COURT OF APPEAL FOR ONTARIO

CITATION: Friends of Toronto Public
    Cemeteries Inc. v. Public Guardian and Trustee, 2020 ONCA 509

DATE: 20200814

DOCKET: C66494

Pepall,
    Tulloch and Benotto JJ.A.

BETWEEN

Friends of Toronto Public Cemeteries Inc. and Kristyn Wong-Tam

Applicants
    (Respondents/

Appellants
    by way of cross-appeal)

and

Public
    Guardian and Trustee
and
Mount Pleasant Group of
    Cemeteries

Respondents
    (
Appellant
/
Respondent
/

Respondents
    by way of cross-appeal)

Ronald G. Slaght, Q.C. and Margaret
    Robbins, for the appellant/respondent by way of cross-appeal, Mount Pleasant
    Group of Cemeteries

Michael S.F. Watson, Rodney Northey
    and Michael Finley, for the respondent/appellant by way of cross-appeal,
    Friends of Toronto Public Cemeteries Inc.

Tim Gleason and Amani Rauff, for the
    respondent/appellant by way of cross-appeal, Kristyn Wong-Tam

Dana De Sante, for the
    respondent/respondent by way of cross-appeal, Public Guardian and Trustee

Heard: In writing

On appeal from the
    order of Justice Sean F. Dunphy of the Superior Court of Justice, dated
    December 31, 2018, with reasons reported at 2018 ONSC 7711, 144 O.R. (3d) 521.

COSTS ENDORSEMENT

[1]

The appellant, Mount Pleasant Group of
    Cemeteries (MPGC), seeks its costs from the respondents, Friends of Toronto
    Public Cemeteries Inc. (FTPC) and Kristyn Wong-Tam. It requests costs of the
    appeal and cross-appeal in the amount of $150,000 and costs of the underlying
    application in the amount of $475,000. Both sums are inclusive of disbursements
    and HST. The appellant does not seek any costs from the Public Guardian and
    Trustee (PGT).

[2]

New counsel on behalf of Ms. Wong-Tam, who are
    not on the record, filed separate costs submissions and asked that this court
    consider them. No issue was taken in reply by the appellant. We have considered
    Ms. Wong-Tams submissions in reaching our costs decision.

[3]

Typically, costs follow the event, or to use
    more contemporary phraseology, the result of the action. As the appellant was
    successful on the appeal and cross-appeal, this principle suggests an award in
    favour of the appellant. However, the respondents resist any such award for three
    principal reasons:

i.

the application was brought solely in the public
    interest and for no personal advantage or gain;

ii.

they were successful on what FTPC describes as
    the fundamental underlying issue in the case, the existence of the statutory
    trust, which was only conceded at the eleventh hour
[1]
and which benefitted the
    appellant; and

iii.

they successfully resisted the appellants
    argument that the respondents had no standing.

[4]

Alternatively, the respondents submit that even
    if FTPC is not a public interest litigant, Ms. Wong-Tam is, and no costs should
    be awarded against her personally.

[5]

We will start by addressing the respondents
    public interest argument and then will turn to the issue of quantum.

Public Interest Status

[6]

The first issue to address is whether the
    application should be characterized as public interest litigation and, if so,
    whether FTPC and Ms. Wong-Tam should be excused from paying costs because they
    were acting in the public interest.

[7]

In considering the public interest issue, we
    begin with the application judges reasons.

[8]

At para. 67 of his reasons, the application
    judge described FTPC. He wrote: [I]n 2013, the Applicant Friends of Toronto
    Public Cemeteries Inc. was incorporated by some members of the Moore Park
    Ratepayers Association that had been involved in the prior interventions
    regarding MPGC. Since its incorporation, a number of others have joined it as
    members although the majority of its members are from the Moore Park area
    surrounding the Mount Pleasant cemetery on its southern boundary. (This
    finding is reflected in part in para. 65 of this courts reasons.) The
    application judge found, at para. 5, that FTPC had about 100 members.

[9]

Ms. Wong-Tam was described by the application
    judge, at para. 5, of his reasons as a Toronto resident who is also the City Councillor
    for the area (acting in her private capacity here).

[10]

The application judge identified the following
    issues to be addressed: the respondents standing to bring the application;
    whether the current directors of MPGC were validly appointed; was MPGC a trust
    and, in particular, a charitable purpose trust; had MPGC exceeded its objects
    as they related to its visitation centre, funeral home and crematoria
    operations; and would the public interest be served by ordering an
    investigation. He found in favour of the respondents on all issues except two. He
    concluded that there was an inadequate evidentiary record to address the issue
    of the crematoria and he decided that the public interest would not be served
    by an investigation. On this last point, he observed that MPGC was not a runaway
    train; there was no basis to conclude that its trustees had acted in bad faith
    or that they had gone rogue, to use his language.

[11]

On the issue of standing, over the objections of
    the appellant, the application judge relied on the public interest status of
    both respondents and granted them standing. The appellant did not appeal his
    decision in this regard, nor did it appeal his determination that MPGC was a
    statutory trust, although this had already been conceded in any event.

[12]

At the very end of his reasons, the application
    judge closed by stating that the respondents had been substantially successful
    in their application and were entitled to their costs. At para. 172, he wrote:
They have not acted for their personal benefit but to
    vindicate an important public interest.
He then sought submissions on
    scale and amount if the parties were unable to reach an agreement.

[13]

The parties subsequently agreed to an award of
    $475,000 in favour of the respondents, which was higher than the partial
    indemnity quantum identified by them.

[14]

The appellant forcefully argues that neither of
    the respondents is a public interest litigant, stating: FTPC was incorporated
    for the specific purpose of pursuing this litigation; FTPC does not rise above
    being an interloper or busybody; it has spread misinformation on MPGC online,
    casting aspersions on this court and its decision with a view to gaining
    control of MPGCs Board; FTPCs post-hearing conduct undermines its assertion
    of public interest status; MPGC is not a governmental body; the issues related
    to historical legislation arose out of a personal concern regarding the
    cemetery in FTPC members neighbourhood; and the issues did not need to be
    litigated.

[15]

As for Ms. Wong-Tam, the appellant submits that
    she entered the litigation to provide standing to FTPC and did so in her
    personal capacity, well aware of her potential exposure for costs, as evidenced
    by the fact that FTPC provided her with an indemnity for any adverse costs
    order. Accordingly, she took steps to protect herself from having to pay a
    costs order herself.

[16]

The court advised counsel that it did not intend
    to consider any post-hearing conduct in its determination of costs and it has
    not done so. Quite apart from the issue of relevance, the information, which
    was of a serious and inflammatory nature, was not contained in any affidavit or
    sworn document.

[17]

Ignoring that issue, there is nonetheless
    significant force to some of the appellants arguments.

[18]

In
Sarnia (City) v. River City Vineyard
    Christian Fellowship of Sarnia
, 2015 ONCA 732, 343 O.A.C. 58, this court
    outlined factors to be considered in determining whether an unsuccessful
    litigant should be excused from paying costs because it was acting in the
    public interest. The factors include the nature of the litigants, whether the
    nature of the dispute was in the public interest, whether the litigation had
    any adverse impact on the public interest, and the financial consequences to
    the parties.

[19]

One could readily conclude that the respondents
    are not public interest litigants. Unquestionably, there is an element of
    NIMBYism (not in my back yard) in this litigation, to use Mr. Slaghts
    language, at least insofar as it relates to FTPC. Residents living near MPGC cemeteries
    in Vaughan, Thornhill, Pickering, Richmond Hill, Brampton, and Oshawa did not
    file any affidavits on the application, even though FTPC asserts now that the
    application was to their benefit. Moreover, it is not evident that the
    application would be to their benefit in any event. MPGC is a not-for-profit,
    non-share capital corporation and a statutory trust. The evidence is replete
    with references to the world-class nature of the appellant and its effective
    stewardship of Mount Pleasant Cemetery. Indeed Ms. Wong-Tam in her costs submissions,
    though quoting from evidence of MPGC, nonetheless references the fact that it
    is one of the pre-eminent cemetery companies in North America. Any benefit derived
    from the hearing of the application would be largely symbolic rather than real,
    particularly given that the appellant conceded that it was a statutory trust
    before the application was argued.

[20]

On the other hand, the appellant did not
    initially concede that it was a statutory trust. The application brought by the
    respondents caused the appellant to eventually concede that it was a statutory
    trust, a factor that imports a public element. In addition, applying the
    relevant
Sarnia

factors, the appellant is financially
    well-resourced and readily able to bear the costs burden imposed by the
    litigation. FTPC represents an amalgam of individual residents (although it asserts
    that it was not formed as part of a local ratepayers association that had
    decided to go in a different direction). No evidence on FTPCs ability to pay a
    costs award was filed as part of its costs submissions. But it was incorporated
    by a group of individuals engaged in the expensive process of litigation. In
    addition, even though the PGT never saw the need to bring any court proceedings
    itself, the respondents application resolved differences between the PGT and
    MPGC. In addition, the PGT supported the application, although not the
    respondents request for an investigation. Access to justice would tend to favour
    treating the respondents as public interest litigants although there is no evidence
    of any impecuniosity or inability to meet a sizable costs award. That said, in spite
    of the PGTs involvement, the legal issues raised were particular to MPGC.

[21]

As for Ms. Wong-Tam, she chose to participate as
    an individual and not in her capacity as a city councillor, stating that
    maintaining public assets in the public realm is a matter close to [her] heart,
    something she has worked on as a public spirited resident of Toronto, and
    because there was a statutory requirement for a second person to apply under
    the
Charities Accounting Act
, R.S.O. 1990, c. C.10, s.10(1). Presumably,
    at least some if not many of the individuals involved would be her political
    constituents, but this is not an argument raised by the appellant. However,
    there is no suggestion that Ms. Wong-Tam had any pecuniary interest in the
    application. Having brought and lost her application against MPGC before the
    Environmental Review Tribunal, her long-standing interest in the appellant is
    unquestioned.  Ms. Wong-Tams counsel advises that she did obtain an indemnity
    for legal costs from FTPC.
[2]
An indemnity suggests that reasonable expectations would contemplate the
    possibility of an adverse costs award. However, neither FTPC nor Ms. Wong-Tam
    submitted any information on its scope, its depth, nor the indemnity itself as
    part of the costs submissions until requested by the court to provide a copy
    and any underlying security. FTPCs counsel then advised that there is no
    executed indemnity agreement.  Rather, there is a draft agreement and an oral
    understanding between FTPC and Ms. Wong-Tam. In addition, there is no
    underlying security.

