COURT OF APPEAL FOR ONTARIO

CITATION: Gordon Dunk Farms Limited v. HFH
    Inc., 2021 ONCA 681

DATE: 20211006

DOCKET: C68594

Strathy C.J.O., Feldman and van
    Rensburg JJ.A.

BETWEEN

Gordon Dunk Farms Limited

Plaintiff

(Appellant)

and

HFH Inc., Franken Concrete
    Forming (2011), McNeil Engineering & Construction Inc.
and Township of Guelph Eramosa

Defendants

(
Respondents
)

Daniel Zacks and Gregory Brimblecombe,
    for the appellant

Peter W. Kryworuk and Jacob R.W. Damstra,
    for the respondent HFH Inc.

James A LeBer and Eric A.F. Grigg, for the respondent McNeil
    Engineering & Construction Inc.

No one appearing for the respondent Franken Concrete
    Forming (2011)

Heard: May 21, 2021 by video conference

On appeal from the judgment of Justice Gordon
    D. Lemon of the Superior Court of Justice, dated July 21, 2020, with reasons at
    2020 ONSC 4426.

Feldman J.A.:

A.

Introduction

[1]

The appellant, Gordon Dunk Farms Ltd., suffered
    a loss when its hog barn collapsed on May 6, 2014. The two principals of the
    appellant, Gordon Dunk and his son Floyd Dunk, are knowledgeable hog farmers,
    who had the barn constructed 1.5 years earlier by the three respondents. McNeil
    Engineering & Construction Inc. (McNeil) designed the barn, HFH Inc. (HFH)
    oversaw its construction, and Franken Concrete Forming (2011) (Franken) undertook
    the concrete work. Floyd Dunks son and brother were in the barn when it
    collapsed and were lucky to survive.

[2]

The appellant had insurance that covered part,
    but not all, of the loss. The insurer paid the appellant for the covered loss
    and retained a lawyer to sue the respondents to pursue the subrogated claim.
    The same lawyer was also retained to recover the balance of the loss on behalf
    of the appellant directly. That lawyer did not commence the action until May
    24, 2016.

[3]

All parties brought motions for summary judgment
    to determine whether the action was brought within time or was statute barred.
    The issue before the motion judge was when the appellant knew or ought to have
    known that it had a claim against the respondents. Shortly after the barn
    collapsed, the insurance adjuster retained an expert to examine the barn and
    report on the cause of the collapse. The motion judge found that the principals
    knew they had a claim, within the meaning of the
Limitations Act
,
    2002
, S.O. 2002, c. 24, Sched. B. (the Act), before they received the final
    expert report on May 21, 2014.
[1]
The action was therefore statute barred.

[4]

For the reasons that follow, I would dismiss the
    appeal.

B.

Background Facts

[5]

In 2011, the appellant decided to build a new
    hog barn on its property. The principals engaged the respondent McNeil to
    prepare the design, and the respondent HFH as contractor to oversee the
    construction, based on the McNeil drawings. They also engaged the respondent Franken
    to do the concrete work. The barn was completed in 2013.

[6]

The barn was a rectangular one-story building
    300 feet long and 60 feet wide. The pigs lived on concrete floor panels above
    an eight-foot deep tank. Walls running the length of the tank supported the
    floor panels and formed channels referred to as raceways. The pigs manure
    fell through the floor panels and accumulated in the raceways. A propeller in
    the tank would agitate the manure and cause it to flow through the raceways
    toward an exit to be pumped out. During construction, Floyd Dunk, who is
    knowledgeable about barn construction, was aware that there was no lateral
    bracing between the raceway walls, but trusted the engineer with respect to
    what was required.

[7]

When the barn collapsed, the appellant was aware
    that the raceway walls had collapsed. The insurance adjuster retained two
    engineering firms to prepare preliminary reports, R.J. Burnside &
    Associates Limited (Burnside) and Brown & Beattie Building Science
    Engineering (Brown). They both attended on May 8 and provided their preliminary
    reports that same day.

[8]

Burnside provided a preliminary view on
    causation, which was that agitation of the manure moved one raceway wall over,
    which generated a manure surge that toppled the adjacent walls in a cascading
    effect. Burnside subsequently discovered a conflict of interest and had no
    further involvement. Brown did not provide a causation opinion until its final
    report, delivered on May 21. Its preliminary conclusion in the May 21 report,
    based on the information available, was that manure agitation and pumping
    caused different levels of manure on either side of the raceway walls,
    resulting in uneven force on the walls, causing them to collapse.

[9]

In their cross-examinations, both Gordon and
    Floyd Dunk acknowledged that with their experience and understanding of barn
    construction and operation, they believed they understood or knew the cause of
    the barn collapse, but because they are not engineers, they were speculating
    regarding the cause of the collapse (my paraphrase).
Floyd
    Dunk testified that he did not see Browns final report of May 21, 2014 until shortly
    before his cross-examination on February 26, 2019.

[10]

The action was commenced on May 24, 2016. The
    respondents delivered their statements of defence that included a limitations
    defence, and moved for summary judgment. The appellant resisted the
    respondents motions and brought its own cross-motion for summary judgment to
    determine the timeliness of the action.

C.

The Motion Judges findings

[11]

The motion judge dismissed the respondents summary
    judgment motions based on the record before him. He found the limitation issue
    to be a triable issue that could not be determined on summary judgment. He then
    adjourned the appellants summary judgment motion pending cross-examinations or
    a mini-trial. In dismissing the respondents motions, he came to the following
    conclusions:

I cannot find that the plaintiff knew all of
    the facts and was attempting to extend the limitation period by relying on an
    expert report. Rather, the documents are consistent with the affidavit evidence
    that, prior to the May 21 report, the plaintiff was unable to determine what
    had occurred at the bottom of the various walls. As can be seen from the
    highlighted sections of the documents, the information to that point was
    uncertain. The fact that those observations confirmed what was already
    suspected does not move the limitation period backwards.

The documents support that the plaintiff had
    hired an independent witness to, literally and figuratively, get to the bottom
    of the cause. Until the debris from the collapse was removed, the walls were
    observed, and the report was provided, the time could not begin to run. Until
    then, it appears that the cause could not be confirmed. The short period of
    time between the collapse and the report was reasonable in the circumstances.

[12]

Following the cross-examinations, the motion
    judge returned to consider whether he could now decide the limitation issue on
    the appellants motion. He found that he could, and that the additional evidence
    changed his mind about whether the Dunks knew the cause of the collapse before
    they received the May 21 Brown report.

[13]

Gordon Dunk testified that one side of the barn
    collapsed first, and then the walls fell like dominos, which indicated that the
    raceway wall between the empty raceway and the full one on one side had
    collapsed causing the full collapse of the barn. Floyd Dunk agreed that it was
    probably obvious that the cause of the collapse was the lack of lateral
    supports, but he had no proof. In a statement he gave to the insurance adjuster
    on May 13, his opinion was that [h]ad the configuration of the walls been
    different this collapse would not have occurred.

[14]

The motion judge rejected the position that the
    principals of the appellant were speculating about the cause of the barn
    collapse. He found that either they were not telling the truth now, or they
    ought to have known the cause at the time. They were experienced in the building
    of exactly this kind of barn.
[2]
Also, the barn was of simple construction, the collapse was not a complicated
    process, and the principals observed what occurred. Although they called it
    theories or speculation, they certainly had all the information they needed to
    found their cause of action, the what, the who and the how behind this
    claim.

[15]

The motion judge concluded that the directing
    minds of the appellant either ought to have known or did know the necessary
    facts by May 12, when they met with the insurance adjuster to discuss the
    situation. He also found that the May 21 Brown report contained no new
    information that the Dunks did not already know. Finally, he observed that
    while much time was spent on the knowledge of the appellants counsel, what the
    lawyer knew and when he knew it were not determinative; it is the knowledge of
    the appellant that is. The motion judges conclusion was that, by May 12, 2014,
    the appellant knew:

1)

the barn collapsed with significant damage to it
    and the livestock;

2)

the cause of the collapse was insufficient
    lateral bracing of the raceway walls;

3)

the three respondents were responsible for the
    design and construction of the barn; and

4)

the uninsured losses and subrogated claims would
    not be paid without legal action.

[16]

Because the action was commenced on May 24,
    2016, more than two years after the appellant knew about the claim within the
    meaning of the Act, the action was statute barred.

D.

Issues

[17]

The appellant raises two issues on this appeal:

1)

Did the motion judge err by failing to treat
    each of the appellants 20 pleaded acts or omissions as separate claims, and
    conduct individual discoverability analyses for each?

2)

Did the motion judge err by failing to rule on
    the appellants motion regarding the timeliness of its action as against the respondent,
    Franken, who did not defend the motion?

[18]

The answer to both questions is no.

[19]

I will also address a third issue that arises
    from the reasons of the motion judge regarding the proper interpretation of s. 14
    of the Act.

E.

Analysis

(1)

Did the motion judge err by failing to treat
    each of the appellants 20 pleaded acts or omissions as separate claims, and conduct
    individual discoverability analyses for each?

a)

The Appellants New Argument on Appeal

[20]

The appellant pleaded that its damages were
    caused by the negligence or breach of contract of the respondents. It then
    pleaded nine specific failures by the respondent HFH, six specific failures by
    the respondent McNeil, and five specific failures by the respondent Franken. I
    will set out a few examples:

·

HFH failed to construct the barn according to
    the design, failed to ensure the raceway walls were appropriately braced, and failed
    to ensure the barn was constructed to safely operate.

·

McNeil failed to adequately design the barn,
    designed a manure storage system that it knew or ought to have known was unsafe,
    and failed to adequately inspect the ongoing construction.

