COURT OF APPEAL FOR ONTARIO

CITATION: Keatley
    Surveying Ltd. v. Teranet Inc., 2015 ONCA 248

DATE: 20150414

DOCKET: C59341

Weiler, Sharpe and Blair JJ.A.

BETWEEN

Keatley Surveying Ltd.

Plaintiff (Respondent)

and

Teranet Inc.

Defendant (Appellant)

Paul Morrison, Julie Parla, Shane DSouza and Timothy
    Chapman-Smith,

for the appellant

Kirk Baert and Celeste Poltak, for the respondent

Heard: January 7, 2015

On appeal from the order of the Divisional Court (Justice
    Harriet E. Sachs, Justice Susan G. Himel, and Patricia C. Hennessy concurring),
    dated March 26, 2014, with reasons reported at 2014 ONSC 1677, 119 O.R. (3d)
    497, reversing the order of Justice Carolyn J. Horkins of the Superior Court of
    Justice, dated December 14, 2012, with reasons reported at 2012 ONSC 7120, 31
    C.P.C. (7th) 14.

Sharpe J.A.:

[1]

This proposed class proceeding concerns a claim
    that land surveyors retain copyright in the plans of survey they prepare and
    register in the land registry system and that the provision of copies of
    surveys to users of the system infringes the surveyors copyright.

[2]

The plaintiff Keatley Surveying Ltd. Is a
    professional corporation owned and operated by Gordon R. Keatley, a land
    surveyor. For convenience, I will refer to Mr. Keatley and his corporation
    collectively as Keatley.

[3]

The defendant Teranet Inc. manages Ontarios electronic
    land registry system as a service provider to the government. Documents
    prepared by land surveyors, including drawings, maps, charts and plans
    (collectively plans of survey)  are registered in the electronic land
    registry system. Teranet provides electronic copies of registered plans of
    survey to members of the public for a fee prescribed by statute but pays no fees
    or royalties to the land surveyors who prepared the plans of survey.

[4]

Keatley asserts copyright in the plans of survey
    it prepared or otherwise owns. Keatley seeks certification of this action as a
    class proceeding on behalf of all of the approximately 350 land surveyors in
    private practice in Ontario whose survey documents appear in digital format in
    Teranets database.

[5]

The class proceedings judge refused to certify
    the action. She found that while the pleadings did disclose a proper cause of
    action, Keatley had failed to satisfy the other criteria for certification.
    She found that Keatley had failed to show an identifiable class, only one proposed
    common issue was potentially certifiable, a class proceeding was not the
    preferable procedure, Keatley was not representative of the proposed class, and
    the litigation plan was not workable.

[6]

On appeal to the Divisional Court, the action
    was certified on the basis of a revised class definition and revised common
    issues.

[7]

Teranet appeals, with leave, to this court.
    Teranet submits that the Divisional Court erred in permitting Keatley to recast
    the class definition and common issues and that, in any event, the action does
    not meet the test for certification.

[8]

For the following reasons, I would dismiss the appeal.

FACTS

[9]

Before the creation of an electronic land registration system, documents
    registered or deposited with Ontarios land registry offices, including plans
    of survey, were available to the public. Copies were obtained from a land
    registry office for a fee. It was a paper-based system. The surveyors who
    created the plans of survey were not paid a fee or royalty by the government.

[10]

In
    the 1980s, the process of automating the land registry system in Ontario began.
    All documents in the registry were digitized, remote access to these documents
    was provided, and each parcel of land was given a unique identifier.  The
    government also began to convert all land registration to the land titles
    system. In 1991, the Ontario government entered into a public-private
    partnership with Teranet. Teranet contracted with the Ontario government to
    take over the automation and conversion of the paper-based land registration
    system to an electronic title system. Many surveyors, individually and through The
    Association of Land Surveyors of which Keatley is a member, participated in
    consultations with the government and with Teranet as the electronic land
    registration system was developed. The conversion was completed in October
    2010. The last land registry office to be automated and converted to the land
    titles system was the sole office on Manitoulin Island, where Keatley is
    located, in about June 2010.

[11]

Teranet
    now manages Ontarios electronic land registry system as a service provider to
    the government. When plans of survey are registered and deposited in a land
    registry office in Ontario, Teranet scans the plans of survey into a digital
    format and adds this electronic information to its database. Teranet provides
    electronic copies of plans of survey to the public for a statutorily prescribed
    fee. The provision of copies by way of electronic means is at issue in this
    proceeding.

[12]

There
    are two Teranet service portals through which licensed users can access
    Ontarios electronic land registration system, Teraview and GeoWarehouse.
    Teraview is a desktop application that allows users to search and register
    documents.  It functions like a virtual land-registry office.  Since 1995,
    users have been able to log on to Teraview to search and obtain copies of real
    property records, including plans of survey. GeoWarehouse is an online service
    that generates reports specifically geared for use by professionals such as
    real estate agents, appraisers, and surveyors. It allows for access to plans of
    survey through the electronic land registration system database.  Accessing
    plans of survey through either Teraview or GeoWarehouse requires the payment of
    statutorily prescribed fees, which are collected by Teranet on behalf of the
    Ontario government. The terms and conditions for both Teraview and GeoWarehouse
    state that the intellectual property in documents is either owned by Teranets
    suppliers or licenced to Teranet. Many surveyors are licenced users of Teraview
    and GeoWarehouse, but Keatley is not and he states that he has never used
    either program.

[13]

Surveyors
    are required to use copies of plans of survey in order to fulfill their
    professional and statutory duties.  For instance, when creating a plan of
    survey, land surveyors must obtain copies of plans of survey related to the
    lands and abutting properties.

[14]

Keatley
    is located and operates almost exclusively on Manitoulin Island. Keatley has
    copies of approximately 4,700 surveys of Manitoulin Island which includes the
    work of most surveyors who have ever worked on Manitoulin Island. This means
    that, unlike most surveyors, Keatley ordinarily does not require or obtain
    copies of surveys from Teranet.

THE CLAIM

[15]

Keatleys
    claim is for copyright infringement. It is common ground that plans of survey
    are artistic works and acquire copyright protection under the
Copyright
    Act
, R.S.C. 1985, c. C-42, s. 5(1). Keatley pleads that s. 3(1) of the
Copyright
    Act
gives copyright owners the sole right to produce, reproduce, and publish
    a work, as well as the sole right to communicate the work to the public by
    telecommunication. Keatley pleads that by making digital copies of plans of
    survey, storing these copies in its database, and making these copies available
    to the public for a fee, Teranet infringed these exclusive rights. Keatley relies
    on s. 27(1) of the
Copyright Act
, which states, It is an infringement
    of copyright for any person to do, without the consent of the owner of the
    copyright, anything that by this Act only the owner of the copyright has the
    right to do.  In addition, Keatley asserts s. 27(2) of the
Copyright Act
which states grounds of secondary infringement, such as selling or distributing
    a copy of a work that the person knows or should have known infringes
    copyright.  As originally framed, the action claimed both monetary and
    injunctive relief but, as I will explain, the claim for injunctive relief was
    abandoned before the Divisional Court heard oral argument.

[16]

Teranet
    pleads several defences. Teranet says that as the surveys are published by or
    under the direction and control of the Crown, it is the Crown that owns the
    copyright pursuant to the
Copyright Act
, s. 12. Teranet relies on
    provisions in the
Land Titles Act
, R.S.O. 1990, c. L.5; the
Registry
    Act
, R.S.O. 1990, c. R.20; the
Surveys Act
, R.S.O, 1990, c. S.30;
    and the
Surveyors Act
, R.S.O. 1990, c. S.29, for the proposition that
    surveys, once registered,  become the property of the Crown. Teranet also
    pleads the defences of consent, estoppel, waiver, acquiescence, laches, and
    statutory limitation periods. In addition, Teranet pleads that any infringing
    uses were fair dealing for research and private study or were justified by
    their significant public benefit.

