COURT OF APPEAL FOR ONTARIO

CITATION: Dams v. TD Home and Auto Insurance Company, 2016 ONCA 4

DATE: 20160106

DOCKET: C59717

Blair, Hourigan and Brown JJ.A.

BETWEEN

Wolfgang Dams and Tammy Dams

Plaintiffs (Respondents/Appellants by way of cross-appeal)

and

TD Home and Auto Insurance Company

Defendant (Appellant/Respondent by way of cross-appeal)

Dwain C. Burns, for the appellant/respondent on
    cross-appeal

Matthew A. Caldwell and Christopher J. Haber, for the
    respondents/appellants on cross-appeal

Heard: October 29, 2015

On appeal from the judgment of Justice James W. Sloan of
    the Superior Court of Justice, dated November 13, 2014.

Brown J.A.:

Overview

[1]

On July 26, 2009, the respondent, Wolfgang Dams, and his friend,
    Gary Black, were riding their motorcycles along Old Bronte Road in Oakville,
    Ontario. Mr. Dams stopped his motorcycle at the intersection of Old Bronte Road
    and Bronte Road  a four-lane divided highway  preparing to make a right-hand
    turn onto Bronte Road. Mr. Black stopped his bike behind that of Mr. Dams.

[2]

According to Mr. Dams, he looked to his left and saw a cube van
    approaching in the northbound passing lane about 100 yards to the south and a
    red vehicle in the curb lane much further to the south. He turned his bikes
    front wheel slightly to the right and began to pull out very slowly. When he
    took a further glance to the left, he saw a dark vehicle approaching in the
    curb lane which would have hit him had he proceeded onto Bronte Road. Mr. Dams
    braked, but the angle of his front wheel, combined with his slight forward
    momentum, caused his bike to fall on him. He suffered an ankle injury.

[3]

At the time of the accident, Mr. Dams was insured under an automobile
    insurance policy issued by the appellant, TD Home and Auto Insurance Company
    (TD Home). In October 2009, Mr. Dams applied to TD Home for certain accident
    benefits, which he received. Then, in May 2010, Mr. Dams commenced a tort
    action against TD Home seeking damages under the Uninsured Automobile Coverage
    provisions of his policy.

[4]

At trial, TD Home argued that Mr. Dams was prohibited from
    bringing his action because he had failed to comply with certain reporting
    provisions in his policy. The trial judge rejected that defence and granted Mr.
    Dams relief from forfeiture in respect of his non-compliance. The trial judge
    assessed liability by allocating 60% of the responsibility for the accident
    against Mr. Dams and 40% against the driver of the unidentified vehicle.

[5]

TD Home appeals from both findings. It submits that the trial
    judge erred in granting Mr. Dams relief from forfeiture. It also appeals from
    the apportionment of liability, contending that the trial judge erred in
    finding negligence on the part of the unidentified driver. Mr. Dams
    cross-appeals on the issue of liability, arguing that the trial judge erred in
    finding any liability against him.

[6]

For the reasons set out below, I would dismiss the appeal and
    cross-appeal. The trial judge possessed the jurisdiction under s. 129 of the
Insurance
    Act,

R.S.O. 1990, c. I.8,
to grant Mr. Dams relief
    from forfeiture related to his failure to comply in a timely fashion with
    certain reporting requirements concerning uninsured automobile coverage. On the
    issue of liability, it was open to the trial judge on the evidence before him
    to make the findings he did, and to apportion liability accordingly.

First Issue: Did the Trial Judge Err in
    Granting Relief from Forfeiture?

The Issue Stated

[7]

There is no dispute that Mr. Dams failed to
    comply with two reporting requirements prescribed by the statutory regime for
    accidents involving unidentified automobiles. Section 3 of the Schedule
    attached to the
Uninsured Automobile Coverage
regulation, R.R.O. 1990, Reg. 676 (the Schedule) made under the
Insurance
    Act
, imposes several obligations on a person insured under a contract of
    insurance who claims that an unidentified automobile has caused that person bodily
    harm or injury. Two of those obligations are that:

(i)

the person must report the accident to a police
    officer within 24 hours after it occurs or as soon as is practicable after that
    time: s. 3(2); and

(ii)

the person must give the insurer a written
    statement within 30 days after the accident occurs or as soon as is practicable
    after that date setting out the details of the accident: s. 3(3).

Both obligations are also set out in
    s. 5.3.5 of the Ontario Automobile Policy (O.A.P. 1).

[8]

Section 8(1) of the Schedule states that [n]o
    person is entitled to bring an action to recover an amount provided for under
    the contract, as required by subsection 265(1) of the Act, unless the
    requirements of this Schedule with respect to the claim have been complied
    with. Section 5.9 of O.A.P. 1 reproduces the substance of s. 8(1).

[9]

Mr. Dams did not notify TD Home about the
    accident until October 14, 2009, some 2.5 months after the accident. Based on
    the information it received, TD Home treated the matter as an accidents
    benefits case and did not conduct any investigation.

[10]

The trial judge found that Mr. Dams had no idea
    that he could bring an action for his pain and suffering until he had a chance
    meeting with a lawyer in February 2010. He thereupon tried to file a report
    with the police, but the police essentially told him it would be no use at that
    point of time. Mr. Dams then sent a statutory declaration to TD Home, some six
    months after the accident.

[11]

Although Mr. Dams failed to comply with the
    police report and accident statement information requirements within the times
    stipulated by the Schedule, he sought relief from forfeiture of unidentified
    automobile coverage under s. 129 of the
Insurance Act
and s. 98 of the
Courts of Justice Ac
t, R.S.O. 1990, c. C.43. Those sections provide:

Insurance Act

s. 129. Where there has been
    imperfect compliance with a statutory condition as to the proof of loss to be
    given by the insured or other matter or thing required to be done or omitted by
    the insured with respect to the loss and a consequent forfeiture or avoidance
    of the insurance in whole or in part and the court considers it inequitable
    that the insurance should be forfeited or avoided on that ground, the court may
    relieve against the forfeiture or avoidance on such terms as it considers just.

Courts of Justice Act

s. 98. A court may grant relief
    against penalties and forfeitures, on such terms as to compensation or
    otherwise as are considered just.

[12]

The trial judge granted Mr. Dams relief from
    forfeiture.

Positions of the Parties

[13]

TD Home submits that the trial judge erred in
    granting Mr. Dams relief from forfeiture. Coverage for damages caused by
    unidentified automobiles is subject to the terms, conditions, provisions,
    exclusions and limits as are prescribed by the regulations:
Insurance Act
,
    s. 265(1). TD Home argues that the two reporting requirements contained in s. 3
    of the Schedule are preconditions to being able to commence an action for
    unidentified coverage, as stated by s. 8(1) of the Schedule and s. 5.9 of
    O.A.P. 1. TD Home contends that relief from forfeiture for Mr. Dams is not
    available under s. 129 of the
Insurance Act
or s. 98 of the
Courts
    of Justice Act
because those provisions can only relieve from imperfect
    compliance with a policy term, not from non-compliance with conditions
    precedent to a claim, such as those contained in s. 3 of the Regulation.

[14]

Mr. Dams submits that relief under s. 129 of the
Insurance Act
or s. 98 of the
Courts of Justice Act
is
    available in the circumstances of this case because the case law has treated
    the failure to give timely notice of a claim as imperfect compliance with a
    term of a policy, not a condition precedent to a claim. Further, Mr. Dams
    provided a reasonable explanation for his failure to comply promptly with the
    reporting requirements, and the trial judge found that TD Home did not suffer
    any prejudice as a result of those delays.

Analysis

[15]

The starting point for the analysis is the
    decision of the Supreme Court of Canada in
Falk Bros. Industries Ltd. v.
    Elance Steel Fabricating Co.
, [1989] 2 S.C.R. 778. In that case, Elance
    Steel Fabricating Co. claimed against a surety company under a bond on account
    of a debt due from Falk Bros. Elance gave notice of its claim 28 days after the
    expiry of the notice period specified in the bond. The case required the
    Supreme Court to interpret a section in
The Saskatchewan Insurance Act
,
    R.S.S. 1978, c. S-26, identical in language to s. 129 of the
Ontario
    Insurance Act
.

[16]

The Supreme Court observed, at p. 782, that
    sections like s. 129 are remedial in nature and as such should be given an
    appropriately broad interpretation. The purpose of allowing relief from
    forfeiture in insurance cases is to prevent hardship to beneficiaries where
    there has been a failure to comply with a condition for receipt of insurance
    proceeds and where leniency in respect of strict compliance with the condition
    will not result in prejudice to the insurer: at p. 783. However, the courts
    power under provisions like s. 129 only extends to cases of such statutory
    conditions as to proof of loss or other matters or things that are required to
    be done or omitted with respect to the loss: at p. 786.

[17]

The court then addressed the question of whether
    the failure to give notice of a claim under an insurance policy amounted to
    imperfect compliance with a statutory condition as to the proof of loss, in
    which case relief under the statutory provision would be available, or whether
    it was non-compliance or breach of a condition precedent, in which case there
    could be no relief. It concluded, at pp. 785-786, that the failure to give
    notice of a claim in a timely fashion constitutes imperfect compliance with a
    statutory condition as to the proof of loss and falls within the terms of the
    relief provision. By contrast, the failure to institute an action within the
    prescribed time period would be a more serious breach, akin to non-compliance. Because
    Elances failure to give notice of its claim within the prescribed time
    constituted imperfect compliance rather than non-compliance, Elance was
    eligible to claim relief from forfeiture.