·

Franken failed to construct the concrete
    portions of the barn safely, failed to use proper construction practices, and failed
    to provide adequate lateral bracing for the raceway walls.

[21]

The appellant concedes that some of the claims
    it alleges are statute barred because it was clear from the cross-examinations
    that Gordon Dunk knew about the deficient lateral bracing and inadequate design
    of the raceway system days after the collapse. However, the appellant alleges there
    is no evidence that its principals knew about other deficiencies in the design,
    construction, and inspection of the construction by the respondents before
    receiving the May 21 Brown report, and therefore, the claims based on those
    failures by the respondents are not statute barred.

[22]

The appellants position is that the report
    identified causal findings for the first time, including an issue with the
    height of the raceway walls, the fact that the concrete floor panels did not
    include any mechanical anchorage to the raceway walls, and that the raceway
    walls failed at their connection to the concrete floor slab. These facts gave
    rise to a number of separate claims by the appellant not tethered to the
    failure to brace the walls. The motion judge did not separately consider
    whether those claims were also statute barred.

[23]

To summarize, the appellant submits that it
    required the May 21 Brown report in order to discover a number of the acts or
    omissions that each of the respondents committed that caused or contributed to
    the collapse of the barn, and that each of these acts or omissions constitutes
    the basis for a separate claim that requires a separate discoverability
    analysis.

[24]

This issue was not raised before the motion
    judge. He did not address it in his reasons. The respondents HFH and McNeil
    submit that the court should therefore not entertain the argument on the
    appeal. While the court will not, in most cases, entertain an argument on
    appeal that was not raised at the original hearing, it can do so where the
    record is sufficient and the issue is one of law:
Becker v. Toronto (City)
,
    2020 ONCA 607, 452 D.L.R. (4th) 679, at paras. 39-40;
Svia Homes Limited v.
    Northbridge General Insurance Corporation
, 2020 ONCA 684, 7 C.C.L.I. (6th)
    1, at paras. 23-28. In this case, the issue is the proper interpretation and
    application of the Act, and the record below is complete. In these
    circumstances, in my view, it is appropriate to address the issue on this
    appeal.

b)

Meaning of a Claim

[25]

The context for the appellants argument is ss.
    4, 5(1) and (2), and the definition of claim in s. 1 of the Act, which state:

1        In this Act,  claim means
    a claim to remedy an injury, loss or damage that occurred as a result of an act
    or omission;

4        Unless this Act provides
    otherwise, a proceeding shall not be commenced in respect of a claim after the
    second anniversary of the day on which the claim was discovered.

5 (1)   A claim is discovered on the
    earlier of,

(a)     the day on which the
    person with the claim first knew,

(i)      that the injury, loss or
    damage had occurred,

(ii)      that the injury, loss
    or damage was caused by or contributed to by an act or omission,

(iii)     that the act or
    omission was that of the person against whom the claim is made, and

(iv)     that, having regard to
    the nature of the injury, loss or damage, a proceeding would be an appropriate
    means to seek to remedy it; and

(b)     the day on which a
    reasonable person with the abilities and in the circumstances of the person
    with the claim first ought to have known of the matters referred to in clause
    (a).

(2)     A person with a claim shall
    be presumed to have known of the matters referred to in clause (1) (a) on the
    day the act or omission on which the claim is based took place, unless the
    contrary is proved.

[26]

The meaning of claim in the Act was explained
    by this court in
Kaynes v. BP p.l.c.
, 2021 ONCA 36, 456 D.L.R. (4th)
    247, and confirmed most recently by the Supreme Court of Canada in
Grant
    Thornton LLP v. New Brunswick
, 2021 SCC 31, in respect of the New
    Brunswick
Limitation of Actions Act
, S.N.B. 2009, c. L-8.5 (the N.B.
    Act). In
Kaynes
, the court explained that while the Act no longer
    refers specifically to a cause of action, instead it sets out universal
    criteria for the commencement of the limitation period in respect of a claim:
    at paras. 50-58. A claim is pursued in a court proceeding to obtain a remedy
    for a loss that the defendant caused the plaintiff to suffer by its act or
    omission. To obtain a remedy in a court proceeding, a person must assert a
    cause of action.

[27]

In
Grant Thornton
, Moldaver J. rejected
    the argument that there was a meaningful distinction between claim and cause
    of action in the context of the N.B. Act (which is similar but not identical
    to the Ontario Act), stating at para. 37:

I recognize that the distinction between
    claim and cause of action could be meaningful in some circumstances; but in
    my view, it is not so here. In fact, the
LAA
s own wording

shows
    that the use of claim does not rule out a shared meaning with cause of
    action. Section 1(1) defines a claim as a claim to remedy the injury, loss or
    damage that occurred as a result of an act or omission. In short, s. 1(1)
    indicates that the legislatures use of the term claim focuses on a set of
    facts giving rise to a remedy, which is the same meaning that Grant Thornton attributes
    to the term cause of action.

c)

Discoverability of a Claim

[28]

Because a claim is for a legal remedy in a court
    proceeding, one can have a claim for the same remedy based on one or more acts
    or omissions that may have caused the loss. In pleading parlance, different
    acts or omissions may constitute particulars of the claim. However, the claim,
    as defined, is for the remedy itself  in this case, damages for negligence and
    breach of contract.

[29]

As the Supreme Court of Canada released its decision
    in
Grant Thornton

following the oral argument of this appeal,
    the court sought and received further written submissions from the parties on
    the effect of that decision on the issues to be decided on this appeal.

[30]

In
Grant Thornton
, the issue was
    whether a plaintiff with a negligence claim must have discovered every
    constituent element of that claim, including knowledge of a duty of care and a
    breach of the standard of care, before the limitation period would begin to run.
    In rejecting that position, Moldaver J. articulated the test for the degree of
    knowledge required under the N.B. Act to trigger the commencement of the
    limitation period, at para. 42:

[A] claim is discovered when a plaintiff has
    knowledge, actual or constructive, of the material facts upon which a plausible
    inference of liability on the defendants part can be drawn.

[31]

Moldaver J. emphasized that the plausible
    inference of liability standard makes it clear that certainty is not required.
    Of course, one will not know for certain if a defendant is liable for a loss until
    the verdict is delivered following a trial or summary judgment motion.

[32]

The issue that the appellant raises here is:
    what is the significance of the act or omission that is referred to in ss. 5(1)(a)(ii)
    and (iii) of the Act? Is the appellant correct that a separate limitation
    period begins to run in respect of each act or omission committed by the
    defendant as part of its negligent conduct contributing to the loss, thereby
    requiring a separate discoverability analysis for each such act or omission? Or
    does the plaintiff only have to know that the defendants involvement in the
    loss means that it must have committed one or more negligent acts or omissions
    that caused or contributed to the loss?

[33]

In my view, the limitations jurisprudence of
    this court, effectively confirmed by the Supreme Court in
Grant Thornton
,
    establishes that the appellants position has been rejected: see, e.g.,
McSween
    v. Louis
(2000), 132 O.R. (3d) 304 (C.A.);
Lawless v. Anderson
,
    2011 ONCA 102, 276 O.A.C. 75;
Dale v. Frank
, 2017 ONCA 32, 136 O.R.
    (3d) 315, leave to appeal to S.C.C. refused, 37494 (October 12, 2017); and
Morrison
    v. Barzo
, 2018 ONCA 979, 144 O.R. (3d) 600.

[34]

A plaintiff need not know the exact act or
    omission by the defendant that caused the loss in order to start the limitation
    period running. What it needs to know is that an incident occurred that
    resulted in a loss (s. 5(1)(a)(i)), that the defendant did or failed to do something
    to cause that loss (s. 5(1)(a)(ii) and (iii)), and that, having regard to the
    nature of the injury, loss, or damage, a court proceeding is an appropriate
    means to seek a remedy (s. 5(1)(a)(iv)).

[35]

The damages and injury caused by a car accident
    provide an instructive example. The defendants car slams into the plaintiffs
    car. The plaintiff knows the defendant was driving, but may not know whether
    the defendant fell asleep at the wheel, neglected to get the brakes of the car
    serviced, was distracted by a phone call, was drunk, or was just careless. The
    plaintiff will plead all of those allegations as part of its negligence claim. In
    discovery, the true facts will likely be disclosed. It is also possible that
    the actual cause or causes of the accident may not be revealed until trial. But
    the action must be commenced within two years of when the plaintiff knows or
    ought to know that the defendant committed some act or omission that caused the
    loss or damage.

[36]

And what is meant by knows is that the
    plaintiff has the evidentiary basis to believe that the defendant did an act or
    made an omission that caused a loss for which a court proceeding is appropriate
    to obtain a remedy  the basis of a plausible inference of liability, in the
    words of Moldaver J. Of course, at trial, it may turn out that the defendant was
    not responsible for the loss, either because they owed no duty of care, they
    met the standard of care, or they did not commit the act or omission that was
    alleged.

[37]

It is possible that there may be circumstances
    where a plaintiff learns later about another act or omission that was not
    apparent from the circumstances of the loss and that gives rise to a new claim.
    That is what occurred in
Kaynes
, where the investor knew early on that
    the companys financial disclosure was misleading and negligent, and therefore
    had to commence its negligent misrepresentation action. But it only learned
    much later that the company had knowingly and fraudulently made the misleading
    claims, and therefore the investor had more time to allege fraud.

d)

Application to this Case

[38]

Applying these principles to the pleading and
    the appellants knowledge in this case, all of the allegations that are made as
    separate acts or omissions come under three categories: faulty design, faulty
    construction, and faulty inspection during construction. The pleading describes
    particulars or details of failures within each of those categories of
    responsibility. The motion judge found, based on the record, that Gordon and Floyd
    Dunk knew shortly after the collapse that the three respondents were
    responsible for these aspects of the development and delivery of the barn, and
    that the barn collapsed because of the failure of one or more of those aspects
    of the planning and erection of the barn. That finding is sufficient to meet
    the plausible inference of liability test for identifying the required acts
    or omissions of these respondents.

