COURT OF APPEAL FOR ONTARIO

CITATION: Har Jo Management Services Canada Ltd. v. York
    (Regional Municipality), 2018 ONCA 469

DATE: 20180523

DOCKET: C63324

Feldman, Pepall and Huscroft JJ.A.

BETWEEN

Har Jo Management Services Canada Ltd.

Plaintiff (Appellant)

and

The Regional Municipality of York

Defendant (Respondent)

Shane Rayman and Conner Harris, for the appellant

Frank Sperduti and Andrew Baker, for the respondent

Heard: January 10, 2018

On appeal from the judgment of Justice J. Christopher Corkery
    of the Superior Court of Justice, dated January 12, 2017.

Feldman J.A.:

Introduction

[1]

The appellants property was damaged by flooding following two
    significant rainfalls on May 21 and May 28, 2013. The floodwaters came from
    adjacent land that the respondent municipality had expropriated in 2009 for a
    construction project. In 2011, the appellant instituted a proceeding before the
    Ontario Municipal Board (OMB) claiming damages for injurious affection in
    respect of that expropriation.

[2]

Following the flooding, on June 3, 2013, the appellants lawyer wrote a
    claim letter stating that the respondents construction activities resulted in
    the flooding and consequent damage to the appellants property, and indicating
    that the source of the flooding had to be understood without delay. In its
    response of June 28, 2013, the respondent advised that the flooding was not caused
    by its construction activities, but that there was a blocked catch basin on the
    appellants property that the appellant should arrange to flush.

[3]

The appellant instituted the within action on June 29, 2015, two years
    following the receipt of the June 28, 2013 letter (June 28, 2015 was a Sunday).
    The respondent pleaded that the action was statute-barred and brought a motion
    for summary judgment. The motion judge agreed, on the basis that the
    appellants claim was discoverable when the flooding occurred in May 2013.

[4]

I would allow the appeal.

[5]

In analyzing when the appellant knew or ought to have known that it had
    a claim for damages against the respondent, the motion judge failed to consider
    when the appellant knew or ought to have known that an action in Superior Court
    was the appropriate means to seek a remedy. In that context, he failed to
    consider the effect of the statutory scheme that grants the OMB (now the Local
    Planning Appeal Tribunal) exclusive jurisdiction over damages for injurious
    affection and to consider the evidence of the appellants lawyer that she began
    an action in Superior Court out of an abundance of caution, in the event that
    the flooding was not caused by the respondents construction but was still the
    fault of the respondent.

Background Facts

[6]

In 2009, the respondent expropriated some lands adjacent to the
    appellants property on Davis Drive in Newmarket, and began construction there.
    That construction was ongoing in 2013.

[7]

In January 2011, the appellant brought an Amended Notice of Arbitration
    under the
Expropriations Act
, R.S.O. 1990, c. E.26, seeking damages
    for injurious affection based on the expropriation and the construction. No
    response was filed by the respondent and that proceeding remains outstanding.

[8]

On May 21 and May 28, 2013, Newmarket experienced significant rainfall, leading
    to flooding on the appellants property. On June 3, the appellants lawyer
    wrote to the respondent claiming the construction caused the flooding. She also
    stated that the appellant could delay retaining an engineer to investigate the
    cause of the flooding if the respondent was taking steps to understand the
    problem and correct the deficiencies. The appellants lawyer further advised
    that the appellant would make a claim with respect to the damage resulting from
    the construction and a claim under s. 21 of the
Expropriations Act
.
    She stated that the claim was in addition to the injurious affection claim already
    outstanding from January 2011.

[9]

By a responding letter dated June 14, 2013, the adjuster for the
    respondents insurer indicated that its investigation was ongoing, that the
    cause of the flooding had yet to be determined, and that it would advise of the
    respondents position on liability once it had completed the investigation. In a
    follow-up letter of June 28, 2013, the adjuster advised that its investigation,
    using a video of the sewer, showed a blocked catch basin located on the
    appellants property. The letter recommended the appellant flush the line, but
    made no statement regarding liability or causation.

[10]

The appellant brought this action on June 29, 2015, exactly two years
    after the letter of June 28, 2013 (accounting for the fact that June 28, 2015
    was a Sunday). The respondent filed a statement of defence, which pleaded that
    the action was statute-barred and, on that basis, it brought the motion for
    summary judgment under appeal.

[11]

The appellants lawyer filed an affidavit on the motion. She was not
    cross-examined. She explained in the affidavit that she acts for the appellant
    on both the underlying action and an injurious affection claim before the OMB
    in respect of the damage caused to the appellants property by the respondents
    expropriation of Davis Drive, and its ongoing construction there. She then
    described the flooding in May 2013, and her clients attempts over the
    following year to contact the respondent to ascertain its responsibility for
    the flooding damage. Her view was that the respondent still had not addressed
    either the cause of the damage or its responsibility for it. The respondent had
    recommended the appellant report to its insurer, which it has done.

[12]

The lawyer then described her correspondence with the respondent,
    pointing out that her letter asked the respondent to cooperate and determine
    the source and cause of the flooding. In response, the adjuster for the
    respondents insurer said it was investigating, but in its final letter of June
    28, 2013, she was of the view that it neither identified the cause of the
    flooding nor the respondents position on liability. Further, despite repeated
    requests from the appellant, the respondent continued to refuse to show the
    appellant the video of its inspection, provide its investigation reports, or advise
    what position on liability it would take.

[13]

Paragraph 28 of the affidavit explains plainly the decision by the
    appellants lawyer to issue the Notice of Action in Superior Court:

While I did not believe that the Region denied
    liability in the June 28, 2013 letter nor was the cause of the flooding
    determined as at June 28, 2013, I nevertheless issued the Notice of Action out
    of an abundance of caution, to preserve Har Jos rights against the Region in
    the event that the damages were caused by factors unrelated to the construction
    activities and were found not to meet the definition of injurious affection
    pursuant to the [
Expropriation Act
].

The Motion Judges Reasons

[14]

The motion judge began from the premise that the appellants claim
    against the respondent is based on the allegation that the respondents
    construction on Davis Drive caused the flooding on its property. He drew that
    conclusion from the letter the appellants lawyer wrote to the respondent on
    June 3, 2013, which asserts that the construction work caused the flooding and
    states that the appellant would be making a claim for the damage from the
    construction in addition to a separate claim for injurious affection.

[15]

On the motion, the respondent argued that the letter demonstrated that
    the appellant knew the constituent elements of its claim as of the date the
    letter was sent.

[16]

The appellant argued, relying on
Crombie Property Holdings Limited
    v. McColl-Frontenac Inc. (Texaco Canada Limited)
, 2017 ONCA 16, 406 D.L.R.
    (4th) 252, that it had only a suspicion regarding the cause of the flooding,
    not actual knowledge. The motion judge rejected the appellants position. He
    found that the appellant had sufficient information to make out a
prima
    facie
case against the [respondent] on June 3, 2013, based on the content
    of the demand letter, stating:

The particulars [the appellant] knew about the
    construction enabled it to form an opinion that the [respondent]'s conduct
    caused or contributed to the flooding and the damages that flowed from the
    flooding. While ultimately expert opinion may be required for an ultimate
    determination, it was not necessary for the [appellant] to determine it had a
prima
    facie
case.

[17]

The
    motion judge went on to hold that if he was mistaken on the finding of
    sufficient knowledge on June 3, 2013, then the appellant also failed to lead
    evidence of any steps it took either before or after June 28, 2013 to meet its positive
    obligation to determine the cause of the flooding. He concluded that the
    appellant had not rebutted the presumption contained in s. 5(2) of the
Limitations
    Act, 2002
that it knew it had a claim on the date the flooding occurred.

Issues on the Appeal

[18]

The
    appellant raises the following three issues on appeal:

1)

Did the motion judge
    err in law or misapprehend the evidence by finding that the appellant had
    sufficient knowledge regarding the cause of the flooding on June 3, 2013, to
    commence an action against the respondent in Superior Court for damages that
    were not properly damages for injurious affection, and therefore not within the
    exclusive jurisdiction of the OMB?

2)

Did the motion judge
    err in law by finding that the appellant had an ongoing duty, up to the date it
    commenced the action, to discover the cause of the damage?

3)

Is the effect of recent
    case law from this court to postpone the commencement of the limitation period until
    the OMB determines its jurisdiction over the claim?

Analysis

(1)

Did the motion judge err by finding that on June 3, 2013, the appellant
    had sufficient knowledge regarding the cause of the flooding to commence an
    action for damages in Superior Court?

[19]

The
    basic two-year limitation period set out in s. 4 of the
Limitations Act,
    2002
begins to run on the day the claim was discovered. The date of
    discovery is governed by s. 5(1), which states that a claim is discovered on
    the earlier of:

(a) the day on which the
    person with the claim first knew,

(i) that the injury, loss
    or damage had occurred,

(ii) that the injury,
    loss or damage was caused by or contributed to by an act or omission,

(iii) that the
act

or omission was that of the
    person against whom the claim is made, and

(iv) that, having regard
    to the nature of the injury, loss or damage, a proceeding would be an
    appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the
    abilities and in the circumstances of the person with the claim first ought to
    have known of the matters referred to in clause (a).

[20]

Therefore, a claim is discovered on the earlier of two dates: the day on
    which a plaintiff either knew or ought to have known the constitutive elements
    of the claim and that a proceeding in Superior Court would be an appropriate
    means to seek a remedy.

