COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Browne, 2021 ONCA 836

DATE: 20211124

DOCKET: C66627

Hourigan, Paciocco and Zarnett
    JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Steven Vanroy Browne

Appellant

Delmar Doucette and Anne Marie Morphew,
    for the appellant

Jessica Smith Joy, for the respondent

Heard: June 23, 2021 by video conference

On appeal from the conviction entered on
    March 24, 2017, by Justice Steven A. Coroza of the Superior Court of Justice,
    sitting with a jury.

Hourigan
    J.A.:

I.        Introduction

[1]

On November 1, 2012, Dwayne Thompson was shot
    dead in a parking lot of an apartment building in Mississauga. The jury found
    the appellant and a co-accused, Amal Greensword, guilty of
    manslaughter but acquitted another co-accused, Adrian Williams.

[2]

On appeal, the appellant seeks to substitute an
    acquittal for the conviction or, in the alternative, obtain an order for a new
    trial. His primary submission is that the jurys verdict was unreasonable.
    In addition, he argues that the trial judge erred in admitting evidence about
    him giving his phone numbers to his probation officer.

[3]

As I will explain, I am not persuaded by these
    arguments. The verdict is not unreasonable, as it was available to the jury on
    the evidence. Further, I reject the submission that the trial judge erred in
    law regarding the admission of the evidence about the phone numbers. The
    provision of those numbers was not compelled and did not violate s. 7 of the
Canadian
    Charter of Rights and Freedoms
. Consequently, I would dismiss the appeal.

II.       Background Facts

[4]

To put the issues raised in their proper
    context, I will first review the facts surrounding the shooting. Then I will
    consider the evidence adduced at trial relevant to the issues raised on this
    appeal. That evidence relates to various themes, including the use of mobile
    phones, car rentals, DNA evidence and the appellants appearance. I note that
    none of the defendants testified or called any evidence.

(a)

The Events Surrounding the Shooting

[5]

On the day of the shooting, Mr. Thompson
    communicated by phone with someone known as "Scarface," who arranged
    to buy a substantial amount of cocaine from Mr. Thompson. Later that day, Mr.
    Thompson travelled to an apartment building on Darcel Avenue, Mississauga, to
    meet Scarface. Accompanying Mr. Thompson were Shawn Edwards, who drove, and a
    friend of Mr. Thompson's, Margaret Warner.

[6]

Mr. Edwards remained in the vehicle at the
    Darcel Avenue property while Mr. Thompson and Ms. Warner walked down the
    driveway and through the parking lot to the apartment building. Ms. Warner testified
    that as they walked through the lot, she saw three or four males running to a
    white car.

[7]

The video surveillance recording from the
    building lobby confirmed three men entered the lobby at around 10:03 or 10:04
    p.m. and left it at around 10:12 p.m., moments before Mr. Thompson and Ms.
    Warner entered.  All parties agreed that the appellant was not one of these
    three men, and the jury was charged accordingly.

[8]

Mr. Thompson and Ms. Warner entered the building
    and looked in the back lobby for Scarface. When they did not locate him, Mr.
    Thompson called Scarfaces phone but got no answer. As they waited in the
    lobby, Ms. Warner noticed the white car travel back and forth in front of
    the lobby. When Scarface did not attend, Ms. Warner and Mr. Thompson decided to
    leave and return to the vehicle where Mr. Edwards was waiting.

[9]

Mr. Thompson and Ms. Warner left the back lobby
    at around 10:27 p.m. Ms. Warner testified that the white car, with its
    doors open, was parked south of the lobby. She further testified that a man
    stood by the front passenger-side door holding a handgun, a second man stood by
    the curb, and a third man stood by the front driver-side door. Ms. Warner did
    not see a fourth man in or near the car.

[10]

According to Ms. Warner, the man with the gun
    rushed toward Mr. Thompson and, with one hand on the grip and his second
    hand steadying the other, put the gun to Mr. Thompsons head. A second man came
    off the curb and began to pat Mr. Thompson down. A short argument ensued, and at
    one-point Mr. Thompson was heard to say, "no, brah, no, brah, I dont
    have anything on me.

[11]

A few seconds later, as Ms. Warner continued to
    move quickly toward the vehicle and was no longer looking back, she heard a
    shot, the thud of Mr. Thompson's body hitting the ground, and then
    additional shots. Mr. Edwards heard the shots and began to pull out from where
    he was parked. When Ms. Warner ran up to his vehicle, he let her in and they
    sped off.

[12]

Ms. Warner testified that all four car doors of
    the white car were open. However, she said that she saw only three men by the
    vehicle and that the men in the parking lot were the same three men she had
    seen earlier coming out of the lobby. At the time of observing the men,
    Ms. Warner was not wearing her glasses for distance. She described the three
    men as all in all-dark clothing, wearing hats or hoods and added the
    following:

·

The first man (the gunman who shot Mr. Thompson)
    was a light-skinned Black man, about 58-59 and about 180 pounds, with
    scruffy facial hair and dreads or braids poking out below his hood.

·

The second man (who rushed down off the curb and
    frisked Mr. Thompson) was described as a very black and ugly Black
    man, about 510-511, who appeared to be chunky and weighed about 200 pounds.
    She called him a fatty, but suggested that he might have been wearing
    puffy clothing.

·

The third person (who stood by the front driver-side
    door) was described as a Black man in dark clothing.

[13]

A resident of the apartment building, Neville
    Henry, testified that he was on his balcony and saw four people in the parking
    lot before he heard gun shots. Shortly after the gun shots, he observed the four
    people running. Two fled to a white Chrysler and two ran toward the building.
    He was unable to provide a description of the people he observed but testified
    that they moved like males. He described the two people who ran toward the
    building, indicating that both were between five to six feet and in dark
    clothing.

[14]

Mr. Thompson suffered four gunshot wounds, and
    his body was located approximately 160 feet from the area where Ms. Warner said
    they initially encountered the men. Using the numbering of the Crowns expert,
    Dr. Pollanen, (which did not necessarily reflect the order of the shots), the
    first shot was to the left side of the head and traversed the brain. This
    wound was fatal. The second shot entered the left lower jaw and lodged in the
    back of the neck. This wound was potentially fatal. The third shot entered
    the back and went through his spleen, a lung and the heart. This wound was
    fatal. The fourth shot entered the back and lodged in the spine. This wound was
    not in and of itself fatal.

[15]

If the wounds were received in quick succession,
    as described by Ms. Warner and the residents in the building who heard the
    shots, Mr. Thompson would have dropped quickly and been rapidly incapacitated. There
    was no evidence on the body as to the range of the shots.

(b)

Mobile Phones

[16]

On October 23, 2012, after his release from
    custody, the appellant told his probation officer his contact phone number was
    647-862-9200. On November 26, 2012, he provided a different number,
    647-537-2507, to his probation officer.

[17]

At trial, it was an admitted fact that on
    October 18, 2012, Mr. Greensword, one of the co-accused, told his
    probation officer that his phone number was 647-606-9424, which was the same
    number as the Scarface number contacted by Mr. Thompson.

[18]

On November 1, 2012, there were eight texts
    between Mr. Thompson's BlackBerry and "Scarface." The evidence also
    established that Mr. Greensword's Scarface phone, the phone of Mr. Williams, and
    the appellants 9200 phone were near the scene at the time of the
    shooting.

(c)

Car Rentals

[19]

The trial judge found that Mr. Greensword was in
    possession of a white Dodge Avenger on November 1, 2012. The car had been
    rented on October 31, 2012, by a Mr. Gilbert Johnson, who then let Mr.
    Greensword access the vehicle. The trial judge found that the white Dodge
    Avenger was the car that Ms. Warner identified as traveling back and forth in
    front of the lobby.

[20]

Mr. Johnson and Mr. Greensword returned the
    Avenger to the rental agency approximately one week after renting the vehicle.
    They replaced it with a white Chrysler 200. Mr. Greensword used this car until
    November 9, 2012, when the police impounded it.

(d)

DNA Evidence

[21]

Fingernail clippings were taken from Mr.
    Thompson during his autopsy and sent to the Centre of Forensic Science (CFS) for
    DNA testing. The clippings were received as sealed items, with clippings from
    each hand sealed in separate envelopes. One swab was used to collect material
    from the underside of the fingernail clippings from the left hand and another
    for the right. Both swabs were then submitted for DNA analysis.

[22]

Two DNA profiles, one major and one minor, were
    found on the clippings from Mr. Thompsons left hand. Mr. Thompson was the
    source of the major DNA profile. The appellant could not be excluded as the
    source of the minor DNA profile. Dr. Maja Popovic, a scientist who works at the
    CFS, noted that the random match probability that someone other than the
    appellant was the source of the minor DNA profile found on Mr. Thompsons
    fingernails was one in 1.6 trillion.

[23]

Dr. Popovich testified that direct transfer with
    bodily fluid is the most common way that a significant amount of foreign DNA
    would be transferred to a persons fingernails. It was Dr. Popovichs opinion
    that the amount of the appellants DNA deposit on Mr. Thompson's fingernails
    was beyond a trace amount. She testified that, while it is not uncommon to find
    foreign DNA under fingernails, it is rare to detect foreign DNA in sufficient
    amounts to generate a useable DNA profile suitable for comparison, and a
    secondary transfer would be rare in this scenario.

(e)

Appellants Appearance

[24]

Ms. Success Akonzee, the appellants former
    girlfriend, testified that when the appellant returned to the Toronto
    area around October 20, 2012, he had dreadlocks almost to his shoulders. Police
    surveillance suggested he had his hair cut sometime before November 26, 2012.
    Given the lack of evidence showing a temporal connection between the shooting
    and the haircut, the trial judge instructed the jury not to use the haircut as
    after-the-fact conduct.

(f)

Verdict

[25]

The appellant and his co-defendants, Mr. Greensword
    and Mr. Williams, were tried for first-degree murder in Mr. Thompsons death.
    The jury found the appellant and Mr. Greensword not guilty of first-degree
    murder but guilty of the lesser included offence of manslaughter. They found Mr.
    Williams not guilty of any offence.

