WARNING

THIS IS AN
    APPEAL UNDER THE
CHILD AND FAMILY SERVICES ACT

AND IS SUBJECT
    TO S. 45 OF THE ACT WHICH PROVIDES:

45.
    (7)
The court may make an order,

(a)     excluding
    a particular media representative from all or part of a hearing;

(b)     excluding
    all media representatives from all or a part of a hearing; or

(c)     prohibiting
    the publication of a report of the hearing or a specified part of the hearing,

where the court is of the opinion that the presence of the
    media representative or representatives or the publication of the report, as
    the case may be, would cause emotional harm to a child who is a witness at or a
    participant in the hearing or is the subject of the proceeding.

45.
    (8)
No person shall publish or make public
    information that has the effect of identifying a child who is a witness at or a
    participant in a hearing or the subject of a proceeding, or the childs parent
    or foster parent or a member of the childs family.

45.
    (9)
The court may make an order prohibiting
    the publication of information that has the effect of identifying a person
    charged with an offence under this Part.

COURT OF APPEAL FOR ONTARIO

CITATION:
K.S. v. Children's
    Aid Society of the Regional Municipality of Waterloo, 2013 ONCA 104

DATE: 20130219

DOCKET: C56096

Blair, MacFarland and Rouleau JJ.A.

BETWEEN

K.S.

Respondent/Appellant

and

The CAS of the Regional Municipality of Waterloo

Applicant/Respondent in Appeal

and

C.B

Respondent

and

Childrens Lawyer, Henry
    Shields

Respondent

K.S. in person

Catherine Bellinger, for the Childrens Lawyer

Danica Brown, for the CAS of the Regional Municipality
    of Waterloo

Heard and released orally: February 13, 2013

On appeal from the order of Justice C. Lafreniere of the Superior
    Court of Justice, dated August 31, 2012.

ENDORSEMENT

Background and History

[1]

This matter has a long history.  It is the third proceeding involving
    the appellants right of access to her children.  Each proceeding began in the
    Ontario Court of Justice and worked its way through the Superior Court of
    Justice to this Court.

[2]

In August, 2007, the children  then 6 and 8 years of age  were found
    to be in need of protection and placed in the care of their father subject to
    supervision by the respondent Childrens Aid Society, with no right of access
    to the appellant.  The rationale underpinning this decision was the appellants
    lack of recognition of the emotional harm her conduct inflicted on the children,
    who were 6 and 8 years old at the time, and her unwillingness to make changes
    to her conduct.  The issue of access by the mother was adjourned to trial.
    This decision was upheld in the Superior Court of Justice and in this Court
    (June, 2008).  This Court noted that the appellants access would be fully
    considered at an upcoming status review hearing.

[3]

The appellant has not seen her children since the August 2007 order.

[4]

Subsequently, after a 45-day status hearing review extending over many
    months and ending in July, 2010, Hardman J. of the Ontario Court of Justice
    ordered that the status quo be continued: the children would stay with their
    father, subject to CAS supervision, for a further 12 months and access to the
    appellant was prohibited.  The continuing prohibition was based on evidence
    that the children were not yet emotionally well enough to have contact with
    their mother and that the appellants ongoing mental health issues  which she
    continued to deny  and her ongoing conduct were impediments to access.  There
    had been no change, and Hardman J. gave clear and specific guidance to the
    appellant as to what she needed to do to overcome the no-access order, if
    possible.  The appellant was required to:

a)

attend an appointment
    with a physician to discuss mental health symptoms, at an Agency approved by
    the CAS, to follow all recommendations for further assessment and/or treatment,
    and to obtain a psychiatrist to meet with her regularly and deal with the
    issues identified in the parenting capacity assessment;

b)  attend and
    successfully complete individual and/or group counselling with regard to
    personal issues at an Agency approved by the CAS, and follow through with
    treatment recommendations offered by the service provider; and

c)  cooperate
    with the CAS

[5]

This order was appealed by Ms. S., but the decision was upheld both in
    the Superior Court of Justice and, again, in this Court (Dec. 12, 2011).  Leave
    to appeal to the Supreme Court of Canada was denied.

[6]

In the meantime, the CAS commenced another status hearing in May, 2011
    just short of a year following the order of Hardman J.  That status hearing led
    to the order now under appeal.  On Dec. 23, 2011, Lynch J. of the Ontario Court
    of Justice confirmed that the status quo would still be maintained: the children
    would continue with their father for a further 12 month with CAS supervision,
    without any access by the appellant.  Lynch J. concluded that there had been no
    change in the appellants condition and that she had not taken any steps as
    required by the order of Hardman J. to address her mental issues that underlie
    the access issue.

[7]

On August 31, 2012, Lafreniere J of the Superior Court of Justice,
    dismissed an appeal from that order. Ms. S. now appeals the decision of
    Lafreniere J. to this Court.

[8]

We are told that another status hearing is pending, with a date yet to
    be set.

Observations

[9]

We have no doubt that Ms. S. loves her children.  As noted, we are told
    that a new status hearing is presently pending where the issue of her rights to
    access will be reviewed again.  We hope that Ms. S. will cooperate with the CAS
    with a view to obtaining a psychiatric assessment that will assist the court at
    the new hearing in making a determination.

[10]

There
    is an assessment by Dr. Benoit that was before Hardman J. in an earlier status
    court proceeding and it sets out the mental condition that impedes Ms. S.s
    access claim.

[11]

Counsel
    advise that if Ms. S. presents this report to a hospital, approved by the CAS,
    she may be eligible for funding.  Presumably, if she cooperates with the CAS as
    required by the order of Hardman J., the CAS will be able to provide the
    necessary guidance to assist her in this regard.  These matters can be reviewed
    at the new hearing.

Disposition

[12]

That
    said, we see no error in the decision of Lafreniere J. or in the decision of
    Lynch J. which she upheld.  Ms. S. has some concerns about the factual findings
    that were made about the refusal by Lynch J. to grant an adjournment, and about
    other perceived procedural mistakes.  The findings were supported by the
    materials and affidavit evidence in the record however, and we see no basis for
    interfering with Lynch J.s discretionary decision to refuse the adjournment.
    Nor do we see any substance in the other procedural concerns.

[13]

The
    reality is that Ms. S. was required to comply with the terms of the order of
    Hardman J. set out above requiring her to address her mental health issues by
    cooperating with the CAS and by seeking the assistance of, and following the
    treatment recommendations of, a psychiatric agency approved by the CAS.

[14]

She has not taken sufficient steps to do so.

[15]

Accordingly,
    the appeal must be dismissed because Ms. S. has not done what she has to do in
    order to obtain a decision that would set aside the order prohibiting her from
    having access to her children.