[21]

As is clear from the reasons of the motion judge, his analysis of the
    limitation issue focused on whether the appellant had sufficient knowledge of
    the cause of the flooding to commence an action against the respondent for
    damages. In my view, he erred in two ways: first in law, by not considering
    whether an action in Superior Court would be an appropriate means to seek a
    remedy; and second, by misapprehending the evidence of the appellants lawyer,
    which explained why up until June 26, 2013, the appellant believed that a claim
    before the OMB would be an appropriate means to seek a remedy for the flooding
    damage.

[22]

The motion judge noted that the appellants position was always that the
    respondents construction on the expropriated lands caused the flooding. And he
    observed that the Statement of Claim tracks the language of the June 3 letter
    to a large extent, which demonstrated that the appellant knew of its claim on
    that day.

[23]

However, in making this finding, the motion judge failed to consider the
    affidavit of the appellants lawyer, which explained that, to the extent that
    the damages from the flood properly formed part of a claim for damages for
    injurious affection under the
Expropriations Act
, they would be part
    of the appellants existing OMB claim, and that she only commenced this action in
    Superior Court out of an abundance of caution, in case it turned out that the
    flooding was not caused by the respondents construction on Davis Drive, but by
    some other factors that did not meet the definition of injurious affection.

[24]

This
    explanation is based on provisions of the
Expropriations Act
that
    provide for damages for injurious affection to landowners affected by an
    expropriation, and which give the OMB exclusive jurisdiction to award such
    damages. I refer to the definition of injurious affection in s. 1(1), the
    right to claim damages for injurious affection provided by ss. 21 and 26, and
    the exclusive jurisdiction of the OMB to adjudicate the claims under s. 29(1),
    as well as s. 36 of the
Ontario Municipal Board Act
, R.S.O. 1990, c.
    O.28.

[25]

Specifically,
    s. 1(1) of the
Expropriations Act
defines injurious affection as
    follows:

injurious affection means,

a) where a statutory
    authority acquires part of the land of an owner,

(i) the reduction in
    market value thereby caused to the remaining land of the owner by the
    acquisition or by the construction of the works thereon or by the use of the
    works thereon or any combination of them, and

(ii) such personal and
    business damages, resulting from the construction or use, or both, of the works
    as the statutory authority would be liable for if the construction or use were
    not under the authority of a statute,

resulting from the construction and not the use of
    the works by the statutory authority, as the statutory authority would be
    liable for if the construction were not under the authority of a statute, and
    for the purposes of this clause, part of the lands of an owner shall be deemed
    to have been acquired where the owner from whom lands are acquired retains
    lands contiguous to those acquired or retains lands of which the use is
    enhanced by unified ownership with those acquired;

[26]

Section
    21 provides an affected landowner with a right to compensation from a statutory
    authority (here, the respondent municipality) for injurious affection:

A statutory authority shall compensate the owner of
    land for loss or damage caused by injurious affection.

[27]

Where
    a statutory authority and landowner cannot come to an agreement regarding
    compensation for injurious affection, then under s. 26, either party may bring
    a claim before the OMB:

Where the statutory authority and the owner have not
    agreed upon the compensation payable under this
Act
and, in the case
    of injurious affection, section 22 has been complied with, or, in the case of
    expropriation, section 25 has been complied with, or the time for complying
    therewith has expired,

(a) the statutory authority or the
    owner may serve notice of negotiation upon the other of them and upon the board
    of negotiation stating that the authority or the owner, as the case may be,
    requires the compensation to be negotiated under section 27; or

(b) where the statutory authority
    and the owner have agreed to dispense with negotiation proceedings, the
    statutory authority or the owner may serve notice of arbitration upon the other
    of them and upon the Board to have the compensation determined by arbitration.

[28]

Regarding
    the OMBs jurisdiction to adjudicate injurious affection claims brought before
    it, s. 29(1) provides:

The Board shall determine any compensation in
    respect of which a notice of arbitration has been served upon it under section
    26 or 27, and, in the absence of agreement, determine any other matter required
    by this or any other Act to be determined by the Board.

[29]

Section 36 of the
Ontario Municipal Board Act
clarifies that this jurisdiction is exclusive:

The Board has exclusive jurisdiction in all cases
    and in respect of all matters in which jurisdiction is conferred on it by this
Act
or by any other general or special
Act
.

[30]

The effect of these provisions is to provide a process for compensation
    for damages for injurious affection, which includes reduced market value of
    lands affected by expropriation, as well as damages to the affected lands
    arising from the construction work done by the statutory authority on the
    expropriated lands.

[31]

In
Curactive Organic Skin Care Ltd. v. Ontario
, 2012 ONCA 81, 105
    L.C.R. 26, this court dismissed claims brought in a class proceeding because
    they were, in substance, claims for injurious affection beyond the jurisdiction
    of the Superior Court. The court held that the combination of the
Expropriations
    Act
and the
Ontario Municipal Board Act
confers exclusive jurisdiction
    over injurious affection claims on the OMB. The effect is that no matter the
    form of the claim, if it is, in substance, a claim for damages for injurious
    affection, it must be brought before the OMB and not to court.
[1]

[32]

Although the record in this case does not provide a full explanation of
    the progress or lack thereof of the injurious affection claim brought by the
    appellant in 2011, and any additional claim for damage caused by the flood, the
    affidavit of the lawyer for the appellant makes it clear that the appellant is
    first taking that route to compensation. Only if the OMB determines that the
    claim for damages is not properly before it because the respondents
    construction did not cause the flooding, will the appellant seek its damages
    from the respondent in court in this action. Furthermore, the appellants
    pleadings clearly include references to negligence and nuisance, which can
    properly form the basis for a claim in Superior Court, but not the OMB.

[33]

If in fact the flooding damage was caused by the respondents
    construction activities, there is no jurisdiction in the Superior Court to
    entertain such a claim. It is only if some other activity taken by the
    respondent or for which it is responsible caused the flood damage, that a claim
    is compensable through an action against the respondent in Superior Court.

[34]

The first time there was a suggestion that the flooding may have been
    caused by something other than the construction was in the June 28, 2013 letter,
    which advised the appellant that the respondents construction did not cause
    the flooding and that a blocked catch basin may be at fault. Therefore, it was
    only on that date that the appellant knew or ought to have known, in accordance
    with s. 5(1)(a)(iv) of the
Limitations Act, 2002
that, having regard
    to the nature of the injury, loss or damage, a [court] proceeding would be an
    appropriate means to seek to remedy it, and not a proceeding before the OMB.

[35]

Therefore, because the motion judge failed to consider when the
    appellant had or ought reasonably to have had sufficient knowledge that a court
    proceeding would be an appropriate means to seek a remedy, he misapprehended
    the significance of the evidence of the lawyer, erred in law by failing to
    consider this evidence in relation to the appropriate means requirement of s.
    5(1)(a), and ultimately in concluding that the action was commenced out of time.

[36]

I would therefore set aside the decision of the motion judge and dismiss
    the motion for summary judgment.

(2)

Did the motion judge err by finding that the appellant had an
    ongoing duty to discover the cause of the damage up to the date it commenced
    the action?

[37]

The
    respondent argues that, even if the motion judge erred on the first issue, the
    action is statute-barred on the motion judges alternative finding that the
    appellant did not rebut the presumption under s. 5(2) of the
Limitations
    Act, 2002
by failing to exercise due
    diligence.

[38]

In
    my view, the motion judge also erred in law  on this alternative ground by
    holding that the appellant had to show it acted with due diligence after it had
    actual knowledge of its claim, in order to rebut the presumption in s. 5(2)
.
Specifically, the motion judge said:

The plaintiff must put its best foot forward. If it takes the
    position that the limitation period had not commenced even after receipt of the
    June 28th letter and that it was not unreasonable for the plaintiff to await
    receipt of that letter, the plaintiff has led no evidence of steps it took to
    fulfill its positive duty to discover its claim after the letter.

Although I accept that the issue before the Court
    was whether or not the claim was discoverable prior to June 28th. In
    determining whether or not the plaintiff was taking reasonable steps to
    determine its claim, I may consider what it did before and after June 28th.

[39]

In
Fennell v. Deol
, 2016 ONCA 249, 97 M.V.R. (6th) 1, at paras.
    21 and 26, this court explained that s. 5(2) creates a presumption regarding
    when a person had actual knowledge of its claim under s. 5(1)(a), and that the
    presumption does not apply to the inquiry under s. 5(1)(b), which asks when the
    claim ought reasonably to have been discovered

[40]

A plaintiff rebuts the presumption under s. 5(2) by demonstrating when
    it gained actual knowledge of its claim (s. 5(1)(a)). A plaintiff need not show
    that it exercised due diligence in order to rebut that presumption, because due
    diligence is only relevant to the objective inquiry under s. 5(1)(b), not the
    inquiry into subjective knowledge under s. 5(1)(a):
Fennell
, at paras.
    23-24.

[41]

Here, by holding that the appellant failed to show that it took
    reasonable steps to investigate its claim after it knew of its claim on June
    28, 2013, the motion judges error went one step further.