(g)

Reasons for Sentence

[26]

In his reasons for sentence, the trial judge was
    obliged, according to
R.  v. Ferguson,
2008 SCC 6, [2008] 1 S.C.R.
    96, to find facts consistent with the jurys manslaughter verdict to the extent
    that it was necessary to enable him to sentence the appellant and Mr.
    Greensword. He concluded that, given the manslaughter verdict, the jury
    found that the appellant was present and was one of the three men whom Ms.
    Warner described approaching Mr. Thompson after their exit from the lobby, but
    that he was not the shooter.

[27]

The trial judge found that the appellant was the
    darker male who came off the curb and frisked Mr. Thompson. In making this
    finding, he recognized that Ms. Warners description of the man who came
    off the curb was inconsistent with the appellant's appearance. However, he took
    into account that Ms. Warner's observations were made while she and the men
    were in motion, the parking lot was dark, and Ms. Warner was not wearing her
    corrective lenses.

[28]

The appellant was found to have aided the man
    with the gun by accompanying him, approaching Mr. Thompson, and accosting and
    confronting the deceased. Further, the trial judge concluded that the appellant
    would have appreciated that bodily harm was the foreseeable consequence of the
    dangerous activity undertaken by the man holding the gun.

(h)

Grounds of Appeal

[29]

The appellant raises two grounds of appeal: (i)
    the verdict was unreasonable, and (ii) the evidence that the appellant gave the
    9200 number to his probation officer was inadmissible.

III.      Analysis

(a)     Unreasonable Verdict

(i)      Legal Principles

[30]

The law regarding an unreasonable verdict ground
    of appeal is well settled. A verdict is reasonable if it is one that a properly
    instructed jury acting judicially could reasonably have rendered. In applying
    this standard, the appellate court should engage in a limited weighing of the evidence
    in light of the standard of proof and consider the effect of the evidence.
    Where the Crowns case depends on circumstantial evidence, as in this case, the
    question becomes whether the trier of fact, acting judicially, could reasonably
    be satisfied that the accuseds guilt was the only reasonable conclusion
    available on the totality of the evidence:
R. v. Villaroman
, 2016 SCC
    33, [2016] 1 S.C.R. 1000, at para. 55.

[31]

In assessing an unreasonable verdict ground of
    appeal, the appellate court may consider an appellants failure to testify:
Corbett
    v. R.
, [1975] 2 S.C.R. 275, at pp. 280-81, and
R. v. Bains,
2015
    ONCA 677, 127 O.R. (3d) 545, at para. 164.

[32]

The existence of forensic evidence in an
    unreasonable verdict appeal is often important in establishing an accuseds
    connection with a crime. However, the reviewing court must first consider
    whether the whole of the evidence permits the inference that the forensic
    evidence was deposited in connection with the offence and not at some other
    time and place. Second, it must determine whether the appellants guilt is the
    only rational conclusion available on the totality of the evidence or lack of
    evidence:
R. v. Mars
(2006), 205 C.C.C. (3d) 376 (Ont.
    C.A.), at para. 19;
R. v. D.D.T.
, 2009 ONCA 918, at para. 15.

(ii)     Application of Legal Principles

[33]

The appellant asserts two arguments in support
    of his unreasonable verdict ground of appeal. First, he says that there is no
    evidence capable of supporting a finding beyond a reasonable doubt that he was
    at the scene and participated in the attack on Mr. Thompson. Second, he argues
    that the identification evidence was exculpatory.

[34]

I would not give effect to the submission that
    there was insufficient evidence placing the appellant at the scene of the
    shooting. In my view, there was substantial evidence supporting the jury's
    finding that he was there.

[35]

First, there was the DNA evidence, which suggested
    physical contact between the appellant and Mr. Thompson.  There is nothing to
    support the speculative arguments advanced by the appellant that it could have
    been deposited at some other time or place and then somehow transferred to Mr. Thompson.
    The suggestion that it might be the result of a secondary transfer is also contrary
    to the testimony of Dr. Popovic, who testified that the most common way to
    transfer significant amounts of DNA would be through direct transfer and that
    secondary transfer of such amounts would be rare.

[36]

In addition, there is no compelling evidence
    that suggests that the appellant and Mr. Thompson knew each other and that
    there were other, prior opportunities for direct transfer.  Certainly, the
    appellant did not testify that he had a prior association with Mr. Thompson.
    Furthermore, the mobile phone records adduced at trial do not show any contact
    from Mr. Thompson's phone to any phone associated with the appellant. Further, Ms.
    Akonzee testified that she had never seen the appellant with Mr. Thompson, nor
    did she know his name or nickname.

[37]

Consistent with the jurisprudence discussed
    above, the trial judge correctly instructed the jury regarding the DNA evidence
    that [t]he significance of this evidence will depend upon other evidenceheard
    in this trial. In my view, additional evidence supported the inference that
    the appellant's DNA was deposited during the homicide of Mr. Thompson. Further,
    that evidence is also responsive to the unreasonable verdict ground of appeal.

[38]

The mobile phone evidence supports a finding of
    guilt. The appellant advised his probation officer on October 23, 2012, that
    the 9200 number was his current phone number. Both the 9200 phone number and
    the phone number associated with Mr. Greensword were using the cell tower
    closest to the Darcel Avenue property in the lead-up to the shooting.

[39]

Further, between October 21, 2012, and November
    8, 2012, there were 448 communications between the 9200 number and Ms. Akonzee.
    The latter date was the day when the appellant activated a new phone. Finally,
    from October 26, 2012, to November 1, 2012, there were 98 contacts between the 9200
    number and Mr. Greenswords number.

[40]

I recognize that in the period between October
    29, 2012, at 8:07 p.m. and November 1 at 5:32 p.m., the appellant contacted Ms.
    Akonzee via a different phone number. However, communications resumed with Ms.
    Akonzee via the 9200 phone number on November 2, 2012, two hours after the
    shooting.

[41]

The next body of circumstantial evidence to
    support the inference that the DNA was deposited at the time of the shooting is
    the association evidence between the appellant and Mr. Greensword.

[42]

The evidence established that Mr. Greensword was
    exclusively using the white Avenger rental car at the time of the shooting.
    There is a video from a Petro Canada station in Toronto on the evening of
    November 2, 2012, which appears to show Mr. Greensword and the appellant arriving
    in the Avenger and then purchasing gas. At the time of the video, the 9200
    number was using a cell tower in the vicinity of the Petro Canada station.

[43]

On November 9, 2012, police conducted a routine
    traffic stop of the Chrysler 2000. Mr. Greensword was driving it. The person in
    the front passenger seat would not identify himself but was later identified as
    the appellant. A subsequent search of the vehicle disclosed, among other things,
    the appellants probation order, a receipt in the name of Ms. Akonzee, and a receipt
    from the Petro Canada station with a date and time that correspond with the
    date and time of the video surveillance. In addition, mobile phone records show
    that the appellants new phone was using a cell tower located within 100 meters
    of the traffic stop.

[44]

Finally, there is the post offence conduct. The
    Crown submitted that the appellant changed his phone on November 8, 2012, in an
    effort to distance himself from the shooting. The appellant provided the new
    number to his probation officer on November 26, 2012, and there were regular
    and ongoing communications between it and Ms. Akonzee.

[45]

The jury was instructed that they could consider
    this evidence if they found (i) that the appellant did change phone numbers
    after Mr. Thompson was killed and (ii) that this change in phone numbers was
    related to the offence charged. If these findings were made, the jury was
    entitled to consider this evidence to assist in determining whether the
    appellant participated in the shooting. The appellant does not challenge this
    instruction. Consequently, it was open to the jury to find that the change of
    phone number was related to his participation in the shooting and supportive of
    the inference that his DNA was deposited at that time.

[46]

Given this evidence, the appellants argument
    that there was an insufficient evidentiary basis to find that he was at the
    scene is unpersuasive. The next question is the reasonableness of the jury's
    findings regarding the role played by the appellant. I agree with the trial
    judge that based on the verdict of manslaughter, the jury could not reasonably
    have found the appellant was the shooter, given that the nature of the shots
    fired disclosed the requisite
mens rea
for murder.

[47]

The appellant argues that the theory of the
    Crown throughout the trial was that he was the shooter. Therefore, he submits
    that a verdict of manslaughter was unreasonable in the circumstances of the
    case. In support of this argument, the appellant makes much of the evidence of
    Ms. Warner regarding her descriptions of the assailants. He relies on
Chartier
    v. Quebec
(
Attorney General),
[1979] 2 S.C.R. 47, for the
    proposition that where there is a material inconsistency between an eyewitness
    description of a perpetrator and the known appearance of the accused at the
    time, there is no identification. According to the appellant, Ms. Warner gave
    uncontradicted exculpatory identification evidence, rendering the jury's
    verdict unreasonable. I would not give effect to this submission.

[48]

The rule in
Chartier
applies
    to cases in which there is a clear dissimilarity in the witness's
    identification coupled with a lack of supporting evidence:
R. v. Dimitrov
(2003), 68 O.R. (3d) 641 (C.A.), at para. 18. In the case at bar, as discussed,
    there was ample evidence tying the appellant to the shooting beyond the
    identification evidence, including the DNA and mobile phone evidence.

[49]

It is also important to remember that
Chartier
was not a jury case and is not authority for the proposition that in a jury
    trial, it is the trial judge's function to decide whether there are significant
    discrepancies in appearance.  These are factual questions that arise out
    of the evidence and, like other factual questions, are for the jury to decide:
R.
    v. Savoury
(2005), 200 C.C.C. (3d) 94 (Ont. C.A.), at para. 13. The evidence
    of Ms. Warner was not clear and reliable regarding her description of the
    assailants. She was not wearing her glasses at the time and saw the men only
    briefly. In any event, the jury was instructed that Ms. Warners descriptions
    and the appearance of the defendants could be used to raise a reasonable doubt.
    It was up to the jury to weigh this evidence along with the other evidence
    adduced at trial.

[50]

Ultimately, I am satisfied that the manslaughter
    verdict was reasonable. I note that the parties agreed that manslaughter was an
    available verdict. Further, the non-trace amount of the appellants DNA was
    consistent with him physically attacking Mr. Thompson. Ms. Warner did not
    purport to see all the events leading up to the shooting or the shooting
    itself. Given the limitations of Ms. Warners evidence and the existence of
    other evidence tying the appellant to the scene, a reasonable trier of fact
    could have been satisfied beyond a reasonable doubt that the appellant was present
    and one of the men who participated in the attack but have a reasonable doubt
    about whether he was the shooter. The jury was not obliged to accept the Crown
    theory that the appellant was the shooter and was not obliged to acquit when
    they did not accept this theory.

