COURT OF APPEAL FOR ONTARIO

CITATION: Maple Leaf Foods Inc. v. Ryanview Farms, 2015 ONCA
    566

DATE: 20150731

DOCKET: C58682

Simmons, Tulloch and Pardu JJ.A.

BETWEEN

Maple Leaf Foods Inc.

Plaintiff (Respondent)

and

Ryanview Farms, James Theodore Smith and Velma
    Jean Smith

Defendants (Appellants)

Martha Cook, for the appellants

Joan Mouland, for the respondent

Heard: March 16, 2015

On appeal from the judgment of Justice Roland L. Haines
    of the Superior Court of Justice, dated March 18, 2014.

By the
    Court:

[1]

The appellants appeal from a judgment requiring that they pay
    $16,503.71 to the respondent and dismissing their counterclaim. The main issue
    on appeal is whether the trial judge erred in assessing damages on the
    appellants counterclaim.

A.

Background

[2]

The appellants are pig farmers. In 2004 and 2005, they decided to
    depopulate their existing barns; clean and disinfect them; and repopulate their
    herds with healthy maiden breeding pigs (gilts) and boars to be purchased from
    the respondent.
[1]

[3]

In making the decision to purchase from the respondent, the
    appellants had spoken to a party interested in purchasing high health
    segregated early weaners (SEWs) (piglets 17 to 21 days old that have been
    weaned from their mother) for sale to the United States.

[4]

The appellants eventually entered into a contract with the
    interested party (the Werden contract) for the sale of approximately 550 SEWs
    per week at a price based on a percentage of the prevailing Hog Forward
    Contract Price, with a floor price of $36 and a ceiling price of $46.

[5]

The appellants chose to purchase from the respondent because the
    respondent represented their gilts would produce healthy SEWs.

[6]

In February 2006, the respondent delivered 1,130 gilts and 10
    boars to the appellants. One truckload (245 gilts) was delayed 20 hours in
    transit, with the result that these gilts were stressed on arrival and became
    ill with a respiratory virus. Over time, the sick gilts infected the entire
    herd (a total of 910 gilts) at the barn where they were housed.

[7]

The appellants and the respondent had continuing negotiations
    about how to resolve the issue of the sick gilts. In October 2006, the
    respondent agreed to provide 300 replacement gilts  100 free, 100 at slaughter
    price and 100 at standard price. One hundred and fifty eight
[2]
replacement gilts were delivered in November 2006. They, too, were sick on
    arrival because of transport issues.

[8]

The appellants and the respondent continued discussions into
    2007. The appellants claim the respondent agreed to provide 450 replacement
    gilts. The appellants also wanted purebred animals for breeding purposes, so
    they could begin breeding their own stock.

[9]

Between April and July 2007, the respondent delivered a further
    350 replacement gilts and 87 purebred animals. The trial judge found that, of
    these animals, the appellants rejected 22 gilts and 11 purebred animals as
    unsatisfactory.

[10]

The appellants and the respondent disagreed over the terms on
    which the replacement animals were delivered. The respondent delivered
    invoices, which the appellants did not pay. In 2008, the respondent sued the
    appellants for the balance owing on the sale of animals; the appellants counterclaimed
    for damages arising from loss of production due to the unsatisfactory quality
    of the gilts delivered.

[11]

Subsequently, in 2009, the appellants enrolled in the Hog Farm
    Transition Program, a federal government program created in response to low
    prices in the hog industry, under which payments were made to hog farmers who
    agreed to cease production for three years. Eventually the appellants lost
    their farm through foreclosure.

[12]

The calculation of damages on the appellants
    counterclaim was complicated by the depressed swine market. It was also
    complicated by the fact that, during the relevant period, through no fault of
    the respondent, the appellants animals became sick with porcine reproductive and
    respiratory syndrome (PRRS)  one barn in November 2006, and two barns in
    December 2007  with the result that the affected animals were unsaleable under
    the Werden contract and the parties to that contract treated it as terminated.

B.

The trial judges decison

[13]

Multiple issues were litigated at trial. The
    trial judges findings included the following:

·

the parties did not have a written contract;

·

the appellants never agreed to any terms or
    conditions that limited the liability of the respondent;

·

the sale of animals from the respondent to the
    appellants was subject to an implied warranty of fitness under the
Sale
    of Goods Act
, R.S.O. 1990., c. S.1, that the respondent
    would supply healthy, properly conformed gilts capable of producing healthy SEWs;

·

given the number of diseased animals supplied,
    and the conformation issues encountered, the appellants had demonstrated that
    the respondent breached the implied warranty of fitness;

·

the appellants failed to prove that they
    suffered any damages as a result of the respondents breach of warranty;

·

in 2007, the respondent agreed to supply
    replacement animals free of charge;

·

although Mr. Smith acknowledged during
    cross-examination that he believed the respondents agreement to provide
    replacement animals free of charge resolved all issues between the parties and
    that he would have honoured that agreement had he not been sued, the respondent
    was not entitled to hold the appellants to a bargain the respondent had failed
    to honour;

·

the balance owing to the respondent for pigs
    delivered is $16,503.71.
[3]

[14]

Concerning the appellants claim for damages for
    breach of warranty, the trial judge noted that Mr. Kertzman provided expert
    evidence for the appellants, and Mr. Hoare provided expert evidence for the
    respondent. Each party also called expert veterinarian evidence.

[15]

Mr. Kertzman calculated the appellants lost
    profits at $1,005,092 if the appellants continued to operate through to 2012  and
    at $635,679 if they participated in the Hog Farm Transition program. He
    calculated these figures by assessing the difference between anticipated
    revenue net of anticipated costs of production and actual revenue
[4]
net of actual costs of
    production. He made a 7% adjustment for contingencies.

[16]

In arriving at his conclusions, Mr. Kertzman accepted
    that, but for the delivery of the sick pigs, the appellants would have produced
    25 SEWs per sow per year, 550 SEWs per week and that the piglets would have
    been sold within the price range provided in the Werden contract. He used
    Ontario Ministry of Agriculture Food and Rural Affairs (OMAFRA) data for
    costs  as opposed to the appellants 2005 cost data  because he concluded the
    appellants current farrow to early wean operation was different than their
    2005 operation. He also used OMAFRA data as a reasonable proxy for the price
    the appellants would realize for the sale of non-productive sows into the
    market.

[17]

Mr. Hoare used the same methodology to calculate
    damages as Mr. Kertzman, but he relied on different assumptions. For example,
    his opinion was premised on an assumption, supported by the respondents
    veterinarian evidence, that the PRRS outbreaks precluded attributing any losses
    suffered subsequent to the outbreaks to the respondent. He therefore calculated
    losses for each barn up to the point where the PRRS outbreak for that barn had
    occurred. Using this methodology, he calculated lost profits to November 30,
    2007 as $164,883.