[42]

A claim is discovered on the earlier of two dates: when the plaintiff
    actually knew of its claim, or when a reasonable person, with the plaintiffs
    abilities and in its circumstances, would have discovered the claim. If a
    plaintiff fails to exercise the diligence a reasonable person would, the claim
    is potentially discoverable earlier than the date the plaintiff had actual
    knowledge of the claim. Due diligence is therefore only relevant to the period
    of time preceding a plaintiffs actual knowledge of its claim, not the period
    after. Once a claim has been discovered, there is no ongoing duty on a
    plaintiff to further investigate the claim. Once the plaintiff has knowledge of
    its claim, then the limitation clock has begun running, and all the plaintiff
    is required to do is commence an action before the limitation period expires.

(3)

Application of
407 ETR Concession Company Limited v. Day
and
Presidential
    MSH Corporation v. Marr Foster & Co. LLP
to the issue of the
    commencement of the limitation period?

[43]

The appellant argued for the first time in oral argument that the recent
    decisions of this court in
407 ETR Concession Company Limited v. Day
,
    2016 ONCA 709, 133 O.R. (3d) 762 and
Presidential MSH Corporation v. Marr
    Foster & Co. LLP
, 2017 ONCA 325, 135 O.R. (3d) 321 apply, with the
    effect that the limitation period for this action will not begin to run until
    the OMB determines whether it has exclusive jurisdiction over the claim for
    damage arising from the flooding.

[44]

Case law suggests that in circumstances similar to those in this case,
    plaintiffs have often commenced two proceedings, one before the OMB and one in the
    Superior Court. Defendants may then seek a stay of the court proceeding pending
    a determination of jurisdiction by the OMB, or even dismissal of the court
    claim if it is clearly a claim for injurious affection: see
e.g.

Montana
    Equipment Ltd. v. Robert B. Somerville Company et al
, 2017 ONSC 3092;
Great
    Land (Westwood) Inc. v. York (Regional Municipality)
, 2016 ONSC 5975, 3
    L.C.R. (2d) 1; and
Curactive Organic Skin Care Ltd. v. Ontario
, 2011
    ONSC 2041, 120 L.C.R. 238, affd 2012 ONCA 81, 105 L.C.R. 26.

[45]

The appellants argument is that this courts decisions in
407 ETR
and
Presidential MSH
negate the need to start two proceedings in
    respect of claims that may potentially be characterized as claims for injurious
    affection, as the limitation period would not begin to run until the OMB
    decided its jurisdiction over the claims.

[46]

Because I have concluded that the appellants claim is not statute-barred
    in any event, it is not necessary to decide whether the
407 ETR
and
Presidential
    MSH
cases apply to postpone the commencement of the limitation period. As the
    issue was only raised by the appellant in oral argument on the appeal, and the
    court did not receive full written submissions, the appropriate course is to
    leave the issue undecided and not address it on this appeal.

Result

[47]

I would allow the appeal, set aside the dismissal of the action, and
    dismiss the motion for summary judgment. I would award costs of the appeal to
    the appellant fixed in the amount of $16,000 inclusive of disbursements and
    HST. I would also award costs of the motion to the appellant. If the parties
    are not able to agree on the amount, they may make brief written submissions
    (maximum two pages) within three weeks of the release of these reasons.

Released: G.H. May 23, 2018

K. Feldman J.A.

I Agree. S.E. Pepall J.A.

I Agree. Grant Huscroft J.A.

[1]

Although the OMB has been continued as the
    Local Planning Appeal Tribunal under s. 2(1) of the
Local Planning Appeal
    Tribunal Act
, 2017, S.O. 2017, c. 23, Sch. 1, which came into force April
    3, 2018, claims for injurious affection under the
Expropriation Act
remain within the exclusive jurisdiction of the new Tribunal by the virtue of
    ss. 2(2) and 11(1) of the
Local Planning Appeal Tribunal Act
. Subsection
    2(2) of that
Act
provides that any reference to the OMB in any Act or
    regulation is deemed to be a reference to the Tribunal, while s. 11(1) confers
    the Tribunal with exclusive jurisdiction to adjudicate matters within its
    jurisdiction.


COURT OF APPEAL FOR ONTARIO

CITATION: Jackson v. Stephen Durbin and Associates, 2018 ONCA
    424

DATE: 20180504

DOCKET: C64417

Benotto, Brown and Miller JJ.A.

BETWEEN

Davis Jackson

Applicant (Respondent)

and

Stephen Durbin and Associates

Respondent (Appellant)

Sean Dewart and Shoshana Bentley-Jacobs, for the
    appellant

Michael G. Cochrane, for the respondent

Heard: April 20, 2018

On appeal from the judgment of Justice Thomas R. Lofchik
    of the Superior Court of Justice, dated September 14, 2017, with reasons
    reported at 2017 ONSC 5396.

Benotto J.A.:

[1]

The sole issue in this appeal is whether a Results
    Achieved Fee charged by the appellant law firm in a family law matter is a
    prohibited contingency fee agreement under the
Solicitors Act
, R.S.O. 1990, c. S. 15 (the
Act
).
    I have concluded that the fee is a contingency fee agreement within the meaning
    of the
Act
and is thus prohibited.

BACKGROUND

(1)

Facts

[2]

The respondent retained the appellant, Stephen
    Durbin and Associates, to represent him in family law litigation. The primary
    issue was the custody of the respondents 6-year old daughter.

[3]

The respondent signed a retainer agreement
    outlining hourly rates, daily fees for court appearances and an automatic
    yearly increase of 15% with respect to those fees. The retainer agreement also
    provided for an increase in fees in the event of a positive result achieved
    (Results Achieved Fee).

[4]

The respondent was a police officer, then
    earning about $96,000 per year. He depleted his retainer funds of $10,000 and
    began accruing arrears. He signed a direction that any funds payable to him
    from the litigation would be paid to the appellant in trust and the appellant
    would deduct outstanding fees from those funds.

[5]

After a lengthy trial, the respondent was
    awarded sole custody of the child, half of the proceeds of sale of the
    matrimonial home and costs of $192,000. The funds were all payable to the
    appellant pursuant to the direction. The appellant received $423,510.47 in
    trust representing the respondents share of the proceeds of sale from the
    matrimonial home plus the costs award.

[6]

The appellant deducted $132,597.74 from the
    trust to satisfy the outstanding account. The appellant also unilaterally deducted
    a Results Achieved Fee of $72,433.24. It is unclear on the record how the
    appellant arrived at this amount.

[7]

The respondent did not object to the deduction
    of fees to satisfy the outstanding account. He did, however, object to the Results
    Achieved Fee. He sought to have it assessed, but the assessment officer
    concluded that a judge would have to decide the matter as a question of law.

[8]

The application judge determined that the Results
    Achieved Fee is a contingency fee agreement as defined by the
Act
, and thus is a prohibited charge.

(2)

Statutory context

[9]

The
Act
provides:

Purchase of interest prohibited

28 A solicitor shall
    not enter into an agreement by which the solicitor purchases all or part of a
    clients interest in the action or other contentious proceeding that the
    solicitor is to bring or maintain on the clients behalf.

Contingency fee agreements

28.1 (1) A solicitor may enter into a contingency fee
    agreement with a client in accordance with this section.

Remuneration dependent on success

(2) A solicitor may enter into a contingency fee agreement that
    provides that the remuneration paid to the solicitor for the legal services
    provided to or on behalf of the client is
contingent, in
    whole or in part, on the successful disposition or completion of the matter
in respect of which services are provided.

No contingency fees in certain matters

(3)
A solicitor shall not enter into a
    contingency fee agreement if the solicitor is retained in respect of
,

(a) a proceeding under the
Criminal
    Code
(Canada) or any other criminal or quasi-criminal proceeding; or

(b)
a family
    law matter
. [Emphasis added.]

PARTIES POSITIONS

[10]

The appellant submits that the Results Achieved
    Fee is not a contingency fee agreement, but rather a permissible premium or
    bonus. It points to two features that it claims distinguish the two.

[11]

First, under the retainer agreement, the
    respondent was liable to pay the appellants fees regardless of the outcome at
    trial. The appellant argues that contingency fee agreements are limited to
    those wherein the lawyer only receives compensation for a successful result.

[12]

Second, the Results Achieved Fee was linked to
    success at trial, not the specific monetary result. The appellant argues that
    the public policy concerns that give rise to the prohibition against
    contingency fee agreements in family law matters do not arise where the
    lawyers fee is not tied to a fixed portion of the monetary result.

[13]

The appellant relies on a series of civil law
    cases, including
Teplitsky, Colson v. McCrea
, [2008] O.J. No. 6014 (S.C.)
.
There the clients fee arrangement in an employment matter provided
    it would be augmented to include a percentage of the recovery that exceeded a
    certain offer to settle. In determining whether this constituted a contingency
    fee agreement, Strathy J. (as he then was) distinguished between a bonus in
    the event of success and a contingency fee agreement. At paras. 77-78, he
    stated:

There has been no
    authority cited to me other than the statute itself, for the interpretation of
    Section 28 to apply to agreements which are not in and of themselves
    conditional on success, but which contain a bonus in the event of success. This
    agreement provided for a fee in any event, but a bonus calculated on a
    percentage basis in the event of success. Nor is any authority cited for the
    proposition that it is the charging of a percentage that makes the agreement
    objectionable.

While contingency
    fee agreements are frequently based on a percentage, the calculation of a part
    of the lawyers compensation by reference to a percentage, does not make the
    agreement bad as a contingency fee agreement.

