
    July 5, 2016 Ms. Collins appeal of the decision of Lauwers J.A. was dismissed
    by a panel of this court as was her appeal of the decision of the Chief
    Justice. The panel also noted that Ms. Collins had taken no steps to perfect
    her appeal.

[15]

On
    October 6, 2016 Walters J. of the Superior Court of Justice dismissed Ms.
    Collins application for a declaration that she be guaranteed accurate and
    complete transcripts of the court proceedings. Justice Walters noted that Ms.
    Collins had brought similar proceedings in this court and this court had
    provided directions on how to proceed to her and to the local Superior Court
    office to produce the compact disc once she had paid for the transcript.
    Walters J. concluded that Ms. Collins application was premature. Her fears may
    never arise as once she pays for the transcript, she can compare it with the
    compact disc.

[16]

By
    Notice of Appeal dated October 20, 2016 Ms. Collins seeks to appeal Walter J.s
    order to this court.

Analysis

[17]

Rule 2.1 has typically been invoked to dismiss
    proceedings where the opposite party has engaged in abusive litigation conduct.
    The rule
is not for close calls and its availability is predicated on
    the abusive nature of the proceeding being apparent on the face of the
    pleadings themselves:

Scaduto v. The
    Law Society of Upper Canada
, 2015 ONCA 733,
    343 O.A.C. 87, at paras. 79, endorsing
Raji v. Myers
, 2015 ONSC 4066, [2015] O.J. No. 3436, at paras. 89.

[18]

For
    example, in
Raji
the pleadings made unfounded allegations of
    misconduct against a judicial officer and counsel. Likewise, in
Simpson
,
    the appeal came from an order declaring the appellant a vexatious litigant who
    was clearly using the court system as a way to inflict damage on people with
    whom he is upset: para. 22.

[19]

Ontario and Canada clearly take the view that Ms.
    Collins appeals lack merit. Absence of merit on its own, even assuming such
    absence, is not sufficient to justify dismissal under r. 2.1.
Simpson
, at para. 43, makes it clear that a r. 2.1 request is
    not a substitute for a motion to quash and filing the appropriate materials.
    The rule does not replace the bringing of a motion to quash an appeal for want
    of jurisdiction or for lack of merit. However, it does allow for a speedy process
    for disposing of proceedings and motions that on their face are frivolous,
    vexatious or otherwise an abuse of process.

[20]

Here, Ms. Collins appeal is clearly without merit.
    However, it is also abusive. She has been provided with guidance on how to
    proceed but has neglected to pay for the transcript so she can compare it with
    the compact disc to address any concerns she has. As a result, she has not
    perfected her appeal in spite of having been given an extension of time to do
    so.

[21]

Our system of justice is designed to provide fair,
    just and timely decisions.  Abuse of the process of the courts detracts from
    the ability of the system to achieve those objectives. This is unfair to the
    opposing parties, others in the system who wish to have their cases adjudicated
    and to the administration.

[22]

The r. 2.1 request in matter C62802 is granted.

H.S.
    LaForme J.A.

"S.E. Pepall
    J.A."

G. Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Cora Franchise Group Inc. v. Watters, 2017 ONCA 286

DATE: 20170406

DOCKET: C62520

Feldman, Sharpe and Roberts JJ.A.

BETWEEN

The Cora Franchise Group Inc.

Plaintiff (Defendant
    by Counterclaim)

(Respondent)

and

William Watters

Defendant (Plaintiff
    by Counterclaim)

(Appellant)

AND BETWEEN

2176693 Ontario Ltd.
    and William Watters

Plaintiffs by
    Counterclaim

(Appellants)

and

The Cora Franchise Group
    Inc.

Defendant by Counterclaim

(Respondent)

D. Andrew Thomson, for the appellant

Derek Ronde, for the respondent

Heard and released orally: March 31, 2017

On appeal from the order of Justice A.J. OMarra of the Superior
    Court of Justice, dated July 5, 2016.

ENDORSEMENT

[1]

The appellant, principal owner of 2176693 Ontario Ltd., a franchisee of the
    respondent, appeals a summary judgment against him as guarantor of the
    franchisees indebtedness.

[2]

The appellant does not dispute the franchisees indebtedness or his
    obligation as guarantor. However, he asserted by way of set-off and sought to
    assert by way of counterclaim a claim for damages arising from the loss of the
    potential sale of the franchise which failed to close when the franchisee
    refused to provide the franchisor with a release as required by the franchise
    agreement.

[3]

The motion judge found that there was no basis for the appellant to
    assert a set-off and that the franchisees claim for damages flowing from the
    loss of the sale was statute barred.

[4]

We see no error on the part of the motion judge.

[5]

The franchise agreement explicitly precludes set-off and, in any event,
    the right to damages asserted is that of the franchisee not the appellant.
    Moreover, the motion judge did not err including that any claim for damages was
    barred by the limitation period.

[6]

The franchisee commenced the successful application on October 2013 against
    the franchisor for a declaration that the provision in the franchise agreement
    requiring the release was invalid.

[7]

The motion judge correctly rejected the submission that the appellant
    only acquired the information necessary to commence a claim after the application
    and appeal judgments in that proceeding. The damages claim could have been
    brought at the same time as the declaratory proceeding and there is no merit to
    the submission that the limitation period did not start to run until after the
    Court of Appeals judgment.

[8]

The respondent cross-appeals the amount awarded by the motion judge.

[9]

We agree that the motion judge erred by awarding the amount reflected by
    the May 25, 2016 balance rather than the full extent of the debt as of the date
    of the judgment as claimed by the respondent.

[10]

Accordingly, the appeal is dismissed. The cross-appeal is allowed and a
    reference is directed to determine the amount owing as of the date of the
    judgment. Costs to the respondent fixed at $12,677.53, inclusive of
    disbursements and taxes.

K. Feldman J.A.

Robert J. Sharpe
    J.A.

L.B. Roberts
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Covenoho v. Pendylum Ltd., 2017 ONCA 284

DATE: 20170405

DOCKET: C62605

Rouleau, Pepall and Roberts JJ.A.

BETWEEN

Joss Covenoho

Appellant (Plaintiff)

and

Pendylum Ltd.

Respondent (Defendant)

Joss Covenoho, acting in person

Harj Mann, for the respondent

Heard: March 21, 2017

On appeal from the order of Justice Mario D. Faieta of
    the Superior Court of Justice, dated September 29, 2016, with reasons reported
    at 2016 ONSC 4969.

ENDORSEMENT

[1]

The appellant appeals from the dismissal of her motion for summary
    judgment in her wrongful dismissal action against the respondent, her former
    employer, as a result of which the motion judge dismissed the appellants
    action.  She also seeks leave to appeal the motion judges costs award against
    her in the amount of $28,000.

[2]

The appellant was employed by the respondent under a one-year fixed term
    contract. On July 10, 2013, the appellant signed a standard form agreement with
    the respondent. She commenced her employment on July 15, 2013. Article 2 of the
    contract between the parties provides as follows:

2.1      The term of this Agreement will commence on the date
    of this Agreement and will continue in full force and effect unless the
    Agreement is terminated as follows:

(a) immediately by PENDYLUM providing
    written notice to you if you violate or fail to honor any of these provisions
    of this Agreement or fail to perform your duties as set out in Appendix A in a
    satisfactory manner as determined by PENDYLUM (known as Cause); or if the
    PENDYLUM Client to which you have been contracted terminate[s] its contract
    with PENDYLUM for your services; OR

(b) by either party providing written
    notice of
at least two (2) weeks
to the other.

