COURT OF APPEAL FOR ONTARIO

CITATION: Intact Insurance Company v. Allstate Insurance
    Company of Canada, 2016 ONCA 609

DATE: 20160804

DOCKET: C61124

Sharpe, LaForme and van Rensburg JJ.A.

BETWEEN

Intact Insurance Company

Applicant (Respondent)

and

Allstate Insurance Company of Canada

Respondent (Appellant)

Todd J. McCarthy and Frank A. Bennedetto, for the
    appellant

Douglas A. Wallace and Tori Chapman, for the respondent

Heard: April 21, 2016

On appeal from the order of Justice Russell M. Raikes of
    the Superior Court of Justice, dated July 2, 2015, with reasons reported at 2015
    ONSC 4264, 51 C.C.L.I. (5th) 231, allowing an appeal from the award of
    Arbitrator Kenneth J. Bialkowski, dated October 16, 2014, with reasons reported
    at (2014), 40 C.C.L.I. (5th) 323.

H.S. LaForme J.A.:

[1]

Either the appellant,
Allstate Insurance
    Company of Canada (Allstate), or the respondent, Intact Insurance Company
    (Intact), is responsible for statutory accident benefits owed to Paula
    Chartrand and
her two daughters (the Claimants) after they
    were injured in an accident on August 21, 2010. Who bears that responsibility depends
    on the answer to the central question in these proceedings: were the Claimants
    principally dependent for financial support on Kyle Houghton at the time of the
    accident?

[2]

The parties submitted their priority dispute
    to an arbitrator, who decided that the Claimants were not principally dependent
    for financial support on Kyle at the time of the accident. Therefore, Intact
    was responsible for the accident benefits. The arbitrator summarized his
    rationale as follows:

In the final analysis I find that it would be inappropriate to
    use the seven week period pre-accident, when the claimants were principally
    dependent on Kyle Houghton for financial support,
as in
    my view the relationship was not one of permanence
. Using the
    traditional 12 month period pre-accident the claimants clearly were not
    principally financially dependent on Kyle Houghton for financial support.
[Emphasis added.]

[3]

Intact appealed. The appeal judge concluded that
    the arbitrator had committed an error of law by importing a permanency
    requirement into the analysis and an error in principle by speculating about
    future events. Because of these errors, the appeal judge reviewed the
    arbitrators decision on a correctness standard of review, set aside his
    decision, and concluded that Allstate was responsible for paying the accident
    benefits owed to the Claimants.

[4]

Allstate sought and obtained leave to appeal to
    this court. It argues that the appeal judge erred by reviewing the arbitrators
    decision on a correctness standard and that the arbitrators decision should be
    restored because it was reasonable. Intact resists both arguments and submits
    that the appeal judge did not err by setting aside the arbitrators decision.

[5]

For the reasons that follow, I would dismiss the
    appeal. Although the appeal judge erred by reviewing the arbitrators decision
    on a correctness standard, the arbitrators decision was an unreasonable one
    and, therefore, should not be restored.

I.

BACKGROUND

[6]

The relationship between Paula and Kyle forms
    the factual background for this priority dispute.

[7]

Until January 2010, Paula was living in Sudbury,
    Ontario, with her husband, Yvan Restoule, and her two daughters, Destiny
    Chartrand and Athena Restoule.

[8]

In January or February 2010, Paula began working
    at the Triple Play Sports Bar in Sarnia, Ontario. She met and began dating Kyle
    at the same time.

[9]

Between February and June 2010, Paula would
    spend three weeks of each month in Sarnia. She would spend the remaining week in
    Sudbury with Yvan and her daughters at their apartment.

[10]

Paula decided to leave Yvan and move to Sarnia
    with her daughters in June 2010. In early July, Paula asked her mother to drive
    her and her daughters from Sudbury to Parry Sound where they met Kyle at a gas
    station. They transferred their belongings to Kyles vehicle, including their
    clothes, toys, blankets, and sheets. Kyle brought the Claimants back to his
    house in Sarnia.

[11]

The evidence indicated that the move was
    intended to be a permanent one. Yvan testified that his relationship with Paula
    had been deteriorating for a while, and that she told him that she would be
    leaving him and permanently moving to Sarnia with her daughters. Paulas mother
    said that she thought the move was a permanent one.

[12]

Kyle acknowledged, as noted by the arbitrator,
    that he did not know if his relationship with Paula would survive and said that
    you hope for the best and expect the worst. Essentially Kyle was
    acknowledging that he could not predict what would happen in the future,
    especially given that his relationship with Paula had started only recently.
    However, on the whole, his evidence also confirmed that the Claimants move was
    intended to be a permanent one. According to Kyle, the plan was that Athena and
    Destiny would be enrolled in school in Sarnia in September and that Paula would
    look for a job at that time. There was some discussion of Paula and Kyle
    getting married as well.

[13]

After their move to Sarnia, Kyle was responsible
    for most of the Claimants expenses as Paula was not contributing to household
    expenses or paying any of the bills. She would occasionally buy some groceries
    or alcohol, or would pay for a dinner. During the seven weeks after the move
    and before the accident, Kyle paid for at least 64 percent of the Claimants
    financial needs.

[14]

On August 18, 2010, Paulas friend drove the
    Claimants to Canadas Wonderland and then
to Sudbury, to
    visit Paulas mother and to retrieve the rest of their belongings
. On their way back to Sarnia, on August 21, 2010, they were
    involved in an accident. Paula suffered relatively minor injuries, but Destiny
    and Athena sustained catastrophic injuries.

[15]

The Claimants applied for and received accident
    benefits from Intact, the insurer of the vehicle they were riding in at the
    time of the accident. However, Intact argued that Allstate, who insured two
    vehicles owned by Kyle, should pay those benefits. Intact took the position
    that Allstate was obligated to pay because the Claimants were dependent on Kyle
    at the time of the accident and, consequently, they were insureds under
    Allstates policies with Kyle.

II.

Legal framework

[16]

Section 268 of the
Insurance Act
,
    R.S.O. 1990, c. I-8, deals with statutory accident benefits in motor vehicle
    liability policies. Section 268(1) provides that every such policy shall be
    deemed to provide forstatutory accident benefits.  For cases where an
    individual might seek benefits under more than one policy, s. 268(2) sets out
    priority rules. As the Claimants were occupants of a vehicle at the time of the
    accident, the following rules apply:

(i)      the occupant has
    recourse against the insurer of an automobile in respect of which the occupant
    is an insured;

(ii)      if recovery is
    unavailable under (i), the occupant has recourse against the insurer of the
    automobile in which he or she was an occupant;

(iii)     if recovery is
    unavailable under (i) or (ii), the occupant has recourse against the insurer of
    any other automobile involved in the accident from which the entitlement to
    statutory accident benefits arose; and

(iv)     if recovery is
    unavailable under (i), (ii) or (iii), the occupant has recourse against the
    Motor Vehicle Accident Claims Fund.

[17]

Section 2(1)
of the
Statutory Accident Benefits Schedule  Accidents
    on or after November 1, 1996
, O. Reg. 403/96 (
SABS
), provides that any dependant of the named insured is an
    insured person for any motor vehicle policy. Section 2(6) of the same
    regulation provides that a person is dependent on another
if the person
    is principally dependent for financial supporton the other person.

[18]

Also
    relevant for this appeal is
Disputes Between Insurers
, O. Reg. 283/95
    (the Regulation). It provides that all disputes under s. 268 shall be settled
    through arbitration conducted in accordance with the
Arbitration Act, 1991
,
    S.O. 1991, c. 17.

[19]

Section
45 of the
Arbitration Act, 1991
provides that, presumptively, parties can appeal only on points of law with
    leave. However, the parties can provide for broader rights of appeal in their
    arbitration agreement. In this case, Allstate and Intact agreed that either
    could appeal the Arbitrators decision on a point or points of law or mixed
    fact and law to a judge of the Superior Court of Justice.

III.

Issues on appeal

[20]

Intact
    argues that the appeal judge erred by (i) reviewing the arbitrators decision for
    correctness; and (ii) setting aside the arbitrators decision even though it
    was reasonable. As noted, I accept the first argument but not the second. I
    will first address the standard of review. Then I will explain why the
    arbitrators decision was unreasonable.

IV.

THE STANDARD OF REVIEW

[21]

The
    parties disagreement is founded upon their conflicting characterization of the
    question before the appeal judge. Allstate argues that determining dependency
    for purposes of
SABS
is a mixed fact and law exercise and, therefore,
    the appeal judge should have applied a deferential standard of review. Intact,
    on the other hand, insists that the arbitrator committed an extricable legal
    error and so his decision was properly reviewed on a correctness standard.

[22]

I
    approach this question in a different way than the parties. As the choice of
    standard of review is a question of law, this court is not bound by the
    parties positions and must determine the correct standard of review:
Monsanto
    Canada Inc. v. Ontario (Superintendent of Financial Services)
, 2004 SCC
    54, [2004] 3 S.C.R. 152, at para. 6.

[23]

I
    begin by considering the framework for choosing the appropriate standard of
    review. Then I will apply that framework to determine the standard of review
    that should be applied by this court and the one that should have been applied
    by the appeal judge.

(1)

The Framework for Determining the Standard of Review

[24]

There are two different frameworks for
    determining the standard of review on an appeal:
(i)
the appellate framework articulated in
Housen v.
    Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235; and (ii)
the
    administrative law framework associated with
Dunsmuir v. New Brunswick
,
    2008 SCC 9, [2008] 1 S.C.R. 190.

[25]

In my view, the administrative law framework must be applied to
    determine the standard of review on an appeal from an insurance arbitration. In
    general, decisions rendered by non-judicial decision makers should be reviewed
    under that framework, even when that review is styled as an appeal.