[22]

The application judge found that FTCP and Ms.
    Wong-Tam qualified as public interest litigants for the purposes of standing
    and that they had not acted for their personal benefit but to vindicate an
    important public interest. While another adjudicator might have decided
    differently, we are unable to conclude that the application judge made a
    palpable and overriding error in his public interest determination.

[23]

Accordingly, we are prepared to accept the
    respondents argument that they are both public interest litigants. This does
    not end the matter, however, as such a conclusion does not automatically preclude
    an adverse costs award: see
Little Sisters Book & Art Emporium v.
    Canada (Commissioner of Customs & Revenue Agency)
, 2007 SCC 2, [2007]
    1 S.C.R. 38, at para. 35; Mark M. Orkin,
The Law of Costs
, loose-leaf,
    2nd ed. (Toronto: Thomson Reuters, 1987), at §219.5.2. In our view, the
    respondents status as public interest litigants does not excuse them from all
    costs consequences in the circumstances of this case, but it is a factor to
    consider when addressing quantum:
Yaiguaje v. Chevron Corporation
,
    2018 ONCA 472, 141 O.R. (3d) 1, leave to appeal refd, [2018] S.C.C.A. No. 255,
    at paras. 87-88. Indeed, in a given case it may be an important factor.

Quantum of Costs

[24]

Turning to the appropriate quantum of costs, we
    are to consider what is fair and reasonable for the unsuccessful party to pay in
    the circumstances:
Boucher v. Public Accountants Council for the Province
    of Ontario
(2004), 71 O.R. (3d) 291 (C.A.). Factors that may be considered
    are outlined in Rule 57.01(1) of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg. 194, and include the importance of the issues and complexity of the proceedings,
    and the reasonable expectations of the unsuccessful party.

[25]

Dealing first with costs of the appeal, the
    appellant was wholly successful; success was not divided. The issues were of
    significant importance to the appellant and of some complexity. The costs of
    the parties on appeal were substantially similar and, as such, the respondents
    would reasonably expect to pay $150,000 for the appeal as claimed by the
    appellant.

[26]

As for the costs of the application, it is fair
    to infer that given the quantum of the respondents costs on a partial
    indemnity scale of approximately $400,000 for the underlying application,
[3]
the respondents could and
    should have reasonably expected that the appellants partial indemnity costs to
    respond to the application would be comparable. Furthermore, FTPC was
    incorporated for the purpose of pursuing the litigation. At an early stage in
    the application proceedings, the appellant and FTPC entered an agreement for
    security for costs of $75,000 to be paid by FTPC.

[27]

Lastly, the appellant did not appeal the entire
    judgment, including the standing and statutory trust characterizations.

[28]

Having considered these various factors,
    including the issue of public interest, we are of the view that FTPC should pay
    $150,000 on account of the appeal and cross-appeal, and $200,000 on account of
    the application, both inclusive of disbursements and applicable tax.

[29]

Ms. Wong-Tams role in the litigation can fairly
    be described as secondary to that of FTPC.  However, she should not be relieved
    of responsibility for costs entirely. She has an unexecuted indemnity and an
    understanding from FTPC, albeit a company with litigation as its sole purpose.
    Given her limited involvement, we are restricting her exposure to a modest
    award, relative to the amount claimed, of $10,000 on account of the appeal and
    cross-appeal and making no order as to costs with respect to the application.

[30]

In our view, these are fair and reasonable
    awards in all the circumstances.

S.E. Pepall
    J.A.

M. Tulloch
    J.A.

M.L. Benotto
    J.A.

[1]
The appellant conceded that it was a statutory trust when it filed
    its factum on the application in April 2018.

[2]
Lorraine Tinsley, FTPCs Chair, stated in her cross-examination of
    February 4, 2015, on her affidavit sworn April 6, 2013, that she believed FTPC would
    cover Ms. Wong-Tams costs.

[3]

The parties settled the application costs for an amount of
    $475,000, which exceeded the partial indemnity costs of the respondents.


COURT OF APPEAL FOR ONTARIO

CITATION: Jonas v. Elliott, 2020 ONCA 542

DATE: 20200826

DOCKET: M51705 (C68049)

Pepall J.A. (Motion Judge)

BETWEEN

Richard Edmond Jonas and Anne
    Catherine Jonas

Appellants (Moving Parties)

and

Matthew Elliott and
The
    Kiwanis Community Centre
and the
City of Stratford and Carrie Goudy

Respondents (Responding Parties)

James May, for the moving parties

Robert Smith, for the responding
    parties City of Stratford and Carrie Goudy

Heard and released orally by videoconference:
    August 21, 2020

REASONS FOR DECISION

[1]

The moving parties move for an extension of time to September 4, 2020 to
    perfect their appeal.

[2]

On January 17, 2020, the moving parties action against the respondents
    was dismissed as a result of a summary judgment motion.

[3]

The moving parties served their notice of appeal on February 14 and
    filed it shortly afterwards.

[4]

In March 2020, due to the COVID-19 emergency, limitation and procedural
    time limits were suspended and the moving parties did not perfect their appeal.
    On July 16, 2020, the moving parties received a Notice of Intention to Dismiss Appeal
    for Delay from the Registrar of the Court of Appeal.  The Notice provided that
    the appeal was to be perfected by August 4.

[5]

Due to communication issues arising between co-counsel for the moving
    parties due to challenges associated with COVID-19, limited cellular capacity
    and Wi-Fi, on July 28, counsel sought a short extension from counsel for the
    respondents.  This was refused on August 4 at which point it was too late to
    file the moving parties materials. (Counsel for the respondents was unaware of
    the August 4 deadline in the Registrars Notice.)

[6]

The moving parties wish to challenge the judgment on two bases: the
    motion judges failure to consider the action as a whole in granting what they
    describe as partial summary judgment and in his treatment of foreseeability.

[7]

The moving parties are granted an extension of time to September 4, 2020
    to perfect their appeal.  They clearly formed an intention to appeal within the
    relevant time period; they provided a reasonable explanation for the delay; and
    its length was justified.  There is no prejudice to the respondents other than
    an absence of finality, and the merits of the appeal are arguable.  It is not a
    case where the appeal has so little merit that the court should deny the
    important right to appeal.  See:
Issasi v. Rosenzweig
,
    2011 ONCA 112, at para. 10 and
Duca Community Credit Union
    Limited v. Giovannoli
(2001), 142 O.A.C. 146 (C.A.), at para. 14.

[8]

Under the circumstances and given the challenges presented by the
    COVID-19 pandemic, the justice of this case calls for the granting of the
    requested time extension. See
Mortazavi v. University of Toronto
, 2013
    ONCA 66, at para. 21.

[9]

There was no reasonable basis for the respondents to have opposed this
    motion.  In these circumstances, the respondents shall pay costs to the moving
    parties in the amount of $1000 inclusive of disbursements and applicable tax.

S.E. Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Liu v. Huang, 2020 ONCA 495

DATE: 20200804

DOCKET: C66143

Rouleau, van Rensburg and Roberts
    JJ.A.

BETWEEN

Chong Liu

Applicant

(Respondent)

and

Fang Huang

Respondent

(Appellant)

Gary S. Joseph and Stephen Kirby, for
    the appellant

Toni E. Wharton, for the respondent

Heard: in writing

COSTS ENDORSEMENT

[1]

In our July 10, 2020 reasons for judgment, at
    para. 43, we held that the respondent was entitled to his partial indemnity
    costs of the appeal. The parties were unable to agree on the amount of the appeal
    costs and have electronically submitted brief written argument, including costs
    outlines.

[2]

The respondent seeks his partial indemnity costs
    in the amount of $53,407.33. These costs include almost $6,000 in disbursements
    that were mostly for the cost of reproducing the voluminous record for appeal. The
    appellant submits that the award of costs should not exceed her partial
    indemnity appeal costs in the amount of $18,789.66.

[3]

We start with well-established principle. The
    overarching consideration is that the costs awarded must be fair, reasonable
    and proportionate for the unsuccessful party to pay, having regard to the
    circumstances of the appeal, rather than an amount fixed by the actual costs incurred
    by the successful party:
Boucher v. Public Accountants Council for the
    Province of Ontario
(2004), 71 O.R. (3d) 391, [2004] O.J. No. 2634 (C.A.),
    at paras. 24 to 26.

[4]

The unusual circumstances of this case have led
    to the large amount of costs requested by the respondent. There is no question
    that the amount of time recorded was spent and that the hourly rates claimed by
    respondents counsel are reasonable. Nor are the disbursements challenged. While
    we question the necessity for the number of counsel and staff reflected in the
    dockets of the respondents solicitors of record, we also acknowledge that the preparation
    of this appeal required them to review the voluminous trial record and undertake
    substantial legal research to respond to the myriad issues raised by the
    appellant. This appeal represented the culmination of lengthy, hard-fought
    family law proceedings that gave rise to very important issues for the parties,
    not the least of which was the custody of their young daughter. The respondent
    was entirely successful on appeal.

[5]

Accordingly, the amount of fair, reasonable and
    proportionate appeal costs in these circumstances that the appellant is
    required to pay to the respondent is $35,000, inclusive of disbursements and
    applicable taxes.

Paul
    Rouleau J.A.

K.
    van Rensburg J.A.

L.B.
    Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Leitch v. Novac, 2020 ONCA 497

DATE: 20200804

DOCKET: C66681

Lauwers, Hourigan and Thorburn
    JJ.A.

BETWEEN

Jennifer Ann Leitch

Applicant (Appellant)

and

Anthony Charles James Novac,
    Michael Novac, Nelly Novac, Sonco Group Inc., The Novac 2011 Family Trust, The
    Novac Family Trust (2013)
, John McClure and David
    Tam

Respondents (
Respondents
)

Linda Rothstein, Dan Rosenbluth, Ilana
    Zylberman Dembo, Sheila Gibb and Stephanie Romano, for the appellant

Avra Rosen and Kelly Eckert, for the
    respondent, Anthony Novac

Bryan Smith, Lindsey Love-Forester and
    Cynthia Kuehl, for the respondents, Michael Novac, Nelly Novac, Sonco Group
    Inc., The Novac 2011 Family Trust and The Novac Family Trust (2013)

Heard: In writing

On appeal from the summary judgment
    order of Justice Cory A. Gilmore of the Superior Court of Justice, dated
    January 31, 2019, reported at 2019 ONSC 794, the costs award dated March 7,
    2019, reported at 2019 ONSC 1534, and the order for security for costs and
    preservation of assets dated April 30, 2019, reported at 2019 ONSC 1541.