[18]

Further, unlike Mr. Kertzman, Mr. Hoare
    concluded that the appellants pre-2006 operation was sufficiently similar to
    their current operation to justify using their pre-2006 cost figures when
    calculating lost profits. In calculating projected revenues, he assumed the
    appellants would have produced between 21.2 and 22 weaners per sow per year,
    based on actual production in one barn that had healthy animals through to
    November 2006  and based on OMAFRA data for 2007. However, he too assumed the
    Werden contract price range would be available.

[19]

The trial judge reviewed the conflicting veterinarian
    evidence concerning the impact of the PRRS outbreaks. Although he observed that
    the evidence of both veterinarian experts appears to support the conclusion
    that the initial disease process and conformation issues [attributable to the
    respondent] had some continuing impact on the [appellants] operations
    subsequent to the outbreaks of PRRS, he concluded that he was unable to find
    any loss subsequent to November 2006 and  to determine the extent of any loss
    prior to that date.

[20]

The trial judge relied on several factors for these
    conclusions, including: he found the production records were contradictory, as
    a result, despite the obvious problems with the animals delivered, he was not
    satisfied the appellants had proven a loss in production; he concluded that the
    evidence relating to actual sales was incomplete; and he was not convinced the
    Werden contract price range would have been available as a result of the PRRS
    outbreak.

C.

the issues on appeal

[21]

The appellants raise multiple issues on appeal.
    However, their arguments come down to two main points. First, the trial judge
    erred in assessing damages on the appellants counterclaim. Second, after
    finding that the respondent agreed to supply replacement animals free of charge,
    the trial judge erred in failing to find how many free replacement animals the
    respondent agreed to provide and in failing to factor the shortfall into his
    calculation of the balance owing by the appellants to the respondent.

[22]

The respondent asserts that there is no merit in
    the appellants grounds of appeal. However, in the event this court decides to
    order a new trial, the respondent says that the trial judge erred in finding
    that the sale was subject to an implied warranty under the
Sale of
    Goods Act
and asks that that issue be addressed at any
    new trial.

D.

discussion

[23]

In our view, the trial judge erred in his
    approach to the assessment of damages. Although satisfied that the respondents
    breach of warranty had an impact on the appellants operation, both before and
    after the PRRS outbreaks, he concluded he was unable to find any loss
    subsequent to November 2006 and  to determine the extent of any loss prior to
    that date.

[24]

The trial judge reached his conclusion, at least
    in part, because he relied on production evidence set out in Canadian
    Agricultural Income Stabilization (CAIS)
[5]
records to draw conclusions about production as opposed to production evidence
    set out in PigCHAMP
[6]
records, which he found to be incomplete.

[25]

In our opinion, the trial judge erred in so doing.
    All the experts who testified at trial concerning lost profit calculations relied
    on the PigCHAMP records in making their calculations and only one  the
    respondents veterinarian  was in anyway challenged about the decision to do
    so. In chief, she noted that she was unable to correlate 2008 PigCHAMP records
    with 2008 CAIS records. In cross-examination, she was asked why she did not use
    the CAIS records. She explained that she did not have any concerns about the
    quality of the PigCHAMP records, and that when she was unable to reconcile
    certain aspects of the records, she chose to use the PigCHAMP records.

[26]

Further, Dr. Charbonneau, an expert in
    collection, presentation and interpretation of pig production data, gave
    evidence about the PigCHAMP record system and pig production generally. He
    explained that PigCHAMP is a computerized record keeping system developed
    through the University of Minnesota. It allows pig producers to submit data
    that is then analyzed by PigCHAMP. He viewed Canadian PigCHAMP statistics as a
    reliable source of information. Despite his expertise, he was not asked to
    comment on the appellants production records or the discrepancy between their
    PigCHAMP records or their CAIS records.

[27]

Equally significant is the fact that, on appeal,
respondent's counsel was unable to explain on what basis the trial
    judge arrived at certain conclusions using the CAIS records. Nor have we been
    able to determine that basis. The problem inherent in the trial judges
    decision to use the CAIS records, when none of the experts at trial used them,
    is the absence of evidence to explain how the records should be applied.

[28]

Further, the trial judge did not resolve some of
    the differences in the assumptions made by Mr. Kertzman and Mr. Hoare.

[29]

We also accept the appellants submission
    that the trial judge erred by failing to make a finding concerning the number of
free replacement animals the respondent agreed to
    provide and by failing to consider how, if all, any shortfall should factor into
    his calculation of the balance owing by the appellants to the respondent (and
    potentially into his damages calculation).

[30]

In the circumstances, we see no alternative but
    to order a new trial to address the following:

·

The assessment of damages for the respondents
    breach of implied warranty;

·

The number of replacement animals that were
    promised to the appellants, and the impact, if any of that determination on the
    calculation of the balance owing to the respondent (and potentially on the
    calculation of damages).

[31]

We see no error in the factual findings or legal
    conclusions drawn by the trial judge establishing the respondent's liability
    for breach of implied warranty.

[32]

In the result, a new trial is ordered on the
    issue of damages, the issue of the number of replacement animals that were
    promised to the appellants and the impact of the determination of that issue on
    the calculation of the balance owing to the respondent (and potentially
    damages). The costs award below is set aside and costs of the trial reserved to
    the judge hearing the new trial.

[33]

Costs of the appeal are to the appellants on a
    partial indemnity scale fixed in the amount of $15,000, inclusive of
    disbursements and applicable taxes.

Released:

KMvR                                    Janet
    Simmons J.A.

JUL 31 2015                           M. Tulloch J.A.

G. Pardu J.A.

[1]

The appellants dealings were actually with a predecessor of
    the respondent. For simplicity, we will refer simply to the respondent throughout.

[2]

One, out of the 159 animals transported, was dead on delivery.

[3]
In his reasons, the trial judge states that the appellants claimed that the
    amount owing to the respondent after all appropriate credits was $16,503.71.
    However, the invoice summary filed by the appellants during closing submission
    indicates the appellants claimed that was the amount owing subject to set
    off.

[4]

Mr. Kertzman relied on Ryanviews general ledgers to calculate
    actual revenue.

[5]
The CAIS records were prepared by the appellants accountant, Mr. McNeil. He
    explained that the CAIS program was designed to stabilize farm income and used
    a calculation to which he was not privy to do so. He confirmed that the
    appellants provided opening and closing inventory and births and deaths so he
    could complete the CAIS application. Although the appellants disputed it, he
    claimed the appellants also provided him with information concerning the SEWs
    sold. He would then estimate the number of pigs transferred in and out of
    various categories. He testified that the ending numbers in the CAIS records
    correspond to the Ryanview financial statements. He was not asked to reconcile
    any discrepancy between CAIS records and PigCHAMP records.

