COURT OF APPEAL FOR ONTARIO

CITATION: Solar Power Network Inc. v. ClearFlow Energy

Finance Corp., 2018 ONCA 727

DATE: 20180904

DOCKET: C64864

Sharpe, Brown and Trotter JJ.A.

BETWEEN

Solar Power Network Inc., LDREC SPN LP, SPN LP 10, SPN LP 12,  SPN LP 14, SPN LP 15, SPN LP 16 and SPN LP 17

Respondents/Appellants
    by Cross-Appeal

(Applicants)

and

ClearFlow Energy Finance Corp.

Appellant/Respondent
    by Cross-Appeal

(Respondent)

Barry H. Bresner and Graham Splawski, for the appellant/respondent
    by cross-appeal

Simon Bieber and Nathaniel Read-Ellis, for the
    respondents/appellants by cross-appeal

Patricia D.S. Jackson and David Outerbridge, for the
    intervener, The Canadian Bankers Association

Heard: June 20, 2018

On appeal from the judgment of Justice Thomas McEwen of
    the Superior Court of Justice, dated January 10, 2018, with reasons reported at
    2018 ONSC 7286, 56 C.B.R. (6th) 37.

Sharpe J.A.:

INTRODUCTION

[1]

This appeal concerns complex commercial
    agreements between two sophisticated parties. The appellant, ClearFlow Energy
    Finance Corp. (ClearFlow) made a number of loans to the respondent, Solar
    Power Network Inc. and its affiliate companies (Solar Power). The loans were risky
    given the nature of Solar Powers renewable energy projects that ClearFlow was
    financing. Solar Power defaulted on the loans and disputed the amount of
    interest owing.

[2]

At the core of the dispute is a term in the loan
    agreements requiring Solar Power to pay a discount fee of .003 percent of the
    outstanding loans on the repayment date and for every day thereafter while the loan
    remains outstanding. Solar Power contends that the discount fee fails to comply
    with the
Interest Act
,
    R.S.C. 1985 c. I-15, s. 4, which requires that any written agreement for the
    payment of interest at a rate or percentage per day, week, month or any period
    less than one year contain an express statement of the yearly rate or
    percentage of interest to which the other rate or percentage is equivalent.
    Section 4 provides that where an agreement fails to comply with this
    requirement, no interest exceeding the rate or percentage of five per cent per
    annum shall be chargeable.

[3]

The application judge accepted Solar Powers
    arguments and held that ClearFlow was entitled only to interest at the rate of
    5% per annum in total despite  the fact that the loan agreements provided for
    interest to accrue at 12% per annum before maturity, and 24% thereafter in addition
    to the .003% discount fee.

[4]

ClearFlow appeals to this court, arguing that:

a)

the discount fee is not interest;

b)

in any event, the loan agreements contain an
    annualizing formula that satisfies s. 4;

c)

Solar Power entered forbearance agreements
    acknowledging its indebtedness, and cannot now dispute the interest owing; and

d)

in the alternative, the appropriate remedy is to
    limit the application of s. 4 to the discount fee rather than reduce the
    interest payable on the entire agreement to 5%.

[5]

Solar Power cross-appeals the application
    judges finding that certain administration fees provided for in the loan
    agreements do not constitute interest within the meaning of the
Interest Act
, s. 4.

[6]

For the following reasons, I conclude that the
    application judge did not err as to whether the administrative fees and the
    discount fee are interest. He did, however, err by finding that the discount
    fee contravenes the
Interest Act
, and by holding that all interest payable under the loan agreements
    should be limited to 5%.

FACTS

[7]

Beginning in 2015, ClearFlow, a project-finance
    company, made a series of loans to Solar Power to finance the development and
    construction of renewable energy projects. Renewable energy projects are
    complex, high cost, and difficult to finance. After ClearFlow made two initial
    loans to Solar Power, the parties signed a Loan Agreement that provided for two
    types of loans: Construction Loans for up to 90 days and Warehouse Loans with
    terms of up to 180 days while Solar Power arranged long-term financing. The
    parties also negotiated a number of additional loans by way of Promissory
    Notes.

[8]

All of the loans have three components material
    to this appeal.

[9]

First is a base rate of interest, typically 12%
    per annum compounded and calculated monthly, and 24% per annum in the event of
    default.

[10]

Second is an administrative fee of either 1.81%
    or 3.55%, charged when the loan was advanced and, if not paid off, each time
    the loan is renewed (
i.e.
not paid by the
    expiry of the term).

[11]

Third is the discount fee of 0.003% of the
    principal amount of the loan payable on the due date of the loan and every day
    thereafter until the loan is repaid.

[12]

These three terms are reflected in art. 2.2 of
    the Loan Agreement:

Each Borrower agrees to pay interest in arrears
    on the outstanding principal amount of each Loan advanced to such Borrower at
    the rate of 12% per annum, compounded and calculated monthly, both before and
    after maturity, default and judgementFollowing the occurrence of an Event of
    Default which is continuing, interest shall continue to accrue on the outstanding
    principal amount at the rate of 24% per annum until paid. Each Borrower further
    agrees to pay to the Lender: (i) on the date of advance of each Loan advanced
    to such Borrower under the Construction Loan Facility, an administration fee of
    1.81% of the amount of such Loan; (ii) on the date of advance of each Loan
    advanced to such Borrower under the Warehouse Loan Facility, an administration
    fee of 1.81% of the amount of such Loan; and (iii) on the date of repayment of
    such Loan (as set out in Section 2.4 or 2.5, as applicable), a discount fee of
    0.003% of the outstanding balance of such Loan for every day such Loan remains
    outstanding until such Loan is repaid in full.

[13]

Solar Power borrowed over $40 million from
    ClearFlow between 2015 and 2017 pursuant to the loan documents. In 2016, Solar
    Power began to encounter financial difficulties and defaulted on many of the
    loans. The parties entered Forbearance Agreements in July, October, and
    November 2016, as well as April 2017. Solar Power acknowledged its
    indebtedness, and ClearFlow agreed to forbear on Solar Powers default and to
    provide further financing.

[14]

The total amount of accrued interest is
    approximately $10 million. Solar Power has now secured replacement financing,
    and funds sufficient to cover the amount in dispute are being held in trust
    pending resolution of this appeal.

[15]

As I have already indicated, the central issues
    on the application and on this appeal are whether the Loan Agreement complied
    with the
Interest Act
,
    s. 4 and the appropriate remedy if it is non-compliant. Section 4 provides as
    follows:

Except as
    to mortgages on real property or hypothecs on immovables, whenever any interest
    is, by the terms of any written or printed contract, whether under seal or not,
    made payable at a rate or percentage per day, week, month, or at any rate or
    percentage for any period less than a year, no interest exceeding the rate or
    percentage of five per cent per annum shall be chargeable, payable or
    recoverable on any part of the principal money unless the contract contains an
    express statement of the yearly rate or percentage of interest to which the
    other rate or percentage is equivalent.

REASONS OF THE APPLICATION JUDGE

[16]

Before the application judge, Solar Power took
    the position that the administration fees and the discount fee amounted to
    interest within the meaning of the
Interest Act
, s. 4. As the Loan Agreement and the Promissory Notes did not state
    an equivalent annual percentage or rate of interest, Solar Power argued that the
    interest payable should be capped at 5%.

(a)

Administration fees

[17]

The application judge found that the
    administration fees did not constitute interest within the meaning of s. 4. He
    accepted ClearFlows evidence that the administration fees were compensation
    for administrative work in setting up and administering the loans, rather than
    a return on the money lent. Negotiating the loans involved the preparation of
    thousands of documents. At para. 32, the application judge found that it is
    commercially reasonable to accept the proposition that the administration fee
    was intended to compensate ClearFlow for the work it did in entering into and
    administering the various loan documents. The application judge noted that the
    administration fee did not accrue on a day-to-day basis during the term of each
    loan but was charged on a one-time-only basis and was only charged again if the
    loan was not repaid as specified. He concluded, at para. 39, that the administrative
    fee was not simply compensation for ClearFlow not having the use of the
    money.