[16]

Ms.
    S. contests the costs award of $2500 made against her by Lafreniere J. Costs
    are a discretionary matter and we see no basis for interfering with that order.
     While leave to appeal costs is granted, the appeal is dismissed.

R.A.
    Blair J.A.

J.
    MacFarland J.A.

Paul
    Rouleau J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Kang v. Sun
    Life Assurance Company of Canada, 2013 ONCA 118

DATE: 20130225

DOCKET: C54700

Laskin, Rosenberg and Goudge JJ.A.

BETWEEN

Joseph (Jung Yub) Kang

Plaintiff (Appellant)

and

Sun Life Assurance Company of Canada

Defendant (Respondent)

Won J. Kim, Victoria A. Paris and Norman Mizobuchi, for
    the appellant

F. Paul Morrison, Glynnis P. Burt and Heather L.
    Meredith, for the respondent

Heard: April 12, 2012

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated October 27, 2011, with reasons reported at
    2011 ONSC 6335.

Laskin
    J.A.:

A.

introduction

[1]

The five plaintiffs, representatives in a proposed class proceeding,
    appeal the decision of Perell J. on a pleadings motion.  He struck out numerous
    paragraphs of the plaintiffs fresh as amended statement of claim.  The
    paragraphs that he struck out fall into two categories.  In the first category
    are paragraphs that improperly pleaded evidence or argument, or were
    irrelevant.  In the second category are paragraphs that were struck because
    they did not disclose a reasonable cause of action under r. 21.01(1)(b) of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194.

[2]

The plaintiffs have not appealed the
    striking out of the paragraphs in the first category.  They have appealed the
    striking out of the paragraphs in the second category.  They submit that the
    motion judge erred in striking out four of their claims: the claim for breach
    of duty of good faith and fair dealing, the claim for breach of contract, the
    claim for deceit and fraud, and the claim of those class members who signed
    releases.

B.

background

[3]

In his thorough reasons, the motion judge set out in detail the
    background to this dispute and the allegations in the pleadings that Sun Life
    challenged.  Only a brief summary is necessary to decide this appeal.

(1)

The parties and the policies

[4]

The proposed class proceeding concerns the sale and administration of
    universal life insurance policies.  It has not yet been certified.

[5]

The policies in question were sold to class members by Metropolitan Life
    Insurance Co. (MetLife) during the period between 1983 and 1998.  Universal
    life insurance policies were introduced in the 1980s as an alternative to whole
    life policies.  They have a cash accumulation component in addition to life
    insurance.  They are attractive to consumers because of their tax-exempt status
     funds accumulate in the investment fund tax-free.

[6]

MetLife sold four types of universal life insurance policies.  Each of
    the five plaintiffs purchased one of these four types of policies.  The four
    types were as follows:

·

The Universal Flexiplus policy (purchased by the plaintiffs Eldon
    Fehr and Leslie Lucas)

·

The Interest Plus policy (purchased by the plaintiff Angela Watters)

·

The Universal Plus policy (purchased by the plaintiff Gaetan Laurier)

·

The Universal OptiMet policy (purchased by the plaintiff Joseph Kang)

[7]

In 1998, MetLife sold substantially all of its Canadian life insurance
    business to Mutual Life Assurance Company of Canada.  In 2002, Mutual was taken
    over by the respondent, Sun Life Assurance Company of Canada.  As a result of
    these transactions, Sun Life became responsible for administering the universal
    life insurance policies sold by MetLife.

[8]

The plaintiffs claim that there are approximately 150,000 class members
    who bought these universal life insurance policies.  They seek $2 billion in
    general damages, $500 million in punitive damages, as well as various other
    forms of relief.

(2)

The claims

[9]

In their fresh as amended statement of claim, the plaintiffs advance
    five causes of action against Sun Life, both directly and in its capacity as a
    successor corporation of MetLife.  The causes of action, the decision of the
    motion judge on each claim, and those parts of his decision being appealed are
    as follows.

(a)

Misrepresentation

[10]

The
    plaintiffs allege that MetLife agents made misrepresentations when they sold
    the policies.  These misrepresentations, the plaintiffs say, were made
    negligently, recklessly, and in breach of s. 439 of the
Insurance Act
, R.S.O. 1990, c. I-8.
[1]
Sun Life did not challenge this claim apart from a narrow objection on
    damages.  The motion judge struck the offending paragraph but with leave to
    amend.  His order on this claim is not in issue on the appeal.

(b)

Breach of duty
    of good faith and fair dealing

[11]

The
    plaintiffs allege that MetLife breached its duty of good faith and fair dealing
    in the sale of the policies, and that Sun Life
[2]
breached its duty of good faith and fair dealing in the administration of the
    policies.

[12]

The
    motion judge struck out these claims.  He struck out the claim against MetLife
    for breach of duty in the sale of the policies because he found it did no more
    than repeat the plaintiffs claims for negligent and fraudulent
    misrepresentation.  He struck out the claim against Sun Life for breach of duty
    in the administration of the policies on the ground that it cannot be a breach
    of good faith and fair dealing to administer insurance policies in accordance
    with their terms.

[13]

The
    plaintiffs appeal this order.  They argue that the duty of good faith and fair
    dealing arises apart from and in addition to the insurance contract; therefore,
    an insurer may still breach its duty of good faith and fair dealing though it
    complied with the strict terms of the contract.  At the very least, the
    plaintiffs maintain that the claim should not have been struck on a Rule 21
    motion simply because it was novel or unusual.

(c)

Breach of
    contract

[14]

The
    plaintiffs allege that the Universal Plus policies contained an express or
    implied contractual term that they would not be required to pay more than a guaranteed
    Maximum Premium.  They say that Sun Life breached this term of the contract
    by charging some policyholders premiums in excess of the maximum.

[15]

The
    motion judge struck out this claim on the ground that the plaintiffs
    allegation was not tenable under the wording of the Universal Plus contract.  The
    plaintiffs appeal this order.

(d)

Breach of
    fiduciary duty

[16]

The
    plaintiffs allege that Sun Life breached its fiduciary duty in the
    administration of the policies.  The motion judge struck out this claim.  The
    plaintiffs have not appealed this order.

(e)

Deceit and fraud

[17]

The
    plaintiffs allege that MetLife committed deceit and fraud in the sale of the
    policies and that Sun Life committed deceit and fraud in the administration of
    the policies.

[18]

The
    motion judge struck out these claims.  He held that the allegation of deceit
    and fraud in the sale of the policies was an imperfect repetition of the
    already pleaded claims of negligent or fraudulent misrepresentation.  And he
    held that the allegation of deceit and fraud in the administration of the
    policies was nothing more than an allegation that Sun Life committed deceit and
    fraud by denying that MetLife had done so.