ADDENDUM

[1]

On April 17, 2020, this court released reasons
    granting the appeal of the summary judgment order, directing that the case
    proceed to trial, and reserving the costs below to the trial judge. An issue
    has arisen between the parties in settling the order of this court regarding the
    costs below.

[2]

The dispute centres around para. 2 of the motion
    judges costs order dated March 22, 2019
,
which provides:

The Applicant, Jennifer Ann Leitch, shall [
sic
]
    to the Respondent, Anthony Novac, costs, inclusive of HST, disbursements and
    fees, of $300,000 for the within motions plus $40,000 for the November 2017
    motion for a total of $340,000. Of the $300,000 owed to the Respondent Anthony
    Novac for the within motions, 50% (or $150,000) shall be enforceable as legal
    fees related to the payment/collection of spousal and child support and shall
    be enforceable as such.

[3]

The respondents submit that our reasons should
    be interpreted to mean that the costs order below should be set aside except
    for the $150,000 awarded to Anthony Novac on his motion to change his support
    obligations. They note that that the appellant was denied leave to appeal the
    support order by the Divisional Court and that the appellant also sought to
    appeal the costs of the support motion. Therefore, they say that the issue of
    the costs of the support motion was not before this court.

[4]

The appellant argues that the motion judge
    awarded a global figure of $300,000 in costs payable by the appellant to Anthony
    Novac and did not award a discrete amount for the costs of the support motion.
    She submits that para. 2 of the costs order speaks to the enforcement method,
    not allocation.  Further, she observes that she appealed to this court from the
    motion judges entire costs award and that the summary judgment motion costs
    are closely intertwined with the costs of the support motion.

[5]

We agree with the appellant.  The motion judge ordered
    the appellant to pay Anthony Novac a global amount of $300,000 in costs
    relating to all the motions before her.  The issues are intertwined, and this
    court set aside the entire costs award.

[6]

The order of this court shall reflect our
    reasons that the costs below in their entirety are reserved to the trial judge.

P. Lauwers J.A.

C.W. Hourigan J.A.

Thorburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Martin v. Mailhot, 2020 ONCA 517

DATE: 20200817

DOCKET: C67228

Tulloch, Huscroft and Harvison
    Young JJ.A.

BETWEEN

Caroline Martin and Joey Moskwa

Applicants (Respondents)

and

Danielle Mailhot

Respondent (Appellant)

Benoit
    Richer, for the appellant

Patrick R.
    Simon, for the respondents

Heard: in writing

On appeal from
    judgment of Justice Robert Pelletier of the Superior Court of Justice, dated
    June 20, 2019.

COSTS ENDORSEMENT

[1]

This costs endorsement follows the ruling in
    this matter, dated July 24, 2020, in which the appellant was successful:
Martin
    v. Mailhot
, 2020 ONCA 480. The parties were invited to make written
    submissions on costs, and we have now received and reviewed those submissions.

[2]

The appellant submits that costs should be
    awarded in her favour on a partial indemnity basis, in the amount of $12,026.61,
    inclusive of disbursements and HST, as set out in her bill of costs.

[3]

The respondents also provided a bill of costs.
    Had they been successful in this appeal, they would have sought $9,864.13,
    inclusive of disbursements and HST, on a partial indemnity basis.

[4]

The respondents, while acknowledging that the
    general rule is that the successful party is entitled to costs, submit that the
    appellant is not entitled to her costs in this case for a number of reasons.

[5]

Notwithstanding the respondents submissions, we
    see no reason to depart from the general rule. As such, costs of the appeal are
    hereby payable to the appellant, fixed on a partial indemnity basis, in the
    amount of $10,000, inclusive of disbursements and HST.

[6]

Costs of the application were not determined. The
    application judge provided an endorsement, which indicates that costs for the
    application, minus the costs associated with the application, are best
    determined by: (a) the court hearing the eventual trial, if one is held, or (b)
    by the court hearing the application if the matter is abandoned or terminated
    by a successful appeal. In light of the appellants success, we hereby remit
    the costs below to the application judge for determination.

M.
    Tulloch J.A.

Grant
    Huscroft J.A.

A.
    Harvison Young J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: McEwen (Re), 2020 ONCA 511

DATE: 20200817

DOCKET: M51208 (C67520)

Gillese, Brown and Paciocco
    JJ.A.

In the Matter of the Bankruptcy
    of Robert Morris Jr. McEwen and Caroline Elizabeth McEwen, of the Town of
    Perth, in the County of Lanark, in the Province of Ontario

BETWEEN

Barbara Lynn Carroll by Her
    Litigation Guardian Shannon Luknowsky, Shannon Luknowsky, Jeffrey Carroll and
    Shannon Luknowsky as Executor for the Estate of Lorne Carroll

Plaintiffs (Respondents/Responding Parties)

and

Robert McEwen and Caroline
    McEwen

Respondents (Respondents)

and

Traders General Insurance Company
, improperly described in Superior Court of Justice Court File
    Number
CV-17-00073740-0000 as Aviva Canada Inc.

Person Affected by an
    Order

Obtained
    on Motion Without Notice

(Appellant/Moving Party)

Harvey Chaiton and Alan L. Rachlin, for
    the moving party, Traders General Insurance Company

Joseph Y. Obagi, for the responding
    parties, Barbara Lynn Carroll et al.

Heard: in writing

BROWN J.A.:

I.        OVERVIEW

[1]

Traders General Insurance Company (Traders)
    moves, pursuant to s. 7(5) of the
Courts of Justice Act
, R.S.O. 1990,
    c. C.43 (
CJA
), for an order setting aside the order of a single
    judge of this court (the Chambers Judge) that denied
Traders
leave to appeal, under s. 193(e) of the
Bankruptcy and
    Insolvency Act
, R.S.C. 1985, c. B-3 (
BIA
), from the September
    26, 2019 order of Kershman J. (the 2019 Review Order). Traders motion raises
    two issues:

i.

In the circumstances of this case, does this
    panel have the jurisdiction to review the decision of the Chambers Judge that
    refused leave to appeal sought under
BIA

s. 193(e)?

ii.

If we have jurisdiction, should we grant Traders
    leave to appeal?

[2]

For the reasons set out below, I conclude that in the circumstances of
    this case the panel has jurisdiction to consider Traders
CJA
s. 7(5)
    motion. I would set aside the order of the Chambers Judge and grant Traders
    leave to appeal the 2019 Review Order.

[3]

Although the issues on this motion are narrow, the events that led up to
    the 2019 Review Order require some detail to explain.

II.       EVENTS LEADING UP TO THE TRIAL JUDGMENT

A.      The Carroll Plaintiffs MVA Action

[4]

On March 28, 2009, the responding party, Barbara Carroll, a pedestrian,
    was struck by a car driven by Robert McEwen and owned by Caroline McEwen. She
    suffered serious injuries.

[5]

On March 25, 2011, Ms. Carroll and the other plaintiffs (collectively
    the Carroll Plaintiffs) commenced an action in Ottawa against Mr. and Mrs.
    McEwen (the MVA Action). They also named Aviva Canada Inc. (Aviva) and
    Pilot Insurance Company (Pilot) as defendants on the basis that one or both
    of them had issued motor vehicle liability policies that provided the Carroll
    Plaintiffs with additional coverage with respect to inadequately insured
    motorists under an OPCF Family Protection Coverage 44R endorsement.

[6]

In fact, Pilot, not Aviva, insured the Carroll Plaintiffs. As well, it
    was determined that Traders had insured the McEwens, not Aviva, which is a
    corporate holding company that operates Traders.

B.      The McEwens bankruptcy

[7]

On September 15, 2011, the McEwens made an assignment into bankruptcy
    and Doyle Salewski Inc. was appointed trustee of both their estates (the
    Trustee). The McEwens Statement of Affairs listed the realizable value of
    their unencumbered assets as $6,450.00, against which there were liabilities
    owed to unsecured creditors of $456,964.83. The lawyers for the Carroll
    Plaintiffs were identified as an unsecured creditor in the amount of $375,000.00.

[8]

On June 16, 2012, the McEwens were discharged from their bankruptcies.
    The Final Dividend Sheet showed dividends paid to creditors totaling $2,985.85.
    Neither the Carroll Plaintiffs nor their lawyers were listed as creditors. Subsequently,
    the Trustee was also discharged.

C.      The continuation of the MVA Action and the trial

[9]

On October 12, 2012, the Carroll Plaintiffs obtained an order from
    Master Roger that: (i) declared the stays contained in
BIA
ss. 69 to
    69.4 no longer operated with respect to the MVA Action
to
    have the proceeds of any liability insurance policy applied in or toward the
    satisfaction of the claim
 (emphasis added); (ii) set aside the
    automatic stay of the MVA Action resulting from the assignments in bankruptcy;
    and (iii) granted the Carroll Plaintiffs leave to continue the MVA Action
    against the McEwens.

[10]

The
    MVA Action proceeded to trial on September 14, 2015 before a jury and McLean J.
    In October 2015, the jury rendered a verdict awarding damages to the Carroll
    Plaintiffs.

[11]

Prior
    to the start of the trial, the parties exchanged some offers to settle. Copies
    of the offers were not in the record on this motion. However, McLean J.
    described some of the offers in post-verdict reasons that he issued on May 19,
    2016:
Carroll v. McEwen
, 2016 ONSC 2075, 37
    C.B.R. (6th) 70, at paras. 26-29. He identified two joint offers made by
    Traders and Pilot on August 27, 2015 and on September 11, 2015.

[12]

McLean
    J. noted that the Carroll Plaintiffs had made various offers, but they
    stipulated that there would be no assignment of statutory accident benefits:
    para. 28. According to the Trustees factum filed on the motion before Kershman
    J. to set aside the
BIA
s. 38 Order, [o]n or about September 9, 2015,
    the [Carroll] Plaintiffs offered to settle the [MVA] Action against the
    McEwens, within the policy limits of the McEwens policy, however, Traders
    refused to accept their offer. This is the only information before this court
    of an offer made by the Carroll Plaintiffs to settle the MVA Action within the
    limits of the McEwens policy with Traders.