2.2      In the event of termination, we will have no liability
    to you, save and except to pay any accrued and earned compensation up to and
    including the date of termination.

2.3      Upon termination or expiration of the agreement, you
    agree to return and/or destroy all confidential information and copies and sign
    an undertaking that all Confidential Information has been returned and/or
    destroyed.

[3]

By letter dated October 11, 2013, the respondent terminated the
    appellants employment without notice or payment in lieu of notice, as follows:

Pursuant to paragraph 2.1a) of your Contract Agreement with
    Pendylum Inc., dated July 10, 2013, and specifically by reason of Pendylum
    Client Ceridians decision to terminate its contract with Pendylum Inc. for
    your services, we hereby advise you that your contract with Pendylum Inc. is
    hereby terminated with immediate effect.

[4]

The motion judge concluded that as the appellant had been employed for
    less than three months, she was not entitled to notice under the
Employment
    Standards Act
, 2000, S.O. 2000, Ch. 41 (
ESA
), and reasonable common
    law notice was not required under s. 2.1 of the contract. He also dismissed her
    claim for damages arising from bad faith in the manner of termination.

[5]

The appellants main ground of appeal is that the motion judge erred in
    dismissing her summary judgment motion and action on the basis that the
    respondent was entitled to terminate the appellants employment under Article 2
    of her employment contract. She submits that Article 2 is void because it is
    contrary to the provisions of the
ESA
, in that it purports to allow
    the respondent to terminate her employment without cause and without notice or
    payment in lieu of notice, regardless of the length of her employment.

[6]

We agree.

[7]

The termination provisions contained in Articles 2.1(a) and 2.2 of the
    contract are contrary to ss. 54, 57 and 58 of the
ESA
in that they
    purport to allow the respondent to terminate, without cause, the employment of the
    appellant, in the event that she had been continuously employed for more than
    three months, by providing less than the statutory minimum notice period. In
    determining whether the contract is in compliance with the
ESA
, the
    terms must be construed as if the appellant had continued to be employed beyond
    three months; if a provisions application potentially violates the
ESA
at
    any date after hiring, it is void:
Wright v. Young & Rubicam Group of
    Cos.
, 2011 ONSC 4720, [2011] O.J. No. 4960
,
    at paras. 27-37;
Shore v. Ladner Downs
, [1998] B.C.J. No. 1045
    (B.C.C.A.), at para. 16. As such, the termination provisions are void and
    common law standards apply:
Machtinger v. HOJ Industries Ltd.
, [1992]
    1 S.C.R. 986;
Wood v. Fred Deeley Imports Ltd.
, 2017 ONCA 158, [2017]
    O.J. No. 899; s. 5(1) of the
ESA
.

[8]

The appellant claims damages in the amount of $56,000, representing her
    salary for the 40 weeks that remained on her fixed term contract at the time of
    her employment termination. The motion judge determined that had the appellants
    employment not been validly terminated under the contract, he would have found
    that she was entitled to damages equivalent to her salary for the remainder of
    the unexpired term of the contract, without deduction for mitigation.

[9]

Having concluded that her employment was not validly terminated, we
    agree with the motion judges alternative finding in this regard.  As this
    court recently stated in
Howard v. Benson Group Inc.
, 2016 ONCA 256,
    129 O.R. (3d) 677, at para. 44: In the absence of an enforceable contractual
    provision stipulating a fixed term of notice, or any other provision to the
    contrary, a fixed term employment contract obligates an employer to pay an
    employee to the end of the term and that obligation will not be subject to
    mitigation. The termination provisions being void and of no force or effect, the
    appellant is entitled to receive the salary that she would have earned for the
    remaining weeks of her fixed-term contract.

[10]

For these reasons, we allow the appeal. We set aside the order and cost
    award of the motion judge and substitute a judgment awarding the appellant
    damages from the respondent in the amount of $56,000, together with pre and
    post judgment interest.

[11]

The respondent is to pay the appellant the amount of $1,664 on account
    of her disbursements.

Paul Rouleau
    J.A.

S.E. Pepall J.A.

L.B. Roberts
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Deslaurier Custom Cabinets Inc. v. 1728106 Ontario
    Inc.,

2017 ONCA 293

DATE: 20170412

DOCKET: C59429

Cronk, Pepall and Miller JJ.A.

BETWEEN

Deslaurier Custom Cabinets Inc.

Respondent (Plaintiff)

and

1728106 Ontario Inc.
and John Faught Steel Inc.

Appellant (Defendants)

D.H. Rogers, Q.C. and Rebecca Moore, for the appellant

Matthew J. Halpin, for the respondent

Heard: In Writing

On remand from the order of the Supreme Court of Canada,
    dated October 21, 2016.

By the Court:

I.        Background

[1]

On October 1, 2014, Deslaurier Custom Cabinets Inc. (the Tenant)
    obtained summary judgment in the Superior Court of Justice against 1728106
    Ontario Inc. (the Landlord) for recovery of its losses arising from a fire at
    premises leased by it from the Landlord under a commercial lease dated November
    28, 2007 (the Lease):
Deslaurier Custom Cabinets Inc. v. 1728106 Ontario
    Inc. and John Faught Steel Inc.
, 2014 ONSC 5148 and 2014 ONSC 5533.   The
    fire occasioned significant damage to the Landlords building and the Tenants
    property and business.

[2]

The Landlord appealed.  On April 4, 2016, this court allowed the appeal,
    set aside the summary judgment and dismissed the Tenants action against the
    Landlord:
Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc
., 2016
    ONCA 246, 399 D.L.R. (4th) 575.  Costs of the appeal were awarded to the
    Landlord:
Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc
., 2016
    ONCA 436.
[1]

[3]

The appeal hearing involved the following issues, described at para. 24
    of the Appeal Decision:

(1)

What
    standard of review applied to the motions judges decision?

(2)

Did
    the motions judge err in her interpretation of the Lease:

a)

by failing to hold that the Tenant had contractually assumed the risk of
    any damage to its property and business arising from fire?

b)

by relying on extrinsic evidence concerning the Landlords leases with
    other tenants in the building to aid in her interpretation of the Lease?

c)

by failing to hold that the Tenants claim was barred as a result of its
    failure to add the Landlord as an additional insured on its property damage
    insurance policy?

[4]

As set out in the Appeal Decision, this court held as follows concerning
    these issues:

(1)

the
    motions judge made several legal errors involving extricable questions of law
    in her interpretation

of the Lease.
    Consequently, appellate review of her decision was governed by the standard of correctness;

(2)

the
    motions judge erred in her interpretation of the Lease:

a)

by failing to hold that the Tenant had contractually assumed the risk of
    any damage to its property and business arising from fire at the leased
    premises;

b)

by admitting extrinsic evidence of the Landlords leases with other
    tenants in the absence of evidence establishing that the existence and contents
    of the other tenants leases formed part of the factual matrix of the Lease and
    in the face of some evidence to the contrary; and

c)

by ruling that the Tenants admitted breach of its contractual
    obligation to add the Landlord as an additional insured to its property damage
    insurance policy did not bar its subrogated claim against the Landlord for
    losses to the Tenants property arising from the fire.

[5]

On June 3, 2016, the Tenant sought leave to appeal to the Supreme Court
    of Canada.

[6]

On September 15, 2016, while the Tenants leave application was pending,
    the Supreme Court released its decision in
Ledcor Construction Ltd. v.
    Northbridge Indemnity Insurance Co.
, 2016 SCC 37, [2016] 2 S.C.R. 23.