[19]

The
    plaintiffs appear to accept that the claim for deceit and fraud in the sale of
    the policies is redundant in the light of the claim for negligent and
    fraudulent misrepresentation; however, they say their intent in pleading as
    they did was to advance a separate claim for deceit and fraud regarding
the
    administration
of the policies (emphasis added).  They appeal the motion
    judges order striking out that claim.

(3)

The Releases

[20]

In
    addition to these claims, the plaintiffs also allege that Sun Life obtained
    releases from some class members without disclosing to them that their policies
    had been sold on the basis of misrepresentations.

[21]

The
    motion judge struck out these allegations pertaining to the releases on the
    ground that they improperly pleaded evidence.  He said that none of the representative
    plaintiffs claimed to have signed a release, or claimed rescission, or alleged
    that the releases were void.  He declined to grant leave to amend.  However, he
    did provide the plaintiffs with an option to advance their claim on the
    releases with an appropriate representative plaintiff.

[22]

The
    plaintiffs appeal the order striking out the paragraphs of their pleading
    relating to the releases.  They say it is not plain and obvious that the claim
    as pleaded will not succeed.

(4)

Result of the motion judges decision

[23]

From
    this brief summary, it is evident that the motion judge viewed the plaintiffs
    claim as a claim based on negligent or fraudulent misrepresentation in the sale
    of the policies, for which Sun Life is responsible.  The other claims advanced
    by the plaintiffs either replicate the misrepresentation claim or are not
    tenable in law.  Sun Life supports the motion judges view of the pleading.

[24]

The
    plaintiffs accept that their principal claim is for misrepresentation.
    However, they contend that the motion judge took too narrow a view of their
    pleading by rejecting on a Rule 21 motion their additional or alternative
    claims.  They say that these additional claims are not doomed to fail and that
    the motion judge should have let them go forward.

C.

discussion

(1)

General principles

[25]

Under
    s. 5(1) of the
Class Proceedings Act, 1992
, S.O. 1992, c. 6, to have a
    class action certified, a plaintiff must satisfy five criteria.  The first
    criterion  in s. 5(1)(a)  is that the pleading must disclose a cause of
    action.  The motion judges decision in this case sought to resolve the s.
    5(1)(a) criterion before the certification motion itself.  In
Pennyfeather
    v. Timminco Ltd.
, 2011 ONSC 4257, 107 O.R. (3d) 201, at paras. 85-90, he
    discussed the advantages of doing so.  I take no issue with his approach.

[26]

As
    the motion judge recognized, the test under s. 5(1)(a) of the
Class
    Proceedings Act
is the same as the test under r. 21.01(1)(b) of the
Rules
    of Civil Procedure
:
Cloud v. Canada (Attorney General)
(2005), 73
    O.R. (3d) 401, at para. 41.  In
Attis v. Canada (Minister of Health)
,
    2008 ONCA 660, 93 O.R. (3d) 35, at para. 23, leave to appeal to S.C.C. refused,
    [2008] S.C.C.A. No. 491, my colleague Lang J.A. succinctly set out the test
    that governs a r. 21.01(1)(b) motion:

[T]he respondent was required to demonstrate that it was plain
    and obvious that the action cannot possibly succeed.  Under this test,
    the motion judge was required to accept the factual pleadings as proven and to
    read the claim generously.  In addition, the test requires that a claim
    not be dismissed simply because it asserts a novel cause of action. [Citation
    omitted.]

[27]

Thus
    the moving party, here Sun Life, had to show that it was plain and obvious the
    plaintiffs claims could not possibly succeed.  And, as Lang J.A. noted, on an
    appeal of a motion judges order striking out a claim under r. 21.01(1)(b), the
    standard of review is correctness:
Attis v. Canada

(Minister of
    Health)
, at para. 23.

(2)

The issues

(a)

Breach of duty of good faith and fair dealing

[28]

In
    para. 101 of their pleading, the plaintiffs allege that Sun Life (and its
    predecessors) breached its duty of good faith and fair dealing in the
    administration of the policies.  According to the plaintiffs, Sun Life breached
    its duty by:

·

Failing to fully investigate and disclose to class members the
    misrepresentations made by MetLife during the sale of the policies;

·

Denying misrepresentations had occurred and failing to provide
    remedies to the class members for the misrepresentations;

·

Settling the claims of certain policyholders and obtaining
    releases without acknowledging the misrepresentations;

·

Systematically denying legitimate class member claims; and

·

Failing to administer the policies in accordance with the
    representations made during the sale of the policies.

[29]

The
    motion judge read the plaintiffs pleading to say that it is a breach of good
    faith and fair dealing to enforce or administer the insurance policies as they
    were written rather than as they were represented to be.  He concluded, at
    paras. 146-147, that this was not a tenable allegation:

In my opinion, while it may be a negligent or fraudulent
    misrepresentation to enforce and administer policies differently than from how
    they were represented to be, it is plain and obvious that it cannot be a breach
    of good faith and fair dealing to administer insurance policies in accordance
    with their terms.

There is no reasonable cause of action against an insurer for
    administering a contract of insurance in accordance with its terms.
    Accordingly, I strike out paragraphs 98 to 101. These paragraphs are redundant
    or they are untenable.

[30]

In
    my view, the motion judge erred in striking out this claim.  Sun Life
    acknowledges that an insurer owes a duty of good faith and fair dealing to its
    insured, and that this duty applies to any matter arising under or in relation
    to it.  Sun Life also acknowledges that this duty exists independently of and
    in addition to the terms of a contract between an insurer and an insured, and
    thus, may give rise to an independent cause of action:  see
Ferme Gérald
    Laplante & Fils Ltée v. Grenville Patron Mutual Fire Insurance Co.
(2002),
    61 O.R. (3d) 481 (C.A.), at para. 78, leave to appeal to S.C.C. refused, [2002]
    S.C.C.A. No. 488;
Whiten v. Pilot Insurance Co.
, 2002 SCC 18, [2002] 1
    S.C.R. 595, at para. 79.

[31]

However,
    Sun Life maintains that the motion judge correctly struck this claim because it
    amounts to an allegation that the insurer breached its duty of good faith
    simply because it acted in accordance with the terms of the policy.  It argues
    that the duty of good faith must not require the insurer to contravene the
    terms of the insurance contract.  Citing some foreign authority, Sun Life
    contends that an insurer who acts in accordance with the express terms of a
    contract cannot be found to have violated its duty of good faith and fair
    dealing.