[13]

On
    September 23, 2015, the Trustee  which had been discharged several years
    before in 2012  sent the McEwens trial counsel and an Aviva claims analyst a
    communication that stated, in part:

We are advised that the claimants Barbara Carroll and her
    family have offered to settle this [MVA] Action against Robert and Caroline
    McEwen for the limits of their automobile liability policy, namely $1 million
    dollars, plus costs and that Aviva has failed to accept that offer and has
    proceeded to trial.

This course of conduct places Avivas financial interest in
    priority to that of its insureds  Robert and Caroline McEwen, and accordingly
    is bad faith conduct. Aviva has a duty to settle this lawsuit within the limits
    of the [McEwen] policy and it has failed to do so.

This is notice to you that in the event a Judgment is granted
    against Robert and Caroline McEwen for any sum greater than the limits of the
    liability policy, we hold Aviva fully liable for the excess amount.

It is unclear whether the Aviva claims analyst in fact
    received a copy of the Trustees communication.

III.      FINALIZING THE TRIAL JUDGMENT

A.      The trial judges post-verdict reasons

[14]

In
    March 2016, the parties made submissions to the trial judge on several issues,
    one of which was the effect of the McEwens bankruptcy on the terms of the
    formal judgment to be issued. McLean J. addressed the issue at para. 16 of his
    reasons dated May 19, 2016:

It is the clear effect of the Bankruptcy Order that the McEwens
    exposure is limited to their policy limits.
It is clear to this Court therefore that the judgment of the jury
    against the McEwens must be restricted to the amount of their liability and the
    jury verdict will be subject to the proviso that it is limited in its
    enforceability to the amount of insurance otherwise payable
. [Emphasis
    added.]

B.      Settling the trial judgment

[15]

Following
    the release of the May 2016 reasons, the parties were unable to settle the
    terms of judgment. As a result, another hearing was held before McLean J. on
    September 19, 2016 to settle the judgment. The Carroll Plaintiffs proposed that
    two separate judgments should be issued, the second of which would deal with
    the issues of the assignment of statutory accident benefits (SABs) and the
    effect of the McEwens bankruptcies.

[16]

Para.
    1 of the second proposed separate judgment contained language that attempted to
    reflect what McLean J. had stated at para. 16 of his reasons reproduced above.
    Para. 2 would make Pilot and Aviva jointly liable for $1 million of the
    judgment pursuant to the terms of the OPCF 44R Family Protection Coverage endorsement.
    (The Judgment as issued limited this liability to Pilot.) The Carroll
    Plaintiffs also sought to include in the judgment the following para. 3:

This Court orders that nothing in paragraphs 1 and 2 operates
    so as to prohibit the plaintiffs from pursuing any remedy otherwise available
    to them under the
Bankruptcy and Solvency Act
as against the bankruptcy of Robert McEwen and Caroline McEwen. For greater
    certainty, the personal liability of Robert and Caroline, for any of the claims
    adjudicated herein, has been extinguished and only claims provable in their
    respective bankruptcies shall survive.

[17]

During
    the discussion between the trial judge and plaintiffs counsel about the need
    for the additional language, McLean J. confirmed with counsel that the McEwens
    were bankrupt and any liability of the McEwens is limited to their insurance
    limits, as he had held in para. 16 of his May 2016 reasons. McLean J. went on
    to state that I cant make an order more than that. At a later point, McLean
    J. stated:

I can tell you right now, the only order will be is their personal
    liability will be limited to the policy limit, period; and Im not gonna say
    anything more because Im not gonna get into a debate with the trustee over
    what should or shouldnt have been filed, thats up to the trustee. Because
    theres a procedural order [of Master Roger] that allowed you to proceed,
    right? And Im not gonna get  uh, thats not before me and its not being
    litigated. So the only thing thats gonna go in the order is the fact that
    their personal liability is limited to x dollars period.

[18]

In
    the result, McLean J. declined to include in the final judgment the additional
    language sought by the Carroll Plaintiffs.

[19]

A judgment
    dated October 30, 2015 was issued that stated the McEwens were liable to (i)
    Barbara Carroll for damages of $2.418 million, consisting of $186,000 in
    general damages and $2.232 million in future care costs; (ii) to the other
    Carroll Plaintiffs for damages totaling $102,132.60; and (iii) for pre-judgment
    interest on all amounts (Judgment). Pilot was adjudged liable to the Carroll
    Plaintiffs for $1 million. Para. 3 of the Judgment stated:

THIS COURT ORDERS AND ADJUDGES that the judgment against the
    Defendants Robert McEwen and Caroline McEwen,
personally
, is limited to the limits of their
    insurance policy with Aviva Insurance Company Canada in the amount of $1,000,000.00.
    [Emphasis added.]

C.      The appeal

[20]

The
    Carroll Plaintiffs delivered a notice of appeal dated June 16, 2016 asserting
    that McLean J. made various errors in his disposition of post-verdict issues
    and costs. This court dismissed the appeal but varied the SABs conditional
    assignment order:
Carroll v. McEwen
,

2018
    ONCA 902, 143 O.R. (3d) 641.

IV.     THE CARROLL PLAINTIFFS
BIA
s. 38 MOTION

[21]

As
    mentioned, the McEwens were discharged from bankruptcy on June 16, 2012 and the
    Trustee sometime thereafter.

[22]

In
    the summer of 2016, prior to the issuance of the formal Judgment, the Carroll Plaintiffs
    counsel wrote to the Trustee asking to reopen the bankruptcy in order to file a
    proof of claim for the portion of the Judgment not satisfied by the insurance
    policies. In the ensuing correspondence, the Trustee advised that: (i) it could
    complete the administration of the McEwens estates under
BIA
s.
    41(10) without reopening them;
[1]
(ii) the Carroll Plaintiffs could file a proof of claim; (iii) the estates were
    without funds; and (iv) the Trustee would consent to the Carroll Plaintiffs
    availing themselves of the provisions of
BIA
s. 38 to take action in
    their own name.

[23]

Section
    38 of the
BIA
provides, in part, as follows:

38(1) Where a creditor requests the trustee to take
    any proceeding that in his opinion would be for the benefit of the estate of a
    bankrupt and the trustee refuses or neglects to take the proceeding, the
    creditor may obtain from the court an order authorizing him to take the
    proceeding in his own name and at his own expense and risk, on notice being
    given the other creditors of the contemplated proceeding, and on such other
    terms and conditions as the court may direct.

(2) On an order under subsection (1) being made, the
    trustee shall assign and transfer to the creditor all his right, title and
    interest in the chose in action or subject-matter of the proceeding, including
    any document in support thereof.

(3) Any benefit derived from a proceeding taken
    pursuant to subsection (1), to the extent of his claim and the costs, belongs
    exclusively to the creditor instituting the proceeding, and the surplus, if
    any, belongs to the estate.

[24]

On
    October 11, 2016, Ms. Carroll filed a proof of claim in the McEwens
    bankruptcies for an unsecured claim stating that at the date of bankruptcy
    the McEwens were indebted to her in the sum of $624,349.01, which represented
    the shortfall between the amount of the Judgment and the amounts of the
    insurance policies available to satisfy it.
[2]

[25]

The
    Carroll Plaintiffs then moved under
BIA
s. 38 for an order that they
    be authorized to commence and prosecute proceedings in their own name and at
    their own expense and risk for the purpose of bringing an action against
    Aviva/Traders, the insurer for the bankrupts Robert McEwen and Caroline McEwen,
    for breach of the insurers duty of good faith by failing to settle the MVA
    Action within the policy limit of the McEwens insurance policy. Notice of the
    motion was not given to Aviva/Traders.

[26]

On
    December 21, 2016, Kershman J. granted the order (the
BIA
s. 38 Order).
    The next day the Trustee assigned to the Carroll Plaintiffs all of its right,
    title and interest to and in the subject matter of the proposed action (the
    Assignment).

V.      THE BAD FAITH ACTION

[27]

On
    August 25, 2017, the Carroll Plaintiffs commenced an action against Traders
    seeking damages of $624,349.01 for breach of the duty of good faith in Traders
    dealings with their insureds, the McEwens, and their Trustee, together with
    punitive and exemplary damages of $1 million (the Bad Faith Action).
[3]

[28]

The
    Bad Faith Action alleges that Traders breached its duty of good faith in two
    ways. First, Traders owed the McEwens a duty of good faith to settle the MVA
    Action within the insurance policy limit of $1,000,000 as soon as such an
    opportunity arose or as expeditiously as possible. However, Traders had
    refused to settle the action as against the McEwens notwithstanding receiving
    an offer to settle the action against the McEwens within the policy limits.
    The statement of claim does not specify the dates of the Carroll Plaintiffs
    settlement offers that Traders failed to accept. As mentioned, the only such
    offer of the Carroll Plaintiffs referred to in the record was dated September
    9, 2015, just prior to the start of the trial.

[29]

The
    second allegation complained that Traders
adjusted the claims
    of the McEwens jointly with claims against Traders as OPCF 44R insurer of
    Barbara Carroll, contrary to its obligations of good faith to the McEwens.
However,
    as mentioned, Pilot, not Aviva/Traders, insured the Carroll Plaintiffs with
    OPCF 44R coverage.

VI.     TRADERS MOTION TO REVIEW THE
BIA
s. 38 ORDER

[30]

Following
    service of the statement of claim in the Bad Faith Action on February 21, 2018,
    Traders moved before Kershman J. for orders: (i) reversing the Trustees decision
    to accept the Carroll Plaintiffs proof of claim; (ii) setting aside the
BIA
s. 38 Order; and (iii) setting aside the Trustees Assignment.

[31]

Traders
    advanced three main sets of arguments, all of which the motion judge rejected.
    I shall set out each argument, followed by the motion judges treatment of it.

A.      Traders standing to seek a review of the
BIA
s. 38 Order

[32]

Traders
    argued that the Carroll Plaintiffs had acted improperly in obtaining the
BIA
s. 38 Order by failing to give Traders notice of the motion.