[18]

In the years following
Falk Bros.
, this
    court has re-affirmed on several occasions that the discretion possessed by a
    court under s. 129 of the
Insurance Act
is limited only to those
    policy conditions  statutory or contractual  that relate to proof of loss:
Williams
    v. York Fire & Casualty Insurance Co.
, 2007 ONCA 479, 86 O.R. (3d)
    241, at para. 33;
Kozel v. The Personal Insurance Company
, 2014 ONCA
    130, 119 O.R. (3d) 55, at para. 35. The courts power under s. 129 concerns
    things or matters required to be done in relation to the loss  i.e. to
    instances of imperfect compliance with the terms of a policy after a loss has
    occurred:
Williams
, at para. 33;
Kozel
, at para. 58.

[19]

TD Home argues that the reporting requirements
    contained in s. 3 of the Regulation are akin to conditions precedent in the
    nature of limitation periods, because s. 8(1) of the Regulation provides that
    no person can bring an action to recover an amount under the contract of
    insurance unless the requirements of this Schedule with respect to the claim
    have been complied with.

[20]

I am not persuaded by this argument, for two
    reasons.  First, the decision of the Supreme Court in
Falk Bros.
stands squarely against it. The reporting requirements contained in s. 3 of the
    Schedule are functionally similar to the notice of claim requirement at issue
    in
Falk Bros.
Both operate with the view of providing the insurer with
    timely information about the loss so that it can investigate the matter, if it
    so choses. The nature of Mr. Damss failure to comply in the present case
    clearly falls within the class of cases covered by the statutory language in s.
    129  i.e. a statutory condition as to the proof of loss to be given to the
    insured or other matter or thing required to be done omitted by the insured
    with respect to the loss.
[1]

[21]

Second, to assess the effect of s. 8(1) of the
    Schedule on the availability of relief under s. 129 of the
Insurance Act,
the Schedule must be read in its entirety. Section 8(1) applies to all the
    requirements of the Schedule concerning uninsured automobile coverage. In
    addition to the reporting requirements imposed by s. 3, the Schedule also
    requires a person entitled to make a claim to give notice of the claim and to
    provide a proof of claim: s. 6. To accept the interpretation of s. 8(1)
    advanced by TD Home would result in that section of the Schedule precluding
    relief from forfeiture for imperfect compliance with the obligation to provide
    a proof of loss, a matter for which s. 129 specifically affords relief from
    forfeiture. Such an interpretation of the Schedule would run counter to the
    very purpose of the statutory provision. In my view, such an untenable
    interpretation signals that s. 8(1) of the Schedule does not transform all the
    requirements imposed on a claimant by the Schedule into conditions precedent to
    a claim for which relief from forfeiture is not available. Instead, s. 8(1)
    must be read in the light of s. 129 of the
Insurance Act
and the principles
    set down by the Supreme Court in the
Falk Bros.
case. When so read,
    relief from forfeiture under s. 129 of the
Insurance Act
is available
    where a claimant has failed to meet the time periods for the reporting
    requirements set out in s. 3 of the Schedule.

[22]

Consequently, the trial judge did not err in
    holding that Mr. Dams was entitled to claim relief from forfeiture under s. 129
    of the
Insurance Act
in respect of his failure to make a report to the
    police and to provide an accident statement to TD Home within the times
    stipulated by s. 3 of the Schedule. Since TD Home limited its argument to the
    jurisdiction of the trial judge to grant relief from forfeiture and did not
    contend that the trial judge had failed to look at all relevant factors when
    considering whether to grant relief from forfeiture, the conclusion that the
    trial judge could grant relief from forfeiture under s. 129 disposes of this
    part of the appeal.

Second Issue: Did the Trial Judge Err in his
    Apportionment of Liability for the Accident?

The Positions of the Parties

[23]

TD Home submits that the trial judge erred in
    apportioning any liability against the unidentified driver because there was no
    evidence of any negligence on the part of the unidentified driver. TD Home
    argued that the unidentified driver was proceeding lawfully northbound on
    Bronte Road; it had the right of way as it approached the uncontrolled
    intersection of Old Bronte Road and Bronte Road; there was no evidence that it
    failed to keep a proper lookout as it approached the intersection; it was
    entitled to move into the curb lane; and there was no evidence that it was
    making a passing manoeuvre in the curb lane as it approached the intersection.

[24]

Mr. Dams submits that the trial judge erred in
    apportioning any liability against him because the unidentified driver was the
    sole cause of the accident: the dark vehicle was speeding when it was passing
    the cube van in the curb lane; and the unidentified driver failed to yield the
    right of way to Mr. Dams by quickly moving into the curb lane just as Mr. Dams
    was planning lawfully to enter Bronte Road.

Analysis

[25]

Several rules of the road were in play when Mr.
    Dams stopped his motorcycle before entering onto Bronte Road from Old Bronte
    Road and as the unidentified driver approached that intersection.

[26]

Mr. Dams was required to stop his motorcycle at
    the marked stop line on Old Bronte Road and yield the right of way to traffic
    approaching the intersection on another highway so closely that to proceed
    would constitute an immediate hazard:
Highway Traffic Act
, R.S.O.
    1990, c. H.8 (
HTA
), s. 136(1). Having so
    yielded the right of way, Mr. Dams was entitled to proceed onto Bronte Road:
HTA
,
    s. 136(1)(b).

[27]

Although the unidentified driver who was
    proceeding northbound on Bronte Road had the right of way over Mr. Dams as he
    approached the intersection, the unidentified driver was subject to several
    obligations:

(i)

The driver was not entitled to drive his vehicle
    from the passing lane to the curb lane unless

the driver first ascertains
    that it can be done safely:
HTA
, s. 154(1)(a);

(ii)

The driver was entitled to overtake and pass to the
    right of the cube vehicle which was in the passing lane
only where the movement can be made in safety:
HTA
, s.
    150(1);

(iii)

The driver was required to obey the posted speed
    limit of 60 km/hour:
HTA
, s. 128; and

(iv)

When approaching the intersection, the driver was
    required to maintain a proper look-out and proceed with such care and prudence
    through the intersection as appropriate in the particular circumstances:
Fiddler
    v. Vasilakos
, 2014 ONSC 5774, at para. 28;
Hynna v. Peck
, 2009
    BCSC 1057, at para. 81.

[28]

TD Home submits there was no evidence before the
    trial judge which would entitle him to find that the unidentified driver was
    negligent when approaching the intersection. Mr. Dams contends that there was
    no evidence to support a finding that he was negligent when he slowly moved
    forward from the stop sign towards Bronte Road.

[29]

I do not accept either submission.

[30]

In respect of the unidentified driver, the trial
    judge made several findings of fact:

(i)

As the unidentified driver approached the
    intersection, the driver would have had a plain view of the motorcycle which
    was moving forward;

(ii)

Although the unidentified driver had the right
    of way to change lanes into the curb lane, the driver should have proceeded
    with the utmost caution for two reasons: (a) the driver would have seen the two
    motorcycles, one of which was creeping forward; and (b) in the area just north
    of the intersection, several residential driveways exited onto Bronte Road; and

(iii)

The utmost caution the driver should have
    exercised included reducing the speed of the vehicle or moving back into the
    passing lane until it passed the motorcycles.

On the evidence before the trial judge,
    including the opinion evidence of the expert accident reconstruction expert,
    those findings were open to the trial judge to make.

[31]

Although Mr. Dams testified that when he first
    looked to his left to check the approaching traffic he had not seen the dark
    vehicle following the cube van in the passing lane, the trial judge did not
    accept his evidence. The trial judge accepted the evidence of Mr. Black that
    when he was stopped at the stop sign, he could see the dark vehicle come from
    behind the cube van in the passing line. The trial judge also accepted the
    evidence of the accident reconstruction expert that even under the worst
    visibility circumstances, part of the dark vehicle would have been visible to
    Mr. Dams. From that evidence, the trial judge found that Mr. Dams should have
    seen at least part of the dark vehicle as it followed the cube van in the
    passing lane and before it moved into the curb lane. It was open to the trial
    judge to make those findings on the evidence before him.

[32]

Those findings by the trial judge of negligence
    on the part of both the unidentified driver and Mr. Dams entitled him to
    apportion liability for the accident. The trial judge described the case as a
    difficult one to assess. Nevertheless, in light of the careful findings of fact
    which he made, I see nothing unreasonable in the trial judges allocation of
    60% liability to Mr. Dams given that s. 136(1)(b) of the
Highway Traffic
    Act
required him to yield the right of way to the dark vehicle which, in
    the circumstances, constituted an immediate hazard approaching the
    intersection. I see no basis for appellate interference in the trial judges
    allocation of liability between the parties.

Disposition

[33]

For the reasons set out above, I would dismiss
    the appeal and cross-appeal.

[34]

The parties agreed that the successful party
    would be entitled to costs of the appeal in the amount of $10,000. Since the
    respondents enjoyed the greater success on the appeal, I would award them their
    costs of the appeal in the amount of $10,000, inclusive of HST and
    disbursements.

Released: January 6, 2016 (RAB)                           David
    Brown J.A.

I
    agree R.A. Blair J.A

I
    agree C.W. Hourigan J.A.

[1]
The type of policy in issue can affect how a court treats the breach of a
    reporting requirement.  For example, in
Stuart v. Hutchins
(1998), 40
    O.R. (3d) 321 (C.A.), this court held that relief from forfeiture under s. 129
    of the
Insurance Act
was not available for a failure to report a claim
    where the policy of insurance was a claims made and reported policy, not an
    occurrence policy.  See also,
Kozel
, at para. 44.


COURT OF APPEAL FOR ONTARIO

CITATION: Eustace v. Eustace, 2016 ONCA 9

DATE: 20160106

DOCKET: C60567

Juriansz, Hourigan and Brown JJ.A.

BETWEEN

Emerencia Yamuna Eustace

Applicant (Respondent)

and

Ernest Jeyaprakash Eustace

Respondent (Appellant)

Ajay Duggal, for the appellant

No one appearing for the respondent

Heard and released orally: January 4, 2016

On appeal from the order of Justice Lorna-Lee Snowie of
    the Superior Court of Justice, dated May 11, 2015.