[32]

I
    would not characterize the plaintiffs claim in quite the same way as Sun Life
    and the motion judge have characterized it.  In my view, their reading of the
    plaintiffs pleading is too narrow.  The plaintiffs do allege that Sun Life
    breached its duty of good faith by failing to administer the policies in
    accordance with the representations made during the sales process.  However,
    that allegation is one branch of a broader claim that includes two other branches:

·

Sun Life was not candid with its insureds  it did not disclose
    the misrepresentations made by MetLife agents when the policies were sold, or
    provide remedies for those misrepresentations; and

·

Sun Life obtained releases and entered into settlements without
    making full disclosure, or it knowingly and systematically refused to honour legitimate
    claims made by its insureds.

[33]

A
    pleading should only be struck on a Rule 21 motion when the applicable law is
    settled in the jurisprudence.  The law governing the application of the duty of
    good faith and fair dealing to the relationship between an insurer and its
    insured is not, in my view, settled.  Moreover, it does not seem to me plain
    and obvious that any of these three branches doom this claim to failure.

[34]

As
    for the first branch  that Sun Life failed to administer the policies in
    accordance with MetLifes misrepresentations  neither the motion judge nor the
    respondents produced a Canadian authority for the proposition that an insurer
    who has complied with the express terms of the contract cannot have breached
    its duty of good faith and fair dealing.  The plaintiffs, however, point to
Shelanu
    Inc. v. Print Three Franchising Corp.
(2003), 64 O.R. (3d) 533, a case
    involving a franchisor-franchisee relationship, in which this court held, at
    para. 71, that the fact that contractual terms are ultimately complied with,
    does not mean that there has been no breach of the duty of good faith. As this
    proposition may apply in the insurance context, and as its scope has yet to be
    determined, this first branch of the plaintiffs duty of good faith claim could
    possibly succeed.

[35]

Even
    if the plaintiffs face an uphill battle on the first branch of their duty of good
    faith and fair dealing claim, I am not satisfied that the balance of the claim is
    doomed to fail.  The second branch  that Sun Life failed to disclose or remedy
    MetLifes misrepresentations  has some support in the reasons of OConnor
    A.C.J.O. in
Transamerica Life Canada Inc. v. ING Canada Inc.
(2003),
    68 O.R. (3d) 457, at para. 5, where he held that a motion judge erred by
    striking out a similar allegation on a Rule 21 motion:

First, the motion judge struck pleas alleging that Transamerica
    had implied duties of good faith requiring it to notify ING before closing if
    it became aware of the problems that it alleges in its claim and to consult
    with ING about the remedial actions it took after closing.  I have
    concluded that the motion judge erred in striking those pleas.

[36]

Although
    that case dealt with a commercial contract between two insurers, a similar
    obligation could apply to the relationship between an insurer and an insured
    a relationship that has long been recognized as one of particular
    vulnerability.  Indeed, I would have thought it is at least arguable that an
    insurers duty of good faith precludes it from concealing from its insureds
    facts it knows to be inaccurate:  see
Ferme Gérald Laplante & Fils Ltée
,
    at para. 73.

[37]

The
    respondents acknowledge the viability of at least part of the third branch of
    the plaintiffs claim  that Sun Life systematically denied the legitimate
    claims of its insureds.  They put it this way in their factum (citing this
    courts decision in
702535 Ontario Inc. v. Lloyds London, Non-Marine
    Underwriters
(2000), 184 D.L.R. (4th) 687):

Courts have also recognized a duty of utmost good faith in
    relation to the insurers duty to act fairly at every step of the claims
    process.  The Court of Appeal has summarized the duty of good faith as follows:

[27] The relationship between an insurer and an insured is
    contractual in nature.  The contract is one of utmost good faith.  In addition
    to the express provisions in the policy and the statutorily mandated
    conditions, there is an implied obligation in every insurance contract that the
    insurer will deal with claims from its insured in good faithThe duty of good
    faith requires an insurer to act both promptly and fairly when investigating,
    assessing and attempting to resolve claims made by its insureds.  [Citations
    omitted.]

[38]

This
    case supports the plaintiffs argument that an insurer has a duty of good faith
    and fair dealing throughout its adjudication of claims.

[39]

Finally,
    it is clear from the arguments raised by both parties and the foregoing
    discussion that the jurisprudence on the duty of good faith and fair dealing,
    generally and as it applies to the insurance relationship, is not settled in
    this country.   As OConnor A.C.J.O. observed at para. 52 of his reasons in
Transamerica
,
    again in the context of commercial contracts, the contours of the duty of good
    faith and fair dealing in Canadian law have yet to be determined:

Unlike the situation in the United States where the duty of
    good faith in the performance of enforcement of commercial contracts has been
    broadly recognized, Canadian courts have not developed a comprehensive and
    principled approach to the implication of duties of good faith in commercial
    contracts.  As Professor McCamus points out, many questions about the
    nature and scope of such duties have yet to be resolved.  Indeed, it
    remains an open question whether implied duties of good faith add anything to
    the other available common law doctrines that apply to contracts.

Where the scope of a legal duty has not been fully
    settled in the jurisprudence, an allegation that the duty has been breached
    should not be dismissed on a Rule 21 motion:  see
Folland v. Ontario
(2003)
,
64 O.R. (3d) 89 (C.A.), at para. 11, leave to appeal to S.C.C. refused,
    [2003] S.C.C.A. No. 249.  For these reasons I
think it is
    premature to strike the claim for breach of the duty of good faith and fair
    dealing.  With the exception of the allegations based on the settlements and
    releases, which I have dealt with below, I would let it go forward.

(b)

Breach of contract

[40]

At
    paras. 94-95 of their pleading, the plaintiffs allege that it was an express or
    implied term of the Universal Plus policy that the premiums would never exceed
    the stipulated Maximum Premium.  Yet the plaintiffs allege that Sun Life
    breached the term of this policy by repeatedly charging premiums in excess of
    the Maximum Premium.

[41]

After
    examining parts of the Universal Plus policy, the motion judge held, at para.
    125 of his reasons, that [t]here [are] no express terms of the contract as
    alleged by the Plaintiffs, and the expressed terms stand against any implied
    term.  He therefore concluded, at para. 127, it is plain and obvious that
    there is no tenable breach of contract claim.

[42]

I
    do not think that the express terms of the Universal Plus policy are as clear
    as the motion judge considered them to be.  The term Maximum Premium is not
    defined anywhere in the policy.  The words Maximum Premium appear at the top
    of a chart on pages 3 and 3T of the policy, with corresponding rates for
    various forms of coverage.  There is no express provision that Sun Life can
    charge a policyholder more than the Maximum Premium.  One available and
    reasonable inference is that the very term Maximum Premium means that the
    corresponding rates are the most a policyholder will have to pay.  At the very
    least, the meaning of the term is ambiguous.  Thus, in my view, the claim ought
    to stand.