[26]

The Supreme Court recently discussed the
    selection of the appropriate framework in
Mouvement laïque québécois
    v. Saguenay (City)
, 2015 SCC 16, [2015] 2 S.C.R. 3.
    Justice Gascon highlighted the distinction between the two frameworks and concluded
    that the Quebec Court of Appeal had erred by applying the appellate framework
    to appeals from the Quebec Human Rights Tribunal. At para. 38, he held that
    whenever a court reviews a decision of a specialized administrative tribunal, whether
    on a judicial review or a statutory appeal, the standard of review must be
    determined on the basis of administrative law principles
.
[1]

[27]

At paras. 39-42 of
Saguenay,
Gascon J. provided the following reasons for why the administrative
    law framework should have been applied: the Tribunal was not a court subject to
    the
Courts of Justice Act
, C.Q.L.R., c. T-16, but
    rather a specialized decision maker; the Tribunal had its own, different
    procedure that reflected its function; and the Tribunals enabling legislation
    contained a privative clause and a supporting clause that protected the
    Tribunals jurisdiction.

[28]

The analysis from
Saguenay

leads to the same result in this case, namely that the
    administrative law framework must be applied to determine the standard of
    review.

[29]

Insurance arbitrations are not court proceedings.
    Rather, as a result of the Regulation, priority disputes like this one are
    adjudicated by arbitrators with relevant expertise:
Oxford Mutual
    Insurance Co. v. Co-operators General Insurance Co.
(2006),
    83 O.R. (3d) 591 (C.A.),

at para. 23
;
Chisholm v. Liberty
    Mutual Group
(2002), 60 O.R. (3d) 776 (C.A.), at para. 21.

[30]

In addition, the Regulation has put in place a
    distinct regime that efficiently resolves priority disputes between insurers
    while ensuring that beneficiaries receive their benefits promptly:
Lombard
    Canada Ltd. v. Royal & SunAlliance Insurance Co.
(2008), 94 O.R. (3d) 62 (S.C.), at para. 39.

[31]

The limited rights of appeal that presumptively
    apply in arbitrations are similar to a privative clause. More broadly, arbitrations
    governed by the
Arbitration Act, 1991
occur
    against the background of a tightly defined regime under which judicial
    intervention is generally unwarranted:
Ottawa (City) v. Coliseum
    Inc.,
2016 ONCA 363,

85 C.P.C. (7th) 213, at paras. 32-34.

[32]

Therefore
, I conclude that
the standard of review applicable in this case must be determined
    by applying administrative law principles.

(2)

The Role of this Court

[33]

This court must apply the appellate standard of
    review to the appeal judges decision and review his choice of standard of
    review for correctness:
Dr. Q v. College of Physicians and Surgeons
    of British Columbia
, 2003 SCC 19, [2003] 1 S.C.R. 226, at
    para. 43. In other words, this court should determine if the appeal judge
    identified the correct standard of review and whether he applied it properly:
Agraira
    v. Canada (Public Safety and Emergency Preparedness)
,
    2013 SCC 36, [2013] 2 S.C.R. 559, at paras. 45-47.

(3)

Standard of Review on Appeal from Insurance
    Arbitration to Superior Court

[34]

Recently, in
Intact Insurance Company v. Old Republic
    Insurance Company
, 2016 ONSC 3110, at para. 15, Goldstein J. observed that
    the standard of review on appeals from insurance arbitrations has been the
    subject of a spirited debate and extensive analysis in the Superior Court. In
Zurich
    Insurance Co. v. Personal Insurance Co.
(2009), 73 C.C.L.I. (4th) 301
    (Ont. S.C.), Brown J. (as he then was) reviewed the jurisprudence on this
    issue, demonstrating the different, and arguably inconsistent, results reached
    by different judges.

[35]

Generally, determining whether a person is
    principally dependent on another is a question of mixed fact and law:
Oxford
    Mutual,
at para. 23. Such questions are presumptively
    reviewed for reasonableness:
Tervita Corp. v. Canada (Commissioner
    of Competition)
, 2015 SCC 3, [2015] 1 S.C.R. 161, at
    para. 40. And this court has already confirmed that, on appeals from insurance
    arbitrations involving an interpretation of dependency under
SABS
, mixed fact and law questions are reviewed for reasonableness:
Oxford
    Mutual
, at para. 23.

[36]

Intact, however, argues that the arbitrator
    committed an extricable legal error by importing a permanence requirement. I
    note that it is possible to extricate a legal question from a question of mixed
    fact and law under the administrative law framework:
Rogers
    Communications Inc. v. Society of Composers, Authors and Music Publishers of
    Canada
, 2012 SCC 35, [2012] 2 S.C.R. 283, at para. 20. However,
    this court has not addressed the standard of review for a question of law on appeals
    from an insurance arbitration. Therefore, assuming that an extricable legal
    question can be identified in this case, we must determine the standard of
    review that should be applied to that extricated legal question.

[37]

Dunsmuir
, at para. 62, provides a
    two-step process for determining the standard of review under administrative
    law principles:

First, courts ascertain whether the
    jurisprudence has already determined in a satisfactory manner the degree of
    deference to be accorded with regard to a particular category of question.
    Second, where the first inquiry proves unfruitful, courts must proceed to an
    analysis of the factors making it possible to identify the proper standard of
    review.

[38]

Before turning to the two steps, I note that the
    category of question should not be construed broadly as just a question of
    law. Rather, the category must be determined more precisely in light of the
    issues raised on appeal or application for judicial review. For instance, in
Dunsmuir
, the court considered the standard of review for an adjudicators
    interpretation of the [
Public Service Labour Relations Act
], in particular ss. 97(2.1) and 100.1, and s. 20 of the
Civil
    Service Act
: para. 65.

[39]

In this case, we must determine t
he standard of review for an insurance arbitrators interpretation
    of
SABS
and, in particular, the meaning of
    dependency for purposes of that regulation.

(a)

Prior Jurisprudence

[40]

In my view, the existing jurisprudence has
    settled the standard of review in such cases and the reasonableness standard
    applies.

[41]

Justice Rothstein in
Sattva Capital Corp. v. Creston Moly
    Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 106,
    stated that

[i]n the context of commercial arbitration, where appeals are
    restricted to questions of law, the standard of review will be reasonableness
    unless the question is one that would attract the correctness standard, such as
    constitutional questions or questions of law of central importance to the legal
    system as a whole and outside the adjudicators expertise. [Citation omitted.]

[42]

In
Coliseum
,
    this court followed
Sattva
and applied the
    reasonableness standard to an appeal from an arbitration governed by the
Arbitration
    Act, 1991
. As noted, under the Regulation, the
Arbitration
    Act, 1991
governs insurance arbitrations and appeals from
    those arbitrations.

[43]

I note that the parties arbitration agreement
    provides that they can appeal on both points of law and mixed fact and law.
    Unlike in
Sattva
, the parties are not
    restricted to appealing on questions of law only. However, in my view, that
    does not make the decision in
Sattva
inapplicable.

[44]

In
Sattva
, at
    para. 105, Rothstein J. identified a number of reasons why a reasonableness
    standard should apply: a presumption that the arbitrator will have relevant
    expertise, jurisprudence regarding non-judicial decision-makers, and the
    limited scope of appellate review of arbitral decisions. The broader right of
    appeal available to the parties in this case displaces none of those reasons. Significantly,
    the parties right to appeal is still comparatively restricted as they cannot
    appeal on points of fact.

[45]

The question at issue
    here  determining dependency for purposes of
SABS
and insurance priority disputes  does not
    rebut the presumption of reasonableness review established in
Sattva
. It is not a question of jurisdiction, a
    constitutional question, or a general question of law that is of central
    importance to the legal system as a whole and outside the
adjudicators
    expertise
.

(b)

Contextual Analysis

[46]

In any event, the conclusion that a
    reasonableness standard of review applies is confirmed by the second step,
    which has been called a contextual analysis in the post-
Dunsmuir
jurisprudence:
Nor-Man Regional Health Authority Inc. v.
    Manitoba Association of Health Care Professionals
, 2011
    SCC 59, [2011] 3 S.C.R. 616, at para. 39. The analysis at this second stage is
    driven by the nature of the issue before the decision maker under review.
    Factors considered include the presence or absence of a privative clause, the
    specialization of the decision maker, and the nature of the question under
    review:
Canada (Canadian Human Rights Commission) v. Canada
    (Attorney General)
, 2011 SCC 53, [2011] 3 S.C.R. 471 (
Mowat
), at para. 16.

[47]

As a starting point, there is a presumption that
    a reasonableness standard of review will apply where a decision maker is
    interpreting its home statute or statutes closely connected to its function:
McLean
    v. British Columbia (Securities Commission)
, 2013 SCC 67,
    [2013] 3 S.C.R. 895, at para. 21. As noted, insurance arbitrators are
    recognized as having expertise and experience in interpreting insurance laws;
    as such, the presumption applies here.

[48]

Limitations on parties appeal rights  which
    have the same effect as privative clauses  will differ from case to case since
    appeal rights may be determined by the parties arbitration agreement. However,
    the jurisprudence has reduced the importance of privative clauses and,
    therefore, the absence of limits on appeal rights in a particular case will not
    be important:
Mowat
, at para. 17.

[49]

The expertise of insurance arbitrators favours a
    reasonableness review. Courts have recognized the expertise of insurance arbitrators
    in a number of different contexts:
Chisholm
, at
    para. 21;
Ayr Farmers Mutual Insurance Company v. Wright
, 2015 ONSC 6219, at paras. 10-11;
Aviva Insurance Co. of
    Canada v. Royal & SunAlliance Insurance Co.
(2008),
    66 C.C.L.I. (4th) 262 (Ont. S.C.); and
Oxford Mutual
, at para. 23.

[50]

Moreover, as with other private arbitrations,
    the fact that parties are able to select their decision maker creates a
    presumption that they will choose someone with relevant expertise:
Sattva
, at para. 105. As noted by Strathy J. (as he then was) in
Lombard
    Canada Ltd.
, at para. 41,

[a]lthough the selection of the tribunal is
    left entirely to the private choice of the parties, and is not a creation of
    the Regulation, the reality is that the parties  automobile insurers  are
    highly sophisticated litigants, represented by specialist counsel, and they
    invariably select arbitrators who are themselves accomplished, experienced and
    respected.

[51]

Finally, the nature of the question under review
    also suggests that a reasonableness standard of review applies. The nature of
    the question has rebutted the presumption of reasonableness review in two kinds
    of cases. The first is where the decision maker at issue and the courts share
    jurisdiction over the same legal question at the first instance:
McLean
, at para. 24. The second is where the question is one of those
    exceptional kinds of questions  questions of jurisdiction, constitutional
    questions, or general questions of law that are both of central importance to
    the legal system as a whole and outside the adjudicators specialized area of
    expertise  where courts will apply a correctness standard of review:
McLean
, at paras. 25-26.