[39]

The motion judge determined, based on the
    evidence from the appellants principals themselves, that they knew they had a
    claim for negligence and breach of contract by May 12, 2014, because they knew
    sufficient facts to be able to infer that negligent design, construction, and/or
    inspection during the construction of the barn were the cause of the collapse. I
    see no basis to interfere with his analysis or his conclusion.

[40]

I would not give effect to this ground of
    appeal.

(2)

Did the motion judge err by failing to rule on
    the appellants motion regarding the timeliness of its action as against the respondent,
    Franken, who did not defend the motion?

[41]

The respondent Franken defended the appellants
    action but not the summary judgment motion. I am satisfied, based on the
    reasons of the motion judge, that his failure to find that the action is
    statute barred as against Franken as well as the other two respondents was an
    oversight on his part. At para. 6 of his reasons, the motion judge noted that
    Franken took no position on the motion but all parties agreed that the result
    of this motion would likely be binding on Franken in any event. That, of
    course, includes agreement by the appellant.

[42]

The findings by the motion judge applied to the
    appellants knowledge with respect to the involvement of each of the three respondents.
    As a result, the action is statute barred against all three, including Franken.

(3)

The motion judges error with respect to the
    meaning and effect of s. 14 of the Act

[43]

Section 14 of the Act allows a person who is a potential
    defendant in an action to put the potential plaintiff on notice that the
    potential plaintiff may have a claim against the person, the potential
    defendant. The purpose is to give a potential defendant the ability to start
    the two-year limitation period running so that it can have certainty about when
    the action will become statute barred. It is not an admission of liability. The
    section allows the court to take the notice into account if a limitation issue
    arises in respect of an action after it is commenced. Section 14 reads:

14 (1) A person against whom another
    person may have a claim may serve a notice of possible claim on the other
    person.

(2)     A notice of possible claim
    shall be in writing and signed by the person issuing it or that persons
    lawyer, and shall,

(a)     describe the injury, loss
    or damage that the issuing person suspects may have occurred;

(b)     identify the act or
    omission giving rise to the injury, loss or damage;

(c)     indicate the extent to
    which the issuing person suspects that the injury, loss or damage may have been
    caused by the issuing person;

(d)     state that any claim that
    the other person has could be extinguished because of the expiry of a limitation
    period; and

(e)     state the issuing
    persons name and address for service.

(3)     The fact that a notice of
    possible claim has been served on a person may be considered by a court in
    determining when the limitation period in respect of the persons claim began
    to run.

(4)     Subsection (3) does not
    apply to a person who is not represented by a litigation guardian in relation
    to the claim and who, when served with the notice,

(a)     is a minor; or

(b)     is incapable of
    commencing a proceeding because of his or her physical, mental or psychological
    condition.

(5)     A notice of possible claim
    is not an acknowledgment for the purpose of section 13.

(6)     A notice of possible claim
    is not an admission of the validity of the claim.

[44]

In this case, the appellants insurance adjuster
    sent letters to the three respondents on behalf of the appellant, the potential
    plaintiff, to put them on notice of the barn collapse and of their potential
    liability as defendants, and recommended that they refer the letter to their
    liability insurers and have them contact the appellants adjuster for further
    details.

[45]

The motion judge took these letters into account
    to support his finding that the appellant knew sufficient facts to commence the
    action when those letters were sent. While the motion judge was entitled to do
    that as a matter of inference, he was in error by referring to s. 14 and
    relying on s. 14(3) as his authority for doing so. Section 14 had no
    application to the facts of this case, where it was the potential plaintiff
    putting the potential defendants on notice and not the other way around.

[46]

Although the motion judge erred in law by
    purporting to rely on the wrong section of the Act, it had no effect on the
    outcome of the motion because the motion judge was entitled to draw an
    inference, without any authority or direction from the Act, where the notice
    was from the potential plaintiff to the potential defendants.

F.

Conclusion

[47]

For the above reasons, I would dismiss the
    appeal with costs to the respondents HFH and McNeil in the agreed amount of $15,000
    each, inclusive of disbursements and HST.

Released: October 6, 2021 G.R.S.

K. Feldman J.A.

I agree. Strathy C.J.O.

I agree. K. van Rensburg J.A.

[1]
The parties agreed that, in 2016, May 21-23 was a long weekend, and
    that if the limitation period commenced on May 21, 2014, the claim was issued in
    time.

[2]
The Dunks had a similar barn built in 1992, and Gordon Dunk confirmed
    [s]o we had lots of experience with raceway barns.


WARNING

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

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

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

(a)     any of the
    following offences;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. D.B., 2021 ONCA 679

DATE: 20211006

DOCKET: C68523

MacPherson, Roberts and Miller
    JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

D.B.

Appellant

Michael A. Crystal, for the appellant

Natalya Odorico, for the respondent

Heard: September 28, 2021 by
    video conference

On appeal from the conviction entered on
    September 4, 2019 by Justice Martin S. James of the Superior Court of Justice.

REASONS FOR DECISION

[1]

The appellant appeals his convictions for two
    counts of touching his stepdaughter, A.G., for a sexual purpose, contrary to s.
    151 of the
Criminal Code
, when she was between 10 and 14 years of age,
    during the period 1996 to 2002. The appellant disputes all allegations. He did
    not testify at trial.

[2]

The appellant submits the trial judge
    misapprehended important evidence that supported the defence, failed to
    reconcile material inconsistencies in the evidence, unevenly scrutinized the
    Crown and defence evidence, and failed to provide adequate reasons. He asks for
    a new trial.

[3]

We do not agree that the trial judge made any
    reversible error.

[4]

At the end of the four-day judge-alone trial, the trial judge gave
    detailed oral reasons in which he thoroughly reviewed the relevant evidence in
    accordance with the parties submissions and the applicable legal principles.
    As the trial judge was required to do, he focused his analysis on the material
    inconsistencies in the trial evidence. As appellants counsel fairly
    acknowledged, the trial judge was not obliged to reconcile every inconsistency.
    The trial judge did not unfairly scrutinize the evidence but explained,
    correctly in our view, why the identified inconsistencies in A.G.s evidence
    did not detract from her credibility or reliability as a witness.

[5]

In particular, we are not persuaded by the appellants principal submissions
    on appeal that the trial judge erred in his assessment of the evidence
    concerning a letter that A.G. wrote and left for her mother, L.G., to find in
    2001 when she was 14 years old in which she alleged that the appellant had
    sexually abused her. The letter was not put into evidence; A.G. and L.G.
    testified about their recollections of its contents.

[6]

First, that the trial judge indicated that the letter was found in
    A.G.s desk drawer, which is where A.G. said she left it, rather than in her
    dresser drawer, as her mother testified, is of no moment. The trial judge was
    alive to the defence theory that A.G. made false allegations and wanted her
    mother to find the letter so that the appellant would be removed from their
    home. And this is exactly what ensued: the mother found and read the letter,
    confronted the appellant, and the appellant left the house until the mother
    permitted him several weeks later to return.

[7]

Further, we do not accept that the trial judge applied inappropriate
    stereotyping to the mothers emotional reaction in reading A.G.s allegations.
    The trial judge determined that the mother could not remember the same details
    about the letters contents that A.G. was able to recount because, in part, she
    was startled and overwhelmed by them. The trial judges assessment was
    reasonable and reflected the mothers evidence that she was devastated by the
    letter that contained allegations about her partner sexually abusing her
    daughter.

[8]

In their essence, the appellants submissions amount to a request that
    this court redo the trial judges findings of fact and reweigh the trial
    evidence. That is not the function of this court. We see no error that warrants
    appellate intervention.

Disposition

[9]

For these reasons, we dismiss the appeal.

J.C. MacPherson
    J.A.

L.B.
    Roberts J.A.

B.W.
    Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Rowe, 2021 ONCA 684

DATE: 20211006

DOCKET: C67618

Fairburn A.C.J.O., van Rensburg
    and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen

Appellant

and

Lance Rowe

Respondent

Tom Lemon and Bari Crackower, for the
    appellant

Marianne Salih and Jeffery Couse, for
    the respondent

Heard: March 25, 2021 by video
    conference

On appeal from the acquittals entered by
    Justice Peter Bawden of the Superior Court of Justice, sitting with a jury, on
    October 16, 2019.

Fairburn A.C.J.O.:

A.

Overview

[1]

The respondent was tried by a judge and jury on
    a two-count indictment: (1) possession of cocaine for the purpose of
    trafficking; and (2) possession of the proceeds of crime. He was acquitted on
    both counts.

[2]

The charges arose from an alleged drug
    transaction that was said to have taken place inside a vehicle that the
    respondent was driving. Britany Simpson was in the front passenger seat. The
    respondent parked the car in a parking lot and an unknown man entered the back seat
    of the car. According to the Crown, the unknown male bought cocaine from the
    respondent and exited the car. The respondent was then arrested by police who
    had been watching the vehicle from afar.

[3]

Ms. Simpson was detained by police upon the
    respondents vehicle being searched. The search revealed cash and cocaine. Ms.
    Simpson was then arrested as well. A few hours later, after Ms. Simpson was
    informed that she was being unconditionally released, she provided a
    videorecorded statement to the police. She explained what she had witnessed,
    including that the respondent had weighed a white powdery substance and given it
    to the unknown male in the back seat in exchange for a handful of $20 bills.
    Ms. Simpson recanted that statement at trial, instead maintaining during her trial
    testimony that the respondent and the unknown male did nothing but conversate.

