COURT OF APPEAL FOR ONTARIO

CITATION: Ontario Ombudsman v. Hamilton (City), 2018 ONCA 502

DATE: 20180601

DOCKET: C64796

Doherty and LaForme JJ.A. and Himel J. (
ad
    hoc
)

BETWEEN

Ombudsman of Ontario

Appellant

and

City of Hamilton

Respondent

Robert A. Centa and Denise Cooney, for the appellant

Byrdena M. MacNeil, for the respondent

Heard: May 22, 2018

On appeal from the judgment of the Divisional Court
    (Matheson, Trimble and Sheard JJ.), dated August 28, 2017, reported at 2017
    ONSC 4865.

REASONS FOR DECISION

[1]

There are essentially two issues before the court on the appeal and the
    cross-appeal. On the appeal, the Ombudsman of Ontario (Ombudsman) argues that
    the Divisional Court erred in law in holding that neither the Election
    Compliance Audit Committee (Audit Committee), nor the Property Standards
    Committee (Standards Committee) was a local board within the meaning of s.
    14.1 of the
Ombudsman Act
, R.S.O. 1990, c. O.6.

[2]

The purposes of and the statutory provisions governing the Audit
    Committee and the Standards Committee are fully set out in the reasons of the
    Divisional Court. We need not repeat that exercise.

[3]

The City of Hamilton (the City) submits that the Divisional Court was
    correct in its interpretation of the phrase local board. Alternatively, on
    its cross-appeal, the City submits that even if the entities in question were
    local boards, the deliberation component of their proceedings did not
    constitute meetings within the meaning of s. 239(1) of the
Municipal Act,
    2001
, S.O. 2001, c. 25.

[4]

For the reasons that follow, we agree with the Divisional Courts
    conclusion that neither the Audit Committee nor the Standards Committee fall
    within the meaning of the phrase local board and, as such, the Ombudsman had
    no jurisdiction under s. 14.1 to investigate whether those entities had
    complied with s. 239 of the
Municipal Act
. In light of our conclusion
    on the main appeal, it is unnecessary to address the cross-appeal and we do not
    propose to do so.
[1]

the main appeal

[5]

Section 239(1) of the
Municipal Act
declares that all meetings
    shall be open to the public. There are exceptions to the requirement that the
    meetings be open to the public set out in the remainder of s. 239, but none of
    those exceptions are relevant here.

[6]

Section 239.1(b) of the
Municipal Act
provides that a person
    may request an investigation of whether a municipality or local board has
    complied with the public meeting requirement in s. 239. The Ombudsman, under s.
    239.1(b), may conduct that investigation. Section 14.1 of the
Ombudsman Act
dovetails with s. 239.1(b) of the
Municipal Act
by empowering the
    Ombudsman to investigate complaints made with respect to the failure to comply
    with the public meeting requirement of s. 239. The Ombudsman may investigate
    and report any conclusions and the reasons for those conclusions to the
    relevant municipality or local board. The Ombudsman may also make recommendations:
Ombudsman Act
, s. 14.1(7).

[7]

The Ombudsmans power to investigate for compliance with the open
    meeting requirement applies to municipalities or local boards:
Ombudsman
    Act
, s. 14.1(3). The operative definition of local board is found in s.
    1(1) of the
Municipal Act
:

Local board means a municipal service board, transportation
    commission, public library board, board of health, police services board,
    planning board, or any other board, commission, committee, body or local
    authority established or exercising any power under any Act with respect to the
    affairs or purposes of one or more municipalities, excluding a school board and
    a conservation authority.

[8]

Neither the Audit Committee nor the Standards Committee are among the
    entities specifically identified in the definition provided in s. 1(1). The
    Ombudsman argued, however, that both committees exercise power under
    legislation with respect to the affairs or purposes of one or more
    municipalities and are therefore local boards within the meaning of s. 1(1).

[9]

The Ombudsmans submission would have considerable force if the general
    language at the end of the definition of local board stood alone. It does
    not. That general language follows the identification of several specific
    entities as local boards. As this court recently observed in
Schnarr v.
    Blue Mountain Resorts Limited
, 2018 ONCA 313, at para. 52:

Where a class of things is modified by general wording that
    expands the class, the general wording is usually restricted to things of the
    same type as the listed items (
ejusdem generis
).

[10]

All
    of the named entities in the definition of local board provide services which
    are integral to the day-to-day operation of the business of municipalities.
    Neither the Audit Committee nor the Standards Committee provide the same kind
    of services.

[11]

The
    Audit Committee is an investigative/adjudicative body created to enforce
    provincially enacted laws relating to municipal election campaign funding. As
    observed by the Divisional Court, the Audit Committee was created to remove
    that oversight function from the municipality. The Audit Committee does not
    provide a municipal service in the same sense as the entities enumerated in the
    definition of local board.

[12]

The
    Standards Committee is an adjudicative body. Its purpose is to adjudicate
    disputes between the municipality and individuals dissatisfied with orders made
    by municipal officers concerning compliance with property standards bylaws. We
    agree with the Divisional Courts conclusion that the function of the Standards
    Committee is dramatically different than the function of the entities
    specifically identified in the definition of local board.

[13]

Applying
ejusdem generis
to the definition of local board, we are satisfied that the general
    language at the end of the definition does not include entities which cannot be
    said to carry on the operations of the municipality. The functions of the Audit
    Committee and the Standards Committee do not fall within that descriptor. They
    are not local boards. That, of course, does not mean that they are not subject
    to other legislation controlling the manner in which they are obligated to
    conduct their proceedings:  e.g. see
Statutory Powers Procedure
    Act
, R.S.O. 1990, c. S.22.

[14]

Consequently, we agree
    with the Divisional Court that the Ombudsman did not have jurisdiction under s.
    14.1 of the
Ombudsman Act
to investigate the alleged non-compliance by the Audit Committee or the
    Standards Committee with the open meeting requirement of s. 239 of the
Municipal
    Act
.

[15]

We would add, however,
    that we do agree with the Ombudsmans submission that the deliberative secrecy
    principle has nothing to do with the interpretation of the phrase local
    board in s. 1(1) of the
Municipal Act
. That principle would become relevant were this
    court to reach the merits of the cross-appeal.

the cross-appeal

[16]

In
    the cross-appeal, the City urges the court to draw a distinction between the
    deliberative component of the proceedings of the Audit Committee and the
    Standards Committee, and other aspects of their processes. Given the finding
    that neither is a local board, that distinction is unnecessary. We also note
    that on April 1, 2018, the
Municipal Elections Modernization Act
,
    2016, s. 65 came into force and repealed subsection 88.34 of the
Municipal
    Elections Act
. The new provision, which applies to the Audit Committee,
    reads:

Open Meetings

(9.1) The meetings of the Committee under subsection (9) shall
    be open to the public, but the Committee may deliberate in private. 2017, s.
    20, Schedule 10, (s. 2).

[17]

We
    need not further address the merits of the cross-appeal.

conclusion

[18]

The
    appeal is dismissed. The cross-appeal is dismissed as moot without considering
    the merits of the cross-appeal. The parties agree there should be no order as
    to costs.

Doherty J.A.

H.S. LaForme J.A.

Himel J. (
ad hoc
)

[1]

In the cross-appeal, the City also asked for a declaration
    that s. 14.1 did not apply to the deliberations of any of the Citys statutory
    adjudicative tribunals performing quasi-judicial functions. The Divisional
    Court declined to address the status of any tribunals other than the Audit
    Committee and the Standards Committee. We agree and also limit our reasons to
    those two committees.


COURT OF APPEAL FOR ONTARIO

CITATION: Pong Marketing and Promotions Inc. v. Ontario Media
    Development Corporation, 2018 ONCA 555

DATE: 20180615

DOCKET: C63780

Laskin, Miller and Paciocco JJ.A.

BETWEEN

Pong Marketing and Promotions Inc.

Applicant (Respondent)

and

Ontario Media Development Corporation

Respondent (Appellant)

Lisa La Horey and Farzin Yousefian for the appellant

Scott C. Hutchison and Kenneth Grad, for the respondent

Heard: Tuesday, December 19, 2017

On appeal from the order of the Divisional Court (Associate
    Chief Justice Frank N. Marrocco and Justice Ian V.B. Nordheimer, Justice
    Harriett E. Sachs dissenting), dated January 25, 2017, with reasons reported at
    2017 ONSC 434, allowing an application for judicial review of a decision of the
    Ontario Media Development Corporation dated December 11, 2015.

B.W. Miller J.A.:

A.

Overview

[1]

The Ontario Media Development Corporation (OMDC) is an agency of
    Ontarios Ministry of Tourism, Culture and Sport. Its purpose is to promote
    innovation, investment and employment in the cultural media industry in Ontario.
    Further to that objective, it jointly administers, alongside the Canada Revenue
    Agency, the Ontario Interactive Digital Media Tax Credit (DMTC), a tax credit
    provided to developers for digital products whose primary purpose is to
    educate, inform or entertain the user.

