COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Wawrykiewicz, 2019 ONCA 21

DATE: 20190115

DOCKET: C63984

MacPherson, Roberts and Paciocco JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Matthew Wawrykiewicz

Appellant

Gregory Lafontaine and Ricardo Golec, for the appellant

Kevin Wilson and Wendy Levant, for the respondent

Heard: January 11, 2019

On appeal from the convictions entered by Justice Robert F.
    Goldstein of the Superior Court of Justice, sitting without a jury, dated
    February 15, 2017, and the sentence imposed on June 12, 2017, with reasons
    reported at 2017 ONSC 3527.

REASONS FOR DECISION

[1]

The appellant appeals against his
    convictions for multiple drug offences and seeks leave to appeal his sentence.

[2]

The charges against the appellant
    stemmed from two indictments.

[3]

The first set of charges arose from the
    December 29, 2013 warrantless entry by the police into a hotel room occupied by
    the appellant. The police went to the hotel room at the request of hotel
    management following complaints about excessive noise and the odour of
    marijuana reported near the appellants hotel room. The officers went to the
    room and, after there was no response when they knocked and identified
    themselves, they opened the lock with a key. They then entered the room after
    the appellant released the safety latch and stepped back. In plain view in the
    hotel bathroom, the police observed evidence of drug possession. They then
    obtained a warrant resulting in the seizure of cocaine and crack cocaine in
    what the appellant concedes were trafficking quantities. The police also
    executed a search warrant for the appellants car resulting in the seizure of
    more crack cocaine. Of particular significance to this appeal, the police also
    seized two cell phones incident to the appellants arrest.

[4]

Subsequently, the police had reason to examine
    the two cell phones and did so pursuant to a valid search warrant. The phone searches
    led the police to two addresses associated with the appellant, 105 The
    Queensway, Apartment 1905, and 83 Humbercrest Blvd., in Toronto, and gave the
    police the grounds to obtain drug related search warrants for those addresses.
    The second set of charges resulted from the execution of the Queensway and
    Humbercrest warrants. During those searches, conducted on February 18, 2014,
    the police seized great quantities of cocaine, heroin, marijuana, drug
    trafficking paraphernalia and drug proceeds.

[5]

The appellant brought an application
    for exclusion of the cell phones and the other evidence seized on both
    occasions. The heart of the application was the claim that the appellants right
    under s. 8 of the
Canadian Charter of Rights and Freedoms
to be secure from unreasonable search or seizure had been violated
    by the unlawful entry into the hotel room. The appellant argued that since the
    information required to support the February 18, 2014 search warrants came from
    the cell phones seized from the hotel room, evidence secured during the
    February 18, 2014 searches should be excluded as well.

[6]

The trial judge agreed that the entry
    into the hotel room by the police was without lawful authority and therefore a
    violation of s. 8, and that the unlawful hotel room search tainted the
    subsequent February 18, 2014 searches.

[7]

Despite finding a s. 8
Charter

breach, the trial
    judge held that all of the evidence on both charges was admissible. He
    determined that the seriousness of the illegal entry into the hotel room was
    tempered by the good faith of the police officers and that the impact of the
    breach was reduced by circumstances that lowered the appellants expectation of
    privacy. Since the reliable evidence seized was crucial to the prosecution of
    trafficking charges involving very serious quantities of drugs, he reasoned
    that exclusion of that evidence would adversely affect the repute of the
    administration of justice far more than would its admission. He therefore dismissed
    the appellants application.

[8]

After this ruling, the appellant did
    not contest the Crowns case against him. He was convicted of all charges. He
    was given a global sentence of 10 years, less 353 days of credit for
    pre-sentence custody and strict house arrest bail conditions. The trial judge
    declined to grant additional credit for the time the appellant spent on curfew.

[9]

The ten year global sentence consists
    of one year of concurrent sentences for the December 29, 2013 offences, with a
    further nine years consecutive for the February 18, 2014 offences. The nine
    years of consecutive sentences for the February 18, 2014 offences includes a
    sentence of four years for possession for the purpose of trafficking of approximately
    1.8 kg of powder cocaine and 8.5 g of crack cocaine, and five further years for
    possession for the purpose of trafficking of approximately 173 g of heroin. The
    other four of the six February 18, 2014 offences were sentenced concurrently to
    each other.

[10]

The appellant pursued appeals before
    this court based on the following alleged errors:

1.

The trial judge committed a palpable and overriding error
    in his decision not to exclude the evidence pursuant to s. 24(2) of the
Charter
because his good faith finding was largely based on
    erroneous factual findings that were against the weight of the evidence at
    trial, and he incorrectly concluded that the absence of bad faith equals good
    faith.

2.

The trial judge identified an erroneous starting point for
    his sentence for possession of cocaine for the purpose of trafficking, and
    failed to give effect to two mitigating factors, namely, the appellants
    self-employment in renovating a home for resale, and the hardship of his bail
    conditions.

[11]

We are not persuaded by the appellants
    submissions.

[12]

The trial judge did not make palpable
    and overriding errors in finding that the entry into the hotel room was made in
    good faith. Despite conflicting evidence about whether the hotel manager asked
    Constable McInerney to evict the occupants, the trial judge was entitled to
    accept Constable McInerneys evidence that this happened. There is no basis for
    concluding that the trial judge misapprehended the evidence on this point. Nor
    was it unreasonable for the trial judge to infer that the hotel manager did not
    remember doing so, given that Constable McInerneys evidence found support in
    the evidence of both Constables Dills and Panayotov.

[13]

The trial judge was also entitled to accept Constable McInerneys
    evidence that he believed that the hotel managers request gave him the lawful authority
    to enter the hotel room. The deference we owe to the trial judges findings of
    fact is not lessened because the
Charter

application was
    based on preliminary inquiry transcripts and documentation rather than oral
    evidence. As this court said in
FL Receivables Trust 2002-A v.
    Cobrand Foods Ltd.
, 2007 ONCA 425, 85 O.R. (3d) 561, at para. 46:

The principle of appellate deference to a trial judges
    fact-finding and inference-drawing applies even when the entire trial record is
    in writing.  That is so because the principle of deference is grounded in
    more than a trial judges ability to see and hear the witnesses.
    Deference recognizes that even on a written record, the trial judge lives
    through the trial while a court of appeal reviews the record only through the
    lens of appellate review.  Deference also preserves the integrity of the
    trial process, maintains the confidence of litigants in that process, reduces
    the number and length of appeals and therefore, the cost of litigation, and
    appropriately presumes that trial judges are just as competent as appellate
    judges to resolve disputes justly.

[14]

Nor did the trial judge equate the
    absence of bad faith with good faith, or base his good faith findings solely on
    the subjective belief of the officers that they were acting lawfully. It is
    clear that the trial judge considered the reasonableness of the officers beliefs
    before making his good faith findings. He noted that there was a dearth of case
    law regarding the statutory authority to enter a hotel room before finding that
    Constable McInerney believed he was acting under the authority of the
Trespass
    to Property Act
, R.S.O. 1990, c. T.21, and was
    attempting to comply with its requirements. He then assessed the reasonableness
    of the belief by other officers that the appellant had implicitly invited them
    to enter the hotel room. We would not give effect to this ground of appeal.