[7]

The Supreme Court did not grant or deny leave to appeal.  Instead, on
    October 21, 2016, it directed that the case forming the basis of the
    application for leave to appeal be remanded to this court, pursuant to s.
    43(1.1) of the
Supreme Court Act
, R.S.C., 1985, c. S-26, for
    disposition in accordance with
Ledcor
 (the Remand Order).

[8]

Section 43 (1.1) provides:

Notwithstanding subsection (1), the Court may, in its discretion,
    remand the whole or any part of the case to the court appealed from or the
    court of original jurisdiction and order any further proceedings that would be
    just in the circumstances.

[9]

After the Remand Order, this court requested and received submissions
    from the parties on three issues: (a) the meaning and effect of the Remand Order;
    (b) the appropriate disposition in light of
Ledcor
; and (c) whether
    oral submissions should be received, at the request of the parties.  No request
    for a further oral hearing was made.  Accordingly, the remand case proceeded on
    the basis of the parties written submissions.

[10]

These reasons will explain why we remain of the view that the motions
    judges interpretation of the Lease is subject to appellate review on the standard
    of correctness and why, on application of that standard, we affirm our previous
    decision.

II.       Meaning and Effect of
    Remand Order

[11]

The Landlord argues that the Remand Order directs this court to revisit
    only those matters addressed in
Ledcor
, that it is not open to this
    court to reconsider other matters, and that the only issue to be determined is the
    standard of review applicable to the motions judges interpretation of the
    Lease in light of
Ledcor
.

[12]

The Tenants submissions do not expressly address the nature and scope
    of a remand case under s. 43(1.1) of the
Supreme Court Act
.  That
    said, the thrust of the Tenants argument is that the Remand Order requires
    this court to consider afresh the merits of the issues addressed in the Appeal
    Decision in light of
Ledcor
s holdings on the appropriate standard of
    review for contractual interpretation.  According to the Tenant,
Ledcor
dictates that the standard of palpable and overriding error applies to
    appellate review of the motions judges interpretation of the Lease, the
    application of which yields a different result.

[13]

Several provincial appellate courts have recently undertaken remand
    reviews:
Canada (Procureur gé
né
ral) c.

Syndicat
    canadien de la fonction publique, section locale 675
, 2016 QCCA 163, D.T.E.
    2016T-121, leave to appeal refused, [2016] C.S.C.R. No. 117, at para. 3;
British
    Columbia (Ministry of Forests) v. Teal Cedar Products Ltd.
, 2015 BCCA 263,
    70 B.C.L.R. (5th) 318, leave to appeal granted, [2015] S.C.C.A. No. 363, appeal
    heard and reserved November 1, 2016, at para. 2;
R. v. Polches
, 2008
    NBCA 1, 325 N.B.R. (2d) 262, leave to appeal refused, 349 N.B.R. (2d) 399
    (note), at para. 18.  See also this courts decision in
Sankar v. Bell
    Mobility Inc.
, 2017 ONCA 295, released concurrently with these reasons.

[14]

Having considered the terms of the Remand Order, the parties
    submissions and the available authorities, it is our view that the remand in
    this case is not at large.  Rather, it requires this court to reconsider its previous
    decision in light of the Supreme Courts authoritative pronouncements in
Ledcor
on issues that may have affected our disposition of the appeal.  This court
    should not revisit questions that
Ledcor
does not touch upon.  If the
    application of
Ledcor
mandates a different disposition, this court
    should alter its earlier decision in light of the teachings of
Ledcor
.
    If it does not, this court should affirm its earlier decision.

[15]

Based on these guiding principles, there are two issues now before this
    court.  First, does
Ledcor
mandate the application of a different
    standard of appellate review in respect of the motions judges interpretation
    of the Lease, namely, the palpable and overriding standard?  Second, if the
    appropriate standard is that of palpable and overriding error, does the
    application of that deferential standard require this court to alter the Appeal
    Decision?

III.       Appropriate
    Disposition in Light of
Ledcor

(1)

Standard of Review Discussion in Appeal Decision

[16]

The Appeal Decision addressed the standard of review applicable to the
    motions judges interpretation of the Lease by reference to the Supreme Court
    of Canadas decision in
Sattva Capital Corp. v. Creston Moly Corp.
, 2014
    SCC 53, [2014] 2 S.C.R. 633.

[17]

In the Appeal Decision, this court quoted the
Sattva
courts
    holding, at para. 50, that contractual interpretation typically involves issues
    of mixed fact and law, as it is an exercise in which the principles of
    contractual interpretation are applied to the words of the written contract,
    considered in light of the factual matrix.  As a result, this court stated at
    para. 25, the interpretation of a negotiated contract is generally subject to a
    deferential standard of review.

[18]

The Appeal Decision also recognized two exceptions to this general standard
    of review rule regarding contractual interpretation.

[19]

First,
Sattva
holds, at para. 53, that in rare cases the
    correctness standard of review will apply to questions of contractual
    interpretation where it is possible to identify an extricable question of law
    from within what was initially characterized as a question of mixed fact and
    law (citation omitted).  Justice Rothstein, writing for the Supreme Court, explained
    in
Sattva
, at para. 53, that extricable questions of law include
    legal errors involving the application of an incorrect principle, the failure
    to consider a required element of a legal test, or the failure to consider a
    relevant factor (citation omitted).

[20]

Second, at the time of the Appeal Decision, the jurisprudence of some
    provincial appellate courts, including this courts decision in
MacDonald
    v. Chicago Title Insurance Company of Canada
, 2015 ONCA 842, 127 O.R. (3d)
    663, leave to appeal refused, [2016] S.C.C.A. No. 39, recognized an exception
    to the
Sattva
general standard of review rule for the interpretation
    of standard form contracts.  These authorities had held that, for standard form
    contracts, the correctness standard applies.

[21]

In
Ledcor
, the Supreme Court held that the correctness standard
    does generally apply to the interpretation of standard form contracts as the
    factual matrix or surrounding circumstances are usually not engaged in the
    interpretation exercise.  See
Sankar
, at para. 11.

[22]

The Lease in this case is not a standard form contract but, rather, was
    negotiated by the parties.  In the first instance, therefore, the palpable and
    overriding error standard of review applied to the motions judges
    interpretation of the Lease.

[23]

However, in the Appeal Decision, this court held that the motions
    judges interpretation of the Lease was tainted by several legal errors
    involving extricable questions of law.  Consequently, applying
Sattva
standard of review principles, the correctness standard was engaged.  The court
    stated, at para. 31 of the Appeal Decision:

[T]he motions judge erred in law by failing to apply binding
    appellate authority regarding contractual allocation of risk.  She also erred
    in law by failing to assign meaning to all the contested terms of the Lease and
    by adopting a construction of the Lease that fails to accord with the governing
    principles of contractual interpretation.  As these errors involve extricable
    questions of law within the meaning of
Sattva
, the correctness standard
    of review applies.

(2)

Ledcor
Decision

[24]

Ledcor
involved the interpretation of an exclusion clause and
    an exception to that exclusion in a common form of builders all-risk property
    insurance.  The exclusion clause, a standard form provision, denied coverage
    for the cost of making good faulty workmanship.  As an exception to that
    exclusion, coverage applied for physical damage that result[ed] from the
    faulty workmanship:
Ledcor
, at para. 1.

[25]

The Supreme Court considered two issues in
Ledcor
, described at
    paras. 16-18.  First, what standard of appellate review applies to a trial
    judges interpretation of a standard form insurance contract? Second, what
    interpretation should be given to the faulty workmanship exclusion clause and
    the resulting damage exception to that exclusion contained in builders risk
    insurance policies?