[2]

Pong Marketing and Promotions Inc. applied to the OMDC for a Certificate
    of Eligibility for a DMTC of approximately $2 million for its development of 15
    digital sweepstakes games, which it licenced to third party retailers. The OMDC
    denied Pongs application on the basis that the games were not developed for
    the primary purpose of educating, informing, or entertaining the user, but rather
    were developed for promoting the sale of long-distance phone cards and related
    products and services.

[3]

Pongs application for judicial review was successful. A majority of the
    Divisional Court agreed that the OMDCs decision was inconsistent with the
    plain meaning of the regulation governing eligibility for the DMTC, and was
    therefore unreasonable. It remitted the matter back to the OMDC for
    reconsideration.

[4]

The OMDC appealed to this court. For the reasons that follow, I would
    allow the appeal and restore the original decision of the OMDC.

B.

Legislative scheme and decision of the OMDC

[5]

The OMDC is a Crown agency, and its objects are to stimulate employment
    and investment in Ontario by supporting the cultural media industry, defined
    in s. 1 of
Ontario Media Development Corporation,
O. Reg 672/00 (the
    OMDC Regulation), as an industry whose main business includes,
inter alia
:

the development, production, distribution, marketing, sale or
    exhibition of audio-visual products with
substantive cultural content
including
    film and television productions, sound recording products, and
interactive digital
    media products.
[Emphasis added.]

[6]

One of the ways in which the OMDC is to support the cultural media
    industry, per s. 4(e) of the OMDC Regulation, is by administering provincial
    tax credits such as the DMTC. The nature of the DMTC is summarized in the majority
    reasons of the Divisional Court, at para. 8:

The Ontario Interactive Digital Media Tax Credit (DMTC) is a
    refundable tax credit, introduced in Ontario in 1998 and available to
    qualifying corporations for qualifying expenditures related to the creation,
    marketing and distribution of eligible interactive digital media products. The
    amount of the tax credit is based on a percentage of development labour
    expenditures and certain marketing and distribution costs incurred by a
    corporation that has developed an interactive digital media product for sale or
    license. The DMTC is not a grant. Qualifying corporations receive a payment in
    the amount of the tax credit after they have developed the interactive digital
    media product.

[7]

Eligible interactive digital media products are defined under a
    different regulation,
General,
O. Reg. 37/09, under the
Taxation
    Act
,

2007, S.O. 2007, c. 11, Sched. A (the Regulation). This
    appeal largely turns on the interpretation of that definition, set out under s.
    34(1) of the Regulation, which at the time of Pongs application read as
    follows:
[1]

34 (1) In this section,

interactive digital media product means a
    combination of one or more application files and one or more data files, all in
    a digital format, that are integrated and are
intended to be
    operated together
and that
have the following characteristics when they are
    being operated:

1.
Their primary purpose is to educate, inform or
    entertain the user.

2. They achieve their primary purpose by presenting
    information in at least two of the following forms:

i. text,

ii. sound,

iii. images.

3. They are intended to be used by individuals.

4. By interacting with them, the user can choose what
    information is to be presented and the form and sequence in which it is to be
    presented. [Emphasis added.]

[8]

The dispute over the eligibility of Pongs products centred on whether
    the products had the requisite characteristics when operated: specifically,
    that their primary purpose is to educate, inform or entertain the user. The other
    criteria from s. 34(1) were not in dispute.

[9]

Although Pong licences a range of products throughout North America, the
    application to the OMDC relates to a particular suite of 15 products licenced to
    clients in Ontario. Pong characterizes these products as sweepstakes games.
    For the most part, they function as games of chance, like video slot machines.
    Some also incorporate a modest skill component, such as stopping an arrow
    indicator in the middle of a horizontal bar.

[10]

Pongs
    business model with respect to these products is to generate revenue by
    licensing them to third party retailers (including owners of cafés, bars, and
    restaurants), which use the games to promote sales of pre-paid long distance phone
    cards. Purchasers of the phone cards  or of additional calling time on
    existing cards  obtain points that can be used to play the games. Playing the
    games can generate additional sweepstake win points. And the win points can
    be redeemed for additional phone card credit. Pursuant to its licencing agreements
    with the retailers, Pong is paid a percentage from the sales of phone cards. Pong
    markets the products to retailers as a means for them to differentiate their phone
    card products from those of their competitors.

[11]

In
    April, 2014 Pong applied for a Certificate of Eligibility for the DMTC from the
    OMDC. The application was provisionally denied on July 29, 2015, on the basis
    that the OMDC determined that the primary purpose of the games was to promote
    the sale of phone cards, and not to educate, inform, or entertain the user. Prior
    to issuing a formal Letter of Ineligibility, the OMDC invited Pong to file
    further documentation to support its claim that the primary purpose of the
    products was to entertain. Pong did so through submissions dated September 8,
    2015 and September 24, 2015. On October 23, 2015, the OMDC advised that, having
    reviewed the supplementary submissions, it would not be changing its initial
    assessment. It provided Pong with a final opportunity to provide additional documentation
    to support its claim. It received further written arguments from Pongs counsel
    on November 3, 2015.

[12]

The
    OMDC re-reviewed the application, but again its decision remained unchanged. In
    a letter dated November 30, 2015 it reiterated its initial conclusion: the primary
    purpose of the products was promotional as the games are sweepstakes promotions
    for long distance phone cards, and as such are not eligible for support under [the
    DMTC]. The letter explained the OMDCs methodology in coming to this decision,
    as it had set out in earlier correspondence with the respondent: OMDC looks at
    why and how a product was developed as a key factor in determining the
    products primary purpose, what audience or target market was it developed for,
    and who was the product marketed to, by reviewing all of the products
    development and marketing documentation.

[13]

In
    support of its conclusion that the primary purpose of the products was
    promotional, the OMDC quoted extensively from Pongs website and from promotional
    literature and licencing agreements supplied by Pong. These marketed the games
    to prospective licensees as a means to promote phone card sales. For example, Pongs
    template licencing agreement defines the sweepstakes games as [a] means of
    promotion to aid in the sale of long distance calling cards and other related
    products and services. The Pong website positioned Pong as being in the
    business of delivering a promotional sweepstakes system to enhance the sale of
    its pre-paid long distance phone time. Its stated rationale for the
    sweepstakes games was, at the relevant time, to create consumer involvement
    with a brand or product and thus encourage consumer consumption of the
    product.

[14]

The
    OMDC issued a formal Letter of Ineligibility on December 11, 2015, which stated
    that [b]ased on our review of the documentation and copies of the Products
    submitted, we find the primary purpose of the Products is to promote the sale
    of phonecards and other related products and services.

[15]

Pong
    brought an application for judicial review.

[16]

The
    majority of the Divisional Court allowed the application, concluding that the
    decision of the OMDC was inconsistent with the plain meaning of the wording of
    the [Regulation] and was therefore unreasonable. The majority held that the
    OMDCs interpretation was unreasonable because it wrongly equated Pongs
motivation
for developing the products with the products purpose, instead of the
    players purpose in playing the games. It also noted that, in the alternative,
    if the OMDCs interpretation
was
reasonable it would have nonetheless applied
    a residual presumption in favour of the interpretation of the taxpayer, Pong. It
    remitted the matter back to the OMDC for reconsideration. Sachs J. dissented,
    arguing that the OMDCs decision was based on a reasonable interpretation of
    the Regulation and that the application for judicial review should be dismissed.

C.

Issues

[17]

There
    are two main issues raised in this appeal.

1. Did the majority of the Divisional Court err in its
    interpretation of s. 34(1) of the Regulation  specifically, in failing to adequately
    defer to the OMDCs interpretation?

2. Did the majority of the Division Court err in finding in the
    alternative that the residual presumption in favour of taxpayers would apply and
    work in favour of the interpretation advanced by the respondent?

D.

Analysis

(1)

Standard of review to be applied by the Divisional Court

[18]

The
    Divisional Court correctly identified the reasonableness standard as the
    appropriate standard of review to be applied to its review of the OMDC
    decision. The question of whether the primary purpose of the products is to
    educate, inform or entertain concerns the OMDCs interpretation of its home
    legislation. It is at the core of the OMDCs function, and falls within its
    specialized expertise:
Venngo Inc. v. Ontario Media Development Corp.
,
    2013 ONSC 1036 (Div. Ct.), at para. 1.