[15]

We also dismiss the sentencing appeal. The
    trial judge committed no error of principle in identifying the starting point
    sentence for the February 18, 2014 cocaine offence. His decision shows that he
    was well aware of the decision of this court in
R. v. Bryan
,
2011 ONCA 273
,
stating that sentences in
    the five to eight year range are appropriate for first offenders possessing for
    the purpose of trafficking slightly more than a pound of cocaine. We agree with
    the submission of the Crown that it was in the particular circumstances of this
    case that the trial judge concluded that the appropriate sentence for possession
    of approximately 1.8 kg of cocaine should begin at eight years. This was a
    second set of drug offences committed by a large-scale professional commercial
    drug dealer who was still on bail release for drug trafficking, and the
    trafficking count involved both powder and crack cocaine. In any event, after
    consideration of the principle of totality, the trial judge imposed a sentence
    for this offence of four years, far below the starting point he had identified.

[16]

Nor did the trial judge fail to
    consider the appellants self-employment in renovating a home for resale. He
    discussed the appellants enterprise in some detail in his sentencing decision.
    His decision not to give it weight was reasonable. On the evidence, the appellant
    was living well, not on his pro-social earnings from home renovation, but from his
    large scale professional drug dealing, and because, for a 31-year-old man, his
    employment record was sketchy.

[17]

Finally, the trial judge had discretion
    whether to give the appellant credit for the harsh conditions of bail release.
    The trial judge chose to give the appellant 90 days of credit for time he spent
    under strict house arrest, but not to give additional credit for the period he
    was under curfew. This was the trial judges decision to make. We would not
    interfere.

[18]

The conviction appeal is dismissed. Leave
    to appeal the sentence is granted, but the sentence appeal is dismissed.

J.C.
    MacPherson J.A.

L.B.
    Roberts J.A.

David
    M. Paciocco J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Weir, 2019 ONCA 40

DATE: 20190122

DOCKET: C65453

Doherty, Miller and Trotter JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Crystal Weir

Appellant

Erin Dann and Janani Shanmuganathan, for Crystal Weir
(deceased)

Karen Shai, for the respondent

Heard: January 21, 2019

On appeal from the convictions entered on March 16, 2017
by Justice Randall W. Lalande of the Ontario Court of Justice.

APPEAL BOOK ENDORSEMENT

[1]

The appellant has died. The parties ask us to hear the appeal.

[2]

They agree that the conviction represents a miscarriage of justice.
Indeed the Crown precipitated this proceeding. In the circumstance, we agree
that the appeal should be heard.

[3]

The appeal is allowed, the conviction is set aside and an
acquittal is entered.


WARNING

The President of the panel hearing this
    appeal directs that the following should be attached to the file:

An order restricting publication in this
    proceeding under ss. 486.4(1), (2), (2.1), (2.2), (3) or (4) or 486.6(1) or (2)
    of the
Criminal Code
shall continue.  These sections of
the
    Criminal Code
provide:

486.4(1)       Subject to subsection
    (2), the presiding judge or justice may make an order directing that any
    information that could identify the victim or a witness shall not be published
    in any document or broadcast or transmitted in any way, in proceedings in
    respect of

(a)     any of the following offences;

(i)      an offence under section 151,
    152, 153, 153.1, 155, 159, 160, 162, 163.1, 170, 171, 171.1, 172, 172.1, 172.2,
    173, 210, 211, 213, 271, 272, 273, 279.01, 279.011, 279.02, 279.03, 280, 281,
    286.1, 286.2, 286.3, 346 or 347, or

(ii)      any offence under this Act, as
    it read at any time before the day on which this subparagraph comes into force,
    if the conduct alleged involves a violation of the complainants sexual
    integrity and that conduct would be an offence referred to in subparagraph (i)
    if it occurred on or after that day; or

(iii)     REPEALED: S.C. 2014, c. 25,
    s. 22(2), effective December 6, 2014 (Act, s. 49).

(b)     two or more
    offences being dealt with in the same proceeding, at least one of which is an
    offence referred to in paragraph (a).

(2)     In proceedings in respect of the
    offences referred to in paragraph (1)(a) or (b), the presiding judge or justice
    shall

(a)     at the first reasonable
    opportunity, inform any witness under the age of eighteen years and the victim
    of the right to make an application for the order; and

(b)     on application made by the
    victim, the prosecutor or any such witness, make the order.

(2.1) Subject to subsection (2.2), in
    proceedings in respect of an offence other than an offence referred to in
    subsection (1), if the victim is under the age of 18 years, the presiding judge
    or justice may make an order directing that any information that could identify
    the victim shall not be published in any document or broadcast or transmitted
    in any way.

(2.2) In proceedings in respect of an
    offence other than an offence referred to in subsection (1), if the victim is
    under the age of 18 years, the presiding judge or justice shall

(a) as soon as feasible, inform the
    victim of their right to make an application for the order; and

(b) on application of the victim or the
    prosecutor, make the order.

(3)     In proceedings in respect of an
    offence under section 163.1, a judge or justice shall make an order directing
    that any information that could identify a witness who is under the age of
    eighteen years, or any person who is the subject of a representation, written
    material or a recording that constitutes child pornography within the meaning
    of that section, shall not be published in any document or broadcast or
    transmitted in any way.

(4)     An order made under this section
    does not apply in respect of the disclosure of information in the course of the
    administration of justice when it is not the purpose of the disclosure to make
    the information known in the community. 2005, c. 32, s. 15; 2005, c. 43, s.
    8(3)(b); 2010, c. 3, s. 5; 2012, c. 1, s. 29; 2014, c. 25, ss. 22,48; 2015, c.
    13, s. 18..

486.6(1)       Every person who fails to
    comply with an order made under subsection 486.4(1), (2) or (3) or 486.5(1) or
    (2) is guilty of an offence punishable on summary conviction.

(2)     For greater certainty, an order
    referred to in subsection (1) applies to prohibit, in relation to proceedings
    taken against any person who fails to comply with the order, the publication in
    any document or the broadcasting or transmission in any way of information that
    could identify a victim, witness or justice system participant whose identity
    is protected by the order. 2005, c. 32, s. 15.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Zaher, 2019 ONCA 59

DATE: 20190128

DOCKET: C62852

Doherty, Miller and Trotter JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Sandra Zaher

Appellant

Erin Dann and Janani Shanmuganathan, for the appellant

Jeremy Streeter, for the respondent

Heard: January 21, 2019

On appeal from the conviction entered on July 8, 2016 and
    the sentence imposed on January 25, 2017 by Justice Renee M. Pomerance of the Superior
    Court of Justice, sitting without a jury.
[1]

REASONS FOR DECISION

[1]

The police received information that the appellant, a lawyer, was
    counseling clients to lie to immigration authorities to gain refugee status. A
    police officer posing as a refugee claimant went to the appellants office,
    with another officer posing as an interpreter. He sought the appellants
    assistance in advancing his refugee claim. Their conversations were intercepted
    pursuant to a judicial authorization. The Crown maintained that in the
    conversations, the appellant counseled and coached the undercover officer to
    provide a false story to the immigration authorities in support of his refugee
    claim.