ENDORSEMENT

[1]

This appeal is unopposed. The appellant is the respondent to a family
    law application seeking custody of the one child of the marriage, spousal
    support, equalization of net family property and child support.

[2]

At a trial management conference held December 19, 2014, Price J.
    ordered the appellant to make disclosure of certain matters and with the
    consent of the parties, scheduled a trial for the sittings beginning May 11,
    2015.

[3]

On May 11, 2015, a further trial management conference was held before
    the judge below. The appellant appeared with a new lawyer and sought an
    adjournment of the trial. The applicants counsel complained that disclosure on
    financial issues had still not been made and advised that on April 14, 2015, he
    had brought a Form 14B motion seeking an order striking the pleadings of the
    appellant on financial issues because of his failure to make disclosure as
    ordered. He told the court the motion had been refused, but could not advise
    the case conference judge the reason why it had been refused. In fact, Price J.
    on April 14, 2015, had rejected the motion because his earlier order had given the
    applicant leave to bring a motion to strike pleadings and had not permitted an
ex
    parte
motion. He said the motion had to be served. The applicant did not
    bring the motion back on notice.

[4]

The case conference judge granted an adjournment of one week. However,
    on her own initiative, she included in her disposition an order striking the
    appellants pleadings on financial issues. That order must be set aside. There
    was no motion to strike pleadings before the case conference judge. As well
    there was procedural unfairness. The case conference judge did not indicate to
    the parties she was considering striking the pleadings and the parties had no
    opportunity to make submissions about the matter.

[5]

The applicant has leave to renew her motion to strike pleadings if any
    disclosure ordered by Price J. of December 19, 2014 remains outstanding.

[6]

As the appeal was unopposed, there will be no order as to costs.

R.G.
    Juriansz J.A.

C.W.
    Hourigan J.A.

David
    Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Farkas v. Bedic, 2016 ONCA 82

DATE: 20160128

DOCKET: C58672

Laskin, Pardu and Brown JJ.A.

BETWEEN

Mary Farkas

Plaintiff

(Respondent)

and

Nick Bedic also known as Nikola Bedic

Defendant

(Appellant)

Paul D. Amey, for the appellant

Julie K. Hannaford and D. Clarke, for the respondent

Heard: June 24, 2015

On appeal from the judgment of Justice James W. Sloan of
    the Superior Court of Justice, dated March 13, 2014, with reasons reported at
    2014 ONSC 1638.

Laskin J.A.:

A.

Overview

[1]

The appellant, Nick Bedic, and the respondent, Mary Farkas, met and
    began dating in 1994.  At the time, he was 49 and separated from his wife; she
    was 51 and a widow.  They began living together full-time in mid-1997 and
    co-habited for thirteen and one-half years before separating in early 2011.
    During the course of their relationship, they acquired and maintained several
    properties.  Each party contributed financially and by physical labour.

[2]

When the relationship ended, Farkas sought a half interest in the
    properties or in the proceeds from their sale.  After a detailed review of the
    evidence, the trial judge found in her favour.  In doing so, he held that
    though many of the key facts were not disputed, where the evidence of Bedic and
    Farkas differed, he preferred her evidence.

[3]

On appeal, Bedic challenges the trial judges findings on two of the
    properties: the Queensway Motel and the Fairview Motel.

[4]

Bedic purchased the Queensway Motel five years before he met Farkas.
    Later, however, Farkas gave him two loans totalling $125,000 to enable him to
    pay off two mortgages on Queensway.  In exchange for these loans, Bedic gave
    Farkas a half interest in the motel. They signed an agreement in July 1997 to
    reflect their bargain.

[5]

Bedic submits that the trial judge erred by failing to find that Bedics
    transfer of a half interest in Queensway to Farkas created a resulting trust under
    which she held her half interest beneficially for him.  He contends that under
    their agreement, she was only entitled to the repayment of her loans.
    Alternatively, Bedic submits that the trial judge erred in finding that Farkas
    was entitled to an equal interest in the motel because his capital and labour contributions
    were far greater than hers.

[6]

Bedic purchased the Fairview Motel and took title in his name alone.
    The trial judge, however, found that Farkas was entitled to half the value of
    Fairview, or, alternatively, a half interest in Fairview because of her contributions
    to a joint family venture. In the trial judges opinion, to hold otherwise
    would unjustly enrich Bedic at Farkas expense. Bedic submits that the trial
    judge erred in finding that Farkas had any interest in the Fairview Motel.

[7]

A final issue on which Bedic appeals is the trial judges finding that
    Bedic withdrew money from the parties joint account and failed to account for
    his withdrawals.  The trial judge awarded Farkas just under $18,000 for these
    unaccounted for withdrawals.  Bedic submits that the trial judge erred in
    making this finding.

[8]

For the reasons that follow, I would not give effect to any of Bedics
    submissions.  I would thus dismiss his appeal.

B.

The Issues

(1)

Did the trial judge err in finding that Farkas had a 50 percent
    beneficial interest in the Queensway Motel?

[9]

Bedic submits that the trial judge erred in finding that Farkas had a 50
    percent beneficial interest in the Queensway Motel.  His submission has two
    branches.  First, he argues that the 50 percent interest he deeded to her in
    1997 should revert to him by resulting trust.  Under the agreement the parties
    signed, Farkas is entitled only to be repaid the $125,000 she advanced to him,
    and, once repaid, she is required to reconvey her half interest in the motel.
    Second, Bedic argues that if Farkas was entitled to a beneficial interest in Queensway,
    it should be far less than 50 percent as, contrary to the trial judges
    finding, his capital and labour contributions were significantly greater than
    hers.  I do not agree with either branch of Bedics submission.

(i)

Should Farkas one-half interest revert to Bedic by a resulting trust?

[10]

Bedic
    purchased the Queensway Motel in 1989.  It was a 16-room motel in Simcoe,
    Ontario.  The purchase price is in dispute.  At trial, Bedic testified that he
    paid $450,000 plus $45,000 for fixtures.  Farkas testified that Bedic told her
    the purchase price was $450,000.  In this court, Bedic contends that the
    purchase price was actually $495,000, and he relies on his lawyers reporting
    letter.  I will deal with this discrepancy when I discuss the second branch of
    Bedics submission.

[11]

When
    Bedic and Farkas first began dating, she owned her own home in Hamilton but
    stayed with him at the motel on weekends.  By mid-1997, they began co-habiting
    at the motel, and, a year later, she sold her Hamilton home.

[12]

The
    agreement on which Bedic relies was signed by the parties in July 1997.  It
    reflected Farkas two loans to Bedic.  In 1995, Bedic asked Farkas to loan him
    $30,000 to pay off his second mortgage on the motel.  She did so by increasing
    the mortgage on her own home in Hamilton.

[13]

Then,
    in 1997, Bedic told Farkas that he needed more money or he would lose
    everything.  Specifically, he asked Farkas for $100,000 to discharge the first
    mortgage on Queensway held by Income Trust, as Income Trust would not renew its
    mortgage.  Bedic said that, in exchange, he would transfer to Farkas a one-half
    interest in the motel.  Farkas agreed to give him the money.  She took out a
    $125,000 mortgage on her own home.  She used part of the proceeds to pay off
    her $30,000 mortgage and advanced to Bedic the sum of $94,951.08.  The total of
    her loans to Bedic thus amounted to about $125,000.  In July 1997, the parties
    entered into an agreement, which in its relevant terms provides as follows:

Should the relationship between Farkas and Bedic end for
    whatever reason, Bedic agrees to repay to Farkas the sum of $125,000.00 on
    demand and Farkas shall in return transfer her one half interest in the
    property to Bedic.

THE PARTIES FURTHER AGREE that if it becomes necessary to sell
    the property for whatever reason, be it by agreement of the parties, Power of
    Sale or Partition Application by either Bedic or Farkas, then Farkas shall
    receive her investment of $125,000.00 before any monies are disbursed to Bedic.

[14]

Bedic
    formally transferred a one-half interest in the motel to Farkas and a deed of
    transfer was registered on title.  In 2006, the parties sold the Queensway
    Motel for $728,000.

[15]

Bedic
    submits the agreement contemplated that he would repay Farkas loans and that
    she would reconvey her half interest to him.  In other words, she held her half
    interest for the benefit of Bedic and thus it would result to him.  I do not
    agree with this submission for three reasons.

[16]

First,
    the parties did not rely on the agreement.  At trial, Bedics lawyer admitted
    that he was not relying on  on the contents of it so much as the intention at
    the time.  At the end of the day, I dont, our case really doesnt rise and
    fall on the agreement.  And the trial judge expressly found, at para. 139,
    that Bedic himself treated the agreement as if it did not exist:

When it was suggested to [Bedic] that both parties treated the
    agreement if it didnt exist he denied that this was the case, however at
    questions 266 & 267 of his examination for discovery he indicates that they
    did treat the agreement at Ex 3 Tab B-5 as if did not exist.  When this was
    pointed out to the Defendant, he said that he probably didnt understand the
    Plaintiffs lawyer when he asked the question.  I find this answer
    disingenuous.

[17]

Indeed,
    when the motel was sold in 2006, neither party relied on the agreement.  Bedic
    did not offer to pay Farkas $125,000, and Farkas did not ask Bedic for the
    money.

[18]

Second, the facts do not support the existence of a resulting
    trust. A resulting trust is an arrangement where one person holds property for
    the benefit of another and typically is created or implied when title to the
    property is transferred to a party who did not provide any value for it.  Unless
    the transfer is held to be a gift, the party is required to return the property
    to the true owner.
Legally, the

beneficial
interest
    in

the property
    results

to the

person who

transferred legal title: see
Pecore v. Pecore
, 2007 SCC 17, [2007] 1
    S.C.R. 795, at para. 24.

[19]

Here,
    however, Farkas provided value in exchange for the equity interest in Queensway
    transferred to her. She loaned Bedic $125,000 to enable him to pay off the two
    mortgages on the motel.