[14]

The appellant also relies on
Warnica
    v. Van Moorlehem
, 2012 ONSC 4241, in which clients agreed
    to pay an amount equal to 30% of the amount recovered in the action brought on
    their behalf. Relying on
Teplitsky
, Quigley J. rejected that the mere payment of percentage-based
    remuneration renders an agreement a contingency fee agreement. He stated, at
    para. 33:

So the question is, just what is a
    contingency agreement? Is every agreement involving the payment of
    percentage-based remuneration to the solicitor, based upon the amount received
    in damages at the end of a trial or settlement negotiation a contingency fee
    agreement? Clearly the answer is no. Regardless of whether percentage
    compensation may be paid in whole or in part, the only fee arrangements which
    will fall within the definition are those embraced by section 28 of the
Solicitors
    Act
where the solicitor effectively purchases all or part of the clients
    interest and potential success in the action. The mere calculation of a part of
    a lawyers compensation by reference to a percentage does not necessarily makes
    the agreement bad as a contingency fee agreement, and thus require the
    protections enacted in the statute and the Regulations.

[15]

Justice
    Quigley concluded that the agreement at issue was a contingency fee agreement
    since, under the plain terms of the agreement, the solicitor would receive no
    fees for his services unless an amount was recovered.

[16]

The respondent takes the position that the
    application judge was correct in finding that the Results Achieved Fee was a
    contingency fee agreement in contravention of the
Act
.

ANALYSIS

(1)

Overview

[17]

As I will explain, the appellants position is
    outdated and does not accord with the current provisions of the
Act
. The
Act
was amended in 2004 to
    include the phrase contingent, in whole or in part on a successful outcome.
    Consequently, a premium or bonus added on to a lawyers fee is captured by the
    meaning of contingency fee agreement and is thus prohibited by s. 28.1(3)(b).

[18]

To demonstrate the meaning of a contingency fee
    agreement, I first consider the plain and ordinary meaning of the words in the
Act
; I then consider the broader statutory context. I conclude that a
    contingency fee agreement is an agreement under which
any part
of a lawyers compensation is
    tied to the successful resolution of the matter for which the lawyer was
    retained. Accordingly, the Results Achieved Fee is a contingency fee agreement
    and is prohibited by the
Act
.

(2)

Standard of review

[19]

The interpretation of the term, contingency fee
    agreement, under the
Act
is a question of law, reviewable on a correctness standard:
Housen v. Nikolaisen
, 2002 SCC
    33, [2002] 2 S.C.R. 235, at para. 8.

[20]

Whether the Results Achieved Fee constitutes a
    contingency fee agreement is a question of mixed fact and law. The application
    judges conclusion on this point is entitled to deference absent an extricable
    error in principle or palpable and overriding error:
Housen
, at para. 36.

(3)

The meaning of a contingency fee agreement

[21]

In the past, this court and others have described
    contingency fee agreements as those in which a lawyers fees are entirely
    dependent upon success. Specifically, in
McIntyre Estate v. Ontario
    (Attorney General)
(2002), 61 O.R. (3d) 257 (C.A.),
    OConnor A.C.J.O. stated, at para. 1:

Contingency fee
    agreements may take a variety of forms, but the one element common to all of
    them is that the client only becomes liable to pay the lawyers fees in the
    event of success in the litigation.

[22]

However, this description predated the statutory
    provisions at issue. At the time of
McIntyre
,
    the
Act
(as discussed below) was significantly
    different.

[23]

The change in the
Act

to include in whole or in part appears to have gone unnoticed by
    lower court decisions after
McIntyre
, and
    renders
Teplitsky
and
Warnica
inapplicable.
[1]

[24]

Thus, I interpret the meaning of a contingency
    fee agreement in light of the current wording of the
Act.

(a)

Principles of statutory interpretation

[25]

The modern approach to statutory interpretation is
    well established. The words of an act or provision are to be read in their
    entire context and in their grammatical and ordinary sense harmoniously with
    the scheme of the Act, the object of the Act, and the intention of Parliament:
Rizzo & Rizzo Shoes Ltd. (Re)
, [1998] 1
    S.C.R. 27, at para. 21, quoting E. A. Driedger,
Construction of
    Statutes
(2nd ed. 1983), at p. 87; and
Bell ExpressVu Limited
    Partnership v. Rex
, 2002 SCC 42, [2002] 2
    S.C.R. 559, at para. 26
.

[26]

It is presumed that the legislature does not
    intend to produce absurd consequences, such as rendering some aspect of a
    statute pointless or futile:
Rizzo
, at para. 27. It is further presumed that the legislature avoids
    superfluous or meaningless words and does not  speak in vain:
British Columbia Human Rights Tribunal v. Schrenk
, 2017 SCC 62, [2017] 2 S.C.R. 795, at para. 45, quoting Ruth
    Sullivan,
Sullivan on the Construction of
    Statutes
, 6th ed. (Markham, Ont.: LexisNexis, 2014), at
    para. 8.23.

(b)

The grammatical and ordinary meaning

[27]

Section 15 of the
Act
defines a contingency fee
    agreement as an agreement referred to in section 28.1. Section 28.1(2), reproduced
    in its entirety above, describes a contingency fee

agreement
    as one that provides the remuneration paid to a solicitor for legal services is
    contingent
in
    whole or in part

on
    the successful disposition or completion of the matter for which the services
    were provided.

[28]

I make several observations regarding the grammatical and
    ordinary meaning of the words in this provision.

[29]

First,
all
of the lawyers remuneration need not be contingent on
    success. Section 28.1(2) explicitly captures agreements where only
part
of a lawyers remuneration is contingent.

[30]

Second, the legislatures inclusion of the language in whole
or in part
 (emphasis added) must be given real meaning
    and must not be interpreted so as to render it mere surplusage:
R. v. Proulx
, 2000 SCC 5, [2000] 1 S.C.R. 61,
    at para. 28. This clear legislative language provides reason to depart from
    this courts statement in
McIntyre
.

[31]

Lastly, s. 28.1(2) stipulates that remuneration must be contingent
    on the successful disposition or completion of the matter. It does not
    specify that the lawyers fees must be tied to  or contingent on  the
    specific monetary result. It is broader in scope.

[32]

Based on these observations, the grammatical and ordinary wording
    of the relevant provisions does not support limiting contingency fee agreements
    to those in which (i) a lawyers fees are only payable in the event of success
    and/or (ii) a lawyers fees are calculated by reference to the specific
    monetary result  as urged by the appellant.

[33]

Nor does the broader context support such an interpretation.

(c)

The entire context

(i)

The history of s. 28

[34]

The appellant argues that the application judge failed to consider
    whether the appellant had purchased all or part of the respondents interest in
    the action pursuant to s. 28 of the
Act
. It claims that this was a necessary analysis, since contingency
    fee agreements permitted by s. 28.1(2) are those referred to in s. 28.

[35]

This interpretation is consistent with the line of analysis adopted
    in
Teplitsky
and
Warnica
. For example, in
Warnica
,

Quigley J. described
    s. 28.1 as the exception to the antecedent stipulation in s. 28 (at para. 29)
    and held, at para 33:

[T]he only fee arrangements which
    will fall within the definition [of a contingency agreement] are those embraced
    by section 28 of the
Solicitors Act
where the solicitor effectively
    purchases all or part of the clients interest and potential success in the
    action.

[36]

With respect, I do not agree that s. 28 defines or limits
    contingency fee agreements in this manner, nor acts as a necessary antecedent. For
    one thing, this interpretation is contrary to the express language of s. 15,
    which defines contingency fee agreements as those referred to in s. 28.1 (not
    s. 28). More importantly, this interpretation
overlooks the context
    of ss. 28 and 28.1 and how they have developed.

[37]

Historically, courts in Ontario held that
    lawyers contingency fee agreements were champertous and unenforceable:
McIntyre
, at para. 49
. As this
    court explained in
McIntyre
, at para. 26,

champerty at common law was directed at:

[T]hose who, for
    an improper motive, often described as wanton or officious intermeddling,
    become involved with disputes (litigation) of others in which the maintainer
    has no interest whatsoever and where the assistance he or she renders to one or
    the other parties is without justification or excuse  [and] the maintainer
    shares in the profits of the litigation.

[38]

In 1897, the Ontario legislature enacted
An Act Respecting
    Champerty
, R.S.O. 1897, c. 327 (the
Champerty
    Act
), codifying that: All champertous agreements are forbidden, and
    invalid.

[39]

Over time, rising litigation costs and concerns about access to
    justice resulted in a shift in attitude towards contingency fee agreements:
McIntyre
, at para. 55. In 2004, the legislature amended the
Act

to permit contingency fees
    in certain circumstances pursuant to s. 28.1.

[40]

While contingency fee agreements are now permitted, the champertous
purchase
    of a clients interest in litigation remains prohibited and the
Champerty
    Act
remains in effect
.
Section 28 relates to this
    separate and distinct prohibition.

[41]

The
    distinctness of s. 28 from s. 28.1 is evident from the legislative evolution of
    s. 28. Prior to the 2004 amendments, s. 28 read as follows:

Nothing  gives validity to a purchase by a solicitor of the
    interest or any part of the interest of his or her client in any action or
    other contentious proceeding to be brought or maintained,
or gives validity to an agreement by which a solicitor retained
    or employed to prosecute an action or proceeding stipulates for payment only in
    the event of success in the action or proceeding, or where the amount to be
    paid to him or her is a percentage of the amount or value of the property
    recovered or preserved or otherwise determinable by such amount or value or
    dependent upon the result of the action or proceeding
. [Emphasis added.]