[17]

Keatley
    disputes Teranets interpretation of the relevant legislation and contends that
    provincial legislation cannot defeat federal copyright protection.

[18]

The
    class proceedings judge struck Keatleys pleading that scanning hard copies of
    the plans of survey to create a digital format was a translation under the
Copyright
    Act
, s. 3(1)(a). With respect to the balance of the claim, applying the
    relaxed standard of scrutiny of the merits that applies at the certification
    stage, the class proceedings judge found that Keatley satisfied the cause of
    action requirement for certification.  Although she found, at para. 113, that
    a compelling case can be made that copyright belongs to the Crown, she
    concluded that the claim raised a novel question which should not be decided
    at the certification stage.  Teranet did not appeal that finding to the
    Divisional Court or to this Court. Accordingly, I make no comment as to the
    merits of this proposed class action.

LEGISLATION

[19]

The
Class Proceedings Act, 1992
, S.O. 1992, c. 6, s. 5, sets out the test
    for certification:

5.
(1)
The court shall certify a class proceeding on a motion
    under section 2, 3 or 4 if,

(a)     the pleadings or the
    notice of application discloses a cause of action;

(b)     there is an identifiable
    class of two or more persons that would be represented by the representative
    plaintiff or defendant;

(c)     the claims or defences of
    the class members raise common issues;

(d)     a class proceeding would
    be the preferable procedure for the resolution of the common issues; and

(e)     there is a representative
    plaintiff or defendant who,

(i)           would fairly and
    adequately represent the interests of the class,

(ii)           has produced a
    plan for the proceeding that sets out a workable method of advancing the
    proceeding on behalf of the class and of notifying class members of the
    proceeding, and

(iii)         does not have,
    on the common issues for the class, an interest in conflict with the interests
    of other class members.

ISSUES

[20]

Teranet
    raises four issues on appeal:

1. Did the Divisional Court err by considering revised
    proposals for certification that differed from those presented before the class
    proceedings judge?

2. Did the Divisional Court err in any event by granting
    certification on the basis of the revised proposals as to identifiable class,
    common issues, preferable procedure, and representative plaintiff?

3. Did the Divisional Court err in holding that it is not
    necessary that there be anyone other than the plaintiff who wishes to pursue
    its claims as a class action, or at all?

4. Did the Divisional Court err in certifying the proceeding
    without requiring the plaintiff to propose a workable litigation plan?

ANALYSIS

Issue 1. Did the Divisional Court err by considering
    revised proposals for certification that differed from those presented before
    the class proceedings judge?

[21]

Teranet
    submits that the Divisional Court erred by treating the appeal from the class
    proceedings judge as if it were a
de novo
hearing. Teranet argues that
    the proposed class definition and common issues considered by the Divisional
    Court were materially different from those considered by the class proceedings
    judge. By allowing Keatley to recast its case on appeal, Teranet submits the
    Divisional Court stepped outside its role as an appellate court in a manner that
    unfairly prejudiced Teranet. Teranet places particular reliance on para. 7 of
    the Divisional Courts reasons, which state, On the case as presented to her,
    I agree with the motion judges finding that certification was not appropriate.
    It is argued that as the Divisional Court found no reviewable error, it was not
    entitled to exercise appellate jurisdiction to effectively reverse the decision
    of the class proceedings judge.

[22]

I
    agree with Teranet that implicit in the exercise of appellate jurisdiction to
    hear an appeal from a denial of certification are limits on the extent to which
    a party can recast the case it presented at first instance. I also agree that
    absent properly admitted fresh evidence on appeal or a material change in the
    law, an appellate court will ordinarily only intervene where there is an
    identifiable, reviewable error by the court of first instance.

[23]

These
    guiding principles do not, however, place an appellate court in a
    straightjacket that would frustrate the interests of justice. It has been
    judicially recognized that given their very nature, class proceedings evolve as
    they work their way through the court system. Certification has been described
    as a fluid, flexible procedural process that affords plaintiffs some scope to
    reformulate their approach on appeal as holding plaintiffs strictly at the
    certification stage to their pleadings and arguments as they were initially
    formulated would in many cases defeat the objects of the
Act

    judicial economy, access to justice, and behaviour modification:
Halvorson
    v. British Columbia (Medical Services Commission)
, 2010 BCCA 267, 4 B.C.L.R.
    (5th) 292, at para. 23.

[24]

The
    case law from this and other appellate courts, thoroughly considered and
    reviewed by the Divisional Court, establishes that there must be some latitude
    for consideration of issues not raised at first instance provided that the
    other party is afforded procedural fairness. As this court stated in
Markson
    v. MBNA Canada Bank
, 2007 ONCA 334, 85 O.R. (3d) 321 (C.A.), at para 39,
    leave to appeal refused, [2007] S.C.C.A. No. 346, [p]rovided the defendant is
    not prejudiced, it is open to a plaintiff to recast its case to make it more
    suitable for certification. See also
Kumar v. Mutual Life Assurance Co. of
    Canada
(2003), 226 D.L.R. (4th) 112 (Ont. C.A.), at para. 30, leave to
    appeal refused, [2003] S.C.C.A. No. 283.

[25]

The
    issue is whether Keatleys reformulation of the class definition and common
    issues exceeded the type of adjustment that is contemplated by this line of
    authority and whether Teranet was prejudiced thereby.

(a)

Class Definition

[26]

The
    proposed class definition presented to the class proceedings judge was:

All land surveyors in Ontario, whether acting as individuals,
    corporations, or partnerships, who are the owners of copyrights in drawings,
    maps, charts and plans that have at any time appeared on the Defendants
    electronic database without such copyright holders written assignment or
    license.

[27]

Keatley
    conceded before the Divisional Court that this proposed class definition was
    fatally flawed as it was merits-based. As ownership of copyright is a proposed
    common issue to be determined in the litigation, membership in the class could
    not be determined until that issue was resolved.

[28]

On
    appeal to the Divisional Court, Keatley recast the proposed class definition in
    the following terms:

[A]ll land surveyors, whether acting as individuals, corporations,
    or partnerships, in Ontario who on or before [date of certification] were the:

(a) Author of a plan of survey; or

(b) Employer of the land surveyor at the time the plan was
    made; or

(c) An assignee of either an author or employer,

whose plan of survey appeared at any time in the defendants
    electronic database.

[29]

While
    the recast definition is certainly different from a legal perspective, I cannot
    agree that it fundamentally changed the nature of the case presented on appeal
    in a way that would prejudice Teranet. Although differently described, the
    proposed class remains essentially the same. The merits-based language  who
    are the owners of copyrights  is replaced with language that identifies the
    class members in neutral terms by identifying the nature of their actual
    connection with thesurveys - author, employer or assignee.

[30]

While
    allowing Keatley to present this revised class definition on appeal required
    Teranet to deal afresh with an issue on which it had been successful at first
    instance, Teranet was put at no procedural disadvantage in arguing the point.
    As the Divisional Court found, at paras. 31 and 33-34, this change did not
    deprive Teranet of an opportunity to respond, as may occur where after the
    conclusion of argument a judge makes modifications on his or her own initiative.
    Teranet neither required nor sought an adjournment to consider the change.  The
    change did not cause prejudice arising from a lack of evidence or a proper
    record. Any prejudice from having to deal with the new class definition on
    appeal could be, and was, dealt with by the Divisional Court in its costs order:
    2014 ONSC 3690, 374 D.L.R. (4th) 529.

(b)

Common Issues

[31]

I
    have attached as Schedule A to these reasons the proposed common issues that
    were before the class proceedings judge and as Schedule B, the revised
    proposed common issues presented to the Divisional Court.