[52]

Courts and arbitrators do not share jurisdiction
    over priority disputes at the first instance; under the Regulation, an
    arbitrator must hear those disputes before they are potentially appealed to a
    court. And, as noted, the interpretation of
SABS
is not the kind of exceptional question that can rebut the
    presumption of reasonableness review.

(c)

Conclusion on Standard of Review on Appeal to Superior
    Court

[53]

In
    general, an appeal to the Superior Court from an insurance arbitration
    regarding a priority dispute will engage questions of mixed fact and law that
    must be reviewed for reasonableness. Even if the appeal involves an extricable
    question of law regarding
SABS
, a reasonableness standard of review
    will still generally apply. In the unlikely scenario that the issue before the
    insurance arbitrator is an exceptional question (one of jurisdiction, a
    constitutional question, or a general question of law that is both of central
    importance to the legal system as a whole and outside the adjudicators
    specialized area or expertise), a correctness standard of review may be
    applicable.

[54]

In
    this case, there was no basis for applying a correctness standard of review.
    Therefore, this court must correct the appeal judges error by reviewing the
    arbitrators decision under a reasonableness standard:
Dr. Q
, at para.
    44. I now turn to the arbitrators decision.

V.

the Arbitrators Decision Was UnReasonable

[55]

As
    noted, in my view, the arbitrators decision was unreasonable. To explain my
    conclusion, I will first summarize the arbitrators reasoning process and
    decision. Then I will outline principles relevant to conducting a
    reasonableness review. Finally, I will explain why the arbitrators decision
    was unreasonable.

(1)

The Arbitrators Decision

[56]

After reviewing the evidence, the arbitrator
    correctly identified the applicable legal principles, articulated in this
    courts decisions in
Miller v. Safeco Insurance Co. of America
(1985), 50 O.R. (2d) 797 (C.A.), affing, 48 O.R. (2d) 451
    (H.C.J.), and
Oxford Mutual
. He summarized
    these principles as follows:

(a) The 51% principle from
Liberty
    Mutual Insurance v. Federation Insurance
should be
    applied. It is not sufficient that the claimant simply be dependent, but rather
    must be principally dependent. If the claimant had sufficient resources to fund
    51% of their financial needs then the person could not be dependent upon
    others.

(b) The time frame to be looked at may
    encompass days, weeks or even years. One does not simply look at a "snap
    shot" of the actual day of the Accident to determine the issue of
    dependency.

(c) The factors from
Miller v.
    Safeco
should be considered:

(i) the duration of the dependency

(ii) the amount of dependency

(iii) the financial or other needs of the
    alleged dependent

(iv) the ability of the alleged dependent
    to be self-supporting.

(d) Each case must be factually driven.

(e) The ability to be self-supporting must be
    taken into account when measuring dependency.

[57]

The arbitrator had evidence relating to two
    different time frames before him. He was satisfied that if he were to look at
    the seven-week period before the accident then the Claimants were financially
    dependent on Kyle; on the other hand, if he looked at a year-long period before
    the accident, they were not. As the arbitrator observed, the result in this
    case is totally dependent on the appropriate time frame to use for the
    calculation of financial dependency.

[58]

Then, turning to the jurisprudence he considered
    relevant, the arbitrator observed that courts and arbitrators have struggled
    when asked to determine financial dependency in cases involving new
    relationships or relationships that have experienced a significant change in
    the recent past. The arbitrator acknowledged that other arbitrators and courts
    had considered a short time frame in some cases. The arbitrator thought that
    there was a rule or principle that he could draw from these cases:

The common theme through these cases where a
    short time frame was considered appears to be that each arbitrator wrestled
    with the question as to whether the relationship existing during that period
    was of permanence and likely to continue into the future or was it
    transitional. The same analysis must be done here.

[59]

Then the arbitrator made the following
    conclusion as to the time frame in which to consider whether the Claimants were
    financially dependent on Kyle:

On the evidence before me Intact has failed to satisfy the onus
    upon it to establish the relationship between [Kyle] and [Paula] was on the
    balance of probability likely to be permanent. As a result I find that a seven
    week time frame for the analysis of financial dependency is inappropriate. Accordingly,
    one must look at the big picture.

[60]

After looking at the big picture, the arbitrator
    concluded as follows:

What we have here is a case complicated by
    relationships involving people on the fringe of society, stripping,
    prostitution, addiction, depression, criminality and CAS involvement. There is
    no hallmark of stability. The closest thing to stability is Paulas on and off
    relationship (mainly on) with [Yvan]. This would encompass a period of several
    years and certainly the better part of the 12-month period pre-accident. In my
    view this better represents the "big picture" and true nature of the
    relationship. Paula and Yvan had separated before but Paula returned. During
    the 12 month period pre-accident that I have chosen as the appropriate
    timeframe for analysis the three claimants were
not
principally dependent for financial support on Kyle. [Emphasis in
    original.]

[61]

I note that the parties disagree on exactly what the arbitrator
    did in this case. Allstate argues that he looked at all of the evidence and
    came to a decision about the appropriate timeframe based on the facts as a
    whole. Intact, on the other hands, submits that he created a permanency
    requirement and that this was the only basis for his decision.

[62]

I agree with Intacts characterization of the decision. As noted,
    the arbitrator chose the year-long period solely because, in his view,

it would be inappropriate to use the seven week period
    pre-accidentasthe relationship was not one of permanence. Therefore, it is
    that rationale and the resulting outcome that must be reviewed for
    reasonableness.

(2)

Reasonableness Review

[63]

In
Dunsmuir
, at
    para. 47, Bastarache and LeBel JJ. explained that

[a] court conducting a review for
    reasonableness inquires into the qualities that make a decision reasonable,
    referring both to the process of articulating the reasons and to outcomes. In
    judicial review, reasonableness is concerned mostly with the existence of
    justification, transparency and intelligibility within the decision-making
    process. But it is also concerned with whether the decision falls within a
    range of possible, acceptable outcomes which are defensible in respect of the
    facts and law.

[64]

When reviewing a decision for reasonableness, a
    court must consider the reasons proffered and the substantive outcome in light
    of the legal and factual context in which the decision was rendered:
Re
    Carrick,
2015 ONCA 866, 128 O.R. (3d) 209, at paras.
    25-26;
Loewen v. Manitoba Teachers Society
,
    2015 MBCA 13, 315 Man. R. (2d) 123, at paras. 74-75.

[65]

A decision may be unreasonable where a decision maker fails to carry
    out the proper analysis or where the decision is inconsistent with underlying
    legal principles:

Halifax (Regional
    Municipality) v. Canada (Public Works and Government Services)
, 2012 SCC 29, [2012] 2 S.C.R. 108, at paras. 43 and 47. A decision
    may also be unreasonable where the outcome ignores or cannot be supported by
    the evidence:
Halifax
, at paras. 47-49.

(3)

The Arbitrators Decision was Unreasonable

[66]

With the principles just noted in mind, I turn
    to the ultimate issue in this appeal: the reasonableness of the arbitrators
    decision. That decision was unreasonable for two reasons. First, the arbitrator
    failed to conduct the requisite analysis and his permanence requirement is
    simply incompatible with the applicable legal principles. Second, the
    arbitrators decision is inconsistent with the evidence and the result of
    indefensible speculation.

(a)

Permanence Requirement Inconsistent with
    Applicable Legal Principles

[67]

As noted, arbitrators and courts asked to
    determine dependency must sometimes fit fluid and transient human relations
    into rigid legal categories. It is not always a comfortable fit. The nature of
    the challenge was aptly described by Arbitrator Samis in
St. Paul
    Travellers v. York Fire & Casualty Insurance Co.
(August 11, 2011 award),
[2]
as follows:

The law with respect to dependency cases has evolved over the
    past two decades to recognize the challenges associated with applying the
    dependency principle to real life fact situations. Amongst the most challenging
    situations are those where the recent pre-accident history shows a changing
    environment. The case law calls for us to identify a time period for the
    purpose of evaluating dependency. It is often not useful, or even sometimes
    misleading, to look at circumstances in too narrow a time frame (often referred
    to as a snapshot). To arrive at an appropriate determination of dependency
    status, we have to look at the status of a person's needs and resources over a
    time period. Then, within a selected timeframe, we can approach the issue of
    financial needs and resources in order to determine the person's dependency
    status.

[68]

How did the arbitrator respond to this challenge
    in this case? He responded, based on his review of the jurisprudence, by creating
    and applying a permanence test. Specifically, the arbitrator concluded that
    he should accept a short time frame only in cases where the relationship at
    issue is likely permanent.

[69]

That approach conflicts with the legal
    principles laid down in the jurisprudence. It is well established that, when
    conducting a dependency analysis, the arbitrator was required to look at the
    relationship between the Claimants and Kyle during a period of time which
    fairly reflects the status of the parties
at the
    time of the accident
 (emphasis added):
Oxford
    Mutual
, at paras. 26-27; see also
Dominion of
    Canada
, at paras. 29-31;
Gore Mutual Insurance
    Co. v. Co-operators General Insurance Co.
(2008), 93 O.R.
    (3d) 234 (S.C.), at para. 8. The time period chosen for a dependency analysis must
    reflect the facts of the case:
Oxford Mutual
,
    at para. 26. Simply put, the jurisprudence has rejected a categorical or
    one-size-fits-all approach.

[70]

In contrast the arbitrator carved out the
    category of transient or recent relationships and created a permanence
    requirement for all of them. Then the arbitrator relied on his conclusion that
    the relationship between Paula and Kyle was unlikely to succeed when choosing a
    one-year time period over a seven-week time period. Reading the arbitrators
    decision, it is clear that this is the only reason why he chose a year-long
    period where the Claimants were not dependent on Kyle over a seven-week period where
    they were. In my view, the arbitrator applied a categorical approach. This
    approach is unreasonable because it is inconsistent with the applicable legal
    principles and is simply too divorced from the actual question: what time
    period accurately reflects the true nature of the particular relationship at
    issue at the time of the accident?