[4]

Unsuccessful in the effort to refresh Ms.
    Simpsons memory with the use of her prior statement, the Crown successfully applied
    to cross-examine her pursuant to s. 9(2) of the
Canada Evidence Act
,
    R.S.C., 1985, c. C-5 (
CEA
). Ms. Simpson refused to adopt the
    statement, claiming instead that she had lied to the police, simply telling
    them what she thought they had wanted to hear.

[5]

In the face of her full recantation, the Crown
    applied to have the statement admitted for the truth of its contents under the
    principled exception to the rule against hearsay. That application was
    dismissed. In accordance with that ruling, the trial judge instructed the jury
    that, while they could consider Ms. Simpsons prior police statement for
    purposes of determining her credibility, they could not consider the statement
    for the truth of its contents.

[6]

This Crown appeal rests on what are said to be numerous
    errors in the trial judges hearsay ruling. I agree. The hearsay ruling
    contains multiple errors that resulted in the erroneous exclusion of this
    critical evidence. A new trial is required.

B.

Background Circumstances Informing the Admissibility of the Hearsay
    Statement

(1)

The Arrest and
    Search

[7]

The respondent
    was being investigated for drug trafficking. The police obtained two search
    warrants: one for the respondents car and one for his residential address. The
    warrants were to be executed on March 27, 2018, the same day that the police
    planned to arrest the respondent.

[8]

The police were
    waiting at a location where they knew the respondent would arrive. When he
    arrived, Ms. Simpson was seated in the front passenger seat of his car. The
    police saw another vehicle pull into the parking lot a short time later.
An unknown male got out of the second vehicle and entered the back seat
    of the respondents car. While the police could not see exactly what took place
    within the car, it appeared to one officer that the man in the back seat and
    the respondent exchanged items. The unknown male then left the respondents
    car, returned to his own vehicle, and drove away.

[9]

The respondent was then arrested by the police
    and Ms. Simpson was detained. During the vehicle search, a plastic bag containing
    202 grams of cocaine was located on the rear floorboards behind the passenger seat.
    As well, $300 in $20 bills was found inside a compartment in the front console
    area of the car. Ms. Simpson was then arrested.

(2)

Britany Simpsons
    Videorecorded Statement

[10]

The respondent was arrested just after
    1:00 p.m. Ms. Simpson was arrested a short time later. A few hours after that, around
    4:00 p.m., the police decided to release Ms. Simpson without charges. Before
    leaving the police station, she provided a videorecorded statement about what
    she witnessed in the respondents car. Ms. Simpson confirmed at trial that,
    prior to giving her statement: (1) the police told her that she was being
    unconditionally released; and (2) the police had offered her the opportunity to
    speak to a lawyer but she had declined to do so.

[11]

In her videorecorded
    statement, Ms. Simpson provided significant details about what she saw during
    the transaction.
Some highlights from Ms.
    Simpsons statement include:

(1) The respondent and the unknown male in the
    back seat didnt discuss how much grams or anything like that  [the
    respondent] took the  bag out of the back seat.

(2) The clear plastic bag contained a powder
    that was white and soft, but it wasnt a liquid.

(3) The respondent retrieved the bag from just
    behind me.

(4) The man in the back seat put [a] scale
    down in between the arm rest.

(5) The respondent had a scoop and poured
    out some of the powder onto the scale, but Im not too sure how much.

(6) When the men finished  doing the
    exchange  [the respondent] put the bag  underneath his seat.

(7) The unknown male then asked [the
    respondent] if he had any weed. He said no he didnt sell weed and then  the
    gentleman in the back seat gave him money.

(8) I saw them counting  He was counting the
    money  It was in twenties.

(9) The respondent then put [the money] in
    the front console, described as the compartment in his car like in the little
    console. Like theres like a little pocket.

[12]

Ms. Simpsons videorecorded statement
    demonstrated that she was an eyewitness to a cocaine transaction that took
    place inches away from her. And, importantly, her statement aligned with what
    was found during the search of the vehicle: (1) a clear plastic bag containing
    202 grams of cocaine was located on the floor in the back of the vehicle, just
    behind the passenger seat; and (2) $300 in $20 bills were located in a
    compartment in the front console of the car.

[13]

As I will now explain, by the time of the trial,
    Ms. Simpson testified that she only saw the respondent and unknown male
    conversate. In other words, unlike what she told the police, she did not see
    them engage in a cocaine transaction.

(3)

Britany Simpsons Trial Evidence and the Rulings that Followed

[14]

Ms. Simpson was called as a Crown witness at
    trial. While her testimony was consistent with much of what she had previously told
    the police, it was inconsistent with respect to anything involving the
    respondents culpability. For instance, while she testified that the unknown
    male entered the back seat of the car, she said that the respondent and unknown
    male did nothing more than talk or, as she put it, conversate. Not a hint of
    white power, a scoop, a plastic bag, a scale, or money was mentioned.

[15]

While Ms. Simpson was given the opportunity to
    refresh her memory with a transcript produced from her prior videorecorded
    statement, she said that it was of no assistance. Accordingly, the Crown
    applied pursuant to s. 9(2) of the
CEA

to cross-examine Ms. Simpson on her prior inconsistent
    statement. That application was successful. The cross-examination was not.

[16]

The trial judge noted in his s. 9(2) ruling that
    Ms. Simpson acknowledged that she had not been threatened or induced to make the
    videorecorded statement. I share that view. The trial judge also noted that
    there was nothing oppressive about the interview. From having read the
    transcript of that interview, I also share that view. The trial judge further noted
    that much of what Ms. Simpson said was corroborated by information obtained by
    police through other aspects of the investigation. I share that view as well.

[17]

The trial judge then went on to explain in his
    s. 9(2) ruling what he thought was motivating Ms. Simpsons recantation:

Having viewed the video and heard the evidence
    of Ms. Simpson in the presence of the jury and in a
voir dire

I do not believe she lacks memory due to the trauma of the
    arrest or that she fabricated evidence because she believed the police wanted
    her to implicate Mr. Rowe
.

Based on all the
    evidence I believe that it is most likely that Ms. Simpson is trying to assist
    Mr. Rowe at this trial by giving false evidence
.
    [Emphasis added.]

[18]

Having concluded that Ms. Simpson was most
    likely lying, the trial judge permitted the Crown to cross-examine Ms. Simpson
    on her prior statement pursuant to s. 9(2) of the
CEA
. While Ms. Simpson
    acknowledged that she had said the things reflected in her police statement,
    she disavowed their truth.

[19]

Contrary to what she had told the police, Ms. Simpson
    maintained that she had not seen cocaine in the car that day. Instead, she
    claimed that she told the police what she assumed they wanted to hear. She
    said she did that because she was concerned about being late to pick up her
    children and about the police possibly having to cut off some jewelry she was
    wearing. Even so, she acknowledged that: (1) before giving the statement, she knew
    she was being released without charges; (2) no one told her that her release
    was conditional upon giving a statement; (3) no one promised her anything in
    return for the statement; and (4) no one shared any details about the
    investigation with her.

[20]

Following her recantation, the trial Crown
    signaled the desire to bring an application to have Ms. Simpsons statement
    admitted for the truth of its contents under the principled exception to the rule
    against hearsay. The trial judge immediately commented that any such
    application would be dodgy in nature. He seems to have been of the view that
    the Crown had enough evidence without Ms. Simpsons statement being admitted
    for its truth:

[The Crown] do[es]nt by
    any stretch need in the larger context of [its] case to introduce the statement
    for the purposes of its truth it seems to me because frankly [it] already ha[s]
    quite a powerful case
and  theres no risk at
    all that any trier of fact is going to look at Ms. Simpson and think that she
    was the one who was in the possession of the cocaine in the car. [Emphasis
    added.]

[21]

Despite the trial judges express reservations,
    the trial Crown informed the court the following day that she intended to
    pursue the hearsay application. The Crowns concern was that the defence would
    suggest that the cocaine found in the vehicle belonged to someone other than
    the respondent and that he had no knowledge of its presence in the vehicle. If
    admitted for the truth of its contents, Ms. Simpsons statement  an eyewitness
    account of the respondent selling the cocaine  would offer powerful evidence
    rebutting that anticipated defence position.

[22]

The trial judge said that he would hear the
    matter at the end of the Crowns case. Therefore, the Crown proceeded to call its
    last three witnesses.

[23]

Later that day, when the Crown reached the end
    of her case, the trial judge said: [B]efore you close your case I think you
    want to quickly for the record make submissions as to why I should admit the
    statement of Britany Simpson for the truth of its contents. The transcript
    does not reveal that the Crown simply wanted to put something on the record.
    Rather, the record demonstrates that the Crown wanted to pursue the hearsay application
    in earnest.

[24]

In any event, the trial Crown then offered the
    trial judge a copy of the decision in
R. v. Bradshaw
, 2017 SCC 35, [2017] 1 S.C.R. 865
. The
    trial judge declined the offer, saying that he did he did not wish to hear submissions
    on the law. Instead, he wanted to hear the Crown address what factually
    makes out reliability in the circumstances of the case.

[25]

The Crown first addressed procedural reliability,
    explaining that a statement being videorecorded is a procedural safeguard for
    reliability, and that Ms. Simpsons statement had been videorecorded. The trial
    judge interjected, suggesting that a videorecording was not present in this
    case because the Crown was not in a position today to present the jury with
    the video. The Crown confirmed that, if admitted into evidence, the videorecording
    would need to be edited for some prejudicial information in advance of playing
    it for the jury. It became clear that there would be no pause in the trial to
    permit the editing to take place.