[32]

The
    Divisional Court refused to certify issues 8 and 9 dealing with damages.
    Keatley does not cross-appeal that determination.  This court is left to
    consider issues 1 to 7, which were accepted by the Divisional Court.

[33]

Of
    the issues presented to the class proceedings judge, issues 5, 6, 7 and 8
    before her dealt with damages and those issues are now off the table. Issue 9
    dealt with injunctive relief, which has been abandoned. This narrows the
    inquiry to a comparison of Issues 1 to 7, as accepted by the Divisional Court,
    with Issues 1 to 4 and 10, as presented to the class proceedings judge. For
    convenience, I will refer to these as Divisional Court Issue 1, Class
    Proceedings Judge Issue 1, and so on.

[34]

Divisional
    Court Issue 1 is merely a refined version of Class Proceedings Judge Issue 1.
    Divisional Court Issue 1 does not suffer from the defect noted by the class
    proceedings judge in Class Proceedings Judge Issue 1, namely that given the
    definition of plan of survey provided by the plaintiff, the issue asked if a
surveyor
had rights in a plan of survey
after
it was registered and deposited with
    the land registry office. By contrast, Divisional Court Issue 1 merely deals
    with the question of whether there is copyright in plans of survey registered
    and/or deposited in the land registry office, not who owns that copyright.  Teranet
    concedes that the answer to the question is yes.

[35]

No
    issues before the class proceedings judge correspond with Divisional Court
    Issues 2 and 3.

[36]

Divisional
    Court Issue 4 is precisely the same as Class Proceedings Judge Issue 2, except
    that the Alleged Uses were defined more narrowly before the Divisional Court.
    As I will explain below, I see this proposed common issue as central to the
    certification. It is my view that the class proceedings judge erred in
    rejecting it as a common issue and that the Divisional Court erred in failing
    to identify that error on the part of the Class Proceedings judge.

[37]

Divisional
    Court Issue 5 is identical to Class Proceedings Judge Issue 3, except that the
    Alleged Uses were defined more narrowly before the Divisional Court.

[38]

Divisional
    Court Issue 6 is merely a refined version of Class Proceedings Judge Issue 4.
    First, the Alleged Uses in question were defined more narrowly before the
    Divisional Court.  Second, Divisional Court Issue 6 will be reached only if
    Divisional Court Issues 2 and 3 are answered in Keatleys favour. This properly
    isolates the common issue of whether Teranets activities constitute
    infringement if the class members do retain copyright.

[39]

Divisional
    Court Issue 7 is precisely the same as Class Proceedings Judge Issue 10, except
    that the Alleged Uses were defined more narrowly before the Divisional Court.

[40]

There
    is substantial similarity between the two sets of proposed common issues. The
    only issues presented to the Divisional Court that could be described as new
    were issues 2 and 3. Both identify key defences relied on by Teranet. While
    differently worded issues dealing with damages were advanced before the
    Divisional Court, those issues were not certified by that court.

[41]

I
    fail to see how Teranet could have been at any disadvantage in presenting
    arguments to the Divisional Court on the revised set of common issues. The
    conceptual core of the case remained unchanged. As this court stated in
McCracken
    v. Canadian National Railway Co
., 2012 ONCA 445, 111 O.R. (3d) 745, at
    para. 132: A core of commonality either exists on the record or it does not.
    In other words, commonality is not manufactured through the statement of common
    issues. The revised common issues on appeal neither expanded nor altered the
    scope of the litigation that was presented at first instance.

[42]

The
    Divisional Court did not consider the revised, proposed common issues on its
    own initiative without giving Teranet an opportunity to respond, as may occur
    when a class proceedings judge certifies on the basis of issues not argued: see
McCracken
, at para. 144. Teranet had prior notice of the revisions and
    a full opportunity to make submissions before the Divisional Court. All of the revisions
    rested on the existing record and did not call for fresh evidence. As with the
    changes to the proposed class definition, the changes to the proposed common
    issues did not cause Teranet any prejudice or disadvantage that could not be
    compensated in costs.

[43]

The
    changes made to the proposed common issues fall well within the margin that is
    contemplated in
Markson
, at para. 39, for a plaintiff to recast its
    case on appeal to make it more suitable for certification. I agree with
    Keatleys submission that the change permitted in
Markson
was more
    drastic than the changes made in the case at bar.
Markson
concerned a claim
    that the defendant banks flat fees on cash advances amounted to an illegal
    rate of interest. Certification had been denied, in part, on the ground that
    determination of that issue would require that millions of transactions be
    examined individually. This court allowed the plaintiff in
Markson
to
    advance for the first time on appeal a new damages theory based on statistical
    sampling and aggregate damages that avoided the need to examine each
    transaction.

[44]

Similarly,
    in
Pearson v. Inco Ltd.
(2005), 78 O.R. (3d) 641 (C.A.), leave to
    appeal refused,  [2006] S.C.C.A. No. 1, the issues as framed before the class
    proceedings judge claimed personal injury damages arising from emissions from a
    refinery. On appeal to the Divisional Court, that claim was abandoned and the
    revised claim was restricted to loss in property value. This court held that
    the Divisional Court had erred by failing to consider the case as reformulated
    when assessing the class definition requirement.

[45]

Finally,
    the Divisional Court was fully aware of the permissible limits on recasting
    certification motions on appeal. I agree with and adopt what that court stated
    at para. 39:

Nothing in these reasons should be taken as endorsing the
    practice of recasting certification motions on appeal. This practice clearly
    undermines the way class action certification motions should proceed through
    the courts. Using appellate courts to hear matters
de novo
both
    deprives the courts of the expertise of the judges who have been assigned to
    hear these cases at first instance and requires three judges to determine
    issues that could and should have been heard by one judge.

[46]

I note that the issue of recasting a class action on
    appeal was considered in
Good v. Toronto Police Services Board
,
    2014 ONSC 4583 (Div. Ct.), at paras. 13-16, but as leave to appeal to this
    court was granted on February 26, 2015,
I will
    say no more about that decision in these reasons.

[47]

For
    these reasons, I reject Teranets argument that the Divisional Court erred by
    considering revised proposals for certification that differed from those before
    the class proceedings judge.

Issue 2. Did the Divisional Court err in any event by
    granting certification on the basis of the revised proposals as to identifiable
    class, common issues, preferable procedure, and representative plaintiff?

[48]

As
    I have determined that the Divisional Court was entitled to consider the
    changes made by Keatley to the proposed class definition and common issues, I
    now turn to the question of whether the Divisional Court erred in any event by
    certifying the action.

(a)

Class definition

[49]

For
    convenience, I repeat here the proposed class definition considered by the
    Divisional Court:

[A]ll land surveyors, whether acting as individuals,
    corporations, or partnerships, in Ontario who on or before [date of
    certification] were the:

(a)  Author of a plan of survey; or

(b) Employer of the land surveyor at the time the plan was made;
    or

(c) An assignee of either an author or employer,

whose plan of survey appeared at any time in the defendants
    electronic database.

[50]

Teranet
    submits the words whose plan of survey necessarily refer to ownership of
    copyright and, as that is an issue to be determined in the action, the proposed
    class definition remains merits-based.

[51]

This
    submission is without merit. The revised class definition does not rest upon or
    require a determination of copyright ownership. Whose plan of survey relates
    not to copyright ownership but to the connections between the class members and
    the survey, be they the author, the employer of the author or the assignee of
    the author or employer.  That those connections may be found to provide a basis
    for copyright ownership does not make the class definition merits-based.