(b)     Admission of Phone Numbers

[51]

The appellant was in custody on unrelated
    charges until his release on October 20, 2012. He then became subject to the
    conditions of a probation order, including the condition that he report in
    person to his probation officer within two days of his release. At the time of
    his release, a probation officer explained to the appellant that he could be
    prosecuted for breaching his probation order.

[52]

When the appellant reported to his probation
    officer on October 23, 2012, the probation officer requested the appellant
    provide his address and phone number. Pursuant to this request, the appellant gave
    his 9200 phone number. On November 26, 2012, he provided a different number to
    his probation officer. Mr. Greensword also gave his mobile phone number to
    his probation officer. The police obtained the phone numbers from the probation
    officers and obtained production orders for the records associated with those
    numbers.

[53]

The appellant and Mr. Greensword brought an
    application seeking to exclude the evidence regarding the phone numbers on the
    grounds that: (i) the Crown had not proven that the phone numbers were provided
    voluntarily to the probation officers; (ii) the disclosure of the phone numbers
    by the probation officers to the police violated the s. 8
Charter
rights
    of the accused; and (iii) the statements to the probation officers were
    compelled statements, and the admission of this evidence infringed s. 7 of the
Charter
.

[54]

The appellants probation officer testified on
    the
voir dire
that the provision of a phone number was not required as
    part of the probation order, and failure to provide a phone number would not
    result in a breach of the probation order. Neither the appellant nor Mr.
    Greensword testified on the
voir dire
.

[55]

The trial judge first considered whether the
    phone numbers were voluntarily provided. Relying on
R. v. S.G.T.
, 2010
    SCC 20, [2010] 1 S.C.R. 688, he correctly observed that the appellant had an
    evidentiary burden to establish that the receiver of the statement was in a position
    of authority. The trial judge was not satisfied that when the appellant made
    the statements regarding his phone numbers that the probation officer was
    acting in concert with or for the police. He noted that when the 9200 number
    was given, the shooting had not yet taken place. When the second number was
    given, there was an existing investigation, but the trial judge found that the
    probation officers were not involved in the investigation, apprehension and
    prosecution of a criminal offence. Consequently, he ruled that the Crown was
    not required to establish the voluntariness of any statements made by the
    appellant to the probation officer relating to his phone numbers.

[56]

Regarding the alleged s. 8 breach, the trial
    judge ruled that the phone numbers do not reveal core biographical data that
    constitute intimate and private information about the accused. Furthermore, he noted
    that the appellant did not testify, and thus there was no evidence of his
    subjective belief that he had a reasonable expectation of privacy. The trial
    judge also concluded that neither the police officers nor the probation
    officers violated the
Ministry of Correctional Services Act
, R.S.O.
    1990, c. M. 22, in exchanging the information about the phone numbers. Accordingly,
    he found that there was no s. 8 breach.

[57]

Concerning the alleged s. 7 breach, the trial
    judge focused on the core issue of whether the appellant held an honest and
    reasonable belief that he was required by law to provide the phone numbers,
    noting that the appellant had the onus on the s. 7 application.

[58]

The trial judge found that the appellant had not
    met his onus, as there was no evidence that he had a subjective and reasonably
    held belief that he must provide a phone number and, objectively, there was no evidence
    that would suggest the statement was compelled. In support of this conclusion, the
    trial judge relied on the following:

·

First, since that the appellant did not testify,
    there was no direct evidence of his subjective belief.

·

Second, there was no requirement for a phone
    number on the probation orders, and there could be no charge of breach of
    probation for failing to provide the number. Thus, there is no evidence that
    the appellant believed that a failure to provide the phone number would have
    led to a breach charge.

·

Third, he was not satisfied that the direction
    provided to each accused, as part of their intake, to provide a phone number
    objectively meant that the accused were compelled to make the statements to the
    probation officer, because the intake interview and direction did not have the
    force of a probation order.

·

Fourth, he did not find that the probation
    officers created any psychological or emotional pressure on the appellant to
    make the statements. In that regard, he observed that probation officers
    simultaneously perform two distinct functions, rehabilitation and enforcement.

[59]

On appeal, the appellant submits that the trial
    judge erred in not finding that his provision of the phone numbers was a
    compelled statement taken in violation of s. 7. He submits that the trial judge
    failed to consider that two probation officers explained to him that he could
    be prosecuted for violating his probation order. Further, he argues that he was
    subjected to a high level of coercion to provide his phone number and that he
    was in an adversarial relationship with the probation officers.

[60]

These submissions are unpersuasive. The trial
    judge carefully considered these issues, and I concur with and adopt his
    analysis. As noted, the appellant did not testify, and thus there was no direct
    evidence that he felt coerced to provide his telephone number. Nor am I
    satisfied that coercion can be inferred in the circumstances. The intake form filled
    out by the appellant indeed included a section that asked for a "telephone
    number, where you can be reached." However, the probation officer
    testified that the order did not have a term that a phone number be provided.
    Further, she testified that she did not tell the appellant that the failure to
    provide a phone number would be considered a breach of the probation order.

[61]

The appellants reliance on
R. v. Charles
,
    2013 ONSC 6704, affd 2016 ONCA 892, is misplaced. Charles had provided the
    probation office with several phone numbers in a probation intake form. In a
    subsequent voice mail message, he also left a mobile phone number (the mobile
    phone number). The link between Charles and the mobile phone number was
    incriminating. At his trial, Charles sought the exclusion of evidence that he
    had provided the mobile phone number to the probation officer, claiming that he
    had done so under coercion. The trial judge disagreed and admitted the
    evidence. In explaining that decision, the trial judge contrasted Charles
    provision of his home phone numbers in the probation intake form, commenting
    that Charles had a reasonably held belief that the provision of his home phone
    number on the probation intake form was mandatory:
Charles
, at para.
    32. This
obiter
comment by the trial judge is of no assistance to the
    appellant. The cases are factually distinguishable. In
Charles
, the
    evidence of the probation officer was that the provision of a phone number was
    mandatory if a client was attending counselling: at para. 17. Moreover, the
    appellant, in that case, testified that he felt coerced.

[62]

Based on the foregoing, I would not give effect
    to this ground of appeal.

IV.     Disposition

[63]

I would dismiss the appeal.

Released: November 24, 2021 CWH

C.W.
    Hourigan J.A.

I
    agree. David M. Paciocco J.A.

I
    agree. B. Zarnett J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Thrive Capital Management Ltd. v.
    Noble 1324
Queen Inc., 2021 ONCA 846

DATE: 20211124

DOCKET: C69156

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

BETWEEN

Thrive
    Capital Management Ltd., Thrive Uplands Ltd.,
2699010 Ontario Inc. and 269901 Ontario Inc.

Plaintiffs (Respondent)

and

Noble 1324 Queen Inc., Michael
    Hyman Giuseppe Anastasio, David Bowen, Noble Developments Corporation,
    Hampshire and Associates Incorporated, Lisa Susan Anastasio, Rajeree Etwaroo
    and Con-Strada Construction Group Inc.

Defendants (Appellants)

Justin Necpal, Justin H. Nasseri and
    Joshua Ng, for the appellants

Brian N. Radnoff and Joshua Suttner,
    for the respondents

Heard: September 15, 2021 by video conference

On appeal from the judgment of Justice Markus Koehnen of the Superior
    Court of Justice, dated January 21, 2021.

COSTS
    ENDORSEMENT

[1]

The issues of costs awarded by the motion judge
    and the costs of the appeal remain. The motion judge awarded the plaintiffs
    costs of $36,011.97 for the costs of the hearing to determine whether the
    defendants were in contempt, $48,816.31 for the costs of the hearing to
    determine the sanction to be applied for contempt, and as he granted judgment
    to the plaintiffs, $109,142.80 for the costs of the action. The finding of
    contempt was not contested; however, the sanction  judgment in the action  was
    set aside and the matter was remitted to the Superior Court for determination
    of the sanctions to be imposed for contempt, or other issues that might be
    raised together with that issue.

[2]

Since the finding of contempt was not
    challenged, we see no basis to intervene in that award. Given the conduct of
    the defendants, and the difficulty in persuading them to disclose their assets,
    those costs in the sum of $36,011.97 should be paid from the $70,000 that the
    defendants were ordered to post as security for costs of the appeal and of the
    proceedings.

[3]

The defendants were successful in setting aside
    the sanction ordered because there were procedural flaws in the process
    followed to determine the appropriate sanction. Their contemptuous conduct,
    however, is the root cause of the proceedings that followed. Under those
    circumstances, we set aside the costs awards of $48,816.31 for the sanctions
    hearing, and the costs of the action in the sum of $109,142.80 and order no
    costs for those steps in the proceeding at this time. For the same reason, we
    would order no costs on the appeal.

[4]

As it seems likely that these proceedings will
    continue, and some form of sanction for contempt will be imposed against the
    defendants, the remaining funds held in court as security for the appeal and
    the proceedings below will continue to be held in court, to be applied to any
    future costs award in favor of the plaintiffs.

G.R. Strathy C.J.O.

S.E.
    Pepall J.A.

G.
    Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Blair v. Ford, 2021 ONCA 841

DATE: 20211125

DOCKET: C68965

Benotto, Miller and Sossin JJ.A.

BETWEEN

R.W. (Brad) Blair

Plaintiff (Appellant)

and

Premier Doug Ford

Defendant (Respondent)

Julian N. Falconer, Ryder Gilliland and
    Asha James, for the appellant

Gavin Tighe and Alex Melfi, for the
    respondent

Heard: October 29, 2021 by video conference

On appeal from the orders of Justice
    Edward Belobaba of the Superior Court of Justice, dated November 23, 2020,
    November 30, 2020 and December 15, 2020.

Benotto J.A.:

OVERVIEW

[1]

In November 2018, Premier Doug Ford (Ford) announced that an OPP
    Commissioner had been appointed. Interim Commissioner Brad Blair (Blair) was
    not chosen. The new Commissioner was a friend of the Ford family. Blair wrote a
    scathing letter on official police letterhead to the provincial Ombudsman alleging
    improprieties in the selection process and requesting an independent review. The
    letter was made public.