[26]

The trial judge in
Ledcor
had found the insurers to be liable
    under the relevant all-risk insurance policy, a standard form contract.  The
    Court of Appeal of Alberta had held that standard form contracts are subject to
    appellate review on the correctness standard, and reversed the trial decision.
    The Supreme Court concluded that, in certain circumstances, standard form contracts
    are reviewable on the standard of correctness.  However, the majority of that
    court disagreed with the Court of Appeal of Albertas interpretation of the policy
    and restored the trial judges decision.

[27]

Justice Wagner, writing for the majority of the Supreme Court, began his
    analysis of the standard of review applicable to a standard form insurance
    contract by indicating, at para. 20, that the appeals then before the Court
    afforded an opportunity to clarify how
Sattva
applies to the
    interpretation of standard form contracts, sometimes called contracts of
    adhesion.  He went on to state the majoritys core holding on standard of
    review, at para. 24, in these terms:

I would recognize an exception to
    this courts holding in
Sattva
that contractual interpretation is a
    question of mixed fact and law subject to deferential review on appeal.  In my
    view, where an appeal involves the interpretation of a standard form contract,
    the interpretation at issue is of precedential value, and there is no
    meaningful factual matrix that is specific to the parties to assist the
    interpretation process, this interpretation is better characterized as a
    question of law subject to correctness review.

See also, to the same effect, the majoritys comments
    at paras. 4, 34 and 46.

[28]

Ledcor
thus identifies an exception to the general rule
    established by
Sattva
for contractual interpretation by holding that
    the proper interpretation of a contract is a question of law subject to appellate
    review on the standard of correctness where three criteria are satisfied:

(1)

the
    appeal involves the interpretation of a standard form contract;

(2)

the
    interpretation at issue is of precedential value; and

(3)

there
    is no meaningful factual matrix that is specific to the parties to assist the
    interpretation process.

[29]

Where these three criteria are not met,
Ledcor
confirms that the
    interpretation of even standard form contracts may involve issues of mixed fact
    and law reviewable on the deferential standard of palpable and overriding
    error.  Justice Wagner put it this way, at para. 48:

Depending on the circumstances, however, the interpretation of
    a standard form contract may be a question of mixed fact and law, subject to
    deferential review on appeal.  For instance, deference will be warranted if the
    factual matrix of a standard form contract that is specific to the particular
    parties assists in the interpretation.  Deference will also be warranted if the
    parties negotiated and modified what was initially a standard form contract,
    because the interpretation will likely be of little or no precedential value.
    There may be other cases where deferential review remains appropriate.

[30]

The
Ledcor
court distinguished
Sattva
on a factual
    basis noting, at para. 25, that
Sattva
involved a complex commercial
    agreement concluded by sophisticated parties, and not a standard form
    contract.  As a result,
Sattva
did not address the unique issues that
    standard form contracts raise.  In contrast,
Ledcor
was specifically
    concerned with the standard of review for standard form contracts.  And it is
    in respect of only standard form contracts that the exception for correctness
    review accepted in
Ledcor
may apply.

[31]

The
Ledcor
courts recognition of the correctness standard for
    appellate review of the interpretation of standard form contracts was also grounded
    in its conclusion that the reasons provided in
Sattva
for holding that
    contractual interpretation is a question of mixed fact and law subject to
    deferential appellate review are less compelling in the context of standard
    form contracts:
Ledcor
, at para. 26.  As the majority explained, at
    para. 32, for standard form contracts, the surrounding circumstances generally
    play less of a role in the interpretation process.  Moreover, where they are
    relevant, they tend not to be specific to the particular parties.  Consequently,
    the importance of the factual matrix in contractual interpretation carries less
    weight in cases involving standard form contracts.

[32]

Further, the interpretation of standard form contracts often has
    significant precedential import.  A review of standard form contracts on the
    standard of correctness therefore fosters the ability of appellate courts to
    fulfill their functions, including their mandate of ensuring consistency in the
    law:
Ledcor
, at paras. 33-45.

[33]

Of critical importance, nothing in
Ledcor
deviates from the
    holding in
Sattva
that the correctness standard of review applies to
    extricable questions of law arising within what is initially characterized as a
    question of mixed fact and law.

[34]

To the contrary,
Ledcor
affirms, at para. 21,
Sattvas
holding that the correctness standard still applies to the rare extricable
    questions of law that arise in the interpretation process.  The majority in
Ledcor
noted that this is consistent with the jurisprudence on the standard of review
    for questions of mixed fact and law and elaborated, at para. 36:

For questions of mixed fact and law, the correctness standard
    applies to extricable errors of law (such as the application of an incorrect
    principle) because, again, a review on the standard of correctness is necessary
    to allow appellate courts to fulfill their role.  However, where it is
    difficult to extricate the legal questions from the factual, appellate courts
    defer on questions of mixed fact and law.  [Citations omitted.]

[35]

Accordingly,
Ledcor
directs that
Sattva
should not be
    read as holding that contractual interpretation is always a question of mixed
    fact and law, and always owed deference on appeal:
Ledcor
, at para.
    46.

[36]

Justice Cromwell, in his separate reasons in
Ledcor
, agreed.  He
    stated, at para. 112:

It is important to remember that
Housen
did not hold
    that all applications of a legal standard to the facts should

be

reviewed

for palpable and overriding error.  As I
    have discussed,
Housen
recognized that sometimes the analysis will
    turn on an extricable pure question of law.
Sattva
adopted this
    holding.  Rothstein J. in
Sattva
acknowledged, echoing
Housen
,
    that it may sometimes be possible to identify an extricable question of law
    such as the application of incorrect principles, the failure to consider a required
    element of a legal test, or the failure to consider a relevant factor.  I
    therefore agree with Wagner J. that
Sattva
should not be read as
    holding that contractual interpretation is always a question of mixed fact and
    law: para. 46.
Sattva
was explicit on this point: para. 53.

[37]

The application of the correctness standard of review for an extricable
    question of law within what is initially characterized as a question of mixed
    fact and law therefore accords with both
Sattva
and
Ledcor
.

[38]

Ledcor
also affirms other critical
Sattva
holdings.  In
Sattva
, at para. 47, the Court emphasized the significance of the
    surrounding circumstances or factual matrix of a contract to the
    determination of the parties intent and the scope of their understanding.  The
    Court held, at para. 58, that the relevant surrounding circumstances consist
    only of objective evidence of the background facts at the time of the execution
    of the contract  that is, knowledge that was or reasonably ought to have been
    within the knowledge of both parties at or before the date of contracting
    (citation omitted).

[39]

Thus, under
Sattva
, the scope of the factual matrix is
    temporally limited to evidence of facts known to the contracting parties
    contemporaneously with the execution of the contract:
Shewchuk v.
    Blackmont Capital Inc.
, 2016 ONCA 912, at para. 41.  Further, while the
    surrounding circumstances will be considered in interpreting the terms of a
    contract, they must never be allowed to overwhelm the words of that agreement
    and the interpretation of a written contractual provision must always be
    grounded in the text and read in light of the entire contract (citations
    omitted):
Sattva
, at para. 57.

[40]

Nothing in
Ledcor
diminishes these important principles.

[41]

To summarize,
Ledcor
instructs that:

(1)

as
Sattva
holds, contractual interpretation is generally a question of
    mixed fact and law subject to appellate review on the deferential standard of
    palpable and overriding error;

(2)

as
Sattva
also holds, the correctness standard of review applies to
    extricable questions of law arising within what was initially characterized as
    a question of mixed fact and law;

(3)

as
    an exception to the general
Sattva
standard of review rule for
    contractual interpretation, the correctness standard applies where an appeal involves
    the interpretation of a standard form contract, the interpretation at issue is
    of precedential value, and there is no meaningful factual matrix that is
    specific to the parties to assist the interpretation process; and

(4)

as
Sattva
further holds, the factual matrix or surrounding circumstances
    of a contract remain an important consideration in the contractual
    interpretation exercise. The factual matrix, however, is temporally limited to
    objective evidence of the background facts at the time of contract formation,
    namely, knowledge that was or reasonably ought to have been known to both
    parties at or before the time of contracting.