(b)

Common Issues

[52]

Teranet
    argues that the central issue in this litigation is whether or not each class
    member consented to Teranets use of the plans of survey and that the plaintiff
    must demonstrate lack of consent to make out its claim. It is Teranets further
    contention that individual inquiries respecting each class members involvement
    in the numerous interactions between surveyors, Teranet and land registry offices
    over the past 25 years are required to determine the issue of consent. Teranet
    submits that the common issues proposed by Keatley cannot significantly advance
    the litigation.

[53]

As
    the Divisional Court pointed out, at para. 98, Keatleys revised common issues isolated
    four fundamental questions:

(1) whether, once plans of survey are registered or deposited
    in land registry offices, the Crown acquires the copyright to those plans by
    virtue of s. 12 of the
Copyright Act
[common issue 2];

(2) whether the signed declaration that is affixed to a plan of
    survey at the time of registration or deposit constitutes a written assignment
    of copyright to the Crown pursuant to subsection 13(4) of the
Copyright Act
[common issue 3];

(3) whether by registering and/or depositing the plans of
    surveys at the land registry office the class members are deemed to have
    consented to the Alleged Uses by [Teranet] [common issue 4]; and

(4) whether [Teranet] has a defence to copyright infringement
    based on public policy [common issue 7].

[54]

Each
    of these common issues is based upon the legal position taken by Teranet in
    this litigation, namely, that for at least four different legal reasons,
    Teranets use of the surveys does not amount to copyright infringement. The
    resolution of each of those common issues will turn on legal interpretations
    having general application to class members that do not require any inquiry
    into the individual circumstances of the class member. I agree with the
    Divisional Court that resolution of these issues would significantly advance
    the litigation.

[55]

The
    Divisional Courts assessment of these proposed common issues is entirely
    consistent with decisions dealing with certification in other copyright cases.
    As in
Robertson v. Thomson Corp
. (1999), 43 O.R. (3d) 161 (Gen. Div.),
    at para. 30, Teranets procedural position that the issue of consent is wholly
    individual cannot be reconciled with its substantive position that by
    depositing a survey in the registry, a surveyor must be taken to have agreed to
    Teranets use of the survey in the manner contemplated by the land registry
    scheme. See also
Waldman v. Thomson Reuters Corp
., 2012 ONSC 1138, 22 C.P.C.
    (7th) 33, at paras. 162-65 and 182-83, leave to appeal refused, 2012 ONSC 3436
    (Div. Ct.).

[56]

It
    may well be, as the Divisional Court fully appreciated, that even if Teranet
    fails on these common issues, Teranet will still be able to defend its use of
    the plans of survey because of particular individual actions taken by various
    class members. Individual inquires would have to be undertaken in that regard.
    However, it is well-established that the need for this type of inquiry
    following the resolution of common issues that do advance the litigation is not
    a reason to refuse certification: see,
e.g.
,
Robertson
, at
    para. 33;
Cloud v. Canada (A.G.)
(2004), 73 O.R. (3d) 401 (C.A.), at
    para. 53, leave to appeal refused, [2005] S.C.C.A. No. 50: an issue can
    constitute a substantial ingredient of the claims and satisfy s. 5(1)(c) even
    if it makes up a very limited aspect of the liability question and even though
    individual issues remain to be decided after its resolution.

[57]

It
    follows from what I have said on this issue that I think the class proceedings
    judge erred in refusing certification on the ground that individual inquiries
    into the circumstances of class members would be required.  The Divisional
    Court erred by failing to point out that error.

(c)

Preferable Procedure

[58]

Teranets
    contention that the Divisional Court erred in finding that the preferable
    procedure requirement was satisfied essentially reiterates the argument that
    individual issues overwhelm the common issues arising from Teranets legal
    defences.

[59]

I
    agree with the Divisional Courts conclusion, at paras. 112-113, that the
    common issues identify significant elements of this litigation that, if
    resolved in Teranets favour, would be fatal to the claim.  If Teranet does not
    succeed on the common issues, the remaining issues requiring individual trials
    would be fewer and simpler by virtue of the determination of the common issues.

(d)

Representative Plaintiff

[60]

Most
    land surveyors in Ontario  indeed, on the record before us, all surveyors other
    than Keatley - are both users and providers of the surveys in the
electronic land registry system operated by Teranet
. They
    must acquire copies of relevant surveys when preparing new surveys and then they
    register and deposit the new survey that they have prepared. As Keatleys
    surveying work is limited almost exclusively to Manitoulin Island, and it has
    an extensive collection of surveys of the island, Keatley relies on neither
    Teranet nor the land registry office to do the necessary research.

[61]

Teranet
    seizes on this unusual aspect of Keatleys surveying practice.   It argues that
    if the action succeeds, as a practical matter, Teranet would be required to pay
    royalties to the class members and to impose corresponding additional fees on
    users. Class members would gain from the payments they receive for use of the
    surveys they prepare and lose from the additional fees they will pay for the
    surveys they require.  By contrast, Keatley is in an unusual position. It does
    not require copies of surveys and therefore only stands to gain if the class
    proceeding is successful.  Teranet argues that Keatley is not a suitable
    representative plaintiff for this reason. Section 5(1)(e) of the
Class
    Proceedings Act, 1992
provides that a representative plaintiff is one
    who:

(i)
would fairly and adequately
    represent the interests of the class,

(ii)       has produced a plan for
    the proceeding that sets out a workable method of advancing the proceeding on
    behalf of the class and of notifying class members of the proceeding, and

(iii)     does not have, on the
    common issues for the class, an interest in conflict with the interests of
    other class members.

[62]

In
    this part of my reasons I will focus on points (i) and (iii) and return to (ii)
    the issue of an appropriate litigation plan below.

[63]

The
    class proceedings judge ruled that Keatley was not a proper representative
    plaintiff as it does not rely on Teranet to obtain copies of plans of survey. Before
    the class proceedings judge, Keatley claimed a permanent injunction enjoining
    [Teranet] from dealing with, in any way or fashion, copies of [plans of survey]
    that it currently has in its possession. If granted, such an injunction would shut
    down Teranets capacity to provide copies of plans of survey. As surveyors
    other than Keatley require such copies to do their work, the class proceedings
    judge ruled that this put Keatleys interests in conflict with the proposed
    class members.

[64]

Keatley
    withdrew the claim for an injunction in the factum it filed in the Divisional
    Court so that Teranet had notice of that change of position before the appeal
    to the Divisional Court was argued. The Divisional Court concluded that any
    conflict between Keatley and members of the proposed class was thereby removed.
    Citing
Western Canadian Shopping Centres Inc. v. Dutton,
2001 SCC 46,
    [2001] 2 S.C.R. 534, at para. 41, the Divisional Court ruled that the
    circumstances of the representative plaintiff need not be the same as all or
    many of the members of the class. The Divisional Court found, at para. 120, it
    is arguable that [Keatleys] unique circumstances, in particular his lack of
    reliance on [Teranet], make him ideally suited to vigorously prosecute the
    claim.

[65]

I
    agree with the Divisional Courts analysis of this issue and reject Teranets
    submission that even if the claim is restricted to damages, there remains a
    conflict between Keatley and the members of the proposed class.

[66]

I
    observe at the outset that by accepting Keatley as a proper representative
    plaintiff, the Divisional Court did not ignore or obliterate any legitimate
    defences that Teranet may assert. As I have indicated above in my discussion of
    the common issues, Teranet is able to assert defences to the claims of those
    class members who may have waived, assigned, or surrendered their rights. The
    possibility of a judgment that results in success for some but not all class
    members does not amount to a conflict that disentitles Keatley to act as the
    representative plaintiff.