[42]

In
    2004, the legislature removed the reference in s. 28 to agreements stipulating
    for payment in the event of success, tied to a percentage of recovery, determinable
    by the amount recovered, or dependent on the result of the action. These are
    contingency fee agreements now permitted in accordance with s. 28.1.

[43]

However,
    the legislature left the reference to the purchase of a clients interest in an
    action. To interpret s. 28 as an antecedent to s. 28.1, wherein agreements must
    be captured by s. 28 to trigger s. 28.1, would render the legislatures differing
    treatment of the old elements of s. 28 pointless, contrary to the principles
    of statutory interpretation.

(ii)

Policy concerns

[44]

I do not accept the appellants submission that the
    public policy concerns regarding contingency fee agreements in family law
    matters do not apply where the agreement is contingent only on success, and not
    tied to a specific monetary result.

[45]

Family law litigation is fundamentally different from civil
    litigation.
One of the unique aspects of family law is that monetary recovery
    does not occur in the same way in family law litigation as it does in civil
    litigation. Instead the family finances  which are depleted daily by
    litigation costs  are divided. No outside funds are injected into the recovery.
    In these circumstances, it is inappropriate for a lawyers fee to be contingent
    on the monetary result.

[46]

It
    is also inappropriate for a lawyers fees to be contingent on success. In
    family law litigation, the emphasis is on resolution, mediation and ways to
    save time and expense in proportion to the complexity of the issues:
Frick v. Frick
, 2016 ONCA 799, 132 O.R. (3d)
    321, at para. 11. A fee based on success risks detracting from, and indeed undermining,
    this emphasis.

[47]

When
    the primary issue is custody, a fee based in whole or in part on results
    achieved is even less appropriate.
There are no winners and
    losers. A custody decision by the court involves a determination of a childs
    best interests. It cannot be scrutinized to determine which parent had the more
    successful disposition.

[48]

The
    legislature excluded family law matters from contingency fee agreements on
    public policy grounds under s. 28.1(3)(b) of the
Act
. There is no reason
    to limit that exclusion to only agreements tied to monetary results.

(d)

Conclusion

[49]

A contingency fee agreement
under the
Act

is one in which any part
    of a lawyers compensation is dependent on the successful disposition or
    completion of the matter for which the lawyer was retained.

(4)

Is the
Results Achieved
    Fee a contingency fee?

[50]

The
    appellants retainer agreement provided that, in addition to hourly rates and
    daily counsel fees, the respondent would be charged an increase in fees in the
    event of a positive result achieved, defined as the Results Achieved Fee. This
    Results Achieved Fee
part of
the appellants remuneration  was based
    on a positive result achieved
i.e.
the successful disposition of the
    matter.

[51]

Accordingly,
    the Results Achieved Fee is a contingency fee agreement per the
Act
and is prohibited.

CONCLUSION

[52]

The appeal is dismissed with costs payable to the respondent in the
    agreed upon amount of $9,000 inclusive of disbursements and HST.

M.L. Benotto J.A.

David Brown J.A.

B.W. Miller J.A.

Released: May 4, 2018

[1]

It appears that the wording change was not brought to the
    attention of the court in either case.


COURT OF APPEAL FOR ONTARIO

CITATION: Kalair v. Central 1 Credit Union, 2018 ONCA 434

DATE: 20180508

DOCKET: M48427 (M48292)

LaForme, Watt and Nordheimer JJ.A.

BETWEEN

Omar Farooq Kalair

Plaintiff (Appellant/Moving Party)

and

Central 1 Credit Union
and UM Financial Inc.

Defendants (
Respondent/Responding Party
)

Kenneth E. Wise, for the moving party

Doug Smith and Alannah Fotheringham, for the responding
    party

Heard: May 4, 2018

By the Court:

[1]

Mr. Kalairs motion for an extension of time to
    file a notice of appeal  which he had missed by 2 weeks - was dismissed by
    Roberts J.A. on October 11, 2017. Justice Roberts was satisfied that Mr. Kalair
    had formed the requisite intention to appeal, provided an adequate explanation
    for the short delay, and there was no prejudice occasioned to the respondent
    from the delay. However, she concluded that Mr. Kalair had failed to meet the
    admittedly low threshold of demonstrating that there was some merit to the
    proposed appeal such that the court should not reasonably deny the important
    right of appeal.

[2]

Pursuant to s. 7(5) of the
Courts of
    Justice Act
,
R.S.O. 1990, c. C.43,
Mr. Kalair moved before this court to review the decision of Roberts
    J.A. and set aside her order or vary it. As additional support for this review,
    and by way of an affidavit dated April 26, 2018 contained in a supplementary
    motion record filed April 27, 2018, Mr. Kalair outlines proposed merits of the
    appeal that were not before Roberts J.A.

[3]

At the outset, the respondent, in very brief
    submissions, objected to the April 26
th
affidavit being considered
    on this review, arguing it was fresh evidence improperly before us. We heard
    full argument from Mr. Kalairs current counsel on both the issue of the
    alleged fresh evidence and on the merits of the review. We dismissed his motion
    for review and advised that reasons would follow. These are the reasons.

[4]

Mr. Kalairs original position on the merits of his appeal described in
    his original affidavit dated November 17, 2017 that Roberts J.A. considered
    were that:

[T]he grounds for appeal essentially are based
    on the severely lacking evidence that was before [the motion judge]. Had that
    evidence been properly produced the outcome of my case would likely have been
    different.

[5]

In Mr. Kalairs April 26
th
affidavit
    he provides particulars of merits of the appeal that were not before Roberts
    J.A.. In the affidavit he claims that much of the legal merits of [his]
    appeal were not known to [him] and [his] new counsel until more recently when
    [his] previous counsel provided information and parts of the file.

[6]

A full panel of this court owes considerable
    deference to a chambers judges decision regarding whether to grant an
    extension of time:
R. v. Gatfield
, 2016 ONCA
    23, at para. 11.

[7]

The conclusory statements in the affidavit
    before Roberts J.A. do not support the argument that she may have made an error
    in dismissing Mr. Kalairs motion. To the contrary, Roberts J.A. addressed all
    the relevant factors and properly applied those factors to the evidentiary
    record before her. In particular, she concluded there was no merit to the
    appeal. We agree.

[8]

The findings on the summary judgment motion that the applicable
    limitations period had expired, and that Mr. Kalair did not have standing to
    advance claims on behalf of his companies, are unassailable. His complaints, on
    his proposed appeal, about undertakings and refusals not being answered, and
    that his motion to amend the statement of claim to add the Receiver was not
    heard, are of no consequence to these two central findings

[9]

The end result is that Mr. Kalair has failed to
    provide us with any reason why we should interfere with the exercise of
    discretion by Roberts J.A. His most recent affidavit filed on this motion,
    aside from its propriety, does not assist him; it too fails to demonstrate that
    there is any merit to his proposed appeal.

[10]

Mr. Kalairs motion for review is therefore dismissed.
    The respondent is awarded costs of this motion fixed in the amount of $5,000
    inclusive of disbursements and HST.

Released: HSL  MAY 8 2018

H.S. LaForme J.A.

David Watt J.A.

I.V.B. Nordheimer
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Koetsier v. St-Denis, 2018 ONCA 477

DATE: 20180522

DOCKET: C64885

Lauwers, Benotto and Nordheimer JJ.A.

BETWEEN

Mark Koetsier

Applicant (Appellant)

and

Carmen St-Denis

Respondent (Respondent in Appeal)

Michelle Kropp and Kenneth Peacocke, for the appellant

Réjean Parisé, for the respondent

Heard and released orally: May 18, 2018

On appeal from the judgment of
    Justice R.D. Gordon of the Superior Court of Justice, dated January 3, 2018
    with reasons reported at 2018 ONSC 60.

REASONS FOR
    DECISION

[1]

This appeal comes to this court as a result of an anomaly in the
Courts
    of Justice Act
whereby certain appellants have two appeals as of right in child
    custody matters. Consequently, this court is called upon to consider an order
    of the Ontario Court, an appeal from which has already been dismissed by a
    Superior Court judge.

[2]

The parties are the parents of a child now age 12. They have been in
    conflict over aspects of her custody for over a decade.

[3]

In 2007, custody was awarded on consent to the respondent (mother).
    Multiple motions to change were initiated and dealt with. The litigation is
    replete with judicial pleas for the parents to stop the conflict.

[4]

In December 2015, the appellant (father) brought another motion to
    change custody. The respondent brought a motion for summary judgment requesting
    dismissal of the motion to change. The motion judge granted the respondents
    motion and dismissed the motion to change on the basis that there had been no
    material change in circumstances that affects or is likely to affect the child.

[5]

The fathers appeal to the Superior Court was dismissed.

[6]

The appellant submits to this court, as he did on appeal to the Superior
    Court, that the motion judge erred by ignoring the significance of a report
    ordered by the Ontario Court pursuant to s. 30 of the
Childrens Law Reform
    Act
, R.S.O. 1990, c. C12. He suggests that the motion judge did not review
    the full report despite undertaking to do so. He submits that the report
    authored by Dr. Ross established a material change affecting the child and that
    the motion judge erred in not so finding.