(3)

Discussion

[42]

This courts key holdings in the Appeal Decision are set out at paragraph
    4 of these reasons.  For convenience, we repeat them here:

(1)   the
    motions judge made several legal errors involving extricable questions of law
    in her interpretation of the Lease.  Consequently, in accordance with
Sattva
,
    appellate review of her decision was governed by the standard of correctness;

(2)   the
    motions judge erred in her interpretation of the Lease:

a) by
    failing to hold that the Tenant had contractually assumed the risk of any
    damage to its property and business arising from fire at the leased premises;

b) by
    admitting extrinsic evidence of the Landlords leases with other tenants in the
    absence of evidence establishing that the existence and contents of the other
    tenants leases formed part of the factual matrix of the Lease and in the face
    of some evidence to the contrary; and

c) by ruling
    that the Tenants admitted breach of its contractual obligation to add the
    Landlord as an additional insured to its property damage insurance policy did
    not bar its subrogated claim against the Landlord for losses to the Tenants
    property arising from the fire.

[43]

The Tenant takes aim, on various grounds, at each of these holdings.  It
    contends that this courts identification of extricable questions of law in the
    motions judges interpretation of the Lease, as well as its consideration of
    the motions judges admission of extrinsic evidence to aid in the
    interpretation of the Lease, are inconsistent with
Ledcor
.  As a
    result, says the Tenant, this court should restore the judgment below in favour
    of the Tenant and remit the matter to the Superior Court of Justice for a
    determination of the balance of the issues in the action relating to damages.

[44]

We will consider the Tenants arguments in turn.

(a)

Extricable Questions of Law

[45]

The Tenant submits that, with the exception of the motions judges
    rulings on the admissibility of external evidence concerning the Landlords
    leases with other tenants and the availability of subrogated claims against
    additional insureds, each of the legal errors attributed to the motions judge in
    the Appeal Decision relate to the way in which she applied correctly identified
    legal principles to the unique factual circumstances before her.  Accordingly,
    the Tenant says, the questions of contractual interpretation that arose on
    appeal are questions of mixed fact and law subject to appellate review on the
    deferential standard of palpable and overriding error.

[46]

We disagree.

[47]

To begin, this courts application of the correctness standard of review
    to the motions judges interpretation of the Lease was grounded in the nature
    of the legal errors made by the motions judge.  Neither party argued at the
    appeal hearing, and this court did not hold, that the Lease is a standard form
    contract.  Nor is such an argument now advanced by the parties.  In particular,
    the Tenant accepts, indeed it emphasizes, that the Lease is a negotiated
    contract.

[48]

The exception for correctness review recognized in
Ledcor
for
    standard form contracts therefore has no application in this case.  The
    correctness standard applies to the motions judges interpretation of the Lease
    only if the Landlord has demonstrated an extricable question of law within what
    is otherwise initially characterized as a question of mixed fact and law.

[49]

On the authority of both
Sattva
and
Ledcor
, there is
    no doubt that, as a starting point, the interpretation of the Lease involves a question
    of mixed fact and law subject to deferential appellate review.  This
    characterization of contractual interpretation,
Sattva
instructs,
    recognizes that the goal of the contractual interpretation process is to
    ascertain the objective intentions of the parties, an exercise that is
    inherently fact specific, and that this weighs in favour of deference to
    first instance decision-makers on points of contractual interpretation:
Sattva
,
    at paras. 55 and 52.

[50]

But that does not end the matter. Where it is possible to identify an
    extricable question of law from within what was initially characterized as a
    question of mixed fact and law, both
Sattva
and
Ledcor
hold
    that the correctness standard of review applies.  Specifically, while
Sattva
warns that courts should be cautious in identifying extricable questions of law
    in contract disputes, it also confirms that certain types of legal questions,
    those that are readily extricable from the factual, trigger the correctness
    standard of review:
Sattva
, at paras. 54-55.  The
Ledcor
court agreed:
Ledcor
, at para. 36; see also
Housen v. Nikolaisen
,
    2002 SCC 33, [2002] 2 S.C.R. 235, at para. 36.

[51]

The heart of the problem is that the distinction between a question of
    law, which may be subject to correctness review, and a question of mixed fact
    and law, subject to review on the palpable and overriding standard, is
    difficult to draw.  As the majority in
Ledcor
stated, at para. 41,
    There is no bright-line distinction between questions of law and those of
    mixed fact and law.  See also
Housen
, at para. 28.

[52]

Both
Sattva
and
Ledcor
provide guidance on this
    issue.  The
Sattva
court, for example, at para. 51, cited
Canada (Director
    of Investigation and Research) v. Southam Inc.
, [1997] 1 S.C.R. 748 for
    the proposition that the degree of generality (or precedential value) [is]
    the key difference between a question of law and a question of mixed fact and
    law.
Southam
holds, at para. 37:

[A]s the level of generality of the
    challenged proposition approaches utter particularity, the matter approaches
    pure application, and hence draws nigh to being an unqualified question of
    mixed law and fact
Of course, it is not easy to say precisely where
    the line should be drawn; though in most cases it should be sufficiently clear
    whether the dispute is over a general proposition that might qualify as a
    principle of law or over a very particular set of circumstances that is not apt
    to be of much interest to judges and lawyers in the future.  [Emphasis added.]

[53]

Ledcor
, quoting
Sattva
and
Southam
, also
    endorses this proposition.  The Supreme Court stated in
Ledcor
, at
    para. 42:

Contractual interpretation is often the pure application of contractual
    interpretation principles to a unique set of circumstances.  In such cases, the
    interpretation is not of much interest to judges and lawyers in the future
    because of its utter particularity.  These questions of contractual
    interpretation are appropriately classified as questions of mixed fact and law,
    as the Court explained in
Sattva
.

[54]

The
Ledcor
court also noted, at para. 41, that:

The definition of questions of law  questions about what the
    correct legal test is (
Southam
, at para. 35)  does not preclude
    classifying some questions of contractual interpretation as questions of law.

[55]

Sattva
and
Ledcor
also instruct that certain legal errors
    constitute extricable questions of law for standard of review purposes.  These
    include: the application of an incorrect principle; the failure to consider a
    required element of a legal test; the failure to consider a relevant factor;
    the substantive requirements for the formation of a valid contract (
Sattv
a,
    at para. 53, quoting
King v. Operating Engineers Training Institute of
    Manitoba Inc.
, 2011 MBCA 80, 270 Man. R. (2d) 63, at para. 21); and the
    content of a given legal principle of contractual interpretation (
Ledcor
,
    at para. 33).

[56]

Notably, neither
Sattva
nor
Ledcor
provide an
    exhaustive list of the legal errors that may constitute extricable questions
    of law.  In both decisions, the Supreme Court provides examples of those
    questions of law that may trigger review on the correctness standard.

[57]

It also bears emphasis that the difficulty of identifying extricable
    questions of law in contractual interpretation disputes does not relieve a
    reviewing court from the necessity of properly characterizing the nature of the
    interpretation questions at issue.  Indeed, in contract disputes, the proper
    characterization of the proposed grounds of appeal is critical:
Sattva
,
    at para. 54.  Extricable questions of law must be addressed by a reviewing
    court when they arise.