(c)

Deceit and fraud

[43]

At
    paras. 106-111 of their pleading, the plaintiffs allege that MetLife committed
    deceit and fraud by knowingly selling the policies on the basis of
    misrepresentations.  They also allege that Sun Life committed deceit and fraud by
    denying misrepresentations had occurred, telling class members their policies
    were not defective, systematically denying claims, and obtaining settlements
    and releases without full disclosure.

[44]

The
    motion judge, at para. 150, struck the claim for deceit and fraud on either of
    two bases:  it was an imperfect repetition of the already pleaded claims of
    negligent or fraudulent misrepresentation, or it amounted to an allegation
    that Sun Life committed deceit and fraud by not admitting (i.e. by denying)
    that Met Life had committed deceit and fraud.  In short, he felt that it did
    not add a cause of action.

[45]

The
    plaintiffs argue that the motion judge erred in conflating the
    misrepresentation claims and the deceit and fraud claims.  They say the negligent
    and fraudulent misrepresentation claim related solely to MetLifes sale of the
    policies, while the deceit and fraud claim extended to Sun Lifes
    administration of the policies.

[46]

In
    my view, this claim should not have been struck.  The claim of deceit and fraud
    based on the administration of the policies is premised on a different set of
    allegations from the allegations underlying the claim of negligent and
    fraudulent misrepresentation.  It concerns Sun Lifes ongoing conduct in
    administering the policies, long after the sales process during which Metlife
    made the alleged initial misrepresentations.  It does not simply repeat or
    replicate the plaintiffs claim of negligent or fraudulent misrepresentation.

[47]

Moreover,
    it is not plain and obvious to me that the claim regarding Sun Lifes alleged
    deceit and fraud  again, with the exception of the impugned releases and
    settlements  is doomed to fail.  The plaintiffs are therefore entitled to
    maintain their claim for deceit and fraud.

(d)

The releases

[48]

At
    paras. 82-84 of their pleading, the plaintiffs allege that Sun Life entered
    into settlements with and obtained releases from class members without
    disclosing to them that their policies were sold on the basis of misrepresentations.
    They say that, in so doing, Sun Life breached its duty of good faith and fair
    dealing and engaged in deceitful conduct.

[49]

The
    motion judge struck out these paragraphs without leave to amend.  He agreed
    with Sun Lifes submission that these paragraphs pleaded evidence and were
    irrelevant to the causes of action pleaded.  He observed that the pleading
    does not include a cause of action or a representative plaintiff claiming
    rescission or alleging that the releases and any settlement with individual policyholders
    are null and void.  He added, however, at para. 100, that if a proposed
    representative plaintiff could show some basis for a claim in rescission, that person
    could apply for leave to be added as a plaintiff in the action.

[50]

The
    plaintiffs contend that the motion judge should not have struck their
    allegations concerning the policyholders who signed releases.  They say that he
    erred in viewing those allegations as a contract complaint, in attempting to
    frame the issue as one of rescission, and in finding that they as
    representative plaintiffs could not advance claims on behalf of those
    policyholders.  Even though none of the five plaintiffs signed a release, they
    submit that class members need not be identically situated
vis-à-vis
the opposing party:
Western Canadian Shopping Centres Inc. v. Dutton
,
    2001 SCC 46, [2001] 2 S.C.R. 534, at para. 39.

[51]

Sun
    Life acknowledges that a representative plaintiff can assert a cause of action
    that is not the plaintiffs personal cause of action but belongs to some
    members of the class, provided that the claims are fundamentally the same or
    very similar:
Boulanger v. Johnson & Johnson Corp.
(2003), 64
    O.R. (3d) 208 (Div. Ct.), at paras. 41 and 48, revd in part on other grounds
    (2003), 174 O.A.C. 44 (C.A.);
Healey v. Lakeridge Health Corp.
(2006),
    38 C.P.C. (6th) 145 (S.C.J.), at para. 21.  The plaintiffs maintain that their
    claims concerning the releases and their other claims are very similar, because
    they share a common factual foundation.

[52]

Even
    accepting that to be so, the motion judge was correct to strike the plaintiffs
    allegation concerning the releases because they do not assert a cause of
    action.  Although the plaintiffs incorporated the releases and settlements into
    both their duty of good faith claims and their deceit and fraud claims, they have
    failed to request any specific relief for the policyholders who entered into
    those agreements.  They do not seek rescission, nor do they seek a declaration
    that the releases were null and void.

[53]

The
    motion judge therefore did not err in striking these paragraphs and, as I noted
    earlier, he fairly left open the availability of a motion to add a claim for
    rescission or declaratory relief on the releases.

D.

conclusion

[54]

I
    would allow the appeal.  I would set aside that part of the order of the motion
    judge in which he struck out the allegations concerning breach of the duty of
    good faith and fair dealing, breach of contract, and deceit and fraud, and the material
    facts relevant to those pleas.  I would dismiss Sun Lifes motion in respect of
    those allegations.

[55]

As
    the plaintiffs have been substantially successful, they are entitled to their
    costs of the appeal, which I would fix in the amount of $20,000, inclusive of
    disbursements and applicable taxes.  I would also award the plaintiffs the
    $5,000 in costs ordered by Doherty J.A. on the motion before him.

Released: FEB. 25, 2013                                        John
    Laskin J.A.

JL                                                                     I
    agree M. Rosenberg J.A.

I
    agree S.T. Goudge J.A.

[1]
Section 439 of the
Insurance Act
states:
    No person shall engage in any unfair or deceptive act or practice.

[2]
Sun Life refers to both Sun Life and its predecessors.


COURT OF APPEAL FOR ONTARIO

CITATION:
Kirby v. Hope
    Place Centres, 2013 ONCA 90

DATE: 20130213

DOCKET: M42084

Weiler J.A. (In Chambers)

BETWEEN

Dorothy Kirby

Plaintiff (Moving Party)

and

Hope Place Centres

Defendant (Responding Party)

Michael J. Hackl, for the moving party

Ron Craigen, for the responding party

Heard: February 8, 2013

On a motion for an extension of time to file a notice of appeal.

ENDORSEMENT

[1]

This is a motion by Dorothy Kirby for an extension of time to file a
    notice of appeal from the dismissal of her claim for wrongful dismissal against
    Hope Place Centres.  For the reasons that follow, I must dismiss the motion.

[2]

In deciding whether to extend the time, the following factors are
    relevant: (1) whether the appellant formed an intention to appeal within the
    relevant period; (2) the length of and explanation for the delay; (3) any
    prejudice to the respondent; (4) the merits of the appeal; and (5) whether the
    justice of the case requires it:
Kefeli v. Centennial College of Applied
    Arts and Technology
(2002), 23 C.P.C. (5th) 35 (Ont. C.A.).

[3]

The factual background, of the case is important to the application of
    the various factors.