[19]

On
    review, the reasonableness standard entails that a decision can only be judged
    to be unreasonable if there is no line of analysis within the given reasons
    that could reasonably lead the [decision-maker] from the evidence before it to
    the conclusion at which it arrived:
Ryan v. Law Society (New Brunswick)
,
    2003 SCC 20, [2003] 1 S.C.R. 247, at para. 55. Reasonableness review requires
    the reviewing court to assess the reasons for the OMDCs decision and
    substantive decision together, to see whether an acceptable and defensible
    outcome has been reached. Reasonableness review is conducted in the knowledge
    that decision-making authority belongs to the OMDC. The courts role is limited
    to ensuring that the decision the OMDC makes is within the range of possible,
    acceptable decisions it was entitled to make:
Dunsmuir v. New Brunswick,
2008
    SCC 9, [2008] 1 S.C.R. 190, at para. 47. As this court has said in the context
    of assessing
reasonableness under the Ontario Review
    Board scheme, a reviewing
court is not to make its own judgment on the question before the decision
    maker, and then use

that judgment as the benchmark for
    assessing the reasonableness of the tribunals decision:
Carrick
    (Re),
2015 ONCA 866, 128 O.R.
    (3d) 209, at para. 26.

[20]

Administrative
    law recognizes that an administrative decision-maker will often be confronted
    with multiple possible solutions or choices, all of which will be consistent
    with the applicable law that guides and limits the exercise of discretion.
    These types of choices are legally underdetermined, in that the law does not
    identify a single alternative. The ultimate choice, from among the permissible
    alternatives, rests with the decision-maker.

[21]

That
    said, not every question of law faced by administrative decision-makers, even
    those questions to be reviewed on a reasonableness standard, will admit of
    multiple permissible options; sometimes only one answer will be reasonable. This
    is particularly the case with comparatively technical questions of statutory
    interpretation. As the Supreme Court explained in
McLean v. British
    Columbia (Securities Commission)
, 2013 SCC 67, [2013] 3 S.C.R. 895 at
    para. 38:

It will not always be the case that a particular provision
    permits multiple reasonable interpretations. Where the ordinary tools of
    statutory interpretation lead to a single reasonable interpretation and the
    administrative decision maker adopts a different interpretation, its
    interpretation will necessarily be unreasonable  no degree of deference can
    justify its acceptance; see, e.g.,
Dunsmuir
, at para. 75;
Mowat
,
    at para. 34. In those cases, the range of reasonable outcomes (
Canada
    (Citizenship and Immigration) v. Khosa
,

2009 SCC 12, [2009] 1
    S.C.R. 339, at para. 4) will necessarily be limited to a single reasonable
    interpretation  and the administrative decision maker must adopt it.

[22]

The
    presence of vague language in legislation often creates room for multiple
    reasonable interpretations. Sometimes statutes employ vague terms or standards
    with the intention that the meaning be fleshed out on a case-by-case basis by a
    specialized decision maker that has been given the authority to choose an
    interpretation that, in its discretion, best furthers its statutory mandate. As
McLean
directs, at para. 40, where the legislature charges an
    administrative decision maker with administering and applying its home statute it
    is the decision maker, first and foremost, that has the discretion to resolve [any
    indeterminacy] by adopting any interpretation that the statutory language can
    reasonably bear. Judicial deference in such instances is itself a
    principle of modern statutory interpretation.

[23]

It
    is important to emphasize the consequences of this approach. As the Supreme Court
    explained in
McLean
, at para. 40, under reasonableness review, we
    defer to
any
reasonable interpretation adopted by an
    administrative decision maker,
even if
other reasonable
    interpretations may exist (emphasis in original). It is not enough for a party
    seeking judicial review of a decision to establish that a competing
    interpretation is reasonable; the applicants burden is to establish that the
    interpretation adopted by the administrative decision maker is unreasonable:
McLean
,
    at para. 41.

(2)

The OMDCs interpretation of s. 34(1)

[24]

Did
    the majority of the Divisional Court err, as the OMDC contends on appeal, in
    its application of the reasonableness standard, by concluding that the only
    reasonable interpretation available was the one it identified? In my view it
    did.

[25]

This
    court owes no deference to a decision of the Divisional Court on judicial
    review:
Law Society of Upper Canada v. Abbott,
2017 ONCA 525, 414
    D.L.R. (4th) 545. On appeal, this court effectively steps into the shoes of the
    Divisional Court to determine whether the court identified the appropriate
    standard of review and applied it properly:
Ottawa Police Services v.
    Diafwila,
2016 ONCA 627, 352 O.A.C. 310, at para. 50.

[26]

For
    the OMDC to succeed on this appeal, it does not need to establish that the
    majoritys interpretation is unreasonable. Neither does it need to establish
    that the majoritys interpretation is less compelling than its own. It merely
    needs to demonstrate that its own interpretation, and its own decision, were
    reasonable.

[27]

The
    majority held that the OMDCs interpretation of s. 34 of the Regulation was not
    consistent with the text and was therefore unreasonable. The source of the
    error, the majority held, was that the OMDC considered Pongs reasons (or
    motivation) for developing the games as the requisite primary purpose,
    rather than the purpose of the users when playing the games. The majority drew
    a distinction between the purpose of the digital files themselves, which it
    said must be assessed from the perspective of the user (that is, the reason
    that the user sits down to play the games), and the purpose of the developer in
    creating the digital files, which might be a matter of selling phone cards or otherwise
    generating revenue.

[28]

The
    majority argued that the priority of the users intention in playing the games
    was compelled by the text of s. 34. It understood the phrase while they are
    being operated as requiring the purpose of the files to be assessed when the
    user is playing it; not the moment when it is created or licensed. From this
    premise, the majority concluded that [t]he definition requires the [OMDC] to
    look at the primary purpose of the game from the perspective of the player.

[29]

The
    majority concluded that Pongs marketing material and licence agreement
    templates did not shed any light on the users purpose in playing the games, but
    only evidenced Pongs motivation for developing the products. The OMDC therefore
    erred in considering these materials.

[30]

The
    majority accordingly found the OMDCs decision to be inconsistent with the
    plain meaning of the wording of the [Regulation], which required primary
    purpose to be assessed as the purpose of a person playing the games. This
    plain meaning, according to the majority, directed a particular answer: the
    purpose of a person playing the games was to be entertained, therefore the
    purpose of the games was to entertain. In support of this conclusion, it
    further held that because the legislature intended to use the tax credit to
    assist high-technology, knowledge-based industries, the OMDCs focus on the
    purpose of the developer in creating the games undermines legislative intent.

[31]

In
    dissent, Sachs J. argued that the OMDCs decision was based on a reasonable
    interpretation of the Regulation. It was reasonable, in her view, for the OMDC
    to have regard to what the intended purpose of the product was when it was
    being developed. After all, it is the products primary purpose that governs
    the analysis and it is reasonable to assume that a successfully developed
    product, when it is being operated, will fulfill the primary purpose for which
    it was developed. As the OMDCs task was to determine the primary purpose of
    the product, it was entitled to deference in its determination that the
    primary purpose of the products while being operated was to encourage users to
    buy phone cards, not to entertain.

[32]

I
    agree, substantially for the reasons given by Sachs J., that the majority erred
    and the OMDCs interpretation of the Regulation was reasonable. In my view, the
    majority erred in finding that the text of s. 34(1) mandated the result it
    reached, to the exclusion of any other.

[33]

The
    OMDC took the position, in common with Pong, that the primary purpose with
    which the Regulation is concerned is the primary purpose of the products
    themselves. The dispute is therefore over whether that purpose is better
    understood by reference to the designers intention for the products, or by the
    users intention in using them.

[34]

An
    interactive digital media product is defined in the Regulation by reference to both
    its attributes (a combination of one or more application files and one or more
    data files, all in a digital format, that are integrated and
are intended
    to be operated together
 (emphasis added)) and its functions (and that have
    the following characteristics when they are being operated:[t]heir primary
    purpose is to educate, inform or entertain the user).

[35]

To
    satisfy the definition of interactive digital media product, the Regulation
    requires that the digital files be of the sort that are integrated and are
intended
to be operated together (emphasis added). To whose intention could this refer?
    Not the users. The user knows nothing of data files and application files and
    whether or how they are to be combined and to what purpose. The user would have
    no reason to have any thoughts about the matter whatsoever. It is the developer
    that intends that the files will be combined and operated together. So when the
    text carries on, in the very next clause, to address the characteristics of the
    files that are manifest when [the files] are being operated, it is not an
    irresistible conclusion that the perspective should suddenly shift in
    mid-sentence  as the majority would have it  from the perspective of the
    developer to the perspective of the user. The majoritys reasoning that the
    phrase when [the files] are being operated can only mean that the relevant purpose
    is the users purpose is thus, at the least, questionable.

[36]

As
    the OMDC points out, all the Regulation directs is that the OMDC ascertain the
    primary purpose of a product by determining what functions the digital files
    perform
when they are being operated
. Nothing in this text directs
    that the users purposes in playing the games must take priority over any other
    purpose the products serve.