(b)

Discount fee

[18]

The application judge found that the discount
    fee was interest. He rejected ClearFlows contention that it simply provided
    additional compensation for daily administration of the loans. The discount fee
    was not linked to the creation of a new loan or a renewal, it was the same for
    all types of loans, and it was calculated on a daily fixed rate. These factors
    suggested interest rather than a fee, as did the concession of ClearFlows
    affiant that the fees incentivized [Solar Power] to make earlier payout of the
    Loans. The discount fee had the three essential elements of interest. First, it
    was compensation for the use or retention of money; second, it related to the
    principal amount owing; third, it accrued over time.

(c)

The Annualizing Formula

[19]

The Loan Agreement (but not the Promissory
    Notes) contains a formula to calculate the annual rate for both the
    administration fee and the discount fee:

1.2 Interest and Fee Calculations, Maximum
    Interest Rate

a.

Unless otherwise stated, in this Agreement if
    reference is made to a rate of interest, discount rate, fee or other amount
    per annum or a similar expression is used, such interest, fee or other amount
    shall be calculated on the basis of a year of 365 or 366 days, as the case may
    be. If the amount of any interest, fee or other amount is determined or
    expressed on the basis of a period of less than one year of 365 or 366 days, as
    the case may be, the equivalent yearly rate is equal to the rate so determined or
    expressed, divided by the number of days in the said period, and multiplied by
    the actual number of days in that calendar year.

[20]

ClearFlows position before the application
    judge and before this court is that the annualizing formula provides a simple
    and adequate method to determine the annualized interest and thereby brings the
    Loan Agreement into compliance with the
Interest
    Act
, s. 4.

[21]

The application judge rejected ClearFlows
    argument for two reasons.

[22]

First, he found, at para. 53, that a formula
    could not satisfy the purpose of the statutory requirement for an express,
    annualized statement of interest, because [f]ormulas can be confusing and even
    misleading. He noted that confusion has arisen in this case about the amount
    of interest owing and suggested that this was the very mischief at which s. 4
    was aimed.

[23]

Second, he found that the annualizing formula did
    not provide the information required by s. 4 because it did not take into
    account compounding of interest. The annualizing formula would produce an
    annualized rate of 1.095% (0.003% x 365 days) but the actual interest rate
    would depend on a number of compound periods of interest as the discount fee
    was compounded each time the loan rolled over.

[24]

The application judge added that, in any event,
    there was no annualizing formula in the Promissory Notes to save them from
    being caught by s. 4.

(d)

The Forbearance Agreements

[25]

The application judge rejected ClearFlows
    submission that Solar Power was precluded from challenging the amount of
    interest owing by virtue of the Forbearance Agreements. The first Forbearance
    Agreement and the Second Amended and Restated Forbearance Agreement provided
    that the indebtedness, including interest, was unconditionally owing without
    offset, defence or counterclaim of any kind, nature or description whatsoever.
    However, the Third Amended and Restated Forbearance Agreement, which amends and
    replaces the earlier agreements, added to those words except as may otherwise
    be required by applicable laws. The application judge found that the added
    language permitted Solar Power to challenge the rate of interest.

(e)

Remedy

[26]

The application judge found that the appropriate
    remedy was to reduce all interest, including the base rate of interest of 12%
    or 24%, to 5%.

[27]

In his view, this remedy was required by the
    language of s. 4 that states that no interest shall be charged above the rate
    of 5% on any part of the principal money if any interest is not expressed on an
    annual basis. Any other interpretation would allow lenders to obscure the
    interest rate by charging a series of non-annualized rates individually lower
    than 5%. The
Interest Act
, s. 4 is consumer protection legislation and he rejected the
    contention that courts should interpret the provision differently for
    sophisticated borrowers and lenders. While he acknowledged that the result was harsh
    and draconian, he found that meeting the objectives of the legislation
    required it.

ISSUES

[28]

The following issues arise on this appeal and
    cross-appeal.

1.

Did the application judge err in finding that
    the administration fees are not interest?

2.

Did the application judge err in finding that
    the discount fee is interest?

3.

Did the application judge err by concluding that
    the discount fee failed to satisfy the requirements of the
Interest Act
, s. 4?

4.

Did the application judge err by concluding that
    the appropriate remedy is to limit all interest payable to 5%?

5.

Did the application judge err in finding that the forbearance
    agreements do

not preclude Solar Power from challenging
    the interest payable?

ANALYSIS

(1)

Did the application judge err in finding that
    the administration fees are not interest?

[29]

In its cross-appeal, Solar Power argues that the
    application judge erred in finding that the administrative fees are not
    interest within the meaning of the
Interest Act
, s. 4.

[30]

First, Solar Power submits that while the
    primary effect of the administrative fee may be to compensate for
    administrative work, the application judge failed to consider that it had a
    secondary effect of incentivizing repayment. Solar Power maintains that
    incentivizing repayment is a hallmark of compensation for the use of money.

[31]

Second, Solar Power argues that as the
    administrative fee recurs when the loan is renewed, it does accrue over time
    and therefore qualifies as interest.

[32]

I do not find either submission persuasive.

[33]

Solar Power does not challenge the legal test
    used by the application judge, at para. 20:

1. Interest is the return or consideration or
    compensation for the use or retention of money that is owed to another person;

2. interest must relate to a principal amount or
    an obligation to pay money; and,

3. interest must accrue over time:
Saskatchewan
    (Attorney General) v. Canada (Attorney General
),
1947
    CanLII 32 (SCC)
, 1947 S.C.R. 394 at para. 47;
Ontario (Attorney
    General) v. Barfried Enterprises Inc.
,
1963 CanLII 15 (SCC)
,
    [1963] S.C.R. 570, 42 D.L.R. (2d) 137
at para. 5.

[34]

The application judges findings on this issue
    were firmly rooted in the evidence about the nature and purpose of the
    administrative fees and the work that ClearFlow had to perform to set up and
    administer the loans. As mixed findings of fact and law on a point of
    contractual interpretation, they attract deference on appeal:
Sattva
    Capital Corp. v. Creston Moly Corp
., 2014 SCC 53, [2014] 2 S.C.R. 633
.

[35]

While the administrative fees were charged each
    time the loan was renewed, the incentive effect on repayment was negligible. The
    administrative fees were paid at the start of the term of each loan and only
    recurred if the loans were not repaid at term. They did not, therefore, recur
    during the term of the loan. The application judge was entitled to find that
    they did not amount to
compensation for the use or
    retention of money that is owed to another person.

[36]

As Solar Power has failed to identify any
    extricable error of law or palpable and overriding error of fact, I would not
    interfere with the application judges findings on this issue.

(2)

Did the application judge err in finding that
    the discount fee is interest?

[37]

ClearFlow appeals the application judges
    finding that the discount fee is interest within the meaning of the
Interest Act
, s. 4.

[38]

ClearFlow argues that the application judge
    erred by refusing to accept evidence tending to show that the discount fee was intended
    to provide additional compensation for daily loan administration. It submits
    that the evidence shows that the effect of the discount fee was to discount the
    upfront administrative fee over the term of the loan, making further
    administrative costs payable only so long as the loan remained outstanding.

[39]

I disagree.

[40]

As I have already indicated, the application
    judge applied the correct legal test for interest in the context of the
    contractual language and the evidence of the dealings between the parties.
    Absent an extricable error of law or a palpable and overriding error of fact,
    his findings are entitled to deference.

[41]

I see no reason to interfere with the
    application judges finding that the discount fee is interest. The application
    judge did not make a processing error, as ClearFlow argued. He considered and
    rejected ClearFlows evidence that the fee was intended to cover administrative
    costs. He found that the discount fee was not linked to the creation or renewal
    of a loan, the amount of the fee did not vary according to the administrative
    work required by the loan as in the case of the administrative fee, and the fee
    was charged at a daily fixed rate unrelated to any ongoing or specific events.
    He characterized ClearFlows submission that the discount fee was additional
    compensation for administrative work as contrived, and concluded that [t]he
    layering of an additional charge, accruing day-to-day without any demonstrable
    link to the actual management of the Loan, cannot reasonably be described as a
    fee.

[42]

It was open to the application judge to conclude
    that the discount fee bore all the hallmarks of the test for interest: it was
    consideration or compensation for the use of money, it related to the principal
    amount, and it accrued over time. I see no reason to interfere with his finding
    on this issue.

(3)

Did the application judge err by concluding that
    the discount fee failed to satisfy the requirements of the
Interest Act
, s. 4?

[43]

There are two aspects to this issue.