[20]

Third,
    Bedics conduct does not demonstrate an intention to create a resulting trust.
    Whether a resulting trust is created or implied depends on the intent of the
    transferor at the time of transfer.  Although the transferor gives another
    person legal title to the property, the transferor does not intend the other
    person to have a beneficial interest in the property.  Thus, the other person
    holds the beneficial interest in trust for the transferor:
Pecore v. Pecore
at para. 5.

[21]

Here,
    Bedic is the transferor and it is his intent that is relevant.  His conduct,
    however, shows no intent to create a resulting trust.  Quite the contrary.  He
    treated the equity from the sale of the motel as belonging beneficially to both
    him and Farkas.  The vendor take back mortgage was registered in both their
    names.  The monthly mortgage payments were made out to both of them.  The
    cheque for the proceeds due on closing was also made out in both their names.
    And the proceeds were deposited into a joint bank account.  The trial judge
    thus held, at para. 172:

Following the sale of the Queensway Motel, the parties treated
    the equity from the sale as belonging to each of them equally. The mortgage
    back was registered in both their names, the monthly mortgage payments were
    made out to both their names, the cheque for the net equity due to them on
    closing was made out in both their names and that cheque was deposited by the
    Defendant, into a joint bank account.

[22]

I
    would not give effect to this branch of Bedics submission.

(ii)

Did the trial judge err in finding that the parties contributed more or
    less equal amounts of capital to the Queensway Motel?

[23]

The
    trial judge found, at para. 171:

The evidence is clear that both parties put significant sweat
    equity into their first property at Queensway Motel and contributed more or
    less equal amounts of capital based on the evidence presented at this trial.

[24]

And
    he concluded, at para. 173:

Therefore, the court cannot come to any other conclusion than
    the equity from the Queensway Motel belonged to the parties equally.

[25]

In
    making this finding, the trial judge held that Bedic bought the Queensway Motel
    for $450,000 in 1989 and that the value of the motel had not changed between
    1989 and 1997, when Farkas became part-owner, as neither party presented
    evidence to the contrary. Bedic submits that both holdings are in error.

[26]

Other
    than filing his lawyers reporting letter on the purchase of the motel, Bedic
    led no evidence of the value of the motel when he had purchased it. The
    reporting letter states that the purchase price was $495,000, but it does not
    break down that amount between property and fixtures. And the trial judge had
    evidence from Farkas and even Bedic that the purchase price for the motel alone
    was $450,000.

[27]

Also,
    and importantly, Bedic led no evidence of the value of the motel in 1997. When
    asked what he thought the motel was worth in 1997, he admitted candidly that he
    did not know. Moreover, I do not think one can infer that the motel had
    increased in value between 1989 and 1997 simply because nearly a decade later
    it sold for $728,000. Without any evidence of value, the trial judge can hardly
    be faulted for assuming that the motel had not changed in value between 1989
    and 1997.

[28]

However,
    even assuming that the value of the motel was $495,000 in 1997, that value
    would not undermine the trial judges finding that the parties capital
    contributions were roughly equal. Farkas loaned Bedic $125,000 to permit him to
    discharge the two mortgages against the property. She also gave Bedic $7,000 in
    1997 to help him renovate the motel and a further $17,000 for renovations out
    of the sale of her Hamilton house in 1998. Thus her capital contributions were
    roughly $150,000. Bedics capital contributions in 1997, even assuming the motel
    was worth $495,000, were not significantly different from Farkas. In 1997, Income
    Trust held an approximately $193,000 mortgage on the motel. Bedic was
    responsible for debts of $53,500 associated with the motel. And at the time,
    his former wife still had an interest in the property. The math may not be
    exact, but however one looks at the debits and credits, the math reasonably
    supports the trial judges finding that Bedic and Farkas contributed more or
    less equal amounts of capital.

[29]

I
    would not give effect to Bedics submission on the Queensway Motel.

(2)

Did the trial judge err in finding that Bedic holds title to the
    Fairview Motel in trust for himself and Farkas equally?

[30]

Bedic
    bought the Fairview Motel in 2004 for $200,000. The motel had four rooms, when
    he bought it, and eight rooms after he renovated it.  Each room was equipped
    with a kitchenette. Bedic took title to the motel in his name alone and said
    that he bought it over Farkas objection.

[31]

The
    trial judge, however, found that Bedic holds title to Fairview in trust for
    himself and Farkas equally. He found a joint family venture in connection with
    the motel and he found that Bedic and Farkas had contributed jointly to its
    acquisition, maintenance, and improvement. To remedy what would otherwise be
    Bedics unjust enrichment, the trial judge effectively found that Farkas had a
    beneficial one-half interest in Fairview by a constructive trust. Bedic, as
    constructive trustee, was obligated to convey that one-half interest to her or
    to pay her one half the value of Fairview. The parties agreed that her one-half
    interest was valued at $112,500.

[32]

After
    referring to
Kerr v. Baranow
, 2011 SCC 10, [2011] 1 S.C.R. 269, the
    Supreme Courts seminal judgment on joint family ventures and unjust enrichment,
    the trial judge summarized his finding, at para. 177:

I therefore find that the Defendant holds the title of the
    Fairview Motel in trust for himself and the Plaintiff on an equal basis. To
    hold otherwise would allow the Defendant to be enriched where there is no
    juristic reason for such enrichment and the Plaintiff would be accordingly
    deprived.

[33]

Bedic
    submits that the trial judge erred in this finding and that he alone owns the
    Fairview Motel. I do not agree. The trial judges finding of a joint family
    venture and his award of a half interest in the motel as a remedy for Farkas
    claim of unjust enrichment are reasonably supported by the evidence. In
Kerr
    v. Baranow
, Cromwell J. wrote, at para. 85:

I conclude, therefore, that the common law of unjust enrichment
    should recognize and respond to the reality that there are unmarried domestic
    arrangements that are partnerships; the remedy in such cases should address the
    disproportionate retention of assets acquired through joint efforts with
    another person.

[34]

As
    I will discuss, on the record before him, the trial judge had ample evidence to
    find that Bedic and Farkas had a domestic partnership, a partnership in which
    they acquired, maintained, and improved several properties over the course of
    their thirteen and one-half years together. Although the trial judge expressly
    applied the concepts of joint family venture and unjust enrichment to the
    Fairview Motel alone, his reasons and his order make it evident that the
    parties joint family venture extended to the Queensway Motel and to the other
    two properties that the parties acquired jointly, Hillcrest and Clear Creek. I
    have already dealt with the Queensway Motel and Bedic has not challenged
    Farkas equal ownership of Hillcrest or Clear Creek. I turn then to the
    evidence and the trial judges findings on the Fairview Motel.

[35]

To
    obtain an award for unjust enrichment arising from a joint family venture, a
    claimant must show two things: first, a joint family venture; and second, a
    link between the claimants contribution to the venture and the accumulation of
    assets or wealth: see
Kerr v. Baranow
, at para. 87.

(i)

Joint family venture

[36]

In
    deciding whether an unmarried couple has organized their life in a domestic
    partnership or a joint family venture, Cromwell J. suggested a trial judge consider
    four factors, which, he acknowledged, overlap to some extent: mutual effort,
    economic integration, actual intent, and priority of the family:
Kerr v.
    Baranow
, at para. 89. Although the trial judge here did not expressly
    review the evidence under these factors, the evidence and his findings do show
    a joint family venture between Bedic and Farkas.

[37]

Mutual
    effort
. This factor asks whether the parties worked collaboratively
    toward common goals. Did they pool their efforts? Here, the answer is unquestionably
    yes. After Bedic bought the Fairview Motel, it needed to be substantially
    renovated. He and his brother did the renovations over the course of 18 months.
    During that time, Farkas alone ran and took care of the Queensway Motel. When
    the renovations were completed, Bedic and Farkas moved into the Fairview Motel
    and worked more or less equally to run it. Both cleaned the rooms, made the
    beds, did the laundry, and washed the floors and bathrooms. Farkas alone cooked
    the meals. She estimated that she spent five hours a day working at the motel,
    for which she was not paid.

[38]

Economic
    integration
.
This factor asks whether the parties economic
    interests were intertwined. Was there mutuality and interdependence in their
    economic relationship  for example, through the use of joint accounts  that
    prevailed over their individual interests? Again, here the answer is yes. The
    bulk of the down payment for the Fairview Motel came from the sale of the Clear
    Creek property, which Bedic and Farkas held as joint tenants. Mortgage payments
    on the vendor take back mortgage were made from the Queensway Motel account.
    Bedic discharged that mortgage in 2008, using funds from the parties joint
    account at the Royal Bank of Canada. The trial judge found, at para. 174:

There is no doubt that the Fairview Motel was purchased,
    maintained, renovated and had its mortgage discharged using joint monies which
    originated from the Queensway Motel, the vendor take back mortgage on the
    Queensway Motel and the joint cheque the parties received on closing.

That finding is fully supported by the evidence.

[39]

Actual
    intent
. The parties intent may be expressed or inferred. Bedics own
    trial counsel expressly acknowledged that Farkas was entitled to half the value
    of the Fairview Motel. Although Bedic disagrees with what his counsel said,
    that acknowledgement was before the trial judge. Moreover, the parties intent
    to maintain a domestic partnership can be inferred from their conduct. For
    example, they had business cards printed for the motel that said Your Hosts:
    Nick & Mary.

[40]

Priority
    of the family
. Bedic and Farkas did not have children together. But the
    evidence showed that throughout their relationship they gave priority to working
    together and sharing responsibilities. A telling piece of evidence showing the
    priority Farkas gave to her partnership with Bedic over her own interests was
    her decision to retire early, in 1999, from her job at the hospital, and to
    move from Hamilton to Simcoe to work alongside him in the motel business. By
    retiring early, she gave up the larger pension she would have received if she
    had continued working.