[37]

In
    assessing what it is the digital files do when they are being operated, the
    OMDC considered the documentation that it received from the respondent,
    including promotional materials and licencing agreements. These provided some
    evidence of the purposes of the digital files by providing evidence of what the
    developer intended for them to do, and how they were to do it, when they were
    being operated. As these materials clearly stated, the games were marketed to retailers
    not for the purpose of entertaining users as an end in itself, but to be used,
    when operated, as a means to a further, more ultimate end of inducing users to
    purchase phone cards from the retailers.

[38]

Additionally,
    as part of its review, the OMDC viewed videos of the games in operation. It was
    not able to conclude from watching the games in operation that their purpose
    was to entertain, as that term was used in the context of a tax credit operated
    as part of a regulatory scheme intended to promote products with substantive
    cultural content.

[39]

As
    Sachs J. noted, the OMDC
s role is not only to determine the meaning
    and application of relatively open-ended criteria such as educate, inform, and
    entertain, but also to determine which of a products potentially several
    purposes are
primary
. These are all
    qualitative assessments. They fall within the expertise of the
OMDC, and
    are to be afforded deference.

[40]

As
    stated above, to succeed on this appeal the OMDC does not need to establish
    that its interpretation of the Regulation is more plausible than the one
    identified by the majority. All it needs to do is establish that its
    interpretation was reasonable, and that its decision flowed from the evidence
    before it. It has done that, in my view. The majority of the Divisional Court
    erred in overturning the OMDCs decision and allowing Pongs application for
    judicial review.

(3)

The residual presumption

[41]

In
    the alternative, the majority held that even if it was wrong, and the Regulation
    was capable of more than one interpretation, it would have relied on an
    interpretive presumption that where there is more than one interpretation of a
    taxation statute that is reasonably available, the decision maker is required
    to adopt the interpretation most favourable to the taxpayer: see
Québec
    (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours
, [1994] 3 S.C.R. 3,
    at pp. 14-16;
Placer Dome Canada Ltd. v. Ontario (Minister of Finance),
2005
    SCC 20; [2006] 1 S.C.R. 715.

[42]

The
    OMDC, echoing the dissent of Sachs J., argues that this alternative argument is
    in error. It argues this approach cannot account for the deference that is to
    be accorded to the decisions of administrative decision makers. It argues that
    a rule that legislative indeterminacy must always be resolved by choosing the interpretation
    advanced by the taxpayer would be inconsistent with the core function of administrative
    decision makers of interpreting their home statutes in a manner that advances
    statutory objectives.

[43]

I
    agree with the OMDCs argument. To explain why, however, requires a brief account
    of different types of indeterminacy in legislative language, and how the
    presumption identified by the majority interacts differently with each.

Forms of
    indeterminacy

[44]

Legislation
    is indeterminate (or more precisely, underdeterminate) to the extent that its
    meaning and application are not clear. It is a very common phenomenon: In all
    fields of experience, not only that of rules, there is a limit, inherent in the
    nature of language, to the guidance which general language can provide.: H.L.A.
    Hart,
The Concept of Law
, 2nd ed. (Oxford: Oxford University Press, 1994)
    at p. 126. The most common forms of indeterminacy are ambiguity, vagueness, and
    generality, although lawyers and judges commonly refer to any instance of
    indeterminacy as ambiguity: Stéphane Beaulac,
Handbook on Statutory
    Interpretation: General Methodology, Canadian Charter and International Law,
(Markham:
    LexisNexis Canada Inc., 2008), at

pp. 24-26. This assimilation of all
    indeterminacy to ambiguity is often harmless, but in some cases can be an
    impediment to sound legal reasoning. This appeal is one such case.

[45]

Ambiguity
    can result from the use of words that have more than one meaning, or from
    unclear sentence structure. Where a word or a sentence is ambiguous, it unintentionally
    gives rise to (usually) two rival interpretations. For example, a requirement
    that a form be filed by 5:00 may mean 5 a.m. or 5 p.m. The interpretive problem
    is to ascertain, if possible, which of the two meanings is the one actually
    intended by the legislature. It is an either-or choice between two different
    pre-established alternatives. Ambiguity in this strict sense is resolved either
    by context (in easy cases) or by resort to principles of statutory
    interpretation: see Ralf Poscher, Ambiguity and Vagueness in Legal
    Interpretation in L.M. Solan and P.M. Tiersma, eds.,
Oxford Handbook of
    Language and Law
(Oxford: Oxford University Press, 2012), at pp. 129-133; Lawrence
    Solum, Vagueness and Ambiguity,
Legal Theory Lexicon
(28 June 2015) online:
    <http://lsolum.typepad.com/legaltheory/2015/06/legal-theory-lexicon-vagueness-ambiguity.html>.
    Where it is still not possible to say with any confidence which meaning is the
    one intended, it makes sense to have a residual rule of statutory
    interpretation, such as the presumption at issue here, to resolve the ambiguity
    where other means are exhausted.

[46]

Ambiguity
    in the strict sense  with a stark choice between given interpretations  is comparatively
    rare in legislative drafting. Although courts are often presented by the
    parties with a stark choice between rival interpretations, the cause of the
    disagreement between them is not necessarily ambiguity. The interpretive
    disagreement could stem from another cause, such as vagueness.

[47]

Vagueness
    is a much more common type of legislative indeterminacy. A vague concept may
    have a settled core of meaning, but also admits borderline cases that may be
    difficult to classify. The difficulty with vague concepts is in deciding
    whether some apparent instance at the margins is inside or outside of the
    concept. The classic example: does the rule no vehicles in the park prohibit
    ambulances? An ambulance is a vehicle in the ordinary sense, but it might not
    be a vehicle in the sense given by this particular legal rule: H.L.A. Hart, Positivism
    and the Separation of Law and Morals (1958) 71 Harvard L. Rev. 593 at pp. 606-15
    (1958); see also Fred Schauer, A Critical Guide to Vehicles in the Park (2008)
    83 N.Y.U. L. Rev. 1109. A decision maker given statutory authority to determine
    the meaning of vehicle on a case-by-case basis is tasked with taking the given
    rule and making it more specific and concrete.

Administrative law and vagueness

[48]

Concretizing
    vague criteria is a creative yet bounded role. It is different in kind from the
    task of resolving legislative ambiguity, which is presents a closed choice
    between given alternatives. A decision maker that is required to interpret the
    vague criteria of a statute is required to make a decision that renders the
    statute more specific. The decision maker is constrained by the text of the
    statute and by the requirement that the interpretation further the objectives
    of the statute and be consistent with the rest of the law as a whole. In
    administrative law, legislation is often deliberately worded vaguely, the
    intention being that vaguely worded standards will be made more concrete by the
    decisions of specialized administrative actors, who are best placed to develop
    the relevant policies. These interpretive decisions will sometimes be of a
    nature that different decisions could reasonably have been made  decisions equally
    consistent with the guidance and constraints provided by existing law.

[49]

It
    is readily apparent that the residual presumption employed by the majority of
    the Divisional Court fits more easily with resolution of ambiguity than with
    specifications of vague criteria, particularly in the context of the
    policy-advancing function of an administrative body like the OMDC. Where an
    ambiguity cannot be resolved, it cannot be determined what the legislature
    intended. But where there is generality and vagueness in the context of an
    administrative scheme, the intention is for the decision maker to supply a
    specification.

[50]

In
    this latter circumstance, there will often be no uniquely right answer to a
    question: only determinations, chosen from among equally acceptable
    alternatives, which could conceivably have been made differently. Where these
    determinations are reasonable, courts are not permitted to intervene.

[51]

In
    this case, the Regulation requires the OMDC to determine a products primary purpose
    as well as whether that purpose is to educate, inform or entertain the user. As
    discussed above, these criteria require evaluations of what is primary, and
    specifications of what it means to educate, inform or entertain.

[52]

Were
    the residual presumption to be applied in the manner suggested by Pong, it would
    eliminate much of the authority conveyed on the OMDC by statute. This would undermine
    the statutory scheme and be inconsistent with the rationale for and nature of a
    reasonableness standard of review. The majority of the Divisional Court accordingly
    erred in its conclusion that this presumption applied to support the
    interpretation advanced by Pong.

E.

DISPOSITION

[53]

I
    would allow the appeal and reinstate the decision of the OMDC. I would award
    costs of the appeal to the OMDC in the agreed upon amount of $10,000, inclusive
    of taxes and disbursements. I would also reverse the costs award from the
    Divisional Court.

B.W. Miller J.A.

Laskin J.A. (Concurring):

[54]

Pong
    Marketing and Promotions Inc. applied to Ontario Media Development Corporation
    (OMDC) for a tax credit for its 15 digital sweepstakes games under s. 34 of
    O. Reg. 37/09
.
Section 34
    allows corporations to claim a tax credit for eligible products, which are
    defined by subsection (1) as those with a primary purpose that serves to educate,
    inform, or entertain the user. Eligibility for the tax credit is determined by
    OMDC.