[44]

First is the adequacy of the annualizing formula to satisfy the
    requirement in s. 4 that the written loan agreement provide
an express statement of the yearly rate or percentage of interest to
    which the other rate or percentage is equivalent. The application judge held
    that it was not adequate.

[45]

Second is the question of compound interest. The application judge held
    that as the loans could be rolled-over or renewed after 90 or 180 days, the
    discount fee was compounded and that written agreement failed to disclose the
    actual or effective rate of interest.

(a)

The annualizing formula

[46]

The annualizing formula provides a relatively
    simple arithmetic method to calculate the yearly rate to which the daily rate
    is equivalent:
multiply 0.003% by 365 days to produce a
    yearly rate of 1.095%.

[47]

ClearFlow, supported by the intervener, The
    Canadian Bankers Association, submits that formulas of this nature are
    regularly used in complex commercial loan agreements and that the case law
    supports their validity as a means to provide borrowers with the kind of
    information required by s. 4. Solar Power supports the application judges
    conclusion that unless the agreement explicitly provides the yearly interest,
    s. 4 is not satisfied. Significantly, however, Solar Power does not take the
    position that an annualizing formula can never satisfy the requirements of s.
    4, stating in its factum, [t]hat question is for another day.

[48]

This is an issue of statutory interpretation for
    which a standard of correctness applies:
Mazur v.
    Elias Estate
(2005), 75 O.R. (3d) 299 (C.A.)

[49]

I turn first to the actual language of s. 4. It
    requires an express statement of the yearly
rate
    or percentage

of interest to which the other
    rate or percentage is equivalent (emphasis added). By requiring an equivalent
    rate
or
percentage
    (emphasis added) instead of just employing the word percentage, Parliament
    has used language indicating that the effective annual interest need not be
    expressed as a numerical percentage. This is consistent with the interpretive
    presumption that Parliament does not speak in vain and includes every word in
    a statute for a purpose: see
Canada (Attorney General) v.
    JTI-Macdonald Corp.
, 2007 SCC 30, [2007] 2 S.C.R. 610, at
    para. 87. In my view, the mathematical formula provided in the Loan Agreement
    provides a rate for the purpose of s. 4.

[50]

The application judge referred to the consumer
    protection purpose of s. 4 and found, at para. 51, that [f]ormulas can be
    confusing and even misleading. In my respectful view, that statement is
    difficult to reconcile with the case law accepting the use of formulas, many of
    which are more complex and yield less certain information than the one at issue
    in this case.

[51]

For example, formulas are regularly used to determine variable rates
    of interest based upon some standard external to the agreement such as the
    prime bank rate. Such an agreement makes it impossible for the borrower to
    determine in advance the actual amount of interest the borrower would have to
    pay. Yet there seems to be no question that formulas of this nature comply with
    s. 4: see
e.g.

Continental Bank of Canada v. Poyser
(1983), 45 A.R. 305 at para. 23 (Q.B.);
Bank of Montreal v. Mangold
(1988), 86
    A.R. 215 at para. 35 (Q.B.);
Eastern Power Ltd. v.
    Ontario Electricity Financial Corp.
, 2008 CarswellOnt 5635
(S.C.),
    at paras. 281, 285-286, revd on other grounds, 2010 ONCA 467, 101 O.R. (3d) 81.
    I do not agree with the application judge, at paras. 50-52, that
Eastern
    Power
can be distinguished from this case on the basis that
    part of the formula in
Eastern Power
was
    annualized. The trial judge in
Eastern Power
based
    his ruling on the fact that the rate was easily calculable: para. 286.

[52]

Courts have also held that formulas tied to
    variable rates external to the agreement satisfy provisions similar to s. 4.
    The
Interest Act
, s. 3
    stipulates a maximum of 5% interest if no rate is fixed by the agreement or by
    law. Courts have found that formulas satisfy that provision:
Mangold
;
MacKenzie
    v. First Marathon Securities Ltd
., 2004 ABQB 834, 365
    A.R. 259. The
Bills of Exchange Act
, R.S.C. 1985, c. B-4, s. 176(1) provides that a promissory note must
    specify a sum certain in money, and again, courts have accepted formulas:
Royal Bank v. Stonehocker
(1985), 61 B.C.L.R.
    (2d) 265 (C.A.), at p. 271, leave to appeal refused, [1985] S.C.C.A. No. 65;
MacKenzie
, at para. 152. While these cases do
    not deal with the
Interest Act
, s. 4, I would
    apply the principle of statutory interpretation that presumes a harmony,
    coherence, and consistency between statutes dealing with the same subject
    matter:
R. v. Ulybel Enterprises Ltd.,
2001 SCC 56, [2001] 2 S.C.R. 867, at para. 52.

[53]

I also agree with the submission that s. 4 must be interpreted in the
    light of modern commercial reality. It has become common commercial practice
    for some commercial loans to specify that interest is to be calculated on the
    basis of 12 months of thirty days or 360 days and to provide an annualizing
    formula stating that the yearly rate is to be calculated on the basis of the
    specified rate of interest, multiplied by the number of days in the year,
    divided by 360: Alison R. Manzer & Peter Sullivan,
Canada-U.S.
    Commercial Law Guide
(Toronto: Thomson Reuters, 2017) loose-leaf,
    at para. 6.14; Bradley Crawford,
The Law of Banking and Payment in

Canada
(Toronto: Thomson Reuters, 2018) loose-leaf, at para.
    22:70.20(9). An annualizing formula may not be required for such an agreement
    to comply with s. 4 (see
V.K. Mason Construction Ltd.
    v. Bank of Nova Scotia
, [1985] 1 S.C.R. 271, at p.
    287) but if it is, the type of formula detailed above appears to comply with s.
    4: see Crawford, at para. 22:70.20(9);
Cadinha v. Chemar
    Corp
., 1995 CarswellBC 1767(S.C., in Chambers), at
    para. 19. To hold otherwise could cause significant mischief in international
    commercial arrangements.

[54]

I do not accept Solar Powers submission that this argument is not
    available on appeal because ClearFlow did not advance it before the application
    judge. Both the case law and authoritative legal texts reflect the commercial
    practice that ClearFlow and The Canadian Bankers Association rely upon. This
    is not an issue requiring evidence not led at trial or for which there is not a
    proper record before this court:
Cusson v. Quan
, 2009 SCC 62, [2009] 3 S.C.R. 712, at para. 37.

(b)

Compound interest

[55]

The application judge concluded that the formula
    fails to provide an equivalent rate or percentage of interest because it fails
    to take into account the fact that the discount fee would be compounded if the
    loan was not paid at term and subsequently renewed. In his view, the annualizing
    formula would only provide a nominal rate of yearly interest (one that does
    not take compounding into account), and not an effective equivalent rate of
    yearly interest (one that does take compounding into account).

[56]

The application judge relied upon the decision of this court in
Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills
(1991
), 3 O.R. (3d) 123. That case involved a
    promissory note that
called for interest at 2% per month,
    calculated monthly but which the parties treated as payable on the due date of
    the note. The trial judge felt compelled to hold that the note did not comply with
    s. 4. However, he wrote that this result was absurd and a miscarriage of
    justice as it was a simple matter to multiply 2% by 12 months to arrive at an
    equivalent annual interest rate of 24%. This court agreed with the trial judge
    that the promissory note did not comply with s. 4 but disagreed that this
    result was unjust, stating, at p. 126:

To simply multiply the 2 per cent by 12 months and
    show 24 per cent as an annual rate would not correctly describe the true annual
    rate intended. The annual rate of interest when compounded monthly would be
    26.8 per cent per annum. The very object of the provisions of s. 4 of the
Interest
    Act
is to make the per annum rate clear to the borrower and, in the case
    of promissory notes, to any holder in due course.

[57]

In my view, there are two significant features that distinguish
Elanco
from this case. First,
the note in
Elanco
contained no annualizing formula or other method to determine the equivalent
    annual rate. Second, as the interest was calculated monthly, interest would
    compound on a monthly basis during the term of the loan and it was possible to
    calculate an equivalent annual rate that compounding took into account when the
    borrower agreed to the terms of the loan.

[58]

The case at bar involves short term loans for which
    the discount fee does not compound during the term of the loan. The discount
    fee is added to the principal on the due date and compounding only starts if
    the loan is not paid. When the Loan Agreement and Promissory Notes were made,
    the parties could not know whether the loan would be paid on the due date. It
    was therefore impossible for them to know whether interest would ever compound.
    In these circumstances,
it was sufficient for the
    purposes of s. 4 to provide, through the annualizing formula, an equivalent
    nominal rate.