[2]

The appellant was convicted of three charges, all of which arose out of
    those conversations with the undercover officer. She received a jail sentence
    totaling one year.

[3]

The appellant appeals conviction and sentence. At the end of argument,
    the court indicated that the appeal would be dismissed with reasons to follow.
    These are those reasons.

The Conviction Appeal

[4]

There is one ground of appeal. The appellant contends that the trial
    judge erred in upholding the authorizations to intercept the appellants
    communications with an undercover police officer posing as her client. The
    authorizations were issued pursuant to s. 184.2 of the
Criminal Code
(interception with consent).

[5]

The appellant submits that there were material omissions and
    misrepresentations in the affidavit sworn to obtain the warrant to intercept.
    She contends that if the misrepresentations are removed from the affidavit,
    there is no basis upon which an issuing judge acting reasonably could have been
    satisfied that the proposed interceptions would provide information concerning
    the named offences.

[6]

The appellant submitted that the errors in the affidavit undermined the
    credibility of the affiant and the credibility of the informant, who had
    advised the affiant that the appellant had counseled him to make false
    statements to the immigration authorities in support of his refugee claim. The
    primary attack was on the credibility of the informant.

[7]

The appellant argues that if the warrant should not have issued because
    of the misstatements in the affidavit, the interceptions of the appellants
    conversations with the undercover officer violated s. 8 of the
Charter
.
    The appellant contends that the interceptions should have been excluded from
    evidence.

[8]

The arguments on appeal tracked those made to the trial judge. On
    appeal, counsel did refer to certain other omissions or misrepresentations in
    the affidavit which were not stressed at trial. These omissions and
    misrepresentations were, however, less significant than those highlighted at
    trial and emphasized on appeal.

[9]

The trial judges detailed and careful reasons for not excluding the
    interceptions from evidence are found at:
R. v. Zaher
, 2014 ONSC 7565.
    The trial judge found two material errors in the affidavit. In considering the
    effect of those errors on the lawfulness of the authorizations, the trial judge
    correctly set out the applicable law and standard of review: see reasons at
    paras. 35-36.

[10]

The first misstatement identified by the trial judge appears at para. 8
    of that affidavit. The officer alleged:

As detailed below, the RCMP received information in 2011 that
    Sandra Zaher, a Windsor lawyer, was actively counseling individuals to
    misrepresent themselves to the Immigration and Refugee Board

[11]

The remainder of the affidavit refers only to the appellant counseling a
    single individual with respect to refugee status. The police had no evidence
    she counseled anyone else.

[12]

In his cross-examination, the affiant acknowledged that the use of the
    word individuals was incorrect. The trial judge described the word as
    misleading. She went on to hold, at para. 45:

It is self-evident and was acknowledged by the Crown that the
    sentence about multiple persons is misleading and must be excised from the
    affidavit. I find that excising that single sentence cures the defect. There is
    no reason to believe that the sentence distorted the meaning of any of the
    other averments in the affidavit because they are all very closely concerned
    with only one case, that of Mr. Al-Awthan. I find that the removal of that
    sentence does not displace the foundation for the issuance of the order.
    Ultimately, the order was not predicated on any allegation of multiple
    offences. It was predicated on a detailed description of one case involving Mr.
    Al-Awthan. I am satisfied that, had the offending sentence not appeared in the
    affidavit, the order would nonetheless have issued.

[13]

The error in para. 8 did not have any impact on the informants
    credibility or reliability. It could potentially undermine the affiants
    credibility. However, as explained by the trial judge, the reference to
    individuals in para. 8 had no potential to mislead the issuing justice when
    that word is considered in the context of the entirety of the affidavits
    contents.

[14]

It is also relevant in considering whether the error in para. 8 was
    deliberate to have regard to the nature of the information that the informant
    gave to the police. The misconduct described by the informant suggested a
    practice, and not a single isolated act. It was implicit in the nature of the
    information provided by the informant that the appellant routinely counseled refugee
    claimants to lie. That does not, of course, make the reference to individuals
    in para. 8 any less inaccurate. It does, however, offer a somewhat benign
    explanation for the inaccurate reference in para. 8.

[15]

The second error in the affidavit identified by the trial judge in the
    affidavit appears at para. 24. In that paragraph, the affiant sets out his
    reasons for believing the informants allegation that the appellant counseled
    him to lie to the immigration authorities. The affiant refers to the informant
    as having nothing to gain by coming forward and, in fact, everything to lose.

[16]

Paragraph 24 does not contain any material misrepresentations. The trial
    judge did, however, conclude that the affiant failed to disclose certain facts
    that were relevant to an assessment of the informants credibility and, in
    particular, his motives for implicating the appellant.

[17]

During cross-examination of the affiant, it became clear that the
    informant had suggested to the affiant on more than one occasion that he had
    been told by the person who encouraged him to report the appellant to the
    authorities that if he assisted the authorities they would, in turn, help him
    stay in Canada.

[18]

The trial judge concluded that the affiant should have disclosed this
    information in the affidavit when addressing the informants possible motives:
    see reasons at para. 55.

[19]

The trial judge ultimately concluded, however, that the rest of the
    information in the affidavit considered along with the evidence about the
    informants possible motive that had not been included in the affidavit, still
    provided a basis upon which the information would provide reasonable grounds
    upon which to grant the authorization. She said, at para. 59:

I am satisfied that had the motive been disclosed, it would not
    have affected the issuance of the order. I have spoken in detail about this
    motive as opposed to others because I find this motive to be the most compelling.
    Suffice it to say, however, I find that the order could and would still have
    issued if any or all of the alleged motives had been disclosed.

[20]

In addition to the two errors examined at length by the trial judge,
    counsel on appeal made reference to other minor shortcomings in the affidavit. Some
    were addressed by the trial judge: reasons at paras. 61-63. In our view, none
    of these alleged shortcomings could have had any impact on the decision to
    grant the authorization. We do not propose to examine each individually.

[21]

Before moving to the sentence appeal, we wish to emphasize one
    additional finding made by the trial judge. In the context of considering
    admissibility under s. 24(2) of the
Charter
, the trial judge had this
    to say about Detective Richardson, the affiant:

Sergeant Richardson was acting in good faith and he was
    genuinely trying to test the credibility of the affiant [informant] and was
    genuinely trying to put forward an accurate picture of the case. While he
    failed to do so in two respects, those examples were not born of any deliberate
    intention to mislead.

[22]

We defer to this credibility assessment. The absence of any attempt by
    the affiant to mislead the judge on the application for the authorization is a
    significant consideration in determining whether the authorization would have
    been granted but for the errors in the affidavit.

[23]

In summary, the appellant invites this court to redo the trial judges
    analysis and to treat the errors in the affidavit, especially the failure to
    refer to the informants motive, as having a much greater impact on the
    viability of the authorization than did the trial judge. This court cannot go
    down that road. The trial judges findings of fact, and her credibility
    assessments, are entitled to deference. The trial judge clearly articulated her
    credibility findings and factual findings. She also identified and applied the
    correct legal principles in assessing the validity of the authorization.

[24]

We see no reason to interfere with the trial judges ruling. The
    conviction appeal is dismissed.

The Sentence Appeal

[25]

The trial judge was faced with a very difficult problem on sentence. The
    offences are serious. They are made much more serious by the fact that the
    appellant is a lawyer who used her professional standing to commit crimes
    against the administration of justice.