[41]

Against
    this overwhelming evidence of a joint family venture, there is scant, if any,
    evidence to suggest that while living together the parties pursued their own
    individual interests. The trial judge thus did not err in finding that Bedic
    and Farkas had a joint family venture, which included the operation of the
    Fairview Motel.

(ii)

Link between the joint family venture and the accumulation of wealth

[42]

In
Kerr v. Baranow
, Cromwell J. said that to be entitled to a remedy for
    unjust enrichment arising from a joint family venture, the claimant must show
    a link between his or her contributions to it and the accumulation of assets
    and/or wealth (at para. 100). In other words, the familys accumulation of
    wealth must have resulted from the parties mutual efforts. Cromwell J. wrote,
    at para. 102:

Once the claimant has established his or her contribution to a
    joint family venture, and a link between that contribution and the accumulation
    of wealth, the respective contributions of the parties are taken into account
    in determining the claimants proportionate share.

[43]

The
    evidence supports a link between Farkas contribution to her partnership with
    Bedic and their accumulation of wealth. And the evidence supports the trial
    judges finding that each partys proportionate share in the Fairview Motel
    should be equal. I repeat the trial judges finding, at para. 174:

There is no doubt that the Fairview Motel was purchased, maintained,
    renovated and had its mortgage discharged using joint monies which originated
    from the Queensway Motel, the vendor take back mortgage on the Queensway Motel
    and the joint cheque the parties received on closing.

[44]

And
    the trial judge added, at para. 175:

In addition, the evidence is uncontroverted that while the
    Defendant was spending his time renovating the Fairview Motel, the Plaintiff
    was essentially running the Queensway Motel on her own. The evidence is also
    clear that after the parties moved into the Fairview Motel both parties worked
    more or less equally to maintain and run the motel. No wages were paid, to
    either party.

[45]

I
    see no error in the remedy ordered by the trial judge.  I would not give effect
    to this ground of appeal.

(3)

Did the trial judge err in finding that Bedic had failed to account for
    money he withdrew from the parties joint account?

[46]

The
    trial judge found that Bedic had improperly taken money from the parties joint
    account with the Royal Bank of Canada. He said that Farkas was entitled to one-half
    the amount Bedic had taken and had not accounted for less two withdrawals she
    had benefited from. Following the trial judges calculations, Farkas was
    entitled to $17,929.48. Bedic submits that the trial judge erred in his
    finding. He maintains that the parties banking records show the money he took
    was properly accounted for. I do not accept his submission.

[47]

The
    money in question represented part of the net proceeds of sale from the
    Queensway Motel. Those proceeds had been deposited in the parties joint
    account with the Royal Bank of Canada and invested in guaranteed investment
    certificates. The trial judge recognized that Farkas had withdrawn $29,660 from
    that account in March 2010 and that she had taken another $14,000 to pay her
    capital gains tax.

[48]

The
    trial judge also found that between 2007 and 2009, Bedic had made several
    withdrawals from the joint account, which Farkas was not aware of and which
    Bedic could not satisfactorily account for at trial. The trial judge quantified
    these unaccounted for withdrawals in the amount of $93,518.96. He then deducted
    from that amount the money Farkas withdrew in March 2010, leaving withdrawals
    by Bedic exceeding those by Farkas of $63,858.96, entitling her to one half
    that amount or $31,929.48.  He gave further credit to Bedic for $14,000 he had
    paid on account of Farkass capital gains tax, for a balance owing to her of
    $17,929.48. The trial judge ordered that Bedic pay Farkas this amount.

[49]

I
    do not think it falls on this court to redo the trial judges forensic
    accounting, which led him to make the order he did. He had evidence to support
    his finding and his order. Although Bedic might be able to point to other
    evidence to support his submission, the trial judges finding was not
    unreasonable. Thus I would not give effect to this ground of appeal.

C.

Conclusion

[50]

I
    am not persuaded that the trial judge erred in his findings that Farkas was
    entitled to one-half interest in both the Queensway Motel and the Fairview
    Motel or in his finding that Bedic had failed to account for money he had
    withdrawn from the parties joint account with the Royal Bank of Canada.
    Accordingly, I would dismiss Bedics appeal. Farkas is entitled to her costs of
    the appeal, which I would fix in the amount of $25,000, inclusive of
    disbursements and applicable taxes.

Released: January 28, 2016 (J.L.)

John Laskin J.A.

I agree. G. Pardu J.A.

I agree. David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Fleming v. Massey, 2016 ONCA 70

DATE: 20160126

DOCKET: C59738

Feldman, Juriansz and Brown JJ.A.

BETWEEN

Derek Fleming

Plaintiff (Appellant)

and

Andrew Massey, Lombardy Raceway Park, Lombardy
    Karting, Lombardy Agricultural Society and the National Capital Kart Club
    (NCKC)

Defendants (Respondents)

Paul J. Pape and Joanna Nairn, for the appellant

M. Susan Guzzo and Katarina Germani, for the respondents

Heard: September 30, 2015

On appeal from the judgment of Justice Richard G. Byers
    of the Superior Court of Justice, dated November 17, 2014.

Juriansz J.A.:

[1]

This is an appeal from a summary judgment dismissing the appellants
    action against the respondents in which he sought damages for injuries suffered
    at a go-kart race at which he was the race director. The respondents are Andrew
    Massey, who drove the go-kart that injured the appellant; Lombardy Raceway
    Park, the track where the accident occurred; Lombardy Karting, which
    co-organized the race event; the National Capital Kart Club, which co-organized
    the race event and which arranged for Mr. Fleming to act as race director; and
    Lombardy Agricultural Society, which owns the property on which the track
    operated.

[2]

On October 3, 2010, the respondents Lombardy Karting and the National
    Capital Kart Club held a go-kart event. During such events, a race director is
    required. Since the regular race director was not available, the appellant
    Derek Fleming filled the role. Mr. Massey was driving a go-kart that day and
    crashed into hay bales lining a corner of the track. Mr. Fleming was injured in
    the accident. The respondents argued that the appellant had signed a waiver
    releasing the respondents from liability for all damages associated with
    participation in the event due to any cause, including negligence.

[3]

In brief reasons, the motion judge found that the appellant was not an
    employee but rather a volunteer who received a stipend, that he signed the
    waiver, that he knew generally what signing the waiver would mean and that the
    wording of the waiver was broad enough to cover all eventualities.

[4]

The appellant submitted that the motion judge erred in finding the
    appellant understood the effect of the waiver when he signed it. While the
    appellant stated on discovery that he understood the effect of a waiver,
    counsel urged his evidence be interpreted to say he learned what a waiver was
    during the litigation process. I am satisfied the record considered as a whole
    amply supports the conclusion the appellant signed the waiver knowing it was a
    legal document affecting his rights and that in all the circumstances the
    respondents could reasonably assume he understood and consented to it.

A.

The Public Policy Argument

[5]

The appellants main submission is that the waiver was void because it
    violated public policy, as the appellant was an employee. Before us, the
    appellant recast the argument to rely on the
Workplace Safety and Insurance
    Act
, 1997, S.O. 1997, c. 16, Sched. A (WSIA), a statute that he did not
    rely on before the motion judge.

[6]

I agree with the appellants argument that the motion judge erred in
    finding the appellant was not an employee. On discovery, the representative of
    the National Capital Kart Club admitted the appellant was a paid employee on
    the day of the accident. The respondents do not resile from that admission. I
    proceed to consider whether the waiver signed by the appellant is voided by the
    public policy of the WSIA because he signed it as an employee.

[7]

The parties agree that the appellant is not an insured worker under the
    Act. That is because go-kart tracks are classified as non-covered by the
    Workplace Safety and Insurance Board and workers at such facilities are not
    insured unless the employer has applied for WSIA coverage. The respondent track
    has not applied for coverage. Consequently, the respondent track and the
    appellant fall under Part X of the Act. Section 113(1) provides:

[Part X] applies with respect to industries that are
    not included in Schedule 1 or Schedule 2 and with respect to workers employed
    in those industries.

[8]

Workers under Part X, unlike insured workers, are allowed to sue their
    employers for workplace accidents. Section 114(1) provides:

A worker may bring an action for damages against his
    or her employer for an injury that occurs in any of the following
    circumstances:

1. The worker is injured by reason of a defect in the
    condition or arrangement of the ways, works, machinery, plant, buildings or
    premises used in the employers business or connected with or intended for that
    business.

2. The worker is injured by reason of the employers
    negligence.

3. The worker is injured by reason of the negligence
    of a person in the employers service who is acting within the scope of his or
    her employment.

[9]

The appellant submits that public policy prevents workers from
    contracting out of the protection afforded by s. 114. That public policy,
    explicitly stated in s. 1 of the Act, includes ensuring employees injured in
    workplace accidents receive compensation. The appellant submits that allowing
    Part X employers to require their employees to waive their right to seek
    compensation would frustrate this public policy goal. In advancing the
    argument, the appellant relies on the following proposition from
Halsburys Laws of England
that the Supreme Court of
    Canada cited with approval in its decision in
Ontario (Human Rights
    Commission) v. Etobicoke (Borough)
, [1982] 1 S.C.R. 202:

421. Contracting out.
As a general rule, any person can enter into a binding contract to
    waive the benefits conferred on him by an Act of Parliament, or, as it is said,
    can contract himself out of the Act, unless it can be shown that it would be
    contrary to public policy to allow such an agreement. Statutory conditions may,
    however, be imposed in such terms that they cannot be waived by agreement; and,
    in certain circumstances, it is expressly provided that any such agreement
    shall be void.

By way of example of an exception to the
    general rule,
an agreement between an employer and
    employee whereby the latter agrees to waive a statutory duty imposed on the
    former in the interests of safety is generally not binding on the employee
.
    [Emphasis added.]

[10]

The
    appellant submits the waiver he signed should be declared void given the
    importance of the public policy in favour of workers compensation.