[59]

The application judge noted, at para. 62, that
    the Loan Agreement specifically contemplated loan extensions, but he failed
    to take into account that the right to renew a loan, pursuant to art. 2.1 of
    the Loan Agreement, exists only if the loan is not in default. Articles 2.4 and
    2.5 make clear that Solar Power has no right to extend the repayment date for
    the loans. The parties can only know the existence and extent of compounding of
    the discount fee after the due date. The compounding depends upon both whether
    Solar Power decides to repay or to ask ClearFlow that the due date of the loan be
    extended, and whether ClearFlow decides in its absolute and sole
    discretion...to extend the 90 or 180 day term.

[60]

It follows that whether the discount fee would
    ever compound was entirely contingent on Solar Power requesting and ClearFlow
    granting an extension of the loan at the end of its term. It was therefore
    impossible for the Loan Agreement to state an equivalent rate or percentage of
    interest that took into account compounding of the discount fee.

[61]

It cannot be the case that s. 4 is engaged when
    a lender fails to provide information that it is impossible to provide. In
Tower Paint & Laboratories Ltd. v. 126019 Enterprises Ltd.
    (Stainco Edmonton)
(1983), 27 Alta. L.R. (2d) 154 (Q.B.),
    Master Funduk stated, at p. 158:

In many instances it is not mathematically
    possible to determine the effective annual rate in advance. I do not believe
    that Parliament intended that which might be mathematically impossible to still
    be done. The laws of mathematics bow to no one.

Like Winkler J. in
Smith v.
    Canadian Tire
(1994), 19 O.R. (3d) 610 (Gen. Div.), at p.
    625, affd (1995), 26 O.R. (3d) 95 (C.A.), I agree with this statement.

[62]

To interpret s. 4 otherwise would be contrary to
    common sense, commercial reality and established principles of statutory
    interpretation. In
Potash v. Royal Trust Co.,
[1986] 2 S.C.R. 351, at p. 368, the Supreme Court held that the
Interest Act
should, where the language
    of the Act permits, prefer an interpretation that is more in keeping with
    common commercial practice. See also
NAV Canada v.
    Wilmington Trust Co
., 2006 SCC 24, [2006] 1 S.C.R.
    865, at para. 60;
Saulnier v. Royal Bank of Canada
, 2008 SCC 58, [2008] 3 S.C.R. 166, at para 42;
V.K. Mason
.

[63]

Solar Powers counsel recognized the problem of
    impossibility and, in his oral argument, maintained that to comply with s. 4,
    the Loan Agreement had to state that the discount fee would be compounded and
    payable every 90 days or compounded and payable every 180 days. There are three
    problems with that submission. First, that formulation would not provide an
    equivalent yearly rate. If it is impossible to provide an equivalent yearly
    effective rate, the only possible conclusion is that a yearly effective rate is
    not required, not that an alternative formulation will suffice. Second, if an
    alternative formulation would suffice, the Loan Agreement already provides one.
    In this sophisticated arrangement, the borrower would know from the terms of
    the agreement that if the loan is not paid at term but renewed, the discount
    fee will be added to the amount owing under the loan and will attract interest
    thereafter. Third, as interest would be calculated by reference to a period
    that is variable, depending upon the extension date, specifying one period
    would not accurately reflect the compounding.

[64]

In my view, the decision in
Smith v.
    Canadian Tire
,
distinguished by the application judge, is applicable to this case.
Smith
dealt with credit card agreements providing for interest at the rate
    of 2.4% per month calculated on the previous months balance. The agreement
    stated that the equivalent yearly rate was 28.8%, a rate that did not take into
    account the effect of compounding if the balance was not repaid each month.

[65]

Winkler J. distinguished
Elanco,
for two reasons, both of which are pertinent to this appeal.

[66]

First, in
Elanco
the
    promissory note did not disclose an equivalent annual rate. Second, the
    interest on the promissory note at issue in
Elanco
was calculated monthly. The parties did not treat the interest as
    payable monthly and it accumulated and was only payable on the due date of the
    loan. These features also distinguish
Elanco
from
    the facts of this case. The discount fee is payable at the term date of the
    loan just as the amounts owing on the credit cards in
Smith
were payable monthly. As Winkler J. observed at p. 623: in
Elanco
the effective rate could be determined
    with specificity while in the present case it clearly could not, again, a
    feature also found in the case at bar.

[67]

The application judge found
Smith
was distinguishable because the credit card agreement did provide an
    annual rate and because there was no expectation that the credit card holder
    would default in paying the monthly balance. In my respectful view, neither
    reason is convincing. The Loan Agreement does provide, through the annualizing
    formula, an equivalent annual rate and the issue, as in
Smith
, is whether that annualized rate is deficient because it fails to take
    into account the effect of compounding. As for the expectation of payment at
    term, I see no meaningful difference between this case and
Smith
. The Loan Agreement requires payment at
    term and only provides for renewal at the request of the borrower to be granted
    in the sole and absolute discretion of the lender.

[68]

My conclusion that the reasoning in
Smith
applies and that
Elanco
is distinguishable is fortified by consideration of several other
    cases dealing with s. 4 that stand for the proposition that stating an
    equivalent nominal rate may be sufficient.

[69]

Nanaimo Shipyard Ltd. v. Keith
, 2008 BCSC
    1150 dealt with an agreement providing for interest on overdue accounts at the
    rate of 2% per month (24% per annum compounded monthly). The court rejected
    the debtors argument that the rate was confusing and that the agreement did
    not comply with s. 4. The court stated, at para. 76:

[T]he cases are not concerned for the purposes of
    s. 4 with confusion of terms as long as there is a nominal interest rate
    stated. The evidence in this case does not show there would be any compounding
    except in the case of default. What is required is to have the nominal interest
    rate, which is stated in this case. A nominal interest rate is an equivalent
    rate within the meaning of s. 4

[70]

Tower Paint & Laboratories
is to the same effect
.
The Uniform Law Conference of Canada has also
    endorsed this view: see Uniform Law Conference of Canada, Civil Section,
    Working Groups
Interest Act  2008 Report
, (Quebec: ULCC Civil Section, 2008), at para. 46.

[71]

In my respectful opinion, the application judge erred in law in
    concluding that the provision for the discount fee in the Loan Agreement failed
    to satisfy the requirements of the
Interest Act
, s. 4. However, as the Promissory Notes do not contain an annualizing
    formula, they do engage s. 4.

(4)

Did the application judge err by concluding that
    the appropriate remedy is to limit all interest payable to 5%?

[72]

ClearFlow argues that even if the discount fee
    runs afoul of s. 4, the appropriate remedy is not to limit all interest payable
    under the loan documents to 5% but rather to limit the amount of interest
    payable on account of the offending provision - the discount fee - to 5%. As
    the discount fee is less that 5%, s. 4 would have no impact on the amount of
    interest payable.

[73]

As I have found that the Loan Agreement did not
    violate s. 4, it is not strictly necessary for me to deal with the issue of
    remedy in relation to the Loan Agreement. However, the issue of remedy does arise
    in relation to the Promissory Notes. Because the discount fee provision in
    those agreements does not contain an annualizing formula, the Promissory Notes
    fail to satisfy the requirements of s. 4. The issue is whether the appropriate
    remedy is to hold that as the discount fee contravenes s. 4, all interest
    payable under the Promissory Notes must be limited to 5%.

[74]

The application judge acknowledged that limiting all interest
    payable to 5% produced a draconian and harsh result. He concluded that the
    language and purpose of s. 4 compelled this result. I respectfully disagree
    with the application judges interpretation.
I agree that it is
    possible, on a strictly literal interpretation, to read s. 4 as requiring the
    draconian result reached by the application judge. However, consideration of
    all relevant principles of statutory interpretation indicates that a different
    interpretation, more in line with modern commercial reality and the
    expectations of the parties, is appropriate.

