CITATION:
Cleveland v. Whelan, 2011
      ONCA 244

DATE: 20110330

DOCKET: C51555

COURT OF APPEAL FOR ONTARIO

Cronk, Blair and LaForme JJ.A.

BETWEEN

Tyler
          Cleveland, Emily Cleveland, and Abigail Cleveland minors by
          their Litigation Guardian, Chris Cleveland, Chris
          Cleveland, personally, and Kim Cleveland

Plaintiffs (Respondents)

and

Hamilton
          Health Sciences Corporation (

Henderson
          General Division),
Donald
          Thomas Whelan
, Narsys Punthake, Frederick Eggleton, Penny Thomson,
          Michael Burger, B. Mark Hildebrand, John Doe, Her Majesty
          the Queen in Right of

Ontario,
          Helen Demshar, John Thornley, John Doe No. 1
          and Jane Doe No. 2

Defendant (Appellant)

Harry C.G. Underwood and Meighan E. Leon, for the appellant

Brian J.E. Brock, Q.C., for the respondents

Heard: October 6, 2010

On appeal from the decision of
          Justice Joan L. Lax of the Superior Court of Justice dated December 15, 2009,
          reported at 2009 CanLII 70130 (ON S.C.).

H.S.
          LaForme J.A.:

INTRODUCTION

[1]

Since 1965, all

Ontario
    newborn infants have been routinely and impersonally screened through the
    administration of a blood test (the Guthrie test) for the presence of phenylketonuria,
    a congenital disorder also known as PKU.  This case concerns testing for PKU.

[2]

PKU is caused by a defect in the activity of the
    phenylalanine hydroxylase enzyme, resulting in the bodys inability to
    metabolize phenylalanine (phe), an amino acid.  If left untreated, PKU can interfere with
    normal brain development and, among other things, result in permanent brain
    damage.

[3]

The Guthrie test is part of the Ontario Newborn
    Screening Program and aims to identify those infants with treatable forms of
    PKU as early as possible.  Infants with
    PKU normally begin treatment around one month of age.

[4]

In 1996, the testing of all newborn blood specimens for
    PKU in

Ontario
    was done by the Laboratory Services Branch of the Ministry of Health (the
    Crown Lab).  Results from Guthrie tests
    were reported back to one of five regional consultants under the Ontario
    Newborn Screening Program.  The regional
    consultant in the respondent Tyler Clevelands case was the appellant, Dr.
    Thomas Whelan.

FACTUAL BACKGROUND

[5]

Elevated levels of phe, which reflect a condition
    called hyperphenylalanemia (hyperphe) may, but need not, be confirmatory of
    PKU. Considerable variation in phe levels can occur. In summary, levels of phe:

●

ranging between 40-80
μ
mol/L
[1]
and usually under 120
μ
mol/L

)

)

generally appear in a
          healthy patient

●

consistently above 480
          or 600
μ
mol/L, but less than
          1200
μ
mol/L

)

)

indicate atypical
          (mild) PKU

●

below 480 or 600
μ
mol/L

)

)

indicate persistent benign
          hyperphe

●

below 480 or 600
μ
mol/L, normalizing within a few
          weeks to months

)

)

indicate transient
          hyperphe

●

mild levels to levels
          as high as 1200
μ
mol/L

)

)

)

may be indicative of a
          rare disorder called biopterin deficiency

●

greater than 1200
μ
mol/L

)

)

indicate severe classical
          PKU

[6]

Tyler and his twin sister were born on September 5,
    1996.

Tylers initial Guthrie test at two days of
    age reported a phe value as elevated, 0.24 mmol/L
[2]
(240
μ
mol/L).  His second Guthrie test at seven days of age
    was again reported as elevated, 0.24 mmol/L (240
μ
mol/L).  For the
    purpose of the

Ontario
    Newborn Screening Program, a phe value at or above 240
μ
mol/L was considered positive for PKU.  Under the Guthrie test, however, the true
    value of phe concentrations could vary by
³
100
μ
mol/L.  Thus, as a
    semi-quantiative test, it did not provide a precise indication of actual phe
    levels.

[7]

Dr. Whelan ordered a third Guthrie test to be taken at
    one month of age.  The third test was
    reported by the Crown Lab as not elevated.  No further clinical or laboratory follow-up was arranged for

Tyler at that time.

[8]

In 1998, as a result of developmental concerns,

Tyler was referred to a
    developmental paediatrician for further investigation.  In August 1999, at the age of almost three,

Tyler was diagnosed with
    classical PKU, the most severe form of the disorder.  At that time, his phe level was measured at
    just above 2400
μ
mol/L.

[9]

In
    the fall of 1999, after
Tylers diagnosis of
    classical PKU, his original newborn specimens were retrieved and retested at
    the Hospital for Sick Children in

Toronto
    using a quantitative testing method.  The
    results of these tests indicated that:

Tylers
    first blood specimen (taken at two days of age) had a phe level of 273

μ
mol/L
; his second specimen (taken at
    seven days of age) had a phe level of 407
μ
mol/L
; and,
    his third specimen (taken at 33 days of age) had a phe level of 85
μ
mol/L
.

[10]

Tyler
s third specimen was also retested
    by the Ministry of Health in October 1999.  This test yielded a phe value of 160

μ
mol/L
.

[11]

Following
Tylers
    diagnosis, the

Cleveland
    family brought an action in negligence against various parties, including the
    Crown and Dr. Whelan.  Prior to trial,
    the action was dismissed against all parties but Dr. Whelan.  The quantum of damages was agreed to and
    approved by the court.

[12]

The action against the Crown was settled on the basis
    that the Crown would be held severally liable for its apportioned share of
    liability, to the extent that the Crown Lab caused or contributed to the
    damages suffered by the

Cleveland
    family.  Accordingly, the trial proceeded
    against Dr. Whelan on the sole issue of liability.

[13]

The
Cleveland family
    alleged that the negligence of the Crown Lab and of Dr. Whelan caused or
    contributed to the failure to make a timely diagnosis of PKU, and thereby
    deprived

Tyler
    of the opportunity to receive appropriate treatment.  They claimed that Dr. Whelan did not meet the
    standard of care required of him by ordering a third Guthrie test following the
    two earlier elevated phe results, rather than ordering a diagnostic assessment.

[14]

In 2004, after this litigation was commenced,
Tylers third blood specimen was tested again, at a laboratory
    in the

United States
,
    utilizing a quantitative testing method that has a positive predictive value
    approaching 100%.  This test produced
    abnormally low amino acid values, compared to values in age-matched newborns.  Much of the expert evidence at trial concerned
    the significance of these low values, and the true phe values of

Tylers blood specimens
    in 1996.

TRIAL JUDGES FINDINGS

[15]

The trial judge made the following findings concerning

Tylers phe values in
    1996:

1)

the result of the Guthrie test of

Tylers first specimen (taken at two days of
    age) was accurately reported as 240
μ
mol/L;

2)

consistent with what would be expected in a case of
    classical PKU, it was likely that

Tylers
    phe value was rising between his first and second Guthrie tests;

3)

the Crown lab underreported the Guthrie test results on

Tylers second
    specimen (taken at seven days of age). Although reported as 240
μ
mol/L, the true phe value of this
    specimen was closer to 480
μ
mol/L;
    and

4)

the true phe value of

Tylers third specimen (taken at 33 days of
    age) was well above the laboratory cut-off of 240
μ
mol/L and could have been as high or higher than 1200
μ
mol/L.

[16]

The trial judge recognized, correctly, that the law
    required that Dr. Whelans conduct be assessed on the basis of the degree of
    care and skill which would reasonably be expected of a prudent and careful
    practitioner of the same experience and standing in the same circumstances:
    see
Crits v. Sylvester
, [1956] O.R.
    132 (C.A.), at p. 143, affd [1956] 1 S.C.R. 991.  In Dr. Whelans case, the degree of skill
    required was that of a similarly situated and experienced metabolic specialist.

[17]

The trial judge further indicated that, [t]he honest
    and intelligent exercise of judgment satisfies [a practitioners] professional
    obligation to take reasonable care in the circumstances, although he may have
    been wrong (citations omitted).  This,
    too, was correct.

[18]

The trial judges central findings concerning the
    standard of care applicable to Dr. Whalen were as follows:

1)

it was reasonable to repeat the Guthrie test after a
    borderline elevated phe value of 240
μ
mol/L
    on

Tylers
    first blood specimen test;

2)

two elevated phe values, as occurred in
Tylers case, should have raised a level of suspicion
    that [

Tyler]
    may have had PKU or a variant.  Accordingly,
    diagnostic testing was required after the second test;

3)

in ordering a third Guthrie test rather than a
    diagnostic test after two elevated phe results, Dr. Whelan focused on whether
    phe levels requiring treatment had been reported in

Tylers case.  However, the relevant question was why a
    newborn like

Tyler
    would have two consecutive abnormal screening test results;

4)

with two positive Guthrie test results just above the
    screening cut-off, the standard of care required the use of a more accurate
    test to investigate further; and

5)

the important question that Dr. Whelan had to answer
    was whether it was safe to discharge

Tyler
    from further follow-up.  He could not
    answer that question without a diagnostic test.

[19]

In the result, the trial judge concluded that Dr.
    Whelans conduct fell below the standard of care in ordering a third Guthrie
    test in circumstances where the reasonable and prudent decision was to order a
    quantitative diagnostic test.  She found
    that Dr. Whelan committed a negligent error of clinical judgment.  However, she held that Dr. Whelan bore a
    lesser degree of fault than the Crown.  The trial judge apportioned liability 75% to the Crown and 25% to Dr.
    Whelan.  Dr. Whelan appeals the trial
    judges liability decision.

POSITIONS OF THE PARTIES

[20]

Although Dr. Whelan raises several grounds of
    appeal, his core argument is that this appeal concerns his discretion to choose
    between two tests to rule out PKU in

Tyler.  He submits that there were no practice
    protocols in place at the relevant time which expressed the applicable standard
    of care in the circumstances.  Thus, he says,
    in the absence of a recognized standard of care, the decision as to which test
    should be administered was within the exercise of his clinical judgment, based
    on his clinical experience.

[21]

Dr. Whelan goes on to argue that reasonable
    physicians could disagree as to which test was the most appropriate test to
    administer.  Accordingly, there had to be
    good reasons, grounded in recognized clinical practice, for holding that his
    exercise of judgment fell below the standard of care.

[22]

The essence of Dr. Whelans
    argument is that,
in arriving at her findings of fact, the trial
    judge ignored, disregarded, or misapprehended the evidence of his expert
    witness, Dr. Clarke.  In support of this
    argument, he submits that the trial judge failed to apply
ter Neuzen v. Korn
, [1995] 3 S.C.R. 674, and the line of cases
    associated with it.
[3]
In
ter
    Neuzen
at para. 38, the Supreme Court held:

It is generally accepted that when a doctor acts in
    accordance with a recognized and respectable practice of the profession, he or
    she will not be found to be negligent.
As LHeureux-Dubé J. stated in [
Lapointe
    v. Hôpital Le Gardeur
, [1992] 1 S.C.R. 351](at pp. 363-64):

Given the number of available methods of
    treatment from which medical professionals must at times choose, and the
    distinction between error and fault,
a
    doctor will not be found liable if the diagnosis and treatment given to a
    patient correspond to those recognized by medical science at the time, even in
    the face of competing theories
.  [Emphasis in original.]