(b)

Arbitrators Decision is Not Supported by the
    Evidence

[71]

In large part because of the approach he
    adopted, the arbitrators decision is inconsistent with the evidence in this
    case. When considered in light of the facts of this case, it is clear that the
    seven-week period accurately reflects the nature of the relationship between
    Kyle and the Claimants at the time of the accident.

[72]

According to Yvan, his marriage with Paula had
    been deteriorating for some time and Paula said she was leaving him in June
    2010. At this time, Paula had been dating Kyle for a few months and spent most
    of her time in Sarnia, with him. In July 2010, she moved her two daughters to
    Sarnia to live with Kyle. All of the witnesses who provided evidence (Kyle,
    Yvan, and Paulas mother) indicated that this move was intended to be a
    permanent one.

[73]

Significantly, the evidence indicates that Kyle
    and Paula believed that they were building a real relationship. They had a plan
    to enroll Athena and Destiny in a school in Sarnia. Paula was supposed to find
    a new job to help support this new household. There was even some talk of Paula
    and Kyle getting married.

[74]

During the seven weeks after the move, while
    they were trying to implement this plan, Kyle was paying for almost all of the
    household expenses and was responsible for the majority of the Claimants
    needs.

[75]

As I read his decision, the arbitrator did not
    question and largely accepted all of that evidence. However, he chose to focus
    on something else. He chose to focus on the permanence of the Paula-Kyle
    relationship. And he concluded that this relationship was unlikely to survive
    based on his conclusion about the kind of person Paula was. He focused on
    Paulas psyche and the fact that she was a troubled woman, the fact that she
    was not completely honest with Kyle, and his conclusion that the Paula-Yvan
    relationship was a more stable feature of her life.

[76]

There are at least two problems with such an
    approach.

[77]

First, it is difficult to see how any of these
    facts shed any light on the nature of the Claimants relationship with Kyle at
    the time of the accident. The uncontroverted evidence was that the move was
    intended to be a permanent one and that Kyle was contributing the vast majority
    of the expenses of this new household. The odds of Paula and Kyles
    relationship surviving into the future has very little to do with whether the
    Claimants were principally dependent for financial support on Kyle at the time
    of the accident.

[78]

Second, the arbitrator did not have any evidence
    suggesting that anyone saw Paula and Kyles relationship as temporary. The arbitrators
    conclusion to the contrary was based on his assessment of Paulas psyche and
    his conclusion based on what the arbitrator knew about Paulas past life.

[79]

This analysis is simply too speculative and
    unreliable. I agree with the appeal judge that [s]peculation of this sort is a
    mugs game. There are simply too many variables at play and it is extremely
    doubtful that any decision maker can predict the future course of a
    relationship in the way the arbitrator purported to. Because that analysis was
    the sole basis for the arbitrators decision, in my view, it renders his
    overall decision unreasonable as well.

(c)

Conclusion on Arbitrators Decision

[80]

The arbitrator adopted an unreasonable approach
    by asking, as the central and determinative question, whether the relationship
    between Paula and Kyle was permanent. Because of this approach, the
    arbitrators analysis relied on speculation and unreliable inferences. His
    substantive outcome cannot be supported by the evidence before him.

[81]

When considered under the proper approach, the
    seven-week period preceding the accident does not merely present a snapshot
    of the relationship between Kyle and the Claimants. Rather, the seven-week
    period is the one that appropriately represents the true nature of the
    relationship at the time of the accident: a nascent but real relationship
    wherein the Claimants were principally dependent on Kyle for financial support.

[82]

As such, even though the appeal judge erred in
    the standard of review, he did not err by setting aside the arbitrators
    decision.

VI.

DISPOSITION

[83]

I would dismiss the appeal. In line with the parties agreement, I
    would award costs of the appeal and the motion seeking leave to this court to
    Intact, fixed at $15,000, all inclusive.

Released: KMvR  AUG 4, 2016

H.S. LaForme J.A.

I agree. Robert J. Sharpe J.A.

I agree. K. van Rensburg J.A.

[1]
Although Gascon J. referred to specialized administrative tribunals, the
    administrative law framework applies when a court reviews a decision rendered
    by a single decision maker as well: see, for example,
Dunsmuir
.

[2]

Cited in
Dominion of Canada General Insurance Co. v.
    Ontario,
2013 ONSC 4717, 25 C.C.L.I. (5th) 125, at para. 31.


COURT OF APPEAL FOR ONTARIO

CITATION: Iroquois Falls Power Corporation v. Ontario
    Electricity Financial Corporation, 2016 ONCA 616

DATE: 20160805

DOCKET: M46751 (C60286, C60287, C60288, C60289, C60290, C60291)

Gillese J.A. (In Chambers)

BETWEEN

C60286

Iroquois Falls Power Corporation

C60287

Cochrane Power
    Corporation

C60288

N-R Power and Energy
    Corporation, Algonquin Power (Long Sault) Partnership and N-R Power Partnership

C60289

Kirkland Lake Power
    Corporation

C60290

Lake Superior Power
    Limited Partnership, Beaver Power Corporation, Carmichael Limited Partnership
    and Algonquin Power (Nagamami) Limited Partnership

C60291

Cardinal Power of
    Canada, L.P. and MPT Hydro L.P.

Applicants (Respondents/Responding Parties)

and

Ontario Electricity Financial Corporation

Respondent (Appellant/Moving Party)

J.D. Timothy Pinos and Emily Larose, for the appellant/moving
    party

James D.G. Douglas, for the respondents/responding parties
    Iroquois Falls Power Corporation, Cochrane Power Corporation, N-R Power and
    Energy Corporation, Algonquin Power (Long Sault) Partnership and N-R Power
    Partnership and Kirkland Lake Power Corporation

Crawford Smith and Nick Kennedy, for the respondents/responding parties
    Lake Superior Power Limited Partnership, Beaver Power Corporation, Carmichael
    Limited Partnership and Algonquin Power (Nagamami) Limited Partnership

Glenn Zacher, for the respondents/responding parties
    Cardinal Power of Canada, L.P. and MPT Hydro L.P.

Heard: July 28, 2016

ENDORSEMENT

[1]

Ontario Electricity Financial Corporation (OEFC) is a Crown agency
    whose objects include managing the former Ontario Hydros non-utility generator
    contracts.  OEFC brings this motion to stay those parts of the judgments of
    Wilton-Siegel J. dated March 12, 2015 (the Judgments) requiring it to pay
    approximately $160 million
[1]
to the responding parties, pending the outcome of its application for leave to
    appeal to the Supreme Court of Canada and, if leave is granted, a determination
    on the merits.

OVERVIEW

[2]

The responding parties to this motion are privately-owned non-utility
    generators (NUGs) who entered into power purchase agreements with the former
    Ontario Hydro between 1989 and 1994, amended by term sheets executed by the
    parties between 2002 and 2008 (PPAs).

[3]

When Ontario Hydro was restructured in 1999, OEFC became Ontario Hydros
    successor on the PPAs.

[4]

On January 1, 2011, Ontario Regulation 398/10 (the Regulation) came
    into force. After the Regulation came into force, OEFC relied on it to amend
    the formula it used to calculate the payments it made to the NUGs (the New Formula).

[5]

The New Formula resulted in decreased payments to the NUGs.  The NUGs
    commenced six separate applications, which were heard together, alleging that
    the New Formula breached the PPAs.  In their applications, the NUGs asked for orders
    requiring OEFC to resume making payments in accordance with the way in which
    they had been calculated before the Regulation came into force (the Go-Forward
    Payments) and requiring OEFC to pay them the difference between what they had
    been paid during the relevant period and what they would have been paid had
    OEFC not paid according to the New Formula (the Retroactive Payments).

[6]

Wilton-Siegel J. heard the applications and found that the New Formula did
    not comply with the PPAs. In the Judgments, he granted the applications and ordered
    OEFC to make both the Go-Forward Payments and the Retroactive Payments.

[7]

OEFC appealed to this court.

[8]

On April 19, 2016, in a unanimous decision written by Doherty J.A., this
    court dismissed OEFCs appeal (the CA Judgment).

[9]

OEFC has made the Go-Forward Payments in accordance with the Judgments
    since they were rendered.  The Retroactive Payments were automatically stayed
    until the CA Judgment was released.

[10]

On June 20, 2016, OEFC filed an application for leave to appeal the CA Judgment
    to the Supreme Court of Canada. In its leave application, OEFC proposes to raise
    the following two issues on appeal:

1. What is
    the test for determining when a judge at first instance has impermissibly
    decided a matter on the basis of a new issue and what are the procedural
    consequences thereof?

2.  How are
    the rules respecting the implication of contractual terms to be made consistent
    with the general principles of contractual interpretation and, if appropriate,
    the new approach to the implication of terms in other jurisdictions?

[11]

In the motion presently before the court, OEFC seeks an order staying those
    portions of the Judgments that oblige it to make the Retroactive Payments,
    pending the determination of its leave application and, if leave is granted, a
    determination on its appeal.   Alternatively, it asks for an order staying those
    portions of the Judgments that oblige it to make the Retroactive Payments to
    Cochrane Power Corporation, Lake Superior Power Limited Partnership, and
    Cardinal Power of Canada L.P.

[12]

The NUGs oppose the stay motion.

[13]

For the reasons that follow, the motion is dismissed.

THE TEST FOR A STAY

[14]

The test for a stay pending appeal, including a motion for leave to
    appeal to the Supreme Court of Canada, is well-established.  For OEFC to obtain
    a stay pending the outcome of its leave application, it must establish the
    following:

a)

there is a
    serious issue to be adjudicated on its proposed appeal;

b)

it will suffer
    irreparable harm if the stay is not granted; and

c)

the balance of
    convenience favours granting the stay.

[15]

These three components are interrelated in that the overriding question
    is whether the moving party has shown that it is in the interests of justice
    that the court grant a stay: see
BTR Global Opportunity Trading Ltd. v. RBC
    Dexia Investor Services Trust
, 2011 ONCA 620, 283 O.A.C. 321, at para. 16.