[33]

The
    motion judge held that as a general rule a proposed defendant is not entitled
    to receive notice of a
BIA
s. 38 motion or to seek a review of the
    order:
Re McEwen
, 2019 ONSC 5593, 97 C.C.L.I.
    (5th) 310, at paras. 36-38. However, the motion judge recognized that
    exceptions existed to that general rule. One exception is that a proposed
    defendant may seek to review a s. 38 order where the person who obtained the s.
    38 order engaged in certain misconduct, such as abuse of process,
    non-disclosure, procedural irregularities, fraud or misrepresentation to the
    court:
Shaw Estate (Trustee of) v. Nicol Island Development Inc.
, 2009
    ONCA 276, 248 O.A.C. 35, at para. 48. Traders argued that the Carroll
    Plaintiffs failed to disclose on the s. 38 motion the scope of the restriction
    on the McEwens liability to them contained in para. 3 of the Judgment and
    other material matters:
Re McEwen
, at para.
    52. Kershman J. found there was appropriate disclosure by the Carroll
    Plaintiffs to the extent required by the
BIA
: at para. 88.

[34]

Traders
    also contended that it had the status to seek a review of the
BIA
s.
    38 Order as it was an aggrieved person within the meaning of
BIA
s.
    37, which states:

37 Where the bankrupt or any of the creditors or
any other person is aggrieved by any act or
    decision of the trustee
, he may apply to the court and the court
    may confirm, reverse or modify the act or decision complained of and make such
    order in the premises as it thinks just. [Emphasis added.]

[35]

The
    motion judge held that Traders lacked standing to review the order under
BIA
s. 37 because it had not demonstrated how it was a person aggrieved by the
    Trustees decisions to accept the Carroll Plaintiffs proof of claim, consent
    to their s. 38 motion, and make the Assignment:
Re

McEwen
, at para. 42. Even
    if Traders was an aggrieved person, the motion judge stated that he would
    exercise his residual discretion under
BIA
s.
    37 to refuse an application against a trustee because the Trustees decisions
    were reasonable in the circumstances: para. 45.

[36]

The
    motion judge recognized that a potential defendant might have standing in
    respect of a
BIA
s. 38 motion when there is a discrete issue of the
    law that, if decided in favour of the potential defendant, might avoid the need
    to defend a lawsuit that should never have been commenced: para. 84. However,
    the motion judge did not deal with that argument in his reasons.

B.      The Carroll Plaintiffs status as a creditor under
BIA
s. 38

[37]

Traders
    contended that the Trustee should not have accepted the Carroll Plaintiffs
    proof of claim because it was filed in violation of para. 3 of the Judgment
    that limited the McEwens personal liability to the $1 million policy limit. As
    a result of that restriction, the Carroll Plaintiffs were not creditors of the
    bankrupts for the $624,349.01 portion of the Judgment that was in excess of the
    policy limit. Consequently, the Carroll Plaintiffs lacked the status to file a
    proof of claim or seek a s. 38 order.

[38]

In
    addition, Traders argued that the actions of the Trustee  who had been
    previously discharged  in admitting the proof of claim, consenting to the
BIA

s. 38 order, and assigning
    the claim were not authorized by
BIA
s. 41(10), which enables a
    discharged trustee to perform such duties as may be incidental to the full
    administration of the estate.

[39]

The
    motion judge rejected Traders argument that the Judgment limited the McEwens
    liability to the limits of their insurance policy and, as a result, the Trustee
    was precluded from accepting their proof of claim for the excess amount of
    $624,349.01. The motion judge reasoned as follows, at paras. 96-97:

The Trustee correctly notes that the language
    of McLean, J.s Judgement does not preclude a proof of claim in bankruptcy for
    the amount owed to the [Carroll] Plaintiffs by the Bankrupts estates, and that
    this amount forms the basis for the [Carroll] Plaintiffs continued creditor
    status. To reiterate, it appears that McLean, J.s Judgement sought only to
    ensure that the personal liability assigned to the Bankrupts was not one that
    survived bankruptcy.

The Court therefore finds that the Proof of
    Claim does not violate the orders of McLean J.s Judgement.

C.      The bad faith claim was not property of the bankrupts

[40]

Traders
    submitted that any chose in action for a bad faith claim was not property of
    the McEwens on their date of bankruptcy and was not acquired or did not devolve
    on the McEwens before their discharges from bankruptcy:
BIA
s.
    67(1)(c). Relying on the decision of this court in
Dundas v. Zurich Canada
,
    2012 ONCA 181, 109 O.R. (3d) 521, Traders argued that any cause of action
    against it for an alleged breach of its duty of good faith to its insured, the
    McEwens, could only arise when the liability of the McEwens had been determined
    by judgment after trial. Only at that point could one determine whether the
    McEwens were liable to the Carroll Plaintiffs for any amount in excess of the
    policy limits.

[41]

In
    the present case, the Judgment was dated October 30, 2015, over three years
    after the McEwens had been discharged from bankruptcy on June 18, 2012. Traders
    submitted that therefore the bad faith claim was not a chose in action that was
    property of the bankrupt and, as a result, the Trustee had no interest in a
    bad faith claim that could be assigned to the Carroll Plaintiffs under
BIA
s. 38(2).

[42]

The
    motion judge rejected this argument. He concluded that the bad faith claim was
    property that had devolved to the bankrupts estates and therefore was assignable
    by the Trustee to the Carroll Plaintiffs. The motion judge reasoned as follows:

i.

A trustees discharge is not an automatic impediment to the assignment
    of property and some flexibility should be allowed in terms of when assets
    cease to vest in a trustee after discharge: at para. 122;

ii.

Realizable choses in action that the trustee was unable
    to deal with during the administration of the bankrupts estate do not
    necessarily automatically return to the discharged bankrupt; a trustee may
    sometimes access them by virtue of the powers conferred under
BIA
s. 41(10): at para. 124;

iii.

This implied that the bad faith claim was property of
    the bankrupt that devolved before discharge: at para. 126;

iv.

Claims for breach of contract are assignable choses in action. Claims
    against third parties for breach of contract need not be immediately pursuable
    for the claim to vest as property in a bankrupts estate: at para. 127; and

v.

Consequently, the bad faith claim did not have to crystalize through a
    judgment as to underlying liability before becoming vested in the Trustee: at para.
    128.

VII.    THE MOTION TO THE CHAMBERS JUDGE FOR LEAVE TO APPEAL

[43]

Traders
    appealed the 2019 Review Order by notice of appeal dated October 2, 2019.
    Shortly thereafter, it filed a motion seeking leave to appeal the 2019 Review
    Order pursuant to
BIA
s. 193(e).

[44]

The
    Chambers Judge rejected Traders submission that it had a right to appeal under
BIA
s. 193(a). He held that the point at issue did not involve future
    rights. On this motion to review, Traders does not challenge that conclusion.

[45]

Instead,
    Traders takes issue with the decision of the Chambers Judge to refuse leave to
    appeal pursuant to
BIA
s. 193(e). The entirety of the Chambers Judges
    reasons for denying leave to appeal are as follows:

The argument for leave to appeal must fail. The motion judge
    found that the moving party has no standing to attack the proof of claim or the
    s. 38 order.

On this motion, the moving party advances the new argument that
    there was a procedural irregularity per s. 187(5). I am not persuaded that any
    procedural irregularity has been identified. The motion judge resolved the
    motion based on a substantive finding that the claim is breach of good faith,
    and that this claim vests in the trustee. The attempt to recharacterize this
    as a procedural matter fails.

Accordingly, I conclude the motion for leave fails on an
    assessment of the merits, even without regard to the further criterion that no
    issues of importance have been identified and no public policy arguments
    support granting leave.

VIII.   THE ISSUES ON THIS
CJA
s. 7(5) MOTION TO REVIEW

[46]

This
    motion to review raises two main issues.

[47]

First,
    relying on the decision of this court in
Business Development Bank of
    Canada v. Aventura II Properties Inc.
, 2016 ONCA 408, 132 O.R. (3d) 159, the
    Carroll Plaintiffs submit that under
CJA
s. 7(5) this panel has no
    jurisdiction to review the decision of the Chambers Judge that denied leave to
    appeal under
BIA
s. 193(e). On its part, Traders submits that the principle
    set out in the
Aventura II
decision is not absolute and, in
    exceptional circumstances, a panel can review and set aside an order denying
    leave to appeal. Such exceptional circumstances include where the judge mistakenly
    declines jurisdiction by acting on a wrong principle or by applying the wrong
    test such that the judge did not reach a decision on the merits of the motion. The
    Carroll Plaintiffs contend that any such exception has no application to the
    circumstances of this case.

[48]

Second,
    if this panel decides that it can consider Traders motion to review, Traders
    submits that it meets the test for leave to appeal set out in
Business
    Development Bank of Canada v. Pine Tree Resorts Inc.
, 2013 ONCA 282, 115
    O.R. (3d) 617. The Carroll Plaintiffs submit that Traders has not met the test.

IX.     FIRST ISSUE: DOES THIS PANEL HAVE THE JURISDICTION TO
    CONSIDER TRADERS MOTION?

A.      The provisions of the
BIA

[49]

Under
BIA
s. 183(2)
, the
    Court of Appeal for Ontario is invested with power and jurisdiction at law and
    in equity,
according to [its] ordinary procedures, except
    as varied by this Act or the General Rules
, to hear and determine
    appeals from the courts vested with original jurisdiction under this Act
    (emphasis added).

[50]

Under
BIA
s. 193(e), motions for leave to appeal are to be heard by a single
    judge of the appellate court. The
Bankruptcy and Insolvency General Rules
,
    C.R.C., c. 368 do not contain any specific procedure for reviewing the decision
    of a single judge of a provincial appellate court that denies leave to appeal
    under
BIA
s. 193(e). However, r. 3, following the language of
BIA
s. 183(2), provides that: In cases not provided for in the Act or these Rules,
    the courts shall apply, within their respective jurisdictions,
their ordinary procedure
to the extent that that
    procedure is not inconsistent with the Act or these Rules (emphasis added).

[51]

What
    is the ordinary procedure of this court? Section 7(5) of the
CJA

states that [a] panel of the Court of
    Appeal may, on motion, set aside or vary the decision of a judge who hears and
    determines a motion. Given the absence of a specific provision in the
BIA
or
General Rules
regarding the ability of an appellate court panel to
    review a decision of a single judge
made under
BIA
s. 193(e)
, the combined language of
BIA
s. 183(2) and
General
    Rules
r. 3 would suggest that a party could seek a
CJA
s. 7(5)
    panel review of a decision of a single judge made under
BIA
s. 193(e)
    in accordance with its ordinary procedure.