[23]

This court has recognized this principle in numerous
    cases.  See for example,
Connell v. Tanner
(2002), 158 O.A.C.
    268;
Rowlands v. Wright
(2009), 250
    O.A.C. 394;
Brain v. Mador
(1985), 9
    O.A.C. 87, leave to appeal to S.C.C. refused (1985), 13 O.A.C. 79 (note)
    (S.C.C.).

[24]

Dr. Whelans submissions suggest that if a defendant is
    able to advance proof that one reputable body in the community of medical
    professionals in

Ontario
    at the time of the incident would support the conduct and decision making of
    the defendant, the trial judge is virtually compelled to accept that evidence
    and find against negligence.

[25]

This argument proceeds on the premise that by ignoring
    or misapplying the applicable authorities, the trial judge misdirected herself
    on the law of negligence, leading her to wrongly disregard the defence expert
    evidence.  Dr. Whelan also argues that
    the trial judges failure to adequately consider the defence expert evidence resulted
    in palpable and overriding errors of factual determination on both negligence
    and causation issues.

[26]

The respondents, on the other hand, submit that in all
    cases of medical malpractice, the question is whether there was a duty of care
    between the doctor and patient and, if so, whether the standard of care that
    applied in all the circumstances was breached, leading to damages.  If Dr. Whelans approach were taken to the
    extreme, they argue, it would unfairly insulate physicians from liability in
    all cases where conflicting expert evidence as to the standard of care is led.

[27]

The respondents contend that the overarching theme of
    Dr. Whelans arguments is simply that the trial judge should have accepted the
    evidence of Dr. Whelan and his expert, Dr. Clarke, over the evidence led by the
    respondents through their experts, Dr. Vallance and Dr. Chakraborty.  The respondents say that Dr. Whelans claim
    that he was engaged in the exercise of clinical judgment is not supported by
    the trial judges findings of fact or by the evidence.

[28]

I would dismiss the appeal.  First, I disagree with Dr. Whelans
    contention that the principles enunciated in
ter Neuzen
are engaged in this case.  I conclude that the trial judges
    interpretation and application of the law were correct.  Second, in my view, the trial judge did not
    ignore, misapprehend or misapply the evidence.  Indeed, I conclude that her findings were based on a fair and proper
    consideration of all the evidence.

THE EXPERT EVIDENCE

[29]

Given the focus of Dr. Whelans appeal, it will
    be useful to set out, in a brief fashion, the expert evidence that the trial
    judge considered.  The experts called by
    the respondents were:

(i)        Dr. Adeli: Head of Clinical Biochemistry at the Department of
    Paediatric Laboratory Medicine at the Hospital for Sick Children, Professor in
    the Department of Laboratory Medicine at the University of Toronto, and Fellow
    of the Academy of Clinical Biochemistry.  Dr. Adeli discussed the storage history of the blood spots from

Tylers third specimen and
    the results of the 1999 and 2004 retests.  His evidence concerned the standard of care applicable to a laboratory
    conducting newborn screening.  In his opinion,
    there were errors in the testing of

Tylers
    blood spots; such errors, he testified, breached the standard of care
    reasonably expected of a laboratory conducting newborn screening
.

(ii)       Dr. Vallance: Medical doctor with a sub-specialty in biomedical
    genetics, Director of the Newborn Screening Program of British Columbia, and Director
    of the Biomedical Genetics Laboratory and Division Head of the Clinical
    Biochemistry Program at Children and Womens Health Centre of British Columbia.
     She is also a Clinical Professor of
    Pathology and Laboratory Medicine in the Faculty of Medicine at the

University of
British Columbia.  Dr. Vallance discussed the positive predictive
    value for PKU following two positive Guthrie tests.  Her opinion was that after two consecutive
    abnormal results, the standard of care required quantitative testing for plasma
    amino acids.  Dr. Vallance confirmed Dr.
    Adelis opinion that

Tylers
    third blood specimen likely had a much higher phe value than was reported and
    that there were errors in testing this specimen
.

(iii)     Dr.
    Chakraborty: Specialist in paediatrics and medical biochemistry, Assistant
    Professor of Paediatrics and Pathology and Laboratory Medicine at the University
    of Ottawa and the co-head of the testing laboratory for the Ontario Newborn
    Screening Program.  Dr. Chakrabortys
    opinion was that Dr. Whelans decision to order a third Guthrie test, following
    two borderline positive results, did not meet the standard of practice of
    clinical or laboratory medicine at the relevant time.

[30]

The expert evidence called by Dr. Whelan was:

(i)        Dr.
    Clarke: Specialist in paediatrics and biochemistry, former Head of Genetic
    Metabolic Diseases Program and Head of Division of Clinic Genetics at the Hospital
    for Sick Children, and Director of Postgraduate Medical Education in Medical
    Genetics at the University of Toronto.  Dr. Clarke has also pursued clinical research
    for over 35 years on PKU and the impact of treatment for children with PKU, as
    well as serving as member and later Chair of the Ministry of Healths Advisory Committee
    on screening newborns for inherited metabolic diseases.  Dr. Clarke disagreed with Dr. Vallance and
    Dr. Chakraborty on the standard of care.  His opinion was that Dr. Whelans management of the case met the
    standard of care of a metabolic specialist in 1996
.

[31]

I intend to first discuss Dr. Whelans submission that
    the trial judge erred by failing to apply
ter
    Neuzen
in this case.  I will then
    examine his argument that the trial judge further erred by committing palpable
    and overriding errors of factual finding.

ANALYSIS

[32]

Like
    all medical malpractice cases, the issues in this case are ones of tort and
    negligence law.

In
Mustapha v. Culligan of Canada Ltd.
, [2008] 2 S.C.R. 114, at para.
    3, McLachlin C.J., writing for the Supreme Court, explained that a
    successful action in negligence requires the plaintiff to demonstrate that:

1)     the
    defendant owed a duty of care;

2)     the
    defendants behaviour breached the standard of care;

3)     the
    plaintiff sustained damage; and

4)     the
    damage was caused, in fact and in law, by the defendants breach.

[33]

McLachlin C.J. went on to make clear that these
    steps are sequential and separate.  Thus,
    the first question for the court to decide in a negligence action is whether
    the defendant owes the plaintiff a duty of care.  If a duty is owed, the second question is
    whether the defendants behaviour breached the applicable standard of care.

[34]

The concepts of duty of care and standard of care are
    distinct but closely related.  In
Ryan v.

Victoria (City)
,
[1999] 1 S.C.R. 201, at paras. 21 and
    25,

Major J. explained:

[A] discussion of
    duty centres around its existence, while the standard of care clarifies what
    the content of the duty is.  Where there is no duty there is no
    negligence.

...

A duty of care
    either exists or it does not. [W]hen the language of duty is framed in terms
    of its degree or content, what is really at issue is not the duty but the
    applicable standard of care.  While the distinction is obvious, courts
    from time to time seem to lose sight of that principle. [Citation omitted].

[35]

A standard of care,
    therefore, is
the amount
    of care required by certain people under certain situations and is a measure of
    care that satisfies the duty.
In this
    case, there is no issue that Dr. Whelan owed the respondents a duty of care.  At trial, the contentious issue was whether,
    on the established facts, Dr. Whelans conduct in ordering a third Guthrie test
    for

Tyler met
    the standard of care.

[36]

This appeal is thus about how the
    second of the four elements of negligence  whether
the defendants
    behaviour breached the standard of care  is established in a medical
    malpractice case where there is competing expert evidence.  Specifically, the issues are 1) what standard
    of care applied to Dr. Whelan in the circumstances; and 2) whether Dr. Whelan
    breached that standard by ordering a third Guthrie test, rather than a
    diagnostic test, for Tyler.

Standard of Care

[37]

The standard of care applicable to Dr. Whelan required
    that his conduct be assessed on the basis of that degree of care and skill
    which could reasonably be expected of a normal, prudent practitioner of the
    same experience and standing:
Crits
at p. 143.  A specialist, however, is
    held to a higher standard than is a generalist.  As the Supreme Court elaborated in
ter
    Neuzen
at para. 33:

In the case of a
    specialist, such as a gynaecologist and obstetrician, the doctor's behaviour
    must be assessed in light of the conduct of other ordinary specialists, who
    possess a reasonable level of knowledge, competence and skill expected of
    professionals in Canada, in that field. A specialist, such as the respondent,
    who holds himself out as possessing a special degree of skill and knowledge,
    must exercise the degree of skill of an average specialist in his field.
    [Citations omitted.]

[38]

Dr. Whelan argues that the trial judge erred by failing
    to apply what he terms the
ter Neuzen
principle
    or the respectable minority principle.
[4]
This principle holds that where the practice
    followed by a doctor is adhered to by at least a respectable minority of
    competent medical practitioners in the same field; it is not for the court to
    prefer the practice of the majority over that of the respectable minority.  In other words, a doctor who acts in
    accordance with a respectable minority body of medical opinion will normally be
    absolved of negligence: see for example, Ellen I. Picard & Gerald R.
    Robertson,
Legal Liability of Doctors and
    Hospitals in Canada
, 4th ed. (Toronto: Thomson Carswell, 2007) at p. 362.

[39]

Dr.
    Whelans invocation of the respectable minority principle proceeds in this
    fashion.  First, he relies on Dr.
    Clarkes testimony that Dr. Whelans decision to order a third Guthrie test
    following

Tylers
    first two borderline elevated phe levels met the applicable standard of care in
    1996.  Dr. Whelan submits that, as his
    decision to order a third Guthrie test, rather than a diagnostic test, involved
    the exercise of clinical judgment based on his considerable clinical
    experience, Dr. Clarkes opinion and Dr. Whelans own testimony regarding the
    appropriate third test in the circumstances deserved great weight.

[40]

Dr.
    Whelan next emphasizes that, in his testimony, Dr. Chakraborty, one of the
    respondents experts, acknowledged that he would respect and rely on Dr.
    Clarkes opinion.  Dr. Whelan therefore
    contends that Dr. Clarkes opinion on the applicable standard of care,
    supported by Dr. Chakrabortys testimony, constituted evidence of a respectable
    minority body of medical opinion on the established practice for a third PKU
    test in

Tylers
    circumstances.  As his actions conformed
    with that body of opinion, Dr. Whelan maintains that the trial judge erred in
    finding him negligent.

[41]

I
    would not give effect to this argument on this record.

[42]

This
    is not a case where the trial judge erred by simply preferring one body of
    medical opinion over another respectable and competing body of medical opinion
    concerning the appropriate medical practice.  This is a case where the trial judge
    considered and weighed the conflicting testimony of the expert witnesses on the
    operative standard of care.  She
    concluded that Dr. Clarkes opinion on the standard of care suffered from a
    number of frailties and was not sufficiently reliable to establish the existence
    of a respectable minority opinion.  The
    trial judge therefore accepted the evidence of Dr. Vallance and that of Dr.
    Chakraborty that, in

Tylers
    case, after two consecutive abnormal phe values on Guthrie tests, the standard
    of care required quantitative testing for PKU.  In my opinion, the trial judge did not err in
    doing so.