1.      SERIOUS ISSUE  THE MERITS OF THE LEAVE
    MOTION

[16]

Ordinarily, the threshold for demonstrating a serious issue to be tried
    is low.  However, for a stay motion pending leave to appeal to the Supreme
    Court, when considering the serious issue component of the test, the court must
    take into account the stringent leave requirements imposed by the
Supreme
    Court Act,
R.S.C. 1985, c. S-26
.
    As Laskin J.A. explained at para. 18 of
BTR
:

[T]he criteria for granting leave to appeal to the Supreme
    Court of Canada adds another layer to this component of the test. Under s.
    40(1) of the [
Supreme Court Act
]
,
    the Supreme Court of Canada typically grants leave to appeal only in cases of
    public or national importance. Thus, a provincial appellate court judge hearing
    a motion for stay pending leave to appeal to the Supreme Court of Canada must
    take account of the stringent leave requirements in the
Supreme Court Act
.
     [Citations omitted.]

[17]

Thus, I must make a preliminary assessment of the merit of the leave application,
    taking into consideration the stringent leave requirements in the
Supreme
    Court Act
.  Having made that
    assessment,
in my view, there is little likelihood that the Supreme
    Court will grant OEFC leave to appeal. I reach this conclusion for two
    reasons.

[18]

First, the judgments have little or no precedential value.  Wilton-Siegel
    J.s interpretation of the PPAs, and the CA Judgment affirming his
    interpretation, have little or no precedential value because of the highly
    fact-specific nature of the interpretative exercise.  Doherty J.A. recognized
    this in his reasons for the CA Judgment saying, at para. 99:

It is difficult to imagine an exercise in contractual
    interpretation that would be more fact-specific than the one called for here.
    Similarly, it is difficult to imagine a product of that interpretative process
    that could have less precedential value.

[19]

Second, this court considered and rejected the two issues that OEFC
    raised in its leave application, finding that they did not arise on the facts
    of this case.  In other words, the issues are hypothetical.  This, too, makes
    it very unlikely that leave will be granted: Henry S. Brown,
Supreme Court
    of Canada Practice 2016
(Toronto: Carswell, 2016), at p. 14.

[20]

The first issue raised on OEFCs leave application is based on its
    assertion that Wilton-Siegel J. impermissibly decided the applications on a
    fundamentally different basis than that advanced by the NUGs on the
    applications and argued by the parties at the hearing.  This court rejected
    that submission, expressly finding that Wilton-Siegel J. did not decide the
    applications on the basis of a new issue.  In paras. 65-69 of his reasons,
    Doherty J.A. states that the battle lines were clearly drawn before the
    application judge, nothing in the applications judges reasons suggest that he
    failed to appreciate the parties positions or that he saw the essentials of
    their dispute differently than the parties, and the alleged new issue tracked
    the competing positions of the parties.

[21]

The second issue raised in OEFCs leave application is based on its assertion
    that Wilton-Siegel J. implied a contractual term into the PPAs.  Again, that
    issue was raised before this court and rejected.  Doherty J.A. explained, at
    para. 118 of his reasons, that rather than implying a term, Wilton-Siegel J.
    had interpreted the language in the PPAs in light of the context in which those
    words were used by the parties.  That is, what OEFC characterized as implying a
    contractual term was simply Wilton-Siegel J. engaging in contractual interpretation
    as mandated by the Supreme Courts recent judgment in
Sattva Capital Corp.
    v. Creston Moly Corp.,
2014 SCC 53,
    [2014] 2 S.C.R. 633
.

[22]

As the issues raised on the leave application are highly fact dependent,
    appear to be hypothetical, and are likely to be of little interest to others
    beyond the litigants, it is unlikely that the Supreme Court will grant leave.

2.       IRREPARABLE HARM

[23]

OEFC says that irreparable harm of two sorts will result if the stay is
    not granted.

[24]

First, OEFC submits that making the Retroactive Payments will have a
    significant impact on the electricity ratepayers of Ontario.  It contends that
    making the Retroactive Payments would necessitate a rate adjustment in the very
    month they were paid.  This would pass significant costs onto ratepayers,
    particularly industrial customers.  Further, if OEFC obtains leave and is ultimately
    successful on appeal, OEFC submits that the adjustments for monies overpaid
    will be difficult to calculate and/or repayment might not put individual
    ratepayers back into the position they would have been but for the making of
    the Retroactive Payments.

[25]

Second, OEFC submits that if the stay is not granted and it is ultimately
    successful on appeal, it might be unable to recover the Retroactive Payments
    from the NUGs. It would have to pursue each NUG and OEFC says there is no
    assurance that the NUGs would be able to repay the funds received by way of the
    Retroactive Payments.  The prospect of non-recovery, OEFC argues, is
    particularly significant in respect of the 3 PPAs that have already expired.  (The
    expired PPAs are with Cochrane Power Corporation, Lake Superior Power Limited
    Partnership, and Cardinal Power of Canada L.P.)  Given that there is no ongoing
    commercial relationship between it and those 3 NUGs, the Retroactive Payment
    could not be recovered through set off.

[26]

I accept neither submission.

[27]

The record does not satisfy me that the full amount of the Retroactive
    Payments must come from electricity ratepayers in Ontario nor that if the amount
    of the Retroactive Payments is collected from electricity ratepayers that it
    must be done in a single month.  I have no doubt that unique challenges might
    arise if recovery takes place and if the Retroactive Payments have been funded
    by the Ontario ratepayers.  However, as I have indicated, on the record, I am
    not satisfied that the payments must come from the ratepayers.  Nor am I
    satisfied that if they do, OEFC would be unable to manage a fair rebate
    process.

[28]

OEFCs submission that recovery of the Retroactive Payments is uncertain
    (should that come to pass) also fails.  OEFC effectively admits that it could
    recover, through set off, from those NUGs with whom it has an ongoing
    contractual relationship.  As for the three NUGs in respect of which the PPAs
    have already expired, on the record before the court, OEFCs assertion of
    repayment risk is nothing more than speculation.  The NUGs are sophisticated
    commercial entities whose well-established owners have long histories of doing
    business in Ontario and, absent evidence to the contrary, there is no reason to
    expect that they would not repay any Retroactive Payments if OEFC is granted
    leave and succeeds on appeal.

3.
BALANCE OF CONVENIENCE

[29]

OEFC says that it has shown that it will suffer harm if the stay is not
    granted and that the responding parties have led no evidence of any harm they
    will suffer if the stay is granted.  In any event, OEFC says, any harm that the
    NUGs might suffer can be remedied through payment of interest on the amounts
    owing.  Thus, OEFC submits, the balance of convenience is in its favour.

[30]

As I have already explained, OEFC has not established that it will
    suffer irreparable harm if the stay is not granted.  Therefore, even if I
    accept that the NUGs will not suffer non-compensable harm, it matters not.  It
    is OEFCs burden to establish that it will suffer greater harm if the stay is
    not granted and it has failed to discharge that burden.

DISPOSITION

[31]

It will be evident from the foregoing reasons that I do not view a stay
    to be necessary in the interests of justice.  The motion is dismissed.

[32]

The parties have assured me that they can resolve the matter of costs
    among themselves. Accordingly, I make no order as to costs.

E.E.
    Gillese J.A.

[1]

This is the responding parties preliminary figure.  On OEFCs
    preliminary calculation, the payments total just under $180 million.


COURT OF APPEAL FOR ONTARIO

CITATION: Mask v. Silvercorp Metals Inc., 2016 ONCA 641

DATE: 20160824

DOCKET: C61313

Strathy C.J.O., Brown and Huscroft JJ.A.

BETWEEN

John Mask

Plaintiffs (Appellant)

and

Silvercorp Metals Inc., Rui Feng and Meng Tang

Defendants (Respondents)

Joseph Groia and Matthew M.A. Stroh, for the appellant

Dana M. Peebles, Miranda Lam and Paul Davis, for the
    respondents

Heard: June 28 and 29, 2016

On appeal from the order of Justice Edward P. Belobaba of
    the Superior Court of Justice, dated October 22, 2015, with reasons reported at
    2015 ONSC 5348.

Strathy C.J.O.:

A.

introduction

[1]

In
    August and September 2011, Silvercorp Metals Inc. (Silvercorp) was targeted
    by investors who shorted its shares, expecting to profit when the price fell.

[2]

To
    make sure of this, one of the short sellers anonymously released false reports
    on the internet. The share price fell and he made a quick profit of $2.8
    million. Silvercorps shareholders, on the other hand, lost $288 million in
    equity.

[3]

Twenty
    months later, the appellant commenced this proposed class action against the
    company, two executives and a mining engineering firm.
[1]
He claimed that Silvercorps share price was inflated by misrepresentations in
    its public disclosures in 2010 and 2011 and that he and other shareholders lost
    money when the price fell after corrective disclosures in September 2011.

[4]

The
    class action judge dismissed the appellants motion for leave to bring a class
    action for secondary market misrepresentation under s. 138.3 of the
Securities
    Act
, R.S.O. 1990, c. S.5. He also dismissed a motion to certify the action
    under the
Class Proceedings Act, 1992
, S.O. 1992, c. 6. The appellant says
    the motion judge erred in applying the leave test and misapprehended the
    evidence.

[5]

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

B.

facts

[6]

Silvercorp
    is a Canadian company that owns and operates mining properties in China. Its shares
    trade on the Toronto and New York stock exchanges. The respondent Feng is the
    CEO and the respondent Tang is the former CFO.

[7]

During
    the proposed class period  March 1, 2010 to September 12, 2011
[2]
 Silvercorp released periodic public reports about its Ying Mining Project in
    China, including a technical report in each of 2010 and 2011, prepared by BK
    Exploration Associates (BK). Those reports set out the companys estimates of
    the silver, lead and zinc resources and reserves at the Ying Mining Project (the
    BK 2010 Report) and, in particular, at the SGX Mine, one of the four mines in
    the Ying Mining Project (the BK 2011 Report).

[8]

The
    first anonymous internet posting, on September 2, 2011, questioned Silvercorps
    accounting and its mineral estimates, production numbers and mineral grade
    levels. The share price fell about 10 percent. The second posting, on September
    13, caused the share price to fall a further 20 percent. Among other things,
    the posting alleged that Silvercorp had overstated the quantity and quality of
    its mineral resources and reserves at the project.

[9]

The next
    day Silvercorp issued a press release attempting to refute these allegations
    and to show that its revenues and production numbers were correct. Schedule 4
    to the press release reconciled production to revenue, as reported in the
    companys financial statements for the Ying Mining Project for the calendar
    years 2006 to mid-2011.