[26]

The trial judge then asked a couple more
    questions, which the Crown answered. The Crown then said, I can continue my
    submissions or answer any other questions arising from that. The trial judge
    cut her off
,
saying, I think I have your submissions. He dismissed the
    application for reasons to follow, adding that if the defence evidence awakens
    [the] issue in a way which is presently utterly unforeseeable then the Crown
    could revisit the ruling.

(4)

The Defence Case:
    The Respondent and Sade Levene

[27]

The respondent testified exactly as the trial
    Crown had anticipated, claiming that many other drivers used the car, including
    his brother, cousin, girlfriend, ex-girlfriend, and roommate. Accordingly, he
    accepted that cocaine was found in the car, but claimed to have no knowledge of
    its existence, the inference being that someone else must have left it there.

[28]

Following the respondents in-chief testimony,
    the trial Crown requested permission to make submissions on how the evidence
    that [the respondent] has given makes the hearsay evidence  highly probative
    in the sense that Ms. Simpsons statement placed the drugs squarely in his
    hands moments before his arrest. The trial judge answered, Surely that hasnt
    changed. You didnt really think he was going to stand up and say anything
    other than he didnt know? The Crown then said she was having a hard time
    understanding why that is not sufficiently material or probative to overcome
    any prejudice but acknowledged that she would have to await the written
    ruling. That ruling was released about a month following the trial.

[29]

At the end of the respondents evidence, the
    defence called Ms. Levene to the stand. She was the respondents former
    girlfriend and, essentially, took full responsibility for the cash and cocaine
    that was found in the car.

[30]

Ms. Levene said that she had used the
    respondents car to go to the bank during the morning of the day that the
    respondent was arrested. She had taken out $300 in $20 bills, which she placed
    in the compartment of the vehicle where the gear stick is located. She also
    said that she met up with her then boyfriend after her attendance at the bank.
    She said that he asked her to hold onto a plastic bag for the day. She
    identified the bag that contained the cocaine as the one that her then
    boyfriend had given to her. She said that she had placed that bag on the floor
    in the backseat kind of under the passenger seat.

[31]

In other words, she placed both the cash and the
    bag in the locations where they were later found by the police.

C.

The Erroneous
    Approach to the Admissibility Inquiry

(1)

Overview

[32]

Hearsay is an out-of-court statement relied upon
    for the truth of its contents. Hearsay statements are presumptively
    inadmissible:
R. v. Khelawon
, 2006 SCC 57, [2006] 2 S.C.R. 787, at
    para. 2.

[33]

The primary rationale underlying the rule
    against hearsay is rooted in concerns over the inability to test the
    reliability of out-of-court statements. Absent the declarant being present in
    court and available for contemporaneous cross-examination, concerns over
    reliability prevail. These concerns include whether the statement is accurately
    recorded and whether the declarant accurately and honestly perceived, recalled,
    and narrated the events:
Khelawon
, at para. 2.

[34]

Accordingly, the presumption against the admissibility
    of hearsay evidence is directed at improving the courts truth-seeking
    function:
Khelawon
, at para. 2. However, there are times (like this
    case) when the exclusion of hearsay statements will directly undermine the
    courts fact-finding process; where the exclusion of hearsay statements, rather
    than their admission, will impede accurate fact finding:
Khelawon
, at
    para. 2;
Bradshaw
, at para. 22.

[35]

Accordingly, trial judges perform an important
    gatekeeping function when considering whether the presumption against admission
    has been rebutted. In making that determination, judges focus upon whether the
    twin criteria of necessity and threshold reliability have been met on a balance
    of probabilities:
Bradshaw
, at para. 23, referring to
Khelawon
,
    at para. 47. Even where that burden has been met, trial judges retain a
    residual discretion to nonetheless exclude the statements if their prejudicial
    effect outweighs their probative value:
Khelawon
, at para. 3.

(2)

The Erroneous
    Approach to Necessity

[36]

The trial judges assessment of necessity was as
    follows:

I will assume for
    present purposes that necessity is made out although I have reservations on the
    point
. It is true that the Crown has been
    deprived of the fulsome description of a drug transaction which appears in Ms.
    Simpsons statement to police.
There is, however,
    reliable evidence from other sources which would permit the jury to infer that
    a drug transaction took place without considering Ms. Simpsons statement for
    the truth of its contents
. [Emphasis added.]

[37]

The appellant argues that the trial judge erred in
    his necessity analysis. In particular, the appellant argues that, even though
    the trial judge said that he was prepared to assume necessity had been made
    out, read in context, he did not accept that fact. As a result, his expressed
    reservations about necessity infected the balance of his decision.

[38]

The respondent maintains that, even if the trial
    judge was wrong about how he expressed his reservations, it had no effect on
    the result, since his reasoning must ultimately be taken at its highest. The
    fact that the trial judge said that he was prepared to assume that necessity had
    been made out should be accepted by this court and provide a full answer to
    this objection on appeal.

[39]

I start with the observation that the trial
    judges expressed reservation about whether necessity had been made out appears
    to rest on his view of the overall strength of the Crowns case. The trial
    judge saw the Crowns case as a strong one and equated that view with a lack of
    necessity. As in the passage just quoted, the trial judge emphasized that
    without considering Ms. Simpsons statement for the truth of its contents,
    the jury had reliable evidence from other sources that would permit the
    inference that a drug transaction took place. Later in his reasons, the trial
    judge put the point succinctly: the Crown
hardly needs
the statement to make out its case (emphasis added).

[40]

In my view, the trial judge erred by approaching
    necessity from the perspective of what he thought the Crown needed to make out
    its case. Every participant in a criminal trial operates within their own zone
    of responsibility. That is how fair trials that lead to just verdicts are best
    achieved. It was for the Crown, not the trial judge, to determine what evidence
    was necessary to prosecute the matter; it was for the trial judge to adjudicate
    upon any admissibility issues that might have arisen from the Crowns decisions
    in that regard.

[41]

Under the principled exception to the rule
    against hearsay, necessity is not measured by the overall strength of the case
    of the party seeking admission of the statement for the truth of its contents.
    That is, [t]he criterion of necessity [] does not have the sense of
    necessary to the prosecutions case:
R. v. Smith
, [1992] 2 S.C.R.
    915, at p. 933.

[42]

Rather, necessity is measured by availability.
    Sometimes a hearsay statement becomes unavailable because a witness goes
    missing, dies, or is otherwise unavailable to testify. And sometimes a
    statement becomes unavailable because a witness is present and available to
    testify, but refuses to do so or, as in this case, recants the earlier
    statement. In the case of a recantation, the recanting witness holds the prior
    statement, and thus the relevant evidence, hostage:
R. v. B. (K.G.)
,
    [1993] 1 S.C.R. 740, at p. 799. In these circumstances, necessity arises from the
    unavailability of the testimony that would otherwise reflect the content of the
    prior relevant statement:
Khelawon
, at para. 78.

[43]

Accordingly, [w]here a witness recants from a
    prior statement, necessity is established:
R. v. Youvarajah
, 2013 SCC
    41, [2013] 2 S.C.R. 720, at para. 22. It is that simple. The focus then turns
    to threshold reliability.

[44]

While I accept that the trial judge did as he stated  that he assume[d]
    for present purposes that necessity [was] made out  the erroneous observations
    he made about the fact that, in his view, the Crown hardly needed Ms.
    Simpsons statement bled into his analysis regarding the exercise of his
    residual discretion. I will come back to this point later in these reasons.

(3)

The Erroneous Approach to Threshold Reliability

(a)

Overview

[45]

Threshold reliability can be shown by
    demonstrating that there are: (1) adequate substitutes in place to test the
    truth of the statement (procedural reliability); or (2) sufficient
    circumstantial or evidentiary guarantees that the statement is inherently
    trustworthy (substantive reliability):
Bradshaw
, at para. 27;
Khelawon
,
    at paras. 61-63; and
Youvarajah
, at para. 30. Procedural and
    substantive reliability do not exist in mutually exclusive silos, but rather work
    in tandem to overcome hearsay dangers:
Bradshaw
, at para. 32;
R.
    v. Devine
, 2008 SCC 36, [2008] 2 S.C.R. 283, at para. 22. Therefore,
    strength in one area, such as substantive reliability, can be compensated for
    by procedural reliability and the opposite is also true.

[46]

The appellant maintains that the trial judge
    erred in his approach to both procedural and substantive reliability. I agree.
    I will address each in turn.

(b)

Procedural Reliability

[47]

Because hearsay evidence is not given by a
    witness in court under oath or affirmation, and is not subjected to the typical
    rigours of contemporaneous cross-examination, procedural reliability focuses
    upon whether there exist adequate substitutes for testing the statement:
Bradshaw
,
    at para. 28;
Khelawon
, at para. 63.

[48]

Over time, courts have come to recognize three ways
    of rationally evaluating the truth and accuracy of hearsay statements from a
    procedural perspective: (1) the availability of the declarant to be
    cross-examined before the trier of fact; (2) the presence of an oath or solemn
    affirmation after a caution about the consequences arising from being
    untruthful; and (3) videotaping or recording the statement in its entirety:
B.
    (K.G.)
,
at pp. 795-96;
Youvarajah
,

at para. 29.

[49]

The trial judge was of the view that the one
    and only procedural safeguard present in this case was that Ms. Simpsons statement
    was videorecorded, yet, in his view, that videorecording was not available to
    be played for the trier of fact. Accordingly, the trial judge formed the view
    that the statement contained no procedural safeguards.

[50]

The appellant argues that the trial judge erred in
    numerous respects when he arrived at this conclusion.