[43]

In
    his testimony, Dr. Clarke emphasized that at the time of the original testing
    of

Tylers
    blood specimens, it was common practice to conduct repeat Guthrie tests until
    it was determined whether hyperphe was treatable.  He said that two successive Guthrie test
    results of 240
μ
mol/L were suspicious but that
    this was insufficient to require diagnostic investigation since the second test
    result indicated that the patients phe level had not risen.  In the absence of a rise in the phe level by
    the time of the second test, Dr. Clarke was of the opinion that it was less
    likely that treatable hyperphe would develop.

[44]

The
    trial judge concluded that there were three key difficulties with Dr. Clarkes
    evidence on this issue.  First, his
    opinion rested on the premise that the relevant question at the time of
    determining the appropriate third test was whether

Tyler had developed treatable hyperphe.  However, the trial judge held that the
    important question that Dr. Whelan had to answer was whether it was safe to
    discharge [

Tyler]
    from further follow-up, and that this question could not be answered without a
    diagnostic, rather than a repeat screening, test.  In other words, the necessary inquiry was
    whether treatment or early intervention was necessary.  The evidence of both Dr. Vallance and Dr.
    Chakraborty supported this finding.

[45]

For
    example, Dr. Vallance testified that after a second positive phe result, as
    occurred in this case, a baby has about a 50% chance of being diagnosed with
    PKU or a variant.  Although Dr. Clarke
    disagreed, Dr. Chakraborty criticized Dr. Clarkes analysis and expressed the
    opinion that after a second Guthrie test resulting in a borderline positive phe
    value, a patient is at increased risk of having PKU.  In his view, the available scientific data
    supported up to a 50% chance of some babies being diagnosed with PKU after a
    second positive phe result.  Accordingly,
    in these circumstances, a quantitative test should be conducted to determine if
    treatment or early intervention is required.  The trial judge accepted this evidence,
    stating:

Two
    elevated [phe] results should have raised a level of suspicion that [

Tyler] may have had PKU or
    a variant and diagnostic testing was required. This is reinforced by the fact
    that the concentration measured using the semi-quantitative Guthrie test can vary
    by ≥ 100
μ
mol/L.

[46]

Second,
    the trial judge, in effect, concluded that Dr. Clarkes evidence on the
    significance of

Tylers
    first two phe values was internally inconsistent.  Dr. Clarke testified that two elevated phe
    values at the cut-off point of the Guthrie test were suspicious.  However, he also suggested that the second phe
    level had not risen over the first and, therefore, there was a reduced
    likelihood of the development of treatable hyperphe.

[47]

The
    trial judge rejected this inconsistent hypothesis.  She put it this way:

I
    do not understand how a second positive Guthrie at 240
μ
mol/L can be both reassuring and suspicious. On Dr. Clarkes analysis,
    a third screen [a third Guthrie test] with no rise in phe would be more rather
    than less reassuring.

I see no error in this reasoning.  Indeed, I agree with it.

[48]

Moreover,
    contrary to Dr. Clarkes contention that
Tylers
    second Guthrie test result indicated no rise in his phe level, there was
    evidence at trial indicating that, properly interpreted and taking account of
    various specimen storage factors and laboratory errors, it was likely that

Tylers true phe value was
    rising between his first and second Guthrie tests.  As I have already indicated, the trial judge
    accepted this evidence, as she was entitled to do, and found as a fact that the
    true phe value on

Tylers
    second Guthrie test was closer to 480
μ
mol/L.  There was ample evidence at trial to support
    this finding.

[49]

Third,
    Dr. Whelans evidence of his own practice did not accord with Dr. Clarkes view
    that diagnostic testing was not required until evidence of treatable hyperphe
    had emerged.  Dr. Whelan testified that
    babies with three successive Guthrie test results at
untreatable
phe levels of 240
μ
mol/L were
    subjected to diagnostic testing.  In
    other words, Dr. Whelans practice at the relevant time did not support the
    suggestion that diagnostic testing need not be undertaken until an indication
    of treatable hyperphe, evidenced by a rise in phe levels, existed.

[50]

The
    trial judge regarded all these factors as cogent reasons for rejecting Dr.
    Clarkes opinion on the content of the applicable standard of care.  I agree.

[51]

The
    courts have recognized that the respectable minority principle does not absolve
    a doctor from liability in negligence whenever there is a conflict in the
    expert evidence led at trial concerning the reasonableness of a doctors
    conduct: see
Kangas v. Parker and Asquith
,
    [1976] 5 W.W.R. 25 (Sask. Q.B.), at pp. 38-39, affd [1978] 5 W.W.R. 667 (Sask.
    C.A.);
Cope v. Layden
, [1984] A.J.
    No. 175 (C.A.);
Kehler v. Myles
(1988), 64 Alta. L.R. (2d) 97 (C.A.), at p. 106, leave to appeal to S.C.C.
    refused (1989), 95 A.R. 236;
Alakoozi v.
    Hospital for Sick Children
(2004), 187 O.A.C. 187 (C.A.), at paras. 5-7.  As Picard and Robertson point out in
Legal Liability of Doctors and Hospitals in
    Canada
at p. 364, were it otherwise, nearly every medical negligence case
    would be resolved in favour of the doctor, because they almost always involve a
    conflict of expert evidence.

[52]

The
    decision of the Manitoba Court of Appeal in
Anderson
    v. Chasney
, [1949] 4 D.L.R. 71, affd [1950] 4 D.L.R. 223 (S.C.C.) is
    instructive in this regard.  In

Anderson
,
    the defence argued that if the defendant surgeon followed what was established
    by expert evidence to be a general surgical practice, no finding of negligence
    could be made against the defendant.  In
    rejecting the proposition that expert evidence of common medical practice was
    conclusive of the question of negligence, Coyne J.A. commented at p. 81: [I]f
    that were correct the expert witnesses would, in effect, be the jury to try the
    question of negligence.  He went on to
    hold at p. 81:

That
    question, however, must continue to be one for the petit jury empanelled to try
    the case, if it is a jury case, and for the Court where it is not.  The experts remain witnesses to give their
    expert opinions in assistance of the jury or the Court to determine whether
    there was negligence or not.  The
    opinions of the experts are not conclusive.

See also pp. 88-89.

[53]

Moreover,
    courts have the discretion to assess liability even in the face of
    uncontradicted evidence of common professional practice.  As LHeureux-Dubé J. stated in
Roberge v. Bolduc
, [1991] 1 S.C.R. 374,
    at p. 437:

The
    fact that a professional has followed the practice of his or her peers may be
    strong evidence of reasonable and diligent conduct,
but it is not determinative
.  If the practice is not in accordance with the general standards of
    liability, i.e., that one must act in a reasonable manner, then the
    professional who adheres to such a practice can be found liable, depending on the
    facts of each case.  [Emphasis in
    original.]

[54]

In this case, the trial judge essentially concluded
    that the expert evidence did not establish that Dr. Whelans decision to order
    a third Guthrie test in the face of two successive borderline elevated phe
    levels, instead of ordering a diagnostic test, accorded with a practice adopted
    by a respectable minority of the medical profession. In other words, on the
    totality of the evidence in this case, the respectable minority principle was
    simply not engaged.  I see no reversible
    error in the trial judges conclusion on this issue.

Breach of Standard of Care

[55]

Once
    the trial judge had determined what the standard of care required, the question
    of breach was rather simple.
Having found that the applicable standard required the ordering of a
    diagnostic test
after
    the positive screening tests
,
the factual question was simply whether or not Dr. Whelan had ordered
    such a diagnostic test.  The answer was
    that he had not and thus that he had breached the standard of care.  One could imagine a case where the factual
    determination of whether or not a breach had occurred would be more complicated
    and perhaps require further expert evidence, but that was not the case here.

Attack on Trial Judges Factual Findings

[56]

As I noted above, the overarching theme of Dr. Whelans
    arguments is that the trial judge should have accepted the evidence of Dr.
    Whelan and his expert over the evidence of the respondents experts.  In this context, he attacks the trial judges
    factual findings on several grounds.  I
    view it as unnecessary to address each of these grounds separately.  Rather, I will discuss those submissions that
    I believe have relative merit.

(i)        Dr. Whelans clinical judgment

[57]

The first argument relates to the trial judges finding
    that Dr. Whelan negligently exercised his clinical judgment in choosing a
    third Guthrie test because he did not inform himself as to whether

Tyler had any condition
    which would cause benign transient hyperphe.  Dr. Whelan contends that the judge erred in making this finding.  I would reject this submission for several
    reasons.

[58]

First, as I have said, Dr. Whalen asserts that there
    were no practice protocols in place that expressed the standard of care in the
    circumstances of this case.  That is, at
    the time of the 1996 testing, no protocol existed to guide the Ontario Newborn
    Screening Program or any of its five regional centre staff as to the
    appropriate test to be conducted following two borderline elevated phe values
    in a newborn on Guthrie tests.  Therefore, he says, the decision was one for the exercise of his clinical
    judgment, based on his clinical experience.

[59]

Dr. Whelans counsel in oral argument stated that
    clinical judgment, in this case, means adopting a protocol or standing order
    which is informed by the doctors clinical experience and consistent with logic
    and common sense.  Thus, he argued, the
    decision in question was a matter about which reasonable physicians could
    disagree.  Accordingly, there had to be
    good reasons, grounded in recognized clinical practice, for holding that Dr.
    Whelans exercise of judgment fell below the standard of care.

[60]

Dr. Whelan, as regional consultant, was responsible for

Tylers case.  However, he did not actively take part in any
    decision making regarding his case.

Tylers test results were
    received and managed by a genetic counsellor at Dr. Whelans offices, Tim
    Heshka, pursuant to routine and standing orders provided by Dr. Whelan.

[61]

Thus, in spite of his position, Dr. Whelan does not
    appear to have made any specific clinical decisions with respect to

Tyler.  As found by the trial judge, Tylers third
    repeat Guthrie test arose as a result of Tim Heshka following the routine
    standing orders of Dr. Whelan.  It was
    not the result of a conscious decision that was specifically and particularly
    related to

Tyler.

[62]

The trial judge was very much alive to this issue,
    noting that the honest and intelligent exercise of judgment, even if
    mistaken, satisfies a doctors professional obligation to take reasonable care
    in the circumstances.  In para. 55 of her
    reasons, she rejected the argument that what occurred in this case was the
    exercise of clinical judgment by Dr. Whelan.  After reviewing the relevant evidence, she
    concluded:

Tyler
    had none of [the factors that might suggest transient benign hyperphe], but Dr.
    Whalen did not know this, nor did he seek out this information. This kind of
    information could have provided some reassurance that

Tylers elevations were transient, but
    without it, I find it difficult to accept that the routine third test that Mr.
    Heshka arranged was based on an exercise of Dr. Whalens clinical judgment.

[63]

In light of this finding, Dr. Whelans
    assertion that he exercised clinical judgment is without any factual
    support.
Dr. Whelans evidence as
    to the reasonableness of a decision that was not made by him, as the
    respondents note, is no more than historical reconstruction posed in a way that
    was designed to give it the appearance of immediate direct contemplative
    thought.  No such contemplation occurred
    here.
I would reject this
    argument.