[67]

If
    Keatley is able to establish a breach of copyright on behalf of all or some
    members of the class, those class members would legally benefit from a judgment
    holding that they retain copyright in the plans of survey they register and
    deposit in Ontarios electronic land registry system. They would certainly gain
    from any damages or disgorgement ordered with respect to past infringement. As
    for the future, the likely result of a judgment in favour of the class may well
    be a process of negotiation to license Teranet to provide electronic copies of plans
    of survey in exchange for a royalty or fee. Surveyors stand to benefit from such
    payments. While they might reasonably expect that Teranet would endeavour to
    pass on the added cost of the licence or royalty through an increased fee for
    providing copies of surveys,  that is a cost surveyors could in turn pass on to
    their clients.

[68]

While
    it may be the case that Keatley stands to gain more than other surveyors
    because of his unusual situation, I am not persuaded that the situation of
    other surveyors is so different or distinct so as to give rise to a conflict or
    make Keatley unsuitable to represent their interests.

Issue 3. Did the Divisional Court err in holding that
    it is not necessary that there be anyone other than the plaintiff who wishes to
    pursue its claims as a class action, or at all?

[69]

A related but distinct issue to the one I have just
    discussed is whether the Divisional Court properly concluded that the class
    proceedings judge erred in holding, at paras. 139 and 156 that Keatley was
    required to provide evidence of two or more people who are desirous of having
    their claims determined in a class proceeding and that failure to do so was
    fatal to certification. After a thorough review of the relevant case law, including
Lambert v. Guidant Corp
. (2009), 72 C.P.C. (6th) 120, leave to appeal
    refused (2009), 82 C.P.C. (6th) 367 (Div. Ct.),  and
Singer v.
    Schering-Plough Canada Inc
., 2010 ONSC 42, 87 C.P.C. (6th) 276,  the
    Divisional Court concluded, at para. 85:

In short, the desirous component of the identifiable class
    criterion is not mentioned in the legislation, not required to achieve the
    purposes of the criterion and not mentioned in the Supreme Court of Canada
    jurisprudence that discusses the issue.

[70]

It
    is, of course, incumbent on the proposed representative plaintiff to show that
    there are two or more individuals who have the same claim as the representative
    plaintiff to advance. Ordinarily, the existence of more than one claim will be
    apparent from the very nature of the claim being advanced. This case falls into
    that category. If the representative plaintiff has claim for breach of
    copyright, it is apparent that other surveyors will have a like claim.

[71]

Where
    the existence of multiple claims is not apparent, some evidence that multiple
    claims exist may be required:
Hollick v. Toronto (City),
2001 SCC 68, [2001]
    3 S.C.R. 158, at paras. 24-25. As stated in
Lau v. Bayview Landmark Inc
.,
    (1999), 40 C.P.C. (4th) 301 (S.C.), at para. 27, the threshold for
    establishing the existIe of the class ... will vary from case to case.  For
    instance, the existence of the cause of action may turn on subjective factors
    where a plaintiffs allegations of harm raise a question as to the tolerance
    level of other individuals:
Lau
, at para. 29. In
Taub v.
    Manufacturers Life Insurance Co.
(1998), 40 O.R. (3d) 379 (Gen. Div.),
    affd (1999), 42 O.R. (3d) 576 (Div. Ct.), the proposed representative
    plaintiff alleged that there was mould in the bathroom of her rental apartment,
    but there was no evidence that mould was present elsewhere in the building.  Certification
    was denied as there was no evidence led that the harm complained of was the
    subject of concern to anyone else. In
Sun-Rype Products Ltd. v. Archer
    Daniels Midland Co.,
2013 SCC 58, [2013] 3 S.C.R. 545, a price-fixing
    case, the class definition included purchasers of products containing, among
    other ingredients, the substance for which the price had allegedly been fixed.
    This was fatal to certification of indirect purchasers as class members because
    the uncontradicted evidence was that the impugned substance had been used
    interchangeably with another in products and there was no way for an indirect
    purchaser to know which of the two substances had been used.  As a result, the
    majority held at para. 69, there was no evidence to show that two or more
    persons had purchased a product containing the substance for which the price
    had allegedly been fixed.

[72]

I
    agree with the Divisional Court that a distinction must be drawn between the
    existence of multiple claims and the subjective wishes or intentions of individual
    class members to assert a claim. It is in the very nature of class actions that
    many, if not most, individual class members lack the motivation or the will to
    commence proceedings. The access to justice and behavior modification goals of
    class proceedings will often depend upon a representative plaintiff taking the
    initiative in circumstances where other members of the class would be ignorant
    of their loss or acquiesce because of disinterest, lack of resources or fear of
    an adverse costs award. If multiple claims exist, the representative plaintiff
    does not have to conduct a referendum to determine how many class members want
    to sue. Ontarios class action regime features an opt-out procedure which
    affords class members who do not wish to have their claims advanced the right
    to disassociate themselves from the action. There is no corresponding
    requirement to establish a willing class.

[73]

As
    the Divisional Court observed, citing
Lambert
, at para. 98, and
Singer
,
    at para. 136, in cases where the interest of the representative plaintiff is
    sufficiently idiosyncratic to call into question the utility of a class
    proceeding, the court may exercise a gatekeeper function under the s. 5(1)(d)
    preferable procedure requirement. As Keatleys claim is one that, if
    successful, would benefit some or all of the class members, I would not put
    this case into that category.

[74]

Accordingly,
    the Divisional Court did not err in rejecting the proposition that under s.
    5(1)(b) of the
Class Proceedings Act, 1992
it is necessary to show
    that there are class members, other than the plaintiff, who wish to pursue
    claims as a class action.

Issue 4. Did the Divisional Court err in certifying the
    proceeding without requiring the plaintiff to propose a workable litigation
    plan?

[75]

The
    Divisional Court found that, in the circumstances of this case, the litigation
    plan provided by Keatley was adequate as the common issues judge would be in the
    best position to determine how to resolve the individual issues. The Divisional
    Court was alive to the complexity of this litigation and accepted that
    developing an iron-clad, full-blown litigation plan at this stage of the
    proceeding would be difficult, if not impossible. As it is almost inevitable
    that the litigation plan will be modified as the case proceeds, it was
    reasonable for the Divisional Court to accept the plan Keatley provided and to refer
    the details to the common issues judge: see
Cloud
, at para. 95.

CONCLUSION

[76]

For
    these reasons, I would dismiss this appeal.

[77]

If the parties are unable to agree as to the costs of the
    appeal, they may file brief written submissions.

Released: R.J.S. April 14, 2015

Robert J. Sharpe J.A.

I agree K. M. Weiler
    J.A.

I agree R. A. Blair
    J.A.

Schedule A

PROPOSED COMMON ISSUES BEFORE THE CLASS PROCEEDINGS JUDGE

1. Do Class Members who create a Plan of Survey have any of
    the rights to those Plans of Survey as set out under Sections 3(1), 3(1)(a)
    and/or 3(1)(f) of the
Copyright Act
?

2. Are Class Members deemed to have authorized or consented
    to any or all of the Alleged Uses by the Defendant of Plans of Survey as a
    result of the registration and/or deposit of those Plans of Survey to the
    Ontario Land Registry Office?

3. Did the Defendant make any or all of the Alleged Uses of
    Plans of Survey? If so, which ones?

4. Absent individual consent, are any or all of the Alleged
    Uses:

a. Infringement on Class Members' Copyright in Plans of Survey
    for the purposes of s. 27(1) of the
Copyright Ac
t;

b. Secondary infringement on Class Members' Copyright in Plans
    of Survey for the purposes of s. 27(2) of the
Copyright Act
;

and if so, which ones?

5. If Class Members elect under s. 38.1 of the
Copyright
    Act
to recover statutory damages and liability is established against the
    Defendant at the common issues trial, then:

a. Should statutory damages be awarded?

b. If so, can the aggregate amount of statutory damages be
    determined as a common issue? And

c. If so, how should these damages be calculated?