(i)

The
Failure to Acknowledge the Availability of the Declarant for Cross-Examination

[51]

First, the appellant maintains that the trial
    judge erred by failing to appreciate the single most significant procedural
    safeguard that was present: Ms. Simpsons availability for cross-examination.

[52]

While the respondent acknowledges that the trial
    judge overlooked the fact that Ms. Simpson was available for cross-examination,
    he claims that no harm was caused by this oversight because it would not have
    resulted in admissibility in any event. The respondent maintains that, because
    Ms. Simpson had lost her memory of what happened while she was seated in the
    car that day, a cross-examination on the statement to undermine its truth would
    have been useless. Accordingly, the respondent contends that, in the
    circumstances of this case, the procedural safeguard typically attaching to the
    availability of the declarant to be cross-examined was no procedural safeguard
    at all.

[53]

I start with the observation that the
    availability of the declarant for cross-examination is widely considered the
    most important of the three procedural safeguards:
R. v. U. (F.J.)
, [1995]
    3 S.C.R. 764, at para. 39. The status of the declarant as a witness who can be
    cross-examined on a prior inconsistent out-of-court statement has been
    described as the most powerful factor favouring admissibility:
R. v.
Couture
,
    2007 SCC 28, [2007] 2 S.C.R. 517, at para. 95. The importance of the
    declarants participation in court before the trier of fact was again
    reinforced in
Youv
arajah
,
at para. 35, where this factor was
    described as the most important factor supporting the admissibility of a prior
    inconsistent statement of a non-accused witness for the truth of its contents.
    Indeed, as more recently noted in
Bradshaw
, at para. 28, Some
    safeguards imposed at trial,
such as cross-examination of
    a recanting witness before the trier of fact
, may provide a satisfactory
    basis for testing the evidence (emphasis added).

[54]

The trial judge erred by failing to take this
    fundamental procedural safeguard into account during the admissibility
    analysis.

[55]

Respectfully, I do not agree with the
    respondents suggestion that Ms. Simpson had no memory of the events in
    question and, therefore, could not have been cross-examined effectively. Ms.
    Simpson had a memory of that day, it just did not accord with her police
    statement. The juxtaposition was significant. In her police statement, she
    recounted in fine detail the cocaine trafficking that took place in her
    immediate presence. In her trial testimony, she explained that she had never
    seen the respondent in possession of cocaine and, on the day in question, only
    saw and listened to the respondent and unknown male conversate. That is not a
    lack of memory; it is an entirely different version of events.

(ii)

The
Overemphasis on the Lack of Oath and Caution

[56]

Second, the appellant claims that the trial
    judge overemphasized the fact that the statement was not provided under oath or
    solemn affirmation, nor with any caution about the importance of telling the
    truth and the consequences of lying. The trial judge said:

The
interview proceeded without any reference to the necessity of
    telling the truth. Ms. Simpson was not sworn. She was not provided with any
    form of caution regarding the potential consequences of being untruthful. There
    was no attempt to adopt any form of solemnity which would bring home to Ms.
    Simpson the necessity of providing a truthful statement.

[57]

In my view, the trial judge placed undue
    emphasis on the factors relating to whether Ms. Simpson understood that she
    should tell the truth. While the trial judge is right that Ms. Simpson was not sworn
    or asked to affirm, nor was she cautioned about failing to tell the truth, these
    were not particularly concerning features of this case.

[58]

While it would have been preferable for the
    police to have specifically brought the solemnity of the moment home to Ms.
    Simpson, it is difficult to imagine that she did not appreciate the need to
    tell the truth. The statement forming the subject of the admissibility inquiry
    was not made in a random location to a random member of the public. She was in
    a police station, while on video, speaking to police officers. She had been
    arrested earlier in the day and agreed that she had been told that she was
    going to be released without charges. In these circumstances, whether she was
    told it or not, it is highly unlikely that Ms. Simpson would not have
    appreciated the solemnity of the occasion and the need to tell the truth.

[59]

In any event, the
    oath or affirmation was the least necessary of the procedural safeguards. To
    this end, I would echo the suggestion by Moldaver J.A. (as he then was)
that, when an out-of-court statement is videorecorded and the
    declarant is available for cross-examination, the oath has very little burden
    to shoulder in the threshold reliability assessment:
R. v. Trieu
(2005)
, 74 O.R. (3d) 481 (C.A.), at
    para. 78. The situation described in
Trieu
is precisely the one here,
    with Ms. Simpson available for cross-examination and her recanted statement
    having been videorecorded.

(iii)

The
Treatment of the Statement as if it was not Captured on Video

[60]

This takes us to the appellants third alleged
    error in the trial judges procedural reliability analysis: treating Ms.
    Simpsons statement as if it was not videorecorded. As before, the trial judge
    formed the view that the one and only procedural safeguard in this case would
    have been that Ms. Simpsons recanted statement had been videorecorded. Yet, in
    the trial judges view, because the videorecording required some editing, it had
    to be removed as a factor pointing toward procedural reliability:

The Crown is not able to play the video to the
    jury because of inadmissible utterances which have not been vetted from the
    digital file. Thus, if the statement were to be admitted, the jury would only
    hear the Crown read a transcript of the statement and would be deprived of its
    one and only procedural safeguard.

[61]

The appellant argues that the trial judge erred
    by neutralizing the force of this procedural safeguard  the fact that the
    statement was videorecorded  simply on the basis that the videorecording required
    some editing. Further, the appellant argues that, even if the court was not
    prepared to give the Crown time to make the necessary edits, an accurate
    transcript of that videorecording existed and could have acted as an adequate
    substitute for the videorecording.

[62]

The respondent does not dispute that the
    statement was videorecorded. Ultimately, though, the respondent emphasizes that
    failing to have the videorecording in a ready-to-play state means that the trial
    Crown must bear the sole responsibility for the trial judges treatment of the
    videorecording as non-existent, thus removing it from the procedural
    reliability calculus.

[63]

The fact is that the videorecording was an
    important procedural safeguard attaching to Ms. Simpsons statement. As Lamer C.J.
    described in
B. (K.G.)
, videotaping is a powerful tool in respect of
    reliability because it essentially places the trier of fact in the same room as
    the declarant and the interviewer. As a result, the experience of being in the
    room with the witness and the interviewing officer is recreated as fully as
    possible for the viewer  In a very real sense, the evidence ceases to be
    hearsay in this important respect, since the hearsay declarant is brought
    before the trier of fact: at p. 793. Of course, when the declarant is a
    recanting witness, such as Ms. Simpson, not only is the declarant before the
    trier of fact on video, but she is also before the trier of fact in the witness
    stand.

[64]

Accordingly, the importance of the
    videorecording to the determination of procedural reliability in this case cannot
    be denied. The question is whether the trial judge erred by treating Ms.
    Simpsons statement as if it had not been videorecorded only because it was not
    in a ready-to-play state at the very moment of the admissibility
voir dire
.

[65]

Context is important to understanding this
    issue.

[66]

The appellant does not dispute that there were some
    prejudicial portions of the videorecording that would have required editing before
    the videorecording could be played for the jury. The need for those edits arose
    from the fact that Ms. Simpson told the police that the respondent went to the
    parking lot where he was subsequently arrested because he had told her that he
    needed to attend at a probation/parole appointment.

[67]

Therefore, the need for edits was clear. What is
    not clear is how long that editing exercise would have taken. The reason it is
    not clear is that the trial Crown was essentially cut off from making
    submissions on this point at the
voir dire
.

[68]

After the trial Crown submitted that the
    existence of the videorecording provided an important procedural safeguard, the
    trial judge announced that it was not present in this case because the trial
    Crown was not in a position today to present the jury with the video. The
    Crown responded that treating the matter as if there was no videorecording was:

putting
the Crown in a difficult situation. I feel like if there was more
    time then I could rely on the availability of an edited video statement but it
    sounds as if given the timeline that the court would like us to follow Im effectively
    stuck with  a written transcript which is still a  record of the statement.

[69]

Clearly, the trial judge was of the view that
    the Crown should have been better prepared. As he said in his ruling, released nearly
    a month following the trial, the Crown did not meet with Ms. Simpson prior to
    trial and had seemingly not anticipated that she would deviate from the
    statement which she made to police. In the trial judges view, [t]hat
    possibility should have been anticipated.

[70]

No one can dispute the central importance of
    moving trials along in an organized and efficient manner. Every party to the
    proceeding, including the court, is obliged to tackle the culture of
    complacency towards delay, a culture that was addressed in
R. v. Jordan
,
    2016 SCC 27, [2016] 1 S.C.R. 631, at para. 40, and
R. v. Cody
, 2017
    SCC 31, [2017] 1 S.C.R. 659, at para. 37. In order to achieve this laudable
    goal, it is necessary that the parties come to court organized and prepared to
    efficiently move the case forward.

[71]

At the same time, it is not a rule of efficiency
    at all costs, including fairness.

[72]

It is difficult to know what facts the trial
    judge relied upon to conclude that the Crown had fallen short by failing to
    anticipate that Ms. Simpson would recant. While he implied that the failure of
    anticipation arose from the failure to meet with the witness ahead of time, the
    record does not reveal why the Crown did not meet with Ms. Simpson.

[73]

The court is not always privy to the things that
    motivate decisions around trial preparation. Speculation on these points can be
    a stranger to the truth. There are all manner of legitimate reasons why counsel
    may choose to meet or not meet with a witness ahead of trial and all manner of legitimate
    reasons why a witness may choose to meet or not meet with counsel ahead of
    trial.