[55]

OMDC
    reviewed the material Pong had submitted concerning its games, and applied the
    Regulation to it. OMDC told Pong that it was of the preliminary view that the
    games did not qualify for the tax credit, but it
offered Pong the
    opportunity to file further materials and submissions.
Pong did so.
    After considering these additional materials and submissions, OMDC denied the
    tax credit. It held that the primary purpose of the games was to promote the
    sale of long distance calling cards, not to educate, inform, or entertain
    users.

[56]

Pong
    applied for judicial review to the Divisional Court. Everyone agrees that
    OMDCs decision is reviewable on a standard of reasonableness. The narrow
    debate in the Divisional Court was over the interpretation of the Regulation:
    specifically whether the primary purpose of the games should be assessed by
    looking at Pongs purpose or motivation in developing the games, or by looking
    at the users or players purpose in playing the games.

[57]

OMDC
    had decided that the primary purpose had to be looked at from Pongs
    perspective. The majority of the Divisional Court disagreed and held that
    OMDCs decision was unreasonable because, in the majoritys view, the primary
    purpose of the games had to be assessed from the players perspective. The
    majority remitted the matter to the OMDC to determine whether, from the
    players perspective and not Pongs, the primary purpose of Pongs products is
    to entertain the user. Justice Sachs dissented, holding that OMDCs decision to
    look at Pongs purpose in developing its products was reasonable.

[58]

The
    majority of the Divisional Court also considered Pongs submission that, where
    more than one interpretation of a taxation provision is available, a residual
    presumption dictates that the interpretation most favourable to the tax payer
    should be adopted. The majority found it unnecessary to resort to this residual
    presumption because OMDCs interpretation was not reasonable. However, the
    majority added that, if it was wrong and, in fact, there were two reasonable
    interpretations of the Regulation  theirs and OMDCs  then the residual
    presumption would apply to give Pong the tax credit it sought. Again, Sachs J.
    dissented. She noted, correctly, that a residual presumption in favour of the
    tax payer has only a limited role in interpreting tax legislation. In this case
    she held that the presumption did not apply.

[59]

My
    colleague, Miller J.A., has written reasons, which I have had an opportunity to
    read, in which he would overturn the decision of the Divisional Court and
    restore the decision of OMDC. On the main issue he concludes that OMDCs
    decision was reasonable. On the secondary issue he concludes that even if there
    is more than one reasonable interpretation of s. 34(1), the residual presumption
    in favour of the tax payer does not apply.

[60]

I
    agree with my colleagues conclusions on both issues. I also entirely agree
    with his excellent analysis of the first and main issue, the reasonableness of
    OMDCs decision. But, though I agree with my colleagues conclusion on the
    secondary issue of the presumption, I do not agree with the way he has arrived
    at his conclusion.

[61]

To
    reach his conclusion that the presumption does not apply, my colleague, on his
    own initiative, has embarked on an entirely new analysis of the inapplicability
    of the presumption. His analysis focuses on the topic of legislative
    indeterminacy, draws a distinction between legislation that is ambiguous and
    legislation that is vague, and relies on six authorities, which are all either texts
    or scholarly articles.

[62]

Justice
    Millers analysis of legislative indeterminacy and the distinction he draws
    between ambiguity and vagueness were not relied on by the Divisional Court, and
    were not referred to by either party before this court or the Divisional Court.
    None of the six authorities my colleague relies on were cited in the Divisional
    Courts reasons or by the parties to this appeal. Neither party has been given
    an opportunity to address my colleagues analysis of legislative indeterminacy,
    to consider the authorities he relies, or to put forward their own authorities
    in response. Speaking for myself, without full argument on the issue, I am
    unable to decide whether I agree or disagree with my colleagues analysis.

[63]

More
    important, respectfully, in my view, my colleague is wrong to embark on this
    new analysis. Doing so is both unfair and unnecessary.

[64]

It
    is unfair to these parties, especially the losing party, Pong, to decide the
    issue of the inapplicability of the residual presumption on an analysis that
    they have not relied on, have not seen before, and have not had an opportunity
    to make submissions on. Under our adversarial system, we rely on the parties to
    a dispute to frame the issues and their analysis of those issues. When a judge
    goes beyond the issues and analyses framed by the parties, without giving those
    parties an opportunity to meet the judges analysis, the adversarial process is
    subverted. A judge may, in a rare case, be entitled to do so, but only if
    interests of justice require it. This is not one of those rare cases.

[65]

The
    inapplicability of the residual presumption can be dealt with quite simply on
    either of two bases. One basis is that there is only one reasonable
    interpretation of primary purpose under the Regulation: it must be considered
    from the perspective of the purpose of the products developer. That was the
    perspective OMDC adopted.

[66]

I
    incline to the view that OMDCs interpretation is the only reasonable
    interpretation. Indeed my colleagues reasons at paras. 35 and 36 strongly
    suggest that the majority of the Divisional Courts alternative interpretation
    is unreasonable. Neither my colleague nor the parties have suggested any other
    interpretation that might be reasonable. Of course, if the OMDCs
    interpretation is the only reasonable interpretation, then the residual
    presumption unquestionably cannot apply: see
McLean v. British Columbia
    (Securities Commission)
, 2013 SCC 67, [2013] 3 S.C.R. 895, at para. 38.

[67]

The
    other basis on which I would still find the residual presumption inapplicable
    is on the assumption that the Regulation gives rise to two reasonable
    interpretations: the majority of the Divisional Courts interpretation and
    OMDCs interpretation. Even on that assumption, the residual presumption cannot
    apply. To apply it would be incompatible with reasonableness review.

[68]

In
    the two Supreme Court of Canada cases referred to by counsel, the residual
    presumption in favour of the tax payer is said to apply in the exceptional
    case where application of the ordinary principles of interpretation does not
    resolve the issue:
Québec (Communauté urbaine) v. Corp. Notre‑Dame
    de Bon‑Secours
, [1994] 3 S.C.R. 3, at p. 19; and
Placer Dome
    Canada Ltd. v. Ontario (Minister of Finance),
2006 SCC 20, [2006] 1 S.C.R.
    715, at para. 24. In both cases, courts were interpreting taxation statutes. In
    neither case was the Supreme Court looking at the interpretation of a statute
    by an administrative decision maker, which is reviewable on a deferential
    standard of reasonableness.

[69]

It
    seems to me that if reasonableness review applies, as it does here, and if a
    reviewing court concludes that the administrative decision makers
    interpretation is reasonable, as Miller J.A. does, that is the end of the
    matter. It is not for the reviewing court to look around to see if another
    reasonable interpretation more favourable to the tax payer exists, and then
    apply that other reasonable interpretation. To do so would entirely defeat the
    principles and objectives of reasonableness review.

[70]

OMDCs
    decision denying Pong a tax credit was reasonable. The residual presumption in
    favor of a tax payer in taxation statutes does not apply. Like Miller J.A., I
    would allow OMDCs appeal and reinstate its decision with the costs that he has
    prescribed.

John Laskin J.A.

Paciocco J.A. (Concurring):

[71]

I
    have read the reasons provided by both of my colleagues, Laskin and Miller
    JJ.A. I accept their recitals of the material facts.

[72]

I,
    too, agree with Miller J.A.s reasons with respect to the reasonableness of the
    Ontario Media Development Corporations (OMDC) interpretation of s. 34 of O.
    Reg. 37/09. The Divisional Court was wrong to find otherwise.

[73]

I
    also agree with my colleagues that the Divisional Court erred in relying on the
    residual presumption in favour of the tax payer. I agree with Laskin J.A., that
    where a reviewing court concludes that the administrative decision-makers
    interpretation is reasonable [] that is the end of the matter. It is not for
    the reviewing court to look around to see if another reasonable interpretation
    more favourable to the tax payer exists, and then apply that other reasonable
    interpretation. Applying the residual presumption to overcome a reasonable
    interpretation arrived at by an administrative decision-maker is inconsistent
    with the reasonableness standard of review that must be applied by a reviewing
    court.

[74]

In
    my view, it was therefore unnecessary for Miller J.A. to address the different
    types of indeterminacy in legislative language. Without the benefit of argument
    on this issue, I cannot endorse that part of Miller J.A.s analysis. Nor is it
    necessary, in this case, to address the bounds of proper judicial analysis. My
    views on this matter may be more nuanced than those expressed by my colleague,
    Laskin J.A. I therefore do not concur with Laskin J.A.s reasons in that
    respect.

[75]

However,
    in the end result, I too would allow OMDCs appeal and reinstate its decision
    with the costs that Miller J.A. prescribes.

David M. Paciocco
    J.A.

Released: BWM JUN 15 2018

[1]

Section 34(1) was amended effective March 2017. The nature of
    the amendments is not relevant for the purposes of this appeal, as both parties
    agree that the earlier version of the provision, reproduced above, is the
    applicable provision.