[58]

In this case, having carefully considered the teachings of
Sattva
and
Ledcor
, we remain of the view that the motions judges
    interpretation of the Lease is tainted by legal errors involving extricable
    questions of law subject to review on the correctness standard.  Recall that
    the Appeal Decision, at para. 31, identified the following legal errors by the
    motions judge:

(1)

the
    failure to apply binding appellate authority regarding contractual allocation
    of risk;

(2)

the
    failure to assign meaning to all the contested terms of the Lease; and

(3)

the
    adoption of a construction of the Lease that fails to accord with the governing
    principles of contractual interpretation.

[59]

We have no difficulty in characterizing the first error as an extricable
    question of law.  This error involves the motions judges failure to consider
    the binding decisions of this court in
Madison Developments Ltd. v. Plan
    Electric Co.
(1997), 152 D.L.R. (4th) 653 (Ont. C.A.), leave to appeal
    refused, [1997] S.C.C.A. No. 659, and its progeny regarding contractual
    allocation of risk in a landlord and tenant relationship for losses arising
    from specified insured perils, including those occasioned by fire damage, and
    to factor the principles enunciated in those cases into her interpretation of
    the Lease: Appeal Decision, at paras. 32-36 and 40.

[60]

The Tenant argues that this error merely involves the motions judges
    application of governing legal principles to the particular facts before her
    and, hence, that it is properly characterized as a question of mixed fact and
    law.  In support of this argument, the Tenant points to passages from the
    Appeal Decision in which this court indicated that the motions judge erred in
    her assessment of risk allocation under the Lease by failing to apply the
    principles from
Madison Developments
and its progeny, and from those
    cases referred to in the Appeal Decision as the Trilogy, as well as the
    governing principles of contractual interpretation, in her interpretation
    analysis: see for example, Appeal Decision, at paras. 40 and 41.

[61]

We do not accept this argument.

[62]

We acknowledge that, on one reading, the passages from the Appeal
    Decision cited by the Tenant may be taken as suggesting that the legal errors
    attributed to the motions judge involve only the application of accepted legal
    principles to the construction of the Lease, a contract specific to the parties.

[63]

But this reading casts too narrow an interpretation on this courts
    holdings in the Appeal Decision.  While the language employed in the passages
    relied on by the Tenant could have been crafted with greater precision, read as
    a whole, it is clear from the Appeal Decision that the first legal error
    identified by this court was the motions judges failure to appreciate and take
    proper account of relevant precedent authorities, including binding authority,
    concerning contractual risk allocation.  For this reason, the introductory
    language of para. 40 of the Appeal Decision refers more broadly to the
    governing law regarding contractual allocation of risk.

[64]

The Tenants argument assumes that the motions judge correctly
    identified the legal authorities and principles regarding contractual
    allocation of risk that governed her interpretation of the contested provisions
    of the Lease and that she simply erred in her application of them to the specific
    facts of this case.  This is incorrect.

[65]

The motions judges first legal error was the failure to appreciate and
    take proper account of precedent authorities relevant to the interpretation
    process.  In our view, the question of what legal principles govern the
    interpretation of contractual risk allocation provisions is a question of law
    attracting the correctness standard of review.  Paragraph 41 of the Appeal
    Decision reads in part:

While the motions judge referred to the principles enunciated
    by the Supreme Court in the Trilogy (although she made no mention of
Madison
    Developments
), at no point in her reasons did she actually apply the
    Trilogy and
Madison Developments
to the interpretation of the Tenants
    Insurance Covenants.

[66]

This is not an error in the manner of application of properly
    identified, relevant legal principles.  In effect, the motions judge
    misdirected herself from the outset of the interpretation process by failing to
    identify and employ relevant legal authorities and principles in her
    interpretation of the risk allocation provisions of the Lease: Appeal Decision,
    at paras. 42-43.  On our reading of
Sattva
and
Ledcor
, this
    is a legal error involving an extricable question of law subject to correctness
    appellate review.

[67]

We are mindful that, where the matter at issue is of limited
    precedential value and approaches utter particularity,
Ledcor
and
Sattva
hold that it draws close to characterization as a question of mixed fact and
    law.  But where, as here, the legal error at issue involves the failure to
    properly identify and employ the governing authorities and applicable
    principles regarding contractual allocation of risk, the matter transcends the
    interests of the parties and implicates the broader principle that disputes,
    including contract disputes, will be resolved according to law.

[68]

As we see it, it cannot be said that such an error is of utter
    particularity to the parties, or that it is devoid of future interest to
    judges and lawyers.  The goals of certainty, clarity and consistency in the law
    dictate that missteps in the identification of controlling legal principles be
    characterized as questions of law subject to correctness review.  In
Housen
,
    for example, the Supreme Court held, at para. 9, that one of the underlying
    reasons for employing a correctness standard of review to matters of law is
    that the principle of universality requires appellate courts to ensure that
    the same legal rules are applied in similar situations.  This principle
    transcends the particularity of individual, fact-based disputes.

[69]

This conclusion accords with the principle that even where a first
    instance decision-maker correctly identifies the relevant legal test, if he or
    she fails to actually consider an element of the test, this will constitute an
    error of law.  As the majority of the Supreme Court notes in
Housen
,
    at para. 27, citing
Southam
, at para. 39:

[I]f a decision-maker says that the correct test requires him
    or her to consider A, B, C, and D, but in fact the decision-maker considers
    only A, B, and C, then the outcome is as if he or she had applied a law that
    required consideration of only A, B, and C.  If the correct test requires him
    or her to consider D as well, then the decision-maker has in effect applied the
    wrong law, and so has made an error of law.

[70]

In these circumstances,
Housen
confirms, at para. 27, that what
    appears to be a question of mixed fact and law  can actually be an error of
    pure law.  Similarly, where an impugned finding by a first instance
    decision-maker rests on an incorrect statement of the legal standard, this can
    amount to an error of law:
Housen
, at paras. 31 and 33-35.

[71]

The second and third errors, described above, concern the failure to
    assign meaning to all the contested terms of the Lease and the adoption of a
    construction of the Lease that is inconsistent with the governing principles of
    contractual interpretation.  The Tenant, renewing its argument advanced at the
    appeal hearing, submits that these errors do not involve extricable errors of
    law but, rather, the application of the legal principles of contractual
    interpretation to a unique set of facts, a question of mixed fact and law.

[72]

Again, we disagree.

[73]

The motions judges first error, described above, permeated her entire
    interpretation of the Lease.  In the Appeal Decision, we held, at para. 46,
    that her failure to deal directly with the parties agreed allocation of risk
    regarding fire loss or damage to the Tenants property and business flowed from
    her flawed analysis of the meaning of the word Premises, a defined term under
    the Lease.  This court held, among other things, that the motions judge improperly
    discounted the defined meaning of Premises under the Lease and ignored several
    relevant provisions of the Lease bearing on the intended meaning of Premises:
    Appeal Decision, at paras. 54-70.

[74]

The difficulty, in this regard, is that while the motions judge
    correctly listed the well-established principles of contractual interpretation
    (Appeal Decision, at paras. 54 and 59), she did not actually consider several
    of them in her interpretation of the Lease. Specifically, she ignored or
    discounted the requirements to consider the Lease as a whole, to give effect to
    the parties intentions (the principal objective of contractual interpretation)
    and, to the extent possible, to adopt an interpretation of the Lease that
    assigned meaning to each of its terms: Appeal Decision, at paras. 54, 59, 61 and
    66-70.