[2]

When reporters questioned Ford about the letter, Ford suggested that
    Blair had breached the
Police Services Act
R.S.O. 1990, c. P.15 (
PSA
)
. Blair sued Ford for defamation.
    Ford brought a motion under the provision of s.137.1 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43. Section
    137.1 was designed to address lawsuits against individuals who speak out about
    an issue of public interest. This type of motion is often referred to as an anti-SLAPP
    motion. SLAPP is the acronym for
Strategic Lawsuit Against
    Public Participation.

[3]

The action against Ford was dismissed. Blair now appeals. Ford
    cross-appeals the motion judges determination with respect to costs.

[4]

I would dismiss the appeal and allow the cross-appeal in part.

BACKGROUND

[5]

The background facts are not in dispute.

[6]

On September 5, 2018, the then OPP Commissioner
    announced his retirement effective November 2, 2018. The appellant Brad Blair
    became the Interim Commissioner. A job competition for the permanent position was
    publicly posted, seeking applications from police officers at a rank of Deputy
    Police Chief or higher or Assistant Commissioner or higher in a major police
    service. Within days, the job requirements were amended to remove the minimum
    rank requirement. On November 29, 2018, the province announced who the new OPP
    Commissioner would be. The new appointee was known to be a friend of Premier
    Ford. The appointee would not have qualified for the job but for the amendment
    to the qualifications.

[7]

On December 11, 2018, Blair sent a nine-page
    letter to the provincial Ombudsman and released a copy to the public. The
    letter was sent on OPP letterhead and alleged several improprieties in the
    appointment process of the OPP Commissioner as well as general misfeasance by
    Ford.

[8]

The Ministry of the Attorney General (MAG)
    briefed Ford. The Briefing Note concluded that aspects of Blairs letter could
    arguably constitute breaches of the
PSA

Code of Conduct
which prohibits police officers from communicating to the
    media without proper authority and from disclosing confidential information.
The Briefing Note was subject to several qualifications and
    unknowns, including whether Blair acted in good faith and whether he had proper
    authority to write the letter.

[9]

Ford received the Briefing Note and was made
    aware of the conclusion some time before December 18, 2018. Within a few days, a
    retired police officer (unrelated to this action) also filed a complaint with
    the Ontario Independent Police Review Director. The officer accused Blair of
    breaching the
PSA
on substantially the same grounds as those listed in the MAG
    Briefing Note.

[10]

On three occasions, reporters questioned Ford
    about the letter from Blair. Ford said the following:

·

December 18, 2018:

You know my friends this is gonna move
    forward. I could sit here and give you all the items that weren't accurate in
    that Letter and there's endless ones. I could give you a list of all thethe
    Police Act that was broken throughout that whole Letter, but none of you want
    to report on that.

So, what I'm gonna do, I'm taking the high
    road. I'm gonna take the high road and let the review go through.

·

January 14, 2019:

Well, I am not surprised that Global has asked
    me at an automotive show like this. But anyways run through the proper process
    and [the family friend] was the person they choose, and I was thoroughly
    disappointment (sic) with uh Brad Blair uh you know the way he has been going
    on. Breaking the Police Act numerous times is disturbing to say the least.

·

January 14, 2019:

It's unfortunate
    that one person has sour grapes, and it is very disappointing actually, and
    reacting the way he's been reacting and breaking the Police Act numerous times.
Someone needs to hold him accountable
I can assure
    you of that.

[11]

Blair was fired from the OPP in March 2019 for
    reasons unrelated to Fords statements. In a separate action, he is suing Ford
    for approximately $15 million.

[12]

Ultimately, a different person  not the
    family friend  was appointed as OPP Commissioner.

[13]

Blair sued for defamation on the basis of Fords
    three statements. Ford brought a motion to dismiss the action pursuant to s. 137.1.

[14]

There was extensive evidence filed on the motion
    with resulting cross-examinations and demands for production. Significant legal
    fees were incurred. Blair brought preliminary motions relating to Fords refusals
    to answer questions and requesting more time for further examinations.

[15]

The motion judge dismissed the preliminary
    motions on November 23 and 30, 2020. He heard the s. 137.1 motion on December 4,
    2020 and dismissed the action. The motion judge deviated from the presumptive
    award of full indemnity costs and awarded Ford partial indemnity costs based on
    the motion judges own calculations. He also ordered that half of the costs be
    paid immediately with the other half payable when Blairs separate action was
    settled or disposed of.

[16]

Blair appeals the preliminary motions and the
    main motion. Ford cross-appeals the order for costs on the main motion.

THE NATURE OF THE S.137.1 MOTION

[17]

Section 137.1 was meant to address SLAPP
    lawsuits. These lawsuits are described as follows in
1704604 Ontario Ltd. v.
Pointes Protection
Association
, 2020 SCC 22, 449 D.L.R. (4th) 1, at para. 2:

SLAPPs are generally
    initiated by plaintiffs who engage the court process and use litigation not as
    a direct tool to vindicate a
bona fide
claim, but as an indirect tool to limit the expression of others. In a
    SLAPP, the claim is merely a façade for the plaintiff, who is in fact
    manipulating the judicial system in order to limit the effectiveness of the
    opposing partys speech and deter that party, or other potential interested
    parties, from participating in public affairs.

[18]

Section 137.1 allows a defendant to move at an
    early stage to dismiss such a lawsuit. A motion under s. 137.1 to dismiss such
    a lawsuit involves a shifting burden and a framework that was set out in
Pointes
    Protection
, at para. 18:

In brief, s. 137.1
    places an initial burden on the moving party  the defendant in a lawsuit  to
    satisfy the judge that the proceeding arises from an expression relating to a
    matter of public interest. Once that showing is made, the burden shifts to the
    responding party  the plaintiff  to satisfy the motion judge that there are
    grounds to believe the proceeding has substantial merit and the moving party
has no valid defence
, and that the
public
    interest in permitting the proceeding to continue outweighs the public interest
    in protecting the expression
. If the responding
    party cannot satisfy the motion judge that it has met its burden, then the s. 137.1
    motion will be granted, and the underlying proceeding will be consequently
    dismissed. It is important to recognize that the final weighing exercise under
    s. 137.1(4)(b) is the fundamental crux of the analysis  legislative debates
    emphasized balancing and proportionality between the public interest in
    allowing meritorious lawsuits to proceed and the public interest in protecting
    expression on matters of public interest. Section 137.1(4)(b) is intended to
    optimize that balance. [Emphasis added.]

[19]

Often a SLAPP is used to protect speech and combat
    a power imbalance sometimes present in defamation cases, where the plaintiff has
    significant resources and the defendant is vulnerable.

DECISION OF THE
    MOTION JUDGE

[20]

The motion judge recognized that although the
    action did not possess the classic hallmarks of a SLAPP, the provisions of s.
    137.1 of the
Courts of Justice Act
applied because the expression
    involved public interest.

[21]

Following the provisions in the
Act
, he
    dismissed the defamation action because:

(i)

Ford had a valid
    defence to the action; and

(ii)

the public interest in
    protecting Fords expression outweighed the public interest in allowing the
    action to continue.

[22]

In considering valid defence, the motion judge
    concluded that Blair did not show that the defence of fair comment had no real
    prospect of success. He also found that the expressions by Ford were devoid of
    malice. When he weighed the public interests, the motion judge concluded that
    Blair did not suffer harm so serious that the public interest in permitting his
    defamation action outweighed the public interest in protecting Fords
    expression. He also concluded that there would be limited public interest in
    allowing the defamation action to continue when Blair was simultaneously
    pursuing a different action seeking recovery for essentially the same harm. On
    the other hand, there was significant public interest in hearing Fords
    comments about Blairs letter. The weighing of public interests favoured Ford.

[23]

Ford sought a full indemnity costs award of
    $578,194.86. The motion judge concluded the appropriate scale was partial
    indemnity. Fords partial indemnity costs were $357,250.48. The motion judge
    reduced these costs to $320,000, and then further reduced the costs to
    $130,000, with $65,000 to be payable immediately and $65,000 payable when the
    plaintiffs wrongful dismissal action settled or was finally adjudicated.

ISSUES

[24]

The following issues are raised by the appeals:

(i)

Does this court have
    jurisdiction to hear the appeal from the preliminary orders?

(ii)

Did the motion judge
    err in his consideration of s. 137.1?

(iii)

Did the motion judge
    err in his determination with respect to costs?

ANALYSIS

(1)

Does this court have jurisdiction to hear the
    appeal from the preliminary orders?

[25]

Before hearing oral submissions with respect to
    the appeal, the parties were cautioned by the Senior Legal Officer that this
    court may not have jurisdiction over the preliminary orders. The parties agreed
    to file written submissions with respect to jurisdiction. The court reviewed
    the written submissions and heard oral submissions on the matter. The parties
    were advised during the hearing that, for reasons to follow, this court lacks
    jurisdiction with respect to the preliminary orders.

[26]

The preliminary orders were with respect to
    refusals to answer questions and provide certain legal documents (November 23,
    2020) and with respect to further cross-examination (November 30, 2020). They
    are interlocutory orders. An appeal from an interlocutory order of a judge lies
    to the Divisional Court with leave pursuant to s. 19(1)(b) of the
Courts of
    Justice Act
. Leave must be sought within 15 days pursuant to r. 61.03(1)(b)
    of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194. Leave was not
    sought.

[27]

The appellant submits that the interlocutory
    orders are interrelated with the appeal and that leave would inevitably have
    been granted. He argues that this court should therefore assume jurisdiction.
    This argument was rejected for two reasons.

[28]

First, this proposal has been repeatedly
    rejected by this court. The court said the following in
Mader v. South Easthope Mutual Insurance
    Company
, 2014 ONCA 714, 123 O.R. (3d) 120, at para.
    55:

Only if leave is
    obtained from the Divisional Court can the appeal be combined with an appeal
    that lies to Court of Appeal in the same proceeding under s. 6(2) of the
Courts
    of Justice Act
:
Cole v. Hamilton (City)
(2002),2002 CanLII 49359
    (ON CA), 60 O.R. (3d) 284, [2002] O.J. No. 4688 (C.A.), at paras. 11, 15.