[4]

Kirby started Hope Place, a small not-for-profit agency providing
    support services for persons suffering from alcoholism and drug addiction in
    1989. She immediately became its Executive Director. She occupied this position
    until October, 2004.  Kirbys statement of claim alleges that she suffered a
    breakdown due to the stress of amalgamating with another corporation and
    harassment by a Board Member. About the same time, certain financial
    irregularities came to the attention of the Board of Directors and it decided
    to suspend Kirby with pay pending a more detailed investigation. Kirbys doctor
    ordered her to go on stress-leave. She declined to attend a meeting to discuss
    the financial irregularities at the offices of the lawyers for Hope Place in January,
    2005 on the advice of her doctor. As a result, she was placed on sick leave.
    Kirby alleges further harassment, abuse and invasion of her privacy by the
    Board. She was terminated on May 10, 2005. At that time she was 58 years old
    and was earning a base salary of $75,000.

[5]

In November 2006 Kirby sued Hope Place for wrongful dismissal.  Hope
    Place took the position it had terminated Kirby for cause due to the financial
    irregularities. For example, the Transportation Fund did not have corresponding
    cheques to account for where all the funds had gone.  While Kirby acknowledged
    that she did not have documentary evidence with respect to all of the money in
    the Transportation Fund, she maintained that she did not benefit personally
    from it but had used cash to pay for such expenses as taxis for residents.

[6]

Hope Place conducted discovery of Kirby and set the matter down for
    trial.  Kirby conducted no discovery of Hope Place.

[7]

After an initial pre-trial in December 2010, the trial of the
    action was scheduled to proceed during the sittings commencing March 28, 2011.
    Hope Place served Kirby with an extensive request to admit in March 2011 to
    which she did not respond. She states in her affidavit that she did not
    appreciate its significance.

[8]

On March 25, 2011, Kirbys aunt in Newfoundland, to whom she was very
    attached, became ill. A letter was delivered to the court advising that she was
    attending to her aunt.  Kirby asserts that, as a result, she understood the
    case was adjourned to the next hearing date on November 7, 2011. Kirby did not
    provide counsel for Hope Place with a copy of her letter.  Nor did she provide
    any interim contact information to the court. Kirbys aunt passed away on March
    29.  Save for a brief trip home to the doctor, Kirby stayed on in Newfoundland
    to grieve for her aunt.

[9]

The case was called for a further pre-trial on April 11, 2011 with a
    trial to follow immediately afterwards in the event no settlement was reached.
    Efforts to reach Kirby and to advise her of this were unsuccessful. At the
    pre-trial, Bielby J. adjourned the matter to the November 2011 sittings and
    ordered Kirby to do the following: (a) pay costs thrown away of $13,000 and (b)
    confirm in writing her list of witnesses and the gist of their evidence by June
    15, 2011. The order further provided that in the event Kirby failed to comply
    with either provision, Hope Place was entitled to move without notice to have
    the action dismissed. The order provided for service by regular mail at the
    address given in Kirbys pleadings.

[10]

Hope
    Place sent Kirby a copy of the handwritten endorsement on April 13, 2011.
    Secondly, as ordered by the court, it sent her a copy of the order as entered
    on May 2, 2011.

[11]

After
    Kirby returned from Newfoundland, her brother was very ill and he subsequently
    died.  Kirby had either a friend or her son checking her mail and collecting it
    during this period. Kirby swears that she did not receive either of the two
    letters containing a copy of the orders. She also states that she was again
    suffering from the effects of post-traumatic stress disorder and did not always
    attend to her mail.

[12]

Hope
    Place moved for dismissal of Kirbys action and on August 17, 2011, Gray J.
    dismissed it with costs. Hope Place scheduled an appointment for the assessment
    of costs and served it together with a costs brief on Kirby on September 9,
    2011 and again on September 13, 2011. On the return date of September 20, 2011,
    Kirbys agent, Rebecca Daniels appeared and the matter was adjourned to January
    5, 2012.

[13]

Kirby
    swears that it was only when she attended on January 5, 2012 that she realized
    her action had been dismissed. The matter was adjourned to May 7, 2012, when it
    proceeded with Kirby in attendance. Costs of $221,500 were assessed with
    approximately 50% of the costs relating to the forensic investigation, report
    and trial preparation of the forensic accounting expert engaged by Hope Place.

[14]

Kirby
    explained that her doctor advised her that she needed to concentrate on and
    improve her health before undertaking the additional stress of addressing the
    dismissal of her action.

[15]

On
    May 28, 2012, Kirby launched an urgent motion to set aside the order of Gray J.
    The motion was adjourned to July 7, 2012.  Murray J. dismissed the motion
    stating as follows:

In the circumstances of this case, given the delay in bringing
    the motion, the failure of the plaintiff to provide any evidence of an arguable
    case, and the evidence of compliance by the defendant with Bielby J.s order
    regarding service of that order, and the uncontradicted evidence that the
    handwritten endorsement of Bielby J. was also sent to the plaintiff by regular
    mail, I am not prepared to set aside the order of Gray J. dismissing the
    plaintiffs action based on her non-compliance with the order of Bielby J.
    dated April 11, 2012.

[16]

Kirby
    expressed an intention to appeal this order. She did not, however, consult
    counsel until after the time for appealing had already run. She states that
    this was due to her unfamiliarity with the rules of civil procedure.

[17]

Before
    me, Kirby was represented.

[18]

I
    am satisfied that there is no prejudice to the respondent. Although Hope Place
    alleges that it lost contact with an important witness due to the delay, it
    appears that Hope Place lost contact with the witness before the case was
    scheduled for trial and thus it would not be further prejudiced if leave were
    to be granted. Hope Place also alleges that, in addition, a number of its
    witnesses are elderly and that their memories are fading. This is true of any
    case. I also note Kirbys oral undertaking to pay outstanding costs orders, not
    including the $200,000 in costs relating to the dismissal of the action, within
    30 days from todays date or, in any event, prior to the hearing of any
    appeal.  I turn now to the other factors to be considered.

[19]

Counsel
    argued that Kirby did not receive the Bielby order despite the fact that it was
    mailed to her on two separate occasions. I take the endorsement of Murray J. as
    indirectly saying he did not accept this explanation. I have no basis on which
    to conclude differently.

[20]

Once
    Kirby acknowledged she was aware her action had been dismissed in January 2012,
    her mental state is put forward as the underlying reason for her delay in
    moving to set aside the order dismissing her claim. Yet the only medical
    evidence in the record in this regard is a letter from her doctor in 2009
    respecting an insurance claim.

[21]

Counsel
    also sought, as part of this motion, to obtain leave to introduce fresh
    evidence in order to fill the gap respecting the lack of evidence of an
    arguable case. No supporting affidavit, setting out precisely what the fresh
    evidence is, was filed in a sealed envelope for the courts consideration in
    the event that leave were granted.