[11]

It
    must be said that the appellant did not make this argument to the motion judge,
    and that before us it was advanced only on a general level. Nevertheless, the
    argument raises an important question of public policy and we entertained it.
    After the hearing, it was necessary to ask the parties for written submissions
    on particular provisions of the statute.

[12]

I
    begin with an overview of the legislation, including a review of its history.

(1)

Overview of the WSIA

[13]

At
    common law, before the advent of workers compensation schemes, a workers
    action against an employer to recover damages for an injury suffered in the
    workplace faced formidable hurdles.

[14]

First,
    there was the doctrine of voluntary assumption of risk. The common law presumed
    the worker voluntarily assumed the ordinary risks of his or her employment. At
    common law, it is an implied term of a contract of service that a servant
    takes upon himself the risks incidental to his employment: 22 Halsburys Laws
    of England, 2nd ed. p. 176, s. 296. See also: this courts decision in
Manor
    v. Marshall
, [1955] O.R. 586, [1955] 4 D.L.R. 584.

[15]

Second,
    the doctrine of common employment meant that the employer was not liable for a
    workers injury that resulted from the negligence of a co-worker:
Priestley
    v. Fowler
(1837), 150 E.R. 1030 (Exch.).

[16]

Third,
    the employer was not responsible for workplace injuries caused by defects in
    machinery, equipment or tools used in the workplace.

[17]

Fourth,
    in accordance with the general common law tort principle regarding contributory
    negligence, an injured worker who was just slightly negligent was barred any
    recovery from the employer:
Hall v. Hebert
, [1993] 2 S.C.R. 159 at 205.

[18]

Fifth,
    in order for a workers action to be successful, the worker had to prove the
    employers personal negligence was the direct and proximate cause of the
    injury:
Jamieson v. Harris
(1905), 35 S.C.R. 625.

[19]

An
    older version of Halsburys provided a concise summary of the common law:

It is an implied term of the contract of service at common law
    that a servant takes upon himself the risks incidental to his employment. Apart
    from special contract or statute, therefore, he cannot call upon his master,
    merely upon the ground of their relation of master and servant, to compensate
    him for any injury which he may sustain in the course of performing his duties,
    whether in consequence of the dangerous character of the work upon which he is
    engaged, or of the breakdown of machinery, or of the negligence or default of
    his fellow servants or strangers. The master does not warrant the safety of the
    servants employment; he undertakes only that he will take all reasonable
    precautions to protect him against accidents. [22 Halsburys Laws of England,
    2nd ed. p. 176, s. 296]

[20]

The common laws treatment of workplace injuries meant a great
    many workers and their survivors were unable to recover medical expenses, lost
    wages or damages. Workers voluntarily assumed the ordinary risks of their
    employment.

[21]

The
    Legislature responded in 1914 by enacting workers compensation legislation.
    The overarching purpose of the legislation was t
o provide
    compensation and other benefits to workers injured at work regardless of fault.
The main thrust of the legislation was to set up an administrative scheme that
    provided no-fault loss of earnings benefits for workplace injuries that
    completely displaced all common law rights of action that workers may have had
    against their employer. A small minority of workers were not included in the
    general scheme. They were given access to new statutory rights of action for
    damages.

[22]

While
    the legislation has been amended many times, the basic scheme remains much the
    same. The WSIA is its present incarnation. Under the WSIA, the general rule is
    that an insurance fund guarantees payment of benefits to workers who suffer
    injuries in the workplace no matter how the injuries are caused. Employers fund
    the insurance plan. The scheme is administered by an independent agency. There
    are Schedule 1 and Schedule 2 employers. Employers in Schedule 1 industries are
    liable to contribute to the insurance fund and employers in Schedule 2 are
    individually liable to pay benefits under the insurance plan under the Acts
    general provisions.

[23]

In
    exchange for certain and secure compensation for their injuries, workers in
    Schedule 1 and Schedule 2 industries give up their right to sue their employer
    for their injuries. Several sections of the Act provide for this trade-off.
    Section 26(1) provides that [n]o action lies to obtain benefits under the
    insurance plan, but all claims for benefits will be determined by the Board
    that administers the Act. Section 26(2) provides that [e]ntitlement to
    benefits under the insurance plan is in lieu of all rights of action (statutory
    or otherwise) that a worker has or may have against the employer for or by
    reason of a workplace accident. Section 28 provides that workers are not
    entitled to commence an action against a Schedule 1 or Schedule 2 employer.
    Section 29 provides that an employer who is found to be at fault or negligent
    in respect of an accident or disease that gives rise to entitlement to benefits
    under the Act is not liable to pay any damages to a worker or to contribute to
    or indemnify another person who may be liable to pay such damages. Section 31
    of the Act provides the Appeals Tribunal, established by the Act, the exclusive
    jurisdiction to determine whether the Act takes away a workers right to
    commence an action.

[24]

In
    short, the legislation makes absolutely clear that the general scheme that
    provides no-fault loss of earnings benefits to workers completely displaces all
    common law rights of action that workers may have had against their employer.

[25]

Part
    X of the WSIA is a small exception to this general scheme.  Part X applies to
    the small number of workers not employed in either Schedule 1 or Schedule 2
    industries. Employers under Part X neither contribute to the insurance fund nor
    are liable to pay benefits. Rather, Part X provides workers with certain
    statutory rights of action for damages that abrogate some of the common law
    doctrines that restricted a workers right to recover.

[26]

First,
    s. 114(1)1 allows a worker to sue the employer for an injury resulting from a
    defect in the condition or arrangement of the ways, works, machinery, plant,
    buildings or premises used in the employers business or connected with or
    intended for that business. Second, s. 114(1)3 allows the worker to sue the
    employer for an injury caused by the negligence of persons in the employers
    service acting within their scope of employment. Third, in some circumstances
    s. 115 allows an injured worker to sue the person for whom work is being done
    under a contract and the contractor and subcontractor, if any. Fourth, s.
    116(3) provides that contributory negligence by the worker is not a bar to
    recovery. Fifth, s. 116(2) provides that [a]n injured worker shall not be
    considered to have voluntarily incurred the risk of injury that results from
    the negligence of his or her fellow workers. Sixth, s. 116(1) curtails the
    common law doctrine of voluntary assumption of risk, but does not eliminate it.
    Section 114(1)2, which provides a worker may bring an action against his or her
    employer when injured by the employers negligence, should also be noted. When
    considered in the context of the above mentioned provisions, s. 114(1)2 allows
    a much broader action for an employers negligence than was possible at common
    law.

[27]

The
    legislation contains an additional measure to ensure workers receive the
    damages awarded. Section 117 of the WSIA deems any employers insurance for its
    liability for damages to be for the benefit of the worker, and prohibits an
    insurer from paying insurance proceeds to the employer without the consent of
    the worker until the workers claim has been satisfied.

[28]

Plainly,
    Part Xs statutory actions serve the general public policy of the WISA to
    ensure workers receive compensation for injuries they suffer in the workplace.

(2)

Interim Conclusion

[29]

In
    my view, absent some legislative indication to the contrary, it would be
    contrary to public policy to allow individuals to contract out of the
    protection of the WSIA.

[30]

Ontario
    (Human Rights Commission) v. Etobicoke (Borough)
, [1982] 1 S.C.R. 202, 132
    D.L.R. (3d) 14, and
Craton v. Winnipeg School Division No. 1
, [1985] 2
    S.C.R. 150, 21 D.L.R. (4th) 1, two cases in which the Supreme Court concluded
    individuals could not contract out of a particular public statute, both
    involved human rights codes. However, McIntyre J., writing for the unanimous
    court in
Etobicoke
, used language that makes clear the principle isnt
    limited to human rights legislation. He said, at pp. 213-14:

Although the Code contains no explicit restriction on such
    contracting out, it is nevertheless a public statute and it constitutes public
    policy in Ontario as appears from a reading of the Statute itself and as
    declared in the preamble. It is clear from the authorities, both in Canada and
    in England, that parties are not competent to contract themselves out of the
    provisions of such enactments and that contracts having such effect are void,
    as contrary to public policy.

The Ontario Human Rights Code
has been enacted by the
    Legislature of the Province of Ontario for the benefit of the community at
    large and of its individual members and clearly falls within that category of
    enactment which may not be waived or varied by private contract

[31]

In
    supporting his conclusion, McIntyre J. cited
R. v. Roma
, [1942] 3
    W.W.R. 525, a decision of the British Columbia Supreme Court in which Robertson
    J. found the
Government Vessels Discipline Act
, R.S.C. 1927, c. 203,
    to be a public Act designed as a matter of public policy to protect all seamen
    proposing to engage in service on government vessels and that its provisions accordingly
    could not be waived.

[32]

McIntyre
    J. also cited
Dunn v. Malone
, [1903] O.J. No. 180, 6 O.L.R. 484, a
    decision of the Divisional Court that concluded that the
Interest Act
,
1897
, was enacted on public policy grounds for the benefit of
    borrowers and its application could not be waived.

[33]

Recently,
    the British Columbia Court of Appeal held that, given that the province had
    enacted a comprehensive universal automobile insurance scheme, it would be
    contrary to public policy to allow an owner/operator of a motor vehicle to
    contract out of liability for damages for injuries sustained in a motor vehicle
    accident. N.J. Garson J.A., writing for the majority in
Niedermeyer v.
    Charlton
, 2014 BCCA 165, 374 D.L.R. (4th) 79 at para. 114, concluded:

In my view, the ICBC regime is intended as a benefit for the
    public interest just as is human rights legislation. It would be contrary to
    public policy and to a harmonious contextual interpretation of the legislation
    to allow private parties to contract out of this regime. As such, to the extent
    that the Release purports to release liability for motor vehicle accidents it
    is contrary to public policy and is unenforceable. The judge erred in finding
    that the public policy interest exemplified in a compulsory universal insurance
    scheme was incapable of defeating society's interest in freedom of contract.