[7]

We do not accept these submissions.

[8]

First, as determined by the appeal judge, there is a presumption that
    the judge honoured his undertaking. The report would have been contained in the
    Continuing Record and available for the judge to review.

[9]

Next, we agree with both the motion judge and the appeal judge that the
    report did not assist the court as a material change in circumstances had not
    been established.

[10]

The
    report of Dr. Ross makes it clear that the conflict between the parents
    together with the respondents anger to the appellant are negatively impacting
    the child. The conflict was well known to the courts as far back as 2010. The
    law has long been established that a continuation of parental conflict does not
    amount to a material change in circumstances: see
Litman v. Sherman
,

2008 ONCA 485.

[11]

Regarding
    the respondents anger, Dr. Ross reported that the respondent did not
    appreciate the effects on the child of her unresolved anger. The mother then
    took steps to de-escalate the demonstrations of anger. She enrolled in Our
    Family Wizard, increased the appellants time with the child, withdrew her
    outstanding contempt proceedings and participated in counselling.

[12]

On
    this basis, we agree with the appeal judge who stated at para 50:

Where, as here, there is
    unequivocal evidence that the cause of the change in condition of the child has
    been identified and reasonable steps have been taken to address the cause there
    is not material change in circumstances nor any requirement of a trial to
    determine the issue.

[13]

For these reasons, the appeal is dismissed with costs payable to
    the respondent fixed in the agreed upon amount of $10,000
inclusive of disbursement and HST.

P.
    Lauwers J.A.

M.L. Benotto J.A.

I.V.B.
    Nordheimer J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kowalsky v. Asselin-Kowalsky, 2018 ONCA 492

DATE: 20180528

DOCKET: M49037 (C64491)

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

BETWEEN

Mark Kowalsky

Applicant (Respondent in Appeal)

Responding Party (Moving Party on Motion)

and

Denise Asselin-Kowalsky

Respondent (Appellant in Appeal)

Moving Party (Responding Party on Motion)

Kim S. Kieller and Ainsley Hunter, for the moving party,
    Mark Kowalsky

Patrick Kraemer, for the responding party, Denise
    Asselin-Kowalsky

Heard: May 25, 2018

APPEAL BOOK ENDORSEMENT

[1]

The orders under appeal are final orders. This court has jurisdiction.
    The real question is whether this court should exercise its discretion and
    delist the appeal pending the outcome of outstanding matters in the Superior
    Court:
Gray v. Gray
, 2017 ONCA 100.

[2]

There are arguments for and against proceeding with the appeal
    (scheduled for June 7, 2018), as opposed to sending the matter back to the
    trial court. It may be that even if the appeal proceeds and the appellant is
    successful, the matter will still have to go back to the Superior Court for
    determination of issues such as spousal support and child support.

[3]

On balance, and for the reasons identified by Rouleau J.A., we think the
    appeal court is the appropriate forum in which to address at least the fundamental
    issue on appeal  should the order made in the absence of the appellant stand?

[4]

The appeal should proceed as scheduled.

[5]

The responding party is entitled to costs on a partial indemnity basis.
    The issues on the motion were straightforward. Much of the preparation will
    also apply to the appeal. Costs of the motion fixed at $3,000, inclusive of
    taxes and disbursements.


COURT OF APPEAL FOR ONTARIO

CITATION: L-Jalco Holdings Inc. v. MacPherson, 2018 ONCA 488

DATE: 20180525

DOCKET: C64115

Pepall, van Rensburg and Paciocco JJ.A.

BETWEEN

L-Jalco Holdings Inc.

Plaintiff (Appellant)

and

Beverly Ann MacPherson

Defendant (Respondent)

Bryan Skolnik, for the appellant

Mark Ross, for the respondent

Heard and released orally: May 22, 2018

On appeal from the judgment
    of Justice Graeme Mew of the Superior Court of Justice, dated June 29, 2017.

REASONS FOR DECISION

[1]

On September 3, 2008, the appellants, L-Jalco Holdings, lent money to
    837047 Ontario Limited (837). That loan was secured, in part, by a $1,100,000
    mortgage placed on a commercial building at the corner of Queen and Division
    Streets in Kingston, Ontario. There were two prior mortgages on the property at
    the time. Mr. Dwight Powell held the first mortgage in the amount of
    $449,070.37. The Respondent, Beverly MacPherson, held the second mortgage in
    the amount of $49,900.  L-Jalco paid off Mr. Powells mortgage and more than
    $75,000 in tax arrears, but not Ms. MacPhersons mortgage.

[2]

837 subsequently defaulted on its payments on the L-Jalco mortgage, and
    on June 13, 2012, the property was sold under power of sale. This was done
    without notice to Ms. MacPherson. The building sold for $425,000. L-Jalco now
    claims all of the proceeds of sale. It brought an action against Ms. MacPherson
    claiming that even though her mortgage was registered in priority to theirs, it
    is entitled to priority based on equitable subrogation for having paid off Mr.
    Powells mortgage and the taxes.  Ms. MacPherson counter-claimed for priority
    payment of the amount outstanding on her mortgage.

[3]

In claiming equitable subrogation, L-Jalco relied on its claim that Ms.
    MacPhersons lawyer failed to fulfill an undertaking to discharge her mortgage
    that L-Jalco claims he provided. L-Jalco also argued that Ms. MacPherson should
    not be enriched by assuming first priority as a result of L-Jalcos act of
    paying off the first mortgage. L-Jalco argued that it could simply have taken
    an assignment of the Powell mortgage, thereby securing priority over her
    mortgage, making it equitable that it receive priority through subrogation.

[4]

On June 29, 2017, Ms. MacPherson was granted summary judgment.  The
    motion judge rejected L-Jalcos claim that Ms. McPhersons lawyer undertook to
    discharge her mortgage. He found as a fact that when L-Jalco advanced the
    mortgage funds it knew or was indifferent that Ms. MacPherson refused to
    postpone her mortgage. The motion judge held that, in any event, it would not
    be equitable to give L-Jalco a priority for a much larger mortgage carrying a
    higher interest rate than the Powell mortgage. In these circumstances, the motion
    judge found it to be unfair to leave Ms. MacPherson with nothing. The motion
    judge therefore dismissed L-Jalcos claim to equitable subrogation and ordered
    L-Jalco to pay Ms. MacPherson the sum secured by her mortgage of $49,900.

[5]

L-Jalco appeals. It contends that the motion judge erred in:

·

placing the onus on L-Jalco to establish the availability of the
    remedy of equitable subrogation when the summary judgment motion was brought by
    Ms. MacPherson;

·

determining that facts were readily discernible even though there
    was disputed evidence relating to central issues;

·

making a number of factual and credibility determinations; and

·

in failing to properly apply the doctrine of equitable
    subrogation.

[6]

We dismiss L-Jalcos appeal.

[7]

The motion judge was correct to impose the burden on L-Jalco to prove
    its entitlement to equitable subrogation, notwithstanding that Ms. MacPherson
    initiated the summary judgment motion. The motion judge raised this issue with
    the parties, stating that the onus is on L-Jalco. He invited comments from
    counsel for L-Jalco and no issue was taken with this position. Once Ms. MacPherson
    proved that her mortgage was registered in priority to L-Jalcos mortgage, the
    burden fell squarely on L-Jalco to prove the equitable subrogation claim it
    relied upon, in answer.

[8]

The motion judges conclusion that the facts required to render summary
    judgment were readily ascertainable, despite disputed evidence, is entitled to
    deference. At the commencement of the motion, L-Jalco encouraged the trial
    judge to proceed by way of summary judgment by commenting that, there really
    isnt much dispute about the facts.  It does not lie easily in L-Jalcos mouth
    to contend now that this was not a proper case for summary judgment. Moreover,
    L-Jalco relied heavily on documentary evidence to establish its claim that Ms.
    MacPherson had undertaken to discharge her mortgage. The motion judge was well
    situated to assess this evidence. Crucial testimony from Mr. Murano, the
    principal of 837, that he advised L-Jalcos lawyer that Ms. MacPherson would
    not agree to postpone her mortgage was not contradicted. We therefore see no
    palpable or overriding error in the motion judges decision to proceed by
    summary judgment despite the evidence in dispute.

[9]

Nor have any palpable or overriding errors been identified in the
    factual and credibility findings impugned by L-Jalco. The challenges L-Jalco
    makes represent an attempt to re-argue the dispute. The material findings were
    for the motion judge to make, and all of his findings of fact are amply
    supported on the evidence before him.

[10]

Finally,
    the motion judges decision not to grant the remedy of equitable subrogation is
    discretionary. As this court recognized in
Mutual Trust Co. v. Creditview
    Estate Homes Limited
, [1997] O.J. No. 3258 (C.A.), at pp. 6-7, the
    fundamental principle underlying the doctrine of subrogation [is] one of
    fairness in the light of all the circumstances. On the findings the motion
    judge was entitled to make, L-Jalco went ahead with the loan to 837 knowing
    that Ms. MacPhersons mortgage stood in priority to their own and that she
    would not postpone her interest. Moreover, L-Jalco seeks a subrogated priority
    over Ms. MacPherson for a mortgage that is more than double in value to the
    Powell mortgage, and that carries a much higher interest rate than the mortgage
    it replaced. These are cogent and proper reasons for the motion judges
    decision to reject L-Jalcos request for equitable subrogation that, if
    granted, would leave Ms. MacPherson with nothing. There is no basis to
    interfere.