And said the following in
Brown v. Hanley,
2019 ONCA 395, at para. 19:

In general, where
    an order has both interlocutory and final portions, the appeal lies to this
    court only from the final portion of the order:
Cole v. Hamilton (City)
(2002), 2002 CanLII 49359 (ON CA), 60 O.R. (3d) 284 (C.A.), at para. 9. Leave
    to appeal from the interlocutory portion must be obtained from the Divisional
    Court, at which point a party may move to have the appeals heard together in
    this court:
Azzeh v. Legendre,
2017 ONCA 385, 135 O.R. (3d) 721, at
    para. 25;
Courts of Justice Act,
R.S.O. 1990, c. C.43, ss. 6 and 19(1)(b).

[29]

Second, the preliminary orders were dated
    November 23 and 30, 2020. The s. 137.1 motion was heard on December 4, 2020.
    Had the interim relief sought been integral to the main motion, the appellant
    could have  but did not  ask for an adjournment so that leave to the
    Divisional Court could be sought. It is not appropriate to await the outcome of
    the motion to then assert that the issue is intrinsically interrelated.

[30]

For these reasons, the appeals from the
    preliminary orders were quashed.

(2)

Did the motion judge err in his consideration of
    s. 137.1?

[31]

The parties agreed that the first threshold
    that the expression relates to a matter of public interest  was met. The
    burden then shifted to Blair to satisfy the motion judge that there are grounds
    to believe the proceeding has substantial merit and Ford has no valid defence,
    and that
the public interest in permitting the
    proceeding to continue outweighs the public interest in protecting the
    expression.

[32]

Blair submits that the motion judge erred by:

(i)

Ignoring the indicia of
    a SLAPP in his s. 137.1 analysis.

(ii)

Using the wrong test for no valid defence
and then misconstruing the defence of
    fair comment.

(iii)

Incorrectly finding
    that the public interest in permitting the proceeding to continue outweighs the
    public interest in protecting the expression.

[33]

I turn to these issues now.

(1)

Indicia of a SLAPP

[34]

The motion judge recognized that the action was not,
    strictly speaking, a SLAPP suit because Blair was not a large and powerful
    organization using litigation to intimidate and silence a vulnerable opponent.
    He determined that, nonetheless, because Fords expressions relate to public
    interest, s. 137.1 was engaged.

[35]

The appellant submits that the motion judges
    overall approach to s. 137.1 was flawed because, though the motion judge found
    that the appellants claim did not have the indicia of a SLAPP, he did not use
    this finding in his analysis of s. 137.1. In my view, the appellant is implicitly
    submitting that s. 137.1 did not apply at all. But he further says that even if
    it did apply, the fact that it did not possess all the indicia of a SLAPP
    should have been considered in the analysis by the motion judge.

[36]

I disagree with both propositions.

[37]

The fact that the usual indicia of a SLAPP were
    not present does not mean that s. 137.1 does not apply. In this regard the
    appellant is importing a requirement that does not exist in the statute or in the
    jurisprudence. The Supreme Court has clarified that s. 137.1 should be broadly
    construed to apply to proceedings that arise from expression. As the motion
    judge articulated, the legislature specifically avoided reference to the term SLAPP
    in the provision. In
Pointes
    Protection
,

at para. 24 the Supreme Court specified the following:

What is crucial is
    that many different types of proceedings can arise from an expression, and the
    legislative background of s. 137.1 indicates that a broad and liberal
    interpretation is warranted at the s. 137.1(3) stage of the framework. This
    means that proceedings arising from an expression are not limited to those
directly
concerned with expression, such as defamation suits. A good example of a type
    of proceeding that is not a defamation suit, but that nonetheless arises from
    an expression and falls within the ambit of s. 137.1(3), is the underlying
    proceeding here, which is a breach of contract claim premised on an expression
    made by the defendant
Indeed, the [Anti-SLAPP Advisory
    Panel: Report to the Attorney General] explicitly discouraged the use of the
    term SLAPP in the final legislation in order to avoid narrowly confining the
    s. 137.1 procedure  and the legislature obliged
. [Emphasis added.]

[38]

Nor do I accept the appellants submission that
    the indicia of a SLAPP should have been specifically addressed at each step in
    the judges analysis. This too has been clarified in
Pointes
Protection
, at paras. 78-79:

I note that in
Platnick
    v. Bent
, 2018 ONCA 687, 426 D.L.R. (4th) 60
, at para. 99, Doherty J.A.
    made reference to recognized indicia of a SLAPP suit (emphasis omitted). He
    recognized four indicia in particular: (1) a history of the plaintiff using
    litigation or the threat of litigation to silence critics; (2) a financial or
    power imbalance that strongly favours the plaintiff; (3) a punitive or
    retributory purpose animating the plaintiffs bringing of the claim; and (4)
    minimal or nominal damages suffered by the plaintiff (para.99). Doherty J.A.
    found that where these indicia are present, the weighing exercise favours
    granting the s. 137.1 motion and dismissing the underlying proceeding

I am of the view
    that these four indicia may bear on the analysis
only to the extent
that
    they are tethered to the text of the statute and the considerations explicitly
    contemplated by the legislature. This is because the s. 137.1(4)(b) stage
    is fundamentally a public interest weighing exercise and not simply an inquiry
    into the hallmarks of a SLAPP. Therefore, for this reason, the only factors
    that might be relevant in guiding that weighing exercise are those tethered to
    the text of s. 137.1(4)(b), which calls for a consideration of: the harm
    suffered or potentially suffered by the plaintiff, the corresponding public
    interest in allowing the underlying proceeding to continue, and the public
    interest in protecting the underlying expression. [Emphasis in original.]

[39]

Pointes Protection
requires the motion judge to scrutinize what is really going on in
    the case before them. The reasons of the motion judge read as a whole indicate
    that he did just that. The motion judges comment that the defamation action
    is not, strictly speaking a SLAPP because the plaintiff is not a large and
    powerful entity that is using litigation to intimidate a smaller and more
    vulnerable opponent confirm that he was alive to any perceived power imbalance
    that the appellant references.

[40]

I would not give effect to this ground of
    appeal.

(2)

Test for no valid defence and consideration of
    fair comment

[41]

Blair had the burden to show that the defence
    put forward by Ford had no real prospect of success: see
Pointes Protection
,
at paras. 50, 60. The motion judge described a real prospect of
    success as meaning a solid prospect of success and less than a likelihood
    of success but more than merely some chance of success or even a reasonable
    prospect of success.

[42]

The appellant submits that this is the wrong
    test. He says it raised the burden on him and that he should have only been
    required to prove that a reasonable trier of fact could reject the defences
    advanced by Ford. The appellant relied on
Bondfield Construction Company Limited v. The Globe
    and Mail Inc.,
2019 ONCA 166, 144 O.R. (3d) 291 to
    support this argument.

[43]

The test established by this court in
Bondfield
was refined in
Pointes
    Protection
. The perspective to apply is not that
    of a reasonable trier at a subsequent trial, but rather the subjective
    perspective of the motion judge.
Pointes Protection
clarifies the
    following at para. 41:

Importantly, the
    assessment under s. 137.1(4)(a) must be made from the motion judges
    perspective. With respect, I am of the view that the Court of Appeal for
    Ontario incorrectly removed the motion judges assessment of the evidence from
    the equation in favour of a theoretical assessment by a reasonable trier
    The clear wording of s. 137.1(4) requires the judge hearing the motion to
    determine if there exist grounds to believe. Making the application of the
    standard depend on a reasonable trier improperly excludes the express
    discretion and authority conferred on the motion judge by the text of the
    provision. The test is thus a subjective one, as it depends on the motion
    judges determination.

[44]

I do not agree that the motion judge used the
    wrong test or raised the bar for Blair with respect to valid defence. While the
    motion judge did not track the wording in
Pointes Protection,
his
    analysis makes it clear that he found that Blair did not demonstrate that
    Fords defence of fair comment had no real prospect of success.

[45]

There are five elements to the defence
    of fair comment:

(i)

the comment must be on
    a matter of public interest;

(ii)

the comment must be
    based on fact;

(iii)

the comment, although
    it can include inferences of fact, must be recognizable as comment;

(iv)

the comment must
    be one that any person could honestly make on the proved facts; and

(v)

the comment was not
    actuated by express malice.

[46]

The appellant submits that the motion judge
    erred because: (i) he relied on the compliant by made by another officer; (ii) the
    statements were not recognizable as comment; and (iii) the statements were
    demonstrative of malice.

[47]

The motion judge concluded that the comments
    were ones that any person could have made on the facts. He relied on the complaint
    made by a retired police officer based on the same conduct by Blair. The
    appellant submits that this was an error because this complaint post-dated the
    impugned comments by Ford. This objection by the appellant is of no moment in
    light of the motion judges findings based on Fords evidence that he had an
    honest belief in the truth of his statements.

[48]

Blair submits that a reasonable member of the
    public would infer that Blair had been tried and convicted of breaking the
PSA
.

[49]

The motion judge concluded that no reasonable
    journalist or member of the public would have taken the defendant's statements
    that the plaintiff broke the Police Act as meaning that the plaintiff had
    already been tried and convicted of breaking this law
.
This was his
    finding to make and it is entitled to deference.

[50]

In any event, Blairs submission in this regard
    is at odds with Fords statements that: I'm gonna take the high road and let
    the review go through (December 18) and Someone needs to hold him [Blair]
    accountable (January 18). Both these statements make clear that a formal legal
    process had not yet taken place.

[51]

With respect to malice, the appellant submits
    that Ford was reckless in relying on the MAG Briefing Note, which was
    qualified. Again, I do not agree.

[52]

The motion judge accepted Fords evidence that
    he reasonably relied on the MAG Briefing Note when he made the impugned public
    statements and that he honestly believed that Blair had breached the
PSA
.

[53]

It must also be remembered that the Briefing Note
    also said that Blairs letter clearly disclosed confidential information
    related to the OPP, including most notably the following:

(i)

details about the
    process by which Commissioner was selected;

(ii)

details about matters
    related to OPP security arrangements for the Premier; and

(iii)

that these disclosures
    could be construed as a breach of section 2(1)(e) of the
PSA Code of Conduct
if they were not made with proper authority.