(ii)       The trial judges treatment of expert evidence

[64]

Next, Dr. Whelan submits that the evidence of Dr.
    Chakraborty should have been given less weight than it was.  This is because, in his testimony, Dr.
    Chakraborty acknowledged that providing an opinion in this case required him to
    apply in a retrospective way what he knows now but did not know in 1996.  And, as the trial judge noted at para. 37:

Hindsight has no role to play in evaluating conduct
    that is said to fall below a reasonable standard of care.  Practices change and standards evolve.  As much as possible, one must try to go back
    and experience the event as it was then. [Citations omitted.]

[65]

Dr. Whelans counsel at trial objected to Dr.
    Chakrabortys qualifications to give expert evidence on the standard of care as
    it existed in 1996.  Dr. Chakraborty, who
    is the current head of the Ontario Newborn Screening Program, had his
    qualifications carefully reviewed by the trial judge as a result of this
    challenge.  The trial judge held that he
    was qualified to provide the proffered opinion evidence.  That ruling has not been appealed.  The trial judge, therefore, was entitled to
    consider Dr. Chakrabortys expert opinion evidence and to assign to it the
    weight, if any, that she considered appropriate.

[66]

Further, even if the trial judge had given little or no
    weight to Dr. Chakrabortys evidence, the evidence of Dr. Vallance still
    conflicts with that of Dr. Clarke.  Moreover, for the reasons I have outlined above, the trial judge would
    still have had a firm basis on which to reject the evidence of Dr. Clarke.  There is, therefore, no substance to this
    argument.

(iii)     The effect of two positive phe results

[67]

Finally, Dr. Whelan argues that because PKU is
    associated with high concentrations of phe long before one month of age,

Tylers results were not
    indicative of PKU.  After the second
    test, Dr. Whelan thought that the likelihood of PKU had diminished. This was
    because, in his opinion, the phe concentration did not rise in the five days
    between

Tylers
    first and second Guthrie tests.  Therefore,
    he felt a third screening test was appropriate.

[68]

I have already discussed the trial judges
    consideration of this issue.  She found
    as a fact, on all the expert evidence, that

Tylers phe level was likely rising between
    his first and second Guthrie tests.  This
    finding was open to her on the evidence.

[69]

Moreover, in his own evidence, Dr. Whelan said that he
    would have sent
Tyler for quantitative testing
    had

Tylers
    third screen resulted in a phe value at or above 240
µ
mol/L.  Thus, in effect, Dr.
    Whelan testified that two borderline screens plus a third borderline elevated
    result suggest transient benign hyperphe.  There was no explanation as to why three borderline positive phe values within
    one month would be significantly more cause for concern than two, given the
    evidence that transient hyperphe may last longer than a few weeks.  Why would three borderline positive screens
    call for quantitative testing, while two borderline positive screens would not?

[70]

The respondents experts, Dr. Vallance and Dr.
    Chakraborty, both testified that in light of
Tylers
    two positive phe test results, the standard of care at the time required that

Tylers condition should
    be individually and personally investigated clinically.  This direct approach, they said, would
    absolutely mandate the use of a simple, available and inexpensive amino acid
    quantitative blood test.

[71]

All the respondents experts agreed that the amino acid
    quantitative blood test would provide

Tylers
    doctors with an accurate reading of his phe plus or minus 10
μ
mol and would lead to an informed
    clinical diagnosis.  No such test was
    suggested by Dr. Whelans genetic consultant, Tim Heshka, or by Dr. Whelan
    himself.  I would dismiss this ground of
    appeal.

CONCLUSION

[72]

I conclude that Dr. Whelan has not provided any grounds
    for this court to interfere with the decision of the trial judge.  First, the trial judges determination of
    what constituted the standard of care and her application of that standard of
    care to Dr. Whelans conduct were correct.  Second, the findings of the trial judge were
    supported by the evidence presented to her.  She was entitled to accept or reject all or part of the evidence of any
    witness.  And, on my review of her
    reasons and the record as a whole, I conclude that Dr. Whelan has not established
    that the trial judge committed any palpable and overriding errors that would
    support this courts intervention.

DISPOSITION

[73]

For the reasons herein, I would dismiss the
    appeal.  Pursuant to the agreement of the
    parties, I would award the respondents their costs of the appeal, fixed in the
    amount of $25,000, inclusive of disbursements and taxes.

RELEASED:

MAR 30 3011                                           H.S.
    LaForme J.A.

EAC                                                            I
    agree E.A. Cronk J.A.

I
    agree R.A. Blair J.A.

[1]
Micromoles per litre.

[2]
Millimoles per litre.

[3]
This
    line of cases referenced by Dr. Whelan includes:
Brimacombe
v.
Matthews
(2001), 87 B.C.L.R. (3d) 75  (

C.A.
),
    at paras. 75-77;
Fairley (Guardian ad
    litem of)
v.
Waterman,
2002 BCSC
    10, at paras. 11, 42;
Dudas (Guardian ad
    litem of)
v.
Munro,
1997 CanLII
    4313 (BC
S.C.), at paras. 4-6;
Bafaro
v.
Dowd
, 2008 CanLII 45000 (ON S.C.), at paras. 37-38, affd (2010),
    260 O.A.C. 70 (

C.A.
).

[4]
While it
    is true that this principle is sometimes referred to as the
ter Neuzen
principle, this naming is
    unhelpful because
ter Neuzen
involved
    two distinct principles.  Although the
    court did mention what is known as the respectable minority principle, the
    focus of the decision was the principle that in some cases the trier of fact
    can reject a standard medical practice as inherently negligent where the
    practice is fraught with obvious risks: see
ter Neuzen
at paras. 41-42.


CITATION:
Credifinance
Securities Limited v. DSLC Capital
          Corp., 2011 ONCA 160

DATE: 20110302

DOCKET: C51766

COURT OF APPEAL FOR ONTARIO

Goudge, Sharpe and LaForme JJ.A.

In the Matter of the Bankruptcy of Credifinance Securities
          Limited, of the City of
Toronto, in the

Province of
Ontario

BETWEEN

Deloitte &
          Touche Inc., in its
          Capacity as Trustee in Bankruptcy of Credifinance
          Securities Limited

Appellant

and

DSLC Capital Corp.

Respondent

Catherine Francis, for the appellant

Gregory Sidlofsky, for the respondent

Heard: January 7, 2011

On appeal from the order of Justice
          F. N. Marrocco of the Superior Court of Justice, dated February 16, 2010, with
          reasons reported at 63 C.B.R. (5th) 250.

H.S. LaForme
    J.A.:

INTRODUCTION

[1]

Credifinance
Securities Limited
    (Credifinance) made an assignment in bankruptcy.
    DSLC Capital Corp. (DSLC) filed a proof of claim in the amount of $400,000.
     In its proof of claim, DSLC maintained that the sum of $310,500 in the
    possession of Credifinance was its property.  Deloitte & Touche Inc.,
    as Trustee of Credifinance (the Trustee), denied the claim in full.
     DSLC appealed that decision in the Superior Court.

[2]

The appeal
    judge
found that DSLC had been defrauded into loaning
    Credifinance the $400,000.  The appeal judge
    granted DSLC a constructive trust over what remained of the loan  $310,500  and
    determined that it did not form part of the bankrupt estate.  The Trustee appeals this decision.

[3]

DSLC cross-appeals,
seeking leave to appeal the decision of the
    appeal judge not to award costs to DSLC.  If leave is granted, DSLC is seeking an award of costs against the
    Trustee personally.

BACKGROUND

[4]

There
    is a good deal more to the factual background of this case than what I propose
    to set out.  What I intend to do is simply
    provide that background that I believe is necessary to give context to my
    analysis and ultimate conclusions.

The lawsuit

[5]

On
    February 6, 2009, DSLC issued a notice of action against Credifinance, Georges Benarroch
    (who controlled Credifinance) and others and obtained an
ex parte
Mareva injunction.

[6]

On
    March 6, 2009, DSLC filed a statement of claim seeking damages, an Order
    winding up Credifinance, oppression remedy relief, and the appointment of a
    receiver.  DSLC did not assert a
    constructive trust claim; rather, it alleged that Credifinance had failed to
    repay the $400,000 loan.

[7]

On
    April 2, 2009 DSLC amended its claim seeking an Order rescinding the
    Subscription Agreement and the Share Purchase Agreement (the agreements related
    to the loan and the relationship between DSLC and Credifinance) on the basis of
    the alleged dishonest and fraudulent conduct of the defendants.  DSLC repeated its allegation that
    Credifinance had refused to repay the $400,000 loan.

[8]

On
    April 20, 2009, t
he Mareva injunction was dismissed as against the
    defendants other than Credifinance.  However, the motion judge ordered that $310,500 be preserved pursuant to
    r. 45.02 of the
Rules of Civil Procedure
,
    whereupon the injunction would be dissolved against Credifinance.  He found that, of the $460,000 that had been
    frozen in Credifinances bank accounts, $310,500 on deposit with the National
    Bank could be identified as remaining from the $400,000 loan.

[9]

O
n
    July 23, 2009, Credifinances motion for leave to appeal the order of the motion
    judge was dismissed.
On August 24,
    2009 Benarroch assigned Credifinance into bankruptcy.  Credifinance has never paid the $310,500 into
    court.

[10]

The only creditors of Credifinance are DSLC, Benarroch
     directly and through a corporation  and Benarrochs lawyers.  Benarroch and his company Credifinance Capital
    Corp. allege that they are secured creditors owed $127,032.07.  The lawyers who represent the defendants
    including Benarroch claim to be owed a total of $128,546.25.

The trustee proceedings

[11]

Before setting out the basic facts of this part of
    the background, I think it will be useful to set out the provisions of the
Bankruptcy and Insolvency Act
, R.S.C.
    1985, c. B-3

(BIA) that are at the
    core of this appeal.  Section 81 provides
    in part:

81.
(1)
Where
a
    person claims any property or interest therein, in the possession of a bankrupt
    at the time of the bankruptcy, he shall file with the trustee a proof of claim
    verified by affidavit giving the grounds on which the claim is based and
    sufficient particulars to enable the property to be identified.

(2) The trustee with whom a proof of claim is filed
    under subsection (1) shall within 15 days after the filing of the claim or
    within 15 days after the first meeting of creditors, whichever is the later,
    either admit the claim and deliver possession of the property to the claimant
    or send notice in the prescribed manner to the claimant that the claim is
    disputed, with the trustees reasons for disputing it, and, unless the claimant
    appeals the trustee[s] decision to the court within 15 days after the sending
    of the notice of dispute, the claimant is deemed to have abandoned or
    relinquished all his or her right to or interest in the property to the trustee
    who may then sell or dispose of the property free of any right, title or
    interest of the claimant.

[12]

On September 9, 2009, pursuant to this section,
    DSLC filed a property proof of claim with the trustee claiming a property
    interest in the $310,500 that remained on deposit in Credifinances bank
    account.  In the proof of claim, DSLC
    outlined the basic facts relied
upon,
including the
    allegation of fraudulent misrepresentations made by Credifinance, and asserted
    that the $310,500 are trust funds belonging to DSLC.