6. If Class Members do not elect under s. 38.1 of the
Copyright
    Act
to recover statutory damages, and if liability is established against
    the Defendant at the common issues trial, should the trial judge grant a
    declaration that the Class Members are entitled to remedies pursuant to the
Copyright
    Act
, in an amount to be determined at a subsequent hearing?

7. Did the conduct of the Defendant meet the standard
    required for an award of punitive damages? Once compensatory damages are
    determined, in what amount and to whom should punitive damages be paid?

8. Should the Defendant pay pre- and post-judgment interest,
    and, if so, at what annual interest rate?

9. Are Class Members entitled to an injunction pursuant to
    the
Copyright Act
?

10. Does the Defendant have a defence to copyright
    infringement based on public policy that would justify the Defendant making the
    Alleged Uses of Plans of Survey?

DEFINITIONS

"
Alleged Uses
" means:

a) Making copies of Plans of Survey;

b) Translating copies of Plans of
    Survey into digital formats;

c) Transmitting digital copies of
    Plans of Survey to the Defendant's data-receiving centre by telecommunication;

d) Storing digital copies of the
    Plans of Survey in the Defendant's electronic database;

e) Adding the digital copies of the Plans
    of Survey to the Defendant's index of documents available through Teraview
    and/or GeoWarehouse;

f) Communicating the digital copies
    of Plans of Survey to the public by telecommunications;

g) Offering the digital copies of the
    Plans of Survey for sale to Customers for a fee; and/or

h) Allowing Customers to print or
    download one or more copies of Plans of Survey;

...

"
Customers
" means the
    Defendant's subscribers and/or members of the public; and

"
Plans of Survey
" means
    plans of survey prepared by Land Surveyors and registered and/or deposited in
    the Ontario Land Registry Office, and includes any drawings, maps, charts or
    plans contained in same.

Schedule
    B

PROPOSED COMMON ISSUES BEFORE THE DIVISIONAL COURT

COPYRIGHT IN PLANS OF SURVEY

1. Does copyright under the
Copyright Act
subsist in
    the Plans of Survey?

2. Does the copyright in the Plans of Survey belong to the
    Province of Ontario pursuant to section 12 of the
Copyright Act
as a
    result of the registration and/or deposit of those Plans of Survey in the
    Ontario Land Registry Office?

3. Does the signed declaration affixed to the Plan of Survey at
    the time of registration and/or deposit constitute a signed written assignment
    of copyright to the Province of Ontario pursuant to subsection 13(4) of the
Copyright
    Act
?

DEEMED CONSENT

4. Are Class Members deemed to have consented to any or all of
    the Alleged Uses by the Defendant of Plans of Survey as a result of the
    registration and/or deposit of those Plans of Survey to the Ontario Land Registry
    Office?

INFRINGEMENT

5. Did the Defendant make any or all of the Alleged Uses of
    Plans of Survey? If so, which ones?

6. If the answers to common issues 2 and 3 are no, do any or
    all of the Alleged Uses constitute:

a. uses that by the
Copyright Act
only the owner of
    the copyright has the right to do?

b. uses that are listed in paragraphs 27(2)(a) to (e) of the
Copyright Act
and that the Defendants knew or should have known
    infringes copyright?

and if so, which ones?

DEFENCES

7. Does the Defendant have a defence to copyright infringement
    based on public policy that would justify the Defendant making the Alleged Uses
    of Plans of Survey?

RELIEF

8. Did the conduct of the Defendant justify an award of
    aggravated, exemplary, or punitive damages?

9. Can an aggregate award of damages be made pursuant to
    subsection 24(1) of the
Class Proceedings Act, 1992
? If so, in what
    amount?

DEFINITIONS

"
Alleged
    Uses
" means:

a) Making copies of Plans of
    Survey;

b) Transmitting digital copies of
    Plans of Survey to the Defendant's data-receiving centre;

c) Storing digital copies of the
    Plans of Survey in the Defendant's electronic database;

d) Adding the digital copies of
    the Plans of Survey to the Defendant's index of documents available through
    Teraview and/or GeoWarehouse;

e) Offering the digital copies of
    the Plans of Survey to Customers for a fee; and/or

f) Allowing Customers to print or
    download one or more copies of Plans of Survey;

...

"
Customers
" means the Defendant's subscribers and/or members of
    the public; and

"
Plans
    of Survey
" means plans of survey prepared
    by Land Surveyors and registered and/or deposited in the Ontario Land Registry
    Office, and includes any drawings, maps, charts or plans contained in same.


COURT OF APPEAL FOR ONTARIO

CITATION: Kiani v.
    Smith, 2015 ONCA 232

DATE: 20150408

DOCKET: C59608

Sharpe, van Rensburg and Brown JJ.A.

BETWEEN

Farsad Kiani

Plaintiff (Appellant)

and

Annalyn G. Smith
and Pamela Pengelley

Defendants (Respondent)

V. Ross Morrison, for the appellant

Iain Peck and Tania Campisi, for the respondent

Heard and released orally: March 31, 2015

On appeal from the order of Justice David Corbett of the Superior
    Court of Justice, dated October 6, 2014.

ENDORSEMENT

[1]

The claim asserted by the appellant relates to:

1)

the alleged conduct of
    the respondent Smith, a Texas lawyer, in connection with litigation in Texas
    against a company of which the appellant was the principal; and

2)
    the alleged conduct by that same lawyer in relation to enforcement proceedings
    brought in Ontario based upon the Texas judgment.

[2]

The motion judge struck the claim on a rule 21 motion as disclosing no
    cause of action.

[3]

We agree with the motion judge that the claim is misconceived.

[4]

The conduct of Smith in the Texas proceedings concerned conversations
    between her, as counsel for the opposing party, and a former employee of one of
    the appellants companies, a potential witness in the case, and her statement
    that she might call that witness on behalf of her client. Those statements, as
    pleaded, whether in conspiracy or intentional infliction of harm, are not
    actionable. It is conceded that as the respondent was acting for the opposite
    party in litigation, she owed the appellant no legal duty. There is no
    allegation that anything done in Texas was contrary to Texas law. We also agree
    with the motion judge that as the claim rests on Smiths conduct of litigation
    in Texas, it would be incumbent on the appellant to raise any objection to that
    conduct in the courts of Texas.

[5]

To the extent the pleading asserts interference with contractual
    relations, we note that the only contract pleaded is that of the witness as an
    employee of the corporation, not the plaintiff.

[6]

With respect to the allegations resting on the Ontario enforcement
    action, as the motion judge found, the allegation of a breach of the implied
    undertaking rule must be dealt with within the context of the Ontario action.

[7]

In our view, the motion judge was well within his discretion in ruling
    that this was a clear case in which leave to amend should be refused.

[8]

We see no merit in the contention that, having heard and decided the
    companion motion brought by the Ontario solicitor, the motion judge should have
    recused himself from hearing this motion. Both matters were scheduled to be
    heard together, and the statement alleged to give rise to a reasonable apprehension
    of bias was nothing more than a proposition of law upon which the appellant had
    been fully heard.

[9]

Accordingly, the appeal is dismissed.

[10]

Costs
    to the respondent fixed at $7,000, inclusive of disbursements and taxes.

Robert J. Sharpe J.A.

K. van Rensburg J.A.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lilydale Cooperative Limited v. Meyn Canada Inc.,
    2015 ONCA 281

DATE: 20150422

DOCKET: C57995

Laskin, Cronk and Rouleau JJ.A.