COURT OF APPEAL FOR ONTARIO

CITATION: Prescott v. Barbon, 2018 ONCA 504

DATE: 20180601

DOCKET: C63510

Watt, Pepall and Miller JJ.A.

BETWEEN

Andrea Prescott, Amanda Burt and Barbara Ramsey

Plaintiffs

(Appellants)

and

Ramon Barbon and Eduardo Ramon-Sagastume

Defendants

(Respondents)

and

Economical Insurance Company

Intervenor

(Respondents)

William G. Scott, for the appellants

Derrick Fulton, for the respondent Eduardo
    Ramon-Sagastume

Derek V. Abreu and Trevor J. Buckley, for the respondent
    Ramon Barbon

Donna Polgar, for the intervenor Economical Insurance
    Company

Heard: October 23, 2017

On appeal from the order of Justice Freya Kristjanson of
    the Superior Court of Justice, dated February 13, 2017, with reasons reported
    at 2017 ONSC 1048.

Pepall J.A.:

[1]

On December 28, 2008, the appellants, Andrea Prescott and Barbara
    Ramsey, were passengers in a motor vehicle owned and operated by the appellant,
    Amanda Burt.  A motor vehicle owned and operated by the respondent, Ramon
    Barbon, stopped behind Burts vehicle.  A third motor vehicle operated by the
    respondent, Eduardo Ramon-Sagastume, struck Barbons vehicle from behind,
    causing it to drive into the rear of Burts vehicle.  Wawanesa Mutual Insurance
    Company (Wawanesa) insured both of the respondent vehicles.  The appellants
    sued for injuries sustained in the accident.  The action was commenced on
    December 29, 2010.

[2]

Ramon-Sagastume pleaded guilty to impaired driving.  He had been
    consuming alcohol and had been driving his fathers vehicle.  Wawanesa denied
    coverage to Ramon-Sagastume because he was operating the vehicle without the
    consent of his father, the owner.

[3]

On July 11, 2011, the registrar sent a notice to the appellants lawyer
    advising that the action would be dismissed as abandoned and giving the
    appellants 45 days to act.  The registrar dismissed the action as abandoned on
    August 25, 2011, pursuant to r. 48.15(1) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, which was then in force.  Unaware of the dismissal order
    but prior to the expiry of the 45 days, the appellants lawyer tried to note
    the respondents in default but was precluded from doing so due to the dismissal.
    The lawyer failed to inform his clients of the dismissal and only reported the
    matter to LawPRO over two years later in December 2013.  In that time period,
    he unsuccessfully made some efforts to negotiate a setting aside of the
    dismissal order.

[4]

Ultimately, the appellants served a notice of motion to set aside the
    dismissal in February 2014.  As such, the total time between the date of the
    dismissal order (August 25, 2011) and the bringing of the motion to set aside the
    dismissal order (February 20, 2014) was two years and six months.

[5]

Economical Insurance Company (Economical) insures the vehicle the
    appellants were at the time of the accident.  If the dismissal is set aside,
    the appellants intend to bring a motion to add Economical to the action in
    order to access the uninsured motorist provisions of its policy.  Economical was
    granted intervenor status because it was the uninsured motorist carrier for the
    appellants and an ultimate target for recovery.

[6]

Master Hawkins heard the motion in June and September 2015 and
    overturned the registrars administrative dismissal on December 11, 2015.

[7]

The respondents appealed the Masters decision.  The Superior Court
    judge (the SCJ) allowed the appeal and overturned the Masters decision, thus
    reinstating the administrative dismissal.  She ordered the appellants to pay
    costs of $8,370 to each of the respondents and did not disturb the Masters
    costs order of $3,000 to be paid by the appellants to each of them.

[8]

The appellants appeal from that decision and the respondents seek leave
    to appeal the SCJs costs award.  For the following reasons, I would dismiss
    both the appeal and the request for leave to appeal costs.

[9]

The SCJ anchored her decision overturning the Masters order on three
    components of the Masters reasons:

-

he
    erred in failing to consider the entire statutory scheme relating to
    administrative dismissals in his contextual analysis;

-

he
    erred in finding the respondents partially responsible for the administrative
    dismissal; and

-

he
    erred in his approach to the factors set out in
Reid v. Dow Corning Corp.
(2001), 11 C.P.C. (5th) 80 (Ont. S.C.), with emphasis on his failure to
    consider the principle of finality in his prejudice analysis.

The Role of Masters

[10]

The
    Masters play a very important role in civil litigation proceedings and regularly
    address a wide variety of procedural matters.  As a result, they have developed
    deep expertise in the law and practice relating to procedure.  While
    traditionally Masters presided in Toronto and Ottawa, the use of Masters has
    now been expanded to other regions in Ontario as well.  This expansion
    recognizes their valuable role in the litigation firmament.  As far back as
Evans
    v. Bartlam
, [1937] A.C. 473, Lord Wright of the House of Lords stated, at
    page 484:

The Masters admirably exercise their discretion in routine matters
    of pleading, discovery, interrogatories, venue, mode of trial, and other
    interlocutory directions.

[11]

The
    decision of a Master granting or refusing to set aside an administrative
    dismissal is discretionary.  It is entitled to deference and may be set aside
    only if made on an erroneous legal principle or infected by palpable and
    overriding error of fact:
1196158 Ontario Inc. v. 6274013 Canada Ltd.
,
    2012 ONCA 544, 112 O.R. (3d) 67; and
Chrisjohn v. Riley Estate
, 2015
    ONCA 713, 341 O.A.C. 70.

It is not for an appellate court judge to
    reweigh the evidence and substitute another discretionary decision for that of
    the Master.  Applying
Zeitoun v. Economical Insurance Group
(2009), 96
    O.R. (3d) 639, Cronk J.A. stated in
Wellwood v. Ontario Provincial Police
,
    2010 ONCA 386, 102 O.R. (3d) 555, at para. 28, that it is settled law that an
    appeal from a Masters decision is not a rehearing.

Rather, on questions of fact and mixed fact and law, deference
    applies and the role of the reviewing court is limited. An appellate court
    cannot substitute its interpretation of the facts or reweigh the evidence
    simply because it takes a different view of the evidence from that of the
    master.  On questions of law, the correctness standard applies: see
Housen
    v. Nikolaisen
, [2002] 2 S.C.R. 235;
H.L. v. Canada (Attorney General)
,
    [2005] 1 S.C.R. 401.

[12]

Unfortunately
    in this case, for the following reasons, I have concluded that interference
    with the Masters decision was justified.

Applicable Legal Test

[13]

Under
    r. 37.14(2), the court has discretion to set aside or vary a dismissal order on
    such terms as are just.  Specifically, r. 37.14(1) and (2) provide:

37.14(1) A party or other person who,

(a)     is affected by an order obtained on motion without
    notice;

(b)     fails to appear on a motion through accident,
    mistake or insufficient notice; or

(c)     is affected by an order of a registrar,

may move to set aside or vary the order, by a notice of
    motion that is served forthwith after the order comes to the persons attention
    and names the first available hearing date that is at least three days after
    service of the notice of motion.

(2) On a motion under subrule (1), the court may set aside or
    vary the order on such terms as are just.

[14]

The
    legal test for setting aside a registrars order dismissing an action for delay
    was originally described by Master Dash in
Reid
and adopted by this
    court in
Scaini v. Prochnicki
, 2007 ONCA 63, 85 O.R. (3d) 179:

(i)    Have the plaintiffs provided a satisfactory explanation
    for the litigation delay?

(ii)   Have the plaintiffs led satisfactory evidence to explain
    that they always intended to prosecute this action within the time limit set
    out in the rules or a court order but failed to do so through inadvertence?

(iii)  Have the plaintiffs demonstrated that they moved
    forthwith to set aside the dismissal order as soon as the order came to their
    attention, and

(iv)  Have the plaintiffs convinced the court that the defendants
    have not demonstrated any significant prejudice in presenting their case at
    trial as a result of the plaintiffs delay or as a result of steps taken
    following the dismissal of the action?

[15]

This
    is not a rigid, one-size fits all test.  Rather, a contextual approach is
    required:
Scaini
, at paras. 23-25.  Prior to
Scaini
, a plaintiff
    had to satisfy each of the four elements. Thereafter, courts were to consider
    and weigh all relevant factors to determine the order that is just.  See also
Marché
dAlimentation Denis Thé
riault Lté
e. v. Giant Tiger Stores
    Ltd.
, 2007 ONCA 695, 87 O.R. (3d) 660.  In
Hamilton (City) v. Svedas
    Koyanagi Architects Inc.
, 2010 ONCA 887, 104 O.R. (3d) 689, at para. 23, Laskin
    J. A. observed that the overriding objective is to achieve a result that
    balances the interests of the parties and takes account of the publics
    interest in the timely resolution of disputes. The four
Reid
factors
    provide a structured approach to achieving this result.