[6]
As explained by the trial judge,
PigCHAMP is a recording
    service that pig producers use as a management tool to record and track the
    various production aspects of their operations.


COURT OF APPEAL FOR ONTARIO

CITATION: Maple Ridge Community Management Ltd. v. Peel
    Condominium Corporation No. 231, 2015 ONCA 520

DATE: 20150709

DOCKET: C59661

Laskin, Lauwers and Hourigan JJ.A.

BETWEEN

Maple Ridge Community
    Management Ltd.

Plaintiff

(Respondent)

and

Peel Condominium
    Corporation No. 231

Defendant

(Appellant)

Michael A. Spears, for the appellant

Timothy Duggan, for the respondent

Heard: April 10, 2015

On appeal from the order of Justice David L. Edwards of
    the Divisional Court, dated June 16, 2014, with reasons reported at 2014 ONSC
    3660, and cost award dated August 1, 2014, with reasons reported at 2014 ONSC
    4524.

Hourigan J.A.:

Overview

[1]

At issue in this appeal is the sufficiency of the reasons for judgment
    delivered by a Small Claims Court deputy judge after a trial. On appeal to a
    single judge of the Divisional Court, the appeal court ruled that the trial
    judges reasons were insufficient to permit meaningful appellate review and
    ordered that the case be remitted to the Small Claims Court for a new trial
    before a different deputy judge.

[2]

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

Background

[3]

The appellant, Peel Condominium Corporation No. 231 (PCC 231), and the
    respondent, Maple Ridge Community Management Ltd., entered into a condominium
    management agreement for a term of three years commencing on December 1, 2009.
    Under its terms, either party could terminate the agreement on 60 days notice
    or pay in lieu of notice (art. 16.1) or, alternatively, immediately for cause (art.
    16.5(c)).

[4]

On September 30, 2010, the PCC 231 board of directors terminated the
    agreement with Maple Ridge pursuant to art. 16.5(c), which permits immediate
    termination where [t]he Manager is insubordinate, reckless, or grossly
    negligent in performing its duties.

[5]

In a letter to Maple Ridge, PCC 231 relied on the following grounds to
    justify termination for cause:

1)

Maple Ridge engaged in
    a roof replacement project without contracting an engineering professional to
    oversee the project;

2)

Maple Ridge accepted
    the roofing contractors contract without submitting it for legal review to
    ensure that PCC 231s interests were protected;

3)

Maple Ridge provided inconclusive
    information to the roofing contractor regarding the specific units to be
    replaced, resulting in an incorrect replacement that voided the associated
    warranty;

4)

Maple Ridge provided
    erroneous information to the PCC 231 board of directors regarding the potential
    impact of deferring roof replacement in three blocks;

5)

Maple Ridge issued
    incorrect status certificates even after the PCC 231 board of directors identified
    specific errors and provided corrected wording;

6)

Maple Ridge delayed in
    providing banking documents for signature at a time when payables were overdue
    and late charges were being incurred; and

7)

Maple Ridge failed to
    provide PCC 231 with requested reports related to the roofing contract.

[6]

In response to the termination, Maple Ridge commenced an action in Small
    Claims Court. Maple Ridge argued it had not been insubordinate, reckless or
    grossly negligent and was, therefore, entitled to 60 days notice or pay in
    lieu of notice. Maple Ridge sought $8,303.24 in damages for breach of contract.

Small Claims Court Judgment

[7]

The trial judge began by reviewing the background facts, then set out
    definitions of insubordination, recklessness and gross negligence, drawn
    from
Black's Law Dictionary
,
The Dictionary of Canadian Law
, John
    G. Fleming's
Law of Torts
, 6th ed. (Sydney: Law Book Company, 1983)

and
Holland v. Toronto (City)
, [1927] S.C.R. 242. He instructed himself,
    based on Allen M. Linden and Bruce Feldthusen's
Canadian Tort Law
, 8th
    ed. (Markham: LexisNexis, 2006), to "consider the cumulative effect of all
    of the factors or conduct and not fall into the error, where there are several
    factors, of considering [the factors] individually" in determining whether
    gross negligence was established.

[8]

The trial judge then examined each ground for termination raised by PCC 231
    in the letter to Maple Ridge and considered whether each ground amounted to
    insubordination, recklessness or gross negligence (i.e. cause for termination
    of the contract). With respect to ground 1, he stated that Maple Ridge's
    "lack of proper management and oversight [had] caused significant damages
    to [PCC 231]." He found there was no evidence to establish that grounds 2,
    3 and 4 had occurred, resulted in damages to PCC 231 or amounted to
    insubordination, recklessness or gross negligence. He found that ground 5 could
    amount to recklessness, ground 6 could amount to recklessness and negligence,
    and ground 7 could amount to insubordination.

[9]

The evidence also established that Maple Ridge had failed to register
    its address in the Land Titles Office, in contravention of the agreement;
    failed to collect funds owed to PCC 231 by unit owners; incurred bank charges
    unnecessarily; failed to transfer funds to correct accounts and made payments
    out of incorrect accounts; and failed to take minutes of board of directors
    meetings as required by the agreement.

[10]

Finally,
    the trial judge held that two additional allegations against Maple Ridge raised
    at trial could not be a basis for termination because they had occurred after
    PCC 231 terminated the agreement.

[11]

The
    trial judge concluded, at p. 7:

Notwithstanding that the grounds relied on by the Defendant in
    terminating the Agreement, may not have been sufficient individually to meet
    the tests outlined above, although in some cases I believe they were, I am
    satisfied that when taken together they are sufficient to constitute
    insubordination, recklessness and/or gross negligence entitling the Defendant
    to terminate the Agreement without notice pursuant to paragraph 16.5(c).

[12]

Accordingly,
    the trial judge dismissed Maple Ridges claim, holding that PCC 231 was
    entitled to terminate the agreement for cause, without notice, pursuant to art.
    16.5(c).

Divisional Court Reasons

[13]

On
    appeal to a single judge of the Divisional Court, the court found that the
    trial judge's reasons were insufficient to allow for meaningful appellate
    review as required by the test set out  in
R. v. R.E.M.
, 2008 SCC 51,
    [2008] 3 S.C.R. 3, at para. 17 While
R.E.M.
was a criminal case, these
    principles apply equally to reasons given in civil cases:
D.M. Drugs (Harris
    Guardian Drugs) v. Barry Edward Bywater (Parkview Hotel)
, 2013 ONCA 356, at
    para. 35;
F.H. v. MacDougall
, 2008 SCC 53, [2008] 3 S.C.R. 41, at paras.
    97-101.