[11]    The appeal is dismissed with costs of $15,000
    inclusive of disbursements and applicable taxes to be paid by the appellant to
    the respondent.

S.E. Pepall J.A.

K. van Rensburg J.A.

David M. Paciocco J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lang Michener LLP v. King, 2018 ONCA 471

DATE: 20180518

DOCKET: C63723

Brown, Huscroft and Trotter JJ.A.

BETWEEN

Lang Michener LLP

Moving Party (Respondent)

and

Gregory P. King

Responding Party (Appellant)

Gregory King, acting in person

Gavin Tighe and Robert Winterstein, for the respondent

Heard and released orally: May 16, 2018

On appeal
    from the order of Justice David L. Corbett of the Superior Court of Justice,
    dated March 31, 2017, with reasons reported at 2017 ONSC 1917, and from the
    costs order of the same date, with reasons reported at 2017 ONSC 3920.

REASONS FOR DECISION

I.

OVERVIEW

[1]

The appellant, Gregory King, a lawyer, appeals from the order granting
    summary judgment dismissing his counterclaim against the respondent, Lang
    Michener LLP.

[2]

In 2007, Mr. King retained Lang Michener to defend him in proceedings
    commenced by the trustee of a bankrupt Italian company, Sincies Chiementin SpA
    (Sincies), to enforce a judgment issued by an Italian court on October 1,
    2001 against Mr. King (the Italian Judgment). The amount of the Italian
    Judgment was U.S. $600,000, plus interest, currency appreciation and costs.
    Following a four-day hearing, Whalen J. granted the trustee summary judgment
    recognizing and enforcing the Italian Judgment (the Enforcement Judgment): 2010
    ONSC 6453.

[3]

This court dismissed Mr. Kings appeal from the Enforcement Judgment:
    2012 ONCA 653. Mr. Kings request for leave to appeal to the Supreme Court of
    Canada was denied: [2012] S.C.C.A. No. 516.

[4]

In March 2011, Lang Michener commenced an action against Mr. King seeking
    payment of its fees for services rendered in the enforcement proceeding. By
    Statement of Defence and Counterclaim dated May 5, 2011 (and amended October
    16, 2013), Mr. King advanced three defences: (i) Lang Michener breached its
    retainer agreement by charging fees that were out of proportion to the amounts
    agreed; (ii) the law firm provided representation and advice at the enforcement
    proceeding that fell below the standard of care; and (iii) one of the firms
    lawyers, John Kelly, was negligent in the advice he provided to Mr. King in
    2008 about a possible action against LawPro, which had denied Mr. King coverage
    under his professional liability insurance policy (the Policy) for the
    Italian Judgment.

[5]

Mr. King counter-claimed against Lang Michener, advancing the same three
    grounds as the basis for his counter-claim. Mr. King sought judgment against
    Lang Michener in the amount he owed under the Italian Judgment, together with
    all legal fees and other costs he had incurred in defending the trustees
    enforcement and recognition claim.

[6]

The motion judge granted summary judgment dismissing Mr. Kings counterclaim.
    The motion judge made no finding about the value of the services Lang Michener
    had rendered; that issue awaits determination in the main action. However, he
    dismissed the counterclaim for two main reasons:

(i)        Mr.
    Kings claim against Lang Michener for negligent representation during the
    enforcement proceeding constituted an impermissible collateral attack on the
    findings made by Whalen J. and, in any event, there is no basis in fact
    available to Mr. King that any shortcomings in oral argument by Lang Michener
    could possibly have caused him any compensable damages; and

(ii)        Regardless
    of the advice Kelly might have given Mr. King in 2008 about a possible claim
    against LawPro under the Policy, Mr. King suffered no damages because the
    Policy did not cover a claim based in fraud, such as the Italian Judgment, and Mr.
    King had failed to report a claim to LawPro within the time required by the Policy,
    which was long before he retained Lang Michener in 2008.

Grounds of appeal

[7]

On this appeal, Mr. King does not challenge the motion judges dismissal
    of that part of his counterclaim alleging that Lang Michener was negligent in
    representing him at the enforcement proceedings. Mr. King limits his appeal to the
    motion judges dismissal of that part of his counterclaim alleging negligent
    advice given by Lang Michener in 2008 in respect of a possible claim against
    LawPro.

[8]

At the hearing, Mr. King clarified that he was abandoning his claim for
    relief in the counterclaim in respect of the amount of the Italian Judgment;
    his claim for damages is now limited to the costs he incurred in defending the
    enforcement proceedings.

[9]

Mr. King also seeks leave to appeal the motion judges award of costs of
    $45,000 against him.

Analysis

[10]

To
    dispose of this appeal, it is only necessary to consider Mr. Kings argument
    that the motion judge erred in finding that the Policy did not cover Mr. Kings
    claim in respect of the enforcement of the Italian Judgment.

[11]

The
    coverage grant under the Policy stated:

To pay on behalf of the INSURED all sums which the INSURED
    shall become legally obligated to pay as DAMAGES arising out of a CLAIM,
    provided the liability of the INSURED is the result of an error, omission or
    negligent act in the performance of or the failure to perform PROFESSIONAL
    SERVICES for others.

[12]

PROFESSIONAL
    SERVICES is defined in the Policy as the practice of the Law of Canada, its
    provinces or territories, and specifically those services performed, or which
    ought to have been performed, by or on behalf of an Insured in such Insureds
    capacity as a lawyer and as a member of the Law Society of Upper Canada.

[13]

In
    its November 23, 2007 letter to Mr. King denying coverage for his claim based
    on the proceedings to enforce the Italian Judgment, LawPro wrote:

The Italian Judgment is based only on claims for
    extra-contractual remedies against you. The Italian Court specifically
    disavowed any jurisdiction to consider the professional liability claims and
    adjudged you liable on a finding of civil fraud. Thus, should an Ontario court
    decide to enforce the Italian Judgment in Ontario, given the Italian Courts
    assessment of the allegations made against you is not based on any error,
    omission or negligent act in the performance of or failure to perform
    Professional Services, the Coverage Grant would not be activated. As the
    Coverage Grant is not triggered, there can be no coverage under the Policy
    available to you in relation to an Ontario Action.

[14]

The
    motion judge found that Mr. Kings liability in respect of the Italian Judgment
    was not the result of an error, omission or negligent act in the performance
    of or the failure to perform professional services for others. He stated, at
    paras. 48, 49, 50 and 52 of his reasons:

In its judgment, the Italian court specifically declined to
    take jurisdiction over [Mr.] King in relation to allegations of professional
    liability:

to ascertain the professional liability of Mr. King is
    certainly outside the scope of Italian jurisdiction, as it has been shown that
    the services performed by the defendant [Mr. King] did not take place in
    Italy.  In summary, Italian jurisdiction exists only with regard to the
    extra-contractual action.

The Italian courts findings on the issue of extra-contractual
    liability were as follows:

Indeed, in light of the reconstruction of facts set forth
    above Mr. King and Mr Chan, as they agreed between themselves, as shown by the
    numerous contacts between them which left indisputable traces in the documents
    examined, acted in such a way as to defraud [Sincies], first by persuading it
    to undertake a significant financial commitment for a commercial transaction
    which, in fact, had never been initiated, and then by definitively preventing
    it from recovering the amount advanced.

The insurance policy covered claims against [Mr.] King arising
    from his provision of professional services.  It did not cover personal
    claims against [Mr.] King. The judgment against [Mr.] King finds that he acted
    in concert with [Mr.] Chan to defraud Sincies of the US $600,000. The fraud
    arose in the context of a transaction in which [Mr.] King acted as solicitor
    and provided legal services, but it is not in respect to an error, omission or
    negligent act in those legal services.

The Italian judgment sounds in fraud, not professional
    negligence, and coverage was not available for [Mr.] King from LawPro in
    respect to liability for fraud

[15]

Mr.
    King submits the motion judge erred in reaching this conclusion for two
    reasons. First, the motion judge departed from the statement of this court, in
    its brief endorsement dismissing Mr. Kings appeal from the Enforcement
    Judgment, that described the Italian Judgment as one which found Mr. King
    liable for his professional conduct as a lawyer in a failed joint venture.

[16]

We
    do not accept that submission. The issue of coverage under the Policy was not
    before this court on the appeal from the Enforcement Judgment. The language
    used by this court obviously was in the nature of a short-hand description of
    the Italian Judgment. The precise basis for the Italian Judgment was set out in
    that judgment, which the motion judge accurately described in his reasons.

[17]

Second,
    Mr. King argues that he was not acting in his personal capacity for Sincies
    or Chan. Consequently, the motion judge should have directed a trial on the
    issue as to whether Mr. Kings liability in Italy arose from his professional
    conduct.

[18]

We
    see no merit in this submission. The motion judge made no error in finding the
    Italian court had specifically declined to take jurisdiction over Mr. King in
    relation to allegations of professional liability. That finding was firmly
    anchored in the reasons of the Italian court, which stated, at para. 9:

[A]
contractual action in order
    to ascertain the professional liability of Mr. Mr. King is certainly outside
    the scope of Italian jurisdiction, as it has been shown that the service
    performed by the defendant did not take place in Italy.  The documentation
    filed on the record, in fact, shows that he maintained his professional offices
    in Canada, where he also pursued the majority of his activities, although he
    sometimes performed services (attending meetings) in China or Hong Kong.