[75]

In short, the motions judge failed to consider a number of principles
    relevant to the interpretation of the Lease.  This failure constitutes a legal
    error subject to correctness review.
Sattva
, for example, holds that
    the failure to read a disputed contract as a whole is a question of law that is
    extricable from a finding of mixed fact and law:
Sattva
, at paras. 53,
    63-64.  See also
1298417 Ontario Ltd. v. Lakeshore (Town)
, 2014 ONCA
    802, 122 O.R. (3d) 401, leave to appeal refused, [2015] S.C.C.A. No. 43, at
    paras. 4, 7 and 8.

[76]

We therefore reject the Tenants claim that the legal errors identified
    in the Appeal Decision relate only to the way in which the motions judge
    applied the law to the interpretation of the particular contract before her.  The
    motions judges interpretation of the Lease, a question of mixed fact and law,
    involved extricable questions of law.  The correctness standard of appellate review
    therefore applied to those questions.

(b)

Other Issues Raised

[77]

Although the Tenant also attacks this courts holdings in the Appeal
    Decision concerning: (a) the motions judges admission of external evidence
    regarding the terms of the Landlords leases with other tenants, and (b) her
    ruling on the availability of subrogated claims against additional insureds, it
    does not claim that these issues fail to involve extricable questions of law.
    In our view, as set out in the Appeal Decision, they do.

[78]

This court employed the correctness standard of review in the Appeal
    Decision in its analysis of the motions judges rulings on these issues.  The
    only issues now before this court concern the appropriate standard of review in
    respect of the motions judges interpretation of the Lease in accordance with
Ledcor
,
    and whether the application of that standard requires this court to alter the
    Appeal Decision.  The Tenant does not challenge the application of the
    correctness standard to this courts previous consideration of the motions judges
    rulings on the admissibility of extrinsic evidence and the availability of
    subrogated claims against additional insureds.  In accordance with
Ledcor
,
    there is therefore no basis for alteration of the Appeal Decision in respect of
    these issues.

[79]

The Tenant also argues that this court erred in its consideration of the
    Tenants claim against the Landlord for business interruption losses.  As we
    have said, this remand case is not an at large review of the merits of the
    issues on appeal.  The Tenants business interruption claim against the
    Landlord was not the focus of submissions before the motions judge or this
    court at the appeal hearing.  It is not open to the Tenant to now raise what
    are essentially new arguments regarding its business interruption claim that
    were not pursued on appeal and that are not
Ledcor
-related.

IV.      Disposition of Remand
    Case

[80]

For these reasons, having reconsidered our decision in light of
Ledcor
,
    we affirm the Appeal Decision.  The parties may make written submissions as to
    costs.  The Landlord shall deliver its brief written submissions to the
    Registrar of this court within 15 days from the date of these reasons and the
    Tenant shall deliver its brief responding submissions to the Registrar within
    10 days thereafter.

Released:

APR 12 2017                                              E.A.
    Cronk J.A.

EAC                                                                      S.E.
    Pepall J.A.

B.W. Miller J.A.

[1]
We will refer in these reasons to the original judgment on appeal and this
    courts costs endorsement dated June 2, 2016, collectively, as the Appeal
    Decision.


COURT OF APPEAL FOR ONTARIO

CITATION: Elsley v. IP Trust, 2017 ONCA 341

DATE: 20170427

DOCKET: C61008

Feldman, Sharpe and Roberts JJ.A.

BETWEEN

Sandra Elsley

Plaintiff (Appellant)

and

Mildred Orescanin, Trustee for IP Trust and Shirley Bordynuik Trustee for
    Corp 1683091 and Shirley Bordynuik, Trustee for John Bordynuik Inc. and John
    Popovacki and Brian Seburn and Frank Coy A and John Bordynuik and John Doe and
    others

Defendants (Respondents)

Frederick Hawa, for the appellant

Mark Abradjian and Renata Kis, for the respondent

Heard and released orally: March 30, 2017

On appeal from the judgment of Justice Theresa Maddalena
    of the Superior Court of Justice, dated August 11, 2015.

ENDORSEMENT

[1]

The essential issue on this appeal is whether the motion judge erred in
    her conclusion that the appellant is not the sole or majority shareholder of
    John Bordynuik Inc. of Delaware (the Delaware Company) and therefore is not
    entitled to bring claims on behalf of, nor as an assignee of the Delaware
    Company against the respondents.

[2]

In our view, the record before the motion judge supports her conclusions
    that the respondent John Bordynuik was not obliged to, and did not give up his
    shares in the Delaware Company when he purchased his majority interest in JBI
    Inc. of Nevada (the Nevada Company). The email of June 24, 2009 from John
    Bordynuik to the Delaware shareholders as well as the Delaware Company share
    ledger from June 30, 2009, are two pieces of documentary evidence that the
    motion judge was entitled to accept, together with the affidavit evidence of
    John Bordynuik. The appellant relies on an acknowledgment in another document
    the Settlement Agreement, apparently signed on June 25, 2009, for an
    acknowledgment by John Bordynuik that she says supports her interpretation of
    his obligations. However, the motion judge did not accept this interpretation
    which was inconsistent with the email and the other evidence.

[3]

We accept the motion judges interpretation. We therefore see no basis
    to set aside the findings or the decisions of the motion judge to grant summary
    judgment dismissing the appellants claims and making the declarations as set
    out in her order under appeal dated August 11, 2015. Costs to the respondents
    are fixed at the agreed amount of $25,000 inclusive of disbursements and
    applicable taxes.

K. Feldman
    J.A.

Robert J. Sharpe
    J.A.

L.B. Roberts
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Etaliq Inc. v. Cisco Systems Inc., 2017 ONCA 271

DATE: 20170403

DOCKET: C62688

Juriansz, Lauwers and Hourigan JJ.A.

BETWEEN

Etaliq Inc.

Plaintiff/Defendant by way of counterclaim

(Respondent)

and

Cisco Systems Inc. and Cisco Systems Co.

Defendants/Plaintiffs by way of counterclaim

(Appellants)

James M. Wishart, for the appellants

Peter J. Cronyn, for the respondent

Heard: May 29, 2017

On appeal from the judgment of
    Justice Sylvia Corthorn of the Superior Court of Justice, dated August 12, 2016.

ENDORSEMENT

[1]

The respondent brought an action claiming the appellants improperly used
    confidential and proprietary information the respondent had disclosed to them
    in 2002. The respondent filed its action on September 9, 2011. The appellants
    moved under r. 20 to strike the claim on the basis that it was statute-barred
    by the
Limitations Act
.

[2]

In their motion, the appellants also sought orders declaring that the
    evidence on discovery of Kenneth Poisson, the principal of the respondent,
    would be binding on the respondent for all purposes, irrespective of the source
    of his knowledge, and could be used for all purposes against the interests of
    the respondent. The reason for that is that Mr. Poisson was also a principal of
    MetaData, a company associated with the respondent, and on behalf of MetaData
    had provided consulting services to the appellants and had access to
    information allegedly relevant to the discoverability of the respondents
    claim.

[3]

The motion judge issued an order granting the respondent partial summary
    judgment dismissing the appellants limitations defence, and adjourning the
    portion of the motion related to the examination for discovery of Mr. Poisson.

[4]

The appellants appeal from the motion judges dismissal of their
    limitations defence.

[5]

The motion judge found, at para. 50, that even if no distinction were
    made between Mr. Poissons knowledge acquired through MetaData and the
    respondent, the respondents obligation to exercise due diligence in the
    investigation of its potential claim against the appellants was not triggered
    prior to April, 2009. Further, she found, at para. 71, that to the extent Mr.
    Poisson was exposed to the appellants affairs through his work as a MetaData
    consultant, that exposure was not sufficient to constitute actual notice of a
    claim against [the appellants] or to trigger an obligation on the part of [the
    respondent] to exercise due diligence in the investigation of the potential
    claim against [the appellants].