[75]

The
    Supreme Court has repeatedly held that it is necessary to consider the entire
    context before settling on what appears, at first blush, to be the plain
    meaning of a legislative provision: see
Bell ExpressVu Limited Partnership
    v. Rex
, 2002 SCC 42, [2002] 2 S.C.R. 559, at paras. 29-30,
Bristol-Myers
    Squibb Co. v. Canada (Attorney General)
, 2005 SCC 26, [2005] 1 S.C.R. 533,
    at paras. 43-44. As Iacobucci J. stated in
Rizzo & Rizzo Shoes Ltd.
    (Re)
, [1998] 1 S.C.R. 27, at para. 21, statutory interpretation cannot be
    founded on the wording of the legislation alone. An isolated plain meaning
    approach can lead courts to interpret statutes in a manner that produces absurd
    results. It is a fundamental principle of statutory interpretation that the
    legislature does not intend to produce such results:
Rizzo & Rizzo
    Shoes
, at para. 27.

[76]

Courts
    have repeatedly departed from plain meaning when interpreting legislation to
    avoid absurd results. For instance, in
NAV Canada
, the Supreme Court
    had to consider whether the legal titleholders to passenger aircraft were
    owners of those aircraft under s. 55 of the
Civil Air Navigation Services
    Commercialization Act
, S.C. 1996, c. 20. The court accepted that the plain
    meaning of owner would include the legal titleholder if s. 55 was read in
    isolation. However, the court held that the plain meaning in isolation is not
    determinative and that the provision must be considered in context, including
    the commercial context indicating that a plain language interpretation would
    cause severe disruption to the airline industry: at paras. 44-45, 60. Likewise,
    in
Bristol-Myers Squibb
, the Supreme Court rejected a plain meaning
    interpretation of s. 5(1.1) of the
Patented Medicines (Notice of
    Compliance) Regulations
, SOR/93-133, as this interpretation would lead to
    commercially absurd results that would inhibit competition in the
    pharmaceutical industry: paras. 66-68. Similarly, in
Stonehocker,
at
    p. 271, the British Columbia Court of Appeal rejected a literal interpretation
    of s. 176(1) of the
Bills of Exchange Act
that disregarded commercial
    reality.

[77]

The
    application judge emphasized the consumer protection purpose of s. 4,
    expressing the concern at para. 82 that if the 5% limit was only applied to
    the offending interest rateslenders could easily obscure the total annual
    interest rate by using a series of non-annualized loans that are individually
    less than 5%. While that may be theoretically possible, it is certainly not
    what happened in the case at bar.

[78]

In my respectful view, avoiding the possibility envisioned
    by the application judge does not require imposing a harsh and draconian result
    in the circumstances of this case where there plainly was no attempt to subvert
    the law. This case involved a commercial transaction between parties of equal
    bargaining power who inadvertently and only marginally ran afoul of s. 4. There
    was no evidence of intention to break the law, of any unfairness in the
    agreement, or of one party taking advantage of another.
To
    secure the funds it required, Solar Power knew that it had to pay a high rate
    of interest.
The discount fee represents a tiny
    fraction of the interest that is otherwise payable and falls well below the 5%
    maximum interest allowed by s. 4. To limit all interest payable to 5% would, as
    the application judge recognized, result in a substantial windfall to Solar
    Power.

[79]

The
    application judge inappropriately privileged the consumer protection purpose of
    s. 4 over the countervailing interpretative principles of fairness to the
    lender and the need to accommodate contemporary commercial practices. In
V.K.
    Mason,
Wilson J. accepted the consumer protection purpose of s. 4 but also
    found that the sophisticated commercial borrower in that case was in scant need
    of protection and that when construing s. 4, an interpretation that took into
    account the lenders legitimate interests was appropriate. Using the consumer
    protection purpose as an interpretive tool to favour a sophisticated commercial
    borrower that does not need the protection would not advance the policy of the
    law:
V.K. Mason
, at p. 287. Similarly, in
Potash
, at p. 368,
    the Supreme Court held

that provisions of the
Interest Act,
drafted
    in the 1890s, should be interpreted in keeping with common commercial
    practice and to-days commercial reality when their language so permits.

[80]

Absent
    any evidence of an attempt to circumvent the protection of s. 4, I would
    interpret the phrase any interest in s. 4 to refer only to interest that is
    not stated as a yearly rate or percentage. In the circumstances of this case,
    that would mean that the only rate of interest to which s. 4 applies is the
    discount fee. As the discount fee is less than 5% per annum, the statutory
    limit is not exceeded and the discount fee remains payable.

[81]

Reducing
    only the non-compliant rate to 5% takes into account, rather than defeats, the
    lenders legitimate expectations. As Wilson J. stated in
V.K. Mason
at
    p. 287, courts must consider these legitimate expectations in interpreting s.
    4. Reducing only the non-compliant rate to 5% appropriately interprets the
    dated text of s. 4 in accordance with contemporary commercial realities. The
    Hansard evidence indicates that Parliaments concern when it enacted the
    predecessor provision of s. 4 in 1897 was that promissory notes were stating a
    daily or weekly interest rate but not a nominal annual interest rate: see
    Canada, Parliament,
House of Commons Debates
, 8th Parl., 2nd Sess.,
    Vol. 2 (16 June 1897), at pp. 4252-4258. There is no evidence that Parliament
    turned its mind to contracts that contained multiple interest rates and
    intended the draconian result that the application judge felt compelled to
    reach. In fact, the Hansard evidence suggests that Parliament was concerned to
    achieve its consumer protection objective in a manner that avoided commercially
    absurd results: see Canada, Parliament,
Debates of the Senate
, 8th
    Parl., 2nd Sess., Vol. 1 (3 June 1897), at pp. 460-461 (Hon. Oliver Mowat).

[82]

This
    is analogous to the Supreme Courts interpretation of s. 10 of the
Interest
    Act
in
Potash
, where Wilson J. stated at p. 368 that changing
    commercial practices had resulted in a situation that Parliament had not
    envisaged in the 1890s. In that case, the Court interpreted s. 10 in a way
    consistent with contemporary commercial realities. Likewise, in
NAV Canada
,
    the Supreme Court construed narrowly a word with a broad plain meaning in part
    because simply applying the broad meaning would have disregarded commercial
    realities.

[83]

This
    interpretation means that s. 4 has no effect on the Promissory Notes. Section 4
    only prohibits charging interest
exceeding
the
    rate or percentage of five per cent per annum (emphasis added). In other
    words, s. 4 imposes a 5% annual cap on non-annualized interest but does not
    affect an interest rate that is already less than 5% when annualized. The
    discount fees yearly rate of 1.095% is significantly less than the 5% cap.
    This interpretation would also prevent lenders from employing s. 4 to increase
    a non-compliant interest rate that is less than 5% to 5% and would correspond
    with s. 3 of the Act, which fixes the rate of interest at 5% per annum only
    when no rate is fixed by the agreement.

[84]

Accordingly, I would give effect to ClearFlows
    submission that s. 4 does not limit all interest payable under the loan
    documents to 5%.

(5)

Did the application judge err in finding that
    the forbearance agreements do not preclude Solar Power from challenging the
    interest payable?

[85]

As I have found that the Loan Agreement complies
    with s. 4 and that s. 4 has no impact of the rate of interest charged under the
    Promissory Notes, it is not necessary for me to consider this issue.

DISPOSITION

[86]

For these reasons, I would allow the appeal,
    dismiss the cross-appeal and vary the application judges order by striking out
    paras. 4 and 7 (costs) and in place of para. 4, substitute a paragraph
    providing t
hat all of the interest payable under the Loan
    Agreement, the Promissory Notes and the Forbearance Agreement dated April 30,
    2017 is due and owing.

[87]

I would award costs of this appeal to ClearFlow fixed in the amount of
    $40,000 inclusive of disbursements and taxes. If the parties are unable to
    agree as to the costs of the application, they may file brief written
    submissions within 30 days of the release of these reasons.

Released: September 04, 2018

RJS

Robert J. Sharpe
    J.A.

I agree David Brown
    J.A.

I agree G.T. Trotter
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Taylor v. Workplace Safety & Insurance Board,
    2018 ONCA 771

DATE: 20180921

DOCKET: C65144

Rouleau, Benotto and Miller JJ.A.

BETWEEN

Paul Taylor

Applicant/Appellant

and

Workplace
    Safety & Insurance Board  WSIB

and

Workplace
    Safety & Insurance Appeals Tribunal -WSIAT

Respondents/Respondents

Paul Taylor, acting in person

Jean-Denis Belec, Workplace Safety and Insurance Boardl

Michael Fenrick, Workplace Safety & Insurance
    Appeals Tribunal

Heard: September 13, 2018

On appeal from the order of Justice Cynthia Petersen of
    the Superior Court of Justice, dated March 20, 2018.