BETWEEN

Lilydale Cooperative Limited

Plaintiff (Respondent)

and

Meyn Canada Inc., Mey-Can Equipment Ltd., and
    Meyn Food Equipment Inc.,
EMK NV and Elboma Moortgat Konstruktie NV

Defendants

(Appellants/Respondents
    by way of cross-appeal

Respondents
/
Appellants
    by way of cross-appeal)

and

Allied Boiler Services Inc. and Weishaupt
    Corporation

Third
    Parties (Respondents)

Derek V. Abreu, for the appellants/respondents by way of
    cross-appeal

Jamieson Halfnight and Anne Thompson, for the respondent
    Lilydale Cooperative Limited

Erin Hoult and David K. Badham, for the respondents/appellants
    by way of cross-appeal EMK NV and Elboma Moortgat Konstruktie NV

No one appearing for the respondents Allied Boiler
    Services Inc. and Weishaupt Corporation

Heard: December 2, 2014

On appeal from the order of Justice Andra Pollak of the Superior
    Court of Justice, dated April 2, 2014.

Laskin
    J.A.:

A.

Overview

[1]

The overriding question on this appeal is whether the motion judge erred
    in finding that Ontario law, rather than Alberta law, governed a contract
    between the appellant Meyn and the respondent Lilydale.

[2]

Meyn is a multi-national enterprise, incorporated in Canada under the
Canada
    Business Corporations Act
, R.S.C. 1985, c. C-44.

In Canada it operates
    only in Ontario. Lilydale is an Alberta corporation and operates a poultry
    processing plant in Edmonton. In 1993, Lilydale purchased from Meyn a fryer
    and oven system for its Edmonton plant. Lilydale used the fryer and oven
    system for 10 years, until January 2004, when a fire occurred in its plant. In
    January 2006, Lilydale sued Meyn in Ontario for negligence and breach of
    contract. It alleged that the fire and oven system was defective and caused the
    fire.

[3]

The parties jointly brought a motion by special case
[1]
on an agreed set of facts to determine whether Alberta or Ontario law applied
    to the tort and breach of contract claims. The issue is important because
    Alberta and Ontario have different ultimate limitation periods. Even taking
    into account discoverability, Albertas ultimate limitation period is 10 years;
    Ontarios is 15 years. The parties agreed that Lilydales cause of action arose
    no later than August 31, 1994. Therefore, as Lilydale did not sue until January
    2006, if Alberta law applied, its action was statute-barred; if Ontario law
    applied, it was not.

[4]

The motion judge found that Alberta law applied to the tort claim.
    Lilydale has not appealed that finding. The motion judge then found that
    Ontario law applied to the breach of contract claim. As the contract between
    Lilydale and Meyn did not have a choice of law clause, the motion judge applied
    the test for determining the applicable law, long recognized in our
    jurisprudence: which jurisdiction, Alberta or Ontario, had the closest and
    most real connection to the contract?

[5]

The motion judge considered the four criteria typically used to assess
    the closest and most real connection: the nature and subject matter of the
    contract; the place of performance of the contract; the place of contracting;
    and the residence and domicile of the parties. She held that the first two
    criteria favoured Ontario, and that the last two criteria were neutral. She
    therefore concluded that Ontario law governed Lilydales claim for breach of
    contract. Thus, the action was not barred by a limitation period.

[6]

Meyn acknowledges that the motion judge stated the right test, but
    contends that she misapplied it. On its appeal, Meyn raises two issues: did the
    motion judge err in holding that the nature and subject matter of the contract
    favoured Ontario rather than Alberta; and did she similarly err in holding that
    the place of performance of the contract favoured Ontario?

[7]

The respondent EMK
[2]
cross-appeals against Meyn. Meyn has crossclaimed against EMK in the contract
    action, and EMK seeks an order dismissing the crossclaim if the main appeal is
    allowed. EMK supports Meyns position on the main appeal and raises a third
    issue: did the motion judge err in holding that the residence and domicile of
    the parties was a neutral criterion, rather than one favouring Alberta?

[8]

Meyn also seeks to leave to appeal the motion judges costs order. The
    motion judge awarded Lilydale costs of $35,000. Meyn contends that she ought to
    have ordered no or nominal costs, or costs in the cause, because the parties
    brought the motion for their joint benefit and because success on the motion
    was divided.

B.

Did the
    motion judge err in finding that Ontario law applied to Lilydales breach of
    contract claim
?

(a)

The test for determining the applicable law

[9]

Meyn and Lilydale did not include in their contract a clause for the law
    that would govern disputes between them. Absent such a clause, the motion judge
    applied the test first set out by the Supreme Court of Canada nearly 50 years
    ago in
Imperial Life Assurance Co. of Canada v. Segundo Casteleiro Y
    Colmenares
, [1967] S.C.R. 443. All parties agreed that this was the
    appropriate test. In
Colmenares
, relying on English authority, Ritchie
    J. set out the closest and most real or most substantial connection test, at p.
    448:

It now appears to have been accepted by the highest Courts in
    England that the problem of determining the proper law of a contract is to be
    solved by considering the contract as a whole in light of all the circumstances
    which surround it and applying the law with which it appears to have the closest
    and most substantial connection.

This test was adopted by the Privy Council in
Bonython v.
    Commonwealth of Australia
, [1951] A.C. 201, where Lord Simonds said at p.
    219:

... the substance of the obligation must be determined by
    the proper law of the contract,
i.e.
, the system of law by reference to
    which the contract was made or that with which the transaction had its closest
    and most real connexion.

[10]

For
    the criteria that inform this test, Ritchie J. turned to Cheshires text on
private international law
:

The many factors which have been taken into consideration in
    various decided cases in determining the proper law to be applied, are
    described in the following passage from
Cheshire on Private International
    Law
, 7th ed., p. 190:

The court must take into account, for instance, the
    following matters: the domicil and even the residence of the parties; the
    national character of a corporation and the place where its principal place of
    business is situated; the place where the contract is made and the place where
    it is to be performed; the style in which the contract is drafted, as, for
    instance, whether the language is appropriate to one system of law, but
    inappropriate to another; the fact that a certain stipulation is valid under
    one law but void under another  the economic connexion of the contract with
    some other transaction  the nature of the subject matter or its
situs
;
    the head office of an insurance company, whose activities range over many
    countries; and, in short, any other fact which serves to localize the contract.

[11]

The
    motion judge focused on four criteria: the nature and subject matter of the
    contract, the place of performance of the contract; the place of contracting,
    and the domicile and residence of the parties. The motion judges finding that
    the place of contracting was neutral is not contested on this appeal. Her
    findings on the other three criteria are in issue. I turn to them now. I do so
    with the standard of appellate review in mind. The motion judges balancing of
    the four criteria she considered called for the exercise of her discretion.
    Unless, in exercising her discretion, she made an error of law or an
    unreasonable finding of fact or balanced the criteria in an unreasonable way,
    this court should not interfere.

(b)

The nature and subject matter of the contract

[12]

The
    motion judge characterized the contract as one for the design, delivery, and
    installation of the System for Lilydale. She held that this criterion pointed
    to Ontario.

[13]

Both
    Meyn and EMK contend that the motion judge mischaracterized the nature of the
    contract. They say it was simply a contract for the sale and installation of a
    piece of equipment. And, as Meyn shipped the equipment FOB,
[3]
title passed and the sale was effected on delivery in Alberta. Thus the subject
    matter of the contract shows that Alberta had the closest connection to it.

[14]

I
    do not agree with this contention. Both Meyn and EMK have recharacterized the
    nature of the contract, contrary to the agreed statement of facts. Paragraph 11
    of the agreed statement provides:

In the summer of 1993, Lilydale solicited a proposal from Meyn
    for a fryer and oven system for use at the Plant in Edmonton. On August 6,
    1993, Meyn faxed a proposal from Mississauga, Ontario, to Lilydale in Edmonton,
    Alberta, regarding the design and sale of a fryer and oven system by Meyn to
    Lilydale.