[74]

While the trial judge is to be commended for his
    concern over moving this jury trial forward in an efficient manner, his summary
    removal of the videorecording from the procedural reliability analysis, simply
    because he thought that the Crown should have anticipated the possibility of
    a recantation, was an error.

[75]

Eight court days had been set aside for the
    trial, although the jury was told that it was likely to conclude in five or six
    days. By all accounts, the Crown had moved the prosecution forward efficiently.
    With the exception of the hearsay
voir dire
, the case for the Crown
    was complete by the afternoon of the fourth day of trial. Rather than cut off
    the Crowns submissions about the importance of the existence of the
    videorecording, the trial judge should have explored how long it would have
    taken the Crown to produce the edited version of the video. The record reveals
    no reason to believe that this could not have been accomplished in very short
    order.

[76]

With those meaningful inquiries having been
    made, the trial judge would have been in a better position to properly
    adjudicate upon the matter. If the editing exercise would have taken too long,
    particularly in the context of a jury trial, then the trial judge would have
    had to turn his mind to the existence of the transcript of the videorecorded statement
    as an alternative procedural safeguard. That transcript could have been edited
    in very short order, or the Crown could have read from the statement, simply
    leaving out the references to the prejudicial information.

[77]

Yet the trial judges reasons suggest that he
    considered the transcript to be meaningless in the admissibility inquiry. While
    not as strong a procedural safeguard as the videorecording, the transcript,
    representing an accurate recording of that statement, was in fact also an
    important procedural safeguard that should have been considered in the
    admissibility analysis. Even if he had been right about treating the statement
    as if it had not been videorecorded, the trial judge erred by underestimating the
    procedural value of the transcript of Ms. Simpsons statement.

(c)

Substantive Reliability

[78]

There is a critical distinction to be made
    between threshold and ultimate reliability. At the threshold stage, it is for
    the trial judge to determine whether there exist sufficient indicia of
    reliability so as to afford the trier of fact a satisfactory basis for
    evaluating the truth of the statement:
R. v. Baldree
, 2013 SCC 35,
    [2013] 2 S.C.R. 520, at para. 83, citing
R. v. Hawkins
, [1996] 3
    S.C.R. 1043, at para. 75;
Khelawon
, at para. 88. However, whether the
    statement is actually true remains within the exclusive jurisdiction of the
    trier of fact and, in a criminal trial involving a jury, it is
    constitutionally imperative that this be so:
Khelawon
, at para. 50.

[79]

The trial judge reviewed the evidence that
    corroborated Ms. Simpsons statement, of which there was a significant amount.
    In particular, the cash and cocaine found in the respondents vehicle, and the
    location of those items, accorded almost exactly with what she said in her
    statement. For instance, the twenty-dollar bills that she said that she saw the
    unknown male give to the respondent were found exactly where she said they had
    been placed by the respondent. As well, the plastic bag containing the white,
    powdery substance that she described was found near where she said it had been
    taken from. Coupled with the fact that Ms. Simpson acknowledged at trial that
    the police had not shared any investigative details with her, the corroboration
    arising from the search was nothing short of striking in nature.

[80]

Even so, the trial judge concluded that the
    Crown had failed to establish substantive reliability. His reasoning is
    captured in the following passage:

Although this is compelling corroboration of
    Ms. Simpson's statement, I cannot find that it meets the standard set out
    in
Bradshaw
. The standard for substantive reliability is high.
    Given the circumstances of this case,
I find that it is
    reasonably possible that Ms. Simpson fabricated her statement either to ensure
    her own release or to cover for her involvement in the drug transaction. I
    cannot say that the corroborative evidence is so strong that the only likely
    explanation for the hearsay statement is that Ms. Simpson was telling the truth
.
[Emphasis added]

[81]

The trial judge then concluded that the substantive
    reliability of the statement is insufficient to outweigh the
complete lack of procedural guarantees of reliability

    (emphasis added).

[82]

I start with the observation previously made, that
    procedural and substantive reliability work together to overcome hearsay
    dangers. They exist in a symbiotic relationship, with strength in one area
    compensating for weakness in another:
Bradshaw
, at para. 32;
Devine
,
    at para. 22.

[83]

For the reasons already set out, contrary to the
    trial judges suggestion that there was a complete lack of procedural
    guarantees of reliability, there were strong indicators of procedural
    reliability, the most important one being Ms. Simpsons availability for
    cross-examination. Therefore, as a starting point, it was erroneous to conclude
    that the substantive reliability of the statement was insufficient to
    outweigh the complete lack of procedural guarantees of reliability. To the
    contrary, the substantive reliability of the statement simply added to the
    procedural guarantees present in this case, all pointing toward the admission
    of Ms. Simpsons statement.

[84]

Second, I would note that the trial judge seems
    to have been proposing an alternative explanation for Ms. Simpsons statement, that
    she was fabricating to ensure her own release or to cover for her involvement
    in the drug transaction. While
Bradshaw
, at para. 48, instructs that when
    considering substantive reliability, the trial judge must  identify
    alternative, even speculative, explanations for the hearsay statement, the
    trial judges suggestion that Ms. Simpson was fabricating does not sit
    comfortably with the s. 9(2)
CEA

ruling provided during the
    trial proper.

[85]

In the s. 9(2) ruling, as previously reviewed,
    the trial judge concluded that Ms. Simpson was likely trying to assist the respondent
    by giving false evidence at trial (by recanting her statement). Yet the
    hearsay ruling reveals a conclusion that it was reasonably possible that Ms.
    Simpson fabricated her statement either to ensure her own release or to cover
    for her involvement in the drug transaction. It is somewhat difficult to
    reconcile these different conclusions, particularly in light of the trial
    judges comment that his findings on the principled exception to some degree
    incorporate [his] findings on the [s.] 9(2) [application].

[86]

Third, corroborative evidence can be of
    assistance in establishing substantive reliability if it shows that [the]
    alternative explanations are unavailable:
Bradshaw
, at para. 48. Ms.
    Simpson clearly admitted that the police did not share any details with her about
    what was found in the car nor the locations of such findings within the car.
    Therefore, considering the correspondence between what she told the police and
    what was found in the respondents car, it is difficult to determine how the
    corroborative evidence arising from the search did not meet the
Bradshaw
threshold.

[87]

In my view, absent the errors in the procedural
    and substantive reliability analysis, Ms. Simpsons recanted statement would
    have been found admissible.

(4)

The Erroneous Exercise
    of Residual Discretion

[88]

Finally, the trial judge held that, even if he
    was wrong in his conclusion about threshold reliability, he would nevertheless
    exercise [his] residual discretion to exclude the statement in order to
    maintain a fair trial.

[89]

The appellant claims that the trial judge erred here as well because
    he went on, not to measure the probative value of the statement against its
    prejudicial effect, but instead to return to the concept of measuring the strength
    of the Crowns case and then concluding that the evidence was simply
    unnecessary. As noted previously, in this part of his reasons, the trial judge
    said,
The Crown case
    might be stronger if the hearsay statement was admitted for its truth, but the
    Crown hardly needs the statement to make out its ca
se.

[90]

For the reasons already articulated under the
    necessity analysis, the trial judge should not have entered this arena. The
    question to be resolved under the residual discretion prong was not whether the
    trial judge thought that the Crown had enough evidence to prove the elements of
    the offence, but whether the statement that formed the subject of the
    admissibility
voir dire
was probative of an issue in dispute (it was)
    and whether the prejudicial impact of admitting that statement outweighed its
    probative value.

[91]

As for the statements prejudicial impact, the respondent
    emphasizes that the trial judge was properly concerned with the fact that
    admitting the statement for the truth of its contents could lead to an element
    of reasoning prejudice because it would trigger the need for an unnecessarily
    complex jury instruction.

[92]

While I do not discount that the jury would have
    had to have been instructed on how to approach the statement had it been
    admitted for a hearsay purpose, the reality is that the jury already knew about
    the existence of the statement because of the s. 9(2)
CEA
ruling.
    Therefore, the jury already needed, and in fact had received, a decisive legal
    instruction about how to deal with the prior inconsistent statement they heard
    about during Ms. Simpsons cross-examination by the trial Crown. That
    instruction required that the jury be told that the statement could be used solely
    for evaluating Ms. Simpsons credibility and the weight the jury would give her
    evidence.

[93]

In contrast, had the statement been admitted for
    the truth of its contents, then the instruction would have changed to reflect
    the fact that it was also part of the substantive evidence left for the jurys consideration
    while engaged in their fact-finding function.

[94]

While there is a significant legal difference
    between the instruction that the jury received, arising from the s. 9(2)
    cross-examination, and the instruction that the jury would have had to have received
    if the statement had gone the final distance and been admitted for the truth of
    its contents, there is little difference in the degree of complexity between
    those instructions. Both are well within the grasp of 12 intelligent members of
    the community to understand.

[95]

In my view, the trial judge erred by failing to
    come to grips with the necessary balancing exercise he was called upon to complete
    under his residual discretion: weighing the probative value of the statement
    against its prejudicial effect.

[96]

The probative value of the statement was high. It
    was the only evidence of an actual hand-to-hand exchange of cocaine for money. According
    to Ms. Simpsons statement, she was an eyewitness to that transaction.

[97]

At one point during submissions, the defence counsel
    at trial described the statement as highly toxic. I do not agree. A more
    accurate descriptor is that the statement was highly probative. Just because evidence
    is highly probative, does not mean it is toxic or prejudicial in any sense.

[98]

By excluding Ms. Simpsons hearsay statement,
    the truth-seeking function of the trial was undermined. By keeping that account
    from the jurys consideration, the jury was left to deliberate only on Ms. Simpsons
    exculpatory account of what went on in the car that day: a conversation between
    the respondent and the unknown male in the back seat. To return to
Khelawon
,
    at para. 2, and
Bradshaw
, at para. 22, having regard to the minimal
    dangers presented by the statement, its exclusion served to impede accurate
    fact finding.