[14]

Specifically,
    the reasons did not say what was decided or why. It was unclear
    "what" was decided because the trial judge did not indicate which of
    Maple Ridges acts or omissions individually amounted to insubordination,
    recklessness or gross negligence; he merely stated that grounds 5, 6 and 7
    "could" meet these standards. Further, the Divisional Court held, at
    para. 22, that it was unclear from the trial judges reasons which acts or
    omissions collectively rose to the level of insubordination, recklessness or
    gross negligence:

Are they the acts or omissions that he found
could
amount to insubordination, recklessness and/or gross negligence individually?
    If so, which? If not, are they the other acts or omissions that the Trial Judge
    concluded individually could not amount to insubordination, recklessness and/or
    gross negligence? If so, which?

[15]

According
    to the Divisional Court, the trial judge also failed to explain why he
    reached his conclusion. He did not specify why acts and omissions that were
    individually insufficient to constitute insubordination, recklessness or gross
    negligence collectively amounted to the same.

[16]

The
    other issues raised by Maple Ridge on appeal to the Divisional Court were:

(i)    What is the applicable standard of review?

(ii) Did the trial judge err in fact and law by misapprehending
    the evidence before him, by failing to consider all of the relevant evidence,
    or by making patently unreasonable findings contrary to the weight of the
    evidence before him?

(iii) Did the trial judge err in fact and law in the
    application of his findings of fact to the legal principles that he enunciated?

The Divisional Court declined to consider these additional
    issues because it found that the insufficiency of the reasons was dispositive
    of the appeal.

[17]

The
    Divisional Court set aside the judgment of the trial judge and returned the
    matter to the Small Claims Court for a new trial before a different deputy
    judge. A costs award was made in favour of Maple Ridge in the amount of $10,000.

Positions of the Parties on Appeal

[18]

PCC
    231 submits that the Divisional Court made the following five errors of law in
    allowing the appeal and ordering a new trial:

(i) Incorrectly concluding that the what and why of the
    trial judges reasons are unclear;

(ii) Failing to consider or even reference the extensive trial
    record in assessing the adequacy of the trial judges reasons;

(iii) Failing to apply a reasonableness standard in reviewing
    the trial judges decision;

(iv) Overlooking the nature of the claim and the Small Claims
    Court context; and

(v) Ordering a new trial without taking into account whether a
    substantial wrong or miscarriage of justice had occurred.

[19]

Maple
    Ridge submits that the Divisional Court did not err in concluding that the
    trial judges reasons were insufficient. Further, the Divisional Court considered
    the trial record, but the trial record could not have saved the trial judges
    reasons. Maple Ridge also argues that the standard of review for the trial
    judges reasons was correctness and not reasonableness. As for the Small Claims
    Court context, Maple Ridge submits that deputy judges of the Small Claims Court
    are not exempt from the obligation to give proper reasons, even though they preside
    over busy courts and deal with claims of relatively modest value. Finally, Maple
    Ridge argues that the referral of the matter back to Small Claims Court for a
    new trial was consistent with Divisional Court jurisprudence.

[20]

Maple
    Ridge also raises an additional issue. It argues that if this court finds the Divisional
    Court erred in granting the appeal, the case must be remitted to the Divisional
    Court. The Divisional Courts decision was based solely on the issue of the
    sufficiency of the reasons. Consequently, the other grounds of appeal raised by
    Maple Ridge in its appeal to the Divisional Court have not been considered.

Analysis

[21]

As
    stated above, I am of the view that the Divisional Court erred in finding that
    the reasons of the trial judge do not permit meaningful appellate review. In
    reaching this conclusion, I have determined that the Divisional Court incorrectly
    applied the standard for assessing the sufficiency of reasons, failed to
    adequately consider the trial record and failed to consider the Small Claims
    Court context in which the decision was rendered. I deal with each of these
    issues below.

[22]

I
    reject PCC 231s position on the remaining alleged errors. I am not satisfied
    that the Divisional Court was required to consider the reasons of the trial
    judge on a reasonableness standard. That standard, as described by the Supreme
    Court of Canada in
Newfoundland and Labrador Nurses Union v. Newfoundland
    and Labrador (Treasury Board)
, 2011 SCC 62, [2011] 3 S.C.R. 708, applies to
    a review of the reasons of an expert tribunal, not a court such as the Small
    Claims Court. The leading case on sufficiency of judicial reasons,
R. v.
    Sheppard
, 2002 SCC 26, [2002] 1 S.C.R. 869, at paras. 43-47 treats
    insufficient reasons as an error of law, reviewable on a correctness standard,
    and makes no mention of a deferential standard of review.

[23]

Further,
    it was not an error for the Divisional Court to remit the case back to the
    Small Claims Court for a new trial if the reasons of the trial judge were so
    insufficient that they were not capable of being reviewed:
Randall
    (Litigation Guardian of) v. Lakeridge Health Oshawa
, 2010 ONCA 537, at
    paras. 76-78.

(a)     The What and the Why

[24]

The
    Divisional Court relied on this courts decision
Law Society of Upper
    Canada v.

Neinstein,
2010 ONCA 193
,
for the principle that in
    order to permit meaningful appellate review, the reasons of a court must
    adequately express what was decided and why it was decided. Although the appeal
    justice correctly cited the standard to permit meaningful appellate review, he
    erred in applying that standard to the facts of this case.

[25]

In
    my view, the reasons of the trial judge clearly met the
R.E.M.
standard.
    After several pages of analysis, the trial judge concluded that although the
    grounds relied on by PCC 231 may not have been sufficient to constitute
    insubordination, recklessness and/or gross negligence when considered on an
    individual basis, collectively they were sufficient.

[26]

The
    Divisional Courts finding that the trial judge did not specify which grounds
    individually amounted to insubordination, recklessness or gross negligence was based
    on the trial judges statements that the allegations could meet these
    standards rather than that they actually did. The Divisional Courts interpretation
    is incorrect when read in the context of the entire trial decision. The trial
    judge reviewed each ground and stated whether it could individually meet the tests
    for insubordination, recklessness or gross negligence. He then stated that in
    some cases  presumably those where he earlier indicated that the ground
    could individually constitute insubordination, recklessness or gross
    negligence  the grounds
were
, as a matter of fact, sufficient to meet
    those tests on an individual basis.

[27]

In
    any event, this was not the sole basis for the trial judges conclusion. He
    explicitly recognized, based on an authoritative Canadian tort law treatise,
    that in assessing whether Maple Ridges conduct constituted gross negligence he
    was required to determine the cumulative effect of the acts and omissions
    rather than assess them individually. Thus, the trial judge's ground-by-ground analysis
    constituted an extra step that was not strictly required but was used to inform
    his ultimate conclusion.