[16]

This
    appeal involves an order dismissing an action as abandoned but the same
    principles apply.

I.        Masters Consideration
    of the Statutory Scheme

[17]

Turning
    to the three bases identified by the SCJ for reversing the Master, first, she
    determined that the Master erred in his contextual analysis by failing to
    consider the entire statutory scheme relating to administrative dismissals.

[18]

Prior
    to 2015, r. 48.14(0.1) and (1) provided:

(0.1)  In this rule,

defence means,

(a)  a statement of defence,

(b)  a notice of intent to defend, and

(c)  a notice of motion in
    response to an   action, other than a motion challenging the courts
    jurisdiction.

48.14(1)   Unless the court orders otherwise, if an action in
    which a defence has been filed has not been placed on a trial list or
    terminated by any means within two years after the first defence is filed, the
    registrar shall serve on the parties a status notice in Form 48C.1 that the
    action will be dismissed for delay unless, within 90 days after service of the
    notice, the action is set down for trial or terminated, or documents are filed
    in accordance with subrule 10.

[19]

Also,
    prior to 2015, r. 48.15(1) provided:

(1) The registrar shall make an order dismissing an action as
    abandoned if the following conditions are satisfied, unless the court orders
    otherwise:

1.

More than 180
    days have passed since the date the originating process was issued.

2.

None of the
    following has been filed:

(i)    A
    statement of defence.

(ii)    A
    notice of intent to defend.

(iii)   A notice
    of motion in response to an action, other than a motion challenging the courts
    jurisdiction.

3.

The action has
    not been disposed of by final order or judgment.

4.

The action has
    not been set down for trial.

5.

The registrar has given 45 days notice in Form 48E that the action will
    be dismissed as abandoned.

[20]

As
    such, prior to January 1, 2015, unless a court ordered otherwise, a defended
    action could be dismissed for a delay of approximately 2 years and 90 days
    after the first defence was filed, and an undefended action could be dismissed
    180 days after the originating process was issued combined with 45 days notice
    from the registrar.

[21]

As
    of January 1, 2015, r. 48.15 was repealed, and a registrar no longer had
    jurisdiction to dismiss an action as abandoned.  In addition, as of January 1,
    2015, r. 48.14(1) was amended in part to provide:

(1) Unless the court orders otherwise, the registrar shall
    dismiss an action for delay in either of the following circumstances, subject
    to subrules (4) to (8):

1.  The action has not been set
    down for trial or terminated by any means by the later of the fifth anniversary
    of the commencement of the action and January 1, 2017.
[1]

[22]

Accordingly,
    under the amended rule, the appellants would have had five years from the
    commencement of their action on December 29, 2010 to set their action down for
    trial or otherwise conclude the action.

[23]

As
    mentioned, r. 37.14 provides that a party affected by an order of the registrar
    may move to set aside the order by a notice of motion that is served forthwith
    and names the first available hearing date that is at least three days after
    service.  It states that the court may set aside the order on such terms as are
    just.

[24]

The
    SCJ reasoned that the Master, in his contextual analysis, failed to consider
    the entire statutory scheme including transitional provisions and treated the
    repeal of r. 48.15 as a get out of jail free card.

[25]

I
    would not characterize the Masters reasons in this manner.  The Master was
    fully aware that r. 48.15 was in force when the action was dismissed and that the
    new r. 48.14 was not.  He also was aware that the appellants should have moved
    forthwith after the order came to their attention to set it aside.  Indeed, he
    recited that provision found in r. 37.14 in full in his reasons.  It was also
    conceded by the appellants that the motion was not brought promptly.

[26]

In
    his reasons, the Master described the history of the proceedings.  He then
    moved to the legal test, noting Goudge J.A.s observations in
Scaini
, at paras. 23-24,

that r.
    37.14(2) invites the court to make the order that is just and that the court
    should consider and weigh all relevant factors to determine the order that is
    just in the circumstances of the particular case.  The Master noted that a contextual
    approach was mandated by this court in
Scaini
and, quoting from this
    court in
H.B. Fuller Company v. Rogers (Rogers Law Office)
, 2015 ONCA
    173, 330 O.A.C. 378, identified the tension between deciding actions on their
    merits and resolving actions in a timely and efficient manner to maintain
    public confidence in the administration of justice.

[27]

The
    Master then described the changes to rr. 48.14 and 48.15 and the statutory
    scheme.  At para. 19, he noted that: What now constitutes an acceptable level
    of diligence in the prosecution of an action is a much easier test to meet than
    was the case in the past.  He stated that the repeal of r. 48.15 may  be
    considered as part of the context in which this motion to set aside a
    registrars order dismissing an action as abandoned was argued.

[28]

This
    was in error.  Rule 48.15 was in force when the registrar dismissed the action
    as abandoned, but by the time the motion was argued, it had been repealed.  As
    such, it could not form part of the applicable context, and it was an error for
    the Master to make this statement.  He went on to say: [O]wing to the
    amendments to rule 48.14, I do not find this delay to be inordinate.  For the
    same reason, this too was in error.

II.       Primary
    Responsibility for Actions Progress Lies with Plaintiffs

[29]

The Master then considered the four criteria contained in
Reid
.
    Dealing with the first criterion, he did not find the lawyers explanation for
    the delays to be satisfactory.  However, he also observed that the respondents
    had to accept part of the blame for the dismissal. The SCJ took issue with this
    finding.  She stated that the party who commences the proceeding bears the
    primary responsibility for its progress, and the Master erred in law in
    concluding that the respondents were at fault for not filing a defence.  She
    said that the rule governing administrative dismissals places no obligation on
    defendants to file a defence to prevent a registrars dismissal, and as such,
    the Masters approach in treating the respondents as blameworthy created a
    categorization that does not exist under the
Rules of Civil Procedure
.

[30]

I
    agree with the SCJs conclusion.  There is no burden on the defendant to
    explain the delay or to move the action to trial:
Wellwood
, at paras.
    37-41, 84;
Jadid v. Toronto Transit Commission
, 2016 ONCA 936, at para.
    23.  The primary responsibility for the progress of an action lies with the
    plaintiff:
MDM Plastics Limited v. Vincor International Inc.
, 2015 ONCA
    28, at para. 33.  As Cronk J.A. stated in
Wellwood
at para. 48, the
    initiating litigant generally suffers the consequences of a dilatory regard for
    the pace of the litigation.  Although there may be occasions where the
    defendants conduct may be relevant, (see for example
Labelle v. Canada
    (Border Services Agency)
, 2016 ONCA 187;
Aguas v. Rivard Estate
,
    2011 ONCA 494 and
Armstrong v. McCall
(2006), 213 O.A.C. 229, at para.
    26), assigning fault that arises from a failure to file a notice of intent to
    defend or a statement of defence within the context of r. 48 was misplaced.

[31]

There
    was also a more fundamental problem embedded in the Masters consideration of
    the first and second criteria of the
Reid
test.

There was no
    evidence filed from either of the appellants: no sworn affidavit, no
    correspondence, no testimony under oath. There was simply a bald statement from
    the lawyer that it had always been the intention of the appellants to proceed
    with the action. This was inadequate particularly given that, as noted by the
    SCJ, there was no reference to any conversations with the respondents, no
    evidence of any contact with any of the respondents between January 3, 2012 and
    February, 2014, and only minimal contact before that time.  There was no
    evidence that any of the respondents had asked about the status of their action
    in over two years.  The Masters finding that the respondents intended to
    prosecute their claim was unreasonable in light of the full factual context.

III.      Prejudice

[32]

The
    SCJ focused particularly on the Masters failure to consider the finality
    principle in his analysis of prejudice.  In that regard, she relied on
H.B.
    Fuller Co.
and
Marché
.

[33]

Prejudice
    is a key consideration on a motion to set aside a dismissal order:
Finlay
    v. Van Paassen
, 2010 ONCA 204, at para. 28.

[34]

In
    addressing this issue, it is important to consider the different aspects of
    prejudice.  In
Reid
, the focus is on whether a defendant would suffer
    any significant prejudice in presenting their case at trial (para. 41).  The
    emphasis described in that decision is on the impact of delay on a defendants
    ability to mount a defence to the plaintiffs claim.

[35]

However,
    in
Marché
, Sharpe J.A. identified an additional dimension to the
    fourth
Reid
factor: security of legal position and finality:

[A]s the Master correctly observed, the jurisprudence from this
    court identifies as relevant to the fourth
Reid
factor the security of
    legal position gained by a litigant through a court order granted because of
    delay or default: see
Halton Community Credit Union Ltd. v. ICL Computers
    Canada Ltd.
,
supra
.

Even when the order dismissing the action was made for delay or
    default and not on the merits, and even when the party relying on the order
    could still defend itself despite the delay, it seems to me that at some point
    the interest in finality must trump the opposite partys plea for an
    indulgence.