[22]

On
    this record, a satisfactory explanation for the delay has not been given. More
    importantly, apart from Kirbys bald assertions in her evidence,   evidence
    that Kirby has an arguable case for wrongful dismissal is simply lacking.

[23]

Accordingly
    the motion to extend the time within which to file a notice of appeal is
    dismissed.

[24]

Hope
    Place seeks its costs of the motion in the amount of $17,700. Counsel for Kirby
    acknowledges that the amount is not unreasonable and, indeed, his own bill of
    costs is higher.

[25]

Kirby
    has not been able to have her day in court yet she owes in excess of $200,000
    in costs. Hope Place is a not for profit company that had to protect its
    interests, and did so, in a vigorous manner. While Hope Place is entitled to
    its costs, much of the material filed and argument today would have been
    essentially the same as that before Murray J. Accordingly, I fix costs in the
    amount of $10,000 payable to Hope Place.

Released: Feb 13, 2013

KMW                                                                K.M.
    Weiler J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Lo
Faso v. Ferracuti Estate, 2013 ONCA 123

DATE: 20130227

DOCKET: C55395

Winkler C.J.O., Pepall J.A. and G.P. Smith J. (
ad
hoc
)

BETWEEN

Gaetano Lo Faso

Plaintiff (Appellant)

and

David Ferracuti as Estate
Trustee of the Estate of Anthony Ferracuti
, Anthony Ferracuti
Investments Limited, Dallas Investments Limited, Cravit & Ferracuti
Interior Design Inc.,
518391 Ontario Inc., Drumlin
Developments Limited, David

Ferracuti Investments
Ltd., Heather Ferracuti
, Gerald Borean, Parente Borean, and Mauro (aka
Maurizio) Marchioni

Defendants (
Respondents
)

Paul J. Pape and Nicolas M. Rouleau, for the appellant

Sean E. Cumming and Colby Linthwaite, for the respondents

Heard: November 21, 2012

On appeal from the order of Justice Gordon D. Lemon of
the Superior Court of Justice, dated April 2, 2012, with reasons reported at
2012 ONSC 2081.

Pepall J.A.:

[1]

The appellant appeals the order of the motions judge dated
April 2, 2012, in which he granted partial summary judgment in favour of the
respondents. In granting the respondents motion, the motions judge dismissed
the appellants claims to an interest in property municipally known as 2301
Haines Road, Mississauga (Haines Road) and to an interest in the shares of the
respondent company 518391 Ontario Inc. (518). He also dismissed the
appellants motion for a certificate of pending litigation (CPL). Although
not requested before the motions judge, the appellant requests partial summary
judgment from this court declaring that he is the beneficial owner of Haines
Road. He asks that all other matters be directed to trial. In the alternative,
he asks this court to issue a CPL on Haines Road and to remit all matters to
trial.

Background Facts

[2]

The appellant, Gaetano Lo Faso, is a judgment creditor of a bankrupt
company named Kelton and Ferracuti Consultants Limited (Kelton). In 1993, he obtained
a judgment from Kelton in the amount of $63,637.20, in addition to costs of $278,000,
plus interest. He registered the judgment with the Sheriff that same year, and later
renewed that registration. The appellant took no active steps to enforce his
judgment between 1994 and 2000.

[3]

Anthony Ferracuti, whose estate is one of the respondents to
this appeal, was the guiding mind of the judgment debtor Kelton and of 518. Kelton
was the sole shareholder of 518. 518 held the Haines Road property that is in
dispute in trust for Kelton. 518 therefore held the legal title to the
property, and was its registered owner, while Kelton held the equitable title
and beneficial interest in the property. 518 was a bare trustee of  Haines
Road  for Kelton.

[4]

In 1989, North American Life Assurance Company (North American) was
granted a $2,150,000 first mortgage on Haines Road, which was guaranteed by Mr.
Ferracuti. The January 31, 1990 Kelton financial statements showed the
propertys net book value as being less than the principal amount outstanding
on the first mortgage. As such, as of that date, the evidence suggests that there
was no equity in the property. Mr. Ferracutis evidence was that the
realty taxes were in arrears and the first mortgage went into default on or
about September 1, 1991. In November 1991, North American sued 518 and Mr.
Ferracuti, as personal guarantor, for default on the first mortgage. On February 7, 1992, Haines Road was offered to North American in exchange for a release of
518 and Mr. Ferracuti.

[5]

North American declined the offer and instead renegotiated the
first mortgage guaranteed by Mr. Ferracuti and obtained a second mortgage on
Haines Road in the amount of $10,000,000. This second mortgage secured a new
obligation, which was to pay North American 25% of the net amount received by 518
from a sale of Haines Road before November 1, 1999, and failing a sale, 25% of the
appraised value of the property at that time.

[6]

Kelton ceased to operate in 1993 but continued to hold the beneficial
interest in Haines Road.

[7]

In 1998, 518 negotiated a lease of Haines Road with the
Ontario Governments Parole Office, but substantial leasehold improvements were
required.

[8]

There was no equity in Haines Road at this time. TD Bank
agreed to lend the $200,000 required to make the improvements provided that Mr.
Ferracutis wife, Heather Ferracuti, gave a personal covenant secured by a
$200,000 mortgage on the Ferracutis family home, and 518 granted TD Bank a
further mortgage on Haines Road together with a postponement of North Americans
second mortgage. Mr. Ferracuti stated that the choice he faced was either
to walk away from Haines Road and be exposed to a further lawsuit on his
personal guarantee, or ask his wife to bail him out. He chose the latter.

[9]

Mrs. Ferracuti agreed to bail her husband out: she would guarantee and
provide security for the $200,000 loan from TD Bank, and, in exchange, assume
ownership of 518 and Haines Road. Mr. Ferracuti stated that in accordance with
his deal with Mrs. Ferracuti, she owned the shares in 518 and 518 owned Haines
Road. After the transfer, 518 was treated as the full owner of the property.
Had these transactions not been effected, North American would have sold the
property at a loss.

[10]

While
there is documentation relating to the transfer of the shares in 518 from
Kelton to Mrs. Ferracuti, there is no document transferring the beneficial
interest in Haines Road from Kelton to 518. Similarly, there is no document to
that effect signed by any of Kelton, 518, Mr. Ferracuti or Mrs. Ferracuti.

[11]

By
September 1999, 518 had not received any offers to purchase Haines Road. An
appraiser was therefore hired to conduct an appraisal of Haines Road, pursuant
to 518s second mortgage agreement with North American. The appraised value of
Haines Road was $1,900,000. This was $200,000 less than the encumbrances on the
property.