[13]

In its notice of dispute of this claim dated September
    25, 2009, the Trustee refused to consider the merits of DSLCs fraud
    allegations and denied DSLCs property claim.  In doing so, and among other things, it responded with this: The
    allegations of fraudulent misrepresentation made by DSLC, even if they could be
    established, are incapable at law of elevating DSLCs subordinate unsecured
    claim to the status of a property claim with priority over the Trustee or other
    creditors of the bankrupt.

[14]

DSLC appealed the Trustees decision and by agreement,
    the matter was placed on the Commercial List to be heard by a judge of the
    Superior Court.  The procedure to be
    followed for the hearing was agreed upon by counsel for the parties and
    reflected in a case conference order.  As
    set out in the order, the parties agreed to file and rely on affidavits and
    transcripts from the civil proceeding and DSLC would also call
viva voce
evidence.  Counsel for the Trustee declined to call
    witnesses as she expressly intended to rely only on the affidavit and
    transcript evidence from the civil proceeding.

[15]

The appeal judge conducted what he called a
    hearing
de novo
and, as I noted
    earlier, allowed DSLCs appeal.  He
    awarded DSLC a constructive trust over the $310,500.  He made no order as to costs  he held that,
    given the result of his order on the estate would mean it has virtually no
    assets.

The position of the Trustee

[16]

The
    Trustees position is that the appeal judge erred in determining DSLCs fraud
    allegations in the context of an appeal from a disallowance.  It says that these issues were not properly
    before the court.  Rather, the issue
    before the court was whether DSLC could, at law, establish a property claim to
    the funds in priority to the interests of the Trustee.

[17]

The
    Trustee decided that DSLC could not establish a property claim to the funds and
    that the loan advance was not required to be held in trust.  Accordingly, it disallowed DSLCs proof of
    claim.  This was, it argues, based upon
    well-established legal principles and admissions from DSLCs own
    representatives that DSLCs interest in the funds was subordinate to the
    interests of Credifinances other creditors.

The position of DSLC

[18]

DSLC asserts that the hearing before the appeal judge
    proceeded as a hybrid trial of an issue.  It submits that the procedure adopted for the hearing was agreed to by
    the parties and was the appropriate means to determine the issues.  That is, by agreement of counsel, the Trustee
    and DSLC each filed and relied on various affidavits and transcript evidence
    from a related civil proceeding.  DSLC
    also called
viva voce
evidence at the
    hearing in support of its fraud allegations.

[19]

The issue for the appeal judge, DSLC argues, was
    whether DSLC was defrauded into loaning the $400,000 to Credifinance  the
    appeal judges finding of fraud is a finding of fact supported by the evidence.

[20]

I would dismiss the appeal.  I conclude that both the process followed by
    the appeal judge and the issues he decided were, in the circumstances of this
    case, correct in law.  I also conclude
    that the appeal judge committed no errors in either his decision or his
    analysis.  Finally, I would not grant
    DSLC leave to appeal the issue of costs.  This is not an obvious case where leave should be granted.

DISCUSSION

[21]

The Trustee essentially disputes the factual and
    jurisdictional basis for the appeal judges remedy under the statutory regime
    of the BIA.  The essence of the Trustees
    appeal to this court, and the answer to it, I believe, is bound up in two
    questions.  First, did the Trustee agree
    to the process and the issue to be decided?  Second, was it within the jurisdiction of the court to proceed in the
    fashion it did and to decide the issue it did?  I find that the answer to both is yes, and I conclude that the appeal
    should be dismissed.

(1)       The process

[22]

By way of brief summary,
    under the BIA the Chief Justice of the Ontario Superior Court of Justice
    designates judicial officers
who sit as part of

Ontarios Bankruptcy Court.  Appeals from a decision made by a Trustee in
    bankruptcy proceedings are most often made to a Registrar of the Ontario
    Bankruptcy Court.  From time to time,
    however, appeals are heard by judges of the Superior Court.

[23]

It seems that in

Ontario the usual course for appeals under
    the BIA may be to proceed by way of
viva voce
evidence.  This includes appeals under s. 81 of the BIA
    of a Notice of Dispute of property claims.  Occasionally the court permits these appeals to proceed by way of
    affidavit evidence or partly by way of affidavit evidence and partly by way of
viva
    voce
evidence:
Katz (Bankruptcy) (Re)
(2005), 14 C.B.R. (5th) 193 (Ont. S.C.)
at paras. 4 and
    5.

[24]

At the very least, the practice seems to be that
    an appeal court, when considering a Notice of Disallowance, will first decide
    the issue of whether the matter proceeds as a true appeal or as a hearing
de novo
.  The test that has evolved seems to be that a hearing
de novo
will occur if the court decides
    that to proceed otherwise would result in an injustice to the creditor:
Charlestown Residential School (Re)
(2010), 70 C.B.R. (5th) 13 (Ont. S.C.) at paras. 1 and 18.

[25]

I note that this practice is not used uniformly across
    the country.  For example, in British
    Columbia an appeal under s. 81 of the BIA is not intended to be a trial
de novo
but rather a true appeal:
Galaxy Sports Inc. (Re)
(2004), 1 C.B.R.
    (5th) 20 (B.C.C.A.) at para. 40.  The
    policy rationale is that trustees in bankruptcy should be regarded as having
    experience and expertise in the area of business financing, restructurings and
    insolvency.

[26]

This BC
    approach makes sense because, if evidence that was not before a Trustee were to
    be presented on an appeal as a matter of course, much of the efficiency in the
    operation of the bankruptcy scheme would be lost.  Creditors who neglected to file a proof of
    claim in compliance with the requirements of the scheme would be at an
    advantage because they could expect to enhance their proof on appeal.  This, it seems to me, would impact on the
    objective implicit in the BIA, which is to enable parties to have their rights
    and claims determined in an expeditious fashion, and add unwanted expense,
    delay and formality:
Galaxy Sports
at
    para. 41.

[27]

However, since counsel before us did not raise the
    issue of the correctness of this practice, I do not intend to comment on it
    further.  This is not the case that
    requires this court to consider the merits of the

Ontario practice.  I would add that the practice appears to have
    been developed mainly through decisions of

Ontarios Bankruptcy Court.

[28]

The procedure adopted for the hearing of the appeal in
    this case was agreed to by the parties and was, in their view, the appropriate
    means to determine the issues.  On that
    there is no dispute.  There is, however,
    a dispute that t
he Trustee
    describes as this: the Trustee did not seek a trial of DSLC's fraud allegations
    against Benarroch, nor was it the Trustee's understanding that such allegations
    were supposed to have been tried before the appeal judge.

[29]

There is no doubt that DSLCs appeal of the Trustees
    Notice of Dispute was focused entirely on its allegation of fraud.  That was the very issue it sought to have
    decided by the appeal judge.  At para. 2
    of his reasons, the appeal judge describes DSLCs position on the appeal this
    way:

[T]hat it is the victim of a fraud at the hands of
    Georges Benarroch and that, as a result of that fraud, it loaned $400,000 to
    Credifinance Securities Limited.  According to DSLC Capital Corp., the
    $310,500 is directly traceable to that $400,000 loan and, therefore, should be
    impressed with a constructive trust in favour of DSLC Capital Corp.

[30]

It was DSLCs appeal.  It framed the issue to be heard by the appeal judge, and all parties
    agreed to the process to be followed.  While the Trustee may have disagreed with what issue was to be decided,
    the appeal judge was required to address the issue put forward by DSLC.  I fail to see where he committed any error in
    doing so.  There is no merit to this
    submission.

(2)       The
    fraud issue

[31]

Before the appeal judge, counsel for the Trustee  who
    is also counsel on this appeal  took two positions that demonstrate that the
    Trustee was fully engaged in the issue of fraud that she now asserts the appeal
    judge had no jurisdiction to decide.  First, she argued that, even if there was a fraudulent
    misrepresentation, it would not allow DSLC to bypass the BIA.  Her view was  as it
    continues to be  that in bankruptcy proceedings, there is no special status
    accorded to a victim of a fraud.

[32]

Second, she fairly conceded

again as she does here

that constructive trust
    principles can be applied in bankruptcy proceedings, however, those principles
    are applied only in the most extraordinary cases.  She relies on
Ascent
    Ltd. (Re)

(2006)
,
18 C.B.R. (5th) 269 (Ont. S.C.)
    as illustrating such a case.  Indeed, in
    her oral submissions, counsel conceded that a trustee could, albeit in
    extraordinary circumstances, find a
de
    facto
constructive trust by allowing the property claim, or otherwise refer
    the issue for a hearing before a Bankruptcy Registrar or judge of the Superior
    Court.

[33]

There is no question that the remedy of constructive
    trust is expressly recognized in bankruptcy proceedings.  Both the case law and authors of texts make
    this clear, although the test for proving the existence of a constructive trust
    in a bankruptcy setting is high: L.W. Houlden & Geoffrey Morawetz,
Houlden and Morawetz Bankruptcy and
    Insolvency Analysis
(Toronto: WL Can, 2011) at F§5(1).  The authors add this at F§5(8): A
    constructive trust will ordinarily be imposed on property in the hands of a
    wrongdoer to prevent him or her from being unjustly enriched by profiting from
    his or her wrongful conduct (citations omitted).

[34]

Ascent,
a case decided by an Ontario Registrar
    in Bankruptcy, is a case that demonstrates
    the type of circumstances that can make a case extraordinary.  I found this case to be very
    instructive.

[35]

The Registrar in
Ascent
held that i
n
its
role as the arbiter of commercial morality, the
    Bankruptcy Court can rely on equitable principles, even at the expense of the
    formulaic aspects of the BIA scheme of distribution: para. 17.

[36]

An example of commercial immorality is
    described in
Ascent
as being where a
    bankrupt and its creditors benefit from misconduct by the bankrupt which was
    the basis upon which the property was obtained.  The Registrar held that to permit an estate to retain the property in
    such circumstances amounts to an unjust enrichment, and the court can impose a
    constructive trust on an estates assets to remedy the injustice.  Furthermore, it matters not which assets are
    consumed to remedy this: para. 18.

[37]

Thus,
a constructive trust in bankruptcy proceedings can be ordered to remedy an injustice; for example, where permitting the creditors access to the bankrupt’s property would result in them being unjustly enriched.  The prerequisite is that the bankrupt obtained the property through misconduct.  The added necessary feature is that it would be unjust to permit the bankrupt and creditors to benefit from the misconduct.

[38]

A Trustee in bankruptcy is an officer of the court and
    must act in an equitable manner.  Enriching creditors with a windfall and depriving another of its
    interest in property, has been held to be an offence to natural justice.  As Karakatsanis J. (as she then was) held at
    para. 14 in
Elez (Re)
(2010), 54
    E.T.R. (3d) 31 (Ont. S.C.), The court will not allow the trustee, as an
    officer of the court, to stand on his legal rights if to do so would offend
    natural justice (citations omitted).

[39]

Some of the relevant findings of the appeal judge,
    which demonstrate why this case is somewhat exceptional, bear repeating:

[23]                 I
    am also satisfied, on a balance of probabilities, that, but for the deceit, Mr.
    Lorenzo [the director of DSLC who negotiated with Benarroch] would not have
    entered into any agreement concerning Credifinance Securities Limited, would
    not have lent Credifinance Securities Limited $400,000, and Credifinance would
    not have $310,500 in its bank account.