[10]

The internet postings
    and the decline in share price caused the B.C. Securities Commission to investigate
    Silvercorps disclosures related to the Ying Mining Project. Among other
    things, the commission asked Silvercorp to retain an internationally recognized
    consulting firm to prepare new technical reports.

[11]

Silvercorp retained
    AMC Mining Consultants (Canada) Ltd. (AMC), one of the worlds largest
    independent mining consultancy firms. In June 2012, Silvercorp released AMCs
    updated technical report (the AMC 2012 Report). This report summarized Silvercorps
    reported ore production (over the period 2005 to 2011) and updated the
    estimates of future ore production, based on exploration and development work
    that had been completed by Silvercorp since the release of the BK 2011 Report.

[12]

The B.C. Securities
    Commission did not pursue its investigation of Silvercorp after the delivery of
    the AMC 2012 Report. Nor did it require Silvercorp to restate its financial
    statements. It did, however, pursue the shareholder responsible for the
    anonymous internet postings, ultimately concluding that while his conduct was unsavory
    and morally unsupportable, he had not committed a prohibited act.
[3]

C.

the
    PLEADING

[13]

In his second fresh as
    amended statement of claim, filed on August 15, 2014, the appellant advanced
    three claims: (1) a statutory and a common law claim for misrepresentation; (2)
    a statutory claim for failure to make timely disclosure; and (3) a common law
    claim in negligence alleging that Silvercorp co-authored and published the BK
    2010 and 2011 Reports that it knew or should have known had not been prepared
    in accordance with industry standards or properly audited.

[14]

The statement of claim
    in a class action under s. 138.3 of the
Securities Act
serves two
    important purposes. First, it identifies the misrepresentations on which the
    statutory claim is based and gives particulars of the alleged correction of
    those misrepresentations. Second, it defines the scope of the class action. It
    thus provides the framework for the application of the leave test under s. 138.8
    and of the test for certification under s. 5(1) of the
Class Proceedings
    Act, 1992.

[15]

A statement of claim
    asserting the statutory cause of action under s. 138.3(1) of the
Securities
    Act
should set out, with particularity: (a) the specific misrepresentation(s)
    on which the claim is based; (b) the document(s) or statement(s) containing the
    representation(s); (c) the date(s) of the representation(s); (d) the date(s) on
    which the misrepresentation(s) was (were) publicly corrected; and (e) the document(s)
    or statement(s) containing the corrections. Further particulars may be required
    depending on the nature of the documents containing the representations and the
    parties sought to be joined as defendants.

[16]

The appellants statement
    of claim lacked focus and particularity. First, it did not identify which words
    or figures, in which documents and on which dates, were untrue and therefore, constitute
    misrepresentations. Instead, it referred to about a dozen corporate disclosures
    over 18 months.

[17]

Nevertheless, the
    motion judge exercised his discretion and granted the appellants request, made
    during final argument, for an order under s. 138.3(6) of the
Securities Act
to treat the multiple misrepresentations as a single misrepresentation.
    The motion judge did so on the basis that the alleged misrepresentations had a
    common subject matter dealing with mining resource estimates, production
    numbers or grade levels.

[18]

Second, the pleading
    failed to link the alleged misrepresentation to any corrective disclosure, or
    identify what correction was made, and when. This issue was, to some extent,
    addressed when the motion judge granted the appellants motion to file
    evidence, after the hearing, of the September 13 anonymous internet posting,
    concluding that a document of this nature could qualify as corrective
    disclosure and further, that it defined the end of the class period.

[19]

What emerges from the
    statement of claim, however, is that the appellant alleged that Silvercorp had misrepresented
    the quality and quantity of its mineral resources and reserves in its public
    disclosures, understating the quantity of ore it was milling, and overstating
    the quality of the minerals it was producing. Put another way, it was alleged
    that Silvercorp was artificially keeping its production levels up by mining
    more, lower quality ore, than it was disclosing.

D.

the expert
    evidence

[20]

The plaintiffs key
    expert witness was Mohan Srivastava, a professional geologist. His first
    report, dated June 12, 2013, criticized the quality of BKs work and claimed that
    it resulted in Silvercorp underreporting the amount of material delivered to
    the mill from the SGX Mine and overestimating the grade of the ore being
    produced. He described this as high grading, namely scrambling to get extra
    tonnage through the mill in order to maintain metal production targets when
    grades turn out to be lower than expected. He stated that the 2010 and 2011 BK
    Reports should have commented on the discrepancies between previous predictions
    and actual production. Nowhere in his first report, however, did Mr. Srivastava
    identify misrepresentations in Silvercorps disclosures forming the basis of
    the statutory claim.

[21]

Silvercorp filed a
    report by Eugene Puritch, P.Eng., a mining geologist, who opined that Mr.
    Srivastavas criticisms of BK were irrelevant, inaccurate and unsupported. He
    also expressed the opinion that Silvercorp was not high grading.

[22]

However, the core of
    the plaintiffs case, and the defendants rebuttal of it, came in subsequent
    reports, the first prepared by Silvercorps expert, Patrick Stephenson, dated
    April 17, 2014, and the second, a further report, prepared on behalf of the
    appellant, by Mr. Srivastava, dated August 20, 2014.

[23]

Mr. Stephenson was AMCs
    principal geologist and had been personally involved in the preparation of the
    AMC 2012 Report. His affidavit responded to the appellants pleading concerning
    that report. He deposed that AMC had
not
concluded
    that Silvercorp had overstated the quantity or quality of its mineral production
    at the Ying Mining Project for the years 2009 to 2011. He stated that there was
    no material discrepancy between the production figures reported in the AMC
    2012 Report and the figures contained in Silvercorps public disclosures for
    2010 and 2011. He explained the reasons for the apparent differences between
    the figures, including the use of different periods (calendar year versus fiscal
    year), the use of different measurement units (dry tonnes versus the inclusion
    of moisture) and the use of different mine areas and different mines. Further,
    as the motion judge noted, AMC was asked to take into account
updated
exploration and production information developed
    since the preparation of the BK 2011 Report.

[24]

Mr. Stephenson concluded
    that when the figures were adjusted to take these differences into account,
    there were no material differences between the production numbers (by tonnage
    and grade) reported by Silvercorp in its contemporaneous public disclosures,
    and the production numbers in the AMC 2012 Report.

[25]

Mr. Srivastavas second
    report was delivered four months after Mr. Stephensons. It purported to
    address the differences between Silvercorps disclosures during the class
    period, as summarized in Schedule 4, and those contained in the AMC 2012
    Report. He stated that the mine production data reported in the two documents
    did not match, and that the differences were material. He concluded that this
    supported the allegation that Silvercorp had been overstating the grades of
    silver and the revenues at the Ying Mining Project.

[26]

However, nowhere in
    Mr. Srivastavas second report or affidavit did he address Mr. Stephensons
    evidence that purported to explain and reconcile the figures contained in the
    two documents.

E.

the motion
    judges reasons

[27]

In first addressing
    the leave requirements under s. 138.8, the motion judge referred to the
    decision of the Supreme Court of Canada in
Theratechnologies Inc. v. 121851
    Canada Inc.
, 2015 SCC 18, and the decision of this court in
Green v.
    Canadian Imperial Bank of Commerce
, 2014 ONCA 90,
[4]
expressing the question before him as follows:

after considering all of the evidence presented by the
    parties, does any part of the plaintiffs case have a reasonable or realistic
    chance of success at trial. Or is the plaintiffs case so weak or has it been
    so successfully rebutted by the defendants that it has no reasonable
    possibility of success?

[28]

The motion judge then
    identified as the primary focus of the appellants claim, that the AMC 2012 Report
    showed that the representations about mineral production and grade levels set
    out in the BK 2010 and 2011 Reports, and as further documented in Schedule 4,
    were overstated and untrue. Specifically, the appellant alleged that the
    earlier figures inflated the share price, causing damage to shareholders when
    the truth was allegedly revealed.

[29]

The motion judge found
    that Mr. Srivastavas evidence

that
    the AMC 2012 Report showed that the mineral production and grade levels set out
    in the BK 2010 and 2011 Reports were over-stated and untrue

was completely undermined by Mr. Stephensons evidence. Mr. Stephensons
    evidence was that, properly understood, the figures used in the AMC 2012 Report
    and the BK 2010 and 2011 Reports were substantially the same. The motion judge
    noted that Mr. Stephenson was not cross-examined on this aspect of his
    evidence. Nor was he contradicted by Mr. Srivastava in his second report.

[30]

The motion judge
    concluded that Mr. Srivastava had failed to make necessary adjustments to the
    figures to compare them  he was comparing apples to oranges. He stated, at
    para. 52:

Given that the detailed evidence of Mr. Stephenson, who was
    directly involved in the preparation of the 2012 AMC Report, stands completely
    uncontroverted I am obliged to find on the allegation of misrepresentation that
    the plaintiff has not cleared the OSA leave standard. This is not a case of
    battling experts. We have a participant expert (Stephenson) who was responsible
    for the AMC 2012 Report and who explains how and why the report is about
    oranges and another expert (Srivastava) who ignores the AMC explanation
    altogether and continues to assume that he is dealing with apples.

[31]

The motion judge found
    that the appellants misrepresentation claim was so weak or has been so
    successfully rebutted by the defendants that it has no reasonable possibility
    of success.

[32]

The motion judge also
    found that there was no support, either in the pleadings or in the evidence,
    for the claim that Silvercorp had failed to make timely disclosure of material
    changes in its production figures.

[33]

Based on this courts
    decision in
Musicians Pension Fund of Canada (Trustee of) v. Kinross Gold
    Corp.
, 2014 ONCA 901, the motion judge found that the common law
    misrepresentation claim was destined to fail and should not be certified. He also
    found that the plaintiffs negligence pleading was essentially a pleading of
    negligent misrepresentation, which was duplicative and should not proceed.