[28]

In
    addition, the Divisional Courts finding that the trial judge did not
    demonstrate how he reached his conclusion because he did not state why acts and
    omissions that were individually insufficient to constitute insubordination,
    recklessness or gross negligence could collectively constitute the same is similarly
    unfounded when the trial judges reasons are read in context. As submitted by PCC
    231, it is self-evident, as a matter of logic and common sense, that multiple
    acts or omissions can rise to a level that one alone cannot reach. The trial
    judge explicitly and correctly stated that he was required to consider the
    cumulative effect of all the impugned conduct rather than to consider each
    allegation individually.

[29]

In
    summary, the what and why are clear in the trial judges seven pages of
    reasons, which comprised of a thorough analysis of the relevant evidence, legal
    definitions, and legal authorities. In terms of the "what", the trial
    judge found that the grounds relied on by PCC 231 cumulatively constituted
    insubordination, recklessness or gross negligence. In terms of the
    "why", notwithstanding that it is self-explanatory why two or more
    grounds that may not be individually sufficient may cumulatively be so, the
    trial judge cited supportive legal commentary requiring him to consider the aggregate
    effect of all the factors or conduct and not fall into the error of only considering
    them individually.

(b)     The Record

[30]

Having
    concluded that the reasons of the Small Claims Court were facially incapable of
    appellate review, the Divisional Court was obliged to consider the record
    before the trial judge to determine if the reasons were more comprehensible
    when read in the context of this record.

[31]

The
    level of requisite detail in reasons will be lessened "[w]here the record
    discloses all that is required to be known to permit appellate review:
Hill
    v. Hamilton-Wentworth Police Services Board
, 2007 SCC 41, [2007] 3 S.C.R.
    129, at para. 101. If a detailed record is available, the appellate court should
    not intervene simply because it thinks the trial court did a poor job
    expressing itself:
R. v. Sheppard
, 2002 SCC 26, [2002] 1 S.C.R. 869, at
    para. 26.

[32]

There
    was ample evidence in the trial record that established that Maple Ridge was
    insubordinate, grossly negligent and/or reckless. The appeal justice was
    required to consider that evidence before concluding that the reasons of the
    trial judge were inadequate. He did not do so. Instead, he appears to have
    restricted his analysis to a review of the text of the reasons without regard
    to the trial record. In my view, in failing to conduct a contextual analysis, the
    Divisional Court erred in law.

(c)    The Small Claims Court Context

[33]

The
    Supreme Court of Canada has recognized that access to justice is a significant
    and ongoing challenge to the justice system with the potential to threaten the
    rule of law. In
Hryniak v. Mauldin
,
2014
    SCC 7, [2014] 1 S.C.R. 87,
at para. 1, the court held:

Ensuring access to justice is the greatest challenge to the
    rule of law in Canada today. Trials have become increasingly expensive and
    protracted. Most Canadians cannot afford to sue when they are wronged or defend
    themselves when they are sued, and cannot afford to go to trial. Without an
    effective and accessible means of enforcing rights, the rule of law is
    threatened. Without public adjudication of civil cases, the development of the
    common law is stunted.

[34]

The
    Small Claims Court is mandated under s. 25 of the
Courts of Justice Act
,
R.S.O. 1990, c. C.43,
to
hear and determine in a summary way all questions of
    law and fact and may make such order as is considered just and agreeable to
    good conscience. The Small Claims Court plays a vital role in the
    administration of justice in the province by ensuring meaningful and cost
    effective access to justice for cases involving relatively modest claims for
    damages. In order to meet its mandate, the Small Claims Courts process and
    procedures are designed to ensure that it can handle a large volume of cases in
    an efficient and economical manner.

[35]

Reasons from the Small Claims Court must be sufficiently
    clear to permit judicial review on appeal. They must explain to the litigants
    what has been decided and why:
Doerr v. Sterling Paralegal
, 2014
    ONSC 2335, at paras. 17-19.
However, appellate
    consideration of Small Claims Court reasons must recognize the informal nature
    of that court, as well as the volume of cases it handles and its statutory
    mandate to deal with these cases efficiently.
In short, in assessing the adequacy of the reasons, context matters:
Massoudinia
    v. Volfson
, 2013 ONCA 29, at para. 9.

Just as oral reasons will not necessarily be
    as detailed as written reasons, reasons from the Small Claims Court will not
    always be as thorough as those in Superior Court decisions. Failing to take the
    Small Claims Court context into account
only
    serves to restrict access to justice by unnecessarily imparting formality and
    delay into a legal process that is designed to be informal and efficient.

[36]

In
    the present case, the Divisional Court decision overlooks the clear reasoning
    in the trial judges judgment and demands a level of detail that is
    significantly higher than generally required, particularly in Small Claims
    Court decisions.

Further Proceedings in the Divisional Court

[37]

I would not accede to the submission advanced by Maple Ridge that
    this case should be remitted back to the Divisional Court for a determination
    of the issues not considered by the appeal judge.

[38]

Pursuant to s.134 of the
Courts of Justice
    Act
, on appeal this court may
make any order or
    decision that ought to or could have been made by the court or tribunal
    appealed from and may make any other order or decision that is just.
If Maple Ridge wanted to uphold the judgment of the Divisional
    Court on grounds other than the inadequacy of the reasons, it should have made
    those arguments before this court.
"In both civil and criminal
    matters it is open to a respondent to advance any argument to sustain the
    judgment below, and he is not limited to appellants points of law" (
Perka
v.
The Queen,
[1984] 2 S.C.R. 232 at 240).
It is hardly
    proportionate or practical to suggest that this modest claim should be sent
    back to the Divisional Court for its third appeal.

[39]

In any event, the other grounds of appeal advanced by Maple Ridge
    are weak. It argues that the trial judge misapprehended the evidence by failing
    to consider all the evidence and making patently unreasonable findings. In
    addition, it submits that the trial judge erred in fact and law in his application
    of the facts to the legal principles he enunciated. The trial judges factual
    findings are entitled to considerable deference. There is nothing on the record
    before us that suggests that he made any palpable and overriding error in any
    of those findings. I am also of the view that those factual determinations
    amply supported his legal conclusion that the actions of Maple Ridge
    constituted insubordination, recklessness and/or gross negligence.

[40]

For these reasons, I would decline to remit the case back to the
    Divisional Court.

Disposition

[41]

I
    would allow the appeal, set aside the order of the justice of the Divisional
    Court and reinstate the judgment of the Small Claims Court.

[42]

With
    respect to the costs of the appeal in the Divisional Court, I would reverse the
    order of the Divisional Court and award $10,000 to PCC 231 as the successful
    party. PCC 231 is also entitled to its costs in this court, which I would fix
    at $7,500.

Released: July 9, 2015 JL

C.
    W. Hourigan J.A.

I
    agree John Laskin J.A.