[26]

The appellant is a 54 year old first offender. She has a long marriage
    and two grown children. The appellant is respected in the legal community. Several
    letters filed on sentencing attested to her integrity, professionalism and
    commitment to her clients.

[27]

The appellant has had more than her share of personal problems. Most
    recently, her mother has become seriously ill and the appellant has assumed
    responsibility for her day-to-day care.

[28]

The trial judge was sensitive to the competing considerations presented
    on sentencing. She concluded that while the appellants mental and physical
    health concerns entitle her to some mitigation of sentence, there was nothing
    in the trial record or the evidence on sentencing to suggest that those
    health-related issues had any connection to the commission of the offences or
    the level of her moral culpability:
R. v. Zaher
, 2017 ONSC 582, at
    para. 25. We would defer to that assessment.

[29]

There was also no basis upon which we could interfere with the trial
    judges conclusion that a conditional sentence was inappropriate having regard
    to the paramount importance of general deterrence and denunciation: see reasons
    at paras. 56-57.

[30]

We would not interfere with the length of the sentence. The circumstances
    required a significant jail term. Hopefully, the appellant can get something
    positive out of this experience. Like the trial judge, we recommend that she be
    placed in a facility where she has access to meaningful psychological
    counseling and support. We trust the correctional authorities to take
    appropriate steps to facilitate that access.

[31]

Leave to appeal sentence is granted, but the appeal is dismissed.

Doherty J.A.

B.W. Miller J.A.

G.T. Trotter J.A.

[1]
There is a non-publication order in respect of evidence referring to a prior
    act of violence against the appellant.


COURT OF APPEAL FOR ONTARIO

CITATION: Reference re Greenhouse Gas Pollution Pricing Act,
    2019 ONCA 29

DATE: 20190118

DOCKET: C65807 (M49919, M49949, M49950, M49955, M49957, M49961,
    M49963, M49965, M49966, M49968, M49970, M49971, M49972 & M49974)

MacPherson J.A. (Motion Judge)

IN THE MATTER OF A REFERENCE to the Court of
    Appeal pursuant to section 8 of the
Courts of Justice Act
, RSO 1990,
    c. C.34, by Order-in-Council 1014/2018 respecting the constitutionality of the
Greenhouse
    Gas Pollution Pricing Act
, Part 5 of the
Budget Implementation Act,
    No. 1
, SC 2018, c. 12

Gareth Morley, for the moving party Attorney General of
    British Columbia

Amir Attaran and Matt Hulse, for the moving party
    Athabasca Chipewyan First Nation

Stewart Elgie, for the moving party Canadas Ecofiscal
    Commission

Joseph Castrilli, for the moving party Canadian
    Environmental Law Association, Environmental Defence, and Sisters of Providence
    of St. Vincent de Paul

Jennifer L. King and Michael Finley, for the moving
    party Canadian Public Health Association

R. Bruce E. Hallsor, for the moving party Canadian
    Taxpayers Federation

Marc Bishai, for the moving party
    Centre québécois du droit de lenvironnement and Équiterre

Nathan Hume, for the moving party Intergenerational
    Climate Coalition

Lisa DeMarco and Jonathan McGillivray, for the moving
    party International Emissions Trading Association

Cynthia Westaway and Nathalie Chalifour, for the moving
    party United Chiefs and Councils of Mnidoo Mnising

Ryan Martin, for the moving party United Conservative
    Association

Greg Vezina, acting in person

Sharlene Telles-Langdon, Brooke Sittler, Mary Matthews
    and Ned Djordjevic, for the Attorney General of Canada

Josh Hunter and Thomas Lipton, for the Attorney General
    of Ontario

Heard: January 15, 2019

A.

Overview

[1]

By order-in-council, the Lieutenant Governor in Council referred a
    reference to this court concerning the constitutionality of the
Greenhouse
    Gas Pollution Pricing Act
, S.C. 2018, c. 12, s. 186. On August 30, 2018, I
    issued an order providing a timeline for hearing the reference and setting out the
    procedures for parties wishing to intervene in the matter. On January 15, 2019,
    I heard motions from various parties seeking leave to intervene and/or file a
    record. These reasons address those motions and other procedural matters.

B.

The Interventions

[2]

Pursuant to my order of August 30, 2018, any Attorney General could
    intervene as of right in this reference by serving notice of his or her intention
    to intervene on the Attorney General of Ontario and the Attorney General of
    Canada and filing the notice with this court. Three Attorneys General have served
    and filed notices: (1) the Attorney General of New Brunswick; (2) the Attorney
    General of British Columbia; and (3) the Attorney General of Saskatchewan. I
    grant them leave to intervene.

[3]

Beyond the Attorneys General, any party seeking leave to intervene could
    do so by serving a motion for leave to intervene on the Attorney General of
    Ontario and the Attorney General of Canada and filing it with the court.
    Thirteen parties have done so. Many of these parties have already been granted
    leave to intervene in a parallel reference challenging the constitutionality of
    the
Greenhouse Gas Pollution Pricing Act
in the Court of Appeal for
    Saskatchewan (Docket: CACV3239). In the reference in Saskatchewan, the court
    granted leave to all parties seeking to intervene, notwithstanding some
    opposition.

[4]

In this case, the Attorney General of Ontario and the Attorney General
    of Canada consent to or do not oppose the motions for leave to intervene of six
    of the thirteen parties seeking leave. These six parties are:

1)

Assembly
    of First Nations;

2)

Canadian
    Environmental Law Association, Environmental Defence, and Sisters of Providence
    of St. Vincent de Paul;

3)

Canadian
    Taxpayers Federation;

4)

David
    Suzuki Foundation;

5)

United
    Chiefs and Councils of Mnidoo Mnising; and

6)

United
    Conservative Association.

[5]

I agree that these six parties should be granted leave to intervene and
    order accordingly.

[6]

The Attorney General of Canada also consents to the motions for leave to
    intervene of six of the seven other parties seeking leave. The Attorney General
    of Ontario opposes these motions. These six parties are:

1)

Athabasca
    Chipewyan First Nation;

2)

Canadas
    Ecofiscal Commission;

3)

Canadian
    Public Health Association;

4)

Centre québécois du droit de lenvironnement and
    Équiterre;

5)

Intergenerational Climate Coalition;
and

6)

International
    Emissions Trading Association.

[7]

I grant leave to intervene to these six parties. In my view, they have
    satisfied the test for intervener status.

[8]

In determining motions for leave to intervene, the court will generally
    consider the nature of the case, the issues which arise and the likelihood of
    the applicant being able to make a useful contribution to the resolution of the
    appeal without causing injustice to the immediate parties:
Peel (Regional
    Municipality) v. Great Atlantic & Pacific Co. of Canada
(1990), 74
    O.R. (2d) 164 (in Chambers), at p. 167; see also
Bedford v. Canada
    (Attorney General)
, 2009 ONCA 669, 98 O.R. (3d) 792, at
    para. 2. In constitutional cases, the rules governing motions for leave to
    intervene are relaxed:
Peel
, at p. 167. Nevertheless,
    an applicant seeking to intervene in constitutional litigation must usually
    meet
at least one of the following criteria: (1) the applicant
has a real, substantial and identifiable interest in the subject matter
    of the proceedings; (2) the applicant has an important perspective distinct
    from the immediate parties; or (3) the applicant is a well-recognized group
    with a special expertise and a broadly identifiable membership base:
Bedford
, at para. 2; see also
P.S. v. Ontario
,
    2014 ONCA 160, 317 O.A.C. 219 (in Chambers), at para. 6.