[34]

I
    recognize that the courts should exercise extreme caution in interfering with
    the freedom to contract on the grounds of public policy. Considering the
    sweeping overriding of the common law made by workers compensation legislation
    and the broad protection it is designed to provide to workers in the public
    interest, it would be contrary to public policy to allow employers and workers
    to contract out of its regime, absent some contrary legislative indication.

[35]

I
    turn now to a consideration of whether there is in the WSIA some contrary
    legislative indication.

(3)

Section 16

[36]

The Legislature did address the subject of waiver in s. 16
    of the Act. Section 16 is found in Part III of the Act, which deals with
    Insured Employment. Section 16 prohibits waiving the entitlement to
benefits under the insurance plan
. The section provides:

An agreement between a worker and his or her employer
    to waive or to forego any benefit to which the worker or his or her survivors
    are or may become entitled under the insurance plan is void.

[37]

By
    contrast, Part X of the Act contains no provision equivalent to s. 16. This
    raises the question whether the canon of construction
expressio unius est
    exclusio alterius
, i.e. the implied exclusion principle, applies. Should
    the Legislatures narrow focus in s. 16 on prohibiting waiver of only the
    benefits under the insurance plan be understood as an implicit indication that
    the Legislature did not intend to prohibit the waiver of the rights of action
    available under Part X?

[38]

This
    court applied the implied exclusion principle in
University Health Network
    v. Ontario (Minister of Finance)
, [2001] O.J. No. 4485, 208 D.L.R. (4th)
    459. In that case, the court was faced with the question whether the Network,
    created by the amalgamation of three health facilities, was exempt from paying
    retail sales tax. The court held that the inclusion of an explicit tax
    exemption in the amalgamation legislation of another health care facility and
    the absence of such an exemption in the amalgamation legislation of the Network
    indicated that the Legislature did not intend the Network to have an exemption.

[39]

Writing
    for the court, Laskin J.A. cited, at para. 31, a principle explained by
    Professor Ruth Sullivan in
Driedger on the Construction of Statutes
3d
    ed. (Toronto: Butterworths, 1994) at p. 168:

An implied exclusion argument lies whenever there is reason to
    believe that if the legislature had meant to include a particular thing within
    the ambit of its legislation, it would have referred to that thing expressly.

[40]

Laskin
    J.A. explained, at para. 32, that legislative exclusion can be implied when an
    express reference is expected but absent.

[41]

However,
    there are many cases in which the principal is not applied. The Supreme Court
    declined to apply the principle in
Turgeon v. Dominion Bank
, [1930]
    S.C.R. 67, [1929] 4 D.L.R. 1028. Writing for the court, Newcombe J. recognized,
    at p. 71, that the principle could prove useful but also observed that while
    it is often a valuable servant, it is a dangerous master to follow. The
    context must always be considered and general rules of interpretation are not
    always in the mind of the drafter so the axiom is held not to be of universal
    application.

[42]

In
Jones v. Canada (Attorney General)
,

[1975] 2 S.C.R. 182 at
    pp. 195-96, 45 D.L.R. (3d) 583, Laskin C.J., writing for the court, said:

Heavy reliance was placed by the appellant upon the canon of
    interpretation expressed in the maxim
expressio unius est exclusio alterius
.
    This maxim provides at the most merely a guide to interpretation; it does not
    pre-ordain conclusions.

[43]

More
    recently, the Supreme Court declined to apply the principle in
A.Y.S.A.
    Amateur Youth Soccer Association v. Canada

Revenue Agency,
2007
    SCC 42, [2007] 3 S.C.R. 217. Rothstein J. wrote, at para. 15, that arguments
    based on implied meaning must be viewed with caution. He approved of Professor
    Sullivans statement at p. 266 of her book:

While reliance on implied exclusion for this purpose
    [determining if a provision is exhaustive] can be helpful, it can also be
    misleading. What the courts are looking for is evidence that a particular
    provision is meant to be an exhaustive statement of the law concerning a
    matter. To show that the provision expressly or specifically addresses the
    matter is not enough. [Footnote deleted.]

[44]

Rothstein
    J. reiterated, at para. 16, that the modern approach to statutory construction
    is the words of an Act 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.

[45]

Reading
    the WSIA as a whole, it is apparent its objective is to ensure injured workers
    have access to compensation. It employs two different means to accomplish that
    objective. The first means provides workers with an insurance plan and completely
    eliminates workers civil actions. In the part of the Act dealing with the
    first means, it was necessary to prohibit only the waiver of benefits under the
    insurance plan. The second means, Part X, makes numerous changes to the common
    law to achieve the same statutory objective by providing workers with rights of
    action for damages. It seems to me that applying the implied exclusion principle
    to s. 16 to infer a worker can waive the rights provided by Part X would
    fundamentally undermine what the Legislature is trying to achieve in Part X.

[46]

Hence,
    I would conclude that a reading of the Act as a whole does not support
    interpreting s. 16 as impliedly indicating that the Legislature intended to
    permit the waiver of the statutory actions created by Part X. The two different
    means by which the object of the Act is secured must each be interpreted on its
    own terms.

(4)

Section 116(1)

[47]

Section
    116(1) of the WSIA provides:

An injured worker shall not be considered to have
    voluntarily incurred the risk of injury in his or her employment
solely
on the grounds that, before he or she was
    injured, he or she knew about the defect or negligence that caused the injury.
    [Emphasis added.]

[48]

The
    original version of s. 116(1) in the 1914 Act, s. 106(4), provided:

A workman shall not by reason
only
of his continuing in the employment of the employer with knowledge of the
    defect or negligence which caused his injury be deemed to have voluntarily
    incurred the risk of the injury. [Emphasis added.]

[49]

The
    word only has been included in every version of the legislation from 1914
    until the WSIA was enacted using the word solely. I see no difference in the
    import of the two words.

[50]

At
    first glance, the word solely in the present statute and the word only in
    the earlier versions might be taken to indicate the Legislature did not
    entirely eliminate the common law principle of a workers voluntary assumption
    of the ordinary risks in the workplace, but merely limited it.

[51]

Understanding
    the word solely in s. 116(1) to indicate that the Legislature intended to
    allow a worker, by clear waiver, to voluntarily assume the risk of injury does
    not sit well with s. 116(2). Section 116(2) provides:

An injured worker shall not be considered to have
    voluntarily incurred the risk of injury that results from the negligence of his
    or her fellow workers.

[52]

The
    word solely does not appear in s. 116(2) of the present Act and the word
    only did not appear in earlier versions of the legislation. The legislative
    scheme would lack coherence and make little sense if it allowed a worker to
    voluntarily assume the risk of the employers negligence but not a co-workers
    negligence. This is particularly so because s. 114(1)3 makes the employer
    responsible for damages caused by the negligence of the co-worker.

[53]

The
    key, in my view, is to consider again the common law principle that the
    legislation swept aside. The common law principle was that a servant assumed
    all of the ordinary risks incident to his or her employment. By entering upon
    and continuing in the employers service, the servant was presumed to take upon
    himself or herself the natural and ordinary risks and perils of the work.

[54]

Eric
    Tucker explained the rationale for this principle in The Law of Employers
    Liability in Ontario 1861-1900: The Search for a Theory (1984) 22:2 Osgoode
    Hall Law Journal 213:

An employee who was aware of a particular risk would be deemed
    to have negotiated for compensation in order to incur that risk. The terms of
    the contract would reflect the parties valuation of the risk and therefore it
    would be unjust and improper for the court to make the employer pay twice by
    shifting losses from the employee onto the employer.

[55]

Tucker
    identifies this principle, at p. 236, as [t]he doctrine that most strongly
    expressed the dominance of the contractual concept in regulating health and
    safety. The effect of the principle was that the sole or only basis on
    which the courts applied the voluntary assumption of risk doctrine was that the
    worker knew they were engaged in dangerous work. It seems to me that the
    inclusion of the word solely" or only" in various versions of the
    legislation must have been intended as an emphatic rejection of the common law
    principle that the workers knowledge could be the sole or only basis for
    invoking the voluntary assumption of risk doctrine. Admittedly, the language is
    awkward. However, ascribing a different meaning to the words of s. 116(1) would
    construe the statute to permit a worker to contract out of an employers
    negligence, but not the negligence of coworkers for which the statute makes the
    employer responsible. As Professor Sullivan notes, [e]ven when the ordinary
    meaning of a legislative text is clear, the courts are obliged to look to other
    indicators of legislative meaning as part of the work of interpretation. The
    presumption in favour of ordinary meaning is rebutted by evidence that another
    meaning was intended or is more appropriate in the circumstances:
Sullivan
    on the Construction of Statutes
, 5th ed (Markham: LexisNexis, 2008) at p.
    45. In the circumstances, s. 116(1) must be interpreted as a categorical
    rejection of the common law approach to the voluntary assumption of risk,
    rather than as allowing workers to contract out of Part X.

(5)

Conclusion

[56]

Other
    than for ss. 16 and 116(1), there are no other provisions of the WSIA that
    could be taken to indicate a legislative intent to permit individuals to
    contract out of the statutes provisions. There being no legislative indication
    to the contrary, I conclude it would be contrary to public policy to allow
    individuals to contract out of the provisions of Part X of the WSIA.

[57]

I
    would allow the appeal, set aside the order of the motion judge granting
    summary judgment and allow the appellants action to proceed to trial.

[58]

I
    would set aside the motion judges costs order but make no other order as to
    costs. The appellant did not advance the WSIA argument before the motion judge
    and advanced it in this court in a cursory fashion. Moreover, this case
    involved a novel and important general point of law.

Released: January 26, 2016 (KF)

R.G.
    Juriansz J.A.

I
    agree K. Feldman J.A.

I
    agree David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Flintoff v. Crown William Mining Corporation, 2016
    ONCA 86

DATE: 20160129

DOCKET: C60449

Pepall, Pardu and Roberts JJ.A.