I
    agree P. Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Menzies Lawyers Professional Corporation v. Morton,
    2015

ONCA 553

DATE: 20150727

DOCKET: M44416

Lauwers J.A. (In Chambers)

In the Matter of the Proposal
    of Edwin Harold Morton: Ottawa Bankruptcy

BETWEEN

Menzies
    Lawyers Professional Corporation,

Menziesbank
    Corp. and Douglas G. Menzies, personally

Applicants

and

Doyle
    Salewski, Trustees in Bankruptcy

for
    Edwin Morton and the Attorney General of Canada

Respondents

Douglas G. Menzies, acting in person

Stephanie Lauriault, for the Attorney General of Canada

Heard:  November 18, 2014

An application for an extension of time to file notice of
    appeal and for leave to appeal from the order of Justice S.J. Kershman, dated September
    18, 2014, with reasons reported at 2014 ONSC 5438.

Lauwers J.A.:

[1]

The Menzies Lawyers Professional Corporation, and Douglas Menzies
    personally, acted for many years for the bankrupt, Edwin Morton, in lengthy and
    protracted matrimonial proceedings. They postponed their claim for fees on a
    number of occasions and sought, in the application at issue, to protect their
    accounts out of Mr. Mortons estate, having been completely surprised by his
    bankruptcy. They applied for the recognition of a solicitors lien for about
    $133,000 in respect of their representation of Mr. Morton and a charging order.

[2]

Menziesbank assisted in the implementation of the matrimonial
    settlement. It claimed a salvage lien for $30,000, the amount it paid to clear
    two execution creditors interests so that the sale of the matrimonial home
    could close.

[3]

The application judge refused to grant the solicitors a charging order
    and to grant Menziesbank a salvage lien.

[4]

This motion raises two issues. First, do the applicants require an
    extension of time to serve the notice of appeal?  Second, is leave required for
    the appeal itself under s. 193 of the
Bankruptcy and Insolvency Act
,
    R.S.C. 1985, c. B-3 (the
BIA
)?

A.

IS AN Extension of Time for Leave to Appeal under the Rules REQUIRED?

[5]

The applicants were under the mistaken impression that the
Rules of
    Civil Procedure
, R.R.O. 1990, Reg. 194 (the
Rules
) applied to
    this appeal, and so they had 30 days to appeal. In fact, since this was a
    decision of the Bankruptcy Court, the appeal to the Court of Appeal lies under
    s. 193 of the
BIA
.  Therefore, under rule 31(1) of the
Bankruptcy
    and Insolvency General Rules
, C.R.C., c. 368, the appeal must be brought
    within 10 days or within such further time as a judge of the Court of Appeal
    stipulates.

[6]

Since the appeal was late, I am obliged to consider the following
    factors in exercising discretion to extend the time for filing the notice of
    appeal:

a)

whether the applicant
    had a
bona fide
intention to appeal before the expiration of the
    appeal period;

b)

any explanation for
    the delay in filing;

c)

any prejudice to the
    responding parties caused by the delay; and

d)

the merits of the
    proposed appeal.

[7]

Based on the affidavit material and the hotly contested nature of the
    dispute between the parties, I am satisfied that the applicants had a
bona
    fide
intention to appeal before the expiry of the appeal period, but they
    misapprehended the applicable rules, which explains the delay. There would be
    no prejudice to the responding parties in granting leave to appeal since the
    funds are in court earning interest.

[8]

The remaining issue to be addressed before time can be extended turns on
    the merits of the appeal, which dovetail with the appellants appeal rights
    under s. 193 of the
BIA
.

B.

Is Leave to Appeal Required under s. 193 of the
BIA
?

[9]

Section 193 of the
BIA
governs
    appeal rights. The relevant grounds for this motion are found in paragraphs (c)
    and (e)
:

193.   Unless otherwise expressly provided, an appeal lies to
    the Court of Appeal from any order or decision of a judge of the court in the
    following cases:

(c)     if the property involved in the appeal exceeds in
    value ten thousand dollars;

(e)     in any other case by leave of a judge of the Court
    of Appeal.

[10]

The
    applicants were at pains to characterize the appeal as one as of right under s.
    193(c), and not one for which leave is required under s. 193(e).  A decision on
    which of the paragraphs applies depends on a consideration of the facts.

(a)

The Factual Context

[11]

The
    factual context is fairly set out in the factum of the AGC:

1.       The Appellant, Douglas
    Menzies, represented Edwin Morton in complicated matrimonial proceedings that
    were eventually settled after one day of trial on terms which required the wife
    to pay to the husband amounts exceeding $250,000.00.

2.       Mr. Morton was unable to pay
    as a result of the financial constraints of the multiple proceedings initiated
    by the wife, including criminal charges, and the retainer agreement between
    Menzies and Morton provided that interest would be charged on the outstanding
    balance at 10% with the amounts paid from the proceeds of the matrimonial home.

3.       The house was eventually sold,
    but an Application for a Vesting Order was required to complete the sale
    because the Canada Revenue Agency (CRA) had filed a claim for lien as a result
    of the reassessment of Mr. Mortons taxes for 4 years. In addition, there were
    2 execution creditors, the Royal Bank of Canada (RBC) and Canadian Imperial
    Bank of Commerce (CIBC), claiming amounts totaling $67,000.00.

4.       The Appellant, Menziesbank,
    purchased the interests of the two execution creditors for fifty cents on the
    dollar. Rather than profit on this by talking an assignment of the full amount
    of the debt, it has claimed a salvage lien for the amount it actually paid out
    to discharge these claims, $30,000.00. [Footnotes omitted.]

(b)

The Application Judges Decision

[12]

After
    setting out the facts in detail, the motion judge found, at para. 62, that
    the entire value of the monies owing from Ms. Rivard to Mr. Morton,
    pursuant to the Campbell Divorce Judgment, were preserved by Douglas Menzies  [and]
    would not have come into existence but for the efforts of Douglas Menzies.
    He added, at para. 63, The Court finds that Douglas Menzies preserved Mr. Morton's
    interest in Ms. Rivard's one-half interest in the matrimonial home proceeds
[1]
.
    Accordingly, the application judge found it equitable to lift the
BIA
stay of proceeding in relation to the claim for a solicitors lien.

[13]

Despite
    these findings, the application judge declined to give effect to the lien by
    granting a charging order on equitable grounds. He noted, at para. 67, that
    equity would be offended by the granting of a solicitors lien/charging
    order. The application judge based this decision on his view, expressed at
    paras. 70-71, that the solicitor did not take advantage of his right to obtain
    a second mortgage under the divorce judgment that would have protected his
    interest. He concluded, at para. 74, Given the conduct of the solicitors and
    the potential prejudice to competing creditors, equity weighs heavily against
    the granting of a charging order in this case.