F.

analysis

[34]

In its appeal, the
    appellant argues that the motion judge erred, in respect of his leave ruling,
    by:

(a)

misapplying the test for leave
    under s. 138.8 of the
OSA
and misapprehending the evidence on the motion;

(b)

mischaracterizing the nature of
    the appellants claim as a comparison between Schedule 4 and the AMC 2012
    Report and, consequently, failed to consider other relevant evidence, including
    the shortcomings in the BK 2010 and 2011 Reports and the appellants claim that
    Silvercorp knew or should have known that the reports were negligently prepared;

(c)

refusing the appellants request
    for leave to amend the pleadings to plead negligence
simpliciter
;

and

(d)

excluding a draft affidavit of
    Mr. Stephenson and certain email communications.

(1)

Did the motion judge err in applying the leave test?

[35]

Under s. 138.8(1) of
    the
Securities Act
, leave of the court is required to proceed with a
    statutory misrepresentation claim. Leave will only be granted if the court is
    satisfied that (a) the action is brought in good faith and (b) there is a
    reasonable possibility that the action will be resolved at trial in favour of
    the plaintiff.

[36]

The appellants
    central argument is that the motion judge applied a higher leave standard than
    that set out by the Supreme Court of Canada, which requires only that the
    plaintiff show a plausible analysis of the applicable legislative provisions,
    and
some credible evidence in support of the claim

    [emphasis added]:
Theratechnologies Inc. v. 121851 Canada Inc
., 2015
    SCC 18, at para. 39;
Canadian Imperial Bank of Commerce v. Green
, 2015
    SCC 60, at para. 121. The appellant argues that the motion judge misapplied the
    test set out in
Theratechnologies
by weighing the evidence on a
    balance of probabilities, turning the leave application into a mini-trial, contrary
    to the Supreme Courts direction at para. 39 in
Theratechnologies
.

[37]

I begin with the standard of review. The standard on pure questions
    of law is correctness:
Housen v. Nikolaisen
,
2002 SCC 33
,
    [2002] 2 S.C.R. 235, at para. 8. Questions of mixed fact and law lie along a
    spectrum.
Where an error can be attributed to the application of an
    incorrect standard, a mischaracterization of a legal test, or a similar error
    in principle, such an error can be characterized as an error in law, subject to
    a correctness standard of review:
Housen v. Nikolaisen
, at paras. 33,
    36.

[38]

In this case, the application of the leave test to a body of facts
    is a question of mixed fact and law. The issue, as framed, raises questions
    about the motion judges characterization of the legal test and asserts that he
    applied an overly onerous test. As such, it attracts a correctness standard of
    review.

[39]

The appellant argues
    that once the plaintiff establishes both a plausible analysis of the
    legislation and some credible evidence, the test is satisfied and leave should
    be granted. The appellant further argues that the motion judge acknowledged that
    he had raised some credible evidence when, after summarizing the appellants
    evidence, and in particular the evidence of Mr. Srivastava, he said, at para.
    44:

If this was the entirety of the evidence, I would have granted
    leave under s. 138.8 of the OSA. The plaintiff would have established a
    reasonable possibility of success at trial. But for this: Mr. Srivastava did
    not respond to or even mention the earlier AMC [Stephenson] affidavit filed by
    the defendants.

[40]

The appellant submits
    the motion judge should have stopped there. He argues that by analyzing Silvercorps
    evidence and weighing it against that proffered by the appellant, the motion
    judge, in effect, imposed an obligation on the appellant to fully respond to
    the affidavit evidence presented by Silvercorp. This approach, the appellant
    argues, is inconsistent with the purpose and spirit of the legislation to
    screen out only plainly unmeritorious claims.

[41]

I do not accept the
    appellants submission that scrutiny of the evidence on a leave application
    should be so limited. In my view, the reasonable possibility requirement of
    the leave test requires scrutiny of the merits of the action based on all the
    evidence proffered by the parties. Far from undermining the objective of the
    legislation, such scrutiny of the entire body of evidence is necessary to give
    effect to the purpose of the screening mechanism.

[42]

As noted in several
    decisions of this court, s. 138.8(1) was enacted to address concerns that
    existing safeguards were not sufficient to prevent unmeritorious claims:
Goldsmith
    v. National Bank of Canada,
2016 ONCA 22, at paras. 26-28;
Green v.
    Canadian Imperial Bank of Commerce
, 2014 ONCA 90;
Kinross
. Abella
    J. noted in
Theratechnologies Inc.
, at para. 38,

that in
    response to this concern s. 138.8 was meant to create a robust deterrent screening
    mechanism so that cases without merit are prevented from proceeding and further,
    that the assessment requires a
reasoned consideration of
    the evidence
to ensure that the action has some merit [emphasis added].

[43]

It follows from these
    comments that a reasoned consideration of the evidence must include scrutiny
    of the evidence proffered by both sides, and some weighing of the defence
    evidence against that adduced by the plaintiff. To suspend the analysis when
    the plaintiff has presented a case that could satisfy the reasonable
    possibility test is inconsistent with the leave test acting as a robust deterrent
    screening mechanism. Abella J.s endorsement of Belobaba J.s comments in
Ironworkers
    Ontario Pension Fund (Trustee of) v. Manulife Financial Corp
., 2013 ONSC
    4083, that s. 138.8 should operate as more than just a speed bump, is a clear
    indicator that the motion judge must do more than simply ascertain whether the
    plaintiff has presented evidence of a triable issue. Instead, the motion judge
    must review all the evidence adduced by both parties to ascertain whether there
    is a reasonable or realistic chance that the action will succeed:
Theratechnologies
,
    at paras. 38 and 39.

[44]

Moreover, as this
    court noted in
Kinross
, at para. 56
,
and
Goldsmith,
at
    para. 33, the statute itself confirms that some weighing of the evidence is anticipated
    by the express provisions of the
Securities Act
. Subsection 138.8(2)
    contemplates that both parties shall file affidavit evidence setting out the
    material facts on which each intends to rely on the leave application. Further,
    s. 138.8(3) explicitly provides for the right to cross-examine the deponents of
    the affidavits filed. These mechanisms would be meaningless if, as the
    appellant suggests, leave must be granted where the plaintiffs evidence,
    viewed in isolation, could satisfy the reasonable possibility of success at
    trial test. I agree with Cronk J.A.s comments at para. 56 of
Kinross
,
    adopted by Pardu J.A. in
Goldsmith
at para. 33, that such a
    restrictive treatment of the evidence would render the leave requirement
    hollow.

[45]

The judge was not
    limited to a consideration of the plaintiffs evidence. He was required to
    consider the evidence of both parties, keeping in mind the relatively low
    merits-based threshold, and the limitations of the record before him. He was
    entitled, indeed required, to undertake a critical evaluation of all the
    evidence and this necessarily required some weighing of the evidence, drawing
    of appropriate inferences and the finding of facts established by the record:
    see
Theratechnologies
at paras. 38-39;
Kinross
at paras. 52,
    54-55, 59.

[46]

Apart from the issue
    of weighing the evidence, the appellant argues that the motion judge, in
    concluding that the appellant had failed to satisfy the leave requirement, made
    erroneous findings which led him to conclude that the appellant had no chance
    of success at trial. First, the appellant argues the motion judge erred in
    concluding that the plaintiff had not challenged Mr. Stephensons affidavit
    evidence, finding that his evidence was uncontroverted. Second, the appellant
    argues that there was no basis for the motion judge to conclude that Mr.
    Stephensons affidavit so successfully rebutted Mr. Srivastavas affidavit
    because Mr. Stephenson was not retained as an expert on the issues before the
    court, but rather, only to address factual matters and address erroneous claims
    about the AMC 2012 Report.

[47]

I do not accept either
    submission. The motion judge concluded that Mr. Stephenson, although
    cross-examined at length, had not been cross-examined on the factual
    corrections and clarifications he made in his affidavit, corrections and
    clarifications which went to the factual heart of Mr. Srivistavas opinion.
    Specifically, Mr. Stephenson, the very person responsible for the AMC 2012
    Report, stated that the plaintiff had mischaracterized and misunderstood a number
    of statements made by or attributed to AMC and that the production numbers,
    when properly understood, revealed no discrepancy between the AMC 2012 Report
    and the production numbers in Silvercorps MD&As for 2010 and 2011
    (summarized in Schedule 4).

[48]

It was open to the
    motion judge to examine the factual underpinnings of Mr. Srivistavas opinion
    and conclude, based on the evidence before him, that the opinion had been
    completely undermined by flawed factual assumptions.

[49]

In sum, the motion
    judge did what he was required to do. He drilled down to the foundation of the appellants
    statutory claim  that the AMC 2012 Report showed that Silvercorps statutory
    disclosures, as reflected in Schedule 4, overstated Silvercorps production and
    grade levels. When he considered all the evidence, he concluded that the
    foundation had been demolished by the defendants evidence and had not been
    repaired by the plaintiffs.

(2)

Did the motion judge mischaracterize the claim or ignore relevant
    evidence?

[50]

The appellants second
    argument is that the motion judge misapprehended the nature of the claim and
    treated it as a comparison of Schedule 4 and the AMC 2012 Report. The appellant
    argues this characterization ignored other relevant evidence about the flaws in
    the BK 2010 and 2011 Reports and, specifically, the argument that Silvercorp
    knew or should have known that those reports, used to promote the SGX Mine,
    were negligently prepared. In support of this argument, the appellant relies on
    Mr. Srivastavas first report, which was critical of BKs methodology, and on
    the fact that the B.C. Securities Commission began an investigation into
    Silvercorp based, in part, on its concerns about BKs compliance with mining
    reporting standards.
[5]

[51]

Issues involving a
    judges interpretation of the evidence are questions of mixed fact and law and
    should not be overturned absent palpable and overriding error:
Housen v.
    Nikolaisen
, at paras. 36-37;
St. Jean v. Mercier
, 2002 SCC 15, at
    paras. 48-49. Similarly, findings of fact and inferences of fact may be
    interfered with on appeal only where there is a palpable and overriding error:
Housen
    v. Nikolaisen
, at paras. 10, 25;
H.L. v. Canada
, 2005 SCC 25,
    [2005] 1 S.C.R. 401, at para. 76.

[52]

Applying this
    standard, I do not accept the appellants submission that the motion judge
    mischaracterized his claim. The motion judge said, at para 12 of his reasons:

[T]he gist of the plaintiffs complaint is that the AMC 2012
    Report shows that the earlier representations about mineral production and
    grade levels as set out in the BK 2010 and 2011 Reports and as further
    documented in Schedule 4, were over-stated and, in a word, untrue. The
    allegation of misrepresentation arises, in essence, from a comparison of the
    AMC 2012 Report with Schedule 4.