[54]

Finally, the motion judge had the opportunity to
    view the videos of the three media events. He concluded that Ford spoke calmly,
    without emotion and without evidence of any retaliation or reprisal. These
    conclusions are entitled to deference.

[55]

I would not give effect to these grounds of
    appeal.

(3)

Weighing the two public interests

[56]

While the above conclusions were sufficient to
    dismiss the action, the motion judge proceeded with the last step of s.
    137.1(4)(b) when he balanced the public interests. I will do the same.

[57]

Blair was required to satisfy the court that the
    harm he suffered as a result of Fords expression is sufficiently serious that
    the public interest in permitting the action to continue outweighs the public
    interest in protecting that expression.

[58]

In
Pointes Protection
, at para. 68 the Supreme
    Court noted that before the weighing exercise begins, the plaintiff must show
    two things:

(i)

the existence of some harm; and

(ii)

that the harm was caused by the defendant's
    expression.

[59]

The appellant submits that the motion judge
    erred by finding no evidence of either harm or causation. He claims the motion
    judge ignored his affidavit evidence outlining the emotional harm and the
    damage to his reputation. The motion judge found only bald assertions of
    emotional or psychological harm, and found no evidence of any resulting
    financial or economic harm. There is no evidence that the plaintiff was
    disciplined by the OPP for breaching the
PSA
, that he was suspended
    from his duties because of these allegations, or that he lost any pay. The
    claim of a lost job opportunity because of the defendants
PSA
allegations
    is also without credible evidentiary support.

[60]

The motion judge concluded that, to the extent
    that there was harm, it is captured by the multi-million-dollar lawsuit that
    Blair initiated. A draft statement of claim was before the motion judge. The
    statement of claim has now been issued. Although the motion judge referred to
    it as a wrongful dismissal action, the issued claim includes damages for
    misfeasance in public office, negligence, negligent misrepresentation,
    intentional infliction of mental suffering,
Charter
breaches, and
    damages of approximately $15 million including special, punitive, and exemplary
    damages.

[61]

The motion judge said the following:

there is little
    to no public interest in permitting the defamation action to continue when the
    alleged loss or damage is the subject of another action that will shortly be
    proceeding in this court.

[62]

Balanced against the importance of freedom of
    expression, the matters raised are of considerable public interest that justify
    expression and debate in the public forum. The motion judges finding  that
    the harm suffered as a result of Fords expression is not sufficiently serious
    that the public interest in permitting the action to continue is outweighed by
    the public interest in protecting that expression  is a discretionary finding
    entitled to deference.

[63]

I would not give effect to this ground of
    appeal.

(3)

The cross-appeal: did the motion judge err in
    his determination with respect to costs?

[64]

Ford seeks leave to appeal the motion judges
    determination with respect to costs. He submits the following:

(i)

he was awarded significantly less than the presumptive
    award of full indemnification set out in s. 137.1(7); and

(ii)

the costs order which tethered half of his recovery to
    another action was in error.

[65]

Section 137.1(7) states the following:

If a
    judge dismisses a proceeding under this section, the moving party is entitled
    to costs on the motion and in the proceeding on a full indemnity basis, unless
    the judge determines that such an award is not appropriate in the
    circumstances.

[66]

Ford claimed full indemnity costs of
    $578,194.86.

[67]

In choosing to reject full indemnity costs, the
    motion judge said the following:

In my opinion, a full indemnity costs award is
    not appropriate on the facts herein because, as I made clear in my reasons for
    decision, the plaintiffs defamation action was not a SLAPP suit. I found as
    follows:

The plaintiff is not a large and powerful
    entity that is using litigation to intimidate a smaller and more vulnerable
    opponent and silence their public expression.

Mr. Blair is not a
    powerful entity that is suing the Premier to gag his public expression but a
    genuinely aggrieved individual trying to vindicate what he reasonably believes
    is a
bona fide
defamation claim. Nonetheless, because the impugned
    public statements made by the defendant relate to a matter of public interest,
    the s. 137.1 analysis is engaged.

[68]

Ford claimed partial indemnity costs of
    $357,250.48. The motion judge adjusted this and determined that his partial
    indemnity costs were $320,000. (He found Blairs partial indemnity costs to be
    $192,000).

[69]

The motion judge gave detailed reasons,
    including his repeated admonishments to counsel that much of the evidence being
    advanced related to the merits of the defamation action and allegations that
    were not necessary for the motion. The motion judge described it as an
    unnecessary deep dive into the evidence that greatly increased costs.
    Applying the considerations of r. 57.01 of the
Rules of Civil Procedure
,
    he concluded that the appropriate amount for Fords partial indemnity costs was
    $130,000.

[70]

I see no error in the motion judges determination
    which is entitled to a high degree of deference. I would not give effect to
    this aspect of the cross-appeal.

[71]

The order tethering the costs to another action
    is different. The motion judge gave no reasons for the order requiring half of
    the costs to be paid immediately and the other half to be paid when Blairs
    wrongful dismissal action is settled or finally adjudicated. This condition
    was added by the motion judge in the last substantive paragraph of his reasons.
    The parties had no opportunity to address this extraordinary order. Recall that
    the so called wrongful dismissal action had not even been commenced at the
    time of the reasons. I would grant the cross-appeal on this basis and amend the
    costs order to provide that the entire $130,000 award be payable in full as of
    the date of the order which is February 1, 2021.

CONCLUSION

[72]

For these reasons the appeals from the
    preliminary orders were quashed. I would dismiss the appeal with respect to
    dismissal of the action and would allow the cross-appeal in part. I would grant
    leave to appeal the costs, dismiss the appeal with respect to the quantum of
    costs, and allow the appeal with respect to the timing of the payment.

[73]

In accordance with the agreement between
    counsel, the respondent is entitled to his costs of the appeal fixed at $30,000
    inclusive of disbursement and taxes, and there will be no costs of the
    cross-appeal.

Released: November 25, 2021 MLB

M.L.
    Benotto J.A.

I
    agree B.W. Miller J.A.

I
    agree Sossin J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Mandel v. 1909975 Ontario Inc.,
    2021 ONCA 844

DATE: 20211125

DOCKET: C68675

Feldman, van Rensburg and Sossin
    JJ.A.

BETWEEN

Robert Mandel and Ellen Pike

Applicants

(Appellants)

and

1909975 Ontario Inc.,
    2458730 Ontario Inc., 2458721 Ontario Inc.,

HarrisonPike Inc., MatthewPike
    Inc. and Attorney General of

Canada

Respondents

(Respondents)

Peter H. Griffin, Matthew B. Lerner and
    Adam H. Kanji, for the appellants

Diana Aird and Michael Ding, for the respondent
    Attorney General of Canada

Mark A. Ross, for the respondents 1909975
    Ontario Inc., 2458730 Ontario Inc., 2458721 Ontario Inc., HarrisonPike Inc. and
    MatthewPike Inc.

Heard: May 19, 2021 by video conference

On appeal from the order of Justice Markus
    Koehnen of the Superior Court of Justice, dated September 8, 2020, with reasons
    reported at 2020 ONSC 5343.

Feldman J.A.:

[1]

The appellants restructured their family trusts
    in 2014 and 2015 to avoid a deemed disposition of the assets after 21 years and
    to maintain control of the underlying assets. As part of the restructuring
    arrangements, the appellants incorporated holding companies for their adult
    children (the Child Corporations) in which the appellants each subscribed for
    Class A voting shares and Class B convertible shares for a subscription price
    of $10 for the Class A shares and $100 for the Class B shares. The corporate
    documents stated that all the issued shares were fully paid. However, the
    appellants say that payment of $110 for the shares was never actually made.

[2]

In 2019, the Canada Revenue Agency (CRA) reassessed
    the appellants for the tax years 2014 and 2015, increasing each appellants
    taxable income by close to $15,000,000 on the basis that their receipt of shares
    in the Child Corporations constituted a taxable benefit under s. 15(1) of the
Income
    Tax Act
, R.S.C. 1985, c. 1 (5th Supp.).

[3]

The appellants brought an application in the
    Superior Court of Justice for a declaration that because the shares were not
    paid for before they were issued, as required by s. 23(3) of Ontarios
Business
    Corporations Act
, R.S.O. 1990, c. B.16 (
OBCA
), they were not
    validly or lawfully issued, and that the appellants were never shareholders of
    the Child Corporations. They also sought an order for rectification of the
    share registers of the Child Corporations under s. 250(1) of the
OBCA
.

[4]

The application judge declined to exercise
    jurisdiction over the application, deferring to the jurisdiction of the Tax Court
    of Canada. He also found that he would not have granted the declaration or
    ordered rectification had he assumed jurisdiction. The appellants appeal from
    that ruling to this court.

[5]

The application judges decision to decline
    jurisdiction to grant a declaration is a discretionary decision. I see no
    reviewable error in the application judges exercise of that discretion. For
    that reason, I would dismiss the appeal.

A.

Facts

[6]

The families of each of the appellants hold a
    25% interest in a successful manufacturing corporation through holding
    corporations. In the 1990s, the appellants transferred some of their interests
    in the holding corporations to family trusts, whose beneficiaries were the
    appellants respective children. In order to avoid a deemed disposition of the
    assets of the trusts at fair market value after 21 years, to defer the taxes
    that would become payable, and using a structure that would maintain control
    for the appellants, in 2014 and 2015 the family trusts reorganized their assets.

[7]

The application judge set out the details of the
    reorganizations in his reasons. For the purpose of these reasons, it is
    sufficient to summarize the structure that was employed for each Child
    Corporation: a Child Corporation was incorporated for each child of each of the
    appellants (three Mandel children and two Pike children); one of the appellants
    became the first director of each corporation; by-law no. 1 was passed for each
    corporation, providing, in accordance with s. 23(3) of the
OBCA
, that
    no share could be issued until it is fully paid for; the appellant subscribed
    for 1,000 Class A voting shares for a price of $10, signing corporate documents
    of the Child Corporation stating that the subscription price had been paid in
    full; the family trust then transferred Class D voting shares of the holding
    company that owned the shares of the manufacturing corporation to the child,
    who transferred those shares to the Child Corporation in exchange for 100
    non-voting common shares of the Child Corporation; after that, the appellant
    subscribed for 100,000 Class B convertible shares in the Child Corporation for
    the price of $100, again signing documents that said that the purchase price
    for the shares had been paid in full.