[14]

The
    application judge also refused on equitable grounds to lift the automatic stay
    of proceedings under s. 69 of the
BIA
in relation to Menziesbanks
    salvage claim, noting, at para. 38, that Menziesbank, is not likely to be
    materially prejudiced by the continued operation of s. 69(1) of the
BIA
and it is not equitable on other grounds to make such a declaration. He did not
    specify the equities on which he was relying.

(c)

The Legal Argument Concerning Appeal Rights under s.193 of the
BIA

[15]

There
    are two legal issues to be decided with respect to the appeal rights under s.
    193 of the
BIA
. The first is whether a solicitors lien and a charging
    order is a form of property for the purpose of s. 193(c) of the
BIA
. The
    second is whether this proposed appeal meets the test for leave, assuming that it
    must proceed under s. 193(e). I address each in turn.

(1)

Is a solicitors lien and a charging order is a form of property for the
    purpose of s. 193(c) of the
BIA

[16]

If
    a solicitors lien and a charging order is a form of property for the purpose
    of s. 193(c) of the
BIA
, then the applicants appeal should be as of
    right, since the amounts at issue exceed $10,000.

[17]

The
    decision of Henry J. in the bankruptcy case of
Re Tots and Teens Sault Ste.
    Marie et al
., 11 O.R. (2d) 103, [1975] O.J. No. 2549, is relevant. Justice
    Henry framed the issue, at para. 1, in terms that apply to this case: The simple
    issue in this application is whether a solicitor's lien for his costs in
    respect of his successful defence of litigation for his client, who is now
    bankrupt, constitutes a charge upon the fund recovered by him in the
    litigation, so as to give him the status of a secured creditor in the
    bankruptcy.

[18]

Justice
    Henrys analysis is set out at para. 26:

While fully accepting the principle here declared, I have
    reached the conclusion that the fund at the time it was created in the hands of
    the Sheriff was impressed with the inchoate right of the solicitor to apply to
    the Court and have a declaration that it is charged as security for his costs.
    This was an inherent right to invoke the equitable jurisdiction of the Court to
    exercise its discretion in his favour by way of declaring that the fund is
    charged as security for his claim. As I see it, the role of the Court is to
    declare, not to create, the security and even though the bankruptcy has
    occurred, it is in my opinion still open to the proper Court, in the exercise
    of its discretion, as I have said, to decide if the lien shall or shall not be
    recognized. If the Court makes such a declaration it has the effect, as I see
    it, of holding that the lien attached to the fund at the moment it was created.
    If it had been created prior to the bankruptcy, there would be no question that
    the fund would stand charged; the fund having been created after the bankruptcy
    may, in my opinion, in the same way be made the subject of a charge by way of
    security, unless of course the Court comes to the conclusion that it would
    offend the principles of equity, either by reason of the conduct of the
    solicitor or unfairness to the creditors, to refuse to exercise the discretion
    in the solicitor's favour. On the view that I take of the matter, the lien in
    law attached to the fund as an inchoate right, the crystallization of the lien
    requiring only the pronouncement of the Court to reveal it.

[19]

Justice
    Perell summarized the import of
Tots and Teen
s
in
Thomas Gold Pettingill LLP v.
    Ani-Wall Concrete Forming Inc
., 2012 ONSC 2182, [2012] O.J. No. 2109, at
    para. 101
:

[T]he three points to note from Justice Henry's decision in
Re
    Tots and Teens Sault Ste. Marie
about a charging lien made under the
    court's inherent jurisdiction are: first,
the charging lien creates the
    proprietary interest of a secured creditor
; second, subject to being
    declared, the charging lien is an inchoate interest that pre-dates the court's
    declaration; and third, the charging lien is intrinsically declaratory in
    nature. [Emphasis added.]

[20]

The
    respondent relies on
Ontario Wealth Management Corporation v. Sica Masonry
    and General Contracting Ltd
., 2014 ONCA 500, [2014] O.J. No. 3051 (Strathy
    J.A. (In Chambers)), which addressed the scope of s. 193(c), at para. 41,
    and added, at para 42:

The issue before the motion judge was simply a matter of which
    claim had priority. This is the daily fare of judges in bankruptcy proceedings.
    To provide an appeal as of right from such decisions would negate the court's
    gatekeeping function under s. 193(e) and would tie up bankruptcy proceedings in
    interlocutory appeals over routine issues.

[21]

In
    my view, the reasoning in
Ontario Wealth Management
does not apply on
    the facts of this case, which instead involves the assertion of a proprietary
    interest in the form of a solicitors lien and its appropriate valuation.

[22]

The
    same logic applies to Menziesbanks claim. I find that, consistent with
Tots
    and Teens
, it is more than arguable that s. 193(c) is the basis for the
    courts appeal jurisdiction; the appellants would not have required the courts
    leave if the appeal had been brought in time.

[23]

In
    any event, I would have granted leave to appeal under s. 193(e) of the
BIA
.

(2)

The proposed appeal meets the test for leave under s. 193(e) of the
BIA

[24]

The
    test for leave to appeal under s. 193(e) of the
BIA
was set by this
    court in
Canada (
Superintendent of Bankruptcy) v. 407 ETR Concession Co.
,
    2012 ONCA 569, [2012] O.J. No. 4089, at para. 47:

Generally speaking, the factors to be considered on an application
    for leave to appeal are:

a)

whether the point of
    appeal is of significance to the practice;

b)

whether the point
    raised is of significance to the action itself;

c)

whether the appeal is
prima
    facie
meritorious or, on the other hand, whether it is frivolous; and

d)

whether the appeal
    will unduly hinder the progress of the action.

This test is similar to Blair J.A.s formulation in
Business Development Bank of Canada v. Pine Tree Resorts Inc.,
2013 ONCA
    282, [2013] O.J. No. 1918, at para. 29.

[25]

I
    am satisfied that an appeal will not unduly hinder the progress of the
    bankruptcy/insolvency proceedings under para. (d).

[26]

The
    question is whether the appeal raises an issue or issues of general importance
    to the practice in bankruptcy/insolvency matters and to the action itself, and
    whether the appeal is
prima facie
meritorious.

[27]

In
    my view, there are two issues of law presented by the proposed appeal: Did the
    application judge make a palpable and overriding error in his apprehension and
    application of the relevant legal principles in deciding not to:

i.

grant a charging order against the estate in favour of Douglas G.
    Menzies and Menzies Lawyers Professional Corporation, having found the
    existence of valid solicitors lien?

ii.

grant a salvage lien to Menziesbank under s. 69 of the
BIA
?