[53]

I agree. The focus of
    the appellants negligent misrepresentation claim was indeed the alleged
    discrepancies between Schedule 4 (which set out Silvercorps disclosures of
    tonnage, production and grades, for the years 2006 to June 2011, as contained
    in its financial statements) and the AMC 2012 Report.

[54]

I do not accept the
    appellants submission that the motion judge, in focusing his analysis on the
    key documents, ignored other evidence relevant to the appellants argument that
    the BK 2010 and 2011 Reports were negligently prepared. First, the motion judge
    was aware of the allegations, specifically mentioning the reports at paras. 42
    and 53 of his reasons.  He mentioned them again in his reasons denying
    certification of the negligence claim, finding, at para. 66:

Put simply, the negligence pleading  that [Silvercorp]
    co-authored and published technical reports that overstated the quantity and
    quality of mineralized ore that in turn resulted in shareholder losses when
    these alleged misrepresentations were corrected  is in substance a pleading of
    negligent misrepresentation.

[55]

Second, the motion
    judge specifically considered the exchange of letters between Silvercorp and
    the B.C. Securities Commission (which referenced possible negligence in the
    preparation of the BK 2010 and 2011 Reports) as another possible source of
    evidence of misrepresentation, but concluded that the discrepancies noted by
    the B.C. Securities Commission were not enough to clear the leave hurdle.

[56]

Finally, Mr. Srivastavas first report did not speak to any
    specific misrepresentations and was of no significance to the statutory
    misrepresentation claim.

[57]

Based on the evidence
    before him, or the lack of evidence, the motion judge concluded that the
    allegations of negligence in the preparation of BKs reports were not
    sufficient to clear the leave hurdle. The appellant has failed to demonstrate
    any palpable and overriding error in his assessment of the evidence.

[58]

To conclude, the motion
    judge did not mischaracterize the claim or fail to consider relevant evidence.
    He dealt with the case presented by the appellant and the evidence presented by
    the appellant and he found it wanting. The appellants attempt on appeal to
    refocus the pleading and the evidence does not succeed.

(3)

Did the motion judge err in refusing the appellants request for leave
    to amend the pleadings to plead negligence
simplicter
?

[59]

The motion judge
    dismissed the appellants motion to amend the statement of claim to plead
    negligence
simpliciter
with greater clarity. He found that an
    amendment at that late stage would be unfair to the respondent and, in any
    event, the claim was subsumed by the negligent misrepresentation pleading. The
    appellant now contends that the negligence
simpliciter
claim is an
    allegation that the BK Technical Reports were prepared negligently and cannot
    be relied upon. The allegation that the reports were negligently prepared does
    not give rise to a separate cause of action against the respondents. I find no
    error in the motion judges ruling.

(4)

Evidentiary rulings

[60]

The appellant
    challenges two evidentiary rulings. First, the motion judge struck from the
    record three emails sent by Mr. Klohn, one of the principals of BK, to
    Silvercorp. They were attached to an affidavit of one of the appellants
    lawyers. The motion judge ruled that the emails were hearsay, their author was
    available to give evidence and the emails did not meet the necessity
    requirement. I see no error in this conclusion. The emails were, in any event,
    of marginal probative value.

[61]

The appellant also
    takes issue with the motion judges refusal to admit an earlier draft of Mr.
    Stephensons affidavit on the ground that he was a participant expert. In so
    doing, he referred to the decisions of this court in
Westerhof v. Gee
    Estate
, 2015 ONCA 206, at paras. 6, 61-64, 70 and 81-82; and
Moore v.
    Getahun
, 2015 ONCA 55, at para. 70.

[62]

I see no error in the
    motion judges ruling. As this court held at para. 60 of
Westerhof:

a witness with special skill, knowledge, training, or
    experience who has not been engaged by or on behalf of a party to the
    litigation may give opinion evidence for the truth of its contents without
    complying with rule 53.03 where:

·

The opinion to be given is based on the witnesss observations of
    or participation in the events at issue; and

·

The witness formed the opinion to be given as part of the
    ordinary exercise of his skill, knowledge, training and experience while
    observing or participating in such events.

[63]

As discussed
    above, Mr. Stephensons affidavit addressed certain mischaracterizations of a
    report he prepared, in his capacity as principal geologist for AMC. His
    observations were derived from [his] observation of or involvement in the
    underlying facts.:
Westerhof,
at para. 61.  He was not retained as an
    expert witness for Silvercorp. In any event, the motion judge also noted that the
    earlier draft was not necessary for the purpose for which the appellant was
    advancing it, namely to show that Silvercorp had retained AMC as a direct
    response to the concerns raised by the B.C. Securities Commission, a fact that
    had already been acknowledged by Silvercorp.

G.

ancillary issues

[64]

I turn to two
    ancillary issues.

(1)

Certification

[65]

Relying on this
    courts decision in
Kinross
, the motion judge dismissed the
    certification motion, concluding that the common law misrepresentation claim
    was bound to fail, because it rested on the same evidentiary foundation as the
    statutory claim. There were no oral submissions on this issue and I agree with
    the motion judges conclusion, for the reasons he gave.

(2)

Costs appeal

[66]

The appellant appeals
    the motion judges costs award of $500,000. He says the amount is excessive and
    that the motion judge erred in principle in not giving effect to access to
    justice considerations and the objectives of Part XXIII.1 of the
Securities
    Act.

[67]

The motion judge
    considered this argument and concluded that access to justice considerations
    that may prevail on a certification motion are less applicable to a leave motion
    under Part XXIII.1, which involves a significant merit-based analysis.

[68]

I see no error in
    principle in this conclusion. Nor can I say it is plainly wrong. See:
Hamilton
    v. Open Window Bakery Ltd.
, 2004 SCC 9, at para. 27. The motion judges
    decision on costs reflected his experience with class actions in general and
    with securities class actions in particular. It also reflected his familiarity
    with this proceeding, having case managed it from the outset. The costs awarded
    were in line with decisions in other cases: see
Silver v. Imax Corp.
,
    2010 ONSC 4017 ($385,000);
Dugal v. Manulife Financial Corp.
, 2013
    ONSC 6354 ($467,234 payable forthwith and a further $100,000 payable in the
    cause).  I would therefore defer to the exercise of the motion judges discretion
    on costs.

H.

conclusion
    and order

[69]

For the foregoing
    reasons, I would dismiss the appeal. It is therefore unnecessary to address the
    cross-appeal. I would award costs of the appeal to the respondents in the
    amount of $75,000.00, inclusive of disbursements and all applicable taxes.

G.R. Strathy C.J.O.

I agree David Brown
    J.A.

I agree Grant
    Huscroft J.A.

Released: August 24, 2016

GRS

[1]

The plaintiff released the engineering firm, BK Exploration Associates,
    from the action in 2014, in exchange for its agreement to cooperate with the
    plaintiff, but without monetary compensation.

[2]
The proposed class period begins with the publication of a press
    release announcing the results of the BK 2010 Report and ends the day before
    the September 13 negative internet posting that caused the 20 percent drop in
    the company share price.

[3]
The primary short-seller and author of the negative internet
    postings made $2.8 million the day after the September 13 share price collapse.
    Acting on a detailed complaint by Silvercorp in February 2013, the B.C.
    Securities Commission charged him with fraud and conduct contrary to the public
    interest. These charges were dismissed in May 2015 after a lengthy hearing. The
    Commission acknowledged that the internet postings had been carefully crafted
    to drive down the price of Silvercorp shares.

[4]
The Supreme Courts decision in
Green
had not been released at the time
    of the hearing in the court below.

[5]
Referred to as National Instrument 43-101.


COURT OF APPEAL FOR ONTARIO

CITATION: MEDIchair LP v. DME Medequip Inc., 2016 ONCA 608

DATE: 20160802

DOCKET: C60733

Feldman, MacPherson and Miller JJ.A.

BETWEEN

MEDIchair LP

Applicant (Respondent)

and

DME Medequip Inc., Allison Rolph, Ron Seiderer,
and 2169252 Ontario Inc.

Respondents (Appellants)

David S. Altshuller and Jennifer Pocock, for the
appellants

R.S.M. Woods and Peter Smiley, for the respondent

Heard: January 25, 2016

On appeal from the judgment of Justice Thomas J. McEwen
of the Superior Court of Justice, dated July 14, 2015, with reasons reported at
2015 ONSC 3718.

ADDENDUM

[1]

Following release of the reasons of the Court, the parties have advised
by letter that they agree that costs of the application be awarded to the
appellants in the amount of $35,000, inclusive of disbursements and HST.  So
ordered.

K. Feldman J.A.

J.C. MacPherson J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Middlesex Centre (Municipality) v. MacMillan, 2016
    ONCA 607

DATE: 20160802

DOCKET: C60543

Doherty, Epstein and Huscroft JJ.A.

BETWEEN

Municipality of Middlesex Centre

Applicant (Appellant)

and

David Ronald MacMillan, Janice Lynn McIntosh and
    Her Majesty the Queen in Right of Ontario

Respondents (Respondents in Appeal)

James D. Virtue, for the appellant

Analee J.M. Ferreira and E.
    Cormier, for the respondents David MacMillan and Janice McIntosh

No one appearing for the
    respondent Her Majesty the Queen in Right of Ontario

Heard:  February 4, 2016

On appeal from the order of Justice A. Mitchell of the Superior
    Court of Justice, dated May 8, 2015, with reasons reported at 2015 ONSC 2988.

COSTS ENDORSEMENT

[1]

The parties agreed that the successful party on appeal should receive
    costs of $8,000, inclusive of disbursements and relevant taxes.  The appellant,
    as the successful party, is entitled to those costs.

[2]

The court received submissions as to the appropriate costs on the
    application.  In light of the outcome of the appeal, the appellant is entitled
    to its costs on the application.  We agree with the submissions of the
    respondents MacMillan and McIntosh that those costs should be fixed at $50,000,
    inclusive of disbursements and relevant taxes.

Doherty J.A.

Gloria Epstein J.A.

Grant Huscroft J.A.