[12]

In
2006, the appellant was attempting to enforce his judgment against Kelton. On
September 27, 2006, he obtained a court order to examine Mr. Ferracuti in aid
of execution. On September 28, 2006, 518 granted a mortgage to Mr. Ferracuti on
Haines Road. If valid, this mortgage would take priority over the appellants
judgment.

[13]

On
October 13, 2006, Kelton made an assignment into bankruptcy.

[14]

The
appellant obtained orders under s. 38 of the
Bankruptcy and Insolvency Act
,
R.S.C. 1985, c. B-3 (the BIA), authorizing him to take proceedings for his
own benefit to recover Keltons interests in various properties including Haines
Road.

[15]

Mr.
Ferracuti died on November 18, 2009.

[16]

Prior
to Mr. Ferracutis death, on March 20, 2009, the appellant commenced an action
seeking, among other things, a declaration that Kelton (and hence the
appellant) is the beneficial owner of Haines Road and a declaration that the
transfer and acquisition of Haines Road to and from 518 constituted a
fraudulent conveyance, preference, reviewable transaction, or settlement,
pursuant to the
Fraudulent Conveyances Act
, R.S.O. 1990, c. F.29, the
Assignment
and Preferences Act
, R.S.O. 1990, c. A.33, or the
BIA
. He also
claimed oppression as against Mr. and Mrs. Ferracuti as directors of Kelton.

[17]

In
his statement of claim, the appellant pleaded that Kelton was at all material
times the sole shareholder of its wholly owned subsidiary, 518, until Kelton
transferred its shares to Mrs. Ferracuti in 1999 for no or inadequate
consideration. He claims the shares of 518 on the basis that they were
fraudulently conveyed. He also maintains that while the shares in 518 were
transferred to Mrs. Ferracuti, Keltons beneficial interest in Haines Road was
never transferred and remains with Kelton. As such, the appellant claims that
he is entitled to that property.

[18]

The
respondents brought a successful motion for partial summary judgment to dismiss
the appellants claims to an interest in Haines Road and to the shares in 518.

Grounds of Appeal

[19]

Before
this court, the appellant advances two alternative grounds of appeal.

[20]

The
appellant submits that the motions judge erred by implicitly finding that
Kelton transferred its beneficial interest in Haines Road to 518. He argues
that the motions judge missed the issue of whether there ever had been a
transfer of the beneficial interest in Haines Road and conflated it with the
transfer of the shares in 518. The appellant argues that this court should
grant summary judgment in his favour because there was no documentation
evidencing any transfer of the Haines Road property from Kelton to 518, no
evidence of a Land Transfer Tax payment, and no evidence of compliance with s.
2 of the
Statute of Frauds
, R.S.O. 1990, c. S.19.

[21]

In
the alternative, the appellant submits that if there was a transfer of Haines
Road, this court should direct the action to trial to determine whether the
purported transfer to Mrs. Ferracuti constituted a fraudulent conveyance, a
breach of fiduciary duty owed to Kelton, or was oppressive to the appellant in
his capacity as a creditor of Kelton.

Analysis

[22]

In
granting the respondents motion for partial summary judgment, the motions judge
applied the correct legal test for determining whether to grant summary
judgment. He determined that he had a full appreciation of the evidence and the
issues. As such, as this court directed in
Combined Air Mechanical Services
Inc. v. Flesch
, 2011 ONCA 764, 108 O.R. (3d) 1, at para. 71, leave to
appeal to S.C.C. granted, [2012] S.C.C.A. Nos. 47-48, any factual determinations
made by the  motions judge in deciding the motion will attract review on the
deferential standard of palpable and overriding error.

[23]

The
first issue to address is the transfer of the beneficial interest in Haines
Road from Kelton to 518. While the
Statute of Frauds
was not pleaded,
the parties made written and oral submissions on its requirements before the
motions judge. He addressed those arguments at paras. 70, 71 and 72 of his
reasons. He held that the transaction was a transfer of shares, not land, and as
such, the non-payment of land transfer tax  a possible badge of fraud  was
inapplicable. Furthermore, there were documents confirming the share
transaction.

[24]

It
would appear that the motions judge thereby accepted Mr. Ferracutis and the
respondents theory of the case that the transfer of the shares in 518 was necessarily
incidental to the completion of the larger transaction, which was the transfer
of control of Haines Road to Mrs. Ferracuti. This was done to finance leasehold
improvements on Haines Road. As 518 had always been a bare trustee, a fact the
appellant conceded, its shares were valueless. If ownership of Haines Road was
not transferred to Mrs. Ferracuti, as suggested by the appellant, she would
have received valueless shares in return for her personal covenant in favour of
TD Bank, which was secured by a $200,000 mortgage on the family home. The
respondents further submitted that the financial statements and income tax
returns of Kelton and 518 also reflected the transfer.

[25]

The
difficulty with this theory and with the motions judges analysis is that it
improperly conflates the transfer of Keltons shares in 518 with the transfer
of Keltons beneficial interest in Haines Road. By necessity, these were two
separate transactions.

[26]

Because
he conflated the two transactions, the motions judge failed to properly
consider indicia reflecting an absence of any transfer of the beneficial
interest. There was no evidence of compliance with s. 2 of the
Statute of
Frauds
, which provides that no interest in lands shall be granted or
surrendered unless by deed or note in writing signed by the party so granting
or surrendering, or by the partys agent. Furthermore, even if the
Statute
of Frauds
may in certain circumstances allow for the use of an oral
contract as a defence to an action, the motions judge made no finding of any
oral agreement between Kelton and Mrs. Ferracuti that reflected the transfer of
the beneficial interest.   Moreover, there was no evidence of any payment of the
land transfer tax which would have been payable on the transfer of the beneficial
interest in Haines Road.

[27]

The
motions judge improperly conflated the two transfers, failed to consider
material facts, and therefore erred in granting partial summary judgment. The
appeal is allowed.  It is therefore unnecessary to consider the appellants
alternative ground of appeal.

[28]

The
appellant requests summary judgment in his favour even though such a motion was
not brought below. While this court may grant such relief, in my view, this
action should be tried. The parties should give consideration to their
pleadings particularly with respect to the interplay between s. 2 and s. 4 of
the
Statute of Frauds
.

[29]

In
conclusion, I would allow the appeal, set aside the motions judges order
granting partial summary judgment, reinstate Herold J.s order of April 20,
2010, and grant a CPL in favour of the appellant together with leave to
register the CPL against title to Haines Road.

[30]

The
respondents are to pay the appellants costs fixed in the amount of $15,000
inclusive of disbursements and applicable taxes.

Released: February 27, 2013 WW

S.
E. Pepall J.A.

I
agree W. Winkler C.J.O.

I
agree Patrick Smith J. (
ad hoc
)