[19]

Coverage
    under the Policy was only available for liability resulting from an error,
    omission or negligent act in the performance of or the failure to perform
    PROFESSIONAL SERVICES for others. The Italian Judgment was clear that Mr.
    Kings liability was not in respect of professional services he had rendered.
    Accordingly, we see no error in the motion judges conclusion, at para. 52 of
    his reasons, that regardless of the advice that was given by Kelly, [Mr.] King
    has suffered no damages: he would have lost an action against LawPro, and so
    his failure to start such a lawsuit after LawPro denied coverage in November
    1997 has cost him nothing.

[20]

In
    light of our conclusion that the motion judge did not err in holding Mr. King
    did not have coverage under the Policy because his liability claim was not in
    respect of professional services rendered, there is no need to consider Mr.
    Kings submissions regarding the motion judges findings about: (i) the
    timeliness of his reporting the claim to LawPro; (ii) the availability of the
    exception to the exclusion of coverage in respect of fraudulent acts; and (iii)
    the applicability of an endorsement to the Policy deeming, as an error,
    omission or negligent act, an insureds vicarious liability for the acts of
    others arising out of the provision of PROFESSIONAL SERVICES.

[21]

As
    to Mr. Kings request for leave to appeal the motion judges cost order, we
    grant leave to appeal, but we do not interfere with the costs award. We see no
    error in principle by the motion judge, nor was his award unreasonable.

II.

DISPOSITION

[22]

For
    the reasons set out above, we dismiss the appeal. We grant leave to appeal the
    motion judges cost award but dismiss the appeal.

[23]

Lang
    Michener is entitled to its costs of the appeal in the amount of $15,000,
    inclusive of disbursements and all applicable taxes.

David Brown J.A.

Grant Huscroft J.A.

Gary T. Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Loken v. St. Peter's Court Apartments, 2018 ONCA
    501

DATE: 20180530

DOCKET: C64606

Pepall, van Rensburg and Paciocco JJ.A.

BETWEEN

Johanne Mainville Loken

Applicant
(Appellant)

and

St. Peters Court Apartments

Respondent
(Respondent in Appeal)

James Morton, for the appellant

Jason Schmidt, for the respondent

Heard and released orally: May 25, 2018

On appeal from the
    judgment of Justice M. Lack of the Superior Court of Justice, dated October 27,
    2017.

REASONS FOR
    DECISION

[1]

This is an appeal of the dismissal of a claim
    for adverse possession.

[2]

The appellant says that the application judge
    erred when she departed from the agreed facts in concluding that adverse
    possession had not been made out, and in making findings of fact that were
    contrary to the agreed facts.

[3]

The appellant says that the application judges
    finding that the respondent had not been excluded from the disputed property is
    inconsistent with the agreed fact that the hedge did not allow access to the
    respondents property and effectively excluded uninvited persons and
    trespassers.

[4]

We disagree. The question here was whether the
    respondent was excluded from its intended or ordinary use of the property in
    dispute. The admitted fact relied on by the appellant simply states that the
    area enclosed by the hedge effectively excluded uninvited persons and
    trespassers. This is not inconsistent with the application judges finding. In
    this regard, she found that the respondent had not been excluded from the
    disputed property because its use as a hedge was consistent with the use the
    registered owner intended.

[5]

The findings made by the application judge,
    which were based on the agreed facts, affidavits and the transcript of the
    cross-examination of the appellant, fully supported the conclusion that the
    claim for adverse possession had not been established.

[6]

The appeal is therefore dismissed. Costs to the
    respondent fixed at $9,000, inclusive of disbursements and HST.

S.E.
    Pepall J.A.

K.
    van Rensburg J.A.

David
    M. Paciocco J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Martin v. Barrie (City), 2018 ONCA 499

DATE: 20180530

DOCKET: C63202

Feldman, MacPherson and Rouleau JJ.A.

BETWEEN

Andrea Martin and Errol Martin

Plaintiffs (Appellants)

and

The Corporation of the City of Barrie and
    Heritage Park (Barrie) Inc.

Defendants (Respondents)

Harvey Klein, for the appellants

Stuart Zacharias, for the respondents

Heard: May 28, 2018

On appeal from the judgment of Justice Joseph Di Luca of
    the Superior Court of Justice, dated January 17, 2017.

REASONS FOR DECISION

[1]

The appellants, Andrea and Errol Martin, appeal from the judgment of Di
    Luca J. of the Superior Court of Justice dated 17 January 2017, dismissing
    their action in negligence against the respondents.

[2]

On February 5 and 6, 2011, the City of Barrie hosted a Winterfest and
    Festival of Ice event. Approximately 20,000-25,000 people, including many
    families with children, attended the Winterfest. The Martin family, Andrea and
    Errol and their two small children, were among the attendees.

[3]

One of the activities at the Winterfest was a snow slide. It was
    intended to be used primarily by children, but adults were also welcome to use
    it.

[4]

The two Martin children went down the slide. They were not injured. Ms.
    Martin then went down the slide. Near the bottom, she dug in her heels to slow
    herself and her buttocks struck a piece of hardened ice protruding from the
    snow cover of the slide. She was injured, suffered immediate pain, and
    continued to suffer pain for some time after the accident.

[5]

Following a five day trial, the trial judge found that Ms. Martins
    injury was caused by the ice on the snow slide:

Ms. Martins efforts to slow her descent by digging her feet
    into the snow is likely what caused the small ice chunk to become dislodged of
    uncovered from the snow. The contact between the bottom and the ice chunk is
    what caused an injury, likely a bruise, to her coccyx or tailbone area.

[6]

However, the trial judge did not find that the municipality had breached
    the appropriate standard of care with respect to the snow slide:

I find that in the circumstances of this case, the standard of
    care was satisfied.  The City of Barrie took adequate and reasonable steps to
    safeguard the guests using the snow slide at Winterfest. The context is
    important.  The snow slide is a gradually sloped hill on which patrons slide
    down on their bottoms. While specific measurements were not tendered into
    evidence, the pictures tendered into evidence suggest that the hill is neither
    steep nor tall. Guests are not using devices such as sleds or toboggans which
    would ordinarily be used to add speed to the descent. The evidence suggests
    that guests come a quick stop at the bottom of the slide.

[7]

The appellants advance three grounds of appeal.

[8]

The appellants contend that the trial judge made a palpable and
    overriding error by concluding that the ice chunk that Ms. Martin struck was
    small.

[9]

We do not accept this submission. Ms. Martin herself testified that she
    did not see the ice chunk until after she struck it and she described it as
    about four to six inches in size. Accordingly, the trial judges characterization
    of it as small was entirely justified.

[10]

Second,
    the appellants submit that the trial judge erred in the inference he drew from the
    hearsay utterance (I have to fill this again) of an on-site City of Barrie
    employee that Ms. Martin heard immediately after she was hurt.

[11]

We
    are not persuaded by this submission. We see no error in the trial judges
    conclusion on this issue:

The spontaneous utterance of the City of Barrie employee
    supports the position of the defendants as it demonstrates that the employee
    stationed at the bottom of the slide in the landing area was paying close
    attention to the condition of the landing and moved quickly to fill in a gap or
    patch in the snow as would be expected. The fact that it appears from the
    utterance that this was not the first time this remedial step was required does
    not alter the analysis as I do not find that the utterance demonstrates an
    awareness of the hazard posed by the chunk of ice that caused the injury.

[12]

Third,
    the appellants contest the trial judges conclusion (set out in para. 6 above)
    relating to standard of care. They contend that the City of Barrie invited the
    public to ride the slide and that, in this context, it did not provide a
    system of regular inspection and maintenance of the run-off area of the busy
    slide.

[13]

We
    do not accept this submission. We begin by observing that the standard of
    review in the vast majority of negligence cases, which by definition involve
    questions of mixed fact and law, is palpable and overriding error: see
Housen
    v. Nikolaisen
, 2002 SCC 33.

[14]

In
    our view, the trial judge made no error of any kind  let alone a palpable and
    overriding error  in his analysis of the evidence and his application of the
    relevant negligence law principles to the evidence at this trial. He did not
    ignore the evidence relating to inspection and maintenance. He said:

Staff are positioned at the top and bottom of the hill,
    observing and directing the flow of guests. Staff at the bottom of the hill are
    equipped with a shovel and instructed to smooth out the landing and fill in patches
    in the snow. It is expected that the staff will remove hazards should they
    become aware of any. The landing area is fenced off and adequately supervised.

Regrettably, Ms. Martin hit a small chunk or piece of ice that
    was buried in the snow at the base of the slide in the landing area. In my view
    this was a not a hazard that the City of Barrie should have been reasonably
    required to address in order to meet the standard of care. While I appreciate
    that a more rigorous inspection process and perhaps the use of a rake to comb
    the landing area might have uncovered this hazard, in my view, this places too
    high an onus on the City of Barrie. The standard is not one of perfection,
    rather it is reasonableness. In view of the activity in question and in view of
    the circumstances as I have found them, I do not believe that the City of
    Barrie should be held liable for this unfortunate injury.

[15]

We
    see no error in this analysis.

[16]

The
    appeal is dismissed. The respondents are entitled to their costs of the appeal
    fixed at $5,000, inclusive of disbursements.

K. Feldman J.A.

J.C. MacPherson J.A.

Paul Rouleau J.A.