[24]                 At
    present, it appears that Georges Benarroch and a company he controls,
    Credifinance Capital Corp., have filed secured claims in the bankruptcy of
    Credifinance Securities Limited.  It appears that the other creditors are
    lawyers who acted for Credifinance Securities Limited in the litigation against
    DSLC Capital Corp and its attempts to recover the $400,000 and in the IDA [Investment
    Dealers Association] investigations.  In this regard, it is also a fact
    that Georges Benarroch, through his company, Donabo Inc., has guaranteed the
    fees of the Trustee.

[40]

Thus, as the appeal judge found, DSLC was the victim of
    a fraud perpetrated by Credifinance and Benarroch.  Importantly, the only creditors of
    Credifinance impacted by the appeal judges order are Benarroch and his
    lawyers.  Enriching Benarroch, therefore,
    with a windfall and depriving DSLC of its interest in the $310,500 would be fundamentally
    unjust.

[41]

The constructive trust granted by the appeal judge was
    just in the circumstances of this case and did not unjustly deprive creditors
    of their rights under the BIA.  In the
    words of the appeal judge at para. 34, those funds should be the subject of a
    constructive trust in favor of DSLC Capital Corp. in order to prevent the
    unjust enrichment of Credifinance Securities Limited.

[42]

It was within the appeal judges jurisdiction to grant
    the remedy he did.  Furthermore, there
    was ample evidence upon which the appeal judge could rely to make the findings
    he did, and they are reasonable and entitled to deference from this court.  I would, therefore, reject this argument.

[43]

Before leaving this issue, I believe it is important to make
    a final observation.  The appeal judges
    reasons should not be interpreted to suggest that once a civil fraud by the
    bankrupt on the claimant, whose claim was disallowed by the trustee, is proven,
    and that is coupled with a loss and an ability to trace the consequences of the
    fraud, then a constructive trust will always be imposed.  That, in my view, is too broad.

[44]

Constructive trust is a discretionary remedy.  In a bankruptcy there are other interests to
    consider besides those of the defrauder and the defraudee: there are other
    creditors.  Thus, the exercise of
    remedial discretion must be informed by additional considerations than in a
    civil fraud trial.  The appeal judge in
    our case clearly understood this, considered the claims of the creditors, found
    them to be tainted by
Benarrochs
misconduct, and concluded
    that a rigid formulaic approach, relying strictly on the letter of the BIA
    would produce an unjust result.

THE CROSS-APPEAL

[45]

The appeal judges decision on costs is
    explained in full in his reasons at para. 35: Having regard to the fact that
    the effect of my ruling means that the Estate of Credifinance Securities
    Limited has virtually no assets, there will be no order concerning costs.
DSLC in its cross-appeal asserts that this was an error and the appeal
    judges decision is not entitled to deference.  I disagree.

[46]

The
    general rule in these types of proceedings is found in the provisions of the
    BIA.  Section 197(1) provides that the
    costs of and incidental to any proceedings in court under the BIA are in the
    discretion of the court.  Section 197(3)
    provides that where an action or proceeding is brought by or against a trustee,
    or where a trustee is made a party to any action or proceeding, he is not
    personally liable for costs unless the court otherwise directs.

[47]

As
    this court held in
McNaughton Automotive Ltd.
v.
Co-operators General
    Insurance Co.
(2008), 95 O.R. (3d) 365 (C.A.) at paras. 23-26, leave to
    appeal a costs decision is granted sparingly and only in obvious cases.  This is because decisions as to costs are
    highly discretionary and are accorded a very high degree of deference.  Generally, they will only be interfered with
    where it can be demonstrated that the decision maker is plainly wrong or has
    made an error in principle.

[48]

While trustees in bankruptcy are not exempt from
    liability for costs, the jurisprudence in the field suggests that they will
    only be liable in limited circumstances: see
Farm Mutual Financial Services
    Inc. (Re)
(2010), 66 C.B.R. (5th) 85 (

Ont.
S.C.).  I fail to see any such limited circumstances
    in this case.  DSLC has not met its heavy
    burden and has not satisfied me that this is an obvious case.

[49]

Accordingly, I would deny DSLC leave to appeal the
    award of costs.

DISPOSITION

[50]

For the reasons herein I would dismiss the Trustees
    appeal.  I would deny DSLC leave to
    appeal the costs order of the appeal judge.

[51]

Although DSLC was unsuccessful on its cross-appeal, it
    was wholly successful in the main appeal.  After factoring this into my analysis, I would award DSLC its costs in
    this court fixed in the amount of $20,000, inclusive of disbursements and
    taxes, paid from the estate.

RELEASED:

MAR -2 2011                                           H.S.
    LaForme J.A.

STG                                                            I
    agree S.T. Goudge J.A.

I
    agree Robert Sharpe J.A.


CITATION:
Deep v. College
          of Physicians and Surgeons of Ontario, 2011 ONCA 196

DATE:
          20110311

DOCKET:
          M39387/M39512/C52721

COURT
          OF APPEAL FOR ONTARIO

MacPherson, Rouleau and Epstein JJ.A.

BETWEEN

Albert Ross Deep, M.D., F.R.C.P. (C)

Plaintiff/Appellant

and

The College of
          Physicians and Surgeons of Ontario, Dr. David
Massel
,
          Ms. Carolyn Silver, Dr. Turnbull, Dr. David Walker, Dr. M. Gabel, Dr. N. De,
          Dr. T.
Moriarity
, Mr. R. Pratt, Mr.
Dhawan
, Dr. Rocco
Gerace
,
          and Dr. Melvin

Defendants/Respondents

BETWEEN

The College of Physicians and Surgeons of Ontario

Applicant/Respondent

and

Dr. Albert Ross Deep

Respondent/Appellant

Dr. Albert Ross Deep, acting in person

Michelle Gibbs, for the respondents

Heard
and released orally: March 4, 2011.

On appeal from the order of Justice Ruth E.
Mesbur
of the Superior Court of Justice dated September
          23, 2010.

ENDORSEMENT

[1]

The appellant, Dr. Albert Ross Deep, appeals from the
    order of
Mesbur
J. of the Superior Court of Justice
    dated 23 September 2010, dismissing his action against the respondents and
    granting the Colleges application to declare him to be a vexatious litigant
    pursuant to s. 140 of the
Courts of
    Justice Act
, R.S.O. 1990, c. C.43.

[2]

On the application to declare the appellant to be a
    vexatious litigant, we agree with the factual findings, legal analysis and
    conclusions of Justice
Mesbur
.

[3]

With respect to the appeal from the order dismissing
    his action, we agree with the motion judge that the claim is, at its root, an
    attempt to relitigate claims that have been previously adjudicated and
    dismissed. Further, the claim is based on documents that are inadmissible in a
    civil proceeding by operation of s. 36(3) of the
Regulated Health Professions Act 1991
, S.O. 1991 c.18 (see
Task Specific Rehabilitation Inc. v.
Steenecke

(2004), 188 O.A.C. 318). Without this
    evidence the appellant has no way of proving the necessary facts to support his
    claim.

[4]

The appeal is dismissed.

[5]

For the sake of clarity, we state that, going forward,
    Dr. Deep must seek the leave of a superior court judge before taking any step
    in any proceeding in any court in Ontario, including this court: see
Varma
v.
Rozenberg
,
    1998
CanLII
4334 (O.N. C.A.), at
para
.
    5.

[6]

The respondents are entitled to their costs of the
    appeal fixed at $7,500 inclusive of disbursements and HST.

J. C. MacPherson J.A.

Paul Rouleau J.A.

Gloria
    Epstein J.A.


CITATION:
First
          Ontario Realty Corporation Ltd. v. Deng, 2011 ONCA 161

DATE: 20110301

DOCKET: C51723

COURT OF APPEAL FOR ONTARIO

Weiler, Watt and Karakatsanis JJ.A.

BETWEEN

First Ontario Realty Corporation Ltd.

Landlord/Respondent

and

Liangrui
Deng,
Guizhi
He, Dustin Yang, Jenny Yang and Yi Yang

Tenants/Appellants

Richard A. Fink, for the tenants/appellants

Chris G.
Paliare
and Michael
Fenrick
, for the landlord/respondent

Heard:  December
          16, 2010

On appeal from the order of Associate Chief Justice
          Cunningham, and Justices Swinton and Smith of the Superior Court of Justice (Divisional
          Court), dated October 29, 2009.

COSTS ENDORSEMENT

[1]

The appellant shall pay the respondent’s costs of
    the appeal, fixed in the amount of $5,000.00 inclusive of disbursements and all
    applicable taxes.

“Karen M.
Weiler
J.A.”

“David Watt J.A.”

“Karakatsanis J.A.”


CITATION: Healey v. Lakeridge Health Corporation, 2011 ONCA 208

DATE: 20110316

DOCKETS: C51777 & C51778

COURT OF APPEAL FOR ONTARIO

Winkler C.J.O., Moldaver, Feldman, Sharpe and Simmons JJ.A.

BETWEEN

Garrett Joseph Healey

Plaintiff (Appellant)

and

Lakeridge
Health Corporation
          and David J. Ross

Defendants
          (Respondents)

AND BETWEEN

Michael
          David
Horgan

Plaintiff (Appellant)

and

Lakeridge
Health Corporation, David
          J. Ross and
Hak
Ming Chiu

Defendants
          (Respondents)

Kirk
Baert
and Jonathan
Ptak
, for the plaintiffs (appellants)

Barry Glaspell and Tanya Goldberg,
          for
Lakeridge
Health Corporation

Mary Thomson and Belinda Bain, for
          David J. Ross and
Hak
Ming Chiu

Leah Price, for the intervener Law
          Foundation of Ontario

Heard: December 6 & 7, 2010

On appeal from the orders of Justice Paul Perell of the
          Superior Court of Justice dated March 31, 2010 and May 25, 2010, with reasons
          reported at 72 C.C.L.T. (3d) 361 and supplemental reasons reported at 2010
          ONSC 725.

ENDORSEMENT RE COSTS

[1]

We have now received and considered the parties
    written submissions as to the costs of this appeal.  We award the respondents costs in the total
    amount of $60,000, inclusive of disbursements and applicable taxes, to be
    divided $35,000 to the respondent
Lakeridge
Health
    Corporation and $25,000 to the respondents Ross and Chu.
W. Winkler C.J.O.
M.J. Moldaver J.A.
K. Feldman J.A.
Robert J. Sharpe J.A
J.M. Simmons J.A.


CITATION:
Issasi v. Rosenzweig, 2011 ONCA 198

DATE: 20110311

DOCKET: M39807, M39812, M39818 (C52822)

COURT OF APPEAL FOR ONTARIO

Winkler C.J.O. (In Chambers)

BETWEEN

Amparo
          Marlen Rodriguez Issasi

Applicant (Respondent
          on Appeal)

and

Kenneth Espinal Rosenzweig

Respondent (Appellant
          on Appeal)

Jeffery Wilson, for the respondent and appellant on appeal

Philip Epstein, for the applicant and respondent on appeal

Lorne Waldman, for the proposed intervener, the United
          Nations High Commissioner for Refugees

Jacqueline Swaisland, for the proposed intervener, the
          Canadian Civil Liberties Association

Angus Grant, for the proposed intervener, the Canadian
          Council for Refugees

Sean Hanley, for the Attorney General of Ontario

Heard:
March 10, 2011

ENDORSEMENT

[1]

Three motions for leave to intervene were brought in
    this appeal. The United Nations High Commissioner for Refugees (the UNHCR),
    the Canadian Council for Refugees (the CCR) and the Canadian Civil Liberties
    Association (the CCLA) have all brought motions to intervene as friends of
    the court.  The motions were heard
    together.