[15]

In
    other words, the parties agreed that the contract was not simply for the sale
    of a good; it was a contract for the
design
and sale of a fryer and
    oven
system
(my emphasis). The other facts agreed to by the parties
    amply supported this characterization. The system consisted of a number of
    different components. Meyn ordered these components from various suppliers and
    arranged for them to be shipped to Lilydale. Meyn also had to design the
    system. All of this  the ordering of the components and the design  was done
    in Ontario. The motion judges finding that the nature and subject matter of
    the contract was more closely connected to Ontario was a reasonable finding.

(c)

The place of performance of the contract

[16]

The
    place of performance of the contract is related to its subject matter and, for
    determining the applicable law, is perhaps the most important criterion. The
    motion judge concluded that most of the contract was performed in Ontario
    Meyn had to design the system, choose the components and arrange to obtain
    them. It did all of this in Ontario; it performed virtually no work in Alberta.

[17]

Meyn
    and EMK submit that the motion judge erred in her finding on this criterion.
    They make three related points. First, they maintain that the obligations
    imposed by the contract were performed in Alberta. Under the contract, Meyn was
    obligated to deliver the fryer and oven system to Lilydales plant in Edmonton
    and arrange for installation and start-up by a qualified technician. The
    parties agreed that delivery, installation, and start-up took place at
    Lilydales plant in Edmonton. Indeed, under the contract that was the only
    place these obligations could be performed.

[18]

Second,
    they argue that the motion judge erred by failing to infer that Meyn performed
    work in Alberta. They point out that under rule 22.05 of our
Rules of Civil
    Procedure
, a motion judge on a special case is entitled to draw reasonable
    inferences from the agreed facts, and they contend the motion judge wrongly
    refused to draw any inferences.

[19]

Third,
    Meyn and EMK argue that numerous cases have held that in a contract for the
    sale of goods, where the goods are shipped from one jurisdiction to another,
    the jurisdiction where delivery and installation and start-up take place is
    normally the jurisdiction whose law governs the contract  in this case,
    Alberta. They point, for example, to
Rôtisserie Mays Ltée v. Stoel-Tek
    Inc.
(1990)
, 104 N.B.R.
    (2d) 255 (N.B. Q.B.), and
Oleet Processing Ltd. v. Puratone Corp.
,
    2010 SKQB 69, 352 Sask. R. 190.

[20]

I
    do not agree with any of these three points. On their first point, Meyn and EMK
    have again failed to take into account that this contract was not just for the sale
    of a piece of equipment, but also for the design of a system. And as I have
    said, the system was designed in Ontario. Thus this contract was partly
    performed in Alberta, and partly performed in Ontario. Another judge might have
    found that performance of contract favoured Alberta instead of Ontario. But the
    motion judges finding that most of the contract was performed by Meyn in
    Ontario was a reasonable finding, supported by the agreed statement of facts.

[21]

On
    Meyns and EMKs second point, the motion judge was well aware she was entitled
    to draw reasonable inferences from the agreed facts. She chose not to do so
    because Meyn and Lilydale disagreed on what inferences should be drawn. She did
    not err because she did not accept Meyns view of what inferences were
    reasonable.

[22]

Indeed,
    Meyn wanted her to infer it performed some work on the contract in Alberta. Yet
    the evidence on whether it did so was unclear. The agreed statement of facts
    says that the only work performed in Alberta by anyone other than Lilydale was
    by the third party, Allied Boiler, who went to the plant for a single day and
    mounted the burner and gas train to the boiler.

[23]

On
    Meyns and EMKs final point, I accept that in several cases of
    multi-jurisdictional contracts for the sale of goods the place of delivery has
    been held to be the place of performance. But this is not a general rule. See,
    for example,
General Refractories Co. of Canada v. Venturedyne Ltd.
, 2002
    Carswell Ont. 36 (S.C.), at paras. 116-18. A motion judge has discretion to
    determine in any given case whether the place of delivery should be controlling.
    And as I have said, this was not simply a contract for the sale of goods. It
    had a design component, and that component was performed in Ontario.

[24]

For
    these reasons, the motion judges finding that the place of performance of the
    contract pointed more to Ontario than Alberta was a reasonable finding.

(d)

The domicile and residence of the parties

[25]

The
    motion judge found that this criterion was neutral because Meyn is a resident
    of Ontario and Lilydale was resident in Alberta. Meyn does not contest her
    finding. But EMK does.

[26]

EMK
    submits that this criterion favours Alberta because domicile and residence are
    not synonymous. As Lilydale is an Alberta corporation with its place of
    business in Alberta, both its domicile and residence point to Alberta. But as Meyn
    is a Canadian corporation with its place of business in Ontario, only its
    residence points to Ontario. This submission has little merit. The motion judge
    was justified in looking only to the residence of each company and in finding
    that, as they cancel each other out, this criterion was neutral.

(e)

Conclusion on the applicable law

[27]

The
    motion judges findings on the relevant criteria were reasonable, as was her
    overall conclusion that the closest and most real connection to the contract
    was Ontario.

[28]

Nonetheless,
    EMK argues that the motion judges conclusion is inconsistent with the
    principles of order, fairness, and comity that underlie private international
    law. This argument was not made before the motion judge and I doubt we should
    consider it on appeal. But even if we do consider it, I see nothing unfair in
    requiring Meyn to adhere to the substantive law of Ontario, the law of its home
    jurisdiction in Canada. Meyn, a multi-national enterprise, could have inserted
    a choice of law clause in its contract with Lilydale. Had Meyn done so, it
    would undoubtedly have chosen Ontario, the only province in Canada where it
    operates. It seems to me more than a little ironic that despite its own close
    connection to Ontario, Meyn would seek to take advantage of Alberta law.

[29]

I
    would dismiss Meyns appeal from the motion judges holding that Ontario is the
    jurisdiction with the closest and most real connection with the contract.

C.

Did the
    motion judge err in awarding Lilydale its costs of the motion
?

[30]

The
    motion judge awarded Lilydale costs of the motion on a partial indemnity basis
    in the amount of $35,000. Meyn asked for leave to appeal on the question
    whether Lilydale is entitled to costs. It makes two submissions: the motion was
    brought jointly, for the benefit of both parties; and Lilydale was only partly
    successful on the motion, as its tort claim was found to be statute-barred. On
    either ground, Meyn submits that costs should be in the cause, or Lilydale
    should at most be entitled to nominal costs.

[31]

I
    would deny leave to appeal costs. The motion judge exercised her discretion
    reasonably in awarding Lilydale costs. Although the parties brought the motion jointly,
    the proceedings were adversarial. At stake was Lilydales ability to maintain
    its action. And, although its tort claim was found to be statute-barred, it can
    continue with its breach of contract claim. Its success in preserving its claim
    in contract entitled it to costs.

D.

Conclusion

[32]

I
    would dismiss Meyns appeal and EMKs cross-appeal. The motion judge did not
    err in concluding that Ontario law governs Lilydales breach of contract claim.
    I would also deny Meyn leave to appeal the motion judges costs order. Lilydale
    is entitled to the costs of the appeal against Meyn and EMK jointly in the
    agreed on amount of $20,000, inclusive of disbursements and applicable taxes.

Released: April 22, 2015 (J.L.)

John Laskin J.A.

I agree. E.A. Cronk J.A.

I agree. Paul Rouleau J.A.

[1]
Under Rule 22 of the
Rules of Civil
    Procedure
,
R.R.O. 1990, Reg. 194, the parties may state a question
    of law in the form of a special case for the opinion of the court. The special
    case proceeds on an agreed statement of facts. Its purpose is to ask the court
    to decide a question that may dispose of all or part of a proceeding or shorten
    the hearing.

[2]
EMK NV and Elboma Moortgat Konstruktie NV are not separate entities; EMK NV is
    an abbreviation of Elboma Moortgat Konstruktie NV.

[3]
Free on board.