D.

Conclusion

[99]

I am satisfied that the appellant has
    established that the erroneous ruling might reasonably be thought  to have
    had a material bearing on the acquittal[s]:
R. v. Graveline
, 2006 SCC
    16, [2006] 1 S.C.R. 609, at para. 14.

[100]

I would set aside the acquittals and order a new trial.

Released:  October 6, 2021 JMF

Fairburn
    A.C.J.O.

I
    agree. K. van Rensburg J.A.

I agree
    Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Salvatore v. Tommasini, 2021 ONCA 691

DATE: 20211006

DOCKET: C68972

Benotto, Brown and Harvison
    Young JJ.A.

BETWEEN

Alberino Albert Salvatore, 2232465 Ontario Limited,

and Sprint Mechanical Inc.

Plaintiffs
    (Appellants)

and

David
    Tommasini, Anna Rucchetto, Four Seasons Aviation Ltd.,

and Sky Ship
    Capital Corp.

Defendants
    (Respondents)

Alan G. McConnell, for the appellants

Stephen Dale Denis, for the respondents

Heard: September 8, 2021 by video conference

On
    appeal from the judgment of Justice Edward M. Morgan of the Superior Court of
    Justice, dated December 9, 2020, with reasons reported at 2020 ONSC 7619.

REASONS FOR DECISION

INTRODUCTION

[1]

The
appellants,
Alberino
    Albert Salvatore, 2232465 Ontario Limited, and Sprint Mechanical Inc.,
appeal the order of the motion judge granting summary judgment dismissing their
    action against the respondents
David Tommasini, Anna
    Rucchetto, Four Seasons Aviation Ltd., and Sky Ship Capital Corp.

[2]

The appellants and some of the respondents entered into a series of
    documents regarding the acquisition and operation of a helicopter: a June 24,
    2016 Letter of Intent (the LOI); an LOI amending agreement dated July 15,
    2016 (the July Letter Agreement); a September 14, 2016 Aircraft Management
    Agreement (the AMA); and a September 14, 2016 AMA amending agreement (the September
    Letter Agreement).

[3]

In the action, the appellants alleged that the agreements contained a
    binding obligation on the part of the respondents to pay for one-half of the
    acquisition cost of the helicopter (the Buy-in Claim). As well, the
    appellants alleged that the respondents breached other provisions in the documents
    causing damage to the appellants.

[4]

The motion judge granted summary judgment dismissing the action. The
    appellants appeal. At the hearing, we dismissed the appeal with reasons to
    follow. These are those reasons.

THE MAIN GROUNDS OF APPEAL

[5]

The appellants advance two main grounds of appeal: (i) the motion judge
    erred in finding that the respondents were not subject to an enforceable
    promise to pay the appellant half of the acquisition cost of the helicopter;
    and (ii) the motion judge erred in dismissing the action in its entirety,
    instead of permitting some of the claims to proceed to trial.

The Buy-in Claim

[6]

Article 14.13 of the AMA  the so-called entire agreement clause  provided,
    in part, that [t]his Agreement and the matters referred to herein constitute
    the entire agreement between Owner and Operator regarding the subject matter
    hereof. The clause went on to state that the AMA superseded and cancelled all
    prior agreements with respect to or in connection with the subject matter of
    this Agreement.

[7]

We accept the appellants submission that the motion judge erred in law
    by holding that art. 14.13 of the AMA expressly cancelled the LOI and July
    Letter Agreement. In reaching that conclusion, the motion judge failed to interpret
    art. 14.13 within the context of the entire AMA, contrary to the general
    principles of contract interpretation: Geoff R. Hall,
Canadian
    Contractual Interpretation Law
, 3rd ed. (Toronto: LexisNexis, 2016),
    §2.2.1.

[8]

One recital to the AMA specifically stated:

AND WHEREAS the principals of the Operator, David Tommasini and
    Anna [Rucchetto], have agreed to acquire, and the principal of the Owner,
    Albert Salvatore, have agreed to convey, a direct or indirect 50% interest in
    the Owner, or the successor owner of the Aircraft, as the case may be (the
    Buy-in).

[9]

Accordingly, by its terms the AMA recognized the existence of a Buy-in
    arrangement amongst some of the parties outside of the four corners of the AMA.
    When art. 14.13 is read in that context, it is clear that the subject matter
    of the AMA dealt with the operation of the helicopter, not the Buy-in
    obligations that existed between the parties.

[10]

However,
    in our view that error in law was of no consequence. We see no reversible error
    in the motion judges conclusion, at paras. 21 and 22, that the LOI and July
    Letter Agreement lacked sufficient material facts to characterize them as legal
    contracts, especially given
the absence of the fundamental
    business terms on which the co-ownership of the Sikorsky and the jointly owned
    business of the parties in operating the helicopter would be built.

[11]

When the Buy-in and Owners Agreement sections of the LOI are read
    together, they provide: (i) the respondents agreed to pay 50% of the
    helicopters acquisition costs after one year, termed the Buy-in Amount; (ii)
    upon receipt of the Buy-in Amount, Albert Salvatore would convey to the
    respondents a one half-interest in the entity that owned the helicopter, termed
    the Buyer; (iii) while the legal form and structure of the ownership of the
    helicopter had not yet been settled, the end result is that the ownership and
    operation of the Aircraft is to be as a separate stand-alone business, directly
    or indirectly owned and controlled by Albert and David/Anna, each as to 50%;
    (iv) the LOI referred to the entity that owned the helicopter as the Owner;
    and (v) Albert and David/Anna shall enter into a definitive agreement in
    respect of the Owner (which will be the form of a Partnership Agreement,
    Shareholders Agreement or some other form, depending on the final structure of
    the Aircraft ownership).

[12]

In other words, the LOI contemplated a quid pro quo under which
    the respondents would, after one year, pay 50% of the acquisition costs of the
    helicopter in return for which they would receive a one-half interest in the
    entity that ultimately owned the helicopter and operated the stand-alone helicopter
    business. The rights and obligations of those with an interest in the Owner
    were to be set out in a definitive Owners Agreement.

[13]

In his reasons, the motion judge observed, at para. 23, that

[o]n its face, the LOI made any further business dealings
    with respect to the helicopter conditional on the negotiation of what it dubbed
    a definitive agreement settling all material aspects of the separate
    stand-alone business of owning and operating it. In our view, that was an
    accurate interpretation of the LOI.

[14]

In the result, the parties never entered into an Owners Agreement.
    In the absence of such an agreement, there was no certainty about what bundle
    of ownership rights and obligations the respondents would receive or be subject
    to upon their payment of the Buy-in Amount. Put colloquially, the parties never
    agreed on the quid that the respondents would receive in return for their
    quo  namely, their payment of the Buy-in Amount. In those circumstances, we
    see no reversible error in the motion judges conclusion that there was no
    genuine issue requiring a trial with respect to the appellants Buy-in Claim
    and breach of the duty of good faith claim.

The AMA and Internal Cost Claims

[15]

In
    their statement of claim, the appellants also alleged two other types of breach
    of contract. First, the appellants pleaded that the respondents failed to
    reimburse them for the respondents costs associated with the importation,
    registration and adding the Helicopter to the Four Seasons AOC: Statement of
    Claim, para. 31 (the Internal Cost Claim). Second, the appellants alleged
    that the respondents had breached certain provisions of the AMA, including one
    dealing with a short form lease: Statement of Claim, paras. 38, 41 and 47 (the
    AMA Claims). In para. 50 of their statement of claim, the appellants pleaded
    that, as a result of these breaches, they had suffered damages estimated at
    $225,000 in respect of costs of finding a replacement aircraft on a temporary
    basis and eventually a new hangar facility, pilot and maintenance for the
    helicopter, as well as an estimated $300,000.00 in future lost profits from
    the Venture.

[16]

In
    granting summary judgment, the motion judge dismissed the action in its
    entirety, including the AMA and Internal Cost Claims. However, the motion
    judges reasons did not address those claims. They should have. Nonetheless,
    that omission does not alter the result in this case.

[17]

This
    was a summary judgment motion. The respondents notice of motion clearly sought
    the dismissal of the entire action. In response to such a request for relief,
    the appellants were obliged to put their best foot forward. Yet, the appellants
    failed to adduce any evidence particularizing or supporting their pleaded AMA
    and Internal Cost Claims.

[18]

In
    his affidavit filed on behalf of the appellants, Mr. Ian Bergeron made the general
    statement that [t]he refusal to pay the Buy-in was followed by further
    breaches of the agreement between the parties by the defendants, resulting in
    damages being suffered by the plaintiffs as detailed in the pleadings herein.
    Mr. Bergeron did not specify the damages suffered or adduce any evidence to
    support or quantify such damages. As a result, there was no evidence before the
    motion judge that would have permitted him to conclude that there was a genuine
    issue requiring trial regarding any damages suffered by the appellants in
    respect of their AMA and Internal Cost Claims. Accordingly, we see no error in
    the motion judges dismissal of the action as a whole.

DISPOSITION

[19]

For
    the reasons set out above, the appeal is dismissed.

[20]

In accordance with the agreement of the parties, the respondents
    are entitled to their partial indemnity costs of the appeal fixed in the amount
    of $43,663.20, inclusive of disbursements and applicable taxes. The parties
    have agreed that the appellants shall pay those costs of the appeal, together
    with the costs awarded below, on or before December 8, 2021.

M.L.
    Benotto J.A.

David
    Brown J.A.

Harvison
    Young J.A.