The Underlying Appeal

[2]

The underlying appeal is
of an order of Justice Czutrin of the
    Superior Court of Justice, in which he granted an application under the
Hague Convention on the Civil Aspects of
    International Child Abduction
(the
Hague Convention
) to have a then thirteen year old girl returned to her
    purported habitual residence with her mother in Mexico.  The parties to the appeal are the girls
    parents.  The applicant and respondent on
    appeal is the girls mother (the mother).  The respondent and appellant on appeal is the
    girls father (the father).

[3]

Pursuant to Justice Czutrins order the child was
    returned to Mexico where she is currently living.

[4]

At the time of the Superior Court hearing, the child
    was a Convention refugee living in Canada.  She did not testify at the Superior Court hearing.

[5]

The appeal raises questions about the proper
    relationship between the
Hague Convention,
which is incorporated into Ontarios
Childrens
    Law Reform Act,
and the federal
Immigration

and

Refugee Protection Act
, which incorporates provisions of
    international law that prohibit the
refoulement
of refugees.

[6]

In addition, constitutional issues have been raised on
    appeal.  The father, on appeal, has
    asserted that his section 7 rights under the
Charter of Rights and Freedoms
have been contravened because he did
    not receive adequate notice of the Superior Court application. He further
    asserts that his daughters section 7 and section 12 rights under the
Charter
have been contravened

because her liberty and security
    interests were affected without giving her notice or an opportunity to be
    heard.

[7]

There are two pending motions in this appeal scheduled
    for March 30, 2011. The appeal itself is scheduled to be heard on April 13,
    2011.  The mother has brought a motion to
    quash the appeal as an abuse of process.  The father has brought a motion to have the Office
    of the Childrens Lawyer assign counsel to represent the child.

[8]

The Attorney General of Ontario has also exercised his
    right to intervene in this matter.

Request for Adjournment

[9]

The mothers first position is that the motions to
    intervene should themselves be adjourned.  Her counsel asserts that the dates for these
    motions to intervene should be set by the panel for a date to occur sometime
    after the March 30 motion to quash is heard and determined.  Counsel for the mother asserts that the mother
    is indigent and that his firm is working
pro
    bono
on this case. He asserts that he should not be required to devote
    considerable resources to respond to three motions to intervene, and then
    potentially three intervener factums, until after his motion to quash is heard
    and it is determined that the appeal is going to proceed.

[10]

I am not prepared to adjourn this motion. The appeal is
    scheduled to be heard on April 13, 2011. Both parties recognize the importance
    of dealing with this matter expeditiously and in oral argument both asserted
    that the hearing should proceed on the scheduled day. There would not be enough
    time between March 30 and April 13 for these motions to intervene to be heard
    and determined, for the interveners to file their factums, and for the parties
    to reply to these factums if necessary.  Despite
    counsel for the mothers submission in oral argument that he thought the appeal
    hearing should continue to go ahead on April 13, 2011, his submissions in his factum
    were that the hearing of the appeal should also be adjourned to a date to be
    set by the panel. Realistically, this would be the necessary consequence of
    delaying these motions.  I am not prepared
    to cause such a delay in a case of this nature.

The Test for Intervention

[11]

Dubin C.J.O. is frequently cited as succinctly
    articulating the test for determining a motion to intervene in
Peel (Regional Municipality)
v.
Great Atlantic and Pacific Co. of Canada
(1990),
    74 O.R. (2d) 164:
[T]he matters to be considered are the nature of the case, the
    issues which arise and the likelihood of the applicant being able to make a
    useful contribution to the resolution of the appeal without causing injustice
    to the immediate parties.

The Proposed Interveners

[12]

The UNHCR was established in 1950 and is entrusted with
    the mandate to provide international protection to refugees and, together with
    governments, to seek solutions to the problem of refugees.  One of its roles under its enacting statute
    is supervising [the] application of international conventions for the
    protection of refugees.

[13]

Counsel for the UNHCR asserts that it only selectively
    intervenes in domestic cases, but that the interaction between the
Hague Convention
and the principle of
non-refoulement
raised in this case is
    of high importance and has not previously been addressed by an appellate level
    court.  Given the unique role and expertise
    of the UNHCR in addressing refugee related matters, I am content that it can
    make a useful contribution to the consideration of the issues raised in this
    appeal.

[14]

The CCR is a national, non-profit organization founded
    in 1978.  It is an umbrella organization
    comprising approximately 170 member agencies that work with and on behalf of
    refugees and immigrants in Canada.  Its
    mandate is to promote, protect and advance the rights of refugees and
    immigrants in Canada.  It asserts that it
    has intervened in every major refugee case in Canada over the last 20 years.

[15]

There is likely some overlap between the expertise of
    the CCR and the UNHCR, but given that the CCR represents Canadian organizations
    that advocate for refugees in Canada, I am satisfied that its perspective is
    different than that of the UNHCR and that they both can make useful
    contributions in this appeal.

[16]

The CCLAs mandate is to promote and protect
    fundamental rights and liberties. The CCLA has been granted intervener or party
    status in many cases relating to civil liberties. They cite 139 such cases in
    an exhibit to their factum.  Its work
    includes advocacy and education concerning human rights in the immigration
    context.

[17]

Counsel for the mother asserts that section 7 was not
    raised at the application stage and that an insufficient factual record has
    been established to argue constitutional issues. The fact is, however, that the
    father has raised section 7 and asserts that there is an adequate record to
    address these issues.  The question of
    whether section 7 should or should not be considered in this matter is better
    left for the panel hearing the appeal to decide.

[18]

The CCLA has an established interest and expertise in
    matters relating to civil liberties.  I
    am satisfied that the CCLA can make a useful contribution in speaking to the
    section 7 issues that are raised in this appeal.

Will injustice be caused to the parties?

[19]

Counsel for the mother opposes all the motions to
    intervene, but has not asserted any arguments that demonstrate that their presence
    will cause injustice.  Conditions can be
    placed on the interveners participation such that their submissions are
    limited to their areas of expertise and their submissions are contained.  Furthermore, a timeline can be established such
    that any response the mother may want to make to the factums of the interveners
    would not be due until after the motion to quash has been heard.

[20]

While this is a private dispute between two parents
    regarding their daughter, it raises public interest issues that have widespread
    domestic and international importance. In such cases it is appropriate to allow
    public interest interveners, who can make a useful contribution, to be
    permitted to intervene unless their presence causes an injustice:
Childs
v
. Desormeaux
(2003), 67 O.R. (3d)
    385.  I do not see how the presence of
    the proposed interveners would cause an injustice.

[21]

Accordingly, I grant the motions for leave to intervene,
    subject to the following conditions, which apply to all interveners, including
    the Attorney General.

1.         The interveners must accept the record
    as it exists and not seek to augment the record.

2.         The interveners shall not duplicate the
    written or oral arguments of the other parties.

3.         The UNHCR will be restricted to making
    submissions related to the areas stated in section 12 of its factum which are
    the following:

a.      The scope and content of the principle of
non-refoulement
under international law.

b.      The interpretation and application of the
    prohibition of expulsion of refugees lawful in the territory of a Contracting
    State.

c.      The interaction between the
1951 Convention relating to the Status of
    Refugees
(the
Refugee Convention
)
    and the
Hague Convention
.

d.      A child-sensitive application of the
Refugee Convention
and the
Hague Convention
consistent with the
Convention on the Rights of the Child
.

e.      Application of the
Convention on the Rights of the Child
in the context of refugee
    children.

4.         The CCR will be restricted to making
    submissions on issues raised in paragraphs 38- 42 of its factum which, in
    summary, are as follows:

a.

The appropriate application of Canadian and
    international law to refugees and refugee claimants in Canada in general and in
    this case specifically.

b.

The analysis and role of the Immigration
    and Refugee Board in assessing refugee claims of child victims of abuse.

c.

The appropriate role and expertise of
    the Immigration and Refugee Board.

d.

The appropriate interaction of the
Hague Convention
and the
Refugee Convention.

5.         The CCLA will be restricted to making
    submissions on issues reflected in paragraphs 21 and 22 of the affidavit it has
    submitted from Noa Mendelsohn Aviv in this motion which, in summary, are issues
    related to the application of section 7 of the
Charter
to this case.

6.         Each intervener may file a factum not
    to exceed 12 pages in length on or before March 21, 2011.

7.         Each intervener may have up to 10
    minutes in oral argument at the discretion of the panel.

8.         The mother may deliver a supplementary
    factum, if necessary, on or before April 6, 2011.

9.         The mother will be given 30 minutes in
    addition to the current 50 minutes that is currently allotted to her to make
    submissions.

10.       The interveners will not be able to
    intervene in either of the motions that are currently scheduled for March 30,
    2011.

11.       The interveners will not seek costs nor
    be subject to costs awarded against it.

W.
    Winkler CJO


CITATION: Langston v. Landen, 2011
      ONCA 242

DATE: 20110328

DOCKET: C53093

COURT OF APPEAL FOR ONTARIO

Doherty, LaForme and Epstein JJ.A.

BETWEEN

Charles Langston, Ernie Sheriff, Jakmin Investments
          Ltd., Tzvi Mond, Eva Carr, Soad Charitable Foundation, Bikur Cholim Jewish
          Volunteer Services, SheArim, Yesodei Cholim, Zareinu, Queensway General
          Hospital, Toronto General Hospital, the Toronto Humane Society, Alzheimer
          Society of Canada, Canadian Friends of Birkat Moshe, Capuchin Outreach for
          the Poor, Parkdale, the Parkinson Foundation of Canada, the Scott Mission,
          the Estate of Lorraine Penna, the Estate of Mikey Drutz, the Estate of Murray
          Osheroff,
the Estate Trustee During Litigation for the Estate of Paul
          Penna

Plaintiff (Respondent)

and

Barry Landen
, Pauline Landen and 1435031 Ontario
          Limited

Defendant (Appellant)

Phil Downes and Graeme A. Hamilton, for appellant

Matthew P. Sammon and Paul-Erik Veel, for the respondent

Heard:  March 25, 2011

On appeal from the sentence imposed by Justice Greer of the Superior
          Court of Justice on November 24, 2010.

APPEAL BOOK ENDORSEMENT

[1]

We would not interfere with the sentence.  The context in which the
    contempts occurred was a very important consideration and was properly
    emphasized by the motion judge in determining the sentence needed to adequately
    vindicate the due administration of justice.

[2]

The motion judge did not owe deference to the trustees submissions on
    sentence. She had to give them careful consideration and there is no reason to
    think she did not.  While it would have been preferable had the motion judge
    advised counsel that she was considering a significantly longer sentence than
    that suggested by either counsel, we would not characterize the failure to do
    so as an error in principle.  In any event, the ultimate question is the
    fitness of the sentence imposed and we are satisfied that this sentence was fit
    in the circumstances.