[9]

Applying the applicable principles in this case, I grant leave to
    intervene to Athabasca Chipewyan First Nation, Canadas Ecofiscal Commission, Canadian
    Public Health Association, Centre québécois du droit de lenvironnement and
    Équiterre, Intergenerational Climate Coalition, and International Emissions
    Trading Association. This reference raises important issues about the
    constitutionality of legislation. These proposed interveners have each
    established that they have a real interest in the proceeding and will make
    useful submissions distinct from the Attorney General of Ontario and the
    Attorney General of Canada without causing them prejudice. As a result, I grant
    them leave to intervene.

[10]

I
    decline, however, to grant leave to the one remaining party seeking leave to
    intervene, Mr. Greg Vezina. Both the Attorney General of Ontario and the
    Attorney General of Canada oppose his intervention in this matter.

[11]

According
    to his affidavit evidence, Mr. Vezina is the founder and chairman of two energy
    technology companies with interests relating to clean fuel standards and the
    use of ammonia as an alternative fuel. Mr. Vezinas submissions reflect a keen
    interest in scientific and policy issues relating to greenhouse gas emissions.
    In my view, however, they do not assist the court in determining the legal
    issue of whether the
Greenhouse Gas Pollution and Pricing Act
is
    constitutional. I therefore dismiss his motion for leave to intervene.

C.

Factums

[12]

My
    order of August 30, 2018 set out the length of intervener and reply factums.
    Having heard submissions from the parties on that issue, I would vary the order
    as follows:

·

The Attorney General of New Brunswick, Attorney General of
    British Columbia, and Attorney General of Saskatchewan may each file a factum not
    to exceed 25 pages;

·

The other interveners may each file a factum not to exceed 15
    pages; and

·

The Attorney General of Ontario may file a reply factum not to
    exceed 30 pages.

D.

Oral Argument

[13]

Pursuant
    to my order of August 30, 2018, the reference will be heard from April 15 to
    April 18, 2019. I have canvassed the parties and interveners submissions and
    order that the time be divided as follows:

·

Attorney General of Ontario: 4.5 hours (including reply);

·

Attorney General of Canada: 4 hours (including reply);

·

Attorney General of New Brunswick, Attorney General of British
    Columbia, and Attorney General of Saskatchewan: 30 minutes each; and

·

Other interveners: 10 minutes each.

[14]

The
    schedule for submissions will be as follows:

·

April 15, 2019: Submissions of the Attorney General of Ontario;

·

April 16, 2019: Submissions of the Attorney General of Canada;

·

April 17, 2019: Submissions of the intervening Attorneys General
    and other interveners; and

·

April 18, 2019: Reply submissions of the Attorney General of
    Canada and the Attorney General of Ontario.

E.

Records

[15]

The
    Attorney General of British Columbia, Athabasca Chipewyan First Nation, Canadas
    Ecofiscal Commission, Canadian Public Health Association, Intergenerational
    Climate Coalition, International Emissions Trading Association, and United
    Chiefs and Councils of Mnidoo Mnising further seek leave to file a record.
[1]
The Attorney General of Canada consents to these seven parties being granted
    leave to file a record, while the Attorney General of Ontario opposes. In the
    parallel reference in Saskatchewan, the Court of Appeal for Saskatchewan
    granted leave to the interveners seeking to supplement the record.

[16]

I
    have reviewed the proposed records of these seven interveners in this case and
    grant them leave to file their records. I am cognizant of the courts common
    practice to require interveners in an appeal to accept the existing record and
    not to seek to supplement it: see
R. v. Kokopenace
, 2011 ONCA 498 (in Chambers), at para. 4;
Jones v. Tsige
(2011), 106 O.R. (3d) 721 (C.A., in Chambers), at para. 26. In my view,
    however, the usual prohibition on supplementing the record in an appeal should
    be relaxed when this court is sitting as a court of first instance in a
    constitutional reference.

[17]

Constitutional
    challenges should not be determined in a factual vacuum:
MacKay v. Manitoba
,
    [1989] 2 S.C.R. 357, at p. 361;
Danson v. Ontario (Attorney General)
,
    [1990] 2 S.C.R. 1086, at p. 1099. In a constitutional reference, an intervener
    may be permitted to file material subject to reserve by the court as to its
    relevancy and weight:
Re: Anti-Inflation Act
, [1976] 2 S.C.R. 373, at
    p. 387; see also
Reference re Education Act of Ontario and Minority
    Language Education Rights
(1984), 47 O.R. (2d) 1 (C.A.), at p. 10. As
    Dickson J. observed in
Re Residential Tenancies Act
, [1981] 1 S.C.R.
    714, at p. 723:

A constitutional reference is not a barren exercise in
    statutory interpretation. What is involved is an attempt to determine and give
    effect to the broad objectives and purpose of the Constitution, viewed as a
    living tree, in the expressive words of Lord Sankey in
Edwards and Others
    v. Attorney-General for Canada and Others
. Material relevant to the issues
    before the court, and not inherently unreliable or offending against public
    policy should be admissible, subject to the proviso that such extrinsic
    materials are not available for the purpose of aiding in statutory construction.
    [Footnote and citations omitted.]

[18]

In
    this case, I am satisfied that the proposed records of these seven interveners
    may assist the court in determining the constitutional validity of the
Greenhouse
    Gas Pollution Pricing Act
and should therefore be admitted.

F.

Conclusion

[19]

For
    the reasons above, with the exception of the motion of Mr. Vezina, the motions
    to intervene and file records are granted.          J.C. MacPherson J.A.

[1]

Mr. Vezina also sought leave to file a record. Given my
    decision not to grant him intervener status, this motion is now moot.


COURT OF APPEAL FOR ONTARIO

CITATION: Sabongui v. Soon-Shiong, 2019 ONCA 64

DATE: 20190128

DOCKET: C65426

Rouleau, van Rensburg and Benotto JJ.A.

BETWEEN

Andre Sabongui and Maribeth Sabongui

Plaintiffs/ Defendants by Counterclaim
(
Respondents
)

and

Dr. Greg Soon-Shiong and
    Pinnacle Diagnostics Inc.

Defendants/Plaintiffs by Counterclaim
(
Appellants
)

Jeffrey Kaufman, Bradley Adams and Diana Blesko, for the
    appellants

Jamie Spotswood and Anna-Catherine Norwood, for the
    respondents

Heard: January 25, 2019

On appeal from the judgment and order of Justice Markus Koehnen
    of the Superior Court of Justice, dated March 29, 2018.

APPEAL BOOK ENDORSEMENT

[1]

The appellants argue that the trial judge erred in finding that they had
    been unjustly enriched by the transfer for no payment of two valuable licenses.
    They maintain that the parties had tried but were unable to reach a contractual
    agreement.