REASONS FOR DECISION

[1]

The appellant appeals the dismissal of his application for judicial
    review brought against the Workplace Safety and Insurance Board (the WSIB)
    and the Workplace Safety and Insurance Appeals Tribunal (the WSIAT). The
    application related to WSIBs: 1) denial of reimbursement for non-prescription pain
    medication, 2) cessation of coverage for reimbursement of prescription
    medication, and 3) denial of benefits for certain dates in 1998.

[2]

Although the appellant had commenced an internal appeal, he also applied
    to a single judge of the Superior Court of Justice under s. 6(2) of the
Judicial
    Review Procedure Act
, R.S.O. 1990, c. J.1, on the basis of urgency, for relief
    including an order of mandamus compelling the WSIB and WSIAT to hold oral
    appeal hearings within a specific time frame.

[3]

The application judge determined there was no urgency as required by s.
    6(2) and dismissed the application. She further determined that the application
    was in any event premature as the appellant had not exhausted the
    administrative appeal process within the WSIB, or commenced an appeal to the
    WSIAT.

[4]

The appellant argues that the application judge erred in relying on
    WSIBs policy that it is incumbent on the claimant to provide medical reports
    and in concluding that WSIB acted reasonably in requesting updated medical information.

[5]

We reject these grounds of appeal and agree with the application judges
    analysis. There is no basis to interfere with the application judges finding
    that, by giving three months notice to the appellant of the need for updated
    information, WSIB acted reasonably to ensure that the requested information is
    submitted. The appellant has not identified any legal error that would permit
    appellate intervention.

[6]

At the outset of the hearing, Mr. Taylor brought a motion for an order
    permitting him to live-stream the hearing of the appeal via a Facebook page.
    Although he filed a motion in advance of the hearing, we did not receive any of
    the supporting materials before the hearing. We nevertheless heard the motion
    and dismissed it. The recording of proceedings in the courtroom is an issue
    governed by practice directives established after broad consultation. It would
    be inappropriate to depart from, or supplement, the existing directives in
    these circumstances and we declined to do so.

DISPOSITION

[7]

The motion for leave to live stream the hearing of the appeal is denied.
    The appeal is dismissed. Costs are awarded to each of the respondents in the
    amount of $750 each (for a total of $1,500), inclusive of disbursements and
    HST.

Paul Rouleau J.A.

M.L. Benotto J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Toronto (City) v. Ontario (Attorney General), 2018
    ONCA 761

DATE: 20180919

DOCKET: C65861 (M49615) and (M49624)

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

BETWEEN

City of Toronto

Respondent (Respondent by Appeal)

and

Attorney General of Ontario

Applicant (Appellant by Appeal)

AND BETWEEN

Rocco Achampong

Respondent (Respondent by Appeal)

and

Ontario (Hon. Doug Ford,
    Premier of Ontario), Ontario (Attorney General)

Applicants (Appellants by Appeal)

and

City of Toronto

Respondent (Respondent by Appeal)

AND BETWEEN

Chris Moise, Ish
    Aderonmu, and Prabha Khosla, on her own behalf and on behalf of all members of
    Women Win TO

Respondents (Respondents by Appeal)

and

Attorney General of
    Ontario

Applicant (Respondent by Appeal)

and

Jennifer Hollett, Lily
    Cheng, Susan Dexter, Geoffrey Kettel and Dyanoosh Youssefi

Respondents (Respondents by Appeal)

Robin Basu, Yashoda Ranganathan and Audra Ranalli, for
    the appellant Attorney General of Ontario

Diana W. Dimmer, Cory Lynch and Philip Chan, for the
    respondent City of Toronto

Rocco K. Achampong, Gavin Magrath and Selwyn A. Pieters,
    for the respondent Rocco Achampong

Patrick G. Duffy and Emma Romano, for intervener the
    City Clerk of the City of Toronto

Howard Goldblatt, Daniel Sheppard and Louis Century, for
    the respondents Chris Moise, Ish Aderonmu and Prabha Khosla, on her own behalf
    and on behalf of all members of Women Win TO

Donald K. Eady, Caroline V. (Nini) Jones and Jodi
    Martin, for the interveners Jennifer Hollett, Lily Cheng, Susan Dexter,
    Geoffrey Kettel and Dyanoosh Youssefi

Derek J. Bell and Ashley Boyes, for the intervener The
    Canadian Taxpayers Federation

Patrick Cotter, for the intervener Toronto District
    School Board

Heard: September 18, 2018

By the Court:

[1]

Given the urgency of this matter, an immediate decision on this stay
    motion is required to ensure that the Toronto municipal elections, set for
    October 22, 2018, proceed in as orderly a manner as possible. In the unusual
    circumstances of this case, we have decided to announce our decision without
    delay and with briefer reasons than otherwise might be expected for a matter of
    this importance.

[2]

The issue before us is whether to grant the Attorney Generals motion
    for a stay pending an appeal to this court of the order of the Superior Court
    of Justice that the relevant provisions of Bill 5, the
Better Local
    Government Act, 2018
, S.O. 2018, c. 11, infringe s. 2(b) of the
Canadian
    Charter of Rights and Freedoms
and are therefore of no force and effect:
City
    of Toronto et al. v. Ontario (Attorney General)
, 2018 ONSC 5151.

[3]

The election period for the 2018 City of Toronto municipal elections,
    based on the Citys by-laws providing for a 47-ward structure, began on May 1,
    2018. Bill 5, introduced on July 30, 2018 and given Royal Assent on August 14,
    2018, changed the course of the elections by imposing a 25-ward structure.
    Three proceedings were quickly brought to challenge the constitutionality of
    Bill 5, leading to the order at issue on this motion.

[4]

The constitutional challenges raised several grounds, but the basis for
    the application judges decision was the argument that Bill 5 infringed the s.
    2(b) freedom of expression rights of both the candidates and the voters. That
    was also the focus of this stay motion and, accordingly, will be the focus of
    our reasons. Like the application judge, we are of the view that this was the
    strongest argument the respondents advanced.

[5]

The application judge found that, although the province has plenary
    power to govern the affairs of municipalities (including municipal elections),
    by changing Torontos ward structure well after candidates had been nominated
    and had commenced campaigning Bill 5 violated the s. 2(b) freedom of expression
    rights of both the candidates and the voters. In his view, changing the ward
    structure mid-election substantially interfered with the candidates ability
    to effectively communicate his or her political message to the relevant voters
    and undermined an otherwise fair and equitable election process: paras. 32,
    34. The application judge found that Bill 5 infringed municipal voters freedom
    of expression rights by interfering with their right to vote. He characterized
    the right to vote as an expressive activity falling within the protection of
    s. 2(b) which, in his view, includes the right to effective representation: paras.
    40, 47. He found that increasing the population size of the wards from an
    average of 61,000 to an average of 110,000 denied the voters right to cast a
    vote that can result in effective representation: para. 60.

[6]

The application judge rejected the Attorney Generals submission that
    any infringement of s. 2(b) could be justified as a reasonable limit under s. 1
    and accordingly declared parts of Bill 5 to be of no force and effect.

[7]

The Attorney General has appealed the application
    judges order to this court and asks this panel to stay that order pending
    appeal. If granted, the effect of the stay would be to leave Bill 5 in place
    and require the election to proceed on the basis of a 25-ward structure.

[8]

In oral argument, counsel for the Attorney General
    stated that he had been instructed to advise this court that if a stay were
    granted, the government would not take Bill 31, the
Efficient Local
    Government Act, 2018
, currently before the Legislature, to a final vote at
    this time. Bill 31 would replace Bill 5 and include an override declaration
    pursuant to s. 33 of the
Charter
. We note that
    this undertaking was given, but add that it plays no part in our decision.

[9]

The three-part legal test for when an appellate court
    should grant a stay of a lower court decision pending an appeal is set out in
    the Supreme Court of Canadas decision in
RJR-MacDonald Inc. v. Canada
    (Attorney General)
,
[1994] 1 S.C.R. 311. Ordinarily,
the
    applicant must demonstrate that there is a serious issue to be tried; that it
    will suffer irreparable harm if the stay is not granted; and that the balance
    of convenience favours a stay pending the disposition of the appeal.