B.      The decision in
Aventura II

[52]

The
    parties point out that the decision of this court in
Aventura
    II
would suggest the contrary. As I will explain,
    I have strong reservations about the reasons offered in
Aventura II
in
    support of its conclusion that a panel of this court lacks the jurisdiction to
    review a decision of a single judge of this court denying leave to appeal under
BIA
s. 193(e).

[53]

Aventura II
involved a motion under
CJA
s. 7(5) to review a decision of a single judge of the Court of Appeal that, in
    part, had denied leave to appeal under
BIA
s. 193(e). The panel
    concluded that it did not have jurisdiction to review the order: at para. 3. In
    reaching that conclusion, the panel adopted and applied the two reasons that
    led this court in a criminal appeal,
R. v. Scherba
(2001)
, 54 O.R. (3d) 555 (C.A.), to
    conclude that there is no right to review a decision of a single judge granting
    or denying leave to appeal a summary conviction under s. 839(1) of the
Criminal
    Code
, R.S.C. 1985, c. C-46
.

[54]

The first reason given by the court in
Scherba
was that the
Criminal Appeal Rules
, S.I./93-169
did not provide for such an appeal. The court in
Scherba
held that the
Criminal Appeal Rules
were not competent to incorporate a right of
    appeal or review by reference through the
Rules of Civil Procedure
because a right of appeal is a substantive right that does not come within any
    of the matters in respect of which
Criminal Code
s. 482(2) authorizes
    a court to make rules: at para. 11.
The panel in
Aventura II
adopted this analysis, stating that the
BIA
also does not provide for
    such an appeal.

[55]

However,
    the provisions of the
BIA
differ from those in the
Criminal Code
and
Criminal Appeal Rules
. As mentioned,
BIA
s. 183(2)
    expressly provides that provincial appellate courts are invested with power and
    jurisdiction
according to their ordinary procedures
,
    except as varied by this Act or the General Rules, to hear and determine
    appeals (emphasis added). As noted,
General Rules
r. 3 is to the same effect. A panel review of the decision of a single judge is
    part of the ordinary procedure of this court.

[56]

The second reason given by the court in
Scherba
concerned
    the provisions of the
CJA
regarding the composition of this court on
    motions for leave to appeal.
CJA
s. 7(2) sets out the general rule:
    [a] motion in the Court of Appeal  shall be heard and determined by one
    judge. However,
CJA
s. 7(3) provides that this general rule does not
    apply to a motion for leave to appeal, which is to be heard by a panel of three
    judges:
CJA
s. 7(1). In
Scherba
, this court stated, at para.
    13:

As s. 7(3) expressly excludes a motion for leave to appeal from
    a motion over which a single judge is given jurisdiction by the operation of
    this section, s. 7(5) does not create jurisdiction to set aside or vary the
    decision of a single judge denying leave to appeal.

The panel in
Aventura II
concluded that the
Scherba
analysis applied equally to
BIA
leave
    to appeal motions.

[57]

However, the authority for a single judge to hear a motion for leave
    to appeal an order made under the
BIA
does not flow from
CJA
s. 7(2), but from
BIA
s. 193(e). That section specifically provides
    that where an appeal does not lie as of right under
BIA
ss. 193(a)-(d),
    an appeal lies to the Court of Appeal by leave of a judge of the Court of
    Appeal.
BIA
s. 193(e) specifically varies the requirements set out in
CJA
ss. 7(2) and (3) regarding the composition of the court hearing a
    motion for leave to appeal:
BIA
s. 183(2);
General Rules
r.
    3.
Under the doctrine of federal paramountcy, the conflict between
BIA
s. 193(e)  a single judge hears a leave motion  and
CJA
s. 7(3)  a
    panel hears a leave motion  is resolved in favour of the federal provision:
Alberta
    (Attorney General) v. Moloney
, 2015 SCC 51, [2015] 3 S.C.R. 327, at paras.
    18-19;
Business Development Bank of Canada v. Astoria
    Organic Matters Ltd.
, 2019 ONCA 269, 69 C.B.R. (6
th
) 13,
    at paras. 67-68.

[58]

I
    would note that in adopting the analysis in
Scherba
, the
Aventura
    II
panel did not refer to
BIA
s. 183(2) or
General Rules
r. 3
.

[59]

I certainly understand that good policy reasons exist to limit the
    circumstances in which a panel of this court can review the decision of a
    single chambers judge denying leave to appeal. It has been
suggested
    that having a single judge weed out unnecessary or frivolous requests for leave
    to appeal without subjecting those decisions to further review by a panel
    economizes judicial resources. Otherwise, the merits of a matter could be
    considered three times by judges of the same court: on the motion for leave; on
    a panel review of that motion; and, should the panel grant leave, by a panel on
    the appeal proper:
Millcraft Investment Corp. v. Ontario (Regional
    Assessment Commissioner, Region No. 3)
(2000), 46 O.R. (3d) 685 (Div.
    Ct.), at para. 17. Of course, against those considerations must be balanced the
    need to do justice in each case.

[60]

But,
    the decision in
Aventura II
did not turn on the degree of scrutiny or
    deference that should be accorded to a decision of a single chambers judge.
    Instead, the panel held that it lacked the jurisdiction to review the decision
    of a single chambers judge that refused leave to appeal under
BIA
s.
    193(e). As I have outlined in paras. 54 to 58 above, I have serious
    reservations about that conclusion, especially given the panels lack of
    consideration of the effect of
BIA
s. 183(2) and
General Rules
r. 3.

[61]

Notwithstanding
    those strong reservations, for purposes of this review motion I must treat the
    decision in
Aventura II
as binding.

C.      The
Hillmond

exceptions

[62]

Traders submits that the apparently absolute rule set out in
Aventura
    II
is subject to exceptions. In support of its position, Traders relies on
    the decision of this court in
Hillmond Investments Ltd. v.
    Canadian Imperial Bank of Commerce
(1996), 29 O.R.
    (3d) 612 (C.A.). The Carroll Plaintiffs submit that the rare exception
    recognized in
Hillmond
is not applicable to the present case.

[63]

The
Hillmond
case did not concern the power of a panel of
    this court to review the decision of a single judge of the same court.
Hillmond
dealt with the jurisdiction of a senior appellate court to hear an appeal from
    the decision of a single judge of an intermediate appellate court that had
    denied a party leave to appeal the decision of an arbitrator on a question of
    law pursuant to s. 45(1) of the
Arbitration Act, 1991
, S.O. 1991, c.
    17. In that case, a judge of what was then the Ontario Court (General Division)
    refused to grant leave to appeal. Hillmond Investments Limited then appealed to
    this court, arguing that the decision of the judge was a final order from which
    an automatic right of appeal existed to the Court of Appeal.

[64]

In concluding that it had no jurisdiction to entertain an appeal
    from the order of the lower court judge, this court examined, at some length,
    the jurisprudence regarding the ability of a senior appellate court to hear an
    appeal from the order of an intermediate appellate court that had denied a
    party leave to appeal. This court observed that a statutory leave requirement,
    such as that in the
Arbitration Act
,
1991
, grants an
    intermediate appellate court the power to stop unnecessary or frivolous
    appeals: at pp. 617-618. That power would become illusory if a party could
    appeal to a senior appellate court the intermediate appellate courts grant or
    denial of leave to appeal. In those circumstances, as this court stated
at
    p. 618,
[t]
he Court of Appeal could then hear every
    case.

[65]

Nevertheless,
    this court went on to state, at p. 624, that there must be an avenue of
    redress in exceptional cases, holding that [i]f a General Division judge
    mistakenly declines jurisdiction on a leave motion by acting upon a wrong
    principle, redress should be had to an appellate court: see also,
Denison
    Mines Ltd. v. Ontario Hydro
(2001), 56 O.R. (3d) 181 (C.A.), at paras. 4-11.
    However, if the judge denying leave has not mistakenly declined jurisdiction
    but has reached a decision on the merits of the application, then no appeal
    would lie from the refusal of leave:
Hillmond
, at p. 624.

[66]

In
Hillmond
,
    this court stated that a judge of an intermediate appellate court does not
    decline jurisdiction where he or she has considered the application for leave
    to appeal on its merits and concluded that the questions on which leave was
    sought did not qualify as ones for which leave should be granted: at p. 624.
    Accordingly, the failure of the single judge of the intermediate appellate
    court to recognize errors in law on the part of the arbitrator did not amount
    to declining jurisdiction: at p. 624.

[67]

In
Denison
    Mines
,
this court applied
    the exception where the lower court judge had not dealt with the merits of an
    application for leave to appeal but only with the preliminary jurisdictional
    issue of whether the parties had contracted out of a right to appeal through
    their arbitration agreement: at paras. 9-10.

[68]

The
    Divisional Court has used
Hillmond
to fashion its approach to panel
    review motions under
CJA
s. 21(5), which
    states that [a] panel of the Divisional Court may, on motion, set aside or
    vary the decision of the judge who hears and determines a motion. The
    Divisional Court has taken the position that under
CJA
s. 21(5) a
    panel of that court has the jurisdiction to review the decision of a single
    judge on a motion for leave to appeal, but it has applied
Hillmond
to
    limit the circumstances in which a panel may grant relief. The Divisional Court
    jurisprudence holds that a panel may only interfere if the single judge
    declined jurisdiction by acting on a wrong principle, including applying the
    wrong test in deciding whether to grant leave, disregarding a statutory right,
    or failing to give the moving party the right to be heard:
Millcraft
,
    at para. 28;
Universal Am-Can Ltd. v. Tornorth Holdings Ltd. et. al.
(
2003
)
, 177
    O.A.C. 297 (Div. Ct.), at para. 3;
Tseng v. Toronto (City)
, 2011 ONSC
    191 (Div. Ct.), at para. 2;
Exchange Tower Ltd. v. Municipal Property
    Assessment Corp., Region No. 9
, 2012 ONSC 415 (Div. Ct.), at para. 5.