I agree with the Master that, when viewed in the light of a
    delay of this magnitude, the security of the legal position obtained by the
    appellant becomes an important factor to consider.  Five years after the action
    against it had been dismissed, the appellant was entitled to rest on the
    assurance that the judicial system had disposed of the respondents claim once
    and for all.

[36]

As
    such, in considering the fourth
Reid
factor, the Master was required
    to address:

(i)

did
    the appellants satisfy their onus to establish no significant actual prejudice
    to the respondents ability to defend the action as a result of the appellants
    delay; and

(ii)

whether
    in light of the delay, the principle of finality and the respondents reliance
    on the security of its position should nevertheless prevail.  See
H.B.
    Fuller
at para. 28.

[37]

There
    is no need to resort to presumptions or inferences of prejudice.  The question
    as described by Sharpe J.A. in
Marché
is simply whether the interest
    in finality must trump the opposite partys pleas for an indulgence.

[38]

The
    SCJ acknowledged in her reasons that the Master addressed the issue of
    prejudice but maintained that the Master erred in failing to consider the
    finality principle.  I agree with this assessment.

[39]

The
    Master did address whether either of the respondents had suffered any
    significant prejudice in presenting his case at trial as a result of the
    appellants delay or as a result of steps taken following the dismissal of the
    action and properly placed the onus on the appellants to establish that the
    respondents had not suffered prejudice.  However, he did not consider the
    finality principle.

[40]

Coupling
    this failure with the Masters consideration of the incorrect context, the
    blame allocated to the respondents, and the absence of any evidence from the
    appellants, the SCJ was correct in setting aside his decision and considering
    the merits of the motion anew.  Her conclusion is effectively captured in
    paragraph 51 of her reasons:

More than eight years ago, the plaintiffs were involved in a
    minor car accident; all three vehicles drove away from the accident.  The
    lawyer issued a Statement of Claim, then took virtually no steps to prosecute
    the action.  He did not request a defence.  He ignored correspondence from
    defence counsel and adjusters.  Counsel became aware the case would be
    dismissed in August, 2011 and initially sought to note the defendants in
    default, although he was aware by September, 2011 that the case had been
    dismissed and he could not note the defendants in default.  After the case was
    administratively dismissed in August, 2011, he did not inform his clients for
    more than 2.5 years, until February, 2014.  There is no evidence the plaintiffs
    contacted their lawyer in this two year period to inquire about the status of
    the case.  The notice of motion to set aside the dismissal was served in
    February, 2014; the motion record was served in June, 2014.  The motion was
    argued in June and December, 2015.

[41]

She
    found no satisfactory explanation for the delay and noted the complete lack of
    action by the lawyer and the absence of evidence from the appellants.

The evidence does not establish inadvertence.  The motion was
    not brought promptly.  The lawyers tickler system was completely inadequate,
    and was a missed deadline waiting to happen.

There is evidence of reliance by Barbon and Ramon on the
    finality of the order and the intervenor stands to be added for the first time
    seven years after the accident.  In addition, this is not a case which would
    depend on documents, but one which would depend on witnesses.  Seven years
    after the accident, the case is at the pleadings stage.

[42]

After
    considering the relevant factors, the SCJ was entitled to conclude as she did.

Disposition

[43]

For these reasons, I would dismiss the appeal.  The appellants are to
    pay each of the respondents $7,500 in costs of the appeal, inclusive of taxes and
    disbursements.  I see no reason to interfere with the costs order made by the SCJ
    and would decline leave.

Released:

DW                                                  S.E.
    Pepall J.A.

JUN -1 2018                                    I agree
    David Watt J.A.

I
    agree B.W. Miller J.A.

[1]
Rule 48.14(1) has since been slightly amended again. It currently provides:

1. The action has not been
    set down for trial or terminated by any means by the fifth anniversary of the
    commencement of the action.

2. The action was struck
    off a trial list and has not been restored to a trial list or otherwise
    terminated by any means by the second anniversary of being struck off.


WARNING

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

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

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

(a)     any of the following offences;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

WARNING

An order restricting publication in this proceeding
    was made under s. 517 of the
Criminal Code
and continues to be in
    effect.  This section of the
Criminal Code
provides:

517(1)          If the prosecutor or the accused
    intends to show cause under section 515, he or she shall so state to the
    justice and the justice may, and shall on application by the accused, before or
    at any time during the course of the proceedings under that section, make an
    order directing that the evidence taken, the information given or the
    representations made and the reasons, if any, given or to be given by the
    justice shall not be published in any document, or broadcast or transmitted in
    any way before such time as

(a)     if a preliminary inquiry is held, the
    accused in respect of whom the proceedings are held is discharged; or

(b)     if the accused in respect
    of whom the proceedings are held is tried or ordered to stand trial, the trial
    is ended.

Failure to comply

(2)     Everyone who fails without lawful excuse, the
    proof of which lies on him, to comply with an order made under subsection (1)
    is guilty of an offence punishable on summary conviction.

(3)     [Repealed, 2005, c. 32, s. 17]

R.S., 1985, c. C-46, s. 517; R.S., 1985, c. 27 (1st
    Supp.), s. 101(E); 2005, c. 32, s. 17.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. A.K., 2018 ONCA 567

DATE: 20180620

DOCKET: C60958

Sharpe, Roberts and Trotter JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

A.K.

Appellant

Najma Jamaldin and Paul Genua, for the appellant

Nancy Dennison, for the respondent

Heard and released orally: June 19, 2018

On appeal from the conviction entered on December 19,
    2014 and the sentence imposed on September 9, 2015 by Justice Lucia Favret of
    the Ontario Court of Justice.

REASONS FOR DECISION

[1]

The appellant appeals his convictions on seven counts for various
    offences against his former domestic partner, including sexual assault with a
    weapon. He received a global three-year custodial sentence.

[2]

All of the offences arise out of the couples very turbulent and
    troubled relationship. It was common ground that both the appellant and the
    complainant were at times verbally and physically abusive toward each other.

[3]

The case on the particular offences before the court turned on the trial
    judges assessment of the credibility and reliability of the appellant and the
    complainant.

[4]

The appellant takes issue with the trial judges assessment of the
    evidence, arguing that she subjected the evidence of the complainant and the
    appellant to an uneven level of scrutiny. He submits that the trial judge erred
    in finding on her own initiative that the appellant breached the rule in
Browne
    v. Dunn
(1893), 6 R. 67 (H.L.), and in drawing an adverse inference
    against him. Finally, the appellant contends that he was prejudiced by the
    ineffective assistance of his trial counsel.  He seeks to file fresh evidence
    on appeal in support of that ground, as well as the
Browne v. Dunn
ground.

[5]

We are not persuaded by these submissions.

[6]

The trial judges lengthy reasons demonstrate that she fairly assessed
    the evidence given by the appellant and the complainant. In particular, the
    trial judge was clearly alert to the serious deficiencies and discrepancies in
    the complainants evidence. This assessment led the trial judge to reject the
    complainants evidence in relation to the counts that she dismissed.

[7]

With respect to the remaining counts, the trial judge explained why she
    rejected the appellants evidence and why it did not leave her with a
    reasonable doubt, and why she accepted the complainants evidence in support of
    those counts of which she convicted the appellant. It is well-established that
    a trial judge can accept some, all or none of a witnesss evidence. It was open
    to the trial judge to accept the portions of the evidence of the complainant
    that she found substantiated the offences against the appellant.

[8]

While it would have been preferable for the trial judge to have given
    the parties an opportunity to address the
Browne v. Dunn
issue relied
    upon by her to make an adverse inference against the appellant, her reasons
    show that there was ample evidence on which she based her other adverse
    findings of credibility against the appellant. Having considered her reasons as
    a whole, we are not persuaded that the trial judges adverse inference with
    respect to the discrete
Browne v. Dunn
issue materially affected the
    outcome of the trial or rendered the trial unfair to the appellant.

[9]

The primary focus of the trial judges
Browne v. Dunn
finding
    related to the evidence of the complainants father and the fresh evidence
    fails to demonstrate any factual basis for the appellants diabolical plan
    theory. To the extent the trial judge did err by unilaterally raising
Browne
    v. Dunn
in her reasons we would, if necessary, apply the
curative
    proviso
.

[10]

Finally,
    the appellant has not met the high threshold to demonstrate ineffective assistance
    of counsel in this case. The tactical decisions of his trial counsel about
    which the appellant now complains were fair and reasonable in the
    circumstances, and carried out with the appellants informed instructions.

[11]

The
    appellant also seeks leave to appeal his sentence. The three-year sentence was
    fit. We see no basis to interfere with it.

[12]

Accordingly,
    the application for fresh evidence is dismissed and the appeal from conviction
    and sentence is dismissed.

Robert J. Sharpe
    J.A.

L.B.
    Roberts J.A.

G.T.
    Trotter J.A.