[28]

I
    find that these are issues of broader application and therefore of general
    importance to the practice in bankruptcy/insolvency matters. There is a need
    for this court to consider afresh the principles referred to by Henry J. in
Tots
    and Teams
and the discretionary factors that would lead a court to deny a
    charging order. It would also be helpful to the practice to identify the
    circumstances in which a salvage lien is properly obtained and the
    discretionary factors that would lead a court to deny a salvage lien.

[29]

I
    find that the proposed appeal is not in any sense frivolous, and that it is of
    significance both to the parties and in respect of the proceeding.

[30]

With
    respect to the merits, in
Pinetree Resorts
, Blair J.A. noted, at para.
    23, that Ontario decisions have traditionally leaned toward the factors
    expressed by Goodman J.A. in
R. J. Nicol Construction Ltd. (Trustee of) v.
    Nicol
, [1995] O.J. NO,. 48 (C.A., In Chambers), at para. 6.  He thought
    that these factors ought to be considered in determining whether an appeal is
prima
    facie
meritorious, explaining at para. 31:

A proposed appeal in which the judgment or order under attack
    (a) appears to be contrary to law, (b) amounts to an abuse of judicial power,
    or (c) involves an obvious error causing prejudice for which there is no
    remedy, will be a proposed appeal that is
prima facie
meritorious.
    I recognize that the
Power Consolidated

prima facie
meritorious
    criterion is different than the arguable point notion referred to by Osborne
    J.A. in
Baker
and by Armstrong J.A. in
Fiber
    Connections
. In my view, however, the somewhat higher standard of a
prima
    facie
meritorious case on appeal is more in keeping with the
    incorporation of the
R.J. Nicol
factors into the test.

[31]

I
    do not, with respect, discern a meaningful difference between the
    interpretations to which Blair J.A. referred. In
Power Consolidated
(China)
    Pulp Inc. v. British Columbia Resources Investment Corp.
(1988), 19
    C.P.C. (3d) 396
, [1988] B.C.J. No. 1403, McLachlin J.A. held that the
    appeal was
prima facie
meritorious, on the basis that:  the appeal
    is not without merit in the sense that an argument can be made that the judge
    erred in the application of a legal test. In both
Baker (Re)
, 22 O.R.
    (3d) 376, [1995] O.J. No. 580, at para. 24, and
SVCM Capital Ltd. v. Fiber
    Connections Inc.
10 C.B.R. (5th) 201, [2005] O.J. No. 1845, at para. 20, Osborne J.A.
    and Armstrong J.A., respectively, simply stated that the
prima facie
meritorious criterion is met where there are arguable grounds of appeal. They
    were both uncomfortable with expressing a view that the appeal would succeed,
    despite the wording of the test.

[32]

Perhaps
    it would be better if the third step of the test  expressed most recently by a
    panel of this court in
407 ETR Concession Co
as whether the appeal is
prima facie
meritorious or, on the other hand, whether it is frivolous
     were revised, in the words of Osborne and Armstrong JJ.A., to provide: whether
    there are arguable grounds of appeal or, on the other hand, whether it is
    frivolous.

[33]

In
    my view, it would be helpful to the profession and the practice if there were
    more guidance given by this court on the interpretation of the phrase
prima
    facie
meritorious.

[34]

I
    turn now to apply the criterion of
prima facie
meritorious to this
    appeal, without expressing a view as to whether the appeal will succeed,
    according to the approach taken by Osborne and Armstrong JJ.A. It seems to me arguable
    that the application judge did not set out a principled basis for refusing to
    grant a charging order in favour of the solicitors, having found a valid
    solicitors lien. The solicitors were working with the bankrupt to assist him
    and decided not take a second mortgage securing their legal fees. It is not
    clear why this should prejudice them when, had they taken out the second
    mortgage, the amount of money represented thereby would not have fallen into
    the estate.

[35]

I
    take a similar view of his refusal to grant salvage lien to Menziesbank. The application
    judge simply asserted that he was applying the equities but he did not explain
    his thinking in any meaningful way.

[36]

It
    is therefore arguable that the application judge made that have prejudiced the
    appellants. For these reasons, I would find that the criterion of an appeal
    that is
prima facie
meritorious has been satisfied in this case.
    This finding is also sufficient to satisfy the remaining criterion of the
    merits of the proposed appeal for the purpose of determining whether to extend
    the time for leave to appeal under the rules.

C.

Disposition

For the reasons set out above, I extend the time for
    the applicants to file the notice of appeal to October 30, 2014 to validate its
    filing
nunc pro tunc
, and grant their application for leave to appeal
    under s. 193(e) of the
BIA
. Since the applicants are seeking an
    indulgence, it is reasonable to make a costs award in favour of the respondent,
    which I fix at $1,500.

P.
    Lauwers J.A.

[1]

The application judge declined, at paras. 64-65
    to provide similar recognition to the work of Menzies Lawyers Professional
    Corporation, but it is not clear whether that materially affects the claims.


COURT OF APPEAL FOR ONTARIO

CITATION: Proulx v.
    Canadian Cove Inc., 2015 ONCA 509

DATE: 20150706

DOCKET: C59701

Hoy A.C.J.O., Sharpe and Benotto JJ.A.

BETWEEN

François Proulx

Plaintiff (Respondent)

and

Canadian Cove Inc., Terry Smith, 2042098 Ontario
    Ltd. o/a Jim Earle Marine Group and
Jim Earle
,
James
    Parker Earle a.k.a. Jim Earle

Defendant (Appellant)

James Parker Earle a.k.a. Jim Earle, appearing in person

Pierre Champagne and Julie Paquette,
    for the plaintiff (respondent) François Proulx

Heard and released orally: June 26, 2015

On appeal from the order of Justice Carole J. Brown of
    the Superior Court of Justice, dated November 3, 2014.

ENDORSEMENT

[1]

The appellant did not appear in court this morning. The court contacted
    him by telephone to seek an explanation and requested that he be available in
    person or by telephone at 2:30 p.m. today.

[2]

We heard the appellant by telephone at 2:30 p.m.  He asserts that he
    phoned the court yesterday to confirm that his appeal was proceeding today.  He
    further asserts that a man working at the court advised him that his appeal was
    not proceeding.  Accordingly, the appellant did not appear and instead
    delivered a boat in Georgian Bay.

[3]

In the circumstances, the appellant asks that his appeal be withdrawn.
    All court records indicate clearly that the appeal was proceeding today.  We do
    not accept that the court advised the appellant that his appeal was not
    proceeding.  However, his request that his appeal be withdrawn is granted.

[4]

In any event, we have read the materials filed and the appellant would
    not have succeeded on the appeal on the issues that he raised.

[5]

The respondent shall be entitled to costs of the appeal in the amount of
    $13,000, inclusive of disbursements and HST.

Alexandra
    Hoy A.C.J.O.

Robert J. Sharpe
    J.A.

M.L. Benotto J.A.