[2]

In their submission where, as in this case, there is a failed contract
    negotiation, a court cannot use unjust enrichment to, in effect, impose a
    contract on the parties. In that regard, the appellants rely on
Skibinski
    v. Community Living British Columbia
, 2012 BCCA 17.

[3]

We reject this submission. This is, in effect, the same submission that
    was made and rejected at trial. As explained by the trial judge, the
    circumstances in
Skibinski
were materially different than those of the
    present case.
Skibinski
did not involve obtaining a valuable asset
    without consideration and the court in that case found that there was no
    reasonable expectation of payment.

[4]

In the present case, the trial judge found as a fact, based on the
    record before him, that the appellants had no reasonable expectation that they
    were to receive the licenses for nothing.

[5]

The appellants further argue that the trial judge erred in reaching this
    conclusion. They submit that in making the finding that at the time of the
    transfer of the licenses, the appellants had no reasonable expectation of receiving
    the licenses for nothing, the trial judge improperly relied on post transfer
    evidence. We disagree. The trial judge was entitled to and in fact, required to
    consider all admissible evidence in making his findings.

[6]

The appellants further submit that the equitable remedy was not
    available because the respondents  having misrepresented facts to the Ministry
     did not come to the court with clean hands. Again, we disagree. The
    respondents conduct of which the trial judge was aware, did not relate to the
    benefit conferred on the appellants and did not bar the claim.

[7]

The appellants also challenge the damage award. They allege the trial
    judge erred in including $5,871 for which there were not receipts, in
    allocating only 17.6% of the expenses to the respondents and in awarding
    $25,000 for Mr. Sabonguis services. We disagree. The trial judges assessment
    of damages is entitled to deference.

[8]

In determining the amount for expenses, the trial judge relied on the
    evidence of Ms. Zidel, hired by the appellants who was tasked with reconciling
    the respondents expense claim. She was able to reconcile $55,913.01 of
    expenses before her departure and the trial judge accepted that a further
    $50,993.62 of expenses were supported by invoices. Although invoices for a
    small amount of expenses may have been missing, there was oral evidence
    supporting the expenses.

[9]

As for the allocation, the appellants argue that it is based on an
    incomplete calendar of diagnostic appointments prepared by Ms. Zidel. Because
    it was based on an incomplete calendar, the appellants argue that, that claim
    should have been dismissed. The appellants however acknowledged that the
    respondents were entitled to some reimbursement. The trial judge was entitled
    to do the best with the evidence he had to arrive at a reasonable allocation.

[10]

We
    would also not interfere with the award of $25,000 for Ms. Sabonguis services.
    The trial judge accepted that services were provided, that the award was in the
    circumstances modest compared to what was claimed.

[11]

For
    these reasons, the appeal is dismissed.

[12]

Costs
    to the respondents fixed at $20,786.59 inclusive of disbursements and
    applicable taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: Starkman Barristers v. Cardillo, 2019 ONCA 53

DATE: 20190125

DOCKET: C65635

Rouleau, van Rensburg and Zarnett JJ.A.

BETWEEN

Starkman Barristers

Applicant (Respondent)

and

John Cardillo
, Neil Proctor,
Medcap
Real Estate Holdings Inc.

and National Racquet Club
Inc.

Respondents (Appellants)

Scott Turton, for the appellants

Paul Starkman, for the respondent

Heard: January 8, 2019

On appeal from the order of Justice R. Cary Boswell of
the Superior Court of Justice, dated September 21, 2017.

APPEAL BOOK ENDORSEMENT

[1]

The appellants focussed their submissions on the admission and use of
business records at the assessment hearing. They argue first that the motion
judge erred in concluding that the dockets and accounts were business records
and were properly admitted at the assessment. They argue that the process for
preparing and authenticating these records was not proven.

[2]

We disagree. As we read the record of the assessment, the appellants
counsel conceded the admissibility of the business records. The only concern
was as to the use that could be made of the business records.

[3]

Given counsels concession and a fair reading of the record, we agree
with the motion judges conclusion that there was no dispute as to their
admissibility and, as a result, they were properly admitted as business
records.

[4]

The appellants further argue that, if the dockets were properly
admitted, the assessment officer erred in preventing appellants counsel from
cross-examining Mr. Starkman on the dockets of his clerk. They argue that this
curtailment extended to cross-examination on the work done by Mr. Starkman.

[5]

Again, we disagree. As we read the record, the assessment officer did not
curtail the cross-examination of Mr. Starkman on his work or on the work done
by the firm generally. The limits applied only to appellants counsel pursuing
a line of questioning seeking to cross-examine Mr. Starkman on what the clerk
entered in her dockets.

[6]

This did not prejudice the appellants. The appellants were allowed to
challenge Mr. Starkman on the work carried out by the firm. The assessment
officer in the result substantially discounted the time spent by the clerk. The
overall result was, as found by the motion judge, favourable to the appellants.
We also see no merit in the other grounds of appeal raised in the factum that
were not addressed in oral submissions.

[7]

The appeal is dismissed. Costs to the respondent fixed at $10,000
inclusive of disbursements and applicable taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: TD General Insurance Company v. Intact Insurance
    Company, 2019 ONCA 5

DATE: 20190109

DOCKET: C65282

Juriansz, Brown and
    Roberts JJ.A.

BETWEEN

TD General Insurance
    Company

Applicant (Appellant)

and

Intact Insurance Company

Respondent (Respondent)

Marc D. Isaacs and Arie Odinocki, for the appellant

Gary J. Marcuccio, for the respondent

Heard: December 5, 2018

On appeal from the judgment of Justice R. Dan Cornell of
    the Superior Court of Justice, dated March 29, 2018, with reasons reported at
    2018 ONSC 2352.

Juriansz J.A.:

[1]

The passenger of a boat, specifically a 17½ foot Aluma with a 135
    horsepower outboard motor, claims she was injured when the boat struck the
    shoreline. The passenger sued both the driver and the owner of the boat.

[2]

The driver was covered by two policies of insurance. The owner of the
    boat held a TD insurance policy that covered the driver, who was driving the
    boat with the owners permission. The driver was also covered by his own
    homeowners policy, issued by Intact.

[3]

The two policies have identical other insurance clauses that provide:

If you have other insurance which
    applies to a loss or claim, or would have applied if this policy did not exist,
    this policy will be considered excess insurance and we will not pay any loss or
    claim until the amount of such other insurance is used up.

[4]

TD brought an application seeking an order that both insurance companies
    were on an equal footing and had to share equally in the defence and indemnity
    of the driver stemming from the passengers claim.

[5]

The application judge dismissed the application. TD appeals. I would
    allow the appeal.

A.

Reasons of the Application Judge

(a)

Family Insurance Corp. v. Lombard Canada Ltd.

[6]

The application judge began his analysis by noting the governing
    authority was the Supreme Courts decision in
Family Insurance Corp. v.
    Lombard Canada Ltd.
, 2002 SCC
    48, [2002] 2 S.C.R. 695. He succinctly set out the facts and conclusion in that
    case.