BETWEEN

Kevin
    Flintoff, Ken Parish, Marie Parish, Stan Parish, Lois Parish,

Connie Parkinson, Brian Parkinson, Ines Primc, Tari Rinder,

Craig Robinson, Frank
    Workman and Gilbert Di Lucia

Plaintiffs (Respondents)

and

Crown
    William Mining Corporation,
Sablo Management Inc.

and
    Shamrock Group S.A.

Defendants (
Appellants
)

Douglas D. Langley, for the appellants

David Milosevic, for the respondents

Heard: January 7, 2016

On appeal from the judgment of Justice Wolfram
    Tausendfreund of the Superior Court of Justice, dated April 15, 2015, with
    reasons reported at 2015 ONSC 2027.

Pardu J.A.:

[1]

Sablo Management Inc. and Shamrock Group S.A. appeal
    from the summary judgment motion judges decision holding that the respondents
    successfully exercised an option contained in an asset purchase agreement
    (APA).

[2]

The respondents had been victimized by a
    fraudster, Emilia von Anhalt, and obtained judgments against her. Crown William
    Mining Corporation, a corporation controlled by the appellants, purchased the
    respondents judgments. In exchange, the respondents received two promissory
    notes and 200,000 shares of Crown William.

[3]

The APA also contained a Put-Right option
    which provided that, following a two-year holding period, the respondents could
    compel the appellants to purchase the shares for $3.00 a share. The option
    could be exercised only during a one-year period commencing on January 22,
    2013.

[4]

The respondents attempted to exercise the
    Put-Right option, but the appellants did not purchase the shares as promised.
    The respondents then commenced the present action and, in the proceedings
    below, obtained summary judgment.

[5]

The appellants argue that the motion judge erred
    in granting summary judgment in favour of the respondents in several respects:

·

The Put-Right option was a unilateral contract.
    The appellants were therefore not obliged to buy the shares unless the
    respondents were in strict compliance with the terms of the option. The motion
    judge erred by concluding that substantial compliance with the terms of the option
    was sufficient. The respondents failure to provide certificates pursuant to
    s. 116 of the
Income Tax Act
, R.S.C.
    1985, c. 1 (5th Supp.), vitiated the appellants obligation to purchase the
    shares. In addition, failure to give notice of default precisely as required by
    the APA means that the respondents were precluded from starting the present
    action.

·

One of the respondents, Tari Rinder, had signed
    a release that barred her claim in the present action.

·

The motion judge erred in the remedy granted. He
    could not require that the appellants fulfil the terms of the Put-Right option
    as this was not an action for specific performance. Moreover, he should have
    reduced the damages awarded by the value of the shares still held by the
    respondents.

A.

Analysis

(1)

Standard of Review

[6]

In
Sattva Capital Corp. v. Creston
    Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, the Supreme
    Court declared that contractual interpretation will generally engage questions
    of mixed fact and law. A motion judges interpretation of a contract will
    attract deference and will not be overturned absent palpable and overriding
    error or an extricable legal error. As noted by Rothstein J. at para. 55, the
    circumstances in which a question of law can be extricated from the
    interpretation process will be rare.

(2)

Was the Put-Right Option a Unilateral or
    Bilateral Contract?

[7]

I begin with the observation that this was a highly
    idiosyncratic contract, the interpretation of which affected only these
    parties. Determining whether an option contained within a contract amounts to a
    separate unilateral agreement is an exercise driven by the context and the
    contractual language. In
S
ail Labrador Ltd. v. Challenge One (The)
, [1999]
    1 S.C.R. 265, at para. 41, Bastarache J. stated that :

Whether a contract which contains an option clause establishes
    a single, bilateral contract or two separate contracts, one bilateral and the
    other unilateral, is a matter of construction. Courts must examine the text of
    the contract and the context surrounding it in order to determine the intention
    of the parties, keeping in mind that this Court has previously approved of the
    tendency by courts to treat offers as calling for bilateral rather than
    unilateral performance whenever a contract can fairly be so construed.
    [Citation omitted.]

[8]

Deciding whether the Put-Right option was part of a bilateral agreement
    or a separate unilateral agreement is a question of mixed fact and law. The
    appellants have not identified an extricable legal error. Therefore, in the
    absence of a palpable and overriding error, the motion judges conclusion that
    the Put-Right option is part of a bilateral contract is owed deference.

[9]

The motion judges conclusion that the Put-Right option was part of a
    bilateral contract contained in the APA was reasonable and supported by the
    evidence. Crown William, a company controlled by the appellants, purchased the
    respondents judgments against Ms. von Anhalt. As noted by the motion judge,
    the shares received by the respondents were essentially security for the sum
    of $400,000 and that sum was part of the purchase price due to the
    respondents. Exercising the Put-Right option was the mechanism that would allow
    the respondents to receive that part of the purchase price. In other words, the
    option was part and parcel of the consideration received by the respondents and
    not just an isolated agreement separate from the rest of the APA.

(3)

Were the Respondents in Substantial Compliance with the Notice Provisions
    of the APA?

[10]

Having
    concluded that the APA was a bilateral contract, the motion judge also
    concluded that the doctrine of substantial compliance applied. Therefore, the
    respondents had sufficiently complied with the notice provisions of the APA.

[11]

Article
    5.2 of the APA provides that the respondents could compel the appellants to
    purchase their shares by delivering notice in writing to the appellants.
    Closing was to take place ten business days after the respondents gave notice. Article
    9 provided that if the appellants failed to purchase the shares in accordance
    with Article 5, the respondents were entitled to exercise any remedies
    available to them five business days after providing written notice specifying
    the default and informing the appellants that the respondents intended to
    exercise their remedies.

[12]

The
    respondents wrote to the appellants on February 25, 2013, to give notice that
    they wished to exercise the Put-Right option and requesting payment, failing
    which an action would be commenced. The appellants responded incorrectly that
    this notice was premature.

[13]

On
    December 9, 2013, the respondents sent another letter in which they demanded
    payment for the shares no later than January 2, 2014. The respondents did not
    deliver any additional written notice of default.

[14]

The
    motion judge concluded:

It should have been clear to all parties that Sablo and
    Shamrock did not purchase the [respondents] shares of Crown William, as
    contemplated by section 5 of the [APA].  These [appellants] were thus in
    default on their obligation to purchase the [respondents] shares.  The
    notice of December 9, 2013 requested payment for the shares by January 2, 2014,
    a time period far longer than the five business days contemplated by section
    9.2 of the [APA].

I find that the [respondents] have substantially complied with
    the notice requirement as contemplated by section 9 of the [APA].

[15]

There
    is no basis to interfere with this conclusion.

(4)

Did the Failure to provide s. 116 Certificates mean that the Respondents
    could not compel the Appellants to Purchase the Shares?

[16]

The
    APA provided that:

On closing, Sablo and Shamrock (or either of them) shall pay
    the purchase price in full as each Vendor shall direct, to or to the order of
    the Vendor (or as each Vendor shall direct), and the Vendor shall deliver the
    certificates representing the Shares, duly endorsed for transfer If a Vendor
    is a non-resident of Canada, it will provide Sablo or Shamrock a certificate
    under section 116 of the
Income Tax
Act failing which Sablo or
    Shamrock may be required to withhold and remit a portion of the purchase price
    as Canadian tax which the Vendor may recover by filing a Canadian tax return
    reporting the gain on the sale of the Shares.

[17]

The
    motion judge held that this provision was not a precondition for the
    respondents to exercise the Put-Right option. Therefore, the respondents
    failure to provide s. 116 certificates did not vitiate the appellants
    obligation to buy the shares. That conclusion was reasonable.

[18]

According
    to the express terms of the APA, a non-resident vendor had to provide a s. 116
    certificate at the time of closing. If they did not provide such a certificate
    the appellants were to remit the appropriate withholding tax. This was not a
    precondition, but was a matter to be dealt with on closing.

(5)

Did the Release bar Ms. Rinders Claim?

[19]

The
    appellants and Ms. Rinder, but none of the other respondents, entered into a
    release and confidentiality agreement in addition to the APA. The agreement
    released the appellants from all claims that Ms. Rinder may have had against
    them as of the date of the agreement. The agreement was dated April 19, 2011.

[20]

Before
    the motion judge, the appellants argued that this agreement barred Ms. Rinders
    claim against them. The motion judge concluded that, as Ms. Rinders claim
    arose after April 19, 2011, it was not barred.

[21]

The
    motion judges interpretation of the release agreement was reasonable. The
    release expressly applied to claims for any matter whatsoever from the beginning
    of time up through the effective date of this agreement. The respondents could
    not exercise the Put-Right option until January 22, 2013. Their causes of
    action, including Ms. Rinders, did not arise until after notice was given and
    the appellants failed to purchase the shares, well after the effective date of
    the release agreement.

(6)

Did the Motion Judge err in the Remedy Granted?

[22]

The
    motion judge ordered that the appellants should pay $600,000 to the respondents
    and that [u]pon payment of the amount due to each plaintiff, the number of
    shares held by such plaintiff shall be transferred to Sablo and Shamrock, or as
    they may direct. The appellants argue that the motion judge erred by granting
    specific performance when the respondents notice of motion only asked for
    summary judgment and damages. I would reject that submission. The appellants were
    not prejudiced by a judgment squarely within the terms of the relief claimed in
    the statement of claim.

[23]

The
    appellants also argue that the motion judge erred in setting the quantum of
    damages awarded. They argue that he should have reduced the damages awarded by
    the value of the shares still held by the respondents. However, given the
    motion judges order, there is no question here of the respondents collecting
    payment for the shares and also retaining them. Therefore, I would uphold the
    remedy granted by the motion judge.

B.

disposition

[24]

Accordingly,
    I would dismiss the appeal with costs to the respondents fixed at $11,000,
    inclusive of disbursements and HST.

Released: (L.B.) January 29, 2016

G. Pardu J.A.

I agree S.E. Pepall
    J.A.

I agree L.B. Roberts
    J.A.