[10]

The
    minimal serious issue to be tried component of that test assumes that the
    stay will operate as a temporary measure and that the rights of the parties
    will be finally resolved when the appeal proper is heard. However,
RJR-MacDonald

recognizes
that in cases where, as a practical matter, the
    rights of the parties will be determined by the outcome of the stay motion, the
    court may give significantly more weight to the strength of the appeal: p. 338.
    In our view, this is such a case. An immediate decision is required to permit
    the Toronto municipal elections to proceed on October 22. That decision must be
    rendered now and, subject to further legislative intervention, our decision
    will determine whether the election proceeds on the basis of 25 or 47 wards. In
    these circumstances, greater attention must be paid to the merits of the
    constitutional claim and, as contemplated by
RJR-MacDonald
, we must
    ask whether there is a strong likelihood that the appeal will succeed.

[11]

The application judge was understandably motivated by the fact that
the timing of Bill 5 changed the rules for the election mid-campaign, which he
    perceived as being unfair to candidates and voters. However, unfairness alone
    does not establish a
Charter
breach.
The question for
    the courts is not whether Bill 5 is unfair but whether it is unconstitutional.
    On that crucial question, we have concluded that there is a strong likelihood
    that application judge erred in law and that the Attorney Generals appeal to
    this court will succeed.

[12]

The
    application judges interpretation appears to stretch both the wording and the
    purpose of s. 2(b) beyond the limits of that provision. His decision blurs the
    demarcation between two distinct provisions of the
Charter
: the
    protection of expressive activity in s. 2(b) and the s. 3 guarantee of the
    democratic rights of citizens to vote and be qualified for office. The s. 3
    right to vote and stand for office applies only with respect to elections to
    the House of Commons and the provincial legislatures:
Haig v. Canada
,
    [1993] 2 S.C.R. 995, at pp. 1031, 1033. Section 3 does not apply to municipal
    elections and has no bearing on the issues raised in this case.

[13]

Unquestionably, Ontarios announcement of its intention to introduce
    Bill 5 disrupted the campaigns that were already underway. However, Bill 5 does
    not limit or restrict any message the candidates wish to convey to voters for
    the remainder of the campaign. Nor does it erase messages conveyed earlier,
    although it may reduce their effectiveness. While the change brought about by
    Bill 5 is undoubtedly frustrating for candidates who started campaigning in May
    2018, we are not persuaded that their frustration amounts to a substantial
    interference with their freedom of expression. The candidates were and are
    still free to say what they want to say to the voters. The inconvenience
    candidates will experience because of the change from 47 to 25 wards does not
    prevent or impede them from saying what they want to say about the issues
    arising in the election.

[14]

There was still considerable time from the date of Bill 5s passage
    until voting day. Election campaigns inherently involve moving targets and
    changing issues that require candidates to adjust as matters proceed. Under
    Bill 5, nominations remained open until September 14, the same deadline that
    applied to the previous City elections. There is no suggestion that permitting
    nominations approximately 5 weeks before the election trammeled freedom of
    expression in any way by putting demands upon candidates who had already
    entered the race and who might need to strategically refocus their campaigns in
    response to issues raised by new candidates. In light of the time remaining for
    candidates to conduct their campaigns after its enactment, we are doubtful of
    the claim that the disruption Bill 5 caused constituted a substantial
    interference with the candidates freedom of expression.

[15]

Candidates had a reasonable expectation that they would be operating
    under a 47-ward platform when developing the messages for their campaigns.
    However, neither that platform nor that expectation was constitutionally
    guaranteed. The ward platform could be changed by by-law or by legislation. The
    decision of the Legislature to change it during the campaign was unexpected and
    perhaps alarming. But candidates have no constitutionally guaranteed right to
    the 47-ward platform, and Bill 5 does not deprive them of their constitutional
    right to say whatever they want to say about civic issues. The candidates
    right to freedom of expression does not carry with it the constitutional right
    to insist that either the City or the Province provide or maintain a platform,
    absent certain conditions that the application judge did not consider in this
    case: see
Baier v. Alberta
, 2007 SCC 31, [2007] 2 S.C.R. 673;

Haig
.
    The application judge relied on
Libman v. Quebec (Attorney General)
,
[1997] 3 S.C.R. 569, but, as explained in
Baier
, at para. 41, that
    case involved a claim to freedom from certain statutory restrictions on
    expressive activity  i.e., a negative entitlement. It did not involve a claim
    for a positive entitlement to a particular platform, as in this case.

[16]

The application judge found that because Bill 5 made the messages
    the candidates sought to convey less effective, it infringed their s. 2(b)
    rights. This proposition is not supported by the jurisprudence interpreting s.
    2(b).
Baier
and
Delisle v. Canada (Deputy Attorney General)
,
    [1999] 2 S.C.R. 989 hold that legislation that has the effect of diminishing
    the effectiveness of a message, but does not prevent the communication of that
    message, does not violate s. 2(b):
Delisle
, at paras. 40-41;
Baier
,
    at para. 48.

As the minority recognized in
Harper
    v. Canada
, 2004 SCC 33, [2004] 1 S.C.R. 827, s. 2(b) does protect the
    ability to attempt to persuade ones fellow citizens through debate and
    discussion: para 16. However, it does not follow that government measures
    which do not prevent candidates from attempting to persuade voters, but have
    the effect of making those attempts less effective at achieving their desired
    result, violate s. 2(b).

[17]

With
    reference to the s. 2(b) rights of the voters, the application judge, at paras.
    40-61, placed significant reliance on the right to effective representation,
    a concept recognized by the Supreme Court in
Reference re Provincial
    Electoral Boundaries (Saskatchewan)
, [1991] 2 S.C.R. 158. We find it
    difficult to see how the right to effective representation, which is at the
    core of s. 3, is somehow embraced by s. 2(b), which protects freedom of
    expression. Section 2(b) and s. 3 rights are distinct rights to be given
    independent meaning:
Harper v. Canada
, 2004 SCC 33, [2004] 1 S.C.R.
    877 at para. 67;
Thomson Newspapers Co. v.
Canada
    (Attorney General)
, [1998] 1 S.C.R. 877, at paras. 79-80. Moreover, as
    already noted, s. 3 of the
Charter
has no application to municipal
    elections and it does not protect them:
Haig
, at p. 1031;
Baier
,
    at paras. 38-39. While rights can overlap and a limit on the scope of one right
    should not be used to narrow the scope of another right, it does not follow
    that doctrines pertaining to s. 3 can be imported to expand the reach of s.
    2(b).

[18]

Finally,
    the application judges conclusion that Ontario substantially interfered with
    the voters right of freedom of expression when it doubled the ward population
    size from a 61,000 average to a 110,000 average cannot be supported. The size
    of the Citys electoral wards is a question of policy and choice to be
    determined by the legislative process subject to other provisions of the
Charter
,
    including s. 15(1). Whether wards of 61,000 or 110,000 are required to ensure
    effective representation is a debatable issue that cannot be determined by
    reference to the right to freedom of expression. Further, we share the
    application judges inclination that there is no infringement of s. 15(1).

[19]

Given
    our conclusion with respect to s. 2(b), it is not necessary to consider the
    application judges conclusions concerning the application of s. 1 of the
Charter
.

[20]

Our
    finding of a strong
prima facie
case on appeal bears upon the analysis
    under the second and third prongs of the
RJR-MacDonald
framework: see
RJR-MacDonald
,
    at p. 339. We recognize that in this case, Ontario does not have a monopoly on
    the public interest and that the City also speaks for the public interest.
    However, having acceded to the argument of the respondents that the more
    exacting strong likelihood of success standard should be applied and having
    reached the decision that the judgment under appeal was probably wrongly
    decided, we have no doubt that the moving party would suffer irreparable harm
    if a stay were not granted. It is not in the public interest to permit the
    impending election to proceed on the basis of a dubious ruling that invalidates
    legislation duly passed by the Legislature. We do not accept the respondents submission
    that, because Ontario exercised its legislative authority to enact Bill 5, it
    does not have clean hands and should not be entitled to the equitable relief
    of a stay from this court.