[8]

In the result, each Child Corporation held
    shares in the family holding company, the appellants held Class A and Class B
    shares in each of the Child Corporations, and each child held non-voting common
    shares in their respective Child Corporation. Through this mechanism, the
    appellants each had control of the Child Corporations, and, in the event of a breakdown
    in any childs marriage, by converting the Class B shares, the majority of the
    value of the Child Corporation would be protected.

[9]

Between 2014 and 2019, the appellants signed
    numerous documents relating to the Child Corporations in their capacities as
    sole directors and as shareholders, including shareholder agreements that
    described their shares as issued, outstanding, fully paid and non-assessable. The
    only contemporaneous evidence to the contrary was a Notice to Reader
    contained in the financial statements of the Child Corporations, prepared by
    Ernst & Young, which recorded a Sundry Receivable of $110 within each Child
    Corporation. However, those financial statements also indicated that the shares
    had been issued, and recorded shareholders equity of $110 in respect of the
    shares.

[10]

On June 5, 2019, the CRA advised each of the
    appellants that it proposed to reassess them for 2014 and 2015 and increase
    their respective taxable incomes on the basis that they had received a taxable
    benefit under s. 15(1) of the
Income Tax Act
by the issue of
    controlling shares in the Child Corporations for undervalue. Despite receiving
    submissions opposing the reassessment, the CRA proceeded with the reassessments
    on September 16, 2019, and Notices of Objection were filed on November 26,
    2019. The CRA did not respond to the appellants Notices of Objection within 90
    days. As a result, the appellants may appeal to the Tax Court, but at the time
    of the application, they had not yet done so.

[11]

In February 2020, after the application was
    commenced, transactions within each Child Corporation resulted in each child
    becoming the controlling shareholder and a director of their respective Child Corporations.

[12]

The appellants commenced this application on
    December 6, 2019 for a declaration that their shares in each Child Corporation
    were never validly issued because they did not pay for them, and for an order
    under s. 250(1) of the
OBCA
rectifying the share registers to reflect
    that the appellants never owned validly issued shares in the Child Corporations.
    In support of the applications, the appellants filed affidavits in which they
    explained that they never actually provided any consideration for the shares in
    each of the Child Corporations, and that those corporations never had bank accounts
    that would allow them to receive any monetary consideration. The appellants
    were not cross-examined on their affidavits.

B.

Findings by the Application Judge

[13]

The application judge accepted the submission of
    the CRA that the court should decline jurisdiction over the application because
    the matter should be determined by the Tax Court of Canada. Specifically, he
    found that:

The Tax Court is much better placed than is
    this court to determine whether, for tax purposes, the applicants should be
    considered to be controlling shareholders of the Child Corporations. The Tax
    Court has expertise in dealing with sophisticated corporate structuring and
    assessing the tax consequences of planning exercises of that nature. Given its
    specialized expertise, the Tax Court is also better placed to make findings of
    fact and draw inferences about whether the applicants paid for their shares,
    why they recorded the purchase price as a receivable (if the Sundry
    Receivable in fact relates to the shares) and whether any of these findings or
    inferences should have a bearing on the application of s. 23(3) to the tax
    assessment.

[14]

The application judge also noted that the raison
    dêtre for this application is the tax assessment, and referred to other cases
    where the Superior Court had declined jurisdiction in favour of the Tax Court:
Baxter
    v. Attorney General of Canada
, 2013 ONSC 3153, at paras. 8-29 and
GLP
    NT Corp. v. Canada (Attorney General)
(2003), 65 O.R. (3d) 840 (S.C.), at
    paras. 11-20. The application judge also referred to
Danso-Coffey v.
    Ontario
, 2010 ONCA 171, 99 O.R. (3d) 401, where this court found that the court
    below had erred by declaring that Ms. Danso-Coffey was not liable for retail
    sales tax rather than deferring jurisdiction on the tax liability issue to be
    determined under the
Retail Sales Tax Act
, R.S.O. 1990, c. R.31 scheme.

[15]

However, in that case, this court also upheld
    the decision of the court below to make a declaration that Ms. Danso-Coffey was
    not a director of the bankrupt corporation. The application judge distinguished
    that aspect of the case as well as
Orman v. Marnat Inc.
, 2012 ONSC 549,
    108 O.R. (3d) 81, both relied on by the appellants. In
Danso-Coffey
, the
    court granted a declaration in favour of the applicant that she was never a
    director of the corporation, because the facts were not disputed and the applicant
    had other potential reasons beyond retail sales tax for wanting to be absolved
    of the status of director, to which she never consented, and the range of
    personal liabilities that may arise by virtue of that status.
[1]

[16]

The application judge also distinguished the
    case of
Orman
, where the Superior Court granted a declaration that
    certain funds in an investment vehicle constituted a return of capital rather
    than income. In that case, the judge relied on the decision in
Juliar v.
    Canada (Attorney General)
(2000), 50 O.R. (3d) 728 (C.A.), leave to appeal
    refused, [2000] S.C.C.A. No. 621, where the court found that it should not
    decline relief because it might affect a tax assessment. However,
Juliar
has since been overruled by the Supreme Court of Canada in
Canada (Attorney
    General) v. Fairmont Hotels Inc.
, 2016 SCC 56, [2016] 2 S.C.R. 720.

[17]

Despite declining jurisdiction to determine the
    application, the application judge nevertheless addressed whether he would have
    granted the declaration requested by the appellants.

[18]

On the issue of the proper interpretation of s.
    23(3) of the
OBCA
, and whether its effect is that if the appellants
    did not pay for the shares then the shares were never effectively issued and
    the appellants were never shareholders of the Child Corporations, the
    application judge found that there was no definitive answer. Referring to
Dunham
    v. Apollo Tours Ltd.
(1978), 20 O.R. (2d) 3 (H.C.), he stated that the
    case demonstrates that the application of s. 23(3) is not absolutely black and
    white but depends on the context and purpose for which the section is being
    applied. In that case, the court allowed the shareholder, who had not paid for
    his shares, to pay the share price of $1 in order to obtain standing as a
    shareholder to bring an application to wind up the corporation.

[19]

The application judge gave three further reasons
    why he would not have granted the declaration. First, there was contradictory
    evidence in the record regarding whether or not the appellants had paid for the
    shares. Second, he noted that there was no dispute within the Child Corporations
    about the status of the shares, and third, there could be unknown consequences to
    a retroactive declaration of invalidity of the shares. Based on these three
    considerations, he concluded that there was no injustice in declining to grant the
    declaration.

[20]

Finally, the application judge refused to make
    an order under s. 250(1) of the
OBCA
rectifying the share register. This
    flowed from his determination that if he had exercised his discretion to assume
    jurisdiction, he would have declined the declaration. He also found that such
    an order would not reflect the intentions of the parties at the time of the
    transactions, and referred to the
Fairmont

Hotels
case for
    the principles that apply to equitable rectification.

[21]

The application judge emphasized that nothing in
    his analysis was intended to have any bearing on the Tax Courts adjudication
    of the tax assessment dispute and its interpretation or application of s. 23(3)
    of the
OBCA
.

C.

Issues

[22]

There are four issues raised on this appeal:

1.

Jurisdiction to hear the appeal: Is the appeal
    from the application judge properly brought to this court or to the Divisional
    Court?

2.

Jurisdiction of the application judge: Did the
    application judge err in law in declining jurisdiction over the application in
    favour of the Tax Court?

3.

Does a corporations failure to comply with s.
    23(3) of the
OBCA
by issuing shares without payment make the issuance
    of such shares invalid and void?

4.

Did the application judge err in declining to
    order rectification of the share register under s. 250(1) of the
OBCA
?

D.

Analysis

(1)

Issue 1: Is the appeal from the application
    judge properly brought to this court or to the Divisional Court?

[23]

In their application to the Superior Court, the
    appellants sought a declaration under s. 97 of the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43, that the shares of the Child Corporations were not
    validly issued under s. 23(3) of the
OBCA
because the subscription
    price was not paid, and an order for rectification of the share registers under
    s. 250(1) of the
OBCA
.

[24]

Section 255 of the
OBCA
provides that
    an appeal lies to the Divisional Court from any order made by the Superior
    Court under the
OBCA
. In this case, while the appellants sought relief
    under s. 250(1) of the
OBCA
, they were obliged to seek a declaration under
    s. 97 of the
Courts of Justice Act
in order to obtain the relief they
    sought as a result of the application of s. 23(3), because no order for relief for
    failure to comply with that section is mandated by the
OBCA
. An appeal
    from an order that grants or refuses a declaration of the Superior Court lies
    to the Court of Appeal. As a result, s. 6(2) of the
Courts of Justice Act
applies to this appeal:

The Court of Appeal has jurisdiction to hear
    and determine an appeal that lies to the Divisional Court or the Superior Court
    of Justice if an appeal in the same proceeding lies to and is taken to the
    Court of Appeal.

[25]

The court therefore accepts the submission of all
    parties that this court has the jurisdiction to hear this appeal.

(2)

Issue 2: Did the application judge err in law by
    declining jurisdiction over the application in favour of the Tax Court?

[26]

The appellants submit that the application judge
    erred in law by declining to assume jurisdiction to decide the issues as a
    matter of corporate law. They argued that the Superior Court is the only court
    with jurisdiction over the issues raised in the application. They submitted
    that a declaration that bound the corporate and family parties could not be
    made by the Tax Court. They also submitted that the application was not about whether
    for tax purposes the appellants should be considered the controlling
    shareholders of the corporations. Instead, the issue was whether shares in an
OBCA
-incorporated
    corporation were validly issued and if not, what the appropriate remedy should
    be. It was about correcting an error in the share register.

[27]

Sections 23(3) and 250(1) of the
OBCA
provide:

23(3) A share shall not be issued until the
    consideration for the share is fully paid in money or in property or past
    service that is not less in value than the fair equivalent of the money that
    the corporation would have received if the share had been issued for money.

250(1) Where the name of a person is alleged
    to be or have been wrongly entered or retained in, or wrongly deleted or
    wrongly omitted from, the registers or other records of a corporation, the
    corporation, a security holder of the corporation or any aggrieved person may
    apply to the court for an order that the registers or records be rectified.