[7]

He noted that in
Family
    Insurance
, the insured was
    covered under a homeowner policy issued by
Family Insurance

with a
maximum benefit of one million dollars. The insured also had
    coverage issued by
Lombard Canada
    Ltd.

under a commercial general liability
    policy for claims up to five million dollars. Both policies contained other
    insurance clauses that declared the policies to be excess insurance to any
    other insurance coverage. Each insurer relied on its other insurance clause
    to shield itself from primary liability. The Supreme Court concluded that because
    the two other insurance clauses were irreconcilable, the insurers were
    required to share their obligations.

[8]

The application judge also correctly noted in
Family Insurance

the Supreme Court held the
insurance policies themselves must be
    construed to determine the liability of each insurer, and the court should not
    refer to surrounding circumstances or look outside the policies.

(b)

The provisions of the policies

[9]

The application judge noted the TD Home Insurance Policy contained a
    Personal Liability Extension that insured liability arising from the specific
    boat involved in the accident. Section II  Liability of the TD Policys
    Declarations section states: Personal liability extension(s): WATERCRAFT
    LOC.01 OUTBOARD 101HP-150HP 1. The Policys Appendix contains a Schedule of
    Personal Property Watercraft Insurance that provides coverage for the following:

2008 ALUMA CRAFT 171/2 FT SERIAL
    #ACBJ9501A808 $17000 MOTOR IS OB MOTOR 2006 135 HP OPTIMAX MERCURY SERIAL
    #1B427575 $3000 TRAILER EASY HAULER SINGLE AXEL $1000

[10]

The
    application judge noted the TD Policy charged an additional premium of $516 for
    the Personal Liability Extension.

[11]

The
    driver of the boat was covered by the TD Policy because he was operating it
    with the owners consent. The TD Policy states that [y]ou or your refers
    to the Insured, which is defined by the TD Policy as including any person or
    organization legally liable for damages caused by a watercraft or animal owned
    by you, and to which this insurance applies.

[12]

The
    application judge then turned his attention to the Intact policy. He noted the
    Intact policy provides coverage for liability for unintentional bodily injury
    arising out of the policy holders personal actions anywhere in the world
    including claims arising out of [his] use or operation of any type of
    watercraft.

[13]

He
    goes on to observe that the Intact policy limited coverage for watercraft owned
    by the policyholder to watercraft  equipped with an outboard motor or motors
    of not more than 19kW (25H.P.). He also observed that in a similar fashion the
    TD Policy limited coverage to watercraft with an outboard motor of not more
    than 16 H.P. unless specifically mentioned in the Declarations Page.

[14]

The application judge reasoned that the
    Personal liability extension(s) demonstrated an intention on the part of TD
    to cover a different type of risk than that covered by the basic watercraft
    coverage in each policy. He found it was clear that TD intended to provide the
    primary insurance coverage for the watercraft. He added that Intact had
    conceded that it is an excess insurer to the claim that has been presented
    should such claim exceed the limits of the TD policy.

[15]

Since the TD Policy provided the primary
    insurance for the watercraft in question and Intact conceded it provided
    excess insurance, the application judge dismissed TDs application for an order
    that the two companies had
to share equally in the defence and indemnity
    of the driver
.

B.

Analysis

[16]

The application judge erred in law by
    applying the closeness to the risk approach characterizing the Minnesota
    approach, which the Supreme Court expressly rejected at paras. 22-28 of
Family
    Insurance
. In para. 22,
    Bastarache J. described the modern manifestation of the Minnesota approach to
    overlapping coverage as having
evolved into an analysis of the
    competing policies in an effort to determine each insurers intention to cover
    the particular loss. In assessing each of the insurers closeness to the
    risk, courts that employ the Minnesota approach look to the following
    non-exclusive factors:

(1) Which policy specifically described the accident-causing
    instrumentality?

(2) Which premium is reflective of the greater contemplated
    exposure?

(3) Does one policy contemplate
    the risk and use of the accident-causing instrumentality with greater
    specificity than the other policy  that is, is coverage of the risk primary in
    one policy and incidental to the other?

[17]

These
    are factors that the application judge employed in this case. In
Family
    Insurance
the Supreme Court rejected this approach to overlapping coverage.
    It adopted a different approach to overlapping coverage. Where there is overlapping
    coverage
the focus of the
    examination is to determine whether the insurers intended to limit their
    obligation to contribute, by what method, and in what circumstances
vis-à-vis
the insured; at para. 28. Where there are no limiting intentions or where
    those intentions cannot be reconciled, the insurers must share the burden
    equally under a coordinate obligation to make good the loss.

[18]

In my view, the analysis may be boiled
    down to two questions.

[19]

The first question is
    whether there is overlapping coverage. The answer in this case is yes.
The
    TD Policy covered the drivers liability, as the application judge found, by
    virtue of the Personal Liability Extension. The Intact policy covered the
    drivers liability from the accident in the 135H.P. Aluma watercraft because
    he, as the policy holder, did not own it. The clause limiting coverage to
    watercraft equipped with an outboard motor of not more than 25H.P. applied only
    to watercraft owned by the policy holder.

[20]

The second question is
    whether the insurers intended to limit their obligation to contribute, by what
    method, and in what circumstances vis-à-vis the insured. The focus in answering
    the second question is on the excess insurance clauses. The application judge
    found it significant that Intact would be an excess insurer should the claim
    exceed the limits of the TD Policy. However, as noted in para. 3 above, both
    policies had identical other insurance clauses. So in the same way, should the
    claim exceed the limits of the Intact policy, TD would be an excess insurer
    should. The limiting obligations in the two policies were irreconcilable.

[21]

The proper application
    of
Family Insurance
leads to the result that the two insurers must share the burden equally under a
    coordinate obligation to make good the loss.

[22]

The
    application judge found support for his conclusion in the decision of this
    court in
Lawyers Professional Indemnity Company v. Lloyds Underwriters
,
    2017 ONCA 858. The case is distinguishable on its facts. In
Lloyds
    Underwriters
, the LPIC policy expressly acknowledged that other policies,
    specifically arranged to apply as excess insurance to LPIC's policy, were to be
    treated as being excess policies. In these circumstances, the application judge
    correctly found the Lloyds policy was excess to the LPIC policy, a conclusion
    upheld on appeal. In the present case, both policies, by their terms, afforded
    primary coverage to the driver for the claim, and both policies provide that
    they are excess to other insurance that covers the loss. The conflict is
    irreconcilable.

[23]

The appeal is allowed. The application
    judges order is set aside and replaced with an order granting the relief
    requested in paras. (a)-(d) of TDs notice of appeal. TD is granted costs of
    the appeal fixed in the amount of $10,000.00 inclusive, and costs of the
    application fixed in the amount of $2,000.00 inclusive.

Released: RGJ Jan 9 2019

R.G. Juriansz J.A.

I agree. David Brown
    J.A.

I agree. Roberts
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: TFS RT Inc. v. Dyck, 2019 ONCA 25

DATE: 20190117

DOCKET: C65417

Rouleau, van Rensburg and Zarnett JJ.A.

BETWEEN

TFS RT Inc. and TFP International Inc.

Plaintiffs (Respondents)

and

Kenneth Dyck, Shaun Dyck and GPEC Holdings Ltd.