[21]

Similarly,
    the balance of convenience favours granting a stay. As the Supreme Court held
    in
Harper v. Canada (Attorney General)
, 2000 SCC 57, [2000] 2 S.C.R. 764,
at para. 9,
[c]ourts will not lightly order that laws that Parliament or a
    legislature has duly enacted for the public good are inoperable in advance of
    complete constitutional review, which is always a complex and difficult
    matter. The court then stated that only in clear cases will stays preventing
    the enforcement of a law on the grounds of alleged unconstitutionality
    succeed. Given our tentative conclusion that Bill 5 does not suffer from
    constitutional infirmity, we have no hesitation in finding that the balance of
    convenience favours granting a stay.

[22]

The
    respondents insist upon the unfairness in the timing of Bill 5 and point to the
    uncertainty it has created. However, as noted by the application judge, at
    para. 30, the court challenge has exacerbated the difficult timeline the City
    Clerk faces in making the necessary preparations for the election. The City
    Clerk took steps to implement a 25-ward election upon the passage of Bill 5 and
    then reverted to plans for a 47-ward election after the application judges
    order. The City Clerk has indicated that she has done all she can in the
    circumstances to prepare for either a 25 or 47 ward election and, provided the
    issue is resolved promptly, an election on either basis remains possible. The
    respondents claim to succeed on the balance of convenience is untenable.

[23]

For
    these reasons, the order of the Superior Court is stayed.

[24]

The
    City Clerk and the Attorney General ask this court to make certain ancillary
    orders required to conduct the election in an orderly manner. The City of
    Toronto indicated that it would not oppose those orders if a stay were granted.
    We are prepared to make the orders sought, subject to any further submissions
    as to the necessary details, and we remain seized of the matter for that
    purpose.

Released:  AH  SEP 19 2018

Alexandra Hoy
    A.C.J.O.

Robert Sharpe J.A.

Gary Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Wiles v. Sun Life Assurance Company of Canada, 2018
    ONCA 766

DATE: 20180919

DOCKET: C65114

Rouleau, Benotto and Miller JJ.A.

BETWEEN

Teresa Wiles

Plaintiff (Appellant)

and

Sun Life Assurance Company of Canada and Spaenaur
    Inc.

Defendants (Respondents)

Brian A. Pickard and William C. Cline, for the appellant

Stephen H. Shantz, for the respondents

Heard and released orally: September 13, 2018

On appeal from the judgment
    of Justice Gerald E. Taylor of the Superior Court of Justice dated February 15,
    2018, with reasons reported at 2018 ONSC1090.

REASONS FOR DECISION

[1]

The appellant argues that the application judge erred in finding that
    the action was barred by a limitation period. In her submissions, the appellant
    maintains that this was an error and it infected the relief from forfeiture
    analysis regarding her late filing with the insurer of her LTD claim.

[2]

We disagree. Although the respondent concedes that the application judge
    erred in his finding that the action was barred by a limitation period, the
    respondent maintains that the analysis of the relief for forfeiture issue which
    followed stands independent and separate from the limitation disposition.

[3]

From our reading of the reasons, the application judges analysis
    discloses no such tainting. We also disagree with the appellants suggestion
    that the application judge erred in the exercise of his discretion in
    determining whether relief should be granted. The application judge correctly
    identified the legal principles that apply and his findings on the record that
    he had before him were available and are owed deference in this court.

[4]

For these reasons, the appeal is dismissed. Costs to the respondent
    are fixed in the amount of $5,000 inclusive of HST and applicable taxes.

Paul
    Rouleau J.A.

M.L.
    Benotto J.A.

B.W.
    Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Wilson v. Fatahi-Ghandehari, 2018 ONCA 728

DATE: 20180904

DOCKET: M49391 (C64926)

Lauwers, Miller and Nordheimer JJ.A.

BETWEEN

Stewart Wilson

Appellant

and

Sara Fatahi-Ghandehari

Respondent / Moving Party

The appellant, in person

Amar Mohammed, for the respondent, moving party

Heard: August 29, 2018

On appeal from the
orders of Justice Price of the Superior Court of Justice, dated January 11, 2018,
and
January 26, 2018 fixing costs, with
reasons reported at
2018 ONSC
669.

REASONS FOR DECISION

[1]

The respondent, Sara Fatahi-Ghandehari, moves to quash the appeal or, in
the alternative, moves for security for costs. The appellant asked for an adjournment
to a date when his previous counsel, Paul Robson, would be available after
serving his suspension from practice.

[2]

At the conclusion of the oral hearing we refused the adjournment request
and quashed the appeal, with reasons to follow. These are the reasons for our
decision.

[3]

The appellant, Stewart Wilson, has served four notices of appeal. The
first, dated November 10, 2017, was in respect of Price J.s decision on
October 10, 2017, with reasons reported at 2017 ONSC 6034, in which he found
the appellant in contempt. According to r. 61.04 of the
Rules of Civil
Procedure
, R.R.O. 1990, Reg. 194, the appellant was obliged to appeal the
October 10, 2017 decision within 30 days. Arguably, had he filed this notice of
appeal, the appeal would have been timely, but it was not filed with the court.

[4]

The second notice of appeal, dated January 26, 2018, appealed the
October 10, 2017 contempt finding. It was out of time and the appellant did not
seek an extension of time to appeal under r. 3.02(1) of the
Rules of Civil
Procedure
and the well-known principles in
Rizzi v. Mavros
,
2007 ONCA 350, 85 O.R. (3d) 401. This
is also true of the third notice, which was the amended notice of appeal dated
January 31, 2018.

[5]

The appellant then served and filed a fourth notice of appeal, which is the
operative notice for our purposes. This is the second amended notice of appeal
dated January 31, 2018, which was filed with a certificate respecting evidence
dated February 7, 2018. This notice was amended from the earlier version to
delete the appeal of the October 10, 2017 contempt finding. No explanation has
been provided for this change. However, the second paragraph of the amended
notice ASKS that the said Orders of Price J., finding the Appellant in
contempt  be set aside. This paragraph refers to the orders of January 11,
2018, and January 26, 2018, neither of which makes a contempt finding.

[6]

The respondents motion to quash the appeal is brought on the basis that
the January 11, 2018 order is interlocutory, because it deals not with the
actual finding of contempt but with the procedural consequences of that finding
and the appellants ongoing unpurged contempt. This court has no jurisdiction
over interlocutory orders, which must be appealed to the Divisional Court under
s. 19(1) of the
Courts of Justice Act
,
R.S.O. 1990, c C.43
. The courts Chief Legal Officer wrote to Mr.
Robson to advise him of this issue, as is the courts practice, but she was
rudely rebuffed.

[7]

We agree
with the
respondent that the operative amended notice of appeal is expressly limited to
the January 11, 2018 order
, which is
interlocutory. This court has no jurisdiction over the January 11, 2018 order.
We therefore quashed the appeal.

[8]

The respondent also sought to quash the costs appeal. In
order to appeal the costs order of January 26, 2018, the appellant is obliged
to seek leave to appeal costs but did not do so.
We quashed the costs appeal on the basis that the appellant did not
seek leave to appeal costs.

[9]

As for the argument that
the appellants real appeal is of the contempt order of October 10, 2017, which
is a final order, we observe again that the appellant is well out of time for
that appeal and has not brought a motion for an extension of time to appeal.
The appellant
has
taken no steps to
settle the terms of the October 10, 2017 contempt order, or to perfect his
appeals of the January 11, 2018 order, and the January 26, 2018 costs order. In
our view the appellants failure to attend to these appeals after such a long
passage of time is procedurally abusive.

[10]

The record amply shows
that the appellant has made a procedural morass of this case. The record of
non-compliance with customary practice and the rules is so egregious that there
is no explanation that the appellant or Mr. Robson could provide that would
excuse it. On this basis we refused the adjournment.

[11]

Given the history of
this proceeding, we would quash the appeal even if the order under appeal were
final, in the exercise of our inherent jurisdiction to control the process of
the court and to prevent its abuse: see
Oelbaum v. Oelbaum
, 2011 ONCA 300, 94 R.F.L. (6th) 251. This
jurisdiction is also recognized in s. 140(5) of the
Courts of
Justice Act
.

[12]

The appeal is quashed. We
fix the costs of this motion at $1,000 payable forthwith by the appellant to
the respondent.

P.
Lauwers J.A.

B.W.
Miller J.A.

I.V.B.
Nordheimer J.A.