[3]

The appeal is dismissed.  Costs to the estate trustee (respondent) in
    the amount of $15,000, inclusive of disbursements and HST.


CITATION:
Lywood
v. Hunt, 2011 ONCA 229

DATE: 20110325

DOCKET: C52037

COURT OF APPEAL FOR ONTARIO

Sharpe, Gillese and Karakatsanis JJ.A.

BETWEEN

Wayne
Lywood
and Ruth
Lywood

Applicants (Appellants)

and

Robert Noel Hunt

Respondent

Jerry Switzer, for the appellants

Charles Baker, for the respondent

Heard:
March 22, 2011

On appeal from the judgment of Justice J. Lauwers of the
          Superior Court of Justice dated May 29, 2009.

ENDORSEMENT

[1]

This appeal concerns the nature and extent of the
    rights of the respondent pursuant to a right-of-way over the property of the
    appellants.  The parties own adjacent
    cottages at Sturgeon Lake.  The
    appellants cottage fronts on the lake and the respondents cottage is located
    behind that of the appellants.  The right-of-way
    at issue involves water access.  The
    application judge gave careful and detailed reasons and made a number of
    determinations that are not at issue on this appeal.

[2]

The appellants raise only two issues relating to the
    interpretation of the grant of right-of-way:

1)

Is there only one right-of-way for the limited purpose
    of maintaining a pipeline for drawing water from the lake and accessing a pump
    in a boathouse?

2)

If there are two rights-of-way, should they both be
    exercised on the same side of the appellants property?

[3]

The appellants are the owners of Lot 9, the
servient
tenement and the respondent is the owners of Lot 21,
    the dominant tenement.  The right-of-way
    is in the following terms:

SUBJECT to a right-of-way for the Grantor and
    owners and occupants of Lot Number Twenty-one (21) as shown on a plan of a
    subdivision of part of Lots Numbers (7) and Eight (8)  to pass and re-pass
    along a defined path on the east side of the cottage erected on Lot Number Nine
    (9) as shown on said Plan Number 123 for the purpose of access to the shore of
    Sturgeon Lake but with no right to loiter thereon; AND SUBJECT to the right of
    the Grantor and the owner from time to time of said Lot Number Twenty-one (21)
    as shown on plan registered as Number 139 to use the pump in the boathouse for
    pumping water to the cottage erected on
said
Lot
    Number Twenty-one (21) as shown on Plan 139 , together with access for ingress
    and egress to and from the
said
boathouse for the
    purpose of using such pump.

[4]

We do not accept the appellants submission that this
    language creates one, single and unified right-of-way to maintain a pipe for
    drawing water from the lake on the east side of their property and that it excludes
    a right of access to the lake for recreational purposes.  In our view, the application judge did not err
    by interpreting the language of the right-of-way as, in effect, creating two distinct
    rights, the first to to pass and re-pass along a defined path on the east side
    of Lot 9 for access to the shore of Sturgeon Lake for recreational purposes;
    and the second to to use the pump in the boathouse for pumping water to the
    cottage on Lot 21 and the right to access for ingress and egress to and from
    the
said
boathouse for the purpose of using such pump.  We note that although the right-of-way does
    not specifically refer to the right to maintain a water line to the pump in the
    boathouse, it is common ground that that right is necessarily ancillary to the
    right to use the pump in the boathouse.

[5]

The right-of-way is drafted as two distinct grants.  The language of the first grant says nothing
    about the right to maintain a line for drawing water from the lake and
    explicitly provides for the right to pass and
repass

    along a path for the purpose of gaining access to the
shore
of Sturgeon Lake.  The application judge
    found on the evidence that the terms of the right-of-way allowed for lake
    access for recreational purposes and that it had been enjoyed for that purpose
    by the respondents predecessors in title.  As he put it at
para
. 7 of his supplementary
    reasons:

It is plain from the wording of the deeds that
    there are two rights-of-way, one, for the purpose of access to the shore of
    Sturgeon Lake but with no right to loiter thereon and, another, to use the pump
    in the boathouse for pumping water to the cottage.

[6]

We see no error of law or fact that would permit us to
    interfere with that conclusion.

[7]

The appellants second submission is that if the right-of-way
    does create both a right of access for recreational purposes and the right to use
    the pump  with the ancillary right to have a pipeline  the two rights-of-way
    should be combined so that both are enjoyed over the same side of the
    property.

[8]

The difficulty with this submission is that it flies in
    the face of the language of the instrument creating the rights-of-way.  The right of access for recreational purposes
    is explicitly along the east side of the appellants property.  The only boathouse is located on the west
    side of the property and there is evidence that the boathouse has been on the
    west side since the 1940s.  The installed
    water pipes are on the west side of the property.  There is no evidence capable of supporting a
    finding that there was ever a boathouse on the east side of the property.  While we can understand the appellants desire
    to have the two rights-of-way along the same side of their property, in our
    view, we would have to rewrite the instrument granting the rights-of-way to
    achieve that result and we have no power to do so.

[9]

Accordingly, the appeal is dismissed with costs fixed
    in the amount of $6,500 plus $242 for disbursements, plus applicable taxes.

Robert J. Sharpe J.A.

E.E. Gillese J.A.

Karakatsanis J.A.


CITATION:
Main Air Systems
          Inc. v. Premier Fitness, 2011 ONCA 230

DATE: 20110324

DOCKET: C52790

COURT OF APPEAL FOR ONTARIO

Sharpe, Gillese and Karakatsanis JJ.A.

BETWEEN

Main Air Systems Inc.

Plaintiffs (Respondents)

and

Premier
          Fitness, Premier Fitness Clubs Inc. and
Cardillo
Capital Corp. and John
Cardillo
Group of Companies,
and
John
Cardillo
and Sporting
          Ventures International Ltd. and
Curzons
Fitness Group Inc. and Regency Fitness Club

Defendants Appellants

Scott
Turton
, for the appellants

D. Seed and Brad Christakos, for the respondent

Heard & released orally:
March 22, 2011

On appeal from the judgment of Justice Miller of the Superior
          Court of Justice dated September 7, 2010.

ENDORSEMENT

[1]

In our view, the motion judge did not err in granting
    summary judgment in the total amount of $60,526.99.  In addition to the deemed admissions, the
    respondent adduced evidence to support that amount as being outstanding and the
    appellant failed to advance any evidence capable of raising a
triable
issue on the matter.

[2]

We see no error in awarding judgment against
Cardillo
Capital Corp. for $53,215.99 as the dishonoured
    cheque that admitted liability and induced the appellant to perform further
    work was drawn on that company, one of the corporate entities controlled and
    operated by John
Cardillo
, the individual behind
    Premier Fitness and the various other entities listed in the title of
    proceedings.

[3]

Nor did the motion judge err in awarding summary
    judgment in the principal sum of $60,526.99 against Premier Fitness Clubs
    Inc.

[4]

However, for the sake of clarity, the amounts
    recoverable on execution against the various corporate entities is limited to
    the total principal amount of $60,526.99, plus interest and costs, and
    execution against the various separate corporate entities is limited to the principal
    amounts that were requested by the respondent before the motion judge namely:

(1)

against Premier Fitness $60,526.99;

(2)

against Premier Fitness Clubs Inc. $60,526.99;

(3)

against
Cardillo
Capital
    Corp. $53,215.29;

(4)

against Regency Fitness Club & Racquet Club
    $8,477.13;

(5)

against Sporting Ventures International Ltd. $8051.37;
    and

(6)

against
Curzons
Fitness Group
    Inc. $2164.36

All amounts plus costs and interest
    at the rate awarded by the motion judge.

[5]

For these reasons, the appeal is dismissed.

[6]

We do not agree with the submission that there has been
    divided success on this appeal and we award the respondent cost in the amount
    requested namely, $13,687.52.

Robert J. Sharpe J.A.

E.E. Gillese J.A.

Karakatsanis J.A.


CITATION:
MBCO Summerhill
          Inc. v. MBCO Associates Ontario Inc., 2011 ONCA 236

DATE: 20110325

DOCKET: C52927

COURT OF APPEAL FOR ONTARIO

Armstrong, Juriansz and Watt JJ.A.

BETWEEN

MBCO Summerhill Inc.

Plaintiff (Respondent)

and

MBCO Associates Ontario Inc., MBCO Rosedale and George
          Elian

Defendants (Appellants)

M. McQuade, for the appellants

Andrea McEwan and Daniel Waldman, for the respondent

Heard & released orally:
March 22, 2011

On appeal from the order of Justice S. Chapnik of the Superior
          Court of Justice, dated October 5, 2010

ENDORSEMENT

[1]

The appellants appeal from the decision of Chapnik J.,
    dated October 5, 2010, granting summary judgment in favour of the respondent:

a)

declaring that the franchise agreement between MBCO
    Associates Ontario Inc. and the respondent was validly rescinded pursuant to s.
    6(2) of the
Arthur Wishart Act
;

b)

finding that the appellants Elian and MBCO Rosedale
    were franchisors associates within the meaning of the Act with the
    consequence that the respondents sublease from MBCO Rosedale was null and
    void; and

c)

requiring MBCO Associates Ontario Inc. and Elian to pay
    the respondent the sum of $128,226.69 pursuant to s. 6(6) of the Act.

[2]

The appellants counsel submitted that the findings of
    the motion judge that Elian owned 50% of the shares of the franchisor, ran the
    day-to-day business of the franchisor in Ontario, acted for the franchisor in negotiating
    the franchise agreement and executing the agreement on behalf of the
    franchisor, were insufficient to support a finding that he was a franchisors
    associate.  We disagree.  These facts did provide a basis for the
    finding.

[3]

In regard to MBCO Rosedale, the motion judge had a
    basis for finding that it was controlled by another person who also controlled
    the franchisor, namely, Elian.  She also
    had a basis for finding that the respondent had a continuing financial
    obligation to MBCO Rosedale in respect of the franchise, namely, the rent due
    on its sublease.  However, she did not
    cite any evidence for finding that MBCO Rosedale exercised significant
    operational control over the franchisee.  In fact, her reasons suggest that she considered that the continuing
    financial obligation amounted to significant operational control.

[4]

This case is different from
6862829 Ontario Ltd. v. Dollar It Ltd.
, [2008] O.J. No. 4687
    (S.C.J.) in which the lease clothed the landlord with the authority of the
    franchisor.  The lease in this case has
    no equivalent provision.

[5]

In the result, the appeal of MBCO Associates Ontario
    Inc. and Elian is dismissed.  The appeal
    of MBCO Rosedale is allowed and the order in respect of MBCO Rosedale is set
    aside.  The issue of whether MBCO
    Rosedale was a franchisors associate may proceed to trial.

[6]

The respondent shall have its costs of the motion in
    the Superior Court fixed at $16,000 inclusive of disbursements and applicable
    taxes.  The respondent shall also have
    its costs of the appeal fixed at $5,000 inclusive of disbursements and
    applicable taxes.

[7]

MBCO Rosedale shall have its costs of the motion in the
    Superior Court fixed in the amount of $5,300 inclusive of disbursements and
    applicable taxes.  MBCO Rosedale shall
    have its costs of the appeal fixed at $2,500 inclusive of disbursements and
    applicable taxes.

R.P. Armstrong J.A.

R.G. Juriansz J.A.

David Watt J.A.