Defendants (Appellants)

Caleb Edwards, for the appellants

Mark S. Shapiro and Michael J. Brzezinski, for the
    respondents

Heard: January 7, 2019

On appeal from the judgment of Justice Kenneth G. Hood of
    the Superior Court of Justice, dated April 23, 2018, with reasons reported at
    2018 ONSC 2617.

REASONS FOR DECISION

[1]

The appellants appeal the summary judgment which was granted against
    them to enforce guarantees dated August 24, 2015 in favour of the respondents.
    The guarantees were of obligations of Green Patch Environmental Consulting Ltd.
    (the borrower). The individual appellants were at the relevant times the
    officers, directors, shareholders and directing minds of the borrower and of the
    corporate appellant, GPEC Holdings Ltd.

[2]

The borrower incurred obligations to the respondents under a Loan
    Agreement dated August 24, 2015. The Loan Agreement provided that advances under
    it would bear interest before maturity at the rate of 2.5% per 30 days, and
    after maturity at an additional rate of 0.416% per 30 days (5% per annum). It
    also provided that the respondents would deliver monthly loan statements to the
    borrower showing advances, interest accrual and payments, which would be deemed
    conclusive and binding unless disputed in writing by the borrower.

[3]

The borrower was provided with loan statements during the currency of
    the loan and after maturity. They showed that interest was calculated at 30% prior
    to maturity, which the motion judge interpreted to describe a per annum rate,
    and at 35% per annum after maturity. He found that the borrower never disputed
    the loan statements.

[4]

The borrower defaulted under the Loan Agreement. After demands by the
    respondents under the Loan Agreement and the guarantees, a Forbearance
    Agreement was entered into among the appellants, the borrower and the
    respondents on March 17, 2016. As later extended, it provided for a period of
    forbearance by the respondents until May 14, 2016. The Forbearance Agreement
    stated the amount then owing for principal and interest, which the motion judge
    found was clearly calculated at the rate of 30% per annum pre-maturity and 35%
    per annum afterwards. It also contained covenants by the borrower and the
    appellants that there were no defences to the amount owed, that the Loan
    Agreement and guarantees were binding, and that there were no defences
    thereunder.

[5]

The borrower did not make the payments the Forbearance Agreement
    required. The respondents commenced proceedings for the appointment of a
    receiver over the assets of the borrower.

[6]

The motion judge found that by June 1, 2016 counsel for the borrower,
    who were also counsel for the appellants, were aware of a potential argument
    that the interest payable by the borrower under the Loan Agreement should be
    reduced and limited by virtue of s. 4 of the
Interest Act
, R.S.C. 1985,
    c. I-15. That section provides:

Except as to mortgages on real property or
    hypothecs on immovables, whenever any interest is, by the terms of any written
    or printed contract, whether under seal or not, made payable at a rate or
    percentage per day, week, month, or at any rate or percentage for any period
    less than a year, no interest exceeding the rate or percentage of five per cent
    per annum shall be chargeable, payable or recoverable on any part of the
    principal money unless the contract contains an express statement of the yearly
    rate or percentage of interest to which the other rate or percentage is
    equivalent.

[7]

On June 6, 2016, in the pending receivership proceedings, Penny J. made
    an endorsement recording certain agreements between the borrower and the
    respondents, including the agreement of the borrower to:

[F]orego any further argument, defence, counterclaim, etc.
    regarding the quantum of the outstanding obligations owing to [the respondents],
    including any dispute as to the principal, accrued and accruing interest,
    default interest, legal fees and other professional fees.

[8]

Subsequently a receiver was appointed and realizations were made from
    the borrowers assets and distributed to the respondents under court order. The
    payments to the respondents were not reduced by virtue of the
Interest Act
.

[9]

The respondents commenced this action under the guarantees in July 2016,
    as the amounts realized from the borrowers assets were less than the full
    amount owed, as calculated under the Loan Agreement, the Forbearance Agreement
    and the orders in the receivership proceeding.

[10]

Before
    the motion judge, the appellants argued that as the Loan Agreement specified a pre-maturity
    rate of interest of 2.5% per 30 days, and lacked an express statement of its yearly
    equivalent, the claim against them could not include interest on the borrowers
    obligations at a rate of more than 5% per annum as provided for by s. 4 of the
Interest
    Act
. The appellants argued that this adjustment meant they owed nothing,
    as the respondents recoveries from the borrowers payments and the
    receivership realizations satisfied all obligations once interest was thus recalculated.

[11]

The
    motion judge rejected this argument. He held that he did not have to determine
    whether the Loan Agreement violated the
Interest Act
, because the
    combined effect of the Forbearance Agreement and the orders consented to or
    made in the receivership, including the June 6, 2016 agreement, foreclosed any
    such argument.

[12]

Before
    us, the appellants renew their argument of an
Interest Act
violation.
    They argue that the Forbearance Agreement could not have the effect the motion
    judge gave it as that would constitute an impermissible contracting out of the
Interest
    Act
s protections. And they argue they were not themselves parties to the June
    6, 2016 agreement, which they concede meant that the borrower gave up any
Interest
    Act
argument it might have had.

[13]

We
    would not give effect to the appellants submissions, for the following
    reasons:

a)

Similar to
    the motion judge we do not consider it necessary to determine whether the
Interest
    Act
was violated or whether, as the respondents argued, the Loan Agreement
    and the loan statements under it could together be taken as containing the
    required disclosure of a yearly equivalent rate in light of the sophistication
    of the parties and the comments of this court in
Solar Power Network Inc.
    v. ClearFlow Energy
, 2018 ONCA 727 at para. 53 about interpreting section
    4 of the

Interest Act
to accord with modern commercial
    reality.

b)

Whatever the
    restrictions that may exist on contracting out of
Interest Act
protections, the parties here did not dispute that potential
Interest Act
arguments can be consensually resolved and such a resolution would be binding.
    That is exactly what the agreement of June 6, 2016 was. The appellants
    expressly conceded before us that the borrowers obligations would not be
    reduced by the
Interest Act
,
because under the June 6, 2016 agreement the borrower agreed to forego and not
    raise any argument, defence or dispute regarding, among other things, accrued
    or accruing interest.

c)

There is
    no merit to the argument that only the borrower, and not the appellants, were affected
    by the June 6, 2016 agreement. The appellants were the borrowers directing
    minds and were represented by the same counsel. When they directed the borrower
    to make the June 6, 2016 agreement, they had knowledge of the potential
Interest
    Act
issue and must be taken to have consented to the waiver by the
    borrower of any defence or dispute based on it, thereby confirming the
    borrowers obligations which they had guaranteed. The appellants cannot
    maintain that what the borrower owes for interest is to be determined giving
    effect to the June 6, 2016 agreement, while what they owe as guarantors of
    those same obligations is to be determined a different way. The guarantees were
    of all obligations of the borrower in connection with the Loan Agreement, and the
    Forbearance Agreement and the June 6, 2016 agreement defined and settled the
    amount of those obligations. The guarantees expressly bound the appellants to any
    account settled or stated between the Lender and the Borrower or admitted by
    or on behalf of the Borrower.

[14]

The
    appeal is therefore dismissed with costs payable to the respondents in the
    amount of $14,000, inclusive of disbursements and applicable taxes, an amount
    agreed to between the parties.

Paul Rouleau J.A.

K. van Rensburg J.A.

B. Zarnett J.A.