[6]

We are not persuaded by the appellants argument that the motion judge
    made palpable and overriding errors of fact, and of mixed fact and law. The
    motion judge was called upon to consider a large and complex record and make
    findings. There was an evidentiary basis for all of her findings. It is not our
    function on appeal to reweigh the evidence.

[7]

The appellants also submitted the motion judge erred in law in her
    application of the reasonable diligence test. The appellants argue that she
    excused the respondent from making earlier inquiries that it refrained from
    making in order to avoid damaging its business prospects.

[8]

The submission, in our view, is based on isolated sentences of the
    motion judges reasons taken out of context. In considering all the
    circumstances, the motion judge had to consider the particular position of Mr.
    Poisson, who was subject to a non-disclosure agreement while working as a
    consultant to the appellants and other clients. She recognized the importance
    in the industry that individual consultants not breach confidentiality
    agreements into which they had entered. The record contained Mr. Poissons
    explanation why it was not until the appellants returned the respondents two
    demo servers that he discovered Cisco software that was potentially based on
    the respondents proprietary specification. He then embarked on a technical
    inquiry in breach of his confidentiality agreement. The motion judge accepted
    Mr. Poissons statement of the importance of his reputation with respect to
    confidentiality and his explanation of his ability to have discovered the
    respondents potential claim against the appellants at a date earlier than
    September 11, 2009.

[9]

We are satisfied the record supported the motion judges finding that
    the respondent, exercising reasonable diligence, could not have discovered its
    claim until September 11, 2009.

[10]

The parties contested the significance of the question the motion judge
    left open in the portion of the motion she adjourned. That interlocutory
    question is not one with which we are concerned. This appeal was taken from the
    motion judges final decision dismissing the limitations defence. In proceeding
    with their summary judgment motion, the appellants were obliged to put their
    best foot forward. As explained above, we are not persuaded there is any basis
    to interfere with the motion judges decision finally dismissing the
    appellants limitation defence.

[11]

The appeal is dismissed. The respondents costs of the appeal are fixed
    in the amount of $20,000, all-inclusive. In the absence of agreement, the
    quantum of the respondents costs of the motion below is referred to the motion
    judge.

"R.G.
    Juriansz J.A."

"P.
    Lauwers J.A."

"C.W.
    Hourigan J.A."


COURT OF APPEAL FOR ONTARIO

CITATION: Fillmore v. Hercules SLR Inc., 2017 ONCA 280

DATE: 20170404

DOCKET:
C62566

Juriansz, Lauwers and Hourigan
JJ.A.

BETWEEN

Roy Fillmore

Plaintiff (Respondent)

and

Hercules SLR Inc.

Defendant

(
Appellant
)

Craig R. Lawrence, for the appellant

David Vaughan, for the respondent

Heard: March 31, 2017

On appeal from the judgment of Justice James Diamond of
    the Superior Court of Justice, dated July 20, 2016 with reasons reported at
    2016 ONSC 4686.

ENDORSEMENT

By the Court:

[1]

The summary motion judge granted the plaintiff
    damages for wrongful dismissal based on a 17 month notice period. Although the
    appellant does not challenge the length of the notice period, it argues that
    the respondent failed to mitigate. In particular, the appellant argues that the
    respondents obligation to mitigate obliged him to accept the appellants offer
    of employment at a salary roughly 20% less than his former salary.

[2]

The appellant challenges the motion judges
    finding that the respondent was not obliged to accept the offer and therefore
    had not failed to discharge his duty to mitigate. For the reasons that follow,
    we dismiss the appeal.

[3]

The respondent was 51 years old and was employed
    as the defendants director of purchasing. He had been employed by the
    appellant for about 19 years and received a salary of about $82,000 with some
    additional benefits.

[4]

The appellant sought to restructure and decided
    to terminate the respondent without cause. The appellant provided the respondent
    with a severance offer and a new employment offer. The severance offer
    required him to sign and return a full and final release in exchange for which
    he would be provided with eight weeks written notice in accordance with the
    requirements of the
Employment Standards Act
,
2000
,
    S.O. 2000, c. 41
, and providing him with an additional payment
    of 12 weeks severance.

[5]

In the new employment offer he received on the
    same day, the respondent was offered a permanent full time position as the
    supervisor of service at a salary of more than 20% less than his current salary
    for doing the same work. The offer also provided him with a six month income
    guarantee at his old salary to assist him in his transition.

[6]

Both the offers were open for acceptance until
    August 24, 2015. The respondent did not accept either.

[7]

The following day, on August 25, 2015, the
    respondent sent an e-mail to the applicants representative asking whether the
    termination letter was now in effect. The representative sent an e-mail
    restating the terms of the severance offer and the new employment offer.

[8]

The trial judge puts the applicants position
    squarely in paragraph 24:

The defendant submits that Hubleys email renewed the expired
    New Offer of Employment to the plaintiff, and as such the plaintiff was offered
    a reasonable opportunity to mitigate his damages by returning to work for the
    defendant.  The defendant thus submits that by not accepting the New Offer
    of Employment, the plaintiff failed to discharge his duty to mitigate his
    damages.

[9]

The appellant relies on the decision of this
    court and
Farwell v. Citair Inc
, 2014 ONCA
    177, in particular para. 20:

There may also be merit in the argument that the circumstances
    here would support the imposition of an obligation on Mr. Farwell to mitigate
    by working through the notice period. But the appellant faces another obstacle,
    which, in my view, is insurmountable. To paraphrase
Evans
[
Evans
    v. Teamsters Local Union No. 31
, 2008 SCC 20, [2008] 1 S.C.R. 661], the
    appellant's mitigation argument presupposes that the employer has offered the
    employee a chance to mitigate damages by returning to work. To trigger this
    form of mitigation duty, the appellant was therefore obliged to offer Mr.
    Farwell the clear opportunity to work out the notice period
after
he refused to accept the position of Purchasing Manager and told the Appellant
    that he was treating the reorganization as constructive and wrongful dismissal.

[10]

The motion judge concluded that the new offer of
    employment was not consistent with this courts decision in
Farwell
because it was not an offer to work through the notice period.
    Instead, it was simply an offer for a new full time position at much less compensation.
    As the motion judge observed at para. 30:

There is nothing in the second letter which confirms that the
    potential acceptance of the New Offer of Employment would be without prejudice
    to the plaintiffs rights arising from his dismissal from his former position.

The motion judge concluded, at
    paragraph 31:

There is no obligation on the plaintiff to effectively risk
    handing the defendant a Full and Final Release through the back door and under
    the guise of mitigation efforts.

[11]

We agree.

[12]

The relevant test from
Evans
was set by Bastarache J. at para. 30:

This Court has held that the employer bears the onus of
    demonstrating both that an employee has failed to make reasonable efforts to
    find work and that work could have been found (
Red Deer College v. Michaels
,
    [1976] 2 S.C.R. 324). Where the employer offers the employee a chance to
    mitigate damages by returning to work for him or her, the central issue is
    whether a reasonable person would accept such an opportunity.

[13]

The motion judge found that on the facts of this case a
reasonable person in the respondents position is not obliged to
    accept a term risking waiver of the wrongful dismissal claim. We see no error
    in this finding.

[14]

The appeal is dismissed with costs in the agreed
    amount of $7,000
for the appeal inclusive of disbursements and taxes.

R.G.
    Juriansz J.A.

P.
    Lauwers J.A.

C.W.
    Hourigan J.A.