D.      Analysis

[69]

The
    present motion does not involve a request for this panel to review a decision
    of a single judge of a lower court that refused leave to appeal; it concerns
    the ability of a panel to review the decision of a single member of this court.
    We are not being asked to interfere with the power of a lower court to regulate
    the flow of appeals to it. Instead, we are being asked to review the legal
    adequacy of a decision by a single judge of this court denying leave to appeal.
    As such, the policy concerns expressed in
Hillmond
that militate
    against a senior appellate court interfering with the ability of an
    intermediate appellate court to exercise its gate-keeper function to stop
    unnecessary or frivolous appeals do not apply with equal force.

[70]

In
    my view, the principle set out in
Aventura II
should be subject to
Hillmond
s
acknowledgement that there must be an
    avenue of redress in exceptional cases. The
Hillmond
exception which, it will be recalled, includes where the judge mistakenly
    declines jurisdiction on a leave motion, applies to the present case: at p.
    624.

[71]

In
    my view, the
Hillmond
exception applies
    because the reasons of the Chambers Judge do not disclose that he reached a
    decision on the merits of Traders leave to appeal motion, resulting in him
    mistakenly declining jurisdiction.  With due respect to my colleague, the
    Chambers Judge, his reasons, when read in context and applying the functional
    approach, do not explain how he dealt with the critical issues that Traders
    argued merited granting leave to appeal. Nor do they disclose that he seized
    the substance of the issue on the leave motion:
R. v. R.E.M.
, 2008
    SCC 51, [2008] 3 S.C.R. 3, at paras. 50 and 55.

[72]

On
    the leave to appeal motion, Traders submitted that errors by the motion judge
    in his interpretation of the relevant provisions of the
BIA
and
    related jurisprudence led him to fail to find that:

i.

Traders had standing to request the court to vary or set aside the
BIA
s. 38 Order as a person aggrieved by the acts or
    decisions of the Trustee, within the meaning of
BIA
s. 37;

ii.

The
BIA
s. 38 Order was improperly
    granted because the Carroll Plaintiffs were not creditors of the bankrupt McEwens
    in excess of the available policy limits and para. 3 of the Judgment precluded
    the Trustee from accepting the proof of claim filed by the Carroll Plaintiffs
    for the excess amount; and

iii.

The bad faith claim was not property belonging to the McEwens on the date
    of bankruptcy and did not devolve on the McEwens before their discharges from
    bankruptcy. As a result, the Trustee had no interest in the bad faith claim,
    had no standing to consent to a s. 38 order, and could not assign the bad faith
    claim to the Carroll Plaintiffs.

[73]

In
    his reasons, the Chambers Judge noted that the motion judge found that the
    moving party had no standing to attack the proof of claim or the s. 38 order.
    However, the reasons provide no explanation as to why the Chambers Judge did
    not consider Traders argument that it was an aggrieved person entitled to
    review the Trustees acts and decisions under
BIA
s. 37. Nor did the
    reasons consider whether Traders fell within one of the recognized exceptions
    to the general rule that a proposed defendant could not seek to review a s. 38
    order.

[74]

As
    well, although the Chambers Judge observed that the motion judge resolved the
    motion based on a substantive finding that the claim is breach of good faith,
    and that this claim vests in the trustee, his reasons do not grapple with the
    two key errors Traders contended the motion judge had made: namely, that (i)
    given the terms of the Judgment, the Carroll Plaintiffs were not creditors of
    the McEwens for any amount in excess of the policys limits; and (ii) the law
    and evidence showed that any claim for breach of the insureds duty of good
    faith did not arise until long after the McEwens and the Trustee had been
    discharged. The Chambers Judges reasons are silent on both of these key
    issues.

[75]

The
    reasons of the Chambers Judge are not sufficient to explain why he denied
    Traders leave to appeal, which leads me to conclude that the Chambers Judge
    declined jurisdiction by not making a decision on the merits of the leave
    motion. In the circumstances, the
Hillmond
exception
    applies, enabling this panel to review under
CJA
s. 7(5) the Chambers
    Judges refusal to grant leave to appeal.

X.      SECOND
    ISSUE: SHOULD TRADERS BE GRANTED LEAVE TO APPEAL?

A.      The
Pine Tree Resorts
test

[76]

As
    set out in
Pine Tree Resorts
, at para. 29, three factors guide a
    decision whether to grant leave to appeal under
BIA
s. 193(e). The
    proposed appeal must:

i.

raise an issue that is of general importance to the practice in
    bankruptcy/insolvency matters or to the administration of justice as a whole,
    and the issue is one that this court should consider and address;

ii.

be
prima facie
meritorious; and

iii.

not unduly hinder the progress of the bankruptcy/insolvency proceedings.

B.      Effect of an appeal on the bankruptcy proceedings

[77]

With
    respect to the third
Pine Trees Resorts
factor, which I will address first, Traders proposed appeal would not hinder
    the progress of the McEwens bankruptcy proceedings since those proceedings came
    to an end with the McEwens discharge in 2012.

C.      The merits and general importance of the issues raised
    by Traders

[78]

In
    my view, Traders proposed appeal also satisfies the first and second
Pine Tree Resorts
factors: the appeal raises issues that
    are
prima facie
meritorious and of general importance to the practice
    of bankruptcy matters.

Traders standing to review the
BIA
s. 38 Order.

[79]

The
    motion judge recognized that exceptions exist to the general principle that the
    proposed defendant to a
BIA
s. 38 action does not have standing on a
    s. 38 motion or to review a s. 38 order.

[80]

The
    motion judge acknowledged, at para. 84, that a potential defendant might have
    standing
where there is a discrete issue of law that,
    if decided in favour of the potential defendant, might avoid the need to defend
    a lawsuit that should never have been commenced
: see also:
Isabelle v.
    The Royal Bank of Canada
, 2008 NBCA 69, 336 N.B.R. (2d) 332, at para. 39.
    Yet, having acknowledged the exception, the motion judge failed to deal with
    it.

[81]

The
    motion judge also recognized that a person aggrieved by an act or decision of
    a trustee could apply to a court to reverse the decision under
BIA
s.
    37, but he concluded that Traders had not identified a specific basis to be
    classified as an aggrieved person.

[82]

In
    my view, Traders submission that the motion judge erred in holding that it had
    no standing to review the
BIA
s. 38 Order crosses the
prima facie
meritorious threshold. On its motion to
    review the
BIA
s. 38 Order, Traders advanced two arguments that
    challenged the status of the Carroll Defendants to bring a s. 38 action and the
    authority of the Trustee to consent to a s. 38 motion and make the Assignment.
    The two arguments were in the nature of complete bars to the s. 38 motion,
    namely: (i) by reason of the limitation on the personal liability of the
    bankrupts contained in para. 3 of the Judgment, the Carroll Plaintiffs were not
    creditors of the bankrupts in excess of the policy limits, and therefore, did
    not have the status to seek to bring a
BIA
s. 38 action; and (ii) the claim
    that Traders had breached its duty of good faith to its insureds, the McEwens,
    was not property of the bankrupts on the date of bankruptcy and did not devolve
    on the bankrupts before their discharge because the claim could not arise until
    a judgment was issued fixing any liability of the McEwens in excess of the
    policy limits. The Judgment did not issue until many years after the bankrupts
    discharge.

[83]

On
    the record before us, both arguments appear to have merit. Yet, the record is
    clear that were Traders to assert those arguments by way of defences to the Bad
    Faith Action, the Carroll Plaintiffs would take the position that Traders would
    be foreclosed from litigating in the Bad Faith Action the issues involving the
    validity of the Assignment, including whether the statutory conditions for a
BIA
s. 38 action had been met. The Carroll Defendants would argue that any attempt
    to do so would amount to a collateral attack on the
BIA
s. 38 Order,
    as indicated in an email dated November 12, 2019 from counsel for the Carroll
    Plaintiffs to Traders counsel and in para. 13 of the Carroll Plaintiffs
    Supplementary Factum.

[84]

It
    would be unfair to deprive Traders of some mechanism to have a court determine
    those issues which, if resolved in a manner favourable to Traders, might avoid
    the need for Traders to defend a lawsuit that should never have been commenced.
    Such unfairness constitutes a form of prejudice that, arguably, renders Traders
    an aggrieved person within the meaning of
BIA
s. 37.

[85]

In
    those circumstances, Traders position that it has the standing to move for a
    review of the
BIA
s. 38 Order is
prima
    facie
meritorious, is worthy of consideration by this court, and is of
    general importance to the practice of bankruptcy matters.

The Carroll
    Plaintiffs status as creditors of the bankrupt McEwens.

[86]

I
    also conclude that there is merit in Traders argument that the motion judge
    misconstrued the limits placed on the McEwens liability by para. 3 of the
    Judgment issued by McLean J. As mentioned, para. 3 of the Judgment limited the
    liability of the McEwens personally to the $1 million limit of the
    Traders/Aviva policy. The motion judge held that the language of para. 3 did
    not preclude the Carroll Plaintiffs from filing a proof of claim with the
    McEwens estates in bankruptcy for the amount of the Judgment in excess of the
    policy limits. However, in his reasons the motion judge did not take into
    account the limits placed by Master Roger in the October 12, 2012 continuation
    order that the
BIA
stays were lifted to have the proceeds of any
    liability insurance policy applied in or toward the satisfaction of the
    [Carroll Plaintiffs] claim. By contrast, the transcript of the hearing before
    McLean J. disclosed that he was influenced by the limits imposed by Master
    Roger when crafting para. 3 of the Judgment and rejecting the attempt by the
    Carroll Plaintiffs to include additional language in the Judgment.

[87]

While
    the interpretation of a provision in a judgment usually is a matter of concern
    only to the parties involved, this issue does raise the larger question of the
    practical limits on the liability of the estates of bankrupts where motor
    vehicle accident actions are initiated against the bankrupts prior to the date
    of bankruptcy but are not determined until after the bankrupts discharge. As
    such, I regard it as an issue of general importance to the practice in
    bankruptcy matters.

Whether the bad faith claim is property of the
    bankrupts assignable by the Trustee.

[88]

Finally,
    Traders proposed appeal raises issues about when a chose in action for a
    breach of a duty of good faith to a bankrupt insured arises such that it
    constitutes property of the bankrupt assignable by a trustee.