[28]

The appellants position on jurisdiction is that
    only the Superior Court may grant an order for rectification pursuant to s. 250
    of the
OBCA
, and

it is the jurisdiction of the Superior Court
    to determine the proper interpretation of s. 23(3), as a matter of law. While
    the Tax Court has the jurisdiction of a superior court and therefore may interpret
    the
OBCA
provision when determining cases arising under the
Income
    Tax Act
, the appellants say that they are entitled to a declaration of the
    status of their shares on the basis of a correct interpretation of s. 23(3),
    and as a matter of corporate law, and to rectification of the share register in
    accordance with that interpretation.

[29]

The appellants position on interpretation is
    that where shares of a corporation are issued without the corporation first
    receiving payment, the issuance of the shares is invalid and void, and the
    share register must be corrected to remove the shareholders names.

[30]

The contrary position is that while shares that are
    not fully paid for are issued in contravention of s. 23(3), they are
    nevertheless validly issued. This is the result provided in the
OBCA
where
    shares are issued without full payment because the directors of the corporation
    have authorized a share issuance for consideration other than money, such as
    property or past services, and where they have overvalued that consideration.
    In that event, s. 130(1) of the
OBCA
provides that the directors are
    responsible to the corporation for the difference between the actual value of
    the non-monetary consideration paid and the monetary value assigned to the
    shares. The share issuance is not void. The shares remain validly issued and
    the directors are liable to the corporation to make up the shortfall.

[31]

The issue before this court is whether the
    application judge erred in the exercise of his discretion by declining to
    answer the question and, instead, deferring jurisdiction in favour of the Tax
    Court of Canada. On matters of judicial discretion, this court will defer to
    the application judge unless the judge misdirected himself, gave no or
    insufficient weight to relevant considerations, or came to a decision that was
    clearly wrong, amounting to an injustice:
Penner v. Niagara (Regional
    Police Services Board)
, 2013 SCC 19, [2013] 2 S.C.R. 125, at para. 27;
Ewert
    v. Canada
, 2018 SCC 30, [2018] 2 S.C.R. 165, at para. 83; and
Holmes
    v. Schoenfeld Inc.
, 2016 ONCA 148, 345 O.A.C. 162, at para. 14.

[32]

The application judge gave one reason for
    declining jurisdiction in favour of the Tax Court, and also added three reasons
    why declining a declaration would not cause injustice, which reinforced his
    discretionary decision to decline to exercise jurisdiction. He understood that
    no appeal of the assessments had yet been taken to the Tax Court because the
    appellants were first pursuing this application. However, it is expected that
    depending on the outcome of this application, an appeal may be filed with the
    Tax Court.

[33]

The main reason the application judge gave for
    deferring to the Tax Court is that the only dispute in this case is between the
    appellants and the CRA, and that dispute is within the expertise of the Tax
    Court. He noted that pursuant to the
Tax Court of Canada Act
, R.S.C.
    1985, c. T-2, the Tax Court is a superior court of record and has exclusive
    original jurisdiction to hear and determine appeals on matters arising under
    the
Income Tax Act
: ss. 3 and 12(1). As a superior court, it may
    interpret and apply provisions of the
OBCA
in the context of a tax
    dispute.

[34]

Related to the fact that the only dispute
    between any parties in this case is the appellants dispute with CRA, is the
    fact that the Child Corporations support the appellants in their request for
    relief. The application judge referred to this fact as the first reason that
    supported his conclusion that declining the declaration would not amount to an
    injustice. There is no dispute among the families or within the corporations
    about what should be done with the shares. In fact, as of February 2020, the
    families have reorganized the share structure such that each child was issued 2,000
    Class A voting shares, becoming the controlling shareholder and a director of
    their Child Corporation. The respective shareholders meetings at which each
    child was elected as director of their Child Corporation proceeded on the basis
    that each child was the sole voting shareholder.

[35]

Therefore, although the appellants argue that unlike
    the Superior Court, the Tax Court has no authority to make a binding order that
    would bind the Child Corporations, in fact the parties do not require such an
    order to correct mistakes and amend the register. Consequently, the application
    judge concluded that the effect of the relief sought by the appellants would
    primarily be to force the outcome of a tax dispute with the CRA before the
    taxpayers have pursued the remedies available under federal statute.
[2]

[36]

The second ground relied on by the application
    judge as demonstrating no injustice in declining the declaration request was
    the unclear factual record regarding whether the appellants paid for their
    shares and why the Child Corporations recorded the purchase price as a receivable
    in the financial statements. He concluded that the factual findings should be made
    within the tax context, where the court could determine what bearing the findings
    would have on the application of s. 23(3) to the tax assessment.

[37]

This application was brought under r. 14.05 of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194. Rule 14.05(3)(d)
    allows an application to be brought for the determination of rights that depend
    on the interpretation of a statute. That rule could apply to this proceeding;
    however, there are both statutory interpretation and factual issues to be
    determined. Rule 14.05(3)(h) allows proceeding by an application where it is
    unlikely that there will be any material facts in dispute requiring a trial. An
    application under r. 14.05(3)(h) gives the application judge limited
    jurisdiction to make factual findings where the judge is satisfied that a trial
    is not needed.

[38]

Whether or not the application judge could have
    made the findings based on the record before him, he was entitled to determine
    that it was not appropriate for him to do so on this application. That decision
    regarding procedure on an application for a declaration also supports the
    decision not to take jurisdiction, but to defer to the Tax Court which has the
    full jurisdiction to decide the legal and factual issues put before the court
    in the context of an income tax appeal.
The Tax Court
    has the expertise to resolve the uncertainty surrounding the appellants
    shareholdings to determine the tax consequences that flow from them, even if it
    does so by interpreting s. 23(3) only in the context of this specific tax
    dispute.

[39]

The third reason the application judge gave to
    support the justice of his decision to decline to grant a declaration was that if
    he were to accede to the appellants position that shares issued but not paid
    for are void
ab initio
, that finding could have unintended
    consequences regarding the status of transactions and other steps taken by the
    corporation and its directors before the shares were declared void.

[40]

This concern must be tempered by s. 17(3) of the
OBCA
, which provides:

17(3) Despite subsection (2) and subsection
    3(2), no act of a corporation including a transfer of property to or by the
    corporation is invalid by reason only that the act is contrary to its articles,
    by-laws, a unanimous shareholders agreement or this Act.

[41]

In light of this section, I do not share the
    application judges concern generally, although it is possible that there could
    be unforeseen consequences to a retroactive order, if a court were to accept
    the appellants position on nullity. However, because the Tax Court cannot order
    an amendment to the share register, but can only make a decision on the tax issue,
    it would not be making an order with retroactive effect on others. Again, that
    supports the decision to defer to the Tax Court.

[42]

In my view, the application judge made no error
    in considering the factors he did  most importantly, that the only dispute is
    between the appellants and the CRA  in exercising his discretion to decline
    jurisdiction in favour of the Tax Court.

[43]

The appellants position that they are not
    seeking a tax determination but solely a declaration interpreting a corporate
    law statute and an order for rectification, over which the Superior Court has
    exclusive jurisdiction, may be seen, in effect, as an assertion that in this
    case the application judge had no discretion to decline jurisdiction. In their
    factum, they refer to the Superior Court as having exclusive jurisdiction
    over the application. Put another way, their position is that they are entitled
    to have the Superior Court determine the meaning of s. 23(3) of the
OBCA
.

[44]

I would reject that proposition. The appellants
    are correct that the Superior Court has the exclusive jurisdiction to grant an
    order under s. 250(1). However, that order would only follow if the declaration
    were granted, and would not be necessary if the Tax Court accepted that, for
    tax purposes, the shares were never properly issued and never belonged to the
    appellants.

[45]

In circumstances where parties to an action have
    a dispute that requires the court to interpret the meaning and effect of a
    statutory provision, the court is not being asked to exercise a discretionary
    jurisdiction. It is required to answer the questions necessary to decide the
    dispute. However, where a party seeks a declaration of right, the court will
    only assume jurisdiction to decide the issue where the nature of the request
    meets criteria defined in the
Rules
or in a statutory provision. In
    such cases, the court has the discretion to decline jurisdiction. This is such
    a case.

[46]

I would test it this way: if there were no CRA
    assessment, and the family members brought an application for a declaration
    under r. 14(3) for a ruling by the court whether the effect of what occurred
    was that the issuance of the appellants shares was void, but the parties could
    point to no issue that would turn on the outcome, the court would likely
    decline jurisdiction for the reason that its ruling would not be necessary to
    determine the rights of the parties (r. 14(3)(d)). In this case, although the
    Child Corporations support the appellants, and seek clarification regarding the
    status of the appellants shares, they have corrected the situation for the
    future, and have pointed to no issue in the past that would turn on the outcome
    of the declaration. In such circumstances, the parties have not established that
    a discretionary declaration is warranted in these circumstances.

[47]

To conclude, in my view, the application judge
    was entitled to exercise his discretion to decline jurisdiction over the issue
    raised by the appellants regarding the interpretation of s. 23(3) of the
OBCA
in favour of the Tax Court, to be considered in the context of a tax appeal of
    the CRA assessments.

(3)

Issues 3 and 4: Determining the meaning and
    effect of s. 23(3) and rectifying the share register under s. 250(1)

[48]

In light of my conclusion that the application
    judge made no error by declining jurisdiction to determine these issues, it is
    neither necessary nor appropriate to address these issues on this appeal.

E.

Conclusion

[49]

I would dismiss the appeal. I would order costs to
    the respondent CRA in the agreed amount of $10,000, including HST and
    disbursements.

Released: November 25, 2021 K.F.

K. Feldman
    J.A.

I
    agree. K. van Rensburg J.A.

I
    agree. Sossin J.A.

[1]

In
Danso-Coffey
,
    the Ontario Minister of Revenue did not object to the court granting the
    declaration, unlike in this case. See footnote 2 below.

[2]
Counsel
    for the CRA confirmed that
an order for rectification would be binding
    on the CRAs tax assessment. In
Dale v. Canada
, [1997] 3 F.C. 235, the Federal Court
    of Appeal held that an order for rectification was binding on all the world, including
    the CRA, despite the fact that the CRA was not a party to the corporate
    dispute.