[89]

Part
    of Traders argument that the Carroll Plaintiffs bad faith claim was not the
    property of the bankrupts is based on the decision of this court in
Dundas
.
    In that case, an insureds action for breach of duty of good faith alleged that
    the insurer had delayed settling a motor vehicle accident claim against it and
    failed to pay the policy limits into an interest-bearing account prior to the
    ultimate settlement. Given the high rates of pre-judgment interest then
    prevailing, the insurers alleged delay pushed the amount of the final
    settlement over the policy limits, thereby exposing the insured to liability
    for the excess. The insureds action sought to recover the excess.

[90]

In
Dundas
,
    this court had to determine the limitation period applicable to the insureds
    claim against its insurer for breach of the duty of good faith: Was it the
    one-year limitation period applicable to any claim under the policy, or was it
    subject to the then standard six-year limitation period? This court adopted the
    latter limitation period, stating at para. 38:

In my view, the cause of
    action did not arise until Zurich had a liability to indemnify the Reid estate
    under the policy of insurance. This only occurred when the liability of the
    Reid estate had been finally ascertained by judgment after trial or by
    settlement between the parties with the consent of the insurer, using the
    language of condition 6(2).
On the facts, this did not occur
    until the issues of interest and costs had been resolved by the consent judgments
    that were taken out on August 21, 1995. It was at this time that the Reid
    estate had a liability to pay the third parties and it was at this time that it
    was entitled to demand indemnity from Zurich. [Emphasis added.]

[91]

Relying
    on
Dundas
, Traders submitted to the motion judge that any cause of
    action for breach of its duty of good faith to the McEwens could not arise
    until the Judgment fixed the McEwens liability, and then only if the Judgment
    exposed the McEwens to liability in excess of the policys limits. The motion
    judge acknowledged the argument, at para. 111 of his reasons, but failed to
    deal with it.

[92]

The
    Carroll Plaintiffs contend, in effect, that the motion judges failure to do so
    was of no consequence because what
Dundas
held was that it is a claim
    for indemnity under a policy, not a claim for breach of a duty of good faith,
    that crystallizes upon judgment. As a result, the holding in
Dundas
has no application to the present case. This submission is difficult to
    reconcile with the fact that the holding of this court in para. 38 of
Dundas
,
    reproduced above, responded directly to the question of when the insureds
    cause of action for breach of the insurers duty of good faith arose.

[93]

Traders
    submission that the motion judge committed a material error in failing to
    address the principle in
Dundas
is
prima facie
meritorious,
    merits consideration of this court, and is of general importance to the
    practice in bankruptcy matters.

[94]

Further,
    the crux of the Bad Faith Action is that Traders breached its duty of good
    faith to its insureds by failing to accept an offer by the Carroll Plaintiffs
    to settle the MVA Action within the policys limits. On the materials filed by
    the Carroll Plaintiffs and the Trustee, it appears that the offer in question
    was the Carroll Plaintiffs September 9, 2015 offer, which was made on the eve
    of the trial, many years after the McEwens and the Trustee had been discharged.
    In those circumstances, it is certainly questionable whether the chose in
    action for a breach of the duty of good faith, as framed against Traders,
    constituted property of the bankrupts that could be assigned by the Trustee.

[95]

Accordingly,
    Traders has demonstrated
prima facie
meritorious arguments that the motion judge erred in holding that: (i) the
    chose in action that Traders breached its duty of good faith was property of
    the McEwen bankrupts on the date of their bankruptcies or devolved to their
    estates prior to discharge: at para. 129; and (ii) that
BIA
s. 41(10)
    provided authority to the Trustee in the circumstances to accept the Carroll
    Plaintiffs proof of claim and make the Assignment: at paras. 102-108. Both
    issues are of general importance to the practice of bankruptcy matters.

D.      Conclusion

[96]

Accordingly,
    in my view, Traders has satisfied all three elements of the test in
Pine
    Tree Resorts
.

XI.     DISPOSITION

[97]

For
    the reasons set out above, I would set aside the order of the Chambers Judge
    and grant Traders leave to appeal the order of Kershman J. dated September 26,
    2019.

[98]

I
    would order the costs of this motion to Traders. I would set aside the costs
    order of the Chambers Judge and order that the Carroll Plaintiffs pay Traders
    costs of $15,000, inclusive of applicable taxes and disbursements, for the
    motion before the Chambers Judge. If the parties are unable to agree on the
    costs of this motion, they may submit brief written costs submissions within 15
    days of the release of these reasons.

Released: EEG AUG 17 2020

David
    Brown J.A.

I
    agree. E.E. Gillese J.A.

I
    agree. David M. Paciocco J.A.

[1]

BIA
s. 41(10) provides:
    Notwithstanding his discharge, the trustee remains the trustee of the estate
    for the performance of such duties as may be incidental to the full
    administration of the estate.

[2]
As pleaded in para. 24 of the statement of claim in the ensuing bad
    faith action, the amount of $624,349.01 was described as the amount
    outstanding on the Judgment as of October 11, 2016.

[3]

Although
    the Carroll Plaintiffs named Aviva as the defendant in the Bad Faith Action, as
    mentioned above it was Traders, not Aviva, that insured the McEwens. In the
    balance of these reasons, I shall refer to Traders as the defendant in the Bad
    Faith Action.


COURT OF APPEAL FOR ONTARIO

CITATION: Michel v. Spirit Financial Inc.,
    2020 ONCA 523

DATE: 20200820

DOCKET: C66925 & C66926

Benotto,
    Zarnett and Thorburn JJ.A.

DOCKET: C66925

BETWEEN

Alexander
    Michel

Plaintiff (Respondent)

and

Spirit
    Financial Inc.
,
Franz Kramer

And Gunther
    Kramer

Defendants
    (Appellants)

DOCKET: C66926

AND BETWEEN

Franz
    Kramer, Christa Schmidt

and
    Gunther Kramer

Plaintiffs (Appellants)

and

Alexander
    Michel

Defendant
    (Respondent)

Michael A. van Bodegom and Daniel W.
    Veinot, for the appellants Franz Kramer and Spirit Financial Inc, and
    respondent on cross-appeal, Gunther Kramer

Alexander Michel the respondent/appellant
    on cross-appeal, representing himself

Heard: in writing

On
    appeal from the judgment of Justice P.J. Flynn of the Superior Court of Justice,
    dated April 10, 2019, with reasons reported at 2019 ONSC 2254.

ADDENDUM

[1]

On June 19, 2020 we released our reasons for
    decision. We allowed the appeal in part by reducing the damages ordered by the
    trial judge to reflect the fact that some of the advances made by the
    respondent were statute barred. We indicated that, if the parties could not
    agree on the calculation of damages and costs, they could provide written
    submissions.

[2]

We have received the parties submissions as to
    the amendment to the judgment and costs.

[3]

We do not accept the respondents submission
    that the amount of the damages should be increased. We accept the submissions
    of the appellant.

[4]

The damages and pre-judgment interest in
    paragraph 1 of the judgment are reduced by a total of $336,273.

[5]

Costs with respect to the appeals and the cross
    appeal are payable to the respondent Alexander Michel and fixed in the amount
    of $16,500 inclusive of disbursements and HST.

M.L.
    Benotto J.A.

B.
    Zarnett J.A.

J.A. Thorburn
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Neilas (799 College St) Inc. v.
    Houston Engineering & Drafting Inc., 2020 ONCA 496

DATE: 20200806

DOCKET: C66584

Huscroft, Zarnett and Coroza
    JJ.A.

BETWEEN

Neilas (799 College St) Inc.

and
    Skypoint Hi-Rise Ltd.

Plaintiffs (Respondents)

and

Houston Engineering & Drafting Inc.,

VN Engineers & Facility Planners Inc.

and
Houston Thomas Engio

Defendants (
Appellant
)

Houston Thomas Engio, acting in person

Christopher Selby and Mark St. Cyr, for
    the respondents Neilas (799 College St) Inc. and Skypoint Hi-Rise Ltd.

Heard: in writing

On appeal from the judgment of Justice Lorne
    Sossin of the Superior Court of Justice, dated February 8, 2019.

REASONS FOR DECISION

[1]

The appellant argues that the motion judge erred
    in finding the settlement agreed on by the parties was valid and enforceable.
    The appellant says that there was no agreement on all essential terms of the
    settlement and that enforcement of the settlement would lead to a clear
    injustice.

[2]

We disagree.

[3]

The motion judge found that the appellant was
    represented by counsel when settlement terms were agreed to, including the
    mutual release, at the July 11, 2018 meeting. Although minor alterations to the
    minutes of settlement were discussed following this, there were no material
    concerns about the settlement. The appellant refused to approve the settlement
    documents despite the respondents agreement to include an additional clause to
    address the appellants concern about the mutual release.

[4]

The motion judge rejected the appellants
    argument that he was not represented by counsel at the relevant time, finding
    no evidence to support it. He properly noted that any concerns between the
    appellant and his counsel were beyond the purview of the motion, as was the
    effect of the mutual release. There was no evidentiary basis to support an
    argument that enforcement of the settlement would lead to a clear injustice.

[5]

The proposed fresh evidence concerns allegations
    against the appellants former counsel in addition to allegations concerning
    contumelious conduct, misrepresentations, and bad faith by the respondents. It
    includes both evidence that was available on the motion date and evidence that
    became available subsequently. It would not have affected the motion judges
    conclusion.

[6]

The motion to admit fresh evidence is dismissed.
    The appeal is dismissed.

[7]

The respondent is entitled to its costs. The
    parties may make brief (2-3 page) submissions on costs within 10 days of this
    decision.

Grant Huscroft J.A.

B. Zarnett J.A.

S. Coroza J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Neufeld v. Neufeld, 2020 ONCA 506

DATE: 20200807

DOCKET: C66749

MacPherson, Pardu and Huscroft
    JJ.A.

BETWEEN

Janet
    Lee Neufeld

Applicant (Respondent)

and

Wilmer Jack Neufeld

Respondent (Appellant)

Donna Wowk, for the appellant

Bryan Smith, for the respondent

Heard: In writing

On
    appeal from the judgment of Justice R.A. Lococo of the Superior Court of
    Justice, dated February 27, 2019, with reasons reported at 2019 ONSC 1277.

COSTS ENDORSEMENT

[1]

The respondent is entitled to her costs of the
    appeal fixed at $50,000, inclusive of disbursements and HST.

J.C.
    MacPherson J.A.

G.
    Pardu J.A.

Grant
    Huscroft J.A.